Lin TV 8-K Other events

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):February 10, 2004

LIN TV Corp.

(Exact name of registrant as specified in its charter)

Delaware	001-31331	05-0501252
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

Four Richmond Square, Suite 200, Providence, Rhode Island	02906
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code:(401) 454-2880

(Former name or former address, if changed since last report)

Item 5. Other Events.

On February 10, 2004, LIN TV Corp., the parent of LIN Television Corporation, reported financial results for the fourth quarter and fiscal year ended December 31, 2003. The reported results reflect the impact of the acquisition of Sunrise Television Corp. on May 2, 2002.

Reported Results

LIN TV’s net loss for the fourth quarter of 2003 was $44.2 million, or $0.88 per share, compared to net income of $12.7 million, or $0.25 per share, during the fourth quarter of 2002. Fourth quarter 2003 net revenues were $97.4 million, a decrease of 8.2% from net revenues of $106.1 million in the fourth quarter of 2002. In accordance with Statement of Financial Accounting Standards No. 142 (SFAS 142), the Company discontinued the amortization of goodwill and broadcast licenses on January 1, 2002, and is now required to review goodwill and broadcast license valuations at least annually. In the fourth quarter of 2003, LIN recorded a $51.7 million pre-tax impairment in the carrying value of its broadcast licenses, which is reflected as an operating expense. The decline in market revenue, resulting from the challenging market conditions in 2003 caused by the war and soft advertising environment, contributed to the impairment.

The Company reported an operating loss of $26.7 million in the fourth quarter of 2003, due in large part to the $51.7 million impairment recorded in the quarter compared to $36.8 million of operating income in the fourth quarter of 2002. Direct operating expenses, which exclude depreciation and amortization, decreased 1.9% in the fourth quarter while selling, general and administrative expenses increased 3.4%. Corporate expenses declined 15.8% to $4.3 million due to the absence of transaction-related expenses that were incurred in the 2002 fourth quarter. Depreciation and amortization of intangible assets increased 4.2% to $8.8 million due to additional capital expenditures in 2003 and new equipment that went into operation during the year.

Cash corporate expenses for the fourth quarter of 2003 were $4.0 million compared to $4.6 million in the fourth quarter of 2002. The Company received $2.7 million of cash distributions from equity investments in the fourth quarter of 2003 compared to $5.4 million in the fourth quarter of 2002. Interest expense for the fourth quarter of 2003 was $12.3 million of which $10.1 million was paid in cash.

The Company’s net loss for fiscal year 2003 was $90.4 million, or a net loss of $1.81 per share, compared to a net loss in 2002 of $47.2 million, or a loss of $1.13 per share. Net revenues for the year were $349.5 million compared to $349.6 million in 2002. The parity in net revenue is due largely to the May 2002 acquisition of the Sunrise television stations. Operating income for 2003 was $30.6 million, compared to $109.7 million of operating income in 2002 with $51.7 million of the decline due to the impairment charge in 2003. Corporate overhead paid in cash for 2003 was $15.3 million compared to $12.4 million in 2002. The Company received $7.5 million of cash distributions from equity investments in 2003 compared to $6.4 million received in 2002.

Interest expense in 2003 declined 36.8% to $60.5 million from $95.8 million in 2002 due to the company’s refinancing activity during the year. The refinancing also contributed to a $53.6 million charge due to the early extinguishment of debt. Capital expenditures were $13.4 million in the fourth quarter of 2003 compared to $13.2 million for the fourth quarter of 2002 and a total of $28.4 million for the full year 2003 compared to $39.3 million for 2002.

Balance Sheet

Total debt outstanding on December 31, 2003 was $700.4 million and cash balances were $9.5 million at year-end. Net consolidated leverage as defined in the Company’s senior credit facility (total debt minus cash and cash equivalents divided by $127.5 million, representing trailing four quarters of broadcast cash flow less corporate overhead and including joint venture distributions) at the end of the quarter was 5.4X on an adjusted basis, compared to a permitted leverage covenant of 6.25X.

LIN TV had 50.2 million common shares outstanding on December 31, 2003. Weighted average shares outstanding were 50.1 million for the quarter and 50.0 million for the full year 2003.

Guidance

LIN TV believes that, based on current pacings for the first quarter of 2004, net revenue for the first quarter of 2004 will increase in the mid-single digits and operating income should increase in the high-single to low-double digits compared to the first quarter operating income of $11.8 million in 2003.

The Company estimates the following expense ranges for the full year 2004:

Direct operating and SG&A expenses	approximately $196 -198 million
Program amortization	approximately $21- $22 million
Cash payments for programming	approximately $24 - $25 million
Depreciation and amortization	approximately $32 - $33 million
Interest expense	approximately $38 -$40 million
Corporate overhead	approximately $15- $16 million
Network compensation	approximately $10 -$11 million
Capital expenditures	approximately $28 -$30 million
Cash taxes	approximately $9 -$10 million

Recent Developments

On January 8, 2004, LIN TV signed an asset purchase agreement for the sale of WEYI-TV, the NBC affiliate serving Flint, Michigan, for $24 million in cash. The transaction is subject to

government approval and is expected to be completed by the middle of 2004. As such, the operating results for WEYI will be treated as discontinued operations in 2004. The proceeds of this transaction will be applied to reduce debt outstanding. Anticipating these sale proceeds, LIN TV utilized available funds under its revolving credit facility to purchase approximately $29.5 million of its 8% senior unsecured bonds in negotiated transactions with an institutional investor. With these adjustments, the Company’s weighted average cost of debt is reduced to approximately 5.5%.

The Company acquired WIRS-TV, channel 42 in Yauco, Puerto Rico, for $4.5 million on January 15, 2004. WIRS will become part of the WJPX network to provide over the air reception for WJPX in an under-served region of the island. In addition, on January 30, 2004, the Company agreed to purchase WTIN-TV, channel 14 in Ponce, Puerto Rico, for $5 million. WTIN is currently a satellite station for WAPA to boost over-the-air reception for the WAPA network in Ponce. The WTIN acquisition is subject to FCC approval.

Mr. Chapman has terminated his previously disclosed 10b5-1 plan, which had been scheduled to expire on June 1, 2004. This plan contemplated the sale of 26,494 shares of common stock that Mr. Chapman will receive in the first half of 2004 upon the required exercise of “phantom units” issued to him in 1998. Mr. Chapman instead intends to pay taxes associated with the transaction out of personal funds and retain ownership of such shares.

About LIN TV Corp.

LIN TV Corp. is an owner and operator of network-affiliated television stations in mid-sized markets. Headquartered in Providence, Rhode Island, the Company operates 23 television stations in 13 markets, two of which are LMAs. LIN’s stations are:

Market	Station	DMA		Channel		Network
Indianapolis	WISH-TV WIIH- CA		25		8 17	CBS Univision
New Haven	WTNH-TV WCTX-TV		27		8 59	ABC UPN
Grand Rapids	WOOD-TV WOTV-TV WXSP-CA		38		8 41 LPs	NBC ABC UPN
Norfolk	WAVY-TV WVBT-TV		41		10 43	NBC Fox
Buffalo	WIVB-TV WNLO-TV		44		4 23	CBS UPN
Providence	WPRI-TV WNAC-TV		48		12 64	CBS Fox (LMA)
Austin	KXAN-TV KNVA-TV KBVO-CA		54		36 54 LPs	NBC WB (LMA) Telefutura
Dayton	WDTN-TV		59		2	ABC
Toledo	WUPW-TV		69		36	Fox

Market	Station	DMA		Channel		Network
Fort Wayne	WANE-TV		105		15	CBS
Springfield	WWLP-TV		106		22	NBC
Lafayette	WLFI-TV		189		18	CBS
San Juan	WAPA-TV WJPX-TV		NA		4 24	Independent Independent

LIN TV also owns approximately 20% of KXAS-TV in Dallas, Texas and KNSD-TV in San Diego, California through a joint venture with NBC, and a 50% non-voting investment in Banks Broadcasting, Inc., which owns KWCV-TV in Wichita, Kansas and KNIN-TV in Boise, Idaho. Finally, LIN is a 1/3 owner of WAND-TV, the ABC affiliate in Decatur, Illinois, which it manages pursuant to a management services agreement.

LIN TV CORP.
Unaudited Condensed Consolidated Statements of Operations
(In thousands, except per share information)

			Three months ended December 31,						Year Ended December 31,
			2003			2002			2003			2002
Net revenues			$	97,428		$	106,091		$	349,529		$	349,594
Operating costs and expenses:
		Direct operating (excluding depreciation of $8.5 million and $8.2 million for the three months ended December 31, 2003 and 2002, respectively, and $31.4 million and $28.0 million for the years ended December 31, 2003 and 2002, respectively)		26,512			27,020			102,093			96,409
		Selling, general and administrative		24,507			23,710			91,554			80,691
		Amortization of program rights		8,346			5,049			24,835			20,759
		Corporate		4,304			5,112			16,101			12,508
		Restructuring charge		13			(22	)		115			909
		Depreciation and amortization of intangible assets		8,809			8,453			32,614			28,658
		Impairment of broadcast licenses		51,665			—			51,665			—
Total operating costs and expenses				124,156			69,322			318,977			239,934
Operating (loss) income				(26,728	)		36,769			30,522			109,660
Other (income) expense:
		Interest expense		12,323			23,084			60,505			95,775
		Investment income		(91	)		(735	)		(1,015	)		(3,131	)
		Share of income in equity investments		1,658			(2,119	)		(478	)		(6,438	)
		Loss (gain) on derivative instruments		4,630			(513	)		(2,260	)		(5,552	)
		Gain on redemption of investment in Southwest Sports Group		—			—			—			(3,819	)
		Fee on termination of Hicks Muse agreements		—			—			—			16,000
		Loss on impairment of investment		—			—			250			2,750
		Loss on extinguishment of debt		516			3,199			53,621			5,656
		Other, net		339			490			838			356
Total other expense, net				19,375			23,406			111,101			101,707
(Loss) income from continuing operations before (benefit from) provision for taxes and cumulative effect of change in accounting principle				(46,103	)		13,363			(80,549	)		7,953
(Benefit from) provision for income taxes				(1,937	)		734			10,053			25,501
(Loss) income from continuing operations before cumulative effective of change in accounting principle				(44,166	)		12,629			(90,602	)		(17,548	)
Discontinued operations:
	Loss from discontinued operations, net of tax benefit of $45 and tax provision of $22 for the three months and year ended December 31, 2002, respectively			—			(74	)		—			(40	)
Gain on sale of discontinued operations, net of tax provision of $109 for the year ended December 31, 2003 and $425 for the year ended December 31, 2002				—			—			(212	)		(982	)
Cumulative effect of change in accounting principle, net of tax benefit of $16,525				—			—			—			30,689
Net (loss) income			$	(44,166	)	$	12,703		$	90,390		$	(47,215	)
Basic and diluted (loss) income per common share:
		(Loss) income from continuing operations before cumulative effect of change in accounting principle	$	(0.88	)	$	0.25		$	(1.81	)	$	(0.42	)
		Loss from discontinued operations, net of tax		—			—			—			—
		Gain on sale of discontinued operations, net of tax		—			—			—			0.02
		Cumulative effect of change in accounting principle, net of tax		—			—			—			(0.73	)
		Net (loss) income		(0.88	)		0.25			(1.81	)		(1.13	)
		Weighted — average number of common shares outstanding used in calculating basic (loss) income per common share		50,105			49,869			49,993			41,792
		Weighted — average number of common shares outstanding used in calculating diluted (loss) income per common share		50,105			50,510			49,993			41,792

LIN TV CORP.
Unaudited Condensed Consolidated Statements of Operations
(In thousands, except per share information)

				Three months ended December 31,				Year Ended December 31,
				2003		2002		2003		2002
Supplemental Financial Data:
	Debt outstanding			$	700,367	$	864,520	$	700,367	$	864,520
	Cash and cash equivalents				9,475		143,860		9,475		143,860
	Capital expenditures				13,351		13,168		28,357		39,275
	Capital distributions from equity investments				2,650		5,386		7,540		6,405
	Cash taxes				710		676		5,758		1,029
	Program rights payments (excludes TX station payments)				5,798		4,791		23,029		22,453
	Station non-cash items				15		—		942		—
	Interest Expense Components:
		Senior Credit Facility		$	1,834	$	184	$	7,194	$	3,928
		$300,000 8 3/8% Senior Subordinated Notes			—		6,282		11,445		25,125
		$325,000 10% Senior Discount Notes			—		—		330		—
		$100,000 10% Senior Discount Notes			—		—		190		—
		$210,000 8% Senior Notes			4,069		4,200		16,669		16,800
		$200,000 6 1/2% Senior Subordinated Notes			3,338		—		8,394		—
		$125,000 2.50% Exchangeable Senior Subordinated Debenture			895		—		2,110		—
		Other			—		650		—		2,715
			Cash interest expense		10,136		11,316		46,332		48,568
	Amortization of discount and deferred financing fees				2,187		11,768		14,173		47,207
		Total interest expense		$	12,323	$	23,084	$	60,505	$	95,775

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	LIN TV Corp.
Date: February 11, 2004	By:	/s/ William A. Cunningham
	Name:	William A. Cunningham
	Title:	Vice President and Controller