AsTable a result of the purchase and redemption of our 2012 Notes, we recorded a pre-tax charge of $10,408 during the quarter ended June 30, 2010 related to the early repayment of the 2012 Notes. Contents

Table of Contents

Table of Contents

AsTable a result of the purchase and redemption of our 2012 Notes, we recorded a pre-tax charge of $10,408 during the quarter ended June 30, 2010 related to the early repayment of the 2012 Notes. Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended September 30, ~~2012~~2013

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 333-02302

ALLBRITTON COMMUNICATIONS COMPANY

(Exact name of registrant as specified in its charter)

Delaware

74-1803105

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

1000 Wilson Boulevard, Suite 2700

Arlington, VA 22209

(Address of principal executive offices, including zip code)

(703) 647-8700

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

~~Securities~~Indicate ~~registered~~by ~~pursuant~~check tomark ~~Section 12(g)~~if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act:. YES ¨ NO x

~~None~~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 x(1) NO ¨

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

YES ¨ NO x

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 x(1) NO ¨

Indicate by check mark whether this 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 ¨ NO x (1)

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES x NO ¨

Indicate by check mark if the 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 the registrant’s knowledge, in definitive proxy of information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

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.

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

YES ¨ NO x

The aggregate market value of the registrant’s Common Stock held by non-affiliates is zero.

As of December 1312, ~~2012~~2013, there were 20,000 shares of Common Stock, par value $.05 per share, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None

(1) Although the Company has not been subject to such filing requirements for the past 90 days, it has filed all reports required to be filed by Section 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months. Pursuant to Section 15(d) of the Securities Exchange Act of 1934, the Company’s duty to file reports is automatically suspended as a result of having fewer than 300 holders of record of each class of its debt securities outstanding as of October 1, ~~2012~~2013, but the Company has agreed under the terms of certain long-term debt to continue these filings in the future.

As used herein, the terms “Allbritton,” “our,” “us,” “we” or the “Company” refer to Allbritton Communications Company and its subsidiaries, and “ACC” refers solely to Allbritton Communications Company. Depending on the context in which they are used, the following “call letters” refer either to the corporate owner of the station indicated or to the station itself: “WJLA” and “NewsChannel 8” together refer to WJLA-TV/NewsChannel 8, a division of ACC (operator of WJLA-TV and NewsChannel 8, Washington, D.C.); “WHTM” refers to Harrisburg Television, Inc. (licensee of WHTM-TV, Harrisburg, Pennsylvania); “KATV” refers to KATV, LLC (licensee of KATV, Little Rock, Arkansas); “KTUL” refers to KTUL, LLC (licensee of KTUL, Tulsa, Oklahoma); “WCIV” refers to Charleston Television, LLC, successor-in-interest to WCIV, Inc. (licensee of WCIV, Charleston, South Carolina); “WSET” refers to WSET, Incorporated (licensee of WSET-TV, Lynchburg, Virginia); “WCFT,” “WBMA” and “WJSU” refer to TV Alabama, Inc. (licensee of WCFT-TV, Tuscaloosa, Alabama, WBMA-LD, Birmingham, Alabama and WJSU-TV, Anniston, Alabama). The term “POLITICO” refers to POLITICO LLC, successor-in-interest to Capitol News Company, LLC. The term “ACCL” refers to ACC Licensee, LLC, successor-in-interest to ACC Licensee, Inc. (licensee of WJLA). The term “ATP” refers to Allbritton Television Productions, Inc. and the term “Perpetual” refers to Perpetual Corporation, which is controlled by ~~Joe~~the L. Allbritton ~~and his immediate~~ family or trusts for their benefit (“the Allbritton family”). “AG” refers to Allbritton Group, LLC, which is controlled by Perpetual and is ACC’s parent. “Allfinco” refers to Allfinco, Inc., a wholly-owned subsidiary of ACC and parent company of Harrisburg Television, Inc. and TV Alabama, Inc.

TABLE OF CONTENTS

		Page
Part I
Item 1.	Business		1
Item 1A.	Risk Factors		18
Item 1B.	Unresolved Staff Comments		27
Item 2.	Properties		28
Item 3.	Legal Proceedings		30
Part II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		30
Item 6.	Selected Consolidated Financial Data		31
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		33
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk		5149
Item 8.	Consolidated Financial Statements and Supplementary Data		5149
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		5149
Item 9A.	Controls and Procedures		5149
Item 9B.	Other Information		5250
Part III
Item 10.	Directors, Executive Officers and Corporate Governance		5351
Item 11.	Executive Compensation		5653
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		5957
Item 13.	Certain Relationships and Related Transactions, and Director Independence		6058
Item 14.	Principal Accounting Fees and Services		6362
Part IV
Item 15.	Exhibits, Financial Statement Schedules		6463

THIS ANNUAL REPORT ON FORM 10-K, INCLUDING ITEM 7 “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS,” CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, THAT ARE NOT HISTORICAL FACTS AND INVOLVE A NUMBER OF RISKS AND UNCERTAINTIES. THERE ARE A NUMBER OF FACTORS THAT COULD CAUSE OUR ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE PROJECTED IN SUCH FORWARD-LOOKING STATEMENTS. THESE FACTORS INCLUDE, WITHOUT LIMITATION, OUR OUTSTANDING INDEBTEDNESS AND OUR HIGH DEGREE OF LEVERAGE; THE RESTRICTIONS IMPOSED ON US BY THE TERMS OF OUR INDEBTEDNESS; THE HIGH DEGREE OF COMPETITION FROM BOTH OVER-THE-AIR BROADCAST STATIONS AND PROGRAMMING ALTERNATIVES SUCH AS CABLE TELEVISION, WIRELESS CABLE, IN-HOME SATELLITE DISTRIBUTION SERVICE, PAY-PER-VIEW SERVICES, INTERNET VIDEO AND HOME VIDEO AND ENTERTAINMENT SERVICES; THE IMPACT OF NEW TECHNOLOGIES; CHANGES IN FEDERAL COMMUNICATIONS COMMISSION (“FCC OR “THE COMMISSION”) REGULATIONS; FCC LICENSE RENEWAL REQUIREMENTS; DECREASES IN THE DEMAND FOR ADVERTISING DUE TO WEAKNESS IN THE ECONOMY; AND THE VARIABILITY OF OUR QUARTERLY RESULTS AND OUR SEASONALITY. SEE ITEM 1A “RISK FACTORS.”

ALL WRITTEN OR ORAL FORWARD-LOOKING STATEMENTS ATTRIBUTABLE TO THE COMPANY ARE EXPRESSLY QUALIFIED BY THE FOREGOING CAUTIONARY STATEMENTS. READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS WHICH REFLECT MANAGEMENT’S VIEW ONLY AS OF THE DATE HEREOF.

PART I

ITEM 1. OUR BUSINESS

The Company

We own and operate ABC network-affiliated television stations serving six geographic markets: WJLA in Washington, D.C.; WHTM in Harrisburg, Pennsylvania; WCFT in Tuscaloosa, Alabama, WJSU in Anniston, Alabama and WBMA-LD, a low power television station licensed to Birmingham, Alabama (we operate WCFT and WJSU in tandem with WBMA-LD serving the viewers of the Birmingham, Tuscaloosa and Anniston market as a single programming source); ~~WHTM in Harrisburg, Pennsylvania;~~ KATV in Little Rock, Arkansas; KTUL in Tulsa, Oklahoma; and WSET in Lynchburg, Virginia. Our owned and operated stations broadcast to the 8th, ~~42nd~~43rd, ~~43rd~~44th, 56th, ~~59th~~60th and ~~68th~~66th largest national media markets in the United States, respectively, as defined by The Nielsen Company (“Nielsen”), and reach approximately 4.7% of United States television households. We also own NewsChannel 8, which provides 24-hour per day basic cable television programming primarily focused on regional and local news for the Washington, D.C. metropolitan area. The operations of NewsChannel 8 are integrated with WJLA.

We also owned and operated WCIV, an ABC network-affiliated television station in Charleston, South Carolina, from March 1, 1996 until August 1, 2009, at which time the equity interests of WCIV were distributed to Perpetual. Additionally, we owned and operated POLITICO, a specialized newspaper and Internet site (politico.com), from its launch in January 2007 until November 13, 2009, at which time the equity interests of POLITICO were distributed to Perpetual. ~~See “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”~~

Our stations are owned and operated by ACC (WJLA-TV/NewsChannel 8), Harrisburg Television, Inc. (WHTM), KATV, LLC (KATV), KTUL, LLC (KTUL), WSET, Incorporated (WSET), and TV Alabama, Inc. (WCFT, WJSU and WBMA). Each company other than ACC is either a directly or indirectly wholly-owned subsidiary of ACC. The Company was founded in 1974 and is a subsidiary of AG, which is ~~controlled~~a bysubsidiary of Perpetual Corporation, which in turn is controlled by the Allbritton family. ACC and its subsidiaries are Delaware corporations or limited liability companies. Our corporate headquarters are located at 1000 Wilson Boulevard, Suite 2700, Arlington, VA 22209, and our telephone number at that address is (703) 647-8700.

On July 28, 2013, the Allbritton family entered into an agreement to sell the stock of Perpetual and the equity interest of WCIV to the Sinclair Broadcast Group. Completion of the transaction is subject to customary closing conditions, including FCC approval and antitrust clearance, as applicable, and is expected to close during the first or second calendar quarter of 2014, subject to the satisfaction of these conditions. See also “Liquidity and Capital Resources—Purchase Agreement.”

Television Industry Background

General. Commercial television broadcasting began in the United States on a regular basis in the 1940s. Currently, there are a limited number of channels available for broadcasting in any one geographic area, and the license to operate a broadcast television station is granted by the FCC. Based upon interference criteria developed by the FCC, licenses are allocated in channels of 6 MHz each in either the VHF band (channels 2-13) or the UHF band (channels 14-69) of the spectrum. 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. For over 70 years, broadcasters distributed their programming using an analog technological standard. In June 2009, stations changed the method of transmitting programming on these channels from analog to digital. Digital technologies provide cleaner video and audio signals as well as the ability to transmit “high definition television” with theater screen aspect ratios, higher resolution video and “noise-free” sound. Digital transmission also permits dividing the transmission frequency into multiple discrete channels of standard definition television, permitting the telecast of more than one “channel” of programming and/or other data services including mobile telecasting.

Revenue. Television station revenues are primarily derived from local, regional and national advertisers who pay for commercial advertising and, to a lesser extent, from retransmission consent fees from multi-channel, video program distributors (“MVPDs”) such as cable television operators, direct broadcast satellite (“DBS”) providers and telephone company (“telco”) operators, from program syndicators for the broadcast of programming and from other broadcast-related activities.

Revenue. Television station revenues are primarily derived from local, regional and national advertisers who pay for commercial advertising and, to a lesser extent, from retransmission consent fees from multi-channel, video program distributors (“MVPDs”) such as cable television operators, direct broadcast satellite (“DBS”) providers and telephone company (“telco”) operators, from program syndicators for the broadcast of programming and from other broadcast-related activities.

Advertising rates for television commercials are set based upon a variety of factors, including:

•

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

•

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

•

the number of advertisers competing for the available time;

•

the availability of alternative advertising media in the market area;

•

a station’s overall ability to attract viewers in its market area; and

•

the station’s ability to attract viewers among particular demographic groups that an advertiser may be targeting.

Advertising rates are also affected by an aggressive and knowledgeable sales force and the development of projects, features and programs that tie advertiser messages to programming. Because broadcast television stations rely on advertising revenues, they are sensitive to cyclical changes in the economy. The size of advertisers’ budgets, which are affected by broad economic trends, affect both the broadcast industry in general and the revenues of individual broadcast television stations.

Broadcast television stations compete for local and national advertising revenues with other television stations in their respective markets as well as with other advertising media, such as newspapers, radio, magazines, outdoor advertising, transit advertising, Internet/website, yellow page directories, direct mail and local cable systems. In addition, our stations compete for national advertising revenues with broadcast and cable television networks, program syndicators, satellite distributors and Internet websites.

Advertising revenue for television stations is generally seasonal due to, among other things, increases in retail advertising in the period leading up to and including the holiday season and active advertising in the spring. Additionally, advertising revenue is cyclical, benefiting in even-numbered calendar years from advertising placed by candidates for political offices and issue-oriented advertising, and demand for advertising time in Olympic broadcasts. The seasonality and cyclicality inherent in our business can make it difficult to estimate future operating results based on the previous results of any specific quarter.

Additional revenues are generated from advertising produced by television stations’ Internet websites. Sponsorships of web pages or sections as well as general advertising banners account for a relatively small but growing portion of revenues.

Audience Measurement. Nielsen, which provides audience-measuring services, periodically publishes data on estimated audiences for television stations in the various DMAs throughout the country. These estimates are expressed in terms of both the percentage of the total potential audience in the DMA viewing a station (the station’s “rating”) and the percentage of the audience actually watching television (the station’s “share”). Nielsen provides such data on the basis of total television households and selected demographic groupings in the DMA. Nielsen uses three methods of determining a station’s ratings and share. In most larger DMAs, ratings are determined by a combination of meters connected directly to selected household television sets and weekly viewer-completed paper diaries of television viewing (so called “set meter” measurement), while in smaller markets ratings are determined by paper diaries only. A select

potential audience in the DMA viewing a station (the station’s “rating”) and the percentage of the audience actually watching television (the station’s “share”). Nielsen provides such data on the basis of total television households and selected demographic groupings in the DMA. Nielsen uses three methods of determining a station’s ratings and share. In most larger DMAs, ratings are determined by a combination of meters connected directly to selected household television sets and weekly viewer-completed paper diaries of television viewing (so called “set meter” measurement), while in smaller markets ratings are determined by paper diaries only. A select number of the largest markets are measured by people meter technology (so called “local people meter” measurement). The local people meter records individual viewing behavior in real time, producing viewer demographic data on a daily basis. Combined with the ability to measure delayed viewing on digital video recording devices (“DVRs”), Nielsen’s local people meters can provide viewership for programs viewed live, on the same day and combined over seven days. Of the market areas in which we conduct business, Birmingham, Alabama and Tulsa, Oklahoma are set metered markets while Washington, D.C. is a local people metered market. The remaining markets are paper diary markets. Nielsen has announced its intention to convert all set metered markets to local people meter measurement and to convert all of the top 125 markets still using paper diaries to a new “mailable meter” form of electronic measurement; however, we do not anticipate any changes in audience measurement methodologies in our markets during Fiscal ~~2013~~2014.

Programming

Network. Historically, three major commercial broadcast networks—ABC, NBC and CBS—dominated broadcast television. In the past 25 years, FOX has evolved into the fourth major network, although the hours of network programming produced by FOX for its affiliates are fewer than those produced by the other three major networks. In addition, CW, ION and myNetworkTV have been launched as new broadcast television networks, along with specialized networks Telemundo, Univision and TV Azteca.

The affiliation by a station with one of the four major networks has a significant impact on the composition of the station’s programming, revenues, expenses and operations. A typical affiliate station receives approximately 9 to 13 hours of each day’s programming from the network. This programming is provided to the affiliate by the network in exchange for a substantial majority of the advertising time sold during the airing of network programs. The network then sells this advertising time for its own account. The affiliate retains the revenues from time sold during breaks in and between network programs and during programs produced by the affiliate or purchased from non-network sources. Historically, there was also a compensation element to some network affiliation agreements, with cash payments from the network to the affiliate (“network compensation”). In recent years, network compensation has almost completely been eliminated from network affiliation agreements. In its place, programming or license fees are now commonly paid to the network by the affiliate, or in some instances the network shares in retransmission consent revenue received by the station from MVPDs.

An affiliate of CW, myNetworkTV or ION network receives a smaller portion of each day’s programming from its network compared to an affiliate of ABC, CBS, NBC or FOX. As a result, affiliates of CW, myNetworkTV or ION network must purchase or produce a greater amount of their programming, resulting in generally higher programming costs. These stations, however, retain a larger portion of the inventory of advertising time from that purchased or produced programming, which may offset their higher programming costs.

In contrast to a network affiliated station, an independent station purchases or produces all of the programming that it broadcasts, generally resulting in higher programming costs, although

~~the~~affiliates ~~independent~~of ~~station is~~CW, inmyNetworkTV ~~theory,~~or ~~able~~ION tonetwork ~~retain~~must ~~its~~purchase ~~entire~~or ~~inventory~~produce ofa ~~advertising~~greater ~~time~~amount ~~and all~~ of ~~the~~their ~~revenue~~programming, ~~obtained~~resulting ~~from~~in ~~the~~generally ~~sale~~higher ofprogramming ~~such time~~costs. ~~“Barter”~~These ~~and cash-plus-barter arrangements~~stations, however, ~~are~~retain ~~also popular among all stations. Under barter arrangements,~~ a larger ~~program~~portion ~~distributor~~of ~~can~~the ~~receive~~inventory of advertising time infrom ~~exchange~~that ~~for~~purchased ~~the~~or ~~programming~~produced ~~it supplies~~programming, ~~with~~which ~~the~~may ~~station~~offset ~~paying~~their nohigher ~~fee or a reduced fee for such~~ programming costs.

In contrast to a network affiliated station, an independent station purchases or produces all of the programming that it broadcasts, generally resulting in higher programming costs, although the independent station is, in theory, able to retain its entire inventory of advertising time and all of the revenue obtained from the sale of such time. “Barter” and cash-plus-barter arrangements, however, are also popular among all stations. Under barter arrangements, a program distributor can receive advertising time in exchange for the programming it supplies, with the station paying no fee or a reduced fee for such programming.

Traditional network programming generally achieves higher audience levels than syndicated programs aired by independent stations. However, since greater amounts of advertising time are retained and available for sale by FOX affiliates, smaller network affiliates and independent stations, those stations typically achieve a share of the television market advertising revenues greater than their share of the market area’s audience. Consolidation of cable system ownership in discrete markets (so-called “clustering”) has enabled some cable operators to more efficiently sell time to local advertisers as well as to bid on local sports programming in competition with traditional broadcasters.

Public broadcasting outlets in many instances have relationships with the national Public Broadcasting Network and with state-funded regional networks. These networks are non-profit and “non-commercial,” but are permitted to seek some commercial funding through “enhanced underwriting” rules promulgated by the FCC. In most communities, these stations compete with commercial broadcasters for viewers but not directly for advertising dollars.

Non-Network. To supplement programming offered by a network or to program the station as an independent, a television broadcaster may acquire programming through cash and/or barter arrangements. A cash license fee is paid to a program distributor for “first run” syndicated programming (such as “Dr. Oz” or “Jeopardy”) sold independent of network affiliation or syndicated “off-network” programs, commonly referred to as “reruns.” Under such license agreements, stations retain a majority of the commercial availabilities in the programs.

Program Distribution. In addition to over-the-air broadcast distribution, viewers have several alternatives to receive television programming.

Cable. Through the 1970s, network television broadcasting enjoyed virtual dominance in viewership and television advertising revenues because network-affiliated stations only competed with each other in local markets. Beginning in the 1980s, this level of dominance began to change as the FCC authorized more local stations and marketplace choices expanded with the growth of independent stations and cable television services.

Cable television systems were first constructed in significant numbers in the 1970s and were initially used to retransmit broadcast television programming to paying subscribers in areas ~~with poor~~ broadcast signal reception. In the aggregate, cable-originated programming has emerged as a significant competitor for viewers of broadcast television programming, although no single cable programming network regularly attains audience levels close to any of the major broadcast networks. The advertising share of cable networks has steadily increased since the 1970s as a result of the growth in cable penetration (the percentage of television households that are connected to a cable system) and the increase in the number of new cable networks. The ability to store programming for later viewing has also led to an increase in “video-on-demand”

with poor broadcast signal reception. In the aggregate, cable-originated programming has emerged as a significant competitor for viewers of broadcast television programming, although no single cable programming network regularly attains audience levels close to any of the major broadcast networks. The advertising share of cable networks has steadily increased since the 1970s as a result of the growth in cable penetration (the percentage of television households that are connected to a cable system) and the increase in the number of new cable networks. The ability to store programming for later viewing has also led to an increase in “video-on-demand” viewing by cable subscribers. Notwithstanding such increases in cable network viewership and advertising, over-the-air broadcast network stations remain the predominantly viewed networks used for mass market television advertising.

Telcos. Cable system operators have traditionally enjoyed near monopoly status as terrestrial distributors of multi-channel programming. “Overbuilders” (competing local distributors in the same local franchise area) were rare based upon the high costs associated with the cable system infrastructure. Recently, however, some telcos have begun using their fiber optic facilities to begin offering multi-channel programming in competition with the local franchised cable systems. These telcos seek program carriage arrangements with local broadcasters and other national program distributors.

Satellite. In the 1990s, DBS service was introduced as a new competitive distribution method. Home users purchase or lease satellite dish receiving equipment and subscribe to a monthly service of programming options. Local stations, under specified conditions, are carried on satellites which then retransmit those signals back to the originating market. As DBS providers, such as DirecTV and DISH Network, continue to expand their facilities, an increasing number of local stations are now carried as “local-to-local” signals, aided by a legal requirement that mandates the carriage of all local broadcast signals if one is retransmitted. All of our broadcast stations are currently carried on the two primary DBS systems.

Internet. Program distribution via the Internet recently has become an alternative to traditional television set viewing. Some broadcast networks and their affiliates provide “video players” on their websites allowing viewing of recently aired programs. This video-on-demand-type service (sometimes referred to as “over-the-top” television) permits viewers to choose the program or channel from a library of shows. Hulu~~.com~~ is an example of a website offering commercial supported streaming video from the NBC, Fox and ABC broadcast networks. Additionally, services like Google TV and Apple TV have emerged as “Smart TV” platforms, which support streaming video from a variety of sources. It is uncertain at this time to what extent those new services will be a measurable competitor to us.

Video Recording. In addition to cable, telco, satellite and Internet program distribution, there has been substantial growth in video recording technology and playback systems, television game devices and new wireless/Internet connected devices permitting “podcasting,” wireless video distribution systems, satellite master antenna television systems and some low-power services. DVR or similar services have become standard home technology and permit viewers to “time-shift” their program viewing and no longer rely solely on broadcast “appointment” television viewing habits.

Digital Subchannels. Local broadcast stations themselves may now use excess capacity within their digital television channel to “multicast” discrete program offerings. Television broadcasters are beginning to program these subchannels with various forms of commercial informational and entertainment programs. Among our stations, DTV subchannels are programmed as follows: Four carry the Retro Television Network, two stations carry the LiveWell Network, one station carries The Nashville Network, and five provide weather programming.

Digital Subchannels. Local broadcast stations themselves may now use excess capacity within their digital television channel to “multicast” discrete program offerings. Television broadcasters are beginning to program these subchannels with various forms of commercial informational and entertainment programs. Among our stations, DTV subchannels are programmed as follows: Four carry the Retro Television Network, two stations carry the LiveWell Network, one station carries Memorable Entertainment Television, one station carries The Heartland Network (formerly the Nashville Network), and four provide weather programming.

Competition

Competition in the television industry, including each of the market areas in which our stations compete, takes place on several levels: competition for audience, programming (including news) and advertisers. Additional factors material to a television station’s competitive position include signal coverage and assigned frequency. The television broadcasting industry is continually faced with technological change and innovation, the possible rise or fall in popularity of competing entertainment and communications media and actions of federal regulatory bodies, including the FCC, any of which could possibly have a material adverse effect on our operations.

Audience. Stations compete for audience on the basis of program popularity, which has a direct effect on advertising rates. A substantial portion of the daily programming at our stations is supplied by the ABC network. In those periods, the stations are totally dependent upon the performance of the ABC network programs in attracting viewers. Non-network time periods are programmed by the station with a combination of self-produced news, public affairs and entertainment programming, including news and syndicated programs purchased for cash, cash and barter or barter-only. Minor network stations, the number of which has increased significantly over the past decade, have also emerged as viable competitors for television viewership share, particularly as the result of the availability of first-run major network-quality programming.

The development of methods of television transmission other than over-the-air broadcasting and, in particular, the growth of MVPDs and video recording has significantly altered competition for audience share in the television industry. These alternative transmission methods can increase competition for a broadcasting station both by bringing into its market area distant broadcasting signals not otherwise available to the station’s audience and by serving as a distribution system for programming originated on the cable or DBS systems. Although historically cable operators have not sought to compete with broadcast stations for a share of the local news audience, cable operators have made recent inroads to this market as well, particularly in the area of local sports channels. Increased competition for local audiences could have an adverse effect on our advertising revenues.

Other sources of competition for audience include home entertainment systems (including video recording and playback systems, television game devices and new wireless/Internet connected devices permitting “podcasting”), wireless video distribution systems, satellite master antenna television systems and some low-power services. In addition, local broadcast stations themselves using excess capacity within their digital television channel to “multicast” discrete program offerings have added to the number of outlets vying for audience. Programming alternatives, especially news, available on the Internet also provide non-broadcast alternatives available to the potential broadcast television audience. Video programming via the Internet is now also emerging as an option for viewers who wish to see full-length episodes of broadcast shows or brief clips of alternative fare on computers or other video devices. Each of the major broadcast networks offer “video player” buttons on their websites or those of broadcast affiliates. In addition, multiple Internet sites such as YouTube.com offer alternative video programming.

program offerings have added to the number of outlets vying for audience. Programming alternatives, especially news, available on the Internet also provide non-broadcast alternatives available to the potential broadcast television audience. Video programming via the Internet is now also emerging as an option for viewers who wish to see full-length episodes of broadcast shows or alternative fare on computers or other video devices. Each of the major broadcast networks offer “video player” buttons on their websites or those of broadcast affiliates. In addition, multiple Internet sites such as YouTube, Netflix and Hulu offer alternative video programming.

Further advances in technology may increase competition for household audiences and advertisers. Video compression techniques now under development for use with current cable channels, over-the-top Internet-relayed video and direct broadcast satellites are expected to reduce the bandwidth required for television signal transmission. These compression techniques, as well as other technological developments, are applicable to all video delivery systems, including 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. This ability to reach very defined audiences is expected to alter the competitive dynamics for advertising expenditures. The advent of “mobile” technology potentially has the ability to increase overall audience size with viewers able to watch programs from smart phones and other mobile devices such as iPads. Although that technology includes use of part of the broadcast channel not employed in delivering a station’s primary and digital subchannels, other delivery systems reliant on broadband, Internet transmission will compete for that audience. We are unable to predict the effect that technological changes will have on the broadcast television industry or the future results of our operations.

Programming. Competition for local programming involves negotiating with national program distributors or syndicators which sell first-run and rerun packages of programming. Our stations compete against in-market broadcast station competitors for off-network reruns (such as “Two and a Half Men”) and first-run products (such as “Katie”) for exclusive access to those programs. Cable systems generally do not compete with local stations for programming; however, local cable operators are increasingly consolidating ownership of systems within various markets, enabling them to bid on local sports programming in competition with traditional broadcasters. In addition, various national cable networks from time to time have acquired programs that would have otherwise been offered to local television stations. Competition for exclusive news stories and features is also endemic to the television industry. In addition, national or network programming, once exclusive to broadcast television, may now appear first or only on national MVPD channels or via Internet delivered channels. These multichannel video program distributors are now better able to bid competitively for exclusive access to programming in part because they can recover their programming costs both with advertising revenue and direct or indirect subscriber fees and in part because they are not subject to regulatory content restrictions.

Advertising. Advertising rates are set based upon a variety of factors, including the size and demographic makeup of the market served by the station, a program’s popularity among viewers whom an advertiser wishes to attract, the number of advertisers competing for the available time, the availability of alternative advertising media in the market area, a station’s overall ability to attract viewers in its market area and the station’s ability to attract viewers among particular demographic groups that an advertiser may be targeting. Advertising rates are also affected by an aggressive and knowledgeable sales force and the development of projects, features and programs that tie advertiser messages to programming. Our television stations compete for local and national advertising revenues with other television stations in their respective markets as well as with other advertising media, such as newspapers, radio, magazines, outdoor advertising, transit advertising, yellow page directories, direct mail and local MVPD operators. In addition, our stations compete for national advertising revenues with broadcast and cable television networks, program syndicators and Internet websites.

available time, the availability of alternative advertising media in the market area, a station’s overall ability to attract viewers in its market area and the station’s ability to attract viewers among particular demographic groups that an advertiser may be targeting. Advertising rates are also affected by an aggressive and knowledgeable sales force and the development of projects, features and programs that tie advertiser messages to programming. Our television stations compete for local and national advertising revenues with other television stations in their respective markets as well as with other advertising media, such as newspapers, radio, magazines, outdoor advertising, transit advertising, yellow page directories, direct mail and local MVPD operators. In addition, our stations compete for national advertising revenues with broadcast and cable television networks, program syndicators and Internet websites. Competition for advertising dollars in the broadcasting industry occurs primarily in individual market areas. Generally, a broadcast television station in one market does not compete with stations in other market areas. Our television stations are located in highly competitive market areas.

Station Information

The following table sets forth general information for each of our owned stations as of May ~~2012~~2013, unless otherwise indicated:

Designated Market Area	Station	NetworkAffiliation	DigitalChannelFrequency		MarketRankorDMA(1)		~~MarketRankorDMA(1)~~		TotalCommercialCompetitorsin Market (2)		~~TotalCommercialCompetitorsin Market(2)~~		StationAudienceShare (3)		~~StationAudienceShare (3)~~		Rank inMarket(4)		~~Rank inMarket(4)~~		AcquisitionDate		~~AcquisitionDate~~
Washington, D.C.	WJLA	ABC	7/VHF	~~7/VHF~~		8		8		6		7		22	%	21	%	2		2		01/29/76		~~01/29/76~~
Birmingham (Anniston and Tuscaloosa), AL (5)	WBMA/WCFT/WJSU	ABC		—				42				6				24	%			2				—
Harrisburg-Lancaster- York-Lebanon, PA	WHTM	ABC	10/UHF			43				5				26	%			2				03/01/96
Birmingham	WBMA	ABC		40/UHF				—				—				—				—				08/01/97
Birmingham (Anniston and Tuscaloosa), AL (5)	WBMA/WCFT/WJSU	ABC	—			44				5				24	%			2				—
Anniston	WJSU	ABC		9/UHF				—				—				—				—				03/22/00	(6)
Birmingham	WBMA	ABC	40/UHF			—				—				—				—				08/01/97
Tuscaloosa	WCFT	ABC		33/UHF				—				—				—				—				03/15/96
Anniston	WJSU	ABC	9/UHF			—				—				—				—				03/22/00	(6)
Harrisburg-Lancaster- York-Lebanon, PA	WHTM	ABC		10/UHF				43				4				24	%			2				03/01/96
Tuscaloosa	WCFT	ABC	33/UHF			—				—				—				—				03/15/96
Little Rock, AR	KATV	ABC	22/VHF	~~22/VHF~~		56		56		4		4		34	%	33	%	1		1		04/06/83		~~04/06/83~~
Tulsa, OK	KTUL	ABC	10/VHF	~~10/VHF~~		60		59		6		7		21	%	21	%	2		2		04/06/83		~~04/06/83~~
Roanoke-Lynchburg, VA	WSET	ABC	13/VHF	~~13/VHF~~		66		68		4		4		24	%	25	%	2		2		01/29/76	(7)	~~01/29/76~~	~~(7)~~

(1) Represents market rank based on the U.S. Television Household Estimates published by Nielsen in ~~September~~August ~~2012~~2013.

(2) Represents the total number of commercial broadcast television stations in the DMA with an audience share of at least 1% in the 6:00 a.m. to 2:00 a.m., Sunday through Saturday, time period, based on the Nielsen Station Index for May ~~2012~~2013.

(3) Represents the station’s share of total viewing of commercial broadcast television stations in the DMA for the time period of 6:00 a.m. to 2:00 a.m., Sunday through Saturday, based on the Nielsen Station Index for May ~~2012~~2013.

(4) Represents the station’s rank in the DMA based on its share of total viewing of commercial ~~broadcast television stations in the DMA for the time period of 6:00 a.m. to 2:00 a.m., Sunday through Saturday, based on the Nielsen Station Index for May 2012.~~

broadcast television stations in the DMA for the time period of 6:00 a.m. to 2:00 a.m., Sunday through Saturday, based on the Nielsen Station Index for May 2013.

(5)	TV Alabama serves the Birmingham market by simultaneously broadcasting identical programming over WBMA, WCFT and WJSU. The stations are listed on a combined basis by Nielsen as WBMA+, the call sign of the low power television station.

(6)	We began programming WJSU pursuant to a local marketing agreement in December 1995 and acquired the station in March 2000.

(7)	WSET has been indirectly owned and operated by the Allbritton family since 1976. On March 1, 1996, WSET became a wholly-owned subsidiary of ACC.

Business and Operating Strategy

Our business strategy is to focus on building net operating revenues and net cash provided by operating activities. We review selective acquisition or other expansion opportunities as they arise. ~~Although we continue to review strategic investment and acquisition opportunities, no~~ No agreements or understandings are currently in place regarding any material investments or acquisitions.

In addition, we continually seek to enhance net operating revenues at a marginal incremental cost through our use of existing personnel and programming capabilities. The broadcast and cable news services of WJLA and NewsChannel 8 are fully integrated, representing the first newsgathering duopoly in the Nation’s Capital.

We have also sought to make use of the excess capacity of our digital broadcast channels. Among our stations, DTV subchannels are programmed as follows: ~~four~~Four carry the Retro Television Network consisting of classic, off-network programming packaged together in an “oldies” format; two stations carry the LiveWell Network providing original lifestyle programming; one station carries ~~The~~Memorable ~~Nashville~~Entertainment Television consisting of classic shows from the 1950s through the 1980s, one station carries the Heartland Network (formerly the Nashville Network) with a country format; and ~~five~~four provide weather programming.

Our operating strategy focuses on four key elements:

Local News and Community Leadership. Our stations strive to be local news leaders to exploit the revenue potential associated with local news leadership. Since the acquisition of each station, we have focused on building that station’s local news programming franchise as the foundation for building significant audience share. In each of our market areas, we develop additional information-oriented programming designed to expand the stations’ hours of commercially valuable local news and other programming with relatively small incremental increases in operating expenses. Local news programming is commercially valuable because of its high viewership level, the attractiveness to advertisers of the demographic characteristics of the typical news audience (allowing stations to charge higher rates for advertising time) and the enhanced ratings of other programming in time periods adjacent to the news. In addition, we believe strong local news product has helped differentiate local broadcast stations from the increasing number of cable programming competitors that generally do not provide this material. We strive in each of our markets to generate additional audience and revenue through Internet and mobile distribution of our news programming.

High Quality Non-Network Programming. Our stations are committed to attracting viewers through an array of syndicated and locally-produced programming to fill those periods of the broadcast day not programmed by the network. This programming is selected by us based on its ability to attract audiences highly valued in terms of demographic makeup on a cost-effective basis and reflects a focused strategy to migrate and hold audiences from program to program throughout dayparts. Audiences highly valued in terms of demographic makeup include women aged 18-49 and all adults aged 25-54. These demographic groups are perceived by advertisers as the groups with the majority of buying authority and decision-making in product selection.

High Quality Non-Network Programming. Our stations are committed to attracting viewers through an array of syndicated and locally-produced programming to fill those periods of the broadcast day not programmed by the network. This programming is selected by us based on its ability to attract audiences highly valued in terms of demographic makeup on a cost-effective basis and reflects a focused strategy to migrate and hold audiences from program to program throughout dayparts. Audiences highly valued in terms of demographic makeup include women aged 18-49 and all adults aged 25-54. These demographic groups are perceived by advertisers as the groups with the majority of buying authority and decision-making in product selection.

Local Sales Development Efforts. We believe that television stations with a strong local presence and active community relations can realize additional revenue from advertisers through the development and promotion of special programming and community events as well as through expanded production of regularly scheduled local news and information programming. Each of our stations has developed such additional products, including high quality programming of local interest and sponsored community events. Such sponsored events have included health fairs, contests, job fairs, parades and athletic events and have provided advertisers, who are offered participation in such events, an opportunity to direct a marketing program to targeted audiences. These additional local interest programs and sponsored community events have proven successful in attracting incremental local advertising revenues. The stations also seek to maximize their local sales efforts through the use of extensive research and targeted demographic studies.

Cost Control. We believe that controlling costs is an essential factor in achieving and maintaining the profitability of our stations. We believe that by delivering highly targeted audience levels and controlling programming and operating costs, our stations can achieve increased levels of revenue and operating cash flow. Each station rigorously manages its expenses through a budgetary control process and project accounting, which include an analysis of revenue and programming costs by daypart. Moreover, each station closely monitors its staffing levels.

Network Affiliation Agreements and Relationship

During September 2012, we entered into new Primary Television Affiliation Agreements (the “Affiliation Agreements”) with ABC for each of our network affiliated television stations. The Agreements are effective January 1, 2013 through December 31, 2017 upon expiration of each station’s previously existing Primary Television Affiliation Agreement. ABC has routinely renewed the affiliation agreements with our stations; however, we cannot be assured that these affiliation agreements will be renewed in the future or under the same general terms. As one of the largest group owners of ABC network affiliates in the nation, we believe that we enjoy excellent relations with the ABC network.

Generally, each affiliation agreement provides our stations with the right to broadcast programs transmitted by the network that includes designated advertising time for the station. The balance of the advertising time is retained by the network. Through December 31, 2012, for every hour or fraction thereof that the station broadcasts network programming, the network pays the station compensation, as specified in each affiliation agreement, or as agreed upon by the network and the stations. Typically, prime-time programming generates the highest hourly rates. However, under our new Affiliation Agreements, we will no longer receive compensation, and we will pay the network in exchange for the right to broadcast ABC programming on our stations.

every hour or fraction thereof that the station broadcasted network programming, the network paid the station compensation, as specified in each affiliation agreement, or as agreed upon by the network and the stations. Typically, prime-time programming generates the highest hourly rates. However, under our current Affiliation Agreements, we no longer receive compensation, and we now pay the network in exchange for the right to broadcast ABC programming on our stations.

Legislation and Regulation

The ownership, operation and sale of television stations are subject to the jurisdiction of the FCC under the Communications Act of 1934 (the “Communications Act”). Cable programming services like NewsChannel 8 are not directly regulated by the FCC, but are subject to some indirect regulation. Matters subject to FCC oversight include the assignment of frequency bands for broadcast television; the approval of a television station’s frequency, location and operating power; the issuance, renewal, revocation or modification of a television station’s FCC license; the approval of changes in the ownership or control of a television station’s licensee; the regulation of equipment used by television stations; and the adoption and implementation of regulations and policies concerning the ownership, operation, programming and employment practices of television stations. The FCC has the power to impose penalties, including fines or license revocations, upon a licensee of a television station for violations of the FCC’s rules and regulations.

The following is a brief summary of certain provisions of the Communications Act and of specific FCC regulations and policies affecting broadcast television. Reference should be made to the Communications Act, FCC rules and the public notices and rulings of the FCC for further information concerning the nature and extent of FCC regulation of broadcast television stations.

License Renewal. Broadcast television licenses are generally granted for maximum terms of eight years. The main licenses are supported by various “auxiliary” licenses for point-to-point microwave, remote location electronic newsgathering and program distribution between the studio and transmitter locations. License terms are subject to renewal upon application to the FCC, but they may be renewed for a shorter period upon a finding by the FCC that the “public interest, convenience and necessity” would be served thereby. Under the Telecommunications Act of 1996 (the “Telecommunications Act”), the FCC must grant a renewal application if it finds that the station has served the public interest, there have been no serious violations of the Communications Act or FCC rules, and there have been no other violations of the Communications Act or FCC rules by the licensee that, taken together, would constitute a pattern of abuse. If the licensee fails to meet these requirements, the FCC may either deny the license or grant it on terms and conditions as are appropriate after notice and opportunity for hearing. 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 a license renewal and the action is no longer subject to judicial review.

In the vast majority of cases, television broadcast licenses are renewed by the FCC even when petitions to deny or competing applications are filed against broadcast license renewal applications. However, we cannot assure that each of our broadcast licenses will be renewed in the future. License renewal applications are currently pending for KATV, WHTM, WJLA, WSET and WCFT/WJSU. These stations continue to operate under their expired licenses until the FCC takes action on the renewal applications. The license for KTUL is currently effective with an expiration date of June 1, 2014.

Programming and Operation. The Communications Act requires broadcasters to serve the “public interest.” Since the late 1970s, the FCC gradually has relaxed or eliminated many of the more formalized procedures it had developed to promote the broadcast of certain types of programming responsive to the needs of a station’s community of license. However, broadcast station licensees must continue to present programming that is responsive to local community problems, needs and interests and to maintain certain records demonstrating such responsiveness. Complaints from viewers concerning a station’s programming often will be considered by the FCC when it evaluates license renewal applications, although such complaints may be filed at any time and generally may be considered by the FCC at any time. Stations also must follow various FCC rules that regulate, among other things, political advertising, sponsorship identifications, the advertisements of contests and lotteries, obscene and indecent broadcasts and technical operations, including limits on radio frequency radiation. The FCC also has adopted rules that place additional obligations on television station operators for closed-captioning of programming for the hearing impaired, equal employment opportunity obligations, maximum amounts of advertising and minimum amounts of programming specifically targeted for children and special obligations relating to political candidate advertising, as well as additional public information and reporting requirements. Requirements for video and Internet captioning in some markets have also been implemented.

Digital Television. Prior to June 12, 2009, all U.S. television stations broadcast signals using an analog transmission system first developed in the 1940s. In 1997, the FCC approved a new digital television, or DTV, technical standard to be used by television broadcasters, television set manufacturers, the computer industry and the motion picture industry. This DTV standard allows the simultaneous transmission of higher quality and/or multiple streams of video programming and data on the bandwidth formerly used by a single analog channel. On the multiple channels allowed by DTV, it is possible to broadcast one high definition channel, with visual and sound quality substantially superior to ~~present-day~~analog television; to transmit several standard definition channels, with digital sound and pictures of a quality varying from equivalent to somewhat better than ~~present~~analog television; to provide interactive data services, including visual or audio transmission; or to provide some combination of these possibilities. Pursuant to a transition plan, television broadcasters were assigned new digital channels that were predicted to replicate their analog facilities. Analog transmission was terminated on June 12, 2009. The new digital channels have the ability to distribute high definition signals along with secondary programming channels and non-broadcast data. Broadcasters must also pay certain fees for non-broadcast uses of their digital channels. In addition, the FCC has determined that broadcasters who transmit multiple programs on their digital channels are required to carry additional children’s educational programming and is evaluating whether to impose further public interest programming requirements on digital broadcasters. The FCC also has held that the must-carry requirements ~~applicable to cable and satellite carriage of analog broadcast signals will encompass only the primary digital program channel, and then only upon the cessation of analog signals.~~

Ownership Matters. The Communications Act, in conjunction with various antitrust statutes, contains restrictions on the ownership and control of broadcast licenses. Together with the FCC’s rules, those laws place limitations on alien ownership, common ownership of television, radio and newspaper properties, and ownership by those persons not having the

~~requisite~~applicable ~~“character”~~to ~~qualifications~~cable and ~~those~~satellite ~~persons~~carriage ~~holding~~of ~~“attributable”~~analog ~~interests~~broadcast insignals ~~the~~will ~~license.~~encompass ~~The~~only ~~FCC’s~~the ~~currently~~primary ~~effective~~digital ~~ownership~~program ~~rules~~channel, ~~that~~and ~~are~~then ~~material~~only ~~to our~~upon ~~operations~~the ~~are~~cessation ~~summarized~~of ~~below:~~analog signals.

Ownership Matters. The Communications Act, in conjunction with various antitrust statutes, contains restrictions on the ownership and control of broadcast licenses. Together with the FCC’s rules, those laws place limitations on alien ownership, common ownership of television, radio and newspaper properties, and ownership by those persons not having the requisite “character” qualifications and those persons holding “attributable” interests in the license. The FCC’s currently effective 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. Currently, our stations reach, in aggregate, approximately 5% of all U.S. television households. The FCC currently discounts the audience reach of a UHF station by 50% when computing the national television ownership cap. 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.

• Media Cross-Ownership. The FCC historically has prohibited 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. The FCC attempted to revise this rule in 2003 but the attempt was vacated by the courts. A similar attempt in 2008 was also struck down. A petition for review by the U.S. Supreme Court is pending. The Commission is currently reviewing the rule. There is no timetable established for any potential change. 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

courts. A similar attempt in 2008 was also struck down. The Commission is currently reviewing the rule again. There is no timetable established for any potential change. 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.

Carriage of Local Television Signals

• Cable. 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 MVPDs 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~~ 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. These contracts may, however, extend longer than the three-year must carry notification period. Our cable retransmission agreements have various ~~termination~~ expiration dates. ~~We are in the process of negotiating for renewals of those agreements that expire within the next year.~~

• Satellite. The Satellite Home Viewer Improvement Act of 1999 (“SHVIA”), as modified in 2004 by the Satellite Home Viewer Extension and Reauthorization Act (“SHVERA”), 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/SHVERA’s “carry-one, carry-all” provision, 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 ~~analog~~ 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. We have elected to negotiate retransmission consent agreements with the two DBS operators that carry our stations. Those agreements remain effective into ~~2013~~2016. ~~SHIVIA~~SHVERA, by its terms, expired in 2010 and was replaced by the Satellite Television Extension and Localism Act (“STELA”) extending the retransmission regime for broadcast station carriage on satellite systems. STELA expires under its terms in December 2014 and Congress is actively considering its reauthorization.

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 6:00 a.m. through 10:00 p.m. Eastern (5:00 a.m. through 10:00 p.m. Central). In recent years, the FCC and its indecency prohibition have received much attention. In 2006, legislation was enacted that raised the maximum monetary penalty for the broadcast of obscene, indecent, or profane language to $325,000 for each “violation,” with a cap of $3 million for any “single act.” InBased ~~2008,~~upon ~~the~~recent ~~FCC~~Supreme ~~fined certain ABC stations, including two of our ABC-affiliated stations, each in the amount of $27,500 for the broadcast of allegedly indecent~~Court ~~material during a 2003 episode of NYPD Blue. Pursuant to the affiliation agreements with ABC~~Decisions, the ~~network has assumed obligations for payment of the fine. The case was appealed and the U.S. Supreme Court reversed the fine in 2012. The~~ FCC is currently reassessing its indecency ~~enforcement regime and determining how to address the indecency complaints pending against multiple stations.~~

Additional Competition in the Video Services Industry. The Telecommunications Act also eliminates the overall ban on telephone companies offering video services and permits the

~~ownership~~enforcement ofregime ~~cable~~and ~~television~~determining ~~companies~~how ~~by telephone companies in their service areas (or vice versa) in certain circumstances. Telephone companies providing such video services will be regulated according~~ to ~~the~~address ~~transmission technology they use. The Telecommunications Act also permits telephone companies to hold an ownership interest in~~ the ~~programming~~indecency ~~carried~~complaints ~~over~~pending ~~such~~against systems. Video programming via the Internet is now emerging as an option for viewers who wish to see full-length episodes of broadcast shows or brief clips of alternative fare on computers or other video devices. Each of the major broadcast networks offer “video player” buttons on their websites or those of broadcast affiliates. In addition, multiple Internet sites such as YouTube.com offer alternative video programming. Although we cannot predict the effect of the removal of these barriers to telephone company participation in the video services industry, it may have the effect of increasing competition in the television broadcast industry in which we operate. So-called “over-the-top” Internet programming services such as Aereo have begun offering Internet-based program services in an attempt to retransmit existing broadcast stations ~~without negotiating for carriage with the broadcaster or payment of any copyright or carriage fee~~. Litigation is pending in both California and New York challenging such distribution. Concurrently, the FCC is conducting a rulemaking proceeding to determine what constitutes an MVPD for purposes of both the Copyright and Communications Acts, which action could affect whether and to what extent the current system of retransmission consent payments will continue in its present form.

~~Spectrum.~~Additional InCompetition anin ~~effort~~the toVideo ~~increase~~Services Industry. The Telecommunications Act also eliminates the ~~amount~~overall ofban on telephone companies offering video services and permits the ~~spectrum~~ownership ~~available~~of ~~for~~cable ~~use~~television ~~for~~companies ~~high~~by ~~speed,~~telephone ~~broadband,~~companies ~~wireless~~in ~~telecommunications,~~their ~~Congress~~service ~~has~~areas ~~given~~(or vice versa) in certain circumstances. Telephone companies providing such video services are regulated according to the ~~FCC~~transmission ~~authority~~technology they use. The Telecommunications Act also permits telephone companies to ~~reallocate~~hold aan ~~portion~~ownership ofinterest in the ~~spectrum~~programming ~~currently~~carried ~~licensed~~over ~~for~~such ~~broadcast~~systems. ~~television~~Video ~~purposes.~~programming ~~The~~via ~~Commission~~the Internet is ~~engaged~~now inemerging ~~a rulemaking~~as ~~proceeding~~an ~~that~~option ~~will~~for ~~establish~~viewers ~~rules~~who bywish ~~which~~to ~~broadcasters~~see ~~may~~full-length ~~voluntarily~~episodes of ~~contribute~~broadcast ~~their~~shows ~~channels~~or alternative fare on computers or aother ~~portion~~video devices. Each of the ~~spectrum~~major ~~used~~broadcast ~~for~~networks ~~those~~offer ~~channels~~“video ~~and~~player” ~~receive~~buttons ~~compensation~~on ~~from~~their ~~the~~websites ~~proceeds~~or those of anbroadcast ~~auction~~affiliates. ofIn ~~the~~addition, ~~spectrum~~multiple ~~for~~Internet sites such as ~~wireless~~YouTube, ~~use~~Netflix and Hulu offer alternative video programming. ~~Broadcasters~~Although ~~who~~we ~~choose~~cannot topredict ~~continue~~the effect of the removal of these barriers to ~~provide~~telephone ~~television~~company ~~service~~participation in the video services industry, it may have ~~their~~the ~~channels~~effect ~~“repacked”~~of toincreasing ~~alternate~~competition in ~~positions.~~the ~~The~~television ~~coverage~~broadcast ~~area~~industry ofin ~~the~~which we operate. So-called “over-the-~~air~~top” ~~signal~~Internet isprogramming toservices ~~remain~~such as ~~close~~Aereo and FilmOnX have begun offering Internet-based program services in an attempt to retransmit existing broadcast stations without negotiating for carriage with the ~~original~~broadcaster ~~pattern~~or ~~as possible~~payment of any copyright or carriage fee. ~~Those~~Litigation ~~broadcasters~~is ~~who~~pending ~~receive~~in ~~different~~multiple ~~channels~~jurisdictions challenging such distribution. We are among several plaintiffs seeking to beenjoin ~~compensated~~FilmOnX ~~for~~from redistributing ~~any~~WJLA ~~costs~~in tothe ~~change~~Washington, ~~transmitters~~D.C. ~~and~~market. ~~associated~~The ~~facilities~~grant ~~for~~of ~~the~~our ~~new~~requested ~~channels~~preliminary injunction is on appeal. ItConcurrently, the FCC is ~~unknown~~conducting ~~whether~~a ~~and~~rulemaking ~~when~~proceeding ~~any~~to ofdetermine ~~our~~what ~~stations’~~constitutes ~~channels~~an ~~will~~MVPD befor ~~repacked~~purposes of both the Copyright orand ~~any~~Communications ~~other~~Acts, ~~associated~~which ~~changes~~action ~~that~~could ~~will~~affect ~~result~~whether ~~from~~and to what extent the ~~FCC’s~~current ~~rulemaking~~system ~~proceeding~~of retransmission consent payments will continue in its present form.

~~Other Legislation~~Spectrum. ~~The~~ ~~foregoing~~In ~~does~~an ~~not~~effort ~~purport~~ to beincrease athe ~~complete~~amount ~~summary~~ of ~~all~~spectrum ~~the~~available ~~provisions~~for ofuse ~~the~~for ~~Telecommunications~~high ~~Act~~speed, ~~the~~broadband ~~Communications~~and ~~Act~~wireless ortelecommunications, ofCongress has given the ~~regulations~~FCC ~~and~~authority ~~policies~~to reallocate a portion of the ~~FCC~~spectrum ~~thereunder.~~currently ~~Congress~~licensed ~~and~~for ~~the~~broadcast ~~FCC~~television ~~have~~purposes. ~~under consideration,~~The ~~and~~Commission is engaged in ~~the~~a ~~future~~rulemaking ~~may~~proceeding ~~consider~~that ~~and~~will ~~adopt,~~establish ~~(i) other~~rules ~~changes~~by towhich ~~existing~~broadcasters ~~laws,~~may ~~regulations~~voluntarily ~~and~~contribute ~~policies~~their channels or ~~(ii) new~~a ~~laws,~~portion ~~regulations~~of the spectrum used for those channels and ~~policies~~receive ~~regarding~~compensation afrom ~~wide~~the ~~variety~~proceeds of ~~matters~~an ~~that~~auction ~~could~~of ~~affect,~~the ~~directly~~spectrum orfor ~~indirectly, the~~wireless ~~operation,~~use. ~~ownership~~Broadcasters ~~and~~who ~~profitability~~choose ofto ~~our~~continue ~~broadcast~~to ~~stations~~provide television service may have their channels “repacked” to alternate positions. ~~Also,~~The ~~certain~~coverage area of the ~~foregoing~~over-the-air ~~matters~~signal ~~are~~is ~~now,~~to orremain ~~may~~as ~~become,~~close to the ~~subject~~original ofpattern ~~litigation,~~as ~~and~~possible. weThose ~~cannot~~broadcasters ~~predict~~who ~~the~~receive ~~outcome~~different ofchannels are to be compensated for any ~~such~~costs ~~litigation~~to orchange transmitters and associated facilities for the ~~impact~~new onchannels. It is unknown whether and when any of our ~~business~~stations’ channels will be repacked or any other associated changes that will result from the FCC’s rulemaking proceeding.

Other Legislation. The foregoing does not purport to be a complete summary of all the provisions of the Telecommunications Act, the Communications Act or of the regulations and policies of the FCC thereunder. Congress and the FCC have under consideration, and in the future may consider and adopt, (i) other changes to existing laws, regulations and policies or (ii) new laws, regulations and policies regarding a wide variety of matters that could affect, directly or indirectly, the operation, ownership and profitability of our broadcast stations. Also,

certain of the foregoing matters are now, or may become, the subject of litigation, and we cannot predict the outcome of any such litigation or the impact on our business.

Employees

As of September 30, ~~2012~~2013, we employed in full and part-time positions ~~816~~824 persons, including ~~800~~808 at our television stations and 16 in our corporate office. Of our employees at WJLA/NewsChannel 8, ~~124~~ 129 are represented by one of three unions: the Screen Actors Guild/American Federation of Television and Radio Artists (“AFTRA”), the Directors Guild of America (“DGA”) or the National Association of Broadcast Employees and Technicians/ Communications Workers of America (“NABET/CWA”). The NABET/CWA collective bargaining agreement expires on August 23, 2015. The AFTRA collective bargaining agreement expires on September 30, ~~2013~~2015. The DGA collective bargaining agreement expires on February 13, 2015. No employees of our other owned stations are represented by unions. We consider our relations with our employees to be satisfactory.

ITEM 1A. RISK FACTORS

(dollars in thousands)

The risks described below, together with the other information included in this Form 10-K, should be carefully considered. We cannot identify nor can we control all circumstances that could occur in the future that may adversely affect our business and results of operations. If any of the following risks actually occurs, our business, financial condition, operating results and prospects could be materially affected.

A downturn in the economy may adversely affect us.

An economic slowdown in future periods could adversely affect our business. During times of economic slowdown, our customers may significantly reduce their advertising budgets. In addition, an economic downturn may adversely affect the demand for consumer products, which could in turn adversely affect our advertising revenues. To the extent these factors adversely affect other television companies, there could be an oversupply of unfilled airtime and downward pressure on pricing for advertising services, which could adversely affect us. Additionally, bankruptcies or financial difficulties of our customers could reduce our cash flows and adversely impact our liquidity and profitability. Collectively, these events could adversely affect our cash flow and adversely affect our ability to comply with the financial covenants of our senior credit facility.

Our substantial debt could adversely affect our financial condition and operational flexibility.

We have a substantial amount of debt. As of September 30, ~~2012~~2013, our total debt consisted of $455,000 of 8% senior ~~subordinated~~ notes due May 15, 2018. In addition, we have a $60,000 senior credit facility which expires April 30, 2015, however no amount was outstanding as of September 30, ~~2012~~2013. Subject to the limitations of our debt instruments, we could also incur additional debt in certain circumstances.

The degree to which we are leveraged could adversely affect us. For example, it could:

•

make it more difficult for us to satisfy our obligations with respect to our existing debt;

•

require us to dedicate a substantial portion of our cash flow from operations to payments on our debt, which will reduce amounts available for working capital, capital expenditures and other general corporate purposes;

• result in the sale of one or more of our stations to reduce our debt service obligations;

•

limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

•

increase our vulnerability to general adverse economic and industry conditions;

•

place us at a competitive disadvantage compared to our competitors with less debt; and

•

limit our ability to borrow additional funds.

To service our debt, we will require a significant amount of cash, which depends on many factors beyond our control.

Our ability to make payments on and to refinance our debt will depend on our ability to generate cash in the future. This, to an extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. We cannot be assured that our business will generate sufficient cash flow or that future borrowings will be

~~assured that our business will generate sufficient cash flow or that future borrowings will be~~ available to us in an amount sufficient to enable us to pay our debt or to fund our other liquidity needs. If our future cash flow from operations and existing sources of funds are insufficient to pay our obligations as they mature or to fund our liquidity needs, we may be forced to reduce or delay our business activities and capital expenditures, sell assets, obtain additional equity capital or restructure or refinance all or a portion of our debt on or before maturity. We cannot be assured that we will be able to refinance any of our debt on a timely basis or on satisfactory terms, if at all. In addition, the terms of our existing debt and other future debt may limit our ability to pursue any of these alternatives. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”

The terms of our debt impose restrictions on us that may affect our ability to successfully operate our business.

The indenture governing our senior notes contains covenants that, among other things, limit our ability to:

•

incur additional debt and issue preferred stock;

•

pay dividends or make other restricted payments;

•

make certain investments;

•

create liens;

•

allow restrictions on the ability of certain of our subsidiaries to pay dividends or make other payments to us;

•

sell assets;

•

merge or consolidate with other entities; and

•

enter into transactions with affiliates;

The credit agreement governing our senior credit facility requires us to comply with specified restrictive financial and operating covenants. These covenants, among other things, restrict our ability to incur additional debt and issue preferred stock, pay dividends and make distributions, issue stock of subsidiaries, make certain investments, repurchase stock or debt, create liens, enter into transactions with affiliates, transfer and sell assets, and merge or consolidate.

All of these covenants may restrict our ability to expand or pursue our business strategies. Our ability to comply with these covenants may be affected by events beyond our control, such as prevailing economic conditions and changes in regulations, and if such events occur, we cannot be sure that we will be able to comply. A breach of these covenants could result in a default under the indenture governing our senior notes, or the credit agreement that governs our senior credit facility. If there were an event of default, holders of such defaulted debt could cause all amounts borrowed under these instruments to be due and payable immediately. If our indebtedness were to be accelerated, we cannot be assured that we would be able to repay it. Additionally, if we fail to repay any outstanding debt incurred under any secured credit facility when it becomes due, the lenders under the facility could proceed against certain of our assets and capital stock of our subsidiaries that we have pledged as security. Any of the events described in this paragraph could have a material adverse effect on our financial condition or results of operations.

In addition, debt incurred under our senior credit facility bears interest at variable rates. An increase in the interest rates on our debt will reduce the funds available to repay our debt and for operations and future business opportunities and will make us more vulnerable to the consequences of our leveraged capital structure.

We operate in a very competitive business environment that could adversely affect our operations.

The television industry is highly competitive. Stations compete for audience on the basis of program popularity, which has a direct effect on advertising rates. Broadcast television stations compete for local and national advertising revenues with other television stations in their respective markets as well as with other advertising media, such as newspapers, radio, magazines, outdoor advertising, transit advertising, Internet websites, yellow page directories, direct mail and local MVPD operators. In addition, our stations compete for national advertising revenues with broadcast and cable television networks, program syndicators and Internet websites. Some of our competitors are subsidiaries of large national or regional companies that have greater resources, including financial resources, than we do. Our television stations are located in highly competitive markets. Accordingly, our results of operations will be dependent upon the ability of each station to compete successfully in its market, and there can be no assurance that any one of our stations will be able to maintain or increase its current audience share or revenue share. To the extent that certain of our competitors have or may, in the future, obtain greater resources, our ability to compete successfully in our broadcasting markets may be impeded.

We depend on advertising revenue, which can vary substantially from period to period based on many factors beyond our control, including ~~general~~changes in legislation and general economic conditions.

The broadcast television industry is cyclical in nature, being affected by prevailing economic conditions. Because we rely on sales of advertising time for the substantial majority of our revenues, our operating results are sensitive to general economic conditions and regional conditions in each of the local markets in which our stations operate. An economic slowdown in any of the local markets in which our stations operate could have an adverse effect on our results of operations and our business. In addition, changes in legislation or other factors that impact our advertisers’ ability to spend, could have an adverse effect on our results of operations and our business.

We depend on the Washington, D.C. ~~advertising~~ market for a substantial portion of our revenue.

For Fiscal ~~2010~~2011, ~~2011~~2012, and ~~2012,~~2013 the Washington, D.C. ~~advertising~~ market accounted for approximately one-half of our total revenues. As a result, our results of operations are highly dependent on WJLA/NewsChannel 8 and, in turn, the Washington, D.C. economy. Decreased demand for advertising in the Washington, D.C. ~~advertising~~ market may adversely affect our business and results of operations.

We particularly depend on automotive-related advertising, which may be affected by ~~turmoil~~changes in that industry.

Approximately 1720%, 2021% and 2120% of our total operating revenues for the fiscal ~~year~~ years ended September 30, ~~2010~~2011, ~~2011~~2012 and ~~2012~~2013, respectively, consisted of automotive-related ~~advertising. Automotive-related advertising increased 41%, 11% and 15% during the years ended September~~

advertising. Automotive-related advertising increased 11% and 15% during the years ended September 30, ~~2010,~~ 2011 and 2012, respectively, and remained flat for the year ended September 30, 2013. Significant decreases in advertising by this industry would adversely affect our operating results.

Federal regulation of the broadcasting industry limits our operating flexibility.

The ownership, operation and sale of television stations are subject to the jurisdiction of the FCC under the Communications Act. Matters subject to FCC oversight include the assignment of frequency bands for broadcast television; the approval of a television station’s frequency, location and operating power; the issuance, renewal, revocation or modification of a television station’s FCC license; the approval of changes in the ownership or control of a television station’s licensee; the regulation of equipment used by television stations; and the adoption and implementation of regulations and policies concerning the ownership, operation, programming and employment practices of television stations. The FCC has the power to impose penalties, including fines or license revocations, upon a licensee of a television station for violations of the FCC’s rules and regulations. The FCC’s regulation of other media and spectrum users also has an indirect effect on the operations of our stations.

License Renewal. Our business is dependent upon our continuing to hold broadcasting licenses from the FCC that are issued for terms of eight years. ~~While~~Although in the vast majority of cases such licenses are renewed by the FCC even when petitions to deny or competing applications are filed against broadcast license renewal applications, we cannot be assured that our licenses will be renewed upon their expiration dates. License renewal applications are currently pending for KATV, WHTM, WJLA, WSET and WCFT/WJSU. These stations continue to operate under their expired licenses until the FCC takes action on the renewal applications. The license for KTUL is currently effective with an expiration date of June 1, 2014. If we fail to renew any of our licenses, or renew them with substantial conditions or modifications, it could prevent us from operating the affected stations and generating revenues. See “Our Business—Legislation and Regulation—License Renewal.”

Ownership Matters. The Communications Act, in conjunction with various antitrust statutes, contains restrictions on the ownership and control of broadcast licenses. Together with the FCC’s rules, those laws place limitations on alien ownership, common ownership of television, radio and newspaper properties, and ownership by those persons not having the requisite “character” qualifications and those persons holding “attributable” interests in the license. We must comply with current FCC regulations and policies in the ownership of our stations. Any future actions by Congress or the FCC with respect to the ownership rules may adversely impact our business.

Frequency Allocation. The FCC reviews and reallocates non-governmental frequency spectrum on an ad hoc basis pursuant to its rulemaking authority. In an effort to increase the amount of spectrum available for use for high speed, broadband, wireless telecommunications, Congress has given the FCC authority to reallocate a portion of the spectrum currently licensed for broadcast television purposes. The Commission is engaged in a rulemaking proceeding that will establish rules by which broadcasters may voluntarily contribute their channels or a portion of the spectrum used for those channels and receive compensation from the proceeds of an ~~auction of the spectrum for wireless use. Broadcasters who choose to continue to provide television service may have their channels “repacked” to alternate positions. Those broadcasters~~

auction of the spectrum for wireless use. Broadcasters who choose to continue to provide television service may have their channels “repacked” to alternate positions. Those broadcasters who receive different channels are to be compensated for any costs to change transmitters and associated facilities for the new channels. It is unknown whether and when any of our stations’ channels will be repacked or any other associated changes that will result from the FCC’s rulemaking proceeding. Reallocation of portions of the broadcast frequency band for broadband uses could diminish the frequency allocation to our stations and could have an adverse impact on our operations, including a requirement to relocate to alternate channels with attendant costs.

Programming and Operation. Broadcast station licensees must present programming that is responsive to local community problems, needs and interests and to maintain certain records demonstrating such responsiveness. Stations also must follow various FCC rules that regulate, among other things, political advertising, sponsorship identifications, the advertisements of contests and lotteries, obscene and indecent broadcasts and technical operations, including limits on radio frequency radiation. The FCC also has adopted rules that place additional obligations on television station operators for closed-captioning of programming for the hearing impaired, equal employment opportunity obligations, maximum amounts of advertising and minimum amounts of programming specifically targeted for children and special obligations relating to political candidate advertising, as well as additional public information and reporting requirements. In recent years, the FCC has also vigorously enforced a number of rules, typically in connection with license renewals. Violations of these rules could lead to fines and penalties which may adversely affect our business and results of operations.

Congress and the FCC may in the future adopt new laws, regulations or policies regarding a wide variety of matters that could, directly or indirectly, adversely affect the operation and ownership of our television stations. It is impossible to predict the outcome of federal legislation or the potential effect thereof on our business. See “Our Business—Legislation and Regulation.”

We are dependent on our affiliation with the ABC television network.

All of our television stations are affiliated with the ABC network. These affiliations are valuable to us because programs provided by broadcast networks are typically the most popular with audiences, which increases our ability to attract viewers to our programs, including our local newscasts. Because networks increasingly distribute their programming on other platforms, such as the Internet or portable devices, they may become less reliant upon their affiliates to distribute their programming, which could put us at a disadvantage in future contract negotiations. Our television viewership levels, and ultimately advertising revenues, are in large part dependent upon programming provided by ABC, and there can be no assurance that such programming will achieve and maintain satisfactory viewership levels in the future. Each of our television stations has entered into aan ~~new~~ affiliation agreement with the ABC network, which expires on December 31, 2017. Although ABC has continually renewed its affiliation with our television stations for as long as we have owned them and we expect to continue to be able to ~~renew~~ renew such affiliation agreements, we cannot be assured that such renewals will be obtained. In addition, we cannot be assured that future affiliation agreements will be renewed under the same general terms. Historically, our network affiliation agreements included network compensation. However, under our ~~new~~current Affiliation Agreements, we ~~will~~ no longer receive compensation, and we ~~will~~ pay the network in exchange for the right to broadcast ABC programming on our stations.

The non-renewal or termination of one or more of our network affiliation agreements or alteration of terms could have an adverse effect on our results of operations.

We depend upon quality syndicated programming.

We purchase syndicated programming to supplement the shows supplied to us by ABC. Generally, however, before we purchase syndicated programming for our stations, this programming must first be cleared in the largest television markets—New York, Los Angeles and Chicago. Network owned and operated stations in those markets typically determine which syndicated shows will be brought to market, and therefore dictate our options for syndicated programs. If those stations do not launch new shows for the national marketplace, or if the shows that they launch, and which in turn we acquire, fail to generate satisfactory ratings, our viewership levels may decrease and our revenues may be adversely affected.

Increased programming costs could adversely affect our business and operating results.

Television programming is a significant component of television operating expenses. We may be exposed in the future to increased syndicated programming costs or increases in the amounts we pay the network in exchange for the right to broadcast ABC programming on our stations. Should such an increase in our programming expenses occur, it could have a material adverse effect on our operating results. 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 fully amortized, resulting in write-offs that increase station operating costs. 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, particularly during events requiring extended news coverage, and therefore adversely affect our business and operating results. Finally, cable distributors are increasingly competing with us or the networks with which we are affiliated for the rights to carry popular sports programming, which could increase our costs, or if we were to lose the rights to broadcast such sports programming, could adversely affect our audience share and operating results.

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, video provided by telephone company fiber lines, 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 the Internet 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 MVPDs such as cable television and satellite systems has increased, while the aggregate viewership of the major television networks has declined. 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 or could hinder Nielsen’s ability to accurately measure our audience, both of which could affect the attractiveness of our offerings to advertisers, which, in turn, could adversely affect our operating results.

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 technologies permit greater numbers of channels to be carried within existing bandwidth on cable, satellite and other television distribution systems. These compression technologies, 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.

Our inability to secure carriage of our stations by multi-channel video programming distributors may adversely affect our business.

Cable operators (including telcos) and ~~direct~~DBS ~~broadcast satellite~~ systems are generally required to carry the primary signal of local commercial television stations pursuant to the FCC’s “must carry” or “carry-one, carry-all” rules. However, these MVPDs 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” or “carry-one, carry-all” 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 2011, we elected retransmission consent for most of our stations for the three-year period commencing on January 1, 2012.~~ Our ~~cable~~ retransmission agreements have various ~~termination~~expiration dates. We are in the process of negotiating for renewals of those agreements that expire within the next year. Similarly, our agreements for carriage of our broadcast stations by the two DBS providers expire in 2013. If our retransmission consent agreements are terminated or not renewed, or if our broadcast signals are distributed on less favorable terms, our ability to distribute our programming and our operating results could be adversely affected.

In addition, MVPDs are actively seeking to change FCC regulations under which retransmission consent is negotiated in order to increase their bargaining leverage with television stations. The FCC has initiated a Notice of Proposed Rulemaking to reexamine those rules. The FCC has also asked for comment on eliminating the network non-duplication and syndicated exclusivity protection rules, which may permit MVPDs to import out-of-market television stations during a retransmission consent dispute. If the FCC modifies any of these rules, such changes could materially reduce this revenue source and could have an adverse effect on our business, financial condition and results of operations.

Redefinition of who qualifies as a MVPD could adversely affect our business.

So-called “over-the-top” Internet programming services such as Aereo and FilmOnX have begun offering Internet-based program services in an attempt to retransmit existing broadcast stations without negotiating for carriage with the broadcaster or payment of any copyright or carriage fee. Litigation is pending in multiple jurisdictions challenging such distribution. We are among several plaintiffs seeking to enjoin FilmOnX from redistributing WJLA in the

~~Redefinition~~ Washington, D.C. market. The grant of ~~who~~our ~~qualifies~~requested aspreliminary injunction is on appeal. Concurrently, the FCC is conducting a rulemaking proceeding to determine what constitutes an MVPD for purposes of both the Copyright and Communications Acts, which action could affect whether and to what extent the current system of retransmission consent payments will continue in its present form. Reclassification of some program distributors to avoid payments to us could adversely affect our business.

~~So-called~~NewsChannel ~~“over-the-top”~~8 ~~Internet~~is ~~programming~~dependent ~~services~~on ~~such~~MVPD asoperators ~~Aereo have begun offering Internet-based program services in an attempt to retransmit existing broadcast stations without negotiating~~ for carriage ~~with the broadcaster or payment~~ of any copyright or carriage fee. Litigation is pending in both California and New York challenging such distribution. Concurrently, the FCC is conducting a rulemaking proceeding to determine what constitutes an MVPD for purposes of both the Copyright and Communications Acts, which action could affect whether and to what extent the current system of retransmission consent payments will continue in its ~~present form~~programming. ~~Reclassification of some program distributors to avoid payments to us could adversely affect our business.~~

NewsChannel 8 is ~~dependent~~party onto affiliation agreements with cable operators and other terrestrial MVPDs as well as one DBS provider for the carriage of its programming to subscribers. The four primary affiliation agreements have expiration dates of December 31, 2015, June 30, 2016, December 31, 2016 and December 31, 2021. The news service operated by NewsChannel 8 is entirely dependent upon carriage by the MVPDs. Although these agreements have been renewed by the MVPDs in the past, there can be no assurance that these agreements will be renewed upon expiration or whether the same general terms and conditions can be retained. The non-renewal or termination of one or more of these affiliation agreements or alteration of terms could adversely affect our results of operations.

NewsChannel 8 is party to affiliation agreements with cable operators and other terrestrial MVPDs for the carriage of its programming to subscribers. The three primary affiliation agreements have expiration dates of December 31, 2012, December 31, 2015 and December 31, 2021. We are currently in negotiations for the renewal of the contract which is set to expire on December 31, 2012. The news service operated by NewsChannel 8 is entirely dependent upon carriage by the MVPDs. Although these agreements have been renewed by the MVPDs in the past, there can be no assurance that these agreements will be renewed upon expiration or whether the same general terms and conditions can be retained. The non-renewal or termination of one or more of these affiliation agreements or alteration of terms could adversely affect our results of operations.

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 media 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 adversely affect our operating results.

Protection of electronically stored data can be costly and if our data is compromised in spite of this protection, we may incur additional costs, lost opportunities and damage to our reputation.

We maintain information necessary to conduct our business, including confidential and proprietary information as well as personal information regarding our advertisers, website users and employees, in digital form. Data maintained in digital form is subject to the risk of intrusion, tampering and theft. We maintain systems to prevent this from occurring, but the maintenance of these systems can be costly and requires ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated. Moreover, despite our efforts, the possibility of intrusion, tampering and theft cannot be eliminated entirely, and risks associated with each of these remain. In addition, we provide confidential, proprietary and personal information to third parties when it is necessary to pursue business objectives. While we attempt to obtain assurances that these third parties will protect this information and, where appropriate, monitor the protections employed by these third parties, there is a risk the confidentiality of data held by third parties may be compromised. If our data systems are compromised, our ability to conduct our business may be impaired, we may lose profitable opportunities or the value of those opportunities may be diminished. If personal information of our advertisers, website users or employees is misappropriated or if our stations’ websites are

~~appropriate, monitor the protections employed by these third parties, there is a risk the confidentiality of data held by third parties may be~~ compromised. If our data systems are compromised, our ability to conduct our business may be impaired, we may lose profitable opportunities or the value of those opportunities may be diminished. If personal information of our advertisers, website users or employees is misappropriated or if our stations’ websites are compromised by insertion of false or inappropriate information, our reputation with our advertisers, website users and employees may be injured resulting in loss of business or morale, and we may incur costs to remediate possible injury to our advertisers, website users and employees or to pay fines or take other action with respect to judicial or regulatory actions arising out of the incident.

Possible strategic initiatives may impact our business.

We are evaluating, and will continue to evaluate, the nature and scope of our operations and various short-term and long-term strategic considerations. There are uncertainties and risks relating to 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~~potentially ~~rules~~reviewed ~~and regulations~~by the Department of Justice. 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 transactions, there may be an adverse effect on our financial condition and operating results. See “Liquidity and Capital Resources—Purchase Agreement.”

Our stockholder may have interests that conflict with holders of our debt.

We are controlled by the Allbritton family. Accordingly, the family is able to control our operations and policies, and the vote on all matters submitted to a vote of our stockholder, including, but not limited to, electing directors, adopting amendments to ACC’s certificate of incorporation and approving mergers or sales of substantially all of ACC’s assets. Circumstances may occur in which the interests of the family could be in conflict with the interests of the holders of our debt. In addition, the family could pursue acquisitions, divestitures or other transactions that, in their judgment, could enhance their equity investment, even though such transactions might involve risks to the holders of the notes. See “Ownership of Capital Stock— ACC Common Stock” and “Certain Relationships and Related Transactions.” and “Liquidity and Capital Resources—Purchase Agreement.”

We have paid dividends and made advances to related parties, and we expect to continue to do so in the future.

ACC has made advances to certain related parties. Because, at present, such related parties’ primary sources of repayment of the advances is through our ability to pay dividends or to make other distributions, these advances have been treated as reductions to stockholder’s investment in our consolidated balance sheets. The stockholder’s deficit at September 30, ~~2011~~ 2012 and ~~2012~~2013 was $~~379~~368,~~567~~550 and $~~368~~385,~~550~~726, respectively. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” and “Certain Relationships and Related Transactions.” Under our current debt instruments, future advances, loans, dividends and distributions by us are subject to certain restrictions. We anticipate that, subject to such restrictions, applicable law and payment obligations with respect to our debt, ACC will make advances, distributions or dividends to related parties in the future.

loans, dividends and distributions by us are subject to certain restrictions. We anticipate that, subject to such restrictions, applicable law and payment obligations with respect to our debt, ACC will make advances, distributions or dividends to related parties in the future.

Our business may be negatively affected by work stoppages, slowdowns or strikes by our employees.

Currently, there are three bargaining agreements with unions representing ~~124~~129 of our full and part-time employees at WJLA/NewsChannel 8, all of which have current collective bargaining agreements with the Company. We cannot provide assurance about the results of negotiation of future collective bargaining agreements, whether future collective bargaining agreements will be negotiated without interruptions in our business, or the possible effect of future collective bargaining agreements on our financial condition or results of operations. We also cannot be assured that strikes will not occur in the future in connection with labor negotiations or otherwise. Any prolonged strike or work stoppage could have an adverse effect on our financial condition and results of operations. See “Our Business – Employees.”

Changes in accounting standards can significantly impact reported operating results.

Generally accepted accounting principles and accompanying pronouncements and implementation guidelines for many aspects of our business, including those related to intangible assets and income taxes, are complex and involve significant judgments. Changes in these rules or their interpretation could significantly change our reported operating results. See “Management’s Discussions and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates.”

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not Applicable.

ITEM 2. PROPERTIES

We maintain our corporate headquarters in Arlington, Virginia, occupying leased office space of approximately 14,200 square feet.

The types of properties required to support each of the stations include offices, studios, transmitter sites and antenna sites. The stations’ studios are co-located with their office space while transmitter sites and antenna sites are generally located away from the studios in locations determined to provide maximum market signal coverage.

The following table describes the general characteristics of our principal real property:

Facility	Market/Use	Ownership	Approximate Size	LeaseExpirationDate
WJLA/NewsChannel 8	Rosslyn, VA ~~Office/Studio~~	~~Leased~~	~~99,977 sq. ft.~~	~~6/30/17~~
	Office/Studio	Leased	99,977 sq. ft.	6/30/17
	Prince George’s, MD
	Tower – Weather	Leased	1 acre	3/31/16
	Bethesda, MD
	Downlink Receive	Leased	5,300 sq. ft.	9/30/14
	Washington, D.C.
	Tower/Transmitter	Joint Venture	108,000 sq. ft.	N/A
	Office/Studio	Leased	1,500 sq. ft.	2/28/17
WHTM	Harrisburg, PA
	Office/Studio	Owned	14,000 sq. ft.	N/A
	Adjacent Land	Owned	59,337 sq. ft.	N/A
	Tower/Transmitter	Owned	2,801 sq. ft.	N/A
	Office	Leased	4,417 sq. ft.	3/31/16
KATV	Little Rock, AR
	Office/Studio	Owned	20,500 sq. ft.	N/A
	Office/Studio	Leased	1,500 sq. ft.	1/31/15
	Tower/Transmitter	Leased	3.49 acres	5/31/23
	Annex/Garage	Owned	67,400 sq. ft.	N/A
KTUL	Tulsa, OK
	Office/Studio	Owned	13,520 sq. ft.	N/A
	Tower/Transmitter	Owned	160 acres	N/A
WSET	Lynchburg, VA
	Office/Studio	Owned	15,500 sq. ft.	N/A
	Tower/Transmitter	Owned	2,700 sq. ft.	N/A
	Danville, VA
	Office/Studio	Leased	2,150 sq. ft.	2/28/15
	Roanoke, VA
	Office/Studio	Leased	1,777 sq. ft.	11/30/14
	Translator Tower Site	Owned	4.68 acres	N/A
WBMA/WCFT/WJSU	Birmingham, AL
	Office/Studio/Dish Farm	Leased	26,357 sq. ft./0.5 acres	9/30/21
	Tower/Relay-Pelham	Leased	.08 acres	10/31/16
	Tower/Relay-Red Mtn.	Owned	.21 acres	N/A
	Tuscaloosa, AL
	Office/Studio	~~Owned~~Leased	~~9,475 sq~~370sq. ft.	N2/A28/14
	Tower-Tuscaloosa	Owned	10.5 acres	N/A
	Tower-AmSouth	Leased	134.2 acres	4/30/16
	Tower-AmSouth	Leased	134.3 acres	4/30/16
	Anniston, AL
	Office/Studio	Leased	700 sq. ft.	10/31/1316
	Tower-Blue Mtn.	Owned	1.7 acres	N/A
	Tower-Bald Rock	Leased	1 acre	8/29/16

ITEM 3. LEGAL PROCEEDINGS

We currently and from time to time are involved in litigation incidental to the conduct of our business, including suits based on defamation and employment activity. We are not currently a party to any lawsuit or proceeding which, in our opinion, could reasonably be expected to have a material adverse effect on our consolidated financial condition, results of operations or cash flows.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY,

RELATED STOCKHOLDER MATTERS AND

ISSUER PURCHASES OF EQUITY SECURITIES

Not Applicable.

ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

(dollars in thousands)

The selected consolidated financial data for the fiscal years ended September 30, ~~2008,~~ 2009, 2010, 2011, 2012 and ~~2012~~2013 are derived from our consolidated financial statements. Please note that the statement of operations data below have been adjusted to reflect WCIV and POLITICO as discontinued operations for all periods presented. The information in this table should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the notes thereto included elsewhere herein.

	Fiscal Year Ended September 30,
	2008			2009			2010			2011			2012
	2009			2010			2011			2012			2013
Statement of Operations Data:
Operating revenues, net	$	~~205~~181,~~020~~798		$	~~181~~201,~~798~~200		$	~~201~~196,~~200~~923		$	~~196~~214,~~923~~238		$	~~214~~226,~~238~~329
Television operating expenses, excluding depreciation, amortization and impairment		~~128~~111,~~275~~748			~~111~~109,~~748~~140			~~109~~115,~~140~~450			~~115~~113,~~450~~758			~~113~~124,~~758~~135
Depreciation and amortization		8,~~735~~939			8,~~939~~863			89,~~863~~500			9,~~500~~624			97,~~624~~281
Impairment of intangible assets		—30,700			~~30,700~~—			—			—			—
Corporate expenses		65,~~459~~079			56,~~079~~176			6,~~176~~731			67,~~731~~054			76,~~054~~962
Operating income		6125,~~551~~332			2577,~~332~~021			7765,~~021~~242			6583,~~242~~802			8387,~~802~~951
Interest expense		37,~~631~~180			37,~~180~~469			37,~~469~~201			3736,~~201~~984			36,~~984~~905
Interest income		9630			303			3—			—			—86
Interest income–related party		~~200~~112			~~112~~215			~~215~~—			—328			~~328~~606
Loss on early repayment of debt		—			—10,408			~~10,408~~—			—			—
Other nonoperating income (expense), net		(242	)		5,222			1,057			(1,823	)		(1,542	)
Gain on settlement of insurance policies		—			—			—			—			3,993
Income (loss) from continuing operations before income taxes		23,974			(6,484	)		30,419			26,218			45,604
Other nonoperating income (expense), net		5,222			1,057			(1,823	)		(1,542	)		(1,470	)
Provision for (benefit from) income taxes		9,175			(713	)		6,888			8,759			16,674
(Loss) income from continuing operations before income taxes		(6,484	)		30,419			26,218			45,604			54,261
Income (loss) from continuing operations		14,799			(5,771	)		23,531			17,459			28,930
(Benefit from) provision for income taxes		(713	)		6,888			8,759			16,674			18,399
(Loss) income from discontinued operations, net oftax (1)		(1,926	)		199			1,641			—			—
(Loss) income from continuing operations		(5,771	)		23,531			17,459			28,930			35,862
Net income (loss)		12,873			(5,572	)		25,172			17,459			28,930
Income from discontinued operations, net of tax (1)		199			1,641			—			—			—
Net (loss) income		(5,572	)		25,172			17,459			28,930			35,862
	As of September 30,
	2008			2009			2010			2011			2012
	2009			2010			2011			2012			2013
Balance Sheet Data:
Total assets	$	~~159~~127,~~455~~110		$	~~127~~132,~~110~~356		$	~~132~~122,~~356~~433		$	~~122~~129,~~433~~626		$	~~129~~108,~~626~~762
Total debt (2)		~~483~~475,~~408~~240			~~475~~470,~~240~~000			~~470~~460,000			~~460~~455,000			455,000
Stockholder’s investment		(~~383~~398,~~524~~809	)		(~~398~~388,~~809~~716	)		(~~388~~379,~~716~~567	)		(~~379~~368,~~567~~550	)		(~~368~~385,~~550~~726	)
	Fiscal Year Ended September 30,
	2008			2009			2010			2011			2012
	2009			2010			2011			2012			2013
Cash Flow Data (3):
Cash flow from operating activities	$	3421,~~027~~407		$	2136,~~407~~142		$	3627,~~142~~304		$	2740,~~304~~084		$	4053,~~084~~044
Cash flow from investing activities		(54,~~977~~780	)		(45,~~780~~573	)		(59,~~573~~471	)		(92,~~471~~480	)		(23,~~480~~663	)
Cash flow from financing activities		(2816,~~880~~035	)		(1629,~~035~~854	)		(2918,~~854~~310	)		(1822,~~310~~932	)		(2253,~~932~~038	)
Financial Ratios and Other Data:
Operating income margin		3013.09	%		1338.93	%		3833.31	%		3339.1	%		3938.19	%
Capital expenditures (4)	$	54,~~986~~853		$	45,~~853~~666		$	59,~~666~~710		$	92,~~710~~808		$	23,~~808~~983

(Footnotes on following page)

Footnotes

(dollars in thousands)

(1) Effective August 1, 2009, the equity interests of WCIV, our wholly-owned subsidiary, were distributed to Perpetual. On November 13, 2009, the equity interests of POLITICO, our wholly-owned subsidiary, were distributed to Perpetual. As the operations of WCIV and POLITICO each constituted a component of the Company, their operating results have been presented as discontinued operations for all periods presented. ~~See “Consolidated Financial Statements—Notes to Consolidated Financial Statements—Note 7.”~~

(2)	Total debt is defined as long-term debt (including the current portion thereof, and net of discount).

(3)	Cash flows from operating, investing and financing activities were determined in accordance with Generally Accepted Accounting Principles (“GAAP”). See “Consolidated Financial Statements—Consolidated Statements of Cash Flows.”

(4) Capital expenditures for the ~~years~~year ended September 30, ~~2008 and~~ 2009 ~~are~~is exclusive of $~~2,924 and $~~4,376, ~~respectively,~~ in proceeds from a property insurance claim associated with the replacement of our broadcast tower and related equipment in Little Rock, Arkansas.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

(dollars in thousands)

General Factors Affecting Our Business

The Company

We own ABC network-affiliated television stations serving six geographic markets: WJLA in Washington, D.C.; WHTM in Harrisburg, Pennsylvania; WCFT in Tuscaloosa, Alabama, WJSU in Anniston, Alabama and WBMA-LD, a low power television station licensed to Birmingham, Alabama (we operate WCFT and WJSU in tandem with WBMA-LD serving the viewers of the Birmingham, Tuscaloosa and Anniston market as a single programming source); ~~WHTM in Harrisburg, Pennsylvania;~~ KATV in Little Rock, Arkansas; KTUL in Tulsa, Oklahoma; and WSET in Lynchburg, Virginia. We also provide 24-hour per day ~~basic~~ basic cable television programming to the Washington, D.C. market, through NewsChannel 8, primarily focused on regional and local news for the Washington, D.C. metropolitan area. The operations of NewsChannel 8 are integrated with WJLA.

WeOn ~~owned~~July 28, ~~and~~2013, ~~operated~~the ~~POLITICO,~~Allbritton afamily ~~specialized~~entered ~~newspaper~~into ~~and~~an ~~Internet~~agreement ~~site~~to ~~(politico.com),~~sell ~~from~~the ~~its~~stock ~~launch~~of inPerpetual ~~January~~and ~~2007~~the ~~until~~equity interest of an ~~November 13~~affiliate, ~~2009~~WCIV to the Sinclair Broadcast Group for an aggregate purchase price of $985,000, atsubject ~~which~~to ~~time~~adjustment ~~the~~for ~~equity~~working ~~interests~~capital. Completion of ~~POLITICO~~the ~~were~~transaction ~~distributed~~is subject to ~~Perpetual.~~customary ~~The~~closing ~~operating~~conditions, ~~results~~including ofFederal ~~POLITICO~~Communications Commission ~~are~~approval ~~classified~~and antitrust clearance, as ~~discontinued~~applicable, ~~operations~~and ~~for~~is ~~all~~expected ~~periods~~to ~~presented~~close during the first or second calendar quarter of 2014, subject to the satisfaction of these conditions. See also “Liquidity and Capital Resources—Purchase Agreement.”

Based upon regular assessments of our operations and internal financial reporting, we have determined that we have one reportable segment.

Business

Our operating revenues are derived from local and national advertisers and, to a lesser extent, from retransmission consent fees from cable television and telephone company operators as well as DBS providers, from program syndicators for the broadcast of programming and from other broadcast-related activities. The primary operating expenses involved in owning and operating television stations are employee compensation, programming, newsgathering, production, promotion and the solicitation of advertising.

Television stations receive revenues for advertising sold for placement within and adjoining locally originated and network programming. Advertising rates are set based upon a variety of factors, including the size and demographic makeup of the market served by the station, a program’s popularity among viewers whom an advertiser wishes to attract, the number of advertisers competing for the available time, the availability of alternative advertising media in the market area, a station’s overall ability to attract viewers in its market area and the station’s ability to attract viewers among particular demographic groups that an advertiser may be ~~targeting. Advertising rates are also affected by an aggressive and knowledgeable sales force and the development of projects, features and programs that tie advertiser messages to programming.~~

targeting. Advertising rates are also affected by an aggressive and knowledgeable sales force and the development of projects, features and programs that tie advertiser messages to programming.

Our advertising revenues are generally highest in the first and third quarters of each fiscal year, due in part to increases in retail advertising in the period leading up to and including the holiday season and active advertising in the spring. The fluctuation in our operating results is generally related to fluctuations in the revenue cycle. In addition, advertising revenues are generally higher during election years due to spending by political candidates, which is typically heaviest during our first and fourth fiscal quarters.

Our cash flow from operations is also affected on a quarterly basis by the timing of cash collections and interest payments on our debt. Cash receipts are usually greater during the second and fourth fiscal quarters, as the collection of advertising revenue typically lags the period in which such revenue is recorded. Scheduled semi-annual interest payments on our long-term fixed interest rate debt occur during the first and third fiscal quarters. As a result, our cash flows from operating activities as reflected in our consolidated financial statements are generally significantly higher during our second and fourth fiscal quarters, and such quarters comprise a substantial majority of our cash flow from operating activities for the full fiscal year.

The broadcast television industry is cyclical in nature, being affected by prevailing economic conditions. Because we rely on sales of advertising for a substantial majority of our revenues, our operating results are sensitive to general economic conditions and regional conditions in each of the local market areas in which our stations operate. For Fiscal ~~2010~~2011, ~~2011~~2012 and ~~2012~~2013, the Washington, D.C. ~~advertising~~ market accounted for approximately one-half of our total revenues. As a result, our results of operations are highly dependent on WJLA/NewsChannel 8 and, in turn, the Washington, D.C. economy and, to a lesser extent, on each of the other local economies in which our stations operate.

We are also dependent on automotive-related advertising. Approximately 1720%, 2021% and 2120% of our total operating revenues for the years ended September 30, ~~2010~~2011, ~~2011~~2012 and ~~2012~~2013, respectively, consisted of automotive-related advertising. Automotive-related advertising increased ~~41%,~~ 11% and 15% during the years ended September 30, ~~2010,~~ 2011 and 2012, respectively, and remained flat for the year ended September 30, 2013. Significant decreases in such advertising in the future would adversely affect our operating results.

Operating Revenues

The following table depicts the principal types of operating revenues from continuing operations, net of agency commissions, earned by us during each of the last three fiscal years and the percentage contribution of each to our total operating revenues, before fees.

	Fiscal Year Ended September 30,
	2010						2011						2012
	2011						2012						2013
	Dollars			Percent			Dollars			Percent			Dollars			Percent
Local and national (1)	$	~~162~~157,~~798~~098			7978.23	%	$	157,~~098~~297			7872.32	%	$	~~157~~152,~~297~~022			7266.23	%
Political (2)		107,~~355~~782			53.09	%		714,~~782~~919			36.9	%		1423,~~919~~856			610.94	%
Subscriber fees (3)		1821,~~770~~938			910.19	%		2131,~~938~~667			1014.95	%		3140,~~667~~526			1417.57	%
Internet (4)		24,~~922~~068			12.40	%		4,~~068~~972			2.03	%		45,~~972~~664			2.35	%
Network compensation (5)		2,380			1.2	%		1,694			0.9	%		1,066			0.5	%
Trade and barter (5)		5,101			2.5	%		4,444			2.0	%		5,083			2.2	%
Trade and barter (6)		5,372			2.6	%		5,101			2.5	%		4,444			2.0	%
Other revenues		4,702			2.4	%		4,571			2.1	%		2,215			0.9	%
Other revenues		3,008			1.5	%		3,008			1.5	%		3,505			1.6	%
Operating revenues		200,689			100.0	%		217,870			100.0	%		229,366			100.0	%
Operating revenues		205,605			100.0	%		200,689			100.0	%		217,870			100.0	%
Fees (6)		(3,766	)					(3,632	)					(3,037	)
Fees (7)		(4,405	)					(3,766	)					(3,632	)
Operating revenues, net	$	196,923					$	214,238					$	226,329
Operating revenues, net	$	201,200					$	196,923					$	214,238

(1)	Represents sale of advertising to local and national advertisers, either directly or through agencies representing such advertisers, net of agency commission.

(2)	Represents sale of advertising to political advertisers.

(3)	Represents subscriber fees earned from cable and telco operators as well as DBS providers under retransmission consent and cable affiliation agreements.

(4)	Represents sale of advertising on our Internet websites.

(5) Represents ~~payment~~value byof ~~network~~commercial time exchanged for ~~broadcasting~~goods and services (trade) or ~~promoting~~syndicated ~~network~~programs ~~programming~~(barter).

(6) Represents ~~value~~fees ofpaid ~~commercial~~to ~~time~~national ~~exchanged~~sales ~~for~~representatives ~~goods~~ and ~~services~~fees ~~(trade)~~paid orfor ~~syndicated~~music ~~programs (barter)~~licenses.

~~(7)~~Local ~~Represents~~and ~~fees~~national ~~paid~~advertising constitutes our largest category of operating revenues, representing approximately 65% to 80% of our total operating revenues in each of the last three fiscal years. Local and national ~~sales~~advertising ~~representatives~~revenues decreased 3.5% in Fiscal 2011, remained essentially flat in Fiscal 2012 and ~~fees~~decreased ~~paid~~3.4% ~~for~~in ~~music~~Fiscal ~~licenses~~2013.

Local and national advertising constitutes our largest category of operating revenues, representing 70% to 80% of our total operating revenues in each of the last three fiscal years. Local and national advertising revenues increased 14.0% in Fiscal 2010, decreased 3.5% in Fiscal 2011 and remained essentially flat in Fiscal 2012.

Results of Operations—Fiscal ~~2012~~2013 Compared to Fiscal ~~2011~~2012

Set forth below are selected consolidated financial data for Fiscal ~~2011~~2012 and ~~2012~~2013, respectively, and the percentage change between the years.

	Fiscal Year EndedSeptember 30,				~~PercentageChange~~Percentage
	2011		2012
	2012		2013		Change
Operating revenues, net	$	~~196~~214,~~923~~238	$	~~214~~226,~~238~~329		85.86	%
Operating expenses		~~131~~130,~~681~~436		~~130~~138,~~436~~378		(06.91	)%
Operating income		6583,~~242~~802		8387,~~802~~951		285.40	%
Other nonoperating expenses, net		3938,~~024~~198		3833,~~198~~690		(211.18	)%
Income tax provision		816,~~759~~674		1618,~~674~~399		9010.43	%
Net income	$	1728,~~459~~930	$	2835,~~930~~862		6524.70	%

Net Operating Revenues

Net operating revenues for Fiscal ~~2012~~2013 totaled $~~214~~226,~~238~~329, an increase of $1712,~~315~~091, or 85.86%, as compared to Fiscal ~~2011~~2012. This increase primarily reflects increased ~~subscriber~~demand ~~fees~~for aspolitical ~~well~~advertising as and increased ~~demand for~~subscriber ~~political advertising~~fees.

Local and national advertising revenues ~~remained~~decreased ~~essentially~~5,275, ~~flat~~or 3.4%, as compared to Fiscal ~~2011~~2012, primarily due to ~~the~~lower ~~significantly higher~~ demand for ~~political~~local and national advertising, including flat demand in the ~~fourth~~key ~~fiscal~~automotive ~~quarter~~category asand ~~described~~the ~~below.~~displacement ~~Although~~of local and national ~~advertising~~advertisers ~~revenue~~during ~~was~~the ~~unchanged~~peak ~~from~~political ~~Fiscal~~advertising ~~2011,~~period leading up to the ~~automotive~~November 2012 ~~category~~general ~~increased~~election. 15Such displacement resulted in a 9.7% ~~during Fiscal~~decrease ~~2012~~in local and national advertising revenue in the quarter ended December 31, ~~which~~2012 ~~served~~and also extended to ~~offset~~automotive-related ~~net~~advertising, ~~decreases~~which indecreased ~~various~~4% ~~other~~during ~~lesser~~that ~~categories~~same quarter.

Political advertising revenues amounted to $1423,~~919~~856 during Fiscal ~~2012~~2013 as compared to $714,~~782~~919 during Fiscal ~~2011~~2012. In Fiscal 2012 and 2013, political advertising revenues were primarily generated by spending leading up to and during the heavily contested 2012 presidential election, as well as congressional elections and ballot referendums in several of our markets. ~~In Fiscal 2011, substantially all of the political advertising revenue occurred during the first quarter of the year and consisted of spending related to the November 2010 interim~~ ~~elections.~~

Subscriber fees increased $98,~~729~~859, or 4428.30%, during Fiscal ~~2012~~2013 as compared to the prior fiscal year. This increase in subscriber fees was primarily due to a number of retransmission consent agreements being renewed at increased per subscriber rates beginning in January 2013. In addition, the increase in subscriber fees was ~~primarily~~also due to the fact that a significant number of retransmission consent agreements, representing approximately one-half of our subscriber base, were subject to renewal effective January 1, 2012 and were renewed at increased per subscriber rates. ~~In addition~~Further, ~~this~~the increase ~~was~~ also ~~due to~~ reflects increases in per subscriber rates in accordance with existing underlying agreements.

Total Operating Expenses

Total operating expenses in Fiscal ~~2012~~2013 were $~~130~~138,~~436~~378, representing aan ~~decrease~~increase of $17,~~245~~942, or 06.91%, compared to total operating expenses of of $~~131~~130,~~681~~436 in Fiscal ~~2011~~2012. This ~~net~~increase ~~decrease~~ consisted of aan ~~decrease~~increase in television operating expenses, excluding depreciation and amortization, of $110,~~692~~377, anpartially ~~increase~~offset by a decrease in depreciation and amortization of $~~124~~2,343 and ana ~~increase~~decrease in corporate expenses of $~~323~~92.

Television operating expenses, excluding depreciation and amortization, ~~declined~~increased 19.51% from $~~115~~113,~~450~~758 in Fiscal ~~2011~~2012 to $~~113~~124,~~758~~135 in Fiscal ~~2012~~2013. This ~~decrease~~increase was due primarily to athe ~~decline~~terms inof our new ABC affiliation agreements, which took effect January 1, 2013. Under these agreements, our programming costs ~~related~~have increased as we are required to pay the ~~end~~network ofin ~~The~~exchange ~~Oprah~~for ~~Winfrey~~the ~~Show~~right into ~~September~~broadcast ~~2011~~ABC ~~and~~programming on our stations. Programming costs also increased beginning with the ~~significantly~~fall ~~lower~~2012 ~~cost~~television season due to the ABC network returning one hour of ~~replacement~~daytime ~~programming~~to its affiliates to program. In addition, ~~partially~~the ~~offset~~increase byin ~~certain variable~~television ~~sales-related~~operating expenses was also due to higher news costs ~~attributable~~related to the ~~increased~~November ~~revenues~~2012 general election and other weather-related coverage in ~~Fiscal~~the ~~2012~~first fiscal quarter.

Operating Income

Operating income increased $184,~~560~~149, or 285.40%, from $6583,~~242~~802 in Fiscal ~~2011~~2012 to $8387,~~802~~951 in Fiscal ~~2012.~~2013; ~~In addition~~however, the operating income margin in Fiscal ~~2012~~2013 ~~increased~~decreased to 3938.19% from 3339.1% for the prior fiscal year. The ~~increases~~increase in operating income and decrease in margin during Fiscal ~~2012~~2013 were ~~primarily~~ the result of increased net operating ~~revenues~~revenue, ~~and~~partially ~~decreased~~offset by increased total operating expenses, asbut with total operating expense increasing at a slightly higher rate, as discussed above.

Nonoperating Expenses, Net

Interest Expense. Interest expense decreased by $~~217~~79, or 0.62%, from $3736,~~201~~984 in Fiscal ~~2011~~2012 to $36,~~984~~905 in Fiscal ~~2012~~2013. The average balance of debt outstanding for Fiscal ~~2011~~2012 and ~~2012~~2013 was $~~469~~461,~~125~~ 815 and $~~461~~460,~~815~~971, respectively, and the weighted average interest rate on debt was 7.9% ~~during each of the years ended September 30, 2011~~ and ~~2012~~8.0% ~~This decrease in average debt outstanding was due to a reduction in the average amount outstanding under our senior credit facility~~ during the ~~year~~years ended September 30, 2012 ~~as compared to the prior fiscal year. Net repayments of $5,000 were made during Fiscal 2012,~~ and ~~no amounts were outstanding at September 30~~2013, ~~2012, which resulted in the decrease in the average amount outstanding of $7,310~~respectively.

Gain on Settlement of Insurance Policies. The $3,993 gain on settlement of insurance policies represents the difference between the death benefit and the cash surrender value of company-owned life insurance policies. These policies terminated during the first quarter of Fiscal 2013 upon the death of the insured, our founder and former Chairman.

Income Taxes

The provision for income taxes in Fiscal ~~2012~~2013 totaled $1618,~~674~~399, an increase of $71,~~915~~725, or 9010.43%, when compared to the provision for income taxes of $816,~~759~~674 in Fiscal ~~2011~~2012. This increase in income tax expense was primarily due to the $198,~~386~~657 or 7319.90% increase in income before income taxes, aspartially ~~well~~offset asby the effect of ~~releasing~~the ~~reserves~~non-taxable ~~due~~gain toon the ~~expiration~~settlement of ainsurance ~~statute of limitations of $839 and $101 during the years ended September 30, 2011 and 2012, respectively~~policies.

Net Income

For Fiscal 2012, we recorded net income of $28,930 as compared to $17,459 for Fiscal 2011. The increase in net income during Fiscal 2012 of $11,471, or 65.7%, was primarily due to increased operating income, as discussed above.

~~Results~~Net ofIncome ~~Operations—Fiscal 2011 Compared to Fiscal 2010~~

~~Set~~For ~~forth~~Fiscal ~~below~~2013, ~~are~~we ~~selected~~recorded ~~consolidated~~net ~~financial~~income ~~data~~of $35,862 as compared to $28,930 for Fiscal ~~2010~~2012. ~~and~~The ~~2011~~increase in net income during Fiscal 2013 of $6,932, ~~respectively~~or 24.0%, was primarily due to increased operating income and the ~~percentage~~gain ~~change~~on ~~between~~settlement ~~the years~~of insurance policies, as discussed above.

	Fiscal Year EndedSeptember 30,				PercentageChange
	2010		2011
Operating revenues, net	$	201,200	$	196,923		(2.1	)%
Operating expenses		124,179		131,681		6.0	%
Operating income		77,021		65,242		(15.3	)%
Loss on early repayment of debt		10,408		—		—
Other nonoperating expenses, net		36,194		39,024		7.8	%
Income tax provision		6,888		8,759		27.2	%
Income from continuing operations		23,531		17,459		(25.8	)%
Income from discontinued operations, net of income taxes		1,641		—		—
Net income	$	25,172	$	17,459		(30.6	)%

Results of Operations—Fiscal 2012 Compared to Fiscal 2011

Set forth below are selected consolidated financial data for Fiscal 2011 and 2012, respectively, and the percentage change between the years.


	Fiscal Year Ended September 30,				Percentage
	2011		2012		Change
Operating revenues, net	$	196,923	$	214,238		8.8	%
Operating expenses		131,681		130,436		(0.9	)%

Operating income		65,242		83,802		28.4	%
Other nonoperating expenses, net		39,024		38,198		(2.1	)%
Income tax provision		8,759		16,674		90.4	%

Net income	$	17,459	$	28,930		65.7	%

Net Operating Revenues

Net operating revenues for Fiscal ~~2011~~2012 totaled $~~196~~214,~~923~~238, aan ~~decrease~~increase of $417,~~277~~315, or 28.18%, as compared to Fiscal ~~2010~~2011. This ~~decrease~~increase primarily reflects ~~decreased~~increased ~~demand~~subscriber ~~for~~fees ~~local,~~as ~~national~~well ~~and~~as ~~political advertising, partially offset by~~ increased ~~subscriber~~demand for ~~fees~~political ~~as discussed below~~advertising.

Local and national advertising revenues ~~decreased~~ ~~$5,700,~~remained oressentially ~~3.5%~~flat, ~~from~~as ~~Fiscal~~compared ~~2010.~~to ~~Local~~Fiscal ~~and~~2011, primarily ~~national~~due ~~advertising~~to ~~revenue~~the ~~decreased as a result of~~ significantly ~~less~~higher demand for ~~issue-oriented~~political advertising ~~surrounding~~in the ~~legislative~~fourth ~~process~~fiscal ~~during~~quarter ~~the current year~~ as ~~well~~described ~~as a decrease in demand from larger, more nationally-focused advertisers~~below. ~~Notwithstanding~~Although alocal 5%and ~~decrease~~national ~~in automotive-related~~ advertising ~~due~~revenue towas ~~the~~unchanged ~~effect~~from ofFiscal ~~the events in Japan on automotive inventory levels during the three months ended June 30,~~ 2011, the automotive category increased 1115% during Fiscal ~~2011~~2012, which ~~partially~~served to offset ~~the~~net decreases ~~discussed~~in ~~above~~various other lesser categories.

Political advertising revenues amounted to $714,~~782~~919 during Fiscal ~~2011~~2012 as compared to $107,~~355~~782 during Fiscal ~~2010~~2011. ~~Substantially~~In ~~all~~Fiscal of2012, ~~the~~ political advertising ~~revenue~~revenues inwere ~~Fiscal~~primarily ~~2011~~generated ~~occurred~~by ~~during~~spending leading up to the ~~first~~heavily ~~quarter~~contested of2012 ~~the~~presidential ~~year~~election, ~~and~~as ~~consisted~~well ofas ~~spending~~congressional ~~related~~elections toand ~~the~~ballot ~~November~~referendums ~~2010~~in ~~interim~~several ~~elections~~of our markets. In Fiscal ~~2010~~2011, ~~political~~substantially ~~advertising~~all ~~revenue consisted~~ of ~~spending related to~~ the ~~November~~political ~~2009~~advertising ~~Virginia~~revenue ~~Governor’s~~occurred ~~election~~during ~~and~~the ~~spending~~first byquarter ~~candidates~~of inthe ~~heavily~~year ~~contested primary~~ and ~~runoff~~ ~~elections~~consisted ~~in several~~ of ~~our markets as well as~~ spending ~~leading~~related up to the November 2010 interim elections.

Subscriber fees increased $3,168, or 16.9%, during Fiscal 2011 as compared to the prior fiscal year. This increase was due to the renewal of certain retransmission consent agreements

Subscriber fees increased $9,729, or 44.3%, during ~~the~~Fiscal ~~year~~2012 as ~~well~~compared asto ~~increases~~the inprior fiscal ~~per~~year. ~~subscriber~~This ~~rates~~increase in ~~accordance~~subscriber ~~with~~fees was primarily due to the ~~underlying~~fact that a significant number of retransmission consent agreements, representing approximately one-half of our subscriber base, were subject to renewal effective January 1, 2012 and were renewed at increased per subscriber rates. In addition, this increase was also due to increases in ~~the~~per ~~overall~~subscriber ~~number~~rates ofin ~~subscribers~~accordance with existing underlying agreements.

Total Operating Expenses

Total operating expenses in Fiscal ~~2011~~2012 were $~~131~~130,~~681~~436, anrepresenting ~~increase~~a decrease of $71,~~502~~245, or 6.0.9%, compared to total operating expenses of $~~124~~131,~~179~~681 in Fiscal ~~2010~~2011. This net ~~increase~~decrease consisted of ana decrease ~~increase~~ in television operating expenses, excluding depreciation and amortization of $61,~~310~~692, an increase in depreciation and amortization of $~~637~~124 and an increase in corporate expenses of $~~555~~323.

Television operating expenses, excluding depreciation and amortization, ~~totaled~~declined 1.5% from $115,450 in Fiscal 2011, ~~an increase of $6,310, or 5.8%, when compared~~ to ~~television operating expenses of~~ $~~109~~113,~~140~~758 in Fiscal ~~2010~~ 2012. This ~~increase~~decrease was due primarily to ~~increased~~a ~~personnel~~decline ~~and~~in ~~operating~~programming costs related to the ~~launch~~end of ~~the~~The ~~Washington,~~Oprah ~~D.C.~~Winfrey ~~local~~Show ~~news~~in ~~website,~~September ~~TBD.com,~~2011 and ~~its integration with~~ the ~~NewsChannel~~significantly 8lower ~~cable~~cost ~~platform in the beginning~~ of ~~the~~replacement ~~year as well as the effect of expense reduction initiatives on the Fiscal 2010 period. While the majority of the expense reductions that we initiated during Fiscal 2009 are continuing~~programming, ~~certain~~partially ofoffset ~~these reductions were temporary in nature and the related expenses later increased. This effect had largely taken place~~ by ~~the~~certain ~~end of Fiscal 2011. Television operating expenses, excluding depreciation and amortization,~~variable ~~increased~~sales-related bycosts ~~2.0%~~attributable ~~during the fourth fiscal quarter as compared~~ to the ~~5.8%~~increased ~~increase~~revenues ~~for the full fiscal year. Such expenses are expected to decline~~ in Fiscal 2012 ~~as a result of a reduction in programming costs, largely due to the end of The Oprah Winfrey Show~~.

Operating Income

Operating income ofincreased $6518,~~242 in Fiscal 2011 decreased $11~~560,~~779,~~ or 1528.34%, ~~compared~~from to$65,242 ~~operating~~in ~~income~~Fiscal of2011 to $7783,~~021~~802 in Fiscal ~~2010~~2012. ~~The~~In addition, the operating income margin in Fiscal ~~2011~~2012 ~~decreased~~increased to 3339.1% from 3833.31% for the prior fiscal year. The ~~decreases~~increases in operating income and margin during Fiscal ~~2011~~2012 were primarily the result of ~~decreased~~increased net operating revenues and ~~increased~~decreased total operating expenses as discussed above.

Nonoperating Expenses, Net

Interest Expense. Interest expense decreased by $~~268~~217, or 0.76%, from $37,~~469~~201 in Fiscal ~~2010~~2011 to $3736,~~201~~984 in Fiscal ~~2011~~2012. The average balance of debt outstanding for Fiscal ~~2010~~2011 and ~~2011~~2012 was $~~481~~469,~~806~~125 and $~~469~~461,~~125~~815, respectively, and the weighted average interest rate on debt was 7.~~7% and 7.~~9% during each of the years ended September 30, ~~2010~~2011 and ~~2011, respectively~~2012. This decrease in average debt outstanding was ~~primarily~~ due to a reduction in the average amount outstanding under our senior credit facility during the year ended September 30, ~~2011~~2012 as compared to the prior fiscal year. Net repayments of $105,000 were made during Fiscal ~~2011~~2012, ~~resulting~~and inno aamounts were outstanding at September 30, 2012, which resulted in the decrease in the average amount outstanding of $87,~~414~~310.

~~Loss~~Income onTaxes ~~Early Repayment of Debt. During Fiscal 2010, we executed an amendment to our senior credit facility and we issued $455,000 aggregate principal amount of 8% Senior Notes due~~

The provision for income taxes in Fiscal 2012 totaled $16,674, an increase of $7,915, or 90.4%, when compared to the provision for income taxes of $8,759 in Fiscal 2011. This increase in income tax expense was primarily due to the $19,386 or 73.9% increase in income before

~~May 15,~~income ~~2018~~taxes ~~(the~~as ~~“2018~~well ~~Notes”)~~as atthe ~~par.~~effect ~~The~~of ~~net~~releasing ~~proceeds,~~reserves ~~together~~due ~~with~~to ~~borrowings~~the ~~under~~expiration ~~our~~of ~~senior~~a ~~credit~~statute ~~facility~~of ~~and~~limitations ~~cash~~of on$839 ~~hand, were used to purchase~~ and ~~redeem~~ $~~455,000 aggregate~~101 ~~principal~~during ~~amount of our 7 3/4% Senior Subordinated Notes due 2012 (~~the ~~“2012~~years ~~Notes”).~~ended ~~See~~September 30, ~~“Liquidity~~2011 and ~~Capital~~2012, ~~Resources – Indebtedness” for further description of our 2010 Financing Activities~~respectively.

As a result of the purchase and redemption of our 2012 Notes, we recorded a pre-tax charge of $10,408 during Fiscal 2010 related to the early repayment of the 2012 Notes.

Other, Net. Other net nonoperating expense was $1,823 during Fiscal 2011 as compared to other net nonoperating income of $1,057 during Fiscal 2010. The difference of $2,880 resulted primarily from the recording of a non-cash gain on the exchange of equipment with Sprint Nextel Corporation (“Nextel”) of $2,591 during the year ended September 30, 2010 with no comparable activity during the year ended September 30, 2011.

The FCC granted to Nextel the right to reclaim a portion of the spectrum in the 2 GHz band from broadcasters across the country. In order to claim this spectrum, Nextel was required to replace all of the broadcasters’ electronic newsgathering equipment using this spectrum with digital equipment capable of operating in the reformatted portion of the 2 GHz band retained by the broadcasters. This exchange of equipment was completed on a market by market basis. As the equipment was exchanged and placed into service in each of our markets, a gain was recorded to the extent that the fair market value of the equipment received exceeded the book value of the analog equipment exchanged.

Income Taxes

The provision for income taxes in Fiscal 2011 totaled $8,759, an increase of $1,871, or 27.2%, when compared to the provision for income taxes of $6,888 in Fiscal 2010. This increase in income tax expense was primarily due to the prior year reduction in valuation allowances resulting from management’s evaluation of the recoverability of certain state and local net operating loss carryforwards as well as the effect of releasing reserves due to the expiration of a statute of limitations of $1,372 and $839 during the years ended September 30, 2010 and 2011, respectively.

Income from Continuing Operations

Income from continuing operations during Fiscal 2011 was $17,459, a decrease of $6,072, or 25.8%, when compared to income from continuing operations during Fiscal 2010 of $23,531. This decrease was primarily due to decreased operating income, partially offset by decreased nonoperating expenses, including the effect of the loss on early repayment of debt in the prior fiscal year, as discussed above.

Income from Discontinued Operations, Net of Income Taxes

The operations of POLITICO through November 13, 2009 are classified as discontinued operations. Income from discontinued operations was $1,641, net of the related tax provision of $1,028, during Fiscal 2010.

Net Income

For Fiscal ~~2011~~2012, we recorded net income of $1728,~~459~~930 as compared to $2517,~~172~~459 for Fiscal ~~2010~~2011. The ~~decrease~~increase in net income during Fiscal ~~2011~~ 2012 of $711,~~713~~471, or 3065.67%, was primarily due to ~~decreased~~increased operating income ~~from continuing operations in the current year as well as income from discontinued operations in the prior year~~, as discussed above.

Liquidity and Capital Resources

As of September 30, ~~2012~~2013, our cash and cash equivalents aggregated $1713,~~074~~417, and we had an excess of current assets over current liabilities of $29,~~955~~688.

Purchase Agreement.

As discussed in “General Factors Affecting Our Business,” on July 28, 2013, the Allbritton family entered into an agreement to sell the stock of Perpetual and the equity interest of an affiliate, WCIV to the Sinclair Broadcast Group. In anticipation of, and conditioned on the consummation of this transaction, Perpetual has entered into various retention agreements with certain of our key employees, including certain named executive officers. In addition, also in contemplation of this transaction, the Company has entered into retention agreements with certain of our other key employees (not including the named executive officers) conditioned upon consummation of the transaction. These agreements provide a bonus payment upon the completion of the sale of Perpetual to those certain key employees who remain employed by us, or our assignee, and will be payable on, or after closing. As of September 30, 2013, we have not accrued any amounts for these potential future obligations.

In addition, in accordance with the terms of the purchase agreement, we are required to purchase or redeem all outstanding notes and repay in full any outstanding debt under the senior credit facility as of the closing date. Under the terms of the indenture for our 8% senior notes due May 15, 2018, a redemption of the notes would occur at a price equal to 100% of the principal amount, plus an applicable premium, as defined.

Cash Provided by Operations

Our principal sources of working capital are cash flow from operations and borrowings under our senior credit facility. As discussed above, our operating results are cyclical in nature primarily as a result of seasonal fluctuations in advertising revenues, which are generally highest in the first and third quarters of each fiscal year. Our cash flow from operations is also affected on a quarterly basis by the timing of cash collections and interest payments on our debt. Cash receipts are usually greater during the second and fourth fiscal quarters as the collection of advertising revenue typically lags the period in which such revenue is recorded. Scheduled semi-annual interest payments on our long-term fixed interest rate debt occur during the first and third fiscal quarters. As a result, our cash flows from operating activities as reflected in our consolidated financial statements are generally significantly higher during our second and fourth ~~fiscal quarters, and such quarters comprise a substantial majority of our cash flows from operating activities for the full fiscal year.~~

~~As reported in our consolidated statements of cash flows, our net cash provided by operating activities was $36,142, $27,304 and $~~40~~,084~~ for Fiscal 2010, 2011, and 2012 respectively. The decrease in cash provided by operating activities from Fiscal 2010 to Fiscal 2011 was primarily the result of the decrease in net income (exclusive of the after-tax effect of the loss on early repayment of debt in Fiscal 2010) as well as an increase in cash paid for interest during Fiscal 2011 due to changes in timing related to the Fiscal 2010 financing activities. These decreases were partially offset by changes in accounts receivable, excluding the effect of discontinued operations, as well as various differences in timing of cash receipts and payments in the ordinary course of operations. The increase in cash provided by operating activities from Fiscal 2011 to Fiscal 2012 was primarily due to the increase in net income.

fiscal quarters, and such quarters comprise a substantial majority of our cash flows from operating activities for the full fiscal year.

As reported in our consolidated statements of cash flows, our net cash provided by operating activities was $27,304, $40,084 and $53,044 for Fiscal 2011, 2012 and 2013, respectively. The increase in cash provided by operating activities from Fiscal 2011 to Fiscal 2012 was primarily due to the increase in net income. The increase in cash provided by operating activities from Fiscal 2012 to Fiscal 2013 was primarily due to the increase in net income and the settlement of company-owned life insurance policies, as well as various other differences in the timing of cash receipts and payments in the ordinary course of operations.

Distributions to Related Parties

We have periodically made advances in the form of distributions to Perpetual. For Fiscal ~~2010,~~ 2011, 2012 and ~~2012~~2013 we made cash advances to Perpetual of $58,~~905~~310, $817,~~310,~~913 and $1753,~~913~~038, respectively. The advances to Perpetual are non-interest bearing and, as such, do not reflect market rates of interest-bearing loans to unaffiliated third parties. ~~Effective November 13, 2009, the equity interests of POLITICO were distributed to Perpetual.~~ See “General Factors Affecting Our Business.”

At present, the primary source of repayment of net advances is through our ability to pay dividends or make other distributions, and there is no immediate intent for the amounts to be repaid. Accordingly, these advances have been treated as a reduction of stockholder’s investment and are described as “distributions” in our consolidated financial statements.

Under the terms of the agreements relating to our indebtedness, future advances, distributions and dividends to related parties are subject to certain restrictions. We anticipate that, subject to such restrictions, applicable law and payment obligations with respect to our indebtedness, we will make advances, distributions or dividends to related parties in the future. Subsequent to September 30, ~~2012~~2013 and through December 1312, ~~2012~~2013, we made cash advances to Perpetual of $3028,~~000~~500.

During Fiscal ~~2010,~~ 2011, 2012 and ~~2012~~2013 we were charged under a tax sharing agreement with Perpetual for federal and state income taxes totaling $96,~~272~~411, $615,~~411~~878 and $1517,~~878~~480, respectively, and we made payments to Perpetual for these taxes of $116,~~317~~411, $615,~~411~~878 and $1517,~~878~~480, respectively.

Stockholder’s deficit amounted to $~~368~~385,~~550~~726 at September 30, ~~2012~~2013, aan ~~decrease~~increase of $1117,~~017~~176, or 24.97%, from the September 30, ~~2011~~2012 deficit of $~~379~~368,~~567~~550. The ~~decrease~~increase was due to ~~Fiscal~~a ~~2012~~ net ~~income~~ increase in distributions to owners of $2853,~~930~~038, partially offset by aFiscal 2013 net ~~increase~~income ~~in distributions to owners~~ of $1735,~~913~~862.

Indebtedness

Our total debt ~~decreased~~was ~~from~~ $~~460,000 at September 30, 2011 to $~~455,000 at September 30, 2012 and 2013. This debt consisted of $455,000 of 8% senior notes due May 15, 2018. We did not have any amounts outstanding under our senior credit ~~facility. The decrease of $5,000 in total debt from September 30, 2011 to September 30, 2012 was due to net repayments under the~~ ~~senior credit~~ facility.

On41 April 30, 2010, we issued $455,000 aggregate principal amount of the 2018 Notes at par. The net proceeds, together with borrowings under our senior credit facility and cash on hand, were used to purchase and redeem $455,000 aggregate principal amount of our 2012 Notes.

Under the borrowing agreements for each of our senior notes and senior credit facility, we are subject to restrictive covenants that place limitations upon payments of cash distributions, dividends, issuance of capital stock, investment transactions, incurrence of additional obligations and transactions with affiliates. Our senior credit facility contains the most restrictive covenants and limitations of this nature. In addition, under the senior credit facility, we must maintain compliance with certain financial covenants. There are no such financial maintenance covenants under the terms of our senior notes. Compliance with the financial maintenance covenants under our senior credit facility is measured at the end of each quarter, and as of September 30, 2013, we were in compliance with those financial covenants. We are also required to pay a commitment fee ranging from 0.375% to 0.500% per annum based on the amount of any unused portion of the senior credit facility.

Our senior credit facility, under which no amounts were outstanding at September 30, 2012 and 2013, has four financial maintenance covenants which are calculated based on the most recent twelve months of activity as of the end of each quarter. These financial maintenance covenants include a minimum interest coverage ratio, maximum total and senior secured leverage ratios and a minimum fixed charge coverage ratio. The total leverage ratio covenant is currently the most restrictive of the four financial maintenance covenants, and it also serves to limit cash advances to Perpetual. The calculation and the requirements for this ratio as of September 30, 2012 and 2013 are provided below.


	As of September 30, 2012		As of September 30, 2013
Total Leverage Ratio
Calculation:
Total debt	$	455,000	$	455,000
Consolidated EBITDA, as defined below	$	94,200	$	95,962
Total debt divided by Consolidated EBITDA		4.83		4.74

Requirements (calculations must not exceed):
Financial covenant		6.75		6.75

Cash advances to Perpetual		6.75		6.75

On June 28, 2010, we commenced a registered exchange offer of a new series of the 2018 Notes in exchange for the initial series of the 2018 Notes issued April 30, 2010 and consummated the exchange offer following its expiration on August 4, 2010 by issuing the new series of notes in exchange for notes of the initial series properly tendered. The terms of the exchange notes are substantially identical to those of the initial notes, except that the exchange notes have been registered under the Securities Act of 1933, as amended, and transfer restrictions and registration rights relating to the initial notes do not apply to the exchange notes.

Our $60,000 senior credit facility is secured by the assets and stock of ACC and its subsidiaries. Interest is payable quarterly at various rates from prime plus 1.50% or from LIBOR plus 2.75% depending on certain financial operating tests. Effective April 30, 2012, the maturity date of our senior credit facility was extended from April 29, 2013 to April 30, 2015 with no change in terms.

Under the borrowing agreements for each of our senior notes and senior credit facility, we are subject to restrictive covenants that place limitations upon payments of cash distributions, dividends, issuance of capital stock, investment transactions, incurrence of additional obligations and transactions with affiliates. Our senior credit facility contains the most restrictive covenants and limitations of this nature. In addition, under the senior credit facility, we must maintain compliance with certain financial covenants. There are no such financial maintenance covenants under the terms of our senior notes. Compliance with the financial maintenance covenants under our senior credit facility is measured at the end of each quarter, and as of September 30, 2012, we were in compliance with those financial covenants. We are also required to pay a commitment fee ranging from 0.375% to 0.500% per annum based on the amount of any unused portion of the senior credit facility.

Our senior credit facility, under which no amounts were outstanding at September 30, 2012, has four financial maintenance covenants which are calculated based on the most recent twelve months of activity as of the end of each quarter. These financial maintenance covenants include a minimum interest coverage ratio, maximum total and senior secured leverage ratios and a minimum fixed charge coverage ratio. The total leverage ratio covenant is currently the most restrictive of the four financial maintenance covenants, and it also serves to limit cash advances to Perpetual. The calculation and the requirements for this ratio as of September 30, 2011 and 2012 are provided below.

	As ofSeptember 30,2011		As ofSeptember 30,2012
Total Leverage Ratio
Calculation:
Total debt	$	460,000	$	455,000
Consolidated EBITDA, as defined below	$	75,248	$	94,200
Total debt divided by Consolidated EBITDA		6.11		4.83
Requirements (calculations must not exceed):
Financial covenant		6.75		6.75
Cash advances to Perpetual		6.75		6.75

Consolidated EBITDA is a defined term in our senior credit facility and is calculated as required by the terms of our senior credit facility as follows:

	Calculation forthe twelvemonths endedSeptember 30,2011		Calculation forthe twelvemonths endedSeptember 30,2012
	Calculation forthe twelvemonths endedSeptember 30,2012		Calculation forthe twelvemonths endedSeptember 30,2013
Net Income	$	1728,~~459~~930	$	2835,~~930~~862
Provision for income taxes		816,~~759~~674		1618,~~674~~399
Interest expense		3736,~~201~~984		36,~~984~~905
Loss on disposal of assets		231		760
Loss (gain) on disposal of assets		760		(55	)
Depreciation and amortization		98,~~500~~864		87,~~864~~336
Provision for doubtful accounts		~~612~~559		~~559~~159
Other noncash charges		1,486		1,429
Gain on settlement of insurance policies		—		(3,993	)
Consolidated EBITDA	$	75,248	$	94,200
Other noncash charges		1,429		1,349
Consolidated EBITDA	$	94,200	$	95,962

Consolidated EBITDA is a non-GAAP measure which is only presented for purposes of assisting the reader in understanding our compliance with our financial covenants. We have calculated Consolidated EBITDA in accordance with the specific requirements of our senior credit facility, and this calculation may not be consistent with similarly titled measures used by other companies. This measure should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

We believe that based on anticipated results for Fiscal ~~2013~~2014, we will be able to continue to comply with the financial covenants of our senior credit facility.

The indenture for our long-term debt provides that, whether or not required by the rules and regulations of the SEC, so long as any senior notes are outstanding, we, at our expense, will furnish to each holder (i) all quarterly and annual financial information that would be required to be contained in a filing with the SEC on Forms 10-Q and 10-K, if we were required to file such forms, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and, with respect to the annual financial information only, a report thereon by our certified independent accountants and (ii) all current reports that would be required to be filed with the SEC on Form 8-K if we were required to file such reports. In addition, the indenture also provides that, whether or not required by the rules and regulations of the SEC, we will file a copy of all such information and reports with the SEC for public availability (unless the SEC will not accept such a filing) and make such information available to securities analysts and prospective investors upon request. Although our duty to file such reports with the SEC was automatically suspended pursuant to Section 15(d) of the Securities Exchange Act of 1934, effective October 1, 2010, we will continue to file such reports in accordance with the indenture.

Other Uses of Cash

During Fiscal ~~2010,~~ 2011, 2012 and ~~2012~~2013 we made $59,~~666~~710, $92,~~710~~808 and $23,~~808,~~983 respectively, of capital expenditures. The decline in capital expenditures during Fiscal 2012 and 2013 as compared to ~~the~~Fiscal ~~prior~~2011 ~~fiscal year~~ was due primarily to the completion of the conversion to high definition local production in all markets during Fiscal 2011. At this time, we estimate that capital ~~expenditures~~

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expenditures for Fiscal ~~2013~~2014 will be inat ~~the~~a ~~approximate~~minimal ~~range~~level ofleading ~~$4,500~~up to ~~$5,500,~~the ~~and~~closing ~~will~~date ~~primarily~~of ~~be for~~ the ~~acquisition~~purchase ofagreement. ~~technical~~See ~~equipment~~“Purchase ~~and vehicles to support ongoing operations across our stations~~Agreement”. We expect that the source of funds for these anticipated capital expenditures will be cash provided by operations and borrowings under the senior credit facility.

We regularly enter into program contracts for the right to broadcast television programs produced by others and program commitments for the right to broadcast programs in the future. Such programming commitments are generally made to replace expiring or cancelled program rights. Additionally, under our ~~new~~current Affiliation Agreements, we have certain minimum cash commitments for network program rights. During Fiscal ~~2010,~~ 2011, 2012 and ~~2012~~2013, we made cash payments of approximately $11,~~000~~600, $118,~~600~~000 and $816,~~000~~100, respectively, for program rights. We anticipate cash payments for program rights will approximate $1621,000 for Fiscal ~~2013~~2014 and be approximately $2026,000 in Fiscal ~~2014~~2015, increasing to approximately $2838,000 by Fiscal ~~2017~~2018. We currently intend to fund these commitments with cash provided by operations.

The following table presents the long-term debt maturities, required payments under contractual agreements for program rights, future minimum lease payments under noncancellable leases, guaranteed payments under employment contracts and purchase obligations as of September 30, ~~2012~~2013:

	Fiscal Year Ending September 30,
	2013		2014		2015		2016		2017		Thereafter		Total
	2014		2015		2016		2017		2018		Thereafter		Total
Long-term debt	$	—	$	—	$	—	$	—	$	—455,000	$	~~455,000~~—	$	455,000
Interest payments on senior notes		36,400		36,400		36,400		36,400		36,400		~~36,400~~—		~~218~~182,~~400~~000
Program rights		1720,~~572~~818		1821,~~974~~041		2022,~~095~~004		2119,~~132~~048		195,~~048~~123		~~5,568~~562		~~102~~88,~~389~~596
Operating leases		5,~~856~~980		6,~~000~~039		6,~~026~~055		64,~~048~~620		~~4,633~~641		2,~~821~~251		3125,~~384~~586
Employment contracts		1112,~~081~~345		3,~~339~~098		1,~~920~~687		~~1,687~~345		~~345~~90		90—		1817,~~462~~565
Purchase obligations		~~984~~3,639		13,~~010~~744		1,~~037~~064		~~1,064~~308		~~308~~—		—		48,~~403~~755
Total	$	7179,~~893~~182	$	6570,~~723~~322	$	6567,~~478~~210	$	6660,~~331~~721	$	60497,~~734~~254	$	~~499~~2,~~879~~813	$	~~830~~777,~~038~~502

Interest payments under our senior credit facility have not been included in the above table as such payments fluctuate depending on the market rates of interest and the amount outstanding under the senior credit facility.

Based upon our current level of operations, we believe that available cash, together with cash flows generated by operating activities as well as amounts available both under our senior credit facility and from repayments of distributions to owners, will be adequate to meet our anticipated future requirements for working capital, capital expenditures and scheduled payments of interest on our debt for the next twelve months.

ACC’s cash flow from operations and consequent ability to service its debt is, in part, dependent upon the earnings of its subsidiaries and the distribution (through dividends or otherwise) of those earnings to ACC, or upon loans, advances or other payments of funds by ~~those subsidiaries to ACC. As of September 30, 2012, approximately 45% of the assets of ACC~~

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those subsidiaries to ACC. As of September 30, 2013, approximately 50% of the assets of ACC were held by operating subsidiaries, and for Fiscal ~~2012~~2013, approximately 50% of ACC’s net operating revenues were derived from the operations of ACC’s subsidiaries.

Income Taxes

Our operations are included in a consolidated federal income tax return filed by Perpetual. In accordance with the terms of a tax sharing agreement between ACC and Perpetual, we are required to pay to Perpetual our federal income tax liability, computed based upon statutory federal income tax rates applied to our consolidated taxable income. We file separate state income tax returns with the exception of Virginia (and ~~effective for Fiscal 2012, also~~ the District of Columbia), which are included in combined state income tax returns filed by Perpetual. In accordance with the terms of the tax sharing agreement, we are required to pay to Perpetual our combined state income tax liability, computed based upon statutory state income tax rates applied to our combined state net taxable income. Taxes payable to Perpetual are not reduced by losses generated in prior years by us. In addition, the amounts payable by us to Perpetual under the tax sharing agreement are not reduced if losses of other members of the Perpetual group are utilized to offset our taxable income for purposes of the Perpetual consolidated federal or combined state income tax returns.

The provision for income taxes is determined in accordance with the accounting rules for income taxes, which require that the consolidated amount of current and deferred income tax expense for a group that files a consolidated income tax return be allocated among members of the group when those members issue separate financial statements. Perpetual allocates a portion of its consolidated current and deferred income tax expense to us as if we and our subsidiaries were separate taxpayers. We record deferred tax assets, to the extent it is considered more likely than not that such assets will be realized in future periods, and deferred tax liabilities for the tax effects of the differences between the bases of our assets and liabilities for tax and financial reporting purposes.

We record income tax expense in accordance with the accounting rules for income taxes and make payments to Perpetual in accordance with the terms of the tax sharing agreement between us and Perpetual. To the extent that there is a difference between tax payments that would be due as calculated in accordance with the accounting rules and tax payments due under the tax sharing agreement, such difference is recorded to retained earnings.

Inflation

The impact of inflation on our consolidated financial condition and consolidated results of operations for each of the periods presented was not material.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make judgments and estimates that affect the amounts reported in our consolidated financial statements and accompanying notes. We base our

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estimates on historical experience and assumptions we consider reasonable at the time of making those estimates. We evaluate our estimates on an on-going basis. Actual results may differ from these estimates under different circumstances or using different assumptions. We consider the following accounting policies to be critical to our business operations and the understanding of our financial condition and results of operations.

Allowance for Doubtful Accounts

We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. As is customary in the broadcasting industry, we do not require collateral for our credit sales, which are typically due within thirty days. If the economy and/or the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make their payments, additional allowances may be required.

Intangible Assets

Intangible assets consist of values assigned to broadcast licenses ~~as well as favorable terms on contracts and leases~~. The amounts originally assigned to these intangible assets were based on the results of independent valuations. The carrying value of our ~~indefinite-lived intangible assets, consisting of~~ broadcast licenses, was $11,590 at September 30, ~~2011~~2012 and ~~2012,~~2013. ~~respectively~~Broadcast licenses are deemed to have indefinite lives. We evaluate the remaining life of our broadcast licenses each period. While broadcast licenses are granted by the FCC for a fixed period of time, renewals of these licenses have occurred routinely and at nominal cost. Costs associated with the renewal of broadcast licenses are expensed as incurred. Other intangible assets, consisting of favorable terms on contracts and leases, were amortized over the terms of the respective contracts and leases, and these assets became fully amortized during Fiscal 2008.

Our indefinite-lived intangible assets, consisting of broadcast licenses, are not amortized but are subject to impairment tests annually on September 30 as well as on an interim basis whenever events indicate that impairment may exist. InWhen ~~Fiscal 2012,~~ we ~~early~~assess ~~adopted~~our ~~the recent accounting guidance related to testing~~ indefinite-lived intangible assets for impairment~~. This guidance did not change the measurement of impairment~~, ~~but~~we ~~did~~have ~~provide entities with~~ the option of performing a qualitative assessment to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired, before further quantitative impairment testing is necessary. As part of our qualitative assessment, ~~the~~we consider various factors and the impact that wechanges ~~considered~~in such ~~for~~factors would have on the inputs used in our ~~broadcast~~most ~~licenses~~recent onquantitative aanalysis. ~~station-by-station~~Such ~~basis~~factors ~~included~~include, but ~~were~~are not limited to: (a) changes in macroeconomic conditions in the overall economy and the specific markets in which our stations operate, (b) our ability to access capital, (c) changes in the broadcast industry, (d) changes in the operating model of a broadcast station, including customer base, cost structure and the emergence of new technologies, (e) comparison of our current financial performance to historical and budgeted results, and (f) comparison of the excess of the fair value of our of broadcast licenses to the carrying value of those licenses, using the results of our most recent quantitative assessment. ~~After~~Consideration ~~considering~~of these factors ~~and~~is ~~the~~assessed ~~impact that changes in such factors would have~~ on ~~the~~a ~~inputs~~station-by-station ~~used~~basis. ~~in our previous quantitative assessment, we determined for our broadcast~~

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If we conclude through our qualitative assessment that it is more likely than not that our broadcast licenses are impaired, or if we chose to bypass the qualitative assessment, we perform a quantitative assessment using an income approach consistent with the methodology used in our historical valuation assessments to determine the fair value of our broadcast licenses on a station-by-station basis,. ~~that~~If itthe ~~was~~results ~~more~~of ~~likely~~such ~~than~~assessment ~~not~~yield that ~~our~~the carrying value of a station’s broadcast licenses ~~were~~exceed the fair value, we record such excess as the amount of impairment. The income approach assumes an initial hypothetical start-up operation, maturing into an average performing independent or non-affiliated station in a specific television market and giving consideration to other relevant factors such as the number of competing stations within that market. The net cash flows of this hypothetical average market participant are projected from the first year start-up to perpetuity and then discounted back to net present value. The calculated valuation is compared to market transactions in order to confirm the results of the income approach. The key valuation assumptions in estimating the fair value under this method include, but are not ~~impaired~~limited to: (a) pre-tax discount rate; (b) compound annual market revenue growth rates; and (c) operating profit margins, excluding depreciation and amortization, for an average market participant in our specific markets after the hypothetical start-up period.

If we had concluded through our qualitative assessment that it was more likely than not that our broadcast licenses were impaired, or if we chose to bypass the qualitative assessment, we would have performed a quantitative assessment using an income approach consistent with the methodology used in our historical valuation assessments to determine the fair value of our broadcast licenses on a station-by-station basis. If the results of such assessment had yielded that the carrying value of a station’s broadcast licenses exceed the fair value, we would have recorded such excess as the amount of impairment. The income approach assumes an initial hypothetical start-up operation, maturing into an average performing independent or non-affiliated station in a specific television market and giving consideration to other relevant factors such as the number of competing stations within that market. The net cash flows of this hypothetical average market participant are projected from the first year start-up to perpetuity and then discounted back to net present value. The calculated valuation is compared to market transactions in order to confirm the results of the income approach. The key valuation assumptions in estimating the fair value under this method include, but are not limited to: (a) pre-tax discount rate; (b) compound annual market revenue growth rates; and (c) operating profit margins, excluding depreciation and amortization, for an average market participant in our specific markets after the hypothetical start-up period. The income approach was used as the basis for our quantitative assessments during Fiscal 2010 and Fiscal 2011 and the assumptions used in those assessments did not fluctuate significantly between periods. Further, the results of our impairment tests for those periods indicated that none of our broadcast licenses were impaired.

The performance of impairment tests requires significant management judgment. Future events affecting cash flows, general economic or market conditions or accounting standards could result in impairment losses.

Income Taxes

We account for income taxes in accordance with the accounting rules for income taxes. We recognize deferred tax assets and liabilities based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities. We regularly review our deferred tax assets for recoverability and establish a valuation allowance if it is more likely than not that the deferred tax assets will not be realized. This assessment is based on historical taxable income, projected future taxable income and the expected timing of the reversals of existing temporary differences. If we are unable to generate sufficient taxable income, or if there is a material change in the actual effective tax rates or time period within which the underlying temporary differences become taxable or deductible, we could be required to establish a valuation allowance against all or a significant portion of our deferred tax assets resulting in a substantial increase in our effective tax rate and an adverse impact on our operating results.

Our operations are included in a consolidated federal income tax return filed by Perpetual. In accordance with the terms of a tax sharing agreement between us and Perpetual, we are required to pay to Perpetual our federal income tax liability, computed based upon statutory federal income tax rates applied to our consolidated taxable income. We file separate state income tax returns with the exception of Virginia and the District of Columbia, which are included in combined state income tax returns filed by Perpetual. In accordance with the terms of the tax sharing agreement, we are required to pay to Perpetual our combined state income tax liability, computed based upon statutory state income tax rates applied to our combined state net taxable income. Taxes payable to Perpetual are not reduced by losses generated in prior years by us. In addition, the amounts payable to Perpetual under the tax sharing agreement are not

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income tax returns with the exception of Virginia (and effective for Fiscal 2012, also the District of Columbia), which are included in combined state income tax returns filed by Perpetual. In accordance with the terms of the tax sharing agreement, we are required to pay to Perpetual our combined state income tax liability, computed based upon statutory state income tax rates applied to our combined state net taxable income. Taxes payable to Perpetual are not reduced ~~by losses generated in prior years by us. In addition, the amounts payable to Perpetual under the tax sharing agreement are not reduced~~ if losses of other members of the Perpetual group are utilized to offset our taxable income for purposes of the Perpetual consolidated federal or combined state income tax returns.

The accounting rules for income taxes require that the consolidated amount of current and deferred income tax expense for a group that files a consolidated income tax return be allocated among members of the group when those members issue separate financial statements. Perpetual allocates a portion of its consolidated current and deferred income tax expense to us as if we and our subsidiaries were separate taxpayers. We record deferred tax assets, to the extent it is more likely than not that such assets will be realized in future periods, and deferred tax liabilities for the tax effects of the differences between the bases of our assets and liabilities for tax and financial reporting purposes.

We record income tax expense in accordance with the accounting rules for income taxes and make payments to Perpetual in accordance with the terms of the tax sharing agreement between us and Perpetual. To the extent that there is a difference between tax payments that would be due as calculated in accordance with the accounting rules for income taxes and tax payments due under the tax sharing agreement, such difference is recorded to retained earnings.

We classify interest and penalties related to our uncertain tax positions as a component of income tax expense.

Our provision for income taxes and related deferred tax assets and liabilities reflect our estimates of actual future taxes to be paid. Such estimates are based on items reflected in the consolidated financial statements, considering timing as well as the sustainability of our tax filing positions. Actual income taxes paid could vary from our estimates as a result of future changes in income tax law or reviews by federal or various state and local tax authorities.

New Accounting Standards

~~In May 2011, the Financial Accounting Standards Board (“FASB”) issued new guidance which changes certain fair value measurement principles and enhances the related disclosures requirements~~None. ~~We adopted this guidance as of January 1, 2012. The adoption had no effect on our financial position or results of operations.~~

In September 2011, the FASB issued new guidance regarding requiring additional separate disclosures for multiemployer pension plans and multiemployer other postretirement benefit plans. These disclosures are required for annual periods ending after December 15, 2011. We have included these required disclosures in the accompanying financial statement footnotes to this Form 10-K. See Note 9.

In July 2012, the FASB issued new guidance regarding testing indefinite-lived intangible assets for impairment which is intended to reduce the cost and complexity of the annual indefinite-lived asset impairment test by providing entities with the option of performing a qualitative assessment to determine whether further impairment testing is necessary. The revised standard is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. We early adopted this guidance as part of our annual impairment assessment of our broadcast licenses as of September 30, 2012. The adoption of this guidance had no effect on our financial position or results of operations.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements as defined by Item 303 of Regulation S-K.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT

MARKET RISK

(dollars in thousands)

At September 30, ~~2012~~2013, we had other financial instruments consisting primarily of long-term fixed interest rate debt. Such debt, with future principal payments of $455,000, matures May 15, 2018. At September 30, ~~2012~~2013, the carrying value of such debt was $455,000, the fair value was approximately $~~495~~491,000 and the interest rate was 8%. The fair market value of long-term fixed interest rate debt is subject to interest rate risk. Generally, the fair market value of fixed interest rate debt will increase as interest rates fall and decrease as interest rates rise. We estimate the fair value of our long-term fixed interest rate debt by using quoted market prices. We actively monitor the capital markets in analyzing our capital raising decisions.

ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND

SUPPLEMENTARY DATA

See Index on page F-1.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON

ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company has performed an evaluation of its disclosure controls and procedures (as defined by Exchange Act rule 15d-15(e)) as of September 30, ~~2012~~2013. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the disclosure controls and procedures are effective.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). To evaluate the effectiveness of the Company’s 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. Using the framework in Internal Control – Integrated Framework, management, including the CEO and CFO, evaluated the Company’s internal control over financial reporting and concluded that the Company’s internal control over

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financial reporting was effective as of September 30, ~~2012~~2013. This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting pursuant to rules of the SEC that permit the Company to provide only management’s report in this annual report.

Changes in Internal Control over Financial Reporting

There were no changes in internal control over financial reporting during the quarter ended September 30, ~~2012~~2013 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE

GOVERNANCE

Executive Officers and Directors

Executive officers and directors of ACC are as follows:

Name	Age		~~Title~~	Title
Barbara B. Allbritton	75	76	~~Executive Vice President and Director~~	Executive Vice President and Director
Robert L. Allbritton	43	44	~~Chairman, Chief Executive Officer and Director~~	Chairman, Chief Executive Officer and Director
Frederick J. Ryan, Jr.	57	58	~~Vice Chairman, President, Chief Operating Officer and Director~~	Vice Chairman, President, Chief Operating Officer and Director
Jerald N. Fritz	61	62	~~Senior Vice President, Legal and Strategic Affairs, General Counsel~~	Senior Vice President, Legal and Strategic Affairs, General Counsel
Stephen P. Gibson	47	48	~~Senior Vice President and Chief Financial Officer~~	Senior Vice President and Chief Financial Officer
James C. Killen, Jr.	50	51	~~Vice President, Sales~~	Vice President, Sales

BARBARA B. ALLBRITTON has been a Director of ACC since its inception in 1974, Vice President of ACC from 1980 to 2001 and Executive Vice President since 2001. She currently serves as an officer and/or director of each of ACC’s television subsidiaries, as well as Perpetual, The Allbritton Foundation and the Allbritton Art Institute. She currently serves as a trustee of Baylor College of Medicine and a director of Blair House Restoration Fund. She was formerly a director of The Foundation for the National Archives. Mrs. Allbritton is the ~~wife~~widow of Joe L. Allbritton, our founder and former Chairman, and the mother of Robert L. Allbritton. See “Certain Relationships and Related Transactions.”

As a director, Mrs. Allbritton brings institutional knowledge and continuity to the board, having served for 3738 years. In addition, her experience in media, banking, insurance and real estate enable her to provide knowledgeable guidance to the Company in these areas. Her experience in serving on multiple boards, including the board of a medical college as well as boards of civic, educational and charitable institutions has provided her insight on a variety of different corporate governance methods and has enabled her to provide guidance to the ACC board that incorporates these experiences.

ROBERT L. ALLBRITTON has been Chairman of the Board of Directors and Chief Executive Officer of ACC since February 2001 and a Director of ACC since 1993. Mr. Allbritton was Executive Vice President and Chief Operating Officer of ACC from 1994 to 1998

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and President of ACC from 1998 to 2001. He is also an officer and/or director of Perpetual, each of ACC’s subsidiaries, The Allbritton Foundation and the Allbritton Art Institute. He is also founder and Publisher of POLITICO, which launched in January 2007. Mr. Allbritton has served on the Board of Directors of the Lyndon B. Johnson Foundation since 2002 and on the Board of Trustees of Wesleyan University ~~since~~from 2003. ~~He served on the Board of Directors of Juniper Content Corporation from January~~ to ~~November 2007~~2012. He is the son of Joe L. and Barbara B. Allbritton. See “Certain Relationships and Related Transactions.”

Mr. Allbritton brings significant operational experience to all aspects of the Company’s operations. He has been involved in management of the television properties at both the corporate and daily operational levels, including financial, technical, strategic, programming, sales, news and promotion. His extensive background in media, communications, banking, business and technology provide him with the background to set and implement the strategic direction of the Company. Mr. Allbritton is recognized as an innovative, influential leader within the industry.

FREDERICK J. RYAN, JR. has been President of ACC since February 2001, Chief Operating Officer since 1998 and a Director and its Vice Chairman since 1995. He has served as Senior Vice President and Executive Vice President of ACC and is an officer of each of its television subsidiaries. He is also Manager, President and founding Chief Executive Officer of Capital News Company, LLC, publisher of POLITICO. He previously served as Chief of Staff to former President Ronald Reagan (1989-1995) and Assistant to the President in the White House (1982-1989). Prior to his government service, Mr. Ryan was an attorney with the Los Angeles firm of Hill, Farrer and Burrill. Mr. Ryan presently serves as Chairman of the Ronald Reagan Presidential Library Foundation, Chairman of the White House Historical Association, a Trustee of Ford’s Theatre, a Trustee of the National Museum of American History, a member of the Board of Councilors of the Annenberg School of Communications at the University of Southern California and a member of the Board of Directors of the Jim Pattison Group, Inc. In 2009, he was appointed by President Obama as Chairman of the Ronald Reagan Centennial Commission.

Mr. Ryan combines broad contacts from his prior service at the highest levels of the federal government with his extensive understanding of business, finance, and the media industry structure to provide reasoned insight on all matters that come before the Company. Mr. Ryan’s current service on other boards gives him a deep understanding of company governance, which he uses to help establish an innovative corporate culture. He provides the critical link to management’s perspective in board discussions and provides energetic, focused, and analytical guidance to all operational levels of the Company.

JERALD N. FRITZ has been part of ACC’s management since 1987, currently serving as a Senior Vice President. He serves as its General Counsel and also oversees strategic planning and governmental affairs. From 1981 to 1987, Mr. Fritz held several positions with the FCC, including Chief of Staff and Legal Counsel to the Chairman. Mr. Fritz was in private practice from 1978 to 1981, specializing in communications law, and from 1980 to 1983 was on the adjunct faculty of George Mason University Law School teaching communications law and policy. Mr. Fritz began his career in broadcasting in 1973 with WGN-TV, Chicago. He is a former director of the National Association of Broadcasters (“NAB”) and the Board of

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~~former~~Governors ~~director~~ of the ~~National~~ABC ~~Association~~Affiliates ~~of Broadcasters (“NAB”)~~Association. Mr. Fritz ~~currently serves on the NAB’s Copyright Committee and the Board of Governors of the ABC Affiliates Association. He~~ is also a former division chair of the Communications Forum of the American Bar Association as well as the past Co-Chair of the Pre-Publication Committee of the Media Law Resource Center.

STEPHEN P. GIBSON has been a Senior Vice President of ACC since February 2001 and a Vice President since 1997. He has served as Chief Financial Officer since 1998 and Controller from 1997, when he joined the Company, to 1998. He is also Assistant Treasurer of The Allbritton Foundation and Vice President of Perpetual and each of ACC’s subsidiaries. Prior to joining ACC, Mr. Gibson served as Controller for COMSAT RSI Plexsys Wireless Systems, a provider of wireless telecommunications equipment and services, from 1994 to 1997. From 1987 to 1994, Mr. Gibson held various positions with the accounting firm of Price Waterhouse LLP, the latest as Audit Manager. He served as an elected director of the Broadcast Cable Financial Management Association from 2002 until 2005.

JAMES C. KILLEN, JR. joined ACC as Vice President, Sales in November 2004 to oversee, coordinate and support all aspects of advertising sales for the Company. Prior to joining ACC, Mr. Killen held various sales positions with NBC from 1992 until 2004, most recently Local Sales Manager and New York National Sales Manager of NBC4 in Washington, D.C. His network experience included several years as an NBC Account Manager selling the NBC owned and operated stations.

Code of Ethics for Senior Financial Officers

Our Board of Directors has adopted a Code of Ethics for Senior Financial Officers. A copy of the Code of Ethics is incorporated by reference as an exhibit to this Annual Report on Form 10-K.

Audit Committee Financial Expert

The members of our Audit Committee are Robert L. Allbritton and Frederick J. Ryan, Jr. The Board of Directors has determined that it does not currently have an “audit committee financial expert” as defined by Item 407(d)(5)(ii) of Regulation S-K. As the Company is privately held, the Board of Directors is not currently considering expanding its members in order to include an “audit committee financial expert” as defined.

ITEM 11. EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Overview and Objectives

Our executive compensation program is designed to attract, retain and reward qualified executives and encourage decisions and actions that have a positive impact on Company performance. It is our objective to set total executive compensation at a level that attracts and ~~retains strong, competent~~ ~~leadership for the Company. A further objective of the compensation program is to provide incentives and rewards to each executive for their contribution to the Company.~~

retains strong, competent leadership for the Company. A further objective of the compensation program is to provide incentives and rewards to each executive for their contribution to the Company.

The Company’s compensation program, primarily consisting of salary and bonus payments to the Company’s executive officers, who are named in the Summary Compensation Table appearing elsewhere in this Item and are referred to as the “named executive officers,” is a cash program. At this time, there are no stock options, stock awards or any other equity-based programs as part of the Company’s compensation program.

The Company’s executives do not have employment agreements that might include provisions for change in control, severance arrangements, equity or security ownership, or other such matters.

Compensation Process

We do not have a compensation committee of our Board of Directors, and our Board generally does not seek input from outside compensation consultants with respect to annual compensation decisions.

Our Chairman and Chief Executive Officer, with input from our President and Chief Operating Officer, annually reviews the performance of each of the named executive officers and determines their compensation levels. Compensation levels for our Chairman and Chief Executive Officer and President and Chief Operating Officer are established in the same manner as our other executive officers in consultation with the third member of our Board of Directors.

Elements of Compensation

The principal elements of the Company’s executive compensation consist of the following:

•

Base Salary;

•

Annual Cash Bonuses;

•

Perquisites and Other Compensation; and

•

Health Benefits.

Base Salary. The base salary component of the Company’s executive compensation program provides each named executive officer with a fixed minimum amount of cash compensation throughout the year. Salaries are determined by position, which takes into consideration the responsibilities and job performance of each named executive officer and competitive compensation paid in the market for similar positions. Base salary amounts are determined in the first quarter of the fiscal year.

56Annual Cash Bonuses. The Company does not utilize defined formulas for bonuses paid to its executive officers, including its named executive officers. The payment of cash bonuses is made on a discretionary basis and is determined based on an evaluation of each executive’s individual performance. The annual cash bonuses are intended to reward individuals based on

~~consideration~~their ~~the~~contributions ~~responsibilities~~to ~~and~~the ~~job~~overall ~~performance~~success of ~~each~~the ~~named~~Company. ~~executive~~Bonuses ~~officer~~are ~~and~~generally ~~competitive compensation~~ paid in the ~~market~~first ~~for~~quarter ~~similar~~following ~~positions.~~the ~~Base~~end ~~salary~~of ~~amounts~~the ~~are~~fiscal ~~determined~~year ~~in the~~for ~~first~~which ~~quarter~~performance ofis ~~the~~being ~~fiscal year~~rewarded.

Annual Cash Bonuses. The Company does not utilize defined formulas for bonuses paid to its executive officers, including its named executive officers. The payment of cash bonuses is made on a discretionary basis and is determined based on an evaluation of each executive’s individual performance. The annual cash bonuses are intended to reward individuals based on their contributions to the overall success of the Company. Bonuses are generally paid in the first quarter following the end of the fiscal year for which performance is being rewarded.

Perquisites and Other Compensation. We also provide our named executive officers with other benefits that we believe are reasonable and consistent with the stated objectives of the Company’s executive compensation program. Such benefits include the following:

•

Company contributions to our defined contribution 401(k) savings plan;

•

Use of a Company-provided automobile or payment of an automobile allowance;

•

Company-paid parking; and

•

Reimbursement for membership in certain clubs.

The Company provides all eligible employees a 50% matching contribution on up to 6% of compensation deferred through an IRS qualified 401(k) savings plan. Under the 401(k) plan, employees may contribute a portion of their compensation subject to IRS limitations. Effective July 1, 2010, the Company reinstated matching contributions that were suspended during 2009 in an amount equal to 25% of the contribution of the employee not to exceed 6% of the compensation of the employee, and effective June 1, 2011, the Company reinstated its full matching contribution of 50% of the contribution of the employee not to exceed 6% of the compensation of the employee. The Company does not have a defined benefit pension plan.

Health Benefits. All full-time employees, including our named executive officers, may participate in our group health benefit program, including medical, dental and vision care coverage, disability insurance and life insurance. In addition, our named executive officers are also covered under a supplemental executive long-term disability insurance program.

Determination of Fiscal ~~2012~~2013 Compensation

Our goals for Fiscal ~~2012~~2013 were to provide an executive compensation program that was equitable in a competitive marketplace and recognized and rewarded individual achievements. To achieve such goals, we relied primarily on base salaries, cash bonuses and other compensation for each of our named executive officers. Compensation levels for each named executive officer were determined based on the position and responsibility of such executive, his impact on the operation and financial performance of the Company and the knowledge and experience of such executive. These factors were considered as a group, without particular weight given to any single factor, and were necessarily subjective in nature.

5755

Summary Compensation Table

The following table sets forth certain compensation information for our Chief Executive Officer, Chief Financial Officer and each of our three other most highly compensated executive officers for the fiscal years ended September 30, ~~2010~~2011, ~~2011~~2012 and ~~2012~~2013:

Name and Principal Position

FiscalYear

Salary

Bonus

All OtherCompensation (5)

Total

Robert L. Allbritton (1)

~~2012~~2013

750,000

—

750,000

Chairman and

~~2011~~2012

750,000

—

750,000

Chief Executive Officer

~~2010~~2011

750,000

—

750,000

Frederick J. Ryan, Jr. (2)

~~2012~~2013

585,000

100,000

4748,~~914~~109

~~732~~733,~~914~~109

President and Chief

~~2011~~2012

585,000

100,000

4347,~~017~~914

~~728~~732,~~017~~914

Operating Officer

~~2010~~2011

585,000

100,000

3743,~~439~~017

~~722~~728,~~439~~017

Stephen P. Gibson (3)

~~2012~~2013

~~370~~380,000

165,000

37,~~274~~344

~~572~~582,~~274~~344

Senior Vice President and

~~2011~~2012

~~360~~370,000

~~100~~165,000

3537,~~937~~274

~~495~~572,~~937~~274

Chief Financial Officer

~~2010~~2011

~~340~~360,000

~~140~~100,000

3035,~~945~~937

~~510~~495,~~945~~937

James C. Killen, Jr.

~~2012~~2013

~~370~~380,000

150,000

4849,~~400~~059

~~568~~579,~~400~~059

Vice President, Sales

~~2011~~2012

~~360~~370,000

85150,000

4348,~~697~~400

~~488~~568,~~697~~400

2010

347,500

120,000

38,660

506,160

2011

360,000

85,000

43,697

488,697

Jerald N. Fritz (4)

~~2012~~2013

~~330~~340,000

130,000

37,~~968~~507

~~497~~507,~~968~~507

Senior Vice President, Legal

~~2011~~2012

~~320~~330,000

65130,000

3537,~~660~~968

~~420~~497,~~660~~968

and Strategic Affairs

~~2010~~2011

~~307~~320,~~500~~000

9065,000

3135,~~123~~660

~~428~~420,~~623~~660

(1)	Robert L. Allbritton is paid cash compensation by Perpetual for services to Perpetual and other interests of the Allbritton family, including ACC. The portion of such compensation related to ACC is allocated to ACC and also included as compensation above.

(2)	Frederick J. Ryan, Jr. is paid cash compensation by ACC for services to ACC, which is included as compensation above. In addition, Mr. Ryan is also separately paid cash compensation by Perpetual for services to Perpetual and other interests of the Allbritton family.

(3)	Stephen P. Gibson is paid cash compensation by ACC for services to ACC, which is included as compensation above. In addition, Mr. Gibson is also separately paid cash compensation by Perpetual for services to Perpetual and other interests of the Allbritton family.

(4) Jerald N. Fritz is paid cash compensation by ACC for services to ACC and Perpetual. Of the compensation shown in the table for Mr. Fritz, $3686,~~900~~400, $8689,~~400~~100 and $8995,~~100~~200 represent the portion of such compensation related to Perpetual, and has been allocated to Perpetual in Fiscal ~~2010,~~ 2011, 2012 and ~~2012~~2013, respectively.

(5)

Amounts in this column consist of dollar values of perquisites and other benefits including amounts contributed by the Company on behalf of our named executive officers to our defined contribution 401(k) savings plan, use of a Company-provided automobile or an automobile allowance, premiums for group health and term life insurance and executive disability plans, parking and club membership reimbursements.

Compensation of Directors

Our directors are not separately compensated for membership on the Board of Directors.

Compensation Committee, Interlocks and Insider Participation

We do not have a compensation committee of our Board of Directors. Our Chairman and Chief Executive Officer, with input from our President and Chief Operating Officer, annually reviews the performance of each of the named executive officers and determines their compensation levels. Compensation levels for our Chairman and Chief Executive Officer and President and Chief Operating Officer are established in the same manner as our other executive officers in consultation with the third member of our Board of Directors, who is also an Executive Officer of the Company.

Compensation Committee Report

Our Board of Directors has reviewed and discussed with management the Compensation Discussion and Analysis contained in this Form 10-K. Based on this review and discussion, our Board of Directors recommends that the Compensation Discussion and Analysis be included in this Form 10-K for the fiscal year ended September 30, ~~2012~~2013.

Barbara B. Allbritton

Robert L. Allbritton

Frederick J. Ryan, Jr.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The authorized capital stock of ACC consists of 20,000 shares of common stock, par value $0.05 per share (the “ACC Common Stock”), all of which is outstanding, and 1,000 shares of preferred stock, 200 shares of which have been designated for issue as Series A Redeemable Preferred Stock, par value $1.00 per share (the “Series A Preferred Stock”), no shares of which are issued and outstanding.

ACC Common Stock

The Allbritton family controls Perpetual. Perpetual owns 100% of the outstanding common stock of AG, and AG owns 100% of the outstanding ACC Common Stock. Perpetual and AG’s address is 1000 Wilson Boulevard, Suite 2700, Arlington, Virginia 22209. There is no established public trading market for ACC Common Stock.

Each share of ACC Common Stock has an equal and ratable right to receive dividends when and as declared by the Board of Directors of ACC out of assets legally available therefor.

In57 the event of a liquidation, dissolution or winding up of ACC, holders of ACC Common Stock are entitled to share ratably in assets available for distribution after payments to creditors and to holders of any preferred stock of ACC that may at the time be outstanding. The holders of ACC Common Stock have no preemptive rights to subscribe to additional shares of capital stock

In the event of a liquidation, dissolution or winding up of ACC, holders of ACC Common Stock are entitled to share ratably in assets available for distribution after payments to creditors and to holders of any preferred stock of ACC that may at the time be outstanding. The holders of ACC Common Stock have no preemptive rights to subscribe to additional shares of capital stock of ACC. Each share of ACC Common Stock is entitled to one vote in elections of directors and all other matters submitted to a vote of ACC’s stockholder.

Equity Compensation Plans

ACC does not have any compensation plans or individual compensation arrangements under which ACC Common Stock or Series A Preferred Stock are authorized for issuance.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND

DIRECTOR INDEPENDENCE

(dollars in thousands)

Distributions to Related Parties

ACC has periodically made advances in the form of distributions to Perpetual. For Fiscal ~~2012~~2013, ACC made cash advances to Perpetual of $1753,~~913~~038. The advances to Perpetual are non-interest bearing and, as such, do not reflect market rates of interest-bearing loans to unaffiliated third parties. In addition, ACC was charged by Perpetual for federal and state income taxes of $1517,~~878~~480 and made payments to Perpetual for federal and state income taxes in the amount of $1517,~~878~~480. There were no taxes due to Perpetual at September 30, ~~2012~~2013. See “Income Taxes” below.

Under the terms of the agreements governing our indebtedness, future advances, distributions and dividends to related parties are subject to certain restrictions. We anticipate that, subject to such restrictions, applicable law and payment obligations with respect to our indebtedness, ACC will make advances, distributions or dividends to related parties in the future. Subsequent to September 30, ~~2012~~2013 and through December 1312, ~~2012~~2013, we made cash advances to Perpetual of $3028,~~000~~500.

Management Fees

We paid management fees of $600 to Perpetual for Fiscal ~~2012~~2013, and we expect that management fees to be paid to Perpetual during Fiscal ~~2013~~2014 will approximate the amount paid for Fiscal ~~2012~~2013. These management fees reflect the compensation allocations referenced in the Executive Compensation Table as well as the net allocation of other shared costs. We believe ~~that~~ payments to Perpetual will continue in the future and that the amount of the management fees is at least as favorable to us as those prevailing for comparable transactions with or involving unaffiliated parties.

6058

that payments to Perpetual will continue in the future and that the amount of the management fees is at least as favorable to us as those prevailing for comparable transactions with or involving unaffiliated parties.

Income Taxes

Our operations are included in a consolidated federal income tax return filed by Perpetual. In accordance with the terms of a tax sharing agreement between ACC and Perpetual, ACC is required to pay to Perpetual its federal income tax liability, computed based upon statutory federal income tax rates applied to our consolidated taxable income. We file separate state income tax returns with the exception of Virginia (and ~~effective for Fiscal 2012, also~~ the District of Columbia) which are included in combined state income tax returns filed by Perpetual. In accordance with the terms of the tax sharing agreement, we are required to pay to Perpetual our combined state income tax liability, computed based upon statutory state income tax rates applied to our combined state net taxable income. Taxes payable to Perpetual are not reduced by losses generated in prior years by us. In addition, the amounts payable by us to Perpetual under the tax sharing agreement are not reduced if losses of other members of the Perpetual group are utilized to offset our taxable income for purposes of the Perpetual consolidated federal or combined state income tax returns.

The provision for income taxes is determined in accordance with the accounting rules for income taxes, which require that the consolidated amount of current and deferred income tax expense for a group that files a consolidated income tax return be allocated among members of the group when those members issue separate financial statements. Perpetual allocates a portion of its consolidated current and deferred income tax expense to us as if we and our subsidiaries were separate taxpayers. We record deferred tax assets, to the extent it is considered more likely than not that such assets will be realized in future periods, and deferred tax liabilities for the tax effects of the differences between the bases of its assets and liabilities for tax and financial reporting purposes.

We record income tax expense in accordance with the accounting rules for income taxes and make payments to Perpetual in accordance with the terms of the tax sharing agreement between us and Perpetual. To the extent that there is a difference between tax payments that would be due as calculated in accordance with the accounting rules for income taxes and tax payments due under the tax sharing agreement, such difference is recorded to retained earnings.

Office Space

We ~~provide~~provided certain office space to Irides, LLC (“Irides”). Irides is a wholly-owned subsidiary of Allbritton New Media, Inc. (“ANMI”) which in turn is an 80%-owned subsidiary of Perpetual. Charges for this space totaled $~~163~~83 for Fiscal ~~2012~~2013, and we do not expect to receive ~~approximately~~office ~~the~~space ~~same~~rental ~~amount~~fees during Fiscal 2014 as Irides, effective April 1, 2013., Wehas ~~believe~~discontinued ~~that~~providing services to the ~~terms~~Company in conjunction with POLITICO’s assumption of certain activities of the ~~lease~~Irides ~~are~~business. We believe that the terms were substantially the same or at least as favorable to ACC as those prevailing for comparable arrangements involving nonaffiliated companies.

We59 provide certain office space and facilities-related services to POLITICO. POLITICO was a wholly-owned subsidiary of ACC until November 13, 2009, at which time the equity interests of POLITICO were distributed to Perpetual. Charges for this office space and related services totaled $1,050 for Fiscal 2012, and we expect to receive approximately the same amount during Fiscal 2013. We believe that these terms are substantially the same or at least as

We provide certain office space and, until April 1, 2013, facilities-related services to POLITICO. POLITICO was a wholly-owned subsidiary of ACC until November 13, 2009, at which time the equity interests of POLITICO were distributed to Perpetual. Charges for this office space and related services totaled $1,090 for Fiscal 2013, and we expect to receive approximately the same amount during Fiscal 2014. We believe that these terms are substantially the same or at least as favorable to ACC as those prevailing for comparable arrangements involving nonaffiliated companies.

Internet Services

We have entered into various agreements with Irides to provide our stations with website design, hosting and maintenance services. We incurred fees of $~~366~~183 to Irides during Fiscal ~~2012~~2013, and we do not expect to pay ~~approximately~~any ~~the~~fees ~~same amount~~ in Fiscal 2014 as Irides, effective April 1, 2013, has discontinued providing these services to the Company in conjunction with POLITICO’s assumption of certain activities of the Irides business. We believe that the terms and conditions of the agreements ~~are~~were substantially the same or at least as favorable to us as those prevailing for comparable transactions with or involving nonaffiliated companies.

POLITICO provides us with certain website development services. We were charged $~~163~~152 for such services during Fiscal ~~2012~~2013 based on POLITICO’s actual cost to provide these services. We anticipate that such charges in Fiscal ~~2013~~2014 will approximate the amount charged in Fiscal ~~2012~~2013. Additionally, effective April 1, 2013, POLITICO began providing certain website design, hosting and maintenance services previously performed by Irides as well as certain facilities-related services previously performed by Company personnel. We were charged $456 for these services during Fiscal 2013, and we expect to pay approximately $900 for these services in Fiscal 2014. We believe these charges are substantially the same or at least as favorable to ACC as those prevailing for comparable services from nonaffiliated companies.

Director Independence

There are no independent members of our Board of Directors as each member of our Board is also an executive officer of the Company. As the Company is privately held, the Board of Directors is not currently considering expanding its members in order to include independent directors.

Review and Approval of Transactions with Related Parties

The Company is subject to various restrictive covenants covering transactions with related parties under its existing debt agreements. Our directors and executive officers are made aware of the Company’s obligations to identify, process and disclose such transactions in order to comply with these covenants. Our directors and executive officers are also expected to promptly disclose to the Chairman and Chief Executive Officer or the President and Chief Operating Officer, for review and approval, the material facts of any transaction that could be considered a related party transaction that is otherwise permissible under the terms of the Company’s debt covenants.

On an annual basis, each director and executive officer of the Company must complete and certify to a Director and Officer Questionnaire that requires disclosure of any transaction, arrangement or relationship with the Company during the last fiscal year in which the director or executive officer, or any member of his or her immediate family, had a direct or indirect material interest. Any transaction, arrangement, or relationship disclosed in the Director and Officer Questionnaire is reviewed and considered by our General Counsel with respect to any conflicts of interest.

6261

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

(dollars in thousands)

PricewaterhouseCoopers LLP audited our consolidated financial statements for the year ended September 30, ~~2012~~2013 and our Board of Directors has appointed PricewaterhouseCoopers LLP as our independent registered public accounting firm to audit our consolidated financial statements for the year ending September 30, ~~2013~~2014.

The fees billed by PricewaterhouseCoopers LLP for ~~2011~~2012 and ~~2012~~2013 were as follows:

	2011		2012
	2012		2013
Audit fees	$	~~298~~306	$	~~306~~327
Audit-related fees		—		—
Tax fees		—		—
All other fees		7		78
Total	$	~~305~~313	$	~~313~~335

Fees for audit services included fees associated with the annual audit and the reviews of our quarterly reports on Form 10-Q as well as any other documents filed with the SEC.

All other fees consisted of fees associated with the advertising revenue surveys for the Washington, D.C. market as well as the license of accounting research software.

Our Board of Directors pre-approves all audit and permitted non-audit services, including the fees and terms thereof.

6362

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

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

(1)

Consolidated Financial Statements

See Index on p. F-1 hereof.

(2)

Financial Statement Schedule II—Valuation and Qualifying Accounts and Reserves

See Index on p. F-1 hereof.

(3)

Exhibits

See Index on p. A-1 hereof.

6463

ALLBRITTON COMMUNICATIONS COMPANY

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Report of Independent Registered Public Accounting Firm		F-2
Consolidated Balance Sheets as of September 30, 2011 and 2012		F-3
Consolidated Balance Sheets as of September 30, 2012 and 2013		F-3
Consolidated Statements of Operations and Retained Earnings for Each of the Years Ended September 30, 2010, 2011 and 2012		F-4
Consolidated Statements of Operations and Retained Earnings for Each of the Years Ended September 30, 2011, 2012 and 2013		F-4
Consolidated Statements of Cash Flows for Each of the Years Ended September 30, 2010, 2011 and 2012		F-5
Consolidated Statements of Cash Flows for Each of the Years Ended September 30, 2011, 2012 and 2013		F-5
Notes to Consolidated Financial Statements		F-6
Financial Statement Schedule for the Years Ended September 30, 2010, 2011 and 2012 II—Valuation and Qualifying Accounts and Reserves		F-23
Financial Statement Schedule for the Years Ended September 30, 2011, 2012 and 2013 II—Valuation and Qualifying Accounts and Reserves		F-22

All other schedules are omitted because they are not applicable or the required information is ~~shown in the consolidated financial statements or the notes thereto.~~

shown in the consolidated financial statements or the notes thereto.

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholder

of Allbritton Communications Company

In our opinion, the consolidated financial statements listed in the index on page F-1 present fairly, in all material respects, the financial position of Allbritton Communications Company (an indirectly wholly-owned subsidiary of Perpetual Corporation) and its subsidiaries (the “Company”) at September 30, ~~2012~~2013 and ~~2011~~2012, and the results of their operations and their cash flows for each of the three years in the period ended September 30, ~~2012~~2013 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the index on page F-1 presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits of these statements 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

/s/ PRICEWATERHOUSECOOPERS LLP

PricewaterhouseCoopers LLP

McLean, VA

December 1312, ~~2012~~2013

F-2

ALLBRITTON COMMUNICATIONS COMPANY

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

	September 30,
	2011			2012
	2012			2013
ASSETS
Current assets
Cash and cash equivalents	$	217,~~402~~074		$	1713,~~074~~417
Accounts receivable, less allowance for doubtful accounts of $1,551 and $1,471		36,845			37,163
Accounts receivable, less allowance for doubtful accounts of $1,471 and $1,380		37,163			38,107
Program rights		67,~~215~~279			7,~~279~~410
Deferred income taxes		1,~~415~~114			1,~~114~~303
Other		2,~~429~~354			2,~~354~~619
Total current assets		4964,~~306~~984			6462,~~984~~856
Property, plant and equipment, net		3831,~~234~~090			3127,~~090~~472
Intangible assets, net		11,590			11,590
Cash surrender value of life insurance		1314,~~866~~062			~~14,062~~—
Program rights		~~242~~114			~~114~~426
Deferred financing costs and other		97,~~195~~786			76,~~786~~418
	$	~~122~~129,~~433~~626		$	~~129~~108,~~626~~762
LIABILITIES AND STOCKHOLDER’S INVESTMENT
Current liabilities
Accounts payable	$	21,~~525~~732		$	12,~~732~~245
Accrued interest payable		13,~~854~~837			13,~~837~~751
Program rights payable		8,~~484~~828			8,~~828~~407
Accrued employee benefit expenses		45,~~757~~220			54,~~220~~337
Other accrued expenses		35,~~492~~412			54,~~412~~428
Total current liabilities		3335,~~112~~029			3533,~~029~~168
Long-term debt		~~460~~455,000			455,000
Program rights payable		~~464~~109			~~109~~509
Deferred income taxes		~~1,348~~810			~~810~~710
Deferred rent and other		7,~~076~~228			75,~~228~~101
Total liabilities		~~502~~498,~~000~~176			~~498~~494,~~176~~488
Commitments and contingent liabilities (Note 10)
Commitments and contingent liabilities (Note 9)
Stockholder’s investment
Preferred stock, $1 par value, 1,000 shares authorized, none issued		—			—
Common stock, $.05 par value, 20,000 shares authorized, issued and outstanding		1			1
Capital in excess of par value		49,631			49,631
Retained earnings		6392,~~834~~764			92128,~~764~~626
Distributions to owners, net (Note 8)		(493,033	)		(510,946	)
Distributions to owners, net (Note 7)		(510,946	)		(563,984	)
Total stockholder’s investment		(~~379~~368,~~567~~550	)		(~~368~~385,~~550~~726	)
	$	~~122~~129,~~433~~626		$	~~129~~108,~~626~~762

See accompanying notes to consolidated financial statements.

F-3

ALLBRITTON COMMUNICATIONS COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS

(Dollars in thousands)

	Year Ended September 30,
	2010			2011			2012
	2011			2012			2013
Operating revenues, net	$	~~201~~196,~~200~~923		$	~~196~~214,~~923~~238		$	~~214~~226,~~238~~329
Television operating expenses, excluding depreciation and amortization		~~109~~115,~~140~~450			~~115~~113,~~450~~758			~~113~~124,~~758~~135
Depreciation and amortization		89,~~863~~500			9,~~500~~624			97,~~624~~281
Corporate expenses		6,~~176~~731			67,~~731~~054			76,~~054~~962
		124,179			131,681			130,436
		131,681			130,436			138,378
Operating income		7765,~~021~~242			6583,~~242~~802			8387,~~802~~951
Nonoperating income (expense)
Interest income
Related party		~~215~~—			—328			~~328~~606
Other		3—			—			—86
Interest expense		(37,~~469~~201	)		(3736,~~201~~984	)		(36,~~984~~905	)
Loss on early repayment of debt		(10,408	)		—			—
Gain on settlement of insurance policies		—			—			3,993
Other, net		(1,~~057~~823	)		(1,~~823~~542	)		(1,~~542~~470	)
Income from continuing operations before income taxes		30,419			26,218			45,604
Income before income taxes		26,218			45,604			54,261
Provision for income taxes		68,~~888~~759			816,~~759~~674			1618,~~674~~399
Income from continuing operations		23,531			17,459			28,930
Net income		17,459			28,930			35,862
Income from discontinued operations, net of income taxes (Note 7)		1,641			—			—
Retained earnings, beginning of year		46,375			63,834			92,764
Net income		25,172			17,459			28,930
Retained earnings, end of year	$	63,834		$	92,764		$	128,626
Retained earnings, beginning of year		28,332			46,375			63,834
Distribution of Politico, net (Note 7)		(7,129	)		—			—
Retained earnings, end of year	$	46,375		$	63,834		$	92,764

See accompanying notes to consolidated financial statements.

F-4

ALLBRITTON COMMUNICATIONS COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

	Year Ended September 30,
	2010			2011			2012
	2011			2012			2013
Cash flows from operating activities:
Net income	$	2517,~~172~~459		$	1728,~~459~~930		$	2835,~~930~~862
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		89,~~876~~500			98,~~500~~864			87,~~864~~336
Loss on early repayment of debt		10,408			—			—
Other noncash charges		1,486			1,429			1,349
Other noncash charges		1,514			1,486			1,429
Provision for doubtful accounts		612			559			159
Provision for doubtful accounts		599			612			559
Loss (gain) on disposal of assets		231			760			(55	)
(Gain) loss on disposal of assets		(2,485	)		231			760
Tax effect of Politico distribution		(1,766	)		—			—
Change in taxes due under tax sharing agreement		(2,045	)		—			—
Changes in assets and liabilities:
(Increase) decrease in assets:
Accounts receivable		~~(9,250~~625	)		~~625~~(877	)		(~~877~~1,103	)
Program rights		794,552			~~4,552~~(936	)		(~~936~~443	)
Other current assets		(~~462~~189	)		~~(189~~75	)		75(265	)
Deferred income taxes		2,~~879~~333			~~2,333~~301			~~301~~(189	)
Other noncurrent assets		(200	)		(233	)		(197	)
Cash surrender value of life insurance		—			—			14,062
Other noncurrent assets		(233	)		(197	)		19
Increase (decrease) in liabilities:
Accounts payable		~~1,146~~(648	)		(~~648~~793	)		~~(793~~513	)
Accrued interest payable		4(1,~~878~~536	)		(~~1,536~~17	)		(1786	)
Program rights payable		(~~141~~4,808	)		(~~4,808~~11	)		(1121	)
Accrued employee benefit expenses		~~1,021~~(605	)		~~(605~~463	)		~~463~~(883	)
Other accrued expenses		~~208~~(1,729	)		(1,~~729~~920	)		~~1,920~~(984	)
Deferred incomes taxes		—1,348			~~1,348~~(538	)		(~~538~~100	)
Deferred rent and other liabilities		(41,~~289~~094	)		~~(1,094~~152	)		~~152~~(2,127	)
Total adjustments		109,~~970~~845			911,~~845~~154			1117,~~154~~182
Net cash provided by operating activities		3627,~~142~~304			2740,~~304~~084			4053,~~084~~044
Cash flows from investing activities:
Capital expenditures		(59,~~666~~710	)		(92,~~710~~808	)		(23,~~808~~983	)
Proceeds from disposal of assets		93239			~~239~~328			~~328~~320
Net cash used in investing activities		(59,~~573~~471	)		(92,~~471~~480	)		(23,~~480~~663	)
Cash flows from financing activities:
Proceeds from issuance of debt		455,000			—			—
Borrowings under line of credit		58,000			63,500			52,000
Principal payments on long-term debt		(455,000	)		—			—
Repayments under line of credit		(68,000	)		(68,500	)		(52,000	)
Borrowings under line of credit		79,750			58,000			63,500
Deferred financing costs		—			(19	)		—
Repayments under line of credit		(86,250	)		(68,000	)		(68,500	)
Distributions to owners		(8,310	)		(17,913	)		(53,038	)
Redemption premium and related costs of early repayment of debt		(6,892	)		—			—
Net cash used in financing activities		(18,310	)		(22,932	)		(53,038	)
Deferred financing costs		(10,557	)		—			(19	)
Net (decrease) increase in cash and cash equivalents		(477	)		14,672			(3,657	)
Distributions to owners		(5,905	)		(8,310	)		(17,913	)
Cash and cash equivalents, beginning of year		2,879			2,402			17,074
Net cash used in financing activities		(29,854	)		(18,310	)		(22,932	)
Cash and cash equivalents, end of year	$	2,402		$	17,074		$	13,417
Net increase (decrease) in cash and cash equivalents		715			(477	)		14,672
Cash and cash equivalents, beginning of year		2,164			2,879			2,402
Cash and cash equivalents, end of year	$	2,879		$	2,402		$	17,074
Supplemental disclosure of cash flow information:
Cash paid for interest	$	3238,~~334~~709		$	3836,~~709~~988		$	36,988
Cash paid for state income taxes	$	~~250~~172		$	~~172~~972		$	~~972~~855

See accompanying notes to consolidated financial statements.

F-5

ALLBRITTON COMMUNICATIONS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands)

NOTE 1—THE COMPANY

Allbritton Communications Company (ACC or the Company) is an indirectly wholly-owned subsidiary of Perpetual Corporation (Perpetual), a Delaware corporation, which is controlled by the Allbritton family. The Company owns ABC network-affiliated television stations serving six geographic markets:

Station Market WJLA Washington, D.C. WHTM Harrisburg-Lancaster-York-Lebanon, Pennsylvania WBMA/WCFT/WJSU Birmingham (Anniston and Tuscaloosa), Alabama ~~WHTM Harrisburg-Lancaster-York-Lebanon, Pennsylvania~~ KATV Little Rock, Arkansas KTUL Tulsa, Oklahoma WSET Roanoke-Lynchburg, Virginia

The Company also provides 24-hour per day basic cable television programming to the Washington, D.C. market, through NewsChannel 8, primarily focused on regional and local news for the Washington, D.C. metropolitan area. The operations of NewsChannel 8 are integrated with WJLA (WJLA/NewsChannel 8).

~~The~~On ~~Company~~July 28, ~~owned and operated POLITICO~~2013, athe ~~specialized~~Allbritton ~~newspaper~~family ~~and~~entered ~~Internet~~into ~~site~~an ~~(politico.com),~~agreement ~~from~~to ~~its~~sell ~~launch~~the instock ~~2007~~of ~~until November 13,~~Perpetual ~~2009,~~and ~~at which time~~ the equity ~~interests~~interest of ~~POLITICO~~an affiliate, ~~were~~Charleston ~~distributed~~Television, LLC to ~~Perpetual~~the Sinclair Broadcast Group. See Note 711.

Based upon regular assessments of its operations and internal financial reporting, the Company has determined that it has one reportable segment.

NOTE 2—SIGNIFICANT ACCOUNTING POLICIES

Consolidation—The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries after elimination of all significant intercompany accounts and transactions.

Use of estimates and assumptions—The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates and assumptions.

F-6

ALLBRITTON COMMUNICATIONS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands)

Revenue recognition—Revenues are generated principally from sales of commercial advertising and are recorded as the advertisements are broadcast net of agency and national representative commissions and music license fees. For certain program contracts which provide for the exchange of advertising time in lieu of cash payments for the rights to such programming, revenue is recorded as advertisements are broadcast at the estimated fair value of the advertising time given in exchange for the program rights. Such barter revenue was $4,~~943~~708, $4,~~708~~030 and $4,~~030~~711 for the years ended September 30, ~~2010~~2011, ~~2011~~2012 and ~~2012~~2013, respectively. Subscriber fee revenues are recognized in the period during which programming is provided, pursuant to affiliation agreements with cable television systems, direct broadcast satellite service providers and telephone company operators.

Cash and cash equivalents—The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.

Accounts ~~Receivable~~receivable and ~~Allowance~~allowance for ~~Doubtful~~doubtful ~~Accounts~~accounts—The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. As is customary in the broadcasting industry, the Company does not require collateral for its credit sales, which are typically due within thirty days.

Program rights—The Company has entered into contracts for the rights to television programming. Payments related to such contracts are generally made in installments over the contract period. Program rights which are currently available and the liability for future payments under such contracts are reflected in the consolidated balance sheets. The vast majority of the Company’s program rights represent one-year contracts for first-run syndicated programming. As each broadcast over the term of the contract generally provides the same advertising value, such program rights are amortized on a straight-line basis over the term. A limited number of multi-year program contracts representing off-network syndicated programming are amortized on an accelerated basis due to the generally higher advertising value of the early broadcasts. Program rights expected to be amortized in the succeeding year and amounts payable within one year are classified as current assets and liabilities, respectively. The program rights are reflected in the consolidated balance sheets at the lower of unamortized cost or estimated net realizable value based on management’s expectation of the net future cash flows to be generated by the programming.

Property, plant and equipment—Property, plant and equipment are recorded at cost and depreciated over the estimated useful lives of the assets. Maintenance and repair expenditures are charged to expense as incurred and expenditures for modifications and improvements which increase the expected useful lives of the assets are capitalized. Depreciation expense is computed using the straight-line method for buildings and straight-line and accelerated methods for furniture, machinery and equipment. Leasehold improvements are amortized using the straight-line method over the lesser of the term of the related lease or the estimated useful lives of the assets. The Company reviews the carrying amount of property, plant and equipment for impairment whenever events and circumstances indicate that the carrying amount of such assets

F-7

ALLBRITTON COMMUNICATIONS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands)

may not be recoverable. Recoverability is measured by comparison of the carrying amount of the assets to the estimated undiscounted future cash flows associated with them.

The useful lives of property, plant and equipment for purposes of computing depreciation and amortization expense are:


Buildings			15-40 years
Leasehold improvements			5-16 years
Furniture, machinery and equipment			3-20 years

Intangible assets—Intangible assets consist of values assigned to broadcast licenses ~~as well as favorable terms on contracts and leases~~. The amounts originally assigned to these intangible assets were based on the results of independent valuations. ~~Intangible~~Broadcast ~~assets~~licenses are deemed to have indefinite- lives, ~~consisting~~and ~~of broadcast licenses,~~ are not amortized but are subject to tests for impairment at least annually each September 30, or whenever events indicate that impairment may exist. The Company also evaluates the remaining life of its broadcast licenses each period. While broadcast licenses are granted by the Federal Communications Commission (FCC) for a fixed period of time, renewals of these licenses have occurred routinely and at nominal cost. Costs associated with the renewal of broadcast licenses are expensed as incurred. ~~Other~~ ~~intangible assets, consisting of favorable terms on contracts and leases, are amortized over their useful lives.~~

Impairment of indefinite-lived intangible assets—When the Company assesses its indefinite-lived intangible assets for impairment it has the option of performing a qualitative assessment to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired, before further quantitative impairment testing is necessary. Relevant factors considered under the qualitative assessment include, but are not limited to, whether there have been changes in macroeconomic conditions, the broadcast industry, the operating model of a broadcast station, the Company’s financial performance and the results of its most recent quantitative assessment. The Company considers these factors and the impact that changes in such factors would have on the inputs used in its most recent quantitative assessment to determine whether, on a station-by-station basis, it is more likely than not that any of its broadcast licenses are impaired.

If the Company concludes through its qualitative assessment that it is more likely than not that its broadcast licenses are impaired, or if the Company chooses to bypass the qualitative assessment, the Company would perform a quantitative assessment using an income approach consistent with the methodology used in historical valuation assessments to determine the fair value of the broadcast licenses on a station-by-station basis. If the results of such assessment yield that the carrying value of a station’s broadcast license exceeds the fair value, any excess would be recorded as the amount of impairment. The income approach assumes an initial hypothetical start-up operation, maturing into an average performing independent or non-affiliated station in a specific television market and giving consideration to other relevant factors such as the number of competing stations within that market. The net cash flows of this hypothetical average market participant are projected from the first year start-up to perpetuity and then discounted back to net present value. The calculated valuation is compared to market

F-8

ALLBRITTON COMMUNICATIONS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands)

transactions in order to confirm the results of the income approach. The key valuation assumptions include the pre-tax discount rate, the compound annual market revenue growth rates, and operating profit margins, excluding depreciation and amortization, after the hypothetical start-up period. The inputs used in this assessment are considered to be Level 3 in the fair value hierarchy. See “Fair value” below.

Deferred financing costs—Costs incurred in connection with the issuance of long-term debt are deferred and amortized to other nonoperating expense on a straight-line basis over the term of the underlying financing agreement.

Deferred rent—Rent concessions and scheduled rent increases in connection with operating leases are recognized as adjustments to rental expense on a straight-line basis over the associated lease term.

Concentration of credit risk—Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of certain cash and cash equivalents and receivables from advertisers. The Company invests its excess cash with high-credit quality financial institutions, and concentrations of credit risk with respect to receivables from advertisers are limited as the Company’s advertising base consists of large national advertising agencies and high-credit quality local advertisers.

Income taxes—The operations of the Company are included in a consolidated federal income tax return filed by Perpetual. In accordance with the terms of a tax sharing agreement between the Company and Perpetual, the Company is required to pay to Perpetual its federal income tax liability, computed based upon statutory federal income tax rates applied to the Company’s consolidated taxable income. The Company files separate state income tax returns with the exception of Virginia (and ~~effective for Fiscal 2012, also~~ the District of Columbia), which are included in combined state income tax returns filed by Perpetual. In accordance with the terms of the tax sharing agreement, the Company is required to pay to Perpetual its combined state income tax liability, computed based upon statutory state income tax rates applied to the Company’s combined state net taxable income. Taxes payable to Perpetual are not reduced by losses generated in prior years by the Company. In addition, the amounts payable by the Company to Perpetual under the tax sharing agreement are not reduced if losses of other members of the Perpetual group are utilized to offset taxable income of the Company for purposes of the Perpetual consolidated federal or combined state income tax returns.

The accounting rules for income taxes require that the consolidated amount of current and deferred income tax expense for a group that files a consolidated income tax return be allocated among members of the group when those members issue separate financial statements. Perpetual allocates a portion of its consolidated current and deferred income tax expense to the Company as if the Company and its subsidiaries were separate taxpayers. The Company records deferred tax assets, to the extent it is more likely than not that such assets will be realized in future periods, and deferred tax liabilities for the tax effects of the differences between the bases of its assets and liabilities for tax and financial reporting purposes.

F-9

ALLBRITTON COMMUNICATIONS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands)

The Company records income tax expense in accordance with the accounting rules for income taxes, and makes payments to Perpetual in accordance with the terms of the tax sharing agreement between the Company and Perpetual. To the extent that there is a difference between tax payments that would be due as calculated in accordance with the accounting rules and tax payments due under the tax sharing agreement, such difference is recorded to retained earnings.

The Company classifies interest and penalties related to its uncertain tax positions as a component of income tax expense.

Discontinued operations—The consolidated statements of operations and retained earnings separately present discontinued operations and the results of continuing operations. See Note 7. Discontinued operations have not been segregated in the consolidated statements of cash flows and, therefore, amounts for certain captions will not agree directly with the accompanying consolidated statements of operations and retained earnings. Footnote disclosures include both continuing and discontinued operations unless noted otherwise.

Fair value—The carrying amount of the Company’s cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and program rights payable approximate fair value due to the short maturity of those instruments.

Accounting guidance provides a fair value hierarchy to categorize three levels of inputs that may be used to measure fair value. The three levels are as follows:

Level 1 – Observable inputs such as quoted prices in active markets for identical assets or liabilities;

Level 2 – Observable inputs other than Level 1, such as quoted prices for similar assets or liabilities; quoted prices for identical assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities;

Level 3 – Unobservable inputs that are supported by little or no market activity which result in the use of management estimates.

The Company estimates the fair value of its long-term debt on a recurring basis. See Note 5.

Earnings per share—Earnings per share data are not presented since the Company has only one shareholder.

Reclassifications—Certain amounts in previously issued financial statements have been reclassified to conform to the current year presentation.

New Accounting Standards—In May 2011, the Financial Accounting Standards Board (FASB) issued new guidance that changed certain fair value measurement principles and enhanced the related disclosure requirements. The Company adopted this guidance as of January 1, 2012. The adoption had no effect on the Company’s financial position or results of operations.

F-10

ALLBRITTON COMMUNICATIONS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands)

In September 2011, the FASB issued new guidance requiring additional separate disclosures for multiemployer pension plans and multiemployer other postretirement benefit plans. These disclosures are required for annual periods ending after December 15, 2011. The Company has included these required disclosures in the accompanying footnotes. See Note 9.

In July 2012, the FASB issued new guidance regarding testing indefinite-lived intangible assets for impairment which is intended to reduce the cost and complexity of the annual indefinite-lived asset impairment test by providing entities with the option of performing a qualitative assessment to determine whether further impairment testing is necessary. The revised standard is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. The Company early adopted this guidance as part of its annual impairment assessment of its broadcast licenses as of September 30, 2012. The adoption of this guidance had no effect on the Company’s financial position or results of operations.

NOTE 3—PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consists of the following:

	September 30,
	2011			2012
	2012			2013
Buildings and leasehold improvements	$	32,~~965~~250		$	32,~~250~~584
Furniture, machinery and equipment		~~115~~105,~~223~~795			~~105~~96,~~795~~682
		148,188			138,045
		138,045			129,266
Less accumulated depreciation		(~~114~~109,~~702~~439	)		(~~109~~103,~~439~~726	)
		33,486			28,606
		28,606			25,540
Land		21,~~147~~951			1,~~951~~831
Construction-in-progress		~~2,601~~533			~~533~~101
	$	3831,~~234~~090		$	3127,~~090~~472

Depreciation and amortization expense was $89,~~876~~500, $9,~~500~~624 and $97,~~624~~281 for the years ended September 30, ~~2010~~2011, ~~2011~~2012 and ~~2012~~2013, respectively.

~~The~~NOTE ~~FCC~~4—INTANGIBLE ~~granted~~ASSETS to Sprint Nextel Corporation (Nextel) the right to reclaim a portion of the spectrum in the 2 GHz band from broadcasters across the country. In order to claim this spectrum, Nextel was required to replace all of the broadcasters’ electronic newsgathering equipment using this spectrum with digital equipment capable of operating in the reformatted portion of the 2 GHz band retained by the broadcasters. This exchange of equipment was completed on a market by market basis. As the equipment was exchanged and placed into service in each of the Company’s

The carrying value of the Company’s indefinite-lived intangible assets, consisting of its broadcast licenses, at September 30, 2012 and 2013 was $11,590.

The Company tests its indefinite-lived intangible assets for impairment annually on September 30 as well as on an interim basis whenever events indicate that impairment may exist. The annual impairment tests as of September 30, 2012 and 2013 indicated that none of the broadcast licenses were impaired. No impairment charges were recorded during the years ended September 30, 2011, 2012 and 2013.

F-11

ALLBRITTON COMMUNICATIONS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands)

markets, a gain was recorded to the extent that the fair market value of the equipment received exceeded the book value of the analog equipment exchanged.

During the year ended September 30, 2010, the fair market value of the equipment received and placed into service was $2,591. This amount was recorded as an addition to property, plant and equipment, but is not included in capital expenditures in the accompanying consolidated statement of cash flows as no cash was involved in the exchange. The excess of fair market value as compared to the book value of equipment exchanged and placed into service of $2,591 for the year ended September 30, 2010 was recorded as a non-cash gain in other, net nonoperating income in the accompanying consolidated financial statements. There were no exchanges during the years ended September 30, 2011 and 2012.

NOTE 4—INTANGIBLE ASSETS

The carrying value of the Company’s indefinite-lived intangible assets, consisting of its broadcast licenses, at September 30, 2011 and 2012 was $11,590.

The Company tests its indefinite-lived intangible assets for impairment annually on September 30 as well as on an interim basis whenever events indicate that an impairment may exist. The annual impairment tests as of September 30, 2011 and 2012 indicated that none of the broadcast licenses were impaired. No impairment charges were recorded during the years ended September 30, 2010, 2011 and 2012.

The Company’s other intangible assets, consisting of favorable terms on contracts and leases, had a gross carrying amount of $6,174 and no net carrying value at September 30, 2011 or 2012 as these intangible assets are fully amortized.

F-12

ALLBRITTON COMMUNICATIONS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands)

NOTE 5—LONG-TERM DEBT

Outstanding debt consists of the following:

	September 30,
	2011		2012
	2012		2013
Senior Notes, due May 15, 2018 with interest payable semi-annually at 8%	$	455,000	$	455,000
Credit Agreement, maximum amount of $60,000, expiring April 30, 2015, secured by the assets and outstanding stock of the Company and its subsidiaries, interest payable quarterly at various rates either from prime plus 1.50% to prime plus 2.25% or from LIBOR plus 2.75% to LIBOR plus 3.50% depending on certain financial operating tests		~~5,000~~—		—
		460,000		455,000
		455,000		455,000
Less current maturities		—		—
	$	~~460~~455,000	$	455,000

~~Effective~~Unamortized ~~April~~deferred financing costs of $7,348 and $5,999 at September 30, 2012 and 2013, respectively, are included in deferred financing costs and other noncurrent assets in the ~~maturity~~accompanying ~~date~~consolidated balance sheets. Amortization of the ~~Company’s~~deferred ~~Credit~~financing ~~Agreement~~costs ~~was~~for ~~extended~~the ~~from April~~years ended September 2930, 2011, 2012 and 2013 towas ~~April 30~~$1,486, $1,429 ~~2015~~and ~~with~~$1,349, norespectively, ~~change~~which is included in ~~terms~~other nonoperating expenses.

~~Unamortized~~Under ~~deferred~~the ~~financing~~borrowing ~~costs~~agreements for each of the ~~$8,758~~Senior Notes and $7the Credit Agreement,~~348 at~~ ~~September 30~~the Company is subject to restrictive covenants that place limitations upon payments of cash distributions, ~~2011~~dividends, ~~and~~issuance ~~2012~~of capital stock, ~~respectively~~investment transactions, ~~are~~incurrence ~~included~~of inadditional obligations ~~deferred~~and ~~financing~~transactions ~~costs~~with affiliates. The Credit Agreement contains the most restrictive covenants and ~~other~~limitations ~~noncurrent~~of ~~assets~~this innature. In addition, under the ~~accompanying~~Credit ~~consolidated~~Agreement, ~~balance~~the ~~sheets~~Company must maintain compliance with certain financial covenants. ~~Amortization~~There are no such financial maintenance covenants under the terms of the ~~deferred~~Senior ~~financing~~Notes. ~~costs~~Compliance ~~for~~with the ~~years~~financial ~~ended~~ maintenance covenants under the Credit Agreement is measured at the end of each quarter, and as of September 30, ~~2010~~ 2013, ~~2011~~the ~~and~~Company ~~2012~~ was ~~$1,305,~~in ~~$1,486~~compliance ~~and~~with ~~$1,429~~those ~~respectively,~~financial ~~which~~covenants. The Company is ~~included~~also inrequired ~~other~~to ~~nonoperating~~pay ~~expenses~~a commitment fee ranging from 0.375% to 0.500% per annum based on the amount of any unused portion of the Credit Agreement.

~~Under~~The ~~the~~Company ~~borrowing~~estimates ~~agreements for each of~~ the ~~Senior~~fair ~~Notes~~value ~~and the Credit Agreement, the Company is subject to restrictive covenants that place limitations upon payments~~ of ~~cash~~its ~~distributions,~~long-term ~~dividends, issuance~~debt ofon ~~capital~~a ~~stock,~~recurring ~~investment transactions, incurrence of additional obligations and transactions with affiliates~~basis. The ~~Credit~~Company ~~Agreement~~estimates ~~contains~~ the ~~most~~fair ~~restrictive~~value ~~covenants and limitations~~ of ~~this~~its ~~nature. In addition, under the Credit Agreement, the Company must maintain compliance with certain financial covenants. There are no such financial maintenance covenants under the terms of the~~ Senior Notes~~. Compliance with the financial maintenance covenants under the Credit Agreement~~ isto ~~measured~~be atapproximately ~~the end of each quarter~~$495,000 and as of September 30, 2012, the Company was in compliance with those financial covenants. The Company is also required to pay a commitment fee ranging from 0.375% to 0.500% per annum based on the amount of any unused portion of the Credit Agreement.

F-1312

ALLBRITTON COMMUNICATIONS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands)

~~The Company estimates the fair value of its long-term debt on a recurring basis. The~~ ~~Company estimates the fair value of its Senior Notes to be approximately~~ $~~428~~491,000 ~~and $495,000~~ at September 30, ~~2011~~2012 and ~~2012~~2013, respectively. This fair value estimate was determined based on quoted market prices provided by investment banking firms who regularly make a market in the Company’s Senior Notes, which is considered to be a Level 2 input. The carrying value of the Company’s Credit Agreement approximated fair value at September 30, 2011. This estimate was determined using a discounted cash flow analysis which is considered to be a Level 3 input. There was no amount outstanding under the Company’s Credit Agreement as of September 30, 2012 and 2013.

NOTE 6—INCOME TAXES

The provision for (benefit from) income taxes consists of the following:

	Years Ended September 30,
	2010			2011			2012
	2011			2012			2013
Continuing operations	$	6,888		$	8,759		$	16,674
Discontinued operations		1,028			—			—
	$	7,916		$	8,759		$	16,674
	Years Ended September 30,
	2010			2011			2012
Current
Federal	$	65,~~761~~739		$	514,~~739~~472		$	1415,~~472~~964
State		(~~1,745~~661	)		~~(661~~2,439	)		2,~~439~~724
		5,016			5,078			16,911
		5,078			16,911			18,688
Deferred
Federal		43,~~986~~101			~~3,101~~(670	)		(~~670~~623	)
State		~~(2,086~~580	)		~~580~~433			~~433~~334
		2,900			3,681			(237	)
		3,681			(237	)		(289	)
	$	78,~~916~~759		$	816,~~759~~674		$	1618,~~674~~399

~~The provision for income taxes for the year ended September 30, 2010 does not include the current~~F-13 ~~tax effect of the distribution of the equity interests of POLITICO to Perpetual on~~

F-14

ALLBRITTON COMMUNICATIONS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands)

November 13, 2009. Such tax effect of $1,766 was reflected as a reduction to stockholder’s investment during the year ended September 30, 2010 in accordance with the accounting rules for such transactions. See Note 7.

The components of deferred income tax assets (liabilities) are as follows:

	September 30,
	2011			2012
	2012			2013
Deferred income tax assets:
State and local net operating loss carryforwards	$	2,~~839~~321		$	21,~~321~~960
Accrued employee benefits		~~352~~183			~~183~~242
Deferred rent		21,~~084~~896			1,~~896~~662
Deferred revenue		~~303~~523			~~523~~105
Allowance for accounts receivable		~~615~~579			~~579~~541
Other		~~752~~731			~~731~~878
		6,945			6,233
		6,233			5,388
Less valuation allowance		(~~231~~229	)		(~~229~~217	)
		6,714			6,004
		6,004			5,171
Deferred income tax liabilities:
Property, plant and equipment		(43,~~883~~844	)		(32,~~844~~665	)
Intangible assets		(1,~~764~~856	)		(1,~~856~~913	)
Net deferred income tax assets	$	67304		$	~~304~~593

The deferred tax asset related to state and local net operating loss carryforwards of $21,~~321~~960 at September 30, ~~2012~~2013 represents approximately $4437,000 in state and local net operating loss carryforwards in certain jurisdictions which are available for future use for state and local income tax purposes and expire in various years from ~~2013~~2014 through 2030.

The decrease in the valuation allowance for deferred tax assets of $112 and $212 during the years ended September 30, ~~2011~~2012 and ~~2012~~2013, respectively, principally resulted from the expiration of net operating loss carryforward periods.

F-1514

ALLBRITTON COMMUNICATIONS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands)

The following table reconciles the statutory federal income tax rate to the Company’s effective income tax rate for income before ~~cumulative~~income ~~effect of change in accounting principle~~taxes:

	Years ended September 30,
	2010			2011			2012
	2011			2012			2013
Statutory federal income tax rate		35.0	%		35.0	%		35.0	%
State income taxes, net of federal income tax benefit		(10.91	)		04.15			43.59
Permanent items, principally a domestic production deduction		(01.52	)		(1.2.6	)		(2.64	)
Change in valuation allowance		(8.7	)		—			—
Gain on settlement of insurance policies		—			—			(2.6	)
Other, net		—(0.5	)		(0.53	)		~~(0.3~~—	)
Effective income tax rate		2333.94	%		3336.46	%		3633.69	%

A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows:

Gross unrecognized tax benefits at October 1, 2009	$	4,569
Gross unrecognized tax benefits at September 30, 2010	$	2,685
Increases related to current year tax positions		384
Reductions related to expiration of statutes of limitations		(2,111	)
Reductions related to expiration of net operating loss carryforwards		(157	)
Gross unrecognized tax benefits at September 30, 2010		2,685
Increases related to current year tax positions		—
Reductions related to expiration of statutes of limitations		(1,281	)
Gross unrecognized tax benefits at September 30, 2011		1,404
Increases related to current year tax positions		—
Reductions related to expiration of statutes of limitations		(166	)
Gross unrecognized tax benefits at September 30, 2012	$	1,238
Increases related to current year tax positions		—
Reductions related to expiration of statutes of limitations		(116	)
Gross unrecognized tax benefits at September 30, 2013	$	1,122

As of September 30, ~~2011~~2012 and ~~2012~~2013, the Company had unrecognized tax benefits of $1,~~404~~238 and $1,~~238~~122, respectively. If all such benefits were recognized, $~~913~~804 and $~~804~~729, respectively, would have a favorable impact on the effective tax rate. Of the total gross unrecognized tax benefits of $1,~~404~~238 at September 30, ~~2011~~2012, $~~642~~766 were recorded in deferred rent and other noncurrent liabilities on the accompanying consolidated balance sheets, and the remaining $~~762~~472 ~~represented~~represents net operating losses which have not been recorded, in accordance with the rules surrounding uncertain tax positions. Of the total gross unrecognized tax benefits of $1,122 at September 30, 2013, $933 are recorded in deferred rent and other noncurrent liabilities on the accompanying consolidated balance sheets, and the remaining $189 represents net operating losses which have not been recorded, in accordance with the rules surrounding uncertain tax positions.

F-1615

ALLBRITTON COMMUNICATIONS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands)

losses which have not been recorded in accordance with the rules surrounding uncertain tax positions. Of the total gross unrecognized tax benefits of $1,238 at September 30, 2012, $766 are recorded in deferred rent and other noncurrent liabilities on the accompanying consolidated balance sheets, and the remaining $472 represents net operating losses which have not been recorded in accordance with the rules surrounding uncertain tax positions.

The Company expects that it is reasonably possible that the amount of unrecognized tax benefits will decrease during the next twelve months in the approximate range of $100 to $300, primarily due to the expected expiration of certain statutes of limitations.

The Company classifies interest and penalties related to its uncertain tax positions as a component of income tax expense. Accrued interest and penalties were $95141 and $~~141~~272 at September 30, ~~2011~~2012 and ~~2012~~2013, respectively. During the year ended September 30, 2011 the Company recognized a reduction in accrued interest and penalties of $343, while during the ~~year~~years ended September 30, 2012 and 2013, the Company recognized anincreases ~~increase~~ in ~~accrued~~ accrued interest and penalties of $46 and $131, respectively.

The Company is no longer subject to Federal or state income tax examinations for years prior to the Company’s fiscal year ended September 30, ~~2009~~2010, although certain of the Company’s net operating loss carryforwards generated prior to September 30, ~~2009~~2010 remain subject to examination.

The Company’s operations are included in a consolidated federal income tax return and certain combined state income tax returns filed by Perpetual. Income tax expense is calculated and recorded in accordance with the accounting rules for income taxes as if the Company was a separate taxpayer from Perpetual. The Company makes payments to Perpetual in accordance with the terms of a tax sharing agreement between Perpetual and the Company.

NOTE 7—~~DISCONTINUED~~TRANSACTIONS ~~OPERATIONS~~WITH OWNERS AND RELATED PARTIES

On November 13, 2009, the equity interests of POLITICO, a wholly-owned subsidiary of the Company, were distributed to Perpetual. As the operations of POLITICO constitute a component of the Company, the operating results of POLITICO through November 13, 2009 are presented as discontinued operations for all periods presented. The November 13, 2009 distribution of the equity interests of POLITICO was reflected as a distribution to owners at historical cost, or $5,363, in the accompanying statement of operations and retained earnings. The $5,363 of equity interests of POLITICO distributed on November 13, 2009 consisted of current assets of $7,548, net property, plant and equipment of $258, current liabilities of $2,429 and non-current liabilities of $14. The distribution of POLITICO resulted in a current tax effect of $1,766 which was reflected as a reduction to stockholder’s investment.

F-17

ALLBRITTON COMMUNICATIONS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands)

POLITICO’s operating results for the year ended September 30, 2010 were as follows:

Operating revenues, net	$	5,198
Total expenses		2,529
Income before taxes		2,669
Provision for income taxes		1,028
Net income from discontinued operations	$	1,641

NOTE 8—TRANSACTIONS WITH OWNERS AND RELATED PARTIES

Distributions to Owners, Net

In the ordinary course of business, the Company makes cash advances in the form of distributions to Perpetual. At present, the primary source of repayment of the net advances from the Company is through the ability of the Company to pay dividends or make other distributions. There is no immediate intent for these amounts to be repaid. Accordingly, such amounts have been treated as a reduction of stockholder’s investment and described as “distributions” in the accompanying consolidated balance sheets. The weighted average amount of non-interest bearing advances outstanding was $~~474~~483,~~338~~381, $~~483~~494,~~381and~~791 and $~~494~~544,~~791~~790 during Fiscal ~~2010,~~ 2011, 2012 and ~~2012~~2013, respectively.

On November 13, 2009, the equity interests of POLITICO were distributed to Perpetual. See Note 7.

The operations of the Company are included in a consolidated federal income tax return and certain combined state income tax returns filed by Perpetual. The Company is charged by Perpetual and makes payments to Perpetual for federal and combined state income taxes, which are computed in accordance with the terms of a tax sharing agreement between the Company and Perpetual.

F-1816

ALLBRITTON COMMUNICATIONS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands)

The components of distributions to owners and the related activity during Fiscal ~~2010~~2011, ~~2011~~2012 and ~~2012~~2013 consist of the following:

	Distributionsto Ownersand Dividends		Federal andState IncomeTax Receivable(Payable)			NetDistributionsto Owners
	Distributionsto OwnersandDividends		Federal andState IncomeTaxReceivable(Payable)			NetDistributionsto Owners
Balance as of September 30, 2009	$	478,818	$	(2,045	)	$	476,773
Balance as of September 30, 2010	$	484,723	$	—		$	484,723
Cash advances to Perpetual		5,905					5,905
Repayment of cash advances from Perpetual		—					—
Charge for federal and state income taxes				(9,272	)		(9,272	)
Payment of income taxes				11,317			11,317
Balance as of September 30, 2010		484,723		—			484,723
Cash advances to Perpetual		8,310					8,310
Repayment of cash advances from Perpetual		—					—
Charge for federal and state income taxes				(6,411	)		(6,411	)
Payment of income taxes				6,411			6,411
Balance as of September 30, 2011		493,033		—			493,033
Cash advances to Perpetual		17,913					17,913
Repayment of cash advances from Perpetual		—					—
Charge for federal and state income taxes				(15,878	)		(15,878	)
Payment of income taxes				15,878			15,878
Balance as of September 30, 2012	$	510,946	$	—		$	510,946
Cash advances to Perpetual		53,038					53,038
Repayment of cash advances from Perpetual		—					—
Charge for federal and state income taxes				(17,480	)		(17,480	)
Payment of income taxes				17,480			17,480
Balance as of September 30, 2013	$	563,984	$	—		$	563,984

Subsequent to September 30, ~~2012~~2013 and through December 1312, ~~2012~~2013 the Company made net distributions to owners of $3028,~~000~~500.

Other Transactions with Related Parties

During the years ended September 30, ~~2010~~2012 and ~~September 30~~2013, ~~2012,~~ the Company earned interest income from Perpetual of $~~215~~328 and $~~328~~606, respectively, as a result of making advances of tax payments in accordance with the terms of the tax sharing agreement between the Company and Perpetual. No advances of tax payments were made during the year ended September 30, 2011.

The Company paid management fees of $600 to Perpetual for each of the years ended September 30, ~~2010~~2011, ~~2011~~2012 and ~~2012.~~2013, and such amounts are included in corporate expenses in the consolidated statements of operations.

F-1917

ALLBRITTON COMMUNICATIONS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands)

The Company has entered into various agreements with Irides, LLC (Irides) to provide the Company’s stations with certain website design, hosting and maintenance services. Irides is an indirect subsidiary of Perpetual. The Company paid fees of $~~330~~360, $~~360~~366 and $~~366~~183 to Irides during the years ended September 30, ~~2010~~2011, ~~2011~~2012 and ~~2012~~2013, respectively. These fees are included in television operating expenses in the consolidated statements of operations. The Company also ~~provides~~provided certain office space to Irides. Charges for this space totaled $~~154~~159, $~~159~~163 and $~~163~~83 for the years ended September 30, ~~2010~~2011, ~~2011~~2012 and ~~2012~~2013, respectively, and such amounts are included as an offset to television operating expenses in the consolidated statements of operations. Effective April 1, 2013, Irides discontinued providing these services to the Company in conjunction with POLITICO’s assumption of certain activities of the Irides business.

~~Subsequent~~POLITICO, toan ~~the~~affiliate ~~distribution~~ of ~~the equity interests of POLITICO to~~ Perpetual ~~on November 13~~, ~~2009~~provides ~~(see Note 7), POLITICO has provided~~ the Company with certain website development services. The Company was charged $~~739~~520, $163 and $152 for such services during the ~~period~~years ~~from~~ended ~~November~~September 1430, ~~2009~~2011, ~~through~~2012 ~~September 30~~and 2013, ~~2010~~respectively. OfDuring ~~this~~the ~~amount~~year ended September 30, 2011, $~~495~~41 of the total amount was capitalized and $~~244~~479 was included in television operating expenses in the consolidated statements of operations. ~~The~~There ~~Company~~were ~~was~~no ~~charged~~amounts ~~$520~~capitalized ~~and $163 for such services~~ during the years ended September 30, ~~2011~~2012 and ~~2012, respectively~~2013. ~~During~~Additionally, ~~the~~effective ~~year ended September~~April 301, ~~2011~~ 2013, ~~$41~~POLITICO ofbegan ~~the~~providing ~~total~~certain ~~amount~~website ~~was~~design, ~~capitalized~~hosting and maintenance ~~$479~~services ~~was~~previously ~~included~~performed inby ~~television~~Irides ~~operating~~as ~~expenses~~well inas ~~the~~certain ~~consolidated~~facilities-related ~~statements~~services ofpreviously ~~operations~~performed by Company personnel. ~~There~~The ~~were~~charges nofor ~~amounts~~these ~~capitalized~~services totaled $456 during the year ended September 30, ~~2012~~2013 and were included in television operating expenses in the consolidated statements of operations. The Company also provides certain office space and, until April 1, 2013, facilities-related services to POLITICO. Such charges totaled $~~667 for the period from November 14~~1, ~~2009 through September 30~~054, ~~2010 and~~ $1,~~054~~050 and $1,~~050~~090 for the years ended September 30, 2011, ~~and~~ 2012 and 2013, respectively, and are included as an offset to television operating expenses in the consolidated statements of operations.

NOTE 98—RETIREMENT PLANS

A defined contribution savings plan is maintained for eligible employees of the Company and certain of its affiliates. Under the plan, employees may contribute a portion of their compensation subject to Internal Revenue Service limitations and the Company contributes an amount equal to 50% of the contribution of the employee not to exceed 6% of the compensation of the employee. The Company’s matching contribution changed during the fiscal periods presented. Effective July 1, 2010, the Company reinstated matching contributions that were suspended during 2009 in an amount equal to 25% of the contribution of the employee not to exceed 6% of the compensation of the employee. Effective June 1, 2011, the Company reinstated its full matching contribution of 50% of the contribution of the employee not to exceed 6% of the compensation of the employee. The amounts contributed to the plan by the Company on behalf of its employees totaled approximately $35628, $~~628~~1,094 and $1,~~094~~090 for the years ended September 30, ~~2010~~2011, ~~2011~~2012 and ~~2012~~2013, respectively.

The Company also contributes to certain other multi-employer union pension plans on behalf of certain of its union represented employees in accordance with the terms of the ~~applicable collective bargaining agreements. Certain union represented employees are permitted~~

F-2018

ALLBRITTON COMMUNICATIONS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands)

applicable collective bargaining agreements. Certain union represented employees are permitted to participate in Company sponsored benefits; however others are required by the applicable collective bargaining agreement to participate in union sponsored benefits. Substantially all of the union represented employees that participate in union sponsored benefits, are covered under the AFTRA Health Plan, Employer Identification Number (EIN) 13-3467049, Plan No. 502, and the AFTRA Retirement Plan, EIN 13-6414972, Plan No. 001 (the Plan, or collectively, the Health and Retirement Fund). The Company does not sponsor or administer either of those plans. The Company’s contributions to the Health and Retirement Fund are set out in the Company’s collective bargaining agreement with AFTRA (the Agreement), which expires on September 30, ~~2013~~2015. The Agreement requires the Company to pay the Health and Retirement Fund amounts based on each eligible employee’s salary, not to exceed an agreed upon salary limit. The amounts contributed to the Health and Retirement Fund totaled approximately $603, $~~603~~663 and $~~663~~767 for the years ended September 30, ~~2010~~2011, ~~2011~~2012 and ~~2012~~2013, respectively, and did not represent greater than 5% of the total Plan contributions. The Company does not control the application of contributions to the separate AFTRA Health and Retirement Plans. In addition, the Company was not required to pay a surcharge to the Plan during the years presented.

The risks of participating in a multi-employer pension plan differ from a single-employer pension plan primarily due to the following:

•

Assets contributed to a multi-employer pension plan by one employer may be used to provide benefits to employees of other participating employers;

•

If a participating employer stops contributing to a multi-employer pension plan, the unfunded obligations of that plan may be borne by the remaining participating employers; and

•

If a participating employer stops participating in a multi-employer pension plan, that employer may be required to pay the plan an amount based on the underfunded status of the plan, referred to as a withdrawal liability.

The Plan was not in endangered or critical status during any of the years presented, as defined under the Pension Protection Act of 2006. Accordingly, no funding improvement or rehabilitation plan has been implemented or is pending. The Plan elected to extend the amortization period for its 2008 net investment losses and to smooth the net investment losses over ten years in the actuarial value of assets.

NOTE 109—COMMITMENTS AND CONTINGENT LIABILITIES

The Company leases office and studio facilities and machinery and equipment under operating leases pursuant to noncancellable lease ~~term~~terms expiring in various years through 2023. Certain leases contain provisions for renewal and extension. In addition, the Company has entered into contractual commitments in the ordinary course of business for the rights to television programming which is not yet available for broadcast as of September 30, ~~2012~~2013. The Company has also entered into ~~new~~ network affiliation agreements with ABC, expiring December 31, 2017. Under these agreements, the Company must ~~make~~ make specific minimum payments for the

F-2119

ALLBRITTON COMMUNICATIONS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands)

~~payments for the~~ various program rights. The Company has also entered into various employment contracts which include future guaranteed payments.

Future minimum ~~lease~~ payments for these ~~operating leases,~~ contractual program commitments, ~~and~~ employment contracts and operating leases which have remaining ~~terms~~ terms in excess of one year as of September 30, ~~2012~~2013, are as follows:

	OperatingLeases		ProgramRights		EmploymentContracts
	ProgramRights		EmploymentContracts		OperatingLeases
Year ending September 30,
2013	$	5,856	$	8,744	$	11,081
2014	$	12,411	$	12,345	$	5,980
2014		6,000		18,865		3,339
2015		20,911		3,098		6,039
2015		6,026		20,095		1,920
2016		21,874		1,687		6,055
2016		6,048		21,132		1,687
2017		18,918		345		4,620
2017		4,633		19,048		345
2018		5,004		90		641
2018 and thereafter		2,821		5,568		90
2019 and thereafter		562		—		2,251
	$	3179,~~384~~680	$	9317,~~452~~565	$	1825,~~462~~586

Rental expense under operating leases aggregated approximately $4,200 for each of the years ended September 30, ~~2010~~2011, ~~2011~~2012 and ~~2012~~2013.

The Company also has certain obligations and commitments under various executory agreements to make future payments for goods and services. These agreements secure the future rights to certain goods and services to be used in the normal course of operations.

Perpetual and the Company have separately entered into various retention agreements with certain key employees of the Company. See Note 11.

The Company currently and from time to time is involved in litigation incidental to the conduct of its business, including suits based on defamation and employment activity. The Company is not currently a party to any lawsuit or proceeding which, in the opinion of management, could reasonably be expected to have a material adverse effect on the Company’s consolidated financial condition, results of operations or cash flows.

FNOTE 10—COMPANY-22 OWNED LIFE INSURANCE POLICIES

During the year ended September 30, 2013, company-owned life insurance policies terminated upon the death of the insured, the Company’s founder and former Chairman. As a result, the Company recognized a $3,993 non-taxable gain representing the difference between the death benefit and the cash surrender value of the policies. The resulting gain was recorded as a component of nonoperating income in the accompanying consolidated statements of operations, and served to reduce the Company’s effective tax rate for the year ended September

F-20

ALLBRITTON COMMUNICATIONS COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Dollars in thousands)

30, 2013. The Company received total proceeds of $18,102 from the policies during the year ended September 30, 2013.

NOTE 11—PURCHASE AGREEMENT

On July 28, 2013, the Allbritton family entered into an agreement to sell the stock of Perpetual and the equity interest of an affiliate, Charleston Television, LLC to the Sinclair Broadcast Group for an aggregate purchase price of $985,000, subject to adjustment for working capital. Completion of the transaction is subject to customary closing conditions, including Federal Communications Commission approval and antitrust clearance, as applicable, and is expected to close during the first or second calendar quarter of 2014, subject to the satisfaction of these conditions.

In anticipation of, and conditioned on the consummation of this transaction, Perpetual and the Company have separately entered into various retention agreements with certain key employees of the Company. These agreements provide a bonus payment upon the completion of the sale of Perpetual to those certain key employees who remain employed by the Company, or its assignee, and will be payable on, or after closing. As of September 30, 2013, the Company has not accrued any amounts for these potential future obligations.

F-21

SCHEDULE II

ALLBRITTON COMMUNICATIONS COMPANY

VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

(Dollars in thousands)

Classification	Balance ~~atbeginningof~~atbeginning ~~year~~ofyear		~~Chargedto~~Charged ~~costsand~~tocosts ~~expenses~~andexpenses			Charged ~~tootheraccounts~~toother accounts			Deductions			Balance atend of year
Year ended September 30, 2010:
Allowance for doubtful accounts	$	1,569	$	599			(144	)<1>	$	(415	)<2>	$	1,609
Valuation allowance for deferred income tax assets	$	2,972	$	262	<3>	$	—		$	(2,992	)<4>	$	242
Year ended September 30, 2011:
Allowance for doubtful accounts	$	1,609	$	612		$	—		$	(670	)<21>	$	1,551
Valuation allowance for deferred income tax assets	$	242	$	—		$	—		$	(11	)<42>	$	231
Year ended September 30, 2012:
Allowance for doubtful accounts	$	1,551	$	559		$	—		$	(639	)<21>	$	1,471
Valuation allowance for deferred income tax assets	$	231	$	—		$	—		$	(2	)<42>	$	229
Year ended September 30, 2013:
Allowance for doubtful accounts	$	1,471	$	159		$	—		$	(250	)<1>	$	1,380
Valuation allowance for deferred income tax assets	$	229	$	—		$	—		$	(12	)<2>	$	217

<1> ~~Represents~~Write-off ~~the distribution~~ of ~~the~~uncollectible ~~equity~~accounts, ~~interests~~net of ~~POLITICO~~recoveries onand ~~November~~collection ~~13, 2009~~fees.

<2> ~~Write-off~~Represents reduction of ~~uncollectible~~valuation ~~accounts,~~allowance ~~net~~relating ofto ~~recoveries~~certain ~~and~~net ~~collection~~operating ~~fees~~loss carryforwards.

~~<3> Represents valuation allowance established related to certain net operating loss carryforwards and other deferred tax assets for state income tax purposes.~~F-22

<4> Represents reduction of valuation allowance relating to certain net operating loss carryforwards.

F-23

SIGNATURES

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

ALLBRITTON COMMUNICATIONS COMPANY
By:		/S/ ROBERT L. ALLBRITTON
		Robert L. Allbritton Chairman and Chief Executive Officer
		Date: December 13, 2012
		Date: December 12, 2013

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 registrant and in the capacities and on the dates indicated.

/S/ BARBARA B. ALLBRITTON Barbara B. Allbritton	Executive Vice President and Director	December 1312, ~~2012~~2013
/S/ ROBERT L. ALLBRITTON Robert L. Allbritton	Chairman, Chief Executive Officer and Director (principal executive officer)	December 1312, ~~2012~~2013
/S/ FREDERICK J. RYAN, JR. Frederick J. Ryan, Jr.	Vice Chairman, President, ~~ChiefOperating~~Chief Operating Officer and Director	December 1312, ~~2012~~2013
/S/ STEPHEN P. GIBSON Stephen P. Gibson	Senior Vice President and Chief Financial Officer (principal financial officer)	December 1312, ~~2012~~2013
/S/ MICHAEL P. LEBER Michael P. Leber	Vice President, Finance (principal accounting officer)	December 1312, ~~2012~~2013

EXHIBIT INDEX


Exhibit No.	Description of Exhibit	Page No.

3.1	Certificate of Incorporation of ACC. (Incorporated by reference to Exhibit 3.1 of Company’s Registration Statement on Form S-4, No. 333-02302, dated March 12, 1996)		*

3.2	Bylaws of ACC. (Incorporated by reference to Exhibit 3.2 of Registrant’s Registration Statement on Form S-4, No. 333-02302, dated March 12, 1996)		*

4.1	Indenture dated as of April 30, 2010 between ACC and U.S. Bank National Association, as trustee, relating to the 8% Senior Notes due 2018. (Incorporated by reference to Exhibit 4.1 of the Company’s Report on Form 8-K, No. 333-02302, dated May 3, 2010)		*

4.2	Credit Agreement dated as of August 23, 2005 by and among ACC, certain financial institutions, and Bank of America, N.A., as the Administrative Agent, and Deutsche Bank Securities Inc., as the Syndication Agent. (Incorporated by reference to Exhibit 4.1 of the Company’s Report on Form 8-K, No. 333-02302, dated August 23, 2005)		*

4.3	Amendment No. 1 to Loan Documents, dated February 5, 2009 by and among ACC, certain of its subsidiaries, certain financial institutions, and Bank of America, N.A., as the Administrative Agent, and Deutsche Bank Securities Inc., as the Syndication Agent. (Incorporated by reference to Exhibit 4.1 of the Company’s Report on Form 8-K, No. 333-02302, dated February 5, 2009)		*

4.4	Amendment No. 2 to Credit Agreement, dated November 13, 2009 by and among ACC, certain of its subsidiaries, certain financial institutions, and Bank of America, N.A., as the Administrative Agent, and Deutsche Bank Securities Inc., as the Syndication Agent. (Incorporated by reference to Exhibit 4.6 of the Company’s Report on Form 10-K, No. 333-02302, dated December 18, 2009)		*

4.5	Amendment No. 3 to Credit Agreement and Amendment No. 2 to Collateral Assignment dated as of April 29, 2010 among ACC, its subsidiaries, the banks, financial institutions and other institutional lenders, Bank of America, N.A., as Administrative Agent, and Deutsche Bank Securities Inc., as Syndication Agent. (Incorporated by reference to Exhibit 4.1 of the Company’s Report on Form 8-K, No. 333-02302, dated May 3, 2010)		*

A-1


Exhibit No.	Description of Exhibit	Page No.

4.6	Amendment No. 4 to Credit Agreement and Confirmation of Guarantee Agreement and Security Documents dated as of April 30, 2012 among ACC, its subsidiaries, the banks, financial institutions and other institutional lenders, Bank of America, N.A., as Administrative Agent, and Deutsche Bank Securities Inc., as Syndication Agent. (Incorporated by reference to Exhibit 4.1 of the Company’s Report on Form 8-K, No. 333-02302, dated May 3, 2012)		*

4.7	Security Agreement dated as of April 29, 2010 made by ACC and its subsidiaries to Bank of America, N.A., as Agent. (Incorporated by reference to Exhibit 4.2 of the Company’s Report on Form 8-K, No. 333-02302, dated May 3, 2010)		*

4.8	Intellectual Property Security Agreement dated April 29, 2010 made by ACC and its subsidiaries to Bank of America, N.A., as Agent. (Incorporated by reference to Exhibit 4.3 of the Company’s Report on Form 8-K, No. 333-02302, dated May 3, 2010)		*

10.1	Purchase Agreement dated April 22, 2010 by and among ACC, Deutsche Bank Securities Inc. and Banc of America Securities LLC as representatives for the initial purchasers. (Incorporated by reference to Exhibit 10.1 of the Company’s Report on Form 8-K, No. 333-02302, dated April 27, 2010)		*

10.2	Registration Rights Agreement dated as of April 30, 2010 among ACC, Deutsche Bank Securities Inc. and Banc of America Securities LLC. (Incorporated by reference to Exhibit 10.1 of the Company’s Report on Form 8-K, No. 333-02302, dated May 3, 2010)		*

10.3	Primary Television Affiliation Agreement (WSET, Incorporated) (with a schedule attached for other stations’ substantially identical affiliation agreements). (Incorporated by reference to Exhibit 10.1 of the Company’s Report on Form 8-K, No. 333-02302, dated September 14, 2012)**		*

10.4	Tax Sharing Agreement effective as of September 30, 1991 by and among Perpetual Corporation, ACC and ALLNEWSCO, Inc., amended as of October 29, 1993. (Incorporated by reference to Exhibit 10.11 of Company’s Registration Statement on Form S-4, No. 333-02302, dated March 12, 1996)		*

10.5	Second Amendment to Tax Sharing Agreement effective as of October 1, 1995 by and among Perpetual Corporation, ACC and ALLNEWSCO, Inc. (Incorporated by reference to Exhibit 10.9 of the Company’s Form 10-K, No. 333-02302, dated December 22, 1998)		*

A-2


Exhibit No.	Description of Exhibit	Page No.

10.6	Pledge Agreement dated as of August 23, 2005 by and among ACC, Allbritton Group, Inc., Allfinco, Inc., and Bank of America, N.A., as Agent. (Incorporated by reference to Exhibit 10.1 of the Company’s Report on Form 8-K, No. 333-02302, dated August 23, 2005)		*

10.7	Unlimited Guaranty dated as of August 23, 2005 by each of the subsidiaries of ACC in favor of Bank of America, N.A., as Administrative Agent. (Incorporated by reference to Exhibit 10.2 of the Company’s Report on Form 8-K, No. 333-02302, dated August 23, 2005)		*

10.8	Collateral Assignment of Proceeds and Security Agreement dated as of August 23, 2005 by and among certain subsidiaries of ACC and Bank of America, N.A., as Agent. (Incorporated by reference to Exhibit 10.3 of the Company’s Report on Form 8-K, No. 333-02302, dated August 23, 2005)		*

14.1	Code of Ethics for Senior Financial Officers. (Incorporated by reference to Exhibit 14 of the Company’s Form 10-K, No. 333-02302, dated December 12, 2003)		*

21.1	Subsidiaries of Registrant.

24.1	Powers of Attorney.

31.1	Certification of Chairman and Chief Executive Officer pursuant to Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.

31.2	Certification of Senior Vice President and Chief Financial Officer pursuant to Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.

101.1	Interactive Data File

*	Previously filed

**	Portions have been omitted pursuant to confidential treatment

A-3

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

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