10-Q

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-Q

þ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2006

o Transition Report Under Section 13 or 15(d) of the Exchange Act

For the transition period from                      to                     

Commission File Number 0-22439

FISHER COMMUNICATIONS, INC.

(Exact Name of Registrant as Specified in Its Charter)

WASHINGTON	91-0222175
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)

100 Fourth Ave. N., Suite 510
Seattle, Washington 98109
(Address of Principal Executive Offices) (Zip Code)

(206) 404-7000
(Registrant’s Telephone Number, Including Area Code)

     Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o       Accelerated filer þ       Non-accelerated filer o

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

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

Common Stock, $1.25 par value, outstanding as of May 1, 2006: 8,709,841

PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
The following Condensed Consolidated Financial Statements (unaudited) are presented for the Registrant, Fisher Communications, Inc., and its subsidiaries.
1.	Condensed Consolidated Statements of Operations:
	Three months ended March 31, 2006 and 2005
2.	Condensed Consolidated Balance Sheets:
	March 31, 2006 and December 31, 2005
3.	Condensed Consolidated Statements of Cash Flows:
	Three months ended March 31, 2006 and 2005
4.	Condensed Consolidated Statements of Comprehensive Income:
	Three months ended March 31, 2006 and 2005
5.	Notes to Condensed Consolidated Financial Statements
Item 2. Management’s Discussion and Analysis of Financial Position and Results of Operations
Item 3. Quantitative and Qualitative Disclosures about Market Risks
Item 4. Controls and Procedures
PART II OTHER INFORMATION
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits
SIGNATURES
EXHIBIT INDEX
EXHIBIT 31.1
EXHIBIT 31.2
EXHIBIT 32.1
EXHIBIT 32.2

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ITEM 1 — FINANCIAL STATEMENTS

FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three months ended
	March 31
	2006			2005
(in thousands, except per-share amounts)
(Unaudited)
Revenue	$	33,828		$	30,957
Costs and expenses
Cost of services sold (exclusive of depreciation reported separately below, amounting to $2,133 and $3,486, respectively)		15,740			16,623
Selling expenses		6,638			5,878
General and administrative expenses		8,623			9,875
Depreciation and amortization		2,582			4,129
		33,583			36,505
Income (loss) from operations		245			(5,548	)
Other income, net		898			850
Interest expense		(3,454	)		(3,371	)
Loss before income taxes		(2,311	)		(8,069	)
Benefit for federal and state income taxes		(610	)		(3,001	)
Net loss	$	(1,701	)	$	(5,068	)
Basic and diluted net loss per share	$	(0.20	)	$	(0.59	)
Shares used in computation of basic and diluted net loss per share		8,706			8,625

See accompanying notes to condensed consolidated financial statements.

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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31			December 31
	2006			2005
(in thousands, except share and per-share amounts)
(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	15,457		$	19,622
Receivables, net		24,440			28,166
Income taxes receivable		986			986
Deferred income taxes		923			665
Prepaid expenses		5,347			4,295
Television and radio broadcast rights		5,587			6,519
Total current assets		52,740			60,253
Marketable securities, at market value		151,201			170,053
Cash value of life insurance and retirement deposits		15,563			15,303
Television and radio broadcast rights		2,046			2,075
Goodwill, net		38,354			38,354
Intangible assets		1,244			1,244
Investment in equity investee		2,748			2,759
Prepaid financing fees and other assets		6,070			6,040
Property, plant and equipment, net		143,667			144,312
Total Assets	$	413,633		$	440,393
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Trade accounts payable	$	2,645		$	3,483
Accrued payroll and related benefits		6,826			7,355
Interest payable		539			3,809
Television and radio broadcast rights payable		3,372			5,524
Other current liabilities		5,270			4,520
Total current liabilities		18,652			24,691
Long-term debt		150,000			150,000
Accrued retirement benefits		19,682			19,644
Deferred income taxes		24,419			31,381
Other liabilities		4,883			5,056
Commitments and Contingencies
Stockholders’ Equity
Common stock, shares authorized 12,000,000, $1.25 par value; issued and outstanding 8,709,841 as of March 31, 2006 and 8,705,041 as of December 31, 2005		10,887			10,881
Capital in excess of par		8,756			8,590
Deferred compensation					(159	)
Accumulated other comprehensive income, net of income taxes:
Unrealized gain on marketable securities		97,346			109,600
Minimum pension liability		(2,172	)		(2,172	)
Retained earnings		81,180			82,881
Total Stockholders’ Equity		195,997			209,621
Total Liabilities and Stockholders’ Equity	$	413,633		$	440,393

See accompanying notes to condensed consolidated financial statements.

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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Threee months ended
	March 31
	2006			2005
(in thousands)
(Unaudited)
Cash flows from operating activities
Net loss	$	(1,701	)	$	(5,068	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization		2,582			4,129
Deferred income taxes		(621	)		(2,855	)
Equity in operations of equity investees		11			3
Amortization of deferred loan costs		158			164
Amortization of television and radio broadcast rights		2,271			2,956
Payments for television and radio broadcast rights		(3,463	)		(4,096	)
Other		164			512
Change in operating assets and liabilities
Receivables		3,726			3,908
Prepaid expenses		(1,052	)		(1,037	)
Cash value of life insurance and retirement deposits		(260	)		490
Other assets		(188	)		(58	)
Trade accounts payable, accrued payroll and related benefits, interest payable, and other current liabilities		(3,887	)		(4,358	)
Income taxes receivable and payable					(306	)
Accrued retirement benefits		38			204
Other liabilities		(170	)		126
Net cash used in operating activities		(2,392	)		(5,286	)
Cash flows from investing activities
Proceeds from collection of notes receivable					1,000
Purchase of property, plant and equipment		(1,960	)		(2,238	)
Net cash used in investing activities		(1,960	)		(1,238	)
Cash flows from financing activities
Payments under notes payable					(9	)
Payment of deferred loan costs					(85	)
Proceeds from exercise of stock options		177			2,420
Excess tax benefit from exercise of stock options		10
Net cash provided by financing activities		187			2,326
Net decrease in cash and cash equivalents		(4,165	)		(4,198	)
Cash and cash equivalents, beginning of period		19,622			16,025
Cash and cash equivalents, end of period	$	15,457		$	11,827

See accompanying notes to condensed consolidated financial statements.

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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Three months ended
	March 31
	2006			2005
(in thousands)
(Unaudited)
Net loss	$	(1,701	)	$	(5,068	)
Other comprehensive loss:
Unrealized loss on marketable securities		(18,852	)		(10,596	)
Effect of income taxes		6,598			3,708
Other comprehensive loss		(12,254	)		(6,888	)
Comprehensive loss	$	(13,955	)	$	(11,956	)

See accompanying notes to condensed consolidated financial statements.

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FISHER COMMUNICATIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

The unaudited financial information furnished herein, in the opinion of management, reflects all adjustments which are necessary to state fairly the consolidated financial position, results of operations, and cash flows of Fisher Communications, Inc. and its consolidated subsidiaries (the “Company”) as of and for the periods indicated. Any adjustments are of a normal recurring nature. Fisher Communications, Inc.’s principal wholly owned subsidiaries include Fisher Broadcasting Company and Fisher Media Services Company. The Company presumes that users of the interim financial information herein have read or have access to the Company’s audited consolidated financial statements and that the adequacy of additional disclosure needed for a fair presentation, except in regard to material contingencies or recent subsequent events, may be determined in that context. Accordingly, footnote and other disclosures which would substantially duplicate the disclosures contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005 filed by the Company have been omitted. The financial information herein is not necessarily representative of a full year’s operations.

2. Summary of Significant Accounting Policies

The significant accounting policies used in preparation of the consolidated financial statements are disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005. Additional significant accounting policies for 2006 are disclosed below.

     Stock-based Compensation

On January 1, 2006, the Company adopted Statement of Financial Accounting Standards (“SFAS”) No. 123 (Revised), “Share-Based Payment,” (“SFAS 123(R)”) which requires the measurement and recognition of compensation for all stock-based awards made to employees, including stock options and restricted stock rights, based on estimated fair values. SFAS 123(R) supersedes previous accounting under Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” (“APB 25”) for periods beginning in 2006.

The Company adopted SFAS 123(R) using the modified prospective transition method, which requires the application of the accounting standard as of January 1, 2006. In accordance with the modified prospective transition method, the Company’s condensed consolidated financial statements for periods prior to the first quarter of 2006 have not been restated to reflect this change. Stock-based compensation recognized under the new standard is based on the value of the portion of the stock-based award that vests during the period, adjusted for expected forfeitures. Stock-based compensation recognized in the Company’s condensed consolidated financial statements for the first quarter of 2006 includes compensation cost for stock-based awards granted prior to, but not fully vested as of, December 31, 2005, and stock-based awards granted subsequent to December 31, 2005.

The compensation cost for awards granted prior to December 31, 2005 is based on the grant-date fair value estimated in accordance with the pro forma provisions of SFAS 123, while awards granted after December 31, 2005 follow the provisions of SFAS 123(R). Compensation cost for awards granted prior to December 31, 2005 is recognized on a straight-line basis over the requisite service period for each separately remaining vesting portion of the award, while compensation cost for awards granted after December 31, 2005 is recognized on a straight-line basis over the requisite service period for the entire award.

Upon adoption of SFAS 123(R), the Company continued to use the Black-Scholes option pricing model as its method of valuation for stock option awards. The Company’s determination of the fair value of stock option awards

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on the date of grant using an option pricing model is affected by the Company’s stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, the expected life of the award, the Company’s expected stock price volatility over the term of the award and actual and projected exercise behaviors. Although the fair value of stock option awards is determined in accordance with SFAS 123(R), the Black-Scholes option pricing model requires the input of subjective assumptions, and other reasonable assumptions could provide differing results.

3. Recent Accounting Pronouncements

In February 2006, the FASB issued Statement of Financial Accounting Standard No. 155, “Accounting for Certain Hybrid Instruments,” which is an amendment of FASB Statements No. 133 and 140. The statement is effective for all financial instruments acquired or issued after the beginning of an entity’s first fiscal year that begins after September 15, 2006. The Company does not anticipate that this standard will impact its financial statements.

4. Television and Radio Broadcast Rights and Other Broadcast Commitments

The Company acquires television and radio broadcast rights, and may make commitments for program rights where the cost exceeds the projected direct revenue from the program. The impact of such contracts on the Company’s overall financial results is dependent on a number of factors, including popularity of the program, increased competition from other programming, and strength of the advertising market. Estimates of future revenue can change significantly and, accordingly, are reviewed periodically to determine whether impairment is expected over the life of the contract.

At March 31, 2006, the Company had commitments under license agreements amounting to $52.7 million for future rights to broadcast television and radio programs through 2011, and $6.2 million in related fees. As these programs will not be available for broadcast until after March 31, 2006, they have been excluded from the financial statements in accordance with provisions of SFAS No. 63, “Financial Reporting by Broadcasters.” In 2002, the broadcasting subsidiary acquired exclusive rights to sell available advertising time for a radio station in Seattle (the “Joint Sales Agreement”). Under the Joint Sales Agreement, the broadcasting subsidiary has commitments for monthly payments totaling $5.1 million through 2007.

5. Retirement Benefits

The Company has a noncontributory supplemental retirement program for key management. No new participants have been admitted to this program since 2001. The program provides for vesting of benefits under certain circumstances. Funding is not required, but generally the Company has acquired annuity contracts and life insurance on the lives of the individual participants to assist in payment of retirement benefits. The Company is the owner and beneficiary of such policies; accordingly, the cash values of the policies as well as the accrued liability are reported in the financial statements. The program requires continued employment through the date of expected retirement. The cost of the program is accrued over the participants’ remaining years of service at the Company.

In June 2005, the program was amended to freeze the accrual of all benefits to active participants provided under the program. As a result, the Company recorded a charge of $451,000 in the second quarter of 2005 as a curtailment loss associated with an unrecognized transition obligation that was required to be recognized at the effective date of the program amendment. The Company will continue to recognize periodic pension cost related to the program, but the amount is expected to be lower as a result of the curtailment as there is no future service cost component. The curtailment loss was calculated based on a current discount rate of 5.02% and no future compensation increases. The program amendment in June 2005 resulted in a decrease of the Company’s projected benefit obligation of $597,000. Pursuant to the provisions of SFAS No. 88, “Employers’ Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits,” this gain was netted against unrecognized actuarial losses resulting in no impact in the Company’s Consolidated Statement of Operations.

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The net periodic pension cost for the Company’s supplemental retirement program is as follows (in thousands):

	Three months ended
	March 31
	2006		2005
Service cost	$	—	$	40
Interest cost		260		267
Amortization of loss		38		87
Net periodic pension cost	$	298	$	394

Assumptions used to determine net periodic pension costs are as follows:

	2006			2005
Discount Rate		5.48	%		5.74	%
Rate of Compensation increase		—			3.00	%

6. Income (loss) Per Share

Net income (loss) per share represents net income (loss) divided by the weighted average number of shares outstanding during the period. Net income (loss) per share assuming dilution represents net income (loss) divided by the weighted average number of shares outstanding, including the potentially dilutive impact of stock options and restricted stock rights issued under the Company’s incentive plans. Common stock options and restricted stock rights are converted using the treasury stock method.

The weighted average number of shares outstanding for the three months ended March 31, 2006 was 8,706,035. The dilutive effect of 10,400 restricted stock rights and options to purchase 267,825 shares are excluded for the three-month period ended March 31, 2006, because such rights and options were anti-dilutive due to the net loss for the period; therefore, there is no difference in the calculation between basic and diluted per-share amounts.

The weighted average number of shares outstanding for the three months ended March 31, 2005 was 8,625,102. The dilutive effect of 60 restricted stock rights and options to purchase 443,217 shares are excluded for the three month period ended March 31, 2005, because such rights and options were anti-dilutive due to the net loss for the period; therefore, there is no difference in the calculation between basic and diluted per-share amounts.

7. Stock-Based Compensation

Effective January 1, 2006, the Company adopted SFAS 123(R), which establishes accounting for stock-based awards exchanged for employee services, using the modified prospective application transition method. Accordingly, stock-based compensation cost is measured at grant date, based on the fair value of the award, and recognized over the requisite service period. Previously, the Company applied APB 25 and related Interpretations, as permitted by SFAS 123.

The Company maintains two incentive plans (the “Plans”), the Amended and Restated Fisher Communications Incentive Plan of 1995 (the “1995 Plan”) and the Fisher Communications Incentive Plan of 2001 (the “2001 Plan”). The 1995 Plan provided that up to 560,000 shares of the Company’s common stock could be issued to eligible key management employees pursuant to options and rights through 2002. The Company issues new shares of common

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stock upon option exercise or rights vesting. As of March 31, 2006 options and rights for 191,000 shares, net of forfeitures, had been issued. No further options and rights will be issued pursuant to the 1995 Plan. The 2001 Plan provides that up to 600,000 shares of the Company’s common stock may be issued to eligible key management employees pursuant to options and rights through 2008. As of March 31, 2006 options and rights for 268,000 shares had been issued, net of forfeitures.

Stock options The Plans provide that eligible key management employees may be granted options to purchase the Company’s common stock at the fair market value on the date the options are granted. The options generally vest over five years and generally expire ten years from the date of grant. Non-cash compensation expense of $121,000 ($79,000 after-tax) related to the options was recorded during the first quarter of 2006. During the first quarter of 2005, the vesting on certain previously granted options was accelerated as part of a separation agreement with the Company’s former chief executive officer; as a result, the Company recognized non-cash compensation expense of $303,000 ($197,000 after-tax).

Restricted stock rights The Plans also provide that eligible key management employees may be granted restricted stock rights which entitle such employees to receive a stated number of shares of the Company’s common stock. The rights generally vest over five years and expire upon termination of employment. Non-cash compensation expense of $22,000 ($14,000 after-tax) related to the rights was recorded during the first quarter of 2006. No compensation expense related to restricted stock rights was recorded during the first quarter of 2005.

     Determining Fair Value Under SFAS 123(R)

Valuation and Amortization Method. The Company estimates the fair value of stock option awards granted using the Black-Scholes option valuation model. The Company amortizes the fair value of all awards on a straight-line basis over the requisite service periods, which are generally the vesting periods.

Expected Life. The expected life of awards granted represents the period of time that they are expected to be outstanding. The Company determines the expected life based primarily on historical experience with similar awards, giving consideration to the contractual terms, vesting schedules, expected exercises and post-vesting forfeitures. Stock options granted by the Company generally vest 20% per year over five years and have contractual terms of ten years.

Expected Volatility. The Company estimates the volatility of its common stock at the date of grant based on the historical volatility of its common stock. The volatility factor the Company uses in the Black-Scholes option valuation model is based on its historical stock prices over the most recent period commensurate with the estimated expected life of the award.

Risk-Free Interest Rate. The Company bases the risk-free interest rate used in the Black-Scholes option valuation model on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent remaining term equal to the expected life of the award.

Expected Dividend Yield. The Company uses an expected dividend yield of zero in the Black-Scholes option valuation model, consistent with the Company’s recent experience.

Expected Forfeitures. The Company primarily uses historical data to estimate pre-vesting option forfeitures. The Company records stock-based compensation only for those awards that are expected to vest.

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The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model. A summary of the weighted average assumptions and results for options granted during the periods presented is as follows:

	Three months ended March 31
	2006			2005
Assumptions:
Weighted average risk-free interest rate		4.8	%		4.1	%
Expected dividend yield		0	%		0	%
Expected volatility		33	%		31	%
Expected life of options	6 years			6 years
Weighted average fair value at date of grant	$	17.57		$	19.74

     Stock-based Compensation Under SFAS 123(R)

Stock-based compensation expense related to stock-based awards under SFAS 123(R) for the three months ended March 31, 2006 totalled $143,000, which is included in general and administrative expenses in the Company’s Condensed Consolidated Statement of Operations.

As of March 31, 2006, the Company had approximately $1.5 million of total unrecognized compensation cost related to non-vested stock-based awards granted under all equity compensation plans. Total unrecognized compensation cost will be adjusted for any future changes in estimated forfeitures. The Company expects to recognize this cost over a period of five years (or a weighted average period of 1.8 years). A greater percentage of the stock-based compensation expense is recognized in the first few years due to the prior method under APB 25 for which compensation cost is recognized on a straight-line basis over the requisite service period for each separately vesting portion of the award, while compensation cost for awards granted after December 31, 2005 is recognized on a straight-line basis over the requisite service period for the entire award.

The following table presents the impact of the Company’s adoption of SFAS 123(R) on selected line items from our condensed consolidated financial statements for the three months ended March 31, 2006 (in thousands, except per share amounts):

Condensed consolidated statement of operations:
Decrease in income from operations	$	(121	)
Increase in loss before income taxes		(121	)
Increase in net loss		(79	)
Increase in basic and diluted net loss per share		(0.01	)
Condensed consolidated statement of cash flows:
Increase in net cash used in operating activities		(10	)
Increase in net cash provided by financing activities		10

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     Stock Award Activity

A summary of stock options and restricted stock rights is as follows:

	Stock Options								Restricted Stock Rights
				Weighted		Weighted
				Average		Average					Weighted
				Exercise		Remaining	Aggregate				Average
	Number			Price Per		Contractual	Intrinsic		Number		Grant-Date
	of Shares			Share		Life	Value		of Shares		Fair Value
Outstanding at December 31, 2005		275,430		$	52.88					4,000	$	46.89
Options and stock rights granted		39,100			42.70					6,400		42.70
Options exercised/stock rights vested		(4,800	)		36.86
Options expired		(4,000	)		37.25
Options and stock rights forfeited		(37,905	)		53.23
Outstanding at March 31, 2006		267,825		$	51.92	6.2 years	$	262,000		10,400	$	44.31
Exercisable at March 31, 2006		158,775		$	55.74	4.4 years	$	145,000

The aggregate intrinsic value of options outstanding at March 31, 2006 is calculated as the difference between the market price of the underlying common stock and the exercise price of the options for the 62,100 options that had exercise prices that were lower than the $44.75 closing market price of the Company’s common stock at March 31, 2006.

The total intrinsic value of options exercised during the three months ended March 31, 2006 and 2005 was $29,000 and $742,000, respectively, determined as of the date of exercise. No restricted stock rights vested during the three months ended March 31, 2006. During the three months ended March 31, 2005, 60 restricted stock rights vested, with a total fair value of $3,000.

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     Pro Forma Information Under SFAS 123 and APB 25

Prior to fiscal 2006, stock-based compensation plans were accounted for using the intrinsic value method prescribed in APB 25 and related Interpretations. Had compensation cost for the plans been determined based on the fair value at the grant dates for awards under those plans consistent with the method of SFAS 123, the Company’s net loss and basic and diluted net loss per share would have been changed to the pro forma amounts indicated below (in thousands, except for per share data):

	Three months
	ended March 31,
	2005
Net loss, as reported	$	(5,068	)
Add: stock-based compensation included in net loss, net of tax		197
Deduct: total stock-based compensation determined under fair value based method for all awards, net of tax		(22	)
Pro forma net loss	$	(4,893	)
Basic and diluted net loss per share:
As reported	$	(0.59	)
Pro forma	$	(0.57	)

8. Segment Information

The Company reports financial data for three reportable segments: television, radio, and Fisher Plaza. The television reportable segment includes the operations of the Company’s nine network-affiliated television stations, and a 50% interest in a company that owns a tenth television station. The radio reportable segment includes the operations of the Company’s 27 radio stations. Corporate expenses of the broadcasting business unit are allocated to the television and radio reportable segments based on a ratio that approximates historic revenue and operating expenses of the segments. The Fisher Plaza reportable segment includes the operations of a communications center located near downtown Seattle that serves as home of the Company’s Seattle television and radio operations, the Company’s corporate offices, and third-party tenants.

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Revenue for each reportable segment is as follows (in thousands):

	Three Months
	Ended March 31
	2006			2005
Television	$	22,859		$	20,826
Radio		8,838			8,265
Fisher Plaza		2,164			1,918
Corporate and eliminations		(33	)		(52	)
	$	33,828		$	30,957

Income (loss) before interest and income taxes for each reportable segment is as follows (in thousands):

	Three months
	ended March 31
	2006			2005
Television	$	2,599		$	(1,051	)
Radio		(256	)		(917	)
Fisher Plaza		510			(76	)
Corporate and eliminations		(1,710	)		(2,654	)
	$	1,143		$	(4,698	)

The following table reconciles total segment income (loss) before interest and income taxes shown above to consolidated loss before income taxes (in thousands):

	Three months
	ended March 31
	2006			2005
Total segment income (loss) before interest and income taxes	$	1,143		$	(4,698	)
Interest expense		(3,454	)		(3,371	)
	$	(2,311	)	$	(8,069	)

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Identifiable assets for each reportable segment are as follows (in thousands):

	March 31,		December 31,
	2006		2005
Total assets
Television	$	84,365	$	92,543
Radio		42,285		41,487
Fisher Plaza		117,757		118,611
Corporate and eliminations		169,226		187,752
	$	413,633	$	440,393

Identifiable assets by reportable segment are those assets used in the operations of each segment. Corporate assets are principally marketable securities.

9. Commitments

In December 2005, the Company announced that it signed an agreement to purchase a full-power television station and a low-power television station in the Portland, Oregon DMA (“Portland Stations”), as well as low-power television stations and construction permits in certain Idaho communities (“Idaho Stations”). The purchase price of $20.3 million may be paid through the use of existing cash and the use of the Company’s $20 million revolving line of credit. As of March 31, 2006, a deposit of $1.0 million was held in escrow on this transaction and is included in prepaid expenses in the Consolidated Balance Sheet. In May 2006, the Company signed an amendment to the agreement that provides for the closing of the purchase of the Idaho Stations by May 15, 2006, extends the closing date of the Portland Stations, and requires the parties to negotiate toward establishing a joint sales agreement (“JSA”) for the Portland Stations until closing. As a result of the amendment, the Company paid a $3.5 million non-refundable fee for the contract extension (which amount will be applied to the purchase price at closing), and further agreed to pay $500,000 in prepaid JSA fees upon establishing the JSA structure (any amount not applied to JSA fees is applied to the purchase price at closing).

10. Financial Information for Guarantors

On September 20, 2004, the Company completed an offering of $150.0 million of 8.625% senior notes due 2014. The notes are unconditionally guaranteed, jointly and severally, on an unsecured, senior basis by the wholly owned subsidiaries of the Company.

Presented below are condensed consolidated statements of operations and cash flows for the three months ended March 31, 2006 and 2005 and the condensed consolidated balance sheets as of March 31, 2006 and December 31, 2005. The condensed consolidated information is presented for the Company (issuer) with its investments accounted for under the equity method, the wholly owned guarantor subsidiaries, eliminations, and the Company on a consolidated basis. The Company (issuer) information consists primarily of corporate oversight and administrative personnel and related activities, as well as certain investments in marketable securities.

15

Financial Information for Guarantors
Condensed Consolidated Statement of Operations
for the three months ended March 31, 2006

				Wholly						Fisher
	Fisher			Owned						Communications,
	Communications,			Guarantor						Inc. and
	Inc.			Subsidiaries			Eliminations			Subsidiaries
(in thousands)
Revenue	$			$	33,880		$	(52	)	$	33,828
Costs and expenses
Cost of services sold					15,329			411			15,740
Selling expenses					6,638						6,638
General and administrative expenses		2,441			6,645			(463	)		8,623
Depreciation and amortization		62			2,520						2,582
		2,503			31,132			(52	)		33,583
Income (loss) from operations		(2,503	)		2,748			—			245
Other income, net		787			111						898
Equity in income of subsidiaries		1,818						(1,818	)		—
Interest expense		(3,451	)		(3	)					(3,454	)
Income (loss) before income taxes		(3,349	)		2,856			(1,818	)		(2,311	)
Provision (benefit) for federal and state income taxes		(1,648	)		1,038						(610	)
Net income (loss)	$	(1,701	)	$	1,818		$	(1,818	)	$	(1,701	)

16

Financial Information for Guarantors
Condensed Consolidated Statement of Operations
for the three months ended March 31, 2005

				Wholly						Fisher
	Fisher			Owned						Communications,
	Communications,			Guarantor						Inc. and
	Inc.			Subsidiaries			Eliminations			Subsidiaries
(in thousands)
Revenue	$			$	31,015		$	(58	)	$	30,957
Costs and expenses
Cost of services sold					16,230			393			16,623
Selling expenses					5,878						5,878
General and administrative expenses		3,438			6,888			(451	)		9,875
Depreciation and amortization		69			4,060						4,129
		3,507			33,056			(58	)		36,505
Loss from operations		(3,507	)		(2,041	)		—			(5,548	)
Other income, net		670			180						850
Equity in income of subsidiaries		(1,196	)					1,196			—
Interest expense		(3,371	)								(3,371	)
Loss before income taxes		(7,404	)		(1,861	)		1,196			(8,069	)
Benefit for federal and state income taxes		(2,336	)		(665	)					(3,001	)
Net loss	$	(5,068	)	$	(1,196	)	$	1,196		$	(5,068	)

17

Financial Information for Guarantors
Condensed Consolidated Balance Sheet
as of March 31, 2006

				Wholly					Fisher
	Fisher			Owned					Communications,
	Communications,			Guarantor					Inc. and
	Inc.			Subsidiaries		Eliminations			Subsidiaries
(in thousands)
ASSETS
Current Assets
Cash and cash equivalents	$	3,728		$	11,729	$			$	15,457
Receivables, net		141			24,299					24,440
Due from affiliate					2,014		(2,014	)		—
Income taxes receivable		1,538					(552	)		986
Deferred income taxes		73			850					923
Prepaid expenses		354			4,993					5,347
Television and radio broadcast rights					5,587					5,587
Total current assets		5,834			49,472		(2,566	)		52,740
Marketable securities, at market value		150,749			452					151,201
Investment in consolidated subsidiaries		226,896					(226,896	)		—
Cash value of life insurance and retirement deposits		5,191			10,372					15,563
Television and radio broadcast rights					2,046					2,046
Goodwill, net					38,354					38,354
Intangible assets					1,244					1,244
Investments in equity investee					2,748					2,748
Prepaid financing fees and other assets		5,012			1,058					6,070
Property, plant and equipment, net		1,044			142,623					143,667
Total Assets	$	394,726		$	248,369	$	(229,462	)	$	413,633
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Trade accounts payable	$	261		$	2,384	$			$	2,645
Payable to affiliate		2,014					(2,014	)		—
Accrued payroll and related benefits		865			5,961					6,826
Interest payable		539								539
Television and radio broadcast rights payable					3,372					3,372
Income taxes payable					552		(552	)		—
Other current liabilities		2,175			3,095					5,270
Total current liabilities		5,854			15,364		(2,566	)		18,652
Long-term debt		150,000								150,000
Accrued retirement benefits		19,597			85					19,682
Deferred income taxes		23,213			1,206					24,419
Other liabilities		65			4,818					4,883
Stockholders’ Equity
Common stock		10,887			1,131		(1,131	)		10,887
Capital in excess of par		8,756			164,234		(164,234	)		8,756
Accumulated other comprehensive income, net of income taxes:
Unrealized gain on marketable securities		97,346			21		(21	)		97,346
Minimum pension liability		(2,172	)							(2,172	)
Retained earnings		81,180			61,510		(61,510	)		81,180
Total Stockholders’ Equity		195,997			226,896		(226,896	)		195,997
Total Liabilities and Stockholders’ Equity	$	394,726		$	248,369	$	(229,462	)	$	413,633

18

Financial Information for Guarantors
Condensed Consolidated Balance Sheet
as of December 31, 2005

				Wholly					Fisher
	Fisher			Owned					Communications,
	Communications,			Guarantor					Inc. and
	Inc.			Subsidiaries		Eliminations			Subsidiaries
(in thousands)
ASSETS
Current Assets
Cash and cash equivalents	$	3,660		$	15,962	$			$	19,622
Receivables, net		105			28,061					28,166
Due from affiliate		6,184					(6,184	)		—
Income taxes receivable		1,538					(552	)		986
Deferred income taxes		7			658					665
Prepaid expenses		414			3,881					4,295
Television and radio broadcast rights					6,519					6,519
Total current assets		11,908			55,081		(6,736	)		60,253
Marketable securities, at market value		169,634			419					170,053
Investment in consolidated subsidiaries		225,057					(225,057	)		—
Cash value of life insurance and retirement deposits		5,115			10,188					15,303
Television and radio broadcast rights					2,075					2,075
Goodwill, net					38,354					38,354
Intangible assets					1,244					1,244
Investments in equity investee					2,759					2,759
Deferred income taxes										—
Prepaid financing fees and and other assets		5,169			871					6,040
Property, plant and equipment, net		904			143,408					144,312
Total Assets	$	417,787		$	254,399	$	(231,793	)	$	440,393
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Trade accounts payable	$	693		$	2,790	$			$	3,483
Payable to affiliate					6,184		(6,184	)		—
Accrued payroll and related benefits		1,113			6,242					7,355
Interest payable		3,809								3,809
Television and radio broadcast rights payable					5,524					5,524
Income taxes payable					552		(552	)		—
Other current liabilities		2,058			2,462					4,520
Total current liabilities		7,673			23,754		(6,736	)		24,691
Long-term debt		150,000								150,000
Accrued retirement benefits		19,560			84					19,644
Deferred income taxes		30,868			513					31,381
Other liabilities		65			4,991					5,056
Stockholders’ Equity Common stock		10,881			1,131		(1,131	)		10,881
Capital in excess of par		8,590			164,234		(164,234	)		8,590
Deferred compensation		(159	)							(159	)
Accumulated other comprehensive income, net of income taxes:
Unrealized gain on marketable securities		109,600								109,600
Minimum pension liability		(2,172	)							(2,172	)
Retained earnings		82,881			59,692		(59,692	)		82,881
Total Stockholders’ Equity		209,621			225,057		(225,057	)		209,621
Total Liabilities and Stockholders’ Equity	$	417,787		$	254,399	$	(231,793	)	$	440,393

19

Financial Information for Guarantors
Condensed Consolidated Statement of Cash Flows
for the three months ended March 31, 2006

				Wholly					Fisher
	Fisher			Owned					Communications,
	Communications,			Guarantor					Inc. and
	Inc.			Subsidiaries			Eliminations		Subsidiaries
(in thousands)
Net cash provided by (used in) operating activities	$	83		$	(2,475	)	$		$	(2,392	)
Cash flows from investing activities
Purchase of property, plant and equipment		(202	)		(1,758	)				(1,960	)
Net cash used in investing activities		(202	)		(1,758	)		—		(1,960	)
Cash flows from financing activities
Proceeds from exercise of stock options		177								177
Excess tax benefit from exercise of stock options		10								10
Net cash provided by financing activities		187			—			—		187
Net increase (decrease) in cash and cash equivalents		68			(4,233	)		—		(4,165	)
Cash and cash equivalents, beginning of period		3,660			15,962					19,622
Cash and cash equivalents, end of period	$	3,728		$	11,729		$	—	$	15,457

20

Financial Information for Guarantors
Condensed Consolidated Statement of Cash Flows
for the three months ended March 31, 2005

				Wholly					Fisher
	Fisher			Owned					Communications,
	Communications,			Guarantor					Inc. and
	Inc.			Subsidiaries			Eliminations		Subsidiaries
(in thousands)
Net cash provided by (used in) operating activities	$	103		$	(5,389	)			$	(5,286	)
Cash flows from investing activities
Proceeds from collection of notes receivable					1,000					1,000
Purchase of property, plant and equipment		(37	)		(2,201	)				(2,238	)
Net cash used in investing activities		(37	)		(1,201	)		—		(1,238	)
Cash flows from financing activities
Payments under notes payable					(9	)				(9	)
Payment of deferred loan costs		(85	)							(85	)
Proceeds from exercise of stock options		2,420								2,420
Net cash provided by (used in) financing activities		2,335			(9	)		—		2,326
Net increase (decrease) in cash and cash equivalents		2,401			(6,599	)		—		(4,198	)
Cash and cash equivalents, beginning of period		1,007			15,018					16,025
Cash and cash equivalents, end of period	$	3,408		$	8,419		$	—	$	11,827

21

ITEM 2 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the Financial Statements and related Notes thereto included elsewhere in this quarterly report on Form 10-Q. Some of the statements in this quarterly report are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all passages containing verbs such as `aims, anticipates, believes, estimates, expects, hopes, intends, plans, predicts, projects or targets’ or nouns corresponding to such verbs. Forward-looking statements also include any other passages that are primarily relevant to expected future events or that can only be fully evaluated by events that will occur in the future. There are many risks and uncertainties that could cause actual results to differ materially from those predicted in our forward-looking statements, including, without limitation, those factors discussed under the caption “Risk Factors” in Item 1A of Part II. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. We undertake no obligation to revise any forward-looking statements in order to reflect events or circumstances that may subsequently arise. Readers are urged to carefully review and consider the various disclosures made in this report and in our other reports filed with the Securities and Exchange Commission that attempt to advise interested parties of the risks and factors that may affect our business, prospects and results of operations. As used herein, unless the context requires otherwise, when we say “we”, “us”, “our”, or the “Company”, we are referring to Fisher Communications, Inc. and its consolidated subsidiaries.

This discussion is intended to provide an analysis of significant trends, if any, and material changes in our financial position and operating results of our business units during the three-month period ended March 31, 2006, compared with the corresponding period in 2005.

We are an integrated media company. We own and operate nine network-affiliated television stations and 27 radio stations. We also own a 50% interest in a company that owns a tenth television station. Our television and radio stations are located in Washington, Oregon, Idaho and Montana. We also own and operate Fisher Plaza, a communications facility located near downtown Seattle that serves as the home for our corporate offices and our Seattle television and radio stations, and also houses a variety of companies, including media and communications companies. We also own approximately 3.0 million shares of common stock of Safeco Corporation, a publicly traded insurance company.

Our broadcasting operations receive revenue from the sale of local, regional and national advertising and, to a much lesser extent, from network compensation, satellite and fiber transmission services, satellite retransmission, tower rental and commercial production activities. Our operating results are therefore sensitive to broad economic trends that affect the broadcasting industry in general, as well as local and regional trends, such as those in the Northwest economy. Excluding revenue derived from seasonal sports rights, the advertising revenue of our stations is generally highest in the second and fourth quarters of each year, due in part to increases in consumer advertising in the spring, and retail advertising in the period leading up to and including the holiday season. In addition, advertising revenue is generally higher during national election years due to spending by political candidates and advocacy groups. This political spending typically is heaviest during the fourth quarter.

Our television revenue is significantly affected by network affiliation and the success of programming offered by those networks. Our two largest television stations, representing approximately three-fourths of our television revenue, are affiliated with ABC, and the remaining eight television stations (including 50%-owned KPIC TV) are affiliated with CBS. Our broadcasting operations are subject to competitive pressures from traditional broadcasting sources, as well as from alternative methods of delivering information and entertainment, and these pressures may cause fluctuations in operating results.

In December 2005, we announced that we signed an agreement to purchase a full-power television station and a low-power television station in the Portland, Oregon DMA (“Portland Stations”), as well as low-power television stations and construction permits in certain Idaho communities (“Idaho Stations”). The purchase price of $20.3 million may be paid through the use of existing cash and the use of our $20 million revolving line of credit. As of March 31, 2006, a deposit of $1.0 million was held in escrow on this transaction and is included in prepaid expenses in the

22

Consolidated Balance Sheet. In May 2006, we signed an amendment to the agreement that provides for the closing of the purchase of the Idaho Stations by May 15, 2006, extends the closing date of the Portland Stations, and requires the parties to negotiate toward establishing a joint sales agreement (“JSA”) for the Portland Stations until closing. As a result of the amendment, we paid a $3.5 million non-refundable fee for the contract extension (which amount will be applied to the purchase price at closing), and further agreed to pay $500,000 in prepaid JSA fees upon establishing the JSA structure (any amount not applied to JSA fees is applied to the purchase price at closing). We expect to close the purchase of the Idaho Stations by May 15, 2006; we also expect to close the purchase of the Portland Stations no later than September 30, 2006. As a result, we expect to have the ability to operate duopolies in three of the markets in which we have existing television stations, with the corresponding potential to share fixed infrastructure expenditures over multiple stations.

In May 2002, we entered into a radio rights agreement (the “Rights Agreement”) to broadcast Seattle Mariners baseball games on KOMO AM for the 2003 through 2008 baseball seasons. The impact of the Rights Agreement is greater during periods that include the broadcast of Mariners baseball games; therefore, the impact on the first and fourth quarters of each year is less than what is expected for the second and third quarters of the calendar year. We also changed to an all-news format for KOMO AM in September 2002. These changes have led to improved ratings for KOMO AM in the Seattle market over the past few years. Nevertheless, the success of this programming is dependent, in part, on factors beyond our control, such as the competitiveness of the Seattle Mariners and the successful marketing of the team.

In addition to our broadcasting operations, we own and operate Fisher Plaza, and we lease space to other companies that are attracted by the property location and the infrastructure provided at this facility. Fisher Plaza was first opened for occupancy in May 2000, and the second phase of the project was opened for occupancy in the summer of 2003. As of March 31, 2006, approximately 95% of Fisher Plaza was occupied or committed for occupancy (42% was occupied by Fisher entities), compared to 91% occupied or committed for occupancy at December 31, 2005 and 89% at March 31, 2005. Revenue and operating income from Fisher Plaza are dependent upon the general economic climate, the Seattle economic climate, the outlook of the telecommunications and technology sectors and real estate conditions, including the availability of space in other competing properties.

On September 20, 2004 we completed an offering of $150.0 million of 8.625% senior notes due 2014 and used the net cash proceeds to retire our previous debt facilities and terminate the forward sales contract covering shares of our investment in Safeco Corporation. The notes are unconditionally guaranteed, jointly and severally, on an unsecured, senior basis by the current and future material domestic subsidiaries of the Company. Interest on the notes is payable semiannually in arrears on March 15 and September 15 of each year.

Management focuses on key metrics from operational data within our broadcasting and Fisher Plaza operations. Information on significant trends is provided in the section entitled “Consolidated Results of Operations.”

CRITICAL ACCOUNTING POLICIES

The SEC has defined a company’s critical accounting policies as the ones that are most important to the portrayal of the company’s financial condition and results of operations, and which require the company to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Our critical accounting policies and estimates include the estimates used in determining the recoverability of goodwill and other indefinite-lived intangible assets, the value of television and radio broadcast rights, the cost of pension programs, the amount of tax accruals and the amount of the allowance for doubtful accounts. For a detailed discussion of our critical accounting policies and estimates, please refer to our Annual Report on Form 10-K for the year ended December 31, 2005. There have been no material changes in the application of our critical accounting policies and estimates subsequent to that report. We have discussed the development and selection of these critical accounting estimates with the Audit Committee of our board of directors.

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of

23

revenue and expenses during the reporting period. Actual results could differ from those estimates.

CONSOLIDATED RESULTS OF OPERATIONS

We report financial data for three reportable segments: television, radio and Fisher Plaza. The television reportable segment includes the operations of our nine network-affiliated wholly owned television stations, and a tenth television station 50% owned by us. The radio reportable segment includes the operations of our 27 radio stations. Corporate expenses of the broadcasting business unit are allocated to the television and radio reportable segments based on a ratio that approximates historic revenue and operating expenses of the segments. The Fisher Plaza reportable segment consists of the operations of Fisher Plaza. Fisher-owned entities that reside at Fisher Plaza do not pay rent; however, these entities do pay common-area maintenance expenses. The segmental data includes additional allocation of depreciation and certain operating expenses from Fisher Plaza to the Seattle-based television and radio operations.

Percentage comparisons have been omitted within the following table where they are not considered meaningful.

24

	Three Months
	Ended March 31,						Variance
	2006			2005			$			%
(dollars in thousands)
(Unaudited)
Revenue
Television	$	22,859		$	20,826		$	2,033			9.8	%
Radio		8,838			8,265			573			6.9	%
Fisher Plaza		2,164			1,918			246			12.8	%
Corporate and eliminations		(33	)		(52	)		19			-36.5	%
Consolidated		33,828			30,957			2,871			9.3	%
Cost of services sold
Television		11,150			11,870			(720	)		-6.1	%
Radio		3,391			3,734			(343	)		-9.2	%
Fisher Plaza		788			622			166			26.7	%
Corporate and eliminations		411			397			14			3.5	%
Consolidated		15,740			16,623			(883	)		-5.3	%
Selling expenses
Television		3,217			2,698			519			19.2	%
Radio		3,380			3,089			291			9.4	%
Fisher Plaza		41			91			(50	)		-54.9	%
Consolidated		6,638			5,878			760			12.9	%
General and administrative expenses
Television		4,482			4,691			(209	)		-4.5	%
Radio		2,084			2,036			48			2.4	%
Fisher Plaza		65			269			(204	)		-75.8	%
Corporate and eliminations		1,992			2,879			(887	)		-30.8	%
Consolidated		8,623			9,875			(1,252	)		-12.7	%
Depreciation and amortization
Television		1,471			2,678			(1,207	)		-45.1	%
Radio		289			367			(78	)		-21.3	%
Fisher Plaza		760			1,014			(254	)		-25.0	%
Corporate and eliminations		62			70			(8	)		-11.4	%
Consolidated		2,582			4,129			(1,547	)		-37.5	%
Income (loss) from operations
Television		2,539			(1,111	)		3,650
Radio		(306	)		(961	)		655
Fisher Plaza		510			(78	)		588
Corporate and eliminations		(2,498	)		(3,398	)		900
Consolidated		245			(5,548	)		5,793
Other income, net		898			850			48
Interest expense		(3,454	)		(3,371	)		(83	)
Loss before income taxes		(2,311	)		(8,069	)		5,758
Benefit for federal and state income taxes		(610	)		(3,001	)		2,391
Net loss	$	(1,701	)	$	(5,068	)	$	3,367

25

Comparison of Fiscal Three-Month Periods Ended March 31, 2006 and March 31, 2005

Revenue

Television revenue increased in the three-month period ended March 31, 2006, as compared to the same period in 2005, primarily due to improved national and local advertising in most of our markets. The increase was led by improvements at our two ABC-affiliated stations, which aired the Super Bowl in February 2006, as well as increases in certain of our smaller market CBS-affiliated stations. Total revenue for our Seattle and Portland television stations increased 11.7% and 13.2%, respectively, in the first three months of 2006, as compared to the first three months of 2005. Revenue from our remaining television stations increased 3.0% in the first three months of 2006, as compared to the first three months of 2005. In May 2005, we signed agreements with ABC to renew ABC’s affiliation at KOMO TV and KATU through August 2009. In January 2006, we also renewed affiliation agreements with CBS through February 2016. The terms of the renewals include decreasing network compensation, and we are recognizing network compensation revenue on a straight-line basis over the terms of the agreements. Network compensation revenue decreased to $440,000 in the first quarter of 2006, compared to $580,000 in the first quarter of 2005.

Radio revenue increased in the three-month period ended March 31, 2006, as compared to the same period in 2005, primarily as a result of increased national revenue, which was partially offset by decreased local spot revenue. Excluding revenue specifically attributable to Seattle Radio’s agreement with the Seattle Mariners to broadcast baseball games, KOMO AM’s revenue increased 15.8% in the first three months of 2006, compared to the first three months of 2005. We attribute the increase primarily to the synergistic effect of the Seattle Mariners programming and KOMO AM’s all-news format gaining greater recognition in the Seattle market. Total Seattle Radio revenue (which includes sports programming) increased in the three-month period ended March 31, 2006, as compared to the same period of 2005, primarily due to increased national advertising. Revenue from our Seattle Radio operations comprised approximately 70% of our total radio revenue in the three months ended March 31, 2006.

Fisher Plaza first opened in May of 2000, and the second phase of the project was open for occupancy in the summer of 2003. The increase in revenue in the three-month period ended March 31, 2006, as compared to the same periods of 2005, was due primarily to increased rents and service fees.

Cost of services sold

The cost of services sold consists primarily of costs to acquire, produce, and promote broadcast programming for the television and radio segments, and costs to operate Fisher Plaza. Many of these costs are relatively fixed in nature and do not necessarily vary on a proportional basis with revenue. The decrease in the television segment cost of services sold in the three-month period ended March 31, 2006, as compared to the same period in 2005, is primarily the result of lower syndicated programming costs. In particular, the first quarter of 2005 included syndicated programming costs for a television program that was cancelled later in 2005; 2006 replacement programming was at a lower cost.

Lower cost of services sold at our radio segment in the first three months of 2006, as compared to the comparable period in 2005, was primarily attributable to decreased promotion and labor expenses.

The increase in cost of services sold at Fisher Plaza in the three-months ended March 31, 2006, as compared to the same 2005 period, was primarily attributable to the increased costs to provide services at a higher third-party tenant occupancy level, for which expense reimbursements are classified as revenue.

The corporate and eliminations category consists primarily of the reclassification and elimination of certain operating expenses between operating segments. For example, KOMO TV and Seattle Radio recognize facilities-related expenses as general and administrative, while Fisher Plaza records the reimbursement of these intercompany expenses as a reduction of cost of services sold.

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Selling expenses

The increase in selling expenses in the television segment in the three-month period ended March 31, 2006, as compared to the same period in 2005, was due primarily to increased commission-based expense based on the mix of revenue at our television stations, as well as somewhat increased promotional expense. The increase in selling expenses in the radio segment in the three-month period ended March 31, 2006, as compared to the same period in 2005, was due primarily to increased commission expense as a result of increased revenue.

Decreased selling expense at Fisher Plaza for the three month period ended March 31, 2006 as compared to the same period in 2005, was due primarily to reduced marketing efforts in 2006 as the property was becoming substantially occupied.

General and administrative expenses

The television segment had lower general and administrative costs during the three-month period ended March 31, 2006, as compared to the corresponding 2005 period, due primarily to decreased benefit and pension-related expenses in the 2006 three-month period.

Decreased general and administrative expense at Fisher Plaza for the three month period ended March 31, 2006 as compared to the same period in 2005, was due primarily to lower required administration and headcount levels due to management’s centralization of such functions to the corporate group in mid 2005.

The corporate group incurred lower general and administrative expenses in the first three months of 2006, as compared to the first three months of 2005, due primarily to severance-related expenses totaling approximately $1.0 million for the Company’s former chief executive officer recognized in the first quarter of 2005. We had no such similar expenses in the first quarter of 2005.

Depreciation

Depreciation for the television, radio, and Fisher Plaza segments declined in the three-month period ended March 31, 2006, as compared to the same period in 2005, as a result of certain assets having become fully depreciated.

Other income, net

Other income, net, consists primarily of dividends received on marketable securities and, to a lesser extent, interest and miscellaneous income.

Interest expense

Interest expense consists primarily of interest on our $150 million senior notes and amortization of loan fees.

Benefit for federal and state income taxes

The benefit for federal and state income taxes varies with pre-tax loss. Consequently, the changes in benefit for federal and state income taxes were primarily due to fluctuating losses from continuing operations before income taxes. The effective tax rate varies from the statutory rate primarily due to a deduction for dividends received from our investment in Safeco corporate common stock, changes in cash surrender value of life insurance policies held by the Company (for which proceeds are received tax-free if held to maturity), and the impact of other permanent tax differences. As required by accounting rules for interim financial reporting, we record our income tax provision or benefits based upon our estimated annual effective tax rate of 26% for 2006. The estimated effective tax rate in the 2006 period was lower than in the same period in 2005 due primarily to the relationship between the amount of estimated annual permanent differences and our estimated annual pretax income or loss.

Liquidity and capital resources

In September 2004, we completed a $150.0 million offering of 8.625% senior notes due 2014 and used $143.9 million of the initial $144.5 million net proceeds to retire existing debt and to settle other outstanding obligations.

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The notes are unconditionally guaranteed, jointly and severally, on an unsecured, senior basis by our current and future material domestic subsidiaries. Interest on the notes is payable semiannually in arrears on March 15 and September 15 of each year. In September 2004, we also entered into a new six-year senior credit facility with a financial institution for borrowings of up to $20.0 million. The credit facility is collateralized by substantially all of the Company’s assets (excluding certain real property and our investment in shares of Safeco Corporation common stock).

Our current assets as of March 31, 2006 included cash and cash equivalents totalling $15.5 million, and we had working capital of $34.1 million. As of December 31, 2005, our current assets included cash and cash equivalents totalling $19.6 million, and we had working capital of $35.6 million. We intend to finance working capital, debt service, capital expenditures, and dividend requirements, if any, primarily through operating activities. However, we may use the credit facility to meet operating needs. As of March 31, 2006, the entire $20.0 million was available under the credit facility. In December 2005, we announced that we signed an agreement to purchase a full-power television station and a low-power television station in the Portland, Oregon DMA (“Portland Stations”), as well as low-power television stations and construction permits in certain Idaho communities (“Idaho Stations”). The purchase price of $20.3 million may be paid through the use of existing cash and the use of our $20 million revolving line of credit. In May 2006, we signed an amendment to the agreement that provides for the closing of the purchase of the Idaho Stations by May 15, 2006, extends the closing date of the Portland Stations, and requires the parties to negotiate toward establishing a joint sales agreement (“JSA”) for the Portland Stations until closing. As a result of the amendment, we paid a $3.5 million non-refundable fee for the contract extension (which amount will be applied to the purchase price at closing), and further agreed to pay $500,000 in prepaid JSA fees upon establishing the JSA structure (any amount not applied to JSA fees will be applied to the purchase price at closing). We expect to close the purchase of the Idaho Stations by May 15, 2006; we also expect to close the purchase of the Portland Stations no later than September 30, 2006. We believe that existing cash and cash equivalents, combined with access to our credit facility, are adequate to fund our operations for at least the next twelve months as well as our plan to purchase the aforementioned television stations.

Net cash used in operating activities during the three months ended March 31, 2006 was $2.4 million, compared to net cash used in operations of $5.3 million in the three months ended March 31, 2005. Net cash used by operating activities consists of our net loss, adjusted by non-cash expenses such as depreciation and amortization, further adjusted by changes in deferred income tax and changes in operating assets and liabilities. Net cash used in investing activities during the period ended March 31, 2006, consisted of $2.0 million used to purchase property, plant and equipment, compared to $1.2 million used in the three-month period ended March 31, 2005. Net cash used in investing activities in the first quarter of 2005 was partially offset by the collection of a note receivable totalling $1.0 million related to a prior year asset sale. Broadcasting is a capital-intensive business; however, we have no significant commitments for the purchase of capital items. By July 1, 2006, we must construct full power digital broadcasting facilities for certain of our smaller market television stations to be in compliance with FCC rules.

Net cash provided by financing activities in the three months ended March 31, 2006 was $0.2 million, consisting primarily of proceeds from the exercise of stock options. Net cash provided by financing activities in the three months ended March 31, 2005 was $2.3 million, comprised primarily of $2.4 million of proceeds from the exercise of stock options, partially offset by payments of notes payable and deferred loan costs.

We are subject to various debt covenants and other restrictions — including the requirement for early payments upon the occurrence of certain events, including the sale of assets — the violation of which could require repayment of outstanding borrowings and affect our credit rating and access to other financing. The Company was in compliance with all debt covenant requirements at March 31, 2006.

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ITEM 3 — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

The market risk in our financial instruments represents the potential loss arising from adverse changes in financial rates. We are exposed to market risk in the areas of interest rates and securities prices. These exposures are directly related to our normal funding and investing activities.

Interest Rate Exposure

As a result of our September 20, 2004 placement of $150.0 million of 8.625% senior notes due 2014, substantially all of our debt as of March 31, 2006, is at a fixed rate. As of March 31, 2006, our fixed-rate debt totaled $150.0 million. The fair market value of long-term fixed interest rate debt is subject to interest rate risk. Generally, the fair market value of fixed interest rate debt will increase as interest rates fall and decrease as interest rates rise. The estimated fair value of our long-term debt at March 31, 2006 was approximately $159.4 million, which was approximately $9.4 million more than its carrying value. Market risk is estimated as the potential change in fair value resulting from a hypothetical 10% change in interest rates and, as of March 31, 2006, amounted to approximately $7.7 million. Fair market values are determined based on estimates made by investment bankers. For fixed rate debt, interest rate changes do not impact book value, operations or cash flows.

Marketable Securities Exposure

The fair value of our investments in marketable securities as of March 31, 2006 was $151.2 million, compared to $170.1 million as of December 31, 2005. Marketable securities consist primarily of 3.0 million shares of Safeco Corporation common stock, valued based on the closing per-share sale price on the specific-identification basis as reported on the Nasdaq stock market. As of March 31, 2006, these shares represented 2.5% of the outstanding common stock of Safeco Corporation. We have classified the investments as available-for-sale under applicable accounting standards. A hypothetical 10% change in market prices underlying these securities would result in a $15.1 million change in the fair value of the marketable securities portfolio. Although changes in securities prices would affect the fair value of the marketable securities and cause unrealized gains or losses, such gains or losses would not be realized unless the investments are sold.

ITEM 4 — CONTROLS AND PROCEDURES

The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) and, based on their evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the Company’s fiscal quarter ended March 31, 2006, these disclosure controls and procedures are effective in ensuring that the information that the Company is required to disclose in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, and that, as of the end of the Company’s fiscal quarter ended March 31, 2006, the disclosure controls and procedures are effective in ensuring that the information required to be reported is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

We made no changes in internal control over financial reporting during the first fiscal quarter of 2006 that materially affected or is reasonably likely to materially affect our internal control over financial reporting. We intend to continue to refine our internal control on an ongoing basis as we deem appropriate with a view towards continuous improvement.

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PART II

OTHER INFORMATION

Item 1. Legal Proceedings

The Company and its subsidiaries are parties to various claims, legal actions and complaints in the ordinary course of their businesses. In the Company’s opinion, all such matters are adequately covered by insurance, are without merit or are of such kind, or involve such amounts, that unfavorable disposition would not have a material adverse effect on the consolidated financial position, results of operations or cash flows of the Company.

Item 1A. Risk Factors

The following risk factors and other information included in this quarterly report should be carefully considered. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations. If any of the following risks occur, our business, financial condition and future results could be materially adversely affected.

We depend on advertising revenues, which fluctuate as a result of a number of factors.

Our main source of revenue is sales of advertising. Our ability to sell advertising depends on:

• the health of the national economy, and particularly the economy of the Northwest region and Seattle, Washington and Portland, Oregon;

• the popularity of our programming;

• changes in the makeup of the population in the areas where our stations are located;

• pricing fluctuations in local and national advertising;

• the activities of our competitors, including increased competition from other forms of advertising-based mediums, particularly network, cable television, direct satellite television and radio, and the Internet;

• the use of new services and devices which allow viewers to minimize commercial advertisements, such as satellite radio and personal digital video recorders; and

• other factors that may be beyond our control.

A decrease in advertising revenue from an adverse change in any of the above factors could negatively affect our operating results and financial condition.

In addition, our results are subject to seasonal fluctuations. Excluding revenue from our Seattle Radio agreement to broadcast Seattle Mariners baseball games during the regular baseball season, seasonal fluctuations typically result in second and fourth quarter broadcasting revenue being greater than first and third quarter broadcasting revenue. This seasonality is primarily attributable to increased consumer advertising in the spring and then increased retail advertising in anticipation of holiday season spending. Furthermore, revenue from political advertising is typically higher in election years. Revenue from broadcasting Seattle Mariners baseball games is greatest in the second and third quarters of each year.

We have incurred losses in the past. We cannot assure you that we will be able to achieve profitability.

We incurred a net loss of $1.7 million for the three months ended March 31, 2006. In the full fiscal year 2005, we had a net loss of $5.1 million, and in 2004 we had a loss from continuing operations of $11.8 million. We cannot assure you that our plans to improve operating performance will be successful or that we will be able to achieve profitability in the future.

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Our operating results are dependent on the success of programming aired by our television and radio stations.

Our advertising revenues are substantially dependent on the success of our network and syndicated programming. We make significant commitments to acquire rights to television and radio programs under multi-year agreements. The success of such programs is dependent partly upon unpredictable factors such as audience preferences, competing programming, and the availability of other entertainment activities. If a particular program is not popular in relation to its costs, we may not be able to sell enough advertising to cover the costs of the program. In some instances, we may have to replace or cancel programs before their costs have been fully amortized, resulting in write-offs that increase operating costs. Our Seattle and Portland television stations, which account for approximately three-fourths of our television broadcasting revenue, are affiliated with the ABC Television Network, with the remainder of our television stations affiliated with the CBS Television Network. Weak performance by ABC, a decline in performance by CBS, or a change in performance by other networks or network program suppliers, could harm our business and results of operations.

In May 2002, we acquired the radio broadcast rights for the Seattle Mariners baseball team for a term of six years, beginning with the 2003 baseball season. The success of this programming is dependent on some factors beyond our control, such as the competitiveness of the Seattle Mariners and the successful marketing of the team by the team’s owners. If the Seattle Mariners fail to maintain a significant fan base, the number of listeners to our radio broadcasts may decrease, which would harm our ability to generate anticipated advertising dollars. In October 2004, Major League Baseball announced an agreement with XM Satellite Radio to rebroadcast every Major League Baseball game nationwide beginning with the 2005 regular season. We retain broadcast rights under the Rights Agreement; however, these rebroadcasts could result in decreased listenership for our stations, the loss of regional sales growth opportunities and the loss of local advertisers that may not want their advertisements broadcast on a national scale.

Competition in the broadcasting industry and the rise of alternative entertainment and communications media may result in loss of audience share and advertising revenue by our stations.

Our television and radio stations face intense competition from:

• local network affiliates and independent stations;

• cable, direct broadcast satellite and alternative methods of broadcasting brought about by technological advances and innovations, such as pay-per-view and home video and entertainment systems; and

• other sources of news, information and entertainment, such as streaming video broadcasts over the Internet, podcasting, newspapers, movie theaters and live sporting events.

In addition to competing with other media outlets for audience share, we also compete for advertising revenue that comprises our primary source of revenue. Our stations compete for such advertising revenue with other television and radio stations in their respective markets, as well as with other advertising media such as newspapers, the Internet, magazines, outdoor advertising, transit advertising, yellow page directory, direct mail and local cable systems.

The results of our operations will be dependent upon the ability of each station to compete successfully in its market, and there can be no assurance that any one of our stations will be able to maintain or increase its current audience share or revenue share. To the extent that certain of our competitors have, or may in the future obtain, greater resources, our ability to compete successfully in our broadcasting markets may be impeded.

Because significant portions of our cost of services are relatively fixed, downturns in the economy harm our operations, revenue, cash flow and earnings.

Our operations are concentrated in the Northwest. The Seattle, Washington and Portland, Oregon markets are particularly important for our financial well-being. Operating results over the past several years were adversely impacted by a soft economy, and any weak economic conditions in these markets would harm our operations and financial condition. Because significant portions of our costs of services are relatively fixed, we may be unable to

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materially reduce costs if our revenues decline. If our revenues do not increase or if they decline, we could continue to suffer net losses, or such net losses could increase. In addition, downturns in the national economy or downturns in significant categories of national advertising segments have historically resulted (and may in the future result) in decreased national advertising sales. This could harm our results of operations because national advertising sales represent a significant portion of our television advertising net revenue.

We may experience disruptions in our business if we acquire and integrate new television or radio stations.

As part of our business strategy, we plan to continue to evaluate opportunities to acquire television and radio stations. In December 2005 we announced that we signed an agreement to purchase a full-power television station in the Portland, Oregon DMA, as well as low-power television stations and construction permits in certain Idaho communities. The purchase price of $20.3 million may be paid through the use of existing cash and the use of our $20 million revolving line of credit. There can be no assurance that we will meet all of the conditions to complete the transaction. Further, we cannot provide assurance that we will find other attractive acquisition candidates or effectively manage the integration of acquired stations into our existing business. If the expected operating efficiencies from acquisitions do not materialize, if we fail to integrate new stations or recently acquired stations into our existing business, if the costs of such integration exceed expectations or if undertaking such acquisitions diverts management’s attention from normal daily operations of the business, our operating results and financial condition could be harmed. If we make acquisitions in the future, we may need to incur more debt or issue more equity securities, and we may incur contingent liabilities and amortization and/or impairment expenses related to intangible assets. Any of these occurrences could harm our operating results and financial condition.

Radio and television programming revenue may be negatively affected by the cancellation of syndication agreements.

Syndication agreements are licenses to broadcast programs that are produced by production companies. Such programming can form a significant component of a station’s programming schedule. Syndication agreements are subject to cancellation, and such cancellations may affect a station’s programming schedule. We cannot assure you that we will continue to be able to acquire rights to syndicated programs once our current contracts for these programs expire. We may enter into syndication agreements for programs that prove unsuccessful, and our payment commitment may extend until or if the syndicator cancels the program.

Our indebtedness could materially and adversely affect our business and prevent us from fulfilling our obligations under our 8.625% senior notes due 2014

We currently have a substantial amount of debt. Our indebtedness could have a material adverse effect on our business. For example, it could:

• increase our vulnerability to general adverse economic and industry conditions or a downturn in our business;

• reduce the availability of our cash flow to fund working capital, capital expenditures and other general business purposes;

• reduce the funds available to purchase the rights to television and radio programs;

• limit our flexibility in planning for, or reacting to, changes in our industries, making us more vulnerable to economic downturns;

• place us at a competitive disadvantage compared to our competitors that have less debt; and

• limit our ability to make certain asset dispositions.

If our indebtedness affects our operations in these ways, our business, financial condition, cash flow and results of operations could suffer, making it more difficult for us to satisfy our obligations under the notes. Furthermore, the indenture governing our 8.625% senior notes due 2014 and our senior credit facility may permit us to incur additional debt provided we meet certain financial and other covenants.

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The non-renewal or modification of affiliation agreements with major television networks could harm our operating results.

Each of our television stations’ affiliation with one of the four major television networks has a significant impact on the composition of the station’s programming, revenue, expenses and operations. Our two largest television stations, KOMO, which broadcasts in Seattle, Washington, and KATU, which broadcasts in Portland, Oregon, have affiliation agreements with ABC through 2009. In 2005, approximately three-fourths of our television broadcasting revenues (nearly half of our total revenues) were derived from our ABC affiliated stations. During May 2005, we renewed our affiliation agreements with ABC Television Network, the terms of which included reduced network compensation from ABC. In January 2006, we renewed our affiliaton agreements with CBS through February 2016. The terms of our agreements with CBS likewise include reduced network compensation.

If a network acquires a television station in a market in which we own a station affiliated with that network, the network will likely decline to renew the affiliation agreement for our station in that market. The non-renewal or modification of any of the network affiliation agreements could harm our operating results.

Changes in FCC regulations regarding ownership have increased the uncertainty surrounding the competitive position of our stations in the markets we serve.

In June 2003, the FCC amended its multiple ownership rules, including, among other things, its local television ownership limitations, its prohibition on common ownership of newspapers and broadcast stations in the same market, as well as its local radio ownership limitations. Under the amended rules, a single entity would be permitted to own up to three television stations in a single market, to own more than one television station in markets with fewer independently owned stations, and the rules would allow consolidated newspaper and broadcast ownership and operation in several of our markets. The new radio multiple ownership rules could limit our ability to acquire additional radio stations in existing markets that we serve. The effectiveness of these new rules was stayed pending appeal. In June 2004, a federal court of appeals issued a decision which upheld portions of the FCC decision adopting the rules, but concluded that the order failed to adequately support numerous aspects of those rules, including the specific numeric ownership limits adopted by the FCC. The court remanded the matter to the FCC for revision or further justification of the rules, retaining jurisdiction over the matter. The court has partially maintained its stay of the effectiveness of those rules, particularly as they relate to television. The rules are now largely in effect as they relate to radio. The Supreme Court has declined to review the matter at this time, and the FCC must review the matter and issue a revised order. We cannot predict whether, how or when the new rules will be modified, ultimately implemented as modified, or repealed in their entirety.

Legislation went into effect in January 2004 that permits a single entity to own television stations serving up to 39% of U.S. television households, an increase over the previous 35% cap. Large broadcast groups may take advantage of this law to expand further their ownership interests on a national basis.

We expect that the consolidation of ownership of broadcasting and newspapers in the hands of a smaller number of competitors would intensify the competition in our markets.

The FCC’s extensive regulation of the broadcasting industry limits our ability to own and operate television and radio stations and other media outlets.

The broadcasting industry is subject to extensive regulation by the FCC under the Communications Act of 1934, as amended. Compliance with and the effects of existing and future regulations could have a material adverse impact on us. Issuance, renewal or transfer of broadcast station operating licenses requires FCC approval, and we cannot operate our stations without FCC licenses. Our television FCC licenses expire in 2006 and 2007, and our radio station FCC licenses expire in 2013 and 2014. Failure to observe FCC rules and policies can result in the imposition of various sanctions, including monetary forfeitures, the grant of short-term (i.e., less than the full eight years) license renewals or, for particularly egregious violations, the denial of a license renewal application or revocation of a license. While the majority of such licenses are renewed by the FCC, we cannot assure you that our licenses will be renewed at their expiration dates, or, if renewed, that the renewal terms will be for eight years. If the FCC decides

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to include conditions or qualifications in any of our licenses, we may be limited in the manner in which we may operate the affected stations.

The Communications Act and FCC rules impose specific limits on the number of stations and other media outlets an entity can own in a single market. The FCC attributes interests held by, among others, such entity’s officers, directors, certain stockholders, and in some circumstances, lenders, to that entity for purposes of applying these ownership limitations. The ownership rules may prevent us from acquiring additional stations in a particular market. We may also be prevented from engaging in a swap transaction if the swap would cause the other company to violate these rules. We may also be prevented from implementing certain joint operations with competitors which might make the operation of our stations more efficient. Federal legislation and FCC rules have changed significantly in recent years and can be expected to continue to change. These changes may limit our ability to conduct our business in ways that we believe would be advantageous and may thereby affect our operating results.

We will be required to make additional investments in HDTV technology, which could harm our ability to fund other operations or repay debt.

Although our Seattle, Portland, Eugene and Boise television stations currently comply with FCC rules requiring stations to broadcast in high definition television (“HDTV”), our stations in smaller markets do not, because they are operating pursuant to special temporary authorizations issued by the FCC to utilize low power digital facilities. We must construct full power digital facilities for our other stations by July 1, 2006, or they will lose interference protection for their digital channel. These additional digital broadcasting investments by our smaller market stations could result in less cash being available to fund other aspects of our business. The FCC has adopted a multi-step channel election and repacking process through which broadcast licenses and permittees will select their ultimate DTV channel. The process is currently underway, and we have requested specific digital channels for each of our stations. We are unable to predict at this time whether our channel requests will be granted or which DTV channels we will be able to obtain through this process. We have been advised by the FCC of a potential conflict between the channel requested for permanent use by our Coos Bay, Oregon, Television Station, KCBY, and the request of a television station owned by another company, but are unable to predict whether that potential conflict will be resolved in a manner satisfactory to the Company and acceptable to the FCC.

We may lose audience share and advertising revenue if we are unable to reach agreement with cable and satellite companies regarding the retransmission of signals of our television stations.

By October 1, 2005, each of our television stations sent notices to cable systems in their market electing must-carry or retransmission consent status for the period from January 1, 2006 through December 31, 2008. Stations electing must-carry may require carriage of their signal on certain channels on cable systems within their market, whereas cable companies are prohibited from carrying the signals of stations electing retransmission consent unless an agreement between the station and the cable provider has been negotiated. We have elected must-carry for some stations in certain markets for the election period ending December 31, 2008. We have elected retransmission consent status with respect to a number of key cable systems.

Some of our television stations are located in markets in which direct-to-home satellite operators are distributing local television signals to their subscribers (“local into local”). Television stations in such markets had the opportunity to enter into retransmission status by sending written elections to such satellite operators by October 1, 2005. Stations not sending such elections automatically elect retransmission consent status, in which case the satellite operator may not retransmit that station’s signal without the permission of the station after January 1, 2006. Our stations in “local into local” markets are presently being carried by both major direct-to-home satellite operators pursuant to existing retransmission consent agreements, one of which will expire December 17, 2008, and the other on May 31, 2009. Failure to reach agreement with the relevant satellite operators prior to the expiration of the existing contracts may harm our business. There is no assurance that we will be able to agree on terms acceptable to us prior to contract expiration dates.

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Dependence on key personnel may expose us to additional risks.

Our business is dependent on the performance of certain key employees, including executive officers and senior operational personnel. We do not enter into employment agreements with all of our key executive officers and senior operational personnel. We also employ several on-air personalities who have significant loyal audiences in their respective markets, with whom we have entered into employment agreements. We cannot assure you that all such key personnel or on-air personalities will remain with us or that our on-air personalities will renew their contracts. The loss of any key personnel could harm our operations and financial results. On January 6, 2005, we announced the resignation of William Krippaehne, Jr. as our president and chief executive officer and that Benjamin W. Tucker was selected as acting president and chief executive officer. On October 4, 2005, we announced the appointment of Colleen B. Brown as president and chief executive officer effective October 10, 2005, and that Mr. Tucker would leave the Company in October 2005. In December 2005, we made certain other changes in our executive management team.

A reduction on the periodic dividend on the common stock of Safeco Corporation may adversely affect our other income, cash flow and earnings. A reduction in the share price of Safeco Corporation may adversely affect our total assets and stockholders’ equity.

We own approximately 3.0 million shares of the common stock of Safeco Corporation, which, at March 31, 2006, represented 36% of our assets and approximately 50% of our stockholders’ equity (the appreciation in Safeco stock is presented, after estimated taxes, as “unrealized gain on marketable securities” within stockholders’ equity). Our investment in Safeco Corporation provided $2.8 million and $751,000 in dividend income for the year ended December 31, 2005 and the three months ended March 31, 2006, respectively. If Safeco Corporation reduces its periodic dividends, it will negatively affect our cash flow and earnings.

Failure of our information technology systems would disrupt our operations, which could reduce our customer base and result in lost revenue. Our computer systems are vulnerable to viruses, unauthorized tampering, system failures and potential obsolescence.

Our operations depend on the continued and uninterrupted performance of our information technology systems. Despite our implementation of network security measures, our servers and computer systems are vulnerable to computer viruses, break-ins, and similar disruptions from unauthorized tampering with our computer systems. Our computer systems are also subject to potential system failures and obsolescence. Any of these events could cause system interruption, delays and loss of critical data that would adversely affect our reputation and result in a loss of customers. Our recovery planning may not be sufficient for all eventualities.

Our ownership and operation of Fisher Plaza is subject to risks, including those relating to the economic climate, local real estate conditions, potential inability to provide adequate management, maintenance and insurance, potential collection problems, reliance on significant tenants, and regulatory risks.

Revenue and operating income from, and the value of, Fisher Plaza may be adversely affected by the general economic climate, the Seattle economic climate and real estate conditions, including prospective tenants’ perceptions of attractiveness of the property and the availability of space in other competing properties. In addition, the economic conditions in the telecommunications and high-tech sectors may significantly affect our ability to attract tenants to Fisher Plaza, since space at Fisher Plaza is marketed in significant part to organizations from these sectors. Other risks relating to the operation of Fisher Plaza include the potential inability to provide adequate management, maintenance and insurance, and the potential inability to collect rent, due to bankruptcy or insolvency of tenants or otherwise. Real estate income and values may also be adversely affected by such factors as applicable laws and regulations, including tax and environmental laws, interest rate levels and the availability of financing. We carry comprehensive liability, fire, extended coverage and rent loss insurance with respect to Fisher Plaza. There are, however, certain losses that may be either uninsurable, not economically insurable, or in excess of our current insurance coverage limits. If an uninsured loss occurs with respect to Fisher Plaza, it could harm our operating results.

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We are subject to the ongoing internal control provisions of Section 404 of the Sarbanes-Oxley Act of 2002. Material weaknesses in internal control, if identified in future periods, could indicate a lack of proper controls to generate accurate financial statements.

Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 and related Securities and Exchange Commission rules, we are required to furnish a report of management’s assessment of the effectiveness of our internal controls as part of our Annual Report on Form 10-K. Our independent registered public accountants are required to audit and report on, management’s assessment, as well as provide a separate opinion on their evaluation of our internal controls over financial reporting. To issue our report, we document our internal control design and the testing processes that support our evaluation and conclusion, and then we test and evaluate the results. There can be no assurance, however, that we will be able to remediate material weaknesses, if any, that may be identified in future periods, or maintain all of the controls necessary for continued compliance. We have in the past discovered, and may in the future discover, areas of our internal controls that need improvement. If we or our auditors discover a material weakness, the disclosure of that fact, even if quickly remedied, could reduce the market’s confidence in our financial statements and harm our stock price. We may not be able to effectively and timely implement necessary control changes and employee training to ensure continued compliance with the Sarbanes-Oxley Act and other regulatory and reporting requirements. There likewise can be no assurance that we will be able to retain sufficient skilled finance and accounting personnel, especially in light of the increased demand for such personnel among publicly traded companies.

Our operations may be adversely affected by earthquakes and other natural catastrophes in the Northwest.

Our corporate headquarters and all of our operations are located in the Northwest. The Northwest has from time to time experienced earthquakes and experienced a significant earthquake on February 28, 2001. We do not know the ultimate impact on our operations of being located near major earthquake faults, but an earthquake could harm our operating results. Our broadcasting towers may also be affected by other natural catastrophes, such as forest fires. Our insurance coverage may not be adequate to cover the losses and interruptions caused by earthquakes or other natural catastrophes.

A write-down of goodwill would harm our operating results.

Approximately $38 million, or 9% of our total assets as of March 31, 2006, consists of goodwill. Goodwill is to be tested at the reporting unit level annually or whenever events or circumstances occur indicating that goodwill might be impaired. If impairment is indicated as a result of future annual testing, we would record an impairment charge in accordance with accounting rules.

Foreign hostilities and terrorist attacks may affect our revenue and results of operations.

Terrorist attacks and foreign hostilities cause regularly scheduled programming to be pre-empted by commercial-free network news coverage of these events, which would result in lost advertising revenue. In the future, we may experience a loss of advertising revenue and incur additional broadcasting expenses in the event that there is a terrorist attack against the United States or if the United States engages in foreign hostilities. As a result, advertising may not be aired, and the revenue for the advertising on such days would be lost, adversely affecting our results of operations for the period in which this occurs. In addition, there can be no assurance that advertisers will agree to run such advertising in future time periods or that space will be available for such advertising.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3. Defaults Upon Senior Securities

None

Item 4. Submission of Matters to a Vote of Security Holders

None.

Item 5. Other Information

None

Item 6. Exhibits

(a) Exhibits:

10.1*†	Renewal Letter Agreement dated January 6, 2006 between CBS Television and Fisher Broadcasting —Oregon TV LLC (filed as Exhibit 10.13 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005 (File No. 000-22439)).
10.2*†	Renewal Letter Agreement dated January 6, 2006 between CBS Television and Fisher Broadcasting —Washington TV LLC (filed as Exhibit 10.14 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005 (File No. 000-22439)).
10.3*†	Renewal Letter Agreement dated January 6, 2006 between CBS Television and Fisher Broadcasting —Idaho TV LLC (filed as Exhibit 10.15 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005 (File No. 000-22439)).
10.4*†	Renewal Letter Agreement dated January 6, 2006 between CBS Television and Fisher Broadcasting —S.E. Idaho TV LLC (filed as Exhibit 10.16 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005 (File No. 000-22439)).
31.1	Certification of Chief Executive Officer.
31.2	Certification of Chief Financial Officer.
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*	Incorporated by reference.
†	Certain information in this exhibit has been omitted and filed separately with the Commission pursuant to a confidential treatment request under 17 C.F.R. Sections 200.80(b)(4), 200.83 and 230.406.

37

SIGNATURES

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.

	FISHER COMMUNICATIONS, INC.                (Registrant)
Dated: May 9, 2006	/s/ Robert C. Bateman
	Robert C. Bateman
	Senior Vice President and Chief Financial Officer

38

EXHIBIT INDEX

Exhibit No.	Description
10.1*†	Renewal Letter Agreement dated January 6, 2006 between CBS Television and Fisher Broadcasting —Oregon TV LLC (filed as Exhibit 10.13 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005 (File No. 000-22439)).
10.2*†	Renewal Letter Agreement dated January 6, 2006 between CBS Television and Fisher Broadcasting —Washington TV LLC (filed as Exhibit 10.14 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005 (File No. 000-22439)).
10.3*†	Renewal Letter Agreement dated January 6, 2006 between CBS Television and Fisher Broadcasting —Idaho TV LLC (filed as Exhibit 10.15 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005 (File No. 000-22439)).
10.4*†	Renewal Letter Agreement dated January 6, 2006 between CBS Television and Fisher Broadcasting —S.E. Idaho TV LLC (filed as Exhibit 10.16 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005 (File No. 000-22439)).
31.1	Certification of Chief Executive Officer.
31.2	Certification of Chief Financial Officer.
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*	Incorporated by reference.
†	Certain information in this exhibit has been omitted and filed separately with the Commission pursuant to a confidential treatment request under 17 C.F.R. Sections 200.80(b)(4), 200.83 and 230.406.

39

EX-31.1 2 v20380exv31w1.htm EXHIBIT 31.1

Exhibit 31.1

CHIEF EXECUTIVE OFFICER CERTIFICATION

I, Colleen B. Brown, President and Chief Executive Officer of Fisher Communications, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Fisher 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 officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

d) disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2006

/s/ Colleen B. Brown  

Colleen B. Brown 

President and Chief Executive Officer 

EX-31.2 3 v20380exv31w2.htm EXHIBIT 31.2

Exhibit 31.2

CHIEF FINANCIAL OFFICER CERTIFICATION

I, Robert C. Bateman, Chief Financial Officer of Fisher Communications, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Fisher 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 officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

d) disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2006

/s/ Robert C. Bateman  

Robert C. Bateman 

Senior Vice President
Chief Financial Officer 

EX-32.1 4 v20380exv32w1.htm EXHIBIT 32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Fisher Communications, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2006 as filed with the Securities and Exchange Commission on the date hereof (the “Form 10-Q), I, Colleen B. Brown, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
(2)	The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 9, 2006

/s/ Colleen B. Brown  

Colleen B. Brown. 

President and Chief Executive Officer 

EX-32.2 5 v20380exv32w2.htm EXHIBIT 32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Fisher Communications, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2006 as filed with the Securities and Exchange Commission on the date hereof (the “Form 10-Q”), I, Robert C. Bateman, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
(2)	The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 9, 2006

/s/ Robert C. Bateman  

Robert C. Bateman 

Senior Vice President
Chief Financial Officer 

-----END PRIVACY-ENHANCED MESSAGE-----

EX-31.1

Exhibit 31.1

CHIEF EXECUTIVE OFFICER CERTIFICATION

I, Colleen B. Brown, President and Chief Executive Officer of Fisher Communications, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Fisher 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 officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

d) disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2006

/s/ Colleen B. Brown  

Colleen B. Brown 

President and Chief Executive Officer 

EX-31.2

Exhibit 31.2

CHIEF FINANCIAL OFFICER CERTIFICATION

I, Robert C. Bateman, Chief Financial Officer of Fisher Communications, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Fisher 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 officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and

d) disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2006

/s/ Robert C. Bateman  

Robert C. Bateman 

Senior Vice President
Chief Financial Officer 

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Fisher Communications, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2006 as filed with the Securities and Exchange Commission on the date hereof (the “Form 10-Q), I, Colleen B. Brown, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
(2)	The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 9, 2006

/s/ Colleen B. Brown  

Colleen B. Brown. 

President and Chief Executive Officer 

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Fisher Communications, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2006 as filed with the Securities and Exchange Commission on the date hereof (the “Form 10-Q”), I, Robert C. Bateman, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
(2)	The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 9, 2006

/s/ Robert C. Bateman  

Robert C. Bateman 

Senior Vice President
Chief Financial Officer