##### 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, 2005
 Commission file number: 001-31311
    
    Commission file number: 000-25206LIN TV Corp.
    
    LIN Television Corporation(Exact name of registrant as
    
    (Exact name of registrant asspecified in its charter)
    
    specified in its charter)Delaware
    
    Delaware(State or other jurisdiction of
    
    (State or other jurisdiction ofincorporation or organization)
    
    incorporation or organization)05-0501252
    
    13-3581627(I.R.S. Employer
    
    (I.R.S. EmployerIdentification No.)
    
    Identification No.)
 Four Richmond Square, Suite 200, Providence, Rhode Island 02906  (Address of principal executive offices)
 (401) 454-2880  (Registrants telephone number, including area code)
 þ o
 þ o




---



Table of Contents
 Part I. Financial InformationItem 1. Financial StatementsLIN TV Corp.Condensed Consolidated Balance Sheets
    
    
    2Condensed Consolidated Statements of Operations

    
    
    3Condensed Consolidated Statements of Cash Flows
    
    
    4Notes to Condensed Consolidated Financial Statements
    
    
    5(See separate index for financial statements of LIN Television Corporation)
    
    
    30Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
    
    
    14Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    25Item 4. Controls and Procedures
    
    
    25Part II. Other InformationItem 1. Legal Proceedings
    
    
    26Item 4 Submission of Matters to a Vote of Security Holders
    
    
    26Item 5. Other Information
    
    
    26Item 6. Exhibits
    
    
    27Signature Page
    
    
    29Certification Pursuant to Section 302 - CEO of LIN TV Corp.Certification Pursuant to Section 302 - CFO of LIN TV Corp.Certification Pursuant to Section 302 - CEO of LIN Television Corp.Certification Pursuant to Section 302 - CFO of LIN Television Corp.Certification Pursuant to Section 906 - CEO and CFO of LIN TV Corp.Certification Pursuant to Section 906 - CEO and CFO of LIN Television Corp.
  1




---



##### Table of Contents



PART I: FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 LIN TV CORP.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 June 30,
    
    December 31,2005
    
    2004(Unaudited)(In thousands, except share data)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    10,960
    
    
    $
    14,797Accounts receivable, less allowance for doubtful accounts (2005 - $1,499; 2004 - $1,450)
    
    
    75,343
    
    
    
    70,639Program rights
    
    
    15,125
    
    
    
    17,312Other current assets
    
    
    7,870
    
    
    
    3,790Total current assets
    
    
    109,298
    
    
    
    106,538Property and equipment, net
    
    
    200,919
    
    
    
    197,565Deferred financing costs
    
    
    13,639
    
    
    
    11,060Equity investments
    
    
    64,466
    
    
    
    65,813Program rights
    
    
    11,621
    
    
    
    12,165Other assets
    
    
    12,896
    
    
    
    16,043Goodwill
    
    
    615,997
    
    
    
    583,105Broadcast licenses and other intangible assets, net
    
    
    1,123,907
    
    
    
    1,066,135Total assets
    
    $
    2,152,743
    
    
    $
    2,058,424LIABILITIES, PREFERRED STOCK
AND STOCKHOLDERS EQUITYCurrent liabilities:Current portion of long-term debt
    
    $
    8,500
    
    
    $
    6,573Accounts payable
    
    
    5,745
    
    
    
    7,774Accrued interest expense
    
    
    5,018
    
    
    
    8,118Accrued sales volume discount
    
    
    2,460
    
    
    
    6,462Other accrued expenses
    
    
    16,465
    
    
    
    13,483Program obligations
    
    
    25,586
    
    
    
    23,278Total current liabilities
    
    
    63,774
    
    
    
    65,688Long-term debt, excluding current portion
    
    
    709,391
    
    
    
    626,268Deferred income taxes, net
    
    
    435,123
    
    
    
    445,695Program obligations
    
    
    15,763
    
    
    
    12,008Other liabilities
    
    
    56,441
    
    
    
    38,344Total liabilities
    
    
    1,280,492
    
    
    
    1,188,003Preferred stock of Banks Broadcasting, Inc., $0.01 par value, 179,322 and
173,822 issued and outstanding at June 30, 2005 and December 31, 2004, respectively
    
    
    14,723
    
    
    
    14,458Stockholders equity:Class A common stock, $0.01 par value, 100,000,000 shares authorized,
27,161,302 shares at June 30, 2005 and 26,946,183 shares at December 31, 2004,
issued and outstanding
    
    
    272
    
    
    
    269Class B common stock, $0.01 par value, 50,000,000 shares authorized, 23,502,059
shares at June 30, 2005 and 23,508,119 shares at December 31, 2004,
issued and outstanding; convertible into an equal number of shares of Class A or Class C
common stock
    
    
    235
    
    
    
    235Class C common stock, $0.01 par value, 50,000,000 shares authorized, 2 shares at
June 30, 2005 and December 31, 2004, issued and outstanding; convertible
into an equal number of shares of Class A common stock
    
    
    
    
    
    
    Additional paid-in capital
    
    
    1,073,603
    
    
    
    1,071,816Accumulated deficit
    
    
    (201,992
    )
    
    
    (201,767
    )Accumulated other comprehensive loss
    
    
    (14,590
    )
    
    
    (14,590
    )Total stockholders equity
    
    
    857,528
    
    
    
    855,963Total liabilities, preferred stock and stockholders equity
    
    $
    2,152,743
    
    
    $
    2,058,424
  2




---



##### Table of Contents



LIN TV CORP.
 
  Three Months Ended June 30,
    
    Six Months Ended June 30,2005
    
    2004
    
    2005
    
    2004(In thousands, except per share information)Net revenues
    
    $
    98,442
    
    
    $
    96,338
    
    
    $
    176,881
    
    
    $
    176,182Operating costs and expenses:Direct operating (excluding depreciation of $8.5 million and
$7.8 million for
the three months ended June 30, 2005 and 2004, respectively, and
$16.2
million and $15.3 million for the six months ended June 30, 2005
and 2004,
respectively)
    
    
    27,060
    
    
    
    25,390
    
    
    
    53,071
    
    
    
    50,020Selling, general and administrative
    
    
    26,884
    
    
    
    24,488
    
    
    
    51,646
    
    
    
    46,988Amortization of program rights
    
    
    6,534
    
    
    
    5,911
    
    
    
    12,389
    
    
    
    11,635Corporate
    
    
    5,099
    
    
    
    3,930
    
    
    
    10,354
    
    
    
    8,028Depreciation and amortization of intangible assets
    
    
    8,873
    
    
    
    8,041
    
    
    
    16,912
    
    
    
    15,817Total operating costs
    
    
    74,450
    
    
    
    67,760
    
    
    
    144,372
    
    
    
    132,488Operating income
    
    
    23,992
    
    
    
    28,578
    
    
    
    32,509
    
    
    
    43,694Other (income) expense:Interest expense, net
    
    
    10,835
    
    
    
    11,872
    
    
    
    21,745
    
    
    
    23,526Share of income in equity investments
    
    
    (1,463
    )
    
    
    (2,597
    )
    
    
    (1,709
    )
    
    
    (2,764
    )Minority interest in loss of Banks Broadcasting, Inc.
    
    
    (74
    )
    
    
    (245
    )
    
    
    (286
    )
    
    
    (245
    )Gain on derivative instruments
    
    
    (2,096
    )
    
    
    (3,630
    )
    
    
    (1,595
    )
    
    
    (4,620
    )Loss on extinguishment of debt
    
    
    21
    
    
    
    1,510
    
    
    
    12,330
    
    
    
    4,447Other, net
    
    
    (235
    )
    
    
    339
    
    
    
    166
    
    
    
    220Total other expense, net
    
    
    6,988
    
    
    
    7,249
    
    
    
    30,651
    
    
    
    20,564Income from continuing operations before provision for income
taxes and cumulative effect of change in accounting principle
    
    
    17,004
    
    
    
    21,329
    
    
    
    1,858
    
    
    
    23,130Provision for income taxes
    
    
    6,909
    
    
    
    5,403
    
    
    
    2,083
    
    
    
    9,200Income (loss) from continuing operations before cumulative
effect of change in accounting principle
    
    
    10,095
    
    
    
    15,926
    
    
    
    (225
    )
    
    
    13,930Discontinued operations:Loss (income) from discontinued operations, net of tax provision of
$104 and $311 for the three and six months ended June 30, 2004,
respectively
    
    
    
    
    
    
    25
    
    
    
    
    
    
    
    (44
    )Loss from sale of discontinued operations, net of tax benefit of
$1,094 for the three and six months ended June 30, 2004
    
    
    
    
    
    
    1,284
    
    
    
    
    
    
    
    1,284Cumulative effect of change in accounting principle,
net of tax effect of $0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,290
    )Net income (loss)
    
    $
    10,095
    
    
    $
    14,617
    
    
    $
    (225
    )
    
    $
    15,980Basic income (loss) per common share:Income (loss) from continuing operations before cumulative
effect of change in accounting principle
    
    $
    0.20
    
    
    $
    0.32
    
    
    $
    
    
    
    $
    0.28Loss (income) from discontinued operations, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Loss from sale of discontinued operations, net of tax
    
    
    
    
    
    
    0.03
    
    
    
    
    
    
    
    0.03Cumulative effect of change in accounting principle, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.07
    )Net income (loss)
    
    
    0.20
    
    
    
    0.29
    
    
    
    
    
    
    
    0.32Weighted  average number of common shares outstanding used
in calculating basic income (loss) per common share
    
    
    50,633
    
    
    
    50,271
    
    
    
    50,573
    
    
    
    50,232Diluted income (loss) per common share:Income (loss) from continuing operations before cumulative
change in accounting principle
    
    $
    0.17
    
    
    $
    0.28
    
    
    $
    
    
    
    $
    0.25Loss (income) from discontinued operations, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Loss from sale of discontinued operations, net of tax
    
    
    
    
    
    
    0.02
    
    
    
    
    
    
    
    0.02Cumulative effect of change in accounting principle, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.06
    )Net income (loss)
    
    
    0.17
    
    
    
    0.25
    
    
    
    
    
    
    
    0.29Weighted  average number of common shares outstanding used
in calculating diluted income (loss) per common share
    
    
    54,236
    
    
    
    54,084
    
    
    
    50,573
    
    
    
    54,106
  3




---



##### Table of Contents



LIN TV CORP.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  (unaudited)
 Six months ended June 30,2005
    
    2004(in thousands)OPERATING ACTIVITIES:Net (loss) income
    
    $
    (225
    )
    
    $
    15,980Adjustment to reconcile net (loss) income to net cash provided by operating activities:Depreciation and amortization of intangible assets
    
    
    16,912
    
    
    
    15,817Amortization of financing costs and note discounts
    
    
    3,207
    
    
    
    4,042Amortization of program rights
    
    
    12,389
    
    
    
    11,635Program payments
    
    
    (13,817
    )
    
    
    (12,074
    )Loss on early extinguishment of debt
    
    
    12,330
    
    
    
    4,447Cumulative effect of change in accounting principle, net of tax impact
    
    
    
    
    
    
    (3,290
    )Gain on derivative instruments
    
    
    (1,595
    )
    
    
    (4,620
    )Share of income in equity investments
    
    
    (1,709
    )
    
    
    (2,764
    )Deferred income taxes, net
    
    
    1,168
    
    
    
    7,111Stock-based compensation
    
    
    1,753
    
    
    
    229Other, net
    
    
    547
    
    
    
    322Changes in operating assets and liabilities, net of acquisitions and disposals:Accounts receivable
    
    
    (4,585
    )
    
    
    1,863Program rights, net of program obligations
    
    
    (405
    )
    
    
    356Other assets
    
    
    (850
    )
    
    
    (4,141
    )Accounts payable
    
    
    (2,220
    )
    
    
    (1,476
    )Accrued interest expense
    
    
    (3,100
    )
    
    
    (944
    )Accrued sales volume discount
    
    
    (4,002
    )
    
    
    (3,293
    )Other liabilities
    
    
    (1,393
    )
    
    
    5,352Net cash provided by operating activities
    
    
    14,405
    
    
    
    34,552INVESTING ACTIVITIES:Capital expenditures
    
    
    (5,213
    )
    
    
    (10,012
    )Investment in equity investments
    
    
    
    
    
    
    (650
    )Capital contribution from minority interest in Banks Broadcasting, Inc.
    
    
    550
    
    
    
    Distributions from equity investments
    
    
    3,055
    
    
    
    3,260Acquisition of broadcast licenses
    
    
    (232
    )
    
    
    (9,152
    )Payments for business combinations
    
    
    (85,000
    )
    
    
    Proceeds from sale of broadcast licenses and related operating assets
    
    
    
    
    
    
    24,000Other, net
    
    
    14
    
    
    
    2Net cash (used in) provided by investing activities
    
    
    (86,826
    )
    
    
    7,448FINANCING ACTIVITIES:Net proceeds on exercises of employee stock options and phantom stock
units and employee stock purchase plan issuances
    
    
    1,650
    
    
    
    1,256Proceeds from issuance of long-term debt
    
    
    345,000
    
    
    
    Long-term debt financing costs
    
    
    (6,018
    )
    
    
    (144
    )Net proceeds from revolver debt
    
    
    60,000
    
    
    
    8,000Principal payments on long-term debt
    
    
    (324,940
    )
    
    
    (42,060
    )Cash expenses associated with early extinguishment of debt
    
    
    (7,108
    )
    
    
    (3,016
    )Net cash provided by (used) in financing activities
    
    
    68,584
    
    
    
    (35,964
    )Net (decrease) increase in cash and cash equivalents
    
    
    (3,837
    )
    
    
    6,036Cash and cash equivalents at the beginning of the period
    
    
    14,797
    
    
    
    9,475Cash and cash equivalents at the end of the period
    
    $
    10,960
    
    
    $
    15,511
  4




---



##### Table of Contents



LIN TV CORP.
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 Note 1  Basis of Presentation:
       st
  AssetsCash
    
    $
    97Accounts receivable
    
    
    899Program rights, short-term
    
    
    757Other current assets
    
    
    46Property and equipment
    
    
    5,048Program rights, long-term
    
    
    662Broadcast licenses
    
    
    29,238Total assets
    
    $
    36,747
 Liabilities and EquityAccounts payable
    
    $
    396Program obligations, short-term
    
    
    793Other accrued expenses
    
    
    404Program obligations, long-term
    
    
    525Deferred income taxes, net
    
    
    4,805Preferred stock
    
    
    34,764Total liabilities and equity
    
    
    41,687Deficit
    
    $
    (4,940
    )
 5




---



##### Table of Contents



Note 2  Stock-Based Compensation:
   Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004Net income (loss), as reported
    
    $
    10,095
    
    
    $
    14,617
    
    
    $
    (225
    )
    
    $
    15,980Add: Stock-based employee compensation expense,
included in reported net income (loss), net of related tax effect
    
    
    382
    
    
    
    23
    
    
    
    1,052
    
    
    
    137Deduct: Total stock-based employee compensation
expense determined under the fair value based
method for all awards, net of related tax effect
    
    
    (472
    )
    
    
    (739
    )
    
    
    (822
    )
    
    
    (1,500
    )Pro forma net income
    
    $
    10,005
    
    
    $
    13,901
    
    
    $
    5
    
    
    $
    14,617Basic net income (loss) per common share, as reported
    
    $
    0.20
    
    
    $
    0.29
    
    
    $
    
    
    
    $
    0.32Basic net income per common share, pro forma
    
    $
    0.20
    
    
    $
    0.28
    
    
    $
    
    
    
    $
    0.29Diluted net income (loss) per common share, as reported
    
    $
    0.17
    
    
    $
    0.25
    
    
    $
    
    
    
    $
    0.29Diluted net income per common share, pro forma
    
    $
    0.16
    
    
    $
    0.24
    
    
    $
    
    
    
    $
    0.26
  Three Months Ended June 30,
    
    Six Months Ended June 30,2005
    
    2004
    
    2005
    
    2004Volatility
    
    
    24%
    
    
    
    24%
    
    
    
    24%
    
    
    
    24%Risk-free interest rates
    
    
    3.7 - 3.8%
    
    
    
    2.0 - 3.2%
    
    
    
    3.7 - 3.8%
    
    
    
    2.0 - 4.4%Weighted average expected life
    
    
    4.5 years
    
    
    
    4.5 years
    
    
    
    4.5 years
    
    
    
    5 yearsDividend yields
    
    
    0%
    
    
    
    0%
    
    
    
    0%
    
    
    
    0%
 Note 3  Acquisitions and Dispositions:
  6




---



##### Table of Contents



WNDY-TV
    
    WWHO-TVAccounts receivable
    
    $
    437
    
    
    $
    87Program rights, short-term
    
    
    2,239
    
    
    
    2,134Other current assets
    
    
    27
    
    
    
    56Property and equipment
    
    
    7,373
    
    
    
    7,433Program rights, long-term
    
    
    1,239
    
    
    
    1,777Broadcast licenses and other intangibles
    
    
    32,687
    
    
    
    25,527Goodwill
    
    
    21,654
    
    
    
    11,232Deferred tax assets
    
    
    7,868
    
    
    
    3,872Total assets
    
    $
    73,524
    
    
    $
    52,118Other accrued expenses
    
    
    911
    
    
    
    378Program obligations, short-term
    
    
    4,803
    
    
    
    2,980Program obligations, long-term
    
    
    6,449
    
    
    
    3,784Other long-term liabilities
    
    
    13,861
    
    
    
    7,476Total liabilities
    
    $
    26,024
    
    
    $
    14,618Purchase Price
    
    $
    47,500
    
    
    $
    37,500
  Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004Net revenues
    
    $
    98,442
    
    
    $
    102,241
    
    
    $
    181,537
    
    
    $
    187,107Operating income
    
    
    23,992
    
    
    
    29,135
    
    
    
    31,805
    
    
    
    44,274Net income (loss)
    
    
    10,095
    
    
    
    14,764
    
    
    
    (808
    )
    
    
    15,965Basic net income (loss) per common share
    
    $
    0.20
    
    
    $
    0.29
    
    
    $
    (0.02
    )
    
    $
    0.32Diluted net income (loss) per common share
    
    $
    0.17
    
    
    $
    0.23
    
    
    $
    (0.02
    )
    
    $
    0.27
   7




---



##### Table of Contents



Three Months Ended
    
    Six Months EndedJune 30, 2004
    
    June 30, 2004Net revenues
    
    $
    1,230
    
    
    $
    3,257Operating income
    
    
    285
    
    
    
    960Net income
    
    
    263
    
    
    
    884
 Note 4  Investments:
  June 30,
    
    December 31,2005
    
    2004NBC joint venture
    
    $
    54,274
    
    
    $
    55,604WAND (TV) Partnership
    
    
    10,192
    
    
    
    10,209$
    64,466
    
    
    $
    65,813
 Joint Venture with NBC:
  Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004Revenue
    
    $
    23,394
    
    
    $
    29,318
    
    
    $
    41,700
    
    
    $
    47,759Other expense
    
    
    (16,379
    )
    
    
    (16,486
    )
    
    
    (33,233
    )
    
    
    (32,434
    )Net income
    
    
    7,015
    
    
    
    12,832
    
    
    
    8,467
    
    
    
    15,325
 June 30,
    
    December 31,2005
    
    2004Current assets
    
    $
    10,910
    
    
    $
    12,675Non-current assets
    
    
    232,760
    
    
    
    233,957Current liabilities
    
    
    1,269
    
    
    
    724Non-current liabilities
    
    
    815,500
    
    
    
    815,500
 WAND (TV) Partnership:
 8




---



##### Table of Contents



Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004Net revenues
    
    $
    1,636
    
    
    $
    1,664
    
    
    $
    3,145
    
    
    $
    3,297Operating income (loss)
    
    
    88
    
    
    
    (54
    )
    
    
    (74
    )
    
    
    (104
    )Net income (loss)
    
    
    98
    
    
    
    (54
    )
    
    
    (51
    )
    
    
    (103
    )
 June 30,
    
    December 31,2005
    
    2004Current assets
    
    $
    3,498
    
    
    $
    3,317Non-current assets
    
    
    23,958
    
    
    
    24,283Current liabilities
    
    
    854
    
    
    
    917Non-current liabilities
    
    
    2
    
    
    
    32
 Note 5  Intangible Assets:
  June 30,
    
    December 31,2005
    
    2004Amortized Intangible Assets:LMA purchase options
    
    $
    3,300
    
    
    $
    3,300Network affiliations
    
    
    564
    
    
    
    173Other intangibles
    
    
    3,116
    
    
    
    2,173Accumulated amortization
    
    
    (3,442
    )
    
    
    (2,776
    )3,538
    
    
    
    2,870Unamortized Intangible Assets:Broadcast licenses
    
    
    1,120,311
    
    
    
    1,063,265Total broadcast licenses and other intangible assets, net
    
    $
    1,123,849
    
    
    $
    1,066,135Goodwill
    
    
    615,997
    
    
    
    583,105Other
intangibles
    
    
    58
    
    
    
    Total intangible assets, net
    
    $
    1,739,904
    
    
    $
    1,649,240
   9




---



##### Table of Contents



Three Months Ended
    
    Six Months Ended
    
    Estimated amortization expenseJune 30,
    
    June 30,
    
    For the year ended December 31,2004
    
    2005
    
    2004
    
    2005
    
    2005
    
    2006
    
    2007
    
    2008
    
    2009Amortization expense
    
    $
    277
    
    
    $
    400
    
    
    $
    555
    
    
    $
    666
    
    
    $
    1,932
    
    
    $
    292
    
    
    $
    120
    
    
    $
    80
    
    
    $
    
  Note 6 Debt:
  June 30,
    
    December 31,2005
    
    2004Credit Facility
    
    $
    230,000
    
    
    $
    158,500$166,440, 8% Senior Notes due 2008 (net of discount of $2,884)
    
    
    
    
    
    
    163,5566 1/2% Senior Subordinated Notes due 2013
    
    
    375,000
    
    
    
    200,000$125,000, 2.50% Exchangeable Senior Subordinated Debentures due
2033 (net of discount of $12,109 and $14,215 at June 30, 2005
and December 31, 2004, respectively)
    
    
    112,891
    
    
    
    110,785Total debt
    
    
    717,891
    
    
    
    632,841Less current portion
    
    
    8,500
    
    
    
    6,573Total long-term debt
    
    $
    709,391
    
    
    $
    626,268
 1 2 1 2
  1 2
    Note 7  Related Party Transactions:
 Financial Advisory Agreement .
 10




---



##### Table of Contents



Centennial Cable of Puerto Rico
 Banks Broadcasting Inc. st
 Note 8  Contingencies:
 GECC Note.
 
    
    GECC could force LIN TV Corp. to sell the stock of LIN Television held by LIN TV Corp. to
satisfy outstanding amounts under the GECC note;
    
    if more than 50% of the ownership of LIN Television had to be sold to satisfy the GECC
Note, it could cause an acceleration of the Companys credit facility and notes; and
    
    if the GECC note is prepaid because of an acceleration on default or otherwise, or if
the note is repaid at maturity, the Company may incur a substantial tax liability.
  Note 9  Retirement Plans:
   11




---



##### Table of Contents



Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004Service cost
    
    $
    549
    
    
    $
    500
    
    
    $
    1,098
    
    
    $
    1,000Interest cost
    
    
    1,350
    
    
    
    1,401
    
    
    
    2,700
    
    
    
    2,802Expected return on plan assets
    
    
    (1,435
    )
    
    
    (1,450
    )
    
    
    (2,870
    )
    
    
    (2,900
    )Amortization of prior service cost
    
    
    30
    
    
    
    39
    
    
    
    60
    
    
    
    78Amortization of net loss
    
    
    241
    
    
    
    80
    
    
    
    482
    
    
    
    160Net periodic benefit cost
    
    $
    735
    
    
    $
    570
    
    
    $
    1,470
    
    
    $
    1,140
  Note 10  Earnings per Share:
   Three Months Ended June 30,
    
    Six Months Ended June 30,2005
    
    2004
    
    2005
    
    2004Numerator for income (loss) per common share calculation:Net income (loss) available to common shareholders, basic
    
    $
    10,095
    
    
    $
    14,617
    
    
    $
    (225
    )
    
    $
    15,980Interest expense on contingently convertible debt, net of tax
    
    
    1,137
    
    
    
    1,147
    
    
    
    
    
    
    
    2,268Derivative income, net of tax
    
    
    (2,195
    )
    
    
    (2,178
    )
    
    
    
    
    
    
    (2,772
    )Net income (loss) available to common shareholders, diluted
    
    $
    9,037
    
    
    $
    13,586
    
    
    $
    (225
    )
    
    $
    15,476Denominator for income (loss) per common share calculation:Weighted average common shares, basic
    
    
    50,633
    
    
    
    50,271
    
    
    
    50,573
    
    
    
    50,232Effect of dilutive securities:Stock options
    
    
    250
    
    
    
    460
    
    
    
    
    
    
    
    521Contingently convertible debt
    
    
    3,353
    
    
    
    3,353
    
    
    
    
    
    
    
    3,353Weighted average common shares, diluted
    
    
    54,236
    
    
    
    54,084
    
    
    
    50,573
    
    
    
    54,106Basic income (loss) per common share
    
    $
    0.20
    
    
    $
    0.29
    
    
    $
    
    
    
    $
    0.32Diluted income (loss) per common share
    
    $
    0.17
    
    
    $
    0.25
    
    
    $
    
    
    
    $
    0.29
 Note 11  Recent Accounting Pronouncements
 Share-Based
Payment,
 12




---



##### Table of Contents



13




---



##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Special Note About Forward-Looking Statements
  
    
    volatility and changes in our advertising revenues;
    
    the outbreak and duration of hostilities or the occurrence of terrorist attacks and the duration and
extent of network preemption of regularly scheduled programming and decisions by advertisers to withdraw
or delay planned advertising expenditures as a result of military action or terrorist attacks;
    
    restrictions on our operations due to, and the effect of, our significant leverage;
    
    effects of complying with 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.
 14




---



##### Table of Contents



Executive Summary
   
    
    We issued an additional $175.0 million in aggregate principal amount of our 6 1/2%
Senior Subordinated Notes.
    
    We replaced our senior credit facility. Under our new facility, we obtained a
$170.0 million term loan, the proceeds of which were used to repay the balance on our
existing term loan and for general business purposes and a $160.0 million revolving
credit facility.
    
    We repurchased or redeemed all $166.4 million of our 8% Senior Notes.
    
    We acquired WNDY-TV, the UPN affiliate serving Indianapolis, Indiana, and WWHO-TV,
the UPN affiliate serving Columbus, Ohio, from Viacom, Inc. for $85.0 million in cash,
which was funded by a combination of cash on hand and proceeds from our revolving
credit facility (see Note 3 of the unaudited condensed consolidated financial
statements  Acquisitions and Dispositions).
 Industry Trends
  
    
    Political revenues from elections and revenues from Olympic Games, which generally
occur in even years, create fluctuations in our operating results when comparing second
quarter and the first half of 2005 with the same periods of 2004. According to the Television Bureau of Advertising, U.S. television
station advertising decreased 4.7% in the second quarter and 3.6% in the first half of
2005 compared to increases of 8.0% and 8.6% in the second quarter and first half of
2004, respectively. (source: Television Bureau of Advertising).
    
    We depend on automotive-related advertising that represented approximately 24% and
25% of our total net revenues for the six months ended June 30, 2005 and 2004,
respectively. A significant change in these advertising revenues could materially
affect our future results of operations.
    
    Our common stock currently trades at a price which results in
a market capitalization which is less than total stockholder's equity
as of June 30, 2005; and has done so since April 2005. 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, 2005 consisted of
unamortized intangible assets. Intangible assets principally include broadcast licenses
and goodwill. SFAS No. 142, Goodwill and Other Intangible Assets, requires, among other
things, the impairment testing
 15




---



##### Table of Contents



Critical Accounting Policies and Estimates
   Off-Balance Sheet Arrangements
  16




---



##### Table of Contents



Results of Operations
  Three Months Ended
    
    
    
    
    
    Six Months EndedJune 30,
    
    %
    
    June 30,
    
    %2005
    
    2004
    
    Change
    
    2005
    
    2004
    
    ChangeNational time sales (before agency commissions)
    
    $
    35,688
    
    
    $
    34,266
    
    
    
    4
    %
    
    $
    63,616
    
    
    $
    62,237
    
    
    
    2
    %Local time sales (before agency commissions)
    
    
    72,319
    
    
    
    69,079
    
    
    
    5
    %
    
    
    129,723
    
    
    
    126,539
    
    
    
    3
    %Political time sales (before agency commissions)
    
    
    1,145
    
    
    
    3,768
    
    
    
    -70
    %
    
    
    1,429
    
    
    
    5,622
    
    
    
    -75
    %Agency commissions (related to time sales)
    
    
    (17,688
    )
    
    
    (17,636
    )
    
    
    0
    %
    
    
    (31,249
    )
    
    
    (31,737
    )
    
    
    -2
    %Network compensation
    
    
    2,213
    
    
    
    2,402
    
    
    
    -8
    %
    
    
    4,628
    
    
    
    5,131
    
    
    
    -10
    %Barter revenue
    
    
    2,458
    
    
    
    2,629
    
    
    
    -7
    %
    
    
    4,324
    
    
    
    4,937
    
    
    
    -12
    %Other revenue
    
    
    2,307
    
    
    
    1,830
    
    
    
    26
    %
    
    
    4,410
    
    
    
    3,453
    
    
    
    28
    %Net revenue
    
    
    98,442
    
    
    
    96,338
    
    
    
    2
    %
    
    
    176,881
    
    
    
    176,182
    
    
    
    0
    %Operating costs and expenses:Direct operating1
    
    
    27,060
    
    
    
    25,390
    
    
    
    7
    %
    
    
    53,071
    
    
    
    50,020
    
    
    
    6
    %Selling, general and administrative
    
    
    26,884
    
    
    
    24,488
    
    
    
    10
    %
    
    
    51,646
    
    
    
    46,988
    
    
    
    10
    %Amortization of program rights
    
    
    6,534
    
    
    
    5,911
    
    
    
    11
    %
    
    
    12,389
    
    
    
    11,635
    
    
    
    6
    %Corporate
    
    
    5,099
    
    
    
    3,930
    
    
    
    30
    %
    
    
    10,354
    
    
    
    8,028
    
    
    
    29
    %Depreciation and amortization of
intangible assets
    
    
    8,873
    
    
    
    8,041
    
    
    
    10
    %
    
    
    16,912
    
    
    
    15,817
    
    
    
    7
    %Total
operating costs and expenses
    
    
    74,450
    
    
    
    67,760
    
    
    
    10
    %
    
    
    144,372
    
    
    
    132,488
    
    
    
    9
    %Operating
income
    
    $
    23,992
    
    
    $
    28,578
    
    
    
    -16
    %
    
    $
    32,509
    
    
    $
    43,694
    
    
    
    -26
    %
 
 1
    
    Excluding depreciation of $8.5 million and $7.8 million for the three months
ended June 30, 2005 and 2004, respectively, and $16.2 and $15.3 million for the six months ended
June 30, 2005 and 2004, respectively. Net revenues
  Operating Costs and Expenses
 Direct operating expenses (excluding depreciation and amortization of intangible assets),
 17




---



##### Table of Contents



Selling, general and administrative expenses,
 Amortization of program rights
 Corporate expenses
 Depreciation and amortization of intangible assets
 18




---



##### Table of Contents



Other (Income) Expense
 Interest expense
  Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004Components of interest expense, including discount and financing fee amortizationCredit Facility
    
    $
    2,420
    
    
    $
    2,308
    
    
    $
    4,764
    
    
    $
    4,6656 1/2% Senior Subordinated Notes
    
    
    6,465
    
    
    
    3,416
    
    
    
    11,872
    
    
    
    6,7902.50% Exchangeable Senior Subordinated Debentures
    
    
    1,896
    
    
    
    1,912
    
    
    
    3,766
    
    
    
    3,7818% Senior Notes
    
    
    
    
    
    
    4,317
    
    
    
    1,501
    
    
    
    8,456Other interest (income) expense, net
    
    
    54
    
    
    
    (81
    )
    
    
    (158
    )
    
    
    (166
    )Total interest expense, net
    
    $
    10,835
    
    
    $
    11,872
    
    
    $
    21,745
    
    
    $
    23,526
 Interest expense, net
 Gain on derivative instruments
 Other Items
  Provision for Income Taxes
  19




---



##### Table of Contents



Liquidity and Capital Resources
  Description of Indebtedness
 1 2 1 2
   June 30,
    
    December 31,2005
    
    2004Credit Facility
    
    $
    230,000
    
    
    $
    158,500$166,440, 8% Senior Notes due 2008 (net of discount of $2,884 at December 31, 2004)
    
    
    
    
    
    
    163,5566 1/2% Senior Subordinated Notes due 2013
    
    
    375,000
    
    
    
    200,000$125,000, 2.50% Exchangeable Senior Subordinated Debentures due
2033 (net of discount of $12,109 and $14,215 at June 30, 2005
and December 31, 2004, respectively)
    
    
    112,891
    
    
    
    110,785Total debt
    
    
    717,891
    
    
    
    632,841Less current portion
    
    
    8,500
    
    
    
    6,573Total long-term debt
    
    $
    709,391
    
    
    $
    626,268
   20




---



##### Table of Contents



%
   Contractual Obligation s
  July-December2005
    
    2006-2008
    
    2009-2010
    
    Thereafter
    
    TotalPrincipal payments and mandatory
redemptions on debt (1)
    
    $
    
    
    
    $
    51,000
    
    
    $
    94,000
    
    
    $
    585,000
    
    
    $
    730,000Cash interest on debt (2)
    
    
    19,011
    
    
    
    96,407
    
    
    
    55,426
    
    
    
    98,139
    
    
    
    268,983Program payments (3)
    
    
    17,433
    
    
    
    60,225
    
    
    
    14,507
    
    
    
    8,248
    
    
    
    100,413Operating leases (4)
    
    
    445
    
    
    
    2,139
    
    
    
    681
    
    
    
    3,398
    
    
    
    6,663Local marketing agreement payments (5)
    
    
    1,012
    
    
    
    1,073
    
    
    
    
    
    
    
    
    
    
    
    2,085Total
    
    $
    37,901
    
    
    $
    210,844
    
    
    $
    164,614
    
    
    $
    694,785
    
    
    $
    1,108,144
 21




---



##### Table of Contents



(1)
    
    We are obligated to repay the revolving portion of our credit facility in March 2010
and the balance of the term loan in March 2011, our 6 1/2% Senior Subordinated Notes in May
2013 and our 2.50% Exchangeable Senior Subordinated Debentures in May 2033. The holders of
our 2.50% Exchangeable Senior Subordinated Debentures can require us to purchase all or a
portion of the debentures on each of May 15, 2008, 2013, 2018, 2023 and 2028.(2)
    
    We have contractual obligations to pay cash interest on our credit facility through
2011, our 6 1/2% Senior Subordinated Notes through 2013, and our 2.50% Exchangeable Senior
Subordinated Debentures through 2033. We may pay contingent interest to holders of the
debentures during any six-month period commencing May 15, 2008, if the average trading
price of the debentures for a five trading day measurement period immediately preceding the
first day of the applicable six-month period equals 120% or more of the principal amount of
the debentures. The contingent interest equals 0.25% per annum per $1,000 principal amount
of debentures. In addition, we are obligated to pay commitment fees of approximately 0.30%
on the unused portion of the revolving credit facility.(3)
    
    We have entered into commitments to purchase future syndicated news, entertainment, and
sports programming. We have recorded $41.3 million of program obligations as of June 30,
2005 and have unrecorded commitments of $59.1 million for programming that is not available
to air as of June 30, 2005.(4)
    
    We lease land, buildings, vehicles and equipment under non-cancelable operating lease
agreements.(5)
    
    We have entered into option agreements that would enable us to purchase KNVA-TV and
WNAC-TV for a fixed amount under certain conditions. In connection with these agreements,
we are committed to pay minimum future periodic fees totaling $2.1 million as of June 30,
2005. Net cash provided by operating activities
 Net cash used in investing activities
 22




---



##### Table of Contents



Net cash provided by financing activities 1 2
  Recent Accounting Pronouncements
 Share-Based
Payment,
   23




---



##### Table of Contents



24




---



##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk
      
 Item 4. Controls and Procedures
   25




---



##### Table of Contents



Part II: Other Information
 
 Item 1. Legal Proceedings
  
 Item 4. Submission of Matters to a Vote of Security Holders
   Nominee:
    
    For:
    
    Against:
    
    Withheld:
    Broker Non-Votes:Randall S. Fojtasek
    
    
    87,588,345
    
    
    
    2,500
    
    
    
    810,377
    
    
    
    0
  For:
    
    Against:
    
    Withheld:
    
    Broker Non-Votes:69,648,285
    
    
    10,747,071
    
    
    
    2,573,887
    
    
    
    5,431,979
  For:
    
    Against:
    
    Withheld:
    
    Broker Non-Votes:69,716,941
    
    
    13,211,429
    
    
    
    40,873
    
    
    
    5,431,979
  For:
    
    Against:
    
    Withheld:
    Broker Non-Votes:88,364,517
    
    
    32,623
    
    
    
    4,082
    
    
    
    0
 
 Item 5. Other Information
   26




---



##### Table of Contents



Item 6. Exhibits
 Exhibits:
 No.
    
    Description3.1.
    
    Second Amended and Restated Certificate of Incorporation of LIN TV Corp. as amended (filed as Exhibit
3.1 to the Quarterly Report on Form 10-Q for the quarter ended
June 30, 2004 of LIN TV Corp. and LIN Television Corporation
(file nos. 001-31311 and 000-25206) and
incorporated by reference herein).3.2.
    
    Amended and Restated Bylaws of LIN TV Corp. as amended (filed as Exhibit 3.2 to the Quarterly Report on Form 10-Q for the quarter ended
June 30, 2004 of LIN TV Corp. and LIN Television Corporation
(file nos. 001-31311 and 000-25206) and incorporated by reference
herein).3.3.
    
    Second Restated Certificate of Incorporation of LIN Television Corporation as amended (filed as Exhibit 3.1 to
the Quarterly Report on Form 10-Q of LIN TV Corp. and LIN Television Corporation for the
fiscal quarter ended June 30, 2004 (File Nos. 001-31311 and 000-25206) and incorporated by
reference herein).3.4.
    
    Second Restated By-laws of LIN Television Corporation as amended (filed as Exhibit 3.2 to the Quarterly Report on Form 10-Q for the quarter ended
June 30, 2004 of LIN TV Corp. and LIN Television Corporation
(file nos. 001-31311 and 000-25206) and incorporated by reference herein).4.1.
    
    Specimen of stock certificate representing LIN TV Corp. Class A Common stock, par value $.01
per share (filed as Exhibit 4.1 to LIN TV Corp.s Registration Statement on Form S-1
(Registration No. 333-83068) and incorporated by reference herein).4.2.
    
    Indenture, dated as of May 12, 2003, among LIN Television Corporation, the guarantors named
therein and the Bank of New York, as Trustee, relating to the 61/2% Senior Subordinated Notes
(filed as Exhibit 4.1 to the Current Report on Form 8-K of LIN TV Corp. and LIN Television
Corporation (File Nos. 001-31311 and 000-25206) filed with the SEC on May 14, 2003 and
incorporated by reference herein).4.3.
    
    Indenture, dated as of May 12, 2003, among LIN Television Corporation, the guarantors named
therein and the Bank of New York, as Trustee, relating to the 2.50% Senior Subordinated
Debentures (filed as Exhibit 4.2 to the Current Report on Form 8-K of LIN TV Corp. and LIN
Television Corporation (File Nos. 001-31311 and 000-25206) filed with the SEC on May 14, 2003
and incorporated by reference herein).4.4.
    
    Supplemental Indenture, dated as of January 31, 2005, among LIN Television Corporation, the
Guarantors named therein and The Bank of New York (filed as Exhibit 4.1 to the Current Report
on Form 8-K of LIN TV Corp. and LIN Television Corporation (File Nos. 001-31311 and 000-25206)
filed with the SEC on February 2, 2005 and incorporated by reference herein)
 27




---



##### Table of Contents



10.1.
    
    LIN TV Corp. Amended and Restated 2002 Stock Plan, dated as of May 4, 2005 (filed as Exhibit
10.7 to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2005 of LIN TV Corp.
and LIN Television Corporation (File Nos. 001-31311 and 000-25206) and incorporated by
reference herein).10.2.
    
    LIN TV Corp. Amended and Restated 2002 Non-Employee Director Stock Plan, dated as of May 4,
2005. (filed as Exhibit 10.8 to the Quarterly Report on Form 10-Q for the quarter ended March
31, 2005 of LIN TV Corp. and LIN Television Corporation (File Nos. 001-31311 and 000-25206)
and incorporated by reference herein).31.1
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of the Chief
Executive Officer of LIN TV Corp.31.2
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of the Chief
Financial Officer of LIN TV Corp.31.3
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of the Chief
Executive Officer of LIN Television Corporation.31.4
    
    Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of the Chief
Financial Officer of LIN Television Corporation.32.1
    
    Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of the Chief
Executive Officer and Chief Financial Officer of LIN TV Corp.32.2
    
    Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of the Chief
Executive Officer and Chief Financial Officer of LIN Television Corporation
 28




---



##### Table of Contents



SIGNATURES
  LIN TV CORP.LIN TELEVISION CORPORATIONDated:August 9, 2005
    
    By:
    
    /s/ Vincent L. SaduskyVincent L. SaduskyVice President  Chief Financial Officer and TreasurerBy:
    
    /s/ William A. CunninghamWilliam A. CunninghamVice President and Controller(Principal Accounting Officer)
 29




---



##### Table of Contents



Item 1. Financial Statements
 LIN Television CorporationCondensed Consolidated Balance Sheets
    
    
    31Condensed Consolidated Statements of Operations
    
    
    32Condensed Consolidated Statements of Cash Flows
    
    
    33Notes to Condensed Consolidated Financial Statements
    
    
    34
 30




---



##### Table of Contents



LIN TV CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
 June 30,
    
    
    December 31,2005
    
    
    2004(Unaudited)(In thousands, except share data)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    10,960
    
    
    $
    14,797Accounts receivable, less allowance for doubtful accounts (2005 - $1,499; 2004 - $1,450)
    
    
    75,343
    
    
    
    70,639Program rights
    
    
    15,125
    
    
    
    17,312Other current assets
    
    
    7,870
    
    
    
    3,790Total current assets
    
    
    109,298
    
    
    
    106,538Property and equipment, net
    
    
    200,919
    
    
    
    197,565Deferred financing costs
    
    
    13,639
    
    
    
    11,060Equity investments
    
    
    64,466
    
    
    
    65,813Program rights
    
    
    11,621
    
    
    
    12,165Other assets
    
    
    12,896
    
    
    
    16,043Goodwill
    
    
    615,997
    
    
    
    583,105Broadcast licenses and other intangible assets, net
    
    
    1,123,907
    
    
    
    1,066,135Total assets
    
    $
    2,152,743
    
    
    $
    2,058,424LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS EQUITYCurrent liabilities:Current portion of long-term debt
    
    $
    8,500
    
    
    $
    6,573Accounts payable
    
    
    5,745
    
    
    
    7,774Accrued interest expense
    
    
    5,018
    
    
    
    8,118Accrued sales volume discount
    
    
    2,460
    
    
    
    6,462Other accrued expenses
    
    
    16,465
    
    
    
    13,483Program obligations
    
    
    25,586
    
    
    
    23,278Total current liabilities
    
    
    63,774
    
    
    
    65,688Long-term debt, excluding current portion
    
    
    709,391
    
    
    
    626,268Deferred income taxes, net
    
    
    435,123
    
    
    
    445,695Program obligations
    
    
    15,763
    
    
    
    12,008Other liabilities
    
    
    56,441
    
    
    
    38,344Total liabilities
    
    
    1,280,492
    
    
    
    1,188,003Preferred stock of Banks Broadcasting, Inc., $0.01 par value, 179,322 and
173,822 issued and outstanding at June 30, 2005 and December 31, 2004, respectively
    
    
    14,723
    
    
    
    14,458Stockholders equity:Common stock $0.01 par value: 1,000 authorized, issued and
outstanding
    
    
    
    
    
    
    Additional paid-in capital
    
    
    1,074,110
    
    
    
    1,072,320Accumulated deficit
    
    
    (201,992
    )
    
    
    (201,767
    )Accumulated other comprehensive loss
    
    
    (14,590
    )
    
    
    (14,590
    )Total stockholders equity
    
    
    857,528
    
    
    
    855,963Total liabilities, preferred stock and stockholders equity
    
    $
    2,152,743
    
    
    $
    2,058,424
  31




---



##### Table of Contents



LIN TELEVISION CORPORATION
 Three Months Ended June 30,
    
    
    Six Months Ended June 30,2005
    
    
    2004
    
    
    2005
    
    
    2004(In thousands, except per share information)Net revenues
    
    $
    98,442
    
    
    $
    96,338
    
    
    $
    176,881
    
    
    $
    176,182Operating costs and expenses:Direct operating (excluding depreciation of $8.5 million and $7.8 million
for the three months ended June 30, 2005 and 2004, respectively,
and $16.2 million and $15.3 million for the six months ended
June 30, 2005 and 2004,
respectively)
    
    
    27,060
    
    
    
    25,390
    
    
    
    53,071
    
    
    
    50,020Selling, general and administrative
    
    
    26,884
    
    
    
    24,488
    
    
    
    51,646
    
    
    
    46,988Amortization of program rights
    
    
    6,534
    
    
    
    5,911
    
    
    
    12,389
    
    
    
    11,635Corporate
    
    
    5,099
    
    
    
    3,930
    
    
    
    10,354
    
    
    
    8,028Depreciation and amortization of intangible
assets
    
    
    8,873
    
    
    
    8,041
    
    
    
    16,912
    
    
    
    15,817Total operating costs
    
    
    74,450
    
    
    
    67,760
    
    
    
    144,372
    
    
    
    132,488Operating income
    
    
    23,992
    
    
    
    28,578
    
    
    
    32,509
    
    
    
    43,694Other (income) expense:Interest expense, net
    
    
    10,835
    
    
    
    11,872
    
    
    
    21,745
    
    
    
    23,526Share of income in equity investments
    
    
    (1,463
    )
    
    
    (2,597
    )
    
    
    (1,709
    )
    
    
    (2,764
    )Minority interest in loss of Banks
Broadcasting, Inc.
    
    
    (74
    )
    
    
    (245
    )
    
    
    (286
    )
    
    
    (245
    )Gain on derivative instruments
    
    
    (2,096
    )
    
    
    (3,630
    )
    
    
    (1,595
    )
    
    
    (4,620
    )Loss on extinguishment of debt
    
    
    21
    
    
    
    1,510
    
    
    
    12,330
    
    
    
    4,447Other, net
    
    
    (235
    )
    
    
    339
    
    
    
    166
    
    
    
    220Total other expense, net
    
    
    6,988
    
    
    
    7,249
    
    
    
    30,651
    
    
    
    20,564Income from continuing operations before provision
for income taxes and cumulative effect of change in
accounting principle
    
    
    17,004
    
    
    
    21,329
    
    
    
    1,858
    
    
    
    23,130Provision for income taxes
    
    
    6,909
    
    
    
    5,403
    
    
    
    2,083
    
    
    
    9,200Income (loss) from continuing operations before
cumulative effect of change in accounting principle
    
    
    10,095
    
    
    
    15,926
    
    
    
    (225
    )
    
    
    13,930Discontinued operations:Loss (income) from discontinued operations, net of tax provision of
$104 and $311 for the three and six months ended June 30, 2004,respectively
    
    
    
    
    
    
    25
    
    
    
    
    
    
    
    (44
    )Loss from sale of discontinued operations, net of
tax benefit of $1,094 for the three and six months ended June 30, 2004
    
    
    
    
    
    
    1,284
    
    
    
    
    
    
    
    1,284Cumulative effect of change in accounting principle, net of tax effect of $0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,290
    )Net income (loss)
    
    $
    10,095
    
    
    $
    14,617
    
    
    $
    (225
    )
    
    $
    15,980
  32




---



##### Table of Contents



LIN TELEVISION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  (unaudited)
 Six months ended June 30,2005
    
    
    2004(in thousands)OPERATING ACTIVITIES:Net (loss) income
    
    $
    (225
    )
    
    $
    15,980Adjustment to reconcile net (loss) income to net cash provided by
operating activities:Depreciation and amortization of intangible assets
    
    
    16,912
    
    
    
    15,817Amortization of financing costs and note discounts
    
    
    3,207
    
    
    
    4,042Amortization of program rights
    
    
    12,389
    
    
    
    11,635Program payments
    
    
    (13,817
    )
    
    
    (12,074
    )Loss on early extinguishment of debt
    
    
    12,330
    
    
    
    4,447Cumulative effect of change in accounting principle, net of tax impact
    
    
    
    
    
    
    (3,290
    )Gain on derivative instruments
    
    
    (1,595
    )
    
    
    (4,620
    )Share of income in equity investments
    
    
    (1,709
    )
    
    
    (2,764
    )Deferred income taxes, net
    
    
    1,168
    
    
    
    7,111Stock-based compensation
    
    
    1,753
    
    
    
    229Other, net
    
    
    547
    
    
    
    322Changes in operating assets and liabilities, net of acquisitions and
disposals:Accounts receivable
    
    
    (4,585
    )
    
    
    1,863Program rights, net of program obligations
    
    
    (405
    )
    
    
    356Other assets
    
    
    (850
    )
    
    
    (4,141
    )Accounts payable
    
    
    (2,220
    )
    
    
    (1,476
    )Accrued interest expense
    
    
    (3,100
    )
    
    
    (944
    )Accrued sales volume discount
    
    
    (4,002
    )
    
    
    (3,293
    )Other liabilities
    
    
    (1,393
    )
    
    
    5,352Net cash provided by operating activities
    
    
    14,405
    
    
    
    34,552INVESTING ACTIVITIES:Capital expenditures
    
    
    (5,213
    )
    
    
    (10,012
    )Investment in equity investments
    
    
    
    
    
    
    (650
    )Capital contribution from minority interest in Banks Broadcasting, Inc.
    
    
    550
    
    
    
    Distributions from equity investments
    
    
    3,055
    
    
    
    3,260Acquisition of broadcast licenses
    
    
    (232
    )
    
    
    (9,152
    )Payments for business combinations
    
    
    (85,000
    )
    
    
    Proceeds from sale of broadcast licenses and related operating assets
    
    
    
    
    
    
    24,000Other, net
    
    
    14
    
    
    
    2Net cash (used in) provided by investing activities
    
    
    (86,826
    )
    
    
    7,448FINANCING ACTIVITIES:Net proceeds on exercises of employee stock options and phantom stock
units and employee stock purchase plan issuances
    
    
    1,650
    
    
    
    1,256Proceeds from issuance of long-term debt
    
    
    345,000
    
    
    
    Long-term debt financing costs
    
    
    (6,018
    )
    
    
    (144
    )Net proceeds from revolver debt
    
    
    60,000
    
    
    
    8,000Principal payments on long-term debt
    
    
    (324,940
    )
    
    
    (42,060
    )Cash expenses associated with early extinguishment of debt
    
    
    (7,108
    )
    
    
    (3,016
    )Net cash provided by (used) in financing activities
    
    
    68,584
    
    
    
    (35,964
    )Net (decrease) increase in cash and cash equivalents
    
    
    (3,837
    )
    
    
    6,036Cash and cash equivalents at the beginning of the period
    
    
    14,797
    
    
    
    9,475Cash and cash equivalents at the end of the period
    
    $
    10,960
    
    
    $
    15,511
  33




---



##### Table of Contents



LIN TELEVISION CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Note 1  Basis of Presentation:
       st
 34




---



##### Table of Contents



LIN TELEVISION CORPORATION
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  AssetsCash
    
    $
    97Accounts receivable
    
    
    899Program rights, short-term
    
    
    757Other current assets
    
    
    46Property and equipment
    
    
    5,048Program rights, long-term
    
    
    662Broadcast licenses
    
    
    29,238Total assets
    
    $
    36,747Liabilities and EquityAccounts payable
    
    $
    396Program obligations, short-term
    
    
    793Other accrued expenses
    
    
    404Program obligations, long-term
    
    
    525Deferred income taxes, net
    
    
    4,805Preferred stock
    
    
    34,764Total liabilities and equity
    
    
    41,687Deficit
    
    $
    (4,940
    )
   Note 2  Stock-Based Compensation:
   Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004Net income (loss), as reported
    
    $
    10,095
    
    
    $
    14,617
    
    
    $
    (225
    )
    
    $
    15,980Add: Stock-based employee compensation expense,
included in reported net income (loss), net of related tax effect
    
    
    382
    
    
    
    23
    
    
    
    1,052
    
    
    
    137Deduct: Total stock-based employee compensation
expense determined under the fair value based
method for all awards, net of related tax effect
    
    
    (472
    )
    
    
    (739
    )
    
    
    (822
    )
    
    
    (1,500
    )Pro forma net income
    
    $
    10,005
    
    
    $
    13,901
    
    
    $
    5
    
    
    $
    14,617
  35




---



##### Table of Contents



LIN TELEVISION CORPORATION
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Three Months Ended June 30,
    
    Six Months Ended June 30,2005
    
    2004
    
    2005
    
    2004Volatility
    
    
    24
    %
    
    
    24
    %
    
    
    24
    %
    
    
    24
    %Risk-free interest rates
    
    
    2.0 - 3.2
    %
    
    
    2.0 - 3.2
    %
    
    
    2.0 - 4.4
    %
    
    
    2.0 - 4.4
    %Weighted average expected life
    
    4.5 years
    
    4.5 years
    
    4.5 years
    
    5 yearsDividend yields
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %
 Note 3  Acquisitions and Dispositions:
    WNDY-TV
    
    WWHO-TVAccounts receivable
    
    $
    437
    
    
    $
    87Program rights, short-term
    
    
    2,239
    
    
    
    2,134Other current assets
    
    
    27
    
    
    
    56Property and equipment
    
    
    7,373
    
    
    
    7,433Program rights, long-term
    
    
    1,239
    
    
    
    1,777Broadcast licenses and other intangibles
    
    
    32,687
    
    
    
    25,527Goodwill
    
    
    21,654
    
    
    
    11,232Deferred tax assets
    
    
    7,868
    
    
    
    3,872Total assets
    
    $
    73,524
    
    
    $
    52,118Other accrued expenses
    
    
    911
    
    
    
    378Program obligations, short-term
    
    
    4,803
    
    
    
    2,980Program obligations, long-term
    
    
    6,449
    
    
    
    3,784Other long-term liabilities
    
    
    13,861
    
    
    
    7,476Total liabilities
    
    $
    26,024
    
    
    $
    14,618Purchase Price
    
    $
    47,500
    
    
    $
    37,500
  36




---



##### Table of Contents



LIN TELEVISION CORPORATION
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004Net revenues
    
    $
    98,442
    
    
    $
    102,241
    
    
    $
    181,537
    
    
    $
    187,107Operating income
    
    
    23,992
    
    
    
    29,135
    
    
    
    31,805
    
    
    
    44,274Net income (loss)
    
    
    10,095
    
    
    
    14,764
    
    
    
    (808
    )
    
    
    15,965
    Three Months Ended
    
    Six Months EndedJune 30, 2004
    
    June 30, 2004Net revenues
    
    $
    1,230
    
    
    $
    3,257Operating income
    
    
    285
    
    
    
    960Net income
    
    
    263
    
    
    
    884
 Note 4  Investments:
  June 30,
    
    December 31,2005
    
    2004NBC joint venture
    
    $
    54,274
    
    
    $
    55,604WAND (TV) Partnership
    
    
    10,192
    
    
    
    10,209$
    64,466
    
    
    $
    65,813
 Joint Venture with NBC:
 37




---



##### Table of Contents



LIN TELEVISION CORPORATION
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004Revenue
    
    $
    23,394
    
    
    $
    29,318
    
    
    $
    41,700
    
    
    $
    47,759Other expense
    
    
    (16,379
    )
    
    
    (16,486
    )
    
    
    (33,233
    )
    
    
    (32,434
    )Net income
    
    
    7,015
    
    
    
    12,832
    
    
    
    8,467
    
    
    
    15,325
 June 30,
    
    December 31,2005
    
    2004Current assets
    
    $
    10,910
    
    
    $
    12,675Non-current assets
    
    
    232,760
    
    
    
    233,957Current liabilities
    
    
    1,269
    
    
    
    724Non-current liabilities
    
    
    815,500
    
    
    
    815,500
 WAND (TV) Partnership:
  Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004Net revenues
    
    $
    1,636
    
    
    $
    1,664
    
    
    $
    3,145
    
    
    $
    3,297Operating income (loss)
    
    
    88
    
    
    
    (54
    )
    
    
    (74
    )
    
    
    (104
    )Net income (loss)
    
    
    98
    
    
    
    (54
    )
    
    
    (51
    )
    
    
    (103
    )
 June 30,
    
    December 31,2005
    
    2004Current assets
    
    $
    3,498
    
    
    $
    3,317Non-current assets
    
    
    23,958
    
    
    
    24,283Current liabilities
    
    
    854
    
    
    
    917Non-current liabilities
    
    
    2
    
    
    
    32
 Note 5  Intangible Assets:
  38




---



##### Table of Contents



LIN TELEVISION CORPORATION
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 June 30,
    
    December 31,2005
    
    2004Amortized Intangible Assets:LMA purchase options
    
    $
    3,300
    
    
    $
    3,300Network affiliations
    
    
    564
    
    
    
    173Other intangibles
    
    
    3,116
    
    
    
    2,173Accumulated amortization
    
    
    (3,442
    )
    
    
    (2,776
    )3,538
    
    
    
    2,870Unamortized Intangible Assets:Broadcast licenses
    
    
    1,120,311
    
    
    
    1,063,265Total broadcast licenses and other intangible assets, net
    
    $
    1,123,849
    
    
    $
    1,066,135Goodwill
    
    
    615,997
    
    
    
    583,105Other
intangibles
    
    
    58
    
    
    
    Total intangible assets, net
    
    $
    1,739,904
    
    
    $
    1,649,240
   Three Months Ended
    
    Six Months Ended
    
    Estimated amortization expenseJune 30,
    
    June 30,
    
    For the year ended December 31,2004
    
    2005
    
    2004
    
    2005
    
    2005
    
    2006
    
    2007
    
    2008
    
    2009Amortization expense
    
    $
    277
    
    
    $
    400
    
    
    $
    555
    
    
    $
    666
    
    
    $
    1,932
    
    
    $
    292
    
    
    $
    120
    
    
    $
    80
    
    
    $
    
  Note 6 Debt:
  June 30,
    
    December 31,2005
    
    2004Credit Facility
    
    $
    230,000
    
    
    $
    158,500$166,440, 8% Senior Notes due 2008 (net of discount of $2,884)
    
    
    
    
    
    
    163,5566 1/2% Senior Subordinated Notes due 2013
    
    
    375,000
    
    
    
    200,000$125,000, 2.50% Exchangeable Senior Subordinated Debentures due
2033 (net of discount of $12,109 and $14,215 at June 30, 2005
and December 31, 2004, respectively)
    
    
    112,891
    
    
    
    110,785Total debt
    
    
    717,891
    
    
    
    632,841Less current portion
    
    
    8,500
    
    
    
    6,573Total long-term debt
    
    $
    709,391
    
    
    $
    626,268
 39




---



##### Table of Contents



LIN TELEVISION CORPORATION
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 1 2 1 2
  1 2
    Note 7  Related Party Transactions:
 Financial Advisory Agreement .
 Centennial Cable of Puerto Rico
 Banks Broadcasting Inc. st
 40




---



##### Table of Contents



LIN TELEVISION CORPORATION
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 Note 8  Contingencies:
 GECC Note.
 
    
    GECC could force LIN TV Corp. to sell the stock of LIN Television held by LIN TV Corp. to
satisfy outstanding amounts under the GECC note;
    
    if more than 50% of the ownership of LIN Television had to be sold to satisfy the GECC
Note, it could cause an acceleration of the Companys credit facility and notes; and
    
    if the GECC note is prepaid because of an acceleration on default or otherwise, or if
the note is repaid at maturity, the Company may incur a substantial tax liability.
  Note 9  Retirement Plans:
   Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2005
    
    2004
    
    2005
    
    2004Service cost
    
    $
    549
    
    
    $
    500
    
    
    $
    1,098
    
    
    $
    1,000Interest cost
    
    
    1,350
    
    
    
    1,401
    
    
    
    2,700
    
    
    
    2,802Expected return on plan assets
    
    
    (1,435
    )
    
    
    (1,450
    )
    
    
    (2,870
    )
    
    
    (2,900
    )Amortization of prior service cost
    
    
    30
    
    
    
    39
    
    
    
    60
    
    
    
    78Amortization of net loss
    
    
    241
    
    
    
    80
    
    
    
    482
    
    
    
    160Net periodic benefit cost
    
    $
    735
    
    
    $
    570
    
    
    $
    1,470
    
    
    $
    1,140
 41




---



##### Table of Contents



LIN TELEVISION CORPORATION
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  Note 10  Recent Accounting Pronouncements
 Share-Based
Payment,
    42




---



##### Table of Contents



LIN TELEVISION CORPORATION
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
  43