##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
 For the quarterly period ended June 30, 2008
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
 For the transition period from  to
 Commission File Number: 0-22439
 FISHER COMMUNICATIONS, INC.
  WASHINGTON
    
    91-0222175(State or Other Jurisdiction of
    
    (I.R.S. EmployerIncorporation or Organization)
    
    Identification Number)
 100 Fourth Ave. N., Suite 510
Seattle, Washington 98109
 (206) 404-7000
 þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### 



PART I
FINANCIAL INFORMATION
   1.
    
    Condensed Consolidated Statements of Operations: 
Three and six months ended June 30, 2008 and 20072.
    
    Condensed Consolidated Balance Sheets:
June 30, 2008 and December 31, 20073.
    
    Condensed Consolidated Statements of Cash Flows:
Six months ended June 30, 2008 and 20074.
    
    Condensed Consolidated Statements of Comprehensive Income:
Three and six months ended June 30, 2008 and 20075.
    
    Unaudited Notes to Condensed Consolidated Financial StatementsEXHIBIT 3.1EXHIBIT 4.1EXHIBIT 10.2EXHIBIT 10.3EXHIBIT 10.4EXHIBIT 10.5EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Item 3. Quantitative and Qualitative Disclosures About Market Risks
 Item 4. Controls and Procedures
 PART II 
OTHER INFORMATION
 Item 1. Legal Proceedings
 Item 1A. Risk Factors
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 Item 3. Defaults Upon Senior Securities
 Item 4. Submission of Matters to a Vote of Security Holders
 Item 5. Other Information
 Item 6. Exhibits
 SIGNATURES
 EXHIBIT INDEX
  2




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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 Six months ended
    
    Three months ended(in thousands, except per-share amounts)
    
    June 30
    
    June 30(Unaudited)
    
    2008
    
    2007
    
    2008
    
    2007Revenue
    
    $
    83,013
    
    
    $
    75,542
    
    
    $
    45,292
    
    
    $
    41,299Costs and expensesDirect operating costs (exclusive of depreciation and amortization
of $5,160, $4,886, $2,562, and $2,593, respectively, and
amortization of program rights of $9,461, $9,434, $7,015, and
$7,011, respectively, reported separately below)
    
    
    35,375
    
    
    
    31,081
    
    
    
    17,881
    
    
    
    15,265Selling, general and administrative expenses
    
    
    34,881
    
    
    
    25,202
    
    
    
    21,174
    
    
    
    12,705Amortization of program rights
    
    
    9,461
    
    
    
    9,434
    
    
    
    7,015
    
    
    
    7,011Depreciation and amortization
    
    
    6,253
    
    
    
    5,857
    
    
    
    3,126
    
    
    
    3,01685,970
    
    
    
    71,574
    
    
    
    49,196
    
    
    
    37,997Income (loss) from operations
    
    
    (2,957
    )
    
    
    3,968
    
    
    
    (3,904
    )
    
    
    3,302Other income, net
    
    
    105,756
    
    
    
    2,296
    
    
    
    104,730
    
    
    
    1,126Interest expense, net
    
    
    (6,902
    )
    
    
    (6,904
    )
    
    
    (3,544
    )
    
    
    (3,410
    )Income (loss) from continuing operations before income taxes
    
    
    95,897
    
    
    
    (640
    )
    
    
    97,282
    
    
    
    1,018Provision (benefit) for federal and state income taxes
    
    
    33,282
    
    
    
    (71
    )
    
    
    33,626
    
    
    
    319Income (loss) from continuing operations
    
    
    62,615
    
    
    
    (569
    )
    
    
    63,656
    
    
    
    699Income (loss) from discontinued operations, net of income taxes
    
    
    (7
    )
    
    
    1,580
    
    
    
    18
    
    
    
    1,557Net income
    
    $
    62,608
    
    
    $
    1,011
    
    
    $
    63,674
    
    
    $
    2,256Income (loss) per share:From continuing operations
    
    $
    7.17
    
    
    $
    (0.06
    )
    
    $
    7.29
    
    
    $
    0.08From discontinued operations
    
    
    
    
    
    
    0.18
    
    
    
    
    
    
    
    0.18Net income per share
    
    $
    7.17
    
    
    $
    0.12
    
    
    $
    7.29
    
    
    $
    0.26Income (loss) per share assuming dilution:From continuing operations
    
    $
    7.17
    
    
    $
    (0.06
    )
    
    $
    7.29
    
    
    $
    0.08From discontinued operations
    
    
    
    
    
    
    0.18
    
    
    
    
    
    
    
    0.18Net income per share assuming dilution
    
    $
    7.17
    
    
    $
    0.12
    
    
    $
    7.29
    
    
    $
    0.26Weighted average shares outstanding
    
    
    8,730
    
    
    
    8,721
    
    
    
    8,731
    
    
    
    8,722Weighted average shares outstanding assuming dilution
    
    
    8,732
    
    
    
    8,727
    
    
    
    8,735
    
    
    
    8,729
  3




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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (in thousands, except share and per-share amounts)
    
    June 30
    
    December 31(Unaudited)
    
    2008
    
    2007ASSETSCurrent AssetsCash and cash equivalents
    
    $
    74,871
    
    
    $
    6,510Receivable from broker
    
    
    14,412Marketable securities, at market value
    
    
    50,620Receivables, net
    
    
    33,560
    
    
    
    30,498Deferred income taxes
    
    
    785
    
    
    
    785Prepaid expenses and other assets
    
    
    4,275
    
    
    
    3,855Television and radio broadcast rights
    
    
    2,596
    
    
    
    5,934Assets held for sale
    
    
    29
    
    
    
    37Total current assets
    
    
    181,148
    
    
    
    47,619Restricted cash
    
    
    
    
    
    
    52,365Marketable securities, at market value
    
    
    893
    
    
    
    129,223Cash value of life insurance and retirement deposits
    
    
    17,222
    
    
    
    16,809Television and radio broadcast rights
    
    
    266
    
    
    
    7Goodwill
    
    
    52,294
    
    
    
    37,361Intangible assets
    
    
    78,626
    
    
    
    42,782Investment in equity investee
    
    
    2,636
    
    
    
    2,635Deferred financing fees and other assets
    
    
    4,997
    
    
    
    9,072Assets held for sale
    
    
    2,053
    
    
    
    2,053Property, plant and equipment, net
    
    
    149,581
    
    
    
    146,008Total Assets
    
    $
    489,716
    
    
    $
    485,934LIABILITIES AND STOCKHOLDERS EQUITYCurrent LiabilitiesTrade accounts payable
    
    $
    4,577
    
    
    $
    3,737Accrued payroll and related benefits
    
    
    6,456
    
    
    
    7,614Interest payable
    
    
    3,800
    
    
    
    3,773Television and radio broadcast rights payable
    
    
    1,488
    
    
    
    4,940Income taxes payable
    
    
    20,212
    
    
    
    3,959Deferred income taxes
    
    
    17,627Current portion of accrued retirement benefits
    
    
    1,230
    
    
    
    1,230Other current liabilities
    
    
    5,934
    
    
    
    4,218Liabilities of businesses held for sale
    
    
    121
    
    
    
    100Total current liabilities
    
    
    61,445
    
    
    
    29,571Long-term debt
    
    
    150,000
    
    
    
    150,000Accrued retirement benefits
    
    
    18,563
    
    
    
    18,552Deferred income taxes
    
    
    729
    
    
    
    45,274Other liabilities
    
    
    12,651
    
    
    
    9,140Commitments and ContingenciesStockholders EquityCommon stock, shares authorized 12,000,000, $1.25 par value;
issued and outstanding 8,731,402 as of June 30, 2008
and 8,725,516 as of December 31, 2007
    
    
    10,914
    
    
    
    10,907Capital in excess of par
    
    
    10,630
    
    
    
    10,220Accumulated other comprehensive income, net of income taxes:Unrealized gain on marketable securities
    
    
    32,690
    
    
    
    82,818Accumulated loss
    
    
    (1,940
    )
    
    
    (1,958
    )Prior service cost
    
    
    (165
    )
    
    
    (181
    )Retained earnings
    
    
    194,199
    
    
    
    131,591Total Stockholders Equity
    
    
    246,328
    
    
    
    233,397Total Liabilities and Stockholders Equity
    
    $
    489,716
    
    
    $
    485,934
  4




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##### Table of Contents



FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Six months ended(in thousands)
    
    June 30(Unaudited)
    
    2008
    
    2007Cash flows from operating activitiesNet income
    
    $
    62,608
    
    
    $
    1,011Adjustments to reconcile net income to net cash provided by
(used in) operating activitiesDepreciation and amortization
    
    
    6,253
    
    
    
    5,857Deferred income taxes
    
    
    74
    
    
    
    (56
    )Dividends from equity investee
    
    
    
    
    
    
    150Amortization of deferred financing fees
    
    
    316
    
    
    
    316Amortization of program rights
    
    
    9,461
    
    
    
    9,434Payments for television and radio broadcast rights
    
    
    (9,588
    )
    
    
    (9,704
    )Gain on sale of marketable securities
    
    
    (103,621
    )Gain on sale of radio station
    
    
    
    
    
    
    (1,491
    )Net non-cash
contract termination fee
    
    
    4,990
    
    
    
    Amortization
of non-cash contract termination fee
    
    
    (533
    )
    
    
    (434
    )Equity in operations of equity investees
    
    
    (1
    )
    
    
    22Stock-based compensation
    
    
    426
    
    
    
    328Other
    
    
    182
    
    
    
    91Change in operating assets and liabilitiesReceivables
    
    
    (3,062
    )
    
    
    (1,584
    )Prepaid expenses and other current assets
    
    
    (618
    )
    
    
    (1,123
    )Cash value of life insurance and retirement deposits
    
    
    (413
    )
    
    
    (396
    )Other assets
    
    
    1,005
    
    
    
    619Trade accounts payable, accrued payroll and related benefits, interest
payable, and other current liabilities
    
    
    818
    
    
    
    (2,643
    )Income taxes receivable and payable
    
    
    16,253
    
    
    
    (101
    )Accrued retirement benefits
    
    
    11
    
    
    
    40Other liabilities
    
    
    (483
    )
    
    
    346Net cash provided by (used in) operating
activities
    
    
    (15,922
    )
    
    
    682Cash flows from investing activitiesPurchases of marketable securities
    
    
    (56
    )
    
    
    (177
    )Proceeds from sales of marketable securities
    
    
    89,845Proceeds from sale of radio station
    
    
    
    
    
    
    2,869Purchase of television stations
    
    
    (52,365
    )
    
    
    (4,931
    )Decrease in restricted cash
    
    
    52,365
    
    
    
    8,473Purchase of property, plant and equipment
    
    
    (5,436
    )
    
    
    (4,638
    )Net cash provided by investing activities
    
    
    84,353
    
    
    
    1,596Cash flows from financing activitiesBorrowings under borrowing agreements
    
    
    14,000
    
    
    
    6,000Payments on borrowing agreements
    
    
    (14,000
    )
    
    
    (6,000
    )Payment of capital lease obligation
    
    
    (70
    )Proceeds from exercise of stock options
    
    
    
    
    
    
    34Net cash provided by (used in) financing
activities
    
    
    (70
    )
    
    
    34Net increase in cash and cash equivalents
    
    
    68,361
    
    
    
    2,312Cash and cash equivalents, beginning of period
    
    
    6,510
    
    
    
    7,477Cash and cash equivalents, end of period
    
    $
    74,871
    
    
    $
    9,789
  5




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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 Six months ended
    
    Three months ended(in thousands)
    
    June 30
    
    June 30(Unaudited)
    
    2008
    
    2007
    
    2008
    
    2007Net income
    
    $
    62,608
    
    
    $
    1,011
    
    
    $
    63,674
    
    
    $
    2,256Other comprehensive income (loss):Unrealized gain (loss) on marketable securities
    
    
    26,491
    
    
    
    (840
    )
    
    
    53,722
    
    
    
    (12,498
    )Effect of income taxes
    
    
    (9,272
    )
    
    
    294
    
    
    
    (18,803
    )
    
    
    4,374Accumulated loss
    
    
    27
    
    
    
    21
    
    
    
    14
    
    
    
    21Effect of income taxes
    
    
    (9
    )
    
    
    (7
    )
    
    
    (5
    )
    
    
    (7
    )Prior service cost
    
    
    24
    
    
    
    24
    
    
    
    12
    
    
    
    24Effect of income taxes
    
    
    (8
    )
    
    
    (8
    )
    
    
    (4
    )
    
    
    (8
    )Reclassification adjustment for gains included in net
income
    
    
    (103,611
    )
    
    
    (8
    )
    
    
    (103,622
    )
    
    
    (8
    )Effect of income taxes
    
    
    36,264
    
    
    
    3
    
    
    
    36,268
    
    
    
    3Other comprehensive loss
    
    
    (50,094
    )
    
    
    (521
    )
    
    
    (32,418
    )
    
    
    (8,099
    )Comprehensive income (loss)
    
    $
    12,514
    
    
    $
    490
    
    
    $
    31,256
    
    
    $
    (5,843
    )
  6




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##### Table of Contents



Reclassifications
 Selling, general and administrative expenses Direct operating costs
   Fair Value Measurements
 Fair Value Measurements
  Level 1
 Level 2
 7




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##### Table of Contents



Level 3
   Determination of the Useful
Life of Intangible Assets Goodwill and Other Intangible Assets Business Combinations
 Fair Value Measurements
 Business Combinations purchase method
     8




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##### Table of Contents



Intangible assets  FCC licenses (indefinite life, non-amortizing)
    
    $
    32,200Intangible assets  Network affiliation agreement (useful life of
15 years)
    
    
    3,900Goodwill (non-amortizing, tax deductible)
    
    
    14,933Property, plant and equipment
    
    
    4,281$
    55,314
       9




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Six months ended
    
    
    Three months endedJune 30
    
    
    June 302008
    
    
    2007
    
    
    2008
    
    
    2007Revenue
    
    $
    813
    
    
    $
    977
    
    
    $
    453
    
    
    $
    533Income (loss) from discontinued operations:Discontinued operating activities
    
    $
    (10
    )
    
    $
    137
    
    
    $
    29
    
    
    $
    102Gain on sale
    
    
    
    
    
    
    2,294
    
    
    
    
    
    
    
    2,294(10
    )
    
    
    2,431
    
    
    
    29
    
    
    
    2,396Income tax effect
    
    
    3
    
    
    
    (851
    )
    
    
    (11
    )
    
    
    (839
    )$
    (7
    )
    
    $
    1,580
    
    
    $
    18
    
    
    $
    1,557
  June 30
    
    
    December 312008
    
    
    2007Goodwill, net
    
    $
    645
    
    
    $
    645Property, plant and equipment, net
    
    
    643
    
    
    
    643Intangible assets
    
    
    765
    
    
    
    765Other assets
    
    
    29
    
    
    
    37$
    2,082
    
    
    $
    2,090Liabilities of businesses held for sale
    
    $
    121
    
    
    $
    100
       10




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Six months ended
    
    
    Three months endedJune 30
    
    
    June 302008
    
    
    2007
    
    
    2008
    
    
    2007Interest cost
    
    $
    550
    
    
    $
    532
    
    
    $
    275
    
    
    $
    266Amortization of loss
    
    
    30
    
    
    
    22
    
    
    
    15
    
    
    
    11Net periodic pension
cost
    
    $
    580
    
    
    $
    554
    
    
    $
    290
    
    
    $
    277
     Six months
    
    
    Three monthsended June 30
    
    
    ended June 302008
    
    
    2007
    
    
    2008
    
    
    2007Income (loss) from continuing operations
    
    $
    62,615
    
    
    $
    (569
    )
    
    $
    63,656
    
    
    $
    699Income (loss) from discontinued operations, net of income taxes
    
    
    (7
    )
    
    
    1,580
    
    
    
    18
    
    
    
    1,557Net income
    
    $
    62,608
    
    
    $
    1,011
    
    
    $
    63,674
    
    
    $
    2,256Weighted average shares outstanding  basic
    
    
    8,730
    
    
    
    8,721
    
    
    
    8,731
    
    
    
    8,722Weighted effect of dilutive options and rights
    
    
    2
    
    
    
    6
    
    
    
    4
    
    
    
    7Weighted average shares outstanding assuming dilution
    
    
    8,732
    
    
    
    8,727
    
    
    
    8,735
    
    
    
    8,729Income (loss) per share:From continuing operations
    
    $
    7.17
    
    
    $
    (0.06
    )
    
    $
    7.29
    
    
    $
    0.08From discontinued operations
    
    
    
    
    
    
    0.18
    
    
    
    
    
    
    
    0.18Net income per share
    
    $
    7.17
    
    
    $
    0.12
    
    
    $
    7.29
    
    
    $
    0.26Income (loss) per share assuming dilution:From continuing operations
    
    $
    7.17
    
    
    $
    (0.06
    )
    
    $
    7.29
    
    
    $
    0.08From discontinued operations
    
    
    
    
    
    
    0.18
    
    
    
    
    
    
    
    0.18Net income per share assuming dilution
    
    $
    7.17
    
    
    $
    0.12
    
    
    $
    7.29
    
    
    $
    0.26
  11




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##### Table of Contents



Six months
    
    
    Three monthsended June 30
    
    
    ended June 302008
    
    
    2007
    
    
    2008
    
    
    2007Television
    
    $
    58,885
    
    
    $
    51,578
    
    
    $
    30,950
    
    
    $
    26,980Radio
    
    
    17,665
    
    
    
    18,351
    
    
    
    11,150
    
    
    
    11,443Fisher Plaza
    
    
    6,505
    
    
    
    5,689
    
    
    
    3,192
    
    
    
    2,914Corporate and eliminations
    
    
    (42
    )
    
    
    (76
    )
    
    
    
    
    
    
    (38
    )$
    83,013
    
    
    $
    75,542
    
    
    $
    45,292
    
    
    $
    41,299
  12




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##### Table of Contents



Six months
    
    
    Three monthsended June 30
    
    
    ended June 302008
    
    
    2007
    
    
    2008
    
    
    2007Television
    
    $
    1,955
    
    
    $
    6,417
    
    
    $
    (200
    )
    
    $
    4,498Radio
    
    
    (1,789
    )
    
    
    (42
    )
    
    
    (1,459
    )
    
    
    (343
    )Fisher Plaza
    
    
    2,699
    
    
    
    2,196
    
    
    
    1,285
    
    
    
    1,272Corporate and eliminations
    
    
    99,934
    
    
    
    (2,307
    )
    
    
    101,200
    
    
    
    (999
    )$
    102,799
    
    
    $
    6,264
    
    
    $
    100,826
    
    
    $
    4,428
   Six months
    
    
    Three monthsended June 30
    
    
    ended June 302008
    
    
    2007
    
    
    2008
    
    
    2007Total segment income from continuing
operations before interest
and income taxes
    
    $
    102,799
    
    
    $
    6,264
    
    
    $
    100,826
    
    
    $
    4,428Interest expense
    
    
    (6,902
    )
    
    
    (6,904
    )
    
    
    (3,544
    )
    
    
    (3,410
    )Consolidated income (loss) from continuing
operations before income taxes
    
    $
    95,897
    
    
    $
    (640
    )
    
    $
    97,282
    
    
    $
    1,018
  December 31June 30 2008
    
    
    2007Total assetsTelevision
    
    $
    187,835
    
    
    $
    136,341Radio
    
    
    22,179
    
    
    
    20,030Fisher Plaza
    
    
    115,023
    
    
    
    117,688Corporate and eliminations
    
    
    162,597
    
    
    
    209,785487,634
    
    
    
    483,844Assets held for sale
    
    
    2,082
    
    
    
    2,090$
    489,716
    
    
    $
    485,934
  13




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14




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##### Table of Contents



Financial Information for Guarantors
Condensed Consolidated Statement of Operations
for the six months ended June 30, 2008
 100%
    
    
    
    
    
    FisherFisher
    
    Owned
    
    
    
    
    
    Communications,Communications,
    
    Guarantor
    
    
    
    
    
    Inc. and(in thousands)
    
    Inc.
    
    Subsidiaries
    
    Eliminations
    
    SubsidiariesRevenue
    
    $
    
    
    
    $
    83,019
    
    
    $
    (6
    )
    
    $
    83,013Costs and expensesDirect operating costs
    
    
    147
    
    
    
    35,131
    
    
    
    97
    
    
    
    35,375Selling, general and administrative expenses
    
    
    6,780
    
    
    
    28,204
    
    
    
    (103
    )
    
    
    34,881Amortization of program rights
    
    
    
    
    
    
    9,461
    
    
    
    
    
    
    
    9,461Depreciation and amortization
    
    
    463
    
    
    
    5,790
    
    
    
    
    
    
    
    6,2537,390
    
    
    
    78,586
    
    
    
    (6
    )
    
    
    85,970Income (loss) from operations
    
    
    (7,390
    )
    
    
    4,433
    
    
    
    
    
    
    
    (2,957
    )Other income, net
    
    
    105,712
    
    
    
    44
    
    
    
    
    
    
    
    105,756Equity in income of subsidiaries
    
    
    2,713
    
    
    
    
    
    
    
    (2,713
    )
    
    
    Interest expense, net
    
    
    (6,857
    )
    
    
    (45
    )
    
    
    
    
    
    
    (6,902
    )Income (loss) from continuing operations before income taxes
    
    
    94,178
    
    
    
    4,432
    
    
    
    (2,713
    )
    
    
    95,897Provision for federal and state income taxes
    
    
    31,570
    
    
    
    1,712
    
    
    
    
    
    
    
    33,282Income (loss) from continuing operations
    
    
    62,608
    
    
    
    2,720
    
    
    
    (2,713
    )
    
    
    62,615Loss from discontinued operations, net of income taxes
    
    
    
    
    
    
    (7
    )
    
    
    
    
    
    
    (7
    )Net income (loss)
    
    $
    62,608
    
    
    $
    2,713
    
    
    $
    (2,713
    )
    
    $
    62,608
 15




---



##### Table of Contents



Financial Information for Guarantors
Condensed Consolidated Statement of Operations
for the six months ended June 30, 2007
 100%
    
    
    
    
    
    FisherFisher
    
    Owned
    
    
    
    
    
    Communications,Communications,
    
    Guarantor
    
    
    
    
    
    Inc. and(in thousands)
    
    Inc.
    
    Subsidiaries
    
    Eliminations
    
    SubsidiariesRevenue
    
    $
    
    
    
    $
    75,551
    
    
    $
    (9
    )
    
    $
    75,542Costs and expensesDirect operating costs
    
    
    
    
    
    
    30,982
    
    
    
    99
    
    
    
    31,081Selling, general and administrative expenses
    
    
    4,247
    
    
    
    21,063
    
    
    
    (108
    )
    
    
    25,202Amortization of program rights
    
    
    
    
    
    
    9,434
    
    
    
    
    
    
    
    9,434Depreciation and amortization
    
    
    146
    
    
    
    5,711
    
    
    
    
    
    
    
    5,8574,393
    
    
    
    67,190
    
    
    
    (9
    )
    
    
    71,574Income (loss) from operations
    
    
    (4,393
    )
    
    
    8,361
    
    
    
    
    
    
    
    3,968Other income, net
    
    
    2,069
    
    
    
    227
    
    
    
    
    
    
    
    2,296Equity in income of subsidiaries
    
    
    6,955
    
    
    
    
    
    
    
    (6,955
    )
    
    
    Interest expense, net
    
    
    (6,904
    )
    
    
    
    
    
    
    
    
    
    
    (6,904
    )Income (loss) from continuing operations before income taxes
    
    
    (2,273
    )
    
    
    8,588
    
    
    
    (6,955
    )
    
    
    (640
    )Provision (benefit) for federal and state income taxes
    
    
    (3,284
    )
    
    
    3,213
    
    
    
    
    
    
    
    (71
    )Income (loss) from continuing operations
    
    
    1,011
    
    
    
    5,375
    
    
    
    (6,955
    )
    
    
    (569
    )Income from discontinued operations, net of income taxes
    
    
    
    
    
    
    1,580
    
    
    
    
    
    
    
    1,580Net income (loss)
    
    $
    1,011
    
    
    $
    6,955
    
    
    $
    (6,955
    )
    
    $
    1,011
 16




---



##### Table of Contents



Financial Information for Guarantors
Condensed Consolidated Statement of Operations
for the three months ended June 30, 2008
 100%
    
    
    
    
    
    FisherFisher
    
    Owned
    
    
    
    
    
    Communications,Communications,
    
    Guarantor
    
    
    
    
    
    Inc. and(in thousands)
    
    Inc.
    
    Subsidiaries
    
    Eliminations
    
    SubsidiariesRevenue
    
    $
    
    
    
    $
    45,292
    
    
    $
    
    
    
    $
    45,292Costs and expensesDirect operating costs
    
    
    77
    
    
    
    17,750
    
    
    
    54
    
    
    
    17,881Selling, general and administrative expenses
    
    
    4,287
    
    
    
    16,941
    
    
    
    (54
    )
    
    
    21,174Amortization of program rights
    
    
    
    
    
    
    7,015
    
    
    
    
    
    
    
    7,015Depreciation and amortization
    
    
    232
    
    
    
    2,894
    
    
    
    
    
    
    
    3,1264,596
    
    
    
    44,600
    
    
    
    
    
    
    
    49,196Income (loss) from operations
    
    
    (4,596
    )
    
    
    692
    
    
    
    
    
    
    
    (3,904
    )Other income, net
    
    
    104,675
    
    
    
    55
    
    
    
    
    
    
    
    104,730Equity in income of subsidiaries
    
    
    417
    
    
    
    
    
    
    
    (417
    )
    
    
    Interest expense, net
    
    
    (3,522
    )
    
    
    (22
    )
    
    
    
    
    
    
    (3,544
    )Income (loss) from continuing operations before income taxes
    
    
    96,974
    
    
    
    725
    
    
    
    (417
    )
    
    
    97,282Provision for federal and state income taxes
    
    
    33,300
    
    
    
    326
    
    
    
    
    
    
    
    33,626Income (loss) from continuing operations
    
    
    63,674
    
    
    
    399
    
    
    
    (417
    )
    
    
    63,656Income from discontinued operations, net of income taxes
    
    
    
    
    
    
    18
    
    
    
    
    
    
    
    18Net income (loss)
    
    $
    63,674
    
    
    $
    417
    
    
    $
    (417
    )
    
    $
    63,674
 17




---



##### Table of Contents



Financial Information for Guarantors
Condensed Consolidated Statement of Operations
for the three months ended June 30, 2007
 100%
    
    
    
    
    
    FisherFisher
    
    Owned
    
    
    
    
    
    Communications,Communications,
    
    Guarantor
    
    
    
    
    
    Inc. and(in thousands)
    
    Inc.
    
    Subsidiaries
    
    Eliminations
    
    SubsidiariesRevenue
    
    $
    
    
    
    $
    41,303
    
    
    $
    (4
    )
    
    $
    41,299Costs and expensesDirect operating costs
    
    
    
    
    
    
    15,216
    
    
    
    49
    
    
    
    15,265Selling, general and administrative costs
    
    
    2,018
    
    
    
    10,740
    
    
    
    (53
    )
    
    
    12,705Amortization of program rights
    
    
    
    
    
    
    7,011
    
    
    
    
    
    
    
    7,011Depreciation and amortization
    
    
    74
    
    
    
    2,942
    
    
    
    
    
    
    
    3,0162,092
    
    
    
    35,909
    
    
    
    (4
    )
    
    
    37,997Income (loss) from operations
    
    
    (2,092
    )
    
    
    5,394
    
    
    
    
    
    
    
    3,302Other income, net
    
    
    1,089
    
    
    
    37
    
    
    
    
    
    
    
    1,126Equity in income of subsidiaries
    
    
    4,911
    
    
    
    
    
    
    
    (4,911
    )
    
    
    Interest expense, net
    
    
    (3,410
    )
    
    
    
    
    
    
    
    
    
    
    (3,410
    )Income (loss) from continuing operations before income taxes
    
    
    498
    
    
    
    5,431
    
    
    
    (4,911
    )
    
    
    1,018Provision (benefit) for federal and state income taxes
    
    
    (1,758
    )
    
    
    2,077
    
    
    
    
    
    
    
    319Income (loss) from continuing operations
    
    
    2,256
    
    
    
    3,354
    
    
    
    (4,911
    )
    
    
    699Income from discontinued operations, net of income taxes
    
    
    
    
    
    
    1,557
    
    
    
    
    
    
    
    1,557Net income (loss)
    
    $
    2,256
    
    
    $
    4,911
    
    
    $
    (4,911
    )
    
    $
    2,256
 18




---



##### Table of Contents



Financial Information for Guarantors
Condensed Consolidated Balance Sheet
as of June 30, 2008
 100%
    
    
    
    
    
    FisherFisher
    
    Owned
    
    
    
    
    
    Communications,Communications,
    
    Guarantor
    
    
    
    
    
    Inc. and(in thousands)
    
    Inc.
    
    Subsidiaries
    
    Eliminations
    
    SubsidiariesASSETSCurrent AssetsCash and cash equivalents
    
    $
    74,248
    
    
    $
    623
    
    
    $
    
    
    
    $
    74,871Receivable from broker
    
    
    14,412
    
    
    
    
    
    
    
    
    
    
    
    14,412Marketable securities, at market value
    
    
    50,620
    
    
    
    
    
    
    
    
    
    
    
    50,620Receivables, net
    
    
    43
    
    
    
    33,517
    
    
    
    
    
    
    
    33,560Due from affiliate
    
    
    9,063
    
    
    
    
    
    
    
    (9,063
    )
    
    
    Deferred income taxes
    
    
    123
    
    
    
    662
    
    
    
    
    
    
    
    785Prepaid expenses and other assets
    
    
    396
    
    
    
    3,879
    
    
    
    
    
    
    
    4,275Television and radio broadcast rights
    
    
    
    
    
    
    2,596
    
    
    
    
    
    
    
    2,596Assets held for sale
    
    
    
    
    
    
    29
    
    
    
    
    
    
    
    29Total current assets
    
    
    148,905
    
    
    
    41,306
    
    
    
    (9,063
    )
    
    
    181,148Marketable securities, at market value
    
    
    
    
    
    
    893
    
    
    
    
    
    
    
    893Investment in consolidated subsidiaries
    
    
    273,430
    
    
    
    
    
    
    
    (273,430
    )
    
    
    Cash value of life insurance and retirement deposits
    
    
    17,222
    
    
    
    
    
    
    
    
    
    
    
    17,222Television and radio broadcast rights
    
    
    
    
    
    
    266
    
    
    
    
    
    
    
    266Goodwill
    
    
    
    
    
    
    52,294
    
    
    
    
    
    
    
    52,294Intangible assets
    
    
    
    
    
    
    78,626
    
    
    
    
    
    
    
    78,626Investment in equity investee
    
    
    
    
    
    
    2,636
    
    
    
    
    
    
    
    2,636Deferred income taxes
    
    
    15,932
    
    
    
    
    
    
    
    (15,932
    )
    
    
    Deferred financing fees and other assets
    
    
    3,591
    
    
    
    1,406
    
    
    
    
    
    
    
    4,997Assets held for sale
    
    
    
    
    
    
    2,053
    
    
    
    
    
    
    
    2,053Property, plant and equipment, net
    
    
    1,620
    
    
    
    147,961
    
    
    
    
    
    
    
    149,581Total Assets
    
    $
    460,700
    
    
    $
    327,441
    
    
    $
    (298,425
    )
    
    $
    489,716LIABILITIES AND STOCKHOLDERS EQUITYCurrent LiabilitiesTrade accounts payable
    
    $
    1,285
    
    
    $
    3,292
    
    
    $
    
    
    
    $
    4,577Due to affiliate
    
    
    
    
    
    
    9,063
    
    
    
    (9,063
    )
    
    
    Accrued payroll and related benefits
    
    
    589
    
    
    
    5,867
    
    
    
    
    
    
    
    6,456Interest payable
    
    
    3,800
    
    
    
    
    
    
    
    
    
    
    
    3,800Television and radio broadcast rights payable
    
    
    
    
    
    
    1,488
    
    
    
    
    
    
    
    1,488Income taxes payable
    
    
    20,128
    
    
    
    84
    
    
    
    
    
    
    
    20,212Deferred income taxes
    
    
    17,627
    
    
    
    
    
    
    
    
    
    
    
    17,627Current portion of accrued retirement benefits
    
    
    1,230
    
    
    
    
    
    
    
    
    
    
    
    1,230Other current liabilities
    
    
    1,150
    
    
    
    4,784
    
    
    
    
    
    
    
    5,934Liabilities of businesses held for sale
    
    
    
    
    
    
    121
    
    
    
    
    
    
    
    121Total current liabilities
    
    
    45,809
    
    
    
    24,699
    
    
    
    (9,063
    )
    
    
    61,445Long-term debt
    
    
    150,000
    
    
    
    
    
    
    
    
    
    
    
    150,000Accrued retirement benefits
    
    
    18,563
    
    
    
    
    
    
    
    
    
    
    
    18,563Deferred income taxes
    
    
    
    
    
    
    16,661
    
    
    
    (15,932
    )
    
    
    729Other liabilities
    
    
    
    
    
    
    12,651
    
    
    
    
    
    
    
    12,651Stockholders EquityCommon stock
    
    
    10,914
    
    
    
    1,131
    
    
    
    (1,131
    )
    
    
    10,914Capital in excess of par
    
    
    10,630
    
    
    
    164,234
    
    
    
    (164,234
    )
    
    
    10,630Accumulated other comprehensive income, net of income taxes:Unrealized gain on marketable securities
    
    
    32,690
    
    
    
    
    
    
    
    
    
    
    
    32,690Accumulated loss
    
    
    (1,940
    )
    
    
    
    
    
    
    
    
    
    
    (1,940
    )Prior service cost
    
    
    (165
    )
    
    
    
    
    
    
    
    
    
    
    (165
    )Retained earnings
    
    
    194,199
    
    
    
    108,065
    
    
    
    (108,065
    )
    
    
    194,199Total Stockholders Equity
    
    
    246,328
    
    
    
    273,430
    
    
    
    (273,430
    )
    
    
    246,328Total Liabilities and Stockholders Equity
    
    $
    460,700
    
    
    $
    327,441
    
    
    $
    (298,425
    )
    
    $
    489,716
 19




---



##### Table of Contents



Financial Information for Guarantors
Condensed Consolidated Balance Sheet
as of December 31, 2007
 100%
    
    
    
    
    
    FisherFisher
    
    Owned
    
    
    
    
    
    Communications,Communications,
    
    Guarantor
    
    
    
    
    
    Inc. and(in thousands)
    
    Inc.
    
    Subsidiaries
    
    Eliminations
    
    SubsidiariesASSETSCurrent AssetsCash and cash equivalents
    
    $
    5,804
    
    
    $
    706
    
    
    $
    
    
    
    $
    6,510Receivables, net
    
    
    582
    
    
    
    29,916
    
    
    
    
    
    
    
    30,498Due from affiliate
    
    
    
    
    
    
    40,567
    
    
    
    (40,567
    )Deferred income taxes
    
    
    123
    
    
    
    662
    
    
    
    
    
    
    
    785Prepaid expenses and other assets
    
    
    237
    
    
    
    3,618
    
    
    
    
    
    
    
    3,855Television and radio broadcast rights
    
    
    
    
    
    
    5,934
    
    
    
    
    
    
    
    5,934Assets held for sale
    
    
    
    
    
    
    37
    
    
    
    
    
    
    
    37Total current assets
    
    
    6,746
    
    
    
    81,440
    
    
    
    (40,567
    )
    
    
    47,619Restricted cash
    
    
    52,365
    
    
    
    
    
    
    
    
    
    
    
    52,365Marketable securities, at market value
    
    
    128,201
    
    
    
    1,022
    
    
    
    
    
    
    
    129,223Investment in consolidated subsidiaries
    
    
    270,717
    
    
    
    
    
    
    
    (270,717
    )Cash value of life insurance and retirement deposits
    
    
    16,809
    
    
    
    
    
    
    
    
    
    
    
    16,809Television and radio broadcast rights
    
    
    
    
    
    
    7
    
    
    
    
    
    
    
    7Goodwill
    
    
    
    
    
    
    37,361
    
    
    
    
    
    
    
    37,361Intangible assets
    
    
    
    
    
    
    42,782
    
    
    
    
    
    
    
    42,782Investments in equity investee
    
    
    
    
    
    
    2,635
    
    
    
    
    
    
    
    2,635Deferred financing fees and other assets
    
    
    3,913
    
    
    
    5,159
    
    
    
    
    
    
    
    9,072Assets held for sale
    
    
    
    
    
    
    2,053
    
    
    
    
    
    
    
    2,053Property, plant and equipment, net
    
    
    1,030
    
    
    
    144,978
    
    
    
    
    
    
    
    146,008Total Assets
    
    $
    479,781
    
    
    $
    317,437
    
    
    $
    (311,284
    )
    
    $
    485,934LIABILITIES AND STOCKHOLDERS EQUITYCurrent LiabilitiesTrade accounts payable
    
    $
    924
    
    
    $
    2,813
    
    
    $
    
    
    
    $
    3,737Due to affiliate
    
    
    40,567
    
    
    
    
    
    
    
    (40,567
    )Accrued payroll and related benefits
    
    
    1,656
    
    
    
    5,958
    
    
    
    
    
    
    
    7,614Interest payable
    
    
    3,773
    
    
    
    
    
    
    
    
    
    
    
    3,773Television and radio broadcast rights payable
    
    
    
    
    
    
    4,940
    
    
    
    
    
    
    
    4,940Income taxes payable
    
    
    
    
    
    
    3,959
    
    
    
    
    
    
    
    3,959Current portion of accrued retirement benefits
    
    
    1,230
    
    
    
    
    
    
    
    
    
    
    
    1,230Other current liabilities
    
    
    1,033
    
    
    
    3,185
    
    
    
    
    
    
    
    4,218Liabilities of businesses held for sale
    
    
    
    
    
    
    100
    
    
    
    
    
    
    
    100Total current liabilities
    
    
    49,183
    
    
    
    20,955
    
    
    
    (40,567
    )
    
    
    29,571Long-term debt
    
    
    150,000
    
    
    
    
    
    
    
    
    
    
    
    150,000Accrued retirement benefits
    
    
    18,552
    
    
    
    
    
    
    
    
    
    
    
    18,552Deferred income taxes
    
    
    28,590
    
    
    
    16,684
    
    
    
    
    
    
    
    45,274Other liabilities
    
    
    59
    
    
    
    9,081
    
    
    
    
    
    
    
    9,140Stockholders EquityCommon stock
    
    
    10,907
    
    
    
    1,131
    
    
    
    (1,131
    )
    
    
    10,907Capital in excess of par
    
    
    10,220
    
    
    
    164,234
    
    
    
    (164,234
    )
    
    
    10,220Accumulated other comprehensive income  net of income taxes:Unrealized gain on marketable securities
    
    
    82,818
    
    
    
    
    
    
    
    
    
    
    
    82,818Accumulated loss
    
    
    (1,958
    )
    
    
    
    
    
    
    
    
    
    
    (1,958
    )Prior service cost
    
    
    (181
    )
    
    
    
    
    
    
    
    
    
    
    (181
    )Retained earnings
    
    
    131,591
    
    
    
    105,352
    
    
    
    (105,352
    )
    
    
    131,591Total Stockholders Equity
    
    
    233,397
    
    
    
    270,717
    
    
    
    (270,717
    )
    
    
    233,397Total Liabilities and Stockholders Equity
    
    $
    479,781
    
    
    $
    317,437
    
    
    $
    (311,284
    )
    
    $
    485,934
 20




---



##### Table of Contents



Financial Information for Guarantors
Condensed Consolidated Statement of Cash Flows
for the six months ended June 30, 2008
 100%
    
    
    
    
    
    FisherFisher
    
    Owned
    
    
    
    
    
    Communications,Communications,
    
    Guarantor
    
    
    
    
    
    Inc. and(in thousands)
    
    Inc.
    
    Subsidiaries
    
    Eliminations
    
    SubsidiariesNet cash provided by (used in) operating activities
    
    $
    (20,545
    )
    
    $
    4,623
    
    
    $
    
    
    
    $
    (15,922
    )Cash flows from investing activitiesPurchase of marketable securities
    
    
    
    
    
    
    (56
    )
    
    
    
    
    
    
    (56
    )Proceeds from sale of marketable
securities
    
    
    89,735
    
    
    
    110
    
    
    
    
    
    
    
    89,845Decrease in restricted cash
    
    
    52,365
    
    
    
    
    
    
    
    
    
    
    
    52,365Purchase of television stations
    
    
    (52,365
    )
    
    
    
    
    
    
    
    
    
    
    (52,365
    )Purchase of property, plant and
equipment
    
    
    (746
    )
    
    
    (4,690
    )
    
    
    
    
    
    
    (5,436
    )Net cash provided by (used in) investing activities
    
    
    88,989
    
    
    
    (4,636
    )
    
    
    
    
    
    
    84,353Cash flows from financing activitiesBorrowings under borrowing agreements
    
    
    14,000
    
    
    
    
    
    
    
    
    
    
    
    14,000Payments on borrowing agreements
    
    
    (14,000
    )
    
    
    
    
    
    
    
    
    
    
    (14,000
    )Payment of capital lease obligation
    
    
    
    
    
    
    (70
    )
    
    
    
    
    
    
    (70
    )Net cash used in financing activities
    
    
    
    
    
    
    (70
    )
    
    
    
    
    
    
    (70
    )Net increase (decrease) in cash and cash equivalents
    
    
    68,444
    
    
    
    (83
    )
    
    
    
    
    
    
    68,361Cash and cash equivalents, beginning of period
    
    
    5,804
    
    
    
    706
    
    
    
    
    
    
    
    6,510Cash and cash equivalents, end of period
    
    $
    74,248
    
    
    $
    623
    
    
    $
    
    
    
    $
    74,871
 21




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##### Table of Contents



Financial Information for Guarantors
Condensed Consolidated Statement of Cash Flows
for the six months ended June 30, 2007
 100%
    
    
    
    
    
    FisherFisher
    
    Owned
    
    
    
    
    
    Communications,Communications,
    
    Guarantor
    
    
    
    
    
    Inc. and(in thousands)
    
    Inc.
    
    Subsidiaries
    
    Eliminations
    
    SubsidiariesNet cash provided by (used in) operating activities
    
    $
    958
    
    
    $
    (1,343
    )
    
    $
    1,067
    
    
    $
    682Cash flows from investing activitiesProceeds from sale of radio station
    
    
    
    
    
    
    2,869
    
    
    
    
    
    
    
    2,869Purchase of television stations
    
    
    
    
    
    
    (4,931
    )
    
    
    
    
    
    
    (4,931
    )Decrease in restricted cash
    
    
    
    
    
    
    8,473
    
    
    
    
    
    
    
    8,473Purchases of investments
available-for-sale
    
    
    
    
    
    
    (177
    )
    
    
    
    
    
    
    (177
    )Purchase of property, plant and
equipment
    
    
    (47
    )
    
    
    (4,591
    )
    
    
    
    
    
    
    (4,638
    )Net cash provided by (used in) investing activities
    
    
    (47
    )
    
    
    1,643
    
    
    
    
    
    
    
    1,596Cash flows from financing activitiesBorrowings under borrowing agreements
    
    
    6,000
    
    
    
    
    
    
    
    
    
    
    
    6,000Payments on borrowing agreements
    
    
    (6,000
    )
    
    
    
    
    
    
    
    
    
    
    (6,000
    )Proceeds from exercise of stock options
    
    
    34
    
    
    
    
    
    
    
    
    
    
    
    34Net cash provided by financing activities
    
    
    34
    
    
    
    
    
    
    
    
    
    
    
    34Net increase in cash and cash equivalents
    
    
    945
    
    
    
    300
    
    
    
    1,067
    
    
    
    2,312Cash and cash equivalents, beginning of period
    
    
    8,544
    
    
    
    
    
    
    
    (1,067
    )
    
    
    7,477Cash and cash equivalents, end of period
    
    $
    9,489
    
    
    $
    300
    
    
    $
    
    
    
    $
    9,789
 22




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##### Table of Contents



ITEM 2  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 The following discussion and analysis should be read in conjunction with the condensed
consolidated financial statements and related notes thereto included elsewhere in this quarterly
report on Form 10-Q . Some of the statements in this quarterly report are forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include all passages containing verbs such as aims, anticipates,
believes, estimates, expects, hopes, intends, plans, predicts, projects or
targets or nouns corresponding to such verbs. Forward-looking statements also include any other
passages that are primarily relevant to expected future events or that can only be fully evaluated
by events that will occur in the future. There are many risks and uncertainties that could cause
actual results to differ materially from those predicted in our forward-looking statements,
including, without limitation, those factors discussed under the caption Risk Factors in Item 1A
of Part I of our Annual Report on Form 10-K for the fiscal year ended December 31, 2007, which was
filed with the Securities and Exchange Commission on March 14, 2008. Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only as of the date of this
report. We undertake no obligation to revise any forward-looking statements in order to reflect
events or circumstances that may subsequently arise. Readers are urged to carefully review and
consider the various disclosures made in this report and in our other reports filed with the
Securities and Exchange Commission that attempt to advise interested parties of the risks and
factors that may affect our business, prospects and results of operations. As used herein, unless
the context requires otherwise, when we say we, us, our, or the Company, we are referring
to Fisher Communications, Inc. and its consolidated subsidiaries.
  Overview
     23




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24




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##### Table of Contents



Critical Accounting Policies
   Consolidated Results of Operations
  25




---



##### Table of Contents



Six months
    
    
    
    
    
    
    
    
    
    
    Three months(Dollars in thousands)
    
    ended June 30
    
    
    Variance
    
    
    ended June 30
    
    
    Variance(Unaudited)
    
    2008
    
    
    2007
    
    
    $
    
    
    %
    
    
    2008
    
    
    2007
    
    
    $
    
    
    %RevenueTelevision
    
    $
    58,885
    
    
    $
    51,578
    
    
    $
    7,307
    
    
    
    14.2
    %
    
    $
    30,950
    
    
    $
    26,980
    
    
    $
    3,970
    
    
    
    14.7
    %Radio
    
    
    17,665
    
    
    
    18,351
    
    
    
    (686
    )
    
    
    -3.7
    %
    
    
    11,150
    
    
    
    11,443
    
    
    
    (293
    )
    
    
    -2.6
    %Fisher Plaza
    
    
    6,505
    
    
    
    5,689
    
    
    
    816
    
    
    
    14.3
    %
    
    
    3,192
    
    
    
    2,914
    
    
    
    278
    
    
    
    9.5
    %Corporate and eliminations
    
    
    (42
    )
    
    
    (76
    )
    
    
    34
    
    
    
    
    
    
    
    
    
    
    
    (38
    )
    
    
    38Consolidated
    
    
    83,013
    
    
    
    75,542
    
    
    
    7,471
    
    
    
    9.9
    %
    
    
    45,292
    
    
    
    41,299
    
    
    
    3,993
    
    
    
    9.7
    %Direct Operating CostsTelevision
    
    
    26,502
    
    
    
    22,847
    
    
    
    3,655
    
    
    
    16.0
    %
    
    
    13,438
    
    
    
    11,403
    
    
    
    2,035
    
    
    
    17.8
    %Radio
    
    
    6,086
    
    
    
    5,632
    
    
    
    454
    
    
    
    8.1
    %
    
    
    3,066
    
    
    
    2,622
    
    
    
    444
    
    
    
    16.9
    %Fisher Plaza
    
    
    1,774
    
    
    
    1,671
    
    
    
    103
    
    
    
    6.2
    %
    
    
    847
    
    
    
    775
    
    
    
    72
    
    
    
    9.3
    %Corporate and eliminations
    
    
    1,013
    
    
    
    931
    
    
    
    82
    
    
    
    8.8
    %
    
    
    530
    
    
    
    465
    
    
    
    65
    
    
    
    14.0
    %Consolidated
    
    
    35,375
    
    
    
    31,081
    
    
    
    4,294
    
    
    
    13.8
    %
    
    
    17,881
    
    
    
    15,265
    
    
    
    2,616
    
    
    
    17.1
    %Selling, general and administrative expensesTelevision
    
    
    22,460
    
    
    
    14,592
    
    
    
    7,868
    
    
    
    53.9
    %
    
    
    13,737
    
    
    
    7,070
    
    
    
    6,667
    
    
    
    94.3
    %Radio
    
    
    7,438
    
    
    
    7,162
    
    
    
    276
    
    
    
    3.9
    %
    
    
    4,301
    
    
    
    4,040
    
    
    
    261
    
    
    
    6.5
    %Fisher Plaza
    
    
    400
    
    
    
    207
    
    
    
    193
    
    
    
    93.2
    %
    
    
    260
    
    
    
    80
    
    
    
    180
    
    
    
    225.0
    %Corporate and eliminations
    
    
    4,583
    
    
    
    3,241
    
    
    
    1,342
    
    
    
    41.4
    %
    
    
    2,876
    
    
    
    1,515
    
    
    
    1,361
    
    
    
    89.8
    %Consolidated
    
    
    34,881
    
    
    
    25,202
    
    
    
    9,679
    
    
    
    38.4
    %
    
    
    21,174
    
    
    
    12,705
    
    
    
    8,469
    
    
    
    66.7
    %Amortization of program rightsTelevision
    
    
    3,979
    
    
    
    4,274
    
    
    
    (295
    )
    
    
    -6.9
    %
    
    
    1,988
    
    
    
    2,128
    
    
    
    (140
    )
    
    
    -6.6
    %Radio
    
    
    5,482
    
    
    
    5,160
    
    
    
    322
    
    
    
    6.2
    %
    
    
    5,027
    
    
    
    4,883
    
    
    
    144
    
    
    
    2.9
    %Consolidated
    
    
    9,461
    
    
    
    9,434
    
    
    
    27
    
    
    
    0.3
    %
    
    
    7,015
    
    
    
    7,011
    
    
    
    4
    
    
    
    0.1
    %Depreciation and amortizationTelevision
    
    
    4,016
    
    
    
    3,622
    
    
    
    394
    
    
    
    10.9
    %
    
    
    2,029
    
    
    
    1,907
    
    
    
    122
    
    
    
    6.4
    %Radio
    
    
    449
    
    
    
    473
    
    
    
    (24
    )
    
    
    -5.1
    %
    
    
    216
    
    
    
    248
    
    
    
    (32
    )
    
    
    -12.9
    %Fisher Plaza
    
    
    1,632
    
    
    
    1,616
    
    
    
    16
    
    
    
    1.0
    %
    
    
    800
    
    
    
    787
    
    
    
    13
    
    
    
    1.7
    %Corporate and eliminations
    
    
    156
    
    
    
    146
    
    
    
    10
    
    
    
    6.8
    %
    
    
    81
    
    
    
    74
    
    
    
    7
    
    
    
    9.5
    %Consolidated
    
    
    6,253
    
    
    
    5,857
    
    
    
    396
    
    
    
    6.8
    %
    
    
    3,126
    
    
    
    3,016
    
    
    
    110
    
    
    
    3.6
    %Income (loss) from operationsTelevision
    
    
    1,928
    
    
    
    6,243
    
    
    
    (4,315
    )
    
    
    
    
    
    
    (242
    )
    
    
    4,472
    
    
    
    (4,714
    )Radio
    
    
    (1,790
    )
    
    
    (76
    )
    
    
    (1,714
    )
    
    
    
    
    
    
    (1,460
    )
    
    
    (350
    )
    
    
    (1,110
    )Fisher Plaza
    
    
    2,699
    
    
    
    2,195
    
    
    
    504
    
    
    
    
    
    
    
    1,285
    
    
    
    1,272
    
    
    
    13Corporate and eliminations
    
    
    (5,794
    )
    
    
    (4,394
    )
    
    
    (1,400
    )
    
    
    
    
    
    
    (3,487
    )
    
    
    (2,092
    )
    
    
    (1,395
    )Consolidated
    
    
    (2,957
    )
    
    
    3,968
    
    
    
    (6,925
    )
    
    
    
    
    
    
    (3,904
    )
    
    
    3,302
    
    
    
    (7,206
    )Other income, net
    
    
    105,756
    
    
    
    2,296
    
    
    
    103,460
    
    
    
    
    
    
    
    104,730
    
    
    
    1,126
    
    
    
    103,604Interest expense, net
    
    
    (6,902
    )
    
    
    (6,904
    )
    
    
    2
    
    
    
    
    
    
    
    (3,544
    )
    
    
    (3,410
    )
    
    
    (134
    )Income (loss) from continuing
operations before income taxes
    
    
    95,897
    
    
    
    (640
    )
    
    
    96,537
    
    
    
    
    
    
    
    97,282
    
    
    
    1,018
    
    
    
    96,264Provision (benefit) for federal and state
income taxes
    
    
    33,282
    
    
    
    (71
    )
    
    
    33,353
    
    
    
    
    
    
    
    33,626
    
    
    
    319
    
    
    
    33,307Income (loss) from continuing operations
    
    
    62,615
    
    
    
    (569
    )
    
    
    63,184
    
    
    
    
    
    
    
    63,656
    
    
    
    699
    
    
    
    62,957Income (loss) from discontinued
operations, net of income taxes
    
    
    (7
    )
    
    
    1,580
    
    
    
    (1,587
    )
    
    
    
    
    
    
    18
    
    
    
    1,557
    
    
    
    (1,539
    )Net income
    
    $
    62,608
    
    
    $
    1,011
    
    
    $
    61,597
    
    
    
    
    
    
    $
    63,674
    
    
    $
    2,256
    
    
    $
    61,418
 Reclassifications
 Selling, general and administrative expenses, Direct operating costs.
 26




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##### Table of Contents



Comparison of Six and Three-Month Periods Ended June 30, 2008 and June 30, 2007
 Revenue
     Direct operating costs
      27




---



##### Table of Contents



Selling, general and administrative expenses
      Amortization of program rights
   Depreciation and amortization
   Other income, net
  28




---



##### Table of Contents



Interest expense, net
  Provision (benefit) for federal and state income taxes
  Income from discontinued operations, net of income taxes
  Liquidity and capital resources
      29




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##### Table of Contents



Recent Accounting Pronouncements
 Determination of the Useful
Life of Intangible Assets Goodwill and Other Intangible Assets Business Combinations
 Fair Value
Measurements
 Business Combinations purchase method
 30




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31




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##### Table of Contents



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Interest Rate Exposure
  Marketable Securities Exposure
  
 ITEM 4. CONTROLS AND PROCEDURES
   32




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##### Table of Contents



PART II
 OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
   Votes for
    
    Votes withheldRichard L. Hawley
    
    
    4,199,385
    
    
    
    4,105,305George F. Warren, Jr.
    
    
    4,210,763
    
    
    
    4,093,927William W. Warren, Jr.
    
    
    4,157,754
    
    
    
    4,146,936Michael D. Wortsman
    
    
    4,199,511
    
    
    
    4,105,179
   Broker Non-Votes for
    
    Votes against
    
    Votes abstain
    
    votesApproval of the
Fisher
Communications,
Inc. 2008 Equity
Incentive Plan
    
    
    4,518,779
    
    
    
    3,371,208
    
    
    
    68,975
    
    
    
    345,728Ratification of the
appointment of
PricewaterhouseCoopers
LLP as the Companys
independent registered
public accounting firm
    
    
    8,230,759
    
    
    
    71,323
    
    
    
    2,608
    
    
    
    0
 33




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##### Table of Contents



ITEM 5. OTHER INFORMATION
  
 ITEM 6. EXHIBITS
 3.1
    
    Articles of Incorporation, as amended to date.4.1
    
    Form of Common Stock Certificate.10.1*+
    
    Fisher Communications, Inc. Amended and Restated 2008 Equity Incentive Plan (incorporated
by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on May 23, 2008 (File
No. 000-22439)).10.2+
    
    Summary of Non-Employee Director Fees.10.3+
    
    Form of Option Agreement under the Fisher Communications, Inc. Amended and Restated
2008 Equity Incentive Plan.10.4+
    
    Form of Restricted Stock Unit under the Fisher Communications, Inc. Amended and
Restated 2008 Equity Incentive Plan.10.5+
    
    Terms of Equity Grant Program for Nonemployee Directors under the Fisher
Communications, Inc. Amended and Restated 2008 Equity Incentive Plan.31.1
    
    Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.31.2
    
    Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.32.1
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Incorporated by reference.+
    
    Management contract or compensatory plan or arrangement. 34




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##### Table of Contents



SIGNATURES
  FISHER COMMUNICATIONS, INC.Date:      August 8, 2008
    /s/ Jodi A. ColliganJodi A. ColliganVice President Finance and
Chief Accounting Officer

(Signing on behalf of registrant and as
Chief Accounting Officer) 35




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##### Table of Contents



EXHIBIT INDEX
 Exhibit No.
    
    Description3.1
    
    Articles of Incorporation, as amended to date.4.1
    
    Form of Common Stock Certificate.10.1*+
    
    Fisher Communications, Inc. Amended and Restated 2008 Equity Incentive Plan (incorporated
by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on May 23, 2008 (File
No. 000-22439)).10.2+
    
    Summary of Non-Employee Director Fees.10.3+
    
    Form of Option Agreement under the Fisher Communications, Inc. Amended and Restated
2008 Equity Incentive Plan.10.4+
    
    Form of Restricted Stock Unit under the Fisher Communications, Inc. Amended and
Restated 2008 Equity Incentive Plan.10.5+
    
    Terms of Equity Grant Program for Nonemployee Directors under the Fisher
Communications, Inc. Amended and Restated 2008 Equity Incentive Plan.31.1
    
    Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.31.2
    
    Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.32.1
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Incorporated by reference.+
    
    Management contract or compensatory plan or arrangement. 36