Attached files
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EX-31.1 - DENNIS THATCHER 31.1 CERTIFICATION - MISSION BROADCASTING INC | dt31_1.htm |
EX-32.1 - DENNIS THATCHER 32.1 CERTIFICATION - MISSION BROADCASTING INC | dt32_1.htm |
EXCEL - IDEA: XBRL DOCUMENT - MISSION BROADCASTING INC | Financial_Report.xls |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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for the quarterly period ended September 30, 2012
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OR
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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for the transition period from to .
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Commission File Number: 333-62916-02
MISSION BROADCASTING, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
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51-0388022
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(State of Organization or Incorporation)
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(IRS Employer Identification No.)
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30400 Detroit Road, Suite 304, Westlake, Ohio
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44145
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(Address of Principal Executive Offices)
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(Zip Code)
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(440) 526-2227
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(Registrant’s Telephone Number, Including Area Code)
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Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that it was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (check one):
Large accelerated filer
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¨
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Accelerated filer
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¨
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Non-accelerated filer
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x
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Smaller reporting company
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¨
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(Do not check if a smaller reporting company)
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Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
As of November 2, 2012, the Registrant had 1,000 shares of common stock outstanding, held by two shareholders.
TABLE OF CONTENTS
Page
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PART I
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FINANCIAL INFORMATION
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ITEM 1.
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Financial Statements (Unaudited)
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Condensed Balance Sheets as of September 30, 2012 and December 31, 2011
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1
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Condensed Statements of Operations for the three and nine months ended September 30, 2012 and 2011
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2
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Condensed Statement of Changes in Shareholders’ Deficit for the nine months ended September 30, 2012
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3
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Condensed Statements of Cash Flows for the nine months ended September 30, 2012 and 2011
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4
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Notes to Condensed Financial Statements
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5
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ITEM 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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15
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ITEM 3.
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Quantitative and Qualitative Disclosures about Market Risk
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23
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ITEM 4.
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Controls and Procedures
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24
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PART II
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OTHER INFORMATION
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ITEM 1.
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Legal Proceedings
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24
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ITEM 1A.
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Risk Factors
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24
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ITEM 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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24
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ITEM 3.
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Defaults Upon Senior Securities
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24
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ITEM 4.
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Mine Safety Disclosures
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24
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ITEM 5.
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Other Information
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24
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ITEM 6.
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Exhibits
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25
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PART I. FINANCIAL INFORMATION
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ITEM 1. Financial Statements
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MISSION BROADCASTING, INC.
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||||||||
CONDENSED BALANCE SHEETS
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||||||||
(in thousands, except share information, unaudited)
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September 30,
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December 31,
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|||||||
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2012
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2011
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ASSETS
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Current assets:
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Cash and cash equivalents
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$ | 435 | $ | 1,898 | ||||
Accounts receivable, net of allowance for doubtful accounts of $64 and $113,
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||||||||
respectively
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3,443 | 2,511 | ||||||
Current portion of broadcast rights
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3,841 | 3,309 | ||||||
Due from Nexstar Broadcasting, Inc.
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5,313 | - | ||||||
Prepaid expenses and other current assets
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182 | 66 | ||||||
Total current assets
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13,214 | 7,784 | ||||||
Property and equipment, net
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22,201 | 24,140 | ||||||
Broadcast rights
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4,020 | 1,950 | ||||||
Goodwill
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18,730 | 18,730 | ||||||
FCC licenses
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21,939 | 21,939 | ||||||
Other intangible assets, net
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11,465 | 15,276 | ||||||
Other noncurrent assets, net
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7,171 | 1,237 | ||||||
Total assets
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$ | 98,740 | $ | 91,056 | ||||
LIABILITIES AND SHAREHOLDERS' DEFICIT
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||||||||
Current liabilities:
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||||||||
Current portion of debt
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$ | 390 | $ | 390 | ||||
Current portion of broadcast rights payable
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4,225 | 3,782 | ||||||
Accounts payable
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159 | 192 | ||||||
Accrued expenses
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1,123 | 740 | ||||||
Taxes payable
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69 | 78 | ||||||
Interest payable (Note 6)
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13,239 | 6,022 | ||||||
Deferred revenue
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338 | 408 | ||||||
Due to Nexstar Broadcasting, Inc.
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- | 4,729 | ||||||
Total current liabilities
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19,543 | 16,341 | ||||||
Debt (Note 6)
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366,848 | 363,087 | ||||||
Broadcast rights payable
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4,048 | 2,113 | ||||||
Deferred tax liabilities
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10,507 | 9,600 | ||||||
Deferred revenue
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140 | 242 | ||||||
Deferred gain on sale of assets
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1,474 | 1,623 | ||||||
Other liabilities
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5,241 | 5,152 | ||||||
Total liabilities
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407,801 | 398,158 | ||||||
Commitments and contingencies
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||||||||
Shareholders' deficit:
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||||||||
Common stock - $1 par value, 1,000 shares authorized, issued and outstanding as
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||||||||
of each of September 30, 2012 and December 31, 2011
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1 | 1 | ||||||
Subscription receivable
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(1 | ) | (1 | ) | ||||
Contra equity due from Nexstar Broadcasting, Inc. on debt issuance (Note 6)
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(193,979 | ) | (189,330 | ) | ||||
Accumulated deficit
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(115,082 | ) | (117,772 | ) | ||||
Total shareholders' deficit
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(309,061 | ) | (307,102 | ) | ||||
Total liabilities and shareholders' deficit
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$ | 98,740 | $ | 91,056 |
The accompanying Notes are an integral part of these Condensed Financial Statements.
MISSION BROADCASTING, INC.
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CONDENSED STATEMENTS OF OPERATIONS
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(in thousands, unaudited)
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||||||||||||||||
Three Months Ended
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Nine Months Ended
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|||||||||||||||
September 30,
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September 30,
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|||||||||||||||
2012
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2011
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2012
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2011
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Net broadcast revenue
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$ | 4,707 | $ | 4,630 | $ | 13,937 | $ | 14,542 | ||||||||
Revenue from Nexstar Broadcasting, Inc.
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8,012 | 6,469 | 23,304 | 19,985 | ||||||||||||
Net revenue
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12,719 | 11,099 | 37,241 | 34,527 | ||||||||||||
Operating expenses:
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Direct operating expenses, excluding depreciation and
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||||||||||||||||
amortization
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1,833 | 2,014 | 5,347 | 5,795 | ||||||||||||
Selling, general, and administrative expenses, excluding
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depreciation and amortization
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794 | 1,110 | 2,041 | 3,351 | ||||||||||||
Fees incurred pursuant to local service agreements
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with Nexstar Broadcasting, Inc.
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1,935 | 1,785 | 5,805 | 5,355 | ||||||||||||
Amortization of broadcast rights
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1,099 | 1,192 | 3,214 | 3,434 | ||||||||||||
Amortization of intangible assets
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1,270 | 1,271 | 3,811 | 4,261 | ||||||||||||
Depreciation
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701 | 792 | 2,142 | 2,366 | ||||||||||||
(Gain) loss on asset disposal, net
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- | (27 | ) | - | 52 | |||||||||||
Total operating expenses
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7,632 | 8,137 | 22,360 | 24,614 | ||||||||||||
Income from operations
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5,087 | 2,962 | 14,881 | 9,913 | ||||||||||||
Interest expense, net
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(3,750 | ) | (3,684 | ) | (11,206 | ) | (10,994 | ) | ||||||||
Income (loss) before income taxes
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1,337 | (722 | ) | 3,675 | (1,081 | ) | ||||||||||
Income tax expense
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(338 | ) | (313 | ) | (985 | ) | (936 | ) | ||||||||
Net income (loss)
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$ | 999 | $ | (1,035 | ) | $ | 2,690 | $ | (2,017 | ) |
The accompanying Notes are an integral part of these Condensed Financial Statements.
MISSION BROADCASTING, INC.
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CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS' DEFICIT
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For the Nine Months Ended September 30, 2012
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(in thousands, unaudited)
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Contra Equity
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Due from
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||||||||||||||||||||||||
Nexstar
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Broadcasting,
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Inc. on
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Total
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Common Stock
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Subscription
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Debt
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Accumulated
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Shareholders'
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||||||||||||||||||||
Shares
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Amount
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Receivable
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Issuance
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Deficit
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Deficit
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|||||||||||||||||||
Balance as of December 31, 2011
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1,000 | $ | 1 | $ | (1 | ) | $ | (189,330 | ) | $ | (117,772 | ) | $ | (307,102 | ) | |||||||||
Discount accretion on
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8.875% senior secured
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||||||||||||||||||||||||
second lien notes,
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Nexstar portion (Note 6)
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- | - | - | (440 | ) | - | (440 | ) | ||||||||||||||||
Interest accrual on 8.875%
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senior secured second lien
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notes, Nexstar portion, net
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of Nexstar payments
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(Note 6)
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- | - | - | (4,209 | ) | - | (4,209 | ) | ||||||||||||||||
Net income
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- | - | - | - | 2,690 | 2,690 | ||||||||||||||||||
Balance as of September 30, 2012
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1,000 | $ | 1 | $ | (1 | ) | $ | (193,979 | ) | $ | (115,082 | ) | $ | (309,061 | ) |
The accompanying Notes are an integral part of these Condensed Financial Statements.
MISSION BROADCASTING, INC.
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CONDENSED STATEMENTS OF CASH FLOWS
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(in thousands, unaudited)
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||||||||
Nine Months Ended
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||||||||
September 30,
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||||||||
2012
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2011
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|||||||
Cash flows from operating activities:
|
||||||||
Net income (loss)
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$ | 2,690 | $ | (2,017 | ) | |||
Adjustments to reconcile net income (loss) to net cash provided by operating
|
||||||||
activities:
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||||||||
Deferred income taxes
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913 | 880 | ||||||
Provision for bad debts
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5 | 46 | ||||||
Depreciation of property and equipment
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2,142 | 2,366 | ||||||
Amortization of intangible assets
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3,811 | 4,261 | ||||||
Amortization of debt financing costs
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167 | 160 | ||||||
Amortization of broadcast rights, excluding barter
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1,044 | 1,172 | ||||||
Payments for broadcast rights
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(1,268 | ) | (1,376 | ) | ||||
Loss on asset disposal, net
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- | 52 | ||||||
Deferred gain recognition
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(149 | ) | (149 | ) | ||||
Amortization of debt discount
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314 | 286 | ||||||
Changes in operating assets and liabilities:
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||||||||
Accounts receivable
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(937 | ) | (219 | ) | ||||
Prepaid expenses and other current assets
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(116 | ) | 50 | |||||
Other noncurrent assets
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- | (17 | ) | |||||
Taxes payable
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(9 | ) | (14 | ) | ||||
Accounts payable and accrued expenses
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266 | (146 | ) | |||||
Interest payable
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3,008 | 3,002 | ||||||
Deferred revenue
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(172 | ) | (204 | ) | ||||
Other noncurrent liabilities
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89 | 82 | ||||||
Due to/due from Nexstar Broadcasting, Inc.
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(10,042 | ) | (7,284 | ) | ||||
Net cash provided by operating activities
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1,756 | 931 | ||||||
Cash flows from investing activities:
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||||||||
Purchases of property and equipment
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(166 | ) | (419 | ) | ||||
Escrow payment on station acquisition
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(6,000 | ) | - | |||||
Proceeds from disposals of property and equipment
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- | 18 | ||||||
Net cash used in investing activities
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(6,166 | ) | (401 | ) | ||||
Cash flows from financing activities:
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||||||||
Proceeds from issuance of long-term debt
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4,000 | - | ||||||
Repayments of long-term debt
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(993 | ) | (292 | ) | ||||
Payments for debt financing costs
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(60 | ) | - | |||||
Refund of debt financing costs
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- | 8 | ||||||
Net cash provided by (used in) financing activities
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2,947 | (284 | ) | |||||
Net (decrease) increase in cash and cash equivalents
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(1,463 | ) | 246 | |||||
Cash and cash equivalents at beginning of period
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1,898 | 1,250 | ||||||
Cash and cash equivalents at end of period
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$ | 435 | $ | 1,496 | ||||
Supplemental information:
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Interest paid
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$ | 7,717 | $ | 7,547 | ||||
Income taxes paid, net
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$ | 81 | $ | 70 | ||||
Non-cash investing activities:
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||||||||
Accrued purchases of property and equipment
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$ | 53 | $ | 26 | ||||
Accrued debt financing costs
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$ | 47 | $ | - |
The accompanying Notes are an integral part of these Condensed Financial Statements.
MISSION BROADCASTING, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
1.
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Organization and Business Operations
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As of September 30, 2012, Mission Broadcasting, Inc. (“Mission” or the “Company”) owned and operated 17 television stations and four digital multicast channels, affiliated with the NBC, ABC, CBS, FOX, MyNetworkTV or Bounce TV television networks, in markets located in New York, Pennsylvania, Illinois, Indiana, Missouri, Louisiana, Texas and Montana. The Company operates in one reportable television broadcasting segment. Through local service agreements, Nexstar Broadcasting, Inc. (“Nexstar”) provides sales and operating services to all of the Mission television stations (see Note 4).
The Company is highly leveraged, which makes it vulnerable to changes in general economic conditions. The Company’s ability to repay or refinance its debt will depend on, among other things, financial, business, market, competitive and other conditions, many of which are beyond its control, as well as Nexstar maintaining its pledge to continue the local service agreements with the Company’s stations. Management believes that with Nexstar’s pledge to continue the local service agreements as described in a letter of support dated March 23, 2012, the Company’s available cash, anticipated cash flow from operations and available borrowings under its senior secured credit facility should be sufficient to fund working capital, capital expenditure requirements, interest payments and scheduled debt principal payments for at least the next twelve months from September 30, 2012, enabling Mission to continue to operate as a going concern.
Nexstar’s senior secured credit facility agreement contains covenants which require Nexstar to comply with certain financial ratios, including (a) a maximum consolidated total leverage ratio, (b) a maximum consolidated first lien indebtedness ratio, and (c) a minimum consolidated fixed charge coverage ratio. The covenants, which are calculated on a quarterly basis, include the combined results of Nexstar and Mission. The Company’s senior secured credit facility agreement does not contain financial covenant ratio requirements; however, it does include an event of default if Nexstar does not comply with all covenants contained in its credit agreement. As of September 30, 2012, Nexstar has informed Mission that it was in compliance with all covenants contained in the credit agreements governing the Company’s senior secured credit facility and the indentures governing the publicly-held notes.
2.
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Summary of Significant Accounting Policies
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Interim Financial Statements
The Condensed Financial Statements as of September 30, 2012, and for the three and nine months ended September 30, 2012 and 2011, are unaudited. However, in the opinion of management, such financial statements include all adjustments (consisting solely of normal recurring adjustments) necessary for the fair statement of the financial information included herein in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The preparation of the Condensed Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the period. Actual results could differ from those estimates. Results of operations for interim periods are not necessarily indicative of results for the full year. These Condensed Financial Statements should be read in conjunction with the Financial Statements and related Notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011. The Balance Sheet as of December 31, 2011 has been derived from the audited Financial Statements as of that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements.
Basis of Presentation
Certain prior year amounts have been reclassified to conform to the current year presentation. The acquisition of WTVW from Nexstar, as discussed in Note 3 to the Company’s Financial Statements included in its Annual Report on Form 10-K for the year ended December 31, 2011, was deemed under U.S. GAAP to be a change in reporting entity. The historical results of the Company have therefore been retrospectively adjusted as if WTVW was owned and operated by the Company as of the earliest period presented.
Recent Accounting Pronouncements
In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurements and Disclosure Requirements in U.S. GAAP and IFRSs (“ASU 2011-04”). ASU 2011-04 clarifies certain topics regarding fair value measurement and adds some disclosures for fair value measurements. The update was effective for the Company beginning on January 1, 2012. The implementation of this standard did not have a material impact on the Company’s financial position or results of operations.
In September 2011, the FASB issued ASU No. 2011-08, Testing Goodwill for Impairment (Topic 350) (“ASU 2011-08”). ASU 2011-08 allows companies to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the annual two-step goodwill impairment test. The update is effective for the Company’s goodwill impairment testing performed in the fourth quarter of 2012, but early adoption is permitted. The Company does not expect the implementation of this standard to have a material impact on its financial position or results of operations.
In July 2012, the FASB issued ASU No. 2012-02, Testing Indefinite-Lived Intangible Assets for Impairment (Topic 350) (“ASU 2012-02”). ASU 2012-02 allows companies to first assess qualitative factors to determine whether it is more likely than not that the intangible asset is impaired as a basis for determining whether it is necessary to perform the annual quantitative indefinite-lived intangible asset impairment test. The update is effective for the Company’s indefinite-lived intangible asset impairment testing performed in the fourth quarter of 2013, but early adoption is permitted. The Company does not expect the implementation of this standard to have a material impact on its financial position or results of operations.
3.
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Acquisitions
|
On July 18, 2012, Mission entered into an asset purchase agreement with Newport Television LLC (“Newport”) to acquire the assets of KLRT, the FOX affiliate, and KASN, the CW affiliate, in Little Rock, Arkansas for $60.0 million, subject to adjustments for working capital acquired. In addition, Nexstar entered into a separate asset purchase agreement with Newport to purchase the assets of ten other television stations (collectively, the “Newport Acquisitions”). A deposit of $6.0 million was made by Mission upon signing the asset purchase agreement. The Company will finance the purchase price with new bank loans (See Note 6). The Company expects the acquisitions to close in December 2012. Both acquisitions are subject to FCC approval and other customary conditions.
4.
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Local Service Agreements with Nexstar
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The Company has entered into local service agreements with Nexstar to provide sales and operating services to all of its stations. For the stations with a shared services agreement (“SSA”), the Nexstar station in the market provides certain services including news production, technical maintenance and security, in exchange for monthly payments to Nexstar. For each station that the Company has entered into an SSA, it has also entered into a joint sales agreement (“JSA”), whereby Nexstar sells the advertising time of the station and retains a percentage of the net revenue it generates in return for monthly payments to Mission of the remaining percentage of net revenue. For the stations with a time brokerage agreement (“TBA”), Nexstar programs most of the station’s broadcast time, sells the station’s advertising time and retains the advertising revenue it generates in exchange for monthly payments to Mission, based on the station’s monthly operating expenses. JSA and TBA fees generated from Nexstar under the agreements are reported as “Revenue from Nexstar Broadcasting, Inc.,” and SSA fees incurred by Mission under the agreements are reported as “Fees incurred pursuant to local service agreements with Nexstar Broadcasting, Inc.” in the accompanying Statements of Operations.
Under these agreements, Mission is responsible for certain operating expenses of its stations and therefore may have unlimited exposure to any potential operating losses. Mission will continue to operate its stations under the SSAs and JSAs or TBAs until the termination of such agreements. The SSAs and JSAs generally have a term of ten years. Nexstar indemnifies Mission from Nexstar’s activities pursuant to the local service agreements to which Nexstar is a party.
Under the local service agreements, Nexstar receives substantially all of the Company’s available cash, after satisfaction of operating costs and debt obligations. The Company anticipates that Nexstar will continue to receive substantially all of its available cash, after satisfaction of operating costs and debt obligations. In compliance with FCC regulations for both the Company and Nexstar, Mission maintains complete responsibility for and control over programming, finances, personnel and operations of its stations. Mission had the following local service agreements in effect with Nexstar as of September 30, 2012:
Station
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Market
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Type of Agreement
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Expiration
|
Consideration from Nexstar
|
||||
WFXP
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Erie, PA
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TBA
|
8/16/16
|
Monthly payments received from Nexstar
|
||||
KHMT
|
Billings, MT
|
TBA
|
12/13/17
|
Monthly payments received from Nexstar
|
||||
KJTL/KJBO-LP
|
Wichita Falls, TX-Lawton, OK
|
SSA
|
5/31/19
|
$60 thousand per month paid to Nexstar
|
||||
JSA
|
5/31/19
|
70% of net revenue received from Nexstar
|
||||||
WYOU
|
Wilkes Barre-Scranton, PA
|
SSA
|
1/4/18
|
$35 thousand per month paid to Nexstar
|
||||
JSA
|
9/30/14
|
70% of net revenue received from Nexstar
|
||||||
KODE
|
Joplin, MO-Pittsburg, KS
|
SSA
|
3/31/22
|
$75 thousand per month paid to Nexstar
|
||||
JSA
|
9/30/14
|
70% of net revenue received from Nexstar
|
||||||
KRBC
|
Abilene-Sweetwater, TX
|
SSA
|
6/12/13
|
$25 thousand per month paid to Nexstar
|
||||
JSA
|
6/30/14
|
70% of net revenue received from Nexstar
|
||||||
KSAN
|
San Angelo, TX
|
SSA
|
5/31/14
|
$10 thousand per month paid to Nexstar
|
||||
JSA
|
5/31/14
|
70% of net revenue received from Nexstar
|
||||||
WAWV
|
Terre Haute, IN
|
SSA
|
5/8/13
|
$10 thousand per month paid to Nexstar
|
||||
JSA
|
5/8/13
|
70% of net revenue received from Nexstar
|
||||||
KCIT/KCPN-LP
|
Amarillo, TX
|
SSA
|
4/30/19
|
$50 thousand per month paid to Nexstar
|
||||
JSA
|
4/30/19
|
70% of net revenue received from Nexstar
|
||||||
KAMC
|
Lubbock, TX
|
SSA
|
2/15/19
|
$75 thousand per month paid to Nexstar
|
||||
JSA
|
2/15/19
|
70% of net revenue received from Nexstar
|
||||||
KOLR
|
Springfield, MO
|
SSA
|
2/15/19
|
$150 thousand per month paid to Nexstar
|
||||
JSA
|
2/15/19
|
70% of net revenue received from Nexstar
|
||||||
WUTR
|
Utica, NY
|
SSA
|
3/31/14
|
$10 thousand per month paid to Nexstar
|
||||
JSA
|
3/31/14
|
70% of net revenue received from Nexstar
|
||||||
WTVO
|
Rockford, IL
|
SSA
|
10/31/14
|
$75 thousand per month paid to Nexstar
|
||||
JSA
|
10/31/14
|
70% of net revenue received from Nexstar
|
||||||
KTVE
|
Monroe, LA-El Dorado, AR
|
SSA
|
1/16/18
|
$20 thousand per month paid to Nexstar
|
||||
JSA
|
1/16/18
|
70% of net revenue received from Nexstar
|
||||||
WTVW
|
Evansville, IN
|
SSA
|
11/30/19
|
$50 thousand per month paid to Nexstar
|
||||
JSA
|
11/30/19
|
70% of net revenue received from Nexstar
|
5.
|
Intangible Assets and Goodwill
|
Intangible assets subject to amortization consisted of the following (in thousands):
Estimated
|
September 30, 2012
|
December 31, 2011
|
||||||||||||||||||||||||||
useful life,
|
Accumulated
|
Accumulated
|
||||||||||||||||||||||||||
in years
|
Gross
|
Amortization
|
Net
|
Gross
|
Amortization
|
Net
|
||||||||||||||||||||||
Network affiliation
|
||||||||||||||||||||||||||||
agreements
|
15 | $ | 66,443 | $ | (55,981 | ) | $ | 10,462 | $ | 66,443 | $ | (52,830 | ) | $ | 13,613 | |||||||||||||
Other definite-lived
|
||||||||||||||||||||||||||||
intangible assets
|
1-15 | 13,118 | (12,115 | ) | 1,003 | 13,118 | (11,455 | ) | 1,663 | |||||||||||||||||||
Other intangible assets
|
$ | 79,561 | $ | (68,096 | ) | $ | 11,465 | $ | 79,561 | $ | (64,285 | ) | $ | 15,276 |
The following table presents the Company’s estimate of amortization expense for the remainder of 2012, each of the five succeeding years ended December 31 and thereafter for definite-lived intangible assets as of September 30, 2012 (in thousands):
Remainder of 2012
|
$
|
1,270
|
|||||
2013
|
4,254
|
||||||
2014
|
1,382
|
||||||
2015
|
1,098
|
||||||
2016
|
1,098
|
||||||
2017
|
974
|
||||||
Thereafter
|
1,389
|
The carrying amounts of goodwill and FCC licenses were as follows (in thousands):
Goodwill
|
FCC Licenses
|
|||||||||||||||||||||||
Accumulated
|
Accumulated
|
|||||||||||||||||||||||
Gross
|
Impairment
|
Net
|
Gross
|
Impairment
|
Net
|
|||||||||||||||||||
Balance as of December 31, 2011
|
$ | 20,280 | $ | (1,550 | ) | $ | 18,730 | $ | 32,636 | $ | (10,697 | ) | $ | 21,939 | ||||||||||
Balance as of September 30, 2012
|
$ | 20,280 | $ | (1,550 | ) | $ | 18,730 | $ | 32,636 | $ | (10,697 | ) | $ | 21,939 |
There were no changes recorded to goodwill or FCC licenses during the nine months ended September 30, 2012. The Company expenses as incurred any costs to renew or extend its FCC licenses. Indefinite-lived intangible assets are not subject to amortization, but are tested for impairment annually or whenever events or changes in circumstances indicate that such assets might be impaired. As of September 30, 2012, the Company did not identify any events that would trigger an impairment assessment.
6.
|
Debt
|
Long-term debt consisted of the following (in thousands):
September 30,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
Term loans
|
$ | 38,122 | $ | 38,415 | ||||
Revolving loans
|
10,000 | 6,700 | ||||||
8.875% Senior secured second lien notes due 2017, net of discount of $5,884
|
||||||||
and $6,638, respectively
|
319,116 | 318,362 | ||||||
367,238 | 363,477 | |||||||
Less: current portion
|
390 | 390 | ||||||
$ | 366,848 | $ | 363,087 |
2012 Transactions
In connection with the Newport Acquisition, Mission and Nexstar have secured commitments for $445.0 million in new senior secured credit facilities, comprised of $350.0 million in term loans due 2019 and $95.0 million in revolving credit due December 2017. Mission will use its proceeds from these loans to finance the Newport Acquisition, as well as for retirement of debt outstanding under its existing senior secured credit facility.
On October 24, 2012, Nexstar commenced an offer to sell $250.0 million of 6.875% Senior Notes due 2020 (the “6.875 Notes”) at par. The sale of the notes is expected to be completed on or about November 9, 2012. The proceeds of the 6.875% Notes will be used to retire Nexstar’s 7% Senior Subordinated Notes due 2014 (the “7% Notes”) and 7% Senior Subordinated PIK Notes due 2014 (the “7% PIK Notes”), repay a portion of the amounts outstanding under Nexstar’s senior secured credit facility and pay related fees and expenses. The 6.875% Notes will be senior unsecured obligations of Nexstar and will be guaranteed by Mission. On October 24, 2012, Nexstar commenced a tender offer to retire the 7% Notes and the 7% PIK Notes. The tender offer will expire on November 21, 2012, unless extended or earlier terminated by Nexstar in its sole discretion.
On October 23, 2012, Mission and Nexstar entered into amendments to each of their senior secured credit facilities. The amendments exclude, through and including December 31, 2012, from the calculation of indebtedness and prepayment requirement, the proceeds of the 6.875% Notes and permit Nexstar to hold the net proceeds of the 6.875% Notes, pending repurchase of its outstanding 7% Notes and 7% PIK Notes and refinancing of a portion of the borrowings outstanding under its senior secured credit facilities with such proceeds, until December 31, 2012.
On September 27, 2012, Mission and Nexstar entered into amendments to each of their senior secured credit facilities. The amendments remove the requirement for the Company to provide pro forma certificates to the lenders prior to entering into an acquisition and exclude any acquisitions from dollar limitations within the credit agreements if they are not to be funded with the existing senior secured credit facilities.
During the nine months ended September 30, 2012, the Company borrowed a net amount of $3.3 million under its senior secured credit facility resulting in a revolving loan balance of $10.0 million as of September 30, 2012.
Unused Commitments and Borrowing Availability
As of September 30, 2012, the Company had no unused revolving loan commitments under its senior secured credit facility.
Collateralization and Guarantees of Debt
Nexstar Broadcasting Group, Inc. (Nexstar’s ultimate parent) and its subsidiaries guarantee full payment of all obligations under the Mission senior secured credit facility in the event of its default. Similarly, Mission is a guarantor of Nexstar’s senior secured credit facility, the 7% PIK Notes and the 7% Notes issued by Nexstar. Mission will also be a guarantor of the 6.875% Notes. The senior secured credit facilities are collateralized by a security interest in substantially all the combined assets, excluding FCC licenses, of Nexstar and Mission.
Debt Covenants
The Mission senior secured credit facility agreement does not contain financial covenant ratio requirements, but does provide for default in the event Nexstar does not comply with all covenants contained in its credit agreement. Nexstar has informed the Company that it was in compliance with its debt covenants as of September 30, 2012.
8.875% Senior Secured Second Lien Notes
On April 19, 2010, Mission and Nexstar, as co-issuers, completed the issuance and sale of $325.0 million of 8.875% senior secured second lien notes due 2017 (“the 8.875% Notes”). The net proceeds to Mission and Nexstar from the sale of the 8.875% Notes were $316.8 million, net of $8.2 million original issuance discount. Mission received $131.9 million of the net proceeds and $184.9 million was received by Nexstar. As the obligations under the 8.875% Notes are joint and several to Nexstar and Mission, each entity reflects the full amount of the 8.875% Notes, net of discount, and related accrued interest in its separate financial statements. Further, the portions of the recorded balance of the 8.875% Notes and related accrued interest attributable to the respective co-issuer are reflected as a reduction to equity in Mission and Nexstar’s separate financial statements given Nexstar’s deemed controlling financial interest in Mission for financial reporting purposes. As of September 30, 2012, Nexstar had a balance of $186.3 million of debt and $7.7 million of interest payable related to the 8.875% Notes. As of December 31, 2011, Nexstar had a balance of $185.8 million of debt and $3.5 million of interest payable related to the 8.875% Notes. Nexstar’s balances of debt and interest payable are recorded in contra equity due from Nexstar Broadcasting, Inc. on the Balance Sheet.
Fair Value of Debt
The aggregate carrying amounts and estimated fair value of Mission’s debt were as follows (in thousands):
September 30,2012
|
December 31,2011
|
|||||||||||||||
Carrying
|
Fair
|
Carrying
|
Fair
|
|||||||||||||
Amount
|
Value
|
Amount
|
Value
|
|||||||||||||
Term loans(1)
|
$ | 38,122 | $ | 37,907 | $ | 38,415 | $ | 37,976 | ||||||||
Revolving loans(1)
|
10,000 | 9,981 | 6,700 | 6,664 | ||||||||||||
8.875% Senior secured second lien notes(2)
|
319,116 | 351,813 | 318,362 | 321,750 |
(1)
|
The fair value of bank credit facilities is computed based on borrowing rates currently available to Mission for bank loans
|
|||||||||||||||
with similar terms and average maturities. These fair value measurements are considered Level 3 (significant and
|
||||||||||||||||
unobservable).
|
||||||||||||||||
(2)
|
The fair value of Mission’s fixed rate debt is estimated based on bid prices obtained from an investment banking firm that
|
|||||||||||||||
regularly makes a market for these financial instruments. This fair value measurement is considered Level 2 (significant
|
||||||||||||||||
and observable).
|
7.
|
Income Taxes
|
The Company’s provision for income taxes is primarily comprised of deferred income taxes resulting from the amortization of goodwill and other indefinite-lived intangible assets for income tax purposes which are not amortized for financial reporting purposes. No benefit has been recognized on the Company’s taxable losses for the three and nine months ended September 30, 2012 and 2011 as the utilization of such losses is not more likely than not to be realized in the foreseeable future.
The deferred tax liabilities related to goodwill and other indefinite-lived intangible assets do not reverse on a scheduled basis and are not used to support the realization of deferred tax assets. The Company’s deferred tax assets before valuation allowance primarily result from federal and state net operating loss carryforwards (“NOLs”). The Company’s NOLs are available to reduce future taxable income if utilized before their expiration. The Company has provided a valuation allowance for certain deferred tax assets as it does not believe they are more likely than not to be realized through future taxable earnings.
8.
|
FCC Regulatory Matters
|
Television broadcasting is subject to the jurisdiction of the FCC under the Communications Act of 1934, as amended (the “Communications Act”). The Communications Act prohibits the operation of television broadcasting stations except under a license issued by the FCC, and empowers the FCC, among other things, to issue, revoke, and modify broadcasting licenses, determine the location of television stations, regulate the equipment used by television stations, adopt regulations to carry out the provisions of the Communications Act and impose penalties for the violation of such regulations. The FCC’s ongoing rule making proceedings could have a significant future impact on the television industry and on the operation of the Company’s stations. In addition, the U.S. Congress may act to amend the Communications Act or adopt other legislation in a manner that could impact the Company’s stations and the television broadcast industry in general.
The FCC has adopted rules with respect to the final conversion of existing low power and television translator stations to digital operations. The FCC has established a September 1, 2015 deadline by which low power and television translator stations must cease analog operations. The Company has transitioned its television translator operations on channels 52-69 to digital operations and will transition its remaining low power and television translator stations to digital operations prior to September 1, 2015.
Media Ownership
In 2006, the FCC initiated a rulemaking proceeding to review all of its media ownership rules, as required by the Communications Act. The FCC considered rules relating to ownership of two or more TV stations in a market, ownership of local TV and radio stations by daily newspapers in the same market, cross-ownership of local TV and radio stations, and changes to how the national TV ownership limits are calculated. In February 2008, the FCC adopted modest changes to its newspaper/broadcast cross-ownership rule while retaining the rest of its ownership rules then currently in effect. On July 6, 2011, the U.S. Court of Appeals for the Third Circuit vacated the FCC’s changes to its newspaper/broadcast cross-ownership rule while upholding the FCC’s retention of its other media ownership rules. In June 2012, the Supreme Court denied various petitions for Supreme Court review of the Third Circuit’s decision.
The FCC is required to review its media ownership rules every four years and to eliminate those rules it finds no longer serve the “public interest, convenience and necessity.” During 2009, the FCC held a series of hearings designed to evaluate possible changes to its rules. In May 2010, the FCC formally initiated its 2010 review of its media ownership rules with the issuance of a Notice of Inquiry (NOI). Numerous parties filed comments and reply comments in response to the NOI. In June and July 2011, the FCC released to the public eleven economic studies related to its media ownership rules. In December 2011, the FCC issued a Notice of Proposed Rulemaking (NPRM) to seek comment on specific proposed changes to its ownership rules. Among the specific changes proposed in the NPRM are (1) elimination of the contour overlap provision of the local television ownership rule (making the rule entirely DMA-based), (2) elimination of the radio/television cross-ownership rule, and (3) modest relaxation of the newspaper/broadcast cross-ownership rule along the lines of the changes in the 2006 proceeding that the court vacated. The NPRM also seeks comment on shared services agreements (SSAs) and other joint operating arrangements between television stations, and whether such agreements should be considered attributable. Comments and reply comments on the NPRM were filed in March and April 2012. The Company cannot predict what rules the FCC will adopt or when they will be adopted.
Spectrum
The FCC has initiated various proceedings to assess the availability of spectrum to meet future wireless broadband needs. The FCC’s March 2010 “National Broadband Plan” recommends the reallocation of 120 megahertz of the spectrum currently used for broadcast television for wireless broadband use. The FCC has thus far adopted rules permitting television stations to share a single 6 megahertz channel and requested comment on proposals that include, among other things, whether to add new frequency allocations in the television bands for licensed fixed and mobile wireless uses and whether to implement technical rule modifications to improve the viability of certain channels that are underutilized by digital television stations. In February 2012, Congress adopted legislation authorizing the FCC to conduct an incentive auction whereby television broadcasters could voluntarily relinquish all or part of their spectrum in exchange for consideration. On September 28, 2012, the FCC adopted a Notice of Proposed Rule Making seeking public comment on the design of the incentive auction and various technical issues related to the reallocation of television spectrum for mobile broadband use. A reallocation of television spectrum for wireless broadband use would likely involve a “repacking” of the television broadcast band, which would require some television stations to change channel or otherwise modify their technical facilities. Future steps to reallocate television spectrum to broadband use may be to the detriment of the Company’s investment in digital facilities, could require substantial additional investment to continue current operations, and may require viewers to invest in additional equipment or subscription services to continue receiving broadcast television signals. The Company cannot predict the timing or results of television spectrum reallocation efforts or their impact to its business.
Retransmission Consent
On March 3, 2011, the FCC initiated a Notice of Proposed Rulemaking to reexamine its rules (i) governing the requirements for good faith negotiations between multichannel video program distributors (MVPDs) and broadcasters, including implementing a prohibition on one station negotiating retransmission consent terms for another station under a local service agreement; (ii) for providing advance notice to consumers in the event of dispute; and (iii) to extend certain cable-only obligations to all MVPDs. The FCC has also asked for comment on eliminating the network non-duplication and syndicated exclusivity protection rules, which may permit MVPDs to import out-of-market television stations during a retransmission consent dispute. If the FCC prohibits joint negotiations or modifies the network non-duplication and syndicated exclusivity protection rules, such changes likely would affect the Company’s ability to sustain its current level of retransmission consent revenues or grow such revenues in the future and could have an adverse effect on the Company’s business, financial condition and results of operations. The Company cannot predict the resolution of the proposals or their impact to its business.
9.
|
Commitments and Contingencies
|
Guarantees of Nexstar Debt
Mission is a guarantor of and has pledged substantially all its assets, excluding FCC licenses, to guarantee Nexstar’s senior secured credit facility. Mission is also a guarantor of Nexstar’s 7% Notes and 7% PIK Notes and will guarantee the 6.875% Notes. The notes are general unsecured senior subordinated obligations subordinated to all of Mission’s senior debt. In the event that Nexstar is unable to repay amounts due under these debt obligations, Mission will be obligated to repay such amounts. The maximum potential amount of future payments that Mission would be required to make under these guarantees would be generally limited to the amount of borrowings outstanding under Nexstar’s senior secured credit facility, the 7% PIK Notes and the 7% Notes. As of September 30, 2012, Nexstar had a maximum commitment of $173.9 million under its senior secured credit facility, of which $131.9 million of debt was outstanding, had $3.9 million of the 7% senior subordinated notes outstanding and had $112.6 million of the 7% PIK senior subordinated notes outstanding.
Purchase Options Granted to Nexstar
In consideration of the guarantee of Mission’s bank credit facility by Nexstar Broadcasting Group, Inc. and its subsidiaries, Mission has granted Nexstar purchase options to acquire the assets and assume the liabilities of each Mission station, subject to FCC consent, for consideration equal to the greater of (1) seven times the station’s cash flow, as defined in the option agreement, less the amount of its indebtedness as defined in the option agreement, or (2) the amount of its indebtedness. Cash flow is defined as income or loss from operations, plus depreciation and amortization (including amortization of broadcast rights), interest income, non-cash trade and barter expenses, nonrecurring expenses (including time brokerage agreement fees), network compensation payments received or receivable and corporate management fees, less payments for broadcast rights, non-cash trade and barter revenue and network compensation revenue. Additionally, on November 29, 2011, Mission’s shareholders granted Nexstar an option to purchase any or all of the Company’s stock, subject to FCC consent, for a price equal to the pro rata portion of the greater of (1) five times the stations’ cash flow, as defined in the agreement, reduced by the amount of indebtedness, as defined in the agreement, or (2) $100,000. These option agreements (which expire on various dates between 2012 and 2022) are freely exercisable or assignable by Nexstar without consent or approval by Mission or its shareholders. The Company expects these option agreements to be renewed upon expiration.
Indemnification Obligations
In connection with certain agreements that the Company enters into in the normal course of its business, including local service agreements, business acquisitions and borrowing arrangements, the Company enters into contractual arrangements under which the Company agrees to indemnify the other party to such arrangement from losses, claims and damages incurred by the indemnified party for certain events as defined within the particular contract. Such indemnification obligations may not be subject to maximum loss clauses and the maximum potential amount of future payments the Company could be required to make under these indemnification arrangements may be unlimited. Historically, payments made related to these indemnifications have been insignificant and the Company has not incurred significant costs to defend lawsuits or settle claims related to these indemnification agreements.
Litigation
From time to time, the Company is involved with claims that arise out of the normal course of business. In the opinion of management, any resulting liability with respect to these claims would not have a material adverse effect on the Company’s financial position or results of operations.
10.
|
Subsequent Events
|
In October 2012, Nexstar commenced the offering of $250.0 million of 6.875% Notes and launched a tender offer to repurchase the 7% Notes and the 7% PIK Notes. Additionally, Mission and Nexstar each amended its respective senior secured credit agreement to allow for the offering and tender offer and adjust compliance ratios accordingly. See Note 6 for additional information on these events.
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with our Condensed Financial Statements and related Notes included elsewhere in this Quarterly Report on Form 10-Q and the Financial Statements and related Notes contained in our Annual Report on Form 10-K for the year ended December 31, 2011. Throughout this discussion, all references to “Mission”, “we”, “our”, “us” and the “Company” refer to Mission Broadcasting, Inc.
Overview of Operations
As of September 30, 2012, we owned and operated 17 television stations and four digital multicast channels. We have local service agreements with certain television stations owned by Nexstar, through which Nexstar provides various programming, sales or other services to our television stations. In compliance with FCC regulations for both Nexstar and us, we maintain complete responsibility for and control over programming, finances, personnel and operations for our stations.
On July 18, 2012, Mission entered into an asset purchase agreement with Newport to acquire the assets of two television stations in Little Rock, Arkansas for $60.0 million, subject to adjustments for working capital acquired. In addition, Nexstar entered into a separate asset purchase agreement with Newport to purchase the assets of ten other television stations. We and Nexstar have received Commitments to finance the acquisitions and retire existing debt with $445.0 million in new Senior Secured Credit Facilities comprised of $350.0 million in term loans due 2019 and $95.0 million in revolving credit due December 2017. A deposit of $6.0 million was made by Mission upon signing the asset purchase agreement. Mission expects to use the proceeds of the new senior secured credit facilities to finance the acquisition and retire the outstanding balances of our existing senior secured credit facility. We expect the acquisition to close in December 2012. Both acquisitions are subject to customary conditions.
The following table summarizes the various local service agreements our stations had in effect as of September 30, 2012 with Nexstar:
Service Agreements
|
Stations
|
TBA Only(1)
|
WFXP and KHMT
|
SSA & JSA(2)
|
KJTL, KJBO-LP, KOLR, KCIT, KCPN-LP, KAMC, KRBC, KSAN, WUTR, WAWV, WYOU, KODE, KTVE, WTVO and WTVW
|
(1)
|
We have a time brokerage agreement (“TBA”) for each of these stations which allows Nexstar to program most of each station’s broadcast time, sell each station’s advertising time and retain the advertising revenue generated in exchange for monthly payments to us.
|
(2)
|
We have both a shared services agreement (“SSA”) and a joint sales agreement (“JSA”) for each of these stations. The SSA allows the sharing of services including news production, technical maintenance and security, in exchange for Nexstar’s right to receive certain payments from us as described in the SSAs. The JSAs permit Nexstar to sell the station’s advertising time and retain a percentage of the net revenue from the station’s advertising time in return for monthly payments to us of the remaining percentage of the net revenue, as described in the JSAs.
|
Under the local service agreements, Nexstar receives substantially all of our available cash, after satisfaction of operating costs and debt obligations. We anticipate that Nexstar will continue to receive substantially all of our available cash, after satisfaction of operating costs and debt obligations. For more information about our local service agreements with Nexstar, refer to Note 3 of our Condensed Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.
The operating revenue of our stations is derived primarily from broadcast advertising revenue sold and collected by Nexstar and paid to us under the JSAs. Broadcast advertising revenue is affected by a number of factors, including the economic conditions of the markets in which we operate, the demographic makeup of those markets and the marketing strategy employed in each market. Advertising revenue is positively affected by strong local economies, national and regional political election campaigns, and certain events such as the Olympic Games or the Super Bowl. Because television broadcast stations rely on advertising revenue, declines in advertising budgets, particularly in recessionary periods, adversely affect advertising revenues in the broadcast industry, and as a result may contribute to a decrease in the revenue of broadcast television stations. The stations’ advertising revenue 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 even-numbered years, when state, congressional and presidential elections occur and advertising airs during the Olympic Games. As 2012 is an election year, we expect an increase in political advertising revenue to be reported in 2012 compared to 2011.
Most of our stations have a network affiliation agreement pursuant to which the network provides programming to the station during specified time periods, including prime time. ABC and CBS compensate some of our affiliated stations for distributing the network’s programming over the air and for allowing the network to keep a portion of advertising inventory during those time periods. The affiliation agreements with NBC, FOX, MyNetworkTV and Bounce do not provide for compensation. In recent years, in conjunction with the renewal of affiliation agreements, the amount of network compensation has been declining from year to year. We expect this trend to continue in the future. Therefore, revenue associated with network compensation is being eliminated and many of the networks are now seeking cash payments from their affiliates.
Each station acquires licenses to broadcast programming in non-news and non-network time periods. The licenses are either purchased from a program distributor for cash or the program distributor is allowed to sell some of the advertising inventory as compensation to eliminate or reduce the cash cost for the license. The latter practice is referred to as barter broadcast rights. The station records the estimated fair market value of the licenses, including any advertising inventory given to the program distributor, as a broadcast right asset and liability. Barter broadcast rights are recorded at management’s estimate of the value of the advertising time exchanged using historical advertising rates, which approximates the fair value of the program material received. The assets are amortized as a component of amortization of broadcast rights. Amortization is computed using the straight-line method over the license period or period of usage, whichever ends earlier. The cash broadcast rights liabilities are reduced by monthly payments while the barter liability is amortized over the life of the contract as barter revenue.
Our primary operating expense consists of fixed monthly SSA fees paid to Nexstar for news production and technical and other services. To a lesser extent, our operating expenses include employee compensation and related benefits. A large percentage of the costs involved in the operation of our stations remains fixed.
Historical Performance
Revenue
The following table sets forth the principal types of revenue earned by our stations (in thousands) and each type of revenue (other than barter revenue and revenue from Nexstar) as a percentage of total net broadcast revenue before barter:
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||||||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||||||||||||||||||
Amount
|
%
|
Amount
|
%
|
Amount
|
%
|
Amount
|
%
|
|||||||||||||||||||||||||
Retransmission compensation
|
$ | 3,876 | 96.4 | $ | 2,525 | 65.7 | $ | 11,461 | 97.4 | $ | 7,287 | 60.0 | ||||||||||||||||||||
Net advertising revenue
|
- | - | 1,205 | 31.4 | - | - | 4,497 | 37.0 | ||||||||||||||||||||||||
Network compensation
|
58 | 1.4 | 94 | 2.4 | 177 | 1.5 | 293 | 2.4 | ||||||||||||||||||||||||
Other
|
87 | 2.2 | 18 | 0.5 | 129 | 1.1 | 74 | 0.6 | ||||||||||||||||||||||||
Net broadcast revenue before
|
||||||||||||||||||||||||||||||||
barter
|
4,021 | 100.0 | 3,842 | 100.0 | 11,767 | 100.0 | 12,151 | 100.0 | ||||||||||||||||||||||||
Barter and trade revenue
|
686 | 788 | 2,170 | 2,391 | ||||||||||||||||||||||||||||
Revenue from Nexstar
|
8,012 | 6,469 | 23,304 | 19,985 | ||||||||||||||||||||||||||||
Net revenue
|
$ | 12,719 | $ | 11,099 | $ | 37,241 | $ | 34,527 |
Results of Operations
The following table sets forth a summary of our operations (in thousands) and the components of operating expense as a percentage of net revenue:
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||||||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||||||||||||||||||
Amount
|
%
|
Amount
|
%
|
Amount
|
%
|
Amount
|
%
|
|||||||||||||||||||||||||
Net revenue
|
$ | 12,719 | 100.0 | $ | 11,099 | 100.0 | $ | 37,241 | 100.0 | $ | 34,527 | 100.0 | ||||||||||||||||||||
Operating expenses:
|
||||||||||||||||||||||||||||||||
Corporate expenses
|
226 | 1.8 | 232 | 2.1 | 640 | 1.6 | 664 | 1.9 | ||||||||||||||||||||||||
Station direct operating expenses,
|
||||||||||||||||||||||||||||||||
net of trade
|
1,833 | 14.4 | 1,968 | 17.6 | 5,347 | 14.4 | 5,654 | 16.4 | ||||||||||||||||||||||||
Selling, general and administrative
|
||||||||||||||||||||||||||||||||
expenses
|
568 | 4.6 | 878 | 7.9 | 1,401 | 3.8 | 2,687 | 7.8 | ||||||||||||||||||||||||
Fees incurred pursuant to local
|
||||||||||||||||||||||||||||||||
service agreements
|
||||||||||||||||||||||||||||||||
with Nexstar
|
1,935 | 15.2 | 1,785 | 16.1 | 5,805 | 15.6 | 5,355 | 15.5 | ||||||||||||||||||||||||
(Gains) loss on asset disposal, net
|
- | - | (27 | ) | (0.2 | ) | - | - | 52 | 0.1 | ||||||||||||||||||||||
Barter and trade expense
|
686 | 5.4 | 808 | 7.3 | 2,170 | 5.8 | 2,403 | 7.0 | ||||||||||||||||||||||||
Depreciation and amortization
|
1,971 | 15.5 | 2,063 | 18.6 | 5,953 | 16.0 | 6,627 | 19.2 | ||||||||||||||||||||||||
Amortization of broadcast rights,
|
||||||||||||||||||||||||||||||||
excluding barter
|
413 | 3.2 | 430 | 3.9 | 1,044 | 2.8 | 1,172 | 3.4 | ||||||||||||||||||||||||
Income from operations
|
$ | 5,087 | $ | 2,962 | $ | 14,881 | $ | 9,913 |
Three Months Ended September 30, 2012 Compared to Three Months Ended September 30, 2011
Revenue
Net revenue for the three months ended September 30, 2012 increased by $1.6 million, or 14.6%, from the same period in 2011. This increase was primarily attributed to an increase in retransmission compensation.
Revenue from Nexstar was $8.0 million for the three months ended September 30, 2012, compared to $6.5 million for the same period in 2011. The revenue we earn from Nexstar through our JSAs is directly correlated to the advertising revenue earned at our stations, which has increased as a result of the increase in political advertising in 2012, which is an election year. We entered into a JSA with Nexstar for WTVW on December 1, 2011 which increased our JSA revenue and discontinued our net advertising revenue stream.
Compensation from retransmission consent and network affiliation agreements was $3.9 million for the three months ended September 30, 2012, compared to $2.6 million for the same period in 2011, an increase of $1.3 million, or 50.2%. The increase was primarily due to cable agreements providing for higher rates per subscriber during the year.
Operating Expenses
Corporate expenses were consistent at $0.2 million for each of the three months ended September 30, 2012 and 2011. Corporate expense relates to costs associated with the centralized management of our stations.
Station direct operating expenses, consisting primarily of news, engineering and programming, and selling, general and administrative expenses were $2.4 million for the three months ended September 30, 2012, compared to $2.8 million for the same period in 2011, a decrease of $0.4 million, or 15.6%. We entered into a JSA with Nexstar for WTVW on December 1, 2011 which reduced station direct operating expenses and selling, general and administrative expenses by $0.9 million. This reduction was partially offset by increased programming costs of $0.4 million primarily related to renegotiated network affiliation agreements.
Local service agreement fees associated with Nexstar relate to services provided by Nexstar in the production of newscasts, technical maintenance, promotional and administrative support under the SSAs. SSA fees were $1.9 million for the three months ended September 30, 2012 compared to $1.8 million for the same period in 2011. The increase was due to the SSA with Nexstar for WTVW entered into on December 1, 2011.
Amortization of intangible assets remained consistent at $1.3 million for each of the three months ended September 30, 2012 and 2011. Depreciation of property and equipment also remained consistent at $0.7 million and $0.8 million for the three months ended September 30, 2012 and 2011, respectively.
Interest Expense
Interest expense remained consistent at $3.8 million and $3.7 million for the three months ended September 30, 2012 and 2011, respectively.
Income Taxes
Income tax expense remained consistent at $0.3 million for each of the three months ended September 30, 2012 and 2011. Our provision for income taxes is primarily created by an increase in the deferred tax liabilities position during the year arising from the amortization of goodwill and other indefinite-lived intangible assets for income tax purposes which are not amortized for financial reporting purposes. No tax benefit was recorded with respect to the taxable losses for 2012 and 2011, as the utilization of such losses is not more likely than not to be realized in the foreseeable future.
Nine Months Ended September 30, 2012 Compared to Nine Months Ended September 30, 2011
Revenue
Net revenue for the nine months ended September 30, 2012 increased by $2.7 million, or 7.9%, from the same period in 2011. This increase was primarily attributed to an increase in retransmission compensation.
Revenue from Nexstar was $23.3 million for the nine months ended September 30, 2012, compared to $20.0 million for the same period in 2011, an increase of $3.3 million or 16.6%. The revenue we earn from Nexstar through our JSAs is directly correlated to the advertising revenue earned at our stations, which has increased as a result of the increase in political advertising in 2012, which is an election year. We entered into a JSA with Nexstar for WTVW on December 1, 2011 which increased our JSA revenue and discontinued our net advertising revenue stream.
Compensation from retransmission consent and network affiliation agreements was $11.6 million for the nine months ended September 30, 2012, compared to $7.6 million for the same period in 2011, an increase of $4.0 million, or 53.5%. The increase was primarily due to renegotiated cable agreements providing for higher rates per subscriber during the period.
Operating Expenses
Corporate expenses were $0.6 million and $0.7 million for the nine months ended September 30, 2012 and 2011, respectively. Corporate expense relates to costs associated with the centralized management of our stations.
Station direct operating expenses, consisting primarily of news, engineering and programming, and selling, general and administrative expenses were $6.7 million for the nine months ended September 30, 2012, compared to $8.3 million for the same period in 2011, a decrease of $1.6 million, or 19.1%. We entered into a JSA with Nexstar for WTVW on December 1, 2011 which reduced station direct operating expenses and selling, general and administrative expenses by $2.7 million. This reduction was partially offset by increased other program costs of $1.1 million primarily related to our renegotiated network affiliation agreements.
Local service agreement fees associated with Nexstar relate to services provided by Nexstar in the production of newscasts, technical maintenance, promotional and administrative support under the SSAs. SSA fees were $5.8 million for the nine months ended September 30, 2012, compared to $5.4 million for the same period in 2011. The increase was due to the SSA with Nexstar for WTVW entered into on December 1, 2011.
Amortization of intangible assets was $3.8 million for the nine months ended September 30, 2012 compared to $4.3 million for the same period in 2011, a decrease of $0.5 million, or 10.6%. The decrease was due to incremental amortization recorded in 2011 on network affiliation agreement intangibles on the WTVW FOX affiliate station which terminated on June 30, 2011. Depreciation of property and equipment remained relatively consistent at $2.2 million and $2.4 million for the nine months ended September 30, 2012 and 2011, respectively.
Interest Expense
Interest expense was $11.2 million for the nine months ended September 30, 2012, compared to $11.0 million for the same period in 2011, an increase of $0.2 million, or 1.9%. The increase was due to a $6.7 million borrowing on our revolving loan made on December 1, 2011 in connection with the acquisition of WTVW and $4.0 million borrowing on our revolving loan made to finance the deposit to acquire the assets of two television stations from Newport.
Income Taxes
Income tax expense remained consistent at $1.0 million and $0.9 million for the nine months ended September 30, 2012 and 2011, respectively. Our provision for income taxes is primarily created by an increase in the deferred tax liability position arising from the amortization of goodwill and other indefinite-lived intangible assets for income tax purposes which are not amortized for financial reporting purposes. No tax expense or benefit was recorded with respect to the net income (loss) in 2012 and 2011 as the utilization of net operating losses is not more likely than not to be realized in the foreseeable future.
Liquidity and Capital Resources
We are highly leveraged, which makes us vulnerable to changes in general economic conditions. Our ability to meet the future cash requirements described below depends on our ability to generate cash in the future, which is subject to general economic, financial, competitive, legislative, regulatory and other conditions, many of which are beyond our control. Our ability to meet future cash requirements is also dependent upon the local service agreements we have entered into with Nexstar. Under our local service agreements, Nexstar sells our advertising time and pays us a percentage of the amount collected. The payments we receive from Nexstar are a significant component of our cash flows. On March 23, 2012, Nexstar represented to us that it will continue the various local service agreements under which it provides sales and other services to our television stations, thereby providing financial support to enable us to continue to operate as a going concern. We believe that with Nexstar’s pledge to continue the local service agreements, our available cash, anticipated cash flow from operations and available borrowings under our senior secured credit facility should be sufficient to fund working capital, capital expenditure requirements, interest payments and scheduled debt principal payments for at least the next twelve months from September 30, 2012. In order to meet future cash needs we may, from time to time, borrow under our existing senior secured credit facility. We will continue to evaluate the best use of our operating cash flow among capital expenditures, acquisitions and debt reduction.
Overview
The following tables present summarized financial information management believes is helpful in evaluating our liquidity and capital resources (in thousands):
Nine Months Ended
|
||||||||
September 30,
|
||||||||
2012
|
2011
|
|||||||
Net cash provided by operating activities
|
$ | 1,756 | $ | 931 | ||||
Net cash used in investing activities
|
(6,166 | ) | (401 | ) | ||||
Net cash provided by (used in) financing activities
|
2,947 | (284 | ) | |||||
Net (decrease) increase in cash and cash equivalents
|
$ | (1,463 | ) | $ | 246 | |||
Cash paid for interest
|
$ | 7,717 | $ | 7,547 | ||||
Cash paid for taxes
|
81 | 70 |
As of
|
As of
|
|||||||
September 30,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
Cash and cash equivalents
|
$ | 435 | $ | 1,898 | ||||
Long-term debt including current portion(1)
|
367,238 | 363,477 | ||||||
Unused commitments under senior secured credit facilities
|
- | 3,300 |
(1 | ) |
We co-issued $325.0 million of 8.875% Notes in April 2010, of which we received $131.9 million of the net proceeds and
|
||||||||||
$184.9 million was received by Nexstar, as discussed in Note 5 of our Condensed Financial Statements. Debt repayment will be split
|
||||||||||||
based on the same ratio as the proceeds were received.
|
Cash Flows – Operating Activities
Net cash flows from operating activities increased by $0.8 million during the nine months ended September 30, 2012 compared to the same period in 2011. The increase was primarily due to the increase in net revenue of $2.7 million and decreased selling, general and administrative expenses of $1.3 million, which was partially offset by the timing of payments of amounts due to/from Nexstar of $2.8 million.
Due to our recent history of net operating losses, we currently do not pay any federal income taxes. These net operating losses may be carried forward, subject to expiration and certain limitations, and used to reduce taxable earnings in future years. Through the use of available loss carryforwards, it is possible that we may not pay significant amounts of federal income taxes in the foreseeable future.
Cash Flows – Investing Activities
Net cash used in investing activities of $6.2 million during the nine months ended September 30, 2012 included a $6.0 million deposit for the acquisition of two television stations from Newport and purchases of property and equipment of $0.2 million. Net cash used in investing activities during the nine months ended September 30, 2011 represented net purchases of property and equipment of $0.4 million.
Cash Flows – Financing Activities
Net cash flows provided by financing activities was $2.9 million for the nine months ended September 30, 2012 compared to the net cash used in financing activities of $0.3 million for the same period in 2011. We borrowed $4.0 million of revolving loans under our senior secured credit facility to finance the deposit to acquire the assets of two television stations from Newport. We also repaid $0.7 million of revolving loans and paid contractual maturities on our term loans during the nine months ended September 30, 2012.
Our senior secured credit facility prohibits the payment of cash dividends to our shareholders.
Future Sources of Financing and Debt Service Requirements
As of September 30, 2012, we had debt of $367.2 million, including $319.1 million of debt co-issued with Nexstar, which represented 631.2% of our total capitalization. Our high level of debt requires that a substantial portion of cash flow be dedicated to pay principal and interest on our debt, which reduces the funds available for working capital, capital expenditures, acquisitions and other general corporate purposes.
The total amount of borrowings available to us under the revolving loan commitment of our senior credit facility is based on covenant calculations contained in Nexstar’s credit agreement. As of September 30, 2012, there were no unused commitments under our senior secured credit facility.
The following table summarizes the approximate aggregate amount of principal indebtedness scheduled to mature for the periods referenced as of September 30, 2012 (in thousands):
Remainder
|
|||||||||||||||||||
Total
|
of 2012
|
2013-2014
|
2015-2016
|
Thereafter
|
|||||||||||||||
Senior secured credit facility
|
$
|
48,122
|
$
|
97
|
$
|
10,780
|
$
|
37,245
|
$
|
-
|
|||||||||
8.875% Notes(1)
|
325,000
|
-
|
-
|
-
|
325,000
|
||||||||||||||
$
|
373,122
|
$
|
97
|
$
|
10,780
|
$
|
37,245
|
$
|
325,000
|
(1)
|
As co-issuers, we received $131.9 million of the net proceeds and $184.9 million was received by Nexstar, as discussed in Note 5
|
||||||||||||||||||
of our Condensed Financial Statements. Debt repayment will be split based on the same ratio as the proceeds were received.
|
We make semi-annual interest payments on our 8.875% Notes in April and October. Interest payments on our senior secured credit facility are generally paid every one to three months and are payable based on the type of interest rate selected.
The terms of our senior secured credit facility and the indenture governing the 8.875% Notes limit, but do not prohibit, us from incurring substantial amounts of additional debt in the future.
We do not have any rating downgrade triggers that would accelerate the maturity dates of our debt. However, a downgrade in our credit rating could adversely affect our ability to renew existing or obtain access to new credit facilities in the future and could increase the cost of such facilities.
Collateralization and Guarantees of Debt
Nexstar Broadcasting Group, Inc. (Nexstar’s ultimate parent) and its subsidiaries guarantee full payment of all obligations under our senior secured credit facility in the event of our default. Similarly, we are a guarantor of Nexstar’s senior secured credit facility, the 7% Notes and the 7% PIK Notes issued by Nexstar. The senior secured credit facilities are collateralized by a security interest in substantially all the combined assets, excluding FCC licenses, of Nexstar and us. As of September 30, 2012, Nexstar had a maximum commitment of $173.9 million under its senior secured credit facility, of which $131.9 million of debt was outstanding, had $3.9 million of the 7% Notes outstanding and had $112.6 million of the 7% PIK Notes outstanding.
Debt Covenants
Our ability to continue as a going concern is dependent on Nexstar’s pledge to continue the local services agreements described in a letter of support dated March 23, 2012. Our senior secured credit facility agreement does not contain financial covenant ratio requirements; however, it does include an event of default if Nexstar does not comply with all covenants contained in its credit agreement. Nexstar’s senior secured credit facility agreement contains covenants which require Nexstar to comply with certain financial ratios, including (a) a maximum consolidated total leverage ratio, (b) a maximum consolidated first lien indebtedness ratio, and (c) a minimum consolidated fixed charge coverage ratio. The covenants, which are calculated on a quarterly basis, include the combined results of Nexstar and us. The 8.875% Notes, the 7% Notes and the 7% PIK Notes contain restrictive covenants customary for borrowing arrangements of this type. As of September 30, 2012, Nexstar has informed us that it was in compliance with all covenants contained in the credit agreements governing our senior secured credit facility and the indentures governing the publicly-held notes. As of September 30, 2012, we were in compliance with all covenants related to the 8.875% Notes.
No Off-Balance Sheet Arrangements
As of September 30, 2012, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. We are, therefore, not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships.
Critical Accounting Policies and Estimates
Our Condensed Financial Statements have been prepared in accordance with U.S. GAAP, which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the Condensed Financial Statements and reported amounts of revenue and expenses during the period. On an ongoing basis, we evaluate our estimates, including those related to goodwill and intangible assets, bad debts, broadcast rights, trade and barter, income taxes, commitments and contingencies. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from those estimates. Results of operations for interim periods are not necessarily indicative of results for the full year.
Information with respect to our critical accounting policies which we believe could have the most significant effect on our reported results and require subjective or complex judgments by management is contained in our Annual Report on Form 10-K for the year ended December 31, 2011. Management believes that as of September 30, 2012, there have been no material changes to this information.
Recent Accounting Pronouncements
Refer to Note 2 of our Condensed Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for a discussion of our adoption of recently issued accounting pronouncements, including our expected date of adoption and effects on results of operations and financial position.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including: any projections or expectations of earnings, revenue, financial performance, liquidity and capital resources or other financial items; any assumptions or projections about the television broadcasting industry; any statements of our plans, strategies and objectives for our future operations, performance, liquidity and capital resources or other financial items; any statements concerning proposed new products, services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may include the words “may,” “will,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and other similar words.
Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ from this projection or assumption in any of our forward-looking statements. Our future financial position and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties, including those described in our Annual Report on Form 10-K for the year ended December 31, 2011 and in our other filings with the Securities and Exchange Commission. The forward-looking statements made in this Quarterly Report on Form 10-Q are made only as of the date hereof, and we do not have or undertake any obligation to update any forward-looking statements to reflect subsequent events or circumstances unless otherwise required by law.
ITEM 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Interest Rate Risk
Our exposure to market risk for changes in interest rates relates primarily to our long-term debt obligations.
Our term loan borrowings as of September 30, 2012 under our senior secured credit facility bear interest at a rate of 5%, which represented the base rate, or LIBOR, plus the applicable margin, as defined. Our revolving loans bear interest at LIBOR plus the applicable margin, which totaled 4.4% at September 30, 2012. Interest is payable in accordance with the credit agreement.
If LIBOR were to increase by 100 basis points, or one percentage point, from its September 30, 2012 level, our annual interest expense would increase and cash flow from operations would decrease by approximately $0.2 million, based on the outstanding balance of our credit facility as of September 30, 2012. Due to the LIBOR floor on our term loan, an increase of 50 basis points in LIBOR or any decrease in LIBOR would have no significant impact on our operations or cash flows. Our 8.875% Notes are fixed rate debt obligations and therefore are not exposed to market interest rate changes. As of September 30, 2012, we have no financial instruments in place to hedge against changes in the benchmark interest rates on our senior secured credit facility.
Impact of Inflation
We believe that our results of operations are not affected by moderate changes in the inflation rate.
ITEM 4.
|
Controls and Procedures
|
Evaluation of Disclosure Controls and Procedures
Mission’s management, with the participation of Mission’s President and Treasurer (who is Mission’s principal executive officer and principal financial and accounting officer), conducted an evaluation as of the end of the period covered by this report of the effectiveness of the design and operation of Mission’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934.
Based upon that evaluation, Mission’s President and Treasurer concluded that as of the end of the period covered by this report, Mission’s disclosure controls and procedures were effective in ensuring that information required to be disclosed by Mission in the reports it files or submits under the Securities Exchange Act of 1934 (i) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to Mission’s management, including its President and Treasurer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
During the quarterly period as of the end of the period covered by this report, there have been no changes in Mission’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
From time to time, we are involved in litigation that arises from the ordinary operations of business, such as contractual or employment disputes or other general actions. In the event of an adverse outcome of these proceedings, we believe the resulting liabilities would not have a material adverse effect on our financial condition or results of operations.
ITEM 1A. Risk Factors
There are no material changes from the risk factors previously disclosed in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2011.
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
ITEM 3. Defaults Upon Senior Securities
None.
ITEM 4. Mine Safety Disclosures
None.
ITEM 5. Other Information
None.
ITEM 6. Exhibits
Exhibit No.
|
Description
|
10.1
|
Asset Purchase Agreement, dated as of July 18, 2012, by and among Mission Broadcasting, Inc., Newport Television LLC and Newport Television License LLC. (Incorporated by reference to Exhibit 2.2 to Current Report on Form 8-K (File No. 000-50478), filed by Nexstar Broadcasting Group, Inc. on July 24, 2012)
|
10.2
|
Fourth Amendment to the Third Amended and Restated Credit Agreement, dated as of September 19, 2012 (Executed on September 27, 2012), by and among Mission Broadcasting, Inc., Bank of America, N.A. and the several Banks parties thereto. (Incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc. on October 3, 2012).
|
10.3
|
Fifth Amendment to the Third Amended and Restated Credit Agreement, dated as of October 23, 2012, by and among Mission Broadcasting, Inc., Bank of America, N.A. and the several Banks parties thereto. (Incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc. on October 25, 2012).
|
10.4
|
Sixth Amendment to the Fourth Amended and Restated Credit Agreement, dated as of September 19, 2012 (Executed on September 27, 2012), by and among Nexstar Broadcasting, Inc., Nexstar Broadcasting Group, Inc., Nexstar Finance Holdings, Inc., Bank of America, N.A. and the several Banks parties thereto. (Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc. on October 3, 2012).
|
10.5
|
Seventh Amendment to the Fourth Amended and Restated Credit Agreement, dated as of October 23, 2012, by and among Nexstar Broadcasting, Inc., Nexstar Broadcasting Group, Inc., Nexstar Finance Holdings, Inc., Bank of America, N.A. and the several Banks parties thereto. (Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc. on October 25, 2012).
|
31.1
|
Certification of Dennis Thatcher pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
|
32.1
|
Certification of Dennis Thatcher pursuant to 18 U.S.C. ss. 1350.*
|
101
|
The Company’s unaudited Condensed Consolidated Financial Statements and related Notes for the quarter ended September 30, 2012 from this Quarterly Report on Form 10-Q, formatted in XBRL (eXtensible Business Reporting Language).*
|
* Filed herewith
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
MISSION BROADCASTING, INC.
|
||||
/s/ Dennis Thatcher
|
||||
By:
|
Dennis Thatcher
|
|||
Its:
|
President and Treasurer
|
|||
(Principal Executive Officer and Principal Financial and Accounting Officer)
|
Dated: November 8, 2012