##### 



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
  þ
    
    Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended September 30, 2006
 or
 o
    
    Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from  to .
 Commission file number 000-51636
 Triple Crown Media, Inc.
  Delaware
    
    20-3012824(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification Number)546 East Main Street, Lexington, Kentucky
    
    40508(Address of principal executive offices)
    
    (Zip code)
 (859) 226-4678  (Registrants telephone number, including area code)
 Not Applicable  (Former name, former address and former fiscal year, if changed since last report)
 þ o
  o o þ
 o þ
  5,249,109 shares outstanding as of October 31, 2006




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##### 



PAGEPART I.
    
    FINANCIAL INFORMATIONItem 1.
    
    Financial StatementsCondensed consolidated balance sheets  June 30, 2006
(Audited) and September 30, 2006 (Unaudited)
    
    
    3Condensed combined and consolidated statements of
operations (Unaudited)  Three months ended September
30, 2005 and 2006
    
    
    4Combined and consolidated statements of cash flows
(Unaudited)  Three months ended September 30, 2005 and
2006
    
    
    5Notes to condensed combined and consolidated financial
statements (Unaudited)
    
    
    6Item 2.
    
    Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    19Item 3.
    
    Quantitative and Qualitative Disclosure About Market Risk
    
    
    28Item 4.
    
    Controls and Procedures
    
    
    28PART II.
    
    OTHER INFORMATIONItem 1A.
    
    Risk Factors
    
    
    29Item 6.
    
    Exhibits
    
    
    29SIGNATURES
    
    
    30Exhibit 31.1  Certifications of Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002Exhibit 31.2  Certifications of Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002Exhibit 32.1  Certifications of Chief Executive Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002Exhibit 32.2  Certifications of Chief Financial Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
 2




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##### 



PART 1. FINANCIAL INFORMATION
 Item 1. Financial Statements
 TRIPLE CROWN MEDIA, INC.
CONSOLIDATED BALANCE SHEETS
 June 30,
    
    
    September 30,2006
    
    
    2006(Audited)
    
    
    (Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    173
    
    
    $
    508Accounts receivable, less allowance for doubtful accounts of
$434 and $447, respectively
    
    
    11,412
    
    
    
    20,703Inventories
    
    
    1,498
    
    
    
    1,661Other current assets
    
    
    1,949
    
    
    
    2,237Total current assets
    
    
    15,032
    
    
    
    25,109Property and equipment:Land
    
    
    1,993
    
    
    
    1,993Buildings and improvements
    
    
    7,737
    
    
    
    7,737Equipment
    
    
    19,777
    
    
    
    20,95129,507
    
    
    
    30,681Accumulated depreciation
    
    
    (16,457
    )
    
    
    (17,767
    )13,050
    
    
    
    12,914Goodwill
    
    
    87,475
    
    
    
    93,418Other intangible assets, net
    
    
    24,917
    
    
    
    24,131Deferred income taxes
    
    
    16,193
    
    
    
    16,981Other assets
    
    
    6,908
    
    
    
    5,953Total assets
    
    $
    163,575
    
    
    $
    178,506LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS DEFICITCurrent liabilities:Current portion of long-term debt
    
    $
    900
    
    
    $
    9,550Accounts payable
    
    
    3,849
    
    
    
    5,724Accrued expenses
    
    
    11,526
    
    
    
    12,566Accrued fees payable to Gray Television, Inc.
    
    
    3,420
    
    
    
    3,420Deferred revenue
    
    
    4,576
    
    
    
    9,504Total current liabilities
    
    
    24,271
    
    
    
    40,764Long-term debt
    
    
    118,376
    
    
    
    117,660Other liabilities
    
    
    2,332
    
    
    
    2,250Series B redeemable preferred stock, $.001 par value (authorized 20,000
shares; issued and outstanding 6,050 shares; $6,050 liquidation value)
    
    
    4,425
    
    
    
    4,447Total liabilities
    
    
    149,404
    
    
    
    165,121Series A redeemable, convertible preferred stock, $.001 par value (authorized 50,000
shares; issued and outstanding 20,890 shares; $20,890 liquidation value)
    
    
    16,885
    
    
    
    16,947Commitments and contingenciesStockholders deficit:Common stock, par value $0.001 (authorized 25,000 shares, issued and
outstanding (5,187 and 5,257 shares, respectively)
    
    
    5
    
    
    
    5Additional paid-in capital
    
    
    3,453
    
    
    
    4,075Accumulated deficit
    
    
    (6,572
    )
    
    
    (7,588
    )Accumulated other comprehensive income (loss), net of tax
    
    
    400
    
    
    
    (54
    )Total stockholders deficit
    
    
    (2,714
    )
    
    
    (3,562
    )Total liabilities, preferred stock and stockholders deficit
    
    $
    163,575
    
    
    $
    178,506
  3




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##### 



TRIPLE CROWN MEDIA, INC.
COMBINED AND CONSOLIDATED STATEMENTS OF OPERATIONS
 Three Months EndedSeptember 30,2005
    
    
    2006(Unaudited)Operating revenues:Publishing
    
    $
    9,786
    
    
    $
    11,985Collegiate marketing and production services
    
    
    
    
    
    
    12,809Association management services
    
    
    
    
    
    
    2,724Wireless
    
    
    1,860
    
    
    
    1,59011,646
    
    
    
    29,108Expenses:Operating expenses before depreciation, amortization
and loss on disposal of assets, net:Publishing
    
    
    7,498
    
    
    
    8,527Collegiate marketing and production services
    
    
    
    
    
    
    12,791Association management services
    
    
    
    
    
    
    1,708Wireless
    
    
    1,724
    
    
    
    1,356Corporate and administrative
    
    
    361
    
    
    
    1,113Depreciation
    
    
    341
    
    
    
    542Amortization
    
    
    
    
    
    
    786Gain on disposal of assets, net
    
    
    (599
    )
    
    
    (17
    )9,325
    
    
    
    26,806Operating income
    
    
    2,321
    
    
    
    2,302Other income (expense):Interest expense related to Series B preferred stock
    
    
    
    
    
    
    (113
    )Interest expense, other
    
    
    
    
    
    
    (3,154
    )Debt issue cost amortization
    
    
    
    
    
    
    (266
    )Income (loss) from continuing operations before income taxes
    
    
    2,321
    
    
    
    (1,231
    )Income tax expense (benefit)
    
    
    884
    
    
    
    (486
    )Earnings (loss) from continuing operations
    
    
    1,437
    
    
    
    (745
    )Income from discontinued operations, net of tax
    
    
    242Net income (loss)
    
    
    1,679
    
    
    
    (745
    )Series A preferred stock dividends accrued
    
    
    
    
    
    
    (271
    )Net income (loss) available to common stockholders
    
    $
    1,679
    
    
    $
    (1,016
    )Basic and diluted per share information:Earnings (loss) from continuing operations
    
    $
    0.29
    
    
    $
    (0.14
    )Income from discontinued operations
    
    $
    0.05
    
    
    $
    Net income (loss)
    
    $
    0.34
    
    
    $
    (0.14
    )Net income (loss) available to common stockholders
    
    $
    0.34
    
    
    $
    (0.20
    )Weighted average shares outstanding
    
    
    4,870
    
    
    
    5,169
  4




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##### 



TRIPLE CROWN MEDIA, INC.
COMBINED AND CONSOLIDATED STATEMENTS OF CASH FLOWS
 Three Months EndedSeptember 30,2005
    
    
    2006(Unaudited)
    
    
    (Unaudited)Operating activities:Net income (loss)
    
    $
    1,679
    
    
    $
    (745
    )Income on discontinued operations
    
    
    (242
    )Income (loss) from continuing operations
    
    $
    1,437
    
    
    $
    (745
    )Adjustments to reconcile net income (loss) to net
cash provided by operating activities:Depreciation
    
    
    341
    
    
    
    542Amortization
    
    
    
    
    
    
    1,052Interest accrued on redeemable preferred stock
    
    
    
    
    
    
    113Gain on disposal of assets, net
    
    
    (599
    )
    
    
    (15
    )Stock compensation expense
    
    
    
    
    
    
    106Issuance of common stock to 401K plan
    
    
    
    
    
    
    110Deferred income taxes
    
    
    244
    
    
    
    (486
    )Changes in operating assets and liabilities:Accounts receivable
    
    
    376
    
    
    
    (8,301
    )Inventories
    
    
    27
    
    
    
    (163
    )Other current assets
    
    
    12
    
    
    
    589Accounts payable and accrued expenses
    
    
    (225
    )
    
    
    2,468Accrued income taxes
    
    
    1,308Deferred revenue
    
    
    (89
    )
    
    
    3,815Other assets and liabilities
    
    
    
    
    
    
    445Net cash provided by (used in) continuing operations
    
    
    2,832
    
    
    
    (470
    )Net cash used in discontinued operations
    
    
    (258
    )Net cash provided by (used in) operating activities
    
    
    2,574
    
    
    
    (470
    )Investing activities:Purchases of property and equipment
    
    
    (644
    )
    
    
    (244
    )Proceeds from asset sales
    
    
    1,484
    
    
    
    15Acquisition of business, net of cash acquired
    
    
    
    
    
    
    (6,305
    )Net cash provided by (used in) investing activities
    
    
    840
    
    
    
    (6,534
    )Financing activities:Proceeds from borrowings on revolving line of credit
    
    
    
    
    
    
    10,750Other transfers to Gray Television, Inc., net
    
    
    (3,385
    )Repayments of borrowings on debt
    
    
    
    
    
    
    (2,816
    )Debt issue costs
    
    
    
    
    
    
    (595
    )Net cash (used in) provided by financing activities
    
    
    (3,385
    )
    
    
    7,339Increase in cash and cash equivalents
    
    
    29
    
    
    
    335Cash and cash equivalents, beginning of period
    
    
    301
    
    
    
    173Cash and cash equivalents, end of period
    
    $
    330
    
    
    $
    508Supplemental cash flow information:Interest Paid
    
    
    
    
    
    $
    3,081
  5




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##### 



TRIPLE CROWN MEDIA, INC.
NOTES TO CONDENSED COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
 NOTE 1  BASIS OF PRESENTATION
  Organization and Business Description 
     Change in Fiscal Year 
 Stock-Based Compensation 
 6




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##### 



Three MonthsEndedSeptember 30,2005Net income available to common
stockholders, as reported
    
    $
    1,679Add: Stock-based employee
compensation expense included in
reported net income, net of related
tax effects
    
    
    0Deduct: Total stock-based employee
compensation expense determined
under fair value based method for all
awards, net of related tax effects
    
    
    (7
    )Net income available to common
stockholders, pro forma
    
    $
    1,672Net income available to common
stockholders per share:Basic and diluted, as reported
    
    $
    0.34Basic and diluted, pro forma
    
    $
    0.34
  Valuation and Impairment Testing of Intangible Assets 
  7




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##### 



Accounting for Derivatives 
   Earnings Per Share 
  Seasonality 
 Reclassifications
 NOTE 2  ACQUISITIONS
 Acquisition of Bull Run Corporation
  8




---



##### 



Bull Run debt repaid at closing
    
    $
    72,124Common and preferred stock issued
    
    
    24,313Redemption of Bull Run preferred stock
    
    
    2,825Assumption of Bull Run operating liabilities
    
    
    2,484Cash acquired at closing
    
    
    (1,022
    )$
    100,724
   Receivables
    
    $
    16,877Other current assets
    
    
    1,791Property and equipment
    
    
    4,044Goodwill
    
    
    69,075Customer relationships, trademarks and tradenames
    
    
    17,700Other noncurrent assets
    
    
    2,757Deferred income taxes
    
    
    16,018Accounts payable and accrued expenses
    
    
    (20,218
    )Deferred revenue
    
    
    (5,196
    )Other noncurrent liabilities
    
    
    (2,124
    )$
    100,724
  (Unaudited)Three MonthsEnded September30, 2005Operating revenues
    
    $
    25,549Operating income (loss)
    
    
    2,509Net income (loss)
    
    
    537Net income (loss) available to common stockholders
    
    
    537Per share, basic and diluted:Net loss available to common stockholders
    
    $
    0.10Pro forma weighted average shares outstanding
    
    
    5,129
  9




---



##### 



Acquisition of the Jonesboro Group
    Receivables
    
    $
    716Other current assets
    
    
    115Property and equipment
    
    
    1,410Goodwill
    
    
    13,618Customer base and trademarks
    
    
    7,830Deferred income taxes
    
    
    (1,873
    )Accounts payable and accrued expenses
    
    
    (165
    )Deferred Revenue
    
    
    (151
    )$
    21,500
   10




---



##### 



(Unaudited)Three MonthsEnded September30, 2005Operating revenues
    
    $
    25,841Operating income (loss)
    
    
    2,731Net income (loss)
    
    
    675Net income (loss) available to common stockholders
    
    
    675Per share, basic and diluted:Net loss available to common stockholders
    
    $
    0.13Pro forma weighted average shares outstanding
    
    
    5,129
  Acquisition of Pinnacle Sports Productions, LLC
   Cash paid
    
    $
    3,155Pinnacle debt repaid at closing
    
    
    2,984Common stock issued
    
    
    406Assumption of Pinnacle operating liabilities
    
    
    176Cash acquired at closing
    
    
    (10
    )$
    6,711
   Receivables
    
    $
    990Other current assets
    
    
    877Property and equipment
    
    
    226Goodwill
    
    
    5,943Accounts payable and accrued expenses
    
    
    (212
    )Deferred revenue
    
    
    (1,113
    )$
    6,711
 11




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##### 



NOTE 3  CORPORATE AND ADMINISTRATIVE EXPENSE
  NOTE 4  TRANSACTIONS WITH AFFILIATED COMPANIES
 Insurance
Contract with Georgia Casualty & Surety Co. 
 Rights-Sharing Agreement with Gray 
 12




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##### 



NOTE 5  LONG-TERM DEBT
  June 30,
    
    
    September, 302006
    
    
    2006First lien senior term loan
    
    $
    89,276
    
    
    $
    88,560Second lien senior term loan
    
    
    30,000
    
    
    
    30,000First lien revolving credit facility
    
    
    
    
    
    
    8,650119,276
    
    
    
    127,210
     13




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##### 



NOTE 6  INCOME TAXES
  NOTE 7  DISCONTINUED OPERATIONS
   For the ThreeMonths EndedSeptember 30, 2005Operating revenue
    
    $
    1,478Income before taxes
    
    
    391Income tax expense
    
    
    149Income, net of tax
    
    
    242
  NOTE 8  PREFERRED STOCK
  14




---



##### 



NOTE 9  OTHER COMPREHENSIVE INCOME (LOSS)
  Three Months EndedSeptember 30,2005
    
    
    2006Net income (loss)
    
    $
    1,679
    
    
    $
    (745
    )Other comprehensive loss, change
in the valuation of an interest rate
swap agreement, net of tax of ($303)
    
    
    
    
    
    
    (454
    )Comprehensive income (loss)
    
    $
    1,679
    
    
    $
    (1,199
    )
  NOTE 10  EMPLOYEE BENEFIT PLANS
 Stock Options and Other Equity Compensation Plans 
 15




---



##### 



Weighted-average expencted volatility
    
    
    33.6
    %Expected life (years)
    
    
    5.75Expected dividend yield
    
    
    0.00
    %Risk-free interest rate
    
    
    4.97
    %
   16




---



##### 



Employee Benefit Plans 
    NOTE 11  INFORMATION ON BUSINESS SEGMENTS
  17




---



##### 



Three Months EndedSeptember 30,2005
    
    
    2006Operating revenues:Publishing
    
    $
    9,786
    
    
    $
    11,985Collegiate marketing and production services
    
    
    
    
    
    
    12,809Association management
    
    
    
    
    
    
    2,724Wireless
    
    
    1,860
    
    
    
    1,590Total operating revenue
    
    $
    11,646
    
    
    $
    29,108Operating income:Publishing
    
    $
    1,821
    
    
    $
    3,018Collegiate marketing and production services
    
    
    
    
    
    
    (454
    )Association management
    
    
    
    
    
    
    705Wireless
    
    
    861
    
    
    
    152Corporate
    
    
    (361
    )
    
    
    (1,119
    )Total operating income
    
    
    2,321
    
    
    
    2,302Interest expense
    
    
    
    
    
    
    (3,267
    )Debt issue cost amortization
    
    
    
    
    
    
    (266
    )Income from continuing operations before taxes
    
    $
    2,321
    
    
    $
    (1,231
    )
 As of
    
    
    As ofJune 30,
    
    
    September 30,2006
    
    
    2006Identifiable assets:Publishing
    
    $
    36,272
    
    
    $
    34,732Collegiate marketing and production services
    
    
    79,813
    
    
    
    96,576Association management
    
    
    21,332
    
    
    
    21,362Wireless
    
    
    4,507
    
    
    
    4,089141,924
    
    
    
    156,759Corporate
    
    
    21,651
    
    
    
    21,747Total identifiable assets
    
    $
    163,575
    
    
    $
    178,506
  NOTE 12  COMMITMENTS AND CONTINGENCIES
 18




---



##### 



Legal Matters
 Indemnification
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Overview
        19




---



##### 



Revenues
  Three Months Ended September 30,2005
    
    
    2006Amount
    
    
    %
    
    
    Amount
    
    
    %Publishing:Retail
    
    $
    5,490
    
    
    
    47.1
    %
    
    $
    6,246
    
    
    
    21.5
    %Classifieds
    
    
    3,207
    
    
    
    27.5
    %
    
    
    4,277
    
    
    
    14.7
    %Circulation
    
    
    1,031
    
    
    
    8.9
    %
    
    
    1,098
    
    
    
    3.8
    %Other
    
    
    58
    
    
    
    0.5
    %
    
    
    364
    
    
    
    1.3
    %$
    9,786
    
    
    
    84.0
    %
    
    $
    11,985
    
    
    
    41.2
    %Collegiate Marketing &
Production Services:Advertising and sponsorship
    
    
    
    
    
    
    
    
    
    $
    9,101
    
    
    
    31.3
    %Product sales and production services
    
    
    
    
    
    
    
    
    
    
    2,154
    
    
    
    7.4
    %Station rights fees and other
    
    
    
    
    
    
    
    
    
    
    1,554
    
    
    
    5.3
    %$
    12,809
    
    
    
    44.0
    %Association Management
Services:Management services
    
    
    
    
    
    
    
    
    
    $
    1,872
    
    
    
    6.4
    %Advertising and other
    
    
    
    
    
    
    
    
    
    
    852
    
    
    
    2.9
    %$
    2,724
    
    
    
    9.4
    %Wireless:Lease, sales and service
    
    $
    1,860
    
    
    
    16.0
    %
    
    $
    1,590
    
    
    
    5.5
    %Total Revenues
    
    $
    11,646
    
    
    
    100.0
    %
    
    $
    29,108
    
    
    
    100.0
    %
 Results of Operations
 Three Months Ended September 30, 2006 compared to Three Months Ended September 30, 2005
  20




---



##### 



Revenues.
 
    
    Newspaper Publishing revenues of approximately $12.0 million for the three months ended
September 30, 2006, in the aggregate, increased approximately 22% compared to the three
months ended September 30, 2005. Total retail advertising revenue increased 14%, whereas
classified advertising revenue increased 33%. The increase in retail advertising revenue
was due largely to growth at The Gwinnett Daily Post and the acquisition of the Jonesboro
Group further discussed in Note 2 above, partly offset by declines at The Albany Herald,
which has been affected by the loss of certain advertisers. Classified advertising revenues
increased at all of our newspaper properties primarily due to real estate and foreclosures.
    
    Collegiate Marketing and Production Services revenue was approximately $12.8 million
for the three months ended September 30, 2006. This business segment was acquired in the
Merger and, as such, there was no revenue recognized by us related to this business segment
for the three months ended September 30, 2005. Revenue for this segment was approximately
$9.9 million for the three months ended September 30, 2005, all of which was derived prior
to the Merger. The increase was primarily attributable to the expansion of marketing rights
available under contract extensions with certain universities and an increase in revenues
derived from rights available under existing contracts.
    
    Association Management revenue was approximately $2.7 million for the three months
ended September 30, 2006. This business segment was acquired in the Merger and, as such,
there was no revenue recognized by us related to this business segment for the three months
ended September 30, 2005. Revenue for this segment was approximately $2.5 million for the
three months ended September 30, 2005 all of which was derived prior to the Merger.
The increase was primarily attributable to an association management contract added in June
2006.
    
    GrayLink Wireless revenue decreased 15% to approximately $1.6 million for the three
months ended September 30, 2006 compared to approximately $1.9 million for the three months
ended September 30, 2005. Our GrayLink Wireless business had approximately 34,200 and
27,800 pagers in service as of September 30, 2005 and 2006, respectively. The number of
pagers in service decreased as a result of increased competition from other communication
services and products such as cellular telephones. The number of pagers in service has
declined over the past several years. The decrease in revenue from the sale and leasing of
pagers has been partially offset by reselling cellular telephone services. Paging revenue,
excluding revenue from reselling cellular telephone services, accounted for approximately
$1.0 million of total GrayLink Wireless revenue in 2005 compared to approximately $0.8
million in 2006. The trend of declining GrayLink paging revenue is expected to continue in
the future.
 Operating expenses.
  
    
    Newsprint expenses increased 21% to approximately $1.6 million. The increase in
newsprint expense was primarily due to the acquisition of the Jonesboro Group per Note 2.
Total usage was approximately 2,600 and 2,500 metric tons for the three months ended
September 30, 2005 and 2006, respectively.
    
    Newspaper Publishing payroll expenses increased 8% to approximately $3.9 million
primarily due to the acquisition of the Jonesboro Group discussed further in Note 2.
    
    Newspaper Publishing transportation service costs, which are primarily outsourced,
increased 13% to approximately $1.2 million in the three months ended September 30, 2006
compared to
 21




---



##### 



approximately $1.0 million for the three months ended September 30, 2005. The
increase between the periods reflects general increases in fuel costs, which resulted in
higher rates paid to independent contractors and the acquisition of the Jonesboro Group
discussed further in Note 2.
      Interest expense.
 Debt issue cost amortization.
 Income tax expense.
 Liquidity and Capital Resources
 General
  22




---



##### 



Three Months EndedSeptember 30,2005
    
    
    2006Net cash provided by (used in) operating activities
    
    $
    2,574
    
    
    $
    (470
    )Net cash provided by (used in) investing activities
    
    
    840
    
    
    
    (6,534
    )Net cash (used in) provided by financing activities
    
    
    (3,385
    )
    
    
    7,339Net decrease in cash and cash equivalents
    
    $
    29
    
    
    $
    335
 June 30,
    
    September 30,2006
    
    2006Cash and cash equivalents
    
    $
    173
    
    
    $
    508Long-term debt, including current portion
    
    $
    119,276
    
    
    $
    127,210
 Three Months Ended September 30, 2006 compared to Three Months Ended September 30, 2005
    Off-Balance Sheet Arrangements
   Contractual Obligations as of September 30, 2006
 23




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##### 



(Dollars in thousands)
    
    Payment Due by PeriodYear
    
    
    Years
    
    
    Years
    
    
    More ThanContractual Obligations
    
    Total
    
    
    1
    
    
    2-3
    
    
    4-5
    
    
    5 YearsLong-term debt obligations
    
    $
    118,560
    
    
    $
    900
    
    
    $
    1,800
    
    
    $
    115,860
    
    
    $
    Interest obligations (1)
    
    
    45,374
    
    
    
    12,164
    
    
    
    24,085
    
    
    
    9,125
    
    
    
    Operating lease obligations (2)
    
    
    6,106
    
    
    
    1,764
    
    
    
    2,160
    
    
    
    1,522
    
    
    
    660Purchase obligations (3)
    
    
    236,161
    
    
    
    25,711
    
    
    
    50,822
    
    
    
    46,440
    
    
    
    113,188$
    406,201
    
    
    $
    40,539
    
    
    $
    78,867
    
    
    $
    172,947
    
    
    $
    113,848
 
 (1)
    
    Interest obligations assume the LIBOR rate in effect as of September 30, 2006, as
adjusted for the fixed interest rate under the interest rate swap agreement for the
period during which the interest rate swap agreement will be effective. Interest
obligations are presented through the maturity dates of each component of the credit
facilities.(2)
    
    Operating lease obligations represent payment obligations under non-cancelable
lease agreements classified as operating leases and disclosed pursuant to Statements of
Financial Accounting Standards No. 13, Accounting for Leases, as may be modified or
supplemented. These amounts are not recorded as liabilities as of the current balance
sheet date. Operating lease obligations are presented net of future receipts on
contracted sublease arrangements totaling approximately $0.7 million as of September 30,
2006.(3)
    
    Purchase obligations primarily consist of future guaranteed rights fee commitments
to associations or institutions under contractual arrangements of typically three to ten
years, which expire at varying times through 2019.    24




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##### 



Certain Relationships
   Critical Accounting Policies
 25




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##### 



Revenue Recognition and Rights Fee Expenses
      Valuation and Impairment Testing of Intangible Assets
  26




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##### 



Deferred Income Taxes
  27




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##### 



Transactions with Related Parties
  Interest Rate and Market Rate Risk
   Forward-Looking Statements
  Item 3. Quantitative and Qualitative Disclosure About Market Risk
  Item 4. Controls and Procedures
 Disclosure Controls and Procedures
 28




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##### 



Changes in Internal Control over Financial Reporting
  PART II. OTHER INFORMATION
 Item 1A. Risk Factors
  Item 6. Exhibits
 Exhibit 31.1
    
    Rule 13 (a)  14(a) Certificate of Chief Executive OfficerExhibit 31.2
    
    Rule 13 (a)  14(a) Certificate of Chief Financial OfficerExhibit 32.1
    
    Section 1350 Certificate of Chief Executive OfficerExhibit 32.2
    
    Section 1350 Certificate of Chief Financial Officer
 29




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##### 



SIGNATURES
  TRIPLE CROWN MEDIA, INC.Date: November 8, 2006
    by:
    /s/ MARK G. MEIKLEMark G. MeikleExecutive Vice President and Chief
     Financial Officer 30