UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

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

For the quarterly period ended June 30, 2013

Commission file number: 001-31311		Commission file number: 000-25206

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

Delaware		Delaware
(State or other jurisdiction of incorporation or organization)		(State or other jurisdiction of incorporation or organization)

05-0501252		13-3581627
(I.R.S. Employer Identification No.)		(I.R.S. Employer Identification No.)

One West Exchange Street, Suite 5A, Providence, Rhode Island 02903

(Address of principal executive offices)

(401) 454-2880

(Registrant’s telephone number, including area code)

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 x No o

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

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

Large accelerated filer o		Accelerated filer x

Non-accelerated filer o		Smaller reporting company o
(Do not check if a smaller reporting company)

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

This combined Form 10-Q is separately filed by (i) LIN TV Corp. and (ii) LIN Television Corporation. LIN Television Corporation meets the conditions set forth in general instruction H (1) (a) and (b) of Form 10-Q and is, therefore, filing this form with the reduced disclosure format permitted by such instruction.

LIN TV Corp. Class A common stock, $0.01 par value, outstanding as of July 30, 2013: 33,471,856 shares.

LIN TV Corp. Class B common stock, $0.01 par value, outstanding as of July 30, 2013: 20,901,726 shares.

LIN TV Corp. Class C common stock, $0.01 par value, outstanding as of July 30, 2013: 2 shares.

LIN Television Corporation common stock, $0.01 par value, outstanding as of July 30, 2013: 1,000 shares.

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EXPLANATORY NOTE

On July 30, 2013, LIN TV Corp. (“LIN TV”), completed its merger with and into LIN Media LLC, a Delaware limited liability company and wholly owned subsidiary of LIN TV (“LIN LLC”), with LIN LLC as the surviving entity (the “Merger”) pursuant to the Agreement and Plan of Merger, dated February 12, 2013, by and between LIN TV and LIN LLC (the “Merger Agreement”). Entry into the Merger Agreement was previously announced by LIN TV on its Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission on February 15, 2013. LIN LLC had not commenced operations and had no assets or liabilities as of June 30, 2013.

LIN LLC filed a Current Report on Form 8-K on July 31, 2013 (the “Form 8-K”) for the purpose of establishing LIN LLC as the successor issuer pursuant to Rule 12g-3(a) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and to disclose certain related matters, including the consummation of the Merger. Pursuant to Rule 12g-3(a) under the Exchange Act and in accordance with the filing of the Form 8-K, the class A common shares representing limited liability interests in LIN LLC, as the successor issuer to LIN TV, were deemed registered under Section 12(b) of the Exchange Act. References to LIN TV in this Quarterly Report on Form 10-Q that include any period at and after the effectiveness of the Merger shall be deemed to refer to LIN LLC. For more information concerning the effects of the Merger and the succession of LIN LLC to LIN TV upon its effectiveness, please see the Form 8-K.

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Part I. Financial Information

Item 1. Unaudited Consolidated Financial Statements of LIN TV Corp.	3

Consolidated Balance Sheets	3
Consolidated Statements of Operations	4
Consolidated Statements of Comprehensive Income	5
Consolidated Statements of Stockholders’ Deficit	6
Consolidated Statements of Cash Flows	8
Notes to Unaudited Consolidated Financial Statements (See separate index for Financial Statements of LIN Television Corporation)	9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3. Quantitative and Qualitative Disclosures about Market Risk	39
Item 4. Controls and Procedures	39

Part II. Other Information

Item 1. Legal Proceedings	39
Item 1A. Risk Factors	39
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3. Defaults Upon Senior Securities	40
Item 4. Mine Safety Disclosure	40
Item 5. Other Information	40
Item 6. Exhibits	41
Signature Page	42

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Part I. Financial Information

Item 1. Unaudited Consolidated Financial Statements

LIN TV Corp.

Consolidated Balance Sheets

(unaudited)

	June 30, 2013			December 31, 2012
	(in thousands, except share data)

ASSETS
Current assets:
Cash and cash equivalents	$	19,799		$	46,307
Accounts receivable, less allowance for doubtful accounts (2013 - $3,858; 2012 - $3,599)	132,942			126,150
Deferred income tax assets	389			—
Other current assets	7,355			6,863
Total current assets	160,485			179,320
Property and equipment, net	232,204			241,926
Deferred financing costs	18,064			19,135
Goodwill	202,998			192,079
Broadcast licenses, net	536,515			536,515
Other intangible assets, net	57,371			59,554
Other assets	14,197			12,885
Total assets (a)	$	1,221,834		$	1,241,414

LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Current portion of long-term debt	$	14,028		$	10,756
Accounts payable	16,254			18,955
Income taxes payable	160,284			766
Accrued expenses	58,106			153,246
Deferred income tax liabilities	—			168,219
Program obligations	8,989			10,770
Total current liabilities	257,661			362,712
Long-term debt, excluding current portion	930,910			879,471
Deferred income tax liabilities	51,750			40,556
Program obligations	4,073			4,281
Other liabilities	40,925			42,716
Total liabilities (a)	1,285,319			1,329,736

Commitments and Contingencies (Note 11)

Redeemable noncontrolling interest	13,846			3,242

LIN TV Corp. stockholders’ deficit:
Class A common stock, $0.01 par value, 100,000,000 shares authorized, Issued: 38,431,316 and 35,672,528 shares as of June 30, 2013 and December 31, 2012, respectively Outstanding: 33,483,657 and 30,724,869 shares as of June 30, 2013 and December 31, 2012, respectively	316			313
Class B common stock, $0.01 par value, 50,000,000 shares authorized, 20,901,726 and 23,401,726 shares as of June 30, 2013 and December 31, 2012, respectively, issued and outstanding; convertible into an equal number of shares of class A or class C common stock	235			235
Class C common stock, $0.01 par value, 50,000,000 shares authorized, 2 shares as of June 30, 2013 and December 31, 2012, issued and outstanding; convertible into an equal number of shares of class A common stock	—			—
Treasury stock, 4,947,659 shares of class A common stock as of June 30, 2013 and December 31, 2012, at cost	(21,984		)	(21,984		)
Additional paid-in capital	1,136,784			1,129,691
Accumulated deficit	(1,157,816		)	(1,164,435		)
Accumulated other comprehensive loss	(34,866		)	(35,384		)
Total stockholders’ deficit	(77,331		)	(91,564		)
Total liabilities, redeemable noncontrolling interest and stockholders’ deficit	$	1,221,834		$	1,241,414

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

(a) Our consolidated assets as of June 30, 2013 and December 31, 2012 include total assets of: $61,614 and $60,380, respectively, of variable interest entities (“VIEs”) that can only be used to settle the obligations of the VIEs. These assets include broadcast licenses and other intangible assets of: $45,870 and $46,604 and program rights of: $2,680 and $2,060 as of June 30, 2013 and December 31, 2012, respectively. Our consolidated liabilities as of June 30, 2013 and December 31, 2012 include $5,999 and $5,440, respectively, of total liabilities of the VIEs for which the VIEs’ creditors have no recourse to the Company, including $3,802 and $4,152, respectively, of program obligations. See further description in Note 1 — “Basis of Presentation and Summary of Significant Accounting Policies.”

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LIN TV Corp.

Consolidated Statements of Operations

(unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(in thousands, except per share data)

Net revenues	$	164,346		$	121,016		$	305,338		$	224,216

Operating expenses:
Direct operating	63,623			37,245			118,191			72,402
Selling, general and administrative	40,040			28,043			77,338			56,426
Amortization of program rights	7,152			5,381			14,937			10,600
Corporate	9,094			8,219			19,365			14,965
Depreciation	11,320			6,651			22,958			13,410
Amortization of intangible assets	5,723			478			11,152			955
Restructuring charge	391			—			2,523			—
Loss from asset dispositions	87			4			182			3
Operating income	26,916			34,995			38,692			55,455

Other expense:
Interest expense, net	14,428			9,266			28,299			19,636
Share of loss in equity investments	25			62			25			153
Loss on extinguishment of debt	—			—			—			2,099
Other expense, net	84			101			60			88
Total other expense, net	14,537			9,429			28,384			21,976

Income before provision for income taxes	12,379			25,566			10,308			33,479
Provision for income taxes	5,210			10,109			4,159			12,907
Income from continuing operations	7,169			15,457			6,149			20,572
Discontinued operations:
Loss from discontinued operations, net of a provision for (benefit from) income taxes of $34 and $(541) for the three and six months ended June 30, 2012, respectively	—			(76		)	—			(1,018		)
Gain on the sale of discontinued operations, net of a provision for income taxes of $6,306 and $6,223 for the three and six months ended June 30, 2012, respectively	—			11,678			—			11,389
Net income	7,169			27,059			6,149			30,943
Net loss attributable to noncontrolling interests	(306		)	(59		)	(470		)	(441		)
Net income attributable to LIN TV Corp.	$	7,475		$	27,118		$	6,619		$	31,384

Basic income per common share attributable to LIN TV Corp.:
Income from continuing operations attributable to LIN TV Corp.	$	0.14		$	0.28		$	0.13		$	0.38
Loss from discontinued operations, net of tax	—			—			—			(0.02		)
Gain on the sale of discontinued operations, net of tax	—			0.21			—			0.20
Net income attributable to LIN TV Corp.	$	0.14		$	0.49		$	0.13		$	0.56

Weighted-average number of common shares outstanding used in calculating basic income per common share	52,278			55,174			52,095			55,680

Diluted income per common share attributable to LIN TV Corp.:
Income from continuing operations attributable to LIN TV Corp.	$	0.13		$	0.27		$	0.12		$	0.37
Loss from discontinued operations, net of tax	—			—			—			(0.02		)
Gain on the sale of discontinued operations, net of tax	—			0.21			—			0.20
Net income attributable to LIN TV Corp.	$	0.13		$	0.48		$	0.12		$	0.55

Weighted-average number of common shares outstanding used in calculating diluted income per common share	55,595			56,300			55,406			56,959

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

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LIN TV Corp.

Consolidated Statements of Comprehensive Income

(unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(in thousands)

Net income	$	7,169		$	27,059		$	6,149		$	30,943
Amortization of pension net losses, reclassified, net of tax of $169 and $170 for the three months ended June 30, 2013 and 2012, respectively, and $338 and $340 for the six months ended June 30, 2013 and 2012, respectively	259			261			518			522
Comprehensive income	7,428			27,320			6,667			31,465
Comprehensive loss attributable to noncontrolling interest	(306		)	(59		)	(470		)	(441		)
Comprehensive income attributable to LIN TV Corp.	$	7,734		$	27,379		$	7,137		$	31,906

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

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LIN TV Corp.

Consolidated Statement of Stockholders’ Deficit

(unaudited)

(in thousands)

															Accumulated
	Common Stock						Treasury			Additional					Other			Total
	Class A		Class B		Class C		Stock			Paid-In		Accumulated			Comprehensive			Stockholders’
	Amount		Amount		Amount		(at cost)			Capital		Deficit			Loss			Deficit
Balance as of December 31, 2012	$	313	$	235	$	—	$	(21,984	)	$	1,129,691	$	(1,164,435	)	$	(35,384	)	$	(91,564	)
Amortization of pension net losses, net of tax of $338	—		—		—		—			—		—			518			518
Class A common stock issued pursuant to employee benefit plans	1		—		—		—			455		—			—			456
Class A common stock issued pursuant to exercise of stock options	2		—		—		—			701		—			—			703
Tax benefit from exercise of stock options	—		—		—		—			1,497		—			—			1,497
Stock-based compensation	—		—		—		—			4,440		—			—			4,440
Net income attributable to LIN TV Corp.	—		—		—		—			—		6,619			—			6,619
Balance as of June 30, 2013	$	316	$	235	$	—	$	(21,984	)	$	1,136,784	$	(1,157,816	)	$	(34,866	)	$	(77,331	)

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

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LIN TV Corp.

Consolidated Statement of Stockholders’ Deficit

(unaudited)

(in thousands)

															Accumulated
	Common Stock						Treasury			Additional					Other			Total
	Class A		Class B		Class C		Stock			Paid-In		Accumulated			Comprehensive			Stockholders’
	Amount		Amount		Amount		(at cost)			Capital		Deficit			Loss			Deficit
Balance as of December 31, 2011	$	309	$	235	$	—	$	(10,598	)	$	1,121,589	$	(1,157,390	)	$	(38,777	)	$	(84,632	)
Amortization of pension net losses, net of tax of $340	—		—		—		—			—		—			522			522
Class A common stock issued pursuant to employee benefit plans	1		—		—		—			293		—			—			294
Class A common stock issued pursuant to exercise of stock options	—		—		—		—			59		—			—			59
Stock-based compensation	—		—		—		—			3,738		—			—			3,738
Purchase of LIN TV Corp. class A common stock	—		—		—		(6,500		)	—		—			—			(6,500		)
Net income attributable to LIN TV Corp.	—		—		—		—			—		31,384			—			31,384
Balance as of June 30, 2012	$	310	$	235	$	—	$	(17,098	)	$	1,125,679	$	(1,126,006	)	$	(38,255	)	$	(55,135	)

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

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LIN TV Corp.

Consolidated Statements of Cash Flows

(unaudited)

	Six Months Ended June 30,
	2013			2012
	(in thousands)
OPERATING ACTIVITIES:
Net income	$	6,149		$	30,943
Loss from discontinued operations	—			1,018
Gain on the sale of discontinued operations	—			(11,389		)
Adjustment to reconcile net income to net cash provided by operating activities:
Depreciation	22,958			13,410
Amortization of intangible assets	11,152			955
Amortization of financing costs and note discounts	1,808			1,153
Amortization of program rights	14,937			10,600
Cash payments for programming	(16,072		)	(11,296		)
Loss on extinguishment of debt	—			871
Share of loss in equity investments	25			153
Deferred income taxes, net	3,803			12,391
Stock-based compensation	4,528			3,738
Loss from asset dispositions	182			3
Other, net	846			862
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	1,203			(3,592		)
Other assets	(3,036		)	(2,155		)
Accounts payable	(6,479		)	(1,557		)
Accrued interest expense	4,510			(2,434		)
Other liabilities and accrued expenses	(3,949		)	(1,979		)
Net cash provided by operating activities, continuing operations	42,565			41,695
Net cash used in operating activities, discontinued operations	—			(2,736		)
Net cash provided by operating activities	42,565			38,959

INVESTING ACTIVITIES:
Capital expenditures	(14,170		)	(13,716		)
Change in restricted cash	—			255,159
Payments for business combinations, net of cash acquired	(9,824		)	(33,500		)
Proceeds from the sale of assets	34			1
Shortfall loans to joint venture with NBCUniversal	—			(1,680		)
Capital contribution to joint venture with NBCUniversal	(100,000		)	—
Net cash (used in) provided by investing activities, continuing operations	(123,960		)	206,264
Net cash provided by investing activities, discontinued operations	—			29,520
Net cash (used in) provided by investing activities	(123,960		)	235,784

FINANCING ACTIVITIES:
Net proceeds on exercises of employee and director stock-based compensation	1,156			352
Proceeds from borrowings on long-term debt	96,000			20,000
Principal payments on long-term debt	(41,617		)	(297,415		)
Payment of long-term debt issue costs	(652		)	(199		)
Treasury stock purchased	—			(6,500		)
Net cash provided by (used in) financing activities	54,887			(283,762		)

Net decrease in cash and cash equivalents	(26,508		)	(9,019		)
Cash and cash equivalents at the beginning of the period	46,307			18,057
Cash and cash equivalents at the end of the period	$	19,799		$	9,038

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

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LIN TV Corp.

Notes to Unaudited Consolidated Financial Statements

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

Principles of Consolidation

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

Our consolidated financial statements reflect the operations of WWHO-TV in Columbus, OH and WUPW-TV in Toledo, OH as discontinued for all periods presented. See Note 3—“Discontinued Operations” for further discussion of our discontinued operations.

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

In the opinion of management, the accompanying unaudited interim financial statements contain all adjustments necessary to state fairly our financial position, results of operations and cash flows for the periods presented. The interim results of operations are not necessarily indicative of the results to be expected for the full year.

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

Joint Venture Sale Transaction and Merger

On February 12, 2013, we, along with our wholly-owned subsidiaries LIN Television and LIN Television of Texas, L.P., a Delaware limited partnership (“LIN Texas”) entered into and closed a transaction agreement (the “Transaction Agreement”) with NBC Telemundo License LLC, a Delaware limited liability company (“NBC”), NBCU New LLC I, a Delaware limited liability company, NBCU New LLC II, a Delaware limited liability company, General Electric Company, a New York corporation (“GE”), General Electric Capital Corporation, a Delaware corporation (“GECC” and together with GE, the “GE Parties”), National Broadcasting Company Holding, Inc., a Delaware corporation, Comcast Corporation, a Pennsylvania corporation (“Comcast”), NBCUniversal Media, LLC, a Delaware limited liability company (“NBCUniversal”), Lone Star SPV, LLC, a Delaware limited liability company and Station Venture Holdings, LLC, a Delaware limited liability company (“SVH”). SVH held a 99.75% interest in Station Venture Operations, LP (“SVO”), which is the operating company that managed KXAS-TV and KNSD-TV, the television stations that comprised the joint venture. The Transaction Agreement effected a series of transactions related to the ownership and sale of LIN Texas’s 20.38% equity interest in SVH, a joint venture in which NBC, an affiliate of NBCUniversal, held the remaining 79.62% equity interest (collectively, the “JV Sale Transaction”).

SVH was a limited partner in a business that operated an NBC affiliate in Dallas and an NBC affiliate in San Diego pursuant to a management agreement. At the time of LIN Texas’s acquisition of its interest in SVH in 1998, GECC provided secured debt financing to SVH in the form of a $815.5 million non-amortizing senior secured note due 2023 to GECC (the “GECC Note”), and, in connection with SVH’s assumption of the GECC Note, LIN TV guaranteed the payment of the full amount of principal and interest on the GECC Note (the “GECC Guarantee”).

In addition, during 2009, 2010, 2011 and 2012, LIN Television entered into agreements with SVH, the GE Parties and NBCUniversal pursuant to which LIN Television, the GE Parties and NBCUniversal caused to be provided to SVH certain unsecured shortfall funding loans (the “Shortfall Funding Loans”) on the basis of each party’s percentage of equity interest in SVH in order to fund interest payments on the GECC Note.

Pursuant to the JV Sale Transaction, in exchange for LIN Television causing a $100 million capital contribution to be made to SVH (which was used to prepay a portion of the GECC Note), LIN TV was released from the GECC Guarantee and any further obligations related to any shortfall funding agreements. Further, LIN Texas sold its 20.38% equity interest in SVH to affiliates of NBCUniversal,

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and the LIN parties transferred their rights to receivables related to the Shortfall Funding Loans for $1.00. As a result of the JV Sale Transaction, neither we nor any of our direct or indirect subsidiaries have any further investment in or obligations (funding or otherwise) related to SVH, including, without limitation, to make any other unsecured shortfall loans or payments under the GECC Note or the GECC Guarantee.

We accrued for and expensed the $100 million capital contribution to SVH to secure the release of the GECC Guarantee and recorded the related tax effects in our consolidated financial statements as of December 31, 2012 because it represented a probable and estimable obligation of the Company. In February 2013, we entered into a $60 million incremental term loan facility and utilized $40 million of cash on hand and borrowings under our revolving credit facility to fund the $100 million payment. As a result of the JV Sale Transaction, after utilizing all of our available Federal net operating loss carryforwards to offset the taxable gain recognized in such transaction, we had an approximate $163 million income tax payable associated with this transaction remaining as of June 30, 2013, approximately $115 million of which is expected to be extinguished as a result of the closing of the Agreement and Plan of Merger further described below.

Concurrent with the closing of the JV Sale Transaction, LIN TV entered into an Agreement and Plan of Merger (the “Merger Agreement”) with LIN Media LLC, a newly formed Delaware limited liability company and wholly owned subsidiary of LIN TV (“LIN LLC”). Pursuant to the Merger Agreement, which was approved by the shareholders of LIN TV on July 30, 2013, LIN TV was merged with and into LIN LLC with LIN LLC continuing as the surviving entity (the “Merger”). The Merger enabled the surviving entity to be classified as a partnership for federal income tax purposes and such change in classification was treated as a liquidation of LIN TV for federal income tax purposes, with the result that LIN TV realized a capital loss in its 100% equity interest in LIN Television.

As a result of the average of LIN TV’s opening and closing trading prices of its stock at the close of the Merger, LIN TV realized a capital loss in the amount of approximately $316 million, which represents the difference between its tax basis in the stock of LIN Television, and the fair market value of such stock as of July 30, 2013. The capital loss realized and existing net operating losses will be used to offset a portion of the capital gain recognized in the JV Sale Transaction and, as a result, we expect to realize cash savings of approximately $115 million, resulting in a remaining tax liability of approximately $48 million associated with the JV Sale Transaction. We expect to fund this tax liability during the fourth quarter of 2013 using a combination of cash on hand and amounts available under our revolving credit facility.

Variable Interest Entities

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

We have a JSA and an SSA with WBDT Television, LLC (“WBDT”), a third party licensee, for WBDT-TV in the Dayton, OH market. We also have JSAs and SSAs with affiliates of Vaughan Acquisition LLC (“Vaughan”), a third party licensee, for WTGS-TV in the Savannah, GA market, WYTV-TV in the Youngstown, OH market and KTKA-TV in the Topeka, KS market and SSAs with KASY-TV Licensee, LLC (“KASY”), a third-party licensee, for KWBQ-TV in the Santa Fe, NM market, KRWB-TV in the Roswell, NM market and KASY-TV in the Albuquerque, NM market. Under these agreements, we provide administrative services to these stations, have an obligation to reimburse certain of the station expenses, and we are compensated through a performance-based fee structure that provides us the benefit of certain returns from the operation of these stations.

We determined that WBDT, Vaughan and KASY are VIEs and as a result of the JSAs and/or SSAs, we have variable interests in these entities. We are the primary beneficiary of these entities, and therefore, we consolidate these entities within our consolidated financial statements.

The carrying amounts and classifications of the assets and liabilities of the variable interest entities described above, which have been included in our consolidating balance sheets as of June 30, 2013 and December 31, 2012 are as follows (in thousands):

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	June 30,		December 31,
	2013		2012
ASSETS
Current assets:
Cash and cash equivalents	$	629	$	418
Accounts receivable, net	6,675		6,021
Other assets	1,181		2,092
Total current assets	8,485		8,531
Property and equipment, net	3,277		3,190
Broadcast licenses and other intangible assets, net	45,870		46,604
Other assets	3,982		2,055
Total assets	$	61,614	$	60,380

LIABILITIES
Current liabilities:
Current portion of long-term debt	$	1,193	$	1,451
Accounts payable	1,219		—
Accrued expenses	978		425
Program obligations	2,004		2,185
Total current liabilities	5,394		4,061
Long-term debt, excluding current portion	4,092		3,950
Program obligations	1,798		1,967
Other liabilities	50,330		50,402
Total liabilities	$	61,614	$	60,380

The assets of our consolidated VIEs can only be used to settle the obligations of the VIEs and may not be sold, or otherwise disposed of, except for assets sold or replaced with others of like kind or value. Other liabilities of $50,330 and $50,402 as of June 30, 2013 and December 31, 2012, respectively, serve to reduce the carrying value of the entities, and are eliminated in our consolidated financial statements. This reflects the fact that as of June 30, 2013 and December 31, 2012, LIN Television has an option that it may exercise if the Federal Communications Commission (“FCC”) attribution rules change. The option would allow LIN Television to acquire the assets or member’s interest of the VIE entities for a nominal exercise price, which is significantly less than the carrying value of their tangible and intangible net assets.

Redeemable Noncontrolling Interest

The following table presents the activity of the redeemable noncontrolling interest included in our consolidated balance sheets related to Nami Media, Inc. (“Nami Media”), HYFN, Inc. (“HYFN”) and Dedicated Media, Inc. (“Dedicated Media”), which represents third parties’ proportionate share of our consolidated net assets (in thousands):

	Redeemable Noncontrolling Interest
Balance as of December 31, 2012	$	3,242
Acquisition of redeemable noncontrolling interest	11,025
Net loss	(470		)
Stock-based compensation	49
Balance as of June 30, 2013	$	13,846

Use of Estimates

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

Net Earnings per Common Share

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

The following table sets forth the computation of the common shares outstanding used in determining basic and diluted EPS (in thousands):

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	Three Months Ended June 30,		Six Months Ended June 30,
Denominator for EPS calculation:	2013	2012	2013	2012
Weighted-average common shares, basic	52,278	55,174	52,095	55,680
Effect of dilutive securities:
Stock options	3,317	1,126	3,311	1,279
Weighted-average common shares, diluted	55,595	56,300	55,406	56,959

We apply the treasury stock method to measure the dilutive effect of our outstanding stock option and restricted stock awards and include the respective common share equivalents in the denominator of our diluted EPS calculation. Securities representing less than 0.1 million shares of common stock for the three and six months ended June 30, 2013, and 1.8 million shares of common stock for the three and six months ended June 30, 2012, were excluded from the computation of diluted EPS for these periods because their effect would have been anti-dilutive. The net income per share amounts are the same for our class A, class B and class C common stock because the holders of each class are legally entitled to equal per share distributions whether through dividends or in liquidation.

Recently Issued Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board issued Accounting Standards Update No. 2013-02, “Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income,” which amends Accounting Standards Codification 220, “Comprehensive Income.” The amendments require an entity to disclose the impact of amounts reclassified out of accumulated other comprehensive income and into net income, by the respective line items of net income, if the amounts reclassified are reclassified to net income in their entirety in the same reporting period. The disclosure is required either on the face of the statement where net income is presented or in the notes. For amounts that are not reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. We prospectively adopted this guidance effective January 1, 2013 and it did not have a material impact on our financial statements.

In July 2012, there were revisions to the accounting standard for impairment tests of indefinite-lived intangible assets other than goodwill. Under the revised standard a company can first perform a qualitative assessment to determine whether further impairment testing of indefinite-lived intangible assets is necessary. A company can choose to perform the qualitative assessment on none, some, or all of its indefinite-lived intangible assets, and can also bypass the qualitative assessment and perform the quantitative impairment test for any indefinite-lived intangible in any period. The revised standard is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. We adopted this guidance effective January 1, 2013 and do not expect it to have a material impact on our impairment tests of indefinite-lived intangible assets.

Note 2 — Acquisitions

Dedicated Media, Inc.

On April 9, 2013, LIN Television acquired a 60% interest (calculated on a fully diluted basis) in Dedicated Media, a multi-channel advertisement buying and optimization company. Dedicated Media is headquartered in Los Angeles, CA and employs new technologies to create, plan and execute digital marketing campaigns on behalf of its clients. The purchase price totaled $5.8 million, which was funded from cash on hand at the time of the acquisition.

Under the terms of our agreement with Dedicated Media, we agreed to purchase the remaining outstanding shares of Dedicated Media by no later than February 15, 2015 if Dedicated Media achieves both (i) a target earnings before interest, taxes, depreciation and amortization (“EBITDA”) and (ii) a target gross profit in 2014, as outlined in the purchase agreement. The purchase price of these shares is based on multiples of Dedicated Media’s 2014 EBITDA and gross profit. Our maximum potential obligation under the purchase agreement is $26 million. If Dedicated Media does not meet the target EBITDA or target gross profit in 2014, we have the option to purchase the remaining outstanding shares using the same purchase price multiple.

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

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Current assets	$	7,524
Other intangible assets	4,620
Goodwill	1,796
Current liabilities	(4,354		)
Noncontrolling interest	(3,834		)
Total	$	5,752

The amount allocated to definite-lived intangible assets represents the estimated fair values of customer relationships of $3.9 million, completed technology of $0.5 million, and trademarks of $0.2 million . These intangible assets will be amortized over the estimated remaining useful lives of approximately 7 years for customer relationships, 4 years for completed technology and 2 years for trademarks.

HYFN, Inc.

On April 4, 2013, LIN Television acquired a 50.1% interest (calculated on a fully diluted basis) in HYFN, a full service digital advertising agency specializing in the planning, development, deployment and support for websites, mobile sites, interactive banners, games and various applications for multiple devices. The purchase price totaled $7.2 million, $6.9 million of which was funded from cash on hand and $0.3 million was accrued at the time of the acquisition and is expected to be paid in accordance with the provisions of the purchase agreement during the first quarter of 2014.

Under the terms of our agreement with HYFN, we agreed to purchase the remaining outstanding shares of HYFN by no later than February 15, 2016 if HYFN achieves both (i) a target EBITDA and (ii) target net revenues in 2015, as outlined in the transaction agreements. The purchase price of these shares is based on multiples of HYFN’s 2015 net revenue and EBITDA. Our maximum potential obligation under the terms of our agreement is approximately $62.4 million. If HYFN does not meet the target EBITDA or target net revenues in 2015, we have the option to purchase the remaining outstanding shares using the same purchase price multiple.

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

Current assets	$	3,938
Non-current assets	12
Other intangible assets	3,580
Goodwill	9,123
Current liabilities	(920		)
Non-current liabilities	(1,324		)
Noncontrolling interest	(7,191		)
Total	$	7,218

The amount allocated to definite-lived intangible assets represents the estimated fair values of customer relationships of $2.4 million, completed technology of $1.1 million, and trademarks of $0.1 million . These intangible assets will be amortized over the estimated remaining useful lives of approximately 8 years for customer relationships, 3 years for completed technology and 3 years for trademarks.

Goodwill of $1.8 million and $9.1 million is the excess of the aggregate purchase price over the fair value of the identifiable net assets acquired, and primarily represents the benefits of the incremental revenue we expect to generate from the acquisitions of Dedicated Media and HYFN, respectively. None of the goodwill recognized in connection with the acquisitions of Dedicated Media and HYFN is deductible for tax purposes.

Our obligations to purchase the noncontrolling interest holders’ shares of both Dedicated Media and HYFN are outside of our control, because they are based on the achievement of certain financial targets described above. Therefore, the noncontrolling interest related to Dedicated Media and HYFN as of June 30, 2013 has been reported as redeemable noncontrolling interest and classified as temporary equity on our consolidated balance sheets. As of the acquisition dates, the fair values of the noncontrolling interests were $3.8 million and $7.2 million for Dedicated Media and HYFN, respectively, and were measured based on the purchase prices for our 60% and 50.1% ownership interest in Dedicated Media and HYFN, respectively, and the net assets acquired as of the acquisition dates. As of June 30, 2013, we believe that achieving the financial targets is not yet probable and therefore, have not reflected these obligations in our consolidated financial statements.

If we do not purchase the remaining outstanding shares of Dedicated Media or HYFN by the dates set forth in the respective agreements, the noncontrolling interest holders have the right to purchase our interest. The purchase price of these shares is based on the same purchase price multiple described above and is exercisable only if the applicable financial targets are not met and we do not elect to purchase the remaining interest. The fair value of this option is zero and no amounts related to these options are included in our consolidated financial statements as of June 30, 2013.

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New Vision Television, LLC

On October 12, 2012, LIN Television completed its acquisition of television stations in eight markets that were previously owned by affiliates of New Vision Television, LLC (“New Vision”) for $334.9 million, subject to certain post-closing adjustments, and including the assumption of $14.3 million of finance lease obligations. Concurrent with the acquisition, Vaughan, a third-party licensee, completed its acquisition of separately owned television stations (the “Vaughan Acquired Stations”) in three markets for $4.6 million from PBC Broadcasting, LLC (“PBC”).

LIN Television also agreed to provide certain services to the Vaughan Acquired Stations pursuant to JSAs and SSAs with Vaughan. Under the JSAs and SSAs with Vaughan, we provide administrative and technical services, supporting the business and operation of the Vaughan Acquired Stations in exchange for commissions and fees that provide us the benefit of certain returns from the business of the Vaughan Acquired Stations.

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

Program rights assets	$	2,040
Property and equipment	100,559
Broadcast licenses	133,120
Definite-lived intangible assets	55,837
Goodwill	64,589
Current liabilities	(417		)
Non-current liabilities	(2,239		)
Long-term debt assumed	(13,989		)
Total	$	339,500

The amount allocated to definite-lived intangible assets represents the estimated fair values of network affiliations of $30.8 million, favorable leases of $8.6 million, advertiser relationships of $6.1 million, retransmission consent agreements of $7 million, and other intangible assets of $3.3 million. These intangible assets will be amortized over the estimated remaining useful lives of approximately 2 years for network affiliations, 32 years for favorable leases, 10 years for advertiser relationships, 5 years for retransmission consent agreements, and a weighted average life of 6 years for other intangible assets.

ACME Television, LLC

On December 10, 2012, LIN Television acquired certain assets of the ACME Television, LLC (“ACME”) television stations KWBQ-TV, KRWB-TV and KASY-TV (collectively the “ACME Acquired Stations”), each of which serves the Albuquerque-Santa Fe, NM market. KASY, an unrelated third party, acquired the remaining assets of the ACME Acquired Stations, including the FCC license. The aggregate purchase price for the ACME Acquired Stations was $19 million, of which we paid approximately $17.3 million and KASY paid approximately $1.7 million.

LIN Television also agreed to provide certain services to the ACME Acquired Stations pursuant to SSAs with KASY. Under the SSAs with KASY, we provide administrative and technical services, supporting the business and operations of the ACME Acquired Stations in exchange for commissions and fees that provide us the benefit of certain returns from the business of the ACME Acquired Stations.

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

Current assets	$	1,656
Non-current assets	1,968
Other intangible assets	12,898
Goodwill	5,331
Non-current liabilities	(2,858		)
Total	$	18,995

Goodwill of $64.6 million and $5.3 million is the excess of the aggregate purchase price over the fair value of the identifiable net assets acquired, and primarily represents the benefits of synergies and economies of scale we expect to realize from the acquisitions of the television stations from New Vision and ACME, respectively. All of the goodwill recognized in connection with the acquisitions of New Vision and ACME is deductible for tax purposes.

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Net revenues and operating income of the television stations acquired during 2012 included in our consolidated statements of operations for the six months ended June 30, 2013 were $69.6 million and $1.2 million, respectively.

The provisional purchase price allocation for the acquisitions presented above is based upon all information available to us at the present time, and is based upon management’s preliminary estimates of the fair values using valuation techniques including income, cost and market approaches. The purchase price allocation is provisional pending our final determination of the fair values of the assets and liabilities, which we expect will occur within twelve months following the acquisition. Upon the completion of the final purchase price allocation, any reallocation of fair values to the assets acquired and liabilities assumed in the acquisitions could have a material impact on our depreciation and amortization expenses and future results of operations. During the three and six months ended June 30, 2013, certain measurement period adjustments were made to the initial allocation for the New Vision and ACME acquisitions performed in the fourth quarter of 2012, which were not material to the consolidated financial statements.

Pro Forma Information

The following table sets forth unaudited pro forma results of operations as of June 30, 2012, assuming that the above acquisitions of television stations from New Vision and ACME, along with transactions necessary to finance the acquisitions, occurred on January 1, 2011 (in thousands):

	Three Months Ended June, 30 2012		Six Months Ended June 30, 2012
Net revenue	$	157,212	$	293,168
Net income	$	25,956	$	25,911
Basic income per common share attributable to LIN TV Corp.	$	0.47	$	0.47
Diluted income per common share attributable to LIN TV Corp.	$	0.46	$	0.45

This pro forma financial information is based on historical results of operations, adjusted for the allocation of the purchase price and other acquisition accounting adjustments, and is not necessarily indicative of what our results would have been had we operated the businesses since January 1, 2011. The pro forma adjustments for the three and six months ended June 30, 2012 reflect depreciation expense, amortization of intangibles and amortization of program contract costs related to the fair value adjustments of the assets acquired, additional interest expense related to the financing of the transactions, exclusion of nonrecurring financing and transaction related costs and the related tax effects of the adjustments.

Nami Media, Inc.

On November 22, 2011, LIN Television acquired a 57.6% interest (a 50.1% interest calculated on a fully diluted basis) in Nami Media, a digital advertising management and technology company based in Los Angeles, CA. Under the terms of our agreement with Nami Media, we agreed to purchase the remaining outstanding shares of Nami Media in 2014 if Nami Media achieves a target EBITDA in 2013 as outlined in the purchase agreement. The purchase price of these shares is based on multiples of Nami Media’s 2013 net revenues and EBITDA. Our maximum potential obligation under the purchase agreement is $37.4 million. Additionally, if Nami Media does not meet the target EBITDA in 2013, we have the option to purchase the remaining outstanding shares using the same purchase price multiple. Our obligation to purchase the noncontrolling interest holders’ shares is essentially outside of our control, because it is based on the achievement of target EBITDA in 2013. Therefore, the noncontrolling interest related to Nami Media as of June 30, 2013 and December 31, 2012 has been reported as redeemable noncontrolling interest and classified as temporary equity on our consolidated balance sheets. As of the acquisition date, the fair value of the noncontrolling interest was $3.5 million, and was measured based on the purchase price for our 57.6% ownership interest and the net assets acquired as of the acquisition date. As of June 30, 2013, we believe that the fair value of the mandatory purchase obligation is zero and as a result, have not reflected this obligation in our consolidated financial statements.

In 2014, if we do not purchase the remaining outstanding shares of Nami Media by the date set forth in the respective purchase agreements, the noncontrolling interest holders have the right to purchase our interest in Nami Media. The purchase price of these shares is based on the same purchase price multiple described above and is exercisable only if the 2013 EBITDA target is not met and we do not elect to purchase the remaining interest. The fair value of this option is zero and no amounts related to these options are included in our consolidated financial statements as of June 30, 2013 and December 31, 2012.

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LIN Digital

On October 2, 2009, LIN Television acquired Red McCombs Media, LP (“RMM”), an online advertising and media services company based in Austin, TX, which was rebranded as “LIN Digital” in the first quarter of 2013. In connection with the acquisition, we entered into an incentive compensation arrangement with certain key members of management. The arrangement provided payments to those employees based on a computation of EBITDA generated by LIN Digital during 2012. During the second quarter of 2013, we paid $8.9 million related to this incentive compensation arrangement.

Note 3 — Discontinued Operations

WWHO-TV

On February 16, 2012, we completed the sale of substantially all of the assets of WWHO-TV, our CW affiliate serving Columbus, OH, to Manhan Media, Inc. During the six months ended June 30, 2012, we recorded a loss on the sale of WWHO-TV of $0.4 million ($0.3 million, net of tax).

WUPW-TV

On April 21, 2012, we completed the sale of substantially all of the assets of WUPW-TV to WUPW, LLC. During the three and six months ended June 30, 2012, we recorded a gain on the sale of WUPW-TV of $18 million ($11.7 million, net of tax).

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

	Three Months Ended June 30,
	2013						2012
	WWHO- TV		WUPW- TV		Total		WWHO- TV		WUPW- TV			Total

Net revenues	$	—	$	—	$	—	$	—	$	418		$	418
Operating income (loss)	—		—		—		16		(58		)	(42		)
Net income (loss)	—		—		—		22		(98		)	(76		)

	Six Months Ended June 30,
	2013						2012
	WWHO- TV		WUPW- TV		Total		WWHO- TV			WUPW- TV			Total

Net revenues	$	—	$	—	$	—	$	440		$	2,193		$	2,633
Operating loss	—		—		—		(393		)	(1,166		)	(1,559		)
Net loss	—		—		—		(252		)	(766		)	(1,018		)

Note 4 —Investments

Joint Venture with NBCUniversal

As of December 31, 2012, we held a 20.38% interest in SVH, a joint venture with NBCUniversal, and accounted for our interest using the equity method as we did not have a controlling interest. SVH holds a 99.75% interest in SVO, which is the operating company that managed KXAS-TV and KNSD-TV, the television stations that comprised the joint venture.

As further described in Note 1 — “Basis of Presentation and Summary of Significant Accounting Policies” and Note 11 — “Commitments and Contingencies,” on February 12, 2013, LIN TV, LIN Television, and LIN Texas entered into, and simultaneously closed the transactions contemplated by the Transaction Agreement among subsidiaries of NBCUniversal, Comcast, the GE Parties, and SVH.

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Transaction, neither we nor any of our direct or indirect subsidiaries have any further investment in or obligations (funding or otherwise) related to SVH, including, without limitation, to make any other unsecured shortfall loans or payments under the GECC Note or the GECC Guarantee.

Note 5 — Intangible Assets

Goodwill totaled $203 million and $192.1 million at June 30, 2013 and December 31, 2012, respectively. The change in the carrying amount of goodwill during the six months ended June 30, 2013 was as follows (in thousands):

	Goodwill
Balance as of December 31, 2012	$	192,079
Acquisitions	10,919
Balance as of June 30, 2013	$	202,998

The following table summarizes the carrying amounts of intangible assets (in thousands):

	June 30, 2013					December 31, 2012
	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Broadcast licenses	$	536,515	$	—		$	536,515	$	—
Intangible assets subject to amortization (1)	85,950		(28,579		)	75,625		(16,071		)
Total	$	622,465	$	(28,579	)	$	612,140	$	(16,071	)

(1) Intangible assets subject to amortization are amortized on a straight line basis and primarily include network affiliations, acquired customer relationships, completed technology, brand names, non-compete agreements, internal-use software, favorable operating leases, and retransmission consent agreements.

There were no events during the six months ended June 30, 2013 and June 30, 2012 that warranted an interim impairment test of our indefinite-lived intangible assets, including goodwill.

Note 6 — Debt

We guarantee all of LIN Television’s debt. All of the consolidated 100% owned subsidiaries of LIN Television fully and unconditionally guarantee LIN Television’s senior secured credit facility, the 83/8% Senior Notes due 2018 (the “83/8% Senior Notes”), and the 63/8% Senior Notes due 2021 (the “63/8% Senior Notes”) on a joint-and-several basis.

Debt consisted of the following (in thousands)

	June 30,		December 31,
	2013		2012
Senior Secured Credit Facility:
Revolving credit loans	$	—	$	—
$121,875 and $125,000 Term loans, net of discount of $390 and $435 as June 30, 2013 and December 31, 2012, respectively	121,485		124,565
$315,800 and $257,400 Incremental term loans, net of discount of $1,852 and $2,020 as of June 30,2013 and December 31, 2012, respectively	313,948		255,380
83/8% Senior Notes due 2018	200,000		200,000
63/8% Senior Notes due 2021	290,000		290,000
Capital lease obligations	14,757		14,881
Other debt	4,748		5,401
Total debt	944,938		890,227
Less current portion	14,028		10,756
Total long-term debt	$	930,910	$	879,471

During the three and six months ended June 30, 2013, we paid $2.4 million and $4.7 million, respectively, of principal on the term loans and incremental term loans related to mandatory quarterly payments under our senior secured credit facility.

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In February 2013, pursuant to our existing credit agreement, we issued $60 million of new debt in the form of a tranche B-2 incremental term facility (the “Incremental Facility”). The Incremental Facility is a five-year term loan facility and is subject to the terms of LIN Television’s existing credit agreement, dated as of October 26, 2011, as amended on December 24, 2012, by and among LIN Television, JP Morgan Chase Bank as Administrative Agent and the banks and other financial institutions party thereto (the “Credit Agreement”). The proceeds of the Incremental Facility, as well as cash on hand and cash from revolving borrowings under the Credit Agreement, were used to fund the $100 million transferred to SVH by LIN Television pursuant to the JV Sale Transaction.

During the six months ended June 30, 2012, we recorded a loss on extinguishment of debt of $2.1 million to our consolidated statement of operations, consisting of a write-down of deferred financing fees and unamortized discount related to the redemption of our 6 ½% Senior Subordinated Notes and our 6 ½% Senior Subordinated Notes — Class B (“6 ½% Senior Subordinated Notes”).

The fair values of our long-term debt are estimated based on quoted market prices for the same or similar issues (Level 2 inputs of the three-level fair value hierarchy). The carrying amounts and fair values of our long-term debt were as follows (in thousands):

	June 30,		December 31,
	2013		2012
Carrying amount	$	930,181	$	875,346
Fair value	948,519		910,500

Note 7 — Fair Value Measurements

We record the fair value of certain financial assets and liabilities on a recurring basis. The following table summarizes the financial assets measured at fair value in the accompanying financial statements using the three-level fair value hierarchy as of June 30, 2013 and December 31, 2012 (in thousands):

	Significant Observable Inputs		Significant Unobservable Inputs
	(Level 2)		(Level 3)		Total
June 30, 2013:
Assets:
Deferred compensation related investments	$	650	$	2,887	$	3,537

December 31, 2012:
Assets:
Deferred compensation related investments	$	619	$	2,461	$	3,080

For level two investments, the fair value of our investments is based upon the fair value of the investments selected by employees. For level three investments, the fair value of our deferred compensation related investments is based on the cash surrender values of life insurance policies underlying our supplemental income deferral plan.

Note 8 — Retirement Plans

The following table shows the components of the net periodic pension cost and the contributions to our 401(k) Plan and the retirement plans (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
*Net periodic pension cost (benefit):*
Interest cost	$	1,314		$	1,364		$	2,628		$	2,728
Expected return on plan assets	(1,670		)	(1,549		)	(3,340		)	(3,098		)
Amortization of net loss	428			431			856			862
Net periodic cost	$	72		$	246		$	144		$	492
*Contributions:*
401(k) Plan	$	1,092		$	843		$	2,424		$	1,920
Defined contribution retirement plans	35			45			84			182
Defined benefit retirement plans	1,416			1,368			2,713			2,290
Total contributions	$	2,543		$	2,256		$	5,221		$	4,392

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See Note 11 — “Retirement Plans” in Item 15 of our Annual Report on Form 10-K for the year ended December 31, 2012 for a full description of our retirement plans.

Note 9 — Restructuring

During the three and six months ended June 30, 2013, we recorded a restructuring charge of $0.4 million and $2.5 million, respectively, for severance and related costs as a result of the integration of the television stations acquired during 2012. During the three and six months ended June 30, 2013, we made cash payments of $1.7 million and $2.3 million, respectively, related to these restructuring actions. We expect to make cash payments of approximately $0.1 million during the remainder of 2013 related to these restructuring activities.

Also, during the year ended December 31, 2012, we recorded a restructuring charge of $2.4 million as a result of the consolidation of certain activities at our stations. During the six months ended June 30, 2013, we made cash payments of $0.8 million related to these restructuring actions. We do not expect to make significant cash payments during the remainder of the year with respect to such transactions, as the majority of the restructuring activities are complete as of the date of this report.

	Severance and Related
Balance as of December 31, 2012	$	717
Charges	2,523
Payments	(3,107		)
Balance as of June 30, 2013	$	133

Note 10 — Income Taxes

We recorded a provision for income taxes of $5.2 million and $4.2 million for the three and six months ended June 30, 2013, respectively, compared to a provision for income taxes of $10.1 million and $12.9 million for the three and six months ended June 30, 2012, respectively. The decrease in the tax provision was primarily a result of the decrease in income from operations before taxes as compared to the same periods last year. Our effective income tax rate was 40.4% and 38.6% for the six months ended June 30, 2013 and June 30, 2012, respectively. The increase in the effective income tax rate was primarily due to certain acquisition related expenses incurred during the six months ended June 30, 2013 for which no tax benefit was recorded. We expect our effective income tax rate to range between 38% and 40% during the remainder of 2013, exclusive of any impact of the discrete items described below.

As of December 31, 2012, we had a valuation allowance of $18.2 million offsetting certain state net operating loss carryforwards and other state deferred tax assets, as we concluded that it was more likely than not that these deferred tax assets would not be realized. As of June 30, 2013, we believe that it is reasonably possible that some or all of this existing state valuation allowance may be reversed within the next twelve months, primarily due to the Company’s ability to generate sufficient taxable income prior to the expiration of the net operating loss carryforwards described above. Although realization is not assured, we expect that any such changes could have a material impact on our annual effective tax rate.

As a result of the JV Sale Transaction, we recognized $27.5 million and $0.9 million of incremental short-term deferred federal and state tax liabilities, respectively, in excess of those which were previously established. The financial impact of the JV Sale Transaction and corresponding tax expense of $28.4 million was reflected in our consolidated financial statements for the year ended December 31, 2012. During the first quarter of 2013, approximately $163 million of short term deferred liabilities were reclassified to income taxes payable upon the consummation of the JV Sale Transaction. As a result of the close of the Merger on July 30, 2013, approximately $115 million of this tax liability is expected to be extinguished, resulting in a remaining tax liability of approximately $48 million associated with the JV Sale Transaction. For further discussion regarding the JV Sale Transaction and the Merger, see Note 1 — “Basis of Presentation and Summary of Significant Accounting Policies” and Note 11 — “Commitments and Contingencies.”

Note 11 — Commitments and Contingencies

We lease land, buildings, vehicles and equipment pursuant to non-cancelable operating lease agreements and we contract for general services pursuant to non-cancelable operating agreements that expire at various dates through 2036. In addition, we have entered into commitments for future syndicated entertainment and sports programming. Future payments for these non-cancelable operating leases and agreements, and future payments associated with syndicated television programs as of June 30, 2013 are as follows (in thousands):

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Commitments

Year	Operating Leases and Agreements		Syndicated Television Programming			Total

2013	$	36,222	$	30,372		$	66,594
2014	35,451		20,709			56,160
2015	28,480		9,266			37,746
2016	13,585		5,503			19,088
2017	11,681		2,498			14,179
Thereafter	10,356		367			10,723
Total obligations	135,775		68,715			204,490
Less recorded contracts	—		(22,905		)	(22,905		)
Future contracts	$	135,775	$	45,810		$	181,585

Contingencies

GECC Guarantee and the Merger

GECC provided secured debt financing for the joint venture between NBCUniversal and us, in the form of an $815.5 million non-amortizing senior secured note due 2023 bearing interest at an initial rate of 8% per annum until March 1, 2013 and 9% per annum thereafter. The GECC Note was an obligation of the joint venture. As of December 31, 2012, we had a 20.38% equity interest in the joint venture and NBCUniversal had the remaining 79.62% equity interest, in which we and NBCUniversal each had a 50% voting interest. NBCUniversal operated two television stations, KXAS-TV, an NBC affiliate in Dallas, and KNSD-TV, an NBC affiliate in San Diego, pursuant to a management agreement. LIN TV had previously guaranteed the payment of principal and interest on the GECC Note.

On February 12, 2013, we, along with our wholly-owned subsidiaries, LIN Television and LIN Texas, entered into, and simultaneously closed the transactions contemplated by the Transaction Agreement with subsidiaries of NBCUniversal, the GE Parties, Comcast, and SVH. The Transaction Agreement effected a series of transactions whereby in exchange for LIN Television causing a $100 million capital contribution to be made to SVH (which was used to prepay a portion of the GECC Note), LIN TV was released from the GECC Guarantee and any further obligations relating to the shortfall funding agreements. Further, LIN Texas sold its 20.38% equity interest in SVH to affiliates of NBCUniversal, and the LIN parties transferred their rights to receivables related to the Shortfall Funding Loans for $1.00. The Transaction Agreement contains certain indemnifications and obligations with respect to representations and warranties; however, we do not anticipate that such obligations will result in any material liability to the Company.

We accrued for and expensed the $100 million capital contribution to SVH to secure the release of the guarantee and recorded the related tax effects in our consolidated financial statements as of December 31, 2012, because it represented a probable and estimable obligation of the Company. In February 2013, we entered into a $60 million Incremental Facility and utilized $40 million of cash on hand and borrowings under our revolving credit facility to fund the $100 million payment. As a result of the JV Sale Transaction, after utilizing all of our available Federal net operating loss (“NOL”) carryforwards to offset the taxable gain recognized in such transaction, we had an approximate $163 million income tax payable remaining as of June 30, 2013, approximately $115 million of which is expected to be extinguished as a result of the Merger described below.

On February 12, 2013, we also announced that LIN TV entered into the Merger Agreement with LIN LLC, a newly formed Delaware limited liability company and wholly owned subsidiary of LIN TV. On July 30, 2013, the shareholders of LIN TV approved the Merger and pursuant to the Merger Agreement, LIN TV was merged with and into LIN LLC with LIN LLC continuing as the surviving entity. The Merger enabled the surviving entity to be classified as a partnership for federal income tax purposes and such change in classification was treated as a liquidation of LIN TV for federal income tax purposes with the result that LIN TV realized a capital loss in its 100% equity interest in LIN Television.

As a result of the average of LIN TV’s opening and closing trading prices of its stock as of the close Merger, LIN TV realized a capital loss of approximately $316 million, which represents the difference between its tax basis in the stock of LIN Television, and the fair market value of this stock as of July 30, 2013. The capital loss realized and existing net operating losses will be used to offset a portion of the capital gain recognized in the JV Sale Transaction and as a result, we expect to realize tax savings of approximately $115 million, resulting in a remaining tax liability of approximately $48 million associated with the JV Sale Transaction. We expect to fund this tax liability during the fourth quarter of 2013 using a combination of cash on hand and amounts available under our revolving credit facility.

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Litigation

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

Note 12 — Related Party

We have a non-controlling investment in an interactive service provider that hosts our websites. During the three and six months ended June 30, 2013, we incurred charges from the provider of $0.8 million and $1.7 million, respectively, and made cash payments to the provider of $0.5 million and $1.3 million, respectively, for web hosting services and website development and customization. Additionally, during the three and six months ended June 30, 2012, we incurred charges from the provider of $0.4 million and $1.3 million, respectively, and made cash payments to the provider of $0.2 million and $0.7 million, respectively, for web hosting services and website development and customization.

Note 13 — Subsequent Events

On July 30, 2013, the shareholders of LIN TV approved the Merger and pursuant to the Merger Agreement, LIN TV was merged with and into LIN LLC with LIN LLC continuing as the surviving entity. The Merger enabled the surviving entity to be classified as a partnership for federal income tax purposes and such change in classification was treated as a liquidation of LIN TV for federal income tax purposes with the result that LIN TV realized a capital loss in its 100% equity interest in LIN Television.

Note 14 — Condensed Consolidating Financial Statements

LIN Television, a 100% owned subsidiary of LIN TV, is the primary obligor of our senior secured credit facility, our 83/8% Senior Notes and our 63/8% Senior Notes, which are further described in Note 6 — “Debt”. LIN TV fully and unconditionally guarantees all of LIN Television’s debt on a joint-and-several basis. Additionally, all of the consolidated 100% owned subsidiaries of LIN Television fully and unconditionally guarantee LIN Television’s senior secured credit facility, our 83/8% Senior Notes and our 63/8% Senior Notes on a joint-and-several basis, subject to customary release provisions. There are certain contractual restrictions on LIN Television’s ability to obtain funds in the form of dividends or loans from the non-guarantor subsidiaries.

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

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Condensed Consolidating Balance Sheet

As of June 30, 2013

(in thousands)

	LIN TV Corp.			LIN Television Corporation			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating/ Eliminating Adjustments			LIN TV Corp. Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—		$	17,962		$	472	$	1,365	$	—		$	19,799
Accounts receivable, net	—			84,014			31,979		16,949		—			132,942
Income taxes receivable	—			2,550			—		—		(2,550		)	—
Deferred income tax assets	—			—			678		92		(381		)	389
Other current assets	—			4,709			868		1,778		—			7,355
Total current assets	—			109,235			33,997		20,184		(2,931		)	160,485
Property and equipment, net	—			189,748			37,484		4,972		—			232,204
Deferred financing costs	—			17,961			—		103		—			18,064
Goodwill	—			169,057			18,518		15,423		—			202,998
Broadcast licenses, net	—			—			493,814		42,701		—			536,515
Other intangible assets, net	—			39,994			2,307		15,070		—			57,371
Advances to consolidated subsidiaries	—			5,503			1,171,482		—		(1,176,985		)	—
Investment in consolidated subsidiaries	—			1,576,282			—		—		(1,576,282		)	—
Other assets	—			54,366			2,721		1,553		(44,443		)	14,197
Total assets	$	—		$	2,162,146		$	1,760,323	$	100,006	$	(2,800,641	)	$	1,221,834

LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Current portion of long-term debt	$	—		$	12,802		$	—	$	1,226	$	—		$	14,028
Accounts payable	—			8,603			4,570		3,081		—			16,254
Income taxes payable	—			—			162,795		39		(2,550		)	160,284
Accrued expenses	—			49,256			6,767		2,083		—			58,106
Deferred income tax liabilities	—			381			—		—		(381		)	—
Program obligations	—			5,872			1,113		2,004		—			8,989
Total current liabilities	—			76,914			175,245		8,433		(2,931		)	257,661
Long-term debt, excluding current portion	—			927,243			—		3,667		—			930,910
Deferred income tax liabilities	—			20,960			29,504		1,286		—			51,750
Program obligations	—			2,008			267		1,798		—			4,073
Intercompany liabilities	—			1,171,482			1,006		4,497		(1,176,985		)	—
Accumulated losses in excess of investment in consolidated subsidiaries	77,331			—			—		—		(77,331		)	—
Other liabilities	—			40,870			55		44,443		(44,443		)	40,925
Total liabilities	77,331			2,239,477			206,077		64,124		(1,301,690		)	1,285,319

Redeemable noncontrolling interest	—			—			—		13,846		—			13,846

Total stockholders’ (deficit) equity	(77,331		)	(77,331		)	1,554,246		22,036		(1,498,951		)	(77,331		)

Total liabilities, redeemable noncontrolling interest and stockholders’ (deficit) equity	$	—		$	2,162,146		$	1,760,323	$	100,006	$	(2,800,641	)	$	1,221,834

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Condensed Consolidating Balance Sheet

As of December 31, 2012

(in thousands)

	LIN TV Corp.			LIN Television Corporation			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating/ Eliminating Adjustments			LIN TV Corp. Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—		$	44,625		$	573	$	1,109	$	—		$	46,307
Accounts receivable, net	—			87,103			31,144		7,903		—			126,150
Deferred income tax assets	—			67,412			—		97		(67,509		)	—
Other current assets	—			4,850			554		1,459		—			6,863
Total current assets	—			203,990			32,271		10,568		(67,509		)	179,320
Property and equipment, net	—			197,560			39,534		4,832		—			241,926
Deferred financing costs	—			19,020			—		115		—			19,135
Goodwill	—			169,057			18,518		4,504		—			192,079
Broadcast licenses, net	—			—			493,814		42,701		—			536,515
Other intangible assets, net	—			48,897			2,775		7,882		—			59,554
Advances to consolidated subsidiaries	—			6,746			1,345,971		—		(1,352,717		)	—
Investment in consolidated subsidiaries	—			1,554,903			—		—		(1,554,903		)	—
Other assets	—			53,987			2,552		1,626		(45,280		)	12,885
Total assets	$	—		$	2,254,160		$	1,935,435	$	72,228	$	(3,020,409	)	$	1,241,414

LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Current portion of long-term debt	$	—		$	9,243		$	—	$	1,513	$	—		$	10,756
Accounts payable	—			14,335			3,385		1,235		—			18,955
Income taxes payable	—			372			394		—		—			766
Accrued expenses	—			37,020			115,605		621		—			153,246
Deferred income tax liabilities	—			—			235,728		—		(67,509		)	168,219
Program obligations	—			7,479			1,106		2,185		—			10,770
Total current liabilities	—			68,449			356,218		5,554		(67,509		)	362,712
Long-term debt, excluding current portion	—			875,512			—		3,959		—			879,471
Deferred income tax liabilities	—			10,910			29,000		646		—			40,556
Program obligations	—			2,222			92		1,967		—			4,281
Intercompany liabilities	—			1,345,971			3,842		2,904		(1,352,717		)	—
Accumulated losses in excess of investment in consolidated subsidiaries	91,564			—			—		—		(91,564		)	—
Other liabilities	—			42,660			56		45,280		(45,280		)	42,716
Total liabilities	91,564			2,345,724			389,208		60,310		(1,557,070		)	1,329,736

Redeemable noncontrolling interest	—			—			—		3,242		—			3,242

Total stockholders’ (deficit) equity	(91,564		)	(91,564		)	1,546,227		8,676		(1,463,339		)	(91,564		)

Total liabilities, redeemable noncontrolling interest and stockholders’ (deficit) equity	$	—		$	2,254,160		$	1,935,435	$	72,228	$	(3,020,409	)	$	1,241,414

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Condensed Consolidating Statement of Operations

For the Three Months Ended June 30, 2013

(in thousands)

	LIN TV Corp.		LIN Television Corporation		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Consolidating/ Eliminating Adjustments			LIN TV Corp. Consolidated
Net revenues	$	—	$	106,591	$	46,653	$	14,952	$	(3,850	)	$	164,346

Operating expenses:
Direct operating	—		35,858		19,676

LIN TV CORP. 10-Q