##### Table of Contents





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-Q



|x | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended March 31, 2011

or



| ̈ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from  to

Commission File Number: 0-22439





FISHER COMMUNICATIONS, INC.

(Exact Name of Registrant as Specified in Its Charter)







|                                                              |  |                                       
|------------------------------------------------------------- |  | --------------------------------------
|WASHINGTON                                                    |  | 91-0222175                            
|(State or Other Jurisdiction ofIncorporation or Organization) |  | (I.R.S. EmployerIdentification Number)

140 Fourth Ave. N., Suite 500

Seattle, Washington 98109

(Address of Principal Executive Offices) (Zip Code)

(206) 404-7000

(Registrants Telephone Number, Including Area Code)





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days.    Yes  x    No   ̈

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files).    Yes   ̈    No   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.



|                        |  |                                                  |  |                           |  |                   |  |  
|----------------------- |  | ------------------------------------------------ |  | ------------------------- |  | ----------------- |  | -
|Large accelerated filer |  |  ̈                                                |  |                           |  | Accelerated filer |  | x
|Non-accelerated filer   |  |  ̈  (Do not check if a smaller reporting company) |  | Smaller reporting company |  |  ̈                

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).    Yes   ̈    No  x

Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date:

Common Stock, $1.25 par value, outstanding as of May 5, 2011: 8,823,830









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##### Table of Contents

PART I

FINANCIAL INFORMATION



|                                                                                                                               |  |                                                                                                                |    |  |    | 
|------------------------------------------------------------------------------------------------------------------------------ |  | -------------------------------------------------------------------------------------------------------------- | -- |  | -- | 
|Item 1.                                                                                                                        |  | Financial Statements                                                                                           |    |  |    | 
|                                                                                                                               | 
|The following Condensed Consolidated Financial Statements are presented for Fisher Communications, Inc., and its
subsidiaries. |  |                                                                                                                |    | 
|                                                                                                                               |  |                                                                                                               
|1.                                                                                                                             |  | Condensed Consolidated Statements of Operations (unaudited):Three months ended March 31, 2011 and 2010         |    |  | 3  | 
|                                                                                                                               |  |                                                                                                               
|2.                                                                                                                             |  | Condensed Consolidated Balance Sheets (unaudited):March 31, 2011 and December 31, 2010                         |    |  | 4  | 
|                                                                                                                               |  |                                                                                                               
|3.                                                                                                                             |  | Condensed Consolidated Statements of Cash Flows (unaudited):Three months ended March 31, 2011 and 2010         |    |  | 5  | 
|                                                                                                                               |  |                                                                                                               
|4.                                                                                                                             |  | Condensed Consolidated Statements of Comprehensive Loss (unaudited):Three months ended March 31, 2011 and 2010 |    |  | 6  | 
|                                                                                                                               |  |                                                                                                               
|5.                                                                                                                             |  | Notes to Condensed Consolidated Financial Statements (unaudited)                                               |    |  | 7  | 
|                                                                                                                               |  |                                                                                                               
|Item 2.                                                                                                                        |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                          |    |  | 18 | 
|                                                                                                                               |  |                                                                                                               
|Item 3.                                                                                                                        |  | Quantitative and Qualitative Disclosures About Market Risk                                                     |    |  | 26 | 
|                                                                                                                               |  |                                                                                                               
|Item 4.                                                                                                                        |  | Controls and Procedures                                                                                        |    |  | 26 | 
|                                                                                                                               | 
|PART II                                                                                                                        |  |                                                                                                                |    | 
|OTHER INFORMATION                                                                                                              |  |                                                                                                                |    | 
|                                                                                                                               |  |                                                                                                               
|Item 1.                                                                                                                        |  | Legal Proceedings                                                                                              |    |  | 27 | 
|                                                                                                                               |  |                                                                                                               
|Item 1A.                                                                                                                       |  | Risk Factors                                                                                                   |    |  | 27 | 
|                                                                                                                               |  |                                                                                                               
|Item 2.                                                                                                                        |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                    |    |  | 27 | 
|                                                                                                                               |  |                                                                                                               
|Item 3.                                                                                                                        |  | Defaults Upon Senior Securities                                                                                |    |  | 27 | 
|                                                                                                                               |  |                                                                                                               
|Item 4.                                                                                                                        |  | (Removed and Reserved)                                                                                         |    |  | 27 | 
|                                                                                                                               |  |                                                                                                               
|Item 5.                                                                                                                        |  | Other Information                                                                                              |    |  | 27 | 
|                                                                                                                               |  |                                                                                                               
|Item 6.                                                                                                                        |  | Exhibits                                                                                                       |    |  | 28 | 
|                                                                                                                               | 
|SIGNATURES                                                                                                                     |  |                                                                                                                | 29 | 
|                                                                                                                               | 
|EXHIBIT INDEX                                                                                                                  |  |                                                                                                                | 30 | 



2



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##### Table of Contents

Fisher Communications, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)



|                                                        |  |                              |        |   |      |   |        |  
|------------------------------------------------------- |  | ---------------------------- | ------ | - | ---- | - | ------ | -
|                                                        |  | Three months ended March 31, |       
|(in thousands, except per-share amounts)                |  | 2011                         |        |   | 2010 |  
|Revenue                                                 |  | $                            | 37,912 |   |      | $ | 35,341 |  
|                                                        |  |                              |        |   |      |   |        |  
|Operating expenses                                      |  |                              |        |   |      |   |        |  
|Direct operating costs                                  |  |                              | 17,757 |   |      |   | 17,017 |  
|Selling, general and administrative expenses            |  |                              | 15,026 |   |      |   | 13,546 |  
|Amortization of broadcast rights                        |  |                              | 2,970  |   |      |   | 2,970  |  
|Depreciation and amortization                           |  |                              | 2,669  |   |      |   | 3,650  |  
|Plaza fire reimbursements, net                          |  |                              | (78    | ) |      |   | (91    | )
|Gain on asset exchange, net                             |  |                              |       |   |      |   | (940   | )
|                                                        |  |                              |        |   |      |   |        |  
|Total operating expenses                                |  |                              | 38,344 |   |      |   | 36,152 |  
|                                                        |  |                              |        |   |      |   |        |  
|Loss from operations                                    |  |                              | (432   | ) |      |   | (811   | )
|Loss on extinguishment of senior notes, net             |  |                              | (110   | ) |      |   |       |  
|Other income, net                                       |  |                              | 80     |   |      |   | 57     |  
|Interest expense                                        |  |                              | (2,247 | ) |      |   | (2,672 | )
|                                                        |  |                              |        |   |      |   |        |  
|Loss before income taxes                                |  |                              | (2,709 | ) |      |   | (3,426 | )
|Benefit for income taxes                                |  |                              | (982   | ) |      |   | (1,247 | )
|                                                        |  |                              |        |   |      |   |        |  
|Net loss                                                |  | $                            | (1,727 | ) |      | $ | (2,179 | )
|                                                        |  |                              |        |   |      |   |        |  
|Net loss per share (basic and diluted)                  |  | $                            | (0.20  | ) |      | $ | (0.25  | )
|                                                        |  |                              |        |   |      |   |        |  
|Weighted average shares outstanding (basic and diluted) |  |                              | 8,809  |   |      |   | 8,786  |  
|                                                        |  |                              |        |   |      |   |        |  

See accompanying notes to condensed consolidated financial statements.



3



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##### Table of Contents

Fisher Communications, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)



|                                                                                                                                                                  |  |               |         |   |                  |   |         |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ------- | - | ---------------- | - | ------- | -
|(in thousands, except share and per-share amounts)                                                                                                                |  | March 31,2011 |         |   | December 31,2010 |  
|ASSETS                                                                                                                                                            |  |               |         |   |                  |   |         |  
|Current Assets                                                                                                                                                    |  |               |         |   |                  |   |         |  
|Cash and cash equivalents                                                                                                                                         |  | $             | 50,292  |   |                  | $ | 52,945  |  
|Receivables, net                                                                                                                                                  |  |               | 27,903  |   |                  |   | 30,807  |  
|Income taxes receivable                                                                                                                                           |  |               | 1,624   |   |                  |   | 1,353   |  
|Deferred income taxes, net                                                                                                                                        |  |               | 1,649   |   |                  |   | 1,649   |  
|Prepaid expenses and other                                                                                                                                        |  |               | 3,546   |   |                  |   | 2,863   |  
|Cash surrender value of annuity contracts                                                                                                                         |  |               |        |   |                  |   | 2,397   |  
|Television broadcast rights                                                                                                                                       |  |               | 5,040   |   |                  |   | 7,855   |  
|                                                                                                                                                                  |  |               |         |   |                  |   |         |  
|Total current assets                                                                                                                                              |  |               | 90,054  |   |                  |   | 99,869  |  
|Cash surrender value of life insurance and annuity contracts                                                                                                      |  |               | 16,682  |   |                  |   | 16,499  |  
|Goodwill, net                                                                                                                                                     |  |               | 13,293  |   |                  |   | 13,293  |  
|Intangible assets, net                                                                                                                                            |  |               | 40,484  |   |                  |   | 40,543  |  
|Other assets                                                                                                                                                      |  |               | 7,229   |   |                  |   | 7,376   |  
|Property, plant and equipment, net                                                                                                                                |  |               | 141,411 |   |                  |   | 143,312 |  
|                                                                                                                                                                  |  |               |         |   |                  |   |         |  
|Total Assets                                                                                                                                                      |  | $             | 309,153 |   |                  | $ | 320,892 |  
|                                                                                                                                                                  |  |               |         |   |                  |   |         |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                              |  |               |         |   |                  |   |         |  
|Current Liabilities                                                                                                                                               |  |               |         |   |                  |   |         |  
|Accounts payable                                                                                                                                                  |  | $             | 3,382   |   |                  | $ | 4,044   |  
|Accrued payroll and related benefits                                                                                                                              |  |               | 6,079   |   |                  |   | 7,896   |  
|Interest payable                                                                                                                                                  |  |               | 355     |   |                  |   | 2,552   |  
|Television broadcast rights payable                                                                                                                               |  |               | 4,815   |   |                  |   | 7,849   |  
|Current portion of accrued retirement benefits                                                                                                                    |  |               | 1,117   |   |                  |   | 1,117   |  
|Other current liabilities                                                                                                                                         |  |               | 5,215   |   |                  |   | 4,388   |  
|                                                                                                                                                                  |  |               |         |   |                  |   |         |  
|Total current liabilities                                                                                                                                         |  |               | 20,963  |   |                  |   | 27,846  |  
|Long-term debt                                                                                                                                                    |  |               | 98,830  |   |                  |   | 101,440 |  
|Accrued retirement benefits                                                                                                                                       |  |               | 18,981  |   |                  |   | 18,982  |  
|Deferred income taxes, net                                                                                                                                        |  |               | 428     |   |                  |   | 417     |  
|Other liabilities                                                                                                                                                 |  |               | 6,409   |   |                  |   | 6,981   |  
|                                                                                                                                                                  |  |               |         |   |                  |   |         |  
|Total liabilities                                                                                                                                                 |  |               | 145,611 |   |                  |   | 155,666 |  
|                                                                                                                                                                  |  |               |         |   |                  |   |         |  
|Commitments and Contingencies (Note 9)                                                                                                                            |  |               |         |   |                  |   |         |  
|Stockholders Equity                                                                                                                                              |  |               |         |   |                  |   |         |  
|Common stock, shares authorized 12,000,000, $1.25 par value; 8,823,830 and 8,790,399 issued and outstanding at March 31,
2011 and December 31, 2010, respectively |  |               | 11,030  |   |                  |   | 10,988  |  
|Capital in excess of par                                                                                                                                          |  |               | 13,254  |   |                  |   | 13,273  |  
|Accumulated other comprehensive income (loss), net of income taxes:                                                                                               |  |               |         |   |                  |   |         |  
|Accumulated loss                                                                                                                                                  |  |               | (2,166  | ) |                  |   | (2,176  | )
|Prior service cost                                                                                                                                                |  |               | (90     | ) |                  |   | (100    | )
|Retained earnings                                                                                                                                                 |  |               | 141,514 |   |                  |   | 143,241 |  
|                                                                                                                                                                  |  |               |         |   |                  |   |         |  
|Total Stockholders Equity                                                                                                                                        |  |               | 163,542 |   |                  |   | 165,226 |  
|                                                                                                                                                                  |  |               |         |   |                  |   |         |  
|Total Liabilities and Stockholders Equity                                                                                                                        |  | $             | 309,153 |   |                  | $ | 320,892 |  
|                                                                                                                                                                  |  |               |         |   |                  |   |         |  

See accompanying notes to condensed consolidated financial statements.



4



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##### Table of Contents

Fisher Communications, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)



|                                                                                     |  |                              |        |   |      |   |        |  
|------------------------------------------------------------------------------------ |  | ---------------------------- | ------ | - | ---- | - | ------ | -
|                                                                                     |  | Three months ended March 31, |       
|(in thousands)                                                                       |  | 2011                         |        |   | 2010 |  
|Operating activities                                                                 |  |                              |        |   |      |   |        |  
|Net loss                                                                             |  | $                            | (1,727 | ) |      | $ | (2,179 | )
|Adjustments to reconcile net loss to net cash provided by operating activities       |  |                              |        |   |      |   |        |  
|Depreciation and amortization                                                        |  |                              | 2,669  |   |      |   | 3,650  |  
|Deferred income taxes                                                                |  |                              | 10     |   |      |   | 5      |  
|Amortization of deferred financing fees                                              |  |                              | 91     |   |      |   | 111    |  
|Amortization of broadcast rights                                                     |  |                              | 2,970  |   |      |   | 2,970  |  
|Payments for broadcast rights                                                        |  |                              | (3,193 | ) |      |   | (3,050 | )
|Gain on exchange of assets, net                                                      |  |                              |       |   |      |   | (940   | )
|Loss on extinguishment of senior notes, net                                          |  |                              | 110    |   |      |   |       |  
|Loss on disposal of property, plant and equipment                                    |  |                              | 34     |   |      |   | 161    |  
|Amortization of non-cash contract termination fee                                    |  |                              | (365   | ) |      |   | (365   | )
|Loss in operations of equity investees                                               |  |                              | 50     |   |      |   |       |  
|Stock-based compensation                                                             |  |                              | 300    |   |      |   | 232    |  
|Change in operating assets and liabilities, net                                      |  |                              |        |   |      |   |        |  
|Receivables                                                                          |  |                              | 2,904  |   |      |   | 2,191  |  
|Prepaid expenses and other                                                           |  |                              | (682   | ) |      |   | 1,886  |  
|Cash surrender value of life insurance and annuity contracts                         |  |                              | 2,214  |   |      |   | (200   | )
|Other assets                                                                         |  |                              | (1     | ) |      |   | 90     |  
|Accounts payable, accrued payroll and related benefits and other current liabilities |  |                              | (1,675 | ) |      |   | 2,979  |  
|Interest payable                                                                     |  |                              | (2,197 | ) |      |   | (2,719 | )
|Income taxes receivable and payable                                                  |  |                              | (272   | ) |      |   | (1,190 | )
|Accrued retirement benefits                                                          |  |                              | 18     |   |      |   | 16     |  
|Other liabilities                                                                    |  |                              | (158   | ) |      |   | (140   | )
|                                                                                     |  |                              |        |   |      |   |        |  
|Net cash provided by operating activities                                            |  |                              | 1,100  |   |      |   | 3,508  |  
|                                                                                     |  |                              |        |   |      |   |        |  
|Investing activities                                                                 |  |                              |        |   |      |   |        |  
|Contribution to equity investee                                                      |  |                              | (4     | ) |      |   |       |  
|Net cash in consolidation of equity investee                                         |  |                              |       |   |      |   | 75     |  
|Purchases of property, plant and equipment                                           |  |                              | (743   | ) |      |   | (3,259 | )
|                                                                                     |  |                              |        |   |      |   |        |  
|Net cash used in investing activities                                                |  |                              | (747   | ) |      |   | (3,184 | )
|                                                                                     |  |                              |        |   |      |   |        |  
|Financing activities                                                                 |  |                              |        |   |      |   |        |  
|Repurchase of senior notes                                                           |  |                              | (2,685 | ) |      |   |       |  
|Shares settled upon vesting of stock rights                                          |  |                              | (349   | ) |      |   | (104   | )
|Payments on capital lease obligations                                                |  |                              | (44    | ) |      |   | (41    | )
|Proceeds from exercise of stock options                                              |  |                              | 72     |   |      |   |       |  
|                                                                                     |  |                              |        |   |      |   |        |  
|Net cash used in financing activities                                                |  |                              | (3,006 | ) |      |   | (145   | )
|                                                                                     |  |                              |        |   |      |   |        |  
|Net increase (decrease) in cash and cash equivalents                                 |  |                              | (2,653 | ) |      |   | 179    |  
|Cash and cash equivalents, beginning of period                                       |  |                              | 52,945 |   |      |   | 43,982 |  
|                                                                                     |  |                              |        |   |      |   |        |  
|Cash and cash equivalents, end of period                                             |  | $                            | 50,292 |   |      | $ | 44,161 |  
|                                                                                     |  |                              |        |   |      |   |        |  

See accompanying notes to condensed consolidated financial statements.



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##### Table of Contents

Fisher Communications, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Loss

(Unaudited)



|                                   |  |                              |        |   |      |   |        |  
|---------------------------------- |  | ---------------------------- | ------ | - | ---- | - | ------ | -
|                                   |  | Three months ended March 31, |       
|(in thousands)                     |  | 2011                         |        |   | 2010 |  
|Net loss                           |  | $                            | (1,727 | ) |      | $ | (2,179 | )
|Other comprehensive income (loss): |  |                              |        |   |      |   |        |  
|                                   |  |                             
|Accumulated income (loss)          |  |                              | 15     |   |      |   |       |  
|Effect of income taxes             |  |                              | (5     | ) |      |   |       |  
|                                   |  |                             
|Prior service cost                 |  |                              | 15     |   |      |   | 15     |  
|Effect of income taxes             |  |                              | (5     | ) |      |   | (5     | )
|                                   |  |                              |        |   |      |   |        |  
|Other comprehensive income         |  |                              | 20     |   |      |   | 10     |  
|                                   |  |                              |        |   |      |   |        |  
|Comprehensive loss                 |  | $                            | (1,707 | ) |      | $ | (2,169 | )
|                                   |  |                              |        |   |      |   |        |  

See accompanying notes to condensed consolidated financial statements.



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##### Table of Contents

Fisher Communications, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Fisher Communications, Inc. and its wholly-owned subsidiaries
(the Company) have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and pursuant to the rules and regulations of the Securities
and Exchange Commission (SEC). Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for annual financial statements. In the opinion of management, all adjustments
(consisting only of normal recurring adjustments) considered necessary for a fair statement have been included in the periods presented. Operating results for the three months ended March 31, 2011 are not necessarily indicative of the results
that may be expected for the year ending December 31, 2011, or for any other period. The balance sheet at December 31, 2010 has been derived from the audited consolidated financial statements at that date but does not include all of the
information and notes required by GAAP for annual financial statements. These unaudited condensed consolidated financial statements and notes should be read in conjunction with the Companys audited consolidated financial statements and
accompanying notes included in the Companys Annual Report on Form 10-K for the year ended December 31, 2010 (2010 Form 10-K).

2. Significant Accounting Policies and Recent Accounting Pronouncements

The significant accounting policies used in preparation of the unaudited condensed consolidated financial statements are disclosed in the
Companys 2010 Form 10-K. With the exception of those discussed below, there have been no recent accounting pronouncements or changes in accounting pronouncements during the three months ended March 31, 2011, as compared to the recent
accounting pronouncements described in the Companys 2010 Form 10-K, that are of significance, or potential significance, to the Company.

As part of its ongoing review of property, plant and equipment asset lives, the Company determined that the asset lives of certain of its machinery and equipment categories should be increased, the
increase in the lives ranged from one to ten years depending on the category. A change in depreciation method is considered a change in accounting estimate and the Company adjusted the remaining lives of existing assets effective January 1,
2011 and as a result the Company expects that future depreciation will be lower than in the prior periods. The impact of this change in estimate for the three months ended March 31, 2011 decreased pre-tax loss from operations by approximately
$800,000, decreased net loss by approximately $512,000 and decreased diluted net loss per share by $0.06.

3. Fair Value Measurements

The Company measures certain financial assets at fair value on a recurring basis. The fair value of these financial assets
was determined based on three levels of inputs, of which, the first two levels are considered observable and the last unobservable. The three levels of inputs that may be used to measure fair value are as follows:

Level 1  Quoted prices in active markets for identical assets or liabilities.

Level 2 Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices
in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of
the assets or liabilities.

Assets and liabilities measured at fair value on a recurring basis consist solely of marketable
securities. As of March 31, 2011 and December 31, 2010, the reported fair value of marketable securities, using Level 1 inputs, was $1.0 million. Marketable securities are included in other assets on the Companys unaudited condensed
consolidated balance sheets.

As of March 31, 2011 and December 31, 2010, all of the Companys debt was at a
fixed rate and totaled $98.8 million and $101.4 million, respectively. The fair market value of long-term fixed interest rate debt is subject to interest rate risk. Generally, the fair market value of fixed interest rate debt will increase as
interest rates fall and decrease as interest rates rise. The estimated fair value of the Companys long-term debt, using Level 2 inputs, at March 31, 2011 and December 31, 2010 was $101.5 million and $104.2 million, respectively. The
fair value of long-term debt is based on estimates made by investment bankers based on the fair value of the Companys fixed rate long-term debt. For fixed rate debt, interest rate changes do not impact financial position, operations or cash
flows.

4. Goodwill and Intangible Assets



7



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##### Table of Contents

Fisher Communications, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements(Continued)

(Unaudited)



The following table summarizes the carrying amount of goodwill and intangible assets (in
thousands):



|                                              |  |                     |        |  |                         |   |      |     |  |   |                     |  |  |                         |        |  |     |   |      |   |  |   |        | 
|--------------------------------------------- |  | ------------------- | ------ |  | ----------------------- | - | ---- | --- |  | - | ------------------- |  |  | ----------------------- | ------ |  | --- | - | ---- | - |  | - | ------ | 
|                                              |  | March 31, 2011      |        |  | December 31, 2010       |  
|                                              |  | Grosscarryingamount |        |  | Accumulatedamortization |   |      | Net |  |   | Grosscarryingamount |  |  | Accumulatedamortization |        |  | Net |  
|Goodwill (1)                                  |  | $                   | 13,293 |  |                         | $ |     |     |  | $ | 13,293              |  |  | $                       | 13,293 |  |     | $ |     |   |  | $ | 13,293 | 
|Intangible assets:                            |  |                     |        |  |                         |   |      |     |  |   |                     |  |  |                         |        |  |     |   |      |   |  |   |        | 
|Broadcast licenses (1)                        |  | $                   | 37,430 |  |                         | $ |     |     |  | $ | 37,430              |  |  | $                       | 37,430 |  |     | $ |     |   |  | $ | 37,430 | 
|Other intangible assets                       |  |                     | 285    |  |                         |   |     |     |  |   | 285                 |  |  |                         | 285    |  |     |   |     |   |  |   | 285    | 
|Intangible assets subject to amortization (2) |  |                     |        |  |                         |   |      |     |  |   |                     |  |  |                         |        |  |     |   |      |   |  |   |        | 
|Network affiliation agreement                 |  |                     | 3,560  |  |                         |   | (791 | )   |  |   | 2,769               |  |  |                         | 3,560  |  |     |   | (732 | ) |  |   | 2,828  | 
|                                              |  |                     |        |  |                         |   |      |     |  |   |                     |  |  |                         |        |  |     |   |      |   |  |   |        | 
|Total intangible assets                       |  | $                   | 41,275 |  |                         | $ | (791 | )   |  | $ | 40,484              |  |  | $                       | 41,275 |  |     | $ | (732 | ) |  | $ | 40,543 | 
|                                              |  |                     |        |  |                         |   |      |     |  |   |                     |  |  |                         |        |  |     |   |      |   |  |   |        | 



|(1) | Goodwill and broadcast licenses are considered indefinite-lived assets for which no periodic amortization is recognized. The television and radio broadcast licenses are
issued by the Federal Communications Commission (FCC) and provide the Company with the exclusive right to utilize certain frequency spectrum to air its stations programming. While FCC licenses are issued for only a fixed time,
renewals of FCC licenses have occurred routinely and at nominal cost. Moreover, the Company has determined that there are currently no legal, regulatory, contractual, competitive, economic or other factors that limit the useful lives of its FCC
licenses.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Intangible assets subject to amortization are amortized on a straight-line basis. Total amortization expense for intangible assets subject to amortization for both the
three months ended March 31, 2011 and 2010 was $59,000.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Company tests goodwill and
intangible assets for impairment at least annually, as of October 1stof each year, or whenever events indicate that impairment may exist. The Company has determined that the impairment test should be conducted at the reporting unit level, which, with respect to the
broadcast operations, requires separate assessment of each of the Companys television and radio station groups. The Company determines fair value based on valuation methodologies that include an analysis of market transactions for comparable
businesses, discounted cash flows, and a review of the underlying assets of the reporting unit.

The following table presents
the estimated amortization expense for the Companys intangible assets subject to amortization for the remainder of 2011 and each of the next five years and thereafter (in thousands):



|                         |  |   |       | 
|------------------------ |  | - | ----- | 
|Year ending December 31, |  |   |      
|2011                     |  | $ | 177   | 
|2012                     |  |   | 236   | 
|2013                     |  |   | 236   | 
|2014                     |  |   | 236   | 
|2015                     |  |   | 236   | 
|2016                     |  |   | 236   | 
|Thereafter               |  |   | 1,412 | 
|                         |  |   |       | 
|                         |  | $ | 2,769 | 
|                         |  |   |       | 

5. Consulting and License Agreement

In March 2010, the Company entered into a three year consulting and license agreement with ACME Television, LLC (ACME) which was effective April 1, 2010. Under the terms of the agreement
the Company provides consulting services to ACMEs The Daily Buzz television show and the Company also licenses certain assets of the program in order to produce unique content to be distributed on both traditional broadcast and newly
created digital platforms. In conjunction with the agreement, the Company was granted an option to purchase the ownership rights to The Daily Buzz television show until September 30, 2012. Due to the terms of the agreement and
uncertainties associated with the exercise of the option agreement, The Daily Buzz television show does not meet the criteria for consolidation. Revenue earned under this agreement is recorded in revenue and programming and other expenses are
recorded in operation costs.

6. Local Marketing Agreement

In May 2009, the Company entered into a three year Local Marketing Agreement (LMA) with South Sound Broadcasting LLC (South Sound) to manage one of South Sounds FM radio
stations licensed to Oakville, Washington. The station broadcasts the



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##### Table of Contents

Fisher Communications, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements(Continued)

(Unaudited)



Companys KOMO NewsRadio programming to FM listeners in the Seattle  Tacoma radio market. In connection with the LMA, the Company entered into an option agreement with South Sound,
whereby the Company has the right to acquire the station until May 8, 2012. If the Company does not exercise the option prior to its expiration date, the Company is obligated to pay South Sound up to approximately $1.4 million. Due to the terms
of this LMA and the uncertainties associated with the exercise of the option agreement, South Sound does not meet the criteria for consolidation. Advertising revenues earned under this LMA are recorded as revenue and LMA fees and programming
expenses are recorded as operating costs.

7. Joint Sales Agreement

In December 2010, the Company entered into a ten year Joint Sales Agreement (JSA) with NPG of Idaho, Inc., a subsidiary of
News Press & Gazette Company (NPG), who owns and operates KIFI-TV an Idaho Falls, Idaho television station which was effective January 1, 2011. Under the agreement NPG provides certain services supporting the operation
of the Companys television station in Idaho Falls, KIDK-TV, and sells substantially all of the commercial advertising on the Companys station. The Company pays NPG a fixed fee pursuant to the agreement, and a performance bonus based on
station performance. Contemporaneously with the JSA, the Company has entered into an option agreement with NPG, whereby NPG has a conditional option to acquire KIDK-TV from the Company until January 1, 2021, effective on the expiration or
termination of the indenture governing our senior notes. KIDK-TV is consolidated into the Companys unaudited condensed consolidated statements because the Company has determined that it is deemed to have a controlling financial interest in
KIDK-TV for financial reporting purposes as the Company does maintain ultimate control over the policies and/or operations of the station that could most significantly impact the station. Advertising revenues earned under this JSA are recorded as
revenue and JSA fees and programming expenses are recorded as operating costs.

8. Extinguishment of Senior Notes

In the first quarter of 2011, the Company purchased $2.6 million aggregate principal amount of its 8.625% senior notes due in 2014
(Senior Notes). The total consideration for the repurchase was $2.7 million in cash plus accrued interest of $78,000. A loss on extinguishment of debt of $110,000 was recorded, including a charge for related unamortized debt issuance
costs of $35,000. The loss is presented as Loss on extinguishment of senior notes, net in the Companys unaudited condensed consolidated statement of operations. The Company did not repurchase any of its Senior Notes during the
first quarter of 2010.

9. Television and Radio Broadcast Rights and Other Broadcast Commitments

The Company acquires television and radio broadcast rights. The impact of such contracts on the Companys overall financial results
is dependent on a number of factors, including popularity of the program, increased competition from other programming, and strength of the advertising market. It is possible that the cost of commitments for program rights may ultimately exceed
direct revenue from the program. Estimates of future revenue can change significantly and, accordingly, are reviewed periodically to determine whether impairment is expected over the life of the contract.

As of March 31, 2011, the Company had commitments under various agreements of $32.8 million for future rights to broadcast
television programs, rights to sell available advertising time on third party radio stations and commitments under certain network affiliate agreements.

10. Retirement Benefits

The Company has a noncontributory supplemental
retirement program for former executives of the Company. No new participants have been admitted to this program since 2001 and no current executive officers participate in the program. The program provides for vesting of benefits under certain
circumstances. Funding is not required, but the Company has made investments in annuity contracts and maintains life insurance policies on the lives of the individual participants to assist in payment of retirement benefits. The Company is the owner
and beneficiary of the annuity contracts and life insurance policies; accordingly, the cash value of the annuity contracts and the cash surrender value of the life insurance policies are reported on the consolidated balance sheet in the financial
statements and the appreciation is included in the consolidated statement of operations. The supplemental retirement program requires continued employment or disability through the date of expected retirement. The cost of the program is accrued over
the average expected future lifetime of the participants.

In June 2005, the program was amended to freeze accrual of all
benefits to active participants provided under the program. The Company continues to recognize periodic pension cost related to the program, but the amount is lower as a result of the curtailment.



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Fisher Communications, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements(Continued)

(Unaudited)



The net periodic pension cost for the Companys supplemental retirement program is
as follows (in thousands):



|                          |  |                              |     |  |      |   |     | 
|------------------------- |  | ---------------------------- | --- |  | ---- | - | --- | 
|                          |  | Three months ended March 31, |    
|                          |  | 2011                         |     |  | 2010 |  
|Interest cost             |  | $                            | 250 |  |      | $ | 254 | 
|Amortization of loss      |  |                              | 22  |  |      |   | 10  | 
|                          |  |                              |     |  |      |   |     | 
|Net periodic pension cost |  | $                            | 272 |  |      | $ | 264 | 
|                          |  |                              |     |  |      |   |     | 

The discount rate used to determine net periodic pension cost was 5.22% and 5.57% for the three months ended
March 31, 2011 and 2010, respectively.

11. Loss per share

Net income (loss) per share is based upon the weighted average number of shares outstanding during the period. Net income (loss) per share
assuming dilution is based upon the weighted average number of shares and share equivalents outstanding, including the potentially dilutive impact of stock options and restricted stock rights/units issued under the Companys incentive plans.
Common stock options and restricted stock rights/units are converted using the treasury stock method.

Basic and diluted net
loss per share has been computed as follows (in thousands, except per-share amounts):



|                                                        |  |                              |        |   |      |   |        |  
|------------------------------------------------------- |  | ---------------------------- | ------ | - | ---- | - | ------ | -
|                                                        |  | Three months ended March 31, |       
|                                                        |  | 2011                         |        |   | 2010 |  
|Net loss                                                |  | $                            | (1,727 | ) |      | $ | (2,179 | )
|                                                        |  |                              |        |   |      |   |        |  
|Weighted average shares outstanding (basic and diluted) |  |                              | 8,809  |   |      |   | 8,786  |  
|                                                        |  |                              |        |   |      |   |        |  
|Net loss per share (basic and diluted)                  |  | $                            | (0.20  | ) |      | $ | (0.25  | )
|                                                        |  |                              |        |   |      |   |        |  

For the three months ended March 31, 2011, the effect of 150,533 restricted stock rights/units and
options to purchase 280,087 shares are excluded from the calculation of weighted average shares outstanding because such rights/units and options were anti-dilutive. For the three months ended March 31, 2010, the effect of 143,480 restricted
stock rights/units and options to purchase 284,721 shares are excluded from the calculation of weighted average shares outstanding because such rights/units and options were anti-dilutive.

12. Stock-Based Compensation

Stock-based compensation expense for the
three months ended March 31, 2011 and 2010 was $300,000 and $232,000, respectively. Stock-based compensation expense is included in selling, general and administrative expenses in the Companys unaudited condensed consolidated statements
of operations.

13. Income Taxes

The Company records an income tax provision or benefit based upon its estimated annual effective tax rate, which is estimated at 36% for both the three months ended March 31, 2011 and 2010.

The Company recognizes tax expense related to uncertain tax provisions as part of its income tax provision and recognizes
interest and penalties related to uncertain tax positions in interest expense. The U.S. federal statute of limitations remains open for the year 2006 and onward. As of March 31, 2011 and December 31, 2010, the Company had not accrued any
amounts for interest or penalties related to uncertain tax positions.

The determination of the Companys provision for
income taxes and valuation allowance requires significant judgment, the use of estimates and the interpretation and application of complex tax laws. In assessing whether and to what extent deferred tax assets can be realized, the Company considers
whether it is more likely than not that some portion or all of the deferred tax assets will be realized.

The Company assesses
the likelihood of the realizability of its deferred tax assets on a quarterly basis. Consistent with prior years, the Company recorded a full valuation allowance against the Companys state deferred tax assets, as it is not more likely than not
that a tax benefit for the deferred tax assets will be recognized based upon all available evidence. As a result, the Companys



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Fisher Communications, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements(Continued)

(Unaudited)



effective tax rate is not affected by changes in state rates. At March 31, 2011 and December 31, 2010, the Company has not recorded a valuation allowance on its federal deferred tax
assets as management believes that it is more likely than not that the Companys federal deferred tax assets are realizable. The amount of net deferred tax assets considered realizable, however, could be reduced in the future if the
Companys projections of future taxable income are reduced or if the Company does not perform at the levels that it is projecting. This could result in an increase in the Companys valuation allowance for federal deferred tax assets.

14. Segment Information

The Company reports financial data for three segments: television, radio and Fisher Plaza. The television segment includes the operations of the Companys 20 owned and/or operated television stations
(including a 50%-owned television station) and the Companys internet business. The radio segment includes the operations of the Companys eight radio stations and two managed radio stations. The Fisher Plaza segment includes the
operations of a communications center located near downtown Seattle that serves as home of the Companys Seattle television and radio operations, the Companys corporate offices and third-party tenants. The segment data includes additional
allocation of depreciation and certain operating expenses from Fisher Plaza to our television and radio segments, and certain corporate expenses are allocated to our television and radio segments on a pro-rata basis. Other includes corporate and
administrative expenses that are not attributable to the operations of the television, radio or Fisher Plaza segments.

Revenue for each segment is as follows (in thousands):



|             |  |                              |        |   |      |   |        |  
|------------ |  | ---------------------------- | ------ | - | ---- | - | ------ | -
|             |  | Three months ended March 31, |       
|             |  | 2011                         |        |   | 2010 |  
|Television   |  | $                            | 29,101 |   |      | $ | 26,585 |  
|Radio        |  |                              | 5,218  |   |      |   | 5,255  |  
|Fisher Plaza |  |                              | 3,697  |   |      |   | 3,518  |  
|Other        |  |                              | (104   | ) |      |   | (17    | )
|             |  |                              |        |   |      |   |        |  
|             |  | $                            | 37,912 |   |      | $ | 35,341 |  
|             |  |                              |        |   |      |   |        |  

For the three months ended March 31, 2011 and 2010, intercompany sales amounted to $104,000 and
$17,000, respectively, relating primarily to sales between the Companys television and radio segments.

Income (loss)
from operations for each segment is as follows (in thousands):



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Fisher Communications, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements(Continued)

(Unaudited)



|             |  |                              |        |   |      |   |        |  
|------------ |  | ---------------------------- | ------ | - | ---- | - | ------ | -
|             |  | Three months ended March 31, |       
|             |  | 2011                         |        |   | 2010 |  
|Television   |  | $                            | 2,327  |   |      | $ | 715    |  
|Radio        |  |                              | (152   | ) |      |   | (107   | )
|Fisher Plaza |  |                              | 2,058  |   |      |   | 1,571  |  
|Other        |  |                              | (4,665 | ) |      |   | (2,990 | )
|             |  |                              |        |   |      |   |        |  
|             |  | $                            | (432   | ) |      | $ | (811   | )
|             |  |                              |        |   |      |   |        |  

Total assets for each segment are as follows (in thousands):



|             |  |               |         |  |                  |   |         | 
|------------ |  | ------------- | ------- |  | ---------------- | - | ------- | 
|             |  | March 31,2011 |         |  | December 31,2010 |  
|Television   |  |               | 136,908 |  |                  | $ | 141,707 | 
|Radio        |  |               | 13,872  |  |                  |   | 15,020  | 
|Fisher Plaza |  |               | 107,155 |  |                  |   | 108,271 | 
|Other        |  |               | 51,218  |  |                  |   | 55,894  | 
|             |  |               |         |  |                  |   |         | 
|             |  | $             | 309,153 |  |                  | $ | 320,892 | 
|             |  |               |         |  |                  |   |         | 

Television segment cash and cash equivalents were approximately $25.4 million at March 31, 2011 and
December 31, 2010. Other assets are principally cash and cash equivalents and cash value of life insurance and annuity contracts, income taxes receivable and deferred income taxes.

15. Plaza Fire Reimbursements, Net

In July 2009, an electrical fire
contained within a garage level equipment room of the east building of Fisher Plaza disrupted city-supplied electrical service to that building. A third-party investigation concluded that the fire appears to have been caused by a malfunction of
bus duct equipment manufactured by a third-party.

The Company recorded the Plaza fire expenses as incurred and recorded
insurance reimbursements within operating results in the period the reimbursements are considered probable and certain. During the first quarter of 2011 and 2010, the Company recorded net reimbursements of $78,000 and $91,000, respectively, which is
included in Plaza fire reimbursements, net on the Companys unaudited condensed consolidated statement of operations. In total, the Company incurred approximately $6.8 million in cash expenditures related to the Plaza fire, comprised of
remediation expenses of $3.7 million and capital expenditures of $3.1 million. To date, the Company has received total insurance reimbursements of $5.9 million, which represents substantially all of the Companys expected reimbursements.

16. Sprint Nextel Asset Exchange

In 2004, the Federal Communications Commission (FCC) approved a spectrum allocation exchange between Sprint Nextel Corporation (Nextel) and public safety entities to eliminate
interference caused to public safety radio licenses by Nextels operations.

In order to utilize this spectrum, Nextel is
required to relocate broadcasters to new spectrum by replacing all analog equipment currently used by broadcasters with comparable digital equipment. The Company has agreed to accept the substitute equipment that Nextel will provide in all of its
markets, and in turn must relinquish its existing equipment back to Nextel. All replacement equipment purchases will be paid for directly by Nextel. All other reasonable and necessary costs incurred by the Company in conjunction with the exchange,
both internal and external, will be reimbursed by Nextel.

The Company recognized a $940,000 gain for the three months ended
March 31, 2010, which is included in gain on asset exchange, net on the Companys unaudited condensed consolidated statement of operations. The gain represents the amount of the substitute equipment put into use during the quarter,
including installation costs and net of assets disposed. This gain on asset



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Fisher Communications, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements(Continued)

(Unaudited)



exchange was not reported as a capital expenditure on the statement of cash flows as it was not a cash outflow. The Company did not recognize a gain for the three months ended March 31,
2011.

At March 31, 2011, the Company had approximately $84,000 of the substitute equipment that had been received but
not yet installed. The $84,000 is recorded as deferred gain in other current liabilities on the Companys unaudited condensed consolidated balance sheet. Once the equipment is fully installed and is in use, the deferred gain will be recorded as
a gain on the Companys unaudited condensed consolidated statement of operations.

17. Financial Information for Guarantors

At March 31, 2011, the Company had $98.8 million aggregate principal amount of Senior Notes outstanding. The Senior
Notes are fully and unconditionally guaranteed, jointly and severally, on an unsecured, senior basis by the current and future material domestic subsidiaries of the Company.

Presented below are unaudited condensed consolidated statements of operations for the three months ended March 31, 2011 and 2010, and unaudited condensed consolidated statements of cash flows for the
three months ended March 31, 2011 and 2010. Also presented are the unaudited condensed consolidated balance sheets as of March 31, 2011 and December 31, 2010. The unaudited condensed consolidated information is presented for the
Company with its investments in consolidated subsidiaries accounted for under the equity method, the 100%-owned guarantor subsidiaries, eliminations, and the Company on a consolidated basis. The Company (issuer) information consists primarily of
corporate oversight and administrative personnel and related activities, as well as certain investments.

Financial
Information for Guarantors

Condensed Consolidated Statement of Operations

For the three months ended March 31, 2011



|                                              |  |                           |        |   |                                 |   |        |              |  |   |                                           |   |  |   |        |  
|--------------------------------------------- |  | ------------------------- | ------ | - | ------------------------------- | - | ------ | ------------ |  | - | ----------------------------------------- | - |  | - | ------ | -
|(In thousands)                                |  | FisherCommunications,Inc. |        |   | 100% OwnedGuarantorSubsidiaries |   |        | Eliminations |  |   | FisherCommunications,Inc. andSubsidiaries |  
|Revenue                                       |  | $                         |       |   |                                 | $ | 37,912 |              |  | $ |                                          |   |  | $ | 37,912 |  
|Operating expenses                            |  |                           |        |   |                                 |   |        |              |  |   |                                           |   |  |   |        |  
|Direct operating costs                        |  |                           | 143    |   |                                 |   | 17,404 |              |  |   | 210                                       |   |  |   | 17,757 |  
|Selling, general and administrative expenses  |  |                           | 5,059  |   |                                 |   | 10,177 |              |  |   | (210                                      | ) |  |   | 15,026 |  
|Amortization of program rights                |  |                           |       |   |                                 |   | 2,970  |              |  |   |                                          |   |  |   | 2,970  |  
|Depreciation and amortization                 |  |                           | 267    |   |                                 |   | 2,402  |              |  |   |                                          |   |  |   | 2,669  |  
|Plaza fire reimbursements, net                |  |                           |       |   |                                 |   | (78    | )            |  |   |                                          |   |  |   | (78    | )
|Gain on asset exchange, net                   |  |                           |       |   |                                 |   |       |              |  |   |                                          |   |  |   |       |  
|                                              |  |                           |        |   |                                 |   |        |              |  |   |                                           |   |  |   |        |  
|Total operating expenses                      |  |                           | 5,469  |   |                                 |   | 32,875 |              |  |   |                                          |   |  |   | 38,344 |  
|                                              |  |                           |        |   |                                 |   |        |              |  |   |                                           |   |  |   |        |  
|Income (loss) from operations                 |  |                           | (5,469 | ) |                                 |   | 5,037  |              |  |   |                                          |   |  |   | (432   | )
|Loss on extinguishment of senior notes, net   |  |                           | (110   | ) |                                 |   |       |              |  |   |                                          |   |  |   | (110   | )
|Other income, net                             |  |                           | 30     |   |                                 |   | 50     |              |  |   |                                          |   |  |   | 80     |  
|Equity in income of consolidated subsidiaries |  |                           | 3,234  |   |                                 |   |       |              |  |   | (3,234                                    | ) |  |   |       |  
|Interest expense                              |  |                           | (2,234 | ) |                                 |   | (13    | )            |  |   |                                          |   |  |   | (2,247 | )
|                                              |  |                           |        |   |                                 |   |        |              |  |   |                                           |   |  |   |        |  
|Income (loss) before income taxes             |  |                           | (4,549 | ) |                                 |   | 5,074  |              |  |   | (3,234                                    | ) |  |   | (2,709 | )
|Provision (benefit) for income taxes          |  |                           | (2,822 | ) |                                 |   | 1,840  |              |  |   |                                          |   |  |   | (982   | )
|                                              |  |                           |        |   |                                 |   |        |              |  |   |                                           |   |  |   |        |  
|Net income (loss)                             |  | $                         | (1,727 | ) |                                 | $ | 3,234  |              |  | $ | (3,234                                    | ) |  | $ | (1,727 | )
|                                              |  |                           |        |   |                                 |   |        |              |  |   |                                           |   |  |   |        |  



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Financial Information for Guarantors

Condensed Consolidated Statement of Operations

For the three months ended March 31, 2010



|                                              |  |                           |        |   |                                 |   |        |              |  |   |                                           |   |  |   |        |  
|--------------------------------------------- |  | ------------------------- | ------ | - | ------------------------------- | - | ------ | ------------ |  | - | ----------------------------------------- | - |  | - | ------ | -
|(In thousands)                                |  | FisherCommunications,Inc. |        |   | 100% OwnedGuarantorSubsidiaries |   |        | Eliminations |  |   | FisherCommunications,Inc. andSubsidiaries |  
|Revenue                                       |  | $                         |       |   |                                 | $ | 35,341 |              |  | $ |                                          |   |  | $ | 35,341 |  
|Operating expenses                            |  |                           |        |   |                                 |   |        |              |  |   |                                           |   |  |   |        |  
|Direct operating costs                        |  |                           | 104    |   |                                 |   | 16,859 |              |  |   | 54                                        |   |  |   | 17,017 |  
|Selling, general and administrative expenses  |  |                           | 2,662  |   |                                 |   | 10,938 |              |  |   | (54                                       | ) |  |   | 13,546 |  
|Amortization of program rights                |  |                           |       |   |                                 |   | 2,970  |              |  |   |                                          |   |  |   | 2,970  |  
|Depreciation and amortization                 |  |                           | 392    |   |                                 |   | 3,258  |              |  |   |                                          |   |  |   | 3,650  |  
|Plaza fire reimbursements, net                |  |                           |       |   |                                 |   | (91    | )            |  |   |                                          |   |  |   | (91    | )
|Gain on asset exchange, net                   |  |                           |       |   |                                 |   | (940   | )            |  |   |                                          |   |  |   | (940   | )
|                                              |  |                           |        |   |                                 |   |        |              |  |   |                                           |   |  |   |        |  
|Total operating expenses                      |  |                           | 3,158  |   |                                 |   | 32,994 |              |  |   |                                          |   |  |   | 36,152 |  
|                                              |  |                           |        |   |                                 |   |        |              |  |   |                                           |   |  |   |        |  
|Income (loss) from operations                 |  |                           | (3,158 | ) |                                 |   | 2,347  |              |  |   |                                          |   |  |   | (811   | )
|Other income, net                             |  |                           | 155    |   |                                 |   | (98    | )            |  |   |                                          |   |  |   | 57     |  
|Equity in income of consolidated subsidiaries |  |                           | 1,450  |   |                                 |   |       |              |  |   | (1,450                                    | ) |  |   |       |  
|Interest expense                              |  |                           | (2,655 | ) |                                 |   | (17    | )            |  |   |                                          |   |  |   | (2,672 | )
|                                              |  |                           |        |   |                                 |   |        |              |  |   |                                           |   |  |   |        |  
|Income (loss) before income taxes             |  |                           | (4,208 | ) |                                 |   | 2,232  |              |  |   | (1,450                                    | ) |  |   | (3,426 | )
|Provision (benefit) for income taxes          |  |                           | (2,029 | ) |                                 |   | 782    |              |  |   |                                          |   |  |   | (1,247 | )
|                                              |  |                           |        |   |                                 |   |        |              |  |   |                                           |   |  |   |        |  
|Net income (loss)                             |  | $                         | (2,179 | ) |                                 | $ | 1,450  |              |  | $ | (1,450                                    | ) |  | $ | (2,179 | )
|                                              |  |                           |        |   |                                 |   |        |              |  |   |                                           |   |  |   |        |  



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##### Table of Contents

Financial Information for Guarantors

Condensed Consolidated Balance Sheet

As of March 31, 2011



|                                                                    |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|------------------------------------------------------------------- |  | ------------------------- | ------- | - | ------------------------------- | - | ------- | ------------ |  | - | ----------------------------------------- | - |  | - | ------- | -
|(In thousands)                                                      |  | FisherCommunications,Inc. |         |   | 100% OwnedGuarantorSubsidiaries |   |         | Eliminations |  |   | FisherCommunications,Inc. andSubsidiaries |  
|ASSETS                                                              |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Current Assets                                                      |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Cash and cash equivalents                                           |  | $                         | 24,815  |   |                                 | $ | 25,477  |              |  | $ |                                          |   |  | $ | 50,292  |  
|Receivables, net                                                    |  |                           |        |   |                                 |   | 27,903  |              |  |   |                                          |   |  |   | 27,903  |  
|Due from affiliates                                                 |  |                           | (62,986 | ) |                                 |   | 62,986  |              |  |   |                                          |   |  |   |        |  
|Income taxes receivable                                             |  |                           | 3,279   |   |                                 |   | (1,655  | )            |  |   |                                          |   |  |   | 1,624   |  
|Deferred income taxes                                               |  |                           | 468     |   |                                 |   | 1,181   |              |  |   |                                          |   |  |   | 1,649   |  
|Prepaid expenses and other                                          |  |                           | 1,417   |   |                                 |   | 2,129   |              |  |   |                                          |   |  |   | 3,546   |  
|Television broadcast rights                                         |  |                           |        |   |                                 |   | 5,040   |              |  |   |                                          |   |  |   | 5,040   |  
|                                                                    |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Total current assets                                                |  |                           | (33,007 | ) |                                 |   | 123,061 |              |  |   |                                          |   |  |   | 90,054  |  
|Investment in consolidated subsidiaries                             |  |                           | 292,666 |   |                                 |   |        |              |  |   | (292,666                                  | ) |  |   |        |  
|Cash surrender value of life insurance and annuity contracts        |  |                           | 16,682  |   |                                 |   |        |              |  |   |                                          |   |  |   | 16,682  |  
|Goodwill, net                                                       |  |                           |        |   |                                 |   | 13,293  |              |  |   |                                          |   |  |   | 13,293  |  
|Intangible assets, net                                              |  |                           |        |   |                                 |   | 40,484  |              |  |   |                                          |   |  |   | 40,484  |  
|Other assets                                                        |  |                           | 2,748   |   |                                 |   | 4,481   |              |  |   |                                          |   |  |   | 7,229   |  
|Property, plant and equipment, net                                  |  |                           | 2,407   |   |                                 |   | 139,004 |              |  |   |                                          |   |  |   | 141,411 |  
|                                                                    |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Total Assets                                                        |  | $                         | 281,496 |   |                                 | $ | 320,323 |              |  | $ | (292,666                                  | ) |  | $ | 309,153 |  
|                                                                    |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Current Liabilities                                                 |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Accounts payable                                                    |  | $                         | 103     |   |                                 | $ | 3,279   |              |  | $ |                                          |   |  | $ | 3,382   |  
|Accrued payroll and related benefits                                |  |                           | 1,292   |   |                                 |   | 4,787   |              |  |   |                                          |   |  |   | 6,079   |  
|Interest payable                                                    |  |                           | 355     |   |                                 |   |        |              |  |   |                                          |   |  |   | 355     |  
|Television broadcast rights payable                                 |  |                           |        |   |                                 |   | 4,815   |              |  |   |                                          |   |  |   | 4,815   |  
|Current portion of accrued retirement benefits                      |  |                           | 1,117   |   |                                 |   |        |              |  |   |                                          |   |  |   | 1,117   |  
|Other current liabilities                                           |  |                           | 1,470   |   |                                 |   | 3,745   |              |  |   |                                          |   |  |   | 5,215   |  
|                                                                    |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Total current liabilities                                           |  |                           | 4,337   |   |                                 |   | 16,626  |              |  |   |                                          |   |  |   | 20,963  |  
|Long-term debt                                                      |  |                           | 98,830  |   |                                 |   |        |              |  |   |                                          |   |  |   | 98,830  |  
|Accrued retirement benefits                                         |  |                           | 18,981  |   |                                 |   |        |              |  |   |                                          |   |  |   | 18,981  |  
|Deferred income taxes                                               |  |                           | (4,115  | ) |                                 |   | 4,543   |              |  |   |                                          |   |  |   | 428     |  
|Other liabilities                                                   |  |                           | (79     | ) |                                 |   | 6,488   |              |  |   |                                          |   |  |   | 6,409   |  
|                                                                    |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Total liabilities                                                   |  |                           | 117,954 |   |                                 |   | 27,657  |              |  |   |                                          |   |  |   | 145,611 |  
|                                                                    |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Stockholders Equity                                                |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Common stock                                                        |  |                           | 11,030  |   |                                 |   | 1,131   |              |  |   | (1,131                                    | ) |  |   | 11,030  |  
|Capital in excess of par                                            |  |                           | 13,254  |   |                                 |   | 164,234 |              |  |   | (164,234                                  | ) |  |   | 13,254  |  
|Accumulated other comprehensive income (loss), net of income taxes: |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Accumulated loss                                                    |  |                           | (2,166  | ) |                                 |   |        |              |  |   |                                          |   |  |   | (2,166  | )
|Prior service cost                                                  |  |                           | (90     | ) |                                 |   |        |              |  |   |                                          |   |  |   | (90     | )
|Retained earnings                                                   |  |                           | 141,514 |   |                                 |   | 127,301 |              |  |   | (127,301                                  | ) |  |   | 141,514 |  
|                                                                    |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Total Stockholders Equity                                          |  |                           | 163,542 |   |                                 |   | 292,666 |              |  |   | (292,666                                  | ) |  |   | 163,542 |  
|                                                                    |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Total Liabilities and Stockholders Equity                          |  | $                         | 281,496 |   |                                 | $ | 320,323 |              |  | $ | (292,666                                  | ) |  | $ | 309,153 |  
|                                                                    |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  



15



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##### Table of Contents

Financial Information for Guarantors

Condensed Consolidated Balance Sheet

As of December 31, 2010



|                                                                    |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|------------------------------------------------------------------- |  | ------------------------- | ------- | - | ------------------------------- | - | ------- | ------------ |  | - | ----------------------------------------- | - |  | - | ------- | -
|(In thousands)                                                      |  | FisherCommunications,Inc. |         |   | 100% OwnedGuarantorSubsidiaries |   |         | Eliminations |  |   | FisherCommunications,Inc. andSubsidiaries |  
|ASSETS                                                              |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Current Assets                                                      |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Cash and cash equivalents                                           |  | $                         | 27,563  |   |                                 | $ | 25,382  |              |  | $ |                                          |   |  | $ | 52,945  |  
|Receivables, net                                                    |  |                           |        |   |                                 |   | 30,807  |              |  |   |                                          |   |  |   | 30,807  |  
|Due from affiliate                                                  |  |                           | (43,165 | ) |                                 |   | 43,165  |              |  |   |                                          |   |  |   |        |  
|Income taxes receivable                                             |  |                           | 16,938  |   |                                 |   | (15,585 | )            |  |   |                                          |   |  |   | 1,353   |  
|Deferred income taxes                                               |  |                           | 467     |   |                                 |   | 1,182   |              |  |   |                                          |   |  |   | 1,649   |  
|Prepaid expenses and other                                          |  |                           | 1,543   |   |                                 |   | 1,320   |              |  |   |                                          |   |  |   | 2,863   |  
|Cash surrender value of annuity contracts                           |  |                           | 2,397   |   |                                 |   |        |              |  |   |                                           |   |  |   | 2,397   |  
|Television broadcast rights                                         |  |                           |        |   |                                 |   | 7,855   |              |  |   |                                          |   |  |   | 7,855   |  
|                                                                    |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Total current assets                                                |  |                           | 5,743   |   |                                 |   | 94,126  |              |  |   |                                          |   |  |   | 99,869  |  
|Investment in consolidated subsidiaries                             |  |                           | 261,813 |   |                                 |   |        |              |  |   | (261,813                                  | ) |  |   |        |  
|Cash surrender value of life insurance and annuity contracts        |  |                           | 16,499  |   |                                 |   |        |              |  |   |                                          |   |  |   | 16,499  |  
|Goodwill, net                                                       |  |                           |        |   |                                 |   | 13,293  |              |  |   |                                          |   |  |   | 13,293  |  
|Intangible assets, net                                              |  |                           |        |   |                                 |   | 40,543  |              |  |   |                                          |   |  |   | 40,543  |  
|Other assets                                                        |  |                           | 2,874   |   |                                 |   | 4,502   |              |  |   |                                          |   |  |   | 7,376   |  
|Property, plant and equipment, net                                  |  |                           | 2,265   |   |                                 |   | 141,047 |              |  |   |                                          |   |  |   | 143,312 |  
|                                                                    |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Total Assets                                                        |  | $                         | 289,194 |   |                                 | $ | 293,511 |              |  | $ | (261,813                                  | ) |  | $ | 320,892 |  
|                                                                    |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Current Liabilities                                                 |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Accounts payable                                                    |  | $                         | 96      |   |                                 | $ | 3,948   |              |  | $ |                                          |   |  | $ | 4,044   |  
|Accrued payroll and related benefits                                |  |                           | 3,182   |   |                                 |   | 4,714   |              |  |   |                                          |   |  |   | 7,896   |  
|Interest payable                                                    |  |                           | 2,552   |   |                                 |   |        |              |  |   |                                          |   |  |   | 2,552   |  
|Television broadcast rights payable                                 |  |                           |        |   |                                 |   | 7,849   |              |  |   |                                          |   |  |   | 7,849   |  
|Current portion of accrued retirement benefits                      |  |                           | 1,117   |   |                                 |   |        |              |  |   |                                          |   |  |   | 1,117   |  
|Other current liabilities                                           |  |                           | 889     |   |                                 |   | 3,499   |              |  |   |                                          |   |  |   | 4,388   |  
|                                                                    |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Total current liabilities                                           |  |                           | 7,836   |   |                                 |   | 20,010  |              |  |   |                                          |   |  |   | 27,846  |  
|Long-term debt                                                      |  |                           | 101,440 |   |                                 |   |        |              |  |   |                                          |   |  |   | 101,440 |  
|Accrued retirement benefits                                         |  |                           | 18,982  |   |                                 |   |        |              |  |   |                                          |   |  |   | 18,982  |  
|Deferred income taxes, net                                          |  |                           | (4,126  | ) |                                 |   | 4,543   |              |  |   |                                          |   |  |   | 417     |  
|Other liabilities                                                   |  |                           | (164    | ) |                                 |   | 7,145   |              |  |   |                                          |   |  |   | 6,981   |  
|                                                                    |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Total liabilities                                                   |  |                           | 123,968 |   |                                 |   | 31,698  |              |  |   |                                          |   |  |   | 155,666 |  
|                                                                    |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Stockholders Equity                                                |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Common stock                                                        |  |                           | 10,988  |   |                                 |   | 1,131   |              |  |   | (1,131                                    | ) |  |   | 10,988  |  
|Capital in excess of par                                            |  |                           | 13,273  |   |                                 |   | 164,233 |              |  |   | (164,233                                  | ) |  |   | 13,273  |  
|Accumulated other comprehensive income (loss), net of income taxes: |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Accumulated loss                                                    |  |                           | (2,176  | ) |                                 |   |        |              |  |   |                                          |   |  |   | (2,176  | )
|Prior service cost                                                  |  |                           | (100    | ) |                                 |   |        |              |  |   |                                          |   |  |   | (100    | )
|Retained earnings                                                   |  |                           | 143,241 |   |                                 |   | 96,449  |              |  |   | (96,449                                   | ) |  |   | 143,241 |  
|                                                                    |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Total Stockholders Equity                                          |  |                           | 165,226 |   |                                 |   | 261,813 |              |  |   | (261,813                                  | ) |  |   | 165,226 |  
|                                                                    |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Total Liabilities and Stockholders Equity                          |  | $                         | 289,194 |   |                                 | $ | 293,511 |              |  | $ | (261,813                                  | ) |  | $ | 320,892 |  
|                                                                    |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  



16



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##### Table of Contents

Financial Information for Guarantors

Condensed Consolidated Statement of Cash Flows

For the Three months ended March 31, 2011



|                                                     |  |                           |        |   |                                |   |        |              |  |   |                                           |  |  |   |        |  
|---------------------------------------------------- |  | ------------------------- | ------ | - | ------------------------------ | - | ------ | ------------ |  | - | ----------------------------------------- |  |  | - | ------ | -
|(In thousands)                                       |  | FisherCommunications,Inc. |        |   | 100%OwnedGuarantorSubsidiaries |   |        | Eliminations |  |   | FisherCommunications,Inc. andSubsidiaries | 
|Net cash provided by operating activities            |  | $                         | 616    |   |                                | $ | 484    |              |  | $ |                                          |  |  | $ | 1,100  |  
|Investing activities                                 |  |                           |        |   |                                |   |        |              |  |   |                                           |  |  |   |        |  
|Contribution to equity investee                      |  |                           |       |   |                                |   | (4     | )            |  |   |                                          |  |  |   | (4     | )
|Purchases of property, plant and equipment           |  |                           | (402   | ) |                                |   | (341   | )            |  |   |                                          |  |  |   | (743   | )
|                                                     |  |                           |        |   |                                |   |        |              |  |   |                                           |  |  |   |        |  
|Net cash used in investing activities                |  |                           | (402   | ) |                                |   | (345   | )            |  |   |                                          |  |  |   | (747   | )
|                                                     |  |                           |        |   |                                |   |        |              |  |   |                                           |  |  |   |        |  
|Financing activities                                 |  |                           |        |   |                                |   |        |              |  |   |                                           |  |  |   |        |  
|Shares settled upon vesting of stock rights          |  |                           | (349   | ) |                                |   |       |              |  |   |                                          |  |  |   | (349   | )
|Repurchase of senior notes                           |  |                           | (2,685 | ) |                                |   |       |              |  |   |                                          |  |  |   | (2,685 | )
|Payments on capital lease obligations                |  |                           |       |   |                                |   | (44    | )            |  |   |                                          |  |  |   | (44    | )
|Proceeds from exercise of stock options              |  |                           | 72     |   |                                |   |       |              |  |   |                                          |  |  |   | 72     |  
|                                                     |  |                           |        |   |                                |   |        |              |  |   |                                           |  |  |   |        |  
|Net cash used in financing activities                |  |                           | (2,962 | ) |                                |   | (44    | )            |  |   |                                          |  |  |   | (3,006 | )
|                                                     |  |                           |        |   |                                |   |        |              |  |   |                                           |  |  |   |        |  
|Net increase (decrease) in cash and cash equivalents |  |                           | (2,748 | ) |                                |   | 95     |              |  |   |                                          |  |  |   | (2,653 | )
|Cash and cash equivalents, beginning of period       |  |                           | 27,563 |   |                                |   | 25,382 |              |  |   |                                          |  |  |   | 52,945 |  
|                                                     |  |                           |        |   |                                |   |        |              |  |   |                                           |  |  |   |        |  
|Cash and cash equivalents, end of period             |  | $                         | 24,815 |   |                                | $ | 25,477 |              |  | $ |                                          |  |  | $ | 50,292 |  
|                                                     |  |                           |        |   |                                |   |        |              |  |   |                                           |  |  |   |        |  

Financial Information for Guarantors

Condensed Consolidated Statement of Cash Flows

For the Three months ended March 31, 2010



|                                               |  |                           |       |   |                                |   |        |              |  |   |                                           |  |  |   |        |  
|---------------------------------------------- |  | ------------------------- | ----- | - | ------------------------------ | - | ------ | ------------ |  | - | ----------------------------------------- |  |  | - | ------ | -
|(In thousands)                                 |  | FisherCommunications,Inc. |       |   | 100%OwnedGuarantorSubsidiaries |   |        | Eliminations |  |   | FisherCommunications,Inc. andSubsidiaries | 
|Net cash provided by operating activities      |  | $                         | 355   |   |                                | $ | 3,153  |              |  | $ |                                          |  |  | $ | 3,508  |  
|Investing activities                           |  |                           |       |   |                                |   |        |              |  |   |                                           |  |  |   |        |  
|Net cash in consolidation of equity investee   |  |                           |      |   |                                |   | 75     |              |  |   |                                          |  |  |   | 75     |  
|Purchases of property, plant and equipment     |  |                           | (159  | ) |                                |   | (3,100 | )            |  |   |                                          |  |  |   | (3,259 | )
|                                               |  |                           |       |   |                                |   |        |              |  |   |                                           |  |  |   |        |  
|Net cash used in investing activities          |  |                           | (159  | ) |                                |   | (3,025 | )            |  |   |                                          |  |  |   | (3,184 | )
|                                               |  |                           |       |   |                                |   |        |              |  |   |                                           |  |  |   |        |  
|Financing activities                           |  |                           |       |   |                                |   |        |              |  |   |                                           |  |  |   |        |  
|Shares settled upon vesting of stock rights    |  |                           | (104  | ) |                                |   |        |              |  |   |                                           |  |  |   | (104   | )
|Payments on capital lease obligations          |  |                           |      |   |                                |   | (41    | )            |  |   |                                          |  |  |   | (41    | )
|                                               |  |                           |       |   |                                |   |        |              |  |   |                                           |  |  |   |        |  
|Net cash used in financing activities          |  |                           | (104  | ) |                                |   | (41    | )            |  |   |                                          |  |  |   | (145   | )
|                                               |  |                           |       |   |                                |   |        |              |  |   |                                           |  |  |   |        |  
|Net increase in cash and cash equivalents      |  |                           | 92    |   |                                |   | 87     |              |  |   |                                          |  |  |   | 179    |  
|Cash and cash equivalents, beginning of period |  |                           | 8,840 |   |                                |   | 35,142 |              |  |   |                                          |  |  |   | 43,982 |  
|                                               |  |                           |       |   |                                |   |        |              |  |   |                                           |  |  |   |        |  
|Cash and cash equivalents, end of period       |  | $                         | 8,932 |   |                                | $ | 35,229 |              |  | $ |                                          |  |  | $ | 44,161 |  
|                                               |  |                           |       |   |                                |   |        |              |  |   |                                           |  |  |   |        |  

18. Subsequent Event

In April and May 2011, the Company redeemed $15.0 million and $5.0 million aggregate principal amount of Senior Notes, respectively, for approximately $20.7 million in cash plus accrued interest. An
estimated net loss on extinguishment of debt of $820,000 will be recorded in the second quarter of 2011.



17



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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 unaudited 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, 2010, which was filed with the Securities and Exchange Commission on March 8, 2011.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. Except as required by law, 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.

This discussion
is intended to provide an analysis of significant trends and material changes in our financial condition and operating results during the three months ended March 31, 2011, compared with the corresponding period in 2010.

Overview

We are an
integrated media company. We own and/or operate 13 full power (including a 50%-owned television station) and seven low power television stations and ten owned or managed radio stations. Our television stations are located in Washington, Oregon,
Idaho and California, and our radio stations are located in Washington and Montana. We also own and operate Fisher Plaza, a mixed-use commercial facility located near downtown Seattle that serves as the home for our corporate offices and our Seattle
television and radio stations. We lease a majority of the space at Fisher Plaza to a variety of unaffiliated companies.

Our
broadcasting operations receive revenue from the sale of local, regional and national advertising and, to a much lesser extent, from retransmission consent fees, tower rental and commercial production activities. Our operating results are, therefore
sensitive to broad economic trends that affect the broadcasting industry in general, as well as local and regional trends, particularly those affecting the Pacific Northwest economy. The advertising revenue of our stations is generally highest in
the second and fourth quarters of each year, due in part to increases in consumer advertising in the spring, and retail advertising in the period leading up to and including the holiday season. In addition, advertising revenue is generally higher
during national election years due to spending by political candidates and advocacy groups. This political spending typically is heaviest during the fourth quarter.

Our television revenue is significantly affected by network affiliation and the success of programming offered by those networks. Our two largest television stations, KOMO TV and KATU TV, accounted for
approximately 60% percent of our television broadcasting revenue in 2011 and are affiliated with the ABC Television Network. We have twelve television stations which are affiliated with one of the four major networks; six of our television stations
are affiliated with Univision (Spanish language); and the remainder of our television stations are independent or subscribe to various programming services. We have affiliation agreements with the ABC Television Network with current terms expiring
in August 2014. Our affiliation agreements with the CBS Television Network generally expire in February 2016. Our only affiliation agreement with FOX Television Network for KBFX-CA in Bakersfield, California, expired in June 2010. We are currently
operating under the terms of the expired agreement as we continue discussions with FOX on the terms of a new agreement. Our affiliation agreement with Univision expires in September 2011. The non-renewal of any of our major network affiliation
agreements could adversely affect our business and results. Our broadcasting operations are subject to competitive pressures from traditional broadcasting sources, as well as from alternative methods of delivering information and entertainment, and
these pressures may cause fluctuations in operating results.

In addition to our broadcasting operations, we own and operate
Fisher Plaza, and we lease space to other companies that are attracted by the property location and infrastructure provided at this facility. As of March 31, 2011 and December 31, 2010, approximately 96% of Fisher Plaza was occupied or
committed for occupancy (41% occupied by Fisher entities). Revenue and operating income from Fisher Plaza are dependent upon the general economic climate, the Seattle economic climate, the outlook of the telecommunications and technology sectors and
commercial real estate conditions, including the availability of space in other competing properties.



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Management focuses on key metrics from operational data within our broadcasting and Fisher
Plaza operations. Information on significant trends is provided in the section entitled Consolidated Results of Operations.

Significant Developments

The following significant developments affect the comparability of our financial statements for the three months ended March 31, 2011
and 2010.

Joint Sales Agreement. In December 2010, we entered into a ten year Joint Sales Agreement (JSA)
with NPG of Idaho, Inc., a subsidiary of News Press & Gazette Company (NPG), who owns and operates KIFI-TV, an Idaho Falls, Idaho television station, which was effective January 1, 2011. Under the agreement, NPG provides
certain services supporting the operation of our television station in Idaho Falls, KIDK-TV, and sells substantially all of the commercial advertising on our station. We pay NPG a fixed fee pursuant to the agreement, and a performance bonus based on
station performance. Contemporaneously with the JSA, we entered into an option agreement with NPG, whereby they have a conditional option to acquire KIDK-TV from us until January 1, 2021, effective on the expiration or termination of the
indenture governing our Senior Notes. KIDK-TV is consolidated into our unaudited condensed consolidated statements. We have determined that we are deemed to have a controlling financial interest in KIDK-TV for financial reporting purposes as we do
maintain ultimate control over the policies and/or operations of the station that could most significantly impact the station. Advertising revenues earned under this JSA are recorded as revenue and JSA fees and programming expenses are recorded as
operating costs.

ACME Agreement.In March 2010, we entered into a three year consulting and license agreement with
ACME Television, LLC (ACME) which was effective April 1, 2010. Under the terms of the agreement we provide consulting services to ACMEs The Daily Buzz television show and we also license certain assets of the program in
order to produce unique content to be distributed on both traditional broadcast and newly created digital platforms. In conjunction with the agreement, we were granted an option to purchase the ownership rights to The Daily Buzz television
show until September 30, 2012. Due to the terms of the agreement and uncertainties associated with the exercise of our option agreement, The Daily Buzz television show does not meet the criteria for consolidation. Revenue earned under
this agreement is recorded in revenue and programming and other expenses are recorded in operating costs.

Repurchase of Senior Notes.In January 2011, we repurchased $2.6 million aggregate principal amount of our 8.625% senior notes due
in 2014 for a total consideration of $2.7 million in cash plus accrued interest of $78,000. We recorded a loss on extinguishment of debt, including a $35,000 charge for related unamortized debt issuance costs, of approximately $110,000 for the three
months ended March 31, 2011.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements,
which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets,
liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates including, but not limited to, those affecting revenue, goodwill, intangibles and television and
broadcast rights impairment, the useful lives of tangible and intangible assets, valuation allowances for deferred tax assets, accounts receivable and broadcast rights, stock-based compensation expense, income tax provisions and contingencies. We
base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form our basis for making judgments about the carrying values of assets and liabilities that
are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, or if management made different judgments or utilized different estimates. Many of our estimates or judgments are
based on anticipated future events or performance, and as such are forward-looking in nature, and are subject to many risks and uncertainties, including those discussed in our Annual Report on Form 10-K for the year ended December 31, 2010 and
elsewhere in this quarterly report on Form 10-Q. Except as otherwise required by law, we do not undertake any obligation to update or revise this discussion to reflect any future events or circumstances.

For a detailed discussion of our critical accounting policies and estimates, please refer to our Annual Report on Form 10-K for the year
ended December 31, 2010.

There have been no material changes in the application of our critical accounting policies and
estimates subsequent to that report except for those discussed below. We have discussed the development and selection of these critical accounting estimates with the Audit Committee of our Board of Directors.

As part of our ongoing review of property, plant and equipment asset lives, we determined that the asset lives of certain machinery and
equipment categories should be increased, the increase in the lives ranged from one to ten years depending on the category. A change in depreciation method is considered a change in accounting estimate and we adjusted the remaining lives of existing
assets effective January 1, 2011 and as a result we expect that future depreciation will be lower than in the prior periods. The



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impact of this change in estimate for the three months ended March 31, 2011 decreased our pre-tax loss from operations by approximately $800,000, decreased net loss by approximately $512,000
and decreased diluted net loss per share by $0.06.

Consolidated Results of Operations

We report financial data for three reportable segments: television, radio and Fisher Plaza. The television segment includes the operations
of our 20 owned and/or operated television stations (including a 50%-owned television station) and our internet business. The radio segment includes the operations of our eight radio stations and two managed radio stations. The Fisher Plaza segment
consists of the operations of Fisher Plaza, a retail, office and communications center located near downtown Seattle that serves as the home of our Seattle-based television and radio operations, our corporate offices and third-party tenants.
Fisher-owned entities that reside at Fisher Plaza do not pay rent or common area maintenance expenses. The segment data includes an allocation of depreciation and certain operating expenses from Fisher Plaza to our television and radio segments, and
certain corporate expenses are allocated to our television and radio segments on a pro-rata basis. The other segment includes corporate and administrative expenses that are not attributable to the operations of the television, radio or Fisher Plaza
segments.

The following table sets forth our results of operations for the three months ended March 31, 2011 and 2010,
including the dollar and percentage variances between such periods. Percentage variances have been omitted where they are not considered meaningful.



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|                                             |  |                             |        |   |                   |   |        |   |  |   |        |   |  |  |      |  
|-------------------------------------------- |  | --------------------------- | ------ | - | ----------------- | - | ------ | - |  | - | ------ | - |  |  | ---- | -
|                                             |  | Three months endedMarch 31, |        |   | 2011-2010Variance |  
|(in thousands)                               |  | 2011                        |        |   | 2010              |   |        | $ |  |   | %      |  
|Revenue                                      |  |                             |        |   |                   |   |        |   |  |   |        |   |  |  |      |  
|Television                                   |  | $                           | 29,101 |   |                   | $ | 26,585 |   |  | $ | 2,516  |   |  |  | 9    | %
|Radio                                        |  |                             | 5,218  |   |                   |   | 5,255  |   |  |   | (37    | ) |  |  | -1   | %
|Fisher Plaza                                 |  |                             | 3,697  |   |                   |   | 3,518  |   |  |   | 179    |   |  |  | 5    | %
|Other                                        |  |                             | (104   | ) |                   |   | (17    | ) |  |   | (87    | ) |  |  | -512 | %
|                                             |  |                             |        |   |                   |   |        |   |  |   |        |   |  |  |      |  
|Consolidated                                 |  |                             | 37,912 |   |                   |   | 35,341 |   |  |   | 2,571  |   |  |  | 7    | %
|Direct operating costs                       |  |                             |        |   |                   |   |        |   |  |   |        |   |  |  |      |  
|Television                                   |  |                             | 13,823 |   |                   |   | 13,032 |   |  |   | 791    |   |  |  | 6    | %
|Radio                                        |  |                             | 2,620  |   |                   |   | 2,417  |   |  |   | 203    |   |  |  | 8    | %
|Fisher Plaza                                 |  |                             | 837    |   |                   |   | 1,017  |   |  |   | (180   | ) |  |  | -18  | %
|Other                                        |  |                             | 477    |   |                   |   | 551    |   |  |   | (74    | ) |  |  | -13  | %
|                                             |  |                             |        |   |                   |   |        |   |  |   |        |   |  |  |      |  
|Consolidated                                 |  |                             | 17,757 |   |                   |   | 17,017 |   |  |   | 740    |   |  |  | 4    | %
|Selling, general and administrative expenses |  |                             |        |   |                   |   |        |   |  |   |        |   |  |  |      |  
|Television                                   |  |                             | 8,429  |   |                   |   | 8,426  |   |  |   | 3      |   |  |  | 0    | %
|Radio                                        |  |                             | 2,615  |   |                   |   | 2,751  |   |  |   | (136   | ) |  |  | -5   | %
|Fisher Plaza                                 |  |                             | 116    |   |                   |   | 241    |   |  |   | (125   | ) |  |  | -52  | %
|Other                                        |  |                             | 3,866  |   |                   |   | 2,128  |   |  |   | 1,738  |   |  |  | 82   | %
|                                             |  |                             |        |   |                   |   |        |   |  |   |        |   |  |  |      |  
|Consolidated                                 |  |                             | 15,026 |   |                   |   | 13,546 |   |  |   | 1,480  |   |  |  | 11   | %
|Amortization of program rights               |  |                             |        |   |                   |   |        |   |  |   |        |   |  |  |      |  
|Television                                   |  |                             | 2,970  |   |                   |   | 2,970  |   |  |   |       |   |  |  | 0    | %
|Radio                                        |  |                             |       |   |                   |   |       |   |  |   |       |   |  |  |     |  
|                                             |  |                             |        |   |                   |   |        |   |  |   |        |   |  |  |      |  
|Consolidated                                 |  |                             | 2,970  |   |                   |   | 2,970  |   |  |   |       |   |  |  | 0    | %
|Depreciation and amortization                |  |                             |        |   |                   |   |        |   |  |   |        |   |  |  |      |  
|Television                                   |  |                             | 1,552  |   |                   |   | 2,382  |   |  |   | (830   | ) |  |  | -35  | %
|Radio                                        |  |                             | 135    |   |                   |   | 194    |   |  |   | (59    | ) |  |  | -30  | %
|Fisher Plaza                                 |  |                             | 764    |   |                   |   | 780    |   |  |   | (16    | ) |  |  | -2   | %
|Other                                        |  |                             | 218    |   |                   |   | 294    |   |  |   | (76    | ) |  |  | -26  | %
|                                             |  |                             |        |   |                   |   |        |   |  |   |        |   |  |  |      |  
|Consolidated                                 |  |                             | 2,669  |   |                   |   | 3,650  |   |  |   | (981   | ) |  |  | -27  | %
|Plaza fire reimbursements, net               |  |                             |        |   |                   |   |        |   |  |   |        |   |  |  |      |  
|Fisher Plaza                                 |  |                             | (78    | ) |                   |   | (91    | ) |  |   | 13     |   |  |  | 14   | %
|                                             |  |                             |        |   |                   |   |        |   |  |   |        |   |  |  |      |  
|Consolidated                                 |  |                             | (78    | ) |                   |   | (91    | ) |  |   | 13     |   |  |  | 14   | %
|Gain on asset exchange, net                  |  |                             |        |   |                   |   |        |   |  |   |        |   |  |  |      |  
|Television                                   |  |                             |       |   |                   |   | (940   | ) |  |   | 940    |   |  |  | 100  | %
|                                             |  |                             |        |   |                   |   |        |   |  |   |        |   |  |  |      |  
|Consolidated                                 |  |                             |       |   |                   |   | (940   | ) |  |   | 940    |   |  |  | 100  | %
|Income (loss) from operations                |  |                             |        |   |                   |   |        |   |  |   |        |   |  |  |      |  
|Television                                   |  |                             | 2,327  |   |                   |   | 715    |   |  |   | 1,612  |   |  |  | 225  | %
|Radio                                        |  |                             | (152   | ) |                   |   | (107   | ) |  |   | (45    | ) |  |  | -42  | %
|Fisher Plaza                                 |  |                             | 2,058  |   |                   |   | 1,571  |   |  |   | 487    |   |  |  | 31   | %
|Other                                        |  |                             | (4,665 | ) |                   |   | (2,990 | ) |  |   | (1,675 | ) |  |  | -56  | %
|                                             |  |                             |        |   |                   |   |        |   |  |   |        |   |  |  |      |  
|Consolidated                                 |  |                             | (432   | ) |                   |   | (811   | ) |  |   | 379    |   |  |  | 47   | %
|Loss on extinguishment of senior notes, net  |  |                             | (110   | ) |                   |   |       |   |  |   | (110   | ) |  |  |     |  
|Other income, net                            |  |                             | 80     |   |                   |   | 57     |   |  |   | 23     |   |  |  | 40   | %
|Interest expense                             |  |                             | (2,247 | ) |                   |   | (2,672 | ) |  |   | 425    |   |  |  | 16   | %
|                                             |  |                             |        |   |                   |   |        |   |  |   |        |   |  |  |      |  
|Loss before income taxes                     |  |                             | (2,709 | ) |                   |   | (3,426 | ) |  |   | 717    |   |  |  | 21   | %
|Benefit for income taxes                     |  |                             | (982   | ) |                   |   | (1,247 | ) |  |   | 265    |   |  |  | 21   | %
|                                             |  |                             |        |   |                   |   |        |   |  |   |        |   |  |  |      |  
|Net loss                                     |  | $                           | (1,727 | ) |                   | $ | (2,179 | ) |  | $ | 452    |   |  |  | 21   | %
|                                             |  |                             |        |   |                   |   |        |   |  |   |        |   |  |  |      |  

Comparison of Three months ended March 31, 2011 and 2010

Revenue

The following table sets forth our main types of revenue by segment for the three months ended March 31, 2011 and 2010;



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|                                      |  |                              |        |   |         |  |     |                |  |  |      |   |  |                |        |   |  |  |     |  
|------------------------------------- |  | ---------------------------- | ------ | - | ------- |  | --- | -------------- |  |  | ---- | - |  | -------------- | ------ | - |  |  | --- | -
|                                      |  | Three months ended March 31, |       
|                                      |  | 2011                         |        |   | %change |  |     | % totalrevenue |  |  | 2010 |   |  | % totalrevenue |       
|Core advertising (local and national) |  | $                            | 22,751 |   |         |  | 9   | %              |  |  | 60   | % |  | $              | 20,952 |   |  |  | 59  | %
|Political                             |  |                              | 88     |   |         |  | -88 | %              |  |  | 0    | % |  |                | 752    |   |  |  | 2   | %
|Internet                              |  |                              | 1,178  |   |         |  | 89  | %              |  |  | 3    | % |  |                | 623    |   |  |  | 2   | %
|Retransmission                        |  |                              | 3,302  |   |         |  | 25  | %              |  |  | 9    | % |  |                | 2,644  |   |  |  | 7   | %
|Trade, barter and other               |  |                              | 1,782  |   |         |  | 10  | %              |  |  | 5    | % |  |                | 1,614  |   |  |  | 5   | %
|                                      |  |                              |        |   |         |  |     |                |  |  |      |   |  |                |        |   |  |  |     |  
|TV                                    |  |                              | 29,101 |   |         |  | 9   | %              |  |  | 77   | % |  |                | 26,585 |   |  |  | 75  | %
|Core advertising (local and national) |  |                              | 4,918  |   |         |  | 0   | %              |  |  | 13   | % |  |                | 4,909  |   |  |  | 14  | %
|Political                             |  |                              | 34     |   |         |  | -31 | %              |  |  | 0    | % |  |                | 49     |   |  |  | 0   | %
|Trade, barter and other               |  |                              | 266    |   |         |  | -10 | %              |  |  | 1    | % |  |                | 297    |   |  |  | 1   | %
|                                      |  |                              |        |   |         |  |     |                |  |  |      |   |  |                |        |   |  |  |     |  
|Radio                                 |  |                              | 5,218  |   |         |  | -1  | %              |  |  | 14   | % |  |                | 5,255  |   |  |  | 15  | %
|Plaza                                 |  |                              | 3,697  |   |         |  | 5   | %              |  |  | 10   | % |  |                | 3,518  |   |  |  | 10  | %
|Other                                 |  |                              | (104   | ) |         |  | 512 | %              |  |  | 0    | % |  |                | (17    | ) |  |  | 0   | %
|                                      |  |                              |        |   |         |  |     |                |  |  |      |   |  |                |        |   |  |  |     |  
|Total Revenue                         |  | $                            | 37,912 |   |         |  | 7   | %              |  |  | 100  | % |  | $              | 35,341 |   |  |  | 100 | %
|                                      |  |                              |        |   |         |  |     |                |  |  |      |   |  |                |        |   |  |  |     |  

Television. Television revenue increased $2.5 million, or 9%, in 2011 as compared to 2010, primarily
due to increases in core advertising, continued growth in internet advertising and retransmission revenue.

Automotive-related
advertising, one of our largest advertising categories, increased 27% for the three months ended March 31, 2011 as compared to the same period in 2010. Other categories including professional services (increased 7%) and telecommunications
(increased 7%) have also shown improvement as compared to the same period 2010.

Revenue from our ABC-affiliated stations
increased 7% in the three months ended March 31, 2011 compared to the same period in 2010, primarily due to increases in core advertising and retransmission revenue. Revenue from our CBS-affiliated stations remained flat for the three months
ended March 31, 2011 compared to the same period in 2010 as a result of growth in local advertising and retransmission revenue, offset by a decline in national advertising revenue.

Radio. Radio revenue declined by 1% in the three months ended March 31, 2011 compared to the same period in 2010, due to a
decrease in political and trade revenue.

Fisher Plaza. Revenue increased 5% in the three months ended March 31,
2011 compared to the same period in 2010, primarily due to increased rental revenue and increased fees for our telecom facilities. As of March 31, 2011, approximately 96% of Fisher Plaza was occupied or committed for occupancy (41% was occupied
by Fisher entities).

Direct operating costs

Direct operating costs consist primarily of costs to produce and promote broadcast programming for the television and radio segments, and
costs to operate Fisher Plaza. Many of these costs are relatively fixed in nature and do not necessarily vary on a proportional basis with revenue.

Direct operating costs for the television segment increased $791,000, or 6%, in the three months ended March 31, 2011 compared to the same period in 2010. The increase reflects an increase in costs
related to the continued development and expansion of our internet business.

Direct operating costs increased for the radio
segment $203,000, or 8%, in the three months ended March 31, 2011 compared to the same period in 2010. The increase was primarily due to advertising fees incurred for promotional spots for our Seattle Radio stations.

Direct operating costs decreased at Fisher Plaza $180,000, or 18%, in the three months ended March 31, 2011 compared to the same
period in 2010, primarily due to timing of planned maintenance activities and tenant reimbursements for utilities.

The other
category consists primarily of the reclassification and elimination of certain operating expenses between operating segments. For example, KOMO TV and our Seattle-based radio stations recognize facilities-related expenses as selling, general and
administrative expenses, while Fisher Plaza records the reimbursement of these intercompany expenses as a reduction of direct operating costs.



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Selling, general and administrative expenses

Selling, general and administrative expenses in our television segment in the three months ended March 31, 2011 slightly increased
compared to the same period in 2010 as a result of an increase in bad debt reserve and news rating service costs, offset by a credit related to accrued vacation.

The decrease of $136,000, or 5%, in selling, general and administrative expenses in our radio segment in the three months ended March 31, 2011 compared to the same period in 2010 was primarily due to
a decrease in salaries related to our format change in late 2010 at KVI.

Selling, general and administrative expenses
decreased $125,000, or 52%, at Fisher Plaza in the three months ended March 31, 2011 compared to the same period in 2010 due to a loss on disposal of assets that was incurred in 2010.

Other selling, general and administrative expenses increased $1.7 million in the three months ended March 31, 2011 compared to the
same period in 2010 primarily due to an increase of $774,000 related to costs incurred as a result of the ongoing proxy contest initiated by FrontFour Capital Group, the resumption of our matching contributions to the 401(k) plan for employees,
severance costs and costs associated with our accrued retirement benefits plan.

Amortization of program rights

Amortization of program rights for our television segment was $3.0 million in both the three months ended
March 31, 2011 and March 31, 2010.

Depreciation and amortization

Depreciation and amortization for our television segment decreased $830,000 in the three months ended March 31, 2011 compared to the
same period in 2010 primarily due to the change in fixed asset lives and significantly lower capital expenditures in 2011. Refer to Note 2 of our condensed consolidated financial statements for further discussion of the change in fixed asset lives.

Depreciation and amortization for our radio segment decreased $59,000 in the three months ended March 31, 2011 compared
to the same period in 2010, primarily due to the change in fixed asset lives.

Depreciation and amortization for our Fisher
Plaza segment decreased $16,000 compared to the same period in 2010.

Other depreciation and amortization decreased $76,000 in
the three months ended March 31, 2011 compared to the same period in 2010, primarily due to the change in fixed asset lives.

Plaza fire reimbursements, net

Plaza fire reimbursements, net of
$78,000 and $91,000 represent net insurance reimbursements related to the July 2009 Fisher Plaza fire received in the three months ended March 31, 2011 and 2010, respectively.

Gain on asset exchange, net

Gain on asset exchange, net was $940,000 for the three months ended March 31, 2010. This amount represents the substitute equipment received from Sprint Nextel and the costs of installing the
equipment. Upon installation and use of the equipment, the gain net of disposals was recorded.

Other income, net

Other income, net, typically consists of interest and other miscellaneous income received. The increase of $23,000, or
40%, in other income, net in the three months ended March 31, 2011 compared to the same period in 2010 was primarily due to an insurance reimbursement received in March 2011 related to a vehicle damaged in an accident.

Loss on extinguishment of senior notes, net

During the three months ended March 31, 2011, we repurchased $2.6 million aggregate principal amount of our Senior Notes for total consideration of $2.7 million in cash plus accrued interest of
$78,000. A loss on extinguishment of debt of $110,000 was recorded including a charge for related unamortized debt issuance costs of $35,000. We did not repurchase any of our Senior Notes during the three months ended March 31, 2010.



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Interest expense

Interest expense consists primarily of interest on our Senior Notes and amortization of the related financing fees. Interest expense in
the three months ended March 31, 2011 decreased $425,000 from the same period in 2010, primarily due to the decline of $23.2 million in the outstanding principal balance following our repurchase of Senior Notes during 2010 and 2011.

Provision (benefit) for income taxes

Our effective tax rate was 36% for both the three months ended March 31, 2011 and 2010. Our effective tax rate is calculated on the statutory rate of 35%, adjusted for estimated permanent
differences, including non-deductible expenses, and changes in discrete or other non-recurring items, including federal or state tax audit adjustments. We record our income tax provision or benefit based upon our estimated annual effective tax rate.

Consistent with prior years, we recorded a full valuation allowance against our state deferred tax assets, as it is not more
likely than not that a tax benefit for the deferred tax assets will be recognized based upon all available evidence. As a result, the our effective tax rate is not affected by changes in state rates.

Liquidity and Capital Resources

Liquidity

Our liquidity is primarily dependent upon cash and cash
equivalents and net cash generated from operating activities. Our net cash generated from operating activities is sensitive to many factors, including changes in working capital and the timing and magnitude of capital expenditures. Working capital
at any specific point in time is dependent upon many variables, including operating results, receivables and the timing of cash receipts and payments.

We expect cash flows from operations and our cash and cash equivalents to provide sufficient liquidity to meet our cash requirements for operations, projected working capital requirements and planned
capital expenditures and commitments for at least the next 12 months. In the future, we may obtain a credit facility depending on market conditions and our current needs.

During the second quarter of 2011, we redeemed $20.0 million aggregate principal amount of our Senior Notes for approximately $20.7 million in cash plus accrued interest.

Capital Resources

Cash and cash equivalents were approximately $50.3 million as of March 31, 2011 compared to cash and cash equivalents of $52.9 million as of December 31, 2010. The decrease in cash and cash
equivalents of $2.6 million was primarily due to a repurchase of our senior notes of $2.7 million during the three months ended March 31, 2011.

As of March 31, 2011, we had outstanding $98.8 million aggregate principal amount of our Senior Notes. See Description of Indebtedness below. The Senior Notes Indenture contains certain
restrictive and financial covenants applicable to our business, and we analyze our compliance with those covenants on an ongoing basis. We were in compliance with the debt covenant requirements at March 31, 2011 and December 31, 2010.

Net cash provided by operating activities

Net cash provided by operating activities for the three months ended March 31, 2011 of $1.1 million consists of our net loss of $1.7
million, adjusted for non-cash charges of $5.9 million, which consisted primarily of depreciation and amortization, amortization of broadcast rights and stock-based compensation, and a $151,000 increase in working capital, which includes $2.4
million received on an annuity contract of a retiree, offset by $3.2 million of payments for broadcast rights.

Net cash
provided by operating activities for the three months ended March 31, 2010 of $3.5 million consists of our net loss of $2.2 million, adjusted for non-cash charges of $5.8 million, which consisted primarily of depreciation and amortization,
amortization of broadcast rights, stock-based compensation, loss on disposal of fixed assets and gain on exchange of assets, offset by $3.1 million of payments for broadcast rights and changes in working capital, most notably the decrease of
receivables of $2.2 million, decrease in prepaid and other current assets of $1.9 million, increase in accounts payable and other accrued liabilities of $3.0 million, increase in income taxes receivable of $1.2 million and decrease of interest
payable of $3.0 million.

Net cash used in investing activities

During the three months ended March 31, 2011, cash flows used in investing activities of $747,000 consisted primarily of $743,000 in
purchases of property, plant and equipment.

During the three months ended March 31, 2010, cash flows used in investing
activities consisted primarily of $3.3 million in purchases of property, plant and equipment, offset by $75,000 from the consolidation of an equity investee.



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Net cash used in financing activities

Net cash used in financing activities for the three months ended March 31, 2011 was $3.0 million primarily due to the retirement of
$2.6 million aggregate principal amount of our Senior Notes for total consideration of $2.7 million and net share settlement for employee stock compensation tax withholding obligations of $349,000.

Net cash used in financing activities for the three months ended March 31, 2010 was $145,000, which was comprised of payments on
capital lease agreements and net share settlement for employee stock compensation tax withholding obligations.

Description of Indebtedness

At March 31, 2011, we had $98.8 million aggregate principal amount of our Senior Notes outstanding. The Senior Notes
are fully and unconditionally guaranteed, jointly and severally, on an unsecured, senior basis by our current and future material domestic subsidiaries. Interest on the Senior Notes is payable semiannually in arrears on March 15 and
September 15 of each year. The Senior Notes are due on September 15, 2014.

The indenture governing our Senior Notes
contains provisions that limit our ability to distribute proceeds from asset sales. In the event that we do not use the proceeds from asset sales for qualifying purposes (as specified in the indenture) within 360 days from the date of sale, we
will be required to offer to repurchase outstanding Senior Notes at par value to the extent of such unused proceeds. Under the indenture, qualifying purposes include: (i) repayment of secured indebtedness; (ii) purchase of assets used or
useful in our business; (iii) certain acquisitions of other companies; (iv) expenditures used or useful in our business; and (v) certain investments in our company or our subsidiaries. We were in compliance with the debt covenant
requirements at March 31, 2011 and December 31, 2010.

We are subject to various debt covenants and other
restrictions under the indenture, including the requirement for early payments upon the occurrence of certain events, the violation of which could require repayment of the Senior Notes and affect our credit rating and access to other financing.

Recent Accounting Pronouncements

In August 2010, the FASB issued an exposure draft on lease accounting that would require entities to recognize assets and liabilities arising from lease contracts on the balance sheet. The proposed
exposure draft states that lessees and lessors should apply a right-of-use model in accounting for all leases. Under the proposed model, lessees would recognize an asset for the right to use the leased asset, and a liability for the
obligation to make rental payments over the lease term. The lease term is defined as the longest possible term that is more likely than not to occur. The accounting by a lessor would reflect its retained exposure to the risks or benefits
of the underlying leased asset. A lessor would recognize an asset representing its right to receive lease payments based on the expected term of the lease. Comments on this exposure draft were due by December 15, 2010 and the final standard is
expected to be issued before the end of 2011. We have not yet evaluated the impact, if any, this proposed standard will have on our consolidated financial statements.



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|ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|------- | ----------------------------------------------------------

The market risk in our financial instruments represents the potential loss arising from adverse changes in financial rates. We are exposed to market risk primarily in the area of interest rates. This
exposure is directly related to our normal funding activities.

At March 31, 2011 and December 31, 2010, all of our
debt was at a fixed rate and totaled $98.8 million and $101.4 million, respectively. The fair market value of long-term fixed interest rate debt is subject to interest rate risk. Generally, the fair market value of fixed interest rate debt will
increase as interest rates fall and decrease as interest rates rise. The estimated fair value of our long-term debt at March 31, 2011 was approximately $101.5 million, which was approximately $2.7 million more than its carrying value. The
estimated fair value of our long-term debt at December 31, 2010 was approximately $104.2 million, which was approximately $2.8 million more than its carrying value. Market risk is estimated as the potential change in fair value resulting from a
hypothetical 10% change in interest rates and, as of March 31, 2011, amounted to $2.7 million. Fair market values are determined based on market quotes by brokers. For fixed rate debt, interest rate changes do not impact financial position,
operations or cash flows.



|ITEM 4. | CONTROLS AND PROCEDURES
|------- | -----------------------

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act)) as of the end of our fiscal quarter ended March 31, 2011. Based on their
evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of our fiscal quarter ended March 31, 2011, our disclosure controls and procedures were effective in ensuring that the information required
to be disclosed by us in the reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the SECs rules and forms, and (ii) accumulated and
communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject
to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

We made no change in our internal control over financial reporting during the fiscal quarter ended March 31, 2011 that has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting. We intend to continue to refine our internal control over financial reporting on an ongoing basis, as we deem appropriate with a view towards continuous improvement.



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PART II

OTHER INFORMATION



|ITEM 1. | LEGAL PROCEEDINGS
|------- | -----------------

We are
parties to various claims, legal actions and complaints in the ordinary course of our businesses. In managements opinion, all such matters are adequately covered by insurance, are without merit or are of such kind, or involve such amounts,
that unfavorable disposition would not have a material adverse effect on our consolidated financial position, results of operations or cash flows.



|ITEM 1A. | RISK FACTORS
|-------- | ------------

There have
not been any material changes to the risk factors set forth in Part 1, Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2010, filed with the Securities and Exchange Commission on March 8, 2011.



|ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|------- | -----------------------------------------------------------

None.



|ITEM 3. | DEFAULTS UPON SENIOR SECURITIES
|------- | -------------------------------

None.



|ITEM 4. | (REMOVED AND RESERVED)
|------- | ----------------------

None.



|ITEM 5. | OTHER INFORMATION
|------- | -----------------

None.



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|ITEM 6. | EXHIBITS
|------- | --------



|      |  |                                                                                                                                                                                                                 
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1+ |  | Summary of Non-Employee Director Equity Compensation Program (filed herewith).                                                                                                                                  
|      | 
|10.2+ |  | Form of Restricted Stock Unit Award Notice and Agreement for grants made to non-employee directors pursuant to the Fisher Communications, Inc. Amended and Restated 2008 Equity
Incentive Plan (filed herewith).
|      | 
|31.1  |  | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.                                                                                                                                              
|      | 
|31.2  |  | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.                                                                                                                                              
|      | 
|32.1  |  | Section 1350 Certification of Chief Executive Officer.                                                                                                                                                          
|      | 
|32.2  |  | Section 1350 Certification of Chief Financial Officer.                                                                                                                                                          



|+ | Management contract or compensatory plan or arrangement.
|- | --------------------------------------------------------



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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.



|                   |  |                                                                                                                                    
|------------------ |  | -----------------------------------------------------------------------------------------------------------------------------------
|                   |  | FISHER COMMUNICATIONS, INC.                                                                                                        
|                   | 
|Date: May 10, 2011 |  | /S/    HASSAN N.
NATHA                                                                                                             
|                   |  | Hassan N. Natha Vice President and Chief Financial Officer
(Signing on behalf of the registrant and as Principal Financial Officer)



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EXHIBIT INDEX



|            |  |                                                                                                                                                                                                                 
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit
No. |  | Description                                                                                                                                                                                                     
|            | 
|10.1+       |  | Summary of Non-Employee Director Equity Compensation Program (filed herewith).                                                                                                                                  
|            | 
|10.2+       |  | Form of Restricted Stock Unit Award Notice and Agreement for grants made to non-employee directors pursuant to the Fisher Communications, Inc. Amended and Restated 2008 Equity
Incentive Plan (filed herewith).
|            | 
|31.1        |  | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.                                                                                                                                              
|            | 
|31.2        |  | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.                                                                                                                                              
|            | 
|32.1        |  | Section 1350 Certification of Chief Executive Officer.                                                                                                                                                          
|            | 
|32.2        |  | Section 1350 Certification of Chief Financial Officer.                                                                                                                                                          



|+ | Management contract or compensatory plan or arrangement.
|- | --------------------------------------------------------



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