**SECURITIES AND EXCHANGE COMMISSION**

**Washington,D.C. 20549**

----

**Form10-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, 2007** |
| ** **     | ** ** |
| ** **     | **or** |
| ** **     | ** ** |
| **o**          | **TRANSITION REPORT PURSUANT TO SECTION 13 OR  15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
| ** **     | ** ** |
| ** **     | **For the  transition period from:    Not Applicable** |

 

**Commissionfile number 1-14776**

**Hearst-Argyle Television, Inc.**

(ExactName of Registrant as Specified in Its Charter)

 

| **Delaware**                              |   | **74-2717523**                                             |
|-------------------------------------------|--------|------------------------------------------------------------|
| (State or other  jurisdiction of          |   | (I.R.S. Employer  Identification No.)            |
| incorporation or  organization)           |   |                                                       |
| ** **                                |   | ** **                                                 |
| **300  West 57****th St**            |   | ** **                                                 |
| **New  York, NY 10019**                   |   | **(212)  887-6800**                                        |
| (Address of  principal executive offices) |   | (Registrant’s  telephone number, including area code) |

 

SecuritiesRegistered Pursuant To Section 12(b) Of The Act:

|        | Title of Each Class                               | ** ** | ** ** | ** ** | **Name of Each Exchange On Which Registered** | ** ** |
|--------|---------------------------------------------------|------------|------------|------------|-----------------------------------------------------------------------------|------------|
|   | Series A Common  Stock, par value  $.01 per share |       |       |       | New York  Stock Exchange                                               |       |

 

SecuritiesRegistered Pursuant To Section 12(g) Of The Act:

None

Indicateby check mark whether the registrant (1) has filed all reports required to befiled by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding twelve months (or for such shorter period that the registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days.    Yes  x    No  o

Indicate by check markwhether the registrant is a large accelerated filer, an accelerated filer, or anon-accelerated filer.  See definition of“accelerated filer and large accelerated filer” in Rule 12b-2 of the ExchangeAct.  (Check one):
| Large accelerated  filer  o | Accelerated  filer  x | Non-accelerated  filero |
|---------------------------------------|---------------------------------|-------------------------|

 

Indicateby check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Exchange Act).  Yes  o No x

Sharesof the registrant’s common stock outstanding as of April 23, 2007: 93,623,530shares (consisting of 52,324,882 shares of Series A Common Stock and 41,298,648shares of Series B Common Stock).

 

----

 

**HEARST-ARGYLE TELEVISION, INC.**

**Index**
| **Part I**       | **Financial  Information**                                                                                                            | ** ** |
|------------------|---------------------------------------------------------------------------------------------------------------------------------------|------------|
|             |                                                                                                                                  |       |
|             |                                                                                                                                  |       |
| **Item 1.** | **Financial Statements**                                                                                                              |       |
|             | Condensed Consolidated Balance Sheets as of March  31, 2007 (unaudited) and December 31, 2006 |       |
|             | Condensed  Consolidated Statements of Income for the Three Months Ended March 31,  2007 and 2006 (unaudited)                     |       |
|             | Condensed  Consolidated Statements of Cash Flows for the Three Months Ended March 31,  2007 and 2006 (unaudited)                 |       |
|             | Notes to  Condensed Consolidated Financial Statements                                                                                 |       |
|             |                                                                                                                                  |       |
|             |                                                                                                                                  |       |
| **Item 2.** | **Management’s  Discussion and Analysis of Financial Condition and Results of Operations**                                       |       |
|             |                                                                                                                                  |       |
|             |                                                                                                                                  |       |
| **Item 3.** | **Quantitative  and Qualitative Disclosures about Market Risk**                                                                       |       |
|             |                                                                                                                                  |       |
|             |                                                                                                                                  |       |
| **Item 4.** | **Controls and  Procedures**                                                                                                          |       |
|             |                                                                                                                                  |       |
|             |                                                                                                                                  |       |
| **Part II**      | **Other  Information**                                                                                                                |       |
|             |                                                                                                                                  |       |
|             |                                                                                                                                  |       |
| **Item 2.** | **Unregistered  Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity  Securities**                              |       |
| ** **       |                                                                                                                                  |       |
| **Item 6.** | **Exhibits**                                                                                                                          |       |
| ** **       |                                                                                                                                  |       |
| **Signatures**   |                                                                                                                                  |       |

 

----

|                                  | **Part I**                                 | ** ** |
|----------------------------------|--------------------------------------------|------------|
| ** **                       | **Financial  Information**                 | ** ** |
| **Item 1. Financial Statements** | ** **                                 | ** ** |
| ** **                       | **HEARST-ARGYLE  TELEVISION, INC.**        | ** ** |
| ** **                       | ** **                                 | ** ** |
| ** **                       | **Condensed  Consolidated Balance Sheets** | ** ** |

 
| ** **                                       | ** ** | **March 31, 2007** | ** ** | **December 31, 2006** | ** ** |
|--------------------------------------------------|------------|------------------------------|------------|---------------------------------|------------|
| ** **                                       | ** ** | **(Unaudited)**              | ** ** | ** **                      | ** ** |
| ** **                                       | ** ** | **(In thousands)**      | ** ** |
| **Assets**                                       |       |                         |       |                            |       |
| Current assets:                                  |       |                         |       |                            |       |
| Cash and cash  equivalents                       |       | $                            | 31,964     |                            | $          | 18,610 |   |
| Accounts  receivable, net                        |       | 142,718                      |       | 161,783                         |       |
| Program and  barter rights                       |       | 46,053                       |       | 67,949                          |       |
| Deferred income  tax asset                       |       | 4,672                        |       | 4,672                           |       |
| Other                                            |       | 6,367                        |       | 5,671                           |       |
| Total current  assets                            |       | 231,774                      |       | 258,685                         |       |
| Property, plant and  equipment, net              |       | 293,404                      |       | 295,094                         |       |
| Intangible assets, net                           |       | 2,518,273                    |       | 2,520,040                       |       |
| Goodwill                                         |       | 816,727                      |       | 816,724                         |       |
| Other assets:                                    |       |                         |       |                            |       |
| Deferred  financing costs, net                   |       | 9,200                        |       | 9,648                           |       |
| Investments                                      |       | 40,688                       |       | 40,454                          |       |
| Program and  barter rights, noncurrent           |       | 13,641                       |       | 15,227                          |       |
| Pension and  other assets                        |       | 229                          |       | 2,216                           |       |
| Total other  assets                              |       | 63,758                       |       | 67,545                          |       |
| Total assets                                     |       | $                            | 3,923,936  |                            | $          | 3,958,088 |   |
| ** **                                       |       |                         |       |                            |       |
| **Liabilities and Stockholders’  Equity**   |       |                         |       |                            |       |
| Current liabilities:                             |       |                         |       |                            |       |
| Current portion  of long-term debt               |       | $                            | 90,048     |                            | $          | 90,048 |   |
| Accounts payable                                 |       | 14,552                       |       | 18,208                          |       |
| Accrued  liabilities                             |       | 46,690                       |       | 66,515                          |       |
| Program and  barter rights payable               |       | 45,156                       |       | 65,473                          |       |
| Payable to  Hearst Corporation, net              |       | 5,572                        |       | 7,317                           |       |
| Other                                            |       | 5,674                        |       | 2,693                           |       |
| Total current  liabilities                       |       | 207,692                      |       | 250,254                         |       |
| Program and barter  rights payable, noncurrent   |       | 20,130                       |       | 22,411                          |       |
| Long-term debt                                   |       | 777,115                      |       | 777,122                         |       |
| Note payable to Capital  Trust                   |       | 134,021                      |       | 134,021                         |       |
| Deferred income tax  liability                   |       | 822,932                      |       | 838,229                         |       |
| Other liabilities                                |       | 82,839                       |       | 53,244                          |       |
| Total noncurrent  liabilities                    |       | 1,837,037                    |       | 1,825,027                       |       |
| Commitments and  contingencies                   |       |                         |       |                            |       |
| Stockholders’ equity:                       |       |                         |       |                            |       |
| Series A common  stock                           |       | 567                          |       | 563                             |       |
| Series B common  stock                           |       | 413                          |       | 413                             |       |
| Additional paid-in  capital                      |       | 1,319,555                    |       | 1,309,578                       |       |
| Retained earnings                                |       | 702,565                      |       | 716,146                         |       |
| Accumulated other  comprehensive loss, net       |       | (33,109                      | )          | (33,109                         | )          |
| Treasury stock, at cost                          |       | (110,784                     | )          | (110,784                        | )          |
| Total  stockholders’ equity                 |       | 1,879,207                    |       | 1,882,807                       |       |
| Total liabilities and  stockholders’ equity |       | $                            | 3,923,936  |                            | $          | 3,958,088 |   |

Seenotes to condensed consolidated financial statements.

----

**HEARST-ARGYLE TELEVISION, INC.**

**Condensed Consolidated Statements of Income**
| ** **                                         | ** ** | **Three Months Ended March 31,**               | ** ** |
|----------------------------------------------------|------------|--------------------------------------------------------------------|------------|
| ** **                                         | ** ** | **2007**                                                           | ** ** | **2006** | ** ** |
| ** **                                         | ** ** | **(Unaudited)**                                                    | ** ** |
| ** **                                         | ** ** | **(In thousands, except per share data)** | ** ** |
|                                               |       |                                                               |       |   |   |
| Total revenue                                      |       | $                                                                  | 169,383    |   | $ | 174,017 |   |
| Station operating  expenses:                       |       |                                                               |       |   |   |
| Salaries,  benefits and other operating costs      |       | 101,074                                                            |       | 96,787 |   |
| Amortization of  program rights                    |       | 19,228                                                             |       | 15,332 |   |
| Depreciation and  amortization                     |       | 14,996                                                             |       | 15,388 |   |
| Corporate, general and  administrative expenses    |       | 7,779                                                              |       | 7,273 |   |
| Operating income                                   |       | 26,306                                                             |       | 39,237 |   |
|                                               |       |                                                               |       |   |   |
| Interest expense                                   |       | 15,890                                                             |       | 16,462 |   |
| Interest income                                    |       | (346                                                               | )          | (1,302 | ) |
| Interest expense, net —  Capital Trust        |       | 2,438                                                              |       | 2,438 |   |
| Income before income  taxes and equity earnings    |       | 8,324                                                              |       | 21,639 |   |
|                                               |       |                                                               |       |   |   |
| Income tax expense                                 |       | 3,993                                                              |       | 8,548 |   |
| Equity in (income) loss  of affiliates, net of tax |       | 80                                                                 |       | 74 |   |
| Net income                                         |       | 4,251                                                              |       | 13,017 |   |
|                                               |       |                                                               |       |   |   |
| Income applicable to  common stockholders          |       | $                                                                  | 4,251      |   | $ | 13,017 |   |
|                                               |       |                                                               |       |   |   |
| Income per common share  — basic              |       | $                                                                  | 0.05       |   | $ | 0.14 |   |
| Number of common shares  used in the calculation   |       | 93,183                                                             |       | 92,655 |   |
|                                               |       |                                                               |       |   |   |
| Income per common share  — diluted            |       | $                                                                  | 0.05       |   | $ | 0.14 |   |
| Number of common shares  used in the calculation   |       | 94,189                                                             |       | 93,191 |   |
|                                               |       |                                                               |       |   |   |
| Dividends per common  share declared               |       | $                                                                  | 0.07       |   | $ | 0.07 |   |

 

See notes to condensedconsolidated financial statements.

----

**HEARST-ARGYLE TELEVISION, INC.**

**Condensed Consolidated Statements of Cash Flows**
| ** **                                                                         | ** ** | **Three months ended March 31,** | ** ** |
|------------------------------------------------------------------------------------|------------|------------------------------------------------------|------------|
| ** **                                                                         | ** ** | **2007**                                             | ** ** | **2006** | ** ** |
| ** **                                                                         | ** ** | **(Unaudited)**                                      | ** ** |
| ** **                                                                         | ** ** | **(In thousands)**                              | ** ** |
| **Operating Activities**                                                           |       |                                                 |       |   |   |
| Net income                                                                         |       | $                                                    | 4,251      |   | $ | 13,017 |   |
| Adjustments to  reconcile net income to net cash provided by operating activities: |       |                                                 |       |   |   |
| Depreciation                                                                       |       | 13,229                                               |       | 13,895 |   |
| Amortization of  intangible assets                                                 |       | 1,767                                                |       | 1,493 |   |
| Amortization of  deferred financing costs                                          |       | 448                                                  |       | 569 |   |
| Amortization of  program rights                                                    |       | 19,228                                               |       | 15,332 |   |
| Deferred income  taxes                                                             |       | 203                                                  |       | 2,465 |   |
| Equity in loss  (income) of affiliates, net                                        |       | 80                                                   |       | 74 |   |
| Provision for  doubtful accounts                                                   |       | 285                                                  |       | 136 |   |
| Stock-based  compensation expense                                                  |       | 2,046                                                |       | 1,918 |   |
| (Gain) or loss  on disposition of assets                                           |       | 20                                                   |       | (609 | ) |
| Program payments                                                                   |       | (18,343                                              | )          | (15,807 | ) |
| Changes in  operating assets and liabilities:                                      |       |                                                 |       |   |   |
| Decrease  (increase) in Accounts receivable                                        |       | 17,780                                               |       | 8,768 |   |
| Decrease  (increase) in Other assets                                               |       | 1,314                                                |       | 3,573 |   |
| (Decrease)  increase in Accounts payable and accrued liabilities                   |       | (24,497                                              | )          | (7,759 | ) |
| (Decrease)  increase in Other liabilities                                          |       | 3,705                                                |       | 422 |   |
| Net cash provided by  operating activities                                         |       | $                                                    | 21,516     |   | $ | 37,487 |   |
|                                                                               |       |                                                 |       |   |   |
| **Investing Activities**                                                           |       |                                                 |       |   |   |
| Purchases of property,  plant and equipment                                        |       | (11,580                                              | )          | (7,764 | ) |
| Accrued purchases of  property, plant & equipment                              |       | 1,608                                                |       | 737 |   |
| Cash proceeds from  insurance recoveries                                           |       | 1,000                                                |       | 1,391 |   |
| Investment in  affiliates and other, net                                           |       | (3                                                   | )          | (6,752 | ) |
| Net cash used in  investing activities                                             |       | $                                                    | (8,975     | ) | $ | (12,388 | ) |
|                                                                               |       |                                                 |       |   |   |
| **Financing Activities**                                                           |       |                                                 |       |   |   |
| Dividends paid on  common stock                                                    |       | (6,523                                               | )          | (6,486 | ) |
| Series A Common Stock  repurchases                                                 |       | —                                               |       | (798 | ) |
| Principal payments and  repurchase of long term debt                               |       | (7                                                   | )          | (10,012 | ) |
| Proceeds from employee  stock purchase plan and stock option exercises             |       | 7,343                                                |       | 600 |   |
| Net cash provided by  (used in) financing activities                               |       | $                                                    | 813        |   | $ | (16,696 | ) |
|                                                                               |       |                                                 |       |   |   |
| Increase in cash and  cash equivalents                                             |       | 13,354                                               |       | 8,403 |   |
| Cash and cash  equivalents at beginning of period                                  |       | 18,610                                               |       | 120,065 |   |
| Cash and cash equivalents at end of period                                         |       | $                                                    | 31,964     |   | $ | 128,468 |   |

 

See notes to condensed consolidatedfinancial statements.

----

**HEARST-ARGYLE TELEVISION, INC.**

**CondensedConsolidated Statements of Cash Flows**

**(continued)**
| ** **                                         | ** ** | **Three months ended March 31,** | ** ** |
|----------------------------------------------------|------------|------------------------------------------------------|------------|
| ** **                                         | ** ** | **2007**                                             | ** ** | **2006** | ** ** |
| ** **                                         | ** ** | **(Unaudited)**                                      | ** ** |
| ** **                                         | ** ** | **(In thousands)**                              | ** ** |
| **Supplemental  Cash Flow Information:**           |       |                                                 |       |   |   |
| **Cash paid  during the period for:**              |       |                                                 |       |   |   |
| Interest                                           |       | $                                                    | 7,331      |   | $ | 6,790 |   |
| Interest on Note payable to Capital Trust          |       | $                                                    | —     |   | $ | 2,438 |   |
| Taxes, net of refunds                              |       | $                                                    | 22,926     |   | $ | 12,572 |   |
| **Non-cash  investing and financing activities:**  |       |                                                 |       |   |   |
| Accrued  property, plant & equipment purchases |       | $                                                    | 1,608      |   | $ | 737 |   |

 

See notes to condensedconsolidated financial statements.

----

**Hearst-ArgyleTelevision, Inc.**

**Notes toCondensed Consolidated Financial Statements**

**Tabular amounts in thousands,except per share data**

**1.    Basis ofPresentation**

Thecondensed consolidated financial statements include the accounts ofHearst-Argyle Television, Inc. and its wholly-owned subsidiaries (the “Company”or “we” or “us” or “our”), except for the Company’s wholly-owned subsidiarytrust (the “Capital Trust”) which cannot be consolidated under the FinancialAccounting Standards Board (“FASB”) Interpretation No. 46 (revised December2003), *Consolidation of Variable Interest Entities*(“FIN 46(R)”).  With the exception of theunconsolidated subsidiary trust, all significant intercompany accounts havebeen eliminated in consolidation.

Theaccompanying unaudited condensed consolidated financial statements do notinclude all of the information and notes required by accounting principlesgenerally accepted in the United States of America for complete financialstatements and should be read in conjunction with the Company’s consolidatedfinancial statements included in the Annual Report on our Form 10-K for theyear ended December 31, 2006.  In theopinion of management, all adjustments considered necessary for a fairpresentation have been included and are normal and recurring in nature.  Operating results for the three months endedMarch 31, 2007 and 2006 are not necessarily indicative of the results that maybe expected for the full year.

Forcomparability, certain immaterial prior year amounts have been reclassified inthe condensed consolidated statements of cash flows to conform to the 2007presentation.  On the condensedconsolidated statements of income, we have reclassified Equity in (income) lossof affiliates, net of tax from Income before income taxes to below Income taxexpense (benefit).  Additionally, we havereclassified interest income from Interest expense, net as a separate componentof income before income taxes and equity. As a result, we have reclassified amounts from 2006 to conform to thispresentation. These reclassifications had no impact on reported net income.

**2.    RecentDevelopments and Accounting Pronouncements**

OnAugust 31, 2006, the Company purchased the assets related to broadcasttelevision station WKCF-TV, a CW affiliate in Orlando, Florida, for $217.5million in cash funded with a combination of cash on hand and a borrowing of$100 million under the Company’s $500 million credit facility. The pro-formaresults of operations and related per share information have not been presentedas the amounts are considered immaterial.

In 2006 Sprint NextelCorporation (“Nextel”) was granted the right from the FCC to reclaim from broadcastersin each market across the country the 1.9 GHz spectrum to use for anemergency communications system.  In order to claim this signal,Nextel must replace all analog equipment currently using this spectrum withdigital equipment.  All broadcasters have agreed to use the digitalsubstitute that Nextel will provide.  The transition will be completed ona market by market basis.  As the equipment is exchanged in each of ourmarkets, we expect to record gains to the extent that the fair marketvalue of the equipment we receive exceeds the book value of the analogequipment we exchange.

InFebruary 2007, the FASB issued Statement of Financial Accounting Standards (“SFAS”)  No. 159, *The Fair Value Option forFinancial Assets and Financial Liabilities* (“SFAS 159”) whichpermits entities to choose to measure many financial instruments and certainother items at fair value that are not currently required to be measured atfair value. SFAS 159 will be effective for the Company on January 1, 2008. TheCompany is currently evaluating the impact of adopting SFAS 159 on itsfinancial position, cash flows, and results of operations.

In September2006, the FASB issued SFAS No. 157,*Fair Value Measurements*(“SFAS 157”), which applies whenever other standards require (or permit) assetsor liabilities to be measured at fair value. SFAS 157 establishes a fair value hierarchy that prioritizes theinformation used to develop the assumptions that market participants would usewhen pricing an asset or liability.  SFAS157 is effective for fiscal years beginning after November 15, 2007 and interimperiods within those fiscal years. We do not believe the adoption of SFAS 157will have a material impact on our financial position, cash flows or results ofoperations.

In September2006, the FASB issued SFAS No. 158, *Employers’ Accounting forDefined Benefit Pension and Other Postretirement Plans* (“SFAS158”), which requires employers to fully recognize the obligationsassociated 

4

----

withsingle-employer defined benefit pension, retiree healthcare and otherpostretirement plans in their financial statements.  It requires employers to recognize anasset or liability for a plan’s overfunded or underfunded status, measure aplan’s assets and obligations that determine its funded status as of the end ofthe employer’s fiscal year and recognize in comprehensive income changes in thefunded status of a defined benefit postretirement plan in the year in whichchanges occur.  The requirement to recognize the funded status of abenefit plan and the disclosure requirements are effective for fiscalyears ending after December 15, 2006.  We have adopted the requirement torecognize the funded status of a benefit plan as of December 31, 2006.  As a result, Accumulated other comprehensiveloss increased $26.4 million, net of tax as of December 31, 2006.  Additionally, the requirement to measureplan assets and benefit obligations as of the date of the employer’sfiscal year end is effective for all years ending after December 15, 2008.

InJune 2006, the FASB issued Financial Interpretation No. 48, *Accounting for Uncertainty in Income Taxes* (“FIN 48”).  FIN 48 clarifies the accounting for uncertaintax positions by prescribing a minimum recognition threshold for recognition oftax benefits in the financial statements. FIN 48 also provides guidance onmeasurement, derecognition, classification, interest and penalties, accountingin interim periods, disclosure and transition. As a result of applying FIN 48,the amount of benefit recognized in the financial statements may differ fromthe amount taken or expected to be taken in a tax return. These differences arereferred to as unrecognized tax benefits and represent financial statementliabilities. In the event unrecognized tax positions are ultimately allowed(for example, when the matter is settled with taxing authorities or statutes oflimitations expire), the benefit is recognized, generally resulting in areduction of tax expense in the period of recognition.   FIN 48 is effective for fiscal years beginningafter December 15, 2006.  The adoption ofFIN 48 on January 1, 2007 resulted in a decrease to Retained earnings of $11.3million, a decrease in Deferred income tax liability of $15.8 million and anincrease to Other liabilities of $27.1 million.   See Note 7 for further discussion regardingthe adoption of FIN 48.

**3.    Stock-BasedCompensation**

On January 1,2006, the Company adopted FASB Statement No. 123(R), *Share-BasedPayment* (“SFAS 123(R)”) using a modified prospective transitionmethod.  For the three months ended March31, 2007 and 2006, the adoption of SFAS 123(R) resulted in incrementalstock-based compensation expense of $2.0 million and $1.9 million,respectively.   The total taxbenefit related thereto was $0.7 million for each of the three month periods ended March 31, 2007 and 2006.  As of March 31, 2007, there was $14.4 millionof total unrecognized compensation cost related to unvested share-basedcompensation awards granted under the equity compensation plans which does notinclude the effect of future grants of equity compensation, if any.  Of the total $14.4 million, we expect torecognize approximately 41.5% in the remaining interim periods of 2007, 39.8%in 2008 and 18.7% in 2009.

**4.    Long-TermDebt**

Long-term debt as of March31, 2007 and December 31, 2006 consisted of the following:
| ** **                 | ** ** | **March 31, 2007** | ** ** | **December 31, 2006** | ** ** |
|----------------------------|------------|------------------------------|------------|---------------------------------|------------|
| ** **                 | ** ** | **(Unaudited)**              | ** ** | ** **                      | ** ** |
| Revolving Credit  Facility |       | $                            | 100,000    |                            | $          | 100,000 |   |
| Senior Notes (1)           |       | 407,110                      |       | 407,110                         |       |
| Private  Placement Debt    |       | 360,000                      |       | 360,000                         |       |
| Capital Lease  Obligations |       | 53                           |       | 60                              |       |
|                       |       | 867,163                      |       | 867,170                         |       |
| Less: Current  Maturities  |       | (90,048                      | )          | (90,048                         | )          |
|                       |       |                         |       |                            |       |
| Total long-term  debt      |       | $                            | 777,115    |                            | $          | 777,122 |   |

----

(1)             TheCompany has the ability and intent to refinance its $125.0 million 7% seniornotes due November 2007 and therefore has continued to classify the debt as along-term obligation.

**5.    EarningsPer Share**

The calculation of basicearnings per share (“EPS”) for each period is based on the weighted averagenumber of common shares outstanding during the period.  The calculation of dilutive EPS for eachperiod is based on the weighted average number of common shares outstandingduring the period, plus the effect, if any, from the exercise of stock options,lapse of restrictions on restricted stock and conversion of preferredsecurities.  The following table setsforth a reconciliation between basic EPS and diluted EPS, in accordance withSFAS No. 128, *Earnings Per Share*.

5

----

 
| ** **                                                    | ** ** | **Three months ended March 31,** | ** ** |
|---------------------------------------------------------------|------------|------------------------------------------------------|------------|
| ** **                                                    | ** ** | **2007**                                             | ** ** | **2006** | ** ** |
| ** **                                                    | ** ** | **(Unaudited)**                                      | ** ** |
| Income applicable  to common stockholders (Basic and Diluted) |       | $                                                    | 4,251      |   | $ | 13,017 |   |
|                                                          |       |                                                 |       |   |   |
| Basic shares                                                  |       | 93,183                                               |       | 92,655 |   |
| Basic EPS                                                     |       | $                                                    | 0.05       |   | $ | 0.14 |   |
|                                                          |       |                                                 |       |   |   |
| Diluted shares                                                |       | 94,189                                               |       | 93,191 |   |
| Diluted EPS                                                   |       | $                                                    | 0.05       |   | $ | 0.14 |   |
|                                                          |       |                                                 |       |   |   |
| Basic shares                                                  |       | 93,183                                               |       | 92,655 |   |
| Add: Shares issued upon assumed exercise of stock  options    |       | 1,006                                                |       | 536 |   |
| Diluted shares                                                |       | 94,189                                               |       | 93,191 |   |

 

The dilution test for theRedeemable Convertible Preferred Securities related to the Capital Trust isperformed for all periods. This test considers only the total number of sharesthat could be issued if converted and does not consider either the conversionprice or the share price of the underlying common shares. For the three monthsended March 31, 2007 and 2006, 5,128,205 shares of Series A Common Stock to beissued upon the conversion of 2,600,000 shares of Series B 7.5% RedeemableConvertible Preferred Securities, related to the Capital Trust, are notincluded in the number of common shares used in the calculation of diluted EPSbecause to do so would have been anti-dilutive. When the securities related tothe Capital Trust are dilutive, the interest, net of tax, related to theCapital Trust is added back to Income applicable to common stockholders forpurposes of the diluted EPS calculation.

Stock options underlying5,696,797 and 5,993,385 shares of Series A Common Stock (before application ofthe treasury stock method), outstanding as of March 31, 2007 and 2006,respectively, were not included in the computation of diluted EPS because theexercise price was greater than the average market price of $26.16 and $23.78during the three months ended March 31, 2007 and 2006, respectively.

6

----

**6.    Goodwilland Intangible Assets**
| ** **                                                         | ** ** | **March 31, 2007** | ** ** | **December 31, 2006** | ** ** |
|--------------------------------------------------------------------|------------|------------------------------|------------|---------------------------------|------------|
| ** **                                                         | ** ** | **(Unaudited)**              | ** ** | ** **                      | ** ** |
| Total intangible  assets subject to amortization                   |       | $                            | 105,016    |                            | $          | 106,783 |   |
| Intangible  assets not subject to amortization — FCC licenses |       | 2,413,257                    |       | 2,413,257                       |       |
| Total intangible  assets, net                                      |       | $                            | 2,518,273  |                            | $          | 2,520,040 |   |
|                                                               |       |                         |       |                            |       |
| Goodwill                                                           |       | $                            | 816,727    |                            | $          | 816,724 |   |

 

Summarized below are the carrying value of intangible assets subject toamortization as of March 31, 2007 and December 31, 2006:
| ** **                                        | ** ** | **March 31, 2007** | ** ** | **December 31, 2006** | ** ** |
|---------------------------------------------------|------------|------------------------------|------------|---------------------------------|------------|
| ** **                                        | ** ** | ** **                   | ** ** | **(Unaudited)**                 | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                                        | ** ** | **Gross**                    | ** ** | ** **                      | ** ** | **Net** | ** ** | **Gross** | ** ** | ** ** | ** ** | **Net** | ** ** |
| ** **                                        | ** ** | **Carrying**                 | ** ** | **Accumulated**                 | ** ** | **Carrying** | ** ** | **Carrying** | ** ** | **Accumulated** | ** ** | **Carrying** | ** ** |
| ** **                                        | ** ** | **Value**                    | ** ** | **Amortization**                | ** ** | **Value** | ** ** | **Value** | ** ** | **Amortization** | ** ** | **Value** | ** ** |
| Intangible  assets subject to amortization:       |       |                         |       |                            |       |   |   |   |   |   |   |   |   |
| Advertiser client base                            |       | $                            | 124,035    |                            | $          | 75,129 |   | $ | 48,906 |   | $ | 124,035 |   | $ | 73,967 |   | $ | 50,068 |   |
| Network affiliations                              |       | 95,493                       |       | 39,477                          |       | 56,016 |   | 95,493 |   | 38,880 |   | 56,613 |   |
| Other                                             |       | 743                          |       | 649                             |       | 94 |   | 743 |   | 641 |   | 102 |   |
| Total intangible assets  subject to amortization: |       | $                            | 220,271    |                            | $          | 115,255 |   | $ | 105,016 |   | $ | 220,271 |   | $ | 113,488 |   | $ | 106,783 |   |

 

The Company’s amortizationexpense for intangible assets was approximately $1.8 million and $1.5 millionfor the three months ended March 31, 2007 and 2006, respectively.  Annual intangible asset amortization expenseis estimated to be approximately $6.8 million in 2007 and $6.0 million in each ofthe next four years.

**7.    IncomeTaxes**

The income tax expense forthe three months ended March 31, 2007 and 2006 consisted of the following:
| ** **          | ** ** | **Three Months Ended March 31,** | ** ** |
|---------------------|------------|------------------------------------------------------|------------|
| ** **          | ** ** | **2007**                                             | ** ** | **2006** | ** ** |
| ** **          | ** ** | **(Unaudited)**                                      | ** ** |
| Current             |       | $                                                    | 3,790      |   | $ | 6,083 |   |
| Deferred            |       | 203                                                  |       | 2,465 |   |
| Income tax  expense |       | $                                                    | 3,993      |   | $ | 8,548 |   |

 

On January 1, 2007, theCompany adopted FIN 48 which clarifies the accounting for uncertainty in incometaxes by prescribing a recognition threshold for tax positions taken orexpected to be taken in a tax return.  Atthe date of adoption, the total amount of unrecognized tax benefits was $44.0million, inclusive of $8.6 million for interest and penalties.   Substantially this entire amount (net of thefederal benefit on state tax issues and federal and state benefit on interest)represents the amount of unrecognized tax benefits that, if recognized, wouldfavorably affect the effective income tax rate in future periods.  At March 31, 2007, the total amount ofunrecognized tax benefits was $45.2 million which is included in OtherLiabilities on the Company’s condensed consolidated balance sheet.  With few exceptions, the Company is no longersubject to US Federal income tax examinations for years before 2003 and is nolonger subject to state and local income tax examinations by tax authoritiesfor years before 2000.  To date, nomaterial adjustments have been proposed with respect to ongoing examinations.

7

----

Theeffective tax rate for the three months ended March 31, 2007 was 48.0% ascompared to 39.5% for the three months ended March 31, 2006.  The adopted provisions of FIN 48 will resultin a certain amount of variability in the effective tax rate in interim periodsdue to the Company’s recording of its interest expense, which is classified asa component of income taxes, as period costs. Additionally, the Company’s effective income tax rate in a givenfinancial statement period may be materially impacted by 1) changes in thelevel of earnings by taxing jurisdiction 2) changes in the expected outcome oftax examinations 3) the normal expiration of statutes of limitations or 4) theamount of deductions or changes in the deferred tax valuation allowance.

Theamount of unrecognized tax benefits is expected, on a net basis, to decreasewithin 12 months of the reporting date due to scheduled closings ofexaminations and normal expirations of statutes of limitations.

The Company’s policy isto record interest and penalties accrued on prior periods unrecognized taxbenefits as a component of current income tax expense in our condensedconsolidated statement of income. The total amount of interest impacting theeffective tax rate within the current period’s condensed consolidated statementof income was $0.6 million.

The Company’s net deferredincome tax liability is as follows:
| ** **                         | ** ** | **March 31, 2007** | ** ** | **December 31, 2006** | ** ** |
|------------------------------------|------------|------------------------------|------------|---------------------------------|------------|
| ** **                         | ** ** | **(Unaudited)**              | ** ** | ** **                      | ** ** |
| Deferred income  tax liability     |       | $                            | 822,932    |                            | $          | 838,229 |   |
| Deferred income  tax asset         |       | 4,672                        |       | 4,672                           |       |
| Net deferred  income tax liability |       | $                            | 818,260    |                            | $          | 833,557 |   |

 

The deferred tax liabilitiesprimarily relate to differences between book and tax basis of the Company’s FCClicenses. In accordance with the adoption of FASB No. 142, *Goodwill andIntangible Assets*, effective as of January 1, 2002, the Company nolonger amortizes its FCC licenses for book purposes, but instead tests them forimpairment annually.  For tax purposes,the FCC licenses continue to be amortized over their remaining useful livesand, as a result, the related deferred tax liabilities will increase over time.

**8.    CommonStock**

**CommonStock Repurchase**

In May 1998, the Company’sBoard of Directors authorized the repurchase of up to $300 million of itsoutstanding Series A Common Stock.  Suchrepurchases may be effected from time to time in the open market or in privatetransactions, subject to market conditions and management’s discretion. Duringthe three months ended March 31, 2007, the Company did not repurchase shares ofits outstanding Series A Common Stock. Between May 1998 and March 31, 2007, theCompany repurchased approximately 4.5 million shares of Series A Common Stockat a cost of approximately $110.8 million and an average price of $24.87.  There can be no assurance that suchrepurchases will occur in the future or, if they do occur, what the terms ofsuch repurchases will be.

The HearstCorporation (“Hearst”) and its indirect wholly-owned subsidiary, HearstBroadcasting, Inc. (“Hearst Broadcasting”), are authorized by the HearstBoard of Directors to purchase up to 25 million shares of the Company’s SeriesA Common Stock from time to time in the open market, in private transactions orotherwise.  During the three months endedMarch 31, 2007, Hearst Broadcasting did not purchase any shares of Series ACommon Stock.  As of March 31, 2007,under this plan Hearst purchased approximately 23.8 million shares of the Company’soutstanding Series A Common Stock.

 As of March 31, 2007 and December 31, 2006, Hearstowned 73.6% and 73.8%, respectively, of the Company’s outstanding common stock.

8

----

 

**CommonStock Dividends**

During the three monthsended March 31, 2007, the Company’s Board of Directors declared a cash dividendon shares of our Series A and Series B Common Stock as follows:
| **Dividend  Amount** | ** ** | **Declaration Date** | ** ** | **Record Date** | ** ** | **Payment Date** | ** ** | **Total Dividend** | ** ** | **Hearst Portion** |
|----------------------|------------|----------------------|------------|-----------------|------------|------------------|------------|--------------------|------------|--------------------|
| $0.07                |       | March 29, 2007       |       | April 5, 2007   |       | April 15, 2007   |       | $6,546             |       | $4,816             |

 

**9.    PreferredStock**

Under the Company’sCertificate of Incorporation, the Company has one million authorized shares ofPreferred Stock, par value $.01 per share. At March 31, 2007 and 2006, there was no Preferred Stock outstanding.

**10.    RelatedParty Transactions**

*Hearst*.    As of March 31, 2007, Hearst ownedapproximately 52.7% of our Series A Common Stock and 100% of our Series BCommon Stock, representing in the aggregate approximately 73.6% of theoutstanding voting power of our common stock, except with regard to theelection of directors.  With regard tothe election of directors, Hearst’s ownership of our Series B Common Stockentitles Hearst to elect 11 of the 13 members of our Board of Directors. Duringthe three months ended March 31, 2007 and 2006, we were engaged in thefollowing transactions with Hearst or parties related to Hearst:

·                        *Hearst TowerLease. *On May 5, 2006 theCompany entered into a Lease Agreement with Hearst to lease one floor of thenewly constructed Hearst Tower in Manhattan for our corporate offices.  For the three months ended March 31, 2007, werecorded $0.4 million in rent expense, net of a portion of the $1.9 milliontenant improvement allowance, which the Company is amortizing over the leaseterm.

·                  *ManagementServices Agreement*.  We recorded revenue of approximately$1.5 million and $1.4 million in the three months ended March 31, 2007 and2006, respectively, relating to a management agreement with Hearst (the “ManagementAgreement”). Pursuant to the Management Agreement, we provide certain sales,news, programming, legal, financial, engineering and accounting managementservices for certain Hearst-owned television and radio stations.  Certain employees of these managed stationsare also participants in our stock option plans.  We believe the terms of the ManagementAgreement are reasonable to both parties; however, there can be no assurancethat more favorable terms would not be available from third parties.

·                  *IntercompanyServices Agreement*.  We incurred expenses of approximately$1.7 million and $1.3 million in the three months ended March 31, 2007 and2006, respectively, relating to a services agreement with Hearst (the “ServicesAgreement”). Pursuant to the Services Agreement, Hearst provides the Companycertain administrative services such as accounting, auditing, financial, legal,insurance, data processing, and employee benefits administration. We believethe terms of the Services Agreement are reasonable to both parties; however,there can be no assurance that more favorable terms would not be available fromthird parties.

·                  *InterestExpense, Net*—*Capital Trust.*  We incurred interest expense, net,related to the Subordinated Debentures issued to our wholly-ownedunconsolidated subsidiary, the Capital Trust, of $2.4 million for each of thethree months ended March 31, 2007 and 2006. The Capital Trust then paid comparable amounts to its RedeemableConvertible Preferred Securities holders, including Hearst, which received $0.5million in interest payments during the three months ended March 31, 2007.

·                  *Dividendson Common Stock.*  On March 29, 2007, our Board ofDirectors declared a cash dividend of $0.07 on our Series A and Series B CommonStock of approximately $6.5 million. Included in this amount was approximately$4.8 million payable to Hearst. On March 31, 2006, our Board of Directorsdeclared a cash

9

----

 

                        dividendof $0.07 on our Series A and Series B Common Stock of approximately $6.5million in the aggregate.  Included inthis amount was approximately $4.6 million payable to Hearst.

·                  *RadioFacilities Lease.*  Pursuant to a lease agreement, Hearstpaid us approximately $0.2 million for each of the three months ended March 31,2007 and 2006. Under this agreement, Hearst leases from the Company premisesfor WBAL-AM and WIYY-FM, Hearst’s Baltimore, Maryland radio stations.

·                  *Retransmission Consent Agreement*.  Wehave agreements with Lifetime Entertainment Services (“Lifetime”), an entityowned 50% by an affiliate of Hearst and 50% by The Walt Disney Company, whereby(i) we assist Lifetime in securing distribution and subscribers for theLifetime Television, Lifetime Movie Network and/or Lifetime Real Womenprogramming services; and (ii) Lifetime acts as our agent with respect to thenegotiation of our agreements with cable, satellite and certain othermulti-channel video programming distributors. Amounts payable to us by Lifetime depend on the specific terms of theseagreements and may be fixed or variable. We recorded revenue from the agreements of $4.9 million and $4.6 millionin the three months ended March 31, 2007 and 2006, respectively.

·                  *WideOrbit, Inc. *In November 2004, we entered into anagreement to license from Wide Orbit Inc. (“Wide Orbit”) Traffic Sales andBilling Solutions software.  Hearst ownsapproximately 8% of Wide Orbit.  For thethree months ended March 31, 2007 and 2006, we paid Wide Orbit approximately$0.5 million and $0.3 million, respectively, under the agreement.

·                  *N*ew*England Cable News*.  Twoof our executive officers, David J. Barrett and Steven A. Hobbs, serve asHearst’s representatives on the management board of New England Cable News, aregional cable channel, jointly owned by Hearst Cable News, Inc., an indirectwholly-owned subsidiary of Hearst, and Comcast MO Cable News, Inc.  Hearst pays $4,000 per month to the Companyas compensation for their service.

·                  *OtherTransactions with Hearst*.  In the three months ended March31, 2007 and 2006, we recorded immaterial net revenue relating to advertisingsales from Hearst.

*InternetBroadcasting Systems, Inc*.  As of March 31, 2007,we owned 39.2% of Internet Broadcasting Systems, Inc. (“Internet Broadcasting”).  Our share of the income of InternetBroadcasting included in Equity in (income) loss of affiliates, net of tax was$0.5 million and $0.4 million for the three months ended March 31, 2007 and2006, respectively.  We also have anagreement with Internet Broadcasting pursuant to which it provides hostingservices for our corporate Internet site for a nominal amount.  Harry T. Hawks, Terry Mackin and Steven A.Hobbs, three of our executive officers, serve on the Board of Directors ofInternet Broadcasting, from which they do not receive compensation for theirservices.

*SmallBusiness Television*.  TheCompany utilizes services of Small Business Television (“SBTV”) to providetelevision stations with additional revenue through the marketing and sale ofcommercial time to smaller businesses that do not traditionally use televisionadvertising due to costs. In each of the three month periods ended March 31,2007 and 2006, these sales generated revenue of approximately $0.3 million ofwhich approximately $0.2 million was distributed to SBTV.  Mr. Dean Conomikes, the owner of SBTV, is theson of John G. Conomikes, a member of the Company’s Board of Directors.

*NBC WeatherPlus.*  In 2004,we invested in Weather Network Affiliates Company, LLC (“WNAC”), which owns theNBC Weather Plus Network (“Weather Plus”). We have launched Weather Plus in all of our NBC-affiliated markets.  Terry Mackin, one of our executive officers,serves as the past Chairman of the Board of the NBC Television AffiliatesAssociation, the managing member and the owner of certain ownership interestsin WNAC.  As past NBC Affiliate Chairman, Mr. Mackin serves as chairman of theNBC Affiliates “Futures” committee, which is responsible for developingstrategic projects between NBC and the NBC Affiliates.  Mr. Mackin served as the Chairman ofthe NBC Television Affiliates Association Board from May 2004 to May 2006.  Additionally, since May 2006, Mr. Mackin has

10

----

 

served as amember of the Board of Directors of NBC Weather Plus Network LLC.  Mr. Mackin does not receivecompensation for his Board service.

*Ripe TV.*  On August 14, 2006, the Company made anadditional investment of $4.1 million in Ripe Digital Entertainment, Inc. (“RipeTV”), resulting in a total investment of $9.1 million which represents a 24.7%ownership interest.   In the fourthquarter of 2006 the Company entered into a lease agreement with Ripe TV tosublet office space commencing January 1, 2007, for approximately $0.1 milliona year.

*USDTV*.  During the year ended December 31, 2006, weand Hearst each owned approximately 6.175% of USDTV.  In addition, our station KOAT-TV inAlbuquerque, New Mexico, had an agreement to lease a portion of its digitalspectrum to USDTV which the Company terminated effective April 15, 2007.  In July 2006, USDTV filed for Chapter 7bankruptcy and the Company wrote off its investment.  In September 2006, USDTV sold substantiallyall its assets to a third party. From September 23, 2005 to June 20, 2006,Steven A. Hobbs, one of our executive officers, served on the Board ofDirectors of USDTV, from which he did not receive compensation for hisservices.

*Other Related Parties*.  In the ordinary course ofbusiness, the Company enters into transactions with other related parties, noneof which were significant to our financial results in the three months endedMarch 31, 2007 and 2006.

**11.    RetirementPlans and Other Post-Retirement Benefits**

***Overview***

The Company maintains seven defined benefit pension plans, 12 employeesavings plans, and other post-retirement benefit plans for active, retired andformer employees.  In addition, theCompany participates in three multi-employer union pension plans that provideretirement benefits to certain union employees. The seven defined benefit pension plans are hereafter collectivelyreferred to as the “Pension Plans.”

***Pension Plans and Other Post-Retirement Benefits***

Benefits under the PensionPlans are generally based on years of credited service, age at retirement andaverage of the highest five consecutive years’ compensation. The cost of thePension Plans is computed on the basis of the Project Unit Credit ActuarialCost Method. Past service cost is amortized over the expected future serviceperiods of the employees.

*Net Periodic Pension and Post-Retirement Cost*

The following schedulepresents net periodic pension cost for the Company’s Pension Plans in the threemonths ended March 31, 2007 and 2006:
| ** **                          | ** ** | **Pension Benefits**                            | ** ** |
|-------------------------------------|------------|------------------------------------------------------|------------|
| ** **                          | ** ** | **Three Months Ended March 31,** | ** ** |
| ** **                          | ** ** | **2007**                                             | ** ** | **2006** | ** ** |
| ** **                          | ** ** | **(Unaudited)**                                      | ** ** |
| Service cost                        |       | $                                                    | 2,645      |   | $ | 2,446 |   |
| Interest cost                       |       | 2,700                                                |       | 2,355 |   |
| Expected return  on plan assets     |       | (2,911                                               | )          | (2,779 | ) |
| Amortization of  prior service cost |       | 108                                                  |       | 108 |   |
| Amortization of  net loss           |       | 924                                                  |       | 967 |   |
| Net periodic  pension cost          |       | $                                                    | 3,466      |   | $ | 3,097 |   |

 

11

----

 

Thefollowing schedule presents net periodic benefit cost for the Company’s otherPost-Retirement Benefit Plans (medical and life insurance)  in the three months ended March 31, 2007 and2006:
| ** **                              | ** ** | **Post-Retirement Benefits**                    | ** ** |
|-----------------------------------------|------------|------------------------------------------------------|------------|
| ** **                              | ** ** | **Three Months Ended March 31,** | ** ** |
| ** **                              | ** ** | **2007**                                             | ** ** | **2006** | ** ** |
| ** **                              | ** ** | **(Unaudited)**                                      | ** ** |
| Service cost                            |       | $                                                    | 41         |   | $ | 29 |   |
| Interest cost                           |       | 175                                                  |       | 122 |   |
| Amortization of  prior service cost     |       | 10                                                   |       | 7 |   |
| Amortization of  initial net obligation |       | 10                                                   |       | 7 |   |
| Amortization of  net loss               |       | 9                                                    |       | 6 |   |
| Net periodic  benefit cost              |       | $                                                    | 245        |   | $ | 171 |   |

 

*Contributions*

During the three monthsended March 31, 2007, we contributed $0.4 million to our Pension Plans and wecontributed approximately $0.2 million to our Post-Retirement BenefitPlans.  During the three months endedMarch 31, 2006, we did not make any contributions to our Pension Plans and wecontributed approximately $0.2 million to our Post-Retirement BenefitPlans.  During the year ending December31, 2007, the Company expects to contribute $5.5 million to the Pension Plansand expects to contribute approximately $0.6 million to the Post-Retirement BenefitPlans.

**12.    OtherCommitments and Contingencies**

TheCompany has guaranteed the payments by its Capital Trust on the RedeemableConvertible Preferred Securities in the amount of $134 million.  The guarantee is irrevocable andunconditional, and guarantees the payment in full of all (i) distributions onthe Redeemable Convertible Preferred Securities to the extent of availablefunds of the Capital Trust; (ii) amounts payable upon redemption of theRedeemable Convertible Preferred Securities to the extent of available funds ofthe Capital Trust; and (iii) amounts payable upon dissolution of the CapitalTrust.  The guarantee is unsecured andranks (i) subordinate to all other liabilities of the Company, exceptliabilities that are expressly made *pari passu*;(ii) *pari passu* with the most seniorpreferred stock issued by the Company, and *pari passu* withany guarantee of the Company in respect of any preferred stock of the Companyor any preferred security of any of the Company’s controlled affiliates; and(iii) senior to the Company’s Common Stock.

12

----

 

**Item 2.**               **Management’sDiscussion and Analysis of Financial Condition and Results of Operations**

**Organizationof Information**

Management’s Discussion andAnalysis provides a narrative on our financial performance and condition thatshould be read in conjunction with the accompanying condensed consolidatedfinancial statements.  It includes thefollowing sections:

·                  Forward-LookingStatements

·                  ExecutiveSummary

·                  Resultsof Operations

·                  Liquidity and Capital Resources

**Forward-Looking Statements**

Thisreport****includes****or incorporates forward-lookingstatements.  We base theseforward-looking statements on our current expectations and projections aboutfuture events.  These forward-lookingstatements generally can be identified by the use of statements that includephrases such as “anticipate”, “will”, “may”, “likely”, “plan”, “believe”, “expect”,“intend”, “project”, “forecast” or other such similar words and/or phrases. Forthese statements, the Company claims the protection of the safe harbor forforward-looking statements contained in the Private Securities LitigationReform Act of 1995.  The forward-lookingstatements contained in this report, concerning, among other things, trends andprojections involving revenue, income, earnings, cash flow, liquidity,operating expenses, assets, liabilities, capital expenditures, dividends andcapital structure, involve risks and uncertainties, and are subject to changebased on various important factors. Those factors include the impact on our operations from

·                  Changes in Federalregulations that affect us, including changes in Federal communications laws orregulations;

·                  Local regulatoryactions and conditions in the areas in which our stations operate;

·                  Competition in thebroadcast television markets we serve;

·                  Our ability toobtain quality programming for our television stations;

·                  Successfulintegration of television stations we acquire;

·                  Pricingfluctuations in local and national advertising;

·                  Changes in nationaland regional economies;

·                  Our ability to serviceand refinance our outstanding debt;

·                  Changes inadvertising trends and our advertisers’ financial condition; and

·                  Volatility inprogramming costs, industry consolidation, technological developments, andmajor world events**.**

Fora discussion of additional risk factors that are particular to our business,please refer to the Risk Factors section of our Annual Report on Form 10-K forthe fiscal year ended December 31, 2006. These and other matters we discuss in this report, or in the documentswe incorporate by reference into this report, may cause actual results todiffer from those we describe.  Weundertake no obligation to update or revise any forward-looking statements,whether as a result of new information, future events or otherwise.

**ExecutiveSummary**

Hearst-Argyle Television,Inc. and its subsidiaries (hereafter “we” or the “Company”) own and operate 26network-affiliated television stations. Additionally, we provide management services to two network-affiliatedstations and one independent television station and two radio stations owned byThe Hearst Corporation (“Hearst”) in exchange for management fees.  We are a leader in the convergence of localbroadcast television and the Internet through our investment in, and operatingagreement with, Internet Broadcasting, which operates a nation-wide network oftelevision Websites.  Our stations’Websites typically provide news, weather, community information, user generatedcontent and entertainment content to our audience.  Also, 13 of our stations broadcast additionalchannels on a multicast stream with their main digital channel.

13

----

 

*Quarter Highlights*

·                  Inthe February 2007 ‘sweeps’ ratings period, our stations KOCO-TV, Oklahoma City,OK; KMBC-TV, Kansas City, MO; and WISN-TV, Milwaukee, WI were the top threerated ABC affiliates in the country in prime time.

·                  Duringthe first quarter of 2007, the Company was honored with its fourth consecutiveWalter Cronkite Award, given biannually by the University of SouthernCalifornia’s Annenberg School to honor television political reporting.   We are the only TV news provider to havebeen honored with Cronkite Awards in any category each of the four times theawards have been bestowed since they were introduced in 2001.

·                  Duringthe first quarter of 2007, our stations were honored locally, regionally andnationally with many of television’s most prominent journalism andpublic-service honors, including:  35regional Radio-Television News Directors Association (RTNDA) Edward R. MurrowAwards; nine Press Club of Atlantic City National Headliner Awards; a duPont-Columbia Journalism Award; and a National Association of BroadcastersEducation Foundation (NABEF) Service to America Award.

·                  Forthe three months ended March 31, 2007, the Company recorded net digital mediarevenue of $4.0 million compared to $3.2 million for the three months endedMarch 31, 2006.

·                  OnJanuary 1, 2007, the Company adopted *Financial InterpretationNo. 48, Accounting forUncertainty in Income Taxes*(“FIN 48”) which resulted in a decrease to Retained earnings of $11.3 million, a$15.8 million decrease to Deferred income tax liability and a $27.1 millionincrease to Other liabilities.

·                  Revenuefrom advertising during the Superbowl occurs in the first quarter of theyear.  In 2006, the Superbowl aired onour 13 ABC stations and in 2007, the Superbowl aired on our two CBS stationsresulting in a decrease to our local and national advertising in 2007.

*Industry Trends*

·                  Politicaladvertising decreases in odd-numbered years, such as 2007, consistent with thedecrease in the number of candidates running for political office in theinterim national election cycle, as well as select state and local elections.

·                  Revenuefrom Olympic advertising occurs exclusively in even-numbered years, such as2006, with the alternating Winter and Summer Games occurring every two years.Consequently, our 10 NBC stations aired the 2006 Winter Olympics in February2006 and did not record any advertising revenue associated with the Olympics inthe first quarter of 2007.

·                  In2006 Sprint Nextel Corporation (“Nextel”) was granted the right from the FCC toreclaim from broadcasters in each market across the country the 1.9 GHzspectrum to use for an emergency communications system.  In order toclaim this signal, Nextel must replace all analog equipment currently usingthis spectrum with digital equipment.  All broadcasters have agreed to usethe digital substitute that Nextel will provide.  The transition will becompleted on a market by market basis.  As the equipment is exchanged ineach of our markets, we expect to record gains to the extent that the fairmarket value of the equipment we receive exceeds the book value of the analogequipment we exchange.

**Resultsof Operations**

Results of operations forthe three months ended March 31, 2007 and 2006 include (i) the results of our25 television stations, which were owned for the entire period presented, andthe management fees derived by the three television and two radio stationsmanaged by us for the entire period presented; (ii) the results of operationsof WKCF-TV, after our acquisition of the station, on August 31, 2006.

*ThreeMonths Ended March 31, 2007*

*Compared to Three Months Ended March 31, 2006*

14

----

 
| ** **                                         | ** ** | **For the three months ended  March 31,** | ** ** | ** ** | ** ** | ** **        | ** ** |
|----------------------------------------------------|------------|--------------------------------------------------------------------|------------|------------|------------|-------------------|------------|
| ** **                                         | ** ** | **2007**                                                           | ** ** | **2006**   | ** ** | **$ Change** | ** ** | **% Change** | ** ** |
| ** **                                         | ** ** | **(In thousands)**                                            | ** ** | ** ** | ** ** | ** **        | ** ** |
| Total revenue                                      |       | $                                                                  | 169,383    |       | $          | 174,017           |       | $ | (4,634 | ) | -2.7 | % |
| Station operating  expenses:                       |       |                                                               |       |       |       |              |       |   |   |
| Salaries,  benefits and other operating costs      |       | 101,074                                                            |       | 96,787     |       | 4,287             |       | 4.4 | % |
| Amortization of  program rights                    |       | 19,228                                                             |       | 15,332     |       | 3,896             |       | 25.4 | % |
| Depreciation and  amortization                     |       | 14,996                                                             |       | 15,388     |       | (392              | )          | -2.5 | % |
| Corporate, general and  administrative expenses    |       | 7,779                                                              |       | 7,273      |       | 506               |       | 7.0 | % |
| Operating income                                   |       | $                                                                  | 26,306     |       | $          | 39,237            |       | $ | (12,931 | ) | -33.0 | % |
| ** **                                         |       |                                                               |       |       |       |              |       |   |   |
| Interest expense                                   |       | 15,890                                                             |       | 16,462     |       | (572              | )          | -3.5 | % |
| Interest income                                    |       | (346                                                               | )          | (1,302     | )          | (956              | )          | -73.4 | % |
| Interest expense, net —  Capital Trust        |       | 2,438                                                              |       | 2,438      |       | —            |       | 0.0 | % |
| Income before income  taxes and equity             |       | $                                                                  | 8,324      |       | $          | 21,639            |       | $ | (13,315 | ) | -61.5 | % |
|                                               |       |                                                               |       |       |       |              |       |   |   |
| Income tax expense                                 |       | $                                                                  | 3,993      |       | $          | 8,548             |       | $ | (4,555 | ) | -53.3 | % |
| Equity in (income) loss  of affiliates, net of tax |       | 80                                                                 |       | 74         |       | (6                | )          | -8.1 | % |
|                                               |       |                                                               |       |       |       |              |       |   |   |
| Net income                                         |       | $                                                                  | 4,251      |       | $          | 13,017            |       | $ | (8,766 | ) | -67.3 | % |

 

*Totalrevenue*.    Total revenue includes:

(i)             cash advertisingrevenue, net of agency and national representatives’ commissions;

(ii)          retransmission consentrevenue;

(iii)       net digital media revenue,which includes primarily Internet advertising revenue and, to a lesser extent,revenue from advertising on multicast weather channels;

(iv)      network compensation;  and

(v)         other revenue, primarilybarter and trade revenue, and management fees earned form Hearst.

 
| ** **                                                 | ** ** | **For the three months ended March 31,** | ** ** | ** ** | ** ** | ** **        | ** ** |
|------------------------------------------------------------|------------|------------------------------------------------------------------------|------------|------------|------------|-------------------|------------|
| ** **                                                 | ** ** | **2007**                                                               | ** ** | **2006**   | ** ** | **$ Change** | ** ** | **% Change** | ** ** |
| ** **                                                 | ** ** | **(In thousands)**                                                | ** ** | ** ** | ** ** | ** **        | ** ** |
| Net local &  national ad revenue (excluding political) |       | $                                                                      | 146,618    |       | $          | 152,939           |       | $ | (6,321 | ) | -4.1 | % |
| Net digital  media revenue                                 |       | 4,024                                                                  |       | 3,173      |       | 851               |       | 26.8 | % |
| Net political  revenue                                     |       | 1,535                                                                  |       | 2,144      |       | (609              | )          | -28.4 | % |
| Retransmission  consent revenue                            |       | 5,165                                                                  |       | 4,609      |       | 556               |       | 12.1 | % |
| Network  compensation                                      |       | 2,489                                                                  |       | 2,005      |       | 484               |       | 24.1 | % |
| Other revenues                                             |       | 9,552                                                                  |       | 9,147      |       | 405               |       | 4.4 | % |
| Total revenue                                              |       | $                                                                      | 169,383    |       | $          | 174,017           |       | $ | (4,634 | ) | -2.7 | % |

 

Total revenue in thethree months ended March 31, 2007 was $169.4 million as compared to $174.0million in the three months ended March 31, 2006, a decrease of $4.6 million or2.7%. This decrease was primarily attributable to the following factors:

(i)             a decline in localand national ad revenue due to the absence of Olympic advertising and declinein Superbowl advertising in 2007, both of which are important events foradvertising categories such as automotive, fast food, financial andtelecommunications; and

(ii)          a $0.6 million decreasein net political advertising revenue resulting from the normal, cyclical natureof the television broadcasting business, in which the demand for advertising bycandidates running for political office significantly decreases in odd-numberednon-election years (such as 2007); partially offset by

(iii)       increases in ad revenue dueto the inclusion of results of operations from WKCF-TV;

(iv)      a $0.9 million increase innet digital media revenue;

(v)         a $0.6 million increasein retransmission consent revenue; and

(vi)      a $0.5 million increase innetwork compensation.

15

----

 

*Salaries,benefits and other operating costs*.    Duringthe three months ended March 31, 2007, salaries, benefits and other operatingcosts were $101.1 million, as compared to $96.8 million in the three monthsended March 31, 2006, an increase of $4.3 million or 4.4%.  This increase was primarily due to:

(i)             an increase inexpenses due to the inclusion of results of operations from WKCF-TV on August31, 2006;

(ii)   a $1.0 million increase in digital mediaexpenses; and

(iii)       a $0.6 million increase incompensation, pension and employee benefits expense; partially offset by

(iv)      a $1.0 million decrease innews gathering and sales promotion expense.

*Amortizationof program rights*.  Amortization of program rightswas $19.2 million in the three months ended March 31, 2007, as compared to$15.3 million in the three months ended March 31, 2006, an increase of $3.9million or 25.4%. This increase was primarily due to:

(i)               an increase inamortization due to the purchase of WKCF-TV. Programming expenses is a more significant component of operatingexpense for WKCF-TV because the CW network provides fewer hours of programmingthan either ABC, NBC or CBS; and, to a lesser extent

(ii)            the renewal of popularshows at higher rates.

*Depreciationand amortization*.   Depreciation andamortization expense was $15.0 million in the three months ended March 31,2007, as compared to $15.4 million in the three months ended March 31, 2006, adecrease of $0.4 million or 2.5%. Depreciation expense was $13.2 million in thethree months ended March 31, 2007, as compared to $13.9 million in the threemonths ended March 31, 2006, a decrease of $0.7 million or 5.0%.  The decrease in depreciation expense is primarily due to depreciation in full of certainfixed assets, including our corporate office leasehold improvements, partiallyoffset by additional depreciation from WKCF-TV which we acquired on August 31,2006.

*Corporate,general and administrative expenses*.    Corporate,general and administrative expenses were $7.8 million in the three months endedMarch 31, 2007, as compared to $7.3 million in the three months ended March 31,2006, an increase of $0.5 million or 7.0%. This increase was primarily due to:

(i)             a $0.6 million increase in benefits administration,rent and maintenance expense; and

(ii)          a $0.3 million increase in employee costs, a portion of which isrelated to our investment in our digital media initiatives; partially offset by

(iii)       a $0.5 million decrease due to the timing of professionalservices expenses.

*Interestexpense. *Interestexpense was $15.9 million in the three months ended March 31, 2007, as comparedto $16.5 million in the three months ended March 31, 2006, a decrease of $0.6million or 3.5% due to:

(i)             a decrease in interest expense as a result ofthe first of five annual principal payments on our private placement debt of$90 million in December 2006; offset by

(ii)          an increase in interest expense due to the borrowing of $100million on our credit facility in August 2006.

*Interestincome.*    Interest income was $0.3 million in the three months ended March 31,2007, as compared to $1.3 million in the three months ended March 31, 2006, adecrease of $1.0 million or 73.4%. This decrease is due to lower cash balances in2007 as compared to the same period in 2006.

*Income taxes.*    Werecorded income tax expense of $4.0 million in the three months ended March 31,2007, compared to $8.5 million in the three months ended March 31, 2006, adecrease of $4.6 million or 53.3%. The change is a result of a decrease inincome before income taxes from $21.6 million in the three months ended March31, 2006, to $8.3 million in the three months ended March 31, 2007.

Theeffective tax rate for the three months ended March 31, 2007 was 48.0% ascompared to 39.5% for the three months ended March 31, 2006.  On a full year basis, the Company estimatesits annual effective tax rate to be approximately 38%.  The effective tax rate for 2007 gives effectto the adoption of FIN 48.

*Equity in loss (income) of affiliates, net of tax*. Equity in loss (income) of affiliates, net of tax was $0.1 million inloss for three months ended March 31, 2007 and 2006.  For all periods presented, our shareof income in Internet BroadcastingSystems, Inc. (“Internet Broadcasting”) was offset by our share oflosses in Ripe Digital Entertainment,Inc. (“Ripe TV”).

16

----

 

*Net income*.    Netincome was $4.3 million in the three months ended March 31, 2007, as comparedto $13.0 million in the three months ended March 31, 2006, a decrease of $8.8million or 67.3%.  This decrease wasprimarily due to the items described above.

**Liquidityand Capital Resources**

Asof March 31, 2007, the Company’s cash and cash equivalents balance was $32.0million, as compared to $18.6 million as of December 31, 2006.  The net increase in cash and cash equivalentsof $13.4 million during 2007 was due to the factors described below underOperating Activities, Investing Activities, and Financing Activities.
| ** **                                          | ** ** | **For the three months ended  March 31,** | ** ** | ** ** | ** ** | ** **        | ** ** |
|-----------------------------------------------------|------------|-------------------------------------------|------------|------------|------------|-------------------|------------|
| **(in Thousands)**                                  | ** ** | **2007**                                  | ** ** | **2006**   | ** ** | **$ Change** | ** ** | **% Change** | ** ** |
| Net cash provided by operating activities           |       | $                                         | 21,516     |       | $          | 37,487            |       | $ | (15,971 | ) | -42.6 | % |
| Net cash used in investing activities               |       | $                                         | (8,975     | )          | $          | (12,388           | )          | $ | 3,413 |   | -27.6 | % |
| Net cash provided by (used in) financing activities |       | $                                         | 813        |       | $          | (16,696           | )          | $ | 17,509 |   | — |   |
|                                                |       |                                      |       |       |       |              |       |   |   |
| Cash paid during the year for:                      |       |                                      |       |       |       |              |       |   |   |
| Interest                                            |       | $                                         | 7,331      |       | $          | 6,790             |       | $ | 541 |   | 8.0 | % |
| Interest on Note payable to Capital Trust           |       | $                                         | —     |       | $          | 2,438             |       | $ | (2,438 | ) | -100.0 | % |
| Taxes, net of refunds                               |       | $                                         | 22,926     |       | $          | 12,572            |       | $ | 10,354 |   | 82.4 | % |
| Dividends paid on common stock                      |       | $                                         | 6,523      |       | $          | 6,486             |       | $ | 37 |   | 0.6 | % |
| Series A Common Stock repurchases                   |       | $                                         | —     |       | $          | 798               |       | $ | (798 | ) | -100.0 | % |

 

*OperatingActivities*

Net cash provided byoperating activities was $21.5 million in the three months ended March 31,2007, as compared to $37.5 million in the three months ended March 31, 2006, adecrease of $16.0 million or 42.6%. This increase was primarily due to:

(i)             lowerrevenue and net income; and

(ii)          changes in otheroperating assets and liabilities, driven by higher tax and programming paymentsin 2007 than in the same period in 2006.

*InvestingActivities*

Net cash used ininvesting activities was $9.0 million in the three months ended March 31, 2007,as compared to $12.4 million in the three months ended March 31, 2006, adecrease of $3.4 million.  This decreaseis primarily due to:

(i)             $6.5 million ininvestments in Internet Broadcasting and USDTV in the three months ended March31, 2006; and

(ii)          $1.0 million in cashproceeds from insurance companies received in the three months ended March 31,2007; partially offset by

(iii)       an increase in capitalexpenditures in the three months ended March 31, 2007 as compared to the sameperiod in 2006.

During the three monthsended March 31, 2007, we invested $11.6 million in capital expenditures ascompared to $7.8 million invested in the three months ended March 31,2006.  The increased level of capitalinvestment relates primarily to construction projects at KMBC-TV in KansasCity, Missouri and at WBAL-TV in Baltimore, Maryland.

*Financing Activities*

Net cash providedby financing activities was $0.8 million in the three months ended March 31,2007, as compared to net cash used in financing activities of $16.7 million inthe three months ended March 31, 2006, a change of $17.5 million. This increasewas primarily due to:

17

----

 

(i)             proceeds from stockoption exercises and employee stock purchases of $7.3 million in the threemonths ended March 31, 2007 compared to $0.6 million in the three months endedMarch 31, 2006;

(ii)          the repurchase of $10.0million of our senior notes due 2018 in the three months ended March 31, 2006;and

(iii)       the repurchase of $0.8million of Series A Common Stock during the three months ended March 31, 2006.

*Credit Facility and Other Long Term Debt*

In November 2006, weincreased our five-year unsecured revolving credit facility which matures onApril 15, 2010 to $500 million. The credit facility can be used for generalcorporate purposes including working capital, investments, acquisitions, debtrepayment and dividend payments. Outstanding principal balances under the credit facility bear interestat our option at LIBOR or the alternate base rate (“ABR”), plus the applicablemargin.  The applicable margin for ABRloans is zero.  The applicable margin forLIBOR loans varies between 0.50% and 1.00% depending on the ratio of our totaldebt to earnings before interest, taxes, depreciation and amortization asdefined by the credit agreement (the “Leverage Ratio”).  The ABR is the greater of (i) the prime rateor (ii) the Federal Funds Effective Rate in effect plus 0.5%.  We are required to pay a commitment fee basedon the unused portion of the credit facility. The commitment fee ranges from 0.15% to 0.25% depending on our LeverageRatio.  The credit facility is a generalunsecured obligation of the Company.  Wehave borrowed $100.0 million under the credit facility as of March 31, 2007.

As of March 31,2007, our long-term debt obligations, exclusive of capital lease obligations,were $777.1 million and our current debt maturities totaled $90 million.  The Company has the ability and intent torefinance its $125 million principal amount of 7% senior notes due November2007 and therefore has continued to classify the debt at a long-term obligationon the consolidated balance sheet.  Ourlong-term debt obligations bear interest at a fixed rate.  The Company’s credit ratings were BBB- byStandard & Poor’s and Fitch Ratings and Baa3 by Moody’s Investors Service,as of March 31, 2007.  Such creditratings are considered to be investment grade.

Ourdebt obligations contain certain financial and other covenants and restrictionson the Company.  Certain of the financialcovenants include credit ratios such as leverage and interest coverage, andthreshold tests such as consolidated net worth, but such covenants do notinclude any triggers explicitly tied to the Company’s credit ratings or stockprice.  We are in compliance with allsuch covenants and restrictions as of March 31, 2007.

We anticipate thatour primary sources of cash, which include current cash balances, cash providedby operating activities, and amounts available under our credit facility, willbe sufficient to finance the operating and working capital requirements of ourstations, as well as our debt service requirements, anticipated capitalexpenditures, and other obligations of the Company for the next 12 months andthe foreseeable future thereafter.

**Item 3.    Quantitativeand Qualitative Disclosures About Market Risk**

As of March 31,2007, the Company was not involved in any derivative financialinstruments.  However, the Company mayconsider certain interest-rate risk strategies in the future.

As of March 31, 2007, we have borrowed $100 millionunder our credit facility, which loan bears interest at LIBOR plus theapplicable margin.  The applicable marginon LIBOR loans varies between 0.50% and 1.00% depending on the ratio of totaldebt to earnings before interest, taxes, depreciation and amortization asdefined by the credit agreement.

**Item 4.    Controls and Procedures**

TheCompany’s management performed an evaluation under the supervision and with theparticipation of the Company’s Chief Executive Officer (“CEO”) and ChiefFinancial Officer (“CFO”), of the effectiveness of the disclosure controls andprocedures (as that term is defined in Exchange Act Rule 13a-15(e)) as of theend of the fiscal quarter ended March 31, 2007. Based on that evaluation, and as of the end of the quarter for whichthis report is made, the Company’s management, including the CEO and CFO,concluded that the Company’s disclosure controls and procedures wereeffective.  Our management, including theCEO and CFO, performed an evaluation of any changes that occurred in ourinternal control over financial reporting (as that term is defined in ExchangeAct Rule 13a-15(f)) during the fiscal quarter ended March 31, 2007.  That evaluation did not identify any changesin the Company’s internal 

18

----

control overfinancial reporting that have materially affected, or are reasonably likely tomaterially affect, the Company’s internal control over financial reporting.

19

----

**PART II**

**OtherInformation**

**Item 2.    UnregisteredSales of Equity Securities, Use of Proceeds and Issuer Purchases of EquitySecurities.**

*Purchaseof Equity Securities by the Issuer and Affiliated Purchasers. *The following tablereflects purchases of our Series A Common Stock made by Hearst Broadcastingduring the three months ended March 31, 2007:
| **Period**                     | ** ** | **Total Number  of Shares  Purchased** | ** ** | **Average Price  Paid Per  Share** | ** ** | **Total Number of  Shares Purchased as  Part of Publicly  Announced Program** | ** ** | **Maximum Number of  Shares that May Yet Be  Purchased Under the  Program** | ** ** |
|--------------------------------|------------|--------------------------------------------------|------------|----------------------------------------------|------------|------------------------------------------------------------------------------------------------------------------|------------|---------------------------------------------------------------------------------------------------------------------|------------|
| January 1 — January 31    |       | 0                                                |       | $                                            | 0.00       |                                                                                                             | 0          |                                                                                                                |       |   |
| February 1 — February  28 |       | 0                                                |       | $                                            | 0.00       |                                                                                                             | 0          |                                                                                                                |       |   |
| March 1 — March 31        |       | 0                                                |       | $                                            | 0.00       |                                                                                                             | 0          |                                                                                                                | 1,184,656  | (1) |
| Total                          |       | 0                                                |       | $                                            | 0.00       |                                                                                                             | 0          |                                                                                                                |       |   |

----

(1)          On September 28, 2005,Hearst increased Hearst Broadcasting’s authorization to purchase the Company’sSeries A Common Stock from 20 million to 25 million shares.   Hearst may effect such purchases from timeto time in the open market or in private transactions, subject to marketconditions and management’s discretion.

As of March 31,2007, Hearst beneficially owned approximately 52.7% of the Company’soutstanding Series A Common Stock and 100% of the Company’s Series B CommonStock, representing in the aggregate approximately 73.6% of our common stock.

Thefollowing table reflects purchases made by the Company of its Series A CommonStock during the three months ended March 31, 2007.
| **Period**                     | ** ** | **Total Number of  Shares  Purchased** | ** ** | **Average Price  Paid Per  Share** | ** ** | **Total Number of  Shares Purchased as  Part of Publicly  Announced Program** | ** ** | **Approximate Dollar  Value of Shares that  May Yet Be Purchased  Under the Program** | ** ** |
|--------------------------------|------------|--------------------------------------------------|------------|----------------------------------------------|------------|------------------------------------------------------------------------------------------------------------------|------------|------------------------------------------------------------------------------------------------------------------------------------|------------|
| January 1 — January 31    |       | 0                                                |       | $                                            | 0.00       |                                                                                                             | 0          |                                                                                                                               |       |   |
| February 1 — February  28 |       | 0                                                |       | $                                            | 0.00       |                                                                                                             | 0          |                                                                                                                               |       |   |
| March 1 — March 31        |       | 0                                                |       | $                                            | 0.00       |                                                                                                             | 0          |                                                                                                                               | $          | 196,710,259 | (1) |
| Total                          |       | 0                                                |       | $                                            | 0.00       |                                                                                                             | 0          |                                                                                                                               |       |   |
|                                |            |                                                  |            |                                              |            |                                                                                                                  |            |                                                                                                                                    |            |  |  |

----

(1)             InMay 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 effected from time totime in the open market or in private transactions, subject to marketconditions and management’s discretion. As of March 31, 2007, the Company has spent approximately $110.8 millionto repurchase approximately 4.5 million shares of Series A Common Stock at anaverage price of $24.87. There can be no assurance that such repurchases willoccur in the future or, if they do occur, what the terms of such repurchaseswill be.

20

----

 

**Item 6.    Exhibits**

**(a) Exhibits:**
| 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. |

 

21

----

 

**SIGNATURES**

Pursuant to therequirements of the Securities Exchange Act of 1934, the registrant has dulycaused this report to be signed on its behalf by the undersigned thereunto dulyauthorized.
|        | ** ** | **HEARST-ARGYLE  TELEVISION, INC.** |
|--------|------------|-------------------------------------|
|   |       |                                |   |   |
|   |       |                                |   |   |
|   |       | By:                                 | /s/ JONATHAN  C. MINTZER |
|   |       |                                | Name: Jonathan  C. Mintzer |   |   |   |
|   |       | ** **                          | Title: Vice President, General Counsel and  Secretary |
|   |       |                                |
|   |       | Dated:                              | April 27, 2007 |
|   |       | ** **                          |
|   |       | ** **                          |
|        |            |                                     |  |  |  |  |  |

 

| Name                      | ** ** | **Title**                                                                           | ** ** | **Date**       |
|---------------------------|------------|-------------------------------------------------------------------------------------|------------|----------------|
|                      |       |                                                                                |       |           |
| /s/ HARRY T. HAWKS        |       |                                                                                |       |           |
|  Harry T. Hawks      |       | Executive Vice  President and Chief Financial Officer (Principal Financial Officer) |       | April 27, 2007 |
| /s/  LYDIA  G. BROWN |       |                                                                                |       |           |
|  Lydia G. Brown      |       | Corporate  Controller (Principal Accounting Officer)                                |       | April 27, 2007 |
|                      |       |                                                                                |       |           |

 

22

----