##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
 þ
    
    Quarterly Report pursuant to Section 13 OR 15 (d) of the Securities Exchange Act of
1934
 For the quarterly period ended June 30, 2006
 Commission file number: 001-31311
    
    Commission file number: 000-25206LIN TV Corp.
    
    LIN Television Corporation(Exact name of registrant as
    
    (Exact name of registrant asspecified in its charter)
    
    specified in its charter)Delaware
    
    Delaware(State or other jurisdiction of
    
    (State or other jurisdiction ofincorporation or organization)
    
    incorporation or organization)05-0501252
    
    13-3581627(I.R.S. Employer
    
    (I.R.S. EmployerIdentification No.)
    
    Identification No.)
 Four Richmond Square, Suite 200, Providence, Rhode Island 02906
 (Address of principal executive offices)
 (401) 454-2880
 (Registrants telephone number, including area code)
 þ o
  o þ o
 o þ




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Table of Contents
 Part I. Financial InformationItem 1. Financial StatementsLIN TV Corp.Condensed Consolidated Balance Sheets
    
    
    2Condensed Consolidated Statements of Operations
    
    
    3Condensed Consolidated Statements of Cash Flows
    
    
    4Notes to Condensed Consolidated Financial Statements
    
    
    5(See separate index for financial statements of LIN Television Corporation)
    
    
    36Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    17Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    29Item 4. Controls and Procedures
    
    
    30Part II. Other InformationItem 1. Legal Proceedings
    
    
    31Item 1A. Risk Factors
    
    
    31Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    32Item 4. Submission of Matters to a Vote of Security Holders
    
    
    32Item 6. Exhibits
    
    
    33Signature Page
    
    
    35Certification of Pursuant to Section 302 - LIN TV CorpCertification Pursuant to Section 302 - LIN Television CorporationCertification Pursuant to Section 906 - LIN TV CorpCertification Pursuant to Section 906 - LIN Television Corporation
  1




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##### Table of Contents



PART I: FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 
 LIN TV CORP.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 June 30,
    
    
    December 31,2006
    
    
    2005(Unaudited)(In thousands, except share data)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    11,571
    
    
    $
    11,135Accounts receivable, less allowance for doubtful accounts (2006 - $1,448; 2005 - $1,148)
    
    
    90,918
    
    
    
    85,575Program rights
    
    
    13,678
    
    
    
    25,960Other current assets
    
    
    5,789
    
    
    
    3,534Total current assets
    
    
    121,956
    
    
    
    126,204Property and equipment, net
    
    
    223,902
    
    
    
    237,676Deferred financing costs
    
    
    19,009
    
    
    
    20,173Equity investments
    
    
    62,898
    
    
    
    63,526Program rights
    
    
    19,551
    
    
    
    7,307Other assets
    
    
    15,217
    
    
    
    19,766Goodwill
    
    
    528,083
    
    
    
    623,383Broadcast licenses and other intangible assets, net
    
    
    1,067,768
    
    
    
    1,308,598Total assets
    
    $
    2,058,384
    
    
    $
    2,406,633LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    7,372
    
    
    $
    8,292Accrued interest expense
    
    
    5,224
    
    
    
    6,553Accrued sales volume discount
    
    
    2,016
    
    
    
    5,287Other accrued expenses
    
    
    29,898
    
    
    
    23,480Program obligations
    
    
    19,961
    
    
    
    30,375Total current liabilities
    
    
    64,471
    
    
    
    73,987Long-term debt
    
    
    989,753
    
    
    
    981,714Deferred income taxes, net
    
    
    347,232
    
    
    
    439,619Program obligations
    
    
    18,121
    
    
    
    7,343Other liabilities
    
    
    54,709
    
    
    
    60,540Total liabilities
    
    
    1,474,286
    
    
    
    1,563,203Preferred stock of Banks Broadcasting, Inc., $0.01 par value, 179,322 shares
issued and outstanding at June 30, 2006 and December 31, 2005
    
    
    10,367
    
    
    
    14,558Stockholders equity:Class A common stock, $0.01 par value, 100,000,000 shares authorized,
28,923,632 shares at June 30, 2006 and 28,562,583 shares at December 31, 2005,
issued and outstanding
    
    
    287
    
    
    
    286Class B common stock, $0.01 par value, 50,000,000 shares authorized,
23,502,059 shares at June 30, 2006 and December 31, 2005,
issued and outstanding; convertible into an equal number of shares of Class A or Class C
common stock
    
    
    235
    
    
    
    235Class C common stock, $0.01 par value, 50,000,000 shares authorized,
2 shares at June 30, 2006 and December 31, 2005, respectively, issued and outstanding; convertible
into an equal number of shares of Class A common stock
    
    
    
    
    
    
    Treasury stock, 1,806,428 shares and 368,728 shares of class A common stock at
June 30, 2006 and December 31, 2005, respectively, at cost
    
    
    (18,005
    )
    
    
    (4,777
    )Additional paid-in capital
    
    
    1,083,030
    
    
    
    1,076,704Accumulated deficit
    
    
    (476,584
    )
    
    
    (227,908
    )Accumulated other comprehensive loss
    
    
    (15,232
    )
    
    
    (15,668
    )Total stockholders equity
    
    
    573,731
    
    
    
    828,872Total liabilities, preferred stock and stockholders equity
    
    $
    2,058,384
    
    
    $
    2,406,633
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LIN TV CORP.
 
  (In thousands, except per share information)
 Three Months Ended June 30,
    
    
    Six Months Ended June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Net revenues
    
    $
    115,405
    
    
    $
    99,010
    
    
    $
    216,219
    
    
    $
    177,854Operating costs and expenses:Direct operating (excluding depreciation of $8.8 million
and $8.5 million for the three months ended June 30, 2006
and 2005, respectively, and $19.3 million and $16.2
million for the six months ended June 30, 2006 and 2005,
respectively)
    
    
    32,798
    
    
    
    27,628
    
    
    
    66,145
    
    
    
    54,044Selling, general and administrative
    
    
    33,807
    
    
    
    26,884
    
    
    
    67,283
    
    
    
    51,646Amortization of program rights
    
    
    7,636
    
    
    
    6,534
    
    
    
    15,054
    
    
    
    12,389Corporate
    
    
    12,807
    
    
    
    5,099
    
    
    
    18,579
    
    
    
    10,354Impairment of broadcast licenses and goodwill
    
    
    333,553
    
    
    
    
    
    
    
    333,553
    
    
    
    Depreciation and amortization of intangible assets
    
    
    9,913
    
    
    
    8,873
    
    
    
    21,865
    
    
    
    16,912Total operating costs
    
    
    430,514
    
    
    
    75,018
    
    
    
    522,479
    
    
    
    145,345Operating (loss) income
    
    
    (315,109
    )
    
    
    23,992
    
    
    
    (306,260
    )
    
    
    32,509Other (income) expense:Interest expense, net
    
    
    17,380
    
    
    
    10,835
    
    
    
    34,128
    
    
    
    21,745Share of
loss (income) in equity investments
    
    
    571
    
    
    
    (1,463
    )
    
    
    (1,009
    )
    
    
    (1,709
    )Minority interest in loss of Banks Broadcasting, Inc.
    
    
    (3,952
    )
    
    
    (74
    )
    
    
    (4,191
    )
    
    
    (286
    )Loss (gain) on derivative instruments
    
    
    1,538
    
    
    
    (2,096
    )
    
    
    492
    
    
    
    (1,595
    )Loss on extinguishment of debt
    
    
    
    
    
    
    21
    
    
    
    
    
    
    
    12,330Other, net
    
    
    5,129
    
    
    
    (235
    )
    
    
    5,139
    
    
    
    166Total other expense, net
    
    
    20,666
    
    
    
    6,988
    
    
    
    34,559
    
    
    
    30,651(Loss) income before (benefit from) provision for income taxes
    
    
    (335,775
    )
    
    
    17,004
    
    
    
    (340,819
    )
    
    
    1,858(Benefit from) provision for income taxes
    
    
    (91,418
    )
    
    
    6,909
    
    
    
    (92,143
    )
    
    
    2,083Net (loss) income
    
    $
    (244,357
    )
    
    $
    10,095
    
    
    $
    (248,676
    )
    
    $
    (225
    )Basic (loss) income per common share:Net (loss) income
    
    
    (4.87
    )
    
    
    0.20
    
    
    
    (4.92
    )
    
    
    Weighted - average number of common shares outstanding used
in calculating basic (loss) income per common share
    
    
    50,217
    
    
    
    50,633
    
    
    
    50,502
    
    
    
    50,573Diluted (loss) income per common share:Net (loss) income
    
    
    (4.87
    )
    
    
    0.17
    
    
    
    (4.92
    )
    
    
    Weighted - average number of common shares outstanding used
in calculating diluted (loss) income per common share
    
    
    50,217
    
    
    
    54,236
    
    
    
    50,502
    
    
    
    50,573
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LIN TV CORP.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  (unaudited)
 Six months ended June 30,2006
    
    
    2005(In thousands)OPERATING ACTIVITIES:Net loss
    
    $
    (248,676
    )
    
    $
    (225
    )Adjustment to reconcile net loss to net cash provided by operating activities:Depreciation and amortization of intangible assets
    
    
    21,865
    
    
    
    16,912Impairment of broadcast licenses and goodwill
    
    
    333,553
    
    
    
    Amortization of financing costs and note discounts
    
    
    4,327
    
    
    
    3,207Amortization of program rights
    
    
    15,054
    
    
    
    12,389Program payments
    
    
    (15,321
    )
    
    
    (13,817
    )Loss on extinguishment of debt
    
    
    
    
    
    
    12,330Loss (gain) on derivative instruments
    
    
    492
    
    
    
    (1,595
    )Share of income in equity investments
    
    
    (1,009
    )
    
    
    (1,709
    )Deferred income taxes, net
    
    
    (92,387
    )
    
    
    1,168Stock-based compensation
    
    
    5,578
    
    
    
    1,753Loss on investment in USDTV
    
    
    5,000
    
    
    
    Other, net
    
    
    (3,435
    )
    
    
    547Changes in operating assets and liabilities, net of acquisitions and disposals:Accounts receivable
    
    
    (5,643
    )
    
    
    (4,585
    )Other assets
    
    
    (765
    )
    
    
    (850
    )Accounts payable
    
    
    (920
    )
    
    
    (2,220
    )Accrued interest expense
    
    
    (1,329
    )
    
    
    (3,100
    )Accrued sales volume discount
    
    
    (3,271
    )
    
    
    (4,002
    )Other liabilities
    
    
    1,183
    
    
    
    (1,798
    )Net cash provided by operating activities
    
    
    14,296
    
    
    
    14,405INVESTING ACTIVITIES:Capital expenditures
    
    
    (5,569
    )
    
    
    (5,213
    )Capital contribution from minority interest in Banks Broadcasting, Inc.
    
    
    
    
    
    
    550Distributions from equity investments
    
    
    2,037
    
    
    
    3,055Payments for business combinations, net of cash acquired
    
    
    
    
    
    
    (85,000
    )USDTV Investment and other investments, net
    
    
    (2,304
    )
    
    
    (218
    )Net cash used in investing activities
    
    
    (5,836
    )
    
    
    (86,826
    )FINANCING ACTIVITIES:Issuance of common stock under employee stock plans
    
    
    328
    
    
    
    1,650Proceeds from issuance of long-term debt
    
    
    
    
    
    
    345,000Long-term debt financing costs
    
    
    (124
    )
    
    
    (6,018
    )Proceeds from revolver debt
    
    
    5,000
    
    
    
    60,000Principal payments on long-term debt
    
    
    
    
    
    
    (324,940
    )Treasury stock purchased
    
    
    (13,228
    )
    
    
    Cash expenses associated with early extinguishment of debt
    
    
    
    
    
    
    (7,108
    )Net cash (used in) provided by financing activities
    
    
    (8,024
    )
    
    
    68,584Net increase
(decrease) in cash and cash equivalents
    
    
    436
    
    
    
    (3,837
    )Cash and cash equivalents at the beginning of the period
    
    
    11,135
    
    
    
    14,797Cash and cash equivalents at the end of the period
    
    $
    11,571
    
    
    $
    10,960
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LIN TV CORP.
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 Note 1  Basis of Presentation
       st
  5




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LIN TV CORP.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 Note 2  Stock-Based Compensation
   Three Months Ended
    
    
    Six Months EndedJune 30, 2005
    
    
    June 30, 2005Net income (loss), as reported
    
    $
    10,095
    
    
    $
    (225
    )Add: Stock-based employee compensation expense,
included in reported net income (loss), net of related tax effect
    
    
    382
    
    
    
    1,052Deduct: Total stock-based employee compensation
expense determined under the fair value based
method for all awards, net of related tax effect
    
    
    (472
    )
    
    
    (822
    )Pro forma net income
    
    $
    10,005
    
    
    $
    5Basic net income (loss) per common share, as reported
    
    $
    0.20
    
    
    $
    Basic net income per common share, pro forma
    
    $
    0.20
    
    
    $
    Diluted net income (loss) per common share, as reported
    
    $
    0.17
    
    
    $
    Diluted net income per common share, pro forma
    
    $
    0.16
    
    
    $
    
  Note 3  Acquisitions
 Acquisition Reserves:
 6




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LIN TV CORP.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 Balance as ofDecember
    
    
    
    
    
    
    
    
    
    
    Balance as of JuneAcquisition Date
    
    31, 2005
    
    
    Payments
    
    
    Adjustments
    
    
    30, 2006Acquisition of Sunrise Television Corp.
    
    May 2, 2002
    
    
    211
    
    
    
    54
    
    
    
    
    
    
    
    157Stations acquired from Viacom
    
    March 31, 2005
    
    
    295
    
    
    
    
    
    
    
    
    
    
    
    295Stations acquired from Emmis
    
    November 30, 2005
    
    $
    7,910
    
    
    $
    652
    
    
    $
    (41
    )
    
    
    7,217$
    8,416
    
    
    $
    706
    
    
    $
    (41
    )
    
    $
    7,669
  Pro Forma:
 Three Months
    
    Six MonthsEnded June 30,
    
    Ended June 30,2005
    
    2005Net revenues
    
    $
    114,361
    
    
    $
    210,094Operating income
    
    
    27,545
    
    
    
    35,464Net income
    
    
    10,780
    
    
    
    (2,463
    )Basic net income per common share, as reported
    
    $
    0.20
    
    
    $
    Basic net income per common share, pro forma
    
    $
    0.21
    
    
    $
    (0.05
    )Diluted net income per common share, as reported
    
    $
    0.17
    
    
    $
    Diluted net income per common share, pro forma
    
    $
    0.18
    
    
    $
    (0.05
    )
 Note 4  Investments
  June 30,
    
    
    December 31,2006
    
    
    2005NBC Universal joint venture
    
    $
    55,821
    
    
    $
    54,803WAND (TV) Partnership
    
    
    6,558
    
    
    
    8,595Other
    
    
    519
    
    
    
    128$
    62,898
    
    
    $
    63,526
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##### Table of Contents



LIN TV CORP.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 Joint Venture with NBC Universal:
  Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2006
    
    2005
    
    2006
    
    2005Revenue
    
    $
    23,206
    
    
    $
    23,394
    
    
    $
    47,847
    
    
    $
    41,700Other expense
    
    
    (16,344
    )
    
    
    (16,379
    )
    
    
    (32,853
    )
    
    
    (33,233
    )Net income
    
    
    6,862
    
    
    
    7,015
    
    
    
    14,994
    
    
    
    8,467
 June 30,
    
    December 31,2006
    
    2005Current assets
    
    $
    12,071
    
    
    $
    10,617Non-current assets
    
    
    236,015
    
    
    
    232,075Current liabilities
    
    
    1,087
    
    
    
    724Non-current liabilities
    
    
    815,500
    
    
    
    815,500
  8




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LIN TV CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 WAND (TV) Partnership:
  Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2006
    
    2005
    
    2006
    
    2005Net revenues
    
    $
    1,922
    
    
    $
    1,636
    
    
    $
    3,816
    
    
    $
    3,145Operating (loss) income (1)
    
    
    (5,890
    )
    
    
    88
    
    
    
    (6,122
    )
    
    
    (74
    )Net (loss) income
    
    
    (5,884
    )
    
    
    98
    
    
    
    (6,112
    )
    
    
    (51
    )
 June 30,
    
    December 31,2006
    
    2005Current assets
    
    $
    2,387
    
    
    $
    2,398Non-current assets
    
    
    14,164
    
    
    
    20,702Current liabilities
    
    
    850
    
    
    
    1,276Non-current liabilities
    
    
    3
    
    
    
    14
 
  9




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LIN TV CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 Note 5  Intangible Assets
  EstimatedRemaining Useful
    
    June 30,
    
    
    December 31,Life (Years)
    
    2006
    
    
    2005Amortizing Intangible Assets:LMA purchase options
    
    1
    
    $
    4,212
    
    
    $
    4,212Network affiliations
    
    1
    
    
    1,753
    
    
    
    1,753Other intangibles
    
    1-27
    
    
    6,025
    
    
    
    6,025Accumulated amortization
    
    
    
    
    (7,227
    )
    
    
    (4,686
    )4,763
    
    
    
    7,304Indefinite-Lived Intangible Assets:Broadcast licenses
    
    
    
    
    1,063,005
    
    
    
    1,301,294Goodwill
    
    
    
    
    528,083
    
    
    
    623,383$
    1,591,088
    
    
    $
    1,924,677Goodwill
    
    
    
    
    528,083
    
    
    
    623,383Broadcast licenses and other
intangible assets, net
    
    
    
    
    1,067,768
    
    
    
    1,308,598Total intangible assets
    
    
    
    $
    1,595,851
    
    
    $
    1,931,981
  Three Months
    
    Six Months
    
    Estimated amortization expenseEnded June 30,
    
    Ended June 30,
    
    For the year ended December 31,2005
    
    2006
    
    2005
    
    2006
    
    2006
    
    2007
    
    2008
    
    2009
    
    2010
    
    ThereafterAmortization expense
    
    $
    400
    
    
    $
    1,159
    
    
    $
    666
    
    
    $
    2,541
    
    
    $
    1,427
    
    
    $
    434
    
    
    $
    219
    
    
    $
    37
    
    
    $
    36
    
    
    $
    2,610
   10




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LIN TV CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    Note 6  Debt
  June 30,
    
    
    December 31,2006
    
    
    2005Credit Facility
    
    $
    321,000
    
    
    $
    316,0006 1/2% Senior Subordinated Notes due 2013
    
    
    375,000
    
    
    
    375,000$190,000, 6 1/2% Senior Subordinated Notes  Class B due 2013
(net of discount of $13,349 and $14,283 at June 30, 2006
and December 31, 2005, respectively)
    
    
    176,651
    
    
    
    175,717$125,000, 2.50% Exchangeable Senior Subordinated Debentures due
2033 (net of discount of $7,898 and $10,003 at June 30, 2006
and December 31, 2005, respectively)
    
    
    117,102
    
    
    
    114,997Total long-term debt
    
    $
    989,753
    
    
    $
    981,714
 Note 7  Related Party Transactions
 Financial Advisory Agreement
 Centennial Cable of Puerto Rico:
 Note 8  Contingencies
 GECC Note.
 11




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##### Table of Contents



LIN TV CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
  
    
    GECC could force LIN TV Corp. to sell the stock of LIN Television held by LIN TV Corp. to
satisfy outstanding amounts under the GECC note;
    
    if more than 50% of the ownership of LIN Television had to be sold to satisfy the GECC
note, it could cause an acceleration of the Companys credit facility and notes; and
    
    if the GECC note is prepaid because of an acceleration on default or otherwise, or if
the note is repaid at maturity, the Company may incur a substantial tax liability.
  Note 9  Retirement Plans
   Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Service cost
    
    $
    625
    
    
    $
    549
    
    
    $
    1,250
    
    
    $
    1,098Interest cost
    
    
    1,400
    
    
    
    1,350
    
    
    
    2,800
    
    
    
    2,700Expected return on plan assets
    
    
    (1,475
    )
    
    
    (1,435
    )
    
    
    (2,950
    )
    
    
    (2,870
    )Amortization of prior service cost
    
    
    30
    
    
    
    30
    
    
    
    60
    
    
    
    60Amortization of net loss
    
    
    320
    
    
    
    241
    
    
    
    640
    
    
    
    482Net periodic benefit cost
    
    $
    900
    
    
    $
    735
    
    
    $
    1,800
    
    
    $
    1,470
  12




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##### Table of Contents



LIN TV CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 Note 10  Earnings per Share
   Three Months Ended
    
    
    Six Months EndedJune 30, 2005
    
    
    June 30, 2005Numerator for income per common stock calculation:Net income (loss) available to common shareholders, basic
    
    $
    10,095
    
    
    $
    (225
    )Interest expense on contingently convertible debt, net of tax
    
    
    1,137
    
    
    
    Derivative (loss) income, net of tax
    
    
    (2,195
    )
    
    
    Net income (loss) available to common shareholders, diluted
    
    $
    9,037
    
    
    $
    (225
    )Denominator for income per common stock calculation:Weighted average common shares, basic
    
    
    50,633
    
    
    
    50,573Effect of dilutive securities:Stock options
    
    
    250
    
    
    
    Contingently convertible debt
    
    
    3,353
    
    
    
    Weighted average common shares, diluted
    
    
    54,236
    
    
    
    50,573Basic income (loss) per common stock
    
    $
    0.20
    
    
    $
    Diluted income (loss) per common stock
    
    $
    0.17
    
    
    $
    
 Note 11  Share Repurchase Program
  Note 12  Derivative Financial Instruments
 Accounting Policy
 13




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##### Table of Contents



LIN TV CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
   Note 13  Comprehensive (Loss) Income
  Three Months Ended June 30,
    
    
    Six Months Ended June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Net (loss) income
    
    $
    (244,357
    )
    
    $
    10,095
    
    
    $
    (248,676
    )
    
    $
    (225
    )Other comprehensive income, net of tax:Change in the fair market value of hedged items
    
    
    436
    
    
    
    
    
    
    
    436
    
    
    
    Comprehensive (loss) income
    
    
    (243,921
    )
    
    
    10,095
    
    
    
    (248,240
    )
    
    
    (225
    )
 14




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##### Table of Contents



LIN TV CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 Note 14  Recent Accounting Pronouncements
      15




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##### Table of Contents



LIN TV CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 Note 15  Subsequent Events
 Acquisition of WBPG.
 Bankruptcy of USDTV.
 Appointment of a new Chief Executive Officer
 Acquisition of KASA.
 16




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Special Note About Forward-Looking Statements
  
    
    volatility and changes in our advertising revenues;
    
    the outbreak and duration of hostilities or the occurrence of terrorist attacks and the duration and
extent of network preemption of regularly scheduled programming and decisions by advertisers to withdraw
or delay planned advertising expenditures as a result of military action or terrorist attacks;
    
    restrictions on our operations due to, and the effect of, our significant leverage;
    
    effects of complying with accounting standards, including with respect to the treatment of our
intangible assets;
    
    inability to consummate acquisitions on attractive terms;
    
    increases in our cost of borrowings or inability or unavailability of additional debt or equity
capital;
    
    increased competition, including from newer forms of entertainment and entertainment media, or changes
in the popularity or availability of programming;
    
    increased costs, including increased capital expenditures as a result of necessary technological
enhancements such as expenditures related to the transition to digital broadcasting, or acquisitions or
increased programming costs;
    
    effects of our control relationships, including the control that Hicks Muse and its affiliates have
with respect to corporate transactions and activities we undertake;
    
    adverse state or federal legislation or regulation or adverse determinations by regulators, including
adverse changes in, or interpretations of, the exceptions to the FCC duopoly rule; and
    
    changes in general economic conditions in the markets in which we compete.
 17




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##### Table of Contents



Executive Summary
   
    
    We recorded an impairment loss of $333.6 million,
comprised of a goodwill impairment of $95.3 million and a
broadcast license impairment of $238.3 relating to
fifteen of our television stations in the second quarter of 2006. Approximately $1.6
billion, or 78%, of our total assets as of June 30, 2006 consisted of unamortized
intangible assets. Intangible assets principally include broadcast licenses and
goodwill. SFAS No. 142, Goodwill and Other Intangible Assets, requires, among other
things, the impairment testing of goodwill. If the fair value of these intangible
assets decreased, we could be required to incur an impairment charge that could
significantly adversely impact our reported results of operations and stockholders
equity. Our common stock traded at a price that resulted in a market capitalization of
$195.0 million less than total stockholders equity as of June 30, 2006 and our market
capitalization has been less than total stockholders equity since April 2005. If we
are required to record additional impairments of these intangible assets in future
periods, it would reduce net income, which in turn could have a material adverse effect
on the results of operations and the trading price of LIN TV Corp.s class A common
stock.
    
    We repurchased 1,437,700 shares of common stock for approximately $13.2 million for
the six months ended June 30, 2006, pursuant to our board of directors approved stock
repurchase program.
    
    On July 12, 2006, we announced the appointment of Vincent L. Sadusky as President
and Chief Executive Officer. In connection with the retirement of our former Chief
Executive Officer, we recorded a $6.9 million expense, including $1.3 million of
stock-based compensation.
    
    We recorded an impairment of our investment of $5.0 million in U.S. Digital Television
Incorporated (USDTV), which filed for bankruptcy protection on July 11, 2006.
 Industry Trends
  
    
    Political revenues from elections and revenues from Olympic games, which generally
occur in even years, create fluctuations in our operating results when comparing first
quarter of 2006 with the same period of 2005. According to the Television Bureau of
Advertising, U.S. television station advertising increased 4.6% in the second quarter
of 2006 compared to a decrease of 4.7% in the
 18




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##### Table of Contents



second quarter of 2005 and increased 5.8% in the first half of 2006 compared to a
decrease of 3.6% in the first half of 2005. (source: Television Bureau of Advertising).
    
    Automotive-related advertising represented approximately 25% of our total net
revenues for each of the six months ended June 30, 2006 and 2005. A significant change
in these advertising revenues could materially affect our future results of operations.
    
    On June 15, 2006, President George W. Bush signed the Broadcast Decency Enforcement
Act into law. The new law substantially increases the maximum fine that the FCC can
impose on TV and radio broadcasters from $32,500 to $325,000 per incident of indecent
programming.
 Critical Accounting Policies and Estimates
   Off-Balance Sheet Arrangements
 GECC Note
  19




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##### Table of Contents



Future Program Rights Agreements
  Subsequent Events
 Acquisition of WBPG.
 Bankruptcy of USDTV.
 Appointment of a new Chief Executive Officer
 Acquisition of KASA.
 20




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##### Table of Contents



Results of Operations
  Three Months Ended
    
    
    
    
    
    
    Six Months EndedJune 30,
    
    
    %
    
    
    June 30,
    
    
    %2006
    
    
    2005
    
    
    Change
    
    
    2006
    
    
    2005
    
    
    ChangeNational time sales (before agency commissions)
    
    $
    39,541
    
    
    $
    35,688
    
    
    
    11
    %
    
    $
    74,499
    
    
    $
    63,616
    
    
    
    17
    %Local time sales (before agency commissions)
    
    
    84,592
    
    
    
    72,319
    
    
    
    17
    %
    
    
    159,594
    
    
    
    129,723
    
    
    
    23
    %Political time sales (before agency commissions)
    
    
    5,151
    
    
    
    1,145
    
    
    
    350
    %
    
    
    7,001
    
    
    
    1,429
    
    
    
    390
    %Agency commissions (related to time sales)
    
    
    (19,742
    )
    
    
    (17,688
    )
    
    
    12
    %
    
    
    (36,728
    )
    
    
    (31,248
    )
    
    
    18
    %Digital revenues
    
    
    1,962
    
    
    
    1,413
    
    
    
    39
    %
    
    
    3,889
    
    
    
    2,717
    
    
    
    43
    %Network compensation
    
    
    484
    
    
    
    2,781
    
    
    
    -83
    %
    
    
    1,302
    
    
    
    5,601
    
    
    
    -77
    %Barter revenue
    
    
    2,538
    
    
    
    2,457
    
    
    
    3
    %
    
    
    5,106
    
    
    
    4,323
    
    
    
    18
    %Other revenue
    
    
    879
    
    
    
    895
    
    
    
    -2
    %
    
    
    1,556
    
    
    
    1,693
    
    
    
    -8
    %Net revenue
    
    
    115,405
    
    
    
    99,010
    
    
    
    17
    %
    
    
    216,219
    
    
    
    177,854
    
    
    
    22
    %Operating costs and expenses:Direct operating1
    
    
    32,798
    
    
    
    27,628
    
    
    
    19
    %
    
    
    66,145
    
    
    
    54,044
    
    
    
    22
    %Selling, general and administrative
    
    
    33,807
    
    
    
    26,884
    
    
    
    26
    %
    
    
    67,283
    
    
    
    51,646
    
    
    
    30
    %Amortization of program rights
    
    
    7,636
    
    
    
    6,534
    
    
    
    17
    %
    
    
    15,054
    
    
    
    12,389
    
    
    
    22
    %Corporate
    
    
    12,807
    
    
    
    5,099
    
    
    
    151
    %
    
    
    18,579
    
    
    
    10,354
    
    
    
    79
    %Impairment of broadcast licenses and goodwill
    
    
    333,553
    
    
    
    
    
    
    
    n/a
    
    
    
    333,553
    
    
    
    
    
    
    
    n/aDepreciation and amortization of
intangible assets
    
    
    9,913
    
    
    
    8,873
    
    
    
    12
    %
    
    
    21,865
    
    
    
    16,912
    
    
    
    29
    %Total operating costs and expenses
    
    
    430,514
    
    
    
    75,018
    
    
    
    474
    %
    
    
    522,479
    
    
    
    145,345
    
    
    
    259
    %Operating (loss) income
    
    $
    (315,109
    )
    
    $
    23,992
    
    
    
    n/a
    
    
    $
    (306,260
    )
    
    $
    32,509
    
    
    
    n/a
 
 1
    
    Excluding depreciation of $8.8 million and $8.5 million for the three months ended June 30, 2006 and 2005, respectively, and excluding depreciation
of $19.3 million and $16.2 million for the six months ended June 30, 2006 and 2005, respectively. Net revenues
   21




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##### Table of Contents



Operating Costs and Expenses
 Direct operating expenses (excluding depreciation and amortization of intangible assets),
  Selling, general and administrative expenses,
  Amortization of program rights
  Corporate expenses
  Depreciation and amortization of intangible assets
 Impairment of broadcast licenses and goodwill.
 22




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Other (Income) Expense
 Interest expense
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Components of interest expense, including discount and financing fee amortization:Credit Facility
    
    $
    5,403
    
    
    $
    2,420
    
    
    $
    10,472
    
    
    $
    4,7646 1/2% Senior Subordinated Notes
    
    
    6,405
    
    
    
    6,465
    
    
    
    12,741
    
    
    
    11,8726 1/2% Senior Subordinated Notes-Class B
    
    
    3,714
    
    
    
    
    
    
    
    7,392
    
    
    
    2.50% Exchangeable Senior Subordinated Debentures
    
    
    1,879
    
    
    
    1,896
    
    
    
    3,750
    
    
    
    3,7668% Senior Notes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,501Other interest (income) expense, net
    
    
    (21
    )
    
    
    54
    
    
    
    (227
    )
    
    
    (158
    )Total interest expense, net
    
    $
    17,380
    
    
    $
    10,835
    
    
    $
    34,128
    
    
    $
    21,745
 Interest expense, net
 23




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##### Table of Contents



Gain on derivative instruments
  Other Items
  Provision for Income Taxes
  Liquidity and Capital Resources
  24




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Description of Indebtedness
  June 30,
    
    
    December 31,2006
    
    
    2005Credit Facility
    
    $
    321,000
    
    
    $
    316,0006 1/2% Senior Subordinated Notes due 2013
    
    
    375,000
    
    
    
    375,000$190,000, 6 1/2% Senior Subordinated Notes due 2013 - Class B (net of discount of $13,349 and
$14,283 at June 30, 2006 and December 31, 2005, respectively)
    
    
    176,651
    
    
    
    175,717$125,000, 2.50% Exchangeable Senior Subordinated Debentures due
2033 (net of discount of $7,898 and $10,003 at June 30, 2006 and
December 31, 2005, respectively)
    
    
    117,102
    
    
    
    114,997Total long-term debt
    
    $
    989,753
    
    
    $
    981,714
    1 2 1 2
 1 2 1 2
 1 2 1 2 1 2 1 2
 25




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##### Table of Contents



Contractual Obligations
  July December2006
    
    
    2007-2008
    
    
    2009-2011
    
    
    Thereafter
    
    
    TotalPrincipal payments and mandatory
redemptions on debt(1)
    
    $
    
    
    
    $
    51,563
    
    
    $
    269,437
    
    
    $
    690,000
    
    
    $
    1,011,000Cash interest on debt(2)
    
    
    30,530
    
    
    
    116,995
    
    
    
    142,567
    
    
    
    118,821
    
    
    
    408,913Program payments(3)
    
    
    14,992
    
    
    
    46,981
    
    
    
    27,353
    
    
    
    4,285
    
    
    
    93,611Operating leases(4)
    
    
    3,076
    
    
    
    3,873
    
    
    
    3,041
    
    
    
    4,124
    
    
    
    14,114Operating agreements(5)
    
    
    10,711
    
    
    
    6,690
    
    
    
    1,144
    
    
    
    916
    
    
    
    19,461Local marketing agreement payments (5)
    
    
    319
    
    
    
    423
    
    
    
    
    
    
    
    
    
    
    
    742Acquisitions of broadcast licenses and operating
assets(6)(7)
    
    
    3,912
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,912Total
    
    $
    63,540
    
    
    $
    226,525
    
    
    $
    443,542
    
    
    $
    818,146
    
    
    $
    1,551,753
 
 (1)
    
    We are obligated to repay the revolving portion of our credit facility on November 4,
2011. We are required to make mandatory payments on our term loans in the amount of $10.3
million per quarter starting December 31, 2007 and additional payments based on certain
debt transactions or the disposal of certain assets. We are obligated to repay the
remaining balance of our term loans on November 4, 2011. We are obligated to pay our 61/2%
Senior Subordinated Notes and our 61/2% Senior Subordinated Notes  Class B in May 2013 and
our 2.50% Exchangeable Senior Subordinated Debentures in May 2033. The holders of our 2.50%
Exchangeable Senior Subordinated Debentures can require us to purchase all or a portion of
the debentures on each of the following dates: May 15, 2008, 2013, 2018, 2023 and 2028.(2)
    
    We have contractual obligations to pay cash interest on our credit facility through
2011, our 61/2% Senior Subordinated Notes and our 61/2% Senior Subordinated Notes  Class B
through 2013, and our 2.50% Exchangeable Senior Subordinated Debentures through 2033. We
may pay contingent interest to holders of the debentures during any six-month period
commencing May 15, 2008, if the average trading price of the debentures for a five trading
day measurement period immediately preceding the first day of the applicable six-month
period equals 120% or more of the principal amount of the debentures. The contingent
interest equals 0.25% per annum per $1,000 principal amount of debentures. In addition, we
are obligated to pay commitment fees of 0.25% to 0.50% on the unused portion of the
revolving credit facility based on obtaining certain debt ratios.(3)
    
    We have entered into commitments to purchase future syndicated news, entertainment, and
sports programming. We have recorded $38.1 million of program obligations as of June 30,
2006 and have unrecorded commitments of $55.5 million for programming that is not available
to air as of June 30, 2006.(4)
    
    We lease land, buildings, vehicles and equipment under non-cancelable operating lease
agreements.(5)
    
    We have entered into operating agreements for ratings services, news services, software
maintenance agreements, equipment maintenance agreements, and other agreements related to
the routine operation of our television stations.(6)
    
    We have entered into local marketing agreements to operate KNVA-TV, WNAC-TV and WBPG-TV
for a fixed amount totaling $0.7 million as of June 30, 2006.(7)
    
    We have entered into option agreements that would enable us to purchase KNVA-TV and
WNAC-TV for a fixed amount under certain conditions in which we are committed to pay
minimum future fees totaling $0.9 million as of June 30, 2006. We have also entered into
an asset purchase agreement to acquire WBPG-TV for $3.0 million, which closed on July 7,
2006. 26




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##### Table of Contents



Net cash provided by operating activities
 Net cash used in investing activities
 Net cash used in financing activities 1 2
  Recent Accounting Pronouncements
    27




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28




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk
       29




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Item 4. Controls and Procedures
   30




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##### Table of Contents



Part II: Other Information
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  We have a material amount of intangible assets, and if we are required to write down intangible
assets in future periods, it would reduce net income, which in turn could materially and adversely
affect the results of operations and the trading price of LIN TV Corp.s class A common stock.
     31




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##### Table of Contents



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  Maximum Number (orApproximate DollarTotal Number of Shares
    
    Value) of Shares thatTotal Number of
    
    
    
    
    
    Purchased as Part of
    
    May Yet Be PurchasedShares
    
    Average Price Paid per
    
    Publicly Announced
    
    Under the Plans orPeriod
    
    Purchased
    
    Share
    
    Plans or Programs
    
    Programs(in thousands)April 1-30, 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    189,572May 1-31, 2006
    
    
    509,100
    
    
    $
    9.06
    
    
    
    509,100
    
    
    
    184,962June 1-30, 2006
    
    
    334,100
    
    
    
    8.88
    
    
    
    334,100
    
    
    
    181,995Total
    
    
    843,200
    
    
    
    8.99
    
    
    
    843,200
    
    
    
    181,995
 
 Item 4. Submission of Matters to a Vote of Security Holders
   Nominee
    
    Votes For
    
    Votes WithheldRoyal W. Carson, III
    
    
    88,132,154
    
    
    
    1,354,792Gary R. Chapman
    
    
    88,678,454
    
    
    
    808,492Wilma H. Jordan
    
    
    88,121,209
    
    
    
    1,365,737
  Votes For
    
    Votes Against
    
    Abstain88,363,978
    
    
    1,058,144
    
    
    
    64,824
  Votes For
    
    Votes Against
    
    Abstain88,816,409
    
    
    662,522
    
    
    
    8,015
 32




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##### Table of Contents



Item 6. Exhibits
 3.1
    
    Second Amended and Restated Certificate of Incorporation of LIN
TV Corp., as amended (filed as Exhibit 3.1 to the Companys
Quarterly Report on Form 10-Q filed as of August 9, 2004 (File
Nos. 001-31311 and 000-25206) and incorporated by reference
herein)3.2
    
    Second Amended and Restated Bylaws of LIN TV Corp., as amended
(filed as Exhibit 3.2 to the Companys Quarterly Report on Form
10-Q filed as of August 9, 2004 (File Nos. 001-31311 and
000-25206) and incorporated by reference herein)3.3
    
    Restated Certificate of Incorporation of LIN Television
Corporation (filed as Exhibit 3.1 to the Quarterly Report on Form
10-Q of LIN TV Corp. and LIN Television Corporation for the
fiscal quarter ended June 30, 2003 (File No. 000-25206) and
incorporated by reference herein)3.4
    
    Restated Bylaws of LIN Television Corporation (filed as Exhibit
3.4 to the Registration Statement on Form S-1 of LIN Television
Corporation and LIN Holding Corp. (Registration No. 333-54003)
and incorporated by reference herein)4.1
    
    Specimen of stock certificate representing LIN TV Corp. Class A
Common stock, par value $.01 per share (filed as Exhibit 4.1 to
LIN TV Corp.s Registration Statement on Form S-1 (Registration
No. 333-83068) and incorporated by reference herein)4.2
    
    Indenture, dated as of May 12, 2003, among LIN Television
Corporation, the guarantors named therein and the Bank of New
York, as Trustee, relating to the 6 1/2 % Senior
Subordinated Notes (filed as Exhibit 4.1 to the Companys Current
Report on Form 8-K filed as of May 14, 2003 (File Nos. 001-31311
and 000-25206) and incorporated by reference herein)4.3
    
    Indenture, dated as of May 12, 2003, among LIN Television
Corporation, the guarantors named therein and the Bank of New
York, as Trustee, relating to the 2.50% Senior Subordinated
Debentures (filed as Exhibit 4.2 to the Companys Current Report
on Form 8-K filed as of May 14, 2003 (File Nos. 001-31311 and
000-25206) and incorporated by reference herein)4.4
    
    Indenture, dated as of September 29, 2005, among LIN Television
Corporation, the guarantors listed therein and The Bank of New
York Trust Company, N.A., as Trustee, relating to the 6
1/2 % Senior Subordinated Notes due 2013  Class B of LIN
Television Corporation (filed as Exhibit 4.1 to the Companys
Current Report on Form 8-K filed as of October 5, 2005 (File Nos.
001-31311 and 000- 25206) and incorporated by reference herein)4.5
    
    Supplemental Indenture, dated as of March 10, 2005, among WAPA
America, Inc., WWHO Broadcasting, LLC, LIN Television Corporation
and The Bank of New York, as Trustee, for the 2.50% Exchangeable
Senior Subordinated Debentures due 2033 (filed as Exhibit 4.5 to
the Companys Quarterly Report on Form 10-Q filed as of November
9, 2005 (File Nos. 001-31311 and 000-25206) and incorporated by
reference herein)
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##### Table of Contents



4.6
    
    Supplemental Indenture, dated as of March 10, 2005, among WAPA
America, Inc., WWHO Broadcasting, LLC, LIN Television Corporation
and The Bank of New York, as Trustee, for the 6 1/2 %
Senior Subordinated Notes due 2013 (filed as Exhibit 4.6 to the
Companys Quarterly Report on Form 10-Q filed as of November 9,
2005 (File Nos. 001-31311 and 000-25206) and incorporated by
reference herein)4.7
    
    Supplemental Indenture, dated as of March 16, 2006, among LIN of
Alabama, LLC, LIN of Colorado, LLC, LIN of New Mexico, LLC, LIN
of Wisconsin, LLC, and S&E Network, Inc., LIN Television
Corporation and The Bank of New York, as Trustee for the 2.50%
Exchangeable Senior Subordinated Debentures due 2033 (filed as
Exhibit 4.7 to the Companys Annual Report on Form 10-K filed as
of March 16, 2006 (File Nos. 001-31311 and 000-25206) and
incorporated by reference herein)4.8
    
    Supplemental Indenture, dated as of March 16, 2006, among LIN of
Alabama, LLC, LIN of Colorado, LLC, LIN of New Mexico, LLC, LIN
of Wisconsin, LLC, and S&E Network, Inc., LIN Television
Corporation and The Bank of New York, as Trustee for the 6
1/2 % Senior Subordinated Notes due 2013 (filed as
Exhibit 4.8 to the Companys Annual Report on Form 10-K filed as
of March 16, 2006 (File Nos. 001-31311 and 000-25206) and
incorporated by reference herein)31.1
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002 of the Chief Executive Officer and Chief Financial
Officer of LIN TV Corp.31.2
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002 of the Chief Executive Officer and Chief Financial
Officer of LIN Television Corporation.32.1
    
    Certification pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 of the Chief Executive Officer and Chief Financial
Officer of LIN TV Corp.32.2
    
    Certification pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 of the Chief Executive Officer and Chief Financial
Officer of LIN Television Corporation
 34




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##### Table of Contents



SIGNATURES
  LIN TV CORP.LIN TELEVISION CORPORATIONDated: August 9, 2006
    
    By:
    
    /s/ Vincent L. SaduskyVincent L. SaduskyPresident, Chief Executive Officerand Chief Financial Officer(Principal Financial Officer)By:
    
    /s/ William A. CunninghamWilliam A. CunninghamVice president and Controller(Principal Accounting Officer)
 35




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##### Table of Contents



Item 1. Financial StatementsLIN Television CorporationCondensed Consolidated Balance Sheets
    
    
    37Condensed Consolidated Statements of Operations
    
    
    38Condensed Consolidated Statements of Cash Flows
    
    
    39Notes to Condensed Consolidated Financial Statements
    
    
    40
 36




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##### Table of Contents



LIN Television Corporation
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 June 30,
    
    
    December 31,2006
    
    
    2005(Unaudited)(In thousands, except share data)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    11,571
    
    
    $
    11,135Accounts receivable, less allowance for doubtful accounts (2006 - $1,448; 2005 - $1,148)
    
    
    90,918
    
    
    
    85,575Program rights
    
    
    13,678
    
    
    
    25,960Other current assets
    
    
    5,789
    
    
    
    3,534Total current assets
    
    
    121,956
    
    
    
    126,204Property and equipment, net
    
    
    223,902
    
    
    
    237,676Deferred financing costs
    
    
    19,009
    
    
    
    20,173Equity investments
    
    
    62,898
    
    
    
    63,526Program rights
    
    
    19,551
    
    
    
    7,307Other assets
    
    
    15,217
    
    
    
    19,766Goodwill
    
    
    528,083
    
    
    
    623,383Broadcast licenses and other intangible assets, net
    
    
    1,067,768
    
    
    
    1,308,598Total assets
    
    $
    2,058,384
    
    
    $
    2,406,633LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    7,372
    
    
    $
    8,292Accrued interest expense
    
    
    5,224
    
    
    
    6,553Accrued sales volume discount
    
    
    2,016
    
    
    
    5,287Other accrued expenses
    
    
    29,898
    
    
    
    23,480Program obligations
    
    
    19,961
    
    
    
    30,375Total current liabilities
    
    
    64,471
    
    
    
    73,987Long-term debt
    
    
    989,753
    
    
    
    981,714Deferred income taxes, net
    
    
    347,232
    
    
    
    439,619Program obligations
    
    
    18,121
    
    
    
    7,343Other liabilities
    
    
    54,709
    
    
    
    60,540Total liabilities
    
    
    1,474,286
    
    
    
    1,563,203Preferred stock of Banks Broadcasting, Inc., $0.01 par value, 179,322 shares
issued and outstanding at June 30, 2006 and December 31, 2005
    
    
    10,367
    
    
    
    14,558Stockholders equity:Investment in parent companys common stock, at cost
    
    
    (18,005
    )
    
    
    (4,777
    )Additional paid-in capital
    
    
    1,083,552
    
    
    
    1,077,225Accumulated deficit
    
    
    (476,584
    )
    
    
    (227,908
    )Accumulated other comprehensive loss
    
    
    (15,232
    )
    
    
    (15,668
    )Total stockholders equity
    
    
    573,731
    
    
    
    828,872Total liabilities, preferred stock and stockholders equity
    
    $
    2,058,384
    
    
    $
    2,406,633
  37




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##### Table of Contents



LIN Television Corporation
 
  (In thousands)
  Three Months Ended June 30,
    
    
    Six Months Ended June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Net revenues
    
    $
    115,405
    
    
    $
    99,010
    
    
    $
    216,219
    
    
    $
    177,854Operating costs and expenses:Direct operating (excluding depreciation of
$8.8 million and $8.5 million for the three
months ended June 30, 2006 and 2005,
respectively, and $19.3 million and $16.2
million for the six months ended June 30,
2006 and 2005, respectively)
    
    
    32,798
    
    
    
    27,628
    
    
    
    66,145
    
    
    
    54,044Selling, general and administrative
    
    
    33,807
    
    
    
    26,884
    
    
    
    67,283
    
    
    
    51,646Amortization of program rights
    
    
    7,636
    
    
    
    6,534
    
    
    
    15,054
    
    
    
    12,389Corporate
    
    
    12,807
    
    
    
    5,099
    
    
    
    18,579
    
    
    
    10,354Impairment of broadcast licenses and goodwill
    
    
    333,553
    
    
    
    
    
    
    
    333,553
    
    
    
    Depreciation and amortization of intangible assets
    
    
    9,913
    
    
    
    8,873
    
    
    
    21,865
    
    
    
    16,912Total operating costs
    
    
    430,514
    
    
    
    75,018
    
    
    
    522,479
    
    
    
    145,345Operating (loss) income
    
    
    (315,109
    )
    
    
    23,992
    
    
    
    (306,260
    )
    
    
    32,509Other (income) expense:Interest expense, net
    
    
    17,380
    
    
    
    10,835
    
    
    
    34,128
    
    
    
    21,745Share of loss (income) in equity investments
    
    
    571
    
    
    
    (1,463
    )
    
    
    (1,009
    )
    
    
    (1,709
    )Minority interest in loss of Banks Broadcasting, Inc.
    
    
    (3,952
    )
    
    
    (74
    )
    
    
    (4,191
    )
    
    
    (286
    )Loss (gain) on derivative instruments
    
    
    1,538
    
    
    
    (2,096
    )
    
    
    492
    
    
    
    (1,595
    )Loss on extinguishment of debt
    
    
    
    
    
    
    21
    
    
    
    
    
    
    
    12,330Other, net
    
    
    5,129
    
    
    
    (235
    )
    
    
    5,139
    
    
    
    166Total other expense, net
    
    
    20,666
    
    
    
    6,988
    
    
    
    34,559
    
    
    
    30,651(Loss) income before (benefit from) provision for income taxes
    
    
    (335,775
    )
    
    
    17,004
    
    
    
    (340,819
    )
    
    
    1,858(Benefit from) provision for income taxes
    
    
    (91,418
    )
    
    
    6,909
    
    
    
    (92,143
    )
    
    
    2,083Net (loss) income
    
    $
    (244,357
    )
    
    $
    10,095
    
    
    $
    (248,676
    )
    
    $
    (225
    )
  38




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##### Table of Contents



LIN Television Corporation
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (unaudited)
 Six months ended June 30,2006
    
    
    2005(In thousands)OPERATING ACTIVITIES:Net loss
    
    $
    (248,676
    )
    
    $
    (225
    )Adjustment to reconcile net loss to net cash provided by operating activities:Depreciation and amortization of intangible assets
    
    
    21,865
    
    
    
    16,912Impairment of broadcast licenses and goodwill
    
    
    333,553
    
    
    
    Amortization of financing costs and note discounts
    
    
    4,327
    
    
    
    3,207Amortization of program rights
    
    
    15,054
    
    
    
    12,389Program payments
    
    
    (15,321
    )
    
    
    (13,817
    )Loss on extinguishment of debt
    
    
    
    
    
    
    12,330(Gain) loss on derivative instruments
    
    
    492
    
    
    
    (1,595
    )Share of income in equity investments
    
    
    (1,009
    )
    
    
    (1,709
    )Deferred income taxes, net
    
    
    (92,387
    )
    
    
    1,168Stock-based compensation
    
    
    5,578
    
    
    
    1,753Loss on investment in USDTV
    
    
    5,000
    
    
    
    Other, net
    
    
    (3,435
    )
    
    
    547Changes in operating assets and liabilities, net of acquisitions and disposals:Accounts receivable
    
    
    (5,643
    )
    
    
    (4,585
    )Other assets
    
    
    (765
    )
    
    
    (850
    )Accounts payable
    
    
    (920
    )
    
    
    (2,220
    )Accrued interest expense
    
    
    (1,329
    )
    
    
    (3,100
    )Accrued sales volume discount
    
    
    (3,271
    )
    
    
    (4,002
    )Other liabilities
    
    
    1,183
    
    
    
    (1,798
    )Net cash provided by operating activities
    
    
    14,296
    
    
    
    14,405INVESTING ACTIVITIES:Capital expenditures
    
    
    (5,569
    )
    
    
    (5,213
    )Capital contribution from minority interest in Banks Broadcasting, Inc.
    
    
    
    
    
    
    550Distributions from equity investments
    
    
    2,037
    
    
    
    3,055Payments for business combinations, net of cash acquired
    
    
    
    
    
    
    (85,000
    )USDTV Investment and other investments, net
    
    
    (2,304
    )
    
    
    (218
    )Net cash used in investing activities
    
    
    (5,836
    )
    
    
    (86,826
    )FINANCING ACTIVITIES:Issuance of common stock under employee stock plans
    
    
    328
    
    
    
    1,650Proceeds from issuance of long-term debt
    
    
    
    
    
    
    345,000Long-term debt financing costs
    
    
    (124
    )
    
    
    (6,018
    )Proceeds from revolver debt
    
    
    5,000
    
    
    
    60,000Principal payments on long-term debt
    
    
    
    
    
    
    (324,940
    )Investment in parent companys common stock
    
    
    (13,228
    )
    
    
    Cash expenses associated with early extinguishment of debt
    
    
    
    
    
    
    (7,108
    )Net cash (used in) provided by financing activities
    
    
    (8,024
    )
    
    
    68,584Net increase
(decrease) in cash and cash equivalents
    
    
    436
    
    
    
    (3,837
    )Cash and cash equivalents at the beginning of the period
    
    
    11,135
    
    
    
    14,797Cash and cash equivalents at the end of the period
    
    $
    11,571
    
    
    $
    10,960
  39




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##### Table of Contents



LIN TELEVISION CORPORATION
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Note 1  Basis of Presentation
       st
  40




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##### Table of Contents



Note 2  Stock-Based Compensation
   Three Months Ended
    
    
    Six Months EndedJune 30, 2005
    
    
    June 30, 2005Net income (loss), as reported
    
    $
    10,095
    
    
    $
    (225
    )Add: Stock-based employee compensation expense,
included in reported net income (loss), net of related tax effect
    
    
    382
    
    
    
    1,052Deduct: Total stock-based employee compensation
expense determined under the fair value based
method for all awards, net of related tax effect
    
    
    (472
    )
    
    
    (822
    )Pro forma net income
    
    $
    10,005
    
    
    $
    5
  Note 3  Acquisitions
 Acquisition Reserves:
 41




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##### Table of Contents



Balance as ofDecember 31,
    
    
    
    
    
    
    
    
    
    
    Balance as ofAcquisition Date
    
    2005
    
    
    Payments
    
    
    Adjustments
    
    
    June 30, 2006Acquisition of Sunrise Television Corp.
    
    May 2, 2002
    
    
    211
    
    
    
    54
    
    
    
    
    
    
    
    157Stations acquired from Viacom
    
    March 31, 2005
    
    
    295
    
    
    
    
    
    
    
    
    
    
    
    295Stations acquired from Emmis
    
    November 30, 2005
    
    $
    7,910
    
    
    $
    652
    
    
    $
    (41
    )
    
    
    7,217$
    8,416
    
    
    $
    706
    
    
    $
    (41
    )
    
    $
    7,669
  Pro Forma:
 Three MonthsEnded June 30,
    
    Six Months Ended2005
    
    June 30, 2005Net revenues
    
    $
    114,361
    
    
    $
    210,094Operating income
    
    
    27,545
    
    
    
    35,464Net income
    
    
    10,780
    
    
    
    (2,463
    )
 Note 4  Investments
  June 30,
    
    
    December 31,2006
    
    
    2005NBC Universal joint venture
    
    $
    55,821
    
    
    $
    54,803WAND (TV) Partnership
    
    
    6,558
    
    
    
    8,595Other
    
    
    519
    
    
    
    128$
    62,898
    
    
    $
    63,526
 42




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##### Table of Contents



Joint Venture with NBC Universal:
  Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2006
    
    2005
    
    2006
    
    2005Revenue
    
    $
    23,206
    
    
    $
    23,394
    
    
    $
    47,847
    
    
    $
    41,700Other expense
    
    
    (16,344
    )
    
    
    (16,379
    )
    
    
    (32,853
    )
    
    
    (33,233
    )Net income
    
    
    6,862
    
    
    
    7,015
    
    
    
    14,994
    
    
    
    8,467
 June 30,
    
    December 31,2006
    
    2005Current assets
    
    $
    12,071
    
    
    $
    10,617Non-current assets
    
    
    236,015
    
    
    
    232,075Current liabilities
    
    
    1,087
    
    
    
    724Non-current liabilities
    
    
    815,500
    
    
    
    815,500
  43




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##### Table of Contents



WAND (TV) Partnership:
  Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2006
    
    2005
    
    2006
    
    2005Net revenues
    
    $
    1,922
    
    
    $
    1,636
    
    
    $
    3,816
    
    
    $
    3,145Operating (loss) income (1)
    
    
    (5,890
    )
    
    
    88
    
    
    
    (6,122
    )
    
    
    (74
    )Net (loss) income
    
    
    (5,884
    )
    
    
    98
    
    
    
    (6,112
    )
    
    
    (51
    )
 June 30,
    
    December 31,2006
    
    2005Current assets
    
    $
    2,387
    
    
    $
    2,398Non-current assets
    
    
    14,164
    
    
    
    20,702Current liabilities
    
    
    850
    
    
    
    1,276Non-current liabilities
    
    
    3
    
    
    
    14
 
 (1)
    
    Includes an impairment charge of $5.9 million relating to the broadcast license of WAND-TV. 44




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##### Table of Contents



Note 5  Intangible Assets
  EstimatedRemaining Useful
    
    
    June 30,
    
    
    December 31,Life (Years)
    
    
    2006
    
    
    2005Amortizing Intangible Assets:LMA purchase options
    
    
    1
    
    
    $
    4,212
    
    
    $
    4,212Network affiliations
    
    
    1
    
    
    
    1,753
    
    
    
    1,753Other intangibles
    
    
    1-27
    
    
    
    6,025
    
    
    
    6,025Accumulated amortization
    
    
    
    
    
    
    (7,227
    )
    
    
    (4,686
    )4,763
    
    
    
    7,304Indefinite-Lived Intangible Assets:Broadcast licenses
    
    
    
    
    
    
    1,063,005
    
    
    
    1,301,294Goodwill
    
    
    
    
    
    
    528,083
    
    
    
    623,383$
    1,591,088
    
    
    $
    1,924,677Goodwill
    
    
    
    
    
    
    528,083
    
    
    
    623,383Broadcast licenses and other intangible assets, net
    
    
    
    
    
    
    1,067,768
    
    
    
    1,308,598Total intangible assets
    
    
    
    
    
    $
    1,595,851
    
    
    $
    1,931,981
  Three Months
    
    Six Months
    
    Estimated amortization expenseEnded June 30,
    
    Ended June 30,
    
    For the year ended December 31,2005
    
    2006
    
    2005
    
    2006
    
    2006
    
    2007
    
    2008
    
    2009
    
    2010
    
    ThereafterAmortization expense
    
    $
    400
    
    
    $
    1,159
    
    
    $
    666
    
    
    $
    2,541
    
    
    $
    1,427
    
    
    $
    434
    
    
    $
    219
    
    
    $
    37
    
    
    $
    36
    
    
    $
    2,610
   45




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##### Table of Contents



Note 6  Debt
  June 30,
    
    
    December 31,2006
    
    
    2005Credit Facility
    
    $
    321,000
    
    
    $
    316,0006 1/2% Senior Subordinated Notes due 2013
    
    
    375,000
    
    
    
    375,000$190,000, 6 1/2% Senior Subordinated Notes  Class B due 2013
(net of discount of $13,349 and $14,283 at June 30, 2006
and December 31, 2005, respectively)
    
    
    176,651
    
    
    
    175,717$125,000, 2.50% Exchangeable Senior Subordinated Debentures due
2033 (net of discount of $7,898 and $10,003 at June 30, 2006
and December 31, 2005, respectively)
    
    
    117,102
    
    
    
    114,997Total long-term debt
    
    $
    989,753
    
    
    $
    981,714
 Note 7  Related Party Transactions
 Financial Advisory Agreement
 Centennial Cable of Puerto Rico:
 Note 8  Contingencies
 GECC Note.
 46




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##### Table of Contents




    
    GECC could force LIN TV Corp. to sell the stock of LIN Television held by LIN TV Corp. to
satisfy outstanding amounts under the GECC note;
    
    if more than 50% of the ownership of LIN Television had to be sold to satisfy the GECC
note, it could cause an acceleration of the Companys credit facility and notes; and
    
    if the GECC note is prepaid because of an acceleration on default or otherwise, or if
the note is repaid at maturity, the Company may incur a substantial tax liability.
  Note 9  Retirement Plans
   Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Service cost
    
    $
    625
    
    
    $
    549
    
    
    $
    1,250
    
    
    $
    1,098Interest cost
    
    
    1,400
    
    
    
    1,350
    
    
    
    2,800
    
    
    
    2,700Expected return on plan assets
    
    
    (1,475
    )
    
    
    (1,435
    )
    
    
    (2,950
    )
    
    
    (2,870
    )Amortization of prior service cost
    
    
    30
    
    
    
    30
    
    
    
    60
    
    
    
    60Amortization of net loss
    
    
    320
    
    
    
    241
    
    
    
    640
    
    
    
    482Net periodic benefit cost
    
    $
    900
    
    
    $
    735
    
    
    $
    1,800
    
    
    $
    1,470
  Note 10  Share Repurchase Program
  47




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##### Table of Contents



Note 11  Derivative Financial Instruments
 Accounting Policy
  Note 12  Comprehensive (Loss) Income
  Three Months Ended June 30,
    
    Six Months Ended June 30,2006
    
    2005
    
    2006
    
    2005Net (loss) income
    
    $
    (244,357
    )
    
    $
    10,095
    
    
    $
    (248,676
    )
    
    $
    (225
    )Other comprehensive income, net of tax:Change in the fair market value of hedged items
    
    
    436
    
    
    
    
    
    
    
    436
    
    
    
    Comprehensive (loss) income
    
    
    (243,921
    )
    
    
    10,095
    
    
    
    (248,240
    )
    
    
    (225
    )
 48




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##### Table of Contents



Note 13  Recent Accounting Pronouncements
      49




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##### Table of Contents



Note 15  Subsequent Events
 Acquisition of WBPG.
 Bankruptcy of USDTV.
 Appointment of a new Chief Executive Officer
 Acquisition of KASA.
 50