content_image/175977.jpg
S&P 500 which yielded 12.8%. Despite these returns, we are still trading at a discount to our pre-recession enterprise multiple and stock price. 

The challenge for us going-forward is how best to put our significant free cash flow to use in order to generate meaningful returns for our shareholders. As such, in addition to the recently declared $0.12 quarterly dividend per share, we have earmarked up to $36.5 million in 2011 to reinvest in our television operations in such projects as equipment upgrades and high-definition newscasts which will provide us either a market competitive edge or operating efficiencies. We also recently negotiated with our banks to reduce our borrowing costs and provide more flexibility for us to use our cash flow, including the ability to distribute up to $100 million per year to shareholders and to pursue television acquisitions should the opportunity arise. In 2011, we anticipate monetizing some of our non-broadcast investments producing positive returns which will create additional free cash for us. 

On the technology front, the industry continues to work towards a mobile television offering. This past year, the Open Mobile Video Coalition ("OMVC") conducted field trials and consumer feedback was extremely positive. Results reflected that consumers watched broadcast television on mobile devices in a variety of locations such as in the workplace and while commuting and running errands. Afternoon daytime (12pm to 5pm) was the most watched daypart and local broadcast news the most watched program on the mobile devices. 

In 2010, we joined the Mobile500 Alliance, a voluntary coalition of leading television broadcasters reaching 92% of the U.S. television households. The Mobile500's goal is to "create a vibrant new growth industry…that serves the public interest…and delivers a new generation of affordable mobile television services to consumers." To fully appreciate the potential of a mobile television service, one should consider the evolution of the telephone, which began as a land-based system and transformed into a mobile cellular service. Today, over 85% of the U.S. population has a mobile phone, many of these which are capable of downloading video, games and music. We view the future of broadcast television as heading down a similar path whereby mobile television devices, such as smart phones and video tablets, become as commonplace as the in-home fixed television set. We believe the broadcast industry's offering of video and entertainment products is unquestionably superior to any other service available to the market. Not only do we offer real-time, wide screen, high quality video, but we have the most highly-rated and popular shows to offer such as local news, sports, and network programs. On the technology front, we believe our broadcast infrastructure provides the most efficient and robust delivery system compared to the wireless phone companies, which rely on a system of small cellular towers that deliver video on a one-to-one basis. Their delivery system often results in a low-quality picture and inefficiencies whereby the greater the traffic on the network, the greater the picture degradation and buffering issues. We believe there is no amount of additional spectrum that can mitigate this problem. Broadcasters, on the other hand, using our over-the-air spectrum, can provide a signal that simultaneously covers the entire market from one transmission location. This "one-to- many" mass audience reach means that we are not subject to the same network traffic concerns that plague the telephone and Internet delivery platforms, resulting in a high quality, low cost consumer experience. 

While the industry initiates the mobile TV model, we continue to find alternative ways to use our spectrum while serving the public interest. Currently, we broadcast 

various program formats on our secondary digital tier including TheCoolTV and The Country Network, both music television networks; Estrella TV, a Spanish language network; ThisTV, featuring movies; and MyNetworkTV's syndicated program offering. 

There is no question that the consumer media landscape is evolving. But with it comes opportunities for us to grow and offer a broader array of solutions for our customers and increased levels of engagement with our viewers. This past year we launched our digital interactive new media strategy, whose goal it is to provide local businesses another means of engaging consumers using non- traditional media outlets including mobile devices and social media through the Internet. Among our product offerings are Mobi Deals, Hey It's Half Off, loyalty programs and mobile website and design development. 

As we look to 2011 and beyond, we are very encouraged by the improving economy and increased advertising demand by the auto and political categories, areas which we expect will drive our revenue growth, free cash flow and, therefore, potential dividend returns. We feel confident in the strength of the network/affiliate model, and are especially excited about the long term prospects of a mobile digital television service, a product that we anticipate will change the industry and the way consumers watch television. So despite the economic downturn and the yet-to-come killer Internet app, we had our best EBITDA performance and credit profile in a decade. We believe that broadcast television with its "one-to-many" mass audience reach, quality programming, and strong branding capabilities will remain now and for years to come as the dominant and most powerful advertising and entertainment medium. We are confident in our future, our adaptability, and our relevance to meet consumer and business needs in this ever-changing digital world. 

We thank you, our shareholders, for your continued support and look forward to our future successes. 

Sincerely, 

<img src='content_image/175977.jpg'>

