SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 10-K

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

                  For the fiscal year ended September 30, 2000
                                       OR

[ ]  TRANSACTION  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 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  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 [X]     NO [ ]

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

As of December 28, 2000,  there were 20,000  shares of Common  Stock,  par value
$.05 per share, outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

None


<PAGE>



As used herein,  unless the context  otherwise  requires,  the term "ACC" or the
"Company" refers 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" refers
to WJLA-TV, a division of ACC (operator of WJLA-TV,  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"  refers to  WCFT-TV,  Tuscaloosa,  Alabama;  "WBMA"  refers  to  WBMA-LP,
Birmingham,  Alabama; and "WJSU" refers to WJSU-TV, Anniston,  Alabama. 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 ACC. "AGI" refers to Allbritton Group,  Inc., which is controlled by
Perpetual and is ACC's parent.  "Westfield" refers to Westfield News Advertiser,
Inc., an affiliate of ACC that is wholly-owned by Joe L. Allbritton.  "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 an 80%-owned  subsidiary of  Perpetual.  "RLA Trust"
refers to the Robert  Lewis  Allbritton  1984 Trust for the benefit of Robert L.
Allbritton,  President and a Director of ACC,  that owns 20% 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..........................................................15
 Item 3.  Legal Proceedings...................................................17
 Item 4.  Submission of Matters to a Vote of Security Holders.................17

Part II
 Item 5.  Market for Registrant's Common Equity and
                Related Stockholder Matters...................................17
 Item 6.  Selected Consolidated Financial Data................................18
 Item 7.  Management's Discussion and Analysis of Financial
                Condition and Results of Operations...........................20

 Item 7A. Quantitative and Qualitative Disclosures About Market Risk..........33
 Item 8.  Consolidated Financial Statements and Supplementary Data............33
 Item 9.  Changes in and Disagreements with Accountants
                on Accounting and Financial Disclosure........................33

Part III
 Item 10. Directors and Executive Officers of the Registrant..................34
 Item 11. Executive Compensation..............................................37
 Item 12. Security Ownership of Certain Beneficial Owners and
                Management....................................................38
 Item 13. Certain Relationships and Related Transactions......................39

Part IV
 Item 14. Exhibits, Financial Statement Schedules and Reports
                on Form 8-K...................................................42

<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 1994, AS AMENDED,  THAT ARE NOT  HISTORICAL  FACTS AND INVOLVE A
NUMBER OF RISKS AND  UNCERTAINTIES.  THERE ARE A NUMBER OF  FACTORS  THAT  COULD
CAUSE THE COMPANY'S ACTUAL RESULTS TO DIFFER  MATERIALLY FROM THOSE PROJECTED IN
SUCH FORWARD-LOOKING STATEMENTS.  THESE FACTORS INCLUDE, WITHOUT LIMITATION, THE
COMPANY'S  OUTSTANDING  INDEBTEDNESS  AND  ITS  HIGH  DEGREE  OF  LEVERAGE;  THE
RESTRICTIONS IMPOSED ON THE COMPANY BY THE TERMS OF THE COMPANY'S  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;  AND  THE  VARIABILITY  OF THE
COMPANY'S QUARTERLY RESULTS AND THE COMPANY'S 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.  THE
COMPANY UNDERTAKES NO OBLIGATION TO PUBLICLY RELEASE THE RESULT OF ANY REVISIONS
TO THESE  FORWARD-LOOKING  STATEMENTS  WHICH  MAY BE MADE TO  REFLECT  EVENTS OR
CIRCUMSTANCES   AFTER  THE  DATE  HEREOF  OR  TO  REFLECT  THE   OCCURRENCE   OF
UNANTICIPATED EVENTS.

                                     PART I

                                ITEM 1. BUSINESS

The Company

Allbritton  Communications  Company ("ACC" or the "Company")  itself and through
subsidiaries  owns  and  operates  ABC  network-affiliated  television  stations
serving seven diverse  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 (the Company operates WCFT
and  WJSU  in  tandem  with  WBMA-LP  serving  the  viewers  of the  Birmingham,
Tuscaloosa  and Anniston  market);  WHTM in  Harrisburg,  Pennsylvania;  KATV in
Little Rock, Arkansas; KTUL in Tulsa, Oklahoma; WSET in Lynchburg, Virginia; and
WCIV in Charleston,  South Carolina.  The Company's owned and operated  stations
broadcast to the 8th, 39th,  46th,  57th,  59th, 68th and 103rd largest national
media markets in the United States, respectively, as defined by the A.C. Nielsen
Co. ("Nielsen").

WJLA is owned and operated as a division by ACC,  while the Company's  remaining
owned and operated  stations are owned by 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 of these is a  wholly-owned
subsidiary of ACC, except Harrisburg Television and TV Alabama, each of which is
an indirect  80%-owned  subsidiary  of ACC. TV Alabama began  programming  WJSU,
licensed to Anniston  (Birmingham),  Alabama,

                                      -1-
<PAGE>

under a  ten-year  Time  Brokerage  Agreement  (referred  to  herein  as a Local
Marketing  Agreement  ("LMA")) effective December 29, 1995 (the "Anniston LMA").
TV Alabama  exercised  its  option to  acquire  WJSU on  September  14,  1999 by
entering into an asset purchase  agreement for the purchase of WJSU,  subject to
regulatory approval and customary closing conditions.  The Company received such
approval and completed  its  acquisition  of WJSU on March 22, 2000.  See "Owned
Stations - WBMA/WCFT/WJSU:  Birmingham (Anniston and Tuscaloosa),  Alabama". ACC
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,   ACC's  Chairman.   ACC  and  its  subsidiaries  are  Delaware
corporations or limited  liability  companies.  ACC's corporate  headquarters is
located at 808 Seventeenth Street, N.W., Suite 300, Washington, D.C. 20006-3910,
and its 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. 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 the Company conducts business, Washington, D.C. and
Birmingham,  Alabama are metered markets while the remaining  markets are weekly
diary markets.

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  recently  PAX TV have been  launched  as new  television
networks.

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.

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

                                      -3-
<PAGE>

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 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, and recently FOX programming, generally
achieve 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.

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.

Direct Broadcast Satellite ("DBS") service has recently been 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.  At present,  the nature of DBS service
includes  primarily national  programming and, except in limited  circumstances,
does not offer locally  originated  programs or  advertising.  Initially,  it is
expected that only  affiliates of the four largest  networks will be transmitted
locally in approximately  the 40 largest DMAs. Of the Company's  stations,  only
WJLA and  WBMA/WCFT/WJSU  are currently carried on DBS systems,  transmitting to
the Washington, D.C. and Birmingham, Alabama markets, respectively.

                                      -4-
<PAGE>

The Company  believes 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.  Independent  stations  have  emerged  as  viable
competitors  for television  viewership  share,  particularly as a result of the
availability of first-run,  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.

Terrestrially-distributed  television broadcast stations use analog transmission
technology.  Recent  advances in digital  transmission  technology  formats have
enabled  some   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".  Of the Company's stations, only WJLA in Washington, D.C.
broadcasts with both an analog and digital signal at this time.

Station Information

The  following  table sets forth general  information  for each of the Company's
owned stations as of November 2000:
<TABLE>
<CAPTION>

                                                                                      Total
                                                                           Market   Commercial   Station     Rank
             Designated                             Network     Channel   Rank or  Competitors   Audience     in      Acquisition
             Market Area               Station    Affiliation  Frequency  DMA<F1>  in Market<F2> Share<F3>  Market<F4>    Date
             -----------               -------    -----------  ---------  -------  ------------  ---------  ---------     ----

<S>                                    <C>             <C>       <C>         <C>        <C>          <C>       <C>      <C>
Washington, D.C ..................     WJLA            ABC       7/VHF       8          6            23%       2        01/29/76
Birmingham (Anniston and
      Tuscaloosa), AL<F5> ........     WBMA/WCFT/WJSU  ABC        --        39          7            20%       3              --
           Birmingham ............     WBMA            ABC      58/UHF      --         --            --       --        08/01/97
           Anniston ..............     WJSU            ABC      40/UHF      --         --            --       --        03/22/00<F6>
           Tuscaloosa ............     WCFT            ABC      33/UHF      --         --            --       --        03/15/96
Harrisburg-Lancaster-York-Lebanon,
      PA .........................     WHTM            ABC      27/UHF      46          5            25%       2        03/01/96
Little Rock, AR ..................     KATV            ABC       7/VHF      57          5            33%       1        04/06/83
Tulsa, OK ........................     KTUL            ABC       8/VHF      59          5            34%       1        04/06/83
Roanoke-Lynchburg, VA ............     WSET            ABC      13/VHF      68          4            27%       2        01/29/76<F7>
Charleston, SC ...................     WCIV            ABC       4/VHF     103          5            19%       3        01/29/76<F7>

---------
<FN>

<F1>      Represents market rank based on the Nielsen Station Index for November
          2000.
<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.

                                      -5-
<PAGE>

<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>      The Company commenced programming WJSU pursuant to the Anniston LMA in
          December  1995.  In  connection  with the  Anniston  LMA,  the Company
          entered  into an option to  purchase  the assets of WJSU.  The Company
          exercised its option to acquire WJSU and completed its  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>


Business and Operating Strategy

The Company's  business strategy is to focus on building net operating  revenues
and net cash  provided by operating  activities.  The Company  intends to pursue
selective  acquisition  opportunities as they arise.  The Company's  acquisition
strategy is to target  network-affiliated  television stations where it believes
it can successfully  apply its operating strategy and where such stations can be
acquired on attractive terms.  Targets include midsized growth markets with what
the Company believes to be advantageous business climates.  Although the Company
continues to review  strategic  investment  and  acquisition  opportunities,  no
agreements  or  understandings  are  currently in place  regarding  any material
investments or acquisitions.

In addition, the Company constantly seeks to enhance net operating revenues at a
marginal  incremental cost through its 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 71 radio stations in four states and  pay-per-view  cable viewing to selected
Arkansas cable system viewers.

The Company's operating strategy focuses on four key elements:

Local News and Community  Leadership.  The Company's stations strive to be local
news  leaders  to  exploit  the  revenue  potential  associated  with local news
leadership.  Since the  acquisition of each station,  the Company has focused on
building that station's local news  programming  franchise as the foundation for
building  significant  audience share. In each of its market areas,  the Company
develops  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,  management  believes  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.  The Company's 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 the Company

                                      -6-
<PAGE>

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 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.  The Company believes 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 the Company's  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.  Management believes that controlling costs is an essential factor
in achieving and  maintaining  the  profitability  of its stations.  The Company
believes that by delivering  highly  targeted  audience  levels and  controlling
programming and operating  costs, the Company's  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
of the stations closely monitors its staffing levels.

Owned Stations

WJLA: Washington, D.C.

Acquired by the Company in 1976, WJLA is an ABC network affiliate pursuant to an
affiliation agreement that expires on October 1, 2005. The Station's FCC license
expires on October 1, 2004.  Washington,  D.C. is the eighth  largest DMA,  with
approximately  2,047,000  television  households.   The  Company  believes  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.

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

The Company acquired WCFT in March 1996 and commenced  programming WJSU pursuant
to the Anniston LMA in December 1995. The LMA provided for the Company to supply
program services to WJSU and to retain all revenues from  advertising  sales. In
exchange, the Company

                                      -7-
<PAGE>

paid all station operating expenses and certain management fees to the station's
owner.  In connection  with the Anniston LMA, the Company entered into an option
to purchase the assets of WJSU (the "Anniston  Option").  The Company  exercised
its option to acquire  WJSU on  September  14,  1999 by  entering  into an asset
purchase agreement for the purchase of WJSU, subject to regulatory  approval and
customary closing  conditions.  The Company received such approval and completed
its  acquisition  of WJSU on March 22,  2000.  The Company also owns a low power
television  station  licensed to Birmingham,  Alabama  (WBMA).  In October 1998,
Nielsen  collapsed the  Tuscaloosa  DMA and the Anniston DMA into the Birmingham
DMA  creating  the  39th  largest  DMA  with  approximately  674,000  television
households.  The  Birmingham  DMA  is  served  by  seven  commercial  television
stations.

The  Company  serves  the  Birmingham  market  by  simultaneously   transmitting
identical  programming  from its 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. The
Company has retained a news and sales presence in both  Tuscaloosa and Anniston,
while at the same  time  maintaining  its  primary  news and sales  presence  in
Birmingham.  The ABC network affiliation is based upon carriage on both WCFT and
WJSU and expires on September 1, 2006. The FCC licenses for both stations expire
on April 1, 2005.

WHTM: Harrisburg-Lancaster-York-Lebanon, Pennsylvania

Acquired by the Company in 1996, WHTM is an ABC network affiliate pursuant to an
affiliation agreement that expires on January 1, 2005. The Station's FCC license
expires  August  1,  2007.  Harrisburg,  Pennsylvania,  which  consists  of nine
contiguous  counties located in central  Pennsylvania,  is the 46th largest DMA,
reaching approximately 604,000 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 the Company in 1983, KATV is an ABC network affiliate pursuant to an
affiliation  agreement  that expires on July 31, 2005. The Station's FCC license
expires on June 1, 2005.  The Little Rock market is the 57th largest  DMA,  with
approximately  492,000  television  households.  The  Little  Rock  market has a
diversified economy,  both serving as the seat of state and local government and
housing a significant  concentration  of  businesses.  The Little Rock market is
served by five commercial television stations.

Capitalizing  on its exclusive  rights to the University of Arkansas  basketball
and football  schedules through the year 2003, KATV launched ARSN in Fiscal 1994
by entering into  programming  sublicense  agreements with a network of 71 radio
stations in four states.  Pay-per-view and home video rights are also controlled
by ARSN.

                                      -8-
<PAGE>

KTUL: Tulsa, Oklahoma

Acquired by the Company in 1983, KTUL is an ABC network affiliate pursuant to an
affiliation  agreement  that expires on July 31, 2005. The Station's FCC license
expires  on  June 1,  2006.  Tulsa,  Oklahoma  is the  59th  largest  DMA,  with
approximately 490,000 television households.  The Tulsa market is served by five
commercial television stations.

WSET: Roanoke-Lynchburg, Virginia

Acquired by the Company 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 July 31, 2005.  WSET's FCC license
expires on October 1, 2004. The hyphenated  central Virginia market comprised of
Lynchburg,  Roanoke and  Danville is the 68th largest  DMA,  with  approximately
407,000  television  households.  The Lynchburg DMA is served by four commercial
television stations.

WCIV: Charleston, South Carolina

Acquired by the Company 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 August  20,  2006.  WCIV's FCC  license
expires on December 1, 2004.  Charleston,  South  Carolina is the 103rd  largest
DMA, with  approximately  253,000 television  households.  The Charleston DMA is
served by five commercial television stations.

Network Affiliation Agreements and Relationship

WJLA,  WBMA/WCFT/WJSU,   WHTM,  KATV,  KTUL,  WSET  and  WCIV  are  ABC  network
affiliates:  their  current  affiliation  agreements  expire  October  1,  2005,
September 1, 2006,  January 1, 2005, July 31, 2005, July 31, 2005, July 31, 2005
and August 20, 2006,  respectively.  ABC has routinely  renewed the  affiliation
agreements  with these stations;  however,  there can be no assurance that these
affiliation  agreements  will be renewed in the  future.  As one of the  largest
group  owners of ABC network  affiliates  in the nation,  ACC believes it enjoys
excellent relations with the ABC network.

Generally,  each affiliation  agreement provides the Company's 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.  Under  specified
conditions,  rates are subject to increase or decrease by the network during the
term of each affiliation agreement, with provisions for advance notice and right
of termination on behalf of the station in the event of a reduction in rates.

                                      -9-
<PAGE>

Effective August 11, 1999, the Company's network affiliation agreements with ABC
were amended.  Under the amendments,  ABC will, for a three-year period, provide
the  Company's   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.

Competition

Competition  in the television  industry,  including each of the market areas in
which the Company's 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 the Company's
operations.

Audience:  Stations  compete for  audience  on the basis of program  popularity,
which has a direct  effect on  advertising  rates.  A majority of the  Company's
daily programming 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.   Independent   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 network-quality programming from FOX.

The development of methods of television  transmission  other than  over-the-air
broadcasting   and,  in   particular,   the  growth  of  cable   television  has
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   system.
Historically, cable operators have not sought to compete with broadcast stations
for a share of the local news audience.  To the extent cable  operators elect to
do so,  increased  competition  for local news  audiences  could have an adverse
effect on the Company's advertising revenues.

Other sources of competition include home entertainment systems (including video
cassette recorder and playback systems, videodiscs and television game devices),
multipoint  distribution systems,  multichannel multipoint distribution systems,
wireless cable,  satellite master antenna  television systems and some low-power
and in-home  satellite  services.  The Company's  television  stations also face
competition from  high-powered  direct  broadcast  satellite  services,  such as
DirecTV and Echostar, which transmit programming directly to homes equipped with
special  receiving  antennas or to cable television  systems for transmission to
their subscribers.

                                      -10-
<PAGE>

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.  The  Company is unable to predict the
effect that technological changes will have on the broadcast television industry
or the future results of the Company's operations.

Programming:  Competition for  programming  involves  negotiating  with national
program  distributors or syndicators  which sell first-run and rerun packages of
programming.  The Company's stations compete against in-market broadcast station
competitors for off-network  reruns (such as "Home  Improvement")  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,  although  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.   The  Company's   television  stations  compete  for
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 television
broadcasting  station in the market  does not  compete  with  stations  in other
market  areas.  The  Company's   television   stations  are  located  in  highly
competitive market areas.

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,  but are not
limited to, 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

                                      -11-
<PAGE>

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.  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, there can be no assurance that
each of the Company's  broadcast  licenses will be renewed in the future. All of
the stations' existing licenses were renewed for full terms and are currently in
effect.

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 maximum amounts of advertising
and minimum amounts of programming  specifically  targeted for children, as well
as additional public information and reporting requirements.

                                      -12-
<PAGE>

Digital  Television:   The  FCC  has  adopted  rules  for  implementing  digital
(including  high-definition)  television  ("DTV")  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.  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.   Implementation  of  DTV  service  will  impose
substantial  additional costs on television  stations providing the new service,
primarily  due to  increased  equipment  costs,  and may affect the  competitive
nature of the market areas in which the Company  operates if competing  stations
adopt and implement the new technology  before the Company's  stations.  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.  Of the
Company's  stations,  only WJLA in  Washington,  D.C.  currently  operates a DTV
channel in concert with its analog  signal.  While each of the  Company's  other
stations  has filed its  application  with the FCC for the second  DTV  channel,
there are currently no DTV operations in the markets of these stations.

Ownership  Matters:  The Communications Act contains a number of restrictions on
the ownership and control of broadcast licenses.  Together with the FCC's rules,
it places limitations on alien ownership;  common ownership of broadcast,  cable
and  newspaper  properties;  and  ownership  by those  persons  not  having  the
requisite  "character"  qualifications and those persons holding  "attributable"
interests in the license.

The FCC's television  national multiple ownership rules limit the audience reach
of television stations in which any entity may hold an attributable  interest to
35 percent of total United States  audience  reach.  The FCC's local  television
multiple  ownership  rule, the "Duopoly" rule, was revised in September 1999 and
now generally permits ownership of attributable  interests by a single entity in
no more  than two  television  stations  which  serve the same DMA  unless  both
stations  are among  the top four  rated in the  market or there are fewer  than
eight,  full power,  independently  owned television  stations  remaining in the
market.

The FCC generally applies its ownership limits to "attributable"  interests held
by an individual,  corporation,  partnership or other association. When applying
its multiple  ownership or cross-ownership  rules, the FCC generally  attributes
the  interests of corporate  licensees to the holders of corporate  interests as
follows:  (i) any  voting  interest  amounting  to five  percent  or more of the
outstanding  voting power of the corporate  broadcast licensee generally will be
attributable;  (ii) in  general,  no minority  voting  stock  interests  will be
attributable  if there is a single  holder of more  than  fifty  percent  of the
outstanding voting power of a corporate  broadcast  licensee;  (iii) in general,
certain  investment  companies,  insurance  companies  and banks  holding  stock
through their trust  departments in trust accounts will be considered to have an
attributable  interest  only  if  they  hold  twenty  percent  or  more  of  the
outstanding  voting power of a corporate  broadcast  licensee;  and (iv) certain
local media competitors (including broadcasters, cable operators and newspapers)
and programmers that supply more than 15 percent of a station's weekly broadcast
hours will also be attributed  with ownership of the station if that entity also
has a  combination  of debt and equity  holdings  of the  station  exceeding  33
percent of the total asset value of the station.

                                      -13-
<PAGE>

Furthermore,   corporate   officers  and  directors  and  general  partners  and
uninsulated limited partners of partnerships are personally  attributed with the
media interests of the  corporations or partnerships of which they are officers,
directors  or  partners.  In the  case  of  corporations  controlling  broadcast
licenses  through  one  or  more  intermediate  entities,   similar  attribution
standards  generally  apply to  stockholders,  officers  and  directors  of such
corporations.

In  light  of  the  FCC's  multiple  ownership  and  cross-ownership  rules,  an
individual or entity that acquires an  attributable  interest in the Company may
violate the FCC's rules if that  acquirer also has an  attributable  interest in
other  television or radio  stations,  or in cable  television  systems or daily
newspapers,  depending on the number and  location of those radio or  television
stations,  cable television  systems 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 the  Company  violates  any of these
ownership  rules,  the  Company  may be  unable  to  obtain  from  the  FCC  the
authorizations needed to conduct its television station business,  may be unable
to obtain FCC consents for certain future acquisitions,  may be unable to obtain
renewals  of  its  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 the Company 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 the Company operates.

Other Legislation:  Finally, 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 the Company's  broadcast  stations,
result in the loss or gain of audience  share and  advertising  revenues for the
Company's  stations  and/or  affect  the  ability  of the  Company to acquire or
finance additional broadcast stations.

Employees

As of September 30, 2000, the Company  employed in full and part-time  positions
889 persons,  including 179 at WJLA,  144 at KATV, 126 at KTUL, 108 at WHTM, 131
at  WBMA/WCFT/WJSU,  108 at WSET, 83 at WCIV and 10 in its corporate  office. Of
the  employees  at WJLA,  94 are  represented  by  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  AFTRA
collective bargaining agreement expired September 30, 1999; however, the parties
have agreed, pending completion of negotiations regarding a successor

                                      -14-
<PAGE>

collective bargaining agreement, to extend the existing agreement to January 15,
2001. The DGA collective  bargaining  agreement  expired January 16, 2000, and a
successor  collective  bargaining  agreement is currently being negotiated.  The
NABET/CWA collective  bargaining agreement expired June 1, 1995. Members of this
union have been working  under a contract  implemented  by WJLA after impasse in
its  negotiations,  effective  February 1, 1999.  No employees of the  Company's
other  owned  stations  are  represented  by unions.  The Company  believes  its
relations with its employees are satisfactory.

                               ITEM 2. PROPERTIES


The Company maintains its 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 the Company's
principal real property:



                                      -15-
<PAGE>



<TABLE>
<CAPTION>

                                                                Approximate   Lease Expiration
Facility                Market/Use           Ownership              Size           Date
--------                ----------           ---------              ----           ----

<S>                   <C>                    <C>                <C>               <C>
WJLA                  Washington, D.C.
                      Office/Studio          Leased             88,828 sq. ft.    12/16/03
                      Tower/Transmitter      Joint Venture      108,000 sq. ft.   N/A

WHTM                  Harrisburg, PA
                      Office/Studio          Owned              14,000 sq. ft.    N/A
                      Tower/Transmitter      Owned              2,801 sq. ft.     N/A
                      Adjacent Land          Leased             6,808 sq. ft.     10/31/05

KATV                  Little Rock, AR
                      Office/Studio          Owned              20,500 sq. ft.    N/A
                      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                  Leased             1 acre            5/30/05

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.     2/28/03

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          Leased             26,357 sq. ft     9/30/06
                      Satellite Dish Farm    Leased             0.5 acres         9/30/06
                      Tower/Relay-Pelham     Leased             .08 acres         10/31/01
                      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             7,273 sq. ft.     6 months notice
                      Tower-Blue Mtn         Owned              1.7 acres         N/A
                      Gadsden Office         Leased             1,000 sq. ft.     Monthly
                      Tower-Bald Rock        Leased             1 acre            8/29/16

</TABLE>

                                      -16-
<PAGE>



                            ITEM 3. LEGAL PROCEEDINGS


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.

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

Not Applicable.


                                     PART II

                ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND
                           RELATED STOCKHOLDER MATTERS

Not Applicable.






                                      -17-
<PAGE>



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

The selected  consolidated  financial  data below should be read in  conjunction
with the Company's  Consolidated Financial Statements and notes thereto included
elsewhere  in this  Report.  The selected  consolidated  financial  data for the
fiscal years ended  September 30, 1996,  1997,  1998,  1999 and 2000 are derived
from the Company's audited Consolidated Financial Statements.
<TABLE>
<CAPTION>

                                                          Fiscal Year Ended September 30,
                                                          -------------------------------
                                           1996          1997          1998          1999          2000
                                           ----          ----          ----          ----          ----

Statement of Operations Data<F1>:
<S>                                     <C>           <C>           <C>           <C>           <C>
Operating revenues, net ..............  $155,573      $172,828      $182,484      $187,288      $205,307
Television operating expenses,
    excluding depreciation and
    amortization .....................    92,320       105,630       106,147       109,549       113,617
Depreciation and amortization ........    10,257        19,652        18,922        17,471        15,660
Corporate expenses ...................     5,112         4,382         4,568         4,339         4,873
Operating income .....................    47,884        43,164        52,847        55,929        71,157
Interest expense .....................    35,222        42,870        44,340        42,154        42,212
Interest income ......................     3,244         2,433         3,339         2,760         2,893
Income before extraordinary
    items ............................     8,293           424         5,746         8,628        17,184
Extraordinary loss<F2> ...............    (7,750)           --        (5,155)           --            --
Net income ...........................       543           424           591         8,628        17,184

                                                                As of September 30,
                                                                -------------------
                                           1996          1997          1998          1999          2000
                                           ----          ----          ----          ----          ----

Balance Sheet Data<F1>:
Total assets .........................  $281,778      $280,977      $279,521      $275,868      $269,934
Total debt<F3> .......................   402,993       415,722       429,691       429,629       427,729
Stockholder's investment .............  (172,392)     (185,563)     (203,776)     (211,347)     (219,896)


                                                          Fiscal Year Ended September 30,
                                                          -------------------------------
                                           1996          1997          1998          1999          2000
                                           ----          ----          ----          ----          ----

Cash Flow Data<F1><F4>:
Cash flow from operating
     activities ......................   $28,370       $15,551       $28,022       $28,302       $33,579
Cash flow from investing activities ..  (165,109)      (17,363)       (8,190)       (9,809)       (8,354)
Cash flow from financing activities ..   145,031        (2,875)      (13,404)      (17,905)      (27,749)


                                                          Fiscal Year Ended September 30,
                                                          -------------------------------
                                           1996          1997          1998          1999          2000
                                           ----          ----          ----          ----          ----

Financial Ratios and Other Data<F1>:
Operating Cash Flow<F5> ..............   $58,141       $62,816       $71,769       $73,400       $86,817
Operating Cash Flow Margin<F6> .......     37.4%         36.3%         39.3%         39.2%         42.3%
Capital expenditures .................    20,838        12,140         8,557         9,849         5,048


                                      -18-
<PAGE>


<FN>

<F1>    The consolidated  statement of operations data, balance sheet data, cash
        flow data and  financial  ratios  and other  data as of and for the year
        ended September 30, 1996 include the effects of significant transactions
        consummated by the Company during the year.  Such  transactions  include
        the  effects  of  a  $275,000  offering  of  9.75%  Senior  Subordinated
        Debentures  due 2007,  the  asset  acquisitions  of WHTM and  WCFT,  the
        acquisition of the Anniston LMA and Anniston Option, the early repayment
        of approximately  $74,704 in debt and payment of a prepayment penalty on
        such debt of $12,934.  In addition,  the  comparability  of Fiscal 1997,
        1998,  1999 and 2000 data to Fiscal  1996 data is  impacted  by the fact
        that the results of operations  of WHTM,  WCFT and WJSU are included for
        the full year in Fiscal  1997,  1998,  1999 and 2000 as  compared to the
        period in Fiscal 1996 from the date of acquisition  with respect to WHTM
        and WCFT and from the effective date of the Anniston LMA with respect to
        WJSU.
<F2>    The  extraordinary  losses  during  Fiscal 1996 and Fiscal 1998 resulted
        from the early repayment of long-term debt. See "Consolidated  Financial
        Statements - Notes to Consolidated Financial Statements" (Note 5).
<F3>    Total debt is defined as long-term debt  (including the current  portion
        thereof,  and  net of  discount),  short-term  debt  and  capital  lease
        obligations.
<F4>    Cash flows from  operating,  investing  and  financing  activities  were
        determined in accordance with generally accepted accounting  principles.
        See "Consolidated Financial Statements - Consolidated Statements of Cash
        Flows".
<F5>    "Operating Cash Flow" is defined as operating  income plus  depreciation
        and  amortization.  Programming  expenses  are  included  in  television
        operating  expenses.  The Company has included  Operating Cash Flow data
        because it understands that such data are used by investors to measure a
        company's  ability to fund its  operations  and service debt.  Operating
        Cash Flow does not  purport  to  represent  cash  flows  from  operating
        activities  determined in accordance with generally accepted  accounting
        principles as reflected in the Consolidated Financial Statements, is not
        a measure of financial  performance under generally accepted  accounting
        principles, should not be considered in isolation or as a substitute for
        net  income  or cash  flows  from  operating  activities  and may not be
        comparable to similar measures reported by other companies.
<F6>    "Operating  Cash Flow  Margin" is defined  as  Operating  Cash Flow as a
        percentage of operating revenues, net.
</FN>
</TABLE>

                                      -19-
<PAGE>

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

General Factors Affecting the Company's Business

The  Company  owns ABC  network-affiliated  television  stations  serving  seven
diverse  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 (the Company  operates WCFT and WJSU in tandem
with  WBMA-LP  serving the viewers of the  Birmingham,  Tuscaloosa  and Anniston
market); WHTM in Harrisburg,  Pennsylvania;  KATV in Little Rock, Arkansas; KTUL
in Tulsa, Oklahoma; WSET in Lynchburg,  Virginia; and WCIV in Charleston,  South
Carolina.

The  Company  previously  programmed  WJSU  pursuant  to the  Anniston  LMA.  In
connection with the Anniston LMA, the Company entered into an option to purchase
the  assets  of WJSU.  The  Company  exercised  its  option to  acquire  WJSU on
September 14, 1999 by entering into an asset purchase agreement for the purchase
of WJSU, subject to regulatory  approval and customary closing  conditions.  The
Company  received such approval and completed its  acquisition  of WJSU on March
22,  2000.  The  consolidated  results  of  operations  of the  Company  include
operating  revenues  and  operating  expenses of WJSU from  December 29, 1995 to
March 21, 2000  pursuant to the terms of the  Anniston  LMA, and since March 22,
2000 as an owned  station.  Upon  acquisition of WJSU, the Company was no longer
required to pay fees  approximating  $360  annually that were paid in connection
with the previously existing local marketing agreement.

The  operating  revenues  of the Company  are  derived  from local and  national
advertisers  and,  to a much  lesser  extent,  from  the  networks  and  program
syndicators  for the broadcast of programming  and from other  broadcast-related
activities.  The primary  operating  expenses  involved in owning and  operating
television  stations are employee  compensation,  programming,  news  gathering,
production, promotion and the solicitation of advertising.

Television  stations  receive revenues for advertising sold for placement within
and  adjoining  locally  originated  programming  and  adjoining  their  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.

The Company's  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

                                      -20-
<PAGE>

the holiday season and active  advertising in the spring. The fluctuation in the
Company's  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 the  Company's  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
2000 Summer  Olympic Games were broadcast by NBC in September 2000 in connection
with NBC's United  States  television  rights to the Olympic  Games which extend
through 2008.

The  broadcast  television  industry is cyclical  in nature,  being  affected by
prevailing  economic  conditions.   Because  the  Company  relies  on  sales  of
advertising time for  substantially  all of its revenues,  its operating results
are sensitive to general economic  conditions and regional conditions in each of
the local market areas in which the Company's stations operate. For Fiscal 1998,
1999 and 2000, WJLA accounted for approximately  one-half of the Company's total
revenues.  As a result, the Company's results of operations are highly dependent
on WJLA and, in turn, the Washington,  D.C. economy and, to a lesser extent,  on
each of the other local economies in which the Company's  stations operate.  The
Company is also dependent on automotive-related advertising.  Approximately 25%,
25% and 26% of the  Company's  total  broadcast  revenues  for the  years  ended
September 30, 1998, 1999 and 2000, respectively, consisted of automotive-related
advertising.  A significant  decrease in such  advertising  could materially and
adversely affect the Company's operating results.



                                      -21-
<PAGE>

Operating Revenues

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

                                                Fiscal Year Ended September 30,
                                                -------------------------------
                                    1998                     1999                     2000
                                    ----                     ----                     ----
                             Dollars     Percent      Dollars     Percent      Dollars     Percent
                             -------     -------      -------     -------      -------     -------

<S>                         <C>           <C>        <C>           <C>        <C>           <C>
Local/regional<F1>          $ 92,398      49.0%      $ 94,393      48.8%      $101,619      47.9%
National<F2>                  75,530      40.0%        77,077      39.9%        90,168      42.5%
Network compensation<F3>       6,237       3.3%         5,668       2.9%         2,930       1.4%
Political<F4>                  3,291       1.8%         4,191       2.2%         4,826       2.3%
Trade and barter<F5>           8,192       4.3%         8,181       4.2%         8,748       4.1%
Other revenues<F6>             3,038       1.6%         3,879       2.0%         3,968       1.8%
                             -------     -----        -------     -----        -------     -----
Broadcast revenues           188,686     100.0%       193,389     100.0%       212,259     100.0%
Fees<F7>                      (6,202)    =====         (6,101)    =====         (6,952)    =====
                             -------                  -------                  -------
Operating revenues, net     $182,484                 $187,288                 $205,307
                             =======                  =======                  =======

----------
<FN>

<F1>      Represents sale of advertising time to local and regional  advertisers
          or agencies representing such advertisers.
<F2>      Represents sale of advertising time to agencies  representing national
          advertisers.
<F3>      Represents  payment by networks for broadcasting or promoting  network
          programming.
<F4>      Represents sale of advertising time to political advertisers.
<F5>      Represents  value of commercial  time exchanged for goods and services
          (trade) or syndicated programs (barter).
<F6>      Represents  miscellaneous  revenue,  principally  receipts  from tower
          rental,  production  of  commercials  and  revenue  from the  sales of
          University of Arkansas  sports  programming to  advertisers  and radio
          stations.
<F7>      Represents fees paid to national sales  representatives  and fees paid
          for music licenses.

</FN>
</TABLE>

Local/regional  and  national  advertising   constitute  the  Company's  largest
categories of operating revenues, collectively representing approximately 90% of
the Company's total  broadcast  revenues in each of the last three fiscal years.
Although  the total  percentage  contribution  of  local/regional  and  national
advertising  has been relatively  constant over such period,  the growth rate of
local/regional and national  advertising revenues varies annually based upon the
demand and rates for local/regional advertising time versus national advertising
time in each  of the  Company's  markets.  Local/regional  advertising  revenues
increased 7.5%, 2.2% and 7.7% in Fiscal 1998, 1999 and 2000,  respectively;  and
national  advertising  revenues  increased  5.9%, 2.0% and 17.0% during the same
respective periods.  Each other individual category of revenues represented less
than 5.0% of the  Company's  total  revenues  for each of the last three  fiscal
years.

                                      -22-
<PAGE>

Results of Operations - Fiscal 2000 Compared to Fiscal 1999

As compared to Fiscal 1999, the Company's  results of operations for Fiscal 2000
principally  reflect an  increase  in national  and  local/regional  advertising
revenues in the Washington,  D.C. market,  partially offset by decreased network
compensation  revenue and increased  programming and news expenses in a majority
of the Company's markets.

Set forth below are  selected  consolidated  financial  data for Fiscal 1999 and
2000, respectively, and the percentage change between the years.
<TABLE>
<CAPTION>

                                                   Fiscal Year Ended September 30,
                                                   -------------------------------
                                                                            Percentage
                                                 1999            2000         Change
                                                 ----            ----         ------

<S>                                           <C>             <C>              <C>
        Operating revenues, net .........     $ 187,288       $ 205,307         9.6%
        Total operating expenses ........       131,359         134,150         2.1%
                                              ---------       ---------
        Operating income ................        55,929          71,157        27.2%
        Nonoperating expenses, net ......        40,584          40,723         0.3%
        Income tax provision ............         6,717          13,250        97.3%
                                              ---------       ---------

        Net income ......................     $   8,628       $  17,184        99.2%
                                              =========       =========

        Operating cash flow .............     $  73,400       $  86,817        18.3%
                                              =========       =========
</TABLE>


Net Operating Revenues

Net operating revenues for Fiscal 2000 totaled $205,307,  an increase of $18,019
or 9.6%, as compared to Fiscal 1999.  This increase  resulted  principally  from
increased  national  and  local/regional  advertising  revenue in the  Company's
Washington,  D.C.  market,  partially offset by decreased  network  compensation
revenue.

Local/regional advertising revenues increased $7,226, or 7.7%, over Fiscal 1999.
The increase was primarily  attributable  to an improvement  in the  Washington,
D.C. local/regional advertising market.

National  advertising  revenues increased $13,091, or 17.0%, in Fiscal 2000 over
the prior fiscal year. All of the Company's stations  experienced an increase in
national  advertising  revenues  during Fiscal 2000,  with the overall  increase
being  primarily  attributable  to an  improvement in the  Washington,  D.C. and
Harrisburg national advertising markets.  Strong  internet-related  advertising,
particularly  during  the first  quarter  of  Fiscal  2000,  contributed  to the
improvement in the Washington, D.C. national advertising market.

Network  compensation  revenue decreased $2,738, or 48.3%, from Fiscal 1999. The
decrease was  principally  due to the effect of the  amendment of the  Company's
network affiliation  agreements with ABC in August 1999. This decrease was fully
offset by local/regional and

                                      -23-
<PAGE>

national advertising  revenues generated from the sale of additional  prime-time
inventory obtained as part of the amendment. See "Business - Network Affiliation
Agreements and Relationship".

Political  advertising revenues increased by $635, or 15.2%, in Fiscal 2000 from
Fiscal  1999.   This  increase  was  primarily  due  to  Fiscal  2000  political
advertising leading up to the national  presidential election as well as various
high-profile local elections in certain of the Company's markets that took place
in November  2000.  The increase was partially  offset by Fiscal 1999  political
advertising  related  to various  high-profile  local  elections  in many of the
Company's markets that took place in November 1998.

No individual  advertiser  accounted for more than 5% of the Company's broadcast
revenues during Fiscal 2000 or 1999.

Total Operating Expenses

Total operating expenses in Fiscal 2000 were $134,150, an increase of $2,791, or
2.1%,  compared to total operating expenses of $131,359 in Fiscal 1999. This net
increase consisted of an increase in television  operating  expenses,  excluding
depreciation  and  amortization,  of $4,068,  a  decrease  in  depreciation  and
amortization of $1,811 and an increase in corporate expenses of $534.

Television operating expenses, excluding depreciation and amortization,  totaled
$113,617  in Fiscal  2000,  an  increase of $4,068,  or 3.7%,  when  compared to
television  operating  expenses  of  $109,549 in Fiscal  1999.  This  television
operating expense increase was primarily  attributable to increased  programming
and news  expenses  across a majority of the Company's  stations.  The increased
programming   expenses  during  Fiscal  2000  included   certain   one-time  and
non-recurring programming events occurring during the first and fourth quarters.
Excluding these expenses,  television  operating  expenses increased 2.3% during
Fiscal 2000.

Depreciation  and  amortization  expense  of $15,660  in Fiscal  2000  decreased
$1,811,  or 10.4%,  from  $17,471 in Fiscal 1999.  The  decrease  was  primarily
attributable to decreased  depreciation on the assets acquired in Birmingham and
Harrisburg  during Fiscal 1996.  Additionally,  amortization  expense  decreased
during Fiscal 2000 as a result of the  completion of the  acquisition of WJSU on
March 22,  2000.  Prior to March 22,  2000,  the costs to acquire  the option to
purchase  WJSU  were  amortized  over  the  ten-year  term of the  option.  Upon
completion of the acquisition, the portion of the purchase price assigned to the
broadcast  license and network  affiliation of WJSU is being  amortized over its
estimated useful life of 40 years.

Corporate  expenses in Fiscal 2000 increased  $534, or 12.3%,  from Fiscal 1999.
The increase was primarily due to increased key-man life insurance expense.

Operating Income

Operating income of $71,157 in Fiscal 2000 increased $15,228, or 27.2%, compared
to operating  income of $55,929 in Fiscal 1999.  The operating  profit margin in
Fiscal 2000 increased to 34.7%

                                      -24-
<PAGE>

from 29.9% for the prior fiscal  year.  The  increases  in operating  income and
margin  were the result of net  operating  revenues  increasing  more than total
operating expenses as discussed above.

Operating Cash Flow

Operating  cash flow  increased to $86,817 in Fiscal 2000 from $73,400 in Fiscal
1999,  an increase  of  $13,417,  or 18.3%.  This  increase  was a result of net
operating  revenues  increasing  more  than  television  operating  expenses  as
discussed  above.  The Company  believes that  operating  cash flow,  defined as
operating income plus depreciation and  amortization,  is important in measuring
the Company's financial results and its ability to pay principal and interest on
its debt because of the Company's  level of non-cash  expenses  attributable  to
depreciation and amortization of intangible assets. Operating cash flow does not
purport  to  represent  cash  flows  from  operating  activities  determined  in
accordance  with generally  accepted  accounting  principles as reflected in the
Company's  consolidated  financial  statements,  is not a measure  of  financial
performance  under  generally  accepted  accounting  principles,  should  not be
considered  in isolation  or as a  substitute  for net income or cash flows from
operating  activities and may not be comparable to similar measures  reported by
other companies.

Nonoperating Expenses, Net

Interest  expense  increased  by $58 from  $42,154 in Fiscal  1999 to $42,212 in
Fiscal 2000. The average balance of debt  outstanding,  including  capital lease
obligations,  was $447,078 and $445,403 for Fiscal 1999 and 2000,  respectively,
and the weighted average interest rate on debt was 9.35% and 9.39% for the years
ended September 30, 1999 and 2000, respectively.

Income Taxes

The provision for income taxes in Fiscal 2000 of $13,250 increased by $6,533, or
97.3%, when compared to the provision for income taxes of $6,717 in Fiscal 1999.
The increase was directly related to the $15,089,  or 98.3%,  increase in income
before income taxes.

Net Income

Net income for Fiscal 2000 of $17,184  increased $8,556, or 99.2%, when compared
to net  income  of $8,628  in  Fiscal  1999.  The  increase  in net  income  was
attributable  to the  improved  operating  results for Fiscal 2000 as  discussed
above.

Results of Operations - Fiscal 1999 Compared to Fiscal 1998

As compared to Fiscal 1998, the Company's  results of operations for Fiscal 1999
principally  reflect continued audience and market share gains in the Birmingham
market,  increased demand by advertisers in the Little Rock market and increased
political  advertising  revenues in a majority  of the  Company's  markets.  The
comparative  results are also impacted by the effect of the  Company's  $150,000
offering of its 8.875% Senior  Subordinated Notes due 2008 (the " 8.875% Notes")

                                      -25-
<PAGE>

during the second quarter of Fiscal 1998. The cash proceeds of the offering, net
of  offering  expenses,  of  approximately  $146,000  were  used to  redeem  the
Company's   11.5%  Senior   Subordinated   Debentures  due  2004  (the  "  11.5%
Debentures")  on March 3, 1998 with the balance  used to repay  certain  amounts
outstanding under the Company's revolving credit facility.  The Company incurred
a  loss,  net  of the  related  income  tax  effect,  of  $5,155  on  the  early
extinguishment of the 11.5% Debentures resulting primarily from the payment of a
call premium and write-off of remaining deferred financing costs.

Set forth below are  selected  consolidated  financial  data for Fiscal 1998 and
1999, respectively, and the percentage change between the years.
<TABLE>
<CAPTION>

                                                       Fiscal Year Ended September 30,
                                                       -------------------------------
                                                                               Percentage
                                                       1998          1999        Change
                                                       ----          ----        ------

<S>                                                 <C>           <C>          <C>
        Operating revenues, net ................    $ 182,484     $ 187,288        2.6%
        Total operating expenses ...............      129,637       131,359        1.3%
                                                    ---------     ---------
        Operating income .......................       52,847        55,929        5.8%
        Nonoperating expenses, net .............       41,514        40,584       (2.2)%
        Income tax provision ...................        5,587         6,717       20.2%
                                                    ---------     ---------
        Income before extraordinary loss .......        5,746         8,628       50.2%
        Extraordinary loss, net of income
              tax benefit ......................       (5,155)           --     (100.0)%
                                                    ---------     ---------

        Net income .............................    $     591     $   8,628    1,359.9%
                                                    =========     =========

        Operating cash flow ....................    $  71,769     $  73,400        2.3%
                                                    =========     =========
</TABLE>

Net Operating Revenues

Net operating revenues for Fiscal 1999 totaled $187,288,  an increase of $4,804,
or 2.6%, as compared to Fiscal 1998.  This increase  resulted  principally  from
increased  local/regional  and  national  advertising  revenue in the  Company's
Birmingham and Little Rock markets,  increased political advertising demand in a
majority of the Company's markets and increased revenue related to University of
Arkansas sports programming in Little Rock. The revenue growth in Birmingham was
achieved through continued audience and market share gains.

Local/regional advertising revenues increased $1,995, or 2.2%, over Fiscal 1998.
The increase was primarily  attributable  to market share gains in Birmingham as
well  as an  improvement  in  the  Harrisburg  and  Little  Rock  local/regional
advertising  markets,  partially  offset by a weakening in the Washington,  D.C.
market for local/regional advertisers.

National advertising revenues increased $1,547, or 2.0%, in Fiscal 1999 over the
prior fiscal year.  The increase was  principally  attributable  to market share
gains in Birmingham as well as an improvement in the Washington,  D.C.  national
advertising market, partially offset by a weakening in the Harrisburg market for
national advertisers.

                                      -26-
<PAGE>

Network  compensation revenue decreased $569, or 9.1%, from Fiscal 1998. Of this
decrease,  approximately  $400 was due to the  effect  of the  amendment  of the
Company's  network  affiliation  agreements  with ABC in  August  1999,  and was
largely offset by local/regional  and national  advertising  revenues  generated
from  the  sale  of  additional  prime-time  inventory  obtained  as part of the
amendment. See " Business - Network Affiliation Agreements and Relationship".

Political  advertising revenues increased by $900, or 27.3%, in Fiscal 1999 from
Fiscal 1998.  This  increase was  primarily  due to various  high-profile  local
political  elections  in many of the  Company's  markets  that took place during
Fiscal 1999 with no comparable political elections occurring during Fiscal 1998.
The increase was partially offset by Fiscal 1998 political  advertising  leading
up to the Fiscal 1999 elections.

No individual  advertiser  accounted for more than 5% of the Company's broadcast
revenues during Fiscal 1999 or 1998.

Total Operating Expenses

Total operating expenses in Fiscal 1999 were $131,359, an increase of $1,722, or
1.3%, compared to total operating expenses of $129,637 in Fiscal 1998.

Television operating expenses, excluding depreciation and amortization,  totaled
$109,549  in Fiscal  1999,  an  increase of $3,402,  or 3.2%,  when  compared to
television  operating  expenses  of  $106,147 in Fiscal  1998.  This  television
operating  expense  increase was primarily  attributable  to increased  news and
related  promotional  expenses  at  the  Company's  Washington,   D.C.  station,
increased  expenses  related to University  of Arkansas  sports  programming  in
Little  Rock  and  increased  programming  expenses  across  a  majority  of the
Company's stations.  The overall increase in programming  expenses was mitigated
due to the fact that WJLA did not purchase the rights to broadcast the preseason
Washington Redskins football games in Fiscal 1999 as it had done in Fiscal 1998.

Depreciation  and  amortization  expense  of $17,471  in Fiscal  1999  decreased
$1,451,  or 7.7%,  from  $18,922 in Fiscal  1998.  The  decrease  was  primarily
attributable  to  decreased  depreciation  from the  facility  construction  and
equipment purchases in Birmingham during Fiscal 1996.

Corporate expenses in Fiscal 1999 decreased $229, or 5.0%, from Fiscal 1998. The
decrease was due to decreases in various  expenses,  including  life  insurance,
compensation and travel.

Operating Income

Operating income of $55,929 in Fiscal 1999 increased $3,082,  or 5.8%,  compared
to operating  income of $52,847 in Fiscal 1998.  The operating  profit margin in
Fiscal  1999  increased  to 29.9%  from  29.0% for the prior  fiscal  year.  The
increases  in  operating  income  and margin  were the  result of net  operating
revenues increasing more than total operating expenses as discussed above.

                                      -27-
<PAGE>

Operating Cash Flow

Operating  cash flow  increased to $73,400 in Fiscal 1999 from $71,769 in Fiscal
1998,  an  increase  of  $1,631,  or 2.3%.  This  increase  was a result  of net
operating  revenues  increasing  more  than  television  operating  expenses  as
discussed  above.  The Company  believes that  operating  cash flow,  defined as
operating income plus depreciation and  amortization,  is important in measuring
the Company's financial results and its ability to pay principal and interest on
its debt because of the Company's  level of non-cash  expenses  attributable  to
depreciation and amortization of intangible assets. Operating cash flow does not
purport  to  represent  cash  flows  from  operating  activities  determined  in
accordance  with generally  accepted  accounting  principles as reflected in the
Company's  consolidated  financial  statements,  is not a measure  of  financial
performance  under  generally  accepted  accounting  principles,  should  not be
considered  in isolation  or as a  substitute  for net income or cash flows from
operating  activities and may not be comparable to similar measures  reported by
other companies.

Nonoperating Expenses, Net

Interest  expense of $42,154 for Fiscal 1999 decreased by $2,186,  or 4.9%, from
$44,340 in Fiscal 1998.  This decrease was  principally  due to the  incremental
interest  expense in the prior fiscal year  associated  with  carrying  both the
newly-issued  8.875% Notes and the 11.5%  Debentures from January 22, 1998 until
the  redemption of the 11.5%  Debentures  on March 3, 1998 after the  redemption
notice period was  completed as well as the reduced  weighted  average  interest
rate on debt during Fiscal 1999 as a result of the Company's  refinancing of its
11.5% Debentures.

The average amount of debt outstanding and the weighted average interest rate on
such debt for Fiscal 1998 and 1999 approximated  $449,431 and 9.7%, and $436,546
and 9.4%,  respectively.  The decreased  average debt balance during Fiscal 1999
was primarily due to carrying both the  newly-issued  8.875% Notes and the 11.5%
Debentures from January 22, 1998 until the redemption of the 11.5% Debentures on
March 3, 1998 after the redemption notice period was completed.  Had the Company
redeemed the 11.5%  Debentures on January 22, 1998, the average  balance of debt
would have been $430,507 for Fiscal 1998.

Interest  income of $2,760 in Fiscal 1999 decreased  $579, or 17.3%, as compared
to interest  income of $3,339 in Fiscal 1998.  The decrease was primarily due to
interest earned in the prior fiscal year from temporarily investing the majority
of the  proceeds  from the  issuance  of the 8.875%  Notes for the  period  from
January  22, 1998 until  March 3, 1998 at which time the  Company  redeemed  the
11.5% Debentures.

Income Taxes

The provision for income taxes in Fiscal 1999 of $6,717 increased by $1,130,  or
20.2%, when compared to the provision for income taxes of $5,587 in Fiscal 1998.
The increase was directly  related to the $4,012,  or 35.4%,  increase in income
before income taxes and extraordinary  loss,  partially offset by a reduction in
the Company's overall effective income tax rate in Fiscal 1999.

                                      -28-
<PAGE>

Income Before Extraordinary Loss

Income before  extraordinary loss in Fiscal 1999 increased by $2,882 from $5,746
in Fiscal 1998. This increase was the result of increased  operating  income and
reduced  nonoperating  expenses,  partially  offset by increased income taxes as
discussed above.

Net Income

Net  income  for Fiscal  1999 of $8,628  increased  $8,037,  or  1,359.9%,  when
compared to net income of $591 in Fiscal  1998.  The  increase in net income was
attributable  to the  improved  operating  results for Fiscal 1999 as  discussed
above as well as the  effect  of the  Fiscal  1998  extraordinary  loss on early
repayment of debt of $5,155.

Liquidity and Capital Resources

Cash Provided by Operations

The Company's  principal  source of working capital is cash flow from operations
and  borrowings  under  its  revolving  credit  facility.  As  reported  in  the
consolidated  statements  of cash  flows,  the  Company's  net cash  provided by
operating  activities  was  $28,302  and  $33,579  for  Fiscal  1999  and  2000,
respectively.  The $5,277  increase in cash flows from operating  activities was
principally  due to the  $8,556  increase  in net  income,  partially  offset by
decreased depreciation and amortization as well as increased accounts receivable
and program rights.

Distributions to Related Parties

The  Company  periodically  makes  advances  in the  form  of  distributions  to
Perpetual. For Fiscal 1998, 1999 and 2000, the Company made cash advances net of
repayments  to Perpetual  of $18,804,  $16,199 and  $25,733,  respectively.  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,  during  Fiscal  1998,  1999 and 2000,  the  Company  was  charged  by
Perpetual  and made  payments to  Perpetual  for federal and state  income taxes
totaling $433, $4,328 and $8,808, respectively.

At present,  the primary  sources of  repayment  of net  advances is through the
ability of the Company 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 the Company's Consolidated Financial Statements.

During Fiscal 1991,  the Company made a $20,000  11.06% loan to Allnewsco.  This
amount has been reflected in the Company's  Consolidated Financial Statements on
a  consistent  basis with  other  distributions  to owners.  The loan had stated
repayment terms  consisting of annual  principal  installments of  approximately
$2,220  commencing  January 1997  through  January 2005 and payments of interest
semi-annually. During Fiscal 1997 and 1998, the Company deferred the first

                                      -29-
<PAGE>

two annual principal installment payments pending renegotiation of the repayment
terms.  Effective July 1, 1998, the note was amended to extend the maturity date
to January 2008 and defer all principal  installments  until maturity,  with the
principal balance also due upon demand. In exchange for the amendment, Allnewsco
paid  to the  Company  the  amount  of  $650.  Interest  payments  on  the  loan
approximate  $2,200  annually and have been made in accordance with the terms of
the note.  The Company  expects it will  continue to receive such  payments on a
current  basis.  To date,  interest  payments from Allnewsco have been funded by
advances from Perpetual to Allnewsco.  The Company  anticipates  that at least a
portion of such payments will be funded in a similar manner for the  foreseeable
future.  However, there can be no assurance that Allnewsco will have the ability
to make such interest payments in the future.

Under  the  terms  of  the  Company's  borrowing  agreements,  future  advances,
distributions   and  dividends  to  related   parties  are  subject  to  certain
restrictions.  The Company  anticipates that, subject to such restrictions,  ACC
will make  distributions and loans to related parties in the future.  Subsequent
to September 30, 2000 and through November 14, 2000, the Company made additional
net distributions to owners of $2,780.

Indebtedness

The  Company's  total debt,  including  the current  portion of long-term  debt,
decreased from $429,629 at September 30, 1999 to $427,729 at September 30, 2000.
This debt,  net of  applicable  discounts,  consists  of  $274,167  of the 9.75%
Debentures,   $150,000  of  the  8.875%  Notes  and  $3,562  of  capital   lease
obligations.  The  decrease of $1,900 in total debt from  September  30, 1999 to
September  30,  2000  was  primarily  due to a net  decrease  in  capital  lease
obligations.  As of September 30, 2000, there were no amounts  outstanding under
the Company's $40,000  revolving credit facility.  The revolving credit facility
is secured by the pledge of the stock of the  Company and its  subsidiaries  and
matures April 16, 2001. The Company intends to enter into a new revolving credit
facility for a  comparable  amount to be available no later than the maturity of
the current facility.

Under the existing borrowing  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,  the Company must maintain specified
levels  of  operating  cash flow and  working  capital  and  comply  with  other
financial covenants.  Compliance with the financial covenants is measured at the
end of each quarter, and as of September 30, 2000, the Company was in compliance
with those financial covenants. The Company is also required to pay a commitment
fee of .375% per annum  based on any  unused  portion  of the  revolving  credit
facility.

Other Uses of Cash

During Fiscal 1998, 1999 and 2000, the Company made $9,191,  $11,377 and $5,048,
respectively,  of capital  expenditures,  of which $634 and $1,528 were financed
through capital lease  transactions  during Fiscal 1998 and 1999,  respectively.
The  increase in capital  expenditures  from Fiscal 1998 to Fiscal 1999  related
primarily to completion of the project enabling WJLA to

                                      -30-
<PAGE>

simultaneously  broadcast its programming over its second channel  authorized to
transmit a digital  television  signal as well as an expansion to the  Company's
Tulsa  office and studio  facility.  The decrease in capital  expenditures  from
Fiscal 1999 to Fiscal 2000 was primarily  due to  completion  of the  previously
referenced  projects at WJLA and KTUL.  The  Company  anticipates  that  capital
expenditures for Fiscal 2001 will  approximate  $6,000 and will be primarily for
the  acquisition  of technical  equipment  and  vehicles to support  operations.
Management  expects  that the  source  of funds for  these  anticipated  capital
expenditures will be cash provided by operations and capital lease transactions.
The  Company has a $7,000  annually  renewable  lease  credit  facility  for the
purpose of financing capital expenditures. Interest rates under the lease credit
facility  are based  upon the  lessor's  cost of funds  and are  fixed  over the
five-year term of each respective  lease. This facility expires on June 30, 2001
and is renewable annually on mutually  satisfactory terms. The Company currently
intends to renew this  facility.  At September  30, 2000,  there were no amounts
outstanding under this lease credit facility, and $3,562 was outstanding under a
previous lease credit facility.

The Company  regularly enters 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 1998, 1999
and 2000, the Company made cash payments of approximately  $17,600,  $17,200 and
$20,500,  respectively,  for rights to television programs.  As of September 30,
2000,  the Company had  commitments  to acquire  further  program rights through
September 30, 2005 totaling  $47,337 and  anticipates  cash payments for program
rights will approximate $20,000 per year for the foreseeable future. The Company
currently intends to fund these commitments with cash provided by operations.

The  Company  completed  its  acquisition  of WJSU on March 22, 2000 (See "Owned
and/or   Programmed   Stations  -  WBMA/WCFT/WJSU:   Birmingham   (Anniston  and
Tuscaloosa),  Alabama").  The Company  funded the purchase  price of $3,372 with
cash provided by operations.

Based upon the Company's current level of operations,  management  believes that
available cash,  together with available  borrowings  under the revolving credit
facility  and lease  credit  facility,  will be adequate  to meet the  Company's
anticipated future  requirements for working capital,  capital  expenditures and
scheduled payments of interest on its 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, 2000, 74% of the assets of ACC were held by operating subsidiaries
and for Fiscal 2000,  approximately  50% of ACC's net  operating  revenues  were
derived from the operations of ACC's subsidiaries.

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

                                      -31-
<PAGE>

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  state  income tax
returns.

The provision for income taxes is  determined  in accordance  with  Statement of
Financial  Accounting  Standards (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  the  Company  as  if  the  Company  and  its
subsidiaries were separate  taxpayers.  The Company records 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.

Inflation

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

New Accounting Standards

SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities" was
issued  during  the  year  ended  September  30,  1998.  Additionally,  the U.S.
Securities and Exchange  Commission  issued Staff Accounting  Bulletin (SAB) No.
101,  "Revenue  Recognition  in  Financial  Statements"  during  the year  ended
September 30, 2000. SFAS No. 133, as amended, and SAB No. 101, as amended,  will
become  effective  during the year  ending  September  30, 2001 and will have no
impact on the Company's financial position or results of operations.


                                      -32-
<PAGE>

             ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
                                   MARKET RISK

At September 30, 2000, the Company had other  financial  instruments  consisting
primarily  of  long-term  fixed  interest  rate  debt.  Such debt,  with  future
principal  payments of $425,000,  matures  during the year ending  September 30,
2008. At September 30, 2000, the carrying  value of such debt was $424,167,  the
fair value was $408,000 and the weighted  average  interest  rate was 9.4%.  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. 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.  The Company actively
monitors the capital markets in analyzing its 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.



                                      -33-
<PAGE>

                                    PART III

                    ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS
                                OF THE REGISTRANT

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

      Name                Age           Title
      ----                ---           -----
<S>                       <C>   <C>
Joe L. Allbritton         75    Chairman of the Executive Committee and Director
Barbara B. Allbritton     63    Vice President and Director
Lawrence I. Hebert        54    Chairman, Chief Executive Officer and Director
Robert L. Allbritton      31    President and Director
Frederick J. Ryan, Jr.    45    Vice Chairman, Executive Vice President, Chief
                                Operating Officer and Director
W.E. Tige Savage          32    Director
Jerald N. Fritz           49    Vice President, Legal and Strategic Affairs,
                                General Counsel
Stephen P. Gibson         35    Vice President and Chief Financial Officer
</TABLE>

 JOE L.  ALLBRITTON  is the  founder  of ACC and was  Chairman  of the  Board of
Directors from its inception  until 1998. In April 1998, Mr.  Allbritton  became
Chairman  of the  Executive  Committee  of the  Board of  Directors  of ACC.  In
addition to his position with ACC, Mr.  Allbritton has served as Chairman of the
Board of Riggs National  Corporation  ("Riggs") (owner of banking  operations in
Washington,  D.C., Maryland, Virginia, Florida and internationally) from 1981 to
the present;  Chairman of the Board of Riggs Bank N.A. ("Riggs Bank") since 1983
and its Chief Executive  Officer since 1982;  Director of Riggs Bank Europe Ltd.
since 1984 and its  Chairman of the Board since 1992;  Chairman of the Board and
owner  since  1958 of  Perpetual  (indirect  owner of ACC and 80% owner  through
Allnewsco  of  NewsChannel  8,  a  Virginia-based  cable  programming  service);
Chairman of Allnewsco  since its  inception  in 1990;  Chairman of the Board and
owner  since  1988 of  Westfield;  Chairman  of the Board of  Houston  Financial
Services Ltd. Since 1977; Chairman of the Board of WSET since 1974; a Manager of
KATV,  KTUL and WCIV since 1997;  Chairman of the Board of Allfinco,  Harrisburg
Television  and TV  Alabama  since  1995;  Chairman  of  the  Board  of AGI  and
Allbritton  Jacksonville,  Inc. ("AJI") since 1996; a Director of Allbritton New
Media,  Inc.  ("ANMI") since 1999; and a Trustee and President of The Allbritton
Foundation  since 1971. Mr.  Allbritton is the husband of Barbara B.  Allbritton
and the father of Robert L. Allbritton.  See "Certain  Relationships and Related
Transactions".

BARBARA B.  ALLBRITTON has been a Director of ACC since its inception and one of
its Vice  Presidents  since 1980.  In addition to her  position  with ACC,  Mrs.
Allbritton  has been a  Director  of  Riggs  since  1991;  a  Director  and Vice
President of WSET since 1976; a Vice  President and Director of Perpetual  since
1978;  a Director  of Houston  Financial  Services  since  1977;  a Director  of
Allnewsco since 1990; a Trustee and Vice President of The Allbritton  Foundation
since 1971; a Director of Allfinco,  Harrisburg  Television and TV Alabama since
1995;  a Manager of KATV,  KTUL and WCIV since  1997;  a Director  of ANMI since
1999; and a Director of AGI and AJI since 1996.  Mrs.  Allbritton is the wife of
Joe L.  Allbritton  and  the  mother  of  Robert  L.  Allbritton.  See  "Certain
Relationships and Related Transactions".

                                      -34-
<PAGE>

LAWRENCE I. HEBERT has been Chairman of the Board and Chief Executive Officer of
ACC since  April  1998 and a Director  of ACC since  1981.  He also  serves as a
member of the Executive Committee of the Board of Directors of ACC. He served as
Vice Chairman of the Board of ACC from 1983 to 1998,  and was its President from
1984 to 1998.  He has been a Director of Perpetual  since 1980 and its President
since 1981;  President  of  Westfield  since 1988;  President  and a Director of
Westfield  News  Publishing,  Inc.  since 1991; a Director of WSET since 1982; a
Manager of KATV, KTUL and WCIV since 1997; Vice Chairman of the Board of Houston
Financial Services since 1977; a Director of Allnewsco since 1989; President and
a Director of ATP since 1989; a Vice  President and a Director of Allfinco since
1995; a Director of Harrisburg  Television and TV Alabama since 1995;  President
and a Director of AGI since 1996;  a Director of AJI since 1996;  and a Director
and Vice President of ANMI since 1999. In addition, Mr. Hebert was Vice Chairman
of the Board of Riggs from 1988 to 1993,  and has been a Director of Riggs since
1988; a Director of Riggs Bank Europe Ltd.  since 1987; a Director of Riggs Bank
from 1981 to 1988; a Director of Allied  Capital  Corporation  (venture  capital
fund) since 1989; and a Trustee of The Allbritton Foundation since 1997.

ROBERT L.  ALLBRITTON has been President of ACC since 1998 and a Director of ACC
since 1993. He also serves as a member of the  Executive  Committee of the Board
of Directors of ACC. He served as Executive Vice  President and Chief  Operating
Officer of ACC from 1994 to 1998.  He has been  President and a Director of ANMI
since 1999;  President  and a Manager of Irides,  LLC  ("Irides")  since 1999; a
Director of Allnewsco since 1992; a Director of Riggs Bank from 1994 to 1997 and
Riggs Bank Europe Ltd. since 1994; a Director of Riggs since 1994; and a Trustee
and Vice  President  of The  Allbritton  Foundation  since  1992.  He has been a
Director  of  Perpetual  since 1993;  President  and  Director  of Allfinco  and
Harrisburg  Television  since 1995;  Vice President and a Director of TV Alabama
since 1995;  Vice President and a Director of AGI since 1996; Vice President and
a Director of AJI since 1996 and  President  of KTUL since  1997.  He has been a
Manager of KATV,  KTUL and WCIV since 1997.  He is the son of Joe L. and Barbara
B. Allbritton. See "Certain Relationships and Related Transactions".

FREDERICK J. RYAN, JR. has been  Executive  Vice  President and Chief  Operating
Officer of ACC since 1998 and a Director and Vice Chairman of ACC since 1995. He
served as Senior Vice  President of ACC from 1995 to 1998. He is also  Executive
Vice President of KATV, KTUL, WSET, WCIV, Harrisburg Television, TV Alabama, AJI
and Allnewsco as well as Vice  President of ANMI. 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,  a Director of Ford's Theatre and Trustee of Ronald Reagan Institute
of Emergency Medicine at George Washington University. Mr. Ryan is a Director of
Riggs Bank and  Chairman of its  International  Committee  since  April 2000;  a
Director of Riggs Bank Europe Ltd. in London since 1996; and was a member of the
Board of Consultants for Riggs Bank (1996-2000).

                                      -35-
<PAGE>

W.E.  TIGE  SAVAGE has been a Director  of ACC since  1999.  In  addition to his
position  with ACC,  Mr.  Savage  serves as  Executive  Vice  President of Riggs
Capital Partners and has served as Vice President of Irides since 1999. Prior to
serving in this  capacity,  he served as Executive  Vice President of Riggs Bank
(1998-2000);  Vice  President  and Special  Assistant  to the  Chairman of Riggs
(1993-1996);  Group Manager,  Credit Underwriting Group, Riggs Bank (1992-1993);
and Associate,  Corporate Banking, Riggs Bank (1991). Mr. Savage also previously
served as Associate, Corporate Finance at Dillon Read and Co. in 1997.

JERALD N.  FRITZ has been a Vice  President  of ACC since  1987,  serving as its
General Counsel and overseeing  strategic planning and governmental  affairs. He
also has served as a Vice  President  of  Westfield  and ATP since 1988,  a Vice
President of Allnewsco  since 1989 and a Vice  President of Allfinco since 1995.
He has been a Vice  President of AGI since 1996 and a Vice President of ANMI and
Irides since 1999. From 1981 to 1987, Mr. Fritz held several  positions with the
FCC,  including  Chief of Staff,  Legal Counsel to the Chairman and Chief of the
Common  Carrier  Bureau's  Tariff  Division.  Mr. Fritz  practiced  law with the
Washington,  D.C. firm of Pierson,  Ball & Dowd,  specializing in communications
law from 1978 to 1981 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 legal career with the FCC in 1976 and began his career in broadcasting
in 1973 with WGN-TV,  Chicago. He currently serves as an elected director of the
National  Association  of  Broadcasters  ("NAB")  and a member of the  Governing
Committee of the Communications Forum of the American Bar Association. He serves
on the Futures and Copyright Committees of the NAB and the Legislative Committee
of the ABC Affiliates Association.

STEPHEN P. GIBSON has been a Vice President of ACC since 1997 when he joined the
Company.  He  served  as Vice  President  and  Controller  and was  named  Chief
Financial  Officer in 1998. He is also Vice President of AGI, KATV,  KTUL, WSET,
WCIV, Allfinco, Harrisburg Television, TV Alabama, ATP, AJI, Allnewsco, ANMI and
Irides.  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.


                                      -36-
<PAGE>

ITEM 11. EXECUTIVE COMPENSATION

The  following  table  sets  forth  compensation  paid  to the  Company's  Chief
Executive  Officer  and the  four  most  highly  compensated  Company  executive
officers for Fiscal 2000, 1999 and 1998:
<TABLE>
<CAPTION>

                                  Summary Compensation Table<F1>
                                  ------------------------------

      Name and                   Fiscal                           Other Annual        All Other
 Principal Position               Year     Salary       Bonus     Compensation      Compensation
 ------------------               ----     ------       -----     ------------      ------------

<S>                               <C>     <C>          <C>                            <C>
Joe L. Allbritton                 2000    $550,000                                    $121,700<F2>
 Chairman of the Executive        1999     550,000                                     112,500<F2>
 Committee                        1998     550,000                                     106,300<F2>

Lawrence I. Hebert<F1>            2000     200,000     $75,000
 Chairman and Chief               1999     200,000      55,000
 Executive Officer                1998     150,000      50,000

Robert L. Allbritton<F1>          2000     200,000      75,000
 President                        1999     200,000      55,000

Frederick J. Ryan, Jr.<F3>        2000     200,000      75,000                           4,700<F4>
 Chief Operating Officer          1999     200,000      55,000                           5,900<F4>
                                  1998     150,000      55,000                           4,700<F4>

Jerald N. Fritz<F5>               2000     180,000      50,000                           4,600<F4>
 Vice President, Legal            1999     170,000      55,000                           5,000<F4>
 and Strategic Affairs            1998     160,000      55,000                           5,200<F4>

----------
<FN>
<F1>      Lawrence I. Hebert,  Chairman and Chief Executive  Officer of ACC, and
          Robert L. Allbritton,  President of ACC, are 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  included  as  compensation  above.  In
          addition, Mr. Robert L. Allbritton is paid management fees directly by
          ACC which are also included as compensation  above.  For Mr. Robert L.
          Allbritton for Fiscal 1998, his reportable ACC  compensation  was less
          than $100,000, and is, therefore, not included herein.
<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 paid by ACC.  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>      Frederick J. Ryan, Jr. receives additional compensation from Perpetual
          for services to Perpetual  and other  interests of Joe L.  Allbritton,
          including the Company.  This additional  compensation is not allocated
          among these  interests,  and the Company does not reimburse  Perpetual
          for any  portion of this  additional  compensation  to Mr.  Ryan.  The
          portion of the additional  compensation  paid by Perpetual to Mr. Ryan
          that may be  attributable  to his services to the Company has not been
          quantified. Such portion is not material to the consolidated financial
          condition or results of operations of the Company.
<F4>      These amounts  reflect  annual  contributions  by ACC to the Company's
          401(k) Plan.
<F5>      Jerald  N.  Fritz  is paid  compensation  by ACC for  services  to the
          Company  and  Perpetual.  Perpetual  has  reimbursed  ACC for  $4,600,
          $22,000  and  $31,000 of the  compensation  shown in the table for Mr.
          Fritz in Fiscal 1998, 1999 and 2000, respectively.
</FN>
</TABLE>

                                      -37-
<PAGE>

The Company does not have a  Compensation  Committee of its Board of  Directors.
Compensation of executive officers is determined by Joe L. Allbritton,  Lawrence
I. Hebert and Robert L. Allbritton.  Directors of the Company 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.
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 therefor.

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.


                                      -38-
<PAGE>

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

Distributions to Related Parties

The  Company  periodically  makes  advances  in the  form  of  distributions  to
Perpetual.  For Fiscal  2000,  the Company  made cash  advances to  Perpetual of
$275,024  and  Perpetual  made  repayments  on these cash  advances of $249,291.
Accordingly,  the net change in  distributions  to related parties during Fiscal
2000 was an increase of $25,733.  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,  the Company was charged by Perpetual
and made  payments to Perpetual for federal and state income taxes in the amount
of $8,808. As a result of making advances of tax payments in accordance with the
terms of the tax  sharing  agreement  between the  Company  and  Perpetual,  the
Company earned interest income from Perpetual in the amount of $304.

At  present,  the primary  source of  repayment  of net  advances is through the
ability of the Company 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 the Company's Consolidated Financial Statements.

During Fiscal 1991,  the Company made a $20,000  11.06% loan to Allnewsco.  This
amount has been reflected in the Company's  Consolidated Financial Statements on
a  consistent  basis with  other  distributions  to owners.  The loan had stated
repayment terms  consisting of annual  principal  installments of  approximately
$2,220  commencing  January 1997  through  January 2005 and payments of interest
semi-annually.  During Fiscal 1997 and 1998, the Company  deferred the first two
annual principal  installment  payments  pending  renegotiation of the repayment
terms.  Effective July 1, 1998, the note was amended to extend the maturity date
to January 2008 and defer all principal  installments  until maturity,  with the
principal balance also due upon demand. In exchange for the amendment, Allnewsco
paid  to the  Company  the  amount  of  $650.  Interest  payments  on  the  loan
approximate  $2,200  annually and have been made in accordance with the terms of
the note.  The Company  expects it will  continue to receive such  payments on a
current  basis.  To date,  interest  payments from Allnewsco have been funded by
advances from Perpetual to Allnewsco.  The Company  anticipates  that at least a
portion of such payments will be funded in a similar manner for the  foreseeable
future.  However, there can be no assurance that Allnewsco will have the ability
to make such interest payments in the future.

Under  the  terms  of  the  Company's  borrowing  agreements,  future  advances,
distributions   and  dividends  to  related   parties  are  subject  to  certain
restrictions.  The Company  anticipates that, subject to such restrictions,  ACC
will make  distributions and loans to related parties in the future.  Subsequent
to September 30, 2000 and through November 14, 2000, the Company made additional
net distributions to owners of $2,780.

                                      -39-
<PAGE>

Management Fees

Management  fees of $500 were paid to  Perpetual by the Company for Fiscal 2000.
The Company also paid executive  compensation  in the form of management fees to
Joe L. Allbritton and Robert L. Allbritton for Fiscal 2000 in the amount of $550
and $190, respectively. The Company expects to pay management fees to Perpetual,
Mr.  Joe L.  Allbritton  and Mr.  Robert L.  Allbritton  during  Fiscal  2001 of
approximately  $550,  $550 and $200,  respectively.  The Company  believes  that
payments to Perpetual,  Mr. Joe L.  Allbritton and Mr. Robert L. Allbritton will
continue in the future and that the amount of the management fees is at least as
favorable to the Company as those prevailing for comparable transactions with or
involving unaffiliated parties.

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 state income tax returns.

The provision for income taxes is  determined  in accordance  with  Statement of
Financial  Accounting  Standards (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  the  Company  as  if  the  Company  and  its
subsidiaries were separate  taxpayers.  The Company records 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.

                                      -40-
<PAGE>

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 42.6%
of the  common  stock of Riggs is  deemed  to be  beneficially  owned by  Riggs'
Chairman,  Joe L.  Allbritton,  and 7.7% of the  common  stock is  deemed  to be
beneficially owned by Riggs' director, Barbara B. Allbritton,  including in each
case 7.2% of the common stock of which Mr. and Mrs.  Allbritton share beneficial
ownership.  During  Fiscal 2000,  ACC paid Riggs Bank $283 for the office space.
ACC  expects  to pay  approximately  $290 for such  space  during  Fiscal  2001.
Management  believes the same terms and conditions would have prevailed had they
been negotiated with a nonaffiliated company.

Local Advertising Revenues

WJLA generated  advertising  revenue from Riggs Bank  approximating  $227 during
Fiscal 2000. The amount of total  advertising it may purchase for Fiscal 2001 is
unknown.  Management  believes  that  the  terms  of the  transactions  would be
substantially  the same or at least as favorable to ACC as those  prevailing for
comparable transactions with or involving nonaffiliated companies.

Internet Services

The Company has entered into various  agreements with Irides,  LLC ("Irides") to
provide  certain of the  Company's  stations  with web site design,  hosting and
maintenance  services.  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.  The Company  incurred  fees of
$143 to Irides during Fiscal 2000, and the Company expects to pay fees to Irides
during  Fiscal 2001 for services  performed  of  approximately  $60.  Management
believes that the terms and conditions of the agreements  would be substantially
the  same or at least as  favorable  to the  Company  as  those  prevailing  for
comparable transactions with or involving nonaffiliated companies.


                                      -41-
<PAGE>

                                     PART IV

                     ITEM 14. EXHIBITS, FINANCIAL STATEMENT
                        SCHEDULES AND REPORTS ON FORM 8-K

(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.

(b) No reports on Form 8-K were filed during the fourth quarter of Fiscal 2000.



                                      -42-
<PAGE>



                        ALLBRITTON COMMUNICATIONS COMPANY
                        ---------------------------------

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------

                                                                           Page
                                                                           ----

Report of Independent Accountants.........................................  F-2
Consolidated Balance Sheets as of September 30, 1999 and 2000.............  F-3
Consolidated Statements of Operations and Retained Earnings
   for the Years Ended September 30, 1998, 1999 and 2000..................  F-4
Consolidated Statements of Cash Flows for the Years Ended
   September 30, 1998, 1999 and 2000......................................  F-5
Notes to Consolidated Financial Statements................................  F-6
Financial Statement Schedule for the Years Ended
   September 30, 1998, 1999 and 2000
   II- Valuation and Qualifying Accounts and Reserves.....................  F-18



                                      F-1
<PAGE>



                        REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholder
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, 1999 and 2000, and
the results of their operations and their cash flows for each of the three years
in the period ended September 30, 2000, in conformity with accounting principles
generally accepted in the United States of America.  These financial  statements
are the  responsibility of the Company's  management;  our  responsibility is to
express  an  opinion  on these  financial  statements  based on our  audits.  We
conducted our audits of these  statements in accordance with auditing  standards
generally  accepted in the United  States of America  which 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.

PricewaterhouseCoopers LLP

Washington, D.C.
November 14, 2000



                                      F-2
<PAGE>

                                ALLBRITTON COMMUNICATIONS COMPANY
                                   CONSOLIDATED BALANCE SHEETS
                         (Dollars in thousands except share information)
<TABLE>
<CAPTION>

                                                                               September 30,
                                                                               -------------
                                                                             1999         2000
                                                                             ----         ----

                                ASSETS
Current assets
<S>                                                                       <C>          <C>
    Cash and cash equivalents..........................................   $  14,437    $  11,913
    Accounts receivable, less allowance for doubtful
       accounts of $1,424 and $1,181 ..................................      35,093       37,802
    Program rights ....................................................      18,057       19,945
    Deferred income taxes .............................................       1,262          967
    Interest receivable from related party ............................         492          492
    Other .............................................................       2,434        2,535
                                                                          ---------    ---------
       Total current assets ...........................................      71,775       73,654

Property, plant and equipment, net ....................................      47,098       42,185
Intangible assets, net ................................................     139,134      136,718
Deferred financing costs and other ....................................       9,661        8,412
Cash surrender value of life insurance ................................       7,015        8,038
Program rights ........................................................       1,185          927
                                                                          ---------    ---------
                                                                          $ 275,868    $ 269,934
                                                                          =========    =========

            LIABILITIES AND STOCKHOLDER'S INVESTMENT

Current liabilities
    Current portion of long-term debt..................................   $   1,921    $   1,759
    Accounts payable ..................................................       3,699        3,105
    Accrued interest payable ..........................................      11,156       11,156
    Program rights payable ............................................      22,721       25,257
    Accrued employee benefit expenses .................................       4,470        4,798
    Other accrued expenses ............................................       3,570        4,503
                                                                          ---------    ---------
       Total current liabilities ......................................      47,537       50,578

Long-term debt ........................................................     427,708      425,970
Program rights payable ................................................       1,672        1,568
Deferred rent and other ...............................................       3,048        2,341
Accrued employee benefit expenses .....................................       2,112        1,644
Deferred income taxes .................................................       5,138        7,729
                                                                          ---------    ---------
       Total liabilities ..............................................     487,215      489,830
                                                                          ---------    ---------

Commitments and contingent liabilities (Note 9)
Stockholder's investment
    Preferred stock, $1 par value, 800 shares authorized, none issued..          --           --
    Common stock, $.05 par value, 20,000 shares authorized, issued
       and outstanding ................................................           1            1
    Capital in excess of par value ....................................       6,955        6,955
    Retained earnings .................................................      54,054       71,238
    Distributions to owners, net (Note 7) .............................    (272,357)    (298,090)
                                                                          ---------    ---------
       Total stockholder's investment .................................    (211,347)    (219,896)
                                                                          ---------    ---------
                                                                          $ 275,868    $ 269,934
                                                                          =========    =========
</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>

                                                             Years Ended September 30,
                                                             -------------------------
                                                           1998         1999         2000
                                                           ----         ----         ----

<S>                                                     <C>          <C>          <C>
Operating revenues, net ............................    $ 182,484    $ 187,288    $ 205,307
                                                        ---------    ---------    ---------

Television operating expenses, excluding
   depreciation and amortization ...................      106,147      109,549      113,617
Depreciation and amortization ......................       18,922       17,471       15,660
Corporate expenses .................................        4,568        4,339        4,873
                                                        ---------    ---------    ---------

                                                          129,637      131,359      134,150
                                                        ---------    ---------    ---------

Operating income ...................................       52,847       55,929       71,157

Nonoperating income (expense)
   Interest income
      Related party ................................        2,222        2,480        2,562
      Other ........................................        1,117          280          331
   Interest expense ................................      (44,340)     (42,154)     (42,212)
   Other, net ......................................         (513)      (1,190)      (1,404)
                                                        ---------    ---------    ---------

Income before income taxes and extraordinary loss ..       11,333       15,345       30,434
Provision for income taxes .........................        5,587        6,717       13,250
                                                        ---------    ---------    ---------

Income before extraordinary loss ...................        5,746        8,628       17,184
Extraordinary loss on early repayment of debt,
   net of income tax benefit of $3,176 .............       (5,155)          --           --
                                                        ---------    ---------    ---------

Net income .........................................          591        8,628       17,184
Retained earnings, beginning of year ...............       44,835       45,426       54,054
                                                        ---------    ---------    ---------

Retained earnings, end of year .....................    $  45,426    $  54,054    $  71,238
                                                        =========    =========    =========

</TABLE>

                See accompanying notes to consolidated financial statements.

                                             F-4
<PAGE>

                              ALLBRITTON COMMUNICATIONS COMPANY
                            CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    (Dollars in thousands)
<TABLE>
<CAPTION>

                                                               Years Ended September 30,
                                                               -------------------------
                                                            1998         1999         2000
                                                            ----         ----         ----
Cash flows from operating activities:
<S>                                                      <C>          <C>          <C>
   Net income ........................................   $     591    $   8,628    $  17,184
                                                         ---------    ---------    ---------
   Adjustments to reconcile net income to net
     cash provided by operating activities:
   Depreciation and amortization .....................      18,922       17,471       15,660
   Other noncash charges .............................       1,267        1,257        1,424
   Extraordinary loss on early repayment of debt .....       5,155           --           --
   Provision for doubtful accounts ...................         268          519          474
   (Gain) loss on disposal of assets .................         (53)          (3)          23
   Changes in assets and liabilities:
     (Increase) decrease in assets:
      Accounts receivable ............................         733       (2,044)      (3,183)
      Program rights .................................      (3,128)        (206)      (1,630)
      Other current assets ...........................         525         (431)        (269)
      Other noncurrent assets ........................        (270)      (1,313)        (914)
      Deferred income taxes ..........................        --            444          295
     Increase (decrease) in liabilities:
      Accounts payable ...............................        (972)       1,051         (594)
      Accrued interest payable .......................         391         --           --
      Program rights payable .........................       1,287        2,422        2,432
      Accrued employee benefit expenses ..............       1,273         (255)        (140)
      Other accrued expenses .........................        (682)        (687)         933
      Deferred rent and other liabilities ............         369         (388)        (707)
      Deferred income taxes ..........................       2,346        1,837        2,591
                                                         ---------    ---------    ---------
         Total adjustments ...........................      27,431       19,674       16,395
                                                         ---------    ---------    ---------
         Net cash provided by operating activities ...      28,022       28,302       33,579
                                                         ---------    ---------    ---------
Cash flows from investing activities:
   Capital expenditures ..............................      (8,557)      (9,849)      (5,048)
   Exercise of option to acquire assets of WJSU ......        --           --         (3,372)
   Proceeds from disposal of assets ..................         367           40           66
                                                         ---------    ---------    ---------
         Net cash used in investing activities .......      (8,190)      (9,809)      (8,354)
                                                         ---------    ---------    ---------
Cash flows from financing activities:
   Proceeds from issuance of debt ....................     150,000         --           --
   Deferred financing costs ..........................      (4,481)        --           --
   Prepayment penalty on early repayment
      of debt ........................................      (5,842)        --           --
   Repayments under lines of credit, net .............     (12,700)        --           --
   Principal payments on long-term debt and
      capital leases .................................    (124,322)      (1,706)      (2,016)
   Distributions to owners, net of certain charges ...    (134,814)    (282,090)    (275,024)
   Repayments of distributions to owners .............     118,755      265,891      249,291
                                                         ---------    ---------    ---------
         Net cash used in financing activities .......     (13,404)     (17,905)     (27,749)
                                                         ---------    ---------    ---------
Net increase (decrease) in cash and cash equivalents .       6,428          588       (2,524)
Cash and cash equivalents, beginning of year .........       7,421       13,849       14,437
                                                         ---------    ---------    ---------
Cash and cash equivalents, end of year ...............   $  13,849    $  14,437    $  11,913
                                                         =========    =========    =========

Supplemental disclosure of cash flow information:
      Cash paid for interest .........................   $  43,949    $  41,926    $  41,981
                                                         =========    =========    =========
      Cash paid for state income taxes ...............   $     105    $      48    $     529
                                                         =========    =========    =========
Non-cash investing and financing activities:
      Equipment acquired under capital leases ........   $     634    $   1,528    $    --
                                                         =========    =========    =========
</TABLE>

                 See accompanying notes to consolidated financial statements.

                                             F-5
<PAGE>

                        ALLBRITTON COMMUNICATIONS COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (Dollars in thousands)

NOTE 1 - THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES

Allbritton  Communications  Company (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 diverse 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

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 generally accepted accounting  principles 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.

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.

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

                                      F-6
<PAGE>

                        ALLBRITTON COMMUNICATIONS COMPANY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                             (Dollars in thousands)

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

Intangible  assets-Intangible  assets  consist of values  assigned to  broadcast
licenses and network  affiliations  as well as favorable  terms on contracts and
leases.  Additionally,  prior to the completion of the Company's  acquisition of
WJSU on March 22,  2000,  intangible  assets  included the option to acquire the
assets of WJSU (the  Option)  (see Note 2). The amounts  assigned to  intangible
assets were based on the results of independent  valuations and are amortized on
a straight-line basis over their estimated useful lives.  Broadcast licenses and
network affiliations are amortized over 40 years, and the premiums for favorable
terms on  contracts  and  leases  are  amortized  over the terms of the  related
contracts and leases (19 to 25 years).  Prior to the completion of the Company's
acquisition  of WJSU,  the Option was amortized  over the term of the Option and
the associated  local  marketing  agreement (10 years).  Upon  completion of the
acquisition, the portion of the purchase price assigned to the broadcast license
and network  affiliation of WJSU is being  amortized  over its estimated  useful
life of 40 years. The Company assesses the  recoverability  of intangible assets
on an ongoing  basis by  evaluating  whether  amounts can be  recovered  through
undiscounted cash flows over the remaining amortization period.

                                      F-7
<PAGE>
                        ALLBRITTON COMMUNICATIONS COMPANY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                             (Dollars in thousands)


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.  This
method does not differ significantly from the effective interest rate method.

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,
2000 had an overnight  repurchase  agreement  with a financial  institution  for
$10,031.  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 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  Statement of
Financial  Accounting  Standards (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  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

                                      F-8
<PAGE>
                        ALLBRITTON COMMUNICATIONS COMPANY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                             (Dollars in thousands)


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.

New  pronouncements-SFAS  No. 133,  "Accounting  for Derivative  Instruments and
Hedging  Activities"  was  issued  during  the year ended  September  30,  1998.
Additionally,   the  U.S.   Securities  and  Exchange  Commission  issued  Staff
Accounting Bulletin (SAB) No. 101, "Revenue Recognition in Financial Statements"
during the year ended September 30, 2000. SFAS No. 133, as amended,  and SAB No.
101, as amended, will become effective during the year ending September 30, 2001
and will  have no impact on the  Company's  financial  position  or  results  of
operations.

NOTE 2 - LOCAL MARKETING AGREEMENT, ASSOCIATED OPTION AND ACQUISITION OF WJSU

On December 29, 1995, the Company, through an 80%-owned subsidiary, entered into
a ten-year local marketing  agreement (LMA) with the owner of WJSU, a television
station  operating  in  Anniston,  Alabama.  The LMA provided for the Company to
supply  program  services to WJSU and to retain all  revenues  from  advertising
sales. In exchange,  the Company paid all station operating expenses and certain
management fees to the station's  owner. In connection with the LMA, the Company
entered into the Option to acquire the assets of WJSU at a cost of $15,348.  The
Company  exercised  its option to acquire WJSU on September 14, 1999 by entering
into an asset purchase agreement for the purchase of WJSU, subject to regulatory
approval and customary  closing  conditions.  The Company received such approval
and  completed  its  acquisition  of WJSU  on  March  22,  2000  for  additional
consideration  of $3,372.  The total cost to acquire and exercise the Option was
$18,720.  The acquisition was accounted for as a purchase and  accordingly,  the
cost of the  acquired  entity was  assigned  to the  identifiable  tangible  and
intangible  assets  acquired based on their fair values at the date of purchase.
The consolidated results of operations of the Company include operating revenues
and operating expenses of WJSU from December 29, 1995 to March 21, 2000 pursuant
to the terms of the LMA, and since March 22, 2000 as an owned station.

                                      F-9
<PAGE>
                        ALLBRITTON COMMUNICATIONS COMPANY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                             (Dollars in thousands)


NOTE 3 - PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consists of the following:
<TABLE>
<CAPTION>

                                                          September 30,
                                                          -------------
                                                        1999         2000
                                                        ----         ----

      <S>                                            <C>          <C>
      Buildings and leasehold improvements ......    $  21,207    $  26,572
      Furniture, machinery and equipment ........      106,581      109,100
      Equipment under capital leases ............        9,392        9,317
                                                     ---------    ---------
                                                       137,180      144,989
      Less accumulated depreciation .............      (97,932)    (106,334)
                                                     ---------    ---------
                                                        39,248       38,655
      Land ......................................        2,880        2,889
      Construction-in-progress ..................        4,970          641
                                                     ---------    ---------

                                                     $  47,098    $  42,185
                                                     =========    =========
</TABLE>

Depreciation and amortization  expense was $13,233,  $11,801 and $10,586 for the
years ended  September 30, 1998,  1999 and 2000,  respectively,  which  includes
amortization of equipment under capital leases.

NOTE 4 - INTANGIBLE ASSETS

Intangible assets consist of the following:
<TABLE>
<CAPTION>

                                                            September 30,
                                                            -------------
                                                          1999         2000
                                                          ----         ----

      <S>                                              <C>          <C>
      Broadcast licenses and network affiliations .... $ 150,243    $ 168,249
      Option to purchase the assets of WJSU ..........    15,348           --
      Other intangibles ..............................     7,648        7,648
                                                       ---------    ---------
                                                         173,239      175,897
      Less accumulated amortization ..................   (34,105)     (39,179)
                                                       ---------    ---------

                                                       $ 139,134    $ 136,718
                                                       =========    =========
</TABLE>

Amortization expense was $5,689, $5,670 and $5,074 for the years ended September
30, 1998, 1999 and 2000, respectively.  The Company does not separately allocate
amounts between broadcast licenses and network affiliations.

                                      F-10
<PAGE>
                        ALLBRITTON COMMUNICATIONS COMPANY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                             (Dollars in thousands)


NOTE 5 - LONG-TERM DEBT

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

                                                                            September 30,
                                                                            -------------
                                                                          1999         2000
                                                                          ----         ----

Senior Subordinated Debentures, due November 30, 2007
<S>                                                                    <C>          <C>
   with interest payable semi-annually at 9.75% ...................    $ 275,000    $ 275,000
Senior Subordinated Notes, due February 1, 2008
   with interest payable semi-annually at 8.875% ..................      150,000      150,000
Revolving Credit Agreement, maximum amount of $40,000,
   expiring April 16, 2001, secured by the outstanding
   stock of the Company and its subsidiaries, interest
   payable quarterly at various rates from prime or
   LIBOR plus 1%, depending on certain financial
   operating tests ................................................           --           --
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
   (7.34%-8.93% at September 30, 2000)(See Note 9) ................        5,578        3,562
Master Equipment Lease Agreement, maximum amount of
   $7,000, expiring June 30, 2001 and renewable annually,
   secured by the assets acquired, interest payable
   monthly at variable rates as determined on the
   acquisition date for each asset purchased ......................           --           --
                                                                       ---------    ---------
                                                                         430,578      428,562
Less unamortized discount .........................................         (949)        (833)
                                                                       ---------    ---------
                                                                         429,629      427,729
Less current maturities ...........................................       (1,921)      (1,759)
                                                                       ---------    ---------

                                                                       $ 427,708    $ 425,970
                                                                       =========    =========
</TABLE>

On January 22,  1998,  the Company  completed a $150,000  offering of its 8.875%
Senior  Subordinated  Notes  due 2008  (the  Notes).  The cash  proceeds  of the
offering,  net of offering  expenses,  were used to redeem the  Company's  11.5%
Senior Subordinated  Debentures due 2004 (the 11.5% Debentures) on March 3, 1998
with the balance used to repay certain amounts  outstanding  under the Company's
Revolving Credit Agreement.  A prepayment  penalty on the early repayment of the
11.5%  Debentures and the accelerated  amortization  of the related  unamortized
deferred financing costs totaled  approximately  $8,331 before applicable income
tax benefit of approximately $3,176. This loss was reflected as an extraordinary
loss of $5,155 in the  consolidated  statement of operations  for the year ended
September 30, 1998.

                                      F-11
<PAGE>
                        ALLBRITTON COMMUNICATIONS COMPANY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                             (Dollars in thousands)


Unamortized  deferred financing costs of $8,877 and $7,737 at September 30, 1999
and 2000,  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, 1998, 1999 and
2000 was  $1,136,  $1,141 and $1,140  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,  the Company must maintain specified
levels  of  operating  cash flow and  working  capital  and  comply  with  other
financial  covenants.  The Company is also  required to pay a commitment  fee of
 .375% per annum based on any unused portion of the Revolving Credit Agreement.

The Company estimates the fair value of its Senior  Subordinated  Debentures and
Senior Subordinated Notes to be approximately $416,000 and $408,000 at September
30, 1999 and 2000, respectively.

NOTE 6 - INCOME TAXES

The provision for income taxes consists of the following:
<TABLE>
<CAPTION>

                               Years ended September 30,
                               -------------------------
                              1998       1999       2000
                              ----       ----       ----
Current
<S>                         <C>        <C>        <C>
    Federal ...........     $ 3,178    $ 3,879    $ 8,498
    State .............          63        557      1,866
                            -------    -------    -------
                              3,241      4,436     10,364
                            -------    -------    -------
Deferred
    Federal ...........       1,185      1,577      2,234
    State .............       1,161        704        652
                            -------    -------    -------
                              2,346      2,281      2,886
                            -------    -------    -------

                            $ 5,587    $ 6,717    $13,250
                            =======    =======    =======
</TABLE>

The  prepayment  penalty on the early  repayment of certain debt during the year
ended  September  30, 1998 resulted in an  extraordinary  loss (see Note 5). The
extraordinary  loss of $5,155 is  presented  net of the  applicable  income  tax
benefit in the  accompanying  consolidated  statement of operations.  The $3,176
benefit for income taxes  arising  from the  extraordinary  loss  consisted of a
$2,745 benefit for federal income tax purposes,  a $258 benefit for local income
tax purposes and a $173 deferred tax benefit.

                                      F-12
<PAGE>
                        ALLBRITTON COMMUNICATIONS COMPANY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                             (Dollars in thousands)


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

                                                             September 30,
                                                             -------------
                                                           1999        2000
                                                           ----        ----
Deferred income tax assets:
<S>                                                      <C>         <C>
    State and local operating loss carryforwards ....    $ 2,537     $ 2,458
    Accrued employee benefits .......................      1,288       1,040
    Deferred rent ...................................        926         726
    Allowance for accounts receivable ...............        565         465
    Other ...........................................        283         198
                                                         -------     -------
                                                           5,599       4,887
    Less: valuation allowance .......................     (2,238)     (2,404)
                                                         -------     -------
                                                           3,361       2,483
                                                         -------     -------
Deferred income tax liabilities:
    Depreciation and amortization ...................     (7,237)     (9,245)
                                                         -------     -------

Net deferred income tax liabilities .................    $(3,876)    $(6,762)
                                                         =======     =======
</TABLE>

The  Company  has  approximately  $50,300  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 2004 through 2015.
The change in the valuation  allowance for deferred tax assets of $338, $225 and
$166 during the years ended  September  30, 1998,  1999 and 2000,  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  before  extraordinary  loss:
<TABLE>
<CAPTION>

                                                           Years ended September 30,
                                                           -------------------------
                                                            1998     1999     2000
                                                            ----     ----     ----

<S>                                                         <C>      <C>      <C>
Statutory federal income tax rate ....................      34.0%    34.0%    35.0%
State income taxes, net of federal income
  tax benefit ........................................       7.6      5.5      6.7
Non-deductible expenses, principally
  amortization of certain intangible assets,
  insurance premiums and meals and entertainment .....       4.7      2.7      1.8
Change in valuation allowance ........................       3.0      1.5      0.5
Other, net ...........................................        --      0.1     (0.5)
                                                            ----     ----     ----

Effective income tax rate ............................      49.3%    43.8%    43.5%
                                                            ====     ====     ====
</TABLE>

                                      F-13
<PAGE>
                        ALLBRITTON COMMUNICATIONS COMPANY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                             (Dollars in thousands)


NOTE 7 - TRANSACTIONS WITH OWNERS AND RELATED PARTIES

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  following  summarizes  these and certain  other  transactions  with related
parties:
<TABLE>
<CAPTION>

                                                     Years ended September 30,
                                                     -------------------------
                                                 1998          1999          2000
                                                 ----          ----          ----
Distributions to owners, beginning of
<S>                                           <C>           <C>           <C>
   year ...................................   $ 237,354     $ 256,158     $ 272,357
Cash advances .............................     137,992       286,418       283,832
Repayment of cash advances ................    (118,755)     (265,891)     (249,291)
Charge for federal and state
   income taxes ...........................        (433)       (4,328)       (8,808)
                                              ---------     ---------     ---------

Distributions to owners, end of year ......   $ 256,158     $ 272,357     $ 298,090
                                              =========     =========     =========
Weighted average amount of non-interest
   bearing advances outstanding during
   the year ...............................   $ 230,642     $ 263,320     $ 280,149
                                              =========     =========     =========
</TABLE>

Subsequent to September 30, 2000 and through November 14, 2000, the Company made
additional net distributions to owners of $2,780.

Included  in  distributions  to  owners  is a  $20,000  loan made in 1991 by the
Company to  ALLNEWSCO,  Inc.  (Allnewsco),  an affiliate of the Company which is
controlled  by Mr.  Joe L.  Allbritton.  This  amount has been  included  in the
consolidated financial statements on a consistent basis with other cash advances
to related  parties.  The $20,000  note  receivable  from  Allnewsco  had stated
repayment terms consisting of annual principal installments approximating $2,220
commencing  January 1997 through January 2005.  During the years ended September
30,  1997 and  1998,  the  Company  deferred  the  first  two  annual  principal
installment  payments pending  renegotiation  of the repayment terms.  Effective
July 1, 1998,  the note was amended to extend the  maturity to January  2008 and
defer all principal installments until maturity, with the principal balance also
due upon demand.  In exchange for the  amendment,  Allnewsco paid to the Company
the amount of $650. This amount is included in other  noncurrent  liabilities in
the  accompanying  consolidated  balance  sheets  and is being  amortized  as an
adjustment of interest  income over the remaining term of the amended note using
the interest method.  The note has a stated interest rate of 11.06% and interest
is payable semi-annually. During each of the years ended September 30,

                                      F-14
<PAGE>
                        ALLBRITTON COMMUNICATIONS COMPANY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                             (Dollars in thousands)


1998,  1999 and 2000,  the  Company  earned  interest  income  from this note of
approximately  $2,200. At September 30, 1999 and 2000,  interest receivable from
Allnewsco  under this note  totaled  $492.  Allnewsco is current on its interest
payments.

During the years ended  September 30, 1999 and 2000, the Company earned interest
income  from  Perpetual  of $227 and $304,  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 $344, $504 and $500 were paid to Perpetual by the Company for
the years ended  September 30, 1998,  1999 and 2000,  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, 1998,  1999 and 2000 and to Mr. Robert L.
Allbritton in the amount of $60, $140 and $190 for the years ended September 30,
1998,  1999 and 2000,  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 $143 to Irides  during the year ended  September  30, 2000.
These fees are included in  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 N.A.  (Riggs).  Riggs is a  wholly-owned
subsidiary of Riggs National Corporation,  of which Mr. Joe L. Allbritton is the
Chairman of the Board of Directors and a significant  stockholder.  The majority
of the  Company's  cash  and  cash  equivalents  was on  deposit  with  Riggs at
September  30, 1999 and 2000.  During the year ended  September  30,  2000,  the
Company  generated  $227 in  advertising  revenue  from  Riggs.  No revenue  was
generated  from  Riggs  during  the years  ended  September  30,  1998 and 1999.
Additionally, the Company incurred $263, $275 and $283 in rental expense related
to office space leased from Riggs for the years ended  September 30, 1998,  1999
and 2000, respectively.

                                      F-15
<PAGE>
                        ALLBRITTON COMMUNICATIONS COMPANY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                             (Dollars in thousands)


NOTE 8 - 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  $825,  $882 and $899 for the years ended September 30, 1998, 1999
and 2000, 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  $392,  $373 and $361 for the years ended September
30, 1998, 1999 and 2000, respectively.


NOTE 9 - 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 2007.
Certain  leases contain  provisions  for renewal and  extension.  Future minimum
lease  payments  under   operating  and  capital  leases  which  have  remaining
noncancelable  lease terms in excess of one year as of September 30, 2000 are as
follows:
<TABLE>
<CAPTION>

                                                       Operating     Capital
Year ending September 30,                                Leases       Leases
                                                         ------       ------

<S>                                                    <C>           <C>
   2001 ...........................................    $  3,682      $ 1,988
   2002 ...........................................       3,429        1,430
   2003 ...........................................       3,231          422
   2004 ...........................................       1,051           87
   2005 ...........................................         485           --
   2006 and thereafter ............................         686           --
                                                       --------      -------
                                                       $ 12,564        3,927
                                                       ========
Less: amounts representing imputed interest .......                     (365)
                                                                     -------
                                                                       3,562

Less: current portion .............................                   (1,759)
                                                                     -------
Long-term portion of capital lease obligations ....                  $ 1,803
                                                                     =======
</TABLE>


Rental expense under operating leases aggregated  approximately  $2,900 for each
of the years ended September 30, 1998, 1999 and 2000.

                                      F-16
<PAGE>
                        ALLBRITTON COMMUNICATIONS COMPANY
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                             (Dollars in thousands)


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, 2000.  Under these  agreements,  the Company must
make specific minimum payments approximating the following:

    Year ending September 30,
        2001.......................................    $  1,708
        2002.......................................      19,386
        2003.......................................       9,493
        2004.......................................       9,499
        2005.......................................       7,251
                                                       --------
                                                       $ 47,337
                                                       ========

The Company has entered into various employment contracts. Future payments under
such contracts as of September 30, 2000 approximate the following:

    Year ending September 30,
        2001.......................................     $ 5,847
        2002.......................................       1,609
        2003.......................................         678
        2004.......................................         448
        2005.......................................         203
        2006.......................................         212
                                                        -------
                                                        $ 8,997
                                                        =======

The Company has entered  into  various  deferred  compensation  agreements  with
certain  employees.  Under  these  agreements,  the  Company is required to make
payments aggregating approximately $2,067 during the years 2005 through 2012. At
September  30, 1999 and 2000,  the Company has recorded a deferred  compensation
liability of approximately $1,337 and $878, respectively, which is included as a
component of noncurrent  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-17
<PAGE>

<TABLE>
<CAPTION>

                                                                                             SCHEDULE II

                                    ALLBRITTON COMMUNICATIONS COMPANY
                             VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
                                         (Dollars in thousands)

                                Balance at       Charged                                       Balance at
                                 beginning       to costs       Charged to                       end of
Classification                    of year      and expenses   other accounts    Deductions        year
--------------                    -------      ------------   --------------    ----------        ----

Year ended September 30,1998:
  Allowance for doubtful
<S>                               <C>              <C>             <C>           <C>             <C>
     accounts................     $1,618           $268              --          $(515)<F2>      $1,371
                                  ======           ====            ====          =====           ======
  Valuation allowance
     for deferred income
     tax assets..............     $1,675           $338<F1>          --          $  --           $2,013
                                  ======           ====            ====          =====           ======

Year ended September 30,1999:
  Allowance for doubtful
     accounts................     $1,371           $519              --          $(466)<F2>      $1,424
                                  ======           ====            ====          =====           ======
  Valuation allowance
     for deferred income
     tax assets..............     $2,013           $225<F1>          --          $  --           $2,238
                                  ======           ====            ====          =====           ======

Year ended September 30, 2000:
  Allowance for doubtful
     accounts................     $1,424           $474              --          $(717)<F2>      $1,181
                                  ======           ====            ====          =====           ======
  Valuation allowance
     for deferred income
     tax assets..............     $2,238           $166<F1>          --          $  --           $2,404
                                  ======           ====            ====          =====           ======

----------
<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.
</FN>

</TABLE>

                                                   F-18
<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/ Lawrence I. Hebert
                                     -----------------------------
                                       Lawrence I. Hebert
                                       Chairman and Chief Executive Officer

                                 Date: December 28, 2000

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 28, 2000
----------------------------    Committee and Director
     Joe L. Allbritton *


/s/ Barbara B. Allbritton       Vice President and             December 28, 2000
----------------------------    Director
     Barbara B. Allbritton *


/s/ Lawrence I. Hebert          Chairman, Chief Executive      December 28, 2000
----------------------------    Officer and Director
     Lawrence I. Hebert         (principal executive officer)


/s/ Robert L. Allbritton        President and Director         December 28, 2000
----------------------------
     Robert L. Allbritton *


/s/ Frederick J. Ryan, Jr.      Vice Chairman, Executive       December 28, 2000
----------------------------    Vice President, Chief Operating
     Frederick J. Ryan, Jr.*    Officer and Director


/s/ W.E. Tige Savage            Director                       December 28, 2000
----------------------------
     W.E. Tige Savage *


/s/ Stephen P. Gibson           Vice President and             December 28, 2000
----------------------------    Chief Financial Officer
     Stephen P. Gibson          (principal financial officer)


/s/ Elizabeth A. Haley          Controller (principal          December 28, 2000
----------------------------    accounting officer)
     Elizabeth A. Haley

     *By Attorney-in-Fact

/s/ Jerald N. Fritz
----------------------------
Jerald N. Fritz


<PAGE>




                                  EXHIBIT INDEX

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

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 February 6, 1996 between ACC and  State       *
          Street  Bank and Trust  Company, as Trustee,  relating  to the
          Debentures.  (Incorporated  by  reference  to  Exhibit 4.1  of
          Company's Registration  Statement on  Form S-4, No. 333-02302,
          dated March 12, 1996)

4.2       Indenture  dated as of January 22, 1998  between ACC and State       *
          Street Bank and Trust  Company,  as  Trustee,  relating to the
          Notes.  (Incorporated by reference to Exhibit 4.1 of Company's
          Registration  Statement  on Form  S-4,  No.  333-45933,  dated
          February 9, 1998)

4.3       Form of  9.75%  Series B Senior  Subordinated  Debentures  due       *
          2007.  (Incorporated  by reference to Exhibit 4.3 of Company's
          Registration Statement on Form S-4, No. 333-02302, dated March
          12, 1996)

4.4       Revolving  Credit  Agreement dated as of April 16, 1996 by and       *
          among Allbritton Communications Company certain Banks, and The
          First  National  Bank of Boston,  as agent.  (Incorporated  by
          reference to Exhibit 4.4 of Company's Quarterly Report on Form
          10-Q, No. 333-02302, dated August 14, 1996)

4.5       Modification  No.  1 dated as of June  19,  1996 to  Revolving       *
          Credit Agreement. (Incorporated by reference to Exhibit 4.5 of
          Company's Quarterly Report on Form 10-Q, No. 333-02302,  dated
          May 15, 1997)

4.6       Modification  No. 2 dated as of December 20, 1996 to Revolving       *
          Credit Agreement. (Incorporated by reference to Exhibit 4.6 of
          Company's Quarterly Report on Form 10-Q, No. 333-02302,  dated
          May 15, 1997)

4.7       Modification  No.  3  dated  as of May 14,  1997 to  Revolving       *
          Credit Agreement. (Incorporated by reference to Exhibit 4.7 of
          Company's Quarterly Report on Form 10-Q, No. 333-02302,  dated
          May 15, 1997)


                                      A-1
<PAGE>

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

4.8       Modification No. 4 dated as of September 30, 1997 to Revolving       *
          Credit Agreement. (Incorporated by reference to Exhibit 4.8 of
          Company's Form 10-K, No. 333-02302, dated December 22, 1997)

10.1      Network Affiliation Agreement (Harrisburg  Television,  Inc.).       *
          (Incorporated  by  reference  to  Exhibit  10.3  of  Company's
          Pre-effective  Amendment  No. 1 to  Registration  Statement on
          Form S-4, dated April 22, 1996)

10.2      Side  Letter  Amendment  to  Network   Affiliation   Agreement       *
          (Harrisburg   Television,   Inc.)  dated   August  10,   1999.
          (Incorporated  by  reference  to  Exhibit  10.2  of  Company's
          Quarterly Report on Form 10-Q, No. 333-02302, dated August 16,
          1999)

10.3      Network   Affiliation   Agreement  (First  Charleston  Corp.).       *
          (Incorporated  by  reference  to  Exhibit  10.4  of  Company's
          Pre-effective  Amendment  No. 1 to  Registration  Statement on
          Form S-4, dated April 22, 1996)

10.4      Side Letter Amendment to Network Affiliation  Agreement (First       *
          Charleston  Corp.)  dated August 10,  1999.  (Incorporated  by
          reference  to Exhibit 10.4 of  Company's  Quarterly  Report on
          Form 10-Q, No. 333-02302, dated August 16, 1999)

10.5      Network    Affiliation    Agreement   (WSET,    Incorporated).       *
          (Incorporated  by  reference  to  Exhibit  10.5  of  Company's
          Pre-effective  Amendment  No. 1 to  Registration  Statement on
          Form S-4, dated April 22, 1996)

10.6      Side Letter Amendment to Network Affiliation  Agreement (WSET,       *
          Incorporated)   dated  August  10,  1999.   (Incorporated   by
          reference  to Exhibit 10.6 of  Company's  Quarterly  Report on
          Form 10-Q, No. 333-02302, dated August 16, 1999)

10.7      Network  Affiliation  Agreement  (WJLA-TV).  (Incorporated  by       *
          reference to Exhibit 10.6 of Company's Pre-effective Amendment
          No. 1 to  Registration  Statement on Form S-4, dated April 22,
          1996)

10.8      Side  Letter   Amendment  to  Network  Affiliation   Agreement       *
          (WJLA-TV)  dated August 10, 1999.  (Incorporated  by reference
          to Exhibit 10.8  of Company's  Quarterly Report  on Form 10-Q,
          No. 333-02302, dated August 16, 1999)

10.9      Network   Affiliation   Agreement  (KATV  Television,   Inc.).       *
          (Incorporated  by  reference  to  Exhibit  10.7  of  Company's
          Pre-effective  Amendment  No. 1 to  Registration  Statement on
          Form S-4, dated April 22, 1996)


                                      A-2
<PAGE>

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

10.10     Side Letter Amendment to Network  Affiliation  Agreement (KATV       *
          Television,  Inc.) dated  August 10,  1999.  (Incorporated  by
          reference to Exhibit  10.10 of Company's  Quarterly  Report on
          Form 10-Q, No. 333-02302, dated August 16, 1999)

10.11     Network   Affiliation   Agreement  (KTUL  Television,   Inc.).       *
          (Incorporated  by  reference  to  Exhibit  10.8  of  Company's
          Pre-effective  Amendment  No. 1 to  Registration  Statement on
          Form S-4, dated April 22, 1996)

10.12     Side Letter Amendment to Network  Affiliation  Agreement (KTUL       *
          Television,  Inc.) dated  August 10,  1999.  (Incorporated  by
          reference to Exhibit  10.12 of Company's  Quarterly  Report on
          Form 10-Q, No. 333-02302, dated August 16, 1999)

10.13     Network    Affiliation    Agreement   (TV   Alabama,    Inc.).       *
          (Incorporated  by  reference  to  Exhibit  10.9  of  Company's
          Pre-effective  Amendment  No. 1 to  Registration  Statement on
          Form S-4, dated April 22, 1996)

10.14     Amendment to Network Affiliation Agreement (TV Alabama,  Inc.)       *
          dated January 23, 1997.  (Incorporated by reference to Exhibit
          10.15 to the  Company's  Quarterly  Report on Form  10-Q,  No.
          333-02302, dated February 14, 1997)

10.15     Side Letter  Amendment to Network  Affiliation  Agreement  (TV       *
          Alabama,  Inc.)  dated  August  10,  1999.   (Incorporated  by
          reference to Exhibit  10.15 of Company's  Quarterly  Report on
          Form 10-Q, No. 333-02302, dated August 16, 1999)

10.16     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)

10.17     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)

10.18     Master  Lease  Finance  Agreement  dated as of August 10, 1994       *
          between  BancBoston   Leasing,   Inc.  and  ACC,  as  amended.
          (Incorporated  by  reference  to  Exhibit  10.16 of  Company's
          Registration Statement on Form S-4, No. 333-02302, dated March
          12, 1996)

10.19     Master Equipment Lease Agreement dated as of November 22, 2000
          between Fleet Capital Corporation and ACC.


                                      A-3
<PAGE>

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


10.20     Pledge of Membership Interests Agreement dated as of September       *
          30, 1997 by and among ACC; KTUL,  LLC; KATV,  LLC; WCIV,  LLC;
          and BankBoston,  N.A. as Agent.  (Incorporated by reference to
          Exhibit 10.16 of Company's  Form 10-K,  No.  333-02302,  dated
          December 22, 1997)

10.21     $20,000,000  Promissory  Note of  ALLNEWSCO,  Inc.  payable to       *
          KTUL,  LLC.  (Incorporated  by reference  to Exhibit  10.16 of
          Company's Form 10-K, No. 333-02302, dated December 22, 1998)

21.       Subsidiaries of Registrant

24.       Powers of Attorney

27.       Financial Data Schedule (Electronic Filing Only)

-----------------
*Previously filed


                                      A-4
<PAGE>