##### 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 September 30, 2008
 or
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from  to
 Commission File Number: 0-22439
 FISHER COMMUNICATIONS, INC.
  WASHINGTON
    
    91-0222175(State or Other Jurisdiction of 
Incorporation or Organization)
    
    (I.R.S. Employer
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
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ




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##### 



PART I
FINANCIAL INFORMATION
   1. Condensed Consolidated Statements of Operations: Three and nine months ended September 30, 2008 and 2007
    
    
    32. Condensed Consolidated Balance Sheets: September 30, 2008 and December 31, 2007
    
    
    43. Condensed Consolidated Statements of Cash Flows: Nine months ended September 30, 2008 and 2007
    
    
    54. Condensed Consolidated Statements of Comprehensive Income: Three and nine months ended September 30, 2008 and 2007
    
    
    65. Unaudited Notes to Condensed Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    24Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    32Item 4. Controls and Procedures
    
    
    32PART II
    
    
    33OTHER INFORMATION
    
    
    33Item 1. Legal Proceedings
    
    
    33Item 1A. Risk Factors
    
    
    33Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    33Item 3. Defaults Upon Senior Securities
    
    
    33Item 4. Submission of Matters to a Vote of Security Holders
    
    
    33Item 5. Other Information
    
    
    33Item 6. Exhibits
    
    
    33SIGNATURES
    
    
    34EXHIBIT INDEX
    
    
    35EX-31.1EX-31.2EX-32.1EX-32.2
  2




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##### Table of Contents



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)
    
    2008
    
    2007
    
    2008
    
    2007Revenue
    
    $
    124,958
    
    
    $
    116,340
    
    
    $
    41,945
    
    
    $
    40,798Costs and expensesDirect operating costs (exclusive of depreciation and amortization
of $7,728, $7,198, $2,568, and $2,312, respectively, and
amortization of program rights of $16,818, $16,804,
$7,357, and
$7,370, respectively, reported separately below)
    
    
    53,079
    
    
    
    46,387
    
    
    
    17,704
    
    
    
    15,305Selling, general and administrative expenses
    
    
    49,675
    
    
    
    38,818
    
    
    
    14,794
    
    
    
    13,617Amortization of program rights
    
    
    16,818
    
    
    
    16,804
    
    
    
    7,357
    
    
    
    7,370Depreciation and amortization
    
    
    9,352
    
    
    
    8,668
    
    
    
    3,099
    
    
    
    2,811128,924
    
    
    
    110,677
    
    
    
    42,954
    
    
    
    39,103Income (loss) from operations
    
    
    (3,966
    )
    
    
    5,663
    
    
    
    (1,009
    )
    
    
    1,695Other income, net
    
    
    155,800
    
    
    
    3,683
    
    
    
    50,044
    
    
    
    1,387Interest expense, net
    
    
    (10,343
    )
    
    
    (10,222
    )
    
    
    (3,441
    )
    
    
    (3,318
    )Income (loss) from continuing operations before income taxes
    
    
    141,491
    
    
    
    (876
    )
    
    
    45,594
    
    
    
    (236
    )Provision for federal and state income taxes
    
    
    49,141
    
    
    
    294
    
    
    
    15,859
    
    
    
    365Income (loss) from continuing operations
    
    
    92,350
    
    
    
    (1,170
    )
    
    
    29,735
    
    
    
    (601
    )Income from discontinued operations, net of income taxes
    
    
    33
    
    
    
    1,648
    
    
    
    40
    
    
    
    68Net income (loss)
    
    $
    92,383
    
    
    $
    478
    
    
    $
    29,775
    
    
    $
    (533
    )Income (loss) per share:From continuing operations
    
    $
    10.58
    
    
    $
    (0.14
    )
    
    $
    3.41
    
    
    $
    (0.07
    )From discontinued operations
    
    
    
    
    
    
    0.19
    
    
    
    
    
    
    
    0.01Net income (loss) per share
    
    $
    10.58
    
    
    $
    0.05
    
    
    $
    3.41
    
    
    $
    (0.06
    )Income (loss) per share assuming dilution:From continuing operations
    
    $
    10.58
    
    
    $
    (0.14
    )
    
    $
    3.41
    
    
    $
    (0.07
    )From discontinued operations
    
    
    
    
    
    
    0.19
    
    
    
    
    
    
    
    0.01Net income (loss) per share assuming dilution
    
    $
    10.58
    
    
    $
    0.05
    
    
    $
    3.41
    
    
    $
    (0.06
    )Weighted average shares outstanding
    
    
    8,731
    
    
    
    8,722
    
    
    
    8,733
    
    
    
    8,724Weighted average shares outstanding assuming dilution
    
    
    8,735
    
    
    
    8,722
    
    
    
    8,741
    
    
    
    8,724Dividends declared per share
    
    $
    3.50
    
    
    $
    
    
    
    $
    3.50
    
    
    $
    
  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)
    
    2008
    
    2007ASSETSCurrent AssetsCash and cash equivalents
    
    $
    19,167
    
    
    $
    6,510Short-term investments
    
    
    59,195Receivables, net
    
    
    29,719
    
    
    
    30,498Deferred income taxes
    
    
    785
    
    
    
    785Prepaid expenses and other assets
    
    
    2,828
    
    
    
    3,855Television and radio broadcast rights
    
    
    8,387
    
    
    
    5,934Assets held for sale
    
    
    43
    
    
    
    37Total current assets
    
    
    120,124
    
    
    
    47,619Restricted cash
    
    
    
    
    
    
    52,365Marketable securities, at market value
    
    
    899
    
    
    
    129,223Cash value of life insurance and retirement deposits
    
    
    17,476
    
    
    
    16,809Television and radio broadcast rights
    
    
    80
    
    
    
    7Goodwill
    
    
    52,294
    
    
    
    37,361Intangible assets
    
    
    78,820
    
    
    
    42,782Investment in equity investee
    
    
    2,684
    
    
    
    2,635Deferred financing fees and other assets
    
    
    4,803
    
    
    
    9,072Assets held for sale
    
    
    2,052
    
    
    
    2,053Property, plant and equipment, net
    
    
    148,235
    
    
    
    146,008Total Assets
    
    $
    427,467
    
    
    $
    485,934LIABILITIES AND STOCKHOLDERS EQUITYCurrent LiabilitiesTrade accounts payable
    
    $
    3,757
    
    
    $
    3,737Accrued payroll and related benefits
    
    
    4,969
    
    
    
    7,614Interest payable
    
    
    539
    
    
    
    3,773Television and radio broadcast rights payable
    
    
    8,366
    
    
    
    4,940Income taxes payable
    
    
    
    
    
    
    3,959Current portion of accrued retirement benefits
    
    
    1,230
    
    
    
    1,230Other current liabilities
    
    
    7,376
    
    
    
    4,218Liabilities of businesses held for sale
    
    
    59
    
    
    
    100Total current liabilities
    
    
    26,296
    
    
    
    29,571Long-term debt
    
    
    150,000
    
    
    
    150,000Accrued retirement benefits
    
    
    18,568
    
    
    
    18,552Deferred income taxes
    
    
    7,783
    
    
    
    45,274Other liabilities
    
    
    11,852
    
    
    
    9,140Commitments and ContingenciesStockholders EquityCommon stock, shares authorized 12,000,000, $1.25 par value;
issued and outstanding 8,733,200 as of September 30,
2008
and 8,725,516 as of December 31, 2007
    
    
    10,917
    
    
    
    10,907Capital in excess of par
    
    
    10,907
    
    
    
    10,220Accumulated other comprehensive income (loss), net of income taxes:Unrealized gain (loss) on marketable securities
    
    
    (56
    )
    
    
    82,818Accumulated loss
    
    
    (1,933
    )
    
    
    (1,958
    )Prior service cost
    
    
    (157
    )
    
    
    (181
    )Retained earnings
    
    
    193,290
    
    
    
    131,591Total Stockholders Equity
    
    
    212,968
    
    
    
    233,397Total Liabilities and Stockholders Equity
    
    $
    427,467
    
    
    $
    485,934
  4




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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)
    
    2008
    
    2007Cash flows from operating activitiesNet income
    
    $
    92,383
    
    
    $
    478Adjustments to reconcile net income to net cash provided by
(used in) operating activitiesDepreciation and amortization
    
    
    9,352
    
    
    
    8,668Deferred income taxes
    
    
    7,134
    
    
    
    (167
    )Dividends from equity investee
    
    
    
    
    
    
    150Amortization of deferred financing fees
    
    
    474
    
    
    
    474Amortization of program rights
    
    
    16,818
    
    
    
    16,804Payments for television and radio broadcast rights
    
    
    (15,849
    )
    
    
    (15,740
    )Gain on sale of marketable securities
    
    
    (152,610
    )
    
    
    Amortization of short-term investment discount
    
    
    (286
    )
    
    
    Net non-cash contract termination fee
    
    
    4,990
    
    
    
    Amortization of non-cash contract termination fee
    
    
    (898
    )
    
    
    (652
    )Gain on sale of radio station
    
    
    
    
    
    
    (1,491
    )Equity in operations of equity investees
    
    
    (50
    )
    
    
    42Stock-based compensation
    
    
    665
    
    
    
    514Other
    
    
    366
    
    
    
    40Change in operating assets and liabilitiesReceivables
    
    
    779
    
    
    
    (2,199
    )Prepaid expenses and other current assets
    
    
    815
    
    
    
    431Cash value of life insurance and retirement deposits
    
    
    (667
    )
    
    
    (607
    )Other assets
    
    
    1,042
    
    
    
    711Trade accounts payable, accrued payroll and related benefits, interest
payable, and other current liabilities
    
    
    (3,370
    )
    
    
    (4,235
    )Income taxes receivable and payable
    
    
    (3,959
    )
    
    
    (98
    )Accrued retirement benefits
    
    
    16
    
    
    
    (23
    )Other liabilities
    
    
    (704
    )
    
    
    234Net cash provided by
(used in) operating
activities
    
    
    (43,559
    )
    
    
    3,334Cash flows from investing activitiesPurchases of marketable securities
    
    
    (77
    )
    
    
    (182
    )Purchases of short-term investments
    
    
    (58,909
    )
    
    
    Proceeds from sales of marketable securities
    
    
    153,513
    
    
    
    133Deposits paid for purchase of television stations
    
    
    
    
    
    
    (2,750
    )Proceeds from sale of radio station
    
    
    
    
    
    
    2,869Purchase of television stations
    
    
    (52,365
    )
    
    
    (4,931
    )Decrease in restricted cash
    
    
    52,365
    
    
    
    8,473Purchase of online news service
    
    
    
    
    
    
    (1,482
    )Purchase of intangible assets
    
    
    (285
    )
    
    
    Proceeds from sale of property, plant & equipment
    
    
    
    
    
    
    1,250Purchase of property, plant and equipment
    
    
    (7,235
    )
    
    
    (6,740
    )Net cash provided by
(used in) investing
activities
    
    
    87,007
    
    
    
    (3,360
    )Cash flows from financing activitiesBorrowings under borrowing agreements
    
    
    21,000
    
    
    
    6,000Payments on borrowing agreements
    
    
    (21,000
    )
    
    
    (6,000
    )Payment of capital lease obligation
    
    
    (107
    )
    
    
    (11
    )Proceeds from exercise of stock options
    
    
    
    
    
    
    39Cash dividends paid
    
    
    (30,684
    )
    
    
    Net cash provided by
(used in) financing
activities
    
    
    (30,791
    )
    
    
    28Net increase in cash and cash equivalents
    
    
    12,657
    
    
    
    2Cash and cash equivalents, beginning of period
    
    
    6,510
    
    
    
    7,477Cash and cash equivalents, end of period
    
    $
    19,167
    
    
    $
    7,479
  5




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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)
    
    2008
    
    2007
    
    2008
    
    2007Net income (loss)
    
    $
    92,383
    
    
    $
    478
    
    
    $
    29,775
    
    
    $
    (533
    )Other comprehensive income (loss):Unrealized gain (loss) on marketable securities
    
    
    25,111
    
    
    
    (3,961
    )
    
    
    (1,380
    )
    
    
    (3,121
    )Effect of income taxes
    
    
    (8,789
    )
    
    
    1,386
    
    
    
    483
    
    
    
    1,092Accumulated loss
    
    
    40
    
    
    
    32
    
    
    
    13
    
    
    
    11Effect of income taxes
    
    
    (14
    )
    
    
    (11
    )
    
    
    (5
    )
    
    
    (4
    )Prior service cost
    
    
    36
    
    
    
    36
    
    
    
    12
    
    
    
    12Effect of income taxes
    
    
    (13
    )
    
    
    (12
    )
    
    
    (5
    )
    
    
    (4
    )Reclassification adjustment for gains included in net
income
    
    
    (152,610
    )
    
    
    (22
    )
    
    
    (48,999
    )
    
    
    (14
    )Effect of income taxes
    
    
    53,414
    
    
    
    8
    
    
    
    17,150
    
    
    
    5Other comprehensive loss
    
    
    (82,825
    )
    
    
    (2,544
    )
    
    
    (32,731
    )
    
    
    (2,023
    )Comprehensive income (loss)
    
    $
    9,558
    
    
    $
    (2,066
    )
    
    $
    (2,956
    )
    
    $
    (2,556
    )
  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
 Level 3
 7




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##### Table of Contents



The Hierarchy of Generally Accepted Accounting
Principles The Meaning of Present Fairly in
Conformity with Generally Accepted Accounting Principles
 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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Accounting for the Impairment or Disposal of Long-Lived Assets
  Nine months ended
    
    
    Three months endedSeptember 30
    
    
    September 302008
    
    
    2007
    
    
    2008
    
    
    2007Revenue
    
    $
    1,225
    
    
    $
    1,477
    
    
    $
    412
    
    
    $
    500Income from discontinued operations:Discontinued operating activities
    
    $
    51
    
    
    $
    242
    
    
    $
    61
    
    
    $
    105Gain on sale
    
    
    
    
    
    
    2,294
    
    
    
    
    
    
    
    51
    
    
    
    2,536
    
    
    
    61
    
    
    
    105Income tax
    
    
    (18
    )
    
    
    (888
    )
    
    
    (21
    )
    
    
    (37
    )$
    33
    
    
    $
    1,648
    
    
    $
    40
    
    
    $
    68
 10




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##### Table of Contents



September 30
    
    
    December 312008
    
    
    2007Goodwill, net
    
    $
    645
    
    
    $
    645Property, plant and equipment, net
    
    
    642
    
    
    
    643Intangible assets
    
    
    765
    
    
    
    765Other assets
    
    
    43
    
    
    
    37$
    2,095
    
    
    $
    2,090Liabilities of businesses held for sale
    
    $
    59
    
    
    $
    100
      11




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Nine months ended
    
    
    Three months endedSeptember 30
    
    
    September 302008
    
    
    2007
    
    
    2008
    
    
    2007Interest cost
    
    $
    824
    
    
    $
    798
    
    
    $
    274
    
    
    $
    266Amortization of loss
    
    
    45
    
    
    
    32
    
    
    
    15
    
    
    
    10Net periodic
pension cost
    
    $
    869
    
    
    $
    830
    
    
    $
    289
    
    
    $
    276
     Nine months
    
    
    Three monthsended September 30
    
    
    ended September 302008
    
    
    2007
    
    
    2008
    
    
    2007Income (loss) from continuing operations
    
    $
    92,350
    
    
    $
    (1,170
    )
    
    $
    29,735
    
    
    $
    (601
    )Income from discontinued operations, net of income taxes
    
    
    33
    
    
    
    1,648
    
    
    
    40
    
    
    
    68Net income (loss)
    
    $
    92,383
    
    
    $
    478
    
    
    $
    29,775
    
    
    $
    (533
    )Weighted average shares outstanding  basic
    
    
    8,731
    
    
    
    8,722
    
    
    
    8,733
    
    
    
    8,724Weighted effect of dilutive options and rights
    
    
    4
    
    
    
    
    
    
    
    8
    
    
    
    Weighted average shares outstanding assuming dilution
    
    
    8,735
    
    
    
    8,722
    
    
    
    8,741
    
    
    
    8,724Income (loss) per share:From continuing operations
    
    $
    10.58
    
    
    $
    (0.14
    )
    
    $
    3.41
    
    
    $
    (0.07
    )From discontinued operations
    
    
    
    
    
    
    0.19
    
    
    
    
    
    
    
    0.01Net income (loss) per share
    
    $
    10.58
    
    
    $
    0.05
    
    
    $
    3.41
    
    
    $
    (0.06
    )Income (loss) per share assuming dilution:From continuing operations
    
    $
    10.58
    
    
    $
    (0.14
    )
    
    $
    3.41
    
    
    $
    (0.07
    )From discontinued operations
    
    
    
    
    
    
    0.19
    
    
    
    
    
    
    
    0.01Net income (loss) per share assuming dilution
    
    $
    10.58
    
    
    $
    0.05
    
    
    $
    3.41
    
    
    $
    (0.06
    )
 12




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13




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##### Table of Contents



Nine months
    
    
    Three monthsended September 30
    
    
    ended September 302008
    
    
    2007
    
    
    2008
    
    
    2007Television
    
    $
    86,288
    
    
    $
    77,110
    
    
    $
    27,403
    
    
    $
    25,532Radio
    
    
    28,926
    
    
    
    30,844
    
    
    
    11,261
    
    
    
    12,493Fisher Plaza
    
    
    9,794
    
    
    
    8,500
    
    
    
    3,289
    
    
    
    2,811Corporate and
eliminations
    
    
    (50
    )
    
    
    (114
    )
    
    
    (8
    )
    
    
    (38
    )$
    124,958
    
    
    $
    116,340
    
    
    $
    41,945
    
    
    $
    40,798
   Nine months
    
    
    Three monthsended September 30
    
    
    ended September 302008
    
    
    2007
    
    
    2008
    
    
    2007Television
    
    $
    3,894
    
    
    $
    9,822
    
    
    $
    1,939
    
    
    $
    3,405Radio
    
    
    (3,545
    )
    
    
    (514
    )
    
    
    (1,756
    )
    
    
    (472
    )Fisher Plaza
    
    
    4,138
    
    
    
    3,215
    
    
    
    1,439
    
    
    
    1,019Corporate and
eliminations
    
    
    147,347
    
    
    
    (3,177
    )
    
    
    47,413
    
    
    
    (870
    )$
    151,834
    
    
    $
    9,346
    
    
    $
    49,035
    
    
    $
    3,082
   Nine months
    
    
    Three monthsended September 30
    
    
    ended September 302008
    
    
    2007
    
    
    2008
    
    
    2007Total segment income from continuing
operations before interest and income taxes
    
    $
    151,834
    
    
    $
    9,346
    
    
    $
    49,035
    
    
    $
    3,082Interest expense
    
    
    (10,343
    )
    
    
    (10,222
    )
    
    
    (3,441
    )
    
    
    (3,318
    )Consolidated income (loss) from continuing
operations before income taxes
    
    $
    141,491
    
    
    $
    (876
    )
    
    $
    45,594
    
    
    $
    (236
    )
 14




---



##### Table of Contents



Total assets
    
    September 30 
2008
    
    
    December 31
2007Television
    
    $
    189,991
    
    
    $
    136,341Radio
    
    
    19,911
    
    
    
    20,030Fisher Plaza
    
    
    113,730
    
    
    
    117,688Corporate and eliminations
    
    
    101,740
    
    
    
    209,785425,372
    
    
    
    483,844Assets held for sale
    
    
    2,095
    
    
    
    2,090$
    427,467
    
    
    $
    485,934
     15




---



##### Table of Contents



Financial Information for Guarantors
Condensed Consolidated Statement of Operations
for the nine months ended September 30, 2008
 100%
    
    
    
    
    
    FisherFisher
    
    Owned
    
    
    
    
    
    Communications,Communications,
    
    Guarantor
    
    
    
    
    
    Inc. and(in thousands)
    
    Inc.
    
    Subsidiaries
    
    Eliminations
    
    SubsidiariesRevenue
    
    $
    
    
    
    $
    124,965
    
    
    $
    (7
    )
    
    $
    124,958Costs and expensesDirect operating costs
    
    
    240
    
    
    
    52,693
    
    
    
    146
    
    
    
    53,079Selling, general and administrative expenses
    
    
    8,950
    
    
    
    40,878
    
    
    
    (153
    )
    
    
    49,675Amortization of program rights
    
    
    
    
    
    
    16,818
    
    
    
    
    
    
    
    16,818Depreciation and amortization
    
    
    740
    
    
    
    8,612
    
    
    
    
    
    
    
    9,3529,930
    
    
    
    119,001
    
    
    
    (7
    )
    
    
    128,924Income (loss) from operations
    
    
    (9,930
    )
    
    
    5,964
    
    
    
    
    
    
    
    (3,966
    )Other income, net
    
    
    155,698
    
    
    
    102
    
    
    
    
    
    
    
    155,800Equity in income of subsidiaries
    
    
    3,674
    
    
    
    
    
    
    
    (3,674
    )
    
    
    Interest expense, net
    
    
    (10,276
    )
    
    
    (67
    )
    
    
    
    
    
    
    (10,343
    )Income from continuing operations before income taxes
    
    
    139,166
    
    
    
    5,999
    
    
    
    (3,674
    )
    
    
    141,491Provision for federal and state income taxes
    
    
    46,783
    
    
    
    2,358
    
    
    
    
    
    
    
    49,141Income from continuing operations
    
    
    92,383
    
    
    
    3,641
    
    
    
    (3,674
    )
    
    
    92,350Income from discontinued operations, net of income taxes
    
    
    
    
    
    
    33
    
    
    
    
    
    
    
    33Net income
    
    $
    92,383
    
    
    $
    3,674
    
    
    $
    (3,674
    )
    
    $
    92,383
 16




---



##### 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
    
    
    
    
    
    
    44,977
    
    
    
    1,410
    
    
    
    46,387Selling, general and administrative expenses
    
    
    6,399
    
    
    
    33,943
    
    
    
    (1,524
    )
    
    
    38,818Amortization 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 from continuing operations
    
    
    478
    
    
    
    7,930
    
    
    
    (9,578
    )
    
    
    (1,170
    )Income from discontinued operations, net of income taxes
    
    
    
    
    
    
    1,648
    
    
    
    
    
    
    
    1,648Net income
    
    $
    478
    
    
    $
    9,578
    
    
    $
    (9,578
    )
    
    $
    478
 17




---



##### Table of Contents



Financial Information for Guarantors
Condensed Consolidated Statement of Operations
for the three months ended September 30, 2008
 100%
    
    
    
    
    
    FisherFisher
    
    Owned
    
    
    
    
    
    Communications,Communications,
    
    Guarantor
    
    
    
    
    
    Inc. and(in thousands)
    
    Inc.
    
    Subsidiaries
    
    Eliminations
    
    SubsidiariesRevenue
    
    $
    
    
    
    $
    41,946
    
    
    $
    (1
    )
    
    $
    41,945Costs and expensesDirect operating costs
    
    
    93
    
    
    
    17,562
    
    
    
    49
    
    
    
    17,704Selling, general and administrative expenses
    
    
    2,170
    
    
    
    12,674
    
    
    
    (50
    )
    
    
    14,794Amortization of program rights
    
    
    
    
    
    
    7,357
    
    
    
    
    
    
    
    7,357Depreciation and amortization
    
    
    277
    
    
    
    2,822
    
    
    
    
    
    
    
    3,0992,540
    
    
    
    40,415
    
    
    
    (1
    )
    
    
    42,954Income (loss) from operations
    
    
    (2,540
    )
    
    
    1,531
    
    
    
    
    
    
    
    (1,009
    )Other income, net
    
    
    49,986
    
    
    
    58
    
    
    
    
    
    
    
    50,044Equity in income of subsidiaries
    
    
    961
    
    
    
    
    
    
    
    (961
    )
    
    
    Interest expense, net
    
    
    (3,419
    )
    
    
    (22
    )
    
    
    
    
    
    
    (3,441
    )Income from continuing operations before income taxes
    
    
    44,988
    
    
    
    1,567
    
    
    
    (961
    )
    
    
    45,594Provision for federal and state income taxes
    
    
    15,213
    
    
    
    646
    
    
    
    
    
    
    
    15,859Income from continuing operations
    
    
    29,775
    
    
    
    921
    
    
    
    (961
    )
    
    
    29,735Income from discontinued operations, net of income taxes
    
    
    
    
    
    
    40
    
    
    
    
    
    
    
    40Net income
    
    $
    29,775
    
    
    $
    961
    
    
    $
    (961
    )
    
    $
    29,775
 18




---



##### 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
    
    
    
    
    
    
    14,826
    
    
    
    479
    
    
    
    15,305Selling, general and administrative costs
    
    
    2,152
    
    
    
    11,982
    
    
    
    (517
    )
    
    
    13,617Amortization 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
    )
 19




---



##### Table of Contents



Financial Information for Guarantors
Condensed Consolidated Balance Sheet
as of September 30, 2008
 100%
    
    
    
    
    
    FisherFisher
    
    Owned
    
    
    
    
    
    Communications,Communications,
    
    Guarantor
    
    
    
    
    
    Inc. and(in thousands)
    
    Inc.
    
    Subsidiaries
    
    Eliminations
    
    SubsidiariesASSETSCurrent AssetsCash and cash equivalents
    
    $
    18,482
    
    
    $
    685
    
    
    $
    
    
    
    $
    19,167Short-term investments
    
    
    59,195
    
    
    
    
    
    
    
    
    
    
    
    59,195Receivables, net
    
    
    
    
    
    
    29,719
    
    
    
    
    
    
    
    29,719Due from affiliate
    
    
    2,000
    
    
    
    
    
    
    
    (2,000
    )
    
    
    Deferred income taxes
    
    
    123
    
    
    
    662
    
    
    
    
    
    
    
    785Prepaid expenses and other assets
    
    
    445
    
    
    
    2,383
    
    
    
    
    
    
    
    2,828Television and radio broadcast rights
    
    
    
    
    
    
    8,387
    
    
    
    
    
    
    
    8,387Assets held for sale
    
    
    
    
    
    
    43
    
    
    
    
    
    
    
    43Total current assets
    
    
    80,245
    
    
    
    41,879
    
    
    
    (2,000
    )
    
    
    120,124Marketable securities, at market value
    
    
    
    
    
    
    899
    
    
    
    
    
    
    
    899Investment in consolidated subsidiaries
    
    
    274,391
    
    
    
    
    
    
    
    (274,391
    )
    
    
    Cash value of life insurance and retirement deposits
    
    
    17,476
    
    
    
    
    
    
    
    
    
    
    
    17,476Television and radio broadcast rights
    
    
    
    
    
    
    80
    
    
    
    
    
    
    
    80Goodwill
    
    
    
    
    
    
    52,294
    
    
    
    
    
    
    
    52,294Intangible assets
    
    
    
    
    
    
    78,820
    
    
    
    
    
    
    
    78,820Investment in equity investee
    
    
    
    
    
    
    2,684
    
    
    
    
    
    
    
    2,684Deferred income taxes
    
    
    8,877
    
    
    
    
    
    
    
    (8,877
    )
    
    
    Deferred financing fees and other assets
    
    
    3,430
    
    
    
    1,373
    
    
    
    
    
    
    
    4,803Assets held for sale
    
    
    
    
    
    
    2,052
    
    
    
    
    
    
    
    2,052Property, plant and equipment, net
    
    
    1,843
    
    
    
    146,392
    
    
    
    
    
    
    
    148,235Total Assets
    
    $
    386,262
    
    
    $
    326,473
    
    
    $
    (285,268
    )
    
    $
    427,467LIABILITIES AND STOCKHOLDERS EQUITYCurrent LiabilitiesTrade accounts payable
    
    $
    887
    
    
    $
    2,870
    
    
    $
    
    
    
    $
    3,757Due to affiliate
    
    
    
    
    
    
    2,000
    
    
    
    (2,000
    )
    
    
    Accrued payroll and related benefits
    
    
    476
    
    
    
    4,493
    
    
    
    
    
    
    
    4,969Interest payable
    
    
    539
    
    
    
    
    
    
    
    
    
    
    
    539Television and radio broadcast rights payable
    
    
    
    
    
    
    8,366
    
    
    
    
    
    
    
    8,366Current portion of accrued retirement benefits
    
    
    1,230
    
    
    
    
    
    
    
    
    
    
    
    1,230Other current liabilities
    
    
    1,594
    
    
    
    5,782
    
    
    
    
    
    
    
    7,376Liabilities of businesses held for sale
    
    
    
    
    
    
    59
    
    
    
    
    
    
    
    59Total current liabilities
    
    
    4,726
    
    
    
    23,570
    
    
    
    (2,000
    )
    
    
    26,296Long-term debt
    
    
    150,000
    
    
    
    
    
    
    
    
    
    
    
    150,000Accrued retirement benefits
    
    
    18,568
    
    
    
    
    
    
    
    
    
    
    
    18,568Deferred income taxes
    
    
    
    
    
    
    16,660
    
    
    
    (8,877
    )
    
    
    7,783Other liabilities
    
    
    
    
    
    
    11,852
    
    
    
    
    
    
    
    11,852Stockholders EquityCommon stock
    
    
    10,917
    
    
    
    1,131
    
    
    
    (1,131
    )
    
    
    10,917Capital in excess of par
    
    
    10,907
    
    
    
    164,234
    
    
    
    (164,234
    )
    
    
    10,907Accumulated other comprehensive income, net of income taxes:Unrealized gain on marketable securities
    
    
    (56
    )
    
    
    
    
    
    
    
    
    
    
    (56
    )Accumulated loss
    
    
    (1,933
    )
    
    
    
    
    
    
    
    
    
    
    (1,933
    )Prior service cost
    
    
    (157
    )
    
    
    
    
    
    
    
    
    
    
    (157
    )Retained earnings
    
    
    193,290
    
    
    
    109,026
    
    
    
    (109,026
    )
    
    
    193,290Total Stockholders Equity
    
    
    212,968
    
    
    
    274,391
    
    
    
    (274,391
    )
    
    
    212,968Total Liabilities and Stockholders Equity
    
    $
    386,262
    
    
    $
    326,473
    
    
    $
    (285,268
    )
    
    $
    427,467
 20




---



##### 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
 21




---



##### Table of Contents



Financial Information for Guarantors
Condensed Consolidated Statement of Cash Flows
for the nine months ended September 30, 2008
 100%
    
    
    
    
    
    FisherFisher
    
    Owned
    
    
    
    
    
    Communications,Communications,
    
    Guarantor
    
    
    
    
    
    Inc. and(in thousands)
    
    Inc.
    
    Subsidiaries
    
    Eliminations
    
    SubsidiariesNet cash provided by (used in) operating activities
    
    $
    (50,036
    )
    
    $
    6,477
    
    
    $
    
    
    
    $
    (43,559
    )Cash flows from investing activitiesPurchase of marketable securities
    
    
    
    
    
    
    (77
    )
    
    
    
    
    
    
    (77
    )Purchases of short-term investments
    
    
    (58,909
    )
    
    
    
    
    
    
    
    
    
    
    (58,909
    )Proceeds from sale of marketable
securities
    
    
    153,403
    
    
    
    110
    
    
    
    
    
    
    
    153,513Decrease in restricted cash
    
    
    52,365
    
    
    
    
    
    
    
    
    
    
    
    52,365Purchase of television stations
    
    
    (52,365
    )
    
    
    
    
    
    
    
    
    
    
    (52,365
    )Purchase of intangible assets
    
    
    
    
    
    
    (285
    )
    
    
    
    
    
    
    (285
    )Purchase of property, plant and
equipment
    
    
    (1,096
    )
    
    
    (6,139
    )
    
    
    
    
    
    
    (7,235
    )Net cash provided by (used in) investing activities
    
    
    93,398
    
    
    
    (6,391
    )
    
    
    
    
    
    
    87,007Cash flows from financing activitiesBorrowings under borrowing agreements
    
    
    21,000
    
    
    
    
    
    
    
    
    
    
    
    21,000Payments on borrowing agreements
    
    
    (21,000
    )
    
    
    
    
    
    
    
    
    
    
    (21,000
    )Payment of capital lease obligation
    
    
    
    
    
    
    (107
    )
    
    
    
    
    
    
    (107
    )Cash dividends paid
    
    
    (30,684
    )
    
    
    
    
    
    
    
    
    
    
    (30,684
    )Net cash used in financing activities
    
    
    (30,684
    )
    
    
    (107
    )
    
    
    
    
    
    
    (30,791
    )Net increase (decrease) in cash and cash equivalents
    
    
    12,678
    
    
    
    (21
    )
    
    
    
    
    
    
    12,657Cash and cash equivalents, beginning of period
    
    
    5,804
    
    
    
    706
    
    
    
    
    
    
    
    6,510Cash and cash equivalents, end of period
    
    $
    18,482
    
    
    $
    685
    
    
    $
    
    
    
    $
    19,167
 22




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##### 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 activitiesProceeds 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
    )Decrease in restricted cash
    
    
    
    
    
    
    8,473
    
    
    
    
    
    
    
    8,473Proceeds from sale of investments
available-for-sale
    
    
    
    
    
    
    133
    
    
    
    
    
    
    
    133Purchases of investments available-for-sale
    
    
    
    
    
    
    (182
    )
    
    
    
    
    
    
    (182
    )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
 23




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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
     24




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##### Table of Contents



Significant Developments
  Sale of Safeco Corporation Shares
   Special Dividend
 Termination of Seattle Mariners Radio Rights Agreement
 Termination of National Advertising Representation Agreement
 Purchase of Bakersfield, California Television Stations
 Option to Purchase Television Stations
 25




---



##### Table of Contents



Sale of Radio Stations
 Critical Accounting Policies
   Consolidated Results of Operations
  26




---



##### Table of Contents



Nine months
    
    
    
    
    
    
    
    
    
    
    Three months(Dollars in thousands)
    
    ended September 30
    
    
    Variance
    
    
    ended September 30
    
    
    Variance(Unaudited)
    
    2008
    
    
    2007
    
    
    $
    
    
    %
    
    
    2008
    
    
    2007
    
    
    $
    
    
    %RevenueTelevision
    
    $
    86,288
    
    
    $
    77,110
    
    
    $
    9,178
    
    
    
    11.9
    %
    
    $
    27,403
    
    
    $
    25,532
    
    
    $
    1,871
    
    
    
    7.3
    %Radio
    
    
    28,926
    
    
    
    30,844
    
    
    
    (1,918
    )
    
    
    -6.2
    %
    
    
    11,261
    
    
    
    12,493
    
    
    
    (1,232
    )
    
    
    -9.9
    %Fisher Plaza
    
    
    9,794
    
    
    
    8,500
    
    
    
    1,294
    
    
    
    15.2
    %
    
    
    3,289
    
    
    
    2,811
    
    
    
    478
    
    
    
    17.0
    %Corporate and eliminations
    
    
    (50
    )
    
    
    (114
    )
    
    
    64
    
    
    
    
    
    
    
    (8
    )
    
    
    (38
    )
    
    
    30Consolidated
    
    
    124,958
    
    
    
    116,340
    
    
    
    8,618
    
    
    
    7.4
    %
    
    
    41,945
    
    
    
    40,798
    
    
    
    1,147
    
    
    
    2.8
    %Direct Operating CostsTelevision
    
    
    39,885
    
    
    
    34,245
    
    
    
    5,640
    
    
    
    16.5
    %
    
    
    13,383
    
    
    
    11,397
    
    
    
    1,986
    
    
    
    17.4
    %Radio
    
    
    8,910
    
    
    
    8,225
    
    
    
    685
    
    
    
    8.3
    %
    
    
    2,824
    
    
    
    2,593
    
    
    
    231
    
    
    
    8.9
    %Fisher Plaza
    
    
    2,758
    
    
    
    2,507
    
    
    
    251
    
    
    
    10.0
    %
    
    
    984
    
    
    
    836
    
    
    
    148
    
    
    
    17.7
    %Corporate and eliminations
    
    
    1,526
    
    
    
    1,410
    
    
    
    116
    
    
    
    8.2
    %
    
    
    513
    
    
    
    479
    
    
    
    34
    
    
    
    7.1
    %Consolidated
    
    
    53,079
    
    
    
    46,387
    
    
    
    6,692
    
    
    
    14.4
    %
    
    
    17,704
    
    
    
    15,305
    
    
    
    2,399
    
    
    
    15.7
    %Selling, general and administrative expensesTelevision
    
    
    30,503
    
    
    
    21,685
    
    
    
    8,818
    
    
    
    40.7
    %
    
    
    8,043
    
    
    
    7,094
    
    
    
    949
    
    
    
    13.4
    %Radio
    
    
    12,173
    
    
    
    11,946
    
    
    
    227
    
    
    
    1.9
    %
    
    
    4,735
    
    
    
    4,784
    
    
    
    (49
    )
    
    
    -1.0
    %Fisher Plaza
    
    
    526
    
    
    
    311
    
    
    
    215
    
    
    
    69.1
    %
    
    
    126
    
    
    
    104
    
    
    
    22
    
    
    
    21.2
    %Corporate and eliminations
    
    
    6,473
    
    
    
    4,876
    
    
    
    1,597
    
    
    
    32.8
    %
    
    
    1,890
    
    
    
    1,635
    
    
    
    255
    
    
    
    15.6
    %Consolidated
    
    
    49,675
    
    
    
    38,818
    
    
    
    10,857
    
    
    
    28.0
    %
    
    
    14,794
    
    
    
    13,617
    
    
    
    1,177
    
    
    
    8.6
    %Amortization of program rightsTelevision
    
    
    6,068
    
    
    
    6,304
    
    
    
    (236
    )
    
    
    -3.7
    %
    
    
    2,089
    
    
    
    2,030
    
    
    
    59
    
    
    
    2.9
    %Radio
    
    
    10,750
    
    
    
    10,500
    
    
    
    250
    
    
    
    2.4
    %
    
    
    5,268
    
    
    
    5,340
    
    
    
    (72
    )
    
    
    -1.3
    %Consolidated
    
    
    16,818
    
    
    
    16,804
    
    
    
    14
    
    
    
    0.1
    %
    
    
    7,357
    
    
    
    7,370
    
    
    
    (13
    )
    
    
    -0.2
    %Depreciation and amortizationTelevision
    
    
    6,055
    
    
    
    5,257
    
    
    
    798
    
    
    
    15.2
    %
    
    
    2,039
    
    
    
    1,635
    
    
    
    404
    
    
    
    24.7
    %Radio
    
    
    642
    
    
    
    726
    
    
    
    (84
    )
    
    
    -11.6
    %
    
    
    193
    
    
    
    253
    
    
    
    (60
    )
    
    
    -23.7
    %Fisher Plaza
    
    
    2,372
    
    
    
    2,468
    
    
    
    (96
    )
    
    
    -3.9
    %
    
    
    740
    
    
    
    852
    
    
    
    (112
    )
    
    
    -13.1
    %Corporate and eliminations
    
    
    283
    
    
    
    217
    
    
    
    66
    
    
    
    30.4
    %
    
    
    127
    
    
    
    71
    
    
    
    56
    
    
    
    78.9
    %Consolidated
    
    
    9,352
    
    
    
    8,668
    
    
    
    684
    
    
    
    7.9
    %
    
    
    3,099
    
    
    
    2,811
    
    
    
    288
    
    
    
    10.2
    %Income (loss) from operationsTelevision
    
    
    3,777
    
    
    
    9,619
    
    
    
    (5,842
    )
    
    
    
    
    
    
    1,849
    
    
    
    3,376
    
    
    
    (1,527
    )Radio
    
    
    (3,549
    )
    
    
    (553
    )
    
    
    (2,996
    )
    
    
    
    
    
    
    (1,759
    )
    
    
    (477
    )
    
    
    (1,282
    )Fisher Plaza
    
    
    4,138
    
    
    
    3,214
    
    
    
    924
    
    
    
    
    
    
    
    1,439
    
    
    
    1,019
    
    
    
    420Corporate and eliminations
    
    
    (8,332
    )
    
    
    (6,617
    )
    
    
    (1,715
    )
    
    
    
    
    
    
    (2,538
    )
    
    
    (2,223
    )
    
    
    (315
    )Consolidated
    
    
    (3,966
    )
    
    
    5,663
    
    
    
    (9,629
    )
    
    
    
    
    
    
    (1,009
    )
    
    
    1,695
    
    
    
    (2,704
    )Other income, net
    
    
    155,800
    
    
    
    3,683
    
    
    
    152,117
    
    
    
    
    
    
    
    50,044
    
    
    
    1,387
    
    
    
    48,657Interest expense, net
    
    
    (10,343
    )
    
    
    (10,222
    )
    
    
    (121
    )
    
    
    
    
    
    
    (3,441
    )
    
    
    (3,318
    )
    
    
    (123
    )Income (loss) from continuing
operations before income taxes
    
    
    141,491
    
    
    
    (876
    )
    
    
    142,367
    
    
    
    
    
    
    
    45,594
    
    
    
    (236
    )
    
    
    45,830Provision for federal and state
income taxes
    
    
    49,141
    
    
    
    294
    
    
    
    48,847
    
    
    
    
    
    
    
    15,859
    
    
    
    365
    
    
    
    15,494Income (loss) from continuing operations
    
    
    92,350
    
    
    
    (1,170
    )
    
    
    93,520
    
    
    
    
    
    
    
    29,735
    
    
    
    (601
    )
    
    
    30,336Income from discontinued
operations, net of income taxes
    
    
    33
    
    
    
    1,648
    
    
    
    (1,615
    )
    
    
    
    
    
    
    40
    
    
    
    68
    
    
    
    (28
    )Net income (loss)
    
    $
    92,383
    
    
    $
    478
    
    
    $
    91,905
    
    
    
    
    
    
    $
    29,775
    
    
    $
    (533
    )
    
    $
    30,308
 Reclassifications
 Selling, general and
administrative expenses, Direct Operating Costs.
 27




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##### Table of Contents



Comparison of Nine and Three-Month Periods Ended September 30, 2008 and September 30, 2007
 Revenue
    Direct operating costs
      28




---



##### Table of Contents



Selling, general and administrative expenses
      Amortization of program rights
   Depreciation and amortization
    29




---



##### Table of Contents



Other income, net
  Interest expense, net
  Provision for federal and state income taxes
  Income from discontinued operations, net of income taxes
  Liquidity and capital resources
    30




---



##### Table of Contents



Summary of Cash Flows
    Description of Indebtedness
   Recent Accounting Pronouncements
  31




---



##### 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
  
 ITEM 5. OTHER INFORMATION
  
 ITEM 6. EXHIBITS
 10.1*+
    
    Form of Option Agreement under the Fisher Communications, Inc. Amended and Restated 2008
Equity Incentive Plan (incorporated by reference to Exhibit 10.3 to Fisher Communications,
Inc.s Quarterly Report on Form 10-Q filed on August 8, 2008 (File No. 000-22439)).10.2*+
    
    Form of Restricted Stock Unit under the Fisher Communications, Inc. Amended and Restated
2008 Equity Incentive Plan (incorporated by reference to Exhibit 10.4 to Fisher
Communications, Inc.s Quarterly Report on Form 10-Q filed on August 8, 2008 (File No.
000-22439)).10.3*+
    
    Terms of the Equity Grant Program for Nonemployee Directors under the Fisher
Communications, Inc. Amended and Restated 2008 Equity Incentive Plan (incorporated by
reference to Exhibit 10.5 to Fisher Communications, Inc.s Quarterly Report on Form 10-Q
filed on August 8, 2008 (File No. 000-22439)).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. 33




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##### Table of Contents



SIGNATURES
  FISHER COMMUNICATIONS, INC.Date: November 10, 2008
    /s/ Joseph L. LovejoyJoseph L. LovejoySenior Vice President and
Chief Financial Officer
(Signing on behalf of the registrant and as Principal
Financial Officer) 34




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##### Table of Contents



EXHIBIT INDEX
 Exhibit No.
    
    Description10.1*+
    
    Form of Option Agreement under the Fisher Communications, Inc. Amended and Restated 2008
Equity Incentive Plan (incorporated by reference to Exhibit 10.3 to Fisher Communications,
Inc.s Quarterly Report on Form 10-Q filed on August 8, 2008 (File No. 000-22439)).10.2*+
    
    Form of Restricted Stock Unit under the Fisher Communications, Inc. Amended and Restated
2008 Equity Incentive Plan (incorporated by reference to Exhibit 10.4 to Fisher
Communications, Inc.s Quarterly Report on Form 10-Q filed on August 8, 2008 (File No.
000-22439)).10.3*+
    
    Terms of the Equity Grant Program for Nonemployee Directors under the Fisher
Communications, Inc. Amended and Restated 2008 Equity Incentive Plan (incorporated by
reference to Exhibit 10.5 to Fisher Communications, Inc.s Quarterly Report on Form 10-Q
filed on August 8, 2008 (File No. 000-22439)).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. 35