##### 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 June 30,
    2004                                            

|                                  |  |                                  
|--------------------------------- |  | ---------------------------------
|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 as     
|specified in its charter)         |  | specified in its charter)        
|                                 
|Delaware                          |  | Delaware                         
|(State or other jurisdiction of   |  | (State or other jurisdiction of  
|incorporation or organization)    |  | incorporation or organization)   
|                                 
|05-0501252                        |  | 13-3581627                       
|(I.R.S. Employer                  |  | (I.R.S. Employer                 
|Identification No.)               |  | Identification No.)              

Four Richmond Square, Suite 200,
Providence, Rhode Island 02906

(Address of principal executive
offices)


(401) 454-2880

(Registrants telephone number, including
area code)


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 August 4,
2004: 26,824,086 shares.

LIN TV Corp. Class B common stock,
$0.01 par value, issued and outstanding at August 4,
2004: 23,508,119 shares.

LIN TV Corp. Class C common stock,
$0.01 par value, issued and outstanding at August 4,
2004: 2 shares.

LIN Television Corporation common stock,
$0.01 par value, issued and outstanding at August 4,
2004: 1,000 shares.



---






---










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             |    |  | 43 | 
|Item 2.                                                                       |  | Managements Discussion
    and Analysis of Financial Condition and Results of Operations |    |  | 14 | 
|Item 3.                                                                       |  | Quantitative and Qualitative
    Disclosures about Market Risk                            |    |  | 39 | 
|Item 4.                                                                       |  | Controls and Procedures                                                                   |    |  | 39 | 
|PART II.  OTHER
    INFORMATION                                              
|Item 1.                                                                       |  | Legal Proceedings                                                                         |    |  | 39 | 
|Item 4.                                                                       |  | Submission of Matters to a
    Vote of Security Holders                                   |    |  | 40 | 
|Item 6.                                                                       |  | Exhibits and Reports on
    Form 8-K                                                      |    |  | 40 | 
|Signature Page                                                                |  |                                                                                           | 42 | 
|EX-3.1 2ND AMENDED CERTIFICATE OF INCORPORATION (LIN TV CORP.)               
|EX-3.2 2ND AMENDED & RESTATED BYLAWS (LIN TV CORP.)                          
|EX-31.1 SECT. 302 CERTIFICATION OF CEO (LIN TV CORP.)                        
|EX-31.2 SECT. 302 CERTIFICATION OF CONTROLLER (LIN TV CORP.)                 
|EX-31.3 SECT. 302 CERTIFICATION OF TREASURER (LIN TV CORP.)                  
|EX-31.4 SECT. 302 CERTIFICATION OF VP OF FINANCE (LIN TV CORP.)              
|EX-31.5 SECT. 302 CERTIFICATION OF CEO (LIN TELEVISION CORPORATION)          
|EX-31.6 SECT. 302 CERTIFICATION OF CONTROLLER (LIN TELEVISION CORPORATION)   
|EX-31.7 SECT. 302 CERTIFICATION OF TREASURER (LIN TELEVISION CORPORATION)    
|EX-31.8 SECT. 302 CERTIFICATION OF VP OF FINANCE (LIN TELEVISION CORPORATION)
|EX-32.1 SECT. 906 CERTIFICATION OF CEO (LIN TV CORP.)                        
|EX-32.2 SECT. 906 CERTIFICATION OF CEO (LIN TELEVISION CORPORATION)          



1



---



##### Table of Contents






PART I: FINANCIAL
INFORMATION





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

LIN TV CORP.




CONDENSED CONSOLIDATED BALANCE
SHEETS

|                                                                                                                                                                                                                                                                |                           |                                   |                                                                 |              |           |           |           |         |           |           | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------- | --------------------------------- | --------------------------------------------------------------- | ------------ | --------- | --------- | --------- | ------- | --------- | --------- | 
|                                                                                                                                                                                                                                                                |                           | June 30,                          |                                                                 | December 31,
|                                                                                                                                                                                                                                                                |                           | 2004                              |                                                                 | 2003        
|                                                                                                                                                                                                                                                                |                           |                                   |                                                                 |             
|                                                                                                                                                                                                                                                                |                           | (Unaudited)                       |                                                                 |             
|                                                                                                                                                                                                                                                                |                           |                                  
|                                                                                                                                                                                                                                                                |                           | (In thousands, except share data)
|ASSETS                                                                                                                                                                                                                                                         
|Current assets:                                                                                                                                                                                                                                                 |                           |                                   |                                                                 |              |           |           |           |        
|Cash and cash equivalents                                                                                                                                                                                                                                       |                           | $                                 | 15,511                                                          |              |           | $         | 9,475     |        
|Accounts receivable, less allowance for doubtful
    accounts (2004 - $1,173; 2003 - $1,698)                                                                                                                                                                    |                           |                                   | 70,226                                                          |              |           |           | 72,340    |        
|Program rights                                                                                                                                                                                                                                                  |                           |                                   | 9,974                                                           |              |           |           | 17,661    |        
|Other current assets                                                                                                                                                                                                                                            |                           |                                   | 6,903                                                           |              |           |           | 3,216     |        
|                                                                                                                                                                                                                                                                |                           |                                   |                                                                 |              |           |           |           |        
|                                                                                                                                                                                                                                                                | Total current assets      |                                   |                                                                 | 102,614      |           |           |           | 102,692 |          
|Property and equipment, net                                                                                                                                                                                                                                     |                           |                                   | 196,917                                                         |              |           |           | 203,049   |        
|Deferred financing costs                                                                                                                                                                                                                                        |                           |                                   | 12,462                                                          |              |           |           | 14,332    |        
|Equity investments                                                                                                                                                                                                                                              |                           |                                   | 65,837                                                          |              |           |           | 77,305    |        
|Program rights                                                                                                                                                                                                                                                  |                           |                                   | 9,950                                                           |              |           |           | 11,444    |        
|Goodwill                                                                                                                                                                                                                                                        |                           |                                   | 583,091                                                         |              |           |           | 586,269   |        
|Broadcast licenses                                                                                                                                                                                                                                              |                           |                                   | 1,119,521                                                       |              |           |           | 1,102,708 |        
|Other intangible assets, net                                                                                                                                                                                                                                    |                           |                                   | 2,657                                                           |              |           |           | 3,289     |        
|Other assets                                                                                                                                                                                                                                                    |                           |                                   | 15,215                                                          |              |           |           | 14,822    |        
|                                                                                                                                                                                                                                                                |                           |                                   |                                                                 |              |           |           |           |        
|                                                                                                                                                                                                                                                                |                           |                                   | Total Assets                                                    |              | $         | 2,108,264 |           |         | $         | 2,115,910 | 
|                                                                                                                                                                                                                                                                |                           |                                   |                                                                 |              |           |           |           |        
|                                                                                                                                                                                                                                                               
|LIABILITIES, PREFERRED STOCK AND
    STOCKHOLDERS EQUITY                                                                                                                                                                                                      
|Current liabilities:                                                                                                                                                                                                                                            |                           |                                   |                                                                 |              |           |           |           |        
|Current portion of long-term debt                                                                                                                                                                                                                               |                           | $                                 | 37,000                                                          |              |           | $         | 7,000     |        
|Accounts payable                                                                                                                                                                                                                                                |                           |                                   | 5,928                                                           |              |           |           | 7,169     |        
|Accrued income taxes                                                                                                                                                                                                                                            |                           |                                   | 111                                                             |              |           |           | 320       |        
|Accrued interest expense                                                                                                                                                                                                                                        |                           |                                   | 8,902                                                           |              |           |           | 9,846     |        
|Accrued sales volume discount                                                                                                                                                                                                                                   |                           |                                   | 2,782                                                           |              |           |           | 6,075     |        
|Other accrued expenses                                                                                                                                                                                                                                          |                           |                                   | 17,478                                                          |              |           |           | 13,423    |        
|Program obligations                                                                                                                                                                                                                                             |                           |                                   | 15,797                                                          |              |           |           | 23,042    |        
|                                                                                                                                                                                                                                                                |                           |                                   |                                                                 |              |           |           |           |        
|                                                                                                                                                                                                                                                                | Total current liabilities |                                   |                                                                 | 87,998       |           |           |           | 66,875  |          
|Long-term debt, excluding current portion                                                                                                                                                                                                                       |                           |                                   | 632,766                                                         |              |           |           | 693,367   |        
|Deferred income taxes, net                                                                                                                                                                                                                                      |                           |                                   | 536,416                                                         |              |           |           | 527,588   |        
|Program obligations                                                                                                                                                                                                                                             |                           |                                   | 9,379                                                           |              |           |           | 11,640    |        
|Other liabilities                                                                                                                                                                                                                                               |                           |                                   | 47,438                                                          |              |           |           | 54,306    |        
|                                                                                                                                                                                                                                                                |                           |                                   |                                                                 |              |           |           |           |        
|                                                                                                                                                                                                                                                                |                           | Total liabilities                 |                                                                 |              | 1,313,997 |           |           |         | 1,353,776 |          
|                                                                                                                                                                                                                                                                |                           |                                   |                                                                 |              |           |           |           |        
|Preferred stock of Banks Broadcasting, Inc.
    $0.01 par value 173,822 issued and outstanding at
    June 30, 2004                                                                                                                                             |                           |                                   | 14,666                                                          |              |           |           |          |        
|                                                                                                                                                                                                                                                                |                           |                                   |                                                                 |              |           |           |           |        
|Stockholders equity:                                                                                                                                                                                                                                           |                           |                                   |                                                                 |              |           |           |           |        
|Class A common stock, $0.01 par value,
    100,000,000 shares authorized, 26,808,832 shares at
    June 30, 2004 and 26,652,060 shares at
    December 31, 2003, issued and outstanding                                                                         |                           |                                   | 268                                                             |              |           |           | 266       |        
|Class B common stock, $0.01 par value,
    50,000,000 shares authorized, 23,508,119 shares at
    June 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
    June 30, 2004 and December 31, 2003, issued and
    outstanding; convertible into an equal number of Class A
    common stock                                          |                           |                                   |                                                                |              |           |           |          |        
|Additional paid-in capital                                                                                                                                                                                                                                      |                           |                                   | 1,068,382                                                       |              |           |           | 1,066,897 |        
|Accumulated deficit                                                                                                                                                                                                                                             |                           |                                   | (278,825                                                        | )            |           |           | (294,805  | )      
|Accumulated other comprehensive loss                                                                                                                                                                                                                            |                           |                                   | (10,459                                                         | )            |           |           | (10,459   | )      
|                                                                                                                                                                                                                                                                |                           |                                   |                                                                 |              |           |           |           |        
|                                                                                                                                                                                                                                                                |                           | Total stockholders equity        |                                                                 |              | 779,601   |           |           |         | 762,134   |          
|                                                                                                                                                                                                                                                                |                           |                                   |                                                                 |              |           |           |           |        
|                                                                                                                                                                                                                                                                |                           |                                   | Total liabilities, preferred stock and
    stockholders equity |              | $         | 2,108,264 |           |         | $         | 2,115,910 | 
|                                                                                                                                                                                                                                                                |                           |                                   |                                                                 |              |           |           |           |        

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

2



---



##### Table of Contents



LIN TV CORP.




CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS

|                                                                                                                                           |                                                                                                                                                                                                                                                              |                                              |        |                  |   |      |         |        |   |   |         |        |   |   |         |        |  
|------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------- | ------ | ---------------- | - | ---- | ------- | ------ | - | - | ------- | ------ | - | - | ------- | ------ | -
|                                                                                                                                           |                                                                                                                                                                                                                                                              |                                              |        |                 
|                                                                                                                                           |                                                                                                                                                                                                                                                              | Three Months                                 |        | Six Months Ended
|                                                                                                                                           |                                                                                                                                                                                                                                                              | Ended June 30,                               |        | June 30,        
|                                                                                                                                           |                                                                                                                                                                                                                                                              |                                              |        |                 
|                                                                                                                                           |                                                                                                                                                                                                                                                              | 2004                                         |        | 2003             |   | 2004 |         | 2003  
|                                                                                                                                           |                                                                                                                                                                                                                                                              |                                              |        |                  |   |      |         |       
|                                                                                                                                           |                                                                                                                                                                                                                                                              |                                             
|                                                                                                                                           |                                                                                                                                                                                                                                                              | (In thousands, except per share information)
|                                                                                                                                           |                                                                                                                                                                                                                                                              | (unaudited)                                 
|Net revenues                                                                                                                               |                                                                                                                                                                                                                                                              | $                                            | 96,338 |                  |   | $    | 89,204  |        |   | $ | 176,182 |        |   | $ | 162,831 |       
|Operating costs and expenses:                                                                                                              |                                                                                                                                                                                                                                                              |                                              |        |                  |   |      |         |        |   |   |         |        |   |   |         |       
|                                                                                                                                           | Direct operating (excluding depreciation of
    $7.8 million and $7.6 million for the three months
    ended June 30, 2004 and 2003, respectively and
    $15.3 million and $15.4 million for the six months
    ended June 30, 2004 and 2003, respectively) |                                              |        | 25,390           |   |      |         | 24,746 |   |   |         | 50,020 |   |   |         | 48,963 |  
|                                                                                                                                           | Selling, general and administrative                                                                                                                                                                                                                          |                                              |        | 24,488           |   |      |         | 22,478 |   |   |         | 46,988 |   |   |         | 43,231 |  
|                                                                                                                                           | Amortization of program rights                                                                                                                                                                                                                               |                                              |        | 5,911            |   |      |         | 5,296  |   |   |         | 11,635 |   |   |         | 10,496 |  
|                                                                                                                                           | Corporate                                                                                                                                                                                                                                                    |                                              |        | 3,930            |   |      |         | 4,182  |   |   |         | 8,028  |   |   |         | 8,102  |  
|                                                                                                                                           | Restructuring charge                                                                                                                                                                                                                                         |                                              |        |                 |   |      |         | 102    |   |   |         |       |   |   |         | 102    |  
|                                                                                                                                           | Depreciation and amortization of intangible assets                                                                                                                                                                                                           |                                              |        | 8,041            |   |      |         | 7,919  |   |   |         | 15,817 |   |   |         | 15,907 |  
|                                                                                                                                           |                                                                                                                                                                                                                                                              |                                              |        |                  |   |      |         |        |   |   |         |        |   |   |         |       
|Total operating costs                                                                                                                      |                                                                                                                                                                                                                                                              |                                              | 67,760 |                  |   |      | 64,723  |        |   |   | 132,488 |        |   |   | 126,801 |       
|                                                                                                                                           |                                                                                                                                                                                                                                                              |                                              |        |                  |   |      |         |        |   |   |         |        |   |   |         |       
|Operating income                                                                                                                           |                                                                                                                                                                                                                                                              |                                              | 28,578 |                  |   |      | 24,481  |        |   |   | 43,694  |        |   |   | 36,030  |       
|Other (income) expense:                                                                                                                    |                                                                                                                                                                                                                                                              |                                              |        |                  |   |      |         |        |   |   |         |        |   |   |         |       
|                                                                                                                                           | Interest expense                                                                                                                                                                                                                                             |                                              |        | 11,957           |   |      |         | 15,233 |   |   |         | 23,696 |   |   |         | 35,754 |  
|                                                                                                                                           | Investment income                                                                                                                                                                                                                                            |                                              |        | (85              | ) |      |         | (370   | ) |   |         | (170   | ) |   |         | (750   | )
|                                                                                                                                           | Share of income in equity investments                                                                                                                                                                                                                        |                                              |        | (2,597           | ) |      |         | (1,689 | ) |   |         | (2,764 | ) |   |         | (1,400 | )
|                                                                                                                                           | Minority interest in loss of Banks Broadcasting,
    Inc.                                                                                                                                                                                                    |                                              |        | (245             | ) |      |         |       |   |   |         | (245   | ) |   |         |       |  
|                                                                                                                                           | Gain on derivative instruments                                                                                                                                                                                                                               |                                              |        | (3,630           | ) |      |         | (4,760 | ) |   |         | (4,620 | ) |   |         | (4,760 | )
|                                                                                                                                           | Loss on extinguishment of debt                                                                                                                                                                                                                               |                                              |        | 1,510            |   |      |         | 23,580 |   |   |         | 4,447  |   |   |         | 53,105 |  
|                                                                                                                                           | Other, net                                                                                                                                                                                                                                                   |                                              |        | 339              |   |      |         | 744    |   |   |         | 220    |   |   |         | 791    |  
|                                                                                                                                           |                                                                                                                                                                                                                                                              |                                              |        |                  |   |      |         |        |   |   |         |        |   |   |         |       
|Total other expense, net                                                                                                                   |                                                                                                                                                                                                                                                              |                                              | 7,249  |                  |   |      | 32,738  |        |   |   | 20,564  |        |   |   | 82,740  |       
|Income (loss) from continuing operations before
    provision for income taxes and cumulative effect of change in
    accounting principle |                                                                                                                                                                                                                                                              |                                              | 21,329 |                  |   |      | (8,257  | )      |   |   | 23,130  |        |   |   | (46,710 | )     
|Provision for income taxes                                                                                                                 |                                                                                                                                                                                                                                                              |                                              | 5,403  |                  |   |      | 2,440   |        |   |   | 9,200   |        |   |   | 4,862   |       
|                                                                                                                                           |                                                                                                                                                                                                                                                              |                                              |        |                  |   |      |         |        |   |   |         |        |   |   |         |       
|Income (loss) from continuing operations before
    discontinued operations and cumulative effect of change in
    accounting principle    |                                                                                                                                                                                                                                                              |                                              | 15,926 |                  |   |      | (10,697 | )      |   |   | 13,930  |        |   |   | (51,572 | )     
|Discontinued operations:                                                                                                                   |                                                                                                                                                                                                                                                              |                                              |        |                  |   |      |         |        |   |   |         |        |   |   |         |       
|                                                                                                                                           | Loss (income) from discontinued operations, net
    of tax provision of $104 and $206 for the three months ended
    June 30, 2004 and 2003, respectively, and $311 and $412 for
    the six months ended June 30, 2004 and 2003, respectively               |                                              |        | 25               |   |      |         | (104   | ) |   |         | (44    | ) |   |         | (112   | )
|                                                                                                                                           | Loss from sale of discontinued operations, net of
    tax benefit of $1,094 for the three and six months ended
    June 30, 2004 and $0 for the three and six months ended
    June 30, 2003                                                                 |                                              |        | 1,284            |   |      |         | 652    |   |   |         | 1,284  |   |   |         | 652    |  
|Cumulative effect of change in accounting
    principle, net of tax effect of $0                                                           |                                                                                                                                                                                                                                                              |                                              |       |                  |   |      |        |        |   |   | (3,290  | )      |   |   |        |       
|                                                                                                                                           |                                                                                                                                                                                                                                                              |                                              |        |                  |   |      |         |        |   |   |         |        |   |   |         |       
|Net income (loss)                                                                                                                          |                                                                                                                                                                                                                                                              | $                                            | 14,617 |                  |   | $    | (11,245 | )      |   | $ | 15,980  |        |   | $ | (52,112 | )     
|                                                                                                                                           |                                                                                                                                                                                                                                                              |                                              |        |                  |   |      |         |        |   |   |         |        |   |   |         |       
|Basic income (loss) per common
    share:                                                                                                  |                                                                                                                                                                                                                                                              |                                              |        |                  |   |      |         |        |   |   |         |        |   |   |         |       
|                                                                                                                                           | Income (loss) from continuing operations before
    discontinued operations and cumulative effect of change in
    accounting principle                                                                                                                      |                                              | $      | 0.32             |   |      | $       | (0.21  | ) |   | $       | 0.28   |   |   | $       | (1.03  | )
|                                                                                                                                           | (Loss) income from discontinued operations, net
    of tax                                                                                                                                                                                                   |                                              |        | (0.00            | ) |      |         | 0.00   |   |   |         | 0.00   |   |   |         | 0.00   |  
|                                                                                                                                           | Loss from sale of discontinued operations, net of
    tax                                                                                                                                                                                                    |                                              |        | (0.03            | ) |      |         | (0.01  | ) |   |         | (0.03  | ) |   |         | (0.01  | )
|                                                                                                                                           | Cumulative effect of change in accounting
    principle, net of tax                                                                                                                                                                                          |                                              |        |                 |   |      |         |       |   |   |         | 0.07   |   |   |         |       |  
|                                                                                                                                           | Net income (loss)                                                                                                                                                                                                                                            |                                              |        | 0.29             |   |      |         | (0.23  | ) |   |         | 0.32   |   |   |         | (1.04  | )
|                                                                                                                                           | Weighted-average number of common shares
    outstanding used in calculating basic income (loss) per common
    share                                                                                                                                        |                                              |        | 50,271           |   |      |         | 49,942 |   |   |         | 50,232 |   |   |         | 49,923 |  
|Diluted income (loss) per common
    share:                                                                                                |                                                                                                                                                                                                                                                              |                                              |        |                  |   |      |         |        |   |   |         |        |   |   |         |       
|                                                                                                                                           | Income (loss) from continuing operations before
    discontinued effect of change in accounting principle                                                                                                                                                    |                                              | $      | 0.31             |   |      | $       | (0.21  | ) |   | $       | 0.27   |   |   | $       | (1.03  | )
|                                                                                                                                           | (Loss) income from discontinued operations, net
    of tax                                                                                                                                                                                                   |                                              |        | (0.00            | ) |      |         | 0.00   |   |   |         | (0.00  | ) |   |         | 0.00   |  
|                                                                                                                                           | Loss from sale of discontinued operations, net of
    tax                                                                                                                                                                                                    |                                              |        | (0.03            | ) |      |         | (0.01  | ) |   |         | (0.03  | ) |   |         | (0.01  | )
|                                                                                                                                           | Cumulative effect of change in accounting
    principle, net of tax                                                                                                                                                                                          |                                              |        |                 |   |      |         |       |   |   |         | 0.06   |   |   |         |       |  
|                                                                                                                                           | Net income (loss)                                                                                                                                                                                                                                            |                                              |        | 0.29             |   |      |         | (0.23  | ) |   |         | 0.31   |   |   |         | (1.04  | )
|                                                                                                                                           | Weighted-average number of common shares
    outstanding used in calculating diluted income (loss) per common
    share                                                                                                                                      |                                              |        | 50,731           |   |      |         | 49,942 |   |   |         | 50,753 |   |   |         | 49,923 |  

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

3



---



##### Table of Contents



LIN TV CORP.




CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS

|                                                                                                                               |  |                  |         |      |  |   |          |  
|------------------------------------------------------------------------------------------------------------------------------ |  | ---------------- | ------- | ---- |  | - | -------- | -
|                                                                                                                               |  |                 
|                                                                                                                               |  | Six Months Ended
|                                                                                                                               |  | June 30,        
|                                                                                                                               |  |                 
|                                                                                                                               |  | 2004             |         | 2003
|                                                                                                                               |  |                  |         |     
|                                                                                                                               |  |                 
|                                                                                                                               |  | (In thousands)  
|                                                                                                                               |  |                 
|                                                                                                                               |  | (Unaudited)     
|Net cash provided by operating
    activities                                                                                  |  | $                | 34,552  |      |  | $ | 11,601   |  
|INVESTING ACTIVITIES:                                                                                                          |  |                  |         |      |  |   |          |  
|Capital expenditures                                                                                                           |  |                  | (10,012 | )    |  |   | (10,187  | )
|Proceeds from disposals of property and equipment                                                                              |  |                  | 30      |      |  |   | 31       |  
|Proceeds from sale of broadcast licenses and
    related operating assets                                                      |  |                  | 24,000  |      |  |   | 10,000   |  
|Investment in equity investments                                                                                               |  |                  | (650    | )    |  |   |         |  
|Capital distributions from equity investments                                                                                  |  |                  | 3,260   |      |  |   | 3,260    |  
|Acquisition of broadcast licenses                                                                                              |  |                  | (9,152  | )    |  |   |         |  
|Other, investments and deposits                                                                                                |  |                  | (28     | )    |  |   |         |  
|Proceeds from liquidation of short-term
    investments                                                                        |  |                  |        |      |  |   | 23,691   |  
|                                                                                                                               |  |                  |         |      |  |   |          |  
|Net cash provided by investing
    activities                                                                                  |  |                  | 7,448   |      |  |   | 26,795   |  
|                                                                                                                               |  |                  |         |      |  |   |          |  
|FINANCING ACTIVITIES:                                                                                                          |  |                  |         |      |  |   |          |  
|Net proceeds on exercises of employee stock
    options and phantom stock units and employee stock purchase plan
    issuances |  |                  | 1,256   |      |  |   | 1,223    |  
|Proceeds from long-term debt                                                                                                   |  |                  |        |      |  |   | 325,000  |  
|Proceeds from Senior Credit Facilities                                                                                         |  |                  |        |      |  |   | 175,000  |  
|Financing costs associated with proceeds from
    previously issued long-term debt                                             |  |                  | (144    | )    |  |   | (9,798   | )
|Net proceeds from revolver debt                                                                                                |  |                  | 8,000   |      |  |   | 50,000   |  
|Principal payments on long-term debt                                                                                           |  |                  | (42,060 | )    |  |   | (676,000 | )
|Cash expenses associated with early
    extinguishment of debt                                                                 |  |                  | (3,016  | )    |  |   | (26,056  | )
|                                                                                                                               |  |                  |         |      |  |   |          |  
|Net cash used in financing
    activities                                                                                      |  |                  | (35,964 | )    |  |   | (160,631 | )
|                                                                                                                               |  |                  |         |      |  |   |          |  
|Net increase (decrease) in cash and cash
    equivalents                                                                       |  |                  | 6,036   |      |  |   | (122,235 | )
|Cash and cash equivalents at the beginning of the
    period                                                                   |  |                  | 9,475   |      |  |   | 143,860  |  
|                                                                                                                               |  |                  |         |      |  |   |          |  
|Cash and cash equivalents at the end of the
    period                                                                         |  | $                | 15,511  |      |  | $ | 21,625   |  
|                                                                                                                               |  |                  |         |      |  |   |          |  

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

4



---



##### Table of Contents



LIN TV CORP.

NOTES TO 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,
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.

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. 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

5



---



##### Table of Contents



LIN TV CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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 |        | Six Months Ended
|                                                                                                                                                       |  | June 30,           |        | June 30,        
|                                                                                                                                                       |  |                    |        |                 
|                                                                                                                                                       |  | 2004               |        | 2003             |  | 2004 |         | 2003
|                                                                                                                                                       |  |                    |        |                  |  |      |         |     
|Net income (loss), as reported                                                                                                                         |  | $                  | 14,617 |                  |  | $    | (11,245 | )    |  | $ | 15,980 |   |  | $ | (52,112 | )
|Add: Stock-based employee compensation expense,
    as reported, net of related tax effect                                                             |  |                    | 23     |                  |  |      |        |      |  |   | 23     |   |  |   |        |  
|Deduct: Total stock-based employee compensation
    expense determined under the fair value based method for all
    awards, net of related tax effect |  |                    | (739   | )                |  |      | (710    | )    |  |   | (1,500 | ) |  |   | (1,446  | )
|                                                                                                                                                       |  |                    |        |                  |  |      |         |      |  |   |        |   |  |   |         |  
|Pro forma net income (loss)                                                                                                                            |  | $                  | 13,901 |                  |  | $    | (11,955 | )    |  | $ | 14,503 |   |  | $ | (53,558 | )
|                                                                                                                                                       |  |                    |        |                  |  |      |         |      |  |   |        |   |  |   |         |  
|Basic net income (loss) per common share, as
    reported                                                                                              |  | $                  | 0.29   |                  |  | $    | (0.23   | )    |  | $ | 0.32   |   |  | $ | (1.04   | )
|Basic net income (loss) per common share, pro
    forma                                                                                                |  | $                  | 0.28   |                  |  | $    | (0.24   | )    |  | $ | 0.29   |   |  | $ | (1.07   | )
|Diluted net income (loss) per common share, as
    reported                                                                                            |  | $                  | 0.29   |                  |  | $    | (0.23   | )    |  | $ | 0.31   |   |  | $ | (1.04   | )
|Diluted net income (loss) per common share, pro
    forma                                                                                              |  | $                  | 0.28   |                  |  | $    | (0.24   | )    |  | $ | 0.29   |   |  | $ | (1.07   | )

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 six months ended
June 30, 2004 and 2003, respectively:

|                               |  |                    |             |                  |  |      |             |      |  |  |              |  |  |  |             | 
|------------------------------ |  | ------------------ | ----------- | ---------------- |  | ---- | ----------- | ---- |  |  | ------------ |  |  |  | ----------- | 
|                               |  |                    |             |                 
|                               |  | Three Months Ended |             | Six Months Ended
|                               |  | June 30,           |             | June 30,        
|                               |  |                    |             |                 
|                               |  | 2004               |             | 2003             |  | 2004 |             | 2003
|                               |  |                    |             |                  |  |      |             |     
|Volatility                     |  |                    | 24%         |                  |  |      | 30%         |      |  |  | 24%          |  |  |  | 30%         | 
|Risk-free interest rates       |  |                    | 2.0 - 3.2%  |                  |  |      | 1.5 - 3.3%  |      |  |  | 2.0 - 4.4%   |  |  |  | 1.5 - 3.3%  | 
|Weighted average expected life |  |                    | 3 - 6 years |                  |  |      | 2 - 6 years |      |  |  | 3 - 10 years |  |  |  | 2 - 6 years | 
|Dividend yields                |  |                    | 0%          |                  |  |      | 0%          |      |  |  | 0%           |  |  |  | 0%          | 

Note 2  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 to Pilot TV Acquisition Corporation.

The operating results of this station for the
three and six month periods ended June 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 second quarter of 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 loss on the
sale of KRBC-TV and KACB-TV of $652,000 recorded during the
second quarter of 2003.

6



---



##### Table of Contents



LIN TV CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|         |             
|-------- | ------------
|Note 3  | 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):

|                         |  |          |        |              |  |   |        | 
|------------------------ |  | -------- | ------ | ------------ |  | - | ------ | 
|                         |  | June 30, |        | December 31,
|                         |  | 2004     |        | 2003        
|                         |  |          |        |             
|Banks Broadcasting, Inc. |  | $        |       |              |  | $ | 11,297 | 
|NBC joint venture        |  |          | 55,621 |              |  |   | 55,758 | 
|WAND (TV) Partnership    |  |          | 10,216 |              |  |   | 10,250 | 
|                         |  |          |        |              |  |   |        | 
|                         |  | $        | 65,837 |              |  | $ | 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 has
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
EITF 02-5, 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
June 30, 2004.

7



---



##### 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:

|                                |                              |           |        |        | 
|------------------------------- | ---------------------------- | --------- | ------ | ------ | 
|                                |                              | March 31,
|                                |                              | 2004     
|                                |                              |          
|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 | 
|                                |                              |           |        |       
|                                |                              |           | (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.

Banks Broadcasting has authorized
390,625 shares of preferred stock and has issued
347,645 shares of Series A Preferred Stock with a par
value of $0.01 per share.

Key rights associated with the preferred stock
include: (i) holders of the preferred stock receive an 8%
dividend, if declared; (ii) holders of the preferred stock
have the right to convert to common stock in the event of a
Triggering Event (discussed below); (iii) holders of the
preferred stock have no votes; (iv) while no holder of the
preferred stock controls the board of directors, there are
certain rights to force the sale of Banks Broadcasting and
holders of the preferred stock would share pro rata in the sale
proceeds.

Upon liquidation, winding up, or dissolution,
holders of the preferred stock will receive the greater of
$100 per share, plus all accrued but unpaid dividends, or
the amount such holder would receive upon liquidation and
assuming conversion to common stock.

Triggering Events for conversion include:
(1) the sale of all or substantially all of the assets of
Banks Broadcasting, (2) the closing of an underwritten
public offering resulting in (i) net cash proceeds to Banks
Broadcasting of not less than $50.0 million and (ii) a
pre-money valuation of Banks Broadcasting of not less than two
and one-half times the aggregate purchase price for all shares
of the Preferred Stock; or (3) any merger or consolidation
or other reorganization of Banks Broadcasting with or into
another corporation in which Banks Broadcasting is not the
surviving entity.

8



---



##### Table of Contents



LIN TV CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

No dividends had been declared on the
Series A Preferred Stock as of June 30, 2004.

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
$1.6 million and $3.3 million from the joint venture
in the three and six months ended June 30, 2004,
respectively and $1.6 million and $3.3 million in the
three and six months ended June 30, 2003, respectively.

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

|                 |  |                    |        |                  |  |      |        |      |  |   |        |  |  |   |        | 
|---------------- |  | ------------------ | ------ | ---------------- |  | ---- | ------ | ---- |  | - | ------ |  |  | - | ------ | 
|                 |  |                    |        |                 
|                 |  | Three Months Ended |        | Six Months Ended
|                 |  | June 30,           |        | June 30,        
|                 |  |                    |        |                 
|                 |  | 2004               |        | 2003             |  | 2004 |        | 2003
|                 |  |                    |        |                  |  |      |        |     
|Net revenues     |  | $                  | 47,234 |                  |  | $    | 43,576 |      |  | $ | 82,443 |  |  | $ | 76,497 | 
|Operating income |  |                    | 29,225 |                  |  |      | 26,028 |      |  |   | 47,558 |  |  |   | 42,692 | 
|Net income       |  |                    | 12,832 |                  |  |      | 9,675  |      |  |   | 15,325 |  |  |   | 10,662 | 

|                        |  |          |         |              |  |   |         | 
|----------------------- |  | -------- | ------- | ------------ |  | - | ------- | 
|                        |  | June 30, |         | December 31,
|                        |  | 2004     |         | 2003        
|                        |  |          |         |             
|Current assets          |  | $        | 21,950  |              |  | $ | 9,949   | 
|Non-current assets      |  |          | 240,740 |              |  |   | 237,469 | 
|Current liabilities     |  |          | 16,672  |              |  |   | 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.
Amounts due to the Company from WAND (TV) Partnership under this
arrangement were approximately $71,000 as of June 30, 2004.
Amounts due from the Company to WAND (TV) Partnership under this
arrangement were $64,000 as of December 31, 2003. The
following presents the summarized financial information of the
WAND (TV) Partnership (in thousands):

|                        |  |                |       |                  |  |      |       |      |  |   |       |   |  |   |       |  
|----------------------- |  | -------------- | ----- | ---------------- |  | ---- | ----- | ---- |  | - | ----- | - |  | - | ----- | -
|                        |  |                |       |                 
|                        |  | Three Months   |       | Six Months Ended
|                        |  | Ended June 30, |       | June 30,        
|                        |  |                |       |                 
|                        |  | 2004           |       | 2003             |  | 2004 |       | 2003
|                        |  |                |       |                  |  |      |       |     
|Net revenues            |  | $              | 1,664 |                  |  | $    | 1,705 |      |  | $ | 3,297 |   |  | $ | 3,194 |  
|Operating (loss) income |  |                | (54   | )                |  |      | 56    |      |  |   | (104  | ) |  |   | (70   | )
|Net (loss) income       |  |                | (54   | )                |  |      | 47    |      |  |   | (103  | ) |  |   | (79   | )

|                    |  |          |        |              |  |   |        | 
|------------------- |  | -------- | ------ | ------------ |  | - | ------ | 
|                    |  | June 30, |        | December 31,
|                    |  | 2004     |        | 2003        
|                    |  |          |        |             
|Current assets      |  | $        | 2,467  |              |  | $ | 2,013  | 
|Non-current assets  |  |          | 24,674 |              |  |   | 25,168 | 
|Current liabilities |  |          | 470    |              |  |   | 405    | 

9



---



##### Table of Contents



LIN TV CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|         |                   
|-------- | ------------------
|Note 4  | Intangible Assets:

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

|                               |  |          |           |              |  |   |           |  
|------------------------------ |  | -------- | --------- | ------------ |  | - | --------- | -
|                               |  | June 30, |           | December 31,
|                               |  | 2004     |           | 2003        
|                               |  |          |           |             
|Amortized Intangible Assets:   |  |          |           |              |  |   |           |  
|LMA purchase options           |  | $        | 2,388     |              |  | $ | 2,388     |  
|Network affiliations           |  |          | 283       |              |  |   | 377       |  
|Income leases                  |  |          | 393       |              |  |   | 393       |  
|Other intangible assets        |  |          | 2,021     |              |  |   | 2,022     |  
|Accumulated amortization       |  |          | (2,428    | )            |  |   | (1,891    | )
|                               |  |          |           |              |  |   |           |  
|                               |  |          | 2,657     |              |  |   | 3,289     |  
|                               |  |          |           |              |  |   |           |  
|Unamortized Intangible Assets: |  |          |           |              |  |   |           |  
|Broadcast licenses             |  | $        | 1,119,521 |              |  | $ | 1,102,708 |  
|Goodwill                       |  |          | 583,091   |              |  |   | 586,269   |  
|                               |  |          |           |              |  |   |           |  
|                               |  |          | 1,702,612 |              |  |   | 1,688,977 |  
|                               |  |          |           |              |  |   |           |  
|Total intangible assets        |  | $        | 1,705,269 |              |  | $ | 1,692,266 |  
|                               |  |          |           |              |  |   |           |  

On January 14, 2004, the Company purchased
the broadcast license and certain assets of WIRS-TV in Yauco,
Puerto Rico from Marantha Christian Network. The total purchase
price of $4.5 million was funded by borrowings from our
revolving credit facility. A deposit on the purchase of WIRS-TV
of $226,000 was paid in the third quarter of 2003.

On May 6, 2004, the Company purchased the
broadcast license and certain assets of WTIN-TV in Ponce, Puerto
Rico from Laura Nicolau. The total purchase price of
$4.9 million was funded by borrowings from our revolving
credit facility.

The application of FIN 46 increased
broadcast licenses by $29.2 million for the consolidation
of the Banks Broadcasting licenses which occurred March 31,
2004. (see Note 4).

The sale of the broadcast license of WEYI-TV on
May 14, 2004 decreased broadcast licenses by
$18.8 million (see Note 2).

During the second quarter of 2004, the Company
recorded tax adjustments related to the Companys valuation
allowance on deferred tax assets that decreased broadcast
licenses by $3.1 million and decreased goodwill by
$3.2 million.

Amortization expense was $278,000 and $555,000
for the three and six months ended June 30, 2004,
respectively, and $276,000 and $551,000 for the same periods in
the prior year. This includes approximately $233,000 and
$467,000 of amortization expense recorded on the local marketing
agreement (LMA) purchase option for the three and
six months ended June 30, 2004, respectively, and $228,000
and $456,000 for the three and six months ended June 30,
2003, respectively. The Company expects that its remaining LMA
purchase option will be fully amortized in 2007. Also included
in the amortization expense is $45,000 and $89,000 of
amortization expense on network affiliation agreements and
income leases for the three and six months ended June 30,
2004, respectively, and $48,000 and $95,000 for the three and
six months ended June 30, 2003, respectively. The network
affiliation agreements will be fully amortized by their
expiration dates, which range from August 29, 2004 to
June 30, 2006, and the income leases will be fully
amortized by November 2006.

10



---



##### Table of Contents



LIN TV CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Note 5  Debt:

Debt consisted of the following (in thousands):

|                                                                                                                                                                                                             |  |          |         |              |  |   |         | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------- | ------- | ------------ |  | - | ------- | 
|                                                                                                                                                                                                             |  | June 30, |         | December 31,
|                                                                                                                                                                                                             |  | 2004     |         | 2003        
|                                                                                                                                                                                                             |  |          |         |             
|Senior Credit Facilities                                                                                                                                                                                     |  | $        | 198,000 |              |  | $ | 193,500 | 
|$166,440 and $205,000 at June 30, 2004 and
    December 31, 2003, respectively, 8% Senior Notes due 2008
    (net of discount of $3,353 and $4,706 at June 30, 2004 and
    December 31, 2003, respectively) |  |          | 163,087 |              |  |   | 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 $16,321 and $18,427 at
    June 30, 2004 and December 31, 2003, respectively)                                   |  |          | 108,679 |              |  |   | 106,573 | 
|                                                                                                                                                                                                             |  |          |         |              |  |   |         | 
|Total debt                                                                                                                                                                                                   |  |          | 669,766 |              |  |   | 700,367 | 
|Less current portion                                                                                                                                                                                         |  |          | 37,000  |              |  |   | 7,000   | 
|                                                                                                                                                                                                             |  |          |         |              |  |   |         | 
|Total long-term debt                                                                                                                                                                                         |  | $        | 632,766 |              |  | $ | 693,367 | 
|                                                                                                                                                                                                             |  |          |         |              |  |   |         | 

During the six months ended June 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 $1.5 million and $4.4 million during the
three and six month ended June 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 $30.0 million borrowed under
the revolving credit facility, which terminates March 31,
2005.



|         |                            
|-------- | ---------------------------
|Note 6  | 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 $11,000 for the three and six months
ended June 30, 2004, and $23,000 and $38,000 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 $4,000 and
$9,000 for the three and six months ended June 30, 2004,
respectively, for various reimbursable expenses, and $6,000 and
$21,000 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 $100,000 for the three
and the six months ended June 30, 2003, respectively under
the management services agreement.

11



---



##### Table of Contents



LIN TV CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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 $133,000 and $271,000 for the three
and the six months ended June 30, 2004, respectively, and
$121,000 and $244,000 for the same periods in the prior year.

The Company also incurred fees for
Spanish-to-English translation services provided by a company in
which the Company has an investment. Fees for these translation
services were approximately $46,000 for the three and six months
ended June 30, 2004



|         |               
|-------- | --------------
|Note 7  | 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, but is recourse to the joint venture,
the Companys equity interests therein and ultimately to
LIN TV Corp., pursuant to a guarantee. 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 8  | 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.

12



---



##### Table of Contents



LIN TV CORP.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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

|                                   |  |                    |        |                  |  |      |        |      |  |   |        |   |  |   |        |  
|---------------------------------- |  | ------------------ | ------ | ---------------- |  | ---- | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                   |  |                    |        |                 
|                                   |  | Three Months Ended |        | Six Months Ended
|                                   |  | June 30,           |        | June 30,        
|                                   |  |                    |        |                 
|                                   |  | 2004               |        | 2003             |  | 2004 |        | 2003
|                                   |  |                    |        |                  |  |      |        |     
|Service cost                       |  | $                  | 500    |                  |  | $    | 457    |      |  | $ | 1,000  |   |  | $ | 914    |  
|Interest cost                      |  |                    | 1,401  |                  |  |      | 1,311  |      |  |   | 2,802  |   |  |   | 2,622  |  
|Expected return on plan assets     |  |                    | (1,450 | )                |  |      | (1,408 | )    |  |   | (2,900 | ) |  |   | (2,816 | )
|Amortization of prior service cost |  |                    | 39     |                  |  |      | 41     |      |  |   | 78     |   |  |   | 82     |  
|Amortization of net loss           |  |                    | 80     |                  |  |      | 63     |      |  |   | 160    |   |  |   | 126    |  
|                                   |  |                    |        |                  |  |      |        |      |  |   |        |   |  |   |        |  
|Net periodic benefit cost          |  | $                  | 570    |                  |  | $    | 464    |      |  | $ | 1,140  |   |  | $ | 928    |  
|                                   |  |                    |        |                  |  |      |        |      |  |   |        |   |  |   |        |  

As of June 30, 2004, the Company has
contributed $600,000 to the plan, and expects to contribute a
total of $1.2 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 funded approximately $407,000 of
SERP payments during the second quarter of 2004 and does not
anticipate any additional material SERP payments for the
remainder of 2004.



|         |                    
|-------- | -------------------
|Note 9  | 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 three and six months ended June 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 1,819,000 shares and
1,148,000 shares for the three and six month periods ended
June 30, 2004, respectively, were excluded from the diluted
income (loss) per share calculation because the effect of their
inclusion would have been anti-dilutive. Options to
purchase 3,617,000 shares of common stock, and phantom
units exercisable into 621,000 shares of common stock, were
not included in the calculation of diluted income (loss) per
share for the three and six months ended June 30, 2003
because the effect of their inclusion would have been
anti-dilutive.



|          |              
|--------- | -------------
|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.

13



---



##### Table of Contents








|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|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

Our
Business

We are an owner and operator of television
stations in 14 mid-sized markets in the United States. We
currently operate 23 stations and are headquartered in
Providence, Rhode Island. Our operating revenues are derived
from local and national advertisers and, to a much lesser
extent, from the networks for the broadcast of their programming
and from other broadcast-related activities.

We receive revenues for advertising time placed
within and adjoining our locally originated programming and
within and adjoining our network and syndicated programming.
Advertising rates for a given station are set based upon a
variety of factors, including the size and demographic makeup of
the market served by the station, the number of advertisers
competing for the available time, the availability of alternative

14



---



##### Table of Contents



advertising media in the stations market
area, a stations overall ability to attract viewers in its
market area and the programs or stations ability to
attract viewers among particular demographic groups that an
advertiser may be targeting. Our advertising rates are also
affected by our sales efforts in the local and national arenas
and the development of projects, features and programs that tie
advertiser messages to programming. Approximately two-thirds of
our advertising time sales are generated within our local
markets compared to one-third of advertising time sales which
are made to national advertisers.


Our 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. In addition, advertising revenues are generally
higher during election years due to spending by political
candidates. Political revenue increased approximately
$3.1 million and $4.6 million during the three and six
months ended June 30, 2004, respectively, compared to the
prior year. As a result, the fluctuation in our operating
results is generally related to fluctuations in the revenue
cycle within a year or on a year-to-year basis.

The broadcast television industry is also
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
sensitive to general economic conditions and regional conditions
in each of the local market areas in which our stations operate.

We are also dependent to a significant degree on
automotive-related advertising. Approximately 25% and 24% of our
total net revenues for the six months ended June 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. For a
discussion of other factors that may affect our business, see
Risk Factors.

Competition

One of the biggest challenges facing our industry
today is the increase in competition for household audiences and
advertisers. Advances in technology have offered audiences more
choices for entertainment and information including cable TV,
satellite, video on demand, videocassette recorders, personal
video recorders, video games, Internet and DVDs. Advertisers are
also presented with a variety of media in which to promote
themselves and we compete for advertising dollars not only with
local television stations in our market, but with other media
including newspapers, radio, cable, outdoor and the Internet.
For national sales, we compete with television broadcast
networks and cable networks and print media.

We believe that our investment in digital
television (DTV) is one way that may assist us in
effectively competing with other media sources. Since DTV has
the capacity for multiple channels, it would allow us to
broadcast a combination of different channels with varying
degrees of visual and sound quality, which would be of higher
quality than present-day television. We could also provide
interactive data services on these same channels. During the
first six months of 2004 we have spent approximately
$3.9 million in capital expenditures to complete our
transition to digital and expect to incur another
$3.0 million during the remainder of 2004. While
implementation of DTV will improve the technical quality of our
over-the-air broadcast television, it is possible that the
conversion may reduce a stations geographical coverage
area. We cannot predict the precise effect that converting to
DTV will have on our business.



| |                
| | ---------------
| | Industry Trends

Two significant industry-wide factors influenced
our performance during 2003. Although historical market trends
would have dictated a slight increase in revenue for 2003,
despite the loss of substantial political revenue in 2002, the
US advertising market experienced a significant slowdown
during 2003 as evidenced by a 2.3% decrease in market time sales
for television as reported by the Television Bureau of
Advertising (TVB). This was primarily the result of
the war in Iraq, which began in the first quarter of 2003.
During the second quarter and first six months of 2004, our
national time sales increased 2% and 3%, respectively, over the
same periods in the prior year. Local time sales increased 8%
and 9% for the second quarter and first six months of 2004,
respectively, over the same periods in the prior year. This
revenue

15



---



##### Table of Contents



growth is a result of the continued recovery in
the advertising market following the conclusion of major
hostilities in Iraq, as well as a general improvement in
economic conditions.


Political revenue is a second 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
$3.1 million and $4.6 million increase in political
revenue during the three and six months ended June 30,
2004, respectively.

Significant Other Items

During the first six months of 2004, we drew down
funds from our 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. We incurred charges of
$1.5 million during the second quarter of 2004 and
$4.4 million for the year-to-date period related to the
write-off of unamortized discounts and associated costs as a
result of the early extinguishment of debt.

On May 14, 2004, we completed the sale of
WEYI-TV, the NBC affiliate serving Flint, Michigan, to Pilot TV
Acquisition Corporation, for $24.0 million. We have
recognized a loss of $1.3 million on the sale, net of a tax
benefit of $1.1 million. This loss and the operating
results of this station are excluded from continuing operations
and included in discontinued operations for all periods
presented.

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. In accordance with
FIN 46, Banks Broadcasting is considered to be a variable
interest entity. For purposes of determining the primary
beneficiary of Banks Broadcasting, we considered Hicks Muse
Partners 47% ownership in us 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 we and 21st Century
Group, LLC are related parties. Considering our fifty percent
ownership interest in Banks Broadcasting and our management
agreement with Banks Broadcasting, we identified ourself as the
primary beneficiary of Banks Broadcasting under FIN 46. As
the primary beneficiary of Banks Broadcasting, we have
consolidated Banks Broadcastings assets, liabilities and
noncontrolling interests into our financial statements effective
March 31, 2004. Since Banks Broadcasting and us are not
under common control, as defined by EITF 02-5, 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.
Our resulting consolidated balance sheet does not reflect any
voting equity minority interest since Banks Broadcasting has
cumulative losses and as such the minority interest would be in
a deficit position at June 30, 2004.

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,
collectibility of receivables, barter transactions and net
assets of businesses acquired. These estimates have a material
impact on our financial

16



---



##### Table of Contents



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.

17



---



##### Table of Contents



The following table lists the stations that we
either operate or in which we have an equity investment:

|                                        |  |          |     |         |  |             |          |         |  |        |            |  |  |  |         |  |  |  |     | 
|--------------------------------------- |  | -------- | --- | ------- |  | ----------- | -------- | ------- |  | ------ | ---------- |  |  |  | ------- |  |  |  | --- | 
|                                        |  | DMA Rank |     |         |  |             |          |         |  | Status
|Market                                  |  | (1)      |     | Station |  | Affiliation |          | Channel |  | (2)   
|                                        |  |          |     |         |  |             |          |         |  |       
|Owned and operated:                     |  |          |     |         |  |             |          |         |  |        |            |  |  |  |         |  |  |  |     | 
|Indianapolis, IN                        |  |          | 25  |         |  |             | WISH-TV  |         |  |        | CBS        |  |  |  | 8       |  |  |  | O&O | 
|                                        |  |          |     |         |  |             | WIIH-CA  |         |  |        | Univision  |  |  |  | 17      |  |  |  | O&O | 
|Hartford-New Haven, CT                  |  |          | 27  |         |  |             | WTNH-TV  |         |  |        | ABC        |  |  |  | 8       |  |  |  | O&O | 
|                                        |  |          |     |         |  |             | WCTX-TV  |         |  |        | UPN        |  |  |  | 59      |  |  |  | O&O | 
|Grand Rapids-Kalamazoo-Battle Creek, MI |  |          | 38  |         |  |             | WOOD-TV  |         |  |        | NBC        |  |  |  | 8       |  |  |  | O&O | 
|                                        |  |          |     |         |  |             | WOTV-TV  |         |  |        | ABC        |  |  |  | 41      |  |  |  | O&O | 
|                                        |  |          |     |         |  |             | WXSP-CA  |         |  |        | UPN        |  |  |  | Various |  |  |  | O&O | 
|Norfolk-Portsmouth-Newport News, VA     |  |          | 41  |         |  |             | WAVY-TV  |         |  |        | NBC        |  |  |  | 10      |  |  |  | O&O | 
|                                        |  |          |     |         |  |             | WVBT-TV  |         |  |        | FOX        |  |  |  | 43      |  |  |  | O&O | 
|Buffalo, NY                             |  |          | 44  |         |  |             | WIVB-TV  |         |  |        | CBS        |  |  |  | 4       |  |  |  | O&O | 
|                                        |  |          |     |         |  |             | WNLO-TV  |         |  |        | UPN        |  |  |  | 23      |  |  |  | O&O | 
|Providence, RI-New Bedford, MA          |  |          | 48  |         |  |             | WPRI-TV  |         |  |        | CBS        |  |  |  | 12      |  |  |  | O&O | 
|                                        |  |          |     |         |  |             | WNAC-TV  |         |  |        | FOX        |  |  |  | 64      |  |  |  | LMA | 
|Austin, TX                              |  |          | 54  |         |  |             | KXAN- TV | (3)     |  |        | NBC        |  |  |  | 36      |  |  |  | O&O | 
|                                        |  |          |     |         |  |             | KNVA-TV  |         |  |        | WB         |  |  |  | 54      |  |  |  | LMA | 
|                                        |  |          |     |         |  |             | KBVO-CA  |         |  |        | Telefutura |  |  |  | Various |  |  |  | O&O | 
|Dayton, OH                              |  |          | 59  |         |  |             | WDTN-TV  |         |  |        | ABC        |  |  |  | 2       |  |  |  | O&O | 
|Toledo, OH                              |  |          | 69  |         |  |             | WUPW-TV  |         |  |        | FOX        |  |  |  | 36      |  |  |  | O&O | 
|Fort Wayne, IN                          |  |          | 105 |         |  |             | WANE-TV  |         |  |        | CBS        |  |  |  | 15      |  |  |  | O&O | 
|Springfield-Holyoke, MA                 |  |          | 106 |         |  |             | WWLP-TV  |         |  |        | NBC        |  |  |  | 22      |  |  |  | O&O | 
|Lafayette, IN                           |  |          | 189 |         |  |             | WLFI-TV  |         |  |        | CBS        |  |  |  | 18      |  |  |  | O&O | 
|San Juan, PR                            |  |          |    |         |  |             | WAPA- TV | (3)     |  |        | IND        |  |  |  | 4       |  |  |  | O&O | 
|                                        |  |          |     |         |  |             | WJPX- TV | (3)     |  |        | IND        |  |  |  | 24      |  |  |  | O&O | 
|                                       
|Operated by WAND (TV) Partnership       |  |          |     |         |  |             |          |         |  |        |            |  |  |  |         |  |  |  |     | 
|Champaign-Springfield-Decatur, IL       |  |          | 82  |         |  |             | WAND-TV  |         |  |        | ABC        |  |  |  | 17      |  |  |  | JV  | 
|                                       
|Operated by Banks Broadcasting, Inc.    |  |          |     |         |  |             |          |         |  |        |            |  |  |  |         |  |  |  |     | 
|Wichita, KS                             |  |          | 67  |         |  |             | KWCV-TV  |         |  |        | WB         |  |  |  | 33      |  |  |  | JV  | 
|Boise, ID                               |  |          | 123 |         |  |             | KNIN-TV  |         |  |        | UPN        |  |  |  | 9       |  |  |  | JV  | 
|                                       
|Operated Under NBC Joint Venture        |  |          |     |         |  |             |          |         |  |        |            |  |  |  |         |  |  |  |     | 
|Dallas-Forth Worth, TX                  |  |          | 7   |         |  |             | KXAS-TV  |         |  |        | NBC        |  |  |  | 5       |  |  |  | JV  | 
|San Diego, CA                           |  |          | 26  |         |  |             | KNSD-TV  |         |  |        | NBC        |  |  |  | 39      |  |  |  | JV  | 



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | DMA rank estimates are taken from Nielsen Media
    Research Local Universe Estimates for the 2003-2004 Broadcast
    Season, September 22, 2003. The DMA rank lists the top DMA
    with #1 representing the largest DMA market in terms of
    television households.                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|(2) | O&O indicates stations we own and
    operate. LMA indicates stations to which we provide
    services under a local marketing agreement. An LMA is a
    programming agreement between two separately owned television
    stations serving a common television market. Under an LMA
    agreement, the licensee of one station provides substantial
    portions of the broadcast programming for airing on the other
    licensees station, subject to ultimate programming and
    other controls being exercised by the second licensee, and sells
    advertising time. JV indicates a station owned and
    operated by a joint venture in which we are a party.
|   
|(3) | KXAN-TV includes a satellite station KXAM-TV.
    WAPA-TV includes two satellite stations, WTIN-TV and WNJX-TV.
    WJPX-TV includes three satellite stations, WIRS-TV, WJWN-TV and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

18



---



##### Table of Contents



| |                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------
| | WKPV-TV. Satellite stations broadcast identical
    programming to the primary station. We own and operate all of
    these satellite stations.

We have a 33.3% interest in WAND (TV) Partnership
with Block Communications, which owns and operates WAND-TV, an
ABC affiliate in Decatur, Illinois. On April 1, 2000, we
exchanged, with Block Communications, Inc., a 66.7% interest
held by us in certain assets of WAND-TV, including its FCC
license and network affiliation agreement, for substantially all
of the assets and certain liabilities of WLFI-TV, Inc.
Immediately after the WAND-TV exchange, we and Block
Communications contributed our respective interests in the
WAND-TV assets to a partnership, whereby we received a 33.3%
interest in the partnership and Block Communications received a
66.7% interest. We provide ongoing management oversight to the
partnership, including engineering and cash management services,
pursuant to a management services agreement with the
partnership. During the three and six months ended June 30,
2004, the partnership generated $1.7 million and
$3.3 million of revenue and did not distribute any cash to
us. During the year ended December 31, 2003, the
partnership generated $6.4 million of revenue and did not
distribute any cash to us. The partnership has no outstanding
significant debt obligations and the partners have not provided
a guarantee to the partnership.

We also hold a 50% non-voting equity interest in
Banks Broadcasting, which owns and operates KWCV-TV, a WB
affiliate in Wichita, Kansas, and KNIN-TV, a UPN affiliate in
Boise, Idaho. On August 15, 2000, we, 21st Century
Group, L.L.C., an entity in which Hicks Muse has a substantial
indirect economic interest, and BancAmerica Capital Investors
SBICI, L.P. formed Banks Broadcasting. We contributed our
interest in KWCV-TV, and we and 21st Century
Group, L.L.C., both contributed our respective interests in
KNIN-TV, to Banks Broadcasting. We provide cash management,
accounting and engineering support services to Banks
Broadcasting in exchange for a fixed annual fee pursuant to a
management services agreement with Banks Broadcasting. In
addition, we provide 50% of the capital contributions that are
required to fund capital expenditures for property, plant and
equipment and for any working capital shortfalls that are
incurred by Banks Broadcasting. Banks Broadcasting became a
consolidated entity as of March 31, 2004, in accordance
with FIN 46. During the six months ended June 30,
2004, we have funded $650,000 to Banks Broadcasting. During the
three and six months ended June 30, 2004, Banks
Broadcasting, Inc. generated $1.3 million and
$2.5 million of revenue and did not distribute any cash to
us. During the year ended December 31, 2003, Banks
Broadcasting generated $5.2 million of revenue and did not
distribute any cash to us.

We also have an approximate 20% equity interest
in a television station joint venture with NBC, which owns all
of the remaining interest. The joint venture, which we entered
into with NBC on March 3, 1998, consists of television
stations KXAS-TV, formerly our Dallas, Texas NBC affiliate, and
KNSD-TV, formerly NBCs San Diego NBC affiliate. A
wholly owned subsidiary of NBC is the general partner of the
joint venture and NBC operates the stations owned by the joint
venture pursuant to a management agreement and has managerial
control over the joint venture. GECC provided debt financing for
the joint venture 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. We expect that the interest
payments on the GECC Note will be serviced solely by the cash
flow of the joint venture. All cash of the joint venture
available for distribution will be distributed to us and the NBC
general partner based on our respective equity interests in the
joint venture. During the three and six months ended
June 30, 2004, the joint venture generated
$47.2 million and $82.4 million of revenue and
distributed $1.6 million and $3.3 million,
respectively, of cash to us. During the year ended
December 31, 2003, the joint venture generated
$158.2 million of revenue and distributed $7.5 million
of cash to us.

We own and operate 27 additional low-power
television stations, of which 21 received class A status.
In Grand Rapids, Michigan, Austin, Texas and Indianapolis,
Indiana we have been able to program multiple low power stations
in a network covering the majority of the applicable
market and functioning like a full-power station. Our low power
stations in these three markets are affiliated with UPN,
Univisions Telefutura Network and the Univision network,
respectively. The remaining 11 low-power stations are used
primarily to extend the coverage of the primary stations.

19



---



##### Table of Contents



In addition, we provide services under a joint
sales agreement to two stations, WZPX-TV in Grand Rapids,
Michigan and WPXV-TV in Norfolk, Virginia that are owned by
Paxson Communications Corporation. Under these agreements we
provide office space, sales personnel, some technical master
control services and limited programming, including the ability
to repeat some of our local newscasts, in exchange for
reimbursement of some costs and a share of the advertising
sales. These agreements give our sales force the ability to sell
additional advertising inventory with a different demographic
profile and allow us to extend our brand through the broadcast
of our local programming on additional stations.

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 to
    Pilot TV Acquisition Corporation.  
| 
| | On May 6, 2004, we acquired the broadcast
    license and certain assets of WTIN-TV in Ponce, Puerto Rico from
    Laura Nicolau 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 from Marantha Christian Network Corporation for a total
    purchase price of $4.5 million.

Results of Operations

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

|                                                 |                                                                                                                                                                                                                                                               |                    |         |        |  |                  |         |        |  |      |     |        |    |   |         |         |  |   |         |         |  |  |     |      |   
|------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------ | ------- | ------ |  | ---------------- | ------- | ------ |  | ---- | --- | ------ | -- | - | ------- | ------- |  | - | ------- | ------- |  |  | --- | ---- | --
|                                                 |                                                                                                                                                                                                                                                               |                    |         |        |  |                  |         |       
|                                                 |                                                                                                                                                                                                                                                               | Three Months Ended |         |        |  | Six Months Ended |         |       
|                                                 |                                                                                                                                                                                                                                                               | June 30,           |         |        |  | June 30,         |         |       
|                                                 |                                                                                                                                                                                                                                                               |                    |         | %      |  |                  |         | %     
|                                                 |                                                                                                                                                                                                                                                               | 2004               |         | 2003   |  | Change           |         | 2004   |  | 2003 |     | Change
|                                                 |                                                                                                                                                                                                                                                               |                    |         |        |  |                  |         |        |  |      |     |       
|National time sales (before agency commissions)  |                                                                                                                                                                                                                                                               | $                  | 34,266  |        |  | $                | 33,670  |        |  |      | 2   | %      |    | $ | 62,237  |         |  | $ | 60,531  |         |  |  | 3   | %   
|Local time sales (before agency commissions)     |                                                                                                                                                                                                                                                               |                    | 69,079  |        |  |                  | 63,964  |        |  |      | 8   | %      |    |   | 126,539 |         |  |   | 116,435 |         |  |  | 9   | %   
|Political time sales (before agency commissions) |                                                                                                                                                                                                                                                               |                    | 3,768   |        |  |                  | 630     |        |  |      | 498 | %      |    |   | 5,622   |         |  |   | 1,001   |         |  |  | 462 | %   
|Agency commissions (related to time sales)       |                                                                                                                                                                                                                                                               |                    | (17,636 | )      |  |                  | (16,137 | )      |  |      | 9   | %      |    |   | (31,737 | )       |  |   | (28,986 | )       |  |  | 9   | %   
|Network compensation                             |                                                                                                                                                                                                                                                               |                    | 2,402   |        |  |                  | 2,740   |        |  |      | (12 | )%     |    |   | 5,131   |         |  |   | 5,478   |         |  |  | (6  | )%  
|Barter revenue                                   |                                                                                                                                                                                                                                                               |                    | 2,629   |        |  |                  | 2,835   |        |  |      | (7  | )%     |    |   | 4,937   |         |  |   | 5,361   |         |  |  | (8  | )%  
|Other revenue                                    |                                                                                                                                                                                                                                                               |                    | 1,830   |        |  |                  | 1,502   |        |  |      | 22  | %      |    |   | 3,453   |         |  |   | 3,011   |         |  |  | 15  | %   
|                                                 |                                                                                                                                                                                                                                                               |                    |         |        |  |                  |         |        |  |      |     |        |    |   |         |         |  |   |         |         |  |  |     |     
|                                                 | Net revenues                                                                                                                                                                                                                                                  |                    |         | 96,338 |  |                  |         | 89,204 |  |      |     | 8      | %  |   |         | 176,182 |  |   |         | 162,831 |  |  |     | 8    | % 
|                                                 |                                                                                                                                                                                                                                                               |                    |         |        |  |                  |         |        |  |      |     |        |    |   |         |         |  |   |         |         |  |  |     |     
|Operating costs and expenses:                    |                                                                                                                                                                                                                                                               |                    |         |        |  |                  |         |        |  |      |     |        |    |   |         |         |  |   |         |         |  |  |     |     
|                                                 | Direct operating (excluding $7.8 million and
    $7.6 million of depreciation for the three months ended
    June 30, 2004 and 2003, respectively, and
    $15.3 million and $15.4 million for the six months
    ended June 30, 2004 and 2003, respectively) |                    |         | 25,390 |  |                  |         | 24,746 |  |      |     | 3      | %  |   |         | 50,020  |  |   |         | 48,963  |  |  |     | 2    | % 
|                                                 | Selling, general and administrative                                                                                                                                                                                                                           |                    |         | 24,488 |  |                  |         | 22,478 |  |      |     | 9      | %  |   |         | 46,988  |  |   |         | 43,231  |  |  |     | 9    | % 
|                                                 | Amortization of program rights                                                                                                                                                                                                                                |                    |         | 5,911  |  |                  |         | 5,296  |  |      |     | 12     | %  |   |         | 11,635  |  |   |         | 10,496  |  |  |     | 11   | % 
|                                                 | Corporate                                                                                                                                                                                                                                                     |                    |         | 3,930  |  |                  |         | 4,182  |  |      |     | (6     | )% |   |         | 8,028   |  |   |         | 8,102   |  |  |     | (1   | )%
|                                                 | Restructuring charge                                                                                                                                                                                                                                          |                    |         |       |  |                  |         | 102    |  |      |     | (100   | )% |   |         |         |  |   |         | 102     |  |  |     | (100 | )%
|                                                 | Depreciation and amortization of intangible assets                                                                                                                                                                                                            |                    |         | 8,041  |  |                  |         | 7,919  |  |      |     | 2      | %  |   |         | 15,817  |  |   |         | 15,907  |  |  |     | (1   | )%
|                                                 |                                                                                                                                                                                                                                                               |                    |         |        |  |                  |         |        |  |      |     |        |    |   |         |         |  |   |         |         |  |  |     |     
|Total operating costs and expenses               |                                                                                                                                                                                                                                                               |                    | 67,760  |        |  |                  | 64,723  |        |  |      | 5   | %      |    |   | 132,488 |         |  |   | 126,801 |         |  |  | 4   | %   
|                                                 |                                                                                                                                                                                                                                                               |                    |         |        |  |                  |         |        |  |      |     |        |    |   |         |         |  |   |         |         |  |  |     |     
|Operating income                                 |                                                                                                                                                                                                                                                               | $                  | 28,578  |        |  | $                | 24,481  |        |  |      | 17  | %      |    | $ | 43,694  |         |  | $ | 36,030  |         |  |  | 21  | %   
|                                                 |                                                                                                                                                                                                                                                               |                    |         |        |  |                  |         |        |  |      |     |        |    |   |         |         |  |   |         |         |  |  |     |     

Net revenuesconsist
primarily of national and local airtime sales, net of sales
adjustments and agency commissions. Additional, but less
significant, amounts are generated from network compensation,
internet

20



---



##### Table of Contents



revenues, barter revenues, production revenues,
tower rental income and carriage or retransmission agreements.


Net revenues increased $7.1 million or 8%
and $13.4 million or 8% for the three and six months ended
June 30, 2004, respectively, compared to the same periods
in the prior year. The increase in local time sales is the
primary factor in the growth of net revenue during 2004
increasing $5.1 million and $10.1 million for the
three and six months ended June 30, 2004, respectively.
Results in the second quarter of 2003 reflect the slowdown in
the advertising market in that period as a result of the
outbreak of the war in Iraq. The increase during the second
quarter of 2004 is the result of the continued recovery being
experienced in the advertising market that began at the end of
2003.

Since 2004 is a presidential election year, a
larger percentage of our net revenue for the second quarter and
first half of 2004 was derived from political revenue when
compared to the same period in 2003. Political time sales
increased $3.1 million and $4.6 million for the three
and six months ended June 30, 2004, respectively. We expect
this trend to continue in the third quarter of 2004.

Net revenue attributable to Banks Broadcasting,
which was consolidated in accordance with FIN 46 effective
March 31, 2004, was $1.3 million for the three and six
months ended June 30, 2004.



| |                             
| | ----------------------------
| | 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
expenses, which consists primarily of
employee salaries, sales commissions and other employee benefit
costs, advertising and promotional expenses, for the three and
six months ended June 30, 2004 increased $2.0 million
to $24.5 million and $3.8 million to
$47.0 million, respectively, compared to the same periods
in the prior year. The increase is primarily due to increased
expenses of $743,000 for the three and six months ended
June 30, 2004 attributable to the consolidation of Banks
Broadcasting. The remaining increase is a combination of an
increase in local salespersons commissions corresponding to the
increase in local time sales of $235,000 and $574,000 and a
combined general cost increase in health insurance, salary and
related payroll taxes and retirement fund expense of $733,000
and $1.5 million for the three and six months ended
June 30, 2004, respectively.

Amortization of program
rightsrepresents costs associated
with the acquisition of syndicated programming, features and
specials. Program rights are amortized over the estimated
broadcast period of the underlying programs. If the projected
future net revenues from the broadcast is less than the current
carrying value of the program rights we would be required to
write-down the program rights to equal the amount of projected
future net revenues. Amortization of program rights increased
$615,000 or 12% and $1.1 million or 11% for the three and
six months ended June 30, 2004, respectively, compared to
the same periods in the prior year. Amortization of $217,000 for
the three and six months ended June 30, 2004 is
attributable to the consolidation of Banks Broadcasting. The
remaining increase is primarily due to additional amortization
resulting from writing down $410,000 of certain program rights
to equal the amount of projected future net revenue.

Corporate expenses,
related to costs associated with the centralized management of
our stations, decreased $252,000 or 6% for the three months
ended June 30, 2004 compared to the same period in the
prior year and remained relatively flat for the six months ended
June 30, 2004 compared to the first six months of 2003 .
The decrease in 2004 is primarily due to decreased due diligence
and legal expenses of $507,000 and $1.2 million for the
three and six months ended June 30, 2004, respectively,
related to potential acquisitions in 2003. This decrease is
offset by an increase in pension expense of $239,000 and
$480,000 for the three and six month periods ended June 30,
2004, respectively, due to market conditions affecting our
retirement funds, an increase of $189,000 attributable to the
consolidation of Banks Broadcasting for both the quarter and
year-to-date period ended June 30, 2004 and an increase in
bonuses of $232,000 for the six months ended June 30, 2004.

21



---



##### Table of Contents





| |                       
| | ----------------------
| | Other (Income) Expense



| |                 
| | ----------------
| | Interest Expense

The following table summarizes our total interest
expense:

|                               |                                                                 |                        |   |                  |        |      |   |       |        |  |   |       |        |  |   |        |        | 
|------------------------------ | --------------------------------------------------------------- | ---------------------- | - | ---------------- | ------ | ---- | - | ----- | ------ |  | - | ----- | ------ |  | - | ------ | ------ | 
|                               |                                                                 |                        |   |                 
|                               |                                                                 | Three Months Ended     |   | Six Months Ended
|                               |                                                                 | June 30,               |   | June 30,        
|                               |                                                                 |                        |   |                 
|                               |                                                                 | 2004                   |   | 2003             |        | 2004 |   | 2003 
|                               |                                                                 |                        |   |                  |        |      |   |      
|Components of interest expense |                                                                 |                        |   |                  |        |      |   |       |        |  |   |       |        |  |   |       
|                               | Senior Credit Facility                                          |                        | $ | 2,308            |        |      | $ | 2,054 |        |  | $ | 4,665 |        |  | $ | 3,944  |       
|                               | $300,000, 8 3/8% Senior Subordinated Notes                      |                        |   |                 |        |      |   | 5,650 |        |  |   |      |        |  |   | 12,515 |       
|                               | $200,000, 6 1/2% Senior Subordinated Notes                      |                        |   | 3,416            |        |      |   | 1,873 |        |  |   | 6,790 |        |  |   | 1,873  |       
|                               | $125,000, 2.50% Exchangeable Senior Subordinated
    Debentures |                        |   | 1,912            |        |      |   | 980   |        |  |   | 3,781 |        |  |   | 980    |       
|                               | $166,440, 8% Senior Notes                                       |                        |   | 4,317            |        |      |   | 4,676 |        |  |   | 8,456 |        |  |   | 9,350  |       
|                               | $276,000, 10% Senior Discount Notes                             |                        |   |                 |        |      |   |      |        |  |   |      |        |  |   | 4,973  |       
|                               | $100,000, 10% Senior Discount Notes                             |                        |   |                 |        |      |   |      |        |  |   |      |        |  |   | 2,119  |       
|                               | Other                                                           |                        |   | 4                |        |      |   |      |        |  |   | 4     |        |  |   |       |       
|                               |                                                                 |                        |   |                  |        |      |   |       |        |  |   |       |        |  |   |       
|                               |                                                                 | Total interest expense |   | $                | 11,957 |      |   | $     | 15,233 |  |   | $     | 23,696 |  |   | $      | 35,754 | 
|                               |                                                                 |                        |   |                  |        |      |   |       |        |  |   |       |        |  |   |       

Interest expensedecreased $3.3 million or 22% and $12.1 million or 34%
for the three and six months ended June 30, 2004,
respectively, compared to the same periods in the prior year.
The decrease is due to the early repayment of
LIN Televisions 8 3/8% Senior Subordinated
Notes and the remaining outstanding $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. This decrease
was partially offset by interest obligations resulting from the
issuance in May 2003 of the 6 1/2% Senior Subordinated
Notes due 2013 and the 2.50% Exchangeable Senior Subordinated
Debentures due 2033.

Investment income,
consisting of investment income earned on cash balances
decreased $285,000 or 77% and $580,000 or 77% for the three and
six months ended June 30, 2004 compared to income of
$370,000 and $750,000 for the same periods in the prior year.
The decrease is a result of the elimination of significant cash
balances from the same period in the prior year.

Share of income in equity investmentsincreased $908,000 and
$1.4 million for the three and six months ended
June 30, 2004 respectively, compared to income of
$1.7 million and $1.4 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 combined with the decrease in the loss
attributable to Banks Broadcasting which is 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 $3.6 million and
$4.6 million for the three and six months ended
June 30, 2004, respectively, and was due to fluctuations in
market interest rates, compared to gains of $4.8 million
for both the quarter and year-to-date periods in the prior year.

We recorded a loss of $1.5 million and
$4.4 million for the three and six months ended
June 30, 2004, respectively, 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 the 8% Senior Notes due 2008. We recorded a loss of
$23.6 million and $53.1 million for the three and six
months ended June 30, 2003, respectively, 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.

22



---



##### Table of Contents





| |                           
| | --------------------------
| | Provision for Income Taxes

LIN TV Corps provision for income
taxes for the three-month period ended June 30, 2004
increased to $5.4 million compared to a provision of
$2.4 million for the same period in the prior year. The
provision for income taxes for the six-month period ended
June 30, 2004 increased to $9.2 million compared to a
provision of $4.9 million for the same period in the prior
year. The provision for income taxes is primarily created by an
increase in the valuation allowance against the increase in the
Companys net deferred tax position during the three-month
and six-month periods ended June 30, 2004.

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, the Company 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 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. LIN TV Corp. uses a discrete
provision in order to more accurately calculate their provision
for income taxes.

Liquidity and Capital Resources

Our principal sources of funds for working
capital have historically been cash from operations and
borrowings under our senior credit facilities. At June 30,
2004, we had cash of $15.5 million and a
$191.9 million committed revolving credit facility of which
$30.0 million is outstanding at June 30, 2004, leaving
$161.9 million committed, but undrawn. We have the ability
to increase the revolving credit commitments up to
$235.0 million.

Contractual Obligations

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

|                                                            |  |               |        |           |  |           |         |            |  |       |         |  |  |   |         |  |  |   |           | 
|----------------------------------------------------------- |  | ------------- | ------ | --------- |  | --------- | ------- | ---------- |  | ----- | ------- |  |  | - | ------- |  |  | - | --------- | 
|                                                            |  | July through  |        |           |  |           |         |            |  |      
|                                                            |  | December 2004 |        | 2005-2007 |  | 2008-2009 |         | Thereafter |  | Total
|                                                            |  |               |        |           |  |           |         |            |  |      
|Principal payments and mandatory redemptions on
    debt(1) |  | $             | 3,500  |           |  | $         | 194,500 |            |  | $     | 166,440 |  |  | $ | 325,000 |  |  | $ | 689,440   | 
|Cash interest on debt(2)                                    |  |               | 18,105 |           |  |           | 99,983  |            |  |       | 33,249  |  |  |   | 117,044 |  |  |   | 268,381   | 
|Program payments(3)                                         |  |               | 11,765 |           |  |           | 43,215  |            |  |       | 4,993   |  |  |   | 1,278   |  |  |   | 61,251    | 
|Operating leases(4)                                         |  |               | 460    |           |  |           | 2,055   |            |  |       | 704     |  |  |   | 311     |  |  |   | 3,530     | 
|Local marketing agreement payments(5)                       |  |               | 1,012  |           |  |           | 2,204   |            |  |       |        |  |  |   |        |  |  |   | 3,216     | 
|                                                            |  |               |        |           |  |           |         |            |  |       |         |  |  |   |         |  |  |   |           | 
|Total                                                       |  | $             | 34,842 |           |  | $         | 341,957 |            |  | $     | 205,386 |  |  | $ | 443,633 |  |  | $ | 1,025,818 | 
|                                                            |  |               |        |           |  |           |         |            |  |       |         |  |  |   |         |  |  |   |           | 



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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             

23



---



##### Table of Contents



|    |                                                                                                                                                                                                                                                                                                                              
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | 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 $25.2 million of program obligations as of
    June 30, 2004 and have unrecorded commitments of
    $36.1 million for programming that is not available to air
    as of June 30, 2004.         
|   
|(4) | We lease land, buildings, vehicles and equipment
    under non-cancelable operating lease agreements.                                                                                                                                                                                                                        
|   
|(5) | We have entered into options agreements that
    would enable us to purchase KNVA-TV and WNAC-TV for a fixed
    amount under certain conditions. In connection with WNAC-TV and
    KNVA-TV, we are committed to pay minimum future periodic fees
    totaling $3.2 million as of June 30, 2004.                            

Net cash provided by operating
activitiesincreased
$23.0 million to $34.6 million for the six months
ended June 30, 2004 compared to $11.6 million in the
same period in the prior year. The increase is the result of an
increase in our net income for the six months ended
June 30, 2004 compared to the same period in the prior year
primarily due to lower interest expense in 2004 combined with
better working capital management.

Net cash provided by investing
activitieswas $7.4 million for
the six months ended June 30, 2004 compared to of
$26.8 million in the same periods 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
$124.7 million to $36.0 million for the six months
ended June 30, 2004 compared to $160.6 million for the
same periods 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, the
$75 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, will be sufficient to meet our anticipated
requirements for working capital, capital expenditures, interest
payments and scheduled principal payments for the next
12 months and for the foreseeable future.

Description of Indebtedness

The following is a summary of our outstanding
indebtedness (in thousands):

|                                                                                                                                                                                                             |  |          |         |              |  |   |         | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------- | ------- | ------------ |  | - | ------- | 
|                                                                                                                                                                                                             |  | June 30, |         | December 31,
|                                                                                                                                                                                                             |  | 2004     |         | 2003        
|                                                                                                                                                                                                             |  |          |         |             
|Senior Credit Facilities                                                                                                                                                                                     |  | $        | 198,000 |              |  | $ | 193,500 | 
|$166,440 and $205,000 at June 30, 2004 and
    December 31, 2003, respectively, 8% Senior Notes due 2008
    (net of discount of $3,353 and $4,706 at June 30, 2004 and
    December 31, 2003, respectively) |  |          | 163,087 |              |  |   | 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 $16,321 and $18,427 at
    June 30, 2004 and December 31, 2003, respectively)                                   |  |          | 108,679 |              |  |   | 106,573 | 
|                                                                                                                                                                                                             |  |          |         |              |  |   |         | 
|Total debt                                                                                                                                                                                                   |  |          | 669,766 |              |  |   | 700,367 | 
|Less current portion                                                                                                                                                                                         |  |          | 37,000  |              |  |   | 7,000   | 
|                                                                                                                                                                                                             |  |          |         |              |  |   |         | 
|Total long-term debt                                                                                                                                                                                         |  | $        | 632,766 |              |  | $ | 693,367 | 
|                                                                                                                                                                                                             |  |          |         |              |  |   |         | 

24



---



##### Table of Contents



The following table is a summary of interest
expense that is recorded during the period, which is paid in
cash during the period or subsequent periods, and the interest
expense related to amortization of discount and deferred
financing fees (in thousands):

|                                                                                 |                                                                 |                    |       |                  |  |      |        |        |  |  |        |        |  |  |        |        | 
|-------------------------------------------------------------------------------- | --------------------------------------------------------------- | ------------------ | ----- | ---------------- |  | ---- | ------ | ------ |  |  | ------ | ------ |  |  | ------ | ------ | 
|                                                                                 |                                                                 |                    |       |                 
|                                                                                 |                                                                 | Three Months Ended |       | Six Months Ended
|                                                                                 |                                                                 | June 30,           |       | June 30,        
|                                                                                 |                                                                 |                    |       |                 
|                                                                                 |                                                                 | 2004               |       | 2003             |  | 2004 |        | 2003  
|                                                                                 |                                                                 |                    |       |                  |  |      |        |       
|Components of interest expense                                                   |                                                                 |                    |       |                  |  |      |        |        |  |  |        |        |  |  |        |       
|                                                                                 | Senior Credit Facility                                          |                    | $     | 1,913            |  |      | $      | 1,684  |  |  | $      | 3,870  |  |  | $      | 3,221  | 
|                                                                                 | $300,000, 8 3/8% Senior Subordinated Notes                      |                    |       |                 |  |      |        | 5,164  |  |  |        |       |  |  |        | 11,445 | 
|                                                                                 | $200,000, 6 1/2% Senior Subordinated Notes                      |                    |       | 3,290            |  |      |        | 1,806  |  |  |        | 6,540  |  |  |        | 1,806  | 
|                                                                                 | $125,000, 2.50% Exchangeable Senior Subordinated
    Debentures |                    |       | 823              |  |      |        | 434    |  |  |        | 1,604  |  |  |        | 434    | 
|                                                                                 | $166,440, 8% Senior Notes                                       |                    |       | 3,917            |  |      |        | 4,200  |  |  |        | 7,636  |  |  |        | 8,400  | 
|                                                                                 | $276,000, 10% Senior Discount Notes                             |                    |       |                 |  |      |        |       |  |  |        |       |  |  |        | 330    | 
|                                                                                 | $100,000, 10% Senior Discount Notes                             |                    |       |                 |  |      |        |       |  |  |        |       |  |  |        | 194    | 
|                                                                                 | Other                                                           |                    |       | 4                |  |      |        |       |  |  |        | 4      |  |  |        |       | 
|                                                                                 |                                                                 |                    |       |                  |  |      |        |        |  |  |        |        |  |  |        |       
|Interest expense before amortization of discount
    and deferred financing fees |                                                                 |                    | 9,947 |                  |  |      | 13,288 |        |  |  | 19,654 |        |  |  | 25,830 |       
|Amortization of discount and deferred financing
    fees                         |                                                                 |                    | 2,010 |                  |  |      | 1,945  |        |  |  | 4,042  |        |  |  | 9,924  |       
|                                                                                 |                                                                 |                    |       |                  |  |      |        |        |  |  |        |        |  |  |        |       
|                                                                                 | Total interest expense                                          |                    | $     | 11,957           |  |      | $      | 15,233 |  |  | $      | 23,696 |  |  | $      | 35,754 | 
|                                                                                 |                                                                 |                    |       |                  |  |      |        |        |  |  |        |        |  |  |        |       



| |                       
| | ----------------------
| | Senior Credit Facility

On February 7, 2003, we obtained a
$175.0 million term loan as part of an amendment to our
existing credit facility. In connection with this amendment we
recorded approximately $1.2 million of deferred financing
costs. In March 2003, we used the proceeds from the loan, a
drawdown of $75.0 million from our existing revolving
credit facility and cash on hand to retire the 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. We incurred a charge of approximately
$29.5 million related to the write-off of unamortized
financing fees and discounts and associated costs as a result of
the early extinguishment of debt.

The repayment of the term loan began on
September 30, 2003 with $1.75 million to be repaid
each quarter until final maturity on December 31, 2007. The
revolving credit facility is available until the scheduled
termination date of March 31, 2005. Borrowings under the
senior credit facilities bear interest at a rate based, at our
option, on an adjusted LIBOR rate, plus an applicable
margin range of 2.00% to 2.25% for the term loan and 1.50% to
2.75% for the revolving credit facility depending on whether we
have met ratios specified in the senior credit agreement. We are
required to pay quarterly commitment fees ranging from 0.375% to
0.750%, based upon our leverage ratio for that particular
quarter, on the unused portion of the senior credit facilities,
in addition to annual agency and other administration fees.

The revolving credit facility may be used for
general corporate purposes including, without limitation,
permitted acquisitions and redemptions of our publicly traded
securities not to exceed $50.0 million in the aggregate of
our common stock and/or our subsidiaries publicly-traded
indebtedness and we may from time to time request the lenders to
increase the aggregate amount of the commitments under the
revolving credit facility up to a total of $235.0 million.



| |            
| | -----------
| | Prepayments

The senior credit facility permits us to prepay
loans and to permanently reduce revolving credit commitments, in
whole or in part, at any time. In addition, we are required to
make mandatory prepayments of term loans, and thereafter
mandatory reductions of our revolving credit commitment,

25



---



##### Table of Contents



subject to certain exceptions and subject to a
reduction to zero based upon our financial performance, in
amounts equal to 50% of the net cash proceeds of certain
issuances of debt or equity of certain of our subsidiaries; and
100% of the net cash proceeds of certain dispositions of assets.


Mandatory and optional prepayments of the term
loans are allocated pro rata between the term loans as
applicable, and applied ratably based on the number of remaining
installments under each. Any prepayment of adjusted LIBOR loans
other than at the end of an interest period will be subject to
reimbursement of breakage costs.



| |          
| | ---------
| | Covenants

The senior credit facilities contain covenants
that, among other things, restrict the ability of our
subsidiaries to dispose of assets, incur additional
indebtedness, incur guarantee obligations, prepay other
indebtedness or amend other debt instruments, pay dividends,
create liens on assets, enter into sale and leaseback
transactions, make investments, loans or advances, make
acquisitions, engage in mergers or consolidations, change the
business conducted by it, make capital expenditures, or engage
in certain transactions with affiliates and otherwise restrict
certain corporate activities. In addition, under the senior
credit facilities, we are required to comply with specified
financial ratios, including minimum interest coverage ratios,
maximum leverage ratios and minimum fixed charge coverage ratios.

The senior credit facilities also contain
provisions that prohibit any modification of the indentures
governing our senior subordinated notes and senior notes in any
manner adverse to the lenders and that limits our ability to
refinance or otherwise prepay our senior subordinated notes or
senior notes without the consent of such lenders.

At June 30, 2004, the Company was in compliance
with the covenants under our senior credit facilities.



| |                  
| | -----------------
| | Events of Default

The senior credit facilities contain customary
events of default, including payment defaults, breach of
representations and warranties, covenant defaults,
cross-defaults to certain other indebtedness, certain events of
bankruptcy and insolvency, ERISA events, judgment defaults,
actual or asserted invalidity of any security interest and
change of control.

26



---



##### Table of Contents





| |                                     
| | ------------------------------------
| | 6 1/2% Senior Subordinated
    Notes

In May 2003, we issued $200.0 million
aggregate principal amount at maturity of
6 1/2% Senior Subordinated Notes due in 2013 in a
private placement. We filed a registration statement with the
Securities and Exchange Commission in January 2004 to register
an exchange offer allowing holders of the
6 1/2% Senior Subordinated Notes to exchange their
notes for notes with essentially identical terms. The registered
exchange offer closed in February of 2004 and all outstanding
notes were exchanged at closing. On May 15, 2004, we paid
$160,000 in penalty fees in connection with the delay in this
registration statement being declared effective. The
6 1/2% Senior Subordinated Notes are unsecured and are
subordinated in right of payment to all of our existing and
future senior indebtedness, including our senior credit
facilities and 8% Senior Notes due in 2008, and rank on
parity in right of payment with all of our senior subordinated
indebtedness, including our 2.50% Exchangeable Senior
Subordinated Debentures due in 2033. The 6 1/2% Senior
Subordinated Notes are guaranteed, jointly and severally, on an
unsecured senior subordinated basis by LIN TV Corp. and LIN
Televisions direct and indirect, existing and future,
domestic restricted subsidiaries. Financing costs of
$5.0 million were incurred in connection with the issuance
and are being amortized over the term of the debt. Cash interest
on the 6 1/2% Senior Subordinated Notes accrues at
6 1/2% per annum and is payable semi-annually in
arrears commencing on November 15, 2003. We may redeem the
6 1/2% Senior Subordinated Notes at any time on or
after May 15, 2008 at the redemption prices set forth
below, (if redeemed during the 12 month period beginning on
May 15 of each of the years set forth below):

|                    |  |                               |          | 
|------------------- |  | ----------------------------- | -------- | 
|                    |  | Price (as a percentage of    
|Year                |  | outstanding principal amount)
|                    |  |                              
|2008                |  |                               | 103.250% | 
|2009                |  |                               | 102.167% | 
|2010                |  |                               | 101.083% | 
|2011 and thereafter |  |                               | 100.000% | 

We may also redeem up to 35% of the
6 1/2% Senior Subordinated Notes using proceeds of
certain equity offerings completed before May 15, 2006 at
106.5% of the outstanding principal amount thereof plus accrued
and unpaid interest to the redemption date.

The 6 1/2% Senior Subordinated Notes
are also subject to early redemption provisions in the event of
a change of control, which may require us to repurchase the
6 1/2% Senior Subordinated Notes at a price equal to
101% of the principal amount of the note, together with accrued
and unpaid interest. The indenture governing the
6 1/2% Senior Subordinated Notes limits, among other
things, the incurrence of additional indebtedness and issuance
of capital stock; layering of indebtedness; the payment of
dividends on, and redemption of, our capital stock; liens;
mergers, consolidations and sales of all or substantially all of
our assets; asset sales; asset swaps; dividend and other payment
restrictions affecting restricted subsidiaries; and transactions
with affiliates.



| |                                                      
| | -----------------------------------------------------
| | 2.50% Exchangeable Senior Subordinated
    Debentures

In May 2003, we issued $125.0 million
aggregate principal amount at maturity of 2.50% Exchangeable
Senior Subordinated Debentures due in 2033 in a private
placement. The resale of the debentures and the shares of
Class A common stock issuable upon conversion of the
debentures were registered with the Securities Exchange
Commission pursuant to a registration statement which became
effective on January 16, 2004. On May 15, 2004, we
paid $96,000 of penalty fees in connection with the delay in
this registration statement being declared effective. The
debentures are unsecured and subordinated in right of payment to
all of our existing and future senior indebtedness including its
senior credit facilities and 8% Senior Notes due in 2008,
and rank on a parity in right of payment with all of its senior
subordinated indebtedness, including the 6 1/2% Senior
Subordinated Notes due in 2013. The debentures are guaranteed,
jointly and severally, on an unsecured senior subordinated basis
by LIN TV Corp., and LIN Televisions direct and
indirect, existing and future, domestic restricted subsidiaries.
Financing costs of $4.3 million were incurred in connection
with the issuance and are being amortized over the term of the
debt. Cash

27



---



##### Table of Contents



interest on the debentures accrues at
2.50% per annum and is payable semi-annually in arrears
commencing on November 15, 2003. We may redeem for cash all
or a portion of the debentures at any time on or after
May 20, 2008 at a price equal to 100% of the principal
amount of the debentures to be redeemed plus accrued and unpaid
interest. Holders of the debentures may require us to purchase
all or a portion of their debentures on May 15, 2008, 2013,
2018, 2023 or 2028 at 100% of the principal amount, plus accrued
and unpaid interest. The debentures are subject to early
redemption provisions in the event of a fundamental change in
which LIN TV Corp.s common stock is exchanged for or
converted into consideration that is not all or substantially
all common stock that is listed on a national securities
exchange or quoted on Nasdaq. In addition, the indenture
governing the debentures limits, among other things; the
incurrence of additional indebtedness and issuance of capital
stock; the payment of dividends on, and redemption of capital
stock of certain of our subsidiaries; liens; mergers,
consolidations and sales of all or substantially all of the
assets of certain of our subsidiaries; asset sales; asset swaps;
restricted payments and transactions with affiliates.


Contingent Interest.We will pay contingent interest to holders of the debentures
during any six-month period from and including an interest
payment date to but excluding the next interest payment date,
commencing with the six-month period beginning May 15,
2008, if the average trading price of the debentures for a five
trading day measurement period immediately preceding the
beginning of the applicable six-month period equals 120% or more
of the principal amount. The contingent interest payable per
$1,000 principal amount of debentures is 0.25% per
annum. Any contingent interest will be payable on the interest
payment date at the end of the relevant six-month period.

Exchange Rights.A
holder may exchange each debenture for a number of shares of
LIN TV Corp. class A common stock, equal to the
exchange rate under the following conditions:



|  |                                                                                                                                                                                                                                                                                                                                    
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | during any fiscal quarter, if the closing sale
    price of LIN TV Corp. common stock for at least
    20 trading days in a period of 30 consecutive trading
    days ending on the last trading day of the preceding fiscal
    quarter is more than 120% of the base exchange price (initially
    120% of $37.28, or $44.7360); 
| 
| | during any period in which the credit rating
    assigned to the debentures by Standard & Poors
    Rate Services (S&P) is below B-, or the credit
    rating assigned to the debentures by Moodys Investors
    Services (Moodys) is below B3, or either
    S&P or Moodys does not assign a rating to the
    debentures;
| 
| | during the five business-day period after any
    five consecutive trading-day period in which the trading price
    per debenture for each day of that period was less than 98% of
    the product of the closing sale price of LIN TV Corp.
    common stock and the exchange rate of each such day;                             
| 
| | if such debentures have been called for
    redemption; or                                                                                                                                                                                                                                                                         
| 
| | upon the occurrence of certain corporate
    transactions, such as a consolidation, merger or binding share
    exchange pursuant to which shares of LIN TV Corp. common
    stock would be converted into cash, securities or other property.                                                                                     

Exchange Rates.Prior to May 15, 2008, the exchange rate will be determined
as follows:



|  |                                                                                                                                                                                                                                                                                                                   
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | if the applicable stock price is less than or
    equal to the base exchange price, the exchange rate will be the
    base exchange rate; and                                                                                                                                                                     
| 
| | if the applicable stock price is greater than the
    base exchange price, the exchange rate will be determined in
    accordance with the following formula; provided, however, in no
    event will the exchange rate exceed 46.2748, subject to the same
    proportional adjustment as the base exchange rate:

|                   |  |   |  |   |  |                                                                          |  |   |  |   |  |                         
|------------------ |  | - |  | - |  | ------------------------------------------------------------------------ |  | - |  | - |  | ------------------------
|Base Exchange Rate |  | + |  | [ |  | (Applicable Stock Price - Base Exchange
    Price)Applicable Stock Price |  | ] |  | × |  | Incremental Share Factor

On May 15, 2008, the exchange rate will be
fixed at the exchange rate then in effect.

The base exchange rate is 26.8240,
subject to adjustments, and the base exchange price
is a dollar amount (initially $37.28) derived by dividing the
principal amount per debenture by the base exchange

28



---



##### Table of Contents



rate. The incremental share factor is
23.6051, subject to the same proportional adjustment as the base
exchange rate. The applicable stock price is equal
to the average of the closing sale prices of LIN TV
Corp.s common stock over the five trading-day period
starting the third trading day following the exchange date of
the debentures.


Embedded Derivative
Features.The 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 other liabilities.
We have recorded a gain on derivative instruments in connection
with the mark-to-market of these derivative features
$3.6 million and $4.6 million for the three and six
months ended June 30, 2004.



| |                
| | ---------------
| | 8% Senior Notes

LIN Television Corporation has outstanding
$166.4 million in aggregate principal amount of
8% Senior Notes due January 15, 2008. Interest on
these notes accrues at a rate of 8% and is payable semi-annually
on January 15 and July 15 of each year. LIN Television
Corporation may redeem some or all of these notes at any time on
or after January 15, 2005.

These senior notes are general unsecured
obligations and rank equally in right of payment with all LIN
Television Corporations existing and future senior
indebtedness and senior in right of payment to all LIN
Television Corporations existing and future subordinated
indebtedness. Each of LIN Television Corporations direct
and indirect, existing and future, domestic subsidiaries
guarantee the senior notes on a senior basis. The indenture
governing the senior notes contains a change of control
provision which states, among other things, that upon a change
of control the holders of these notes may require LIN Television
Corporation to purchase all or a portion of their notes at a
cash purchase price equal to 101% of the principal amount
thereof plus accrued and unpaid interest, if any, to the date of
purchase. In addition, the indenture governing the senior notes
limits, among other things; the incurrence of additional
indebtedness and issuance of capital stock; the payment of
dividends on, and redemption of capital stock of certain of LIN
Television Corporations subsidiaries; liens; mergers,
consolidations and sales of all or substantially all of the
assets of certain of LIN Television Corporations
subsidiaries; asset sales; asset swaps; restricted payments and
transactions with affiliates.

During the six months ended June 30, 2004,
we drew down funds from our 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. We incurred a charge
of $1.5 million and $4.4 million for the three and six
months ended June 30, 2004 related to the write-off of
unamortized discounts and associated costs as a result of the
early extinguishment of debt.



| |          
| | ---------
| | GECC Note

GECC provided debt financing in connection with
the formation of our 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. 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 us and to NBC from the
excess cash generated by the joint venture of approximately
$32.3 million on average each year during the past three
years. Accordingly, we expect 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 our obligation, but is recourse to
the joint venture, our equity interests therein and to
LIN TV Corp., pursuant to a guarantee. If the joint venture
were unable to pay principal or interest on the GECC note and
GECC could not otherwise get its money back from the joint
venture,

29



---



##### Table of Contents



GECC could require LIN TV Corp. to pay the
shortfall of any outstanding amounts under the GECC note. If
this happened, we 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 our senior credit facilities and other
    outstanding indebtedness; or
| 
| | if the GECC note is prepaid because of an
    acceleration on default or otherwise, or if the note is repaid
    at maturity, we 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.

FACTORS THAT MAY AFFECT FUTURE
RESULTS

Risks Associated with Business
Activities

Our operating results are primarily dependent
on advertising revenues and, as a result, we may be more
vulnerable to economic downturns than businesses in other
industries.

Our operating results are primarily dependent on
advertising revenues. The success of our operations depends in
part upon factors beyond our control, such as:



|  |                                                                
|- | ---------------------------------------------------------------
| | national and local economic conditions;                        
| 
| | the availability of high profile sporting events;              
| 
| | the relative popularity of the programming on our
    stations;
| 
| | the demographic characteristics of our
    markets; and        
| 
| | the activities of our competitors.                             

Our programming may not attract sufficient
targeted viewership or we may not achieve favorable ratings. Our
ratings depend partly upon unpredictable and volatile factors
beyond our control, such as viewer preferences, competing
programming and the availability of other entertainment
activities. A shift in viewer preferences could cause our
programming not to gain popularity or to decline in popularity,
which could cause our advertising revenues to decline. In
addition, we and those that we rely on for programming may not
be able to anticipate and react effectively to shifts in viewer
tastes and interests in the markets.

We are dependent to a significant degree on
automotive advertising.

Approximately 22%, 25%, 25%, 22% and 21% of our
total revenues for the three and six months ended June 30,
2004 and for the years ended December 31, 2003, 2002 and
2001, respectively, consisted of automotive advertising. A
significant decrease in these revenues in the future could
materially and adversely affect our results of operations and
cash flows, which could affect our ability to fund operations
and service our debt obligations and affect the value of shares
of our common stock.

We have a substantial amount of debt, which
could adversely affect our financial condition, liquidity and
results of operations, reduce our operating flexibility and put
us at greater risk for default and acceleration of our
debt.

As of June 30, 2004, we had approximately
$669.8 million of consolidated indebtedness and
approximately $779.6 million of consolidated
stockholders equity. In addition, we may incur additional
indebtedness in the future. Accordingly, we will continue to
have significant debt service obligations.

30



---



##### Table of Contents



Our large amount of indebtedness could, for
example:



|  |                                                                                                                                                                                                                                                              
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | require us to use a substantial portion of our
    cash flow from operations to pay indebtedness and reduce the
    availability of our cash flow to fund working capital, capital
    expenditures, acquisitions and other general corporate
    activities;
| 
| | limit our ability to obtain additional financing
    in the future;                                                                                                                                                                                          
| 
| | expose us to greater interest rate risk since the
    interest rates on certain of our borrowings, including amounts
    borrowed under our senior credit facilities, vary; and                                                                              
| 
| | impair our ability to successfully withstand a
    downturn in our business or the economy in general and place us
    at a disadvantage relative to our less leveraged competitors.                                                                         

Any of these consequences could have a material
adverse effect on our business, liquidity and results of
operations. In addition, our debt instruments require us to
comply with covenants, including those that restrict the ability
of certain of our subsidiaries to dispose of assets, incur
additional indebtedness, pay dividends, make investments, make
acquisitions, engage in mergers or consolidations and make
capital expenditures, that will restrict the manner in which we
conduct our business and may impact our operating results. Our
failure to comply with these covenants could result in events of
default, which, if not cured or waived, would permit
acceleration of our indebtedness and acceleration of
indebtedness under other instruments that contain
cross-acceleration or cross-default provisions. In the past, we
have obtained amendments with respect to compliance with
financial ratio tests in our senior credit facilities. Consents
or amendments that may be required in the future may not be
available on reasonable terms, if at all.

We have a history of net losses and a
substantial accumulated deficit.

We had net income of $14.6 million and
$16.0 million for the three and six months ended
June 30, 2004, respectively, and net losses of
$90.4 million, $47.2 million, and $61.7 million,
for years ended December 31, 2003, 2002 and 2001,
respectively, primarily as a result of amortization and
impairment of intangible assets, debt service obligations and
extinguishment costs. In addition, as of June 30, 2004, we
had an accumulated deficit of $278.8 million. We may not be
able to maintain profitability.

We may not be able to generate sufficient cash
flow to meet our debt service obligations, forcing us to
refinance all or a portion of our indebtedness, sell assets or
obtain additional financing.

Our ability to make scheduled payments of the
principal of, or to pay interest on, or to refinance our
indebtedness, will depend on our future performance, which, to a
certain extent, will be subject to economic, financial,
competitive and other factors beyond our control. Our business
may not continue to generate sufficient cash flow from
operations in the future to pay our indebtedness or to fund our
other liquidity needs. As a result, we may need to refinance all
or a portion of our indebtedness, on or before maturity, sell
assets or obtain additional financing. We may not be able to
refinance any of our indebtedness on commercially reasonable
terms, if at all. If we are unable to generate sufficient cash
flow or refinance our indebtedness on commercially reasonable
terms, we may have to seek to restructure our remaining debt
obligations, which could have a material adverse effect on the
price of our common stock and the market, if any, for our debt.

We have a material amount of intangible
assets, and if we are required to write down intangible assets
in future periods, it would reduce net income, which in turn
could materially and adversely affect the results of operations
and the trading price of LIN TV Corp.s class A
common stock.

Approximately $1.7 billion, or 81%, of our
total assets as of June 30, 2004 consists of unamortized
intangible assets. Intangible assets principally include
broadcast licenses and goodwill. SFAS No. 142
requires, among other things, the discontinuance of the
amortization of goodwill and broadcast licenses, and the
introduction of impairment testing in its place. If at any point
in the future the value of these intangible assets decreased, we
may be required to incur an impairment charge that could
significantly

31



---



##### Table of Contents



adversely impact our reported results of
operations and stockholders equity. For example, we
recorded an impairment of our broadcast licenses at
December 31, 2003 of $51.7 million.


Our strategy includes seeking growth through
acquisitions of television stations, which could pose various
risks and increase our leverage.

We intend to pursue selective acquisitions of
television stations with the goal of improving their operating
performance by applying our managements business and
growth strategy. However, we may not be successful in
identifying attractive acquisition targets. Future acquisitions
involve inherent risks, such as increasing leverage and debt
service requirements and combining company cultures and
facilities that could have a material adverse effect on our
operating results, particularly during the period immediately
following any acquisitions. We may not be able to successfully
implement effective cost controls, increase advertising revenues
or increase audience share with respect to any acquired station.
In addition, our future acquisitions may result in our
assumption of unexpected liabilities and may result in the
diversion of managements attention from the operation of
our business.

In addition, television station acquisitions are
subject to the approval of the Federal Communications Commission
(FCC or the Commission) and,
potentially, other regulatory authorities. The need for FCC and
other regulatory approvals could restrict our ability to
consummate future transactions and potentially require us to
divest some television stations if the FCC believes that a
proposed acquisition would result in excessive concentration in
a market, even if the proposed combinations may otherwise comply
with FCC ownership limitations.

Broadcast interests of our affiliates,
including Hicks Muse, may be attributable to us and may limit
our ability to acquire television stations in particular
markets, restricting our ability to execute our growth
strategy.

The number of television stations we may acquire
in any market is limited by FCC rules and may vary depending
upon whether the interests in other television stations or other
media properties of individuals affiliated with us are
attributable to those individuals under FCC rules. The FCC
generally applies its ownership limits to
attributable interests held by an individual,
corporation, partnership or other association. The broadcast or
other media interests of our officers, directors and 5% or
greater voting stockholders are generally attributable to us,
which may limit our acquisition or ownership of television
stations in particular markets while those officers, directors
or stockholders are associated with us. In addition, the holder
of an otherwise nonattributable equity or debt interest in a
licensee which is in excess of 33% of the total debt and equity
of the licensee will nonetheless be attributable where the
holder is either a major program supplier to that licensee or
the holder has an attributable interest in another broadcast
station, cable system or newspaper in the same market. As of
June 30, 2004, affiliates of Hicks Muse own
23,510,137 shares of LIN TV Corp. class B common
stock, which represents 46.7% of LIN TV Corps capital
stock. Pursuant to FCC rules and regulations, non-voting stock
does not generally create an attributable interest. As a result,
due to the fact that affiliates of Hicks Muse only own shares of
LIN TV Corp. class B common stock, we believe that
none of our stations will be attributed to Hicks Muse and that
no stations attributed to Hicks Muse will be attributed to us.
However, if affiliates of Hicks Muse elect to convert their
shares of class B common stock into either class A
common stock or class C common stock of LIN TV Corp.,
under current FCC rules and regulations, the stations that are
attributable to Hicks Muse would be attributed to us. In
addition, the FCC has stated that it reserves the authority, in
an appropriate case, to declare as being attributable an unusual
combination of otherwise nonattributable interests.

Hicks Muse and its affiliates, whose interests
may differ from your interests, have approval rights with
respect to significant transactions and could convert their
equity interests in LIN TV Corp. into a majority of its
voting power, thereby reducing the voting power of other
LIN TV Corp. shareholders.

Hicks Muse and its affiliates have the ability to
convert shares of LIN TV Corp.s nonvoting
class B common stock into class A common stock,
subject to the approval of the FCC. If this occurs, affiliates of

32



---



##### Table of Contents



Hicks Muse would own approximately 46.7% of our
voting equity interests in LIN TV Corp. and will
effectively have the ability to elect the entire board of
directors and to approve or disapprove any corporate transaction
or other matters submitted to LIN TV Corp. shareholders for
approval, including the approval of mergers or other significant
corporate transactions. Upon the conversion of the majority of
the nonvoting class B common stock into class A common
stock, the class C common stock will automatically convert
into an equal number of shares of class A common stock. The
interests of Hicks Muse and its affiliates may differ from the
interests of LIN TV Corp.s other stockholders and
Hicks Muse and its affiliates could take actions or make
decisions that are not in the best interests of other
shareholders.


For example, Hicks Muse is in the business of
making significant investments in existing or newly formed
companies and may from time to time acquire and hold controlling
or non-controlling interests in television broadcast assets,
such as its existing investment in businesses like Clear Channel
Communications, Inc., that may directly or indirectly compete
with LIN TV Corp. for advertising revenues. Hicks Muse and
its affiliates may from time to time identify, pursue and
consummate acquisitions of television stations or other
broadcast related businesses that may be complementary to
LIN TV Corp.s business and therefore such acquisition
opportunities may not be available to LIN TV Corp.

In addition, affiliates of Hicks Muse as the
holders of LIN TV Corp.s class B common stock,
have the right to approve, among other things, the issuance or
repurchase of any of LIN TV Corp.s securities, the
sale or acquisition of any asset or the incurrence of any
indebtedness with a value of 10% or more of the fair market
value of our common equity securities of LIN TV
Corp.s , the merger or consolidation of LIN TV Corp.
with another company or any transaction that is not in the
ordinary course of business. Hicks Muse also has an assignable
right, under certain conditions, to acquire the outstanding
shares of LIN TV Corp.s class C common stock.

Moreover, Royal W. Carson, III and Randall
S. Fojtasek, two of LIN TVs directors, together own
all of LIN TV Corp.s class C common stock and
therefore possess 70% of LIN TVs combined voting
power. Accordingly, Messrs. Carson and Fojtasek will have
the power to elect the entire board of directors of LIN TV
Corp. and through this control, to approve or disapprove any
corporate transaction or other matter submitted to the
LIN TV Corp. stockholders for approval, including the
approval of mergers or other significant corporate transactions.
Both of Messrs. Carson and Fojtasek have prior business
relations with Hicks Muse. Mr. Carson is the President of
Carson Private Capital Incorporated, an investment firm that
sponsors funds-of-funds and dedicated funds that have invested
substantially all of the net capital of these funds in
investment funds sponsored by Hicks Muse or its affiliates.
Mr. Carson also serves on an advisory board representing
the interests of limited partners of Hicks Muse, Tate &
Furst Europe Fund, L.P., which is sponsored by Hicks Muse.
Hicks, Muse, Tate & Furst Europe Fund does not have an
investment in us. Until its sale in 1999, Mr. Fojtasek was
the Chief Executive Officer of Atrium Companies, Inc., which was
principally owned by Hicks Muse and its affiliates. Affiliates
of Hicks Muse have invested as limited partners in Brazos
Investment Partners LLC, a private equity investment firm of
which Mr. Fojtasek is a founding member.

If we are unable to compete effectively, our
revenue could decline.

The entertainment industry, and particularly the
television industry, is highly competitive and is undergoing a
period of consolidation and significant change. Many of our
current and potential competitors have greater financial,
marketing, programming and broadcasting resources than we do.
Technological innovation and the resulting proliferation of
television entertainment, such as cable television, Internet
services, wireless cable, satellite-to-home distribution
services, pay-per-view, digital video recorders, DVDs and home
video and entertainment systems, have fractionalized television
viewing audiences and have subjected free over-the-air
television broadcast stations to new types of competition. In
addition, as a result of the Telecommunications Act of 1996, the
legislative ban on telephone cable ownership has been repealed
and telephone companies are now permitted to seek FCC approval
to provide video services to homes.

33



---



##### Table of Contents



It will be difficult to take us over, which
could adversely affect the trading price of our class A
common stock.

Affiliates of Hicks Muse effectively determine
whether a change of control will occur because of their rights
through their ownership of all of the shares of our class B
common stock or through their voting power, if they convert
their shares of class B common stock into class A
common stock or class C common stock. Moreover, provision
of Delaware corporate law and our bylaws and certificate of
incorporation, including the 70% voting power rights of our
class C common stock held by Messrs. Carson and
Fojtasek, make it more difficult for a third party to acquire
control of us, even if a change of control would benefit the
holders of class A common stock. These provisions and
controlling ownership by affiliates of Hicks Muse could also
adversely affect the public trading price of our class A
common stock.

The loss of network affiliation agreements or
changes in network affiliations could materially and adversely
affect our results of operations if we are unable to quickly
replace the network affiliation.

The non-renewal or termination of a network
affiliation agreement or a change in network affiliations could
have a material adverse effect on us. Each of the networks
generally provides our affiliated stations with up to
22 hours of prime time programming per week. In return, our
stations broadcast network-inserted commercials during that
programming and often receive cash payments from networks,
although in some circumstances, we make cash payments to
networks.

In addition, some of our network affiliation
agreements are subject to earlier termination by the networks
under specified circumstances, including as a result of a change
of control of our affiliated stations, which would generally
result upon the acquisition of 50% of our voting power. In the
event that affiliates of Hicks Muse elect to convert the shares
of LIN TV Corp. class B common stock held by them into
shares of either class A common stock or class C
common stock, such conversion may result in a change of control
of our stations with network affiliation agreements. Some of the
networks with which our stations are affiliated have required
other broadcast groups, upon renewal of affiliation agreements,
to reduce or eliminate network affiliation compensation and, in
specific cases, to make cash payments to the network, and to
accept other material modifications of existing affiliation
agreements. Consequently, our affiliation agreements may not all
remain in place and each network may not continue to provide
programming or compensation to affiliates on the same basis as
it currently provides programming or compensation. If this
occurs, we would need to find alternative sources of
programming, which may be less attractive and more expensive.

A change in network affiliation in a given
television market may have many short-term and long-term
consequences, depending upon the circumstances surrounding the
change. Potential short-term consequences include increased
marketing costs and increased internal operating costs, which
can vary widely depending on the amount of marketing required to
educate the audience regarding the change and to maintain the
stations viewing audience, short term loss of market share
or slower market growth due to advertiser uncertainty about the
switch, costs of gearing up a news operation, if necessary, and
the cost of the equipment needed to conform the stations
programming, equipment and logos to the new network affiliation.
Long-term consequences are more difficult to assess, due to the
cyclical nature of each of the major networks share of the
audience that changes from year to year with programs coming to
the end of their production cycle and the audience acceptance of
new programs in the future and the fact that national network
averages are not necessarily indicative of how a networks
programming is accepted in an individual market. How well a
particular network fares in the affiliation switch depends
largely on the value of the broadcast license, which is
influenced by the length of time the broadcast license has been
broadcasting, whether it is a VHF or a UHF license, the quality
and location of the license, the audience acceptance of the
licensees local news programming and community involvement
and the quality of the other non-network programming
transmitted. In addition, most of the revenue earned by
television stations is attributable to locally produced news
programming and syndicated product, rather than to network
affiliation payments and advertising sales related to network
programming. The circumstances that may surround a network
affiliation switch cause uncertainty as to the actual costs that
will be incurred by us

34



---



##### Table of Contents



and, if these costs are significant, the switch
could have a material adverse impact on the income we derive
from the affected station.


The use of an alternative method of valuing
our network affiliations could have a significant adverse impact
on our results of operations.

Different broadcast companies may use different
assumptions in valuing acquired broadcast licenses and their
related network affiliations than those that are used by us.
These different assumptions may result in the use of different
valuation methods that can result in significant variances in
the amount of purchase price allocated to these assets among
broadcast companies.

We believe that the value of a television station
is derived primarily from the attributes of its broadcast
license. The attributes include:



|  |                                                                                                                 
|- | ----------------------------------------------------------------------------------------------------------------
| | The scarcity of broadcast licenses assigned by
    the Federal Communication Commission to a particular market; 
| 
| | The length of time that the broadcast license has
    been broadcasting;                                        
| 
| | Whether the station is a VHF station or a UHF
    station;                                                      
| 
| | The quality of the broadcast signal and location
    of the broadcast station within the market;                
| 
| | The audience acceptance of the broadcast
    licenses local news programming and community
    involvement; and
| 
| | The quality of non-network programming carried by
    a station.                                                

In connection with our purchase of Sunrise
Television Corp. in May 2002, we acquired broadcast licenses in
markets with a number of commercial television stations equal to
or less than the number of television networks seeking
affiliates. The methodology we used in connection with the
valuation of the stations acquired in the Sunrise transaction
was based on our evaluation of the broadcast licenses acquired
and the characteristics of the markets in which they operated.
We believed that in these specific markets we would be able to
replace a network affiliation agreement with little or no
economic loss to the television station. As a result of this
assumption, we ascribed no incremental value to the incumbent
network affiliation in each market beyond the cost of
negotiating a new agreement with another network and the value
of any terms that were more favorable or unfavorable than those
generally prevailing in the market. Other broadcasting companies
have valued network affiliations on the basis that it is the
affiliation and not the other attributes of the station,
including its broadcast license, which contributes to the
operating performance of that station. As a result, these
broadcasting companies look beyond the specific contract value
and include in their network affiliation valuation amounts
related to attributes that we believe are more appropriately
reflected in the value of the broadcast license or goodwill.

Other broadcasting companies believe that network
affiliations are an important component of the value of a
station. These companies believe that VHF stations are popular
because they have been affiliating with networks from the
inception of network broadcasts, stations with network
affiliations have the most successful local news programming and
the network affiliation relationship enhances the audience for
local syndicated programming. As a result, these broadcasting
companies allocate a significant portion of the purchase price
for any station that they may acquire to the network affiliation
relationship. If we were to adopt this alternative method for
valuing these network affiliations, the value of our broadcast
licenses and goodwill as reported on our balance sheet would be
reduced and the value of our other intangibles assets would be
proportionately increased. As a result, our expenses relating to
the depreciation and amortization of intangible assets could
increase significantly as more value would be assigned to an
amortizing asset and this increase could materially reduce our
operating income and materially increase our net loss.

In future acquisitions, the valuation of the
broadcast licenses and network affiliations may differ from our
prior acquisition values due to different attributes of each
station and the market in which it operates.

35



---



##### Table of Contents



The GECC note could result in significant
liabilities and could trigger a change of control under our
existing indebtedness, causing our indebtedness to become
immediately due and payable.

GECC provided debt financing for a joint venture
between us and NBC, a sister corporation of GECC, in the form of
an $815.5 million, non-amortizing senior secured note due
2023. In the event that such note is not extended or otherwise
refinanced when the note matures in 2023, we expect that,
assuming current federal marginal tax rates remain in effect,
our tax liability related to the joint venture transaction will
be approximately $255.0 million. The formation of the joint
venture was intended to be tax-free to us. However, any early
repayment of the note will accelerate this tax liability, which
could have a material adverse effect on us. In addition, if an
event of default occurs under the note, and GECC is unable to
collect all amounts owed to it after exhausting all commercially
reasonable remedies against the joint venture, including during
the pendency of any bankruptcy involving the joint venture, GECC
may proceed against LIN TV Corp. to collect any deficiency,
including by foreclosing on our stock and other LIN TV
Corp. subsidiaries, which could trigger the change of control
provisions under our existing indebtedness.

Annual cash interest payments on the note are
approximately $66.2 million. There are no scheduled
payments of principal due prior to 2023, the stated maturity of
the note. The obligations under the note were assumed by the
joint venture, and the proceeds of the note were used to finance
a portion of the cost of Hicks Muses acquisition of us.
The note is not our obligation nor the obligation of any of
LIN TV Corp.s subsidiaries and is recourse only to
the joint venture, our equity interest in the joint venture and,
after exhausting all remedies against the assets of the joint
venture and the other equity interest in the joint venture, to
LIN TV Corp. pursuant to a guarantee. An event of default
under the note will occur if the joint venture fails to make any
scheduled payment of interest, within 90 days of the date
due and payable, or principal of the note on the maturity date.
The joint venture has established a cash reserve of
$15.0 million for the purpose of making interest payments
on the note when due. Both NBC and LIN TV Corp. have the
right to make a shortfall loan to the joint venture to cover any
interest payment. However, if the joint venture fails to pay
principal or interest on the note, and neither NBC nor
LIN TV Corp. make a shortfall loan to cover the interest
payment, an event of default would occur under the note and GECC
could accelerate the maturity of the entire amount due under the
note. Other than the acceleration of the principal amount of the
note upon an event of default, prepayment of the principal of
the note is prohibited prior to its stated maturity.

We may be required to pay substantial
penalties to the holders of our 2.50% Exchangeable Senior
Subordinated Debentures in the future if we are unable to
maintain an effective registration statement.

In accordance with the terms of the registration
rights agreements relating to the issuance of our 2.50%
Exchangeable Senior Subordinated Debentures, we are required to
pay substantial penalties to a holder of these debt instruments
under specified circumstances, including, the failure to
maintain an effective registration statement relating to the
resale of the debentures or the shares of Class A common
stock issuable upon conversion of the debentures for more than
brief intervals.

These penalties are generally paid based on a
percentage of the outstanding principal amount of the
indebtedness or a percentage of the value of the underlying
Class A common stock.

Risks Related to Our Industry

Any potential hostilities or terrorist attacks
may affect our revenues and results of operations.

During each of the three and six month periods
ended June 30, 2003, we experienced a loss of advertising
revenue and incurred additional broadcasting expenses due to the
initiation of military action in Iraq. The military action
disrupted our television stations regularly scheduled
programming and some of our clients rescheduled or delayed
advertising campaigns to avoid being associated with war
coverage. We expect that if the United States of America engages
in other foreign hostilities or there is a terrorist attack
against the United States of America, we may lose additional
advertising revenue and incur increased broadcasting expenses
due to further pre-emption, delay or cancellation of advertising
campaigns and the increased costs of providing coverage of such
events. We cannot predict the extent and duration of any future
disruption to

36



---



##### Table of Contents



our programming schedule, the amount of
advertising revenue that would be lost or delayed or the amount
by which our broadcasting expenses would increase as a result.
The loss of revenue and increased expenses has negatively
affected, and could negatively affect in the future, our results
of operations.


Our industry is subject to significant
syndicated and other programming costs, and increased
programming costs could adversely affect our operating
results.

Our industry is subject to significant syndicated
and other programming costs. We may be exposed in the future to
increased programming costs which may adversely affect our
operating results. We often acquire program rights two or three
years in advance, making it difficult for us to accurately
predict how a program will perform. In some instances, we may
have to replace programs before their costs have been fully
amortized, resulting in write-offs that increase station
operating costs.

Recently-enacted campaign finance legislation
and pending election law reform proposals may substantially
limit political advertising, upon which we heavily
rely.

Recently-enacted campaign finance legislation
restricts spending by candidates, political parties, independent
groups and others on political advertising and imposes
significant reporting and other burdens on political
advertising. The legislation became effective in November 2002.
The effect of the legislation on the amount and timing of
political advertising expenditures will depend in large part on
regulations and rulings yet to be promulgated by the Federal
Election Commission but it could have the effect of diminishing
advertising expenditures on broadcast television stations. We
are unable to predict the impact on our business of the new
legislation or the timing or outcome of any Federal Election
Commission determinations.

Changes in Federal Communication Commission
ownership rules through FCC action, judicial review or federal
legislation may limit our ability to continue operating stations
under local marketing agreements, may prevent us from obtaining
ownership of the stations we currently operate under local
marketing agreements and/or may preclude us from obtaining the
full economic value of one or more of our two-station operations
upon a sale, merger or other similar transaction transferring
ownership of such station or stations.

FCC ownership rules currently impose significant
limitations on the ability of broadcast licensees to have
attributable interests in multiple media properties. These
restrictions include a rule prohibiting one company from owning
broadcast television stations with service areas encompassing
more than an aggregate 39% share of national television
households. The restrictions also include a variety of local
limits on media ownership. The restrictions include an ownership
limit of one television station in most medium and smaller
television markets and two stations in most larger markets,
known as the television duopoly rule. The regulations also
include a prohibition on the common ownership of a newspaper and
television station in the same market (newspaper-television
cross-ownership), limits on common ownership of radio and
television stations in the same market (radio-television station
ownership) and limits on radio ownership of four to eight radio
stations in a local market.

In 2002, the United States Court of Appeals for
the District of Columbia Circuit found three of the FCCs
decisions with respect to three of its ownership rules,
including the then-35% household limit on national television
ownership, the television duopoly rule and a prohibition on
ownership of television broadcast stations and cable systems in
the same market to be arbitrary and capricious. The court
vacated the cable-television cross-ownership rule and remanded
the national cap and television duopoly rule to the Commission
for further action. In 2003, the FCC voted substantially to
amend many of its ownership rules. The FCC raised the national
television ownership limit from 35% to 45%. The television
duopoly rule was relaxed to permit ownership of up to three
stations in certain large markets and two stations in many
mid-sized markets, provided that no more than one of the
co-owned stations was to be among the top four in audience share
in the market. In addition, the newspaper-television
cross-ownership prohibition was restricted to smaller markets
(those with fewer than four television stations). A new local
cross-ownership regulation was adopted which

37



---



##### Table of Contents



precluded ownership of certain combinations of
television and radio stations and newspapers in markets with
fewer than nine television stations.


With respect to the television duopoly rule, the
Commission declared that it would grant waivers of the top-four
restriction under certain circumstances. It also held that
two-station combinations which were not in conformance with the
amended rule, e.g., where both stations were among the top four
stations in the local markets in audience share, would not have
to be divested. However, the Commission also determined that a
non-conforming combination could not be transferred jointly
either as a separate asset or through the transfer of control of
the licensee, except by obtaining a waiver of the rule upon each
transfer or by sale to certain eligible small business entities.
The Commission also determined that it would continue to
grandfather local marketing agreements entered into prior to
November 5, 1996, such as our local marketing agreements in
Austin, Texas, and Providence, Rhode Island, until the
conclusion of a further ownership review rulemaking to be
initiated later in 2004, which would address the question of
whether and under what circumstances the agreements would be
permitted to continue.

The amended rules were appealed to the United
States Court of Appeals for the Third Circuit by multiple
parties. The Third Circuit stayed the effectiveness of the rules
pending resolution of the appeal, a stay which remains in place.
On January 23, 2004, the national ownership cap was amended
legislatively by Congress fixing the cap at an aggregate reach
of 39% of national households. On June 24, 2004, the Third
Circuit ruled that the national cap legislation had mooted the
appeal of the Commissions amended rule. The Third Circuit
also ruled that the Commissions decisions amending the
television duopoly rule, the newspaper-broadcast cross-ownership
rule, the radio-television cross-ownership rule and the local
radio station ownership rule were for the most part arbitrary
and capricious and remanded the rules to the FCC for further
revision. The time periods for motions for reconsideration by
the Third Circuit and for appeal to the United States Supreme
Court have not yet run. We are unable to predict whether such
motions and/or appeals will be filed or the outcome of any such
motions and/or appeals.

Nor are we able to predict the timing or outcome
of any FCC deliberations upon remand after the judicial appeals
have been exhausted. Should the FCCs amended rules
ultimately become effective, attractive opportunities may arise
for additional television station and other media acquisitions.
But these changes also create additional competition for us from
other entities, such as national broadcast networks, large
station groups, newspaper chains and cable operators who may be
better positioned to take advantage of such changes and benefit
from the resulting operating synergies both nationally and in
specific markets.

Should the new television duopoly rule become
effective, we may be able to acquire the ownership of one or
both of the stations in Austin, Texas, and Providence, Rhode
Island, which we currently operate under local marketing
agreements and which are subject to purchase option agreements
entered into by our subsidiaries. Any such acquisition would be
subject to the amended duopoly rules restriction on
ownership of more than one top-four station in a market. Should
we have to seek a waiver of the new rule in either case because
the second station is among the top four in audience share,
there is no assurance that we will be successful in obtaining
it. Should a waiver be required and obtained, or should we
succeed in elevating to top-four audience status the second
station in any of the other markets in which we currently have
two stations, we will be unable to transfer that two-station
combination, either through an asset transfer or a transfer of
control of us (or the applicable licensee subsidiary), without
grant of another waiver or sale to an eligible small business
entity. Moreover, should we be unable to obtain a waiver, there
is no assurance that the grandfathering of our local marketing
agreements will be permitted beyond the conclusion of the 2004
rulemaking. In the first six months of 2004 we had net revenues
of $10.1 million, or 5.7%, of our total net revenues,
attributable to those local marketing agreements.

Changes in technology may impact our long-term
success and ability to compete.

The Federal Communications Commission has adopted
rules for implementing advanced television, commonly referred to
as digital television, in the United States of
America. Our conversion to digital television requires
additional capital expenditures, which we anticipate will be
approximately $6.9 million in 2004, and operating costs.
Implementation of digital television will improve the technical
quality of

38



---



##### Table of Contents



over-the-air broadcast television. It is
possible, however, that conversion to digital operations may
reduce a stations geographical coverage area. We believe
that digital television is essential to our long-term viability
and the broadcast industry, but we cannot predict the precise
effect digital television might have on our business. The FCC
has levied fees on broadcasters with respect to non-broadcast
uses of digital channels, including data transmissions or
subscriber services. Further advances in technology may also
increase competition for household audiences and advertisers. We
are unable to predict the effect that technological changes will
have on the broadcast television industry or the future results
of our operations.







|        |                                                               
|------- | --------------------------------------------------------------
|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 $198.0 million
outstanding as of June 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
June 30, 2004 would result in an estimated
$2.0 million increase in annualized interest expense
assuming a constant balance outstanding of $198.0 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 $3.6 million and $4.6 million
for the three and six months ended June 30, 2004.

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 June 30, 2004, our chief executive
officer and persons performing the functions of a 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.There were no significant
changes in our internal controls or in other factors that could
significantly affect these controls during the quarter ended
June 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.

39



---



##### Table of Contents








|        |                                                         
|------- | --------------------------------------------------------
|Item 4. | Submission of Matters to a Vote of Security
    Holders.

LIN TV Corp. held its 2004 Annual Meeting of
Stockholders on May 11, 2004. Each of the following matters
were approved by the stockholders by the following votes:

Proposal 1  The election of two
members to the Board of Directors to serve as Class I
Directors, each for a term of three years.

|                         |  |      |            |           |  |                   |         |  |  |  |   |  |  |  |  | 
|------------------------ |  | ---- | ---------- | --------- |  | ----------------- | ------- |  |  |  | - |  |  |  |  | 
|Nominees:                |  | For: |            | Withheld: |  | Broker Non-Votes: |         | 
|                         |  |      |            |           |  |                   |         | 
|William S. Banowsky, Jr. |  |      | 86,175,143 |           |  |                   | 470,747 |  |  |  | 0 |  |  |  |  | 
|William H. Cunningham    |  |      | 86,175,143 |           |  |                   | 470,747 |  |  |  | 0 |  |  |  |  | 

Proposal 2  The approval of an
amendment to the Corporations Second Amended and Restated
Certificate of Incorporation to cause the number of directors to
be established by the Corporations Board of Directors.

| |  |      |            |          |  |          |           |                   |  |  |        |  |  |  |   | 
| |  | ---- | ---------- | -------- |  | -------- | --------- | ----------------- |  |  | ------ |  |  |  | - | 
| |  | For: |            | Against: |  | Abstain: |           | Broker Non-Votes:
| |  |      |            |          |  |          |           |                  
| |  |      | 85,337,529 |          |  |          | 1,380,336 |                   |  |  | 75,552 |  |  |  | 0 | 

Proposal 3  The ratification of
the selection of PricewaterhouseCoopers LLP as
LIN TVs independent accountants for the fiscal year
ending December 31, 2003.

| |  |      |            |          |  |          |         |                   |  |  |        |  |  |  |   | 
| |  | ---- | ---------- | -------- |  | -------- | ------- | ----------------- |  |  | ------ |  |  |  | - | 
| |  | For: |            | Against: |  | Abstain: |         | Broker Non-Votes:
| |  |      |            |          |  |          |         |                  
| |  |      | 86,432,243 |          |  |          | 287,177 |                   |  |  | 73,997 |  |  |  | 0 | 






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

Exhibits:

| |      |  |  |                                                                                                                                                                               
| | ---- |  |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 3.1  |  |  | Second Amended and Restated Certificate of
    Incorporation of LIN TV Corp., as amended.                                                                                     
| | 3.2  |  |  | Second Amended and Restated Bylaws of LIN TV
    Corp., as amended.                                                                                                           
| | 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 Controller of LIN TV Corp.                                                                 
| | 31.3 |  |  | Certification pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002 of the Treasurer of LIN TV Corp.                                                                  
| | 31.4 |  |  | Certification pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002 of the Vice President of Finance of
    LIN TV Corp.                                              
| | 31.5 |  |  | Certification pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002 of the Chief Executive Officer of LIN
    Television Corporation.                                 
| | 31.6 |  |  | Certification pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002 of the Controller of LIN Television
    Corporation.                                              
| | 31.7 |  |  | Certification pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002 of the Treasurer of LIN Television
    Corporation.                                               
| | 31.8 |  |  | Certification pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002 of the Vice President of Finance 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 Financial Officer and
    Principal Financial Officers of LIN Television Corporation.

40



---



##### Table of Contents



Reports on Form 8-K:

On May 10, 2004, the Company furnished a
Current Report on Form 8-K dated May 10, 2004 under
Item 12, in connection with the announcement of the
Companys updated financial results for the quarter ended
March 31, 2004 to reflect the revision of the cumulative
effect of a change in accounting principle.

On April 29, 2004, the Company furnished a
Current Report on Form 8-K dated April 29, 2004 under
Item 12, in connection with the announcement of the
Companys financial results for the quarter ended
March 31, 2004.

41



---



##### 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/ WILLIAM A. CUNNINGHAM

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

Dated: May 9, 2004

42



---



##### Table of Contents











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

|                                                         |  |  |    | 
|-------------------------------------------------------- |  |  | -- | 
|LIN Television
    Corporation                          |  |  |    | 
|Condensed Consolidated
    Balance Sheets                |  |  | 44 | 
|Condensed Consolidated
    Statements of Operations      |  |  | 45 | 
|Condensed Consolidated
    Statements of Cash Flows      |  |  | 46 | 
|Notes to Condensed
    Consolidated Financial Statements |  |  | 47 | 

43



---



##### Table of Contents






LIN TELEVISION CORPORATION

CONDENSED CONSOLIDATED BALANCE
SHEETS

|                                                                                                                    |                                                                 |                       |           |              |  |   |           |           | 
|------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------- | --------------------- | --------- | ------------ |  | - | --------- | --------- | 
|                                                                                                                    |                                                                 | June 30,              |           | December 31,
|                                                                                                                    |                                                                 | 2004                  |           | 2003        
|                                                                                                                    |                                                                 |                       |           |             
|                                                                                                                    |                                                                 | (Unaudited)           |           |             
|                                                                                                                    |                                                                 |                      
|                                                                                                                    |                                                                 | (In thousands, except
|                                                                                                                    |                                                                 | share data)          
|ASSETS                                                                                                             
|Current assets:                                                                                                     |                                                                 |                       |           |              |  |   |           |          
|Cash and cash equivalents                                                                                           |                                                                 | $                     | 15,511    |              |  | $ | 9,475     |          
|Accounts receivable, less allowance for doubtful
    accounts (2004  $1,173; 2003  $1,698)                        |                                                                 |                       | 70,226    |              |  |   | 72,340    |          
|Program rights                                                                                                      |                                                                 |                       | 9,974     |              |  |   | 17,661    |          
|Other current assets                                                                                                |                                                                 |                       | 6,903     |              |  |   | 3,216     |          
|                                                                                                                    |                                                                 |                       |           |              |  |   |           |          
|                                                                                                                    | Total current assets                                            |                       |           | 102,614      |  |   |           | 102,692   | 
|Property and equipment, net                                                                                         |                                                                 |                       | 196,917   |              |  |   | 203,049   |          
|Deferred financing costs                                                                                            |                                                                 |                       | 12,462    |              |  |   | 14,332    |          
|Equity investments                                                                                                  |                                                                 |                       | 65,837    |              |  |   | 77,305    |          
|Program rights                                                                                                      |                                                                 |                       | 9,950     |              |  |   | 11,444    |          
|Goodwill                                                                                                            |                                                                 |                       | 583,091   |              |  |   | 586,269   |          
|Broadcast licenses                                                                                                  |                                                                 |                       | 1,119,521 |              |  |   | 1,102,708 |          
|Other intangible assets, net                                                                                        |                                                                 |                       | 2,657     |              |  |   | 3,289     |          
|Other assets                                                                                                        |                                                                 |                       | 15,215    |              |  |   | 14,822    |          
|                                                                                                                    |                                                                 |                       |           |              |  |   |           |          
|                                                                                                                    | Total Assets                                                    |                       | $         | 2,108,264    |  |   | $         | 2,115,910 | 
|                                                                                                                    |                                                                 |                       |           |              |  |   |           |          
|                                                                                                                   
|LIABILITIES, PREFERRED STOCK AND
    STOCKHOLDERS EQUITY                                                          
|Current liabilities:                                                                                                |                                                                 |                       |           |              |  |   |           |          
|Current portion of long-term debt                                                                                   |                                                                 | $                     | 37,000    |              |  | $ | 7,000     |          
|Accounts payable                                                                                                    |                                                                 |                       | 5,928     |              |  |   | 7,169     |          
|Accrued income taxes                                                                                                |                                                                 |                       | 111       |              |  |   | 320       |          
|Accrued interest expense                                                                                            |                                                                 |                       | 8,902     |              |  |   | 9,846     |          
|Accrued sales volume discount                                                                                       |                                                                 |                       | 2,782     |              |  |   | 6,075     |          
|Other accrued expenses                                                                                              |                                                                 |                       | 17,478    |              |  |   | 13,423    |          
|Program obligations                                                                                                 |                                                                 |                       | 15,797    |              |  |   | 23,042    |          
|                                                                                                                    |                                                                 |                       |           |              |  |   |           |          
|                                                                                                                    | Total current liabilities                                       |                       |           | 87,998       |  |   |           | 66,875    | 
|Long-term debt, excluding current portion                                                                           |                                                                 |                       | 632,766   |              |  |   | 693,367   |          
|Deferred income taxes, net                                                                                          |                                                                 |                       | 536,416   |              |  |   | 527,588   |          
|Program obligations                                                                                                 |                                                                 |                       | 9,379     |              |  |   | 11,640    |          
|Other liabilities                                                                                                   |                                                                 |                       | 47,438    |              |  |   | 54,306    |          
|                                                                                                                    |                                                                 |                       |           |              |  |   |           |          
|                                                                                                                    | Total liabilities                                               |                       |           | 1,313,997    |  |   |           | 1,353,776 | 
|                                                                                                                    |                                                                 |                       |           |              |  |   |           |          
|Preferred stock of Banks Broadcasting, Inc.
    $0.01 par value 173,822 issued and outstanding at
    June 30, 2004 |                                                                 |                       | 14,666    |              |  |   |          |          
|                                                                                                                    |                                                                 |                       |           |              |  |   |           |          
|Stockholders equity:                                                                                               |                                                                 |                       |           |              |  |   |           |          
|Common stock, $0.01 par value:
    1,000 shares authorized, issued and outstanding                                  |                                                                 |                       |          |              |  |   |          |          
|Additional paid-in capital                                                                                          |                                                                 |                       | 1,068,885 |              |  |   | 1,067,398 |          
|Accumulated deficit                                                                                                 |                                                                 |                       | (278,825  | )            |  |   | (294,805  | )        
|Accumulated other comprehensive loss                                                                                |                                                                 |                       | (10,459   | )            |  |   | (10,459   | )        
|                                                                                                                    |                                                                 |                       |           |              |  |   |           |          
|                                                                                                                    | Total stockholders equity                                      |                       |           | 779,601      |  |   |           | 762,134   | 
|                                                                                                                    |                                                                 |                       |           |              |  |   |           |          
|                                                                                                                    | Total liabilities, preferred stock and
    stockholders equity |                       | $         | 2,108,264    |  |   | $         | 2,115,910 | 
|                                                                                                                    |                                                                 |                       |           |              |  |   |           |          

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

44



---



##### Table of Contents



LIN TELEVISION CORPORATION



CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS


|                                                                                                                                                                                             |                                                                                                                                                                                                                                                              |                                              |        |                  |   |      |         |        |   |   |         |        |   |   |         |        |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------- | ------ | ---------------- | - | ---- | ------- | ------ | - | - | ------- | ------ | - | - | ------- | ------ | -
|                                                                                                                                                                                             |                                                                                                                                                                                                                                                              |                                              |        |                 
|                                                                                                                                                                                             |                                                                                                                                                                                                                                                              | Three Months Ended                           |        | Six Months Ended
|                                                                                                                                                                                             |                                                                                                                                                                                                                                                              | June 30,                                     |        | June 30,        
|                                                                                                                                                                                             |                                                                                                                                                                                                                                                              |                                              |        |                 
|                                                                                                                                                                                             |                                                                                                                                                                                                                                                              | 2004                                         |        | 2003             |   | 2004 |         | 2003  
|                                                                                                                                                                                             |                                                                                                                                                                                                                                                              |                                              |        |                  |   |      |         |       
|                                                                                                                                                                                             |                                                                                                                                                                                                                                                              |                                             
|                                                                                                                                                                                             |                                                                                                                                                                                                                                                              | (In thousands, except per share information)
|                                                                                                                                                                                             |                                                                                                                                                                                                                                                              | (unaudited)                                 
|Net revenues                                                                                                                                                                                 |                                                                                                                                                                                                                                                              | $                                            | 96,338 |                  |   | $    | 89,204  |        |   | $ | 176,182 |        |   | $ | 162,831 |       
|Operating costs and expenses:                                                                                                                                                                |                                                                                                                                                                                                                                                              |                                              |        |                  |   |      |         |        |   |   |         |        |   |   |         |       
|                                                                                                                                                                                             | Direct operating (excluding depreciation of
    $7.8 million and $7.6 million for the three months
    ended June 30, 2004 and 2003, respectively and
    $15.3 million and $15.4 million for the six months
    ended June 30, 2004 and 2003, respectively) |                                              |        | 25,390           |   |      |         | 24,746 |   |   |         | 50,020 |   |   |         | 48,963 |  
|                                                                                                                                                                                             | Selling, general and administrative                                                                                                                                                                                                                          |                                              |        | 24,488           |   |      |         | 22,478 |   |   |         | 46,988 |   |   |         | 43,231 |  
|                                                                                                                                                                                             | Amortization of program rights                                                                                                                                                                                                                               |                                              |        | 5,911            |   |      |         | 5,296  |   |   |         | 11,635 |   |   |         | 10,496 |  
|                                                                                                                                                                                             | Corporate                                                                                                                                                                                                                                                    |                                              |        | 3,930            |   |      |         | 4,182  |   |   |         | 8,028  |   |   |         | 8,102  |  
|                                                                                                                                                                                             | Restructuring charge                                                                                                                                                                                                                                         |                                              |        |                 |   |      |         | 102    |   |   |         |       |   |   |         | 102    |  
|                                                                                                                                                                                             | Depreciation and amortization of intangible assets                                                                                                                                                                                                           |                                              |        | 8,041            |   |      |         | 7,919  |   |   |         | 15,817 |   |   |         | 15,907 |  
|                                                                                                                                                                                             |                                                                                                                                                                                                                                                              |                                              |        |                  |   |      |         |        |   |   |         |        |   |   |         |       
|Total operating costs                                                                                                                                                                        |                                                                                                                                                                                                                                                              |                                              | 67,760 |                  |   |      | 64,723  |        |   |   | 132,488 |        |   |   | 126,801 |       
|                                                                                                                                                                                             |                                                                                                                                                                                                                                                              |                                              |        |                  |   |      |         |        |   |   |         |        |   |   |         |       
|Operating income                                                                                                                                                                             |                                                                                                                                                                                                                                                              |                                              | 28,578 |                  |   |      | 24,481  |        |   |   | 43,694  |        |   |   | 36,030  |       
|Other (income) expense:                                                                                                                                                                      |                                                                                                                                                                                                                                                              |                                              |        |                  |   |      |         |        |   |   |         |        |   |   |         |       
|                                                                                                                                                                                             | Interest expense                                                                                                                                                                                                                                             |                                              |        | 11,957           |   |      |         | 15,233 |   |   |         | 23,696 |   |   |         | 35,754 |  
|                                                                                                                                                                                             | Investment income                                                                                                                                                                                                                                            |                                              |        | (85              | ) |      |         | (370   | ) |   |         | (170   | ) |   |         | (750   | )
|                                                                                                                                                                                             | Share of income in equity investments                                                                                                                                                                                                                        |                                              |        | (2,597           | ) |      |         | (1,689 | ) |   |         | (2,764 | ) |   |         | (1,400 | )
|                                                                                                                                                                                             | Minority interest in loss of Banks Broadcasting,
    Inc.                                                                                                                                                                                                    |                                              |        | (245             | ) |      |         |       |   |   |         | (245   | ) |   |         |       |  
|                                                                                                                                                                                             | Gain on derivative instruments                                                                                                                                                                                                                               |                                              |        | (3,630           | ) |      |         | (4,760 | ) |   |         | (4,620 | ) |   |         | (4,760 | )
|                                                                                                                                                                                             | Loss on extinguishment of debt                                                                                                                                                                                                                               |                                              |        | 1,510            |   |      |         | 23,580 |   |   |         | 4,447  |   |   |         | 53,105 |  
|                                                                                                                                                                                             | Other, net                                                                                                                                                                                                                                                   |                                              |        | 339              |   |      |         | 744    |   |   |         | 220    |   |   |         | 791    |  
|                                                                                                                                                                                             |                                                                                                                                                                                                                                                              |                                              |        |                  |   |      |         |        |   |   |         |        |   |   |         |       
|Total other expense, net                                                                                                                                                                     |                                                                                                                                                                                                                                                              |                                              | 7,249  |                  |   |      | 32,738  |        |   |   | 20,564  |        |   |   | 82,740  |       
|Income (loss) from continuing operations before
    provision for income taxes and cumulative effect of change in
    accounting principle                                                   |                                                                                                                                                                                                                                                              |                                              | 21,329 |                  |   |      | (8,257  | )      |   |   | 23,130  |        |   |   | (46,710 | )     
|Provision for income taxes                                                                                                                                                                   |                                                                                                                                                                                                                                                              |                                              | 5,403  |                  |   |      | 2,440   |        |   |   | 9,200   |        |   |   | 4,862   |       
|                                                                                                                                                                                             |                                                                                                                                                                                                                                                              |                                              |        |                  |   |      |         |        |   |   |         |        |   |   |         |       
|Income (loss) from continuing operations before
    discontinued operations and cumulative effect of change in
    accounting principle                                                      |                                                                                                                                                                                                                                                              |                                              | 15,926 |                  |   |      | (10,697 | )      |   |   | 13,930  |        |   |   | (51,572 | )     
|Discontinued operations:                                                                                                                                                                     |                                                                                                                                                                                                                                                              |                                              |        |                  |   |      |         |        |   |   |         |        |   |   |         |       
|                                                                                                                                                                                             | Loss (income) from discontinued operations, net
    of tax provision of $104 and $206 for the three months ended
    June 30, 2004 and 2003, respectively, and $311 and $412 for
    the six months ended June 30, 2004 and 2003, respectively               |                                              |        | 25               |   |      |         | (104   | ) |   |         | (44    | ) |   |         | (112   | )
|Loss from sale of discontinued operations, net of
    tax benefit of $1,094 for the three and six months ended
    June 30, 2004 and $0 for the three and six months ended
    June 30, 2003 |                                                                                                                                                                                                                                                              |                                              | 1,284  |                  |   |      | 652     |        |   |   | 1,284   |        |   |   | 652     |       
|Cumulative effect of change in accounting
    principle, net of tax effect of $0                                                                                                             |                                                                                                                                                                                                                                                              |                                              |       |                  |   |      |        |        |   |   | (3,290  | )      |   |   |        |       
|                                                                                                                                                                                             |                                                                                                                                                                                                                                                              |                                              |        |                  |   |      |         |        |   |   |         |        |   |   |         |       
|Net income (loss)                                                                                                                                                                            |                                                                                                                                                                                                                                                              | $                                            | 14,617 |                  |   | $    | (11,245 | )      |   | $ | 15,980  |        |   | $ | (52,112 | )     
|                                                                                                                                                                                             |                                                                                                                                                                                                                                                              |                                              |        |                  |   |      |         |        |   |   |         |        |   |   |         |       

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

45



---



##### Table of Contents



LIN TELEVISION CORPORATION



CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS


|                                                                                                                               |  |                  |         |      |  |   |          |  
|------------------------------------------------------------------------------------------------------------------------------ |  | ---------------- | ------- | ---- |  | - | -------- | -
|                                                                                                                               |  |                 
|                                                                                                                               |  | Six Months Ended
|                                                                                                                               |  | June 30,        
|                                                                                                                               |  |                 
|                                                                                                                               |  | 2004             |         | 2003
|                                                                                                                               |  |                  |         |     
|                                                                                                                               |  |                 
|                                                                                                                               |  | (In thousands)  
|                                                                                                                               |  | (Unaudited)     
|Net cash provided by operating
    activities                                                                                  |  | $                | 34,552  |      |  | $ | 11,601   |  
|INVESTING ACTIVITIES:                                                                                                          |  |                  |         |      |  |   |          |  
|Capital expenditures                                                                                                           |  |                  | (10,012 | )    |  |   | (10,187  | )
|Proceeds from disposals of property and equipment                                                                              |  |                  | 30      |      |  |   | 31       |  
|Proceeds from sale of broadcast licenses and
    related operating assets                                                      |  |                  | 24,000  |      |  |   | 10,000   |  
|Investment in equity investments                                                                                               |  |                  | (650    | )    |  |   |         |  
|Capital distributions from equity investments                                                                                  |  |                  | 3,260   |      |  |   | 3,260    |  
|Acquisition of broadcast licenses                                                                                              |  |                  | (9,152  | )    |  |   |         |  
|Other, investments and deposits                                                                                                |  |                  | (28     | )    |  |   |         |  
|Proceeds from liquidation of short-term
    investments                                                                        |  |                  |        |      |  |   | 23,691   |  
|                                                                                                                               |  |                  |         |      |  |   |          |  
|Net cash provided by investing
    activities                                                                                  |  |                  | 7,448   |      |  |   | 26,795   |  
|                                                                                                                               |  |                  |         |      |  |   |          |  
|FINANCING ACTIVITIES:                                                                                                          |  |                  |         |      |  |   |          |  
|Net proceeds on exercises of employee stock
    options and phantom stock units and employee stock purchase plan
    issuances |  |                  | 1,256   |      |  |   | 1,223    |  
|Proceeds from long-term debt                                                                                                   |  |                  |        |      |  |   | 325,000  |  
|Proceeds from Senior Credit Facilities                                                                                         |  |                  |        |      |  |   | 175,000  |  
|Financing costs associated with proceeds from
    previously issued long-term debt                                             |  |                  | (144    | )    |  |   | (9,798   | )
|Net proceeds from revolver debt                                                                                                |  |                  | 8,000   |      |  |   | 50,000   |  
|Principal payments on long-term debt                                                                                           |  |                  | (42,060 | )    |  |   | (676,000 | )
|Cash expenses associated with early
    extinguishment of debt                                                                 |  |                  | (3,016  | )    |  |   | (26,056  | )
|                                                                                                                               |  |                  |         |      |  |   |          |  
|Net cash used in financing
    activities                                                                                      |  |                  | (35,964 | )    |  |   | (160,631 | )
|                                                                                                                               |  |                  |         |      |  |   |          |  
|Net increase (decrease) in cash and cash
    equivalents                                                                       |  |                  | 6,036   |      |  |   | (122,235 | )
|Cash and cash equivalents at the beginning of the
    period                                                                   |  |                  | 9,475   |      |  |   | 143,860  |  
|                                                                                                                               |  |                  |         |      |  |   |          |  
|Cash and cash equivalents at the end of the
    period                                                                         |  | $                | 15,511  |      |  | $ | 21,625   |  
|                                                                                                                               |  |                  |         |      |  |   |          |  

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

46



---



##### 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,
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.

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. 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 |        | Six Months Ended
|                                                                                                                                                       |  | June 30,           |        | June 30,        
|                                                                                                                                                       |  |                    |        |                 
|                                                                                                                                                       |  | 2004               |        | 2003             |  | 2004 |         | 2003
|                                                                                                                                                       |  |                    |        |                  |  |      |         |     
|Net income (loss), as reported                                                                                                                         |  | $                  | 14,617 |                  |  | $    | (11,245 | )    |  | $ | 15,980 |   |  | $ | (52,112 | )
|Add: Stock-based employee compensation expense,
    as reported, net of related tax effect                                                             |  |                    | 23     |                  |  |      |        |      |  |   | 23     |   |  |   |        |  
|Deduct: Total stock-based employee compensation
    expense determined under the fair value based method for all
    awards, net of related tax effect |  |                    | (739   | )                |  |      | (710    | )    |  |   | (1,500 | ) |  |   | (1,446  | )
|                                                                                                                                                       |  |                    |        |                  |  |      |         |      |  |   |        |   |  |   |         |  
|Pro forma net income (loss)                                                                                                                            |  | $                  | 13,901 |                  |  | $    | (11,955 | )    |  | $ | 14,503 |   |  | $ | (53,558 | )
|                                                                                                                                                       |  |                    |        |                  |  |      |         |      |  |   |        |   |  |   |         |  

47



---



##### Table of Contents



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 six months ended
June 30, 2004 and 2003, respectively:

|                               |  |                    |              |                  |  |      |              |      |  |  |               |  |  |  |              | 
|------------------------------ |  | ------------------ | ------------ | ---------------- |  | ---- | ------------ | ---- |  |  | ------------- |  |  |  | ------------ | 
|                               |  |                    |              |                 
|                               |  | Three Months Ended |              | Six Months Ended
|                               |  | June 30,           |              | June 30,        
|                               |  |                    |              |                 
|                               |  | 2004               |              | 2003             |  | 2004 |              | 2003
|                               |  |                    |              |                  |  |      |              |     
|Volatility                     |  |                    | 24%          |                  |  |      | 30%          |      |  |  | 24%           |  |  |  | 30%          | 
|Risk-free interest rates       |  |                    | 2.0 - 3.2%   |                  |  |      | 1.5 - 3.3%   |      |  |  | 2.0 - 4.4%    |  |  |  | 1.5 - 3.3%   | 
|Weighted average expected life |  |                    | 3 - 6  years |                  |  |      | 2 - 6  years |      |  |  | 3 - 10  years |  |  |  | 2 - 6  years | 
|Dividend yields                |  |                    | 0%           |                  |  |      | 0%           |      |  |  | 0%            |  |  |  | 0%           | 

Note 2  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 to Pilot TV Acquisition Corporation.

The operating results of this station for the
three and six month periods ended June 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 second quarter of 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 loss on the
sale of KRBC-TV and KACB-TV of $652,000 recorded during the
second quarter of 2003.

Note 3  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):

|                         |  |          |        |              |  |   |        | 
|------------------------ |  | -------- | ------ | ------------ |  | - | ------ | 
|                         |  | June 30, |        | December 31,
|                         |  | 2004     |        | 2003        
|                         |  |          |        |             
|Banks Broadcasting, Inc. |  | $        |       |              |  | $ | 11,297 | 
|NBC joint venture        |  |          | 55,621 |              |  |   | 55,758 | 
|WAND (TV) Partnership    |  |          | 10,216 |              |  |   | 10,250 | 
|                         |  |          |        |              |  |   |        | 
|                         |  | $        | 65,837 |              |  | $ | 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

48



---



##### Table of Contents



beneficiary of Banks Broadcasting under
FIN 46. As the primary beneficiary of Banks Broadcasting,
the Company has 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 EITF 02-5, 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 June 30, 2004.


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

|                                |                              |           |        |        | 
|------------------------------- | ---------------------------- | --------- | ------ | ------ | 
|                                |                              | March 31,
|                                |                              | 2004     
|                                |                              |          
|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 | 
|                                |                              |           |        |       
|                                |                              | $         | (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.

Banks Broadcasting has authorized
390,625 shares of preferred stock and has issued
347,645 shares of Series A Preferred Stock with a par
value of $0.01 per share.

Key rights associated with the preferred stock
include: (i) holders of the preferred stock receive an 8%
dividend, if declared; (ii) holders of the preferred stock
have the right to convert to common stock in the event of a
Triggering Event (discussed below); (iii) holders of the
preferred stock have no votes; (iv) while no holder of the
preferred stock controls the board of directors, there are
certain rights to force the sale of Banks Broadcasting and
holders of the preferred stock would share pro rata in the sale
proceeds.

Upon liquidation, winding up, or dissolution,
holders of the preferred stock will receive the greater of
$100 per share, plus all accrued but unpaid dividends, or
the amount such holder would receive upon liquidation and
assuming conversion to common stock.

49



---



##### Table of Contents



Triggering Events for conversion include:
(1) the sale of all or substantially all of the assets of
Banks Broadcasting, (2) the closing of an underwritten
public offering resulting in (i) net cash proceeds to Banks
Broadcasting of not less than $50.0 million and (ii) a
pre-money valuation of Banks Broadcasting of not less than two
and one-half times the aggregate purchase price for all shares
of the Preferred Stock; or (3) any merger or consolidation
or other reorganization of Banks Broadcasting with or into
another corporation in which Banks Broadcasting is not the
surviving entity.

No dividends had been declared on the
Series A Preferred Stock as of June 30, 2004.

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
$1.6 million and $3.3 million from the joint venture
in the three and six months ended June 30, 2004,
respectively and $1.6 million and $3.3 million in the
three and six months ended June 30, 2003, respectively.

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

|                 |  |                    |        |                  |  |      |        |      |  |   |        |  |  |   |        | 
|---------------- |  | ------------------ | ------ | ---------------- |  | ---- | ------ | ---- |  | - | ------ |  |  | - | ------ | 
|                 |  |                    |        |                 
|                 |  | Three Months Ended |        | Six Months Ended
|                 |  | June 30,           |        | June 30,        
|                 |  |                    |        |                 
|                 |  | 2004               |        | 2003             |  | 2004 |        | 2003
|                 |  |                    |        |                  |  |      |        |     
|Net revenues     |  | $                  | 47,234 |                  |  | $    | 43,576 |      |  | $ | 82,443 |  |  | $ | 76,497 | 
|Operating income |  |                    | 29,225 |                  |  |      | 26,028 |      |  |   | 47,558 |  |  |   | 42,692 | 
|Net income       |  |                    | 12,832 |                  |  |      | 9,675  |      |  |   | 15,325 |  |  |   | 10,662 | 

|                        |  |          |         |              |  |   |         | 
|----------------------- |  | -------- | ------- | ------------ |  | - | ------- | 
|                        |  | June 30, |         | December 31,
|                        |  | 2004     |         | 2003        
|                        |  |          |         |             
|Current assets          |  | $        | 21,950  |              |  | $ | 9,949   | 
|Non-current assets      |  |          | 240,740 |              |  |   | 237,469 | 
|Current liabilities     |  |          | 16,672  |              |  |   | 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. Amounts due to the Company from WAND (TV)
Partnership under this arrangement were approximately $71,000 as
of June 30, 2004. Amounts due from the Company to
WAND (TV) Partnership under this arrangement were $64,000
as of December 31, 2003. The following presents the
summarized financial information of the WAND (TV)
Partnership (in thousands):

|                        |  |                    |       |                  |  |      |       |      |  |   |       |   |  |   |       |  
|----------------------- |  | ------------------ | ----- | ---------------- |  | ---- | ----- | ---- |  | - | ----- | - |  | - | ----- | -
|                        |  |                    |       |                 
|                        |  | Three Months Ended |       | Six Months Ended
|                        |  | June 30,           |       | June 30,        
|                        |  |                    |       |                 
|                        |  | 2004               |       | 2003             |  | 2004 |       | 2003
|                        |  |                    |       |                  |  |      |       |     
|Net revenues            |  | $                  | 1,664 |                  |  | $    | 1,705 |      |  | $ | 3,297 |   |  | $ | 3,194 |  
|Operating (loss) income |  |                    | (54   | )                |  |      | 56    |      |  |   | (104  | ) |  |   | (70   | )
|Net (loss) income       |  |                    | (54   | )                |  |      | 47    |      |  |   | (103  | ) |  |   | (79   | )

50



---



##### Table of Contents



|                    |  |          |        |              |  |   |        | 
|------------------- |  | -------- | ------ | ------------ |  | - | ------ | 
|                    |  | June 30, |        | December 31,
|                    |  | 2004     |        | 2003        
|                    |  |          |        |             
|Current assets      |  | $        | 2,467  |              |  | $ | 2,013  | 
|Non-current assets  |  |          | 24,674 |              |  |   | 25,168 | 
|Current liabilities |  |          | 470    |              |  |   | 405    | 

Note 4  Intangible
Assets:

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

|                               |  |          |           |              |  |   |           |  
|------------------------------ |  | -------- | --------- | ------------ |  | - | --------- | -
|                               |  | June 30, |           | December 31,
|                               |  | 2004     |           | 2003        
|                               |  |          |           |             
|Amortized Intangible Assets:   |  |          |           |              |  |   |           |  
|LMA purchase options           |  | $        | 2,388     |              |  | $ | 2,388     |  
|Network affiliations           |  |          | 283       |              |  |   | 377       |  
|Income leases                  |  |          | 393       |              |  |   | 393       |  
|Other intangible assets        |  |          | 2,021     |              |  |   | 2,022     |  
|Accumulated amortization       |  |          | (2,428    | )            |  |   | (1,891    | )
|                               |  |          |           |              |  |   |           |  
|                               |  |          | 2,657     |              |  |   | 3,289     |  
|                               |  |          |           |              |  |   |           |  
|Unamortized Intangible Assets: |  |          |           |              |  |   |           |  
|Broadcast licenses             |  | $        | 1,119,521 |              |  | $ | 1,102,708 |  
|Goodwill                       |  |          | 583,091   |              |  |   | 586,269   |  
|                               |  |          |           |              |  |   |           |  
|                               |  |          | 1,702,612 |              |  |   | 1,688,977 |  
|                               |  |          |           |              |  |   |           |  
|Total intangible assets        |  | $        | 1,705,269 |              |  | $ | 1,692,266 |  
|                               |  |          |           |              |  |   |           |  

On January 14, 2004, the Company purchased
the broadcast license and certain assets of WIRS-TV in Yauco,
Puerto Rico from Marantha Christian Network. The total purchase
price of $4.5 million was funded by borrowings from our
revolving credit facility. A deposit on the purchase of WIRS-TV
of $226,000 was paid in the third quarter of 2003.

On May 6, 2004, the Company purchased the
broadcast license and certain assets of WTIN-TV in Ponce, Puerto
Rico from Laura Nicolau. The total purchase price of
$4.9 million was funded by borrowings from our revolving
credit facility.

The application of FIN 46 increased
broadcast licenses by $29.2 million for the consolidation
of the Banks Broadcasting licenses which occurred March 31,
2004. (see Note 4).

The sale of the broadcast license of WEYI-TV on
May 14, 2004 decreased broadcast licenses by
$18.8 million (see Note 2).

During the second quarter of 2004, the Company
recorded tax adjustments related to the Companys valuation
allowance on deferred tax assets that decreased broadcast
licenses by $3.1 million and decreased goodwill by
$3.2 million.

Amortization expense was $278,000 and $555,000
for the three and six months ended June 30, 2004,
respectively, and $276,000 and $551,000 for the same periods in
the prior year. This includes approximately $233,000 and
$467,000 of amortization expense recorded on the local marketing
agreement (LMA) purchase option for the three and
six months ended June 30, 2004, respectively, and $228,000
and $456,000 for the three and six months ended June 30,
2003, respectively. The Company expects that its remaining LMA
purchase option will be fully amortized in 2007. Also included
in the amortization expense is $45,000 and $89,000 of
amortization expense on network affiliation agreements and
income leases for the three and six months ended June 30,
2004, respectively, and $48,000 and $95,000 for the three and
six months ended June 30, 2003, respectively. The network
affiliation agreements will be fully

51



---



##### Table of Contents



amortized by their expiration dates, which range
from August 29, 2004 to June 30, 2006, and the income
leases will be fully amortized by November 2006.


Note 5  Debt:

Debt consisted of the following (in thousands):

|                                                                                                                                                                                                             |  |          |         |              |  |   |         | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------- | ------- | ------------ |  | - | ------- | 
|                                                                                                                                                                                                             |  | June 30, |         | December 31,
|                                                                                                                                                                                                             |  | 2004     |         | 2003        
|                                                                                                                                                                                                             |  |          |         |             
|Senior Credit Facilities                                                                                                                                                                                     |  | $        | 198,000 |              |  | $ | 193,500 | 
|$166,440 and $205,000 at June 30, 2004 and
    December 31, 2003, respectively, 8% Senior Notes due 2008
    (net of discount of $3,353 and $4,706 at June 30, 2004 and
    December 31, 2003, respectively) |  |          | 163,087 |              |  |   | 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 $16,321 and $18,427 at
    June 30, 2004 and December 31, 2003, respectively)                                   |  |          | 108,679 |              |  |   | 106,573 | 
|                                                                                                                                                                                                             |  |          |         |              |  |   |         | 
|Total debt                                                                                                                                                                                                   |  |          | 669,766 |              |  |   | 700,367 | 
|Less current portion                                                                                                                                                                                         |  |          | 37,000  |              |  |   | 7,000   | 
|                                                                                                                                                                                                             |  |          |         |              |  |   |         | 
|Total long-term debt                                                                                                                                                                                         |  | $        | 632,766 |              |  | $ | 693,367 | 
|                                                                                                                                                                                                             |  |          |         |              |  |   |         | 

During the six months ended June 30, 2004,
the Company drew down funds from its revolving credit facility
to repurchase $38.6 million of 8% Senior Notes due
2008 in a negotiated transaction with an institutional investor.
The Company incurred charges of $1.5 million and
$4.4 million during the three and six month ended
June 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 $30.0 million borrowed under
the revolving credit facility, which terminates March 31,
2005.

Note 6  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 $11,000 for the three and six months
ended June 30, 2004, and $23,000 and $38,000 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 $4,000 and
$9,000 for the three and six months ended June 30, 2004,
respectively, for various reimbursable expenses, and $6,000 and
$21,000 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 $100,000 for the three
and the six months ended June 30, 2003, respectively under
the management services agreement.

52



---



##### Table of Contents



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 $133,000 and $271,000 for the three
and the six months ended June 30, 2004, respectively, and
$121,000 and $244,000 for the same periods in the prior year.

The Company also incurred fees for
Spanish-to-English translation services provided by a company in
which the Company has an investment. Fees for these translation
services were approximately $46,000 for the three and six months
ended June 30, 2004.



|         |               
|-------- | --------------
|Note 7  | 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, but is recourse to the joint venture,
the Companys equity interests therein and ultimately to
LIN TV Corp., pursuant to a guarantee. 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 8  | 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.

53



---



##### Table of Contents



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

|                                   |  |                    |        |                  |  |      |        |      |  |   |        |   |  |   |        |  
|---------------------------------- |  | ------------------ | ------ | ---------------- |  | ---- | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                   |  |                    |        |                 
|                                   |  | Three Months Ended |        | Six Months Ended
|                                   |  | June 30,           |        | June 30,        
|                                   |  |                    |        |                 
|                                   |  | 2004               |        | 2003             |  | 2004 |        | 2003
|                                   |  |                    |        |                  |  |      |        |     
|Service cost                       |  | $                  | 500    |                  |  | $    | 457    |      |  | $ | 1,000  |   |  | $ | 914    |  
|Interest cost                      |  |                    | 1,401  |                  |  |      | 1,311  |      |  |   | 2,802  |   |  |   | 2,622  |  
|Expected return on plan assets     |  |                    | (1,450 | )                |  |      | (1,408 | )    |  |   | (2,900 | ) |  |   | (2,816 | )
|Amortization of prior service cost |  |                    | 39     |                  |  |      | 41     |      |  |   | 78     |   |  |   | 82     |  
|Amortization of net loss           |  |                    | 80     |                  |  |      | 63     |      |  |   | 160    |   |  |   | 126    |  
|                                   |  |                    |        |                  |  |      |        |      |  |   |        |   |  |   |        |  
|Net periodic benefit cost          |  | $                  | 570    |                  |  | $    | 464    |      |  | $ | 1,140  |   |  | $ | 928    |  
|                                   |  |                    |        |                  |  |      |        |      |  |   |        |   |  |   |        |  

As of June 30, 2004, the Company has
contributed $600,000 to the plan, and expects to contribute a
total of $1.2 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 funded approximately $407,000 of
SERP payments during the second quarter of 2004 and does not
anticipate any additional material SERP payments for the
remainder of 2004.

Note 9  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.

54