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LIN TV Corp. Executes First Of Two Transactions To Resolve NBC JV Overhangs

PRO FORMA FINANCIAL INFORMATION

The unaudited pro forma Condensed Consolidated Balance Sheet of LIN TV Corp. is presented as if the Comcast / GE Transaction and the LLC Conversion had occurred on September 30, 2012. The unaudited pro forma Condensed Consolidated Statement of Operations is presented as if the Comcast / GE Transaction and the LLC Conversion had occurred on January 1, 2012. The historical Condensed Consolidated Balance Sheet and Condensed Consolidated Statement of Operations information has been adjusted to give pro forma effect to events that are (i) directly attributable to the Comcast / GE Transaction and the LLC Conversion, and (ii) factually supportable. The notes to the unaudited pro forma Condensed Consolidated Balance Sheet and Condensed Consolidated Statement of Operations describe the pro forma amounts and adjustments presented below.

The unaudited pro forma Condensed Consolidated Balance Sheet and Condensed Consolidated Statement of Operations is not necessarily indicative of the actual results of the Comcast / GE Transaction and the LLC Conversion. The unaudited pro forma Condensed Consolidated Balance Sheet and Condensed Consolidated Statement of Operations does not give effect to the potential impact of current financial conditions, market conditions, regulatory matters or any anticipated approvals associated with the transactions.

The unaudited pro forma Condensed Consolidated Balance Sheet and Condensed Consolidated Statement of Operations presented below is for illustrative purposes only and is not intended to nor does it include the necessary requirements under the Securities and Exchange Commission Article 11 of Regulation S-X.
     
 
LIN TV Corp.
Unaudited Pro Forma Condensed Consolidated Balance Sheet
as of September 30, 2012
 
 
(dollars in millions) LIN TV Corp. Historical

Comcast / GE Transaction (Transaction 1)

Pro Forma Transaction 1 Only

LLC Conversion (Transaction 2)

LIN TV Corp. Pro Forma (Transactions 1 & 2)
 
Cash and cash equivalents $ 32.8 $ (14.7 ) a $ 18.1 $ (6.0 ) e $ 12.1
Deferred long-term income taxes - 20.2 f 20.2
All Other   831.6     1.0     832.6       832.6  
Total assets $ 864.4   $ (13.7 ) $ 850.7   $ 14.2   $ 865.0  
 
Accrued expenses $ 52.7 $ (6.0 ) b $ 46.7 $ 46.7
Income taxes payable - 164.4 c 164.4 $ (164.4 ) f -
Other   24.3       24.3       24.3  
Current liabilities   77.0     158.4     235.4     (164.4 )   71.0  
Long-term debt 573.4 86.3 d 659.7 - 659.7
Deferred income taxes 199.6 (170.0 ) c 29.7 (29.7 ) f -
Other   49.4       49.4       49.4  
Total liabilities   899.4     74.7     974.1     (194.0 )   780.1  
 
Redeemable noncontrolling interest 3.3 3.3 3.3
 
Accumulated deficit (1,106.3 ) (88.4 ) (1,194.8 ) 208.3 f (986.5 )
Other   1,068.1       1,068.1       1,068.1  
Stockholders' deficit   (38.3 )   (88.4 )   (126.7 )   208.3     81.6  

Total liabilities, redeemablenoncontrolling interest and deficit
$ 864.4   $ (13.7 ) $ 850.7   $ 14.2   $ 865.0  
 
a Assumed use of cash on hand to fund a portion of the $100 million capital contribution to the NBC JV.
b Reversal of the pre-existing accrued NBC JV shortfall funding obligation as a result of LIN being released from its guarantee of the GECC Note.
c Recognition of a $164 million current income taxes payable related to recognized capital gains that are unsheltered "prior to" the completion of the LLC Conversion. The pro forma unsheltered gain as of September 30, 2012 is reduced in part by LIN's existing NOLs at December 31, 2012.
d Issuance of long term debt to fund a portion of the $100 million NBC JV capital contribution and the related financing fees:

i.    $60.0 million incremental term loan.

ii.   $26.3 million draw against existing revolving credit facility.
e Assumed transaction related fees and expenses.
f Reflects an assumed $573.2 million capital loss for tax purposes, generated in Transaction 2, resulting in a $212.1 million tax benefit. The benefit from the carryback of these losses is assumed to fully offset the current income taxes payable that resulted from the otherwise unsheltered capital gains at the conclusion of transaction 1 and allows for the re-establishment of $47.7 million of net deferred tax assets related to NOLs that were previously assumed to be utilized. This pro forma assumes that LIN's stock price at the closing of the LLC Conversion is less than or equal to approximately $10.75 per share. At closing prices greater than this amount up to approximately $12.20 per share, LIN will need to consume its remaining NOLs to offset the recognized capital gains and at a closing price above approximately $12.20 per share, LIN would begin to incur cash taxes to satisfy the federal and state income tax liability related to the unsheltered portion of the recognized capital gains.
     
 
LIN TV Corp.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
Nine Months Ended September 30, 2012
 
 
(dollars in millions)

LIN TV Corp. Historical

Comcast / GE Transaction (Transaction 1)

Pro Forma Transaction 1 Only

LLC Conversion (Transaction 2)

LIN TV Corp. Pro Forma (Transactions 1 & 2)
 
Net revenues $ 357.3   $ 357.3     $ 357.3  
Operating income $ 99.8 $ 99.8 $ 99.8
Other expense (income)
Interest expense, net 28.9 2.6 a 31.5 31.5
Share of loss in equity investment 4.3 94.0 b 98.3 98.3
All other expense, net   2.3     2.3     6.0   d   8.3  
Total other expense (income), net 35.5 96.6 132.1 6.0 138.1
 
Income before (benefit from)          
provision for income taxes 64.3 (96.6 ) (32.3 ) (6.0 ) (38.3 )
(Benefit from) provision for income taxes   24.1   (6.5 ) c   17.6     (214.3 ) e   (196.7 )
Income from continuing operations 40.2 (90.0 ) (49.9 ) 208.3 158.4
Discontinued operations and noncontrolling
interests   10.9     10.9       10.9  
Net income attributable to LIN TV Corp. $ 51.0 $ (90.0 ) $ (39.0 ) $ 208.3   $ 169.3  
     
a Additional interest expense related to the $60 million incremental term loan and $26.3 million revolving credit facility draw, at 4% and 3.25% interest, respectively.
b Reflects the recognition of:
i. $100 million charge related to capital contribution to the NBC JV in settlement of the GECC Note guarantee obligation.
ii. $6 million benefit on the reversal of accrued NBC JV shortfall funding obligation.
c Reflects the recognition of:
i. $34.0 million income tax benefit associated with the $94 million net charge recognized within share of loss on equity investment.
ii. $28.4 million income tax expense associated with the recognition of incremental capital gain in excess of amounts previously recognized within deferred income tax liabilities attributable to Transaction 1.
iii $0.9 million of income tax benefit resulting from incremental interest expense.
d Assumed transaction related fees and expenses of $6 million.
e Reflects the recognition of:
i. $573.2 million assumed capital loss for tax purposes, and $212.1 million of related tax benefits resulting from Transaction 2.
ii. $2.2 million of income tax benefit related to estimated transaction fees and expenses.

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