##### 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 September 30, 2009

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 of Incorporation or Organization) |  | (I.R.S. Employer Identification Number)

100 Fourth Ave. N., Suite 510

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 November 4, 2009: 8,855,735









---

##### 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 and nine months ended September 30, 2009 and 2008         |  | 3 
|                                                                                                                               |  |                                                                                                                            
|2.                                                                                                                             |  | Condensed Consolidated Balance Sheets:September 30, 2009 (unaudited) and December 31, 2008                                  |  | 4 
|                                                                                                                               |  |                                                                                                                            
|3.                                                                                                                             |  | Condensed Consolidated Statements of Cash Flows (unaudited):Nine months ended September 30, 2009 and 2008                   |  | 5 
|                                                                                                                               |  |                                                                                                                            
|4.                                                                                                                             |  | Condensed Consolidated Statements of Comprehensive Loss (unaudited):Three and nine months ended September 30, 2009 and 2008 |  | 6 
|                                                                                                                               |  |                                                                                                                            
|5.                                                                                                                             |  | Notes to Condensed Consolidated Financial Statements (unaudited)                                                            |  | 7 
|                                                                                                                               |  |                                                                                                                            
|Item 2.                                                                                                                        |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                       |  | 20
|                                                                                                                               |  |                                                                                                                            
|Item 3.                                                                                                                        |  | Quantitative and Qualitative Disclosures About Market Risk                                                                  |  | 28
|                                                                                                                               |  |                                                                                                                            
|Item 4.                                                                                                                        |  | Controls and Procedures                                                                                                     |  | 28
|                                                                                                                               | 
|PART II                                                                                                                        |  |                                                                                                                            
|OTHER INFORMATION                                                                                                              |  |                                                                                                                            
|                                                                                                                               |  |                                                                                                                            
|Item 1.                                                                                                                        |  | Legal Proceedings                                                                                                           |  | 29
|                                                                                                                               |  |                                                                                                                            
|Item 1A.                                                                                                                       |  | Risk Factors                                                                                                                |  | 29
|                                                                                                                               |  |                                                                                                                            
|Item 2.                                                                                                                        |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                                 |  | 29
|                                                                                                                               |  |                                                                                                                            
|Item 3.                                                                                                                        |  | Defaults Upon Senior Securities                                                                                             |  | 29
|                                                                                                                               |  |                                                                                                                            
|Item 4.                                                                                                                        |  | Submission of Matters to a Vote of Security Holders                                                                         |  | 29
|                                                                                                                               |  |                                                                                                                            
|Item 5.                                                                                                                        |  | Other Information                                                                                                           |  | 29
|                                                                                                                               |  |                                                                                                                            
|Item 6.                                                                                                                        |  | Exhibits                                                                                                                    |  | 30
|                                                                                                                               | 
|SIGNATURES                                                                                                                     |  | 31                                                                                                                         
|                                                                                                                               | 
|EXHIBIT INDEX                                                                                                                  |  | 32                                                                                                                         



2



---

##### Table of Contents

Fisher Communications, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)



|                                                             |  |                               |         |   |                                |   |         |      |  |   |        |   |  |   |        |  
|------------------------------------------------------------ |  | ----------------------------- | ------- | - | ------------------------------ | - | ------- | ---- |  | - | ------ | - |  | - | ------ | -
|                                                             |  | Nine months endedSeptember 30 |         |   | Three months endedSeptember 30 |  
|(in thousands, except per-share amounts)                     |  | 2009                          |         |   | 2008                           |   |         | 2009 |  |   | 2008   |  
|Revenue                                                      |  | $                             | 95,023  |   |                                | $ | 126,046 |      |  | $ | 34,527 |   |  | $ | 42,297 |  
|                                                             |  |                               |         |   |                                |   |         |      |  |   |        |   |  |   |        |  
|Operating expenses                                           |  |                               |         |   |                                |   |         |      |  |   |        |   |  |   |        |  
|Direct operating costs                                       |  |                               | 47,948  |   |                                |   | 52,679  |      |  |   | 16,270 |   |  |   | 17,589 |  
|Selling, general and administrative expenses                 |  |                               | 36,854  |   |                                |   | 50,076  |      |  |   | 11,900 |   |  |   | 14,887 |  
|Amortization of program rights                               |  |                               | 7,084   |   |                                |   | 16,818  |      |  |   | 2,507  |   |  |   | 7,357  |  
|Depreciation and amortization                                |  |                               | 10,173  |   |                                |   | 9,290   |      |  |   | 3,450  |   |  |   | 3,077  |  
|Plaza fire expenses, net                                     |  |                               | 3,951   |   |                                |   |        |      |  |   | 3,951  |   |  |   |       |  
|                                                             |  |                               |         |   |                                |   |         |      |  |   |        |   |  |   |        |  
|                                                             |  |                               | 106,010 |   |                                |   | 128,863 |      |  |   | 38,078 |   |  |   | 42,910 |  
|                                                             |  |                               |         |   |                                |   |         |      |  |   |        |   |  |   |        |  
|Loss from operations                                         |  |                               | (10,987 | ) |                                |   | (2,817  | )    |  |   | (3,551 | ) |  |   | (613   | )
|Gain on extinguishment of senior notes, net                  |  |                               | 2,965   |   |                                |   |        |      |  |   |       |   |  |   |       |  
|Other income, net                                            |  |                               | 1,221   |   |                                |   | 155,808 |      |  |   | 392    |   |  |   | 50,046 |  
|Interest expense                                             |  |                               | (8,917  | ) |                                |   | (10,343 | )    |  |   | (2,714 | ) |  |   | (3,441 | )
|                                                             |  |                               |         |   |                                |   |         |      |  |   |        |   |  |   |        |  
|Income (loss) from continuing operations before income taxes |  |                               | (15,718 | ) |                                |   | 142,648 |      |  |   | (5,873 | ) |  |   | 45,992 |  
|Provision (benefit) for income taxes                         |  |                               | (5,309  | ) |                                |   | 49,545  |      |  |   | (1,863 | ) |  |   | 15,999 |  
|                                                             |  |                               |         |   |                                |   |         |      |  |   |        |   |  |   |        |  
|Income (loss) from continuing operations                     |  |                               | (10,409 | ) |                                |   | 93,103  |      |  |   | (4,010 | ) |  |   | 29,993 |  
|Loss from discontinued operations, net of income taxes       |  |                               |        |   |                                |   | (720    | )    |  |   |       |   |  |   | (218   | )
|                                                             |  |                               |         |   |                                |   |         |      |  |   |        |   |  |   |        |  
|Net income (loss)                                            |  | $                             | (10,409 | ) |                                | $ | 92,383  |      |  | $ | (4,010 | ) |  | $ | 29,775 |  
|                                                             |  |                               |         |   |                                |   |         |      |  |   |        |   |  |   |        |  
|Income (loss) per share:                                     |  |                               |         |   |                                |   |         |      |  |   |        |   |  |   |        |  
|From continuing operations                                   |  | $                             | (1.19   | ) |                                | $ | 10.66   |      |  | $ | (0.46  | ) |  | $ | 3.43   |  
|From discontinued operations                                 |  |                               |        |   |                                |   | (0.08   | )    |  |   |       |   |  |   | (0.02  | )
|                                                             |  |                               |         |   |                                |   |         |      |  |   |        |   |  |   |        |  
|Basic and diluted net income (loss) per share                |  | $                             | (1.19   | ) |                                | $ | 10.58   |      |  | $ | (0.46  | ) |  | $ | 3.41   |  
|                                                             |  |                               |         |   |                                |   |         |      |  |   |        |   |  |   |        |  
|Income (loss) per share assuming dilution:                   |  |                               |         |   |                                |   |         |      |  |   |        |   |  |   |        |  
|From continuing operations                                   |  | $                             | (1.19   | ) |                                | $ | 10.66   |      |  | $ | (0.46  | ) |  | $ | 3.43   |  
|From discontinued operations                                 |  |                               |        |   |                                |   | (0.08   | )    |  |   |       |   |  |   | (0.02  | )
|                                                             |  |                               |         |   |                                |   |         |      |  |   |        |   |  |   |        |  
|Net income (loss) per share assuming dilution                |  | $                             | (1.19   | ) |                                | $ | 10.58   |      |  | $ | (0.46  | ) |  | $ | 3.41   |  
|                                                             |  |                               |         |   |                                |   |         |      |  |   |        |   |  |   |        |  
|Weighted average shares outstanding                          |  |                               | 8,774   |   |                                |   | 8,731   |      |  |   | 8,778  |   |  |   | 8,733  |  
|                                                             |  |                               |         |  
|Weighted average shares outstanding assuming dilution        |  |                               | 8,774   |   |                                |   | 8,735   |      |  |   | 8,778  |   |  |   | 8,741  |  
|                                                             |  |                               |         |  
|Dividends declared per share                                 |  | $                             |        |   |                                | $ | 3.50    |      |  | $ |       |   |  | $ | 3.50   |  

See accompanying notes to condensed consolidated financial statements.



3



---

##### Table of Contents

Fisher Communications, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets



|                                                                                                                            |  |                              |         |   |                  |   |         |  
|--------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------- | ------- | - | ---------------- | - | ------- | -
|(in thousands)                                                                                                              |  | (unaudited)September 30,2009 |         |   | December 31,2008 |  
|ASSETS                                                                                                                      |  |                              |         |   |                  |   |         |  
|Current Assets                                                                                                              |  |                              |         |   |                  |   |         |  
|Cash and cash equivalents                                                                                                   |  | $                            | 49,499  |   |                  | $ | 31,835  |  
|Short-term investments                                                                                                      |  |                              |        |   |                  |   | 59,697  |  
|Receivables, net                                                                                                            |  |                              | 23,451  |   |                  |   | 26,044  |  
|Income taxes receivable                                                                                                     |  |                              | 9,435   |   |                  |   | 2,763   |  
|Deferred income taxes                                                                                                       |  |                              | 1,763   |   |                  |   | 1,763   |  
|Prepaid expenses and other assets                                                                                           |  |                              | 3,023   |   |                  |   | 2,200   |  
|Television and radio broadcast rights                                                                                       |  |                              | 10,813  |   |                  |   | 6,106   |  
|                                                                                                                            |  |                              |         |   |                  |   |         |  
|Total current assets                                                                                                        |  |                              | 97,984  |   |                  |   | 130,408 |  
|Cash value of life insurance and retirement deposits                                                                        |  |                              | 17,903  |   |                  |   | 17,425  |  
|Goodwill                                                                                                                    |  |                              | 13,293  |   |                  |   | 13,293  |  
|Intangible assets                                                                                                           |  |                              | 40,838  |   |                  |   | 41,015  |  
|Other assets                                                                                                                |  |                              | 6,104   |   |                  |   | 6,955   |  
|Deferred income taxes                                                                                                       |  |                              | 13,178  |   |                  |   | 13,757  |  
|Property, plant and equipment, net                                                                                          |  |                              | 147,299 |   |                  |   | 148,440 |  
|                                                                                                                            |  |                              |         |   |                  |   |         |  
|Total Assets                                                                                                                |  | $                            | 336,599 |   |                  | $ | 371,293 |  
|                                                                                                                            |  |                              |         |   |                  |   |         |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                        |  |                              |         |   |                  |   |         |  
|Current Liabilities                                                                                                         |  |                              |         |   |                  |   |         |  
|Trade accounts payable                                                                                                      |  | $                            | 6,124   |   |                  | $ | 4,339   |  
|Accrued payroll and related benefits                                                                                        |  |                              | 5,114   |   |                  |   | 4,301   |  
|Interest payable                                                                                                            |  |                              | 526     |   |                  |   | 3,773   |  
|Television and radio broadcast rights payable                                                                               |  |                              | 10,808  |   |                  |   | 6,124   |  
|Current portion of accrued retirement benefits                                                                              |  |                              | 1,254   |   |                  |   | 1,254   |  
|Other current liabilities                                                                                                   |  |                              | 6,445   |   |                  |   | 5,712   |  
|                                                                                                                            |  |                              |         |   |                  |   |         |  
|Total current liabilities                                                                                                   |  |                              | 30,271  |   |                  |   | 25,503  |  
|Long-term debt                                                                                                              |  |                              | 122,050 |   |                  |   | 150,000 |  
|Accrued retirement benefits                                                                                                 |  |                              | 19,401  |   |                  |   | 19,439  |  
|Other liabilities                                                                                                           |  |                              | 9,649   |   |                  |   | 11,607  |  
|                                                                                                                            |  |                             
|Stockholders Equity                                                                                                        |  |                              |         |   |                  |   |         |  
|Common stock, shares authorized 12,000,000, $1.25 par value; issued and outstanding 8,855,735 in 2009 and 8,737,281 in
2008 |  |                              | 11,070  |   |                  |   | 10,922  |  
|Capital in excess of par                                                                                                    |  |                              | 11,724  |   |                  |   | 11,140  |  
|Accumulated other comprehensive income (loss), net of income taxes:                                                         |  |                              |         |   |                  |   |         |  
|Unrealized loss on marketable securities                                                                                    |  |                              | (66     | ) |                  |   | (158    | )
|Accumulated loss                                                                                                            |  |                              | (2,505  | ) |                  |   | (2,545  | )
|Prior service cost                                                                                                          |  |                              | (149    | ) |                  |   | (178    | )
|Retained earnings                                                                                                           |  |                              | 135,154 |   |                  |   | 145,563 |  
|                                                                                                                            |  |                              |         |   |                  |   |         |  
|Total Stockholders Equity                                                                                                  |  |                              | 155,228 |   |                  |   | 164,744 |  
|                                                                                                                            |  |                              |         |   |                  |   |         |  
|Total Liabilities and Stockholders Equity                                                                                  |  | $                            | 336,599 |   |                  | $ | 371,293 |  
|                                                                                                                            |  |                              |         |   |                  |   |         |  

See accompanying notes to condensed consolidated financial statements.



4



---

##### Table of Contents

Fisher Communications, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)



|                                                                                                              |  |                                 |         |   |      |   |          |  
|------------------------------------------------------------------------------------------------------------- |  | ------------------------------- | ------- | - | ---- | - | -------- | -
|                                                                                                              |  | Nine months ended September 30, |        
|(in thousands)                                                                                                |  | 2009                            |         |   | 2008 |  
|Operating activities                                                                                          |  |                                 |         |   |      |   |          |  
|Net income (loss)                                                                                             |  | $                               | (10,409 | ) |      | $ | 92,383   |  
|Adjustments to reconcile net income (loss) to net cash used in operating activities                           |  |                                 |         |   |      |   |          |  
|Depreciation and amortization                                                                                 |  |                                 | 10,173  |   |      |   | 9,352    |  
|Loss on disposal of fixed assets destroyed in Plaza Fire                                                      |  |                                 | 1,482   |   |      |   |         |  
|Deferred income taxes                                                                                         |  |                                 | 530     |   |      |   | 7,134    |  
|Amortization of deferred financing fees                                                                       |  |                                 | 358     |   |      |   | 474      |  
|Amortization of broadcast rights                                                                              |  |                                 | 7,084   |   |      |   | 16,818   |  
|Gain on extinguishment of senior notes, net                                                                   |  |                                 | (2,965  | ) |      |   |         |  
|Payments for broadcast rights                                                                                 |  |                                 | (7,118  | ) |      |   | (15,849  | )
|Amortization of short-term investment discount                                                                |  |                                 | (303    | ) |      |   | (286     | )
|Gain on sale of marketable securities                                                                         |  |                                 |        |   |      |   | (152,610 | )
|Net non-cash contract termination fee                                                                         |  |                                 |        |   |      |   | 4,990    |  
|Amortization of non-cash contract termination fee                                                             |  |                                 | (1,096  | ) |      |   | (898     | )
|Equity in operations of equity investees                                                                      |  |                                 | 115     |   |      |   | (50      | )
|Stock-based compensation                                                                                      |  |                                 | 768     |   |      |   | 665      |  
|Other                                                                                                         |  |                                 | 109     |   |      |   | 366      |  
|Change in operating assets and liabilities                                                                    |  |                                 |         |   |      |   |          |  
|Receivables                                                                                                   |  |                                 | 2,593   |   |      |   | 779      |  
|Prepaid expenses and other current assets                                                                     |  |                                 | (823    | ) |      |   | 815      |  
|Cash value of life insurance and retirement deposits                                                          |  |                                 | (478    | ) |      |   | (667     | )
|Other assets                                                                                                  |  |                                 | (31     | ) |      |   | 1,042    |  
|Trade accounts payable, accrued payroll and related benefits, interest payable, and other current liabilities |  |                                 | (1,671  | ) |      |   | (3,370   | )
|Income taxes receivable and payable                                                                           |  |                                 | (6,673  | ) |      |   | (3,959   | )
|Accrued retirement benefits                                                                                   |  |                                 | (38     | ) |      |   | 16       |  
|Other liabilities                                                                                             |  |                                 | (721    | ) |      |   | (704     | )
|                                                                                                              |  |                                 |         |   |      |   |          |  
|Net cash used in operating activities                                                                         |  |                                 | (9,114  | ) |      |   | (43,559  | )
|                                                                                                              |  |                                 |         |   |      |   |          |  
|Investing activities                                                                                          |  |                                 |         |   |      |   |          |  
|Purchases of marketable securities                                                                            |  |                                 |        |   |      |   | (77      | )
|Purchases of short-term investments                                                                           |  |                                 |        |   |      |   | (58,909  | )
|Proceeds from sale of marketable securities                                                                   |  |                                 |        |   |      |   | 153,513  |  
|Purchase of television stations                                                                               |  |                                 |        |   |      |   | (52,365  | )
|Decrease in restricted cash                                                                                   |  |                                 |        |   |      |   | 52,365   |  
|Purchases of intangible assets                                                                                |  |                                 |        |   |      |   | (285     | )
|Redemption of short-term investments                                                                          |  |                                 | 60,000  |   |      |   |         |  
|Purchases of property, plant and equipment                                                                    |  |                                 | (8,679  | ) |      |   | (7,235   | )
|                                                                                                              |  |                                 |         |   |      |   |          |  
|Net cash provided by investing activities                                                                     |  |                                 | 51,321  |   |      |   | 87,007   |  
|                                                                                                              |  |                                 |         |   |      |   |          |  
|Financing activities                                                                                          |  |                                 |         |   |      |   |          |  
|Borrowings under borrowing agreements                                                                         |  |                                 |        |   |      |   | 21,000   |  
|Payments on borrowing agreements                                                                              |  |                                 |        |   |      |   | (21,000  | )
|Repurchase of senior notes                                                                                    |  |                                 | (24,428 | ) |      |   |         |  
|Payments on capital lease obligations                                                                         |  |                                 | (115    | ) |      |   | (107     | )
|Cash dividends paid                                                                                           |  |                                 |        |   |      |   | (30,684  | )
|                                                                                                              |  |                                 |         |   |      |   |          |  
|Net cash used in financing activities                                                                         |  |                                 | (24,543 | ) |      |   | (30,791  | )
|                                                                                                              |  |                                 |         |   |      |   |          |  
|Net increase in cash and cash equivalents                                                                     |  |                                 | 17,664  |   |      |   | 12,657   |  
|Cash and cash equivalents, beginning of period                                                                |  |                                 | 31,835  |   |      |   | 6,510    |  
|                                                                                                              |  |                                 |         |   |      |   |          |  
|Cash and cash equivalents, end of period                                                                      |  | $                               | 49,499  |   |      | $ | 19,167   |  
|                                                                                                              |  |                                 |         |   |      |   |          |  

See accompanying notes to condensed consolidated financial statements.



5



---

##### Table of Contents

Fisher Communications, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Loss

(Unaudited)



|                                                                    |  |                                 |         |   |                                  |   |          |      |  |   |        |   |  |   |         |  
|------------------------------------------------------------------- |  | ------------------------------- | ------- | - | -------------------------------- | - | -------- | ---- |  | - | ------ | - |  | - | ------- | -
|                                                                    |  | Nine months ended September 30, |         |   | Three months ended September 30, |  
|(in thousands)                                                      |  | 2009                            |         |   | 2008                             |   |          | 2009 |  |   | 2008   |  
|Net income (loss)                                                   |  | $                               | (10,409 | ) |                                  | $ | 92,383   |      |  | $ | (4,010 | ) |  | $ | 29,775  |  
|                                                                    |  |                                 |         |  
|Other comprehensive income (loss):                                  |  |                                 |         |   |                                  |   |          |      |  |   |        |   |  |   |         |  
|Unrealized gain (loss) on marketable securities                     |  |                                 | 141     |   |                                  |   | 25,111   |      |  |   | 90     |   |  |   | (1,380  | )
|Effect of income taxes                                              |  |                                 | (49     | ) |                                  |   | (8,789   | )    |  |   | (32    | ) |  |   | 483     |  
|                                                                    |  |                                 |         |  
|Accumulated loss                                                    |  |                                 | 61      |   |                                  |   | 40       |      |  |   | 20     |   |  |   | 13      |  
|Effect of income taxes                                              |  |                                 | (21     | ) |                                  |   | (14      | )    |  |   | (7     | ) |  |   | (5      | )
|                                                                    |  |                                 |         |  
|Prior service cost                                                  |  |                                 | 45      |   |                                  |   | 36       |      |  |   | 15     |   |  |   | 12      |  
|Effect of income taxes                                              |  |                                 | (16     | ) |                                  |   | (13      | )    |  |   | (5     | ) |  |   | (5      | )
|                                                                    |  |                                 |         |  
|Reclassification adjustment for gains included in net income (loss) |  |                                 |        |   |                                  |   | (152,610 | )    |  |   |       |   |  |   | (48,999 | )
|Effect of income taxes                                              |  |                                 |        |   |                                  |   | 53,414   |      |  |   |       |   |  |   | 17,150  |  
|                                                                    |  |                                 |         |   |                                  |   |          |      |  |   |        |   |  |   |         |  
|Other comprehensive income (loss)                                   |  |                                 | 161     |   |                                  |   | (82,825  | )    |  |   | 81     |   |  |   | (32,731 | )
|                                                                    |  |                                 |         |   |                                  |   |          |      |  |   |        |   |  |   |         |  
|Comprehensive income (loss)                                         |  | $                               | (10,248 | ) |                                  | $ | 9,558    |      |  | $ | (3,929 | ) |  | $ | (2,956  | )
|                                                                    |  |                                 |         |   |                                  |   |          |      |  |   |        |   |  |   |         |  

See accompanying notes to condensed consolidated financial statements.



6



---

##### 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 and nine months ended September 30, 2009 are not necessarily indicative of the results
that may be expected for the year ending December 31, 2009, or for any other period. The balance sheet at December 31, 2008 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 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, 2008 (2008 Form 10-K).

Variable interest entitiesThe Company may enter into Local Marketing Agreements (LMAs) with non-owned stations. Under the terms of these agreements, the Company makes specific periodic
payments to the stations owner-operator in exchange for the right to provide programming and sell advertising on the station. Nevertheless, the owner-operator retains control and responsibility for the operation of the station. Generally, the
Companys rights to provide programming and sell advertising continue until the termination of such agreement. As a result of these agreements, the Company may determine the station is a Variable Interest Entity (VIE), and the
Company is the primary beneficiary of the variable interest. This typically occurs if the Company has an agreement to acquire all stations or assets in the legal entity, there is significant certainty regarding the Companys intention to
acquire the station and the conditions to close are considered to be perfunctory.

Reclassifications The results of
operations of Pegasus News, Inc., which the Company sold on December 31, 2008, have been reclassified from continuing operations to discontinued operations in the condensed consolidated statement of operations for the three and nine months
ended September 30, 2008. Additionally, the results of operations of five small-market radio stations in Montana, previously classified as discontinued operations in the condensed consolidated statement of operations for the three and nine
months ended September 30, 2008, have been presented as continuing operations. See Note 8 to the condensed consolidated financial statements for further information. The reclassifications had no effect on net income (loss), shareholders
equity or cash flows from operating, investing or financing activities.

2. Summary of Significant Accounting Policies and Recent
Accounting Pronouncements

The significant accounting policies used in preparation of the condensed consolidated financial
statements are disclosed in the Companys 2008 Form 10-K. With the exception of those discussed below, there have been no recent accounting pronouncements or changes in accounting pronouncements during the nine months ended September 30,
2009, as compared to the recent accounting pronouncements described in the Companys 2008 Form 10-K, that are of significance, or potential significance, to the Company.

Effective January 1, 2009, the Company adopted changes issued by the Financial Accounting Standards Board (FASB) in April
2008 that amend the factors considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset. This guidance requires a consistent approach between the useful life of a recognized intangible
asset and the period of expected cash flows used to measure the fair value of an asset. The guidance also requires enhanced disclosures when an intangible assets expected future cash flows are affected by an entitys intent and/or ability
to renew or extend the arrangement. The adoption did not have a material impact on the Companys consolidated results of operations or financial condition.

In December 2007, the FASB revised the authoritative guidance for the accounting of business combinations. Under the revised guidance, an entity that completes a business combination is required to
recognize the assets acquired, liabilities assumed, contractual contingencies, and contingent consideration at their fair value on the acquisition date. It further requires that acquisition-related costs be recognized separately from the acquisition
and expensed as incurred; that restructuring costs generally be expensed in periods subsequent to the acquisition date; and that changes in accounting for deferred tax asset valuation allowances and acquired income tax uncertainties after the
measurement period be recognized as a component of provision for taxes. For the Company, the provisions of the revised authoritative guidance are effective on a prospective basis for all business combinations for which the acquisition date is on or
after January 1, 2009, with an exception related to the accounting for valuation allowances on deferred taxes and acquired tax contingencies related to acquisitions completed before that date. This new guidance amends the accounting for income
taxes to require adjustments, made after the effective date of this statement, to valuation allowances for acquired deferred tax assets and uncertain income tax positions to be recognized as income tax expense. The adoption did not have any impact
on the Companys consolidated financial statements.



7



---

##### Table of Contents

Fisher Communications, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements(Continued)

(Unaudited)



The FASB issued authoritative guidance for fair value measurements in
September 2006, which defined fair value, established a framework for measuring fair value and expanded disclosures about assets and liabilities measured at fair value in the financial statements. In February 2008, the FASB issued
authoritative guidance, which allowed for the delay of the effective date of the authoritative guidance for fair value measurements for one year for all nonfinancial assets and liabilities, except those that are recognized or disclosed at fair value
in the financial statements on a recurring basis. These include goodwill and other non-amortizable intangible assets. The adoption during the first quarter of 2009 did not have a significant impact on the Companys consolidated financial
statements.

In April 2009, the FASB issued authoritative guidance for interim disclosures about fair value of financial
instruments. The guidance, which is effective for interim and annual periods ending after June 15, 2009, requires fair value disclosures in both interim as well as annual financial statements in order to provide more timely information about
the effects of current market conditions on financial instruments. The implementation of this authoritative guidance did not have a material impact on the Companys consolidated results of operations or financial condition.

In May 2009, the FASB issued authoritative guidance on managements assessment of subsequent events. This guidance is effective
prospectively for interim and annual periods ending after June 15, 2009. The implementation of this guidance did not have a material impact on the Companys consolidated results of operations or financial condition. The Company has
evaluated subsequent events through November 6, 2009, the date of issuance of our Form 10-Q for the period ended September 30, 2009.

On July 1, 2009, the FASB issued the Accounting Standards Codification (ASC) 105-10, Generally Accepted Accounting Principles (ASC 105-10). ASC 105-10 establishes the
exclusive authoritative reference for U.S. GAAP for use in financial statements for periods ending after September 15, 2009, except for SEC rules and interpretive releases, which are also authoritative GAAP for SEC registrants. The ASC
supersedes all existing non-SEC accounting and reporting standards. As the ASC does not change GAAP, there was no impact on the Companys consolidated results of operations or financial condition.

3. Fair Value Measurements

The Company measures certain financial assets at fair value on a recurring basis, including cash equivalents and marketable securities. 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 September 30, 2009 and December 31, 2008, the reported fair value of marketable securities, using Level 1 inputs,
was $929,000 and $769,000, respectively. Marketable securities are included in other assets on the Companys condensed consolidated balance sheets.

As of September 30, 2009 and December 31, 2008, all of the Companys debt was at a fixed rate and totaled $122.1 million and $150.0 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 at September 30, 2009 and December 31, 2008 was $113.5 million and $123.0 million, respectively. 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.



8



---

##### Table of Contents

Fisher Communications, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements(Continued)

(Unaudited)



4. Goodwill and Intangible Assets

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



|                                              |  |                     |        |                         |   |      |     |  |                     |        |                         |   |        |     |   |      |   |  |   |       
|--------------------------------------------- |  | ------------------- | ------ | ----------------------- | - | ---- | --- |  | ------------------- | ------ | ----------------------- | - | ------ | --- | - | ---- | - |  | - | ------
|                                              |  | September 30, 2009  |        | December 31, 2008      
|                                              |  | 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  |                         |   | (437 | )   |  |                     | 3,123  |                         |   | 3,560  |     |   | (260 | ) |  |   | 3,300 
|                                              |  |                     |        |                         |   |      |     |  |                     |        |                         |   |        |     |   |      |   |  |   |       
|Total intangible assets                       |  | $                   | 41,275 |                         | $ | (437 | )   |  | $                   | 40,838 |                         | $ | 41,275 |     | $ | (260 | ) |  | $ | 41,015
|                                              |  |                     |        |                         |   |      |     |  |                     |        |                         |   |        |     |   |      |   |  |   |       



|(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 the three
and nine months ended September 30, 2009 was $59,000 and $177,000, respectively. Total amortization expense for intangible assets subject to amortization for the three and nine months ended September 30, 2008 was $65,000 and $195,000,
respectively. An additional $17,000 and $51,000 of amortization expense is included in discontinued operations for the three and nine months ended September 30, 2008, respectively.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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 for the remainder of 2009 and each
of the next five years and thereafter (in thousands):



|                         |  |   |      
|------------------------ |  | - | -----
|Year ending December 31, |  |  
|2009                     |  | $ | 59   
|2010                     |  |   | 236  
|2011                     |  |   | 236  
|2012                     |  |   | 236  
|2013                     |  |   | 236  
|2014                     |  |   | 236  
|Thereafter               |  |   | 1,884
|                         |  |   |      
|                         |  | $ | 3,123
|                         |  |   |      

5. Local Marketing Agreement

In May 2009, the Company entered into a three year 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 Companys KOMO NewsRadio programming to FM listeners in the Seattle  Tacoma radio market. Contemporaneously 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. This LMA does not meet the criteria for consolidation. Advertising revenues earned under this LMA are recorded as operating revenue and LMA fees and programming expenses are recorded as operating costs.



9



---

##### Table of Contents

Fisher Communications, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements(Continued)

(Unaudited)



6. Short-Term Investments

The Companys short-term investments are comprised of commercial paper with original maturities of greater than 91 days but less than
one year. The Company has classified its short-term investments as held-to-maturity, as the Company has the intent and ability to hold these securities to maturity. The securities are carried at amortized cost using the specific identification
method and interest income is recorded using an effective interest rate with the associated discount amortized to interest income. During the quarter ended June 30, 2009, the Company redeemed the entire principal upon maturity of its remaining
investment in commercial paper.

7. Extinguishment of Senior Notes

During the first half of 2009, the Company repurchased $28.0 million of aggregate principal amount of its 8.625% senior notes due in 2014
(Senior Notes) for total consideration of $24.4 million in cash, plus accrued interest of $637,000. The Company recorded a gain on extinguishment of debt, net of a charge for related unamortized debt issuance costs of $557,000, resulting
in a net gain of approximately $3.0 million on the extinguishment of Senior Notes for the nine months ended September 30, 2009. The gain is presented as Gain on extinguishment of senior notes, net in the Companys condensed
consolidated statement of operations. The Company did not repurchase any of its Senior Notes during the three months ended September 30, 2009 and the three and nine months ended September 30, 2008.

8. Discontinued Operations

During the fourth quarter of 2008, the Company determined that, in view of the uncertainty surrounding the timing or probability of a sale of five radio stations in Montana, the requirements necessary to classify the radio stations as
discontinued operations were no longer met. As a result, the assets and liabilities of the five stations have been classified as held for use in the condensed consolidated balance sheets as of September 30, 2009 and December 31, 2008, and
the results of operations of the five stations have been classified as continuing operations in the Companys condensed consolidated statements of operations for all periods presented.

On December 31, 2008, the Company sold Pegasus News, Inc. (Pegasus), a local news service specializing in providing
personalized online local news, information and advertising in Dallas, Texas. Net proceeds of the sale were $1.5 million. As consideration for the sale, the buyer paid the Company $1.5 million in cash and granted the Company and its affiliates a
royalty-free, non-exclusive, non-transferable license to use certain related technology in its existing television and radio markets to deliver personalized online local news, information and advertising. The Company reported the results of
operations of Pegasus as discontinued operations in the accompanying condensed consolidated statement of operations for the three and nine months ended September 30, 2008. The operations of Pegasus were previously included in the Companys
television segment.

Operational data for Pegasus included in discontinued operations is summarized as follows (in thousands):



|                                                      |  |                                     |        |   |                                      |   |      |  
|----------------------------------------------------- |  | ----------------------------------- | ------ | - | ------------------------------------ | - | ---- | -
|                                                      |  | Nine months endedSeptember 30, 2008 |        |   | Three months endedSeptember 30, 2008 |  
|Revenue                                               |  | $                                   | 137    |   |                                      | $ | 60   |  
|Loss from discontinued operations before income taxes |  |                                     | (1,106 | ) |                                      |   | (336 | )
|Provision (benefit) for income taxes                  |  |                                     | (386   | ) |                                      |   | (118 | )
|                                                      |  |                                     |        |   |                                      |   |      |  
|Loss from discontinued operations                     |  | $                                   | (720   | ) |                                      | $ | (218 | )
|                                                      |  |                                     |        |   |                                      |   |      |  

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.

In August 2009, the Company and American Broadcasting Company, Inc (ABC) agreed to terms for the renewal of the network
affiliation agreement. The renewed affiliation agreement, which requires the payment of an annual license fee to ABC for network programming, expires on August 31, 2014.



As of September 30, 2009, the Company had commitments under
various agreements of $31.8 million for future rights to broadcast television programs, network affiliate agreements and rights to sell available advertising time on a third party radio station through 2013.



10



---

##### Table of Contents

Fisher Communications, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements(Continued)

(Unaudited)



10. Retirement Benefits

The Company has a noncontributory supplemental retirement program for former key members of management. No new participants have been
admitted since 2001 and none of the current Company executive officers participate in this program. In June 2005, the program was amended to freeze the accrual of all benefits to active participants provided under the program. The program provides
for vesting of benefits under certain circumstances. Funding is not required, but generally, the Company has acquired annuity contracts and life insurance on the lives of the individual participants to assist in the payment of retirement benefits.
The Company is the owner and beneficiary of such policies; accordingly, the cash values of the policies as well as the accrued liability are reported in the Companys condensed consolidated financial statements. The cost of the program is
accrued over the average expected future lifetime of the participants.

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



|                          |  |                               |     |                                |   |      |  |      |     |  |   |    
|------------------------- |  | ----------------------------- | --- | ------------------------------ | - | ---- |  | ---- | --- |  | - | ---
|                          |  | Nine months endedSeptember 30 |     | Three months endedSeptember 30
|                          |  | 2009                          |     | 2008                           |   | 2009 |  | 2008
|Interest cost             |  | $                             | 813 |                                | $ | 824  |  | $    | 271 |  | $ | 274
|Amortization of loss      |  |                               | 85  |                                |   | 45   |  |      | 29  |  |   | 15 
|                          |  |                               |     |                                |   |      |  |      |     |  |   |    
|Net periodic pension cost |  | $                             | 898 |                                | $ | 869  |  | $    | 300 |  | $ | 289
|                          |  |                               |     |                                |   |      |  |      |     |  |   |    

The discount rate used to determine net periodic pension cost was 5.5% and 5.88% for
both the three and nine month period ended September 30, 2009 and 2008, respectively.

11. Income (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
income (loss) per share has been computed as follows (in thousands, except per-share amounts):



|                                                       |  |                               |         |   |                                |   |        |      |  |   |        |   |  |   |        |  
|------------------------------------------------------ |  | ----------------------------- | ------- | - | ------------------------------ | - | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                                       |  | Nine months endedSeptember 30 |         |   | Three months endedSeptember 30 |  
|                                                       |  | 2009                          |         |   | 2008                           |   |        | 2009 |  |   | 2008   |  
|Income (loss) from continuing operations               |  | $                             | (10,409 | ) |                                | $ | 93,103 |      |  | $ | (4,010 | ) |  | $ | 29,993 |  
|Loss from discontinued operations, net of income taxes |  |                               |        |   |                                |   | (720   | )    |  |   |       |   |  |   | (218   | )
|                                                       |  |                               |         |   |                                |   |        |      |  |   |        |   |  |   |        |  
|Net income (loss)                                      |  | $                             | (10,409 | ) |                                | $ | 92,383 |      |  | $ | (4,010 | ) |  | $ | 29,775 |  
|                                                       |  |                               |         |   |                                |   |        |      |  |   |        |   |  |   |        |  
|                                                       |  |                               |         |  
|Weighted average shares outstanding - basic            |  |                               | 8,774   |   |                                |   | 8,731  |      |  |   | 8,778  |   |  |   | 8,733  |  
|Weighted effect of dilutive options and rights         |  |                               |        |   |                                |   | 4      |      |  |   |       |   |  |   | 8      |  
|                                                       |  |                               |         |   |                                |   |        |      |  |   |        |   |  |   |        |  
|Weighted average shares outstanding assuming dilution  |  |                               | 8,774   |   |                                |   | 8,735  |      |  |   | 8,778  |   |  |   | 8,741  |  
|                                                       |  |                               |         |   |                                |   |        |      |  |   |        |   |  |   |        |  
|                                                       |  |                               |         |  
|Income (loss) per share:                               |  |                               |         |   |                                |   |        |      |  |   |        |   |  |   |        |  
|From continuing operations                             |  | $                             | (1.19   | ) |                                | $ | 10.66  |      |  | $ | (0.46  | ) |  | $ | 3.43   |  
|From discontinued operations                           |  |                               |        |   |                                |   | (0.08  | )    |  |   |       |   |  |   | (0.02  | )
|                                                       |  |                               |         |   |                                |   |        |      |  |   |        |   |  |   |        |  
|Net income (loss) per share                            |  | $                             | (1.19   | ) |                                | $ | 10.58  |      |  | $ | (0.46  | ) |  | $ | 3.41   |  
|                                                       |  |                               |         |   |                                |   |        |      |  |   |        |   |  |   |        |  
|                                                       |  |                               |         |  
|Income (loss) per share assuming dilution:             |  |                               |         |   |                                |   |        |      |  |   |        |   |  |   |        |  
|From continuing operations                             |  | $                             | (1.19   | ) |                                | $ | 10.66  |      |  | $ | (0.46  | ) |  | $ | 3.43   |  
|From discontinued operations                           |  |                               |        |   |                                |   | (0.08  | )    |  |   |       |   |  |   | (0.02  | )
|                                                       |  |                               |         |   |                                |   |        |      |  |   |        |   |  |   |        |  
|Net income (loss) per share assuming dilution          |  | $                             | (1.19   | ) |                                | $ | 10.58  |      |  | $ | (0.46  | ) |  | $ | 3.41   |  
|                                                       |  |                               |         |   |                                |   |        |      |  |   |        |   |  |   |        |  

For the three and nine months ended September 30, 2009, the effect of 98,966
restricted stock rights/units and options to purchase 254,021 shares are excluded from the calculation of weighted average shares outstanding because such rights/units and options were anti-dilutive. For the three and nine months ended September 30,
2008, the effect of options to purchase 265,126 shares are excluded from the calculation of weighted average shares outstanding because such rights/units and options were anti-dilutive.



11



---

##### Table of Contents

Fisher Communications, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements(Continued)

(Unaudited)



12. Stock-Based Compensation

Stock-based compensation expense for the three and nine months ended September 30, 2009 was $273,000 and $768,000, respectively.
Stock-based compensation expense for the three and nine months ended September 30, 2008 was $239,000 and $665,000, respectively. Stock-based compensation expense is included in selling, general and administrative expenses in the Companys
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 34% and 35%
for the nine months ended September 30, 2009 and 2008, respectively.

The Internal Revenue Service (IRS)
completed the field examination of the Companys 2006 and 2007 Federal income tax returns and the Company paid $856,000 during the three months ended September 30, 2009 for the settlement of this examination, as well as $31,000 in interest
expense.

The IRS completed a field examination of the Companys 2003, 2004 and 2005 Federal income tax returns during
March 2008, and the Company paid $68,000 for the settlement resulting from this examination.

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 September 30, 2009 and December 31, 2008, 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. Due to the uncertainty of the
Companys ability to generate state taxable income a full valuation allowance has been established on the Companys deferred state tax assets. As of September 30, 2009, 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 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. Corporate expenses are allocated to the
television and radio segments based on a pro-rata basis. 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. Other includes intercompany transactions between segments and non-allocated corporate items.

Certain reclassifications have been made to prior period financial information to conform to the current presentation. Reclassifications include the results of Pegasus from continuing operations to
discontinued operations, and the results of the five remaining small-market radio stations from discontinued operations to continuing operations. See Note 8 for further information. These reclassifications have no effect on the previously reported
net income (loss).

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



|             |  |                                |        |   |                                 |   |         |      |  |   |        |   |  |   |        |  
|------------ |  | ------------------------------ | ------ | - | ------------------------------- | - | ------- | ---- |  | - | ------ | - |  | - | ------ | -
|             |  | Nine months endedSeptember 30, |        |   | Three months endedSeptember 30, |  
|             |  | 2009                           |        |   | 2008                            |   |         | 2009 |  |   | 2008   |  
|Television   |  | $                              | 68,120 |   |                                 | $ | 86,151  |      |  | $ | 25,116 |   |  | $ | 27,343 |  
|Radio        |  |                                | 16,758 |   |                                 |   | 30,151  |      |  |   | 5,961  |   |  |   | 11,673 |  
|Fisher Plaza |  |                                | 10,231 |   |                                 |   | 9,794   |      |  |   | 3,453  |   |  |   | 3,289  |  
|Other        |  |                                | (86    | ) |                                 |   | (50     | )    |  |   | (3     | ) |  |   | (8     | )
|             |  |                                |        |   |                                 |   |         |      |  |   |        |   |  |   |        |  
|             |  | $                              | 95,023 |   |                                 | $ | 126,046 |      |  | $ | 34,527 |   |  | $ | 42,297 |  
|             |  |                                |        |   |                                 |   |         |      |  |   |        |   |  |   |        |  

For both the three and nine months ended September 30, 2009, intercompany sales
amounted to $3,000 and $86,000, respectively, relating primarily to intercompany revenue between the Companys television and radio segments. For the three and nine months ended September 30, 2008, intercompany sales amounted to $8,000 and
$50,000, respectively, relating primarily to telecommunications fees charged from the Companys Fisher Plaza segment.



12



---

##### Table of Contents

Fisher Communications, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements(Continued)

(Unaudited)



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



|                                                                          |  |                               |         |   |                                |   |         |      |  |   |        |   |  |   |        |  
|------------------------------------------------------------------------- |  | ----------------------------- | ------- | - | ------------------------------ | - | ------- | ---- |  | - | ------ | - |  | - | ------ | -
|                                                                          |  | Nine months endedSeptember 30 |         |   | Three months endedSeptember 30 |  
|                                                                          |  | 2009                          |         |   | 2008                           |   |         | 2009 |  |   | 2008   |  
|Television                                                                |  | $                             | (5,108  | ) |                                | $ | 4,882   |      |  | $ | 663    |   |  | $ | 2,185  |  
|Radio                                                                     |  |                               | 1,632   |   |                                |   | (3,505  | )    |  |   | 775    |   |  |   | (1,698 | )
|Fisher Plaza                                                              |  |                               | 1,048   |   |                                |   | 4,138   |      |  |   | (2,120 | ) |  |   | 1,439  |  
|Other                                                                     |  |                               | (8,559  | ) |                                |   | (8,332  | )    |  |   | (2,869 | ) |  |   | (2,539 | )
|                                                                          |  |                               |         |   |                                |   |         |      |  |   |        |   |  |   |        |  
|Total segment loss from continuing operations                             |  |                               | (10,987 | ) |                                |   | (2,817  | )    |  |   | (3,551 | ) |  |   | (613   | )
|Gain on extinguishment of senior notes, net                               |  |                               | 2,965   |   |                                |   |        |      |  |   |       |   |  |   |       |  
|Other income, net                                                         |  |                               | 1,221   |   |                                |   | 155,808 |      |  |   | 392    |   |  |   | 50,046 |  
|Interest expense                                                          |  |                               | (8,917  | ) |                                |   | (10,343 | )    |  |   | (2,714 | ) |  |   | (3,441 | )
|                                                                          |  |                               |         |   |                                |   |         |      |  |   |        |   |  |   |        |  
|Consolidated income (loss) from continuing operations before income taxes |  | $                             | (15,718 | ) |                                | $ | 142,648 |      |  | $ | (5,873 | ) |  | $ | 45,992 |  
|                                                                          |  |                               |         |   |                                |   |         |      |  |   |        |   |  |   |        |  

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



|             |  |                  |         |                  |   |        
|------------ |  | ---------------- | ------- | ---------------- | - | -------
|             |  | September 302009 |         | December 31,2008
|Television   |  | $                | 148,179 |                  | $ | 125,633
|Radio        |  |                  | 15,276  |                  |   | 16,838 
|Fisher Plaza |  |                  | 110,905 |                  |   | 112,683
|Other        |  |                  | 62,239  |                  |   | 116,139
|             |  |                  |         |                  |   |        
|             |  | $                | 336,599 |                  | $ | 371,293
|             |  |                  |         |                  |   |        

Identifiable assets by segment are those assets used in the operations of each
segment. Other assets include cash and cash equivalents, short-term investments, cash value of life insurance and retirement deposits and deferred income taxes. Other cash and cash equivalents and short-term investments were $13.8 million and $90.8
million as of September 30, 2009 and December 31, 2008, respectively. Television segment cash and cash equivalents and short-term investments were $35.1 million and $40,000 as of September 30, 2009 and December 31, 2008,
respectively.

15. Financial Information for Guarantors

As of September 30, 2009, the Company had $122.1 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 100% owned subsidiaries of the Company.

Presented below are condensed
consolidated statements of operations for the three and nine months ended September 30, 2009 and 2008, and condensed consolidated statements of cash flows for the nine months ended September 30, 2009 and 2008. Also presented are the
condensed consolidated balance sheets as of September 30, 2009 and December 31, 2008. The condensed consolidated information is presented for the Company (issuer) with its investments 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.



13



---

##### Table of Contents

Financial Information for Guarantors

Condensed Consolidated Statement of Operations

For the Three months ended September 30, 2009



|                                             |  |                           |        |   |                                 |   |        |              |  |   |                                           |   |  |   |        |  
|-------------------------------------------- |  | ------------------------- | ------ | - | ------------------------------- | - | ------ | ------------ |  | - | ----------------------------------------- | - |  | - | ------ | -
|(In thousands)                               |  | FisherCommunications,Inc. |        |   | 100% OwnedGuarantorSubsidiaries |   |        | Eliminations |  |   | FisherCommunications,Inc. andSubsidiaries |  
|Revenue                                      |  | $                         |       |   |                                 | $ | 34,527 |              |  | $ |                                          |   |  | $ | 34,527 |  
|Operating expenses                           |  |                           |        |   |                                 |   |        |              |  |   |                                           |   |  |   |        |  
|Direct operating costs                       |  |                           | 105    |   |                                 |   | 16,115 |              |  |   | 50                                        |   |  |   | 16,270 |  
|Selling, general and administrative expenses |  |                           | 2,477  |   |                                 |   | 9,473  |              |  |   | (50                                       | ) |  |   | 11,900 |  
|Amortization of program rights               |  |                           |       |   |                                 |   | 2,507  |              |  |   |                                          |   |  |   | 2,507  |  
|Depreciation and amortization                |  |                           | 431    |   |                                 |   | 3,019  |              |  |   |                                          |   |  |   | 3,450  |  
|Plaza fire expenses, net                     |  |                           |       |   |                                 |   | 3,951  |              |  |   |                                          |   |  |   | 3,951  |  
|                                             |  |                           |        |   |                                 |   |        |              |  |   |                                           |   |  |   |        |  
|                                             |  |                           | 3,013  |   |                                 |   | 35,065 |              |  |   |                                          |   |  |   | 38,078 |  
|                                             |  |                           |        |   |                                 |   |        |              |  |   |                                           |   |  |   |        |  
|Loss from operations                         |  |                           | (3,013 | ) |                                 |   | (538   | )            |  |   |                                          |   |  |   | (3,551 | )
|Other income, net                            |  |                           | 20     |   |                                 |   | 372    |              |  |   |                                          |   |  |   | 392    |  
|Equity in loss of subsidiaries               |  |                           | (107   | ) |                                 |   |       |              |  |   | 107                                       |   |  |   |       |  
|Interest expense                             |  |                           | (2,695 | ) |                                 |   | (19    | )            |  |   |                                          |   |  |   | (2,714 | )
|                                             |  |                           |        |   |                                 |   |        |              |  |   |                                           |   |  |   |        |  
|Loss before income taxes                     |  |                           | (5,795 | ) |                                 |   | (185   | )            |  |   | 107                                       |   |  |   | (5,873 | )
|Benefit for income taxes                     |  |                           | (1,785 | ) |                                 |   | (78    | )            |  |   |                                          |   |  |   | (1,863 | )
|                                             |  |                           |        |   |                                 |   |        |              |  |   |                                           |   |  |   |        |  
|Net loss                                     |  | $                         | (4,010 | ) |                                 | $ | (107   | )            |  | $ | 107                                       |   |  | $ | (4,010 | )
|                                             |  |                           |        |   |                                 |   |        |              |  |   |                                           |   |  |   |        |  

Financial Information for Guarantors

Condensed Consolidated Statement of Operations

For the Nine months ended September 30, 2009



|                                             |  |                           |         |   |                                 |   |        |              |  |   |                                           |   |  |   |         |  
|-------------------------------------------- |  | ------------------------- | ------- | - | ------------------------------- | - | ------ | ------------ |  | - | ----------------------------------------- | - |  | - | ------- | -
|(In thousands)                               |  | FisherCommunications,Inc. |         |   | 100% OwnedGuarantorSubsidiaries |   |        | Eliminations |  |   | FisherCommunications,Inc. andSubsidiaries |  
|Revenue                                      |  | $                         |        |   |                                 | $ | 95,023 |              |  | $ |                                          |   |  | $ | 95,023  |  
|Operating expenses                           |  |                           |         |   |                                 |   |        |              |  |   |                                           |   |  |   |         |  
|Direct operating costs                       |  |                           | 316     |   |                                 |   | 47,481 |              |  |   | 151                                       |   |  |   | 47,948  |  
|Selling, general and administrative expenses |  |                           | 7,480   |   |                                 |   | 29,525 |              |  |   | (151                                      | ) |  |   | 36,854  |  
|Amortization of program rights               |  |                           |        |   |                                 |   | 7,084  |              |  |   |                                          |   |  |   | 7,084   |  
|Depreciation and amortization                |  |                           | 1,182   |   |                                 |   | 8,991  |              |  |   |                                          |   |  |   | 10,173  |  
|Plaza fire expenses, net                     |  |                           |        |   |                                 |   | 3,951  |              |  |   |                                          |   |  |   | 3,951   |  
|                                             |  |                           |         |   |                                 |   |        |              |  |   |                                           |   |  |   |         |  
|                                             |  |                           | 8,978   |   |                                 |   | 97,032 |              |  |   |                                          |   |  |   | 106,010 |  
|                                             |  |                           |         |   |                                 |   |        |              |  |   |                                           |   |  |   |         |  
|Loss from operations                         |  |                           | (8,978  | ) |                                 |   | (2,009 | )            |  |   |                                          |   |  |   | (10,987 | )
|Gain on extinguishment of senior notes, net  |  |                           | 2,965   |   |                                 |   |       |              |  |   |                                          |   |  |   | 2,965   |  
|Other income, net                            |  |                           | 704     |   |                                 |   | 517    |              |  |   |                                          |   |  |   | 1,221   |  
|Equity in loss of subsidiaries               |  |                           | (1,018  | ) |                                 |   |       |              |  |   | 1,018                                     |   |  |   |        |  
|Interest expense                             |  |                           | (8,858  | ) |                                 |   | (59    | )            |  |   |                                          |   |  |   | (8,917  | )
|                                             |  |                           |         |   |                                 |   |        |              |  |   |                                           |   |  |   |         |  
|Loss before income taxes                     |  |                           | (15,185 | ) |                                 |   | (1,551 | )            |  |   | 1,018                                     |   |  |   | (15,718 | )
|Benefit for income taxes                     |  |                           | (4,776  | ) |                                 |   | (533   | )            |  |   |                                          |   |  |   | (5,309  | )
|                                             |  |                           |         |   |                                 |   |        |              |  |   |                                           |   |  |   |         |  
|Net loss                                     |  | $                         | (10,409 | ) |                                 | $ | (1,018 | )            |  | $ | 1,018                                     |   |  | $ | (10,409 | )
|                                             |  |                           |         |   |                                 |   |        |              |  |   |                                           |   |  |   |         |  



14



---

##### Table of Contents

Financial Information for Guarantors

Condensed Consolidated Statement of Operations

For the Three months ended September 30, 2008



|                                                       |  |                           |        |   |                                 |   |        |              |  |   |                                           |   |  |   |        |  
|------------------------------------------------------ |  | ------------------------- | ------ | - | ------------------------------- | - | ------ | ------------ |  | - | ----------------------------------------- | - |  | - | ------ | -
|(In thousands)                                         |  | FisherCommunications,Inc. |        |   | 100% OwnedGuarantorSubsidiaries |   |        | Eliminations |  |   | FisherCommunications,Inc. andSubsidiaries |  
|Revenue                                                |  | $                         |       |   |                                 | $ | 42,298 |              |  | $ | (1                                        | ) |  | $ | 42,297 |  
|Operating expenses                                     |  |                           |        |   |                                 |   |        |              |  |   |                                           |   |  |   |        |  
|Direct operating costs                                 |  |                           | 93     |   |                                 |   | 17,447 |              |  |   | 49                                        |   |  |   | 17,589 |  
|Selling, general and administrative expenses           |  |                           | 2,170  |   |                                 |   | 12,767 |              |  |   | (50                                       | ) |  |   | 14,887 |  
|Amortization of program rights                         |  |                           |       |   |                                 |   | 7,357  |              |  |   |                                          |   |  |   | 7,357  |  
|Depreciation and amortization                          |  |                           | 277    |   |                                 |   | 2,800  |              |  |   |                                          |   |  |   | 3,077  |  
|                                                       |  |                           |        |   |                                 |   |        |              |  |   |                                           |   |  |   |        |  
|                                                       |  |                           | 2,540  |   |                                 |   | 40,371 |              |  |   | (1                                        | ) |  |   | 42,910 |  
|                                                       |  |                           |        |   |                                 |   |        |              |  |   |                                           |   |  |   |        |  
|Income (loss) from operations                          |  |                           | (2,540 | ) |                                 |   | 1,927  |              |  |   |                                          |   |  |   | (613   | )
|Other income, net                                      |  |                           | 49,986 |   |                                 |   | 60     |              |  |   |                                          |   |  |   | 50,046 |  
|Equity in income of subsidiaries                       |  |                           | 961    |   |                                 |   |       |              |  |   | (961                                      | ) |  |   |       |  
|Interest expense                                       |  |                           | (3,419 | ) |                                 |   | (22    | )            |  |   |                                          |   |  |   | (3,441 | )
|                                                       |  |                           |        |   |                                 |   |        |              |  |   |                                           |   |  |   |        |  
|Income from continuing operations before income taxes  |  |                           | 44,988 |   |                                 |   | 1,965  |              |  |   | (961                                      | ) |  |   | 45,992 |  
|Provision for income taxes                             |  |                           | 15,213 |   |                                 |   | 786    |              |  |   |                                          |   |  |   | 15,999 |  
|                                                       |  |                           |        |   |                                 |   |        |              |  |   |                                           |   |  |   |        |  
|Income from continuing operations                      |  |                           | 29,775 |   |                                 |   | 1,179  |              |  |   | (961                                      | ) |  |   | 29,993 |  
|Loss from discontinued operations, net of income taxes |  |                           |       |   |                                 |   | (218   | )            |  |   |                                          |   |  |   | (218   | )
|                                                       |  |                           |        |   |                                 |   |        |              |  |   |                                           |   |  |   |        |  
|Net income                                             |  | $                         | 29,775 |   |                                 | $ | 961    |              |  | $ | (961                                      | ) |  | $ | 29,775 |  
|                                                       |  |                           |        |   |                                 |   |        |              |  |   |                                           |   |  |   |        |  

Financial Information for Guarantors

Condensed Consolidated Statement of Operations

For the Nine months ended September 30, 2008



|                                                       |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|------------------------------------------------------ |  | ------------------------- | ------- | - | ------------------------------- | - | ------- | ------------ |  | - | ----------------------------------------- | - |  | - | ------- | -
|(In thousands)                                         |  | FisherCommunications,Inc. |         |   | 100% OwnedGuarantorSubsidiaries |   |         | Eliminations |  |   | FisherCommunications,Inc. andSubsidiaries |  
|Revenue                                                |  | $                         |        |   |                                 | $ | 126,053 |              |  | $ | (7                                        | ) |  | $ | 126,046 |  
|Operating expenses                                     |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Direct operating costs                                 |  |                           | 240     |   |                                 |   | 52,293  |              |  |   | 146                                       |   |  |   | 52,679  |  
|Selling, general and administrative expenses           |  |                           | 8,950   |   |                                 |   | 41,279  |              |  |   | (153                                      | ) |  |   | 50,076  |  
|Amortization of program rights                         |  |                           |        |   |                                 |   | 16,818  |              |  |   |                                          |   |  |   | 16,818  |  
|Depreciation and amortization                          |  |                           | 740     |   |                                 |   | 8,550   |              |  |   |                                          |   |  |   | 9,290   |  
|                                                       |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|                                                       |  |                           | 9,930   |   |                                 |   | 118,940 |              |  |   | (7                                        | ) |  |   | 128,863 |  
|                                                       |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Income (loss) from operations                          |  |                           | (9,930  | ) |                                 |   | 7,113   |              |  |   |                                          |   |  |   | (2,817  | )
|Other income, net                                      |  |                           | 155,698 |   |                                 |   | 110     |              |  |   |                                          |   |  |   | 155,808 |  
|Equity in income of subsidiaries                       |  |                           | 3,674   |   |                                 |   |        |              |  |   | (3,674                                    | ) |  |   |        |  
|Interest expense                                       |  |                           | (10,276 | ) |                                 |   | (67     | )            |  |   |                                          |   |  |   | (10,343 | )
|                                                       |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Income from continuing operations before income taxes  |  |                           | 139,166 |   |                                 |   | 7,156   |              |  |   | (3,674                                    | ) |  |   | 142,648 |  
|Provision for income taxes                             |  |                           | 46,783  |   |                                 |   | 2,762   |              |  |   |                                          |   |  |   | 49,545  |  
|                                                       |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Income from continuing operations                      |  |                           | 92,383  |   |                                 |   | 4,394   |              |  |   | (3,674                                    | ) |  |   | 93,103  |  
|Loss from discontinued operations, net of income taxes |  |                           |        |   |                                 |   | (720    | )            |  |   |                                           |   |  |   | (720    | )
|                                                       |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Net income                                             |  | $                         | 92,383  |   |                                 | $ | 3,674   |              |  | $ | (3,674                                    | ) |  | $ | 92,383  |  
|                                                       |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  



15



---

##### Table of Contents

Financial Information for Guarantors

Condensed Consolidated Balance Sheet

As of September 30, 2009



|                                                              |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|------------------------------------------------------------- |  | ------------------------- | ------- | - | ------------------------------- | - | ------- | ------------ |  | - | ----------------------------------------- | - |  | - | ------- | -
|(In thousands)                                                |  | FisherCommunications,Inc. |         |   | 100% OwnedGuarantorSubsidiaries |   |         | Eliminations |  |   | FisherCommunications,Inc. andSubsidiaries |  
|ASSETS                                                        |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Current Assets                                                |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Cash and cash equivalents                                     |  | $                         | 13,763  |   |                                 | $ | 35,736  |              |  | $ |                                          |   |  | $ | 49,499  |  
|Receivables, net                                              |  |                           |        |   |                                 |   | 23,451  |              |  |   |                                          |   |  |   | 23,451  |  
|Due from affiliate                                            |  |                           | 15,414  |   |                                 |   | 19,586  |              |  |   | (35,000                                   | ) |  |   |        |  
|Income taxes receivable                                       |  |                           | 8,902   |   |                                 |   | 533     |              |  |   |                                          |   |  |   | 9,435   |  
|Deferred income taxes                                         |  |                           | 521     |   |                                 |   | 1,242   |              |  |   |                                          |   |  |   | 1,763   |  
|Prepaid expenses and other assets                             |  |                           | 752     |   |                                 |   | 2,271   |              |  |   |                                          |   |  |   | 3,023   |  
|Television and radio broadcast rights                         |  |                           |        |   |                                 |   | 10,813  |              |  |   |                                          |   |  |   | 10,813  |  
|                                                              |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Total current assets                                          |  |                           | 39,352  |   |                                 |   | 93,632  |              |  |   | (35,000                                   | ) |  |   | 97,984  |  
|Cash value of life insurance and retirement deposits          |  |                           | 17,903  |   |                                 |   |        |              |  |   |                                          |   |  |   | 17,903  |  
|Goodwill                                                      |  |                           |        |   |                                 |   | 13,293  |              |  |   |                                          |   |  |   | 13,293  |  
|Intangible assets                                             |  |                           |        |   |                                 |   | 40,838  |              |  |   |                                          |   |  |   | 40,838  |  
|Other assets                                                  |  |                           | 2,208   |   |                                 |   | 3,896   |              |  |   |                                          |   |  |   | 6,104   |  
|Deferred income taxes                                         |  |                           | 8,061   |   |                                 |   | 5,117   |              |  |   |                                          |   |  |   | 13,178  |  
|Investment in consolidated subsidiaries                       |  |                           | 230,197 |   |                                 |   |        |              |  |   | (230,197                                  | ) |  |   |        |  
|Property, plant and equipment, net                            |  |                           | 3,173   |   |                                 |   | 144,126 |              |  |   |                                          |   |  |   | 147,299 |  
|                                                              |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Total Assets                                                  |  | $                         | 300,894 |   |                                 | $ | 300,902 |              |  | $ | (265,197                                  | ) |  | $ | 336,599 |  
|                                                              |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|                                                              |  |                           |         |  
|LIABILITIES AND STOCKHOLDERS EQUITY                          |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Current Liabilities                                           |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Trade accounts payable                                        |  | $                         | 401     |   |                                 | $ | 5,723   |              |  | $ |                                          |   |  | $ | 6,124   |  
|Accrued payroll and related benefits                          |  |                           | 570     |   |                                 |   | 4,544   |              |  |   |                                          |   |  |   | 5,114   |  
|Interest payable                                              |  |                           | 526     |   |                                 |   |        |              |  |   |                                          |   |  |   | 526     |  
|Television and radio broadcast rights payable                 |  |                           |        |   |                                 |   | 10,808  |              |  |   |                                          |   |  |   | 10,808  |  
|Current portion of accrued retirement benefits                |  |                           | 1,254   |   |                                 |   |        |              |  |   |                                          |   |  |   | 1,254   |  
|Other current liabilities                                     |  |                           | 1,464   |   |                                 |   | 4,981   |              |  |   |                                          |   |  |   | 6,445   |  
|                                                              |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Total current liabilities                                     |  |                           | 4,215   |   |                                 |   | 26,056  |              |  |   |                                          |   |  |   | 30,271  |  
|Long-term debt                                                |  |                           | 122,050 |   |                                 |   |        |              |  |   |                                          |   |  |   | 122,050 |  
|Accrued retirement benefits                                   |  |                           | 19,401  |   |                                 |   |        |              |  |   |                                          |   |  |   | 19,401  |  
|Other liabilities                                             |  |                           |        |   |                                 |   | 9,649   |              |  |   |                                          |   |  |   | 9,649   |  
|                                                              |  |                           |         |  
|Stockholders Equity                                          |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Common stock                                                  |  |                           | 11,070  |   |                                 |   | 1,131   |              |  |   | (1,131                                    | ) |  |   | 11,070  |  
|Capital in excess of par                                      |  |                           | 11,724  |   |                                 |   | 199,234 |              |  |   | (199,234                                  | ) |  |   | 11,724  |  
|Accumulated other comprehensive income - net of income taxes: |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Unrealized gain on marketable securities                      |  |                           | (66     | ) |                                 |   | (66     | )            |  |   | 66                                        |   |  |   | (66     | )
|Accumulated loss                                              |  |                           | (2,505  | ) |                                 |   |        |              |  |   |                                          |   |  |   | (2,505  | )
|Prior service cost                                            |  |                           | (149    | ) |                                 |   |        |              |  |   |                                          |   |  |   | (149    | )
|Retained earnings                                             |  |                           | 135,154 |   |                                 |   | 64,898  |              |  |   | (64,898                                   | ) |  |   | 135,154 |  
|                                                              |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Total Stockholders Equity                                    |  |                           | 155,228 |   |                                 |   | 265,197 |              |  |   | (265,197                                  | ) |  |   | 155,228 |  
|                                                              |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  
|Total Liabilities and Stockholders Equity                    |  | $                         | 300,894 |   |                                 | $ | 300,902 |              |  | $ | (265,197                                  | ) |  | $ | 336,599 |  
|                                                              |  |                           |         |   |                                 |   |         |              |  |   |                                           |   |  |   |         |  



16



---

##### Table of Contents

Financial Information for Guarantors

Condensed Consolidated Balance Sheet

As of December 31, 2008



|                                                              |  |                           |         |   |                                 |   |              |  |   |                                           |   |  |   |         |  
|------------------------------------------------------------- |  | ------------------------- | ------- | - | ------------------------------- | - | ------------ |  | - | ----------------------------------------- | - |  | - | ------- | -
|(In thousands)                                                |  | FisherCommunications,Inc. |         |   | 100% OwnedGuarantorSubsidiaries |   | Eliminations |  |   | FisherCommunications,Inc. andSubsidiaries |  
|ASSETS                                                        |  |                           |         |   |                                 |   |              |  |   |                                           |   |  |   |         |  
|Current Assets                                                |  |                           |         |   |                                 |   |              |  |   |                                           |   |  |   |         |  
|Cash and cash equivalents                                     |  | $                         | 31,141  |   |                                 | $ | 694          |  | $ |                                          |   |  | $ | 31,835  |  
|Short-term investments                                        |  |                           | 59,697  |   |                                 |   |             |  |   |                                          |   |  |   | 59,697  |  
|Receivables, net                                              |  |                           |        |   |                                 |   | 26,044       |  |   |                                          |   |  |   | 26,044  |  
|Due from affiliate                                            |  |                           |        |   |                                 |   | 14,473       |  |   | (14,473                                   | ) |  |   |        |  
|Income taxes receivable                                       |  |                           | 2,462   |   |                                 |   | 301          |  |   |                                          |   |  |   | 2,763   |  
|Deferred income taxes                                         |  |                           | 520     |   |                                 |   | 1,243        |  |   |                                          |   |  |   | 1,763   |  
|Prepaid expenses and other assets                             |  |                           | 176     |   |                                 |   | 2,024        |  |   |                                          |   |  |   | 2,200   |  
|Television and radio broadcast rights                         |  |                           |        |   |                                 |   | 6,106        |  |   |                                          |   |  |   | 6,106   |  
|                                                              |  |                           |         |   |                                 |   |              |  |   |                                           |   |  |   |         |  
|Total current assets                                          |  |                           | 93,996  |   |                                 |   | 50,885       |  |   | (14,473                                   | ) |  |   | 130,408 |  
|Cash value of life insurance and retirement deposits          |  |                           | 17,425  |   |                                 |   |             |  |   |                                          |   |  |   | 17,425  |  
|Goodwill                                                      |  |                           |        |   |                                 |   | 13,293       |  |   |                                          |   |  |   | 13,293  |  
|Intangible assets                                             |  |                           |        |   |                                 |   | 41,015       |  |   |                                          |   |  |   | 41,015  |  
|Other assets                                                  |  |                           | 3,123   |   |                                 |   | 3,832        |  |   |                                          |   |  |   | 6,955   |  
|Deferred income taxes                                         |  |                           | 8,622   |   |                                 |   | 5,135        |  |   |                                          |   |  |   | 13,757  |  
|Investment in consolidated subsidiaries                       |  |                           | 231,282 |   |                                 |   |             |  |   | (231,282                                  | ) |  |   |        |  
|Property, plant and equipment, net                            |  |                           | 2,908   |   |                                 |   | 145,532      |  |   |                                          |   |  |   | 148,440 |  
|                                                              |  |                           |         |   |                                 |   |              |  |   |                                           |   |  |   |         |  
|Total Assets                                                  |  | $                         | 357,356 |   |                                 | $ | 259,692      |  | $ | (245,755                                  | ) |  | $ | 371,293 |  
|                                                              |  |                           |         |   |                                 |   |              |  |   |                                           |   |  |   |         |  
|                                                              |  |                           |         |  
|LIABILITIES AND STOCKHOLDERS EQUITY                          |  |                           |         |   |                                 |   |              |  |   |                                           |   |  |   |         |  
|Current Liabilities                                           |  |                           |         |   |                                 |   |              |  |   |                                           |   |  |   |         |  
|Trade accounts payable                                        |  | $                         | 1,002   |   |                                 | $ | 3,337        |  | $ |                                          |   |  | $ | 4,339   |  
|Due to affiliate                                              |  |                           | 14,473  |   |                                 |   |             |  |   | (14,473                                   | ) |  |   |        |  
|Accrued payroll and related benefits                          |  |                           | 499     |   |                                 |   | 3,802        |  |   |                                          |   |  |   | 4,301   |  
|Interest payable                                              |  |                           | 3,773   |   |                                 |   |             |  |   |                                          |   |  |   | 3,773   |  
|Television and radio broadcast rights payable                 |  |                           |        |   |                                 |   | 6,124        |  |   |                                          |   |  |   | 6,124   |  
|Current portion of accrued retirement benefits                |  |                           | 1,254   |   |                                 |   |             |  |   |                                          |   |  |   | 1,254   |  
|Other current liabilities                                     |  |                           | 1,855   |   |                                 |   | 3,857        |  |   |                                          |   |  |   | 5,712   |  
|                                                              |  |                           |         |   |                                 |   |              |  |   |                                           |   |  |   |         |  
|Total current liabilities                                     |  |                           | 22,856  |   |                                 |   | 17,120       |  |   | (14,473                                   | ) |  |   | 25,503  |  
|Long-term debt                                                |  |                           | 150,000 |   |                                 |   |             |  |   |                                          |   |  |   | 150,000 |  
|Accrued retirement benefits                                   |  |                           | 19,439  |   |                                 |   |             |  |   |                                          |   |  |   | 19,439  |  
|Other liabilities                                             |  |                           | 317     |   |                                 |   | 11,290       |  |   |                                          |   |  |   | 11,607  |  
|                                                              |  |                           |         |  
|Stockholders Equity                                          |  |                           |         |   |                                 |   |              |  |   |                                           |   |  |   |         |  
|Common stock                                                  |  |                           | 10,922  |   |                                 |   | 1,131        |  |   | (1,131                                    | ) |  |   | 10,922  |  
|Capital in excess of par                                      |  |                           | 11,140  |   |                                 |   | 164,234      |  |   | (164,234                                  | ) |  |   | 11,140  |  
|Accumulated other comprehensive income - net of income taxes: |  |                           |         |   |                                 |   |              |  |   |                                           |   |  |   |         |  
|Unrealized gain on marketable securities                      |  |                           | (158    | ) |                                 |   |             |  |   |                                          |   |  |   | (158    | )
|Accumulated loss                                              |  |                           | (2,545  | ) |                                 |   |             |  |   |                                          |   |  |   | (2,545  | )
|Prior service cost                                            |  |                           | (178    | ) |                                 |   |             |  |   |                                          |   |  |   | (178    | )
|Retained earnings                                             |  |                           | 145,563 |   |                                 |   | 65,917       |  |   | (65,917                                   | ) |  |   | 145,563 |  
|                                                              |  |                           |         |   |                                 |   |              |  |   |                                           |   |  |   |         |  
|Total Stockholders Equity                                    |  |                           | 164,744 |   |                                 |   | 231,282      |  |   | (231,282                                  | ) |  |   | 164,744 |  
|                                                              |  |                           |         |   |                                 |   |              |  |   |                                           |   |  |   |         |  
|Total Liabilities and Stockholders Equity                    |  | $                         | 357,356 |   |                                 | $ | 259,692      |  | $ | (245,755                                  | ) |  | $ | 371,293 |  
|                                                              |  |                           |         |   |                                 |   |              |  |   |                                           |   |  |   |         |  



17



---

##### Table of Contents

Financial Information for Guarantors

Condensed Consolidated Statement of Cash Flows

For the Nine months ended September 30, 2009



|                                                     |  |                           |         |   |                                 |   |        |              |  |   |                                           |   |  |   |         |  
|---------------------------------------------------- |  | ------------------------- | ------- | - | ------------------------------- | - | ------ | ------------ |  | - | ----------------------------------------- | - |  | - | ------- | -
|(In thousands)                                       |  | FisherCommunications,Inc. |         |   | 100% OwnedGuarantorSubsidiaries |   |        | Eliminations |  |   | FisherCommunications,Inc.
andSubsidiaries |  
|Net cash provided by (used in) operating activities  |  | $                         | (16,894 | ) |                                 | $ | 7,780  |              |  | $ |                                          |   |  | $ | (9,114  | )
|                                                     |  |                           |         |  
|Cash flows from investing activities                 |  |                           |         |   |                                 |   |        |              |  |   |                                           |   |  |   |         |  
|Capital contribution to subsidiary                   |  |                           | (35,000 | ) |                                 |   |       |              |  |   | 35,000                                    |   |  |   |        |  
|Redemption of short-term investments                 |  |                           | 60,000  |   |                                 |   |       |              |  |   |                                          |   |  |   | 60,000  |  
|Purchase of property, plant and equipment            |  |                           | (1,056  | ) |                                 |   | (7,623 | )            |  |   |                                          |   |  |   | (8,679  | )
|                                                     |  |                           |         |   |                                 |   |        |              |  |   |                                           |   |  |   |         |  
|Net cash provided by (used in) investing activities  |  |                           | 23,944  |   |                                 |   | (7,623 | )            |  |   | 35,000                                    |   |  |   | 51,321  |  
|                                                     |  |                           |         |   |                                 |   |        |              |  |   |                                           |   |  |   |         |  
|Cash flows from financing activities                 |  |                           |         |   |                                 |   |        |              |  |   |                                           |   |  |   |         |  
|Capital contribution from parent                     |  |                           |        |   |                                 |   | 35,000 |              |  |   | (35,000                                   | ) |  |   |        |  
|Repurchase of senior notes                           |  |                           | (24,428 | ) |                                 |   |       |              |  |   |                                          |   |  |   | (24,428 | )
|Payments on capital lease obligations                |  |                           |        |   |                                 |   | (115   | )            |  |   |                                          |   |  |   | (115    | )
|                                                     |  |                           |         |   |                                 |   |        |              |  |   |                                           |   |  |   |         |  
|Net cash provided by (used in) financing activities  |  |                           | (24,428 | ) |                                 |   | 34,885 |              |  |   | (35,000                                   | ) |  |   | (24,543 | )
|                                                     |  |                           |         |   |                                 |   |        |              |  |   |                                           |   |  |   |         |  
|Net increase (decrease) in cash and cash equivalents |  |                           | (17,378 | ) |                                 |   | 35,042 |              |  |   |                                          |   |  |   | 17,664  |  
|Cash and cash equivalents, beginning of period       |  |                           | 31,141  |   |                                 |   | 694    |              |  |   |                                          |   |  |   | 31,835  |  
|                                                     |  |                           |         |   |                                 |   |        |              |  |   |                                           |   |  |   |         |  
|Cash and cash equivalents, end of period             |  | $                         | 13,763  |   |                                 | $ | 35,736 |              |  | $ |                                          |   |  | $ | 49,499  |  
|                                                     |  |                           |         |   |                                 |   |        |              |  |   |                                           |   |  |   |         |  

Financial Information for Guarantors

Condensed Consolidated Statement of Cash Flows

For the Nine months ended September 30, 2008



|                                                     |  |                           |         |   |                                 |   |        |              |  |                                           |   |  |   |         |  
|---------------------------------------------------- |  | ------------------------- | ------- | - | ------------------------------- | - | ------ | ------------ |  | ----------------------------------------- | - |  | - | ------- | -
|(In thousands)                                       |  | FisherCommunications,Inc. |         |   | 100% OwnedGuarantorSubsidiaries |   |        | Eliminations |  | FisherCommunications,Inc. andSubsidiaries |  
|Net cash provided by (used in) operating activities  |  | $                         | (50,036 | ) |                                 | $ | 6,477  |              |  | $                                         |  |  | $ | (43,559 | )
|                                                     |  |                           |         |  
|Cash flows from investing activities                 |  |                           |         |   |                                 |   |        |              |  |                                           |   |  |   |         |  
|Purchase of marketable securities                    |  |                           |        |   |                                 |   | (77    | )            |  |                                           |  |  |   | (77     | )
|Purchase of short-term investments                   |  |                           | (58,909 | ) |                                 |   |       |              |  |                                           |  |  |   | (58,909 | )
|Proceeds from sale of marketable securities          |  |                           | 153,403 |   |                                 |   | 110    |              |  |                                           |  |  |   | 153,513 |  
|Purchase of television stations                      |  |                           | (52,365 | ) |                                 |   |       |              |  |                                           |  |  |   | (52,365 | )
|Decrease in restricted cash                          |  |                           | 52,365  |   |                                 |   |       |              |  |                                           |  |  |   | 52,365  |  
|Purchase of intangible assets                        |  |                           |        |   |                                 |   | (285   | )            |  |                                           |  |  |   | (285    | )
|Purchase of property, plant and equipment            |  |                           | (1,096  | ) |                                 |   | (6,139 | )            |  |                                           |  |  |   | (7,235  | )
|                                                     |  |                           |         |   |                                 |   |        |              |  |                                           |   |  |   |         |  
|Net cash provided by (used in) investing activities  |  |                           | 93,398  |   |                                 |   | (6,391 | )            |  |                                           |  |  |   | 87,007  |  
|                                                     |  |                           |         |   |                                 |   |        |              |  |                                           |   |  |   |         |  
|Cash flows from financing activities                 |  |                           |         |   |                                 |   |        |              |  |                                           |   |  |   |         |  
|Borrowings under borrowing agreements                |  |                           | 21,000  |   |                                 |   |       |              |  |                                           |  |  |   | 21,000  |  
|Payments on borrowing agreements                     |  |                           | (21,000 | ) |                                 |   |       |              |  |                                           |  |  |   | (21,000 | )
|Payments on capital lease obligations                |  |                           |        |   |                                 |   | (107   | )            |  |                                           |  |  |   | (107    | )
|Cash dividends paid                                  |  |                           | (30,684 | ) |                                 |   |       |              |  |                                           |  |  |   | (30,684 | )
|                                                     |  |                           |         |   |                                 |   |        |              |  |                                           |   |  |   |         |  
|Net cash used in financing activities                |  |                           | (30,684 | ) |                                 |   | (107   | )            |  |                                           |  |  |   | (30,791 | )
|                                                     |  |                           |         |   |                                 |   |        |              |  |                                           |   |  |   |         |  
|Net increase (decrease) in cash and cash equivalents |  |                           | 12,678  |   |                                 |   | (21    | )            |  |                                           |  |  |   | 12,657  |  
|Cash and cash equivalents, beginning of period       |  |                           | 5,804   |   |                                 |   | 706    |              |  |                                           |  |  |   | 6,510   |  
|                                                     |  |                           |         |   |                                 |   |        |              |  |                                           |   |  |   |         |  
|Cash and cash equivalents, end of period             |  | $                         | 18,482  |   |                                 | $ | 685    |              |  | $                                         |  |  | $ | 19,167  |  
|                                                     |  |                           |         |   |                                 |   |        |              |  |                                           |   |  |   |         |  



18



---

##### Table of Contents

Fisher Communications, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements(Continued)

(Unaudited)



16. Plaza Fire Expense

On July 2, 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 currently expects that all
final repairs and equipment replacement will be completed in the fourth quarter of 2009.

The Company has incurred
approximately $6.8 million in remediation and equipment replacement costs related to the Plaza fire, comprised of remediation expenses of $3.2 million, capital expenditures of $2.1 million and the loss on fixed assets destroyed by the fire of $1.5
million. The Company is recording the Plaza fire expenses as incurred and is recording insurance reimbursements within operating results in the period the reimbursements are considered probable and certain. Insurance reimbursements of $725,000
were recorded in the third quarter of 2009.

The Companys insurers have indicated that the event is a covered occurrence
under the applicable insurance policies, and they continue to investigate the incident. The Company currently expects that a significant portion of its incurred costs will be covered by its insurance policies; however, the actual amount and timing
of the reimbursement remains subject to the insurance companies investigation. The Company intends to vigorously assert all of its claims related to the Plaza fire as necessary.

17. 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.

As of September 30, 2009, the Company had received approximately $1.8 million of the substitute equipment and is in the process of
installing the equipment. The $1.8 million is recorded as deferred gain in other current liabilities on the Consolidated Balance Sheet. Once the equipment is fully installed and is in use, the deferred gain will be recorded as a gain on our
Statement of Operations.



19



---

##### Table of Contents

|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- | -------------------------------------------------------------------------------------

The following discussion and analysis should be read in conjunction with the condensed consolidated financial statements and related notes
thereto included elsewhere in this quarterly report on Form 10-Q. Some of the statements in this quarterly report are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements
include all passages containing verbs such as aims, anticipates, believes, estimates, expects, hopes, intends, plans, predicts,
projects or targets or nouns corresponding to such verbs. Forward-looking statements also include any other passages that are primarily relevant to expected future events or that can only be fully evaluated by events that
will occur in the future. There are many risks and uncertainties that could cause actual results to differ materially from those predicted in our forward-looking statements, including, without limitation, those factors discussed under the caption
Risk Factors in Item 1A of Part I of our Annual Report on Form 10-K for the fiscal year ended December 31, 2008, which was filed with the Securities and Exchange Commission on March 16, 2009, as supplemented by the
Risk Factors contained in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2009, which was filed with the Securities and Exchange Commission on May 11, 2009. 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 and nine months ended September 30, 2009, compared with the corresponding periods in 2008.

Overview

We are a communications company. We own and 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 generate revenue from the sale of
local, regional and national advertising and, to a much lesser extent, from retransmission, network compensation, satellite and fiber transmission services, 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, such as those affecting the West Coast 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, account for
approximately 61% of our television broadcasting revenue and are affiliated with the ABC Television Network. Nine of our television stations are affiliated with the CBS Television Network (including a 50%-owned television station), six of our
television stations are affiliated with Univision (Spanish-language), one of our television stations is affiliated with the FOX Television Network and the remainder of our television stations are either simulcast or independent. 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
location and infrastructure provided at this facility. As of September 30, 2009, approximately 96% of Fisher Plaza was occupied or committed for occupancy (43% occupied by Fisher entities). Revenue and operating income from Fisher Plaza are
dependent upon the general economic climate, Seattle economic climate, outlook of the telecommunications and technology sectors and commercial real estate conditions, including the availability of space in other competing properties.

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 below.



20



---

##### Table of Contents

Significant Developments

The following significant developments affect the comparability of our financial statements for the three and nine months ended
September 30, 2009 and 2008.

ABC Affiliate AgreementIn August 2009, we agreed to terms for the renewal of the
network affiliation agreement with American Broadcasting Company, Inc (ABC). The renewed affiliation agreement, which requires the payment of an annual license fee to ABC for network programming, expires on August 31, 2014.

Fisher Plaza FireOn July 2, 2009, an electrical fire contained within a garage level equipment room of the east
building of our Fisher Plaza facility 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. We currently expect that all final repairs and equipment replacement will be completed in the fourth quarter of 2009.

We have incurred approximately $6.8 million in remediation and equipment replacement costs related to the Fisher Plaza fire, including remediation expenses of $3.2 million, capital expenditures of $2.1 million and the loss of fixed assets
destroyed by the fire of $1.5 million. We are recording the Fisher Plaza fire expenses as incurred, and recording insurance reimbursements within operating results in the period the reimbursements are considered probable and certain. Insurance
reimbursements of $725,000 were recorded in the third quarter of 2009.

We currently anticipate recording approximately $1
million to $2 million of additional remediation expenses and approximately $2 million to $3 million of additional capital expenditures in the fourth quarter of 2009 related to the Fisher Plaza fire.

Our insurers have indicated that the event is a covered occurrence under the applicable insurance policies, and they continue to investigate
the incident. We currently expect that a significant portion of our costs will be covered by the Companys insurance policies; however, the actual amount and timing of the reimbursement of the costs remains subject to the insurance
companies investigation. We intend to vigorously assert all claims related to the Fisher Plaza fire as necessary.

Retransmission Agreements We executed final retransmission consent agreements with several of our cable distribution partners in the third quarter of 2009. The periods covered by these agreements began on January 1, 2009.
Accordingly, our third quarter financial results include approximately $2.0 million of cable retransmission fees attributable to those contracts for the period from January 1, 2009 to June 30, 2009. Excluding this $2.0 million of
retransmission revenue attributable to the first half of 2009, total retransmission revenue increased $1.5 million, or 197%, from the third quarter of 2008.

Repurchase of Senior Notes During the first half of 2009, we repurchased $28.0 million aggregate principal amount of our 8.625% senior notes due in 2014 (Senior Notes) for a total
consideration of $24.4 million in cash plus accrued interest of $637,000. We recorded a gain on extinguishment of debt, net of a charge for related unamortized debt issuance costs of $557,000, resulting in a net gain of approximately $3.0 million on
the extinguishment of debt for the nine months ended September 30, 2009. We did not repurchase any of our Senior Notes during the three months ended September 30, 2009 and the three and nine months ended September 30, 2008.

Local Marketing Agreement In May 2009, we 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 our KOMO News Radio programming to FM listeners in the Seattle  Tacoma radio
market. Contemporaneously with the LMA, we entered into an option agreement with South Sound, whereby we have the right to acquire the station until May 8, 2012. If we do not exercise the option prior to its expiration date, we are obligated to
pay South Sound up to approximately $1.4 million. Advertising revenue earned under this LMA is recorded as operating revenue and LMA fees and programming expenses are recorded as operating costs.

Dividends on Safeco Corporation Common StockDuring the three and nine months ended September 30, 2008, we recorded dividends on
our shares of Safeco Corporation common stock in the amount of $259,000 and $2.1 million, respectively. No dividend income was recorded in the three months and nine months ended September 30, 2009, as we sold our remaining Safeco shares in
2008.

Sale of Safeco Corporation Common Stock During the third quarter of 2008, we sold 753,720 shares of Safeco
Corporation common stock. The shares were sold at an average price of $65.38 per share, resulting in pre-tax net proceeds of $49.3 million. The book basis of the shares sold totaled $256,000, resulting in a pre-tax gain on sale of
$49.0 million.



21



---

##### Table of Contents

For the nine months ended September 30, 2008, we sold all 2.3 million shares of
our Safeco Corporation common stock resulting in pretax net proceeds of $153.4 million. The book basis of the shares sold totaled $782,000, resulting in a pre-tax gain on sale of $152.6 million, which is included in other income, net.

Special Dividend On July 30, 2008 our Board of Directors declared a special dividend of $3.50 per share on our
common stock totaling $30.7 million, which was paid on August 29, 2008 to shareholders of record on August 15, 2008.

Expiration of Seattle Mariners Radio Rights Agreement In July 2008, we announced that we would not renew our radio rights agreement with the Seattle Mariners (the Mariners Agreement). Accordingly, the 2008 season was the
final year of our commitments under the Mariners Agreement. Our results for the three and nine months ended September 30, 2008, reflect $4.1 million and $8.7 million of advertising revenue, respectively, and $7.7 million and $15.8 million of
expenses, respectively, related to the Mariners Agreement. No such advertising revenue or expenses are reflected in our results for the nine months ended September 30, 2009.

Termination of National Advertising Representation Agreement In April 2008, we terminated the agreement with our national advertising
representation firm. The successor firm will satisfy our contractual termination obligation to the predecessor firm with no cash payment made by us. In the second quarter of 2008, we recognized a net non-cash charge of $5.0 million to selling,
general and administrative expenses, and we are amortizing the related net liability as a non-cash benefit over the five-year term of the new agreement. We recognized a $365,000 and $1.1 million benefit due to this amortization for the three and
nine months ended September 30, 2009, respectively. In 2008, we recognized a $365,000 and $898,000 benefit due to this amortization for the three and nine months ended September 30, 2008, respectively.

ReclassificationsThe results of operations of Pegasus News, Inc. have been reclassified from continuing operations to discontinued
operations in the condensed consolidated statement of operations for the three and nine months ended September 30, 2008 to reflect our sale of Pegasus on December 31, 2008. Additionally, the results of operations of five small-market radio
stations in Montana, previously classified as discontinued operations in the condensed consolidated statement of operations for the three and nine months ended September 30, 2008, have been presented as continuing operations. See Note 8 to the
condensed consolidated financial statements. The reclassifications had no effect on net income (loss), shareholders equity or cash flows from operating, investing or financing activities.

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 and insurance receivables 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 Form 10-K for the year ended December 31, 2008, as updated in our Form 10-Q for the quarter ended March 31, 2009, 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 Form 10-K for the year ended December 31, 2008.

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

Consolidated Results of Operations

We report financial data for three segments: television, radio and Fisher
Plaza. The television segment includes the operations of 20 owned and operated television stations (including a 50%-owned television station) and our internet business. The radio segment includes the operations of three Seattle radio stations and
five Montana radio stations and two managed radio stations. Corporate expenses are allocated to the television and radio segments based on a pro-rata basis. The Fisher Plaza segment consists of the operations of Fisher Plaza, a 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, but do pay common-area
maintenance expenses. The segment data presented below includes additional allocation of depreciation and certain operating expenses from Fisher Plaza to our Seattle-based television and radio operations.



22



---

##### Table of Contents

The following table sets forth our results of operations for the three and nine months ended
September 30, 2009 and 2008, including the dollar and percentage variances between such periods. Percentage variances have been omitted where they are not considered meaningful.



|                                                             |  |                                |         |   |          |   |         |                                 |  |   |          |   |  |      |   |  |      |        |   |   |   |        |   |  |   |         |   |  |      |  
|------------------------------------------------------------ |  | ------------------------------ | ------- | - | -------- | - | ------- | ------------------------------- |  | - | -------- | - |  | ---- | - |  | ---- | ------ | - | - | - | ------ | - |  | - | ------- | - |  | ---- | -
|                                                             |  | Nine months endedSeptember 30, |         |   | Variance |   |         | Three months endedSeptember 30, |  |   | Variance |  
|(dollars in thousands)                                       |  | 2009                           |         |   | 2008     |   |         | $                               |  |   | %        |   |  | 2009 |   |  | 2008 |        |   | $ |   |        | % | 
|(unaudited)                                                  |  |                                |         |   |          |   |         |                                 |  |   |          |   |  |      |   |  |      |        |   |   |   |        |   | 
|Revenue                                                      |  |                                |         |   |          |   |         |                                 |  |   |          |   |  |      |   |  |      |        |   |   |   |        |   |  |   |         |   |  |      |  
|Television                                                   |  | $                              | 68,120  |   |          | $ | 86,151  |                                 |  | $ | (18,031  | ) |  | -21  | % |  | $    | 25,116 |   |   | $ | 27,343 |   |  | $ | (2,227  | ) |  | -8   | %
|Radio                                                        |  |                                | 16,758  |   |          |   | 30,151  |                                 |  |   | (13,393  | ) |  | -44  | % |  |      | 5,961  |   |   |   | 11,673 |   |  |   | (5,712  | ) |  | -49  | %
|Fisher Plaza                                                 |  |                                | 10,231  |   |          |   | 9,794   |                                 |  |   | 437      |   |  | 4    | % |  |      | 3,453  |   |   |   | 3,289  |   |  |   | 164     |   |  | 5    | %
|Other                                                        |  |                                | (86     | ) |          |   | (50     | )                               |  |   | (36      | ) |  | 72   | % |  |      | (3     | ) |   |   | (8     | ) |  |   | 5       |   |  |      |  
|                                                             |  |                                |         |   |          |   |         |                                 |  |   |          |   |  |      |   |  |      |        |   |   |   |        |   |  |   |         |   |  |      |  
|Consolidated                                                 |  |                                | 95,023  |   |          |   | 126,046 |                                 |  |   | (31,023  | ) |  | -25  | % |  |      | 34,527 |   |   |   | 42,297 |   |  |   | (7,770  | ) |  | -18  | %
|Direct operating costs                                       |  |                                |         |   |          |   |         |                                 |  |   |          |   |  |      |   |  |      |        |   |   |   |        |   |  |   |         |   |  |      |  
|Television                                                   |  |                                | 36,928  |   |          |   | 39,242  |                                 |  |   | (2,314   | ) |  | -6   | % |  |      | 12,522 |   |   |   | 13,179 |   |  |   | (657    | ) |  | -5   | %
|Radio                                                        |  |                                | 6,649   |   |          |   | 9,152   |                                 |  |   | (2,503   | ) |  | -27  | % |  |      | 2,236  |   |   |   | 2,912  |   |  |   | (676    | ) |  | -23  | %
|Fisher Plaza                                                 |  |                                | 2,766   |   |          |   | 2,759   |                                 |  |   | 7        |   |  | 0    | % |  |      | 899    |   |   |   | 985    |   |  |   | (86     | ) |  | -9   | %
|Other                                                        |  |                                | 1,605   |   |          |   | 1,526   |                                 |  |   | 79       |   |  | 5    | % |  |      | 613    |   |   |   | 513    |   |  |   | 100     |   |  | 19   | %
|                                                             |  |                                |         |   |          |   |         |                                 |  |   |          |   |  |      |   |  |      |        |   |   |   |        |   |  |   |         |   |  |      |  
|Consolidated                                                 |  |                                | 47,948  |   |          |   | 52,679  |                                 |  |   | (4,731   | ) |  | -9   | % |  |      | 16,270 |   |   |   | 17,589 |   |  |   | (1,319  | ) |  | -7   | %
|Selling, general and administrative expenses                 |  |                                |         |   |          |   |         |                                 |  |   |          |   |  |      |   |  |      |        |   |   |   |        |   |  |   |         |   |  |      |  
|Television                                                   |  |                                | 22,693  |   |          |   | 29,964  |                                 |  |   | (7,271   | ) |  | -24  | % |  |      | 7,240  |   |   |   | 7,871  |   |  |   | (631    | ) |  | -8   | %
|Radio                                                        |  |                                | 7,887   |   |          |   | 13,113  |                                 |  |   | (5,226   | ) |  | -40  | % |  |      | 2,732  |   |   |   | 4,999  |   |  |   | (2,267  | ) |  | -45  | %
|Fisher Plaza                                                 |  |                                | 198     |   |          |   | 525     |                                 |  |   | (327     | ) |  | -62  | % |  |      | (18    | ) |   |   | 125    |   |  |   | (143    | ) |  | -114 | %
|Other                                                        |  |                                | 6,076   |   |          |   | 6,474   |                                 |  |   | (398     | ) |  | -6   | % |  |      | 1,946  |   |   |   | 1,892  |   |  |   | 54      |   |  | 3    | %
|                                                             |  |                                |         |   |          |   |         |                                 |  |   |          |   |  |      |   |  |      |        |   |   |   |        |   |  |   |         |   |  |      |  
|Consolidated                                                 |  |                                | 36,854  |   |          |   | 50,076  |                                 |  |   | (13,222  | ) |  | -26  | % |  |      | 11,900 |   |   |   | 14,887 |   |  |   | (2,987  | ) |  | -20  | %
|Amortization of program rights                               |  |                                |         |   |          |   |         |                                 |  |   |          |   |  |      |   |  |      |        |   |   |   |        |   |  |   |         |   |  |      |  
|Television                                                   |  |                                | 7,084   |   |          |   | 6,069   |                                 |  |   | 1,015    |   |  | 17   | % |  |      | 2,507  |   |   |   | 2,090  |   |  |   | 417     |   |  | 20   | %
|Radio                                                        |  |                                |        |   |          |   | 10,749  |                                 |  |   | (10,749  | ) |  | -100 | % |  |      |       |   |   |   | 5,267  |   |  |   | (5,267  | ) |  | -100 | %
|Fisher Plaza                                                 |  |                                |        |   |          |   |        |                                 |  |   |         |   |  |      |   |  |      |       |   |   |   |       |   |  |   |        |   |  |      |  
|Other                                                        |  |                                |        |   |          |   |        |                                 |  |   |         |   |  |      |   |  |      |       |   |   |   |       |   |  |   |        |   |  |      |  
|                                                             |  |                                |         |   |          |   |         |                                 |  |   |          |   |  |      |   |  |      |        |   |   |   |        |   |  |   |         |   |  |      |  
|Consolidated                                                 |  |                                | 7,084   |   |          |   | 16,818  |                                 |  |   | (9,734   | ) |  | -58  | % |  |      | 2,507  |   |   |   | 7,357  |   |  |   | (4,850  | ) |  | -66  | %
|Depreciation and amortization                                |  |                                |         |   |          |   |         |                                 |  |   |          |   |  |      |   |  |      |        |   |   |   |        |   |  |   |         |   |  |      |  
|Television                                                   |  |                                | 6,523   |   |          |   | 5,994   |                                 |  |   | 529      |   |  | 9    | % |  |      | 2,184  |   |   |   | 2,018  |   |  |   | 166     |   |  | 8    | %
|Radio                                                        |  |                                | 590     |   |          |   | 642     |                                 |  |   | (52      | ) |  | -8   | % |  |      | 218    |   |   |   | 193    |   |  |   | 25      |   |  | 13   | %
|Fisher Plaza                                                 |  |                                | 2,268   |   |          |   | 2,372   |                                 |  |   | (104     | ) |  | -4   | % |  |      | 741    |   |   |   | 740    |   |  |   | 1       |   |  | 0    | %
|Other                                                        |  |                                | 792     |   |          |   | 282     |                                 |  |   | 510      |   |  | 181  | % |  |      | 307    |   |   |   | 126    |   |  |   | 181     |   |  | 144  | %
|                                                             |  |                                |         |   |          |   |         |                                 |  |   |          |   |  |      |   |  |      |        |   |   |   |        |   |  |   |         |   |  |      |  
|Consolidated                                                 |  |                                | 10,173  |   |          |   | 9,290   |                                 |  |   | 883      |   |  | 10   | % |  |      | 3,450  |   |   |   | 3,077  |   |  |   | 373     |   |  | 12   | %
|Plaza fire expenses, net                                     |  |                                |         |   |          |   |         |                                 |  |   |          |   |  |      |   |  |      |        |   |   |   |        |   |  |   |         |   |  |      |  
|Television                                                   |  |                                |        |   |          |   |        |                                 |  |   |         |   |  |      |   |  |      |       |   |   |   |       |   |  |   |        |   |  |      |  
|Radio                                                        |  |                                |        |   |          |   |        |                                 |  |   |         |   |  |      |   |  |      |       |   |   |   |       |   |  |   |        |   |  |      |  
|Fisher Plaza                                                 |  |                                | 3,951   |   |          |   |        |                                 |  |   | 3,951    |   |  |      |   |  |      | 3,951  |   |   |   |       |   |  |   | 3,951   |   |  |      |  
|Other                                                        |  |                                |        |   |          |   |        |                                 |  |   |         |   |  |      |   |  |      |       |   |   |   |       |   |  |   |        |   |  |      |  
|                                                             |  |                                |         |   |          |   |         |                                 |  |   |          |   |  |      |   |  |      |        |   |   |   |        |   |  |   |         |   |  |      |  
|Consolidated                                                 |  |                                | 3,951   |   |          |   |        |                                 |  |   | 3,951    |   |  |      |   |  |      | 3,951  |   |   |   |       |   |  |   | 3,951   |   |  |      |  
|Loss from operations                                         |  |                                |         |   |          |   |         |                                 |  |   |          |   |  |      |   |  |      |        |   |   |   |        |   |  |   |         |   |  |      |  
|Television                                                   |  |                                | (5,108  | ) |          |   | 4,882   |                                 |  |   | (9,990   | ) |  |      |   |  |      | 663    |   |   |   | 2,185  |   |  |   | (1,522  | ) |  |      |  
|Radio                                                        |  |                                | 1,632   |   |          |   | (3,505  | )                               |  |   | 5,137    |   |  |      |   |  |      | 775    |   |   |   | (1,698 | ) |  |   | 2,473   |   |  |      |  
|Fisher Plaza                                                 |  |                                | 1,048   |   |          |   | 4,138   |                                 |  |   | (3,090   | ) |  |      |   |  |      | (2,120 | ) |   |   | 1,439  |   |  |   | (3,559  | ) |  |      |  
|Other                                                        |  |                                | (8,559  | ) |          |   | (8,332  | )                               |  |   | (227     | ) |  |      |   |  |      | (2,869 | ) |   |   | (2,539 | ) |  |   | (330    | ) |  |      |  
|                                                             |  |                                |         |   |          |   |         |                                 |  |   |          |   |  |      |   |  |      |        |   |   |   |        |   |  |   |         |   |  |      |  
|Consolidated                                                 |  |                                | (10,987 | ) |          |   | (2,817  | )                               |  |   | (8,170   | ) |  |      |   |  |      | (3,551 | ) |   |   | (613   | ) |  |   | (2,938  | ) |  |      |  
|Gain on extinguishment of senior notes, net                  |  |                                | 2,965   |   |          |   |        |                                 |  |   | 2,965    |   |  |      |   |  |      |       |   |   |   |       |   |  |   |        |   |  |      |  
|Other income, net                                            |  |                                | 1,221   |   |          |   | 155,808 |                                 |  |   | (154,587 | ) |  |      |   |  |      | 392    |   |   |   | 50,046 |   |  |   | (49,654 | ) |  |      |  
|Interest expense                                             |  |                                | (8,917  | ) |          |   | (10,343 | )                               |  |   | 1,426    |   |  |      |   |  |      | (2,714 | ) |   |   | (3,441 | ) |  |   | 727     |   |  |      |  
|                                                             |  |                                |         |   |          |   |         |                                 |  |   |          |   |  |      |   |  |      |        |   |   |   |        |   |  |   |         |   |  |      |  
|Income (loss) from continuing operations before income taxes |  |                                | (15,718 | ) |          |   | 142,648 |                                 |  |   | (158,366 | ) |  |      |   |  |      | (5,873 | ) |   |   | 45,992 |   |  |   | (51,865 | ) |  |      |  
|Provision (benefit) for income taxes                         |  |                                | (5,309  | ) |          |   | 49,545  |                                 |  |   | (54,854  | ) |  |      |   |  |      | (1,863 | ) |   |   | 15,999 |   |  |   | (17,862 | ) |  |      |  
|                                                             |  |                                |         |   |          |   |         |                                 |  |   |          |   |  |      |   |  |      |        |   |   |   |        |   |  |   |         |   |  |      |  
|Income (loss) from continuing operations                     |  |                                | (10,409 | ) |          |   | 93,103  |                                 |  |   | (103,512 | ) |  |      |   |  |      | (4,010 | ) |   |   | 29,993 |   |  |   | (34,003 | ) |  |      |  
|Loss from discontinued operations, net of income taxes       |  |                                |        |   |          |   | (720    | )                               |  |   | 720      |   |  |      |   |  |      |       |   |   |   | (218   | ) |  |   | 218     |   |  |      |  
|                                                             |  |                                |         |   |          |   |         |                                 |  |   |          |   |  |      |   |  |      |        |   |   |   |        |   |  |   |         |   |  |      |  
|Net income (loss)                                            |  | $                              | (10,409 | ) |          | $ | 92,383  |                                 |  |   | (102,792 | ) |  |      |   |  | $    | (4,010 | ) |   | $ | 29,775 |   |  |   | (33,785 | ) |  |      |  
|                                                             |  |                                |         |   |          |   |         |                                 |  |   |          |   |  |      |   |  |      |        |   |   |   |        |   |  |   |         |   |  |      |  

Comparison of Three and Nine months ended September 30, 2009 and 2008

Revenue

The current U.S. financial crisis and broader economic recession and the resulting sharp declines in advertising spending have negatively impacted our television and radio revenue for the three and nine months ended September 30, 2009.

Automotive-related advertising, one of our largest advertising categories, decreased 31% and 51% for the three and nine
months ended September 30, 2009 as compared to the same periods in 2008, respectively. Other similar major categories including, retailing (down 26% for the quarter and 28% year-to-date) and professional services (down 4% for the quarter and
16% year-to-date) have followed a consistent downward trend over the past year. This trend is primarily due to the current adverse condition of the automotive industry and the ongoing economic recession and resulting decline in the demand for
advertising from these and other business categories. A continued pattern of deterioration in advertising revenue from these sources could materially and adversely affect our future results of operations.



23



---

##### Table of Contents

Television revenue decreased in the three and nine months ended September 30, 2009
compared to the same periods in 2008, primarily due to sharp declines in local, national and political advertising spending in this broad economic recession and the absence of our stations from DISH Network (DISH) in the first half of
2009 due to the expiration of our retransmission agreement with DISH in December 2008. Political advertising revenue decreased 89% for both the three and nine months ended September 2009 as compared to the same periods in 2008, respectively. The
decrease in advertising spending was partially offset by an increase in retransmission revenue due to our new retransmission agreements as discussed below. The decrease in local advertising revenue was due to general economic pressure that has
continued to impact a number of local economies throughout 2009, including those on the West Coast, primarily in the home products, automobile, professional services and retail segments. The decrease in national advertising sales was due to the same
general negative economic conditions, which have impacted most national advertising categories, particularly automotive spending.

Revenue from our ABC-affiliated stations decreased 2% and 22% in the three and nine months ended September 30, 2009 as compared to the same periods in 2008, respectively, primarily due to reduced local and national advertising revenue
given the ongoing economic recession, reduced political advertising revenue and the absence of our stations from DISH during the first half of 2009. Revenue from our CBS-affiliated stations decreased 23% for both the three and nine months ended
September 30, 2009, as compared to the same periods in 2008, also primarily due to reduced local and national advertising revenue given the ongoing recession, reduced political advertising revenue and the absence of our stations from DISH.
Revenue from our Spanish-language television stations decreased 5% in both the three and nine months ended September 30, 2009 as compared to the same periods in 2008, respectively, primarily due to reduced local and national advertising revenue
given the ongoing economic recession.

We completed negotiations for new retransmission consent agreements with over 50
distribution partners in the fourth quarter of 2008 and the first nine months of 2009. We executed final retransmission consent agreements with several of our cable distribution partners in the third quarter of 2009. The periods covered by these
agreements began on January 1, 2009. Accordingly, our third quarter financial results include approximately $2.0 million of cable retransmission fees attributable to those contracts for the period from January 1, 2009 to June 30,
2009. As a result, retransmission revenue increased $3.5 million and $3.8 million in the three and nine months ended September 30, 2009, respectively, as compared to the same periods in 2008. Additionally, on June 10, 2009, we executed a
new multi-year retransmission agreement with DISH. As part of the agreement, we agreed to release all prior legal claims against DISH. Retransmission fees under the new DISH agreement began accruing as of the date of execution.

Radio revenue decreased 49% and 44% in the three and nine months ended September 30, 2009 compared to the same periods in 2008,
respectively, primarily due to a decline in advertising revenue related to our non-renewal of the Mariners Agreement and decreased local, national and non-traditional advertising revenue resulting from the ongoing economic recession. Radio revenue
for the three and nine months ended September 30, 2008 included advertising revenue from the Mariners Agreement, which was not renewed for 2009.

The revenue increase at Fisher Plaza in the three and nine months ended September 30, 2009 as compared to the same periods in 2008, was primarily due to increased rental revenue and service fees, as
well as increased electrical infrastructure fees and tenant reimbursements. As of September 30, 2009, approximately 96% of Fisher Plaza was occupied or committed for occupancy (43% 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.

The decrease in direct operating costs for
the television segment in the three and nine months ended September 30, 2009 compared to the same periods in 2008, resulted primarily from our efforts to reduce operating expenses, such as headcount costs and administrative costs, in this
difficult economic environment. We continue to look at cost efficiencies in our operating cost base.

Direct operating costs
decreased for the radio segment in the three and nine months ended September 30, 2009 as compared to the same periods in 2008. The decrease was primarily due to our non-renewal of the Mariners Agreement in 2008, as well as decreased
compensation-related costs associated with news and programming.

Direct operating costs decreased at Fisher Plaza in the
three ended September 30, 2009 as compared to the same periods in 2008, primarily due to lower repair and maintenance costs during the third quarter of 2009.

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.



24



---

##### Table of Contents

Selling, general and administrative expenses

The decrease in selling, general and administrative expenses in our television segment in the three and nine months ended September 30,
2009 compared to the same periods in 2008, was primarily due to reduced marketing costs, compensation and administrative costs. These costs decreased primarily from our reduced headcount and commissions. Our 2009 results also reflect the benefit
related to the amortization of the liability recorded upon the termination of our national advertising representation agreement.

The decrease in selling, general and administrative expenses in our radio segment in the three and nine months ended September 30, 2009 compared to the same periods in 2008 was primarily due to our non-renewal of the Mariners Agreement
in 2008, as well as decreased compensation and marketing costs.

Selling, general and administrative expenses decreased at
Fisher Plaza in the three and nine months ended September 30, 2009 compared to the same periods in 2008 primarily due to lower than expected operating costs.

Other selling, general and administrative expenses increased in the three months ended September 30, 2009 compared to the same period in 2008 primarily related to an increase in compensation. For the
nine months ended September 30, 2009, corporate selling, general and administrative expenses decreased compared to the same period in 2008 primarily due to decreased consulting costs.

Amortization of program rights

Amortization of program rights for our television segment increased in the three and nine months ended September 30, 2009 compared to the same periods in 2008, primarily due to an increase in rates
pursuant to our television programming contracts.

Amortization of program rights for our radio segment in the three and nine
months ended September 30, 2008 was related to the Mariners Agreement.

Depreciation and amortization

Depreciation and amortization for our television segment increased in the three and nine months ended
September 30, 2009 compared to the same periods in 2008 primarily due to investments in upgrading our broadcasting equipment at KOMO and KATU.

Depreciation and amortization for our radio segment increased slightly in the three months ended September 30, 2009 due to small fixed asset additions at our radio stations in Montana. For the nine
months ended September 30, 2009, depreciation and amortization for our radio segment decreased compared to the same period in 2008, as certain assets have become fully depreciated.

Depreciation and amortization for our Fisher Plaza segment during the three months ended September 30, 2009 remained fairly consistent
with the same period in 2008. For the nine months ended September 30, 2009, depreciation and amortization for our plaza segment decreased compared to the same period in 2008, as certain assets have become fully depreciated.

Other depreciation and amortization increased in the three and nine months ended September 30, 2009 compared to the same periods in
2008, primarily due to asset additions associated with information technology infrastructure replacements.

Plaza fire
expenses, net

Plaza fire expenses, net for the nine months ended September 30, 2009, represent costs related to
the Fisher Plaza fire comprised of remediation costs of $3.2 million and loss of fixed assets destroyed by the fire of $1.5 million, offset by $725,000 of insurance reimbursements recorded during the three months ended September 30, 2009. We
did not have these costs in comparable periods in 2008.

Other income, net

Other income, net, for the three and nine months ended September 30, 2009 consists of interest income, income from the sale of a
trademark and other miscellaneous income. During the three and nine months ended September 30, 2008, other income, net, consisted primarily of interest income, Safeco Corporation dividend income and the proceeds of our sale of Safeco
Corporation common stock, resulting in a pre-tax gain of $152.6 million.

Gain on extinguishment of senior notes, net

During the nine months ended September 30, 2009, we repurchased $28.0 million aggregate principal amount of our
Senior Notes for total consideration of $24.4 million in cash plus accrued interest of $637,000. A gain on extinguishment of debt was recorded net of a charge for related unamortized debt issuance costs of $557,000, resulting in a net gain of
approximately $3.0 million.



25



---

##### Table of Contents

Interest expense

Interest expense consists primarily of interest on our Senior Notes and amortization of the related loan fees, as well as interest during the
three and nine months ended September 30, 2008 on outstanding borrowings under our former $20 million revolving credit facility. Interest expense in the three and nine months ended September 30, 2009 decreased from the same periods in
2008, primarily due to our repurchase of Senior Notes during such periods. We terminated the revolving credit facility in December 2008.

Provision (benefit) for income taxes

Our effective tax was 34% and
35% for 2009 and 2008, respectively. Our effective tax rate is calculated on the statutory rate of 35%, increased or decreased 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.

Due to the uncertainty of our ability to generate sufficient state taxable income to realize our deferred state tax assets, we continue to record a 100% valuation allowance for these deferred tax assets.
As a result, our effective tax rate is not affected by changes in the state tax rates.

Loss from discontinued
operations, net of income taxes

The loss from discontinued operations for the three and nine months ended
September 30, 2008 was related to the operations of Pegasus News, Inc., a local news service, specializing in providing personalized online local news, information and advertising in Dallas, Texas, and is presented net of income taxes. See Note
8 to our condensed consolidated financial statements for more information on our discontinued operations.

Liquidity and Capital Resources

Liquidity

Our liquidity is primarily dependent upon our net cash from operating activities and our cash and cash equivalents. Our net cash from operating activities is sensitive to many factors, including changes
in working capital, the timing of cash receipts and payments and the timing and magnitude of capital expenditures. Our working capital is dependent upon many variables, including operating results, receivables, capital expenditures and the timing of
cash receipts and payments. We currently intend to finance our working capital, debt service and capital expenditures primarily through operating activities and cash on hand. Given the ongoing economic recession and its effect on the broadcasting
industry and our business, we are closely monitoring our capital spending plan and have reduced overall capital spending by postponing certain anticipated projects. We do not believe the postponement of these projects will have a material impact on
revenue or our operations.

The current economic recession and tightening investment and credit markets have had a significant
negative impact on advertising spending by our customers in various categories. If the current difficult general economic conditions continue, we believe that our revenue, cash flow from operations and net income will continue to be negatively
impacted and may continue to decline.

We have incurred approximately $6.8 million in remediation and equipment replacement
costs related to the Fisher Plaza fire, including remediation expenses of $3.2 million, capital expenditures of $2.1 million and the loss of fixed assets destroyed by the fire of $1.5 million. We are recording the Fisher Plaza fire expenses as
incurred, less amounts reimbursed by the Companys insurers. Insurance reimbursements of $725,000 were recorded in the third quarter of 2009. We will record future insurance reimbursements within our operating results in the period the
reimbursements are considered probable and certain. We currently anticipate recording approximately $1 million to $2 million of additional remediation expenses and approximately $2 million to $3 million of additional capital expenditures in the
fourth quarter of 2009 related to the Plaza fire.

Reimbursement for a significant portion of our expenditures related to the
Fisher Plaza fire remains subject to the resolution of our pending insurance claims.

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.

Capital Resources

Cash and cash equivalents were approximately $49.5 million as of September 30, 2009 compared to cash, cash equivalents and short-term investments of $91.5 million as of December 31, 2008. The
decrease was primarily due to the repurchase of our Senior Notes for $24.4 million and the use of cash for operations during the nine month period ended September 30, 2009.



26



---

##### Table of Contents

In December 2008, we terminated our $20.0 million revolving senior credit facility. The
credit facility was collateralized by substantially all of our assets (excluding certain real property). In the future, we may obtain a replacement facility depending on market conditions and our current needs. Under the indenture governing our
Senior Notes (the Senior Notes Indenture), we currently have the ability to incur up to $40 million of additional indebtedness. 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.

As of December 31, 2008 we had outstanding $150
million aggregate principal amount of our Senior Notes. See Description of Indebtedness below. In the first half of 2009, we repurchased $28.0 million aggregate principal amount of Senior Notes for total consideration of $24.4 million in
cash plus accrued interest of $637,000. As a result, the aggregate principal amount of Senior Notes outstanding as of September 30, 2009 was $122.1 million. We may repurchase additional Senior Notes during the remainder of 2009 using cash on
hand.

Net cash used in operating activities

Net cash used in operating activities in the nine months ended September 30, 2009 was $9.1 million compared to $43.6 million in the nine
months ended September 30, 2008. Net cash used in operating activities consists of our net loss, adjusted by non-cash expenses such as depreciation and amortization, stock-based compensation and deferred income tax, further adjusted for the
changes in operating assets and liabilities. Additionally, in the nine month period ended September 30, 2009, we recognized a non-cash gain of approximately $3.0 million on the extinguishment of $28.0 million aggregate principal amount of
Senior Notes and a loss of $1.5 million of fixed assets destroyed in the Fisher Plaza fire.

Net cash provided by
investing activities

Net cash provided by investing activities in the nine months ended September 30, 2009 was
$51.3 million compared to $87.0 million in the nine months ended September 30, 2008. During the first nine months of 2009, cash flows provided by investing activities consisted primarily of proceeds of $60.0 million from the redemption of
commercial paper, offset by $8.7 million in purchases of property, plant and equipment. During the nine months ended September 30, 2008, cash flows provided by investing activities consisted primarily of proceeds from the sale of marketable
securities of $153.5 million, a decrease in restricted cash of $52.4 million, offset by $52.4 million for the purchase of television stations, $58.9 million for the purchase of short-term investments and $7.2 million in purchases of property, plant
and equipment.

Net cash used in financing activities

Net cash used in financing activities in the nine months ended September 30, 2009 was $24.5 million, primarily due to the retirement of
$28.0 million aggregate principal amount of Senior Notes for total consideration of $24.4 million in cash. Net cash used in financing activities in the nine months ended September 30, 2008 was $30.8 million, consisting of primarily of cash
dividend payments.

Description of Indebtedness

As of September 30, 2009, we had $122.1 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.

Our Senior Notes Indenture 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 Senior Notes 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 Senior Notes 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 are subject to various debt covenants and other restrictions under the Senior Notes 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. We were in compliance with all debt covenant requirements at September 30, 2009.

Recent Accounting Pronouncements

Refer to Note 2 to our condensed
consolidated financial statements included in Part 1, Item 1 of this report.



27



---

##### Table of Contents

|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 and investing activities.

As of September 30, 2009 and
December 31, 2008, all of our debt was at a fixed rate and totaled $122.1 million and $150.0 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 September 30, 2009 was $113.5 million, which was approximately $8.6 million less than its
carrying value. The estimated fair value of our long-term debt at December 31, 2008 was approximately $123.0 million, which was approximately $27.0 million less 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 September 30, 2009, amounted to $5.0 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.

Our short-term investments are comprised of commercial paper with
original maturities of greater than 91 days but less than one year, and we have classified our short-term investments as held-to-maturity. The securities are carried at amortized cost using the specific identification method, and interest income is
recorded using an effective interest rate with the associated discount amortized to interest income. Commercial paper prices are susceptible to changes in market interest rates. However, the relatively short-term nature of our commercial paper
minimizes interest rate risk. Because our short-term investments are classified as held-to-maturity and carried at amortized cost, fluctuations in market interest rates do not affect the carrying value or interest income recognized. Due to the short
duration and nature of these instruments, we do not believe that we have a significant exposure to interest rate risk related to our short-term investments. As of September 30, 2009 and December 31, 2008, our short-term investment carrying
value of $0 and $59.7 million, respectively, approximated fair value. Fair values for these instruments are estimated using best available evidence including broker quotes, prices for similar investments, interest rates and credit risk.



|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 September 30, 2009. Based on their evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end
of our fiscal quarter ended September 30, 2009, 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.

We made no change in our internal control over financial
reporting during the fiscal quarter ended September 30, 2009 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.



28



---

##### Table of Contents

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, 2008, filed with the Securities and Exchange Commission on March 16, 2009, as updated in
our Quarterly Report on Form 10-Q for the first quarter of 2009 filed with the Securities and Exchange Commission on May 11, 2009.



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

None.



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

None.



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

None.



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

None.



29



---

##### Table of Contents

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



|       |  |                                                                                                                                                                                                                                                                                         
|------ |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1*+ |  | Amended and Restated Change of Control Agreement, dated August 24, 2009, by and between Fisher Communications, Inc. and Colleen B. Brown (incorporated by reference to
Exhibit 10.1 to Fisher Communications Current Report on Form 8-K filed on August 28, 2009 (File No. 000-22439)).
|       | 
|10.2*+ |  | Form of Change of Control Agreement by and between Fisher Communications, Inc. and Company Executives (incorporated by reference to
Exhibit 10.2 to the Companys Current Report on Form 8-K filed on August 28, 2009 (File No. 000-22439)).                                            
|       | 
|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.                                                                                                                                                                                                                                  



|* | Incorporated by reference.
|- | --------------------------

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



30



---

##### Table of Contents

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: November 6, 2009 |  | /s/    JOSEPH L.
LOVEJOY                                                                                                                    
|                       |  | Joseph L. Lovejoy Senior Vice President and Chief Financial Officer (Signing on behalf of the registrant and as Principal Financial Officer)



31



---

##### Table of Contents

EXHIBIT INDEX



|            |  |                                                                                                                                                                                                                                                                                         
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                                                             
|            | 
|10.1*+      |  | Amended and Restated Change of Control Agreement, dated August 24, 2009, by and between Fisher Communications, Inc. and Colleen B. Brown (incorporated by reference to Exhibit
10.1 to Fisher Communications Current Report on Form 8-K filed on August 28, 2009 (File No. 000-22439)).
|            | 
|10.2*+      |  | Form of Change of Control Agreement by and between Fisher Communications, Inc. and Company Executives (incorporated by reference to
Exhibit 10.2 to the Companys Current Report on Form 8-K filed on August 28, 2009 (File No. 000-22439)).                                            
|            | 
|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.                                                                                                                                                                                                                                  



|* | Incorporated by reference.
|- | --------------------------

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



32