Lin Television (LNTV) 10-Q 2005 Q2 Quarterly report

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: 000-25206
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. Yesþ Noo

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yesþ Noo

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 1, 2005: 27,161,302 shares.
LIN TV Corp. Class B common stock, $0.01 par value, issued and outstanding at August 1, 2005: 23,502,059 shares.
LIN TV Corp. Class C common stock, $0.01 par value, issued and outstanding at August 1, 2005: 2 shares.
LIN Television Corporation common stock, $0.01 par value, issued and outstanding at August 1, 2005: 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)	30
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	14
Item 3. Quantitative and Qualitative Disclosures about Market Risk	25
Item 4. Controls and Procedures	25
Part II. Other Information
Item 1. Legal Proceedings	26
Item 4 Submission of Matters to a Vote of Security Holders	26
Item 5. Other Information	26
Item 6. Exhibits	27
Signature Page	29
Certification 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

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)
ASSETS
Current assets:
Cash and cash equivalents	$	10,960		$	14,797
Accounts receivable, less allowance for doubtful accounts (2005 - $1,499; 2004 - $1,450)		75,343			70,639
Program rights		15,125			17,312
Other current assets		7,870			3,790
Total current assets		109,298			106,538
Property and equipment, net		200,919			197,565
Deferred financing costs		13,639			11,060
Equity investments		64,466			65,813
Program rights		11,621			12,165
Other assets		12,896			16,043
Goodwill		615,997			583,105
Broadcast licenses and other intangible assets, net		1,123,907			1,066,135
Total assets	$	2,152,743		$	2,058,424
LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	8,500		$	6,573
Accounts payable		5,745			7,774
Accrued interest expense		5,018			8,118
Accrued sales volume discount		2,460			6,462
Other accrued expenses		16,465			13,483
Program obligations		25,586			23,278
Total current liabilities		63,774			65,688
Long-term debt, excluding current portion		709,391			626,268
Deferred income taxes, net		435,123			445,695
Program obligations		15,763			12,008
Other liabilities		56,441			38,344
Total liabilities		1,280,492			1,188,003
Preferred 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			14,458
Stockholders’ 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			269
Class 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			235
Class 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			1,071,816
Accumulated deficit		(201,992	)		(201,767	)
Accumulated other comprehensive loss		(14,590	)		(14,590	)
Total stockholders’ equity		857,528			855,963
Total liabilities, preferred stock and stockholders’ equity	$	2,152,743		$	2,058,424

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

2

LIN TV CORP.

Condensed Consolidated Statements of Operations (unaudited)

	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		$	176,182
Operating 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			50,020
Selling, general and administrative		26,884			24,488			51,646			46,988
Amortization of program rights		6,534			5,911			12,389			11,635
Corporate		5,099			3,930			10,354			8,028
Depreciation and amortization of intangible assets		8,873			8,041			16,912			15,817
Total operating costs		74,450			67,760			144,372			132,488
Operating income		23,992			28,578			32,509			43,694
Other (income) expense:
Interest expense, net		10,835			11,872			21,745			23,526
Share 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			4,447
Other, net		(235	)		339			166			220
Total other expense, net		6,988			7,249			30,651			20,564
Income from continuing operations before provision for income taxes and cumulative effect of change in accounting principle		17,004			21,329			1,858			23,130
Provision for income taxes		6,909			5,403			2,083			9,200
Income (loss) from continuing operations before cumulative effect of change in accounting principle		10,095			15,926			(225	)		13,930
Discontinued 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			—			1,284
Cumulative effect of change in accounting principle, net of tax effect of $0		—			—			—			(3,290	)
Net income (loss)	$	10,095		$	14,617		$	(225	)	$	15,980
Basic income (loss) per common share:
Income (loss) from continuing operations before cumulative effect of change in accounting principle	$	0.20		$	0.32		$	—		$	0.28
Loss (income) from discontinued operations, net of tax		—			—			—			—
Loss from sale of discontinued operations, net of tax		—			0.03			—			0.03
Cumulative effect of change in accounting principle, net of tax		—			—			—			(0.07	)
Net income (loss)		0.20			0.29			—			0.32
Weighted — average number of common shares outstanding used in calculating basic income (loss) per common share		50,633			50,271			50,573			50,232
Diluted income (loss) per common share:
Income (loss) from continuing operations before cumulative change in accounting principle	$	0.17		$	0.28		$	—		$	0.25
Loss (income) from discontinued operations, net of tax		—			—			—			—
Loss from sale of discontinued operations, net of tax		—			0.02			—			0.02
Cumulative effect of change in accounting principle, net of tax		—			—			—			(0.06	)
Net income (loss)		0.17			0.25			—			0.29
Weighted — average number of common shares outstanding used in calculating diluted income (loss) per common share		54,236			54,084			50,573			54,106

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

3

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	)	$	15,980
Adjustment to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization of intangible assets		16,912			15,817
Amortization of financing costs and note discounts		3,207			4,042
Amortization of program rights		12,389			11,635
Program payments		(13,817	)		(12,074	)
Loss on early extinguishment of debt		12,330			4,447
Cumulative 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			7,111
Stock-based compensation		1,753			229
Other, net		547			322
Changes in operating assets and liabilities, net of acquisitions and disposals:
Accounts receivable		(4,585	)		1,863
Program rights, net of program obligations		(405	)		356
Other 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	)		5,352
Net cash provided by operating activities		14,405			34,552
INVESTING 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			3,260
Acquisition of broadcast licenses		(232	)		(9,152	)
Payments for business combinations		(85,000	)		—
Proceeds from sale of broadcast licenses and related operating assets		—			24,000
Other, net		14			2
Net cash (used in) provided by investing activities		(86,826	)		7,448
FINANCING ACTIVITIES:
Net proceeds on exercises of employee stock options and phantom stock units and employee stock purchase plan issuances		1,650			1,256
Proceeds from issuance of long-term debt		345,000			—
Long-term debt financing costs		(6,018	)		(144	)
Net proceeds from revolver debt		60,000			8,000
Principal 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	)		6,036
Cash and cash equivalents at the beginning of the period		14,797			9,475
Cash and cash equivalents at the end of the period	$	10,960		$	15,511

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

4

LIN TV CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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. All of the consolidated wholly-owned subsidiaries of LIN Television fully and unconditionally guarantee all the Company’s debt on a joint and several basis.

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

These condensed consolidated financial statements have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The Company filed audited financial statements for the year ended December 31, 2004 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 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 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 consolidates the results of operations and financial condition of Banks Broadcasting in accordance with FIN 46R — “Consolidation of Variable Interest Entities (Revised December 2003) — an Interpretation of ARB No. 51.” All intercompany transactions have been eliminated in consolidation. 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, 2005.

Hicks Muse has a substantial economic interest in 21^st Century Group, LLC which owns 18% of the preferred stock of Banks Broadcasting. This constitutes a 36% interest in the preferred stock of Banks Broadcasting as it is reflected on the Company’s balance sheet.

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

Assets
Cash	$	97
Accounts receivable		899
Program rights, short-term		757
Other current assets		46
Property and equipment		5,048
Program rights, long-term		662
Broadcast licenses		29,238
Total assets	$	36,747

Liabilities and Equity
Accounts payable	$	396
Program obligations, short-term		793
Other accrued expenses		404
Program obligations, long-term		525
Deferred income taxes, net		4,805
Preferred stock		34,764
Total liabilities and equity		41,687
Deficit	$	(4,940	)

5

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

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, mark-to-market of derivative instruments, valuation of intangible assets, deferred tax assets and net assets of businesses acquired. Actual results could differ from these estimates.

Note 2 — Stock-Based Compensation:

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

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

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2005			2004			2005			2004
Net income (loss), as reported	$	10,095		$	14,617		$	(225	)	$	15,980
Add: Stock-based employee compensation expense, included in reported net income (loss), net of related tax effect		382			23			1,052			137
Deduct: 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
Basic net income (loss) per common share, as reported	$	0.20		$	0.29		$	—		$	0.32
Basic net income per common share, pro forma	$	0.20		$	0.28		$	—		$	0.29
Diluted net income (loss) per common share, as reported	$	0.17		$	0.25		$	—		$	0.29
Diluted net income per common share, pro forma	$	0.16		$	0.24		$	—		$	0.26

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, 2005 and 2004, respectively:

	Three Months Ended June 30,				Six Months Ended June 30,
	2005		2004		2005		2004
Volatility		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 years
Dividend yields		0%		0%		0%		0%

Note 3 — Acquisitions and Dispositions:

On March 31, 2005, the Company acquired the broadcast licenses and certain operating assets and liabilities of 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 the Company’s revolving credit facility.

6

In addition to the $18.0 million of program obligations recorded by the Company in connection with the acquisition of WNDY-TV and WWHO-TV, the Company recorded $21.3 million in other liabilities related to estimated losses on acquired program obligations; representing the estimated excess of program obligations over the fair value of program rights that are unrecorded in accordance with SFAS No. 63 “Accounting for Broadcasters.” The Company also recorded $1.6 million in other liabilities in connection with the acquisition of WNDY-TV and WWHO-TV relating to employee severance costs and certain contractual costs as a result of the Company’s plans to centralize the master control operations of WNDY-TV and WWHO-TV at the Company’s transmission facility in Indianapolis, Indiana as well as transaction costs in connection with the acquisitions.

The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition. The Company is in the process of obtaining third-party valuations of the assets acquired and therefore the allocation of the purchase price is preliminary (in thousands):

	WNDY-TV		WWHO-TV
Accounts receivable	$	437	$	87
Program rights, short-term		2,239		2,134
Other current assets		27		56
Property and equipment		7,373		7,433
Program rights, long-term		1,239		1,777
Broadcast licenses and other intangibles		32,687		25,527
Goodwill		21,654		11,232
Deferred tax assets		7,868		3,872
Total assets	$	73,524	$	52,118
Other accrued expenses		911		378
Program obligations, short-term		4,803		2,980
Program obligations, long-term		6,449		3,784
Other long-term liabilities		13,861		7,476
Total liabilities	$	26,024	$	14,618
Purchase Price	$	47,500	$	37,500

The following table sets forth unaudited pro forma information of the Company as if the acquisition of WNDY-TV and WWHO-TV had occurred on January 1, 2004:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2005		2004		2005			2004
Net revenues	$	98,442	$	102,241	$	181,537		$	187,107
Operating income		23,992		29,135		31,805			44,274
Net income (loss)		10,095		14,764		(808	)		15,965
Basic net income (loss) per common share	$	0.20	$	0.29	$	(0.02	)	$	0.32
Diluted net income (loss) per common share	$	0.17	$	0.23	$	(0.02	)	$	0.27

On January 14, 2004 and May 6, 2004, the Company purchased the broadcast license and certain assets of WIRS-TV in Yauco, Puerto Rico for $4.5 million and WTIN-TV in Ponce, Puerto Rico for $4.9 million, respectively. Both purchases were funded by borrowings from the Company’s former revolving credit facility.

On May 14, 2004, the Company completed the sale of WEYI-TV, the NBC affiliate serving Flint, Michigan, for $24.0 million. The operating results of this station for the three and six-month periods ended June 30, 2004 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.”

7

The following table summarizes the net revenues and pre-tax income for WEYI-TV included in the historical results:

	Three Months Ended		Six Months Ended
	June 30, 2004		June 30, 2004
Net revenues	$	1,230	$	3,257
Operating income		285		960
Net income		263		884

Note 4 — Investments:

The Company has investments in two ventures with third parties, through which it has an interest in television stations. The following presents the Company’s basis in these ventures (in thousands):

	June 30,		December 31,
	2005		2004
NBC joint venture	$	54,274	$	55,604
WAND (TV) Partnership		10,192		10,209
	$	64,466	$	65,813

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 in the joint venture. The Company received distributions of $0 and $1.6 million from the joint venture in the three months ended June 30, 2005 and 2004, respectively, and $3.1 million and $3.3 million in the six months ended June 30, 2005 and 2004, respectively.

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

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2005			2004			2005			2004
Revenue	$	23,394		$	29,318		$	41,700		$	47,759
Other expense		(16,379	)		(16,486	)		(33,233	)		(32,434	)
Net income		7,015			12,832			8,467			15,325

	June 30,		December 31,
	2005		2004
Current assets	$	10,910	$	12,675
Non-current assets		232,760		233,957
Current liabilities		1,269		724
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 in the partnership. 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 under this arrangement were $478,000 as of December 31, 2004. There was no amount due under this arrangement as of June 30, 2005.

8

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

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2005		2004			2005			2004
Net revenues	$	1,636	$	1,664		$	3,145		$	3,297
Operating income (loss)		88		(54	)		(74	)		(104	)
Net income (loss)		98		(54	)		(51	)		(103	)

	June 30,		December 31,
	2005		2004
Current assets	$	3,498	$	3,317
Non-current assets		23,958		24,283
Current liabilities		854		917
Non-current liabilities		2		32

Note 5 — Intangible Assets:

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

	June 30,			December 31,
	2005			2004
Amortized Intangible Assets:
LMA purchase options	$	3,300		$	3,300
Network affiliations		564			173
Other intangibles		3,116			2,173
Accumulated amortization		(3,442	)		(2,776	)
		3,538			2,870
Unamortized Intangible Assets:
Broadcast licenses		1,120,311			1,063,265
Total broadcast licenses and other intangible assets, net	$	1,123,849		$	1,066,135
Goodwill		615,997			583,105
Other intangibles		58			—
Total intangible assets, net	$	1,739,904		$	1,649,240

The acquisition of WNDY-TV and WWHO-TV on March 31, 2005 increased amortized intangible assets by $1.3 million, increased broadcast licenses and goodwill by $56.8 million and $32.9 million, respectively, and increased other unamortized intangible assets by $0.1 million. during the six months ended June 30, 2005. The Company is in the process of obtaining third-party valuations of all acquired intangible assets; thus, the allocation of the purchase price of WNDY-TV and WWHO-TV is based on preliminary estimates.

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

9

	Three Months Ended				Six Months Ended				Estimated amortization expense
	June 30,				June 30,				For the year ended December 31,
	2004		2005		2004		2005		2005		2006		2007		2008		2009
Amortization expense	$	277	$	400	$	555	$	666	$	1,932	$	292	$	120	$	80	$	—

The Company’s 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. The Company has a material amount of intangible assets, and if 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 the Company’s total assets as of June 30, 2005 consists of unamortized intangible assets. Intangible assets principally include broadcast licenses and goodwill. SFAS No. 142, “Goodwill and Other Intangible Assets,” requires, among other things, the impairment testing of goodwill. If at any point in the future the value of these intangible assets decreased, the Company could be required to incur an impairment charge that could significantly adversely impact reported results of operations and stockholders’ equity.

Note 6 —Debt:

Debt consisted of the following (in thousands):

	June 30,		December 31,
	2005		2004
Credit Facility	$	230,000	$	158,500
$166,440, 8% Senior Notes due 2008 (net of discount of $2,884)		—		163,556
6 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		110,785
Total debt		717,891		632,841
Less current portion		8,500		6,573
Total long-term debt	$	709,391	$	626,268

On January 28, 2005, the Company issued an additional $175.0 million aggregate principal amount of its 6¹/2% Senior Subordinated Notes due 2013. The proceeds from the issuance of the 6¹/2% Notes were used to repurchase $166.4 million principal amount of the 8% Senior Notes due 2008.

The Company entered into a new credit facility on March 11, 2005 that included a $170.0 million term loan with a maturity date of March 11, 2011 and a $160.0 million revolving credit facility with a maturity date of June 30, 2010. The proceeds of the term loan were used to repay the balance on an existing term loan. The Company used $50.0 million of the revolving credit facility and existing cash on hand to acquire WNDY-TV and WWHO-TV on March 31, 2005.

The Company incurred charges of $12.3 million during the six-month period ended June 30, 2005 related to the write-off of unamortized discounts, deferred financing fees and associated costs as a result of the early extinguishment of debt. Financing fees related to the 6¹/2% Senior Subordinated Notes and the credit facility of $6.0 million were capitalized and are being amortized over the term of the related debt.

The Company incurred charges of $1.5 million and $4.4 million during the three and six months 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 $38.6 million of 8% Senior Notes in a negotiated transaction with an institutional investor.

During the three months ended June 30, 2005, the Company entered into an interest rate swap agreement in the notional amount of $100.0 million to manage exposure to interest rate risk associated with the variable rate portion of its credit facility. This agreement is not designated as a hedging instrument under SFAS No. 133. The fair value of this agreement at June 30, 2005 was a liability of $1.6 million.

The current portion of long-term debt reflects $8.5 million of quarterly amortization of a term loan under the credit facility beginning in March of 2006.

Note 7 — Related Party Transactions:

Financial Advisory Agreement.The Company is party to an agreement with Hicks Muse Partners, pursuant to which the Company reimburses Hicks Muse Partners, an affiliate of Hicks Muse, for certain 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 $7,000 and $15,000 for the three and six months ended June 30, 2005, respectively, and $5,000 and $11,000 for the three and six months ended June 30, 2004, respectively.

10

Centennial Cable of Puerto RicoThe Company is party to an agreement with Centennial Cable of Puerto Rico, in which Hicks Muse has a substantial economic interest. Centennial Cable provides the Company advertising and promotional services. The Company incurred fees under this arrangement of $36,000 and $65,000 for the three and six months ended June 30, 2005, respectively, and $29,000 and $49,000 for the three and six months ended June 30, 2004, respectively.

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 21^st Century Group, LLC; which owns 18% of Banks Broadcasting. Prior to the consolidation of Banks Broadcasting in accordance with FIN 46R, the Company recognized approximately $50,000 in management fee income for the three months ended March 31, 2004 under the management services agreement.

Note 8 — Contingencies:

GECC Note.General Electric Capital Corporation (“GECC”) provided debt financing in connection with the formation of the joint venture with NBC in the form of an $815.5 million 25-year non-amortizing senior secured note bearing an initial interest rate of 8.0% per annum (“the GECC note”). During the last five years, the joint venture has produced cash flows to support the interest payments and to maintain minimum levels of required working capital reserves. In addition, the joint venture has made cash distributions to the Company and to NBC from the excess cash generated by the joint venture of approximately $34.5 million on average each year during the past three years. Accordingly, the Company expects that the interest payments on the GECC note will be serviced solely by the cash flow of the joint venture. The GECC note is not an obligation of the Company, however, the note is recourse to the joint venture with NBC and is guaranteed by LIN TV Corp. If the joint venture were unable to pay principal or interest on the GECC note and GECC could not otherwise recoup its principal from the joint venture, GECC could require LIN TV Corp. to pay the shortfall of any outstanding amounts under the GECC note. If this happened, the Company could experience material adverse consequences, including:

• GECC could force LIN TV Corp. to sell the stock of LIN Television held by LIN TV Corp. to satisfy outstanding amounts under the GECC note;

• if more than 50% of the ownership of LIN Television had to be sold to satisfy the GECC Note, it could cause an acceleration of the Company’s 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.

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

Note 9 — Retirement Plans:

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

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

11

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2005			2004			2005			2004
Service cost	$	549		$	500		$	1,098		$	1,000
Interest cost		1,350			1,401			2,700			2,802
Expected return on plan assets		(1,435	)		(1,450	)		(2,870	)		(2,900	)
Amortization of prior service cost		30			39			60			78
Amortization of net loss		241			80			482			160
Net periodic benefit cost	$	735		$	570		$	1,470		$	1,140

The Company contributed $200,000 and $400,000 to the U.S. defined benefit plan during the three and six months ended June 30, 2005, respectively, and expects to contribute a total of $0.8 million during 2005. The Company also maintains a non-qualified, unfunded Supplemental Excess Retirement Plan (“SERP”) from which the Company paid out to retired employees a total of $69,000 during the three and six months ended June 30, 2005.

Note 10 — Earnings per Share:

Basic and diluted income (loss) per common share are computed in accordance with SFAS No. 128, “Earnings per Share.” Basic income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding. There is no difference between basic and diluted income (loss) per common share for the six months ended June 30, 2005 since potential common shares from the exercises of stock options and phantom units are anti-dilutive to loss from continuing operations and therefore are excluded from the calculation. Options to purchase 3,806,000 shares of common stock and phantom units exercisable into 260,000 shares of common stock were outstanding as of June 30, 2005, but were not included in the calculation of diluted earnings per share because the effect of their inclusion would have been anti-dilutive.

Following is a reconciliation of basic and diluted income (loss) per common share (in thousands, except per share amounts):

	Three Months Ended June 30,						Six Months Ended June 30,
	2005			2004			2005			2004
Numerator for income (loss) per common share calculation:
Net income (loss) available to common shareholders, basic	$	10,095		$	14,617		$	(225	)	$	15,980
Interest expense on contingently convertible debt, net of tax		1,137			1,147			—			2,268
Derivative income, net of tax		(2,195	)		(2,178	)		—			(2,772	)
Net income (loss) available to common shareholders, diluted	$	9,037		$	13,586		$	(225	)	$	15,476
Denominator for income (loss) per common share calculation:
Weighted average common shares, basic		50,633			50,271			50,573			50,232
Effect of dilutive securities:
Stock options		250			460			—			521
Contingently convertible debt		3,353			3,353			—			3,353
Weighted average common shares, diluted		54,236			54,084			50,573			54,106
Basic income (loss) per common share	$	0.20		$	0.29		$	—		$	0.32
Diluted income (loss) per common share	$	0.17		$	0.25		$	—		$	0.29

Note 11 – Recent Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board (FASB) issued SFAS No. 123R,Share-Based Payment,which was to be effective for reporting periods beginning after June 15, 2005. In April 2005, the FASB announced that the effective date of SFAS No. 123(R), has been delayed until the first quarter of 2006. SFAS No. 123R requires the Company to recognize the cost of employee services received in exchange for the Company’s equity instruments. Currently, in accordance with APB Opinion 25, the Company records the

12

intrinsic value of stock based compensation as expense. Accordingly, no compensation expense is currently recognized for fixed stock option plans as the exercise price equals the stock price on the date of grant. Under SFAS No. 123R, the Company will be required to measure compensation expense over the vesting period of the options based on the fair value of the stock options at the date the options are granted. SFAS No. 123R allows for the use of the Black-Scholes or a lattice option-pricing model to value such options. As allowed by SFAS No. 123R, the Company can elect either Modified Prospective Application, which applies the Statement to new awards and modified awards after the effective date, and to any unvested awards as service is rendered on or after the effective date, or Modified Retrospective Application which can apply the effect of the statement to all prior years for which SFAS No. 123 was effective. The Company is currently evaluating which valuation model and method of application will be used.

In March 2005, the SEC staff issued a staff accounting bulletin (“SAB 107”) which expresses the views of the staff regarding the interaction between SFAS No. 123(R) and certain SEC rules and regulations and provide the staff’s views regarding the valuation of share-based payment arrangements for public companies. In particular, SAB 107 provides guidance related to share-based payment transactions with non-employees, the transition from nonpublic to public entity status, valuation methods (including assumptions such as expected volatility and expected term), the accounting for certain redeemable financial instruments issued under share-based payment arrangements, the classification of compensation expense, non-GAAP financial measures, first-time adoption of SFAS No. 123(R) in an interim period, capitalization of compensation cost related to share-based payment arrangements, the accounting for income tax effects of share-based payment arrangements upon adoption of Statement 123(R), the modification of employee share options prior to adoption of SFAS No. 123(R) and disclosures in Management’s Discussion and Analysis subsequent to adoption of SFAS No. 123(R).

In March 2005, the FASB issued FIN No. 47, “Accounting for Conditional Asset Retirement Obligations – an Interpretation of FASB Statement No. 143”, which is effective for all reporting periods ending after December 15, 2005. FIN 47 requires that an entity shall recognize a liability for the fair value of a conditional asset retirement obligation if the fair value of the liability can be reasonable estimated, rather than when the obligation is incurred, generally upon acquisition, construction, or development and/or through the normal operation of the asset as required by SFAS No. 143. An asset retirement obligation would be reasonably estimable if (a) it is evident that the fair value of the obligation is embodied in the acquisition price of the asset, (b) an active market exists for the transfer of the obligation, or (c) sufficient information exists to apply an expected present value technique. The provisions of FIN 47 are not expected to have a material impact on the Company’s consolidated financial statements.

In May 2005, the FASB issued FASB Statement No. 154, “Accounting Changes and Error Corrections – a replacement of APB Opinion No. 20 and FASB Statement No. 3” (“FAS 154”), which is effective for changes and corrections of errors made in fiscal years beginning after December 15, 2005. FAS 154 requires retrospective application to prior periods’ financial statements of changes in accounting principle unless it is impracticable to determine the period-specific effects or the cumulative effect of the change. The provisions of FAS 154 are not expected to have a material impact on the Company’s consolidated financial statements.

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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 actual results may 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.

14

LIN TV CORP

MANAGEMENT’S DISCUSSION AND ANALYSIS – Continued

Executive Summary

We are an owner and operator of 25 television stations in 15 mid-sized markets in the United States and Puerto Rico. Our operating revenues are derived from the sale of advertising time to local and national advertisers and, to a much lesser extent, from compensation paid by networks for the broadcast of their programming and from other broadcast-related activities.

We recorded net income of $10.1 million and a net loss of $0.2 million in the three and six months ended June 30, 2005, respectively, compared with net income of $14.6 million and $16.0 million for the same periods in the prior year. The following are some of our operating highlights for the six months ended June 30, 2005:

• We issued an additional $175.0 million in aggregate principal amount of our 6¹/2% 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

The broadcast television industry relies primarily on advertising revenues and faces increased competition largely from the effects of new technologies. The following summarizes certain of the competitive forces and risks that may impact our future operating results.

• 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

LIN TV CORP

MANAGEMENT’S DISCUSSION AND ANALYSIS — Continued

of goodwill. If at any point in the future the value of these intangible assets decreased, we could be required to incur an impairment charge that could significantly adversely impact our reported results of operations and stockholders’ equity.

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 of America.

The preparation of our unaudited condensed consolidated financial statements requires us to make estimates and judgments that affect our 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 statements. 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 1) included in Item 15 of our Annual Report on Form 10-K for the year ended December 31, 2004. Since December 31, 2004, 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.

16

LIN TV CORP

MANAGEMENT’S DISCUSSION AND ANALYSIS – Continued

Results of Operations

Set forth below are significant factors that contributed to our operating results for the three and six months ended June 30, 2005 and 2004, respectively.

	Three Months Ended									Six Months Ended
	June 30,						%			June 30,						%
	2005			2004			Change			2005			2004			Change
National 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 revenuesconsist primarily of national, local and political airtime sales, net of sales adjustments and agency commissions. Additional, but less significant, amounts are generated from network compensation, internet revenues, barter revenues, production revenues, tower rental income and carriage or retransmission agreements.

Net revenues increased $2.1 million and $0.7 million for the three and six months ended June 30, 2005, respectively, compared to the same periods last year. The increase is primarily the result of the acquisition of WNDY-TV and WWHO-TV on March 31, 2005 which added $5.0 million net revenue in each of the three and six months ended June 30, 2005. This increase is offset by decreased political revenues in both the three and six month periods of 2005. We expect political revenue to decrease substantially in 2005, as it is not an election year.

Operating Costs and Expenses

Direct operating expenses (excluding depreciation and amortization of intangible assets), consisting primarily of news, engineering, programming and music licensing costs and excluding depreciation and amortization expense, increased $1.7 million, or 7%, and $3.1 million, or 6%, for the three and six months ended June 30, 2005, respectively, compared to the same periods last year. The increase is primarily due to general cost increases in salaries, an increase in local production costs in Puerto Rico, our acquisition of

17

LIN TV CORP

MANAGEMENT’S DISCUSSION AND ANALYSIS — Continued

WNDY-TV and WWHO-TV on March 31, 2005, which added $0.4 million of expenses to the three and six months ended June 30, 2005 and the consolidation of Banks Broadcasting on March 31, 2004 which added $0.3 million of such expenses for the three months ended March 31, 2005.

Selling, general and administrative expenses,consisting primarily of employee salaries, sales commissions and other employee benefit costs, advertising and promotional expenses, increased $2.4 million, or 10%, and $4.7 million, or 10%, for the three and six months ended June 30, 2005, respectively, compared to the same periods last year. The increase is primarily the result of $1.5 million in additional expenses related to our acquisition of WNDY-TV and WWHO-TV on March 31, 2005 and increased expenses of $0.8 million for the three months ended March 31, 2005 attributable to the consolidation of Banks Broadcasting effective March 31, 2004. The remaining increase resulted primarily from a combination of a general cost increase in salespersons commissions and rating service fees for the three months ended June 30, 2005.

Amortization of program rightsrepresents costs associated with the acquisition of syndicated programming, features and specials. Amortization of program rights increased $0.6 million, or 11%, and $0.8 million, or 6%, for the three and six months ended June 30, 2005, respectively, compared to the same periods last year. The acquisition of WNDY-TV and WWHO-TV on March 31, 2005 increased program amortization $1.2 million for the three and six months ended June 30, 2005. This increase was offset by lower programming costs at our remaining stations.

Corporate expenses, consisting of costs associated with the centralized management of our stations, increased $1.2 million and $2.3 million for the three and six months ended June 30, 2005, respectively, compared to the same periods last year. The increase was primarily attributable to increased stock-based compensation of $0.5 and $1.3 million for the three and six months ended June 30, 2005, respectively.

Depreciation and amortization of intangible assetsincreased $0.8 million, or 10%, and $1.1 million, or 7%, for the three and six months ended June 30, 2005, respectively, compared to the same periods last year. The increase is primarily the result of our acquisition of WNDY-TV and WWHO-TV on March 31, 2005 which added $0.5 million in depreciation and amortization for the three and six months ended June 30, 2005.

18

LIN TV CORP

MANAGEMENT’S DISCUSSION AND ANALYSIS – Continued

Other (Income) Expense

Interest expense

The following table summarizes our total interest expense:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2005		2004			2005			2004
Components of interest expense, including discount and financing fee amortization
Credit Facility	$	2,420	$	2,308		$	4,764		$	4,665
6 1/2% Senior Subordinated Notes		6,465		3,416			11,872			6,790
2.50% Exchangeable Senior Subordinated Debentures		1,896		1,912			3,766			3,781
8% Senior Notes		—		4,317			1,501			8,456
Other interest (income) expense, net		54		(81	)		(158	)		(166	)
Total interest expense, net	$	10,835	$	11,872		$	21,745		$	23,526

Interest expense, netdecreased $1.0 million, or 9%, and $1.8 million, or 8%, for the three and six months ended June 30, 2005, respectively, compared to the same periods last year, due to lower outstanding borrowings and a lower average interest rate.

Gain on derivative instrumentsconsists of mark-to-market adjustments of the embedded derivative features contained in our 2.50% Exchangeable Senior Subordinated Debentures and interest rate swap arrangements; which we entered into during the second quarter of 2005. We used an interest rate swap arrangement, not designated as a hedging instrument under SFAS No. 133, “Accounting for Derivative and Hedging Activities”, as amended, to manage exposure to interest rate risk associated with the variable rate portion of our credit facility. Gain on derivative instruments decreased $1.5 million and $3.0 million for the three and six months ended June 30, 2005, respectively, due to fluctuations in market interest rates.

Other Items

We recorded losses of $12.3 million and $4.4 million for the six months ended June 30, 2005 and 2004, respectively, related to the write-off of unamortized financing fees and discounts and associated costs in connection with the early extinguishment of our 8% Senior Notes due 2008.

Provision for Income Taxes

We recorded a provision for income taxes of $6.9 million and $2.1 million for the three months and six months ended June 30, 2005, respectively, compared to $5.4 million and $9.2 million for the same periods last year, respectively. The provision for income taxes for the six months ended June 30, 2005 included a benefit resulting from a discrete tax income benefit of $4.3 million on the $12.3 million loss on extinguishment of debt incurred during the first quarter of 2005. Our annual effective income tax rate was 43.9% as of June 30, 2005, excluding the $12.3 million loss on the extinguishment of debt. The effective income tax rate increased from 42.1% due primarily to a non-deductible withdrawal from the executive deferred compensation plan. In 2004, we used the discrete method to calculate income tax expense

19

LIN TV CORP

MANAGEMENT’S DISCUSSION AND ANALYSIS — Continued

Liquidity and Capital Resources

Our principal sources of funds for working capital have historically been cash from operations, the issuance of debt securities and borrowings under our credit facility. At June 30, 2005, we had cash of $11.0 million and a $160.0 million committed revolving credit facility of which $60.0 million was outstanding at June 30, 2005, leaving $100.0 million committed, but undrawn.

Description of Indebtedness

On January 28, 2005, we issued an additional $175.0 million aggregate principal amount of our 6¹/2% Senior Subordinated Notes due 2013. The proceeds from the sale of the 6¹/2% Notes were used to repurchase or redeem $166.4 million principal amount of the 8% Senior Notes due 2008.

We replaced our credit facility on March 11, 2005. Under the 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, of which $50.0 million was used in combination with cash on hand to acquire WNDY-TV and WWHO-TV during the first quarter of 2005. We are required to make mandatory payments on the new term loan of $4.3 million per quarter beginning March 31, 2006. The revolving credit facility and term loan expire on March 11, 2010 and 2011, respectively.

The following summarizes our indebtedness (in thousands):

	June 30,		December 31,
	2005		2004
Credit Facility	$	230,000	$	158,500
$166,440, 8% Senior Notes due 2008 (net of discount of $2,884 at December 31, 2004)		—		163,556
6 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		110,785
Total debt		717,891		632,841
Less current portion		8,500		6,573
Total long-term debt	$	709,391	$	626,268

Our revolving credit facility may be used for general corporate purposes, acquisitions of certain assets and the redemption of up to $50 million of our publicly traded securities. The credit facility permits us to prepay loans and to permanently reduce revolving credit commitments, in whole or in part, at any time. We are required to make principal payments of our terms loans in the amount of $4.3 million per quarter, starting on March 31, 2006, and additional prepayments based on certain debt transactions or the disposal of certain assets.

Our credit facility contains 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 businesses conducted by them, make capital expenditures, or engage in certain transactions with

20

LIN TV CORP

MANAGEMENT’S DISCUSSION AND ANALYSIS — Continued

affiliates and otherwise restrict certain corporate activities. We are required, under the terms of the our credit facility, to comply with specified financial ratios, including minimum interest coverage ratio, maximum leverage ratio and minimum fixed charge coverage ratio. At June 30, 2005, we were in compliance with the covenants under the credit facility.

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

Our 6 1/2%Senior Subordinated Notes bear interest at the rate of 6.5% per annum, payable semi-annually in arrears, with a final maturity date of May 15, 2013. Our 2.50% Exchangeable Senior Subordinated Debentures bear interest at the rate of 2.50% per annum, payable semi-annually in arrears, with a final maturity date of May 15, 2033. The holders of our 2.50% Exchangeable Senior Subordinated Debentures can require us to repurchase all or a portion of the debentures on each of May 15, 2008, 2013, 2018, 2023 and 2028.

Our 6 1/2% Senior Subordinated Notes and our 2.50% Exchangeable Senior Subordinated Debentures are unsecured and are subordinated in right of payment to amounts owed under our credit facility.

The indentures governing the 6 1/2% Senior Subordinated Notes and 2.50% Exchangeable Senior Subordinated Debentures contain covenants limiting, 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. The indentures also contain change of control provisions that may require us to purchase all or a portion of our 6 1/2% Senior Subordinated Notes at a price equal to 101% of the principal amount of the notes, together with accrued and unpaid interest, and our 2.50% Exchangeable Senior Subordinated Debentures at a price equal to 100% of the principal amount of the notes, together with accrued and unpaid interest.

Contractual Obligations

The following table summarizes our estimated material contractual cash obligations at June 30, 2005 (in thousands)

	July-
	December
	2005		2006-2008		2009-2010		Thereafter		Total
Principal payments and mandatory redemptions on debt (1)	$	—	$	51,000	$	94,000	$	585,000	$	730,000
Cash interest on debt (2)		19,011		96,407		55,426		98,139		268,983
Program payments (3)		17,433		60,225		14,507		8,248		100,413
Operating leases (4)		445		2,139		681		3,398		6,663
Local marketing agreement payments (5)		1,012		1,073		—		—		2,085
Total	$	37,901	$	210,844	$	164,614	$	694,785	$	1,108,144

21

LIN TV CORP

MANAGEMENT’S DISCUSSION AND ANALYSIS — Continued

(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 61/2% 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 61/2% 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 activitiesdecreased $20.1 million to $14.4 million for the six months ended June 30, 2005 compared to $34.6 million in the same period last year. The decrease was the result of a decrease in our operating income for the six months ended June 30, 2005.

Net cash used in investing activitieswas $86.8 million for the six months ended June 30, 2005 compared to net cash provided by investing activities of $7.4 million in the same period last year. This change was primarily the result of our acquisition of WNDY-TV and WWHO-TV in the six months ended June 30, 2005 for $85.0 million and our sale of WEYI-TV for $24.0 million in the six months ended June 30, 2004.

22

LIN TV CORP

MANAGEMENT’S DISCUSSION AND ANALYSIS — Continued

Net cash provided by financing activitiesincreased $104.6 million to $68.6 million for the six months ended June 30, 2005 compared to net cash used in financing activities of $36.0 million for the same period last year. This increase is the result of the proceeds from the issuance of our long-term debt of $345.0 million, of which $170.0 is from our credit facility and an additional $175.0 million principal amount of our 6¹/2% Senior Subordinated Notes. This was offset by an increase in our principal payments on long-term debt of $324.9 million in the six months ended June 30, 2005 compared to $42.1 million for the same period last year due to the repayment of $166.4 million of our 8% Senior Notes and $158.5 million of amounts owed under our prior credit facility.

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 credit facility, will be sufficient to meet our anticipated requirements for working capital, capital expenditures, interest payments and scheduled principal payments for at least the next 12 months.

Recent Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board (FASB) issued SFAS No. 123(R),Share-Based Payment,which was to be effective for reporting periods beginning after June 15, 2005. In April 2005, the FASB announced that the effective date of SFAS 123(R), has been delayed until the first quarter of 2006. SFAS No. 123(R) requires us to recognize the cost of employee services received in exchange for the Company’s equity instruments. Currently, in accordance with APB Opinion 25, we record the intrinsic value of stock based compensation as expense. Accordingly, no compensation expense is currently recognized for fixed stock option plans as the exercise price equals the stock price on the date of grant. Under SFAS No. 123(R), we will be required to measure compensation expense over the vesting period of the options based on the fair value of the stock options at the date the options are granted. SFAS No. 123(R) allows for the use of the Black-Scholes or a lattice option-pricing model to value such options. As allowed by SFAS No. 123(R), we can elect either Modified Prospective Application, which applies the Statement to new awards and modified awards after the effective date, and to any unvested awards as service is rendered on or after the effective date, or Modified Retrospective Application which can apply the effect of the statement to all prior years for which SFAS No. 123(R) was effective. We are currently evaluating which valuation model and method of application will be used.

In March 2005, the SEC staff issued a Staff Accounting Bulletin (“SAB 107”) which express views of the staff regarding the interaction between SFAS No. 123(R) and certain SEC rules and regulations and provide the staff’s views regarding the valuation of share-based payment arrangements for public companies. In particular, SAB 107 provides guidance related to share-based payment transactions with non-employees, the transition from nonpublic to public entity status, valuation methods (including assumptions such as expected volatility and expected term), the accounting for certain redeemable financial instruments issued under share-based payment arrangements, the classification of compensation expense, non-GAAP financial measures, first-time adoption of SFAS No. 123(R) in an interim period, capitalization of compensation cost related to share-based payment arrangements, the accounting for income tax effects of share-based payment arrangements upon adoption of SFAS No. 123(R), the modification of employee share options prior to adoption of SFAS No. 123(R) and disclosures in Management’s Discussion and Analysis subsequent to adoption of SFAS 123(R).

In March 2005, the FASB issued FASB Interpretation No. 47, “Accounting for Conditional Asset Retirement Obligations – an Interpretation of FASB Statement No. 143”, which is effective for all reporting periods ending after December 15, 2005. FIN 47 requires that an entity shall recognize a liability for the fair value of a conditional asset retirement obligation if the fair value of the liability can be reasonable estimated, rather than when the obligation is incurred, generally upon acquisition, construction, or development and/or through the normal operation of the asset as required by FASB Statement No. 143. An asset retirement obligation would be reasonably estimable if (a) it is evident that the fair value of the obligation is embodied in the acquisition price of the asset, (b) an active market exists for the transfer of the obligation, or (c) sufficient information

23

LIN TV CORP

MANAGEMENT’S DISCUSSION AND ANALYSIS — Continued

exists to apply an expected present value technique. The provisions of FIN 47 are not expected to have a material impact on our consolidated financial statements.

In May 2005, the FASB issued FASB Statement No. 154, “Accounting Changes and Error Corrections – a replacement of APB Opinion No. 20 and FASB Statement No. 3” (“FAS 154”), which is effective for changes and corrections of errors made in fiscal years beginning after December 15, 2005. FAS 154 requires retrospective application to prior periods’ financial statements of changes in accounting principle unless it is impracticable to determine the period-specific effects or the cumulative effect of the change. The provisions of FAS 154 are not expected to have a material impact on our consolidated financial statements.

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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 credit facilities, which are priced based on certain variable interest rate alternatives. There was $60.0 million outstanding as of June 30, 2005 under our revolving line of credit included in our credit facility.

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 credit facility as of June 30, 2005 would result in an estimated $0.6 million increase in annualized interest expense assuming a constant balance outstanding of $60.0 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. We also use an interest swap agreement, not designated as a hedging instrument under SFAS No. 133, in the notional amount of $100.0 million at June 30, 2005, to manage exposure to interest rate risk associated with the variable rate portion of our credit facility. These derivative instruments 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 instruments of $3.7 million and $3.2 million in the three and six months ended June 30, 2005, respectively, compared to a gain of $3.6 million and $4.6 million, respectively, for the same periods last year.

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

Item 4. Controls and Procedures

The Company’s management, with the participation of the Company’s chief executive officer and chief financial officer, evaluated the effectiveness of the Company’s disclosure controls and procedures as of June 30, 2005. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of the Company’s disclosure controls and procedures as of June 30, 2005, the Company’s chief executive officer and chief financial officer concluded that, as of such date, the Company’s disclosure controls and procedures were effective at the reasonable assurance level.

No change in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fiscal quarter ended June 30, 2005 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

25

Part II: Other Information

Item 1. Legal Proceedings

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

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

LIN TV Corp. held its 2005 Annual Meeting of Stockholders on May 4, 2005. Each of the following matters was approved by the stockholders by the following votes:

Proposal 1 — The election of one member to the Board of Directors to serve as a Class II Director for a term of three years.

Nominee:	For:		Against:		Withheld:		Broker Non-Votes:
Randall S. Fojtasek		87,588,345		2,500		810,377		0

Proposal 2 — The approval of an amendment to the Corporation’s Amended and Restated 2002 Stock Plan (i) increasing the number of shares of class A common stock reserved for issuance under the plan from 2,700,000 shares to 6,300,000 shares, (ii) permitting stock exchanges programs pursuant to which outstanding options could be exchanged for restricted stock, and (iii) permitting the repricing of stock option grants under the plan.

For:	Against:		Withheld:		Broker Non-Votes:
69,648,285		10,747,071		2,573,887		5,431,979	��

Proposal 3 — The approval of an amendment to the Corporation’s Amended and Restated 2002 Non-Employee Director Stock Plan (i) increasing the number of shares of class A common stock reserved for issuance under the plan from 200,000 shares to 400,000 shares, (ii) increasing the annual awards to directors, and (iii) permitting stock exchanges programs pursuant to which outstanding options could be exchanged for restricted stock.

For:	Against:		Withheld:		Broker Non-Votes:
69,716,941		13,211,429		40,873		5,431,979

Proposal 4 — The ratification of the selection of PricewaterhouseCoopers LLP as LIN TV’s independent registered public accounting firm for the fiscal year ending December 31, 2005.

For:	Against:		Withheld:		Broker Non-Votes:
88,364,517		32,623		4,082		0

Item 5. Other Information

On May 4, 2005, the stockholders of LIN TV Corp. approved the Amended and Restated 2002 Stock Plan, which (i) increased the number of shares of class A common stock reserved for issuance under the plan from 2,700,000 shares to 6,300,000 shares, (ii) permits stock exchange programs pursuant to which outstanding options could be exchanged for restricted stock, and (iii) permits the repricing of stock option grants under the plan.

The stockholders of LIN TV Corp. also approved the Amended and Restated 2002 Non-Employee Director Stock Plan, which (i) increased the number of shares of class A common stock reserved for issuance under

26

the plan from 200,000 shares to 400,000 shares, (ii) increased the annual awards to directors, and (iii) permits stock exchange programs pursuant to which outstanding options could be exchanged for restricted stock.

Item 6.Exhibits

Exhibits:

No.	Description
3.1.	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

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

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
Dated:
August 9, 2005	By:	/s/ Vincent L. Sadusky
		Vincent L. Sadusky
		Vice President — Chief Financial Officer and Treasurer
		By:	/s/ William A. Cunningham
		William A. Cunningham
		Vice President and Controller
		(Principal Accounting Officer)

29

Item 1. Financial Statements

LIN Television Corporation
Condensed Consolidated Balance Sheets	31
Condensed Consolidated Statements of Operations	32
Condensed Consolidated Statements of Cash Flows	33
Notes to Condensed Consolidated Financial Statements	34

30

LIN TV CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS

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

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

31

LIN TELEVISION CORPORATION
Condensed Consolidated Statements of Operations
(unaudited)

	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		$	176,182
Operating 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			50,020
Selling, general and administrative		26,884			24,488			51,646			46,988
Amortization of program rights		6,534			5,911			12,389			11,635
Corporate		5,099			3,930			10,354			8,028
Depreciation and amortization of intangible assets		8,873			8,041			16,912			15,817
Total operating costs		74,450			67,760			144,372			132,488
Operating income		23,992			28,578			32,509			43,694
Other (income) expense:
Interest expense, net		10,835			11,872			21,745			23,526
Share 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			4,447
Other, net		(235	)		339			166			220
Total other expense, net		6,988			7,249			30,651			20,564
Income from continuing operations before provision for income taxes and cumulative effect of change in accounting principle		17,004			21,329			1,858			23,130
Provision for income taxes		6,909			5,403			2,083			9,200
Income (loss) from continuing operations before cumulative effect of change in accounting principle		10,095			15,926			(225	)		13,930
Discontinued 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			—			1,284
Cumulative effect of change in accounting principle, net of tax effect of $0		—			—			—			(3,290	)
Net income (loss)	$	10,095		$	14,617		$	(225	)	$	15,980

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

32

LIN TELEVISION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

	Six months ended June 30,
	2005			2004
	(in thousands)
OPERATING ACTIVITIES:
Net (loss) income	$	(225	)	$	15,980
Adjustment to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization of intangible assets		16,912			15,817
Amortization of financing costs and note discounts		3,207			4,042
Amortization of program rights		12,389			11,635
Program payments		(13,817	)		(12,074	)
Loss on early extinguishment of debt		12,330			4,447
Cumulative 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			7,111
Stock-based compensation		1,753			229
Other, net		547			322
Changes in operating assets and liabilities, net of acquisitions and disposals:
Accounts receivable		(4,585	)		1,863
Program rights, net of program obligations		(405	)		356
Other 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	)		5,352
Net cash provided by operating activities		14,405			34,552
INVESTING 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			3,260
Acquisition of broadcast licenses		(232	)		(9,152	)
Payments for business combinations		(85,000	)		—
Proceeds from sale of broadcast licenses and related operating assets		—			24,000
Other, net		14			2
Net cash (used in) provided by investing activities		(86,826	)		7,448
FINANCING ACTIVITIES:
Net proceeds on exercises of employee stock options and phantom stock units and employee stock purchase plan issuances		1,650			1,256
Proceeds from issuance of long-term debt		345,000			—
Long-term debt financing costs		(6,018	)		(144	)
Net proceeds from revolver debt		60,000			8,000
Principal 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	)		6,036
Cash and cash equivalents at the beginning of the period		14,797			9,475
Cash and cash equivalents at the end of the period	$	10,960		$	15,511

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

33

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

Note 1 — Basis of Presentation:

LIN Television Corporation (“LIN Television” or 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. is the parent company of LIN Television Corporation.

LIN TV Corp. guarantees all debt of LIN Television. All of the consolidated wholly-owned subsidiaries of LIN Television fully and unconditionally guarantee all the Company’s debt on a joint and several basis.

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

These condensed consolidated financial statements have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The Company filed audited financial statements for the year ended December 31, 2004 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 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 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 consolidates the results of operations and financial condition of Banks Broadcasting in accordance with FIN 46R – “Consolidation of Variable Interest Entities (Revised December 2003) – an Interpretation of ARB No. 51.” All intercompany transactions have been eliminated in consolidation. 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, 2005.

Hicks Muse has a substantial economic interest in 21^st Century Group, LLC which owns 18% of the preferred stock of Banks Broadcasting. This constitutes a 36% interest in the preferred stock of Banks Broadcasting as it is reflected on the Company’s balance sheet.

34

LIN TELEVISION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

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

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

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, mark-to-market of derivative instruments, valuation of intangible assets, deferred tax assets and net assets of businesses acquired. Actual results could differ from these estimates.

Note 2 – Stock-Based Compensation:

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

The following table illustrates the effect on net (loss) income 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,
	2005			2004			2005			2004
Net income (loss), as reported	$	10,095		$	14,617		$	(225	)	$	15,980
Add: Stock-based employee compensation expense, included in reported net income (loss), net of related tax effect		382			23			1,052			137
Deduct: 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

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, 2005 and 2004, respectively:

35

LIN TELEVISION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

	Three Months Ended June 30,						Six Months Ended June 30,
	2005			2004			2005			2004
Volatility		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 years
Dividend yields		0	%		0	%		0	%		0	%

Note 3 — Acquisitions and Dispositions:

On March 31, 2005, the Company acquired the broadcast licenses and certain operating assets and liabilities of 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 the Company’s revolving credit facility.

In addition to the $18.0 million of program obligations recorded by the Company in connection with the acquisition of WNDY-TV and WWHO-TV, the Company recorded $21.3 million in other liabilities related to estimated losses on acquired program obligations; representing the estimated excess of program obligations over the fair value of program rights that are unrecorded in accordance with SFAS No. 63 “Accounting for Broadcasters.” The Company also recorded $1.6 million in other liabilities in connection with the acquisition of WNDY-TV and WWHO-TV relating to employee severance costs and certain contractual costs as a result of the Company’s plans to centralize the master control operations of WNDY-TV and WWHO-TV at the Company’s transmission facility in Indianapolis, Indiana as well as transaction costs in connection with the acquisition.

The following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition. The Company is in the process of obtaining third-party valuations of the assets acquired and therefore the allocation of the purchase price is preliminary (in thousands):

	WNDY-TV		WWHO-TV
Accounts receivable	$	437	$	87
Program rights, short-term		2,239		2,134
Other current assets		27		56
Property and equipment		7,373		7,433
Program rights, long-term		1,239		1,777
Broadcast licenses and other intangibles		32,687		25,527
Goodwill		21,654		11,232
Deferred tax assets		7,868		3,872
Total assets	$	73,524	$	52,118
Other accrued expenses		911		378
Program obligations, short-term		4,803		2,980
Program obligations, long-term		6,449		3,784
Other long-term liabilities		13,861		7,476
Total liabilities	$	26,024	$	14,618
Purchase Price	$	47,500	$	37,500

The following table sets forth unaudited pro forma information of the Company as if the acquisition of WNDY-TV and WWHO-TV had occurred on January 1, 2004:

36

LIN TELEVISION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2005		2004		2005			2004
Net revenues	$	98,442	$	102,241	$	181,537		$	187,107
Operating income		23,992		29,135		31,805			44,274
Net income (loss)		10,095		14,764		(808	)		15,965

On January 14, 2004 and May 6, 2004, the Company purchased the broadcast license and certain assets of WIRS-TV in Yauco, Puerto Rico for $4.5 million and WTIN-TV in Ponce, Puerto Rico for $4.9 million, respectively. Both purchases were funded by borrowings from the Company’s former revolving credit facility.

On May 14, 2004, the Company completed the sale of WEYI-TV, the NBC affiliate serving Flint, Michigan, for $24.0 million. The operating results of this station for the three and six-month periods ended June 30, 2004 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.”

The following table summarizes the net revenues and pre-tax income for WEYI-TV included in the historical results:

	Three Months Ended		Six Months Ended
	June 30, 2004		June 30, 2004
Net revenues	$	1,230	$	3,257
Operating income		285		960
Net income		263		884

Note 4 — Investments:

The Company has investments in two ventures with third parties, through which it has an interest in television stations. The following presents the Company’s basis in these ventures (in thousands):

	June 30,		December 31,
	2005		2004
NBC joint venture	$	54,274	$	55,604
WAND (TV) Partnership		10,192		10,209
	$	64,466	$	65,813

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 in the joint venture. The Company received distributions of $0 and $1.6 million from the joint venture in the three months ended June 30, 2005 and 2004, respectively, and $3.1 million and $3.3 million in the six months ended June 30, 2005 and 2004, respectively.

37

LIN TELEVISION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2005			2004			2005			2004
Revenue	$	23,394		$	29,318		$	41,700		$	47,759
Other expense		(16,379	)		(16,486	)		(33,233	)		(32,434	)
Net income		7,015			12,832			8,467			15,325

	June 30,		December 31,
	2005		2004
Current assets	$	10,910	$	12,675
Non-current assets		232,760		233,957
Current liabilities		1,269		724
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 in the partnership. 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 under this arrangement were $478,000 as of December 31, 2004. There was no amount due under this arrangement as of June 30, 2005.

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

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2005		2004			2005			2004
Net revenues	$	1,636	$	1,664		$	3,145		$	3,297
Operating income (loss)		88		(54	)		(74	)		(104	)
Net income (loss)		98		(54	)		(51	)		(103	)

	June 30,		December 31,
	2005		2004
Current assets	$	3,498	$	3,317
Non-current assets		23,958		24,283
Current liabilities		854		917
Non-current liabilities		2		32

Note 5 — Intangible Assets:

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

38

LIN TELEVISION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

	June 30,			December 31,
	2005			2004
Amortized Intangible Assets:
LMA purchase options	$	3,300		$	3,300
Network affiliations		564			173
Other intangibles		3,116			2,173
Accumulated amortization		(3,442	)		(2,776	)
		3,538			2,870
Unamortized Intangible Assets:
Broadcast licenses		1,120,311			1,063,265
Total broadcast licenses and other intangible assets, net	$	1,123,849		$	1,066,135
Goodwill		615,997			583,105
Other intangibles		58			—
Total intangible assets, net	$	1,739,904		$	1,649,240

The acquisition of WNDY-TV and WWHO-TV on March 31, 2005 increased amortized intangible assets by $1.3 million, increased broadcast licenses and goodwill by $56.8 million and $32.9 million, respectively, and increased other unamortized intangible assets by $0.1 million during the six months ended June 30, 2005. The Company is in the process of obtaining third-party valuations of all acquired intangible assets; thus, the allocation of the purchase price of WNDY-TV and WWHO-TV is based on preliminary estimates.

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

	Three Months Ended				Six Months Ended				Estimated amortization expense
	June 30,				June 30,				For the year ended December 31,
	2004		2005		2004		2005		2005		2006		2007		2008		2009
Amortization expense	$	277	$	400	$	555	$	666	$	1,932	$	292	$	120	$	80	$	—

The Company's 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. The Company has a material amount of intangible assets, and if 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 the Company's total assets as of June 30, 2005 consists of unamortized intangible assets. Intangible assets principally include broadcast licenses and goodwill. SFAS No. 142, "Goodwill and Other Intangible Assets," requires, among other things, the impairment testing of goodwill. If at any point in the future the value of these intangible assets decreased, the Company could be required to incur an impairment charge that could significantly adversely impact reported results of operations and stockholders' equity.

Note 6 —Debt:

Debt consisted of the following (in thousands):

	June 30,		December 31,
	2005		2004
Credit Facility	$	230,000	$	158,500
$166,440, 8% Senior Notes due 2008 (net of discount of $2,884)		—		163,556
6 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		110,785
Total debt		717,891		632,841
Less current portion		8,500		6,573
Total long-term debt	$	709,391	$	626,268

39

LIN TELEVISION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

On January 28, 2005, the Company issued an additional $175.0 million aggregate principal amount of its 6¹/2% Senior Subordinated Notes due 2013. The proceeds from the issuance of the 6¹/2% Notes were used to repurchase $166.4 million principal amount of the 8% Senior Notes due 2008.

The Company entered into a new credit facility on March 11, 2005 that included a $170.0 million term loan with a maturity date of March 11, 2011 and a $160.0 million revolving credit facility with a maturity date of June 30, 2010. The proceeds of the term loan were used to repay the balance on an existing term loan. The Company used $50.0 million of the revolving credit facility and existing cash on hand to acquire WNDY-TV and WWHO-TV on March 31, 2005.

The Company incurred charges of $12.3 million during the six-month period ended June 30, 2005 related to the write-off of unamortized discounts, deferred financing fees and associated costs as a result of the early extinguishment of debt. Financing fees related to the 6¹/2% Senior Subordinated Notes and the credit facility of $6.0 million were capitalized and are being amortized over the term of the related debt.

The Company incurred charges of $1.5 million and $4.4 million during the three and six months 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 $38.6 million of 8% Senior Notes in a negotiated transaction with an institutional investor.

During the three months ended June 30, 2005, the Company entered into an interest rate swap agreement in the notional amount of $100.0 million to manage exposure to interest rate risk associated with the variable rate portion of its credit facility. This agreement is not designated as a hedging instrument under SFAS No. 133. The fair value of this agreement at June 30, 2005 was a liability of $1.6 million.

The current portion of long-term debt reflects $8.5 million of quarterly amortization of a term loan under the credit facility beginning in March of 2006.

Note 7 — Related Party Transactions:

Financial Advisory Agreement.The Company is party to an agreement with Hicks Muse Partners, pursuant to which the Company reimburses Hicks Muse Partners, an affiliate of Hicks Muse, for certain 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 $7,000 and $15,000 for the three and six months ended June 30, 2005, respectively, and $5,000 and $11,000 for the three and six months ended June 30, 2004, respectively.

Centennial Cable of Puerto RicoThe Company is party to an agreement with Centennial Cable of Puerto Rico, in which Hicks Muse has a substantial economic interest. Centennial Cable provides the Company advertising and promotional services. The Company incurred fees under this arrangement of $36,000 and $65,000 for the three and six months ended June 30, 2005, respectively, and $29,000 and $49,000 for the three and six months ended June 30, 2004, respectively.

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 21^st Century Group, LLC; which owns 18% of Banks Broadcasting. Prior to the consolidation of Banks Broadcasting in accordance with FIN 46R, the Company recognized approximately $50,000 in management fee income for the three months ended March 31, 2004 under the management services agreement.

40

LIN TELEVISION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Note 8 — Contingencies:

GECC Note.General Electric Capital Corporation (“GECC”) provided debt financing in connection with the formation of the joint venture with NBC in the form of an $815.5 million 25-year non-amortizing senior secured note bearing an initial interest rate of 8.0% per annum (“the GECC note”). During the last five years, the joint venture has produced cash flows to support the interest payments and to maintain minimum levels of required working capital reserves. In addition, the joint venture has made cash distributions to the Company and to NBC from the excess cash generated by the joint venture of approximately $34.5 million on average each year during the past three years. Accordingly, the Company expects that the interest payments on the GECC note will be serviced solely by the cash flow of the joint venture. The GECC note is not an obligation of the Company, however, the note is recourse to the joint venture with NBC and is guaranteed by LIN TV Corp. If the joint venture were unable to pay principal or interest on the GECC note and GECC could not otherwise recoup its principal from the joint venture, GECC could require LIN TV Corp. to pay the shortfall of any outstanding amounts under the GECC note. If this happened, the Company could experience material adverse consequences, including:

• GECC could force LIN TV Corp. to sell the stock of LIN Television held by LIN TV Corp. to satisfy outstanding amounts under the GECC note;

• if more than 50% of the ownership of LIN Television had to be sold to satisfy the GECC Note, it could cause an acceleration of the Company’s 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.

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

Note 9 — Retirement Plans:

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

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

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2005			2004			2005			2004
Service cost	$	549		$	500		$	1,098		$	1,000
Interest cost		1,350			1,401			2,700			2,802
Expected return on plan assets		(1,435	)		(1,450	)		(2,870	)		(2,900	)
Amortization of prior service cost		30			39			60			78
Amortization of net loss		241			80			482			160
Net periodic benefit cost	$	735		$	570		$	1,470		$	1,140

41

LIN TELEVISION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company contributed $200,000 and $400,000 to the U.S. defined benefit plan during the three and six months ended June 30, 2005, respectively, and expects to contribute a total of $0.8 million during 2005. The Company also maintains a non-qualified, unfunded Supplemental Excess Retirement Plan (“SERP”) from which the Company paid out to retired employees a total of $69,000 during the three and six months ended June 30, 2005.

Note 10 – Recent Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board (FASB) issued SFAS No. 123R,Share-Based Payment,which was to be effective for reporting periods beginning after June 15, 2005. In April 2005, the FASB announced that the effective date of SFAS No. 123(R), has been delayed until the first quarter of 2006. SFAS No. 123R requires the Company to recognize the cost of employee services received in exchange for the Company’s equity instruments. Currently, in accordance with APB Opinion 25, the Company records the intrinsic value of stock based compensation as expense. Accordingly, no compensation expense is currently recognized for fixed stock option plans as the exercise price equals the stock price on the date of grant. Under SFAS No. 123R, the Company will be required to measure compensation expense over the vesting period of the options based on the fair value of the stock options at the date the options are granted. SFAS No. 123R allows for the use of the Black-Scholes or a lattice option-pricing model to value such options. As allowed by SFAS No. 123R, the Company can elect either Modified Prospective Application, which applies the Statement to new awards and modified awards after the effective date, and to any unvested awards as service is rendered on or after the effective date, or Modified Retrospective Application which can apply the effect of the statement to all prior years for which SFAS No. 123 was effective. The Company is currently evaluating which valuation model and method of application will be used.

In March 2005, the SEC staff issued a staff accounting bulletin (“SAB 107”) which expresses the views of the staff regarding the interaction between SFAS No. 123(R) and certain SEC rules and regulations and provide the staff’s views regarding the valuation of share-based payment arrangements for public companies. In particular, SAB 107 provides guidance related to share-based payment transactions with non-employees, the transition from nonpublic to public entity status, valuation methods (including assumptions such as expected volatility and expected term), the accounting for certain redeemable financial instruments issued under share-based payment arrangements, the classification of compensation expense, non-GAAP financial measures, first-time adoption of SFAS No. 123(R) in an interim period, capitalization of compensation cost related to share-based payment arrangements, the accounting for income tax effects of share-based payment arrangements upon adoption of Statement 123(R), the modification of employee share options prior to adoption of SFAS No. 123(R) and disclosures in Management’s Discussion and Analysis subsequent to adoption of SFAS No. 123(R).

In March 2005, the FASB issued FIN No. 47, “Accounting for Conditional Asset Retirement Obligations – an Interpretation of FASB Statement No. 143”, which is effective for all reporting periods ending after December 15, 2005. FIN 47 requires that an entity shall recognize a liability for the fair value of a conditional asset retirement obligation if the fair value of the liability can be reasonable estimated, rather than when the obligation is incurred, generally upon acquisition, construction, or development and/or through the normal operation of the asset as required by SFAS No. 143. An asset retirement obligation would be reasonably estimable if (a) it is evident that the fair value of the obligation is embodied in the acquisition price of the asset, (b) an active market exists for the transfer of the obligation, or (c) sufficient information exists to apply an expected present value technique. The provisions of FIN 47 are not expected to have a material impact on the Company’s consolidated financial statements.

In May 2005, the FASB issued FASB Statement No. 154, “Accounting Changes and Error Corrections – a replacement of APB Opinion No. 20 and FASB Statement No. 3” (“FAS 154”), which is effective for changes and corrections of errors made in fiscal years beginning after December 15, 2005. FAS 154 requires retrospective application to prior periods’ financial statements of changes in accounting principle unless it is

42

LIN TELEVISION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

impracticable to determine the period-specific effects or the cumulative effect of the change. The provisions of FAS 154 are not expected to have a material impact on the Company’s consolidated financial statements.

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