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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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Form 10-K

LIN TV Corp.
(Exact name of registrant as specified in its charter)

Commission File Number: 001-31311

LIN Television Corporation
(Exact name of registrant as specified in its charter)

Commission File Number: 000-25206

One West Exchange Street, Suite 5A, Providence, Rhode Island 02903
(Address of principal executive offices)

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

          Securities Registered Pursuant to Section 12(b) of the Exchange Act:

          Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o    No ý

          Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o    No ý

          Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

          Indicate by check mark whether the registrant has submitted electronically and posted to its corporate Web site, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding twelve months (or for such shorter period that the registrant was required to submit and post such files). Yes ý    No o

          Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý

          Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

          Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act.) Yes o    No ý

          The aggregate market value of the voting and non-voting common equity held by non-affiliates (based on the last reported sale price of the registrant's class A common stock on June 30, 2011 on the New York Stock Exchange) was approximately $275 million.

DOCUMENTS INCORPORATED BY REFERENCE

NOTE:

          This combined Form 10-K is separately filed by LIN TV Corp. and LIN Television Corporation. LIN Television Corporation meets the conditions set forth in general instruction I(1) (a) and (b) of Form 10-K 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 as of March 7, 2012: 32,934,118 shares.

          LIN TV Corp. Class B common stock, $0.01 par value, issued and outstanding as of March 7, 2012: 23,401,726 shares.

          LIN TV Corp. Class C common stock, $0.01 par value, issued and outstanding as of March 7, 2012: 2 shares.

          LIN Television Corporation common stock, $0.01 par value, issued and outstanding as of March 7, 2012: 1,000 shares.

   

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SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS

        This report contains certain forward-looking statements with respect to our financial condition, results of operations and business, including statements under the captions Item 1. "Business" and Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations". All of these forward-looking statements are based on estimates and assumptions made by our management, which, although we believe them to be reasonable, are inherently uncertain. Therefore, you should not place undue reliance upon such estimates or statements. We cannot assure you that any of such estimates or statements will be realized and actual results may differ materially from those contemplated by such forward-looking statements. Factors that may cause such differences include those discussed under the caption Item 1A. "Risk Factors", as well as the following:

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volatility and periodic changes in our advertising revenues;



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our guarantee of the General Electric Capital Corporation ("GECC") Note (as defined herein);



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economic conditions, including adverse changes in the national and local economies in which our stations operate and volatility and disruption of the capital and credit markets;



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effects of complying with accounting standards, including with respect to the treatment of our intangible assets;



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inability or unavailability of additional debt or equity capital;



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restrictions on our operations due to, and the effect of, our significant indebtedness;



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our ability to continue to comply with financial debt covenants dependent on cash flows;



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increased competition, including from newer forms of entertainment and entertainment media, changes in distribution methods or changes in the popularity or availability of programming;



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increased costs, including increased news and syndicated programming costs and increased capital expenditures as a result of acquisitions or necessary technological enhancements;



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effects of our control relationships, including the control that HM Capital Partners I LP ("HMC") and its affiliates have with respect to corporate transactions and activities we undertake;



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adverse state or federal legislation or regulation or adverse determinations by regulators, including adverse changes in, or interpretations of, the exceptions to the Federal Communications Commission ("FCC") duopoly rule and the allocation of broadcast spectrum;



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declines in the domestic advertising market;



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further consolidation of national and local advertisers;



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global or local events that could disrupt television broadcasting;



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risks associated with acquisitions including integration of acquired businesses;



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changes in television viewing patterns, ratings and commercial viewing measurement;



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changes in our television network affiliation agreements;



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changes in our retransmission consent agreements; and



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seasonality of the broadcast business due primarily to political advertising revenues in even years.

        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, to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

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PART I

Item 1.    Business

Overview

        LIN TV Corp. ("LIN TV") is a local multimedia company that operates or services 32 network-affiliates, television station web sites and mobile products in 15 U.S. markets, with multiple network-affiliates in 12 markets. Our highly-rated television stations deliver superior local news and community stories, along with top-rated sports and entertainment programming, to 7.4% of U.S. television homes. All of our television stations are affiliated with a national broadcast network and are primarily located in the top 75 Designated Market Areas ("DMA") as measured by Nielsen Media Research ("Nielsen"). We are a leader in the convergence of local broadcast television and the Internet and offer innovative online technologies and solutions that deliver measurable results to advertisers. In this report, the terms "Company," "we," "us" or "our" mean LIN TV Corp. and all subsidiaries included in our consolidated financial statements. Our class A common stock is traded on the New York Stock Exchange ("NYSE") under the symbol "TVL".

        We provide free, over-the-air broadcasts of our programming 24 hours per day to the communities we are licensed to serve. We are committed to serving the public interest by making advertising time available to political candidates, by providing free daily local news coverage, making public service announcements and broadcasting children's programming.

        We seek to have the largest local media presence in each of our local markets by combining strong network and syndicated programming with leading local news, and by pursuing our multi-channel strategy. We also deliver our content online and on mobile applications, which we believe could provide a significant revenue stream to the television broadcasting industry. Mobile digital broadcast television enables consumers to watch live television on their laptops, smartphones, tablet computers and other mobile devices. We expect over-the-air television delivered to mobile and out-of-home devices in our local markets to meet the growing demand of on-the-go consumers. Additionally, we invest in companies that focus on emerging media and interactive technologies to expand our local multi-platform and digital product offerings.

Development of Our Business

Ownership and organizational structure

        We are a Delaware corporation incorporated on February 11, 1998. Our Company (including its predecessors) has owned and operated television stations since 1966. LIN Television Corporation ("LIN Television"), our wholly-owned subsidiary, is a Delaware corporation and was incorporated on June 18, 1990. On May 3, 2002, we completed our initial public offering and our class A common stock began trading on the NYSE. Our corporate offices are at One West Exchange Street, Suite 5A, Providence, Rhode Island 02903.

        We have three classes of common stock. The class A common stock and the class C common stock are both voting common stock, with the class C common stock having 70% of the aggregate voting power. The class B common stock is held by current and former affiliates of HMC and has no voting rights, except that without the consent of a majority of the class B common stock, we cannot enter into a wide range of corporate transactions.

        This capital structure allowed us to issue voting stock while preserving the pre-existing ownership structure in which the class B stockholders did not have an attributable ownership interest in our television broadcast licenses pursuant to the rules of the FCC.

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        The following diagram summarizes our corporate structure as of March 7, 2012:

        All of the shares of our class B common stock are held by affiliates of HMC or former affiliates of HMC. The class B common stock is convertible into class A common stock or class C common stock in various circumstances. The class C common stock is also convertible into class A common stock in certain circumstances. If affiliates of HMC converted their shares of class B common stock into shares of class A common stock and the shares of class C common stock were converted into shares of class A common stock as of March 7, 2012, the holders of the converted shares of class C common stock would own less than 0.01% of the total outstanding shares of class A common stock and resulting voting power, and the affiliates of HMC would own 41.5% of the total outstanding shares of class A common stock and resulting voting power.

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Our television stations

        We own, operate or service 32 network-affiliates, including two affiliates pursuant to local marketing agreements, three affiliates pursuant to shared services agreements and one low-power station, which is affiliated with a national network and operates as a stand-alone station. We also have an equity investment in two other stations through a joint venture. The following table lists the network-affiliates that we own, operate or service, or in which we have an equity investment:

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Recent Acquisitions and Discontinued Operations

        On November 22, 2011, we acquired a 57.6% interest, (a 50.1% interest calculated on a fully diluted basis) in Nami Media, Inc. ("Nami Media"), a digital advertising management and technology company based in Los Angeles, CA. Nami Media serves the growing marketplace of online traffic quality management in cost per click ("CPC") advertising. Our investment in Nami Media fills a niche in our growing suite of digital product offerings and furthers the goal to be advertisers' preferred choice for multiplatform marketing opportunities. Additionally, on May 20, 2011, we acquired the assets of WCWF-TV in Green Bay, WI and certain assets of WBDT-TV in Dayton, OH. For additional information on these acquisitions, see Note 2—"Acquisitions" to our consolidated financial statements.

        On October 21, 2011, we reached an agreement to sell WWHO-TV, in Columbus, OH, and we completed the sale on February 16, 2012. Additionally, on January 3, 2012, we entered into an agreement for the sale of substantially all of the assets of WUPW-TV to WUPW, LLC. This transaction is subject to certain closing conditions, and is expected to close during 2012. For additional information on these discontinued operations, see Note 3—"Discontinued Operations" to our consolidated financial statements.

Description of Our Business

        Our vision is to be the market-leading local multimedia company and consumers' and advertisers' preferred choice for unique, innovative and relevant content on all platforms. We are evolving the business of media through strategic planning and initiatives that have transformed how our local communities consume our content.

        The principal components of our strategy include:

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Sustain Our Local News Leadership.  In 2011, we operated the number one or number two local news station in 80% of our news markets⁽¹⁾, 93% of our measured web sites ranked number one or number two versus our measured local broadcast competitors for unique visitors and page views⁽²⁾, and we earned several of our industry's top awards. The strength of our local news brands is a result of our ability to produce the highest quality and quantity of local content on a ²⁴/7 real-time basis and offer unique selling propositions for our advertisers. For example, the modernization of our newsrooms into multimedia content centers with trained journalists who have a wide range of skills, including video camera operation, writing and editing, has resulted in more content and better coverage. Also during the year, we launched high definition ("HD") newscasts at five of our television stations. We now have 16 television stations fully-equipped with HD equipment for the premium broadcast of local, network, syndicated and commercial content, with plans for more in 2012. We believe that strong local news programming is among the most important elements in building loyalty amongst viewers and attracting local advertising revenue.



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Maximize Our Operating Efficiencies.  We continued to achieve company-wide operating efficiencies through economies of scale in the purchase of programming, ratings services, research services, national sales representation, capital equipment and other vendor services in 2011. Our two regional technology centers centralized the engineering, operations and administrative functions for

   

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⁽¹⁾

Average of LIN Media's 2011 Nielsen Ratings Based on Key Demographics: February, May and November. Monday-Friday, Early Morning, Early Evening, Late News.

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comScore media metrics data; December 2011.

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all of our major mid-west, New England and mid-Atlantic television stations, which has effectively reduced capital costs. Also in 2011, we finalized the transition of all of our television sales, traffic, promotions and billings to a new state-of-the-art software platform that provides better insight and control, while generating cost savings. Our use of new technology to streamline operations has also further modernized our newsrooms and created a standardized and instantaneous reporting culture that drives cost reduction and efficiency.

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Expand Our Digital Products & Services.  We continue to focus on bringing innovative products to market and building our digital assets. In 2011, we launched our version 2.0 iPad app, as well as citizens' journalism technology that allows our viewers to participate in the newsgathering process and instantaneously upload photos and videos to our stations' news desks right from mobile devices. RMM, our online advertising and media services business, expanded its unique service offerings with the launch of an "Agency Alliance Program" as well as two new video advertising solutions that offer advertisers greater control of their audience, content, and technology. Also, in 2011, we entered into a joint venture with CultureMap Austin, a new daily digital magazine that focuses on culture and lifestyle, and acquired a majority ownership position in Nami Media, a digital advertising management and technology company based in Los Angeles, CA, that specializes in performance marketing, one of the fastest growing areas of Internet advertising. Both strategic investments will help differentiate our company, monetize our products, and become a more significant player in the digital media space. Finally, an important part of our strategy is to constantly evaluate technology that will enhance our users' experience. As a result, we launched a new photo gallery and a new video player that showcased a larger library of local and syndicated video, as well as improved the video viewing experience.



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Grow Our Revenue Share Through a Focus on Local Programming.  We are committed to improving the quality of our existing programs, developing new local programs, and generating new sources of revenue. Local programming allows us to leverage our existing production teams and on-air talent while limiting our exposure to long-term syndicated programming contracts. It also allows us to be more creative and offer unique local marketing solutions beyond :30 and :60 second spots to local advertisers. In addition, local programming provides differentiated proprietary content for our local websites and mobile products. In 2011, we launched our 11^th local lifestyle program in the Buffalo, NY market. We added approximately 1,350 more local programming hours in 2011, as compared to 2010. We believe that our commitment to localism continues to build brand loyalty and differentiate us from our competition.



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Continue to Pursue Our Multi-Channel Strategy.  We believe our spectrum has value beyond traditional television channels, and digital technology enables us to separate a portion of that spectrum for incremental services. We have been actively exploring uses of that spectrum and reinventing existing channels to better meet the needs of our community. In 2011, we launched Bounce TV, the nation's first over-the-air broadcast network designed for African-American audiences, in five of our markets, and Antenna TV, a new digital multicast network featuring classic television shows and movies, in Ft. Wayne, IN. In addition, our top-rated CBS station in Terre Haute, IN launched a new FOX affiliate on its digital channel. The powerful combination of both FOX and CBS is great for both our viewers and our advertisers. Our President and Chief Executive Officer is also President of the Open Mobile Video Coalition, an organization focused on developing technology to provide live, local and national over-the-air digital television to consumers via next-generation portable and mobile devices. Our multi-channel strategy helps us appeal to a wider audience and market of advertisers while providing economies of scale to provide these additional programming services at a low incremental cost.



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Secure Subscriber Fees from Pay-Television Operators.  According to Nielsen, cable, satellite television and telecommunications companies currently provide video program services to approximately 90% of total U.S. television households⁽³⁾. The surge of competition from satellite and

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telecommunications companies, combined with our strong local and national programming, provides us with compelling negotiating positions to obtain compensation for our channels. It is of critical importance to the broadcast industry that pay-television operators pay subscriber fees that are commensurate with the superior ratings our channels achieve relative to cable channels. We have successfully negotiated and will continue to negotiate with pay-television operators in our local markets to ensure we receive our fair share of subscription fees.

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Provide Superior Community Service.  Our model of community service exemplifies broadcasting's great value and responsibility to the local community. We provide programming that is responsive to commuity needs, such as, emergency alerts, closed captioning for hearing impaired viewers, and children's programming. In addition, we support numerous non-profit organizations, programs and events that help make the communities we serve better, stronger, and more vibrant places to live, work, and do business. We believe it is critically important to ensure the dynamic future of our industry, which is why we have been awarding two-year scholarships to ambitious students interested in a wide spectrum of fields in or relating to broadcast television since 1998. In 2011, we announced the expansion of our Minority Scholarship and Training Program to include a new two-year scholarship and internship for minority students pursuing a career in digital media. The decision to expand the program reflects the continued growth of our digital business and our commitment to promoting diversity in the workplace, which deepens the connections to our local communities.

Principal Sources of Revenue

Local, national and political advertising revenues

        We generate local, national and political advertising revenues principally from advertising time sold in our local news, network and syndicated programming. In general, advertising rates are based upon a variety of factors, including:

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size and demographic makeup of the market served by the television station;



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a program's popularity among television viewers;



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number of advertisers competing for the available time;



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availability of alternative advertising media in the station's market area;



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our station's overall ability to attract viewers in its market area;



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our station's ability to attract viewers among particular demographic groups that an advertiser may be targeting; and



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effectiveness of our advertising sales force.

Retransmission consent fees

        We have retransmission consent agreements with cable, satellite and telecommunications providers from which we earn retransmission consent fees for the right to carry our signals in their pay television services to consumers.

Television station web site revenues

        We generate revenues through advertisements on our television stations' web sites and mobile applications.

   

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⁽³⁾

Nielsen 2011-2012 Universe Estimates. Media Related TV Households and Penetrations by DMA; November 2011.

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Interactive revenues

        We generate interactive revenues primarily by providing online advertising and media services through our online advertising and media services business, RMM, and Nami Media, our digital advertising management and technology company.

Other revenues

        Other revenues include network compensation that we historically received from ABC, CBS and NBC for our carriage of their network programming. However, due to the prevailing trends in our industry, our recent agreements with these networks now reflect the elimination of network compensation payments to us and/or require that we pay compensation to the network. Occasionally, we barter our unsold advertising inventory for goods and services that are required to operate our television stations or are used in sales and marketing efforts. We also acquire certain syndicated programming by providing a portion of the available advertising inventory within the program, in lieu of cash payments.

        Additionally, we receive other revenues from sources such as renting space on our television towers, renting our production facilities, copyright royalties and providing television production services. Finally, we earn fee income through shared services agreements for three stations located in the Albuquerque-Santa Fe and Dayton markets, under which we provide technical, engineering, promotional, administrative and other operational support services from our stations that we own and operate within each of those markets. We also have a joint sales agreement for the station in the Dayton market, pursuant to which we provide advertising sales services.

Sources and Availability of Programming

        We program our television stations from the following program sources:

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News and general entertainment programming that is produced by our local television stations;



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Network programming such as "CSI" or "Modern Family";



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Syndicated programming: off-network programs, such as "Criminal Minds" or "How I Met Your Mother" and first-run programs, such as "Jeopardy", "Entertainment Tonight" or "Wheel of Fortune";



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Paid programming: arrangements where a third party pays our stations for a block of time, generally in one-half hour or one hour time periods to air long-form advertising or "infomercials";



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Digital subchannel content affiliations or agreements such as "Bounce TV", "Antenna TV" and "CoolTV"; and



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Local Weather Station: we provide a 24-hour weather channel to local cable systems in certain of our television markets.

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Locally produced news and general entertainment programming

        Our network-affiliates produce an aggregate of 554 hours of local news programming per week that we broadcast on all but three of our network-affiliates. Local news programming also allows us greater control over our programming costs.

        Our current network affiliations and number of weekly hours of network, local news and other local programming are as follows:

Network programming

        All of our stations are affiliated with one of the national television networks. Our network affiliation agreements provide a local station certain exclusive rights and an obligation, subject to certain limited preemption rights, to carry the network programming. While the networks retain most of the advertising time within their programs for their own use, the local station also has the right to sell a limited amount of advertising time within the network programs. Other time periods, which are not programmed by the

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networks, are programmed by the local station, for which the local station retains all of the advertising revenues. Networks also share certain of their programming with cable networks and make certain of their programming available through their web site or on web sites such as hulu.com. These outlets compete with us for viewers in the communities served by our stations.

        The programming strength of a particular national television network may affect a local station's competitive position. Our stations, however, are diversified among the various networks, reducing the potential impact of any one network's performance. We believe that national television network affiliations remain an efficient means of obtaining competitive programming, both for established stations with strong local news franchises and for newer stations with greater programming needs.

        Our stations that are affiliated with ABC, CBS, FOX and NBC generate a higher percentage of revenue from the sale of advertising within network programming than stations affiliated with CW and MyNetwork. Our affiliation agreements have terms with scheduled expiration dates ranging through December 31, 2017. These agreements are subject to earlier termination by the networks under specified circumstances, including a change of control of our Company, which would generally result from the acquisition of shares having 50% or more of the voting power of our Company.

Syndicated programming

        We acquire the rights to programs for time periods in which we do not air our local news or network programs. These programs generally include first-run syndicated programs, such as "Jeopardy", "Entertainment Tonight" or "Wheel of Fortune", or reruns of current or former network programs, such as "Criminal Minds" or "How I Met Your Mother". We pay cash for these programs or exchange advertising time within the program for the cost of the program rights. We compete with other local television stations to acquire these programs. In addition, a television viewer can now choose to watch many of these programs on national cable networks or purchase these programs on DVDs or via downloads to computers, mobile video devices or web-based video players, which increases fragmentation of our local television audience.

Distribution of Programming

        The programming that airs on our television stations can reach the television audience by one or more of the following distribution systems:

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Full-power television stations, including stations we operate under local marketing agreements;



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Cable television systems;



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Satellite television systems;



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Telecommunications systems;



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Internet, mobile and other digital services;



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Low-power television stations; and



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Digital channels.

Full-power television stations

        We own, operate or service 31 full-power television stations that operate on digital over-the-air channels 7 through 50. Our full-power television stations include two full-power stations for which we provide programming, sales and other related services under local marketing agreements, and three full-power stations for which we provide technical, engineering, promotional, administrative and other operational support services under shared services agreements (for one of these stations we also provide

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advertising sales services under a joint sales agreement). See "Our television stations" for a listing of our full-power television stations.

        The FCC television licenses for the two full-power television stations for which we provide programming, sales and other related services under local marketing agreements ("LMAs") are not owned by us. Revenues generated by these stations contributed 4%, 4% and 5% to our net revenues for the years ended December 31, 2011, 2010 and 2009, respectively. We incur programming costs, operating costs and capital expenditures related to the operation of these stations, and retain all advertising revenues. In Providence and Austin, the two local markets where these stations are located, we own and operate another station. These LMA stations are an important part of our multi-channel strategy. We have purchase options to acquire the FCC licenses for the LMA stations in Providence and Austin, which are exercisable if the legal requirements limiting ownership of these stations change.

Cable, satellite television and telecommunications systems

        According to Nielsen, cable, satellite television and telecommunications companies currently provide video program services to approximately 90% of total U.S. television households, with cable and telecommunications companies serving 60% of U.S. households and direct broadcast satellite ("DBS") providers serving 30%. As a result, cable, satellite television and telecommunications companies are not only primary competitors, but the primary means by which our television audience views our television stations. Most of our stations are distributed pursuant to retransmission consent agreements with multichannel video program distributors that operate in markets we serve. As of December 31, 2011, we had retransmission consent agreements with 115 distributors, including 111 Multiple System Operators ("MSOs") and regional telecommunications companies, the two major satellite television providers, and two national telecommunications providers. For an overview of FCC regulations governing carriage of television broadcast signals by multichannel video program distributors ("MVPDs"), see "Federal Regulation of Television Broadcasting—Cable and Satellite Carriage of Local Television Signals."

Internet, mobile and other digital services

        We operate television station web sites in 15 U.S. markets and offer a growing portfolio of Internet-based products and services that provide traditional and new audiences around-the-clock access to our trusted local news and information. We launched our mobile business in 2009 with iPhone and BlackBerry smartphone applications and we have since launched Android and iPad applications. In addition, we launched SMS/text messaging, video blogging and other advanced interactive features that further extend the distribution of our content.

Low-power television stations

        We own and operate a number of low-power television stations. We operate these stations either as a stand-alone or satellite stations. These low-power broadcast television stations are licensed by the FCC to provide service to substantially smaller areas than those of full-power stations.

        In eight of our markets, Albuquerque, Austin, Grand Rapids, Green Bay, Indianapolis, Springfield, Terre Haute and Norfolk-Portsmouth-Newport News, we use our low power stations to extend the geographic reach of our primary stations in these markets. In Grand Rapids, we affiliated WXSP-CD, a group of low-power television stations, with MyNetworkTV, to cover substantially all of the local market.

Seasonality of Our Business

        Our advertising revenues are generally highest in the second and fourth quarters of each calendar year, due to higher advertising in the spring season and in the period leading up to and including the end-of-year holiday season. Our operating results are also significantly affected by annual cycles, as advertising revenues are generally higher in even-numbered years due to additional revenues associated

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with political advertising related to local and national elections, and incremental advertising revenues associated with Olympic broadcasts.

        Our industry is cyclical in nature and affected by prevailing economic conditions. Since we rely on sales of advertising for a substantial majority of our revenues, our operating results are sensitive to general economic and regional conditions in each local market where we operate.

Joint Venture with NBCUniversal

        We hold an approximate 20% equity interest, and NBCUniversal Media, LLC ("NBCUniversal") holds the remaining approximate 80% equity interest, in a joint venture which is a limited partner in a business that owns television stations KXAS-TV, an NBC affiliate in Dallas, and KNSD-TV, an NBC affiliate in San Diego. We and NBCUniversal each have a 50% voting interest in the joint venture. NBCUniversal operates the two stations pursuant to a management agreement.

        The joint venture is the obligor on an $815.5 million non-amortizing senior secured note due 2023 to GECC (the "GECC Note"). The GECC Note bears interest at a rate of 8% per annum until March 1, 2013 and 9% per annum thereafter. LIN TV has guaranteed the payment of principal and interest on the GECC Note.

        In January 2011, Comcast Corporation acquired control of the business of NBCUniversal and now owns and controls 51% of NBCUniversal, LLC, while a wholly-owned subsidiary of General Electric Company ("GE") owns the remaining 49%. GECC remains a wholly-owned subsidiary of GE.

        In light of the adverse effect of the recent economic downturn on the joint venture's operating results, we entered into an agreement with NBCUniversal in 2009, which covered the period from March 6, 2009 through April 1, 2010, and in 2010 we entered into a second agreement, which covered the period from April 2, 2010 through April 1, 2011. These agreements provided that: (i) we and NBCUniversal waived the requirement that the joint venture maintain debt service reserve cash balances of at least $15 million; (ii) the joint venture would use a portion of its existing debt service reserve cash balances to fund interest payments on the GECC Note in 2009 and 2010; (iii) NBCUniversal agreed to defer its receipt of 2008, 2009 and 2010 management fees; and (iv) we agreed that if the joint venture did not have sufficient cash to fund interest payments on the GECC Note through April 1, 2011, we and NBCUniversal would each provide the joint venture with a shortfall loan on the basis of our percentage of economic interest in the joint venture.

        On March 14, 2011, we and GE entered into an agreement covering the period from April 2, 2011 through April 1, 2012 (the "2011 Shortfall Funding Agreement"). Under the terms of the 2011 Shortfall Funding Agreement, we agreed that if the joint venture does not have sufficient cash to fund interest payments on the GECC Note through April 1, 2012, we and GE would each provide the joint venture with a shortfall loan. Any shortfall loans funded by us under the 2011 Shortfall Funding Agreement are calculated on the basis of our percentage of economic interest in the joint venture, and GE's share of shortfall loans is calculated on the basis of NBCUniversal's percentage of economic interest in the joint venture. Solely to enable the joint venture with NBCUniversal to obtain shortfall loans from GE, the joint venture (i) amended its credit agreement with GECC, (ii) amended the LLC Agreement governing the operation of the joint venture, and (iii) received the consent of Comcast Corporation to the terms and conditions on which GE provides its proportionate share of any joint venture debt service shortfall. NBCUniversal acknowledged and agreed to the terms of the 2011 Shortfall Funding Agreement.

        During the years ended December 31, 2011 and 2010, pursuant to the shortfall funding agreements with NBCUniversal and GE, we made shortfall loans in the aggregate principal amount of $2.5 million and $4.1 million, respectively, representing our approximate 20% share in debt service shortfalls. Concurrent with our funding of the shortfall loans, NBCUniversal and GE funded shortfall loans in the aggregate

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principal amounts of $9.7 million and $15.9 million, respectively, in respect of NBCUniversal's approximate 80% share in debt service shortfalls.

        Because of anticipated future cash shortfalls at the joint venture, on March 5, 2012, we and GE entered into an agreement covering the period from April 2, 2012 through April 1, 2013 (the "2012 Shortfall Funding Agreement"). Under the terms of the 2012 Shortfall Funding Agreement, we agreed that if the joint venture does not have sufficient cash to fund interest payments on the GECC Note through April 1, 2013, we and GE would each provide the joint venture with a shortfall loan. Any shortfall loans funded by us under the 2012 Shortfall Funding Agreement will be calculated on the basis of our percentage of economic interest in the joint venture, and GE's share of shortfall loans will be calculated on the basis of NBCUniversal's percentage of economic interest in the joint venture. GE's obligation to fund shortfall loans under the 2012 Shortfall Funding Agreement is conditioned upon the receipt of the consent of Comcast Corporation to the terms and conditions on which GE provides its proportionate share of any shortfall; provided that Comcast's consent may not be unreasonably withheld. NBCUniversal has acknowledged and agreed to the terms of the 2012 Shortfall Funding Agreement.

        Under the terms of the joint venture's TV Master Service Agreement with NBCUniversal, management fees owed by the joint venture to NBCUniversal will continue to accrue, but are not payable if any existing joint venture shortfall loans remain outstanding.

        We recognize shortfall funding liabilities to the joint venture on our consolidated balance sheets when those liabilities become both probable and estimable. These liabilities become probable and estimable when joint venture management provides us with budget or forecast information of operating cash flows and working capital needs indicating that a debt service shortfall is probable to occur, and for periods beyond joint venture management's forecast, we develop our own internal estimates of debt service shortfalls. Additionally, we accrue shortfall funding liabilities only when we have reached or intend to reach a shortfall funding agreement covering the period for which we estimate debt service shortfalls to occur. As further described in Note 15—"Commitments and Contingencies" to our consolidated financial statements, we estimate our approximate 20% share of debt service shortfalls to be $4.1 million for 2012 and into 2013. We believe that cash shortfalls beyond the amounts currently accrued are not probable. However, our prospective shortfall obligations could vary from our estimate based upon changes in the performance of the joint venture stations and any changes to the proportionate share of each party's debt service shortfall.

        Our ability to honor our shortfall loan obligations under the 2012 Shortfall Funding Agreement is limited by certain covenants contained in our senior secured credit facility and the indenture governing our 8³/8% Senior Notes ("Senior Notes"). Based on our 2012 and 2013 estimate of debt service shortfalls at the joint venture, and our forecast of total leverage and consolidated EBITDA during 2012 and into 2013, we expect to have the capacity within these restrictions to provide funding to the joint venture for the $4.1 million accrued shortfall liability. If we are unable to make payments under the 2012 Shortfall Funding Agreement, or a future shortfall funding agreement, the joint venture may be unable to fund interest obligations under the GECC Note, resulting in an event of default.

        For more information about our joint venture with NBCUniversal, see Item 1A. "Risk Factors—The GECC Note could result in significant liabilities, including (i) requiring us to make short-term cash payments to the NBCUniversal joint venture to fund interest payments and (ii) potentially giving rise to the acceleration of our existing indebtedness, which would cause such existing indebtedness to become immediately due and payable," as well as Note 15—"Commitments and Contingencies" to our consolidated financial statements.

Competitive Conditions in the Television Industry

        The television broadcast industry has become highly competitive as a result of new technologies and new program distribution systems. In most of our local markets, we compete directly against other local

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broadcast stations and cable networks carried on cable, satellite television and telecommunication systems for audience. We also compete with online video services, including local news web sites and web sites such as hulu.com, which provide access to some of the same programming, including network programming that we provide, and other emerging technologies. Many of our current and potential competitors have greater financing, marketing, programming, and broadcasting resources than we do. Technological innovation and the resulting proliferation of television entertainment alternatives, such as cable, satellite television and telecommunications video services, Internet, wireless, pay-per-view and video-on-demand, digital video recorders, DVDs and mobile video devices have fragmented television viewing audiences and have subjected free over-the-air television broadcast stations to new types of competition. As a result, we are experiencing increased competition for viewing audience and advertisers.

Federal Regulation of Television Broadcasting

        Overview of Regulatory Issues.    Our television operations are subject to the jurisdiction of the FCC under the Communications Act of 1934, as amended (the "Communications Act"). The Communications Act prohibits the operation of broadcast stations except pursuant to licenses issued by the FCC and empowers the FCC, among other things, to issue, renew, revoke and modify broadcasting licenses; assign frequency bands; determine stations' frequencies, locations and power; regulate the equipment used by stations; and to impose penalties—including monetary forfeitures, short-term renewal of licenses and, in especially egregious cases, license revocation or denial of license renewals—for violations of its regulations.

        The Communications Act prohibits the assignment of a broadcast license or the transfer of control of a licensee without the FCC's prior approval. The FCC also regulates certain aspects of the operation of cable television systems, DBS systems and other electronic media that compete with broadcast stations. In addition, the FCC regulates matters such as television station ownership, network-affiliate relations, cable and DBS systems' carriage of television station signals, carriage of syndicated and network programming on distant stations, political advertising practices, children's programming and obscene and indecent programming.

        Spectrum Allocation.    Pursuant to the Communications Act, the FCC bears responsibility for the allocation and licensing of all non-federal government spectrum. Subject to certain procedural, congressional, and judicial constraints, the FCC has the ability to reallocate entire spectrum bands to a new use or to modify individual licenses to a new use. An FCC license holder is entitled to a bundle of rights related to that license; however ownership of the underlying spectrum is retained by the federal government. As a part of its National Broadband Plan, the FCC requested additional authority from Congress to hold incentive spectrum auctions, whereby current users of particular bands or licenses would receive compensation for voluntarily relinquishing some or all rights to spectrum they are licensed to use. On February 17, 2012, Congress approved legislation authorizing the FCC to conduct incentive spectrum auctions. The legislation, which the President subsequently signed into law, includes safeguards for broadcasters. In particular, the legislation requires the FCC to make all reasonable efforts to ensure that stations retain their existing coverage areas, prevents the FCC from forcing a broadcaster to move from a UHF to a VHF channel, and establishes a fund to reimburse broadcasters for reasonable relocation expenses relating to the spectrum repacking. It is expected that the incentive auction process will require several rule making proceedings, which may span several years. We cannot predict the timing or scope of the incentive spectrum auctions, nor the impact, if any, that the reallocation of spectrum will have on our business.

        License Renewals.    Under the Communications Act, the FCC generally may grant and renew broadcast licenses for terms of eight years, although licenses may be renewed for a shorter period under certain circumstances. The Communications Act requires the FCC to renew a broadcast license if the FCC finds that (i) the station has served the public interest, convenience and necessity; (ii) there have been no serious violations of either the Communications Act or the FCC's rules and regulations by the licensee;

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and (iii) there have been no other serious violations that taken together constitute a pattern of abuse. In making its determination, the FCC may consider petitions to deny but cannot consider whether the public interest would be better served by issuing the license to a person other than the renewal applicant. We are in good standing with respect to each of our FCC licenses. The table on page 6 includes the expiration date of each of the licenses for the stations that we own, as well as for the stations to which we provide services or in which we have an equity investment through a joint venture. As indicated in the table, the licenses for these stations have expiration dates ranging between 2006 and 2015. License renewal applications were timely filed for each of the stations for which the license is now expired. Once an application for renewal is filed, each station remains licensed while its application is pending, even after its license expiration date has passed. The licenses for the joint venture stations and WNAC have long-standing applications for renewal that remain pending with the FCC. Action on many license renewal applications may have been delayed for reasons, such as, the pendency of complaints that programming provided by the various networks contained indecent material and complaints regarding alleged violations of sponsorship identification rules. We cannot predict when the FCC will act on pending renewal applications. We expect the FCC to renew each of these licenses but we make no assurance that it will do so.

        Ownership Regulation.    The Communications Act and FCC rules limit the ability of individuals and entities to have ownership or other attributable interests in certain combinations of broadcast stations and other media. The Communications Act also requires the FCC to review its broadcast ownership rules every four years to determine whether they remain necessary in the public interest. In 1999, the FCC modified its local television ownership rules. In 2003, the FCC issued an order that would have liberalized most of the ownership rules, permitting us to acquire television stations in certain markets where we are currently prohibited from acquiring additional stations. In 2004, the Third Circuit Court of Appeals stayed and remanded several of the FCC's 2003 ownership rule changes. In July 2006, as part of the FCC's statutorily required quadrennial review of its media ownership rules, the FCC sought comment on how to address the issues raised by the Third Circuit Court of Appeals' decision. In February 2008, the FCC released an order that re-adopted its 1999 local television ownership rules, and those rules are currently in effect. Several parties appealed the FCC's February 2008 decision, and in July 2011, the United States Court of Appeals for the Third Circuit denied those petitions. On December 22, 2011, the FCC issued its Notice of Proposed Rulemaking ("NPRM") as part of its 2010 Quadrennial Review of the media ownership rules. The NPRM indicates that the FCC intends to maintain the current local television ownership rules with only minor modifications. Despite the preliminary conclusions in the NPRM, we cannot predict whether the pending quadrennial review proceeding may ultimately result in changes to the FCC's broadcast ownership rules. The FCC's current ownership rules that are material to our operations are summarized below.

        Local Television Ownership.    Under the FCC's current local television ownership (or "duopoly") rule, a party may own multiple television stations without regard to signal contour overlap provided they are located in separate Nielsen DMAs. In addition, the rules permit parties to own up to two TV stations in the same DMA so long as (i) at least one of the two stations is not among the top four-ranked stations in the market based on audience share at the time an application for approval of the acquisition is filed with the FCC, and (ii) at least eight independently owned and operating full-power commercial and non-commercial television stations would remain in the market after the acquisition. In addition, without regard to the number of remaining or independently owned television stations, the FCC currently permits television duopolies within the same DMA so long as the commonly owned stations' signal contours do not overlap. Stations designated by the FCC as "satellite" stations are exempt from the local television ownership rule. Also, the FCC may grant a waiver of the local television ownership rule if one of the two television stations is a "failed" or "failing" station or if the proposed transaction would result in the construction of a new television station (an unbuilt-station waiver). We believe that we are currently in compliance with the local television ownership rule.

        The FCC's 1999 ownership order established a rule attributing LMAs for ownership purposes. The FCC grandfathered LMAs that were entered into prior to November 5, 1996, permitting those stations to

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continue operations pursuant to such LMAs. The FCC, which retains the authority to review the status of grandfathered LMAs, stated it would conduct a case-by-case review of grandfathered LMAs and assess the appropriateness of extending the grandfathering periods. We do not know when, or if, the FCC will conduct any such review of grandfathered LMAs. Grandfathered local marketing agreements can be freely transferred during the grandfather period, but duopolies may be transferred only where the two-station combination continues to qualify under the duopoly rule. We currently have grandfathered LMAs under which we provide programming to stations in Providence, Rhode Island and Austin, Texas.

        In 2010 and 2011, we entered into shared services agreements ("SSAs") and certain other arrangements for stations in Dayton, Ohio and Albuquerque, New Mexico. SSAs are permitted under the FCC's local television ownership rule and allow for technical, engineering, promotional, administrative and other operational support services. SSAs are different from LMAs in various respects, for example, only a limited amount of programming is permitted under an SSA. The FCC included in the NPRM a review of SSAs and seeks comment whether they should be attributable for purposes of the media ownership rules. We cannot predict whether the pending quadrennial review proceeding may ultimately result in changes to the FCC's rules regarding SSAs.

        National Television Ownership Cap.    The Communications Act, as amended in 2004, limits the number of television stations one entity may own nationally. Under the rule, no entity may have an attributable interest in television stations that reach, in the aggregate, more than 39% of all U.S. television households. The FCC currently discounts the audience reach of a UHF station by 50% when computing the national television ownership cap. Our stations reach is approximately 7% of U.S. households.

        Attribution of Ownership.    Under the FCC's attribution policies, the following relationships and interests generally are attributable for purposes of the FCC's broadcast ownership restrictions:

•

holders of 5% or more of the licensee's voting stock, unless the holder is a qualified passive investor, in which case the threshold is a 20% or greater voting stock interest;



•

all officers and directors of a licensee and its direct or indirect parent(s);



•

any equity interest in a limited partnership or limited liability company, unless properly "insulated" from management activities; and



•

equity and/or debt interests which in the aggregate exceed 33% of a licensee's total assets, if the interest holder supplies more than 15% of the station's total weekly programming, or is a same-market broadcast company, cable operator or newspaper (the "equity/debt plus" standard).

        Under the single majority shareholder exception to the FCC's attribution policies, otherwise attributable interests under 50% are not attributable if a corporate licensee is controlled by a single majority shareholder and the minority interest holder is not otherwise attributable under the "equity/debt plus" standard.

        Because of these multiple ownership and cross-ownership rules, any person or entity that acquires an attributable interest in us may violate the FCC's rules if that purchaser also has an attributable interest in other television or radio stations, or in daily newspapers, depending on the number and location of those radio or television stations or daily newspapers. Such person or entity also may be restricted in the companies in which it may invest to the extent that those investments give rise to an attributable interest. If the holder of an attributable interest violates any of these ownership rules or if a proposed acquisition by us would cause such a violation, we may be unable to obtain from the FCC one or more authorizations needed to conduct our television station business and may be unable to obtain the FCC's consents for certain future acquisitions.

        Digital Television.    We terminated all analog broadcasts on our full power stations on or before June 12, 2009 in connection with the national transition to digital television. Following the transition, each

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of our full power stations broadcasts a 19.4 megabit-per-second (Mbps) data stream, rather than a single analog program stream. FCC regulations permit substantial flexibility in how we use that data stream. For example, we are permitted to provide a mix of high definition and standard television program streams free-to-air, additional program-related data, subscription video or audio streams, and non-broadcast services. A new technical standard, currently being tested, would permit digital stations to provide video and data streams that can be more readily received on mobile devices (such as computers and smartphones), if those devices incorporate the technology. These digital channels remain subject to specific FCC regulations. For example, we are required to carry additional children's educational programming if we transmit multiple program streams, and we must pay the U.S. Treasury 5% of gross revenues for any non-broadcast services we provide using our digital signals. The FCC is evaluating whether to impose further public interest programming requirements on digital channels. The FCC's digital transition implementation plan maintained the secondary status of low-power television ("LPTV") stations but did not set a deadline for such stations to convert to digital operations. In July 2011, the FCC set a firm deadline, and by September 1, 2015 LPTV stations must cease analog broadcasts and convert to digital operations.

        Cable and Satellite Carriage of Local Television Signals.    Pursuant to FCC rules, full power television stations can obtain carriage of their signals by multichannel video program distributors in one of two ways: via mandatory carriage or via "retransmission consent." Once every three years each station must formally elect either mandatory carriage ("must-carry") or retransmission consent. The current elections were effective January 1, 2012 and extend through December 31, 2014. A mandatory carriage election invokes FCC rules that require the distributor to carry a single program stream designated by the station and that program stream's related data in the station's local market. Distributors may decline carriage for certain reasons specified in the rules, including a lack of channel capacity, the station's failure to deliver a good quality signal, the presence of a nearby affiliate of the same network or, in the case of satellite distributors, if the distributor does not carry any other local broadcast station in the electing station's market. Distributors do not pay a fee to stations that elect mandatory carriage.

        A station that elects retransmission consent waives its mandatory carriage rights, and the station and the distributor must negotiate in good faith for carriage of the station's signal. Negotiated terms may include channel position, service tier carriage, carriage of multiple program streams, compensation and other consideration. If a station elects to negotiate retransmission terms, it is possible that the station and the distributor will not reach agreement and that the distributor will not carry the station's signal.

        FCC rules govern which local television signals a satellite subscriber may receive. Congress has also imposed certain requirements relating to satellite distribution of local television signals to "unserved" households that do not receive a useable signal from a local network-affiliated station or that reside in a market without a local affiliate of the pertinent network. The Satellite Television Extension and Localism Act of 2010 ("STELA") updated the blanket license scheme previously enacted under the Satellite Home Viewer Extension and Reauthorization Act of 2004 ("SHVERA") by, among other things, extending for five years, until December 31, 2014, statutory licenses that allow satellite television companies to retransmit broadcast signals from distant markets to eligible customers. A satellite provider also is permitted to import the signal of an out-of-market station, with that station's consent, to the specific counties and communities within a local market in which the out-of-market station is deemed to be "significantly viewed," subject to certain conditions. Such carriage previously was governed by the distant signal provisions. Under STELA, it is now treated as a retransmission into the station's local market, which means that the statutory copyright for such carriage will not sunset at the end of 2014. STELA also eliminated the requirement that DBS operators carry the local affiliate of a particular network before they could import an out-of-market station deemed to be significantly viewed in a given county or community. At this time, we are monitoring developments in this area but cannot determine whether this new legislation will result in significant changes to the satellite distribution scheme or whether or how any of the other changes in STELA will impact our broadcast business.

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        Several cable system and DBS operators have jointly petitioned the FCC to initiate a rulemaking proceeding to consider amending its retransmission consent rules. The FCC solicited public comment on the petition and subsequently released a notice of proposed rule making in 2011 seeking public comment on whether it should amend its rules to (i) modify its standards for "good faith" negotiations of retransmission consent agreements, (ii) enhance consumer notice obligations; and (iii) eliminate the FCC's network non-duplication and syndicated exclusivity rules. The proceeding is currently pending, and we cannot predict its outcome.

        Programming and Station Operations.    The Communications Act requires broadcasters to serve the public interest. Broadcast station licensees are required to present programming that is responsive to community problems, needs and interests and to maintain records demonstrating such responsiveness. Stations must follow various rules that regulate, among other things, children's television programming and advertising, political advertising, sponsorship identification, closed captioning, and contest and lottery advertising. The FCC has also adopted requirements to require stations affiliated with certain networks and serving the nation's largest television markets to provide aural descriptions of video content for the benefit of visually impaired viewers. The FCC has proposed to re-establish a number of formalized procedures that it believes will improve television broadcasters' service to their local communities. These proposals include the establishment of community advisory boards, quantitative programming guidelines and maintenance of a main studio in a station's community of license. If the FCC adopts such proposals, the burden of complying with such requirements could impose additional costs on our stations.

        The FCC is also charged with enforcing restrictions or prohibitions on the broadcast of obscene and indecent programs. In 2007, Congress increased the maximum monetary penalty for carriage of indecent programming tenfold to $325,000 per station per violation with a cap of $3 million for any "single act," and put the licenses of repeat offenders in jeopardy. At approximately the same time, the FCC increased its broadcast indecency enforcement activity and issued large fines against radio and television stations found to have carried indecent programming (even if originated by a third-party program supplier, such as a network). In 2010, the U.S. Court of Appeals for the Second Circuit found that the FCC's enforcement policy for broadcast indecency was unconstitutionally vague. The FCC successfully petitioned the United States Supreme Court to grant certiorari, and the Second Circuit's decision is currently under review. The Supreme Court is expected to issue a decision is expected in 2012; however, we are unable to predict the outcome of the Supreme Court's review and whether future enforcement of the indecency regulations will have a material adverse effect on our ability to provide competitive programming.

        Recent Regulatory Developments, Proposed Legislation and Regulation.    Congress and the FCC currently have under consideration, and may in the future adopt, new laws, regulations and policies regarding a wide variety of matters that could affect, directly or indirectly, the operation and ownership of our stations. The foregoing discussion summarizes the federal statutes and regulations material to our operations, but does not purport to be a complete summary of all the provisions of the Communications Act or of other current or proposed statutes, regulations, and policies affecting our business. The summaries should be read in conjunction with the text of the statutes, rules, regulations, orders, and decisions described herein. We are unable at this time to predict the outcome of any of the pending FCC rule-making proceedings referenced above, the outcome of any reconsideration or appellate proceedings concerning any changes in FCC rules or policies noted above, the possible outcome of any proposed or pending Congressional legislation, or the impact of any of those changes on our stations.

Employees

        As of December 31, 2011, we employed 1,921 full time employees, 212 of which were represented by labor unions. We believe that our relations with our employees are satisfactory.

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Available Information

        We file annual, quarterly, and current reports, proxy statements, and other documents with the Securities and Exchange Commission ("SEC") under the Securities Exchange Act of 1934 (the "Exchange Act"). The public may read and copy any materials that we file with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Also, the SEC maintains an Internet web site that contains reports, proxy and information statements, and other information regarding issuers, including our filings, which we file electronically with the SEC. The public can obtain any documents that we file with the SEC at http://www.sec.gov.

        We make available free-of-charge through our Internet web site (at http://www.linmedia.com) copies of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and, if applicable, amendments to those reports filed or furnished pursuant to Section 13(a) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish such material to, the SEC. We will also provide a physical copy of our Annual Report on Form 10-K free of charge upon the written request of any shareholder.

        We also make available on our web site our corporate governance guidelines, the charters for our audit committee, compensation committee, and nominating and corporate governance committee, our code of business conduct and ethics, and our code of ethics for senior financial officers. This information is available on our web site to any stockholder who is interested in reviewing this information. In addition, we intend to disclose on our web site any amendments to, or waivers from, our code of business conduct and ethics that are required to be publicly disclosed pursuant to rules of the SEC and the NYSE.

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Item 1A.    Risk Factors

Risks Associated with Our Business Activities

Our operating results are primarily dependent on advertising revenues, which can vary substantially from period-to-period based on many factors beyond our control, including economic downturns and viewer preferences.

        Our operations and performance are dependent on advertising revenues, which can be materially affected by a number of factors beyond our control, including economic conditions and viewer preferences. Volatility in advertising revenue impacts our financial condition, cash flows and results of operations. Decreases in advertising revenues caused by economic conditions could have a material adverse effect on our financial condition, cash flows and results of operations, which could impair our ability to comply with the covenants in our debt instruments, as more fully described below.

        In addition to economic conditions, our ability to generate advertising revenues depends on factors such as:

•

the relative popularity of the programming on our stations;



•

the demographic characteristics of our markets; and



•

the activities of our competitors.

        Our programming may not attract sufficient targeted viewership or we may not achieve favorable ratings. Our ratings depend partly upon unpredictable and volatile factors beyond our control, such as viewer preferences, competing programming and the availability of other entertainment activities. A shift in viewer preferences could cause our programming not to gain popularity or to decline in popularity, which could cause our advertising revenues to decline. We, and those on whom we rely for programming, may not be able to anticipate and react effectively to shifts in viewer tastes and interests of our local markets. In addition, political advertising revenue from elections and advertising revenues from Olympic Games, which generally occur in even-numbered years, create large fluctuations in our operating results on a year-to-year basis. For example, during 2011, we had political advertising revenues of $8.1 million, compared to $41.6 million in the prior year.

We depend on automotive advertising to a significant degree.

        Approximately 24%, 23% and 19% of our local and national advertising revenues for the years ended December 31, 2011, 2010, and 2009, respectively, consisted of automotive advertising. A significant decrease in these revenues in the future could have a material adverse effect on our results of operations and cash flows, which could affect our ability to fund operations and service our debt obligations and affect the value of our common stock.

The GECC Note could result in significant liabilities, including (i) requiring us to make short-term cash payments to the NBCUniversal joint venture to fund interest payments and (ii) potentially giving rise to the acceleration of our existing indebtedness, which would cause such existing indebtedness to become immediately due and payable.

        We may be required, or elect, to make cash payments to the joint venture to fund interest payments on the GECC Note. Our joint venture with NBCUniversal has been adversely impacted by the recent economic downturn. During the years ended December 31, 2011 and 2010, pursuant to the shortfall funding agreements with NBCUniversal and GE, we made shortfall loans in the aggregate principal amount of $2.5 million and $4.1 million, respectively, representing our approximate 20% share in debt service shortfalls at the joint venture.

        Because of anticipated future cash shortfalls at the joint venture, on March 5, 2012, we and GE entered into the 2012 Shortfall Funding Agreement covering the period from April 2, 2012 through April 1, 2013. Under the terms of the 2012 Shortfall Funding Agreement, we agreed that if the joint

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venture does not have sufficient cash to fund interest payments on the GECC Note through April 1, 2013, we and GE would each provide the joint venture with a shortfall loan. Any shortfall loans funded by us under the 2012 Shortfall Funding Agreement will be calculated on the basis of our percentage of economic interest in the joint venture, and GE's share of shortfall loans will be calculated on the basis of NBCUniversal's percentage of economic interest in the joint venture. GE's obligation to fund shortfall loans under the 2012 Shortfall Funding Agreement is conditioned upon the receipt of the consent of Comcast Corporation to the terms and conditions on which GE provides its proportionate share of any shortfall; provided that Comcast's consent may not be unreasonably withheld. NBCUniversal acknowledged and agreed to the terms of the 2012 Shortfall Funding Agreement.

        Under the terms of the joint venture's TV Master Service Agreement with NBCUniversal, management fees owed by the joint venture to NBCUniversal will continue to accrue, but are not payable if any existing joint venture shortfall loans remain outstanding.

        We recognize shortfall funding liabilities to the joint venture on our consolidated balance sheets when those liabilities become both probable and estimable. These liabilities become probable and estimable when joint venture management provides us with budget or forecast information of operating cash flows and working capital needs indicating that a debt service shortfall is probable to occur, and for periods beyond joint venture management's forecast, we develop our own internal estimates of debt service shortfalls. Additionally, we accrue shortfall funding liabilities only when we have reached or intend to reach a shortfall funding agreement covering the period for which we estimate debt service shortfalls to occur. As further described in Note 15—"Commitments and Contingencies" to our consolidated financial statements, we estimate our approximate 20% share of debt service shortfalls to be $4.1 million for 2012 and into 2013. We believe that cash shortfalls beyond the amounts currently accrued are not probable. However, our prospective shortfall obligations could vary from our estimate based upon changes in the performance of the joint venture stations and any changes to the proportionate share of each party's debt service shortfall.

        Our ability to honor our shortfall loan obligations under the 2012 Shortfall Funding Agreement is limited by certain covenants contained in our senior secured credit facility and the indentures governing our Senior Notes. Based on our 2012 and 2013 estimate of debt service shortfalls at the joint venture, and our forecast of total leverage and consolidated earnings before interest expense, taxes, depreciation and amortization ("EBITDA") during 2012 and into 2013, we expect to have the capacity within these restrictions to provide funding to the joint venture for the $4.1 million accrued shortfall liability.

        As of December 31, 2011, we had availability under applicable debt covenants to fund future shortfall loans as follows: (i) approximately $48.9 million of availability under our senior secured credit facility; and (ii) approximately $147.5 million of availability under the indenture governing our Senior Notes.

        The possibility exists that debt service shortfalls at the joint venture could exceed current expectations, including the possibility that neither GE nor Comcast will continue to fund a share of such debt service shortfall loans after April 1, 2013. Should circumstances arise in which we desire to make shortfall loans to the joint venture in excess of the limitations imposed by the covenants contained in our senior secured credit facility or the indenture, we could seek an amendment or waiver of such limitations, but there is no assurance that we would be able to obtain such amendment or waiver on a timely basis, or at all, or on terms satisfactory to us. If we are unable to make shortfall payments, the joint venture may be unable to fund interest obligations under the GECC Note, resulting in an event of default.

        An event of default under the GECC Note would occur if the joint venture fails to make any scheduled interest payment within 90 days of the date due, or fails to pay the principal amount on the maturity date in 2023. If an event of default occurs, GECC could accelerate the maturity of the entire amount due under the GECC Note. Other than the acceleration of the principal amount upon an event of default, prepayment of the principal of the note is prohibited unless agreed upon by both NBCUniversal and LIN TV. Upon an event of default under the GECC Note, GECC's only recourse would be to the joint

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venture, our equity interest in the joint venture and, after exhausting all remedies against the assets of the joint venture and the other equity interests in the joint venture, to LIN TV pursuant to its guarantee of the full amount of the GECC Note.

        Under the terms of its guarantee of the GECC Note, LIN TV would be required to make a payment for an amount to be determined upon occurrence of the following events: (i) there is an event of default; (ii) the default is not remedied; and (iii) after GECC exhausts all remedies against the assets of the joint venture, the total amount realized upon exercise of those remedies is less than the $815.5 million principal amount of the GECC Note. Upon the occurrence of such events, the amount owed by LIN TV to GECC pursuant to the guarantee would be equal to the difference between (i) the total amount at which the joint venture's assets were sold and (ii) the principal amount and any unpaid interest due under the GECC Note. As of December 31, 2011, we estimate the fair value of the television stations in the joint venture to be approximately $118 million less than the outstanding balance of the GECC Note of $815.5 million.

        If an event of default occurs under the GECC Note, LIN TV, which conducts all of its operations through its subsidiaries, could experience material adverse consequences, including:

•

GECC, after exhausting all remedies against the joint venture, could enforce its rights under the guarantee, which could cause LIN TV to determine that LIN Television should seek to sell material assets owned by it in order to satisfy LIN TV's obligations under the guarantee;



•

GECC's initiation of proceedings against LIN TV under the guarantee could result in a change of control or other material adverse consequences to LIN Television, which could cause an acceleration of LIN Television's senior secured credit facility and other outstanding indebtedness; and



•

if the GECC Note is prepaid because of an acceleration on default or otherwise, or if LIN TV is released from its obligation, LIN TV would realize a substantial tax gain of approximately $815.5 million related to its deferred gain associated with the formation of the joint venture. This amount of gain, exclusive of any potential utilization of net operating loss carryforwards, would be subject to U.S. Federal and various State tax rates of 35% and approximately 1% (net of Federal benefit), respectively.

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

        As of December 31, 2011, we had approximately $595.5 million of consolidated net debt, which is equal to the difference between total debt and the sum of unrestricted and restricted cash, and $84.6 million of total LIN TV stockholders' deficit. The outstanding revolving credit loans, term loans and incremental term loans under our senior secured credit facility, which were $16 million, $125 million and $260 million, respectively, as of March 15, 2012, are due October 26, 2016, October 26, 2017 and December 21, 2018, respectively, and the outstanding Senior Notes are due on April 15, 2018. Subject to the limitations in our senior secured credit facility and the indenture governing our Senior Notes, we may incur additional material indebtedness in the future, and we may become more leveraged. Accordingly, we now have and will continue to have significant debt service obligations. We have also guaranteed the $815.5 million GECC Note as described above.

        Our large amount of indebtedness could, for example:

•

require us to use a substantial portion of our cash flow from operations to pay interest and principal on indebtedness and reduce the availability of our cash flow to fund working capital, capital expenditures, acquisitions and other general corporate activities;



•

require us to dispose of television stations or other assets at times or on terms that may be less advantageous than those we might otherwise be able to obtain;

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•

limit our ability to obtain additional financing in the future;



•

expose us to greater interest rate risk, because the interest rates on our senior secured credit facility vary; and



•

impair our ability to successfully withstand a sustained downturn in our business or the economy in general and place us at a disadvantage relative to our less leveraged competitors.

        The indentures governing our Senior Notes also contain change of control provisions which may require us to purchase all or a portion of our Senior Notes at a price equal to 101% of the principal amount of the notes, together with accrued and unpaid interest.

        Any of these consequences relating to such debt could have a material adverse effect on our business, liquidity and results of operations.

We could fail to comply with our financial covenants, which would adversely affect our financial condition.

        Our debt instruments require us to comply with financial covenants, including, among others, leverage ratios and interest coverage tests. These covenants restrict the manner in which we conduct our business and may impact our operating results. Weak results of operations due to reduced advertising revenues may make it harder for us to comply with such covenants. Our failure to comply with these covenants could result in events of default, which, if not cured or waived, would permit acceleration of our indebtedness under our debt agreements or under other instruments that contain cross-acceleration or cross-default provisions.

        Our debt instruments also contain certain other restrictions on our business and operations, including, for example, covenants that restrict our ability to dispose of assets, incur additional indebtedness, pay dividends, make investments, make acquisitions and engage in mergers or consolidations.

We may not be able to refinance all or a portion of our indebtedness or obtain additional financing on satisfactory terms.

        The outstanding revolving credit loans, term loans and incremental term loans under our senior secured credit facility are due October 26, 2016, October 26, 2017 and December 21, 2018, respectively, and the outstanding Senior Notes are due on April 15, 2018. If we do not refinance, redeem or discharge our Senior Notes on or prior to January 15, 2018, then, in such event, the maturity of the incremental term loan facility will be accelerated from December 21, 2018 to January 15, 2018. While we expect to refinance, redeem, or discharge all of the outstanding Senior Notes prior to January 15, 2018, we can provide no assurances that this will occur. Our inability to refinance our Senior Notes prior to January 15, 2018, and the resulting acceleration of the incremental term loans would have a material adverse effect on our business, liquidity and results of operations.

Economic conditions may have an adverse impact on our industry, business, results of operations or financial condition.

        Economic conditions have been challenging and the continuation or worsening of such conditions could further reduce consumer confidence and have an adverse effect on the fundamentals of our business, financial condition, cash flows and results of operations. Poor economic conditions could have a negative impact on our industry or the industry of those customers who advertise on our stations, including, among others, the automotive industry, which is a significant source of our advertising revenue. Additionally, financial institutions, capital providers, or other consumers may be adversely affected. Potential consequences of any economic decline, among others, include:

•

the financial condition of those companies that advertise on our stations may be adversely affected and could result in a significant decline in our advertising revenue;

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•

our ability to pursue the acquisition of attractive television and non-television assets may be limited if we are unable to obtain any necessary additional capital on favorable terms, if at all;



•

our ability to pursue the divestiture of certain television and non-television assets at attractive values may be limited;



•

our ability to refinance our existing debt on terms and at interest rates we find attractive, if at all, may be impaired;



•

impairment charges to our intangible assets and/or goodwill; and



•

our ability to make certain capital expenditures may be significantly impaired.

We have a material amount of intangible assets and we have recorded substantial impairments of these assets. Future write-downs of intangible assets would reduce net income or increase net loss, which could have a material adverse effect on our results of operations and the value of our class A common stock.

        Future impairment charges could have a significant adverse effect on our reported results of operations and stockholders' equity. Approximately $512.9 million, or 48%, of our total assets as of December 31, 2011 consisted of indefinite-lived intangible assets. Intangible assets principally include broadcast licenses and goodwill, which are required to be tested for impairment at least annually, with impairment being measured as the excess of the carrying value of the goodwill or the intangible asset over its fair value. In addition, goodwill and other intangible assets will be tested more often for impairment as circumstances warrant.

        During the year ended December 31, 2009, we recorded an impairment of our broadcast licenses of $36.8 million and an impairment of our goodwill of $2.7 million. We also recorded a $1.6 million impairment charge to a broadcast license recorded within discontinued operations for the year ended December 31, 2011.

        If we determine in a future period, as part of our testing for impairment of intangible assets and goodwill, that the carrying amount of our intangible assets exceeds the fair value of these assets, we may incur an impairment charge that could have a material adverse effect on our results of operations and the value of our class A common stock.

Our strategy has historically included growth through acquisitions, which could pose various risks and increase our leverage.

        We have pursued and intend to selectively continue to pursue strategic acquisitions, subject to market conditions, our liquidity, and the availability of attractive acquisition candidates, with the goal of improving our business. We may not be successful in identifying attractive acquisition targets nor have the financial capacity to complete future acquisitions. Acquisitions involve inherent risks, such as increasing leverage, debt service requirements, future performance-based purchase obligations and combining company cultures and facilities, which could have a material adverse effect on our operating results, particularly during the period immediately following any acquisition. We may not be able to successfully implement effective cost controls or increase revenues as a result of any acquisition. In addition, future acquisitions may result in our assumption of unexpected liabilities and may result in the diversion of management's attention from the operation of our core business.

        Certain acquisitions, such as television stations, are subject to the approval of the FCC and, potentially, other regulatory authorities. The need for FCC and other regulatory approvals could restrict our ability to consummate future transactions and potentially require us to divest some television stations if the FCC believes that a proposed acquisition would result in excessive concentration in a market, even if the proposed combinations may otherwise comply with FCC ownership limitations.

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HMC and its affiliates, whose interests may differ from your interests, have approval rights with respect to significant transactions and could convert their equity interests in our Company into a block of substantial voting power, thereby reducing the voting power of our other stockholders.

        HMC and its affiliates own one share of our class C common stock, which represents 35% of our outstanding voting power, and also have the ability to convert shares of our non-voting class B common stock into class A common stock, which may be subject to FCC approval. Upon the conversion of the majority of the non-voting class B common stock into class A common stock, the class C common stock will automatically convert into an equal number of shares of class A common stock. If this occurs, affiliates of HMC would own approximately 41.5% of our voting equity interests and will effectively have the ability to elect the entire board of directors and to approve or disapprove any corporate transaction or other matters submitted to our stockholders for approval, including the approval of mergers or other significant corporate transactions. The interests of HMC and its affiliates may differ from the interests of our other stockholders and HMC and its affiliates could take actions or make decisions that are not in the best interests of our other stockholders.

        For example, HMC may from time-to-time acquire and hold controlling or non-controlling interests in television broadcast assets that may directly or indirectly compete with our company for advertising revenues. In addition, HMC and its affiliates may from time-to-time identify, pursue and consummate acquisitions of television stations or other broadcast related businesses that may be complementary to our business and therefore such acquisition opportunities may not be available to us.

        Moreover, Royal W. Carson, III, a director, and HMC, combined beneficially own all of our class C common stock and therefore possess 70% of the combined voting power. Accordingly, Mr. Carson and HMC together have the power to elect our entire board of directors and, through this control, to approve or disapprove any corporate transaction or other matter submitted to our stockholders for approval, including the approval of mergers or other significant corporate transactions. Mr. Carson has prior business relations with HMC. Mr. Carson is the President of Carson Private Capital Incorporated, an investment firm that sponsors funds-of-funds and dedicated funds that have invested substantially all of the net capital of these funds in private equity investment funds sponsored by firms like HMC or its affiliates. Mr. Carson also serves on an advisory board representing the interests of limited partners of Hicks, Muse, Tate & Furst Equity Fund V, L.P.; Sector Performance Fund, L.P.; and Hicks, Muse, Tate & Furst Europe Fund L.P., which are sponsored by HMC. The three listed funds do not have an investment in us.

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

        The entertainment industry, and particularly the television industry, is highly competitive and is undergoing a period of consolidation and significant change. Many of our current and potential competitors have greater financial, marketing, programming and broadcasting resources than we do. Technological innovation and the resulting proliferation of television entertainment alternatives, such as cable, satellite television and telecommunications video services, Internet, wireless, pay-per-view and video-on-demand, digital video recorders, DVDs and mobile video devices have fragmented television viewing audiences and have subjected free over-the-air television broadcast stations to new types of competition. As a result, we are experiencing increased competition for viewing audience and advertisers. Significant declines in viewership and advertising revenues could materially and adversely affect our business, financial condition and results of operations.

New technologies may affect our broadcasting operations.

        The television broadcasting business is subject to rapid technological change, evolving industry standards, and the emergence of new technologies. We cannot predict the effect such technologies will have on our broadcast operations. In addition, the capital expenditures necessary to implement these new

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technologies could be substantial and other companies employing such technologies before we are able to do so could aggressively compete with our business.

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

        Affiliates of HMC effectively have the ability to determine whether a change of control will occur through their ownership of one of the two outstanding shares of our class C common stock and all of the shares of our class B common stock. Provisions of Delaware corporate law and our bylaws and certificate of incorporation, including the 70% voting power of our class C common stock held by affiliates of Mr. Carson and HMC and the voting power that affiliates of HMC would hold upon conversion of their shares of class B stock into class A stock or class C stock, make it difficult for a third party to acquire control of us, even if a change of control would benefit the holders of our class A common stock. These provisions and controlling ownership by affiliates of HMC could also adversely affect the public trading price of our class A common stock.

The loss of network affiliation agreements or changes in network affiliations could have a material and adverse effect on our results of operations if we are unable to quickly replace the network affiliation.

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

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

        A change in network affiliation in a given television market may have many short-term and long-term consequences, depending upon the circumstances surrounding the change. Potential short-term consequences include: (i) increased marketing costs and increased internal operating costs, which can vary widely depending on the amount of marketing required to educate the audience regarding the change and to maintain the station's viewing audience; (ii) short term loss of market share or slower market growth due to advertiser uncertainty about the switch; (iii) costs of building a new or larger news operation; (iv) other increases in station programming costs, if necessary; and (v) the cost of equipment needed to conform the station's programming, equipment and logos to the new network affiliation. Long-term consequences are more difficult to assess, due to the cyclical nature of each of the major network's share of the audience that changes from year-to-year with programs coming to the end of their production cycle, and the audience acceptance of new programs in the future and the fact that national network audience ratings are not necessarily indicative of how a network's programming is accepted in an individual market. How well a particular network fares in an affiliation switch depends largely on the value of the broadcast license, which is influenced by the length of time the television station has been broadcasting, the quality and location of the license, the audience acceptance of the local news programming and community

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involvement of the local television station and the quality of the station non-network programming. In addition, the majority of the revenue earned by television stations is attributable to locally produced news and syndicated programming, rather than to network affiliation payments and advertising sales related to network programming. The circumstances that may surround a network affiliation switch cause uncertainty as to the actual costs that will be incurred by us and, if these costs are significant, the switch could have a material adverse impact on the income we derive from the affected station.

Changes by the national broadcast television networks in their respective business models and practices could adversely affect our business, financial condition and results of operations.

        In recent years, the national broadcast networks have streamed their programming on the Internet and other distribution platforms in close proximity to network programming broadcast on local television stations, including those we own. These and other practices by the networks dilute the exclusivity and value of network programming originally broadcast by the local stations and could adversely affect the business, financial conditions and results of operations of our stations.

We depend on key personnel, and we may not be able to operate and grow our businesses effectively if we lose the services of our management or are unable to attract and retain qualified personnel in the future.

        We depend on the efforts of our management and other key employees. The success of our business depends heavily on our ability to develop and retain management and to attract and retain qualified personnel in the future. Competition for senior management personnel is intense and we may not be able to retain our key personnel. If we are unable to do so, our business, financial condition or results of operations may be adversely affected.

Risks Related to Our Industry

The FCC's National Broadband Plan could result in the reallocation of broadcast spectrum for wireless broadband use, which could materially impair our ability to provide competitive services.

        Pursuant to The American Recovery and Reinvestment Act of 2009, on March 16, 2010, the FCC delivered to Congress a staff report titled, "Connecting America: The National Broadband Plan" (the "NBP"). Among the many far-reaching recommendations contained in the 375-page NBP is that the FCC reallocate 120 MHz of spectrum currently occupied by television broadcast stations to mobile wireless broadband services by means of, among other things, amending the FCC's technical rules to reduce television station service areas and distance separations, permitting channel sharing, conducting voluntary "incentive" auctions for the return of television broadcast spectrum, and certain other voluntary and involuntary mechanisms. The NBP also recommended spectrum "repacking," pursuant to which certain stations would be required to move to new channels, and suggested the imposition of spectrum usage fees, which may require Congressional authorization. None of the NBP's recommendations related to television spectrum are self-effectuating; consequently, implementation of the recommendations would appear to require further action by the FCC or Congress, or both.

        On November 30, 2010, the FCC initiated a rulemaking proceeding to consider proposals to, among other things, implement rule changes that could facilitate channel sharing by television stations and shared use of current television broadcast spectrum by wireless broadband providers. In that proceeding, the FCC also sought comment on ways to improve VHF spectrum band television operations (VHF stations have experienced reception difficulties following the DTV transition), to encourage stations on UHF channels to move to VHF channels. This proceeding remains pending, and we cannot predict its outcome or its impact on the industry or our operations.

        On February 17, 2012, Congress adopted legislation authorizing the FCC to direct a portion of auction proceeds to commercial users, including broadcasters, that voluntarily surrender some or all of their allotted spectrum for auction. The legislation, which the President subsequently signed into law, includes

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safeguards for broadcasters. In particular, the legislation requires the FCC to make all reasonable efforts to ensure that stations retain their existing coverage areas, prevents the FCC from forcing a broadcaster to move from a UHF to a VHF channel, and establishes a fund to reimburse broadcasters for reasonable relocation expenses arising from repacking the television bands. If the FCC requires some or all of our television stations to make involuntary changes to their operations, such as through frequency changes, reductions of service areas, and/or reductions of interference protection, our stations could suffer material adverse effects, including, but not limited to, substantial conversion costs, and reduction or loss of over-the-air signal coverage. We cannot predict the outcome of any FCC proceedings, including but not limited to the procedures for, or timing of, voluntary auctions and/or involuntary spectrum repacking.

We may be unable to successfully negotiate future retransmission consent agreements and these negotiations may be further hindered by the interests of networks with whom we are affiliated or by statutory or regulatory developments.

        We may be unable to successfully renegotiate retransmission consent agreements with MVPDs when the current terms of these agreements expire. In addition, our affiliation agreements with some broadcast networks include certain terms that may affect our ability to permit MVPDs to retransmit our stations' signals containing network programming, and in some cases, we may lose the right to grant retransmission consent to such providers. If the broadcast networks withhold their consent to the retransmission of those portions of our stations' signals containing network programming we may be unable to successfully complete negotiations for new retransmission consent agreements. Some networks require us to pay them compensation in exchange for permitting redistribution of network programming by MVPDs. Escalating payments to networks in connection with signal retransmission, may adversely affect our operating results. If we lose the right to grant retransmission consent, we may be unable to satisfy certain obligations under our existing retransmission consent agreements with MVPDs and there could be a material adverse effect on our results of operations.

        Several cable system and DBS operators jointly petitioned the FCC to initiate a rulemaking proceeding to consider amending its retransmission consent rules. The FCC solicited public comment on the petition and subsequently released a notice of proposed rule making seeking public comment on whether it should amend its rules to: (i) modify its standards for "good faith" negotiations of retransmission consent agreements; (ii) enhance consumer notice obligations; and (iii) eliminate the FCC's network non-duplication and syndicated exclusivity rules. The proceeding is currently pending, and we cannot predict its outcome.

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

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

Federal regulation of the broadcasting industry limits our operating flexibility, which may affect our ability to generate revenue or reduce our costs.

        The FCC regulates our business, just as it does all other companies in the broadcasting industry. We must ask the FCC's approval whenever we need a new license, seek to renew, assign or modify a license, purchase a new station, sell an existing station or transfer the control of one of our subsidiaries that holds a license. Our FCC licenses, those of the stations that we service via SSAs, and those of the stations we program pursuant to LMAs are critical to our operations; we cannot operate without them. We cannot be certain that the FCC will renew these licenses in the future or approve new acquisitions in a timely

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manner, if at all. If licenses are not renewed or acquisitions approved, we may lose revenue that we otherwise could have earned.

        In addition, Congress and the FCC may, in the future, adopt new laws, regulations and policies regarding a wide variety of matters (including retransmission consent, spectrum allocation, media ownership and technological changes) that could, directly or indirectly, materially and adversely affect the operation and ownership of our broadcast properties. (See "Federal Regulation of Television Broadcasting" in Item 1. Business).

Changes in FCC ownership rules through FCC action, judicial review or federal legislation may limit our ability to continue providing services to stations under LMAs, SSAs or similar agreements, may prevent us from obtaining ownership of the stations we currently provide services to under LMAs, SSAs or similar agreements, may require us to amend or terminate certain agreements and/or may preclude us from obtaining the full economic value of one or more of our duopoly, or two-station operations upon a sale, merger or other similar transaction transferring ownership of such station or stations.

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

        Should the FCC liberalize media ownership rules, attractive opportunities may arise for additional television station and other media acquisitions. But these changes also create additional competition for us from other entities, such as national broadcast networks, large station groups, newspaper chains and cable operators, which may be better positioned to take advantage of such changes and benefit from the resulting operating synergies both nationally and in specific markets.

        Should the television duopoly rule be relaxed, we may be able to acquire the ownership of one or more of the stations in Austin, TX, Dayton, OH and Providence, RI for which we currently provide programming, sales and/or other related services under LMAs, SSAs or other similar agreements, as the case may be, and for which we have purchase option agreements to purchase these stations.

        Should we be unable to acquire the ownership of the stations currently serviced by LMAs, SSAs or similar agreements, there is no assurance that the grandfathering of our LMAs, SSAs or other similar agreements will be permitted beyond conclusion of the FCC's current review of the ownership rules.

        Should the FCC conclude, as part of its current review of its ownership rules, that SSAs and similar arrangements should be attributable for purposes of the media ownership rules, there is no assurance that the FCC would grandfather the non-attributable status of our existing SSAs, and, as a result, we may be required to terminate these agreements.

Any potential hostilities, natural disasters, cybersecurity threats, breaches of information technology security, terrorist attacks or other disruptions may affect our revenues and results of operations.

        If the U.S. becomes engaged in new, large scale foreign hostilities, is impacted by any significant natural disasters or if there is a terrorist attack against the U.S., we may lose advertising revenue and incur increased broadcasting expenses due to pre-emption, delay or cancellation of advertising campaigns and increased costs of providing news coverage of such events. In light of the increased dependence on digital

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technologies by public companies and the increasing frequency and severity of cyber incidents, we may be subject to cybersecurity risks or other breaches of information technology security. A breach of our cyber/data security measures could disrupt our normal business operations and affect our ability to control our assets, access information and limit communication with third parties. We cannot predict the extent and duration of any future disruption to our programming schedule, the amount of advertising revenue that would be lost or delayed or the amount by which our expenses would increase as a result. Consequently, any related future loss of revenue and increased expenses could negatively affect our results of operations.

Item 1B.    Unresolved Staff Comments

        None.

Item 2.    Properties

        We maintain our corporate headquarters in Providence, RI under an operating lease that expires on March 31, 2015.

        Each of our stations has facilities consisting of offices, studios, sales offices and tower and transmitter sites. Tower and transmitter sites are located in areas that provide optimal coverage to each of our markets. We own substantially all of the offices and studios where our stations are located and generally own the property where our towers and primary transmitters are located. We lease the remaining properties, consisting primarily of sales office locations and microwave transmitter sites. While none of the station properties owned or leased by us are individually material to our operations, if we were required to relocate any of our towers, the cost could be significant. This is because the number of sites in any geographic area that permit a tower of reasonable height to provide good coverage of the market is limited, and zoning and other land use restrictions, as well as Federal Aviation Administration and FCC regulations, limit the number of alternative locations or increase the cost of acquiring them for tower sites.

Item 3.    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. The outcome of any current or future litigation cannot be accurately predicted. We record accruals for such contingencies to the extent that we conclude it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. No estimate of the possible loss or range of loss can be made at this time because the inherently unpredictable nature of legal proceedings may be exacerbated by various factors, including: (i) the damages sought in the proceedings are unsubstantiated or indeterminate; (ii) discovery is not complete; (iii) the proceeding is in its early stages; (iv) the matters present legal uncertainties; (v) there are significant facts in dispute; or (vi) there is a wide range of potential outcomes. Although the outcome of these and other legal proceedings cannot be predicted, we believe that their ultimate resolution will not have a material adverse effect on us.

Item 4.    Mine Safety Disclosures

        Not applicable.

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PART II

        

Item 5.    Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

        Our class A common stock is listed on the NYSE under the symbol "TVL". There is no established trading market for our class B common stock or our class C common stock.

        The following table sets forth the high and low sales prices for our class A common stock for the periods indicated, as reported by the NYSE:

        We have never declared or paid any cash dividends on our class A common stock and the terms of our indebtedness limit the payment of such dividends.

        As of December 31, 2011, there were approximately 44 stockholders of record of our class A common stock, 16 stockholders of record of our class B common stock and two stockholders of record of our class C common stock.

        The common stock of our wholly-owned subsidiary, LIN Television Corporation, all of which is held directly by us, has not been registered under the Exchange Act and is not listed on any national securities exchange.

Issuers Purchase of Equity Securities

        On November 7, 2011, we publicly announced that our Board of Directors authorized us to repurchase up to $25 million of our class A common stock in the open market, in privately negotiated transactions or pursuant to a Rule 10b5-1 plan. This authorization expires on the earlier of the completion of all purchases contemplated by the plan or November 7, 2012.

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Comparative stock performance graph

        The following graph compares the cumulative total return performance of our class A common stock for the five years ended December 31, 2011 versus the performance of: (i) the NYSE Composite Index; and (ii) a peer index consisting of the following broadcast television companies: Gray Communications Systems, Inc.; Sinclair Broadcasting Group, Inc.; Belo Corporation; and Nexstar Broadcasting Group, Inc. (the "Television Index"). The graph assumes the investment of $100 in our class A common stock and in each of the indices on December 31, 2006. The performance shown is not necessarily indicative of future performance.

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Item 6.   Selected Financial Data

        Set forth below is our selected consolidated financial data for each of the five years in the period ended December 31, 2011. The selected financial data as of December 31, 2011 and 2010 and for the years ended December 31, 2011, 2010 and 2009 is derived from audited consolidated financial statements that appear elsewhere in this report. The selected financial data should be read in conjunction with Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our historical consolidated financial statements and the notes thereto. All financial information shown reflect the operations of WWHO-TV in Columbus, OH, WUPW-TV in Toledo, OH, the Banks Broadcasting joint venture and the Puerto Rico stations as discontinued for all periods presented. The sale of WWHO-TV was completed on February 16, 2012. The Banks Broadcasting joint venture station and Puerto Rico stations were sold in 2009 and 2007, respectively. The sale of WUPW-TV is subject to certain closing conditions, including the approval of the FCC, and is expected to close during 2012. Prior year amounts have been reclassified to conform to current year presentation.

        The selected consolidated financial data of LIN Television Corporation is identical to LIN TV Corp. with the exception of basic and diluted loss per common share, which is not presented for LIN Television Corporation.

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Item 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations

Executive Summary

        We operate or service 32 network-affiliates, television station web sites and mobile products in 15 U.S. markets, with multiple network-affiliates in 12 markets. Our operating revenues are primarily derived from the sale of advertising time to local, national and political advertisers. Additional, but less significant revenues are generated from our television station web sites, retransmission consent fees, interactive revenues and other revenues. We recorded net income of $48.8 million, $36.5 million and $9.1 million for the years ended December 31, 2011, 2010, and 2009, respectively.

        Our operating highlights for 2011 include the following:

•

Total net revenues decreased $8.2 million, or 2%, primarily as a result of a $33.5 million decrease in net political advertising sales, partially offset by a $17.7 million increase in local revenues, which includes net local advertising sales, retransmission consent fees and television station web site revenues, compared to the same period in the prior year. The decrease was also offset by a $10.8 million increase in interactive revenues, which includes advertising and media services revenues from our online advertising and media services business, RMM, and our digital advertising management and technology company, Nami Media.



•

Operating expenses increased approximately $14.5 million compared to 2010. The increase is primarily due to higher direct operating expenses tied to the growth in local revenues and interactive revenues compared to 2010.



•

We entered into a new senior secured credit facility, comprised of a six-year, $125 million term loan, a seven-year, $260 million incremental term loan, and a five-year, $75 million revolving credit facility, of which $16 million was drawn against such facility as of the date of this report. Concurrent with the closing of the new senior secured credit facility, we terminated the credit agreement governing our 2009 senior secured credit facility.



•

On November 25, 2011, we redeemed $109.1 million of our 6¹/2% Senior Subordinated Notes, and $55.9 million of our 6¹/2% Senior Subordinated Notes—Class B. The redemption of these notes, at par, was funded in part by proceeds from the term loan, the revolving credit facility and cash on hand.



•

On December 21, 2011, we issued notices to redeem all of the remaining 6¹/2% Senior Subordinated Notes and 6¹/2% Senior Subordinated Notes—Class B (collectively the "Senior Subordinated Notes") at par, plus accrued and unpaid interest through the redemption date. We used proceeds from the incremental term loan under the new senior secured credit facility as described above, and cash on hand to fund the aggregate redemption price. On December 21, 2011, we irrevocably deposited with the trustee the full amount of the redemption price of our Senior Subordinated Notes. As of December 31, 2011, the $255.2 million irrevocable deposit was classified as restricted cash in our consolidated balance sheets, and $251.0 million of our Senior Subordinated Notes, net of a discount of $1.2 million, remained outstanding. The redemption was completed on January 20, 2012, and as of that date, there were no Senior Subordinated Notes outstanding.



•

Pursuant to the shortfall funding agreements with NBCUniversal, we made shortfall loans in the aggregate principal amount of $2.5 million to our joint venture with NBCUniversal. We have a remaining shortfall funding accrual of $4.1 million as of December 31, 2011, which we expect to fund during 2012 and into 2013.



•

On November 22, 2011, we acquired a 57.6% interest in Nami Media, a digital advertising management and technology company. Nami Media serves the growing marketplace of online traffic quality management for CPC advertising. Our investment in Nami Media fills a niche in our

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growing suite of digital product offerings and furthers the goal to be advertisers' preferred choice for multiplatform marketing opportunities.

•

On May 20, 2011, we acquired the assets of WCWF-TV in Green Bay, WI and certain assets of WBDT-TV in Dayton, OH.



•

On October 21, 2011, we reached an agreement to sell WWHO-TV, in Columbus, OH, and we completed the sale on February 16, 2012.

Critical Accounting Policies, Estimates and Recently Issued Accounting Pronouncements

        Certain of our accounting policies, as well as estimates we make, are critical to the presentation of our financial condition and results of operations since they are particularly sensitive to our judgment. Some of these policies and estimates relate to matters that are inherently uncertain. The estimates and judgments we make affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent liabilities. On an on-going basis, we evaluate our estimates, including those used for allowance for doubtful accounts in receivables, valuation of goodwill and intangible assets, amortization and impairment of program rights and intangible assets, stock-based compensation and other long-term incentive compensation arrangements, pension costs, barter transactions, income taxes, employee medical insurance claims, useful lives of property and equipment, contingencies, including shortfall funding liabilities to our joint venture with NBCUniversal, litigation and net assets of businesses acquired. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, and it is possible that such differences could have a material impact on our consolidated financial statements.

        We believe the following critical accounting policies are those that are most important to the presentation of our consolidated financial statements, affect our more significant estimates and assumptions, and require the most subjective or complex judgments by management. We have discussed each of these critical accounting policies and related estimates with the Audit Committee of our Board of Directors. For additional information about these and other accounting policies, see Note 1—"Basis of Presentation and Summary of Significant Accounting Policies" to our consolidated financial statements included elsewhere in this report.

Valuation of long-lived assets and intangible assets

        Approximately $512.9 million, or 47.6%, of our total assets as of December 31, 2011 consisted of indefinite-lived intangible assets. Intangible assets principally include broadcast licenses and goodwill. If the fair value of these assets is less than the carrying value, we may be required to record an impairment charge.

        We test the impairment of our broadcast licenses annually or whenever events or changes in circumstances indicate that such assets might be impaired. The impairment test consists of a comparison of the fair value of broadcast licenses with their carrying amount on a station-by-station basis using a discounted cash flow valuation method, assuming a hypothetical startup scenario. The future value of our broadcast licenses could be significantly impaired by the loss of the corresponding network affiliation agreements. Accordingly, such an event could trigger an assessment of the carrying value of a broadcast license.

        We test the impairment of our goodwill annually or whenever events or changes in circumstances indicate that goodwill might be impaired. The first step of the goodwill impairment test compares the fair value of a station with its carrying amount, including goodwill. The fair value of a station is determined through the use of a discounted cash flow analysis. The valuation assumptions used in the discounted cash

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flow model reflect historical performance of the station and prevailing rates in the markets for broadcasters. If the fair value of the station exceeds its carrying amount, goodwill is not considered impaired. If the carrying amount of the station exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of goodwill with the carrying amount of that goodwill. The implied fair value of goodwill is determined by performing a hypothetical purchase price allocation, using the station's fair value (as determined in the first step described above) as the purchase price. If the carrying amount of goodwill exceeds the implied fair value, an impairment charge is recognized in an amount equal to that excess, but not more than the carrying value of the goodwill. An impairment assessment could be triggered by a significant reduction, or a forecast of such reductions, in operating results or cash flows at one or more of our television stations, a significant adverse change in the national or local advertising marketplaces in which our television stations operate, or by adverse changes to FCC ownership rules, among other factors.

        The assumptions used in the valuation testing have certain subjective components including anticipated future operating results and cash flows based on our own internal business plans as well as future expectations about general economic and local market conditions. The changes in the discount rate used for our broadcast licenses and goodwill reflected in the table below are primarily driven by changes in the average beta for the public equity of companies in the television and media sector and the average cost of capital in each of the periods. The changes in the market growth rates and operating profit margins for both our broadcast licenses and goodwill reflect changes in the outlook for advertising revenues in certain markets where our stations operate in each of the periods.

        We based the valuation of broadcast licenses on the following average industry-based assumptions:

        As of December 31, 2011, if we were to decrease the market revenue growth rate by 1% and 2%, it would result in an impairment charge of $0.7 million and $6.0 million, respectively. A 5% and 10% decrease in operating profit margins would result in an impairment charge of $7.3 million and $82.3 million, respectively. An increase of 1% and 2% in the discount rate would result in an impairment charge of $1.2 million and $7.0 million, respectively.

        The valuation of goodwill is based on the following assumptions, which take into account our internal projections and industry assumptions related to market revenue growth, operating cash flows and prevailing discount rates:

        As of December 31, 2011, if we were to decrease the market revenue growth by 1% and 2% of the projected growth rate, the enterprise value of our stations with goodwill would decrease by $63.9 million and $117.2 million, respectively. If we were to decrease the operating profit margins by 5% and 10% from

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the projected operating profit margins, the enterprise value of our stations with goodwill would decrease by $101.0 million and $200.8 million, respectively. If we were to increase the discount rate used in the valuation calculation by 1% and 2%, the enterprise value of our stations with goodwill would decrease by $74.4 million and $135.8 million, respectively.

Network affiliations

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

        We believe that the value of a television station is derived primarily from the attributes of its broadcast license. These attributes have a significant impact on the audience for network programming in a local television market compared to the national viewing patterns of the same network programming. These attributes and their impact on audiences can include:

•

the scarcity of broadcast licenses assigned by the FCC to a particular market determines how many television networks and other program sources are viewed in a particular market;



•

the length of time the broadcast license has been broadcasting. Television stations that have been broadcasting since the late 1940s are viewed more often than newer television stations;



•

the quality of the broadcast signal and location of the broadcast station within a market (i.e. the value of being licensed in the smallest city within a tri-city market has less value than being licensed in the largest city);



•

the audience acceptance of the local news programming and community involvement of the local television station. The local television station's news programming that attracts the largest audience in a market generally will provide a larger audience for its network programming; and



•

the quality of the other non-network programming carried by the television station. A local television station's syndicated programming that attracts the largest audience in a market generally will provide larger audience lead-ins to its network programming.

        A local television station can be the top-rated station in a market, regardless of the national ranking of its affiliated network, depending on the factors or attributes listed above. ABC, CBS, FOX and NBC, each have affiliations with local television stations that have the largest primetime audience in the local market in which the station operates regardless of the network's primetime rating.

        Some broadcasting companies believe that network affiliations are the most important component of the value of a station. These companies generally believe that television stations with network affiliations have the most successful local news programming and the network affiliation relationship enhances the audience for local syndicated programming. As a result, these broadcasting companies allocate a significant portion of the purchase price for any station that they may acquire to the network affiliation relationship.

        We generally have acquired broadcast licenses in markets with a number of commercial television stations equal to or less than the number of television networks seeking affiliates. The methodology we used in connection with the valuation of the stations acquired is based on our evaluation of the broadcast licenses and the characteristics of the markets in which they operated. We believed that in substantially all our markets we would be able to replace a network affiliation agreement with little or no economic loss to our television station. As a result of this assumption, we ascribed no incremental value to the incumbent network affiliation in substantially all our markets in which we operate beyond the cost of negotiating a new agreement with another network and the value of any terms that were more favorable or unfavorable than those generally prevailing in the market. Other broadcasting companies have valued network

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affiliations on the basis that it is the affiliation and not the other attributes of the station, including its broadcast license, which contributes to the operating performance of that station. As a result, we believe that these broadcasting companies include in their network affiliation valuation amounts related to attributes that we believe are more appropriately reflected in the value of the broadcast license or goodwill.

        In future acquisitions, the valuation of the broadcast licenses and network affiliations may differ from those attributable to our existing stations due to different facts and circumstances for each station and market being evaluated.

Valuation allowance for deferred tax assets

        We consider future taxable income and feasible tax planning strategies in assessing the need for establishing or removing a valuation allowance. We record or subsequently remove a valuation allowance to reflect our deferred tax assets to an amount that is more likely than not to be realized.

        In the event that our determination changes regarding the realization of all or part of our deferred tax assets in the future, an adjustment to the deferred tax asset is recorded to our consolidated statement of operations in the period in which such a determination is made.

Revenue recognition

        We recognize local, national and political advertising sales, net of agency commissions, during the period in which the advertisements or programs are aired on our television stations, and when payment is reasonably assured. Internet and mobile advertisement sales are recognized when the advertisement is displayed on our web sites or the web sites of our advertising network. We recognize retransmission consent fees in the period in which our service is delivered.

Stock-based compensation

        We estimate the fair value of stock option awards using a Black-Scholes valuation model. The Black-Scholes model requires us to make assumptions and judgments about the variables used in the calculation, including the option's expected term, the price volatility of the underlying stock and the number of stock option awards that are expected to be forfeited. The expected term represents the weighted-average period of time that options granted are expected to be outstanding giving consideration to vesting schedules and our historical exercise patterns. Expected volatility is based on historical trends for our class A common stock over the expected term, and prior to 2010, we used the historical trends of our class A common stock over the expected term, as well as a comparison to peer companies. Expected forfeitures are estimated using our historical experience. If future changes in estimates differ significantly from our current estimates, our future stock-based compensation expense and results of operations could be materially impacted.

Retirement plan

        We have historically provided a defined benefit retirement plan to our employees who did not receive matching contributions from our Company to their 401(k) Plan accounts. Our pension benefit obligations and related costs are calculated using actuarial concepts. Our defined benefit plan is a non-contributory plan under which we made contributions either to: a) traditional plan participants based on periodic actuarial valuations, which are expensed over the expected average remaining service lives of current employees; or b) cash balance plan participants based on 5% of each participant's eligible compensation. Effective April 1, 2009, this plan was frozen and we do not expect to make additional benefit accruals to this plan, however we continue to fund our existing vested obligations.

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        We contributed $5.4 million, $5.4 million and $0.6 million to our pension plan during the years ended December 31, 2011, 2010 and 2009, respectively. We anticipate contributing $7.5 million to our pension plan in 2012.

        Weighted-average assumptions used to estimate our pension benefit obligations and to determine our net periodic pension benefit cost are as follows:

        For the discount rate for the year ended December 31, 2011, we used a custom bond modeler that develops a hypothetical portfolio of high quality corporate bonds, rated AA- and above by Standard & Poor's, that could be purchased to settle the obligations of the plan. The yield on this hypothetical portfolio represents a reasonable rate to value our plan liability. Prior to 2011, we used the Citigroup Pension Discount Curve to aid in the selection of our discount rate, which we believe reflects the weighted rate of a theoretical high quality bond portfolio consistent with the duration of the cash flows related to our pension liability.

        We considered the current levels of expected returns on a risk-free investment, the historical levels of risk premium associated with each of our pension asset classes, the expected future returns for each of our pension asset classes and then weighted each asset class based on our pension plan asset allocation to derive an expected long-term return on pension plan assets. During the year ended December 31, 2011, our actual rate of return on plan assets was 4.04%.

        As a result of the plan freeze during 2009, we have no further service cost or amortization of prior service cost related to the plan. In addition, because the plan is now frozen and participants became inactive during 2009, the net losses related to the plan included in accumulated other comprehensive income are now amortized over the average remaining life expectancy of the inactive participants instead of the average remaining service period. We expect to record a pension expense of approximately $1.0 million in 2012. For every 0.25% change in the actual return compared to the expected long-term return on pension plan assets and for every 0.25% change in the actual discount rate compared to the discount rate assumption for 2012, our 2012 pension expense would change by $0.2 million and less than $0.1 million, respectively.

        Our investment objective is to achieve a consistent total rate-of-return that will equal or exceed our actuarial assumptions and to equal or exceed the benchmarks that we use for each of our pension plan asset classes. The following asset allocation is designed to create a diversified portfolio of pension plan assets that is consistent with our target asset allocation and risk policy:

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Recently issued accounting pronouncements

        In September 2011, there were revisions to the accounting standard for goodwill impairment tests. A company has the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The revisions are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted during 2011 if an entity's financial statements have not yet been issued. We will adopt this guidance effective January 1, 2012, and we do not expect it to have a material impact on our financial position or results of operations.

        In June 2011, there were revisions to the accounting standard for reporting comprehensive income. A company has the option to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The revisions are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, and should be applied retrospectively. We will adopt this guidance effective January 1, 2012, and we do not expect it to have a material impact on our financial position or results of operations.

        In October 2009, there were revisions to the accounting standard for revenue arrangements with multiple deliverables. The revisions address how to separate deliverables and how to measure and allocate arrangement consideration to one or more units of accounting. The revisions are effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. We adopted this guidance effective January 1, 2011, and the adoption did not have a material impact on our financial position or results of operations.

Results of Operations

        Set forth below are the key operating areas that contributed to our results for the years ended December 31, 2011, 2010 and 2009. Our consolidated financial statements reflect the operations of WWHO-TV, in Columbus, OH, WUPW-TV in Toledo, OH and the Banks Broadcasting joint venture station as discontinued for all periods presented. As a result, reported financial results may not be comparable to certain historical financial information.

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        Our results of operations are as follows (in thousands):

Three-Year Comparison

        Net revenues consist primarily of national, local and political advertising sales, net of sales adjustments and agency commissions. Additional revenues are generated from advertising on our television station web sites, retransmission consent fees, interactive revenues, barter revenues, network compensation, production revenues, tower rental income and station copyright royalties.

        Net revenues during the year ended December 31, 2011 decreased by $8.2 million when compared with the prior year. The decrease was primarily due to: (i) a $33.5 million decrease in political advertising sales; and (ii) a $3.2 million decrease in national advertising sales. These decreases were partially offset by: (i) a $17.7 million increase in local revenues; and (ii) a $10.8 million increase in interactive revenues.

        The decrease in political advertising sales during the year ended December 31, 2011, compared to the same period last year, was a result of the Congressional, state and local elections in 2010 that did not recur in 2011. The decrease in national advertising sales was in part due to continued fragmentation of advertising spending across different media platforms.

        The increase in local revenues was primarily due to growth in local advertising sales, growth in retransmission consent revenues, primarily as a result of contractual rate increases, and increased advertising on our television station web sites. The increase in interactive revenues for the year ended December 31, 2011, compared to the same period last year was a result of growth in Internet advertising revenues primarily from increased advertising sales from RMM.

        The automotive category, which represented 24% of our local and national advertising sales during the year ended December 31, 2011, was essentially flat, as compared to 2010, during which the automotive category represented 23% of our local and national advertising sales.

        Net revenues during the year ended December 31, 2010 increased by $80.3 million when compared with the prior year. The increase was primarily due to: (i) a $30.6 million increase in political advertising

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sales; (ii) a $19.6 million increase in local revenues; (iii) a $15.1 million increase in national advertising sales; (iv) a $13.7 million increase in interactive revenues; and (v) a $1.3 million increase in other revenues.

        The increase in political revenues during the year ended December 31, 2010, compared to the prior year, was primarily the result of Congressional, state and local elections which take place in even numbered years as well as growth in issue advertising compared to the prior year.

        The increase in local revenues and national advertising sales during 2010 was primarily due to economic recovery experienced during 2010 compared to the prior year, which resulted in increased advertising spending in our markets. The increase in local revenues was also due to increased traffic to our web sites, and growth in retransmission consent fees as a result of contractual rate increases in per subscriber fees and an increase in subscriber levels compared to 2009. The increase in interactive revenues for the year ended December 31, 2010, compared to the prior year, was due to incremental revenues from the acquisition of RMM in October 2009.

        Direct operating expenses (excluding depreciation and amortization of intangible assets), which consist primarily of news, engineering and programming expenses, increased $11.5 million, or 10%, for the year ended December 31, 2011, compared to the prior year, primarily due to higher cost of goods sold related to RMM, and an increase in fees pursuant to network affiliation agreements compared to the prior year.

        Direct operating expenses increased $14.6 million, or 14%, for the year ended December 31, 2010, compared to the prior year. The increase was primarily attributable to higher cost of goods sold associated with RMM and increases in variable direct costs attributable to the growth in revenue compared to the prior year.

        Selling, general and administrative expenses consist primarily of employee salaries, sales commissions, employee benefit costs, advertising, promotional expenses and research. These costs increased $1.7 million, or 2%, for the year ended December 31, 2011, compared to the prior year. The increase was primarily due to an increase in sales compensation as a result of growth in our interactive revenues. Additionally, the increase was due in part to a benefit from a litigation settlement that occurred during the year ended December 31, 2010 that did not recur during 2011.

        Selling, general and administrative expenses increased $6.3 million, or 7%, for the year ended December 31, 2010, compared to the prior year. The increase was primarily due to higher variable costs attributable to the growth in revenue compared to the prior year and higher employee benefits expense primarily associated with the reinstatement of contributions to the Company's 401(k) Plan starting in 2010.

        Selling expenses as a percentage of net revenues were 7.4%, 7.3% and 7.7% for the years ended December 31, 2011, 2010 and 2009, respectively.

        Amortization of program rights represents the recognition of expense associated with syndicated programming, features and specials, and these costs decreased $1.3 million, or 6%, for the year ended December 31, 2011 and decreased $1.0 million, or 4%, for the year ended December 31, 2010, compared to their respective prior years. The decrease in both periods was primarily attributable to a decrease in the cost of syndicated programming.

        Corporate expenses represent corporate executive management, accounting, legal and other costs associated with the centralized management of our stations, and these costs increased $2.5 million, or 11%, for the year ended December 31, 2011, compared to the prior year. The increase was primarily due to increases in legal and professional fees, and stock-based compensation.

        Corporate expenses increased $5.9 million, or 33%, for the year ended December 31, 2010, compared to the prior year. The increase was primarily due to increases in performance bonuses and stock-based compensation.

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        Depreciation expense decreased $0.8 million, or 3%, for the year ended December 31, 2011 and decreased $1.6 million, or 6%, for the year ended December 31, 2010, compared to their respective prior years. The decreases during 2011 and 2010 were due to assets that have been fully depreciated compared to the prior year.

        Amortization of intangible assets decreased $0.4 million, or 23%, for the year ended December 31, 2011, compared to the prior year. The decrease was due to certain intangible assets acquired in the RMM acquisition that have been fully amortized compared to the prior year.

        Amortization of intangible assets increased $0.9 million, or 145%, for the year ended December 31, 2010 compared to the prior year. The increase was a result of the amortization of intangible assets acquired in the RMM acquisition.

        Impairment of goodwill and broadcast licenses reflects non-cash impairment charges recorded during the year ended December 31, 2009, which includes an impairment to the carrying values of our broadcast licenses of $36.8 million and an impairment to the carrying values of our goodwill of $2.7 million as described further in Note 6—"Intangible Assets" to our consolidated financial statements. We also recorded a $1.6 million impairment charge related to discontinued operations during the year ended December 31, 2011.

        Restructuring charges of $0.7 million, $3.1 million and $0.5 million were recorded during the years ended December 31, 2011, 2010 and 2009, respectively, as a result of the consolidation of certain activities at our stations.

        Loss (gain) from asset dispositions for the year ended December 31, 2011 was $0.5 million and was primarily attributable to a loss on the disposal of fixed assets. Loss (gain) from asset dispositions for the years ended December 31, 2010 and 2009 was $(3.2) million and $(5.8) million, respectively. The gain in both periods was primarily attributable to a gain on the exchange of certain equipment with Sprint Nextel of $3.7 million and $5.9 million, respectively, both of which were partially offset by a loss on the disposal of fixed assets.

Other Expense (Income)

        Interest expense, net decreased $0.8 million, or 2%, for the year ended December 31, 2011, compared to the prior year primarily due to reductions in interest expense on borrowings under our 2009 senior secured credit facility as a result of a reduction of balances outstanding under the facility during the year. This decrease was partially offset by an increase in interest expense related to our Senior Notes. Interest expense, net increased $7.2 million, or 16%, for the year ended December 31, 2010, compared to the prior year primarily due to the impact of the issuance of our Senior Notes during the second quarter of 2010. These increases were partially offset by reductions in interest expense under our 2009 senior secured credit

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facility as a result of reduced balances outstanding under our facility during 2010. The following table summarizes our total interest expense, net (in thousands):

        Share of loss in equity investments was $5.0 million and $6.1 million for the years ended December 31, 2011 and 2009, respectively, and primarily reflects impairment charges relating to accrued loan obligations to our joint venture with NBCUniversal, pursuant to the shortfall funding agreements further described in Item 1. "Business—Joint Venture with NBCUniversal" and in Note 15—"Commitments and Contingencies" to our consolidated financial statements. Because of uncertainty surrounding the joint venture's ability to repay any shortfall loans, we recognized a charge of $4.7 million and $6.0 million to reflect the impairment of the shortfall loans during the years ended December 31, 2011 and 2009, respectively. Additionally, beginning in 2009, we no longer recognize our approximate 20% share of the joint venture's net loss because the investment was fully impaired during the year ended December 31, 2008; accordingly, we suspended recognition of equity method gains and losses.

        (Gain) loss on derivative instruments was $(2.0) million, $1.9 million and $(0.2) million for the years ended December 31, 2011, 2010 and 2009, respectively. During 2011, 2010 and 2009, our derivative instrument consisted of an interest rate hedge agreement entered into during the second quarter of 2006 (the "2006 interest rate hedge") to hedge the variability in cash flows associated with a notional amount of the declining balances of our term loans under our 2009 senior secured credit facility. The 2006 interest rate hedge effectively converted the floating rate LIBOR-based payments under this portion of the facility to fixed payments; however the hedge ceased to be highly effective during 2010 as a result of the $45.9 million repayment of principal on our terms loans, as described further in Note 8—"Derivative Financial Instruments" to our consolidated financial statements. Accordingly, the portion of the fair value recognized in accumulated other comprehensive loss, $3.6 million, was recorded as a charge to our consolidated statement of operations during the year ended December 31, 2010, and all changes in fair value have since been recorded in our consolidated statement of operations. The gains of $(2.0) million and $(0.2) million for the years ended December 31, 2011 and 2009, respectively, were due to fluctuations in market interest rates. The loss of $1.9 million for the year ended December 31, 2010 was due to fluctuations in market interest rates and the $3.6 million charge from accumulated other comprehensive income.

        Loss (gain) on extinguishment of debt was $1.7 million, $2.7 million and $(50.1) million for the years ended December 31, 2011, 2010 and 2009, respectively. The loss on extinguishment of debt during the years ended December 30, 2011 and 2010 was due to a write down of deferred financing fees as a result of the payment of principal on our revolving credit facility and term loans as further described in "Description of Indebtedness". Additionally, the loss on extinguishment of debt during the year ended December 31, 2011, includes a write-down of deferred financing fees and unamortized discount due to the redemption of $109.1 million of our 6¹/2% Senior Subordinated Notes, and $55.9 million of our 6¹/2% Senior Subordinated Notes—Class B as further described in "Liquidity and Capital Resources". The gain of $50.1 million recorded in 2009 was related to the purchase of a portion of our Senior Subordinated Notes during the year ended December 31, 2009.

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        Income taxes reflected a (benefit from) provision for income tax of $(16.0) million, $20.0 million and $13.9 million for the years ended December 31, 2011, 2010, and 2009, respectively.

        Our recorded (benefit from) income tax of $(16.0) million for the year ended December 31, 2011 represents an effective tax rate of (47.7)% compared to a provision for income tax of $20.0 million for the year ended December 31, 2010, which represents an effective tax rate of 35.7%. The decrease in the 2011 effective tax rate is primarily a result of the fourth quarter 2011 reversal of $35.1 million of our federal valuation allowance relating to 1999 to 2002 net operating losses, and the fourth quarter 2011 reversal of $1.0 million of our state valuation allowance relating to 2002 to 2010 net operating losses. These valuation allowances were reversed primarily due to our recent history of taxable income, and our projected ability to generate sufficient taxable income prior to the expiration of those net operating loss carryforwards. Upon the reversal of the federal and state valuation allowances, as of December 31, 2011, we had a remaining valuation allowance of $23.4 million placed against our deferred tax assets primarily related to state net operating loss carryforwards.

        The combined $36.1 million income tax benefit described above was offset in part by a $5.1 million discrete deferred income tax expense recognized in the second quarter of 2011, which resulted from state tax legislation enacted in Michigan in May 2011, which repealed the Michigan business tax ("MBT"), and implemented a corporate income tax instead, effective January 2012. As a result of the elimination of the MBT, certain future tax deductions that were available to be utilized beginning in 2015, and had been recognized as deferred tax assets in our financial statements, were no longer deductible. Therefore, during the year ended December 31, 2011, we recognized incremental deferred income tax expense of $5.1 million, net of federal benefit, for the reversal of these previously established deferred tax assets.

        During the years ended December 31, 2010 and 2009, we recorded a provision for income tax of $20.0 million and $13.9 million, respectively, which represents an effective tax rate of 35.7% and 58.8%, respectively. The decrease in the 2010 effective tax rate was primarily due to the one-time impact of various state law changes that occurred in 2009.

Results of Discontinued Operations

        Our consolidated financial statements reflect the operations, assets and liabilities of WWHO-TV in Columbus, OH, WUPW-TV in Toledo, OH, and the Banks Broadcasting joint venture station as discontinued for all periods presented. As a result, (loss) income from discontinued operations was $(0.9) million, $0.3 million and $(0.6) million for the years ended December 31, 2011, 2010 and 2009, respectively. For further information see Note 3—"Discontinued Operations" to our consolidated financial statements.

Liquidity and Capital Resources

        Our liquidity position depends on our ability to generate cash from operations and to utilize borrowings under our senior secured credit facility. Our ability to make use of the revolving credit facility is contingent on our compliance with certain financial covenants, which are measured, in part, by the level of EBITDA we generate from our operations. As of December 31, 2011, we were in compliance with all financial and non-financial covenants under our senior secured credit facility. As of December 31, 2011, we had unrestricted cash and cash equivalents of $18.1 million, and a $75 million revolving credit facility, of which $40 million was available. We had restricted cash balances of $255.2 million, which were used to redeem, on January 20, 2012, all of the remaining Senior Subordinated Notes and to pay accrued interest through the redemption date. Below is a discussion of our significant sources and uses of cash and should be read in conjunction with our consolidated statements of cash flows.

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Operating activities

        Cash provided by operating activities is primarily driven by our net revenues and changes in working capital as a result of the timing of collections and payments. Our total net revenues has primarily been, and will primarily be affected by, among other things, the following:

•

Continued growth in local and interactive revenues.  During the years ended December 31, 2011 and 2010, our local revenues, which include net local advertising sales, retransmission consent fees and revenues from our television station web sites and mobile applications, increased 7% and 9%, respectively, compared to the prior year. Additionally, during the years ended December 31, 2011 and 2010, our interactive revenues increased 66% and 493%, respectively, which are generated by our online advertising and media services business, RMM and Nami Media, our digital advertising management and technology company. We expect further growth in our local revenues and interactive revenues, however, there can be no assurance that this will occur.



•

Cyclical fluctuations.  We experience significant fluctuations in our political advertising revenues since advertising revenues are generally higher in even-numbered years due to additional revenues associated with political advertising related to local and national elections. Political advertising revenues were $8.1 million, $41.6 million and $11.0 million for the years ended December 31, 2011, 2010 and 2009, respectively. We also experience incremental advertising revenues associated with Olympic broadcasts during even-numbered years. We anticipate increased advertising revenues during 2012 as a result of these cyclical fluctuations. Additionally, the U.S. Supreme Court's ruling in 2010 that allowed for unlimited independent political expenditures from corporations and unions may further increase political advertising spending in even numbered years.

        Other items impacting our cash flow from operations include:

•

Employee benefit contributions.  Our employee benefit plan contributions include contributions to our pension plan and the 401(k) Plan. Volatility in the equity markets impacts the fair value of our pension plan assets and ultimately the cash funding requirements of our pension plan. We contributed $5.4 million, $5.4 million and $0.6 million to our pension plan during the years ended December 31, 2011, 2010 and 2009, respectively, and anticipate contributing $7.5 million to our pension plan during 2012. Effective January 1, 2010, we resumed contributions to the 401(k) Plan, whereby we provide a 3% non-elective contribution to all eligible employees. We contributed approximately $3.6 million, $3.5 million, and $0.5 million during the years ended December 31, 2011, 2010 and 2009, respectively, and expect to contribute approximately $4 million to our 401(k) Plan during 2012.



•

Payments related to certain restructuring activities.  We made cash payments related to certain restructuring initiatives of $1.1 million, $2.6 million and $9.5 million during the years ended December 31, 2011, 2010 and 2009, respectively. For further details on these restructuring initiatives see Note 13—"Restructuring" to our consolidated financial statements.

Investing activities

        Cash used in investing activities has primarily been, and will primarily be affected by, among other things, the following:

•

Capital expenditures.  Capital expenditures increased $2.6 million to $20.1 million, and increased $7.4 million to $17.4 million, for the years ended December 31, 2011 and 2010, respectively, compared to the prior years. We anticipate capital expenditures of approximately $26 million during the year ended December 31, 2012, which we expect to fund using cash flows from operations.

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•

Cash requirements related to the NBCUniversal joint venture.  During the years ended December 31, 2011 and 2010, pursuant to the shortfall funding agreements, we made shortfall loans in an aggregate principal amount of $6.6 million, representing our approximate 20% share in debt service shortfalls. As of December 31, 2011, we have an accrued shortfall funding liability of $4.1 million for our approximate 20% share of debt service shortfalls that we expect to fund during 2012 and into 2013. We believe that cash shortfalls beyond the amounts currently accrued are not probable. Actual cash shortfalls at the joint venture could vary from our current estimates.


For further information about the joint venture with NBCUniversal, the estimate of our shortfall funding liability, and the shortfall funding agreements, see Item 1A. "Risk Factors—The GECC Note could result in significant liabilities, including (i) requiring us to make short-term cash payments to the NBCUniversal joint venture to fund interest payments and (ii) potentially giving rise to the acceleration of our existing indebtedness, which would cause such existing indebtedness to become immediately due and payable," as well as Note 15—"Commitments and Contingencies" to our consolidated financial statements.

•

Acquisition and sale of assets.  During the years ended December 31, 2011 and 2010, we made cash payments totaling $10.0 million, which included $0.9 million contributed by WBDT, a consolidated VIE, and $0.6 million, respectively, associated with the acquisition of stations and interactive investments. During 2012, we expect to receive aggregate cash proceeds of approximately $29 million related to the divestitures of WWHO-TV in Columbus, OH, and WUPW-TV in Toledo, OH.



•

Other investments.  During the year ended December 31, 2011, we acquired a majority interest in Nami Media, a digital advertising management and technology company. Under the terms of the purchase agreement, we may be required to purchase the remaining outstanding shares of Nami Media in 2014, with a purchase price based on multiples of Nami Media's 2013 net revenue and EBITDA as further described in Note 2—"Acquistions". Our maximum potential obligation under the Nami Media agreements is $36.5 million.

Financing activities

        Cash used in financing activities has primarily been, and will primarily be affected by, among other things, the following:

•

Senior secured credit facility.  During the year ended December 31, 2011, we entered into a new senior secured credit facility, comprised of a six-year, $125 million term loan, a seven-year, $260 million incremental term loan and a five-year, $75 million revolving credit facility, of which $16 million was drawn against such facility as of the date of this report. Concurrent with the closing of the new senior secured credit facility, we terminated the credit agreement governing our 2009 senior secured credit facility, the proceeds of which were used to complete the redemption of our Senior Subordinated Notes described below.



•

Senior Subordinated Notes Due 2013.  During the year ended December 31, 2011, we redeemed $109.1 million of our 6¹/2% Senior Subordinated Notes, and $55.9 million of our 6¹/2% Senior Subordinated Notes—Class B. The redemption of these notes was funded in part with proceeds from the term loan, the revolving credit facility and cash on hand. The redemption was completed on November 25, 2011. Additionally, on December 21, 2011, we issued notices to redeem all of the remaining Senior Subordinated Notes at par, plus accrued and unpaid interest through the redemption date. We used proceeds from the incremental term loan and cash on hand to fund the aggregate redemption price. On December 21, 2011, we irrevocably deposited with the trustee the full amount of the redemption price of our Senior Subordinated Notes. As of December 31, 2011, the $255.2 million irrevocable deposit was classified as restricted cash in our consolidated balance sheets, and $251.0 million of our Senior Subordinated Notes, net of a discount of $1.2 million,

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remained outstanding. The redemption was completed on January 20, 2012, and as of that date, there were no Senior Subordinated Notes outstanding. For further information on these transactions see "Description of Indebtedness".

•

Stock repurchase program.  During the year ended December 31, 2011, our Board of Directors approved a stock repurchase program that authorizes us to repurchase up to $25 million of our class A common stock over a 12 month period. Pursuant to this authorization, during the year ended December 31, 2011, we repurchased approximately 0.8 million shares of our class A common stock on the open market for an aggregate purchase price of $2.7 million.

        We believe that our cash flows from our current operations, together with available borrowings under our senior secured credit facility, will be sufficient to meet our anticipated cash requirements for the next 12 months, and beyond. These cash requirements include working capital, capital expenditures, interest payments, scheduled principal payments, and loans to the joint venture with NBCUniversal. For our long-term liquidity needs, in addition to the sources described above, we may rely upon, among other things, the issuance of long-term debt, the issuance of equity, or other financing sources available to us. Volatility and disruption of the capital and credit markets could impact our ability to access such sources. Anticipated cash payments for our debt and related interest are described below.

Contractual Obligations

        The following table summarizes our estimated future contractual cash obligations as of December 31, 2011 (in thousands):

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        The above table excludes future payments for our defined benefit retirement plans, deferred taxes and executive compensation, with the exception of scheduled deferred compensation payments detailed above, because their future cash outflows are uncertain. Also excluded from the table above are principal payments of $252.2 million and cash interest payments of $3.0 million as a result of our irrevocable deposit of $255.2 million with the trustee on December 21, 2011, to redeem in full all of our Senior Subordinated Notes on January 20, 2012 as further described in "Description of Indebtedness", and potential interest shortfall payments to the joint venture with NBCUniversal. For additional information regarding our financial commitments as of December 31, 2011 see Note 7—"Long-term Debt", Note 11—"Retirement Plans" and Note 15—"Commitments and Contingencies" to our consolidated financial statements.

Summary of Cash Flows

        The following table presents summarized cash flow information (in thousands):

        Net cash provided by operating activities decreased $27.6 million to $62.7 million for the year ended December 31, 2011, compared to cash provided by operating activities of $90.2 million for the prior year. The decrease was primarily attributable to a $33.5 million decrease in political advertising sales, an $11.5 million increase in direct operating expenses, and a $10.1 million increase in working capital, all of which were partially offset by a $17.7 million increase in local revenues and a $10.8 million increase in interactive revenues.

        Net cash provided by operating activities increased $62.9 million to $90.2 million for the year ended December 31, 2010, compared to cash provided by operating activities of $27.4 million for the prior year. The increase was primarily due to an increase in net revenues of $80.3 million, offset by increases of $14.6 million in direct operating and $6.3 million in selling, general and administrative expenses in 2010 compared to 2009.

        Net cash used in investing activities increased $265.5 million to $289.2 million for year ended December 31, 2011, compared to cash used in investing activities of $23.6 million for the prior year. The increase is primarily attributable to an increase in restricted cash as a result of our irrevocable deposit for the full amount of the redemption price of our Senior Subordinated Notes as further described in "Description of Indebtedness". The increase is also attributable to an increase in payments for business combinations of $8.5 million and an increase in capital expenditures of $2.6 million. These increases were partially offset by a decrease of $1.6 million for shortfall loans to our joint venture with NBCUniversal and other investments of $1.6 million.

        Net cash used in investing activities increased $9.2 million to $23.6 million for year ended December 31, 2010, compared to cash used in investing activities of $14.5 million for the prior year. The increase is primarily attributable to an increase in capital expenditures of $7.4 million, shortfall loans of $4.1 million to our joint venture with NBCUniversal, payments of $2.2 million related to our 2006 interest rate hedge and $2.0 million paid to acquire a non-controlling investment in an interactive service provider that hosts our web sites during 2010. These increases compare to $6.0 million paid under our settlement with 54 Broadcasting and $1.2 million paid for our acquisition of RMM during 2009.

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        Net cash provided by financing activities was $232.9 million for the year ended December 31, 2011, compared to net cash used in financing activities of $66.0 million for the prior year. The increase is primarily attributable to an increase in proceeds from borrowings under our new senior secured credit facility, partially offset by payments on our Senior Subordinated Notes as further described in "Description of Indebtedness".

        Net cash used in financing activities increased $44.2 million to $66.0 million for the year ended December 31, 2010, compared to cash used in financing activities of $21.9 million for the prior year. The increase was primarily due to an increase in net principal payments on long-term debt when compared to the prior period as a result of the payments of principal on our revolving credit facility and term loans as further described in "Description of Indebtedness".

Description of Indebtedness

        Debt consisted of the following (in thousands):

Senior Secured Credit Facility

        On October 26, 2011, we entered into a credit agreement governing our senior secured credit facility with JP Morgan Chase Bank, N.A. ("JPMorgan"), Administrative Agent, and the banks and other financial institutions party thereto. Our senior secured credit facility is comprised of a six-year, $125 million term loan and a five-year, $75 million revolving credit facility, and bears interest at a rate based on, at our

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option, either a) the LIBOR interest rate, or b) the ABR rate, which is an interest rate that is equal to the greatest of (i) the Prime Rate, (ii) the Federal Funds Effective Rate plus ¹/2 of 1 percent, and (iii) the one-month LIBOR rate plus 1%. In addition, the rate we select also bears an applicable margin based upon our consolidated senior secured leverage ratio, currently set at 3.00% and 2.00% for LIBOR based loans and ABR rate loans, respectively. Lastly, the unused portion of the revolving credit facility is subject to a commitment fee based upon our Consolidated Senior Secured Leverage Ratio, currently set at 0.50% for both LIBOR based loans and ABR rate loans. Concurrent with the closing of our senior secured credit facility, we terminated the credit agreement governing our 2009 senior secured credit facility.

        The terms of the credit agreement provide for customary representations and warranties, affirmative and negative covenants (including financial covenants), and events of default. The credit agreement also provides for the payment of customary fees and expenses by us. The credit facilities available under the the credit agreement can be accelerated upon events of default and require the term loans to be prepaid under certain circumstances with amounts determined by reference to the proceeds from certain asset sales (subject to reinvestment rights), the incurrence of certain indebtedness and a percentage of annual excess cash flow.

        The credit facilities are senior secured obligations and rank senior in right of payment to our existing and future subordinated indebtedness. LIN TV and certain of our existing, or hereafter created or acquired, domestic subsidiaries guarantee the credit facilities on a senior basis. LIN Television and each of our subsidiary guarantors have granted a security interest in all or substantially all of our assets to secure the obligations under our senior secured credit facility, and LIN TV Corp. has granted a security interest in the capital stock of LIN Television to secure such obligations.

        Our senior secured credit facility permits us to prepay loans and to permanently reduce the revolving credit commitments, in whole or in part, at any time. We are also obligated to make mandatory quarterly principal payments. In addition, our senior secured credit facility restricts the use of proceeds from asset sales not reinvested in our business and the use of proceeds from the issuance of debt (subject to certain exceptions), which must be used for mandatory prepayments of principal of the term loans.

        The credit agreement governing our senior secured credit facility also requires on an annual basis, following the delivery of our year-end financial statements, and commencing after the year ended December 31, 2012, mandatory prepayments of principal of the term loans based on a computation of excess cash flow for the preceding fiscal year, as more fully described in the credit agreement.

        On December 21, 2011, we and JPMorgan as Lender and Administrative Agent, signed an incremental term loan activation notice creating an incremental term loan facility pursuant to our existing credit agreement dated October 26, 2011, by and among us, JPMorgan, as Administrative Agent, and the banks and other financial institutions party thereto. The incremental term loan facility is a seven-year, $260 million term loan facility and is subject to the terms of our credit agreement. Borrowings under the incremental term loan facility were used (i) to pay the call price for our redemption of all of our remaining Senior Subordinated Notes, as described below, and (ii) to pay accrued interest, fees and expenses associated with the redemption. Borrowings under the incremental term loan facility bear interest at a rate based, at our option, on an adjusted LIBOR rate, plus an applicable margin of 3.75%, or an adjusted Base Rate, plus an applicable margin of 2.75%; provided, that the adjusted LIBOR rate shall at no time be less than 1.25% per annum.

        The incremental term loan facility is a senior secured obligation and ranks senior in right of payment to our existing and future subordinated indebtedness. The incremental term loan facility is guaranteed and secured on the same basis as the other credit facilities under the credit agreement. If we do not refinance, redeem or discharge our Senior Notes on or prior to January 15, 2018, then, in such event, the maturity of the incremental term loan facility will be accelerated from December 21, 2018 to January 15, 2018.

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        The following table summarizes certain key terms of our senior secured credit facility (in thousands):

2009 Senior Secured Credit Facility

        Borrowings under our 2009 senior secured credit facility bore an interest rate based on, at our option, either a) the LIBOR interest rate, or b) the ABR rate, which is an interest rate that is equal to the greatest of (i) the Prime Rate, (ii) the Federal Funds Effective Rate plus ¹/2 of 1 percent, or (iii) the one-month LIBOR rate plus 1%. In addition, the rate we selected bore an applicable margin rate of 3.75% or 2.75% for LIBOR based loans and ABR rate loans, respectively. Lastly, the unused portion of the revolving credit facility was subject to a commitment fee of 0.50% depending on our consolidated leverage ratio.

        During the year ended December 31, 2011, we paid the remaining balance of $9.6 million on the term loans outstanding under our 2009 senior secured credit facility. Additionally, our available revolving credit commitments decreased from $76.1 million to $48.7 million under our 2009 senior secured credit facility, based on a computation of excess cash flow for the fiscal year ended December 31, 2010. As a result, we recorded a loss on extinguishment of debt of $0.2 million during the year ended December 31, 2011, consisting of a write-down of deferred financing fees related to the revolving credit facility and term loans. Additionally, during the year ended December 31, 2010, we used proceeds from the issuance of our Senior Notes to repay $148.9 million of principal on our revolving credit facility and $45.9 million of principal on our term loans, plus accrued interest, pursuant to the mandatory prepayment terms of the credit agreement governing the terms of our 2009 senior secured credit facility. As a result, during the year ended December 31, 2010, we recorded a loss on extinguishment of debt of $2.7 million, consisting of a write-down of deferred financing fees related to the revolving credit facility and term loans.

8³/8% Senior Notes

        Our Senior Notes are unsecured but rank equally in right of payment with all senior secured indebtedness and senior to all subordinated indebtedness.

        The indenture governing our Senior Notes contains covenants limiting our ability and the ability of our restricted subsidiaries to, among other things, incur certain additional indebtedness and issue preferred stock; make certain dividends, distributions, investments and other restricted payments; sell certain assets; agree to any restrictions on the ability of restricted subsidiaries to make payments to us; create certain liens; merge, consolidate or sell substantially all of our assets; and enter into certain transactions with affiliates. These covenants are subject to certain exceptions and qualifications. The indenture also has change of control provisions which may require our Company to purchase our Senior

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Notes at a price equal to 101% of the principal amount thereof, together with accrued and unpaid interest. Additionally, if we sell assets under certain circumstances, we will be required to make an offer to purchase our Senior Notes at their face amount, plus accrued and unpaid interest, if any, through the purchase date.

6¹/2% Senior Subordinated Notes and 6¹/2% Senior Subordinated Notes—Class B

        During the year ended December 31, 2011, we redeemed $109.1 million of our 6¹/2% Senior Subordinated Notes, and $55.9 million of our 6¹/2% Senior Subordinated Notes—Class B. The redemption of these notes, at par, was funded in part by proceeds from the term loan, the revolving credit facility and cash on hand. As a result of this redemption, we recorded a loss on extinguishment of debt of $1.5 million associated with a write-down of deferred financing fees and unamortized discount in our consolidated statement of operations.

        On December 21, 2011, we issued notices to redeem all of the remaining Senior Subordinated Notes at par, plus accrued and unpaid interest through the redemption date. We used proceeds from the incremental term loan under our new senior secured credit facility as described above, and cash on hand to fund the aggregate redemption price. On December 21, 2011, we irrevocably deposited with the trustee the full amount of the redemption price of our Senior Subordinated Notes. As of December 31, 2011, the $255.2 million irrevocable deposit was classified as restricted cash in our consolidated balance sheets, and $251.0 million of our Senior Subordinated Notes, net of a discount of $1.2 million, remained outstanding. The redemption was completed on January 20, 2012, and as of that date, there were no Senior Subordinated Notes outstanding. As a result of this redemption, we expect to record a loss on extinguishment of debt of $2.1 million associated with a write-down of deferred financing fees and unamortized discount to our consolidated statement of operations during the three months ended March 31, 2012.

Other Debt

        During the year ended December 31, 2011, WBDT Television, LLC ("WBDT"), a consolidated VIE, entered into a term loan with an unrelated third party in an original principal amount of $0.9 million to fund a portion of the purchase price for the acquisition of certain assets of WBDT-TV. This term loan matures in equal quarterly installments through May 2016. LIN Television fully and unconditionally guarantees this loan.

Repayment of Principal

        The following table summarizes scheduled future principal repayments on our debt agreements (in thousands):

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        The fair values of our long-term debt are estimated based on quoted market prices for the same or similar issues, or based on the current rates offered to us for debt with the same remaining maturities. The carrying amounts and fair values of our long-term debt were as follows (in thousands):

Off Balance Sheet Arrangements

GECC Note

        We have guaranteed the GECC Note, which is an $815.5 million 25-year non-amortizing senior secured note bearing an initial interest rate of 8.0% per annum until March 1, 2013 and 9% per annum thereafter. The GECC Note was assumed by our joint venture with NBCUniversal in 1998 and in the event of a default and acceleration of the GECC Note, our guarantee would require LIN TV to pay any shortfall should the assets of the joint venture be liquidated and not be sufficient to satisfy the principal amount due under the GECC Note. The GECC Note is not LIN TV's or LIN Television's obligation, nor the obligation of any of our subsidiaries. GECC has recourse only to the joint venture, our equity interest in the joint venture and, after exhausting all remedies against the assets of the joint venture and the other equity interest in the joint venture, to LIN TV pursuant to its guarantee. Acceleration of the GECC Note upon an event of default, and GECC's pursuit of remedies against LIN TV pursuant to the guarantee, could, if they result in material adverse consequences to LIN Television, cause an acceleration of LIN Television's senior secured credit facility and other outstanding indebtedness. For more information about the GECC Note, see the description of the NBCUniversal Joint Venture in Item 1. "Business—Joint Venture with NBCUniversal" and Item 1A. "Risk Factors—The GECC Note could result in significant liabilities, including (i) requiring us to make short term cash payments to the NBCUniversal joint venture to fund interest payments and (ii) potentially giving rise to the acceleration of our existing indebtedness, which could cause such indebtedness to become immediately due and payable", as well as the description of the GECC Note in Note 15—"Commitments and Contingencies" to our consolidated financial statements.

Future Program Rights Agreements

        We record program rights agreements on our balance sheet on the first broadcast date the programs are available for air. As a result, we have commitments for future program rights agreements not recorded on our balance sheet as of December 31, 2011 of $44.5 million, as detailed in Note 15—"Commitments and Contingencies" to our consolidated financial statements.

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Item 7A.    Quantitative and Qualitative Disclosures About Market Risk

        We are exposed to market risk related to interest rates on our senior secured credit facility debt. In accordance with our interest rate risk management policy, we do not enter into derivative instruments unless there is an underlying exposure, and we do not enter into derivative financial instruments for speculative trading purposes.

Interest Rate Risk

        Our total debt as of December 31, 2011 was $868.7 million, including the current portion of $253.9 million, of which our Senior Notes and Senior Subordinated Notes bear a fixed interest rate and the credit facility bears an interest rate based on, either a) the LIBOR interest rate, or b) the ABR rate, which is an interest rate that is equal to the greatest of (i) the Prime Rate, (ii) the Federal Funds Effective Rate plus ¹/2 of 1 percent, and (iii) the one-month LIBOR rate plus 1%. In addition, the rate we select also bears an applicable margin based upon our consolidated senior secured leverage ratio, currently set at 3.00% and 2.00% for LIBOR based loans and ABR rate loans, respectively. Additionally, borrowings under the incremental term loan facility bear interest at a rate based, at our option, on an adjusted LIBOR rate, plus an applicable margin of 3.75%, or an adjusted Base Rate, plus an applicable margin of 2.75%; provided, that the adjusted LIBOR rate shall at no time be less than 1.25% per annum.

        Accordingly, we are exposed to potential losses related to increases in interest rates. The outstanding balance on our senior secured credit facility was $416.8 million as of December 31, 2011. Therefore, a hypothetical 1% increase in the floating rate used as the basis for the interest charged on our senior secured credit facility as of December 31, 2011 would increase our annualized interest expense by $4.2 million, assuming such amounts remain outstanding under the facility.

        Borrowings under our 2009 senior secured credit facility bore an interest rate based on, at our option, either a) the LIBOR interest rate, or b) the ABR rate, which is an interest rate that is equal to the greatest of (i) the Prime Rate, (ii) the Federal Funds Effective Rate plus ¹/2 of 1 percent, or (iii) the one-month LIBOR rate plus 1%. In addition, the rate we selected also bore an applicable margin rate of 3.750% or 2.750% for LIBOR based loans and ABR rate loans, respectively. We historically used the 2006 interest rate hedge to hedge a notional amount of the declining balances of our term loans under our 2009 senior secured credit facility to mitigate changes in our cash flows resulting from fluctuations in interest rates. The 2006 interest rate hedge effectively converted the floating LIBOR rate-based-payments to fixed payments at 5.33% plus the applicable margin rate calculated under our 2009 senior secured credit facility. During the year ended December 31, 2011, this hedge expired concurrent with the expiration of our 2009 senior secured credit facility. For further information see Note 8—"Derivative Financial Instruments" to our consolidated financial statements.

Item 8.    Financial Statements and Supplementary Data

        See index on page F-1.

Item 9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

        None.

Item 9A.    Controls and Procedures

        a)    Evaluation of disclosure controls and procedures.    Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2011. 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

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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 our disclosure controls and procedures as of December 31, 2011, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

        b)    Management's Report on Internal Control Over Financial Reporting.    Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f). Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policy or procedures may deteriorate. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have conducted an evaluation of the effectiveness of our internal control over financial reporting based upon the Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. As permitted by the SEC, we have excluded Nami Media from our evaluation as of December 31, 2011 because it was acquired by us in a purchase business combination on November 22, 2011. Nami Media is a majority-owned and controlled subsidiary, whose total assets and total revenues represent 1% and less than 1%, respectively, of our consolidated financial statement amounts as of and for the year ended December 31, 2011. Based on this evaluation, which excludes Nami Media because it was acquired in a purchase business combination on November 22, 2011, our Chief Executive Officer and Chief Financial Officer have concluded that our internal control over financial reporting was effective as of December 31, 2011.

        The effectiveness of our internal control over financial reporting as of December 31, 2011 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included herein.

        c)    Changes in internal controls.    There were no changes in our internal control over financial reporting identified in connection with the evaluation that occurred during the quarter ended December 31, 2011 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

Item 9B.    Other Information

        None.

PART III

        

Item 10.    Directors and Executive Officers and Corporate Governance

        Information regarding members of our Board of Directors is contained in our Proxy Statement for the 2012 Annual Meeting of the Stockholders under the caption "Directors and Executive Officers" and is incorporated herein by reference. Information regarding our executive officers is contained in our Proxy Statement for the 2012 Annual Meeting of the Stockholders under the caption "Executive Officers" and is incorporated herein by reference. Information regarding Section 16(a) compliance is contained in our Proxy Statement for the 2012 Annual Meeting of Stockholders under the caption "Security Ownership of

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Certain Beneficial Owners and Management" and is incorporated herein by reference. Information regarding our Audit Committee and our Audit Committee Financial Expert is contained in our Proxy Statement for the 2012 Annual Meeting of the Stockholders under the caption "Report of the Audit Committee of our Board of Directors" and is incorporated herein by reference.

Item 11.    Executive Compensation

        The information required by this item is contained in our Proxy Statement for the 2012 Annual Meeting of Stockholders under the captions "Compensation Discussion and Analysis," "Director Compensation," "Report of the Compensation Committee of our Board of Directors," and "Compensation Committee Interlocks and Insider Participation," which is incorporated by reference in this document.

Item 12.    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Equity compensation plans

        The following table provides information about the securities authorized for issuance under our stock-based compensation plans, including our 1998 Stock Option Plan, Amended and Restated 2002 Stock Plan, and Third Amended and Restated 2002 Non-Employee Director Stock Plan, as of December 31, 2011:

Other Information

        All other information required by this item is contained in our Proxy Statement for the 2012 Annual Meeting of Stockholders under the caption "Security Ownership of Certain Beneficial Owners and Management", which is incorporated by reference in this document.

Item 13.    Certain Relationships and Related Transactions and Director Independence

        The response to this item is contained in our Proxy Statement for the 2012 Annual Meeting of Stockholders under the caption "Certain Relationships and Related Transactions", which is incorporated by reference in this document.

Item 14.    Principal Accounting Fees and Services

        The response to this item is contained in our Proxy Statement for the 2012 Annual Meeting of Stockholders under the caption "Independent Registered Public Accounting Firm Fees and Other Matters", which is incorporated by reference in this document.

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PART IV

        

Item 15.    Exhibits and Financial Statement Schedules

(a)

See Index to Financial Statements on page F-1.



(b)

Exhibits.

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(c)   Financial Statement Schedule

        The following financial statement schedule is filed herewith:

        Schedule I—Condensed Financial Information of the Registrant

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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.

        Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of each of LIN TV Corp. and LIN Television Corporation in the capacities and on the dates indicated.

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Index to Financial Statements

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of LIN TV Corp.:

         In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of LIN TV Corp. and its subsidiaries at December 31, 2011 and December 31, 2010, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2011 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the accompanying index present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for these financial statements and financial statement schedule, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on these financial statements, on the financial statement schedule, and on the Company's internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

         A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

         Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

         As described in Management's Report on Internal Control over Financial Reporting, management has excluded Nami Media, Inc. from its assessment of internal control over financial reporting as of December 31, 2011 because it was acquired by the Company on November 22, 2011 in a purchase business combination. We have also excluded Nami Media, Inc. from our audit of internal control over financial reporting. Nami Media, Inc. is a majority-owned and controlled subsidiary, whose total assets and total revenues represent 1% and less than 1%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2011.

/s/ PricewaterhouseCoopers LLP

Hartford, CT
March 15, 2012

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Part I. Financial Information

Item 1.    Consolidated Financial Statements

        

LIN TV Corp.

Consolidated Balance Sheets

   

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

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LIN TV Corp.

Consolidated Statements of Operations

   

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

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LIN TV Corp.

Consolidated Statements of Stockholders' Deficit and Comprehensive Income

(in thousands, except share data)

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

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LIN TV Corp.

Consolidated Statements of Stockholders' Deficit and Comprehensive Income

(in thousands, except share data)

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

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LIN TV Corp.

Consolidated Statements of Stockholders' Deficit and Comprehensive Income

(in thousands, except share data)

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

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LIN TV Corp.

Consolidated Statements of Cash Flows

   

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

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LIN TV Corp.

Notes to Consolidated Financial Statements

Note 1—Basis of Presentation and Summary of Significant Accounting Policies

        LIN TV Corp. ("LIN TV"), together with its subsidiaries, including LIN Television Corporation ("LIN Television"), is a local multimedia company operating in the United States. LIN TV and its subsidiaries are affiliates of HM Capital Partners I LP ("HMC"). In these notes, the terms "Company," "we," "us" or "our" mean LIN TV and all subsidiaries included in our consolidated financial statements.

        LIN TV has no independent assets or operations. We guarantee all of LIN Television's debt. All of the consolidated wholly-owned subsidiaries of LIN Television fully and unconditionally guarantee LIN Television's Senior Secured Credit Facility and 8³/8% Senior Notes ("Senior Notes") on a joint-and-several basis, subject to customary release provisions. Our 6¹/2% Senior Subordinated Notes and 6¹/2% Senior Subordinated Notes—Class B ("Senior Subordinated Notes") were redeemed in full on January 20, 2012.

        Our consolidated financial statements reflect the operations of WWHO-TV in Columbus, OH, WUPW-TV in Toledo, OH, and Banks Broadcasting, Inc. (the "Banks Broadcasting joint venture") as discontinued for all periods presented. (See Note 3—"Discontinued Operations" for further discussion of our discontinued operations.)

        The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"). Certain changes in classifications have been made to the prior period financial statements to conform to the current financial statement presentation. Our significant accounting policies are described below.

Principles of consolidation

        The accompanying consolidated financial statements include the accounts of our Company, our wholly-owned and majority-owned and controlled subsidiaries, and variable interest entities ("VIEs") for which we are the primary beneficiary. We review all local marketing agreements ("LMAs"), shared services agreements ("SSAs") or joint sales agreements ("JSAs"), to evaluate whether consolidation of such arrangements is required. All intercompany accounts and transactions have been eliminated. We conduct our business through our subsidiaries and have no operations or assets other than our investment in our subsidiaries and equity-method investments. We operate in one reportable segment.

Variable Interest Entities

        In determining whether we are the primary beneficiary of a VIE for financial reporting purposes, we consider whether we have the power to direct the activities of the VIE that most significantly impact the economic performance of the VIE and whether we have the obligation to absorb losses or the right to receive returns that would be significant to the VIE. We consolidate VIEs when we are the primary beneficiary.

        On May 20, 2011, we acquired certain assets of WBDT-TV in the Dayton, OH market, and WBDT Television, LLC ("WBDT"), a third party, acquired other assets, including the Federal Communication Commission ("FCC") license of WBDT-TV as further described in Note 2—"Acquisitions". During 2011, we also entered into a JSA and SSA with WBDT. Under these agreements, we provide sales and administrative services to WBDT, have an obligation to reimburse certain of WBDT's expenses, and we are compensated through a performance-based fee structure that provides us the benefit of certain returns from the operation of WBDT-TV.

        We determined that upon the completion of the acquisition of certain assets of WBDT-TV, as further described in Note 2—"Acquisitions", WBDT was a VIE, and as a result of the JSA and SSA, we have a

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 1—Basis of Presentation and Summary of Significant Accounting Policies (Continued)

variable interest in WBDT. The sole business of WBDT is the ownership and operation of WBDT-TV. We are the primary beneficiary of that entity because of our obligation to reimburse certain of WBDT's expenses that could result in losses that are significant to the VIE, the potential for us to participate in returns of WBDT-TV through a performance-based bonus, and our power to direct certain activities related to the operation of WBDT-TV, which significantly impact the economic performance of WBDT. Therefore, we consolidate WBDT within our consolidated financial statements.

        The carrying amounts and classifications of the assets, liabilities and member's interest of WBDT, which have been included in our consolidated balance sheets as of December 31, 2011, were as follows (in thousands):

        The assets of our consolidated VIE can only be used to settle the obligations of the VIE, and may not be sold, or otherwise disposed of, except for assets sold or replaced with others of like kind or value. Other liabilities of WBDT of $7.2 million serve to reduce the carrying value of the entity, to reflect the fact that as of December 31, 2011, LIN Television has an option described below that it may exercise if the FCC attribution rules change. The option would allow LIN Television to acquire the assets or member's interest of WBDT for a nominal exercise price, which is significantly less than the carrying value of the tangible and intangible net assets of WBDT. During the year ended December 31, 2011, $0.2 million was attributable to noncontrolling interest related to this VIE in our consolidated statement of operations. As of

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 1—Basis of Presentation and Summary of Significant Accounting Policies (Continued)

December 31, 2011, the noncontrolling interest related to this VIE on our consolidated balance sheets is $0.2 million.

Use of estimates

        The preparation of financial statements in conformity with U.S. GAAP requires our management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the notes thereto. Our actual results could differ from these estimates. Estimates are used for the allowance for doubtful accounts in receivables, valuation of goodwill and intangible assets, amortization and impairment of program rights and intangible assets, stock-based compensation and other long-term incentive compensation arrangements, pension costs, barter transactions, income taxes, employee medical insurance claims, useful lives of property and equipment, contingencies, including shortfall funding liabilities to our joint venture with NBCUniversal, litigation and net assets of businesses acquired.

Cash and cash equivalents

        Cash equivalents consist of highly liquid, short-term investments that have an original maturity of three months or less when purchased. All of our available cash is on deposit with banking institutions that we believe to be financially sound. We had no material losses on our cash or cash equivalents during 2011. On December 21, 2011, we irrevocably deposited with the trustee the full amount of the redemption price of our Senior Subordinated Notes as further described in Note 7—"Debt". As a result of this deposit, we have $255.2 million of restricted cash included on our consolidated balance sheets as of December 31, 2011.

Property and equipment

        Property and equipment is recorded at cost and is depreciated using the straight-line method over the estimated useful lives of the assets, which are an average of 30 to 40 years for buildings and fixtures, and 3 to 15 years for broadcast and other equipment. Upon retirement or other disposition, the cost and related accumulated depreciation of the assets are removed from the accounts and the resulting gain or loss is included in consolidated net income or loss. Expenditures for maintenance and repairs, including expenditures for planned major maintenance activities, are expensed as incurred. We review our property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Nonmonetary exchanges

        We exchange productive assets, such as broadcast equipment, with third parties through nonmonetary exchanges. We recognize gains or losses on nonmonetary exchanges in an amount equal to the difference between the fair value of the assets received and the carrying value of the assets surrendered.

Equity investments

        Equity investments that we do not have a controlling interest in are accounted for using the equity method. Our share of the net income or loss for these investments, including any equity investment impairments, is included in share of loss from equity investments on our consolidated statement of operations. We review our interest in our equity investments for impairment if there is a series of operating

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 1—Basis of Presentation and Summary of Significant Accounting Policies (Continued)

losses or other factors that may indicate that there is a decrease in the value of our investment that is other than temporary.

Revenue recognition

        We recognize local, national and political advertising sales, net of agency commissions, during the period in which the advertisements or programs are aired on our television stations, and when payment is reasonable assured. Internet and mobile advertisement sales are recognized when the advertisement is displayed on our web sites or the web sites of our advertising network. We recognize retransmission consent fees in the period in which our service is delivered.

Barter transactions

        We account for barter transactions at the fair value of the goods or services we receive from our customers, or the advertising time provided, whichever is more clearly indicative of fair value based on the judgment of our management. We record barter advertising revenue at the time the advertisement is aired and barter expense at the time the goods or services are used. We account for barter programs at fair value based on a calculation using the actual cash advertisements we sell within barter programs multiplied by one minus the program profit margin for similar syndicated programs where we pay cash to acquire the program rights. We record barter program revenue and expense when we air the barter program. We do not record barter revenue or expenses related to network programs. Barter revenue and expense included in the consolidated statements of operations are as follows (in thousands):

Advertising expense

        Advertising costs are expensed as incurred. We incurred advertising costs in the amounts of $2.6 million, $3.2 million and $3.1 million for the years ended December 31, 2011, 2010 and 2009, respectively.

Intangible assets

        Intangible assets primarily include broadcast licenses, network affiliations, customer relationships, completed technology, non-compete agreements and goodwill.

        We test the impairment of our broadcast licenses annually or whenever events or changes in circumstances indicate that such assets might be impaired. The impairment test consists of a comparison of the fair value of broadcast licenses with their carrying amount on a station-by-station basis using a discounted cash-flow valuation method, assuming a hypothetical start-up scenario. The future value of our broadcast licenses could be significantly impaired by the loss of the corresponding network affiliation agreements. Accordingly, such an event could trigger an assessment of the carrying value of a broadcast license.

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 1—Basis of Presentation and Summary of Significant Accounting Policies (Continued)

        We test the impairment of goodwill annually or whenever events or changes in circumstances indicate that goodwill might be impaired. The first step of the goodwill impairment test compares the fair value of a station with its carrying amount, including goodwill. The fair value of a station is determined through the use of a discounted cash flow analysis. The valuation assumptions used in the discounted cash flow model reflect historical performance of the station and prevailing values in the markets for broadcasting properties. If the fair value of the station exceeds its carrying amount, goodwill is not considered impaired. If the carrying amount of the station exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of goodwill with the carrying amount of that goodwill. The implied fair value of goodwill is determined by performing a hypothetical purchase price allocation, using the station's fair value (as determined in step one) as the purchase price. If the carrying amount of goodwill exceeds the implied fair value, an impairment charge is recognized in an amount equal to that excess, but not more than the carrying value of the goodwill. An impairment assessment could be triggered by a significant reduction, or a forecast of such reductions, in operating results or cash flows at one or more of our television stations, a significant adverse change in the national or local advertising marketplaces in which our television stations operate, or by adverse changes to FCC ownership rules, among other factors. We recorded impairment charges during 2011 and 2009, which are more fully described in Note 6—"Intangible Assets".

Long-lived assets

        We periodically evaluate the net realizable value of long-lived assets, including tangible and intangible assets, relying on a number of factors including operating results, business plans, economic projections and anticipated future cash flows. Impairment in the carrying value of an asset is recognized when the expected future operating cash flow derived from the asset is less than its carrying value.

Program rights

        Program rights are recorded as assets when the license period begins and the programs are delivered to our stations for broadcasting, at the gross amount of the related obligations. Costs incurred in connection with the purchase of programs to be broadcast within one year are classified as current assets, while costs of those programs to be broadcast subsequently are considered non-current. Program costs are charged to operations over their estimated broadcast periods in a manner consistent with actual usage.

        If the estimated net realizable value of acquired programming rights is less than unamortized cost (i.e. due to poor ratings), we would recognize an impairment charge to reduce the carrying value of the program rights to their net realizable value.

        Program obligations are classified as current or non-current in accordance with the payment terms of the license agreement.

Stock-based compensation

        As of December 31, 2011, we have several stock-based employee compensation plans, which are described more fully in Note 9—"Stock-Based Compensation". We estimate the fair value of stock option awards using a Black-Scholes valuation model. The Black-Scholes valuation model requires us to make assumptions and judgments about the variables used in the calculation, including the option's expected term, the expected volatility of the underlying stock and the number of stock option awards that are

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 1—Basis of Presentation and Summary of Significant Accounting Policies (Continued)

expected to be forfeited. The expected term represents the weighted-average period of time that options granted are expected to be outstanding giving consideration to vesting schedules and our historical exercise patterns. Expected volatility is based on historical trends for our class A common stock over the expected term and, prior to 2010, we used the historical trends of our class A common stock over the expected term, as well as a comparison to peer companies. Expected forfeitures are estimated using our historical experience. If future changes in estimates differ significantly from our current estimates, our future stock-based compensation expense and results of operations could be materially impacted.

        The following table presents the stock-based compensation expense included in our consolidated statements of operations (in thousands):

Income taxes

        Deferred income taxes are recognized based on temporary differences between the financial statement and the tax basis of assets and liabilities using statutory tax rates in effect in the years in which the temporary differences are expected to reverse. We consider future taxable income and feasible tax planning strategies in assessing the need for establishing or removing a valuation allowance. We record or subsequently remove a valuation allowance to reflect our deferred tax assets to an amount that is more likely than not to be realized. In the event that our determination changes regarding the realization of all or part of our deferred tax assets in the future, an adjustment to the deferred tax asset is recorded to our consolidated statement of operations in the period in which such a determination is made.

        When accounting for uncertainty in income taxes we follow the prescribed recognition threshold and measurement methodology for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For benefits to be recognized, a tax position must be more-likely than not to be sustained upon examination by taxing authorities. We recognize interest and penalties related to uncertain tax positions as a component of income tax expense.

Concentration of credit risk

        Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash and cash equivalents and trade receivables. Concentration of credit risk with respect to cash and cash equivalents and investments are limited as we maintain primary banking relationships with only large nationally recognized institutions. We evaluated the viability of these institutions as of December 31, 2011 and we believe our risk is minimal. Credit risk with respect to trade receivables is limited, as our trade receivables are primarily related to advertising revenues generated from a large diversified group of local and nationally recognized advertisers and advertising agencies. We do not require collateral or other

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 1—Basis of Presentation and Summary of Significant Accounting Policies (Continued)

security against trade receivable balances, however, we do maintain reserves for potential bad debt losses, which are based on historical bad debt experience and an assessment of specific risks, and such reserves and bad debts have been within management's expectations for all years presented.

Earnings per share

        Basic earnings per share ("EPS") is computed by dividing income attributable to common stockholders by the number of weighted-average outstanding shares of common stock. Diluted EPS reflects the effect of the assumed exercise of stock options and vesting of restricted shares only in the periods in which such effect would have been dilutive.

        The following is a reconciliation of income available to common stockholders from continuing operations and weighted-average common shares outstanding for purposes of calculating basic and diluted income per common share (in thousands):

        We apply the treasury stock method to measure the dilutive effect of our outstanding stock options and restricted stock awards and include the respective common share equivalents in the denominator of our diluted income per common share calculation. Potentially dilutive securities representing 0.4 million shares, 1.8 million shares and 3.6 million shares of common stock for the years ended December 31, 2011, 2010 and 2009, respectively, were excluded from the computation of diluted income per common share for these periods because their effect would have been anti-dilutive. The net income per share amounts are the same for our class A, class B and class C common stock because the holders of each class are legally entitled to equal per share distributions whether through dividends or in liquidation.

Fair value of financial instruments

        Certain financial instruments, including cash and cash equivalents, investments, accounts receivable and accounts payable are carried in the consolidated financial statements at amounts that approximate fair

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 1—Basis of Presentation and Summary of Significant Accounting Policies (Continued)

value. For certain financial assets and liabilities recorded at fair value on a recurring basis we maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. For more information on our assets and liabilities measured at fair value using the prescribed three-level fair value hierarchy see Note 10—"Fair Value Measurements".

Derivative financial instruments

        Derivatives are required to be recorded as assets or liabilities and measured at fair value. Gains or losses resulting from changes in the fair values of derivatives are recognized immediately or deferred, depending on the use of the derivative and whether or not it qualifies as a hedge. We have historically used derivative financial instruments in the management of our interest rate exposure for our long-term debt. In accordance with our interest rate risk management policy, we do not enter into derivative financial instruments unless there is an underlying exposure, and we do not enter into derivative financial instruments for speculative trading purposes.

Retirement plans

        We have a defined benefit retirement plan covering certain of our employees. Our pension benefit obligations and related costs are calculated using prescribed actuarial concepts. Additionally, we record the unfunded status of our plan on our consolidated balance sheets. Effective April 1, 2009, this plan was frozen and we do not expect to make additional benefit accruals to this plan, however, we continue to fund our existing vested obligations.

Comprehensive income

        Our total comprehensive income includes net income and other comprehensive income (loss) items listed in the table below (in thousands):

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 1—Basis of Presentation and Summary of Significant Accounting Policies (Continued)

Redeemable noncontrolling interest

        The following table presents changes in the redeemable noncontrolling interest related to Nami Media included in our consolidated balance sheets (in thousands):

Recently issued accounting pronouncements

        In September 2011, there were revisions to the accounting standard for goodwill impairment tests. A company has the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The revisions are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted during 2011 if an entity's financial statements have not yet been issued. We will adopt this guidance effective January 1, 2012, and we do not expect it to have a material impact on our financial position or results of operations.

        In June 2011, there were revisions to the accounting standard for reporting comprehensive income. A company has the option to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The revisions are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, and should be applied retrospectively. We will adopt this guidance effective January 1, 2012, and we do not expect it to have a material impact on our financial position or results of operations.

        In October 2009, there were revisions to the accounting standard for revenue arrangements with multiple deliverables. The revisions address how to separate deliverables and how to measure and allocate arrangement consideration to one or more units of accounting. The revisions are effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. We adopted this guidance effective January 1, 2011, and the adoption did not have a material impact on our financial position or results of operations.

Note 2—Acquisitions

Nami Media, Inc.

        On November 22, 2011, we acquired a 57.6% interest (a 50.1% interest calculated on a fully diluted basis) in Nami Media Inc. ("Nami Media"), a digital advertising management and technology company based in Los Angeles, CA. Nami Media serves the growing marketplace of online traffic quality management for cost per click ("CPC") advertising. Our investment in Nami Media fills a niche in our growing suite of digital product offerings and furthers the goal to be advertisers' preferred choice for multiplatform marketing opportunities.

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 2—Acquisitions (Continued)

        Total cash consideration for this acquisition was $4.8 million. In connection with the acquisition, we recognized $4.4 million of goodwill, none of which is amortizable for tax purposes. The goodwill primarily represents the value and synergies between us and Nami Media that we expect to benefit from because we believe RMM's existing CPC business together with Nami Media's advertisement exchange capabilities will increase optimization, query volume and bid exchange revenues for CPC advertisements. Nami Media's platform also facilitates expansion of our existing search engine marketing business. We also recognized $3.7 million of finite-lived intangible assets related to completed technology with an estimated remaining useful life of 5 years, and we recognized $0.3 million of other intangible assets.

        Under the terms of our agreement with Nami Media, we agreed to purchase the remaining outstanding shares of Nami Media in 2014 if Nami Media achieves a target earnings before interest, taxes, depreciation and amortization ("EBITDA") in 2013 as outlined in the purchase agreement. The purchase price of these shares is based on multiples of Nami Media's 2013 net revenues and EBITDA. Our maximum potential obligation under the purchase agreements is $36.5 million. Additionally, if Nami Media does not meet the target EBIDTA in 2013, we have the option to purchase the remaining outstanding shares using the same purchase price multiple. Our obligation to purchase the noncontrolling interest holders' shares is outside of our control, because it is based on Nami Media's achievement of a target EBIDTA in 2013. Therefore, the noncontrolling interest related to Nami Media as of December 31, 2011 has been reported as redeemable noncontrolling interest and classified as temporary equity on our consolidated balance sheets. As of the acquisition date, the fair value of the noncontrolling interest was $3.5 million, and was measured based on the purchase price for our 57.6% ownership interest and the net assets acquired as of the acquisition date.

        In 2014, if we do not purchase the remaining outstanding shares of Nami Media, the noncontrolling interest holders have the right to purchase our interest in Nami Media. The purchase price of these shares is based on the same purchase price multiple described above and is exercisable only if the 2013 EBIDTA target is not met and we do not elect to purchase the remaining interest. The fair value of this option is zero and no amounts related to this option are included in our consolidated financial statements as of December 31, 2011.

        The following table summarizes the provisional allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed in the acquisition (in thousands):

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 2—Acquisitions (Continued)

ACME Communications, Inc.

        On May 28, 2010, we entered into an SSA and related agreements with ACME Communications, Inc. ("ACME") with respect to ACME's television stations KWBQ-TV, KRWB-TV, and KASY-TV in the Albuquerque-Santa Fe, NM market; WBDT-TV in the Dayton, OH market; and WCWF-TV (f/k/a WIWB-TV) in the Green Bay-Appleton, WI market. Additionally, we entered into a JSA with ACME for WBDT-TV and WCWF-TV. Concurrent with the execution of these agreements, we entered into an option agreement, giving us the right to acquire certain assets of the stations covered under these agreements, or giving ACME the right, starting in January 2013 and subject to certain conditions, including regulatory approval, to put any or all of those assets to us at the greater of a defined purchase price or the then-current fair market value.

        On August 26, 2010, we exercised our option to acquire WCWF-TV and certain assets of WBDT-TV. Because current FCC attribution rules restrict us from being the FCC licensee of WBDT-TV, we assigned our rights to acquire other WBDT-TV assets, including the FCC license, to WBDT. WBDT is wholly-owned by Vaughan Media, LLC ("Vaughan"), an unrelated third party. We have an option to purchase all of the membership interest in WBDT from Vaughan, or all of WBDT's assets related to WBDT-TV, that would be exercisable by us if the FCC ownership rules change.

        On May 20, 2011, we completed our acquisition of WCWF-TV. We acquired WCWF-TV as part of our multi-channel strategy, which enables us to expand our presence in our local markets beyond that of a single television station. This added channel and distribution capacity allows us to appeal to a wider audience and market of advertisers, while also providing us with economies of scale within our station operations.

        Also, on May 20, 2011, we completed the acquisition of certain station assets of WBDT-TV and entered into a JSA and SSA with WBDT. WBDT completed the acquisition of the other station assets of WBDT-TV, including the FCC license. In addition, we continue to provide certain services to ACME's television stations KWBQ-TV, KRWB-TV and KASY-TV. Utilizing the assets in our existing markets to support the operations of another television station creates economies of scale to further leverage our existing infrastructure.

        Total cash consideration for these acquisitions was $5.8 million, including $0.9 million contributed by WBDT, which was funded by a $0.9 million term loan from an unrelated third party as described further in Note 7—"Debt", and $0.6 million that was funded by us into an escrow account in 2010. As part of the consideration, we also issued to ACME 1,150,000 shares of our class A common stock having a fair value of $4.8 million.

        In connection with the acquisition, we recognized $0.4 million of goodwill. We also recognized $9.0 million of broadcast licenses and $1.0 million of finite-lived intangible assets. These finite-lived intangible assets are primarily comprised of network affiliation and retransmission consent agreements and have a weighted-average life of approximately 5 years. Additionally, we assumed net program obligations of $0.8 million pursuant to unfavorable contracts.

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 2—Acquisitions (Continued)

        The following table summarizes the final allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed by both us and WBDT (a consolidated VIE) in the acquisition (in thousands):

RMM

        On October 2, 2009, we acquired Red McCombs Media, LP ("RMM"), an online advertising and media services company based in Austin, TX. In connection with the acquisition we entered into an incentive compensation arrangement with certain key members of management. The arrangement provides payments to those employees based on a computation of EBIDTA generated by RMM during 2012. Our liability under this arrangement could range from zero to $24 million, and is payable in 2013. As of December 31, 2011, we have recognized a non-current liability of $5.0 million related to this incentive compensation arrangement.

Note 3—Discontinued Operations

WWHO-TV

        On October 21, 2011, we signed an agreement with Manhan Media, Inc. for the sale of certain assets of WWHO-TV, our CW affiliate serving Columbus, Ohio. Accordingly, we classified certain assets and liabilities associated with this station as held for sale on our consolidated balance sheets, and the operating results as discontinued operations in our consolidated statement of operations. The operating loss for the year ended December 31, 2011 includes an impairment charge of $1.6 million to reduce the carrying value of the broadcast license to fair value based on the final sale price. This transaction closed on February 16,

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 3—Discontinued Operations (Continued)

2012. The carrying amounts of the assets and liabilities of this station as of December 31, 2011 and 2010 were as follows (in thousands):

WUPW-TV

        On January 3, 2012, we entered into an agreement for the sale of substantially all of the assets of WUPW-TV to WUPW, LLC. This transaction is subject to certain closing conditions, including the approval of the FCC, and is expected to close during 2012. Accordingly, we classified certain assets and liabilities associated with this station as held for sale on our consolidated balance sheets, and the operating

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 3—Discontinued Operations (Continued)

results as discontinued operations in our consolidated statement of operations. The carrying amounts of the assets and liabilities of this station as of December 31, 2011 and 2010 were as follows (in thousands):

Banks Broadcasting

        On April 23, 2009, the Banks Broadcasting joint venture completed the sale of KNIN-TV, a CW affiliate in Boise, ID for $6.6 million to Journal Broadcast Corporation. As a result of the sale we received, on the basis of our economic interest in Banks Broadcasting, distributions of $0.4 million and $2.6 million during the years ended December 31, 2010 and 2009, respectively. As of December 31, 2010, all of the assets of the Banks Broadcasting joint venture had been liquidated.

        The operating loss for the year ended December 31, 2009 includes an impairment charge of $1.9 million to reduce the carrying value of broadcast licenses to fair value based on the final sale price of KNIN-TV of $6.6 million. Net loss included within discontinued operations for the year ended December 31, 2009 reflects our 50% share of net losses of the Banks Broadcasting joint venture, net of taxes, through the April 23, 2009 disposal date.

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 3—Discontinued Operations (Continued)

        The following presents summarized information for the discontinued operations as follows (in thousands):

Note 4—Investments

Joint Venture with NBCUniversal

        We own an approximate 20% interest in Station Venture Holdings, LLC ("SVH"), a joint venture with NBCUniversal Media, LLC ("NBCUniversal"), and account for our interest using the equity method as we do not have a controlling interest. SVH holds a 99.75% interest in Station Venture Operations, LP ("SVO"), which is the operating company that manages KXAS-TV and KNSD-TV, the television stations that comprise the joint venture. The following table presents summarized financial information of SVH and SVO (in thousands):

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 4—Investments (Continued)

        In 2008, we recorded an impairment charge that reduced the carrying value of our investment in SVH to $0. Subsequent to the reduction of the SVH carrying value to $0, and as a result of our guarantee of the debt financing provided by General Electric Capital Corporation ("GECC") of SVH as further described in Note 15—"Commitments and Contingencies", we continue to track our share of the income or loss of SVH, but currently are not recording such loss in our financial statements until, or unless, our proportionate share of SVH losses exceeds previously recognized impairment charges. When SVH generates income, we will begin recording our proportionate share of such income once it exceeds the operating losses not previously recognized in our financial statements.

        We recognize shortfall funding liabilities when it is probable and estimable that there will be a shortfall at the SVH level requiring funding from us, and only when we have reached or intend to reach a shortfall funding agreement covering the period for which we estimate debt service shortfalls to occur, as further described in Note 15—"Commitments and Contingencies".

        During the year ended December 31, 2009, we recognized a contingent liability of $6.0 million based on our estimate of amounts that we expected to loan to SVH pursuant to the original shortfall funding agreement and the 2010 shortfall funding agreement with NBCUniversal, as further described in Note 15—"Commitments and Contingencies".

        During the year ended December 31, 2010, pursuant to the shortfall funding agreements with NBCUniversal, we made shortfall loans in the aggregate principal amount of $4.1 million, representing our approximate 20% share of 2010 debt service shortfalls. Concurrent with our funding of the shortfall loans, NBCUniversal funded shortfall loans in the aggregate principal amounts of $15.9 million, in respect of its approximate 80% share of 2010 debt service shortfalls. As a result, as of December 31, 2010, we had a remaining shortfall liability of $1.9 million recognized for all probable and estimable shortfall loans to the joint venture.

        During the year ended December 31, 2011, pursuant to the shortfall funding agreement with General Electric Company ("GE") as further described in Note 15—"Commitments and Contingencies", we funded shortfall loans in the aggregate principal amount of $2.5 million, representing our approximate 20% share of 2011 debt service shortfalls, and GE funded shortfall loans in the aggregate principal amount of $9.7 million, representing its approximate 80% share in 2011 debt service shortfalls.

        Prior to the issuance of these financial statements, joint venture management provided us with a final 2012 budget. Also, during the year ended December 31, 2011, NBCUniversal publicly discussed its intent to secure additional retransmission consent fees for the NBC owned television stations, which would include the joint venture stations that comprise SVO.

        Based on that information, we believe the joint venture's operating results in 2012 will improve as a result of, among other things, the upcoming 2012 election cycle, and NBC's broadcast of the 2012 Summer Olympics and Superbowl XLVI. The joint venture's 2012 budget calls for capital investments at the joint venture stations that will largely offset the expected 2012 increases in operating cash flows. As a result, we expect the joint venture to require additional shortfall loans in 2012 and into 2013. While there can be no assurances, we believe, that beginning in 2013, operating results will improve as a result of further economic recovery, forecasted growth in retransmission consent fees, and further growth in digital revenues.

        On March 5, 2012, we entered into a shortfall funding agreement with GE covering the period from April 2, 2012 through April 1, 2013 as further described in Note 15—"Commitments and Contingencies".

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 4—Investments (Continued)

        As of December 31, 2011, we estimate our approximate 20% share of debt service shortfalls to be $4.1 million for 2012 and into 2013. We believe that cash shortfalls beyond the amounts currently accrued are not probable. However, our prospective shortfall obligations could vary from our estimate based upon changes in the performance of the joint venture stations and any changes to the proportionate share of each party's debt service shortfall. During the year ended December 31, 2011, based on our estimate of our probable shortfall obligations during 2011, 2012 and into 2013, we recognized a contingent liability of $4.7 million for the amounts that we expect to loan to SVH pursuant to the shortfall funding agreements with GE, as further described in Note 15—"Commitments and Contingencies".

        Because of uncertainty surrounding the joint venture's ability to repay shortfall loans, we concluded that it was more likely than not that the amounts recognized during the years ended December 31, 2011 and 2009 for accrued shortfall loans of $4.7 million and $6.0 million, respectively, will not be recovered within a reasonable period of time. Accordingly, we recognized charges of $4.7 million and $6.0 million, to reflect the impairment of the shortfall loans, which were classified as share of loss in equity investments in our consolidated statement of operations, during the years ended December 31, 2011 and 2009, respectively. Therefore, the amounts receivable under the shortfall loans, and all accrued interest due from the joint venture, are carried at zero on our consolidated balance sheets. Should there be sufficient evidence in the future to suggest that collectability of the shortfall loans and accrued interest is reasonably certain, we would reverse the previously recognized impairment charges, reestablish notes receivable for all previously funded and accrued shortfall loans to the joint venture, and establish accrued interest receivable for all previously funded shortfall loans to the joint venture. For further information on recognition of shortfall funding liabilities, see Note 15—"Commitments and Contingencies".

        The shortfall loans bear interest at 8% annually; payable quarterly in arrears subject to certain conditions, and do not mature prior to the maturity of the Credit Agreement with GECC in 2023. Under the terms of the shortfall loan notes, payments of principal and interest are allocated between us and NBCUniversal or GE, as applicable, based on the respective economic interests in the joint venture, and are applied first toward the principal amount owed under the shortfall loans, and second toward the payment of accrued interest. Principal and interest payments are payable only if the joint venture has available cash on hand in excess of amounts required by the joint venture to fund its quarterly interest payments on the debt financing provided by GECC as further described in Note 15—"Commitments and Contingencies".

Note 5—Property and Equipment

        Property and equipment consisted of the following (in thousands):

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 5—Property and Equipment (Continued)

        We recorded depreciation expense of $26.2 million, $27.0 million and $28.6 million for the years ended December 31, 2011, 2010 and 2009, respectively.

        In 2004, Sprint Nextel Corporation ("Nextel") agreed to relocate its use of airwaves to end interference between its signals and the wireless signals used by public safety agencies. As part of this agreement, the FCC granted Nextel the right to a certain spectrum within the 1.9 GHz band that was used by television broadcasters for electronic news gathering. As part of this arrangement, Nextel entered into agreements with several of our stations to exchange analog equipment for comparable digital equipment. During the years ended December 31, 2010 and 2009, we received $0.1 million and $5.0 million, respectively, of equipment pursuant to this exchange. As equipment was exchanged and placed in service, we recorded a gain to the extent that the fair market value of the equipment received exceeded the carrying amount of the equipment relinquished. For the years ended December 31, 2010 and 2009, we recognized a gain of $3.7 million and $5.9 million, respectively, related to this equipment, which is recorded in loss (gain) from asset dispositions in our consolidated statement of operations.

Note 6—Intangible Assets

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

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 6—Intangible Assets (Continued)

        We recorded amortization expense of $1.2 million, $1.5 million and $0.6 million for the years ended December 31, 2011, 2010 and 2009, respectively.

        The following table summarizes the projected aggregate amortization expense for the next five years and thereafter (in thousands):

        There were no events during 2011 and 2010 to warrant the performance of an interim impairment test of our indefinite-lived intangible assets. We recorded a $1.6 million impairment charge related to discontinued operations for the year ended December 31, 2011.

        We recorded an impairment charge of $39.5 million during the second quarter of 2009 that included an impairment to the carrying values of our broadcast licenses of $36.8 million, relating to 24 of our television stations; and an impairment to the carrying values of our goodwill of $2.7 million, relating to two of our television stations. We tested our indefinite-lived intangible assets for impairment at June 30, 2009, between the required annual tests, because we believed events had occurred and circumstances changed that would more likely than not reduce the fair value of our broadcast licenses and goodwill below their carrying amounts. The need for an impairment analysis at June 30, 2009 was triggered by the continued decline in advertising revenue at certain of our stations in excess of our original plan, due to the economic downturn that resulted in downward adjustments to their respective forecasts.

        The changes in the carrying amount of goodwill for the years ended December 31, 2011 and 2010, respectively, are as follows (in thousands):

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 7—Long-term Debt

        Debt consisted of the following (in thousands):

Senior Secured Credit Facility

        On October 26, 2011, we entered into a credit agreement governing our senior secured credit facility with JP Morgan Chase Bank, N.A. ("JPMorgan"), Administrative Agent, and the banks and other financial institutions party thereto. Our senior secured credit facility is comprised of a six-year, $125 million term loan and a five-year, $75 million revolving credit facility, and bears interest at a rate based on, at our option, either a) the LIBOR interest rate, or b) the ABR rate, which is an interest rate that is equal to the greatest of (i) the Prime Rate, (ii) the Federal Funds Effective Rate plus ¹/2 of 1 percent, and (iii) the one-month LIBOR rate plus 1%. In addition, the rate we select also bears an applicable margin based upon our Consolidated Senior Secured Leverage Ratio, currently set at 3.00% and 2.00% for LIBOR based loans and ABR rate loans, respectively. Lastly, the unused portion of the revolving credit facility is subject to a commitment fee based upon our Consolidated Senior Secured Leverage Ratio, currently set at 0.50% for both LIBOR based loans and ABR rate loans. Concurrent with the closing of our senior secured credit facility, we terminated the credit agreement governing our 2009 senior secured credit facility.

        The terms of the credit agreement provide for customary representations and warranties, affirmative and negative covenants (including financial covenants), and events of default. The credit agreement also provides for the payment of customary fees and expenses by us. The credit facilities available under the the credit agreement can be accelerated upon events of default and require the term loans to be prepaid under certain circumstances with amounts determined by reference to the proceeds from certain asset sales (subject to reinvestment rights), the incurrence of certain indebtedness and a percentage of annual excess cash flow.

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 7—Long-term Debt (Continued)

        The credit facilities are senior secured obligations and rank senior in right of payment to our existing and future subordinated indebtedness. LIN TV and certain of our existing, or hereafter created or acquired, domestic subsidiaries guarantee the credit facilities on a senior basis. LIN Television and each of our subsidiary guarantors have granted a security interest in all or substantially all of our assets to secure the obligations under senior secured credit facility, and LIN TV Corp. has granted a security interest in its capital stock of LIN Television to secure such obligations.

        Our senior secured credit facility permits us to prepay loans and to permanently reduce the revolving credit commitments, in whole or in part, at any time. We are also obligated to make mandatory quarterly principal payments. In addition, our senior secured credit facility restricts the use of proceeds from asset sales not reinvested in our business and the use of proceeds from the issuance of debt (subject to certain exceptions), which must be used for mandatory prepayments of principal of the term loans.

        The credit agreement governing our senior secured credit facility also requires on an annual basis, following the delivery of our year-end financial statements, and commencing after the year ended December 31, 2012, mandatory prepayments of principal of the term loans based on a computation of excess cash flow for the preceding fiscal year, as more fully described in the credit agreement.

        On December 21, 2011, we and JPMorgan as Lender and Administrative Agent, signed an incremental term loan activation notice creating an incremental term loan facility pursuant to our existing credit agreement dated October 26, 2011, by and among us, JPMorgan, as Administrative Agent, and the banks and other financial institutions party thereto. The incremental term loan facility is a seven-year, $260 million term loan facility and is subject to the terms of our credit agreement. Borrowings under the incremental term loan facility were used (i) to pay the call price for our redemption of all of our remaining Senior Subordinated Notes, as described below, and (ii) to pay accrued interest, fees and expenses associated with the redemption. Borrowings under the incremental term loan facility bear interest at a rate based, at our option, on an adjusted LIBOR rate, plus an applicable margin of 3.75%, or an adjusted Base Rate, plus an applicable margin of 2.75%; provided that the adjusted LIBOR rate shall at no time be less than 1.25% per annum.

        The incremental term loan facility is a senior secured obligation and ranks senior in right of payment to our existing and future subordinated indebtedness. The incremental term loan facility is guaranteed and secured on the same basis as the other credit facilities under the credit agreement. If we do not refinance, redeem or discharge our Senior Notes on or prior to January 15, 2018, then, in such event, the maturity of the incremental term loan facility will be accelerated from December 21, 2018 to January 15, 2018.

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 7—Long-term Debt (Continued)

        The following table summarizes certain key terms of our senior secured credit facility (in thousands):

2009 Senior Secured Credit Facility

        Borrowings under our 2009 senior secured credit facility bore an interest rate based on, at our option, either a) the LIBOR interest rate, or b) the ABR rate, which is an interest rate that is equal to the greatest of (i) the Prime Rate, (ii) the Federal Funds Effective Rate plus ¹/2 of 1 percent, or (iii) the one-month LIBOR rate plus 1%. In addition, the rate we selected bore an applicable margin rate of 3.75% or 2.75% for LIBOR based loans and ABR rate loans, respectively. Lastly, the unused portion of the revolving credit facility was subject to a commitment fee of 0.50% depending on our consolidated leverage ratio.

        During the year ended December 31, 2011, we paid the remaining balance of $9.6 million on the term loans outstanding under the 2009 senior secured credit facility. Additionally, our available revolving credit commitments decreased from $76.1 million to $48.7 million, based on a computation of excess cash flow for the fiscal year ended December 31, 2010. As a result, we recorded a loss on extinguishment of debt of $0.2 million during the year ended December 31, 2011, consisting of a write-down of deferred financing fees related to the revolving credit facility and term loans. Additionally, during the year ended December 31, 2010, we used proceeds from the issuance of our Senior Notes to repay $148.9 million of principal on our revolving credit facility and $45.9 million of principal on our term loans, plus accrued interest, pursuant to the mandatory prepayment terms of the credit agreement governing the terms of our 2009 senior secured credit facility. As a result, during the year ended December 31, 2010, we recorded a loss on extinguishment of debt of $2.7 million, consisting of a write-down of deferred financing fees related to the revolving credit facility and term loans.

8³/8% Senior Notes

        Our Senior Notes are unsecured but rank equally in right of payment with all senior secured indebtedness and senior to all subordinated indebtedness.

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 7—Long-term Debt (Continued)

        The indenture governing our Senior Notes contains covenants limiting our ability and the ability of our restricted subsidiaries to, among other things, incur certain additional indebtedness and issue preferred stock; make certain dividends, distributions, investments and other restricted payments; sell certain assets; agree to any restrictions on the ability of restricted subsidiaries to make payments to us; create certain liens; merge, consolidate or sell substantially all of our assets; and enter into certain transactions with affiliates. These covenants are subject to certain exceptions and qualifications. The indenture also has change of control provisions which may require our Company to purchase our Senior Notes at a price equal to 101% of the principal amount thereof, together with accrued and unpaid interest. Additionally, if we sell assets under certain circumstances, we will be required to make an offer to purchase our Senior Notes at their face amount, plus accrued and unpaid interest, if any, through the purchase date.

6¹/2% Senior Subordinated Notes and 6¹/2% Senior Subordinated Notes—Class B

        During the year ended December 31, 2011, we redeemed $109.1 million of our 6¹/2% Senior Subordinated Notes, and $55.9 million of our 6¹/2% Senior Subordinated Notes—Class B. The redemption of these notes, at par, was funded in part by proceeds from the term loan, the revolving credit facility and cash on hand. As a result of this redemption, we recorded a loss on extinguishment of debt of $1.5 million associated with a write-down of deferred financing fees and unamortized discount to our consolidated statement of operations.

        On December 21, 2011, we issued notices to redeem all of the remaining Senior Subordinated Notes at par, plus accrued and unpaid interest through the redemption date. We used proceeds from the incremental term loan under the new senior secured credit facility as described above, and cash on hand to fund the aggregate redemption price. On December 21, 2011, we irrevocably deposited with the trustee the full amount of the redemption price of our Senior Subordinated Notes. As of December 31, 2011, the $255.2 million irrevocable deposit was classified as restricted cash in our consolidated balance sheets, and $251.0 million of our Senior Subordinated Notes, net of a discount of $1.2 million, remained outstanding. The redemption was completed on January 20, 2012, and as of that date, there were no Senior Subordinated Notes outstanding. As a result of this redemption, we expect to record a loss on extinguishment of debt of $2.1 million associated with a write-down of deferred financing fees and unamortized discount to our consolidated statement of operations during the three months ended March 31, 2012.

Other Debt

        During the year ended December 31, 2011, WBDT, a consolidated VIE, entered into a term loan with an unrelated third party in an original principal amount of $0.9 million to fund a portion of the purchase price for the acquisition of certain assets of WBDT-TV. This term loan matures in equal quarterly installments through May 2016. LIN Television fully and unconditionally guarantees this loan.

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 7—Long-term Debt (Continued)

Repayment of Principal

        The following table summarizes scheduled future principal repayments on our debt agreements (in thousands):

        The fair values of our long-term debt are estimated based on quoted market prices for the same or similar issues, or based on the current rates offered to us for debt with the same remaining maturities. The carrying amounts and fair values of our long-term debt were as follows (in thousands):

Note 8—Derivative Financial Instruments

        We have historically used derivative financial instruments in the management of our interest rate exposure for our long-term debt. In accordance with our interest rate risk management policy, we do not enter into derivative instruments unless there is an underlying exposure, and we do not enter into derivative financial instruments for speculative trading purposes.

        During the second quarter of 2006, we entered into a contract to hedge a notional amount of the declining balances of our term loans under our 2009 senior secured credit facility (the "2006 interest rate hedge") to mitigate changes in our cash flows resulting from fluctuations in interest rates. The 2006 interest rate hedge effectively converted the floating LIBOR rate-based-payments to fixed payments at 5.33% plus the applicable margin rate calculated under our 2009 senior secured credit facility, which we terminated on October 26, 2011 concurrent with our entry into our new senior secured credit facility.

        The 2006 interest rate hedge was historically designated as a cash flow hedge, however, as a result of a repayment of $45.9 million of principal on our term loans under our 2009 senior secured credit facility as further described in Note 7—"Debt", the 2006 interest rate hedge ceased to be highly effective in hedging the variable rate cash flows. Since the hedge ceased to be highly effective in hedging the variable rate cash flows, all changes in fair value have been recorded in our consolidated statement of operations. Because the hedge ceased to be highly effective, we recorded a charge of $3.6 million for the portion of the fair

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 8—Derivative Financial Instruments (Continued)

value recognized in accumulated other comprehensive loss to our consolidated statement of operations for the year ended December 31, 2010. During the year ended December 31, 2009, we recognized a gain on derivative instruments of $(0.2) million in our consolidated statement of operations for ineffectiveness related to this hedge.

        The 2006 interest rate hedge expired on November 4, 2011. Accordingly, as of December 31, 2011, there is no amount related to the 2006 interest rate hedge included in our consolidated balance sheets. As of December 31, 2010, the fair value of the 2006 interest rate hedge liability was $2.0 million and is included in accrued expenses and other liabilities in our consolidated balance sheets. The fair value was calculated by using observable inputs (Level 2) prescribed by the three-level fair value hierarchy, which is calculated using the discounted expected future cash outflows from a series of three-month LIBOR strips through November 4, 2011, the same scheduled maturity date as our 2009 senior secured credit facility.

        As of December 31, 2011, we have a derivative outstanding with a fair value of zero as further described in Note 2—"Acquisitions".

        The following table summarizes our derivative activity (in thousands):

Note 9—Stock-Based Compensation

        We have several stock-based compensation plans, including our 1998 Option Plan, the Amended and Restated 2002 Stock Plan and the Third Amended and Restated 2002 Non-Employee Director Stock Plan (collectively, the "Stock Plans"), that permit us to grant non-qualified options in our class A common stock or restricted stock units, which convert into our class A common stock upon vesting, to certain directors, officers and key employees of our Company. Additionally, we have an Employee Stock Purchase Plan ("ESPP") that permits employees to purchase shares of our class A common stock at a discount as further described below.

        Options granted under the Stock Plans vest over a four-year service period, unless otherwise designated by the Compensation Committee upon grant. Options expire ten years from the date of grant. We issue new shares of our class A common stock when options are exercised or from shares that we repurchased pursuant to our Board authorized share repurchase program as further described in Note 12—"Stockholders' Equity". Restricted stock unit awards vest over a five-year service period, unless otherwise designated by the Compensation Committee upon grant. There were 6,148,752 shares authorized for grant under the various Stock Plans and 1,785,750 shares available for future grant as of December 31, 2011. Both the shares authorized and shares available exclude 1,552,983 shares under plans in effect prior to 2002 from which we do not intend to re-grant and consider unavailable for future grants.

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 9—Stock-Based Compensation (Continued)

        The following table presents the stock-based compensation expense included in our consolidated statements of operations as follows (in thousands):

        We did not capitalize any stock-based compensation expense for the years ended December 31, 2011, 2010 and 2009.

        We have not yet recognized compensation expense relating to unvested employee stock options and restricted stock unit awards of $2.8 million and $9.9 million, respectively, which will be recognized over a weighted-average future period of approximately 1.3 years and 2.5 years, respectively.

        During the year ended December 31, 2011, we received $0.2 million from the exercise of stock options and $0.6 million from the purchase of our class A common stock pursuant to our ESPP.

Stock Options

        The following table provides additional information regarding our stock options for the year ended December 31, 2011 as follows (in thousands, except per share data):

        As of December 31, 2011, the weighted-average remaining contractual life of the options outstanding and the options exercisable was 8.0 years and 7.6 years, respectively. Additionally, as of December 31, 2011, the aggregate intrinsic value of the options outstanding and the options exercisable was $6.4 million and $3.8 million, respectively. The intrinsic value in the table above represents the total pre-tax intrinsic value based on our closing price as of December 31, 2011, which would have been received by the option holders had all option holders exercised their options and immediately sold their shares on that date.

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 9—Stock-Based Compensation (Continued)

        The fair value of each stock option grant or modification is estimated on the date of grant or modification using a Black-Scholes valuation model, which incorporates the following assumptions:

        On June 2, 2009, we completed an exchange offer which enabled employees and non-employee directors to exchange some or all of their outstanding options to purchase shares of our class A common stock, for new options to purchase shares of our class A common stock, on a one for one basis. A total of 257 employees participated in the exchange, in which options to purchase an aggregate of 2,931,285 shares of our class A common stock were exchanged. The new options have an exercise price of $1.99 per share, equal to the closing price per share of our class A common stock on June 2, 2009. The new stock options vest ratably over three years. We recognized stock-based compensation expense for this modification to our stock option agreements of $0.4 million, $0.8 million and $0.7 million for the years ended December 31, 2011, 2010 and 2009, respectively. We expect to record an additional $0.1 million of stock-based compensation expense for this modification during 2012.

Restricted Stock Unit Awards

        The following table provides additional information regarding the restricted stock unit awards for the year ended December 31, 2011 (in thousands, except per share data):

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 9—Stock-Based Compensation (Continued)

        The following table provides further information for both our restricted stock unit and stock option awards (in thousands):

Employee Stock Purchase Plan

        Under the terms of our 2010 ESPP, our eligible employees may have up to 10% of eligible compensation deducted from their pay to purchase shares of our class A common stock. The purchase price of each share is 85% of the average of the high and low per share trading price of our class A common stock on the NYSE on the last trading day of each month during the offering period. There were 350,000 shares authorized for grant under this plan and there were 81,230 shares available for future grant as of December 31, 2011. During the year ended December 31, 2011 and 2010, employees purchased 187,350 and 81,420 shares, respectively, at a weighted-average price of $3.38 and $3.92, respectively.

Note 10—Fair Value Measurements

        We record the fair value of certain financial assets and liabilities on a recurring basis. The following table summarizes the financial assets and liabilities measured at fair value in the accompanying consolidated financial statements using the prescribed three-level fair value hierarchy as of December 31, 2011 and 2010 (in thousands):

        The fair value of our deferred compensation related investments is based on the cash surrender values of life insurance policies underlying our supplemental income deferral plan, as well as the fair value of the investments selected by employees. The fair value of our deferred compensation related liabilities is

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 10—Fair Value Measurements (Continued)

determined based on the fair value of the investments selected by employees. For a description of how the fair value of our 2006 interest rate hedge was determined, see Note 8—"Derivative Financial Instruments."

        The following table details the change in fair value of our Level 3 liability for the year ended December 31, 2010 (in thousands):

        The equity value shortfall amount detailed in the table above is a liability that was incurred in connection with the acquisition of RMM on October 2, 2009 because the number of shares of class A common stock issued by us to the sellers was subject to an adjustment in the event that the value of the equity consideration was less than $4.5 million as of the six month anniversary of the acquisition (such difference, the equity value shortfall amount).

Note 11—Retirement Plans

401(k) Plan

        We provide a defined contribution plan ("401(k) Plan") for eligible employees. Effective January 1, 2010, we began making a 3% non-elective contribution for all eligible employees, which vests 100% after two years of service. Historically, we made contributions to the 401(k) Plan on behalf of employee groups that were not covered by our defined benefit retirement plan matching 50% of the employee's contribution up to 6% of the employee's total annual compensation. These contributions vested in 20% annual increments until the employee was 100% vested after five years of service. Company contributions to our 401(k) Plan were suspended during 2009 and were resumed effective January 1, 2010. We contributed $3.6 million, $3.5 million and $0.5 million to the 401(k) Plan in the years ended December 31, 2011, 2010 and 2009, respectively. Effective July 1, 2010, we also made available to certain employees, including our executive officers, the LIN Television Corporation Supplemental Income Deferral Plan. This plan provides benefits to highly compensated employees in circumstances in which the maximum limits established under the Employee Retirement Income Security Act of 1974 ("ERISA") and the Internal Revenue Code prevent them from receiving Company contributions. We contributed $0.2 million and $0.4 million to this plan during the years ended December 31, 2011 and 2010, respectively.

Retirement Plan

        We have historically provided a defined benefit retirement plan to our employees who did not receive matching contributions from our Company to their 401(k) Plan accounts. Our defined benefit plan was a non-contributory plan under which we made contributions either to: a) traditional plan participants based on periodic actuarial valuations, which are expensed over the expected average remaining service lives of current employees; or b) cash balance plan participants based on 5% of each participant's eligible compensation.

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 11—Retirement Plans (Continued)

        Effective April 1, 2009, this plan was frozen and we do not expect to make additional benefit accruals to this plan, however we continue to fund our existing vested obligations. As a result of this action, during the year ended December 31, 2009, we recorded a net curtailment gain that included a $0.4 million charge related to prior service cost and a gain to our projected benefit obligation of $4.0 million as a result of the reduction of future compensation increases.

        We contributed $5.4 million, $5.4 million and $0.6 million to our pension plan during the years ended December 31, 2011, 2010 and 2009, respectively. We anticipate contributing $7.5 million to this plan in 2012.

        We record the unfunded status of our defined benefit plan as a liability. The plan assets and benefit obligations of our defined benefit plan are recorded at fair value as of December 31, 2011. Information regarding the change in the projected benefit obligation, the accumulated benefit obligation and the change in the fair value of plan assets are as follows (in thousands):

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 11—Retirement Plans (Continued)

        The following table includes the pension related accounts recognized on our consolidated balance sheets and the components of accumulated other comprehensive loss related to the net periodic pension benefit costs as follows (in thousands):

        The total net loss of $33.0 million, which is net of tax, relates to deferred actuarial losses from changes in discount rates, differences between actual and assumed asset returns, and differences between actual and assumed demographic experience (rates of turnover, retirement rates, mortality rates and prior to the plan freeze, rates of compensation increases). During 2012, we expect to amortize net losses of $1.7 million, which are included in accumulated other comprehensive loss, net of tax, as of December 31, 2011.

        Components of net periodic pension benefit cost were (in thousands):

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 11—Retirement Plans (Continued)

        Our expected future pension benefit payments for the next 10 years are as follows (in thousands):

        Weighted-average assumptions used to estimate our pension benefit obligations and to determine our net periodic pension benefit cost are as follows:

        For the discount rate for the year ended December 31, 2011, we used a custom bond modeler that develops a hypothetical portfolio of high quality corporate bonds, rated AA- and above by Standard & Poor's, that could be purchased to settle the obligations of the plan. The yield on this hypothetical portfolio represents a reasonable rate to value our plan liability. Prior to 2011, we used the Citigroup Pension Discount Curve to aid in the selection of our discount rate, which we believe reflects the weighted rate of a theoretical high quality bond portfolio consistent with the duration of the cash flows related to our pension liability.

        We considered the current levels of expected returns on a risk-free investment, the historical levels of risk premium associated with each of our pension asset classes, the expected future returns for each of our pension asset classes and then weighted each asset class based on our pension plan asset allocation to derive an expected long-term return on pension plan assets. During the year ended December 31, 2011, our actual rate of return on plan assets was 4.04%.

        Our investment objective is to achieve a consistent total rate-of-return that will equal or exceed our actuarial assumptions and to equal or exceed the benchmarks that we use for each of our pension plan

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 11—Retirement Plans (Continued)

asset classes. The following asset allocation is designed to create a diversified portfolio of pension plan assets that is consistent with our target asset allocation and risk policy:

        The following table summarizes our pension plan assets measured at fair value using the prescribed three-level fair value hierarchy as of December 31, 2011 and 2010 (in thousands):

 

        The guaranteed deposit account fair value is determined by multiplying the balance in the account by an established interest rate. The commingled pools, U.S. and International stock funds and U.S. bond funds consist of various funds that are valued at the net asset value of units held by the plan at year-end as

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 11—Retirement Plans (Continued)

determined by the custodian, based on fair value of the underlying securities. These methods may produce a fair value calculation that may not be indicative of net realizable value or reflective of future values. Furthermore, while we believe these valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine fair value of certain financial instruments could result in different fair value measurement as of the reporting date.

        The following table details the change in fair value of the Level 3 investments for the years ended December 31, 2011 and 2010 (in thousands):

Note 12—Stockholders' Equity

        On November 7, 2011, our Board of Directors approved a stock repurchase program that authorizes us to repurchase up to $25 million of our class A common stock over a 12 month period. The class A common stock acquired through the repurchase program will be held as treasury shares and may be used for general corporate purposes, including reissuances in connection with acquisitions, stock option exercises, or other employee and director stock plans. Pursuant to this authorization, during the year ended December 31, 2011, we repurchased approximately 0.8 million shares of our class A common stock on the open market for an aggregate purchase price of $2.7 million.

        Our class B common stock is convertible into an equal number of shares of our class A common stock in various circumstances. During the year ended December 31, 2011, approximately 0.1 million shares of our class B common stock were converted into class A common stock. During the year ended December 31, 2010, none of our class B common stock was converted into class A common stock.

        The balance of related after-tax components comprising accumulated other comprehensive loss are summarized below (in thousands):

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 13—Restructuring

        During the years ended December 31, 2011, 2010 and 2009, we recorded restructuring charges of $0.7 million, $3.3 million and $0.5 million, respectively, as a result of the consolidation of certain activities at our stations and our corporate headquarters. During the years ended December 31, 2011, 2010 and 2009, we made cash payments of $1.1 million, $2.4 million and $0.5 million related to these restructuring actions. We expect to make cash payments of $0.5 million related to these restructuring actions during 2012.

        During 2008, we effected a restructuring that included a workforce reduction and the cancellation of certain syndicated television program contracts. The total charge for the plan was $12.9 million, including $4.3 million for a workforce reduction of 144 employees and $8.6 million for the cancellation of the contracts. We made cash payments of $0.1 million and $9.0 million during the years ended December 31, 2010 and 2009, respectively, related to these restructuring activities. During the year ended December 31, 2010, we recorded a restructuring benefit of $0.2 million related to changes in the estimated cash payments.

        The activity for these restructuring charges are as follows (in thousands):

Note 14—Related Party Transactions

        During the year ended December 31, 2010, we acquired a non-controlling investment in an interactive service provider that hosts our web sites for $2.0 million. During the years ended December 31, 2011, 2010 and 2009, we incurred charges of $2.4 million, $1.9 million and $0.8 million, respectively, and made cash payments of $2.2 million, $2.6 million and $1.4 million, respectively, to this provider for web hosting services and web site development and customization.

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 15—Commitments and Contingencies

Commitments

        We lease land, buildings, vehicles and equipment pursuant to non-cancelable operating lease agreements and we contract for general services pursuant to non-cancelable operating agreements that expire at various dates through 2036. In addition, we have entered into commitments for future syndicated entertainment and sports programming. Future payments for these non-cancelable operating leases and agreements, and future payments associated with syndicated television programs as of December 31, 2011 are as follows (in thousands):

        Rent expense, resulting from operating leases, was $1.5 million, $1.1 million and $1.4 million for the years ended December 31, 2011, 2010 and 2009, respectively.

Contingencies

GECC Note

        GECC provided debt financing for a joint venture between NBCUniversal and us, in the form of an $815.5 million non-amortizing senior secured note due 2023 bearing interest at an initial rate of 8% per annum until March 1, 2013 and 9% per annum thereafter. The GECC Note is an obligation of the joint venture. We have a 20% equity interest in the joint venture and NBCUniversal has the remaining 80% equity interest, in which we and NBCUniversal each have a 50% voting interest. NBCUniversal operates two television stations, KXAS-TV, an NBC affiliate in Dallas, and KNSD-TV, an NBC affiliate in San Diego, pursuant to a management agreement. LIN TV has guaranteed the payment of principal and interest on the GECC Note.

        In January 2011, Comcast Corporation acquired control of the business of NBCUniversal and now owns and controls 51% of NBCUniversal, LLC, while a wholly-owned subsidiary of General Electric Company ("GE") owns the remaining 49%. GECC remains a wholly-owned subsidiary of GE.

        In light of the adverse effect of the recent economic downturn on the joint venture's operating results, we entered into an agreement with NBCUniversal in 2009, which covered the period from March 6, 2009 through April 1, 2010 and in 2010 we entered into a second agreement, which covered the period from April 2, 2010 through April 1, 2011. These agreements provided that: (i) we and NBCUniversal waived the

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 15—Commitments and Contingencies (Continued)

requirement that the joint venture maintain debt service reserve cash balances of at least $15 million; (ii) the joint venture would use a portion of its existing debt service reserve cash balances to fund interest payments on the GECC Note in 2009 and 2010; (iii) NBCUniversal agreed to defer its receipt of 2008, 2009 and 2010 management fees; and (iv) we agreed that if the joint venture does not have sufficient cash to fund interest payments on the GECC Note through April 1, 2011, we and NBCUniversal would each provide the joint venture with a shortfall loan on the basis of our percentage of economic interest in the joint venture.

        During the year ended December 31, 2010, pursuant to the shortfall funding agreements with NBCUniversal, we made shortfall loans in the aggregate principal amount of $4.1 million, representing our approximate 20% share of 2010 debt service shortfalls. Concurrent with our funding of the shortfall loans, NBCUniversal funded shortfall loans in the aggregate principal amounts of $15.9 million, in respect of its approximate 80% share of 2010 debt service shortfalls.

        On March 14, 2011, we and GE entered into an agreement (the "2011 Shortfall Funding Agreement") covering the period from April 2, 2011 through April 1, 2012. Under the terms of the 2011 Shortfall Funding Agreement, we agreed that if the joint venture does not have sufficient cash to fund interest payments on the GECC Note through April 1, 2012, we and GE would each provide the joint venture with a shortfall loan. Shortfall loans funded by LIN under the 2011 Shortfall Funding Agreement were calculated on the basis of our percentage of economic interest in the joint venture, and GE's share of shortfall loans were calculated on the basis of NBCUniversal's percentage of economic interest in the joint venture. Solely to enable the joint venture with NBCUniversal to obtain shortfall loans from GE, the joint venture (i) amended its credit agreement with GECC, (ii) amended the LLC Agreement governing the operation of the joint venture, and (iii) received the consent of Comcast Corporation to the terms and conditions on which GE provides its proportionate share of any joint venture debt service shortfall. NBCUniversal acknowledged and agreed to the terms of the 2011 Shortfall Funding Agreement.

        During the year ended December 31, 2011, pursuant to the shortfall funding agreement with GE, we funded shortfall loans in the aggregate principal amount of $2.5 million, representing our approximate 20% share of 2011 debt service shortfalls, and GE funded shortfall loans in the aggregate principal amount of $9.7 million, representing its approximate 80% share in 2011 debt service shortfalls.

        Because of anticipated future cash shortfalls at the joint venture, on March 5, 2012, we and GE entered into an agreement (the "2012 Shortfall Funding Agreement") covering the period from April 2, 2012 through April 1, 2013. Under the terms of the 2012 Shortfall Funding Agreement, we agreed that if the joint venture does not have sufficient cash to fund interest payments on the GECC Note through April 1, 2013, we and GE would each provide the joint venture with a shortfall loan. Any shortfall loans funded by us under the 2012 Shortfall Funding Agreement will be calculated on the basis of our percentage of economic interest in the joint venture, and GE's share of shortfall loans will be calculated on the basis of NBCUniversal's percentage of economic interest in the joint venture. GE's obligation to fund shortfall loans under the 2012 Shortfall Funding Agreement is conditioned upon the receipt of the consent of Comcast Corporation to the terms and conditions on which GE provides its proportionate share of any shortfall; provided that Comcast's consent may not be unreasonably withheld. NBCUniversal has acknowledged and agreed to the terms of the 2012 Shortfall Funding Agreement.

        Under the terms of the joint venture's TV Master Service Agreement with NBCUniversal, management fees owed by the joint venture to NBCUniversal will continue to accrue, but are not payable if any existing joint venture shortfall loans remain outstanding.

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 15—Commitments and Contingencies (Continued)

        We recognize shortfall funding liabilities to the joint venture on our consolidated balance sheets when those liabilities become both probable and estimable. These liabilities become probable and estimable when joint venture management provides us with budget or forecast information of operating cash flows and working capital needs indicating that a debt service shortfall is probable to occur, and for periods beyond joint venture management's forecast, we develop our own internal estimates of debt service shortfalls. Additionally, we accrue shortfall funding liabilities only when we have reached or intend to reach a shortfall funding agreement covering the period for which we estimate debt service shortfalls to occur.

        Prior to the issuance of these financial statements, joint venture management provided us with a final 2012 budget. Also, during the year ended December 31, 2011, NBCUniversal publicly discussed its intent to secure additional retransmission consent fees for the NBC owned television stations, which would include the joint venture stations that comprise SVO.

        Based on that information, we believe the joint venture's operating results in 2012 will improve as a result of, among other things, the upcoming 2012 election cycle, and NBC's broadcast of the 2012 Summer Olympics and Superbowl XLVI. The joint venture's 2012 budget calls for capital investments at the joint venture stations that will largely offset the expected 2012 increases in operating cash flows. As a result, we expect the joint venture to require additional shortfall loans in 2012 and into 2013. While there can be no assurances, we believe, that beginning in 2013, operating results will improve as a result of further economic recovery, forecasted growth in retransmission consent fees, and further growth in digital revenues.

        As of December 31, 2011, we estimate our approximate 20% share of debt service shortfalls to be $4.1 million for 2012 and into 2013. We believe that cash shortfalls beyond the amounts currently accrued are not probable. However, our prospective shortfall obligations could vary from our estimate based upon changes in the performance of the joint venture stations and any changes to the proportionate share of each party's debt service shortfall. During the year ended December 31, 2011, based on our estimate of our probable shortfall obligations during 2011, 2012 and into 2013, we recognized a contingent liability of $4.7 million for the amounts that we expect to loan to SVH pursuant to the shortfall funding agreements with GE.

        Because of uncertainty surrounding the joint venture's ability to repay shortfall loans, we concluded that it was more likely than not that the amounts recognized during the years ended December 31, 2011 and 2009 for accrued shortfall loans of $4.7 million and $6.0 million, respectively, will not be recovered within a reasonable period of time. Accordingly, we recognized charges of $4.7 million and $6.0 million, to reflect the impairment of the shortfall loans, which were classified as share of loss in equity investments in our consolidated statement of operations, during the years ended December 31, 2011 and 2009, respectively. Therefore, the amounts receivable under the shortfall loans, and all accrued interest due from the joint venture, are carried at zero on our consolidated balance sheets. Should there be sufficient evidence in the future to suggest that collectability of the shortfall loans and accrued interest is reasonably certain, we would reverse the previously recognized impairment charges, reestablish notes receivable for all previously funded and accrued shortfall loans to the joint venture, and establish accrued interest receivable for all previously funded shortfall loans to the joint venture.

        Our ability to honor our shortfall loan obligations under the 2012 Shortfall Funding Agreement is limited by certain covenants contained in our senior secured credit facility and the indentures governing our Senior Notes. Based on our 2012 and 2013 estimate of debt service shortfalls at the joint venture, and

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 15—Commitments and Contingencies (Continued)

our forecast of total leverage and consolidated EBITDA during 2012 and into 2013, we expect to have the capacity within these restrictions to provide funding to the joint venture for the $4.1 million accrued shortfall liability.

        As of December 31, 2011, we had availability under applicable debt covenants to fund future shortfall loans as follows: (i) $48.9 million of availability under our senior secured credit facility, and (ii) $147.5 million of availability under the indenture governing our Senior Notes.

        The possibility exists that debt service shortfalls at the joint venture could exceed current expectations, including the possibility that neither GE nor Comcast will continue to fund a share of such debt service shortfall loans after April 1, 2013. Should circumstances arise in which we desire to make shortfall loans to the joint venture in excess of the limitations imposed by the covenants contained in our senior secured credit facility or the indentures, we could seek an amendment or waiver of such limitations, but there is no assurance that we would be able to obtain such amendment or waiver on a timely basis, or at all, or on terms satisfactory to us. If we are unable to make shortfall payments, the joint venture may be unable to fund interest obligations under the GECC Note, resulting in an event of default.

        An event of default under the GECC Note would occur if the joint venture fails to make any scheduled interest payment within 90 days of the date due, or fails to pay the principal amount on the maturity date in 2023. If an event of default occurs, GECC could accelerate the maturity of the entire amount due under the GECC Note. Other than the acceleration of the principal amount upon an event of default, prepayment of the principal of the note is prohibited unless agreed upon by both NBCUniversal and LIN TV. Upon an event of default under the GECC Note, GECC's only recourse would be to the joint venture, our equity interest in the joint venture and, after exhausting all remedies against the assets of the joint venture and the other equity interests in the joint venture, to LIN TV pursuant to its guarantee of the full amount of the GECC Note.

        Under the terms of its guarantee of the GECC Note, LIN TV would be required to make a payment for an amount to be determined upon occurrence of the following events: (i) there is an event of default; (ii) the default is not remedied; and (iii) after GECC exhausts all remedies against the assets of the joint venture, the total amount realized upon exercise of those remedies is less than the $815.5 million principal amount of the GECC Note. Upon the occurrence of such events, the amount owed by LIN TV to GECC pursuant to the guarantee would be calculated as the difference between (i) the total amount at which the joint venture's assets were sold and (ii) the principal amount and any unpaid interest due under the GECC Note. As of December 31, 2011, we estimate the fair value of the television stations in the joint venture to be approximately $118 million less than the outstanding balance of the GECC note of $815.5 million.

        Although we believe the probability is remote that there would be an event of default and therefore an acceleration of the principal amount of the GECC Note, there can be no assurances that such an event of default will not occur. There are no financial or similar covenants in the GECC Note. In addition, since both GE and LIN Television have agreed to fund interest payments through April 1, 2013, if the joint venture is unable to generate sufficient cash to service interest payments on the GECC Note, GE and LIN Television are able to control the occurrence of a default under the GECC Note. Since 2009, LIN Television and its joint venture partners have prevented the occurrence of a default by entering into shortfall funding agreements and funding shortfall loans to the joint venture as further described above.

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 15—Commitments and Contingencies (Continued)

        If an event of default occurs under the GECC Note, LIN TV, which conducts all of its operations through its subsidiaries, could experience material adverse consequences, including:

•

GECC, after exhausting all remedies against the joint venture, could enforce its rights under the guarantee, which could cause LIN TV to determine that LIN Television should seek to sell material assets owned by it in order to satisfy LIN TV's obligations under the guarantee;



•

GECC's initiation of proceedings against LIN TV under the guarantee could result in a change of control or other material adverse consequences to LIN Television, which could cause an acceleration of LIN Television's senior secured credit facility and other outstanding indebtedness; and



•

if the GECC Note is prepaid because of an acceleration on default or otherwise, or if LIN TV is released from its obligation, LIN TV would realize a substantial tax gain of approximately $815.5 million related to its deferred gain associated with the formation of the joint venture. This amount of gain, exclusive of any potential utilization of net operating loss carryforwards, would be subject to U.S. Federal and various State tax rates of 35% and approximately 1% (net of Federal benefit), respectively.

Litigation

        We are involved in various claims and lawsuits that are generally incidental to our business. We are vigorously contesting all of these matters. The outcome of any current or future litigation cannot be accurately predicted. We record accruals for such contingencies to the extent that we conclude it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. No estimate of the possible loss or range of loss can be made at this time because the inherently unpredictable nature of legal proceedings may be exacerbated by various factors, including: (i) the damages sought in the proceedings are unsubstantiated or indeterminate; (ii) discovery is not complete; (iii) the proceeding is in its early stages; (iv) the matters present legal uncertainties; (v) there are significant facts in dispute; or (vi) there is a wide range of potential outcomes. Although the outcome of these and other legal proceedings cannot be predicted, we believe that their ultimate resolution will not have a material adverse effect on us.

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 16—Income Taxes

        The income before income taxes was solely from domestic operations. The (benefit from) provision for income taxes consists of the following (in thousands):

        The following table reconciles the amount that would be calculated by applying the 35% federal statutory rate to income before income taxes to the actual (benefit from) provision for income taxes (in thousands):

        The increase from state tax law changes, net of federal tax benefit, is primarily a result of state tax legislation enacted in Michigan in May 2011, which repealed the Michigan business tax ("MBT"), and implemented a corporate income tax instead, effective January 2012. As a result of the elimination of the MBT, certain future tax deductions that were available to be utilized beginning in 2015, and had been recognized as deferred tax assets in our financial statements, will not be deductible. Therefore, during the year ended December 31, 2011, we recognized incremental deferred income tax expense of $5.1 million, net of federal benefit, for the reversal of these previously established deferred tax assets.

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 16—Income Taxes (Continued)

        The components of the net deferred tax liability are as follows (in thousands):

        We maintain a valuation allowance related to our deferred tax asset position when management believes it is more likely than not that the deferred tax assets will not be realized in the future. Our valuation allowance was $23.4 million as of December 31, 2011, which represents a decrease of $36.6 million for the year ended December 31, 2011. This decrease is primarily attributable to the reversal of $35.1 million of the Company's federal valuation allowance relating to 1999 to 2002 net operating losses and the reversal of $1.0 million of the Company's state valuation allowance relating to 2002 to 2010 net operating losses. These valuation allowances were reversed primarily due to our recent history of taxable income, and our projected ability to generate sufficient taxable income prior to the expiration of those net operating loss carryforwards. Components of our valuation allowance were:

•

State net operating loss carryforwards of $18.1 million;



•

State deferred tax assets of $0.2 million recorded in connection with the acquisitions of stations in 2005 and 2006; and



•

State deferred tax assets of $5.1 million related to the impairment of broadcast licenses and goodwill.

        As of December 31, 2011, we had federal net operating loss carryforwards of approximately $365 million that begin to expire in 2020. Additionally, we had state net operating loss carryforwards that vary by jurisdiction (tax effected, net of federal benefit) of $18.1 million, expiring through 2031.

        The Company's uncertain tax positions for the years ended December 31, 2011, 2010, and 2009 is limited to certain unrecognized state benefits totaling $26.4 million, $26.6 million and $24.5 million, respectively. The annual change reflects additional state benefits offset by expiring losses of $0.5 million

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 16—Income Taxes (Continued)

for 2011 and 2010. We file a consolidated federal income tax return and we file numerous other consolidated and separate income tax returns in U.S. state jurisdictions. Tax years 2007-2010 remain open to examination by major taxing jurisdictions.

Note 17—Accrued Expenses

        Accrued expenses consisted of the following (in thousands):

Note 18—Subsequent Events

        On January 3, 2012, we entered into an agreement for the sale of substantially all of the assets of WUPW-TV to WUPW, LLC, and on February 16, 2012, we completed the sale of WWHO-TV to Manhan Media, Inc., both as further described in Note 3—"Discontinued Operations".

        On January 20, 2012, we completed the redemption of our remaining Senior Subordinated Notes at par, plus accrued and unpaid interest through the redemption date as further described in Note 7—"Debt".

        On March 5, 2012, because of anticipated future debt service shortfalls at the NBCUniversal joint venture, we and GE entered into the 2012 Shortfall Funding Agreement. For further information on the 2012 Shortfall Funding Agreement see Note 15—"Commitments and Contingencies".

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 19—Condensed Consolidating Financial Statements

        LIN Television, a 100% owned subsidiary of LIN TV Corp., is the primary obligor of our senior secured credit facility, our Senior Notes and our Senior Subordinated Notes, which were redeemed in full on January 20, 2012, all of which are further described in Note 7—"Debt". LIN TV fully and unconditionally guarantees all of LIN Television's debt on a joint-and-several basis. Additionally, all of the consolidated 100% owned subsidiaries of LIN Television fully and unconditionally guarantee LIN Television's senior secured credit facility, Senior Notes and prior to January 20, 2012, the Senior Subordinated Notes, on a joint-and-several basis, subject to customary release provisions. There are certain contractual restrictions on LIN Television's ability to obtain funds in the form of dividends or loans from the non-guarantor subsidiaries.

        The following condensed consolidating financial statements present the consolidated balance sheets, consolidated statements of operations and consolidated statements of cash flows of LIN TV, LIN Television, as the issuer, the guarantor subsidiaries, and the non-guarantor subsidiaries of LIN Television and the elimination entries necessary to consolidate or combine the issuer with the guarantor and non-guarantor subsidiaries. These statements are presented in accordance with the disclosure requirements under SEC Regulation S-X Rule 3-10.

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 19—Condensed Consolidating Financial Statements (Continued)

Condensed Consolidating Balance Sheet
As of December 31, 2011
(in thousands)

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 19—Condensed Consolidating Financial Statements (Continued)

Condensed Consolidating Balance Sheet
As of December 31, 2010
(in thousands)

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 19—Condensed Consolidating Financial Statements (Continued)

Condensed Consolidating Statement of Operations
For the Year Ended December 31, 2011
(in thousands)

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 19—Condensed Consolidating Financial Statements (Continued)

Condensed Consolidating Statement of Operations
For the Year Ended December 31, 2010
(in thousands)

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 19—Condensed Consolidating Financial Statements (Continued)

Condensed Consolidating Statement of Operations
For the Year Ended December 31, 2009
(in thousands)

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 19—Condensed Consolidating Financial Statements (Continued)

Condensed Consolidating Statement of Cash Flows
For the Year Ended December 31, 2011
(in thousands)

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 19—Condensed Consolidating Financial Statements (Continued)

Condensed Consolidating Statement of Cash Flows
For the Year Ended December 31, 2010
(in thousands)

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 19—Condensed Consolidating Financial Statements (Continued)

Condensed Consolidating Statement of Cash Flows
For the Year Ended December 31, 2009
(in thousands)

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 20—Unaudited Quarterly Data

 

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LIN TV Corp.

Notes to Consolidated Financial Statements (Continued)

Note 21—Supplemental Disclosure of Cash Flow Information

Note 22—Valuation and Qualifying Accounts

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholder of LIN Television Corporation:

         In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of LIN Television Corporation and its subsidiaries at December 31, 2011 and December 31, 2010, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2011 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on these financial statements and on the Company's internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

         A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

         Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

         As described in Management's Report on Internal Control over Financial Reporting, management has excluded Nami Media, Inc. from its assessment of internal control over financial reporting as of December 31, 2011 because it was acquired by the Company on November 22, 2011 in a purchase business combination. We have also excluded Nami Media, Inc. from our audit of internal control over financial reporting. Nami Media, Inc. is a majority-owned and controlled subsidiary, whose total assets and total revenues represent 1% and less than 1%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2011.

/s/ PricewaterhouseCoopers LLP

Hartford, CT
March 15, 2012

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LIN Television Corporation

Consolidated Balance Sheets

   

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

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LIN Television Corporation

Consolidated Statements of Operations

   

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

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LIN Television Corporation

Consolidated Statements of Stockholder's Deficit and Comprehensive Income

(in thousands, except share data)

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

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LIN Television Corporation

Consolidated Statements of Stockholder's Deficit and Comprehensive Income

(in thousands, except share data)

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

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LIN Television Corporation

Consolidated Statements of Stockholder's Deficit and Comprehensive Income

(in thousands, except share data)

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

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LIN Television Corporation

Consolidated Statements of Cash Flows

   

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

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LIN Television Corporation

Notes to Consolidated Financial Statements

Note 1—Basis of Presentation and Summary of Significant Accounting Policies

        LIN Television Corporation ("LIN Television"), together with its subsidiaries, is a local multimedia company operating in the United States. LIN Television and its subsidiaries are affiliates of HM Capital Partners I LP ("HMC"). In these notes, the terms "Company," "we," "us" or "our" mean LIN Television Corporation and all subsidiaries included in our consolidated financial statements. LIN Television is a wholly-owned subsidiary of LIN TV Corp. ("LIN TV")

        Our consolidated financial statements reflect the operations of WWHO-TV in Columbus, OH, WUPW-TV in Toledo, OH, and Banks Broadcasting, Inc. (the "Banks Broadcasting joint venture") as discontinued for all periods presented. (See Note 3—"Discontinued Operations" for further discussion of our discontinued operations.)

        The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"). Certain changes in classifications have been made to the prior period financial statements to conform to the current financial statement presentation. Our significant accounting policies are described below.

Principles of consolidation

        The accompanying consolidated financial statements include the accounts of our Company, our wholly-owned and majority-owned and controlled subsidiaries, and variable interest entities ("VIEs") for which we are the primary beneficiary. We review all local marketing agreements ("LMAs"), shared services agreements ("SSAs") or joint sales agreements ("JSAs"), to evaluate whether consolidation of such arrangements is required. All intercompany accounts and transactions have been eliminated. We conduct our business through our subsidiaries and have no operations or assets other than our investment in our subsidiaries and equity-method investments. We operate in one reportable segment.

Variable Interest Entities

        In determining whether we are the primary beneficiary of a VIE for financial reporting purposes, we consider whether we have the power to direct the activities of the VIE that most significantly impact the economic performance of the VIE and whether we have the obligation to absorb losses or the right to receive returns that would be significant to the VIE. We consolidate VIEs when we are the primary beneficiary.

        On May 20, 2011, we acquired certain assets of WBDT-TV in the Dayton, OH market, and WBDT Television, LLC ("WBDT"), a third party, acquired other assets, including the Federal Communication Commission ("FCC") license of WBDT-TV as further described in Note 2—"Acquisitions". During 2011, we also entered into a JSA and SSA with WBDT. Under these agreements, we provide sales and administrative services to WBDT, have an obligation to reimburse certain of WBDT's expenses, and we are compensated through a performance-based fee structure that provides us the benefit of certain returns from the operation of WBDT-TV.

        We determined that upon the completion of the acquisition of certain assets of WBDT-TV, as further described in Note 2—"Acquisitions", WBDT was a VIE, and as a result of the JSA and SSA, we have a variable interest in WBDT. The sole business of WBDT is the ownership and operation of WBDT-TV. We are the primary beneficiary of that entity because of our obligation to reimburse certain of WBDT's expenses that could result in losses that are significant to the VIE, the potential for us to participate in returns of WBDT-TV through a performance-based bonus, and our power to direct certain activities

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LIN Television Corporation

Notes to Consolidated Financial Statements (Continued)

Note 1—Basis of Presentation and Summary of Significant Accounting Policies (Continued)

related to the operation of WBDT-TV, which significantly impact the economic performance of WBDT. Therefore, we consolidate WBDT within our consolidated financial statements.

        The carrying amounts and classifications of the assets, liabilities and member's interest of WBDT, which have been included in our consolidated balance sheets as of December 31, 2011, were as follows (in thousands):

        The assets of our consolidated VIE can only be used to settle the obligations of the VIE, and may not be sold, or otherwise disposed of, except for assets sold or replaced with others of like kind or value. Other liabilities of WBDT of $7.2 million serve to reduce the carrying value of the entity, to reflect the fact that as of December 31, 2011, LIN Television has an option described below that it may exercise if the FCC attribution rules change. The option would allow LIN Television to acquire the assets or member's interest of WBDT for a nominal exercise price, which is significantly less than the carrying value of the tangible and intangible net assets of WBDT. During the year ended December 31, 2011, $0.2 million was attributable to noncontrolling interest related to this VIE in our consolidated statement of operations. As of December 31, 2011, the noncontrolling interest related to this VIE on our consolidated balance sheets is $0.2 million.

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LIN Television Corporation

Notes to Consolidated Financial Statements (Continued)

Note 1—Basis of Presentation and Summary of Significant Accounting Policies (Continued)

Use of estimates

        The preparation of financial statements in conformity with U.S. GAAP requires our management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the notes thereto. Our actual results could differ from these estimates. Estimates are used for the allowance for doubtful accounts in receivables, valuation of goodwill and intangible assets, amortization and impairment of program rights and intangible assets, stock-based compensation and other long-term incentive compensation arrangements, pension costs, barter transactions, income taxes, employee medical insurance claims, useful lives of property and equipment, contingencies, including shortfall funding liabilities to our joint venture with NBCUniversal, litigation and net assets of businesses acquired.

Cash and cash equivalents

        Cash equivalents consist of highly liquid, short-term investments that have an original maturity of three months or less when purchased. All of our available cash is on deposit with banking institutions that we believe to be financially sound. We had no material losses on our cash or cash equivalents during 2011. On December 21, 2011, we irrevocably deposited with the trustee the full amount of the redemption price of our Senior Subordinated Notes as further described in Note 7—"Debt". As a result of this deposit, we have $255.2 million of restricted cash included on our consolidated balance sheets as of December 31, 2011.

Property and equipment

        Property and equipment is recorded at cost and is depreciated using the straight-line method over the estimated useful lives of the assets, which are an average of 30 to 40 years for buildings and fixtures, and 3 to 15 years for broadcast and other equipment. Upon retirement or other disposition, the cost and related accumulated depreciation of the assets are removed from the accounts and the resulting gain or loss is included in consolidated net income or loss. Expenditures for maintenance and repairs, including expenditures for planned major maintenance activities, are expensed as incurred. We review our property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Nonmonetary exchanges

        We exchange productive assets, such as broadcast equipment, with third parties through nonmonetary exchanges. We recognize gains or losses on nonmonetary exchanges in an amount equal to the difference between the fair value of the assets received and the carrying value of the assets surrendered.

Equity investments

        Equity investments that we do not have a controlling interest in are accounted for using the equity method. Our share of the net income or loss for these investments, including any equity investment impairments, is included in share of loss from equity investments on our consolidated statement of operations. We review our interest in our equity investments for impairment if there is a series of operating losses or other factors that may indicate that there is a decrease in the value of our investment that is other than temporary.

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LIN Television Corporation

Notes to Consolidated Financial Statements (Continued)

Note 1—Basis of Presentation and Summary of Significant Accounting Policies (Continued)

Revenue recognition

        We recognize local, national and political advertising sales, net of agency commissions, during the period in which the advertisements or programs are aired on our television stations, and when payment is reasonable assured. Internet and mobile advertisement sales are recognized when the advertisement is displayed on our web sites or the web sites of our advertising network. We recognize retransmission consent fees in the period in which our service is delivered.

Barter transactions

        We account for barter transactions at the fair value of the goods or services we receive from our customers, or the advertising time provided, whichever is more clearly indicative of fair value based on the judgment of our management. We record barter advertising revenue at the time the advertisement is aired and barter expense at the time the goods or services are used. We account for barter programs at fair value based on a calculation using the actual cash advertisements we sell within barter programs multiplied by one minus the program profit margin for similar syndicated programs where we pay cash to acquire the program rights. We record barter program revenue and expense when we air the barter program. We do not record barter revenue or expenses related to network programs. Barter revenue and expense included in the consolidated statements of operations are as follows (in thousands):

Advertising expense

        Advertising costs are expensed as incurred. We incurred advertising costs in the amounts of $2.6 million, $3.2 million and $3.1 million for the years ended December 31, 2011, 2010 and 2009, respectively.

Intangible assets

        Intangible assets primarily include broadcast licenses, network affiliations, customer relationships, completed technology, non-compete agreements and goodwill.

        We test the impairment of our broadcast licenses annually or whenever events or changes in circumstances indicate that such assets might be impaired. The impairment test consists of a comparison of the fair value of broadcast licenses with their carrying amount on a station-by-station basis using a discounted cash-flow valuation method, assuming a hypothetical start-up scenario. The future value of our broadcast licenses could be significantly impaired by the loss of the corresponding network affiliation agreements. Accordingly, such an event could trigger an assessment of the carrying value of a broadcast license.

        We test the impairment of goodwill annually or whenever events or changes in circumstances indicate that goodwill might be impaired. The first step of the goodwill impairment test compares the fair value of a station with its carrying amount, including goodwill. The fair value of a station is determined through the use of a discounted cash flow analysis. The valuation assumptions used in the discounted cash flow model

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LIN Television Corporation

Notes to Consolidated Financial Statements (Continued)

Note 1—Basis of Presentation and Summary of Significant Accounting Policies (Continued)

reflect historical performance of the station and prevailing values in the markets for broadcasting properties. If the fair value of the station exceeds its carrying amount, goodwill is not considered impaired. If the carrying amount of the station exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of goodwill with the carrying amount of that goodwill. The implied fair value of goodwill is determined by performing a hypothetical purchase price allocation, using the station's fair value (as determined in step one) as the purchase price. If the carrying amount of goodwill exceeds the implied fair value, an impairment charge is recognized in an amount equal to that excess, but not more than the carrying value of the goodwill. An impairment assessment could be triggered by a significant reduction, or a forecast of such reductions, in operating results or cash flows at one or more of our television stations, a significant adverse change in the national or local advertising marketplaces in which our television stations operate, or by adverse changes to FCC ownership rules, among other factors. We recorded impairment charges during 2011 and 2009, which are more fully described in Note 6—"Intangible Assets".

Long-lived assets

        We periodically evaluate the net realizable value of long-lived assets, including tangible and intangible assets, relying on a number of factors including operating results, business plans, economic projections and anticipated future cash flows. Impairment in the carrying value of an asset is recognized when the expected future operating cash flow derived from the asset is less than its carrying value.

Program rights

        Program rights are recorded as assets when the license period begins and the programs are delivered to our stations for broadcasting, at the gross amount of the related obligations. Costs incurred in connection with the purchase of programs to be broadcast within one year are classified as current assets, while costs of those programs to be broadcast subsequently are considered non-current. Program costs are charged to operations over their estimated broadcast periods in a manner consistent with actual usage.

        If the estimated net realizable value of acquired programming rights is less than unamortized cost (i.e. due to poor ratings), we would recognize an impairment charge to reduce the carrying value of the program rights to their net realizable value.

        Program obligations are classified as current or non-current in accordance with the payment terms of the license agreement.

Stock-based compensation

        As of December 31, 2011, we have several stock-based employee compensation plans, which are described more fully in Note 9—"Stock-Based Compensation". We estimate the fair value of stock option awards using a Black-Scholes valuation model. The Black-Scholes valuation model requires us to make assumptions and judgments about the variables used in the calculation, including the option's expected term, the expected volatility of the underlying stock and the number of stock option awards that are expected to be forfeited. The expected term represents the weighted-average period of time that options granted are expected to be outstanding giving consideration to vesting schedules and our historical exercise patterns. Expected volatility is based on historical trends for LIN TV's class A common stock over the expected term and, prior to 2010, we used the historical trends of LIN TV's class A common stock over the

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LIN Television Corporation

Notes to Consolidated Financial Statements (Continued)

Note 1—Basis of Presentation and Summary of Significant Accounting Policies (Continued)

expected term, as well as a comparison to peer companies. Expected forfeitures are estimated using our historical experience. If future changes in estimates differ significantly from our current estimates, our future stock-based compensation expense and results of operations could be materially impacted.

        The following table presents the stock-based compensation expense included in our consolidated statements of operations (in thousands):

Income taxes

        Deferred income taxes are recognized based on temporary differences between the financial statement and the tax basis of assets and liabilities using statutory tax rates in effect in the years in which the temporary differences are expected to reverse. We consider future taxable income and feasible tax planning strategies in assessing the need for establishing or removing a valuation allowance. We record or subsequently remove a valuation allowance to reflect our deferred tax assets to an amount that is more likely than not to be realized. In the event that our determination changes regarding the realization of all or part of our deferred tax assets in the future, an adjustment to the deferred tax asset is recorded to our consolidated statement of operations in the period in which such a determination is made.

        When accounting for uncertainty in income taxes we follow the prescribed recognition threshold and measurement methodology for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For benefits to be recognized, a tax position must be more-likely than not to be sustained upon examination by taxing authorities. We recognize interest and penalties related to uncertain tax positions as a component of income tax expense.

Concentration of credit risk

        Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash and cash equivalents and trade receivables. Concentration of credit risk with respect to cash and cash equivalents and investments are limited as we maintain primary banking relationships with only large nationally recognized institutions. We evaluated the viability of these institutions as of December 31, 2011 and we believe our risk is minimal. Credit risk with respect to trade receivables is limited, as our trade receivables are primarily related to advertising revenues generated from a large diversified group of local and nationally recognized advertisers and advertising agencies. We do not require collateral or other security against trade receivable balances, however, we do maintain reserves for potential bad debt losses, which are based on historical bad debt experience and an assessment of specific risks, and such reserves and bad debts have been within management's expectations for all years presented.

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LIN Television Corporation

Notes to Consolidated Financial Statements (Continued)

Note 1—Basis of Presentation and Summary of Significant Accounting Policies (Continued)

Fair value of financial instruments

        Certain financial instruments, including cash and cash equivalents, investments, accounts receivable and accounts payable are carried in the consolidated financial statements at amounts that approximate fair value. For certain financial assets and liabilities recorded at fair value on a recurring basis we maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. For more information on our assets and liabilities measured at fair value using the prescribed three-level fair value hierarchy see Note 10—"Fair Value Measurements".

Derivative financial instruments

        Derivatives are required to be recorded as assets or liabilities and measured at fair value. Gains or losses resulting from changes in the fair values of derivatives are recognized immediately or deferred, depending on the use of the derivative and whether or not it qualifies as a hedge. We have historically used derivative financial instruments in the management of our interest rate exposure for our long-term debt. In accordance with our interest rate risk management policy, we do not enter into derivative financial instruments unless there is an underlying exposure, and we do not enter derivative financial instruments for speculative trading purposes.

Retirement plans

        We have a defined benefit retirement plan covering certain of our employees. Our pension benefit obligations and related costs are calculated using prescribed actuarial concepts. Additionally, we record the unfunded status of our plan on our consolidated balance sheets. Effective April 1, 2009, this plan was frozen and we do not expect to make additional benefit accruals to this plan, however, we continue to fund our existing vested obligations.

Comprehensive income

        Our total comprehensive income includes net income and other comprehensive income (loss) items listed in the table below (in thousands):

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Notes to Consolidated Financial Statements (Continued)

Note 1—Basis of Presentation and Summary of Significant Accounting Policies (Continued)

Redeemable noncontrolling interest

        The following table presents changes in the redeemable noncontrolling interest related to Nami Media included in our consolidated balance sheets (in thousands):

Recently issued accounting pronouncements

        In September 2011, there were revisions to the accounting standard for goodwill impairment tests. A company has the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The revisions are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted during 2011 if an entity's financial statements have not yet been issued. We will adopt this guidance effective January 1, 2012, and we do not expect it to have a material impact on our financial position or results of operations.

        In June 2011, there were revisions to the accounting standard for reporting comprehensive income. A company has the option to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The revisions are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, and should be applied retrospectively. We will adopt this guidance effective January 1, 2012, and we do not expect it to have a material impact on our financial position or results of operations.

        In October 2009, there were revisions to the accounting standard for revenue arrangements with multiple deliverables. The revisions address how to separate deliverables and how to measure and allocate arrangement consideration to one or more units of accounting. The revisions are effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. We adopted this guidance effective January 1, 2011, and the adoption did not have a material impact on our financial position or results of operations.

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LIN Television Corporation

Notes to Consolidated Financial Statements (Continued)

Note 2—Acquisitions

Nami Media, Inc.

        On November 22, 2011, we acquired a 57.6% interest (a 50.1% interest calculated on a fully diluted basis) in Nami Media Inc. ("Nami Media"), a digital advertising management and technology company based in Los Angeles, CA. Nami Media serves the growing marketplace of online traffic quality management for cost per click ("CPC") advertising. Our investment in Nami Media fills a niche in our growing suite of digital product offerings and furthers the goal to be advertisers' preferred choice for multiplatform marketing opportunities.

        Total cash consideration for this acquisition was $4.8 million. In connection with the acquisition, we recognized $4.4 million of goodwill, none of which is amortizable for tax purposes. The goodwill primarily represents the value and synergies between us and Nami Media that we expect to benefit from because we believe RMM's existing CPC business together with Nami Media's advertisement exchange capabilities will increase optimization, query volume and bid exchange revenues for CPC advertisements. Nami Media's platform also facilitates expansion of our existing search engine marketing business. We also recognized $3.7 million of finite-lived intangible assets related to completed technology with an estimated remaining useful life of 5 years, and we recognized $0.3 million of other intangible assets.

        Under the terms of our agreement with Nami Media, we agreed to purchase the remaining outstanding shares of Nami Media in 2014 if Nami Media achieves a target earnings before interest, taxes, depreciation and amortization ("EBITDA") in 2013 as outlined in the purchase agreement. The purchase price of these shares is based on multiples of Nami Media's 2013 net revenues and EBITDA. Our maximum potential obligation under the purchase agreements is $36.5 million. Additionally, if Nami Media does not meet the target EBIDTA in 2013, we have the option to purchase the remaining outstanding shares using the same purchase price multiple. Our obligation to purchase the noncontrolling interest holders' shares is outside of our control, because it is based on Nami Media's achievement of a target EBIDTA in 2013. Therefore, the noncontrolling interest related to Nami Media as of December 31, 2011 has been reported as redeemable noncontrolling interest and classified as temporary equity on our consolidated balance sheets. As of the acquisition date, the fair value of the noncontrolling interest was $3.5 million, and was measured based on the purchase price for our 57.6% ownership interest and the net assets acquired as of the acquisition date.

        In 2014, if we do not purchase the remaining outstanding shares of Nami Media, the noncontrolling interest holders have the right to purchase our interest in Nami Media. The purchase price of these shares is based on the same purchase price multiple described above and is exercisable only if the 2013 EBIDTA target is not met and we do not elect to purchase the remaining interest. The fair value of this option is zero and no amounts related to this option are included in our consolidated financial statements as of December 31, 2011.

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Notes to Consolidated Financial Statements (Continued)

Note 2—Acquisitions (Continued)

        The following table summarizes the provisional allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed in the acquisition (in thousands):

ACME Communications, Inc.

        On May 28, 2010, we entered into an SSA and related agreements with ACME Communications, Inc. ("ACME") with respect to ACME's television stations KWBQ-TV, KRWB-TV, and KASY-TV in the Albuquerque-Santa Fe, NM market; WBDT-TV in the Dayton, OH market; and WCWF-TV (f/k/a WIWB-TV) in the Green Bay-Appleton, WI market. Additionally, we entered into a JSA with ACME for WBDT-TV and WCWF-TV. Concurrent with the execution of these agreements, we entered into an option agreement, giving us the right to acquire certain assets of the stations covered under these agreements, or giving ACME the right, starting in January 2013 and subject to certain conditions, including regulatory approval, to put any or all of those assets to us at the greater of a defined purchase price or the then-current fair market value.

        On August 26, 2010, we exercised our option to acquire WCWF-TV and certain assets of WBDT-TV. Because current FCC attribution rules restrict us from being the FCC licensee of WBDT-TV, we assigned our rights to acquire other WBDT-TV assets, including the FCC license, to WBDT. WBDT is wholly-owned by Vaughan Media, LLC ("Vaughan"), an unrelated third party. We have an option to purchase all of the membership interest in WBDT from Vaughan, or all of WBDT's assets related to WBDT-TV, that would be exercisable by us if the FCC ownership rules change.

        On May 20, 2011, we completed our acquisition of WCWF-TV. We acquired WCWF-TV as part of our multi-channel strategy, which enables us to expand our presence in our local markets beyond that of a single television station. This added channel and distribution capacity allows us to appeal to a wider audience and market of advertisers, while also providing us with economies of scale within our station operations.

        Also, on May 20, 2011, we completed the acquisition of certain station assets of WBDT-TV and entered into a JSA and SSA with WBDT. WBDT completed the acquisition of the other station assets of WBDT-TV, including the FCC license. In addition, we continue to provide certain services to ACME's television stations KWBQ-TV, KRWB-TV and KASY-TV. Utilizing the assets in our existing markets to support the operations of another television station creates economies of scale to further leverage our existing infrastructure.

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Notes to Consolidated Financial Statements (Continued)

Note 2—Acquisitions (Continued)

        Total cash consideration for these acquisitions was $5.8 million, including $0.9 million contributed by WBDT, which was funded by a $0.9 million term loan from an unrelated third party as described further in Note 7—"Debt", and $0.6 million that was funded by us into an escrow account in 2010. As part of the consideration, we also issued to ACME 1,150,000 shares of LIN TV's class A common stock having a fair value of $4.8 million.

        In connection with the acquisition, we recognized $0.4 million of goodwill. We also recognized $9.0 million of broadcast licenses and $1.0 million of finite-lived intangible assets. These finite-lived intangible assets are primarily comprised of network affiliation and retransmission consent agreements and have a weighted-average life of approximately 5 years. Additionally, we assumed net program obligations of $0.8 million pursuant to unfavorable contracts.

        The following table summarizes the final allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed by both us and WBDT (a consolidated VIE) in the acquisition (in thousands):

RMM

        On October 2, 2009, we acquired Red McCombs Media, LP ("RMM"), an online advertising and media services company based in Austin, TX. In connection with the acquisition we entered into an incentive compensation arrangement with certain key members of management. The arrangement provides payments to those employees based on a computation of EBIDTA generated by RMM during 2012. Our liability under this arrangement could range from zero to $24 million, and is payable in 2013. As of December 31, 2011, we have recognized a non-current liability of $5.0 million related to this incentive compensation arrangement.

Note 3—Discontinued Operations

WWHO-TV

        On October 21, 2011, we signed an agreement with Manhan Media, Inc. for the sale of certain assets of WWHO-TV, our CW affiliate serving Columbus, Ohio. Accordingly, we classified certain assets and liabilities associated with this station as held for sale on our consolidated balance sheets, and the operating results as discontinued operations in our consolidated statement of operations. The operating loss for the year ended December 31, 2011 includes an impairment charge of $1.6 million to reduce the carrying value of the broadcast license to fair value based on the final sale price. This transaction closed on February 16,

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Notes to Consolidated Financial Statements (Continued)

Note 3—Discontinued Operations (Continued)

2012. The carrying amounts of the assets and liabilities of this station as of December 31, 2011 and 2010 were as follows (in thousands):

WUPW-TV

        On January 3, 2012, we entered into an agreement for the sale of substantially all of the assets of WUPW-TV to WUPW, LLC. This transaction is subject to certain closing conditions, including the approval of the FCC, and is expected to close during 2012. Accordingly, we classified certain assets and liabilities associated with this station as held for sale on our consolidated balance sheets, and the operating

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Notes to Consolidated Financial Statements (Continued)

Note 3—Discontinued Operations (Continued)

results as discontinued operations in our consolidated statement of operations. The carrying amounts of the assets and liabilities of this station as of December 31, 2011 and 2010 were as follows (in thousands):

Banks Broadcasting

        On April 23, 2009, the Banks Broadcasting joint venture completed the sale of KNIN-TV, a CW affiliate in Boise, ID for $6.6 million to Journal Broadcast Corporation. As a result of the sale we received, on the basis of our economic interest in Banks Broadcasting, distributions of $0.4 million and $2.6 million during the years ended December 31, 2010 and 2009, respectively. As of December 31, 2010, all of the assets of the Banks Broadcasting joint venture had been liquidated.

        The operating loss for the year ended December 31, 2009 includes an impairment charge of $1.9 million to reduce the carrying value of broadcast licenses to fair value based on the final sale price of KNIN-TV of $6.6 million. Net loss included within discontinued operations for the year ended December 31, 2009 reflects our 50% share of net losses of the Banks Broadcasting joint venture, net of taxes, through the April 23, 2009 disposal date.

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LIN Television Corporation

Notes to Consolidated Financial Statements (Continued)

Note 3—Discontinued Operations (Continued)

        The following presents summarized information for the discontinued operations as follows (in thousands):

Note 4—Investments

Joint Venture with NBCUniversal

        We own an approximate 20% interest in Station Venture Holdings, LLC ("SVH"), a joint venture with NBCUniversal Media, LLC ("NBCUniversal"), and account for our interest using the equity method as we do not have a controlling interest. SVH holds a 99.75% interest in Station Venture Operations, LP ("SVO"), which is the operating company that manages KXAS-TV and KNSD-TV, the television stations that comprise the joint venture. The following table presents summarized financial information of SVH and SVO (in thousands):

 

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Notes to Consolidated Financial Statements (Continued)

Note 4—Investments (Continued)

        In 2008, we recorded an impairment charge that reduced the carrying value of our investment in SVH to $0. Subsequent to the reduction of the SVH carrying value to $0, and as a result of our guarantee of the debt financing provided by General Electric Capital Corporation ("GECC") of SVH as further described in Note 15—"Commitments and Contingencies", we continue to track our share of the income or loss of SVH, but currently are not recording such loss in our financial statements until, or unless, our proportionate share of SVH losses exceeds previously recognized impairment charges. When SVH generates income, we will begin recording our proportionate share of such income once it exceeds the operating losses not previously recognized in our financial statements.

        We recognize shortfall funding liabilities when it is probable and estimable that there will be a shortfall at the SVH level requiring funding from us, and only when we have reached or intend to reach a shortfall funding agreement covering the period for which we estimate debt service shortfalls to occur, as further described in Note 15—"Commitments and Contingencies".

        During the year ended December 31, 2009, we recognized a contingent liability of $6.0 million based on our estimate of amounts that we expected to loan to SVH pursuant to the original shortfall funding agreement and the 2010 shortfall funding agreement with NBCUniversal, as further described in Note 15—"Commitments and Contingencies".

        During the year ended December 31, 2010, pursuant to the shortfall funding agreements with NBCUniversal, we made shortfall loans in the aggregate principal amount of $4.1 million, representing our approximate 20% share of 2010 debt service shortfalls. Concurrent with our funding of the shortfall loans, NBCUniversal funded shortfall loans in the aggregate principal amounts of $15.9 million, in respect of its approximate 80% share of 2010 debt service shortfalls. As a result, as of December 31, 2010, we had a remaining shortfall liability of $1.9 million recognized for all probable and estimable shortfall loans to the joint venture.

        During the year ended December 31, 2011, pursuant to the shortfall funding agreement with General Electric Company ("GE") as further described in Note 15—"Commitments and Contingencies", we funded shortfall loans in the aggregate principal amount of $2.5 million, representing our approximate 20% share of 2011 debt service shortfalls, and GE funded shortfall loans in the aggregate principal amount of $9.7 million, representing its approximate 80% share in 2011 debt service shortfalls.

        Prior to the issuance of these financial statements, joint venture management provided us with a final 2012 budget. Also, during the year ended December 31, 2011, NBCUniversal publicly discussed its intent to secure additional retransmission consent fees for the NBC owned television stations, which would include the joint venture stations that comprise SVO.

        Based on that information, we believe the joint venture's operating results in 2012 will improve as a result of, among other things, the upcoming 2012 election cycle, and NBC's broadcast of the 2012 Summer Olympics and Superbowl XLVI. The joint venture's 2012 budget calls for capital investments at the joint venture stations that will largely offset the expected 2012 increases in operating cash flows. As a result, we expect the joint venture to require additional shortfall loans in 2012 and into 2013. While there can be no assurances, we believe, that beginning in 2013, operating results will improve as a result of further economic recovery, forecasted growth in retransmission consent fees, and further growth in digital revenues.

        On March 5, 2012, we entered into a shortfall funding agreement with GE covering the period from April 2, 2012 through April 1, 2013 as further described in Note 15—"Commitments and Contingencies".

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LIN Television Corporation

Notes to Consolidated Financial Statements (Continued)

Note 4—Investments (Continued)

        As of December 31, 2011, we estimate our approximate 20% share of debt service shortfalls to be $4.1 million for 2012 and into 2013. We believe that cash shortfalls beyond the amounts currently accrued are not probable. However, our prospective shortfall obligations could vary from our estimate based upon changes in the performance of the joint venture stations and any changes to the proportionate share of each party's debt service shortfall. During the year ended December 31, 2011, based on our estimate of our probable shortfall obligations during 2011, 2012 and into 2013, we recognized a contingent liability of $4.7 million for the amounts that we expect to loan to SVH pursuant to the shortfall funding agreements with GE, as further described in Note 15—"Commitments and Contingencies".

        Because of uncertainty surrounding the joint venture's ability to repay shortfall loans, we concluded that it was more likely than not that the amounts recognized during the years ended December 31, 2011 and 2009 for accrued shortfall loans of $4.7 million and $6.0 million, respectively, will not be recovered within a reasonable period of time. Accordingly, we recognized charges of $4.7 million and $6.0 million, to reflect the impairment of the shortfall loans, which were classified as share of loss in equity investments in our consolidated statement of operations, during the years ended December 31, 2011 and 2009, respectively. Therefore, the amounts receivable under the shortfall loans, and all accrued interest due from the joint venture, are carried at zero on our consolidated balance sheets. Should there be sufficient evidence in the future to suggest that collectability of the shortfall loans and accrued interest is reasonably certain, we would reverse the previously recognized impairment charges, reestablish notes receivable for all previously funded and accrued shortfall loans to the joint venture, and establish accrued interest receivable for all previously funded shortfall loans to the joint venture. For further information on recognition of shortfall funding liabilities, see Note 15—"Commitments and Contingencies".

        The shortfall loans bear interest at 8% annually; payable quarterly in arrears subject to certain conditions, and do not mature prior to the maturity of the Credit Agreement with GECC in 2023. Under the terms of the shortfall loan notes, payments of principal and interest are allocated between us and NBCUniversal or GE, as applicable, based on the respective economic interests in the joint venture, and are applied first toward the principal amount owed under the shortfall loans, and second toward the payment of accrued interest. Principal and interest payments are payable only if the joint venture has available cash on hand in excess of amounts required by the joint venture to fund its quarterly interest payments on the debt financing provided by GECC as further described in Note 15—"Commitments and Contingencies".

Note 5—Property and Equipment

        Property and equipment consisted of the following (in thousands):

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Notes to Consolidated Financial Statements (Continued)

Note 5—Property and Equipment (Continued)

        We recorded depreciation expense of $26.2 million, $27.0 million and $28.6 million for the years ended December 31, 2011, 2010 and 2009, respectively.

        In 2004, Sprint Nextel Corporation ("Nextel") agreed to relocate its use of airwaves to end interference between its signals and the wireless signals used by public safety agencies. As part of this agreement, the FCC granted Nextel the right to a certain spectrum within the 1.9 GHz band that was used by television broadcasters for electronic news gathering. As part of this arrangement, Nextel entered into agreements with several of our stations to exchange analog equipment for comparable digital equipment. During the years ended December 31, 2010 and 2009, we received $0.1 million and $5.0 million, respectively, of equipment pursuant to this exchange. As equipment was exchanged and placed in service, we recorded a gain to the extent that the fair market value of the equipment received exceeded the carrying amount of the equipment relinquished. For the years ended December 31, 2010 and 2009, we recognized a gain of $3.7 million and $5.9 million, respectively, related to this equipment, which is recorded in loss (gain) from asset dispositions in our consolidated statement of operations.

Note 6—Intangible Assets

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

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Notes to Consolidated Financial Statements (Continued)

Note 6—Intangible Assets (Continued)

        We recorded amortization expense of $1.2 million, $1.5 million and $0.6 million for the years ended December 31, 2011, 2010 and 2009, respectively.

        The following table summarizes the projected aggregate amortization expense for the next five years and thereafter (in thousands):

        There were no events during 2011 and 2010 to warrant the performance of an interim impairment test of our indefinite-lived intangible assets. We recorded a $1.6 million impairment charge related to discontinued operations for the year ended December 31, 2011.

        We recorded an impairment charge of $39.5 million during the second quarter of 2009 that included an impairment to the carrying values of our broadcast licenses of $36.8 million, relating to 24 of our television stations; and an impairment to the carrying values of our goodwill of $2.7 million, relating to two of our television stations. We tested our indefinite-lived intangible assets for impairment at June 30, 2009, between the required annual tests, because we believed events had occurred and circumstances changed that would more likely than not reduce the fair value of our broadcast licenses and goodwill below their carrying amounts. The need for an impairment analysis at June 30, 2009 was triggered by the continued decline in advertising revenue at certain of our stations in excess of our original plan, due to the economic downturn that resulted in downward adjustments to their respective forecasts.

        The changes in the carrying amount of goodwill for the years ended December 31, 2011 and 2010, respectively, are as follows (in thousands):

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Notes to Consolidated Financial Statements (Continued)

Note 7—Long-term Debt

        Debt consisted of the following (in thousands):

Senior Secured Credit Facility

        On October 26, 2011, we entered into a credit agreement governing our senior secured credit facility with JP Morgan Chase Bank, N.A. ("JPMorgan"), Administrative Agent, and the banks and other financial institutions party thereto. Our senior secured credit facility is comprised of a six-year, $125 million term loan and a five-year, $75 million revolving credit facility, and bears interest at a rate based on, at our option, either a) the LIBOR interest rate, or b) the ABR rate, which is an interest rate that is equal to the greatest of (i) the Prime Rate, (ii) the Federal Funds Effective Rate plus ¹/2 of 1 percent, and (iii) the one-month LIBOR rate plus 1%. In addition, the rate we select also bears an applicable margin based upon our Consolidated Senior Secured Leverage Ratio, currently set at 3.00% and 2.00% for LIBOR based loans and ABR rate loans, respectively. Lastly, the unused portion of the revolving credit facility is subject to a commitment fee based upon our Consolidated Senior Secured Leverage Ratio, currently set at 0.50% for both LIBOR based loans and ABR rate loans. Concurrent with the closing of our senior secured credit facility, we terminated the credit agreement governing our 2009 senior secured credit facility.

        The terms of the credit agreement provide for customary representations and warranties, affirmative and negative covenants (including financial covenants), and events of default. The credit agreement also provides for the payment of customary fees and expenses by us. The credit facilities available under the the credit agreement can be accelerated upon events of default and require the term loans to be prepaid under certain circumstances with amounts determined by reference to the proceeds from certain asset sales (subject to reinvestment rights), the incurrence of certain indebtedness and a percentage of annual excess cash flow.

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Notes to Consolidated Financial Statements (Continued)

Note 7—Long-term Debt (Continued)

        The credit facilities are senior secured obligations and rank senior in right of payment to our existing and future subordinated indebtedness. LIN TV and certain of our existing, or hereafter created or acquired, domestic subsidiaries guarantee the credit facilities on a senior basis. LIN Television and each of our subsidiary guarantors have granted a security interest in all or substantially all of our assets to secure the obligations under senior secured credit facility, and LIN TV Corp. has granted a security interest in its capital stock of LIN Television to secure such obligations.

        Our senior secured credit facility permits us to prepay loans and to permanently reduce the revolving credit commitments, in whole or in part, at any time. We are also obligated to make mandatory quarterly principal payments. In addition, our senior secured credit facility restricts the use of proceeds from asset sales not reinvested in our business and the use of proceeds from the issuance of debt (subject to certain exceptions), which must be used for mandatory prepayments of principal of the term loans.

        The credit agreement governing our senior secured credit facility also requires on an annual basis, following the delivery of our year-end financial statements, and commencing after the year ended December 31, 2012, mandatory prepayments of principal of the term loans based on a computation of excess cash flow for the preceding fiscal year, as more fully described in the credit agreement.

        On December 21, 2011, we and JPMorgan as Lender and Administrative Agent, signed an incremental term loan activation notice creating an incremental term loan facility pursuant to our existing credit agreement dated October 26, 2011, by and among us, JPMorgan, as Administrative Agent, and the banks and other financial institutions party thereto. The incremental term loan facility is a seven-year, $260 million term loan facility and is subject to the terms of our credit agreement. Borrowings under the incremental term loan facility were used (i) to pay the call price for our redemption of all of our remaining Senior Subordinated Notes, as described below, and (ii) to pay accrued interest, fees and expenses associated with the redemption. Borrowings under the incremental term loan facility bear interest at a rate based, at our option, on an adjusted LIBOR rate, plus an applicable margin of 3.75%, or an adjusted Base Rate, plus an applicable margin of 2.75%; provided that the adjusted LIBOR rate shall at no time be less than 1.25% per annum.

        The incremental term loan facility is a senior secured obligation and ranks senior in right of payment to our existing and future subordinated indebtedness. The incremental term loan facility is guaranteed and secured on the same basis as the other credit facilities under the credit agreement. If we do not refinance, redeem or discharge our Senior Notes on or prior to January 15, 2018, then, in such event, the maturity of the incremental term loan facility will be accelerated from December 21, 2018 to January 15, 2018.

        The following table summarizes certain key terms of our senior secured credit facility (in thousands):

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Notes to Consolidated Financial Statements (Continued)

Note 7—Long-term Debt (Continued)

2009 Senior Secured Credit Facility

        Borrowings under our 2009 senior secured credit facility bore an interest rate based on, at our option, either a) the LIBOR interest rate, or b) the ABR rate, which is an interest rate that is equal to the greatest of (i) the Prime Rate, (ii) the Federal Funds Effective Rate plus ¹/2 of 1 percent, or (iii) the one-month LIBOR rate plus 1%. In addition, the rate we selected bore an applicable margin rate of 3.75% or 2.75% for LIBOR based loans and ABR rate loans, respectively. Lastly, the unused portion of the revolving credit facility was subject to a commitment fee of 0.50% depending on our consolidated leverage ratio.

        During the year ended December 31, 2011, we paid the remaining balance of $9.6 million on the term loans outstanding under the 2009 senior secured credit facility. Additionally, our available revolving credit commitments decreased from $76.1 million to $48.7 million, based on a computation of excess cash flow for the fiscal year ended December 31, 2010. As a result, we recorded a loss on extinguishment of debt of $0.2 million during the year ended December 31, 2011, consisting of a write-down of deferred financing fees related to the revolving credit facility and term loans. Additionally, during the year ended December 31, 2010, we used proceeds from the issuance of our Senior Notes to repay $148.9 million of principal on our revolving credit facility and $45.9 million of principal on our term loans, plus accrued interest, pursuant to the mandatory prepayment terms of the credit agreement governing the terms of our 2009 senior secured credit facility. As a result, during the year ended December 31, 2010, we recorded a loss on extinguishment of debt of $2.7 million, consisting of a write-down of deferred financing fees related to the revolving credit facility and term loans.

8³/8% Senior Notes

        Our Senior Notes are unsecured but rank equally in right of payment with all senior secured indebtedness and senior to all subordinated indebtedness.

        The indenture governing our Senior Notes contains covenants limiting our ability and the ability of our restricted subsidiaries to, among other things, incur certain additional indebtedness and issue preferred stock; make certain dividends, distributions, investments and other restricted payments; sell certain assets; agree to any restrictions on the ability of restricted subsidiaries to make payments to us; create certain liens; merge, consolidate or sell substantially all of our assets; and enter into certain transactions with affiliates. These covenants are subject to certain exceptions and qualifications. The indenture also has change of control provisions which may require our Company to purchase our Senior Notes at a price equal to 101% of the principal amount thereof, together with accrued and unpaid interest. Additionally, if we sell assets under certain circumstances, we will be required to make an offer to purchase our Senior Notes at their face amount, plus accrued and unpaid interest, if any, through the purchase date.

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Notes to Consolidated Financial Statements (Continued)

Note 7—Long-term Debt (Continued)

6¹/2% Senior Subordinated Notes and 6¹/2% Senior Subordinated Notes—Class B

        During the year ended December 31, 2011, we redeemed $109.1 million of our 6¹/2% Senior Subordinated Notes, and $55.9 million of our 6¹/2% Senior Subordinated Notes—Class B. The redemption of these notes, at par, was funded in part by proceeds from the term loan, the revolving credit facility and cash on hand. As a result of this redemption, we recorded a loss on extinguishment of debt of $1.5 million associated with a write-down of deferred financing fees and unamortized discount to our consolidated statement of operations.

        On December 21, 2011, we issued notices to redeem all of the remaining Senior Subordinated Notes at par, plus accrued and unpaid interest through the redemption date. We used proceeds from the incremental term loan under the new senior secured credit facility as described above, and cash on hand to fund the aggregate redemption price. On December 21, 2011, we irrevocably deposited with the trustee the full amount of the redemption price of our Senior Subordinated Notes. As of December 31, 2011, the $255.2 million irrevocable deposit was classified as restricted cash in our consolidated balance sheets, and $251.0 million of our Senior Subordinated Notes, net of a discount of $1.2 million, remained outstanding. The redemption was completed on January 20, 2012, and as of that date, there were no Senior Subordinated Notes outstanding. As a result of this redemption, we expect to record a loss on extinguishment of debt of $2.1 million associated with a write-down of deferred financing fees and unamortized discount to our consolidated statement of operations during the three months ended March 31, 2012.

Other Debt

        During the year ended December 31, 2011, WBDT, a consolidated VIE, entered into a term loan with an unrelated third party in an original principal amount of $0.9 million to fund a portion of the purchase price for the acquisition of certain assets of WBDT-TV. This term loan matures in equal quarterly installments through May 2016. LIN Television fully and unconditionally guarantees this loan.

Repayment of Principal

        The following table summarizes scheduled future principal repayments on our debt agreements (in thousands):

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Notes to Consolidated Financial Statements (Continued)

Note 7—Long-term Debt (Continued)

        The fair values of our long-term debt are estimated based on quoted market prices for the same or similar issues, or based on the current rates offered to us for debt with the same remaining maturities. The carrying amounts and fair values of our long-term debt were as follows (in thousands):

Note 8—Derivative Financial Instruments

        We have historically used derivative financial instruments in the management of our interest rate exposure for our long-term debt. In accordance with our interest rate risk management policy, we do not enter into derivative instruments unless there is an underlying exposure, and we do not enter into derivative financial instruments for speculative trading purposes.

        During the second quarter of 2006, we entered into a contract to hedge a notional amount of the declining balances of our term loans under our 2009 senior secured credit facility (the "2006 interest rate hedge") to mitigate changes in our cash flows resulting from fluctuations in interest rates. The 2006 interest rate hedge effectively converted the floating LIBOR rate-based-payments to fixed payments at 5.33% plus the applicable margin rate calculated under our 2009 senior secured credit facility, which we terminated on October 26, 2011 concurrent with our entry into our new senior secured credit facility.

        The 2006 interest rate hedge was historically designated as a cash flow hedge, however, as a result of a repayment of $45.9 million of principal on our term loans under our 2009 senior secured credit facility as further described in Note 7—"Debt", the 2006 interest rate hedge ceased to be highly effective in hedging the variable rate cash flows. Since the hedge ceased to be highly effective in hedging the variable rate cash flows, all changes in fair value have been recorded in our consolidated statement of operations. Because the hedge ceased to be highly effective, we recorded a charge of $3.6 million for the portion of the fair value recognized in accumulated other comprehensive loss to our consolidated statement of operations for the year ended December 31, 2010. During the year ended December 31, 2009, we recognized a gain on derivative instruments of $(0.2) million in our consolidated statement of operations for ineffectiveness related to this hedge.

        The 2006 interest rate hedge expired on November 4, 2011. Accordingly, as of December 31, 2011, there is no amount related to the 2006 interest rate hedge included in our consolidated balance sheets. As of December 31, 2010, the fair value of the 2006 interest rate hedge liability was $2.0 million and is included in accrued expenses and other liabilities in our consolidated balance sheets. The fair value was calculated by using observable inputs (Level 2) prescribed by the three-level fair value hierarchy, which is calculated using the discounted expected future cash outflows from a series of three-month LIBOR strips through November 4, 2011, the same scheduled maturity date as our 2009 senior secured credit facility.

        As of December 31, 2011, we have a derivative outstanding with a fair value of zero as further described in Note 2—"Acquisitions".

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Notes to Consolidated Financial Statements (Continued)

Note 8—Derivative Financial Instruments (Continued)

        The following table summarizes our derivative activity (in thousands):

Note 9—Stock-Based Compensation

        We have several stock-based compensation plans, including our 1998 Option Plan, the Amended and Restated 2002 Stock Plan and the Third Amended and Restated 2002 Non-Employee Director Stock Plan (collectively, the "Stock Plans"), that permit us to grant non-qualified options in LIN TV's class A common stock or restricted stock units, which convert into LIN TV's class A common stock upon vesting, to certain directors, officers and key employees of our Company. Additionally, we have an Employee Stock Purchase Plan ("ESPP") that permits employees to purchase shares of LIN TV's class A common stock at a discount as further described below.

        Options granted under the Stock Plans vest over a four-year service period, unless otherwise designated by the Compensation Committee upon grant. Options expire ten years from the date of grant. We issue new shares of LIN TV's class A common stock when options are exercised or from shares that we repurchased pursuant to our Board authorized share repurchase program as further described in Note 12—"Stockholders' Equity". Restricted stock unit awards vest over a five-year service period, unless otherwise designated by the Compensation Committee upon grant. There were 6,148,752 shares authorized for grant under the various Stock Plans and 1,785,750 shares available for future grant as of December 31, 2011. Both the shares authorized and shares available exclude 1,552,983 shares under plans in effect prior to 2002 from which we do not intend to re-grant and consider unavailable for future grants.

        The following table presents the stock-based compensation expense included in our consolidated statements of operations as follows (in thousands):

        We did not capitalize any stock-based compensation expense for the years ended December 31, 2011, 2010 and 2009.

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Notes to Consolidated Financial Statements (Continued)

Note 9—Stock-Based Compensation (Continued)

        We have not yet recognized compensation expense relating to unvested employee stock options and restricted stock unit awards of $2.8 million and $9.9 million, respectively, which will be recognized over a weighted-average future period of approximately 1.3 years and 2.5 years, respectively.

        During the year ended December 31, 2011, we received $0.2 million from the exercise of stock options and $0.6 million from the purchase of LIN TV's class A common stock pursuant to our ESPP.

Stock Options

        The following table provides additional information regarding our stock options for the year ended December 31, 2011 as follows (in thousands, except per share data):

        As of December 31, 2011, the weighted-average remaining contractual life of the options outstanding and the options exercisable was 8.0 years and 7.6 years, respectively. Additionally, as of December 31, 2011, the aggregate intrinsic value of the options outstanding and the options exercisable was $6.4 million and $3.8 million, respectively. The intrinsic value in the table above represents the total pre-tax intrinsic value based on our closing price as of December 31, 2011, which would have been received by the option holders had all option holders exercised their options and immediately sold their shares on that date.

        The fair value of each stock option grant or modification is estimated on the date of grant or modification using a Black-Scholes valuation model, which incorporates the following assumptions:

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Notes to Consolidated Financial Statements (Continued)

Note 9—Stock-Based Compensation (Continued)

        On June 2, 2009, we completed an exchange offer which enabled employees and non-employee directors to exchange some or all of their outstanding options to purchase shares of LIN TV's class A common stock, for new options to purchase shares of LIN TV's class A common stock, on a one for one basis. A total of 257 employees participated in the exchange, in which options to purchase an aggregate of 2,931,285 shares of LIN TV's class A common stock were exchanged. The new options have an exercise price of $1.99 per share, equal to the closing price per share of LIN TV's class A common stock on June 2, 2009. The new stock options vest ratably over three years. We recognized stock-based compensation expense for this modification to our stock option agreements of $0.4 million, $0.8 million and $0.7 million for the years ended December 31, 2011, 2010 and 2009, respectively. We expect to record an additional $0.1 million of stock-based compensation expense for this modification during 2012.

Restricted Stock Unit Awards

        The following table provides additional information regarding the restricted stock unit awards for the year ended December 31, 2011 (in thousands, except per share data):

        The following table provides further information for both our restricted stock unit and stock option awards (in thousands):

Employee Stock Purchase Plan

        Under the terms of our 2010 ESPP, our eligible employees may have up to 10% of eligible compensation deducted from their pay to purchase shares of LIN TV's class A common stock. The purchase price of each share is 85% of the average of the high and low per share trading price of LIN TV's class A common stock on the NYSE on the last trading day of each month during the offering period. There were 350,000 shares authorized for grant under this plan and there were 81,230 shares available for future grant as of December 31, 2011. During the year ended December 31, 2011 and 2010, employees purchased 187,350 and 81,420 shares, respectively, at a weighted-average price of $3.38 and $3.92, respectively.

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Notes to Consolidated Financial Statements (Continued)

Note 10—Fair Value Measurements

        We record the fair value of certain financial assets and liabilities on a recurring basis. The following table summarizes the financial assets and liabilities measured at fair value in the accompanying consolidated financial statements using the prescribed three-level fair value hierarchy as of December 31, 2011 and 2010 (in thousands):

        The fair value of our deferred compensation related investments is based on the cash surrender values of life insurance policies underlying our supplemental income deferral plan, as well as the fair value of the investments selected by employees. The fair value of our deferred compensation related liabilities is determined based on the fair value of the investments selected by employees. For a description of how the fair value of our 2006 interest rate hedge was determined, see Note 8—"Derivative Financial Instruments."

        The following table details the change in fair value of our Level 3 liability for the year ended December 31, 2010 (in thousands):

        The equity value shortfall amount detailed in the table above is a liability that was incurred in connection with the acquisition of RMM on October 2, 2009 because the number of shares of class A common stock issued by LIN TV to the sellers was subject to an adjustment in the event that the value of the equity consideration was less than $4.5 million as of the six month anniversary of the acquisition (such difference, the equity value shortfall amount).

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Notes to Consolidated Financial Statements (Continued)

Note 11—Retirement Plans

401(k) Plan

        We provide a defined contribution plan ("401(k) Plan") for eligible employees. Effective January 1, 2010, we began making a 3% non-elective contribution for all eligible employees, which vests 100% after two years of service. Historically, we made contributions to the 401(k) Plan on behalf of employee groups that were not covered by our defined benefit retirement plan matching 50% of the employee's contribution up to 6% of the employee's total annual compensation. These contributions vested in 20% annual increments until the employee was 100% vested after five years of service. Company contributions to our 401(k) Plan were suspended during 2009 and were resumed effective January 1, 2010. We contributed $3.6 million, $3.5 million and $0.5 million to the 401(k) Plan in the years ended December 31, 2011, 2010 and 2009, respectively. Effective July 1, 2010, we also made available to certain employees, including our executive officers, the LIN Television Corporation Supplemental Income Deferral Plan. This plan provides benefits to highly compensated employees in circumstances in which the maximum limits established under the Employee Retirement Income Security Act of 1974 ("ERISA") and the Internal Revenue Code prevent them from receiving Company contributions. We contributed $0.2 million and $0.4 million to this plan during the years ended December 31, 2011 and 2010, respectively.

Retirement Plan

        We have historically provided a defined benefit retirement plan to our employees who did not receive matching contributions from our Company to their 401(k) Plan accounts. Our defined benefit plan was a non-contributory plan under which we made contributions either to: a) traditional plan participants based on periodic actuarial valuations, which are expensed over the expected average remaining service lives of current employees; or b) cash balance plan participants based on 5% of each participant's eligible compensation.

        Effective April 1, 2009, this plan was frozen and we do not expect to make additional benefit accruals to this plan, however we continue to fund our existing vested obligations. As a result of this action, during the year ended December 31, 2009, we recorded a net curtailment gain that included a $0.4 million charge related to prior service cost and a gain to our projected benefit obligation of $4.0 million as a result of the reduction of future compensation increases.

        We contributed $5.4 million, $5.4 million and $0.6 million to our pension plan during the years ended December 31, 2011, 2010 and 2009, respectively. We anticipate contributing $7.5 million to this plan in 2012.

        We record the unfunded status of our defined benefit plan as a liability. The plan assets and benefit obligations of our defined benefit plan are recorded at fair value as of December 31, 2011. Information

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Notes to Consolidated Financial Statements (Continued)

Note 11—Retirement Plans (Continued)

regarding the change in the projected benefit obligation, the accumulated benefit obligation and the change in the fair value of plan assets are as follows (in thousands):

        The following table includes the pension related accounts recognized on our consolidated balance sheets and the components of accumulated other comprehensive loss related to the net periodic pension benefit costs as follows (in thousands):

        The total net loss of $33.0 million, which is net of tax, relates to deferred actuarial losses from changes in discount rates, differences between actual and assumed asset returns, and differences between actual

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Notes to Consolidated Financial Statements (Continued)

Note 11—Retirement Plans (Continued)

and assumed demographic experience (rates of turnover, retirement rates, mortality rates and prior to the plan freeze, rates of compensation increases). During 2012, we expect to amortize net losses of $1.7 million, which are included in accumulated other comprehensive loss, net of tax, as of December 31, 2011.

        Components of net periodic pension benefit cost were (in thousands):

        Our expected future pension benefit payments for the next 10 years are as follows (in thousands):

        Weighted-average assumptions used to estimate our pension benefit obligations and to determine our net periodic pension benefit cost are as follows:

        For the discount rate for the year ended December 31, 2011, we used a custom bond modeler that develops a hypothetical portfolio of high quality corporate bonds, rated AA- and above by Standard & Poor's, that could be purchased to settle the obligations of the plan. The yield on this hypothetical portfolio represents a reasonable rate to value our plan liability. Prior to 2011, we used the Citigroup Pension Discount Curve to aid in the selection of our discount rate, which we believe reflects the weighted rate of a theoretical high quality bond portfolio consistent with the duration of the cash flows related to our pension liability.

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Notes to Consolidated Financial Statements (Continued)

Note 11—Retirement Plans (Continued)

        We considered the current levels of expected returns on a risk-free investment, the historical levels of risk premium associated with each of our pension asset classes, the expected future returns for each of our pension asset classes and then weighted each asset class based on our pension plan asset allocation to derive an expected long-term return on pension plan assets. During the year ended December 31, 2011, our actual rate of return on plan assets was 4.04%.

        Our investment objective is to achieve a consistent total rate-of-return that will equal or exceed our actuarial assumptions and to equal or exceed the benchmarks that we use for each of our pension plan asset classes. The following asset allocation is designed to create a diversified portfolio of pension plan assets that is consistent with our target asset allocation and risk policy:

        The following table summarizes our pension plan assets measured at fair value using the prescribed three-level fair value hierarchy as of December 31, 2011 and 2010 (in thousands):

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Notes to Consolidated Financial Statements (Continued)

Note 11—Retirement Plans (Continued)

 

        The guaranteed deposit account fair value is determined by multiplying the balance in the account by an established interest rate. The commingled pools, U.S. and International stock funds and U.S. bond funds consist of various funds that are valued at the net asset value of units held by the plan at year-end as determined by the custodian, based on fair value of the underlying securities. These methods may produce a fair value calculation that may not be indicative of net realizable value or reflective of future values. Furthermore, while we believe these valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine fair value of certain financial instruments could result in different fair value measurement as of the reporting date.

        The following table details the change in fair value of the Level 3 investments for the years ended December 31, 2011 and 2010 (in thousands):

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Notes to Consolidated Financial Statements (Continued)

Note 12—Stockholders' Equity

        On November 7, 2011, LIN TV's Board of Directors approved a stock repurchase program that authorizes LIN TV to repurchase up to $25 million of LIN TV's class A common stock over a 12 month period. The class A common stock acquired through the repurchase program will be held as treasury shares and may be used for general corporate purposes, including reissuances in connection with acquisitions, stock option exercises, or other employee and director stock plans. Pursuant to this authorization, during the year ended December 31, 2011, LIN TV repurchased approximately 0.8 million shares of LIN TV's class A common stock on the open market for an aggregate purchase price of $2.7 million.

        LIN TV's class B common stock is convertible into an equal number of shares of LIN TV's class A common stock in various circumstances. During the year ended December 31, 2011, approximately 0.1 million shares of LIN TV's class B common stock were converted into class A common stock. During the year ended December 31, 2010, none of LIN TV's class B common stock was converted into class A common stock.

        The balance of related after-tax components comprising accumulated other comprehensive loss are summarized below (in thousands):

Note 13—Restructuring

        During the years ended December 31, 2011, 2010 and 2009, we recorded restructuring charges of $0.7 million, $3.3 million and $0.5 million, respectively, as a result of the consolidation of certain activities at our stations and our corporate headquarters. During the years ended December 31, 2011, 2010 and 2009, we made cash payments of $1.1 million, $2.4 million and $0.5 million related to these restructuring actions. We expect to make cash payments of $0.5 million related to these restructuring actions during 2012.

        During 2008, we effected a restructuring that included a workforce reduction and the cancellation of certain syndicated television program contracts. The total charge for the plan was $12.9 million, including $4.3 million for a workforce reduction of 144 employees and $8.6 million for the cancellation of the contracts. We made cash payments of $0.1 million and $9.0 million during the years ended December 31, 2010 and 2009, respectively, related to these restructuring activities. During the year ended December 31, 2010, we recorded a restructuring benefit of $0.2 million related to changes in the estimated cash payments.

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Notes to Consolidated Financial Statements (Continued)

Note 13—Restructuring (Continued)

        The activity for these restructuring charges are as follows (in thousands):

Note 14—Related Party Transactions

        During the year ended December 31, 2010, we acquired a non-controlling investment in an interactive service provider that hosts our web sites for $2.0 million. During the years ended December 31, 2011, 2010 and 2009, we incurred charges of $2.4 million, $1.9 million and $0.8 million, respectively, and made cash payments of $2.2 million, $2.6 million and $1.4 million, respectively, to this provider for web hosting services and web site development and customization.

Note 15—Commitments and Contingencies

Commitments

        We lease land, buildings, vehicles and equipment pursuant to non-cancelable operating lease agreements and we contract for general services pursuant to non-cancelable operating agreements that expire at various dates through 2036. In addition, we have entered into commitments for future syndicated entertainment and sports programming. Future payments for these non-cancelable operating leases and agreements, and future payments associated with syndicated television programs as of December 31, 2011 are as follows (in thousands):

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Notes to Consolidated Financial Statements (Continued)

Note 15—Commitments and Contingencies (Continued)

        Rent expense, resulting from operating leases, was $1.5 million, $1.1 million and $1.4 million for the years ended December 31, 2011, 2010 and 2009, respectively.

Contingencies

GECC Note

        GECC provided debt financing for a joint venture between NBCUniversal and us, in the form of an $815.5 million non-amortizing senior secured note due 2023 bearing interest at an initial rate of 8% per annum until March 1, 2013 and 9% per annum thereafter. The GECC Note is an obligation of the joint venture. We have a 20% equity interest in the joint venture and NBCUniversal has the remaining 80% equity interest, in which we and NBCUniversal each have a 50% voting interest. NBCUniversal operates two television stations, KXAS-TV, an NBC affiliate in Dallas, and KNSD-TV, an NBC affiliate in San Diego, pursuant to a management agreement. LIN TV has guaranteed the payment of principal and interest on the GECC Note.

        In January 2011, Comcast Corporation acquired control of the business of NBCUniversal and now owns and controls 51% of NBCUniversal, LLC, while a wholly-owned subsidiary of General Electric Company ("GE") owns the remaining 49%. GECC remains a wholly-owned subsidiary of GE.

        In light of the adverse effect of the recent economic downturn on the joint venture's operating results, we entered into an agreement with NBCUniversal in 2009, which covered the period from March 6, 2009 through April 1, 2010 and in 2010 we entered into a second agreement, which covered the period from April 2, 2010 through April 1, 2011. These agreements provided that: (i) we and NBCUniversal waived the requirement that the joint venture maintain debt service reserve cash balances of at least $15 million; (ii) the joint venture would use a portion of its existing debt service reserve cash balances to fund interest payments on the GECC Note in 2009 and 2010; (iii) NBCUniversal agreed to defer its receipt of 2008, 2009 and 2010 management fees; and (iv) we agreed that if the joint venture does not have sufficient cash to fund interest payments on the GECC Note through April 1, 2011, we and NBCUniversal would each provide the joint venture with a shortfall loan on the basis of our percentage of economic interest in the joint venture.

        During the year ended December 31, 2010, pursuant to the shortfall funding agreements with NBCUniversal, we made shortfall loans in the aggregate principal amount of $4.1 million, representing our approximate 20% share of 2010 debt service shortfalls. Concurrent with our funding of the shortfall loans, NBCUniversal funded shortfall loans in the aggregate principal amounts of $15.9 million, in respect of its approximate 80% share of 2010 debt service shortfalls.

        On March 14, 2011, we and GE entered into an agreement (the "2011 Shortfall Funding Agreement") covering the period from April 2, 2011 through April 1, 2012. Under the terms of the 2011 Shortfall Funding Agreement, we agreed that if the joint venture does not have sufficient cash to fund interest payments on the GECC Note through April 1, 2012, we and GE would each provide the joint venture with a shortfall loan. Shortfall loans funded by LIN under the 2011 Shortfall Funding Agreement were calculated on the basis of our percentage of economic interest in the joint venture, and GE's share of shortfall loans were calculated on the basis of NBCUniversal's percentage of economic interest in the joint venture. Solely to enable the joint venture with NBCUniversal to obtain shortfall loans from GE, the joint venture (i) amended its credit agreement with GECC, (ii) amended the LLC Agreement governing the operation of the joint venture, and (iii) received the consent of Comcast Corporation to the terms and

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Notes to Consolidated Financial Statements (Continued)

Note 15—Commitments and Contingencies (Continued)

conditions on which GE provides its proportionate share of any joint venture debt service shortfall. NBCUniversal acknowledged and agreed to the terms of the 2011 Shortfall Funding Agreement.

        During the year ended December 31, 2011, pursuant to the shortfall funding agreement with GE, we funded shortfall loans in the aggregate principal amount of $2.5 million, representing our approximate 20% share of 2011 debt service shortfalls, and GE funded shortfall loans in the aggregate principal amount of $9.7 million, representing its approximate 80% share in 2011 debt service shortfalls.

        Because of anticipated future cash shortfalls at the joint venture, on March 5, 2012, we and GE entered into an agreement covering the period from April 2, 2012 through April 1, 2013. Under the terms of the 2012 Shortfall Funding Agreement (the "2012 Shortfall Funding Agreement"), we agreed that if the joint venture does not have sufficient cash to fund interest payments on the GECC Note through April 1, 2013, we and GE would each provide the joint venture with a shortfall loan. Any shortfall loans funded by us under the 2012 Shortfall Funding Agreement will be calculated on the basis of our percentage of economic interest in the joint venture, and GE's share of shortfall loans will be calculated on the basis of NBCUniversal's percentage of economic interest in the joint venture. GE's obligation to fund shortfall loans under the 2012 Shortfall Funding Agreement is conditioned upon the receipt of the consent of Comcast Corporation to the terms and conditions on which GE provides its proportionate share of any shortfall; provided that Comcast's consent may not be unreasonably withheld. NBCUniversal has acknowledged and agreed to the terms of the 2012 Shortfall Funding Agreement.

        Under the terms of the joint venture's TV Master Service Agreement with NBCUniversal, management fees owed by the joint venture to NBCUniversal will continue to accrue, but are not payable if any existing joint venture shortfall loans remain outstanding.

        We recognize shortfall funding liabilities to the joint venture on our consolidated balance sheets when those liabilities become both probable and estimable. These liabilities become probable and estimable when joint venture management provides us with budget or forecast information of operating cash flows and working capital needs indicating that a debt service shortfall is probable to occur, and for periods beyond joint venture management's forecast, we develop our own internal estimates of debt service shortfalls. Additionally, we accrue shortfall funding liabilities only when we have reached or intend to reach a shortfall funding agreement covering the period for which we estimate debt service shortfalls to occur.

        Prior to the issuance of these financial statements, joint venture management provided us with a final 2012 budget. Also, during the year ended December 31, 2011, NBCUniversal publicly discussed its intent to secure additional retransmission consent fees for the NBC owned television stations, which would include the joint venture stations that comprise SVO.

        Based on that information, we believe the joint venture's operating results in 2012 will improve as a result of, among other things, the upcoming 2012 election cycle, and NBC's broadcast of the 2012 Summer Olympics and Superbowl XLVI. The joint venture's 2012 budget calls for capital investments at the joint venture stations that will largely offset the expected 2012 increases in operating cash flows. As a result, we expect the joint venture to require additional shortfall loans in 2012 and into 2013. While there can be no assurances, we believe, that beginning in 2013, operating results will improve as a result of further economic recovery, forecasted growth in retransmission consent fees, and further growth in digital revenues. Based on our estimate of our probable shortfall obligations during 2011, 2012 and into 2013, during the year ended December 31, 2011 we recognized contingent liabilities of $4.7 million.

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LIN Television Corporation

Notes to Consolidated Financial Statements (Continued)

Note 15—Commitments and Contingencies (Continued)

        As of December 31, 2011, we estimate our approximate 20% share of debt service shortfalls to be $4.1 million for 2012 and into 2013. We believe that cash shortfalls beyond the amounts currently accrued are not probable. However, our prospective shortfall obligations could vary from our estimate based upon changes in the performance of the joint venture stations and any changes to the proportionate share of each party's debt service shortfall. During the year ended December 31, 2011, based on our estimate of our probable shortfall obligations during 2011, 2012 and into 2013, we recognized a contingent liability of $4.7 million for the amounts that we expect to loan to SVH pursuant to the shortfall funding agreements with GE.

        Because of uncertainty surrounding the joint venture's ability to repay shortfall loans, we concluded that it was more likely than not that the amounts recognized during the years ended December 31, 2011 and 2009 for accrued shortfall loans of $4.7 million and $6.0 million, respectively, will not be recovered within a reasonable period of time. Accordingly, we recognized charges of $4.7 million and $6.0 million, to reflect the impairment of the shortfall loans, which were classified as share of loss in equity investments in our consolidated statement of operations, during the years ended December 31, 2011 and 2009, respectively. Therefore, the amounts receivable under the shortfall loans, and all accrued interest due from the joint venture, are carried at zero on our consolidated balance sheets. Should there be sufficient evidence in the future to suggest that collectability of the shortfall loans and accrued interest is reasonably certain, we would reverse the previously recognized impairment charges, reestablish notes receivable for all previously funded and accrued shortfall loans to the joint venture, and establish accrued interest receivable for all previously funded shortfall loans to the joint venture.

        Our ability to honor our shortfall loan obligations under the 2012 Shortfall Funding Agreement is limited by certain covenants contained in our senior secured credit facility and the indentures governing our Senior Notes. Based on our 2012 and 2013 estimate of debt service shortfalls at the joint venture, and our forecast of total leverage and consolidated EBITDA during 2012 and into 2013, we expect to have the capacity within these restrictions to provide funding to the joint venture for the $4.1 million accrued shortfall liability.

        As of December 31, 2011, we had availability under applicable debt covenants to fund future shortfall loans as follows: (i) $48.9 million of availability under our senior secured credit facility, and (ii) $147.5 million of availability under the indenture governing our Senior Notes.

        The possibility exists that debt service shortfalls at the joint venture could exceed current expectations, including the possibility that neither GE nor Comcast will continue to fund a share of such debt service shortfall loans after April 1, 2013. Should circumstances arise in which we desire to make shortfall loans to the joint venture in excess of the limitations imposed by the covenants contained in our senior secured credit facility or the indentures, we could seek an amendment or waiver of such limitations, but there is no assurance that we would be able to obtain such amendment or waiver on a timely basis, or at all, or on terms satisfactory to us. If we are unable to make shortfall payments, the joint venture may be unable to fund interest obligations under the GECC Note, resulting in an event of default.

        An event of default under the GECC Note would occur if the joint venture fails to make any scheduled interest payment within 90 days of the date due, or fails to pay the principal amount on the maturity date in 2023. If an event of default occurs, GECC could accelerate the maturity of the entire amount due under the GECC Note. Other than the acceleration of the principal amount upon an event of default, prepayment of the principal of the note is prohibited unless agreed upon by both NBCUniversal and LIN TV. Upon an event of default under the GECC Note, GECC's only recourse would be to the joint

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Notes to Consolidated Financial Statements (Continued)

Note 15—Commitments and Contingencies (Continued)

venture, our equity interest in the joint venture and, after exhausting all remedies against the assets of the joint venture and the other equity interests in the joint venture, to LIN TV pursuant to its guarantee of the full amount of the GECC Note.

        Under the terms of its guarantee of the GECC Note, LIN TV would be required to make a payment for an amount to be determined upon occurrence of the following events: (i) there is an event of default; (ii) the default is not remedied; and (iii) after GECC exhausts all remedies against the assets of the joint venture, the total amount realized upon exercise of those remedies is less than the $815.5 million principal amount of the GECC Note. Upon the occurrence of such events, the amount owed by LIN TV to GECC pursuant to the guarantee would be calculated as the difference between (i) the total amount at which the joint venture's assets were sold and (ii) the principal amount and any unpaid interest due under the GECC Note. As of December 31, 2011, we estimate the fair value of the television stations in the joint venture to be approximately $118 million less than the outstanding balance of the GECC note of $815.5 million.

        Although we believe the probability is remote that there would be an event of default and therefore an acceleration of the principal amount of the GECC Note, there can be no assurances that such an event of default will not occur. There are no financial or similar covenants in the GECC Note. In addition, since both GE and LIN Television have agreed to fund interest payments through April 1, 2013, if the joint venture is unable to generate sufficient cash to service interest payments on the GECC Note, GE and LIN Television are able to control the occurrence of a default under the GECC Note. Since 2009, LIN Television and its joint venture partners have prevented the occurrence of a default by entering into shortfall funding agreements and funding shortfall loans to the joint venture as further described above.

        If an event of default occurs under the GECC Note, LIN TV, which conducts all of its operations through its subsidiaries, could experience material adverse consequences, including:

•

GECC, after exhausting all remedies against the joint venture, could enforce its rights under the guarantee, which could cause LIN TV to determine that LIN Television should seek to sell material assets owned by it in order to satisfy LIN TV's obligations under the guarantee;



•

GECC's initiation of proceedings against LIN TV under the guarantee could result in a change of control or other material adverse consequences to LIN Television, which could cause an acceleration of LIN Television's senior secured credit facility and other outstanding indebtedness; and



•

if the GECC Note is prepaid because of an acceleration on default or otherwise, or if LIN TV is released from its obligation, LIN TV would realize a substantial tax gain of approximately $815.5 million related to its deferred gain associated with the formation of the joint venture. This amount of gain, exclusive of any potential utilization of net operating loss carryforwards, would be subject to U.S. Federal and various State tax rates of 35% and approximately 1% (net of Federal benefit), respectively.

Litigation

        We are involved in various claims and lawsuits that are generally incidental to our business. We are vigorously contesting all of these matters. The outcome of any current or future litigation cannot be accurately predicted. We record accruals for such contingencies to the extent that we conclude it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. No estimate of the possible loss or range of loss can be made at this time because the inherently unpredictable

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Notes to Consolidated Financial Statements (Continued)

Note 15—Commitments and Contingencies (Continued)

nature of legal proceedings may be exacerbated by various factors, including: (i) the damages sought in the proceedings are unsubstantiated or indeterminate; (ii) discovery is not complete; (iii) the proceeding is in its early stages; (iv) the matters present legal uncertainties; (v) there are significant facts in dispute; or (vi) there is a wide range of potential outcomes. Although the outcome of these and other legal proceedings cannot be predicted, we believe that their ultimate resolution will not have a material adverse effect on us.

Note 16—Income Taxes

        The income before income taxes was solely from domestic operations. The (benefit from) provision for income taxes consists of the following (in thousands):

        The following table reconciles the amount that would be calculated by applying the 35% federal statutory rate to income before income taxes to the actual (benefit from) provision for income taxes (in thousands):

        The increase from state tax law changes, net of federal tax benefit, is primarily a result of state tax legislation enacted in Michigan in May 2011, which repealed the Michigan business tax ("MBT"), and implemented a corporate income tax instead, effective January 2012. As a result of the elimination of the

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Notes to Consolidated Financial Statements (Continued)

Note 16—Income Taxes (Continued)

MBT, certain future tax deductions that were available to be utilized beginning in 2015, and had been recognized as deferred tax assets in our financial statements, will not be deductible. Therefore, during the year ended December 31, 2011, we recognized incremental deferred income tax expense of $5.1 million, net of federal benefit, for the reversal of these previously established deferred tax assets.

        The components of the net deferred tax liability are as follows (in thousands):

        We maintain a valuation allowance related to our deferred tax asset position when management believes it is more likely than not that the deferred tax assets will not be realized in the future. Our valuation allowance was $23.4 million as of December 31, 2011, which represents a decrease of $36.6 million for the year ended December 31, 2011. This decrease is primarily attributable to the reversal of $35.1 million of the Company's federal valuation allowance relating to 1999 to 2002 net operating losses and the reversal of $1.0 million of the Company's state valuation allowance relating to 2002 to 2010 net operating losses. These valuation allowances were reversed primarily due to our recent history of taxable income, and our projected ability to generate sufficient taxable income prior to the expiration of those net operating loss carryforwards. Components of our valuation allowance were:

•

State net operating loss carryforwards of $18.1 million;



•

State deferred tax assets of $0.2 million recorded in connection with the acquisitions of stations in 2005 and 2006; and



•

State deferred tax assets of $5.1 million related to the impairment of broadcast licenses and goodwill.

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Notes to Consolidated Financial Statements (Continued)

Note 16—Income Taxes (Continued)

        As of December 31, 2011, we had federal net operating loss carryforwards of approximately $365 million that begin to expire in 2020. Additionally, we had state net operating loss carryforwards that vary by jurisdiction (tax effected, net of federal benefit) of $18.1 million, expiring through 2031.

        The Company's uncertain tax positions for the years ended December 31, 2011, 2010, and 2009 is limited to certain unrecognized state benefits totaling $26.4 million, $26.6 million and $24.5 million, respectively. The annual change reflects additional state benefits offset by expiring losses of $0.5 million for 2011 and 2010. We file a consolidated federal income tax return and we file numerous other consolidated and separate income tax returns in U.S. state jurisdictions. Tax years 2007-2010 remain open to examination by major taxing jurisdictions.

Note 17—Accrued Expenses

        Accrued expenses consisted of the following (in thousands):

Note 18—Subsequent Events

        On January 3, 2012, we entered into an agreement for the sale of substantially all of the assets of WUPW-TV to WUPW, LLC, and on February 16, 2012, we completed the sale of WWHO-TV to Manhan Media, Inc., both as further described in Note 3—"Discontinued Operations".

        On January 20, 2012, we completed the redemption of our remaining Senior Subordinated Notes at par, plus accrued and unpaid interest through the redemption date as further described in Note 7—"Debt".

        On March 5, 2012, because of anticipated future debt service shortfalls at the NBCUniversal joint venture, we and GE entered into the 2012 Shortfall Funding Agreement. For further information on the 2012 Shortfall Funding Agreement see Note 15—"Commitments and Contingencies".

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Notes to Consolidated Financial Statements (Continued)

Note 19—Unaudited Quarterly Data

 

Note 20—Supplemental Disclosure of Cash Flow Information

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LIN Television Corporation

Notes to Consolidated Financial Statements (Continued)

Note 21—Valuation and Qualifying Accounts

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Schedule I—Condensed Financial Information of the Registrant

LIN TV Corp.

Condensed Balance Sheets

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LIN TV Corp.

Condensed Statements of Operations

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LIN TV Corp.

Condensed Statements of Cash Flows

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STATION VENTURE HOLDINGS, LLC
(A Limited Liability Company)

Financial Statements

As of December 31, 2011 and 2010 and for each of the
three fiscal periods in the years ended December 31, 2011

(And Independent Auditors' Reports)

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INDEPENDENT AUDITORS' REPORT

To the Members of Station Venture Holdings, LLC:

        We have audited the accompanying balance sheet of Station Venture Holdings, LLC (the "Company") as of December 31, 2011, and the related statements of operations, members' deficit, and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

        We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

        In our opinion, such 2011 financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2011, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

March 14, 2012

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Independent Auditors' Report

To the Members of Station Venture Holdings, LLC:

        We have audited the accompanying balance sheet of Station Venture Holdings, LLC (a limited liability company) (the Company) as of December 31, 2010, and the related statements of operations, members' deficit, and cash flows for each of the years in the two-year period ended December 31, 2010. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

        We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Station Venture Holdings, LLC as of December 31, 2010, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2010 in conformity with U.S. generally accounting principles generally.

March 15, 2011

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STATION VENTURE HOLDINGS, LLC
(A Limited Liability Company)

Balance Sheets

December 31, 2011 and 2010

(In thousands)

   

See accompanying notes to financial statements.

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STATION VENTURE HOLDINGS, LLC
(A Limited Liability Company)

Statements of Operations

Years ended December 31, 2011, 2010, and 2009

(In thousands)

   

See accompanying notes to financial statements.

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STATION VENTURE HOLDINGS, LLC
(A Limited Liability Company)

Statements of Members' Deficit

Years ended December 31, 2011, 2010, and 2009

(In thousands)

   

See accompanying notes to financial statements.

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STATION VENTURE HOLDINGS, LLC
(A Limited Liability Company)

Statements of Cash Flows

Years ended December 31, 2011, 2010, and 2009

(In thousands)

   

See accompanying notes to financial statements.

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STATION VENTURE HOLDINGS, LLC
(A Limited Liability Company)

Notes to Financial Statements

December 31, 2011, 2010, and 2009

(Dollars in thousands)

(1) Descriptions of Business and Summary of Significant Accounting Policies

(a)    Description of Business

        Station Venture Holdings, LLC ("the Company") is a Delaware limited liability company incorporated in 1998. The Company is 79.62% owned by NBC Telemundo License LLC ("NBCTL"), an indirect subsidiary of NBCUniversal Media, LLC ("NBCUniversal") and 20.38% owned by LIN Television of Texas, LP ("LIN-Texas"), a wholly owned subsidiary of LIN Television ("LIN TV") (collectively, "the Members"). Voting control of the Company is shared equally between NBCTL and LIN-Texas.

        On January 28, 2011, NBC Universal, Inc. ("NBCU"), General Electric Company ("GE") and Comcast Corporation ("Comcast") closed a transaction in which Comcast acquired control of the business of NBCU and formed a new company named NBCUniversal. Comcast now owns 51% of NBCUniversal and GE indirectly owns the remaining 49%. As a result of this transaction, on January 28, 2011, GE indemnified NBCUniversal for all liabilities incurred as a result of the term loan, or under any related credit support, risk of loss or similar arrangement in existence prior to the closing of the transaction. The impact of the acquisition (push-down accounting) is not permitted to be and has not been reflected in the Company's financial statements.

        As of December 31, 2010, NBCU was owned 87.7% by a wholly-owned subsidiary of GE, and 12.3% by a wholly-owned subsidiary of Vivendi S.A. ("Vivendi").

        The Company holds a noncontrolling 99.75% limited partnership interest in Station Venture Operations, LP ("Station Venture Operations"). Under the terms of the Company's LLC agreement, the Members of the Company have agreed to maintain certain cash levels to cover interest and principal payments. Furthermore, the Company is solely liable for any loan or related agreement, debt obligation, or liability and no Member is personally obligated, solely as result of being a Member.

Going Concern

        The Company currently does not anticipate that its interest in Station Venture Operations will generate sufficient cash flow to meet its interest obligations under its $815,500 term loan ("the Note") due to General Electric Capital Corporation ("GECC"), a wholly owned subsidiary of GE. As such, the Company's Members have indefinitely waived the requirement that the Company maintain debt service reserve cash balances to fund interest payments on the Note. The Company has also received support letters from GE and LIN TV stating that they each will provide funding in an amount equal to the difference between the cash available and the interest payable under the Note pursuant to the Credit Agreement dated as of March 2, 1998 through April 1, 2013 based on the proportional ownership interests of NBCTL and LIN-Texas. During the year ended December 31, 2011 and 2010, the Company received $12,184 and $20,012, respectively, from GE and LIN TV to fund interest payments on the Note (see Note 3).

        Our ability to avoid an event of default under the Note is partially contingent on the willingness and ability of GE and LIN TV to continue to fund the interest payment shortfall under the Note. Upon an event of default under the Note, GECC's recourse includes our 99.75% limited partnership interest in

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STATION VENTURE HOLDINGS, LLC
(A Limited Liability Company)

Notes to Financial Statements (Continued)

December 31, 2011, 2010, and 2009

(Dollars in thousands)

(1) Descriptions of Business and Summary of Significant Accounting Policies (Continued)

Station Venture Operations, the assets of Station Venture Operations, and after exhausting all remedies against the Company and Station Venture Operations, to LIN TV pursuant to its guarantee of the Note.

        The principal amount of the Note currently exceeds the fair value of the net assets of Station Venture Operations, and therefore our 99.75% limited partnership interest in Station Venture Operations, as of December 31, 2011. Although we do not believe there will be an event of default and therefore an acceleration of the principal amount of the Note during 2012, there can be no assurances that such an event of default will not occur.

        The term of the Company ends on March 2, 2023 unless dissolved earlier.

        Net earnings and losses from operations and distributions are allocated to the Members in proportion to each Member's relative ownership interest. Gain or loss upon sale of the Company's assets is to be allocated in a manner that will cause the Members' capital accounts to remain in proportion to the Members' relative ownership percentages prior to distribution of the proceeds from the sale.

(b)    Accounting Principles

        The Company's financial statements are prepared in conformity with U.S. generally accepted accounting principles (GAAP).

(c)    Cash

        Cash balances are exposed to a concentration of credit risk. Concentration of credit risk is limited, as the Company maintains primary banking relationships with high-credit quality and federal insured institutions. The Company has not experienced any losses in such accounts.

(d)    Limited Partnership Interest in Station Venture Operations, LP

        The Company's limited partnership interest in Station Venture Operations is a noncontrolling investment and, accordingly, is accounted for by the equity method. NBCTL, as the General Partner, maintains all voting control in Station Venture Operations, subject to certain protective rights held by the Company.

        The Company regularly reviews its limited partnership interest in Station Venture Operations for impairment based on both quantitative and qualitative criteria that include the extent to which the carrying value exceeds its related market value, the duration of the market decline, its intent and ability to hold to maturity or until forecasted recovery, and the financial health and specific prospects of Station Venture Operations.

(e)    Fair Value of Financial Instruments

        The carrying amounts of cash and accrued interest payable are considered to be representative of their respective fair values because of the short-term nature of these financial instruments.

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STATION VENTURE HOLDINGS, LLC
(A Limited Liability Company)

Notes to Financial Statements (Continued)

December 31, 2011, 2010, and 2009

(Dollars in thousands)

(1) Descriptions of Business and Summary of Significant Accounting Policies (Continued)

(f)    Income Taxes

        As a limited liability company, the Company is treated as a partnership for federal and state income tax purposes and, accordingly, its income or loss is taxable directly to its Members.

(g)    Use of Estimates

        The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires the Company to make estimates and assumptions that affect reported amounts and related disclosures. Actual results could differ from those estimates.

(2) Limited Partnership Interest in Station Venture Operations, LP

        The Company holds a 99.75% limited partnership interest in Station Venture Operations. Station Venture Operations operates two television stations serving the San Diego, California and Dallas-Ft. Worth, Texas areas. Initial capital contributions in Station Venture Operations totaled $254,222 of which, $252,012 was contributed by the Company and $2,210 was contributed by NBCTL.

        Summarized balance sheets for Station Venture Operations at December 31, 2011 and 2010 are as follows:

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STATION VENTURE HOLDINGS, LLC
(A Limited Liability Company)

Notes to Financial Statements (Continued)

December 31, 2011, 2010, and 2009

(Dollars in thousands)

(2) Limited Partnership Interest in Station Venture Operations, LP (Continued)

        Summarized statements of operations for Station Venture Operations for each of the years in the three-year period ended December 31, 2011 are as follows:

(3) Related-Party Notes Payable

        Related-party notes payable at December 31, 2011 and 2010 is as follows:

        At December 31, 2011 and 2010, the Note payable of $815,500, due March 2023, represents long-term debt contributed by LIN-Texas upon formation of the Company. The Company may, without penalty, prepay this Note payable. This Note payable is guaranteed by LIN TV. Occurrence of any event of default allows GECC to increase the interest rate, accelerate payment of the loan and/or terminate future funding, in addition to the exercise of legal remedies, including foreclosing on collateral. Substantially all of the assets of Station Venture Operations are pledged to GECC as collateral.

        At December 31, 2011 and 2010, loans from GE and LIN TV to fund interest payments on the Note ("Shortfall Loans") totaled $32,196 and $20,012, respectively. Shortfall Loans are made in proportion to each Member's interest in the Company. Interest on the Shortfall Loans accrues at 8% and is payable quarterly as long as the loans remain outstanding and cash is available. The Shortfall Loans are to be repaid in the event that available cash exceeds the amount needed to pay interest on the Note to GECC, and will first be applied to the principal and then to accrued interest.

        Interest expense totaled $67,998 (including $1,853 related to the Shortfall Loans) for the year ended December 31, 2011, $67,248 (including $1,101 related to the Shortfall Loans) for the year ended December 31, 2010 and $66,146 for the year ended December 31, 2009. At December 31, 2011 and 2010, interest payable totaled $3,498 (including $2,954 related to the Shortfall Loans) and $1,645 (including $1,101 related to the Shortfall Loans), respectively.

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STATION VENTURE HOLDINGS, LLC
(A Limited Liability Company)

Notes to Financial Statements (Continued)

December 31, 2011, 2010, and 2009

(Dollars in thousands)

(4) Commitments and Contingencies

        From time to time, the Company may be subject to routine litigation incidental to its business. Management believes, based in part on the advice of legal counsel, that the results of pending legal proceedings will not materially affect the Company's financial position, results of operations, or liquidity.

(5) Subsequent Events

        We evaluate subsequent events that have occurred through the date our financial statements were available to be issued. As such we have evaluated events that have occurred through March 14, 2012.

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STATION VENTURE OPERATIONS, LP
(A Limited Partnership)

Financial Statements

As of December 31, 2011 and 2010 and for each of the
three fiscal periods in the years ended December 31, 2011

(And Independent Auditors' Reports)

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INDEPENDENT AUDITORS' REPORT

To the Managing Director of Station Venture Operations, LP:

        We have audited the accompanying balance sheet of Station Venture Operations, LP (the "Company") as of December 31, 2011, and the related statements of operations, partners' capital and cash flows for the year ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

        We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

        In our opinion, such 2011 financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2011, and the results of its operations and its cash flows for the year in conformity with accounting principles generally accepted in the United States of America.

March 14, 2012

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Independent Auditors' Report

To the Managing Director of Station Venture Operations, LP:

        We have audited the accompanying balance sheet of Station Venture Operations, LP (a limited partnership) as of December 31, 2010, and the related statements of operations, partners' capital and cash flows for each of the years in the two-year period ended December 31, 2010. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.

        We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Station Venture Operations, LP as of December 31, 2010, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2010 in conformity with U.S. generally accepted accounting principles.

March 15, 2011

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STATION VENTURE OPERATIONS, LP
(A Limited Partnership)

Balance Sheets

December 31, 2011 and 2010

(In thousands)

   

See accompanying notes to financial statements.

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STATION VENTURE OPERATIONS, LP
(A Limited Partnership)

Statements of Operations

Years ended December 31, 2011, 2010, and 2009

(In thousands)

   

See accompanying notes to financial statements.

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STATION VENTURE OPERATIONS, LP
(A Limited Partnership)

Statements of Partners' Capital

Years ended December 31, 2011, 2010, and 2009

(In thousands)

   

See accompanying notes to financial statements.

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STATION VENTURE OPERATIONS, LP
(A Limited Partnership)

Statements of Cash Flows

Years ended December 31, 2011, 2010 and 2009

(In thousands)

   

See accompanying notes to financial statements.

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STATION VENTURE OPERATIONS, LP
(A Limited Partnership)

Notes to Financial Statements

For the three years ended, December 31, 2011, 2010, and 2009

(Dollars in thousands)

(1) Description of Business and Summary of Significant Accounting Policies

(a)    Description of Business

        Station Venture Operations, LP ("the Partnership") is a Delaware limited partnership. The Partnership operates two television stations, KNSD and KXAS. KNSD serves the San Diego, California area and KXAS serves the Dallas—Ft. Worth, Texas area. At December 31, 2011 and 2010, Station Venture Holdings, LLC ("the LLC"), a Delaware limited liability company, holds a direct 99.75% interest in the Partnership, and NBCUniversal Media, LLC ("NBCUniversal"), through its indirect subsidiary, NBC Telemundo License LLC ("NBCTL") holds an indirect interest in the Partnership of 0.25%. NBCUniversal and LIN Television of Texas, LP each hold an indirect interest in the LLC of 79.62% and 20.38%, respectively.

        On January 28, 2011, NBC Universal, Inc. ("NBCU"), General Electric Company ("GE") and Comcast Corporation ("Comcast") closed a transaction in which Comcast acquired control of the business of NBCU and formed a new company named NBCUniversal. Comcast now owns 51% of NBCUniversal and GE indirectly owns the remaining 49%. In conjunction with this transaction, on January 28, 2011, GE indemnified NBCUniversal for all liabilities of the LLC incurred as a result of the term loan, or under any related credit support, risk of loss or similar arrangement in existence prior to the closing of the transaction. The impact of the acquisition (push-down accounting) is not permitted to be and has not been reflected in the Partnership's financial statements.

        As of December 31, 2010, NBCU was owned 87.7% by a wholly owned subsidiary of GE, and 12.3% by a wholly owned subsidiary of Vivendi S.A. ("Vivendi").

        The Partnership operates under a network operating agreement with NBCUniversal. NBCTL, as general partner, manages the day-to-day operations of the Partnership, subject to certain limited approval rights granted to the limited partner, the LLC, pursuant to the Partnership's limited partnership agreement ("LP agreement"). The term of the Partnership ends March 2, 2023, unless dissolved earlier.

        Net earnings and losses from operations and distributions of the Partnership are allocated to the partners in proportion to each partner's relative ownership interest. Gain or loss upon sale of the Partnership's assets is to be allocated in a manner that will cause the partners' capital accounts to be in proportion to the partners' relative ownership percentages prior to distribution of the proceeds from the sale.

        Substantially all of the assets of the Partnership are pledged as collateral under the terms of the LLC's $815,500 term loan ("the Note") to GE Capital Corporation, a subsidiary of GE. The LLC has no source of income other than its interest in the earnings of the Partnership and the LLC believes that the Partnership's earnings may not be sufficient to meet the LLC's interest obligation under the note. As such, the LLC has received parental support letters from GE and LIN Television Corporation, stating that they each will provide funding in an amount equal to the difference between the cash available and the interest payable under the Note pursuant to the Credit Agreement dated as of March 2, 1998 through April 1, 2013 based on the proportional ownership interests of NBCTL and LIN Television of Texas, LP.

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STATION VENTURE OPERATIONS, LP
(A Limited Partnership)

Notes to Financial Statements (Continued)

For the three years ended, December 31, 2011, 2010, and 2009

(Dollars in thousands)

(1) Description of Business and Summary of Significant Accounting Policies (Continued)

(b)    Accounting Principles

        Partnership financial statements are prepared in conformity with U.S. generally accepted accounting principles (GAAP).

(c)    Allowance for Doubtful Accounts

        The Partnership makes estimates regarding the collectibility of accounts receivable based on accumulated experience.

(d)    Program Rights

        Cost to acquire programming is deferred until the earlier of acquisition or commencement of the license period when the programming is available for use. Programming costs are amortized in the period in which the associated programs are aired, and such costs are stated at the lower of amortized cost or net realizable value. Actual results could differ from estimates of net realizable value.

(e)    Property and Equipment

        Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are determined using the straight-line method over the estimated useful lives of the assets, generally 10 to 40 years for buildings and 3 to 10 years for furniture, fixtures, and equipment. Leasehold improvements are amortized over the shorter of the economic useful life of the improvement or the lease period.

(f)    Goodwill

        We assess the recoverability of our goodwill annually at the reporting unit level, or more frequently whenever events or substantive changes in circumstances indicate that the asset might be impaired. A reporting unit is the operating segment, or a business one level below that operating segment (the component level), if discrete financial information is prepared and regularly reviewed by management. However, components are aggregated as a single reporting unit if they have similar economic characteristics. The assessment of recoverability considers if the carrying amount of a reporting unit exceeds its fair value, in which case an impairment charge is recorded to the extent the carrying amount of the reporting unit's goodwill exceeds its implied fair value. The Partnership uses discounted cash flows to establish fair values. When available and as appropriate, comparative market multiples are used to corroborate discounted cash flow results. When all or a portion of a reporting unit is disposed of, goodwill is allocated to the gain or loss on disposition based on the relative fair values of the business disposed of and the portion of the reporting unit that will be retained.

(g)    Revenue Recognition

        The Partnership's primary source of revenue is television advertising and network compensation. Television advertising sales are recorded as revenue when advertisements are aired, net of provision for any

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STATION VENTURE OPERATIONS, LP
(A Limited Partnership)

Notes to Financial Statements (Continued)

For the three years ended, December 31, 2011, 2010, and 2009

(Dollars in thousands)

(1) Description of Business and Summary of Significant Accounting Policies (Continued)

viewer shortfalls (makegoods) and agency commissions. NBC network compensation is recognized when the Partnership's stations broadcast specific network television programs based upon a negotiated value for each program.

(h)    Advertising

        Advertising costs are expensed as incurred. Advertising costs included in selling, general, and administrative expenses totaled $318, $347, and $181 for the years ended December 31, 2011 2010, and 2009, respectively.

(i)    Income Taxes

        The Partnership is not subject to federal income tax as the income of the partnership is taxable to its partners. For Texas Franchise Tax purposes, the Partnership is considered a taxable entity. It is expected that the Texas Franchise Tax return of the partnership will be filed on a combined basis with NBCUniversal. On the basis of an informal tax sharing agreement with NBCUniversal, the Partnership has computed its Texas Franchise Tax on a separate company basis including only its activities.

(j)    Impairment of Long-lived Assets

        The Partnership reviews other long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be recoverable. Such assets are tested for impairment based on undiscounted cash flows and, if impaired, written down to fair value based on either discounted cash flows, quoted market prices when available, or appraised values, as appropriate.

(k)    Fair Value of Financial Assets and Liabilities

        The carrying amounts of cash, accounts receivable, other assets, accounts payable, and other current liabilities are considered to be representative of their respective fair values because of the short-term nature of these financial instruments.

(l)    Concentration of Risk

        The Partnership is potentially exposed to concentrations of risk consisting primarily of cash and accounts receivable, which are generally not collateralized. The Partnership's policy is to place its cash with high-credit quality financial institutions in order to limit the amount of credit exposure. Cash balances with any one institution may be in excess of federally insured limits or may be invested in a nonfederally insured money market account.

(m)    Use of Estimates

        Management of the Partnership has made a number of estimates and assumptions relating to the reporting of assets and liabilities, revenues and expenses, and the disclosure of contingent assets and

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STATION VENTURE OPERATIONS, LP
(A Limited Partnership)

Notes to Financial Statements (Continued)

For the three years ended, December 31, 2011, 2010, and 2009

(Dollars in thousands)

(1) Description of Business and Summary of Significant Accounting Policies (Continued)

liabilities to prepare these financial statements in conformity with U.S. GAAP. Actual results could differ from those estimates.

(2) Property and Equipment

        Property and equipment consists of the following:

        On March 29, 2008 the Partnership entered into a sale arrangement for four of its broadcast towers, one in Dallas and three in San Diego. The Partnership entered into a sale-leaseback agreement with one of the towers sold in San Diego. The total proceeds from the sale were $12,568, resulting in a $6,281 gain on sale of property in 2008. The Partnership recorded a deferred gain of $5,023, which will be recognized evenly over the 20-year life of the lease through 2027. During each of the years ended December 31, 2011, 2010, and 2009, total rent expense related to the sale-leaseback was $882 and $251 of deferred gain was recognized into other income.

(3) Related-party Transactions

        NBCUniversal provides the Partnership with a variety of services, including workforce, accounting, procurement and sourcing support, insurance and tax services. NBCUniversal receives a management fee equal to 6% of the aggregate broadcast cash flow, defined as operating income plus depreciation and amortization, including both amortization of tangible and intangible assets and program rights, less cash payments for program rights and capital expenditures. The Partnership records management fees in selling, general, and administrative expense in the accompanying statements of operations. Related-party transactions recorded in net revenue related primarily to network compensation arrangements with NBCUniversal or NBCU and GE and totaled $8,991, $8,469, and $9,198 for the years ended December 31, 2011, 2010, and 2009, respectively. Management fees and other related party expenses totaled $4,496, $5,681, and $$4,411 for the years ended December 31, 2011, 2010, and 2009, respectively. Payment of management fees to NBCUniversal or NBCU has been deferred since 2008. The Partnership has various operational and service agreements with NBCUniversal. The financial statement impact of these agreements is not necessarily representative of transactions with unrelated parties.

        The Partnership participates with owned and operated television stations of NBCUniversal to acquire television programming from NBCUniversal, as well as from third parties. Programming expense for

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STATION VENTURE OPERATIONS, LP
(A Limited Partnership)

Notes to Financial Statements (Continued)

For the three years ended, December 31, 2011, 2010, and 2009

(Dollars in thousands)

(3) Related-party Transactions (Continued)

programming acquired from NBCUniversal or NBCU was $498, $986 and $ $1,421, for the years ended December 31, 2011, 2010, and 2009, respectively.

        At December 31, 2011 and 2010, the net amount due to NBCUniversal or NBCU and GE totaled $16,737 and $11,568 respectively.

(4) Commitments and Contingencies

        The Partnership is obligated under several noncancelable operating leases for certain property and equipment. There are no contingent rental payments applicable to any of the leases. The majority of the leases provide that the Partnership pay taxes, maintenance, insurance, and certain other operating expenses applicable to the leased premises, in addition to the monthly minimum payments. Total rent expense under operating leases totaled $2,525, $2,531, and $3,101, for the years ended December 31, 2011, 2010, and 2009, respectively.

        Future minimum payments for commitments to acquire television programming, talent contracts and noncancelable operating leases with initial or remaining lease terms in excess of one year as of December 31, 2011 are approximately:

        From time to time, the Partnership may be subject to routine litigation incidental to its business. Management believes, based in part on the advice of legal counsel, that the results of pending legal proceedings will not materially affect the Partnership's financial position, results of operations, or liquidity.

(5) Subsequent Events

        We evaluate subsequent events that have occurred through the date our financial statements were available to be issued. As such we have evaluated events that have occurred through March 14, 2012.

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