Lin Television 10Q 2005 Q3 Quarterly report

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


þ		Quarterly Report pursuant to Section 13 OR 15 (d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2005

Commission file number: 001-31311

LIN TV Corp.

(Exact name of registrant as specified in its charter)


Delaware
(State or other jurisdiction of incorporation or organization)

05-0501252
(I.R.S. Employer Identification No.)

Commission file number: 000-25206

LIN Television Corporation

(Exact name of registrant as specified in its charter)


Delaware
(State or other jurisdiction of incorporation or organization)

13-3581627
(I.R.S. Employer 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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yeso Noþ

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 November 1, 2005: 27,199,711 shares .

LIN TV Corp. Class B common stock, $0.01 par value, issued and outstanding at November 1, 2005: 23,502,059 shares.

LIN TV Corp. Class C common stock, $0.01 par value, issued and outstanding at November 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)			31
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.			16
Item 3. Quantitative and Qualitative Disclosures about Market Risk			27
Item 4. Controls and Procedures			27

Part II. Other Information
Item 1. Legal Proceedings			28
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			28
Item 4. Submission of Matters to a Vote of Security Holders			28
Item 6. Exhibits			28
Signature Page			30
Supplemental Indenture
Supplemental Indenture
Certification Pursuant to Section 302 of CEO of LIN TV Corp
Certification Pursuant to Section 302 of CFO of LIN TV Corp
Certification Pursuant to Section 302 of CEO of LIN Television Corp
Certification Pursuant to Section 302 of CFO of LIN Television Corp
Certification Pursuant to Section 906 of the CEO and CFO of LIN TV Corp
Certification Pursuant to Section 906 of the CEO and CFO of LIN Television Corp

PART I: FINANCIAL INFORMATION

Item 1. Financial Statements

LIN TV CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS


	September 30,			December 31,
	2005			2004
	(Unaudited)
	(In thousands, except share data)
ASSETS
Current assets:
Cash and cash equivalents	$	13,145		$	14,797
Accounts receivable, less allowance for doubtful accounts (2005 - $1,484; 2004 - $1,450)		68,446			70,639
Program rights		23,238			17,312
Other current assets		7,306			3,790

Total current assets		112,135			106,538
Property and equipment, net		197,682			197,565
Deferred financing costs		15,743			11,060
Equity investments		64,467			65,813
Program rights		13,189			12,165
Other assets		37,832			16,043
Goodwill		612,906			583,105
Broadcast licenses and other intangible assets, net		1,123,360			1,066,135

Total assets	$	2,177,314		$	2,058,424

LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	—		$	6,573
Accounts payable		2,599			7,774
Accrued interest expense		10,866			8,118
Accrued sales volume discount		3,924			6,462
Other accrued expenses		18,200			13,483
Program obligations		29,781			23,278

Total current liabilities		65,370			65,688
Long-term debt, excluding current portion		739,196			626,268
Deferred income taxes, net		439,306			445,695
Program obligations		8,787			12,008
Other liabilities		48,343			38,344

Total liabilities		1,301,002			1,188,003


Preferred stock of Banks Broadcasting, Inc., $0.01 par value, 179,322 and 173,822 issued and outstanding at September 30, 2005 and December 31, 2004, respectively		14,627			14,458

Stockholders’ equity:
Class A common stock, $0.01 par value, 100,000,000 shares authorized, 27,496,926 shares at September 30, 2005 and 26,946,183 shares at December 31, 2004, issued and outstanding		275			269
Class B common stock, $0.01 par value, 50,000,000 shares authorized, 23,502,059 shares at September 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 September 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		1,077,933			1,071,816
Deferred compensation		(3,962	)		—
Accumulated deficit		(198,206	)		(201,767	)
Accumulated other comprehensive loss		(14,590	)		(14,590	)

Total stockholders’ equity		861,685			855,963

Total liabilities, preferred stock and stockholders’ equity	$	2,177,314		$	2,058,424

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

LIN TV CORP.

Condensed Consolidated Statements of Operations

(In thousands, except per share information)

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2005			2004			2005			2004
Net revenues	$	90,827		$	91,005		$	267,708		$	267,187

Operating costs and expenses:

Direct operating (excluding depreciation of $6.6 million and $7.5 million for the three months ended September 30, 2005 and 2004, respectively, and $22.8 million and $22.7 million for the nine months ended September 30, 2005 and 2004, respectively)		27,788			25,638			80,859			75,658
Selling, general and administrative		26,192			22,737			77,838			69,725
Amortization of program rights		6,833			6,481			19,222			18,116
Corporate		4,362			5,542			14,716			13,570
Depreciation and amortization of intangible assets		7,151			7,728			24,063			23,545

Total operating costs		72,326			68,126			216,698			200,614

Operating income		18,501			22,879			51,010			66,573

Other (income) expense
Interest expense, net		11,115			10,888			32,860			34,414
Share of income in equity investments		(410	)		(2,250	)		(2,119	)		(5,014	)
Minority interest in loss of Banks Broadcasting, Inc.		(96	)		(226	)		(382	)		(472	)
Gain on derivative instruments		(1,860	)		(9,026	)		(3,455	)		(13,646	)
Loss on extinguishment of debt		1,082			—			13,412			4,447
Other, net		95			917			261			1,138

Total other expense, net		9,926			303			40,577			20,867

Income from continuing operations before provision for income taxes and cumulative effect of change in accounting principle		8,575			22,576			10,433			45,706
Provision for income taxes		4,789			7,760			6,872			16,960

Income from continuing operations before cumulative effect of change in accounting principle		3,786			14,816			3,561			28,746

Discontinued operations:

Income from discontinued operations, net of tax provision of $311		—			—			—			(44	)
Loss from sale of discontinued operations, net of tax benefit of $1,094		—			—			—			1,284
Cumulative effect of change in accounting principle, net of tax effect of $0		—			—			—			(3,290	)

Net income	$	3,786		$	14,816		$	3,561		$	30,796

*Basic income per common share:*
Income from continuing operations before cumulative effect of change in accounting principle	$	0.07		$	0.29		$	0.07		$	0.57
Income from discontinued operations, net of tax provision		—			—			—			—
Loss from sale of discontinued operations, net of tax benefit		—			—			—			0.03
Cumulative effect of change in accounting principle, net of tax		—			—			—			(0.07	)
Net income		0.07			0.29			0.07			0.61

Weighted — average number of common shares outstanding used in calculating basic income per common share		50,702			50,350			50,632			50,272

*Diluted income per common share:*
Income from continuing operations before cumulative effect of change in accounting principle	$	0.07		$	0.19		$	0.07		$	0.44
Income from discontinued operations, net of tax provision		—			—			—			—
Loss from sale of discontinued operations, net of tax benefit		—			—			—			0.02
Cumulative effect of change in accounting principle, net of tax		—			—			—			(0.06	)
Net income		0.07			0.19			0.07			0.48

Weighted — average number of common shares outstanding used in calculating diluted income per common share		50,801			54,314			50,731			54,358

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

LIN TV CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


	Nine months ended September 30,
	2005			2004
	( in thousands )
OPERATING ACTIVITIES:
Net income	$	3,561		$	30,796
Adjustment to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of intangible assets		24,063			23,545
Amortization of financing costs and note discounts		4,654			6,036
Amortization of program rights		19,222			18,116
Program payments		(21,545	)		(18,336	)
Program buyout payments related to acquisitions		(21,420	)		—
Loss on extinguishment of debt		13,412			4,447
Cumulative effect of change in accounting principle, net of tax impact		—			(3,290	)
Gain on derivative instruments		(3,455	)		(13,646	)
Share of income in equity investments		(2,119	)		(5,014	)
Deferred income taxes, net		5,351			13,000
Stock-based compensation		1,844			346
Other, net		816			890

Changes in operating assets and liabilities, net of acquisitions and disposals:
Accounts receivable		1,951			5,092
Program rights, net of program obligations		—			233
Other assets		(2,664	)		(4,146	)
Accounts payable		(1,398	)		(1,122	)
Accrued interest expense		2,748			(756	)
Accrued sales volume discount		(2,538	)		(1,766	)
Other liabilities		2,668			6,957

Net cash provided by operating activities		25,151			61,382


INVESTING ACTIVITIES:
Capital expenditures		(8,581	)		(17,500	)
Investment in equity investments		—			(650	)
Capital contribution from minority interest in Banks Broadcasting, Inc.		550			—
Distributions from equity investments		3,464			5,503
Acquisition of broadcast licenses		(232	)		(9,152	)
Deposit on acquisition of business		(19,500	)
Payments for business combinations		(85,000	)		—
Proceeds from sale of broadcast licenses and related operating assets		—			24,000
Other, net		(3,044	)		29

Net cash (used in) provided by investing activities		(112,343	)		2,230


FINANCING ACTIVITIES:
Net proceeds on exercises of employee stock options and phantom stock units and employee stock purchase plan issuances		1,935			1,563
Proceeds from issuance of long-term debt		520,252			—
Long-term debt financing costs		(9,599	)		(147	)
Net proceeds from revolver debt		75,000			(18,000	)
Principal payments on long-term debt		(494,940	)		(43,810	)
Cash expenses associated with early extinguishment of debt		(7,108	)		(3,016	)

Net cash provided by (used) in financing activities		85,540			(63,410	)


Net (decrease) increase in cash and cash equivalents		(1,652	)		202
Cash and cash equivalents at the beginning of the period		14,797			9,475

Cash and cash equivalents at the end of the period	$	13,145		$	9,677

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

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 of 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 September 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	)

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.

LIN TV CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 income and net 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						Nine Months Ended
	September 30,						September 30,
	2005			2004			2005			2004
Net income, as reported	$	3,786		$	14,816		$	3,561		$	30,796
Add: Stock-based employee compensation expense, included in reported net income, net of related tax effect		55			70			1,106			208
Deduct: Total stock-based employee compensation expense determined under the fair value based method for all awards, net of related tax effect		(465	)		(1,016	)		(1,287	)		(2,516	)

Pro forma net income	$	3,376		$	13,870		$	3,380		$	28,488


Basic net income per common share, as reported	$	0.07		$	0.29		$	0.07		$	0.61

Basic net income per common share, pro forma	$	0.07		$	0.28		$	0.07		$	0.57

Diluted net income per common share, as reported	$	0.07		$	0.19		$	0.07		$	0.48

Diluted net income per common share, pro forma	$	0.07		$	0.18		$	0.07		$	0.44

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 nine months ended September 30, 2005 and 2004, respectively:


	Three Months Ended September 30,						Nine Months Ended September 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	%

On September 15, 2005, the Company granted an aggregate of 264,000 shares of restricted stock with a grant date fair value of $14.88 per share. The fair value of the restricted shares is expensed over the period during which the restrictions lapse. The shares vest equally over a five year period, subject to acceleration in certain circumstances if stated performance goals are attained. During the three months ended September 30, 2005, the Company recorded compensation expense of $38,000 in connection with the restricted stock grants.

LIN TV CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 3 — Acquisitions and Dispositions

On August 19, 2005, the Company entered into an agreement with Emmis Television to acquire five network-affiliated television stations for $260.0 million in cash. Pursuant to the agreement, the Company deposited $19.5 million into an escrow fund, which will be applied to the payment of the purchase price at closing. This amount has been included in the “Other Assets” line item on the Company’s balance sheet as of September 30, 2005. The agreement provides for the possibility of different closing dates for each station group. The closing dates are expected to occur during the fourth quarter of 2005 through the second quarter of 2006 depending on when Federal Communication Commission (“FCC”) consent is received. The Company intends to fund the remaining purchase price due at closing with proceeds from its credit facility.

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 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, which represents 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 paid $21.4 million related to buyouts of certain recorded and unrecorded program obligations of these stations during the three months ended September 30, 2005. The Company has recorded $0.8 million as of September 30, 2005 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 technology center 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		491		2,054
Property and equipment		7,373		7,433
Program rights, long-term		2,968		3,826
Broadcast licenses and other intangibles		32,687		25,527
Goodwill		19,496		10,300
Deferred tax assets		7,868		3,872

Total assets	$	73,559	$	55,233


Program obligations, short-term		4,803		2,980
Program obligations, long-term		7,395		7,277
Other long-term liabilities		13,861		7,476

Total liabilities	$	26,059	$	17,733


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:

LIN TV CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2005		2004		2005		2004
Net revenues	$	90,827	$	96,464	$	272,364	$	283,571
Operating income		18,501		23,186		50,306		67,460
Net income		3,786		14,819		2,978		30,784

Basic net income per common share	$	0.07	$	0.29	$	0.06	$	0.61
Diluted net income per common share	$	0.07	$	0.19	$	0.06	$	0.48

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 nine-month periods ended September 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 presents summarized information for WEYI-TV included in the historical results:


	Three Months Ended		Nine Months Ended
	September 30, 2004		September 30, 2004
Net revenues	$	—	$	3,257
Operating income		—		960
Net income		—		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):


	September 30,		December 31,
	2005		2004
NBC Universal joint venture	$	54,439	$	55,604
WAND (TV) Partnership		10,028		10,209

	$	64,467	$	65,813

Joint Venture with NBC Universal: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 $0.4 million and $2.2 million from the joint venture in the three months ended September 30, 2005 and 2004, respectively, and $3.5 million and $5.5 million in the nine months ended September 30, 2005 and 2004, respectively.

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

LIN TV CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2005			2004			2005			2004
Revenue	$	19,216		$	27,923		$	60,916		$	75,682
Other expense		(16,401	)		(16,487	)		(49,634	)		(48,921	)
Net income		2,815			11,436			11,282			26,761


	September 30,		December 31,
	2005		2004
Current assets	$	10,270	$	12,675
Non-current assets		231,033		233,957
Current liabilities		1,087		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 $349,000 and $478,000 as of September 30, 2005 and December 31, 2004, respectively.

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


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2005			2004			2005			2004
Net revenues	$	1,612		$	1,440		$	4,757		$	4,737
Operating loss		(506	)		(165	)		(580	)		(269	)
Net loss		(491	)		(243	)		(542	)		(346	)


	September 30,		December 31,
	2005		2004
Current assets	$	3,428	$	3,317
Non-current assets		23,750		24,283
Current liabilities		1,066		917
Non-current liabilities		2		32

LIN TV CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 5 — Intangible Assets

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


	September 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		(3,989	)		(2,776	)

		2,991			2,870

Unamortized Intangible Assets:
Broadcast licenses		1,120,311			1,063,265
Other intangibles		58			—

Total broadcast licenses and other intangible assets, net	$	1,123,360		$	1,066,135
Goodwill		612,906			583,105

Total intangible assets, net	$	1,736,266		$	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 nine months ended September 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				Nine Months Ended						Estimated amortization expense
	September 30,				September 30,						For the Year Ended December 31,
	2005		2004		2005		2004		2005		2006		2007		2008		2009

Amortization expense	$	547	$	270	$	1,213	$	825	$	1,611	$	374	$	53	$	43	$	43

Approximately $1.7 billion, or 80%, of the Company’s total assets as of September 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 of goodwill. The Company will perform its annual impairment testing during the fourth quarter of 2005. 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. The Company’s common stock currently trades at a price that results in a market capitalization that is less than total stockholder’s equity as of September 30, 2005, and has done so since April 2005, which may indicate a valuation for the Company’s intangible assets different from the amount reflected in the Company’s condensed consolidated financial statements. If the Company is required to write down intangible assets in future periods, it would reduce net income, which could have a material adverse effect on the results of operations and the trading price of LIN TV Corp.’s class A common stock.

LIN TV CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 6 —Debt

Debt consisted of the following (in thousands):


	September 30,		December 31,
	2005		2004
Credit Facility	$	75,000	$	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
$190,000, 6 1/2% Senior Subordinated Notes due 2013 — Class B (net of discount of $14,748)		175,252		—
$125,000, 2.50% Exchangeable Senior Subordinated Debentures due 2033 (net of discount of $11,056 and $14,215 at September 30, 2005 and December 31, 2004, respectively)		113,944		110,785

Total debt		739,196		632,841
Less current portion		—		6,573

Total long-term debt	$	739,196	$	626,268

On September 29, 2005, the Company issued $190.0 million aggregate principal amount of 6¹/2% Senior Subordinated Notes due 2013 — Class B. The proceeds from the issuance of the 6¹/2% Class B Notes were used to repay the $170.0 million term loan under the Company’s credit facility and the remaining proceeds used to repay a portion of the outstanding revolving indebtedness under the credit facility. During the three months ended September 30, 2005, the Company incurred fees of $3.5 million in connection with the issuance of these notes, which is being amortized over the life of the notes.

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 Company’s 8% Senior Notes due 2008. During the nine months ended September 30, 2005, the Company incurred fees of $3.8 million in connection with the issuance of these notes, which is being amortized over the life of the notes.

The Company entered into a 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 $170.0 million term loan was subsequently repaid with a portion of the proceeds from the issuance of the 6¹/2% Senior Subordinated Notes due 2013 — Class B on September 29, 2005. 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.

On November 4, 2005, the Company entered into a new credit facility that included a $275.0 million term loan and a $275.0 million revolving credit facility, both of which mature in 2011. Borrowings under the new credit facility bear interest at a rate based, at the Company’s option, on an adjusted LIBOR rate, plus an applicable margin range of 0.625% to 1.50%, or an adjusted based rate, plus an applicable margin range of 0.0% to 0.50%, depending, in each case, on certain ratios.

The terms of the new credit facility provide for customary representations and warranties, negative and affirmative covenants (including financial covenants), and events of default. The new credit facility can be accelerated upon events of default and requires the term loans to be prepaid under certain circumstances with amounts determined by reference to the proceeds from assets sales.

LIN TV CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The proceeds of the new revolving credit facility were used to repay the balance on the existing revolving credit facility. The Company intends to use proceeds from the new credit facility to complete the purchase of the Emmis stations in the fourth quarter of 2005 through the second quarter of 2006, pending approval by the FCC and other customary closing conditions, and for general corporate purposes, including share repurchases.

The Company incurred charges of $13.4 million during the nine-month period ended September 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 issuance of the $190.0 million 6¹/2% Senior Subordinated Notes due 2013 — Class B and $175.0 million principal amount of 6¹/2% Senior Subordinated Notes were capitalized and are being amortized over the term of the related debt.

The Company incurred charges of $4.4 million during the nine months ended September 30, 2004, 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 nine months ended September 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 September 30, 2005 resulted in an asset of $0.7 million.

Note 7 — Related Party Transactions

Financial Advisory Agreement:.The Company was party to an Amended and Restated Financial Advisory Agreement, dated February 19, 2002, as amended (the “Financial Advisory Agreement”), with Hicks Muse Partners, pursuant to which the Company reimbursed 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 $12,000 and $27,000 for the three and nine months ended September 30, 2005, respectively, and $4,000 and $14,000 for the three and nine months ended September 30, 2004, respectively The Financial Advisory Agreement was terminated on November 1, 2005 (see Note 12 – Subsequent Events).

Centennial Cable of Puerto Rico:The 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 $25,000 and $90,000 for the three and nine months ended September 30, 2005, respectively, and $28,000 and $77,000 for the three and nine months ended September 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 46(R), 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

LIN TV CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 Universal 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 Universal, and NBC Universal 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 Universal’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						Nine Months Ended
	September 30,						September 30,
	2005			2004			2005			2004
Service cost	$	549		$	494		$	1,647		$	1,494
Interest cost		1,350			1,352			4,050			4,154
Expected return on plan assets		(1,435	)		(1,364	)		(4,305	)		(4,264	)
Amortization of prior service cost		30			47			90			125
Amortization of net loss		241			103			723			263

Net periodic benefit cost	$	735		$	632		$	2,205		$	1,772

The Company contributed $0.2 million and $0.6 million to the U.S. defined benefit plan during the three and nine months ended September 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 from which the Company paid out to retired employees a total of $3,000 and $69,000 during each of the three and nine months ended September 30, 2005.

Note 10 — Earnings per Share

Basic and diluted income per common share are computed in accordance with SFAS No. 128, “Earnings per Share.” Basic income per common share is computed by dividing net income by the weighted average number of shares of common stock outstanding. There is no difference between basic and diluted income per common share for the three

LIN TV CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

nine months ended September 30, 2005 since potential common shares from the assumed conversion of contingently convertible debt are anti-dilutive to income from continuing operations and therefore are excluded from the calculation.

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


	Three Months Ended September 30,					Nine Months Ended September 30,
	2005		2004			2005		2004
Numerator for income per common share calculation:
Net income available to common shareholders, basic	$	3,786	$	14,816		$	3,561	$	30,796
Interest expense on contingently convertible debt, net of tax		—		1,122			—		3,391
Derivative income, net of tax		—		(5,415	)		—		(8,187	)

Net income available to common shareholders, diluted	$	3,786	$	10,523		$	3,561	$	26,000


Denominator for income per common share calculation:
Weighted average common shares, basic		50,702		50,350			50,632		50,272
Effect of dilutive securities:
Restricted stock and stock options		99		611			99		733
Contingently convertible debt		—		3,353			—		3,353

Weighted average common shares, diluted		50,801		54,314			50,731		54,358


Basic income per common share	$	0.07	$	0.29		$	0.07	$	0.61
Diluted income per common share	$	0.07	$	0.19		$	0.07	$	0.48

Options to purchase a total of 3.8 million and 3.6 million shares of common stock have not been included in the computation of diluted net income per share for the three and nine months ended September 30, 2005, respectively, since their exercise prices exceeded the average market price of the common stock during the period.

Note 11 — Share Repurchase Program

On August 17, 2005, the Board of Directors of the Company approved a share repurchase program authorizing the repurchase of up to $200.0 million of LIN TV’s class A common stock. Share repurchases under the program may be made from time to time in the open market or in privately negotiated transactions. There were no shares repurchased under the program during the three months ended September 30, 2005.

Note 12 — Subsequent Events

On November 1, 2005, the Company entered into a termination agreement, terminating the Financial Advisory Agreement with Hicks Muse Partners. The Company did not incur any early termination fees in connection with the termination of the Financial Advisory Agreement.

The proceeds of the new revolving credit facility were used to repay the balance on the existing revolving credit facility. The Company intends to use proceeds from the new credit facility to complete the purchase of the Emmis stations in the fourth quarter of 2005 through the second quarter of 2006 pending approval by the FCC and other customary closing conditions, and for general corporate purposes, including share repurchases.

LIN TV CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 13 — 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 No. 123(R), has been delayed until the first quarter of 2006. SFAS No. 123(R) 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. 123(R), 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. As allowed by SFAS No. 123(R), the Company has elected to use the Black-Scholes method of valuing options and the Modified Prospective Application, which applies SFAS No. 123(R) 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, The Company has adopted SFAS No. 123(R) effective October 1, 2005 and as such expects to record compensation expense of approximately $523,000 during the fourth quarter of 2005.

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 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 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” (“SFAS 154”), which is effective for changes and corrections of errors made in fiscal years beginning after December 15, 2005. SFAS 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 SFAS 154 are not expected to have a material impact on the Company’s consolidated financial statements.

In June 2005, the FASB issued guidance on SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” as amended (“SFAS 133”) in Derivative Implementation Group (“DIG”) Issue B38, “Embedded Derivatives: Evaluation of Net Settlement with Respect to the Settlement of a Debt Instrument through Exercise of an Embedded Put Option or Call Option” (“DIG Issue B38”) and B39, “Embedded Derivatives: Application of Paragraph 13(b) to Call Options That Are Exercisable Only by the Debtor” (“DIG Issue B39”). The guidance in DIG Issue B38 clarifies that the potential settlement of a debtor’s obligation to a creditor that would occur upon exercise of a put or call option meets the net settlement criteria of SFAS No. 133. The guidance in DIG Issue B39 clarifies that an embedded call option that can accelerate the settlement of a debt host financial instrument should not be bifurcated and fair valued if the right to accelerate the settlement can be exercised only by the debtor (issuer/borrower), it is underlying an interest rate index and the investor will recover substantially all of its initial net investment. The Company adopted the DIG issues effective April 1, 2005 and neither DIG issue had a material impact on the Company’s consolidated financial statements.

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 that are inherently uncertain. Therefore, you should not place undue reliance upon such estimates and statements. Any of such estimates or statements may not 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.

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 $3.8 million and $3.6 million in the three and nine months ended September 30, 2005, respectively, compared with net income of $14.8 million and $30.8 million for the same periods in the prior year. The following are some of our operating highlights for the nine months ended September 30, 2005:

	•		We entered into an agreement to purchase five network-affiliated television stations from Emmis Television for $260.0 million in cash, subject to approval of the transaction by the FCC and other customary closing conditions.

	•		We issued $190.0 million in aggregate principal amount of 6¹/2% Senior Subordinated Notes due 2013 — Class B and an additional $175.0 million in aggregate principal amount of our 6¹/2% Senior Subordinated Notes.

	•		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 third quarter and the first nine months of 2005 with the same periods of 2004. According to the Television Bureau of Advertising, U.S. television station advertising decreased 8.5% in the third quarter and 5.2% in the first nine months of 2005 compared to increases of 9.9% and 9.1% in the third quarter and first nine months 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 nine months ended September 30, 2005 and 2004, respectively. A significant change in these advertising revenues could materially affect our future results of operations.

	•		Approximately $1.7 billion, or 80%, of our total assets as of September 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 of goodwill. We will perform our annual impairment testing during the fourth quarter of 2005. If the fair value of these intangible assets decreased, we could be required to incur an impairment charge that could significantly adversely impact our reported results of operations and stockholders’ equity. Our common stock currently trades at a price, which results in a market capitalization less than total stockholders’ equity as of September 30, 2005, and has done so since April 2005, which may indicate a valuation for our intangible assets different from the amount reflected in our condensed consolidated financial statements. If we are required to write down intangible assets in future periods, it would reduce net income, which in turn could have a

LIN TV CORP.
MANAGEMENT’S DISCUSSION AND ANALYSIS — Continued

material adverse effect on the results of operations and the trading price of LIN TV Corp.’s class A common stock.

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.

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 nine months ended September 30, 2005 and 2004, respectively.


	Three Months Ended									Nine Months Ended
	September 30,						%			September 30,						%
	2005			2004			Change			2005			2004			Change
National time sales (before agency commissions)	$	31,965		$	31,236			2	%	$	95,581		$	93,473			2	%
Local time sales (before agency commissions)		66,634			62,298			7	%		196,357			188,837			4	%
Political time sales (before agency commissions)		728			7,102			-90	%		2,157			12,724			-83	%
Agency commissions (related to time sales)		(16,073	)		(16,921	)		-5	%		(47,322	)		(48,658	)		-3	%
Network compensation		2,386			2,710			-12	%		7,014			7,841			-11	%
Barter revenue		2,925			2,530			16	%		7,249			7,467			-3	%
Other revenue		2,262			2,050			10	%		6,672			5,503			21	%

Net revenue		90,827			91,005			0	%		267,708			267,187			0	%
Operating costs and expenses:
Direct operating¹		27,788			25,638			8	%		80,859			75,658			7	%
Selling, general and administrative		26,192			22,737			15	%		77,838			69,725			12	%
Amortization of program rights		6,833			6,481			5	%		19,222			18,116			6	%
Corporate		4,362			5,542			-21	%		14,716			13,570			8	%
Depreciation and amortization of intangible assets		7,151			7,728			-7	%		24,063			23,545			2	%

Total operating costs and expenses		72,326			68,126			6	%		216,698			200,614			8	%

Operating income	$	18,501		$	22,879			-19	%	$	51,010		$	66,573			-23	%
~~~~~~~~~~~~~ ~~~~~~~~~


¹		Excluding depreciation of $6.6 million and $7.5 million for the three months ended September 30, 2005 and 2004, respectively, and $22.8 and $22.7 million for the nine months ended September 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 decreased $0.2 million and increased $0.5 million in the three and nine months ended September 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 $5.1 million and $10.1 million net revenue in the three and nine months ended September 30, 2005, respectively. This increase is offset by decrease of $6.4 million and $10.6 million in political revenues in the comparable periods of 2005, respectively. We expect political revenue to decrease substantially in 2005, as it is not an election year in most of our markets.

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 $2.2 million, or 8%, and $5.2 million, or 7%, for the three and nine months ended September 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 WNDY-TV and WWHO-TV on March 31, 2005, which added $0.8 million and $1.2 million of expenses to the three and nine months ended September 30, 2005, respectively, and the

LIN TV CORP.
MANAGEMENT’S DISCUSSION AND ANALYSIS — Continued

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 $3.5 million, or 15%, and $8.1 million, or 12%, for the three and nine months ended September 30, 2005, respectively, compared to the same periods last year. The increase is primarily the result of $1.4 million and $2.8 million for the three and nine months ended September 30, 2005, respectively, 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 increased bad debt expense for the nine months ended September 30, 2005.

Amortization of program rightsrepresents costs associated with the acquisition of syndicated programming, features and specials. Amortization of program rights increased $0.4 million, or 5%, and $1.1 million, or 6%, for the three and nine months ended September 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 and $2.4 million for the three and nine months ended September 30, 2005, respectively. 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, decreased $1.2 million and increased $1.1 million for the three and nine months ended September 30, 2005, respectively, compared to the same periods last year. The decrease in the three months ended September 30, 2005 was primarily the result of higher executive compensation in the same period last year, including severance costs of $0.9 million related to the departure of a company executive. The increase in the nine months ended September 30, 2005 was primarily attributable to an increase in stock-based compensation of $1.5 million for the nine months ended September 30, 2005 compared to the same period last year.

Depreciation and amortization of intangible assetsdecreased $0.6 million, or 7%, and increased $0.5 million, or 2%, for the three and nine months ended September 30, 2005, respectively, compared to the same periods last year. The changes were primarily the result of our acquisition of WNDY-TV and WWHO-TV on March 31, 2005 which added $0.6 million and $1.0 million in depreciation and amortization for the three and nine months ended September 30, 2005, respectively. This increase was offset by a decrease in depreciation expense due to our capital expenditures from prior years which have reached the end of their useful life and therefore are fully depreciated but have not yet had to be replaced.

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					Nine Months Ended
	September 30,					September 30,
	2005		2004			2005			2004
Components of interest expense, including discount and financing fee amortization
Credit Facility	$	2,785	$	2,465		$	7,549		$	7,130
6 1/2% Senior Subordinated Notes		6,334		3,376			18,206			10,166
6 1/2% Senior Subordinated Notes — Class B		69		—			69			—
2.50% Exchangeable Senior Subordinated Debentures		1,888		1,870			5,654			5,651
8% Senior Notes		—		3,295			1,501			11,751
Other interest (income) expense, net		39		(118	)		(119	)		(284	)

Total interest expense, net	$	11,115	$	10,888		$	32,860		$	34,414

Interest expense, netincreased $0.2 million, or 2%, for the three months ended September 30, 2005 compared to the same period last year due to higher outstanding borrowings and a higher average interest rate during the three months ended September 30, 2005. Net interest expense decreased $1.6 million, or 5%, for the nine months ended September 30, 2005 compared to the same period last year due to a lower average interest rate during the nine months ended September 30, 2005.

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 that 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 $7.2 million and $10.2 million for the three and nine months ended September 30, 2005, respectively, due to fluctuations in forecasted market interest rates.

Other Items

We recorded losses of $1.1 million for the three months ended September 30, 2005 related to the write-off of unamortized financing fees in connection with the early extinguishment of the term loan portion of our credit facility. We recorded losses of $13.4 million and $4.4 million for the nine months ended September 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 and the term loan portion of our credit facility.

Provision for Income Taxes

We recorded a provision for income taxes of $4.8 million and $6.9 million for the three months and nine months ended September 30, 2005, respectively, compared to $7.8 million and $17.0 million for the same periods last year, respectively. The provision for income taxes for the nine months ended September 30, 2005 included a discrete income tax benefit of $4.7 million on the $13.4 million loss on extinguishment of debt incurred during the first nine months of 2005. Our annual effective income tax rate was 45.7% as of September 30, 2005, excluding the $13.4 million loss on the extinguishment of debt. The effective income tax rate increased from 43.9% at June 30, 2005 due primarily to a change in the Company’s estimates of annual operating income before taxes and a non-deductible withdrawal from the executive deferred compensation plan. In 2004, we used the discrete method to calculate income tax expense.

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 September 30, 2005, we had cash of $13.1 million and a $160.0 million committed revolving credit facility of which $75.0 million was outstanding at September 30, 2005, leaving $85.0 million committed, but undrawn.

Description of Indebtedness

On September 29, 2005, we issued $190.0 million aggregate principal amount of 6¹/2% Senior Subordinated Notes — Class B due 2013. The proceeds from the issuance of the 6¹/2% Notes — Class B were used to repay the $170.0 million term loan under our credit facility with the balance used to repay a portion of our outstanding revolving indebtedness under the credit facility.

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 entered into a new credit facility on November 4, 2005 that included a $275.0 million term loan and a $275.0 million revolving credit facility, both of which mature in 2011. Borrowings under the new credit facility bear interest at a rate based, at our option, on an adjusted LIBOR rate, plus an applicable margin range of 0.625% to 1.50%, or an adjusted base rate, plus an applicable margin range of 0.0% to 0.50% depending in each case on certain ratios. The proceeds of the credit facility will be used to complete the purchase of the Emmis stations during the fourth quarter of 2005 through the second quarter 2006 and repay the balance on the prior credit facility. The Company expects to incur additional extinguishment costs of $1.0 million related to the extinguishment of the credit facility during the fourth quarter of 2005.

The following summarizes our indebtedness (in thousands):


	September 30,		December 31,
	2005		2004
Credit Facility	$	75,000	$	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
6 1/2% Senior Subordinated Notes due 2013 - Class B (net of discount of $14,748)		175,252		—
$125,000, 2.50% Exchangeable Senior Subordinated Debentures due 2033 (net of discount of $11,056 and $14,215 at September 30, 2005 and December 31, 2004, respectively)		113,944		110,785

Total debt		739,196		632,841
Less current portion		—		6,573

Total long-term debt	$	739,196	$	626,268

LIN TV CORP.
MANAGEMENT’S DISCUSSION AND ANALYSIS — Continued

Our 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.

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 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. We are 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.

Each of our 6^1/2%Senior Subordinated Notes and 6¹/2% Senior Subordinated Notes due 2013 — Class B each 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, 6¹/2% Senior Subordinated Notes due 2013 — Class B and our 2.50% Exchangeable Senior Subordinated Debentures each 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, 6^1/2% Senior Subordinated Notes due 2013 — Class B 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 each of our 6^1/2% Senior Subordinated Notes and 6^1/2% Senior Subordinated Notes due 2013 – Class B 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.

LIN TV CORP.
MANAGEMENT’S DISCUSSION AND ANALYSIS — Continued

Contractual Obligations

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


	October -
	December
	2005		2006-2008		2009-2010		Thereafter		Total

Principal payments and mandatory redemptions on debt (1)	$	75,000	$	—	$	—	$	765,000	$	840,000
Cash interest on debt (2)		14,598		158,610		86,837		123,439		383,484
Program payments (3)		6,587		55,976		14,092		7,325		83,980
Operating leases (4)		508		2,591		1,736		3,398		8,233
Local marketing agreement payments (5)		912		1,069		—		—		1,981

Total	$	97,605	$	218,246	$	102,665	$	899,162	$	1,317,678


(1)		We repaid the revolving portion of our credit facility on November 4, 2005 as the result of entering into our new credit facility (See “Description of Indebtedness” above). We are obligated to pay our 6¹/2% Senior Subordinated Notes and our 6¹/2% Senior Subordinated Notes due 2013 — Class B in May 2013 and our 2.50% Exchangeable Senior Subordinated Debentures in May 2033. The holders of our 2.50% Exchangeable Senior Subordinated Debentures can require us to purchase all or a portion of the debentures on each of 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 and our 6¹/2% Senior Subordinated Notes due 2013 — Class B through 2013, and our 2.50% Exchangeable Senior Subordinated Debentures through 2033. We may pay contingent interest to holders of the debentures during any six-month period commencing May 15, 2008, if the average trading price of the debentures for a five trading day measurement period immediately preceding the first day of the applicable six-month period equals 120% or more of the principal amount of the debentures. The contingent interest equals 0.25% per annum per $1,000 principal amount of debentures. In addition, we are obligated to pay commitment fees of 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 $38.6 million of program obligations as of September 30, 2005 and have unrecorded commitments of $45.4 million for programming that is not available to air as of September 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 $2.0 million as of September 30, 2005.

Net cash provided by operating activitiesdecreased $36.2 million to $25.2 million for the nine months ended September 30, 2005 compared to $61.4 million in the same period last year. The decrease was primarily the result of a decrease in our operating income for the nine months ended September 30, 2005 and one-time program buyout payments of $21.4 million in the nine months ended September 30, 2005 in connection with our acquisition of WNDY-TV and WWHO-TV.

Net cash used in investing activitieswas $112.3 million for the nine months ended September 30, 2005 compared to net cash provided by investing activities of $2.2 million in the same period last year. This change was primarily the result of

LIN TV CORP.
MANAGEMENT’S DISCUSSION AND ANALYSIS — Continued

our acquisition of WNDY-TV and WWHO-TV for $85.0 million in the nine months ended September 30, 2005, our deposit of $19.5 million paid in connection with entering into an agreement on August 19, 2005 to purchase five stations from Emmis Television and our sale of WEYI-TV for $24.0 million in the nine months ended September 30, 2004.

Net cash provided by financing activitiesincreased $149.0 million to $85.5 million for the nine months ended September 30, 2005 compared to net cash used in financing activities of $63.4 million for the same period last year. This increase is the result of the proceeds from the issuance of our long-term debt of $520.3 million, of which $170.0 is from our credit facility and an additional $175.0 million and $175.3 million is from the issuance of our 6¹/2% Senior Subordinated Notes and our 6¹/2% Senior Subordinated Notes — Class B, respectively. This was offset by an increase in our principal payments on long-term debt of $494.9 million in the nine months ended September 30, 2005 compared to $43.8 million for the same period last year, due to the repayment of $166.4 million of our 8% Senior Notes, $158.5 million of amounts owed under our prior credit facility and $170.0 million of the term loan portion of our credit facility.

We entered into a new credit facility on November 4, 2005 that included a $275.0 million term and a $275.0 million revolving credit facility, both of which mature in 2011. The proceeds of the credit facility will be used to complete the purchase of the Emmis stations during the fourth quarter of 2005 through the second quarter 2006 and repay the balance on the prior credit facility. We expect to incur additional extinguishment costs of $1.0 million related to the extinguishment of the prior credit facility during the fourth quarter of 2005.

Based on the current level of our operations and anticipated future growth, both internally generated as well as through acquisitions, 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 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 No. 123(R), has been delayed until the first quarter of 2006. SFAS No. 123(R) 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, 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. As allowed by SFAS No. 123(R), we have elected to use the Black-Scholes method of valuing options and the Modified Prospective Application, which applies SFAS No. 123(R) 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, We have adopted SFAS No. 123(R) effective October 1, 2005 and expect to record compensation expense of approximately $520,000 during the fourth quarter of 2005

In March 2005, the SEC staff issued 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 FIN No. 47, 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,

LIN TV CORP.
MANAGEMENT’S DISCUSSION AND ANALYSIS — Continued

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 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 SFAS 154, which is effective for changes and corrections of errors made in fiscal years beginning after December 15, 2005. SFAS 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 SFAS 154 are not expected to have a material impact on our consolidated financial statements.

In June 2005, the FASB issued guidance on SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” as amended (“SFAS 133”) in Derivative Implementation Group (“DIG”) Issue B38, “Embedded Derivatives: Evaluation of Net Settlement with Respect to the Settlement of a Debt Instrument through Exercise of an Embedded Put Option or Call Option (“DIG Issue B38”) and B39, “Embedded Derivatives: Application of Paragraph 13(b) to Call Options That Are Exercisable Only by the Debtor” (“DIG Issue B39”). The guidance in DIG Issue B38 clarifies that the potential settlement of a debtor’s obligation to a creditor that would occur upon exercise of a put or call option meets the net settlement criteria of SFAS No. 133. The guidance in DIG Issue B39 clarifies that an embedded call option that can accelerate the settlement of a debt host financial instrument should not be bifurcated and fair valued if the right to accelerate the settlement can be exercised only by the debtor (issuer/borrower), it is underlying an interest rate index and the investor will recover substantially all of its initial net investment. We adopted the DIG issues effective April 1, 2005 and neither DIG issue had a material impact on our consolidated financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our credit facilities, which are priced based on certain variable interest rate alternatives, expose us to market risk. There was $75.0 million outstanding as of September 30, 2005 under our revolving line of credit included in our credit facility. As of September 30, 2005, we were party to an interest rate swap agreement, not designated as a hedging instrument under SFAS No. 133, in the notional amount of $100.0 million to manage exposure to interest rate risk associated with the variable rate portion of our credit facility.

Our 2.50% Exchangeable Senior Subordinated Debentures have certain embedded derivative features that are required to be separately identified and recorded at fair value with a mark-to-market adjustment required each quarter. The value of these features on issuance of the debentures was $21.1 million and this amount was recorded as an original issue discount and is being accreted through interest expense over the period to May 2008. The derivative features embedded in our 2.50% Exchangeable Senior Subordinated Debentures and our interest rate swap agreement are recorded at fair market value in the line items “Other liabilities” and “Other assets”, respectively.

We have recorded a gain on derivative instruments in connection with the mark-to-market of these derivative instruments of $1.9 million and $3.5 million in the three and nine months ended September 30, 2005, respectively, compared to a gain of $9.0 million and $13.6 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 September 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 September 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 September 30, 2005 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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 2. Unregistered Sales of Equity Securities and Use of Proceeds

On August 17, 2005, our Board of Directors approved a share repurchase program authorizing the repurchase of up to $200.0 million of LIN TV’s class A common stock. Share repurchases under the program may be made from time to time in the open market or in privately negotiated transactions. There were no shares repurchased under the program during the three months ended September 30, 2005.

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

On September 15, 2005, the holders of class B common stock of LIN TV Corp., acting by written consent as a single class, authorized the issuance and sale by LIN Television Corporation of $190.0 million aggregate principal amount of 6¹/2% Senior Subordinated Notes due 2013 — Class B.

Item 6.Exhibits

Exhibits:


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.		Second 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.		Restated Certificate of Incorporation of LIN Television Corporation (filed as Exhibit 3.1 to the Quarterly Report on Form 10-Q of LIN TV Corp. and LIN Television Corporation for the fiscal quarter ended June 30, 2004 (File Nos. 001-31311 and 000-25206) and incorporated by reference herein).

3.4.		Restated By-laws of LIN Television Corporation (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.		Indenture, dated as of September 29, 2005, among LIN Television Corporation, as Issuer, the Guarantors named therein and The Bank of New York Trust Company, N.A., as Trustee, for the 6¹/2% Senior Subordinated Notes due 2013 – Class B (filed as Exhibit 4.1 to the Current Report on Form 8-K of LIN TV Corp. and LIN Television Corporation filed with the SEC on October 5, 2005 (File No. 000-25206) and incorporated by reference herein)

4.5.		Supplemental Indenture, dated as of March 10, 2005, among WAPA America, Inc., WWHO Broadcasting, LLC, LIN Television Corporation and The Bank of New York, as Trustee, for the 2.50% Exchangeable Senior Subordinated Debentures due 2033.

4.6.		Supplemental Indenture, dated as of March 10, 2005, among WAPA America, Inc., WWHO Broadcasting, LLC, LIN Television Corporation and The Bank of New York, as Trustee, for the 6¹/2% Senior Subordinated Notes due 2013.



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

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:
November 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)

Item 1. Financial Statements


LIN Television Corporation
Condensed Consolidated Balance Sheets			32
Condensed Consolidated Statements of Operations			33
Condensed Consolidated Statements of Cash Flows			34
Notes to Condensed Consolidated Financial Statements			35

LIN TELEVISION CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS


	September 30,			December 31,
	2005			2004
	(Unaudited)
	(In thousands, except share data)
ASSETS
Current assets:
Cash and cash equivalents	$	13,145		$	14,797
Accounts receivable, less allowance for doubtful accounts (2005 - $1,484; 2004 - $1,450)		68,446			70,639
Program rights		23,238			17,312
Other current assets		7,306			3,790

Total current assets		112,135			106,538
Property and equipment, net		197,682			197,565
Deferred financing costs		15,743			11,060
Equity investments		64,467			65,813
Program rights		13,189			12,165
Other assets		37,832			16,043
Goodwill		612,906			583,105
Broadcast licenses and other intangible assets, net		1,123,360			1,066,135

Total assets	$	2,177,314		$	2,058,424

LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	—		$	6,573
Accounts payable		2,599			7,774
Accrued interest expense		10,866			8,118
Accrued sales volume discount		3,924			6,462
Other accrued expenses		18,200			13,483
Program obligations		29,781			23,278

Total current liabilities		65,370			65,688
Long-term debt, excluding current portion		739,196			626,268
Deferred income taxes, net		439,306			445,695
Program obligations		8,787			12,008
Other liabilities		48,343			38,344

Total liabilities		1,301,002			1,188,003

Preferred stock of Banks Broadcasting, Inc., $0.01 par value, 179,322 and 173,822 issued and outstanding at September 30, 2005 and December 31, 2004, respectively		14,627			14,458

Stockholders’ equity:
Common stock, $0.01 par value; 1,000 authorized, issued and outstanding		—			—
Additional paid-in capital		1,078,443			1,072,320
Deferred compensation		(3,962	)		—
Accumulated deficit		(198,206	)		(201,767	)
Accumulated other comprehensive loss		(14,590	)		(14,590	)

Total stockholders’ equity		861,685			855,963

Total liabilities, preferred stock and stockholders’ equity	$	2,177,314		$	2,058,424

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

LIN TELEVISION CORPORATION

Condensed Consolidated Statements of Operations
(In thousands)
(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2005			2004			2005			2004
Net revenues	$	90,827		$	91,005		$	267,708		$	267,187

Operating costs and expenses:

Direct operating (excluding depreciation of $6.6 million and $7.5 million for the three months ended September 30, 2005 and 2004, respectively, and $22.8 million and $22.7 million for the nine months ended September 30, 2005 and 2004, respectively)		27,788			25,638			80,859			75,658
Selling, general and administrative		26,192			22,737			77,838			69,725
Amortization of program rights		6,833			6,481			19,222			18,116
Corporate		4,362			5,542			14,716			13,570
Depreciation and amortization of intangible assets		7,151			7,728			24,063			23,545

Total operating costs		72,326			68,126			216,698			200,614


Operating income		18,501			22,879			51,010			66,573

Other (income) expense
Interest expense, net		11,115			10,888			32,860			34,414
Share of income in equity investments		(410	)		(2,250	)		(2,119	)		(5,014	)
Minority interest in loss of Banks Broadcasting, Inc.		(96	)		(226	)		(382	)		(472	)
Gain on derivative instruments		(1,860	)		(9,026	)		(3,455	)		(13,646	)
Loss on extinguishment of debt		1,082			—			13,412			4,447
Other, net		95			917			261			1,138

Total other expense, net		9,926			303			40,577			20,867

Income from continuing operations before provision for income taxes and cumulative effect of change in accounting principle		8,575			22,576			10,433			45,706
Provision for income taxes		4,789			7,760			6,872			16,960

Income from continuing operations before cumulative effect of change in accounting principle		3,786			14,816			3,561			28,746

Discontinued operations:

Income from discontinued operations, net of tax provision of $311		—			—			—			(44	)
Loss from sale of discontinued operations, net of tax benefit of $1,094		—			—			—			1,284
Cumulative effect of change in accounting principle, net of tax effect of $0		—			—			—			(3,290	)

Net income	$	3,786		$	14,816		$	3,561		$	30,796

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

LIN TELEVISION CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)


	Nine months ended September 30,
	2005			2004
	(in thousands)
OPERATING ACTIVITIES:
Net income	$	3,561		$	30,796
Adjustment to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of intangible assets		24,063			23,545
Amortization of financing costs and note discounts		4,654			6,036
Amortization of program rights		19,222			18,116
Program payments		(21,545	)		(18,336	)
Program buyout payments related to acquisitions		(21,420	)		—
Loss on extinguishment of debt		13,412			4,447
Cumulative effect of change in accounting principle, net of tax impact		—			(3,290	)
Gain on derivative instruments		(3,455	)		(13,646	)
Share of income in equity investments		(2,119	)		(5,014	)
Deferred income taxes, net		5,351			13,000
Stock-based compensation		1,844			346
Other, net		816			890

Changes in operating assets and liabilities, net of acquisitions and disposals:
Accounts receivable		1,951			5,092
Program rights, net of program obligations		—			233
Other assets		(2,664	)		(4,146	)
Accounts payable		(1,398	)		(1,122	)
Accrued interest expense		2,748			(756	)
Accrued sales volume discount		(2,538	)		(1,766	)
Other liabilities		2,668			6,957

Net cash provided by operating activities		25,151			61,382


INVESTING ACTIVITIES:
Capital expenditures		(8,581	)		(17,500	)
Investment in equity investments		—			(650	)
Capital contribution from minority interest in Banks Broadcasting, Inc.		550			—
Distributions from equity investments		3,464			5,503
Acquisition of broadcast licenses		(232	)		(9,152	)
Deposit on acquisition of business		(19,500	)
Payments for business combinations		(85,000	)		—
Proceeds from sale of broadcast licenses and related operating assets		—			24,000
Other, net		(3,044	)		29

Net cash (used in) provided by investing activities		(112,343	)		2,230


FINANCING ACTIVITIES:
Net proceeds on exercises of employee stock options and phantom stock units and employee stock purchase plan issuances		1,935			1,563
Proceeds from issuance of long-term debt		520,252			—
Long-term debt financing costs		(9,599	)		(147	)
Net proceeds from revolver debt		75,000			(18,000	)
Principal payments on long-term debt		(494,940	)		(43,810	)
Cash expenses associated with early extinguishment of debt		(7,108	)		(3,016	)

Net cash provided by (used) in financing activities		85,540			(63,410	)


Net (decrease) increase in cash and cash equivalents		(1,652	)		202
Cash and cash equivalents at the beginning of the period		14,797			9,475

Cash and cash equivalents at the end of the period	$	13,145		$	9,677

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

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

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

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.

Note 2 — Stock-Based Compensation


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2005			2004			2005			2004

Net income, as reported	$	3,786		$	14,816		$	3,561		$	30,796
Add: Stock-based employee compensation expense, included in reported net income, net of related tax effect		55			70			1,106			208
Deduct: Total stock-based employee compensation expense determined under the fair value based method for all awards, net of related tax effect		(465	)		(1,016	)		(1,287	)		(2,516	)

Pro forma net income	$	3,376		$	13,870		$	3,380		$	28,488


	Three Months Ended September 30,						Nine Months Ended September 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	%

On September 15, 2005, the Company granted an aggregate of 264,000 shares of restricted stock with a grant date fair value of $14.88 per share. The fair value of the restricted shares is expensed over the period during which the restrictions lapse. The shares vest equally over a five-year period, subject to acceleration in certain circumstances if stated performance goals are attained. During the three months ended September 30, 2005, the Company recorded compensation expense of $38,000 in connection with the restricted stock grants.

Note 3 — Acquisitions and Dispositions


	WNDY-TV		WWHO-TV
Accounts receivable	$	437	$	87
Program rights, short-term		2,239		2,134
Other current assets		491		2,054
Property and equipment		7,373		7,433
Program rights, long-term		2,968		3,826
Broadcast licenses and other intangibles		32,687		25,527
Goodwill		19,496		10,300
Deferred tax assets		7,868		3,872

Total assets	$	73,559	$	55,233


Program obligations, short-term		4,803		2,980
Program obligations, long-term		7,395		7,277
Other long-term liabilities		13,861		7,476

Total liabilities	$	26,059	$	17,733


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				Nine Months Ended
	September 30,				September 30,
	2005		2004		2005		2004
Net revenues	$	90,827	$	96,464	$	272,364	$	283,571
Operating income		18,501		23,186		50,306		67,460
Net income		3,786		14,819		2,978		30,784

The following table presents summarized information for WEYI-TV included in the historical results:


	Three Months Ended		Nine Months Ended
	September 30, 2004		September 30, 2004
Net revenues	$	—	$	3,257
Operating income		—		960
Net income		—		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):


	September 30,		December 31,
	2005		2004
NBC Universal joint venture	$	54,439	$	55,604
WAND (TV) Partnership		10,028		10,209

	$	64,467	$	65,813

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


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2005			2004			2005			2004
Revenue	$	19,216		$	27,923		$	60,916		$	75,682
Other expense		(16,401	)		(16,487	)		(49,634	)		(48,921	)
Net income		2,815			11,436			11,282			26,761


	September 30,		December 31,
	2005		2004
Current assets	$	10,270	$	12,675
Non-current assets		231,033		233,957
Current liabilities		1,087		724
Non-current liabilities		815,500		815,500

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


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2005			2004			2005			2004
Net revenues	$	1,612		$	1,440		$	4,757		$	4,737
Operating loss		(506	)		(165	)		(580	)		(269	)
Net loss		(491	)		(243	)		(542	)		(346	)


	September 30,		December 31,
	2005		2004
Current assets	$	3,428	$	3,317
Non-current assets		23,750		24,283
Current liabilities		1,066		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):


	September 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		(3,989	)		(2,776	)

		2,991			2,870

Unamortized Intangible Assets:
Broadcast licenses		1,120,311			1,063,265
Other intangibles		58			—

Total broadcast licenses and other intangible assets, net	$	1,123,360		$	1,066,135
Goodwill		612,906			583,105

Total intangible assets, net	$	1,736,266		$	1,649,240

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				Nine Months Ended				Estimated amortization expense
	September 30,				September 30,				For the Year Ended December 31,
	2005		2004		2005		2004		2005		2006		2007		2008		2009

Amortization expense	$	547	$	270	$	1,213	$	825	$	1,611	$	374	$	53	$	43	$	43

Note 6 —Debt

Debt consisted of the following (in thousands):


	September 30,		December 31,
	2005		2004
Credit Facility	$	75,000	$	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
$190,000, 6 1/2% Senior Subordinated Notes due 2013 — Class B net of discount of $14,748)		175,252		—
$125,000, 2.50% Exchangeable Senior Subordinated Debentures due 2033 (net of discount of $11,056 and $14,215 at September 30, 2005 and December 31, 2004, respectively)		113,944		110,785

Total debt		739,196		632,841
Less current portion		—		6,573

Total long-term debt	$	739,196	$	626,268

fourth quarter of 2005 through the second quarter of 2006, pending approval by the FCC and other customary closing conditions and for general corporate purposes, including share repurchases.

The Company incurred charges of $13.4 million during the nine-month period ended September 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 issuance of the $190.0 million 6¹/2% Senior Subordinated Notes due 2013 — Class B and the $175.0 million principal amount of 6¹/2% Senior Subordinated Notes were capitalized and are being amortized over the term of the related debt.

Note 7 — Related Party Transactions

Note 8 — Contingencies

GECC Note.General Electric Capital Corporation (“GECC”), a subsidiary at General Electric, provided debt financing in connection with the formation of the joint venture with NBC Universal 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 Universal from the excess cash generated by the joint venture of approximately $38.5 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 Universal 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.

Note 9 — Retirement Plans

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


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2005			2004			2005			2004
Service cost	$	549		$	494		$	1,647		$	1,494
Interest cost		1,350			1,352			4,050			4,154
Expected return on plan assets		(1,435	)		(1,364	)		(4,305	)		(4,264	)
Amortization of prior service cost		30			47			90			125
Amortization of net loss		241			103			723			263

Net periodic benefit cost	$	735		$	632		$	2,205		$	1,772

Note 10 — Share Repurchase Program

Note 11 — Subsequent Events

The proceeds of the new revolving credit facility were used to repay the balance on the existing revolving credit facility. The Company intends to use proceeds from the new credit facility to complete the purchase of the Emmis stations in the fourth quarter of 2005 through the second quarter of 2006 pending approval by the FCC and other customary closing conditions, and for general corporate purposes, including share repurchases.

Note 12 — Recent Accounting Pronouncements

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 June 2005, the FASB issued guidance on SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” as amended (“SFAS 133”) in Derivative Implementation Group (“DIG”) Issue B38, “Embedded Derivatives: Evaluation of Net Settlement with Respect to the Settlement of a Debt Instrument through Exercise of an Embedded Put Option or Call Option (“DIG Issue B38”) and B39, “Embedded Derivatives: Application of Paragraph 13(b) to Call Options That Are Exercisable Only by the Debtor” (“DIG Issue B39”). The guidance in DIG Issue B38 clarifies that the potential settlement of a debtor’s obligation to a creditor that would occur upon exercise of a put or call option meets the net settlement criteria of SFAS No. 133. The guidance in DIG Issue B39 clarifies that an embedded call option that can accelerate the settlement of a debt host financial instrument should not be bifurcated and fair valued if the right to accelerate the settlement can be exercised only by the debtor (issuer/borrower), it is underlying an interest rate index and the investor will recover substantially all of its initial net investment. The Company adopted the DIG issues effective April 1, 2005 and neither DIG issue had a material impact on the Company’s consolidated financial statements.

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Lin Television (LNTV) Inactive 10-Q2005 Q3 Quarterly report

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