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  **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****Forthe quarterly period ended****March 31, 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.**(Exact name of registrant as specified in its charter)   **Delaware** **20-3012824**   (State or other jurisdiction of (I.R.S. Employerincorporation or organization) 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.)Indicate by check mark whether the registrant (1) has filed all reports required to be filed bySection 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or forsuch shorter periods that the registrant was required to file such reports), and (2) has beensubject to such filing requirements for the past 90 days. Yes þ       No oIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer,or a non-accelerated filer. (See definition of “accelerated filer and large accelerated filer” inRule12b-2 of the Exchange Act). (check one):Large accelerated filer o            Accelerated filer o            Non-accelerated filer þIndicate the number of shares outstanding of each of the issuer’s classes of common stock, as ofthe latest practical date.Common Stock, $.001 par value 5,176,402 shares outstanding as of May 1, 2006  
 

 
           PAGEPART I. FINANCIAL INFORMATION           Item 1. Financial Statements             Condensedconsolidated balance sheets (Unaudited) —December 31, 2005 and March 31, 2006  3          Condensed combined and consolidated statements ofoperations (Unaudited) — Three months ended March 31,2005 and 2006  4          Consolidatedstatements of stockholders’ equity (deficit) andcomprehensive income (Unaudited) — Year ended December 31,2005 and three monthsended March 31, 2006  5          Combined and consolidated statements of cash flows(Unaudited) — Three months ended March 31, 2005 and2006  6          Notes to condensed combined and consolidated financialstatements (Unaudited)  7        Item 2. Management’s Discussion and Analysis of FinancialCondition and Results of Operations  16        Item 3. Quantitative and Qualitative Disclosure About Market Risk  26        Item 4. Controls and Procedures  26        PART II. OTHER INFORMATION           Item 1A. Risk Factors  26        Item 6. Exhibits  27          SIGNATURES  28          Exhibit 31.1 — Certifications of Chief Executive OfficerPursuant to Section 302 of the Sarbanes-Oxley Act of2002             Exhibit 31.2 — Certifications of Chief Financial OfficerPursuant to Section 302 of the Sarbanes-Oxley Act of2002             Exhibit 32.1 — Certifications of Chief Executive OfficerPursuant to Section 906 of the Sarbanes-Oxley Act of2002             Exhibit 32.2 — Certifications of Chief Financial OfficerPursuant to Section 906 of the Sarbanes-Oxley Act of2002     EX-31.1 EX-31.2 EX-32.1 EX-32.2
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**PART 1. FINANCIAL INFORMATION****Item 1. Financial Statements****TRIPLE CROWN MEDIA, INC.****CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)**(in thousands, except per share data)           **December 31,**  **March 31,**   **2005**  **2006** **Assets:**        Current assets:        Cash and cash equivalents $1,473  $542 Accounts receivable, less allowance for doubtful accounts of$508 and $444, respectively  23,130   23,046 Inventories  1,732   1,417 Other current assets  1,196   1,424        Total current assets  27,531   26,429        Property and equipment:        Land  2,108   2,108 Buildings and improvements  7,486   7,486 Equipment  21,417   21,713           31,011   31,307 Accumulated depreciation  (17,402)  (17,998)          13,609   13,309          Goodwill  85,727   85,727 Other intangible assets, net  18,493   17,873 Deferred income taxes  19,191   18,538 Other assets  6,478   6,423          Total assets $171,029  $168,299                 **Liabilities, Preferred Stock and Stockholders’ Deficit:**        Current liabilities:        Current portion of long-term debt $2,839  $900 Accounts payable  5,877   4,689 Accrued expenses  15,320   18,793 Accrued fees payable to Gray Television, Inc.  3,034   1,747 Accrued distribution payable to Gray Television, Inc.  647   260 Deferred revenue  7,006   5,090        Total current liabilities  34,723   31,479          Long-term debt  119,100   118,875 Other liabilities  3,275   3,286 Series B redeemable preferred stock, $.001 par value (authorized 20,000shares; issued and outstanding 6,050 shares; $6,050 liquidation value)  4,380   4,403        Total liabilities  161,478   158,043                 Series A redeemable, convertible preferred stock, $.001 par value (authorized 50,000shares; issued and outstanding 20,890 shares; $20,890 liquidation value)  16,761   16,823          Commitments and contingencies                 Stockholders’ Deficit:        Common stock, par value $0.001 (authorized 25,000 shares, issued andoutstanding 5,129 shares and 5,170 shares, respectively)  5   5 Additional paid-in capital  3,211   3,270 Accumulated deficit  (10,426)  (9,962)Accumulated other comprehensive income, net of tax      120        Total stockholders’ deficit  (7,210)  (6,567)                Total liabilities, preferred stock and stockholders’ deficit $171,029  $168,299            See notes to condensed combined and consolidated financial statements.
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**TRIPLE CROWN MEDIA, INC.****CONDENSED COMBINED AND CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)**(in thousands, except per share data)           **Three Months Ended**   **March 31,**   **2005**  **2006** Operating revenues:        Publishing $11,188  $11,149 Collegiate marketing and production services      18,967 Association management services      2,224 Wireless  1,986   1,725           13,174   34,065          Expenses:        Operating expenses before depreciation, amortizationand loss (gain) on disposal of assets, net:        Publishing  8,182   8,030 Collegiate marketing and production services      15,821 Association management services      1,673 Wireless  1,563   1,456 Corporate and administrative  361   1,305 Depreciation  365   596 Amortization of intangible assets      620 Loss (gain) on disposal of assets, net  188   (28)          10,659   29,473                 Operating income  2,515   4,592          Other income (expense):        Interest expense related to Series B preferred stock      (113)Interest expense, other      (2,902)Debt issue cost amortization      (263)                Income before income taxes  2,515   1,314          Income tax expense  958   579                 Net income  1,557   735          Series A preferred stock dividends accrued      (271)                Net income available to common stockholders $1,557  $464                 Basic and diluted per share information:        Net income available to common stockholders $0.32  $0.09          Weighted average shares outstanding  4,870   5,131   See notes to condensed combined and consolidated financial statements.
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**TRIPLE CROWN MEDIA, INC.****COMBINED ANDCONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) AND COMPREHENSIVE INCOME (Unaudited)**(in thousands, except per share data)                                                     **Accumulated**                           **Other**      **Common**   **Common**  **Additional**  **Owner’s**      **Comprehensive**  **Total**   **Stock**   **Stock**  **Paid-In**  **Net**  **Accumulated**  **Income,**  **Stockholders’**   **(Shares)**   **(Amount)**  **Capital**  **Investment**  **Deficit**  **Net of Tax**  **Equity(Deficit)** Balance as of January 1, 2005      $   $   $29,800  $   $0  $29,800                               Net income               4,482   (65)      4,417 Net transfers to Gray Television,Inc.               (4,895)          (4,895)Coomon shares issued in Spin-off  4,870    5                   5 Increase in deferred income taxesforGray’s tax gain on Spin-off               4,855           4,855 Distribution to Gray under terms ofSpin-off               (44,600)          (44,600)Reclassify owner’s net investmentto accumulated deficit               10,358   (10,358)      0 Common stock issued in Mergertransaction  259    0   3,211               3,211 Series A preferred dividendsaccrued                   (3)      (3)                                                     Balance as of December 31, 2005  5,129    5   3,211   0   (10,426)  0   (7,210)                              Issuance of restricted stock  35    0   7               7 Issuance of common stock to 401kplan  6    0   52               52 Net income                   735       735 Series A preferred dividendsaccrued                   (271)      (271)Net change in accumulated othercomprehensive income, net of tax                       120   120                                                      Balance as of March 31, 2006  5,170   $5  $3,270  $0  $(9,962) $120  $(6,567)                           See notes to condensed combined and consolidated financial statements.
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**TRIPLE CROWN MEDIA, INC.****COMBINED AND CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)**(Amounts in thousands)           **Three Months Ended**   **March 31,**   **2005**  **2006** **Operating activities:**                 Net income $1,557  $735 Adjustments to reconcile net income (loss) to netcash provided by operating activities:        Depreciation  365   596 Amortization      883 Interest accrued on redeemable preferred stock      113 Loss on disposal of assets, net  188     Stock compensation expense      7 Issuance of common stock to 401k plan      53 Deferred income taxes  193   578 Changes in operating assets and liabilities:        Accounts receivable  975   85 Inventories  (5)  315 Other current assets  (42)  (229)Accounts payable and accrued expenses  (420)  699 Accrued income taxes  765     Deferred revenue  7   (1,917)Other assets and liabilities  30   87                 Net cash provided by operating activities  3,613   2,005          **Investing activities:**                 Purchases of property and equipment  (345)  (297)                Net cash used in investing activities  (345)  (297)         **Financing activities:**                 Proceeds from borrowings on revolving line of credit      3,500 Distributions paid to Gray Television, Inc.      (388)Other transfers to Gray Television, Inc., net  (3,568)    Repayments of borrowings on revolving line of credit      (5,439)Repayments of borrowings on term loan      (225)Debt issue costs      (87)                Net cash used in financing activities  (3,568)  (2,639)                Decrease in cash and cash equivalents  (300)  (931)         Cash and cash equivalents, beginning of period  672   1,473                 Cash and cash equivalents, end of period $372  $542                 **Supplemental cash flow information:**        Interest paid $0  $1,833     See notes to condensed combined and consolidated financial statements.
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**TRIPLE CROWN MEDIA, INC.****NOTES TO CONDENSED COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)****NOTE 1— BASIS OF PRESENTATION**     The accompanying unaudited condensed combined and consolidated financial statements of TripleCrown Media, Inc., or the Company, have been prepared in accordance with generally acceptedaccounting principles for interim financial information and with the instructions to Form 10-Q andArticle 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotesrequired by generally accepted accounting principles for complete financial statements. In theopinion of management, all adjustments (consisting of normal recurring accruals) considerednecessary for a fair statement have been included. Operating results for the three-month periodended March 31, 2006 are not necessarily indicative of the results that may be expected for theyear ending December 31, 2006. For further information, refer to the consolidated financialstatements and footnotes thereto included in our Annual Report on Form 10-K for the year endedDecember 31, 2005.     ***Organizationand Business Description —***Until December 30, 2005, the Company was comprised ofthe newspaper publishing and GrayLink wireless businesses owned and operated by Gray Television,Inc., or Gray, operating as wholly-owned subsidiaries or divisions of Gray.     On December 30, 2005, Gray distributed to each common stockholder of Gray’s common stock oneshare of our common stock for every ten shares of Gray common stock held by the Gray commonstockholder. As a result, the Company became a separate, stand-alone entity, independent of Gray.We refer to this transaction as the Spin-off.     Immediately following the Spin-off, and also on December 30, 2005, Bull Run Corporation wasmerged into a wholly-owned subsidiary of the Company, in a transaction referred to as the Merger.Under the terms of the Merger, each Bull Run common stockholder received .0289 shares of our commonstock in exchange for each share of Bull Run common stock owned by the Bull Run common stockholder;holders of Bull Run’s series D preferred stock and a certain holder of Bull Run’s series Epreferred stock received shares of our series A redeemable, convertible preferred stock for theirshares of Bull Run preferred stock and accrued dividends thereon; certain other holders of BullRun’s series E preferred stock had their shares redeemed in cash at the liquidation value of thoseshares; the holder of Bull Run series F preferred stock received shares of our common stock for hisshares of Bull Run preferred stock and accrued dividends thereon; and a significant stockholder ofBull Run who had advanced cash to Bull Run prior to the Merger received shares of our series Bredeemable preferred stock in exchange for settlement of Bull Run’s liabilities payable to him. SeeNote 2 for further discussion of the Merger.     Following the consummation of the Merger on December 30, 2005, the Company is now comprised ofthe Newspaper Publishing and GrayLink Wireless segments formerly owned and operated by Gray, plusthe Collegiate Marketing and Production Services segment and Association Management Servicessegment acquired in the Merger, both of which are operated by a wholly-owned subsidiary, HostCommunications, Inc., or Host.     Hereinafter, all references to Triple Crown Media, Inc., the “Company,” “TCM,” “we,” “us,” or“our” in these footnotes refer to the combined and consolidated businesses.     ***Changein Fiscal Year —***In April 2006, we elected to change our fiscal year end from December31 to a new fiscal year end of June 30. As a result of the change, our quarterly reporting periodswill be comprised of the three calendar months ending September 30, December 31, March 31 and June30. Following the filing of this Quarterly Report on Form 10-Q, our next periodic report filed willbe filed on Form 10-K for the transition period from January 1, 2006 to June 30, 2006.     ***Stock-BasedCompensation —***We accounted for stock-based compensation prior to the Spin-offusing APB Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”) and relatedinterpretations. Under APB 25, compensation expense is based on the difference, if any, on the dateof grant, between the fair value of TCM’s stock and the exercise price. In accordance with APB 25,Gray elected not to record
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compensation expense associated with qualified stock options for Gray common stock granted toour employees prior to the Spin-off. There were no grants of options for our common stock duringthe periods presented in these financial statements. Effective January 1, 2006, we account forstock-based compensation using SFAS Statement No. 123(R), Accounting for Stock-Based Compensation(“SFAS 123(R)”), as amended, which results in the recognition of compensation expense forstock-based compensation. We adopted SFAS 123(R) using the modified prospective method, whichrequires measurement of compensation cost for all stock based awards at fair value on the date ofgrant and recognition of compensation over the service period for awards expected to vest. The fairvalue of stock options is determined using the Black-Scholes valuation model. The recognizedexpense is net of expected forfeitures and restatement of prior periods is not required. The fairvalue of restricted stock is determined based on the number of shares granted and the quoted marketprice of our common stock.     Had compensation expense related to outstanding options for Gray common stock prior to theSpin-off been determined based on the fair value at the grant dates consistent with SFAS 123, netincome available to common stockholders and earnings per share would be as reflected below (amountsin thousands, except per share data):       **Three Months Ended**   **March 31,**   **2005** Net income available to commonstockholders, as reported $1,557 Add: Stock-based employeecompensation expense included inreported net income, net of relatedtax effects  0 Deduct: Total stock-based employeecompensation expense determinedunder fair value based method for allawards, net of related tax effects  (8)    Net income available to commonstockholders, pro forma $1,549     Net income available to commonstockholders per share:    Basic and diluted, as reported $0.32 Basic and diluted, pro forma $0.32      The fair value for the options was estimated at the date of grant using a Black-Scholesoption pricing model with the following weighted-average assumptions for the three months endedMarch 31, 2005: risk-free interest rate of 3.81%; dividend yield of 0.86%; volatility factor of theexpected market price of Gray’s common stock of 0.30; and a weighted-average expected life of theoptions of 3.0 years. All options to purchase Gray common stock granted to our employees throughthe date of the Spin-off became 100% vested at the time of the Spin-off and continue to be optionsto purchase Gray common stock. As a result, we will not recognize expense in periods subsequent tothe Spin-off for any of these options to purchase Gray common stock.     In April 2006, our Company’s Nominating, Corporate Governance, Compensation and Stock OptionCommittee granted stock options to certain of our employees under our 2005 Long Term Incentive Planfor an aggregate of 370,000 shares. The options, which have an exercise price of $5.43 and expirein April 2016, vest over three years. In accordance with SFAS 123(R), we expect to record aggregatenon-cashcompensation expense over the three-year vesting period of approximately $0.7 million. Thefair value for these options was estimated at the date of grant using a Black-Scholes optionpricing model with the following weighted-average assumptions: risk-free interest rate of 4.97%;dividend yield of 0.0%; volatility factor of the expected market price of TCM’s common stock of        .336; and a weighted average expected life of the options of 5.75 years.     ***Valuationand Impairment Testing of Intangible Assets —***In accordance with Statement ofFinancial Accounting Standards No. 142, “Goodwill and Other Intangible Assets” (“SFAS 142”), we donot amortize
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goodwill and certain intangible assets with indefinite useful lives. Instead, SFAS 142requires that we review goodwill and intangible assets deemed to have indefinite useful lives forimpairment on at least an annual basis. We perform our annual impairment review during the fourthquarter of each fiscal year or whenever events or changes in circumstances indicate that suchassets might be impaired.     Intangible assets are comprised of FCC licenses and goodwill, each of which is required to beconsidered an indefinite-lived asset. Accordingly, we do not amortize these assets. Otherseparately identified definite-lived intangible assets include customer relationships, trademarksand tradenames. These assets are being amortized over their estimated useful lives. Customerrelationships are amortized using an accelerated method over a period of 15 years, based on theestimated future economic benefit. Trademarks and tradenames are being amortized over 6 and 15years, respectively, using a straight-line method, which approximates the estimated future economicbenefit. For the three months ended March 31, 2006, we recorded amortization expense of $0.6million in connection with our definite-lived intangible assets.     ***Accountingfor Derivatives —***We use interest rate swap agreements to hedge exposure tointerest rate fluctuations on our variable rate debt, designating these swaps as cash flow hedgesof anticipated interest payments. These hedging activities may be transacted with one or morehighly-rated institutions, reducing the exposure to credit risk in the event of nonperformance bythe counter-party to the swap agreement.     The fair value of the swap agreement will be recognized on the balance sheet as an asset orliability, with the offset recorded in accumulated other comprehensive income net of income taxes.Any changes in the market value of the swaps are adjusted to the asset or liability account andrecorded net of the related income taxes in other comprehensive income, except to the extent thatthe swap is considered ineffective. To the extent that the swap is considered ineffective, changesin market value of the swap are recognized as a component of interest expense in the period of thechange.     In February 2006, we entered into an interest rate swap agreement effective in June 2006 andterminating in March 2009. Under the agreement, we will be converting a notional amount of $60million of floating rate debt (currently bearing interest at LIBOR plus the currently applicablemargin of 3.25%) to fixed rate debt, bearing interest at 5.05% plus the applicable margin.     ***EarningsPer Share —***Basic earnings per share excludes any dilutive effects of stock options,convertible preferred stock and accrued preferred stock dividends potentially paid in common stock.In periods where they are anti-dilutive, such amounts are excluded from the calculation of dilutiveearnings per share.     The number of shares used to calculate basic earnings per share in the Condensed Combined andConsolidated Statement of Operations for the three months ended March 31, 2005 was based on the4,870,000 shares of our common stock issued in connection with the Spin-off, whereas such amountfor the three months ended March 31, 2006 was based on the weighted average number of sharesoutstanding for such period of 5,131,000 shares.**NOTE 2— ACQUISITION OF BULL RUN CORPORATION**     On December 30, 2005, we acquired Bull Run Corporation pursuant to the terms of an Agreementand Plan of Merger dated as of August 2, 2005. Aggregate consideration paid in connection with ouracquisition of Bull Run Corporation, net of cash acquired, was approximately $29,622,000 whichincluded commonstock (totaling 258,000 shares) valued at $3,173,000 and series A and series B preferred stocktotaling 20,890 and 6,050 shares, respectively, valued at $16,760,000 and $4,380,000, respectively.
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     A reconciliation of the aggregate consideration paid to the net fair value of assets andliabilities acquired follows (amounts in thousands):     Bull Run debt repaid at closing $72,124 Common and preferred stock issued  24,313 Redemption of Bull Run preferred stock  2,825 Assumption of Bull Run operating liabilities  2,484 Cash acquired at closing  (1,022)      $100,724          Beginning December 31, 2005, the day immediately following the effective date of theMerger, the financial results of Bull Run were consolidated with those of our businesses. TheMerger was accounted for under the purchase method of accounting, whereby a preliminary valuationof the assets and liabilities of the merged businesses was included as of the closing of businesson December 30, 2005, based on an allocation of the purchase price. Such preliminary estimates willbe adjusted once final valuations are derived, with any adjustment also affecting the carryingvalue of goodwill. The excess of the purchase price over assets acquired of approximately $68.9million was recorded as goodwill.     The estimated fair values of assets and liabilities acquired under the Merger are summarizedas follows (amounts in thousands):     Receivables $16,877 Other current assets  1,791 Property and equipment  4,044 Goodwill  68,948 Customer relationships, trademarks and tradenames  17,700 Other noncurrent assets  2,534 Deferred income taxes  15,744 Accounts payable and accrued expenses  (19,594)Deferred revenue  (5,196)Other noncurrent liabilities  (2,124)      $100,724          Pro forma operating results for the three months ended March 31, 2005, assuming theMerger had been consummated as of January 1, 2005, would have been as follows (amounts inthousands, except share and per share data):     Operating revenues $32,562 Operating income $4,106 Income from continuing operations $609 Net income $808 Net income available to common stockholders $537 Per share, basic and diluted:    Net loss available to common stockholders $0.10 Pro forma weighted average shares outstanding  5,129,000      The number of pro forma weighted average shares outstanding was determined based on thenumber of shares of our common stock issued in connection with the Spin-off and the Merger. Thesepro forma results are not necessarily indicative of actual results that might have occurred had theoperations and management of the merged companies been combined in the prior year.
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**NOTE 3 — CORPORATE AND ADMINISTRATIVE EXPENSE**     For the three months ended March 31, 2005, our costs and expenses include allocations fromGray for centralized legal, accounting, treasury, real estate, information technology, engineering,and other Gray corporate services and infrastructure costs. These allocations have been determinedon the basis that we and Gray considered to be reasonable reflections of the utilization ofservices provided to, or the benefits received by, us as wholly-owned subsidiaries or divisions ofGray during these periods. The basis for allocation included specifically identifying thoseelements that were not applicable to our operations and the remaining costs were allocated on thebasis of revenue. For the three months ended March 31, 2005, allocated costs totaled $361,000.Prior to the Spin-off, Gray provided all capitalization for us.**NOTE 4 — TRANSACTIONS WITH AFFILIATED COMPANIES**     ***Insurance Contract with Georgia Casualty & Surety Co. —***Effective December 30, 2005 followingthe Spin-off, we obtained certain workers’ compensation insurance coverage under an insurancecontract with Georgia Casualty & Surety Co., which is a wholly-owned subsidiary of AtlanticAmerican Corporation, a publicly traded company in which J. Mack Robinson (a significantshareholder of our Company) and certain of his affiliates have a substantial ownership interest,and a company of which Hilton H. Howell, a member of our board of directors and Mr. Robinson’sson-in-law, is an executive officer. Prior to the Spin-off, Gray had a similar insurance contractwith the same company. For the three months ended March 31, 2005 our workers’ compensationinsurance expense attributable to Gray’s insurance contract with Georgia Casualty was approximately$39,000, and for the three months ended March 31, 2006, our workers’ compensation insurance expenseattributable to our insurance contract with Georgia Casualty was approximately $62,000.     ***Rights-Sharing Agreement with*****Gray —**Through a rights-sharing agreement by and between Hostand Gray, effective prior to the Merger, we participate jointly with Gray in the marketing, sellingand broadcasting of certain collegiate sporting events and in related programming, production andother associated activities of one university. In Host’s role under the agreement with Gray, Hostmanages the preponderance of the revenue-generating and sales fulfillment activities and providesall administrative functions for Host and Gray. As a result, Host recognized the total revenuesderived and expenses incurred in connection with services performed on behalf of the university,and Host expensed the amounts paid to Gray under the rights-sharing agreement as a rights fee. InApril 2005, Host, Gray and the university entered into a new agreement for expanded sportsmarketing rights for an initial seven year term with an option to extend the license for threeadditional years. At the same time, Host and Gray entered into a new rights sharing agreement forthe same 10-year period. Under the April 2005 agreement with Gray, subsequent to the Merger, wecontinue to recognize the total revenues derived and total expenses incurred in connection withservices performed on behalf of the university, and expense amounts payable to Gray as a componentof our rights fee expense. The amount payable to Gray will be 50% of the profit to be derived fromthese marketing activities, as determined at the conclusion of each contract year. Gray will alsobear 50% of any losses. The new agreement with Gray also requires Gray to pay to the university 50%of the rights fees payable under the contract with the university as each rights fee installmentpayment becomes due. Such amounts paid by Gray during the contract year will be added to the annualsettlement amount between us and Gray. As of March 31, 2006, accrued fees payable to Gray underthe current rights-sharing agreement were $1,747,000. Our relationship with Gray is describedfurther in other notes to these condensed combined and consolidated financial statements.
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**NOTE 5 — LONG-TERM DEBT**     Long-term debt outstanding as of December 31, 2005 and March 31, 2006 consists of thefollowing (amounts in thousands):           **December 31,**  **March 31,**   **2005**  **2006** First lien senior term loan $90,000  $89,775 Second lien senior term loan  30,000   30,000 First lien revolving credit facility  1,939   0          $121,939  $119,775             On December 30, 2005, we entered into (i) a First Lien Secured Credit Agreement and (ii)a Second Lien Senior Secured Credit Agreement with Wachovia Bank, National Association, amongothers. The First Lien Secured Credit Agreement provides for a senior secured revolving creditfacility in the aggregate principal amount of $20 million, which matures on December 30, 2009(which we refer to as the “First Lien Revolving Credit Facility”) and a senior secured term loanfacility in an aggregate principal amount of $90 million, which matures on June 30, 2010 (which werefer to as the “First Lien Term Loan Facility”). The Second Lien Credit Agreement provides for asenior secured term loan facility in the aggregate principal amount of up to $30 million, whichmatures on December 30, 2010 (which we refer to as the “Second Lien Credit Facility” and, togetherwith the First Lien Credit Facility, collectively as the “Credit Facilities”). Proceeds of theCredit Facilities were used to fund a $40 million cash distribution to Gray in connection with theSpin-off, refinance all of Bull Run’s long-term debt in connection with the Merger, pay the cashportion of the Merger consideration, and pay transaction costs.     Amounts under the First Lien Revolving Credit Facility may be borrowed, repaid and reborrowedby the Company from time to time until maturity. Interest for borrowings under the First LienCredit Facility is currently based, at our option, on either (a) 2.25% per annum plus the higher of(1) the prime rate of interest announced or established by Wachovia from time to time, and (2) theFederal funds rate plus 0.50% per annum (the “Base Rate”) or (b) 3.25% per annum plus theapplicable London Interbank Offered Rate (“LIBOR”) rate for Eurocurrency borrowings. If and when wemeet certain leverage ratio criteria as set forth in the First Lien Secured Credit Agreement, ourinterest rate may decline at .25% increments to (a) 1.50% per annum above the Base Rate or (b)2.50% per annum above the applicable LIBOR rate for Eurocurrency borrowings. We currentlyanticipate that we will not qualify for a reduction in our Base Rate of LIBOR applicable margins of2.25% and 3.25%, respectively, for at least the next year. Interest under the Second Lien CreditFacility is based upon (a) 8.00% per annum above the Base Rate or (b) 9.00% per annum above theapplicable LIBOR rate for Eurocurrency borrowings.     Our term loan facilities under the First Lien Term Loan Facility and the Second Lien CreditFacility were fully drawn on the closing date, and $1,939,000 of the First Lien Revolving CreditFacility was drawn as of December 31, 2005, and none was drawn on the First Lien Revolving CreditFacility as of March 31, 2006. The credit facility is collateralized by substantially all of ourassets.     Our Credit Facilities contain affirmative and negative covenants and financial ratioscustomary for financings of this type, including, among other things, limits on the incurrence ofdebt or liens, a limit on the making of dividends or distributions, provision for mandatoryprepayments under certain conditions, limitations on transactions with affiliates and investments,a limit on the ratio of debt to earnings before interest, income taxes, depreciation, andamortization, as adjusted for certain non-cash and nonrecurring items (which we refer to as“EBITDA”), a limit on the ratio of EBITDA to fixed charges, and a limit to the ratio of EBITDA toall cash interest expense on all debt. The Credit Facilities contain events of default customaryfor facilities of this type (with customary grace periods, as applicable) and provide that,upon the occurrence of an event of default, the interest rate on all outstanding obligations willbe increased and payment of all outstanding loans may be accelerated and/or the lenders’commitments may be terminated. In addition, upon the occurrence of certain insolvency orbankruptcy related events of default, all amounts payable under the Credit Agreements shallautomatically become immediately due and payable, and the lenders’ commitments will automaticallyterminate.
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**NOTE 6— INCOME TAXES**     The differences between the federal statutory tax rate of 34% and the effective tax rate of38.1% and 44.1% for the three months ended March 31, 2005 and 2006, respectively, are principallydue to state income taxes, and for 2006, interest expense related to our Series B preferred stockand other permanent differences, such as travel and entertainment expenses, which are not fullydeductible for tax purposes. Permanent differences are expected to represent a high percentage ofour income before income taxes for the current fiscal year. As a result, our effective tax rate forthe fiscal year may vary significantly from the effective tax rate for the three months ended March31, 2006.**NOTE 7 — PREFERRED STOCK**     As of March 31, 2006, 20,890 shares of our series A redeemable, convertible preferred stock(which we refer to as Series A Preferred Stock) were outstanding, having an aggregate face value of$20,890,000 and a carrying value of $16,823,000 at March 31, 2006, all of which are convertibleinto shares of our common stock (a) at the holder’s option, at any time after December 30, 2006, or(b) at our option, upon a change of control or liquidation event at a conversion price equal to a40% premium above the greater of (i) the 30-day average trading price of our common stock for theperiod beginning on June 30, 2006, or (ii) $16.54 per share. Each holder of the Series A PreferredStock is entitled to receive dividends at an annual rate of $40 per share in cash or in additionalshares of Series A Preferred Stock, at our option. We currently do not anticipate that cashdividends will be paid for the foreseeable future. The liquidation and redemption price of theSeries A Preferred Stock is $1,000 per share and dividends are cumulative. We have the option toredeem the Series A Preferred Stock at any time after December 30, 2010 at the liquidation value,which includes accrued dividends, but in any case we are required to redeem all outstanding SeriesA Preferred Stock on or prior to August 2, 2020. As of March 31, 2006, all outstanding shares ofSeries A Preferred Stock were held by Mr. J Mack Robinson, who also beneficially owns approximately10% of our common stock.     As of March 31, 2006, 6,050 shares of our series B convertible preferred stock (which we referto as Series B Preferred Stock) were outstanding, having an aggregate face value of $6,050,000 anda carrying value of $4,403,000 at March 31, 2006, all of which are convertible into shares of ourcommon stock at our option, upon a change of control or liquidation event at a conversion priceequal to a 40% premium above the greater of: (i) the 30-day average trading price of our commonstock for the period beginning June 30, 2006, or (ii) $16.54 per share. Each holder of the Series BPreferred Stock is entitled to receive dividends at an annual rate of $60 per share in cash or inadditional shares of Series B Preferred Stock, at our option. We currently do not anticipate thatcash dividends will be paid for the foreseeable future. The liquidation and redemption price of theSeries B Preferred Stock is $1,000 per share and dividends are cumulative. We have the option toredeem the Series B Preferred Stock at any time after December 31, 2010 at the liquidation value,which includes accrued dividends, but in any case we are required to redeem all outstanding SeriesB Preferred Stock on or prior to August 2, 2021. As of March 31, 2006, all shares of Series BPreferred Stock were held by Mr. Robinson.     All shares of preferred stock rank, as to payment of dividends and as to distribution ofassets upon liquidation or dissolution of our Company, on a parity with all other currently issuedpreferred stock and any preferred stock issued by us in the future, and senior to our currentlyissued common stock and common stock issued in the future. The difference between the carryingvalue and face value of each series of preferred stock will be accreted using the interest methodthrough the applicable mandatory redemption date of the series of preferred stock. Accordingly, forthe three months ended March 31, 2006, accretion in the amount of approximately $62,000 and $23,000was recognized as a component of series A preferred stock dividends accrued and interest expenserelated to series B preferred stock, respectively.
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**NOTE 8 — OTHER COMPREHENSIVE INCOME**     A reconciliation of net income to comprehensive income follows (amounts in thousands):           **Three Months Ended**   **March 31,**   **2005**  **2006**   Net income $1,557  $735 Other comprehensive income, changein the valuation of an interest rateswap agreement, net of tax of $75      120          Comprehensive income $1,557  $855             We entered into an interest rate swap agreement in February 2006, effective June 6, 2006,to manage our debt profile. Changes in the value of this interest rate swap agreement, asdetermined by the interest rates as of the beginning and end of each reporting period, results incomprehensive income or loss during the life of the swap agreement.**NOTE 9 — EMPLOYEE BENEFIT PLANS**     ***Stock Options and Other Equity Compensation Plans —***Our 2005 Long Term Incentive Plan,referred to as the 2005 Incentive Plan, reserves 1,000,000 shares of our common stock for issuanceof stock options, restricted stock awards, stock appreciation rights and performance awards,pursuant to which certain options were granted as discussed in Note 1. The terms and condition ofsuch awards are determined at the sole discretion of our board of directors or a committeedesignated by the Board to administer the plan. In February 2006, each of the seven members of ourboard of directors received an award of 5,000 shares of our common stock, subject to a vestingschedule whereby 1,000 shares vest annually as of each December 31 from December 31, 2006 through2010. In connection with such awards, we will record $263,000 of non-cash compensation expense overthe five-year vesting period, of which $7,000 was recognized in the three months ended March 31,2006.     As a result of the Merger and the resulting exchange of options to purchase Bull Run commonstock for options to purchase shares of our common stock, certain of our employees hold options toacquire shares of our common stock at exercise prices ranging from $40.14 to $1,513.85 per share.All of these options were fully vested as of the date of the Merger. As of December 31, 2005,options for 7,096 shares were outstanding, having a weighted average exercise price of $501.92 pershare. During the three months ended March 31, 2006, options for 128 shares having a weightedaverage exercise price of $382.49 per share were forfeited, no options were granted and no optionswere exercised. As of March 31, 2006, options for 6,968 shares were outstanding, having a weightedaverage exercise price of $504.11 and a weighted average remaining life of 3.1 years.     ***Employee Benefit Plans —***Effective January 1, 2006, we began providing retirement benefits tosubstantially all of our employees with one or more years of service, in the form of a planreferred to as the TCM 401k Plan, intended to meet the requirements of section 401(k) of theInternal Revenue Code of 1986. Under the TCM 401k Plan, our employees may contribute up to themaximum allowable under federal law, and the Company will match up to 50% of the first 6%contributed by the employee, in the form of contributions of our common stock.     Prior to the Spin-off, Gray offered a similar 401k retirement plan that included both matchingand voluntary employer contributions, made in the form of Gray common stock, for employees thatparticipated in the plan. Bull Run also provided a 401k retirement plan to its employees prior tothe Merger. In January 2006, the assets of the Gray plan with respect to employees of TCM,including outstanding employee loans, were transferred into the TCM 401k Plan, and the Bull Run401k plan was merged into the TCM 401k Plan.     Total contributions under the Gray 401k plan prior to the Spin-off, recorded by us as anon-cash expense, totaled $78,000 for the three months ended March 31, 2005. Total contributionsunder the TCM
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401k Plan following the Spin-off, recorded by us as a noncash expense, totaled $86,000 for thethree months ended March 31, 2006.     Certain of our eligible employees participated in a defined benefit pension plan sponsored byGray. The pension plan covered substantially all of our full-time employees prior to the Spin-offwith one or more years of service. We recorded pension expense as allocated to us by Gray of$143,000 for the three months ended March 31, 2005. In connection with the Spin-off, theparticipants in the pension plan were terminated from the Gray pension plan and their respectiveearned benefit through the date of the Spin-off became fully vested and has remained a liability ofGray, not TCM, under the terms of Gray’s pension plan. Consequently, we incur no pension expensesubsequent to the Spin-off.**NOTE10 — INFORMATION ON BUSINESS SEGMENTS**     We operate in four reportable segments: newspaper publishing, collegiate marketing andproduction services, association management services and wireless. The following tables presentcertain financial information concerning our reportable segments (amounts in thousands):           **Three Months Ended**   **March 31,**   **2005**  **2006**          Operating revenues:        Publishing $11,188  $11,149 Collegiate marketing and production services      18,967 Association management      2,224 Wireless  1,986   1,725        Total operating revenue $13,174  $34,065                 Operating income:        Publishing $2,458  $2,287 Collegiate marketing and production services      2,074 Association management      150 Wireless  57   81        Total operating income  2,515   4,592          Interest expense      (3,015)Debt issue cost amortization      (263)                Income before income taxes $2,515  $1,314             During the three months ended March 31, 2005 and 2006, the newspaper publishing segmentoperated five daily newspapers in five different markets located in Georgia and Indiana. As morefully discussed in Note 12, effective April 1, 2006, we exchanged The Goshen News located inGoshen, Indiana for three newspapers in Georgia. The collegiate marketing and production servicesand association management services segments, headquartered in Lexington, Kentucky, serve customersin multiple locations throughout the country. The wireless operations are located in Florida,Georgia, and Alabama. Our newspaper publishing operations derive their revenue from three sources:retail advertising, circulation and classified advertising. Collegiate marketing and productionservices operations revenue is derived from primarily radio and print advertising, sales ofcorporate sponsorships and product sales related to marketing and promotion of collegiate sportsteams and events. Association management services segment revenue is derived primarily from feesrelated to services such as membership management and recruitment activities, financial reporting,accounting, marketing, publishing, education, event management, Internet web site management, andhospitality and convention planning and production activities. Wireless revenue is derivedprimarily from the sale of pagers and paging services, cellular telephone equipment, accessoriesand services. Inter-segment revenues are not material and have been eliminated in the amountspresented in the table. Corporate and administrative expenses are allocated to the segment based onnet segment revenues.
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**NOTE 11 — COMMITMENTS AND CONTINGENCIES**     ***Legal Matters***— We are subject to legal proceedings and claims that arise in the normal courseof business. In our opinion, the amount of ultimate liability, if any, with respect to theseactions will not materially affect our financial position or results of operations.     ***Indemnification***— Pursuant to various agreements facilitating the Spin-off, we agreed toindemnify Gray in certain circumstances for potential tax liabilities imposed upon Gray due to anyaction or inaction by us that causes the Spin-off to not qualify as a tax free transaction to Grayand/or to Gray’s shareholders. In our opinion, the amount of ultimate liability, if any, withrespect to this indemnification will not materially affect our financial position or results ofoperations.**NOTE 12 — SUBSEQUENT EVENTS**     On April 7, 2006, we entered into an asset exchange agreement with another party, dated as ofApril 1, 2006, to exchange The Goshen News for the Clayton News Daily, Clayton News Weekly, HenryDaily Herald and Jackson Progress-Argus, referred to as the South Atlanta Properties. Subject tothe terms and conditions of the agreement, effective as of April 1, 2006, the other party assumedthe operating assets and assumed and became liable and otherwise responsible for the operatingliabilities and obligations of The Goshen News, and we assumed the operating assets and assumed andbecame liable for the liabilities of the South Atlanta Properties.     At closing, we paid the other party $551,000, which represented the difference between the networking capital balances of The Goshen News as compared to the net working capital balances of theSouth Georgia Properties based on the respective balance sheets as of February 28, 2006, and byJune 30, 2006 we expect to receive from the other party (or pay to the other party) an amount tosettle the difference in net working capital as of March 31, 2006 compared to the amount paid by usin connection with the comparison of the February 28, 2006 net working capital balances.**Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations**  ***Overview***     All references to Triple Crown Media, Inc., the “Company,” “TCM,” “we,” “us,” or “our” referto the combined and consolidated businesses. For information related to the Spin-Off and Merger,refer to Note 1 to the condensed combined and consolidated financial statements contained in Item 1of this Form 10-Q.     We derive revenue from our Newspaper Publishing, Collegiate Marketing and Production Services,Association Management Services, and the GrayLink Wireless operations. Sources of our revenues arediscussed in Note 10 to the Condensed Combined and Consolidated Financial Statements.     Our Newspaper Publishing operations’ advertising contracts are generally entered into annuallyand provide for a commitment as to the volume of advertising to be purchased by an advertiserduring the year. Our newspaper publishing operations’ advertising revenues are primarily generatedfrom local advertising and are generally highest in the second and fourth quarters of each year.     Industry wide, newspaper subscriber circulation levels have been slowly declining. From March31, 2005 to March 31, 2006, our aggregate daily circulation has declined approximately 1%.     Our Newspaper Publishing operations’ primary operating expenses are employee compensation,related benefits and newsprint costs. Our Newspaper Publishing operations have experiencedsignificant variability in its newsprint costs in recent years. Historically, for the newspaperpublishing industry, the price of newsprint has been cyclical and volatile, reaching approximately$587 per metric ton in 1998 and dropping to approximately $455 per metric ton in 2002. The industryaverage price for the three months ended March 31, 2006 and 2005 was $655 and $580 per metric ton,respectively. During 2005 the price increased steadily and at December 31, 2005 the price was $645per metric ton. Prices fluctuate based on factors that include both foreign and domestic productioncapacity and consumption. Price fluctuations can have a
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significant effect on our results of operations. We seek to manage the effects of increases inprices of newsprint through a combination of technology improvements, page width and page countreductions, inventory management and advertising and circulation price increases. In addition,newspaper production costs are variable based on circulation and advertising volumes.     On April 7, 2006, we entered into an asset exchange agreement with another party, dated as ofApril 1, 2006, to exchange The Goshen News for the Clayton News Daily, Clayton News Weekly, HenryDaily Herald and Jackson Progress-Argus, referred to as the South Atlanta Properties. Subject tothe terms and conditions of the agreement, effective as of April 1, 2006, the other party assumedthe operating assets and assumed and became liable and otherwise responsible for the operatingliabilities and obligations of The Goshen News, and we assumed the operating assets and assumed andbecame liable for the liabilities of the South Atlanta Properties.     Since our Collegiate Marketing and Production Services business and our Association ManagementServices business were acquired on December 30, 2005, their operating results did not contribute toour results of operations for the three months ended March 31, 2005. Our Collegiate Marketing andProduction Services business provides sports marketing and production services to a number ofcollegiate conferences and universities, and through a contract with CBS Sports, on behalf of theNational Collegiate Athletic Association, or NCAA. Our Association Management Services businessprovides various associations with services such as member communication, recruitment andretention, conference planning, Internet web site management, marketing and administration. Foradditional information regarding our Collegiate Marketing and Production Services business and ourAssociation Management Services business, refer to “Critical Accounting Policies — RevenueRecognition and Rights Fee Expenses” of this Item 2 of Form 10-Q.     Our GrayLink Wireless subscribers either own pagers, thereby paying solely for the use of ourwireless services, or lease pagers, thereby paying a periodic charge for both the pagers and thewireless services. The terms of the lease contracts are month-to-month, three months, six months ortwelve months in duration. GrayLink Wireless revenues are generally equally distributed throughoutthe year. Our GrayLink Wireless operations also include reselling cellular telephone services. Wereceive a commission from the cellular telephone provider each time we sell a cellular telephonecontract to a customer. Our GrayLink Wireless operations’ primary operating expenses are employeecompensation, tower rent and other communications costs. In addition, the operations incur overheadexpenses, such as maintenance, supplies, insurance and utilities. Due to competition from cellularand PCS carriers, consumer demand for our traditional paging services has declined over the pastseveral years and we currently anticipate a more modest but continuing decline in the future.Declines in our wireless revenue have been offset, in part, by increasing commission revenuegenerated from the resale of cellular telephone services. Nevertheless, we expect that our totalrevenues from this segment will likely decline each year. Consequently, we expect that the relativecontribution of GrayLink Wireless to our aggregate results of operations will decline over time.
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***Revenues***     Set forth below are the principal types of revenues derived by our operations for the threemonths ended March 31, 2005 and 2006 and the percentage contribution of each to our total revenues(dollars in thousands):                   **Three Months Ended March 31,**   **2005**  **2006**   **Amount**  **%**  **Amount**  **%** **Publishing:**                Retail $6,152   46.7% $6,021   17.7%Classifieds  3,501   26.6%  3,604   10.6%Circulation  1,414   10.7%  1,393   4.1%Other  121   0.9%  131   0.4%                                $11,188   84.9% $11,149   32.7%             **Collegiate Marketing &Production Services:**                Advertising and sponsorship         $15,285   44.9%Product sales and production services          2,192   6.4%Station rights fees and other          1,489   4.4%                                          $18,967   55.7%               **Association ManagementServices:**                Management services         $1,614   4.7%Advertising and other          610   1.8%                                          $2,224   6.5%               **Wireless:**                Lease, sales and service $1,986   15.1% $1,725   5.1%                              **Total Revenues** $13,174   100.0% $34,065   100.0%             **Results of Operations**  ***Three Months Ended March 31, 2006 compared to Three Months Ended March 31, 2005***     The following analysis of our financial condition and results of operations should be read inconjunction with our financial statements for the three months ended March 31, 2005 and 2006, whichare contained herein. The results of operations for the three months ended March 31, 2005 did notinclude the Collegiate Marketing and Production Services or Association Management segmentsacquired in the Merger with Bull Run on December 30, 2005.     *Revenues.*Total revenues for the three months ended March 31, 2006 increased fromapproximately $13.2 million for the three months ended March 31, 2005 to approximately $34.1million. **•** Newspaper Publishing revenues of approximately $11.1 million for the three months endedMarch 31, 2006 were, in the aggregate, approximately the same as revenues for thethree months ended March 31, 2005. Total retail advertising revenue declined 2%, whereasclassified advertising revenue increased 3%. The decrease in retail advertising revenue wasdue largely to declines at The Albany Herald, which has been affected by the loss ofcertain advertisers, offset by growth at The Gwinnett Daily Post. Classified advertisingrevenues increased at all of our newspaper properties, led by The Albany Herald.  **•** Collegiate Marketing and Production Services revenue was approximately $19.0 millionfor the three months ended March 31, 2006. This business segment was acquired in the Mergerand, as such, there was no revenue recognized by us related to this business segment forthe three months ended March 31, 2005. Revenue for this segment was approximately $17.5million for the three months ended March 31, 2005, all of which was derived prior to theMerger. The increase was primarily
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   attributable to the expansion of marketing rights available under contract extensions withcertain universities and an increase in revenues derived from rights available under existingcontracts.  **•** Association Management revenue was approximately $2.2 million for the three monthsended March 31, 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 monthsended March 31, 2005. Revenue for this segment was approximately $1.9 million for the threemonths ended March 31, 2005 all of which was derived prior to the Merger. Theincrease was primarily attributable to an association management contract added in May2005.  **•** GrayLink Wireless revenue decreased 13% to approximately $1.7 million for the threemonths ended March 31, 2006 compared to approximately $2.0 million for the three monthsended March 31, 2005. Our GrayLink Wireless business had approximately 37,800 and 31,100pagers in service as of March 31, 2005 and 2006, respectively. The number of pagers inservice decreased as a result of increased competition from other communication servicesand products such as cellular telephones. The number of pagers in service has declined overthe past several years. The decrease in revenue from the sale and leasing of pagers hasbeen partially offset by reselling cellular telephone services. Paging revenue, excludingrevenue from reselling cellular telephone services, accounted for approximately $1.1million of total GrayLink Wireless revenue in 2005 compared to approximately $0.9 millionin 2006. The trend of declining GrayLink paging revenue is expected to continue in thefuture.     *Operating expenses.*Operating expenses for the three months ended March 31, 2006 increasedfrom approximately $10.7 million for the three months ended March 31, 2005 to approximately $30.0million.     Newspaper Publishing expenses, before depreciation and amortization, decreased 1% toapproximately $8.0 million. **•** Newsprint expenses increased 7% to approximately $1.4 million. The increase innewsprint expense was primarily due to the increase in average cost per metric ton ofstandard newsprint by $69 per metric ton since March 31, 2005. Total usage wasapproximately 2,900 and 2,700 metric tons for the three months ended March 31, 2005 and2006, respectively. The $69 per metric ton average price increase resulted in approximately$0.2 million of the increase in newsprint costs for the three months ended March 31, 2006compared to same period during 2005.  **•** Newspaper Publishing payroll expenses increased 2% to approximately $3.8 million.  **•** Newspaper Publishing transportation service costs, which are primarily outsourced,increased 10% to approximately $1.1 million in the three months ended March 31, 2006compared to approximately $1.0 million for the three months ended March 31, 2005. Theincrease between the periods reflects general increases in fuel costs, which resulted inhigher rates paid to independent contractors.  **•** Newspaper Publishing repairs and maintenance expense decreased nearly 60% toapproximately $57,000 in the three months ended March 31, 2006 compared to approximately$137,000 for the three months ended March 31, 2005. The decrease in expense was primarilythe result of repairs to a printing press and other production equipment at The GwinnettDaily Post and Albany Herald in 2005.     Collegiate Marketing and Production Services expenses for the three months ended March 31,2006 were approximately $15.8 million. This business segment was acquired in the Merger and, assuch, there was no expense recognized by us related to this business segment for the three monthsended March 31, 2005.     Association Management expenses for the three months ended March 31, 2006 were approximately$1.7 million. This business segment was acquired in the Merger and, as such, there was no revenuerecognized by us related to this business segment for the three months ended March 31, 2005.
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     Corporate and administrative expenses for the three months ended March 31, 2006 ofapproximately $1.3 million included approximately $0.3 million of expense incurred in connectionwith the combination of the merged businesses and services related thereto. For periods in 2005prior to the Spin-off, corporate and administrative expenses include only costs allocated to us byGray, and therefore do not include certain costs incurred by a separate, stand-alone company.     Depreciation of property and equipment totaled approximately $0.4 million and $0.6 million forthe three months ended March 31, 2005 and 2006, respectively.     Amortization expense in connection with definite-lived intangible assets acquired in theMerger was $0.6 million during the three months ended March 31, 2006.     *Interest expense.*Interest expense incurred in connection with our Credit Facilities wasapproximately $2.9 million for the three months ended March 31, 2006. Interest expense related toour Series B preferred stock, a noncash expense, was approximately $0.1 million for such period.There was no interest expense recorded in the three months ended March 31, 2005, since prior to theSpin-off, Gray provided all capitalization for the Company.     *Debt issue cost amortization.*Amortization of costs incurred in connection with our CreditFacilities were approximately $0.3 million for the three months ended March 31, 2006. Such costsare being amortized over four years. There was no such expense in 2005 prior to the Spin-off sinceGray provided all capitalization for the Company.     *Income tax expense.*Income tax expense was approximately $1.0 million and $0.6 million forthe three months ended March 31, 2005 and 2006, respectively. The effective tax rate wasapproximately 38.1% and 44.1% for each period, respectively. For periods in 2005 prior to theSpin-off, the tax provision was based on an allocation of income tax expense by Gray. Permanentdifferences are expected to represent a high percentage of our income before income taxes for thecurrent fiscal year. As a result, our effective tax rate for the fiscal year may vary significantlyfrom the effective tax rate for the three months ended March 31, 2006.**Liquidity and Capital Resources**  ***General***     The following tables present data that we believe is helpful in evaluating our liquidity andcapital resources (amounts in thousands):           **Three Months Ended**   **March 31,**   **2005**  **2006** Net cash provided by operating activities $3,613  $2,005 Net cash used in investing activities  (345)  (297)Net cash used in financing activities  (3,568)  (2,639)                Net decrease in cash and cash equivalents $(300) $(931)                  **December 31,** **March 31,**  **2005** **2006**Cash and cash equivalents $1,473  $542 Long-term debt, including current portion $121,939  $119,775   ***Three Months Ended March 31, 2006 compared to Three Months Ended March 31, 2005***     Net cash provided by operating activities decreased approximately $1.6 million primarily dueto (a) approximately $1.8 million of interest paid in 2006, whereas, in 2005, no interest wasrequired to be paid; a
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decrease of approximately $1.0 million in accounts receivable in 2005 compared to an increase of approximately $0.1 million in 2006; and a reduction of approximately$1.9 million in deferred revenue in 2006 compared to substantially no change in 2005; offset by (b)an increase in accounts payable and accrued expenses in 2006 of approximately $0.7 million comparedto an increase of approximately $0.3 million in 2005; and an increase in 2006 of $2.7 million inoperating income before non-cash depreciation, amortization, and the gain or loss on the disposalof assets.     Net cash used in investing activities decreased approximately $0.1 million due to a reductionin capital expenditures in 2006 compared to 2005.     Net cash used in financing activities decreased approximately $1.0 million due to changes inthe capital structure of our Company. In 2006, we had repayments, net of borrowings, of our CreditFacilities totaling approximately $2.2 million and paid approximately $0.4 million of our accrueddistribution to Gray for reimbursement of certain expenses paid by Gray in 2006 in connection withthe Spin-off, whereas in 2005, we transferred cash to Gray of approximately $3.6 million.  ***Off-Balance Sheet Arrangements***     We have various operating lease commitments for equipment and real estate used for officespace and production facilities.     We may use interest rate swap agreements to convert some of our variable rate debt to a fixedrate basis, thus hedging against interest rate fluctuations. These hedging activities may betransacted with one or more highly-rated institutions, reducing the exposure to credit risk in theevent of nonperformance by the counter-party to the swap agreement. In February 2006, we enteredinto an interest rate swap agreement effective in June 2006 and terminating in March 2009. Underthe agreement, we will be converting a notional amount of $60 million of floating rate debt(currently bearing interest at LIBOR plus the currently applicable margin of 3.25%) to fixed ratedebt, bearing interest at 5.05% plus the applicable margin.  ***Contractual Obligations as of March 31, 2006***(amounts in thousands):                       **Payment Due by Period**       **Less Than**  **1-3 Years**  **3-5 Years**  **More Than**       **1 Year**  **(April 1, 2007 to**  **(April 1, 2009 to**  **5 Years (After** **Contractual Obligations** **Total**  **(March 31, 2007)**  **March 31, 2009)**  **March 31, 2011)**  **March 31, 2011)** Long-term debt obligations $119,775  $900  $1,800  $117,075  $0 Interest obligations (1)  48,966   11,391   22,611   14,964   0 Operating lease obligations (2)  5,722   1,665   1,864   1,533   660 Purchase obligations (3)  113,734   18,590   28,610   20,848   45,686                                        $288,197  $32,546  $54,885  $154,420  $46,346                  (1) Interest obligations assume the LIBOR rate in effect as of March 31, 2006, asadjusted for the fixed interest rate under the interest rate swap agreement for theperiod during which the interest rate swap agreement will be effective. Interestobligations are presented through the maturity dates of each component of the creditfacilities. (2) Operating lease obligations represent payment obligations under non-cancelablelease agreements classified as operating leases and disclosed pursuant to Statements ofFinancial Accounting Standards No. 13, “Accounting for Leases”, as may be modified orsupplemented. These amounts are not recorded as liabilities as of the current balancesheet date. Operating lease obligations are presented net of future receipts oncontracted sublease arrangements totaling approximately $0.8 million as of March 31,2006. (3) Purchase obligations primarily consist of future guaranteed rights fee commitmentsto associations or institutions under contractual arrangements of typically three to tenyears, which expire at varying times through 2016.
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     Dividends on Series A Preferred Stock and Series B Preferred Stock are payable annually at anannual rate of $40 and $60 per share, respectively, in cash or issuance of the respective preferredstock, at the Company’s option. If we were to fund dividends accruing during the twelve monthsending March 31, 2007 in cash, the total obligation would be approximately $1.2 million based onthe number of shares of Series A and Series B Preferred Stock outstanding as of March 31, 2006.     We currently anticipate that the cash requirements for capital expenditures, operating leasecommitments and working capital with respect to the Newspaper Publishing business and the GrayLinkWireless business over the next few years will be generally consistent, in the aggregate, withhistorical levels and would likely be funded from cash provided by operating activities. Further,we currently anticipate that the recently-acquired Collegiate Marketing and Production Services andAssociation Management Services businesses will not require significant investments in workingcapital from year to year, although the seasonality of the Collegiate Marketing and ProductionServices business causes seasonal cash requirements for working capital. These seasonal cashrequirements, and any year to year cash requirements, would likely be funded from cash provided byoperating activities. In the aggregate, total capital expenditures are not expected to exceed $2million for the twelve months ending March 31, 2007.     On December 30, 2005, we entered into a senior secured credit facility for debt financing inan aggregate principal amount of up to $140 million, consisting of (1) a 4-year $20 millionrevolving credit facility, a 4.5-year $90 million first lien term loan and a 5-year $30 millionsecond lien term loan. The interest rate is based on the bank lender’s base rate (generallyreflecting the lender’s prime rate) or LIBOR plus in each case a specified margin, and forrevolving and first lien term loan advances, the margin is based upon our debt leverage ratio asdefined in the agreement. The initial margin for revolving and first lien term loan advances is2.25% for base rate advances and 3.25% for LIBOR advances. The specified margin for second lienterm loan advances is 8.0% for base rate advances and 9.0% for LIBOR advances. As of March 31,2006, the interest rates on the first lien and second lien term loans were approximately 8.1% and13.6%, respectively.     The credit facility is collateralized by substantially all of our assets. The agreementcontains certain restrictive provisions which include, but are not limited to (a) requiring us tomaintain certain financial ratios and (b) limit our ability to (i) incur additional indebtedness;(ii) make certain acquisitions or investments; (iii) sell assets; or (iv) make other restrictedpayments, including dividends, as defined in the agreement.     With the consummation of the Merger and the refinancing, the cash required to service theanticipated debt described above increased substantially. The first lien term loan facilityrequires amortization of $225,000 per quarter beginning March 31, 2006. Aggregate interest expenseon the first and second lien term loans is currently anticipated to initially be approximately $11to $12 million per year. The cash required to service the debt is currently expected to be fundedfrom cash generated by operating activities. We have access to the $20 million First Lien RevolvingCredit Facility to support cash liquidity needs, subject to debt leverage ratio requirements testedas of the end of each quarterly period. At March 31, 2006, our term loans were fully funded and noamounts were borrowed under the revolving credit facility. Based on the calculated debt leverageratio as of March 31, 2006, we would have had access of up to approximately $5.3 million ofadditional borrowing capacity of the First Lien Revolving Credit Facility on March 31, 2006, and$20 million immediately thereafter.**Certain Relationships**     Effective at the time of the Spin-off, we obtained certain workers compensation insurancecoverage under an insurance contract with Georgia Casualty & Surety Co., which is a wholly-ownedsubsidiary of Atlantic American Corporation, a publicly traded company in which J. Mack Robinson(beneficial owner of approximately 10% of the outstanding shares of our common stock and all of theoutstanding shares of our preferred stock) and certain of his affiliates have a substantialownership interest, and a company of which Hilton H. Howell, a member of our board of directors and Mr. Robinson’s son-in-law, is anexecutive officer. Prior to the Spin-off, Gray had a similar insurance contract with the samecompany. Our annual workers’ compensation insurance expense attributable to Gray’s insurancecontract with Georgia Casualty was
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approximately $0.2 million 2005 and is expected to be approximately $0.2 million in the year ending December 31, 2006.     Through a rights-sharing agreement with Gray expiring in 2015, subsequent to the Merger, weparticipate jointly with Gray in the marketing, selling and broadcasting of certain collegiatesporting events and in related programming, production and other associated activities of oneuniversity. In our role under the agreement with Gray, we manage the preponderance of therevenue-generating and sales fulfillment activities and provide all administrative functions for usand Gray. As a result, we recognize the total revenues derived and expenses incurred in connectionwith services performed on behalf of the university, and expense amounts paid to Gray under therights-sharing agreement as a rights fee. The amount payable to Gray is 50% of the profit derivedfrom these marketing activities, as determined at the conclusion of each contract year. Gray alsobears 50% of any losses. The agreement with Gray also requires Gray to pay to the university 50% ofthe rights fees payable under the contract with the university as each rights fee installmentpayment becomes due. Such amounts paid by Gray during the contract year are added to the annualsettlement amount between us and Gray.**Critical Accounting Policies**     The preparation of financial statements in conformity with accounting principles generallyaccepted in the United States of America requires management to make judgments and estimations thataffect the amounts reported in the financial statements and accompanying notes. Actual resultscould differ from those estimates. We consider the following accounting policies to be criticalpolicies that require judgments or estimates in their application where variances in thosejudgments or estimates could make a significant difference to future reported results.     ***Revenue Recognition and Rights Fee Expenses***     Newspaper publishing revenue is generated primarily from circulation and advertising revenue.Advertising revenue is billed to the customer and recognized when the advertisement is published.We bill our customers in advance for newspaper subscriptions and the related revenues arerecognized over the period the service is provided on a straight-line basis.     Revenue derived by our collegiate marketing and production services segment and associationmanagement services segment are recognized as the services are rendered, and consist primarily ofadvertising revenues in connection with broadcast and print media sold by us, the rights to whichare generally acquired by us under multi-media rights agreements with collegiate institutions orassociations. Advertising revenues are recognized when the event occurs or the publication ispublicly distributed. In addition, to a lesser extent, we derive revenue from corporate sponsorshipand licensing arrangements, association management fees, radio station rights fees, sales ofcommercial printing and other miscellaneous revenues generated from product sales and productionservices. Corporate sponsorships related to specific events are recognized when the event occurs orthe events occur. Corporate sponsor license fee revenue that is not related to specific events isrecognized evenly over the term of the licensing arrangement. Association management fees arerecognized over the term of the contract year as the related services are performed. Radio stationrights fees are recognized ratably as the games as to which those rights relate are broadcast.Sales of commercial printing and other product sales are recognized when title passes to thecustomer, or in the case of vending revenues, when the game is played.     In certain circumstances, we enter into contractual arrangements with associations orinstitutions that we represent in various capacities that involve payment of guaranteed rightsfees. Guaranteed rights fee expense that is not related to specific events is recognized evenlyover each annual term specified in the contract. Our contractual arrangements with associations orinstitutions may also involve net profit sharing arrangements based on the net profit associatedwith services rendered under the contract. Profit split expense is accrued over the contractperiod, based on estimates, and is adjusted at the end of the contract term in order to reflect theactual profit split. Estimates used in the determination of profit split expense are updated monthly and adjusted to actual when the profit split settlement is determined at theend of each contract year.
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     Wireless revenue results primarily from the sale of pagers, cellular telephones and relatedservices. We bill our customers in advance for wireless services and the related revenues arerecognized on a straight-line basis over the period the service is provided. Revenue from the saleof cellular telephones and pagers is recognized at the time of sale.     The allowance for doubtful accounts represents our best estimate of the accounts receivablethat will be ultimately collected, based on, among other things, historical collection experience,a review of the current aging status of customer receivables, and a review of specific informationfor those customers that are deemed to be higher risk. We evaluate the adequacy of the allowancefor doubtful accounts on at least a quarterly basis. Unfavorable changes in economic conditionsmight impact the amounts ultimately collected from advertisers and corporate sponsors and thereforemay result in an inadequate allowance.  ***Valuation and Impairment Testing of Intangible Assets***     In accordance with Statement of Financial Accounting Standards No. 142, “Goodwill and OtherIntangible Assets” (“SFAS 142”), we do not amortize goodwill and certain intangible assets withindefinite useful lives. Instead, SFAS 142 requires that we review goodwill and intangible assetsdeemed to have indefinite useful lives on at least an annual basis. We perform our annualimpairment review during the fourth quarter of each fiscal year or whenever events or changes incircumstances indicate that such assets might be impaired.     The impairment analysis is based on our estimates of the net present value of future cashflows derived from each reporting unit in order to determine the estimated market value. Thedetermination of estimated market value requires significant management judgment includingestimating operating cash flow to be derived in each reporting unit for several years, changes inworking capital, capital expenditures and the selection of an appropriate discount rate. A futurereduction in the estimated net present value of future cash flows derived from an affectedreporting unit could result in an impairment charge, Factors potentially leading to a reduction ofthe estimated net present value of future cash flows could include (i) the loss of a significantcustomer or contract, (ii) significantly less favorable terms of new contracts and contractrenewals, and (iii) prolonged economic downturns affecting advertising spending.     For purposes of testing goodwill impairment, each of the Gwinnett Daily Post, Rockdale/NewtonCitizen, and our recently-acquired Collegiate Marketing and Production Services business,Association Management Services business and South Atlanta Properties are each considered aseparate reporting unit. There is no recorded goodwill associated with the Albany Herald or theGrayLink Wireless business.     We review each reporting unit for possible goodwill impairment by comparing the estimatedmarket value of each respective reporting unit to the carrying value of that reporting unit’s netassets. If the estimated market values exceed the net assets, no goodwill impairment is deemed toexist. If the fair value of the reporting unit does not exceed the carrying value of that reportingunit’s net assets, goodwill impairment is deemed to exist. We then perform, on a notional basis, apurchase price allocation applying the guidance of Statements of Financial Accounting Standards No.141, “Business Combinations” (“SFAS 141”) by allocating the reporting unit’s fair value to the fairvalue of all tangible and identifiable intangible assets residual fair value representing theimplied fair value of goodwill of that reporting unit. The carrying value of goodwill for thereporting unit is written down to this implied value.     In 2004, the Emerging Issues Task Force (“EITF”), and the Staff of the U.S. Securities andExchange Commission (referred to herein as the SEC) clarified their position on the use of theresidual method for valuation of acquired assets other than goodwill which is referred to as topicD-108. The SEC Staff stated that the residual method does not comply with the requirements of SFASNo. 141 when used to value certain intangible assets that arise from legal or contractual rights.Accordingly, the SEC Staff stated that the residual method should no longer be used to valueintangible assets other than goodwill. Under these rules, we have been required to apply the incomeapproach for such assets acquired in business combinations completed after September 29, 2004. FCClicenses acquired by us prior to January 1, 2002 were valued using the residual value methodology. During the first quarter of 2005, we adoptedthe income approach, as required by the SEC, and performed a valuation assessment of our FCClicenses using the income approach. Adoption of this provision did not materially affect ourfinancial statements.
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     Goodwill and intangibles, net of accumulated amortization, were approximately $104.2 millionas of December 31, 2005 and $103.6 million as of March 31, 2006, of which, goodwill wasapproximately $85.7 million as of each date. The carrying value of goodwill and acquiredintangibles, net of accumulated amortization, represented approximately 62% of our total assets asof March 31, 2006.  ***   Deferred Income Taxes***     Deferred income tax liabilities or assets at the end of each period are determined using thetax rate expected to be in effect when the taxes are actually paid or recovered. A valuationallowance is recognized on certain deferred tax assets if it is more likely than not that some orall of these deferred tax assets will not be realized. We do not anticipate that all of ouravailable net operating loss carryforward amounts for tax purposes obtained in the Merger whichtotal approximately $74 million for federal income tax purposes, will ultimately be realized, dueto their expiration or other limitations on utilization. As a result, as of March 31, 2006, wehave recognized a valuation allowance of approximately $9.5 million for net deferred tax assets. Ifand when we revise our estimate of the benefit expected to be derived from the net operating losscarryforward, the valuation allowance may be modified. Increases in the valuation allowance couldincrease the tax provision or decrease the tax benefit recognized in the period of the change inestimate. The net operating loss carryforward for federal tax purposes begins to expire in 2018. Asa result of the availability of these net operating loss carryforwards, we currently do notanticipate that we will be required to make federal income tax payments until at least 2008 unlesswe have significant changes to our businesses.  ***   Transactions with Related Parties***     The terms of all material transactions involving related persons or entities have been onterms similar to those of our transactions with independent parties, or in cases where we have notentered into similar transactions with unrelated parties, on terms that were believed to berepresentative of those that would likely be negotiated with independent parties. All materialtransactions with related parties are reviewed and approved by the independent directors of theCompany.  **   Interest Rate and Market Rate Risk**     We are exposed to changes in interest rates due to our financing of our acquisitions,investments and operations. Interest rate risk is present with both fixed and floating rate debt.Based on our debt profile as of March 31, 2006, a 100 basis point increase in market interest rateswould increase interest expense and decrease pretax income (or increase pretax loss) byapproximately $1.2 million annually. This amount was determined based on our floating rate debt.This amount does not include the effects of certain potential results of increased interest rates,such as reduced level of overall economic activity or other actions management may take to mitigatethe risk. Furthermore, this sensitivity analysis does not assume changes in our financial structurethat could occur if interest rates were higher.     In February 2006, we entered into an interest rate swap agreement, effective June 6, 2006, tomanage our debt profile, which will involve the exchange of interest at a fixed rate of 5.05% forinterest equal to the 3-month LIBOR rate, without an exchange of the $60 million notional amountupon which the payments are based. The interest rate swap has been designated as a cash-flow hedgeagainst the anticipated interest payments on $60 million of the first lien term loan. As a resultof this interest rate swap and the resulting payment of interest at fixed rates on $60 million ofour debt, the effect of 100 basis point in market interest rates on interest expense and pretaxincome or loss, assuming the interest rate swap agreement was effective as of the beginning of theyear, would be $0.6 million less than indicated in the preceding paragraph.  **   Forward-Looking Statements**     This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning ofthe Private Securities Litigation Reform Act of 1995. When used in this report, the words“believes,” “expects,” “anticipates,” “estimates,” and similar words and expressions are generallyintended to identify forward-looking statements. Statements that describe our future strategicplans, goals or objectives are also
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forward-looking statements. Readers of this Report are cautioned that any forward-looking statements, including those regarding the intent, belief orcurrent expectations of our management, are not guarantees of future performance, results orevents, and involve risks and uncertainties. The forward-looking statements included in this reportare made only as of the date hereof. We undertake no obligation to update such forward-lookingstatements to reflect subsequent events or circumstances. Actual results and events may differmaterially from those in the forward-looking statements as a result of various factors, includingthe factors disclosed in Item 1A of our Annual Report on Form 10-K for the year ended December31, 2005.**Item 3. Quantitative and Qualitative Disclosure About Market Risk**     See “Interest Rate and Market Rate Risk” in Item 2 of this Form 10-Q.**Item 4. Controls and Procedures**     ***Disclosure Controls and Procedures***     We maintain disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e)under the Securities Exchange Act of 1934, as amended, referenced herein as the Exchange Act.These disclosure controls and procedures are designed to ensure that information required to bedisclosed by us in the reports that we file or furnish under the Exchange Act is recorded,processed, summarized, and reported within the time periods specified in the SEC’s rules and forms,and that such information is accumulated and communicated to our management, including our chiefexecutive officer and chief financial officer, as appropriate, to allow timely decisions regardingrequired disclosure.     We carried out, under the supervision and with the participation of our management, includingour Chief Executive Officer and our Chief Financial Officer, an evaluation of the effectiveness ofthe design and operation of our disclosure controls and procedures performed pursuant to Rule13a-15 under the Exchange Act. Based on their evaluation, our Chief Executive Officer and ourChief Financial Officer concluded that, as of March 31, 2006, our disclosure controls andprocedures were effective to ensure that the information required to be disclosed by us in thereports that we file or furnish under the Exchange Act is recorded, processed, summarized andreported within the time periods specified in the SEC’s rules and forms, and that such informationis accumulated and communicated to our management.     ***Changes in Internal Control over Financial Reporting***     There were no changes in our internal control over financial reporting during the quarterended March 31, 2006 identified in connection with the evaluation thereof by our managementthat have materially affected, or are reasonably likely to materially affect, our internal controlover financial reporting.**PART II. OTHER INFORMATION****Item 1A. Risk Factors**          You should carefully consider the risk factors disclosed in our Annual Report on Form 10-K forthe year ended December 31, 2005, in Part I, Item 1A, Risk Factors. Any of those risks could havea material adverse effect on our financial condition and results of operations. The followingrisks factors have been modified from those appearing in our Annual Report on Form 10-K:          In our Annual Report on Form 10-K, we disclosed that the proposed sale or swap of The GoshenNews for another newspaper in connection with Gray’s acquisition of a television station may bemore advantageous to Gray than to us and may impact our business on a going-forward basis,including imposing indemnification obligations on us and a deadline within which we must sell orswap The Goshen News, which may impair our bargaining position in connection with such sale orswap. We do not believe that these factors continue to be a risk for the Company. On April 7,2006, the Company, Gray Publishing,
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LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company (“Triple Sub”) and Community First Holdings, Inc., a Delaware corporation(“Holdings”) entered into an asset exchange agreement, dated as of April 1, 2006 ( the“Agreement”). Subject to the terms and conditions of the Agreement, effective as of April 1, 2006,Holdings transferred, assigned and conveyed to Triple Sub and Triple Sub acquired from Holdings allof Holdings’ right, title and interest in and to the assets, properties, rights, interests andclaims (other than certain excluded assets), that are used or held for use primarily in connectionwith the business and operations of the Clayton News Daily, Clayton News Weekly, Henry Daily Heraldand Jackson Progress — Argus, including without limitation the publication of the Clayton NewsDaily, Clayton News Weekly, Henry Daily Herald and Jackson Progress — Argus and the operation ofthe Clayton News Daily, Clayton News Weekly, Henry Daily Herald and Jackson Progress — Argus, andin exchange thereof, Triple Sub transferred, assigned and conveyed to Holdings and Holdingsacquired from Triple Sub all of Triple Sub’s right, title and interest in and to the assets,properties, rights, interests and claims (other than certain excluded assets), that are used orheld for use primarily in connection with the business and operations of The Goshen News, includingwithout limitation the publication of The Goshen News and the operation of The Goshen News.**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
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**SIGNATURES**     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has dulycaused this report to be signed on its behalf by the undersigned, thereunto duly authorized.       TRIPLE CROWN MEDIA, INC.     Date: May 15, 2006 by: /s/ MARK G. MEIKLE         Mark G. Meikle    Executive Vice President and Chief Financial Officer
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