##### Table of Contents



U.S. SECURITIES AND EXCHANGE COMMISSION
 Washington D.C. 20549
 FORM 10-Q
 þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended September 30, 2007
 o
    
    Transition Report Under Section 13 or 15(d) of the Exchange Act
 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
  o þ o
 o þ




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##### 



PART IFINANCIAL INFORMATIONItem 1. Financial StatementsThe following Condensed Consolidated Financial Statements (unaudited) are presented for the
Registrant, Fisher Communications, Inc., and its subsidiaries.1. Condensed Consolidated Statements of Operations: Three and nine months ended September 30, 2007 and 20062. Condensed Consolidated Balance Sheets: September 30, 2007 and December 31, 20063. Condensed Consolidated Statements of Cash Flows: Nine months ended September 30, 2007 and 20064. Condensed Consolidated Statements of Comprehensive Income: Three and nine months ended September 30, 2007 and 20065. Notes to Condensed Consolidated Financial StatementsItem 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 3. Quantitative and Qualitative Disclosures about Market RisksItem 4. Controls and ProceduresPART II 
OTHER INFORMATIONItem 1. Legal ProceedingsItem 1A. Risk FactorsItem 2. Unregistered Sales of Equity Securities and Use of ProceedsItem 3. Defaults upon Senior SecuritiesItem 4. Submission of Matters to a Vote of Security HoldersItem 5. Other InformationItem 6. ExhibitsSIGNATURESEXHIBIT INDEXEXHIBIT 10.1EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2
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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 Nine months ended
    
    Three months ended(in thousands, except per-share amounts)
    
    September 30
    
    September 30(Unaudited)
    
    2007
    
    2006
    
    2007
    
    2006Revenue
    
    $
    116,340
    
    
    $
    109,983
    
    
    $
    40,798
    
    
    $
    38,712Costs and expensesDirect operating costs (exclusive of depreciation
and amortization
of $7,198, $6,222,
$2,312, and $2,073,
respectively, and
amortization of
program rights of
$16,804, $16,418,
$7,370, and
$7,082, respectively,
reported separately
below)
    
    
    41,920
    
    
    
    38,993
    
    
    
    13,870
    
    
    
    13,595Selling, general and administrative expenses
    
    
    43,285
    
    
    
    40,139
    
    
    
    15,052
    
    
    
    13,689Amortization of program rights
    
    
    16,804
    
    
    
    16,418
    
    
    
    7,370
    
    
    
    7,082Depreciation and amortization
    
    
    8,668
    
    
    
    7,515
    
    
    
    2,811
    
    
    
    2,488110,677
    
    
    
    103,065
    
    
    
    39,103
    
    
    
    36,854Income from operations
    
    
    5,663
    
    
    
    6,918
    
    
    
    1,695
    
    
    
    1,858Other income, net
    
    
    3,683
    
    
    
    2,814
    
    
    
    1,387
    
    
    
    1,047Interest expense, net
    
    
    (10,222
    )
    
    
    (10,396
    )
    
    
    (3,318
    )
    
    
    (3,574
    )Loss from continuing operations before income taxes
    
    
    (876
    )
    
    
    (664
    )
    
    
    (236
    )
    
    
    (669
    )Provision for federal and state income taxes
    
    
    294
    
    
    
    115
    
    
    
    365
    
    
    
    115Loss from continuing operations
    
    
    (1,170
    )
    
    
    (779
    )
    
    
    (601
    )
    
    
    (784
    )Income from discontinued operations, net of income taxes
    
    
    1,648
    
    
    
    675
    
    
    
    68
    
    
    
    113Net income (loss)
    
    $
    478
    
    
    $
    (104
    )
    
    $
    (533
    )
    
    $
    (671
    )Income (loss) per share:From continuing operations
    
    $
    (0.14
    )
    
    $
    (0.09
    )
    
    $
    (0.07
    )
    
    $
    (0.09
    )From discontinued operations
    
    
    0.19
    
    
    
    0.08
    
    
    
    0.01
    
    
    
    0.01Basic and diluted net income (loss) per share
    
    $
    0.05
    
    
    $
    (0.01
    )
    
    $
    (0.06
    )
    
    $
    (0.08
    )Shares used in computation of basic and diluted net income (loss) per
share
    
    
    8,722
    
    
    
    8,711
    
    
    
    8,724
    
    
    
    8,716
  3




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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (in thousands, except share and per-share amounts)
    
    September 30
    
    December 31(Unaudited)
    
    2007
    
    2006ASSETSCurrent AssetsCash and cash equivalents
    
    $
    7,479
    
    
    $
    7,477Restricted cash
    
    
    
    
    
    
    8,473Receivables, net
    
    
    32,342
    
    
    
    30,131Deferred income taxes
    
    
    686
    
    
    
    690Prepaid expenses and other assets
    
    
    3,168
    
    
    
    3,592Television and radio broadcast rights
    
    
    7,768
    
    
    
    6,676Assets held for sale
    
    
    12
    
    
    
    19Total current assets
    
    
    51,455
    
    
    
    57,058Marketable securities, at market value
    
    
    184,394
    
    
    
    188,307Cash value of life insurance and retirement deposits
    
    
    16,566
    
    
    
    15,959Television and radio broadcast rights
    
    
    21
    
    
    
    1,041Goodwill, net
    
    
    37,361
    
    
    
    32,714Intangible assets
    
    
    42,799
    
    
    
    41,142Investment in equity investee
    
    
    2,597
    
    
    
    2,789Deferred financing fees and other assets
    
    
    9,212
    
    
    
    7,748Assets held for sale
    
    
    2,045
    
    
    
    2,612Property, plant and equipment, net
    
    
    146,499
    
    
    
    148,207Total Assets
    
    $
    492,949
    
    
    $
    497,577LIABILITIES AND STOCKHOLDERS EQUITYCurrent LiabilitiesTrade accounts payable
    
    $
    4,113
    
    
    $
    4,600Accrued payroll and related benefits
    
    
    6,077
    
    
    
    7,567Interest payable
    
    
    540
    
    
    
    3,809Television and radio broadcast rights payable
    
    
    6,809
    
    
    
    5,667Income taxes payable
    
    
    388
    
    
    
    486Other current liabilities
    
    
    4,861
    
    
    
    3,626Liabilities of businesses held for sale
    
    
    117
    
    
    
    289Total current liabilities
    
    
    22,905
    
    
    
    26,044Long-term debt
    
    
    150,000
    
    
    
    150,000Accrued retirement benefits
    
    
    19,003
    
    
    
    19,027Deferred income taxes
    
    
    53,651
    
    
    
    54,414Other liabilities
    
    
    9,343
    
    
    
    8,527Commitments and ContingenciesStockholders EquityCommon stock, shares authorized 12,000,000, $1.25 par value;
issued and outstanding 8,723,649 as of
September 30, 2007
and 8,720,091 as of December 31, 2006
    
    
    10,905
    
    
    
    10,900Capital in excess of par
    
    
    9,997
    
    
    
    9,454Accumulated other comprehensive income, net of income taxes:Unrealized gain on marketable securities
    
    
    118,852
    
    
    
    121,441Accumulated loss
    
    
    (1,714
    )
    
    
    (1,735
    )Prior service cost
    
    
    (188
    )
    
    
    (212
    )Retained earnings
    
    
    100,195
    
    
    
    99,717Total Stockholders Equity
    
    
    238,047
    
    
    
    239,565Total Liabilities and Stockholders Equity
    
    $
    492,949
    
    
    $
    497,577
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##### Table of Contents



FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 Nine months ended(in thousands)
    
    September 30(Unaudited)
    
    2007
    
    2006Cash flows from operating activitiesNet income (loss)
    
    $
    478
    
    
    $
    (104
    )Adjustments to reconcile net income (loss) to net cash provided by
operating activitiesDepreciation and amortization
    
    
    8,668
    
    
    
    7,623Deferred income taxes
    
    
    (167
    )
    
    
    462Dividends from equity investee
    
    
    150Amortization of deferred financing fees
    
    
    474
    
    
    
    474Amortization of program rights
    
    
    16,804
    
    
    
    16,418Payments for television and radio broadcast rights
    
    
    (15,740
    )
    
    
    (15,493
    )Gain on sale of radio station
    
    
    (1,491
    )Equity in operations of equity investees
    
    
    42
    
    
    
    (10
    )Stock-based compensation
    
    
    514
    
    
    
    349Other
    
    
    40
    
    
    
    43Change in operating assets and liabilitiesReceivables
    
    
    (2,199
    )
    
    
    (1,821
    )Prepaid expenses and other current assets
    
    
    431
    
    
    
    693Cash value of life insurance and retirement deposits
    
    
    (607
    )
    
    
    (477
    )Other assets
    
    
    711
    
    
    
    (329
    )Trade accounts payable, accrued payroll and related benefits, interest
payable, and other current liabilities
    
    
    (4,235
    )
    
    
    (2,838
    )Income taxes receivable and payable
    
    
    (98
    )Accrued retirement benefits
    
    
    (23
    )
    
    
    89Other liabilities
    
    
    (418
    )
    
    
    3,184Net cash provided by operating
activities
    
    
    3,334
    
    
    
    8,263Cash flows from investing activitiesPurchase of investments available-for-sale
    
    
    (182
    )Proceeds from sale of investments available-for-sale
    
    
    133Decrease in restricted cash
    
    
    8,473Proceeds from sale of radio station
    
    
    2,869Payments for options to purchase television stations
    
    
    
    
    
    
    (1,100
    )Deposits paid for purchase of television stations
    
    
    (2,750
    )
    
    
    (9,728
    )Purchase of television stations
    
    
    (4,931
    )
    
    
    (16,142
    )Purchase of online news service
    
    
    (1,482
    )Proceeds from sale of property, plant & equipment
    
    
    1,250Purchase of property, plant and equipment
    
    
    (6,740
    )
    
    
    (12,633
    )Net cash used in investing activities
    
    
    (3,360
    )
    
    
    (39,603
    )Cash flows from financing activitiesBorrowings under borrowing agreements
    
    
    6,000
    
    
    
    15,000Payments on borrowing agreements
    
    
    (6,000
    )
    
    
    (2,000
    )Payment of capital lease obligation
    
    
    (11
    )Proceeds from exercise of stock options
    
    
    39
    
    
    
    546Excess tax benefit from exercise of stock options
    
    
    
    
    
    
    23Net cash provided by financing
activities
    
    
    28
    
    
    
    13,569Net increase (decrease) in cash and cash equivalents
    
    
    2
    
    
    
    (17,771
    )Cash and cash equivalents, beginning of period
    
    
    7,477
    
    
    
    19,622Cash and cash equivalents, end of period
    
    $
    7,479
    
    
    $
    1,851
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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 Nine months ended
    
    Three months ended(in thousands)
    
    September 30
    
    September 30(Unaudited)
    
    2007
    
    2006
    
    2007
    
    2006Net income (loss)
    
    $
    478
    
    
    $
    (104
    )
    
    $
    (533
    )
    
    $
    (671
    )Other comprehensive income (loss):Unrealized gain (loss) on marketable securities
    
    
    (3,961
    )
    
    
    7,343
    
    
    
    (3,121
    )
    
    
    7,766Effect of income taxes
    
    
    1,386
    
    
    
    (2,570
    )
    
    
    1,092
    
    
    
    (2,718
    )Accumulated loss
    
    
    32
    
    
    
    
    
    
    
    11Effect of income taxes
    
    
    (11
    )
    
    
    
    
    
    
    (4
    )Prior service cost
    
    
    36
    
    
    
    
    
    
    
    12Effect of income taxes
    
    
    (12
    )
    
    
    
    
    
    
    (4
    )Reclassification adjustment for gains included in net
income (loss)
    
    
    (22
    )
    
    
    
    
    
    
    (14
    )Effect of income taxes
    
    
    8
    
    
    
    
    
    
    
    5Other comprehensive income (loss)
    
    
    (2,544
    )
    
    
    4,773
    
    
    
    (2,023
    )
    
    
    5,048Comprehensive income (loss)
    
    $
    (2,066
    )
    
    $
    4,669
    
    
    $
    (2,556
    )
    
    $
    4,377
  6




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Reclassifications
  
    
    Direct operating costs has replaced the caption previously labeled Cost of services
sold;
    
    Amortization of program rights are now reported separately, whereas previously these
amounts were reported within Cost of services sold; and
    
    Selling, general and administrative expenses now include amounts previously reported
separately under the captions Selling expenses and General and administrative
expenses.
   Income taxes
 Accounting for Uncertainty in Income Taxes  an
interpretation of FASB Statement No. 109
 7




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The Fair
Value Option for Financial Assets and Financial Liabilities  Including an amendment to FASB
Statement No. 115
 Fair Value Measurements
     Accounting for the Impairment or Disposal of Long-Lived Assets
 8




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Nine months ended
    
    
    Three months endedSeptember 30
    
    
    September 302007
    
    
    2006
    
    
    2007
    
    
    2006Revenue
    
    $
    1,477
    
    
    $
    7,830
    
    
    $
    500
    
    
    $
    1,781Income from discontinued operations:Discontinued operating activities
    
    $
    242
    
    
    $
    1,046
    
    
    $
    105
    
    
    $
    178Gain on sale
    
    
    2,2942,536
    
    
    
    1,046
    
    
    
    105
    
    
    
    178Income tax effect
    
    
    (888
    )
    
    
    (371
    )
    
    
    (37
    )
    
    
    (65
    )$
    1,648
    
    
    $
    675
    
    
    $
    68
    
    
    $
    113
  September 30
    
    
    December 312007
    
    
    2006Goodwill, net
    
    $
    645
    
    
    $
    1,129Property, plant and equipment, net
    
    
    635
    
    
    
    718Intangible assets
    
    
    765
    
    
    
    765Other assets
    
    
    12
    
    
    
    19$
    2,057
    
    
    $
    2,631Liabilities of businesses held for sale
    
    $
    117
    
    
    $
    289
      9




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##### Table of Contents



Nine months ended
    
    
    Three months endedSeptember 30
    
    
    September 302007
    
    
    2006
    
    
    2007
    
    
    2006Interest cost
    
    $
    798
    
    
    $
    779
    
    
    $
    266
    
    
    $
    259Amortization of loss
    
    
    32
    
    
    
    116
    
    
    
    10
    
    
    
    39Net periodic
pension cost
    
    $
    830
    
    
    $
    895
    
    
    $
    276
    
    
    $
    298
     Nine months
    
    
    Three monthsended September 30
    
    
    ended September 302007
    
    
    2006
    
    
    2007
    
    
    2006Loss from continuing operations
    
    $
    (1,170
    )
    
    $
    (779
    )
    
    $
    (601
    )
    
    $
    (784
    )Income from discontinued operations, net of income taxes
    
    
    1,648
    
    
    
    675
    
    
    
    68
    
    
    
    113Net income (loss)
    
    $
    478
    
    
    $
    (104
    )
    
    $
    (533
    )
    
    $
    (671
    )Shares used in computation of basic and
  diluted net income (loss) per share
    
    
    8,722
    
    
    
    8,711
    
    
    
    8,724
    
    
    
    8,716Income (loss) per share:From continuing operations
    
    $
    (0.14
    )
    
    $
    (0.09
    )
    
    $
    (0.07
    )
    
    $
    (0.09
    )From discontinued operations
    
    
    0.19
    
    
    
    0.08
    
    
    
    0.01
    
    
    
    0.01Basic and diluted net income (loss) per share
    
    $
    0.05
    
    
    $
    (0.01
    )
    
    $
    (0.06
    )
    
    $
    (0.08
    )
   10




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##### Table of Contents



Nine months
    
    Three monthsended September 30
    
    ended September 302007
    
    2006
    
    2007
    
    2006Stock-based compensation expense
    
    $
    514
    
    
    $
    349
    
    
    $
    186
    
    
    $
    62
       11




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##### Table of Contents



Nine months
    
    
    Three monthsended September 30
    
    
    ended September 302007
    
    
    2006
    
    
    2007
    
    
    2006Television
    
    $
    77,110
    
    
    $
    73,322
    
    
    $
    25,532
    
    
    $
    24,472Radio
    
    
    30,844
    
    
    
    29,986
    
    
    
    12,493
    
    
    
    11,814Fisher Plaza
    
    
    8,500
    
    
    
    6,662
    
    
    
    2,811
    
    
    
    2,370Corporate and eliminations
    
    
    (114
    )
    
    
    13
    
    
    
    (38
    )
    
    
    56$
    116,340
    
    
    $
    109,983
    
    
    $
    40,798
    
    
    $
    38,712
   Nine months
    
    
    Three monthsended September 30
    
    
    ended September 302007
    
    
    2006
    
    
    2007
    
    
    2006Television
    
    $
    9,822
    
    
    $
    12,303
    
    
    $
    3,405
    
    
    $
    3,619Radio
    
    
    (514
    )
    
    
    (539
    )
    
    
    (472
    )
    
    
    (332
    )Fisher Plaza
    
    
    3,215
    
    
    
    1,602
    
    
    
    1,019
    
    
    
    513Corporate and eliminations
    
    
    (3,177
    )
    
    
    (3,634
    )
    
    
    (870
    )
    
    
    (895
    )$
    9,346
    
    
    $
    9,732
    
    
    $
    3,082
    
    
    $
    2,905
  Nine months
    
    
    Three monthsended September 30
    
    
    ended September 302007
    
    
    2006
    
    
    2007
    
    
    2006Total segment income from continuing
operations before interest and income taxes
    
    $
    9,346
    
    
    $
    9,732
    
    
    $
    3,082
    
    
    $
    2,905Interest expense
    
    
    (10,222
    )
    
    
    (10,396
    )
    
    
    (3,318
    )
    
    
    (3,574
    )Consolidated loss from continuing
operations before income taxes
    
    $
    (876
    )
    
    $
    (664
    )
    
    $
    (236
    )
    
    $
    (669
    )
  September 30
    
    
    December 312007
    
    
    2006Total assetsTelevision
    
    $
    135,230
    
    
    $
    130,994Radio
    
    
    23,119
    
    
    
    24,436Fisher Plaza
    
    
    118,310
    
    
    
    119,872Corporate and eliminations
    
    
    214,233
    
    
    
    219,644490,892
    
    
    
    494,946Assets held for sale
    
    
    2,057
    
    
    
    2,631$
    492,949
    
    
    $
    497,577
 12




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13




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##### Table of Contents



Financial Information for Guarantors
Condensed Consolidated Statement of Operations
for the nine months ended September 30, 2007
 100%
    
    
    
    
    
    FisherFisher
    
    Owned
    
    
    
    
    
    Communications,Communications,
    
    Guarantor
    
    
    
    
    
    Inc. and(in thousands)
    
    Inc.
    
    Subsidiaries
    
    Eliminations
    
    SubsidiariesRevenue
    
    $
    
    
    
    $
    116,454
    
    
    $
    (114
    )
    
    $
    116,340Costs and expensesDirect operating costs
    
    
    
    
    
    
    40,510
    
    
    
    1,410
    
    
    
    41,920Selling, general and administrative expenses
    
    
    6,399
    
    
    
    38,410
    
    
    
    (1,524
    )
    
    
    43,285Amortization of program rights
    
    
    
    
    
    
    16,804
    
    
    
    
    
    
    
    16,804Depreciation and amortization
    
    
    217
    
    
    
    8,451
    
    
    
    
    
    
    
    8,6686,616
    
    
    
    104,175
    
    
    
    (114
    )
    
    
    110,677Income (loss) from operations
    
    
    (6,616
    )
    
    
    12,279
    
    
    
    
    
    
    
    5,663Other income, net
    
    
    3,413
    
    
    
    270
    
    
    
    
    
    
    
    3,683Equity in income of subsidiaries
    
    
    9,578
    
    
    
    
    
    
    
    (9,578
    )
    
    
    Interest expense, net
    
    
    (10,214
    )
    
    
    (8
    )
    
    
    
    
    
    
    (10,222
    )Income (loss) from continuing operations before income taxes
    
    
    (3,839
    )
    
    
    12,541
    
    
    
    (9,578
    )
    
    
    (876
    )Provision (benefit) for federal and state income taxes
    
    
    (4,317
    )
    
    
    4,611
    
    
    
    
    
    
    
    294Income (loss) from continuing operations
    
    
    478
    
    
    
    7,930
    
    
    
    (9,578
    )
    
    
    (1,170
    )Income from discontinued operations, net of income taxes
    
    
    
    
    
    
    1,648
    
    
    
    
    
    
    
    1,648Net income (loss)
    
    $
    478
    
    
    $
    (9,578
    )
    
    $
    9,578
    
    
    $
    478
 14




---



##### Table of Contents



Financial Information for Guarantors
Condensed Consolidated Statement of Operations
for the nine months ended September 30, 2006
 100%
    
    
    
    
    
    FisherFisher
    
    Owned
    
    
    
    
    
    Communications,Communications,
    
    Guarantor
    
    
    
    
    
    Inc. and(in thousands)
    
    Inc.
    
    Subsidiaries
    
    Eliminations
    
    SubsidiariesRevenue
    
    $
    
    
    
    $
    110,139
    
    
    $
    (156
    )
    
    $
    109,983Costs and expensesDirect operating costs
    
    
    
    
    
    
    37,753
    
    
    
    1,240
    
    
    
    38,993Selling, general and administrative expenses
    
    
    6,144
    
    
    
    35,391
    
    
    
    (1,396
    )
    
    
    40,139Amortization of program rights
    
    
    
    
    
    
    16,418
    
    
    
    
    
    
    
    16,418Depreciation and amortization
    
    
    184
    
    
    
    7,331
    
    
    
    
    
    
    
    7,5156,328
    
    
    
    96,893
    
    
    
    (156
    )
    
    
    103,065Income (loss) from operations
    
    
    (6,328
    )
    
    
    13,246
    
    
    
    
    
    
    
    6,918Other income, net
    
    
    2,551
    
    
    
    263
    
    
    
    
    
    
    
    2,814Equity in income of subsidiaries
    
    
    9,207
    
    
    
    
    
    
    
    (9,207
    )
    
    
    Interest expense, net
    
    
    (10,391
    )
    
    
    (5
    )
    
    
    
    
    
    
    (10,396
    )Income (loss) from continuing operations before income taxes
    
    
    (4,961
    )
    
    
    13,504
    
    
    
    (9,207
    )
    
    
    (664
    )Provision (benefit) for federal and state income taxes
    
    
    (4,857
    )
    
    
    4,972
    
    
    
    
    
    
    
    115Income (loss) from continuing operations
    
    
    (104
    )
    
    
    8,532
    
    
    
    (9,207
    )
    
    
    (779
    )Income from discontinued operations, net of income taxes
    
    
    
    
    
    
    675
    
    
    
    
    
    
    
    675Net income (loss)
    
    $
    (104
    )
    
    $
    9,207
    
    
    $
    (9,207
    )
    
    $
    (104
    )
 15




---



##### Table of Contents



Financial Information for Guarantors
Condensed Consolidated Statement of Operations
for the three months ended September 30, 2007
 100%
    
    
    
    
    
    FisherFisher
    
    Owned
    
    
    
    
    
    Communications,Communications,
    
    Guarantor
    
    
    
    
    
    Inc. and(in thousands)
    
    Inc.
    
    Subsidiaries
    
    Eliminations
    
    SubsidiariesRevenue
    
    $
    
    
    
    $
    40,836
    
    
    $
    (38
    )
    
    $
    40,798Costs and expensesDirect operating costs
    
    
    
    
    
    
    13,391
    
    
    
    479
    
    
    
    13,870Selling, general and administrative expenses
    
    
    2,152
    
    
    
    13,417
    
    
    
    (517
    )
    
    
    15,052Amortization of program rights
    
    
    
    
    
    
    7,370
    
    
    
    
    
    
    
    7,370Depreciation and amortization
    
    
    71
    
    
    
    2,740
    
    
    
    
    
    
    
    2,8112,223
    
    
    
    36,918
    
    
    
    (38
    )
    
    
    39,103Income (loss) from operations
    
    
    (2,223
    )
    
    
    3,918
    
    
    
    
    
    
    
    1,695Other income, net
    
    
    1,344
    
    
    
    43
    
    
    
    
    
    
    
    1,387Equity in income of subsidiaries
    
    
    2,623
    
    
    
    
    
    
    
    (2,623
    )
    
    
    Interest expense, net
    
    
    (3,310
    )
    
    
    (8
    )
    
    
    
    
    
    
    (3,318
    )Income (loss) from continuing operations before income taxes
    
    
    (1,566
    )
    
    
    3,953
    
    
    
    (2,623
    )
    
    
    (236
    )Provision (benefit) for federal and state income taxes
    
    
    (1,033
    )
    
    
    1,398
    
    
    
    
    
    
    
    365Income (loss) from continuing operations
    
    
    (533
    )
    
    
    2,555
    
    
    
    (2,623
    )
    
    
    (601
    )Income from discontinued operations, net of income taxes
    
    
    
    
    
    
    68
    
    
    
    
    
    
    
    68Net income (loss)
    
    $
    (533
    )
    
    $
    2,623
    
    
    $
    (2,623
    )
    
    $
    (533
    )
 16




---



##### Table of Contents



Financial Information for Guarantors
Condensed Consolidated Statement of Operations
for the three months ended September 30, 2006
 100%
    
    
    
    
    
    FisherFisher
    
    Owned
    
    
    
    
    
    Communications,Communications,
    
    Guarantor
    
    
    
    
    
    Inc. and(in thousands)
    
    Inc.
    
    Subsidiaries
    
    Eliminations
    
    SubsidiariesRevenue
    
    $
    
    
    
    $
    38,764
    
    
    $
    (52
    )
    
    $
    38,712Costs and expensesDirect operating costs
    
    
    
    
    
    
    13,166
    
    
    
    429
    
    
    
    13,595Selling, general and administrative expenses
    
    
    1,921
    
    
    
    12,249
    
    
    
    (481
    )
    
    
    13,689Amortization of program rights
    
    
    
    
    
    
    7,082
    
    
    
    
    
    
    
    7,082Depreciation and amortization
    
    
    60
    
    
    
    2,428
    
    
    
    
    
    
    
    2,4881,981
    
    
    
    34,925
    
    
    
    (52
    )
    
    
    36,854Income (loss) from operations
    
    
    (1,981
    )
    
    
    3,839
    
    
    
    
    
    
    
    1,858Other income, net
    
    
    975
    
    
    
    72
    
    
    
    
    
    
    
    1,047Equity in income of subsidiaries
    
    
    2,543
    
    
    
    
    
    
    
    (2,543
    )
    
    
    Interest expense, net
    
    
    (3,574
    )
    
    
    
    
    
    
    
    
    
    
    (3,574
    )Income (loss) from continuing operations before income taxes
    
    
    (2,037
    )
    
    
    3,911
    
    
    
    (2,543
    )
    
    
    (669
    )Provision (benefit) for federal and state income taxes
    
    
    (1,366
    )
    
    
    1,481
    
    
    
    
    
    
    
    115Income (loss) from continuing operations
    
    
    (671
    )
    
    
    2,430
    
    
    
    (2,543
    )
    
    
    (784
    )Income from discontinued operations, net of income taxes
    
    
    
    
    
    
    113
    
    
    
    
    
    
    
    113Net income (loss)
    
    $
    (671
    )
    
    $
    2,543
    
    
    $
    (2,543
    )
    
    $
    (671
    )
 17




---



##### Table of Contents



Financial Information for Guarantors
Condensed Consolidated Balance Sheet
as of September 30, 2007
 100%
    
    
    
    
    
    FisherFisher
    
    Owned
    
    
    
    
    
    Communications,Communications,
    
    Guarantor
    
    
    
    
    
    Inc. and(in thousands)
    
    Inc.
    
    Subsidiaries
    
    Eliminations
    
    SubsidiariesASSETSCurrent AssetsCash and cash equivalents
    
    $
    7,042
    
    
    $
    437
    
    
    $
    
    
    
    $
    7,479Receivables, net
    
    
    663
    
    
    
    31,679
    
    
    
    
    
    
    
    32,342Due from affiliate
    
    
    
    
    
    
    33,487
    
    
    
    (33,487
    )
    
    
    Deferred income taxes
    
    
    106
    
    
    
    580
    
    
    
    
    
    
    
    686Prepaid expenses and other assets
    
    
    436
    
    
    
    2,732
    
    
    
    
    
    
    
    3,168Television and radio broadcast rights
    
    
    
    
    
    
    7,768
    
    
    
    
    
    
    
    7,768Assets held for sale
    
    
    
    
    
    
    12
    
    
    
    
    
    
    
    12Total current assets
    
    
    8,247
    
    
    
    76,695
    
    
    
    (33,487
    )
    
    
    51,455Marketable securities, at market value
    
    
    183,846
    
    
    
    548
    
    
    
    
    
    
    
    184,394Investment in consolidated subsidiaries
    
    
    263,212
    
    
    
    
    
    
    
    (263,212
    )
    
    
    Cash value of life insurance and retirement deposits
    
    
    16,566
    
    
    
    
    
    
    
    
    
    
    
    16,566Television and radio broadcast rights
    
    
    
    
    
    
    21
    
    
    
    
    
    
    
    21Goodwill, net
    
    
    
    
    
    
    37,361
    
    
    
    
    
    
    
    37,361Intangible assets
    
    
    
    
    
    
    42,799
    
    
    
    
    
    
    
    42,799Investment in equity investee
    
    
    
    
    
    
    2,597
    
    
    
    
    
    
    
    2,597Deferred financing fees and other assets
    
    
    4,074
    
    
    
    5,138
    
    
    
    
    
    
    
    9,212Assets held for sale
    
    
    
    
    
    
    2,045
    
    
    
    
    
    
    
    2,045Property, plant and equipment, net
    
    
    872
    
    
    
    145,627
    
    
    
    
    
    
    
    146,499Total Assets
    
    $
    476,817
    
    
    $
    312,831
    
    
    $
    (296,699
    )
    
    $
    492,949LIABILITIES AND STOCKHOLDERS EQUITYCurrent LiabilitiesTrade accounts payable
    
    $
    1,052
    
    
    $
    3,061
    
    
    
    
    
    
    $
    4,113Payable to affiliate
    
    
    33,487
    
    
    
    
    
    
    
    (33,487
    )
    
    
    Accrued payroll and related benefits
    
    
    812
    
    
    
    5,265
    
    
    
    
    
    
    
    6,077Interest payable
    
    
    540
    
    
    
    
    
    
    
    
    
    
    
    540Television and radio broadcast rights payable
    
    
    
    
    
    
    6,809
    
    
    
    
    
    
    
    6,809Income taxes payable
    
    
    
    
    
    
    388
    
    
    
    
    
    
    
    388Other current liabilities
    
    
    967
    
    
    
    3,894
    
    
    
    
    
    
    
    4,861Liabilities of businesses held for sale
    
    
    
    
    
    
    117
    
    
    
    
    
    
    
    117Total current liabilities
    
    
    36,858
    
    
    
    19,534
    
    
    
    (33,487
    )
    
    
    22,905Long-term debt
    
    
    150,000
    
    
    
    
    
    
    
    
    
    
    
    150,000Accrued retirement benefits
    
    
    18,973
    
    
    
    30
    
    
    
    
    
    
    
    19,003Deferred income taxes
    
    
    32,874
    
    
    
    20,777
    
    
    
    
    
    
    
    53,651Other liabilities
    
    
    65
    
    
    
    9,278
    
    
    
    
    
    
    
    9,343Stockholders EquityCommon stock
    
    
    10,905
    
    
    
    1,131
    
    
    
    (1,131
    )
    
    
    10,905Capital in excess of par
    
    
    9,997
    
    
    
    164,234
    
    
    
    (164,234
    )
    
    
    9,997Accumulated other comprehensive income, net of income taxes:Unrealized gain on marketable securities
    
    118,852
    
    
    
    
    
    
    
    
    
    
    118,852Accumulated loss
    
    
    (1,714
    )
    
    
    
    
    
    
    
    
    
    
    (1,714
    )Prior service cost
    
    
    (188
    )
    
    
    
    
    
    
    
    
    
    
    (188
    )Retained earnings
    
    
    100,195
    
    
    
    97,847
    
    
    
    (97,847
    )
    
    
    100,195Total Stockholders Equity
    
    
    238,047
    
    
    
    263,212
    
    
    
    (263,212
    )
    
    
    238,047Total Liabilities and Stockholders Equity
    
    $
    476,817
    
    
    $
    312,831
    
    
    $
    (296,699
    )
    
    $
    492,949
 18




---



##### Table of Contents



Financial Information for Guarantors
Condensed Consolidated Balance Sheet
as of December 31, 2006
 100%
    
    
    
    
    
    FisherFisher
    
    Owned
    
    
    
    
    
    Communications,Communications,
    
    Guarantor
    
    
    
    
    
    Inc. and(in thousands)
    
    Inc.
    
    Subsidiaries
    
    Eliminations
    
    SubsidiariesASSETSCurrent AssetsCash and cash equivalents
    
    $
    8,544
    
    
    
    
    
    
    $
    (1,067
    )
    
    $
    7,477Restricted cash
    
    
    
    
    
    
    8,473
    
    
    
    
    
    
    
    8,473Receivables, net
    
    
    768
    
    
    
    29,363
    
    
    
    
    
    
    
    30,131Due from affiliate
    
    
    
    
    
    
    17,357
    
    
    
    (17,357
    )Deferred income taxes
    
    
    106
    
    
    
    584
    
    
    
    
    
    
    
    690Prepaid expenses and other assets
    
    
    438
    
    
    
    3,154
    
    
    
    
    
    
    
    3,592Television and radio broadcast rights
    
    
    
    
    
    
    6,676
    
    
    
    
    
    
    
    6,676Assets held for sale
    
    
    
    
    
    
    19
    
    
    
    
    
    
    
    19Total current assets
    
    
    9,856
    
    
    
    65,626
    
    
    
    (18,424
    )
    
    
    57,058Marketable securities, at market value
    
    
    187,833
    
    
    
    474
    
    
    
    
    
    
    
    188,307Investment in consolidated subsidiaries
    
    
    253,632
    
    
    
    
    
    
    
    (253,632
    )Cash value of life insurance and retirement deposits
    
    
    15,959
    
    
    
    
    
    
    
    
    
    
    
    15,959Television and radio broadcast rights
    
    
    
    
    
    
    1,041
    
    
    
    
    
    
    
    1,041Goodwill, net
    
    
    
    
    
    
    32,714
    
    
    
    
    
    
    
    32,714Intangible assets
    
    
    
    
    
    
    41,142
    
    
    
    
    
    
    
    41,142Investment in equity investee
    
    
    
    
    
    
    2,789
    
    
    
    
    
    
    
    2,789Deferred financing fees and other assets
    
    
    4,538
    
    
    
    3,210
    
    
    
    
    
    
    
    7,748Assets held for sale
    
    
    
    
    
    
    2,612
    
    
    
    
    
    
    
    2,612Property, plant and equipment, net
    
    
    813
    
    
    
    147,394
    
    
    
    
    
    
    
    148,207Total Assets
    
    $
    472,631
    
    
    $
    297,002
    
    
    $
    (272,056
    )
    
    $
    497,577LIABILITIES AND STOCKHOLDERS EQUITYCurrent LiabilitiesTrade accounts payable
    
    $
    1,543
    
    
    $
    4,124
    
    
    $
    (1,067
    )
    
    $
    4,600Due to affiliate
    
    
    17,357
    
    
    
    
    
    
    
    (17,357
    )Accrued payroll and related benefits
    
    
    1,841
    
    
    
    5,726
    
    
    
    
    
    
    
    7,567Interest payable
    
    
    3,809
    
    
    
    
    
    
    
    
    
    
    
    3,809Television and radio broadcast rights payable
    
    
    
    
    
    
    5,667
    
    
    
    
    
    
    
    5,667Income taxes payable
    
    
    
    
    
    
    486
    
    
    
    
    
    
    
    486Other current liabilities
    
    
    950
    
    
    
    2,676
    
    
    
    
    
    
    
    3,626Liabilities of businesses held for sale
    
    
    
    
    
    
    289
    
    
    
    
    
    
    
    289Total current liabilities
    
    
    25,500
    
    
    
    18,968
    
    
    
    (18,424
    )
    
    
    26,044Long-term debt
    
    
    150,000
    
    
    
    
    
    
    
    
    
    
    
    150,000Accrued retirement benefits
    
    
    18,942
    
    
    
    85
    
    
    
    
    
    
    
    19,027Deferred income taxes
    
    
    38,559
    
    
    
    15,855
    
    
    
    
    
    
    
    54,414Other liabilities
    
    
    65
    
    
    
    8,462
    
    
    
    
    
    
    
    8,527Stockholders EquityCommon stock
    
    
    10,900
    
    
    
    1,131
    
    
    
    (1,131
    )
    
    
    10,900Capital in excess of par
    
    
    9,454
    
    
    
    164,234
    
    
    
    (164,234
    )
    
    
    9,454Accumulated other comprehensive income  net of income taxes:Unrealized gain on marketable securities
    
    
    121,441
    
    
    
    
    
    
    
    
    
    
    
    121,441Accumulated loss
    
    
    (1,735
    )
    
    
    
    
    
    
    
    
    
    
    (1,735
    )Prior service cost
    
    
    (212
    )
    
    
    
    
    
    
    
    
    
    
    (212
    )Retained earnings
    
    
    99,717
    
    
    
    88,267
    
    
    
    (88,267
    )
    
    
    99,717Total Stockholders Equity
    
    
    239,565
    
    
    
    253,632
    
    
    
    (253,632
    )
    
    
    239,565Total Liabilities and Stockholders Equity
    
    $
    472,631
    
    
    $
    297,002
    
    
    $
    (272,056
    )
    
    $
    497,577
 19




---



##### Table of Contents



Financial Information for Guarantors
Condensed Consolidated Statement of Cash Flows
for the nine months ended September 30, 2007
 100%
    
    
    
    
    
    FisherFisher
    
    Owned
    
    
    
    
    
    Communications,Communications,
    
    Guarantor
    
    
    
    
    
    Inc. and(in thousands)
    
    Inc.
    
    Subsidiaries
    
    Eliminations
    
    SubsidiariesNet cash provided by (used in) operating activities
    
    $
    (1,264
    )
    
    $
    3,531
    
    
    $
    1,067
    
    
    $
    3,334Cash flows from investing activitiesPurchase of investments available-for-sale
    
    
    
    
    
    
    (182
    )
    
    
    
    
    
    
    (182
    )Proceeds from sale of investments available-for-sale
    
    
    
    
    
    
    133
    
    
    
    
    
    
    
    133Decrease in restricted cash
    
    
    
    
    
    
    8,473
    
    
    
    
    
    
    
    8,473Proceeds from sale of radio station
    
    
    
    
    
    
    2,869
    
    
    
    
    
    
    
    2,869Deposit paid for purchase of television stations
    
    
    
    
    
    
    (2,750
    )
    
    
    
    
    
    
    (2,750
    )Purchase of television stations
    
    
    
    
    
    
    (4,931
    )
    
    
    
    
    
    
    (4,931
    )Purchase of online news service
    
    
    
    
    
    
    (1,482
    )
    
    
    
    
    
    
    (1,482
    )Proceeds from sale of property, plant and equipment
    
    
    
    
    
    
    1,250
    
    
    
    
    
    
    
    1,250Purchase of property, plant and equipment
    
    
    (277
    )
    
    
    (6,463
    )
    
    
    
    
    
    
    (6,740
    )Net cash used in investing activities
    
    
    (277
    )
    
    
    (3,083
    )
    
    
    
    
    
    
    (3,360
    )Cash flows from financing activitiesBorrowings under borrowing agreements
    
    
    6,000
    
    
    
    
    
    
    
    
    
    
    
    6,000Payments on borrowing agreements
    
    
    (6,000
    )
    
    
    
    
    
    
    
    
    
    
    (6,000
    )Payment of capital lease obligation
    
    
    
    
    
    
    (11
    )
    
    
    
    
    
    
    (11
    )Proceeds from exercise of stock options
    
    
    39
    
    
    
    
    
    
    
    
    
    
    
    39Net cash provided by (used in) financing activities
    
    
    39
    
    
    
    (11
    )
    
    
    
    
    
    
    28Net increase (decrease) in cash and cash equivalents
    
    
    (1,502
    )
    
    
    437
    
    
    
    1,067
    
    
    
    2Cash and cash equivalents, beginning of period
    
    
    8,544
    
    
    
    
    
    
    
    (1,067
    )
    
    
    7,477Cash and cash equivalents, end of period
    
    $
    7,042
    
    
    $
    437
    
    
    $
    
    
    
    $
    7,479
 20




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##### Table of Contents



Financial Information for Guarantors
Condensed Consolidated Statement of Cash Flows
for the nine months ended September 30, 2006
 100%
    
    
    
    
    
    FisherFisher
    
    Owned
    
    
    
    
    
    Communications,Communications,
    
    Guarantor
    
    
    
    
    
    Inc. and(in thousands)
    
    Inc.
    
    Subsidiaries
    
    Eliminations
    
    SubsidiariesNet cash provided by (used in) operating activities
    
    $
    (15,577
    )
    
    $
    23,840
    
    
    
    
    
    
    $
    8,263Cash flows from investing activitiesPayment of options for purchase of television stations
    
    
    
    
    
    
    (1,100
    )
    
    
    
    
    
    
    (1,100
    )Purchase of television stations
    
    
    
    
    
    
    (16,142
    )
    
    
    
    
    
    
    (16,142
    )Deposit paid for purchase of television stations
    
    
    
    
    
    
    (9,728
    )
    
    
    
    
    
    
    (9,728
    )Purchase of property, plant and equipment
    
    
    (169
    )
    
    
    (12,464
    )
    
    
    
    
    
    
    (12,633
    )Net cash used in investing activities
    
    
    (169
    )
    
    
    (39,434
    )
    
    
    
    
    
    
    (39,603
    )Cash flows from financing activitiesBorrowings under borrowing agreements
    
    
    15,000
    
    
    
    
    
    
    
    
    
    
    
    15,000Payments on borrowing agreements
    
    
    (2,000
    )
    
    
    
    
    
    
    
    
    
    
    (2,000
    )Excess tax benefit from exercise of stock options
    
    
    23
    
    
    
    
    
    
    
    
    
    
    
    23Proceeds from exercise of stock options
    
    
    546
    
    
    
    
    
    
    
    
    
    
    
    546Net cash provided by financing activities
    
    
    13,569
    
    
    
    
    
    
    
    
    
    
    
    13,569Net decrease in cash and cash equivalents
    
    
    (2,177
    )
    
    
    (15,594
    )
    
    
    
    
    
    
    (17,771
    )Cash and cash equivalents, beginning of period
    
    
    3,660
    
    
    
    15,962
    
    
    
    
    
    
    
    19,622Cash and cash equivalents, end of period
    
    $
    1,483
    
    
    $
    368
    
    
    $
    
    
    
    $
    1,851
 21




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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 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, 2006, which was filed with the Securities and Exchange Commission on March 14,
2007. 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
     22




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##### Table of Contents



Critical Accounting Policies
  23




---



##### Table of Contents



Income taxes. Accounting for Uncertainty in Income Taxes an interpretation of FASB Statement No. 109
  Consolidated Results of Operations
  24




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##### Table of Contents



Nine months
    
    
    
    
    
    
    
    
    
    
    Three monthsended September 30
    
    
    Variance
    
    
    ended September 30
    
    
    Variance(Dollars in thousands)
    
    2007
    
    
    2006
    
    
    $
    
    
    %
    
    
    2007
    
    
    2006
    
    
    $
    
    
    %RevenueTelevision
    
    $
    77,110
    
    
    $
    73,322
    
    
    $
    3,788
    
    
    
    5.2
    %
    
    $
    25,532
    
    
    $
    24,472
    
    
    $
    1,060
    
    
    
    4.3
    %Radio
    
    
    30,844
    
    
    
    29,986
    
    
    
    858
    
    
    
    2.9
    %
    
    
    12,493
    
    
    
    11,814
    
    
    
    679
    
    
    
    5.7
    %Fisher Plaza
    
    
    8,500
    
    
    
    6,662
    
    
    
    1,838
    
    
    
    27.6
    %
    
    
    2,811
    
    
    
    2,370
    
    
    
    441
    
    
    
    18.6
    %Corporate and eliminations
    
    
    (114
    )
    
    
    13
    
    
    
    (127
    )
    
    
    
    
    
    
    (38
    )
    
    
    56
    
    
    
    (94
    )Consolidated
    
    
    116,340
    
    
    
    109,983
    
    
    
    6,357
    
    
    
    5.8
    %
    
    
    40,798
    
    
    
    38,712
    
    
    
    2,086
    
    
    
    5.4
    %Direct operating costsTelevision
    
    
    30,353
    
    
    
    27,825
    
    
    
    2,528
    
    
    
    9.1
    %
    
    
    10,138
    
    
    
    9,708
    
    
    
    430
    
    
    
    4.4
    %Radio
    
    
    7,650
    
    
    
    7,579
    
    
    
    71
    
    
    
    0.9
    %
    
    
    2,417
    
    
    
    2,538
    
    
    
    (121
    )
    
    
    -4.8
    %Fisher Plaza
    
    
    2,507
    
    
    
    2,349
    
    
    
    158
    
    
    
    6.7
    %
    
    
    836
    
    
    
    920
    
    
    
    (84
    )
    
    
    -9.1
    %Corporate and eliminations
    
    
    1,410
    
    
    
    1,240
    
    
    
    170
    
    
    
    13.7
    %
    
    
    479
    
    
    
    429
    
    
    
    50
    
    
    
    11.7
    %Consolidated
    
    
    41,920
    
    
    
    38,993
    
    
    
    2,927
    
    
    
    7.5
    %
    
    
    13,870
    
    
    
    13,595
    
    
    
    275
    
    
    
    2.0
    %Selling, general and administrative expensesTelevision
    
    
    25,577
    
    
    
    22,838
    
    
    
    2,739
    
    
    
    12.0
    %
    
    
    8,353
    
    
    
    7,729
    
    
    
    624
    
    
    
    8.1
    %Radio
    
    
    12,521
    
    
    
    12,118
    
    
    
    403
    
    
    
    3.3
    %
    
    
    4,960
    
    
    
    4,360
    
    
    
    600
    
    
    
    13.8
    %Fisher Plaza
    
    
    311
    
    
    
    391
    
    
    
    (80
    )
    
    
    -20.5
    %
    
    
    104
    
    
    
    144
    
    
    
    (40
    )
    
    
    -27.8
    %Corporate and eliminations
    
    
    4,876
    
    
    
    4,792
    
    
    
    84
    
    
    
    1.8
    %
    
    
    1,635
    
    
    
    1,456
    
    
    
    179
    
    
    
    12.3
    %Consolidated
    
    
    43,285
    
    
    
    40,139
    
    
    
    3,146
    
    
    
    7.8
    %
    
    
    15,052
    
    
    
    13,689
    
    
    
    1,363
    
    
    
    10.0
    %Amortization of program rightsTelevision
    
    
    6,304
    
    
    
    6,168
    
    
    
    136
    
    
    
    2.2
    %
    
    
    2,030
    
    
    
    2,033
    
    
    
    (3
    )
    
    
    -0.1
    %Radio
    
    
    10,500
    
    
    
    10,250
    
    
    
    250
    
    
    
    2.4
    %
    
    
    5,340
    
    
    
    5,049
    
    
    
    291
    
    
    
    5.8
    %Consolidated
    
    
    16,804
    
    
    
    16,418
    
    
    
    386
    
    
    
    2.4
    %
    
    
    7,370
    
    
    
    7,082
    
    
    
    288
    
    
    
    4.1
    %Depreciation and amortizationTelevision
    
    
    5,257
    
    
    
    4,361
    
    
    
    896
    
    
    
    20.5
    %
    
    
    1,635
    
    
    
    1,426
    
    
    
    209
    
    
    
    14.7
    %Radio
    
    
    726
    
    
    
    649
    
    
    
    77
    
    
    
    11.9
    %
    
    
    253
    
    
    
    207
    
    
    
    46
    
    
    
    22.2
    %Fisher Plaza
    
    
    2,468
    
    
    
    2,321
    
    
    
    147
    
    
    
    6.3
    %
    
    
    852
    
    
    
    795
    
    
    
    57
    
    
    
    7.2
    %Corporate and eliminations
    
    
    217
    
    
    
    184
    
    
    
    33
    
    
    
    17.9
    %
    
    
    71
    
    
    
    60
    
    
    
    11
    
    
    
    18.3
    %Consolidated
    
    
    8,668
    
    
    
    7,515
    
    
    
    1,153
    
    
    
    15.3
    %
    
    
    2,811
    
    
    
    2,488
    
    
    
    323
    
    
    
    13.0
    %Income (loss) from operationsTelevision
    
    
    9,619
    
    
    
    12,130
    
    
    
    (2,511
    )
    
    
    
    
    
    
    3,376
    
    
    
    3,576
    
    
    
    (200
    )Radio
    
    
    (553
    )
    
    
    (610
    )
    
    
    57
    
    
    
    
    
    
    
    (477
    )
    
    
    (340
    )
    
    
    (137
    )Fisher Plaza
    
    
    3,214
    
    
    
    1,601
    
    
    
    1,613
    
    
    
    
    
    
    
    1,019
    
    
    
    511
    
    
    
    508Corporate and eliminations
    
    
    (6,617
    )
    
    
    (6,203
    )
    
    
    (414
    )
    
    
    
    
    
    
    (2,223
    )
    
    
    (1,889
    )
    
    
    (334
    )Consolidated
    
    
    5,663
    
    
    
    6,918
    
    
    
    (1,255
    )
    
    
    
    
    
    
    1,695
    
    
    
    1,858
    
    
    
    (163
    )Other income, net
    
    
    3,683
    
    
    
    2,814
    
    
    
    869
    
    
    
    
    
    
    
    1,387
    
    
    
    1,047
    
    
    
    340Interest expense, net
    
    
    (10,222
    )
    
    
    (10,396
    )
    
    
    174
    
    
    
    
    
    
    
    (3,318
    )
    
    
    (3,574
    )
    
    
    256Loss from continuing
operations before income taxes
    
    
    (876
    )
    
    
    (664
    )
    
    
    (212
    )
    
    
    
    
    
    
    (236
    )
    
    
    (669
    )
    
    
    433Provision for federal and state
income taxes
    
    
    294
    
    
    
    115
    
    
    
    179
    
    
    
    
    
    
    
    365
    
    
    
    115
    
    
    
    250Loss from continuing operations
    
    
    (1,170
    )
    
    
    (779
    )
    
    
    (391
    )
    
    
    
    
    
    
    (601
    )
    
    
    (784
    )
    
    
    183Income from discontinued
operations, net of income taxes
    
    
    1,648
    
    
    
    675
    
    
    
    973
    
    
    
    
    
    
    
    68
    
    
    
    113
    
    
    
    (45
    )Net income (loss)
    
    $
    478
    
    
    $
    (104
    )
    
    $
    582
    
    
    
    
    
    
    $
    (533
    )
    
    $
    (671
    )
    
    $
    138
 25




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##### Table of Contents



Comparison of Fiscal Nine and Three-Month Periods Ended September 30, 2007 and September 30, 2006
 Revenue
     Direct operating costs
      26




---



##### Table of Contents



Selling, general and administrative expenses
     Amortization of program rights
   Depreciation and amortization
  Other income, net
  Interest expense, net
  Provision (benefit) for federal and state income taxes
  27




---



##### Table of Contents



Income from discontinued operations, net of income taxes
  Liquidity and capital resources
         28




---



##### Table of Contents



Recent Accounting Pronouncements
 The Fair Value Option for Financial Assets and Financial Liabilities 
Including an amendment to FASB Statement No. 115
 Fair Value Measurements
 29




---



##### Table of Contents



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
  Interest Rate Exposure
  Marketable Securities Exposure
  
 ITEM 4. CONTROLS AND PROCEDURES
   30




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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
  
 Item 5. Other Information
  
 Item 6. Exhibits
  10.1
    
    Asset Purchase Agreement dated August 3, 2007 between Westwind Communications L.L.C.
and Fisher Broadcasting Company.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.
 31




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##### Table of Contents



SIGNATURES
  FISHER COMMUNICATIONS, INC.
                    (Registrant)Dated: November 8, 2007
    /s/ S. Mae Fujita NumataS. Mae Fujita NumataSenior Vice President
Chief Financial Officer and Corporate Secretary 32




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##### Table of Contents



EXHIBIT INDEX
 Exhibit No.
    
    Description10.1
    
    Asset Purchase Agreement dated August 3, 2007 between Westwind Communications L.L.C.
and Fisher Broadcasting Company.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.
 33