##### 



SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
 
 Form 10-Q
 (Mark One)  x

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 For The Quarterly Period Ended March 31, 2005 or   ̈

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
For the transition period from:      Not Applicable Commission file number 1-14776 Hearst-Argyle Television, Inc. (Exact Name of Registrant as Specified in Its Charter)
 Delaware
    
    74-2717523(State or other jurisdiction of
incorporation or organization)
    
    (I.R.S. Employer Identification No.)888 Seventh AvenueNew York, NY 10106
    
    (212) 887-6800(Address of principal executive offices)
    
    (Registrants telephone number, including area code)
 SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: Title of Each Class
    
    Name of Each Exchange On Which RegisteredSeries A Common Stock, par value
$.01 per share
    
    New York Stock Exchange
 SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
None Indicate by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve
months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.      Yes x      No  ̈ Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule
12b-2 of the Exchange Act).      Yes x      No  ̈ Shares of the registrants Common Stock outstanding as of April 22, 2005: 92,809,950
shares (consisting of 51,511,302 shares of Series A Common Stock and 41,298,648 shares of Series B
Common Stock).




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##### 



Hearst-Argyle Television, Inc. Index PagePart I
    
    Financial Information
    
    No.Item 1.
    
    Financial StatementsCondensed Consolidated Balance Sheets as of March 31, 2005 (unaudited)
and December 31, 2004
    
    
    1Condensed Consolidated Statements of Income for the Three Months Ended
March 31, 2005 and 2004 (unaudited)
    
    
    2Condensed Consolidated Statements of Cash Flows for the Three Months Ended
March 31, 2005 and 2004 (unaudited)
    
    
    3Notes to Condensed Consolidated Financial Statements
    
    
    4Item 2.
    
    Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    12Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    16Item 4.
    
    Controls and Procedures
    
    
    16Part II
    
    Other InformationItem 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    17Item 6.
    
    Exhibits
    
    
    18Signatures
    
    
    19




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Part I Financial Information Item 1. Financial Statements HEARST-ARGYLE TELEVISION, INC. Condensed Consolidated Balance Sheets March 31,2005
    
    
    December 31,(unaudited)
    
    
    2004(In thousands, except share data)AssetsCurrent assets:Cash and cash equivalents
    
    $
    99,044
    
    
    $
    92,208Accounts receivable, net
    
    
    139,764
    
    
    
    147,536Program and barter rights
    
    
    35,529
    
    
    
    55,242Deferred income taxes
    
    
    4,979
    
    
    
    4,979Other
    
    
    6,696
    
    
    
    6,541Total current assets
    
    
    286,012
    
    
    
    306,506Property, plant and equipment, net
    
    
    288,279
    
    
    
    291,840Intangible assets, net
    
    
    2,426,761
    
    
    
    2,428,265Goodwill
    
    
    734,746
    
    
    
    734,746Other assets:Deferred financing costs, net
    
    
    12,062
    
    
    
    12,452Investments
    
    
    26,659
    
    
    
    26,362Program and barter rights, noncurrent
    
    
    1,266
    
    
    
    1,884Other
    
    
    38,373
    
    
    
    40,085Total other assets
    
    
    78,360
    
    
    
    80,783Total assets
    
    $
    3,814,158
    
    
    $
    3,842,140Liabilities and Stockholders EquityCurrent liabilities:Accounts payable
    
    $
    9,275
    
    
    $
    8,901Accrued liabilities
    
    
    57,196
    
    
    
    63,640Program and barter rights payable
    
    
    37,068
    
    
    
    57,056Payable to The Hearst Corporation, net
    
    
    4,297
    
    
    
    4,846Other
    
    
    5,981
    
    
    
    3,465Total current liabilities
    
    
    113,817
    
    
    
    137,908Program and barter rights payable, noncurrent
    
    
    2,042
    
    
    
    3,107Long-term debt
    
    
    882,205
    
    
    
    882,221Note payable to Capital Trust
    
    
    134,021
    
    
    
    134,021Deferred income taxes
    
    
    842,477
    
    
    
    839,746Other liabilities
    
    
    81,269
    
    
    
    80,049Total noncurrent liabilities
    
    
    1,942,014
    
    
    
    1,939,144Series A and B preferred stock to be redeemed
    
    
    
    
    
    
    11,251Commitments and contingenciesStockholders equity:Preferred stock, par value $0.01 per share, 1,000,000 shares authorized
    
    
    
    
    
    
    Series A common stock
    
    
    553
    
    
    
    552Series B common stock
    
    
    413
    
    
    
    413Additional paid-in capital
    
    
    1,283,359
    
    
    
    1,281,474Retained earnings
    
    
    575,755
    
    
    
    569,178Accumulated other comprehensive loss, net
    
    
    (6,161
    )
    
    
    (6,161
    )Treasury stock, at cost
    
    
    (95,592
    )
    
    
    (91,619
    )Total stockholders equity
    
    
    1,758,327
    
    
    
    1,753,837Total liabilities and stockholders equity
    
    $
    3,814,158
    
    
    $
    3,842,140
 See notes to condensed consolidated financial statements. 1




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HEARST-ARGYLE TELEVISION, INC. Condensed Consolidated Statements of Income Three Months Ended March 31,2005
    
    2004(Unaudited)(In thousands, except per share data)Total revenue
    
    $
    162,279
    
    
    $
    166,864Station operating expenses:Salaries, benefits and other operating costs
    
    
    88,624
    
    
    
    84,594Amortization of program rights
    
    
    15,333
    
    
    
    15,311Depreciation and amortization
    
    
    13,138
    
    
    
    12,495Corporate, general and administrative expenses
    
    
    5,916
    
    
    
    5,589Operating income
    
    
    39,268
    
    
    
    48,875Interest expense, net
    
    
    15,701
    
    
    
    16,416Interest expense, net  Capital Trust
    
    
    2,438
    
    
    
    3,750Equity in income of affiliates, net
    
    
    (307
    )
    
    
    (199
    )Income before income taxes
    
    
    21,436
    
    
    
    28,908Income taxes
    
    
    8,361
    
    
    
    11,014Net income
    
    
    13,075
    
    
    
    17,894Less preferred stock dividends
    
    
    2
    
    
    
    272Income applicable to common stockholders
    
    $
    13,073
    
    
    $
    17,622Income per common share  basic
    
    $
    0.14
    
    
    $
    0.19Number of common shares used in the calculation.
    
    
    92,849
    
    
    
    92,902Income per common share  diluted
    
    $
    0.14
    
    
    $
    0.19Number of common shares used in the calculation.
    
    
    93,319
    
    
    
    93,615Dividends per common share declared
    
    $
    0.07
    
    
    $
    0.06
 See notes to condensed consolidated financial statements. 2




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HEARST-ARGYLE TELEVISION, INC.
Condensed Consolidated Statements of Cash Flows Three Months Ended March 31,2005
    
    
    2004(Unaudited)(In thousands)Operating ActivitiesNet income
    
    $
    13,075
    
    
    $
    17,894Adjustments to reconcile net income to net cash provided by operating activities:Depreciation
    
    
    11,634
    
    
    
    10,996Amortization of intangible assets
    
    
    1,504
    
    
    
    1,499Amortization of deferred financing costs
    
    
    390
    
    
    
    728Amortization of program rights
    
    
    15,333
    
    
    
    15,311Program payments
    
    
    (16,053
    )
    
    
    (15,320
    )Deferred income taxes
    
    
    2,731
    
    
    
    2,616Equity in income of affiliates, net
    
    
    (307
    )
    
    
    (199
    )Provision for doubtful accounts
    
    
    131
    
    
    
    (467
    )Dividends received from affiliates
    
    
    
    
    
    
    1,330Changes in operating assets and liabilities:Decrease in Accounts receivable
    
    
    7,641
    
    
    
    18,294Decrease in Other assets
    
    
    1,557
    
    
    
    611(Decrease) increase in Accounts payable and accrued liabilities.
    
    
    (7,570
    )
    
    
    3,475Increase (decrease) in Other liabilities
    
    
    4,687
    
    
    
    (2,515
    )Net cash provided by operating activities
    
    
    34,753
    
    
    
    54,253Investing ActivitiesPurchases of property, plant and equipment:Digital projects
    
    
    (2,654
    )
    
    
    (209
    )Maintenance projects
    
    
    (4,058
    )
    
    
    (3,204
    )Special projects
    
    
    (1,361
    )
    
    
    (3,117
    )Other, net
    
    
    12
    
    
    
    4Net cash used in investing activities
    
    
    (8,061
    )
    
    
    (6,526
    )Financing ActivitiesDividends paid on preferred stock
    
    
    (2
    )
    
    
    (272
    )Dividends paid on common stock
    
    
    (6,500
    )
    
    
    (5,566
    )Series A Common Stock repurchases
    
    
    (3,973
    )
    
    
    Redemption of preferred stock
    
    
    (11,251
    )
    
    
    (1,600
    )Principal payments on capital lease obligations
    
    
    (16
    )
    
    
    (40
    )Proceeds from employee stock purchase plan
    
    
    619
    
    
    
    481Proceeds from stock option exercises
    
    
    1,267
    
    
    
    4,446Net cash used in financing activities
    
    
    (19,856
    )
    
    
    (2,551
    )Increase in cash and cash equivalents
    
    
    6,836
    
    
    
    45,176Cash and cash equivalents at beginning of period
    
    
    92,208
    
    
    
    71,528Cash and cash equivalents at end of period
    
    $
    99,044
    
    
    $
    116,704Supplemental Cash Flow Information:Cash paid during the period for:Interest
    
    $
    6,160
    
    
    $
    6,413Interest on Note payable to Capital Trust
    
    $
    2,438
    
    
    $
    3,750Taxes, net of refunds
    
    $
    16,662
    
    
    $
    14,964
 See notes to condensed consolidated financial statements. 3




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Hearst-Argyle Television, Inc.
Notes to Condensed Consolidated Financial Statements  1.

Basis of Presentation The condensed consolidated financial statements include the accounts of Hearst-Argyle
Television, Inc. and its wholly-owned subsidiaries (the Company or we or us or our), except
for the Companys wholly-owned subsidiary trust (the Capital Trust) which can not be consolidated
under the Financial Accounting Standards Board (FASB) Interpretation No. 46 (revised December
2003), Consolidation of Variable Interest Entities(FIN
46(R)). With the exception of the
unconsolidated subsidiary trust, all significant intercompany accounts have been eliminated in
consolidation. The accompanying unaudited condensed consolidated financial statements do not include all of
the information and notes required by accounting principles generally accepted in the United States
of America for complete financial statements and should be read in conjunction with the Companys
consolidated financial statements included in the Annual Report on our Form 10-K/A for the year
ended December 31, 2004, filed with the Securities and Exchange Commission. In the opinion of
management, all adjustments considered necessary for a fair presentation have been included and are
normal and recurring in nature. Operating results for the three months ended March 31, 2005 and
2004 are not necessarily indicative of the results that may be expected for the full year.  2.

Recent Accounting Pronouncements In December 2004, the FASB issued Statement of Financial Accounting Standards (SFAS)
No. 123(R), Share-Based Payments(SFAS 123(R)), which requires companies to measure and recognize
compensation expense for all stock-based payments at fair value. SFAS 123(R) was to be effective
for all interim periods beginning after June 15, 2005; however, on April 14, 2005, the Securities
and Exchange Commission changed the effective date to fiscal years that begin after June 15, 2005.
Therefore, SFAS 123(R) will be effective for us on January 1, 2006. The Company is currently
evaluating the impact of SFAS 123(R) on its financial position and results of operations. In December 2004, the FASB issued Statement No. 153, Exchanges of Nonmonetary Assets, an
amendment of APB Opinion No. 29(SFAS 153). The amendments made by SFAS 153 are based on the
principle that exchanges of nonmonetary assets should be measured based on the fair value of the
assets exchanged. Further, the amendments eliminate the narrow exception for nonmonetary exchanges
of similar productive assets and replace it with a broader exception for exchanges of nonmonetary
assets that do not have commercial substance. SFAS 153 is effective for nonmonetary asset
exchanges occurring in fiscal periods beginning after June 15, 2005. Therefore, SFAS 153 will be
effective for us on July 1, 2005. We do not anticipate that the adoption of SFAS 153 will have a
material impact on our financial position or results of operations. In March 2005, the FASB issued Financial Interpretation No. 47, Accounting for Conditional
Asset Retirement Obligations, an interpretation of FASB Statement No. 143,(FIN 47). FIN 47
clarifies that an entity must record a liability for a conditional asset retirement obligation if
the fair value of the obligation can be reasonably estimated. FIN 47 is effective no later than
the end of fiscal years ending after December 15, 2005. Therefore, FIN 47 will be effective for
our year ending December 31, 2005. We do not believe the adoption of FIN 47 will have a material
impact on our financial position or results of operations.  3.

Stock-Based Compensation The Company accounts for employee stock-based compensation under Accounting Principles Board
(APB) Opinion No. 25, Stock Issued to Employees(APB 25) and related interpretations. Under
APB 25, because the exercise price of the Companys employee stock options equals the market price
of the underlying stock on the date of grant, the stock options have no intrinsic value and
therefore no compensation expense is recognized. The Company has adopted the disclosure-only
provisions of SFAS No. 123, Accounting For Stock-Based Compensation(SFAS 123). Under SFAS 123,
options are valued at their date of grant and expensed over their vesting period. The following table details the effect on net income and earnings per share had compensation
expense been recorded based on the fair value method under SFAS 123, as amended, utilizing the
Black-Scholes option valuation model: 4




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Hearst-Argyle Television, Inc.
Notes to Condensed Consolidated Financial Statements Three Months EndedMarch 31,(Unaudited)(In thousands,except per share data)2005
    
    
    2004Reported net income
    
    $
    13,075
    
    
    $
    17,894Deduct-Total stock-based employee compensation expense
determined under the fair value method for all
awards, net of related tax
    
    
    (1,214
    )
    
    
    (1,203
    )Pro forma net income
    
    $
    11,861
    
    
    $
    16,691Pro forma net income applicable to common stockholders
    
    $
    11,859
    
    
    $
    16,419Earnings per share:Basic  as reported
    
    $
    0.14
    
    
    $
    0.19Basic  pro forma
    
    $
    0.13
    
    
    $
    0.18Diluted  as reported
    
    $
    0.14
    
    
    $
    0.19Diluted  pro forma
    
    $
    0.13
    
    
    $
    0.18
  4.

Long-Term DebtLong-term debt as of March 31, 2005 and December 31, 2004 consisted of the following: March 31,
    
    
    December 31,2005
    
    
    2004(Unaudited)(In thousands)Senior notes
    
    $
    432,110
    
    
    $
    432,110Private placement debt
    
    
    450,000
    
    
    
    450,000Capital lease obligations
    
    
    141
    
    
    
    291882,251
    
    
    
    882,401Less current portion
    
    
    (46
    )
    
    
    (180
    )Total long-term debt
    
    $
    882,205
    
    
    $
    882,221
 5




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Hearst-Argyle Television, Inc.
Notes to Condensed Consolidated Financial Statements  5.

Earnings Per Share The calculation of basic earnings per share (EPS) for each period is based on the weighted
average number of common shares outstanding during the period. The calculation of dilutive EPS for
each period is based on the weighted average number of common shares outstanding during the period,
plus the effect, if any, of dilutive common stock equivalent shares. The following tables set
forth a reconciliation between basic EPS and diluted EPS, in accordance with SFAS No. 128, Earnings
Per Share. Three Months EndedMarch 31,(Unaudited)(In thousands,except per share data)2005
    
    
    2004Reported net income
    
    $
    13,075
    
    
    $
    17,894Less: Preferred stock dividends
    
    
    (2
    )
    
    
    (272
    )Income applicable to common stockholders
    
    $
    13,073
    
    
    $
    17,622Basic shares
    
    
    92,849
    
    
    
    92,902Basic EPS
    
    $
    0.14
    
    
    $
    0.19Diluted shares
    
    
    93,319
    
    
    
    93,615Diluted EPS
    
    $
    0.14
    
    
    $
    0.19Basic shares
    
    
    92,849
    
    
    
    92,902Assumed exercised of stock options
    
    
    470
    
    
    
    713Diluted shares
    
    
    93,319
    
    
    
    93,615
 The following shares were not included in the computation of diluted EPS, because to do so
would have been anti-dilutive for the periods presented: (i) 5,781 shares of Series A Preferred
Stock, outstanding as of March 31, 2004, which were convertible into Series A Common Stock; and
(ii) 10,938 shares of Series B Preferred Stock outstanding as of March 31, 2004, which were
convertible into Series A Common Stock. The dividends for the Series A and B Preferred Stock were
deducted from Net income for the calculation of Basic and Diluted EPS. There were no shares of
Series A or B Preferred Stock outstanding as of March 31, 2005 and therefore no shares were
included in the computation of diluted EPS. Additionally, the dilution test for the Redeemable Convertible Preferred Securities
related to the Capital Trust is performed for all periods. This test considers only the total
number of shares that could be issued upon conversion and does not consider either the conversion
price or the share price of the underlying common shares. For the three months ended March 31,
2005, 5,127,882 shares of Series A Common Stock to be issued upon the conversion of 2,600,000
shares of Series B 7.5% Redeemable Convertible Preferred Securities related to our Capital Trust
are excluded from the number of common shares used in the calculation of diluted EPS as they would
be antidilutive. For the three months ended March 31, 2004, 7,935,068 shares of Series A Common
Stock to be issued upon the conversion of 1,400,000 shares of Series A 7.5% Redeemable Convertible
Preferred Securities and 2,600,000 shares of Series B 7.5% Redeemable Convertible Preferred
Securities, related to the Capital Trust, are excluded in the number of common shares used in the
calculation of diluted EPS as they would be antidilutive. When the securities related to the
Capital Trust are dilutive, the interest, net of tax, related to the Capital Trust is added back to
Income applicable to common stockholders for purposes of the diluted EPS calculation. On December
31, 2004, we redeemed all of our outstanding Series A Debentures and the Capital Trust concurrently
redeemed all outstanding Series A Redeemable Convertible Preferred Securities. Common stock options to purchase 2,911,712, and 174,905 shares of Series A Common Stock
(before application of the treasury stock method), outstanding as of March 31, 2005 and 2004,
respectively, were not included in the computation of diluted EPS because the exercise price was
greater than the average market price of the common shares during the calculation period.  6.

Goodwill and Intangible Assets Summarized below are the carrying value and accumulated amortization of intangible assets that
are amortizable, as well as the carrying value of those intangible assets with indefinite lives,
and as such are not subject to amortization, and goodwill as of March 31, 2005 and December 31,
2004: 6




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Hearst-Argyle Television, Inc.
Notes to Condensed Consolidated Financial Statements March 31, 2005 (unaudited)
    
    
    December 31, 2004Gross
    
    
    
    
    
    
    Net
    
    
    Gross
    
    
    
    
    
    
    NetCarrying
    
    
    Accumulated
    
    
    Carrying
    
    
    Carrying
    
    
    Accumulated
    
    
    CarryingValue
    
    
    Amortization
    
    
    Value
    
    
    Value
    
    
    Amortization
    
    
    Value(In thousands)Intangible assets subject to amortization:Advertiser client base
    
    $
    122,891
    
    
    $
    67,385
    
    
    $
    55,506
    
    
    $
    122,891
    
    
    $
    66,493
    
    
    $
    56,398Network affiliations
    
    
    95,493
    
    
    
    34,695
    
    
    
    60,798
    
    
    
    95,493
    
    
    
    34,098
    
    
    
    61,395Other
    
    
    743
    
    
    
    565
    
    
    
    178
    
    
    
    743
    
    
    
    550
    
    
    
    193Total intangible assets subject to amortization.
    
    $
    219,127
    
    
    $
    102,645
    
    
    
    116,482
    
    
    $
    219,127
    
    
    $
    101,141
    
    
    
    117,986Intangible assets not subject to amortization 
FCC licenses
    
    
    
    
    
    
    
    
    
    
    2,310,279
    
    
    
    
    
    
    
    
    
    
    
    2,310,279Total intangible assets, net
    
    
    
    
    
    
    
    
    
    $
    2,426,761
    
    
    
    
    
    
    
    
    
    
    $
    2,428,265Goodwill
    
    
    
    
    
    
    
    
    
    $
    734,746
    
    
    
    
    
    
    
    
    
    
    $
    734,746
 The Companys amortization expense for definite-lived intangible assets was approximately $1.5
million for the three months ended March 31, 2005. Estimated annual amortization expense for each
of the next five years related to these intangible assets is approximately $6.0 million.  7.

Income Taxes The provision for income taxes relating to income for the three months ended March 31, 2005
and 2004 consisted of the following: Three Months Ended March 31,2005
    
    
    2004(Unaudited)(In thousands)Current
    
    $
    5,630
    
    
    $
    8,398Deferred
    
    
    2,731
    
    
    
    2,616Provision for income taxes
    
    $
    8,361
    
    
    $
    11,014
 During the fourth quarter of 2004, we reclassified certain income tax liabilities from
Deferred tax liabilities to Other liabilities. For the three months ended March 31, 2004, we
reclassified $0.5 million from Deferred tax provision to Current tax provision to conform with the
current years presentation. The effective tax rate for the three months ended March 31, 2005 and 2004 was 39.0% and 38.1%,
respectively. The Company expects its effective tax rate for the year ending December 31, 2005 to
be approximately 39.0%. The Company records reserves for estimates of probable settlements of
federal and state audits. The results of these audits and negotiations with taxing authorities may
affect the ultimate settlement of these issues. The Company also records a valuation allowance
against its deferred tax assets arising from certain net operating losses when it is more likely
than not that some portion or all of such net operating losses will not be realized. The Companys
effective tax rate in a given financial statement period may be materially impacted by changes in
the level of earnings by taxing jurisdiction, changes in the expected outcome of tax audits, or
changes in the deferred tax valuation allowance. The net deferred income tax liabilities are presented under the following captions on the
Companys condensed consolidated balance sheets: March 31, 2005
    
    
    December 31,(Unaudited)
    
    
    2004(In thousands)Current assets 
Deferred income taxes
    
    $
    4,979
    
    
    $
    4,979Noncurrent liabilities 
Deferred income taxes
    
    
    842,477
    
    
    
    839,746Net deferred income tax liabilities
    
    $
    837,498
    
    
    $
    834,767
 7




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##### 



Hearst-Argyle Television, Inc.
Notes to Condensed Consolidated Financial Statements The deferred tax liabilities primarily relate to differences between book and tax basis
of FCC licenses created from the Companys stock acquisition of Pulitzer Broadcasting on March 18,
1999. The Deferred tax liabilities will increase over time as the tax basis in the Companys FCC
licenses continues to amortize, but does not amortize for book purposes.  8.

Common Stock Common Stock Repurchase In May 1998 the Companys Board of Directors authorized the repurchase of up to $300 million
of its outstanding Series A Common Stock. Such repurchases may be effected from time to time in
the open market or in private transactions, subject to market conditions and managements
discretion. During the three months ended March 31, 2005, we repurchased 157,659 shares of Series A
Common Stock at a cost of $4.0 million and an average per share price of $25.07. Between May 1998
and March 31, 2005, the Company has spent approximately $95.6 million to repurchase approximately
3.8 million shares of Series A Common Stock at an average price of $25.06. There can be no
assurance that such repurchases will occur in the future or, if they do occur, what the terms of
such repurchases will be. Hearst has also notified the Company and the Securities and Exchange Commission of its
intention to purchase up to 20 million shares of the Companys Series A Common Stock from time to
time in the open market, in private transactions or otherwise. As of March 31, 2005, under this
plan Hearst had purchased approximately 18.3 million shares of the Companys outstanding Series A
Common Stock. Hearsts ownership in the Company was 68.2% and 67.6% as of March 31, 2005 and
December 31, 2004, respectively. Common Stock Dividends During the three months ended March 31, 2005, the Companys Board of Directors declared a cash
dividend on shares of our Series A and Series B Common Stock as follows: Per ShareDividend
    
    
    
    
    
    
    
    Total
    
    HearstAmount
    
    Declaration Date
    
    Record Date
    
    Payment Date
    
    Dividend
    
    Portion(In thousands)$0.07
    
    March 31, 2005
    
    April 5, 2005
    
    April 15, 2005
    
    $6,496
    
    $4,432
  9.

Preferred Stock The Company has one million shares of authorized preferred stock, par value $.01 per
share. Under the Companys Certificate of Incorporation, the Company had two issued and outstanding
series of preferred stock, Series A Preferred Stock and Series B Preferred Stock (collectively, the
Preferred Stock). As of March 31, 2005, there were no shares of Preferred Stock outstanding. As
of December 31, 2004, there were 5,781 shares of Series A Preferred Stock and 5,470 shares of
Series B Preferred Stock outstanding. On January 1, 2005, all outstanding shares of Preferred
Stock were redeemed and cancelled.  10.

Related Party Transactions The Hearst Corporation. As of March 31, 2005, Hearst owned approximately 42.7% of our
Series A Common Stock and 100% of our Series B Common Stock, representing in the aggregate
approximately 68.2% of the outstanding voting power of our common stock, except with regard to the
election of directors. With regard to the election of directors, Hearsts ownership of our Series
B Common Stock entitles Hearst to elect 11 of the 13 directors of our Board of Directors. During
the three months ended March 31, 2005 and 2004, we were engaged in the following material
transactions with Hearst or parties related to Hearst:  

Management Agreement. We recorded revenue of approximately $1.1 million and
$1.0 million, in the three months ended March 31, 2005 and 2004, respectively, relating to
a management agreement with Hearst (the Management Agreement). Pursuant to the Management
Agreement, we provide certain management services, such as sales, news, programming, and
financial and accounting management services, with respect to certain Hearst owned or
operated television and radio stations. We believe that the terms of the Management
Agreement are reasonable to both parties; however, there can be no assurance that more
favorable terms would not be available from third parties.

Services Agreement. We incurred expenses of approximately $1.3 million and
$1.1 million in the three months ended March 31, 2005 and 2004, respectively, relating to a
services agreement with Hearst (the Services Agreement). Pursuant to the Services
Agreement, Hearst provides the Company certain administrative services such as accounting,
financial, legal, insurance, data processing, and employee benefits administration. We
believe that the terms of the 8




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Hearst-Argyle Television, Inc.
Notes to Condensed Consolidated Financial Statements  Services Agreement are reasonable to both parties; however, there can be no assurance that
more favorable terms would not be available from third parties.

Interest Expense, Net  Capital Trust.We incurred interest expense, net,
relating to the Subordinated Debentures issued to our wholly-owned unconsolidated
subsidiary, the Capital Trust, of $2.4 million and $3.8 million in the three months March
31, 2005 and 2004, respectively. The Capital Trust then paid comparable amounts to its
Redeemable Convertible Preferred Securities holders, including Hearst, which received $0.5
million and $0.8 million in the three months ended March 31, 2005 and 2004, respectively.
Hearst holds $25 million of the total $130 million outstanding Redeemable Convertible
Preferred Securities.

Dividends on Common Stock.On March 31, 2005 and March 24, 2004, our Board
of Directors declared a cash dividend of $0.07 and $0.06 per share, respectively, on our
Series A and Series B Common stock for a total amount of $6.5 million and $5.6 million,
respectively. Included in these amounts were $4.4 million and $3.6 million payable to
Hearst.

Radio Facilities Lease.Pursuant to a lease agreement, Hearst paid us
approximately $0.2 million for the three months ended March 31, 2005 and 2004. Under this
agreement, Hearst leases from the Company premises for WBAL-AM and WIYY-FM, Hearsts
Baltimore, Maryland radio stations.

Lifetime Entertainment Services. We have agreements with Lifetime
Entertainment Services, an entity owned 50% by an affiliate of Hearst and 50% by ABC
Television Network, whereby (i) we assist Lifetime in securing distribution and subscribers
for the Lifetime Television, Lifetime Movie Network and/or Lifetime Real Women programming
services; and (ii) Lifetime acts as our agent with respect to the negotiation of our
agreements with cable, satellite and certain other multi-channel video programming
distributors. Amounts payable to us by Lifetime depend on the
specific terms of these agreements and may be fixed or variable.
Based on the terms of completed agreements, we are entitled to
receive a minimum aggregate amount of $3.2 million during the period
from January 1, 2005 to June 30, 2009. We have recorded revenue from the agreements of $1.0 million and $0.5
million in the three months ended March 31, 2005 and 2004, respectively.

Wide Orbit, Inc.In November 2004, we entered into an agreement with Wide Orbit,
Inc. for licensing and servicing of Wide Orbits Traffic Sales and Billing Solutions
software. Hearst owns approximately 8% of Wide Orbit, Inc. For the three months ended
March 31, 2005, we paid Wide Orbit, Inc. approximately $0.3 million under the agreement.

Other Transactions with Hearst. From time to time, entities related to or owned
by The Hearst Corporation may purchase advertising on our stations. We believe that the
terms of the sale of the advertising time are reasonable to both parties; however, there
can be no assurance that more favorable terms would not be available from third parties.
Advertising revenue from The Hearst Corporation, if any, is included in our Revenue and is
immaterial to the financial statements. NBC. In August 2001, we contributed our production-and-distribution unit to
NBC/Hearst-Argyle Syndication, LLC in exchange for a 20% equity interest in this entity.
NBC/Hearst-Argyle Syndication, LLC is a limited liability company formed by NBC Enterprises (now
NBC Universal) and us to produce and syndicate first-run broadcast and original-for-cable
programming. This investment is accounted for under the equity method. Our share of the income or
loss in NBC/Hearst-Argyle Syndication, LLC is included in Equity in income of affiliates, net in
the accompanying Condensed Consolidated Statements of Income. Emerson Coleman, our Vice President,
Programming, is a member of the Board of Directors of NBC/Hearst-Argyle Syndication, LLC, from
which he does not receive compensation for his services. IBS. In December 1999, we invested $20 million of cash in Internet Broadcasting
Systems, Inc. (IBS) in exchange for an equity interest in IBS. In May 2001, we invested an
additional $6 million of cash for a total investment of $26 million in IBS, and contributed our Web
sites to a subsidiary of IBS, IBS/HATV, LLC, which operates our station Web sites. Our investment
is accounted for under the equity method. Our share of the income or loss of IBS is included in
Equity in income of affiliates, net in the accompanying Condensed Consolidated Statements of
Income. Since January 2001, Harry T. Hawks, our Executive Vice President and Chief Financial
Officer, and since October 2002, Terry Mackin, our Executive Vice President, have both served on
the Board of Directors of IBS, from which they do not receive compensation for their services. From
December 1999 through October 2002, David J. Barrett, President and Chief Executive Officer of the
Company, served on the Board of Directors of IBS, from which he did not receive compensation for
his services. In addition, IBS also provides hosting services for our corporate Web site for a
nominal amount. ProAct Technologies Corporation. Since February 2003, Harry T. Hawks, the
Companys Executive Vice President and Chief Financial Officer, has served on the Board of
Directors of ProAct, from which he does not receive compensation for his services. From March 2000
through December 2002, Bob Marbut, former Chairman of the Board of Directors and Co-Chief
Executive Officer and a current Director of the Company, served on the Board of Directors of
ProAct, from which he did not 9




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Hearst-Argyle Television, Inc.
Notes to Condensed Consolidated Financial Statements receive compensation for his services. In 2004, ProAct sold its
operating assets to a third party as part of an overall plan of liquidation. Small Business Television. The Company utilizes Small Business Televisions (SBTV)
services to provide television stations with additional revenue through the marketing and sale of
commercial time to smaller businesses that do not traditionally use television advertising due to
costs. In the three month period ended March 31, 2005 these sales generated revenue of
approximately $0.3 million, of which approximately $0.1 million was distributed to SBTV and
approximately $0.2 million was distributed to the Company. In the three month period ended March
31, 2004 these sales generated revenue of approximately $0.2 million, of which approximately $0.1
million was distributed to SBTV and approximately $0.1 million was distributed to the Company. Mr.
Dean Conomikes, the owner of SBTV, is the son of John G. Conomikes, a member of the Companys Board
of Directors. NBC Weather Plus.In November 2004, NBC Universal and the NBC Television Affiliates
Association formed NBC Weather Plus Network LLC, a 50/50 joint venture which launched the first
ever 24/7, all digital national-local broadcast network. NBC-affiliated stations may participate
in the venture by investing in a limited liability company called Weather Network Affiliates
Company, LLC, one of the entities which invested in NBC Weather Plus Network LLC. Stations
participating in the venture broadcast 24-hour national and local weather and related community
information using their excess digital spectrum (as a multi-cast stream together with their main
digital channel). We have a minority interest in Weather Network Affiliates Company, LLC, and have
launched NBC Weather Plus in three of our markets  Sacramento, Orlando and Winston-Salem and
signed agreements in two more markets, Baltimore and Greenville. Terry Mackin, our Executive Vice
President, is the Chairman of the Board of the NBC Television Affiliates Association, which is the
managing member and the owner of certain ownership interests in Weather Network Affiliates Company,
LLC. We account for this investment using the cost method. Other Related Parties. In the ordinary course of business, the Company enters into
transactions with other related parties, none of which were significant to our financial results in
the three months ended March 31, 2005 and 2004.  11.

Retirement Plans and Other Post-Retirement Benefits Overview The Company maintains seven defined benefit pension plans, 12 employee savings plans, and
other post-retirement benefit plans for active, retired and former employees. In addition, the
Company participates in a multi-employer union pension plan that provides retirement benefits to
certain union employees. The seven defined benefit pension plans are hereafter collectively
referred to as the Pension Plans. Pension Plans and Other Post-Retirement Benefits Benefits under the Pension Plans are generally based on years of credited service, age at
retirement and average of the highest five consecutive years compensation. The cost of the Pension
Plans is computed on the basis of the Project Unit Credit Actuarial Cost Method. Past service cost
is amortized over the expected future service periods of the employees. Net Periodic Pension and Post-Retirement Cost The following schedule presents net periodic pension cost for the Companys Pension Plans in
the three months ended March 31, 2005 and 2004: Pension Benefits2005
    
    
    2004(Unaudited)(In thousands)Service cost
    
    $
    2,258
    
    
    $
    1,837Interest cost
    
    
    2,165
    
    
    
    1,908Expected return on plan assets
    
    
    (2,447
    )
    
    
    (2,226
    )Amortization of prior service cost
    
    
    108
    
    
    
    123Amortization of transitional (asset) obligation
    
    
    1
    
    
    
    (24
    )Recognized actuarial loss
    
    
    739
    
    
    
    357Net periodic pension cost
    
    $
    2,824
    
    
    $
    1,975
 10




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##### 



Hearst-Argyle Television, Inc.
Notes to Condensed Consolidated Financial Statements The following schedule presents net periodic pension cost for the Companys
post-retirement benefit plan in the three months ended March 31, 2005 and 2004: Post-Retirement Benefits2005
    
    
    2004(Unaudited)(In thousands)Service cost
    
    $
    20
    
    
    $
    21Interest cost
    
    
    84
    
    
    
    85Amortization of prior service cost
    
    
    5
    
    
    
    5Amortization of transitional obligation
    
    
    5
    
    
    
    5Amortization of net loss
    
    
    4
    
    
    
    6Net periodic pension cost
    
    $
    118
    
    
    $
    122
 Contributions During the three months ended March 31, 2005, we made contributions of $0.4 million to our
defined benefit plans and $0.1 million to our post-retirement benefit plans. During the year 2005,
the Company expects to contribute approximately $3.6 million to the Pension Plans and approximately
$0.5 million to the post-retirement benefit plan.  12.

Other Commitments and Contingencies The Company has guaranteed the payments by its Capital Trust on the Redeemable Convertible
Preferred Securities. As of March 31, 2005, $130.0 million of Series B Redeemable Convertible
Preferred Securities remained outstanding. The guarantee is irrevocable and unconditional, and
guarantees the payment in full of all (i) distributions on the Redeemable Convertible Preferred
Securities to the extent of available funds of the Capital Trust; (ii) amounts payable upon
redemption of the Redeemable Convertible Preferred Securities to the extent of available funds of
the Capital Trust; and (iii) amounts payable upon dissolution of the Capital Trust. The guarantee
is unsecured and ranks (i) subordinate to all other liabilities of the Company, except liabilities
that are expressly made pari passu; (ii) pari passuwith the most senior preferred stock issued by
the Company, and pari passuwith any guarantee of the Company in respect of any preferred stock of
the Company or any preferred security of any of the Companys controlled affiliates; and (iii)
senior to the Companys Common Stock.  13.

Subsequent Event On April 15, 2005, we entered into a five year $250 million credit facility agreement with a
consortium of banks led by JP Morgan Chase, Bank of America, Wachovia Bank, BNP Paribas and Harris
Nesbitt. On the same day, we capitalized $1.3 million of costs related to the credit facility.
Outstanding principal balances under the credit facility will bear interest at either, at our
option, LIBOR or the alternate base rate (ABR), plus the applicable margin. The applicable
margin for ABR loans is zero. The applicable margin for LIBOR loans varies between 0.50% and 1.00%
depending on the ratio of our total debt to earnings before interest, taxes, depreciation and
amortization as defined by the credit agreement (the Leverage Ratio). The ABR is the greater of
(i) the prime rate or (ii) the Federal Funds Effective Rate in effect plus 0.5%. We are required
to pay a commitment fee based on the unused portion of the Credit Facility. The commitment fee
ranges from 0.15% to 0.25% depending on our Leverage Ratio. The credit facility is a general
unsecured obligation of the Company. We have not borrowed under this credit facility at this time. 11




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ITEM 2. Managements Discussion And Analysis Of Financial Condition And Results Of
Operations Organization of Information Managements Discussion and Analysis provides a narrative on our financial performance and
condition that should be read in conjunction with the accompanying condensed consolidated financial
statements. It includes the following sections:  

Executive Summary

Results of Operations

Liquidity and Capital Resources

Impact of Inflation

Forward-Looking Statements Executive Summary Hearst-Argyle Television, Inc. and subsidiaries (hereafter we or our or the
Company) owns and operates 25 network-affiliated television stations. Additionally, we provide
management services to two network-affiliated stations and one independent television station, and
two radio stations (the Managed Stations) in exchange for a management fee. Results of operations
for the three months ended March 31, 2005 and 2004 include (i) the results of our 24 television
stations, which were owned for all periods presented, and the management fees derived by the three
television and two radio stations managed by us for all periods presented; and (ii) the results of
operations of WMTW-TV, which was acquired on July 1, 2004, for all periods presented that ended
after the acquisition date, mainly the three months ended March 31, 2005. Quarter Highlights  

Revenue decreased 3% primarily from the decrease in political revenue as a result of the
normal, cyclical nature of the television broadcasting business, in which the demand for
advertising by candidates running for political office significantly increases in
even-numbered years (such as 2004).

Excluding political advertising, revenue increased 3% over the three months ended March
31, 2004.

Our core advertising business was strong due to increases in our retail, automotive,
packaged goods, pharmaceutical, and furniture and housewares categories.

In the first quarter of 2005 cash increased $6.8 million over prior year end, after
capital expenditures, interest and taxes, and the funding (with cash on-hand) of (i) the
redemption of $11.3 million of preferred stock; (ii) the dividend on our common stock
totaling $6.5 million; and (iii) the repurchase of $4.0 million of Series A Common Stock.

During the quarter two more of our markets, Baltimore and Greenville, for a total of
five markets, signed affiliation agreements with Weather Plus, a 24 hour streaming data
digital Weather Network which utilizes a portion of our digital spectrum in partnership
with NBC Universal.

Results for the three months ended March 31, 2005, were impacted by the acquisition
of WMTW-TV on July 1, 2004. Results of Operations Three Months Ended March 31, 2005Compared to Three Months Ended March 31, 2004 Total revenue.      Total revenue includes primarily:  (i)

cash and barter advertising revenue, net of agency and national representatives
commissions;(ii)

network compensation; and(iii)

other revenue (less than 3% of total revenue). 12




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Total revenue in the three months ended March 31, 2005 was $162.3 million as compared to
$166.9 million in the three months ended March 31, 2004, a decrease of $4.6 million or 3%. This
decrease was primarily attributable to the following factors:  (i)

a $9.4 million decrease in net political advertising revenue resulting from the normal,
cyclical nature of the television broadcasting business, in which the demand for
advertising by candidates running for political office significantly increases in
even-numbered years (such as 2004);(ii)

a $2.1 million decrease in network compensation; partially offset by(iii)

an increase in demand by national and local advertisers, particularly in the
categories of retail, automotive, packaged goods, pharmaceutical and furniture and
housewares. Salaries, benefits and other operating costs. Salaries, benefits and other operating costs
were $88.6 million in the three months ended March 31, 2005, as compared to $84.6 million in the
three months ended March 31, 2004, an increase of $4.0 million or 5%. This increase was primarily
due to:  (i)

a $2.0 million increase in Salaries, benefits and other operating costs resulting from
the acquisition of WMTW-TV on July 1, 2004;(ii)

a $0.3 million increase in payroll expense due to salary increases; and(iii)

a $0.8 million increase in pension and benefit expenses. Amortization of program rights. Amortization of program rights was $15.3 million in the three
months ended March 31, 2005 and 2004. Depreciation and amortization. Depreciation and amortization was $13.1 million in the three
months ended March 31, 2005, as compared to $12.5 million in the three months ended March 31, 2004,
an increase of $0.6 million or 5%. Depreciation expense was $11.6 million in the three months
ended March 31, 2005, as compared to $11.0 million in the three months ended March 31, 2004, an
increase of $0.6 million or 6%. This increase was primarily due to increased depreciation expense
from recent investments and the additional depreciation from WMTW-TV. Amortization was $1.5
million in the three months ended March 31, 2005 and 2004, and principally results from
amortization related to separately identified intangible assets, advertiser client base and network
affiliations. Corporate, general and administrative expenses. Corporate, general and administrative
expenses were $5.9 million in the three months ended March 31, 2005, as compared to $5.6 million in
the three months ended March 31, 2004, an increase of $0.3 million or approximately 6%. This
increase was primarily due to increases in employee benefits and pension expense. Operating income.Operating income was $39.3 million in the three months ended March 31,
2005, as compared to $48.9 million in the three months ended March 31, 2004, a decrease of $9.6
million or 20%. This net decrease in operating income was due to the items discussed above. Interest expense, net.Interest expense, net of interest income, was $15.7 million in the
three months ended March 31, 2005, as compared to $16.4 million in the three months ended March 31,
2004, a decrease of $0.7 million or 4%. This decrease in interest expense, net, was primarily due
to:  (i)

zero commitment fees during the three months ended March 31, 2005, compared to $0.3
million during the three months ended March 31, 2004 as a result of the expiration of our
1999 credit facility in the second quarter of 2004; and(ii)

interest income of $0.5 million in the three months ended March 31, 2005 as compared to
$0.4 million in the three months ended March 31, 2004. Interest expense, net  Capital Trust. Interest expense, net, to our wholly-owned,
unconsolidated subsidiary trust (the Hearst-Argyle Capital Trust or Capital Trust) was $2.4
million for the three months ended March 31, 2005 compared to $3.8 million for the three months
ended March 31, 2004. The decrease of $1.3 million results from the redemption of the $72.2
million Series A Debentures on December 31, 2004. Equity in income of affiliates, net. Equity in income of affiliates, net was $0.3 million in
the three months ended March 31, 2005, as compared to $0.2 million in the three months ended March
31, 2004, an increase of $0.1 million. This increase was primarily due to the improved operating
results of the operating entities related to Internet 13




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##### 



Broadcasting Systems, Inc. (IBS). Equity in income of affiliates, net represents our equity
interests in the financial results of unconsolidated affiliates. Income taxes.Income tax expense was $8.4 million in the three months ended March 31, 2005,
as compared to $11.0 million in the three months ended March 31, 2004, a decrease of $2.7 million
or 24%. This decrease in income tax expense was due to a decrease in income before income taxes
from $28.9 million in the three months ended March 31, 2004 to $21.4 million in the three months
ended March 31, 2005. We expect our effective tax rate for the year ending December 31, 2005 to be
approximately 39.0%. The current and deferred portions of our income tax expense were $5.6 million
and $2.7 million, respectively, in the three months ended March 31, 2005, compared to $8.4 million
and $2.6 million, respectively, in the three months ended March 31, 2004. Our noncurrent deferred
tax liability was $842.5 million and $839.7 million as of March 31, 2005 and December 31, 2004,
respectively. The deferred tax liability primarily relates to differences between book and tax
basis of our FCC licenses. We do not expect the significant portion of our deferred tax liability
to reverse over time unless:  (i)

our FCC licenses become impaired; or(ii)

our FCC licenses are sold for cash, which would typically only occur in connection with
the sale of the assets of a station or groups of stations or the entire Company in a
taxable transaction. Net income. Net income was $13.1 million in the three months ended March 31, 2005, as
compared to $17.9 million in the three months ended March 31, 2004, a decrease of $4.8 million or
27%. This decrease was due to the items discussed above, primarily a decrease of $9.6 million in
Operating income; partially offset by a decrease of $0.7 million in Interest expense, net; a
decrease of $1.3 million in Interest expense, net  Capital Trust; an increase of $0.1 million in
Equity in income in affiliates, net; and a decrease of $2.7 million in income tax expense, in the
three months ended March 31, 2005, as compared to the three months ended March 31, 2004. Liquidity and Capital Resources As of March 31, 2005, our cash and cash equivalents balance was $99.0 million, as compared to
$92.2 million as of December 31, 2004, an increase of $6.8 million. The net increase in cash and
cash equivalents was due to the factors described below under Operating Activities, Investing
Activities, and Financing Activities. Operating Activities Net cash provided by operating activities was $34.8 million in the three months ended March
31, 2005, as compared to $54.3 million in the three months ended March 31, 2004, a decrease of
$19.5 million or 36%. This decrease was primarily due to:  (i)

the decrease in our net revenue and net income compared to the same period in 2004, as
discussed above under Total revenue and Net income;(ii)

a dividend payment of $1.3 million we received from the IBS/HATV LLC in the first
quarter of 2004 as compared to the $2.0 million dividend received in the second quarter of
2005;(iii)

changes in working capital, primarily changes in accounts receivable, accounts payable
and accrued liabilities, and other liabilities resulting from:  a.

higher bonuses paid in during the three months ended March 31, 2005
compared to the prior year periodb.

and an increase in receivables over the prior year resulting from lower
prepaid political spots in the current period. Investing Activities Net cash used in investing activities was $8.1 million in the three months ended March 31,
2005, as compared to $6.5 million in the three months ended March 31, 2004, an increase of $1.5
million or approximately 24%. During both periods, our primary investing activities were equipment
purchases related to:  (i)

digital projects;(ii)

maintenance projects; and(iii)

special projects. 14




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##### 



Investments in property, plant and equipment were $8.1 million and $6.5 million in the three
months ended March 31, 2005 and 2004, respectively, and were funded using our net cash provided by
operating activities. In the three months ended March 31, 2005, we invested  (i)

$2.6 million in digital projects(ii)

$4.1 million in maintenance projects; and(iii)

$1.4 million in special projects. For the year ending December 31, 2005, we expect to invest approximately $40 million in
property, plant and equipment, including approximately  (i)

$7 million in digital projects;(ii)

$17 million in maintenance projects; and(iii)

$16 million in special projects. Financing Activities Net cash used in financing activities was $19.9 million in the three months ended March 31,
2005, as compared to $2.6 million in the three months ended March 31, 2004, an increase of $17.3
million. This increase was primarily due to:  (i)

the redemption of our preferred stock of $11.3 million in January 2005 compared to a
redemption of $1.6 million in January 2004;(ii)

the repurchase of $4.0 million of common stock during the three months ended March 31,
2005 compared to zero in the prior year period; and(iii)

a decrease in proceeds from stock option exercises of approximately $3.2 million in
the three months ended March 31, 2005 compared to the prior year period. On March 31, 2005, our Board of Directors declared a $0.07 per share cash dividend on our
Series A and Series B Common Stock in the amount of $6.5 million that was paid on April 15, 2005 to
all stockholders of record as of April 5, 2005. In May 1998, our Board of Directors authorized the repurchase of up to $300 million of our
outstanding Series A Common Stock. Such repurchases may be effected from time to time in the open
market or in private transactions, subject to market conditions and managements discretion.
Between May 1998 and March 31, 2005, we have spent approximately $95.6 million to repurchase
approximately 3.8 million shares of Series A Common Stock at an average price of $25.06. There can
be no assurance that we will repurchase shares in the future or, if we do, what the terms of such
repurchases will be. As of March 31, 2005, there was no outstanding balance due under our 1999 credit facility, as
it was fully paid off in September 2003 and expired in April, 2004. We entered into a new five
year $250 million credit facility on April 15, 2005. The new credit facility can be used for
working capital, investments, acquisitions and other corporate purposes. As of March 31, 2005, our long-term debt obligations, exclusive of capital lease obligations,
were $882.1 million, all of which mature after 2005. All of our long-term debt obligations as of
March 31, 2005 bear interest at a fixed rate. The Companys credit ratings for its long-term debt
obligations, respectively, were BBB- by Standard & Poors and Fitch Ratings and Baa3 by Moodys
Investors Service, as of March 31, 2005. Such credit ratings are considered to be investment
grade. Our debt obligations contain certain financial and other covenants and restrictions on the
Company. Certain of the financial covenants include credit ratios such as leverage, interest
coverage and fixed charges coverage, but such covenants do not include any triggers explicitly tied
to the Companys credit ratings or stock price. We are in compliance with all such covenants and
restrictions as of March 31, 2005. We anticipate that our primary sources of cash, which include current cash balances, cash
provided by operating activities, and amounts available under our new credit facility, will be
sufficient to finance the operating and working capital requirements of our stations, as well as
our debt service requirements, anticipated capital expenditures, and other obligations of the
Company for both the next 12 months and the foreseeable future thereafter. 15




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##### 



Impact of Inflation The impact of inflation on our operations has not been significant to date. There can be
no assurance, however, that a high rate of inflation in the future would not have an adverse impact
on our operating results. Forward-Looking Statements This report includes or incorporates forward-looking statements. We based these
forward-looking statements on our current expectations and projections about future events. These
forward looking statements generally can be identified by the use of statements that include
phrases such as anticipate, will, likely, plan, believe, expect, intend, project or
other such similar words and/or phrases. For these statements, the Company claims the protection of
the safe harbor for forward-looking statements contained in the Private Securities Litigation
Reform Act of 1995. The forward-looking statements contained in this report, concerning, among
other things, trends and projections involving revenue, income, earnings, cash flow, operating
expenses, capital expenditures, dividends and capital structure, involve risks and uncertainties,
and are subject to change based on various important factors. Those factors include the impact on
our operations from  

Changes in Federal regulation of broadcasting, including changes in Federal
communications laws or regulations;

Local regulatory actions and conditions in the areas in which our stations operate;

Competition in the broadcast television markets we serve;

Our ability to obtain quality programming for our television stations;

Successful integration of television stations we acquire;

Pricing fluctuations in local and national advertising;

Changes in national and regional economies;

Our ability to service and refinance our outstanding debt; and

Volatility in programming costs, industry consolidation, technological developments,
and major world events. These and other matters we discuss in this report, or in the documents we incorporate by
reference into this report, may cause actual results to differ from those we describe. We
undertake no obligation to update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.  Item 3.

Quantitative and Qualitative Disclosures About Market Risk As of March 31, 2005, the Company was not involved in any derivative financial
instruments. However, the Company may consider certain interest-rate risk strategies in the
future. Currently, we do not have any outstanding floating rate debt.  Item 4.

Controls and Procedures The Companys management performed an evaluation under the supervision and with the
participation of the Companys Chief Executive Officer (CEO) and Chief Financial Officer (CFO),
of the effectiveness of the disclosure controls and procedures (as that term is defined in Exchange
Act Rule 13a-15(e)) as of the end of the fiscal quarter ended March 31, 2005. Based on that
evaluation, and as of the end of the quarter for which this report is made, the Companys
management, including the CEO and CFO, concluded that the Companys disclosure controls and
procedures were effective. Our management, including the CEO and CFO, performed an evaluation of
any changes that occurred in our internal control over financial reporting during the fiscal
quarter ended March 31, 2005. That evaluation did not identify any changes in the Companys
internal control over financial reporting that have materially affected, or are reasonably likely
to materially affect, the Companys internal control over financial reporting. 16




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Part IIOther Information Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds. Purchase of Equity Securities by the Issuer and Affiliated Purchasers.The following table
reflects purchases made during the quarter of our Series A Common Stock by Hearst Broadcasting,
Inc. (Hearst Broadcasting), an indirect wholly-owned subsidiary of The Hearst Corporation
(Hearst): (c) Total Number of
    
    
    (d) Maximum(a) Total
    
    
    (b) Average
    
    
    Shares Purchased as
    
    
    Number of SharesNumber of
    
    
    Price Paid
    
    
    Part of Publicly
    
    
    that May Yet BePeriod
    
    
    Shares Purchased
    
    
    Per Share
    
    
    Announced
    
    
    Purchased UnderProgram
    
    
    the ProgramJanuary 1 - January 31
    
    
    
    316,700
    
    
    
    $
    25.54
    
    
    
    
    316,700
    
    
    
    
    1,903,927
    (1)February 1 - February 28
    
    
    
    106,100
    
    
    
    
    25.31
    
    
    
    
    106,100
    
    
    
    
    1,797,827March 1 -March 31
    
    
    
    101,200
    
    
    
    
    25.48
    
    
    
    
    101,200
    
    
    
    
    1,696,627Total
    
    
    
    524,000
    
    
    
    $
    25.48
    
    
    
    
    524,000
   (1)
    
    On December 6, 2000, the Board of Directors of Hearst authorized Hearst Broadcasting to
purchase up to 20 million shares of our Series A Common Stock (inclusive of previously
authorized and announced purchase amounts). Such purchases may be affected from time to time
in the open market or in private transactions, subject to market conditions and managements
discretion. As of March 31, 2005, Hearst owned approximately 42.7% of the Companys outstanding Series A Common
Stock and 100% of the Companys Series B Common Stock. The following table reflects purchases made by the Company of its Series A Common Stock or
Series B Common Stock during the quarter. (c) Total Number of
    
    
    (d) Approximate(a) Total
    
    
    (b) Average
    
    
    Shares Purchased as
    
    
    Dollar Value ofNumber of
    
    
    Price Paid
    
    
    Part of Publicly
    
    
    Shares that May YetPeriod
    
    
    Shares
    
    
    per Share
    
    
    Announced
    
    
    Be Purchased UnderPurchased
    
    
    
    
    
    Program
    
    
    the ProgramJanuary 1 - January 31
    
    
    
    
    
    
    
    $
    
    
    
    
    
    February 1 - February 28
    
    
    
    55,159
    
    
    
    
    24.59
    
    
    
    
    55,159March 1 -March 31
    
    
    
    102,500
    
    
    
    
    25.33
    
    
    
    
    102,500Total
    
    
    
    157,659
    
    
    
    $
    25.07
    
    
    
    
    157,659
    
    
    
    $
    204,427,861
    (1)
   (1)
    
    In May 1998, the Companys Board of Directors authorized the repurchase of up to $300
million of its outstanding Series A Common Stock. Such purchases may be affected from time to
time in the open market or in private transactions, subject to market conditions and
managements discretion. As of March 31, 2005, the Company has spent approximately $95.6
million to repurchase approximately 3.8 million shares of Series A Common Stock at an average
price of $25.06. 17




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##### 



Item 6.   Exhibits (a)Exhibits:10.1
    
    Amendment No. 7 to Service Agreement, dated as of December 1, 2004, by and between the
Company and The Hearst Corporation.31.1
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the
Securities Exchange Act of 1934, as amended.31.2
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the
Securities Exchange Act of 1934, as amended.32.1
    
    Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
   18




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##### 



SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly authorized. HEARST-ARGYLE TELEVISION, INC.By:
    
    /s/ JONATHAN C. MINTZERName:
    
    Jonathan C. MintzerTitle:
    
    Vice President, Secretary and General CounselDated:
    
    April 29, 2005
  Name
    
    Title
    
    Date/s/    HARRY T. HAWKS

Harry T. Hawks
    
    Executive Vice President
and Chief Financial Officer
(Principal Financial Officer)
    
    April 29, 2005/s/    BRIAN G. HARRIS

Brian G. Harris
    
    Corporate Controller
(Principal Accounting Officer)
    
    April 29, 2005
 19