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SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

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FORM 10-Q

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

|For the quarterly period ended
September 30, 2002 |  | Commission file number:
0-25042
|------------------------------------------------- |  | -------------------------------

YOUNG BROADCASTING INC.(Exact name of registrant as specified in its charter)

Delaware(State or other jurisdiction of Incorporation or organization)

13-3339681(I.R.S. Employer Identification Number)


599 Lexington Avenue
New York, New York 10022(Address of principal executive offices)

Registrant's
telephone number, including area code:(212) 754-7070

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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 / /

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Number
of shares of Common Stock outstanding as of October 31, 2002: 17,497,178 shares of Class A Common Stock, and 2,226,266 shares of Class B Common Stock.

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YOUNG BROADCASTING INC.    FORM 10-Q    Table of Contents

|                                |         |                                                                                                        |                                                                                       | Page
|------------------------------- | ------- | ------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------- | ----
|Part I    Financial Information |         |                                                                                                       
|                                | Item 1. |                                                                                                        | Financial Statements (unaudited)                                                      |     
|                                |         | Consolidated Balance Sheets as of December 31, 2001 and September 30, 2002                             |                                                                                       | 2   
|                                |         | Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2001 and 2002  |                                                                                       | 3   
|                                |         | Consolidated Statements of Stockholders' Equity (Deficit) for the Nine Months Ended September 30, 2002 |                                                                                       | 4   
|                                |         | Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2001 and 2002            |                                                                                       | 5   
|                                |         | Notes to Consolidated Financial Statements                                                             |                                                                                       | 6   
|                                | Item 2. |                                                                                                        | Management's Discussion and Analysis of Financial Condition and Results of Operations |     
|                                | Item 3. |                                                                                                        | Quantitative and Qualitative Disclosure About Market Risk                             |     
|                                | Item 4. |                                                                                                        | Controls and Procedures                                                               |     
|Part II.                        |         |                                                                                                       
|                                | Item 1. |                                                                                                        | Legal Proceedings                                                                     |     
|                                | Item 6. |                                                                                                        | Exhibits and Reports on Form 8-K                                                      |     
|Signatures                      |         | 26                                                                                                    

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Part I Financial Information

Item 1.Financial Statements

Young Broadcasting Inc. and Subsidiaries    Consolidated Balance Sheets

|                                                                                                                        |                                                                                                                                                     | December 31,
2001 |               | September 30,
2002 |  
|----------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------- | ------------- | ------------------ | -
|
|Assets                                                                                                                  |                                                                                                                                                     |                   |               |                    |  
|Current assets:                                                                                                         |                                                                                                                                                     |                   |               |                    |  
|                                                                                                                        | Cash and cash equivalents                                                                                                                           |                   | $             | 1,936,794          |  
|                                                                                                                        | Trade accounts receivable, less allowance for doubtful accounts of $2,385,000 in 2001 and $2,357,000 in 2002                                        |                   |               | 78,230,696         |  
|                                                                                                                        | Escrow accountcurrent                                                                                                                              |                   |               | 21,418,943         |  
|                                                                                                                        | Current portion of program license rights                                                                                                           |                   |               | 11,835,068         |  
|                                                                                                                        | Prepaid expenses                                                                                                                                    |                   |               | 3,484,179          |  
|                                                                                                                        | Assets of station held for sale                                                                                                                     |                   |               | 332,173,627        |  
|                                                                                                                        |                                                                                                                                                     |                   |               |                    |  
|Total current assets                                                                                                    |                                                                                                                                                     |                   | 449,079,307   |                    |  
|Property and equipment, less accumulated depreciation and amortization of $145,651,872 in 2001 and $158,208,763 in 2002 |                                                                                                                                                     |                   | 88,446,779    |                    |  
|Program license rights, excluding current portion                                                                       |                                                                                                                                                     |                   | 3,193,823     |                    |  
|Escrow account                                                                                                          |                                                                                                                                                     |                   | 20,358,775    |                    |  
|Deposits and other assets                                                                                               |                                                                                                                                                     |                   | 16,545,585    |                    |  
|Deferred tax asset                                                                                                      |                                                                                                                                                     |                   |              |                    |  
|Goodwill                                                                                                                |                                                                                                                                                     |                   | 96,994,045    |                    |  
|Broadcast licenses                                                                                                      |                                                                                                                                                     |                   | 821,706,787   |                    |  
|Intangible assets with finite lives, less accumulated amortization                                                      |                                                                                                                                                     |                   | 25,192,886    |                    |  
|Deferred charges less accumulated amortization of $8,054,830 in 2001 and $3,609,634 in 2002                             |                                                                                                                                                     |                   | 21,497,029    |                    |  
|                                                                                                                        |                                                                                                                                                     |                   |               |                    |  
|Total Assets                                                                                                            |                                                                                                                                                     | $                 | 1,543,015,016 |                    | $
|                                                                                                                        |                                                                                                                                                     |                   |               |                    |  
|Liabilities and stockholders' equity                                                                                    |                                                                                                                                                     |                   |               |                    |  
|Current liabilities:                                                                                                    |                                                                                                                                                     |                   |               |                    |  
|                                                                                                                        | Trade accounts payable                                                                                                                              |                   | $             | 20,248,408         |  
|                                                                                                                        | Accrued expenses and other current liabilities                                                                                                      |                   |               | 39,703,727         |  
|                                                                                                                        | Current installments of program license liability                                                                                                   |                   |               | 9,437,789          |  
|                                                                                                                        | Current installments of long-term debt                                                                                                              |                   |               | 1,269,223          |  
|                                                                                                                        | Current installments of obligations under capital leases                                                                                            |                   |               | 594,793            |  
|                                                                                                                        | Liabilities of station held for sale                                                                                                                |                   |               | 20,336,395         |  
|                                                                                                                        |                                                                                                                                                     |                   |               |                    |  
|Total current liabilities                                                                                               |                                                                                                                                                     |                   | 91,590,335    |                    |  
|Program license liability, excluding current installments                                                               |                                                                                                                                                     |                   | 3,635,786     |                    |  
|Long-term debt, excluding current installments                                                                          |                                                                                                                                                     |                   | 144,383,881   |                    |  
|Senior Notes                                                                                                            |                                                                                                                                                     |                   | 250,000,000   |                    |  
|Senior Subordinated Notes                                                                                               |                                                                                                                                                     |                   | 825,000,000   |                    |  
|Deferred taxes and other liabilities                                                                                    |                                                                                                                                                     |                   | 91,575,455    |                    |  
|Obligations under capital leases, excluding current installments                                                        |                                                                                                                                                     |                   | 2,061,379     |                    |  
|                                                                                                                        |                                                                                                                                                     |                   |               |                    |  
|Total liabilities                                                                                                       |                                                                                                                                                     |                   | 1,408,246,836 |                    |  
|                                                                                                                        |                                                                                                                                                     |                   |               |                    |  
|Stockholders' equity:                                                                                                   |                                                                                                                                                     |                   |               |                    |  
|                                                                                                                        | Class A Common Stock, $.001 par value. Authorized 40,000,000 shares; issued and outstanding 17,369,573 shares at 2001 and 17,461,242 shares at 2002 |                   |               | 17,369             |  
|                                                                                                                        | Class B Common Stock, $.001 par value. Authorized 20,000,000 shares; issued and outstanding 2,264,716 shares at 2001 and 2,226,266 at 2002          |                   |               | 2,265              |  
|                                                                                                                        | Additional paid-in capital                                                                                                                          |                   |               | 374,892,759        |  
|                                                                                                                        | Accumulated other comprehensive loss                                                                                                                |                   |               | (10,304,903        | )
|                                                                                                                        | Accumulated deficit                                                                                                                                 |                   |               | (229,839,310       | )
|                                                                                                                        |                                                                                                                                                     |                   |               |                    |  
|Total stockholders' equity                                                                                              |                                                                                                                                                     |                   | 134,768,180   |                    |  
|                                                                                                                        |                                                                                                                                                     |                   |               |                    |  
|Total liabilities and stockholders' equity                                                                              |                                                                                                                                                     | $                 | 1,543,015,016 |                    | $
|                                                                                                                        |                                                                                                                                                     |                   |               |                    |  

See accompanying notes to consolidated financial statements.

2

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Young Broadcasting Inc. and Subsidiaries    Consolidated Statements of Operations    (Unaudited)

|                                                                                                            |                                                                                        | Three Months Ended
September 30, |             | Nine Months Ended
September 30, |  
|----------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------- | -------------------------------- | ----------- | ------------------------------- | -
|
|Net operating revenue                                                                                       |                                                                                        | $                                | 57,840,417  |                                 | $
|                                                                                                            |                                                                                        |                                  |             |                                 |  
|Operating expenses                                                                                          |                                                                                        |                                  | 18,780,656  |                                 |  
|Amortization of program license rights                                                                      |                                                                                        |                                  | 4,484,697   |                                 |  
|Selling, general and administrative expenses                                                                |                                                                                        |                                  | 13,232,989  |                                 |  
|Depreciation and amortization                                                                               |                                                                                        |                                  | 12,017,225  |                                 |  
|Corporate overhead                                                                                          |                                                                                        |                                  | 2,422,954   |                                 |  
|Non-cash compensation                                                                                       |                                                                                        |                                  | 346,300     |                                 |  
|                                                                                                            |                                                                                        |                                  |             |                                 |  
|Operating income                                                                                            |                                                                                        |                                  | 6,555,596   |                                 |  
|                                                                                                            |                                                                                        |                                  |             |                                 |  
|Interest (expense), net                                                                                     |                                                                                        |                                  | (26,125,748 | )                               |  
|Non-cash change on market valuation of swaps                                                                |                                                                                        |                                  | 4,344,881   |                                 |  
|Loss on extinguishment of debt                                                                              |                                                                                        |                                  |            |                                 |  
|Other income (expense), net                                                                                 |                                                                                        |                                  | 42,196      |                                 |  
|                                                                                                            |                                                                                        |                                  |             |                                 |  
|                                                                                                            |                                                                                        |                                  | (21,738,671 | )                               |  
|                                                                                                            |                                                                                        |                                  |             |                                 |  
|(Loss) from continuing operations before benefit from income tax and cumulative effect of accounting change |                                                                                        |                                  | (15,183,075 | )                               |  
|(Expense) benefit from income tax                                                                           |                                                                                        |                                  |            |                                 |  
|                                                                                                            |                                                                                        |                                  |             |                                 |  
|(Loss) income from continuing operations before cumulative effect of accounting change                      |                                                                                        |                                  | (15,183,075 | )                               |  
|Discontinued operations:                                                                                    |                                                                                        |                                  |             |                                 |  
|                                                                                                            | Income from discontinued operations, net of applicable taxes                           |                                  |             | 1,747,963                       |  
|                                                                                                            | Gain on sale of station, net of applicable taxes                                       |                                  |             |                                |  
|                                                                                                            |                                                                                        |                                  |             |                                 |  
|                                                                                                            | (Loss) income before cumulative effect of accounting change                            |                                  |             | (13,435,112                     | )
|                                                                                                            | Cumulative effect of accounting change, net of applicable taxes                        |                                  |             |                                |  
|                                                                                                            |                                                                                        |                                  |             |                                 |  
|                                                                                                            | Net loss                                                                               |                                  | $           | (13,435,112                     | )
|                                                                                                            |                                                                                        |                                  |             |                                 |  
|Basic net (loss) income per common share:                                                                   |                                                                                        |                                  |             |                                 |  
|                                                                                                            | (Loss) income from continuing operations before cumulative effect of accounting change |                                  | $           | (0.77                           | )
|                                                                                                            | Income from discontinued operations, net                                               |                                  |             | 0.09                            |  
|                                                                                                            | Gain on sale of station, net                                                           |                                  |             |                                |  
|                                                                                                            | Cumulative effect of accounting change, net                                            |                                  |             |                                |  
|                                                                                                            |                                                                                        |                                  |             |                                 |  
|                                                                                                            | Net loss per common share-basic                                                        |                                  | $           | (0.68                           | )
|                                                                                                            |                                                                                        |                                  |             |                                 |  
|Diluted net (loss) income per common share:                                                                 |                                                                                        |                                  |             |                                 |  
|                                                                                                            | (Loss) income from continuing operations before cumulative effect of accounting change |                                  | $           | (0.77                           | )
|                                                                                                            | Income from discontinued operations, net                                               |                                  |             | 0.09                            |  
|                                                                                                            | Gain on sale of station, net                                                           |                                  |             |                                |  
|                                                                                                            | Cumulative effect of accounting change, net                                            |                                  |             |                                |  
|                                                                                                            |                                                                                        |                                  |             |                                 |  
|                                                                                                            | Net loss per common share-diluted                                                      |                                  | $           | (0.68                           | )
|                                                                                                            |                                                                                        |                                  |             |                                 |  
|Weighted average sharesBasic                                                                               |                                                                                        |                                  | 19,606,217  |                                 |  
|                                                                                                            |                                                                                        |                                  |             |                                 |  
|Weighted average sharesDiluted                                                                             |                                                                                        |                                  | 19,606,217  |                                 |  
|                                                                                                            |                                                                                        |                                  |             |                                 |  

See accompanying notes to consolidated financial statements.

3

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Young Broadcasting Inc. and Subsidiaries    Consolidated Statement of Stockholders' Equity    (Unaudited)

|                              |                                                                 | Common Stock |        |    |   |       |     |   |             |         |   |              |            
|----------------------------- | --------------------------------------------------------------- | ------------ | ------ | -- | - | ----- | --- | - | ----------- | ------- | - | ------------ | -----------
|
|
|Balance at December 31, 2001  |                                                                 | $            | 17,369 |    | $ | 2,265 |     | $ | 374,892,759 |         | $ | (229,839,310 | )          
|                              | Contribution of shares into Company's defined contribution plan |              |        | 48 |   |       |     |   |             | 935,109 |   |              |            
|                              | Conversion of Class B Common Stock to Class A Common Stock      |              |        | 39 |   |       | (39 | ) |             |         |   |              |            
|                              | Exercise of stock options                                       |              |        |    |   |       |     |   |             | 3,770   |   |              |            
|                              | Employee stock purchase plan                                    |              |        | 6  |   |       |     |   |             | 142,101 |   |              |            
|                              | Net loss for the nine months ended September 30, 2002           |              |        |    |   |       |     |   |             |         |   |              | (65,677,841
|Comprehensive Loss            |                                                                 |              |        |    |   |       |     |   |             |         |   |              |            
|                              | Amount of reclassification to earnings                          |              |        |    |   |       |     |   |             |         |   |              |            
|                              |                                                                 |              |        |    |   |       |     |   |             |         |   |              |            
|                              |                                                                 | Total        |        |    |   |       |     |   |             |         |   |              |            
|                              |                                                                 |              |        |    |   |       |     |   |             |         |   |              |            
|Balance at
September 30, 2002 |                                                                 | $            | 17,462 |    | $ | 2,226 |     |   | 375,973,739 |         | $ | (295,517,151 | )          
|                              |                                                                 |              |        |    |   |       |     |   |             |         |   |              |            

See accompanying notes to consolidated financial statements

4

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Young Broadcasting Inc. and Subsidiaries    Consolidated Statements of Cash Flows    (Unaudited)

|                                                                                        |                                                                               | Nine Months Ended
September 30, |             
|--------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------- | ------------------------------- | ------------
|
|Operating activities                                                                    |                                                                               |                                 |             
|Net loss                                                                                |                                                                               | $                               | (49,434,585 
|Adjustments to reconcile net loss to net cash provided by used in operating activities: |                                                                               |                                 |             
|                                                                                        | Cumulative effect of change in accounting, net of taxes                       |                                 |             
|                                                                                        | Gain on sale of KCAL-TV, net of taxes                                         |                                 |             
|                                                                                        | Provision for deferred tax benefit                                            |                                 |             
|                                                                                        | Depreciation and amortization of property and equipment                       |                                 |             
|                                                                                        | Amortization of program license rights                                        |                                 |             
|                                                                                        | Amortization of broadcasting licenses, other intangibles and deferred charges |                                 |             
|                                                                                        | Non-cash compensation                                                         |                                 |             
|                                                                                        | Non-cash interest expense                                                     |                                 |             
|                                                                                        | Non-cash change on market valuation of swap                                   |                                 |             
|                                                                                        | Loss on extinguishment of debt                                                |                                 |             
|                                                                                        | Loss on sale of fixed assets                                                  |                                 |             
|                                                                                        | Income from escrow deposits                                                   |                                 |             
|                                                                                        | Interest payments from escrow account                                         |                                 |             
|                                                                                        | Income tax payments                                                           |                                 |             
|                                                                                        | Payments on programming license liabilities                                   |                                 |             
|                                                                                        | Decrease in trade accounts receivable                                         |                                 |             
|                                                                                        | Increase in prepaid expenses                                                  |                                 |             
|                                                                                        | (Decrease) increase in trade accounts payable                                 |                                 |             
|                                                                                        | Decrease in accrued expenses and other liabilities                            |                                 |             
|                                                                                        |                                                                               |                                 |             
|Net cash provided by (used in) operating activities                                     |                                                                               |                                 | 11,139,631  
|                                                                                        |                                                                               |                                 |             
|Investing activities                                                                    |                                                                               |                                 |             
|Net proceeds from sale of KCAL-TV                                                       |                                                                               |                                 |            
|Capital expenditures                                                                    |                                                                               |                                 | (3,962,322  
|Increase in deposits and other assets                                                   |                                                                               |                                 | (7,643,941  
|                                                                                        |                                                                               |                                 |             
|Net cash (used in) provided by investing activities                                     |                                                                               |                                 | (11,606,263 
|                                                                                        |                                                                               |                                 |             
|Financing activities                                                                    |                                                                               |                                 |             
|Proceeds from issuance of subordinated debt                                             |                                                                               |                                 | 508,411,991 
|Proceeds from issuance of common stock                                                  |                                                                               |                                 | 103,500,000 
|Principal payments on long-term debt                                                    |                                                                               |                                 | (405,746,158
|Borrowings from working capital facility                                                |                                                                               |                                 | 51,175,000  
|Redemption of senior notes                                                              |                                                                               |                                 |            
|Redemption of subordinated debt                                                         |                                                                               |                                 | (254,445,131
|Deferred acquisition and debt financing costs incurred                                  |                                                                               |                                 | (4,951,464  
|Proceeds from exercise of Common Stock options                                          |                                                                               |                                 | 572,445     
|Principal payments under capital lease obligations                                      |                                                                               |                                 | (924,115    
|                                                                                        |                                                                               |                                 |             
|Net cash used in financing activities                                                   |                                                                               |                                 | (2,407,432  
|                                                                                        |                                                                               |                                 |             
|Net (decrease) increase in cash                                                         |                                                                               |                                 | (2,874,064  
|Cash and cash equivalents at beginning of year                                          |                                                                               |                                 | 5,576,009   
|                                                                                        |                                                                               |                                 |             
|Cash and cash equivalents at September 30                                               |                                                                               | $                               | 2,701,945   
|                                                                                        |                                                                               |                                 |             
|Supplemental disclosure of cash flow information                                        |                                                                               |                                 |             
|Interest paid                                                                           |                                                                               | $                               | 100,883,574 
|                                                                                        |                                                                               |                                 |             
|Income taxes paid                                                                       |                                                                               | $                               |            
|                                                                                        |                                                                               |                                 |             

See accompanying notes to consolidated financial statements.

5

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Young Broadcasting Inc. and Subsidiaries    Notes to Consolidated Financial Statements    (Unaudited)

1. Principles of Consolidation

The accompanying consolidated financial statements include those of Young Broadcasting Inc. and subsidiaries (the "Company"), consisting of ten network
affiliated television broadcasting stations (three with CBS, six with ABC, and one with NBC) and one independent commercial television broadcasting station, in the states of Michigan, Wisconsin,
Louisiana, Illinois, Tennessee, New York, Virginia, Iowa, South Dakota and California. In addition, the accompanying consolidated financial statements include the Company's wholly-owned national
television sales representation firm. Significant intercompany transactions and accounts have been eliminated. The accompanying condensed consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States for interim financial statements and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. The interim financial statements are unaudited but include all adjustments, which are of a normal recurring nature, that the Company considers necessary for a fair
presentation of the consolidated financial position and the consolidated results of operations and cash flows for such period. Operating results of interim periods are not necessarily indicative of
results for a full year.

2. Recently Issued Accounting Standards

In June 2002, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 146, Accounting for Costs
Associated with Exit of Disposal Activities("Statement 146"), effective for exit or disposal activities that are initiated after
December 31, 2002. The Company's adoption of this new standard is not expected to have a material impact on the results of operating and financial position.

In
April 2002, the FASB issued Statements of Financial Accounting Standards No. 145,Rescission of FASB Statements No. 4, 44, and 62,
Amendment of FASB Statement No. 13, and Technical Corrections("Statement 145"), effective for fiscal years beginning after May 15, 2002. For most companies,
Statement 145 will require gains and losses on extinguishments of debt to be classified as income or loss from continuing operations rather than as extraordinary items as previously required under
Statement 4.

The
Company elected, in the second quarter of 2002, early application of the provisions of Statement 145. Accordingly, the Company reclassified to its loss from continuing operations in
2001 $12.4 million it had recorded in 2001 as an extraordinary loss on extinguishment of debt. The Company recorded a loss on the extinguishment of debt in the second quarter of 2002 of
approximately $4.7 million relating to its deferred financing costs under its senior credit facilities and their repayment using the net proceeds of the sale of KCAL-TV. In
addition, the Company recorded a loss on the extinguishment of debt in the third quarter of 2002 of approximately $4.7 million relating to the deferred financing costs under its senior notes
and senior subordinated notes and their partial purchase using a portion of the net proceeds of the sale of KCAL-TV (see Notes 3 and 5).

In
June 2001, the FASB issued Statement of Financial Accounting Standards No. 142,Goodwill and Other Intangible Assets("Statement 142"). The Company applied the new rules on accounting for goodwill and other intangible assets on January 1, 2002. Application of the non-amortization provisions of
this new standard resulted in a decrease in amortization expense of approximately $5.8 million and $20.4 million for the three and nine months ended September 30, 2002. In
May 2002, the Company completed its review for impairment of goodwill and certain other intangibles upon the adoption of the new standard in January 2002, recognized an impairment loss
of $268.7 million and recorded it as a

6

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cumulative effect of an accounting change, net of tax benefits of approximately $39.5 million. The deferred tax benefit was recorded in the second quarter of 2002, when it became realizable.
The asset that was determined to be impaired was the broadcast license at KRON-TV in San Francisco, California. The Company engaged the services of a consulting firm that specializes in
valuations, asset appraisals and related financial services for the communications industry to perform the analysis for impairment. This consulting firm used a discounted cash flow approach,
consisting of a study of variables, such as revenue projections, projected operating profit margins, and discount rates, to determine the fair value of the station. The Company will perform its 2002
annual impairment test in the fourth quarter of 2002. Based on the lower than expected revenues at KRON-TV in connection with the weak advertising conditions in the San Francisco market
during the first half of the year and the loss of the NBC affiliation of KRON-TV on January 1, 2002, management believes that it is possible that an additional impairment of
KRON-TV's broadcast license may be determined. If an impairment loss is required, it will be recorded as a charge to continuing operations. At this time, management is unable to reasonably
estimate the amount of such an impairment.

The
following table sets forth the additional disclosures related to goodwill and intangible assets required under Statement 142:

|                               |                    | As of September 30, 2002 |   | As of December 31, 2001 | 
|------------------------------ | ------------------ | ------------------------ | - | ----------------------- | 
|
|
|Amortized intangible assets:   |                    |                          |   |                         | 
|                               | Intangible assets  |                          | $ | 28,899                  | 
|Unamortized intangible assets: |                    |                          |   |                         | 
|                               | Broadcast licenses |                          | $ | 512,427                 | 

Aggregate
Amortization Expense (excluding KCAL-TV for all periods presented), (dollars in thousands):

For three months ended 9/30/02

$
1,325For three months ended 9/30/01

$
7,396For nine months ended 9/30/02

$
4,621For nine months ended 9/30/01

$
21,525


Estimated
Amortization Expense (dollars in thousands):

For year ended 12/31/02

$
6,089For year ended 12/31/03

$
5,314For year ended 12/31/04

$
5,259For year ended 12/31/05

$
5,183For year ended 12/31/06

$
4,787


7

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The
change in the carrying amount of goodwill for the nine months ended September 30, 2002 is as follows (dollars in thousands):

Balance as of January 1, 2002

$
96,994Goodwill reduction related to sale of KCAL-TV


(71,450
)Balance as of September 30, 2002

$
25,544


|                                             |  | Three Months Ended
September 30, 2001 |         | Nine Months Ended
September 30, 2001 |  
|-------------------------------------------- |  | ------------------------------------- | ------- | ------------------------------------ | -
|
|
|Reported                                     |  | $                                     | (13,435 | )                                    | $
|Add back: Goodwill amortization              |  |                                       | 1,571   |                                      |  
|Add back: Broadcast licenses amortization    |  |                                       | 6,191   |                                      |  
|                                             |  |                                       |         |                                      |  
|Adjusted                                     |  | $                                     | (5,673  | )                                    | $
|                                             |  |                                       |         |                                      |  
|Basic and diluted earnings-per common share: |  |                                       |         |                                      |  
|Reported                                     |  | $                                     | (0.69   | )                                    | $
|Goodwill amortization                        |  |                                       | 0.08    |                                      |  
|Broadcast licenses amortization              |  |                                       | 0.32    |                                      |  
|                                             |  |                                       |         |                                      |  
|Adjusted                                     |  | $                                     | (0.29   | )                                    | $
|                                             |  |                                       |         |                                      |  

3. Sale of KCAL-TV

On May 15, 2002, the Company completed the sale of KCAL-TV in Los Angeles, California to Viacom Inc. in an all cash transaction for
$650.0 million, less purchase price adjustments. The operating results of KCAL-TV are not included in the Company's consolidated results from continuing operations for the three and
nine months ended September 30, 2001 and 2002. The Company recorded a gain on the sale of $139.6 million, net of a provision for income taxes of $147.9 million. As a result of
this income, the Company was able to realize a tax benefit from the utilization of the loss from operations for the nine months ended September 30, 2002, tax loss carryforwards, and the
cumulative effect of an accounting change (See Note 2). The net tax payable on the gain and discontinued operations related to KCAL-TV is projected to be approximately
$36.5 million. In addition, the Company has recorded a
deferred tax asset of $14.0 million related to existing temporary differences that are expected to generate future tax losses that can be carried back to recover a portion of the tax paid for
2002.

The
Company applied FASB Statement of Financial Accounting Standards No. 144,Accounting for the Impairment of Long-Lived Assets to be Disposed
of("Statement 144"), and the new rules on accounting for the discontinuation of a component of an entity on January 1, 2002. As a result of applying Statement 144, the
Company recorded income from its discontinued operations of $1.7 million and $2.3 million for the three and nine months ended September 30, 2001, respectively, and income from its
discontinued operations of $353,000 and $3.6 million for the three and nine months ended September 30, 2002, respectively. In addition, the Company classified assets held for sale at
December 31, 2001 of $332.2 million, and liabilities held for sale at December 31, 2001 of $20.3 million (see below).

8

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The
detail of classifications on the balance sheets as "held for sale" is as follows:

December 31, 2001(dollars in thousands)Assets:Prepaid expenses

$
5,994Property and equipment, net


17,952Broadcast licenses and other intangibles, net


274,899Program license rights


21,507Deposits


11,821Assets held for sale

$
332,173Liabilities:Program license liabilities

$
18,297Obligations under capital leases


2,039Liabilities held for sale

$
20,336


$225.3 million
of the net proceeds from the sale of KCAL-TV were used at closing to repay all of the Company's indebtedness then outstanding under its senior credit
facilities. The remaining net proceeds, after closing costs and tax provisions, of $350.0 million were used to repay a portion of the outstanding indebtedness under the Company's senior notes
and senior subordinated notes pursuant to the par offers (see Note 5).

4. Income Taxes

The Company recorded a gain from the sale of KCAL-TV for the nine months ended September 30, 2002 of $139.6 million, net of a provision
for income taxes of $147.9 million. As a result of this income, the Company was able to realize a tax benefit from the utilization of the loss from operations for the nine months ended
September 30, 2002, tax loss carryforwards, and the cumulative effect of an accounting change (See Note 2). The net tax payable on the gain and discontinued operations related to
KCAL-TV is projected to be approximately $36.5 million. In addition, the Company has recorded a deferred tax asset of $14.0 million related to existing temporary differences
that are expected to generate future tax losses that can be carried back to recover a portion of the tax paid for 2002.

The
total tax provision/(benefit) recorded for the nine months ended September 30, 2002 is as follows:

|         |  | Federal |             | State |   | Total      |  
|-------- |  | ------- | ----------- | ----- | - | ---------- | -
|Current  |  | $       | 21,332,396  |       | $ | 15,176,786 |  
|Deferred |  |         | (39,402,144 | )     |   | (6,048,130 | )
|         |  |         |             |       |   |            |  
|Total    |  | $       | (18,069,748 | )     | $ | 9,128,657  |  
|         |  |         |             |       |   |            |  

9

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The
provision/(benefit) is allocated on the income statement as follows:

|Benefit from Income Tax on Continuing Operations    |                                      | $ | (119,319,358 | )          
|--------------------------------------------------- | ------------------------------------ | - | ------------ | -----------
|Discontinued Operations:                            |                                      |   |              |            
|                                                    | Expense from Discontinued Operations |   |              | 1,959,631  
|                                                    | Expense from Gain on Sale of KCAL    |   |              | 147,878,805
|Benefit from Cumulative Effect of Accounting Change |                                      |   | (39,460,170  | )          
|                                                    |                                      |   |             
|Total                                               |                                      | $ | (8,941,092   | )          
|                                                    |                                      |   |             

On
December 31, 2001, the Company had Net Operating Loss ("NOL") carryforwards for tax purposes of approximately $320 million, some of which are subject to
an annual limitation imposed by IRC Section 382. It is estimated that approximately $270 million of these NOL carryforwards will be utilized in 2002.

Significant
components of the Company's deferred tax assets/(liabilities) as of December 31, 2001 and September 30, 2002 are as follows:

|                                  |                                        | 12/31/2001 |   | 9/30/2002   |            
|--------------------------------- | -------------------------------------- | ---------- | - | ----------- | -----------
|Deferred Tax Assets/(Liabilities) |                                        |            |   |             |            
|                                  | Intangibles                            |            | $ | (83,496,269 | )          
|                                  | Net Operating Loss Carryforwards       |            |   | 121,396,267 |            
|                                  | Stock Option Compensation Accrued      |            |   | 7,032,890   |            
|                                  | Accounts Receivable                    |            |   | 751,047     |            
|                                  | Hedging Gain/Loss                      |            |   | 4,121,961   |            
|                                  | Fixed Assets                           |            |   | 2,252,092   |            
|                                  | Other                                  |            |   | 577,424     |            
|                                  | Deferred Gain on Interest Rate Swaps   |            |   | (813,828    | )          
|                                  | Less: Valuation Allowance for Deferred |            |   |             |            
|                                  |                                        | Tax Assets |   |             | (83,271,857
|                                  |                                        |            |   |             |            
|                                  | Net Deferred Tax Asset/(Liability)     |            | $ | (31,450,273 | )          
|                                  |                                        |            |   |             |            

5.    Senior Notes and Senior Subordinated Notes

On August 12, 2002, the Company commenced offers to purchase for cash all of its 81/2% Senior Notes due 2008 (the "Senior Notes") and a
portion of its outstanding 9% Senior Subordinated Notes due 2006, 83/4% Senior Subordinated Notes due 2007, and 10% Senior Subordinated Notes due 2011 (collectively referred to as the
"Senior Subordinated Notes," and the Senior Notes and the Senior Subordinated Notes are collectively referred to as the "Notes"). These offers were made with the net proceeds from the sale of
KCAL-TV, in accordance with the terms of the indentures governing the Notes. The net proceeds of the KCAL-TV sale, pursuant to the terms of the indentures, were approximately
$350.0 million. The purchase price for the Notes in the offers was equal to $1,000 per
$1,000 principal amount of the notes tendered and accepted, plus accrued and unpaid interest through September 17, 2002 in the case of the Senior Notes and September 24, 2002 in the case
of the Senior Subordinated Notes. The offers expired in accordance with their terms on September 12, 2002.

On
September 18, 2002, pursuant to the terms of the Senior Note offer, the Company purchased $93.1 million aggregate principal amount of the Senior Notes (constituting all
of the Senior Notes validly tendered and not withdrawn in the offer) and paid accrued interest of approximately $2.0 million thereon. On October 17, 2002, as a result of the purchase of
Senior Notes and in accordance with the escrow agreement relating to the Senior Notes, approximately $11.8 million was released from the escrow account and is available to the Company for
general corporate purposes.

10

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On
September 25, 2002, pursuant to the terms of the Senior Subordinated Note offer, the Company purchased $38.9 million aggregate principal amount of its 9% Senior
Subordinated Notes, $62.3 million aggregate principal amount of its 83/4% Senior Subordinated Notes and $155.7 million aggregate principal amount of its 10% Senior
Subordinated Notes and paid accrued interest of approximately $681,100, $1.5 million and $1.0 million, respectively, thereon. The principal amount of the Senior Subordinated Notes paid
was determined based on the pro-ration provisions of the indentures governing the Senior Subordinated Notes.

Debt
amounts outstanding at December 31, 2001 and September 30, 2002 were as follows (dollars in thousands):

|                                         |                                       | 12/31/01 |         | 9/30/02  
|---------------------------------------- | ------------------------------------- | -------- | ------- | ---------
|Senior Credit Facility                   |                                       | $        | 145,653 |          
|81/2% Senior Notes due 2008              |                                       |          | 250,000 |          
|9% Senior Subordinated Notes due 2006    |                                       |          | 125,000 |          
|83/4% Senior Subordinated Notes due 2007 |                                       |          | 200,000 |          
|10% Senior Subordinated Notes due 2011   |                                       |          | 500,000 |          
|                                         |                                       |          |         |          
|                                         | Total Debt (excluding capital leases) |          | $       | 1,220,653
|                                         |                                       |          |         |          

11

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Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations.

FORWARD-LOOKING STATEMENTS

FORWARD LOOKING STATEMENTS ARE ALL STATEMENTS, OTHER THAN STATEMENTS OF HISTORICAL FACTS, INCLUDED IN THIS REPORT. THE FORWARD LOOKING
STATEMENTS CONTAINED IN THIS REPORT CONCERN, AMONG OTHER THINGS, CERTAIN STATEMENTS UNDER "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS." FORWARD LOOKING
STATEMENTS INVOLVE RISKS AND UNCERTAINTIES, AND ARE SUBJECT TO CHANGE BASED ON VARIOUS IMPORTANT FACTORS, INCLUDING THE IMPACT OF CHANGES IN NATIONAL AND REGIONAL ECONOMIES, PRICING FLUCTUATIONS IN
LOCAL AND NATIONAL ADVERTISING AND VOLATILITY IN PROGRAMMING COSTS.

Introduction

The operating revenue of the Company's stations is derived primarily from advertising revenue and, to a much lesser extent, from compensation paid by the networks
to the stations for broadcasting network programming. The stations' primary operating expenses are for employee compensation, news gathering, production, programming and promotion costs. A high
proportion of the operating expenses of the stations are fixed.

Advertising
is sold for placement within and adjoining a station's network and locally originated programming. Advertising is sold in time increments and is priced primarily on the basis
of a program's popularity among the specific audience an advertiser desires to reach, as measured principally by periodic audience surveys. In addition, advertising rates are affected by the number of
advertisers competing for the available time, the size and demographic makeup of the market served by the station and the availability of alternative advertising media in the market area. Rates are
highest during the most desirable viewing hours, with corresponding reductions during other hours. The ratings of a local station affiliated with a national television network can be affected by
ratings of network programming.

Most
advertising contracts are short-term, and generally run only for a few weeks. Most of the Company's annual gross revenue is generated from local advertising, which is
sold by a station's sales staff directly to local accounts. The remainder of the advertising revenue primarily represents national advertising, which is sold by Adam Young Inc. ("AYI"), a
wholly-owned national advertising sales representative. The stations generally pay commissions to advertising agencies on local, regional and national advertising.

The
advertising revenue of the Company's 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 even numbered election years due to spending by political
candidates, which spending typically is heaviest during the fourth quarter.

The
Company defines "broadcast cash flow" as operating income plus depreciation and amortization (including amortization of program license rights), non-cash compensation,
and corporate overhead, less payments for program license liabilities. Other television broadcasting companies may measure broadcast cash flow in a different manner. The Company has included broadcast
cash flow data because such data is commonly used as a measure of performance for broadcast companies and is also used to measure a company's ability to service debt. Broadcast cash flow is not, and
should not be used as, an indicator or alternative to operating income, net income or cash flow as reflected in the Consolidated Financial Statements, is not intended to represent funds available for
debt service, dividends, reinvestment or other discretionary uses, is not a measure of financial performance under

12

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generally accepted accounting principles and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with generally accepted accounting principles.

The
following table sets forth certain operating data for the three and nine months ended September 30, 2001 and 2002:

|                 |                                          | Three Months Ended
September 30, |       | Nine Months Ended
September 30, |  
|---------------- | ---------------------------------------- | -------------------------------- | ----- | ------------------------------- | -
|
|
|Operating income |                                          | $                                | 6,556 |                                 | $
|Add:             |                                          |                                  |       |                                 |  
|                 | Amortization of program license rights   |                                  |       | 4,485                           |  
|                 | Depreciation and amortization            |                                  |       | 12,018                          |  
|                 | Corporate overhead                       |                                  |       | 2,423                           |  
|                 | Non-cash compensation                    |                                  |       | 346                             |  
|Less:            |                                          |                                  |       |                                 |  
|                 | Payments for program license liabilities |                                  |       | (4,479                          | )
|                 |                                          |                                  |       |                                 |  
|                 | Broadcast cash flow                      |                                  | $     | 21,349                          |  
|                 |                                          |                                  |       |                                 |  

Recent Developments

Digital Upgrades.The Company is in the process of upgrading its television stations to enable them to broadcast with digital
technology. As of November 1, 2002, all of the company's television stations were capable of digital television broadcasts except for WTEN-TV (Albany), KWQC-TV
(Davenport), KELO-TV (Sioux Falls) and KELO-TV's three satellite transmitters (KPLO-TV, KDLO-TV, KCLO-TV). All of these stations are in the
process of completing their installation and should be on the air with digital transmissions before May 1, 2003. Applications, as required, have been filed with the Federal Communications
Commissions requesting additional time to complete this work.

KCAL Sale.On May 15, 2002, the Company completed the sale of KCAL-TV in Los Angeles, California to
Viacom Inc. in an all cash transaction for $650.0 million, less purchase price adjustments. The operating results of KCAL-TV are not included in the Company's consolidated
results from continuing operations for the three and nine months ended September 30, 2001 and 2002. The Company recorded a gain on the sale of $139.6 million, net of a provision for
income taxes of $147.9 million. As a result of this income, the Company was able to realize a tax benefit from the utilization of the loss from operations for the nine months ended
September 30, 2002, tax loss carryforwards, and the cumulative effect of an accounting change. The net tax payable on the gain and discontinued operations related to KCAL-TV is
projected to be approximately $36.5 million. In addition, the Company has recorded a deferred tax asset of $14.0 million related to existing temporary differences that are expected to
generate future tax losses that can be carried back to recover a portion of the tax paid for 2002.

$225.3 million
of the net proceeds from the sale of KCAL-TV were used at closing to repay all of the Company's indebtedness outstanding under its senior credit
facilities. The remaining net proceeds, after closing costs and tax provisions, of $350.0 million were used to repay a portion of the outstanding indebtedness under the Company's senior notes
and senior subordinated notes pursuant to the par offers.

Par Offers.On August 12, 2002, the Company commenced offers to purchase for cash all of its 81/2%
Senior Notes due 2008 (the "Senior Notes") and a portion of its outstanding 9% Senior Subordinated Notes due 2006, 83/4% Senior Subordinated Notes due 2007, and 10% Senior Subordinated
Notes due 2011 (collectively referred to as the "Senior Subordinated Notes," and the

13

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Senior Notes and the Senior Subordinated Notes are collectively referred to as the "Notes"). These offers were made with the net proceeds from the sale of KCAL-TV, in accordance with the
terms of the indentures governing the Notes. The net proceeds of the KCAL-TV sale, pursuant to the terms of the indentures, were approximately $350.0 million. The purchase price for
the Notes in the offers was equal to $1,000 per $1,000 principal amount of the notes tendered and accepted, plus accrued and unpaid interest through September 17, 2002 in the case of the Senior
Notes and September 24, 2002 in the case of the Senior Subordinated Notes. The offers expired in accordance with their terms on September 12, 2002.

On
September 18, 2002, pursuant to the terms of the Senior Note offer, the Company purchased $93.1 million aggregate principal amount of the Senior Notes (constituting all
of the Senior Notes validly tendered and not withdrawn in the offer) and paid accrued interest of approximately $2.0 million thereon. On October 17, 2002, as a result of the purchase of
Senior Notes and in accordance with the escrow agreement relating to the Senior Notes, approximately $11.8 million was released from the escrow account and is available to the Company for
general corporate purposes.

On
September 25, 2002, pursuant to the terms of the Senior Subordinated Note offer, the Company purchased $38.9 million aggregate principal amount of its 9% Senior
Subordinated Notes, $62.3 million aggregate principal amount of its 83/4% Senior Subordinated Notes and $155.7 million aggregate principal amount of its 10% Senior
Subordinated Notes and paid accrued interest of approximately $681,100, $1.5 million and $1.0 million, respectively, thereon. The principal amount of the Senior Subordinated Notes paid
was determined based on the pro-ration provisions of the indentures governing the Senior Subordinated Notes.

Critical Accounting Policies

The Company's critical accounting for the impairment of property, equipment and intangible assets is assessing the recoverability by making assumptions regarding
estimated future cash flows and other factors to determine the fair value of the respective assets. If these estimates or related assumptions materially change in the future, the Company may be
required to record impairment charges not previously recorded for these assets. At September 30, 2002, the Company had $82.7 million in net property and equipment, $25.5 million
of goodwill, $512.4 million of broadcast licenses and $23.8 million of other amortizable intangibles. During 2001, the Company did not record any impairment losses related to property
and equipment or broadcast licenses and other intangibles. In May 2002, the Company completed its review for impairment of goodwill and certain other intangibles upon the adoption of the new
accounting standard in January 2002, recognized an impairment loss of $268.7 million and recorded it as a cumulative effect of an accounting change, net of tax benefits of approximately
$39.5 million. See notes 2 and 3 to the Company's consolidated financial statements. The Company will perform its 2002 annual impairment test in the fourth quarter of 2002. Based on the lower
than expected revenues at KRON-TV in connection with the weak advertising conditions in the San Francisco market during the first half of the year and the loss of the NBC affiliation at
KRON-TV on January 1, 2002, management believes that it is possible that an additional impairment of KRON-TV's broadcast license may be determined. If an impairment loss
is required, it will be recorded as a charge to continuing operations. At this time, management is unable to reasonably estimate the amount of such an impairment.

14

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Television Revenues

Set forth below are the principal types of television revenues received by the Company's stations for the periods indicated and the percentage contribution of
each to the Company's total revenue, as well as agency and national sales representative commissions:

|            |                  | Three Months Ended
September 30, |        | Nine Months Ended
September 30, |       
|----------- | ---------------- | -------------------------------- | ------ | ------------------------------- | ------
|
|
|
|Revenues    |                  |                                  |        |                                 |       
|            | Local            |                                  | $      | 35,611                          |       
|            | National         |                                  |        | 25,138                          |       
|            | Network          |                                  |        | 4,494                           |       
|            | Political        |                                  |        | 315                             |       
|            | Production/Other |                                  |        | 1,174                           |       
|            |                  |                                  |        |                                 |       
|            |                  | Total                            |        | $                               | 66,732
|Commissions |                  |                                  | (8,892 | )                               | (13.3 
|            |                  |                                  |        |                                 |       
|Net Revenue |                  | $                                | 57,840 |                                 | 86.7  
|            |                  |                                  |        |                                 |       

15

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Results of Operations

The results from continuing operations for the three and nine months ended September 30, 2002 and 2001 do not include the results of operations for
KCAL-TV. These results are reflected as discontinued operations.

Three Months Ended September 30, 2002 Compared to Three Months Ended September 30, 2001

Net revenue for the three months ended September 30, 2002 was $57.9 million, an increase of $40,000, or 0.1%, compared to $57.8 million for
the three months ended September 30, 2001. The loss of the NBC affiliation at KRON-TV on January 1, 2002 and the resulting impact on ratings negatively affected the revenues
at KRON-TV, accounting for approximately $10.3 million of decreased revenues, resulting in reductions in the Company's gross local and national revenues of 10.8% and 16.6%,
respectively. Included in the $10.3 million decrease from KRON-TV is a $1.9 million reduction in network compensation relating to KRON-TV's conversion to an
independent station. Political revenue for the Company for the three months ended September 30, 2002 was $8.9 million, an increase of $8.6 million from the three months ended
September 30, 2001. The increase in political revenue was attributable to the existence of strongly contested local races in Iowa and South Dakota in the third quarter of 2002, while the third
quarter of 2001 had fewer contested state and local elections.

Operating
expenses, including selling, general and administrative expenses, for the three months ended September 30, 2002 were $33.7 million, compared to
$32.0 million for the three months ended September 30, 2001, an increase of $1.7 million, or 5.3%. Substantially all of this increase is attributable to new barter programs being
aired in San Francisco because of KRON-TV's conversion to an independent station. Excluding increases related to new barter programs at KRON-TV, operating expenses for the
three months ended September 30, 2002 remain unchanged from the same period in 2001.

Amortization
of program license rights for the three months ended September 30, 2002 was $4.4 million, compared to $4.5 million for the three months ended
September 30, 2001, a decrease of $120,000, or 2.7%. The reduction was the result of several stations replacing expensive programming with less costly priced shows.

Depreciation
of property and equipment and amortization of intangible assets was $5.8 million for the three months ended September 30, 2002, compared to
$12.0 million for the three months ended September 30, 2001, a decrease of $6.2 million, or 51.7%. The decrease is primarily attributable to the Company's application of Statement
of Financial Accounting Standards No. 142,Goodwill and Other Intangible Assets, issued in June 2001 by the Financial Accounting Standards
Board. Under the new rules, effective for fiscal years beginning after December 15, 2001, goodwill and intangible assets deemed to have indefinite lives will no longer be amortized, but will be
subject to annual impairment tests in accordance with the Statement.

Corporate
overhead was $2.6 million for the three months ended September 30, 2002, compared to $2.4 million for the three months ended September 30, 2001, an
increase of $204,000, or 8.4%. The increase was the result of additional personnel costs, and professional costs in connection with amendments to senior credit facilities and tax planning advice.

Non-cash
compensation was $239,000 for the three months ended September 30, 2002, compared to $346,000 for the three months ended September 30, 2001, a decrease
of $107,000.

Interest
expense for the three months ended September 30, 2002 was $21.9 million, compared to $26.1 million for the three months ended September 30, 2001, a
decrease of $4.2 million, or 16.1%. The reduction was primarily the result of lower debt levels in 2002 as compared to 2001 and reductions in effective interest rates relating to the Company
borrowings under LIBOR and prime.

16

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The
Company recorded $4.6 million of non-cash interest income for the three months ended September 30, 2002, net of approximately $1.7 million of which
related to the amortization of other comprehensive loss in connection with its swap transactions entered into in 2000 and terminated in June 2001. The Company recorded a $6.3 million
mark-to-market change in fair value, recorded as income or gain, of its current outstanding hedges (see "Liquidity and Capital Resources").

The
Company recorded a loss on extinguishment of debt of $4.7 million in the third quarter of 2002 relating to the purchase of senior notes and senior subordinated notes pursuant
to the par offers (see "Liquidity and Capital Resources").

On
May 15, 2002, the Company completed the sale of KCAL-TV to Viacom Inc. for $650.0 million, less purchase price adjustments. In the second quarter of
2002, the Company recorded a gain on the sale of $139.6 million, net of a provision for income taxes of $147.9 million. In the third quarter of 2002, the Company adjusted the gain
calculation for post closing provisions amounting to an increase on the gain of approximately $1.6 million. As a result of this sale, the Company recorded income from discontinued
operations of $353,000 and $1.7 million for the three months ended September 2002 and 2001, respectively, net of applicable taxes.

As
a result of the factors discussed above, the net loss for the Company was $8.8 million for the three months ended September 30, 2002, compared with a net loss of
$13.4 million for the three months ended September 30, 2001.

Broadcast
cash flow for the three months ended September 30, 2002 was $19.8 million, compared with $21.3 million for the three months ended September 30,
2001, a decrease of $1.5 million, or 7.0%. Broadcast cash flow margins (broadcast cash flow divided by net revenue) for the three months ended September 30, 2002 decreased to 34.2% from
36.9% for the same period in 2001.

Nine Months Ended September 30, 2002 Compared to Nine Months Ended September 30, 2001

Net revenue for the nine months ended September 30, 2002 was $158.9 million, a decrease of $38.9 million, or 19.7%, compared to
$197.8 million for the nine months ended September 30, 2001. The decline of the general San Francisco advertising market during the first half of the year, the loss of the NBC
affiliation at KRON-TV on January 1, 2002 and the resulting impact on ratings negatively affected the revenues at KRON-TV, accounting for approximately
$49.8 million of this decrease, resulting in reductions in the Company's gross local and national revenues of 22.8% and 28.9%, respectively. Included in the $49.8 million decrease from
KRON-TV is a $5.9 million reduction in network compensation relating to KRON-TV's conversion to an independent station. Political revenue for the nine months ended
September 30, 2002 was $15.2 million, an increase of $14.0 million from the nine months ended September 30, 2001. The increase in political revenue was attributable to the
existence of strongly contested local races in Iowa, California and South Dakota in 2002, while 2001 had fewer contested state and local elections.

Operating
expenses, including selling, general and administrative expenses, for the nine months ended September 30, 2002 were $99.5 million, compared to
$95.7 million for the nine months ended September 30, 2001, an increase of $3.8 million, or 4.0%. All of this increase is attributable to new barter programs being aired in San
Francisco because of KRON-TV's conversion to an independent station. Excluding increases related to new barter programs at KRON-TV, operating expenses for the nine months ended
September 30, 2002 remain unchanged from the same period in 2001.

Amortization
of program license rights for the nine months ended September 30, 2002 was $12.8 million, compared to $13.4 million for the nine months ended
September 30, 2001, a decrease of $637,000, or 4.7%. The reduction was the result of several stations replacing expensive programming with less costly priced shows.

Depreciation
of property and equipment and amortization of intangible assets was $17.8 million for the nine months ended September 30, 2002, compared to
$35.3 million for the nine months ended

17

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September 30, 2001, a decrease of $17.5 million, or 49.6%. The decrease is primarily attributable to the Company's application of Statement of Financial Accounting Standards
No. 142,Goodwill and Other Intangible Assets, issued in June 2001 by the Financial Accounting Standards Board. Under the new rules,
effective for fiscal years beginning after December 15, 2001, goodwill and intangible assets deemed to have indefinite lives will no longer be amortized, but will be subject to annual
impairment tests in accordance with the Statement.

Corporate
overhead was $8.4 million for the nine months ended September 30, 2002, compared to $8.1 million for the nine months ended September 30, 2001, an
increase of $315,000, or 3.9%. The increase was the result of additional personnel fees, and professional costs in connection with amendments to senior credit facilities and tax planning advice.

Non-cash
compensation was $920,000 for the nine months ended September 30, 2002, compared to $1.2 million for the nine months ended September 30, 2001, a
decrease of $273,000.

Interest
expense for the nine months ended September 30, 2002 was $73.4 million, compared to $86.9 million for the nine months ended September 30, 2001, a
decrease of $13.5 million, or 15.5%. The reduction was primarily the result of lower debt levels in 2002 as compared to 2001 and reductions in effective interest rates relating to the Company
borrowings under LIBOR and prime.

The
Company recorded $4.3 million of non-cash interest income for the nine months ended September 30, 2002. The Company recorded $6.2 million of
non-cash interest expense relating to the amortization of other comprehensive loss in connection with its swap transactions entered into in 2000 and terminated in June 2001. The
Company recorded a $10.5 million mark-to-market change in fair value, recorded as income or gain, of its current outstanding hedges (see "Liquidity and Capital
Resources").

The
Company recorded a loss on extinguishment of debt of $9.4 million for the nine months ended September 30, 2002 relating to the permanent repayment in full of the term
loan facilities under the Company's senior credit facilities and the purchase of the senior notes and senior subordinated notes pursuant to the par offers (see "Liquidity and Capital Resources").

On
May 15, 2002, the Company completed the sale of KCAL-TV to Viacom Inc. for $650.0 million, less purchase price adjustments. The Company recorded a
gain on the sale of $139.6 million, net of a provision for income taxes of $149.7 million. As a result of this sale, the Company recorded income from discontinued operations of
$3.6 million and $2.3 million for the nine months ended September 30, 2002 and 2001, respectively, net of applicable taxes.

In
the second quarter of 2002, the Company recorded a cumulative effect of accounting change of $268.7 million, net of tax benefits of approximately $39.5 million, relating
to the adoption of the new accounting standard Statement No. 142. Under Statement No. 142, the Company will be subject to annual impairment tests and if the tests conclude that an
impairment has occurred, the Company will be required to take a charge to continuing operations.

As
a result of the factors discussed above, the net loss for the Company was $65.7 million for the nine months ended September 30, 2002, compared with a net loss of
$49.4 million for the nine months ended September 30, 2001.

Broadcast
cash flow for the nine months ended September 30, 2002 was $46.8 million, compared with $89.0 million for the nine months ended September 30, 2001,
a decrease of $42.2 million, or 47.4%. Broadcast cash flow margins (broadcast cash flow divided by net revenue) for the nine months ended September 30, 2002 decreased to 29.5% from 45.0%
for the same period in 2001.

Liquidity and Capital Resources

Cash used in operations for the nine months ended September 30, 2002 was $32.1 million, compared to cash provided by operations for the nine months
ended September 30, 2001 of

18

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$11.1 million. The decline of advertising revenue in the San Francisco market, the loss of the NBC affiliation at KRON-TV on January 1, 2002 and the resulting impact on
ratings negatively affected the revenues at KRON-TV, resulting in a reduction of cash flows from operating activities for the nine months ended September 30, 2002, as compared to
the nine months ended September 30, 2001. During the fourth quarter of 2000, trade accounts payable increased, causing a timing difference and a $7.5 million use of cash for the nine
months ended September 30, 2001, compared to an increase of $1.1 million for the nine months ended September 30, 2002. The lower debt levels and reduced effective interest rates
relating to the Company's borrowings in 2002 resulted in a decrease in accrued expenses of $6.3 million for the nine months ended September 30, 2002, compared to a decrease of
$13.8 million for the nine months ended September 30, 2001. The decline in advertising revenue caused the accounts receivable to decrease $38.1 million for the nine months ended
September 30, 2002, compared to a decrease of $30.1 million for the nine months ended September 30, 2001. Prepaid expenses for the nine months ended September 30, 2002
increased $7.4 million, compared to $6.9 million for the nine months ended September 30, 2001. The Company made payments for program license liabilities of $29.4 million
for the nine months ended September 30, 2002, compared to $37.1 million for the nine months ended September 30, 2001, a decrease of $7.7 million, or 20.8%. All of this
decrease is attributable to KCAL-TV airing fewer Los Angeles Laker games in the second quarter of 2002 as compared to 2001 and the elimination of all 2002 programming payments since the
sale of KCAL-TV on May 15, 2002.

KRON-TV
and KCAL-TV together contributed approximately 56.8% of the Company's broadcast cash flow for the year ended December 31, 2001. As a result of the
sale of KCAL-TV, the performance of KRON-TV has a larger proportionate impact on the Company's operating results and broadcast cash flow. Consequently, the Company is
particularly susceptible to economic conditions in the San Francisco advertising market. The general San Francisco market continues to be sharply lower in the first nine months of 2002 as compared to
2001 and the Company is unable to predict with any certainty when the San Francisco market will improve.

Cash
provided by investing activities for the nine months ended September 30, 2002 was $623.0 million, compared to cash used in investing activities for the nine months
ended September 30, 2001 of $11.6 million. Investing activities in 2002 included $632.2 million of proceeds from the sale of KCAL-TV on May 15, 2002 to
Viacom Inc. During 2001, the Company incurred, and in 2002 is continuing to incur, significant capital expenditures for building digital transmission facilities, as required by Federal
Communications Commission regulations. The timing of these projects have been constrained by regulatory approvals, equipment availability, construction crew availability and weather conditions.
Commencing in 2001, the Company has made a concerted effort to preserve cash by not replacing equipment unless absolutely necessary, and this practice has continued into 2002. Deposits for the Company
increased $1.8 million for the nine months ended September 30, 2002, as compared to an increase of $7.6 million for the nine months ended September 30, 2001. The increases
in the 2002 and 2001 deposits were primarily from the construction-in-progress for the digital conversion. Construction-in-progress balances at
September 30, 2002 and 2001 were $15.8 million and $14.7 million, respectively. The Company estimates that, by the end of 2002, approximately $14.8 million of the
$16.6 million currently in construction-in-progress will be placed in service and recorded as an addition to capital expenditures. The Company anticipates spending
approximately $4.8 million on additional capital expenditures in the fourth quarter of 2002. The $16.6 million of construction-in-progress at September 30,
2002 combined with capital expenditures of $7.3 million and the estimated additional capital expenditures total approximately $28.7 million of capital expenditures placed in service for
2002. However, since approximately $11.6 million of the capital expenditures were paid for in 2001, the cash payments in 2002 relating to capital expenditures will be approximately
$17.1 million.

Cash
used in financing activities for the nine months ended September 30, 2002 and 2001 was $496.9 million and $2.4 million, respectively. On March 1, 2001,
the Company completed the sale of the March 2001 Notes (as defined) and received proceeds of $500.0 million principal amount and a

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premium of approximately $8.4 million (see below). The Company used approximately $254.4 million of the net proceeds to redeem all of its 113/4% Senior Subordinated Notes
due 2004 and its 101/8% Senior Subordinated Notes due 2005, including accrued interest and redemption premiums. The Company used the remaining net proceeds, approximately
$253.6 million, to repay a portion of its outstanding indebtedness under its senior credit facilities. On June 26, 2001, the Company completed an underwritten public offering of
3.0 million shares of its Class A common stock at a price per share of $36.00. The proceeds of the offering, net of underwriting discounts and commissions, was $103.5 million and
all of such net proceeds were used by the Company to repay indebtedness outstanding under its senior credit facilities. During the second quarter of 2002, the Company used approximately
$225.3 million of the net proceeds from the sale of KCAL-TV to repay in full all indebtedness then outstanding under its senior credit facilities. The remaining net proceeds of the
KCAL-TV sale, after closing costs and tax provisions, of approximately $350.0 million were used to purchase a portion of the Company's senior notes and senior subordinated notes
pursuant to the par offers (see below).

As
of September 30, 2002, the Company had $96.0 million of cash-on-hand available for general corporate purposes. All of these funds were invested
in short-term, risk-averse investments, in accordance with the indentures.

On
June 26, 2000, the Company entered into a new senior credit facility which provided for borrowings of up to an aggregate of $600.0 million (the "New Senior Credit
Facility") in the form of an amortizing term loan facility in the amount of $125.0 million ("Term A") that matures on November 30, 2005, and an amortizing term loan facility in the
amount of $475.0 million ("Term B") that matures on December 31, 2006. Upon the sale of KCAL-TV, all indebtedness outstanding under these term loans was repaid in full. In
addition, on June 26, 2000, the Company amended and restated its existing senior credit facility (as amended, the "Amended and Restated Credit Facility"), to provide for borrowings of up to an
aggregate of $200.0 million, in the form of a $50.0 million term loan and a revolving credit facility in the amount of $150.0 million, both of which mature on November 30,
2005. Upon the closing of the sale of KCAL-TV, all indebtedness outstanding under this term loan was repaid in full. Pursuant to an amendment to the Company's senior credit facility, the
revolving credit portion of the loan facility was reduced to $100.0 million. The New Senior Credit Facility and the Amended and Restated Credit Facility are referred to collectively as the
"Senior Credit Facility."

Pursuant
to the Senior Credit Facility, the Company is prohibited from making investments or advances to third parties exceeding $15.0 million unless the third party becomes a
guarantor of the Company's obligation. In addition, the Company may utilize the undrawn amounts under the revolving portion of the Senior Credit Facility to retire or prepay subordinated debt, subject
to the limitations set forth in the indentures.

Interest
under the Senior Credit Facility is payable at the LIBOR rate, "CD Rate" or "Base Rate." In addition to the index rates, the Company pays a floating percentage tied to the
Company's ratio of total debt to operating cash flow; ranging, in the case of LIBOR rate loans, from 1.75%, based upon a ratio under 5.0:1, to 3.5%, based upon a 7.0:1 or greater ratio for the Term A
advances and revolver facility; and 3.75% for the Term B advances.

Each
of the Subsidiaries has guaranteed the Company's obligations under the Senior Credit Facility. The Senior Credit Facility is secured by the pledge of all the stock of the
Subsidiaries and a first priority lien on all of the assets of the Company and its Subsidiaries.

The
Senior Credit Facility requires the Company to maintain certain financial ratios. Pursuant to an amendment and waiver granted under the Company's Senior Credit Facility on
August 6, 2002, compliance with certain of the financial ratios has been waived commencing for the quarter ended June 30, 2002 until December 30, 2003, and the Company is limited
to $10.0 million of borrowing under the revolving facility until such time as the Company is in compliance with the financial ratios (without giving effect to the waivers). As of
September 30, 2002, the Company was in compliance with

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each of the financial ratios, after giving effect to the waivers. Effective with the issuance of the Senior Notes, as defined below, the Company is not required to maintain a total debt to operating
cash flow ratio until June 30, 2004, when the commencing ratio will be 7.35x, the Company is required to maintain a senior debt to operating cash flow ratio ranging from 3.50x to 4.00x, and the
Company is required to maintain until December 31, 2004 a senior secured debt to operating cash flow ratio ranging from 1.75x to 2.00x.

The
Senior Credit Facility requires the Company to apply on April 30 of each year 50% to 75% (depending upon the level of the Company's debt to operating cash flow ratio at the
end of such year) of its "Excess Cash Flow" for the preceding completed fiscal year, beginning with Fiscal Year 2001, to reduce outstanding debt in proportion to the outstanding principal amount of
such advances. The Senior Credit Facility also contains a number of customary covenants including, among others, limitations on investments and advances, mergers and sales of assets, liens on assets,
affiliate transactions and changes in business. There was no "Excess Cash Flow" for 2001, and thus no payment was required to be made for April 30, 2002.

On
December 7, 2001, the Company completed a private offering of $250.0 million principal amount of its 81/2% Senior Notes due 2008 (the "Senior Notes"). The
Senior Notes were initially offered to qualified institutional buyers under Rule 144A and to persons outside the United States under Regulation S. The Company used all of the net
proceeds of approximately $243.1 million to repay a portion of its outstanding indebtedness under its Senior Credit Facility, including prepayment premiums, and to pay fees related to the
Senior Notes. On July 2, 2002, the Company exchanged the Senior Notes for notes of the Company with substantially identical terms of the Senior Notes, except the new notes do not contain terms
with respect to transfer restrictions.

Concurrent
with the closing of the Senior Notes, the Senior Notes indenture required the Company to place into an escrow account, for the benefit of the holders of the Senior Notes, an
amount sufficient to pay the first four interest payments on the Senior Notes (the "Escrow Account"). The Escrow Account of $41.4 million was funded by the Company from borrowings under its
Senior Credit Facility. The Company entered into an escrow agreement to provide, among other things, that funds may be disbursed from the Escrow Account only to pay interest on the Senior Notes (or,
if a portion of the Senior Notes has been retired by the Company, funds representing the interest payment on the retired Senior Notes will be released to the Company as long as no default exists under
the indenture), and, upon certain repurchases or redemptions thereof, to pay principal of and premium, if any, thereon. All funds placed in the Escrow Account were invested on December 7, 2001
in Treasury Bills, Treasury Principal Strips and Treasury Interest Strips with maturity dates in correlation with the interest payments for the first two years.

On
August 12, 2002, the Company commenced offers to purchase for cash all of its Senior Notes and a portion of its outstanding 9% Senior Subordinated Notes due 2006,
83/4% Senior Subordinated Notes due 2007, and 10% Senior Subordinated Notes due 2011 (collectively referred to as the "Senior Subordinated Notes," and the Senior Notes and the Senior
Subordinated Notes are collectively referred to as the "Notes"). These offers were made with the net proceeds from the sale of KCAL-TV, in
accordance with the terms of the indentures governing the Notes. The net proceeds of the KCAL-TV sale, pursuant to the terms of the indentures, were approximately $350.0 million.
The purchase price for the Notes in the offers was equal to $1,000 per $1,000 principal amount of the notes tendered and accepted, plus accrued and unpaid interest through September 17, 2002 in
the case of the Senior Notes and September 24, 2002 in the case of the Senior Subordinated Notes. The offers expired in accordance with their terms on September 12, 2002.

On
September 18, 2002, pursuant to the terms of the Senior Note offer, the Company purchased $93.1 million aggregate principal amount of the Senior Notes (constituting all
of the Senior Notes validly tendered and not withdrawn in the offer) and paid accrued interest of approximately $2.0 million thereon. On October 17, 2002, as a result of the purchase of
Senior Notes and in

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accordance with the escrow agreement relating to the Senior Notes, approximately $11.8 million was released from the escrow account and is available to the Company for general corporate
purposes.

On
September 25, 2002, pursuant to the terms of the Senior Subordinated Note offer, the Company purchased $38.9 million aggregate principal amount of its 9% Senior
Subordinated Notes, $62.3 million aggregate principal amount of its 83/4% Senior Subordinated Notes and $155.7 million aggregate principal amount of its 10% Senior
Subordinated Notes and paid accrued interest of approximately $681,100, $1.5 million and $1.0 million, respectively, thereon. The principal amount of the Senior Subordinated Notes paid
was determined based on the pro-ration provisions of the indentures governing the Senior Subordinated Notes.

Debt
amounts outstanding at December 31, 2001 and September 30, 2002 were as follows (dollars in thousands):

|                                         |                                       | 12/31/01 |         | 9/30/02   |   | Annualized
Interest Amounts(1)
|---------------------------------------- | ------------------------------------- | -------- | ------- | --------- | - | ------------------------------
|Senior Credit Facility                   |                                       | $        | 145,653 |           | $ |                              
|81/2% Senior Notes due 2008              |                                       |          | 250,000 |           |   | 156,890                       
|9% Senior Subordinated Notes due 2006    |                                       |          | 125,000 |           |   | 86,081                        
|83/4% Senior Subordinated Notes due 2007 |                                       |          | 200,000 |           |   | 137,730                       
|10% Senior Subordinated Notes due 2011   |                                       |          | 500,000 |           |   | 344,299                       
|                                         |                                       |          |         |           |   |                               
|                                         | Total Debt (excluding capital leases) |          | $       | 1,220,653 |   | $                             
|                                         |                                       |          |         |           |   |                               

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The
Company's total debt at September 30, 2002 was approximately $727.2 million, consisting of $568.1 million of Senior Subordinated Notes, $156.9 million of
Senior Notes and $2.2 million of capital leases. In addition, at September 30, 2002, the Company had an additional $100.0 million of unused available borrowings under the
revolving credit portion of the Senior Credit Facility; provided, however, pursuant to the amendment and waiver entered into on August 6, 2002, the Company is limited to $10.0 million of
borrowings under the revolving facility until such time as the Company is in compliance with the financial ratios (without giving effect to the waivers).

On
June 27, 2001, the Company entered into interest rate swap agreements for a total notional amount of $100.0 million with two commercial banks who are also lenders under
the Senior Credit Facility. The swap's effective date was September 4, 2001 and expires on March 1, 2011. The Company pays a floating interest rate based upon a six month LIBOR rate and
the Company receives interest from the commercial banks, at a fixed rate of 10.0%. The net interest rate differential paid or received will be recognized as an adjustment to interest expense. The
interest swaps are accounted for at market value and do not qualify for hedge accounting. The Company received approximately $14.0 million at the inception of the new swap agreements, which was
used to pay the outstanding liability upon the termination of the old cash flow hedges, and recorded a swap liability. The Company recorded, for the nine months ended September 30, 2002,
$6.2 million of non-cash interest expense relating to the amortization of the old swap liability. The swap liability is being adjusted to fair value on a quarterly basis as a charge
to current period interest expense over the term of the swap which began on September 4, 2001. The Company recorded a $10.5 million mark-to-market change in fair
value, recorded to non-cash interest income, of its current outstanding hedges in 2002.

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The amount remaining in other comprehensive income from the terminated swaps are being amortized to earnings over what would have been the life of the swaps.

It
is anticipated that the Company will be able to meet the working capital needs of its stations, scheduled principal and interest payments under the Company's Senior Notes and Senior
Subordinated Notes and capital expenditures, from cash on hand, cash flows from operations and funds available under the Senior Credit Facility.

On
November 27, 2001, the holders of a majority in principal amount of the Company's 9% senior subordinated notes due 2006 consented to proposed amendments to the indenture
governing the 9% senior subordinated notes. These amendments, among other things, provided the Company with flexibility to incur additional debt, including the Senior Notes. The amendments became
effective upon the issuance of the Senior Notes. The Company paid consenting holders $25.00 in cash for each $1,000 principal amount of the 9% senior subordinated notes held by such consenting
holders.

Income Taxes

The Company files a consolidated federal income tax return and such state or local tax returns as are required. The Company recorded a gain on the sale of
KCAL-TV of approximately $139.6 million, net of a provision for income taxes of $147.9 million. As a result of this income, the Company was able to realize a tax benefit from
the utilization of the loss from operations for the nine months ended September 30, 2002, tax loss carryforwards, and the cumulative effect of an accounting change (See Notes 2 and 4 to the
Financial Statements). The Company expects to pay approximately $36.5 million of federal and state taxes for 2002 resulting primarily from the gain upon the sale of KCAL-TV offset
by available tax losses. As of December 31, 2001, the Company had approximately $320 million of net operating loss ("NOL") carryforwards some of which are subject to
annual limitations imposed by Internal Revenue Code Section 382. It is estimated that approximately $270 million of these NOL carryforwards will be utilized in 2002. In addition, the
Company has recorded a deferred tax asset of $14.0 million related to existing temporary differences that are expected to generate future tax losses that can be carried back to recover a
portion of the tax to be paid for 2002.

Recently Issued Accounting Standards

In June 2002, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 146, Accounting for Costs
Associated with Exit of Disposal Activities("Statement 146"), effective for exit or disposal activities that are initiated after
December 31, 2002. The Company's adoption of this new standard is not expected to have a material impact on the results of operating and financial position.

In
April 2002, the FASB issued Statements of Financial Accounting Standards No. 145,Rescission of FASB Statements No. 4, 44, and 62,
Amendment of FASB Statement No. 13, and Technical Corrections("Statement 145"), effective for fiscal years beginning after May 15, 2002. For most companies,
Statement 145 will require gains and losses on extinguishments of debt to be classified as income or loss from continuing operations rather than as extraordinary items as previously required under
Statement 4.

The
Company elected, in the second quarter of 2002, early application of the provisions of Statement 145 related to the rescission of Statement 4. Accordingly, the Company reclassified
$12.4 million it recorded in 2001 as an extraordinary loss on extinguishment of debt to its loss from continuing operations for the six months ended June 30, 2001. In addition, the
Company recorded a loss on the extinguishment of debt in the second quarter of 2002 of approximately $4.7 million relating to its deferred financing costs under its senior credit facilities and
their repayment as a result of the sale of KCAL-TV (see Note 3 to the Financial Statements).

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The
Company applied FASB Statement No. 142,Goodwill and Other Intangible Assets("Statement 142"), the new rules on accounting for
goodwill and other intangible assets on January 1, 2002. Application of the non-amortization provisions of this new standard resulted in a decrease in amortization expense of
approximately $5.8 million and $20.4 million for the three and nine months ended September 30, 2002, respectively. The Company completed its review for impairment of goodwill and
certain other intangibles under the new standard in 2002. In 2002, the Company recognized an impairment loss of $268.7 million and recorded it as a cumulative effect of an accounting change,
net of a provision for income taxes of $39.5 million (See Note 2 to Financial Statements). Under Statement 142, the Company will be subject to annual impairment tests. If the test
concludes that an impairment has occurred, the Company will be required to take a charge to continuing operations.

The
Company applied FASB Statement No. 144,Accounting for the Impairment of Long-Lived Assets to be Disposed of("Statement 144") and, the new rules on accounting for the discontinuation of a component of an entity on January 1, 2002. As a result of applying Statement 144, the Company recorded income
from its discontinued operations of $1.7 million and $2.3 million for the three and nine months ended September 30, 2001, respectively, and income from its discontinued operations
of $353,000 and $3.6 million for three and nine months ended September 30, 2002, respectively. In addition,
the Company classified assets held for sale at December 31, 2001 of $332.2 million, and liabilities held for sale at December 31, 2001 of $20.3 million (see Note 3
to Financial Statements).

Item 3.Quantitative and Qualitative Disclosure About Market Risk.

The
Company's Senior Credit Facility, with no amounts outstanding as of September 30, 2002, bears interest at floating rates. Accordingly, to the extent there are amounts
outstanding under the Senior Credit Facility, we are exposed to potential losses related to changes in interest rates.

The
Company's Senior Subordinated Notes of approximately $568.1 million outstanding as of September 30, 2002 are general unsecured obligations of the Company and are
subordinated in right of payment to all senior debt, including all indebtedness of the Company under the Senior Credit Facility and the Senior Notes. The Senior Subordinated Notes have fixed rates of
interest ranging from 83/4% to 10% and are ten-year notes maturing in various years commencing 2006. The annualized interest expense on the outstanding Senior Subordinated
Notes is approximately $54.2 million.

The
Company's Senior Notes of approximately $156.9 million outstanding as of September 30, 2002 have a fixed rate of interest of 81/2% and mature in 2008.
The annualized interest expense on the outstanding senior notes is approximately $13.3 million.

The
Company does not enter into derivatives or other financial instruments for trading or speculative purposes; however, in order to manage our exposure to interest rate risk, the
Company entered into derivative financial instruments in June 2001. These derivative financial instruments are interest rate swap agreements that expire in 2011. We do not apply hedge
accounting to these instruments.

Item 4.Controls and Procedures.

Within the 90 days prior to the date of this report, under the supervision and with the participation of management, including our Chief Executive Officer
and our Chief Financial Officer, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-14.
Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures are effective in timely alerting them to material
information relating to us (including our consolidated subsidiaries) required to be included in our periodic SEC filings. There have been no significant changes in our internal controls or in other
factors that could significantly affect internal controls subsequent to the date of their evaluation.

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PART II. OTHER INFORMATION

Item 1.Legal Proceedings.

Julian Graham & Julian Graham Chevrolet, Inc. v. Young Broadcasting Inc.,  Young Broadcasting of Richmond, Inc. and Richard RealCase No. LP 1723-1 (Circuit Court,
City of Richmond, Virginia)

On
July 31, 2002, Plaintiffs served upon Young Broadcasting Inc., Young Broadcasting of Richmond, Inc. ("WRIC-TV")and Richard Real a Motion for Judgment alleging
that the Defendants defamed Plaintiffs in a news story concerning Julian Graham Chevrolet that aired in April and May of 2002. Specifically, the news story of television station WRIC-TV reported that
Julian Graham Chevrolet had filed for bankruptcy. Neither Julian Graham nor Julian Graham Chevrolet had filed for bankruptcy. The Company has responded to the Complaint and has also moved to have some
of the claims dismissed. The parties have exchanged written discovery. No depositions have been taken. Julian Graham and Julian Graham Chevrolet Inc. are seeking $40 million of
compensatory damages and $10 million of punitive damages. As of this time, this case is currently set for trial to begin on March 10, 2003. The Company has vigorously defended this
matter. It is too early to estimate the likelihood of Plaintiffs' chances of recovery or a potential amount of recovery. The Company's insurance policy coverage for these types of matters is limited
to $10 million.

The
Company is involved in legal proceedings and litigation arising in the ordinary course of business. In the Company's opinion, the outcome of such proceedings and litigation currently
pending will not materially affect the Company's financial condition or results of operations.

Item 6.Exhibits and Reports on Form 8-K.



|Exhibit
Number |  | Exhibit Description                            
|-------------- |  | -----------------------------------------------
|11             |  | Statement Re Computation of Per Share Earnings.



|Date Report        |  | Date of Report
Filed with SEC |  | Items Reported                 
|------------------ |  | ----------------------------- |  | -------------------------------
|August 7, 2002     |  | August 12, 2002               |  | Item 5Other Events            
|                   |  |                               |  | Item 7Exhibits                
|                   |  |                               |  | Item 9Regulation FD Disclosure
|August 9, 2002     |  | August 9, 2002                |  | Item 9Regulation FD Disclosure
|September 19, 2002 |  | September 26, 2002            |  | Item 5Other Events            
|                   |  |                               |  | Item 7Exhibits                

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SIGNATURES

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

|                       |  | YOUNG BROADCASTING INC.
|---------------------- |  | -----------------------
|Date: November 7, 2002 |  | By:                    
|Date: November 7, 2002 |  | By:                    

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CERTIFICATIONS

I,
Vincent J. Young, certify that:



| |  |  | /s/VINCENT J. YOUNGVincent J. Young
Chairman and Chief Executive Officer
November 7, 2002
| |  |  | -----------------------------------------------------------------------------------------

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I,
James A. Morgan, certify that:



| |  |  | /s/JAMES A. MORGANJames A. Morgan
Executive Vice President and
Chief Financial Officer
November 7, 2002
| |  |  | -------------------------------------------------------------------------------------------------------

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