10-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(Mark One)

ý	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the fiscal year ended December 31, 2005
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from:    Not Applicable

Commission file number 1-14776

Hearst-Argyle Television, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware
(State or other jurisdiction of	74-2717523
incorporation or organization)	(I.R.S. Employer Identification No.)
888 Seventh Avenue
New York, NY 10106	(212) 887-6800
(Address of principal executive offices)	(Registrant’s telephone number, including area code)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Title of Each Class	Name of Each Exchange On Which Registered
Series A Common Stock, par value $.01 per share	New York Stock Exchange

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

None

Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes o   Noý

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   Noý

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 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, or a non-accelerated filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12-b2 of the Exchange Act.

Large accelerated filer o Accelerated Filerý Non-accelerated filer o

Indicate by check mark whether the registrant is a shell company. Yes o   Noý

The aggregate market value of the registrant’s voting common stock held by non-affiliates on June 30, 2005 based on the closing price for the registrant’s Series A Common Stock on such date as reported on the New York Stock Exchange (the “NYSE”), was approximately $482,091,302.

Shares of the registrant’s Common Stock outstanding as of February 15, 2006: 92,669,867 shares (consisting of 51,371,219 shares of Series A Common Stock and 41,298,648 shares of Series B Common Stock).

DOCUMENTS INCORPORATED BY REFERENCE: Portions of the registrant’s Proxy Statement relating to the 2006 Annual Meeting of Stockholders are incorporated by reference into Part III (Items 10, 11, 12, 13 and 14).

FORWARD-LOOKING STATEMENTS

This reportincludesor incorporates forward-looking statements. We base these forward-looking statements on our current expectations and projections about future events. These forward looking statements generally can be identified by the use of statements that include phrases such as “anticipate”, “will”, “may”, “likely”, “plan”, “believe”, “expect”, “intend”, “project”, “forecast” or other such similar words and/or phrases. For these statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The forward-looking statements contained in this report, concerning, among other things, trends and projections involving revenue, income, earnings, cash flow, liquidity, operating expenses, assets, liabilities, capital expenditures, dividends and capital structure, involve risks and uncertainties, and are subject to change based on various important factors. Those factors include the impact on our operations from

•Changes in Federal regulation of broadcasting, including changes in Federal communications laws or regulations;

•Local regulatory actions and conditions in the areas in which our stations operate;

•Competition in the broadcast television markets we serve;

•Our ability to obtain quality programming for our television stations;

•Successful integration of television stations we acquire;

•Pricing fluctuations in local and national advertising;

•Changes in national and regional economies;

•Changes in advertising trends and our advertisers’ financial condition; and

•Volatility in programming costs, industry consolidation, technological developments, and major world events.

For a discussion of additional risk factors that are particular to our business, please refer to Part I, Item 1A. “Risk Factors” beginning on page 14. These and other matters we discuss in this report, or in the documents we incorporate by reference into this report, may cause actual results to differ from those we describe. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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HEARST-ARGYLE TELEVISION, INC.

2005 ANNUAL REPORT ON FORM 10-K

TABLE OF CONTENTS

		Page
	PART I	4
Item 1.	Business	4
Item 1A.	Risk Factors	14
Item 1B.	Unresolved Staff Comments	19
Item 2.	Properties	19
Item 3.	Legal Proceedings	21
Item 4.	Submission of Matters to a Vote of Security Holders	21
	PART II	22
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	22
Item 6.	Selected Financial Data	24
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	39
Item 8.	Financial Statements and Supplementary Data	40
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	71
Item 9A.	Controls and Procedures	71
Item 9B.	Other Information	72
	PART III	72
Item 10.	Directors and Executive Officers of the Registrant	72
Item 11.	Executive Compensation	72
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	72
Item 13.	Certain Relationships and Related Transactions	73
Item 14.	Principal Accountant Fees and Services	73
	PART IV	73
Item 15.	Exhibits and Financial Statement Schedules	73

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PART I

ITEM 1.   BUSINESS

General

Hearst-Argyle Television, Inc. (the “Company” or “we”) is one of the country’s largest independent, or non-network-owned, television station groups. Headquartered in New York City, we own or manage 28 television stations reaching approximately 18.2% of television households in the United States. Our 13 ABC-affiliated television stations, which reach 8.4% of U.S. television households, comprise the largest ABC affiliate group. Our 10 NBC-affiliated television stations, which reach 7.3% of U.S. television households, comprise the second largest NBC affiliate group. We own two CBS-affiliated television stations and one WB station, and we also manage one UPN station and one independent station for The Hearst Corporation (“Hearst”). Our primary corporate objective is to optimize the ratings, revenue and profit potential of our stations. We believe that local news leadership, and the effective showcasing of network and syndicated programs, drive market-competitive ratings, revenue share and station profitability. In addition, we operate Internet sites at each of our stations, which provide supplemental news, weather, information and entertainment content, and which are part of a nation-wide network of Internet sites we have built with other companies in the media industry. Also, as part of our ongoing initiative to explore additional uses of our digital spectrum, we participate in the joint venture that launched the NBC Weather Plus Network, the first ever 24/7, all digital, local and national broadcast network, which we currently broadcast in eight of our NBC markets on a multicast stream with our main digital channel. We also manage two radio stations which are owned by Hearst.

We provide, through our local television stations, free over-the-air programming to our communities’ television viewing audiences. Our programming includes three main components:

•programs produced by networks with which we are affiliated, such as ABC’s Grey’s Anatomy, NBC’s Law and Order and CBS’ CSI: Crime Scene Investigation, and special event programs like The Academy Awards, the Olympics and the Superbowl;

•programs that we produce at our stations, such as local news, weather, sports and entertainment; and

•first-run syndicated programs that we acquire, such as The Oprah Winfrey Show and Dr. Phil.

In keeping with our commitment to serve the public interest of the local communities in which we operate, our television stations and Internet sites also provide public service announcements and political coverage and sponsor community service projects and other public initiatives.

Our primary source of revenue is the sale of commercial air time to advertisers. Our objectives are to meet the needs of our advertising customers and to increase our advertiser base by delivering mass audiences in key demographics, primarily in the top 75 U.S. markets. We seek to attract our television audience by providing leading local news programming and compelling network and syndicated programs at each of our stations, 20 of which are in the top 50 markets. In addition to offering advertising customers commercial air time, we offer a variety of marketing programs, including community events, sponsorships and advertising opportunities on our stations’ Internet sites.

Excellence in news coverage is a key determinant to a station’s competitive, operational and financial success. We focus on the coverage of local and national issues, breaking news, accurate and timely monitoring of local weather conditions and the latest information at times of emergencies, as well as coverage of political issues, candidates, debates, and elections. We typically rank either first or second (in total household ratings and by share of demographic audience, adults aged 25-54) in local morning and evening news programs in at least 19 of the 25 markets where we produce news. In addition, our television stations have been recognized with numerous local, state and national awards for outstanding news coverage. Our stations have received numerous honors in recent years, including three consecutive Walter Cronkite Awards bestowed by the University of Southern California’s Annenberg School for Communication, Edward R. Murrow Awards, George Foster Peabody Awards, Alfred I. duPont Columbia Awards, National Headliner Awards, the NAB Service to America Award, as well as numerous state and local Emmy and Associated Press honors.

We also believe that capitalizing on the opportunities afforded the television industry by digital media, such as digital multi-casting, streaming on broadband and video-on-demand, is important to our future success. We devote substantial energy and resources to integrating such media into our business and have invested in select companies which we believe are well-positioned for emerging trends in digital media.

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For the year ended December 31, 2005, we had revenue of $706.9 million, employed 3,380 full-time and part-time employees and operated in 25 U.S. markets. Information about our financial results is discussed under Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on page 23, and presented under Item 8 “Financial Statements and Supplementary Data” beginning on page 40.

Hearst-Argyle is incorporated under the laws of the State of Delaware. Our principal executive offices are located at 888 Seventh Avenue, New York, New York 10106, and our main telephone number at that address is (212) 887-6800. Our Series A Common Stock is listed on the New York Stock Exchange under the ticker symbol “HTV”.

Company Background

Hearst-Argyle Television, Inc. was formed in August 1997 when Hearst combined its television broadcast group and related broadcast operations (the “Hearst Broadcast Group”) with those of Argyle Television, Inc. (“Argyle”).

Founded by William Randolph Hearst in 1887, The Hearst Corporation entered the broadcasting business in 1928 with its acquisition of radio station WSOE in Milwaukee, Wisconsin. In 1948, Hearst launched its first television station, WBAL-TV, in Baltimore, Maryland, which was the nation’s 19^th television station. That same year, WLWT-TV, in Cincinnati, Ohio, later to become an Argyle station, was launched as the nation’s 20^th television station and WDSU-TV, in New Orleans, Louisiana, later to become a Pulitzer station, was launched as the nation’s 48^th television station. By 1997, when Hearst and Argyle combined their broadcast operations to form our company, the two companies had a total of 15 owned and managed television stations and two managed radio stations.

Since that time, we have acquired additional television stations through asset purchase, asset exchange or merger transactions, including merger transactions in 1999 with Pulitzer Publishing Company, in which we acquired nine television stations and five radio stations, and with Kelly Broadcasting Company, in which we acquired our television stations in Sacramento, California, and a three-party asset exchange transaction in 2001 pursuant to which we sold three Phoenix, Arizona radio stations and acquired WMUR-TV, Manchester, New Hampshire. In 2004, we purchased an ABC affiliate, WMTW-TV, in Portland, Maine.

We also have a strategic equity investment in Internet Broadcasting Systems, Inc. (“Internet Broadcasting”). Each of our stations has a corresponding Internet site produced and managed by Internet Broadcasting which provides supplemental news, weather, information and entertainment content and a state-of-the-art technology infrastructure. These Internet sites are part of a nation-wide network of local Internet sites that we and Internet Broadcasting have built with other partners in the media industry. The Internet Broadcasting network provides local Internet coverage of 57 markets, comprising 64% of U.S. households. In addition, in 2005 we made strategic equity investments in Ripe Digital Entertainment, Inc. (“Ripe TV”), an advertising-supported free digital video-on-demand program service, and U.S. Digital Television, LLC (“USDTV”), a national digital television programming distribution service using portions of the digital television spectrum. In December 2005, we concluded our syndicated programming joint venture with NBC Universal, although we expect to continue to work together on selected projects. We also have a minority interest in the Arizona Diamondbacks major league baseball team, which we acquired in the Pulitzer transaction.

As of February 15, 2006, Hearst owned, through its wholly-owned subsidiaries, Hearst Holdings, Inc., a Delaware corporation (“Hearst Holdings”), and Hearst Broadcasting, Inc., a Delaware corporation (“Hearst Broadcasting”), 100% of the issued and outstanding shares of our Series B Common Stock, par value $.01 per share, (the “Series B Common Stock,” and together with our Series A Common Stock, par value $.01 per share, the “Series A Common Stock,” the “Common Stock”) and approximately 47.81% of the issued and outstanding shares of our Series A Common Stock, representing in the aggregate approximately 71.07% of the outstanding voting power of our Common Stock (except with regard to the election of directors, which is discussed below). On February 15, 2006, Hearst Broadcasting also owned 500,000 Series B Redeemable Convertible Preferred Securities due 2021 that were issued by Hearst-Argyle Capital Trust, our wholly-owned subsidiary trust. Hearst Broadcasting may convert the Series B Redeemable Convertible Preferred Securities into 986,131 shares of our Series A Common Stock, representing in the aggregate approximately 1.06% of the outstanding voting power (except with respect to the election of directors, which is discussed below) of our Common Stock as of February 15, 2006. Because of Hearst’s ownership, we are considered a “controlled company” under New York Stock Exchange rules.

Hearst Broadcasting’s ownership of our Series B Common Stock entitles it to elect as a class all but two members of our Board of Directors (the “Board”). The holders of our Series A Common Stock are entitled to elect the remaining two members of our Board. When Hearst combined the Hearst Broadcast Group with Argyle in August 1997, Hearst agreed that, for purposes of any vote to elect directors and for as long as it held any shares of our Series B Common Stock,

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it would vote any shares of Series A Common Stock that it owned only in the same proportion as the shares of Series A Common Stock not held by Hearst are voted in the election.

The Stations

We own 25 television stations. In addition, we manage three television stations (WMOR-TV in Tampa, Florida, WPBF-TV in West Palm Beach, Florida and KCWE-TV in Kansas City, Missouri) and two radio stations (WBAL-AM and WIYY-FM in Baltimore, Maryland), all of which, except KCWE-TV, are owned by Hearst. Of the 28 television stations we own or manage, 20 are in the top 50 of the 210 generally recognized geographic designated market areas (“DMAs”) according to Nielsen Media Research (“Nielsen”) estimates for the 2005-2006 television broadcasting season. Our management of KCWE-TV allows Hearst to fulfill its obligations under a Program Service and Time Brokerage Agreement between Hearst and the licensee of KCWE-TV (the “Missouri LMA”). On August 9, 2005, Hearst entered into an agreement to purchase KCWE-TV; an application requesting consent to the assignment of KCWE’s license to Hearst is pending with the Federal Communications Commission (the “FCC”).

The following table sets forth certain information for each of our owned and managed television stations as of December 31, 2005:

Station	Market	Market Rank(1)	Network Affiliation(2)	Analog Channel	Digital Channel	PercentageOf U.S. Television Households(3)
WCVB	Boston, MA	5	ABC	5	20	2.155	%
WMUR	Manchester, NH(4)	5	ABC	9	59	—
WMOR	Tampa, FL	12	IND	32	19	1.552	%
KCRA	Sacramento, CA	19	NBC	3	35	1.221	%
KQCA	Sacramento, CA(5)	19	WB	58	46	—
WESH	Orlando, FL	20	NBC	2	11	1.221	%
WTAE	Pittsburgh, PA	22	ABC	4	51	1.061	%
WBAL	Baltimore, MD	24	NBC	11	59	0.988	%
KMBC	Kansas City, MO	31	ABC	9	7	0.820	%
KCWE	Kansas City, MO(6)	31	UPN	29	31	—
WISN	Milwaukee, WI	33	ABC	12	34	0.799	%
WLWT	Cincinnati, OH	34	NBC	5	35	0.799	%
WYFF	Greenville, SC	35	NBC	4	59	0.740	%
WPBF	West Palm Beach, FL	38	ABC	25	16	0.682	%
WGAL	Lancaster, PA	41	NBC	8	58	0.641	%
WDSU	New Orleans, LA	43	NBC	6	43	0.610	%
KOCO	Oklahoma City, OK	45	ABC	5	7	0.595	%
KOAT	Albuquerque, NM	46	ABC	7	21	0.593	%
WXII	Greensboro, NC	47	NBC	12	31	0.592	%
WLKY	Louisville, KY	50	CBS	32	26	0.584	%
KITV	Honolulu, HI	72	ABC	4	40	0.377	%
KCCI	Des Moines, IA	73	CBS	8	31	0.375	%
WMTW	Portland-Auburn, ME	74	ABC	8	46	0.369	%
KETV	Omaha, NE	75	ABC	7	20	0.363	%
WAPT	Jackson, MS	89	ABC	16	21	0.298	%
WPTZ/WNNE	Plattsburgh, NY/Burlington, VT	90	NBC	5/31	14/23	0.296	%
KHBS/KHOG	Fort Smith/Fayetteville, AR	104	ABC	40/29	21/15	0.248	%
KSBW	Monterey-Salinas, CA	125	NBC	8	10	0.198	%
	TOTAL					18.177	%

(1)Television market rank is based on the relative size of the DMAs (defined by Nielsen as geographic markets for the sale of national “spot” and local advertising time) among the 210 generally recognized DMAs in the U.S., based on Nielsen estimates for the 2005-2006 season.

(2)ABC refers to the ABC Television Network; CBS refers to the CBS Television Network; IND refers to an independent station not affiliated with a network; NBC refers to the NBC Television Network; UPN refers to The United Paramount Network; and WB refers to The WB Television Network.

(3)Based on Nielsen estimates for the 2005-2006 season.

(4)Because WMUR and WCVB are both in the Boston DMA, the FCC counts audience reach in this DMA only once for the two stations.

(5)Because KQCA and KCRA are in the same DMA, the FCC counts audience reach in this DMA only once for the two stations.

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(6)Because KCWE and KMBC are in the same DMA, the FCC counts audience reach in this DMA only once for the two stations.

The following table sets forth certain information for each of our managed radio stations:

Station	Market		Market Rank(1)	Format
WBAL (AM)	Baltimore, MD	(2)	21	News/Talk
WIYY (FM)	Baltimore, MD	(2)	21	Rock

(1)Radio market rank is based on the relative size of the Metro Survey Area (defined by Arbitron as generally corresponding to the Metropolitan Statistical Areas, defined by the U.S. Office of Management and Budget) for Arbitron’s Fall 2005 Radio Market Report.

(2)We manage WBAL (AM) and WIYY (FM) under a management agreement with Hearst.

We have an option to acquire WMOR-TV and Hearst’s interests with respect to KCWE-TV, at their fair market value as determined by the parties, or by an independent third-party appraisal, subject to certain specified parameters (and we may withdraw any option exercise after we receive the third-party appraisal). However, if Hearst elects to sell either station during the option period, we will have a right of first refusal to acquire that station substantially on the terms agreed upon between Hearst and the potential buyer. We also have a right of first refusal to purchase WPBF-TV if Hearst proposes to sell the station to a third party  We will exercise any option or right of first refusal related to these properties by action of our independent directors. The option periods and the rights of first refusal expire in December 2006.

Network Affiliations

General.   Twenty-seven of our 28 owned or managed television stations are affiliated with one of the following networks pursuant to a network affiliation agreement: ABC (13 stations), NBC (10 stations), CBS (two stations), UPN (one station) and WB (one station). WMOR-TV in Tampa, Florida currently operates as an independent station.

Each affiliation agreement provides the affiliated station with the right to broadcast all programs transmitted by the applicable network. In return, the network has the right to sell a significant portion of the advertising time during those broadcasts. The duration of a majority of our stations’ affiliations with their networks has exceeded 40 years and, for certain stations, has continued for more than 50 years. Our two radio stations also have an affiliation agreement with a network that provides certain content (e.g., news and sports) for the stations. However, our radio stations are less dependent on their affiliation agreements for programming.

Network Compensation. Historically, the traditional broadcast television networks have paid compensation to their affiliates in exchange for the broadcasting of network programming. In recent years, network compensation has been reduced and in the future may be eliminated. Our affiliation agreements with NBC and CBS provide for compensation that is weighted toward the first part of the term and declines to zero by the end of the term.  In addition, more recently established networks generally have paid little or no cash compensation for the clearance of network programming or have required payment from their affiliates.

ABC.   The term of each affiliation agreement for our ABC-affiliated stations—WCVB, WMUR, WTAE, KMBC, WISN, WPBF, KOCO, KOAT, KITV, WMTW, KETV, WAPT and KHBS/KHOG — is for a period of five years, expiring December 31, 2009.

NBC.   The term of the affiliation agreement for our NBC-affiliated stations—KCRA, WESH, WBAL, WLWT, WYFF, WGAL, WDSU, WXII, WPTZ/WNNE and KSBW—is for a period of nine years, six months, expiring December 31, 2009. In addition, certain of our NBC stations have become affiliates of the NBC Weather Plus network. See “Digital Media Initiatives.”

CBS.   The term of each affiliation agreement for our CBS-affiliated stations—WLKY and KCCI—is for a period of ten years, expiring June 30, 2015.

UPN and WB.   The UPN affiliation agreement with KCWE is for an initial 10-year term expiring August 31, 2008. The WB affiliation agreement with KQCA is for an initial term of three years, expiring September 30, 2006. Unlike affiliates of ABC, CBS or NBC, KQCA may be required to pay compensation to WB (based upon ratings it generates) in exchange for the broadcast rights to WB’s programming.

On January 24, 2006, Warner Brothers and CBS Corp., respective owners of the WB and UPN networks, announced that the WB and UPN networks will be discontinued in the fall of 2006. They also announced that a network

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called “CW” would be created. The announcement stated that a competitor of KQCA will become the CW affiliate in Sacramento and, accordingly, we expect KQCA’s current affiliation will terminate. No announcement has been made regarding CW affiliations in Kansas City and, accordingly, we cannot predict at this time the effect the discontinuation of the UPN network will have on KCWE.

On February 22, 2006, News Corporation announced that it was creating a new prime-time network called My Network TV to provide shows to several stations it owns that are losing programming because of the discontinuation of the WB and UPN networks. The announcement also stated that the network’s programming would be offered to other independent stations around the country.

Digital Media Initiatives

We and other companies in the media industry have partnered with Internet Broadcasting to build a nation-wide network of local Internet sites. The Internet Broadcasting network, which covers 57 markets and reaches 64% of U.S. households, drew on the average 11.4 million unique viewers and 303.2 million page views per month during 2005. As part of this network we have Internet sites for each of our stations which are produced and managed by Internet Broadcasting on their technology platform, and which provide news, weather, entertainment and other information that complement our stations’ programming. Our Internet sites drew a combined average 3.8 million unique viewers and 70.4 million page views per month during 2005. These Internet sites also serve a crucial community service: in the aftermath of Hurricane Katrina, our station WDSU-TV provided continuous coverage to the New Orleans community by telecasting over its Internet site, www.WDSU.com, after the evacuation of our broadcast facilities. In the week after the hurricane alone, our New Orleans Internet site served 12.4 million page views and 1.3 million live video streams, and the Internet Broadcasting nation-wide network of Internet sites recorded 115.8 million page views and 3.4 million live streams. Harry T. Hawks, our Executive Vice President and Chief Financial Officer, Steven A. Hobbs, our Executive Vice President and Chief Legal and Development Officer and Terry Mackin, our Executive Vice President, serve on the Board of Directors of Internet Broadcasting.

In addition, we and Internet Broadcasting have recently launched an array of new Internet-based and wireless content services. These services include mobile Web content delivery via wireless application protocol (“WAP”). We have also developed a strategy to offer new features on our stations’ Internet sites, including the following:

•Podcasts of local station news and information programs;

•Live video streams of breaking news events;

•Access to news and information video clips archives;

•Timely blogs written by station news talent; and

•Access to a news page where station Internet users can obtain content representing their individual  interests.

We intend to continue to aggressively expand our on-demand and personalized news content offerings to meet the changing needs of our viewers.

In September 2005 we made an equity investment in USDTV. USDTV was formed to provide a national, subscription-based, digital television programming distribution service using portions of the digital television spectrum. Currently, the program service, which consists of local television station signals combined with the most popular cable networks, is available in Albuquerque, New Mexico, Las Vegas, Nevada, Salt Lake City, Utah and Dallas, Texas. In addition, our station KOAT-TV in Albuquerque, New Mexico, currently leases a portion of its digital spectrum to USDTV. Steven A. Hobbs, our Executive Vice President and Chief Legal and Development Officer, serves on the Board of Directors of USDTV.

In November 2004 NBC Universal and the NBC Television Affiliates Association formed NBC Weather Plus Network LLC, a 50/50 joint venture which launched the first ever 24/7, all digital, local and national broadcast network. NBC-affiliated stations may participate in the venture by investing in a limited liability company called Weather Network Affiliates Company, LLC, one of the entities which invested in NBC Weather Plus Network LLC. Stations participating in the venture broadcast 24-hour national and local weather and related community information using their digital spectrum (as a multi-cast stream together with their main digital channel). We have launched NBC Weather Plus in eight of our NBC markets — Sacramento, Orlando, Baltimore, Cincinnati, Greenville, New Orleans, Lancaster and Winston-Salem — and expect to launch NBC Weather Plus in our two remaining NBC markets in 2006. Terry Mackin, our Executive Vice President, is the Chairman of the Board of the NBC Television Affiliates Association, which is the managing member and the owner of certain ownership interests in Weather Network Affiliates Company, LLC.

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In July 2005, we made an equity investment in Ripe TV. Ripe TV was formed in 2003 to create an advertising-supported, free, digital video-on-demand program service. Launched in October 2005, the program service targets men aged 18-34 and is available for distribution via multiple platforms, including digital cable, broadband, and cell phones. Steven A. Hobbs, our Executive Vice President and Chief Legal and Development Officer, serves on the Board of Directors of Ripe TV.

The Commercial Television Broadcasting Industry

General.  Commercial television broadcasting began on a regular basis in the 1940s. Currently a limited number of channels are available for over-the-air broadcasting in any one geographic area, and a license to operate a television station must be granted by the FCC. All television stations in the country are grouped by Nielsen into 210 generally recognized television markets that are ranked in size based upon actual or potential audience. Each of these markets, called “Designated Market Areas” or “DMAs”, is designated as an exclusive geographic area consisting of all counties whose largest viewing share is given to stations of that same market area. Nielsen regularly publishes data on estimated audiences for the television stations in each DMA, which data is a significant factor in determining our advertising rates.

Revenue. Television station revenue is derived primarily from local, regional and national advertising and, to a much lesser extent, from network compensation, retransmission revenue and other sources. Advertising rates are set based upon a variety of factors, including

•a program’s popularity among the viewers an advertiser wishes to attract;

•the number of advertisers competing for the available time;

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

•the availability of alternative advertising media in the market.

Also, advertising rates are determined by a station’s ratings and audience share among particular demographic groups.

Competition

General.   Competition in the television industry takes place on three primary levels:

•competition for audience;

•competition for programming; and

•competition for advertisers.

Competition for Audience.   We compete for audience on the basis of program popularity, which consists not only of our locally-produced news, public affairs and entertainment programming, but syndicated and network programming as well. The popularity of our programming has a direct effect on the rates we can charge our advertisers. In addition, although the commercial television broadcast industry historically has been dominated by the broadcast networks ABC, NBC, CBS and FOX, other newer networks and programming originated to air solely via subscription systems, such as cable and satellite systems, have become significant competitors for the broadcast television audience. Currently, broadcast-originated programming accounts for about half of all television viewing.

Other sources of competition for audience include

•home entertainment and recording systems (including VCRs, DVDs, DVRs and playback systems);

•video-on-demand and pay-per-view;

•television game devices;

•the Internet;

•portable digital devices (such as video iPods and cell phones); and

•other sources of home entertainment.

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Competition for Programming.  Competition for non-network programming involves negotiating with national program distributors or syndicators that sell first-run and off-network packages of programming. Our stations compete against other local broadcast stationsfor exclusive local access to first-run product (such as The Oprah Winfrey Show). To a lesser extent, we compete for exclusive local access to off-network reruns (such as Friends). Cable and satellite systems also compete with local stations for programming, and various national cable and satellite networks from time to time have acquired programs that otherwise would have been offered to local television stations.  In addition, networks have recently begun to sell their programming directly to the consumer via portable digital devices such as video iPods and cell phones.

Competition for Advertisers.   Broadcast television stations compete for advertising revenue and marketing sponsorship with other broadcast television stations, and a station’s competitive edge is in large part determined by the success of its programming. Broadcast television stations also compete for advertising revenue with a variety of other media, such as newspapers, radio stations, magazines, outdoor advertising, transit advertising, yellow page directories, direct mail, the Internet and local cable and satellite system operators serving the same market.

Additional factors relevant to a television station’s competitive position include signal strength and coverage within a geographic area and assigned frequency or channel position. Television stations that broadcast over the VHF band (channels 2-13) of the spectrum historically have had a competitive advantage over television stations that broadcast over the UHF band (channels above 13) of the spectrum because the former usually  have better signal coverage and operate at a lower transmission cost. However, the improvement of UHF transmitters and receivers, the complete elimination from the marketplace of VHF-only receivers, the expansion of cable television and satellite delivery systems and the commencement of digital broadcasting have reduced the VHF signal’s competitive advantage.

Seasonality, Cyclicality and Materiality of Automotive Advertising

Our business has experienced and is expected to continue to experience seasonality due to, among other things, seasonal advertising patterns and seasonal influences on people’s viewing habits.   The advertising revenue of our stations are generally highest in the second and fourth quarters of each year, due in part to increases in consumer advertising in the spring and retail advertising in the period leading up to and including the holiday season. Additionally, advertising revenue is cyclical, benefiting in even-numbered years from advertising placed by candidates for political offices and issue-oriented advertising, and demand for advertising time in Olympic broadcasts. While political and Olympic advertising cycles have been a normal pattern for our industry for decades, the variability has become more pronounced in recent years as these respective categories of revenue have grown significantly in size. The seasonality and cyclicality inherent in our business make it difficult to estimate future operating results based on the previous results of any specific quarter.

In addition, the Company derives a material portion of its ad revenue from the automotive industry. Approximately 26.6% of total revenue came from the automotive category in 2004 and 2005 combined. An increase or decrease in revenue from this category therefore will disproportionately impact our operating results.

Federal Regulation of Television Broadcasting

General.   Broadcasting is subject to the jurisdiction of the FCC under the Communications Act of 1934, as amended (the “Communications Act”). The Communications Act requires the FCC to regulate broadcasting so as to serve “the public interest, convenience and necessity.” 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;  and

•regulate the equipment used by stations.

The Communications Act prohibits the assignment of a license or the transfer of control of a license without the FCC’s prior approval. The FCC also regulates certain aspects of the operation of cable television systems, direct broadcast satellite (“DBS”) systems and other electronic media that compete with broadcast stations. In addition, although the FCC has reduced its regulation of broadcast stations, the FCC continues to regulate 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 and obscene and indecent programming. In recent years, the FCC has increased its regulatory focus on indecency, which may impact certain of our programming decisions.

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The following 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 which follow should be read in conjunction with the text of the statutes, rules, regulations, orders, and decisions described herein.

License Renewals.   Under the Communications Act, the FCC generally may grant and renew broadcast licenses for terms of eight years, though 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; 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. In addition, competing applications for the same frequency may be accepted only after the FCC has denied an incumbent’s application for license renewal.

The following table provides the expiration dates for the full power station licenses of our owned and managed television stations:

Station	Market	Expiration of FCC License
WCVB	Boston, MA	April 1, 2007
WMUR	Manchester, NH(1)	April 1, 2007
WMOR	Tampa, Fl	February 1, 2013
KCRA	Sacramento, CA	December 1, 2006
KQCA	Sacramento, CA	December 1, 2006
WESH	Orlando, FL	February 1, 2013
WTAE	Pittsburgh, PA	August 1, 2007
WBAL	Baltimore, MD	October 1, 2012
KMBC	Kansas City, MO	February 1, 2006*
KCWE	Kansas City, MO	February 1, 2014
WLWT	Cincinnati, OH	October 1, 2013
WISN	Milwaukee, WI	December 1, 2005*
WYFF	Greenville, SC	December 1, 2004*
WPBF	West Palm Beach, FL	February 1, 2013
WDSU	New Orleans, LA	June 1, 2013
WXII	Greensboro, NC	December 1, 2012
KOCO	Oklahoma City, OK	June 1, 2006*
WGAL	Lancaster, PA	August 1, 2007
KOAT	Albuquerque, NM	October 1, 2006
KOCT (satellite station of KOAT)**	Carlsbad, NM	October 1, 2006
KOVT (satellite station of KOAT)**	Silver City, NM	October 1, 2006
KOFT-DT (satellite station of KOAT)**	Farmington, NM	—(1)
WLKY	Louisville, KY	August 1, 2005*
KCCI	Des Moines, IA	February 1, 2006*
WMTW	Portland-Auburn, ME	April 1, 2007
KITV	Honolulu, HI	February 1, 2007
KHVO (satellite station of KITV)**	Hilo, HI	February 1, 2007
KMAU (satellite station of KITV)**	Wailuku, HI	February 1, 2007
KETV	Omaha, NE	June 1, 2006*
WAPT	Jackson, MS	June 1, 2013
WPTZ	Plattsburgh, NY	June 1, 2007
WNNE (satellite station of WPTZ)**	Burlington, VT	April 1, 2007
KHBS	Fort Smith, AR	June 1, 2013
KHOG (satellite station of KHBS)**	Fayetteville, AR	June 1, 2013
KSBW	Monterey-Salinas, CA	December 1, 2006

(1)Manchester, New Hampshire is determined by Nielsen to be a part of the Boston DMA.

*We have filed for renewal of licenses for these stations, and those applications are pending. A station’s authority to operate is automatically extended while a renewal application is on file and under review.

**Satellite stations generally retransmit the signal of a primary station, and offer some locally originated programming.

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(1)Our satellite station KOFT-DT in Farmington, NM operates in digital mode only pursuant to a special temporary authority which the FCC must renew every six months.

Ownership Regulation.   The Communications Act and FCC rules limit the ability of individuals and entities to have certain ownership or positional interests in certain combinations of broadcast stations and other media. During 2003, the FCC conducted a comprehensive review of all of its broadcast ownership rules, including the local television ownership rule, national television ownership rule, local radio ownership rule, newspaper/broadcast cross-ownership rule, and radio/television cross-ownership rule. In June 2003, the FCC adopted an order liberalizing most of the ownership rules which would have permitted us to acquire television stations in certain markets where we are currently prohibited from acquiring new stations. Shortly thereafter, however, Congress adopted legislation to overturn and modify the FCC’s liberalization of its national television ownership rule, and the FCC’s other ownership regulations were challenged in the courts. The U.S. Court of Appeals for the Third Circuit affirmed certain of the rules but rejected those affecting local television ownership and local cross-ownership of newspapers and broadcast stations and remanded the matter to the FCC for further proceedings. On June 13, 2005, the United States Supreme Court declined to review the Third Circuit’s decision. During the pendency of the FCC’s review of the ownership rules on remand, the FCC’s pre-June 2003 broadcast ownership rules remain in effect. 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 (1) 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 (2) 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 will permit television duopolies within the same DMA so long as the Grade B signal contours of the stations involved do not overlap. Stations designated by the FCC as “satellite” stations, which are full-power stations that typically rebroadcast the programming of a “parent” station, 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. We are currently in compliance with the local television ownership rule.

•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. Before Congress intervened in 2004 and set the cap at 39%, the FCC had increased the cap from 35% to 45%. We are in compliance with the 39% statutorily-mandated national ownership cap.

The FCC currently discounts the audience reach of a UHF station by 50% when computing the national television ownership cap. Further, for entities that have attributable interests in two stations in the same market, the FCC counts the audience reach of the stations in that market only once in computing the national ownership cap.  The FCC is currently considering whether to retain the UHF discount. The propriety of the UHF discount will be the subject of further administrative proceedings, but the discount currently remains in effect.

•Dual Network Rule.  The dual network rule prohibits a merger between or among any of the four major broadcast television networks— ABC, CBS, FOX and NBC.

•Local Radio Ownership. With respect to radio, the maximum allowable number of stations that can be commonly owned in a radio market varies depending on the number of radio stations within that market. In markets with more than 45 stations, one company may own, operate or control eight stations, with no more than five in any one service (AM or FM). In markets of 30-44 stations, one company may own seven stations, with no more than four in any one service; in markets of 15-29 stations, one entity may own six stations, with no more than four in any one service. In markets with 14 commercial stations or less, one company may own up to five stations or 50% of all of the stations, whichever is less, with no more than three in any one service. The FCC’s 2003 rules changed the radio market definition from the contour-overlap method to a generally more restrictive definition using, in most cases, Arbitron markets. The new market definition rule was affirmed by the Third Circuit and currently remains in effect.

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•Media Cross-Ownership. The FCC’s currently effective rules prohibit the licensee of a radio or TV station from directly or indirectly owning, operating, or controlling a daily newspaper if the station’s specified service contour encompasses the entire community where the newspaper is published. While the FCC liberalized this rule in 2003, the new version of the rule remains under review and is not effective. The new rule, if it were adopted, would permit us to acquire stations in certain areas where Hearst, our controlling stockholder, owns newspapers.

The cross-ownership rules also permit cross ownership of radio and television stations under a graduated test based on the number of independently owned media voices in the local market. In large markets, (markets with at least 20 independently owned media voices), a single entity can own up to one television station and seven radio stations or, if permissible under the local television ownership rule (if eight full-power television stations would remain in the market post transaction), two television stations and six radio stations. Our television and radio stations in Baltimore, Maryland, are permanently grandfathered under this rule.

•Cable-Television Cross-Ownership.   In January 2003, the FCC repealed its rule that had prohibited common control of a television station and a cable television system in the same local market. Thus, common ownership of a cable system and a television station in the same local market is permissible.

•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).

All non-conforming interests acquired before November 7, 1996, are permanently grandfathered and thus do not constitute attributable ownership interests.

Cable and Satellite Carriage of Local Television Signals. Pursuant to the Cable Television Consumer Protection and Competition Act of 1992 (“1992 Cable Act”) and the FCC’s “must carry” regulations, cable operators are generally required to devote up to one-third of their activated channel capacity to the carriage of the analog signals of local commercial television stations. The 1992 Cable Act also prohibits cable operators and other multi-channel video programming distributors from retransmitting a broadcast signal without obtaining the station’s consent. On a cable system-by-cable system basis, a local television broadcast station must make a choice once every three years whether to proceed under the “must carry” rules or to waive the right to mandatory, but uncompensated, carriage and, instead, to negotiate a grant of retransmission consent to permit the cable system to carry the station’s signal, in most cases in exchange for some form of consideration from the cable operator. Stations were required to make cable carriage elections for the period January 1, 2006 to December 31, 2008, by October 1, 2005. We opted to negotiate retransmission consent with most of the cable systems with which we do business.

The Satellite Home Viewer Improvement Act of 1999 (“SHVIA”) established a compulsory copyright licensing system for the distribution of local television station signals by direct broadcast satellite systems to viewers in each DMA. Under SHVIA, a direct broadcast satellite system generally is required to retransmit the analog signal of all local television stations in a DMA if the system chooses to retransmit the signal of any local television station in that DMA. Television stations located in markets in which satellite carriage of local stations is offered may elect mandatory carriage or retransmission consent. Stations were required to make satellite carriage elections for the period January 1, 2006 to December 31, 2008, by October 1, 2005.

Cable and satellite systems generally will be required under the FCC’s “must carry” rules to carry a single programming stream transmitted by each local digital television station at the end of the digital television transition. During the transition period, cable operators are required to carry either a station’s analog or digital signals, but not both. After the conversation to digital, cable operators will be required to carry only a station’s primary video programming channel. Therefore, the FCC does not require cable operators to carry additional channels that we may create using our

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digital spectrum. Petitions filed by the broadcast industry requesting the FCC to reconsider that decision are pending. Nonetheless, we have retransmission consent agreements with a number of cable operators and satellite carriers that require carriage of the analog and certain digital signals of our stations.

In December 2004, Congress enacted the Satellite Home Viewer Extension and Reauthorization Act of 2004 (“SHVERA”). SHVERA extended until December 31, 2009, the separate compulsory copyright license that permits satellite carriers to retransmit distant network signals to unserved households (i.e., those households that do not receive a signal of Grade B intensity from a local network affiliate). SHVERA also created a compulsory copyright license that permits satellite carriers to retransmit a station’s signal out of its DMA into communities in which the station is “significantly viewed” (as that term is defined by the FCC).

Digital Television Service.  The Communications Act and the FCC require television stations to transition from analog television service to digital television service. Recently, Congress passed and the President signed new legislation that establishes a hard transition deadline of February 17, 2009. Until the end of the transition, in general, stations are required to operate both analog and digital facilities.

Indecency Regulation. Federal law and the FCC’s rules prohibit the broadcast of obscene material at any time, and the broadcast of indecent or profane material during the period from 6 a.m. through 10 p.m. The Commission defines “indecent” content as “language that, in context, depicts or describes sexual or excretory activities or organs in terms patently offensive as measured by contemporary community standards for the broadcast medium.”  “Profane” content has been recently defined by the FCC as “vulgar, irreverent, or coarse language” which includes language that “denote[s] certain of those personally reviling epithets naturally tending to provoke violent resentment or denoting language so grossly offensive to members of the public who actually hear it as to amount to a nuisance.”  In recent years, the FCC and its indecency prohibition have received much attention. Congress is currently considering legislation that would, among other things, raise the maximum amount of existing indecency fines from $32,500 to $500,000.

Employees

As of December 31, 2005, we had approximately 2,984 full-time employees and 396 part-time employees. A total of approximately 934 of our employees are represented by five unions (the American Federation of Television and Radio Artists, the International Brotherhood of Electrical Workers, the International Alliance of Theatrical Stage Employees, the Directors Guild of America, and the National Association of Broadcast Electrical Technicians). We have not experienced any significant labor problems, and believe that our relations with our employees are satisfactory.

Available Information

We maintain an Internet site at www.hearstargyle.com. We make available, free of charge, on our Internet site, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after we electronically file those materials with, or furnish them to, the Securities and Exchange Commission (“SEC”).

Our Code of Business Conduct and Ethics, our Corporate Governance Guidelines, our Audit Committee Charter and our Compensation Committee Charter are also posted to the corporate governance section of our Internet site. In addition, you may obtain a free copy of our Code of Business Conduct and Ethics, our Corporate Governance Guidelines, or our Board committee charters that we file on our Internet site by writing to us at Hearst-Argyle Television, Inc., 888 Seventh Avenue, New York, New York 10106, Attention: Corporate Secretary.

We also make available on our Internet site additional information, including news releases, earnings releases, archived audio Web casts and forthcoming corporate events.

ITEM 1A.    RISK FACTORS

We Depend on Network Affiliation Agreements and Network Programming

Each of the television stations we own or manage is a party to a network affiliation agreement giving such station the right to rebroadcast programs transmitted by the network, except WMOR-TV, in Tampa, Florida, which is currently operating as an independent station. Each affiliation agreement provides the affiliated station with the right to broadcast programs transmitted by the station’s affiliated network. In return, the network has the right to sell a substantial majority of the advertising time during such broadcasts. Thirteen of our stations are parties to affiliation agre ements with ABC, 10 with NBC, two with CBS, one with the WB Network and one with UPN. Accordingly, ABC and NBC affiliates account

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for most of our advertising revenues. Our television viewership levels, and ultimately advertising revenues, for each station are materially dependent upon network programming. Network programming  may not achieve or maintain satisfactory viewership levels. In particular, if ABC or NBC network programming fails to attract viewers or generate satisfactory ratings, our revenues may be adversely affected because of the number of our stations that are affiliated with those two networks. In addition, we may fail to continue to be able to renew our network affiliation agreements with ABC, NBC and CBS, or we may renew them on less favorable terms than we presently have. Further, the discontinuation of the WB and UPN networks in connection with the launch of the CW network may have an adverse impact on our current WB and UPN stations. The termination or non-renewal, or renewal on less favorable terms, of our stations’ network affiliation agreements could adversely affect the viewership of our stations and affect our ability to sell advertising, which could materially decrease our revenue and operating results.

A Decline in Advertising Expenditures and Consumer Acceptance of Our Stations’ Programming Could Adversely Affect our Operating Results

We rely almost entirely upon sales of advertising for our revenues. Our stations compete for advertising revenues with other television stations in their respective markets. They also compete with other advertising media, such as newspapers, radio stations, magazines, outdoor advertising, transit advertising, yellow page directories, direct mail, the Internet and local cable and satellite system operators. Our stations are located in highly competitive markets. Accordingly, our operating results are and will continue to be dependent upon the ability of each of our stations to compete successfully for advertising revenues in its respective market. Our ability to generate advertising revenues is and will continue to be affected by changes in the national economy, as well as by regional economic conditions in each of the markets in which our stations operate. The size of advertisers’ bud gets, which are affected by broad economic trends, affect the broadcast industry in general and the revenues of individual broadcast television stations. If the economic prospects of advertisers or the economy decline, our current or prospective advertisers may purchase less advertising time from us. In addition, if disasters, acts of terrorism, political uncertainty or hostilities occur, our advertisers’ spending priorities may shift to around-the-clock news coverage, which would cause the loss of advertising revenues due to the suspension of advertising-supported commercial programming. Further, because our revenues depend upon the public’s acceptance of a station’s programming, a decline in programming popularity and audience ratings, or our inability to retain the rights to popular programming, may adversely affect our ability to generate advertising revenues.

Increased Competition Due to Technological Innovation May Adversely Impact our Business

Technological innovation, and the resulting proliferation of programming alternatives such as cable, satellite television, satellite radio, video-on-demand, pay-per-view, the Internet, home video and entertainment systems, portable entertainment systems, and the availability of television programs on DVD and portable digital devices have fragmented television viewing audiences and subjected television broadcast stations to new types of competition. Over the past decade, the aggregate viewership of non-network programming distributed via cable television and satellite systems have increased, while the aggregate viewership of the major television networks has declined. New technologies that enable users to view content of their own choosing, in their own time, and to fast-forward or skip advertisements, such as DVRs, portable digital devices, and the Internet, may cause changes in consumer behavior that could affect the attractiveness of our offerings to advertisers. If this were to occur, our operating results could be adversely affected.

Other advances in technology, such as increasing use of local-cable advertising “interconnects,” which allow for easier insertion of advertising on local cable systems, have also increased competition for advertisers. In addition, video compression techniques permit greater numbers of channels to be carried within existing bandwidth on cable, satellite and other television distribution systems. These compression techniques, as well as other technological developments, are applicable to all video delivery systems, including digital over-the-air broadcasting, and have the potential to provide vastly expanded programming to highly targeted audiences. Reduction in the cost of creating additional channel capacity could lower entry barriers for new channels and encourage the development of increasingly specialized niche programming on cable, satellite and other television distribution systems. We expect this ability to reach very narrowly defined audiences to increase competition both for audience and for advertising revenue. In addition, the expansion of competition due to technological innovation has increased, and may continue to increase, competitive demand for programming. Such increased demand, together with rising production costs, may in the future increase our programming costs or impair our ability to acquire programming, which will in turn impair our ability to generate revenue from the advertisers with which we seek to do business.

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Increased Programming Costs Could Adversely Affect Our Business and Operating Results

Television programming is one of our most significant operating cost components. We may be exposed in the future to increased programming costs. Should such an increase in our programming expenses occur, it could have a material adverse effect on our operating results. In addition, television networks have been seeking arrangements from their affiliates to share the networks’ programming costs and to change the structure of network compensation. If we become party to an arrangement whereby we share our networks’ programming costs, our programming expenses would increase further. In addition, we usually acquire syndicated programming rights two or three years in advance and acquiring those rights may require multi-year commitments, making it difficult to predict accurately how a program will perform. In some instances, we must replace programs before their costs have been ful ly amortized, resulting in write-offs that increase station operating costs. In addition, our stations incur costs for all types of on-air and creative talent, including anchors, reporters, writers and producers. An increase in the cost of news programming and content or in the costs for on-air and creative talent may also increase our expenses and therefore adversely affect our business and operating results.

Our Inability to Secure Carriage of Our Stations by Multi-Channel Video Programming Distributors May Adversely Affect Our Business

Cable operators and direct broadcast satellite systems are generally required to carry the analog signal of local commercial television stations pursuant to the FCC’s “must carry” rules. However, these multi-channel video programming distributors are prohibited from carrying a broadcast signal without obtaining the station’s consent. For each distributor, a local television broadcaster must make a choice once every three years whether to proceed under the “must carry” rules or to waive the right to mandatory but uncompensated carriage and negotiate a grant of retransmission consent to permit the system to carry the station’s signal, in most cases in exchange for some form of consideration from the system operator. In 2005, we elected retransmission consent for most of our stations for the three-year period commencing on January 1, 2006. At present, we have retransmission consent agreements with the majority of operators for the period January 1, 2006 to at least December 31, 2008. If our retransmission consent agreements are terminated or not renewed, or if our broadcast signal is distributed on less favorable terms, our ability to distribute our programming could be adversely affected.

In addition, although cable operators and direct broadcast satellite systems generally will be required, under the FCC’s current “must carry” rules, to retransmit a single programming stream transmitted by each local digital television station at the end of the digital television transition, the FCC has ruled that it will not require cable operators either to carry both a station’s analog and digital signals during the transition period, or after the conversation to digital, to carry more than a station’s primary video programming channel. Petitions filed by the broadcast industry requesting the FCC to reconsider that decision are pending. The limited carriage rights for our digital stations could require us to make significant expenditures to arrange for carriage by cable and DBS systems of our multicast digital signals or result in some of our multicast digital signals not being carried on cable or DBS systems. At present, we have retransmission consent agreements with a number of cable systems operators and satellite providers that require carriage of the analog and certain multicast digital signals of our stations.

Materiality of a Single Advertising Category Could Adversely Affect Our Business

We derive a material portion of our ad revenue from the automotive industry. For example, approximately 26.6% of total revenue came from the automotive category in 2004 and 2005 combined. If automotive-related advertising revenue decreases, or if revenue from another ad category that constitutes a material portion of our stations’ revenue in a particular period were to decrease, our business and operating results could be adversely affected.

Our Business is Seasonal and Cyclical and Some Years and Quarters Therefore May Be Less Profitable Than Others

Our business has experienced and is expected to continue to experience seasonality due to, among other things, seasonal advertising patterns and seasonal influences on people’s viewing habits. The size of advertisers’ budgets, which are affected by broad economic trends, affect the broadcast industry in general and the revenue of individual broadcast television stations. The advertising revenue of our stations are generally highest in the second and fourth quarters of each year, due in part to increases in consumer advertising in the spring and retail advertising in the period leading up to and including the holiday season. Additionally, advertising revenue is cyclical benefiting in even-numbered years from advertising placed by candidates for political offices and issue-oriented advertising, and demand for advertising time in Olympic broadcasts. While political and Olympic adver tising cycles have been a normal pattern for our industry for decades, the variability has become more pronounced in recent years as these respective categories of revenue have grown

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significantly in size. The seasonality and cyclicality inherent in our business make it difficult to estimate future operating results based on the previous results of any specific quarter.

The Television Industry is Highly Competitive and Our Competitors May Have Greater Resources Than We Do

The television broadcast industry is highly competitive. Some of the stations that compete with our stations are owned and operated by large national or regional companies that may have greater resources, including financial resources, than we do. Competition in the television industry takes place on several levels:  competition for audience, competition for programming (including news) and, as discussed, competition for advertisers. Our stations may not be able to maintain or increase their current audience share or revenue share. To the extent that certain of our competitors have, or may in the future obtain, greater resources than we have, we may not be able to successfully compete with them.

We Have a Controlling Stockholder

The Hearst Corporation, through its beneficial ownership of our Series A and Series B Common Stock, has voting control of our company. Through its beneficial ownership of 100% of our Series B Common Stock, Hearst also is entitled to elect as a class all but two members of our Board of Directors (currently, 11 of our 13 directors). As a result, Hearst is able to control substantially all actions to be taken by our stockholders, and also is able to maintain control over our operations and business. This control, as well as certain provisions of our Certificate of Incorporation and of Delaware law, m ay make us a less attractive target for a takeover than we otherwise might be, or render more difficult or discourage a merger proposal, tender offer or other transaction involving an actual or potential change of control. Hearst’s voting control also prevents other stockholders from exercising significant influence over our Company’s business decisions.

The Interests and Assets of Our Controlling Stockholder May Adversely Impact Our Ability to Make Certain Acquisitions

The interests of Hearst, which owns or has significant investments in other businesses, including cable television networks, newspapers, magazines and electronic media, may from time to time be competitive with, or otherwise diverge from, our interests, particularly with respect to new business opportunities and future acquisitions. We and Hearst have agreed that, without the prior written consent of the other, neither we nor they will make any acquisition or purchase any assets if such an acquisition or purchase by one party would require the other party to divest or otherwise dispose of any of its assets because of regulatory or other legal prohibitions.

Under current FCC regulations, given the newspaper and other media interests held by Hearst, we are precluded from acquiring television stations in various markets in the United States. While divestiture of a prohibited interest could permit such acquisitions, such a divestiture may not occur or may otherwise adversely impact potential acquisitions. Additionally, Hearst is not precluded from purchasing television stations, newspapers or other assets in other markets. If Hearst were to make such purchases, the FCC rules would preclude us from owning television stations in those markets in the future.

We May Encounter Conflicts of Interest with Our Controlling Stockholder

We and Hearst also have ongoing relationships that may create situations where the interests of the two parties could conflict. For example, we and Hearst are parties to a series of agreements with each other, including

•a Management Agreement (whereby we provide certain management services, such as sales, news, programming and financial and accounting management services with respect to certain Hearst-owned or managed television and radio stations);

•an Option Agreement (whereby Hearst has granted us an option to acquire certain Hearst-owned or operated television stations, as well as a right of first refusal with respect to another television station if Hearst proposes to sell that station);

•a Studio Lease Agreement (whereby Hearst leases space from us for Hearst’s radio broadcast stations);

•a Name License Agreement (whereby Hearst permits us to use the Hearst name in connection with our name and operation of our business); and

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•a Services Agreement (whereby Hearst provides us certain administrative services, such as accounting, financial, legal, tax, insurance, data processing and employee benefits).

Because we and Hearst are affiliates, it is possible that our interests concerning these agreements may from time to time conflict and that more favorable terms than those we have negotiated with Hearst may be available from third parties.

Changes in FCC Regulations and Enforcement Policies May Adversely Affect Our Business

As discussed more fully in Item 1 “Business; Federal Regulation of Television Broadcasting”, our broadcast operations are subject to extensive regulation by the FCC under the Communications Act. If we do not comply with these regulations, in particular the specific regulations discussed below, or if the FCC adopts a rigorous enforcement policy concerning them, our business and operating results could be adversely affected.

Ownership Rules. We must comply with extensive FCC regulations and policies in the ownership of our broadcast stations, which restrict our ability to consummate future transactions and, in certain circumstances, could require us to divest some stations. In general, the FCC’s ownership rules limit the number of television and radio stations that we can own in a market, the number of television stations we can own nationwide, and prohibit ownership of stations in markets where Hearst has interests in newspapers. During 2003, the FCC conducted a comprehensive review of all of its broadcast ownership rules, including the local radio ownership rule, local television ownership rule, national television ownership rule, newspaper/broadcast cross-ownership rule, and radio/television cross-ownership rule. In June 2003, the FCC adopted an order liberalizing most of the ownership rules, which would have permitted us to acquire television stations in certain markets where we are currently prohibited from acquiring new stations. Shortly thereafter, however, the FCC’s new ownership regulations were challenged in the courts. The U.S. Court of Appeals for the Third Circuit affirmed certain of the rules but rejected those affecting local television ownership and local cross-ownership of newspapers and broadcast stations and remanded the matter to the FCC for further proceedings. On June 13, 2005, the United States Supreme Court declined to review the Third Circuit’s decision. During the pendency of the FCC’s review of the ownership rules on remand, the FCC’s pre-June 2003 broadcast ownership rules remain in effect. The actions Congress or the FCC may take and changes in the FCC’s rules may adversely impact our business.

Indecency Rules. Federal law and the FCC’s rules prohibit the broadcast of obscene material at any time, and the broadcast of indecent or profane material during the period from 6 a.m. through 10 p.m. In recent years, the FCC has vigorously enforced its indecency prohibition, and Congress is currently considering legislation that would, among other things, raise the maximum amount of existing indecency fines from $32,500 to $500,000. The determination of whether content is indecent or profane is inherently subjective, creates uncertainty to our ability to comply with the rules, and impacts our programming decisions. Violation of the indecency rules could lead to sanctions which may adversely affect our business and results of operations.

Fines and Penalties. In recent years, the FCC has also vigorously enforced a number of rules, typically in connection with license renewals. For example, in 2005, the FCC issued fines and sanctions for violations of its equal employment opportunity rules, public inspection file rules, and children’s programming rules. Our stations were not the subject of monetary sanctions in 2005.

Possible Acquisitions, Divestitures or Other Strategic Initiatives May Adversely Impact Our Business

Our management is evaluating, and will continue to evaluate, the nature and scope of our operations and various short-term and long-term strategic considerations. These may include acquisitions or divestitures of, or strategic alliances, joint ventures, mergers or integration or consolidation with, television stations or other businesses, as well as discussions with third parties regarding any of these considerations. In the alternative, our management may decide from time to time that such initiatives are not appropriate.

There are uncertainties and risks relating to each of these strategic initiatives. For example, acquisition opportunities may become more limited as a consequence of the consolidation of ownership occurring in the television broadcast industry.  Also, prospective competitors may have greater financial resources than we do. Future acquisitions may not be available on attractive terms, or at all. Also, if we do make acquisitions, we may not be able to successfully integrate the acquired stations or businesses. With respect to divestitures, we may experience varying success in making such divestitures on favorable terms, if at all, or in reducing fixed costs or transferring liabilities previously associated with the divested television stations or businesses. Finally, any such acquisitions or divestitures will be subject to FCC approval and FCC rules and regulations. Any of these efforts would require varying levels of management resources, which may divert our attention from other business operations. If we do not realize the expected benefits or synergies of such

18

transactions, or, conversely, if we do not realize such benefits or synergies because we chose not to pursue any such transaction, there may be an adverse effect on our financial condition and operating results.

We Could Suffer Losses Due to Asset Impairment Charges for Goodwill and FCC Licenses

We test our goodwill and intangible assets, including FCC licenses, for impairment during the fourth quarter of every year, and on an interim date should factors or indicators become apparent that would require an interim test, in accordance with Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets.”  If the fair value of a reporting unit or an intangible asset is revised downward, an impairment under SFAS 142 could result and a non-cash charge could be required. This could materially affect our reported net earnings.

The Loss of Key Personnel Could Disrupt our Management or Operations and Adversely Affect our Business

Our business depends upon the continued efforts, abilities and expertise of our chief executive officer and other key employees. We believe that the rare combination of skills and years of broadcast experience possessed by our executive officers would be difficult to replace, and that the loss of our executive officers could have a material adverse effect on our business. Additionally, our stations employ several on-air personnel, including anchors and reporters, with significant loyal audiences. Our failure to retain these personnel could adverse affect our operating results.

Strikes and Other Union Activity Could Adversely Affect Our Business

Certain employees, such as on-air talent and engineers, at some of our stations are subject to collective bargaining agreements. If we are unable to renew expiring collective bargaining agreements, it is possible that the affected unions could take action in the form of strikes or work stoppages. Such actions, higher costs in connections with these agreements, or significant labor disputes could adversely affect our business by disrupting our ability to operate our affected stations.

Our Share Repurchase Program and Hearst’s Share Purchase Program May Affect the Market Price of Our Series A Common Stock.

We have a share repurchase program authorized by our Board of Directors, pursuant to which we may repurchase up to $300 million of our Series A Common Stock from time to time, in the open market or in private transactions, subject to market conditions. In addition, The Hearst Corporation’s Board of Directors authorized a share purchase program, pursuant to which Hearst or its subsidiaries may purchase on the open market or through private transactions up to 25 million shares of our Series A Common Stock. Such repurchases and purchases may increase or decrease the market price of our Series A Common Stock.

ITEM 1B.  UNRESOLVED STAFF COMMENTS

None.

ITEM 2.    PROPERTIES

Our principal executive offices are located at 888 Seventh Avenue, New York, New York 10106. The real property of each of our stations generally includes owned or leased offices, studios, transmitters and tower sites. Offices and main studios are typically located together, while transmitters and tower sites are often in separate locations that are more suitable for optimizing signal strength and coverage. Set forth below are our stations’ principal facilities as of December 31, 2005. In addition to the property listed below, we and the stations also lease other property primarily for communications equipment.

Station	Location	Use	Ownership	Approximate Size
Corporate	Washington D.C.	Washington D.C. Office	Leased	4,007 sq. ft.
	New York, NY	New York Office(1)	Leased	39,834 sq. ft.
WCVB	Boston, MA	Office and studio	Owned	90,002sq. ft.
		Tower and transmitter	Leased	1,600 sq. ft.
WMUR	Manchester, NH	Office and studio	Owned	67,440 sq. ft.

19

Station	Location	Use	Ownership	Approximate Size
		Tower and transmitter	Owned	4.5 acres
		Office	Leased	1,963 sq. ft.
KCRA/KQCA	Sacramento, CA	Office, studio and tower	Owned	75,000 sq. ft.
		Tower and transmitter	Owned	2,400 sq. ft.
		Tower and transmitter	Leased	1,200 sq. ft.
		Office	Leased	3,085 sq. ft.
WTAE	Pittsburgh, PA	Office and studio	Owned	68,033 sq. ft.
		Tower and transmitter	Owned	37 acres
		Office	Leased	609 sq. ft.
WESH	Orlando, FL	Studio, transmitter, tower	Owned	61,300 sq. ft.
	Daytona Beach, FL	Studio and office	Leased	1,472 sq. ft.
		Office	Leased	775 sq. ft.
		Office	Leased	535 sq. ft.
		Tower	Partnership*	190 acres
		Transmitter	Partnership*	8,050 sq. ft.
WBAL	Baltimore, MD	Office and studio	Owned	63,000 sq. ft.
		Tower	Partnership*	0.2 acres
KMBC	Kansas City, MO	Office and studio	Leased	58,514 sq. ft.
		Tower and transmitter	Owned	11.6 acres
		Land(2)	Owned	8.4 acres
WLWT	Cincinnati, OH	Office and studio	Owned	52,000 sq. ft.
		Tower and transmitter	Owned	4.2 acres
WISN	Milwaukee, WI	Office and studio	Owned	88,000 sq. ft.
		Tower and transmitter land	Leased	5.5 acres
		Transmitter building	Owned	3,192 sq. ft.
WYFF	Greenville, SC	Office and studio	Owned	57,500 sq. ft.
		Tower and transmitter	Owned	1.5 acres
		Office	Leased	3,000 sq. ft.
WDSU	New Orleans, LA	Office and studio	Owned	50,525 sq. ft.
		Transmitter	Owned	8.3 acres
KOCO	Oklahoma City, OK	Office and studio	Owned	28,000 sq. ft.
		Tower and transmitter	Owned	85 acres
WGAL	Lancaster, PA	Office, studio and tower	Owned	58,900 sq. ft.
		Office	Leased	2,380 sq. ft.
WXII	Winston-Salem, NC	Office and studio	Owned	38,027 sq. ft.
		Tower and transmitter	Owned	223.6 acres
WLKY	Louisville, KY	Office and studio	Owned	37,842 sq. ft.
		Tower and transmitter	Owned	40.0 acres
		Transmitter	Leased	1,350 sq. ft.
		Transmitter building	Owned	2,000 sq. ft.
KOAT	Albuquerque, NM	Office and studio	Owned	37,315 sq. ft.
		Tower and transmitter	Owned	328.5 acres
KCCI	Des Moines, IA	Office, studio and transmitter	Owned	52,000 sq. ft.
		Tower and transmitter	Owned	119.5 acres

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Station	Location	Use	Ownership	Approximate Size
WMTW	Portland-Auburn, ME	Office and studio	Leased	11,703 sq. ft.
		Tower and transmitter	Owned	296 acres
		Office and studio	Owned	16,300 sq. ft.
		Transmitter building	Owned	5,120 sq. ft.
		Office land	Owned	13.9 acres
KITV	Honolulu, HI	Office and studio	Owned	35,000 sq. ft.
		Tower and transmitter	Leased	130 sq. ft.
		Tower and transmitter	Leased	304 sq. ft.
		Tower and transmitter	Leased	2.6 acres
KETV	Omaha, NE	Office and studio	Owned	39,204 sq. ft.
		Tower and transmitter	Owned	23.3 acres
		Transmitter building	Owned	30,492 sq. ft.
		Office	Leased	597 sq. ft.
WAPT	Jackson, MS	Office and studio	Owned	11,600 sq. ft.
		Tower and transmitter	Owned	24 acres
WPTZ	Plattsburgh, NY	Office and studio	Owned	12,800 sq. ft.
		Office	Leased	5,441 sq. ft.
		Tower and Transmitter	Owned	2,432 sq. ft.
		Tower and transmitter	Owned	13.4 acres
WNNE	White River Junction, VT	Office and studio	Leased	5,600 sq. ft.
		Transmitter building	Leased	540 sq. ft.
		Transmitter land	Leased	3 acres
KHBS/KHOG	Fort Smith/Fayetteville, AR	Office and studio	Owned	44,904 sq. ft.
		Office and studio	Leased	1,110 sq. ft.
		Transmitter Building	Owned	2100 sq. ft.
		Tower and transmitter	Leased	2.5 acres
		Tower and transmitter	Owned	26.7 acres
KSBW	Monterey-Salinas, CA	Office and studio	Owned	44,000 sq. ft.
		Tower and transmitter	Owned	160.2 acres
		Office	Leased	900 sq. ft.

*Owned by the Company in partnership with certain third parties.

(1)Our corporate offices account for 21,789 square feet of this leased amount; we sublease the remaining square footage to a third party.

(2)In 2005 we commenced construction of an office and studio facility for KMBC on land we purchased in 2004. When the facility is completed, we will move our operations to the new facility and terminate this station’s office space lease.

ITEM 3.   LEGAL PROCEEDINGS

From time to time, we become involved in various claims and lawsuits that are incidental to our business. In our opinion, there are no legal proceedings pending against us or any of our subsidiaries that are reasonably expected to have a material adverse effect on our consolidated financial condition or results of operations.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

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

(a)  Market Performance of Common Stock and Dividends on Common Stock. Our Series A Common Stock is listed on the New York Stock Exchange (“NYSE”) under the ticker symbol “HTV.” All of the outstanding shares of our Series B Common Stock are currently held by Hearst Broadcasting, a wholly-owned subsidiary of Hearst Holdings, which is in turn a wholly-owned subsidiary of Hearst. Our Series B Common Stock is not publicly traded. The table below sets forth, for the calendar quarters indicated, the reported high and low sales prices of our Series A Common Stock on the NYSE and the dividends declared on our Series A and Series B Common Stock:

	High		Low		Dividend
2005
First Quarter	$	26.15	$	24.59	$	0.07
Second Quarter	25.71		24.50		0.07
Third Quarter	26.20		23.85		0.07
Fourth Quarter	25.76		23.33		0.07
2004
First Quarter	$	28.95	$	25.38	$	0.06
Second Quarter	27.68		25.09		0.06
Third Quarter	25.79		22.63		0.06
Fourth Quarter	26.38		24.70		0.07

On February 15, 2006, the closing price for our Series A Common Stock was $23.84, and there were approximately 581 Series A Common Stock shareholders of record.

In December 2005, we declared a quarterly cash dividend of $0.07 per share on our Series A Common Stock and our Series B Common Stock, which we paid on January 15, 2006 to holders of record on January 5, 2006, for a total of $6.5 million. During 2005, we paid a total of $26.0 million in dividends.  See Note 10 to the consolidated financial statements.

(b) Equity Compensation Plans. The following table summarizes our equity compensation plans as of December 31, 2005:

Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)		Weighted average exercise price of outstanding options, warrants and rights (b)		Number of securities available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders	8,520,847	(1)	$	23.53	5,466,476	(2)
Equity compensation plans not approved by security holders	N/A		N/A		N/A
Total	8,520,847		$	23.53	5,466,476

(1)Includes shares of Series A Common Stock to be issued upon exercise of stock options granted under the Company’s Amended and Restated 1997 Stock Option Plan and the Company’s 2004 Long Term Incentive Compensation Plan.

(2)Includes 1,138,450 shares of Series A Common Stock available for future stock compensation grants under the Company’s 2004 Long Term Incentive Compensation Plan and 4,328,026 shares of Series A Common Stock reserved for future issuance under the Company’s Employee Stock Purchase Plan.

(c) Purchase of Equity Securities by the Issuer and Affiliated Purchasers. The following table reflects purchases made during the quarter of our Series A Common Stock by Hearst Broadcasting, an indirect wholly-owned subsidiary of Hearst:

Period	(a) Total Number of Shares Purchased	(b) Average Price Paid Per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Program	(d) Maximum Number of Shares that May Yet Be Purchased Under the Program
October 1 – October 31	219,300	$	24.30	219,300	5,259,226
November 1 – November 30	294,400	$	23.86	294,400	4,964,826
December 1 – December 31	329,700	$	23.90	329,700	4,635,126
Total	843,400	$	23.99	843,400

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(1)On September 28, 2005, Hearst and its indirect wholly-owned subsidiary Hearst Broadcasting filed an amendment to their report of beneficial ownership on Schedule 13D with the SEC to report an increase in Hearst Broadcasting’s authorization to purchase the Company’s Series A Common Stock from 20 million to 25 million shares.  Hearst may effect such purchases from time to time in the open market or in private transactions, subject to market conditions and management’s discretion.

As of December 31, 2005, Hearst beneficially owned approximately 47% of the Company’s outstanding Series A Common Stock and 100% of the Company’s Series B Common Stock representing in the aggregate approximately 70.5% of our common stock.

The following table reflects purchases made by the Company of its Series A Common Stock during the three months ended December 31, 2005.

Period	(a) Total Number of Shares Purchased	(b) Average Price Paid  per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Program	(d) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program
October 1 – October 31	—	$	—	—
November 1 – November 30	294,400	$	23.86	294,400
December 1 – December 31	—	$	—	—	$	198,725,275	(1)
Total	294,400	$	23.86	294,400

(1)In May 1998, the Company’s Board of Directors authorized the repurchase of up to $300 million of its outstanding Series A Common Stock. We may effect such purchases from time to time in the open market or in private transactions, subject to market conditions and management’s discretion. As of December 31, 2005, the Company has spent approximately $108.0 million to repurchase approximately 4.3 million shares of Series A Common Stock at an average price of $24.97. We cannot assure you that we will make such repurchases in the future or, if we do, what the terms of such repurchases will be.

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ITEM 6.   SELECTED FINANCIAL DATA

The selected financial data should be read in conjunction with the historical financial statements and notes thereto included elsewhere herein and in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Hearst-Argyle Television, Inc.

(In thousands, except per share data)

	Years Ended December 31,
	2005(a)			2004(a)			2003(b)			2002(b)			2001(c)
Statement of income data:
Total revenue	$	706,883		$	779,879		$	686,775		$	721,311		$	641,876
Station operating expenses:
Salaries, benefits and other operating costs	364,421			355,641			330,519			331,643			323,520
Amortization of program rights	60,912			63,843			62,845			60,821			57,676
Depreciation and amortization.	51,728			50,376			55,467			43,566			129,420
Impairment loss (d)	29,235			—			—			—			—
Corporate, general and administrative expenses	23,149			25,268			19,122			19,650			15,817
Operating income	177,438			284,751			218,822			265,631			115,443
Interest expense, net	63,375			63,730			68,215			73,443			98,725
Interest expense, net – Capital Trust(e)	9,750			18,675			15,000			15,000			500
Other (income) expense, net(f)(g)(h)	2,500			3,700			—			(299		)	(48,778		)
Equity in (income) loss of affiliates(i)	(2,321		)	(1,648		)	(923		)	3,269			6,461
Income before income taxes	104,134			200,294			136,530			174,218			58,535
Income taxes (l)	3,917			76,352			42,309			66,201			27,448
Net income	100,217			123,942			94,221			108,017			31,087
Less preferred stock dividends(j)	2			1,067			1,211			1,377			1,422
Income applicable to common stockholders	$	100,215		$	122,875		$	93,010		$	106,640		$	29,665
Income per common share—basic	$	1.08		$	1.32		$	1.00		$	1.16		$	0.32
Number of common shares used in the calculation	92,826			92,928			92,575			92,148			91,809
Income per common share—diluted	$	1.08		$	1.30		$	1.00		$	1.15		$	0.32
Number of common shares used in the calculation	93,214			101,406			92,990			92,550			92,000
Dividends declared per share(k)	$	0.28		$	0.25		$	0.06		$	—		$	—
Balance sheet data (at year-end):
Cash and cash equivalents	$	120,065		$	92,208		$	71,528		$	4,442		$	3,260
Total assets	$	3,832,359		$	3,842,140		$	3,799,087		$	3,769,111		$	3,785,891
Long-term debt	$	777,170		$	882,221		$	882,409		$	973,378		$	1,160,205
Note payable to Capital Trust	$	134,021		$	134,021		$	206,186		$	206,186		$	206,186
Stockholders’ equity	$	1,821,459		$	1,753,837		$	1,672,382		$	1,579,262		$	1,466,614
Other data:
Net cash provided by operating activities	$	131,293		$	195,667		$	179,075		$	205,452		$	165,853
Net cash used in investing activities	$	(43,571	)	$	(74,104	)	$	(25,541	)	$	(25,818	)	$	(72,917	)
Net cash used in financing activities	$	(59,865	)	$	(100,883	)	$	(86,448	)	$	(178,452	)	$	(95,456	)
Capital expenditures	$	35,839		$	36,380		$	25,392		$	25,920		$	32,331
Program payments	$	64,104		$	62,247		$	62,039		$	59,870		$	57,385
Dividends paid on common stock	$	25,997		$	22,301		$	—		$	—		$	—
Series A Common Stock repurchases	$	16,385		$	10,920		$	—		$	—		$	4,079

See accompanying notes.

24

Notes to Selected Financial Data

(a)Includes (i) the results of our 24 stations which were owned for the entire period presented and the management fees derived from three television stations (WMOR-TV, WPBF-TV and KCWE-TV) and two radio stations (WBAL-AM and WIYY-FM) managed by us for the entire period presented (the “Managed Stations”) and (ii) the results of WMTW-TV, after its acquisition by us, from July 1, 2004 through December 31, 2005.

(b)Includes the results of our 24 television stations which were owned for the entire period presented and the management fees earned by us from the Managed Stations for the entire period presented.

(c)Includes (i) the results of 23 (which excludes WMUR-TV and WBOY-TV) of our television stations which were owned for the entire period presented and the management fees earned by us from the Managed Stations for the entire period presented; (ii) the Time Brokerage Agreement (“TBA”) for WMUR-TV from January 1 through March 27, 2001; (iii) the results of WMUR-TV, after its acquisition by us, from March 28 through December 31, 2001; (iv) the TBA for radio stations in Phoenix, Arizona (KTAR-AM, KMVP-AM and KKLT-FM) from January 1 through March 27, 2001; and (v) the results of WBOY-TV after its acquisition by us, from April 30 to December 13, 2001, the date of its disposition.

(d)In December 2005, we recorded an impairment charge of $29.2 million to write down to fair value WDSU’s FCC license and goodwill. Due to Hurricane Katrina, the future cash flows of our station in New Orleans were negatively impacted resulting in the impairment.

(e)Represents interest expense on the note payable to our wholly-owned unconsolidated subsidiary trust, which holds solely parent company debentures in the amounts of $134.0 million at December 31, 2005 and 2004 and $206.2 million at December 31, 2003 and 2002, and a $3.7 million premium paid to redeem the Series A Debentures in the amount of $72.2 million on December 31, 2004, offset by our equity interest in the earnings of the trust. See Note 7 of the consolidated financial statements.

(f)In the year ended December 31, 2002, Other (income) expense, net represents a supplemental closing fee paid to us in connection with the sale of the Phoenix Stations in March 2001. In the year ended December 31, 2001, Other (income) expense, net represents the $72.6 million pre-tax gain from the sale of the Phoenix Stations, partially offset by a $23.8 million pre-tax write-down of the carrying value of some of our investments.

(g)In 2004, ProAct Technologies Corporation sold substantially all of its operating assets to a third party as part of an overall plan of liquidation. The Company wrote-down our investment in ProAct to the net realizable value by $3.7 million during the year ended December 31, 2004. In addition we wrote down $18.8 million in March 2001. See Note 3 to the consolidated financial statements.

(h)In the year ended December 31, 2005, we concluded our joint venture with NBC Universal and recorded a loss of $2.5 million. The investment had been accounted for using the equity method.

(i)Represents our equity interest in the operating results of: (i) Internet Broadcasting Systems, Inc. from December 2, 1999 through December 31, 2005; (ii) IBS/HATV LLC in the three months ended December 31, 2002 (upon achievement of year-to-date profitability) through December 31, 2005; (iii) NBC/Hearst-Argyle Syndication, LLC from April 1, 2002 through December 31, 2005; and (iv) Ripe Digital Entertainment, Inc. from July 27, 2005 through December 31, 2005. See Note 3 to the consolidated financial statements.

(j)Represents dividends on the preferred stock issued in connection with the acquisition of KHBS-TV/KHOG-TV.

(k)During 2005, our Board of Directors declared quarterly cash dividends on our Series A and Series B Common Stock for a total amount of $26.0 million. Included in this amount was $18.0 million payable to Hearst. During 2004, our Board of Directors declared quarterly cash dividends on our Series A and Series B Common Stock for a total amount of $23.2 million. Included in this amount was $15.4 million payable to Hearst. On December 3, 2003, our Board of Directors declared a cash dividend of $0.06 per share on our Series A and Series B Common Stock in the amount of $5.6 million. We did not declare or pay any dividends on Common Stock in 2002 and 2001. See Note 10 to the consolidated financial statements.

(l)During the year ended December 31, 2005, $31.9 million in tax benefits were recorded as a result of the settlement of certain tax return examinations and $5.5 million in tax benefits were recorded as a result of a change in Ohio tax law.

25

ITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Organization of Information

Management’s Discussion and Analysis provides a narrative on our financial performance and condition that should be read in conjunction with the accompanying consolidated financial statements. It includes the following sections:

•Executive Summary

•Critical Accounting Policies and Estimates

•Results of Operations

•Liquidity and Capital Resources

•Impact of Inflation

•Forward-Looking Statements

•New Accounting Pronouncements

Executive Summary

Hearst-Argyle Television, Inc. and its subsidiaries (hereafter “we” or the “Company”) own and operate 25 network-affiliated television stations. Additionally, we provide management services to two network-affiliated stations and one independent television station and two radio stations (the “Managed Stations”) in exchange for a management fee. See Note 14 to the consolidated financial statements.

Events and other factors that have influenced our 2005 results

•Total revenue decreased 9.4% primarily due to the normal, cyclical decrease of political and Olympic revenue.

•During 2005, the Company was directly affected by Hurricane Katrina. We own and operate WDSU-TV, the NBC affiliate serving New Orleans, Louisiana, the nation’s 43^rd largest television market. We estimate that WDSU lost $4.2 million of revenue during the second half of the year and our stations incurred approximately $3.7 million in incremental expenses due to the hurricane. Also, we wrote off $2.4 million of net book value of property, plant and equipment damaged by the storm and recorded a $2.4 million receivable due from our property insurers, which offset the impact of the loss in the income statement.

•We perform our annual review for impairment of goodwill and other indefinite lived intangible assets in the fourth quarter in connection with the preparation of our annual financial statements. Due to the negative impact of Hurricane Katrina and the uncertainty of the future prospects of the New Orleans market, we recorded an impairment loss of $29.2 million to write down WDSU-TV’s FCC license by $26.2 million and goodwill by $3.0 million.

•During the year ended December 31, 2005, $31.9 million in tax benefits were recorded as a result of the settlement of certain tax return examinations and $5.5 million in tax benefits were recorded as a result of a change in Ohio tax law.

•In 2005 cash increased $27.9 million over 2004, after capital expenditures, interest and taxes and the funding (with cash on-hand) of a repurchase of $15 million of our 7.5% Senior Notes due 2027, the payment of $26.0 million of dividends to our holders of Series A and B Common Stock and the repurchase of $16.4 million of Series A Common Stock.

Industry Trends

•Political advertising decreases in odd-numbered years, such as 2005, due to the decrease in the number of candidates running for political office.

•Revenue from Olympic advertising occurs exclusively in even-numbered years, such as 2004, with the alternating Winter and Summer Games occurring every two years.

•The U.S. Congress passed, and the President signed into law, legislation that guides the transition from analog to digital television broadcasting. A component of this legislation is a deadline of February 17, 2009 for completion of the transition to digital broadcasting and the return of the analog spectrum to the government. The Company estimates that analog equipment having a net book value of approximately $18.1 million as of December 31, 2005 is affected by the digital conversion. Such equipment was being depreciated over various remaining useful lives,

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some of which extend to 2014. As a result of the new legislation, the equipment will now be depreciated through March 31, 2009.

•The FCC has permitted broadcast television station licensees to use their digital spectrum for a wide variety of services such as high-definition television programming, audio, data and other types of communication, subject to the requirement that each broadcaster provide at least one free video channel equal in quality to the current technical standards. Our station, KOAT-TV in Albuquerque, New Mexico, currently leases a portion of its digital spectrum to U.S. Digital Television, LLC and eight of our NBC stations currently broadcast the NBC Weather Plus Network, a 24/7 local and national weather broadcast network, on a multicast stream with their main digital channels.

•The FCC is currently considering reducing the restrictions on ownership including newspaper/television cross ownership. These regulations have met opposition from both the public and within the government and may not be ratified. The lack of clarity concerning ownership rules can reduce our ability to purchase, sell and/or swap stations in certain markets.

•Compensation from networks to their affiliates in exchange for broadcasting of network programming has been sharply reduced in recent years and may be eliminated in the future.

•Pursuant to the Cable Television Consumer Protection and Competition Act of 1992 (“1992 Cable Act”) and the FCC’s “must carry” regulations, cable operators are generally required to devote up to one-third of their activated channel capacity to the carriage of the analog signal of local commercial television stations. We record retransmission income resulting from most of our cable and satellite relationships.

Critical Accounting Policies and Estimates

Our management’s discussion and analysis of financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of our consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to allowances for doubtful accounts; program rights, barter and trade transactions; useful lives of property, plant and equipment; intangible assets; carrying value of investments; accrued liabilities; contingent liabilities; income taxes; pension benefits; and fair value of financial instruments and stock options. We base our estimates on historical experience and on various other assumptions, which we believe to be reasonable under the circumstances. Had we used different assumptions in determining our estimates, our reported results may have varied. The different types of estimates that are required to be made by us in the preparation of our consolidated financial statements vary significantly in the level of subjectivity involved in their determination. We have identified the estimates below as those which contain a relatively high level of subjectivity in their determination and therefore could have a more material effect upon our reported results if different assumptions were used.

Impairment Testing of Intangible Assets—In performing our annual impairment testing of goodwill and FCC licenses, which are both considered to be intangible assets with indefinite useful lives, we must make a significant number of assumptions and estimates in determining the fair value based on the present value of future cash flows. To assist in this process, we utilize the services of an independent valuation consulting firm. See Note 4 to the consolidated financial statements. The assumptions and estimates required under the impairment testing of goodwill and FCC licenses included future market revenue growth, operating profit margins, cash flow multiples, market revenue share, and weighted-average cost of capital, among others. Estimates of future cash flows for our station in New Orleans declined significantly from prior year due to the negative impact of Hurricane Katrina on the New Orleans market. The aggregate book value of FCC licenses exceeded the estimated fair value by $26.2 million and the Company wrote down the book value of FCC licenses accordingly. After reducing the carrying value of the FCC license, the Company compared the carrying value of net assets to the enterprise value. As a result, the Company wrote down $3.0 million of goodwill.

Investment Carrying Values—We have investments in unconsolidated affiliates, which are accounted for under the equity method if our equity interest is from 20% to 50%, and under the cost method if our equity interest is less than 20% and we do not exercise significant influence over operating and financial policies. We review the carrying value of investments on an ongoing basis and adjust them to reflect net realizable value, where necessary. See Note 3 to the consolidated financial statements. As part of our analysis and determination of the net realizable value of investments, we must make assumptions and estimates regarding expected future cash flows, which involve assessing the financial results, forecasts, and strategic direction of the investee companies. In addition, we must make assumptions regarding discount rates, market growth rates, comparable company valuations and other factors, and the types of assumptions we must make differ according to the type of investment to be valued. Had we utilized different assumptions and estimates in our assessment of the net realizable value of investments, the carrying values of our investments as of December 31, 2005 may 

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have been different. We consider the assumptions used in our determination of investment carrying values to be reasonable. During the year ended December 31, 2004, the Company recorded a $3.7 million write-down to net realizable value of the Company’s investment in ProAct Technologies Corporation (“ProAct”).

Pension Assumptions—In computing projected benefit obligations and the resulting pension expense, we are required to make a number of assumptions. To assist in this process, we use the services of an independent consulting firm. See Note 16 to the consolidated financial statements. To compute our projected benefit obligations as of the measurement date of September 30, 2005, we used the discount rate of 5.75% and a rate of compensation increase of 4.0%. In determining the discount rate assumption of 5.75%, we used a measurement date of September 30, 2005 and constructed a portfolio of bonds to match the benefit payment stream that is projected to be paid from the Company’s pension plans. The benefit payment stream is assumed to be funded from bond coupons and maturities as well as interest on the excess cash flows from the bond portfolio. To compute our pension expense in the year ended December 31, 2005, we assumed a discount rate of 6.0%, an expected long-term rate of return on plan assets of 7.75%, and a rate of compensation increase of 4.0%. To determine the discount rate assumption of 6.0%, we used the measurement date of September 30, 2004 and used the same methodology to construct a portfolio of bonds to match the projected benefit payment. The expected long-term rate of return on plan assets assumption of 7.75% is based on the weighted average expected long-term returns for the target allocation of plan assets as of the measurement date of September 30, 2004. See Note 16 to the consolidated financial statements for further discussion on management’s methodology for developing the expected long-term rate of return assumption. In calculating our pension expense for the year ending December 31, 2006, we anticipate using an assumed expected long-term rate of return of 7.75%. We consider the assumptions used in our determination of our projected benefit obligations and pension expense to be reasonable.

Pension Assumptions Sensitivity Analysis

The weighted-average assumptions used in computing our net pension expense and projected benefit obligation have a significant effect on the amounts reported. A one-percentage point change in each of the assumptions below would have the following effects upon net pension expense and projected benefit obligation, respectively, in the year ended and as of December 31, 2005:

	One Percentage Point Increase								One Percentage Point Decrease
	Discount Rate			Expected long- term rate of return			Rate of compensation increase		Discount Rate		Expected long- term rate of return		Rate of compensation increase
	(In thousands)
Net pension expense	$	(3,578	)	$	(1,263	)	$	872	$	4,280	$	1,263	$	(785	)
Projected benefit obligation	$	(25,344	)	$	—		$	3,450	$	30,525	$	—	$	(3,180	)

Income Taxes—Income taxes are accounted for in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 109, Accounting for Income Taxes (“SFAS 109”), which requires that deferred tax assets and liabilities be recognized for the differences in the book and tax bases of certain assets and liabilities using enacted tax rates. SFAS 109 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not, that some portion or all of the deferred tax assets will not be realized. Income tax expense was $3.9 million or 3.76% of pre-tax income in our Consolidated Statement of Income for the year ended December 31, 2005. Deferred tax assets were approximately $4.0 million and deferred tax liabilities were approximately $845.3 million as of December 31, 2005. Our estimates of income taxes and the significant items giving rise to the deferred assets and liabilities are set forth in Note 9 to the consolidated financial statements. These estimates reflect our assessment of future taxes to be paid on items reflected in the consolidated financial statements, giving consideration to both timing and probability. Actual income taxes could vary from such estimates as a result of future changes in income tax law or reviews by the Internal Revenue Service or other tax authorities.

Results of Operations

Results of operations for the years ended December 31, 2005, 2004 and 2003 include (i) the results of our 24 television stations, which were owned for the entire period presented, and the management fees derived by the three television and two radio stations managed by us for the entire period presented; and (ii) the results of operations of WMTW-TV, after our acquisition of the station, from July 1, 2004 through December 31, 2005.

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Year Ended December 31, 2005

Compared to Year Ended December 31, 2004

	For the years ended December 31,
	2005			2004			$ Change			% Change
	(In Thousands)
Revenue	$	706,883		$	779,879		$	(72,996	)	(9.4	)%
Station Operating Expenses:
Salaries, benefits and other operating costs	364,421			355,641			8,780			2.5	%
Amortization of program rights	60,912			63,843			(2,931		)	(4.6	)%
Depreciation and amortization	51,728			50,376			1,352			2.7	%
Impairment Loss	29,235			—			29,235			N/A
Corporate, general and administrative	23,149			25,268			(2,119		)	(8.4	)%
Operating income	177,438			284,751			(107,313		)	(37.7	)%
Interest expense, net	63,375			63,730			(355		)	(0.6	)%
Interest expense, net – Capital Trust	9,750			18,675			(8,925		)	(47.8	)%
Other expense	2,500			3,700			(1,200		)	(32.4	)%
Equity in (income) of affiliates, net	(2,321		)	(1,648		)	(673		)	40.8	%
Income before income taxes	104,134			200,294			(96,160		)	(48.0	)%
Income taxes	3,917			76,352			(72,435		)	(94.9	)%
Net income	$	100,217		$	123,942		$	(23,725	)	(19.1	)%

Total revenue.

Total revenue includes:

(i)cash and barter advertising revenue, net of agency and national representatives’ commissions;

(ii)network compensation; and

(iii)other revenue (including retransmission revenue).

See “Revenue Recognition” under Note 2 to the consolidated financial statements.

Total revenue in the year ended December 31, 2005 was $706.9 million, as compared to $779.9 million in the year ended December 31, 2004, a decrease of $73.0 million or 9.4%. This decrease was primarily attributable to the following factors:

(i)a $74.4 million decrease in net political advertising revenue resulting from the normal, cyclical nature of the television broadcasting business, in which the demand for advertising by candidates running for political office significantly increases in even-numbered election years (such as 2004);

(ii)a $19 million decrease representing the absence of Olympic revenue; and

(iii)a $10.0 million decrease in network compensation; partially offset by

(iv)an increase in the automotive, financial services, and furniture and housewares categories; and

(v)a $5.4 million increase in retransmission revenue.

Salaries, benefits and other operating costs.

Salaries, benefits and other operating costs were $364.4 million in the year ended December 31, 2005, as compared to $355.6 million in the year ended December 31, 2004, an increase of $8.8 million or 2.5%. This increase was primarily due to:

(i)a $4.9 million increase in payroll expense;

(ii)a $4.1 million increase in pension and employee benefit expense; and

(iii)$3.7 million in incremental expenses due to Hurricane Katrina; partially offset by

(iv)a $2.1 million decrease in Trade/Barter Expense; and

(v)a $2.5 million decrease in property and casualty insurance expense.

Amortization of program rights.

Amortization of program rights was $60.9 million in the year ended December 31, 2005, as compared to $63.8 million in the year ended December 31, 2004, a decrease of $2.9 million or 4.6%. This decrease was primarily due to:

(i)cost savings by replacing certain higher cost first-run programs; and

(ii)a $2.2 million write-down of certain syndicated programs in 2004; partially offset by

(iii)the additional programming cost for WMTW-TV, which we acquired on July 1, 2004;

Depreciation and amortization.

Depreciation and amortization was $51.7 million in the year ended December 31, 2005, as compared to $50.4 million in the year ended December 31, 2004, an increase of $1.4 million or 2.7%. Depreciation expense was $45.7 million in the year ended December 31, 2005, as compared to $44.4 million in the year ended December 31, 2004, an increase of $1.3 million or 2.9%. This increase was primarily due to additional depreciation from WMTW-TV, which we acquired on July 1, 2004.

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Amortization was $6.0 million in each of the years ended December 31, 2005 and 2004.

Impairment loss.

 The Company recorded a $29.2 million write down of its indefinite lived intangible assets and goodwill for the year ended December 31, 2005. In performing its annual review for impairment the Company reduced its estimates of future cash flows for our station in New Orleans due to the negative impact of Hurricane Katrina on the New Orleans market. The aggregate book value of FCC licenses exceeded the estimated fair value by $26.2 million and the Company wrote down the book value of FCC licenses accordingly. After reducing the carrying value of the FCC license, the Company compared the carrying value of net assets to the enterprise value. As a result, the Company wrote down $3.0 million of goodwill.

Corporate, general and administrative expenses.

Corporate, general and administrative expenses were $23.1 million in the year ended December 31, 2005, as compared to $25.3 million in the year ended December 31, 2004, a decrease of $2.1 million or 8.4%. The decrease was primarily due to:

(i)a decrease  in salaries and incentive costs; and

(ii)a decrease in accounting and consulting fees primarily as a result of a reduction of costs associated with Sarbanes-Oxley Section 404 compliance.

Operating income.

Operating income was $177.4 million in the year ended December 31, 2005, as compared to $284.8 million in the year ended December 31, 2004, a decrease of $107.3 million or 37.7%. This net decrease in operating income was due to the items discussed above.

Interest expense, net.

Interest expense, net of interest income, was $63.4 million in the year ended December 31, 2005, as compared to $63.7 million in the year ended December 31, 2004, a decrease of $0.4 million or 0.6%. This decrease was primarily due to:

(i)an increase in interest income of $1.7 million in the year ended December 31, 2005 as compared to the year ended December 31, 2004, due in part to higher cash balances; partially offset by

(ii)the $0.7 million premium paid in the fourth quarter of 2005 on the repurchase of $15 million of our 7.5% Senior Notes due 2027; and

(iii)the acceleration of $0.7 million of deferred financing costs related to the repurchase of those Senior Notes.

Interest Expense, net – Capital Trust.

Interest expense, net, to the Capital Trust, was $9.8 million in the year ended December 31, 2005, compared to $18.7 million in the year ended December 31, 2004, a decrease of $8.9 million, or 47.8%. The decrease results from $5.4 million in interest savings due to the redemption of the $72.2 million Series A Debentures in December 2004 and the absence of a $3.7 million premium we paid in 2004 for the redemption of those Debentures.

Other expense.

Other expense was $2.5 million in the year ended December 31, 2005, as compared to $3.7 million in the year ended December 31, 2004, a decrease of $1.2 million or 32.4%. In December 2005, NBC and the Company concluded the NBC/Hearst-Argyle Syndication, LLC joint venture. The Company recorded a loss of $2.5 million. During the year ended December 31, 2004, the Company recorded a $3.7 million write-down to net realizable value of the Company’s investment in ProAct Technologies Corporation (“ProAct”).

Equity in (income) of affiliates, net.

Equity in (income) of affiliates was $2.3 million in the year ended December 31, 2005, as compared to $1.6 million of income in the year ended December 31, 2004, an increase of $0.7 million or 40.8%. See Note 3 to the consolidated financial statements. This increase was primarily due to the improved operating results of Internet Broadcasting Systems, Inc. (“Internet Broadcasting”) and related Internet sites partially offset by a loss from our

30

investment in Ripe Digital Entertainment, Inc. (“Ripe TV”). Our share in the financial results of Internet Broadcasting entities was $2.8 million in the year ended December 31, 2005, as compared to $1.6 million in the year ended December 31, 2004.

Income taxes.

Income tax expense was $3.9 million in the year ended December 31, 2005, as compared to $76.4 million in the year ended December 31, 2004, a decrease of $72.4 million or 94.9%. This decrease in income tax expense was primarily due to

(i)a decrease in income before income taxes from $200.3 million for the year ended December 31, 2004 to $104.1 million for the year ended December 31, 2005;

(ii)$31.9 million in tax benefits recorded as a result of the settlement of certain tax return examinations in the period ended June 30, 2005; and

(iii)a net deferred tax benefit of $5.5 million as a result of Ohio tax law changes.

We expect our effective tax rate for the year ending December 31, 2006 to be approximately 39.5%.

The current and deferred portions of our income tax (benefit) provision were $(2.7) million and $6.6 million, respectively, in the year ended December 31, 2005, compared to $56.2 million and $20.1 million, respectively, in the year ended December 31, 2004. The decrease in current income taxes in 2005 compared to 2004 was due primarily to our agreement in June 2005 with the Internal Revenue Service (“IRS”) to settle certain examination matters for tax years 2001-2002, principally related to deductions of income tax basis associated with certain of our prior acquisitions. The settlement resulted in our recognition of $31.9 million of reduced current income tax expense in 2005. The additional decrease in current income tax expense in 2005 compared to 2004 was primarily due to lower income before income tax in 2005 than in 2004. The decrease in deferred income taxes in 2005 compared to 2004 was due primarily to the deferred tax benefits received as a result of the book impairment losses recorded to the New Orleans market’s FCC license and the Ohio tax law changes.

Net income.

Net income was $100.2 million in the year ended December 31, 2005, as compared to $123.9 million in the year ended December 31, 2004, a decrease of $23.7 million or 19.1%. This decrease was due to the items discussed above, primarily:

(i)a decrease of $107.3 million in Operating income; and

(ii)a decrease of $8.9 million in Interest expense, net – Capital Trust; partially offset by

(iii)a decrease of $72.4 million in Income taxes, in the year ended December 31, 2005, as compared to the year ended December 31, 2004.

Year Ended December 31, 2004

Compared to Year Ended December 31, 2003

	For the years ended December 31,
	2004			2003			$ Change			% Change
	(In Thousands)
Revenue	$	779,879		$	686,775		$	93,104		13.6	%
Station Operating Expenses:
Salaries, benefits and other operating costs	355,641			330,519			25,122			7.6	%
Amortization of program rights	63,843			62,845			998			1.6	%
Depreciation and amortization	50,376			55,467			(5,091		)	(9.2	)%
Corporate, general and administrative	25,268			19,122			6,146			32.1	%
Operating income	284,751			218,822			65,929			30.1	%
Interest expense, net	63,730			68,215			(4,485		)	(6.6	)%
Interest expense, net – Capital Trust	18,675			15,000			3,675			24.5	%
Other expense	3,700			—			3,700			N/A
Equity in (income) loss of affiliates, net	(1,648		)	(923		)	(725		)	78.5	%
Income before income taxes	200,294			136,530			63,764			46.7	%
Income taxes	76,352			42,309			34,043			80.5	%
Net income	$	123,942		$	94,221		$	29,721		31.5	%

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Total revenue.

Total revenue in the year ended December 31, 2004 was $779.9 million, as compared to $686.8 million in the year ended December 31, 2003, an increase of $93.1 million or 13.6%. This increase was primarily attributable to the following factors:

(i)an increase in net political advertising revenue of approximately $68.6 million, as a result of the cyclical nature of the television broadcasting business, in which the demand for advertising by candidates running for political office significantly increases in even-numbered years (such as 2004);

(ii)Olympic revenue of $19.0 million, as a result of the normal, cyclical nature of the television broadcasting business, in which the Olympics occur in even numbered years (such as 2004);

(iii)an increase in demand by national and local advertisers, particularly in the categories of automotive, retail, furniture and housewares, financial services, telecommunications and pharmaceuticals; and

(iv)embedded in the above is the impact of WMTW-TV, which we acquired on July 1, 2004.

Salaries, benefits and other operating costs.

Salaries, benefits and other operating costs were $355.6 million in the year ended December 31, 2004, as compared to $330.5 million in the year ended December 31, 2003, an increase of $25.1 million or 7.6%. This increase was primarily due to:

(i)an increase of approximately $7.2 million, resulting from salary increases and overtime related to the expansion to weekend morning news in certain markets and the coverage of breaking news stories, including hurricanes in the southeast;

(ii)an increase of approximately $5.1 million in employee benefits and pension expenses;

(iii)higher expense of $4.2 million from WMTW-TV which we acquired on July 1, 2004;

(iv)$4.4 million from higher sales commissions and bonuses resulting from increased revenue; and

(v)an increase of approximately $2.7 million in news gathering costs impacted by Olympic and political coverage, including conventions in Boston and New York.

Amortization of program rights.

Amortization of program rights was $63.8 million in the year ended December 31, 2004, as compared to $62.8 million in the year ended December 31, 2003, an increase of $1.0 million or 1.6%. This increase was primarily due to:

(i)a $2.2 million write-down of certain off-net programs; and

(ii)the additional programming cost for WMTW-TV, which we acquired on July 1, 2004; partially offset by

(iii)cost savings by replacing certain higher cost first-run programs; and

(iv)a declining rate of amortization for certain off-network syndicated programs, primarily at our stations in Kansas City, Missouri and Sacramento, California.

Depreciation and amortization.

Depreciation and amortization was $50.4 million in the year ended December 31, 2004, as compared to $55.5 million in the year ended December 31, 2003, a decrease of $5.1 million or 9.2%. Depreciation expense was $44.4 million in the year ended December 31, 2004, as compared to $45.9 million in the year ended December 31, 2003, a decrease of $1.5 million or 3.4%. This decrease was primarily due to:

(i)the Company’s recording of approximately $4.6 million of accelerated depreciation in the year ended December 31, 2003 on certain broadcasting equipment for which management re-evaluated the useful life; partially offset by

(ii)increased depreciation expense from recent investments in broadcast assets and the additional depreciation from WMTW-TV, which we acquired on July 1, 2004.

Amortization was $6.0 million in the year ended December 31, 2004, as compared to $9.5 million in the year ended December 31, 2003, a decrease of $3.5 million, principally resulting from amortization related to a separately identified intangible asset, advertiser client base. In December 2001, we had reclassified the remaining net book value of the advertiser client base to goodwill in the consolidated balance sheet and ceased amortization. In December 2003, we determined the advertiser client base should continue to be separately identified from goodwill and, as an intangible asset with a finite useful life under SFAS 142, be amortized over its estimated useful life. Accordingly, the Company recorded a catch-up to amortization expense on the advertiser client base of $7.1 million in the fourth quarter of 2003. See Note 4 to the consolidated financial statements.

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Corporate, general and administrative expenses.

Corporate, general and administrative expenses were $25.3 million in the year ended December 31, 2004, as compared to $19.1 million in the year ended December 31, 2003, an increase of $6.1 million or 32.1%. The increase was primarily due to:

(i)an increase in salaries and incentive costs; and

(ii)an increase in accounting and consulting fees incurred in connection with increased public company compliance requirements, particularly Sarbanes-Oxley Section 404 compliance.

Operating income.

Operating income was $284.8 million in the year ended December 31, 2004, as compared to $218.8 million in the year ended December 31, 2003, an increase of $65.9 million or 30.1%. This net increase in operating income was due to the items discussed above.

Interest expense, net.

Interest expense, net of interest income, was $63.7 million in the year ended December 31, 2004, as compared to $68.2 million in the year ended December 31, 2003, a decrease of $4.5 million or 6.6%. This decrease was primarily due to

(i)the maturity of the credit facility in April 2004. See Note 6 to the consolidated financial statements; and

(ii)an increase in interest income of $1.2 million in the year ended December 31, 2004 as compared to the year ended December 31, 2003.

Interest Expense, net – Capital Trust.

Interest expense, net, to the Capital Trust, was $18.7 million in the year ended December 31, 2004, compared to $15.0 million in the year ended December 31, 2003. The increase results from a $3.7 million premium paid for the redemption of the $72.2 million Series A Debentures.

Other  expense.

Other expense was $3.7 million in the year ended December 31, 2004, as compared to zero in the year ended December 31, 2003. The $3.7 million represents a write-down to net realizable value of the Company’s investment in ProAct. In December 2004, ProAct sold its assets to a third party as part of an overall plan of liquidation.

Equity in (income) of affiliates, net.

Equity in (income) of affiliates was $1.6 million in the year ended December 31, 2004, as compared to $0.9 million of income in the year ended December 31, 2003, an increase of $0.7 million. See Note 3 to the consolidated financial statements. This increase was primarily due to the improved operating results of Internet Broadcasting and related Internet sites. Our share in the financial results of Internet Broadcasting entities was $1.6 million in the year ended December 31, 2004, as compared to $1.0 million in the year ended December 31, 2003. Our recorded share of the loss in the financial results of NBC/Hearst-Argyle Syndication, LLC was zero in the year ended December 31, 2004, as the Company has no book basis remaining in the initial investment in the entity, and a net loss of approximately $0.1 million in 2003.

Income taxes.

Income tax expense was $76.4 million in the year ended December 31, 2004, as compared to $42.3 million in the year ended December 31, 2003, an increase of $34.0 million or 80.5%. This increase in income tax expense was primarily due to

(i)an increase in income before income taxes from $136.5 million in the year ended December 31, 2003 to $200.3 million in the year ended December 31, 2004; and

(ii)an increase in our effective tax rate from 31.0% in the year ended December 31, 2003 to 38.1% in the year ended December 31, 2004, as our  2003 effective tax rate included

(a)a tax benefit of approximately $4.0 million, reflecting the  conclusion  of  a  federal tax examination covering our 1998 through 2000 tax years in the third quarter of 2003; and

(b)a tax benefit of  approximately  $5.4 million,  relating to  the  closure  of certain state matters in the fourth quarter of 2003.

The current and deferred portions of our income tax (benefit) provision were $56.2 million and $20.1 million, respectively, in the year ended December 31, 2004, compared to $(0.9) million and $43.2 million, respectively, in the year ended December 31, 2003. In the years ended December 31, 2004 and 2003, the current and deferred portions of our

33

income tax expense were affected by increases in current tax expense and decreases in deferred tax expense of $57.1 million and $23.1 million, respectively, as well as cash tax payments, due to deductions of income tax basis associated with certain of our prior acquisitions. We received approval from the Internal Revenue Service regarding the methodology for determining these deductions. See Note 9 to the consolidated financial statements.

Net income.

Net income was $123.9 million in the year ended December 31, 2004, as compared to $94.2 million in the year ended December 31, 2003, an increase of $29.7 million or 31.5%. This increase was due to the items discussed above, primarily:

(i)an increase of $65.9 million in Operating income; and

(ii)a decrease of $4.5 million in Interest expense, net; partially offset by

(iii)an increase of $3.7 million in Interest expense, net – Capital Trust;

(iv)an increase of $3.7 million in Other (income) expense, net; and

(v)an increase of $34.0 million in Income taxes, in the year ended December 31, 2004, as compared to the year ended December 31, 2003.

Liquidity and Capital Resources

	For the years ended December 31,									2005 vs 2004			2004 vs 2003
(Dollars in Thousands)	2005			2004			2003			$ Change			$ Change
Net cash provided by operating activities	$	131,293		$	195,667		$	179,075		$	(64,374	)	$	16,592
Net cash used in investing activities	$	(43,571	)	$	(74,104	)	$	(25,541	)	$	30,533		$	(48,563	)
Net cash used in financing activities	$	(59,865	)	$	(100,883	)	$	(86,448	)	$	41,018		$	(14,435	)
Cash and cash equivalents	$	120,065		$	92,208		$	71,528		$	27,857		$	20,680
Cash paid during the year for:
Interest	$	64,320		$	63,502		$	65,829		$	818		$	(2,327	)
Interest on Note payable to Capital Trust	$	9,750		$	18,675		$	15,000		$	(8,925	)	$	3,675
Taxes, net of refunds	$	39,892		$	59,318		$	5,082		$	(19,426	)	$	54,236
Dividends paid on common stock	$	25,997		$	22,301		$	—		$	3,696		$	22,301
Series A Common Stock repurchases	$	16,385		$	10,920		$	—		$	5,465		$	10,920

As of December 31, 2005, the Company’s cash and cash equivalents balance was $120.1 million, as compared to $92.2 million as of December 31, 2004 and $71.5 million of December 31, 2003. The net increases in cash and cash equivalents of $27.9 million during 2005 and $20.7 million during 2004 were due to the factors described below under Operating Activities, Investing Activities, and Financing Activities.

Operating Activities

Net cash provided by operating activities was approximately $131.3 million, $195.7 million and $179.1 million in the years ended December 31, 2005, 2004 and 2003, respectively. The decrease in net cash provided by operating activities of $64.4 million in the year ended December 31, 2005 as compared to the year ended December 31, 2004 was primarily due to

(i)the decrease in our revenue and net income, consistent with cyclical changes in revenue, as discussed above under “Total revenue,” and “Net income”; and

(ii)changes in working capital, primarily changes in other assets, accounts payable and accrued liabilities, and other liabilities.

The increase in net cash provided by operating activities of $16.6 million in the year ended December 31, 2004 as compared to the year ended December 31, 2003 was primarily due to

(i)the increase in our revenue and net income, consistent with cyclical changes in revenue; and

(ii)changes in working capital and other assets and liabilities, primarily due to an increase in accounts receivable resulting from the timing of collections and the fact that 2004 fourth quarter revenue was largely comprised of political advertising which is paid prior to airing; a decrease in accounts payable and accrued liabilities resulting from the timing of payments; and an increase in the pension contribution of approximately $6 million reflected in the changes in other assets and other liabilities.

Investing Activities

Net cash used in investing activities was approximately $43.6 million, $74.1 million and $25.5 million in the years ended December 31, 2005, 2004 and 2003, respectively. Investing activities included investments in digital media companies in 2005, the acquisition of WMTW-TV in 2004 and investments in property, plant and equipment in all periods.

34

In 2005, we invested an aggregate of $8.5 million in Ripe TV, USDTV and to conclude our joint venture with NBC Universal. In 2004, we acquired assets of WMTW-TV, channel 8, the ABC affiliate serving the Portland-Auburn, Maine television market, for approximately $38.1 million in cash including acquisition costs. See Note 3 to the consolidated financial statements.

During the years ended December 31, 2005, 2004, and 2003, our primary investing activities are equipment purchases related to digital, maintenance and special projects were as follows (in millions):

	For the years ended December 31,
	2005		2004		2003
Digital	$	6.5	$	1.9	$	3.8
Maintenance	17.0		20.8		14.5
Special	12.3		13.7		7.1
Total	$	35.8	$	36.4	$	25.4

For the year ending December 31, 2006, we have approved projects totaling approximately $77 million in property, plant and equipment, although we anticipate that actual expenditures in 2006 will be less. While the maintenance expenditures included in this total remain consistent with the historical levels, the high level of capital investment relates to several special projects as follows:

(i)$31 million on building projects in Kansas City, Baltimore, Omaha and New York

(ii)$15 million on news acquisition and editing equipment

(iii)$5 million on information technology projects

(iv)$3 million on repairs related to damage caused by Hurricane Katrina

Since 1997 through December 31, 2005, we have invested approximately $68 million in capital expenditures related to digital conversions, as mandated by the FCC.

Financing Activities

Net cash used in financing activities was approximately $59.9 million, $100.9 million, and $86.4 million in the years ended December 31, 2005, 2004 and 2003, respectively. In the year ended December 31, 2005, we used cash provided by operating activities primarily to repurchase $15 million of our 7.5% senior notes due 2027,  fund $26.0 million of dividends to our holders of Series A and B Common Stock and repurchase $16.4 million of Series A Common Stock. In the year ended December 31, 2004 we used cash provided by operating activities to redeem the $70 million Series A Debentures issued by the Capital Trust (net of the redemption of common stock by the Capital Trust), fund $22.3 million of dividends to our holders of Series A and B Common Stock, repurchase $10.9 million of Series A Common Stock and redeem $7.1 million of preferred stock. In the year ended December 31, 2003, we used cash provided by operating activities to pay off the entire remaining balance on our Credit Facility of $91.0 million.

Long-term debt outstanding as of December 31, 2005 and 2004, and the net decreases to long-term debt in the year ended December 31, 2005 were as follows (in thousands):

Long Term Debt	Senior Notes			Private Placement Debt			Capital Lease Obligations			Total
Balance 12/31/04	$	432,110		$	450,000		$	111		$	882,221
Decreases:
Repurchase of Senior Notes due 2027	(15,000		)							(15,000		)
Reclassification to current portion	—			(90,000		)	(51		)	(90,051		)
Balance 12/31/05	$	417,110		$	360,000		$	60		$	777,170

Our private placement debt has sinking fund payments of $90 million per year beginning in December 2006.

Certain of our debt obligations contain certain financial and other covenants and restrictions on the Company. None of these covenants or restrictions include any triggers explicitly tied to the Company’s credit ratings or stock price. We are in compliance with all such covenants and restrictions as of December 31, 2005. All of our long-term debt obligations as of December 31, 2005, exclusive of capital lease obligations, bear interest at a fixed rate. Our credit ratings for long-term debt obligations, respectively, were BBB- by Standard & Poor’s and Fitch Ratings, and Baa3 by Moody’s Investors Service, as of December 31, 2005. Such credit ratings are considered to be investment grade.

35

On April 15, 2005, we entered into a five year $250 million credit facility with a consortium of banks led by JP Morgan Chase, Bank of America, Wachovia Bank, BNP Paribas and Harris Nesbitt. The new credit facility can be used for general corporate purposes including working capital, investments, acquisitions, debt repayment and dividend payments. On the same day, we capitalized $1.1 million of costs related to the credit facility. Outstanding principal balances under the credit facility will bear interest at our option at either LIBOR or the alternate base rate (“ABR”), plus the applicable margin. The applicable margin for ABR loans is zero. The applicable margin for LIBOR loans varies between 0.50% and 1.00% depending on the ratio of our total debt to earnings before interest, taxes, depreciation and amortization as defined by the credit agreement (the “Leverage Ratio”). The ABR is the greater of (i) the prime rate or (ii) the Federal Funds Effective Rate in effect plus 0.5%. We are required to pay a commitment fee based on the unused portion of the Credit Facility. The commitment fee ranges from 0.15% to 0.25% depending on our Leverage Ratio. The credit facility is a general unsecured obligation of the Company. We have not borrowed under this credit facility as of December 31, 2005.

On December 31, 2004, we redeemed a portion of the Series A Debentures. We originally issued $206.2 million of Series A and Series B Debentures on December 20, 2001 to our wholly-owned unconsolidated subsidiary Capital Trust in exchange for the proceeds of a $200.0 million private placement of Redeemable Convertible Preferred Securities which the Capital Trust issued to institutional investors. We redeemed the Series A Debentures in their entirety in the aggregate principal amount of $72.2 million, at a price of $52.625 per $50.00 principal amount in accordance with the terms of the indenture. The redemption of the Series A Debentures triggered a simultaneous redemption by the Capital Trust of 1.4 million shares of its Series A Securities, as well as the redemption of 43,299 shares of the Capital Trust’s common stock, which were held by us. The Series A Securities were effectively convertible, at the option of the holder, into shares of our Series A Common Stock at a rate of 2.005133 shares of Series A Common Stock per $50 principal amount of Series A Debentures (an effective conversion price of $24.9360). The redemption of the Series A Debentures will remove the potential dilution of 2.8 million shares and reduce Interest expense, net – Capital Trust by $5.3 million per year starting in 2005. We recognized a pre-tax loss of $3.7 million related to the redemption premium, which is included in Interest expense, net – Capital Trust in the Consolidated Statement of Income for the year ended December 31, 2004. See Note 7 to the consolidated financial statements.

We redeemed 1,600 shares of Series A Preferred Stock on January 1, 2004 and 5,468 shares of Series B Preferred Stock on December 10, 2004 for an aggregate amount of $7.1 million. We redeemed 5,781 shares outstanding of Series A Preferred Stock and 5,470 shares outstanding of Series B Preferred Stock for $11.3 million on January 1, 2005. On February 27, 2003, a holder of our Series A Preferred Stock exercised the right to convert 1,900 shares of Series A Preferred Stock into 89,445 shares of Series A Common Stock.

During 2005, our Board of Directors declared quarterly cash dividends on our Series A and Series B Common Stock for a total amount of $26.0 million. Included in this amount was $18.0 million payable to Hearst. During 2004, our Board of Directors declared quarterly cash dividends on our Series A and Series B Common Stock for a total amount of $23.2 million. Included in this amount was $15.4 million payable to Hearst. See Note 14 to the consolidated financial statements.

Between May 1998 and December 31, 2005, we have spent $108.0 million to repurchase 4.3 million shares of Series A Common Stock at an average price of $24.97. During the year ended December 31, 2005, we spent $16.4 million to repurchase 669,227 shares of Series A Common Stock at an average price of $24.48 per share. In May 1998, our Board of Directors authorized the repurchase of up to $300 million of its outstanding Series A Common Stock. Such repurchases may be effected from time to time in the open market or in private transactions, subject to market conditions and management’s discretion. We cannot assure you that we will make such repurchases in the future or, if we do occur, what the terms of such repurchases will be.

Contractual Obligations

The following table summarizes our future cash obligations as of December 31, 2005 under existing debt repayment schedules, non-cancelable leases, future payments for program rights, employment and talent contracts and Note payable to Capital Trust:

	2006		2007		2008		2009		2010		Thereafter		Total
Long-term debt(1)(2)	$	90,047	$	215,052	$	90,008	$	90,000	$	90,000	$	292,110	$	867,217
Net non-cancelable operating lease obligations	4,911		3,904		3,089		2,538		2,073		14,636		31,151
Program rights	66,641		55,875		55,494		52,555		44,369		17,438		292,372
Employee, talent and other contracts	71,660		40,976		13,022		2,373		1,311		411		129,753
Note payable to Capital Trust(2)	—		—		—		—		—		134,021		134,021
Common Stock Dividend	6,486		—		—		—		—		—		6,486
	$	239,745	$	315,807	$	161,613	$	147,466	$	137,753	$	458,616	$	1,461,000

36

(1)Includes capital lease obligations.

(2)Excludes interest.

The above table does not include cash requirements for the payment of any dividends that our Board of Directors may decide to declare in the future on our Series A and Series B Common Stock. See Note 10 to the consolidated financial statements.

We anticipate that our primary sources of cash, which include current cash balances, net cash provided by operating activities and our unused $250 million revolver, will be sufficient to finance the operating and working capital requirements of our stations, our debt service requirements, sinking fund payment, anticipated capital expenditures, dividend payments, and our other obligations for both the next 12 months and the foreseeable future thereafter.

Impact of Inflation

The impact of inflation on our operations has not been significant to date. There can be no assurance, however, that a high rate of inflation in the future would not have an adverse impact on our operating results.

Forward-Looking Statements

This reportincludesor incorporates forward-looking statements. We base these forward-looking statements on our current expectations and projections about future events. These forward looking statements generally can be identified by the use of statements that include phrases such as “anticipate”, “will”, “may”, “likely”, “plan”, “believe”, “expect”, “intend”, “project”, “forecast” or other such similar words and/or phrases. For these statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The forward-looking statements contained in this report, concerning, among other things, trends and projections involving revenue, income, earnings, cash flow, liquidity, operating expenses, assets, liabilities, capital expenditures, dividends and capital structure, involve risks and uncertainties, and are subject to change based on various important factors. Those factors include the impact on our operations from

•Changes in Federal regulation of broadcasting, including changes in Federal communications laws or regulations;

•Local regulatory actions and conditions in the areas in which our stations operate;

•Competition in the broadcast television markets we serve;

•Our ability to obtain quality programming for our television stations;

•Successful integration of television stations we acquire;

•Pricing fluctuations in local and national advertising;

•Changes in national and regional economies;

•Changes in advertising trends and our advertisers’ financial condition; and

•Volatility in programming costs, industry consolidation, technological developments, and major world events.

For a discussion of additional risk factors that are particular to our business, please refer to Part I, Item 1A. “Risk Factors” beginning on page 14. These and other matters we discuss in this report, or in the documents we incorporate by reference into this report, may cause actual results to differ from those we describe. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

New Accounting Pronouncements

In June 2005, the EITF reached a consensus on EITF No. 05-6, Determining the Amortization Period for Leasehold Improvements Purchased after Lease Inception or Acquired in a Business Combination (“EITF 05-6”), which was modified in September 2005. EITF 05-6 provides guidance on whether a lease term should be reevaluated at the time of a purchase business combination or when leasehold improvements are purchased after lease inception. EITF 05-6 is effective for leasehold improvements that are purchased or acquired in reporting periods beginning after June 29, 2005. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

In June 2005, the Emerging Issues Task Force (“EITF”) reached a consensus on EITF Issue No. 04-10, Determining Whether to Aggregate Operating Segments That Do Not Meet the Quantitative Thresholds,  (“EITF No. 04-10”). EITF 04-10 provides guidance on FAS 131, Disclosures about Segments of an Enterprise and Related Information and how to determine whether operating segments which do not meet certain quantitative thresholds may be aggregated

37

and reported as a single operating segment. The EITF is effective for fiscal years ending after September 15, 2005, and corresponding information for earlier periods, including interim periods, should be restated unless it is impractical to do so. The Company has adopted the guidance as of the year ending December 31, 2005 and the adoption did not have a material impact on our financial position or results of operations.

In May 2005, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 154, Accounting Changes and Error Corrections (“SFAS 154”). SFAS 154 provides guidance on accounting for and reporting of accounting changes and error corrections. It requires changes in accounting principle to be applied retroactively to prior periods as if the principle had always been used. Previously, voluntary changes in accounting principle were required to be recognized cumulatively in net income in the period of change. SFAS 154 is effective for accounting changes and error corrections made in fiscal years beginning after December 15, 2005 with early adoption encouraged. The Company did not make any accounting changes or error corrections during the year ended December 31, 2005 and therefore, the adoption of SFAS 154 did not have any material impact on our financial position or results of operations.

In March 2005, the FASB issued Financial Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations, an interpretation of FASB Statement No. 143, (“FIN 47”). FIN 47 clarifies that an entity must record a liability for a conditional asset retirement obligation if the fair value of the obligation can be reasonably estimated. FIN 47 is effective no later than the end of fiscal years ending after December 15, 2005. Therefore, FIN 47 is effective for the year ending December 31, 2005. The adoption of FIN 47 did not have a material impact on our financial position or results of operations.

In December 2004, the FASB issued Statement No. 123(R), Share-Based Payment (“SFAS 123(R)”), which requires companies to measure and recognize compensation expense for all stock-based payments at fair value. The Company will adopt SFAS 123(R) on January 1, 2006 using the modified prospective approach. The Company expects the impact to the 2006 results to be approximately $8.1 million.

In December 2004, the FASB issued SFAS No. 153, Exchanges of Nonmonetary Assets, an amendment of APB Opinion No. 29 (“SFAS 153”). The amendments made by SFAS 153 are based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged. Further, the amendments broaden the exception for exchanges of nonmonetary assets that do not have commercial substance. SFAS 153 is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. Therefore, SFAS 153 was effective for us on July 1, 2005. The adoption of SFAS 153 did not have a material impact on our financial position or results of operations.

In March 2004, the EITF reached a consensus on EITF Issue No. 03-1, The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments (“EITF No. 03-1”), which provides guidance on the meaning of the phrase other-than-temporary impairment and its applications to several types of investments including debt securities classified as held-to-maturity and available-for-sale as well as cost-method investments. Additional guidance on the evaluation of whether the impairment on investments not accounted for using the equity method is other then temporary and how to measure the investment was provided in FSP FAS 115-1 and FAS 124-1, “The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments.” we adopted EITF 03-1 for the year ended December 31, 2004. HATV has adopted FSP FAS 115-1 and FAS 124-1 as of the year ended December 31, 2005 and evaluated all cost method investments for any impairment loss that is other than temporary in accordance with this guidance.

In December 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the “Act”) was signed into law. The Act provides a federal subsidy to sponsors of retiree healthcare benefit plans that provide a prescription drug benefit that is at least actuarially equivalent to Medicare Part D. In May 2004, the FASB staff issued FASB Staff Position No. 106-2, Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003 which supersedes FASB Staff Position No. 106-1, Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003, and is effective for interim or annual periods beginning after June 15, 2004. The Company determined that the Act is not a “significant event” as defined by SFAS 106, Employers’ Accounting for Postretirement Benefits Other Than Pensions. The effect of this Act did not have a material effect on our consolidated financial statements.

38

ITEM 7A:    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our long-term debt obligations as of December 31, 2005 are at fixed interest rates and therefore are not sensitive to fluctuations in interest rates. See Note 6 to the consolidated financial statements. The following table presents the fair value of long-term debt obligations (excluding capital lease obligations) as of December 31, 2005 and 2004 and the future cash flows by expected maturity dates, based upon outstanding principal balances as of December 31, 2004. See Note 17 to the consolidated financial statements.

	December 31, 2005																December 31, 2004
	Expected Maturity														Fair		Carrying		Fair
	2006		2007		2008		2009		2010		Thereafter		Total		Value		Value		Value
Long-term debt:	(In thousands)
Fixed rate:
Senior Notes	—		$	125,000	—		—		—		$	292,110	$	417,110	$	434,830	$	432,110	$	479,548
Private Placement Debt	$	90,000	$	90,000	$	90,000	$	90,000	$	90,000	—		$	450,000	$	484,676	$	450,000	$	496,937
Note payable to Capital Trust	—		—		—		—		—		$	134,021	$	134,021	$	144,546	$	134,021	$	155,334

The annualized weighted average interest rate for long-term debt outstanding is 7.2% for the years ended December 31, 2005 and 2004. See Note 6 to the consolidated financial statements. The Note payable to Capital Trust carries a fixed interest rate of 7.5%. See Note 7 to the consolidated financial statements.

Our debt obligations contain certain financial and other covenants and restrictions on the Company. Such covenants and restrictions do not include any triggers of default related to our overall credit rating or stock prices. As of December 31, 2005, we were in compliance with all such covenants and restrictions.

Our Credit Facility provides that all outstanding balances will become due and payable at such time as Hearst’s (and certain of its affiliates’) equity ownership in us becomes less than 35% of the total equity, and Hearst and such affiliates no longer have the right to elect a majority of the members of our Board of Directors.

As of December 31, 2005, we are not involved in any derivative financial instruments. However, we may consider certain interest rate risk strategies in the future.

39

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO FINANCIAL STATEMENTS

	Page
Hearst-Argyle Television, Inc.
Report of Independent Registered Public Accounting Firm	41
Consolidated Balance Sheets as of December 31, 2005 and 2004	42
Consolidated Statements of Income for the Years Ended December 31, 2005, 2004 and 2003	43
Consolidated Statements of Stockholders’ Equity and Comprehensive Income for the Years Ended December 31, 2005, 2004 and 2003	44
Consolidated Statements of Cash Flows for the Years Ended December 31, 2005, 2004 and 2003	45
Notes to Consolidated Financial Statements	46

40

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Hearst-Argyle Television, Inc.

We have audited the accompanying consolidated balance sheets of Hearst-Argyle Television, Inc. and its subsidiaries (the “Company”) as of December 31, 2005 and 2004, and the related consolidated statements of income, stockholders’ equity and comprehensive income, and cash flows for each of the three years in the period ended December 31, 2005. Our audits also included the consolidated financial statement schedule listed in the Index at Item 15. These consolidated financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on the consolidated financial statements and financial statement schedule based on our 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 audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes 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, such consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2005 and 2004, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2005, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of the Company’s internal control over financial reporting as of December 31, 2005, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 23, 2006 expressed an unqualified opinion on management’s assessment of the effectiveness of the Company’s internal control over financial reporting and an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

/s/ Deloitte & Touche LLP

New York, New York

February 23, 2006

41

HEARST-ARGYLE TELEVISION, INC.

Consolidated Balance Sheets

	December 31, 2005			December 31, 2004
	(In thousands, except share data)
Assets
Current assets:
Cash and cash equivalents	$	120,065		$	92,208
Accounts receivable, net of allowance for doubtful accounts of $2,943 and $3,284 in 2005 and 2004, respectively	157,672			147,536
Program and barter rights	46,807			55,242
Deferred income tax asset	4,029			4,979
Other	9,153			6,541
Total current assets	337,726			306,506
Property, plant and equipment:
Land, building and improvements	152,480			149,720
Broadcasting equipment	373,571			355,075
Office furniture, equipment and other	42,024			36,880
Construction in progress	5,580			9,646
	573,655			551,321
Less accumulated depreciation	(294,416		)	(259,481		)
Property, plant and equipment, net	279,239			291,840
Intangible assets, net	2,396,086			2,428,265
Goodwill	731,687			734,746
Total intangible assets and goodwill, net	3,127,773			3,163,011
Other assets:
Deferred financing costs, net of accumulated amortization of $16,568 and $14,144 in 2005 and 2004, respectively	11,276			12,452
Investments	31,321			26,362
Program and barter rights, noncurrent	1,312			1,884
Pension and other assets	43,712			40,085
Total other assets	87,621			80,783
Total assets	$	3,832,359		$	3,842,140
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion of long-term debt	$	90,047		$	180
Accounts payable	15,256			8,901
Accrued liabilities	51,133			63,640
Program and barter rights payable	47,285			57,056
Payable to The Hearst Corporation	6,981			4,846
Other liabilities	6,868			3,285
Total current liabilities	217,570			137,908
Program and barter rights payable, noncurrent	1,818			3,107
Long-term debt	777,170			882,221
Note payable to Capital Trust	134,021			134,021
Deferred income tax liability	845,272			839,746
Pension and other liabilities	35,049			80,049
Total noncurrent liabilities	1,793,330			1,939,144
Series A and B preferred stock to be redeemed	—			11,251
Commitments and contingencies
Stockholders’ equity:
Preferred stock, par value $0.01 per share, 1,000,000 shares authorized	—			—
Series A common stock, par value $0.01 per share, 200,000,000 shares authorized at December 31, 2005 and 2004, and 55,677,979 and 55,212,326 shares issued and outstanding at December 31, 2005 and 2004, respectively	557			552
Series B common stock, par value $0.01 per share, 100,000,000 shares authorized at December 31, 2005 and 2004, and 41,298,648 shares issued and outstanding at December 31, 2005 and 2004	413			413
Additional paid-in capital	1,291,388			1,281,474
Retained earnings	643,414			569,178
Accumulated other comprehensive loss, net of tax benefit of $4,171 and $4,073 in 2005 and 2004, respectively	(6,309		)	(6,161		)
Treasury stock, at cost, 4,324,879 and 3,655,652 shares of Series A common stock at December 31, 2005 and 2004, respectively	(108,004		)	(91,619		)
Total stockholders’ equity	1,821,459			1,753,837
Total liabilities and stockholders’ equity	$	3,832,359		$	3,842,140

See notes to consolidated financial statements.

42

HEARST-ARGYLE TELEVISION, INC.

Consolidated Statements of Income

	Years Ended December 31,
	2005			2004			2003
	(In thousands, except per share data)
Total revenue	$	706,883		$	779,879		$	686,775
Station operating expenses:
Salaries, benefits and other operating costs	364,421			355,641			330,519
Amortization of program rights	60,912			63,843			62,845
Depreciation and amortization	51,728			50,376			55,467
Impairment loss	29,235			—			—
Corporate, general and administrative expenses	23,149			25,268			19,122
Operating income	177,438			284,751			218,822
Interest expense, net	63,375			63,730			68,215
Interest expense, net – Capital Trust	9,750			18,675			15,000
Other expense	2,500			3,700			—
Equity in (income) of affiliates, net	(2,321		)	(1,648		)	(923		)
Income before income taxes	104,134			200,294			136,530
Income taxes	3,917			76,352			42,309
Net income	100,217			123,942			94,221
Less preferred stock dividends	(2		)	(1,067		)	(1,211		)
Income applicable to common stockholders	$	100,215		$	122,875		$	93,010
Income per common share—basic:	$	1.08		$	1.32		$	1.00
Number of common shares used in the calculation	92,826			92,928			92,575
Income per common share—diluted:	$	1.08		$	1.30		$	1.00
Number of common shares used in the calculation	93,214			101,406			92,990
Dividends per common share—declared	$	0.28		$	0.25		$	0.06

See notes to consolidated financial statements.

43

HEARST-ARGYLE TELEVISION, INC.

Consolidated Statements of Stockholders’ Equity and Comprehensive Income

(In thousands, except per share data)	Series A		Series B		Preferred Stock			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive (Loss)			Treasury Stock			Total			Total Comprehensive Income
Balances—January 1, 2003	$	543	$	413	$	2		$	1,281,288		$	382,093		$	(4,378	)	$	(80,699	)	$	1,579,262
Net income	—		—		—			—			94,221			—			—			94,221			$	94,221
Additional minimum pension liability, net of tax benefit of $552	—		—		—			—			—			(871		)	—			(871		)	(871		)
Dividends on preferred stock ($65.00 per share)	—		—		—			—			(1,211		)	—			—			(1,211		)	$	93,350
Dividends on common stock ($0.06 per share)	—		—		—			—			(5,566		)	—			—			(5,566		)
Redemption of Series A Preferred Stock	1		—		—			(1		)	—			—			—			—
Employee stock purchase plan proceeds	1		—		—			1,876			—			—			—			1,877
Stock options exercised	2		—		—			4,148			—			—			—			4,150
Tax benefit from stock plans	—		—		—			520			—			—			—			520
Exercise of option to redeem Series A and Series B Preferred Stock	—		—		(2		)	(18,317		)	—			—			—			(18,319		)
Balances—December 31, 2003	547		413		—			1,269,514			469,537			(5,249		)	(80,699		)	1,654,063
Net income	—		—		—			—			123,942			—			—			123,942			$	123,942
Additional minimum pension liability, net of tax benefit of $602	—		—		—			—			—			(912		)	—			(912		)	(912		)
Dividends on preferred stock ($65.00 per share)	—		—		—			—			(1,067		)	—			—			(1,067		)	$	123,030
Dividends on common stock ($0.25 per share)	—		—		—			—			(23,234		)	—			—			(23,234		)
Employee stock purchase plan proceeds	1		—		—			2,027			—			—			—			2,028
Stock options exercised	4		—		—			8,629			—			—			—			8,633
Tax benefit from stock plans	—		—		—			1,304			—			—			—			1,304
Treasury stock purchased – Series A Common Stock (458,500 shares)	—		—		—			—			—			—			(10,920		)	(10,920		)
Balances—December 31, 2004	552		413		—			1,281,474			569,178			(6,161		)	$	(91,619	)	$	1,753,837
Net income	—		—		—			—			100,217			—			—			100,217			$	100,217
Additional minimum pension liability, net of tax benefit of $98	—		—		—			—			—			(148		)	—			(148		)	(148		)
Dividends on preferred stock ($65.00 per share)	—		—		—			—			(2		)	—			—			(2		)	$	100,069
Dividends on common stock ($0.28 per share)	—		—		—			—			(25,979		)	—			—			(25,979		)
Employee stock purchase plan proceeds	1		—		—			2,192			—			—			—			2,193
Stock options exercised	4		—		—			6,757			—			—			—			6,761
Tax benefit from stock plans	—		—		—			965			—			—			—			965
Treasury stock purchased – Series A Common Stock (669,227 shares)	—		—		—			—			—			—			(16,385		)	(16,385		)
Balances—December 31, 2005	$	557	$	413	—			$	1,291,388		$	643,414		$	(6,309	)	$	(108,004	)	$	1,821,459

See notes to consolidated financial statements.

44

HEARST-ARGYLE TELEVISION, INC.

Consolidated Statements of Cash Flows

	Years Ended December 31,
	2005			2004			2003
	(In thousands)
Operating Activities
Net income	$	100,217		$	123,942		$	94,221
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	45,724			44,376			45,937
Amortization of intangible assets	6,003			6,000			9,530
Amortization of deferred financing costs	2,424			1,943			2,910
Amortization of program rights	60,912			63,843			62,845
Impairment loss	29,235			—			—
Program payments	(64,104		)	(62,247		)	(62,039		)
Deferred income taxes	6,574			20,116			43,172
Equity in (income) of affiliates, net	(2,321		)	(1,648		)	(923		)
Provision for doubtful accounts	888			125			298
(Gain)/loss on disposal of fixed assets	(1,210		)	977			86
Distributions from affiliates	2,030			3,376			—
Other expense, net	—			3,700			—
Changes in operating assets and liabilities:
Decrease (increase) in Accounts receivable	(7,392		)	(146		)	(2,074		)
Decrease (increase) in Other assets	(4,130		)	(9,179		)	3,044
(Decrease) increase in Accounts payable and accrued liabilities	(5,054		)	13,853			(7,873		)
(Decrease) increase in Other liabilities	(38,503		)	(13,364		)	(10,059		)
Net cash provided by operating activities	131,293			195,667			179,075
Investing Activities
Purchases of property, plant and equipment:
Digital	(6,534		)	(1,860		)	(3,776		)
Maintenance	(16,969		)	(20,777		)	(14,490		)
Special projects/towers	(12,336		)	(13,743		)	(7,126		)
Acquisitions and investments	(8,052		)	(37,967		)	(25		)
Other	320			243			(124		)
Net cash used in investing activities	(43,571		)	(74,104		)	(25,541		)
Financing Activities
Credit Facility:
Proceeds from issuance of long-term debt		—			—			224,150
Repayment of long-term debt	—			—			(315,150		)
Dividends paid on preferred stock	(2		)	(1,067		)	(1,211		)
Dividends paid on common stock	(25,997		)	(22,301		)	—
Redemption of Series A Note from Capital Trust, net	—			(70,000		)	—
Series A Common Stock repurchases	(16,385		)	(10,920		)	—
Redemption of preferred stock	(11,251		)	(7,068		)	—
Repurchase of senior notes due 2027	(15,000		)	—			—
Principal payments on capital lease obligations	(184		)	(188		)	(154		)
Proceeds from employee stock purchase plan and stock option exercises	8,954			10,661			5,917
Net cash used in financing activities	(59,865		)	(100,883		)	(86,448		)
Increase in cash and cash equivalents	27,857			20,680			67,086
Cash and cash equivalents at beginning of period	92,208			71,528			4,442
Cash and cash equivalents at end of period	$	120,065		$	92,208		$	71,528
Supplemental Cash Flow Information:
Business acquired in purchase transaction:
WMTW-TV:
Fair market value of assets acquired, net	$	—		$	38,716		$	—
Fair market value of liabilities assumed, net	—			(642		)	—
Net cash paid, including acquisition costs	$	—		$	38,074		$	—
Cash paid during the year for:
Interest	$	64,320		$	63,502		$	65,829
Interest on Note payable to Capital Trust	$	9,750		$	18,675		$	15,000
Taxes, net of refunds	$	39,892		$	59,318		$	5,082
Non-cash investing and financing activities:
Capital lease obligations entered into during the period	$	—		$	—		$	229

See notes to consolidated financial statements.

45

HEARST-ARGYLE TELEVISION, INC.

Notes to Consolidated Financial Statements

1.   Nature of Operations

Hearst-Argyle Television, Inc. and its subsidiaries (“we” or the “Company”) own and operate 25 network-affiliated television stations in geographically diverse markets in the United States. Ten of the stations are affiliates of the National Broadcasting Company, Inc. (“NBC”), 12 of the stations are affiliates of the American Broadcasting Companies (“ABC”), two of the stations are affiliates of Columbia Broadcasting Systems (“CBS”) and one station is affiliated with Warner Brothers Television Network (“WB”). Additionally, the Company provides management services to two network-affiliated and one independent television stations and two radio stations (the “Managed Stations”). The Company has determined that its single reportable segment is commercial television broadcasting. The economic characteristics, services, production process, customer type and distribution methods for the Company’s operations are substantially similar and have therefore been aggregated as one reportable segment.

2.   Summary of Accounting Policies and Use of Estimates

General

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, except for the Company’s wholly-owned subsidiary trust which was required to be de-consolidated upon adoption of the Financial Accounting Standards Board (“FASB”) Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities (“FIN 46(R)”). The net effect of such deconsolidation was to eliminate the Convertible Preferred Securities and show the Note payable to the Capital Trust in noncurrent liabilities. With the exception of the unconsolidated subsidiary trust, all significant intercompany accounts have been eliminated in consolidation.

Use of Estimates

The preparation of the consolidated financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect amounts reported in the consolidated financial statements and accompanying notes. On an ongoing basis, the Company evaluates its estimates, including those related to allowances for doubtful accounts; program rights, barter and trade transactions; useful lives of property, plant and equipment; intangible assets; carrying value of investments; accrued liabilities; contingent liabilities; income taxes; pension benefits; and fair value of financial instruments and stock options. Actual results could differ from those estimates.

Comprehensive Income

In accordance with SFAS No. 130, Reporting Comprehensive Income, the Company is required to display comprehensive income and its components as part of its complete set of financial statements. Comprehensive income represents the change in stockholders’ equity resulting from transactions other then stockholder investments and distributions. Included in accumulated other comprehensive income are changes in equity that are excluded from the Company’s net income, specifically, additional minimum pension liabilities, net of tax.

Cash and Cash Equivalents

All highly liquid investments with original maturities of three months or less are considered to be cash equivalents.

Accounts Receivable

The Company extends credit based upon its evaluation of a customer’s credit worthiness and financial condition. For certain advertisers, the Company does not extend credit and requires cash payment in advance. The Company monitors the collection of receivables and maintains an allowance for estimated losses based upon the aging of such receivables and specific collection issues that may be identified. Concentration of credit risk with respect to accounts receivable is generally limited due to the large number of geographically diverse customers, individually small balances, and short payment terms.

Program Rights

Program rights and the corresponding contractual obligations are recorded when the license period begins and the programs are available for use. Program rights are carried at the lower of unamortized cost or estimated net realizable value on a program by program basis. Any reduction in unamortized costs to net realizable value is included in amortization of program rights in the accompanying Consolidated Statements of Income. Such reductions in unamortized costs were $2.2 million in the year ended December 31, 2004, and were negligible in the years ended December 31, 2005 and 2003. Programming rights are amortized over the license period. The majority of the Company’s programming rights are for first-run programming which is

46

generally amortized over one year. Rights for off-network syndicated products, feature films and cartoons are amortized based on the projected number of airings on an accelerated basis contemplating the estimated revenue to be earned per showing, but generally not exceeding five years. Program rights and the corresponding contractual obligations are classified as current or long-term based on estimated usage and payment terms.

Barter and Trade Transactions

Barter transactions represent the exchange of commercial air time for programming. Trade transactions represent the exchange of commercial air time for merchandise or services. Barter transactions are recorded at the fair market value of the commercial air time relinquished. Trade transactions are generally recorded at the fair market value of the merchandise or services received. Barter program rights and payables are recorded for barter transactions based upon the availability of the broadcast property. Revenue is recognized on barter and trade transactions when the commercials are broadcast; expenses are recorded when the programming airs or when the merchandise or service is utilized. Barter and trade revenue are included in total revenue on the Consolidated Statements of Income and were approximately $25.0 million, $27.0 million and $27.8 million for the years ended December 31, 2005, 2004 and 2003, respectively. Of these amounts, trade revenue represented less than 20% in each of the years. Barter and trade expenses are included in Salaries, benefits and other operating costs under Station operating expenses on the Consolidated Statements of Income and were approximately $25.1 million, $27.2 million and $27.7 million for the years ended December 31, 2005, 2004 and 2003, respectively. Of these amounts, trade expense represented less than 15% in each of the years.

Property, Plant and Equipment

Property, plant and equipment are recorded at cost. Depreciation is calculated on the straight-line method over the estimated useful lives as follows: buildings—40 years; towers and transmitters—15 to 20 years; other broadcasting equipment—five to eight years; office furniture, computers, equipment and other—three to eight years. Leasehold improvements are amortized on the straight-line method over the shorter of the lease term or the estimated useful life of the asset. Management reviews, on a continuing basis, the financial statement carrying value of property, plant and equipment for impairment. If events or changes in circumstances were to indicate that an asset carrying value may not be recoverable utilizing related undiscounted cash flows, a write-down of the asset would be recorded through a charge to operations. Management also reviews the continuing appropriateness of the useful lives assigned to property, plant and equipment. Prospective adjustments to such lives are made when warranted.

Intangible Assets

Intangible assets are recorded at cost and include Federal Communications Commission (“FCC”) licenses, network affiliations, goodwill, and other intangible assets such as advertiser client base and favorable leases. The Company performs a review for impairment of its recorded goodwill and FCC license, which are its only intangible assets with indefinite useful lives, annually in the fourth quarter or earlier if indicators of potential impairment exist.  The impairment test for FCC license consists of a comparison of its carrying value with its fair value, determined using a discounted cash flow analysis. If the carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess.

Goodwill impairment is determined using a two-step process. The first step of the goodwill impairment test is used to identify potential impairment by comparing carrying value of  the reporting unit to its fair value, estimated using a discounted cash flow analysis. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired and the second step of the impairment test is unnecessary. If the carrying amount of a reporting unit 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 the reporting unit’s goodwill with the carrying amount of that goodwill. If the carrying amount exceeds the implied fair value, an impairment loss is recognized in an amount equal to that excess.

Various judgmental assumptions about cash flows, growth rates and discount rates are used in developing a discounted cash flow analysis. Discount rate assumptions are based on the weighted average cost of capital of industry participants. The Company considers the assumptions used in its estimates to be reasonable, however, had the Company used different assumptions, the Company’s reported results may have varied.

47

The Company amortizes intangible assets with determinable useful lives over their respective estimated useful lives as follows: network affiliation intangible assets - 28.5 years, advertiser client base -19 years, other intangible assets - 5-10 years. In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, the Company evaluates the remaining useful life of its intangible assets with determinable lives each reporting period to determine whether events or circumstances warrant a revision to the remaining period of amortization.

Investments

The Company has investments in non-consolidated affiliates, which are accounted for under the equity method if the Company’s equity interest is from 20% to 50%, and under the cost method if the Company’s equity interest is less than 20% and the Company does not exercise significant influence over operating and financial policies. In addition, the Company has a wholly-owned unconsolidated subsidiary trust which is accounted for under the equity method. See Note 7. The Company evaluates its investments to determine if an impairment has occurred. Carrying values are adjusted to reflect realizable value, where necessary. See Note 3.

Revenue Recognition

The Company’s primary source of revenue is television advertising. Other sources include network compensation and other revenue. Advertising revenue and network compensation together represented approximately 98% of the Company’s total revenue in each of the years ended December 31, 2005, 2004 and 2003.

•Advertising Revenue.   Advertising revenue is recognized net of agency and national representatives’ commissions and in the period when the commercials are broadcast. Barter and trade revenue are included in advertising revenue and are also recognized when the commercials are broadcast. See “Barter and Trade Transactions” above.

•Network Compensation.   Twelve of the Company’s stations have network compensation agreements with ABC, ten have agreements with NBC, and two have agreements with CBS. In connection with the ABC and CBS agreements, revenue is recognized when the Company’s station broadcasts specific network television programs based upon a negotiated value for each program. In connection with the NBC agreements, revenue is recognized on a straight-line basis, based upon the cash compensation to be paid to the Company’s stations by NBC each year. Unlike the ABC and CBS agreements, the NBC network compensation is an annual amount and is not specifically assigned to individual network television programs.

•Other Revenue.   The Company generates revenue from other sources, which include the following types of transactions and activities: (i) management fees earned from The Hearst Corporation (“Hearst”) (see Note 14); (ii) services revenue from Lifetime Entertainment Services (see Note 14); (iii) services revenue from the production of commercials for advertising customers or from the production of programs to be sold in syndication; (iv) rental income pursuant to tower lease agreements with third parties providing for attachment of antennas to the Company’s towers; and (v) other miscellaneous revenue, such as licenses and royalties.

Income Taxes

The provision for income taxes is computed based on the pretax income included in the Consolidated Statements of Income. The Company provides for federal and state income taxes currently payable, as well as for those deferred because of timing differences between reporting income and expenses for financial statement purposes versus tax purposes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

The Company records reserves for estimates of probable settlements of federal and state audits. The results of these audits and negotiations with taxing authorities may affect the ultimate settlement of these issues. The timing of any payments related to such settlements cannot be determined but the Company expects that these payments will not be made within one year and, as such, these tax reserves are included in Other Liabilities (noncurrent). The Company also records a valuation allowance against its deferred tax assets arising from certain net operating and capital losses when it is more likely than not that some portion or all of such losses will not be realized. The Company’s effective tax rate in a given financial statement period may be materially impacted by changes in the level of earnings by taxing jurisdiction, changes in the expected outcome of tax audits, or changes in the deferred tax valuation allowance.

48

Earnings Per Share (“EPS”)

Basic EPS is calculated by dividing net income less preferred stock dividends by the weighted average common shares outstanding (see Note 8). Diluted EPS is calculated similarly, except that it includes the dilutive effect, if any, of shares issuable under the Company’s stock option plan (see Note 12), the conversion of the Company’s Preferred Stock (see Note 11), or the conversion of the Redeemable Convertible Preferred Securities held by the Company’s wholly-owned unconsolidated subsidiary trust (see Note 7).

Off-Balance Sheet Financings and Liabilities

Other than contractual commitments and other legal contingencies incurred in the normal course of business, agreements for future barter and program rights not yet available for broadcast as of December 31, 2005, and employment contracts for key employees, which are disclosed in Note 15, the Company does not have any off-balance sheet financings or liabilities. Other than its wholly-owned unconsolidated subsidiary trust, which is reflected in the Consolidated Balance Sheet as Note payable to Capital Trust, the Company does not have any majority-owned subsidiaries that are not included in the consolidated financial statements, nor does the Company have any interests in, or relationships with, any special-purpose entities that are not reflected in the consolidated financial statements.

Purchase Accounting

When allocating the purchase price to the acquired assets (tangible and intangible) and assumed liabilities, it is necessary to develop estimates of fair value. The Company utilizes the services of an independent valuation consulting firm for the purpose of estimating fair values. The specialized tangible assets in use at a broadcasting business are typically valued on the basis of the replacement cost of a new asset less observed depreciation. The appraisal of other fixed assets, such as furnishings, vehicles, and office machines, is based upon a comparable market approach. Identified intangible assets, including FCC licenses, are valued at estimated fair value. FCC licenses are valued using a direct approach. The direct approach measures the future economic benefits that the FCC license brings to its holder and discounts them to the present. The fair market value of the FCC license is determined by discounting these future benefits utilizing discounted cash flows. The key assumptions used in the discounted cash flow analysis include initial and subsequent capital costs, network affiliation, VHF or UHF status, market revenue growth and station market share projections, operating profit margins, discount rates and terminal value estimates.

Stock-Based Compensation

The Company accounts for employee stock-based compensation under Accounting Principles Board Opinion No. 25, Stock Issued to Employees (“APB 25”) and related interpretations. Under APB 25, because the exercise price of the Company’s employee stock options equals the market price of the underlying stock on the date of grant, the stock options have no intrinsic value and therefore no compensation expense is recognized. The Company has adopted the disclosure-only provisions of SFAS No. 123, Accounting For Stock-Based Compensation (“SFAS 123”). Under SFAS 123, options are valued at their date of grant and then expensed over their vesting period. See Note 12 and the “New Accounting Pronouncements” disclosure regarding SFAS 123(R).

The following table details the effect on net income and earnings per share had compensation expense been recorded based on the fair value method under SFAS 123, as amended, utilizing the Black-Scholes option valuation model:

	Years Ended December 31,
	2005			2004			2003
	(In thousands, except per share data)
Reported net income	$	100,217		$	123,942		$	94,221
Less:
Total stock-based employee compensation expense determined under the fair value method for all awards, net of related tax	(4,823		)	(4,875		)	(6,706		)
Pro forma net income	95,394			199,067			87,515
Less: Preferred stock dividends	(2		)	(1,067		)	(1,211		)
Pro forma net income applicable to common stockholders (Basic)	$	95,392		$	118,000		$	86,304
Add: Interest Expense, Net – Capital Trust, net of tax	—			9,285			—
Pro forma net income applicable to common stockholders (Diluted)	$	95,392		$	127,285		$	86,304
Earnings per share:
Basic – as reported	$	1.08		$	1.32		$	1.00
Basic – pro forma	$	1.03		$	1.27		$	0.93
Diluted – as reported	$	1.08		$	1.30		$	1.00
Diluted – pro forma	$	1.02		$	1.26		$	0.93

49

The Company accounts for the income tax benefit resulting from the deduction triggered by the exercise of employee stock options as a credit to stockholders’ equity (additional paid-in capital) on the Consolidated Balance Sheets and Consolidated Statements of Stockholders’ Equity. In accordance with Emerging Issues Task Force (“EITF”) Issue No. 00-15, Classification in the Statement of Cash Flows of the Income Tax Benefit Received by a Company upon Exercise of a Non-Qualified Employee Stock Option, the Company classifies the reduction of income taxes payable, as a result of the deduction triggered by the exercise of employee stock options, as an increase in operating cash flow on the Consolidated Statements of Cash Flows.

Reclassifications

For comparability, certain immaterial prior year amounts have been reclassified in the consolidated statements of cash flows to conform to the 2005 presentation. Such amounts were within the investing section and are immaterial.

New Accounting Pronouncements

In June 2005, the EITF reached a consensus on EITF No. 05-6, Determining the Amortization Period for Leasehold Improvements Purchased after Lease Inception or Acquired in a Business Combination (“EITF 05-6”), which was modified in September 2005. EITF 05-6 provides guidance on whether a lease term should be reevaluated at the time of a purchase business combination or when leasehold improvements are purchased after lease inception. EITF 05-6 is effective for leasehold improvements that are purchased or acquired in reporting periods beginning after June 29, 2005. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

In June 2005, the Emerging Issues Task Force (“EITF”) reached a consensus on EITF Issue No. 04-10, Determining Whether to Aggregate Operating Segments That Do Not Meet the Quantitative Thresholds,(“EITF No. 04-10”). EITF 04-10 provides guidance on FAS 131, Disclosures about Segments of an Enterprise and Related Information and how to determine whether operating segments which do not meet certain quantitative thresholds may be aggregated and reported as a single operating segment. The EITF is effective for fiscal years ending after September 15, 2005, and corresponding information for earlier periods, including interim periods, should be restated unless it is impractical to do so. The Company has adopted the guidance as of the year ending December 31, 2005 and the adoption did not have a material impact on our financial position or results of operations.

In May 2005, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 154, Accounting Changes and Error Corrections (“SFAS 154”). SFAS 154 provides guidance on accounting for and reporting of accounting changes and error corrections. It requires changes in accounting principle to be applied retroactively to prior periods as if the principle had always been used. Previously, voluntary changes in accounting principle were required to be recognized cumulatively in net income in the period of change. SFAS 154 is effective for accounting changes and error corrections made in fiscal years beginning after December 15, 2005 with early adoption encouraged. The Company did not make any accounting changes or error corrections during the year ended December 31, 2005 and therefore, the adoption of SFAS 154 did not have any material impact on our financial position or results of operations.

In March 2005, the FASB issued Financial Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations, an interpretation of FASB Statement No. 143, (“FIN 47”). FIN 47 clarifies that an entity must record a liability for a conditional asset retirement obligation if the fair value of the obligation can be reasonably estimated. FIN 47 is effective no later than the end of fiscal years ending after December 15, 2005. Therefore, FIN 47 is effective for the year ending December 31, 2005. The adoption of FIN 47 did not have a material impact on our financial position or results of operations.

In December 2004, the FASB issued Statement No. 123(R), Share-Based Payment (“SFAS 123(R)”), which requires companies to measure and recognize compensation expense for all stock-based payments at fair value. The Company will adopt SFAS 123(R) on January 1, 2006 using the modified prospective approach. The Company expects to record approximately $8.1 million of stock-based compensation during the year ending December 31, 2006 as a result of this adoption.

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In December 2004, the FASB issued SFAS No. 153, Exchanges of Nonmonetary Assets, an amendment of APB Opinion No. 29 (“SFAS 153”). The amendments made by SFAS 153 are based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged. Further, the amendments broaden the exception for exchanges of nonmonetary assets that do not have commercial substance. SFAS 153 is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. Therefore, SFAS 153 was effective for us on July 1, 2005. The adoption of SFAS 153 did not have a material impact on our financial position or results of operations.

In March 2004, the EITF reached a consensus on EITF Issue No. 03-1, The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments (“EITF No. 03-1”), which provides guidance on the meaning of the phrase other-than-temporary impairment and its applications to several types of investments including debt securities classified as held-to-maturity and available-for-sale as well as cost-method investments. Additional guidance on the evaluation of whether the impairment on investments not accounted for using the equity method is other then temporary and how to measure the investment was provided in FSP FAS 115-1 / FAS 124-1, “The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments.” The Company adopted EITF 03-1 for the year ended December 31, 2004. The Company has adopted FSP FAS 115-1 / FAS 124-1 for the year ended December 31, 2005 and evaluated all cost method investments for any impairment loss that is other than temporary in accordance with this guidance. The adoption of FSP FAS 115-1 / FAS 124-1 did not have any impact on our financial position or results of operations.

In December 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the “Act”) was signed into law. The Act provides a federal subsidy to sponsors of retiree healthcare benefit plans that provide a prescription drug benefit that is at least actuarially equivalent to Medicare Part D. In May 2004, the FASB staff issued FASB Staff Position No. 106-2, Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003 which supersedes FASB Staff Position No. 106-1, Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003, and is effective for interim or annual periods beginning after June 15, 2004. The Company determined that the Act is not a “significant event” as defined by SFAS 106, Employers’ Accounting for Postretirement Benefits Other Than Pensions. The Act did not have a material effect on our consolidated financial statements.

3.    Acquisitions, Dispositions and Investments

Investments as of December 31, 2005 and 2004 consisted of the following:

	2005		2004
	(In thousands)
Internet Broadcasting Companies	$	11,308	$	13,856
Ripe TV	4,479		—
USDTV	1,529		—
Arizona Diamondbacks	5,982		5,982
Capital Trust	4,021		4,021
ProAct	60		534
Other	3,942		1,969
Total investments	$	31,321	$	26,362

Investment in Internet Broadcasting Systems, Inc.   During the periods presented the Company had investment in Internet Broadcasting Systems, Inc. (“Internet Broadcasting”) and, during the periods presented through December 22, 2005, the Company had an investment in IBS/HATV LLC, the parent company of 26 wholly-owned subsidiary limited liability companies. Internet Broadcasting operates a national network of station Internet sites and designs, develops and operates station Internet sites under operating agreements. IBS/HATV LLC owned the Internet sites for each of the Company’s television stations. The initial $20 million investment in exchange for shares of preferred stock representing an approximately 24% equity interest in Internet Broadcasting was made in December 1999, followed by an additional $6 million investment in bridge loans issued by Internet Broadcasting in May 2001.

On December 22, 2005, the investment in Internet Broadcasting and the IBS/HATV LLC relationship were strategically restructured to provide for new content initiatives, new sales opportunities and enhanced capital resources for Internet Broadcasting. Under the new arrangement, Internet Broadcasting will continue to manage a national network of station Internet sites and design, develop and operate the Internet sites under an operating agreement. However, IBS/HATV LLC and its

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subsidiaries will be dissolved resulting in the recognition of local website operating results directly on the books of the Company’s television stations commencing in January 2006.

•Investment in Internet Broadcasting.    As a result of the restructuring on December 22, 2005, the Company’s investment in preferred stock and bridge loans was converted into shares of Internet Broadcasting common stock, increasing the Company’s ownership percentage from 24% to 31.1%. Subsequently, in January 2006, the Company purchased Internet Broadcasting common stock from an existing Internet Broadcasting investor for $5.5 million, increasing its ownership percentage to 38%. We will continue to account for our investment in Internet Broadcasting using the equity method.

•IBS/HATV LLC (Limited Liability Company). As described above, a component of the restructuring was the dissolution of IBS/HATV LLC, effective December 31, 2005. The Company expects to receive its share of the LLC’s assets within the next several months and as such, the investment balance of $3.4 million has been reclassified to Other Current Assets as of December 31, 2005. IBS/HATV LLC was owned 49.9% by HTV and 50.1% by Internet Broadcasting. Controlled and managed by Internet Broadcasting, IBS/HATV LLC was the parent company of 26 wholly-owned subsidiary limited liability companies established to own and operate the Internet sites for each of the Company’s television stations.  As a result of the restructuring, those 26 subsidiaries were also dissolved and their assets are being transferred to the Company. Prior to the restructuring, we accounted for our investment in IBS/HATV LLC using the equity method.

Investment in Ripe Digital Entertainment, Inc. On July 27, 2005, the Company invested approximately $5 million in Ripe Digital Entertainment, Inc. (“Ripe TV”) representing a 31.25% interest. Ripe TV was formed in 2003 to start an advertising-supported free digital video-on-demand program service. Launched in October 2005, the program service targets men aged 18-34 and is available for distribution via multiple platforms, including digital cable, broadband and cell phones. We account for this investment using the equity method.

Investment in USDTV. On September 23, 2005, the Company and Hearst each invested approximately $1.5 million in USDTV, representing a combined 10% interest. In addition, on January 27, 2006, the Company and Hearst each invested approximately $1 million in USDTV representing a total combined 12.35% interest. USDTV was formed to provide a national digital subscription-based television programming distribution service using portions of the digital television spectrum. Currently, the program service which consists of local television signals combined with the most popular cable networks, is available in Albuquerque, New Mexico, Las Vegas, Nevada, Salt Lake City, Utah and Dallas, Texas. We account for this investment using the cost method.

Investment in NBC/Hearst-Argyle Syndication, LLC.    Effective December 31, 2005, NBC and the Company concluded the NBC/Hearst-Argyle syndication venture and the Company recorded a loss of $2.5 million within Other expense. The Company’s 20% share in the results of NBC/Hearst-Argyle Syndication, LLC is included in Equity in (income) loss of affiliates, net in the accompanying Consolidated Statements of Income for the years ended December 31, 2004 and 2003. We accounted for this investment using the equity method.

Investment in ProAct Technologies Corporation.    During the year ended December 31, 2004, the Company recorded a $3.7 million write-down to net realizable value of the Company’s investment in ProAct Technologies Corporation (“ProAct”). In December 2004, ProAct sold its assets to a third party as part of an overall plan of liquidation. The Company received $0.5 million in distributions from ProAct during the year ended December 31, 2005.

Investment in Capital Trust.  On December 20, 2001, the Company purchased all of the Capital Trust’s common stock (valued at $6.2 million) as part of the initial capitalization of the Capital Trust, and the Company received $200.0 million in connection with the issuance of the Subordinated Debentures (valued at $206.2 million) to the Capital Trust. The Subordinated Debentures are presented as Note payable to Capital Trust in the Company’s Consolidated Balance Sheets. The Capital Trust does not hold any other significant assets other than note receivable from the Company for the Subordinated Debentures. In accordance with the provisions of FIN 46(R), the Company does not consolidate the accounts of its wholly-owned subsidiary, the Capital Trust, in its consolidated financial statements. Therefore, we account for this investment using the equity method. The only earnings attributable to this investment are the Company’s interest payments made on $6.2 million portion of the Subordinated Debentures. The Company has recorded its share in the earnings of the Capital Trust as an offset to the interest expense that the Company pays on the Subordinated Debentures (see Note 7). On December 31, 2004, the Company redeemed a portion of the subordinated debentures (valued at $72.2 million) and the Capital Trust concurrently redeemed $2.2 million of its common stock and $70.0 million of preferred securities.

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Acquisition of WMTW.    On July 1, 2004, the Company acquired the television broadcast assets of WMTW-TV, Channel 8, the ABC affiliate serving the Portland-Auburn, Maine television market, for approximately $38.1 million in cash, inclusive of acquisition costs.  This acquisition has been accounted for as a purchase business combination and the pro-forma results of operations and related per share information have not been presented as the amounts are considered immaterial.

Investment in NBC Weather Plus.  In November 2004, NBC Weather Plus Network (“Weather Plus”) was formed to launch the first digital local and national weather network using a portion of the digital spectrum of NBC-affiliated television stations.  Weather Plus is a 50/50 joint venture between two member limited liability companies:  NBC News Bureaus, Inc. and Weather Network Affiliates Company, LLC.  NBC-affiliated stations may participate in the venture by investing in Weather Network Affiliates Company, LLC.  We have a minority interest in Weather Network Affiliates Company, LLC, and have launched NBC Weather Plus in eight of our markets – Sacramento, Orlando, Winston-Salem, Greenville, Cincinnati, Baltimore, Lancaster and New Orleans – and expect to launch Weather Plus in our two remaining NBC markets in 2006.  We account for this investment using the cost method.

Other Investments.  The majority of the other investments are broadcast tower partnerships.

4.Goodwill and Intangible Assets

The carrying value of goodwill and intangible assets as of December 31, 2005 and 2004 consisted of the following:

	December 31, 2005		December 31, 2004
	(In thousands)
Total intangible assets subject to amortization	$	111,983	$	117,986
Intangible assets not subject to amortization – FCC licenses	2,284,103		2,310,279
Total intangible assets, net	$	2,396,086	$	2,428,265
Goodwill	$	731,687	$	734,746

In accordance with SFAS 142, Goodwill and Intangible Assets, (“SFAS 142”) the Company assesses its goodwill and intangible assets with indefinite useful lives at least annually by applying a fair value-based test.  The Company’s intangible assets with indefinite useful lives are licenses to operate its television stations which have been granted by the FCC.  SFAS 142 also requires that intangible assets with determinable useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with SFAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets.

In performing the annual impairment test, the estimated fair value of each station’s FCC license and enterprise value is determined based on the present value of future cash flows.  When performing the annual impairment test in 2005, we determined that at our station, WDSU-TV in New Orleans, Lousiana, the aggregate book value of FCC licenses exceeded the estimated fair value by $26.2 million and the Company wrote down the book value of FCC licenses accordingly.  After reducing the carrying value of the FCC license, the Company compared the carrying value of WDSU-TV’s net assets to its enterprise value.  As a result, the Company wrote down $3.0 million of goodwill.  Estimates of future cash flows reflected the negative impact of Hurricane Katrina on the New Orleans market.

The Company, as an FCC licensee, enjoys an expectancy of continued renewal of its licenses, so long as it continues to provide service in the public interest.  The FCC has historically renewed the Company’s licenses in the ordinary course of business, without compelling challenge and at little cost to the Company.  Furthermore, the Company believes that over-the-air broadcasting will continue as a video distribution mode for the foreseeable future.  Therefore, the cash flows derived from the Company’s FCC licenses are expected to continue indefinitely and as such, and in accordance with SFAS 142, the life of the FCC license intangible asset is deemed to be indefinite.

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Summarized below are the carrying value and accumulated amortization of intangible assets that continue to be amortized under SFAS 142, as well as the carrying value of those intangible assets that are no longer amortized and goodwill as of December 31, 2005 and 2004:

	December 31, 2005						December 31, 2004
	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
	(In thousands)
Intangible assets subject to amortization:
Advertiser client base	$	122,891	$	70,050	$	52,841	$	122,891	$	66,493	$	56,398
Network affiliations	95,493		36,489		59,004		95,493		34,098		61,395
Other	743		605		138		743		550		193
Total intangible assets subject to amortization	$	219,127	$	107,144	$	111,983	$	219,127	$	101,141	$	117,986

	As of December 31, 2004		Impairment Charge		As of December 31, 2005
Intangible assets not subject to amortization:
FCC licenses	$	2,310,279	$	26,176	$	2,284,103
Goodwill	$	734,746	$	3,059	$	731,687

The Company’s amortization expense for definite-lived intangible assets was approximately $6.0 million in the year ended December 31, 2005.  Estimated annual amortization expense for the next five years related to these intangible assets is expected to be approximately $6.0 million for the next five years.

5.Accrued Liabilities

Accrued liabilities as of December 31, 2005 and 2004 consisted of the following:

	2005		2004
	(In thousands)
Payroll, benefits and related costs	$	17,075	$	20,801
Accrued income taxes	10,307		14,639
Accrued interest	9,462		9,492
Accrued vacation	5,438		5,279
Accrued payables	3,111		4,019
Other taxes payable	1,777		1,335
Other accrued liabilities	3,963		8,075
Total accrued liabilities	$	51,133	$	63,640

6.Long-Term Debt

Long-term debt as of December 31, 2005 and 2004 consisted of the following:

	2005			2004
	(In thousands)
Senior Notes	$	417,110		$	432,110
Private Placement Debt	450,000			450,000
Capital Lease Obligations	107			291
	$	867,217		$	882,401
Less: Current maturities	(90,047		)	(180		)
Total long-term debt	$	777,170		$	882,221

Credit Facility

On April 15, 2005, we entered into a five year $250 million credit facility with a consortium of banks led by JP Morgan Chase, Bank of America, Wachovia Bank, BNP Paribas and Harris Nesbitt.  The new credit facility can be used for general corporate purposes including working capital, investments, acquisitions, debt repayment and dividend payments.  On the same day, we capitalized $1.1 million of costs related to the credit facility.  Outstanding principal balances under the credit facility will

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bear interest at our option at LIBOR or the alternate base rate (“ABR”), plus the applicable margin.  The applicable margin for ABR loans is zero.  The applicable margin for LIBOR loans varies between 0.50% and 1.00% depending on the ratio of our total debt to earnings before interest, taxes, depreciation and amortization as defined by the credit agreement (the “Leverage Ratio”).  The ABR is the greater of (i) the prime rate or (ii) the Federal Funds Effective Rate in effect plus 0.5%.  We are required to pay a commitment fee based on the unused portion of the Credit Facility.  The commitment fee ranges from 0.15% to 0.25% depending on our Leverage Ratio.  The credit facility is a general unsecured obligation of the Company.  We have not borrowed under this credit facility as of December 31, 2005.

During 2003, we repaid, in full, $91 million outstanding under our then $750 million senior credit facility which had an effective interest rate of 3.8%.

Senior Notes

At December 31, 2005, the Senior Notes, which are unsecured obligations, consisted of $125 million principal amount of 7.0% senior notes due 2007; $176 million principal amount of 7.0% senior notes due 2018 and $116.1 million principal amount of 7.5% senior notes due 2027. At December 31, 2004, the Senior Notes, which are unsecured obligations, consisted of $125 million principal amount of 7.0% senior notes due 2007; $176 million principal amount of 7.0% senior notes due 2018 and $131.1 million principal amount of 7.5% senior notes due 2027. Initially issued in November 1997 and January 1998, proceeds from the senior notes were used to repay then existing debt.  On December 13, 2005, we repurchased at a premium $15 million of our 7.5% senior notes due 2027.

Private Placement Debt

The Private Placement Debt consists of $450 million in senior, unsecured notes, which bear interest at 7.18% per year.  The notes are repayable in five mandatory $90 million annual installments beginning on December 1, 2006.  The Notes were initially issued in connection with the January 1, 1999 acquisition of KCRA-TV in Sacramento, California.

Capital Lease Obligations

We have capitalized the future minimum lease payments of equipment under leases that qualify as capital leases. We had capital lease obligations of approximately $0.1 million and $0.3 million as of December 31, 2005 and 2004, respectively.  The capital leases have terms which expire in various years through 2008.

Aggregate Maturities of Total Debt

Approximate aggregate annual maturities of total debt (including capital lease obligations) are as follows (in thousands):

2006	90,047
2007	215,052
2008	90,008
2009	90,000
2010	90,000
Thereafter	292,110
Total	$	867,217

Debt Covenants and Restrictions

The Company’s debt obligations contain certain financial and other covenants and restrictions on the Company. None of these covenants or restrictions include any triggers explicitly tied to the Company’s credit ratings or stock price.  The Company is in compliance with all such covenants and restrictions as of December 31, 2005.

Interest Rate Risk Management

The Company is not involved in any derivative financial instruments. However, we may consider certain interest rate risk strategies in the future. We may also consider in the future certain interest rate swap arrangements or debt-for-debt exchanges.

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Interest Expense, net

Interest expense, net for the years ended December 31, 2005, 2004 and 2003 consisted of the following:

	2005			2004			2003
	(In thousands)
Interest on borrowings:
Credit Facility	$	465		$	289		$	2,572
Senior Notes	31,578			30,903			30,934
Private Placement Debt	32,310			32,310			32,310
Amortization of deferred financings costs and other	2,424			1,943			2,910
Total interest expense	66,777			65,445			68,726
Interest income	(3,402		)	(1,715		)	(511		)
Total interest expense, net	$	63,375		$	63,730		$	68,215

7.Note Payable to Capital Trust

On December 20, 2001, our wholly-owned unconsolidated subsidiary trust, the Capital Trust, completed a $200.0 million private placement of Redeemable Convertible Preferred Securities with institutional investors.  We then issued subordinated debentures of $206.2 million (the “Subordinated Debentures”) to the Capital Trust in exchange for $200.0 million in net proceeds from the private placement and 100% of the Capital Trust’s common stock, valued at $6.2 million. The Subordinated Debentures are presented as Note payable to Capital Trust in our Consolidated Balance Sheets. We paid the Capital Trust’s issuance costs of $5.2 million, resulting in net proceeds to us of $194.8 million. We utilized the net proceeds to reduce outstanding borrowings under the Credit Facility.

In connection with the private placement, the Capital Trust issued 1,400,000 shares of Series A Redeemable Convertible Preferred Securities due 2016 (liquidation preference $50 per redeemable convertible preferred security) for an aggregate of $70,000,000, and 2,600,000 shares of Series B Redeemable Convertible Preferred Securities due 2021 (liquidation preference $50 per redeemable convertible preferred security) for an aggregate of $130,000,000, to institutional investors. (Hereafter, the Series A and the Series B Redeemable Convertible Preferred Securities are together referred to as the “Redeemable Convertible Preferred Securities.”) The investor group included Hearst Broadcasting, Inc., a wholly-owned subsidiary of Hearst. Hearst Broadcasting, Inc. purchased an aggregate of 300,000 shares of the Series A Redeemable Convertible Preferred Securities and an aggregate of 500,000 shares of the Series B Redeemable Convertible Preferred Securities for a total of $40 million, or 20% of the Redeemable Convertible Preferred Securities.  As the parent company of the Capital Trust, we have made a full and unconditional guarantee of the Capital Trust’s payments on the Redeemable Convertible Preferred Securities (see Note 15).

As part of the transaction, we issued and sold to the Capital Trust, in exchange for the proceeds from the sale of the Redeemable Convertible Preferred Securities, $72,164,960 in aggregate principal amount of 7.5% convertible junior subordinated deferrable interest debentures Series A, due 2016 (the “Series A Debentures”) and $134,020,640 in aggregate principal amount of 7.5% convertible junior subordinated deferrable interest debentures Series B, due 2021 (the “Series B Debentures”). (Hereafter, the Series A and the Series B Debentures are together referred to as the “Debentures.”)  The Debentures issued to the Capital Trust by us, in the combined aggregate principal amount of $206,185,600 were issued in exchange for (i) the receipt of the proceeds of $200.0 million from the issuance of the Redeemable Convertible Preferred Securities; and (ii) $6,185,600 which was owed by us to the Capital Trust for our purchase of $6,185,600 of the Capital Trust’s common stock, as part of the initial capitalization of the Capital Trust (see Note 3).

The Redeemable Convertible Preferred Securities issued by the Capital Trust are effectively convertible, at the option of the holder at any time, into shares of the Company’s Series A Common Stock, par value $.0l per share through an exchange of such Redeemable Convertible Preferred Securities for a portion of the Debentures of the corresponding series held by the Capital Trust. The conversion terms are identical for all holders of the Redeemable Convertible Preferred Securities, including Hearst. The Series A Debentures are convertible into the Company’s Common Stock at an initial rate of 2.005133 shares of the Company’s Common Stock per $50 principal amount of Series A Debentures (equivalent to a conversion price of $24.9360 per share of the Company’s Common Stock) and the Series B Debentures are convertible into the Company’s Common Stock at an initial rate of 1.972262 shares of the Company’s Common Stock per $50 principal amount of Series B Debentures (equivalent to a conversion price of $25.3516 per share of the Company’s Common Stock). When the Debentures are repaid or redeemed, the same amount of Redeemable Convertible Preferred Securities will simultaneously be redeemed with the proceeds from the repayment or redemption of the Debentures. The Series A Redeemable Convertible Preferred Securities mature on December 31, 2016 with distributions payable thereon at a rate of 7.5% per year. The Series B Redeemable Convertible Preferred Securities mature on December 31, 2021 with distributions payable thereon at a rate of 7.5% per year.

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The Series A Debentures mature on December 31, 2016 and bear interest at a rate of 7.5% per year. The Series B Debentures mature on December 31, 2021 and bear interest at a rate of 7.5% per year. The Company has the right to defer interest on the Debentures (and therefore distributions on the Redeemable Convertible Preferred Securities) by extending the interest payment period from time to time in accordance with and subject to the terms of the Redeemable Convertible Preferred Securities. Further, the Series A Debentures may be redeemed at the option of the Company (or at the direction of Hearst) at any time on or after December 31, 2004 and the Series B Debentures may be redeemed at the option of the Company (or at the direction of Hearst) at any time on or after December 31, 2006. The redemption prices (per $50 principal amount) of the Series A Debentures range from $52.625 in 2005, declining to $50.375 in 2011 and $50 thereafter to maturity. The redemption prices (per $50 principal amount) of the Series B Debentures range from $51.875 in 2007, declining to $50.375 in 2011 and $50 thereafter to maturity.

The Company redeemed all of its outstanding Series A Debentures on December 31, 2004 (the “Redemption Date”), at a price of $52.625 per $50.00 principal amount of the Series A Debentures in accordance with the terms of the indenture. The redemption of the Series A Debentures triggered a simultaneous redemption by the Capital Trust of 1.4 million shares of its Series A Redeemable Convertible Preferred Securities.  Also, the Capital Trust redeemed 43,299 shares of its common stock, held by the Company.  As a result of the redemption, Notes payable to Capital Trust was reduced by $72.2 million and Investments was reduced by $2.2 million.

Interest Expense, net – Capital Trust

During the year ended December 31, 2005, Interest expense, net – Capital Trust represents interest expense incurred by the Company on $134.0 million of Debentures issued by its wholly owned unconsolidated subsidiary trust (the “Capital Trust”).  For the years ended December 31, 2004 and 2003, the Company incurred interest expense on $206.2 million of Debentures issued by the Capital Trust. Interest expense, net in 2004 includes a $3.7 million premium paid for the redemption of the Series A Debentures.  Interest paid by the Company to the Capital Trust was then utilized by the Capital Trust to make dividend payments to the holders of the $200.0 million of Redeemable Convertible Preferred Securities issued by the Capital Trust in December 2001. In accordance with FIN 46(R), the Company does not consolidate the accounts of the Capital Trust in its consolidated financial statements. The Company uses the equity method of accounting to record the parent company’s equity interest in the earnings of the Capital Trust and accordingly has included such earnings of $0.3 million, $0.5 million, and $0.5 million in Interest Expense, net – Capital Trust in the accompanying Consolidated Statements of Income for the years ended December 31, 2005, 2004 and 2003, respectively.

	Years Ended December 31,
	2005			2004			2003
	(In thousands)
Interest on Subordinated Debentures:
Series A Subordinated Debentures	$	—		$	5,412		$	5,412
Series B Subordinated Debentures	10,052			10,052			10,052
Premium paid on redemption of Series A Subordinated Debentures	—			3,789			—
Gain on redemption of Capital Trust common stock	—			(114		)	—
Total interest expense	10,052			19,139			15,464
Equity in earnings of Capital Trust	(302		)	(464		)	(464		)
Total interest expense, net – Capital Trust	$	9,750		$	18,675		$	15,000

8.Earnings Per Share

The calculation of basic EPS for each period is based on the weighted average number of common shares outstanding during the period.  The calculation of dilutive EPS for each period is based on the weighted average number of common shares outstanding during the period, plus the effect, if any, of dilutive common stock equivalent shares.  The following tables set forth a reconciliation between basic EPS and diluted EPS, in accordance with SFAS 128, Earnings Per Share. See Note 2 under “Earnings Per Share (“EPS”)”.

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	Year Ended December 31,
	2005			2004			2003
	(In thousands)
Reported net income	$	100,217		$	123,942		$	94,221
Less: Preferred stock dividends	(2		)	(1,067		)	(1,211		)
Income applicable to common stockholders (Basic)	$	100,215		$	122,875		$	93,010
Add: Interest Expense, Net – Capital Trust, net of tax	—			9,285			—
Income applicable to common stockholders (Diluted)	$	100,215		$	132,160		$	93,010
Basic shares	92,826			92,928			92,575
Basic EPS	$	1.08		$	1.32		$	1.00
Diluted shares	93,214			101,406			92,990
Diluted EPS	$	1.08		$	1.30		$	1.00
Basic shares	92,826			92,928			92,575
Add: Shares issued upon assumed exercise of stock options	388			543			415
Add: Shares issued upon conversion of Series A Redeemable Convertible Preferred Securities	—			2,807			—
Add: Shares issued upon conversion of Series B Redeemable Convertible Preferred Securities	—			5,128			—
Diluted shares	93,214			101,406			92,990

The following shares were not included in the computation of diluted EPS, because to do so would have been anti-dilutive for the periods presented: (i) 5,781 shares of Series A Preferred Stock, outstanding as of December 31, 2004, and 7,381 shares of Series A Preferred Stock, outstanding as of December 31, 2003, which are convertible into Series A Common Stock (see Note 11); and (ii) 5,470 shares of Series B Preferred Stock, outstanding as of December 31, 2004, and 10,938 shares of Series B Preferred Stock, outstanding as of December 31, 2003, which are convertible into Series A Common Stock (see Note 11). The dividends for the Series A and B Preferred Stock were deducted from Net income for the calculation of Basic and Diluted EPS. These shares were redeemed in full as of January 1, 2005.

The dilution test for the Redeemable Convertible Preferred Securities related to the Capital Trust is performed for all periods. This test considers only the total number of shares that could be issued if converted and does not consider either the conversion price or the share price of the underlying common shares. For the year ended December 31, 2005, 5,128,205 shares of Series A Common Stock to be issued upon the conversion of 2,600,000 shares of Series B 7.5% Redeemable Convertible Preferred Securities, related to the Capital Trust, are not included in the number of common shares used in the calculation of diluted EPS because to do so would have been anti-dilutive. The Series A Convertible Preferred Securities were redeemed on December 31, 2004 and therefore had no impact on the 2005 periods. When the securities related to the Capital Trust are dilutive, the interest, net of tax, related to the Capital Trust is added back to Income applicable to common stockholders for purposes of the diluted EPS calculation. For the year ended December 31, 2004, 7,935,068 shares of Series A Common Stock to be issued upon the conversion of 1,400,000 shares of Series A 7.5% Redeemable Convertible Preferred Securities and 2,600,000 shares of Series B 7.5% Redeemable Convertible Preferred Securities, related to the Capital Trust, are included in the number of common shares used in the calculation of diluted EPS. For the year ended December 31, 2003, these shares were not included in the computation of diluted EPS because to do so would have been anti-dilutive.

Common stock options for 3,657,174, 2,916,270 and 2,902,456 shares of Series A Common Stock (before application of the treasury stock method), outstanding as of December 31, 2005, 2004 and 2003, respectively, were not included in the computation of diluted EPS because the exercise price was greater than the average market price of the common shares during the calculation period.

9.Income Taxes

The (benefit) provision for income taxes relating to income for the years ended December 31, 2005, 2004 and 2003, consisted of the following:

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	Years Ended December 31,
	2005			2004		2003
	(In thousands)
Current:
State and local	$	5,671		$	6,761	$	2,414
Federal	(8,328		)	49,475		(3,277		)
	(2,657		)	56,236		(863		)
Deferred:
State and local	(7,096		)	1,976		1,712
Federal	13,670			18,140		41,460
	6,574			20,116		43,172
Provision for income taxes	$	3,917		$	76,352	$	42,309

The Company’s effective income tax rate in a given financial statement period may be materially impacted by changes in the level of earnings by taxing jurisdiction, changes in the expected outcome of tax examinations, amount of deductions or changes in the deferred tax valuation allowance. The effective income tax rate for the years ended December 31, 2005, 2004 and 2003 varied from the statutory U.S. Federal income tax rate due to the following:

	2005		2004		2003
Statutory U. S. Federal income tax	35.0	%	35.0	%	35.0	%
State income taxes, net of Federal tax benefit	(0.9	)	2.9		2.0
Other non-deductible business expenses	1.3		0.3		(0.1	)
Change in valuation allowances and other estimates	(31.6	)	—		(5.8	)
Other	—		(0.1	)	(0.1	)
Effective income tax rate	3.8	%	38.1	%	31.0	%

The decrease in our Federal current tax expense and effective tax rate for the year ended December 31, 2005, primarily relates to our agreement in June 2005 with the Internal Revenue Service (IRS) to settle certain examination matters for tax years 2001-2002, principally related to deductions of income tax basis associated with certain of our prior acquisitions. The settlement resulted in our recognition of $31.9 million of reduced current income tax expense in 2005.  The decrease in our State deferred tax expense and effective tax rate for the year ended December 31, 2005, primarily relates to the change in Ohio tax law in June 2005, which among numerous other provisions calls for the phase-out of the corporate income tax in Ohio, resulting in the Company’s reversal of $8.4 million (net $5.5 million) in previously recorded State deferred tax liabilities.  The increase in other non-deductible business expenses is primarily related to the goodwill write-down associated with the New Orleans market impairment charge, which provided no tax benefit.

Deferred income tax liabilities and assets at December 31, 2005 and 2004 consisted of the following:

	2005			2004
	(In thousands)
Deferred income tax liabilities:
Difference between book and tax basis of property, plant and equipment	$	26,994		$	40,114
Accelerated funding of pension benefit obligation	13,352			10,421
Difference between book and tax basis of intangible assets	804,926			789,211
Total deferred income tax liabilities	$	845,272		$	839,746
Deferred income tax assets:
Accrued expenses and other	4,029			4,979
Operating and Capital loss carryforwards	33,265			20,689
	37,394			25,668
Less: Valuation allowance	(33,265		)	(20,689		)
Total deferred income tax assets	4,029			4,979
Net deferred income tax liabilities	$	841,243		$	834,767

The net deferred income tax liabilities are presented under the following captions on the Company’s consolidated balance sheets:

	2005		2004
	(In thousands)
Deferred income tax liability	$	845,272	$	839,746
Deferred income tax asset (current)	4,029		4,979
Net deferred income tax liability	$	841,243	$	834,767

The deferred tax liabilities primarily relate to differences between book and tax basis of the Company’s FCC licenses. In accordance with the adoption of SFAS 142 on January 1, 2002, the Company no longer amortizes its FCC licenses, but instead tests them for impairment annually.  As the tax basis in the Company’s FCC licenses continues to amortize, the deferred tax liabilities will increase over time.

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The valuation allowance represents the uncertainty associated with the realization of the tax benefits of certain state net operating loss carryforwards totaling approximately $319 million, which expire between 2006 and 2025, and other capital loss carryforwards totaling approximately $22 million, which expire in 2009.  The 2005 change in the valuation allowance is primarily the result of the valuation allowance associated with the capital loss carryforwards.

10.Common Stock

General

The Company has authorized 300 million common shares, par value $0.01 per share, which includes 200 million of Series A Common Stock and 100 million Series B Common Stock.  Except as otherwise described below, the issued and outstanding shares of Series A Common Stock and Series B Common Stock vote together as a single class on all matters submitted to a vote of stockholders, with each issued and outstanding share of Series A Common Stock and Series B Common Stock entitling the holder thereof to one vote on all such matters. With respect to any election of directors, (i) the holders of the shares of Series A Common Stock are entitled to vote separately as a class to elect two members of the Company’s Board of Directors (the Series A Directors) and (ii) the holders of the shares of the Company’s Series B Common Stock are entitled to vote separately as a class to elect the balance of the Company’s Board of Directors (the Series B Directors); provided, however, that the number of Series B Directors shall not constitute less than a majority of the Company’s Board of Directors.

All of the outstanding shares of Series B Common Stock are held by a subsidiary of Hearst.  No holder of shares of Series B Common Stock may transfer any such shares to any person other than to (i) Hearst; (ii) any corporation into which Hearst is merged or consolidated; (iii) any entity to which all or substantially all of Hearst’s assets are transferred; or (iv) any entity controlled by Hearst (each a “Permitted Transferee”).  Series B Common Stock, however, may be converted at any time into Series A Common Stock and freely transferred, subject to the terms and conditions of the Company’s Certificate of Incorporation and to applicable securities laws limitations.

Common Stock Repurchase

In May 1998 the Company’s Board of Directors authorized the repurchase of up to $300 million of its outstanding Series A Common Stock.  Such repurchases may be effected from time to time in the open market or in private transactions, subject to market conditions and management’s discretion. During 2005, the Company repurchased 669,227 shares of Series A Common Stock at a cost of $16.4 million and an average per share price of $24.48.  Between May 1998 and December 31, 2005, the Company repurchased approximately 4.3 million shares of Series A Common Stock at a cost of approximately $108.0 million and an average price of $24.97.  There can be no assurance that such repurchases will occur in the future or, if they do occur, what the terms of such repurchases will be.

Hearst and its indirect wholly-owned subsidiary Hearst Broadcasting, Inc. (“Hearst Broadcasting”) is authorized to purchase up to 25 million shares of the Company’s Series A Common Stock from time to time in the open market, in private transactions or otherwise. As of December 31, 2005, under this plan Hearst had purchased approximately 20.4 million shares of the Company’s outstanding Series A Common Stock. Hearst’s ownership in the Company was 70.5% and 67.6% as of December 31, 2005 and 2004, respectively.

Common Stock Dividends

During the year ended December 31, 2005, the Company’s Board of Directors declared and/or paid cash dividends as follows:

Dividend Amount			Declaration Date	Record Date	Payment Date	Total Dividend			Hearst Portion
						(In thousands)
$	0.07		December 1, 2004	January 5, 2005	January 15, 2005	$		6,500	$	4,394
$		0.07	March 31, 2005	April 5, 2005	April 15, 2005	$	6,496		$	4,432
$		0.07	May 4, 2005	July 5, 2005	July 15, 2005	$	6,497		$	4,478
$		0.07	September 21, 2005	October 5, 2005	October 15, 2005	$	6,504		$	4,515
$		0.07	December 6, 2005	January 5, 2006	January 15, 2006	$	6,486		$	4,575

11.Preferred Stock

The Company has one million shares of authorized preferred stock, par value $.01 per share. Under the Company’s Certificate of Incorporation, the Company has two authorized series of preferred stock, Series A Preferred Stock and Series B

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Preferred Stock (collectively, the “Preferred Stock”).  At December 31, 2005, there is no Preferred Stock outstanding. There were 5,470 shares of Series B Preferred Stock and 5,781 shares of Series A Preferred Stock issued and outstanding as of December 31, 2004. The Preferred Stock had a cash dividend feature whereby each share accrued $65 per share annually, to be paid quarterly.

On January 1, 2004, the Company redeemed 1,600 shares of Series A Preferred Stock and on December 10, 2004, the Company redeemed 5,468 shares of Series B Preferred Stock.  On January 1, 2005, 5,781 shares of Series A Preferred Stock and 5,470 shares of Series B Preferred Stock were redeemed.

12.Employee Stock Plans

On May 5, 2004, the Company’s stockholders and Board of Directors approved the 2004 Long Term Incentive Compensation Plan (“Incentive Compensation Plan”).  The Incentive Compensation Plan is intended to replace the Amended and Restated 1997 Stock Option Plan (the “Stock Option Plan”) and all grants made after May 5, 2004 are made under the new Incentive Compensation Plan.  Under the Incentive Compensation Plan the Company may award various forms of incentive compensation to officers, other key employees and non-employee directors of the Company and its subsidiaries.  The Company reserved for issuance under the Incentive Compensation Plan 3.6 million shares of Series A Common Stock.  Generally, under the Incentive Compensation Plan stock options are granted with exercise prices equal to the market price of the underlying stock on the date of grant.  Each option is exercisable after the period or periods specified in the applicable option agreement, but no option can be exercised after the expiration of 10 years from the date of grant.  Generally, options we have granted to employees under the Incentive Compensation Plan cliff-vest after three years commencing on the effective date of the grant.

Under the Stock Option Plan, 8.7 million shares of Series A Common Stock were reserved for issuance.  Under the Stock Option Plan, stock options were granted with exercise prices equal to the market price of the underlying stock on the date of grant.  Generally, options granted prior to December 2000 either (i) cliff-vest after three years commencing on the effective date of the grant or (ii) vest either after nine years or in one-third increments upon attainment of certain market price goals of the Company’s stock. Options granted in December 2000 vest in one-third increments per year commencing one year from the date of the grant.  Generally, options granted after December 2000 cliff-vest after three years commencing on the effective date of the grant.   All options granted pursuant to the Stock Option Plan will expire no later than ten years from the date of grant.

A summary of the status of the Company’s Stock Option Plan and Incentive Compensation Plan, and changes for the years ended December 31, 2005, 2004 and 2003 is presented below:  

	Options		Weighted Average Exercise Price
Outstanding at December 31, 2002	6,610,498		$	22.16
Granted	1,179,450		25.22
Exercised	(218,755	)	18.97
Forfeited	(146,721	)	22.49
Outstanding at December 31, 2003	7,424,472		22.71
Granted	1,272,900		25.63
Exercised	(455,056	)	18.97
Forfeited	(181,887	)	24.06
Outstanding at December 31, 2004	8,060,429		23.36
Granted	1,273,400		24.14
Exercised	(362,719	)	18.64
Forfeited	(450,263	)	26.02
Outstanding at December 31, 2005	8,520,847		$	23.53
Exercisable at December 31, 2003	3,804,590		$	21.54
Exercisable at December 31, 2004	4,392,112		$	21.84
Exercisable at December 31, 2005	4,720,837		$	22.25

The following table summarizes information about stock options outstanding and exercisable at December 31, 2005:

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Options Outstanding					Options Exercisable
Range of Exercise Prices	Number Outstanding at 12/31/05	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price		Number Exercisable At 12/31/05	Weighted Average Exercise Price
$18.56-$21.59	2,539,162	5.3 years	$	19.50	2,539,162	$	19.50
$22.08-$24.89	2,371,511	8.5 years	$	24.09	1,074,111	$	24.07
$25.13-$26.81	3,446,560	6.2 years	$	25.82	960,450	$	26.36
$27.75-$29.00	149,614	2.2 years	$	28.87	133,114	$	28.92
$36.44	14,000	2.6 years	$	36.44	14,000	$	36.44
	8,520,847	6.5 years	$	23.53	4,720,837	$	22.25

As of December 31, 2005, the Company has reserved 1,138,450 shares of Series A Common Stock for future grants under the Incentive Compensation Plan.

The Company accounts for employee stock-based compensation under APB 25 and related interpretations. Under APB 25, because the exercise price of the Company’s employee stock options equals the market price of the underlying stock on the date of grant, no compensation expense is recognized.

Pro forma information regarding Net income and earnings per share is required by SFAS No. 123 and has been determined as if the Company had recognized compensation expense for its employee stock options.  Under SFAS No. 123, options are valued at their date of grant and then expensed over their vesting period.  The value of the Company’s options was calculated at the date of grant using the Black-Scholes option-pricing model for options granted in 2005, 2004 and 2003. The weighted average value of options granted was $7.63, $7.81 and $8.71 for 2005, 2004 and 2003, respectively. The following assumptions were used for the years ended December 31, 2005, 2004 and 2003:

	2005		2004		2003
Risk-free interest rate	4.43	%	3.72	%	3.25	%
Dividend yield	1.12	%	0.94	%	0.25	%
Volatility factor	27.71	%	30.14	%	33.90	%
Expected life	5.9 years		5.0 years		5.0 years

See Note 2 under “Stock-Based Compensation” for the pro forma effect on Net income and earnings per share had compensation expense been recorded under SFAS No. 123, as amended.

13.Stock Purchase Plan

In April 1999, we implemented a non-compensatory employee stock purchase plan (“ESPP”) in accordance with Internal Revenue Code Section 423.  The ESPP allows employees to purchase shares of our Series A Common Stock, at 85% of its market price, through after-tax payroll deductions.  We reserved and made available for issuance and purchases under the Stock Purchase Plan 5,000,000 shares of Series A Common Stock.  Employees purchased 102,934 and 92,259 shares for aggregate proceeds of approximately $2.2 million and $2.0 million in the years ended December 31, 2005 and 2004, respectively.

14.Related Party Transactions

The Hearst Corporation.    As of December 31, 2005, Hearst beneficially owned approximately 46.8% of our Series A Common Stock and 100% of our Series B Common Stock, representing in the aggregate approximately 70.5% of the outstanding voting power of our common stock, except with regard to the election of directors.  With regard to the election of directors, Hearst’s beneficial ownership of our Series B Common Stock entitles Hearst to elect as a class 11 of the 13 directors of our Board of Directors. During the years ended December 31, 2005, 2004 and 2003, we entered into the following transactions with Hearst or parties related to Hearst:

•Management Agreement.    We recorded revenue of approximately $4.6 million, $4.2 million, and $3.6 million in the years ended December 31, 2005, 2004 and 2003, respectively, relating to a management agreement with Hearst (the “Management Agreement”). Pursuant to the Management Agreement, we provide certain management services, such as sales, news, programming, and financial and accounting management services, with respect to certain Hearst owned or operated television and radio stations. We believe that the terms of the Management Agreement are reasonable to both parties; however, there can be no assurance that more favorable terms would not be available from third parties.

•Services Agreement.    We incurred expenses of approximately $4.8 million, $3.8 million and $3.7 million in the years ended December 31, 2005, 2004 and 2003, respectively, relating to a services agreement with Hearst (the “Services Agreement”). Pursuant to the Services Agreement, Hearst provides the Company certain administrative services such as accounting, financial, legal, insurance, data processing, and employee benefits administration. We believe that the terms

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of the Services Agreement are reasonable to both parties; however, there can be no assurance that more favorable terms would not be available from third parties.

•Interest Expense, Net – Capital Trust.  We incurred interest expense, net, relating to the Subordinated Debentures issued to our wholly-owned unconsolidated subsidiary, the Capital Trust, of $9.8 million, $18.7 million and $15.0 million in the years ended December 31, 2005, 2004 and 2003, respectively.  The Capital Trust then paid comparable amounts to its Redeemable Convertible Preferred Securities holders of which $1.9 million, $3.7 million and $3.0 million in the years ended December 31, 2005, 2004 and 2003, respectively, was paid to Hearst.

•Dividend on Common Stock.    Our Board of Directors declared quarterly cash dividends of $0.07 per share on our Series A and Series B Common Stock, respectively, for a total amount of $26.0 million.  Included in this amount was $18.0 million payable to Hearst.  On December 6, 2005, our Board declared a cash dividend of $0.07 per share on our Series A and Series B Common Stock for a total of $6.5 million.  Included in this amount was $4.6 million payable to Hearst.  In the year ended December 31, 2004, the Company paid cash dividends of $22.3 million. Included in this amount was $14.7 million payable to Hearst. See Note 10.

•Radio Facilities Lease.    Pursuant to a lease agreement, Hearst paid us approximately $0.9 million in the year ended December 31, 2005 and $0.7 million per year in the years ended December 31, 2004 and 2003, respectively. Under this agreement, Hearst leases from the Company premises for WBAL-AM and WIYY-FM, Hearst’s Baltimore, Maryland radio stations.

•Hearst Tower Lease.  In October 2005, the Audit Committee of the Board of Directors approved the Company’s entry into a lease with Hearst of office space in the Hearst Tower in New York City, which is currently under construction and scheduled to be completed in mid-2006.  We expect to enter into that lease agreement in the first quarter of 2006.  We expect to incur capital expenditures of approximately $6 million in 2006 in connection with our relocation to the Hearst Tower and expect to incur approximately $0.8 million in rent expense in 2006.

•Lifetime Entertainment Services.     We have agreements with Lifetime Entertainment Services (“Lifetime”), an entity owned 50% by an affiliate of Hearst and 50% by The Walt Disney Company, whereby (i) we assist Lifetime in securing distribution and subscribers for the Lifetime Television, Lifetime Movie Network and/or Lifetime Real Women programming services; and (ii) Lifetime acts as our agent with respect to the negotiation of our agreements with cable, satellite and certain other multi-channel video programming distributors.  Amounts payable to us by Lifetime depend on the specific terms of these agreements and may be fixed or variable.  Based on the terms of completed agreements, we are entitled to receive a minimum aggregate amount of $2.5 million during the period from January 1, 2006 to June 20, 2009.  We have recorded revenue from the agreements of $6.7 million, $1.8 million and $1.9 million in the years ended December 31, 2005, 2004 and 2003, respectively.

•Wide Orbit, Inc.    In November 2004, we entered into an agreement with Wide Orbit, Inc. (“Wide Orbit”) for licensing and servicing of Wide Orbit’s Traffic Sales and Billing Solutions software.  Hearst owns approximately 8% of Wide Orbit, Inc.  In the years ended December 31, 2005 and 2004, we paid Wide Orbit approximately $1.7 million and $0.9 million, respectively, under the agreement.

•Other Transactions with Hearst.    In the year ended December 31, 2005, we recorded net revenue of approximately $0.1 million relating to advertising sales to Hearst on behalf of Good Housekeeping, which is owned by Hearst. In the years ended December 31, 2005 and 2004, we did not receive advertising revenue from Hearst.

Internet Broadcasting.    As of December 31, 2005, we owned 31.1% of Internet Broadcasting.  Our share of the loss of Internet Broadcasting included in Equity in (income) loss of affiliates, net was $0.3 million and $0.6 million for the years ended December 31, 2005 and 2004, respectively.  Our share of income for IBS/HATV LLC included in Equity in (income) loss of affiliates, net was $3.1 million and $2.2 million for the years ended December 31, 2005 and 2004, respectively.  We also have an agreement with Internet Broadcasting pursuant to which they provide hosting services for our corporate Internet site for a nominal amount.  Since January 2001, Harry T. Hawks, our Executive Vice President and Chief Financial Officer, since October 2002, Terry Mackin, our Executive Vice President, and since December 2005, Steven A. Hobbs, our Executive Vice President and Chief Legal and Development Officer, have served on the Board of Directors of Internet Broadcasting, from which they do not receive compensation for their services.

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Small Business Television.   The Company utilizes Small Business Television’s (“SBTV”) services to provide television stations with additional revenue through the marketing and sale of commercial time to smaller businesses that do not traditionally use television advertising due to costs.  In the year ended December 31, 2005 these sales generated revenue of approximately $1.4 million, of which approximately $0.8 million was distributed to the Company.  In the year ended December 31, 2004 these sales generated revenue of approximately $1.2 million, of which approximately $0.7 million was distributed to the Company.  In the year ended December 31, 2003 these sales generated revenue of approximately $1.2 million, of which approximately $0.7 million was distributed to the Company.  Mr. Dean Conomikes, the owner of SBTV, is the son of John G. Conomikes, a member of the Company’s Board of Directors.

NBC Weather Plus.  In 2004, we invested in Weather Network Affiliates Company, LLC, the company which owns the NBC Weather Plus Network.  Since November 2004 we have launched NBC Weather Plus in eight of our markets – Sacramento, Orlando, Winston-Salem, Greenville, Cincinnati, Baltimore, Lancaster and New Orleans – and expect to launch Weather Plus in our two remaining NBC markets in 2006.  Terry Mackin, our Executive Vice President, is the Chairman of the Board of the NBC Television Affiliates Association, which is the managing member and the owner of certain ownership interests in Weather Network Affiliates Company, LLC.  Mr. Mackin does not receive compensation for his Board service.

USDTV.  Currently, we and Hearst each own approximately 6.175% of USDTV.  Our station, KOAT-TV in Albuquerque, New Mexico, currently leases a portion of its digital spectrum to USDTV.  Since September 23, 2005, Steven A. Hobbs, our Executive Vice President and Chief Legal and Development Officer, has served on the Board of Directors of USDTV, from which he does not receive compensation for his services.

Other Related Parties.    In the ordinary course of business, the Company enters into transactions with other related parties, none of which were significant to our financial results in the years ended December 31, 2005, 2004 and 2003.

15.Other Commitments and Contingencies

We have obligations to various program syndicators and distributors in accordance with current contracts for the rights to broadcast programs. Future payments and barter obligations as of December 31, 2005, scheduled under contracts for programs which are currently available are as follows (in thousands):

	Program Rights		Barter Rights
2006	$	34,421	$	12,864
2007	1,224		271
2008	193		4
2009	122		2
2010	—		1
Thereafter	—		1
	$	35,960	$	13,143

The Company has various agreements relating to non-cancelable operating leases with an initial term of one year or more (some of which contain renewal options), future barter and program rights not available for broadcast at December 31, 2005, and employment contracts for key employees. Future minimum cash payments (and barter obligations) under the terms of these agreements as of December 31, 2005 are as follows:

	Operating Leases		Deduct Operating Sublease			Net Operating Lease Commitments		Program Rights		Barter Rights		Employment and Talent Contracts
2006	$	4,971	$	(60	)	$	4,911	$	32,220	$	7,324	$	71,660
2007	3,904		—			3,904		54,651		13,229		40,976
2008	3,089		—			3,089		55,301		12,012		13,022
2009	2,538		—			2,538		52,433		10,965		2,373
2010	2,073		—			2,073		44,369		9,934		1,311
Thereafter	14,636		—			14,636		17,439		3,614		411
	$	31,211	$	(60	)	$	31,151	$	256,413	$	57,078	$	129,753

Rent expense, net, for operating leases was approximately $10.4 million, $9.4 million and $8.6 million for the years ended December 31, 2005, 2004 and 2003, respectively.

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From time to time, the Company becomes involved in various claims and lawsuits that are incidental to its business. In the opinion of the Company, there are no legal proceedings pending against the Company or any of its subsidiaries that are likely to have a material adverse effect on the Company’s consolidated financial condition or results of operations.

The Company has guaranteed the payments by its wholly-owned unconsolidated subsidiary trust (the Capital Trust) on the Redeemable Convertible Preferred Securities in the amount of $134.0 million (see Note 7). The guarantee is irrevocable and unconditional, and guarantees the payment in full of all (i) distributions on the Redeemable Convertible Preferred Securities to the extent of available funds of the Capital Trust; (ii) amounts payable upon redemption of the Redeemable Convertible Preferred Securities to the extent of available funds of the Capital Trust; and (iii) amounts payable upon a dissolution of the Capital Trust. The guarantee is unsecured and ranks (i) subordinate to all other liabilities of the Company, except liabilities that are expressly made pari passu; (ii) pari passu with the most senior preferred stock issued by the Company, and pari passu with any guarantee of the Company in respect of any preferred stock of the Company or any preferred security of any of the Company’s controlled affiliates; and (iii) senior to the Company’s Common Stock. The Company made the guarantee in 2001 to enable the Capital Trust to issue the Redeemable Convertible Preferred Securities in the amount of $200.0 million to the holders, of which $70 million par amount was redeemed in 2004.

16.Retirement Plans and Other Post-Retirement Benefits

Overview

The Company maintains seven defined benefit pension plans, 12 employee savings plans, and other post-retirement benefit plans for active, retired and former employees.  In addition, the Company participates in a multi-employer union pension plan that provides retirement benefits to certain union employees.  The seven defined benefit pension plans are hereafter collectively referred to as the “Pension Plans.”

Pension Plans and Other Post-Retirement Benefits

Benefits under the Pension Plans are generally based on years of credited service, age at retirement and average of the highest five consecutive years’ compensation. The cost of the Pension Plans is computed on the basis of the Project Unit Credit Actuarial Cost Method. Past service cost is amortized over the expected future service periods of the employees.

Pension Plan Assets

The Pension Plans’ weighted average asset allocations as of the measurement dates September 30, 2005 and 2004, by asset category, are as follows:

	Percentage of Plan Assets as of September 30,
Asset Category	2005		2004
Equity	69.3	%	69.5	%
Fixed income	25.2	%	27.4	%
Real estate	2.3	%	1.8	%
Other	3.2	%	1.3	%
Total	100	%	100.0	%

The assets of the Pension Plans are invested with the objective of being able to meet current and future benefit payment needs while controlling pension expense volatility.  Plan assets are invested with a number of investment managers and are diversified among equities, fixed income, real estate and other investments, as shown in the table above. Approximately 80% of the assets of the Pension Plans are invested in a master trust, which has a target allocation of approximately 70% equities and 30% fixed income.  When adding the remaining 20% of the assets of the Pension Plans which are outside of the master trust, the aggregate allocation is comparable to that of the master trust, but with a slightly higher allocation percentage for fixed income investments.  Each of the Pension Plans employs active investment management programs, and each has an Investment Committee which reviews the respective plan’s asset allocation on a periodic basis and determines when and how to re-balance the portfolio when appropriate. None of the Pension Plans has any dedicated target allocation to the Company’s Common Stock.

Net Periodic Pension and Post-Retirement Cost

The following schedule presents net periodic pension cost for the Company’s Pension Plans in the years ended December 31, 2005, 2004 and 2003:

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	Pension Benefits
	2005			2004			2003
	(In thousands)
Service cost	$	9,031		$	7,376		$	6,085
Interest cost	8,660			7,663			6,893
Expected return on plan assets	(9,789		)	(8,940		)	(9,346		)
Amortization of prior service cost	432			493			497
Amortization of transitional asset	5			(95		)	(113		)
Recognized actuarial (gain) loss	2,955			1,435			(40		)
Net periodic pension cost	$	11,294		$	7,932		$	3,976

The following schedule presents net periodic pension cost for the Company’s post-retirement benefit plan in the years ended December 31, 2005, 2004 and 2003:

	Post-Retirement Benefits
	2005		2004		2003
	(In thousands)
Service cost	$	94	$	55	$	58
Interest cost	374		307		315
Amortization of prior service cost	18		17		17
Amortization of transitional obligation	18		18		18
Amortization of net loss	120		15		—
Net periodic pension cost	$	624	$	412	$	408

In December 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the “Act”) was signed into law.  For the year ended December 31, 2005, the Company has included the impact of the subsidy.  As a result, the Net periodic pension cost was reduced by $0.1 million and Accumulated benefit obligation was reduced by $0.8 million.  For the years ended December 31, 2004 and 2003, the Company determined that the Act is not a “significant event” as defined by SFAS 106.

Summary Disclosure Schedule

The following schedule presents the change in benefit obligation, change in plan assets, a reconciliation of the funded status, amounts recognized in the Consolidated Balance Sheet, and additional year-end information for the Company’s Pension Plans. The measurement dates for the determination of the benefit obligation, plan assets, and assumptions were September 30, 2005 and 2004.

	Pension Benefits
	2005			2004
	(In thousands)
Change in benefit obligation:
Benefit obligation at beginning of year	$	146,398		$	124,477
Service cost	9,031			7,376
Interest cost	8,660			7,663
Participant contributions	8			6
Benefits and administrative expenses paid	(4,334		)	(4,182		)
Actuarial loss	6,284			11,058
Benefit obligation at end of year	$	166,047		$	146,398
Change in plan assets:
Fair value of plan assets at beginning of year	$	117,633		$	97,210
Actual gain on plan assets, net	15,589			10,607
Employer contributions	19,562			13,992
Participant contributions	8			6
Benefits and administrative expenses paid	(4,334		)	(4,182		)
Fair value of plan assets at end of year	$	148,458		$	117,633
Reconciliation of funded status:
Funded status	$	(17,589	)	$	(28,765	)
Contributions paid during the fourth quarter	787			435
Unrecognized actuarial loss	53,014			55,486
Unrecognized prior service cost	2,033			2,464
Unrecognized transition asset	1			6
Net amount recognized at end of year	$	38,246		$	29,626
Amounts recognized in the Consolidated Balance Sheet (as of December 31):
Other assets	$	42,204		$	38,107
Other liabilities	(14,438		)	(18,716		)
Accumulated other comprehensive loss	10,480			10,235
Net amount recognized at end of year	$	38,246		$	29,626
Increase in minimum liability included in other comprehensive income	$	245		$	1,515
Additional year-end information for all defined benefit plans
Accumulated benefit obligation	$	147,662		$	127,349
Additional year-end information for pension plans with accumulated benefit obligations in excess of plan assets:
Projected benefit obligation	$	62,349		$	58,981
Accumulated benefit obligation	$	54,758		$	49,033
Fair value of plan assets	$	40,958		$	30,737

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The following schedule presents the change in benefit obligation, change in plan assets, a reconciliation of the funded status, and amounts recognized in the Consolidated Balance Sheet for the Company’s post-retirement benefit plan. The measurement dates for the determination of the benefit obligation and assumptions were September 30, 2005 and 2004.

	Post-Retirement Benefits
	2005			2004
	(In thousands)
Change in benefit obligation:
Benefit obligation at beginning of year	$	5,137		$	5,063
Service cost	94			55
Interest cost	373			307
Plan Amendments	8			4
Benefits and administrative expenses paid	(502		)	(493		)
Actuarial loss	1,467			201
Benefit obligation at end of year	$	6,577		$	5,137
Change in plan assets:
Fair value of plan assets at beginning of year	—			$	—
Employer contributions	502			493
Benefits and administrative expenses paid	(502		)	(493		)
Fair value of plan assets at end of year	—			$	—
Reconciliation of funded status:
Funded status	$	(6,577	)	$	(5,137	)
Contributions paid during the fourth quarter	110			139
Unrecognized actuarial loss	2,262			915
Unrecognized prior service cost	106			116
Unrecognized transition obligation	111			129
Net amount recognized at end of year	$	(3,988	)	$	(3,838	)
Amounts recognized in the Consolidated Balance Sheet (as of December 31):
Other assets	$	—		$	—
Other liabilities	(3,988		)	(3,838		)
Net amount recognized at end of year	$	(3,988	)	$	(3,838	)

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Contributions

During the year 2006, the Company expects to contribute approximately $0.5 million to the Pension Plans and approximately $0.6 million to the post-retirement benefit plan.

Expected Benefit Payments

Benefit payments for the pension plans for the next 10 years are expected to be as follows (in thousands):

Year ending December 31,
2006	4,424
2007	4,900
2008	5,311
2009	5,961
2010	6,820
Next 5 years	46,935

Benefit payments for the post-retirement benefit plan for the next 10 years are expected to be as follows (in thousands):

Year ending December 31,
2006	552
2007	536
2008	476
2009	451
2010	452
Next 5 years	2,095

Assumptions

The weighted-average assumptions used for computing the projected benefit obligation for the Company’s Pension Plans as of the measurement dates of September 30, 2005 and 2004 were as follows:

	Pension Benefits
	2005		2004
Discount rate	5.75	%	6.00	%
Rate of compensation increase	4.00	%	4.00	%

The weighted-average assumptions used for computing the net periodic pension cost for the Company’s Pension Plans in the years ended December 31, 2005, 2004 and 2003 were as follows:

	Pension Benefits
	2005		2004		2003
Discount rate	6.00	%	6.25	%	6.88	%
Expected long-term rate of return on plan assets	7.75	%	7.75	%	8.00	%
Rate of compensation increase	4.00	%	4.00	%	4.00	%

To develop the expected long-term rate of return on assets assumptions, the Company considered the current level of expected returns on risk free investments (primarily government bonds), the historical level of the risk premium associated with the other asset classes in which the portfolio is invested, and the expectations for future returns of each asset class.  The expected return for each asset class was then weighted based on the aggregate target asset allocation to develop the expected long-term rate of return on assets assumption for the portfolio.  The expected rate of return assumption is then adjusted to reflect investment and trading expenses.  Since the Company’s investment policy is to actively manage certain asset classes where the potential exists to outperform the broader market, the expected returns for those asset classes were adjusted to reflect the expected additional returns.  The Company reviews the expected long-term rate of return on an annual basis and revises it as appropriate.

The weighted-average assumptions used for computing the projected benefit obligation for the Company’s post-retirement benefit plan as of the measurement dates of September 30, 2005 and 2004 are as follows:

	Post-Retirement Benefits
	2005		2004
Discount rate	5.75	%	6.00	%

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The weighted-average assumptions used for computing the net periodic benefit cost for the Company’s post-retirement benefit plan in the years ended December 31, 2005, 2004 and 2003 are as follows:

	Post-Retirement Benefits
	2005		2004		2003
Discount rate	6.00	%	6.25	%	6.88	%

For measurement purposes, the Company assumed a per capita health care benefit cost trend rate of 10.3% and 11.0% for persons retiring before and after age 65, respectively.  These rates are assumed to decrease gradually to 5% in 2013 and remain level thereafter.  A Part D Subsidy trend rate of 12% was assumed for the Company.  These rates are assumed to decrease gradually to 5% in 2013 and remain level thereafter.  Previously, a trend rate of 12.0% in per capita cost of covered health care benefits was assumed for 2004.  These rates are assumed to decrease gradually to 5% by 2013 and remain at that level thereafter.

The assumed health care cost trend rates have a significant effect on the amounts reported for the health care plan. A one-percentage-point change in assumed health care cost trend rates would have the following effects:

	One- Percentage-Point Increase		One- Percentage-Point Decrease
	(In thousands)
Effect on total of service cost and interest cost components	$	50	$	(41	)
Effect on postretirement benefit obligation	$	636	$	(537	)

Savings Plans

The Company’s qualified employees may contribute from 2% to 16% of their compensation up to certain dollar limits to self-directed 401(k) savings plans. In certain of the Company’s (but not all) 401(k) savings plans, the Company matches in cash, one-half of the employee contribution up to 6% (i.e. the Company matches up to 3%) of the employee’s compensation. The assets in the 401(k) savings plans are invested in a variety of diversified mutual funds. The Company contributions to the 401(k) savings plans in the years ended December 31, 2005, 2004 and 2003 were approximately $2.7 million, $2.5 million and $2.4 million, respectively.

Multi-Employer Pension Plan

The Company participates in a multi-employer pension plan for providing retirement benefits to certain union employees.  The Company’s contributions to the multiemployer union pension plan in the year ended December 31, 2005, was $0.8 million, $0.8 million and $0.7 million in the years ended December 31, 2004 and 2003.  No information is available for each of the other contributing employers for this plan.

17.Fair Value of Financial Instruments

The carrying amounts and the estimated fair values of the Company’s financial instruments for which it is practicable to estimate fair value are as follows (in thousands):

	December 31, 2005				December 31, 2004
	Carrying Value		Fair Value		Carrying Value		Fair Value
Senior Notes	$	417,110	$	434,830	$	432,110	$	479,548
Private Placement Debt	$	450,000	$	484,676	$	450,000	$	496,937
Note Payable to Capital Trust	$	134,021	$	144,546	$	134,021	$	155,334

The fair values of the Senior Notes were determined based on the quoted market prices and the fair values of the Private Placement Debt and the Note Payable to Capital Trust were determined using quoted market prices on comparable debt instruments.

For instruments including cash and cash equivalents, accounts receivable, accounts payable and other debt the carrying amount approximates fair value because of the short maturity of these instruments. In accordance with the requirements of SFAS No. 107, Disclosures About Fair Value of Financial Instruments, the Company believes it is not practicable to estimate the current fair value of the related party receivables and related party payables because of the related party nature of the transactions.

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18.Quarterly Information (unaudited)

	1st Quarter				2nd Quarter				3rd Quarter				4th Quarter
	2005		2004		2005 (c)		2004		2005		2004		2005 (d)		2004
	(In thousands, except per share data)
Total revenue	$	162,279	$	166,864	$	188,453	$	197,958	$	164,173	$	194,011	$	191,978	$	221,046
Operating income	$	39,268	$	48,875	$	63,700	$	77,461	$	36,538	$	70,736	$	37,935	$	87,679
Net income	$	13,075	$	17,894	$	65,614	$	36,007	$	11,678	$	30,428	$	9,850	$	39,613
Income applicable to common stockholders (a)	$	13,073	$	17,622	$	65,614	$	35,735	$	11,678	$	30,156	$	9,850	$	39,362
Income per common share basic: (b)
Net income	$	0.14	$	0.19	$	0.71	$	0.38	$	0.13	$	0.32	$	0.11	$	0.42
Number of common shares used in the calculation	92,849		92,902		92,810		93,087		92,867		92,938		92,777		92,788
Income per common share diluted: (b)
Net income	$	0.14	$	0.19	$	0.68	$	0.37	$	0.13	$	0.32	$	0.11	$	0.41
Number of common shares used in the calculation	93,319		93,615		98,334		101,601		93,254		101,263		93,076		101,210
Dividends declared per share	$	0.07	$	0.06	$	0.07	$	0.06	$	0.07	$	0.06	$	0.07	$	0.07

(a)Net income applicable to common stockholders gives effect to dividends on the Preferred Stock issued in connection with the acquisition of KHBS-TV/KHOG-TV.

(b)Per common share amounts for the quarters and the full years have each been calculated separately. Accordingly, quarterly amounts may not add to the annual amounts because of differences in the average common shares outstanding during each period and, with regard to diluted per common share amounts only, because of the inclusion of the effect of potentially dilutive securities only in the periods in which such effect would have been dilutive.

(c)During the second quarter of 2005, $31.9 million in tax benefits were recorded as a result of the settlement of certain tax return examinations and $5.5 million in tax benefits were recorded as a result of a change in Ohio tax law.

(d)In December 2005, we recorded an impairment charge of $29.2 million to write down to fair value WDSU’s FCC license and goodwill.

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ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

ITEM 9A.CONTROLS AND PROCEDURES

(a)    Evaluation of Disclosure Controls and Procedures.    Our management performed an evaluation under the supervision and with the participation of the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) of the effectiveness of the design and operation of our disclosure controls and procedures (as that term is defined in Exchange Act Rule 13a-15(e)) as of  December 31, 2005.   Based on that evaluation, our management, including the CEO and CFO, concluded that our disclosure controls and procedures were effective as of December 31, 2005.

(b)  Management’s Annual Report on Internal Control Over Financial Reporting. Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as that term is defined in Exchange Act Rule 
13a-15(f)).   To evaluate the effectiveness of our internal control over financial reporting, the Company uses the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO Framework”).  Using the COSO Framework our management, including the CEO and CFO, evaluated the Company’s internal control over financial reporting and concluded that our internal control over financial reporting was effective as of December 31, 2005.  Deloitte & Touche LLP, the independent registered public accounting firm that audits our consolidated financial statements included in this annual report, has issued an attestation report on our management’s assessment of internal control over financial reporting, which is included below.

(c)    Attestation Report of the Independent Registered Public Accounting Firm.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Hearst-Argyle Television, Inc.

We have audited management’s assessment, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting, that Hearst-Argyle Television, Inc. and subsidiaries (the “Company”) maintained effective internal control over financial reporting as of December 31, 2005, based on thecriteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.  The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting.  Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.  Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances.  We believe that our audit provides a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel 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 (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) 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 (3) provide reasonable assurance regarding prevention or timely

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detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis.  Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, management’s assessment that the Company maintained effective internal control over financial reporting as of December 31, 2005, is fairly stated, in all material respects, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.  Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2005, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements and financial statement schedule as of and for the year ended December 31, 2005 of the Company and our report dated February 23, 2006 expressed an unqualified opinion on those consolidated financial statements and financial statement schedule.

/s/ DELOITTE & TOUCHE LLP

New York, New York

February 23, 2006

(d) Changes in Internal Control Over Financial Reporting.   Our management, including the CEO and CFO, performed an evaluation of any changes that occurred in our internal control over financial reporting during the fiscal quarter ended December 31, 2005.  That evaluation did not identify any changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B.OTHER INFORMATION

Not applicable.

PART III

ITEM 10.DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information called for by Item 10 is set forth under the headings “Executive Officers of the Company,” “Election of Directors Proposal” and “Board of Directors—General Information” in our Proxy Statement relating to the 2006 Annual Meeting of Stockholders (the “2006 Proxy Statement”), which information we incorporate by reference into this report.

ITEM 11.EXECUTIVE COMPENSATION

Information called for by Item 11 is set forth under the heading “Executive Compensation and Other Matters” in the 2006 Proxy Statement, which information we incorporate by reference into this report.

ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Information called for by Item 12 is set forth under the headings “Equity Compensation Plans” and “Principal Stockholders” in our 2006 Proxy Statement, which information we incorporate by reference into this report.

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ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information called for by Item 13 is set forth under the heading “Certain Relationships and Related Transactions” in our 2006 Proxy Statement, which information we incorporate by reference into this report.

ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES

Information called for by Item 14 is set forth under the heading “Independent Auditors Fees” in the 2006 Proxy Statement, which information we incorporate by reference into this report.

PART IV

ITEM 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)Financial Statements, Schedules and Exhibits

(1)The financial statements listed in the Index for Item 8 hereof are filed as part of this report.

(2)The financial statement schedules required by Regulation S-X are included as part of this report or are included in the information provided in the Notes to Consolidated Financial Statements, which are filed as part of this report.

SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS

HEARST-ARGYLE TELEVISION, INC.

Description	Balance at Beginning of Year		Additions Charged to Costs and Expenses		Deductions (1)			Balance at End of Year
Year Ended December 31, 2003:
Allowance for uncollectible accounts	$	4,702,000	$	298,000	$	(891,000	)	$	4,109,000
Year Ended December 31, 2004:
Allowance for uncollectible accounts	$	4,109,000	$	125,000	$	(950,000	)	$	3,284,000
Year Ended December 31, 2005:
Allowance for uncollectible accounts	$	3,284,000	$	888,000	$	(1,229,000	)	$	2,943,000

(1)Net write-off of accounts receivable.

(3)The following exhibits are filed as a part of this report:

Exhibit No.	Description
10.2	Affiliation Agreement, dated as of December 4, 2005, between the ABC Television Network and the Company.*
10.5	Amendment No. 8 to Services Agreement, dated as January 1, 2006, between the Company and The Hearst Corporation,
10.6	Third Extension of the Amended and Renewed Option Agreement, dated as of January 1, 2006, between the Company and The Hearst Corporation,
10.7	Third Extension of the Amended Studio Lease Agreement, dated as of January 1, 2006, between the Company and The Hearst Corporation,
10.8	Amended and Restated Retransmission Rights Agency Agreement, dated as of January 31, 2006, between Lifetime Entertainment Services and the Company.*

*Portions of this agreement have been redacted pursuant to a request for confidential treatment submitted to the SEC February 27, 2006.  We have filed the redacted material separately with the SEC.

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21.1	List of Subsidiaries of the Company.
23.1	Consent of Independent Registered Public Accounting Firm.
24.1	Powers of Attorney (contained on signature page).
31.1	Certification by David J. Barrett, President and Chief Executive Officer, pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
31.2	Certification by Harry T. Hawks, Executive Vice President and Chief Financial Officer, pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
32.1	Certification by David J. Barrett, President and Chief Executive Officer, and Harry T. Hawks, Executive Vice President and Chief Financial Officer, pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

(b)Exhibits

The following documents are filed or incorporated by reference as exhibits to this report.

Exhibit No.	Description
2.1	Amended and Restated Agreement and Plan of Merger, dated as of March 26, 1997, among The Hearst Corporation, HAT Merger Sub, Inc., HAT Contribution Sub, Inc. and Argyle (incorporated by reference to Appendix A of the proxy statement/prospectus included in our Registration Statement on Form S-4 (File No. 333-32487)).
2.2	Amended and Restated Agreement and Plan of Merger, dated as of May 25, 1998, by and among Pulitzer Publishing Company, Pulitzer Inc. and the Company (incorporated by reference to Annex I to our Registration Statement on Form S-4 (File No. 333-72207)).
3.1	Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Appendix C the proxy statement/prospectus included in our Registration Statement on Form S-4 (File No. 333-32487)).
3.2	Amendment No. 1 to the Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.3 of our Annual Report on Form 10-K for the fiscal year ended December 31, 1998).
3.3	Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 of our Registration Statement on Form S-4 (File No. 333-72207)).
4.1	Indenture, dated as of November 13, 1997, between the Company and Bank of Montreal Trust Company, as trustee (incorporated by reference to Exhibit 4.1 of our Current Report on Form 8-K dated November 12, 1997 (File No. 000-27000)).
4.2	First Supplemental Indenture, dated as of November 13, 1997, between the Company and Bank of Montreal Trust Company, as trustee (incorporated by reference to Exhibit 4.2 of our Current Report on Form 8-K dated November 12, 1997 (File No. 000-27000)).
4.3	Global Note representing $125,000,000 of 7% Senior Notes Due November 15, 2007 (incorporated by reference to Exhibit 4.3 of our Current Report on Form 8-K dated November 12, 1997 (File No. 000-27000)).
4.4	Global Note representing $175,000,000 of 7½% Debentures Due November 15, 2027 (incorporated by reference to Exhibit 4.4 of our Current Report on Form 8-K dated November 12, 1997 (File No. 000-27000)).

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4.5	Second Supplemental Indenture, dated as of January 13, 1998, between the Company and Bank of Montreal Trust Company, as trustee (incorporated by reference to Exhibit 4.3 of our Current Report on Form 8-K dated January 13, 1998 (File No. 000-27000)).
4.6	Specimen of the stock certificate for the Company’s Series A Common Stock, $.01 par value per share (incorporated by reference to Exhibit 4.11 of our Annual Report on Form 10-K for the fiscal year ended December 31, 1998).
4.7	Form of Registration Rights Agreement among the Company and the Holders (incorporated by reference to Exhibit B to Exhibit 2.1 of our Schedule 13D/A, filed on September 5, 1997 (File No. 005-45627)).
4.8	Form of Note Purchase Agreement, dated December 1, 1998, by and among the Company, as issuer of the notes, and the note purchasers named therein (including form of note attached as an exhibit thereto) (incorporated by reference to Exhibit 4.13 of our Registration Statement on Form S-4 (File No. 333-72207)).
4.9	Amended and Restated Declaration of Trust of Hearst-Argyle Capital Trust (incorporated by reference to Exhibit 99.1 of our Current Report on Form 8-K dated December 20, 2001).
4.10	Terms of 7.5% Series B Convertible Preferred Securities and 7.5% Series B Convertible Common Securities (incorporated by reference to Exhibit 99.2 of our Current Report on Form 8-K dated December 20, 2001).
4.11	Indenture, dated as of December 20, 2001, by Hearst-Argyle Television, Inc. to Wilmington Trust Company, as Trustee (incorporated by reference to Exhibit 99.3 of our Current Report on Form 8-K dated December 20, 2001).
4.12	Registration Rights Agreement, by and among Hearst-Argyle Television, Inc. and the purchasers of the Trust Preferred Securities (incorporated by reference to Exhibit 99.4 of our Current Report on Form 8-K dated December 20, 2001).
10.1	Letter Agreement between the Company and NBC Television Network dated June 30, 2000 (incorporated by reference to Exhibit 10.2 of our Quarterly Report for the fiscal quarter ended September 30, 2000).
10.2	Affiliation Agreement, dated as of December 4, 2005, between the ABC Television Network and the Company.*
10.3	Affiliation Agreement, dated as of November 28, 2005, between Hearst-Argyle Properties, Inc. and CBS Broadcasting, Inc. (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed November 29, 2005).
10.4	Affiliation Agreement, dated as of November 28, 2005, between the Company and CBS Broadcasting, Inc. (incorporated by reference to Exhibit 10.2 of our Current Report on Form 8-K filed November 29, 2005).
10.5	Amendment No. 8 to Services Agreement, dated as of January 1, 2006, between the Company and The Hearst Corporation,
10.6	Third Extension of the Amended and Renewed Option Agreement, dated as of January 1, 2006, between the Company and The Hearst Corporation,
10.7	Third Extension of the Amended Studio Lease Agreement, dated as of January 1, 2006, between the Company and The Hearst Corporation,
10.8	Amended and Restated Retransmission Rights Agency Agreement, dated as of January 31, 2006, between Lifetime Entertainment Services and the Company.*

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10.9	Five-Year Credit Agreement dated April 15, 2005, among the Company, the Lenders party thereto, JPMorgan Chase Bank, N.A. as Administrative Agent, Bank of America, N.A., and Wachovia Bank, National Association as Co-Syndication Agents, and Harris Nesbitt and BNP Paribas as Co-Documentation Agents (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed April 21, 2005).
10.10	Amended and Restated 1997 Stock Option Plan (incorporated by reference to Exhibit 10.21 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2002).
10.11	2003 Incentive Compensation Plan (incorporated by reference to Exhibit 10.22 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2002).
10.12	2004 Long Term Incentive Compensation Plan (incorporated by reference to Exhibit 99.2 of our Current Report on Form 8-K filed October 28, 2004).
10.13	Employment Agreement, dated as of December 22, 2005, between the Company and David J. Barrett (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed December 22, 2005).
10.14	Employment Agreement, dated as of January 1, 2005, between the Company and Harry T. Hawks (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed October 6, 2005).
10.15	Employment Agreement, dated as of January 1, 2006, between the Company and Steven A. Hobbs (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed February 10, 2006).
10.16	Employment Agreement, dated as of January 1, 2006, between the Company and Terry Mackin (incorporated by reference to Exhibit 10.2 of our Current Report on Form 8-K filed February 10, 2006).
10.17	Employment Agreement, dated as of January 1, 2005, between the Company and Philip M. Stolz (incorporated by reference to Exhibit 10.7 of our Current Report on Form 8-K filed April 1, 2005).
21.1	List of Subsidiaries of the Company.
23.1	Consent of Independent Registered Public Accounting Firm.
24.1	Powers of Attorney (contained on signature page).
31.1	Certification by David J. Barrett, President and Chief Executive Officer, pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
31.2	Certification by Harry T. Hawks, Executive Vice President and Chief Financial Officer, pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
32.1	Certification by David J. Barrett, President and Chief Executive Officer, and Harry T. Hawks, Executive Vice President and Chief Financial Officer, pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

*Portions of this agreement have been redacted pursuant to a request for confidential treatment submitted to the SEC February 27, 2006.  We have filed the redacted material separately with the SEC.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

HEARST-ARGYLE TELEVISION, INC.
By:	/s/   JONATHAN C. MINTZER
	Name: Jonathan C. Mintzer
	Title: Vice President, Secretary and General Counsel
Dated:	February 24, 2006

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company in the capacities indicated.

Signatures	Title	Date
/S/ DAVID J. BARRETT	President, Chief Executive	February 24, 2006
David J. Barrett	Officer and Director
	(Principal Executive Officer)
/S/ HARRY T. HAWKS	Executive Vice President and	February 24, 2006
Harry T. Hawks	Chief Financial Officer
	(Principal Financial Officer)
/S/ LYDIA G. BROWN	Corporate Controller	February 24, 2006
Lydia G. Brown	(Principal Accounting Officer)
/S/ VICTOR F. GANZI	Chairman of the Board	February 24, 2006
Victor F. Ganzi
	Director	February 24, 2006
Frank A. Bennack, Jr.
/S/ JOHN G. CONOMIKES	Director	February 24, 2006
John G. Conomikes
/S/ KEN J. ELKINS	Director	February 24, 2006
Ken J. Elkins
/S/ GEORGE R. HEARST, JR.	Director	February 24, 2006
George R. Hearst, Jr.
/S / WILLIAM R. HEARST III	Director	February 24, 2006
William R. Hearst III
/S/ BOB MARBUT	Director	February 24, 2006
Bob Marbut
/S/ GILBERT C. MAURER	Director	February 24, 2006
Gilbert C. Maurer
/S/ MICHAEL E. PULITZER	Director	February 24, 2006
Michael E. Pulitzer
/S/ DAVID PULVER	Director	February 24, 2006
David Pulver
/S/ CAROLINE L. WILLIAMS	Director	February 24, 2006
Caroline L. Williams

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EX-10.2

Exhibit 10.2

ABC AFFILIATION AGREEMENT

ABC Television Network

John L. Rouse

Senior Vice President

Affiliate Relations

July 21, 2005

Mr. David J. Barrett

President & CEO

Hearst-Argyle Television, Inc.

888 Seventh Avenue

New York, NY 10106

Dear David,

Below are terms of an offer for a renewal of the ABC Affiliation Agreement with Hearst-Argyle Television, Inc. All terms are subject to and conditioned on the execution of a long form affiliation agreement incorporating these terms. The parties agree to negotiate in good faith on the finalization and execution of such an agreement

Stations

WCVB	Boston
WMUR	Boston / Manchester
WTAE	Pittsburgh
KMBC	Kansas City
WISN	Milwaukee
WPBF	W. Palm Beach
KOCO	Oklahoma City
KOAT	Albuquerque
KITV	Honolulu
WMTW	Portland, ME
KETV	Omaha
WAPT	Jackson
KHBS	Ft. Smith

Term

Except for any clearance changes that require an earlier implementation date, the term will be from 1/1/05 through 12/31/09, with ABC having a 90 day exclusive right of first negotiation commencing on 10/1/08 for renewal of the affiliation agreements with Stations.

500 South Buena Vista Street, Burbank, CA 91521-4408 (818) 460-7550 Fax (818) 460-5234

E-mail: john.l.rouse@abc.com

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Compensation/Co-op Advertising/ESPN-NFL

In accordance with the clearance obligations outlined below, Stations will receive the following compensation on an annual basis. Allocation of compensation will be discussed and agreed to by both parties.

Year	Compensation (1)
*	*

(1) Estimated earned compensation based upon clearance obligations and station rate multiplied by compensation matrix in Schedule A. Includes additional compensation through current affiliation agreement dates for clearances above current obligations. In the event that ABC withdraws programming, earned compensation will be adjusted accordingly (and except as may be required by Sections V.A&B below. Stations will have no further obligation to clear the withdrawn time period(s).)

ABC will offer up to * in annual co-op advertising funds to the station group as a whole, with the amounts to be allocated to individual Stations as determined by Hearst-Argyle with ABC’s consent, said consent not to be unreasonably withheld. Expenditures of these funds will comply with ABC’s co-op advertising guidelines.

ABC agrees with your request for your ABC stations regarding ESPN Sunday Night football games and other sports packages, pending a discussion of rates (to be included as Schedule B). ABC, at its option, may waive all fees in the amount noted in Schedule B for the ESPN games and reduce compensation in Section III.A. above by the same amount or elect to have Stations pay the ESPN game fees in which case ABC will continue to pay the compensation in Section A.

N/AP/Exclusivity

Stations will continue to receive existing first call rights for the analog and digital Network program service against all television broadcast stations in each Station’s city of license. The exclusivity provisions of NAP III will be in effect for analog and digital programming throughout the term of the new agreements. Furthermore, a substantial majority of the analog and digital programming that Network offers to Stations in each daypart in each television season (September-September) will be “first run,” i.e. not previously offered for broadcast on the ABC or another domestic broadcast television network, televised on any domestic cable or satellite channel or any other video delivery system within Stations’ DMA’s; however, this provision does not apply to re-runs of ABC network programs, theatrical movies or Kids programming.

Clearance

Subject only to the exceptions and limitations outlined below and set forth in the FCC Rules (“right to reject”), full clearance of all ABC time periods currently cleared in pattern by each Station as of December 31, 2004, and delayed clearance of Network programs currently delayedby each Station as of December 31, 2004. Stations will not be committed to in-pattern clearance of any program that is not regularly cleared in-pattern by ABC-owned stations; however, this exception does not apply to any existing deviations from in-pattern clearancebythe owned stations and does not apply to after-acquired ABC stations where existing programming commitments preclude  in-pattern clearance of certain network programs. Among other remedies, Stations will not be required to clear a program in-pattern if, after notice from Station and a reasonable opportunity to cure, ABC fails to deliver contractually mandated first call, first run, and exclusivity rights for it.

Stations will clear Jimmy Kimmel Live in-pattern for the term of this agreement, except for KMBC and WISN. KMBC may delay the program by up to 90 minutes. WISN may delay it by up to 60 minutes through 8/31/05, and will then broadcast it on a 30 minute delay. If Jimmy Kimmel is replaced as host of the program, Stations agree to clear on a one time - 13 week test basis any replacement program in the same time period so long as the creative format is similar to other late night entertainment programming. The replacement program may then be cancelled by Stations and the time period recaptured upon 30 days notice from the Station.

*PORTIONS OF THIS AGREEMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT SUBMITTED TO THE SEC FEBRUARY 27, 2006.  WE HAVE FILED THE REDACTED MATERIAL SEPARATELY WITH THE SEC.

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KMBC may continue its current 90 minute delay of Nightline. WISN may continue to delay Nightline by one hour through 8/31/05, but will then broadcast it on a 30 minute delay. However, these stations will not receive incentive inventory for Nightline unless in-pattern clearance is adopted by them.

Except as noted above, Stations will continue to clear Nightline in-pattern for so long as Ted Koppel remains the primary host and the program continues to be titled “Nightline.”  In the event that Ted Koppel is no longer the primary host, then Stations will continue to clear the program (a news program entitled “Nightline”) on a 26 week test basis. Stations may then choose to cancel the program if, at the end of the test period, the program fails to deliver at least 85% of its adult 25-54 audience share among ABC, NBC and CBS stations in the time period (“3 network share”) in each Station’s market as Nightline achieved during the prior year. This calculation will be determined by comparing an average 3 network share from major rating periods during the 26 week test period (i.e. as applicable,November, February, July and/or May) versus the same ratings periods the prior year. Any incentive spots will be withdrawn and no compensation will be paid as a result of a Station’s election to delay or cancel the program.

Stations will clear “The View” live, in-pattern so long as the program is called “The View” and remains similar to the current show airing in the 2003/2004 season. It is understood that a change in talent/hosts does not constitute a change in program format.

Stations agree to clear GMA on Saturday and Sunday beginning on December 18, 2004 in mutually acceptable time periods, WCVB will continue to clear NBA Inside Stuff as presently cleared, and other Stations agree to clear NBA Inside Stuff in mutually acceptable time periods.

Stations will clear 3 hours of FCC-qualifying children’s educational programming Sa / Su 7am-12n and during the ‘04-’05 and ‘05-’06 seasons will  schedule a 4th hour of kids programming in a time period to be determined by Hearst-Argyle.

With respect to the Network program schedule during the term of this Agreement, although the Network is not willing to predict in a single-market contract what specific programs or even types of programs will appear on future Network schedules, the ABC Television Network is committed to and will continue to offer programming to its affiliates of various types that is intended to appeal to broad, mass-market audiences and deliver ratings (in terms of households and /or demographics) that are attractive to national advertisers. The Network’s advertising sales effort currently relies on such a policy, and we have no reason to think that the policy will change during the term of this Agreement.

Subject to the mbps restrictions in the digital provisions of Section XIV below, clearance includes unaltered carriage and pass through of all content contained in the Network feed that is directly and reasonably associated with a Network program or advertisement, is intended to be viewed in conjunction with that program or advertisement, and is designed to attract or maintain television viewership. This includes: (i) all enhanced or interactive program and advertising content (including associated URLs and triggering devices) as well as (ii) closed captioning information, (iii) program id codes, (iv) rating information and data, (v) broadcast flags and watermarks; and (vi) SAP feeds (“Program Related Material”).

Each Station will have a fixed annual number of one time only (OTO) preemptions for use in all dayparts (the “preemption basket”). Subject to adjustment for mutually acceptable makegood arrangement, and subject to the last sentence in this Sec. V(H), Stations will reimburse ABC (via payments or a credit against compensation) for program(s) pre-empted at levels above the contractual preemption basket, contained in Schedule C. The reimbursement shall be an amount equal to twice the compensation that would otherwise be paid for clearance of the preempted program. For any programs that may have booked without compensation, the reimbursement amount shall be twice the amount calculated by applying the Station rate to the applicable time period in the compensation matrix. Preemptions pursuant to the right to reject rule will not be counted against the baskets and will not be subject to the reimbursement, although compensation will not be earned for such preemptions.

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Payment of the reimbursement amount will be the Network’s exclusive remedy for exceeding the preemption basket; however, multiple preemptions of a particular program that constitute a failure to clear that program will still be subject to the program and program series termination remedies as outlined in Section VI.(D) of the current affiliation agreement for WCVB. Moreover, exceeding the basket by more than 20% with non-right to reject preemptions in any one calendar year will be a material breach of the affiliation agreement for which other remedies in the agreement will be available to the Network.

The number of half-hour OTO preemptions in the basket for each Station will be adjusted as follows: 1) the basket for each Station will be reduced in proportion to any reduction in the Station’s existing local or regional sports programming; subject, however, to reinstatement of the preemptions within the basket if the sports programming is restored, and 2) the annual basket for each Station will be increased by one half-hour preemption for each time that there are more than 10 unscheduled Network over runs in sports programs which cause the Station’s weekend early evening news broadcast to be shortened by more than seven and one-half minutes or that cause the Station’s weekend late local news broadcast to be delayed by more than seven and one-half (7½) minutes in a calendar year (unless the over runs or delays were approved or requested by the Station).

Inventory

With respect to local commercial availabilities during Network analog and digital time periods within the existing analog and digital network programming service, the local inventory guarantees of NAP III (excluding the seven additional primetime spots and spots lost if Monday Night Football is not renewed) and all additional  local incentive inventory currently received by Stations by reason of continued in-pattern clearance of programs, including Nightline, The View  and Jimmy Kimmel Live will extend to the Stations’ for the term of the Agreement. The local inventory level shall be subject to adjustment for (a) the number of local units in Network programming that is not cleared by the Station; (b) the number of local units that are lost as a result of sustaining programming (although any reduction in local inventory must be in proportion to the reduction of Network inventory); (c) the number of local units that are lost as a result of special event programming run by the Network in lieu of Network programming that would otherwise bear a more traditional commercial load (although any reduction in local inventory must be in proportion to the reduction in Network inventory for any special event programs that exceed past practices or the number of such programs offered in prior years, unless Stations are otherwise made whole);(d) the number of local units lost as result of a reduction in the amount of Network programming offered; and (e) failure to clear in pattern or the cancellation of Nightline (decrease of four thirty-second units per week). In the event that ABC fails to offer Stations the minimum local inventory, then ABC may elect to make Stations whole for the lost economic value of the inventory (calculated at the date of the shortfall) by offering Stations additional compensation and/or providing other local commercials. This will be Stations’ exclusive remedy if they accept the offer; otherwise all of their remedies will be preserved.

Network commercial inventory load in programs offered to Stations will be no greater in terms of number, placement and duration than the Network commercial inventory load of any Network programs offered to the ABC owned stations.

Promotion

Stations will join the Baseline Promotion Plan (below). Stations will provide 11 spots per day (positions and lengths illustrated below) for promotion of ABC Network programming. ABC shall designate the use of such spots. An illustrative initial designation of Network week day priorities is included below:

ABC Baseline Promotion Weekly Schedule:

5-7am:	2x (:15) supporting GMA
	1x (:15) supporting Prime/Local News
9am-4pm:	1x (:15) supporting The View/Local News
	2x (:15) supporting Prime/Local News

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4-7pm:	1x (:15) supporting WNT
	2x (:15) supporting Prime/Local News
7-8pm:	1x (:30) supporting Prime/Local News
11pm:	1x (:15) supporting Latenight

Stations’ weekend promotional commitment will include four (4) :15’s each day for supporting Prime to air 7am – 7pm (at least one :30 promo to run in prime access) as well as one :15 each day supporting “World News Tonight” in the hour prior to the program.

In return, Stations will have access to 4 additional 30-second primetime spots/wk, as well as the Network’s authorization to convert 7 thirty-second local newsbrief opportunities in primetime to local sale. These spots are currently associated with a station’s commitment to the Affiliate Promotion Swap (APS) plan.

Branding

Stations agree to work in good faith to co-brand with ABC in order to closely link the stations with the Network’s identity. Co-branding encompasses, but is not limited to the inclusion of the ABC corporate logo in the stations’ local identification, and encompasses all on-air (graphics, voice over) and off-air (website, print, cable, radio, outdoor, etc.) promotion. Usage of the ABC corporate logo must be consistent with Network creative guidelines and specifications.

Local News

Stations agree to program Monday-Friday at least one half hour of locally produced news leading into ABC’s currently scheduled GMA morning and currently scheduled World News Tonight evening news programs as well as its late night consistent with the Stations’ current practices; subject however, to each Station’s responsibility under law to determine its programming and the scheduling of its programming. [A sideletter will provide that this next sentence is effective only upon assignment or transfer of the Stations.] However, any reduction in the current amount of local news lead-ins will result in a reduction of the applicable Station’s compensation and/or its preemption basket in an amount to be determined by good faith negotiations of the parties.

NewsOne

Each Station will participate (including making the associated payments at the rate in attached Schedule D) in ABC NewsOne, or any successor affiliate newsgathering service, for the term of its affiliation agreement. Any fee increases for the basic monthly service will be no greater than 3% annually, or the increase in the CPI for the applicable year, whichever is less. Fees for basic NewsOne service will be reduced as necessary to avoid negative Network compensation for any Station. Other provisions ofthe revised NewsOne agreement will be negotiated.

Assignment

The assignment provision incorporated into NAP II will be extended for the full term of the agreement or Stations may opt for the assignment language in the current WCVB affiliation agreement.

Retransmission

With respect to the existing ABC Network television analog service and its DTV equivalent, your Stations will be authorized to grant retransmission consent to cable systems (and other MVPD’s) located within the stations’ DMA and to systems located outside the stations’ DMA if the station is “significantly viewed” (as defined by FCC rules) in the cable community. In the event that Network and Stations agree to pool retransmission rights, then upon mutual agreement Stations shall pay to Network a reasonable share of any fees received directly from cable, satellite and other MPVD’s in exchange for grant of retransmission consent for broadcast affiliates.

Network Non-Duplication

ABC will provide Stations network non-duplication protection for both analog and digital signals 48 hours prior to the live time period designated by the Network for broadcast of that Network program by the Station, and shall

5

end at 12:00 Midnight on the seventh day following that designated time period, consistent with FCC rules, against the importation by cable of a duplicating out-of-market ABC Network program from another ABC affiliated station that has been cleared in-pattern by the Station.

Digital Program Delivery

First Call & Program Clearance. During the term of the affiliation agreement and in exchange for the consideration and other benefits received under it, each Station agrees to become ABC’s primary affiliate in its community of license with respect to the network television programming that ABC distributes in a digital format on a national basis. Each Station agrees to clear, in accordance with the terms and conditions of the affiliation agreement and the first call offer, the simulcast digital feed of the analog programming the Station agrees to clear in Section V, or its equivalent in the event that the Station is required to relinquish its analog spectrum (the “Primary Digital Feed”). In addition, each Station will have the first call against other television stations in its community of license, and against all other video delivery systems within the Station’s DMA, to any additional channel(s) of television programming contained in the Network’s DTV feed on the same terms and conditions as offered tonon-owned or operated ABC broadcast television affiliates generally. In the event that the Station declines or is unable to accept the first call offer for the additional channel of televisionprogramming for any reason, then ABC shall be free to distribute that channel in the Station’s community of license by any available means without being limited by the terms of this agreement.

Broadcast Standards & MBPS Usage. Subject to Section V, each Station agrees to transmit on its Primary DTV channel the Primary Digital Feed of all Network programs, including HDTV programs and Program Related Material, in a technical format consistent with display formats specified within the ATSC standard, and, without alteration, modification, insertion or down conversion of the native display rate, to the extent the transmission does not require more bandwidth than is required for 720p transmissions (“Broadcast Standards”), provided, however, that:

(i)  Each Station need not devote more than 2 mbps on its DTV channel as needed for the broadcast of Program Related Material;

(ii)   Each Station (with the exception of KOAT) shall reserve for its own use at all times no less than 5 mbps of digital bandwidth (“Residual Digital Spectrum”);  and

(iii)  Stations may utilize commercially available compression technology to allow them to reduce the number of mbps needed to broadcast the Primary Network Feed and Program Related Material while otherwise maintaining the Broadcast Standards, without degradation in audio or picture quality detectable to viewers utilizing home digital television receivers and while maintaining the functionality of any Program Related Material. Stations will control the use of any additional capacity made available by the compression technology and all bandwidth of each Station not used by the Primary Digital Feed and Program Related Material as provided above shall revert to and be reserved for use by the Station unless some portion of it is needed to maintain HDTV at Broadcast Standards with up to 2 mbps of Program Related Material.

In the case of KOAT, Albuquerque, the Station will devote no more than 13.39 mbps of digital bandwidth to the broadcast of network programming for the duration of an existing transmission agreement between that Station and a third party. Thus, the remaining 6 mbps of KOAT’s digital signal is reserved for KOAT’s commitment under that agreement but will be reduced to 5 mbps upon expiration of the term of the existing agreement on August 12, 2007.

The Network will offer to each Station its standard reimbursement agreement (as attached hereto) for acquisition of reception equipment that is necessary to receive the Primary Network Feed, any additional channel(s) of digital programming that Station may agree to clear  and all elements of Program Related Material and decoding equipment for each such service within the Network’s DTV feed. The Stations may re-encode Network programming utilizing compression technology, permitted within ATSC specifications and FCC rules in effect at the time, and may allocate the bit rates for services carried consistent with ATSC standards so long as the Broadcast Standards and the functionality of Program Related Material as set forth in paragraph 1(a) above are maintained.

6

In the event that the broadcast of all elements of the Program Related Material and the Primary Digital Feed in accordance with the Broadcast Standards impinges on the 5 mbps local set-aside, then Network will designate which elements of the Program Related Material that Station may delete if necessary to maintain the 5 mbps local set-aside. Stations will cooperate with Network to identify, and discuss with Network in good faith (but with no obligation to reach an agreement) the utilization of, any commercially reasonable alternative means of delivering to viewers any deleted elements of the Program Related Material that otherwise fall within the 2 mbps ceiling. Stations will consider, in good faith, any request by ABC that Program Related Material for a particular program be allowed to occupy more than 2 mbps and that Stations devote more than 14.39 mbps to the broadcast of the Primary Feed with all Program Related Material. To the extent that Station is not utilizing all of its 5 mbps local set-aside, then Station’s consentto this request will not be unreasonably withheld.

Each Station will, within six (6) months following its commencement of broadcasting digital multicast channels, acquire and utilize any commercially reasonable methods (including statistical multiplexing equipment, or other similar equipment  with the same or greater performance characteristics), available now or in the future, that will allow them to broadcast the complete Primary Network Feed, including all elements of Program Related Material (still subject to the 2 mbps ceiling) in a manner consistent with Broadcast Standards while otherwise maintaining the 5 mbps local set-aside.

Residual Digital Spectrum. Each Station agrees not to make any use of its digital spectrum that would interfere with its obligations under this Agreement. For any digital broadcast spectrum that is not needed for full compliance with its obligations as defined above, (i.e. “Residual Digital Spectrum”), Hearst-Arygle agrees to provide reasonable notice to ABC prior to entering into any agreement with a third party for any alternative uses of the Residual Digital Spectrum, if ABC agrees to protect all requested confidentiality. This is not intended to create an option, right of first refusal or right of last negotiation.

Non-Discrimination as to Enhanced and Interactive Television. Subject to the limitations set forth below, Hearst-Argyle shall not disadvantage Network with respect to the 2 mbps limitation applicable to Program Related Material as compared to a broadcast television station which is owned by Hearst-Argyle and which is an affiliate of NBC, CBS, or Fox (each a “Competing Content Provider”). Therefore, if solely as it relates to a DTV channel of a Hearst-Argyle station affiliated with a Competing Content Provider, Hearst Argyle broadcasts any content or materials of a  Competing Content Provider that would constitute Program Related Material hereunder, and such content or materials utilize bandwidth in excess of 2 mbps, then each Station shall make the same opportunity available to Network on non-discriminatory terms, provided that Network agrees to comply with all material terms and conditions applicable to or agreed upon by such Competing Content Provider that are imposed as a directly related condition of the receipt of such rights, provided further that ABC shall not be required to comply with any non-monetary term or condition that renders performance highly impractical or impossible. The provisions of this Section do not require any Station to make available to Network any proprietary interactive technology of a Competing Content Provider. Notwithstanding the foregoing, if (x) upon the entry, renewal or amendment of an affiliation agreement with each of the now current top 3 broadcast television station groups affiliated with Network (inclusive of Hearst-Argyle but exclusive of Network’s owned and operated station group), measured by total television households as then reported by Nielsen Media Research, with an effective date commencing on or after January 1, 2005 or, (y) at any time with respect to Network’s owned and operated broadcast television station group, Network fails to obtain obligations with respect to non-discrimination as to bandwidth limitations on the carriage of content or materials comprising Program Related Materials corresponding to Hearst-Argyle’s foregoing non-discrimination obligations that are at least as favorable to Network, taken as a whole, as the obligations with respect to non-discrimination set forth in this Section (“Network Non-Discrimination Obligations”), then at Hearst-Argyle’s option the Network Non-Discrimination Obligations shall be reduced so as to match the corresponding Network Non-Discrimination Obligations, taken as a whole, it being understood that if Network does not obtain any Network Non-Discrimination Obligations from any one of such top 3 broadcast television station groups or Network’s owned and operated station group then each Station shall similarly have no Network Non-Discrimination Obligations, and it being further understood that the provisions of this sentence shall not apply with respect to an affiliation agreement with any such top 3 broadcast television group or Network’s owned and operated station group to the extent any such affiliation agreement does not place a limit on the pass through of

7

Program Related Material. The provisions of the Section shall not apply to any extension of an agreement granted by Network to such top 3 broadcast station groups for the purpose of permitting additional time for the completion of negotiations of a new agreement or the renewal o an agreement, provided that no individual extension may exceed one year, but there may be more than one extension.

Cross Promotion

The Cross Promotion provision incorporated into N/AP II will be extended for the full term of the agreement.

Miscellaneous

•Current contact language for music license fees (including digital) and indemnification will continue.

•Station rates for calculation of tag and cut-in reimbursement in analog and digital programming will be frozen at the new2005 levels as set forth in Section III.A.

•Upon acquisition of another ABC affiliate, you may request, and ABC will agree, that the provisions of this affiliation agreement apply to the acquired station, except for term, preemption baskets, compensation (including ESPN NFL games), NAP III exclusivity provisions, restrictions on mbps usage of Network programs (including program-relatedmaterial) and out of pattern clearances.

•As provided in N/AP III, Stations’ participation in the SoapNet revenue sharing will continue for the term of the new affiliation agreements.

•Clearance of World News This Morning inserts will continue as per current practices at KOAT, KOCO, WAPT, KETV and at WMTW as stated in the 5/5/05 letter from ABC Affiliate Relations to that station .

•Except as otherwise expressly provided for herein, all provisions of this term sheet apply to both the digital and analog signals of each Station.

Agreed & Accepted:
Hearst-Argyle Television, Inc.				ABC Television Network
By:	/s/ DAVID J. BARRETT			By:	/s/ JOHN L. ROUSE
Title:		PRESIDENT AND CEO		Title:			SVP
Date:			DECEMBER 4, 2005	Date:		12/4/05

8

Schedule A

Station Compensation Rates/Matrix

[To be provided for each Station by ABC and approved by HTV]

THIS SCHEDULE HAS BEEN REDACTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT SUBMITTED TO THE SEC FEBRUARY 27, 2006.  WE HAVE FILED THE REDACTED MATERIAL SEPARATELY WITH THE SEC.

9

Schedule B

ESPN Rates

THIS SCHEDULE HAS BEEN REDACTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT SUBMITTED TO THE SEC FEBRUARY 27, 2006.  WE HAVE FILED THE REDACTED MATERIAL SEPARATELY WITH THE SEC.

10

Schedule C

Pre-Emption Baskets (half-hours annually)

Boston	30
Boston/Manchester	100
Pittsburgh	30
Kansas City	30
Milwaukee	30
W. Palm Beach	30
Oklahoma City	30
Albuquerque	30
Honolulu	30
Omaha	30
Jackson	30
Ft. Smith	100
Portland	100

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Schedule D

NewsOne Station Rate

Station	Weekly Rate
KOAT, Albuquerque	$	1,501.75
WCVB, Boston	$	4,329.36
KHBS/KHOG, Ft. Smith	$	598.69
KITV, Honolulu	$	308.68
WAPT, Jackson	$	500.60
KMBC, Kansas City	$	2,252.63
WMUR, Manchester	$	494.43
WISN, Milwaukee	$	2,290.69
KOCO, Oklahoma City	$	2,100.45
KETV, Omaha	$	1,735.98
WTAE, Pittsburgh	$	3,340.02
WPBF, West Palm	$	1,273.09
WMTW, Portland	$	860.92

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EX-10.5

Exhibit 10.5

AMENDMENT NO. 8 TO SERVICE AGREEMENT

THIS AMENDMENT NO. 8 TO SERVICE AGREEMENT (“Amendment”) is made as of January 1, 2006 by and between THE HEARST CORPORATION, a Delaware corporation (“Hearst”), and HEARST-ARGYLE TELEVISION, INC., a Delaware corporation (the “Company”).

W I T N E S S E T H

WHEREAS, Hearst and the Company entered into a Service Agreement dated as of August 29, 1997 and amended by Amendments Nos.1 through 7 (the “Service Agreement”), pursuant to which Hearst provides certain services to the Company; and

WHEREAS, Hearst and the Company mutually desire to amend the Service Agreement as set forth hereinafter;

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree to amend the Service Agreement as follows:

1. Section 3.1 of the Service Agreement is hereby amended by substituting the date of December 31, 2006 in place and instead of the December 31, 2005 date.

2. Effective January 1, 2006, Schedule 2.1A attached hereto and made a part hereof shall be substituted in place and instead of Schedule 2.1 of the Service Agreement.

3. Effective January 1, 2006, the Service Level Agreement attached as Addendum 1 hereto hereto shall be made a part of the Service Agreement.

4. Hearst Service Center transaction charges for new acquisitions shall be priced using the current transaction rates and estimated volume.

5. Controller’s office, Treasurer’s office and Legal Department charges are annual estimates to service the entire group, these charges are allocations of specific departments’ current year budgets to support the entire company.

6. Except as expressly set forth herein, all terms and conditions of the Service Agreement shall continue in full force and effect.

7. At such time as Hearst no longer provides audit services to the Company, the annual audit assessment fee will be prorated to reduce the assessment to reflect the periods for which service will not be provided.

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first above written.

THE HEARST CORPORATION		HEARST-ARGYLE TELEVISION, INC.
By:	/s/ Ronald Doerfler	By:	/s/ Jonathan C. Mintzer
Dated: February 24, 2006		Dated: February 24, 2006

ADDENDUM 1

SERVICE LEVEL AGREEMENT

The Company and Hearst agree that this Service Level Agreement specifies the standards applicable to the technical services Hearst is to provide to the Company pursuant to the Service Agreement (the “Standards”). These Standards are intended to: (i) enable the Company to understand clearly what level of service to expect from Hearst, (ii) enable Hearst to understand clearly what level of service to provide to the Company, and (iii) define what measures and actions should be taken if that level of service is not provided.

1.Telephone/Help Desk Support. Hearst shall make available via telephone twenty-four (24) hours a day, seven (7) days a week, qualified personnel to advise the Company in connection with any unavailability, malfunction or defect in any of the technical services to be provided under the Service Agreement. Next day response is provided for Level 3 and Level 4 problems.

2.Uptime. The technical services shall be available seven days a week, 365 days a year. The technical services will be accessible to the Company 99.5% of the time overall and at least 99.95% of the time during the normal business hours of between 8:00 a.m. and 5:00 p.m. Eastern Time during each month.

3.Performance. Hearst will host, support, and maintain the technical services in a manner that provides response times consistent with industry standards. Hearst acknowledges that it is hosting mission-critical applications and that it will make provisions to provide adequate band width and highly available hardware width adequate capacity and performance to insure acceptable access and response time for end users. In the event that the delivery or availability of the technical services fail to provide such response times and/or the Company is not otherwise satisfied with the speed and/or the performance of any of the technical services, Hearst will cooperate with the Company to modify the speed and/or performance of the affected service(s) so that response times or functions are delivered to the Company’s reasonable satisfaction.

4.Backup and Redundancy. Hearst shall use commercially reasonable efforts to maintain adequate back-up and restore procedures (e.g., warm and hot back-ups of mission critical hardware, software and application systems) such that corruption or failure of key systems can be restored within a commercially reasonable timeframe. Additionally, Hearst will ensure that a co-location hosting facility is available and that the redundant systems and bandwidth are adequate to ensure continued operation of the technical services in the event of failure.

5.Physical and Data Security. Hearst software and hardware will be located in secured facilities. Hearst shall use commercially reasonable efforts to prevent unauthorized physical or electronic access to the Hearst software and hardware. Hearst shall maintain security controls and access limitations to all network attached devices at all Hearst maintained facilities that are consistent with commercially reasonable best practices within the industry.

6.Monitoring. Hearst shall monitor the performance of the technical services twenty-four hours a day, seven days a week. Hearst shall promptly notify the Company of any bug, outage or other problem it learns of with respect to any of the technical services. Hearst shall make technical personnel available to the Company twenty-four hours per day, seven days per week. Upon learning of or receiving notice of a problem with any service, qualified personnel shall promptly consult with the Company to assign a severity level to the problem as follows:

Severity 1:  A situation in which a service is completely unavailable, and Hearst is unable to resolve or offer an alternative solution to resolve such problems (a “Work Around”) within the Initial Update Period as defined in the chart below.

Severity 2:  A situation in which major functionality of a service is unusable, the loss of functionality materially impacts the operation of the service, and no Work Around is available.

Severity 3:  A situation in which there is a loss of a functionality that does not materially impact the operations or use of the service. Any problem that was originally reported as Severity 1 or Severity 2, but has been temporarily solved with a Work Around, shall be reduced in severity to Severity 3.

Severity 4:  A Severity 4 situation means all other problems, issues and questions regarding a technical service other than those falling within the categories above.

7.Remedying Problems. After classifying the severity of a problem as set forth in Section 6 above, Hearst shall provide the following resources to remedy such problem:

Problem Classification	Telephone Response	“Initial Update Period” to Communicate Action Plan	Action	Time to identify problem and begin working towards resolution
Severity 1	30 minutes	90 minutes	Work continuously until resolved	Immediately
Severity 2	1 Hour	4 Business Hours	Resolve completely as soon as possible	One Business Day
Severity 3	5 Business Hours	2 Business Days	Reasonable action as needed	Within five Business Days
Severity 4	8 Business Hours	5 Business Days	Reasonable action as needed	Within ten Business Days

Business hours are 8:00am until 5:00pm Eastern Time on Monday through Friday.

Unresolved Critical or High Problem Procedures:

Should a Severity 1 or Severity 2 problem not be fixed within the Initial Update Period, Hearst shall dedicate a full-time resource (in-house or third party) qualified to address the situation until resolved. This resource shall provide the Company, at a minimum, with detailed fix plans and twice-daily updates.

If a permanent repair cannot be made, a temporary resolution (bypass and recovery) will be implemented and a permanent repair implemented thereafter as soon as practicable.

8.Factors Beyond Control. Hearst shall not be deemed to have failed to meet a Standard or otherwise be in default of this Agreement to the extent that performance of its obligations or attempts to cure any breach are delayed or prevented by reason of any act of God, fire, natural disaster, accident, act of government, vendor shortages or delays, Internet outages or any other cause beyond the reasonablecontrol of Hearst, provided that Hearst gives the Company written notice thereof promptly and uses reasonable commercial efforts to cure the delay.

EX-10.6

Exhibit 10.6

THIRD EXTENSION OF AMENDED AND RENEWED OPTION AGREEMENT

THIS THIRD EXTENSION OF THE AMENDED AND RENEWED OPTION AGREEMENT is entered into as of the 1st day of January, 2006, by and between The Hearst Corporation (“Hearst”), a Delaware corporation, and Hearst-Argyle Television, Inc. (the “Company”), a Delaware corporation.

W I T N E S S E T H

WHEREAS, Hearst and the Company entered into an Amended and Renewed Option Agreement dated as of August 29, 2000 (the “Amended and Renewed Option Agreement”); and

WHEREAS, Hearst and the Company extended the Amended and Renewed Option Agreement pursuant to an initial Extension and subsequent Second Extension of the Amended and Renewed Option Agreement; and

WHEREAS, Hearst and the Company mutually desire to further extend the Amended and Renewed Option Agreement as set forth hereinafter;

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Amended and Renewed Option Agreement is hereby amended and extended by substituting the date of December 31, 2006 for the date of August 31, 2004 in Section 1 of the Amended and Renewed Option Agreement.

Except as expressly set forth herein, all terms and conditions of the Amended and Renewed Option Agreement shall continue in full force and effect. Unless otherwise defined herein, all capitalized terms shall have their respective meanings as set forth in the Amended and Renewed Option Agreement.

IN WITNESS WHEREOF, the parties have executed this extension of the Amended and Renewed Agreement as of the date first above written.

THE HEARST CORPORATION		HEARST-ARGYLE TELEVISION, INC.
By:	/s/ Ronald Doerfler	By:	/s/ Jonathan C. Mintzer
Dated: February 24, 2006		Dated: February 24, 2006

EX-10.7

Exhibit 10.7

THIRD EXTENSION OF AMENDED STUDIO LEASE AGREEMENT

THIS THIRD EXTENSION OF THE AMENDED STUDIO LEASE AGREEMENT (“Amendment”) is made as of January 1, 2006 by and between THE HEARST CORPORATION, a Delaware corporation (“Hearst”), and HEARST-ARGYLE TELEVISION, INC., a Delaware corporation (the “Company”).

W I T N E S S E T H

WHEREAS, Hearst and the Company entered into a Studio Lease Agreement dated as of August 29, 1997 (the “Studio Lease Agreement”), pursuant to which the Company leased to Hearst the Leased Premises (as defined in the Studio Lease Agreement);

WHEREAS, Hearst and the Company entered into an Amendment to Studio Lease Agreement dated as of August 29, 2000 (the “Amended Studio Lease Agreement”);

WHEREAS, Hearst and the Company extended the term of the Amended Studio Lease Agreement pursuant to an initial Extension and a subsequent Second Extension of the Amended Studio Lease Agreement; and

WHEREAS, Hearst and the Company mutually desire to further extend the term of the Amended Studio Lease Agreement, as set forth hereinafter;

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Amended Studio Lease Agreement as so amended is hereby extended by substituting the date of December 31, 2006 for the date of August 31, 2004 in paragraph 2 (Term of Lease) in the Studio Lease Agreement as so amended.

Except as expressly set forth herein, all terms and conditions of the Studio Lease Agreement as so amended shall continue in full force and effect.

IN WITNESS WHEREOF, the parties have executed this extension of the Studio Lease Agreement as so amended as of the date first above written.

IN WITNESS WHEREOF, the parties have executed this extension of the Studio Lease Agreement as so amended as of the date first above written.

THE HEARST CORPORATION		HEARST-ARGYLE TELEVISION, INC.
By:	/s/ Ronald Doerfler	By:	/s/ Jonathan C. Mintzer
Dated: February 24, 2006		Dated: February 24, 2006

EX-10.8

Exhibit 10.8

AMENDED AND RESTATED RETRANSMISSION RIGHTS AGENCY AGREEMENT

January 29, 2006

Hearst-Argyle Television, Inc.

888 Seventh Avenue, 27th Floor

New York, New York 10106

Re:  Retransmission Rights Agency Agreement

Ladies/Gentlemen:

This agreement (the “Agreement”) sets forth the mutual agreements between Lifetime  Entertainment Services (“Lifetime”) and Hearst-Argyle Television Inc. (“Hearst” or “HTV”) regarding the negotiation and grant of retransmission consent under the 1992 Cable Act, as amended (the “Cable Act”) to certain cable systems and certain other television distribution facilities as set forth in Appendix A with respect to the broadcast television station(s) set forth in Paragraph 1(b) below hereto (the “Stations”) in connection with carriage agreements for Lifetime’s satellite-delivered programming services. Upon execution by Hearst and Lifetime this Agreement shall replace the Retransmission Rights Agency Agreement dated June 30, 2004 between the parties.

1.GRANT OF AUTHORITY.

(a)Except as otherwise provided for herein, Hearst hereby authorizes Lifetime, during the Term, to conduct negotiations for agreements on Hearst’s behalf and as its agent on an exclusive basis in connection with the grant of retransmission consent rights for the free, over-the-air, video and audio analog and digital broadcast signals of the Stations (but not for any video or audio program or other services offered on an encrypted paid subscription basis or for reuse on a video on demand basis nor any data services other than program-related material as approved by Hearst, which rights shall be retained by Hearst). Retransmission consent rights for the Stations may be offered by Lifetime to the following multichannel video programming distributors (“MVPDs”) listed on Appendix A:  (i) cable television system operators (“Cable Operators”), (ii) satellite distributors (“DBS Operators”), and (iii) SMATV, MDS and MMDS operators (collectively, “Other MVPDs”). Retransmission consent rights for distribution of the Stations by alternate technologies (such as VDSL) may be offered by Lifetime to those MVPDs which are expressly identified on Appendix A as distributing programming by such alternate technologies as of the date of this Agreement (“Current Alternate Technology MVPDs”).

(b)The right to negotiate retransmission consent agreements shall be with MVPDs which own or manage systems or other facilities serving customers located either (i) within the applicable Designated Market Area (as defined by Nielsen Media Research) (“DMA”) of the applicable Station, (ii) to the extent it is within the limits of the MVPD’s compulsory copyright license and authorized by the Station’s program supplier’s rights agreement, outside the DMA, in each community where the applicable Station is “significantly viewed” (as such term may be defined in the rules and regulations of the Federal Communications Commission (“FCC”)) and (iii) to the extent it is within the limits of the MVPD’s compulsory copyright license and authorized by the Station’s program supplier’s rights agreement, outside of such DMA, where

the Station has been historically carried. Lifetime hereby agrees to use commercially reasonable efforts to secure on Hearst’s behalf retransmission agreements with MVPDs in accordance with the provisions hereof.

(c)The parties agree that Appendix A shall be deemed amended to include additional Cable Operators and Other MVPDs that:  (i) build or acquire systems that meet the criteria set forth in clauses (b)(i), (b)(ii) and (b)(iii) above subsequent to the date of this Agreement; and (ii) new legal entities resulting from the merger, consolidation or sale of a MVPD. New MVPDs other than Cable Operators that meet the criteria set forth in (b)(i), (b)(ii) and (b)(iii) above will be deemed added to Appendix A unless Hearst notifies Lifetime of its objection to such addition within fifteen days after notice to Hearst from Lifetime of such MVPD’s request for retransmission rights. Notwithstanding anything herein to the contrary, except with respect to those Current Alternate Technology MVPDs expressly identified on Appendix A or otherwise agreed by Hearst pursuant to the procedure set forth in this subsection (c), Lifetime’s authority hereunder shall not include authority to negotiate the retransmission of the Stations on or by the Internet, the worldwide web, telephone or DSL Lines or any other means or methods of distribution other than cable, SMATV, MDS and MMDS.

(d)Notwithstanding anything herein to the contrary, it is agreed that (i) the terms and conditions of a MVPD’s retransmission consent rights agreement for each Station shall be as contained in the Will Carry Agreement executed by Hearst for that Station, and to the extent the terms and conditions of that Will Carry Agreement may be inconsistent with any provision herein, the Will Carry Agreement will control and (ii) if, by September 1, 2005, Lifetime shall not have negotiated a Will Carry Agreement acceptable to Hearst with respect to any Station which, as of the date of this Agreement, is being carried by a MVPD pursuant to an existing election by Hearst for carriage on a “must carry” basis, Hearst may, at its option, elect “must carry” for that Station and that MVPD, and Hearst will give notice thereof to Lifetime.

(e)*

*This Paragraph has been redacted pursuant to a request for confidential treatment submitted to the SEC on February 27, 2006.  We have filed the redacted material separately with the SEC.

2

(f)Except as otherwise set forth in or contemplated by this Agreement, and without limiting the generality of the exclusive grant of authority to Lifetime as set forth in Paragraphs 1(a)  through (1)(e) above during the Term (as defined below), Hearst shall not grant to any other person or entity any right to negotiate any retransmission consent right of Hearst with respect to the Stations for the MVPDs and, subject to its licensee responsibilities under law to control at all times the operation of its Stations, neither Hearst nor any Station shall enter into any retransmission consent agreement with any MVPD, except as otherwise provided for herein.

2.TERM OF AGREEMENT.

(a)Subject to Paragraph 5, the term (“Term”) of Lifetime’s rights to represent Hearst in accordance with the terms of this Agreement  in connection with Hearst’s retransmission consent rights shall expire as of the following dates:  With respect to *                        ; with respect to *                         , with respect to *                          ; with respect to all other Cable Operators and Other MVPDs, *      years after the expiration of the term of the current Will Carry Agreement with the applicable MVPD, but in no event beyond *               . (“*       ” is defined, for purposes of this Agreement, as *                                    or any cable television system, MVPD or other entity owned, managed, controlling or controlled by or under common control with *       , including but not limited to *                                                             )

(b)Notwithstanding the foregoing, the expiration of the Term shall not affect the parties’ respective rights and obligations hereunder with respect to any Will Carry Agreement entered into during the Term to the extent that such Will Carry Agreement expires or terminates subsequent to the expiration or termination of the Term. Expiration of the Term shall not relieve Lifetime of its obligations to make all payments otherwise due to be made to Hearst herein.

(c)Notwithstanding any provision of this Agreement to the contrary, except as otherwise agreed by the parties, Lifetime shall have no  rights to represent Hearst with respect to any extension or renewal of the term of any Will Carry Agreement with any MVPD entered into by Hearst hereunder or with respect to any replacement or successor Will Carry Agreement with any MVPD. Lifetime’s rights to represent Hearst in accordance with the terms of this Agreement in connection with Hearst’s retransmission consent rights with respect to any MVPD shall terminate upon the commencement of the original term of a Will Carry Agreement entered into by Hearst hereunder with that MVPD; provided, however, that Lifetime may represent Hearst with the extension or renewal of the Will Carry Agreement with *                            and *                       for a term which will expire no later than *                 .

3.RETRANSMISSION CONSENT AND NETWORK AGREEMENTS

(a)Retransmission consent for the applicable Station will be granted by Hearst pursuant to the Will Carry Agreement referred to in subsection (b) below to MVPDs who agree to carriage of one or more Networks (which may be pursuant to extensions or renewals of existing Network agreements). Each agreement, extension or renewal between a MVPD and Lifetime for carriage of one or more of the Networks is referred to herein as a “Network Agreement”.

*Portions of this agreement have been redacted pursuant to a request for confidential treatment submitted to the SEC February 27, 2006.  We have filed the redacted material separately with the SEC.

3

(b)In connection with the retransmission consent provisions relating to the Stations to be negotiated by Lifetime, Lifetime will utilize a “Will Carry Agreement” as approved by Hearst for each Cable Operator, each DBS Operator, and each other MVPD. All Will Carry Agreements must be satisfactory to Hearst, including, but not limited to, the extent of analog and digital bandwidth retransmitted, channel carriage, tier placement, restrictions, if any, on program or other content. * Lifetime acknowledges that, unless Hearst agrees otherwise, all Will Carry Agreements will contain provisions regarding channel position, subscriber penetration and manner of carriage rights no less favorable for the Station(s) than the rights such Station(s) would have if it were carried by such Systems pursuant to the “must carry” rules of the FCC. *

(c)*

*Portions of this agreement have been redacted pursuant to a request for confidential treatment submitted to the SEC February 27, 2006.  We have filed the redacted material separately with the SEC.

4

4.COMPENSATION TO HEARST.

(a)Subject to Paragraph 5, for conducting retransmission consent negotiations for the Stations, Hearst will pay Lifetime an annual fee (the “Negotiation Fee”) in the amount of *            on *                        ; a like amount on *                        ; and a like amount on *                        .

(b)In consideration of Hearst’s grant of authority to negotiate retransmission consent rights in connection with one or more executed Network Agreements, Lifetime will pay Hearst:

(i)*

(ii)*

*Portions of this agreement have been redacted pursuant to a request for confidential treatment submitted to the SEC February 27, 2006.  We have filed the redacted material separately with the SEC.

5

(iii)*

(iv)*

(c)*

5.TERMINATION/EXTENSION OF AUTHORIZATION.

(a)If a Will Carry Agreement with a DBS Operator has not been successfully negotiated within *        following the expiration date of the DBS Operator’s  agreement, as in effect on the date of this Agreement, then the right to negotiate that Will Carry Agreement may revert to Hearst at Hearst’s election and Lifetime shall have no payment obligation as to such DBS Operator, nor shall Hearst have any obligation to Lifetime with respect to such DBS Operator.

(b)If a Will Carry Agreement with a Cable Operator or Other MVPD has not been successfully negotiated within *         following the expiration of the Cable Operator’s or such

*Portions of this agreement have been redacted pursuant to a request for confidential treatment submitted to the SEC February 27, 2006.  We have filed the redacted material separately with the SEC.

6

Other MVPD’s  agreement, as in effect on the date of this Agreement, then the right to negotiate that Will Carry Agreement may revert to Hearst at Hearst’s election and Lifetime shall have no payment obligation as to such Cable Operator or such Other MVPD, nor shall Hearst have any obligation to Lifetime with respect thereto.

6.NO LIABILITY; INDEMNIFICATION.

Neither party shall have any responsibility or liability to the other party in the event that any negotiations authorized hereunder do not result in an agreement, or with respect to the terms or provisions of any agreement with a MVPD entered into in accordance with the terms provided herein. Neither party shall have any liability to the other party in the event of a breach, default or termination of any Network Agreement (including any retransmission consent provisions relating thereto). Each party shall indemnify and hold the other party harmless from and against any and all claims by third parties, and any liabilities, costs and expenses relating thereto, arising from such party’s actions in the performance of this Agreement. The provisions of this Section 6 shall survive termination of this Agreement and/or termination or rescission of the agency authorizations granted herein.

7.NOTICES.

All notices required to be given hereunder shall be given in writing and sent by mail, electronic facsimile device, courier service, express mail service or personally delivered to the respective addresses of Lifetime and Hearst as set forth below (or such other address as such party may designate from time to time by notice to the other):

If to Lifetime:	Lifetime Entertainment Services
	2049 Century Park East
	Suite 840
	Los Angeles, California 90067
	Attention: Executive Vice Pres., Distribution and Business Development
with a copy to:	Lifetime Television
	309 West 49th Street, 16th Floor
	New York, New York 10019
	Attention: Senior Vice Pres., Business and Legal Affairs
If to Hearst:	Hearst-Argyle Television, Inc.
	888 Seventh Avenue
	New York, New York 10106
	Attention: Chief Legal Officer
with a copy to:	Hearst-Argyle Television, Inc.
	888 Seventh Avenue
	New York, New York 10106
	Attention: General Counsel

7

Notice given by mail shall be effective five (5) days after the date of mailing, postage prepaid certified or registered mail; notice by electronic facsimile device shall be effective upon confirmation of receipt; notice by personal delivery, courier service or express mail service shall be effective upon delivery.

8.ASSIGNMENT.

(a)In the event of a transfer of all or substantially all of a party’s assets, this Agreement shall be assigned to the transferee and consent of the other party shall not be required. In all other circumstances, neither party may assign or transfer this Agreement without the prior written consent of the other. An assignment or transfer in violation of this provision shall be null and void ab initio.

(b)Transfer Of Station(s). In the event that Hearst proposes to sell or transfer ownership or control of one or more Stations, Hearst shall notify Lifetime in writing within thirty (30) days after entering into an agreement for such sale or transfer. Upon the consummation of such assignment or transfer, Lifetime’s authority to negotiate retransmission consent rights for that Station(s) shall terminate.

(i)*

(ii)*

9.CONFIDENTIALITY.

Each party agrees not to disclose to any person or entity the existence or terms of this Agreement unless the other party consents to that disclosure in advance except as may be required by law or by the rules of any exchange or market on which Hearst securities are listed. The parties will cooperate in the preparation of any press release regarding this Agreement. Additionally, Lifetime hereby agrees to be bound by any confidentiality provisions of any Will Carry Agreement. Notwithstanding anything to the contrary contained in this Section 9,

*Portions of this agreement have been redacted pursuant to a request for confidential treatment submitted to the SEC February 27, 2006.  We have filed the redacted material separately with the SEC.

8

Lifetime agrees that: (i) all past public disclosures by Hearst of the terms of this Agreement were made in compliance with the provisions of this Section 9 (and any future disclosures which contain substantially the same information, with adjustments of the dollar amounts to reflect actual payments made by Lifetime to Hearst, will also be deemed to be in compliance with the provisions of this Section 9); (ii) any public disclosures of the terms of this Agreement made on and after the date hereof, substantially in the form attached hereto as Appendix G, comply with the provisions of this Section 9 (it being agreed that such disclosures may contain some or all of the information contained in Appendix G); and (iii) Hearst will file a copy of this Agreement as part of its public reports filed with the Securities and Exchange Commission (“SEC”) and, although Hearst will request confidential treatment for the names of the various MVPDs contained herein and the dollar amounts referred to herein, there can be no assurance that the SEC will not require Hearst to disclose publicly such matters and any such disclosure will be deemed to comply with the provisions of this Section 9.

10.GENERAL.

This Agreement shall constitute a valid and binding agreement with respect to all of the matters set forth herein. This Agreement shall be construed in accordance with the internal laws of the State of New York and, where applicable, the rules and regulations of the Federal Communications Commission. Should any part of this Agreement become inconsistent with the rules of the FCC or agreed upon governing law and the parties are not the beneficiaries of an appropriate waiver, that part of the Agreement shall terminate as of the date that such an inconsistency exists, but all other parts of the Agreement shall remain in full force and effect. In such event, the parties shall use their good faith efforts to modify this Agreement so as to conform it with the applicable FCC rule, policy, or law, if possible, while achieving their respective objectives under this Agreement. Lifetime further agrees that the retransmission consent negotiations for each Station will be conducted in accord with all applicable federal and state laws, including 47 C.F.R. §76.64 and §76.65 of the rules of the FCC, a copy of which is attached as Appendix D.

9

11.2000 AGREEMENT; MODIFICATIONS.

All of the obligations of the parties under the March 8, 2000 agreement as extended between the parties (the “2000 Agreement”) are not superseded by this Agreement and shall continue in full force and effect including Lifetime’s obligation to pay Hearst all fees provided for under the 2000 Agreement. Except as otherwise provided for herein, any grant of retransmission consent rights to a MVPD after the date of this Agreement shall be governed by the terms of this Agreement, except that grants of such rights for MVPDs listed on Appendix E through December 31, 2005, shall continue to be governed by the terms of the 2000 Agreement. This Agreement may not be amended or modified except by a writing executed by the parties hereto.

If the foregoing comports with your understanding, please sign and return the enclosed duplicate copy of this letter.

			LIFETIME ENTERTAINMENT SERVICES
			By:	/s/ LOUISE HENRY BRYSON
Acknowledged and agreed to
This 31st day of January, 2006
HEARST-ARGYLE TELEVISION, INC.
By:	/s/ STEVEN A. HOBBS
Name:		STEVEN A. HOBBS
Title:		EXECUTIVE VICE PRESIDENT,
		CHIEF LEGAL AND DEVELOPMENT OFFICER

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APPENDIX A

CABLE OPERATORS

THIS SCHEDULE HAS BEEN REDACTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT SUBMITTED TO THE SEC FEBRUARY 27, 2006.  WE HAVE FILED THE REDACTED MATERIAL SEPARATELY WITH THE SEC.

APPENDIX B

HEARST STATIONS

As of 01/01/06

Call	Channel	City of License	Licensee
KCCI(TV)	8	Des Moines, Iowa	Des Moines Hearst-Argyle Television, Inc.
KCRA-TV	3	Sacramento, California	Hearst-Argyle Stations, Inc.
KCWE-TV	29	Kansas City, Missouri	KCWE-TV, Inc.
KETV(TV)	7	Omaha, Nebraska	KETV Hearst-Argyle Television, Inc.
KHBS(TV)	40	Fort Smith, Arkansas	KHBS Hearst-Argyle Television, Inc.
KHOG-TV	29	Fayetteville, Arkansas	KHBS Hearst-Argyle Television, Inc.
KHVO(TV)	13	Hilo, Hawaii	Hearst-Argyle Stations, Inc.
KITV(TV)	4	Honolulu, Hawaii	Hearst-Argyle Stations, Inc.
KMAU(TV)	12	Wailuku, Hawaii	Hearst-Argyle Stations, Inc.
KMBC-TV	9	Kansas City, Missouri	KMBC Hearst-Argyle Television, Inc.
KOAT-TV	7	Albuquerque, New Mexico	KOAT Hearst-Argyle Television, Inc.
KOCO-TV	5	Oklahoma City, Oklahoma	Ohio/Oklahoma Hearst-Argyle Television, Inc.
KOCT(TV)	6	Carlsbad, New Mexico	KOAT Hearst-Argyle Television, Inc.
KOFT-DT	8	Farmington, New Mexico	KOAT Hearst-Argyle Television, Inc.
KOVT(TV)	10	Silver City, New Mexico	KOAT Hearst-Argyle Television, Inc.
KQCA(TV)	58	Stockton, California	Hearst-Argyle Stations, Inc.
KSBW(TV)	8	Salinas, California	Hearst-Argyle Stations, Inc.
WAPT(TV)	16	Jackson, Mississippi	WAPT Hearst-Argyle Television, Inc.
WBAL-TV	11	Baltimore, Maryland	WBAL-TV Hearst-Argyle Television, Inc.
WCVB-TV	5	Boston, Massachusetts	WCVB Hearst-Argyle Television, Inc.
WDSU(TV)	6	New Orleans, Louisiana	New Orleans Hearst-Argyle Television, Inc.
WESH(TV)	2	Daytona Beach, Florida	Orlando Hearst-Argyle Television, Inc.
WGAL(TV)	8	Lancaster, Pennsylvania	WGAL Hearst-Argyle Television, Inc.
WISN-TV	12	Milwaukee, Wisconsin	WISN Hearst-Argyle Television, Inc.
WLKY-TV	32	Louisville, Kentucky	WLKY Hearst-Argyle Television, Inc.
WLWT(TV)	5	Cincinnati, Ohio	Ohio/Oklahoma Hearst-Argyle Television, Inc.
WMOR-TV	32	Lakeland, Florida	WMOR-TV Company
WMTW-TV	8	Poland Spring, Maine	Hearst-Argyle Properties, Inc.
WMUR-TV	9	Manchester, New Hampshire	Hearst-Argyle Properties, Inc.
WNNE-TV	31	Hartford, Vermont	Hearst-Argyle Stations, Inc.
WPBF(TV)	25	Tequesta, Florida	WPBF-TV Company
WPTZ(TV)	5	North Pole, New York	Hearst-Argyle Stations, Inc.
WTAE-TV	4	Pittsburgh, Pennsylvania	WTAE Hearst-Argyle Television, Inc.
WXII-TV	12	Winston-Salem, North Carolina	WXII Hearst-Argyle Television, Inc.
WYFF(TV)	4	Greenville, South Carolina	WYFF Hearst-Argyle Television, Inc.

APPENDIX C

THIS SCHEDULE HAS BEEN REDACTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT SUBMITTED TO THE SEC FEBRUARY 27, 2006.  WE HAVE FILED THE REDACTED MATERIAL SEPARATELY WITH THE SEC.

APPENDIX C-I

THIS SCHEDULE HAS BEEN REDACTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT SUBMITTED TO THE SEC FEBRUARY 27, 2006.  WE HAVE FILED THE REDACTED MATERIAL SEPARATELY WITH THE SEC.

APPENDIX D

FCC RULES

§ 76.64 Retransmission consent.

(a) After 12:01 a.m. on October 6, 1993, no multichannel video programming distributor shall retransmit the signal of any commercial broadcasting station without the express authority of the originating station, except as provided in paragraph (b) of this section.

(b) A commercial broadcast signal may be retransmitted without express authority of the originating station if—

(1) The distributor is a cable system and the signal is that of a commercial  television station (including a low-power television station) that is being carried pursuant to the Commission’s must-carry rules set forth in § 76.56;

(2) The multichannel video programming distributor obtains the signal of a superstation that is distributed by a satellite carrier and the originating station was a superstation on May 1, 1991, and the distribution is made only to areas outside the local market of the originating station; or

(3) The distributor is a satellite carrier and the signal is transmitted directly to a home satellite antenna, provided that:

(i) The broadcast station is not owned or operated by, or affiliated with, a broadcasting network and its signal was retransmitted by a satellite carrier on May 1, 1991, or

(ii) The broadcast station is owned or operated by, or affiliated with a broadcasting network, and the household receiving the signal is an unserved household.

(c) For purposes of this section, the following definitions apply:

(1) A satellite carrier is an entity that uses the facilities of a satellite or satellite service licensed by the Federal Communications Commission, to establish and operate a channel of communications for point-to-multipoint distribution of television station signals, and that owns or leases a capacity or service on a satellite in order to provide such point-to-multipoint distribution, except to the extent that such entity provides such distribution pursuant to tariff under the Communications Act of 1934, other than for private home viewing;

(2) A superstation is a television broadcast station other than a network station, licensed by the Federal Communications Commission that is secondarily transmitted by a satellite carrier;

(3) An unserved household with respect to a television network is a household that

(i) Cannot receive, through the use of a conventional outdoor rooftop receiving antenna, an over-the-air signal of grade B intensity of a primary network station affiliated with that network, and

(ii) Has not, within 90 days before the date on which that household subscribes, either initially or on renewal, received secondary transmissions by a satellite carrier of a network station affiliated with that network, subscribed to a cable system that provides the signal of a primary network station affiliated with the network.

(4) A primary network station is a network station that broadcasts or rebroadcasts the basic programming service of a particular national network;

(5) The terms “network station,” and “secondary transmission” have the meanings given them in 17 U.S.C. 111(f).

(d) A multichannel video program distributor is an entity such as, but not limited to, a cable operator, a BRS/EBS provider, a direct broadcast satellite service, a television receive-only satellite program distributor, or a satellite master antenna television system operator, that makes available for purchase, by subscribers or customers, multiple channels of video programming.

(e) The retransmission consent requirements of this section are not applicable to broadcast signals received by master antenna television facilities or by direct over-the-air reception in conjunction with the provision of service by a multichannel video program distributor provided that the multichannel video program distributor makes reception of such signals available without charge and at the subscribers option and provided further that the antenna facility used for the reception of such signals is either owned by the subscriber or the building owner; or under the control and available for purchase by the subscriber or the building owner upon termination of service.

(f) Commercial television stations are required to make elections between retransmission consent and must-carry status according to the following schedule:

(1) The initial election must be made by June 17, 1993.

(2) Subsequent elections must be made at three year intervals; the second election must be made by October 1, 1996 and will take effect on January 1, 1997; the third election must be made by October 1, 1999 and will take effect on January 1, 2000, etc.

(3) Television stations that fail to make an election by the specified deadline will be deemed to have elected must carry status for the relevant three-year period.

(4) New television stations and stations that return their analog spectrum allocation and broadcast in digital only shall make their initial election any time between 60 days prior to commencing broadcast and 30 days after commencing broadcast or commencing

broadcasting in digital only; such initial election shall take effect 90 days after it is made.

(5) Television broadcast stations that become eligible for must carry status with respect to a cable system or systems due to a change in the market definition may, within 30 days of the effective date of the new definition, elect must-carry status with respect to such system or systems. Such elections shall take effect 90 days after they are made.

(g) If one or more franchise areas served by a cable system overlaps with one or more franchise areas served by another cable system, television broadcast stations are required to make the same election for both cable systems.

(h) On or before each must-carry/retransmission consent election deadline, each television broadcast station shall place copies of all of its election statements in the station’s public file, and shall send via certified mail to each cable system in the station’s defined market a copy of the station’s election statement with respect to that operator.

(i) Notwithstanding a television station’s election of must-carry status, if a cable operator proposes to retransmit that station’s signal without according the station must-carry rights (i.e., pursuant to § 76.56(e)), the operator must obtain the station’s express authority prior to retransmitting its signal.

(j) Retransmission consent agreements between a broadcast station and a multichannel video programming distributor shall be in writing and shall specify the extent of the consent being granted, whether for the entire signal or any portion of the signal. This rule applies for either the analog or the digital signal of a television station.

(k) A cable system commencing new operation is required to notify all local commercial and noncommercial broadcast stations of its intent to commence service. The cable operator must send such notification, by certified mail, at least 60 days prior to commencing cable service. Commercial broadcast stations must notify the cable system within 30 days of the receipt of such notice of their election for either must-carry or retransmission consent with respect to such new cable system. If the commercial broadcast station elects must-carry, it must also indicate its channel position in its election statement to the cable system. Such election shall remain valid for the remainder of any three-year election interval, as established in § 76.64(f)(2). Noncommercial educational broadcast stations should notify the cable operator of their request for carriage and their channel position. The new cable system must notify each station if its signal quality does not meet the standards for carriage and if any copyright liability would be incurred for the carriage of such signal. Pursuant to § 76.57(e), a commercial broadcast station which fails to respond to such a notice shall be deemed to be a must-carry station for the remainder of the current three-year election period.

(l) Exclusive retransmission consent agreements are prohibited. No television broadcast station shall make or negotiate any agreement with one multichannel video programming distributor for carriage to the exclusion of other multichannel video programming distributors. This paragraph shall terminate at midnight on December 31, 2009.

(m) A multichannel video programming distributor providing an all-band FM radio broadcast service (a service that does not involve the individual processing of specific broadcast signals) shall obtain retransmission consents from all FM radio broadcast stations that are included on the service that have transmitters located within 92 kilometers (57 miles) of the receiving antenna for such service. Stations outside of this 92 kilometer (57 miles) radius shall be presumed not to be carried in an all-band reception mode but may affirmatively assert retransmission consent rights by providing 30 days advance notice to the distributor.

Note 1 to § 76.64: Section 76.1608 provides notification requirements for a cable system that changes its technical configuration in such a way as to integrate two formerly separate cable systems.

[58 FR 17363, April 2, 1993; 58 FR 53429, Oct. 15, 1993; 59 FR 62345, Dec. 5, 1994; 65 FR 15575, March 23, 2000; 65 FR 53615, Sept. 5, 2000; 66 FR 16553, March 26, 2001; 66 FR 48981, Sept. 25, 2001; 67 FR 17015, April 9, 2002; 69 FR 72045, Dec. 10, 2004; 70 FR 40224, July 13, 2005]

§ 76.65 Good faith and exclusive retransmission consent complaints.

(a) Duty to negotiate in good faith. Television broadcast stations and multichannel video programming distributors shall negotiate in good faith the terms and conditions of retransmission consent agreements to fulfill the duties established by section 325(b)(3)(C) of the Act; provided, however, that it shall not be a failure to negotiate in good faith if:

(1) The television broadcast station proposes or enters into retransmission consent agreements containing different terms and conditions, including price terms, with different multichannel video programming distributors if such different terms and conditions are based on competitive marketplace considerations; or

(2) The multichannel video programming distributor enters into retransmission consent agreements containing different terms and conditions, including price terms, with different broadcast stations if such different terms and conditions are based on competitive marketplace considerations. If a television broadcast station or multichannel video programming distributor negotiates in accordance with the rules and procedures set forth in this section, failure to reach an agreement is not an indication of a failure to negotiate in good faith.

(b) Good faith negotiation.

(1) Standards. The following actions or practices violate a broadcast television station’s or multichannel video programming distributor’s (the “Negotiating Entity”) duty to negotiate retransmission consent agreements in good faith:

(i) Refusal by a Negotiating Entity to negotiate retransmission consent;

(ii) Refusal by a Negotiating Entity to designate a representative with authority to make binding representations on retransmission consent;

(iii) Refusal by a Negotiating Entity to meet and negotiate retransmission consent at reasonable times and locations, or acting in a manner that unreasonably delays retransmission consent negotiations;

(iv) Refusal by a Negotiating Entity to put forth more than a single, unilateral proposal;

(v) Failure of a Negotiating Entity to respond to a retransmission consent proposal of the other party, including the reasons for the rejection of any such proposal;

(vi) Execution by a Negotiating Entity of an agreement with any party, a term or condition of which, requires that such Negotiating Entity not enter into a retransmission consent agreement with any other television broadcast station or multichannel video programming distributor; and

(vii) Refusal by a Negotiating Entity to execute a written retransmission

consent agreement that sets forth the full understanding of the television broadcast station and the multichannel video programming distributor.

(2) Totality of the circumstances. In addition to the standards set forth in § 76.65(b)(1), a Negotiating Entity may demonstrate, based on the totality of the circumstances of a particular retransmission consent negotiation, that a television broadcast station or multichannel video programming distributor breached its duty to negotiate in good faith as set forth in § 76.65(a).

(c) Good faith negotiation and exclusivity complaints. Any television broadcast station or multichannel video programming distributor aggrieved by conduct that it believes constitutes a violation of the regulations set forth in this section or § 76.64(l) may commence an adjudicatory proceeding at the Commission to obtain enforcement of the rules through the filing of a complaint. The complaint shall be filed and responded to in accordance with the procedures specified in § 76.7.

(d) Burden of proof. In any complaint proceeding brought under this section, the burden of proof as to the existence of a violation shall be on the complainant.

(e) Time limit on filing of complaints. Any complaint filed pursuant to this subsection must be filed within one year of the date on which one of the following events occurs:

(1) A complainant enters into a retransmission consent agreement with a television broadcast station or multichannel video programming distributor that the complainant alleges to violate one or more of the rules contained in this subpart; or

(2) A television broadcast station or multichannel video programming distributor engages in retransmission consent negotiations with a complainant that the complainant alleges to violate one or more of the rules contained in this subpart, and such negotiation is unrelated to any existing contract between the complainant and the television broadcast station or multichannel video programming distributor; or

(3) The complainant has notified the television broadcast station or multichannel video programming distributor that it intends to file a complaint with the Commission based on a request to negotiate retransmission consent that has been denied, unreasonably delayed, or unacknowledged in violation of one or more of the rules contained in this subpart.

(f) Termination of rules. This section shall terminate at midnight on December 31, 2009.

[65 FR 15575, March 23, 2000; 68 FR 52127, Sept. 2, 2003; 70 FR 40224, July 13, 2005]

§ 76.66 Satellite broadcast signal carriage.

(a) Definitions—

(1) Satellite carrier. A satellite carrier is an entity that uses the facilities of a satellite or satellite service licensed by the Federal Communications Commission, and operates in the Fixed-Satellite Service under part 25 of title 47 of the Code of Federal Regulations or the Direct Broadcast Satellite Service under part 100 of title 47 of the Code of Federal Regulations, to establish and operate a channel of communications for point-to-multipoint distribution of television station signals, and that owns or leases a capacity or a service on a satellite in order to provide such point-to-multipoint distribution, except to the extent that such entity provides such distribution pursuant to tariff under the Communications Act of 1934, other than for private home viewing.

(2) Secondary transmission. A secondary transmission is the further transmitting of a primary transmission simultaneously with the primary transmission.

(3) Subscriber. A subscriber is a person who receives a secondary transmission service from a satellite carrier and pays a fee for the service, directly or indirectly, to the satellite carrier or to a distributor.

(4) Television broadcast station. A television broadcast station is an over-the-air commercial or noncommercial television broadcast station licensed by the Commission under subpart E of part 73 of title 47, Code of Federal Regulations, except that such term does not include a low-power or translator television station.

(5) Television network. For purposes of this section, a television network is an entity which offers an interconnected program service on a regular basis for 15 or more hours per week to at least 25 affiliated broadcast stations in 10 or more States.

(6) Local-into-local television service. A satellite carrier is providing local-into-local service when it retransmits a local television station signal back into the local market of that television station for reception by subscribers.

(b) Signal carriage obligations.

(1) Each satellite carrier providing, under section 122 of title 17, United States Code, secondary transmissions to subscribers located within the local market of a television broadcast station of a primary transmission made by that station, shall carry upon request the signals of all television broadcast stations located within that local market, subject to section 325(b) of title 47, United States Code, and other paragraphs in this section.

(2) A satellite carrier that offers multichannel video programming distribution service in the United States to more than 5,000,000 subscribers shall, no later than December 8, 2005, carry upon request the signal originating as an analog signal of each television broadcast station that is located in a local market in Alaska or Hawaii; and shall, no later than June 8, 2007,

carry upon request the signals originating as digital signals of each television broadcast station that is located in a local market in Alaska or Hawaii. Such satellite carrier is not required to carry the signal originating as analog after commencing carriage of digital signals on June 8, 2007. Carriage of signals originating as digital signals of each television broadcast station that is located in a local market in Alaska or Hawaii shall include the entire free over-the-air signal, including multicast and high definition digital signals.

(c) Election cycle. In television markets where a satellite carrier is providing local-into-local service, a commercial television broadcast station may elect either retransmission consent, pursuant to section 325 of title 47 United States Code, or mandatory carriage, pursuant to section 338, title 47 United States Code.

(1) The first retransmission consent-mandatory carriage election cycle shall be for a four-year period commencing on January 1, 2002 and ending December 31, 2005.

(2) The second retransmission consent-mandatory carriage election cycle, and all cycles thereafter, shall be for a period of three years (e.g. the second election cycle commences on January 1, 2006 and ends at midnight on December 31, 2008).

(3) A commercial television station must notify a satellite carrier, by July 1, 2001, of its retransmission consent-mandatory carriage election for the first election cycle commencing January 1, 2002.

(4) Except as provided in paragraphs (c)(6), (d)(2) and (d)(3) of this section, local commercial television broadcast stations shall make their retransmission consent-mandatory carriage election by October 1st of the year preceding the new cycle for all election cycles after the first election cycle.

(5) A noncommercial television station must request carriage by July 1, 2001 for the first election cycle and must renew its carriage request at the same time a commercial television station must make its retransmission consent-mandatory carriage election for all subsequent cycles.

(6) A commercial television broadcast station located in a local market in Alaska or Hawaii shall make its retransmission consent-mandatory carriage election by October 1, 2005, for carriage of its signal that originates as an analog signal for carriage commencing on December 8, 2005, and by April 1, 2007, for its signal that originates as a digital signal for carriage commencing on June 8, 2007 and ending on December 31, 2008. For analog and digital signal carriage cycles commencing after December 31, 2008, such stations shall follow the election cycle in paragraphs (c)(2) and (4). A noncommercial television broadcast station located in a local market in Alaska or Hawaii must request carriage by October 1, 2005, for carriage of its signal that originates as an analog signal for carriage commencing on December 8, 2005, and by April 1, 2007, for its signal that originates as a digital signal for carriage commencing on June 8, 2007 and ending on December 31, 2008.

(d) Carriage procedures—

(1) Carriage requests.

(i) An election for mandatory carriage made by a television broadcast station shall be treated as a request for carriage. For purposes of this paragraph concerning carriage procedures, the term election request includes an election of retransmission consent or mandatory carriage.

(ii) An election request made by a television station must be in writing and sent to the satellite carrier’s principal place of business, by certified mail, return receipt requested.

(iii) A television station’s written notification shall include the:

(A) Station’s call sign;

(B) Name of the appropriate station contact person;

(C) Station’s address for purposes of receiving official correspondence;

(D) Station’s community of license;

(E) Station’s DMA assignment; and

(F) For commercial television stations, its election of mandatory carriage or retransmission consent.

(iv) Within 30 days of receiving a television station’s carriage request, a satellite carrier shall notify in writing:

(A) Those local television stations it will not carry, along with the reasons for such a decision; and

(B) Those local television stations it intends to carry.

(v) A satellite carrier is not required to carry a television station, for the duration of the election cycle, if the station fails to assert its carriage rights by the deadlines established in this section.

(2) New local-into-local service.

(i) A new satellite carrier or a satellite carrier providing local service in a market for the first time after July 1, 2001, shall inform each television broadcast station licensee within any local market in which a satellite carrier proposes to commence carriage of signals of stations from that market, not later than 60 days prior to the commencement of such carriage

(A) Of the carrier’s intention to launch local-into-local service under this section in a local market, the identity of that local market, and the location of the carrier’s proposed local receive facility for that local market;

(B) Of the right of such licensee to elect carriage under this section or grant retransmission consent under section 325(b);

(C) That such licensee has 30 days from the date of the receipt of such notice to make such election; and

(D) That failure to make such election will result in the loss of the right to demand carriage under this section for the remainder of the 3-year cycle of carriage under section 325.

(ii) Satellite carriers shall transmit the notices required by paragraph (d)(2)(i) of this section via certified mail to the address for such television station licensee listed in the consolidated database system maintained by the Commission.

(iii) A satellite carrier with more than five million subscribers shall provide the notice as required by paragraphs (d)(2)(i) and (ii) of this section to each television broadcast station located in a local market in Alaska or Hawaii, not later than March 1, 2007 with respect to carriage of digital signals; provided, further, that the notice shall also describe the carriage requirements pursuant to 47 U.S.C. 338(a)(4), and paragraph (b)(2) of this section.

(iv) A satellite carrier shall commence carriage of a local station by the later of 90 days from receipt of an election of mandatory carriage or upon commencing local-into-local service in the new television market.

(v) Within 30 days of receiving a local television station’s election of mandatory carriage in a new television market, a satellite carrier shall notify in writing: Those local television stations it will not carry, along with the reasons for such decision, and those local television stations it intends to carry.

(3) New television stations.

(i) A television station providing over-the-air service in a market for the first time on or after July 1, 2001, shall be considered a new television station for satellite carriage purposes.

(ii) A new television station shall make its election request, in writing, sent to the satellite carrier’s principal place of business by certified mail, return receipt requested, between 60 days prior to commencing broadcasting and 30 days after commencing broadcasting. This written notification shall include the information required by paragraph (d)(1)(iii) of this section.

(iii) A satellite carrier shall commence carriage within 90 days of receiving the request for carriage from the television broadcast station or whenever the new television station provides over-the-air service.

(iv) Within 30 days of receiving a new television station’s election of mandatory carriage, a satellite carrier shall notify the station in writing that it will not carry the station, along with the reasons for such decision, or that it intends to carry the station.

(4) Television broadcast stations must send election requests as provided in paragraphs (d)(1), (2), and (3) of this section on or before the relevant deadline.

(5) Elections in Markets in which Significantly Viewed Signals are Carried.

(i) Beginning with the election cycle described in § 76.66(c)(2), the retransmission of significantly viewed signals pursuant to § 76.54 by a satellite carrier that provides local-into-local service is subject to providing the notifications to stations in the market pursuant to paragraphs (d)(5)(i)(A) and (B) of this section, unless the satellite carrier was retransmitting such signals as of the date these notifications were due.

(A) In any local market in which a satellite carrier provided local-into-local service on December 8, 2004, at least 60 days prior to any date on which a station must make an election under paragraph (c) of this section, identify each affiliate of the same television network that the carrier reserves the right to retransmit into that station’s local market during the next election cycle and the communities into which the satellite carrier reserves the right to make such retransmissions;

(B) In any local market in which a satellite carrier commences local-into-local service after December 8, 2004, at least 60 days prior to the commencement of service in that market, and thereafter at least 60 days prior to any date on which the station must thereafter make an election under § 76.66(c) or (d)(2), identify each affiliate of the same television network that the carrier reserves the right to retransmit into that station’s local market during the next election cycle.

(ii) A television broadcast station located in a market in which a satellite carrier provides local-into-local television service may elect either retransmission consent or mandatory carriage for each county within the station’s local market if the satellite carrier provided notice to the station, pursuant to paragraph (d)(5)(i) of this section, that it intends to carry during the next election cycle, or has been carrying on the date notification was due, in the station’s local market another affiliate of the same network as a significantly viewed signal pursuant to § 76.54.

(iii) A television broadcast station that elects mandatory carriage for one or more counties in its market and elects retransmission consent for one or more other counties in its market pursuant to paragraph (d)(5)(ii) of this section shall conduct a unified negotiation for the entire portion of its local market for which retransmission consent is elected.

(iv) A television broadcast station that receives a notification from a satellite carrier pursuant to paragraph (d)(5)(i) of this section with respect to an upcoming election cycle may choose either retransmission consent or mandatory carriage for any portion of the 3-year election cycle that is not covered by an existing retransmission consent agreement.

(e) Market definitions.

(1) A local market, in the case of both commercial and noncommercial television broadcast stations, is the designated market area in which a station is

located, and

(i) In the case of a commercial television broadcast station, all commercial television broadcast stations licensed to a community within the same designated market area within the same local market; and

(ii) In the case of a noncommercial educational television broadcast station, the market includes any station that is licensed to a community within the same designated market area as the noncommercial educational television broadcast station.

(2) A designated market area is the market area, as determined by Nielsen Media Research and published in the 1999-2000 Nielsen Station Index Directory and Nielsen Station Index United States Television Household Estimates or any successor publication. In the case of areas outside of any designated market area, any census area, borough, or other area in the State of Alaska that is outside of a designated market area, as determined by Nielsen Media Research, shall be deemed to be part of one of the local markets in the State of Alaska.

(3) A satellite carrier shall use the 1999-2000 Nielsen Station Index Directory and Nielsen Station Index United States Television Household Estimates to define television markets for the first retransmission consent-mandatory carriage election cycle commencing on January 1, 2002 and ending on December 31, 2005. The 2003-2004 Nielsen Station Index Directory and Nielsen Station Index United States Television Household Estimates shall be used for the second retransmission consent-mandatory carriage election cycle commencing January 1, 2006 and ending December 31, 2008, and so forth for each triennial election pursuant to this section. Provided, however, that a county deleted from a market by Nielsen need not be subtracted from a market in which a satellite carrier provides local-into-local service, if that county is assigned to that market in the 1999-2000 Nielsen Station Index Directory or any subsequent issue of that publication. A satellite carrier may determine which local market in the State of Alaska will be deemed to be the relevant local market in connection with each subscriber in an area in the State of Alaska that is outside of a designated market, as described in paragraph (e)(2) of this section.

(4) A local market includes all counties to which stations assigned to that market are licensed.

(f) Receive facilities.

(1) A local receive facility is the reception point in each local market which a

satellite carrier designates for delivery of the signal of the station for purposes of retransmission.

(2) A satellite carrier may establish another receive facility to serve a market if the location of such a facility is acceptable to at least one-half the stations with carriage rights in that market.

(3) Except as provided in 76.66(d)(2), a satellite carrier providing local-into-local service must notify local television stations of the location of the receive facility by June 1, 2001 for the first election cycle and at least 120 days prior to the commencement of all election cycles thereafter.

(4) A satellite carrier may relocate its local receive facility at the commencement of each election cycle. A satellite carrier is also permitted to relocate its local receive facility during the course of an election cycle, if it bears the signal delivery costs of the television stations affected by such a move. A satellite carrier relocating its local receive facility must provide 60 days notice to all local television stations carried in the affected television market.

(g) Good quality signal.

(1) A television station asserting its right to carriage shall be required to bear the costs associated with delivering a good quality signal to the designated local receive facility of the satellite carrier or to another facility that is acceptable to at least one-half the stations asserting the right to carriage in the local market.

(2) To be considered a good quality signal for satellite carriage purposes, a television station shall deliver to the local receive facility of a satellite carrier either a signal level of -45dBm for UHF signals or -49dBm for VHF signals at the input terminals of the signal processing equipment.

(3) A satellite carrier is not required to carry a television station that does not agree to be responsible for the costs of delivering a good quality signal to the receive facility.

(h) Duplicating signals.

(1) A satellite carrier shall not be required to carry upon request the signal of any local television broadcast station that substantially duplicates the signal of another local television broadcast station which is secondarily transmitted by the satellite carrier within the same local market, or the signals of more than one local commercial television broadcast station in a single local market that is affiliated with a particular television network unless such stations are licensed to communities in different States.

(2) A satellite carrier may select which duplicating signal in a market it shall carry.

(3) A satellite carrier may select which network affiliate in a market it shall carry.

(4) A satellite carrier is permitted to drop a local television station whenever that station meets the substantial duplication criteria set forth in this paragraph. A satellite carrier must add a television station to its channel line-up if such station no longer duplicates the programming of another local television station.

(5) A satellite carrier shall provide notice to its subscribers, and to the affected television station, whenever it adds or deletes a station’s signal in a particular local market pursuant to this paragraph.

(6) A commercial television station substantially duplicates the programming of another commercial television station if it simultaneously broadcasts the identical programming of another station for more than 50 percent of the broadcast week.

(7) A noncommercial television station substantially duplicates the programming of another noncommercial station if it simultaneously broadcasts the same programming as another noncommercial station for more than 50 percent of prime time, as defined by § 76.5(n), and more than 50 percent outside of prime time over a three month period, Provided, however, that after three noncommercial television stations are carried, the test of duplication shall be whether more than 50 percent of prime time programming and more than 50 percent outside of prime time programming is duplicative on a non-simultaneous basis.

(i) Channel positioning.

(1) No satellite carrier shall be required to provide the signal of a local television broadcast station to subscribers in that station’s local market on any particular channel number or to provide the signals in any particular order, except that the satellite carrier shall retransmit the signal of the local television broadcast stations to subscribers in the stations’ local market on contiguous channels.

(2) The television stations subject to this paragraph include those carried under retransmission consent.

(3) All local television stations carried under mandatory carriage in a particular television market must be offered to subscribers at rates comparable to local television stations carried under retransmission consent in that same market.

(4) Within a market, no satellite carrier shall provide local-into-local service in a manner that requires subscribers to obtain additional equipment at their own expense or for an additional carrier charge in order to obtain one or more local television broadcast signals if such equipment is not required for the receipt of other local television broadcast signals.

(5) All television stations carried under mandatory carriage, in a particular market, shall be presented to subscribers in the same manner as television stations that elected retransmission consent, in that same market, on any navigational device, on-screen program guide, or menu provided by the satellite carrier.

(j) Manner of carriage.

(1) Each television station carried by a satellite carrier, pursuant to this section, shall include in its entirety the primary video, accompanying audio, and closed captioning data contained in line 21 of the vertical blanking interval and, to the extent technically feasible, program-related material carried in the vertical blanking interval or on subcarriers. For noncommercial educational television stations, a satellite carrier must also carry any program-related material that may be necessary for receipt of programming by persons with disabilities or for educational or language purposes. Secondary audio programming must also be carried. Where appropriate and feasible, satellite carriers may delete signal enhancements, such as ghost-canceling, from the broadcast signal and employ such enhancements at the local receive facility.

(2) A satellite carrier, at its discretion, may carry any ancillary service transmission on the vertical blanking interval or the aural baseband of any television broadcast signal, including, but not limited to, multichannel television sound and teletext.

(k) Material degradation. Each local television station whose signal is carried under mandatory carriage shall, to the extent technically feasible and consistent with good engineering practice, be provided with the same quality of signal processing provided to television stations electing retransmission consent. A satellite carrier is permitted to use reasonable digital compression techniques in the carriage of local television stations.

(l) Compensation for carriage.

(1) A satellite carrier shall not accept or request monetary payment or other valuable consideration in exchange either for carriage of local television broadcast stations in fulfillment of the mandatory carriage requirements of this section or for channel positioning rights provided to such stations under this section, except that any such station may be required to bear the costs associated with delivering a good quality signal to the receive facility of the satellite carrier.

(2) A satellite carrier may accept payments from a station pursuant to a retransmission consent agreement.

(m) Remedies.

(1) Whenever a local television broadcast station believes that a satellite carrier has failed to meet its obligations under this section, such station shall notify the carrier, in writing, of the alleged failure and identify its reasons for believing that the satellite carrier failed to comply with such obligations.

(2) The satellite carrier shall, within 30 days after such written notification, respond in writing to such notification and comply with such obligations or state its reasons for believing that it is in compliance with such obligations.

(3) A local television broadcast station that disputes a response by a satellite carrier that it is in compliance with such obligations may obtain review of such denial or response by filing a complaint with the Commission, in accordance with § 76.7 of title 47, Code of Federal Regulations. Such complaint shall allege the manner in which such satellite carrier has failed to meet its obligations and the basis for such allegations.

(4) The satellite carrier against which a complaint is filed is permitted to present data and arguments to establish that there has been no failure to meet its obligations under this section.

(5) The Commission shall determine whether the satellite carrier has met its obligations under this section. If the Commission determines that the satellite carrier has failed to meet such obligations, the Commission shall order the satellite carrier to take appropriate remedial action. If the Commission determines that the satellite carrier has fully met the requirements of this section, it shall dismiss the complaint.

(6) The Commission will not accept any complaint filed later than 60 days after a satellite carrier, either implicitly or explicitly, denies a television station’s carriage request.

[66 FR 7430, Jan. 23, 2001; 66 FR 34581, 34582, June 29, 2001; 66 FR 49135, Sept. 26, 2001; 70 FR 21670, April 27, 2005; 70 FR 48295, Aug. 17, 2005; 70 FR 51668, Aug. 31, 2005; 70 FR 53079, Sept. 7, 2005]

APPENDIX E

MVPDS FOR WHICH GRANTS OF RETRANSMISSION CONSENT THROUGH DECEMBER 31, 2005 SHALL BE GOVERNED BY THE 2000 AGREEMENT

THIS SCHEDULE HAS BEEN REDACTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT SUBMITTED TO THE SEC FEBRUARY 27, 2006.  WE HAVE FILED THE REDACTED MATERIAL SEPARATELY WITH THE SEC.

APPENDIX F

SAMPLE LIFETIME SUBSCRIBER COUNT

AND PAYMENT LANGUAGE

THIS SCHEDULE HAS BEEN REDACTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT SUBMITTED TO THE SEC FEBRUARY 27, 2006.  WE HAVE FILED THE REDACTED MATERIAL SEPARATELY WITH THE SEC.

APPENDIX G

SAMPLE DISCLOSURE LANGUAGE

THIS SCHEDULE HAS BEEN REDACTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT SUBMITTED TO THE SEC FEBRUARY 27, 2006.  WE HAVE FILED THE REDACTED MATERIAL SEPARATELY WITH THE SEC.

EX-21.1

Exhibit 21.1

LIST OF SUBSIDIARIES OF THE COMPANY

Entity Name	State of Organization
HEARST-ARGYLE STATIONS, INC.	NEVADA
WAPT HEARST-ARGYLE TELEVISION, INC.	CALIFORNIA
KHBS HEARST-ARGYLE TELEVISION, INC.	CALIFORNIA
KMBC HEARST-ARGYLE TELEVISION, INC.	CALIFORNIA
WBAL HEARST-ARGYLE TELEVISION, INC.	CALIFORNIA
WCVB HEARST-ARGYLE TELEVISION, INC.	CALIFORNIA
WISN HEARST-ARGYLE TELEVISION, INC.	CALIFORNIA
WTAE HEARST-ARGYLE TELEVISION, INC.	CALIFORNIA
OHIO/OKLAHOMA HEARST-ARGYLE TELEVISION, INC.	NEVADA
JACKSON HEARST-ARGYLE TELEVISION, INC.	DELAWARE
ARKANSAS HEARST-ARGYLE TELEVISION, INC.	DELAWARE
HEARST-ARGYLE SPORTS, INC.	DELAWARE
HEARST-ARGYLE PROPERTIES, INC.	DELAWARE
HATV INVESTMENTS, INC.	DELAWARE
DES MOINES HEARST-ARGYLE TELEVISION, INC.	DELAWARE
ORLANDO HEARST-ARGYLE TELEVISION, INC.	DELAWARE
NEW ORLEANS HEARST-ARGYLE TELEVISION, INC.	DELAWARE
WYFF HEARST-ARGYLE TELEVISION, INC.	CALIFORNIA
WXII HEARST-ARGYLE TELEVISION, INC.	CALIFORNIA
KOAT HEARST-ARGYLE TELEVISION, INC.	CALIFORNIA
WLKY HEARST-ARGYLE TELEVISION, INC.	CALIFORNIA
KETV HEARST-ARGYLE TELEVISION, INC.	CALIFORNIA
WGAL HEARST-ARGYLE TELEVISION, INC.	CALIFORNIA
HEARST-ARGYLE CAPITAL TRUST	DELAWARE

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statements No. 333-61101, as amended; No. 333-35051; and
No. 333-88216 of Hearst-Argyle Television, Inc. on Form S-3, and in Registration Statements No. 333-115280; No. 333-115279;
No. 333-75709; and No. 333-35043 of Hearst-Argyle Television, Inc. on Form S-8, of our reports dated February 23, 2006, relating to the consolidated financial statements and financial statement schedule of Hearst-Argyle Television, Inc. and management’s report on the effectiveness of internal control over financial reporting, appearing in this Annual Report on Form 10-K of Hearst-Argyle Television, Inc. for the year ended December 31, 2005.

/s/ DELOITTE & TOUCHE LLP

New York, New York

February 23, 2006

EX-31.1

Exhibit 31.1

CERTIFICATION

Certification of Chief Executive Officer and President

I, David J. Barrett, certify that:

1.I have reviewed this annual report on Form 10-K of Hearst-Argyle Television, Inc. (the “registrant”);

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))  for the registrant and have:

(a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)  Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 24, 2006

/S/ DAVID J. BARRETT

David J. Barrett

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

Certification of Chief Financial Officer and Executive Vice President

I, Harry T. Hawks, certify that:

1.I have reviewed this annual report on Form 10-K of Hearst-Argyle Television, Inc. (the “registrant”);

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))  for the registrant and have:

(a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)  Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 24, 2006

/S/ HARRY T. HAWKS

Harry T. Hawks

Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned hereby certify that pursuant to the provisions of 18 U.S.C. 1350(a), the Annual Report on Form 10-K for the year ended December 31, 2005 (the “Form 10-K”) of Hearst-Argyle Television, Inc., a Delaware corporation (the “Company”), fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)) and that information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Company at and for the periods indicated.

Dated:  February 24, 2006

By:	/S/ DAVID J. BARRETT
Name:	David J. Barrett
Title:	President and Chief Executive Officer
By:	/S/ HARRY T. HAWKS
Name:	Harry T. Hawks
Title:	Executive Vice President and Chief Financial Officer