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

Washington, D.C. 20549

Form 10-Q

(Mark one) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

~~[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934~~ For the quarterly period ended ~~September~~June 30, ~~2002~~2003.

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 ~~For the transition period from ______ to_______.~~

For the transition period from ____________to____________.

Commission File Number 333-96619

Block Communications, Inc. ~~(Exact name of registrant as specified in its charter)~~

	Ohio		34-4374555
	(State or other jurisdiction of		(I.R.S. Employer
	incorporation or organization)		Identification Number)

(Exact name of registrant as specified in its charter)

~~541~~Ohio N.(State ~~Superior~~or ~~Street,~~other ~~Toledo,~~jurisdiction ~~Ohio 43660 (Address~~ of ~~principal~~incorporation ~~executive~~or ~~offices~~organization)~~(Zip~~ ~~code) (419) 724~~34-~~6257~~4374555 (~~Registrant’s telephone number, including area code) 541 N~~I. ~~Superior Street, P~~R.OS. ~~Box~~Employer ~~921,~~Identification ~~Toledo, Ohio 43697-0921 (Former name, former address and former fiscal year,if changed since last report~~Number)

~~Indicate~~541 byN. ~~check~~Superior mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for shorter periods that the registrant was required to file such reports)Street, ~~and (2) has been subject to such filing requirements for past 90 days. YES~~Toledo, Ohio ~~[ ] NO [X]~~43660

(Address of principal executive offices)
(Zip code)

(419) 724-6257

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year,
if changed since last report)

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

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). YES[ ] NO [X]

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practical date.

	Voting Common Stock, (par value $.10)		Non-voting Common Stock, (par value $.10)
Voting Common Stock , (par value $.10)		Non-voting Common Stock, (par value $.10)
	29,400 shares as of November 13, 2002		427,786 shares as of November 13, 2002
29,400 shares as of August 5, 2003		428,613 shares as of August 5, 2003

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
	Financial Statements
	Item 1. Financial Statements
		Condensed Consolidated Balance Sheets
		Condensed Consolidated Statement of Income (unaudited)
		Condensed Consolidated Statements of Income
		Condensed Consolidated Statement of Stockholders’ Equity (unaudited)
		Condensed Consolidated Statement of Stockholders’ Equity
		Condensed Consolidated Statements of Cash Flows (unaudited)
		Condensed Consolidated Statements of Cash Flows
		NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
	NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
	Management’s Discussion and Analysis of Financial Position and Results of Operations
	Item 4. Controls and procedures
PART II. OTHER INFORMATION
	Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
Signature
Certification of the Managing Director
Exhibit 31.1
Certification of the Chief Financial Officer
Exhibit 31.2
Amendment 1 to Credit Agreement
Exhibit 32.1
Certification
Exhibit 32.2
Certification

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION Item 1. Financial Statements CONDENSED CONSOLIDATED BALANCE SHEETS CONDENSED CONSOLIDATED STATEMENTS OF INCOME CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Management’s Discussion and Analysis of Financial Condition and Results of Operations Item 4. Controls and procedures PART II. OTHER INFORMATION Item 6. Exhibits and reports on Form 8-K SIGNATURES Certification of the Managing Director Certification of the Chief Financial Officer

PART I. FINANCIAL INFORMATION Item 1. Financial Statements

Block Communications, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

		September 30			December 31
			June 30				December 31
		2002			2001
			2003				2002
		~~(unaudited)~~	(unaudited)		~~(note 1)~~		(note 1)
Assets
Current assets:
~~Cash and cash equivalents~~	Cash and cash equivalents	$	~~13,639,504~~$	14,387,557	$	~~5,882,732~~	$	9,781,645
Receivables, less allowances for doubtful accounts and discounts of $4,327,416 and $4,861,094, respectively			39,044,573			45,892,946
	Receivables, less allowances for doubtful accounts and discounts of $3,853,000 and $3,552,000, respectively			42,207,594				45,454,639
~~Recoverable income taxes~~	Recoverable income taxes		~~8,546,646~~	7,831,271		~~4,483,300~~		9,029,371
~~Inventories~~	Inventories		~~7,275,714~~	6,642,422		~~5,548,784~~		7,032,626
~~Prepaid expenses~~	Prepaid expenses		~~2,024,643~~	3,419,571		~~3,703,756~~		4,498,401
~~Broadcast rights~~	Broadcast rights		~~6,861,966~~	6,173,901		~~6,083,782~~		6,546,678
~~Deferred income taxes~~	Deferred income taxes		~~6,657,225~~	9,671,950		~~9,803,800~~		9,271,000
Total current assets			~~84,050,271~~	90,334,266		~~81,399,100~~		91,614,360
Property, plant and equipment:
~~Land and land improvements~~	Land and land improvements		~~12,208,365~~	12,402,357		~~12,194,446~~		12,255,696
~~Buildings and leasehold improvements~~	Buildings and leasehold improvements		~~41,483,269~~	42,945,696		~~41,186,933~~		41,483,466
~~Machinery and equipment~~	Machinery and equipment		~~212,182,037~~	220,681,636		~~209,196,143~~		215,180,502
~~Cable television distribution systems and equipment~~	Cable television distribution systems and equipment		~~188,187,544~~	202,304,194		~~187,804,505~~		195,399,291
~~Security alarm and video systems installation costs~~	Security alarm and video systems installation costs		~~6,427,522~~	6,872,480		~~5,923,280~~		6,591,940
~~Construction in progress~~	Construction in progress		~~16,240,442~~	27,023,144		~~11,495,916~~		13,777,267
			476,729,179			467,801,223
				512,229,507				484,688,162
~~Less allowances for depreciation and amortization~~	Less allowances for depreciation and amortization		~~227,005,281~~	264,485,911		~~204,605,517~~		235,410,950
			249,723,898			263,195,706
				247,743,596				249,277,212
Other assets:
~~Goodwill~~	Goodwill		~~53,656,362~~	51,987,021		~~52,461,687~~		51,987,021
~~Other intangibles, net of accumulated amortization~~	Other intangibles, net of accumulated amortization		~~38,384,439~~	38,700,147		~~31,451,414~~		39,471,513
Deferred income taxes			9,668,567			12,946,900
	Cash value of life insurance			26,332,857				25,594,543
Prepaid pension costs			12,783,347			11,145,446
	Deferred income taxes			18,856,209				16,659,000
Cash value of life insurance, net of policy loans of $0 and $12,735,560, respectively			25,076,312			10,691,105
	Pension intangibles			11,931,764				11,931,764
Pension intangibles			7,230,030			7,230,030
	Prepaid pension costs			2,460,151				2,437,798
Broadcast rights, less current portion			7,656,104			6,217,880
	Deferred financing costs			11,116,177				12,099,099
Deferred financing costs			12,590,560			5,676,725
	Broadcast rights, less current portion			3,667,732				6,676,317
~~Other~~	Other		~~2,921,804~~	5,223,576		~~3,138,246~~		3,976,050
			169,967,525			140,959,433
				170,275,634				170,833,105
		$	~~503,741,694~~$	508,353,496	$	~~485,554,239~~	$	511,724,677

PART I. FINANCIAL INFORMATION Item 1. Financial Statements

		September 302002				December 312001
				June 30				December 31
		(unaudited)				(note 1)
				2003				2002
Liabilities and stockholders’ equity
				(unaudited)				(note 1)
Current liabilities:
Liabilities and stockholders’ equity
Accounts payable		$	11,529,060			$	12,355,122
Current liabilities:
Salaries, wages and payroll taxes			15,691,972				16,321,468
	Accounts payable			$	8,768,974			$	13,831,059
Workers’ compensation and medical reserves			8,588,765				9,184,074
	Salaries, wages and payroll taxes				14,916,705				19,046,005
Other accrued liabilities			35,935,444				33,946,679
	Workers’ compensation and medical reserves				8,206,927				8,863,918
Current maturities of long-term debt			1,045,200				9,908,334
	Other accrued liabilities				34,878,298				32,846,215
Total current liabilities			72,790,441				81,715,677
	Current maturities of long-term debt				1,092,751				4,649,871
Long-term debt, less current maturities			260,361,550				227,355,513
Total current liabilities					67,863,655				79,237,068
Other long-term obligations			118,171,686				126,635,551
Long-term debt, less current maturities					268,702,558				255,786,939
Minority interest			12,486,453				12,264,398
Other long-term obligations					144,150,412				144,113,551
Stockholders’ equity:
Minority interest					11,916,681				11,941,238
5% Non-cumulative, non-voting Class A Stock, par value $100 a share (entitled in liquidation to $100 per share in priority over Common Stock)--15,680 shares authorized; 12,620 shares issued and outstanding			1,262,000				1,262,000
Stockholders’ equity:
Common Stock, par value $.10 a share:
	5% Non-cumulative, non-voting Class A Stock, par value $100 a share (entitled in liquidation to $100 per share in priority over Common Stock)— 15,680 shares authorized; 12,620 shares issued and outstanding				1,262,000				1,262,000
Voting Common Stock--29,400 shares authorized, issued and outstanding			2,940				2,940
	Common Stock, par value $.10 a share:
Non-voting Common Stock--588,000 shares authorized; 427,786 shares issued and outstanding			42,779				42,779
		Voting Common Stock—29,400 shares authorized, issued and outstanding			2,940				2,940
Accumulated other comprehensive loss			(4,386,486	)			(4,725,589	)
		Non-voting Common Stock—588,000 shares authorized; 428,613 and 427,786 shares issued and outstanding			42,861				42,779
Additional paid-in capital			771,274				771,274
	Accumulated other comprehensive loss				(22,633,965	)			(22,860,033	)
Retained earnings			42,239,057				40,229,696
	Additional paid-in capital				1,058,687				771,274
			39,931,564				37,583,100
	Retained earnings				35,987,667				41,426,921
		$	503,741,694			$	485,554,239
					15,720,190				20,645,881
				$	508,353,496			$	511,724,677

See accompanying notes.

PART I. FINANCIAL ~~INFORMATIONFinancial~~INFORMATION Item 1. Financial Statements

Block Communications, Inc. and Subsidiaries

Condensed Consolidated Statements of Income (unaudited)

	~~Three months ended~~		Three months ended						~~Nine months ended~~		Six months ended
	September 30								September 30
			June 30								June 30
		2002				2001				2002				2001
			2003				2002				2003				2002
Revenue:
~~Publishing~~	$Publishing	~~62,100,899~~	$	64,172,610	$	~~65,896,144~~	$	64,646,626	$	~~188,310,327~~	$	123,637,832	$	~~195,610,215~~	$	126,209,428
~~Cable~~	Cable	~~25,204,115~~		27,355,527		~~22,567,781~~		25,240,422		~~75,541,372~~		54,264,104		~~65,952,776~~		50,337,257
~~Broadcasting~~	Broadcasting	~~9,439,506~~		10,214,156		~~8,083,412~~		9,686,810		~~28,126,969~~		19,282,387		~~25,676,117~~		18,687,463
~~Other Communications~~	Other Communications	~~6,634,754~~		6,061,378		~~5,310,748~~		6,488,681		~~19,639,946~~		11,960,358		~~16,840,764~~		12,718,010
		103,379,274				101,858,085				311,618,614				304,079,872
				107,803,671				106,062,539				209,144,681				207,952,158
Expense:
~~Publishing~~	Publishing	~~60,888,697~~		62,313,037		~~66,160,637~~		61,227,791		~~183,635,801~~		123,097,037		~~196,943,958~~		122,747,104
~~Cable~~	Cable	~~22,425,860~~		24,542,132		~~19,147,290~~		22,392,149		~~67,631,965~~		49,231,426		~~56,232,854~~		45,206,105
~~Broadcasting~~	Broadcasting	~~8,589,109~~		8,936,736		~~8,898,327~~		8,954,146		~~26,598,294~~		18,281,762		~~27,499,396~~		18,009,185
~~Other Communications~~	Other Communications	~~6,193,733~~		5,474,888		~~6,538,829~~		5,899,585		~~19,073,047~~		10,714,397		~~20,075,914~~		11,848,884
~~Corporate general and administrative~~	Corporate general and administrative	~~1,512,473~~		757,363		~~96,965~~		505,795		~~2,969,548~~		1,836,819		~~1,047,224~~		1,457,075
		99,609,872				100,842,048				299,908,655				301,799,346
				102,024,156				98,979,466				203,161,441				199,268,353
Operating income		~~3,769,402~~		5,779,515		~~1,016,037~~		7,083,073		~~11,709,959~~		5,983,240		~~2,280,526~~		8,683,805
Nonoperating income (expense):
~~Interest expense~~	Interest expense	~~(6,037,895~~	)	(5,273,158	)	~~(4,757,348~~	)	(5,894,078	)	~~(16,680,122~~	)	(10,220,530	)	~~(14,179,801~~	)	(10,642,227	)
Gain (loss) on disposition of Monroe Cablevision		(459,360	)			—				21,140,829				—
	Gain on disposition of Monroe Cablevision			—				—				—				21,600,189
Loss on early extinguishment of debt		—				—				(8,989,786	)			—
	Change in fair value of interest rate swaps			(1,402,215	)			(1,183,769	)			(2,230,337	)			278,057
Change in fair value of interest rate swaps		(2,472,043	)			(5,296,326	)			(2,193,986	)			(6,201,349	)
	Loss on extinguishment of debt			—				(8,989,786	)			—				(8,989,786	)
~~Interest income~~	Interest income	~~115,573~~		69,556		~~35,639~~		22,116		~~146,520~~		99,760		~~64,221~~		30,947
		(8,853,725	)			(10,018,035	)			(6,576,545	)			(20,316,929	)
				(6,605,817	)			(16,045,517	)			(12,351,107	)			2,277,180
Income (loss) before income taxes and minority interest		(5,084,323	)			(9,001,998	)			5,133,414				(18,036,403	)
Income (loss) from continuing operations before income taxes and minority interest				(826,302	)			(8,962,444	)			(6,367,867	)			10,960,985
Provision (credit) for income taxes		~~(1,846,026~~	)	(159,788	)	~~(2,497,162~~	)	(2,471,245	)	~~2,230,387~~		(1,551,035	)	~~(5,093,461~~	)	4,381,145
Income (loss) before minority interest		(3,238,297	)			(6,504,836	)			2,903,027				(12,942,942	)
Income (loss) from continuing operations before minority interest				(666,514	)			(6,491,199	)			(4,816,832	)			6,579,840
Minority interest		~~(134,934~~	)	(15,154	)	~~145,339~~		(79,947	)	~~(222,055~~	)	24,557		~~185,777~~		(87,121	)
Net income (loss)	$	(3,373,231	)		$	(6,359,497	)		$	2,680,972			$	(12,757,165	)
Income (loss) from continuing operations				(681,668	)			(6,571,146	)			(4,792,275	)			6,492,719
Loss from discontinued operations (including loss on disposal of $235,591 in 2003)				(328,367	)			(572,225	)			(445,658	)			(743,248	)
Income tax benefit				(111,645	)			(244,874	)			(151,524	)			(304,732	)
Loss on discontinued operations				(216,722	)			(327,351	)			(294,134	)			(438,516	)
Net income (loss)			$	(898,390	)		$	(6,898,497	)		$	(5,086,409	)		$	6,054,203

See accompanying notes.

PART I. FINANCIAL ~~INFORMATIONFinancial~~INFORMATION Item 1. Financial Statements

Block Communications, Inc. and Subsidiaries

Condensed Consolidated Statement of Stockholders’ Equity (unaudited)

						~~Common Stock~~		Common Stock
															Accumulated
				Class A Stock				Voting				Non-Voting
	Class A Stock					Voting				Non-Voting					Other			Additional
				Shares		Amount		Shares		Amount		Shares			Amount
															Comprehensive			Paid-in		Retained
Balances at January 1, 2003					12,620	$	1,262,000		29,400	$	2,940		427,786		$	42,779
	Shares			Amount		Shares		Amount		Shares		Amount			Loss			Capital		Earnings			Total
	Net loss
Balances at January 1, 2002		12,620		$	1,262,000		29,400	$	2,940		427,786	$	42,779		$	(4,725,589	)	$	771,274	$	40,229,696		$	37,583,100
	Amortization of fair value of interest rate swaps at January 1, 2001 (net of deferred tax of $127,500)
Net income																					2,680,972			2,680,972
	Total comprehensive loss
Amortization of fair value of interest rate swaps at January 1, 2001 (net of deferred tax of $190,875)																339,103								339,103
	Cash dividends declared:
Total comprehensive income																								3,020,075
		Class A stock—$2.50 per share
Cash dividends declared:
		Common Stock:
Class A stock--$2.50 per share																					(31,550	)		(31,550	)
			Voting—$0.70 per share
Common Stock:
			Non-voting—$0.70 per share
Voting--$1.40 per share																					(41,160	)		(41,160	)
	Executive stock incentives at $407.97 per share												1,808			180
Non-voting--$1.40 per share																					(598,901	)		(598,901	)
	Redemption of non-voting common shares at $458.50 per share												(981	)		(98	)
																					(671,611	)		(671,611	)
Balances at June 30, 2003					12,620	$	1,262,000		29,400	$	2,940		428,613		$	42,861
Balances at September 30, 2002		12,620		$	1,262,000		29,400	$	2,940		427,786	$	42,779		$	(4,386,486	)	$	771,274	$	42,239,057		$	39,931,564
Balances at January 1, 2002					12,620	$	1,262,000		29,400	$	2,940		427,786		$	42,779
Balances at January 1, 2001		12,620		$	1,262,000		29,400	$	2,940		430,123	$	43,012		$	(521,942	)	$	771,274	$	59,832,216		$	61,389,500
	Net income
Net loss																					(12,757,165	)		(12,757,165	)
	Amortization of fair value of interest rate swaps at January 1, 2001 (net of deferred tax of $127,500)
Fair value of interest rate swaps at January 1, 2001, less accumulated amortization of $529,978 (net of deferred tax of $567,125)																(1,009,020	)							(1,009,020	)
	Total comprehensive income
Total comprehensive loss																								(13,766,185	)
	Cash dividends declared:
Cash dividends declared:
		Class A stock—$2.50 per share
Class A stock--$2.50 per share																					(31,550	)		(31,550	)
		Common Stock:
Common Stock:
			Voting—$0.70 per share
Voting--$1.20 per share																					(35,280	)		(35,280	)
			Non-voting—$0.70 per share
Non-voting--$1.20 per share																					(516,146	)		(516,146	)
Balances at June 30, 2002					12,620	$	1,262,000		29,400	$	2,940		427,786		$	42,779
																					(582,976	)		(582,976	)
Balances at September 30, 2001		12,620		$	1,262,000		29,400	$	2,940		430,123	$	43,012		$	(1,530,962	)	$	771,274	$	46,492,075		$	47,040,339

[Additional columns below]

[Continued from above table, first column(s) repeated]


				Accumulated
				Other			Additional
				Comprehensive			Paid-in			Retained
				Loss			Capital			Earnings			Total

Balances at January 1, 2003				$	(22,860,033	)	$	771,274		$	41,426,921		$	20,645,881
	Net loss										(5,086,409	)		(5,086,409	)
	Amortization of fair value of interest rate swaps at January 1, 2001 (net of deferred tax of $127,500)				226,068									226,068

	Total comprehensive loss													(4,860,341	)
	Cash dividends declared:
		Class A stock—$2.50 per share									(31,550	)		(31,550	)
		Common Stock:
			Voting—$0.70 per share								(20,580	)		(20,580	)
			Non-voting—$0.70 per share								(300,715	)		(300,715	)

											(352,845	)		(352,845	)
	Executive stock incentives at $407.97 per share							737,103						737,283
	Redemption of non-voting common shares at $458.50 per share							(449,690	)					(449,788	)

Balances at June 30, 2003				$	(22,633,965	)	$	1,058,687		$	35,987,667		$	15,720,190

Balances at January 1, 2002				$	(4,725,589	)	$	771,274		$	40,229,696		$	37,583,100
	Net income										6,054,203			6,054,203
	Amortization of fair value of interest rate swaps at January 1, 2001 (net of deferred tax of $127,500)				226,069									226,069

	Total comprehensive income													6,280,272
	Cash dividends declared:
		Class A stock—$2.50 per share									(31,550	)		(31,550	)
		Common Stock:
			Voting—$0.70 per share								(20,580	)		(20,580	)
			Non-voting—$0.70 per share								(299,451	)		(299,451	)

											(351,581	)		(351,581	)

Balances at June 30, 2002				$	(4,499,520	)	$	771,274		$	45,932,318		$	43,511,791

See accompanying notes.

PART I. FINANCIAL ~~INFORMATIONFinancial~~INFORMATION Item 1. Financial Statements

Block Communications, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (unaudited)

	Nine months ended September 30
				Six months ended
	2002				2001
				June 30
Operating activities
				2003				2002
Net income (loss)	$	2,680,972			$	(12,757,165	)
Operating activities
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Net income (loss)				$	(5,086,409	)		$	6,054,203
Depreciation		33,737,180				29,800,233
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Amortization of intangibles and deferred charges		1,919,494				2,906,096
	Depreciation				24,885,786				22,277,829
Amortization of broadcast rights		4,977,936				4,628,984
	Amortization of intangibles and deferred charges				1,540,536				1,293,452
Payments for broadcast rights		(4,121,864	)			(4,044,622	)
	Amortization of broadcast rights				3,395,873				3,322,689
Gain on sale of Monroe Cablevision		(21,140,829	)			—
	Payments for broadcast rights				(3,397,766	)			(2,531,544	)
Deferred income taxes (credit)		3,500,000				(2,808,976	)
	Gain on sale of Monroe Cablevision				—				(21,600,189	)
Provision for bad debts		1,033,655				1,975,416
	Loss on disposal of discontinued operation				235,591				—
Minority interest		222,055				(185,777	)
	Deferred income taxes (credit)				(2,725,409	)			3,500,000
Change in fair value of interest rate swaps		2,193,986				6,201,349
	Provision for bad debts				549,051				986,654
Gain on disposal of property and equipment		(571,220	)			(18,358	)
	Minority interest				(24,557	)			87,121
Write off of deferred charges related to extinguished debt		2,697,784				—
	Change in fair value of interest rate swaps				2,230,337				(278,057	)
Changes in operating assets and liabilities:
	Loss on disposal of property and equipment				42,686				402,814
Receivables		4,116,003				4,151,186
	Write-off of deferred charges related to extinguished debt				—				2,697,784
Inventories		(1,769,368	)			4,234,345
	Changes in operating assets and liabilities:
Prepaid expenses		1,542,510				733,874
		Receivables			2,697,994				3,525,876
Accounts payable		(833,469	)			(9,734,302	)
		Inventories			375,268				1,108,986
Salaries, wages, payroll taxes and other accrued liabilities		594,136				(1,445,539	)
		Prepaid expenses			1,078,830				783,574
Other assets		(2,044,730	)			(4,595,559	)
		Accounts payable			(5,062,085	)			(1,325,934	)
Postretirement benefits and other long-term obligations		(2,454,918	)			3,214,320
		Salaries, wages, payroll taxes and other accrued liabilities			(4,378,720	)			(2,365,385	)
Net cash provided by operating activities		26,279,313				22,255,505
		Other assets			2,535,397				60,592
Investing activities
		Postretirement benefits and other long-term obligations			4,077,026				3,577,513
Additions to property, plant and equipment		(20,059,706	)			(52,009,257	)
Net cash provided by operating activities					22,969,429				21,577,978
Change in cash value of life insurance		(14,385,206	)			5,694,107
Investing activities
Payments for acquisitions		—				(1,390,000	)
Additions to property, plant and equipment					(23,478,139	)			(12,647,899	)
Proceeds from sale of Monroe Cablevision		12,059,115				—
Change in cash value of life insurance					(738,314	)			(459,201	)
Proceeds from disposal of property and equipment		890,386				24,111
Proceeds from sale of Monroe Cablevision					—				12,059,115
Net cash used in investing activities		(21,495,411	)			(47,681,039	)
Proceeds from disposal of property and equipment					28,013				40,617
Financing activities
Net cash used in investing activities					(24,188,440	)			(1,007,368	)
Issuance of subordinated notes		175,000,000				—
Financing activities
Borrowings under new term loan agreement		~~75,000,000~~			10,000,000	—			75,000,000
Payments on senior notes		(67,499,000	)			(11,000,000	)
Payments under new term loan agreement					(3,946,000	)			—
Payments on term loan		(75,187,500	)			—
Issuance of subordinated notes					—				175,000,000
Borrowings (payments) on long term revolver		(92,500,000	)			53,000,000
Payments on long-term revolver					—				(92,500,000	)
Net payments on short term revolver		—				(444,562	)
Payments on previous term loan					—				(75,000,000	)
Financing costs deferred		(10,768,413	)			—
Payments on senior notes					—				(67,499,000	)
Cash dividends paid		(671,611	)			(582,976	)
Financing costs deferred					—				(10,000,968	)
Payments on notes payable and capital leases		(400,606	)			(239,397	)
Proceeds from issuance of common stock					737,283				—
Net cash provided by financing activities		2,972,870				40,733,065
Payments on redemption of shares					(449,788	)			—
Increase in cash and cash equivalents		7,756,772				15,307,531
Cash dividends paid					(352,845	)			(351,581	)
Cash and cash equivalents at beginning of period		5,882,732				4,212,970
Payments on notes payable and capital leases					(163,727	)			(202,805	)
Cash and cash equivalents at end of period	$	13,639,504			$	19,520,501
Net cash provided by financing activities					5,824,923				4,445,646
Non-cash borrowings under capital lease	$	903,798			$	—
Increase in cash and cash equivalents					4,605,912				25,016,256
Cash and cash equivalents at beginning of period					9,781,645				5,882,732
Cash and cash equivalents at end of period				$	14,387,557			$	30,898,988
Non-cash borrowings for equipment under capital lease				$	—			$	903,798

See accompanying notes.

PART I. FINANCIAL INFORMATION Item 1. Financial Statements

BLOCK COMMUNICATIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 1 — BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements of Block Communications, Inc. (the Company) have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United ~~States~~ States for complete financial statements. In the opinion of management, all ~~adjustments~~ adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six ~~nine~~ month periods ended ~~September~~ June 30, ~~2002~~2003 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2002~~2003. For further information, refer to the December 31, ~~2001~~2002 audited consolidated financial statements and footnotes thereto.

The balance sheet at December 31, ~~2001~~2002 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. ~~Certain balances~~ ~~in the prior year have been reclassified to conform to the presentation adopted~~ ~~in the current period.~~

New Accounting Standards

~~Effective~~In ~~January~~June 1, 2001, ~~the Company adopted Statement of the Financial Accounting Standards (~~SFAS) No. ~~133~~ 143, Accounting for ~~Derivative~~Asset ~~Instruments~~Retirement ~~and~~Obligations, ~~Hedging~~was issued ~~Activities,~~and asis ~~amended~~effective byfor ~~Statement~~fiscal ~~Nos.~~ years ~~137~~beginning ~~and~~after ~~138~~June 15, ~~(collectively, SFAS No~~2002. ~~133),~~The pronouncement ~~which~~ requires ~~the~~legal ~~Company~~obligations toassociated ~~record~~ with ~~all~~the ~~derivatives~~retirement onof long-lived ~~the~~assets ~~balance~~to ~~sheet~~be recognized at their fair value. Atat ~~September~~the ~~30,~~time ~~2002,~~that the ~~Company~~ obligations ~~participates~~are inincurred. ~~nine~~Upon ~~interest-rate~~initial ~~swap~~recognition ~~contracts. One~~ of ~~these~~a ~~contracts~~liability, isthat ~~accounted~~cost should ~~for~~be capitalized as apart ~~fair~~of ~~value~~the ~~hedge~~related ~~and~~long-lived ~~therefore~~asset ~~changes~~and inallocated ~~the~~to expense ~~fair~~over ~~value of~~ the ~~derivative~~ estimated ~~have~~useful nolife ~~impact~~of on the ~~Company’s results of operations~~asset. The ~~remaining~~adoption ~~contracts~~of this standard ~~either~~on doJanuary 1, ~~not~~2003 ~~qualify~~has ~~for~~had ~~hedge~~no ~~accounting~~impact oron the Company’s ~~has not elected to implement~~financial position ~~hedge~~or ~~accounting.~~results ~~Accordingly, a non-cash derivative valuation loss~~ of ~~$2,194,000~~ operations ~~and~~for ~~$6,201,000 has been recognized during~~ the ~~nine-month~~six ~~periods~~months ended ~~September~~ June 30, ~~2002 and 2001, respectively~~2003.

~~Effective~~In ~~January~~July 1, 2002, ~~the Company adopted~~ SFAS No. ~~141~~ 146, ~~Business~~Accounting ~~Combinations,~~for ~~and~~Costs ~~SFAS~~Associated ~~No.~~with ~~142,~~Exit ~~Goodwill and Other~~or Disposal ~~Intangible~~Activities, ~~Assets.~~was ~~Purchased~~issued ~~goodwill~~ and ~~indefinite~~applies ~~lived~~to ~~intangible~~fiscal ~~assets~~ years ~~are~~beginning ~~no longer amortized but reviewed annually for impairment~~after December 31, or2002. ~~more~~SFAS ~~frequently~~ No. 146 ifrequires ~~impairment~~certain ~~indicators~~costs ~~arise.~~associated ~~Intangible assets~~ with ~~lives restricted by contractual,~~a restructuring, ~~legal~~discontinued operation or ~~other~~plant ~~means~~closing ~~will continue~~ to be ~~amortized~~recognized ~~over their useful lives. During~~as incurred ~~the~~rather ~~nine-month~~that ~~period~~at ~~ended September 30, 2001,~~ the ~~Company~~date ~~recognized $2,511,000~~ of ~~amortization~~commitment ~~expense related~~ to ~~goodwill~~an ~~and~~exit ~~indefinite-lived~~or ~~intangibles,~~disposal ~~resulting~~plan. The inadoption aof ~~net~~this ~~loss~~standard ofon ~~$10~~January 1,~~246,000~~ ~~when~~2003 ~~adjusted for the non-amortization provisions of SFAS No. 142. The Company~~ has ~~completed~~had ~~the~~no ~~initial~~material ~~impairment~~impact ~~testing required~~on the byCompany’s ~~SFAS~~financial ~~No.~~position ~~142.~~or Noresults ~~impairment~~of ~~charges~~operations ~~have~~for ~~been recognized based on~~ the ~~results~~six months ended ofJune 30, ~~this testing~~2003.

~~Effective~~In ~~January~~December 1, 2002, ~~the Company adopted~~ SFAS No. ~~144~~ 148, Accounting for ~~the Impairment or Disposal of Long~~Stock-~~Lived Assets, which~~Based Compensation—Transition ~~supersedes~~and ~~SFAS No. 121~~Disclosure, ~~Accounting~~was ~~for~~issued ~~the~~and ~~Impairment~~provides alternative methods of ~~Long-Lived~~transition ~~Assets and~~ for ~~Long-Lived~~a ~~Assets~~voluntary change to bethe ~~Disposed~~fair ~~Of,~~value ~~and~~based ~~provides~~method ~~a single~~ of accounting ~~model~~ for ~~long~~stock-~~lived~~based ~~assets~~employee ~~to be disposed of~~compensation. The ~~adoption~~Company ~~of this standard~~ has ~~had no~~previously adopted ~~effect on~~ the ~~Company’s~~fair ~~consolidated~~value ~~results~~method of ~~operations~~accounting orfor ~~financial~~stock-based ~~position~~employee compensation ~~for~~therefore ~~the~~all ~~nine~~years ~~months~~presented ~~ended~~reflect ~~September~~this ~~30,~~method ~~2002~~and no pro-forma disclosures are required.

In ~~April~~November 2002, ~~SFAS~~the ~~No.~~Financial ~~145,~~Accounting ~~Rescission~~ Standards ofBoard ~~FASB~~issued Interpretation ~~Statements~~ No. 4 45, ~~44,~~Guarantor’s Accounting and 64Disclosure Requirements for Guarantees, ~~Amendment~~Including Indirect Guarantees of ~~FASB~~Indebtedness ~~Statement~~of NoOthers. ~~13,~~This Interpretation ~~and~~significantly ~~Technical~~ changes ~~Corrections,~~previous ~~was~~practice ~~issued~~in ~~and~~the ~~requires~~accounting afor and ~~gain~~disclosure orof ~~loss~~guarantees. ~~related~~Guarantees tomeeting the ~~extinguishment~~characteristics described in ofthe ~~debt~~Interpretation toare norequired ~~longer~~to be initially recorded asat ~~extraordinary~~fair value, ~~item.~~which ~~The~~is ~~Company~~different ~~has~~from ~~elected~~the general current practice of recording a liability ~~early~~only ~~adoption~~when asa ~~encouraged~~loss byis ~~SFAS~~probable Noand can be reasonably estimated. ~~145,~~The Interpretation’s ~~which~~initial ~~would~~recognition ~~not~~and ~~otherwise~~initial ~~require~~measurement provisions are applicable ~~adoption~~on ~~until~~a ~~fiscal~~prospective ~~year~~basis ~~2003~~to guarantees issued or modified after December 31, 2002. AsThe Interpretation also requires a ~~result,~~guarantor ~~losses~~to onmake significant ~~extinguishment~~new ofdisclosures ~~debt~~for virtually all guarantees even if the likelihood of ~~totaling~~the $9guarantor having to make payments under the guarantee is remote.0 ~~million~~The Interpretation’s ~~are~~disclosure ~~included~~requirements were effective for financial statements beginning in ~~income~~2002. ~~from~~The ~~continuing~~Company ~~operations~~does atnot ~~September~~currently guarantee indebtedness ~~30,~~of ~~2002~~any party outside of the consolidated group. Please refer to Note 7 for disclosures relating to guarantees within the consolidated group.

PART I. FINANCIAL INFORMATION Item 1. Financial Statements

In ~~July~~January ~~2002~~2003, ~~SFAS~~the Financial Accounting Standards Board issued interpretation No. 46, ~~146~~Consolidation of Variable Interest Entities, ~~Accounting~~ an ~~for~~interpretation ~~Costs~~of Accounting ~~Associated~~Research ~~with~~Bulletin ~~Exit~~No. 51 or(FIN ~~Disposal~~46). ~~Activities,~~FIN ~~was~~46 ~~issued~~requires ~~and~~consolidation ~~applies~~of variable tointerest ~~fiscal~~entities ~~years~~in ~~beginning~~which ~~after~~an ~~December~~enterprise ~~31,~~absorbs ~~2002.~~a ~~The~~majority ~~pronouncement~~of ~~requires certain~~the entity’s ~~costs~~expected ~~associated~~losses, ~~with~~receives a ~~restructuring,~~majority ~~discontinued~~of ~~operation~~the orentity’s ~~plant~~expected ~~closing to~~residual returns, beor ~~recognized~~both, as ~~incurred~~a ~~rather~~result ~~than~~of atownership, contractual or other financial interest in the ~~date~~entity. ofCurrently, ~~commitment~~entities toare angenerally ~~exit~~consolidated orby ~~disposal~~an enterprise ~~plan.~~that ~~The~~has ~~Company~~a ~~does~~controlling ~~not~~financial ~~expect~~interest through ownership or a majority voting interest in the entity. The adoption of ~~this~~FIN ~~standard~~46 tohas ~~significantly~~ had no impact ~~its~~on the Company’s financial position or results of operations for the six months ended June 30, 2003.

NOTE 2—~~ACQUISITION~~DISCONTINUED OPERATIONS

As of May 31, 2003, the Company suspended operations of Community Communication Services, Inc. (CCS), an alternative advertising distribution company. In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, the results of operations of CCS are reported separately from results of continuing operations for all periods presented. The reported loss from discontinued operations includes revenues of $68,050 and $163,767 for the three months ended June 30, 2003 and 2002 respectively, and revenues of $151,258 and $287,182 for the six months ended June 30, 2003 and 2002, respectively. Results for the three- and six-month periods ended June 30, 2003 include a loss on disposal of the discontinued operations of $235,591. Previously, results of operations of CCS were included in the Other Communications segment.

NOTE 3—ACQUISITION

Effective March 29, 2002, the Company consummated an asset exchange agreement with Comcast Corporation which resulted in an exchange of 100% of the assets of Monroe Cablevision for 100% of the assets of Comcast’s Bedford, Michigan operations and $12.1 million cash. The Company recorded a $21.1 million gain on the disposition of Monroe Cablevision resulting from the difference in fair value versus the net book value of assets exchanged. For tax reporting, the transaction has been treated as a like kind exchange and the amount of the gain in excess of the cash received has been deferred. The operations of Monroe Cablevision are included in the Company’s financial statements through March 28, 2002.

The net assets of the acquired Bedford system have been recorded at their fair value and relate primarily to the cable distribution system and intangibles. The operations of the Bedford system have been included in the Company’s financial statements since March 29, 2002.

~~NOTE 3—LONG-TERM DEBT~~7

In April 2002, the Company issued $175 million of 9¼% senior subordinated notes, the proceeds of which where used to pay off the existing senior term loan and senior notes and a portion of the balance outstanding under the revolving credit agreement. The subordinated notes mature April 15, 2009. On May 15, 2002 the company refinanced the remainder of its senior credit facilities. The new senior credit facilities include a $40 million delayed draw term loan A, a $75 million term loan B, and an $85 million revolver. Term loan A matures May 2009, however the availability is reduced if required withdrawals are not made ($20 million by June 30, 2003 and $20 million by December 31, 2003). Term loan B matures November 2009. The term loan A and revolving credit agreements provide for scheduled reductions beginning September 2004, with a final maturity date of May 2009. Only the availability under term loan B was drawn at the date of the refinance.

In conjunction with the refinancing, the Company has recognized a second quarter loss of $9.0 million consisting of premiums paid to the existing noteholders and unamortized deferred financing costs relating to the refinanced debt. As noted above, this amount is included in income from continuing operations as the Company has elected early adoption of SFAS No. 145.

During 2002, the company has entered into several additional swap contracts related to the new debt and existing swaps. One of these is a cancelable swap that effectively converts a portion of the Company’s fixed rate subordinated notes to a variable rate based on LIBOR. This contract has been accounted for as a fair value hedge, resulting in the recognition of a swap asset with an offsetting adjustment to the carrying value of the underlying debt. The table below details the amounts recognized as long-term debt:

	September 30,		December 31,
	2002		2001
Subordinated notes	$	175,000,000	$	—
Senior term loan		74,812,500		75,000,000
Long-term revolver		—		92,500,000
Senior notes payable		—		67,499,000
Capital leases		2,768,039		2,264,847
Fair value adjustment of subordinated notes		8,826,211		—
		261,406,750		237,263,847
Current maturities		1,045,200		9,908,334
	$	260,361,550	$	227,355,513

PART I. FINANCIAL INFORMATION Item 1. Financial Statements

NOTE 4—~~OTHER~~ LONG-TERM ~~OBLIGATIONS~~DEBT

During the first six months of 2003, the Company made $3,946,000 in payments on the outstanding Term Loan B, as required under the May 2002 credit agreement. On June 30, 2003 the Company borrowed $10,000,000 on Term Loan A under the same credit agreement.

Long-term debt consists of the following:


	June 30,		December 31,
	2003		2002

Subordinated notes	$	175,000,000	$	175,000,000
Fair value adjustment of subordinated notes		11,126,941		7,658,715

Subordinated notes, as adjusted		186,126,941		182,658,715
Senior term loan		80,679,000		74,625,000
Capital leases		2,989,368		3,153,095

		269,795,309		260,436,810
Current maturities		1,092,751		4,649,871

	$	268,702,558	$	255,786,939

NOTE 5—OTHER LONG-TERM OBLIGATIONS

Other long-term obligations consist of the following:

		September 30,		December 31,
	June 30,			December 31,
		2002		2001
	2003			2002
Other postretirement benefits	$	8284,~~561~~811,~~437~~098	$	~~80,824,000~~$	83,365,000
Pension liabilities		1237,~~207~~904,~~341~~382		~~17,412,753~~	36,171,121
Deferred compensation obligations		1415,~~700~~512,~~021~~662		~~13,594,736~~	14,360,574
Interest rate swap liability		—		6,739,531
Broadcast rights payable		3,623,883			7,330,489
Broadcast rights payable		7,109,760		6,446,520
Other		2,298,387			2,886,367
Other		1,593,127		1,618,011
	$	144,150,412		$	144,113,551
	$	118,171,686	$	126,635,551

~~NOTE 5—BUSINESS SEGMENT INFORMATION~~8

The Company has three reportable segments—publishing, cable and broadcasting. The publishing segment operates two daily newspapers located in Ohio and Pennsylvania. The cable segment includes two cablevision companies located in Ohio. The broadcasting segment has five television stations located in Idaho, Illinois, Indiana, Kentucky, and Ohio. The “Other” category includes non-reportable segments and corporate items. The non-reportable segments provide services such as telephony, security systems and monitoring, cable plant construction and distributed advertising services. The following table presents certain financial information for the three reportable segments and the other category.

PART I. FINANCIAL INFORMATION Item 1. Financial Statements

NOTE 56 — BUSINESS SEGMENT INFORMATION ~~(continued)~~

	Three months ended						Nine months ended
	September 30						September 30
	2002			2001			2002			2001
Revenues:
Publishing	$	63,232,636		$	67,124,633		$	191,075,509		$	199,735,735
Intersegment		1,131,737			1,228,489			2,765,182			4,125,520
External Publishing		62,100,899			65,896,144			188,310,327			195,610,215
Cable		25,227,800			22,776,581			75,599,179			66,572,776
Intersegment		23,685			208,800			57,807			620,000
External Cable		25,204,115			22,567,781			75,541,372			65,952,776
Broadcasting		9,439,506			8,083,412			28,126,969			25,676,117
Other		6,634,754			5,310,748			19,639,946			16,840,764
		103,379,274			101,858,085			311,618,614			304,079,872
Operating income (loss):
Publishing		2,284,316			471,966			7,263,197			1,322,088
Intersegment		1,072,114			736,459			2,588,671			2,655,831
Net Publishing		1,212,202			(264,493	)		4,674,526			(1,333,743	)
Cable		1,665,492			2,493,395			5,202,338			6,833,919
Intersegment		(1,112,763	)		(927,096	)		(2,707,069	)		(2,886,003	)
Net Cable		2,778,255			3,420,491			7,909,407			9,719,922
Broadcasting		850,397			(814,915	)		1,528,675			(1,823,279	)
Corporate expenses		(1,512,473	)		(96,965	)		(2,969,548	)		(1,047,224	)
Other		441,021			(1,228,081	)		566,899			(3,235,150	)
		3,769,402			1,016,037			11,709,959			2,280,526
Nonoperating income (expense)		(8,853,725	)		(10,018,035	)		(6,576,545	)		(20,316,929	)
Income (loss) before income taxes and minority interest	$	(5,084,323	)	$	(9,001,998	)	$	5,133,414		$	(18,036,403	)

The Company has three reportable segments — publishing, cable and broadcasting. The publishing segment operates two daily newspapers located in Ohio and Pennsylvania. The cable segment includes two cablevision companies located in Ohio. The broadcasting segment has five television stations located in Idaho, Illinois, Indiana, Kentucky, and Ohio. The “Other” category includes non-reportable segments and corporate items. The non-reportable segments provide services such as telephony, security systems and monitoring, and cable plant construction. The following table presents certain financial information for the three reportable segments and the other category.

NOTE 6—SUPPLEMENTAL GUARANTOR INFORMATION


		Three months ended						Six months ended
		June 30						June 30

		2003			2002			2003			2002

Revenues:
	Publishing	$	65,094,199		$	65,589,540		$	125,419,258		$	127,842,873
	Intersegment		921,589			942,914			1,781,426			1,633,445

	External Publishing		64,172,610			64,646,626			123,637,832			126,209,428
	Cable		27,378,690			25,274,544			54,310,050			50,371,379
	Intersegment		23,163			34,122			45,946			34,122

	External Cable		27,355,527			25,240,422			54,264,104			50,337,257
	Broadcasting		10,214,156			9,686,810			19,282,387			18,687,463
	Other		6,061,378			6,488,681			11,960,358			12,718,010

			107,803,671			106,062,539			209,144,681			207,952,158
Operating income (loss):
	Publishing		2,721,342			4,288,528			2,204,722			4,978,881
	Intersegment		861,769			869,691			1,663,927			1,516,557

	Net Publishing		1,859,573			3,418,837			540,795			3,462,324
	Cable		1,933,741			1,935,356			3,299,591			3,536,846
	Intersegment		(879,654	)		(912,917	)		(1,733,087	)		(1,594,306	)

	Net Cable		2,813,395			2,848,273			5,032,678			5,131,152
	Broadcasting		1,277,420			732,664			1,000,625			678,278
	Corporate expenses		(757,363	)		(505,795	)		(1,836,819	)		(1,457,075	)
	Other		586,490			589,094			1,245,961			869,126

			5,779,515			7,083,073			5,983,240			8,683,805
Nonoperating income (expense)			6,605,817			16,045,517			12,351,107			(2,277,180	)

Income (loss) from continuing operations before income taxes and minority interest		$	(826,302	)	$	(8,962,444	)	$	(6,367,867	)	$	10,960,985

~~The new credit facilities referred to in Note 3 to these~~9 ~~financial statements are guaranteed jointly and severally by all of the Company’s wholly owned~~ ~~subsidiaries (collectively, the Guarantors). Such guarantees are full and unconditional. WAND~~ ~~(TV) Partnership, a partially owned subsidiary of the Company, is not a guarantor of the credit~~ ~~facilities.~~

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements

NOTE 7 — SUPPLEMENTAL GUARANTOR INFORMATION

The Company’s credit facilities are guaranteed jointly and severally by all of the Company’s wholly owned subsidiaries (collectively, the Guarantors). Such guarantees are full and unconditional. WAND (TV) Partnership, a partially owned subsidiary of the Company, is not a guarantor of the credit facilities.

Supplemental consolidating financial information of the Company, specifically including such information for the Guarantors, is presented below. Financial information for the Parent Company includes both the Holding Company and its one division, The Toledo Blade Company. Investments in subsidiaries are presented using the cost method of accounting and eliminated. Separate financial statements of the Guarantors are not provided as the consolidating financial information contained herein provides a more meaningful disclosure to allow investors to determine the nature of assets held and the operations of the combined groups.

CONSOLIDATING CONDENSED BALANCE SHEET

June 30, 2003


	Unconsolidated

	Parent			Guarantor		Non-Guarantor
	Company			Subsidiaries		Subsidiary		Eliminations			Consolidated

Assets:
Current assets	$	32,157,777		$	55,152,876	$	2,007,932	$	1,015,681		$	90,334,266
Property, plant and equipment, net		25,636,730			215,923,910		5,860,737		322,219			247,743,596
Intangibles, net		4,277,670			58,142,051		28,068,958		198,489			90,687,168
Cash value of life insurance		26,103,609			229,248		—		—			26,332,857
Prepaid pension costs		—			2,460,151		—		—			2,460,151
Pension intangibles		1,442,550			10,489,214		—		—			11,931,764
Investments in subsidiaries		167,185,850			—		—		(167,185,850	)		—
Other		23,541,334			15,322,360		—		—			38,863,694

	$	280,345,520		$	357,719,810	$	35,937,627	$	(165,649,461	)	$	508,353,496

Liabilities and stockholders’ equity:
Current liabilities	$	14,493,396		$	51,788,435	$	567,788	$	1,014,036		$	67,863,655
Long-term debt		268,702,558			—		—		—			268,702,558
Other long-term obligations		9,861,202			228,644,208		—		(94,354,998	)		144,150,412
Minority interest		—			—		—		11,916,681			11,916,681
Stockholders’ equity		(12,711,636	)		77,287,167		35,369,839		(84,225,180	)		15,720,190

	$	280,345,520		$	357,719,810	$	35,937,627	$	(165,649,461	)	$	508,353,496

PART I. FINANCIAL INFORMATION Item 1. Financial Statements

NOTE 67 — SUPPLEMENTAL GUARANTOR INFORMATION (continued)

CONSOLIDATING CONDENSED BALANCE ~~SHEEET~~SHEET ~~September 30~~December 31, 2002

	~~Unconsolidated~~	Unconsolidated
	~~Parent~~	Parent			~~Guarantor~~	Guarantor		~~Non-Guarantor~~	Non-Guarantor
	~~Company~~	Company			~~Subsidiaries~~	Subsidiaries		~~Subsidiary~~	Subsidiary		~~Eliminations~~	Eliminations			~~Consolidated~~	Consolidated
Assets:
Current assets	$	~~39,679,243~~$	31,824,209		$	~~40,697,861~~$	57,565,103	$	~~3,628,891~~$	2,136,861	$	~~44,276~~$	88,187		$	~~84,050,271~~$	91,614,360
Property, plant and equipment, net		~~27,251,205~~	26,920,217			~~216,320,748~~	215,990,124		~~5,908,223~~	5,994,444		~~243,722~~	372,427			~~249,723,898~~	249,277,212
Intangibles, net		~~4,465,948~~	4,494,448			~~59,307,406~~	58,696,639		~~28,068,958~~	28,068,958		~~198,489~~	198,489			~~92,040,801~~	91,458,534
Cash value of life insurance, net		~~24,866,934~~	25,369,465			~~209,378~~	225,078		—	—		—	—			~~25,076,312~~	25,594,543
Prepaid pension costs		~~1,532,392~~	—			~~11,250,955~~	2,437,798		—	—		—	—			~~12,783,347~~	2,437,798
Pension intangibles		~~645,495~~	1,442,550			~~6,584,535~~	10,489,214		—	—		—	—			~~7,230,030~~	11,931,764
Investments in subsidiaries		~~183,830,526~~	178,302,804			—	—		—	—		~~(183,830,526~~	)(178,302,804	)		—	—
Other		~~8,521,852~~	18,618,079			~~24,315,183~~	20,792,387		—	—		—	—			~~32,837,035~~	39,410,466
	$	~~290,793,595~~$	286,971,772		$	~~358,686,066~~$	366,196,343	$	~~37,606,072~~$	36,200,263	$	~~(183,344,039~~$	)(177,643,701	)	$	~~503,741,694~~$	511,724,677
Liabilities and stockholders’ equity:
Current liabilities	$	~~18,552,900~~$	23,530,460		$	~~53,714,929~~$	54,864,676	$	~~533,893~~$	756,010	$	~~(11,281~~$	)85,922		$	~~72,790,441~~$	79,237,068
Long-term debt		~~260,361,550~~	255,786,939			—	—		—	—		—	—			~~260,361,550~~	255,786,939
Other long-term obligations		~~5,502,791~~	11,310,112			~~222,014,657~~	238,274,771		—	—		~~(109,345,762~~	)(105,471,332	)		~~118,171,686~~	144,113,551
Minority interest		—	—			—	—		—	—		~~12,486,453~~	11,941,238			~~12,486,453~~	11,941,238
Stockholders’ equity		~~6,376,354~~	(3,655,739	)		~~82,956,480~~	73,056,896		~~37,072,179~~	35,444,253		~~(86,473,449~~	)(84,199,529	)		~~39,931,564~~	20,645,881
	$	~~290,793,595~~$	286,971,772		$	~~358,686,066~~$	366,196,343	$	~~37,606,072~~$	36,200,263	$	~~(183,344,039~~$	)(177,643,701	)	$	~~503,741,694~~$	511,724,677

PART I. FINANCIAL INFORMATION Item 1. Financial Statements

NOTE 67 — SUPPLEMENTAL GUARANTOR INFORMATION (continued)

CONSOLIDATING CONDENSED ~~BALANCE~~STATEMENT ~~SHEEET~~OF INCOME ~~December~~Three 31Months Ended June 30, ~~2001~~2003

	~~Unconsolidated~~		Unconsolidated
	~~Parent~~		Parent		~~Guarantor~~		Guarantor		~~Non-Guarantor~~		Non-Guarantor
	~~Company~~		Company		~~Subsidiaries~~		Subsidiaries		~~Subsidiary~~		Subsidiary		~~Eliminations~~		Eliminations		~~Consolidated~~		Consolidated
Assets:
Revenue			$	22,043,184			$	86,844,928			$	1,704,980			$	(2,789,421	)		$	107,803,671
Current assets	$	15,717,915			$	57,636,621			$	4,138,933			$	3,905,631			$	81,399,100
Expenses				21,221,127				81,869,687				1,656,889				(2,723,547	)			102,024,156
Property, plant and equipment, net		28,992,144				228,208,431				5,962,544				32,587				263,195,706
Operating income (loss)				822,057				4,975,241				48,091				(65,874	)			5,779,515
Intangibles, net		4,784,698				50,860,955				28,068,959				198,489				83,913,101
Nonoperating income (expense)				(6,602,912	)			(735	)			(2,170	)			—				(6,605,817	)
Cash value of life insurance, net		10,486,057				205,048				—				—				10,691,105
Income (loss) from continuing operations
Prepaid pension costs		1,852,686				9,276,267				—				16,493				11,145,446
	Before income tax and minority interest			(5,780,855	)			4,974,506				45,921				(65,874	)			(826,302	)
Pension intangibles		645,495				6,584,535				—				—				7,230,030
Provision (credit) for income taxes				(1,884,120	)			1,724,332				—				—				(159,788	)
Investments in subsidiaries		211,745,229				—				—				(211,745,229	)			—
Income (loss) from continuing operations
Other		10,366,210				17,627,480				2,554				(16,493	)			27,979,751
	Before minority interest			(3,896,735	)			3,250,174				45,921				(65,874	)			(666,514	)
	$	284,590,434			$	370,399,337			$	38,172,990			$	(207,608,522	)		$	485,554,239
Minority interest				—				—				—				(15,154	)			(15,154	)
Liabilities and stockholders’ equity:
Income (loss) from continuing operations				(3,896,735	)			3,250,174				45,921				(81,028	)			(681,668	)
Current liabilities	$	24,017,694			$	52,111,863			$	1,773,706			$	3,812,414			$	81,715,677
Loss from discontinued operations, net				—				(216,722	)			—				—				(216,722	)
Long-term debt		227,355,513				—				—				—				227,355,513
Net income (loss)			$	(3,896,735	)		$	3,033,452			$	45,921			$	(81,028	)		$	(898,390	)
Other long-term obligations		21,238,306				242,620,050				—				(137,222,805	)			126,635,551
Minority interest		—				—				—				12,264,398				12,264,398
Stockholders’ equity		11,978,921				75,667,424				36,399,284				(86,462,529	)			37,583,100
	$	284,590,434			$	370,399,337			$	38,172,990			$	(207,608,522	)		$	485,554,239

CONSOLIDATING CONDENSED STATEMENT OF INCOME
Three Months Ended June 30, 2002


		Unconsolidated

		Parent			Guarantor			Non-Guarantor
		Company			Subsidiaries			Subsidiary		Eliminations			Consolidated

Revenue		$	21,037,089		$	85,777,555		$	1,751,366	$	(2,503,471	)	$	106,062,539
Expenses			20,208,285			79,707,373			1,659,828		(2,596,020	)		98,979,466

Operating income (loss)			828,804			6,070,182			91,583		92,549			7,083,073
Nonoperating income (expense)			(16,051,073	)		2,288			3,268		—			(16,045,517	)

Income (loss) from continuing operations
	Before income tax and minority interest		(15,222,269	)		6,072,470			94,806		92,549			(8,962,444	)
Provision (credit) for income taxes			(5,243,320	)		2,772,075			—		—			(2,471,245	)

Income (loss) from continuing operations
	Before minority interest		(9,978,949	)		3,300,395			94,806		92,549			(6,491,199	)
Minority interest			—			—			—		(79,947	)		(79,947	)

Income (loss) from continuing operations			(9,978,949	)		3,300,395			94,806		12,602			(6,571,146	)
Loss from discontinued operations, net			—			(327,351	)		—		—			(327,351	)

Net income (loss)		$	(9,978,949	)	$	2,973,044		$	94,806	$	12,602		$	(6,898,497	)

PART I. FINANCIAL INFORMATION ~~Financial Statements~~

~~NOTE~~Item 1. ~~6—SUPPLEMENTAL~~Financial ~~GUARANTOR INFORMATION (continued)~~Statements

~~CONSOLIDATING~~NOTE ~~CONDENSED~~7 ~~STATEMENT~~— OFSUPPLEMENTAL ~~INCOME Three~~GUARANTOR ~~Months~~INFORMATION ~~Ended September 30, 2002~~(continued)

	Unconsolidated
	Parent			Guarantor		Non-Guarantor
	Company			Subsidiaries		Subsidiary		Eliminations			Consolidated
Revenue	$	20,810,725		$	83,336,788	$	2,006,458	$	(2,774,697	)	$	103,379,274
Expenses		21,591,068			78,952,009		1,602,578		(2,535,783	)		99,609,872
Operating income (loss)		(780,343	)		4,384,779		403,880		(238,914	)		3,769,402
Nonoperating income (expense)		(8,860,176	)		1,439		5,012		—			(8,853,725	)
Income (loss) before income taxes and minority interest		(9,640,519	)		4,386,218		408,892		(238,914	)		(5,084,323	)
Provision (credit) for income taxes		(3,600,091	)		1,754,065		—		—			(1,846,026	)
Income (loss) before minority interest		(6,040,428	)		2,632,153		408,892		(238,914	)		(3,238,297	)
Minority interest		—			—		—		(134,934	)		(134,934	)
Net income (loss)	$	(6,040,428	)	$	2,632,153	$	408,892	$	(373,848	)	$	(3,373,231	)

CONSOLIDATING CONDENSED STATEMENT OF INCOME
Six Months Ended June 30, 2003

CONSOLIDATING CONDENSED STATEMENT OF INCOME Three Months Ended September 30, 2001


		Unconsolidated

		Parent			Guarantor			Non-Guarantor
		Company			Subsidiaries			Subsidiary			Eliminations			Consolidated

Revenue		$	41,694,230		$	169,822,922		$	3,194,036		$	(5,566,507	)	$	209,144,681
Expenses			42,391,399			163,019,636			3,266,705			(5,516,299	)		203,161,441

Operating income (loss)			(697,169	)		6,803,286			(72,669	)		(50,208	)		5,983,240
Nonoperating expense			(12,348,010	)		(1,352	)		(1,745	)		—			(12,351,107	)

Income (loss) from continuing operations
	Before income tax and minority interest		(13,045,179	)		6,801,934			(74,414	)		(50,208	)		(6,367,867	)
Provision (credit) for income taxes			(3,828,564	)		2,277,529			—			—			(1,551,035	)

Income (loss) from continuing operations
	Before minority interest		(9,216,615	)		4,524,405			(74,414	)		(50,208	)		(4,816,832	)
Minority interest			—			—			—			24,557			24,557

Income (loss) from continuing operations			(9,216,615	)		4,524,405			(74,414	)		(25,651	)		(4,792,275	)
Loss from discontinued operations			—			(294,134	)		—			—			(294,134	)

Net income (loss)		$	(9,216,615	)	$	4,230,271		$	(74,414	)	$	(25,651	)	$	(5,086,409	)

	Unconsolidated
	Parent			Guarantor		Non-Guarantor
	Company			Subsidiaries		Subsidiary			Eliminations			Consolidated
Revenue	$	22,002,906		$	83,365,035	$	1,418,548		$	(4,928,404	)	$	101,858,085
Expenses		21,449,712			81,689,437		1,871,526			(4,168,627	)		100,842,048
Operating income (loss)		553,194			1,675,598		(452,978	)		(759,777	)		1,016,037
Nonoperating income (expense)		(10,053,187	)		22,596		12,556			—			(10,018,035	)
Income (loss) before income taxes and minority interest		(9,499,993	)		1,698,194		(440,422	)		(759,777	)		(9,001,998	)
Provision (credit) for income taxes		(3,085,952	)		588,790		—			—			(2,497,162	)
Income (loss) before minority interest		(6,414,041	)		1,109,404		(440,422	)		(759,777	)		(6,504,836	)
Minority interest		—			—		—			145,339			145,339
Net income (loss)	$	(6,414,041	)	$	1,109,404	$	(440,422	)	$	(614,438	)	$	(6,359,497	)

CONSOLIDATING CONDENSED STATEMENT OF INCOME
Six Months Ended June 30, 2002


	Unconsolidated

	Parent			Guarantor			Non-Guarantor
	Company			Subsidiaries			Subsidiary		Eliminations			Consolidated

Revenue	$	40,106,115		$	168,929,507		$	3,564,164	$	(4,647,628	)	$	207,952,158
Expenses		41,065,813			159,992,781			3,307,436		(5,097,677	)		199,268,353

Operating income (loss)		(959,698	)		8,936,726			256,728		450,049			8,683,805
Nonoperating income		2,265,409			4,496			7,275		—			2,277,180

Income from continuing operations before income tax and minority interest		1,305,711			8,941,222			264,003		450,049			10,960,985
Provision for income taxes		535,342			3,845,803			—		—			4,381,145

Income from continuing operations before minority interest		770,369			5,095,419			264,003		450,049			6,579840
Minority interest		—			—			—		(87,121	)		(87,121	)

Income from continuing operations		770,369			5,095,419			264,003		362,928			6,492,719
Loss from discontinued operations		—			(438,516	)		—		—			(438,516	)

Net income	$	770,369		$	4,656,903		$	264,003	$	362,928		$	6,054,203

PART I. FINANCIAL INFORMATION ~~Financial Statements~~

~~NOTE~~Item 1. ~~6—SUPPLEMENTAL~~Financial ~~GUARANTOR INFORMATION (continued)~~Statements

~~CONSOLIDATING~~NOTE ~~CONDENSED~~7 ~~STATEMENT~~— OFSUPPLEMENTAL ~~INCOME Nine~~GUARANTOR ~~Months~~INFORMATION ~~Ended September 30, 2002~~(continued)

	Unconsolidated
	Parent			Guarantor		Non-Guarantor
	Company			Subsidiaries		Subsidiary		Eliminations			Consolidated
Revenue	$	60,916,840		$	252,553,477	$	5,570,622	$	(7,422,325	)	$	311,618,614
Expenses		62,656,881			239,975,220		4,910,014		(7,633,460	)		299,908,655
Operating income (loss)		(1,740,041	)		12,578,257		660,608		211,135			11,709,959
Nonoperating income (expense)		(6,594,767	)		5,935		12,287		—			(6,576,545	)
Income (loss) before income taxes and minority interest		(8,334,808	)		12,584,192		672,895		211,135			5,133,414
Provision (credit) for income taxes		(3,064,749	)		5,295,136		—		—			2,230,387
Income (loss) before minority interest		(5,270,059	)		7,289,056		672,895		211,135			2,903,027
Minority interest		—			—		—		(222,055	)		(222,055	)
Net income (loss)	$	(5,270,059	)	$	7,289,056	$	672,895	$	(10,920	)	$	2,680,972

CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS
Six months ended June 30, 2003

CONSOLIDATING CONDENSED STATEMENT OF INCOME Nine Months Ended September 30, 2001


	Unconsolidated

	Parent			Guarantor			Non-Guarantor
	Company			Subsidiaries			Subsidiary			Eliminations			Consolidated

Net cash provided by (used in) operating activities	$	(8,261,815	)	$	30,537,570		$	743,262		$	(49,588	)	$	22,969,429
Additions to property, plant and equipment		(768,288	)		(22,332,666	)		(427,393	)		50,208			(23,478,139	)
Other investing activities		(754,869	)		44,568			—			—			(710,301	)

Net cash used in investing activities		(1,523,157	)		(22,288,098	)		(427,393	)		50,208			(24,188,440	)
Borrowings on term loan		10,000,000			—			—			—			10,000,000
Payments on term loan		(3,946,000	)		—			—			—			(3,946,000	)
Other financing activity		7,713,667			(7,942,124	)		—			(620	)		(229,077	)

Net cash provided by (used in) financing activities		13,767,667			(7,942,124	)		—			(620	)		5,824,923

Increase in cash and equivalents		3,982,695			307,348			315,869			—			4,605,912
Cash and equivalents at beginning of period		8,854,800			455,633			471,212			—			9,781,645

Cash and equivalents at end of period	$	12,837,495		$	762,981		$	787,081		$	—		$	14,387,557

	Unconsolidated
	Parent			Guarantor		Non-Guarantor
	Company			Subsidiaries		Subsidiary			Eliminations			Consolidated
Revenue	$	65,458,206		$	246,501,090	$	4,720,684		$	(12,600,108	)	$	304,079,872
Expenses		64,555,454			243,509,354		5,311,893			(11,577,355	)		301,799,346
Operating income (loss)		902,752			2,991,736		(591,209	)		(1,022,753	)		2,280,526
Nonoperating income (expense)		(20,372,728	)		27,551		28,248			—			(20,316,929	)
Income (loss) before income taxes and minority interest		(19,469,976	)		3,019,287		(562,961	)		(1,022,753	)		(18,036,403	)
Provision (credit) for income taxes		(5,796,161	)		702,700		—			—			(5,093,461	)
Income (loss) before minority interest		(13,673,815	)		2,316,587		(562,961	)		(1,022,753	)		(12,942,942	)
Minority interest		—			—		—			185,777			185,777
Net income (loss)	$	(13,673,815	)	$	2,316,587	$	(562,961	)	$	(836,976	)	$	(12,757,165	)

PART I. FINANCIAL INFORMATION ~~Financial Statements~~

~~NOTE~~Item 1. ~~6—SUPPLEMENTAL~~Financial ~~GUARANTOR INFORMATION (continued)~~Statements

~~CONSOLIDATING~~NOTE ~~CONDENSED~~7 ~~STATEMENT~~— OFSUPPLEMENTAL ~~CASH~~GUARANTOR ~~FLOWS Nine~~INFORMATION ~~Months Ended September 30, 2002~~(continued)

	Unconsolidated
	Parent			Guarantor			Non-Guarantor
	Company			Subsidiaries			Subsidiary			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	(25,349,097	)	$	51,327,298		$	52,317		$	248,795		$	26,279,313
Additions to property, plant and equipment		(505,039	)		(18,647,903	)		(695,629	)		(211,135	)		(20,059,706	)
Other investing activities		(2,288,273	)		852,568			—			—			(1,435,705	)
Net cash used in investing activities		(2,793,312	)		(17,795,335	)		(695,629	)		(211,135	)		(21,495,411	)
Issuance of subordinated notes		175,000,000			—			—			—			175,000,000
Borrowings on term loan		75,000,000			—			—			—			75,000,000
Payments on long-term debt		(235,186,500	)		—			—			—			(235,186,500	)
Other financing activity		22,597,748			(34,400,718	)		—			(37,660	)		(11,840,630	)
Net cash provided by (used in) financing activities		37,411,248			(34,400,718	)		—			(37,660	)		2,972,870
Increase (decrease) in cash and equivalents		9,268,839			(868,755	)		(643,312	)		—			7,756,772
Cash and equivalents at beginning of period		3,186,078			(64,937	)		2,761,591			—			5,882,732
Cash and equivalents at end of period	$	12,454,917		$	(933,692	)	$	2,118,279		$	—		$	13,639,504

CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS
Six months ended June 30, 2002


	Unconsolidated

	Parent			Guarantor			Non-Guarantor
	Company			Subsidiaries			Subsidiary			Eliminations			Consolidated

Net cash provided by (used in) operating activities	$	(16,311,823	)	$	38,260,888		$	(818,180	)	$	447,093		$	21,577,978
Additions to property, plant and equipment		(352,297	)		(11,312,302	)		(545,089	)		(438,211	)		(12,647,899	)
Other investing activities		11,638,263			2,268			—			—			11,640,531

Net cash provided by (used in) investing activities		11,285,966			(11,310,034	)		(545,089	)		(438,211	)		(1,007,368	)
Issuance of subordinated notes		175,000,000			—			—			—			175,000,000
Borrowings on term loan		75,000,000			—			—			—			75,000,000
Payments on long-term debt		(234,999,000	)		—			—			—			(234,999,000	)
Other financing activity		16,277,839			(26,824,311	)		—			(8,882	)		(10,555,354	)

Net cash provided by (used in) financing activities		31,278,839			(26,824,311	)		—			(8,882	)		4,445,646

Increase (decrease) in cash and equivalents		26,252,982			126,543			(1,363,269	)		—			25,016,256
Cash and equivalents at beginning of period		3,186,078			(64,937	)		2,761,591			—			5,882,732

Cash and equivalents at end of period	$	29,439,060		$	61,606		$	1,398,322		$	—		$	30,898,988

PART I. FINANCIAL INFORMATION Financial Statements

NOTE 6—SUPPLEMENTAL GUARANTOR INFORMATION (continued)

CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS Nine Months Ended September 30, 2001

	Unconsolidated
	Parent			Guarantor			Non-Guarantor
	Company			Subsidiaries			Subsidiary			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	(8,777,486	)	$	29,806,088		$	1,173,090		$	53,813		$	22,255,505
Additions to property, plant and equipment		(2,396,736	)		(49,514,143	)		(44,565	)		(53,813	)		(52,009,257	)
Other investing activities		4,275,848			52,370			—			—			4,328,218
Net cash provided by (used in) investing activities		1,879,112			(49,461,773	)		(44,565	)		(53,813	)		(47,681,039	)
Payments on long-term debt		(11,000,000	)		—			—			—			(11,000,000	)
Borrowings on long-term revolver		53,000,000			—			—			—			53,000,000
Other financing activity		(20,206,701	)		18,939,766			—			—			(1,266,935	)
Net cash provided by financing activities		21,793,299			18,939,766			—			—			40,733,065
Increase (decrease) in cash and equivalents		14,894,925			(715,919	)		1,128,525			—			15,307,531
Cash and equivalents at beginning of period		2,021,900			1,290,070			901,000			—			4,212,970
Cash and equivalents at end of period	$	16,916,825		$	574,151		$	2,029,525		$	—		$	19,520,501

PART I. FINANCIAL INFORMATION
Management’s Discussion and Analysis of Financial Position and Results of Operations

The following analysis of the financial condition and results of operations of Block Communications, Inc. (the “Company”) should be read in conjunction with our unaudited Consolidated Condensed Financial Statements and notes thereto included elsewhere herein and with the management’s discussion and analysis, consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002.

Overview

We are a privately held diversified media company with our primary operations in cable television, newspaper publishing and television broadcasting. We provide cable television service to the greater Toledo, Ohio metropolitan area (Buckeye CableSystem) and the Sandusky, Ohio area (Erie County CableSystem). At December 31, 2002, we had approximately 152,000 subscribers. We publish two daily metropolitan newspapers, the Pittsburgh Post-Gazette in Pittsburgh, Pennsylvania, and The Blade in Toledo, Ohio, each of which is the leading publication in its market. The aggregate average daily and Sunday paid circulation of our two newspapers is approximately 385,100 and 601,400, respectively, as of December 31, 2002. We own and operate four television stations: two in Louisville, Kentucky, and one each in Boise, Idaho and Lima, Ohio; and we are a two-thirds owner of a television station in Decatur, Illinois. We also have other communication operations including a telephony business and a commercial and residential security business.

Critical Accounting Policies and Estimates

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosures. We base our estimates and judgments on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. We evaluate these estimates and judgments on a continual basis. Actual results may differ from these estimates and judgments.

We believe the following critical accounting policies affect our significant estimates and judgments used in the preparation of the consolidated financial statements. We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. If the financial condition of our customers were to change, resulting in an impairment of their ability to make payments, additional allowances could be required. We maintain various employment related liabilities, such as workers’ compensation and medical reserves, based on historical performance and current trends. Actual results could differ from estimates resulting in adjustments to the recorded liability. Actuarial assumptions have a significant impact on the determination of net periodic pension costs and credits and other post-employment benefits. If actual experience differs from these assumptions, future periodic pension and post-employment costs could be adversely affected.

General

For the ~~three~~ six months ended ~~September~~ June 30, ~~2002~~2003, we had revenues, ~~EBITDA~~operating income and a net loss from continuing operations of $~~103~~209.4 1 million, $146.9 0 million and $3.4 .8 million, respectively. This represents ~~increases~~ an increase in revenues ~~and~~of ~~EBITDA~~$1.2 million asand ~~compared~~a todecrease ~~the~~in ~~quarter~~operating ~~ended~~income ~~September 30, 2001~~ of $12.5 7 million ~~and~~as ~~$2.4~~compared ~~million~~to the six months ended June 30, ~~respectively~~2002. Advertising revenues are generally highest in the fourth quarter, due in part to increases in retail advertising in the ~~period~~ period leading up to and including the holiday season. In addition, broadcasting advertising revenues are generally higher in even-numbered election years due to political advertising. Advertising revenues in the markets we operate in were soft throughout the first six months of 2003 due primarily to economic uncertainties resulting from, among other things, geopolitical concerns.

~~For~~ Set ~~the~~forth ~~nine-month~~ below ~~period~~are ~~ended~~the ~~September~~operating ~~30,~~results ~~2002, we had revenues, EBITDA~~ and ~~net~~a ~~income~~reconciliation of ~~$311.6~~net income ~~million,~~to ~~$47.6~~EBITDA ~~million~~for ~~and~~the ~~$2.7~~three ~~million, respectively. This represents increases in revenues~~ and ~~EBITDA~~six ~~as compared to the nine-~~month ~~period~~periods ended ~~September~~ June 30, ~~2001~~2003 ~~of $7.5 million~~ and ~~$11.8 million, respectively. The net income is due to~~ ~~a $21~~2002.~~1 million gain on the disposition of Monroe Cablevision partially offset by~~ ~~a $9.0 million loss on the early extinguishment of debt.~~

~~Set forth~~16 ~~below are the operating results and a reconciliation of net income to EBITDA for~~ ~~the three months ended September 30, 2002 and 2001 and the nine months ended September~~ ~~30, 2002 and 2001.~~

PART I. FINANCIAL ~~INFORMATIONManagement~~INFORMATION Management’s Discussion and Analysis of Financial Position and Results of Operations

Block Communications, Inc. and Subsidiaries

Results of Operations (unaudited)

	Three months ended September 30,
			Three months ended June 30,
	2002						2001
			2003							2002
Revenue:
~~Publishing~~	$Publishing	~~62,100,899~~	$	64,172,610	~~60.1~~	%	$59.5	~~65,896,144~~%		$	64.7,646,626	%	61.0	%
~~Cable~~	Cable	~~25,204,115~~		27,355,527	~~24.4~~		25.4	~~22,567,781~~			~~22.2~~25,240,422		23.8
~~Broadcasting~~	Broadcasting	~~9,439,506~~		10,214,156	~~9.1~~		9.5	~~8,083,412~~			7.9,686,810		9.1
~~Other Communications~~	Other Communications	~~6,634,754~~		6,061,378	~~6.4~~		5.6	~~5,310,748~~			~~5.2~~6,488,681		6.1
		103,379,274			100.0			101,858,085			100.0
				107,803,671			100.0				106,062,539		100.0
Expense:
~~Publishing~~	Publishing	~~60,888,697~~		62,313,037	~~58.9~~		57.8	~~66,160,637~~			~~65.0~~61,227,791		57.7
~~Cable~~	Cable	~~22,425,860~~		24,542,132	~~21.7~~		22.8	~~19,147,290~~			~~18.8~~22,392,149		21.1
~~Broadcasting~~	Broadcasting	~~8,589,109~~		8,936,736	~~8.3~~		8.3	~~8,898,327~~			8.7,954,146		8.4
~~Other Communications~~	Other Communications	~~6,193,733~~		5,474,888	~~6.0~~		5.1	~~6,538,829~~			~~6.4~~5,899,585		5.6
~~Corporate general and administrative~~	Corporate general and administrative	~~1,512,473~~		757,363	~~1.5~~		0.7	~~96,965~~			~~0.1~~505,795		0.5
		99,609,872			96.4			100,842,048			99.0
				102,024,156			94.6				98,979,466		93.3
Operating income (loss)		3,769,402			3.6	%		1,016,037			1.0	%
Operating income				5,779,515			5.4	%			7,083,073		6.7	%
Nonoperating income (expense):
~~Interest expense~~	Interest expense	~~(6,037,895~~	)	(5,273,158	)			~~(4,757,348~~	)		(5,894,078	)
~~Loss on disposition of Monroe Cablevision~~	Loss on disposition of Monroe Cablevision	~~(459,360~~	)	—				—			—
~~Loss on early extinguishment of debt~~	Loss on early extinguishment of debt	—		—				—			(8,989,786	)
~~Change in fair value of interest rate swaps~~	Change in fair value of interest rate swaps	~~(2,472,043~~	)	(1,402,215	)			~~(5,296,326~~	)		(1,183,769	)
~~Interest income~~	Interest income	~~115,573~~		69,556				~~35,639~~			22,116
		(8,853,725	)					(10,018,035	)
				(6,605,817	)						(16,045,517	)
Income (loss) before income taxes and minority interest		(5,084,323	)					(9,001,998	)
Loss from continuing operations before income taxes and minority interest				(826,302	)						(8,962,444	)
Provision (credit) for income taxes:		(1,846,026	)					(2,497,162	)
Credit for income taxes				(159,788	)						(2,471,245	)
Minority interest		~~(134,934~~	)	(15,154	)			~~145,339~~			(79,947	)
Net income (loss)	$	(3,373,231	)				$	(6,359,497	)
Loss from continuing operations				(681,668	)						(6,571,146	)
Add:
Loss from discontinued operations, net				(216,722	)						(327,351	)
Interest expense		6,037,895						4,757,348
Net loss				(898,390	)						(6,898,497	)
Provision for income taxes		(1,846,026	)					(2,497,162	)
Add:
Depreciation		11,459,351						10,007,856
	Interest expense			5,273,158							5,894,078
Amortization of intangibles and deferred charges		626,042						1,010,617
	Provision for income taxes			(271,433	)						(2,716,119	)
Amortization of broadcast rights		1,655,247						1,576,461
	Depreciation			12,424,633							10,954,638
(Gain) loss on disposal of property and equipment		(974,034	)					(54,968	)
	Amortization of intangibles and deferred charges			775,907							920,926
Change in fair value of interest rate swaps		2,472,043						5,296,326
	Amortization of broadcast rights			1,672,460							1,748,818
(Gain) on disposal of Monroe Cablevision		459,360						—
	Loss on disposal of property and equipment			3,224							5,948
Less:
	Change in fair value of interest rate swaps			1,402,215							1,183,769
Payments on broadcast rights		(1,590,320	)					(1,252,610	)
	Loss on disposal of discontinued operation			235,591							—
EBITDA	$	14,926,327					$	12,484,371
	Loss on early extinguishment of debt			—							8,989,786
Less:
	Payments on broadcast rights			(1,638,874	)						(1,351,658	)
EBITDA			$	18,978,491						$	18,731,689

PART I. FINANCIAL ~~INFORMATIONManagement~~INFORMATION Management’s Discussion and Analysis of Financial Position and Results of Operations

Block Communications, Inc. and Subsidiaries

Results of Operations (unaudited)

	Nine months ended September 30,
			Six months ended June 30,
	2002						2001
			2003							2002
Revenue:
~~Publishing~~	$Publishing	~~188,310,327~~	$	123,637,832	~~60.4~~	%	$59.1	~~195,610,215~~%		$	~~64.3~~126,209,428	%	60.7	%
~~Cable~~	Cable	~~75,541,372~~		54,264,104	~~24.2~~		25.9	~~65,952,776~~			~~21.7~~50,337,257		24.2
~~Broadcasting~~	Broadcasting	~~28,126,969~~		19,282,387	~~9.0~~		9.2	~~25,676,117~~			~~8.4~~18,687,463		9.0
~~Other Communications~~	Other Communications	~~19,639,946~~		11,960,358	~~6.3~~		5.7	~~16,840,764~~			~~5.5~~12,718,010		6.1
		311,618,614			100.0			304,079,872			100.0
				209,144,681			100.0				207,952,158		100.0
Expense:
~~Publishing~~	Publishing	~~183,635,801~~		123,097,037	~~58.9~~		58.9	~~196,943,958~~			~~64.8~~122,747,104		59.0
~~Cable~~	Cable	~~67,631,965~~		49,231,426	~~21.7~~		23.5	~~56,232,854~~			~~18.5~~45,206,105		21.7
~~Broadcasting~~	Broadcasting	~~26,598,294~~		18,281,762	~~8.5~~		8.7	~~27,499,396~~			~~9.0~~18,009,185		8.7
~~Other Communications~~	Other Communications	~~19,073,047~~		10,714,397	~~6.1~~		5.1	~~20,075,914~~			~~6.6~~11,848,884		5.7
~~Corporate general and administrative~~	Corporate general and administrative	~~2,969,548~~		1,836,819	~~1.0~~		0.9	~~1,047,224~~			~~0.3~~1,457,075		0.7
		299,908,655			96.2			301,799,346			99.3
				203,161,441			97.1				199,268,353		95.8
Operating income (loss)		11,709,959			3.8	%		2,280,526			0.7	%
Operating income				5,983,240			2.9	%			8,683,805		4.2	%
Nonoperating income (expense):
~~Interest expense~~	Interest expense	~~(16,680,122~~	)	(10,220,530	)			~~(14,179,801~~	)		(10,642,227	)
~~Gain on disposition of Monroe Cablevision~~	Gain on disposition of Monroe Cablevision	~~21,140,829~~		—				—			21,600,189
~~Loss on early extinguishment of debt~~	Loss on early extinguishment of debt	~~(8,989,786~~	)	—				—			(8,989,786	)
~~Change in fair value of interest rate swaps~~	Change in fair value of interest rate swaps	~~(2,193,986~~	)	(2,230,337	)			~~(6,201,349~~	)		278,057
~~Interest income~~	Interest income	~~146,520~~		99,760				~~64,221~~			30,947
		(6,576,545	)					(20,316,929	)
				(12,351,107	)						2,277,180
Income (loss) before income taxes and minority interest		5,133,414						(18,036,403	)
Income from continuing operations before income taxes and minority interest				(6,367,867	)						10,960,985
Provision (credit) for income taxes:		2,230,387						(5,093,461	)
Provision (credit) for income taxes				(1,551,035	)						4,381,145
Minority interest		~~(222,055~~	)	24,557				~~185,777~~			(87,121	)
Net income (loss)	$	2,680,972					$	(12,757,165	)
Income (loss) from continuing operations				(4,792,275	)						6,492,719
Add:
Loss from discontinued operations, net				(294,134	)						(438,516	)
Interest expense		16,680,122						14,179,801
Net income (loss)				(5,086,409	)						6,054,203
Provision for income taxes		2,230,387						(5,093,461	)
Add:
Depreciation		33,737,180						29,800,233
	Interest expense			10,220,530							10,642,227
Amortization of intangibles and deferred charges		1,919,494						2,906,096
	Provision for income taxes			(1,702,559	)						4,076,413
Amortization of broadcast rights		4,977,936						4,628,984
	Depreciation			24,885,786							22,277,829
(Gain) loss on disposal of property and equipment		(571,220	)					(18,358	)
	Amortization of intangibles and deferred charges			1,540,536							1,293,452
Change in fair value of interest rate swaps		2,193,986						6,201,349
	Amortization of broadcast rights			3,395,873							3,322,689
Loss on early extinguishment of debt		8,989,786						—
	Loss on disposal of property and equipment			42,686							402,814
(Gain) on disposal of Monroe Cablevision		(21,140,829	)					—
	Change in fair value of interest rate swaps			2,230,337							(278,057	)
Less:
	Loss on disposal of discontinued operations			235,591							—
Payments on broadcast rights		(4,121,864	)					(4,044,622	)
	Loss on early extinguishment of debt			—							8,989,786
EBITDA	$	47,575,950					$	35,802,857
	Gain on disposal of Monroe Cablevision			—							(21,600,189	)
Less:
	Payments on broadcast rights			(3,397,766	)						(2,531,544	)
EBITDA			$	32,364,605						$	32,649,623

PART I. FINANCIAL INFORMATION Management’s Discussion and Analysis of Financial Position and Results of Operations ~~Financial Statements~~

~~Three~~Set ~~Months~~forth ~~Ended~~ below ~~September~~is ~~30,~~a ~~2002~~reconciliation ~~Compared~~of net income to ~~Three~~EBITDA ~~Months~~by ~~Ended~~operating ~~September~~segment for the three and six month periods ended June 30, ~~2001~~2003 and 2002.

Block Communications, Inc. and Subsidiaries
Reconciliation of Net Income to EBITDA by Segment


		Publishing			Cable			Broadcasting			Other			Corporate			Consolidated

		Three months ended June 30, 2003
Net income (loss)		$	806,505		$	1,953,598		$	817,359		$	422,649		$	(4,898,501	)	$	(898,390	)
Adjustments to net income (loss):
	Interest expense		50,112			—			—			—			5,223,046			5,273,158
	Provision (credit) for income taxes		1,003,120			860,874			442,737			(164,526	)		(2,413,638	)		(271,433	)
	Depreciation		2,865,999			7,745,190			740,975			1,072,469			—			12,424,633
	Amortization of intangibles and deferred charges		88,167			184,891			4,235			—			498,614			775,907
	Amortization of broadcast rights		—			74,249			1,598,211			—			—			1,672,460
	Film payments		—			(72,679	)		(1,566,195	)		—			—			(1,638,874	)
	(Gain) loss on disposal of assets		(9,500	)		6,113			6,868			(257	)		—			3,224
	Change in fair value of derivative		—			—			—			—			1,402,215			1,402,215
	Loss on disposal of discontinued operation		—			—			—			235,591			—			235,591

EBITDA		$	4,804,403		$	10,752,236		$	2,044,190		$	1,565,926		$	(188,264	)	$	18,978,491

		Three months ended June 30, 2002
Net income (loss)		$	1,592,000		$	1,477,164		$	630,976		$	338,297		$	(10,936,934	)	$	(6,898,497	)
Adjustments to net income (loss):
	Interest expense		49,746			—			—			—			5,844,332			5,894,078
	Provision (credit) for income taxes		1,777,089			1,372,452			25,954			(321,426	)		(5,570,188	)		(2,716,119	)
	Depreciation		2,680,000			6,584,814			648,883			1,040,941			—			10,954,638
	Amortization of intangibles and deferred charges		81,916			—			7,709			446,138			385,163			920,926
	Amortization of broadcast rights		—			76,929			1,671,889			—			—			1,748,818
	Film payments		—			(38,169	)		(1,313,489	)		—			—			(1,351,658	)
	(Gain) loss on disposal of assets		(8,194	)		12,108			—			2,034			—			5,948
	Change in fair value of derivative		—			—			—			—			1,183,769			1,183,769
	Loss on early extinguishment of debt		—			—			—			—			8,989,786			8,989,786

EBITDA		$	6,172,557		$	9,485,298		$	1,671,922		$	1,505,984		$	(104,072	)	$	18,731,689

		Six months ended June 30, 2003
Net income (loss)		$	(359,932	)	$	3,501,817		$	643,531		$	1,028,225		$	(9,900,050	)	$	(5,086,409	)
Adjustments to net income (loss):
	Interest expense		98,719			—			—			—			10,121,811			10,220,530
	Provision (credit) for income taxes		802,205			1,533,069			379,906			(227,922	)		(4,189,817	)		(1,702,559	)
	Depreciation		5,731,998			15,573,275			1,439,707			2,140,806			—			24,885,786
	Amortization of intangibles and deferred charges		176,334			369,782			8,470			—			985,950			1,540,536
	Amortization of broadcast rights		—			153,926			3,241,947			—			—			3,395,873
	Film payments		—			(171,886	)		(3,225,880	)		—			—			(3,397,766	)
	(Gain) loss on disposal of assets		(9,500	)		45,502			6,868			(184	)		—			42,686
	Change in fair value of derivative		—			—			—			—			2,230,337			2,230,337
	Loss on disposal of discontinued operation		—			—			—			235,591			—			235,591

EBITDA		$	6,439,824		$	21,005,485		$	2,494,549		$	3,176,516		$	(751,769	)	$	32,364,605

		Six months ended June 30, 2002
Net income (loss)		$	1,369,693		$	3,067,870		$	426,424		$	662,009		$	528,207		$	6,054,203
Adjustments to net income (loss):
	Interest expense		86,974			—			—			—			10,555,253			10,642,227
	Provision (credit) for income taxes		2,005,698			2,066,375			173,411			(536,131	)		367,060			4,076,413
	Depreciation		5,656,000			13,282,705			1,292,636			2,046,488			—			22,277,829
	Amortization of intangibles and deferred charges		176,334			—			15,419			446,138			655,561			1,293,452
	Amortization of broadcast rights		—			148,439			3,174,250			—			—			3,322,689
	Film payments		—			(107,280	)		(2,424,264	)		—			—			(2,531,544	)
	(Gain) loss on disposal of assets		(7,244	)		402,389			—			7,669			—			402,814
	Change in fair value of derivative		—			—			—			—			(278,057	)		(278,057	)
	Loss on early extinguishment of debt														8,989,786			8,989,786
	Gain on sale of Monroe Cablevision		—			—			—			—			(21,600,189	)		(21,600,189	)

EBITDA		$	9,287,455		$	18,860,498		$	2,657,876		$	2,626,173		$	(782,379	)	$	32,649,623

PART I. FINANCIAL INFORMATION
Management’s Discussion and Analysis of Financial Position and Results of Operations

We define EBITDA as net income before interest expense, provision for income taxes, depreciation and amortization (including amortization of broadcast rights), other non-cash charges, gains or losses on disposition of assets, other non-recurring items, and extraordinary items and after payments for broadcast rights. Other media companies may measure EBITDA in a different manner. We have included EBITDA data because such data is commonly used as a measure of performance for media companies and is also used by investors to measure a company’s ability to service debt. EBITDA is also a significant component of the financial covenants contained in our senior debt agreements. EBITDA is not, and should not be used as, an indicator of or alternative to operating income (loss), net income (loss) or cash flow as reflected in our consolidated financial statements, is not intended to represent funds available for debt service, dividends or other discretionary uses, is not a measure of financial performance under accounting principles generally accepted in the United States, and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with accounting principles generally accepted in the United States. Refer to our financial statements, including our statement of cash flows, which appear elsewhere in this report. The foregoing calculations of EBITDA are not necessarily comparable to similarly titled amounts of other companies.

Three Months Ended June 30, 2003 Compared to Three Months Ended June 30, 2002

Revenues

Total revenues for the three- month period ended ~~September~~ June 30, ~~2002~~2003 ~~increased~~were $1107.58 million, an increase of $1.7 million, or 1.56%, as compared to the ~~three-month~~same period ~~ended September 30, 2001, to $103.4 million~~ of ~~from~~the ~~$101.9~~prior ~~million~~year. This increase was attributable to cable, ~~broadcast~~revenue and ~~telephony~~ broadcasting ~~operations~~advertising revenue growth, partially offset by adecreases ~~decrease~~ in publishing ~~revenues~~and other communications revenue as discussed below.

Cable Television. Cable revenue for the quarter was $2527.2 4 million, an increase of $2.6 1 million, or 118.74%, as compared to the same period of ~~2001~~2002. The increase in cable revenue was principally the result of an increase of $75.22, to $5460.7311, in the average monthly revenue per basic subscriber, based on the average number of subscribers throughout the ~~period~~quarter. An increase in the monthly basic cable service charge and continued rollout of new services drove the increase in average monthly revenue per subscriber. Average monthly high-speed data revenue per customer ~~was~~of $45.~~96,~~34 andecreased ~~increase of~~ $1.7727 as compared to the ~~third~~second quarter of ~~2001~~2002. ~~Since~~This ~~the~~decrease ~~launch~~is primarily due to digital packaging discounts offered as part of the aggressive digital marketing campaign ~~product~~launched induring ~~fall~~the third quarter of ~~2001~~2002. For the quarter ended June 30, 2003, average monthly digital revenue per home ~~has~~was ~~grown~~$14.59, toa decrease of $141.5178 as compared to the same period of the prior year. This decrease ~~for~~is due to a change in the ~~quarter~~composition ~~ended~~of ~~September~~the 30digital subscriber base. At the start of the digital launch, ~~2002~~the subscriber base consisted primarily of early adopters who, on average, purchased higher tiers of digital service, whereas later subscribers opted, on average, for lower tiers of service, thereby reducing per-subscriber revenue. This shift in the subscriber base is a result of the aggressive marketing campaign mentioned above.

Revenue generating units increased in the digital ~~(Buckeye Digital Link)~~ and high-speed ~~data~~ ~~(Buckeye Express)~~ data categories during the quarter ended ~~September~~ June 30, ~~2002~~2003. Net digital additions totaled 72,~~013~~118 during the quarter, resulting in 1932,~~674~~978 digital homes as of ~~September~~ June 30, ~~2002~~2003. Net high-speed data additions totaled 21,~~282~~115 during the quarter, resulting in 2025,~~829~~621 high-speed data customers as of ~~September~~ June 30, ~~2002~~2003. Basic subscribers at the end of the period totaled ~~153~~151,~~450~~353, a decrease of 90687 basic subscribers ~~during~~in the second quarter. ~~The~~of ~~increase~~2003 indue ~~cable~~to ~~revenue~~an ~~also~~increase ~~reflects~~in ~~certain~~non-pay disconnects ~~dial-up~~and ~~Internet~~fewer ~~customers~~installations ~~that our cable operations began servicing~~ in ~~2002. During~~ the ~~three~~Toledo ~~months~~system ~~ended~~resulting ~~September 30, 2002, our cable segment reported $351,000 of~~from economic ~~revenue~~conditions ~~relating~~offset toby ~~these~~seasonal ~~customers~~growth ~~for whom 2001 revenues were included~~ in the ~~other~~Erie ~~communications~~County ~~segment~~system.

Newspaper Publishing. Publishing revenue for the quarter was $6264.1 2 million, a decrease of $~~3.8 million~~474, 000, or 50.87%, as compared to the ~~third~~second quarter of ~~2001~~ 2002. The decrease consisted of a $~~3.1 million~~248,000, or 50.95%, decrease in advertising revenue due primarily to a decrease in retail and classified advertising of $639,000, or 2.4%, and $1.7 3 million, or 86.06%, respectively, resulting from continued economic softness . inThese ~~help-wanted~~decreases ~~advertising.~~were ~~Local~~partially ~~and~~offset by an increase in national advertising ~~decreased~~of $1.2 3 million, or 418.97%~~, and $365,000, or 5~~.~~5%,~~ ~~respectively,~~For ~~due to~~ the ~~overall~~second quarter ~~economic~~of ~~environment.~~ 2003, ~~Circulation~~circulation revenue decreased $~~737~~229,000, or 51.69%, ~~due~~primarily due to ~~the~~a ~~occurrence~~decrease ofin ~~one~~single ~~less~~ copy ~~Sunday~~revenue ~~during~~resulting ~~the~~from ~~three~~economic ~~months~~conditions ~~ended~~and ~~September~~a decrease ~~30,~~in ~~2002 as compared with~~ the ~~same~~ average ~~quarter~~earned ofrate ~~the~~per ~~previous year~~copy. Other revenue, which consists of third party and total market delivery, was consistent with the same ~~period~~quarter of the ~~2001~~previous year.

Television Broadcasting. Broadcasting revenue for the quarter was $910.4 2 million, an increase of $~~1.4 million~~527, 000, or 165.84%, as compared to the three~~-months~~ months ended ~~September~~ June 30, ~~2001~~2002. The increase in broadcasting revenue was due to an increase in local and political advertising revenue of $~~623~~361,000 and $203,000, respectively, orpartially ~~11.1%,~~offset by an increase in ~~national~~agency ~~advertising~~commissions of $~~495~~100,000,. orCombined ~~16.7%,~~regional and annational ~~increase~~ advertising inwere ~~political~~consistent ~~advertising~~with prior ~~of $437,000~~periods.

~~Other Communications~~20 ~~. Other communications revenue was $6.6 million, an increase of $1.3 million,~~ or 24.9%, as compared to the same period of the prior year. This increase was due to growth in telephony switched services revenue of $1.8 million (including an increase of $341,000 in reciprocal compensation) resulting from growth in the telephony customer base. During the third quarter of 2002, twenty-one new retail telephony customers were added, representing a 3.7% increase. The growth in telephony revenue was partially offset by a reduction in revenue due to certain residential dial-up Internet customers now being serviced by our cable operations. Other communications results for the three months ended September 30, 2001 included $218,000 of revenue relating to these Internet customers.

Operating Expenses

Operating expenses for the quarter were $99.6 million, a decrease of $1.2 million, or 1.2%, as compared to the third quarter of 2001. The decrease in operating expense was largely attributable to decreased publishing expenses, which were partially offset by increased cable expenses.

Cable Television . Cable operating expenses were $22.4 million, an increase of $3.3 million, or 17.1%, compared to the same period of the prior year. The increase was primarily due to a $2.1 million, or 40.8%, increase in depreciation, to $7.1 million. This increase in

PART I. FINANCIAL INFORMATION
Management’s Discussion and Analysis of Financial Position and Results of Operations

~~depreciation~~ Other isCommunications. ~~attributable~~Other tocommunications ~~the~~revenue ~~capital~~for ~~expenditures~~the ~~associated~~quarter was $6.1 million, ~~with~~a ~~the~~decrease ~~rebuild~~ of ~~our~~$427,000, ~~Toledo~~or ~~cable~~6.6%, ~~system~~as ~~and~~compared ~~continued~~to ~~rollout~~same period of the ~~cable~~prior ~~modems~~ year. ~~and~~This ~~digital~~is ~~cable~~partially ~~service.~~due ~~Basic~~to ~~cable~~a ~~programming~~decrease ~~expenses~~in ~~increased~~our security system sales revenue of $~~418~~366,000, resulting from a planned reduction in the growth of our orsecurity 8business with the intent of improving operating margins and controlling capital investments. Telecom revenue for the quarter was $4%.5 million, a decrease of $61,000, due to a planned decrease in long-distance revenue of $5141,000, offset by an increase in telecom switched services revenue.4 ~~million~~During the second quarter of 2003, the telecom switched services revenue increased due to ~~price~~the ~~increases~~net ~~from~~addition ~~programming~~of 25 new telecom customers, ~~suppliers~~representing a 4.1% increase in the customer base. Effective June 14, ~~offset~~2003, byan incumbent carrier invoked the FCC order on reciprocal compensation rate reduction. As a ~~decrease~~result, we expect our telecom operation to recognize a net reduction in ~~total~~monthly ~~basic~~reciprocal ~~subscribers~~compensation revenue of approximately $65,000 from historical levels.

~~Newspaper~~ Operating ~~Publishing. Publishing operating expenses were $60.9 million, a decrease of~~Expenses ~~$5.3 million, or 8.0%, from the three months ended September 30, 2001. The decrease~~ was due to a $3.0 million, or 30.0%, decrease in newsprint and ink expense, resulting from a weighted-average price per ton decrease of $174.86, or 29.3%, and a 3.2% decrease in consumption from the same period of the prior year. Additional savings resulted from overall cost controls and headcount reductions.

~~Television~~ Operating ~~Broadcasting.~~expenses ~~Broadcasting~~for ~~operating~~the ~~expenses~~quarter were $8102.6 0 million, aan ~~decrease~~ increase of $~~309~~3.0 million,~~000,~~ or 3.51%, ~~from~~as compared to the ~~same~~second ~~period~~quarter of ~~the prior year~~2002. The ~~decrease results~~increase in ~~primarily~~operating ~~from~~expense ~~cost~~was ~~controls~~attributable ~~implemented~~ to ~~offset~~increased ~~salary~~publishing and ~~inflationary costs,~~cable ~~with reductions in news departments of $178~~expenses,~~000,~~ oroffset ~~12.3%~~by ~~and~~decreased inbroadcasting ~~general~~ and ~~administrative~~ other ~~expenses~~communications ~~of $144,000, or 7~~expenses.~~1%.~~

~~Other~~ Cable ~~Communications~~ Television. ~~Other~~Cable ~~communications~~ operating expenses were $624.2 5 million, aan increase ~~decrease~~ of $~~345~~2.1 million,~~000,~~ or 59.36%, ~~from~~as compared to the same period of ~~2001~~the prior year. ~~This~~The ~~variance~~increase iswas primarily due to a ~~decrease~~$1.2 million, or 17.6%, increase in depreciation to $7.7 million. This increase in depreciation is attributable to the capital expenditures associated with the rebuild of our Toledo cable system and continued rollout of cable modems and digital cable service. In addition, depreciation expense for the Erie County system has been accelerated in anticipation of a first quarter 2004 rebuild completion date. Basic cable programming expenses increased $~~304~~404,000, or 137.02%, into ~~operating~~$6.0 million, ~~expenses~~due ~~related~~ to ~~security~~price increases ~~alarm~~from ~~system~~programming ~~sales~~ suppliers. ~~and~~Programming ~~monitoring~~expense ~~caused~~for bythe adigital ~~decrease~~tier increased $227,000, due to an increase in ~~sales~~the ~~volumes,~~number asof ~~well~~digital subscribers as compared byto ~~cost~~the ~~control~~ same ~~initiatives~~quarter of the prior year.

Newspaper Publishing. Publishing operating expenses were $62.3 million, an increase of $1.1 million, or 1.8%, from the three months ended June 30, 2002. The increase was partially due to a $193,000, or 2.6%, increase in the cost of newsprint and ink, resulting from a weighted-average price per ton increase of $26.79, or 6.2%, partially offset by a 3.3% decrease in consumption from the same period of the prior year. G&A expenses increased $367,000 primarily due to a favorable variance in bad debt expense recognized in the second quarter of 2002 resulting from cash collections on a significant retail account, which had been fully reserved. Other departmental operating costs increased primarily due to contractual wage increases. Depreciation expense increased $186,000 due to the completion of components of the Pittsburgh Post-Gazette facility upgrade project in 2003.

Television Broadcasting. Broadcasting operating expenses were $8.9 million, a decrease of $17,000, or 0.2%, from the same period of the prior year. The decrease results primarily from decreases in general and administrative and broadcast film amortization expense of $290,000 and $74,000, respectively, partially offset by increases in programming and sales expenses of $135,000 and $117,000, respectively.

Other Communications. Other communications operating expenses were $5.5 million, a decrease of $425,000, or 7.2%, from the same period of 2002. This variance is due to a decrease of $145,000, or 8.1%, in operating expenses related to security alarm system sales and monitoring caused by a decrease in sales volumes, as well as by cost control initiatives. Telecom operating expenses decreased $298,000, or 7.2%, due primarily to a decrease of $198,000 in long-distance expense.

Operating Income

Operating income ~~increased~~decreased $21.8 3 million as compared to the three months ~~ended~~ ~~September~~ended June 30, ~~2001~~2002. Cable operating income decreased $~~642~~35,000 due to increases in depreciation and ~~basic~~ cable programming expenses, partially offset by revenue growth generated from rate increases and rollout of new services. Publishing operating income ~~increased~~ decreased $1.5 6 million, primarily due to ~~newsprint~~decreases ~~savings and the implementation of an overall~~in advertising ~~expense~~revenue ~~reduction~~and ~~program,~~increased ~~offset~~operating byexpenses ~~decreases~~as indiscussed ~~advertising revenue~~above. ~~Broadcasting~~ Broadcasting operating income increased $~~1.7~~545,000 ~~million~~ due to ~~advertising~~increases ~~revenue growth~~ in ~~all~~ advertising ~~categories~~revenue and anflat ~~overall~~operating ~~expense reduction program~~expenses. Other communications operating income ~~increased~~was ~~$1.7~~consistent ~~million~~with ~~due~~the toprior ~~revenue growth from increased telephony sales and decreased operating expense~~year. Corporate general and administrative expenses increased $~~1.4~~252,000 ~~million~~ from the prior year due to increases in salary expense, professional fees, and amortization of deferred financing costs.

PART I. FINANCIAL INFORMATION
Management’s Discussion and Analysis of Financial Position and Results of Operations

Net Income

For the three months ended ~~September~~ June 30, ~~2002~~2003, the company reported a ~~net~~ loss from continuing operations of $~~3.4~~682,000, ~~million~~ compared to a loss from continuing operations of $6.4 6 million ~~net loss~~ reported for the ~~three~~same ~~months~~period ~~ended~~of ~~September~~ the ~~30,~~prior ~~2001~~year. This ~~The~~ decrease in ~~net~~the loss from continuing operations is primarily due to ~~the~~a ~~increase~~$9.0 million loss recognized in ~~operating~~the ~~income~~second ~~and~~quarter of 2002 related to the early extinguishment of debt, partially offset by a decrease in the credit for income taxes of $2.8 3 million, which reflects the tax benefit of the extinguishment loss. The variance from prior year also reflects a decrease in operating income and a $218,000 increase in the expense attributable to the change in fair value of interest rate swaps, partially offset by ~~the~~a ~~increase~~decrease in interest expense of $1621,000.~~3 million.~~

Effective May 31, 2003, the Company suspended operations of Community Communication Services, Inc. (CCS), an alternative advertising distribution company. Results of CCS are reported separately from results of continuing operations for all periods presented. Loss from discontinued operations net of tax decreased $111,000 from the prior year due to cost control measures and the discontinuation of operations in May. The Toledo Blade will fulfill the advertising needs of approximately 60% of CCS customers through the publishing group’s direct mail or total market delivery products.

As a result of the foregoing, the company reported a net loss of $898,000 for the three months ended June 30, 2003, as compared to a net loss of $6.9 million for the same period of the prior year.

Depreciation and Amortization

Depreciation and amortization increased $1.1 3 million, or 911.72%, as compared to the same period of the prior year. The increase was primarily due to asset additions resulting from the rebuild of our cable system in Toledo ~~and other capital expenditures to~~, accelerated ~~maintain~~depreciation ~~operating~~expense ~~assets,~~on ~~partially~~the ~~offset~~Erie byCounty ~~the~~system ~~effect~~and ofother ~~the non-amortization~~capital expenditures ~~provisions~~to ofmaintain ~~SFAS~~operating Noassets. ~~142, adopted in the current year.~~

EBITDA

EBITDA increased $~~2.4 million~~247,000, or 191.63%, as compared to the three months ended ~~September~~ June 30, ~~2001~~2002. ~~EBITDA~~A isreconciliation ~~defined~~of asEBITDA to net income ~~before~~is ~~interest~~provided ~~expense,~~above. EBITDA ~~provision~~as ~~for~~a ~~income~~percentage ~~taxes,~~ of ~~depreciation~~revenue ~~and~~for ~~amortization~~the ~~(including~~quarter ~~amortization~~ended ~~of broadcast rights)~~June 30, ~~other~~2003 decreased to ~~non-cash~~17.6% ~~charges,~~from ~~gains~~17.7% orfor ~~losses~~the onthree ~~disposition~~months ofended ~~assets~~June 30, ~~other~~2002. ~~non-recurring~~ The ~~items,~~decrease ~~and~~in EBITDA ~~extraordinary~~as ~~items~~a ~~and~~percentage ~~after~~of ~~payments~~revenue ~~for~~was ~~broadcast~~primarily ~~rights.~~due ~~EBITDA~~ to isthe ~~not~~increase ~~intended~~in publishing toand ~~replace~~cable operating ~~income (loss)~~expenses, ~~net~~partially ~~income~~offset ~~(loss),~~by ~~cash~~the ~~flow,~~continued rollout orof ~~other~~high ~~measures~~margin ofadvanced ~~financial~~cable ~~performance~~products and ~~liquidity~~overall ~~reported~~improvements in ~~accordance~~our telecom ~~with U~~operations.S. ~~generally~~Net ~~accepted~~loss ~~accounting principles. EBITDA~~ as a percentage of revenue ~~increased~~was ~~to 14~~0.48% inas ~~the~~of ~~three months ended September~~ June 30, ~~2002~~2003, ~~from~~as ~~12.3%~~compared into ~~the~~ net ~~same~~loss ~~period~~as ofa ~~the~~percentage ~~prior~~of ~~year.~~revenue ~~The~~at ~~increase~~June 30, in2002 of ~~EBITDA~~6.5%. ~~margin~~As ~~was~~discussed ~~primarily~~above, ~~due to~~ the ~~continued~~second ~~rollout~~quarter of ~~high~~ 2002 ~~margin~~included ~~advanced~~a ~~cable products, lower newsprint prices, efficiencies gained due to continued~~$5.8 million ~~growth~~loss inon ~~our~~early ~~telephony~~extinguishment ~~customer~~of ~~base~~debt, ~~and~~net ~~the implementation~~ of ~~overall expense reduction programs~~tax.

Six Months Ended June 30, 2003 Compared to Six Months Ended June 30, 2002

Revenues

Total revenues for the six month period ended June 30, 2003 were $209.1 million, an increase of $1.2 million, or 0.6%, as compared to the same period of the prior year. This increase was attributable to cable revenue and broadcasting advertising revenue, partially offset by decreases in publishing and other communications revenue as discussed below.

Cable Television. Cable revenue was $54.3 million, an increase of $3.9 million, or 7.8%, as compared to the same period of 2002. The increase in cable revenue was principally the result of an increase of $5.28, to $59.53, in the average monthly revenue per basic subscriber, based on the average number of subscribers throughout the period. An increase in the monthly basic cable service charge and continued rollout of new services drove the increase in average monthly revenue per subscriber. Average monthly high-speed data revenue per customer was $45.61, a decrease of $1.22, as compared to the first six months of 2002. This decrease is primarily due to digital packaging discounts offered as part of the aggressive digital marketing campaign launched during the third quarter of 2002. For the six months ended June 30, 2003, average monthly digital revenue per home was $14.85, a decrease of $1.56 as compared to the same period of the prior year. This decrease is due to a change in the composition of the digital subscriber base. At the start of the digital launch, the subscriber base consisted primarily of early adopters who, on average, purchased higher tiers of digital service, whereas later subscribers opted, on average, for lower tiers of service, thereby reducing per-subscriber revenue. This shift in the subscriber base is a result of the aggressive marketing campaign mentioned above.

PART I. FINANCIAL INFORMATION
Management’s Discussion and Analysis of Financial Position and Results of Operations

~~Nine~~ Revenue ~~Months~~generating ~~Ended~~units ~~September~~increased in the digital and high-speed data categories during the six months ended June 30, ~~2002~~2003. Net digital additions totaled ~~Compared~~6,886 tofor ~~Nine~~the ~~Months~~period, ~~Ended~~resulting ~~September~~in 32,978 digital homes as of June 30, 2003. ~~2001~~Net high-speed data additions totaled 3,056 for the period, resulting in 25,621 high-speed data customers. Basic subscribers at the end of the period totaled 151,353, a decrease of 1,039 basic subscribers in the six months ended June 30, 2003 due to an increase in non-pay disconnects and fewer installations in the Toledo system resulting from economic conditions offset by seasonal growth in the Erie County system.

~~Revenues~~ Newspaper Publishing. Publishing revenue was $123.6 million, a decrease of $2.6 million, or 2.0%, as compared to the same period of 2002. The decrease consisted of a $2.3 million, or 2.3%, decrease in advertising revenue due primarily to a decrease in retail and classified advertising of $1.8 million, or 3.6%, and $2.3 million, or 6.2%, respectively, resulting from continued economic softness. These decreases were partially offset by an increase in national advertising of $1.6 million, or 12.0%. For the first six months of 2003, circulation revenue decreased $315,000, or 1.3%, due to a decrease in single copy sales resulting from the impact of severe weather during the first quarter and continued economic softness. Other revenue, which consists of third party and total market delivery, was consistent with the same period of the previous year.

~~Total~~ Television ~~revenues~~ Broadcasting. ~~for~~Broadcasting ~~the~~revenue ~~nine-month~~was ~~period ended September 30~~$19.3 million, ~~2002~~an increase ~~increased~~of $~~7.5 million~~595,000, or 23.52%, as compared to the ~~nine~~six months ended ~~September~~ June 30, 2002. ~~2001,~~The toincrease ~~$311.6~~in ~~million~~broadcasting ~~from~~ revenue ~~$304.1~~was ~~million.~~due ~~This~~to an increase ~~was~~in ~~primarily~~local ~~attributable~~and national toadvertising ~~cable~~revenue of $632,000, ~~broadcast~~or 5.1%, and ~~telephony~~$159,000, ~~operations~~or 2.5%, respectively, partially offset by a decrease in ~~publishing~~political ~~revenues~~advertising ~~as discussed below~~of $170,000.

~~Cable~~ Other ~~Television~~Communications. ~~Cable~~ Other communications revenue was $7512.5 0 million, ana decrease ~~increase~~ of $~~9.6 million~~758,000, or ~~14.~~5.9%, as compared to ~~the~~ same period of the prior year. This ~~The~~is ~~increase~~due into ~~cable~~a ~~revenue~~decrease ~~was~~ in ~~principally~~our ~~the~~security ~~result~~system ofsales anrevenue ~~increase~~ of $~~8.17~~961,000, toresulting ~~$54.44,~~from a planned reduction in the ~~average~~growth ~~monthly~~ of ~~revenue~~our ~~per~~security business ~~basic~~with ~~subscriber,~~the ~~based~~intent onof ~~the~~improving ~~average~~operating ~~number~~margins ofand ~~subscribers~~controlling ~~throughout~~capital investments. Telecom revenue for the ~~period~~quarter was $9.0 million, Anan increase inof $201,000 ~~the~~due ~~monthly~~to ~~basic~~an ~~cable~~increase ~~service~~in ~~charge~~telecom ~~and~~switched ~~continued~~ services ~~rollout~~revenue of ~~new~~$514,000, partially ~~services~~offset ~~drove~~by ~~the~~a ~~increase~~planned decrease in ~~average~~long-distance ~~monthly~~ revenue ~~per~~of ~~subscriber~~$313,000. During ~~Average~~the ~~monthly~~first ~~high-speed~~six ~~data~~months ~~revenue~~of ~~per~~2003, ~~customer~~the ~~was~~telecom ~~$46.34,~~switched anservices ~~increase of~~revenue increased ~~$3.16~~due ~~as compared~~ to the ~~first~~net ~~nine~~addition ~~months~~ of ~~2001.~~63 ~~Since~~new ~~the~~telecom ~~launch~~customers, ofrepresenting ~~the digital~~an 11.0% ~~product~~increase in ~~fall~~the ofcustomer ~~2001~~base. Effective June 14, ~~average~~2003, ~~monthly~~an ~~digital~~incumbent carrier ~~revenue~~invoked ~~per~~the ~~home~~FCC ~~has~~order ~~grown~~on toreciprocal ~~$14~~compensation rate reduction.94 As a result, ~~for~~we ~~the~~expect ~~nine~~our ~~months~~telecom ~~ended~~operation ~~September~~to 30recognize a net reduction in monthly reciprocal compensation revenue of approximately $65,000 ~~2002~~from historical levels.

Revenue generating units increased in the digital and high-speed data categories during the nine months ended September 30, 2002. Net digital additions totaled 11,299 for the period, resulting in 19,674 digital homes as of September 30, 2002. Year-to-date net high-speed data additions totaled 7,655, resulting in 20,829 high-speed data customers as of September 30, 2002. Basic subscribers at the end of the period totaled 153,450, a decrease of 4,997 basic subscribers from the same period of the prior year. This is due to the decrease of 5,261 basic subscribers recognized upon consummation of the March 2002 like-kind exchange of Monroe Cablevision, as adjusted to reflect the independent appraisal report. The increase in cable revenue also reflects certain dial-up Internet customers that began to be serviced by our cable operations in 2002. During the nine months ended September 30, 2002, our cable segment reported $951,000 of revenue relating to these customers for whom 2001 revenues were included in the other communications segment.

Newspaper Publishing. Publishing revenue was $188.3 million, a decrease of $7.3 million, or 3.7%, as compared to the same period of 2001. The decrease consisted of a $7.0 million, or 4.5%, decrease in advertising revenue due to a decrease in classified advertising of $4.1 million, or 6.8%, resulting from continued softness in help-wanted advertising, as well as a decrease in local and national advertising of $578,000, or 0.7%, and $2.6 million, or 11.5%, respectively. The decrease in advertising revenue was due to the continued economic conditions that are generating lower advertising sales. Circulation and other revenue, which consists of third party and total market delivery, were consistent with same period of the prior year.

Television Broadcasting. Broadcasting revenue was $28.1 million, an increase of $2.5 million, or 9.5%, as compared to the nine months ended September 30, 2001. The increase in broadcasting revenue was due to an increase in all categories of advertising revenue, particularly in national and political advertising, with increases of $1.2 million and $1.1 million, respectively. Increases in net revenue were partially offset by a proportional increase in agency commissions.

Other Communications . Other communications revenue was $19.6 million, an increase of $2.8 million, or 16.6%, as compared to the same period of the prior year. The increase resulted from growth in telephony switched services revenue of $4.2 million (including an increase of $1.4 million in reciprocal compensation) resulting from growth in the telephony customer base. Since September 30, 2001, 128 new retail telephony customers have been added, representing a 27.6% increase. The growth in telephony revenue was partially offset by a reduction in revenue due to certain residential dial-up Internet customers now being serviced by our cable operations. Other communications results for the nine months ended September 30, 2001 included $915,000 of revenue relating to these Internet customers.

Operating Expenses

Operating expenses for the ~~nine~~first six months ~~ended September 30, 2002~~ were $~~299~~203.9 2 million, ~~a decrease~~an increase of $13.9 million, or 02.60%, as compared to the ~~nine~~first six months ~~ended~~of ~~September 30, 2001~~2002. The ~~decrease~~increase in operating expense was ~~largely~~ attributable to ~~decreased~~increased publishing, cable, ~~expenses~~broadcast, ~~which~~and ~~were~~corporate ~~partially~~general and administrative expenses, offset by decreased ~~increased~~other ~~cable~~communications expenses.

Cable Television. Cable operating expenses were $49.2 million, an increase of $4.0 million, or 8.9%, as compared to the same period of the prior year. The increase was primarily due to a $2.3 million, or 17.2%, increase in depreciation, to $15.6 million. This increase in depreciation is attributable to the capital expenditures associated with the rebuild of our Toledo cable system and continued rollout of cable modems and digital cable service. In addition, depreciation expense for the Erie County system has been accelerated in anticipation of a first quarter 2004 rebuild completion date. Basic cable programming expenses increased $760,000, or 6.7%, to $12.0 million, due to price increases from programming suppliers. Programming expense for the digital tier increased $470,000, due to an increase in the number of digital subscribers as compared to the same quarter of the prior year.

Newspaper Publishing. Publishing operating expenses were $123.1 million, an increase of $350,000, or 0.3%, from the six months ended June 30, 2002. The increase was due to increases in circulation, advertising and production expense of $241,000, $173,000 and $92,000, respectively, primarily due to contractual wage increases. These increases are partially offset by a decrease in newsprint expense of $353,000, or 2.4%, resulting from a 3.4% decrease in consumption from the same period of the prior year, partially offset by an increase in the weighted-average price per ton of $1.83, or 0.4%.

PART I. FINANCIAL INFORMATION
Management’s Discussion and Analysis of Financial Position and Results of Operations

~~Cable~~ Television Broadcasting. ~~Cable~~Broadcasting operating expenses were $6718.6 3 million, an increase of $~~11.4 million~~273, 000, or 201.35%, asfrom ~~compared to~~ the same period of the prior year. The increase ~~was~~results primarily ~~due~~from toincreases ain ~~$5.3 million~~programming, orsales ~~35.3%, increase in depreciation to $20.4 million. This~~and ~~increase in~~ depreciation isexpense ~~attributable to the capital expenditures associated with the rebuild~~ of ~~our Toledo cable system and continued rollout of cable modems and digital cable service. Basic cable programming expenses increased~~ $~~2.0 million~~288, 000, ~~or 13.7%~~$174,000 toand $~~16.7~~147,000 ~~million~~respectively, ~~due~~partially offset toby ~~price~~decreases ~~increases~~in ~~from~~general ~~programming suppliers. General~~ and administrative expenses ~~increased~~of $~~2.7 million~~293, ~~or 43~~000.~~9%,~~ ~~partially~~Other savings ~~due~~resulted tofrom ~~increased~~overall ~~personal~~cost ~~property~~control ~~taxes~~initiatives.

~~Newspaper~~ Other ~~Publishing~~Communications. ~~Publishing~~Other communications operating expenses were $~~183~~10.6 7 million, a decrease of $131.3 1 million, or 69.86%, from the same period of ~~2001~~2002. This ~~The~~variance ~~decrease~~is ~~was~~primarily ~~principally~~ due to a ~~$7.4~~decrease ~~million~~of $709,000, or 2517.14%, ~~decrease~~ in operating ~~newsprint~~expenses ~~and~~related ~~ink~~to ~~expense,~~security ~~resulting~~ alarm ~~from~~system asales ~~weighted-average~~and ~~price~~monitoring ~~per~~caused by ~~ton~~a decrease ofin ~~$144.61,~~sales ~~or 24.7%~~volumes, ~~and~~as awell ~~3.0%~~ as ~~decrease~~by incost ~~consumption~~control ~~from~~initiatives. Telecom ~~the~~operating ~~same~~expenses ~~period~~decreased of$454,000, ~~the~~or ~~prior year~~5.7%, ~~Additional~~due ~~savings~~ primarily ~~resulted~~to ~~from~~a decrease ~~overall~~of ~~cost~~$318,000 ~~controls~~in ~~and~~long-distance ~~headcount reductions~~expense.

Television Broadcasting. Broadcasting operating expenses were $26.6 million, a decrease of $901,000, or 3.3%, from the nine months ended September 30, 2001, partly due to a reduction in news department expenses of $426,000, or 10.0%. This decrease also reflects a reduction of $552,000 in expense related to amortization of intangibles due to implementation of SFAS No. 142 in the current year. Otherwise, operating expenses were held essentially flat due to general cost controls implemented to offset salary and inflationary costs.

Other Communications . Other communications operating expenses were $19.1 million, a decrease of $1.0 million, or 5.0%, from the same period of 2001. The decrease was due to a $931,000, or 13.4%, decrease in operating expenses relating to security alarm system sales and monitoring caused by a decrease in sales volumes, as well as by cost control initiatives.

Operating Income

Operating income ~~increased~~decreased $92.4 7 million as compared to the ~~same~~six ~~period~~months ended ofJune 30, ~~the prior year~~2002. Cable operating income decreased $~~1.8~~98,000 ~~million primarily~~ due to increases in depreciation and ~~basic~~ cable programming expenses, partially offset by revenue growth generated from rate increases and rollout of new services. Publishing operating income ~~increased~~ decreased $62.0 9 million, primarily due to ~~newsprint~~decreases ~~savings and the implementation of an overall~~in advertising ~~expense reduction program~~revenue. Broadcasting operating income increased $~~3.4~~322,000 ~~million~~due primarily ~~due~~ to ~~revenue~~increases ~~growth~~ in ~~all~~ advertising ~~categories and an overall expense reduction program~~revenue. Other communications operating income increased $~~3.8~~377,000 ~~million~~ due to revenue growth ~~from~~and ~~increased~~efficiencies ~~telephony~~recognized ~~sales~~in the telecom operations. Corporate general and administrative expenses increased $~~1.9~~380,000 ~~million~~ from the ~~same~~prior ~~period~~year ~~of 2001~~ due ~~primarily~~ to increases in salary expense, professional fees, and amortization of deferred financing costs.

Net Income

For the ~~nine~~ six months ended ~~September~~ June 30, ~~2002~~2003, the company reported ~~net~~a ~~income~~loss from continuing operations of $24.7 8 million , compared to aincome from continuing operations of $126.8 5 million ~~net loss~~ reported for the ~~nine~~same ~~months~~period ~~ended~~of ~~September~~ the ~~30,~~prior ~~2001~~year. The decrease ~~increase~~ in ~~net~~ income isfrom ~~due~~continuing tooperations ~~the~~is ~~increase~~primarily indue ~~operating~~to ~~income,~~ a $21.1 6 million gain recognized onin the first quarter of 2002 attributable to the like-kind exchange of Monroe Cablevision , ~~and~~partially offset by a $49.0 million loss ~~decrease~~recognized in the ~~expense~~second ~~attributable~~quarter toof ~~the~~2002 ~~change~~related into ~~fair~~the ~~value~~early extinguishment of ~~interest~~debt ~~rate~~and ~~swaps,~~the ~~partially~~tax ~~offset~~effect byof aboth $9transactions.0 ~~million~~The ~~loss~~variance from ~~related~~prior toyear ~~the~~also ~~early~~ reflects ~~extinguishment~~a ofdecrease ~~debt~~in operating income and a $2.5 million increase in the expense attributable to the change in fair value of interest rate swaps, partially offset by a decrease in interest expense of $422,000.

Effective May 31, 2003, the Company suspended operations of Community Communication Services, Inc. (CCS), as discussed above. Results of CCS are reported separately from results of continuing operations for all periods presented. Loss from discontinued operations net of tax decreased $144,000 from the prior year due to cost control measures and the discontinuation of operations in May.

As a result of the foregoing, the company reported a net loss of $5.1 million for the six months ended June 30, 2003, as compared to net income of $6.1 million for the same period of the prior year.

Depreciation and Amortization

Depreciation and amortization increased $32.0 9 million, or 912.01%, as compared to the same period of the prior year. The increase in depreciation expense was primarily due to asset additions resulting from the rebuild of our cable system in Toledo, accelerated depreciation expense on the Erie County system and other capital expenditures to maintain operating assets,. Amortization ~~partially~~expense ~~offset~~increased bydue to the ~~effect~~intangibles ofrecorded as a result of the ~~non~~like-~~amortization~~ kind ~~provisions~~exchange of ~~SFAS~~Monroe ~~No.~~Cablevision ~~142,~~and ~~adopted~~an increase in deferred costs relating to the ~~current~~2002 ~~year~~refinancing.

~~EBITDA~~24

EBITDA increased $11.8 million, or 32.9%, as compared to the nine months ended September 30, 2001. EBITDA is defined as net income before interest expense, provision for income taxes, depreciation and amortization (including amortization of broadcast rights), other non-cash charges, gains or losses on disposition of assets, other non-recurring charges, and extraordinary items and after payments for broadcast rights. EBITDA as a percentage of revenue increased to 15.3% in the first nine months of 2002, from 11.8% in the same period of the prior year. The increase in EBITDA margin was primarily due to the continued rollout of high margin advanced cable products, lower newsprint prices, efficiencies gained due to continued growth in our telephony customer base, and the implementation of overall expense reduction programs.

PART I. FINANCIAL INFORMATION
Management’s Discussion and Analysis of Financial Position and Results of Operations

EBITDA

EBITDA decreased $285,000, or 0.9%, as compared to the six months ended June 30, 2002. A reconciliation of EBITDA to net income is provided above. EBITDA as a percentage of revenue decreased to 15.5% in the six months ended June 30, 2003, from 15.7% in the same period of the prior year. The decrease in EBITDA as a percentage of revenue was primarily due to the reduction in publishing advertising revenue resulting from the economic conditions during 2003, offset by the continued rollout of high margin advanced cable products, the increase in cable service charges and overall improvements in our telecom operations. Net loss as a percentage of revenue was 2.4% for the six months ended June 30, 2003, as compared to net income as a percentage of revenue at June 30, 2002 of 2.9%. As discussed above, the first six months of 2002 included a $13.5 million gain, net of tax, related to the like-kind exchange and a $5.8 million loss, net of tax, on early extinguishment of debt.

Liquidity and Capital Resources

Historically, our primary sources of liquidity have been cash flow from operations and borrowings under our senior credit facilities. The need for liquidity arises primarily from capital expenditures and interest payable on the senior subordinated notes and the senior credit facility.

Net cash provided by operating activities was $2623.3 0 million and $2221.3 6 million for the ~~nine~~six months ended ~~September~~ June 30, ~~2002~~2003 and ~~September~~ June 30, ~~2001~~2002, respectively. The net cash provided by operating activities is determined by adding back depreciation and amortization, and adjusting for other non-cash items,. ~~including, for the nine months ended September~~Cash used ~~30, 2002, a $2.2 million loss resulting from the change~~ in ~~fair~~investing ~~value~~activities ofwas ~~interest rate swaps, a~~ $2124.1 2 million ~~gain attributable to the exchange of Monroe Cablevision, Inc.,~~ and a $21.~~7 million write off of deferred financing costs related to extinguished debt. Net cash provided by operating activities also reflects a $7.~~0 million ~~contribution~~ for to the ~~corporate~~six months ~~pension~~ended ~~plan.~~June 30, No2003 ~~contributions~~and ~~were~~June 30, ~~made~~2002, ~~in 2001~~respectively. Cash used in investing activities ~~was~~in ~~$21.5 million for~~ the ~~nine~~first six months ~~ended~~of ~~September 30,~~ 2002, ~~compared~~is toreduced by $4712.7 1 million of proceeds from the ~~same~~sale ~~period~~ of ~~the~~Monroe ~~prior year~~Cablevision. ~~Net~~The ~~cash used~~remaining increase in 2003 investing activities ~~for~~is ~~the~~due ~~nine months ended September 30, 2002 includes $12.7 million~~ to ~~payoff~~increase ~~cash advances on life insurance policies, offset by $12.1 million of proceeds received from Comcast Corp.~~ in ~~the~~capital expenditures ~~exchange~~discussed ~~of Monroe Cablevision, Inc~~below.

Our capital expenditures have historically been financed with cash flow from operations and borrowings under our senior credit facility. We made capital expenditures of $2123.0 5 million and $5213.0 6 million, including capital leases, for the ~~nine~~six months ended ~~September~~ June 30, ~~2002~~2003 and ~~September~~ June 30, ~~2001~~2002, respectively. Capital expenditures for the ~~nine~~ six months ended ~~September~~ June 30, ~~2001~~2003 were used primarily to begin the rebuild of the ~~Toledo~~Erie ~~cable~~County Cable system, continue the rebuild of the Bedford, MI system acquired from Comcast in the like-kind exchange, begin the first stages of the Pittsburgh Post-Gazette facility upgrade and maintain other operating assets. We expect to make capital ~~expenditures~~ expenditures of $1647.9 5 million in the last ~~quarter~~two quarters of ~~2002~~2003. These include the continued rollout of advanced cable services, continued rebuild of the Erie County cable system ~~acquired from Comcast~~, ~~conversion~~continuation of ~~two~~the ~~television~~Post-Gazette ~~stations~~production ~~to low power digital format in response~~facility upgrade ~~to FCC requirements,~~ and various other improvements to the publishing and broadcasting operations.

~~Financing~~ In April ~~activities~~2002, ~~provided~~we ~~$3.0~~issued $175 million of ~~cash~~9¼% ~~for~~senior ~~the~~subordinated notes. ~~nine~~The ~~months~~notes ~~ended~~are ~~September~~guaranteed ~~30,~~ on ~~2002,~~a ~~compared~~senior tosubordinated ~~$40.7~~basis ~~million~~by substantially ~~from~~all ~~the~~of ~~same~~our ~~period~~subsidiaries. ofThe ~~the~~proceeds ~~prior~~were ~~year.~~used ~~During~~to repay our existing ~~the~~senior ~~first~~term ~~half~~loan ofand ~~2002,~~senior wenotes ~~refinanced~~and ~~the~~to ~~entirety~~prepay a portion of our existing ~~previous~~senior ~~debt~~revolving ~~outstanding,~~ credit ~~resulting~~facility. inAs ~~new~~a ~~proceeds~~result, ofwe made $~~250~~19.0 million in ~~and~~optional ~~$10.8~~pre-payments ~~million~~on ofour ~~deferred~~long-term ~~finance~~ revolving ~~costs~~credit agreements. AtIn ~~September 30,~~ May 2002, ~~the~~we ~~balances~~entered ~~outstanding~~into ~~and available under our~~ new senior credit facilities ~~and~~totaling ~~subordinated notes were~~ $~~249~~200.8 0 million ~~and $112~~.4 The ~~million,~~proceeds ~~respectively,~~were ~~and~~used ~~the~~to ~~interest~~refinance ~~rate on~~ the remaining balance ~~outstanding~~of ~~was 8.06%. At September 30, 2001,~~ the ~~balances outstanding and available under our previous~~existing senior revolving credit facility and ~~senior~~capital ~~notes were $250~~expenditures.2 ~~million~~The ~~and~~new ~~$8 million, respectively,~~senior credit ~~and~~facilities ~~the~~are ~~interest~~guaranteed ~~rate~~by onsubstantially ~~the~~all ~~balance~~of ~~outstanding~~our ~~was~~present ~~7.26%.~~and ~~The~~future domestic ~~increase~~subsidiaries inand ~~the~~ are ~~effective~~collateralized ~~interest~~by ~~rate~~a ~~generated~~pledge anof ~~increase~~substantially inall of ~~interest~~our ~~expense~~and ofthe ~~$2.5~~guarantor ~~million,~~ subsidiaries’ ormaterial 17assets.~~6%.~~

In Financing ~~April~~activities ~~2002~~provided $5.8 million of cash for the six months ended June 30, 2003, compared to $4.4 million from the same period of the prior year. weThe ~~issued~~financing activities in the first six months of 2003 includes a $~~175~~10.0 million borrowing on the Term Loan A and a $3.6 million ofmandatory pre-payment ~~9¼%~~on the senior ~~subordinated~~credit ~~notes~~facilities due to $7.1 million Asof ~~noted~~excess ~~above,~~cash flow generated during the ~~proceeds~~year ~~were~~ended ~~used~~December 31, to2002. ~~repay~~The ~~our~~expiration ~~existing~~dates under ~~senior~~Term ~~term~~Loan ~~loan~~A ~~and~~required ~~senior~~draws ~~notes~~of ~~and~~$20.0 million prior to June 30, 2003, therefore ~~prepay~~the aunborrowed portion of ~~our~~$10.0 million ~~existing~~was ~~senior~~cancelled ~~revolving~~on ~~credit~~that ~~facility~~date. During Inthe ~~May~~first six months of 2002, financing activities reflect the complete refinancing wediscussed ~~entered~~above. ~~into~~At June 30, 2003, the balances outstanding and available under our new senior credit facilities ~~totaling~~and subordinated notes were $~~200~~255.0 7 million and $91.5 million, ~~The~~respectively, ~~proceeds~~ and ~~were~~the ~~used~~interest torate ~~refinance~~on the balance ~~remaining~~outstanding ~~balance~~was of7.26%. ~~the~~At ~~existing~~June 30, ~~senior~~2002, ~~revolving~~the ~~credit~~ balances ~~facility~~outstanding and available ~~will~~under beour ~~used~~senior tocredit ~~fund~~facility ~~future~~and ~~capital~~senior ~~expenditures.~~notes ~~The~~were ~~new~~$250.0 million and ~~senior~~$112.8 million, ~~credit~~ respectively, ~~facilities~~and ~~are~~the ~~guaranteed~~interest byrate ~~substantially~~on ~~all~~the ofbalance outstanding ~~our~~was ~~present~~8.03%. ~~and~~The ~~future~~decrease ~~domestic~~ in ~~subsidiaries~~the ~~and~~effective ~~are~~interest ~~collateralized~~rate partially offset by aan ~~pledge~~increase ofin ~~substantially~~the ~~all~~amount ofoutstanding ~~our~~generated ~~and~~an overall decrease in ~~the~~interest ~~guarantor~~expense ~~subsidiaries’~~of ~~material~~$422,000, ~~assets~~or 4.0%.

~~We believe~~25 ~~that funds generated from operations and the borrowing availability under our new~~ senior credit facilities will be sufficient to finance our current operations, our cash obligations in connection with the planned capital expenditures, and our current and future financial obligations.

PART I. FINANCIAL INFORMATION
Management’s Discussion and Analysis of Financial Position and Results of Operations

We believe that funds generated from operations and the borrowing availability under our new senior credit facilities will be sufficient to finance our current operations, our cash obligations in connection with the planned capital expenditures, and our current and future financial obligations.

Our labor agreements with the eight unions representing employees of The Blade expired in March 2003. Negotiations are continuing with these unions and we are hopeful that we will reach successor labor agreements with them. However, we can give no assurance that such agreements will be reached. In the event we are unsuccessful in reaching successor agreements, management will evaluate all alternatives available at that time.

Quantitative and Qualitative Disclosure About Market Risk

Our revolving credit and term loan agreements bear interest at floating rates. Accordingly, we are exposed to potential losses related to changes in interest rates. We do not enter into derivatives or other financial instruments for trading or speculative purposes; however, in order to manage our exposure to interest rate risk, we have entered into interest rate swaps. As of ~~September~~ June 30, ~~2002~~2003, our interest rate swap agreements expire in varying amounts through April 2009.

The fair ~~market~~ value of $7580.0 7 million of our long-term debt approximates its carrying value as it bears interest at floating rates. As of ~~September~~ June 30, ~~2002~~2003, the estimated fair value of our interest rate swap agreements was $~~423~~2.5 million,~~000,~~ which represents the amount required to enter into offsetting contracts with similar remaining maturities based on quoted market prices. This is reflected in our financial statements as other non-current assets. Changes in the fair value of derivative financial instruments are recognized either in income or as an adjustment to the carrying value of the underlying debt depending on whether the derivative financial instruments qualify for hedge accounting. At June 30, 2003, we had $175.0 million outstanding on our 9¼% senior subordinated notes, with a carrying value of $186.1 million, as adjusted for the fair value hedge.

As of ~~September~~ June 30, ~~2002~~2003, we had entered into interest rate swaps that approximated $~~221~~ 241.0 million, orincluding 88the effect of any offsetting swaps, or 94.43%, of our borrowings under all of our credit facilities. The interest rate swaps consist of $121.0 million relating to our revolving credit and term loan agreements, and $~~100~~175.0 million principal amount of the senior subordinated notes. In addition, we had entered into an interest rate swap agreement that has the economic effect of substantially offsetting $55.0 million ~~notional amount~~ of the swap agreements totaling $121.0 million ~~notional amount of the swap agreements~~. In the event of an increase in market interest rates, the change in interest expense would be dependent upon the ~~weighted~~ weighted average outstanding borrowings and derivative instruments in effect during the reporting period following the increase. Based on our ~~current~~ outstanding borrowings and interest rate swap ~~contracts~~agreements as of June 30, 2003, our exposure to interest rate risk is not material. A hypothetical 100 basis point increase in interest rates along the entire interest rate yield curve would increase our annual interest expense by approximately $147,000.

Recent Accounting Pronouncements

~~Effective~~ In ~~January~~June 1, 2001, ~~the Company adopted Statement of the Financial Accounting Standards (~~SFAS) No. ~~133~~ 143, Accounting for ~~Derivative~~Asset ~~Instruments~~Retirement ~~and~~Obligations, was ~~Hedging~~issued ~~Activities ,~~and asis ~~amended~~effective byfor ~~Statement~~fiscal ~~Nos.~~years ~~137~~beginning ~~and~~after ~~138~~June 15, ~~(collectively, SFAS No~~2002. The ~~133),~~pronouncement ~~which~~ requires ~~the~~legal ~~Company~~obligations toassociated ~~record~~with ~~all~~the ~~derivatives~~retirement onof long-lived ~~the~~assets ~~balance~~to ~~sheet~~be recognized at their fair value. Atat ~~September~~ the ~~30,~~time ~~2002,~~that the obligations ~~Company~~are ~~participates~~incurred. inUpon ~~nine~~initial ~~interest-rate~~recognition ~~swap~~of ~~contracts.~~a ~~One~~liability, ofthat cost should ~~these~~be ~~contracts~~capitalized isas ~~accounted~~part ~~for~~of asthe arelated ~~fair~~long-lived ~~value~~asset ~~hedge~~ and ~~therefore~~allocated ~~changes in~~to expense ~~the~~over ~~fair value of~~ the ~~derivative~~estimated ~~have~~useful nolife ~~impact~~of on the ~~Company’s results of operations~~asset. The ~~remaining~~adoption ~~contracts~~of ~~either do not qualify for hedge accounting~~this standard oron ~~the~~January 1, ~~Company~~2003 has ~~not~~had ~~elected~~no toimpact ~~implement~~on ~~hedge~~the ~~accounting.~~Company’s ~~Accordingly, a non-cash~~financial position ~~derivative~~or ~~valuation~~results ~~loss~~ of ~~$2,194,000~~operations ~~and~~for ~~$6,201,000 has been recognized during~~ the ~~nine-month~~six ~~periods~~months ended ~~September~~ June 30, ~~2002 and 2001, respectively~~2003.

~~Effective~~ In ~~January~~July 1, 2002, ~~the Company adopted~~ SFAS No. ~~141~~ 146, ~~Business~~Accounting ~~Combinations ,~~for ~~and~~Costs ~~SFAS~~Associated ~~No.~~with ~~142,~~Exit ~~Goodwill~~or Disposal ~~and~~Activities, ~~Other~~was ~~Intangible~~issued ~~Assets. Purchased goodwill~~ and ~~indefinite~~applies ~~lived~~to ~~intangible~~fiscal ~~assets~~years ~~are~~beginning ~~no longer amortized but reviewed annually~~after ~~for impairment~~December 31, or2002. ~~more~~SFAS ~~frequently~~No. 146 ifrequires ~~impairment~~certain ~~indicators~~costs ~~arise.~~associated ~~Intangible assets~~ with ~~lives restricted by contractual~~a restructuring, ~~legal~~discontinued operation or ~~other~~plant ~~means~~closing ~~will continue~~ to be ~~amortized~~recognized as incurred ~~over~~rather ~~their~~that ~~useful~~at ~~lives. During~~ the ~~nine-month~~date ~~period~~of ~~ended~~commitment ~~September~~to ~~30,~~an ~~2001,~~ exit ~~the~~or ~~Company~~disposal ~~recognized~~plan. The ~~$2,511,000~~adoption of ~~amortization~~this ~~expense~~standard ~~related~~on ~~to goodwill and indefinite-lived intangibles~~January 1, ~~resulting~~2003 inhas ahad ~~net~~no ~~loss~~impact ofon ~~$10,246,000 when adjusted~~the Company’s ~~for~~financial ~~the~~position ~~non-amortization~~or ~~provisions~~results of ~~SFAS~~operations ~~No.~~for ~~142. The Company has completed~~ the ~~initial~~six ~~impairment~~months ~~testing required by SFAS No. 142. No impairment charges~~ended June 30, ~~have been recognized based on the results of this testing~~2003.

~~Effective~~ In ~~January~~December 1, 2002, ~~the Company adopted~~ SFAS No. ~~144~~ 148, Accounting for ~~the Impairment~~Stock-Based Compensation—Transition orand ~~Disposal of Long-Lived Assets~~Disclosure, ~~which~~was ~~supersedes~~issued ~~SFAS~~and ~~No.~~provides ~~121, Accounting for~~alternative methods ~~the Impairment~~ of ~~Long-Lived~~transition ~~Assets and~~ for ~~Long-Lived~~a ~~Assets~~voluntary change to bethe ~~Disposed~~fair ~~Of,~~ value ~~and~~based ~~provides~~method ~~a single~~ of accounting ~~model~~ for ~~long~~stock-~~lived~~based ~~assets~~employee ~~to be disposed of~~compensation. The ~~adoption~~Company ofhas ~~this~~previously adopted ~~standard~~the ~~has~~fair ~~had~~value nomethod ~~effect~~of onaccounting ~~the~~for ~~Company’s~~stock-based ~~consolidated~~employee compensation; ~~results~~therefore ofall ~~operations~~years orpresented ~~financial~~reflect ~~position~~this ~~for~~method ~~the~~and ~~nine months ended September~~no pro-forma ~~30,~~disclosures ~~2002~~are required.

~~In April 2002,~~26 ~~SFAS No. 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB~~ Statement No. 13, and Technical Corrections, was issued and requires a gain or loss related to the extinguishment of debt to no longer be recorded as extraordinary item. The Company has elected early adoption as encouraged by SFAS No. 145, which would not otherwise require adoption until fiscal year 2003. As a result, losses on extinguishment of debt totaling $9.0 million are included in income from continuing operations at September 30, 2002.

In July 2002, SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities , was issued and applies to fiscal years beginning after December 31, 2002. The pronouncement requires certain costs associated with a restructuring, discontinued operation or plant closing to be recognized as incurred rather than at the date of commitment to an exit or disposal plan. The Company does not expect the adoption of this standard to significantly impact its financial position or results of operations.

PART I. FINANCIAL INFORMATION
Management’s Discussion and Analysis of Financial Position and Results of Operations

In November 2002, the Financial Accounting Standards Board issued Interpretation No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others. This Interpretation significantly changes previous practice in the accounting for and disclosure of guarantees. Guarantees meeting the characteristics described in the in the Interpretation are required to be initially recorded at fair value, which is different from the general current practice of recording a liability only when a loss is probable and can be reasonably estimated . The Interpretation’s initial recognition and initial measurement provisions are applicable on a prospective basis to guarantees issued or modified after December 31, 2002. The Interpretation also requires a guarantor to make significant new disclosures for virtually all guarantees even if the likelihood of the guarantor having to make payments under the guarantee is remote. The Interpretation’s disclosure requirements were effective for financial statements beginning in 2002. The Company does not currently guarantee indebtedness of any party outside of the consolidated group. Please refer to Note 6 for disclosures relating to guarantees within the consolidated group.

In January 2003, the Financial Accounting Standards Board issued interpretation No. 46, Consolidation of Variable Interest Entities, an interpretation of Accounting Research Bulletin No. 51 (FIN 46). FIN 46 requires consolidation of variable interest entities in which an enterprise absorbs a majority of the entity’s expected losses, receives a majority of the entity’s expected residual returns, or both, as a result of ownership, contractual or other financial interest in the entity. Currently, entities are generally consolidated by an enterprise that has a controlling financial interest through ownership or a majority voting interest in the entity. The adoption of FIN 46 has had no impact on the Company’s financial position or results of operations for the six months ended June 30, 2003.

Forward-Looking Statements

Certain statements contained herein may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from expectations contained in such statements.

Factors that may materially affect our future financial condition and results of of operations, as well as any forward-looking statements, include economic and ~~market~~ market conditions and many other factors beyond our control. For an additional ~~discussion~~ discussion of risk factors relating to our future financial condition and results of operations, reference is made to the discussion under the caption “Risk Factors” in the ~~Prospectus dated August 7, 2002 relating to the~~ Company’s ~~9.25%~~Annual ~~Senior~~ Report ~~Subordinated~~on ~~Notes~~Form 10-K ~~due~~dated ~~2009~~March 27, 2003.

PART I. FINANCIAL INFORMATION Item 4. Controls and procedures

The Managing Director and the Chief Financial Officer of the Company (its principal executive officer and principal financial officer, respectively) have concluded, based on their evaluation as of a date within 90 days prior to the date of the filing of this Report, that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports filed or submitted by it under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and include controls and procedures designed to ensure that information required to be disclosed by the Company in such reports is accumulated and communicated to the Company’s management, including the Managing Director and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

There were no significant changes in the Company’s internal controls or in other factors that could significantly affect these controls subsequent to the date of such evaluation.

PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K

	(a) Exhibits
		Exhibit 10.1 Amendment No. 1 dated September 12, 2002 to the Credit Agreement dated May 15, 2002 by and among the Company and Bank of America N.A., as Administrative Agent
		Exhibit 99.1 Certification of the Managing Director pursuant to 18 U.S.C. Sec. 1350.
		Exhibit 99.2 Certification of the Chief Financial Officer pursuant to 18 U.S.C. Sec. 1350.
	(b) No reports on Form 8-K were filed during the quarter ended September 30, 2002.

(a)

Exhibits

Exhibit 31.1 Certification of the Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 31.2 Certification of the Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 32.1 Certification of the Chief Executive Officer under Section 906 of the Sarbanes-Oxley Act of 2002

Exhibit 32.2 Certification of the Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002

(b)

Reports on Form 8-K filed in the second quarter of 2003:

Form 8-K filed on May 13, 2003 – The Company issued a press release announcing earnings results for the quarter ended March 31, 2003

Pursuant to the requirements 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.

			BLOCK COMMUNICATIONS, INC.(Registrant)
		BLOCK COMMUNICATIONS, INC.
	Date: November 14, 2002		By:	/s/ Allan Block
		(Registrant)
				Allan BlockManaging Director
Date: August 5, 2003		By:		/s/ Allan Block
	Date: November 14, 2002		By:	/s/ Gary J. Blair
				Allan Block
				Gary J. BlairExecutive Vice President /Chief Financial Officer
				Managing Director
Date: August 5, 2003		By:		/s/ Gary J. Blair
				Gary J. Blair
				Executive Vice President/
				Chief Financial Officer

~~Table of Contents~~30

Certification of the Managing Director

I, Allan Block, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Block Communications, Inc.;
2.	Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.	Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.	The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as definted in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
	a.	designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
	b.	evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and
	c.	presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5.	The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):
	a.	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
	b.	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and
6.	The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

/s/ Allan Block
Name:	Allan Block
Title:	Managing Director
Date:	November 14, 2002

Certification of the Chief Financial Officer

I, Gary Blair, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Block Communications, Inc.;
2.	Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.	Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.	The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as definted in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
	a.	designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
	b.	evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and
	c.	presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5.	The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):
	d.	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
	e.	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and
6.	The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

/s/ Gary J. Blair
Name:	Gary Blair
Title:	Executive Vice-President / Chief Financial Officer
Date:	November 14, 2002

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