##### Table of Contents









UNITED STATES OF AMERICA

SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


Form 10-Q

|  |  |                                                                                             
|- |  | --------------------------------------------------------------------------------------------
|þ |  | QUARTERLY REPORT PURSUANT TO SECTION 13
    OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
| 
|  |  | For the quarterly period ended
    September 30, 2004                                       

|                                                                   |  |                                                                   
|------------------------------------------------------------------ |  | ------------------------------------------------------------------
|Commission file number: 001-31311                                  |  | Commission file number: 000-25206                                 
|LIN TV Corp.                                                       |  | LIN Television Corporation                                        
|(Exact name of registrant as
    specified in its charter)         |  | (Exact name of registrant as
    specified in its charter)        
|                                                                  
|Delaware                                                           |  | Delaware                                                          
|(State or other jurisdiction of
    incorporation or organization) |  | (State or other jurisdiction of
    incorporation or organization)
|                                                                  
|05-0501252                                                         |  | 13-3581627                                                        
|(I.R.S. Employer
    Identification No.)                           |  | (I.R.S. Employer
    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)


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 þ          No o

Indicate by check mark whether the registrant is
an accelerated filer (as defined in Rule 12b-2 of the
Exchange
Act).     Yes þ          No o

This combined Form 10-Q is separately filed
by (i) LIN TV Corp. and (ii) LIN Television
Corporation. LIN Television Corporation meets the conditions set
forth in general instruction H(1) (a) and (b) of
Form 10-Q and is, therefore, filing this form with the
reduced disclosure format permitted by such instruction.

LIN TV Corp. Class A common stock,
$0.01 par value, issued and outstanding at November 1,
2004: 26,896,888 shares.

LIN TV Corp. Class B common stock,
$0.01 par value, issued and outstanding at November 1,
2004: 23,508,119 shares.

LIN TV Corp. Class C common stock,
$0.01 par value, issued and outstanding at November 1,
2004: 2 shares.

LIN Television Corporation common stock,
$0.01 par value, issued and outstanding at November 1,
2004: 1,000 shares.



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TABLE OF CONTENTS

|                                                               |  |                                                                                           |                                                                               |  |    |    | 
|-------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------- |  | -- | -- | 
|                                                               |  |                                                                                           |                                                                               | 
|PART I.  FINANCIAL
    INFORMATION                            
|Item 1.                                                        |  | Financial Statements                                                                      |                                                                               |  |    |   
|                                                               |  |                                                                                           | LIN TV Corp.                                                                  |  |    |    | 
|                                                               |  |                                                                                           | Condensed Consolidated
    Balance Sheets                                     |  |    | 2  | 
|                                                               |  |                                                                                           | Condensed Consolidated
    Statements of Operations                           |  |    | 3  | 
|                                                               |  |                                                                                           | Condensed Consolidated
    Statements of Cash Flows                           |  |    | 4  | 
|                                                               |  |                                                                                           | Notes to Condensed
    Consolidated Financial Statements                      |  |    | 5  | 
|                                                               |  |                                                                                           | See separate index for
    financial statements of LIN Television Corporation |  |    | 24 | 
|Item 2.                                                        |  | Managements Discussion and Analysis of
    Financial Condition and Results of Operations |                                                                               |  | 13 |   
|Item 3.                                                        |  | Quantitative and Qualitative Disclosures about
    Market Risk                            |                                                                               |  | 21 |   
|Item 4.                                                        |  | Controls and Procedures                                                                   |                                                                               |  | 21 |   
|PART II.  OTHER
    INFORMATION                               
|Item 1.                                                        |  | Legal Proceedings                                                                         |                                                                               |  | 21 |   
|Item 6.                                                        |  | Exhibits                                                                                  |                                                                               |  | 21 |   
|Signature Page                                                 |  |                                                                                           | 23                                                                            | 
|EX-10.1 Separation Agreement and General Release              
|EX-31.1 Certification of CEO - LIN TV Corp.                   
|EX-31.2 Certification of CFO - LIN TV Corp.                   
|EX-31.3 Certification of CEO - LIN Television                 
|EX-31.4 Certification of CFO - LIN Television                 
|EX-32.1 Certification Pursuant to Section 906 LIN TV Corp.    
|EX-32.2 Certification Pursuant to Section 906 - LIN Television



1



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##### Table of Contents






PART I: FINANCIAL INFORMATION





|        |                     
|------- | --------------------
|Item 1. | Financial Statements

LIN TV CORP.




CONDENSED CONSOLIDATED BALANCE
SHEETS

|                                                                                                                                                                                                                                                                     |                           |                                   |                                                                 |              |           |           |           |         |           |           | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------- | --------------------------------- | --------------------------------------------------------------- | ------------ | --------- | --------- | --------- | ------- | --------- | --------- | 
|                                                                                                                                                                                                                                                                     |                           | September 30,                     |                                                                 | December 31,
|                                                                                                                                                                                                                                                                     |                           | 2004                              |                                                                 | 2003        
|                                                                                                                                                                                                                                                                     |                           |                                   |                                                                 |             
|                                                                                                                                                                                                                                                                     |                           | (Unaudited)                       |                                                                 |             
|                                                                                                                                                                                                                                                                     |                           |                                  
|                                                                                                                                                                                                                                                                     |                           | (In thousands, except share data)
|ASSETS                                                                                                                                                                                                                                                              
|Current assets:                                                                                                                                                                                                                                                      |                           |                                   |                                                                 |              |           |           |           |        
|Cash and cash equivalents                                                                                                                                                                                                                                            |                           | $                                 | 9,677                                                           |              |           | $         | 9,475     |        
|Accounts receivable, less allowance for doubtful
    accounts (2004 - $1,146; 2003 - $1,698)                                                                                                                                                                         |                           |                                   | 67,024                                                          |              |           |           | 72,340    |        
|Program rights                                                                                                                                                                                                                                                       |                           |                                   | 20,154                                                          |              |           |           | 17,661    |        
|Other current assets                                                                                                                                                                                                                                                 |                           |                                   | 6,634                                                           |              |           |           | 3,216     |        
|                                                                                                                                                                                                                                                                     |                           |                                   |                                                                 |              |           |           |           |        
|                                                                                                                                                                                                                                                                     | Total current assets      |                                   |                                                                 | 103,489      |           |           |           | 102,692 |          
|Property and equipment, net                                                                                                                                                                                                                                          |                           |                                   | 195,972                                                         |              |           |           | 203,049   |        
|Deferred financing costs                                                                                                                                                                                                                                             |                           |                                   | 11,762                                                          |              |           |           | 14,332    |        
|Equity investments                                                                                                                                                                                                                                                   |                           |                                   | 65,844                                                          |              |           |           | 77,305    |        
|Program rights                                                                                                                                                                                                                                                       |                           |                                   | 13,814                                                          |              |           |           | 11,444    |        
|Goodwill                                                                                                                                                                                                                                                             |                           |                                   | 583,097                                                         |              |           |           | 586,269   |        
|Broadcast licenses and other intangible assets,
    net                                                                                                                                                                                                              |                           |                                   | 1,118,103                                                       |              |           |           | 1,105,997 |        
|Other assets                                                                                                                                                                                                                                                         |                           |                                   | 15,587                                                          |              |           |           | 14,822    |        
|                                                                                                                                                                                                                                                                     |                           |                                   |                                                                 |              |           |           |           |        
|                                                                                                                                                                                                                                                                     |                           |                                   | Total assets                                                    |              | $         | 2,107,668 |           |         | $         | 2,115,910 | 
|                                                                                                                                                                                                                                                                     |                           |                                   |                                                                 |              |           |           |           |        
|                                                                                                                                                                                                                                                                    
|LIABILITIES, PREFERRED STOCK AND
    STOCKHOLDERS EQUITY                                                                                                                                                                                                           
|Current liabilities:                                                                                                                                                                                                                                                 |                           |                                   |                                                                 |              |           |           |           |        
|Current portion of long-term debt                                                                                                                                                                                                                                    |                           | $                                 | 11,000                                                          |              |           | $         | 7,000     |        
|Accounts payable                                                                                                                                                                                                                                                     |                           |                                   | 6,282                                                           |              |           |           | 7,169     |        
|Accrued interest expense                                                                                                                                                                                                                                             |                           |                                   | 9,090                                                           |              |           |           | 9,846     |        
|Accrued sales volume discount                                                                                                                                                                                                                                        |                           |                                   | 4,309                                                           |              |           |           | 6,075     |        
|Other accrued expenses                                                                                                                                                                                                                                               |                           |                                   | 18,276                                                          |              |           |           | 13,743    |        
|Program obligations                                                                                                                                                                                                                                                  |                           |                                   | 26,170                                                          |              |           |           | 23,042    |        
|                                                                                                                                                                                                                                                                     |                           |                                   |                                                                 |              |           |           |           |        
|                                                                                                                                                                                                                                                                     | Total current liabilities |                                   |                                                                 | 75,127       |           |           |           | 66,875  |          
|Long-term debt, excluding current portion                                                                                                                                                                                                                            |                           |                                   | 632,303                                                         |              |           |           | 693,367   |        
|Deferred income taxes, net                                                                                                                                                                                                                                           |                           |                                   | 538,500                                                         |              |           |           | 527,588   |        
|Program obligations                                                                                                                                                                                                                                                  |                           |                                   | 13,128                                                          |              |           |           | 11,640    |        
|Other liabilities                                                                                                                                                                                                                                                    |                           |                                   | 39,328                                                          |              |           |           | 54,306    |        
|                                                                                                                                                                                                                                                                     |                           |                                   |                                                                 |              |           |           |           |        
|                                                                                                                                                                                                                                                                     |                           | Total liabilities                 |                                                                 |              | 1,298,386 |           |           |         | 1,353,776 |          
|                                                                                                                                                                                                                                                                     |                           |                                   |                                                                 |              |           |           |           |        
|Preferred stock of Banks Broadcasting, Inc.,
    $0.01 par value, 173,822 issued and outstanding at
    September 30, 2004                                                                                                                                           |                           |                                   | 14,440                                                          |              |           |           |          |        
|                                                                                                                                                                                                                                                                     |                           |                                   |                                                                 |              |           |           |           |        
|Stockholders equity:                                                                                                                                                                                                                                                |                           |                                   |                                                                 |              |           |           |           |        
|Class A common stock, $0.01 par value,
    100,000,000 shares authorized, 26,891,303 shares at
    September 30, 2004 and 26,652,060 shares at
    December 31, 2003, issued and outstanding                                                                         |                           |                                   | 269                                                             |              |           |           | 266       |        
|Class B common stock, $0.01 par value,
    50,000,000 shares authorized, 23,508,119 shares at
    September 30, 2004 and 23,510,137 shares at
    December 31, 2003, issued and outstanding; convertible into
    an equal number of Class A or Class C common stock |                           |                                   | 235                                                             |              |           |           | 235       |        
|Class C common stock, $0.01 par value,
    50,000,000 shares authorized, 2 shares at
    September 30, 2004 and December 31, 2003, issued and
    outstanding; convertible into an equal number of Class A
    common stock                                          |                           |                                   |                                                                |              |           |           |          |        
|Additional paid-in capital                                                                                                                                                                                                                                           |                           |                                   | 1,068,806                                                       |              |           |           | 1,066,897 |        
|Accumulated deficit                                                                                                                                                                                                                                                  |                           |                                   | (264,009                                                        | )            |           |           | (294,805  | )      
|Accumulated other comprehensive loss                                                                                                                                                                                                                                 |                           |                                   | (10,459                                                         | )            |           |           | (10,459   | )      
|                                                                                                                                                                                                                                                                     |                           |                                   |                                                                 |              |           |           |           |        
|                                                                                                                                                                                                                                                                     |                           | Total stockholders equity        |                                                                 |              | 794,842   |           |           |         | 762,134   |          
|                                                                                                                                                                                                                                                                     |                           |                                   |                                                                 |              |           |           |           |        
|                                                                                                                                                                                                                                                                     |                           |                                   | Total liabilities, preferred stock and
    stockholders equity |              | $         | 2,107,668 |           |         | $         | 2,115,910 | 
|                                                                                                                                                                                                                                                                     |                           |                                   |                                                                 |              |           |           |           |        

The accompanying notes are an integral part of
the condensed consolidated financial statements.

2



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##### Table of Contents



LIN TV CORP.




CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS

|                                                                                                                                           |                                                                                                                                                                                                                                                                          |                                              |        |                   |   |      |        |        |   |   |         |         |   |   |         |        |  
|------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------- | ------ | ----------------- | - | ---- | ------ | ------ | - | - | ------- | ------- | - | - | ------- | ------ | -
|                                                                                                                                           |                                                                                                                                                                                                                                                                          |                                              |        |                  
|                                                                                                                                           |                                                                                                                                                                                                                                                                          | Three Months Ended                           |        | Nine Months Ended
|                                                                                                                                           |                                                                                                                                                                                                                                                                          | September 30,                                |        | September 30,    
|                                                                                                                                           |                                                                                                                                                                                                                                                                          |                                              |        |                  
|                                                                                                                                           |                                                                                                                                                                                                                                                                          | 2004                                         |        | 2003              |   | 2004 |        | 2003  
|                                                                                                                                           |                                                                                                                                                                                                                                                                          |                                              |        |                   |   |      |        |       
|                                                                                                                                           |                                                                                                                                                                                                                                                                          |                                             
|                                                                                                                                           |                                                                                                                                                                                                                                                                          | (In thousands, except per share information)
|                                                                                                                                           |                                                                                                                                                                                                                                                                          | (Unaudited)                                 
|Net revenues                                                                                                                               |                                                                                                                                                                                                                                                                          | $                                            | 91,005 |                   |   | $    | 84,278 |        |   | $ | 267,187 |         |   | $ | 247,109 |       
|Operating costs and expenses:                                                                                                              |                                                                                                                                                                                                                                                                          |                                              |        |                   |   |      |        |        |   |   |         |         |   |   |         |       
|                                                                                                                                           | Direct operating (excluding depreciation of
    $7.5 million and $7.1 million for the three months
    ended September 30, 2004 and 2003, respectively, and
    $22.7 million and $22.5 million for the nine months
    ended September 30, 2004 and 2003, respectively) |                                              |        | 25,638            |   |      |        | 24,970 |   |   |         | 75,658  |   |   |         | 73,933 |  
|                                                                                                                                           | Selling, general and administrative                                                                                                                                                                                                                                      |                                              |        | 22,737            |   |      |        | 21,751 |   |   |         | 69,725  |   |   |         | 64,982 |  
|                                                                                                                                           | Amortization of program rights                                                                                                                                                                                                                                           |                                              |        | 6,481             |   |      |        | 5,706  |   |   |         | 18,116  |   |   |         | 16,202 |  
|                                                                                                                                           | Corporate                                                                                                                                                                                                                                                                |                                              |        | 5,542             |   |      |        | 3,695  |   |   |         | 13,570  |   |   |         | 11,899 |  
|                                                                                                                                           | Depreciation and amortization of intangible assets                                                                                                                                                                                                                       |                                              |        | 7,728             |   |      |        | 7,385  |   |   |         | 23,545  |   |   |         | 23,292 |  
|                                                                                                                                           |                                                                                                                                                                                                                                                                          |                                              |        |                   |   |      |        |        |   |   |         |         |   |   |         |       
|Total operating costs and expenses                                                                                                         |                                                                                                                                                                                                                                                                          |                                              | 68,126 |                   |   |      | 63,507 |        |   |   | 200,614 |         |   |   | 190,308 |       
|                                                                                                                                           |                                                                                                                                                                                                                                                                          |                                              |        |                   |   |      |        |        |   |   |         |         |   |   |         |       
|Operating income                                                                                                                           |                                                                                                                                                                                                                                                                          |                                              | 22,879 |                   |   |      | 20,771 |        |   |   | 66,573  |         |   |   | 56,801  |       
|Other (income) expense:                                                                                                                    |                                                                                                                                                                                                                                                                          |                                              |        |                   |   |      |        |        |   |   |         |         |   |   |         |       
|                                                                                                                                           | Interest expense, net                                                                                                                                                                                                                                                    |                                              |        | 10,888            |   |      |        | 12,254 |   |   |         | 34,414  |   |   |         | 47,258 |  
|                                                                                                                                           | Share of income in equity investments                                                                                                                                                                                                                                    |                                              |        | (2,250            | ) |      |        | (736   | ) |   |         | (5,014  | ) |   |         | (2,136 | )
|                                                                                                                                           | Minority interest in loss of Banks Broadcasting,
    Inc.                                                                                                                                                                                                                |                                              |        | (226              | ) |      |        |       |   |   |         | (472    | ) |   |         |       |  
|                                                                                                                                           | Gain on derivative instruments                                                                                                                                                                                                                                           |                                              |        | (9,026            | ) |      |        | (2,490 | ) |   |         | (13,646 | ) |   |         | (7,250 | )
|                                                                                                                                           | Loss on early extinguishment of debt                                                                                                                                                                                                                                     |                                              |        |                  |   |      |        |       |   |   |         | 4,447   |   |   |         | 53,105 |  
|                                                                                                                                           | Other, net                                                                                                                                                                                                                                                               |                                              |        | 917               |   |      |        | (80    | ) |   |         | 1,138   |   |   |         | 711    |  
|                                                                                                                                           |                                                                                                                                                                                                                                                                          |                                              |        |                   |   |      |        |        |   |   |         |         |   |   |         |       
|Total other expense, net                                                                                                                   |                                                                                                                                                                                                                                                                          |                                              | 303    |                   |   |      | 8,948  |        |   |   | 20,867  |         |   |   | 91,688  |       
|Income (loss) from continuing operations before
    provision for income taxes and cumulative effect of change in
    accounting principle |                                                                                                                                                                                                                                                                          |                                              | 22,576 |                   |   |      | 11,823 |        |   |   | 45,706  |         |   |   | (34,887 | )     
|Provision for income taxes                                                                                                                 |                                                                                                                                                                                                                                                                          |                                              | 7,760  |                   |   |      | 6,509  |        |   |   | 16,960  |         |   |   | 11,371  |       
|                                                                                                                                           |                                                                                                                                                                                                                                                                          |                                              |        |                   |   |      |        |        |   |   |         |         |   |   |         |       
|Income (loss) from continuing operations before
    cumulative effect of change in accounting principle                                    |                                                                                                                                                                                                                                                                          |                                              | 14,816 |                   |   |      | 5,314  |        |   |   | 28,746  |         |   |   | (46,258 | )     
|Discontinued operations:                                                                                                                   |                                                                                                                                                                                                                                                                          |                                              |        |                   |   |      |        |        |   |   |         |         |   |   |         |       
|                                                                                                                                           | Loss (income) from discontinued operations, net
    of tax provision of $206 and $618 for the three and nine months
    ended September 30, 2003, respectively, and $311 for the
    nine months ended September 30, 2004                                                |                                              |        |                  |   |      |        | 290    |   |   |         | (44     | ) |   |         | 178    |  
|                                                                                                                                           | (Gain) loss from sale of discontinued operations,
    net of tax provision of $109 for the three and nine months ended
    September 30, 2003 and a tax benefit of $1,094 for the nine
    months ended September 30, 2004                                               |                                              |        |                  |   |      |        | (864   | ) |   |         | 1,284   |   |   |         | (212   | )
|Cumulative effect of change in accounting
    principle, net of a tax effect of $0                                                         |                                                                                                                                                                                                                                                                          |                                              |       |                   |   |      |       |        |   |   | (3,290  | )       |   |   |        |       
|                                                                                                                                           |                                                                                                                                                                                                                                                                          |                                              |        |                   |   |      |        |        |   |   |         |         |   |   |         |       
|Net income (loss)                                                                                                                          |                                                                                                                                                                                                                                                                          | $                                            | 14,816 |                   |   | $    | 5,888  |        |   | $ | 30,796  |         |   | $ | (46,224 | )     
|                                                                                                                                           |                                                                                                                                                                                                                                                                          |                                              |        |                   |   |      |        |        |   |   |         |         |   |   |         |       
|Basic income (loss) per common
    share:                                                                                                  |                                                                                                                                                                                                                                                                          |                                              |        |                   |   |      |        |        |   |   |         |         |   |   |         |       
|                                                                                                                                           | Income (loss) from continuing operations before
    cumulative effect of change in accounting principle                                                                                                                                                                  |                                              | $      | 0.29              |   |      | $      | 0.11   |   |   | $       | 0.57    |   |   | $       | (0.93  | )
|                                                                                                                                           | Loss from discontinued operations, net of tax                                                                                                                                                                                                                            |                                              |        |                  |   |      |        | (0.01  | ) |   |         |        |   |   |         |       |  
|                                                                                                                                           | Gain (loss) from sale of discontinued operations,
    net of tax                                                                                                                                                                                                         |                                              |        |                  |   |      |        | 0.02   |   |   |         | (0.03   | ) |   |         |       |  
|                                                                                                                                           | Cumulative effect of change in accounting
    principle, net of tax                                                                                                                                                                                                      |                                              |        |                  |   |      |        |       |   |   |         | 0.07    |   |   |         |       |  
|                                                                                                                                           | Net income (loss)                                                                                                                                                                                                                                                        |                                              |        | 0.29              |   |      |        | 0.12   |   |   |         | 0.61    |   |   |         | (0.93  | )
|                                                                                                                                           | Weighted-average number of common shares
    outstanding used in calculating basic income (loss) per common
    share                                                                                                                                                    |                                              |        | 50,350            |   |      |        | 50,021 |   |   |         | 50,272  |   |   |         | 49,955 |  
|Diluted income (loss) per common
    share:                                                                                                |                                                                                                                                                                                                                                                                          |                                              |        |                   |   |      |        |        |   |   |         |         |   |   |         |       
|                                                                                                                                           | Income (loss) from continuing operations before
    cumulative effect of change in accounting principle                                                                                                                                                                  |                                              | $      | 0.29              |   |      | $      | 0.11   |   |   | $       | 0.56    |   |   | $       | (0.93  | )
|                                                                                                                                           | Loss from discontinued operations, net of tax                                                                                                                                                                                                                            |                                              |        |                  |   |      |        | (0.01  | ) |   |         |        |   |   |         |       |  
|                                                                                                                                           | Gain (loss) from sale of discontinued operations,
    net of tax                                                                                                                                                                                                         |                                              |        |                  |   |      |        | 0.02   |   |   |         | (0.03   | ) |   |         |       |  
|                                                                                                                                           | Cumulative effect of change in accounting
    principle, net of tax                                                                                                                                                                                                      |                                              |        |                  |   |      |        |       |   |   |         | 0.06    |   |   |         |       |  
|                                                                                                                                           | Net income (loss)                                                                                                                                                                                                                                                        |                                              |        | 0.29              |   |      |        | 0.12   |   |   |         | 0.60    |   |   |         | (0.93  | )
|                                                                                                                                           | Weighted-average number of common shares
    outstanding used in calculating diluted income (loss) per common
    share                                                                                                                                                  |                                              |        | 50,961            |   |      |        | 50,557 |   |   |         | 51,005  |   |   |         | 49,955 |  

The accompanying notes are an integral part of
the condensed consolidated financial statements.

3



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##### Table of Contents



LIN TV CORP.




CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS

|                                                                                                                               |                                                                            |                   |         |         |   |   |          |         |  
|------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------- | ----------------- | ------- | ------- | - | - | -------- | ------- | -
|                                                                                                                               |                                                                            |                  
|                                                                                                                               |                                                                            | Nine Months Ended
|                                                                                                                               |                                                                            | September 30,    
|                                                                                                                               |                                                                            |                  
|                                                                                                                               |                                                                            | 2004              |         | 2003   
|                                                                                                                               |                                                                            |                   |         |        
|                                                                                                                               |                                                                            |                  
|                                                                                                                               |                                                                            | (In thousands)   
|                                                                                                                               |                                                                            |                  
|                                                                                                                               |                                                                            | (Unaudited)      
|OPERATING ACTIVITIES:                                                                                                          |                                                                            |                   |         |         |   |   |          |        
|Net income (loss)                                                                                                              |                                                                            | $                 | 30,796  |         |   | $ | (46,224  | )      
|Adjustment to reconcile net loss to net cash
    provided by operating activities:                                             |                                                                            |                   |         |         |   |   |          |        
|                                                                                                                               | Depreciation and amortization of intangible assets                         |                   |         | 23,545  |   |   |          | 23,292  |  
|                                                                                                                               | Amortization of financing costs and note discounts                         |                   |         | 6,036   |   |   |          | 12,494  |  
|                                                                                                                               | Amortization of program rights                                             |                   |         | 18,116  |   |   |          | 16,202  |  
|                                                                                                                               | Program payments                                                           |                   |         | (18,336 | ) |   |          | (16,948 | )
|                                                                                                                               | Loss on extinguishment of debt                                             |                   |         | 4,447   |   |   |          | 53,105  |  
|                                                                                                                               | Cumulative effect of change in accounting
    principle, net of tax impact |                   |         | (3,290  | ) |   |          |        |  
|                                                                                                                               | Gain on derivative instruments                                             |                   |         | (13,646 | ) |   |          | (7,250  | )
|                                                                                                                               | Loss (gain) on sale of stations, net of tax
    impact                     |                   |         | 1,284   |   |   |          | (212    | )
|                                                                                                                               | Share of income in equity investments                                      |                   |         | (5,014  | ) |   |          | (2,136  | )
|                                                                                                                               | Deferred income taxes, net                                                 |                   |         | 13,000  |   |   |          | 9,828   |  
|                                                                                                                               | Other, net                                                                 |                   |         | (48     | ) |   |          | 858     |  
|Changes in operating assets and liabilities, net
    of acquisitions and disposals:                                            |                                                                            |                   |         |         |   |   |          |        
|                                                                                                                               | Accounts receivable                                                        |                   |         | 5,092   |   |   |          | 8,714   |  
|                                                                                                                               | Program rights, net of program obligations                                 |                   |         | 233     |   |   |          | 3,491   |  
|                                                                                                                               | Other assets                                                               |                   |         | (4,146  | ) |   |          | (6,429  | )
|                                                                                                                               | Accounts payable                                                           |                   |         | (1,122  | ) |   |          | (7,267  | )
|                                                                                                                               | Accrued interest expense                                                   |                   |         | (756    | ) |   |          | (6,004  | )
|                                                                                                                               | Accrued sales volume discount                                              |                   |         | (1,766  | ) |   |          | (1,404  | )
|                                                                                                                               | Other accrued expenses                                                     |                   |         | 6,957   |   |   |          | (2,786  | )
|                                                                                                                               |                                                                            |                   |         |         |   |   |          |        
|Net cash provided by operating
    activities                                                                                  |                                                                            |                   | 61,382  |         |   |   | 31,324   |        
|INVESTING ACTIVITIES:                                                                                                          |                                                                            |                   |         |         |   |   |          |        
|Capital expenditures                                                                                                           |                                                                            |                   | (17,500 | )       |   |   | (15,006  | )      
|Proceeds from sale of broadcast licenses and
    related operating assets                                                      |                                                                            |                   | 24,000  |         |   |   | 10,000   |        
|Investment in equity investments                                                                                               |                                                                            |                   | (650    | )       |   |   |         |        
|Capital distributions from equity investments                                                                                  |                                                                            |                   | 5,503   |         |   |   | 4,891    |        
|Acquisition of broadcast licenses                                                                                              |                                                                            |                   | (9,152  | )       |   |   |         |        
|Other, net                                                                                                                     |                                                                            |                   | 29      |         |   |   | (30      | )      
|Proceeds from liquidation of short-term
    investments                                                                        |                                                                            |                   |        |         |   |   | 23,691   |        
|                                                                                                                               |                                                                            |                   |         |         |   |   |          |        
|Net cash provided by investing
    activities                                                                                  |                                                                            |                   | 2,230   |         |   |   | 23,546   |        
|                                                                                                                               |                                                                            |                   |         |         |   |   |          |        
|FINANCING ACTIVITIES:                                                                                                          |                                                                            |                   |         |         |   |   |          |        
|Net proceeds on exercises of employee stock
    options and phantom stock units and employee stock purchase plan
    issuances |                                                                            |                   | 1,563   |         |   |   | 1,803    |        
|Proceeds from long-term debt                                                                                                   |                                                                            |                   |        |         |   |   | 325,000  |        
|Proceeds from Senior Credit Facilities                                                                                         |                                                                            |                   |        |         |   |   | 175,000  |        
|Long-term debt financing costs                                                                                                 |                                                                            |                   | (147    | )       |   |   | (10,049  | )      
|Net (repayments) proceeds from revolver debt                                                                                   |                                                                            |                   | (18,000 | )       |   |   | 27,000   |        
|Principal payments on long-term debt                                                                                           |                                                                            |                   | (43,810 | )       |   |   | (677,750 | )      
|Cash expenses associated with early
    extinguishment of debt                                                                 |                                                                            |                   | (3,016  | )       |   |   | (26,056  | )      
|                                                                                                                               |                                                                            |                   |         |         |   |   |          |        
|Net cash used in financing
    activities                                                                                      |                                                                            |                   | (63,410 | )       |   |   | (185,052 | )      
|                                                                                                                               |                                                                            |                   |         |         |   |   |          |        
|Net increase (decrease) in cash and cash
    equivalents                                                                       |                                                                            |                   | 202     |         |   |   | (130,182 | )      
|Cash and cash equivalents at the beginning of the
    period                                                                   |                                                                            |                   | 9,475   |         |   |   | 143,860  |        
|                                                                                                                               |                                                                            |                   |         |         |   |   |          |        
|Cash and cash equivalents at the end of the
    period                                                                         |                                                                            | $                 | 9,677   |         |   | $ | 13,678   |        
|                                                                                                                               |                                                                            |                   |         |         |   |   |          |        

The accompanying notes are an integral part of
the condensed consolidated financial statements.

4



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##### Table of Contents



LIN TV CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

(Unaudited)







|         |                       
|-------- | ----------------------
|Note 1  | Basis of Presentation:

LIN TV Corp., together with its
subsidiaries, including LIN Television Corporation (LIN
Television) (together, the Company), is a
television station group operator in the United States and
Puerto Rico. LIN TV Corp. and its subsidiaries are
affiliates of Hicks, Muse, Tate & Furst Incorporated
(Hicks Muse).

LIN TV Corp. guarantees all debt of LIN
Television except for its $166.4 million, 8% Senior
Notes due 2008. All of the consolidated wholly-owned
subsidiaries of LIN Television fully and unconditionally
guarantee all the Companys debt on a joint and several
basis.

Certain reclassifications have been made to the
prior period financial statements to conform to the current
period financial statement presentation.

These condensed consolidated financial statements
have been prepared without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. The Company filed
audited financial statements for the year ended
December 31, 2003 in its annual report on Form 10-K/A,
which includes all such information and disclosures.

In the opinion of management, the accompanying
unaudited interim financial statements contain all adjustments
(consisting of normal recurring adjustments and adjustments
related to the application of FASB Interpretation No. 46)
necessary to summarize fairly the financial position, results of
operations and cash flows of the Company for the periods
presented. The interim results of operations are not necessarily
indicative of the results to be expected for the full year.

The Companys preparation of financial
statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions
that affect the reported amount of assets and liabilities and
disclosure of contingent assets and liabilities at the dates of
the financial statements and the reported amounts of revenues
and expenses during the reported periods. Estimates are used
when accounting for the collectibility of accounts receivable
and valuing intangible assets, deferred tax assets and net
assets of businesses acquired. Actual results could differ from
these estimates.



|         |                          
|-------- | -------------------------
|Note 2  | Stock-Based Compensation:

The Company accounts for its stock-based employee
compensation plans under the recognition and measurement
principles of Accounting Principles Board (APB)
Opinion No. 25, Accounting for Stock Issued to
Employees, and related interpretations.

5



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##### Table of Contents



LIN TV CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The following table illustrates the effect on net
income (loss) and net income (loss) per share if the Company had
applied the fair value recognition provisions of Statement of
Financial Accounting Standards (SFAS) No. 123,
Accounting for Stock-Based Compensation, to
stock-based employee compensation (in thousands, except for per
share data).

|                                                                                                                                                       |  |                    |        |                   |  |      |       |      |  |   |        |   |  |   |         |  
|------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------ | ------ | ----------------- |  | ---- | ----- | ---- |  | - | ------ | - |  | - | ------- | -
|                                                                                                                                                       |  |                    |        |                  
|                                                                                                                                                       |  | Three Months Ended |        | Nine Months Ended
|                                                                                                                                                       |  | September, 30      |        | September, 30    
|                                                                                                                                                       |  |                    |        |                  
|                                                                                                                                                       |  | 2004               |        | 2003              |  | 2004 |       | 2003
|                                                                                                                                                       |  |                    |        |                   |  |      |       |     
|Net income (loss), as reported                                                                                                                         |  | $                  | 14,816 |                   |  | $    | 5,888 |      |  | $ | 30,796 |   |  | $ | (46,224 | )
|Add: Stock-based employee compensation expense,
    included in reported net income (loss), net of related tax effect                                  |  |                    | 117    |                   |  |      |      |      |  |   | 156    |   |  |   |        |  
|Deduct: Total stock-based employee compensation
    expense determined under the fair value based method for all
    awards, net of related tax effect |  |                    | (1,016 | )                 |  |      | (764  | )    |  |   | (2,516 | ) |  |   | (2,210  | )
|                                                                                                                                                       |  |                    |        |                   |  |      |       |      |  |   |        |   |  |   |         |  
|Pro forma net income (loss)                                                                                                                            |  | $                  | 13,917 |                   |  | $    | 5,124 |      |  | $ | 28,436 |   |  | $ | (48,434 | )
|                                                                                                                                                       |  |                    |        |                   |  |      |       |      |  |   |        |   |  |   |         |  
|Basic net income (loss) per common share, as
    reported                                                                                              |  | $                  | 0.29   |                   |  | $    | 0.12  |      |  | $ | 0.61   |   |  | $ | (0.93   | )
|Basic net income (loss) per common share, pro
    forma                                                                                                |  | $                  | 0.28   |                   |  | $    | 0.10  |      |  | $ | 0.57   |   |  | $ | (0.97   | )
|Diluted net income (loss) per common share, as
    reported                                                                                            |  | $                  | 0.29   |                   |  | $    | 0.12  |      |  | $ | 0.60   |   |  | $ | (0.93   | )
|Diluted net income (loss) per common share, pro
    forma                                                                                              |  | $                  | 0.27   |                   |  | $    | 0.10  |      |  | $ | 0.56   |   |  | $ | (0.97   | )

The fair value of each option is estimated on the
date of grant using the Black-Scholes option-pricing model with
the following assumptions during the three and nine months ended
September 30, 2004 and 2003, respectively:

|                               |  |                    |            |                   |  |      |            |      |  |  |            |  |  |  |            | 
|------------------------------ |  | ------------------ | ---------- | ----------------- |  | ---- | ---------- | ---- |  |  | ---------- |  |  |  | ---------- | 
|                               |  |                    |            |                  
|                               |  | Three Months Ended |            | Nine Months Ended
|                               |  | September 30,      |            | September 30,    
|                               |  |                    |            |                  
|                               |  | 2004               |            | 2003              |  | 2004 |            | 2003
|                               |  |                    |            |                   |  |      |            |     
|Volatility                     |  |                    | 24%        |                   |  |      | 30%        |      |  |  | 24%        |  |  |  | 30%        | 
|Risk-free interest rates       |  |                    | 2.0 - 3.2% |                   |  |      | 1.5 - 3.0% |      |  |  | 2.0 - 4.4% |  |  |  | 1.5 - 3.0% | 
|Weighted average expected life |  |                    | 4.5 years  |                   |  |      | 3.5 years  |      |  |  | 5 years    |  |  |  | 3.5 years  | 
|Dividend yields                |  |                    | 0%         |                   |  |      | 0%         |      |  |  | 0%         |  |  |  | 0%         | 

Note 3  Disposition of
Station:

On May 14, 2004, the Company completed the
sale of WEYI-TV, the NBC affiliate serving Flint, Michigan, for
$24.0 million.

The operating results of this station for the
three and nine month periods ended September 30, 2004 and
2003, respectively, have been excluded from continuing
operations and included in discontinued operations under the
provisions of SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets. During the
nine month period ended September 30, 2004, the Company
recorded a loss on the sale of WEYI-TV of $1.3 million, net
of a tax benefit of $1.1 million, compared to a gain on the
sale of KRBC-TV and KACB-TV of $212,000 recorded during the nine
month period ended September 30, 2003.

The following table summarizes the net revenues
and pre-tax income (loss) for WEYI-TV that had been included in
historical results (in thousands):

|                      |  |                    |   |                   |  |      |       |      |  |   |       |  |  |   |       | 
|--------------------- |  | ------------------ | - | ----------------- |  | ---- | ----- | ---- |  | - | ----- |  |  | - | ----- | 
|                      |  |                    |   |                  
|                      |  | Three Months Ended |   | Nine Months Ended
|                      |  | September, 30      |   | September, 30    
|                      |  |                    |   |                  
|                      |  | 2004               |   | 2003              |  | 2004 |       | 2003
|                      |  |                    |   |                   |  |      |       |     
|Net revenues          |  | $                  |  |                   |  | $    | 1,490 |      |  | $ | 3,258 |  |  | $ | 4,991 | 
|Pre-tax (loss) income |  |                    |  |                   |  |      | (84   | )    |  |   | 355   |  |  |   | 440   | 

6



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##### Table of Contents



LIN TV CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|         |             
|-------- | ------------
|Note 4  | Investments:

The Company has investments in a number of
ventures with third parties, through which it has an interest in
television stations in locations throughout the United States of
America. The following presents the Companys basis in
these ventures (in thousands):

|                         |  |               |        |              |  |   |        | 
|------------------------ |  | ------------- | ------ | ------------ |  | - | ------ | 
|                         |  | September 30, |        | December 31,
|                         |  | 2004          |        | 2003        
|                         |  |               |        |             
|Banks Broadcasting, Inc. |  | $             |       |              |  | $ | 11,297 | 
|NBC joint venture        |  |               | 55,710 |              |  |   | 55,758 | 
|WAND (TV) Partnership    |  |               | 10,134 |              |  |   | 10,250 | 
|                         |  |               |        |              |  |   |        | 
|                         |  | $             | 65,844 |              |  | $ | 77,305 | 
|                         |  |               |        |              |  |   |        | 

Banks Broadcasting,
Inc:The Company owns preferred
stock that represents a 50% non-voting interest in Banks
Broadcasting, Inc. (Banks Broadcasting), which owns
and operates KWCV-TV, a WB affiliate in Wichita, Kansas and
KNIN-TV, a UPN affiliate in Boise, Idaho. The Company is able to
exercise significant, but not controlling, influence over the
activities of Banks Broadcasting through representation on the
Board of Directors. The Company has also entered into a
management services agreement with Banks Broadcasting to provide
specified management, engineering and related services for a
fixed fee. Included in this agreement is a cash management
arrangement under which the Company incurs expenditures on
behalf of Banks Broadcasting and is periodically reimbursed.

In accordance with FASB Interpretation
No. 46 (FIN 46), Consolidation of
Variable Interest Entities  an Interpretation of ARB
No. 51, Banks Broadcasting is considered to be a
variable interest entity. For purposes of determining the
primary beneficiary of Banks Broadcasting, the Company
considered Hicks Muse & Co. Partners, L.P. (Hicks
Muse Partners) 47% ownership in the Company and Hicks
Muses substantial economic interest in
21st Century Group, LLC which owns 18% of Banks
Broadcasting; and determined for purposes of FIN 46 that
the Company and 21st Century Group, LLC are
related parties. Considering the Companys 50% ownership
interest in Banks Broadcasting and the Companys management
agreement with Banks Broadcasting, the Company identified itself
as the primary beneficiary of Banks Broadcasting under
FIN 46. As the primary beneficiary of Banks Broadcasting,
the Company consolidated Banks Broadcastings assets,
liabilities and noncontrolling interests into the Companys
financial statements effective March 31, 2004. Since the
Company and Banks Broadcasting are not under common control, as
defined by Emerging Issues Task Force (EITF)
Issue 02-5, Definition of Common Control in Relation
to FASB Statement No. 141, Banks Broadcastings
assets, liabilities and noncontrolling interests were measured
at fair value as of March 31, 2004. The difference between
the value of the newly consolidated assets over the reported
amount of any previously held interests and the value of newly
consolidated liabilities and non-controlling interests was
recognized as a cumulative effect of an accounting change in the
period ended March 31, 2004. The resulting consolidated
balance sheet of the Company does not reflect any voting equity
minority interest since Banks Broadcasting has incurred
cumulative losses and as such the minority interest would be in
a deficit position at September 30, 2004.

7



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##### Table of Contents



LIN TV CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The following presents the summarized balance
sheet of Banks Broadcasting at March 31, 2004, the date of
initial consolidation (in thousands):

|                                |                              |   |        |        | 
|------------------------------- | ---------------------------- | - | ------ | ------ | 
|Assets                          |                              |   |        |       
|Cash                            |                              | $ | 97     |       
|Accounts receivable             |                              |   | 899    |       
|Program rights, short-term      |                              |   | 757    |       
|Other current assets            |                              |   | 46     |       
|Property and equipment          |                              |   | 5,048  |       
|Program rights, long-term       |                              |   | 662    |       
|Broadcast licenses              |                              |   | 29,238 |       
|                                |                              |   |        |       
|                                | Total assets                 |   | $      | 36,747 | 
|                                |                              |   |        |       
|                               
|Liabilities and Equity          |                              |   |        |       
|Accounts payable                |                              | $ | 396    |       
|Program obligations, short-term |                              |   | 793    |       
|Other accrued expenses          |                              |   | 404    |       
|Program obligations, long-term  |                              |   | 525    |       
|Deferred income taxes, net      |                              |   | 4,805  |       
|Preferred stock                 |                              |   | 34,764 |       
|                                |                              |   |        |       
|                                | Total liabilities and equity |   |        | 41,687 | 
|                                |                              |   |        |       
|Deficit                         |                              | $ | (4,940 | )     
|                                |                              |   |        |       

The deficit of $4.9 million has been
allocated to the nonvoting preferred stock, and the
Companys ownership of such preferred stock has been
eliminated on consolidation.

Hicks Muse has a substantial economic interest in
21st Century Group, LLC which owns 36% of the
preferred stock on the Companys balance sheet.

Joint Venture with
NBC:The Company owns a 20.38%
interest in a joint venture with NBC and accounts for its
interest using the equity method, as the Company does not have a
controlling interest. The Company received distributions of
$2.2 million and $5.5 million from the joint venture
in the three and nine months ended September 30, 2004,
respectively, and $1.6 million and $4.9 million in the
three and nine months ended September 30, 2003,
respectively.

The following presents the summarized financial
information of the joint venture (in thousands):

|                 |  |                    |        |                   |  |      |        |      |  |   |         |  |  |   |         | 
|---------------- |  | ------------------ | ------ | ----------------- |  | ---- | ------ | ---- |  | - | ------- |  |  | - | ------- | 
|                 |  |                    |        |                  
|                 |  | Three Months Ended |        | Nine Months Ended
|                 |  | September 30,      |        | September 30,    
|                 |  |                    |        |                  
|                 |  | 2004               |        | 2003              |  | 2004 |        | 2003
|                 |  |                    |        |                   |  |      |        |     
|Net revenues     |  | $                  | 46,659 |                   |  | $    | 39,679 |      |  | $ | 129,102 |  |  | $ | 116,176 | 
|Operating income |  |                    | 27,795 |                   |  |      | 23,233 |      |  |   | 75,353  |  |  |   | 65,925  | 
|Net income       |  |                    | 11,436 |                   |  |      | 5,630  |      |  |   | 26,761  |  |  |   | 16,292  | 

|                        |  |               |         |              |  |   |         | 
|----------------------- |  | ------------- | ------- | ------------ |  | - | ------- | 
|                        |  | September 30, |         | December 31,
|                        |  | 2004          |         | 2003        
|                        |  |               |         |             
|Current assets          |  | $             | 24,392  |              |  | $ | 9,949   | 
|Non-current assets      |  |               | 238,734 |              |  |   | 237,469 | 
|Current liabilities     |  |               | 17      |              |  |   | 725     | 
|Non-current liabilities |  |               | 815,500 |              |  |   | 815,500 | 

WAND (TV)
Partnership:The Company has a
33.33% interest in a partnership, WAND (TV) Partnership, with
Block Communications. The Company accounts for its interest
using the equity method, as the Company does not have a
controlling interest. The Company has also entered into a
management services agreement with WAND (TV) Partnership to
provide specified management, engineering and related services
for a fixed fee. Included in this agreement is a cash management
arrangement under which the Company incurs expenditures on
behalf of WAND (TV) Partnership and is periodically reimbursed.

8



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##### Table of Contents



LIN TV CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The following presents the summarized financial
information of the WAND (TV) Partnership (in thousands):

|               |  |                    |       |                   |  |      |       |      |  |   |       |   |  |   |       |  
|-------------- |  | ------------------ | ----- | ----------------- |  | ---- | ----- | ---- |  | - | ----- | - |  | - | ----- | -
|               |  |                    |       |                  
|               |  | Three Months Ended |       | Nine Months Ended
|               |  | September 30,      |       | September 30,    
|               |  |                    |       |                  
|               |  | 2004               |       | 2003              |  | 2004 |       | 2003
|               |  |                    |       |                   |  |      |       |     
|Net revenues   |  | $                  | 1,440 |                   |  | $    | 1,485 |      |  | $ | 4,737 |   |  | $ | 4,679 |  
|Operating loss |  |                    | (165  | )                 |  |      | (174  | )    |  |   | (269  | ) |  |   | (244  | )
|Net loss       |  |                    | (243  | )                 |  |      | (239  | )    |  |   | (346  | ) |  |   | (318  | )

|                        |  |               |        |              |  |   |        | 
|----------------------- |  | ------------- | ------ | ------------ |  | - | ------ | 
|                        |  | September 30, |        | December 31,
|                        |  | 2004          |        | 2003        
|                        |  |               |        |             
|Current assets          |  | $             | 2,659  |              |  | $ | 2,013  | 
|Non-current assets      |  |               | 24,492 |              |  |   | 25,168 | 
|Current liabilities     |  |               | 678    |              |  |   | 405    | 
|Non-current liabilities |  |               | 44     |              |  |   |       | 



|         |                   
|-------- | ------------------
|Note 5  | Intangible Assets:

The following table summarizes the carrying
amount of each major class of intangible assets (in thousands):

|                                                              |  |               |           |              |  |   |           |  
|------------------------------------------------------------- |  | ------------- | --------- | ------------ |  | - | --------- | -
|                                                              |  | September 30, |           | December 31,
|                                                              |  | 2004          |           | 2003        
|                                                              |  |               |           |             
|Amortized Intangible Assets:                                  |  |               |           |              |  |   |           |  
|LMA purchase options                                          |  | $             | 2,388     |              |  | $ | 2,388     |  
|Network affiliations                                          |  |               | 173       |              |  |   | 377       |  
|Income leases                                                 |  |               | 393       |              |  |   | 393       |  
|Other intangible assets                                       |  |               | 2,020     |              |  |   | 2,025     |  
|Accumulated amortization                                      |  |               | (2,586    | )            |  |   | (1,891    | )
|                                                              |  |               |           |              |  |   |           |  
|                                                              |  |               | 2,388     |              |  |   | 3,292     |  
|Unamortized Intangible Assets:                                |  |               |           |              |  |   |           |  
|Broadcast licenses                                            |  |               | 1,115,715 |              |  |   | 1,102,705 |  
|                                                              |  |               |           |              |  |   |           |  
|Total broadcast licenses and other intangible
    assets, net |  | $             | 1,118,103 |              |  | $ | 1,105,997 |  
|Goodwill                                                      |  |               | 583,097   |              |  |   | 586,269   |  
|                                                              |  |               |           |              |  |   |           |  
|Total intangible assets                                       |  | $             | 1,701,200 |              |  | $ | 1,692,266 |  
|                                                              |  |               |           |              |  |   |           |  

The decrease of $204,000 in network affiliations
is due to the network affiliation switch of the Companys
television station in Dayton, Ohio. The increase in broadcast
licenses is due to the acquisition of the broadcast license of
WIRS-TV on January 14, 2004 for $4.5 million, the
acquisition of the broadcast license of WTIN-TV on May 6,
2004 for $4.9 million and the consolidation of Banks
Broadcasting under FIN 46 as of March 31, 2004 for
$29.2 million offset by the sale of WEYI-TV, completed on
May 14, 2004, for $18.8 million and the tax adjustment
related to the Companys valuation allowance on deferred
tax assets for $6.8 million. The decrease in goodwill is
due to the tax adjustment related to the Companys
valuation allowance on deferred tax assets for $3.2 million.

9



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##### Table of Contents



LIN TV CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The following table summarizes the aggregate
amortization expense for all periods presented as well as the
estimated amortization expense for the next five years (in
thousands):

|                     |  |               |     |               |  |                                 |     |      |  |      |     |      |  |      |     |      |  |      |       |  |  |   |       |  |  |   |       |  |  |   |   |  |  |   |   | 
|-------------------- |  | ------------- | --- | ------------- |  | ------------------------------- | --- | ---- |  | ---- | --- | ---- |  | ---- | --- | ---- |  | ---- | ----- |  |  | - | ----- |  |  | - | ----- |  |  | - | - |  |  | - | - | 
|                     |  |               |     |               |  |                                 |     |      |  |      |     |      |  |     
|                     |  | Three Months  |     | Nine Months   |  |                                
|                     |  | Ended         |     | Ended         |  | Estimated Amortization Expense 
|                     |  | September 30, |     | September 30, |  | For the Year Ended December 31,
|                     |  |               |     |               |  |                                
|                     |  | 2004          |     | 2003          |  | 2004                            |     | 2003 |  | 2004 |     | 2005 |  | 2006 |     | 2007 |  | 2008
|                     |  |               |     |               |  |                                 |     |      |  |      |     |      |  |      |     |      |  |     
|Amortization expense |  | $             | 270 |               |  | $                               | 278 |      |  | $    | 825 |      |  | $    | 824 |      |  | $    | 1,041 |  |  | $ | 1,041 |  |  | $ | 1,006 |  |  | $ |  |  |  | $ |  | 



|         |      
|-------- | -----
|Note 6  | Debt:

Debt consisted of the following (in thousands):

|                                                                                                                                                                                                                       |  |               |         |              |  |   |         | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ------- | ------------ |  | - | ------- | 
|                                                                                                                                                                                                                       |  | September 30, |         | December 31,
|                                                                                                                                                                                                                       |  | 2004          |         | 2003        
|                                                                                                                                                                                                                       |  |               |         |             
|Senior Credit Facilities                                                                                                                                                                                               |  | $             | 170,250 |              |  | $ | 193,500 | 
|$166,440 and $205,000 at September 30, 2004
    and December 31, 2003, respectively, 8% Senior Notes
    due 2008 (net of discount of $3,118 and $4,706 at
    September 30, 2004 and December 31, 2003, respectively) |  |               | 163,322 |              |  |   | 200,294 | 
|$200,000, 6 1/2% Senior Subordinated
    Notes due 2013                                                                                                                                                                |  |               | 200,000 |              |  |   | 200,000 | 
|$125,000, 2.50% Exchangeable Senior Subordinated
    Debentures due 2033 (net of discount of $15,269 and $18,427 at
    September 30, 2004 and December 31, 2003, respectively)                                        |  |               | 109,731 |              |  |   | 106,573 | 
|                                                                                                                                                                                                                       |  |               |         |              |  |   |         | 
|Total debt                                                                                                                                                                                                             |  |               | 643,303 |              |  |   | 700,367 | 
|Less current portion                                                                                                                                                                                                   |  |               | 11,000  |              |  |   | 7,000   | 
|                                                                                                                                                                                                                       |  |               |         |              |  |   |         | 
|Total long-term debt                                                                                                                                                                                                   |  | $             | 632,303 |              |  | $ | 693,367 | 
|                                                                                                                                                                                                                       |  |               |         |              |  |   |         | 

During the nine months ended September 30,
2004, the Company drew down funds from its revolving credit
facility to repurchase $38.6 million of LIN Television
Corporations 8% Senior Notes due 2008 in a negotiated
transaction with an institutional investor. The Company incurred
charges of $4.4 million during the nine months ended
September 30, 2004 related to the write-off of unamortized
discounts, deferred financing fees and associated costs as a
result of the early extinguishment of debt.

The current portion of long-term debt includes
$7.0 million of annual amortization of a term loan under
our Senior Credit Facility and $4.0 million borrowed under
the revolving credit facility, which terminates March 31,
2005.



|         |                            
|-------- | ---------------------------
|Note 7  | Related Party Transactions:

Financial Advisory Agreement.The Company is party to an
agreement with Hicks Muse Partners, pursuant to which the
Company reimburses Hicks Muse Partners, an affiliate of Hicks
Muse, for certain reimbursable expenses incurred by it in
connection with rendering services relating to acquisitions,
sales, mergers, exchange offers, recapitalization, restructuring
or similar transactions allocable to the Company. The Company
incurred fees under this arrangement of $4,000 and $14,000 for
the three and nine months ended September 30, 2004,
respectively and $17,000 and $55,000 for the same periods in the
prior year.

Local Marketing
Agreement.The Company is party to
a local marketing agreement with Super Towers, Inc., of which
the President is related to a LIN TV Corp. executive. The
Company has paid Super Towers, Inc. approximately $16,000 and
$25,000 for the three and nine months ended September 30,
2004,

10



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##### Table of Contents



LIN TV CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

respectively, for various reimbursable expenses,
and $24,000 and $45,000 for the same periods in the prior year.

Banks Broadcasting
Inc.The Company has entered into
a management services agreement with Banks Broadcasting to
provide specified management, engineering and related services
for a fixed fee. Hicks Muse has substantial economic interest in
21st Century Group, LLC which owns 18% of Banks
Broadcasting. Prior to the consolidation of Banks Broadcasting
in accordance with FIN 46 as of March 31, 2004, the
Company received approximately $50,000 for the three months
ended March 31, 2004 and $50,000 and $150,000 for the three
and nine months ended September 30, 2003, respectively,
under the management services agreement.

Other
Investments.The Companys
Chief Executive Officer serves on the Board of Directors of an
internet company in which the Company has invested. The Company
incurred fees for internet services provided by this company of
$156,000 and $427,000 for the three and the nine months ended
September 30, 2004, respectively, and $121,000 and $365,000
for the same periods in the prior year.



|         |               
|-------- | --------------
|Note 8  | Contingencies:

GECC Note.General Electric Capital Corporation (GECC) provided
debt financing in connection with the formation of the joint
venture with NBC in the form of an $815.5 million 25-year
non-amortizing senior secured note bearing an initial interest
rate of 8.0% per annum (the GECC note). During
the last five years, the joint venture has produced cash flows
to support the interest payments and to maintain minimum levels
of required working capital reserves. In addition, the joint
venture has made cash distributions to the Company and to NBC
from the excess cash generated by the joint venture of
approximately $19.3 million on average each year during the
past three years. Accordingly, the Company expects that the
interest payments on the GECC note will be serviced solely by
the cash flow of the joint venture. The GECC note is not an
obligation of the Company, however, the note is recourse to the
joint venture with NBC and is guaranteed by LIN TV Corp. If
the joint venture were unable to pay principal or interest on
the GECC note and GECC could not otherwise recoup its principal
from the joint venture, GECC could require LIN TV Corp. to
pay the shortfall of any outstanding amounts under the GECC
note. If this happened, the Company could experience material
adverse consequences, including:



|  |                                                                                                                                                                                                        
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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 senior credit
    facilities and senior 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.                       

The joint venture is approximately 80% owned by
NBC, and NBC controls the operations of the stations through a
management contract. Therefore, the operation and profitability
of those stations and the likelihood of a default under the GECC
note are primarily within NBCs control.



|         |                  
|-------- | -----------------
|Note 9  | Retirement Plans:

The Company has a number of noncontributory
defined benefit retirement plans covering certain of its
employees in the United States and Puerto Rico. Contributions
are based on periodic actuarial valuations and are charged to
operations on a systematic basis over the expected average
remaining service lives of current employees. The net pension
expense is assessed in accordance with the advice of
professionally qualified actuaries. The benefits under the
defined benefit plans are based on years of service and
compensation.

11



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##### Table of Contents



LIN TV CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The components of the net periodic benefit cost
recognized are as follows (in thousands):

|                                   |  |                    |        |                   |  |      |        |      |  |   |        |   |  |   |        |  
|---------------------------------- |  | ------------------ | ------ | ----------------- |  | ---- | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                   |  |                    |        |                  
|                                   |  | Three Months Ended |        | Nine Months Ended
|                                   |  | September 30,      |        | September 30,    
|                                   |  |                    |        |                  
|                                   |  | 2004               |        | 2003              |  | 2004 |        | 2003
|                                   |  |                    |        |                   |  |      |        |     
|Service cost                       |  | $                  | 494    |                   |  | $    | 457    |      |  | $ | 1,494  |   |  | $ | 1,371  |  
|Interest cost                      |  |                    | 1,352  |                   |  |      | 1,311  |      |  |   | 4,154  |   |  |   | 3,933  |  
|Expected return on plan assets     |  |                    | (1,364 | )                 |  |      | (1,408 | )    |  |   | (4,264 | ) |  |   | (4,224 | )
|Amortization of prior service cost |  |                    | 47     |                   |  |      | 41     |      |  |   | 125    |   |  |   | 123    |  
|Amortization of net loss           |  |                    | 103    |                   |  |      | 63     |      |  |   | 263    |   |  |   | 189    |  
|                                   |  |                    |        |                   |  |      |        |      |  |   |        |   |  |   |        |  
|Net periodic benefit cost          |  | $                  | 632    |                   |  | $    | 464    |      |  | $ | 1,772  |   |  | $ | 1,392  |  
|                                   |  |                    |        |                   |  |      |        |      |  |   |        |   |  |   |        |  

As of September 30, 2004, the Company has
contributed $900,000 to the plan, and expects to contribute a
total of $4.2 million during 2004. The Company also has a
non-qualified, unfunded Supplemental Excess Retirement Plan
(SERP). The timing of the payments under the SERP is
determined by individual employees decisions to retire and
commence payments. The Company has funded approximately $416,000
of SERP payments during the nine months ended September 30,
2004.



|          |                    
|--------- | -------------------
|Note 10  | Earnings Per Share:

Basic and diluted income (loss) per common share
are computed in accordance with SFAS No. 128,
Earnings per Share. Basic income (loss) per common
share is computed by dividing net income (loss) by the weighted
average number of shares of common stock outstanding. There is
no difference between basic and diluted income (loss) per common
share for the nine months ended September 30, 2003 since
potential common shares from the exercises of stock options and
phantom units are anti-dilutive to loss from continuing
operations for and are, therefore, excluded from the
calculation. Dilutive common stock equivalents relating to
options and phantom units of 3,785,000 shares and
929,000 shares for the three month periods ended
September 30, 2004 and 2003, respectively, and
2,880,000 shares for the nine months ended
September 30, 2004 were excluded from the diluted income
(loss) per share calculation because the effect of their
inclusion would have been anti-dilutive. Options to
purchase 3,600,000 shares of common stock and phantom
units exercisable into 572,000 shares of common stock were
not included in the calculation of diluted income (loss) per
share for the nine months ending September 30, 2003 because
the effect of their inclusion would have been anti-dilutive.



|          |              
|--------- | -------------
|Note 11  | Income Taxes:

Prior to January 1, 2002, the Company
recorded deferred tax liabilities relating to the difference in
the book basis and tax basis of goodwill and intangibles. The
reversals of those deferred tax liabilities were utilized to
support the recognition of deferred tax assets (primarily
consisting of net operating loss carryforwards) recorded by the
Company. As a result of the adoption of SFAS No. 142,
those deferred tax liabilities will no longer reverse on a
scheduled basis and can no longer be utilized to support the
realization of deferred tax assets. Accordingly, the
Companys provision for income taxes is primarily created
by an increase in the valuation allowance against the increase
in the deferred tax asset position during the year. This expense
has no impact on the Companys cash flows.



|          |                                 
|--------- | --------------------------------
|Note 12  | Recent Accounting Pronouncements

EITF Issue 04-8, The Effect of
Contingently Convertible Debt on Diluted Earnings per
Share which is effective for the Company as of
December 31, 2004, requires that the potential shares
associated with the contingent conversion feature of the
Companys 2.50% Exchangeable Senior Subordinated Debentures
due 2003 be included in the calculation of diluted EPS
regardless of whether the market price trigger has been met. The
Company does not believe that EITF 04-8 will have a
significant impact on the Companys results of operations.

12



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##### Table of Contents



LIN TV CORP.

MANAGEMENTS DISCUSSION AND
ANALYSIS






|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 2. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations

Special Note About Forward-Looking
Statements This quarterly report on Form 10-Q contains
certain forward-looking statements with respect to our financial
condition, results of operations and business, including
statements under the captions Managements Discussion
and Analysis of Financial Condition and Results of
Operations. All of these forward-looking statements are
based on estimates and assumptions made by our management which,
although we believe to be reasonable, are inherently uncertain.
Therefore, you should not place undue reliance upon such
estimates and statements. We cannot assure you that any of such
estimates or statements will be realized and it is likely that
actual results will differ materially from those contemplated by
such forward-looking statements. Factors that may cause such
differences include:  
    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 new 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. Many of these factors are beyond our control.
Forward-looking statements contained herein speak only as of the
date hereof. We undertake no obligation to publicly release the
result of any revisions to these forward-looking statements
which may be made to reflect events or circumstances after the
date hereof or to reflect the occurrence of unanticipated events.


Executive Summary

We are an owner and operator of 23 television
stations in 14 mid-sized markets in the United States. Our
operating revenues are primarily derived from local and national
advertising sales.

The broadcast television industry is cyclical in
nature, being affected by prevailing economic conditions. Since
we rely on sales of advertising time for substantially all of
our revenues, our operating results are

13



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##### Table of Contents



LIN TV CORP.


MANAGEMENTS DISCUSSION AND
ANALYSIS  (Continued)

sensitive to general economic conditions and
regional conditions in each of the local market areas in which
our stations operate.

In addition, advertising revenues are seasonal
and are generally lower in the first quarter of each fiscal
year, due in part to increases in retail advertising in the
period leading up to and including the holiday season and active
advertising in the spring. Advertising revenues also are
generally higher during election years due to spending by
political candidates.

Political revenue is also a factor when comparing
our results year over year. During an election year, political
revenue makes up a significant portion of the increase in
revenue in that year. Since 2004 is a presidential election year
and political revenues during a presidential election year are
generally higher than during a non-presidential election year,
we expect a large percentage of our revenue growth in 2004 to be
attributable to political revenue. We experienced a
$5.1 million and $9.3 million increase in political
revenue during the three and nine months ended
September 30, 2004, respectively, compared to the same
periods in the prior year. We expect an additional increase in
political revenue in the fourth quarter of 2004 followed by a
substantial decrease in 2005.

Our automotive-related advertising revenue
increased $1.2 million and $11.0 million for the three
and nine months ended September 30, 2004, respectively,
compared to the same periods in the prior year. We are dependent
to a significant degree on automotive-related advertising.
Approximately 25% and 23% of our total net revenues for the nine
months ended September 30, 2004 and 2003, respectively,
consisted of automotive advertising. A significant change in
these advertising revenues in the future could materially affect
our results of operations.

Dispositions and Acquisition of Broadcast
Licenses



|  |                                                                                                                                                                                                                                                                                                                                                   
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On May 14, 2004, we completed the sale of
    the broadcast license and certain assets of WEYI-TV, the NBC
    affiliate serving Flint, Michigan, for $24.0 million. The
    loss on sale and operating results of this station are excluded
    from continuing operations and included in discontinued
    operations for all periods presented.
| 
| | On May 6, 2004, we acquired the broadcast
    license and certain assets of WTIN-TV in Ponce, Puerto Rico for
    a total purchase price of $4.9 million.                                                                                                                                                                                         
| 
| | On January 14, 2004, we acquired the
    broadcast license and certain assets of WIRS-TV in Yauco, Puerto
    Rico for a total purchase price of $4.5 million.                                                                                                                                                                                    

Effective March 31, 2004, our investment in
Banks Broadcasting, Inc. (Banks Broadcasting), an
entity in which we own a 50% non-voting interest, is accounted
for under FASB Interpretation No. 46
(FIN 46) Consolidation of Variable
Interest Entities  an Interpretation of ARB
No. 51, which requires us to consolidate Banks
Broadcasting in our financial statements.

Critical Accounting Policies and
Estimates

Our discussion and analysis of our financial
condition and results of operations are based upon our condensed
consolidated financial statements that have been prepared in
accordance with accounting principles generally accepted in the
United States.

The preparation of our consolidated financial
statements requires us to make estimates and judgments that
affect the reported amounts of assets, liabilities and equity
and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Areas where
significant estimates are made include valuation of long-lived
assets and intangible assets, network affiliations, deferred tax
assets, revenue recognition, stock-based compensation, allowance
for doubtful accounts, amortization of program rights,
collectability of receivables, barter

14



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##### Table of Contents



LIN TV CORP.


MANAGEMENTS DISCUSSION AND
ANALYSIS  (Continued)

transactions and net assets of businesses
acquired. These estimates have a material impact on our
financial statements and are discussed in detail throughout our
analysis of the results of operations as discussed below. We
base our estimates on historical experience and on various other
assumptions that we believe are reasonable under the
circumstances, the results of which form the basis for making
judgments about the carrying value of assets, liabilities and
equity that are not readily apparent from other sources. Actual
results and outcomes could differ from these estimates and
assumptions. For a more detailed explanation of the judgments
made in these areas and a discussion of our accounting policies,
refer to Critical Accounting Policies, Estimates and
Recently Issued Accounting Pronouncements included in
Item 7 and Summary of Significant Accounting
Policies (Note 2) included in Item 15 of
our Annual Report on Form 10-K for the year ended
December 31, 2003. Since December 31, 2003, there have
been no significant changes to our critical accounting policies.

Off-Balance Sheet Arrangements

We do not have any contractual relationships with
unconsolidated entities, including special purpose entities or
variable interest entities, for the purpose of facilitating
off-balance sheet arrangements. We do not have any off-balance
sheet arrangements that have or are reasonably likely to have a
current or future material effect on our financial condition,
changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources.

15



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##### Table of Contents



LIN TV CORP.


MANAGEMENTS DISCUSSION AND
ANALYSIS  (Continued)

Results of Operations

Set forth below are significant factors that
contributed to our operating results for the three and nine
months ended September 30, 2004 and 2003, respectively.

|                                   |                                                                                                                                                                                                                                                                          |                    |        |        |  |                   |        |        |  |      |     |        |   |   |         |         |  |   |         |         |  |  |     |    |  
|---------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------ | ------ | ------ |  | ----------------- | ------ | ------ |  | ---- | --- | ------ | - | - | ------- | ------- |  | - | ------- | ------- |  |  | --- | -- | -
|                                   |                                                                                                                                                                                                                                                                          |                    |        |        |  |                   |        |       
|                                   |                                                                                                                                                                                                                                                                          | Three Months Ended |        |        |  | Nine Months Ended |        |       
|                                   |                                                                                                                                                                                                                                                                          | September 30,      |        |        |  | September 30,     |        |       
|                                   |                                                                                                                                                                                                                                                                          |                    |        | %      |  |                   |        | %     
|                                   |                                                                                                                                                                                                                                                                          | 2004               |        | 2003   |  | Change            |        | 2004   |  | 2003 |     | Change
|                                   |                                                                                                                                                                                                                                                                          |                    |        |        |  |                   |        |        |  |      |     |       
|National time sales, net           |                                                                                                                                                                                                                                                                          | $                  | 26,292 |        |  | $                 | 26,739 |        |  |      | (2  | )%     |   | $ | 78,971  |         |  | $ | 78,132  |         |  |  | 1   | % 
|Local time sales, net              |                                                                                                                                                                                                                                                                          |                    | 51,107 |        |  |                   | 48,522 |        |  |      | 5   | %      |   |   | 155,917 |         |  |   | 145,123 |         |  |  | 7   | % 
|Political time sales, net          |                                                                                                                                                                                                                                                                          |                    | 6,316  |        |  |                   | 1,230  |        |  |      | 413 | %      |   |   | 11,488  |         |  |   | 2,217   |         |  |  | 418 | % 
|Other revenue                      |                                                                                                                                                                                                                                                                          |                    | 7,290  |        |  |                   | 7,787  |        |  |      | (6  | )%     |   |   | 20,811  |         |  |   | 21,637  |         |  |  | (4  | )%
|                                   |                                                                                                                                                                                                                                                                          |                    |        |        |  |                   |        |        |  |      |     |        |   |   |         |         |  |   |         |         |  |  |     |   
|                                   | Net revenue                                                                                                                                                                                                                                                              |                    |        | 91,005 |  |                   |        | 84,278 |  |      |     | 8      | % |   |         | 267,187 |  |   |         | 247,109 |  |  |     | 8  | %
|Operating costs and expenses:      |                                                                                                                                                                                                                                                                          |                    |        |        |  |                   |        |        |  |      |     |        |   |   |         |         |  |   |         |         |  |  |     |   
|                                   | Direct operating (excluding $7.5 million and
    $7.1 million of depreciation for the three months ended
    September 30, 2004 and 2003, respectively, and
    $22.7 million and $22.5 million for the nine months
    ended September 30, 2004 and 2003, respectively) |                    |        | 25,638 |  |                   |        | 24,970 |  |      |     | 3      | % |   |         | 75,658  |  |   |         | 73,933  |  |  |     | 2  | %
|                                   | Selling, general and administrative                                                                                                                                                                                                                                      |                    |        | 22,737 |  |                   |        | 21,751 |  |      |     | 5      | % |   |         | 69,725  |  |   |         | 64,982  |  |  |     | 7  | %
|                                   | Amortization of program rights                                                                                                                                                                                                                                           |                    |        | 6,481  |  |                   |        | 5,706  |  |      |     | 14     | % |   |         | 18,116  |  |   |         | 16,202  |  |  |     | 12 | %
|                                   | Corporate                                                                                                                                                                                                                                                                |                    |        | 5,542  |  |                   |        | 3,695  |  |      |     | 50     | % |   |         | 13,570  |  |   |         | 11,899  |  |  |     | 14 | %
|                                   | Depreciation and amortization of intangible assets                                                                                                                                                                                                                       |                    |        | 7,728  |  |                   |        | 7,385  |  |      |     | 5      | % |   |         | 23,545  |  |   |         | 23,292  |  |  |     | 1  | %
|                                   |                                                                                                                                                                                                                                                                          |                    |        |        |  |                   |        |        |  |      |     |        |   |   |         |         |  |   |         |         |  |  |     |   
|Total operating costs and expenses |                                                                                                                                                                                                                                                                          |                    | 68,126 |        |  |                   | 63,507 |        |  |      | 7   | %      |   |   | 200,614 |         |  |   | 190,308 |         |  |  | 5   | % 
|                                   |                                                                                                                                                                                                                                                                          |                    |        |        |  |                   |        |        |  |      |     |        |   |   |         |         |  |   |         |         |  |  |     |   
|Operating income                   |                                                                                                                                                                                                                                                                          | $                  | 22,879 |        |  | $                 | 20,771 |        |  |      | 10  | %      |   | $ | 66,573  |         |  | $ | 56,801  |         |  |  | 17  | % 
|                                   |                                                                                                                                                                                                                                                                          |                    |        |        |  |                   |        |        |  |      |     |        |   |   |         |         |  |   |         |         |  |  |     |   

Net revenuesconsist primarily of national,
local and political airtime sales, net of sales adjustments and
agency commissions. Additional, but less significant, amounts
are generated from network compensation, internet revenues,
barter revenues, production revenues, tower rental income and
carriage or retransmission agreements.

Net revenues increased $6.7 million or 8%
and $20.1 million or 8% for the three and nine months ended
September 30, 2004, respectively, compared to the same
periods in the prior year. The increase is primarily driven by
increased political and local revenues. Political time sales
increased $5.1 million and $9.3 million for the three
and nine months ended September 30, 2004, respectively. We
expect this trend to continue into the beginning of the fourth
quarter of 2004, but expect political revenue to decrease
substantially in 2005.

Automotive-related advertising which makes up
approximately 25% of our net revenue increased $1.2 million
or 5% for the third quarter of 2004 and $11.0 million or
16% for the nine months ended September 2004 compared to the
comparable periods in the prior year. Net revenue attributable
to Banks Broadcasting, which was consolidated in accordance with
FIN 46 effective March 31, 2004, was $1.2 million
and $2.5 million for the three and nine months ended
September 30, 2004, respectively.

16



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##### Table of Contents



LIN TV CORP.


MANAGEMENTS DISCUSSION AND
ANALYSIS  (Continued)

Operating Costs and Expenses

Direct operating expenses (excluding
depreciation and amortization of intangible assets)consist primarily of news,
engineering, programming and music licensing costs and exclude
depreciation and amortization expense.

Selling, general and administrative
expensesconsist primarily of
employee salaries, sales commissions and other employee benefit
costs, advertising and promotional expenses and research
services. For the three and nine months ended September 30,
2004, selling, general and administrative expenses increased
$1.0 million to $22.7 million and $4.7 million to
$69.7 million, respectively, compared to the same periods
in the prior year. The increase is primarily due to increased
expenses of $0.7 million and $1.4 million for the
three and nine months ended September 30, 2004,
respectively, attributable to the consolidation of Banks
Broadcasting. The remaining increase is a combination of an
increase in sales commissions of $0.3 million and
$1.6 million for the three and nine months ended
September 30, 2004, respectively, corresponding to the
increase in time sales and other increases in employee
compensation expense.

Amortization of program rightsrepresents costs associated with
the acquisition of syndicated programming, features and
specials. Amortization of program rights increased
$0.8 million or 14% and $1.9 million or 12% for the
three and nine months ended September 30, 2004,
respectively, compared to the same periods in the prior year.
The increase is primarily due to amortization resulting from
reducing the carrying value of certain syndicated programming to
equal the amount of projected future net revenue.

Corporate
expenses, consisting of costs
associated with the centralized management of our stations,
increased $1.8 million for both the three and nine months
ended September 30, 2004 compared to the same periods in
the prior year. The increase in 2004 is primarily due to an
increase in executive compensation, including severance costs of
$0.9 million related to the departure of a company
executive. Corporate expenses of $0.2 million and
$0.4 million for the three and nine months ended
September 30, 2004, respectively, are attributable to the
consolidation of Banks Broadcasting.

Other (Income) Expense



| |                 
| | ----------------
| | Interest expense

The following table summarizes our total interest
expense:

|                               |                                                                 |                             |   |                   |        |      |   |       |        |  |   |        |        |  |   |        |        | 
|------------------------------ | --------------------------------------------------------------- | --------------------------- | - | ----------------- | ------ | ---- | - | ----- | ------ |  | - | ------ | ------ |  | - | ------ | ------ | 
|                               |                                                                 |                             |   |                  
|                               |                                                                 | Three Months Ended          |   | Nine Months Ended
|                               |                                                                 | September 30,               |   | September 30,    
|                               |                                                                 |                             |   |                  
|                               |                                                                 | 2004                        |   | 2003              |        | 2004 |   | 2003 
|                               |                                                                 |                             |   |                   |        |      |   |      
|Components of interest expense |                                                                 |                             |   |                   |        |      |   |       |        |  |   |        |        |  |   |       
|                               | Senior Credit Facility                                          |                             | $ | 2,465             |        |      | $ | 2,514 |        |  | $ | 7,130  |        |  | $ | 6,458  |       
|                               | $300,000, 8 3/8% Senior Subordinated
    Notes                  |                             |   |                  |        |      |   |      |        |  |   |       |        |  |   | 12,515 |       
|                               | $200,000, 6 1/2% Senior Subordinated
    Notes                  |                             |   | 3,376             |        |      |   | 3,370 |        |  |   | 10,166 |        |  |   | 5,243  |       
|                               | $125,000, 2.50% Exchangeable Senior Subordinated
    Debentures |                             |   | 1,870             |        |      |   | 1,869 |        |  |   | 5,651  |        |  |   | 2,849  |       
|                               | $166,440, 8% Senior Notes                                       |                             |   | 3,295             |        |      |   | 4,675 |        |  |   | 11,751 |        |  |   | 14,025 |       
|                               | $276,000, 10% Senior Discount Notes                             |                             |   |                  |        |      |   |      |        |  |   |       |        |  |   | 4,973  |       
|                               | $100,000, 10% Senior Discount Notes                             |                             |   |                  |        |      |   |      |        |  |   |       |        |  |   | 2,119  |       
|                               | Interest income                                                 |                             |   | (118              | )      |      |   | (174  | )      |  |   | (284   | )      |  |   | (924   | )     
|                               |                                                                 |                             |   |                   |        |      |   |       |        |  |   |        |        |  |   |       
|                               |                                                                 | Total interest expense, net |   | $                 | 10,888 |      |   | $     | 12,254 |  |   | $      | 34,414 |  |   | $      | 47,258 | 
|                               |                                                                 |                             |   |                   |        |      |   |       |        |  |   |        |        |  |   |       

17



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##### Table of Contents



LIN TV CORP.


MANAGEMENTS DISCUSSION AND
ANALYSIS  (Continued)

Interest expense, netdecreased $1.4 million or 11%
and $12.8 million or 27% for the three and nine months
ended September 30, 2004, respectively, compared to the
same periods in the prior year due to lower outstanding
borrowings and a lower average interest rate.

Share of income in equity investmentsincreased to $2.3 million and
$5.0 million for the three and nine months ended
September 30, 2004, respectively, compared to income of
$0.7 million and $2.1 million for the same periods in
the prior year. This increase was primarily the result of the
operating performance of the stations included in our joint
venture with NBC offset in part by the loss attributable to
Banks Broadcasting which became a consolidated entity effective
March 31, 2004 with the application of FIN 46.

Gain on derivative instrumentsconsists of mark-to-market
adjustments of the embedded derivative features contained in our
2.50% Exchangeable Senior Subordinated Debentures. Gain on
derivative instruments was $9.0 million and
$13.6 million for the three and nine months ended
September 30, 2004, respectively, and was due to
fluctuations in market interest rates, compared to gains of
$2.5 million and $7.3 million in the quarter and
year-to-date periods in the prior year, respectively.

We recorded a loss of $4.4 million for the
nine months ended September 30, 2004 related to the
write-off of unamortized financing fees and discounts and
associated costs in connection with the early extinguishment of
$38.6 million of 8% Senior Notes due 2008. We recorded
a loss of $53.1 million for the nine months ended
September 30, 2003 in connection with the early
extinguishment of debt, consisting of $276.0 million
aggregate principal amount of 10% Senior Discount Notes due
2008 and $100.0 million aggregate principal amount of
10% Senior Discount Add-On Notes due 2008.

Provision for Income Taxes

LIN TV Corps provision for income
taxes for the three months ended September 30, 2004
increased to approximately $7.8 million compared to a
provision of $6.5 million for the same period in the prior
year. The provision for income taxes for the nine months ended
September 30, 2004 increased to approximately
$17.0 million compared to a provision of $11.4 million
for the same period last year. The change for the three and nine
months ended September 30, 2004 is primarily due to
recording increased net income. In assessing the realizability
of deferred tax assets, management considers whether it is more
likely than not that some portion or all of the deferred tax
assets will be realized. Prior to January 1, 2002, we
recorded deferred tax liabilities relating to the difference in
the book and tax basis of goodwill and intangibles. The
reversals of those deferred tax liabilities were utilized to
support the recognition of the deferred tax assets recorded. As
a result of the adoption of SFAS No. 142, those
deferred tax liabilities will no longer reverse on a scheduled
basis and can no longer be utilized to support the realization
of deferred tax assets. LIN TV Corp. uses a discrete
provision in order to more accurately calculate their provision
for income taxes.

As of September 30, 2004, we have recorded a
valuation allowance on our net deferred tax assets of
$77.0 million. This valuation allowance may reverse at some
time in the future if management concludes that it is more
likely than not that the deferred tax assets will be realized.
We continue to monitor the need for a valuation allowance on a
quarterly basis. Any reversal will result in an increase in our
net income, but not to the full extent of the reversal, in the
quarter in which the reversal of the tax asset valuation
allowance is made.

Liquidity and Capital Resources

Our principal sources of funds for working
capital have historically been cash from operations, the
issuance of debt securities and borrowings under our senior
credit facilities. At September 30, 2004, we had cash of
$9.7 million and a $191.9 million committed revolving
credit facility of which $4.0 million is outstanding

18



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##### Table of Contents



LIN TV CORP.


MANAGEMENTS DISCUSSION AND
ANALYSIS  (Continued)

at September 30, 2004, leaving
$187.9 million committed, but undrawn. We have the ability
to increase the revolving credit commitments up to
$235.0 million. Our revolving credit facility is scheduled
to terminate on March 31, 2005. We anticipate renewing this
facility or replacing it with a similar revolving credit
facility prior to this date.

Contractual Obligations

The following table summarizes our estimated
material contractual cash obligations at September 30, 2004
(in thousands):

|                                                            |  |                 |        |           |  |           |         |            |  |       |         |  |  |   |         |  |  |   |         | 
|----------------------------------------------------------- |  | --------------- | ------ | --------- |  | --------- | ------- | ---------- |  | ----- | ------- |  |  | - | ------- |  |  | - | ------- | 
|                                                            |  | October through |        |           |  |           |         |            |  |      
|                                                            |  | December 2004   |        | 2005-2007 |  | 2008-2009 |         | Thereafter |  | Total
|                                                            |  |                 |        |           |  |           |         |            |  |      
|Principal payments and mandatory redemptions on
    debt(1) |  | $               | 1,750  |           |  | $         | 168,500 |            |  | $     | 166,440 |  |  | $ | 325,000 |  |  | $ | 661,690 | 
|Cash interest on debt(2)                                    |  |                 | 8,963  |           |  |           | 99,983  |            |  |       | 33,249  |  |  |   | 117,044 |  |  |   | 259,239 | 
|Program payments(3)                                         |  |                 | 6,592  |           |  |           | 48,810  |            |  |       | 6,848   |  |  |   | 1,310   |  |  |   | 63,560  | 
|Operating leases(4)                                         |  |                 | 292    |           |  |           | 2,579   |            |  |       | 704     |  |  |   | 3,709   |  |  |   | 7,284   | 
|Local marketing agreement payments(5)                       |  |                 | 912    |           |  |           | 2,203   |            |  |       |        |  |  |   |        |  |  |   | 3,115   | 
|                                                            |  |                 |        |           |  |           |         |            |  |       |         |  |  |   |         |  |  |   |         | 
|Total                                                       |  | $               | 18,509 |           |  | $         | 322,075 |            |  | $     | 207,241 |  |  | $ | 447,063 |  |  | $ | 994,888 | 
|                                                            |  |                 |        |           |  |           |         |            |  |       |         |  |  |   |         |  |  |   |         | 



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | We are obligated to repay the revolving portion
    of our Senior Credit Facility in March 2005 and the remaining
    balance in December 2007, our 8% Senior Notes in June 2008,
    our 6 1/2% Senior Subordinated Notes in May 2013 and
    our 2.50% Exchangeable Senior Subordinated Debentures in May
    2033. However, 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 May 15, 2008, 2013,
    2018, 2023 and 2028.                                                                                                                                                                                                                                                                                                             
|   
|(2) | We have contractual obligations to pay cash
    interest on our Senior Credit Facility, as well as commitment
    fees of approximately 0.50% on our Senior Credit Facility
    through 2007, on our 8% Senior Notes through 2008, on our
    6 1/2% Senior Subordinated Notes 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.
|   
|(3) | We have entered into commitments for future
    syndicated news, entertainment, and sports programming. We have
    recorded $39.3 million of program obligations as of
    September 30, 2004 and have unrecorded commitments of
    $24.3 million for programming that is not available to air
    as of September 30, 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|(4) | We lease land, buildings, vehicles and equipment
    under non-cancelable operating lease agreements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|(5) | 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 connection with these agreements,
    we are committed to pay minimum future periodic fees totaling
    $3.1 million as of September 30, 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

Net cash provided by operating activitiesincreased $30.1 million to
$61.4 million for the nine months ended September 30,
2004 compared to $31.3 million in the same period in the
prior year. The increase is the result of an increase in our
operating income for the nine months ended September 30,
2004 compared

19



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LIN TV CORP.


MANAGEMENTS DISCUSSION AND
ANALYSIS  (Continued)

to the same period in the prior year primarily
due to lower interest expense in 2004 combined with improved
working capital.

Net cash provided by investing activitieswas $2.2 million for the nine
months ended September 30, 2004 compared to
$23.5 million in the same period in the prior year. This
change is primarily the result of the liquidation of our
short-term investments during the first quarter of 2003.

Net cash used in financing activitiesdecreased $121.7 million to
$63.4 million for the nine months ended September 30,
2004 compared to $185.1 million for the same period in the
prior year. This decrease is the result of the retirement of
$376.0 million aggregate principle amount of
10% Senior Discount Notes and 10% Senior Discount
Add-On Notes in the second quarter of 2003. This debt retirement
was funded by proceeds from the $175.0 million term loan
entered into during the first quarter of 2003, a
$75.0 million drawdown on our existing revolving credit
facility and cash on hand.

Based on the current level of our operations and
anticipated future growth, both internally generated as well as
through acquisition, we believe that our cash flows from
operations, together with available borrowings under our senior
credit facilities and anticipated refinancings, will be
sufficient to meet our anticipated requirements for working
capital, capital expenditures, interest payments and scheduled
principal payments for at least the next 12 months.

Recent Accounting Pronouncements

Emerging Issues Task Force (EITF)
Issue 04-8, The Effect of Contingently Convertible
Debt on Diluted Earnings per Share which is effective for
us as of December 31, 2004, requires that the potential
shares associated with the contingent conversion feature of our
2.50% Exchangeable Senior Subordinated Debentures be included in
the calculation of diluted EPS regardless of whether the market
price trigger has been met. We do not believe that
EITF 04-8 will have a significant impact on our results of
operations.

20



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##### Table of Contents








|        |                                                               
|------- | --------------------------------------------------------------
|Item 3. | Quantitative and Qualitative Disclosures
    About Market Risk

We are exposed to market risk from changes in
interest rates principally with respect to our senior credit
facilities, which are priced based on certain variable interest
rate alternatives. There was approximately $170.3 million
outstanding as of September 30, 2004 under our senior
credit facilities.

Accordingly, we are exposed to potential losses
related to increases in interest rates. A hypothetical one
percent increase in the floating rate used as the basis for the
interest charged on the senior credit facility as of
September 30, 2004 would result in an estimated
$1.7 million increase in annualized interest expense
assuming a constant balance outstanding of $170.3 million.

Our 2.50% Exchangeable Senior Subordinated
Debentures have certain embedded derivative features that are
required to be separately identified and recorded at fair value
with a mark-to-market adjustment required each quarter. The
value of these features on issuance of the debentures was
$21.1 million and this amount was recorded as an original
issue discount and is being accreted through interest expense
over the period to May 2008. The derivative features are
recorded at fair market value in the line item other
liabilities. We have recorded a gain on derivative
instruments in connection with the mark-to-market of these
derivative features of $9.0 million and $13.6 million
for the three and nine months ended September 30, 2004,
respectively.

We are also exposed to market risk related to
changes in the interest rates through our investing activities
and our floating rate credit arrangements. With respect to
borrowings, our ability to finance future acquisition
transactions may be impacted if we are unable to obtain
appropriate financing at acceptable rates.






|        |                        
|------- | -----------------------
|Item 4. | Controls and Procedures

Evaluation of Disclosure Controls and
Procedures.Based on their evaluation
of our disclosure controls and procedures (as defined in
Rules 13a-14(c) and 15d-14(c) under the Securities Exchange
Act of 1934) as of September 30, 2004, our chief executive
officer and chief financial officer have concluded that our
disclosure controls and procedures are designed to ensure that
information required to be disclosed by us in the reports that
we file or submit under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the
SECs rules and forms and are operating in an effective
manner.

Changes in Internal Controls over Financial
Reporting.There were no significant
changes in our internal controls over financial reporting or in
other factors that could significantly affect these controls
during the quarter ended September 30, 2004.




PART II: OTHER INFORMATION






|        |                  
|------- | -----------------
|Item 1. | Legal Proceedings

We are involved in various claims and lawsuits
that are generally incidental to our business. We are vigorously
contesting all of these matters and believe that their ultimate
resolution will not have a material adverse effect on us.






|        |         
|------- | --------
|Item 6. | Exhibits

Exhibits:

| |      |  |  |                                                                                                                                                   
| | ---- |  |  | --------------------------------------------------------------------------------------------------------------------------------------------------
| | 10.1 |  |  | Separation Agreement and General Release entered
    into by and between LIN Television Corporation and Deborah
    Jacobson, dated July 20, 2004.
| | 31.1 |  |  | Certification pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002 of the Chief Executive Officer of
    LIN TV Corp.                    
| | 31.2 |  |  | Certification pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002 of the Chief Financial Officer of
    LIN TV Corp.                    

21



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##### Table of Contents



| |      |  |  |                                                                                                                                                                               
| | ---- |  |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 31.3 |  |  | Certification pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002 of the Chief Executive Officer of LIN
    Television Corporation.                                 
| | 31.4 |  |  | Certification pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002 of the 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
    Principal Financial Officers of LIN TV Corp.               
| | 32.2 |  |  | Certification pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002 of the Chief Executive Officer and
    Principal Financial Officers of LIN Television Corporation.

22



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##### Table of Contents






SIGNATURES

Pursuant to the requirements of Section 13
or 15(d) of the Securities Exchange Act of 1934, each of
LIN TV Corp. and LIN Television Corporation, has duly
caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.



| |                           
| | --------------------------
| | LIN TV CORP.              
| | LIN TELEVISION CORPORATION



| |     |                       
| | --- | ----------------------
| | By: | /s/ VINCENT L. SADUSKY

| |                                          
| | -----------------------------------------
| |                                          
| | Vincent L. Sadusky                       
| | Chief Financial Officer and
    Treasurer



| |     |                          
| | --- | -------------------------
| | By: | /s/ WILLIAM A. CUNNINGHAM

| |                               
| | ------------------------------
| |                               
| | William A. Cunningham         
| | Vice President and Controller 
| | (Principal Accounting Officer)

Dated: November 4, 2004

23



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##### Table of Contents





|        |                     
|------- | --------------------
|Item 1. | Financial Statements

|                                                         |  |  |    | 
|-------------------------------------------------------- |  |  | -- | 
|LIN Television Corporation                               |  |  |    | 
|Condensed Consolidated Balance Sheets                    |  |  | 25 | 
|Condensed Consolidated Statements of Operations          |  |  | 26 | 
|Condensed Consolidated Statements of Cash Flows          |  |  | 27 | 
|Notes to Condensed Consolidated Financial
    Statements |  |  | 28 | 

24



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##### Table of Contents



LIN TELEVISION CORPORATION

CONDENSED CONSOLIDATED BALANCE
SHEETS

|                                                                                                                           |                                                                 |                       |           |              |  |   |           |           | 
|-------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------- | --------------------- | --------- | ------------ |  | - | --------- | --------- | 
|                                                                                                                           |                                                                 | September 30,         |           | December 31,
|                                                                                                                           |                                                                 | 2004                  |           | 2003        
|                                                                                                                           |                                                                 |                       |           |             
|                                                                                                                           |                                                                 | (Unaudited)           |           |             
|                                                                                                                           |                                                                 |                      
|                                                                                                                           |                                                                 | (In thousands, except
|                                                                                                                           |                                                                 | share data)          
|ASSETS                                                                                                                    
|Current assets:                                                                                                            |                                                                 |                       |           |              |  |   |           |          
|Cash and cash equivalents                                                                                                  |                                                                 | $                     | 9,677     |              |  | $ | 9,475     |          
|Accounts receivable, less allowance for doubtful
    accounts (2004 - $1,146; 2003 - $1,698)                               |                                                                 |                       | 67,024    |              |  |   | 72,340    |          
|Program rights                                                                                                             |                                                                 |                       | 20,154    |              |  |   | 17,661    |          
|Other current assets                                                                                                       |                                                                 |                       | 6,634     |              |  |   | 3,216     |          
|                                                                                                                           |                                                                 |                       |           |              |  |   |           |          
|                                                                                                                           | Total current assets                                            |                       |           | 103,489      |  |   |           | 102,692   | 
|Property and equipment, net                                                                                                |                                                                 |                       | 195,972   |              |  |   | 203,049   |          
|Deferred financing costs                                                                                                   |                                                                 |                       | 11,762    |              |  |   | 14,332    |          
|Equity investments                                                                                                         |                                                                 |                       | 65,844    |              |  |   | 77,305    |          
|Program rights                                                                                                             |                                                                 |                       | 13,814    |              |  |   | 11,444    |          
|Goodwill                                                                                                                   |                                                                 |                       | 583,097   |              |  |   | 586,269   |          
|Broadcast licenses and other intangible assets,
    net                                                                    |                                                                 |                       | 1,118,103 |              |  |   | 1,105,997 |          
|Other assets                                                                                                               |                                                                 |                       | 15,587    |              |  |   | 14,822    |          
|                                                                                                                           |                                                                 |                       |           |              |  |   |           |          
|                                                                                                                           | Total assets                                                    |                       | $         | 2,107,668    |  |   | $         | 2,115,910 | 
|                                                                                                                           |                                                                 |                       |           |              |  |   |           |          
|                                                                                                                          
|LIABILITIES, PREFERRED STOCK AND
    STOCKHOLDERS EQUITY                                                                 
|Current liabilities:                                                                                                       |                                                                 |                       |           |              |  |   |           |          
|Current portion of long-term debt                                                                                          |                                                                 | $                     | 11,000    |              |  | $ | 7,000     |          
|Accounts payable                                                                                                           |                                                                 |                       | 6,282     |              |  |   | 7,169     |          
|Accrued interest expense                                                                                                   |                                                                 |                       | 9,090     |              |  |   | 9,846     |          
|Accrued sales volume discount                                                                                              |                                                                 |                       | 4,309     |              |  |   | 6,075     |          
|Other accrued expenses                                                                                                     |                                                                 |                       | 18,276    |              |  |   | 13,743    |          
|Program obligations                                                                                                        |                                                                 |                       | 26,170    |              |  |   | 23,042    |          
|                                                                                                                           |                                                                 |                       |           |              |  |   |           |          
|                                                                                                                           | Total current liabilities                                       |                       |           | 75,127       |  |   |           | 66,875    | 
|Long-term debt, excluding current portion                                                                                  |                                                                 |                       | 632,303   |              |  |   | 693,367   |          
|Deferred income taxes, net                                                                                                 |                                                                 |                       | 538,500   |              |  |   | 527,588   |          
|Program obligations                                                                                                        |                                                                 |                       | 13,128    |              |  |   | 11,640    |          
|Other liabilities                                                                                                          |                                                                 |                       | 39,328    |              |  |   | 54,306    |          
|                                                                                                                           |                                                                 |                       |           |              |  |   |           |          
|                                                                                                                           | Total liabilities                                               |                       |           | 1,298,386    |  |   |           | 1,353,776 | 
|                                                                                                                           |                                                                 |                       |           |              |  |   |           |          
|Preferred stock of Banks Broadcasting, Inc.,
    $0.01 par value, 173,822 issued and outstanding at
    September 30, 2004 |                                                                 |                       | 14,440    |              |  |   |          |          
|                                                                                                                           |                                                                 |                       |           |              |  |   |           |          
|Stockholders equity:                                                                                                      |                                                                 |                       |           |              |  |   |           |          
|Common stock, $0.01 par value,
    1000 shares authorized, issued and outstanding                                          |                                                                 |                       |          |              |  |   |          |          
|Additional paid-in capital                                                                                                 |                                                                 |                       | 1,069,310 |              |  |   | 1,067,398 |          
|Accumulated deficit                                                                                                        |                                                                 |                       | (264,009  | )            |  |   | (294,805  | )        
|Accumulated other comprehensive loss                                                                                       |                                                                 |                       | (10,459   | )            |  |   | (10,459   | )        
|                                                                                                                           |                                                                 |                       |           |              |  |   |           |          
|                                                                                                                           | Total stockholders equity                                      |                       |           | 794,842      |  |   |           | 762,134   | 
|                                                                                                                           |                                                                 |                       |           |              |  |   |           |          
|                                                                                                                           | Total liabilities, preferred stock and
    stockholders equity |                       | $         | 2,107,668    |  |   | $         | 2,115,910 | 
|                                                                                                                           |                                                                 |                       |           |              |  |   |           |          

The accompanying notes are an integral part of
the condensed consolidated financial statements.

25



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##### Table of Contents



LIN TELEVISION CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS

|                                                                                                                                           |                                                                                                                                                                                                                                                                          |                                              |        |                   |   |      |        |        |   |   |         |         |   |   |         |        |  
|------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------- | ------ | ----------------- | - | ---- | ------ | ------ | - | - | ------- | ------- | - | - | ------- | ------ | -
|                                                                                                                                           |                                                                                                                                                                                                                                                                          |                                              |        |                  
|                                                                                                                                           |                                                                                                                                                                                                                                                                          | Three Months Ended                           |        | Nine Months Ended
|                                                                                                                                           |                                                                                                                                                                                                                                                                          | September 30,                                |        | September 30,    
|                                                                                                                                           |                                                                                                                                                                                                                                                                          |                                              |        |                  
|                                                                                                                                           |                                                                                                                                                                                                                                                                          | 2004                                         |        | 2003              |   | 2004 |        | 2003  
|                                                                                                                                           |                                                                                                                                                                                                                                                                          |                                              |        |                   |   |      |        |       
|                                                                                                                                           |                                                                                                                                                                                                                                                                          |                                             
|                                                                                                                                           |                                                                                                                                                                                                                                                                          | (In thousands, except per share information)
|                                                                                                                                           |                                                                                                                                                                                                                                                                          |                                             
|                                                                                                                                           |                                                                                                                                                                                                                                                                          | (Unaudited)                                 
|Net revenues                                                                                                                               |                                                                                                                                                                                                                                                                          | $                                            | 91,005 |                   |   | $    | 84,278 |        |   | $ | 267,187 |         |   | $ | 247,109 |       
|Operating costs and expenses:                                                                                                              |                                                                                                                                                                                                                                                                          |                                              |        |                   |   |      |        |        |   |   |         |         |   |   |         |       
|                                                                                                                                           | Direct operating (excluding depreciation of
    $7.5 million and $7.1 million for the three months
    ended September 30, 2004 and 2003, respectively, and
    $22.7 million and $22.5 million for the nine months
    ended September 30, 2004 and 2003, respectively) |                                              |        | 25,638            |   |      |        | 24,970 |   |   |         | 75,658  |   |   |         | 73,933 |  
|                                                                                                                                           | Selling, general and administrative                                                                                                                                                                                                                                      |                                              |        | 22,737            |   |      |        | 21,751 |   |   |         | 69,725  |   |   |         | 64,982 |  
|                                                                                                                                           | Amortization of program rights                                                                                                                                                                                                                                           |                                              |        | 6,481             |   |      |        | 5,706  |   |   |         | 18,116  |   |   |         | 16,202 |  
|                                                                                                                                           | Corporate                                                                                                                                                                                                                                                                |                                              |        | 5,542             |   |      |        | 3,695  |   |   |         | 13,570  |   |   |         | 11,899 |  
|                                                                                                                                           | Depreciation and amortization of intangible assets                                                                                                                                                                                                                       |                                              |        | 7,728             |   |      |        | 7,385  |   |   |         | 23,545  |   |   |         | 23,292 |  
|                                                                                                                                           |                                                                                                                                                                                                                                                                          |                                              |        |                   |   |      |        |        |   |   |         |         |   |   |         |       
|Total operating costs and expenses                                                                                                         |                                                                                                                                                                                                                                                                          |                                              | 68,126 |                   |   |      | 63,507 |        |   |   | 200,614 |         |   |   | 190,308 |       
|                                                                                                                                           |                                                                                                                                                                                                                                                                          |                                              |        |                   |   |      |        |        |   |   |         |         |   |   |         |       
|Operating income                                                                                                                           |                                                                                                                                                                                                                                                                          |                                              | 22,879 |                   |   |      | 20,771 |        |   |   | 66,573  |         |   |   | 56,801  |       
|Other (income) expense:                                                                                                                    |                                                                                                                                                                                                                                                                          |                                              |        |                   |   |      |        |        |   |   |         |         |   |   |         |       
|                                                                                                                                           | Interest expense, net                                                                                                                                                                                                                                                    |                                              |        | 10,888            |   |      |        | 12,254 |   |   |         | 34,414  |   |   |         | 47,258 |  
|                                                                                                                                           | Share of income in equity investments                                                                                                                                                                                                                                    |                                              |        | (2,250            | ) |      |        | (736   | ) |   |         | (5,014  | ) |   |         | (2,136 | )
|                                                                                                                                           | Minority interest in loss of Banks Broadcasting,
    Inc.                                                                                                                                                                                                                |                                              |        | (226              | ) |      |        |       |   |   |         | (472    | ) |   |         |       |  
|                                                                                                                                           | Gain on derivative instruments                                                                                                                                                                                                                                           |                                              |        | (9,026            | ) |      |        | (2,490 | ) |   |         | (13,646 | ) |   |         | (7,250 | )
|                                                                                                                                           | Loss on early extinguishment of debt                                                                                                                                                                                                                                     |                                              |        |                  |   |      |        |       |   |   |         | 4,447   |   |   |         | 53,105 |  
|                                                                                                                                           | Other, net                                                                                                                                                                                                                                                               |                                              |        | 917               |   |      |        | (80    | ) |   |         | 1,138   |   |   |         | 711    |  
|                                                                                                                                           |                                                                                                                                                                                                                                                                          |                                              |        |                   |   |      |        |        |   |   |         |         |   |   |         |       
|Total other expense, net                                                                                                                   |                                                                                                                                                                                                                                                                          |                                              | 303    |                   |   |      | 8,948  |        |   |   | 20,867  |         |   |   | 91,688  |       
|Income (loss) from continuing operations before
    provision for income taxes and cumulative effect of change in
    accounting principle |                                                                                                                                                                                                                                                                          |                                              | 22,576 |                   |   |      | 11,823 |        |   |   | 45,706  |         |   |   | (34,887 | )     
|Provision for income taxes                                                                                                                 |                                                                                                                                                                                                                                                                          |                                              | 7,760  |                   |   |      | 6,509  |        |   |   | 16,960  |         |   |   | 11,371  |       
|                                                                                                                                           |                                                                                                                                                                                                                                                                          |                                              |        |                   |   |      |        |        |   |   |         |         |   |   |         |       
|Income (loss) from continuing operations before
    cumulative effect of change in accounting principle                                    |                                                                                                                                                                                                                                                                          |                                              | 14,816 |                   |   |      | 5,314  |        |   |   | 28,746  |         |   |   | (46,258 | )     
|Discontinued operations:                                                                                                                   |                                                                                                                                                                                                                                                                          |                                              |        |                   |   |      |        |        |   |   |         |         |   |   |         |       
|                                                                                                                                           | Loss (income) from discontinued operations, net
    of tax provision of $206 and $618 for the three and nine months
    ended September 30, 2003, respectively, and $311 for the
    nine months ended September 30, 2004                                                |                                              |        |                  |   |      |        | 290    |   |   |         | (44     | ) |   |         | 178    |  
|                                                                                                                                           | (Gain) loss from sale of discontinued operations,
    net of tax provision of $109 for the three and nine months ended
    September 30, 2003 and a tax benefit of $1,094 for the nine
    months ended September 30, 2004                                               |                                              |        |                  |   |      |        | (864   | ) |   |         | 1,284   |   |   |         | (212   | )
|Cumulative effect of change in accounting
    principle, net of a tax effect of $0                                                         |                                                                                                                                                                                                                                                                          |                                              |       |                   |   |      |       |        |   |   | (3,290  | )       |   |   |        |       
|                                                                                                                                           |                                                                                                                                                                                                                                                                          |                                              |        |                   |   |      |        |        |   |   |         |         |   |   |         |       
|Net income (loss)                                                                                                                          |                                                                                                                                                                                                                                                                          | $                                            | 14,816 |                   |   | $    | 5,888  |        |   | $ | 30,796  |         |   | $ | (46,224 | )     
|                                                                                                                                           |                                                                                                                                                                                                                                                                          |                                              |        |                   |   |      |        |        |   |   |         |         |   |   |         |       

The accompanying notes are an integral part of
the condensed consolidated financial statements.

26



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##### Table of Contents



LIN TELEVISION CORPORATION



CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS


|                                                                                                                               |                                                                            |                   |         |         |   |   |          |         |  
|------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------------------------- | ----------------- | ------- | ------- | - | - | -------- | ------- | -
|                                                                                                                               |                                                                            |                  
|                                                                                                                               |                                                                            | Nine Months Ended
|                                                                                                                               |                                                                            | September 30,    
|                                                                                                                               |                                                                            |                  
|                                                                                                                               |                                                                            | 2004              |         | 2003   
|                                                                                                                               |                                                                            |                   |         |        
|                                                                                                                               |                                                                            |                  
|                                                                                                                               |                                                                            | (In thousands)   
|                                                                                                                               |                                                                            | (Unaudited)      
|OPERATING ACTIVITIES:                                                                                                          |                                                                            |                   |         |         |   |   |          |        
|Net income (loss)                                                                                                              |                                                                            | $                 | 30,796  |         |   | $ | (46,224  | )      
|Adjustment to reconcile net loss to net cash
    provided by operating activities:                                             |                                                                            |                   |         |         |   |   |          |        
|                                                                                                                               | Depreciation and amortization of intangible assets                         |                   |         | 23,545  |   |   |          | 23,292  |  
|                                                                                                                               | Amortization of financing costs and note discounts                         |                   |         | 6,036   |   |   |          | 12,494  |  
|                                                                                                                               | Amortization of program rights                                             |                   |         | 18,116  |   |   |          | 16,202  |  
|                                                                                                                               | Program payments                                                           |                   |         | (18,336 | ) |   |          | (16,948 | )
|                                                                                                                               | Loss on extinguishment of debt                                             |                   |         | 4,447   |   |   |          | 53,105  |  
|                                                                                                                               | Cumulative effect of change in accounting
    principle, net of tax impact |                   |         | (3,290  | ) |   |          |        |  
|                                                                                                                               | Gain on derivative instruments                                             |                   |         | (13,646 | ) |   |          | (7,250  | )
|                                                                                                                               | Loss (gain) on sale of stations, net of tax
    impact                     |                   |         | 1,284   |   |   |          | (212    | )
|                                                                                                                               | Share of income in equity investments                                      |                   |         | (5,014  | ) |   |          | (2,136  | )
|                                                                                                                               | Deferred income taxes, net                                                 |                   |         | 13,000  |   |   |          | 9,828   |  
|                                                                                                                               | Other, net                                                                 |                   |         | (48     | ) |   |          | 858     |  
|Changes in operating assets and liabilities, net
    of acquisitions and disposals:                                            |                                                                            |                   |         |         |   |   |          |        
|                                                                                                                               | Accounts receivable                                                        |                   |         | 5,092   |   |   |          | 8,714   |  
|                                                                                                                               | Program rights, net of program obligations                                 |                   |         | 233     |   |   |          | 3,491   |  
|                                                                                                                               | Other assets                                                               |                   |         | (4,146  | ) |   |          | (6,429  | )
|                                                                                                                               | Accounts payable                                                           |                   |         | (1,122  | ) |   |          | (7,267  | )
|                                                                                                                               | Accrued interest expense                                                   |                   |         | (756    | ) |   |          | (6,004  | )
|                                                                                                                               | Accrued sales volume discount                                              |                   |         | (1,766  | ) |   |          | (1,404  | )
|                                                                                                                               | Other accrued expenses                                                     |                   |         | 6,957   |   |   |          | (2,786  | )
|                                                                                                                               |                                                                            |                   |         |         |   |   |          |        
|Net cash provided by operating
    activities                                                                                  |                                                                            |                   | 61,382  |         |   |   | 31,324   |        
|INVESTING ACTIVITIES:                                                                                                          |                                                                            |                   |         |         |   |   |          |        
|Capital expenditures                                                                                                           |                                                                            |                   | (17,500 | )       |   |   | (15,006  | )      
|Proceeds from sale of broadcast licenses and
    related operating assets                                                      |                                                                            |                   | 24,000  |         |   |   | 10,000   |        
|Investment in equity investments                                                                                               |                                                                            |                   | (650    | )       |   |   |         |        
|Capital distributions from equity investments                                                                                  |                                                                            |                   | 5,503   |         |   |   | 4,891    |        
|Acquisition of broadcast licenses                                                                                              |                                                                            |                   | (9,152  | )       |   |   |         |        
|Other, net                                                                                                                     |                                                                            |                   | 29      |         |   |   | (30      | )      
|Proceeds from liquidation of short-term
    investments                                                                        |                                                                            |                   |        |         |   |   | 23,691   |        
|                                                                                                                               |                                                                            |                   |         |         |   |   |          |        
|Net cash provided by investing
    activities                                                                                  |                                                                            |                   | 2,230   |         |   |   | 23,546   |        
|                                                                                                                               |                                                                            |                   |         |         |   |   |          |        
|FINANCING ACTIVITIES:                                                                                                          |                                                                            |                   |         |         |   |   |          |        
|Net proceeds on exercises of employee stock
    options and phantom stock units and employee stock purchase plan
    issuances |                                                                            |                   | 1,563   |         |   |   | 1,803    |        
|Proceeds from long-term debt                                                                                                   |                                                                            |                   |        |         |   |   | 325,000  |        
|Proceeds from Senior Credit Facilities                                                                                         |                                                                            |                   |        |         |   |   | 175,000  |        
|Long-term debt financing costs                                                                                                 |                                                                            |                   | (147    | )       |   |   | (10,049  | )      
|Net (repayments) proceeds from revolver debt                                                                                   |                                                                            |                   | (18,000 | )       |   |   | 27,000   |        
|Principal payments on long-term debt                                                                                           |                                                                            |                   | (43,810 | )       |   |   | (677,750 | )      
|Cash expenses associated with early
    extinguishment of debt                                                                 |                                                                            |                   | (3,016  | )       |   |   | (26,056  | )      
|                                                                                                                               |                                                                            |                   |         |         |   |   |          |        
|Net cash used in financing
    activities                                                                                      |                                                                            |                   | (63,410 | )       |   |   | (185,052 | )      
|                                                                                                                               |                                                                            |                   |         |         |   |   |          |        
|Net increase (decrease) in cash and cash
    equivalents                                                                       |                                                                            |                   | 202     |         |   |   | (130,182 | )      
|Cash and cash equivalents at the beginning of the
    period                                                                   |                                                                            |                   | 9,475   |         |   |   | 143,860  |        
|                                                                                                                               |                                                                            |                   |         |         |   |   |          |        
|Cash and cash equivalents at the end of the
    period                                                                         |                                                                            | $                 | 9,677   |         |   | $ | 13,678   |        
|                                                                                                                               |                                                                            |                   |         |         |   |   |          |        

The accompanying notes are an integral part of
the condensed consolidated financial statements.

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##### Table of Contents



LIN TELEVISION CORPORATION



NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS


(Unaudited)




|         |                       
|-------- | ----------------------
|Note 1  | Basis of Presentation:

LIN TV Corp., together with its
subsidiaries, including LIN Television Corporation (LIN
Television) (together, the Company), is a
television station group operator in the United States and
Puerto Rico. LIN TV Corp. and its subsidiaries are
affiliates of Hicks, Muse, Tate & Furst Incorporated
(Hicks Muse).

LIN TV Corp. guarantees all debt of LIN
Television Corporation except for its $166.4 million,
8% Senior Notes due 2008. All of the consolidated
wholly-owned subsidiaries of LIN Television Corporation fully
and unconditionally guarantee all the Companys debt on a
joint and several basis.

Certain reclassifications have been made to the
prior period financial statements to conform to the current
period financial statement presentation.

These condensed consolidated financial statements
have been prepared without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. The Company filed
audited financial statements for the year ended
December 31, 2003 in its annual report on Form 10-K/A,
which includes all such information and disclosures.

In the opinion of management, the accompanying
unaudited interim financial statements contain all adjustments
(consisting of normal recurring adjustments and adjustments
related to the application of FASB Interpretation No. 46)
necessary to summarize fairly the financial position, results of
operations and cash flows of the Company for the periods
presented. The interim results of operations are not necessarily
indicative of the results to be expected for the full year.

The Companys preparation of financial
statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions
that affect the reported amount of assets and liabilities and
disclosure of contingent assets and liabilities at the dates of
the financial statements and the reported amounts of revenues
and expenses during the reported periods. Estimates are used
when accounting for the collectibility of accounts receivable
and valuing intangible assets, deferred tax assets and net
assets of businesses acquired. Actual results could differ from
these estimates.

Note 2  Stock-Based
Compensation:

The Company accounts for its stock-based employee
compensation plans under the recognition and measurement
principles of Accounting Principles Board (APB)
Opinion No. 25, Accounting for Stock Issued to
Employees, and related interpretations.

28



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##### Table of Contents



LIN TELEVISION CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The following table illustrates the effect on net
income (loss) if the Company had applied the fair value
recognition provisions of Statement of Financial Accounting
Standards (SFAS) No. 123, Accounting for
Stock-Based Compensation, to stock-based employee
compensation (in thousands, except for per share data).

|                                                                                                                                                       |  |                    |        |                   |  |      |       |      |  |   |        |   |  |   |         |  
|------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------ | ------ | ----------------- |  | ---- | ----- | ---- |  | - | ------ | - |  | - | ------- | -
|                                                                                                                                                       |  |                    |        |                  
|                                                                                                                                                       |  | Three Months Ended |        | Nine Months Ended
|                                                                                                                                                       |  | September 30,      |        | September 30,    
|                                                                                                                                                       |  |                    |        |                  
|                                                                                                                                                       |  | 2004               |        | 2003              |  | 2004 |       | 2003
|                                                                                                                                                       |  |                    |        |                   |  |      |       |     
|Net income (loss), as reported                                                                                                                         |  | $                  | 14,816 |                   |  | $    | 5,888 |      |  | $ | 30,796 |   |  | $ | (46,224 | )
|Add: Stock-based employee compensation expense,
    included in reported net income (loss), net of related tax effect                                  |  |                    | 117    |                   |  |      |      |      |  |   | 156    |   |  |   |        |  
|Deduct: Total stock-based employee compensation
    expense determined under the fair value based method for all
    awards, net of related tax effect |  |                    | (1,016 | )                 |  |      | (764  | )    |  |   | (2,516 | ) |  |   | (2,210  | )
|                                                                                                                                                       |  |                    |        |                   |  |      |       |      |  |   |        |   |  |   |         |  
|Pro forma net income (loss)                                                                                                                            |  | $                  | 13,917 |                   |  | $    | 5,124 |      |  | $ | 28,436 |   |  | $ | (48,434 | )
|                                                                                                                                                       |  |                    |        |                   |  |      |       |      |  |   |        |   |  |   |         |  

The fair value of each option is estimated on the
date of grant using the Black-Scholes option-pricing model with
the following assumptions during the three and nine months ended
September 30, 2004 and 2003, respectively:

|                               |  |                    |            |                   |  |      |            |      |  |  |            |  |  |  |            | 
|------------------------------ |  | ------------------ | ---------- | ----------------- |  | ---- | ---------- | ---- |  |  | ---------- |  |  |  | ---------- | 
|                               |  |                    |            |                  
|                               |  | Three Months Ended |            | Nine Months Ended
|                               |  | September 30,      |            | September 30,    
|                               |  |                    |            |                  
|                               |  | 2004               |            | 2003              |  | 2004 |            | 2003
|                               |  |                    |            |                   |  |      |            |     
|Volatility                     |  |                    | 24%        |                   |  |      | 30%        |      |  |  | 24%        |  |  |  | 30%        | 
|Risk-free interest rates       |  |                    | 2.0 - 3.2% |                   |  |      | 1.5 - 3.0% |      |  |  | 2.0 - 4.4% |  |  |  | 1.5 - 3.0% | 
|Weighted average expected life |  |                    | 4.5 years  |                   |  |      | 3.5 years  |      |  |  | 5 years    |  |  |  | 3.5 years  | 
|Dividend yields                |  |                    | 0%         |                   |  |      | 0%         |      |  |  | 0%         |  |  |  | 0%         | 



|         |                        
|-------- | -----------------------
|Note 3  | Disposition of Station:

On May 14, 2004, the Company completed the
sale of WEYI-TV, the NBC affiliate serving Flint, Michigan, for
$24.0 million.

The operating results of this station for the
three and nine month periods ended September 30, 2004 and
2003, respectively, have been excluded from continuing
operations and included in discontinued operations under the
provisions of SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets. During the
nine month period ended September 30, 2004, the Company
recorded a loss on the sale of WEYI-TV of $1.3 million, net
of a tax benefit of $1.1 million, compared to a gain on the
sale of KRBC-TV and KACB-TV of $212,000 recorded during the nine
month period ended September 30, 2003.

|                      |  |                    |   |                   |  |      |       |      |  |   |       |  |  |   |       | 
|--------------------- |  | ------------------ | - | ----------------- |  | ---- | ----- | ---- |  | - | ----- |  |  | - | ----- | 
|                      |  |                    |   |                  
|                      |  | Three Months Ended |   | Nine Months Ended
|                      |  | September, 30      |   | September, 30    
|                      |  |                    |   |                  
|                      |  | 2004               |   | 2003              |  | 2004 |       | 2003
|                      |  |                    |   |                   |  |      |       |     
|Net revenues          |  | $                  |  |                   |  | $    | 1,490 |      |  | $ | 3,258 |  |  | $ | 4,991 | 
|Pre-tax (loss) income |  |                    |  |                   |  |      | (84   | )    |  |   | 355   |  |  |   | 440   | 

29



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##### Table of Contents



LIN TELEVISION CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|         |             
|-------- | ------------
|Note 4  | Investments:

The Company has investments in a number of
ventures with third parties, through which it has an interest in
television stations in locations throughout the United States of
America. The following presents the Companys basis in
these ventures (in thousands):

|                         |  |               |        |              |  |   |        | 
|------------------------ |  | ------------- | ------ | ------------ |  | - | ------ | 
|                         |  | September 30, |        | December 31,
|                         |  | 2004          |        | 2003        
|                         |  |               |        |             
|Banks Broadcasting, Inc. |  | $             |       |              |  | $ | 11,297 | 
|NBC joint venture        |  |               | 55,710 |              |  |   | 55,758 | 
|WAND (TV) Partnership    |  |               | 10,134 |              |  |   | 10,250 | 
|                         |  |               |        |              |  |   |        | 
|                         |  | $             | 65,844 |              |  | $ | 77,305 | 
|                         |  |               |        |              |  |   |        | 

Banks Broadcasting,
Inc:The Company owns preferred
stock that represents a 50% non-voting interest in Banks
Broadcasting, Inc. (Banks Broadcasting), which owns
and operates KWCV-TV, a WB affiliate in Wichita, Kansas and
KNIN-TV, a UPN affiliate in Boise, Idaho. The Company is able to
exercise significant, but not controlling, influence over the
activities of Banks Broadcasting through representation on the
Board of Directors. The Company has also entered into a
management services agreement with Banks Broadcasting to provide
specified management, engineering and related services for a
fixed fee. Included in this agreement is a cash management
arrangement under which the Company incurs expenditures on
behalf of Banks Broadcasting and is periodically reimbursed.

In accordance with FASB Interpretation
No. 46 (FIN 46), Consolidation of
Variable Interest Entities  an Interpretation of ARB
No. 51, Banks Broadcasting is considered to be a
variable interest entity. For purposes of determining the
primary beneficiary of Banks Broadcasting, the Company
considered Hicks Muse & Co. Partners, L.P. (Hicks
Muse Partners) 47% ownership in the Company and Hicks
Muses substantial economic interest in
21st Century Group, LLC which owns 18% of Banks
Broadcasting; and determined for purposes of FIN 46 that
the Company and 21st Century Group, LLC are
related parties. Considering the Companys 50% ownership
interest in Banks Broadcasting and the Companys management
agreement with Banks Broadcasting, the Company identified itself
as the primary beneficiary of Banks Broadcasting under
FIN 46. As the primary beneficiary of Banks Broadcasting,
the Company consolidated Banks Broadcastings assets,
liabilities and noncontrolling interests into the Companys
financial statements effective March 31, 2004. Since the
Company and Banks Broadcasting are not under common control, as
defined by Emerging Issues Task Force (EITF)
Issue 02-5, Definition of Common Control in Relation
to FASB Statement No. 141, Banks Broadcastings
assets, liabilities and noncontrolling interests were measured
at fair value as of March 31, 2004. The difference between
the value of the newly consolidated assets over the reported
amount of any previously held interests and the value of newly
consolidated liabilities and noncontrolling interests was
recognized as a cumulative effect of an accounting change in the
period ended March 31, 2004. The resulting consolidated
balance sheet of the Company does not reflect any voting equity
minority interest since Banks Broadcasting has incurred
cumulative losses and as such the minority interest would be in
a deficit position at September 30, 2004.

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LIN TELEVISION CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The following presents the summarized balance
sheet of Banks Broadcasting at March 31, 2004, the date of
initial consolidation (in thousands):

|                                |                              |   |        |        | 
|------------------------------- | ---------------------------- | - | ------ | ------ | 
|Assets                          |                              |   |        |       
|Cash                            |                              | $ | 97     |       
|Accounts receivable             |                              |   | 899    |       
|Program rights, short-term      |                              |   | 757    |       
|Other current assets            |                              |   | 46     |       
|Property and equipment          |                              |   | 5,048  |       
|Program rights, long-term       |                              |   | 662    |       
|Broadcast licenses              |                              |   | 29,238 |       
|                                |                              |   |        |       
|                                | Total assets                 |   | $      | 36,747 | 
|                                |                              |   |        |       
|                               
|Liabilities and Equity          |                              |   |        |       
|Accounts payable                |                              | $ | 396    |       
|Program obligations, short-term |                              |   | 793    |       
|Other accrued expenses          |                              |   | 404    |       
|Program obligations, long-term  |                              |   | 525    |       
|Deferred income taxes, net      |                              |   | 4,805  |       
|Preferred stock                 |                              |   | 34,764 |       
|                                |                              |   |        |       
|                                | Total liabilities and equity |   |        | 41,687 | 
|                                |                              |   |        |       
|Deficit                         |                              | $ | (4,940 | )     
|                                |                              |   |        |       

The deficit of $4.9 million has been
allocated to the nonvoting preferred stock, and the
Companys ownership of such preferred stock has been
eliminated on consolidation.

Hicks Muse has a substantial economic interest in
21st Century Group, LLC which owns 36% of the
preferred stock on the Companys balance sheet.

Joint Venture with
NBC:The Company owns a 20.38%
interest in a joint venture with NBC and accounts for its
interest using the equity method, as the Company does not have a
controlling interest. The Company received distributions of
$2.2 million and $5.5 million from the joint venture
in the three and nine months ended September 30, 2004,
respectively, and $1.6 million and $4.9 million in the
three and nine months ended September 30, 2003,
respectively.

The following presents the summarized financial
information of the joint venture (in thousands):

|                 |  |                    |        |                   |  |      |        |      |  |   |         |  |  |   |         | 
|---------------- |  | ------------------ | ------ | ----------------- |  | ---- | ------ | ---- |  | - | ------- |  |  | - | ------- | 
|                 |  |                    |        |                  
|                 |  | Three Months Ended |        | Nine Months Ended
|                 |  | September 30,      |        | September 30,    
|                 |  |                    |        |                  
|                 |  | 2004               |        | 2003              |  | 2004 |        | 2003
|                 |  |                    |        |                   |  |      |        |     
|Net revenues     |  | $                  | 46,659 |                   |  | $    | 39,679 |      |  | $ | 129,102 |  |  | $ | 116,176 | 
|Operating income |  |                    | 27,795 |                   |  |      | 23,233 |      |  |   | 75,353  |  |  |   | 65,925  | 
|Net income       |  |                    | 11,436 |                   |  |      | 5,630  |      |  |   | 26,761  |  |  |   | 16,292  | 

|                        |  |               |         |              |  |   |         | 
|----------------------- |  | ------------- | ------- | ------------ |  | - | ------- | 
|                        |  | September 30, |         | December 31,
|                        |  | 2004          |         | 2003        
|                        |  |               |         |             
|Current assets          |  | $             | 24,392  |              |  | $ | 9,949   | 
|Non-current assets      |  |               | 238,734 |              |  |   | 237,469 | 
|Current liabilities     |  |               | 17      |              |  |   | 725     | 
|Non-current liabilities |  |               | 815,500 |              |  |   | 815,500 | 

WAND (TV)
Partnership:The Company has a
33.33% interest in a partnership, WAND (TV) Partnership, with
Block Communications. The Company accounts for its interest
using the equity method, as the Company does not have a
controlling interest. The Company has also entered into a
management services agreement with WAND (TV) Partnership to
provide specified management, engineering and related services
for a fixed fee. Included in this agreement is a cash management
arrangement under which the Company incurs expenditures on
behalf of WAND (TV) Partnership and is periodically reimbursed.

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LIN TELEVISION CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The following presents the summarized financial
information of the WAND (TV) Partnership (in thousands):

|               |  |                    |       |                   |  |      |       |      |  |   |       |   |  |   |       |  
|-------------- |  | ------------------ | ----- | ----------------- |  | ---- | ----- | ---- |  | - | ----- | - |  | - | ----- | -
|               |  |                    |       |                  
|               |  | Three Months Ended |       | Nine Months Ended
|               |  | September 30,      |       | September 30,    
|               |  |                    |       |                  
|               |  | 2004               |       | 2003              |  | 2004 |       | 2003
|               |  |                    |       |                   |  |      |       |     
|Net revenues   |  | $                  | 1,440 |                   |  | $    | 1,485 |      |  | $ | 4,737 |   |  | $ | 4,679 |  
|Operating loss |  |                    | (165  | )                 |  |      | (174  | )    |  |   | (269  | ) |  |   | (244  | )
|Net loss       |  |                    | (243  | )                 |  |      | (239  | )    |  |   | (346  | ) |  |   | (318  | )

|                        |  |               |        |              |  |   |        | 
|----------------------- |  | ------------- | ------ | ------------ |  | - | ------ | 
|                        |  | September 30, |        | December 31,
|                        |  | 2004          |        | 2003        
|                        |  |               |        |             
|Current assets          |  | $             | 2,659  |              |  | $ | 2,013  | 
|Non-current assets      |  |               | 24,492 |              |  |   | 25,168 | 
|Current liabilities     |  |               | 678    |              |  |   | 405    | 
|Non-current liabilities |  |               | 44     |              |  |   |       | 



|         |                   
|-------- | ------------------
|Note 5  | Intangible Assets:

The following table summarizes the carrying
amount of each major class of intangible assets (in thousands):

|                               |                                                               |               |           |              |  |   |           |           | 
|------------------------------ | ------------------------------------------------------------- | ------------- | --------- | ------------ |  | - | --------- | --------- | 
|                               |                                                               | September 30, |           | December 31,
|                               |                                                               | 2004          |           | 2003        
|                               |                                                               |               |           |             
|Amortized Intangible Assets:   |                                                               |               |           |              |  |   |           |          
|LMA purchase options           |                                                               | $             | 2,388     |              |  | $ | 2,388     |          
|Network affiliations           |                                                               |               | 173       |              |  |   | 377       |          
|Income leases                  |                                                               |               | 393       |              |  |   | 393       |          
|Other intangible assets        |                                                               |               | 2,020     |              |  |   | 2,025     |          
|Accumulated amortization       |                                                               |               | (2,586    | )            |  |   | (1,891    | )        
|                               |                                                               |               |           |              |  |   |           |          
|                               |                                                               |               | 2,388     |              |  |   | 3,292     |          
|Unamortized Intangible Assets: |                                                               |               |           |              |  |   |           |          
|Broadcast licenses             |                                                               |               | 1,115,715 |              |  |   | 1,102,705 |          
|                               |                                                               |               |           |              |  |   |           |          
|                               | Total broadcast licenses and other intangible
    assets, net |               | $         | 1,118,103    |  |   | $         | 1,105,997 | 
|Goodwill                       |                                                               |               | 583,097   |              |  |   | 586,269   |          
|                               |                                                               |               |           |              |  |   |           |          
|Total intangible assets        |                                                               | $             | 1,701,200 |              |  | $ | 1,692,266 |          
|                               |                                                               |               |           |              |  |   |           |          

The decrease of $204,000 in network affiliations
is due to the network affiliation switch of the Companys
television station in Dayton, Ohio. The increase in broadcast
licenses is due to the acquisition of the broadcast license of
WIRS-TV on January 14, 2004 for $4.5 million, the
acquisition of the broadcast license of WTIN-TV on May 6,
2004 for $4.9 million and the consolidation of Banks
Broadcasting under FIN 46 as of March 31, 2004 for
$29.2 million offset by the sale of WEYI-TV, completed on
May 14, 2004, for $18.8 million and the tax adjustment
related to the Companys valuation allowance on deferred
tax assets for $6.8 million. The decrease in goodwill is
due to the tax adjustment related to the Companys
valuation allowance on deferred tax assets for $3.2 million.

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LIN TELEVISION CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The following table summarizes the aggregate
amortization expense for all periods presented as well as the
estimated amortization expense for the next five years (in
thousands):

|                     |  |               |     |               |  |                                             |     |      |  |      |     |      |  |      |     |      |  |      |       |  |  |   |       |  |  |   |       |  |  |   |   |  |  |   |   | 
|-------------------- |  | ------------- | --- | ------------- |  | ------------------------------------------- | --- | ---- |  | ---- | --- | ---- |  | ---- | --- | ---- |  | ---- | ----- |  |  | - | ----- |  |  | - | ----- |  |  | - | - |  |  | - | - | 
|                     |  |               |     |               |  |                                             |     |      |  |      |     |      |  |     
|                     |  | Three Months  |     | Nine Months   |  |                                            
|                     |  | Ended         |     | Ended         |  | Estimated amortization expense For the Year
|                     |  | September 30, |     | September 30, |  | Ended December 31,                         
|                     |  |               |     |               |  |                                            
|                     |  | 2004          |     | 2003          |  | 2004                                        |     | 2003 |  | 2004 |     | 2005 |  | 2006 |     | 2007 |  | 2008
|                     |  |               |     |               |  |                                             |     |      |  |      |     |      |  |      |     |      |  |     
|Amortization expense |  | $             | 270 |               |  | $                                           | 278 |      |  | $    | 825 |      |  | $    | 824 |      |  | $    | 1,041 |  |  | $ | 1,041 |  |  | $ | 1,006 |  |  | $ |  |  |  | $ |  | 

Note 6  Debt:

Debt consisted of the following (in thousands):

|                                                                                                                                                                                                                       |  |               |         |              |  |   |         | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ------- | ------------ |  | - | ------- | 
|                                                                                                                                                                                                                       |  | September 30, |         | December 31,
|                                                                                                                                                                                                                       |  | 2004          |         | 2003        
|                                                                                                                                                                                                                       |  |               |         |             
|Senior Credit Facilities                                                                                                                                                                                               |  | $             | 170,250 |              |  | $ | 193,500 | 
|$166,440 and $205,000 at September 30, 2004
    and December 31, 2003, respectively, 8% Senior Notes
    due 2008 (net of discount of $3,118 and $4,706 at
    September 30, 2004 and December 31, 2003, respectively) |  |               | 163,322 |              |  |   | 200,294 | 
|$200,000, 6 1/2% Senior Subordinated
    Notes due 2013                                                                                                                                                                |  |               | 200,000 |              |  |   | 200,000 | 
|$125,000, 2.50% Exchangeable Senior Subordinated
    Debentures due 2033 (net of discount of $15,269 and $18,427 at
    September 30, 2004 and December 31, 2003, respectively)                                        |  |               | 109,731 |              |  |   | 106,573 | 
|                                                                                                                                                                                                                       |  |               |         |              |  |   |         | 
|Total debt                                                                                                                                                                                                             |  |               | 643,303 |              |  |   | 700,367 | 
|Less current portion                                                                                                                                                                                                   |  |               | 11,000  |              |  |   | 7,000   | 
|                                                                                                                                                                                                                       |  |               |         |              |  |   |         | 
|Total long-term debt                                                                                                                                                                                                   |  | $             | 632,303 |              |  | $ | 693,367 | 
|                                                                                                                                                                                                                       |  |               |         |              |  |   |         | 

During the nine months ended September 30,
2004, the Company drew down funds from its revolving credit
facility to repurchase $38.6 million of LIN Television
Corporations 8% Senior Notes due 2008 in a negotiated
transaction with an institutional investor. The Company incurred
charges of $4.4 million during the nine months ended
September 30, 2004, respectively, related to the write-off
of unamortized discounts, deferred financing fees and associated
costs as a result of the early extinguishment of debt.

The current portion of long-term debt includes
$7.0 million of annual amortization of a term loan under
our Senior Credit Facility and $4.0 million borrowed under
the revolving credit facility, which terminates March 31,
2005.



|         |                            
|-------- | ---------------------------
|Note 7  | Related Party Transactions:

Financial Advisory Agreement.The Company is party to an
agreement with Hicks Muse Partners, pursuant to which the
Company reimburses Hicks Muse Partners, an affiliate of Hicks
Muse, for certain reimbursable expenses incurred by it in
connection with rendering services relating to acquisitions,
sales, mergers, exchange offers, recapitalization, restructuring
or similar transactions allocable to the Company. The Company
incurred fees under this arrangement of $4,000 and $14,000 for
the three and nine months ended September 30, 2004,
respectively and $17,000 and $55,000 for the same periods in the
prior year.

Local Marketing
Agreement.The Company is party to
a local marketing agreement with Super Towers, Inc., of which
the President is related to a LIN TV Corp. executive. The
Company has paid Super Towers, Inc. approximately $16,000 and
$25,000 for the three and nine months ended September 30,
2004,

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LIN TELEVISION CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

respectively, for various reimbursable expenses,
and $24,000 and $45,000 for the same periods in the prior year.

Banks Broadcasting
Inc.The Company has entered into
a management services agreement with Banks Broadcasting to
provide specified management, engineering and related services
for a fixed fee. Hicks Muse has substantial economic interest in
21st Century Group, LLC which owns 18% of Banks
Broadcasting. Prior to the consolidation of Banks Broadcasting
in accordance with FIN 46 as of March 31, 2004, the
Company received approximately $50,000 for the three months
ended March 31, 2004 and $50,000 and $150,000 for the three
and nine months ended September 30, 2003, respectively,
under the management services agreement.

Other
Investments.The Companys
Chief Executive Officer serves on the Board of Directors of an
internet company in which the Company has invested. The Company
incurred fees for internet services provided by this company of
$156,000 and $427,000 for the three and the nine months ended
September 30, 2004, respectively, and $121,000 and $365,000
for the same periods in the prior year.



|         |               
|-------- | --------------
|Note 8  | Contingencies:

GECC Note.General Electric Capital Corporation (GECC) provided
debt financing in connection with the formation of the joint
venture with NBC in the form of an $815.5 million 25-year
non-amortizing senior secured note bearing an initial interest
rate of 8.0% per annum (the GECC note). During
the last five years, the joint venture has produced cash flows
to support the interest payments and to maintain minimum levels
of required working capital reserves. In addition, the joint
venture has made cash distributions to the Company and to NBC
from the excess cash generated by the joint venture of
approximately $19.3 million on average each year during the
past three years. Accordingly, the Company expects that the
interest payments on the GECC note will be serviced solely by
the cash flow of the joint venture. The GECC note is not an
obligation of the Company, however, the note is recourse to the
joint venture with NBC and is guaranteed by LIN TV Corp. If
the joint venture were unable to pay principal or interest on
the GECC note and GECC could not otherwise recoup its principal
from the joint venture, GECC could require LIN TV Corp. to
pay the shortfall of any outstanding amounts under the GECC
note. If this happened, the Company could experience material
adverse consequences, including:



|  |                                                                                                                                                                                                        
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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 senior credit
    facilities and senior 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.                       

The joint venture is approximately 80% owned by
NBC, and NBC controls the operations of the stations through a
management contract. Therefore, the operation and profitability
of those stations and the likelihood of a default under the GECC
note are primarily within NBCs control.



|         |                  
|-------- | -----------------
|Note 9  | Retirement Plans:

The Company has a number of noncontributory
defined benefit retirement plans covering certain of its
employees in the United States and Puerto Rico. Contributions
are based on periodic actuarial valuations and are charged to
operations on a systematic basis over the expected average
remaining service lives of current employees. The net pension
expense is assessed in accordance with the advice of
professionally qualified actuaries. The benefits under the
defined benefit plans are based on years of service and
compensation.

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LIN TELEVISION CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The components of the net periodic benefit cost
recognized are as follows (in thousands):

|                                   |  |                    |        |                   |  |      |        |      |  |   |        |   |  |   |        |  
|---------------------------------- |  | ------------------ | ------ | ----------------- |  | ---- | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                   |  |                    |        |                  
|                                   |  | Three Months Ended |        | Nine Months Ended
|                                   |  | September 30,      |        | September 30,    
|                                   |  |                    |        |                  
|                                   |  | 2004               |        | 2003              |  | 2004 |        | 2003
|                                   |  |                    |        |                   |  |      |        |     
|Service cost                       |  | $                  | 494    |                   |  | $    | 457    |      |  | $ | 1,494  |   |  | $ | 1,371  |  
|Interest cost                      |  |                    | 1,352  |                   |  |      | 1,311  |      |  |   | 4,154  |   |  |   | 3,933  |  
|Expected return on plan assets     |  |                    | (1,364 | )                 |  |      | (1,408 | )    |  |   | (4,264 | ) |  |   | (4,224 | )
|Amortization of prior service cost |  |                    | 47     |                   |  |      | 41     |      |  |   | 125    |   |  |   | 123    |  
|Amortization of net loss           |  |                    | 103    |                   |  |      | 63     |      |  |   | 263    |   |  |   | 189    |  
|                                   |  |                    |        |                   |  |      |        |      |  |   |        |   |  |   |        |  
|Net periodic benefit cost          |  | $                  | 632    |                   |  | $    | 464    |      |  | $ | 1,772  |   |  | $ | 1,392  |  
|                                   |  |                    |        |                   |  |      |        |      |  |   |        |   |  |   |        |  

As of September 30, 2004, the Company has
contributed $900,000 to the plan, and expects to contribute a
total of $4.2 million during 2004. The Company also has a
non-qualified, unfunded Supplemental Excess Retirement Plan
(SERP). The timing of the payments under the SERP is
determined by individual employees decisions to retire and
commence payments. The Company has funded approximately $416,000
of SERP payments during the nine months ended September 30,
2004.



|          |              
|--------- | -------------
|Note 10  | Income Taxes:

Prior to January 1, 2002, the Company
recorded deferred tax liabilities relating to the difference in
the book basis and tax basis of goodwill and intangibles. The
reversals of those deferred tax liabilities were utilized to
support the recognition of deferred tax assets (primarily
consisting of net operating loss carryforwards) recorded by the
Company. As a result of the adoption of SFAS No. 142,
those deferred tax liabilities will no longer reverse on a
scheduled basis and can no longer be utilized to support the
realization of deferred tax assets. Accordingly, the
Companys provision for income taxes is primarily created
by an increase in the valuation allowance against the increase
in the deferred tax asset position during the year. This expense
has no impact on the Companys cash flows.



|          |                                 
|--------- | --------------------------------
|Note 11  | Recent Accounting Pronouncements

EITF Issue 04-8, The Effect of
Contingently Convertible Debt on Diluted Earnings per
Share which is effective for the Company as of
December 31, 2004, requires that the potential shares
associated with the contingent conversion feature of the
Companys 2.5% Exchangeable Debentures be included in the
calculation of diluted EPS regardless of whether the market
price trigger has been met. The Company does not believe that
EITF 04-8 will have a significant impact on the
Companys results of operations.

35