UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    Form 10-K

|X|   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934

                  For the fiscal year ended September 30, 2004

                                       OR

|_|   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

For the transition period from                         to
                               -----------------------    ----------------------

Commission File No. 333-02302

                        ALLBRITTON COMMUNICATIONS COMPANY
             (Exact name of registrant as specified in its charter)

                Delaware                                  74-1803105
     (State or other jurisdiction of                   (I.R.S. Employer
      incorporation or organization)                    Identification No.)

 808 Seventeenth Street, N.W., Suite 300
            Washington, D.C.                               20006-3910
(Address of principal executive offices)                   (Zip Code)

     Registrant's telephone number,
          including area code:                           (202) 789-2130

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether this registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.

                               YES |_|   NO |X| (1)

Indicate by check mark if the disclosure of delinquent filers pursuant to item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy of information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.

                                       |X|

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

                               YES |_|   NO |X|

The aggregate market value of the registrant's Common Stock held by
non-affiliates is zero.

As of December 15, 2004, there were 20,000 shares of Common Stock, par value
$.05 per share, outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

None

______________
(1)   Although the Company has not been subject to such filing requirements for
      the past 90 days, it has filed all reports required to be filed by Section
      15(d) of the Securities Exchange Act of 1934 during the preceding 12
      months. Pursuant to Section 15(d) of the Securities Exchange Act of 1934,
      the Company's duty to file reports is automatically suspended as a result
      of having fewer than 300 holders of record of each class of its debt
      securities outstanding as of October 1, 2004, but the Company has agreed
      under the terms of certain long-term debt to continue these filings in the
      future.

<PAGE>

As used herein, the terms "Allbritton," "our," "us," "we" or the "Company" refer
to Allbritton Communications Company and its subsidiaries, and "ACC" refers
solely to Allbritton Communications Company. Depending on the context in which
they are used, the following "call letters" refer either to the corporate owner
of the station indicated or to the station itself: "WJLA" and "NewsChannel 8 "
together refer to WJLA-TV/NewsChannel 8, a division of ACC (operator of WJLA-TV
and NewsChannel 8, Washington, D.C.); "WHTM" refers to Harrisburg Television,
Inc. (licensee of WHTM-TV, Harrisburg, Pennsylvania); "KATV" refers to KATV, LLC
(licensee of KATV, Little Rock, Arkansas); "KTUL" refers to KTUL, LLC (licensee
of KTUL, Tulsa, Oklahoma); "WCIV" refers to WCIV, LLC (licensee of WCIV,
Charleston, South Carolina); "WSET" refers to WSET, Incorporated (licensee of
WSET-TV, Lynchburg, Virginia); "WCFT," "WBMA" and "WJSU" refer to TV Alabama,
Inc. (licensee of WCFT-TV, Tuscaloosa, Alabama, WBMA-LP, Birmingham, Alabama and
WJSU-TV, Anniston, Alabama). The term "ACCLI" refers to ACC Licensee, Inc.
(licensee of WJLA and NewsChannel 8). The term "ATP" refers to Allbritton
Television Productions, Inc. and the term "Perpetual" refers to Perpetual
Corporation, which is controlled by Joe L. Allbritton, Chairman of the Executive
Committee of the Board of Directors of ACC. "AGI" refers to Allbritton Group,
Inc., which is controlled by Perpetual and is ACC's parent. "Allfinco" refers to
Allfinco, Inc., a wholly-owned subsidiary of ACC. "Harrisburg Television" refers
to Harrisburg Television, Inc., an 80%-owned subsidiary of Allfinco. "TV
Alabama" refers to TV Alabama, Inc., an 80%-owned subsidiary of Allfinco that
owns WCFT, WJSU and WBMA. "Allnewsco" refers to ALLNEWSCO, Inc., an affiliate of
ACC that is a 99%-owned subsidiary of Perpetual. "RLA Trust" refers to the
Robert Lewis Allbritton 1984 Trust for the benefit of Robert L. Allbritton,
Chairman of the Board of Directors and Chief Executive Officer of ACC, that is a
minority owner of Allnewsco. "RLA Revocable Trust" refers to the trust of the
same name that owns 20% of each of Harrisburg Television and TV Alabama.

<PAGE>

                                TABLE OF CONTENTS


                                                                            Page
                                                                            ----
Part I

   Item 1.   Business....................................................      1
   Item 2.   Properties..................................................     17
   Item 3.   Legal Proceedings...........................................     19
   Item 4.   Submission of Matters to a Vote of Security Holders.........     19

Part II

   Item 5.   Market for Registrant's Common Equity, Related Stockholder
              Matters and Issuer Purchases of Equity Securities..........     19
   Item 6.   Selected Consolidated Financial Data........................     20
   Item 7.   Management's Discussion and Analysis of Financial Condition
              and Results of Operations..................................     23
   Item 7A.  Quantitative and Qualitative Disclosures About Market Risk..     44
   Item 8.   Consolidated Financial Statements and Supplementary Data....     44
   Item 9.   Changes in and Disagreements with Accountants on Accounting
              and Financial Disclosure...................................     44
   Item 9A.  Controls and Procedures.....................................     44
   Item 9B.  Other Information...........................................     44

Part III

   Item 10.  Directors and Executive Officers of the Registrant..........     45
   Item 11.  Executive Compensation......................................     48
   Item 12.  Security Ownership of Certain Beneficial Owners and
              Management.................................................     49
   Item 13.  Certain Relationships and Related Transactions..............     50
   Item 14.  Principal Accounting Fees and Services......................     52

Part IV

   Item 15.  Exhibits and Financial Statement Schedules..................     52


<PAGE>

      THIS ANNUAL REPORT ON FORM 10-K, INCLUDING ITEM 7 "MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS," CONTAINS
FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 21E OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, THAT ARE NOT HISTORICAL FACTS AND INVOLVE A
NUMBER OF RISKS AND UNCERTAINTIES. THERE ARE A NUMBER OF FACTORS THAT COULD
CAUSE OUR ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE PROJECTED IN SUCH
FORWARD-LOOKING STATEMENTS. THESE FACTORS INCLUDE, WITHOUT LIMITATION, OUR
OUTSTANDING INDEBTEDNESS AND OUR HIGH DEGREE OF LEVERAGE; THE RESTRICTIONS
IMPOSED ON US BY THE TERMS OF OUR INDEBTEDNESS; THE HIGH DEGREE OF COMPETITION
FROM BOTH OVER-THE-AIR BROADCAST STATIONS AND PROGRAMMING ALTERNATIVES SUCH AS
CABLE TELEVISION, WIRELESS CABLE, IN-HOME SATELLITE DISTRIBUTION SERVICE,
PAY-PER-VIEW SERVICES AND HOME VIDEO AND ENTERTAINMENT SERVICES; THE IMPACT OF
NEW TECHNOLOGIES; CHANGES IN FEDERAL COMMUNICATIONS COMMISSION ("FCC")
REGULATIONS; DECREASES IN THE DEMAND FOR ADVERTISING DUE TO WEAKNESS IN THE
ECONOMY; AND THE VARIABILITY OF OUR QUARTERLY RESULTS AND OUR SEASONALITY.

      ALL WRITTEN OR ORAL FORWARD-LOOKING STATEMENTS ATTRIBUTABLE TO THE COMPANY
ARE EXPRESSLY QUALIFIED BY THE FOREGOING CAUTIONARY STATEMENTS. READERS ARE
CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS WHICH
REFLECT MANAGEMENT'S VIEW ONLY AS OF THE DATE HEREOF.

                                     PART I

                              ITEM 1. OUR BUSINESS

The Company

      We own and operate ABC network-affiliated television stations serving
seven geographic markets: WJLA in Washington, D.C.; WCFT in Tuscaloosa, Alabama,
WJSU in Anniston, Alabama and WBMA-LP, a low power television station licensed
to Birmingham, Alabama (we operate WCFT and WJSU in tandem with WBMA-LP serving
the viewers of the Birmingham, Tuscaloosa and Anniston market as a single
programming source); WHTM in Harrisburg, Pennsylvania; KATV in Little Rock,
Arkansas; KTUL in Tulsa, Oklahoma; WSET in Lynchburg, Virginia; and WCIV in
Charleston, South Carolina. Our owned and operated stations broadcast to the
8th, 40th, 42nd, 57th, 60th, 67th and 101st largest national media markets in
the United States, respectively, as defined by Nielsen Media Research, Inc.
("Nielsen"), and reach approximately 5.0% of United States television
households. We also own NewsChannel 8, which provides 24-hour per day basic
cable television programming primarily focused on regional and local news for
the Washington, D.C. metropolitan area. The operations of NewsChannel 8 are
integrated with WJLA.


                                       1
<PAGE>

      Our stations are owned and operated by ACC (WJLA-TV/NewsChannel 8),
Harrisburg Television, Inc. (WHTM), KATV, LLC (KATV), KTUL, LLC (KTUL), WSET,
Incorporated (WSET), WCIV, LLC (WCIV) and TV Alabama, Inc. (WCFT, WJSU and
WBMA). Each company other than ACC is a wholly-owned subsidiary of ACC, except
Harrisburg Television and TV Alabama, each of which is an indirect 80%-owned
subsidiary of ACC. The Company was founded in 1974 and is a subsidiary of
Allbritton Group, Inc. ("AGI"), which is controlled by Perpetual Corporation,
which in turn is controlled by Mr. Joe L. Allbritton, Chairman of the Executive
Committee of the ACC Board of Directors. ACC and its subsidiaries are Delaware
corporations or limited liability companies. Our corporate headquarters are
located at 808 Seventeenth Street, N.W., Suite 300, Washington, D.C. 20006-3910,
and our telephone number at that address is (202) 789-2130.

Television Industry Background

      Commercial television broadcasting began in the United States on a regular
basis in the 1940s. Currently, there is a limited number of channels available
for broadcasting in any one geographic area, and the license to operate a
broadcast television station is granted by the FCC. Television stations that
broadcast over the VHF band (channels 2-13) of the spectrum generally have some
competitive advantage over television stations that broadcast over the UHF band
(channels 14-69) of the spectrum because VHF channels usually have better signal
coverage and operate at a lower transmission cost. However, the improvement of
UHF transmitters and receivers, the complete elimination from the marketplace of
VHF-only receivers and the expansion of cable television systems have reduced
the competitive advantage of television stations broadcasting over the VHF band.

      Television station revenues are primarily derived from local, regional and
national advertisers and, to a much lesser extent, from networks and program
syndicators for the broadcast of programming and from other broadcast-related
activities, including retransmission fees from multi-channel video providers
such as direct broadcast satellite ("DBS") providers. Advertising rates are set
based upon a variety of factors, including the size and demographic makeup of
the market served by the station, a program's popularity among viewers whom an
advertiser wishes to attract, the number of advertisers competing for the
available time, the availability of alternative advertising media in the market
area, a station's overall ability to attract viewers in its market area and the
station's ability to attract viewers among particular demographic groups that an
advertiser may be targeting. Advertising rates are also affected by an
aggressive and knowledgeable sales force and the development of projects,
features and programs that tie advertiser messages to programming. Because
broadcast television stations rely on advertising revenues, they are sensitive
to cyclical changes in the economy. The size of advertisers' budgets, which are
affected by broad economic trends, affect both the broadcast industry in general
and the revenues of individual broadcast television stations.

      United States television stations are grouped by Nielsen into 210
generally recognized television market areas that are ranked in size according
to various formulae based upon actual or potential audience. Each market area is
designated as an exclusive geographic area consisting of all counties in which
the home-market commercial stations receive the greatest percentage of total
viewing hours. The specific geographic markets are called Designated Market
Areas, or DMAs.

                                       2
<PAGE>

      Nielsen, which provides audience-measuring services, periodically
publishes data on estimated audiences for television stations in the various
DMAs throughout the country. These estimates are expressed in terms of both the
percentage of the total potential audience in the DMA viewing a station (the
station's "rating") and the percentage of the audience actually watching
television (the station's "share"). Nielsen provides such data on the basis of
total television households and selected demographic groupings in the DMA.
Nielsen uses two methods of determining a station's ratings and share. In larger
DMAs, ratings are determined by a combination of meters connected directly to
selected household television sets and weekly viewer-completed diaries of
television viewing, while in smaller markets ratings are determined by weekly
diaries only. Of the market areas in which we conduct business, Washington,
D.C., Birmingham, Alabama and Tulsa, Oklahoma are metered markets while the
remaining markets are weekly diary markets.

      National television ratings have been produced by Nielsen using People
Meter technology since 1987. Recently, Nielsen has begun to offer People Meter
service at the local level in place of television meters and weekly diaries. The
People Meter records viewing behavior in real time, producing viewer demographic
data on a daily basis. Nielsen launched Local People Meter service in Boston in
2002 and has introduced the service to other major markets, including New York,
Los Angeles and Chicago during 2004. Nielsen has notified us of its plan to
introduce Local People Meter service to the Washington, D.C. market in May 2005.

      Historically, three major broadcast networks--ABC, NBC and CBS--dominated
broadcast television. In recent years, FOX has evolved into the fourth major
network, although the hours of network programming produced by FOX for its
affiliates are fewer than those produced by the other three major networks. In
addition, UPN, WB and PAX TV have been launched as new broadcast television
networks, along with specialized networks, Telemundo, Univision and TV Azteca.

      The affiliation by a station with one of the four major networks has a
significant impact on the composition of the station's programming, revenues,
expenses and operations. A typical affiliate station receives approximately 9 to
13 hours of each day's programming from the network. This programming, along
with cash payments ("network compensation"), is provided to the affiliate by the
network in exchange for a substantial majority of the advertising time sold
during the airing of network programs. The network then sells this advertising
time for its own account. The affiliate retains the revenues from time sold
during breaks in and between network programs and during programs produced by
the affiliate or purchased from non-network sources. In acquiring programming to
supplement network programming, network affiliates compete primarily with
affiliates of other networks and independent stations in their market areas.
Cable systems generally do not compete with local stations for programming,
although various national cable networks from time to time have acquired
programs that would have otherwise been offered to local television stations. In
addition, a television station may acquire programming through barter
arrangements. Under barter arrangements, which have become increasingly popular
with both network affiliates and independents, a national program distributor
can receive advertising time in exchange for the programming it supplies, with
the station paying no fee or a reduced fee for such programming.

                                       3
<PAGE>

      An affiliate of UPN, WB or PAX TV receives a smaller portion of each day's
programming from its network compared to an affiliate of ABC, CBS, NBC or FOX.
As a result, affiliates of UPN, WB or PAX TV must purchase or produce a greater
amount of their programming, resulting in generally higher programming costs.
These stations, however, retain a larger portion of the inventory of advertising
time and the revenues obtained therefrom compared to stations affiliated with
the major networks, which may partially offset their higher programming costs.

      In contrast to a network affiliated station, an independent station
purchases or produces all of the programming that it broadcasts, generally
resulting in higher programming costs, although the independent station is, in
theory, able to retain its entire inventory of advertising time and all of the
revenue obtained from the sale of such time. Barter and cash-plus-barter
arrangements, however, have become increasingly popular among all stations.

      Public broadcasting outlets in most communities compete with commercial
broadcasters for viewers but not directly for advertising dollars.

      Broadcast television stations compete for advertising revenues primarily
with other broadcast television stations and, to a lesser extent, with radio
stations, cable system operators and programmers and newspapers serving the same
market. Traditional network programming generally achieves higher audience
levels than syndicated programs aired by independent stations. However, as
greater amounts of advertising time become available for sale by independent
stations and FOX affiliates in syndicated programs, those stations typically
achieve a share of the television market advertising revenues greater than their
share of the market area's audience. Consolidation of cable system ownership in
discrete markets (so-called "clustering") has enabled some cable operators to
more efficiently sell time to local advertisers.

      Through the 1970s, network television broadcasting enjoyed virtual
dominance in viewership and television advertising revenues because
network-affiliated stations only competed with each other in local markets.
Beginning in the 1980s, this level of dominance began to change as the FCC
authorized more local stations and marketplace choices expanded with the growth
of independent stations and cable television services.

      Cable television systems were first constructed in significant numbers in
the 1970s and were initially used to retransmit broadcast television programming
to paying subscribers in areas with poor broadcast signal reception. In the
aggregate, cable-originated programming has emerged as a significant competitor
for viewers of broadcast television programming, although no single cable
programming network regularly attains audience levels amounting to more than a
small fraction of any of the major broadcast networks. The advertising share of
cable networks increased during the 1970s and 1980s as a result of the growth in
cable penetration (the percentage of television households that are connected to
a cable system). Notwithstanding such increases in cable viewership and
advertising, over-the-air broadcasting remains the dominant distribution system
for mass market television advertising.

                                       4
<PAGE>

      In the 1990s, DBS service was introduced as a new competitive distribution
method. Home users purchase or lease satellite dish receiving equipment and
subscribe to a monthly service of programming options. Legislation was enacted
in November 1999 that permits local stations, under specified conditions, to be
carried on satellite which will retransmit those signals back to the originating
market. As DBS providers expand their facilities, an increasing number of local
stations will be carried as "local-to-local" signals, aided by a legal
requirement that mandates the carriage of all local broadcast signals if one is
retransmitted. All of our stations are currently carried on DBS systems.

      We believe that the market shares of television stations affiliated with
ABC, NBC and CBS declined during the 1980s and 1990s because of the emergence of
FOX and certain strong independent stations and because of increased cable
penetration. Affiliates of the minor networks have emerged as viable competitors
for television viewership share, particularly as a result of the availability of
first-run, major network-quality and regional sports programming. In addition,
there has been substantial growth in the number of home satellite dish receivers
and video cassette recorders, which has further expanded the number of
programming alternatives available to household audiences, along with
non-broadcast alternatives, especially with respect to news, available over the
rapidly expanding internet.

      Terrestrially-distributed television broadcast stations use analog
transmission technology. Recent advances in digital transmission technology
formats have enabled broadcasters to begin migration from analog to digital
broadcasting. Digital technologies provide cleaner video and audio signals as
well as the ability to transmit "high definition television" with theatre screen
aspect ratios, higher resolution video and "noise-free" sound. Digital
transmission also permits dividing the transmission frequency into multiple
discrete channels of standard definition television. The FCC has authorized a
transition plan to convert existing analog stations to digital by temporarily
offering a second channel to transmit programming digitally with the return of
the analog channel after the transition period. See "Legislation and
Regulation--Digital Television." All of our stations, except WJSU, which is
expected to begin digital transmissions by April 2005, broadcast with both an
analog and digital signal.


                                       5
<PAGE>

Station Information

      The following table sets forth general information for each of our owned
stations as of May 2004:
<TABLE>
<CAPTION>
                                                                                      Total
                                                                           Market   Commercial                 Rank
                                                    Analog      Digital     Rank    Competitors   Station       in
  Designated                           Network      Channel     Channel    or DMA    in Market    Audience    Market   Acquisition
  Market Area            Station     Affiliation   Frequency   Allocation   <F1>       <F2>       Share<F3>    <F4>        Date
  -----------            -------     -----------   ---------   ----------   ----       ----       ---------    ----        ----
<S>                   <C>                <C>        <C>            <C>       <C>        <C>          <C>       <C>      <C>
Washington, D.C.           WJLA          ABC         7/VHF         39         8          6           19%        4       01/29/76
Birmingham
  (Anniston and
  Tuscaloosa),
  AL <F5>             WBMA/WCFT/WJSU     ABC            --         --        40          6           21%        3             --
   Birmingham              WBMA          ABC        58/UHF         --        --         --           --        --       08/01/97
   Anniston                WJSU          ABC        40/UHF          9        --         --           --        --       03/22/00<F6>
   Tuscaloosa              WCFT          ABC        33/UHF          5        --         --           --        --       03/15/96
Harrisburg-Lancaster-
  York-Lebanon, PA         WHTM          ABC        27/UHF         10        42          5           20%        3       03/01/96
Little Rock, AR            KATV          ABC         7/VHF         22        57          5           31%        1       04/06/83
Tulsa, OK                  KTUL          ABC         8/VHF         10        60          6           26%        2       04/06/83
Roanoke-Lynchburg, VA      WSET          ABC        13/VHF         34        67          4           21%        3       01/29/76<F7>
Charleston, SC             WCIV          ABC         4/VHF         34       101          5           14%        3       01/29/76<F7>

<FN>
________________
<F1> Represents market rank based on the Nielsen Station Index published
     September 2004.
<F2> Represents the total number of commercial broadcast television stations in
     the DMA with an audience share of at least 1% in the 6:00 a.m. to 2:00
     a.m., Sunday through Saturday, time period.
<F3> Represents the station's share of total viewing of commercial broadcast
     television stations in the DMA for the time period of 6:00 a.m. to 2:00
     a.m., Sunday through Saturday.
<F4> Represents the station's rank in the DMA based on its share of total
     viewing of commercial broadcast television stations in the DMA for the time
     period of 6:00 a.m. to 2:00 a.m., Sunday through Saturday.
<F5> TV Alabama serves the Birmingham market by simultaneously broadcasting
     identical programming over WBMA, WCFT and WJSU. The stations are listed on
     a combined basis by Nielsen as WBMA+, the call sign of the low power
     television station.
<F6> We began programming WJSU pursuant to a local marketing agreement in
     December 1995. In connection with the local marketing agreement, we entered
     into an option to purchase the assets of WJSU. We exercised our option to
     acquire WJSU and completed our acquisition of WJSU on March 22, 2000. See
     "Owned Stations--WBMA/WCFT/WJSU: Birmingham (Anniston and Tuscaloosa),
     Alabama."
<F7> WSET and WCIV have been indirectly owned and operated by Joe L. Allbritton
     since 1976. On March 1, 1996, WSET and WCIV became wholly-owned
     subsidiaries of ACC.

</FN>
</TABLE>


                                       6
<PAGE>


Business and Operating Strategy

      Our business strategy is to focus on building net operating revenues and
net cash provided by operating activities. We intend to pursue selective
acquisition opportunities as they arise. Our acquisition strategy is to target
network-affiliated television stations where we believe we can successfully
apply our operating strategy and where such stations can be acquired on
attractive terms. Targets include stations in midsized growth markets with what
we believe to be advantageous business climates. Although we continue to review
strategic investment and acquisition opportunities, no agreements or
understandings are currently in place regarding any material investments or
acquisitions.

      In addition, we continually seek to enhance net operating revenues at a
marginal incremental cost through our use of existing personnel and programming
capabilities. For example, KATV operates the Arkansas Razorback Sports Network
("ARSN"), which provides University of Arkansas sports programming to a network
of 60 radio stations in three states. Certain broadcast television, cable
pay-per-view and home video rights are also controlled by ARSN.

      During Fiscal 2002, we acquired the operations of NewsChannel 8, which
provides 24-hour per day basic cable television programming primarily focused on
regional and local news for the Washington, D.C. metropolitan area. The
operations of NewsChannel 8 were integrated with those of WJLA in a new studio
and office facility, creating the first newsgathering duopoly in the Nation's
Capital. The combination of these two operations has allowed for certain
operational efficiencies.

      Our operating strategy focuses on four key elements:

      Local News and Community Leadership. Our stations strive to be local news
leaders to exploit the revenue potential associated with local news leadership.
Since the acquisition of each station, we have focused on building that
station's local news programming franchise as the foundation for building
significant audience share. In each of our market areas, we develop additional
information-oriented programming designed to expand the stations' hours of
commercially valuable local news and other programming with relatively small
incremental increases in operating expenses. Local news programming is
commercially valuable because of its high viewership level, the attractiveness
to advertisers of the demographic characteristics of the typical news audience
(allowing stations to charge higher rates for advertising time) and the enhanced
ratings of other programming in time periods adjacent to the news. In addition,
we believe strong local news product has helped differentiate local broadcast
stations from the increasing number of cable programming competitors that
generally do not provide this material.

      High Quality Non-Network Programming. Our stations are committed to
attracting viewers through an array of syndicated and locally-produced
programming to fill those periods of the broadcast day not programmed by the
network. This programming is selected by us based on its ability to attract
audiences highly valued in terms of demographic makeup on a cost-effective basis
and reflects a focused strategy to migrate and hold audiences from program to
program throughout dayparts. Audiences highly valued in terms of demographic
makeup include

                                       7
<PAGE>

women aged 18-49 and all adults aged 25-54. These demographic groups are
perceived by advertisers as the groups with the majority of buying authority and
decision-making in product selection.

      Local Sales Development Efforts. We believe that television stations with
a strong local presence and active community relations can realize additional
revenue from advertisers through the development and promotion of special
programming and marketing events. Each of our stations has developed such
additional products, including high quality programming of local interest (such
as University of Arkansas football and basketball games) and sponsored community
events. These sponsored events have included health fairs, contests, job fairs,
parades and athletic events and have provided advertisers, who are offered
participation in such events, an opportunity to direct a marketing program to
targeted audiences. These additional products have proven successful in
attracting incremental advertising revenues. The stations also seek to maximize
their local sales efforts through the use of extensive research and targeted
demographic studies.

      Cost Control. We believe that controlling costs is an essential factor in
achieving and maintaining the profitability of our stations. We believe that by
delivering highly targeted audience levels and controlling programming and
operating costs, our stations can achieve increased levels of revenue and
operating cash flow. Each station rigorously manages its expenses through a
budgetary control process and project accounting, which include an analysis of
revenue and programming costs by daypart. Moreover, each station closely
monitors its staffing levels.

Owned Stations

   WJLA/NewsChannel 8:    Washington, D.C.

      Acquired by ACC in 1976, WJLA is an ABC network affiliate pursuant to an
affiliation agreement that expires on December 31, 2012. The station's FCC
license (held by ACCLI) expired on October 1, 2004. An application for license
renewal is pending. See "Legislation and Regulation--License Renewal."
Washington, D.C. is the eighth largest DMA, with approximately 2,242,000
television households. We believe that stations in this market generally earn
higher advertising rates than stations in smaller markets because many national
advertising campaigns concentrate their spending in the top ten media markets
and on issue-oriented advertising in Washington, D.C. The Washington, D.C.
market is served by six commercial television stations.

      On September 16, 2002, ACC completed its acquisition of certain of the
assets of Allnewsco, constituting the operations of NewsChannel 8, which
provides 24-hour per day basic cable television programming primarily focused on
regional and local news for the Washington, D.C. metropolitan area. The
operations of NewsChannel 8 were integrated with those of WJLA in a new studio
and office facility, creating the first newsgathering duopoly in the Nation's
Capital. The combination of these two operations allows for certain operational
efficiencies, primarily in the areas of newsgathering, administration, finance,
operations, promotions and

                                       8
<PAGE>

human resources. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--General Factors Affecting Our Business."

   WBMA/WCFT/WJSU:    Birmingham (Anniston and Tuscaloosa), Alabama

      We acquired WCFT in March 1996 and commenced programming WJSU, licensed to
Anniston (Birmingham), Alabama, under a Time Brokerage Agreement (referred to
herein as the Anniston LMA) effective December 29, 1995. In connection with the
Anniston LMA, we entered into an option to purchase the assets of WJSU. We
exercised our option to acquire WJSU on September 14, 1999 and completed the
acquisition on March 22, 2000. We also own a low power television station
licensed to Birmingham, Alabama (WBMA).

      We serve the Birmingham market by simultaneously transmitting identical
programming from our studio in Birmingham over WCFT, WJSU and WBMA. The stations
are listed on a combined basis by Nielsen as WBMA+. TV Alabama maintains studio
facilities in Birmingham for the operation of the stations. We have retained a
news and sales presence in both Tuscaloosa and Anniston, while at the same time
maintaining our primary news and sales presence in Birmingham. The ABC network
affiliation is based upon carriage on both WCFT and WJSU and expires on December
31, 2012. The FCC licenses for the three stations expire on April 1, 2005. An
application for license renewal has been filed. In October 1998, Nielsen
collapsed the Tuscaloosa DMA and the Anniston DMA into the Birmingham DMA
creating the 40th largest DMA with approximately 717,000 television households.
The Birmingham DMA is served by six commercial television stations.

   WHTM:    Harrisburg-Lancaster-York-Lebanon, Pennsylvania

      Acquired by us in 1996, WHTM is an ABC network affiliate pursuant to an
affiliation agreement that expires on December 31, 2012. The station's FCC
license expires August 1, 2007. The Harrisburg-Lancaster-York-Lebanon market,
which consists of ten contiguous counties located in central Pennsylvania, is
the 42nd largest DMA, reaching approximately 703,000 television households.
Harrisburg is the capital of Pennsylvania, and the government represents the
area's largest employer. The Harrisburg market is served by five commercial
television stations, one of which is a VHF station.

   KATV:    Little Rock, Arkansas

      Acquired by us in 1983, KATV is an ABC network affiliate pursuant to an
affiliation agreement that expires on December 31, 2012. The station's FCC
license expires on June 1, 2005. The Little Rock market is the 57th largest DMA,
with approximately 532,000 television households. The Little Rock market has a
diversified economy, serving as the seat of both state and local government and
as home to numerous commercial businesses. The Little Rock market is served by
five commercial television stations.

                                       9
<PAGE>

      Capitalizing on its exclusive rights to the University of Arkansas
basketball and football schedules through the year 2005, KATV launched ARSN in
Fiscal 1994 by entering into programming sublicense agreements with a network of
60 radio stations in three states. Certain broadcast television, cable
pay-per-view and home video rights are also controlled by ARSN.

   KTUL:    Tulsa, Oklahoma

      Acquired by us in 1983, KTUL is an ABC network affiliate pursuant to an
affiliation agreement that expires on December 31, 2012. The station's FCC
license expires on June 1, 2006. Tulsa, Oklahoma is the 60th largest DMA, with
approximately 511,000 television households. The Tulsa market is served by six
commercial television stations.

   WSET:    Roanoke-Lynchburg, Virginia

      Acquired by us in 1996, WSET has been indirectly owned and operated by Joe
L. Allbritton since 1976. The station is an ABC network affiliate pursuant to an
affiliation agreement that expires on December 31, 2012. WSET's FCC license
expired on October 1, 2004. An application for license renewal is pending. The
hyphenated central Virginia market comprised of Lynchburg, Roanoke and Danville
is the 67th largest DMA, with approximately 446,000 television households. The
Lynchburg DMA is served by four commercial television stations.

   WCIV:    Charleston, South Carolina

      Acquired by us in 1996, WCIV has been indirectly owned and operated by Joe
L. Allbritton since 1976. The station is an ABC affiliate pursuant to an
affiliation agreement that expires on December 31, 2012. WCIV's FCC license
expired on December 1, 2004. An application for license renewal is pending.
Charleston, South Carolina is the 101st largest DMA, with approximately 283,000
television households. The Charleston DMA is served by five commercial
television stations.


Network Affiliation Agreements and Relationship

      Each of our stations is an ABC affiliate with affiliation agreements that
expire on December 31, 2012. ABC has routinely renewed the affiliation
agreements with our stations; however, we cannot assure you that these
affiliation agreements will be renewed in the future or under the same general
terms. As one of the largest group owners of ABC network affiliates in the
nation, we believe that we enjoy excellent relations with the ABC network.

      Generally, each affiliation agreement provides our stations with the right
to broadcast programs transmitted by the network that includes designated
advertising time, the revenue from which the network retains. For every hour or
fraction thereof that the station elects to broadcast network programming, the
network pays the station compensation, as specified in each affiliation
agreement, or as agreed upon by the network and the stations. Typically,
prime-time programming generates the highest hourly rates.

                                       10
<PAGE>

      Related to the network's acquisition of National Football League ("NFL")
programming rights, effective August 11, 1999, our previous network affiliation
agreements with ABC were amended. Under the amendments, ABC, for a three-year
period, provided our stations with additional prime-time inventory, limited
participation rights in a new cable television "soap" channel, and enhanced
program exclusivity and commercial inventory guarantees in exchange for reduced
annual network compensation, the return of certain Saturday morning inventory
from the stations, and more flexibility in repurposing of ABC programming. Upon
the July 31, 2002 expiration of this amendment, compensation rates and inventory
allocations reverted to their pre-modification levels. We are in discussions
with the network regarding participation in the current NFL programming rights
arrangement with similar terms as those discussed above.

Competition

      Competition in the television industry, including each of the market areas
in which our stations compete, takes place on several levels: competition for
audience, competition for programming (including news) and competition for
advertisers. Additional factors material to a television station's competitive
position include signal coverage and assigned frequency. The television
broadcasting industry is continually faced with technological change and
innovation, the possible rise or fall in popularity of competing entertainment
and communications media and actions of federal regulatory bodies, including the
FCC, any of which could possibly have a material adverse effect on our
operations.

      Audience: Stations compete for audience on the basis of program
popularity, which has a direct effect on advertising rates. A substantial
portion of the daily programming at our stations is supplied by ABC. In those
periods, the stations are totally dependent upon the performance of the ABC
network programs in attracting viewers. Non-network time periods are programmed
by the station with a combination of self-produced news, public affairs and
entertainment programming, including news and syndicated programs purchased for
cash, cash and barter or barter-only. Minor network stations, the number of
which has increased significantly over the past decade, have also emerged as
viable competitors for television viewership share, particularly as the result
of the availability of first-run major network-quality programming.

      The development of methods of television transmission other than
over-the-air broadcasting and, in particular, the growth of cable television and
DBS have significantly altered competition for audience share in the television
industry. These alternative transmission methods can increase competition for a
broadcasting station both by bringing into its market area distant broadcasting
signals not otherwise available to the station's audience and by serving as a
distribution system for programming originated on the cable or DBS systems.
Although historically cable operators have not sought to compete with broadcast
stations for a share of the local news audience, cable operators have made
recent inroads to this market as well, particularly in the area of local sports
channels. Increased competition for local audiences could have an adverse effect
on our advertising revenues.

      Other sources of competition include home entertainment systems (including
video cassette recorder and DVD playback systems, videodiscs and television game
devices), multipoint distribution systems, multichannel multipoint distribution
systems, wireless cable, satellite

                                       11
<PAGE>

master antenna television systems and some low-power services. Our television
stations also face competition from high-powered DBS services, such as DirecTV
and Echostar, which transmit programming directly to homes equipped with special
receiving antennas. Local broadcast stations themselves may now use excess
capacity in their digital television allocation to "multicast" discrete program
offerings within the base channel. Programming alternatives, especially news,
available on the Internet also provide non-broadcast alternatives available to
the potential broadcast television audience.

      Further advances in technology may increase competition for household
audiences and advertisers. Video compression techniques now under development
for use with current cable channels, internet-relayed video and direct broadcast
satellites, are expected to reduce the bandwidth required for television signal
transmission. These compression techniques, as well as other technological
developments, are applicable to all video delivery systems, including
over-the-air broadcasting, and have the potential to provide vastly expanded
programming to highly targeted audiences. Reduction in the cost of creating
additional channel capacity could lower entry barriers for new channels and
encourage the development of increasingly specialized niche programming. This
ability to reach very defined audiences is expected to alter the competitive
dynamics for advertising expenditures. We are unable to predict the effect that
technological changes will have on the broadcast television industry or the
future results of our operations.

      Programming: Competition for programming involves negotiating with
national program distributors or syndicators which sell first-run and rerun
packages of programming. Our stations compete against in-market broadcast
station competitors for off-network reruns (such as "Frasier") and first-run
products (such as "The Oprah Winfrey Show") for exclusive access to those
programs. Cable systems generally do not compete with local stations for
programming; however, local cable operators are increasingly consolidating
ownership of systems within various markets, enabling them to bid on local
sports programming in competition with traditional broadcasters. In addition,
various national cable networks from time to time have acquired programs that
would have otherwise been offered to local television stations. Competition for
exclusive news stories and features is also endemic to the television industry.

      Advertising: Advertising rates are set based upon a variety of factors,
including the size and demographic makeup of the market served by the station, a
program's popularity among viewers whom an advertiser wishes to attract, the
number of advertisers competing for the available time, the availability of
alternative advertising media in the market area, a station's overall ability to
attract viewers in its market area and the station's ability to attract viewers
among particular demographic groups that an advertiser may be targeting.
Advertising rates are also affected by an aggressive and knowledgeable sales
force and the development of projects, features and programs that tie advertiser
messages to programming. Our television stations compete for local and national
advertising revenues with other television stations in their respective markets
as well as with other advertising media, such as newspapers, radio, magazines,
outdoor advertising, transit advertising, yellow page directories, direct mail
and local cable systems. Competition for advertising dollars in the broadcasting
industry occurs primarily in individual market areas. Generally, a broadcast
television station in one market does not compete with stations in other market
areas. Our television stations are located in highly competitive market areas.

                                       12
<PAGE>

Legislation and Regulation

      The ownership, operation and sale of television stations are subject to
the jurisdiction of the FCC under the Communications Act of 1934 (the
"Communications Act"). Matters subject to FCC oversight include the assignment
of frequency bands for broadcast television; the approval of a television
station's frequency, location and operating power; the issuance, renewal,
revocation or modification of a television station's FCC license; the approval
of changes in the ownership or control of a television station's licensee; the
regulation of equipment used by television stations; and the adoption and
implementation of regulations and policies concerning the ownership, operation,
programming and employment practices of television stations. The FCC has the
power to impose penalties, including fines or license revocations, upon a
licensee of a television station for violations of the FCC's rules and
regulations.

      The following is a brief summary of certain provisions of the
Communications Act and of specific FCC regulations and policies affecting
broadcast television. Reference should be made to the Communications Act, FCC
rules and the public notices and rulings of the FCC for further information
concerning the nature and extent of FCC regulation of broadcast television
stations.

      License Renewal: Broadcast television licenses are generally granted for
maximum terms of eight years. The main licenses are supported by various
"auxiliary" licenses for point-to-point microwave, remote location electronic
newsgathering and program distribution between the studio and transmitter
locations. License terms are subject to renewal upon application to the FCC, but
they may be renewed for a shorter period upon a finding by the FCC that the
"public interest, convenience and necessity" would be served thereby. Under the
Telecommunications Act of 1996 (the "Telecommunications Act"), the FCC must
grant a renewal application if it finds that the station has served the public
interest, there have been no serious violations of the Communications Act or FCC
rules, and there have been no other violations of the Communications Act or FCC
rules by the licensee that, taken together, would constitute a pattern of abuse.
If the licensee fails to meet these requirements, the FCC may either deny the
license or grant it on terms and conditions as are appropriate after notice and
opportunity for hearing.

      In the vast majority of cases, television broadcast licenses are renewed
by the FCC even when petitions to deny or competing applications are filed
against broadcast license renewal applications. However, we cannot assure that
each of our broadcast licenses will be renewed in the future. License renewal
applications are pending for the following stations: WJLA, WSET, WCIV and
WCFT/WJSU. These stations continue to operate under their expired licenses until
the FCC takes action on the renewal applications. The licenses for KATV, KTUL
and WHTM were renewed for full terms and are currently in effect.

      The FCC licenses for WJLA expired on October 1, 2004. A petition to deny
the application for renewal was filed by Theodore M. White alleging that
principals of the licensee do not have the requisite "character qualifications"
to operate the station based upon non-broadcast activities at the Riggs Bank
N.A., in which identified principals have an ownership, operation and control
interest. Opposition pleadings have been submitted categorically stating that
these unadjudicated, non-broadcast allegations do not even minimally meet the
standards for non-

                                       13
<PAGE>

renewal of FCC licenses. The application remains pending and the station
continues to operate under its expired license.

      Programming and Operation: The Communications Act requires broadcasters to
serve the "public interest." Since the late 1970s, the FCC gradually has relaxed
or eliminated many of the more formalized procedures it had developed to promote
the broadcast of certain types of programming responsive to the needs of a
station's community of license. However, broadcast station licensees must
continue to present programming that is responsive to local community problems,
needs and interests and to maintain certain records demonstrating such
responsiveness. Complaints from viewers concerning a station's programming often
will be considered by the FCC when it evaluates license renewal applications,
although such complaints may be filed at any time and generally may be
considered by the FCC at any time. Stations also must follow various FCC rules
that regulate, among other things, political advertising, sponsorship
identifications, the advertisements of contests and lotteries, obscene and
indecent broadcasts and technical operations, including limits on radio
frequency radiation. The FCC also has adopted rules that place additional
obligations on television station operators for closed-captioning of programming
for the hearing impaired, equal employment opportunity obligations, maximum
amounts of advertising and minimum amounts of programming specifically targeted
for children and special obligations relating to political candidate
advertising, as well as additional public information and reporting
requirements.

      Digital Television: The FCC has adopted rules for implementing digital
(including high-definition) television service in the United States.
Implementation of DTV is intended to improve the technical quality of
television. Under certain circumstances, however, conversion to DTV operations
may reduce a station's geographical coverage area. The FCC has allotted a second
broadcast channel to each full-power commercial television station for DTV
operation. The FCC's DTV allotment plan is based on the use of a "core" DTV
spectrum between channels 2 and 51. Under the FCC's rules, stations will be
required to phase-in their DTV operations on the second channel over a
transition period and to surrender their non-DTV channel later. This period is
designed to facilitate the supply of television receivers and cable demodulation
boxes that will operate with the new DTV frequencies. The FCC has adopted
standards for the transmission of DTV signals. These standards will serve as the
basis for the phased conversion to digital transmission.

      Our stations have been assigned the following digital channel allocations
by the FCC: WJLA-39, WCFT-5, WJSU-9, WHTM-10, KATV-22, KTUL-10, WSET-34 and
WCIV-34. All of these stations are currently operating on their assigned DTV
channels except WJSU, which is under construction. We anticipate that
implementation of DTV service will be completed at WJSU by April 2005.

      Three stations, KATV, WSET and WCIV, are operating pursuant to special
temporary authority at lower power. The FCC has established new criteria
requiring KATV and WSET to begin broadcasting at full power by July 2005 and
WCIV by July 2006. Certain additional equipment will be required to be purchased
for these stations to reach full power.


                                       14
<PAGE>
      Implementation of DTV service has imposed substantial additional costs on
television stations providing the new service because of the need to purchase
additional equipment and because some stations need to operate at higher utility
costs. The industry-wide transition from analog to digital delivery has
currently yielded only limited opportunities to generate incremental revenue
from the DTV service and is currently available to only a very small percentage
of television viewers who have purchased the corresponding in-home equipment.
Accordingly, we cannot assure you that our television stations will be able to
increase revenue to offset such costs. We are unable to predict what future
actions the FCC might take with respect to DTV service, nor can we predict the
effect of the FCC's present DTV implementation plan or such future actions on
our business. We are unable to predict the extent or timing of future consumer
demand for such DTV services.

      Ownership Matters: The Communications Act, in conjunction with various
antitrust statutes, contains restrictions on the ownership and control of
broadcast licenses. Together with the FCC's rules, those laws place limitations
on alien ownership; common ownership of television, radio and newspaper
properties; and ownership by those persons not having the requisite "character"
qualifications and those persons holding "attributable" interests in the
license.

      On June 2, 2003, the FCC approved modifications to several of its media
ownership rules. Under the FCC's order, the national limits on the number of
stations that can be commonly owned was increased and restrictions on common
ownership of local television, radio and newspapers were relaxed in certain
markets under certain circumstances. Additional flexibility would be available
to allow owners of media properties, including ACC, to acquire additional media
outlets in some circumstances not previously permitted, if they so choose. The
U.S. Court of Appeals, however, reversed and remanded these rules to the FCC for
additional justification. That decision is likely to be appealed to the U.S.
Supreme Court. The FCC continues to operate under the prior rules in the
interim.

      Prior FCC rules governing national ownership limits generally permitted
ownership of attributable interests in stations reaching 35% of the nation's
television households; however, the FCC's June 2003 rule modifications would
have increased the limit to 45%. In January 2004, Congress passed a bill setting
the national ownership limit at 39% of the nation's television households. The
rules governing local ownership generally permitted a single entity to have an
attributable interest in no more than two television stations that serve the
same DMA under limited circumstances. Similar restrictions limited the number of
radio stations that could be co-owned with a television station in a market as
well as common newspaper/broadcast station ownership.

      An individual or entity that acquires an attributable interest in ACC may
violate the FCC's ownership rules if that acquirer also has an attributable
interest in other television or radio stations, or daily newspapers, depending
on the number and location of those radio or television stations, or daily
newspapers. Such an acquirer also may be restricted in the companies in which it
may invest, to the extent that those investments give rise to an attributable
interest. If an individual or entity with an attributable interest in ACC
violates any of these ownership rules, we may be unable to obtain from the FCC
the authorizations needed to conduct our television station

                                       15
<PAGE>


business, may be unable to obtain FCC consents for certain future acquisitions,
may be unable to obtain renewals of our licenses and may be subject to other
material adverse consequences.

      Additional Competition in the Video Services Industry: The
Telecommunications Act also eliminates the overall ban on telephone companies
offering video services and permits the ownership of cable television companies
by telephone companies in their service areas (or vice versa) in certain
circumstances. Telephone companies providing such video services will be
regulated according to the transmission technology they use. The
Telecommunications Act also permits telephone companies to hold an ownership
interest in the programming carried over such systems. Although we cannot
predict the effect of the removal of these barriers to telephone company
participation in the video services industry, it may have the effect of
increasing competition in the television broadcast industry in which we operate.

      Other Legislation: The foregoing does not purport to be a complete summary
of all the provisions of the Telecommunications Act, the Communications Act or
of the regulations and policies of the FCC thereunder. Congress and the FCC have
under consideration, and in the future may consider and adopt, (i) other changes
to existing laws, regulations and policies or (ii) new laws, regulations and
policies regarding a wide variety of matters that could affect, directly or
indirectly, the operation, ownership and profitability of our broadcast
stations. Also, certain of the foregoing matters are now, or may become, the
subject of litigation, and we cannot predict the outcome of any such litigation
or the impact on our business.

Employees

      As of September 30, 2004, we employed in full and part-time positions 936
persons, including 252 at WJLA/NewsChannel 8, 142 at KATV, 131 at KTUL, 110 at
WHTM, 108 at WBMA/WCFT/WJSU, 100 at WSET, 81 at WCIV and 12 in our corporate
office. Of the employees at WJLA/NewsChannel 8, 121 are represented by one of
three unions: the American Federation of Television and Radio Artists ("AFTRA"),
the Directors Guild of America ("DGA") or the National Association of Broadcast
Employees and Technicians/Communications Workers of America ("NABET/CWA"). The
NABET/CWA collective bargaining agreement expires January 31, 2005. The AFTRA
collective bargaining agreement expires September 30, 2006. The DGA collective
bargaining agreement expired January 16, 2000. Subsequent to the integration of
WJLA and NewsChannel 8, the National Labor Relations Board ("NLRB") conducted an
election in which the combined directors of WJLA and NewsChannel 8 elected
representation by DGA. The parties have been in negotiations for a collective
bargaining agreement for the new unit. No employees of our other owned stations
are represented by unions. We believe our relations with our employees are
satisfactory.


                                       16
<PAGE>


                               ITEM 2. PROPERTIES

      We maintain our corporate headquarters in Washington, D.C., occupying
leased office space of approximately 9,300 square feet.

      The types of properties required to support each of the stations include
offices, studios, transmitter sites and antenna sites. The stations' studios are
co-located with their office space while transmitter sites and antenna sites are
generally located away from the studios in locations determined to provide
maximum market signal coverage.

      The following table describes the general characteristics of our principal
real property:


                                       17
<PAGE>

<TABLE>
<CAPTION>

                                                                                                        Lease
                                                                                                     Expiration
Facility                  Market/Use                      Ownership        Approximate Size             Date
--------                  ----------                      ---------        ----------------             ----
<S>                       <C>                             <C>              <C>                         <C>
WJLA/NewsChannel 8        Rosslyn, VA
                          Office/Studio                   Leased           79,870 sq. ft.              6/30/17

                          Prince Georges, MD
                          Tower - Weather                 Leased           1 acre                      3/31/06

                          Washington, D.C.
                          Tower/Transmitter               Joint Venture    108,000 sq. ft.               N/A

WHTM                      Harrisburg, PA
                          Office/Studio                   Owned            14,000 sq. ft.                N/A
                          Adjacent Land                   Owned            59,337 sq. ft.                N/A
                          Tower/Transmitter               Owned            2,801 sq. ft.                 N/A

                          York, PA
                          Office/Studio                   Leased           1,200 sq. ft.               7/01/06

KATV                      Little Rock, AR
                          Office/Studio                   Owned            20,500 sq. ft.                N/A
                          Office/Studio                   Leased           1,500 sq. ft.               1/31/06
                          Office/Studio                   Leased           1,570 sq. ft.                8/8/07
                          Tower/Transmitter               Owned            188 acres                     N/A
                          Annex/Garage                    Owned            67,400 sq. ft.                N/A

KTUL                      Tulsa, OK
                          Office/Studio                   Owned            13,520 sq. ft.                N/A
                          Tower/Transmitter               Owned            160 acres                     N/A
                          Tower - Cushing                 Leased           1 acre                      6/30/05

WSET                      Lynchburg, VA
                          Office/Studio                   Owned            15,500 sq. ft.                N/A
                          Tower/Transmitter               Owned            2,700 sq. ft.                 N/A

                          Danville, VA
                          Office/Studio                   Leased           2,150 sq. ft.               2/29/06

WCIV                      Mt. Pleasant, SC
                          Office/Studio                   Owned            21,700 sq. ft.                N/A
                          Tower/Transmitter               Leased           2,000 sq. ft.               8/31/06

WBMA/WCFT/WJSU            Birmingham, AL
                          Office/Studio/Dish Farm         Leased           26,357 sq. ft./0.5 acre     9/30/06
                          Tower/Relay-Pelham              Leased           .08 acres                   10/31/06
                          Tower/Relay-Red Mtn.            Owned            .21 acres                     N/A

                          Tuscaloosa, AL
                          Office/Studio                   Owned            9,475 sq. ft.                 N/A
                          Tower-Tuscaloosa                Owned            10.5 acres                    N/A
                          Tower-AmSouth                   Leased           134.3 acres                 4/30/06

                          Anniston, AL
                          Office/Studio                   Leased           6,100 sq. ft.                4/1/11
                          Tower-Blue Mtn.                 Owned            1.7 acres                     N/A
                          Tower-Bald Rock                 Leased           1 acre                      8/29/16
</TABLE>

                                       18
<PAGE>


                            ITEM 3. LEGAL PROCEEDINGS

      We currently and from time to time are involved in litigation incidental
to the conduct of our business, including suits based on defamation and
employment activity. We are not currently a party to any lawsuit or proceeding
which, in our opinion, if decided adverse to us, would be likely to have a
material adverse effect on our consolidated financial condition, results of
operations or cash flows.


           ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      Not Applicable.



                                     PART II

 ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
                      ISSUER PURCHASES OF EQUITY SECURITIES

      Not Applicable.


                                       19
<PAGE>

                  ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA
                             (dollars in thousands)

      The selected consolidated financial data for the fiscal years ended
September 30, 2000, 2001, 2002, 2003 and 2004 are derived from our consolidated
financial statements. The information in this table should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and our consolidated financial statements and the
notes thereto included elsewhere herein. Please note that the data below reflect
the combined results for the Company and Allnewsco for all of the periods
presented. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations--General Factors Affecting Our Business."
<TABLE>
<CAPTION>

                                                                                Fiscal Year Ended September 30,
                                                                 ------------------------------------------------------------

                                                                 2000          2001          2002          2003          2004
                                                                 ----          ----          ----          ----          ----
Statement of Operations Data:
<S>                                                          <C>           <C>           <C>           <C>           <C>
Operating revenues, net..................................    $ 216,495     $ 202,541     $ 196,169     $ 202,590     $ 203,270
Television operating expenses, excluding depreciation and
   amortization..........................................      124,727       124,597       126,001       125,224       127,586
Depreciation and amortization<F1>........................       16,624        15,045        13,310        10,785         9,908
Corporate expenses.......................................        4,873         5,641         6,004         6,379         4,908
Operating income.........................................       70,271        57,258        50,854        60,202        60,868
Interest expense.........................................       42,212        41,682        41,561        40,647        36,759
Interest expense-related party...........................        3,891         4,064           785            --            --
Interest income..........................................          331           321            94           343            24
Interest income-related party............................          303           213            92            88           162
Loss on early repayment of debt..........................           --            --            --        23,194            --
Income (loss) before cumulative effect of change in
   accounting principle..................................       12,811         6,354         3,514        (2,951)       13,581
Cumulative effect of change in accounting principle<F1>..           --            --            --         2,973            --
Net income (loss)........................................       12,811         6,354         3,514        (5,924)       13,581


                                                                                      As of September 30,
                                                                 ------------------------------------------------------------
                                                                 2000          2001          2002          2003          2004
                                                                 ----          ----          ----          ----          ----
Balance Sheet Data:
Total assets.............................................    $ 273,645     $ 258,610     $ 268,994     $ 262,010     $ 253,978
Total debt<F2>...........................................      427,729       426,860       440,443       467,688       465,675
Stockholder's investment.................................     (234,163)     (230,817)     (247,073)     (275,800)     (281,176)


                                                                                Fiscal Year Ended September 30,
                                                                 ------------------------------------------------------------
                                                                 2000          2001          2002          2003          2004
                                                                 ----          ----          ----          ----          ----
Cash Flow Data<F3>:
Cash flow from operating activities......................    $  30,626     $  25,156     $  28,020     $  23,938     $  30,959
Cash flow from investing activities......................       (8,466)       (5,782)      (46,458)       (7,634)       (5,712)
Cash flow from financing activities......................      (24,666)      (23,626)       16,908       (19,325)      (21,268)

Financial Ratios and Other Data:
Operating income margin..................................         32.5%         28.3%         25.9%         29.7%         29.9%
Operating Cash Flow<F4>..................................    $  86,895     $  72,303     $  64,164     $  70,987     $  70,776
Operating Cash Flow Margin<F5>...........................         40.1%         35.7%         32.7%         35.0%         34.8%
Capital expenditures.....................................        5,167         6,560        26,332         7,700         5,816

                                                                                               (Footnotes on following page)

                                       20
<PAGE>

<FN>
Footnotes

<F1> As required by generally accepted accounting principles ("GAAP"), effective
     October 1, 2002 we changed our method of accounting for intangible assets.
     As a result, we ceased amortization of our broadcast license intangible
     assets effective October 1, 2002. In addition, we recorded a non-cash,
     after-tax impairment charge of $2,973 relating to the carrying value of our
     broadcast licenses. See "Consolidated Financial Statements--Notes to
     Consolidated Financial Statements--Note 5." The following table adjusts
     reported depreciation and amortization for each year prior to the adoption
     of Statement of Financial Accounting Standards ("SFAS") No. 142 to exclude
     amortization of our broadcast license intangible assets:

                                                                  Fiscal Year Ended September 30,
                                                                 --------------------------------
                                                                 2000          2001          2002
                                                                 ----          ----          ----
     Depreciation and amortization, as reported.........      $ 16,624      $ 15,045      $ 13,310
     Less:
     Amortization of broadcast licenses.................        (4,012)       (4,088)       (4,088)
                                                              --------      --------      --------
     Depreciation and amortization, adjusted for the
       adoption of SFAS No. 142.........................      $ 12,612      $ 10,957      $  9,222
                                                              ========      ========      ========


<F2> Total debt is defined as long-term debt (including the current portion
     thereof, and net of discount) and capital lease obligations.
<F3> Cash flows from operating, investing and financing activities were
     determined in accordance with GAAP. See "Consolidated Financial
     Statements--Consolidated Statements of Cash Flows."
<F4> We define "Operating Cash Flow" as operating income plus depreciation and
     amortization. Although Operating Cash Flow is not a measure of performance
     calculated in accordance with GAAP, we believe it is useful for investors
     in our debt securities and users of our financial statements in
     understanding our results of operations. Management believes that Operating
     Cash Flow is useful because it is widely used in the broadcasting industry
     as a measure of operating performance and is used by investors and by
     analysts who report on the performance of broadcast companies. Operating
     Cash Flow also is generally recognized as a tool in applying valuation
     methodologies for companies in the media industry. In addition, management
     closely monitors Operating Cash Flow in determining our ability to maintain
     compliance with certain financial covenants of our indebtedness.
     Nevertheless, you should not consider Operating Cash Flow in isolation from
     or as a substitute for operating income, net income, cash flow from
     operating activities and other operations or cash flow statement data
     prepared in accordance with GAAP, or as a measure of performance or
     liquidity prepared in accordance with GAAP. Moreover, because Operating
     Cash Flow is not a measure calculated in accordance with GAAP, this
     performance measure is not necessarily comparable to similarly titled
     measures employed by other companies.

                                       21
<PAGE>

     The following table provides a reconciliation of Operating Cash Flow (a
     non-GAAP financial measure) to operating income (as presented in our
     statements of operations):

                                                                     Fiscal Year Ended September 30,
                                                      ------------------------------------------------------------
                                                      2000          2001          2002          2003          2004
                                                      ----          ----          ----          ----          ----

     Operating income..........................    $ 70,271      $ 57,258      $ 50,854      $ 60,202      $ 60,868
     Add:
     Depreciation and amortization.............      16,624        15,045        13,310        10,785         9,908
                                                   --------      --------      --------      --------      --------

     Operating Cash Flow.......................    $ 86,895      $ 72,303      $ 64,164      $ 70,987      $ 70,776
                                                   ========      ========      ========      ========      ========


<F5> We define "Operating Cash Flow Margin" as Operating Cash Flow as a
percentage of operating revenues, net.
</FN>
</TABLE>

                                       22
<PAGE>

            ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                      CONDITION AND RESULTS OF OPERATIONS
                             (dollars in thousands)

General Factors Affecting Our Business

   The Company

      We own ABC network-affiliated television stations serving seven geographic
markets: WJLA in Washington, D.C.; WCFT in Tuscaloosa, Alabama, WJSU in
Anniston, Alabama and WBMA-LP, a low power television station licensed to
Birmingham, Alabama (we operate WCFT and WJSU in tandem with WBMA-LP serving the
viewers of the Birmingham, Tuscaloosa and Anniston market as a single
programming source); WHTM in Harrisburg, Pennsylvania; KATV in Little Rock,
Arkansas; KTUL in Tulsa, Oklahoma; WSET in Lynchburg, Virginia; and WCIV in
Charleston, South Carolina. We also provide 24-hour per day basic cable
television programming to the Washington, D.C. market, through NewsChannel 8,
primarily focused on regional and local news for the Washington, D.C.
metropolitan area. The operations of NewsChannel 8 are integrated with WJLA.

   Acquisitions and Basis of Financial Presentation

      On September 16, 2002, ACC completed its acquisition of certain of the
assets of Allnewsco, in exchange for $20,000 in cash and the cancellation of a
$20,000 note receivable from Allnewsco. The assets acquired consisted primarily
of cable affiliation agreements and certain technical equipment and vehicles
related to the operations of NewsChannel 8, which provides 24-hour per day basic
cable television programming primarily focused on regional and local news for
the Washington, D.C. metropolitan area. The operations of NewsChannel 8 were
integrated with those of WJLA in a new studio and office facility, creating the
first newsgathering duopoly in the Nation's Capital. Allnewsco has been
controlled since its inception by Perpetual, which also controls ACC. Because
both ACC and Allnewsco are controlled by Perpetual, ACC was required to account
for the acquisition as a transfer of assets within a group under common control.

      Under this accounting, the Company and Allnewsco were treated as if they
had always been combined for accounting and financial reporting purposes. As a
result, our consolidated financial statements for all periods prior to the asset
acquisition reflect the combined results of the Company and Allnewsco. In
addition to combining the separate historical results of the Company and
Allnewsco, the consolidated financial statements include all adjustments
necessary to conform accounting methods and presentation, to the extent they
were different, and to eliminate significant intercompany transactions. All
amounts for all periods presented, unless otherwise specified, in this
Management's Discussion and Analysis reflect the combined results of the Company
and Allnewsco.

      In addition, as ACC did not acquire all of the assets or assume all of the
liabilities of Allnewsco, certain expenses reported in the Fiscal 2002
consolidated financial statements have not been incurred by ACC subsequent to
the acquisition. Specifically, ACC did not acquire or

                                       23
<PAGE>

assume amounts due from Allnewsco to Perpetual. The accompanying consolidated
financial statements include $785 of related party interest expense incurred by
Allnewsco relating to amounts due from Allnewsco to Perpetual during the year
ended September 30, 2002. We have not incurred such related party interest
expense subsequent to the acquisition date of September 16, 2002. Accordingly,
no such related party interest expense was incurred during the years ended
September 30, 2003 or 2004.

   Business

      Our operating revenues are derived from local and national advertisers
and, to a much lesser extent, the ABC network and program syndicators for the
broadcast of programming, cable operators and DBS providers in the form of
subscriber fees, and other broadcast-related activities. The primary operating
expenses involved in owning and operating television stations are employee
compensation, programming, newsgathering, production, promotion and the
solicitation of advertising.

      Television stations receive revenues for advertising sold for placement
within and adjoining locally originated and network programming. Advertising
rates are set based upon a variety of factors, including the size and
demographic makeup of the market served by the station, a program's popularity
among viewers whom an advertiser wishes to attract, the number of advertisers
competing for the available time, the availability of alternative advertising
media in the market area, a station's overall ability to attract viewers in its
market area and the station's ability to attract viewers among particular
demographic groups that an advertiser may be targeting. Advertising rates are
also affected by an aggressive and knowledgeable sales force and the development
of projects, features and programs that tie advertiser messages to programming.

      Our advertising revenues are generally highest in the first and third
quarters of each fiscal year, due in part to increases in retail advertising in
the period leading up to and including the holiday season and active advertising
in the spring. The fluctuation in our operating results is generally related to
fluctuations in the revenue cycle. In addition, advertising revenues are
generally higher during election years due to spending by political candidates,
which is typically heaviest during our first and fourth fiscal quarters. During
years in which Olympic Games are held, there is additional demand for
advertising time and, as a result, increased advertising revenue associated with
Olympic broadcasts. The 2002 Winter Olympic Games and 2004 Summer Olympic Games
were broadcast by NBC in February 2002 and August 2004, respectively, in
connection with NBC's United States television rights to the Olympic Games,
which extend through 2012.

      Our cash flow from operations is also affected on a quarterly basis by the
timing of cash collections and interest payments on our debt. Cash receipts are
usually greater during the second and fourth fiscal quarters, as the collection
of advertising revenue typically lags the period in which such revenue is
recorded. Scheduled semi-annual interest payments on our long-term fixed
interest rate debt have been higher during the first and third fiscal quarters,
and as a result of the redemption of our 8 7/8% senior subordinated notes during
the second quarter of Fiscal 2003, now occurs only in such quarters. As a
result, our cash flows from operating activities as reflected in our
consolidated financial statements are generally significantly higher during our

                                       24
<PAGE>

second and fourth fiscal quarters, and such quarters comprise a substantial
majority of our cash flow from operating activities for the full fiscal year.

      The broadcast television industry is cyclical in nature, being affected by
prevailing economic conditions. Because we rely on sales of advertising time for
substantially all of our revenues, our operating results are sensitive to
general economic conditions and regional conditions in each of the local market
areas in which our stations operate. For Fiscal 2002, 2003 and 2004, the
Washington, D.C. advertising market accounted for approximately one-half of our
total revenues. As a result, our results of operations are highly dependent on
WJLA/NewsChannel 8 and, in turn, the Washington, D.C. economy and, to a lesser
extent, on each of the other local economies in which our stations operate. We
are also dependent on automotive- related advertising. Approximately 28% of our
total broadcast revenues for each of the years ended September 30, 2002, 2003
and 2004 consisted of automotive-related advertising. A significant decrease in
such advertising in the future could materially and adversely affect our
operating results.

   Fiscal 2003 Financing Transactions

      On December 20, 2002, we issued $275,000 principal amount of 7 3/4% senior
subordinated notes at par. As of January 21, 2003, we had used the net proceeds
from the offering, together with approximately $15,500 of borrowings under our
senior credit facility, to purchase and redeem all of our outstanding 9 3/4%
senior subordinated debentures as well as to pay the fees and expenses
associated with the offering of the 7 3/4% notes.

       On February 6, 2003, we issued an additional $180,000 principal amount of
our 7 3/4% notes at a price of 98.305%. We used the net proceeds to redeem our
existing 8 7/8% senior subordinated notes, fund the redemption premium for the
8 7/8% notes, pay the fees and expenses associated with the offering of the
additional 7 3/4% notes and repay borrowings outstanding under our senior credit
facility. On March 10, 2003, all of the 8 7/8% notes were redeemed.

      As a result of the purchase and redemption of our 9 3/4% debentures and
the redemption of the 8 7/8% notes, we recorded a pre-tax charge of $23,194
during the quarter ended March 31, 2003. Such charge was reflected as a
nonoperating expense during Fiscal 2003. See "--Results of Operations--Fiscal
2004 Compared to Fiscal 2003--Loss on Early Repayment of Debt."

      On February 14, 2003, we commenced a registered exchange offer of a new
series of 7 3/4% notes in exchange for the initial series of 7 3/4% notes issued
December 20, 2002 and consummated the exchange offer following its expiration on
March 17, 2003 by issuing the new series of notes in exchange for notes of the
initial series properly tendered. On June 17, 2003, we commenced a registered
exchange offer of the same new series of 7 3/4% notes in exchange for the
initial series of 7 3/4% notes issued February 6, 2003 and consummated the
exchange offer following its expiration on July 16, 2003 by issuing such new
series of notes in exchange for notes of the initial series properly tendered.
The terms of the exchange notes are substantially identical to those of the
initial notes in each case, except that transfer restrictions and registration
rights relating to the initial notes do not apply to the exchange notes.

                                       25
<PAGE>

Operating Revenues

      The following table depicts the principal types of operating revenues, net
of agency commissions, earned by us during each of the last three fiscal years
and the percentage contribution of each to our total broadcast revenues, before
fees.
<TABLE>
<CAPTION>

                                                             Fiscal Year Ended September 30,
                                            -----------------------------------------------------------------------
                                                    2002                     2003                      2004
                                            -------------------      --------------------      --------------------
                                            Dollars     Percent      Dollars      Percent      Dollars      Percent
                                            -------     -------      -------      -------      -------      -------
<S>                                       <C>           <C>        <C>            <C>        <C>            <C>
Local and national<F1>................    $ 173,909      86.1%     $ 176,195       84.9%     $ 179,385       86.2%
Political<F2>.........................        7,371       3.7%         8,635        4.1%         5,054        2.4%
Network compensation<F3>..............        3,700       1.8%         5,747        2.8%         5,706        2.8%
Trade and barter<F4>..................        7,307       3.6%         7,010        3.4%         6,709        3.2%
Other revenues<F5>....................        9,604       4.8%        10,011        4.8%        11,253        5.4%
                                          ---------     -----      ---------      -----      ---------      -----

Broadcast revenues....................      201,891     100.0%       207,598      100.0%       208,107      100.0%
                                                        =====                     =====                     =====
Fees<F6>..............................       (5,722)                  (5,008)                   (4,837)
                                          ---------                ---------                 ---------

Operating revenues, net...............    $ 196,169                $ 202,590                 $ 203,270
                                          =========                =========                 =========

<FN>
_____________
<F1> Represents sale of advertising time to local and national advertisers,
     either directly or through agencies representing such advertisers, net of
     agency commission.
<F2> Represents sale of advertising time to political advertisers.
<F3> Represents payment by networks for broadcasting or promoting network
     programming.
<F4> Represents value of commercial time exchanged for goods and services
     (trade) or syndicated programs (barter).
<F5> Represents other revenue, principally from cable and DBS subscriber fees,
     the sales of University of Arkansas sports programming to advertisers and
     radio stations as well as receipts from tower rental and production of
     commercials.
<F6> Represents fees paid to national sales representatives and fees paid for
     music licenses.
</FN>
</TABLE>


      Local and national advertising constitutes our largest category of
operating revenues, representing approximately 85% of our total broadcast
revenues in each of the last three fiscal years. Local and national advertising
revenues decreased 3.4% in Fiscal 2002, and increased 1.3% and 1.8% in Fiscal
2003 and 2004, respectively. Each other individual category of revenues
represented 5% or less of our total revenues for each of the last three fiscal
years.

                                       26
<PAGE>


Results of Operations--Fiscal 2004 Compared to Fiscal 2003

      Set forth below are selected consolidated financial data for Fiscal 2003
and 2004, respectively, and the percentage change between the years.

<TABLE>
<CAPTION>

                                                                      Fiscal Year Ended        Percentage
                                                                        September 30,            Change
                                                                     -------------------       ----------
                                                                     2003           2004
                                                                     ----           ----
<S>                                                              <C>            <C>              <C>
Operating revenues, net......................................    $ 202,590      $ 203,270          0.3%
Total operating expenses.....................................      142,388        142,402          0.0%
                                                                 ---------      ---------

Operating income.............................................       60,202         60,868          1.1%
Nonoperating expenses, net...................................       64,574         37,955        (41.2)%
Income tax (benefit) provision...............................       (1,421)         9,332        756.7%
                                                                 ---------      ---------

(Loss) income before cumulative effect of change in
  accounting principle.......................................       (2,951)        13,581        560.2%
                                                                 ---------      ---------

Cumulative effect of change in accounting principle,
  net of income tax benefit..................................        2,973             --           --
                                                                 ---------      ---------

Net (loss) income............................................    $  (5,924)     $  13,581        329.3%
                                                                 =========      =========

Operating cash flow<F1>......................................    $  70,987      $  70,776         (0.3)%
                                                                 =========      =========

<FN>
_____________
<F1> Operating cash flow is not a measure of performance calculated in
     accordance with GAAP. For a definition of operating cash flow and a
     reconciliation of operating cash flow to operating income, please refer to
     footnote (4) under "Selected Consolidated Financial Data."
</FN>
</TABLE>


   Net Operating Revenues

      Net operating revenues for Fiscal 2004 totaled $203,270, an increase of
$680, or 0.3%, as compared to Fiscal 2003.

      Local and national advertising revenues increased $3,190, or 1.8%, from
Fiscal 2003. Local and national advertising revenues increased in a majority of
our markets during Fiscal 2004, reflecting increased demand among local and
national advertisers. Such increase also reflects the prior year displacement of
local and national advertisers during the peak political advertising month of
October 2002, partially offset by prior year revenue related to the broadcast of
the Super Bowl by the ABC network in January 2003 (broadcast by the CBS network
in 2004).

                                       27
<PAGE>

      Political advertising revenues decreased by $3,581, or 41.5%, in Fiscal
2004 from Fiscal 2003. This decrease was primarily due to several high-profile
local political races affecting our markets for the November 2002 elections,
which generated substantial revenue in the first quarter of Fiscal 2003 with no
comparable races or elections taking place during the first quarter of Fiscal
2004. This first quarter decrease was partially offset by increases during the
second, third and fourth quarters of Fiscal 2004 principally due to advertising
related to local primaries as well as advertising leading up to the November
2004 Presidential and local elections.

      No individual advertiser accounted for more than 5% of our broadcast
revenues during Fiscal 2004 or 2003.

   Total Operating Expenses

      Total operating expenses in Fiscal 2004 were $142,402, an increase of $14
compared to total operating expenses of $142,388 in Fiscal 2003. This net
increase consisted of an increase in television operating expenses, excluding
depreciation and amortization, of $2,362, a decrease in depreciation and
amortization of $877 and a decrease in corporate expenses of $1,471.

      Television operating expenses, excluding depreciation and amortization,
totaled $127,586 in Fiscal 2004, an increase of $2,362, or 1.9%, when compared
to television operating expenses of $125,224 in Fiscal 2003. This increase was
due primarily to an overall increase in our employee compensation and benefits
of 2.5%. Additionally, news-related promotional expenses at our Washington, D.C.
station increased $450 during Fiscal 2004 as compared to Fiscal 2003. The
overall increase in employee compensation and benefits resulted principally from
increased news personnel costs in Washington, D.C., increased health insurance
costs across the Company and increased sales commissions at a majority of our
stations.

      Depreciation and amortization expense of $9,908 in Fiscal 2004 decreased
$877, or 8.1%, from $10,785 in Fiscal 2003. This decrease was principally the
result of decreased depreciation associated with the new WJLA/NewsChannel 8
facility during its second full year of depreciation in Fiscal 2004.

      Corporate expenses in Fiscal 2004 decreased $1,471, or 23.1%, from Fiscal
2003. The decrease was primarily due to decreased key-man life insurance
expense.

   Operating Income

      Operating income of $60,868 in Fiscal 2004 increased $666, or 1.1%,
compared to operating income of $60,202 in Fiscal 2003. The operating income
margin in Fiscal 2004 increased to 29.9% from 29.7% for the prior fiscal year.

    Operating Cash Flow

      Operating cash flow decreased to $70,776 in Fiscal 2004 from $70,987 in
Fiscal 2003, a decrease of $211, or 0.3%. This decrease was primarily the result
of increased television operating expense, excluding depreciation and
amortization, partially offset by increased net

                                       28
<PAGE>

operating revenues and decreased corporate expenses, as discussed above.
Operating cash flow is not a measure of performance calculated in accordance
with GAAP. For a definition of operating cash flow and a reconciliation of
operating cash flow to operating income, please refer to footnote (4) under
"Selected Consolidated Financial Data."

   Nonoperating Expenses, Net

      Interest expense decreased by $3,888, or 9.6%, from $40,647 in Fiscal 2003
to $36,759 in Fiscal 2004. The average balance of debt outstanding, including
capital lease obligations, for Fiscal 2003 and 2004 was $498,867 and $471,619,
respectively, and the weighted average interest rate on debt during the year was
8.03% and 7.63%, respectively. The decrease in interest expense was primarily
the result of the reduced weighted average interest rate on debt due to the two
financing transactions during the first half of Fiscal 2003 as well as the
effect on the prior year of incremental interest expense incurred during the
first half of Fiscal 2003 associated with the financing transactions.
Incremental interest expense was incurred related to carrying both the 7 3/4%
notes and the 9 3/4% debentures from December 20, 2002 through January 21, 2003
during the redemption notice period as well as carrying both the 7 3/4% notes
and the 8 7/8% notes from February 6, 2003 through March 10, 2003 during the
redemption notice period.

      Had we purchased or redeemed the 9 3/4% debentures on December 20, 2002
and the 8 7/8% notes on February 6, 2003, interest expense for Fiscal 2003 would
have been $38,087, resulting in a decrease of $1,328, or 3.5%, from Fiscal 2003
to Fiscal 2004. This primarily reflects the lower weighted average interest rate
on debt during Fiscal 2004. The average balance of debt outstanding, including
capital lease obligations, for Fiscal 2003 would have been $470,186, and the
weighted average interest rate on debt during Fiscal 2003 would have been 7.95%.

   Loss on Early Repayment of Debt

      As a result of the purchase and redemption of our 9 3/4% debentures and
the redemption of our 8 7/8% notes during the second quarter of Fiscal 2003, we
recorded a pre-tax charge of $23,194. Such charge has been reflected as a
nonoperating expense rather than as an extraordinary item in accordance with our
adoption of SFAS No. 145, "Rescission of FASB Statements Nos. 4, 44 and 64,
Amendment of FASB Statement No. 13 and Technical Corrections," which became
effective during our Fiscal 2003. SFAS No. 145 generally requires any gains or
losses associated with early extinguishments of debt be recorded as a component
of income from continuing operations rather than as an extraordinary item.

   Income Taxes

      The provision for income taxes in Fiscal 2004 totaled $9,332, an increase
of $10,753 when compared to the benefit from income taxes of $1,421 in Fiscal
2003. The increase in income tax expense during Fiscal 2004 was primarily due to
the $23,194 loss on early repayment of debt during the prior fiscal year.

                                       29
<PAGE>

   Cumulative Effect of Change in Accounting Principle

      Effective October 1, 2002, we adopted SFAS No. 142, "Goodwill and Other
Intangible Assets." SFAS No. 142 addresses the financial accounting and
reporting for acquired goodwill and other intangible assets. Under the new
rules, goodwill and intangible assets deemed to have indefinite lives are no
longer amortized but are subject to periodic impairment tests. Our indefinite
lived intangible assets consist of broadcast licenses. Other intangible assets
continue to be amortized over their useful lives of 11 to 25 years.

      Upon adoption, we performed the first of the required impairment tests on
our indefinite lived intangible assets. The fair value of our broadcast licenses
was determined by applying an estimated market multiple to the broadcast cash
flow generated by the respective market. Market multiples were determined based
on recent transactions within the industry, information available regarding
publicly traded peer companies and the respective station's competitive position
within its market. Appropriate allocation was made to each of the station's
tangible and intangible assets in determining the fair value of the station's
broadcast licenses. As a result of these tests, we determined that one of our
broadcast licenses was impaired. Accordingly, we recorded a non-cash, after-tax
impairment charge of $2,973 related to the carrying value of our indefinite
lived intangible assets. This charge was recorded as a cumulative effect of a
change in accounting principle during the first quarter of Fiscal 2003.

   Net Income

      Net income for Fiscal 2004 was $13,581, an increase of $19,505 when
compared to a net loss of $5,924 in Fiscal 2003. The increase in net income was
due to the factors discussed above.

                                       30
<PAGE>


Results of Operations--Fiscal 2003 Compared to Fiscal 2002

      Set forth below are selected consolidated financial data for Fiscal 2002
and 2003, respectively, and the percentage change between the years.
<TABLE>
<CAPTION>


                                                                      Fiscal Year Ended         Percentage
                                                                        September 30,             Change
                                                                     -------------------        ----------
                                                                     2002           2003
                                                                     ----           ----
<S>                                                              <C>            <C>             <C>
Operating revenues, net......................................    $ 196,169      $ 202,590          3.3%
Total operating expenses.....................................      145,315        142,388         (2.0)%
                                                                 ---------      ---------

Operating income.............................................       50,854         60,202         18.4%
Nonoperating expenses, net...................................       43,385         64,574         48.8%
Income tax provision (benefit)...............................        3,955         (1,421)      (135.9)%
                                                                 ---------      ---------

Income (loss) before cumulative effect of change in
  accounting principle.......................................        3,514         (2,951)      (184.0)%
                                                                 ---------      ---------

Cumulative effect of change in accounting principle,
  net of income tax benefit..................................           --          2,973          --
                                                                 ---------      ---------

Net income (loss)............................................    $   3,514      $  (5,924)      (268.6)%
                                                                 =========      =========

Operating cash flow<F1>......................................    $  64,164      $  70,987         10.6%
                                                                 =========      =========
<FN>

_______________
<F1> Operating cash flow is not a measure of performance calculated in
     accordance with GAAP. For a definition of operating cash flow and a
     reconciliation of operating cash flow to operating income, please refer to
     footnote (4) under "Selected Consolidated Financial Data."
</FN>
</TABLE>



                                       31
<PAGE>

      The results above include the combined operations of the Company and
Allnewsco for both periods presented. The combining selected financial data for
Fiscal 2002 is as follows:
<TABLE>
<CAPTION>

                                                       Fiscal Year Ended September 30, 2002
                                            ---------------------------------------------------------
                                            Company       Allnewsco<F1>    Adjustment<F2>    Combined
                                            -------       -------------    --------------    --------
<S>                                       <C>              <C>              <C>              <C>
Operating revenues, net...........        $ 185,944        $ 10,225                          $ 196,169
Total operating expenses..........          133,803          11,512                            145,315
                                          ---------        --------                          ---------

Operating income (loss)...........           52,141          (1,287)                            50,854
Nonoperating expenses, net........           39,908           3,477                             43,385
Income tax provision (benefit)....            5,765              --          $ (1,810)           3,955
                                          ---------        --------          --------        ---------

Net income (loss).................        $   6,468        $ (4,764)         $  1,810        $   3,514
                                          =========        ========          ========        =========

Operating cash flow<F3>...........        $  65,118        $   (954)                         $  64,164
                                          =========        ========                          =========

<FN>
______________
<F1> Allnewsco's results are for the period from October 1, 2001 through the
     acquisition date of September 16, 2002.
<F2> Adjustment represents the income tax benefit associated with combining the
     Company and Allnewsco. See "--Income Taxes."
<F3> Operating cash flow is not a measure of performance calculated in
     accordance with GAAP. For a definition of operating cash flow and a
     reconciliation of operating cash flow to operating income, please refer to
     footnote (4) under "Selected Consolidated Financial Data."
</FN>
</TABLE>


   Net Operating Revenues

      Net operating revenues for Fiscal 2003 totaled $202,590, an increase of
$6,421, or 3.3%, as compared to Fiscal 2002. This increase resulted principally
from increased local, national and political advertising revenue in most of our
markets as well as increased network compensation.

      Local and national advertising revenues increased $2,286, or 1.3%, from
Fiscal 2002. Local and national advertising revenues increased in most of our
markets during Fiscal 2003. Such increase was partially due to the broadcast of
the Super Bowl by the ABC network in January 2003 (broadcast by the Fox network
in 2002), but was limited by the displacement of local and national advertisers
during the peak political advertising month of October 2002, decreased demand
for advertising related to the war in Iraq and a slight reduction in the level
of prime-time inventory available for sale as discussed below related to network
compensation.

      Political advertising revenues increased by $1,264, or 17.1%, in Fiscal
2003 from Fiscal 2002. Political advertising revenue increased in the majority
of our markets during Fiscal 2003, primarily due to several high-profile local
political races affecting our markets for the November

                                       32
<PAGE>

2002 elections. This increase was partially offset by fourth quarter Fiscal 2002
advertising leading up to these November 2002 elections as well as by first
quarter Fiscal 2002 advertising leading up to the November 2001 local political
election affecting our Washington, D.C. and Lynchburg markets.

      Network compensation revenue increased $2,047, or 55.3%, during Fiscal
2003 as compared to the prior fiscal year. The increase was principally due to
the July 31, 2002 expiration of certain amendments to our network affiliation
agreements. Under these amendments, ABC, for a three-year period, provided our
stations with additional prime-time inventory, limited participation rights in a
new cable television "soap" channel, and enhanced program exclusivity and
commercial inventory guarantees in exchange for reduced annual network
compensation, the return of certain Saturday morning inventory from the
stations, and more flexibility in repurposing of ABC programming. Upon the
expiration of these amendments, compensation rates and inventory allocations
reverted to their pre-modification levels. See "Our Business--Network
Affiliation Agreements and Relationship".

      No individual advertiser accounted for more than 5% of our broadcast
revenues during Fiscal 2003 or 2002.

   Total Operating Expenses

      Total operating expenses in Fiscal 2003 were $142,388, a decrease of
$2,927 compared to total operating expenses of $145,315 in Fiscal 2002. This net
decrease consisted of a decrease in television operating expenses, excluding
depreciation and amortization, of $777, a decrease in depreciation and
amortization of $2,525 and an increase in corporate expenses of $375.

      Television operating expenses, excluding depreciation and amortization,
totaled $125,224 in Fiscal 2003, a decrease of $777, or 0.6%, when compared to
television operating expenses of $126,001 in Fiscal 2002. This decrease was due
primarily to a $750 charge during the third quarter of Fiscal 2002 for one-time
lease-related costs associated with the then-pending relocation of WJLA to new
studio and office space, our continuing focus on controlling programming and
operating costs and expense savings related to the integration of the operations
of WJLA and NewsChannel 8.

      Depreciation and amortization expense of $10,785 in Fiscal 2003 decreased
$2,525, or 19.0%, from $13,310 in Fiscal 2002. This decrease was principally the
result of our adoption of SFAS No. 142 effective October 1, 2002. Under the new
rules, goodwill and intangible assets deemed to have indefinite lives are no
longer amortized but are subject to periodic impairment tests. Other intangible
assets continue to be amortized over their useful lives. The non-amortization
provisions of SFAS No. 142 resulted in a $4,088 decrease in amortization expense
during Fiscal 2003 as compared to the prior fiscal year. Assuming we had adopted
SFAS No. 142 at the beginning of Fiscal 2002, depreciation and amortization
expense for Fiscal 2002 would have been $9,222. This would have resulted in an
increase in depreciation and amortization expense during Fiscal 2003 of $1,563,
or 16.9%, due primarily to increased depreciation expense associated with the
buildout of studio and office space and acquisition of technical equipment for
the new WJLA/NewsChannel 8 facility.

                                       33
<PAGE>

      Corporate expenses in Fiscal 2003 increased $375, or 6.2%, from Fiscal
2002. The increase was primarily due to increased key-man life insurance
expenses.

   Operating Income

      Operating income of $60,202 in Fiscal 2003 increased $9,348, or 18.4%,
compared to operating income of $50,854 in Fiscal 2002. The operating income
margin in Fiscal 2003 increased to 29.7% from 25.9% for the prior fiscal year.

      Assuming we had adopted SFAS No. 142 at the beginning of Fiscal 2002,
operating income would have been $54,942 in Fiscal 2002, and operating margin
would have been 28.0% in Fiscal 2002. This would have resulted in an increase in
operating income of $5,260, or 9.6%, during Fiscal 2003 as compared to the prior
fiscal year. The increases in operating income and margin during Fiscal 2003
were primarily the result of increased net operating revenues as discussed
above.

   Operating Cash Flow

      Operating cash flow increased to $70,987 in Fiscal 2003 from $64,164 in
Fiscal 2002, an increase of $6,823, or 10.6%. This increase was primarily the
result of increased net operating revenues as discussed above. Operating cash
flow is not a measure of performance calculated in accordance with GAAP. For a
definition of operating cash flow and a reconciliation of operating cash flow to
operating income, please refer to footnote (4) under "Selected Consolidated
Financial Data."

   Nonoperating Expenses, Net

      Non-related party interest expense decreased by $914, or 2.2%, from
$41,561 in Fiscal 2002 to $40,647 in Fiscal 2003. The actual average balance of
debt outstanding, including capital lease obligations, for Fiscal 2003 was
$498,867, and the actual weighted average interest rate on debt during the year
was 8.03%. The decrease in non-related party interest expense was primarily the
result of the reduced weighted average interest rate on debt due to the two
financing transactions during the first half of Fiscal 2003, partially offset by
incremental interest expense associated with the two financing transactions.
Incremental interest expense was incurred related to carrying both the 7 3/4%
notes and the 9 3/4% debentures from December 20, 2002 through January 21, 2003
during the redemption notice period as well as carrying both the 7 3/4% notes
and the 8 7/8% notes from February 6, 2003 through March 10, 2003 during the
redemption notice period.

      Had we purchased or redeemed the 9 3/4% debentures on December 20, 2002
and the 8 7/8% notes on February 6, 2003, non-related party interest expense for
Fiscal 2003 would have been $38,087, resulting in a decrease of $3,474, or 8.4%,
as compared to Fiscal 2002. This reflects the lower weighted average interest
rate on debt, partially offset by higher average balances of debt outstanding.
The average balance of debt outstanding, including capital lease obligations,
for Fiscal 2003 would have been $470,186, and the weighted average interest rate
on debt during

                                       34
<PAGE>

Fiscal 2003 would have been 7.95%. This compares to an average balance of debt
outstanding, including capital lease obligations, for Fiscal 2002 of $449,125
and a weighted average interest rate on debt during Fiscal 2002 of 9.20%.

      Perpetual historically advanced cash to Allnewsco in the form of unsecured
demand notes bearing interest at a rate of 7.5%. Related party interest expense
incurred by Allnewsco associated with these notes, and reported in our
consolidated financial statements, was $785 during the year ended September 30,
2002. As we did not acquire or assume amounts due from Allnewsco to Perpetual,
such related party interest expense incurred by Allnewsco was not incurred by us
subsequent to the acquisition date of September 16, 2002. Accordingly, there was
no related party interest expense during the year ended September 30, 2003.

   Loss on Early Repayment of Debt

      As a result of the purchase and redemption of our 9 3/4% debentures and
the redemption of our 8 7/8% notes during the second quarter of Fiscal 2003, we
recorded a pre-tax charge of $23,194. Such charge has been reflected as a
nonoperating expense rather than as an extraordinary item in accordance with our
adoption of SFAS No. 145, "Rescission of FASB Statements Nos. 4, 44 and 64,
Amendment of FASB Statement No. 13 and Technical Corrections," which became
effective during our Fiscal 2003. SFAS No. 145 generally requires any gains or
losses associated with early extinguishments of debt be recorded as a component
of income from continuing operations rather than as an extraordinary item.

   Income Taxes

      The benefit from income taxes in Fiscal 2003 totaled $1,421, a decrease of
$5,376 when compared to the provision for income taxes of $3,955 in Fiscal 2002.
The increase in income tax benefit during Fiscal 2003 was primarily due to the
$23,194 loss on early repayment of debt during the quarter ended March 31, 2003.

      Because Perpetual has historically filed consolidated federal and Virginia
state income tax returns including the operating results of both the Company and
Allnewsco, certain tax benefits were realized by Perpetual associated with
Allnewsco's net operating losses in the consolidated tax returns. In accordance
with SFAS No. 109, "Accounting for Income Taxes," the combined results of the
Company and Allnewsco for Fiscal 2002 have been adjusted to reflect the
historical tax benefits which would have been recorded for financial reporting
purposes by the combined entity.

   Cumulative Effect of Change in Accounting Principle

      Effective October 1, 2002, we adopted SFAS No. 142, "Goodwill and Other
Intangible Assets." SFAS No. 142 addresses the financial accounting and
reporting for acquired goodwill and other intangible assets. Under the new
rules, goodwill and intangible assets deemed to have indefinite lives are no
longer amortized but are subject to periodic impairment tests. Our indefinite
lived intangible assets consist of broadcast licenses. Other intangible assets
continue to be amortized over their useful lives of 11 to 25 years.

                                       35
<PAGE>

      Upon adoption, we performed the first of the required impairment tests on
our indefinite lived intangible assets. The fair value of our broadcast licenses
was determined by applying an estimated market multiple to the broadcast cash
flow generated by the respective market. Market multiples were determined based
on recent transactions within the industry, information available regarding
publicly traded peer companies and the respective station's competitive position
within its market. Appropriate allocation was made to each station's tangible
and intangible assets in determining the fair value of the station's broadcast
licenses. As a result of these tests, we determined that one of our broadcast
licenses was impaired. Accordingly, we recorded a non-cash, after-tax impairment
charge of $2,973 related to the carrying value of our indefinite lived
intangible assets. This charge was recorded as a cumulative effect of a change
in accounting principle during the first quarter of Fiscal 2003.

   Net Income

      Net loss for Fiscal 2003 was $5,924, a decrease of $9,438 when compared to
net income of $3,514 in Fiscal 2002. The decrease in net income was due to the
factors discussed above.


Liquidity and Capital Resources

   Cash Provided by Operations

      Our principal source of working capital is cash flow from operations and
borrowings under our senior credit facility. As discussed above, our operating
results are cyclical in nature primarily as a result of seasonal fluctuations in
advertising revenues, which are generally highest in the first and third
quarters of each fiscal year. Our cash flow from operations is also impacted on
a quarterly basis by the timing of cash collections and interest payments on our
debt. Cash receipts are usually greater during the second and fourth fiscal
quarters as the collection of advertising revenue typically lags the period in
which such revenue is recorded. Scheduled semi-annual interest payments on our
long-term fixed interest rate debt have been higher during the first and third
fiscal quarters, and as a result of the redemption of our 8 7/8% notes during
the second quarter of Fiscal 2003, now occurs only in such quarters. As a
result, our cash flows from operating activities as reflected in our
consolidated financial statements are generally significantly higher during our
second and fourth fiscal quarters, and such quarters comprise a substantial
majority of our cash flows from operating activities for the full fiscal year.

      As reported in our consolidated statements of cash flows, our net cash
provided by operating activities was $28,020, $23,938 and $30,959 for Fiscal
2002, 2003 and 2004, respectively. The decrease in cash provided by operating
activities from Fiscal 2002 to Fiscal 2003, and the increase in cash provided by
operating activities from Fiscal 2003 to Fiscal 2004 were primarily due to the
effect of the change in other accrued expenses on the net cash provided by
operating activities for the year ended September 30, 2003. Accrued expenses
were elevated at September 30, 2002 as a result of the relocation of WJLA into
new studio and office space during the fourth quarter of Fiscal 2002. Such
accrued expenses were paid during Fiscal 2003, resulting in a decrease to net
cash provided by operating activities for the year.

                                       36
<PAGE>

   Distributions to Related Parties

      We have periodically made advances in the form of distributions to
Perpetual. For Fiscal 2003 and 2004, we made cash advances net of repayments to
Perpetual of $13,846 and $18,957, respectively. During Fiscal 2002, we received
net repayments of distributions to owners of $48. The advances to Perpetual are
non-interest bearing and, as such, do not reflect market rates of
interest-bearing loans to unaffiliated third parties.

      At present, the primary sources of repayment of net advances is through
our ability to pay dividends or make other distributions, and there is no
immediate intent for the amounts to be repaid. Accordingly, these advances have
been treated as a reduction of stockholder's investment and are described as
"distributions" in our consolidated financial statements.

      During Fiscal 2003, we declared and paid cash dividends of $250 per common
share, or $5,000. We recorded these dividends in distributions to owners, net
when declared.

      Under the terms of the agreements relating to our indebtedness, future
advances, distributions and dividends to related parties are subject to certain
restrictions. We anticipate that, subject to such restrictions, applicable law
and payment obligations with respect to our indebtedness, we will make advances,
distributions or dividends to related parties in the future. Subsequent to
September 30, 2004 and through November 16, 2004, we made additional net
distributions to owners of $154.

      On September 16, 2002, ACC completed its acquisition of certain of the
assets of Allnewsco, in exchange for $20,000 in cash and the cancellation of a
$20,000 note receivable from Allnewsco. See "--General Factors Affecting Our
Business." The cash portion of the purchase price paid to Allnewsco was
subsequently repaid to us from Perpetual in the form of a repayment of
distributions to owners.

      During Fiscal 2002 and 2004, we were charged by Perpetual and made
payments to Perpetual for federal and state income taxes totaling $186 and
$4,231, respectively. During Fiscal 2003, we were not charged for federal and
state income taxes, but rather, we recorded a benefit for federal and Virginia
state income taxes of $3,957. This benefit was effectively distributed to
Perpetual as such benefit will not be recognized in future years pursuant to the
terms of the tax sharing agreement between the companies.

      Additionally, because Perpetual has historically filed consolidated
federal and Virginia state income tax returns including the operating results of
both the Company and Allnewsco, certain tax benefits were realized by Perpetual
associated with Allnewsco's net operating losses in the consolidated tax
returns. In accordance with SFAS No. 109, the combined results of the Company
and Allnewsco for Fiscal 2002 have been adjusted to reflect the historical tax
benefits which would have been recorded for financial reporting purposes by the
combined entity during the period. The benefit recorded during Fiscal 2002 was
$1,810. During Fiscal 2002, our combined results reflect a combined benefit from
federal income taxes of $2,571. This benefit was effectively distributed to
Perpetual as such benefit will not be recognized in future years pursuant to the
terms of the tax sharing agreement between the companies.

                                       37
<PAGE>

      Perpetual historically advanced cash to Allnewsco in the form of unsecured
demand notes bearing interest at a rate of 7.5%. Notes issued during Fiscal 2002
amounted to $3,895, with no cash repayments during the year. The notes payable
from Allnewsco to Perpetual were included in distributions to owners in our
consolidated financial statements, conforming the presentation of cash
transactions between ACC, Allnewsco and Perpetual. As we did not acquire or
assume amounts due from Allnewsco to Perpetual, no amount was outstanding from
us under such notes at September 30, 2002, 2003 or 2004.

      During Fiscal 1991, we loaned $20,000 to Allnewsco. The $20,000, 11.06%
note receivable from Allnewsco was due in January 2008, with the principal
balance also due upon demand. Since our historical consolidated financial
statements have been restated to reflect the combined results of the Company and
Allnewsco as of the beginning of the earliest period presented, the loan amount
as well as the related interest income/expense have been eliminated as
intercompany transactions for all periods presented. At closing of the Allnewsco
transaction, we cancelled the $20,000 note as part of the consideration for the
acquisition.

   Indebtedness

      Our total debt, including the current portion of long-term debt, decreased
from $467,688 at September 30, 2003 to $465,675 at September 30, 2004. This
debt, net of applicable discounts, consists of $452,311 of 7 3/4% senior
subordinated notes due December 15, 2012; $13,000 of draws under a senior credit
facility; and $364 of capital lease obligations. The decrease of $2,013 in total
debt from September 30, 2003 to September 30, 2004 was primarily due to net
repayments under the senior credit facility of $2,000.

      Our $70,000 senior credit facility is secured by the pledge of stock of
ACC and its subsidiaries and matures March 27, 2006. Interest is payable
quarterly at various rates from prime plus 0.25% or LIBOR plus 1.50% depending
on certain financial operating tests.

      Under the existing borrowing agreements, we are subject to restrictive
covenants that place limitations upon payments of cash dividends, issuance of
capital stock, investment transactions, incurrence of additional obligations and
transactions with affiliates. In addition, under the senior credit facility, we
must maintain compliance with certain financial covenants. Compliance with the
financial covenants is measured at the end of each quarter, and as of September
30, 2004, we were in compliance with those financial covenants. We are also
required to pay a commitment fee ranging from 0.50% to 0.75% per annum based on
the amount of any unused portion of the senior credit facility.

      The indenture for our long-term debt provides that, whether or not
required by the rules and regulations of the SEC, so long as any senior notes
are outstanding, we, at our expense, will furnish to each holder (i) all
quarterly and annual financial information that would be required to be
contained in a filing with the SEC on Forms 10-Q and 10-K, if we were required
to file such forms, including a "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and, with respect to the annual
financial information only, a report thereon by our certified independent
accountants and (ii) all current reports that would be required to be filed

                                       38
<PAGE>

with the SEC on Form 8-K if we were required to file such reports. In addition,
the indenture also provides that, whether or not required by the rules and
regulations of the SEC, we will file a copy of all such information and reports
with the SEC for public availability (unless the SEC will not accept such a
filing) and make such information available to securities analysts and
prospective investors upon request. Although our duty to file such reports with
the SEC was automatically suspended pursuant to Section 15(d) of the Securities
Exchange Act of 1934, effective October 1, 2003, we will continue to file such
reports in accordance with the indenture.

   Other Uses of Cash

      During Fiscal 2002, 2003 and 2004, we made $26,332, $7,700 and $5,816,
respectively, of capital expenditures, of which $24 was financed through capital
lease transactions during Fiscal 2002. The increased level of capital
expenditures during Fiscal 2002 related primarily to the buildout of studio and
office space and acquisition of technical equipment for WJLA/NewsChannel 8. At
this time, we estimate that capital expenditures for Fiscal 2005 will be in the
approximate range of $6,000 to $8,000 and will primarily be for the acquisition
of technical equipment and vehicles to support ongoing operations across our
stations as well as for the implementation of full power DTV service in several
of our markets. We expect that the source of funds for these anticipated capital
expenditures will be cash provided by operations and borrowings under the senior
credit facility.

      We regularly enter into program contracts for the right to broadcast
television programs produced by others and program commitments for the right to
broadcast programs in the future. Such programming commitments are generally
made to replace expiring or canceled program rights. During Fiscal 2002, 2003
and 2004, we made cash payments of approximately $22,100, $21,500 and $21,400,
respectively, for rights to television programs. We anticipate cash payments for
program rights will approximate $16,000 during Fiscal 2005 and, based on our
current contracts, we expect cash payments for program rights to approximate
$14,000 per year for Fiscal 2006 through 2009. We currently intend to fund these
commitments with cash provided by operations.


                                       39
<PAGE>

      The following table presents the long-term debt maturities, required
payments under contractual agreements for broadcast rights, future minimum lease
payments under noncancellable leases and guaranteed payments under employment
contracts and deferred compensation agreements as of September 30, 2004:
<TABLE>
<CAPTION>

                                                    Fiscal Year Ending September 30,
                                         ------------------------------------------------------
                                         2005        2006        2007         2008         2009      Thereafter      Total
                                         ----        ----        ----         ----         ----      ----------      -----
<S>                                   <C>         <C>         <C>          <C>          <C>          <C>          <C>
Long-term debt....................    $     --    $ 13,000    $     --     $     --     $     --     $ 455,000    $ 468,000
Programming contracts -- currently
   available......................      17,592         919         200           50           --            --       18,761
Programming contracts -- future
   commitments....................       2,999      10,275       9,526        8,599        8,856        13,335       53,590
Operating leases..................       3,927       3,808       2,955        2,825        2,906        24,874       41,295
Capital leases....................         180         180          30           --           --            --          390
Employment contracts..............       7,691       2,247       1,784        1,581           54            --       13,357
Deferred compensation.............         219         369         369          369          408           573        2,307
                                      --------    --------    --------     --------     --------     ---------    ---------

      Total.......................    $ 32,608    $ 30,798    $ 14,864     $ 13,424     $ 12,224     $ 493,782    $ 597,700
                                      ========    ========    ========     ========     ========     =========    =========
</TABLE>


      Based upon our current level of operations, we believe that available
cash, together with cash flows generated by operating activities and amounts
available under the senior credit facility, will be adequate to meet our
anticipated future requirements for working capital, capital expenditures and
scheduled payments of interest on our debt for the next twelve months.

      ACC's cash flow from operations and consequent ability to service its debt
is, in part, dependent upon the earnings of its subsidiaries and the
distribution (through dividends or otherwise) of those earnings to ACC, or upon
loans, advances or other payments of funds by those subsidiaries to ACC. As of
September 30, 2004, 70% of the assets of ACC were held by operating subsidiaries
and for Fiscal 2004, approximately 50% of ACC's net operating revenues were
derived from the operations of ACC's subsidiaries.

   Income Taxes

      Our operations are included in a consolidated federal income tax return
filed by Perpetual. In accordance with the terms of a tax sharing agreement
between ACC and Perpetual, we are required to pay to Perpetual our federal
income tax liability, computed based upon statutory federal income tax rates
applied to our consolidated taxable income. We file separate state income tax
returns with the exception of Virginia, which is included in a combined state
income tax return filed by Perpetual. In accordance with the terms of the tax
sharing agreement, we are required to pay to Perpetual our combined Virginia
income tax liability, computed based upon statutory Virginia income tax rates
applied to our combined Virginia net taxable income. Taxes payable to Perpetual
are not reduced by losses generated in prior years by us. In addition, the
amounts payable by us to Perpetual under the tax sharing agreement are not
reduced if losses of other members of the Perpetual group are utilized to offset
our taxable income for purposes of the Perpetual consolidated federal or
Virginia state income tax returns.

                                       40
<PAGE>

      The provision for income taxes is determined in accordance with SFAS No.
109, which requires that the consolidated amount of current and deferred income
tax expense for a group that files a consolidated income tax return be allocated
among members of the group when those members issue separate financial
statements. Perpetual allocates a portion of its consolidated current and
deferred income tax expense to us as if we and our subsidiaries were separate
taxpayers. We record deferred tax assets, to the extent it is considered more
likely than not that such assets will be realized in future periods, and
deferred tax liabilities for the tax effects of the differences between the
bases of our assets and liabilities for tax and financial reporting purposes. To
the extent a deferred tax asset would be recorded due to the incurrence of
losses for federal or Virginia state income tax purposes, any such benefit
recognized is effectively distributed to Perpetual as such benefit will not be
recognized in future years pursuant to the tax sharing agreement.

   Inflation

      The impact of inflation on our consolidated financial condition and
consolidated results of operations for each of the periods presented was not
material.


Critical Accounting Policies and Estimates

      The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires us to make judgments
and estimates that affect the amounts reported in our consolidated financial
statements and accompanying notes. We base our estimates on historical
experience and assumptions we consider reasonable at the time of making those
estimates. We evaluate our estimates on an on-going basis. Actual results may
differ from these estimates under different circumstances or using different
assumptions. We consider the following accounting policies to be critical to our
business operations and the understanding of our financial condition and results
of operations.

   Allowance for Doubtful Accounts

      We maintain an allowance for doubtful accounts for estimated losses
resulting from the inability of our customers to make required payments. If the
economy and/or the financial condition of our customers were to deteriorate,
resulting in an impairment of their ability to make their payments, additional
allowances may be required.

   Intangible Assets

      Intangible assets consist of values assigned to broadcast licenses as well
as favorable terms on contracts and leases. The amounts originally assigned to
intangible assets were based on the results of independent valuations.
Intangible assets, net of accumulated amortization, were $122,982 and $122,815
as of September 30, 2003 and 2004, respectively. SFAS No. 142, "Goodwill and
Other Intangible Assets," was issued in June 2001 and became effective for our
fiscal year ended September 30, 2003. SFAS No. 142 addresses the financial
accounting and reporting for acquired goodwill and other intangible assets.
Under the new rules, goodwill and

                                       41
<PAGE>

intangible assets deemed to have indefinite lives are no longer amortized but
are subject to annual impairment tests. In testing for impairment, the fair
value of our broadcast licenses is determined by applying an estimated market
multiple to the broadcast cash flow generated by the respective market. Market
multiples are determined based on recent transactions within the industry,
information available regarding publicly traded peer companies and the
respective station's competitive position within its market. Appropriate
allocation is made to each of the station's tangible and intangible assets in
determining the fair value of the station's broadcast licenses.

      Other intangible assets continue to be amortized over their useful lives.
The recoverability of other intangible assets is assessed on an ongoing basis by
evaluating whether amounts can be recovered through undiscounted cash flows over
the remaining amortization period.

      The performance of impairment tests under SFAS No. 142 requires
significant management judgment. Future events affecting cash flows and market
conditions could result in an impairment loss. Any resulting impairment loss
could have a material adverse impact on our financial condition and results of
operations.

   Income Taxes

      We account for income taxes in accordance with SFAS No. 109, "Accounting
for Income Taxes". We recognize deferred tax assets and liabilities based on the
differences between the financial statement carrying amounts and the tax bases
of assets and liabilities. We regularly review our deferred tax assets for
recoverability and establish a valuation allowance if it is more likely than not
that the deferred tax assets will not be realized. This assessment is based on
historical taxable income, projected future taxable income and the expected
timing of the reversals of existing temporary differences. If we are unable to
generate sufficient taxable income, or if there is a material change in the
actual effective tax rates or time period within which the underlying temporary
differences become taxable or deductible, we could be required to establish a
valuation allowance against all or a significant portion of our deferred tax
assets resulting in a substantial increase in our effective tax rate and an
adverse impact on our operating results.

      Our provision for income taxes and related deferred tax assets and
liabilities reflect our estimates of actual future taxes to be paid. Such
estimates are based on items reflected in the consolidated financial statements,
considering timing as well as the sustainability of our tax filing positions.
Actual income taxes paid could vary from our estimates as a result of future
changes in income tax law or reviews by federal or various state and local tax
authorities.

                                       42
<PAGE>


New Accounting Standards

      In September 2004, the SEC announced that the "residual method" should no
longer be used to value intangible assets other than goodwill. Rather, a "direct
value method" should be used to determine the fair value of all intangible
assets for purposes of impairment testing, including those assets previously
valued using the residual method. Any impairment resulting from application of a
direct value method should be reported as a cumulative effect of a change in
accounting principle. This announcement will be effective no later than the
beginning of our Fiscal 2006. Our intangible assets are valued using a residual
method, and we are currently evaluating the impact, if any, that a direct value
method valuation may have on our financial position or results of operations.


Off-Balance Sheet Arrangements

      We have no off-balance sheet arrangements as defined by Item 303 of
Regulation S-K.

                                       43
<PAGE>

             ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
                                   MARKET RISK
                             (dollars in thousands)

      At September 30, 2004, we had other financial instruments consisting
primarily of long-term fixed interest rate debt. Such debt, with future
principal payments of $455,000, matures December 15, 2012. At September 30,
2004, the carrying value of such debt was $452,311, the fair value was
approximately $470,000 and the interest rate was 7 3/4%. The fair market value
of long-term fixed interest rate debt is subject to interest rate risk.
Generally, the fair market value of fixed interest rate debt will increase as
interest rates fall and decrease as interest rates rise. We estimate the fair
value of our long-term debt using either quoted market prices or by discounting
the required future cash flows under our debt using borrowing rates currently
available to us, as applicable. We actively monitor the capital markets in
analyzing our capital raising decisions.


                  ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND
                               SUPPLEMENTARY DATA

      See Index on page F-1.


            ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                       ACCOUNTING AND FINANCIAL DISCLOSURE

      Not applicable.


                        ITEM 9A. CONTROLS AND PROCEDURES

      The Company has performed an evaluation of its disclosure controls and
procedures (as defined by Exchange Act rule 15d-15(e)) as of September 30, 2004.
Based on this evaluation, the Company's Chief Executive Officer and Chief
Financial Officer have concluded that the disclosure controls and procedures are
effective in providing reasonable assurances that material information required
to be in this Form 10-K is made known to them by others on a timely basis.

      There were no changes in the Company's internal control over financial
reporting during the quarter ended September 30, 2004 that have materially
affected, or are reasonably likely to materially affect, the Company's internal
control over financial reporting.


                           ITEM 9B. OTHER INFORMATION

      None.


                                       44
<PAGE>


                                    PART III

           ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Executive Officers and Directors

      Executive officers and directors of ACC are as follows:
<TABLE>
<CAPTION>

    Name                      Age                     Title
-------------------------     ---  --------------------------------------------------
<S>                           <C>  <C>
Joe L. Allbritton             79   Chairman of the Executive Committee and Director

Barbara B. Allbritton         67   Executive Vice President and Director

Robert L. Allbritton          35   Chairman, Chief Executive Officer and Director

Frederick J. Ryan, Jr.        49   Vice Chairman, President, Chief Operating Officer
                                     and Director

Jerald N. Fritz               53   Senior Vice President, Legal and Strategic Affairs,
                                     General Counsel

Stephen P. Gibson             39   Senior Vice President and Chief Financial Officer

James C. Killen, Jr.          42   Vice President, Sales
</TABLE>

___________

      JOE L. ALLBRITTON is the founder of ACC and was Chairman of the Board of
Directors from its inception in 1974 until 1998 when he became Chairman of its
Executive Committee. Through ACC and its various subsidiaries and affiliates
(including Perpetual), Mr. Allbritton has presided over the growth of the
television group, radio, cable news services, television production and
newspapers in large, medium and small markets. His corporate experience ranges
from media to financial institutions, insurance, property management,
cemeteries/mortuaries and the Internet. In addition to his position with ACC,
Mr. Allbritton led Riggs National Corporation ("Riggs") (owner of banking
operations in Washington, D.C., Maryland, Virginia, Florida and internationally)
from 1981 until 2004, first as its Chairman and CEO (1981-2001) and then as its
Vice Chairman (2001-2004). He has served on the boards of and chaired numerous
philanthropic organizations including The Allbritton Foundation. Mr. Allbritton
is the husband of Barbara B. Allbritton and the father of Robert L. Allbritton.
See "Certain Relationships and Related Transactions."

                                       45
<PAGE>


      BARBARA B. ALLBRITTON has been a Director of ACC since its inception, Vice
President of ACC from 1980 to 2001 and Executive Vice President since 2001. She
currently serves as an officer and/or director of each of ACC's television
subsidiaries, as well as Perpetual and The Allbritton Foundation. She was also a
director of Riggs Bank N.A. from 1991 until 2004. Mrs. Allbritton is the wife of
Joe L. Allbritton and the mother of Robert L. Allbritton. See "Certain
Relationships and Related Transactions."

      ROBERT L. ALLBRITTON has been Chairman of the Board of Directors and Chief
Executive Officer of ACC since February 2001 and a Director of ACC since 1993.
He also serves as a member of the Executive Committee of the Board of Directors
of ACC. Mr. Allbritton was Executive Vice President and Chief Operating Officer
of ACC from 1994 to 1998 and President of ACC from 1998 to 2001. He is also an
officer and/or director of Perpetual, each of ACC's television subsidiaries and
The Allbritton Foundation. He has been involved in management of the television
properties at both the corporate and daily operational levels, including
financial, technical, strategic, programming, sales, news and promotion. In
addition to his positions with ACC, Mr. Allbritton has been the Chairman of the
Board of Directors and Chief Executive Officer of Riggs since February 2001 and
a Director of Riggs since 1994. Mr. Allbritton has served on the Board of
Directors of the Washington Hospital Center since August 2002 and the Lyndon B.
Johnson Foundation since May 2002. He has also served on the Board of Trustees
of The George Washington University since February 2002 and Wesleyan University
since May 2003. He is the son of Joe L. and Barbara B. Allbritton. See "Certain
Relationships and Related Transactions."

      FREDERICK J. RYAN, JR. has been President of ACC since February 2001,
Chief Operating Officer since 1998 and a Director and its Vice Chairman since
1995. He has served as Senior Vice President and Executive Vice President of ACC
and is an officer of each of its television subsidiaries. He previously served
as Chief of Staff to former President Ronald Reagan (1989-1995) and Assistant to
the President in the White House (1982-1989). Prior to his government service,
Mr. Ryan was an attorney with the Los Angeles firm of Hill, Farrer and Burrill.
Mr. Ryan presently serves as Chairman of the Ronald Reagan Presidential Library
Foundation, Vice Chairman of Ford's Theatre, Vice Chairman of the White House
Historical Association and Trustee of Ronald Reagan Institute of Emergency
Medicine at George Washington University. Mr. Ryan is a Director of Riggs Bank
N.A. and a Director of Riggs Bank Europe Ltd. in London.

      JERALD N. FRITZ has been part of ACC's management since 1987, currently
serving as a Senior Vice President. He serves as its General Counsel and also
oversees strategic planning and governmental affairs. From 1981 to 1987, Mr.
Fritz held several positions with the FCC, including Chief of Staff and Legal
Counsel to the Chairman. Mr. Fritz was in private practice from 1978 to 1981,
specializing in communications law, and from 1980 to 1983 was on the adjunct
faculty of George Mason University Law School teaching communications law and
policy. Mr. Fritz began his career in broadcasting in 1973 with WGN-TV, Chicago.
He is a former director of the National Association of Broadcasters ("NAB"). Mr.
Fritz is a division chair of the Communications Forum of the American Bar
Association and currently serves on the NAB's Copyright Committee and Digital TV
Task Force as well as the Co-Chair of the Pre-Broadcast Committee of the Media
Law Resource Center.

                                       46
<PAGE>

      STEPHEN P. GIBSON has been a Senior Vice President of ACC since February
2001 and a Vice President since 1997. He has served as Chief Financial Officer
since 1998 and Controller from 1997, when he joined the Company, to 1998. He is
also Treasurer of The Allbritton Foundation and Vice President of Perpetual and
each of ACC's television subsidiaries. Prior to joining ACC, Mr. Gibson served
as Controller for COMSAT RSI Plexsys Wireless Systems, a provider of wireless
telecommunications equipment and services, from 1994 to 1997. From 1987 to 1994,
Mr. Gibson held various positions with the accounting firm of Price Waterhouse
LLP, the latest as Audit Manager. He currently serves as an elected director of
the Broadcast Cable Financial Management Association.

      JAMES C. KILLEN, JR. joined ACC as Vice President, Sales in November 2004
to oversee, coordinate and support all aspects of advertising sales for the
Company. Prior to joining ACC, Mr. Killen held various sales positions with NBC
from 1992 until 2004, most recently Local Sales Manager and New York National
Sales Manager of NBC4 in Washington, D.C. His network experience included
several years as an NBC Account Manager selling the NBC owned and operated
stations.


Code of Ethics for Senior Financial Officers

      Our Board of Directors has adopted a Code of Ethics for Senior Financial
Officers. A copy of the Code of Ethics is incorporated by reference as an
exhibit to this Annual Report on Form 10-K.


Audit Committee Financial Expert

      As our Board of Directors has not designated an Audit Committee, our
entire Board of Directors constitutes the Audit Committee of the Board of
Directors under the Securities Exchange Act of 1934. The Board of Directors has
determined that it does not currently have an "audit committee financial expert"
as defined by Item 401(h) of Regulation S-K. Our previous audit committee
financial expert, Lawrence I. Hebert, resigned from the Board of Directors
effective September 30, 2004. Mr. Hebert has not been replaced, and the Board is
currently considering its options.


                                       47
<PAGE>

                         ITEM 11. EXECUTIVE COMPENSATION

      The following table sets forth compensation paid to our Chief Executive
Officer and our four other most highly compensated executive officers for Fiscal
2004, 2003 and 2002:
<TABLE>
<CAPTION>
                                 Summary Compensation Table


                                              Fiscal                                  All Other
 Name and Principal Position                   Year       Salary         Bonus      Compensation
 ---------------------------                   ----       ------         -----      ------------
<S>                                            <C>      <C>           <C>           <C>
Joe L. Allbritton <F1>                         2004     $ 550,000            --     $ 121,000<F2>
    Chairman of the Executive                  2003       550,000            --       115,600<F2>
    Committee                                  2002       550,000            --       112,900<F2>

Robert L. Allbritton <F3>                      2004       250,000     $  75,000            --
    Chairman and                               2003       250,000        75,000            --
    Chief Executive Officer                    2002       250,000        75,000            --

Frederick J. Ryan, Jr. <F4>                    2004       217,500       100,000         6,000<F5>
    President and Chief                        2003       217,500        75,000         5,500<F5>
    Operating Officer                          2002       217,500        75,000         5,100<F5>

Jerald N. Fritz <F6>                           2004       216,500        60,000         6,100<F5>
    Senior Vice President, Legal               2003       210,000        45,000         5,300<F5>
    And Strategic Affairs                      2002       210,000        55,000         5,300<F5>

Stephen P. Gibson <F7>                         2004       206,000        60,000         6,100<F5>
    Senior Vice President and Chief            2003       200,000        45,000         5,600<F5>
    Financial Officer                          2002       195,000        65,000         5,600<F5>

<FN>
___________
<F1> Salary consists of management fees paid by ACC.
<F2> Represents the imputed premium cost related to certain split dollar life
     insurance policies on the life of Mr. Joe L. Allbritton. The annual
     premiums on such policies are satisfied either by cash payment from ACC or
     by dividends accumulated under the policies. Upon the death of the insured,
     ACC will receive the cash value of the policies up to the amount of its
     investments, and the remaining proceeds will be paid to the insured's
     beneficiary. The imputed premium cost is calculated on the difference
     between the face value of the policy and the cash surrender value.
<F3> Robert L. Allbritton is paid management fees by ACC, which are included as
     compensation above. In addition, Mr. Robert L. Allbritton is paid cash
     compensation by Perpetual for services to Perpetual and other interests of
     Joe L. Allbritton, including ACC. The portion of such compensation related
     to ACC is allocated to ACC and also included as compensation above.
<F4> Frederick J. Ryan, Jr. is paid cash compensation by ACC for services to
     ACC, which is included as compensation above. In addition, Mr. Ryan is also
     paid cash compensation by Perpetual for services to Perpetual and other
     interests of Joe L. Allbritton.
<F5> These amounts reflect annual contributions by ACC to our 401(k) Plan.
<F6> Jerald N. Fritz is paid cash compensation by ACC for services to ACC and
     Perpetual. Of the compensation shown in the table for Mr. Fritz, $31,500,
     $10,500 and $10,825 represents the portion of such compensation related to
     Perpetual, and has been allocated to Perpetual in Fiscal 2002, 2003 and
     2004, respectively.
<F7> Stephen P. Gibson is paid cash compensation by ACC for services to ACC and
     Perpetual. Of the compensation shown in the table for Mr. Gibson, $39,000,
     $40,000 and $45,320 represents the portion of such compensation related to
     Perpetual, and has been allocated to Perpetual in Fiscal 2002, 2003 and
     2004, respectively. In addition, Mr. Gibson is paid cash compensation by
     Perpetual for services to Perpetual and other interest of Joe L.
     Allbritton.
</FN>
</TABLE>

                                       48
<PAGE>


      We do not have a Compensation Committee of our Board of Directors.
Compensation of executive officers is determined by Joe L. Allbritton, Robert L.
Allbritton and Frederick J. Ryan, Jr. In reviewing compensation of executive
officers, consideration is given to performance, comparable arrangements in our
industry, as well as the cash compensation paid to certain of our executive
officers by affiliates of ACC. Our directors are not separately compensated for
membership on the Board of Directors.


            ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
                                 AND MANAGEMENT

      The authorized capital stock of ACC consists of 20,000 shares of common
stock, par value $0.05 per share (the "ACC Common Stock"), all of which is
outstanding, and 1,000 shares of preferred stock, 200 shares of which have been
designated for issue as Series A Redeemable Preferred Stock, par value $1.00 per
share (the "Series A Preferred Stock"), no shares of which are issued and
outstanding.

ACC Common Stock

      Joe L. Allbritton controls Perpetual. Perpetual owns 100% of the
outstanding common stock of AGI, and AGI owns 100% of the outstanding ACC Common
Stock. Perpetual's address is 808 Seventeenth Street, N.W., Suite 300,
Washington, D.C. 20006-3910. There is no established public trading market for
ACC Common Stock.

      Each share of ACC Common Stock has an equal and ratable right to receive
dividends when and as declared by the Board of Directors of ACC out of assets
legally available therefore.

      In the event of a liquidation, dissolution or winding up of ACC, holders
of ACC Common Stock are entitled to share ratably in assets available for
distribution after payments to creditors and to holders of any preferred stock
of ACC that may at the time be outstanding. The holders of ACC Common Stock have
no preemptive rights to subscribe to additional shares of capital stock of ACC.
Each share of ACC Common Stock is entitled to one vote in elections of directors
and all other matters submitted to a vote of ACC's stockholder.

Equity Compensation Plans

      ACC does not have any compensation plans or individual compensation
arrangements under which ACC Common Stock or Series A Preferred Stock are
authorized for issuance.


                                       49
<PAGE>

             ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
                             (dollars in thousands)

Distributions to Related Parties

      ACC has periodically made advances in the form of distributions to
Perpetual. For Fiscal 2004, ACC made cash advances to Perpetual of $31,322 and
Perpetual made repayments on these cash advances of $12,365. The advances to
Perpetual are non-interest bearing and, as such, do not reflect market rates of
interest-bearing loans to unaffiliated third parties. In addition, ACC was
charged by Perpetual and made payments to Perpetual for federal and state income
taxes in the amount of $4,231. As a result of making advances of tax payments in
accordance with the terms of the tax sharing agreement between ACC and
Perpetual, we earned interest income from Perpetual in the amount of $162. See
"Income Taxes" below.

      At present, the primary source of repayment of net advances is through our
ability to pay dividends or make other distributions, and there is no immediate
intent for the amounts to be repaid. Accordingly, these advances have been
treated as a reduction of stockholder's investment and are described as
"distributions" in our consolidated financial statements.

      Under the terms of the agreements governing our indebtedness, future
advances, distributions and dividends to related parties are subject to certain
restrictions. We anticipate that, subject to such restrictions, applicable law
and payment obligations with respect to the notes and our other debt, ACC will
make advances, distributions or dividends to related parties in the future.
Subsequent to September 30, 2004 and through November 16, 2004, we made
additional net distributions to owners of $154.

Management Fees

      We paid management fees of $500 to Perpetual for Fiscal 2004. We also paid
executive compensation in the form of management fees to Joe L. Allbritton and
Robert L. Allbritton for Fiscal 2004 in the amount of $550 and $200,
respectively. We expect to pay management fees to Perpetual, Joe L. Allbritton
and Robert L. Allbritton during Fiscal 2005 of approximately $500, $550 and
$200, respectively. We believe that payments to Perpetual, Joe L. Allbritton and
Robert L. Allbritton will continue in the future and that the amount of the
management fees is at least as favorable to us as those prevailing for
comparable transactions with or involving unaffiliated parties.

Income Taxes

      Our operations are included in a consolidated federal income tax return
filed by Perpetual. In accordance with the terms of a tax sharing agreement
between ACC and Perpetual, ACC is required to pay to Perpetual its federal
income tax liability, computed based upon statutory federal income tax rates
applied to our consolidated taxable income. We file separate state income tax
returns with the exception of Virginia which is included in a combined state
income tax return filed by Perpetual. In accordance with the terms of the tax
sharing agreement, we are required to pay to Perpetual our combined Virginia
income tax liability, computed based upon

                                       50
<PAGE>

statutory Virginia income tax rates applied to our combined Virginia net taxable
income. Taxes payable to Perpetual are not reduced by losses generated in prior
years by us. In addition, the amounts payable by us to Perpetual under the tax
sharing agreement are not reduced if losses of other members of the Perpetual
group are utilized to offset our taxable income for purposes of the Perpetual
consolidated federal or Virginia state income tax returns.

      The provision for income taxes is determined in accordance with SFAS No.
109, "Accounting for Income Taxes," which requires that the consolidated amount
of current and deferred income tax expense for a group that files a consolidated
income tax return be allocated among members of the group when those members
issue separate financial statements. Perpetual allocates a portion of its
consolidated current and deferred income tax expense to us as if we and our
subsidiaries were separate taxpayers. We record deferred tax assets, to the
extent it is considered more likely than not that such assets will be realized
in future periods, and deferred tax liabilities for the tax effects of the
differences between the bases of its assets and liabilities for tax and
financial reporting purposes. To the extent a deferred tax asset would be
recorded due to the incurrence of losses for federal or Virginia state income
tax purposes, any such benefit recognized is effectively distributed to
Perpetual as such benefit will not be recognized in future years pursuant to the
tax sharing agreement.

Office Space

      ACC leases corporate headquarters space from Riggs Bank which owns office
buildings in Washington, D.C. Riggs Bank is a wholly-owned subsidiary of Riggs.
According to the most recently filed Schedule 13D amendment, approximately 39.7%
of the common stock of Riggs is deemed to be beneficially owned by Joe L.
Allbritton, and 7.1% of the common stock of Riggs is deemed to be beneficially
owned by Barbara B. Allbritton, including in each case 7.0% of the common stock
of which Mr. and Mrs. Allbritton share beneficial ownership. During Fiscal 2004,
ACC paid Riggs Bank $369 for the office space. ACC expects to pay approximately
$385 for such space during Fiscal 2005. We believe that the terms of the lease
are substantially the same or at least as favorable to ACC as those prevailing
for comparable leases involving nonaffiliated companies.

         We lease certain office space to Irides, LLC ("Irides"). Irides is a
wholly-owned subsidiary of Allbritton New Media, Inc. ("ANMI") which in turn is
an 80%-owned subsidiary of Perpetual. The remaining 20% of ANMI is owned by Mr.
Robert L. Allbritton who has options to acquire up to a total of 80% ownership
of ANMI. Charges for this space totaled $129 for Fiscal 2004, and we expect to
receive $133 during Fiscal 2005. We believe that the terms of the lease are
substantially the same or at least as favorable to ACC as those prevailing for
comparable leases involving nonaffiliated companies.

                                       51
<PAGE>

Internet Services

      We have entered into various agreements with Irides to provide our
stations with web site design, hosting and maintenance services. We incurred
fees of $180 to Irides during Fiscal 2004, and we expect to pay fees to Irides
during Fiscal 2005 for services performed of approximately $180. We believe that
the terms and conditions of the agreements are substantially the same or at
least as favorable to us as those prevailing for comparable transactions with or
involving nonaffiliated companies.



                 ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

      Not applicable.



                                     PART IV

               ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

      (a) The following documents are filed as part of this report:

            (1)  Consolidated Financial Statements

                  See Index on p. F-1 hereof.

            (2)  Financial Statement Schedule II--Valuation and Qualifying
                  Accounts and Reserves

                  See Index on p. F-1 hereof.

            (3)  Exhibits

                  See Index on p. A-1 hereof.



                                       52
<PAGE>


                        ALLBRITTON COMMUNICATIONS COMPANY

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


                                                                            Page
                                                                            ----

Report of Independent Registered Public Accounting Firm...................   F-2
Consolidated Balance Sheets as of September 30, 2003 and 2004.............   F-3
Consolidated Statements of Operations and Retained Earnings for Each of
   the Years Ended September 30, 2002, 2003 and 2004......................   F-4
Consolidated Statements of Cash Flows for Each of the Years Ended
   September 30, 2002, 2003 and 2004......................................   F-5
Notes to Consolidated Financial Statements................................   F-6
Financial Statement Schedule for the Years Ended September 30, 2002,
   2003 and 2004
   II--Valuation and Qualifying Accounts and Reserves.....................  F-23

All other schedules are omitted because they are not applicable or the required
information is shown in the consolidated financial statements or the notes
thereto.





                                      F-1
<PAGE>


             Report of Independent Registered Public Accounting Firm


To the Board of Directors and Stockholder
of Allbritton Communications Company

In our opinion, the consolidated financial statements listed in the index on
page F-1 present fairly, in all material respects, the financial position of
Allbritton Communications Company (an indirectly wholly-owned subsidiary of
Perpetual Corporation) and its subsidiaries at September 30, 2004 and 2003, and
the results of their operations and their cash flows for each of the three years
in the period ended September 30, 2004 in conformity with accounting principles
generally accepted in the United States of America. In addition, in our opinion,
the financial statement schedule listed in the index on page F-1 presents
fairly, in all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements. These financial
statements and financial statement schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and financial statement schedule based on our audits. We
conducted our audits of these statements in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

 /s/ PRICEWATERHOUSECOOPERS LLP

PricewaterhouseCoopers LLP
Washington, D.C.
November 16, 2004


                                      F-2
<PAGE>

                                     ALLBRITTON COMMUNICATIONS COMPANY

                                        CONSOLIDATED BALANCE SHEETS
                              (Dollars in thousands except share information)

<TABLE>
<CAPTION>

                                                                                         September 30,
                                                                                       -----------------
                                                                                       2003         2004
                                                                                       ----         ----
ASSETS
<S>                                                                                <C>          <C>
Current assets
      Cash and cash equivalents ................................................   $   3,278    $   7,257
      Accounts receivable, less allowance for doubtful accounts of
        $1,194 and $1,231.......................................................      38,663       36,181
      Program rights ...........................................................      18,862       14,320
      Deferred income taxes ....................................................         842          897
      Other ....................................................................       2,140        1,842
                                                                                   ---------    ---------

            Total current assets ...............................................      63,785       60,497

Property, plant and equipment, net .............................................      53,577       49,560
Intangible assets, net .........................................................     122,982      122,815
Deferred financing costs and other .............................................      10,004        9,035
Cash surrender value of life insurance .........................................      10,848       11,435
Program rights .................................................................         814          636
                                                                                   ---------    ---------

                                                                                   $ 262,010    $ 253,978
                                                                                   =========    =========

LIABILITIES AND STOCKHOLDER'S INVESTMENT
Current liabilities
      Current portion of long-term debt ........................................   $     237    $     162
      Accounts payable .........................................................       2,556        1,974
      Accrued interest payable .................................................      10,553       10,401
      Program rights payable ...................................................      22,530       17,592
      Accrued employee benefit expenses ........................................       4,579        4,264
      Other accrued expenses ...................................................       5,400        7,216
                                                                                   ---------    ---------

            Total current liabilities ..........................................      45,855       41,609

Long-term debt .................................................................     467,451      465,513
Program rights payable .........................................................       1,443        1,169
Deferred rent and other ........................................................       4,148        3,372
Accrued employee benefit expenses ..............................................       1,970        1,834
Deferred income taxes ..........................................................      16,943       21,657
                                                                                   ---------    ---------

            Total liabilities ..................................................     537,810      535,154
                                                                                   ---------    ---------

Commitments and contingent liabilities (Note 10)
Stockholder's investment
      Preferred stock, $1 par value, 1,000 shares authorized, none issued ......          --           --
      Common stock, $.05 par value, 20,000 shares authorized, issued and
         outstanding ...........................................................           1            1
      Capital in excess of par value ...........................................      49,631       49,631
      Retained earnings ........................................................      (4,964)       8,617
      Distributions to owners, net (Note 8) ....................................    (320,468)    (339,425)
                                                                                   ---------    ---------

            Total stockholder's investment .....................................    (275,800)    (281,176)
                                                                                   ---------    ---------

                                                                                   $ 262,010    $ 253,978
                                                                                   =========    =========
</TABLE>

                    See accompanying notes to consolidated financial statements.


                                      F-3
<PAGE>



                                   ALLBRITTON COMMUNICATIONS COMPANY

                     CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
                                         (Dollars in thousands)

<TABLE>
<CAPTION>

                                                                                Year Ended September 30,
                                                                             ------------------------------
                                                                             2002         2003         2004
                                                                             ----         ----         ----
<S>                                                                      <C>          <C>          <C>
Operating revenues, net ..............................................   $ 196,169    $ 202,590    $ 203,270
                                                                         ---------    ---------    ---------

Television operating expenses, excluding depreciation
        and amortization..............................................     126,001      125,224      127,586
Depreciation and amortization ........................................      13,310       10,785        9,908
Corporate expenses ...................................................       6,004        6,379        4,908
                                                                         ---------    ---------    ---------

                                                                           145,315      142,388      142,402
                                                                         ---------    ---------    ---------

Operating income .....................................................      50,854       60,202       60,868
Nonoperating income (expense)
      Interest income
            Related party ............................................          92           88          162
            Other ....................................................          94          343           24
      Interest expense
            Related party ............................................        (785)          --           --
            Other ....................................................     (41,561)     (40,647)     (36,759)
      Loss on early repayment of debt ................................          --      (23,194)          --
      Other, net .....................................................      (1,225)      (1,164)      (1,382)
                                                                         ---------    ---------    ---------
Income (loss) before income taxes and cumulative effect of change
        in accounting principle ......................................       7,469       (4,372)      22,913
Provision for (benefit from) income taxes ............................       3,955       (1,421)       9,332
                                                                         ---------    ---------    ---------
Income (loss) before cumulative effect of change in
        accounting principle .........................................       3,514       (2,951)      13,581
Cumulative effect of change in accounting principle, net of
        income tax benefit of $2,027 (Note 5) ........................          --        2,973           --
                                                                         ---------    ---------    ---------

Net income (loss) ....................................................       3,514       (5,924)      13,581
Retained earnings, beginning of year .................................       3,974        4,917       (4,964)
Tax benefit distributed ..............................................      (2,571)      (3,957)          --
                                                                         ---------    ---------    ---------

Retained earnings, end of year .......................................   $   4,917    $  (4,964)   $   8,617
                                                                         =========    =========    =========
</TABLE>


                    See accompanying notes to consolidated financial statements.


                                      F-4
<PAGE>


                                            ALLBRITTON COMMUNICATIONS COMPANY

                                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                  (Dollars in thousands)
<TABLE>
<CAPTION>
                                                                                            Year Ended September 30,
                                                                                         ------------------------------
                                                                                         2002         2003         2004
                                                                                         ----         ----         ----
<S>                                                                                  <C>          <C>          <C>
Cash flows from operating activities:
      Net income (loss) .........................................................    $   3,514    $  (5,924)   $  13,581
                                                                                     ---------    ---------    ---------
      Adjustments to reconcile net income (loss) to net cash provided by
        operating activities:
           Depreciation and amortization ........................................       13,310       10,785        9,908
           Cumulative effect of change in accounting principle ..................         --          2,973         --
           Other noncash charges ................................................        1,512        1,464        1,523
           Noncash tax benefits .................................................       (2,571)      (3,957)        --
           Loss on early repayment of debt ......................................         --         23,194         --
           Provision for doubtful accounts ......................................          677          623          584
           Loss (gain) on disposal of assets ....................................          139           13          (12)
           Changes in assets and liabilities:
                 (Increase) decrease in assets:
                     Accounts receivable ........................................       (2,548)      (2,119)       1,898
                     Program rights .............................................        1,161          643        4,720
                     Other current assets .......................................          218         --            298
                     Other noncurrent assets ....................................       (1,012)        (247)        (843)
                     Deferred income taxes ......................................          (80)         (35)         (55)
                 Increase (decrease) in liabilities:
                     Accounts payable ...........................................          535         (447)        (582)
                     Accrued interest payable ...................................          (65)        (760)        (152)
                     Accrued interest payable--related parties ..................          552         --           --
                     Program rights payable .....................................         (826)        (906)      (5,212)
                     Accrued employee benefit expenses ..........................          243         (236)        (451)
                     Other accrued expenses .....................................        5,198       (4,970)       1,816
                     Deferred rent and other liabilities ........................        1,839        1,059         (776)
                     Deferred income taxes ......................................        6,224        2,785        4,714
                                                                                     ---------    ---------    ---------
                           Total adjustments ....................................       24,506       29,862       17,378
                                                                                     ---------    ---------    ---------
                           Net cash provided by operating activities ............       28,020       23,938       30,959
                                                                                     ---------    ---------    ---------

Cash flows from investing activities:
      Capital expenditures ......................................................      (26,308)      (7,700)      (5,816)
      Acquisition of certain assets of Allnewsco ................................      (20,213)        --           --
      Proceeds from disposal of assets ..........................................           63           66          104
                                                                                     ---------    ---------    ---------
                           Net cash used in investing activities ................      (46,458)      (7,634)      (5,712)
                                                                                     ---------    ---------    ---------

Cash flows from financing activities:
      Proceeds from issuance of debt ............................................         --        451,949         --
      Principal payments on long-term debt and capital leases ...................       (1,422)    (425,577)        (238)
      Draws (repayments) under line of credit, net ..............................       14,864          136       (2,000)
      Redemption premiums and related costs of early repayment of debt ..........         --        (17,409)        --
      Deferred financing costs ..................................................         (291)      (9,578)         (73)
      Distributions to owners and dividends, net of certain charges .............     (342,753)     (24,730)     (31,322)
      Repayments of distributions to owners .....................................      342,615        5,884       12,365
      Notes issued from Allnewsco to Perpetual ..................................        3,895         --           --
                                                                                     ---------    ---------    ---------
                           Net cash provided by (used in) financing activities...       16,908      (19,325)     (21,268)
                                                                                     ---------    ---------    ---------

Net (decrease) increase in cash and cash equivalents ............................       (1,530)      (3,021)       3,979
Cash and cash equivalents, beginning of year ....................................        7,829        6,299        3,278
                                                                                     ---------    ---------    ---------
Cash and cash equivalents, end of year ..........................................    $   6,299    $   3,278    $   7,257
                                                                                     =========    =========    =========

Supplemental disclosure of cash flow information:
           Cash paid for interest ...............................................    $  41,420    $  41,129    $  36,570
                                                                                     =========    =========    =========
           Cash paid for interest to related parties ............................    $     233    $    --      $    --
                                                                                     =========    =========    =========
           Cash paid for state income taxes .....................................    $     624    $    --      $    --
                                                                                     =========    =========    =========
      Non-cash investing and financing activities:
           Equipment acquired under capital leases ..............................    $      24    $    --      $    --
                                                                                     =========    =========    =========
</TABLE>

                    See accompanying notes to consolidated financial statements.


                                      F-5
<PAGE>


                        ALLBRITTON COMMUNICATIONS COMPANY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 (Dollars in thousands except share information)

NOTE 1--THE COMPANY

      Allbritton Communications Company (ACC or the Company) is an indirectly
wholly-owned subsidiary of Perpetual Corporation (Perpetual), a Delaware
corporation, which is controlled by Mr. Joe L. Allbritton. The Company owns ABC
network-affiliated television stations serving seven geographic markets:

Station                         Market
--------------------            ------------------------------------------------
WJLA                            Washington, D.C.
WBMA/WCFT/WJSU                  Birmingham (Anniston and Tuscaloosa), Alabama
WHTM                            Harrisburg-Lancaster-York-Lebanon, Pennsylvania
KATV                            Little Rock, Arkansas
KTUL                            Tulsa, Oklahoma
WSET                            Roanoke-Lynchburg, Virginia
WCIV                            Charleston, South Carolina


      The Company also provides 24-hour per day basic cable television
programming to the Washington, D.C. market, through NewsChannel 8, primarily
focused on regional and local news for the Washington, D.C. metropolitan area.
The operations of NewsChannel 8 have been integrated with WJLA.

      Based upon regular assessments of its operations, the Company has
determined that the economic characteristics, services, production processes,
customer type and distribution methods for the Company's operations are
substantially similar and have therefore been aggregated as one reportable
segment.

NOTE 2--ACQUISITION OF ALLNEWSCO AND BASIS OF PRESENTATION

      On March 5, 2002, the Company entered into an asset purchase agreement
with ALLNEWSCO, Inc. (Allnewsco). The Company consummated the transaction on
September 16, 2002, acquiring certain of the assets of Allnewsco in exchange for
$20,000 in cash and the cancellation of a $20,000 note receivable from
Allnewsco. The assets acquired consisted primarily of cable affiliation
agreements and certain technical equipment and vehicles related to its
newsgathering and cable distribution operations. Allnewsco has been controlled
since its inception by Perpetual which also controls the Company. Because both
the Company and Allnewsco are controlled by Perpetual, the Company was required
to account for the acquisition as a transfer of assets within a group under
common control. Under this accounting, the Company and Allnewsco were treated as
if they have always been combined for accounting and financial reporting
purposes. As a result, the Company's consolidated financial statements for all
periods prior to the asset acquisition reflect the combined results of the
Company and Allnewsco. In addition to combining the separate historical results
of the Company and Allnewsco, the consolidated financial statements include all
adjustments necessary to conform accounting methods and presentation, to the
extent they were different, and to eliminate significant intercompany
transactions.


                                      F-6
<PAGE>

                        ALLBRITTON COMMUNICATIONS COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (Dollars in thousands except share information)


      Selected combining financial data for the year ended September 30, 2002 is
as follows:
<TABLE>
<CAPTION>

                                                ACC        Allnewsco      Adjustment     Combined
                                                ---        ---------      ----------     --------
<S>                                           <C>           <C>             <C>           <C>
Year Ended September 30, 2002
      Net operating revenues..............    185,944       10,225             --         196,169
      Net income..........................      6,468       (4,764)         1,810           3,514
</TABLE>


      The operating results of Allnewsco presented above consist of the period
from October 1, 2001 through the acquisition date by ACC of September 16, 2002.

      The adjustment to net income represents the income tax benefit associated
with combining ACC and Allnewsco. Because Perpetual has historically filed
consolidated federal and Virginia state income tax returns including the
operating results of both ACC and Allnewsco, certain tax benefits were realized
by Perpetual associated with Allnewsco's net operating losses in the
consolidated tax returns. In accordance with Statement of Financial Accounting
Standards (SFAS) No. 109, "Accounting for Income Taxes," the combined results of
ACC and Allnewsco have been adjusted to reflect the historical tax benefits
which would have been recorded for financial reporting purposes by the combined
entity during each period presented.

      As the Company did not acquire all of the assets or assume all of the
liabilities of Allnewsco, certain expenses reported in the consolidated
financial statements for the year ended September 30, 2002 have not been
incurred subsequent to the asset acquisition. Specifically, the Company did not
acquire or assume amounts due from Allnewsco to Perpetual. The accompanying
consolidated financial statements include $785 of related party interest expense
relating to amounts due from Allnewsco to Perpetual during the year ended
September 30, 2002 that do not recur subsequent to the acquisition. The excess
of the $40,000 purchase price over the net book value of the Allnewsco assets
and liabilities acquired by the Company of $25,325 has been recorded as an
adjustment to the Company's capital in excess of par value upon consummation of
the transaction.


NOTE 3--SIGNIFICANT ACCOUNTING POLICIES

      Consolidation--The consolidated financial statements include the accounts
of the Company and its wholly and majority-owned subsidiaries after elimination
of all significant intercompany accounts and transactions.

      Use of estimates and assumptions--The preparation of financial statements
in conformity with accounting principles generally accepted in the United States
of America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenue and expenses during the reporting period. Actual results
could differ from those estimates and assumptions.

                                      F-7
<PAGE>
                        ALLBRITTON COMMUNICATIONS COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (Dollars in thousands except share information)



      Revenue recognition--Revenues are generated principally from sales of
commercial advertising and are recorded as the advertisements are broadcast net
of agency and national representative commissions and music license fees. For
certain program contracts which provide for the exchange of advertising time in
lieu of cash payments for the rights to such programming, revenue is recorded as
advertisements are broadcast at the estimated fair value of the advertising time
given in exchange for the program rights. Such barter revenue was $6,664, $6,541
and $6,169 for the years ended September 30, 2002, 2003 and 2004, respectively.
Subscriber fee revenues are recognized in the period during which programming is
provided, pursuant to affiliation agreements with cable television systems and
direct broadcast satellite service providers.

      Cash and cash equivalents--The Company considers all highly liquid
investments purchased with original maturities of three months or less to be
cash equivalents.

      Program rights--The Company has entered into contracts for the rights to
television programming. Payments related to such contracts are generally made in
installments over the contract period. Program rights which are currently
available and the liability for future payments under such contracts are
reflected in the consolidated balance sheets. Program rights are amortized
primarily using the straight-line method over the twelve month rental period.
Certain program rights with lives greater than one year are amortized using
accelerated methods. Program rights expected to be amortized in the succeeding
year and amounts payable within one year are classified as current assets and
liabilities, respectively. The program rights are reflected in the consolidated
balance sheets at the lower of unamortized cost or estimated net realizable
value based on management's expectation of the net future cash flows to be
generated by the programming.

      Property, plant and equipment--Property, plant and equipment are recorded
at cost and depreciated over the estimated useful lives of the assets.
Maintenance and repair expenditures are charged to expense as incurred and
expenditures for modifications and improvements which increase the expected
useful lives of the assets are capitalized. Depreciation expense is computed
using the straight-line method for buildings and straight-line and accelerated
methods for furniture, machinery and equipment. Leasehold improvements are
amortized using the straight-line method over the lesser of the term of the
related lease or the estimated useful lives of the assets.

The useful lives of property, plant and equipment for purposes of computing
depreciation and amortization expense are:

Buildings..................................................   15-40 years
Leasehold improvements.....................................    5-32 years
Furniture, machinery and equipment and equipment
   under capital leases....................................    3-20 years

                                      F-8
<PAGE>
                        ALLBRITTON COMMUNICATIONS COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (Dollars in thousands except share information)



      Intangible assets--Intangible assets consist of values assigned to
broadcast licenses as well as favorable terms on contracts and leases. The
amounts originally assigned to intangible assets were based on the results of
independent valuations. SFAS No. 142, "Goodwill and Other Intangible Assets,"
was issued in June 2001. SFAS No. 142 addresses the financial accounting and
reporting for acquired goodwill and other intangible assets. Under the new
rules, goodwill and intangible assets deemed to have indefinite lives are no
longer amortized but are subject to annual impairment tests. Other intangible
assets continue to be amortized over their useful lives. SFAS No. 142 became
effective for the Company's fiscal year ended September 30, 2003 (See Note 5).

      Prior to the adoption of SFAS No. 142, all intangible assets were
amortized on a straight-line basis over their estimated useful lives. Broadcast
licenses were amortized over 40 years and the premiums for favorable terms on
contracts and leases were amortized over the terms of the related contracts and
leases (11 to 25 years). The Company assessed the recoverability of intangible
assets on an ongoing basis by evaluating whether amounts could be recovered
through undiscounted cash flows over the remaining amortization period.

      Upon adoption of SFAS No. 142, the Company's indefinite lived intangible
assets, consisting of broadcast licenses, are no longer amortized but are
subject to periodic impairment tests. In testing for impairment, the fair value
of the broadcast licenses are determined by applying an estimated market
multiple to the broadcast cash flow generated by the respective market. Market
multiples are determined based on recent transactions within the industry,
information available regarding publicly traded peer companies and the
respective station's competitive position within its market. Appropriate
allocation is made to each station's tangible and intangible assets in
determining the fair value of the station's broadcast licenses. Other intangible
assets continue to be amortized over the terms of the related contracts and
leases, and the recoverability of these assets is assessed on an ongoing basis
by evaluating whether amounts can be recovered through undiscounted cash flows
over the remaining amortization period.

      Deferred financing costs--Costs incurred in connection with the issuance
of long-term debt are deferred and amortized to other nonoperating expense on a
straight-line basis over the term of the underlying financing agreement.

      Deferred rent--Rent concessions and scheduled rent increases in connection
with operating leases are recognized as adjustments to rental expense on a
straight-line basis over the associated lease term.

      Concentration of credit risk--Financial instruments that potentially
subject the Company to concentrations of credit risk consist principally of
certain cash and cash equivalents and receivables from advertisers. The Company
invests its excess cash with high-credit quality financial institutions and at
September 30, 2004 had an overnight repurchase agreement with Riggs Bank N.A.
(Riggs Bank) for $5,448 (See Note 8). Concentrations of credit risk with respect
to receivables from advertisers are limited as the Company's advertising base
consists of large national advertising agencies and high-credit quality local
advertisers. As is customary in

                                      F-9
<PAGE>
                        ALLBRITTON COMMUNICATIONS COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (Dollars in thousands except share information)



the broadcasting industry, the Company does not require collateral for its
credit sales, which are typically due within thirty days.

      Income taxes--The operations of the Company are included in a consolidated
federal income tax return filed by Perpetual. In accordance with the terms of a
tax sharing agreement between the Company and Perpetual, the Company is required
to pay to Perpetual its federal income tax liability, computed based upon
statutory federal income tax rates applied to the Company's consolidated taxable
income. The Company files separate state income tax returns with the exception
of Virginia, which is included in a combined state income tax return filed by
Perpetual. In accordance with the terms of the tax sharing agreement, the
Company is required to pay to Perpetual its combined Virginia income tax
liability, computed based upon statutory Virginia income tax rates applied to
the Company's combined Virginia net taxable income. Taxes payable to Perpetual
are not reduced by losses generated in prior years by the Company. In addition,
the amounts payable by the Company to Perpetual under the tax sharing agreement
are not reduced if losses of other members of the Perpetual group are utilized
to offset taxable income of the Company for purposes of the Perpetual
consolidated federal or Virginia income tax returns.

      The provision for income taxes is determined in accordance with SFAS No.
109, which requires that the consolidated amount of current and deferred income
tax expense for a group that files a consolidated income tax return be allocated
among members of the group when those members issue separate financial
statements. Perpetual allocates a portion of its consolidated current and
deferred income tax expense to the Company as if the Company and its
subsidiaries were separate taxpayers. The Company records deferred tax assets,
to the extent it is more likely than not that such assets will be realized in
future periods, and deferred tax liabilities for the tax effects of the
differences between the bases of its assets and liabilities for tax and
financial reporting purposes. To the extent a deferred tax asset would be
recorded due to the incurrence of net losses for federal or Virginia state
income tax purposes, any such benefit recognized is effectively distributed to
Perpetual as such benefit will not be recognized in future years pursuant to the
tax sharing agreement.

      Fair value of financial instruments--The carrying amount of the Company's
cash and cash equivalents, accounts receivable, accounts payable, accrued
expenses and program rights payable approximate fair value due to the short
maturity of those instruments. The Company estimates the fair value of its
long-term debt using either quoted market prices or by discounting the required
future cash flows under its debt using borrowing rates currently available to
the Company, as applicable.

      Earnings per share--Earnings per share data are not presented since the
Company has only one shareholder.

                                      F-10
<PAGE>
                        ALLBRITTON COMMUNICATIONS COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (Dollars in thousands except share information)



      New Accounting Standards-- In September 2004, the Securities and Exchange
Commission ("SEC") announced that the "residual method" should no longer be used
to value intangible assets other than goodwill. Rather, a "direct value method"
should be used to determine the fair value of all intangible assets for purposes
of impairment testing, including those assets previously valued using the
residual method. Any impairment resulting from application of a direct value
method should be reported as a cumulative effect of a change in accounting
principle. This announcement will be effective no later than the beginning of
the Company's year ending September 30, 2006. The Company's intangible assets
are valued using a residual method, and the Company is currently evaluating the
impact, if any, that a direct value method valuation may have on the financial
position or results of operations.


NOTE 4--PROPERTY, PLANT AND EQUIPMENT

      Property, plant and equipment consists of the following:

<TABLE>
<CAPTION>
                                                          September 30,
                                                       ------------------
                                                       2003          2004
                                                       ----          ----

<S>                                               <C>           <C>
Buildings and leasehold improvements...........   $   30,815    $   30,958
Furniture, machinery and equipment.............      138,783       136,311
Equipment under capital leases.................        2,544           773
                                                  ----------    ----------
                                                     172,142       168,042
Less accumulated depreciation..................     (122,320)     (121,824)
                                                  ----------    ----------
                                                      49,822        46,218
Land...........................................        2,889         3,016
Construction-in-progress.......................          866           326
                                                  ----------    ----------
                                                  $   53,577    $   49,560
                                                  ==========    ==========
</TABLE>

      Depreciation and amortization expense was $9,052, $10,617 and $9,741 for
the years ended September 30, 2002, 2003 and 2004, respectively, which includes
amortization of equipment under capital leases.


NOTE 5--INTANGIBLE ASSETS

       Upon adoption of SFAS No. 142 on October 1, 2002, the Company performed
the first of the required impairment tests on its indefinite lived intangible
assets. The fair value of the Company's broadcast licenses was determined by
applying an estimated market multiple to the broadcast cash flow generated by
the respective market. Market multiples were determined based on recent
transactions within the industry, information available regarding publicly
traded

                                      F-11
<PAGE>
                        ALLBRITTON COMMUNICATIONS COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (Dollars in thousands except share information)



peer companies and the respective station's competitive position within its
market. Appropriate allocation was made to each station's tangible and
intangible assets in determining the fair value of the station's broadcast
licenses. As a result of these tests, it was determined that one of the
Company's broadcast licenses was impaired. Accordingly, the Company recorded a
non-cash, after-tax impairment charge of $2,973 related to the carrying value of
its indefinite lived intangible assets. This charge was recorded as a cumulative
effect of a change in accounting principle during the three months ended
December 31, 2002. The carrying value of the Company's broadcast licenses at
September 30, 2003 and 2004 was $122,290.

       Other intangible assets consist of the following:
<TABLE>
<CAPTION>
                                                           September 30,
                                                         -----------------
                                                         2003         2004
                                                         ----         ----
<S>                                                   <C>          <C>
Gross carrying amount.............................    $  6,174     $  6,174
Less accumulated amortization.....................      (5,482)      (5,649)
                                                      --------     --------

Net carrying amount...............................    $    692     $    525
                                                      ========     ========
</TABLE>


      Amortization expense was $4,258, $168 and $167 for the years ended
September 30, 2002, 2003 and 2004, respectively. Amortization expense is
expected to be $165 for year ending September 30, 2005, $164 for the year ending
September 30, 2006, $159 for the year ending September 30, 2007 and $37 for the
year ending September 30, 2008.

      The following table adjusts reported income before cumulative effect of
change in accounting principle and reported net income for the year ended
September 30, 2002 (prior to the adoption date of SFAS No. 142) to exclude
amortization of indefinite lived intangible assets:
<TABLE>
<CAPTION>

                                                   Income Before
                                                 Cumulative Effect
                                                   Of Change in
                                                    Accounting          Net
                                                     Principle        Income
                                                 -----------------    ------
<S>                                                   <C>            <C>
Year Ended September 30, 2002
As reported........................................   $ 3,514        $ 3,514
Amortization of broadcast licenses, net of tax.....     2,744          2,744
                                                      -------        -------

Adjusted...........................................   $ 6,258        $ 6,258
                                                      =======        =======
</TABLE>

                                      F-12
<PAGE>
                        ALLBRITTON COMMUNICATIONS COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (Dollars in thousands except share information)




NOTE 6--LONG-TERM DEBT

       On December 20, 2002, the Company issued $275,000 principal amount of
7 3/4% Senior Subordinated Notes due 2012 (the "7 3/4% Notes") at par. The net
proceeds, together with borrowings under the Company's Revolving Credit
Agreement, were used to purchase and redeem the Company's $275,000 9 3/4% Senior
Subordinated Debentures due 2007 (the "9 3/4% Debentures") as well as to pay the
fees and expenses associated with the offering of the 7 3/4% Notes. As of
January 21, 2003, all of the 9 3/4% Debentures had been purchased or redeemed.

       On February 6, 2003, the Company issued an additional $180,000 principal
amount of its 7 3/4% Notes at a price of 98.305%. The net proceeds were used to
redeem the Company's $150,000 8 7/8% Senior Subordinated Notes due 2008 (the
"8 7/8% Notes"), fund the redemption premium for the 8 7/8% Notes, pay the fees
and expenses associated with the offering of the additional 7 3/4% Notes and
repay borrowings outstanding under the Company's Revolving Credit Agreement. On
March 10, 2003, all of the 8 7/8% Notes were redeemed.

       As a result of the purchase and redemption of its 9 3/4% Debentures as
well as the redemption of its 8 7/8% Notes, the Company recorded a pre-tax
charge of $23,194 during the quarter ended March 31, 2003. The charge was
recorded in income from continuing operations in accordance with the
requirements of SFAS No. 145, "Rescission of FASB Statements Nos. 4, 44 and 64,
Amendment of FASB Statement No. 13 and Technical Corrections," which became
effective for the Company's fiscal year ended September 30, 2003. SFAS No. 145
generally requires any gains or losses associated with early extinguishments of
debt be recorded as a component of income from continuing operations rather than
as an extraordinary item.

       On February 14, 2003, the Company commenced a registered exchange offer
of a new series of 7 3/4% Notes in exchange for the initial series of 7 3/4%
Notes issued December 20, 2002 and consummated the exchange offer following its
expiration on March 17, 2003 by issuing the new series of notes in exchange for
notes of the initial series properly tendered. On June 17, 2003, the Company
commenced a registered exchange offer of the same new series of 7 3/4% Notes in
exchange for the initial series of 7 3/4% Notes issued February 6, 2003 and
consummated the exchange offer following its expiration on July 16, 2003 by
issuing such new series of notes in exchange for notes of the initial series
properly tendered. The terms of the exchange notes are substantially identical
to those of the initial notes in each case, except that transfer restrictions
and registration rights relating to the initial notes do not apply to the
exchange notes.

                                      F-13
<PAGE>
                        ALLBRITTON COMMUNICATIONS COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (Dollars in thousands except share information)




      Outstanding debt consists of the following:
<TABLE>
<CAPTION>

                                                                                              September 30,
                                                                                          --------------------
                                                                                          2003            2004
                                                                                          ----            ----
<S>                                                                                   <C>             <C>
Senior Subordinated Notes, due December 15, 2012 with interest payable
   semi-annually at 7 3/4%.........................................................   $ 455,000       $ 455,000
Amended and Restated Revolving Credit Agreement, maximum amount of $70,000,
   expiring March 27, 2006, secured by the outstanding stock of the Company and
   its subsidiaries, interest payable quarterly at various rates from prime plus
   0.25% or LIBOR plus 1.5% depending on certain financial operating tests (4.92%
   at September 30, 2004)..........................................................      15,000          13,000
Master Lease Finance Agreement, expired March 1, 2000 for new acquisitions,
   secured by the assets acquired, interest payable monthly at variable rates as
   determined on the acquisition date for each asset purchased.....................          86              --
Master Equipment Lease Agreement, expired June 30, 2002 for new acquisitions,
   secured by the assets acquired, interest payable monthly at variable rates as
   determined on the acquisition date for each asset purchased (6.45% at September
   30, 2004) (See Note 11).........................................................         516             364
                                                                                      ---------       ---------

                                                                                        470,602         468,364
Less unamortized discount..........................................................      (2,914)         (2,689)
                                                                                      ---------       ---------

                                                                                        467,688         465,675
Less current maturities............................................................        (237)           (162)
                                                                                      ---------       ---------

                                                                                      $ 467,451       $ 465,513
                                                                                      =========       =========
</TABLE>


      Unamortized deferred financing costs of $9,442 and $8,217 at September 30,
2003 and 2004, respectively, are included in deferred financing costs and other
noncurrent assets in the accompanying consolidated balance sheets. Amortization
of the deferred financing costs for the years ended September 30, 2002, 2003 and
2004 was $1,266, $1,298 and $1,298, respectively, which is included in other
nonoperating expenses.

      Under the existing financing agreements, the Company is subject to
restrictive covenants, which place limitations upon payments of cash dividends,
issuance of capital stock, investment transactions, incurrence of additional
obligations and transactions with affiliates. In addition, under the Revolving
Credit Agreement, the Company must maintain compliance with certain financial
covenants. As of September 30, 2004, the Company was in compliance with such
covenants. The Company is also required to pay a commitment fee ranging from
0.5% to 0.75% per annum based on the amount of any unused portion of the
Revolving Credit Agreement.

                                      F-14
<PAGE>
                        ALLBRITTON COMMUNICATIONS COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (Dollars in thousands except share information)



        The Company estimates the fair value of its Senior Subordinated Notes to
be approximately $464,000 and $470,000 at September 30, 2003 and 2004,
respectively. The carrying value of the Company's Revolving Credit Agreement
approximates fair value as borrowings bear interest at market rates.


NOTE 7--INCOME TAXES

      The provision for (benefit from) income taxes consists of the following:
<TABLE>
<CAPTION>

                                                Years Ended September 30,
                                              -----------------------------
                                              2002         2003        2004
                                              ----         ----        ----
<S>                                        <C>          <C>          <C>
Current
      Federal........................      $ (2,571)    $ (3,830)    $ 4,231
      State..........................           382         (341)        442
                                           --------     --------     -------
                                             (2,189)      (4,171)      4,673
                                           --------     --------     -------
Deferred
      Federal........................         5,564        2,980       3,533
      State..........................           580         (230)      1,126
                                           --------     --------     -------
                                              6,144        2,750       4,659
                                           --------     --------     -------
                                           $  3,955     $ (1,421)    $ 9,332
                                           ========     ========     =======
</TABLE>


      The adoption of SFAS No. 142 on October 1, 2002 resulted in the Company
recording a $5,000 pre-tax impairment charge during the year ended September 30,
2003 (see Note 5). The charge was recorded as a cumulative effect of change in
accounting principle, net of income tax benefit of $2,027, in the accompanying
statement of operations and retained earnings. The $2,027 benefit for income
taxes represented a deferred tax benefit.

                                      F-15
<PAGE>
                        ALLBRITTON COMMUNICATIONS COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (Dollars in thousands except share information)




      The components of deferred income tax assets (liabilities) are as follows:
<TABLE>
<CAPTION>

                                                                          September 30,
                                                                       ------------------
                                                                       2003          2004
                                                                       ----          ----
<S>                                                                <C>           <C>
Deferred income tax assets:
      State and local operating loss carryforwards..............   $   3,489     $   4,746
      Accrued employee benefits.................................       1,093         1,109
      Deferred rent.............................................       1,064         1,185
      Allowance for accounts receivable.........................         457           472
      Other.....................................................         949           636
                                                                   ---------     ---------

                                                                       7,052         8,148
      Less valuation allowance..................................      (2,623)       (4,246)
                                                                   ---------     ---------

                                                                       4,429         3,902
                                                                   ---------     ---------
Deferred income tax liabilities:
      Depreciation and amortization.............................     (20,530)      (24,662)
                                                                   ---------     ---------

Net deferred income tax liabilities.............................   $ (16,101)    $ (20,760)
                                                                   =========     =========
</TABLE>


      The Company has approximately $99,500 in state and local operating loss
carryforwards in certain jurisdictions available for future use for state and
local income tax purposes which expire in various years from 2006 through 2024.
The change in the valuation allowance for deferred tax assets of $173, $630 and
$1,623 during the years ended September 30, 2002, 2003 and 2004, respectively,
principally resulted from management's evaluation of the recoverability of the
loss carryforwards.

      The following table reconciles the statutory federal income tax rate to
the Company's effective income tax rate for income (loss) before extraordinary
loss:

<TABLE>
<CAPTION>

                                                                       Years ended September 30,
                                                                     ----------------------------
                                                                     2002        2003        2004
                                                                     ----        ----        ----
<S>                                                                  <C>         <C>         <C>
Statutory federal income tax rate................................    34.0%       34.0%       34.0%
State income taxes, net of federal income tax benefit............     7.9        25.8        (0.9)
Non-deductible expenses, principally amortization of certain
   intangible assets, insurance premiums and meals
   and entertainment.............................................     8.7       (12.9)        0.5
Change in valuation allowance....................................     2.3       (14.4)        7.1
Other, net.......................................................     0.1         0.0         0.0
                                                                     ----        ----        ----

Effective income tax rate........................................    53.0%       32.5%       40.7%
                                                                     ====        ====        ====
</TABLE>

                                      F-16
<PAGE>
                        ALLBRITTON COMMUNICATIONS COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (Dollars in thousands except share information)




NOTE 8--TRANSACTIONS WITH OWNERS AND RELATED PARTIES

Distributions to Owners, Net

      In the ordinary course of business, the Company makes cash advances in the
form of distributions to Perpetual. At present, the primary source of repayment
of the net advances from the Company is through the ability of the Company to
pay dividends or make other distributions. There is no immediate intent for
these amounts to be repaid. Accordingly, such amounts have been treated as a
reduction of stockholder's investment and described as "distributions" in the
accompanying consolidated balance sheets. The weighted average amount of
non-interest bearing advances outstanding was $323,885, $313,339 and $322,616
during Fiscal 2002, 2003 and 2004, respectively.

      During the year ended September 30, 2003, the Company declared and paid
cash dividends of $250 per common share, or $5,000. The Company recorded these
dividends in Distributions to owners, net when declared.

      Additionally, Perpetual historically advanced cash to Allnewsco in the
form of unsecured demand notes bearing interest at a rate of 7.5%. The notes
payable from Allnewsco to Perpetual are included in distributions to owners as
presented in the table below, conforming the presentation of cash transactions
between the Company, Allnewsco and Perpetual. As ACC did not acquire or assume
amounts due from Allnewsco to Perpetual, no amount is outstanding from the
Company under such notes at September 30, 2002, 2003 or 2004.

      The operations of the Company are included in a consolidated federal
income tax return and a combined Virginia state income tax return filed by
Perpetual. The Company is charged by Perpetual and makes payments to Perpetual
for federal and Virginia state income taxes, which are computed in accordance
with the terms of a tax sharing agreement between the Company and Perpetual.
Because Perpetual has historically filed consolidated federal and Virginia state
income tax returns including the operating results of both ACC and Allnewsco,
certain tax benefits were realized by Perpetual associated with Allnewsco's net
operating losses in the consolidated tax returns. In accordance with SFAS No.
109, the combined results of ACC and Allnewsco have been adjusted to reflect the
historical tax benefits which would have been recorded for financial reporting
purposes by the combined entity during each period presented. The cumulative
effect of the tax benefits associated with combining ACC and Allnewsco of
$17,772 has been reflected as a receivable which was not acquired upon
consummation of the Allnewsco transaction.


                                      F-17
<PAGE>
                        ALLBRITTON COMMUNICATIONS COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (Dollars in thousands except share information)



      The components of distributions to owners and the related activity during
Fiscal 2002, 2003 and 2004 consist of the following:

<TABLE>
<CAPTION>

                                                                                      Federal and
                                                   ACC              Allnewsco        Virginia State         Net
                                              Distributions        Notes Payable       Income Tax      Distributions
                                                to Owners          to Perpetual        Receivable        to Owners
                                                ---------          ------------        ----------        ---------
<S>                                             <C>                 <C>                <C>               <C>
Balance as of September 30, 2001.............   $ 301,670           $  (9,508)         $  17,586         $ 309,748

Cash advances to Perpetual...................     342,567                                                  342,567
Repayment of cash advances from
   Perpetual.................................    (342,615)                                                (342,615)
Issuance of notes payable to Perpetual.......                          (3,895)                              (3,895)
Benefit for federal and state income
   taxes, including tax benefit
   associated with combining ACC and
   Allnewsco of $1,810.......................                                              2,571             2,571
Payment of income taxes......................                                                186               186
Distribution of tax benefit..................                                             (2,571)           (2,571)
Allnewsco balances not acquired..............                          13,403            (17,772)           (4,369)
                                                ---------           ---------          ---------         ---------

Balance as of September 30, 2002.............     301,622                  --                 --           301,622

Cash advances and dividends to Perpetual.....      24,730                                                   24,730
Repayment of cash advances from
   Perpetual.................................      (5,884)                                                  (5,884)
Benefit for federal and state income
   taxes.....................................                                              3,957             3,957
Distribution of tax benefit..................                                             (3,957)           (3,957)
                                                ---------           ---------          ---------         ---------

Balance as of September 30, 2003.............     320,468                  --                 --           320,468

Cash advances to Perpetual...................      31,322                                                   31,322
Repayment of cash advances from
   Perpetual.................................     (12,365)                                                 (12,365)
Charge for federal and state income
   taxes.....................................                                             (4,231)           (4,231)
Payment of income taxes......................                                              4,231             4,231
                                                ---------           ---------          ---------         ---------

Balance as of September 30, 2004.............   $ 339,425           $      --          $      --         $ 339,425
                                                =========           =========          =========         =========

</TABLE>

      Subsequent to September 30, 2004 and through November 16, 2004, the
Company made additional net distributions to owners of $154.

                                      F-18
<PAGE>
                        ALLBRITTON COMMUNICATIONS COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (Dollars in thousands except share information)



Other Transactions with Related Parties

      During 1991, the Company loaned $20,000 to Allnewsco. The $20,000, 11.06%
note receivable from Allnewsco was due in January 2008, with the principal
balance also due upon demand. Since the historical consolidated financial
statements have been restated to reflect the combined results of the Company and
Allnewsco as of the beginning of the earliest period presented, the loan amount
as well as the related interest income/expense have been eliminated as
intercompany transactions for all periods presented. At closing of the Allnewsco
transaction on September 16, 2002, the Company cancelled the $20,000 note as
part of the consideration for the acquisition.

      During the years ended September 30, 2002, 2003 and 2004, the Company
earned interest income from Perpetual of $92, $88 and $162, respectively, as a
result of making advances of tax payments in accordance with the terms of the
tax sharing agreement between the Company and Perpetual.

      Management fees of $600, $500 and $500 were paid to Perpetual by the
Company for the years ended September 30, 2002, 2003 and 2004, respectively. The
Company also paid management fees to Mr. Joe L. Allbritton in the amount of $550
for each of the years ended September 30, 2002, 2003 and 2004 and to Mr. Robert
L. Allbritton in the amount of $200 for each of the years ended September 30,
2002, 2003 and 2004, respectively. Management fees are included in corporate
expenses in the consolidated statements of operations.

      During the year ended September 30, 2000, the Company entered into various
agreements with Irides, LLC (Irides) to provide the Company's stations with
certain web site design, hosting and maintenance services. Irides is an
affiliate of the Company which is controlled by Mr. Joe L. Allbritton. The
Company paid fees of $110, $137 and $180 to Irides during the years ended
September 30, 2002, 2003 and 2004, respectively. These fees are included in
television operating expenses in the consolidated statements of operations.
Effective October 1, 2002, Irides leased certain office space from the Company.
Charges for this space totaled $125 and $129 for the years ended September 30,
2003 and 2004, respectively, and such amount is included as an offset to
television operating expenses in the consolidated statements of operations.

      The Company maintains banking and advertising relationships with and
leases certain office space from Riggs Bank. Riggs is a wholly-owned subsidiary
of Riggs National Corporation (Riggs), of which Mr. Joe L. Allbritton is a
significant stockholder. The majority of the Company's cash and cash equivalents
was on deposit with Riggs Bank at September 30, 2003 and 2004 (See Note
3--Concentration of Credit Risk). During the year ended September 30, 2002, the
Company generated $44 in advertising revenue from Riggs Bank. No advertising
revenue was generated during the years ended September 30, 2003 and 2004.
Additionally, the Company incurred $328, $356 and $369 in rental expense related
to office space leased from Riggs Bank for the years ended September 30, 2002,
2003 and 2004, respectively. During the year ended September 30, 2002, Riggs
utilized the Company's aircraft on several occasions and

                                      F-19
<PAGE>
                        ALLBRITTON COMMUNICATIONS COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (Dollars in thousands except share information)



was charged $27 for such usage. There was no usage of the Company's aircraft by
Riggs during the years ended September 30, 2003 and 2004.


NOTE 9--RETIREMENT PLANS

      A defined contribution savings plan is maintained for eligible employees
of the Company and certain of its affiliates. Under the plan, employees may
contribute a portion of their compensation subject to Internal Revenue Service
limitations and the Company contributes an amount equal to 50% of the
contribution of the employee not to exceed 6% of the compensation of the
employee. The amounts contributed to the plan by the Company on behalf of its
employees totaled approximately $1,039, $865 and $980 for the years ended
September 30, 2002, 2003 and 2004, respectively.

      The Company also contributes to certain other multi-employer union pension
plans on behalf of certain of its union employees. The amounts contributed to
such plans totaled approximately $360, $530 and $553 for the years ended
September 30, 2002, 2003 and 2004, respectively.


NOTE 10--COMMITMENTS AND CONTINGENT LIABILITIES

      The Company leases office and studio facilities and machinery and
equipment under operating and capital leases expiring in various years through
2017. Certain leases contain provisions for renewal and extension.

                                      F-20
<PAGE>
                        ALLBRITTON COMMUNICATIONS COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (Dollars in thousands except share information)




      Future minimum lease payments under operating and capital leases which
have remaining noncancellable lease terms in excess of one year as of September
30, 2004 are as follows:
<TABLE>
<CAPTION>

                                                               Operating     Capital
                                                                 Leases       Leases
                                                                 ------       ------
<S>                                                            <C>             <C>
Year ending September 30,
      2005...............................................      $  3,927        $ 180
      2006...............................................         3,808          180
      2007...............................................         2,955           30
      2008...............................................         2,825           --
      2009...............................................         2,906           --
      2010 and thereafter................................        24,874           --
                                                               --------        -----
                                                               $ 41,295          390
                                                               ========
Less amounts representing imputed interest...............                        (26)
                                                                               -----

                                                                                 364
Less current portion.....................................                       (162)
                                                                               -----

Long-term portion of capital lease obligations...........                      $ 202
                                                                               =====
</TABLE>


      Rental expense under operating leases aggregated approximately $3,800,
$3,900 and $4,000 for the years ended September 30, 2002, 2003 and 2004,
respectively.

      The Company has entered into contractual commitments in the ordinary
course of business for the rights to television programming which is not yet
available for broadcast as of September 30, 2004. Under these agreements, the
Company must make specific minimum payments approximating the following:
<TABLE>
<CAPTION>


Year ending September 30,
<S>                                                   <C>
      2005.........................................   $  2,999
      2006.........................................     10,275
      2007.........................................      9,526
      2008.........................................      8,599
      2009.........................................      8,856
      2010 and thereafter..........................     13,335
                                                      --------

                                                      $ 53,590
                                                      ========
</TABLE>

                                      F-21
<PAGE>
                        ALLBRITTON COMMUNICATIONS COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                 (Dollars in thousands except share information)




      The Company has entered into various employment contracts. Future
guaranteed payments under such contracts as of September 30, 2004 approximate
the following:
<TABLE>
<CAPTION>

Year ending September 30,
<S>                                                   <C>
      2005.........................................   $  7,691
      2006.........................................      2,247
      2007.........................................      1,784
      2008.........................................      1,581
      2009.........................................         54
                                                      --------

                                                      $ 13,357
                                                      ========
</TABLE>

      The Company has entered into various deferred compensation agreements with
certain employees. Under these agreements, the Company is required to make
payments aggregating approximately $2,307 during the years 2005 through 2014. At
September 30, 2003 and 2004, the Company has recorded a deferred compensation
liability of approximately $1,328 and $1,508, respectively, which is included as
a component of accrued employee benefit expenses in the accompanying
consolidated balance sheets.

      The Company currently and from time to time is involved in litigation
incidental to the conduct of its business, including suits based on defamation.
The Company is not currently a party to any lawsuit or proceeding which, in the
opinion of management, if decided adverse to the Company, would be likely to
have a material adverse effect on the Company's consolidated financial
condition, results of operations or cash flows.



                                      F-22
<PAGE>

                                                                     SCHEDULE II


                                        ALLBRITTON COMMUNICATIONS COMPANY

                                  VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
                                              (Dollars in thousands)

<TABLE>
<CAPTION>

                                       Balance at       Charged       Charged to
                                      beginning of      to costs        other                        Balance at
Classification                            year        and expenses     accounts       Deductions     end of year
--------------                        ------------    ------------    ----------      ----------     -----------
<S>                                     <C>             <C>           <C>             <C>             <C>
Year ended September 30, 2002:
    Allowance for doubtful
       accounts                         $  1,174        $   677       $ (191)<F3>     $ (613)<F2>     $ 1,047
                                        ========        =======       ======          ======          =======

    Valuation allowance for
       deferred income tax assets       $  1,820        $   173<F1>       --          $   --          $ 1,993
                                        ========        =======       ======          ======          =======


Year ended September 30, 2003:
    Allowance for doubtful
       accounts                         $  1,047        $   623           --          $ (476)<F2>     $ 1,194
                                        ========        =======       ======          ======          =======

    Valuation allowance for
       deferred income tax assets       $  1,993        $   630<F1>       --          $   --          $ 2,623
                                        ========        =======       ======          ======          =======


Year ended September 30, 2004:
    Allowance for doubtful
       accounts                         $  1,194        $   584           --          $ (547)<F2>     $ 1,231
                                        ========        =======       ======          ======          =======

    Valuation allowance for
       deferred income tax assets       $  2,623        $ 1,623<F1>       --          $   --          $ 4,246
                                        ========        =======       ======          ======          =======

<FN>
________________
<F1>  Represents valuation allowance established related to certain net
      operating loss carryforwards and other deferred tax assets for state
      income tax purposes.
<F2>  Write-off of uncollectible accounts, net of recoveries and collection fees.
<F3>  Represents the Allnewsco allowance balance at September 16, 2002, which
      was not acquired by the Company.
</FN>
</TABLE>


                                      F-23
<PAGE>


                                   SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                          ALLBRITTON COMMUNICATIONS COMPANY

                                          By: /s/ ROBERT L. ALLBRITTON
                                             --------------------------------
                                                  Robert L. Allbritton
                                           Chairman and Chief Executive Officer

                                                Date: December 15, 2004

      Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

     /s/ JOE L. ALLBRITTON      Chairman of the Executive      December 15, 2004
------------------------------     Committee and Director
       Joe L. Allbritton


   /s/ BARBARA B. ALLBRITTON    Executive Vice President       December 15, 2004
------------------------------     and Director
     Barbara B. Allbritton


   /s/ ROBERT L. ALLBRITTON     Chairman, Chief Executive      December 15, 2004
------------------------------     Officer and Director
     Robert L. Allbritton          (principal executive officer)


  /s/ FREDERICK J. RYAN, JR.    Vice Chairman, President,      December 15, 2004
------------------------------     Chief Operating Officer
    Frederick J. Ryan, Jr.         and Director


     /s/ STEPHEN P. GIBSON      Senior Vice President and      December 15, 2004
------------------------------     Chief Financial Officer
      Stephen P. Gibson            (principal financial officer)


    /s/ ELIZABETH A. HALEY      Vice President and             December 15, 2004
------------------------------     Controller (principal
      Elizabeth A. Haley           accounting officer)

<PAGE>

                                  EXHIBIT INDEX

Exhibit No.                 Description of Exhibit                      Page No.
-----------                 ----------------------                      --------
    1.1     Purchase Agreement dated December 6, 2002 by and among ACC,     *
            Deutsche Bank  Securities Inc. and Fleet  Securities,  Inc.
            (Incorporated  by reference  to Exhibit 1 of the  Company's
            Form 10-K, No. 333-02302, dated December 17, 2002)

    1.2     Purchase Agreement dated January 28, 2003 by and among ACC,     *
            Deutsche Bank  Securities Inc. and Fleet  Securities,  Inc.
            (Incorporated  by reference to Exhibit 1.2 of the Company's
            Quarterly  Report  on  Form  10-Q,  No.  333-02302,   dated
            February 3, 2003)

    3.1     Certificate  of  Incorporation  of  ACC.  (Incorporated  by     *
            reference   to  Exhibit  3.1  of   Company's   Registration
            Statement on Form S-4, No. 333-02302, dated March 12, 1996)

    3.2     Bylaws of ACC. (Incorporated by reference to Exhibit 3.2 of     *
            Registrant's   Registration  Statement  on  Form  S-4,  No.
            333-02302, dated March 12, 1996)

    4.1     Indenture  dated as of December  20,  2002  between ACC and     *
            State Street Bank and Trust Company,  as Trustee,  relating
            to  the  7  3/4%  Senior   Subordinated   Notes  due  2012.
            (Incorporated  by reference to Exhibit 4.1 of the Company's
            Report on Form 8-K, No. 333-02302, dated December 23, 2002)

    4.2     Supplemental Indenture dated as of February 6, 2003 between     *
            ACC     and     U.S.     Bank     National      Association
            (successor-in-interest  to  State  Street  Bank  and  Trust
            Company), as Trustee, to the Indenture dated as of December
            20,  2002  between  ACC and  State  Street  Bank and  Trust
            Company,  as  Trustee,   relating  to  the  7  3/4%  Senior
            Subordinated Notes due 2012.  (Incorporated by reference to
            Exhibit  4.1 of the  Company's  Report  on  Form  8-K,  No.
            333-02302, dated February 6, 2003)

    4.3     Form of 7 3/4% Series B Senior Subordinated Notes due 2012.     *
            (Incorporated  by reference to Exhibit 4.7 of the Company's
            Quarterly  Report  on  Form  10-Q,  No.  333-02302,   dated
            February 3, 2003)

    4.4     Amended and Restated Revolving Credit Agreement dated as of     *
            March  27,  2001  by and  among  Allbritton  Communications
            Company, certain financial institutions, and Fleet National
            Bank,  as Agent,  and Deutsche  Banc Alex.  Brown Inc.,  as
            Documentation Agent.  (Incorporated by reference to Exhibit
            4.4 of the  Company's  Quarterly  Report on Form 10-Q,  No.
            333-02302, dated May 10, 2001)


                                      A-1
<PAGE>

Exhibit No.                 Description of Exhibit                      Page No.
-----------                 ----------------------                      --------

    4.5     First  Amendment  dated  as of  December  19,  2001  to the     *
            Amended   and   Restated    Revolving   Credit   Agreement.
            (Incorporated  by reference to Exhibit 4.5 of the Company's
            Form 10-K, No. 333-02302, dated December 27, 2001)

    4.6     Second  Amendment  dated as of May 15,  2002 to the Amended     *
            and Restated  Revolving Credit Agreement.  (Incorporated by
            reference to Exhibit 4.6 of the Company's  Quarterly Report
            on Form 10-Q, No. 333-02302, dated August 14, 2002)

    4.7     Third Amendment dated as of December 6, 2002 to the Amended     *
            and Restated  Revolving Credit Agreement.  (Incorporated by
            reference to Exhibit 4.6 of the  Company's  Form 10-K,  No.
            333-02302, dated December 17, 2002)

    4.8     Fourth  Amendment  dated  as of  December  10,  2003 to the     *
            Amended   and   Restated    Revolving   Credit   Agreement.
            (Incorporated  by reference to Exhibit 4.8 of the Company's
            Form 10-K, No. 333-02302, dated December 12, 2003)

   10.1     Registration  Rights  Agreement by and among ACC,  Deutsche     *
            Bank  Securities  Inc.  and  Fleet  Securities  Inc.  dated
            December  20, 2002.  (Incorporated  by reference to Exhibit
            10.1 of the Company's  Quarterly  Report on Form 10-Q,  No.
            333-02302, dated February 3, 2003)

   10.2     Registration  Rights  Agreement by and among ACC,  Deutsche     *
            Bank  Securities  Inc.  and  Fleet  Securities  Inc.  dated
            February 6, 2003.  (Incorporated  by  reference  to Exhibit
            10.2 of the Company's  Registration  Statement on Form S-4,
            No. 333-02302, dated April 11, 2003)

   10.3     Primary    Television    Affiliation    Agreement    (WSET,     *
            Incorporated).   (with  a  schedule   attached   for  other
            stations' substantially identical affiliation  agreements).
            (Incorporated by reference to Exhibit 10.3 of the Company's
            Quarterly Report on Form 10-Q, No. 333-02302, dated May 13,
            2004)**

   10.4     Tax Sharing Agreement effective as of September 30, 1991 by     *
            and among Perpetual Corporation,  ACC and ALLNEWSCO,  Inc.,
            amended as of October 29, 1993.  (Incorporated by reference
            to Exhibit  10.11 of  Company's  Registration  Statement on
            Form S-4, No. 333-02302, dated March 12, 1996)

   10.5     Second Amendment to Tax Sharing  Agreement  effective as of     *
            October 1, 1995 by and among Perpetual Corporation, ACC and
            ALLNEWSCO,  Inc. (Incorporated by reference to Exhibit 10.9
            of the Company's Form 10-K, No.  333-02302,  dated December
            22, 1998)


                                      A-2
<PAGE>

Exhibit No.                 Description of Exhibit                      Page No.
-----------                 ----------------------                      --------

   10.6     Master  Equipment  Lease Agreement dated as of November 22,     *
            2000   between   Fleet   Capital   Corporation   and   ACC.
            (Incorporated   by  reference  to  Exhibit   10.19  of  the
            Company's  Form 10-K,  No.  333-02302,  dated  December 28,
            2000)

   10.7     Amended and Restated Pledge Agreement dated as of March 27,     *
            2001 by and among ACC,  Allbritton Group,  Inc.,  Allfinco,
            Inc., and Fleet National Bank, as Agent.  (Incorporated  by
            reference  to  Exhibit  10.20  of the  Company's  Quarterly
            Report on Form 10-Q, No. 333-02302, dated May 10, 2001)

   10.8     Supplement  No.  1 dated  as of  December  13,  2002 to the     *
            Amended and Restated Pledge Agreement dated as of March 27,
            2001 by and among ACC,  Allbritton Group,  Inc.,  Allfinco,
            Inc. and Fleet  National Bank, as Agent.  (Incorporated  by
            reference  to  Exhibit  10.15  of the  Company's  Quarterly
            Report on Form 10-Q, No. 333-02302, dated February 3, 2003)

   10.9     Joinder  Agreement  dated as of  December  13,  2002 by ACC     *
            Licensee, Inc. to the Amended and Restated Pledge Agreement
            dated as of March  27,  2001 by and among  ACC,  Allbritton
            Group,  Inc.,  Allfinco,  Inc. and Fleet  National Bank, as
            Agent.  (Incorporated  by reference to Exhibit 10.16 of the
            Company's  Quarterly  Report on Form 10-Q,  No.  333-02302,
            dated February 3, 2003)

   14.      Code of Ethics for Senior Financial Officers. (Incorporated     *
            by reference to Exhibit 14 of the Company's  Form 10-K, No.
            333-02302, dated December 12, 2003)

   21.      Subsidiaries of Registrant.

   24.      Powers of Attorney.

   31.1     Certification  of  Chairman  and  Chief  Executive  Officer
            pursuant to Rule 15d-14(a) of the  Securities  Exchange Act
            of 1934, as amended.

   31.2     Certification  of Senior Vice President and Chief Financial
            Officer  pursuant  to  Rule  15d-14(a)  of  the  Securities
            Exchange Act of 1934, as amended.

-----------------
*Previously filed
**Portions have been omitted pursuant to confidential treatment

                                      A-3