##### Table of Contents



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




---



##### Table of Contents



Table of Contents
 Part I. Financial InformationItem 1. Financial Statements LIN TV Corp.Condensed Consolidated Balance Sheets
    
    
    2Condensed Consolidated Statements of Operations
    
    
    3Condensed Consolidated Statements of Cash Flows
    
    
    4Notes to Condensed Consolidated Financial Statements (See separate index for financial statements of LIN Television Corporation)
    
    
    5Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    19Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    33Item 4. Controls and Procedures
    
    
    34Part II. Other InformationItem 1. Legal Proceedings
    
    
    34Item 1A. Risk Factors
    
    
    34Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    35Item 4. Submission of Matters to a Vote of Security Holders
    
    
    35Item 6. Exhibits
    
    
    36Signature PageCertification Pursuant to Section 302 - LIN TV CorpCertification Pursuant to Section 302 - LIN Television CorpCertification Pursuant to Section 906 - LIN TV CorpCertification Pursuant to Section 906 - LIN Television Corp
 1




---



##### Table of Contents



PART I: FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 LIN TV CORP.
 
 CONDENSED CONSOLIDATED
BALANCE SHEETS
 (unaudited)
 September 30,
    
    
    December 31,2006
    
    
    2005(In thousands, except share data)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    18,994
    
    
    $
    11,135Accounts receivable, less allowance for doubtful accounts (2006 - $1,565; 2005 - $1,148)
    
    
    91,278
    
    
    
    85,575Program rights
    
    
    21,488
    
    
    
    25,960Other current assets
    
    
    6,914
    
    
    
    3,534Total current assets
    
    
    138,674
    
    
    
    126,204Property and equipment, net
    
    
    226,644
    
    
    
    237,676Deferred financing costs
    
    
    18,363
    
    
    
    20,173Equity investments
    
    
    61,760
    
    
    
    63,526Program rights
    
    
    24,100
    
    
    
    7,307Goodwill
    
    
    536,407
    
    
    
    623,383Broadcast licenses and other intangible assets, net
    
    
    1,110,856
    
    
    
    1,308,598Other assets
    
    
    16,008
    
    
    
    19,766Total assets
    
    $
    2,132,812
    
    
    $
    2,406,633LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    10,100
    
    
    $
    8,292Accrued payroll and related costs
    
    
    17,612
    
    
    
    12,221Accrued interest expense
    
    
    15,619
    
    
    
    6,553Accrued sales volume discount
    
    
    3,045
    
    
    
    5,287Other accrued expenses
    
    
    23,716
    
    
    
    11,259Program obligations
    
    
    28,529
    
    
    
    30,375Total current liabilities
    
    
    98,621
    
    
    
    73,987Long-term debt
    
    
    966,275
    
    
    
    981,714Deferred income taxes, net
    
    
    348,685
    
    
    
    439,619Program obligations
    
    
    27,592
    
    
    
    7,343Purchase price payable
    
    
    52,250
    
    
    
    Other liabilities
    
    
    51,070
    
    
    
    60,540Total liabilities
    
    
    1,544,493
    
    
    
    1,563,203Preferred stock of Banks Broadcasting, Inc., $0.01 par value, 179,322 shares
issued and outstanding at September 30, 2006 and December 31, 2005
    
    
    10,206
    
    
    
    14,558Stockholders equity:Class A common stock, $0.01 par value, 100,000,000 shares authorized,
29,038,372 shares at September 30, 2006 and 28,562,583 shares at December 31, 2005,
issued and outstanding
    
    
    290
    
    
    
    286Class B common stock, $0.01 par value, 50,000,000 shares authorized,
23,502,059 shares at September 30, 2006 and December 31, 2005,
issued and outstanding; convertible into an equal number of shares of Class A or Class C
common stock
    
    
    235
    
    
    
    235Class C common stock, $0.01 par value, 50,000,000 shares authorized,
2 shares at September 30, 2006 and December 31, 2005, respectively, issued and outstanding;
convertible into an equal number of shares of Class A common stock
    
    
    
    
    
    
    Treasury stock, 1,806,428 shares and 368,728 shares of class A common stock at
September 30, 2006 and December 31, 2005, respectively, at cost
    
    
    (18,005
    )
    
    
    (4,777
    )Additional paid-in capital
    
    
    1,084,747
    
    
    
    1,076,704Accumulated deficit
    
    
    (472,731
    )
    
    
    (227,908
    )Accumulated other comprehensive loss
    
    
    (16,423
    )
    
    
    (15,668
    )Total stockholders equity
    
    
    578,113
    
    
    
    828,872Total liabilities, preferred stock and stockholders equity
    
    $
    2,132,812
    
    
    $
    2,406,633
  2




---



##### Table of Contents



LIN TV CORP.
 
 Condensed Consolidated Statements of Operations
 (In thousands, except per share information)
 (Unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Net revenues
    
    $
    115,753
    
    
    $
    91,003
    
    
    $
    331,972
    
    
    $
    268,857Operating costs and expenses:Direct operating (excluding depreciation of $8.6
million and $6.6 million for the three months ended
September 30, 2006 and 2005, respectively, and $27.9
million and $22.8 million for the nine months ended
September 30, 2006 and 2005, respectively)
    
    
    33,883
    
    
    
    27,964
    
    
    
    100,028
    
    
    
    82,008Selling, general and administrative
    
    
    35,431
    
    
    
    26,192
    
    
    
    102,714
    
    
    
    77,838Amortization of program rights
    
    
    7,421
    
    
    
    6,833
    
    
    
    22,475
    
    
    
    19,222Corporate
    
    
    6,248
    
    
    
    4,362
    
    
    
    24,827
    
    
    
    14,716Impairment of broadcast licenses and goodwill
    
    
    
    
    
    
    
    
    
    
    333,553
    
    
    
    Depreciation and amortization of intangible assets
    
    
    9,735
    
    
    
    7,151
    
    
    
    31,600
    
    
    
    24,063Total operating costs
    
    
    92,718
    
    
    
    72,502
    
    
    
    615,197
    
    
    
    217,847Operating income (loss)
    
    
    23,035
    
    
    
    18,501
    
    
    
    (283,225
    )
    
    
    51,010Other expense (income):Interest expense, net
    
    
    18,269
    
    
    
    11,115
    
    
    
    52,397
    
    
    
    32,860Share of income in equity investments
    
    
    (696
    )
    
    
    (410
    )
    
    
    (1,705
    )
    
    
    (2,119
    )Minority interest in loss of Banks Broadcasting, Inc.
    
    
    (161
    )
    
    
    (96
    )
    
    
    (4,352
    )
    
    
    (382
    )Gain on derivative instruments
    
    
    (1,446
    )
    
    
    (1,860
    )
    
    
    (954
    )
    
    
    (3,455
    )Loss on extinguishment of debt
    
    
    
    
    
    
    1,082
    
    
    
    
    
    
    
    13,412Other, net
    
    
    (279
    )
    
    
    95
    
    
    
    4,860
    
    
    
    261Total other expense, net
    
    
    15,687
    
    
    
    9,926
    
    
    
    50,246
    
    
    
    40,577Income (loss) before provision for (benefit from)
income taxes
    
    
    7,348
    
    
    
    8,575
    
    
    
    (333,471
    )
    
    
    10,433Provision for (benefit from) income taxes
    
    
    3,495
    
    
    
    4,789
    
    
    
    (88,648
    )
    
    
    6,872Net income (loss)
    
    $
    3,853
    
    
    $
    3,786
    
    
    $
    (244,823
    )
    
    $
    3,561Basic income (loss) per common share:Net income (loss)
    
    $
    0.08
    
    
    $
    0.07
    
    
    $
    (4.99
    )
    
    $
    0.07Weighted  average number of common shares outstanding
used
in calculating basic income (loss) per common share
    
    
    48,944
    
    
    
    50,702
    
    
    
    49,049
    
    
    
    50,632Diluted income (loss) per common share:Net income (loss)
    
    $
    0.08
    
    
    $
    0.07
    
    
    $
    (4.99
    )
    
    $
    0.07Weighted  average number of common shares outstanding
used
in calculating diluted income (loss) per common share
    
    
    48,999
    
    
    
    50,801
    
    
    
    49,049
    
    
    
    50,731
  3




---



##### Table of Contents



LIN
TV CORP.
 
 Condensed Consolidated
Statements of Cash Flows
 (Unaudited)
 Nine months endedSeptember 30,2006
    
    
    2005(In thousands)OPERATING ACTIVITIES:Net (loss) income
    
    $
    (244,823
    )
    
    $
    3,561Adjustment to reconcile net (loss) income to net cash provided by operating activities:Depreciation and amortization of intangible assets
    
    
    31,600
    
    
    
    24,063Impairment of broadcast licenses and goodwill
    
    
    333,553
    
    
    
    Amortization of financing costs and note discounts
    
    
    6,495
    
    
    
    4,654Amortization of program rights
    
    
    22,475
    
    
    
    19,222Program payments
    
    
    (23,055
    )
    
    
    (21,545
    )Program buyout payments related to acquisitions
    
    
    
    
    
    
    (21,420
    )Loss on extinguishment of debt
    
    
    
    
    
    
    13,412Gain on derivative instruments
    
    
    (954
    )
    
    
    (3,455
    )Share of income in equity investments
    
    
    (1,705
    )
    
    
    (2,119
    )Deferred income taxes, net
    
    
    (89,830
    )
    
    
    5,351Stock-based compensation
    
    
    7,076
    
    
    
    1,873Loss on investment in USDTV
    
    
    5,000
    
    
    
    Minority
interest in Banks Broadcasting, Inc.
    
    
    (4,352
    )
    
    
    (382
    )Other, net
    
    
    (293
    )
    
    
    1,198Changes in operating assets and liabilities, net of acquisitions and disposals:Accounts receivable
    
    
    (6,120
    )
    
    
    1,951Other assets
    
    
    (2,681
    )
    
    
    (2,664
    )Accounts payable
    
    
    1,808
    
    
    
    (1,398
    )Accrued payroll and related costs
    
    
    5,391
    
    
    
    4,717Accrued interest expense
    
    
    9,066
    
    
    
    2,748Accrued sales volume discount
    
    
    (2,242
    )
    
    
    (2,538
    )Other liabilities
    
    
    7,822
    
    
    
    (2,078
    )Net cash provided by operating activities
    
    
    54,231
    
    
    
    25,151INVESTING ACTIVITIES:Capital expenditures
    
    
    (9,384
    )
    
    
    (8,581
    )Capital contribution from minority interest in Banks Broadcasting, Inc.
    
    
    
    
    
    
    550Distributions from equity investments
    
    
    3,871
    
    
    
    3,464Acquisition of broadcast licenses
    
    
    
    
    
    
    (232
    )Deposit on acquisition of business
    
    
    (2,750
    )
    
    
    (19,500
    )Payments for business combinations
    
    
    (3,003
    )
    
    
    (85,000
    )USDTV Investment and other investments
    
    
    (2,304
    )
    
    
    Other, net
    
    
    
    
    
    
    (3,044
    )Net cash used in investing activities
    
    
    (13,570
    )
    
    
    (112,343
    )FINANCING ACTIVITIES:Proceeds
from issuance of common stock under employee stock plans
    
    
    550
    
    
    
    1,935Proceeds from issuance of long-term debt
    
    
    
    
    
    
    520,252Long-term debt financing costs
    
    
    (124
    )
    
    
    (9,599
    )(Payments on) proceeds from revolver debt
    
    
    (20,000
    )
    
    
    75,000Principal payments on long-term debt
    
    
    
    
    
    
    (494,940
    )Treasury stock purchased
    
    
    (13,228
    )
    
    
    Cash expenses associated with early extinguishment of debt
    
    
    
    
    
    
    (7,108
    )Net cash
(used in) provided by financing activities
    
    
    (32,802
    )
    
    
    85,540Net increase (decrease) in cash and cash equivalents
    
    
    7,859
    
    
    
    (1,652
    )Cash and cash equivalents at the beginning of the period
    
    
    11,135
    
    
    
    14,797Cash and cash equivalents at the end of the period
    
    $
    18,994
    
    
    $
    13,145
  4




---



##### Table of Contents



Note 1  Basis of Presentation
      st
 
 5




---



##### Table of Contents



Note 2  Stock-Based Compensation
  Three Months Ended
    
    
    Nine Months EndedSeptember 30, 2005
    
    
    September 30, 2005Net income, as reported
    
    $
    3,786
    
    
    $
    3,561Add:
Stock-based employee compensation expense, included in reported net income, net of related tax effect
    
    
    55
    
    
    
    1,106Deduct: Total stock-based employee compensation
expense determined under the fair value based
method for all awards, net of related tax effect
    
    
    (465
    )
    
    
    (1,287
    )Pro forma net income
    
    $
    3,376
    
    
    $
    3,380Basic and diluted net income per common share, as reported
    
    $
    0.07
    
    
    $
    0.07Basic and diluted net income per common share, pro forma
    
    $
    0.07
    
    
    $
    0.07
  Note 3  Acquisitions
  6




---



##### Table of Contents



Acquisition Reserves
 Balance as of
    
    
    
    
    
    
    
    
    
    
    Balance as ofDecember 31,
    
    
    
    
    
    
    
    
    
    
    September 30,Acquisition Date
    
    
    2005
    
    
    Payments
    
    
    Adjustments
    
    
    2006Acquisition of Sunrise Television Corp.
    
    May 2, 2002
    
    
    211
    
    
    
    75
    
    
    
    
    
    
    
    136Stations acquired from Viacom
    
    March 31, 2005
    
    
    295
    
    
    
    
    
    
    
    
    
    
    
    295Stations acquired from Emmis
    
    November 30, 2005
    
    $
    7,910
    
    
    $
    998
    
    
    $
    (41
    )
    
    
    6,871$
    8,416
    
    
    $
    1,073
    
    
    $
    (41
    )
    
    $
    7,302
 7




---



##### Table of Contents



Pro Forma:
 Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,(unaudited)
    
    2006
    
    2005
    
    2006
    
    2005Net revenues
    
    $
    118,946
    
    
    $
    108,801
    
    
    $
    341,784
    
    
    $
    325,447Operating income (loss)
    
    
    23,306
    
    
    
    21,825
    
    
    
    (282,536
    )
    
    
    57,746Net income (loss)
    
    
    3,509
    
    
    
    3,736
    
    
    
    (246,064
    )
    
    
    814Basic net income (loss) per common share, pro forma
    
    $
    0.07
    
    
    $
    0.07
    
    
    $
    (4.92
    )
    
    $
    0.02Diluted net income (loss) per common share, pro forma
    
    $
    0.07
    
    
    $
    0.07
    
    
    $
    (4.92
    )
    
    $
    0.02
 Note 4  Investments
  September 30,
    
    
    December 31,2006
    
    
    2005NBC Universal joint venture
    
    $
    54,610
    
    
    $
    54,803WAND (TV) Partnership
    
    
    6,645
    
    
    
    8,595Other
    
    
    505
    
    
    
    128$
    61,760
    
    
    $
    63,526
 Joint Venture with NBC Universal:
  8




---



##### Table of Contents



Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    June 30,2006
    
    2005
    
    2006
    
    2005Revenue
    
    $
    19,360
    
    
    $
    19,216
    
    
    $
    67,207
    
    
    $
    60,916Other expense
    
    
    16,301
    
    
    
    16,401
    
    
    
    49,154
    
    
    
    49,634Net income
    
    
    3,059
    
    
    
    2,815
    
    
    
    18,053
    
    
    
    11,282
 September 30,
    
    December 31,2006
    
    2005Current assets
    
    $
    11,417
    
    
    $
    10,617Non-current assets
    
    
    230,536
    
    
    
    232,075Current liabilities
    
    
    906
    
    
    
    724Non-current liabilities
    
    
    815,500
    
    
    
    815,500
  WAND (TV) Partnership:
  Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2006
    
    2005
    
    2006
    
    2005Net revenues
    
    $
    1,424
    
    
    $
    1,612
    
    
    $
    5,240
    
    
    $
    4,757Operating loss (1)
    
    
    (819
    )
    
    
    (506
    )
    
    
    (6,940
    )
    
    
    (580
    )Net (loss) income
    
    
    284
    
    
    
    (491
    )
    
    
    (5,828
    )
    
    
    (542
    )
 September 30,
    
    December 31,2006
    
    2005Current assets
    
    $
    2,673
    
    
    $
    2,398Non-current assets
    
    
    14,116
    
    
    
    20,702Current liabilities
    
    
    1,174
    
    
    
    1,276Non-current liabilities
    
    
    
    
    
    
    14
 9




---



##### Table of Contents



(1)
    
    An impairment charge of $5.9 million relating to the broadcast license of WAND-TV is
included in the operating results for the nine months ended September 30, 2006. (Further
information is contained in Note 5-Intangible Assets.) Note 5  Intangible Assets
  EstimatedRemaining Useful

    
    September 30,
    
    
    December 31,Life (Years)

    
    2006
    
    
    2005Amortizing Intangible Assets:LMA purchase options
    
    
    1
    
    
    $
    4,212
    
    
    $
    4,212Network affiliations
    
    
    1
    
    
    
    1,753
    
    
    
    1,753Other intangibles
    
    
    1-27
    
    
    
    7,489
    
    
    
    6,025Accumulated amortization
    
    
    
    
    
    
    (8,386
    )
    
    
    (4,686
    )5,068
    
    
    
    7,304Indefinite-Lived Intangible Assets:Broadcast licenses
    
    
    
    
    
    
    1,105,788
    
    
    
    1,301,294Goodwill
    
    
    
    
    
    
    536,407
    
    
    
    623,383$
    1,642,195
    
    
    $
    1,924,677Goodwill
    
    
    
    
    
    
    536,407
    
    
    
    623,383Broadcast licenses and other
intangible assets, net
    
    
    
    
    
    
    1,110,856
    
    
    
    1,308,598Total intangible assets
    
    
    
    
    
    $
    1,647,263
    
    
    $
    1,931,981
  Three Months
    
    Nine MonthsEnded September
    
    Ended September
    
    Estimated amortization expense30,
    
    30,
    
    For the year ended December 31,2005
    
    2006
    
    2005
    
    2006
    
    2006
    
    2007
    
    2008
    
    2009
    
    2010
    
    ThereafterAmortization
expense
    
    $
    1,158
    
    
    $
    547
    
    
    $
    3,700
    
    
    $
    1,213
    
    
    $
    1,244
    
    
    $
    1,413
    
    
    $
    219
    
    
    $
    37
    
    
    $
    36
    
    
    $
    2,119
   10




---



##### Table of Contents



Note 6  Debt
  September 30,
    
    
    December 31,2006
    
    
    2005Credit Facility
    
    $
    296,000
    
    
    $
    316,0006 1/2% Senior Subordinated Notes due 2013
    
    
    375,000
    
    
    
    375,000$190,000, 6 1/2% Senior Subordinated Notes  Class B due 2013
(net of discount of $12,881 and $14,283 at September 30, 2006
and December 31, 2005, respectively)
    
    
    177,119
    
    
    
    175,717$125,000, 2.50% Exchangeable Senior Subordinated Debentures due
2033 (net of discount of $6,844 and $10,003 at September 30, 2006
and December 31, 2005, respectively)
    
    
    118,156
    
    
    
    114,997Total long-term debt
    
    $
    966,275
    
    
    $
    981,714
 Note 7  Related Party Transactions
 Financial Advisory Agreement
 Centennial Cable of Puerto Rico:
 11




---



##### Table of Contents



Note 8  Contingencies
 GECC Note.
 
    
    GECC could force LIN TV Corp. to sell the stock of LIN
Television held by LIN TV Corp. to satisfy outstanding
amounts under the GECC note;
    
    if more than 50% of the ownership of LIN Television
had to be sold to satisfy the GECC note, it could cause an
acceleration of the Companys credit facility and notes;
and
    
    if the GECC note is prepaid because of an acceleration
on default or otherwise, or if the note is repaid at
maturity, the Company may incur a substantial tax
liability.
  Note 9  Retirement Plans
   12




---



##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Service cost
    
    $
    625
    
    
    $
    549
    
    
    $
    1,875
    
    
    $
    1,647Interest cost
    
    
    1,400
    
    
    
    1,350
    
    
    
    4,200
    
    
    
    4,050Expected return on plan assets
    
    
    (1,475
    )
    
    
    (1,435
    )
    
    
    (4,425
    )
    
    
    (4,305
    )Amortization of prior service cost
    
    
    30
    
    
    
    30
    
    
    
    90
    
    
    
    90Amortization of net loss
    
    
    320
    
    
    
    241
    
    
    
    960
    
    
    
    723Net periodic benefit cost
    
    $
    900
    
    
    $
    735
    
    
    $
    2,700
    
    
    $
    2,205
  Note 10  Earnings per Share
   13




---



##### Table of Contents



Three Months EndedSeptember 30,2006
    
    
    2005Numerator for income (loss) per common stock calculation:Net income (loss) available to common shareholders, basic and diluted
    
    $
    3,853
    
    
    $
    3,786Denominator for income (loss) per common stock calculation:Weighted average common shares, basic
    
    
    48,944
    
    
    
    50,702Effect of dilutive securities:Stock options
    
    
    55
    
    
    
    99Weighted average common shares, diluted
    
    
    48,999
    
    
    
    50,801Basic income (loss) per common stock
    
    $
    0.08
    
    
    $
    0.07Diluted income (loss) per common stock
    
    $
    0.08
    
    
    $
    0.07
 Nine Months EndedSeptember 30,2006
    
    
    2005Numerator for income (loss) per common stock calculation:Net income (loss) available to common shareholders, basic and diluted
    
    $
    (244,823
    )
    
    $
    3,561Denominator for income (loss) per common stock calculation:Weighted average common shares, basic
    
    
    49,049
    
    
    
    50,632Effect of dilutive securities:Stock options
    
    
    
    
    
    
    99Weighted average common shares, diluted
    
    
    49,049
    
    
    
    50,731Basic income (loss) per common stock
    
    $
    (4.99
    )
    
    $
    0.07Diluted income (loss) per common stock
    
    $
    (4.99
    )
    
    $
    0.07
 Note 11  Share Repurchase Program
  Note 12  Derivative Financial Instruments
 Accounting Policy:
 14




---



##### Table of Contents



Note 13  Comprehensive Income (Loss)
  Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2006
    
    2005
    
    2006
    
    2005Net income (loss)
    
    $
    3,853
    
    
    $
    3,786
    
    
    $
    (244,823
    )
    
    $
    3,561Other comprehensive (loss) income, net of tax:Change in the fair market value of hedged items
    
    
    (1,191
    )
    
    
    
    
    
    
    (755
    )
    
    
    Comprehensive income (loss)
    
    $
    2,662
    
    
    
    3,786
    
    
    $
    (245,578
    )
    
    $
    3,561
 Note 14  Recent Accounting Pronouncements
   15




---



##### Table of Contents



16




---



##### Table of Contents



17




---



##### Table of Contents



Note 15  Subsequent Events
   18




---



##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Special
Note About Forward-Looking Statements
  
    
    volatility and changes in our advertising revenues;
    
    the outbreak and duration of hostilities or the occurrence of terrorist attacks
and the duration and extent of network preemption of regularly scheduled programming
and decisions by advertisers to withdraw or delay planned advertising expenditures as a
result of military action or terrorist attacks;
    
    restrictions on our operations due to, and the effect of, our significant leverage;
    
    effects of complying with accounting standards, including with respect to the
treatment of our intangible assets;
    
    inability to consummate acquisitions on attractive terms;
    
    increases in our cost of borrowings or inability or unavailability of additional
debt or equity capital;
    
    increased competition, including from newer forms of entertainment and
entertainment media, or changes in the popularity or availability of programming;
    
    increased costs, including increased capital expenditures as a result of necessary
technological enhancements such as expenditures related to the transition to digital
broadcasting, or acquisitions or increased programming costs;
    
    effects of our control relationships, including the control that Hicks Muse and
its affiliates have with respect to corporate transactions and activities we undertake;
    
    adverse state or federal legislation or regulation or adverse determinations by
regulators, including adverse changes in, or interpretations of, the exceptions to the
FCC duopoly rule; and
    
    changes in general economic conditions in the markets in which we compete.
  19




---



##### Table of Contents



Executive Summary
   
    
    During our second quarter of 2006, we recorded an
impairment loss of $333.6 million, comprised of a
goodwill impairment of $95.3 million and a broadcast
license impairment of $238.3 relating to 15 of our
television stations in the second quarter of 2006.
Approximately $1.6 billion, or 77%, of our total assets
as of September 30, 2006 consisted of unamortized
intangible assets. Intangible assets principally include
broadcast licenses and goodwill. SFAS No. 142, Goodwill
and Other Intangible Assets, requires, among other
things, the impairment testing of goodwill. If the fair
value of these intangible assets decreased, we could be
required to incur an impairment charge that could
significantly adversely impact our reported results of
operations and stockholders equity. Our common stock
traded at a price that resulted in a market
capitalization of $197.0 million less than total
stockholders equity as of September 30, 2006 and our
market capitalization has been less than total
stockholders equity since April 2005. If we are
required to record additional impairments of these
intangible assets in future periods, it would reduce net
income, which in turn could have a material adverse
effect on the results of operations and the trading
price of LIN TV Corp.s class A common stock.
    
    We repurchased 1,437,700 shares of common stock for
approximately $13.2 million for the nine months ended
September 30, 2006, pursuant to our board of directors
approved stock repurchase program.
    
    On July 12, 2006, we announced the
appointment of Vincent L. Sadusky as President and Chief
Executive Officer. In connection with the retirement of
our former Chief Executive Officer, we recorded a $7.1
million expense, including $1.5 million of stock-based
compensation, in the nine months ended September 30,
2006.
    
    In the second quarter of 2006, we recorded an
impairment of our entire investment in U.S. Digital
Television Incorporated (USDTV), of $5.0 million which
filed for bankruptcy protection on July 11, 2006.
    
    On July 26, 2006, we signed an agreement to acquire
the station assets and program right liabilities of
KASA-TV, the Fox affiliate in Albuquerque, New Mexico
from Raycom Media, Inc. (Raycom) for $55.0 million in
cash. We plan to combine the operations of KASA-TV with
our station KRQE-TV in the Albuquerque market.
 20




---



##### Table of Contents




    
    On July 7, 2006, we completed our acquisition of
the assets of WBPG-TV for $3.0 million.
 Industry Trends
  
    
    Political revenues from elections and revenues from
Olympic games, which generally occur in even years, create
fluctuations in our operating results when comparing the
third quarter and the first nine months September 30, 2006
with the same period of 2005. According to the Television
Bureau of Advertising, U.S. television station advertising
increased 6.7% during the third quarter of 2006 compared to
the same period last year and 6.1% in the nine months ended
September 30, 2006 compared to the same period last year.
(source: Television Bureau of Advertising).
    
    Automotive-related advertising represented
approximately 25% of our total net revenues for each of the
nine months ended September 30, 2006 and 2005. A
significant change in these advertising revenues could
materially affect our future results of operations.
    
    On June 15, 2006, President George W. Bush signed the
Broadcast Decency Enforcement Act into law. The new law
substantially increases the maximum fine that the FCC can
impose on TV and radio broadcasters from $32,500 to
$325,000 per incident of indecent programming.
 Critical Accounting Policies and Estimates
   21




---



##### Table of Contents



GECC Note
  Future Program Rights Agreements
  Subsequent
Events
   Results of Operations
  22




---



##### Table of Contents



Three Months Ended
    
    
    
    
    
    
    Nine Months EndedSeptember 30,
    
    
    %
    
    
    September 30,
    
    
    %2006
    
    
    2005
    
    
    Change
    
    
    2006
    
    
    2005
    
    
    ChangeNational time sales (before agency commission)
    
    $
    36,639
    
    
    
    31,965
    
    
    
    15
    %
    
    $
    111,138
    
    
    $
    95,581
    
    
    
    16
    %Local time sales (before agency commissions)
    
    
    75,348
    
    
    
    66,634
    
    
    
    13
    %
    
    
    234,942
    
    
    
    196,357
    
    
    
    20
    %Political time sales (before agency commissions)
    
    
    15,527
    
    
    
    728
    
    
    
    2033
    %
    
    
    22,528
    
    
    
    2,157
    
    
    
    944
    %Agency commissions (related to time sales)
    
    
    (19,205
    )
    
    
    (16,073
    )
    
    
    19
    %
    
    
    (55,933
    )
    
    
    (47,322
    )
    
    
    18
    %Digital revenues
    
    
    2,163
    
    
    
    1,445
    
    
    
    50
    %
    
    
    6,052
    
    
    
    4,162
    
    
    
    45
    %Network compensation
    
    
    1,115
    
    
    
    2,562
    
    
    
    (56
    )%
    
    
    2,417
    
    
    
    8,163
    
    
    
    -70
    %Barter revenue
    
    
    3,167
    
    
    
    2,925
    
    
    
    8
    %
    
    
    8,273
    
    
    
    7,249
    
    
    
    14
    %Other revenue
    
    
    999
    
    
    
    817
    
    
    
    22
    %
    
    
    2,555
    
    
    
    2,510
    
    
    
    2
    %Net revenue
    
    
    115,753
    
    
    
    91,003
    
    
    
    27
    %
    
    
    331,972
    
    
    
    268,857
    
    
    
    24
    %Operating costs and expenses:Direct operating1
    
    
    33,883
    
    
    
    27,964
    
    
    
    21
    %
    
    
    100,028
    
    
    
    82,008
    
    
    
    22
    %Selling, general and administrative
    
    
    35,431
    
    
    
    26,192
    
    
    
    35
    %
    
    
    102,714
    
    
    
    77,838
    
    
    
    32
    %Amortization of program rights
    
    
    7,421
    
    
    
    6,833
    
    
    
    9
    %
    
    
    22,475
    
    
    
    19,222
    
    
    
    17
    %Corporate
    
    
    6,248
    
    
    
    4,362
    
    
    
    43
    %
    
    
    24,827
    
    
    
    14,716
    
    
    
    69
    %Impairment of broadcast licenses and goodwill
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    333,553
    
    
    
    Depreciation and amortization of intangible assets
    
    
    9,735
    
    
    
    7,151
    
    
    
    36
    %
    
    
    31,600
    
    
    
    24,063
    
    
    
    31
    %Total operating costs and expenses
    
    
    92,718
    
    
    
    72,502
    
    
    
    28
    %
    
    
    615,197
    
    
    
    217,847
    
    
    
    182
    %Operating income (loss)
    
    
    23,035
    
    
    
    18,501
    
    
    
    25
    %
    
    
    (283,225
    )
    
    
    51,010
    
    
    
    -655
    %
 
 1
    
    Excluding depreciation of $8.6 million
and $6.6 million for the three months ended
September 30, 2006 and 2005, respectively,
and excluding depreciation of $27.9 million
and $22.8 million for the nine months ended
September 30, 2006 and 2005, respectively. Net revenues
   23




---



##### Table of Contents



Operating Costs and Expenses
 Direct operating expenses (excluding depreciation and amortization of intangible assets),
  Selling, general and administrative expenses,
  Amortization of program rights
  Corporate expenses,
  Depreciation
and amortization of intangible
 24




---



##### Table of Contents



Impairment of broadcast licenses and goodwill .
     25




---



##### Table of Contents



Other (Income) Expense
 Interest expense
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Components of interest expense, including discount and financing fee amortization:Credit facility
    
    $
    6,495
    
    
    $
    2,785
    
    
    $
    16,967
    
    
    $
    7,5496 1/2% Senior Subordinated Notes
    
    
    6,337
    
    
    
    6,334
    
    
    
    19,078
    
    
    
    18,2066 1/2% Senior Subordinated Notes-Class B
    
    
    3,681
    
    
    
    69
    
    
    
    11,073
    
    
    
    692.50% Exchangeable Senior Subordinated Debentures
    
    
    1,888
    
    
    
    1,888
    
    
    
    5,638
    
    
    
    5,6548% Senior Notes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,501Other interest (income) expense, net
    
    
    (132
    )
    
    
    39
    
    
    
    (359
    )
    
    
    (119
    )Total interest expense, net
    
    $
    18,269
    
    
    $
    11,115
    
    
    $
    52,397
    
    
    $
    32,860
 Interest expense, net
 Gain on derivative instruments
  Other Items.
 26




---



##### Table of Contents



Provision for Income Taxes
 Liquidity and Capital Resources
  Description of Indebtedness
  September 30,
    
    
    December 31,2006
    
    
    2005Credit Facility
    
    $
    296,000
    
    
    $
    316,0006 1/2% Senior Subordinated Notes due 2013
    
    
    375,000
    
    
    
    375,000$190,000 6 1/2% Senior Subordinated Notes due 2013 - Class B (net of discount of
$12,881 and $14,283 at September 30, 2006 and December 31, 2005, respectively)
    
    
    177,119
    
    
    
    175,717$125,000, 2.50% Exchangeable Senior Subordinated Debentures due
2033 (net of discount of $6,844 and $10,003 at September 30, 2006 and
December 31, 2005, respectively)
    
    
    118,156
    
    
    
    114,997Total long-term debt
    
    $
    966,275
    
    
    $
    981,714
   27




---



##### Table of Contents



1/2 1/2
 1/2 1/2
 1/2 1/2 1/2 1/2
 Contractual Obligations
  October -December2006
    
    
    2007-2008
    
    
    2009-2011
    
    
    Thereafter
    
    
    TotalPrincipal payments and mandatory
redemptions on debt(1)
    
    $
    
    
    
    $
    51,563
    
    
    $
    244,437
    
    
    $
    690,000
    
    
    $
    986,000Cash interest on debt(2)
    
    
    16,416
    
    
    
    118,406
    
    
    
    150,247
    
    
    
    125,458
    
    
    
    410,527Program payments(3)
    
    
    12,633
    
    
    
    50,647
    
    
    
    30,644
    
    
    
    4,017
    
    
    
    97,941Operating leases(4)
    
    
    1,452
    
    
    
    3,063
    
    
    
    1,781
    
    
    
    1,472
    
    
    
    7,768Operating agreements(5)
    
    
    5,321
    
    
    
    18,293
    
    
    
    6,922
    
    
    
    1,075
    
    
    
    31,611Local marketing agreement payments (6)
    
    
    2,012
    
    
    
    33
    
    
    
    
    
    
    
    
    
    
    
    2,045Acquisitions of broadcast licenses and operating assets(7)
    
    
    
    
    
    
    52,250
    
    
    
    
    
    
    
    
    
    
    
    52,250Total
    
    $
    37,834
    
    
    $
    294,255
    
    
    $
    434,031
    
    
    $
    822,022
    
    
    $
    1,588,142
 28




---



##### Table of Contents



(1)
    
    We are obligated to repay the revolving portion of our credit
facility on November 4, 2011. We are required to make mandatory
payments on our term loans in the amount of $10.3 million per
quarter starting December 31, 2007 and additional payments based
on certain debt transactions or the disposal of certain assets.
We are obligated to repay the remaining balance of our term loans
on November 4, 2011. We are obligated to pay our 6
1/2% Senior Subordinated Notes and our 6
1/2% Senior Subordinated Notes  Class B in May 2013
and our 2.50% Exchangeable Senior Subordinated Debentures in May
2033. The holders of our 2.50% Exchangeable Senior Subordinated
Debentures can require us to purchase all or a portion of the
debentures on each of the following dates: May 15, 2008, 2013,
2018, 2023 and 2028.(2)
    
    We have contractual obligations to pay cash interest on our
credit facility through 2011, our 6 1/2% Senior
Subordinated Notes and our 6 1/2% Senior Subordinated
Notes  Class B through 2013, and our 2.50% Exchangeable Senior
Subordinated Debentures through 2033. We may pay contingent
interest to holders of the debentures during any six-month period
commencing May 15, 2008, if the average trading price of the
debentures for a five trading day measurement period immediately
preceding the first day of the applicable six-month period equals
120% or more of the principal amount of the debentures. The
contingent interest equals 0.25% per annum per $1,000 principal
amount of debentures. In addition, we are obligated to pay
commitment fees of 0.25% to 0.50% on the unused portion of the
revolving credit facility based on obtaining certain debt ratios.(3)
    
    We have entered into commitments to purchase future syndicated
news, entertainment, and sports programming. We have recorded
$56.1 million of program obligations as of September 30, 2006 and
have unrecorded commitments of $41.8 million for programming that
is not available to air as of September 30, 2006.(4)
    
    We lease land, buildings, vehicles and equipment under
non-cancelable operating lease agreements.(5)
    
    We have entered into operating agreements for ratings services,
news services, software maintenance, equipment maintenance and
other services related to the routine operation of our television
stations.(6)
    
    We have entered into local marketing agreements to operate
KNVA-TV, WNAC-TV, and KASA-TV for a fixed amount totaling $1.1
million as of September 30, 2006. The local marketing agreement
to operate KASA-TV is for fixed monthly licensee fee of $366,667,
effective through our acquisition of KASA-TV which is expected
during the fourth quarter. For purposes of this table, we
assumed the acquisition to be effective at the end of our fourth
quarter.(7)
    
    We have entered into option agreements that would enable us to
purchase KNVA-TV and WNAC-TV for a fixed amount under certain
conditions in which we are committed to pay minimum future fees
totaling $0.9 million as of September 30, 2006. We have also
entered into an asset purchase agreement to acquire KASA-TV for a
remaining $52.2 million, ($55.0 million net of a refundable
deposit of $2.8 million paid during the third quarter of 2006).
The transaction is expected to close during the first half of
2007 upon approval of the FCC. Net cash provided by operating activities
 29




---



##### Table of Contents



Net cash used in investing activities
 Net cash used in financing activities 1 2 1 2
   Recent Accounting Pronouncements
  30




---



##### Table of Contents



31




---



##### Table of Contents



32




---



##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk
       33




---



##### Table of Contents



Item 4. Controls and Procedures
  
 Part II: Other Information
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
    34




---



##### Table of Contents



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  Maximum Number (orTotal Number of
    
    Approximate DollarShares Purchased as
    
    Value) of Shares thatTotal Number of
    
    
    
    
    
    Part of Publicly
    
    May Yet BeShares
    
    Average Price Paid
    
    Announced Plans or
    
    Purchased Under thePeriod
    
    Purchased
    
    per Share
    
    Programs
    
    Plans or Programs(in thousands)Q2 Total
    
    
    843,200
    
    
    
    8.99
    
    
    
    843,200
    
    
    
    181,995July 1-31, 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    181,995August 1-31, 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    181,995September 1-30, 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    181,995Q3 Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    181,995Total
    
    
    843,200
    
    
    
    8.99
    
    
    
    843,200
    
    
    
    181,995
 35




---



##### Table of Contents



Item 6. Exhibits
 3.1
    
    Second Amended and Restated Certificate of Incorporation of LIN TV
Corp., as amended (filed as Exhibit 3.1 to the Companys Quarterly
Report on Form 10-Q filed as of August 9, 2004 (File Nos. 001-31311
and 000-25206) and incorporated by reference herein)3.2
    
    Second Amended and Restated Bylaws of LIN TV Corp., as amended (filed
as Exhibit 3.2 to the Companys Quarterly Report on Form 10-Q filed as
of August 9, 2004 (File Nos. 001-31311 and 000-25206) and incorporated
by reference herein)3.3
    
    Restated Certificate of Incorporation of LIN Television Corporation
(filed as Exhibit 3.1 to the Quarterly Report on Form 10-Q of LIN TV
Corp. and LIN Television Corporation for the fiscal quarter ended June
30, 2003 (File No. 000-25206) and incorporated by reference herein)3.4
    
    Restated Bylaws of LIN Television Corporation (filed as Exhibit 3.4 to
the Registration Statement on Form S-1 of LIN Television Corporation
and LIN Holding Corp. (Registration No. 333-54003) and incorporated by
reference herein)4.1
    
    Specimen of stock certificate representing LIN TV Corp. Class A Common
stock, par value $.01 per share (filed as Exhibit 4.1 to LIN TV
Corp.s Registration Statement on Form S-1 (Registration No.
333-83068) and incorporated by reference herein)4.2
    
    Indenture, dated as of May 12, 2003, among LIN Television Corporation,
the guarantors named therein and the Bank of New York, as Trustee,
relating to the 6 1/2 % Senior Subordinated Notes (filed as Exhibit
4.1 to the Companys Current Report on Form 8-K filed as of May 14,
2003 (File Nos. 001-31311 and 000-25206) and incorporated by reference
herein)4.3
    
    Indenture, dated as of May 12, 2003, among LIN Television Corporation,
the guarantors named therein and the Bank of New York, as Trustee,
relating to the 2.50% Senior Subordinated Debentures (filed as Exhibit
4.2 to the Companys Current Report on Form 8-K filed as of May 14,
2003 (File Nos. 001-31311 and 000-25206) and incorporated by reference
herein)4.4
    
    Indenture, dated as of September 29, 2005, among LIN Television
Corporation, the guarantors listed therein and The Bank of New York
Trust Company, N.A., as Trustee, relating to the 6 1/2 % Senior
Subordinated Notes due 2013  Class B of LIN Television Corporation
(filed as Exhibit 4.1 to the Companys Current Report on Form 8-K
filed as of October 5, 2005 (File Nos. 001-31311 and 000- 25206) and
incorporated by reference herein)4.5
    
    Supplemental Indenture, dated as of March 10, 2005, among WAPA
America, Inc., WWHO Broadcasting, LLC, LIN Television Corporation and
The Bank of New York, as Trustee, for the 2.50% Exchangeable Senior
Subordinated Debentures due 2033 (filed as Exhibit 4.5 to the
Companys Quarterly Report on Form 10-Q filed as of November 9, 2005
(File Nos. 001-31311 and 000-25206) and incorporated by reference
herein)4.6
    
    Supplemental Indenture, dated as of March 10, 2005, among WAPA
America, Inc., WWHO Broadcasting, LLC, LIN Television Corporation and
The Bank of New York, as Trustee, for the 6 1/2 % Senior Subordinated
Notes due 2013 (filed as Exhibit 4.6 to the Companys Quarterly
Report on Form 10-Q filed as of November 9, 2005 (File Nos. 001-31311
and
 36




---



##### Table of Contents



000-25206) and incorporated by reference herein)4.7
    
    Supplemental Indenture, dated as of March 16, 2006, among LIN of
Alabama, LLC, LIN of Colorado, LLC, LIN of New Mexico, LLC, LIN of
Wisconsin, LLC, and S&E Network, Inc., LIN Television Corporation and
The Bank of New York, as Trustee for the 2.50% Exchangeable Senior
Subordinated Debentures due 2033 (filed as Exhibit 4.7 to the
Companys Annual Report on Form 10-K filed as of March 16, 2006 (File
Nos. 001-31311 and 000-25206) and incorporated by reference herein)4.8
    
    Supplemental Indenture, dated as of March 16, 2006, among LIN of
Alabama, LLC, LIN of Colorado, LLC, LIN of New Mexico, LLC, LIN of
Wisconsin, LLC, and S&E Network, Inc., LIN Television Corporation and
The Bank of New York, as Trustee for the 6 1/2 % Senior Subordinated
Notes due 2013 (filed as Exhibit 4.8 to the Companys Annual Report
on Form 10-K filed as of March 16, 2006 (File Nos. 001-31311 and
000-25206) and incorporated by reference herein)31.1
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of
2002 of the Chief Executive Officer and Chief Financial Officer of
LIN TV Corp.31.2
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of
2002 of the Chief Executive Officer and Chief Financial Officer of
LIN Television Corporation.32.1
    
    Certification pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 of the Chief Executive Officer and Chief Financial Officer of
LIN TV Corp.32.2
    
    Certification pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 of the Chief Executive Officer and Chief Financial Officer of
LIN Television Corporation
 37




---



##### Table of Contents



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

(Principal Accounting
Officer) 38




---



##### Table of Contents



Item 1. Financial StatementsLIN Television CorporationCondensed Consolidated Balance Sheets
    
    
    40Condensed Consolidated Statements of Operations
    
    
    41Condensed Consolidated Statements of Cash Flows
    
    
    42Notes to Condensed Consolidated Financial Statements
    
    
    43
 39




---



##### Table of Contents



LIN Television Corporation
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
 September 30,
    
    
    December 31,2006
    
    
    2005(In thousands, except share data)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    18,994
    
    
    $
    11,135Accounts receivable, less allowance for doubtful accounts (2006 - $1,565; 2005 - $1,148)
    
    
    91,278
    
    
    
    85,575Program rights
    
    
    21,488
    
    
    
    25,960Other current assets
    
    
    6,914
    
    
    
    3,534Total current assets
    
    
    138,674
    
    
    
    126,204Property and equipment, net
    
    
    226,644
    
    
    
    237,676Deferred financing costs
    
    
    18,363
    
    
    
    20,173Equity investments
    
    
    61,760
    
    
    
    63,526Program rights
    
    
    24,100
    
    
    
    7,307Goodwill
    
    
    536,407
    
    
    
    623,383Broadcast licenses and other intangible assets, net
    
    
    1,110,856
    
    
    
    1,308,598Other assets
    
    
    16,008
    
    
    
    19,766Total assets
    
    $
    2,132,812
    
    
    $
    2,406,633LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    10,100
    
    
    $
    8,292Accrued payroll and related costs
    
    
    17,612
    
    
    
    12,221Accrued interest expense
    
    
    15,619
    
    
    
    6,553Accrued sales volume discount
    
    
    3,045
    
    
    
    5,287Other accrued expenses
    
    
    23,716
    
    
    
    11,259Program obligations
    
    
    28,529
    
    
    
    30,375Total current liabilities
    
    
    98,621
    
    
    
    73,987Long-term debt
    
    
    966,275
    
    
    
    981,714Deferred income taxes, net
    
    
    348,685
    
    
    
    439,619Program obligations
    
    
    27,592
    
    
    
    7,343Purchase price payable
    
    
    52,250
    
    
    
    Other liabilities
    
    
    51,070
    
    
    
    60,540Total liabilities
    
    
    1,544,493
    
    
    
    1,563,203Preferred stock of Banks Broadcasting, Inc., $0.01 par value, 179,322 shares
issued and outstanding at September 30, 2006 and December 31, 2005
    
    
    10,206
    
    
    
    14,558Investment in parent companys common stock, at cost
    
    
    (18,005
    )
    
    
    (4,777
    )Additional paid-in capital
    
    
    1,085,272
    
    
    
    1,077,225Accumulated deficit
    
    
    (472,731
    )
    
    
    (227,908
    )Accumulated other comprehensive loss
    
    
    (16,423
    )
    
    
    (15,668
    )Total stockholders equity
    
    
    578,113
    
    
    
    828,872Total liabilities, preferred stock and stockholders equity
    
    $
    2,132,812
    
    
    $
    2,406,633
  40




---



##### Table of Contents



LIN Television Coporation
 
 
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(in thousands)
    
    2006
    
    
    2005
    
    
    2006
    
    
    2005Net revenues
    
    $
    115,753
    
    
    $
    91,003
    
    
    $
    331,972
    
    
    $
    268,857Operating costs and expenses:Direct operating (excluding depreciation of $8.6
million and $6.6 million for the three months ended
September 30, 2006 and 2005, respectively, and $27.9
million and $22.8 million for the nine months ended
September 30, 2006 and 2005, respectively)
    
    
    33,883
    
    
    
    27,964
    
    
    
    100,028
    
    
    
    82,008Selling, general and administrative
    
    
    35,431
    
    
    
    26,192
    
    
    
    102,714
    
    
    
    77,838Amortization of program rights
    
    
    7,421
    
    
    
    6,833
    
    
    
    22,475
    
    
    
    19,222Corporate
    
    
    6,248
    
    
    
    4,362
    
    
    
    24,827
    
    
    
    14,716Impairment of broadcast licenses and goodwill
    
    
    
    
    
    
    
    
    
    
    333,553
    
    
    
    Depreciation and amortization of intangible assets
    
    
    9,735
    
    
    
    7,151
    
    
    
    31,600
    
    
    
    24,063Total operating costs
    
    
    92,718
    
    
    
    72,502
    
    
    
    615,197
    
    
    
    217,847Operating income (loss)
    
    
    23,035
    
    
    
    18,501
    
    
    
    (283,225
    )
    
    
    51,010Other expense (income):Interest expense, net
    
    
    18,269
    
    
    
    11,115
    
    
    
    52,397
    
    
    
    32,860Share of income in equity investments
    
    
    (696
    )
    
    
    (410
    )
    
    
    (1,705
    )
    
    
    (2,119
    )Minority interest in loss of Banks Broadcasting, Inc.
    
    
    (161
    )
    
    
    (96
    )
    
    
    (4,352
    )
    
    
    (382
    )Gain on derivative instruments
    
    
    (1,446
    )
    
    
    (1,860
    )
    
    
    (954
    )
    
    
    (3,455
    )Loss on extinguishment of debt
    
    
    
    
    
    
    1,082
    
    
    
    
    
    
    
    13,412Other, net
    
    
    (279
    )
    
    
    95
    
    
    
    4,860
    
    
    
    261Total other expense, net
    
    
    15,687
    
    
    
    9,926
    
    
    
    50,246
    
    
    
    40,577Income (loss) before provision for (benefit from)
income taxes
    
    
    7,348
    
    
    
    8,575
    
    
    
    (333,471
    )
    
    
    10,433Provision for (benefit from) income taxes
    
    
    3,495
    
    
    
    4,789
    
    
    
    (88,648
    )
    
    
    6,872Net income (loss)
    
    $
    3,853
    
    
    $
    3,786
    
    
    $
    (244,823
    )
    
    $
    3,561
  41




---



##### Table of Contents



LIN Televsion Corporation
 
 Condensed Consolidated Statements of Cash Flows  (Unaudited)
 Nine months endedSeptember 30,2006
    
    
    2005(In thousands)OPERATING ACTIVITIES:Net (loss) income
    
    $
    (244,823
    )
    
    $
    3,561Adjustment to reconcile net (loss) income to net cash provided by operating activities:Depreciation and amortization of intangible assets
    
    
    31,600
    
    
    
    24,063Impairment of broadcast licenses and goodwill
    
    
    333,553
    
    
    
    Amortization of financing costs and note discounts
    
    
    6,495
    
    
    
    4,654Amortization of program rights
    
    
    22,475
    
    
    
    19,222Program payments
    
    
    (23,055
    )
    
    
    (21,545
    )Program buyout payments related to acquisitions
    
    
    
    
    
    
    (21,420
    )Loss on extinguishment of debt
    
    
    
    
    
    
    13,412Gain on derivative instruments
    
    
    (954
    )
    
    
    (3,455
    )Share of income in equity investments
    
    
    (1,705
    )
    
    
    (2,119
    )Deferred income taxes, net
    
    
    (89,830
    )
    
    
    5,351Stock-based compensation
    
    
    7,076
    
    
    
    1,873Loss on investment in USDTV
    
    
    5,000
    
    
    
    Minority
interest in Banks Broadcasting, Inc.
    
    
    (4,352
    )
    
    
    (382
    )Other, net
    
    
    (293
    )
    
    
    1,198Changes in operating assets and liabilities, net of acquisitions and disposals:Accounts receivable
    
    
    (6,120
    )
    
    
    1,951Other assets
    
    
    (2,681
    )
    
    
    (2,664
    )Accounts payable
    
    
    1,808
    
    
    
    (1,398
    )Accrued payroll and related costs
    
    
    5,391
    
    
    
    4,717Accrued interest expense
    
    
    9,066
    
    
    
    2,748Accrued sales volume discount
    
    
    (2,242
    )
    
    
    (2,538
    )Other liabilities
    
    
    7,822
    
    
    
    (2,078
    )Net cash provided by operating activities
    
    
    54,231
    
    
    
    25,151INVESTING ACTIVITIES:Capital expenditures
    
    
    (9,384
    )
    
    
    (8,581
    )Capital contribution from minority interest in Banks Broadcasting, Inc.
    
    
    
    
    
    
    550Distributions from equity investments
    
    
    3,871
    
    
    
    3,464Acquisition of broadcast licenses
    
    
    
    
    
    
    (232
    )Deposit on acquisition of business
    
    
    (2,750
    )
    
    
    (19,500
    )Payments for business combinations
    
    
    (3,003
    )
    
    
    (85,000
    )USDTV Investment and other investments
    
    
    (2,304
    )
    
    
    Other, net
    
    
    
    
    
    
    (3,044
    )Net cash used in investing activities
    
    
    (13,570
    )
    
    
    (112,343
    )FINANCING ACTIVITIES:Proceeds
from issuance of
common stock under employee stock plans
    
    
    550
    
    
    
    1,935Proceeds from issuance of long-term debt
    
    
    
    
    
    
    520,252Long-term debt financing costs
    
    
    (124
    )
    
    
    (9,599
    )(Payments on) proceeds from revolver debt
    
    
    (20,000
    )
    
    
    75,000Principal payments on long-term debt
    
    
    
    
    
    
    (494,940
    )Investment
in parent companys common stock, at cost
    
    
    (13,228
    )
    
    
    Cash expenses associated with early extinguishment of debt
    
    
    
    
    
    
    (7,108
    )Net cash (used in) provided by financing activities
    
    
    (32,802
    )
    
    
    85,540Net increase (decrease) in cash and cash equivalents
    
    
    7,859
    
    
    
    (1,652
    )Cash and cash equivalents at the beginning of the period
    
    
    11,135
    
    
    
    14,797Cash and cash equivalents at the end of the period
    
    $
    18,994
    
    
    $
    13,145
  42




---



##### Table of Contents



Note 1  Basis of Presentation
      st
  43




---



##### Table of Contents



Note 2
 Stock-Based Compensation
  Three Months Ended
    
    
    Nine Months EndedSeptember 30, 2005
    
    
    September 30, 2005Net income, as reported
    
    $
    3,786
    
    
    $
    3,561Add:
Stock-based employee compensation expense, included in reported net income, net of related tax effect
    
    
    55
    
    
    
    1,106Deduct: Total stock-based employee compensation
expense determined under the fair value based
method for all awards, net of related tax effect
    
    
    (465
    )
    
    
    (1,287
    )Pro forma net income
    
    $
    3,376
    
    
    $
    3,380
  Note 3  Acquisitions
  44




---



##### Table of Contents



Acquisition Reserves
 Balance as of
    
    
    
    
    
    
    
    
    
    
    Balance as ofDecember 31,
    
    
    
    
    
    
    
    
    
    
    September 30,Acquisition Date
    
    
    2005
    
    
    Payments
    
    
    Adjustments
    
    
    2006Acquisition of Sunrise Television Corp.
    
    May 2, 2002
    
    
    211
    
    
    
    75
    
    
    
    
    
    
    
    136Stations acquired from Viacom
    
    March 31, 2005
    
    
    295
    
    
    
    
    
    
    
    
    
    
    
    295Stations acquired from Emmis
    
    November 30, 2005
    
    $
    7,910
    
    
    $
    998
    
    
    $
    (41
    )
    
    
    6,871$
    8,416
    
    
    $
    1,073
    
    
    $
    (41
    )
    
    $
    7,302
  45




---



##### Table of Contents



Pro
Forma:
 Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,(unaudited)
    
    2006
    
    2005
    
    2006
    
    2005Net revenues
    
    $
    118,946
    
    
    $
    108,801
    
    
    $
    341,784
    
    
    $
    325,447Operating income (loss)
    
    
    23,306
    
    
    
    21,825
    
    
    
    (282,536
    )
    
    
    57,746Net income (loss)
    
    
    3,509
    
    
    
    3,736
    
    
    
    (246,064
    )
    
    
    814
 Note 4  Investments
  September 30,
    
    
    December 31,2006
    
    
    2005NBC Universal joint venture
    
    $
    54,610
    
    
    $
    54,803WAND (TV) Partnership
    
    
    6,645
    
    
    
    8,595Other
    
    
    505
    
    
    
    128$
    61,760
    
    
    $
    63,526
 Joint Venture with NBC Universal:
  46




---



##### Table of Contents



Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    June 30,2006
    
    2005
    
    2006
    
    2005Revenue
    
    $
    19,360
    
    
    $
    19,216
    
    
    $
    67,207
    
    
    $
    60,916Other expense
    
    
    16,301
    
    
    
    16,401
    
    
    
    49,154
    
    
    
    49,634Net income
    
    
    3,059
    
    
    
    2,815
    
    
    
    18,053
    
    
    
    11,282
 September 30,
    
    December 31,2006
    
    2005Current assets
    
    $
    11,417
    
    
    $
    10,617Non-current assets
    
    
    230,536
    
    
    
    232,075Current liabilities
    
    
    906
    
    
    
    724Non-current liabilities
    
    
    815,500
    
    
    
    815,500
  WAND (TV) Partnership:
  Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2006
    
    2005
    
    2006
    
    2005Net revenues
    
    $
    1,424
    
    
    $
    1,612
    
    
    $
    5,240
    
    
    $
    4,757Operating loss (1)
    
    
    (819
    )
    
    
    (506
    )
    
    
    (6,940
    )
    
    
    (580
    )Net (loss) income
    
    
    284
    
    
    
    (491
    )
    
    
    (5,828
    )
    
    
    (542
    )
 September 30,
    
    December 31,2006
    
    2005Current assets
    
    $
    2,673
    
    
    $
    2,398Non-current assets
    
    
    14,116
    
    
    
    20,702Current liabilities
    
    
    1,174
    
    
    
    1,276Non-current liabilities
    
    
    
    
    
    
    14
 47




---



##### Table of Contents



(1)
    
    An impairment charge of $5.9 million relating to the broadcast license of WAND-TV is
included in the operating results for the nine months ended September 30, 2006. (Further
information is contained in Note 5-Intangible Assets.) Note 5  Intangible Assets
  EstimatedRemaining Useful
    
    
    September 30,
    
    
    December 31,Life (Years)
    
    
    2006
    
    
    2005Amortizing Intangible Assets:LMA purchase options
    
    
    1
    
    
    $
    4,212
    
    
    $
    4,212Network affiliations
    
    
    1
    
    
    
    1,753
    
    
    
    1,753Other intangibles
    
    
    1-27
    
    
    
    7,489
    
    
    
    6,025Accumulated amortization
    
    
    
    
    
    
    (8,386
    )
    
    
    (4,686
    )5,068
    
    
    
    7,304Indefinite-Lived Intangible Assets:Broadcast licenses
    
    
    
    
    
    
    1,105,788
    
    
    
    1,301,294Goodwill
    
    
    
    
    
    
    536,407
    
    
    
    623,383$
    1,642,195
    
    
    $
    1,924,677Goodwill
    
    
    
    
    
    
    536,407
    
    
    
    623,383Broadcast licenses and other
intangible assets, net
    
    
    
    
    
    
    1,110,856
    
    
    
    1,308,598Total intangible assets
    
    
    
    
    
    $
    1,647,263
    
    
    $
    1,931,981
  Three Months
    
    Nine MonthsEnded September
    
    Ended September
    
    Estimated amortization expense30,
    
    30,
    
    For the year ended December 31,2005
    
    2006
    
    2005
    
    2006
    
    2006
    
    2007
    
    2008
    
    2009
    
    2010
    
    ThereafterAmortization
expense
    
    $
    1,158
    
    
    $
    547
    
    
    $
    3,700
    
    
    $
    1,213
    
    
    $
    1,244
    
    
    $
    1,413
    
    
    $
    219
    
    
    $
    37
    
    
    $
    36
    
    
    $
    2,119
   48




---



##### Table of Contents



Note 6  Debt
  September 30,
    
    
    December 31,2006
    
    
    2005Credit Facility
    
    $
    296,000
    
    
    $
    316,0006 1/2% Senior Subordinated Notes due 2013
    
    
    375,000
    
    
    
    375,000$190,000, 6 1/2% Senior Subordinated Notes  Class B due 2013
(net of discount of $12,881 and $14,283 at September 30, 2006
and December 31, 2005, respectively)
    
    
    177,119
    
    
    
    175,717$125,000, 2.50% Exchangeable Senior Subordinated Debentures due
2033 (net of discount of $6,844 and $10,003 at September 30, 2006
and December 31, 2005, respectively)
    
    
    118,156
    
    
    
    114,997Total long-term debt
    
    $
    966,275
    
    
    $
    981,714
 Note 7  Related Party Transactions
 Financial Advisory Agreement
 Centennial Cable of Puerto Rico:
 49




---



##### Table of Contents



Note 8  Contingencies
 GECC Note.
 
    
    GECC could force LIN TV Corp. to sell the stock of LIN
Television held by LIN TV Corp. to satisfy outstanding
amounts under the GECC note;
    
    if more than 50% of the ownership of LIN Television
had to be sold to satisfy the GECC note, it could cause an
acceleration of the Companys credit facility and notes;
and
    
    if the GECC note is prepaid because of an acceleration
on default or otherwise, or if the note is repaid at
maturity, the Company may incur a substantial tax
liability.
  Note 9  Retirement Plans
   50




---



##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Service cost
    
    $
    625
    
    
    $
    549
    
    
    $
    1,875
    
    
    $
    1,647Interest cost
    
    
    1,400
    
    
    
    1,350
    
    
    
    4,200
    
    
    
    4,050Expected return on plan assets
    
    
    (1,475
    )
    
    
    (1,435
    )
    
    
    (4,425
    )
    
    
    (4,305
    )Amortization of prior service cost
    
    
    30
    
    
    
    30
    
    
    
    90
    
    
    
    90Amortization of net loss
    
    
    320
    
    
    
    241
    
    
    
    960
    
    
    
    723Net periodic benefit cost
    
    $
    900
    
    
    $
    735
    
    
    $
    2,700
    
    
    $
    2,205
  Note 10  Share Repurchase Program
  Note 11  Derivative Financial Instruments
 Accounting Policy:
  51




---



##### Table of Contents



Note 12  Comprehensive Income (Loss)
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Net income (loss)
    
    $
    3,853
    
    
    $
    3,786
    
    
    $
    (244,823
    )
    
    $
    3,561Other comprehensive (loss) income, net of tax:Change in the fair market value of hedged items
    
    
    (1,191
    )
    
    
    
    
    
    
    (755
    )
    
    
    Comprehensive income (loss)
    
    $
    2,662
    
    
    
    3,786
    
    
    $
    (245,578
    )
    
    $
    3,561
 Note
13  Recent Accounting Pronouncements
    52




---



##### Table of Contents



53




---



##### Table of Contents



54




---



##### Table of Contents



Note
14  Subsequent Events
   55