x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the quarterly period ended September 30, 2013
|
|
OR
|
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from to .
|
Delaware
|
23-3083125
|
(State of Incorporation or Organization)
|
(I.R.S. Employer Identification No.)
|
5215 N. O’Connor Blvd., Suite 1400, Irving, Texas
|
75039
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
(972) 373-8800
|
|
(Registrant’s Telephone Number, Including Area Code)
|
Large accelerated filer
|
¨
|
Accelerated filer
|
x
|
Non-accelerated filer
|
¨
|
Smaller reporting company
|
¨
|
(Do not check if a smaller reporting company)
|
Page
|
||
PART I
|
FINANCIAL INFORMATION
|
|
ITEM 1.
|
Financial Statements (Unaudited)
|
|
Condensed Consolidated Balance Sheets as of September 30, 2013 and December 31, 2012
|
1
|
|
Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2013 and 2012
|
2
|
|
Condensed Consolidated Statement of Changes in Stockholders’ Equity for the nine months ended September 30, 2013
|
3
|
|
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2013 and 2012
|
4
|
|
Notes to Condensed Consolidated Financial Statements
|
5
|
|
ITEM 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
32
|
ITEM 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
42
|
ITEM 4.
|
Controls and Procedures
|
43
|
PART II
|
OTHER INFORMATION
|
|
ITEM 1.
|
Legal Proceedings
|
43
|
ITEM 1A.
|
Risk Factors
|
43
|
ITEM 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
44
|
ITEM 3.
|
Defaults Upon Senior Securities
|
44
|
ITEM 4.
|
Mine Safety Disclosures
|
44
|
ITEM 5.
|
Other Information
|
44
|
ITEM 6.
|
Exhibits
|
45
|
ITEM 1. Financial Statements |
NEXSTAR BROADCASTING GROUP, INC.
|
||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
||||||||
(in thousands, except share information, unaudited)
|
||||||||
September 30,
|
December 31,
|
|||||||
|
2013
|
2012
|
||||||
ASSETS
|
|
|||||||
Current assets:
|
|
|||||||
Cash and cash equivalents
|
$ | 24,619 | $ | 68,999 | ||||
Accounts receivable, net of allowance for doubtful accounts of $2,556 and $1,965, respectively
|
102,064 | 74,553 | ||||||
Current portion of broadcast rights
|
7,911 | 8,477 | ||||||
Deferred tax assets, net
|
8,861 | 8,861 | ||||||
Prepaid expenses and other current assets
|
5,862 | 2,436 | ||||||
Total current assets
|
149,317 | 163,326 | ||||||
Property and equipment, net
|
219,263 | 180,162 | ||||||
Goodwill
|
188,108 | 148,409 | ||||||
FCC licenses
|
247,837 | 198,257 | ||||||
FCC licenses of Mission
|
41,563 | 21,939 | ||||||
Other intangible assets, net
|
170,048 | 122,491 | ||||||
Deferred tax assets, net
|
72,773 | 72,090 | ||||||
Other noncurrent assets, net
|
59,079 | 39,141 | ||||||
Total assets
|
$ | 1,147,988 | $ | 945,815 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Current portion of debt
|
$ | 4,750 | $ | 2,175 | ||||
Current portion of broadcast rights payable
|
7,002 | 9,094 | ||||||
Accounts payable
|
13,140 | 12,324 | ||||||
Accrued expenses
|
23,215 | 18,122 | ||||||
Taxes payable
|
288 | 983 | ||||||
Interest payable
|
19,479 | 8,703 | ||||||
Amounts payable to sellers for acquisition of stations
|
22,000 | - | ||||||
Other liabilities of Mission
|
4,755 | 3,195 | ||||||
Other liabilities
|
4,321 | 3,407 | ||||||
Total current liabilities
|
98,950 | 58,003 | ||||||
Debt
|
1,006,749 | 855,467 | ||||||
Other liabilities of Mission
|
8,627 | 7,828 | ||||||
Other liabilities
|
22,304 | 22,278 | ||||||
Total liabilities
|
1,136,630 | 943,576 | ||||||
Commitments and contingencies
|
||||||||
Stockholders' equity:
|
||||||||
Preferred stock - $0.01 par value, 200,000 shares authorized; none issued and outstanding at each of September 30, 2013 and December 31, 2012
|
- | - | ||||||
Class A Common stock - $0.01 par value, 100,000,000 shares authorized; 30,406,495 and 21,677,248 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively
|
304 | 217 | ||||||
Class B Common stock - $0.01 par value, 20,000,000 shares authorized; none issued and outstanding at September 30, 2013 and 7,702,471 shares issued and outstanding at December 31, 2012
|
- | 77 | ||||||
Class C Common stock - $0.01 par value, 5,000,000 shares authorized; none issued and outstanding at each of September 30, 2013 and December 31, 2012
|
- | - | ||||||
Additional paid-in capital
|
408,956 | 410,514 | ||||||
Accumulated deficit
|
(397,902 | ) | (408,569 | ) | ||||
Total stockholders' equity
|
11,358 | 2,239 | ||||||
Total liabilities and stockholders' equity
|
$ | 1,147,988 | $ | 945,815 |
NEXSTAR BROADCASTING GROUP, INC.
|
||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||||||||
(in thousands, except per share information, unaudited)
|
||||||||||||||||
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
Net revenue
|
$ | 125,792 | $ | 89,952 | $ | 364,208 | $ | 262,458 | ||||||||
Operating expenses:
|
||||||||||||||||
Direct operating expenses, excluding depreciation and amortization
|
37,270 | 21,950 | 107,835 | 65,930 | ||||||||||||
Selling, general, and administrative expenses, excluding depreciation and amortization
|
37,587 | 27,506 | 110,652 | 81,746 | ||||||||||||
Amortization of broadcast rights
|
9,188 | 5,563 | 26,867 | 16,303 | ||||||||||||
Amortization of intangible assets
|
7,996 | 5,480 | 22,900 | 16,595 | ||||||||||||
Depreciation
|
8,598 | 5,896 | 24,791 | 17,359 | ||||||||||||
Total operating expenses
|
100,639 | 66,395 | 293,045 | 197,933 | ||||||||||||
Income from operations
|
25,153 | 23,557 | 71,163 | 64,525 | ||||||||||||
Interest expense, net
|
(16,900 | ) | (12,438 | ) | (50,352 | ) | (37,921 | ) | ||||||||
Loss on extinguishment of debt
|
(1,048 | ) | - | (1,048 | ) | (497 | ) | |||||||||
Other expense
|
(84 | ) | - | (252 | ) | - | ||||||||||
Income before income taxes
|
7,121 | 11,119 | 19,511 | 26,107 | ||||||||||||
Income tax expense
|
(3,526 | ) | (1,558 | ) | (8,844 | ) | (4,712 | ) | ||||||||
Net income
|
$ | 3,595 | $ | 9,561 | $ | 10,667 | $ | 21,395 | ||||||||
Net income per common share:
|
||||||||||||||||
Basic
|
$ | 0.12 | $ | 0.33 | $ | 0.36 | $ | 0.74 | ||||||||
Diluted
|
$ | 0.11 | $ | 0.31 | $ | 0.34 | $ | 0.70 | ||||||||
Weighted average number of common shares outstanding:
|
||||||||||||||||
Basic
|
30,048 | 28,960 | 29,706 | 28,881 | ||||||||||||
Diluted
|
31,509 | 30,703 | 31,297 | 30,561 | ||||||||||||
Dividends paid per common share
|
$ | 0.12 | $ | - | $ | 0.36 | $ | - |
NEXSTAR BROADCASTING GROUP, INC.
|
|||||||||||||||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
|
|||||||||||||||||||||||||||||||||
For the Nine Months Ended September 30, 2013
|
|||||||||||||||||||||||||||||||||
(in thousands, except share information, unaudited)
|
|||||||||||||||||||||||||||||||||
Common Stock
|
Additional
|
Total
|
|||||||||||||||||||||||||||||||
Preferred Stock
|
Class A
|
Class B
|
Class C
|
Paid-In
|
Treasury Stock
|
Accumulated
|
Stockholders'
|
||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Shares
|
Amount
|
Deficit
|
Equity
|
|||||||||||||||||||||
Balances as of December 31, 2012
|
-
|
$
|
-
|
21,677,248
|
$
|
217
|
7,702,471
|
$
|
77
|
-
|
$
|
-
|
$
|
410,514
|
-
|
$
|
-
|
$
|
(408,569)
|
$
|
2,239
|
||||||||||||
Stock-based compensation expense
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
1,580
|
-
|
-
|
-
|
1,580
|
||||||||||||||||||||
Conversion of Class B common stock to Class A common stock
|
-
|
-
|
7,702,471
|
77
|
(7,702,471)
|
(77)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||||
Purchase of treasury stock
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(365,384)
|
(8,422)
|
-
|
(8,422)
|
||||||||||||||||||||
Exercise of stock options
|
-
|
-
|
1,026,776
|
10
|
-
|
-
|
-
|
-
|
(2,270)
|
365,384
|
8,422
|
-
|
6,162
|
||||||||||||||||||||
Excess tax benefit from stock option exercises
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
9,786
|
-
|
-
|
-
|
9,786
|
||||||||||||||||||||
Common stock dividends paid
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(10,654)
|
-
|
-
|
-
|
(10,654)
|
||||||||||||||||||||
Net income
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
10,667
|
10,667
|
||||||||||||||||||||
Balances as of September 30, 2013
|
-
|
$
|
-
|
30,406,495
|
$
|
304
|
-
|
$
|
-
|
-
|
$
|
-
|
$
|
408,956
|
-
|
$
|
-
|
$
|
(397,902)
|
$
|
11,358
|
Nine Months Ended
|
||||||||
September 30,
|
||||||||
2013
|
2012
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$ | 10,667 | $ | 21,395 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Provision for bad debts and allowances
|
1,320 | 1,448 | ||||||
Amortization of broadcast rights, excluding barter
|
9,545 | 6,489 | ||||||
Depreciation of property and equipment
|
24,791 | 17,359 | ||||||
Amortization of intangible assets
|
22,900 | 16,595 | ||||||
Loss (gain) on asset disposal, net
|
35 | (25 | ) | |||||
Amortization of debt financing costs
|
1,582 | 1,238 | ||||||
Amortization of debt discount
|
1,001 | 1,016 | ||||||
Loss on extinguishment of debt
|
1,048 | 497 | ||||||
Stock-based compensation expense
|
1,580 | 725 | ||||||
Deferred income taxes
|
9,103 | 4,307 | ||||||
Payments for broadcast rights
|
(11,031 | ) | (6,681 | ) | ||||
Deferred gain recognition
|
(327 | ) | (327 | ) | ||||
Amortization of deferred representation fee incentive
|
(615 | ) | (564 | ) | ||||
Issue discount paid upon debt extinguishment
|
(262 | ) | (1,190 | ) | ||||
Premium on debt extinguishment
|
(853 | ) | - | |||||
Excess tax benefit from stock option exercises
|
(9,786 | ) | - | |||||
Changes in operating assets and liabilities, net of acquisitions:
|
||||||||
Accounts receivable
|
(28,409 | ) | 2,385 | |||||
Prepaid expenses and other current assets
|
(2,969 | ) | (679 | ) | ||||
Other noncurrent assets
|
43 | 97 | ||||||
Accounts payable and accrued expenses
|
3,969 | (286 | ) | |||||
Interest payable
|
10,776 | 4,114 | ||||||
Deferred revenue
|
203 | 1,051 | ||||||
Other liabilities of Mission
|
584 | 174 | ||||||
Other noncurrent liabilities
|
833 | (409 | ) | |||||
Net cash provided by operating activities
|
45,728 | 68,729 | ||||||
Cash flows from investing activities:
|
||||||||
Purchases of property and equipment
|
(16,907 | ) | (11,024 | ) | ||||
Deposits and payments for acquisitions
|
(220,830 | ) | (28,554 | ) | ||||
Proceeds from disposals of property and equipment
|
51 | 39 | ||||||
Net cash used in investing activities
|
(237,686 | ) | (39,539 | ) | ||||
Cash flows from financing activities:
|
||||||||
Repayments of long-term debt
|
(70,913 | ) | (95,735 | ) | ||||
Payments for debt financing costs
|
(2,218 | ) | (251 | ) | ||||
Proceeds from long-term debt
|
223,875 | 70,500 | ||||||
Purchase of treasury stock
|
(8,422 | ) | - | |||||
Proceeds from exercise of stock options
|
6,162 | 1,007 | ||||||
Excess tax benefit from stock option exercises
|
9,786 | - | ||||||
Common stock dividends paid
|
(10,654 | ) | - | |||||
Payments for capital lease obligations
|
(38 | ) | (21 | ) | ||||
Net cash provided by (used in) financing activities
|
147,578 | (24,500 | ) | |||||
Net (decrease) increase in cash and cash equivalents
|
(44,380 | ) | 4,690 | |||||
Cash and cash equivalents at beginning of period
|
68,999 | 7,546 | ||||||
Cash and cash equivalents at end of period
|
$ | 24,619 | $ | 12,236 | ||||
Supplemental information:
|
||||||||
Interest paid
|
$ | 36,901 | $ | 32,693 | ||||
Income taxes paid, net
|
$ | 2,143 | $ | 522 | ||||
Non-cash investing and financing activities:
|
||||||||
Accrued purchases of property and equipment
|
$ | 2,057 | $ | 1,547 | ||||
Noncash purchases of property and equipment
|
$ | 2,689 | $ | 421 | ||||
Accrued debt financing costs
|
$ | 849 | $ | 259 | ||||
Amounts payable to sellers for acquisition of stations
|
$ | 22,000 | $ | - |
|
1. Organization and Business Operations
|
|
2. Summary of Significant Accounting Policies
|
Service Agreements
|
Mission Stations
|
||
TBA Only(1)
|
WFXP and KHMT
|
||
SSA & JSA(2)
|
KJTL, KJBO-LP, KLRT-TV, KASN, KOLR, KCIT, KCPN-LP, KAMC, KRBC, KSAN, WUTR, WAWV, WYOU, KODE, WTVO, KTVE, WTVW and WVNY
|
||
(1)
|
Nexstar has a time brokerage agreement (“TBA”) with 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 Mission.
|
||
(2)
|
Nexstar has both a shared services agreement (“SSA”) and a joint sales agreement (“JSA”) with each of these stations. Each SSA allows the Nexstar station in the market to provide services including news production, technical maintenance and security, in exchange for Nexstar’s right to receive certain payments from Mission as described in the SSAs. Each JSA permits 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 Mission of the remaining percentage of net revenue as described in the JSAs.
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
Weighted average shares outstanding - basic
|
30,048 | 28,960 | 29,706 | 28,881 | ||||||||||||
Effect of dilutive stock options
|
1,461 | 1,743 | 1,591 | 1,680 | ||||||||||||
Weighted average shares outstanding - diluted
|
31,509 | 30,703 | 31,297 | 30,561 |
3.
|
Acquisitions
|
Market
|
Market Rank
|
Station
|
Affiliation
|
|||
Des Moines, IA
|
72 |
WOI
|
ABC
|
|||
Rock Island, IL
|
99 |
WHBF
|
CBS
|
|||
Sioux City, IA
|
147 |
KCAU
|
ABC
|
Broadcast rights
|
$ | 269 | ||
Prepaid expenses and other current assets
|
254 | |||
Property and equipment
|
12,710 | |||
FCC licenses
|
25,080 | |||
Network affiliation agreements
|
26,500 | |||
Other intangible assets
|
3,292 | |||
Goodwill
|
20,270 | |||
Other assets
|
226 | |||
Total assets acquired
|
88,601 | |||
Less: Broadcast rights payable
|
(269 | ) | ||
Less: Accounts payable and accrued expenses
|
(467 | ) | ||
Net assets acquired
|
$ | 87,865 |
Market
|
Market Rank
|
Station
|
Affiliation
|
|||
Nexstar:
|
||||||
Harlingen-Weslaco-Brownsville-McAllen, TX
|
86 |
KVEO
|
NBC/Estrella
|
|||
Waco-Temple-Bryan, TX
|
88 |
KWKT
KYLE
|
FOX/MNTV/Estrella
FOX/MNTV/Estrella
|
|||
El Paso, TX
|
91 |
KTSM
|
NBC/Estrella
|
|||
Baton Rouge, LA
|
94 |
WGMB
WBRL-CD
|
FOX
The CW
|
|||
Tyler-Longview, TX
|
107 |
KETK
|
NBC/Estrella
|
|||
Lafayette, LA
|
124 |
KADN
KLAF-LD
|
FOX
MNTV
|
|||
Alexandria, LA
|
179 |
WNTZ
|
FOX/MNTV
|
|||
Mission:
|
||||||
Shreveport, LA
|
83 |
KMSS
|
FOX
|
|||
Baton Rouge, LA
|
94 |
WVLA
KZUP-CD
|
NBC
RTV
|
|||
Tyler-Longview, TX
|
107 |
KFXK
KFXL-LD
KLPN-LD
|
FOX
FOX
MNTV
|
|||
Odessa-Midland, TX
|
152 |
KPEJ
|
FOX/Estrella
|
|||
Rocky Creek:
|
||||||
Shreveport, LA
|
83 |
KSHV
|
MNTV
|
|||
Evansville, IN
|
104 |
WEVV
|
CBS/FOX/MNTV
|
Station
|
Network
Affiliation
|
Market
|
Date Acquired
|
Acquired By
|
KLRT-TV
|
Fox
|
Little Rock-Pine Bluff, Arkansas
|
January 1, 2013
|
Mission
|
KASN
|
The CW
|
Little Rock-Pine Bluff, Arkansas
|
January 1, 2013
|
Mission
|
KGET
|
NBC/The CW
|
Bakersfield, California
|
February 1, 2013
|
Nexstar
|
KKEY-LP
|
Telemundo
|
Bakersfield, California
|
February 1, 2013
|
Nexstar
|
KGPE
|
CBS
|
Fresno-Visalia, California
|
February 1, 2013
|
Nexstar
|
KSEE
|
NBC/LATV
|
Fresno-Visalia, California
|
February 1, 2013
|
Nexstar
|
WFFF
|
FOX
|
Burlington-Plattsburgh, Vermont
|
March 1, 2013
|
Nexstar
|
WVNY
|
ABC
|
Burlington-Plattsburgh, Vermont
|
March 1, 2013
|
Mission
|
Broadcast rights
|
$ | 2,279 | ||
Prepaid expenses and other current assets
|
71 | |||
Property and equipment
|
11,153 | |||
FCC licenses of Mission
|
16,827 | |||
Network affiliation agreements
|
17,002 | |||
Other intangible assets
|
2,511 | |||
Goodwill
|
12,727 | |||
Other assets
|
7 | |||
Total assets acquired
|
62,577 | |||
Less: Broadcast rights payable
|
(2,492 | ) | ||
Less: Accounts payable and accrued expenses
|
(386 | ) | ||
Net assets acquired
|
$ | 59,699 |
Broadcast rights
|
$ | 72 | ||
Prepaid expenses and other current assets
|
351 | |||
Property and equipment
|
9,343 | |||
FCC licenses
|
14,318 | |||
Network affiliation agreements
|
9,307 | |||
Other intangible assets
|
1,310 | |||
Goodwill
|
1,077 | |||
Total assets acquired
|
35,778 | |||
Less: Broadcast rights payable
|
(72 | ) | ||
Less: Deferred revenue
|
(57 | ) | ||
Less: Accounts payable and accrued expenses
|
(196 | ) | ||
Net assets acquired
|
$ | 35,453 |
Prepaid expenses and other current assets
|
$ | 140 | ||
Property and equipment
|
7,350 | |||
FCC licenses
|
7,385 | |||
Network affiliation agreements
|
7,870 | |||
Other intangible assets
|
107 | |||
Goodwill
|
3,838 | |||
Total assets acquired
|
26,690 | |||
Less: Accounts payable and accrued expenses
|
(194 | ) | ||
Net assets acquired
|
$ | 26,496 |
Broadcast rights
|
$ | 1,030 | ||
Prepaid expenses and other current assets
|
150 | |||
Property and equipment
|
7,100 | |||
FCC licenses
|
2,797 | |||
FCC licenses of Mission
|
2,797 | |||
Network affiliation agreements
|
2,119 | |||
Other intangible assets
|
439 | |||
Goodwill
|
1,787 | |||
Total assets acquired
|
18,219 | |||
Less: Broadcast rights payable
|
(1,145 | ) | ||
Less: Deferred revenue
|
(19 | ) | ||
Less: Accounts payable and accrued expenses
|
(504 | ) | ||
Net assets acquired
|
$ | 16,551 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
Net revenue
|
$ | 125,792 | $ | 120,481 | $ | 365,781 | $ | 354,281 | ||||||||
Income before income taxes
|
7,667 | 12,913 | 21,378 | 27,071 | ||||||||||||
Net income
|
3,902 | 10,295 | 11,753 | 19,179 | ||||||||||||
Net income per common share - basic
|
0.13 | 0.36 | 0.40 | 0.66 | ||||||||||||
Net income per common share - diluted
|
0.12 | 0.34 | 0.38 | 0.63 |
4.
|
Intangible Assets and Goodwill
|
Estimated
|
September 30, 2013
|
December 31, 2012
|
||||||||||||||||||||||||||
useful life,
|
Accumulated
|
Accumulated
|
||||||||||||||||||||||||||
in years
|
Gross
|
Amortization
|
Net
|
Gross
|
Amortization
|
Net
|
||||||||||||||||||||||
Network affiliation agreements | 15 | $ | 442,182 | $ | (285,939 | ) | $ | 156,243 | $ | 379,384 | $ | (268,921 | ) | $ | 110,463 | |||||||||||||
Other definite-lived intangible assets | 1-15 | 33,329 | (19,524 | ) | 13,805 | 25,670 | (13,642 | ) | 12,028 | |||||||||||||||||||
Other intangible assets
|
$ | 475,511 | $ | (305,463 | ) | $ | 170,048 | $ | 405,054 | $ | (282,563 | ) | $ | 122,491 |
Remainder of 2013
|
$
|
8,407
|
||
2014
|
22,940
|
|||
2015
|
21,865
|
|||
2016
|
16,526
|
|||
2017
|
15,736
|
|||
2018
|
13,677
|
|||
Thereafter
|
70,897
|
|||
$
|
170,048
|
Goodwill
|
FCC Licenses
|
|||||||||||||||||||||||
Accumulated
|
Accumulated
|
|||||||||||||||||||||||
Gross
|
Impairment
|
Net
|
Gross
|
Impairment
|
Net
|
|||||||||||||||||||
Balance as of December 31, 2012
|
$ | 194,400 | $ | (45,991 | ) | $ | 148,409 | $ | 269,617 | $ | (49,421 | ) | $ | 220,196 | ||||||||||
Acquisitions (See Note 3)
|
39,699 | - | 39,699 | 69,204 | - | 69,204 | ||||||||||||||||||
Balance as of September 30, 2013
|
$ | 234,099 | $ | (45,991 | ) | $ | 188,108 | $ | 338,821 | $ | (49,421 | ) | $ | 289,400 |
5.
|
Accrued Expenses
|
September 30,
|
December 31,
|
|||||||
2013
|
2012
|
|||||||
Compensation and related taxes
|
$ | 7,773 | $ | 7,282 | ||||
Sales commissions
|
2,124 | 1,919 | ||||||
Employee benefits
|
1,447 | 1,147 | ||||||
Property taxes
|
1,317 | 653 | ||||||
Other accruals related to operating expenses
|
10,554 | 7,121 | ||||||
$ | 23,215 | $ | 18,122 |
6.
|
Debt
|
September 30,
|
December 31,
|
|||||||
2013
|
2012
|
|||||||
Term loans, net of discount of $1,686 and $1,736, respectively
|
$ | 396,564 | $ | 288,264 | ||||
Revolving loans
|
55,000 | - | ||||||
8.875% Senior secured second lien notes due 2017, net of discount of $4,640 and $5,622, respectively
|
309,935 | 319,378 | ||||||
6.875% Senior unsecured notes due 2020
|
250,000 | 250,000 | ||||||
1,011,499 | 857,642 | |||||||
Less: current portion
|
(4,750 | ) | (2,175 | ) | ||||
$ | 1,006,749 | $ | 855,467 |
September 30, 2013
|
December 31, 2012
|
|||||||||||||||
Carrying
|
Fair
|
Carrying
|
Fair
|
|||||||||||||
Amount
|
Value
|
Amount
|
Value
|
|||||||||||||
Term loans(1)
|
$
|
396,564
|
$
|
392,527
|
$
|
288,264
|
$
|
293,187
|
||||||||
Revolving loans(1)
|
55,000
|
56,714
|
-
|
-
|
||||||||||||
8.875% Senior secured second lien notes(2)
|
309,935
|
342,462
|
319,378
|
359,125
|
||||||||||||
6.875% Senior unsecured notes(2)
|
250,000
|
255,470
|
250,000
|
258,750
|
(1)
|
The fair value of senior secured credit facilities is computed based on borrowing rates currently available to Nexstar and Mission for bank loans with similar terms and average maturities. These fair value measurements are considered Level 3, as significant inputs to the fair value calculation are unobservable in the market.
|
|||||||||||||||
(2)
|
The fair value of Nexstar’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. These fair value measurements are considered Level 2, as quoted market prices are available for low volume trading of these securities.
|
7.
|
Common Stock
|
8.
|
Contract Termination
|
9.
|
Income Taxes
|
10.
|
FCC Regulatory Matters
|
11.
|
Commitments and Contingencies
|
12.
|
Condensed Consolidating Financial Information
|
|
(a)
|
6.875% Notes. The 6.875% Notes are issued by Nexstar Broadcasting and fully and unconditionally guaranteed by Nexstar and Mission, subject to certain customary release provisions. These notes are not guaranteed by any other entities.
|
|
(b)
|
8.875% Notes. The 8.875% Notes are co-issued by Nexstar Broadcasting and Mission, jointly and severally, and fully and unconditionally guaranteed by Nexstar and all of Nexstar Broadcasting’s and Mission’s future 100% owned domestic subsidiaries, subject to certain customary release provisions. The net proceeds to Mission and Nexstar from the sale of the 8.875% Notes in 2010 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 Broadcasting. As the obligations under the 8.875% Notes are joint and several to Nexstar Broadcasting and Mission, each entity reflects the full amount of the 8.875% Notes and related accrued interest in their separate financial statements. Further, the portions of the net proceeds and related accrued interest attributable to the respective co-issuers are reflected as a reduction to equity (due from affiliate) in their separate financial statements given the contractual relationships between the entities.
|
CONDENSED CONSOLIDATING BALANCE SHEET
|
||||||||||||||||||||||||
As of September 30, 2013
|
||||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Nexstar
|
Nexstar
|
Consolidated
|
||||||||||||||||||||||
Nexstar
|
Broadcasting
|
Mission
|
Holdings
|
Eliminations
|
Company
|
|||||||||||||||||||
ASSETS
|
||||||||||||||||||||||||
Current assets:
|
||||||||||||||||||||||||
Cash and cash equivalents
|
$ | - | $ | 22,577 | $ | 2,042 | $ | - | $ | - | $ | 24,619 | ||||||||||||
Due from Nexstar Broadcasting
|
- | - | 14,233 | - | (14,233 | ) | - | |||||||||||||||||
Other current assets
|
- | 115,620 | 9,078 | - | - | 124,698 | ||||||||||||||||||
Total current assets
|
- | 138,197 | 25,353 | - | (14,233 | ) | 149,317 | |||||||||||||||||
Amounts due from subsidiary eliminated upon consolidation
|
12,395 | - | - | - | (12,395 | ) | - | |||||||||||||||||
Amounts due from parents eliminated upon consolidation
|
- | 2,845 | - | - | (2,845 | ) | - | |||||||||||||||||
Property and equipment, net
|
- | 191,515 | 27,748 | - | - | 219,263 | ||||||||||||||||||
Goodwill
|
- | 155,619 | 32,489 | - | - | 188,108 | ||||||||||||||||||
FCC licenses
|
- | 247,837 | 41,563 | - | - | 289,400 | ||||||||||||||||||
Other intangible assets, net
|
- | 144,733 | 25,315 | - | - | 170,048 | ||||||||||||||||||
Other noncurrent assets
|
- | 97,726 | 34,126 | - | - | 131,852 | ||||||||||||||||||
Total assets
|
$ | 12,395 | $ | 978,472 | $ | 186,594 | $ | - | $ | (29,473 | ) | $ | 1,147,988 |
LIABILITIES AND
|
||||||||||||||||||||||||
STOCKHOLDERS' EQUITY
|
||||||||||||||||||||||||
(DEFICIT)
|
||||||||||||||||||||||||
Current liabilities:
|
||||||||||||||||||||||||
Current portion of debt
|
$ | - | $ | 3,710 | $ | 1,040 | $ | - | $ | - | $ | 4,750 | ||||||||||||
Due to Mission
|
- | 14,233 | - | - | (14,233 | ) | - | |||||||||||||||||
Other current liabilities
|
- | 89,431 | 17,564 | - | (12,795 | ) | 94,200 | |||||||||||||||||
Total current liabilities
|
- | 107,374 | 18,604 | - | (27,028 | ) | 98,950 | |||||||||||||||||
Debt
|
- | 904,777 | 411,907 | - | (309,935 | ) | 1,006,749 | |||||||||||||||||
Deficiencies in subsidiaries eliminated upon consolidation
|
71,226 | - | - | 55,984 | (127,210 | ) | - | |||||||||||||||||
Amounts due to subsidiary eliminated upon consolidation
|
- | - | - | 15,240 | (15,240 | ) | - | |||||||||||||||||
Other noncurrent liabilities
|
(3 | ) | 22,305 | 8,627 | 2 | - | 30,931 | |||||||||||||||||
Total liabilities
|
71,223 | 1,034,456 | 439,138 | 71,226 | (479,413 | ) | 1,136,630 | |||||||||||||||||
Stockholders' equity (deficit):
|
||||||||||||||||||||||||
Common stock
|
304 | - | - | - | - | 304 | ||||||||||||||||||
Other stockholders' equity (deficit)
|
(59,132 | ) | (55,984 | ) | (252,544 | ) | (71,226 | ) | 449,940 | 11,054 | ||||||||||||||
Total stockholders' equity (deficit)
|
(58,828 | ) | (55,984 | ) | (252,544 | ) | (71,226 | ) | 449,940 | 11,358 | ||||||||||||||
Total liabilities and
|
||||||||||||||||||||||||
stockholders' equity (deficit)
|
$ | 12,395 | $ | 978,472 | $ | 186,594 | $ | - | $ | (29,473 | ) | $ | 1,147,988 |
CONDENSED CONSOLIDATING BALANCE SHEET
|
||||||||||||||||||||||||
As of December 31, 2012
|
||||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Nexstar
|
Nexstar
|
Consolidated
|
||||||||||||||||||||||
Nexstar
|
Broadcasting
|
Mission
|
Holdings
|
Eliminations
|
Company
|
|||||||||||||||||||
ASSETS
|
||||||||||||||||||||||||
Current assets:
|
||||||||||||||||||||||||
Cash and cash equivalents
|
$ | - | $ | 68,681 | $ | 318 | $ | - | $ | - | $ | 68,999 | ||||||||||||
Due from Nexstar Broadcasting
|
- | - | 512 | - | (512 | ) | - | |||||||||||||||||
Other current assets
|
- | 88,700 | 5,627 | - | - | 94,327 | ||||||||||||||||||
Total current assets
|
- | 157,381 | 6,457 | - | (512 | ) | 163,326 | |||||||||||||||||
Amounts due from subsidiary eliminated upon consolidation
|
13,943 | - | - | - | (13,943 | ) | - | |||||||||||||||||
Amounts due from parents eliminated upon consolidation
|
- | 1,297 | - | - | (1,297 | ) | - | |||||||||||||||||
Property and equipment, net
|
- | 158,644 | 21,518 | - | - | 180,162 | ||||||||||||||||||
Goodwill
|
- | 129,679 | 18,730 | - | - | 148,409 | ||||||||||||||||||
FCC licenses
|
- | 198,257 | 21,939 | - | - | 220,196 | ||||||||||||||||||
Other intangible assets, net
|
- | 112,296 | 10,195 | - | - | 122,491 | ||||||||||||||||||
Other noncurrent assets
|
- | 70,689 | 40,542 | - | - | 111,231 | ||||||||||||||||||
Total assets
|
$ | 13,943 | $ | 828,243 | $ | 119,381 | $ | - | $ | (15,752 | ) | $ | 945,815 |
LIABILITIES AND
|
||||||||||||||||||||||||
STOCKHOLDERS' EQUITY
|
||||||||||||||||||||||||
(DEFICIT)
|
||||||||||||||||||||||||
Current liabilities:
|
||||||||||||||||||||||||
Current portion of debt
|
$ | - | $ | 1,845 | $ | 330 | $ | - | $ | - | $ | 2,175 | ||||||||||||
Due to Mission
|
- | 512 | - | - | (512 | ) | - | |||||||||||||||||
Other current liabilities
|
- | 52,372 | 9,463 | - | (6,007 | ) | 55,828 | |||||||||||||||||
Total current liabilities
|
- | 54,729 | 9,793 | - | (6,519 | ) | 58,003 | |||||||||||||||||
Debt
|
- | 812,315 | 362,531 | - | (319,379 | ) | 855,467 | |||||||||||||||||
Deficiencies in subsidiaries eliminated upon consolidation
|
76,322 | - | - | 61,080 | (137,402 | ) | - | |||||||||||||||||
Amounts due to subsidiary eliminated upon consolidation
|
- | - | - | 15,240 | (15,240 | ) | - | |||||||||||||||||
Other noncurrent liabilities
|
(3 | ) | 22,279 | 7,828 | 2 | - | 30,106 | |||||||||||||||||
Total liabilities
|
76,319 | 889,323 | 380,152 | 76,322 | (478,540 | ) | 943,576 | |||||||||||||||||
Stockholders' equity (deficit):
|
||||||||||||||||||||||||
Common stock
|
294 | - | - | - | - | 294 | ||||||||||||||||||
Other stockholders' equity (deficit)
|
(62,670 | ) | (61,080 | ) | (260,771 | ) | (76,322 | ) | 462,788 | 1,945 | ||||||||||||||
Total stockholders' equity (deficit)
|
(62,376 | ) | (61,080 | ) | (260,771 | ) | (76,322 | ) | 462,788 | 2,239 | ||||||||||||||
Total liabilities and
|
||||||||||||||||||||||||
stockholders' equity (deficit)
|
$ | 13,943 | $ | 828,243 | $ | 119,381 | $ | - | $ | (15,752 | ) | $ | 945,815 |
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
|
||||||||||||||||||||||||
Three Months Ended September 30, 2013
|
||||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Nexstar
|
Nexstar
|
Consolidated
|
||||||||||||||||||||||
Nexstar
|
Broadcasting
|
Mission
|
Holdings
|
Eliminations
|
Company
|
|||||||||||||||||||
Net broadcast revenue (including trade and barter)
|
$ | - | $ | 118,214 | $ | 7,578 | $ | - | $ | - | $ | 125,792 | ||||||||||||
Revenue between consolidated entities
|
- | 2,445 | 9,581 | - | (12,026 | ) | - | |||||||||||||||||
Net revenue
|
- | 120,659 | 17,159 | - | (12,026 | ) | 125,792 | |||||||||||||||||
Operating expenses:
|
||||||||||||||||||||||||
Direct operating expenses, excluding depreciation and amortization
|
- | 33,519 | 3,751 | - | - | 37,270 | ||||||||||||||||||
Selling, general, and administrative expenses, excluding depreciation and amortization
|
- | 36,882 | 705 | - | - | 37,587 | ||||||||||||||||||
Local service agreement fees between consolidated entities
|
- | 9,581 | 2,445 | - | (12,026 | ) | - | |||||||||||||||||
Amortization of broadcast rights
|
- | 7,459 | 1,729 | - | - | 9,188 | ||||||||||||||||||
Amortization of intangible assets
|
- | 6,246 | 1,750 | - | - | 7,996 | ||||||||||||||||||
Depreciation
|
- | 7,748 | 850 | - | - | 8,598 | ||||||||||||||||||
Total operating expenses
|
- | 101,435 | 11,230 | - | (12,026 | ) | 100,639 | |||||||||||||||||
Income from operations
|
- | 19,224 | 5,929 | - | - | 25,153 | ||||||||||||||||||
Interest expense, net
|
- | (12,447 | ) | (4,453 | ) | - | - | (16,900 | ) | |||||||||||||||
Loss on extinguishment of debt
|
- | (1,048 | ) | - | - | - | (1,048 | ) | ||||||||||||||||
Other expense
|
- | (84 | ) | - | - | - | (84 | ) | ||||||||||||||||
Equity in income of subsidiaries
|
2,871 | - | - | 2,871 | (5,742 | ) | - | |||||||||||||||||
Income before income taxes
|
2,871 | 5,645 | 1,476 | 2,871 | (5,742 | ) | 7,121 | |||||||||||||||||
Income tax expense
|
- | (2,774 | ) | (752 | ) | - | - | (3,526 | ) | |||||||||||||||
Net income
|
$ | 2,871 | $ | 2,871 | $ | 724 | $ | 2,871 | $ | (5,742 | ) | $ | 3,595 |
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
|
||||||||||||||||||||||||
Three Months Ended September 30, 2012
|
||||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Nexstar
|
Nexstar
|
Consolidated
|
||||||||||||||||||||||
Nexstar
|
Broadcasting
|
Mission
|
Holdings
|
Eliminations
|
Company
|
|||||||||||||||||||
Net broadcast revenue (including trade and barter)
|
$ | - | $ | 85,245 | $ | 4,707 | $ | - | $ | - | $ | 89,952 | ||||||||||||
Revenue between consolidated entities
|
- | 1,935 | 8,012 | - | (9,947 | ) | - | |||||||||||||||||
Net revenue
|
- | 87,180 | 12,719 | - | (9,947 | ) | 89,952 | |||||||||||||||||
Operating expenses:
|
||||||||||||||||||||||||
Direct operating expenses, excluding depreciation and amortization
|
- | 20,117 | 1,833 | - | - | 21,950 | ||||||||||||||||||
Selling, general, and administrative expenses, excluding depreciation and amortization
|
- | 26,712 | 794 | - | - | 27,506 | ||||||||||||||||||
Local service agreement fees between consolidated entities
|
- | 8,012 | 1,935 | - | (9,947 | ) | - | |||||||||||||||||
Amortization of broadcast rights
|
- | 4,464 | 1,099 | - | - | 5,563 | ||||||||||||||||||
Amortization of intangible assets
|
- | 4,210 | 1,270 | - | - | 5,480 | ||||||||||||||||||
Depreciation
|
- | 5,195 | 701 | - | - | 5,896 | ||||||||||||||||||
Total operating expenses
|
- | 68,710 | 7,632 | - | (9,947 | ) | 66,395 | |||||||||||||||||
Income from operations
|
- | 18,470 | 5,087 | - | - | 23,557 | ||||||||||||||||||
Interest expense, net
|
- | (8,688 | ) | (3,750 | ) | - | - | (12,438 | ) | |||||||||||||||
Equity in income of subsidiaries
|
8,562 | - | - | 8,562 | (17,124 | ) | - | |||||||||||||||||
Income before income taxes
|
8,562 | 9,782 | 1,337 | 8,562 | (17,124 | ) | 11,119 | |||||||||||||||||
Income tax expense
|
- | (1,220 | ) | (338 | ) | - | - | (1,558 | ) | |||||||||||||||
Net income
|
$ | 8,562 | $ | 8,562 | $ | 999 | $ | 8,562 | $ | (17,124 | ) | $ | 9,561 |
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
|
||||||||||||||||||||||||
Nine Months Ended September 30, 2013
|
||||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Nexstar
|
Nexstar
|
Consolidated
|
||||||||||||||||||||||
Nexstar
|
Broadcasting
|
Mission
|
Holdings
|
Eliminations
|
Company
|
|||||||||||||||||||
Net broadcast revenue (including trade and barter)
|
$ | - | $ | 342,326 | $ | 21,882 | $ | - | $ | - | $ | 364,208 | ||||||||||||
Revenue between consolidated entities
|
- | 7,295 | 28,885 | - | (36,180 | ) | - | |||||||||||||||||
Net revenue
|
- | 349,621 | 50,767 | - | (36,180 | ) | 364,208 | |||||||||||||||||
Operating expenses:
|
||||||||||||||||||||||||
Direct operating expenses, excluding depreciation and amortization
|
- | 97,079 | 10,756 | - | - | 107,835 | ||||||||||||||||||
Selling, general, and administrative expenses, excluding depreciation and amortization
|
- | 108,386 | 2,266 | - | - | 110,652 | ||||||||||||||||||
Local service agreement fees between consolidated entities
|
- | 28,885 | 7,295 | - | (36,180 | ) | - | |||||||||||||||||
Amortization of broadcast rights
|
- | 22,046 | 4,821 | - | - | 26,867 | ||||||||||||||||||
Amortization of intangible assets
|
- | 17,414 | 5,486 | - | - | 22,900 | ||||||||||||||||||
Depreciation
|
- | 22,020 | 2,771 | - | - | 24,791 | ||||||||||||||||||
Total operating expenses
|
- | 295,830 | 33,395 | - | (36,180 | ) | 293,045 | |||||||||||||||||
Income from operations
|
- | 53,791 | 17,372 | - | - | 71,163 | ||||||||||||||||||
Interest expense, net
|
- | (36,916 | ) | (13,436 | ) | - | - | (50,352 | ) | |||||||||||||||
Loss on extinguishment of debt
|
- | (1,048 | ) | - | - | - | (1,048 | ) | ||||||||||||||||
Other expense
|
- | (252 | ) | - | - | - | (252 | ) | ||||||||||||||||
Equity in income of subsidiaries
|
8,443 | - | - | 8,443 | (16,886 | ) | - | |||||||||||||||||
Income before income taxes
|
8,443 | 15,575 | 3,936 | 8,443 | (16,886 | ) | 19,511 | |||||||||||||||||
Income tax expense
|
- | (7,132 | ) | (1,712 | ) | - | - | (8,844 | ) | |||||||||||||||
Net income
|
$ | 8,443 | $ | 8,443 | $ | 2,224 | $ | 8,443 | $ | (16,886 | ) | $ | 10,667 |
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
|
||||||||||||||||||||||||
Nine Months Ended September 30, 2012
|
||||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Nexstar
|
Nexstar
|
Consolidated
|
||||||||||||||||||||||
Nexstar
|
Broadcasting
|
Mission
|
Holdings
|
Eliminations
|
Company
|
|||||||||||||||||||
Net broadcast revenue (including trade and barter)
|
$ | - | $ | 248,521 | $ | 13,937 | $ | - | $ | - | $ | 262,458 | ||||||||||||
Revenue between consolidated entities
|
- | 5,805 | 23,304 | - | (29,109 | ) | - | |||||||||||||||||
Net revenue
|
- | 254,326 | 37,241 | - | (29,109 | ) | 262,458 | |||||||||||||||||
Operating expenses:
|
||||||||||||||||||||||||
Direct operating expenses, excluding depreciation and amortization
|
- | 60,583 | 5,347 | - | - | 65,930 | ||||||||||||||||||
Selling, general, and administrative expenses, excluding depreciation and amortization
|
- | 79,705 | 2,041 | - | - | 81,746 | ||||||||||||||||||
Local service agreement fees between consolidated entities
|
- | 23,304 | 5,805 | (29,109 | ) | - | ||||||||||||||||||
Amortization of broadcast rights
|
- | 13,089 | 3,214 | - | - | 16,303 | ||||||||||||||||||
Amortization of intangible assets
|
- | 12,784 | 3,811 | - | - | 16,595 | ||||||||||||||||||
Depreciation
|
- | 15,217 | 2,142 | - | - | 17,359 | ||||||||||||||||||
Total operating expenses
|
- | 204,682 | 22,360 | - | (29,109 | ) | 197,933 | |||||||||||||||||
Income from operations
|
- | 49,644 | 14,881 | - | - | 64,525 | ||||||||||||||||||
Interest expense, net
|
- | (26,715 | ) | (11,206 | ) | - | - | (37,921 | ) | |||||||||||||||
Loss on extinguishment of debt
|
- | (497 | ) | - | - | - | (497 | ) | ||||||||||||||||
Equity in income of subsidiaries
|
18,705 | - | - | 18,705 | (37,410 | ) | - | |||||||||||||||||
Income before income taxes
|
18,705 | 22,432 | 3,675 | 18,705 | (37,410 | ) | 26,107 | |||||||||||||||||
Income tax expense
|
- | (3,727 | ) | (985 | ) | - | - | (4,712 | ) | |||||||||||||||
Net income
|
$ | 18,705 | $ | 18,705 | $ | 2,690 | $ | 18,705 | $ | (37,410 | ) | $ | 21,395 |
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
|
||||||||||||||||||||||||
Nine Months Ended September 30, 2013
|
||||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Nexstar
|
Nexstar
|
Consolidated
|
||||||||||||||||||||||
Nexstar
|
Broadcasting
|
Mission
|
Holdings
|
Eliminations
|
Company
|
|||||||||||||||||||
Cash flows from operating activities
|
$ | - | $ | 43,554 | $ | (743 | ) | $ | - | $ | 2,917 | $ | 45,728 | |||||||||||
Cash flows from investing activities:
|
||||||||||||||||||||||||
Purchases of property and equipment
|
- | (16,826 | ) | (81 | ) | - | - | (16,907 | ) | |||||||||||||||
Deposits and payments for acquisitions
|
- | (161,321 | ) | (59,509 | ) | - | - | (220,830 | ) | |||||||||||||||
Other investing activities
|
- | 51 | 2,917 | - | (2,917 | ) | 51 | |||||||||||||||||
Net cash used in investing activities
|
- | (178,096 | ) | (56,673 | ) | - | (2,917 | ) | (237,686 | ) | ||||||||||||||
Cash flows from financing activities:
|
||||||||||||||||||||||||
Proceeds from issuance of long-term debt
|
- | 158,875 | 65,000 | - | - | 223,875 | ||||||||||||||||||
Repayments of long-term debt
|
- | (65,393 | ) | (5,520 | ) | - | - | (70,913 | ) | |||||||||||||||
Common stock dividends paid
|
(10,654 | ) | - | - | - | - | (10,654 | ) | ||||||||||||||||
Purchase of treasury stock
|
(8,422 | ) | - | - | - | - | (8,422 | ) | ||||||||||||||||
Inter-company payments
|
12,914 | (12,914 | ) | - | - | - | - | |||||||||||||||||
Other financing activities
|
6,162 | 7,870 | (340 | ) | - | - | 13,692 | |||||||||||||||||
Net cash provided by financing activities
|
- | 88,438 | 59,140 | - | - | 147,578 | ||||||||||||||||||
Net (decrease) increase in cash and cash equivalents
|
- | (46,104 | ) | 1,724 | - | - | (44,380 | ) | ||||||||||||||||
Cash and cash equivalents at beginning of period
|
- | 68,681 | 318 | - | - | 68,999 | ||||||||||||||||||
Cash and cash equivalents at end of period
|
$ | - | $ | 22,577 | $ | 2,042 | $ | - | $ | - | $ | 24,619 |
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
|
||||||||||||||||||||||||
Nine Months Ended September 30, 2012
|
||||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Nexstar
|
Nexstar
|
Consolidated
|
||||||||||||||||||||||
Nexstar
|
Broadcasting
|
Mission
|
Holdings
|
Eliminations
|
Company
|
|||||||||||||||||||
Cash flows from operating activities
|
$ | - | $ | 66,973 | $ | 1,756 | $ | - | $ | - | $ | 68,729 | ||||||||||||
Cash flows from investing activities:
|
||||||||||||||||||||||||
Purchases of property and equipment
|
- | (10,858 | ) | (166 | ) | - | - | (11,024 | ) | |||||||||||||||
Escrow payments on station acquisitions
|
- | (22,554 | ) | (6,000 | ) | - | - | (28,554 | ) | |||||||||||||||
Other investing activities
|
- | 39 | - | - | - | 39 | ||||||||||||||||||
Net cash used in investing activities
|
- | (33,373 | ) | (6,166 | ) | - | - | (39,539 | ) | |||||||||||||||
Cash flows from financing activities:
|
||||||||||||||||||||||||
Proceeds from issuance of long-term debt
|
- | 66,500 | 4,000 | - | - | 70,500 | ||||||||||||||||||
Repayments of long-term debt
|
- | (94,742 | ) | (993 | ) | - | - | (95,735 | ) | |||||||||||||||
Inter-company payments
|
(1,007 | ) | 1,007 | - | - | - | - | |||||||||||||||||
Other financing activities
|
1,007 | (212 | ) | (60 | ) | - | - | 735 | ||||||||||||||||
Net cash (used in) provided by financing activities
|
- | (27,447 | ) | 2,947 | - | - | (24,500 | ) | ||||||||||||||||
Net increase (decrease) in cash and cash equivalents
|
- | 6,153 | (1,463 | ) | - | - | 4,690 | |||||||||||||||||
Cash and cash equivalents at beginning of period
|
- | 5,648 | 1,898 | - | - | 7,546 | ||||||||||||||||||
Cash and cash equivalents at end of period
|
$ | - | $ | 11,801 | $ | 435 | $ | - | $ | - | $ | 12,236 |
13.
|
Subsequent Events
|
•
|
Net revenue during the third quarter of 2013 increased by $35.8 million, or 39.8% compared to the same period in 2012. The increase in net revenue was primarily due to our December 2012 acquisition of ten television stations and Inergize Digital Media (“Inergize”) from Newport Television, LLC (“Newport”) and an additional eight television stations acquired by the Company during the nine months ended September 30, 2013.
|
•
|
On November 6, 2013, we entered into a stock purchase agreement to acquire the outstanding equity of privately-held Grant Company, Inc. (“Grant”), the owner of seven television stations in four markets, for $87.5 million in cash, subject to adjustments for working capital to be acquired. Simultaneous with this acquisition, we entered into a purchase agreement with Mission pursuant to which Mission will acquire one of Grant’s television stations and enter into local service agreements with us. A deposit of $8.5 million was paid upon signing the stock purchase agreement funded by our cash on hand. The remaining purchase price is expected to be funded through cash generated from operations prior to closing, borrowings under our and Mission’s existing credit facilities and future credit market transactions. We project the acquisition to close in the first quarter of 2014.
|
•
|
On October 1, 2013, we issued $275.0 million of Additional 6.875% Notes at 100.25%. The Additional 6.875% Notes will mature on November 15, 2020 and interest is payable semiannually in arrears on May 15 and November 15 of each year.
|
•
|
On October 1, 2013, we and Mission entered into amendments to each of our senior secured credit facilities. The amendments provided for incremental term loan facilities (“Term Loan B-2 Facilities”) to us of $25.0 million and to Mission of $125.0 million and amended revolving credit facilities available to us of $75.0 million and to Mission of $30.0 million. The principal amounts under the Term Loan B-2 Facilities are reduced by quarterly payments of 0.25% beginning December 31, 2013. The remainder of the principal is due in full at maturity on October 1, 2020.
|
•
|
We and Mission expect to use the proceeds from the Additional 6.875% Notes and Term Loan B-2 Facilities to repurchase the outstanding principal balance of the 8.875% Notes, to partially fund the Company’s acquisition of five television stations in four markets from Citadel and Stainless Broadcasting, L.P. (“Stainless”), to pay for related fees and expenses and for general corporate purposes. On October 1, 2013, we and Mission repurchased $292.7 million of the 8.875% Notes at 108.875%, plus accrued and unpaid interest, in accordance with a tender offer. The repurchase resulted in a loss on extinguishment of debt of $31.3 million. We and Mission issued a notice of redemption to the holders of the remaining principal balance of $21.9 million at a redemption price as defined in the indenture, plus accrued and unpaid interest, to redeem such outstanding amount on November 16, 2013.
|
•
|
On September 16, 2013, we entered into definitive agreements to acquire three television stations in three markets. Under the terms of the purchase agreements, we will acquire the assets of KCAU and WHBF and the outstanding equity of WOI for a total of $87.9 million in cash, subject to adjustments for working capital, from Citadel Communications, L.P. and its related entities (“Citadel”). We made payments of $44.8 million to acquire the assets excluding FCC licenses and real property interests of KCAU and WHBF and $21.0 million as an upfront payment to acquire the outstanding equity of WOI, funded by a combination of borrowings under our revolving credit facility and cash on hand. We began providing programming and sales services to these stations pursuant to time brokerage agreements effective September 16, 2013. We expect to fund the $22.0 million remaining purchase price on these acquisitions through borrowings under our existing credit facility and cash on hand. The acquisitions are subject to FCC approval and other customary conditions and we project them to close in the first quarter of 2014.
|
•
|
On September 13, 2013, Mission entered into a definitive agreement to acquire two television stations in the Binghamton, New York market, from Stainless. Under the terms of the purchase agreement, Mission will acquire the assets of WICZ and WBPN-LP for $15.3 million in cash, subject to adjustments for working capital to be acquired. A deposit of $0.2 million was paid upon signing the agreement. The remaining purchase price is expected to be funded by Mission through borrowings under its existing credit facility and cash on hand. The acquisition is subject to FCC approval and other customary conditions and Mission projects it to close in the first quarter of 2014.
|
•
|
During the nine months ended September 30, 2013, our Board of Directors declared quarterly dividends of $0.12 per share of Nexstar’s common stock. Total payments for dividends during the nine months ended September 30, 2013 were $10.7 million.
|
•
|
On June 28, 2013, we and Mission entered into amendments to each of our senior secured credit facilities. The amendments provided commitments for incremental term loan facilities (“Term Loan A Facilities”) available to us of $144.0 million and to Mission of $90.0 million, subject to reallocation of up to $18.0 million for the benefit of Rocky Creek Communications, Inc. (“Rocky Creek”), an independent third party, pursuant to the terms of the amended credit agreements. On June 28, 2013, we received initial proceeds of $50.0 million under our incremental term loan facility, which was used to repay outstanding revolving loans of $27.0 million in June 2013 and $22.0 million in July 2013.
|
•
|
On April 24, 2013, we and Mission entered into a stock purchase agreement to acquire the stock of privately-held Communications Corporation of America (“CCA”) and White Knight Broadcasting (“White Knight”), the owners of 19 television stations in 10 markets, for a total consideration of $270.0 million, subject to adjustments for working capital to be acquired. A deposit of $27.0 million was paid upon signing the agreement which was funded by a combination of borrowings under our revolving credit facility and cash on hand. The remaining purchase price is expected to be funded through cash generated from operations prior to closing, borrowings under the existing credit facilities and future credit market transactions. We project the acquisitions to close in the fourth quarter of 2013 or the first quarter of 2014.
|
•
|
On March 1, 2013, we and Mission acquired the assets of WFFF, the FOX affiliate, and WVNY, the ABC affiliate, both in the Burlington, Vermont market from Smith Media, LLC for a total consideration of $16.6 million in cash, funded by a combination of our and Mission’s $10.0 million total borrowings from the revolving credit facilities and cash on hand.
|
•
|
Effective February 1, 2013, we acquired the assets of KGPE, the CBS affiliate in Fresno, California market, KGET, the NBC/CW affiliate, and KKEY-LP, the low powered Telemundo affiliate, both in the Bakersfield, California market, from Newport for $35.4 million in cash, funded by cash on hand.
|
•
|
Effective February 1, 2013, we entered into a definitive agreement to acquire the assets of KSEE, the NBC affiliate serving the Fresno, California market, and an unrelated network affiliation agreement from Granite Broadcasting Corporation for $26.5 million in cash, subject to adjustments for working capital acquired. Pursuant to the purchase agreement, we made a payment of $20.0 million, funded by cash on hand, to acquire the station’s assets excluding FCC license and certain transmission equipment. On April 17, 2013, we received approval from the FCC to purchase the remaining assets of KSEE. On May 31, 2013, we completed the acquisition of the FCC license and certain transmission equipment and paid the remaining purchase price of $6.5 million.
|
•
|
Effective January 1, 2013, Mission acquired the assets of KLRT-TV, the FOX affiliate and KASN, the CW affiliate, both in the Little Rock, Arkansas market, from Newport for $59.7 million, funded by Mission’s $60.0 million term loan under its senior secured credit facility.
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||||||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||||||||||||||||||
Amount
|
%
|
Amount
|
%
|
Amount
|
%
|
Amount
|
%
|
|||||||||||||||||||||||||
Local
|
$ | 63,605 | 49.0 | $ | 44,743 | 47.3 | $ | 190,270 | 50.6 | $ | 137,535 | 50.2 | ||||||||||||||||||||
National
|
28,646 | 22.1 | 19,308 | 20.4 | 80,596 | 21.4 | 55,543 | 20.3 | ||||||||||||||||||||||||
Political
|
1,030 | 0.8 | 10,153 | 10.7 | 3,615 | 1.0 | 18,929 | 6.9 | ||||||||||||||||||||||||
Retransmission compensation
|
25,586 | 19.7 | 15,102 | 16.0 | 74,304 | 19.8 | 44,881 | 16.3 | ||||||||||||||||||||||||
Digital media revenue
|
10,058 | 7.6 | 4,482 | 4.7 | 24,223 | 6.4 | 13,041 | 4.8 | ||||||||||||||||||||||||
Network compensation
|
135 | 0.1 | 191 | 0.2 | 498 | 0.1 | 585 | 0.2 | ||||||||||||||||||||||||
Management fee
|
- | - | - | - | - | - | 1,961 | 0.7 | ||||||||||||||||||||||||
Other
|
851 | 0.7 | 528 | 0.7 | 2,712 | 0.7 | 1,760 | 0.6 | ||||||||||||||||||||||||
Total gross revenue
|
129,911 | 100.0 | 94,507 | 100.0 | 376,218 | 100.0 | 274,235 | 100.0 | ||||||||||||||||||||||||
Less: Agency commissions
|
(12,009 | ) | (9.2 | ) | (9,661 | ) | (10.2 | ) | (35,192 | ) | (9.4 | ) | (27,344 | ) | (10.0 | ) | ||||||||||||||||
Net broadcast revenue
|
117,902 | 90.8 | 84,846 | 89.8 | 341,026 | 90.6 | 246,891 | 90.0 | ||||||||||||||||||||||||
Trade and barter revenue
|
7,890 | 5,106 | 23,182 | 15,567 | ||||||||||||||||||||||||||||
Net revenue
|
$ | 125,792 | $ | 89,952 | $ | 364,208 | $ | 262,458 |
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||||||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||||||||||||||||||
Amount
|
%
|
Amount
|
%
|
Amount
|
%
|
Amount
|
%
|
|||||||||||||||||||||||||
Net revenue
|
$ | 125,792 | 100.0 | $ | 89,952 | 100.0 | $ | 364,208 | 100.0 | $ | 262,458 | 100.0 | ||||||||||||||||||||
Operating expenses:
|
||||||||||||||||||||||||||||||||
Corporate expenses
|
6,682 | 5.3 | 5,891 | 6.5 | 20,294 | 5.6 | 16,424 | 6.2 | ||||||||||||||||||||||||
Station direct operating expenses, net of trade
|
35,557 | 28.3 | 20,536 | 22.8 | 102,556 | 28.2 | 61,047 | 23.3 | ||||||||||||||||||||||||
Selling, general and administrative expenses
|
30,905 | 24.6 | 21,615 | 24.0 | 90,358 | 24.8 | 65,322 | 24.9 | ||||||||||||||||||||||||
Trade and barter expense
|
7,636 | 6.1 | 4,661 | 5.2 | 22,601 | 6.2 | 14,697 | 5.6 | ||||||||||||||||||||||||
Depreciation
|
8,598 | 6.8 | 5,896 | 6.6 | 24,791 | 6.8 | 17,359 | 6.6 | ||||||||||||||||||||||||
Amortization of intangible assets
|
7,996 | 6.4 | 5,480 | 6.1 | 22,900 | 6.3 | 16,595 | 6.3 | ||||||||||||||||||||||||
Amortization of broadcast rights, excluding barter
|
3,265 | 2.6 | 2,316 | 2.6 | 9,545 | 2.6 | 6,489 | 2.5 | ||||||||||||||||||||||||
Income from operations
|
$ | 25,153 | $ | 23,557 | $ | 71,163 | $ | 64,525 |
Nine Months Ended
|
||||||||
September 30,
|
||||||||
2013
|
2012
|
|||||||
Net cash provided by operating activities
|
$ | 45,728 | $ | 68,729 | ||||
Net cash used in investing activities
|
(237,686 | ) | (39,539 | ) | ||||
Net cash provided by (used in) financing activities
|
147,578 | (24,500 | ) | |||||
Net (decrease) increase in cash and cash equivalents
|
$ | (44,380 | ) | $ | 4,690 | |||
Cash paid for interest
|
$ | 36,901 | $ | 32,693 | ||||
Cash paid for income taxes, net
|
$ | 2,143 | $ | 522 |
As of
|
As of
|
|||||||
September 30,
|
December 31,
|
|||||||
2013
|
2012
|
|||||||
Cash and cash equivalents
|
$ | 24,619 | $ | 68,999 | ||||
Long-term debt including current portion
|
1,011,499 | 857,642 | ||||||
Unused incremental term loan commitments under senior secured credit facilities
|
184,000 | - | ||||||
Unused revolving loan commitments under senior secured credit facilities(1)
|
45,000 | 100,000 |
(1)
|
Based on covenant calculations, as of September 30, 2013, all of the $45.0 million unused revolving loan commitments under the Nexstar and Mission senior secured credit facilities were available for borrowing.
|
Remainder
|
||||||||||||||||||||
Total
|
of 2013
|
2014-2015 | 2016-2017 |
Thereafter
|
||||||||||||||||
Nexstar senior secured credit facility(1)
|
$ | 349,770 | $ | 615 | $ | 10,045 | $ | 69,545 | $ | 269,565 | ||||||||||
Mission senior secured credit facility(1)
|
103,480 | 260 | 2,080 | 2,080 | 99,060 | |||||||||||||||
8.875% senior secured second lien notes due 2017(1) | 314,575 | - | - | 314,575 | - | |||||||||||||||
6.875 senior unsecured notes due 2020(1)
|
250,000 | - | - | - | 250,000 | |||||||||||||||
$ | 1,017,825 | $ | 875 | $ | 12,125 | $ | 386,200 | $ | 618,625 |
(1)
|
In October 2013, the Company repurchased $292.7 million of the 8.875% Notes and issued a redemption notice for the remaining balance of $21.9 million to be paid on November 16, 2013, issued $275.0 million of Additional 6.875% Notes, obtained additional $150.0 million in term loans from its senior secured credit facilities and repaid $55.0 million of outstanding revolving loans under the Nexstar senior secured credit facility.
|
ITEM 4.
|
Controls and Procedures
|
ITEM 1.
|
Legal Proceedings
|
ITEM 1A.
|
Risk Factors
|
·
|
Our ability to use net operating loss carry-forwards ("NOL"s) to reduce future tax payments may be limited if taxable income does not reach sufficient levels or there is a change in ownership of Nexstar.
|
·
|
The level of foreign investments held by our principal stockholder, ABRY, may limit additional foreign investments made in us.
|
·
|
The interest of our principal stockholder, ABRY, in other media may limit our ability to acquire television stations in particular markets, restricting our ability to execute our acquisition strategy.
|
·
|
We are controlled by one principal stockholder, ABRY, and its interests may differ from your interests.
|
ITEM 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
ITEM 3.
|
Defaults Upon Senior Securities
|
ITEM 4.
|
Mine Safety Disclosures
|
ITEM 5.
|
Other Information
|
ITEM 6.
|
Exhibits
|
Exhibit No.
|
Description
|
4.1
|
Supplemental Indenture, dated October 1, 2013 by and among Nexstar Broadcasting, Inc., Nexstar Broadcasting Group, Inc., Mission Broadcasting, Inc. and The Bank of New York Mellon, as trustee (Incorporated by reference to Exhibit 4.3 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc. on October 2, 2013)
|
4.2
|
First Supplemental Indenture, dated October 1, 2013, by and among Nexstar Broadcasting Group, Inc., Nexstar Broadcasting, Inc., Mission Broadcasting, Inc. and The Bank of New York Mellon, as trustee and collateral agent (Incorporated by reference to Exhibit 4.4 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc. on October 2, 2013)
|
10.1
|
Registration Rights Agreements, dated as of October 1, 2013 by and among Nexstar Broadcasting, Inc., Nexstar Broadcasting Group, Inc., Mission Broadcasting, Inc., and Credit Suisse Securities (USA), LLC, Wells Fargo Securities, LLC, RBC Capital Markets, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital, Inc. and Suntrust Robinson Humphrey, Inc. (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 2, 2013)
|
10.2
|
Second Amendment (Incremental Amendment) to the Fifth Amended and Restated Credit Agreement, dated as of October 1, 2013, 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 10.2 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc. on October 2, 2013)
|
10.3
|
Second Amendment (Incremental Amendment) to the Fourth Amended and Restated Credit Agreement, dated as of October 1, by and among Mission Broadcasting, Inc., Bank of America, N.A. and the several Banks parties thereto (Incorporated by reference to Exhibit 10.3 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc. on October 2, 2013)
|
10.4
|
Option Agreement, dated as of November 1, 2013, among Mission Broadcasting, Inc., Nancie Smith, Dennis Thatcher and Nexstar Broadcasting, Inc. (WTVW)*
|
31.1
|
Certification of Perry A. Sook pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
|
31.2
|
Certification of Thomas E. Carter pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
|
32.1
|
Certification of Perry A. Sook pursuant to 18 U.S.C. ss. 1350.*
|
32.2
|
Certification of Thomas E. Carter 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, 2013 from this Quarterly Report on Form 10-Q, formatted in XBRL (eXtensible Business Reporting Language).*
|
NEXSTAR BROADCASTING GROUP, INC.
|
/S/ PERRY A. SOOK
|
|
By:
|
Perry A. Sook
|
Its:
|
President and Chief Executive Officer (Principal Executive Officer)
|
/S/ THOMAS E. CARTER
|
|
By:
|
Thomas E. Carter
|
Its:
|
Chief Financial Officer (Principal Accounting and Financial Officer)
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
By:
|
/S/ PERRY A. SOOK
|
Perry A. Sook
President and Chief Executive Officer
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
By:
|
/s/ THOMAS E. CARTER
|
Thomas E. Carter
Chief Financial Officer
|
Dated: November 8, 2013
|
/S/ PERRY A. SOOK
|
Perry A. Sook
|
|
President and Chief Executive Officer
(Principal Executive Officer)
|
Dated: November 8, 2013
|
/S/ THOMAS E. CARTER
|
Thomas E. Carter
|
|
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
ARTICLE I GRANT OF OPTION; GENERAL TERMS OF SALE
|
1 | ||||||||
1.1 |
Option Grant; Assets Covered
|
1 | |||||||
(a)
|
FCC Authorizations
|
1 | |||||||
(b)
|
Tangible Personal Property
|
2 | |||||||
(c)
|
Real Property
|
2 | |||||||
(d)
|
Agreements for Sale of Time
|
2 | |||||||
(e)
|
Program Contracts
|
2 | |||||||
(f)
|
Other Contracts
|
2 | |||||||
(g)
|
Trademarks, etc
|
2 | |||||||
(h)
|
Programming Copyrights
|
2 | |||||||
(i)
|
FCC Records
|
2 | |||||||
(j)
|
Files and Records
|
2 | |||||||
(k)
|
Goodwill
|
3 | |||||||
(l)
|
Prepaid Items
|
3 | |||||||
(m)
|
Cash
|
3 | |||||||
(n)
|
Receivables and Other Claims
|
3 | |||||||
1.2 |
Excluded Assets
|
3 | |||||||
(a)
|
Insurance
|
3 | |||||||
(b)
|
Name
|
3 | |||||||
(c)
|
Certain Contracts
|
3 | |||||||
(d)
|
Corporate Books and Records
|
3 | |||||||
(e)
|
Transaction Documents
|
3 | |||||||
1.3 |
Option Exercise
|
3 | |||||||
1.4 |
Liabilities.
|
4 | |||||||
(a)
|
Permitted Encumbrances
|
4 | |||||||
(b)
|
Assumption of Liabilities Generally
|
4 | |||||||
ARTICLE II CLOSING
|
5 | ||||||||
2.1 |
Exercise Price.
|
5 | |||||||
(a)
|
Payment
|
5 | |||||||
(b)
|
Definition of Cash Purchase Price
|
5 | |||||||
(c)
|
Determination of Cash Purchase Price
|
5 | |||||||
(d)
|
Allocation of Cash Purchase Price after Sale
|
5 | |||||||
2.2 |
The Closing
|
6 | |||||||
2.3 |
Deliveries at Closing
|
6 | |||||||
(a)
|
Deliveries by Seller
|
6 | |||||||
(b)
|
Deliveries by Buyer
|
7 | |||||||
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER
|
7 | ||||||||
3.1 |
Incorporation; Power
|
7 | |||||||
3.2 |
Corporate Action
|
7 | |||||||
3.3 |
No Defaults
|
8 | |||||||
3.4 |
Brokers
|
8 | |||||||
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT
|
8 | ||||||||
4.1 |
Capacity
|
8 | |||||||
4.2 |
Action
|
8 | |||||||
4.3 |
No Defaults
|
8 | |||||||
4.4 |
Brokers
|
8 | |||||||
ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER
|
9 | ||||||||
5.1 |
Incorporation
|
9 | |||||||
5.2 |
Action
|
9 | |||||||
5.3 |
No Defaults
|
9 | |||||||
5.4 |
Brokers
|
9 | |||||||
ARTICLE VI COVENANTS OF SELLER AND PARENT
|
9 | ||||||||
6.1 |
Covenants of Seller and Parent Generally
|
9 | |||||||
(a)
|
FCC Authorizations and Other Matters
|
9 | |||||||
(b)
|
Restrictions
|
10 | |||||||
(c)
|
Reports; Access to Facilities, Files, and Records
|
10 | |||||||
(d)
|
Notice of Proceedings
|
10 | |||||||
(e)
|
Notice of Certain Developments
|
11 | |||||||
(f)
|
Issuance or other Transfer of Stock or Equivalents
|
11 | |||||||
(g)
|
No Premature Assumption of Control
|
11 | |||||||
6.2 |
Covenants of Seller and Parent during the Exercise Period
|
11 | |||||||
(a)
|
Application for Commission Consent
|
11 | |||||||
(b)
|
Consents
|
12 | |||||||
(c)
|
Consummation of Sale
|
12 | |||||||
(d)
|
Hart-Scott-Rodino
|
12 | |||||||
ARTICLE VII COVENANTS OF BUYER
|
12 | ||||||||
7.1 |
Covenants of Buyer Generally
|
12 | |||||||
7.2 |
Covenants of Buyer during Exercise Period
|
12 | |||||||
ARTICLE VIII CONDITIONS TO SELLER'S OBLIGATIONS ON THE CLOSING DATE
|
13 | ||||||||
8.1 |
Representations, Warranties, Covenants.
|
13 | |||||||
8.2 |
Proceedings.
|
13 | |||||||
8.3 |
FCC Authorization
|
13 | |||||||
8.4 |
Hart-Scott-Rodino
|
13 | |||||||
8.5 |
Other Instruments
|
14 | |||||||
ARTICLE IX REMEDIES
|
14 | ||||||||
9.1 |
Bulk Sales Indemnity
|
14 | |||||||
9.2 |
Acknowledgment by Buyer
|
14 |
ARTICLE X TERMINATION/MISCELLANEOUS
|
15 | ||||||||
10.1 |
Termination of Agreement Prior to the Closing Date
|
15 | |||||||
(a)
|
By Parent
|
15 | |||||||
(b)
|
By Buyer
|
15 | |||||||
10.2 |
Remedies
|
15 | |||||||
10.3 |
Expenses
|
15 | |||||||
10.4 |
Assignments; Exercise in Part
|
15 | |||||||
10.5 |
Further Assurances
|
16 | |||||||
10.6 |
Notices
|
16 | |||||||
10.7 |
Captions
|
17 | |||||||
10.8 |
Law Governing
|
17 | |||||||
10.9 |
Waiver of Provisions
|
17 | |||||||
10.1 |
Counterparts
|
17 | |||||||
10.11 |
Entire Agreement/Amendments
|
17 | |||||||
10.12 |
Access to Books and Records.
|
18 | |||||||
10.13 |
Public Announcements
|
18 | |||||||
10.14 |
Definitional Provisions.
|
18 | |||||||
(a)
|
Terms Defined in Appendix
|
18 | |||||||
(b)
|
Gender and Number
|
19 | |||||||
10.15 |
Arbitration.
|
19 | |||||||
(a)
|
Generally
|
19 | |||||||
(b)
|
Notice of Arbitration
|
19 | |||||||
(c)
|
Selection of Arbitrator
|
19 | |||||||
(d)
|
Conduct of Arbitration
|
19 | |||||||
(e)
|
Enforcement
|
20 | |||||||
(f)
|
Expenses
|
20 |
(1)
|
(x) the product of seven (7) and the amount of the cash flow generated by the Station during the twelve (12) months completed prior to the date upon which the Exercise Notice is given, reduced by (y) without duplication, the amount of the Existing Station Indebtedness as of the date of the Closing and any amount owing as of the date of the Closing by Seller to Buyer or any of its affiliates; and
|
(2)
|
the sum, without duplication, of the amount of the Existing Station Indebtedness as of the date of the Closing and any amount owing as of the date of the Closing by Seller to Buyer or any of its affiliates.
|
(1)
|
one or more bills of sale or other instruments (including assignments of FCC Authorizations, call letters, service marks, leases and other contracts) conveying the Station Assets;
|
(2)
|
any releases of Liens that are necessary in order to transfer the Station Assets in the manner contemplated by Section 1.4(a);
|
(3)
|
a certified copy of the resolutions or proceedings of Seller’s board of directors and stockholders (or similar Persons) authorizing Seller’s consummation of the Sale;
|
(4)
|
a certificate as to the existence and/or good standing of Seller issued by the Secretary of State of each state under the laws of which Seller is incorporated, organized, formed or authorized to do business, in each case dated on or after the fifth Business Day prior to the Closing Date, certifying as to the good standing and/or qualification of Seller in such jurisdiction;
|
(5)
|
a receipt for the Cash Purchase Price;
|
(6)
|
all Consents received by Seller through the Closing Date;
|
(7)
|
a certificate of Seller to the effect that, except as set forth in such certificate, each of the representations and warranties of Seller contained in this Agreement is true and accurate in all material respects (except to the extent changes are permitted or contemplated pursuant to this Agreement) as if made on and as of the Closing Date; and
|
(8)
|
such other documents as Buyer may reasonably request.
|
(1)
|
a certificate of Buyer dated the Closing Date to the effect that the conditions set forth in Article VIII have been fulfilled;
|
(2)
|
if Buyer is not a natural person, then a certified copy of the resolutions or proceedings of Buyer authorizing the consummation of the Sale and the Assumption;
|
(3)
|
if Buyer is not a natural person, then a certificate issued by the Secretary of State of the state under the laws of which Buyer is incorporated, organized or formed (and, if qualification of Buyer to conduct business in the States of Indiana or Kentucky is required in order for Buyer to hold the Station Assets after the Sale, then of the Secretaries of the States of Indiana or Kentucky), in each case dated on or after the fifth Business Day prior to the Closing Date, certifying as to the organization and/or qualification of Buyer in each such jurisdiction; and
|
(4)
|
such other documents as Seller may reasonably request.
|
(1)
|
other than in the ordinary course of business, sell, lease (as lessor), transfer, or agree to sell, lease (as lessor), or transfer any material Station Assets (other than in the ordinary course of its business) without replacement thereof with functionally equivalent or superior assets;
|
(2)
|
enter into any amendment or other modification of any agreement, instrument or other document governing or relating to Existing Station Indebtedness;
|
(3)
|
apply to the FCC for any construction permit that would materially adversely affect the Station’s present operations or make any material adverse change in the buildings or leasehold improvements owned by Seller; or
|
(4)
|
incur, or suffer or permit to exist, any Lien on any Station Asset(s) such that, after any application of the Cash Purchase Price that may be necessary at the time of the Closing to repay Existing Station Indebtedness, the Station Assets could not be conveyed as described in Section 1.4(a).
|
(1)
|
access, upon reasonable prior notice, during normal business hours, to all facilities, property, accounts, books, deeds, title papers, insurance policies, licenses, agreements, contracts, commitments, records, equipment, machinery, fixtures, furniture, vehicles, accounts payable and receivable, and inventories of Seller related to the Station, and
|
(2)
|
all such other information in Seller’s or Parent's possession concerning the affairs of the Station as Buyer may reasonably request,
|
By: | /s/ Dennis Thatcher | ||
Name: | Dennis Thatcher | ||
Title: | President |
/s/ Nancie Smith | |
Nancie Smith |
/s/ Dennis Thatcher | |
Dennis Thatcher |
By: | /s/ Thomas E. Carter | ||
Name: | Thomas E. Carter | ||
Title: | Chief Financial Officer |
Commitments and Contingencies
|
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2013
|
|||
Commitments and Contingencies [Abstract] | |||
Commitments and Contingencies |
Operating Leases During the first quarter of 2013, the Company corrected its other noncurrent liabilities, other noncurrent liabilities of Mission and beginning accumulated deficit as of the earliest period being presented by an increase of $0.4 million, $0.3 million and $0.7 million, respectively, for an error in deferred rent from tower leases recorded during a 2003 acquisition. If this error had been corrected prior to the earliest period presented, net income would not have been significantly impacted for the three and nine months ended September 30, 2013 and 2012. Management evaluated this error considering both qualitative and quantitative factors and considered its impact in relation to the three and nine months ended September 30, 2013, when it was corrected, as well as the period in which it originated and believes that the adjustment was not material to any previous annual or quarterly period. Guarantee of Mission Debt Nexstar guarantee full payment of all obligations incurred under Mission’s senior secured credit facility. In the event that Mission is unable to repay amounts due, Nexstar will be obligated to repay such amounts. The maximum potential amount of future payments that Nexstar would be required to make under this guarantee would be generally limited to the amount of borrowings outstanding. As of September 30, 2013, Mission had a maximum commitment of $228.5 million under its senior secured credit facility, of which $103.5 million of debt was outstanding. Indemnification Obligations In connection with certain agreements into which the Company enters 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 immaterial 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 its 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, results of operations or cash flows. |
!,G!AG^;RQ\)(<$X5`@
M'#,0CD\@'.<@')]!."Y`.+Z`<(@I"@B*406*4@6*4P6*5`6*506*5@6*5P6*
M6`6*626*626*626*626*626*626*626*626*626*626*616*616*616*616*
M616*616*616*616*616*616*66 ?&D3TD?Q*-7+1)ZSM/QR-6]O.(^&1
MLU3:=L:\D"9P9@,QBP+C`.E3+8Q5'VYO/`4373Y)3XUH70F+S:;0LFRS$"$9
M+6TS#^.0I'9FVUGH>V8\$I6\1Y2"B2A:VS2B145)8I92B[+-(HA-)NDJ9YLY
M3SQBSVP[@U0TF8I$,:AO\T,UT$26<3Q,+!T9K2L6"0T6LHN8ZI;(SH.(;N(,
M`2SRA3FFL315YF=G(=--@7W^TZFE(Z.E,>BF??-H'31$A&`GJR,1P.&`"`B1
M(8(E4>*_D8],U?OY^G1W@/21C9`.'C>NUL>A1S1/'N5I)R/@"T$\2.0A8K";
M\$[.$!`&@AOY.'BJR,\7IUL")([D7 3":EK\SR$'
M.]6+C%N1"?2^+1];8W?FS.:?4)FV*O#]H?+9KD"GF_',AR*?[LJB58'OMBO+
MI\=C *:J*A$YM,EM3J5SU>Z,OC7YWJI]/'J7U3,'S33]#`W
M1:3%2%*Z$]TV!S)=2[7#!*=TTT!:LQ.-GDWT[<#`#@SMP,@.C.W`Q`Y,[<`L
M#=!_LW-D'?^< DNQ0(:^2)1F%H&K]WHZ!&44+?W`T0=N3I`=
M+!Q]&!34N,NY/N1*80P[5ID$"3D8%3+7-&1WJ;R/KH01(=MLB,Y]/>,!)B+&
M<>:!WJ&Q,(:.2$@K[')WKH^3=(#)B+&MOI&;$^/Z[*BC3L^"$,=R]+XI!3'L
M4V42)%R;G>^/F,(=I_%Z@7(!LI+(L'TA)A$FL21R(/&9HO9F@EM), D@
MM]5:\23:1'B-]1@8YDFV9Y";PPWU#
M![FIUHH?'$8N4JD4;[2-':0DB[D4]\'$823("N>(J4/Y^KTNMQI\7N>(6K=ZMJN-81C-]2=8K>5Z67Z\=5X>+>JCH7`)N=8/R6
MJE/TOBKHO2=4:72GKY)A!3&.JJ+!1IJ24_2^JL&N<*>"U[:#B^9"$,Y#_Z+E
M[R__>&S$`U%%Q9:FM"REE?.]/A(2F$KM4SRNKOP9[-GZP-D&X+389%OZ(Q-;
M5DNKI!L8ZCGZ3";PO(DWBC?F5++F"LZ)YN<._A=0.`9X#H`WG*O3C7Y!^T]C
M^3\```#__P,`4$L#!!0`!@`(````(0"\<:(7JP0``'<5```9````>&PO=V]R
M:W-H965T
B30(Z$>B7H$)P3^(_=GB.@3YJ<#GYY
HXR
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MD6*(ME8><0Y,>RO/N`>F_5:$[JRCUY;+0_8^:Q/FD7K9ZAA*VS`/V3H>8SH'
MAJVI/-YT9#SF=,^/QYXNY'%H'BK4$IH(.+6D0O<`_/>A^!HYR2J4#CO0L@-M
M.]"Q`UT[T.-`-I#62U89Z#/#(^F``Y&D(3.<-.)`/LD::L;,<-*$`Y&D*3.<
M-$L#^2YW4[?Z]US`+`3,4L"L7.:V?%WTVUK`;`3,5L#L7.;FQC+EWL=8\X*#
MR]Q6K;'O*&"4DD!-'U0OGD6E+9%O^MNJ#6F;Q"%MG3BD[92'ZB5[<]IB<4A[
M+`YIW\4A;;PXI,T8A[0;"Y#=;Y5V:!&R.I/2%HU#'MO6R[:2Q[=U9Q[D,:X+
M>9Q;MV>DRF/=>MF^4/!X-P\52@'=R_F-4I!D%4J!'6C9@;8=Z-B!KAWHV8&^
M'1C8@:$=&-F!L1V8V(&I'9BE@6QN-[<#"SNPM`,K.["V`QL[L+4#.SNPMP,'
M#F35R2DT1Y=Q!G^E/%#5JHVJR1#7.:5;/3M32C=[P6@E:]A6NBO$(=T]JYY<)[%M%QP*4/$5,_A3?ZZ`2DEI%*^G9
M@04)_$3?V`(]1[,:S`@L1;,:K",P%=TGPSH"G]%],JPCL![-3+".P(UTGPSK
M"`Q*]\FPCL"B-"W!.FS2M"/R.V961V2;ZM[J4,7"0G.#]Q26!"_>*KNM62-J
M,_GZ/%18(-+&*AV,=#'2PTC?(#QR#TPD.'(/#<))(Q,))HT-PDD3$PDF30W"
M23,3"2;-,;+`R!(C*XRL,;+!R!8C.XVDUDAN5B=_BO[98YE#0<;_IN<1RU!=
M@3:@J0EF6@)&X">:FN!M"1Q%DQ.LDWDJV$65P&545O"V!,:CLI+JQ+H&/7_!
M&\O<P@3^IKN!M"1Q*=07KL$=!7
]8KVMW-10I%NV
M,-+&2`L
M([`351>L(S`451>L(_`851>L([`=51>L(W`B51>L(S`G51>L([`G51>L(S`H
M59>83J&Z)*\:_T9U.:=9;X95K=&\J:'BW,5Z2;GE@2R=M@>I5RV=C@>R=+H8
MZ6&D;Q`>O@
;
MF^TJ
Z*8#4W0=O-O,,Q-(8&<&/9PKX8C"XLST0'0M>6VJ194M:HBPZHI>
M)@BJ8%C42<=4=[:L2^"AQ1^)IE<\96^QN]O$*B*W6:S(EU)SP=Z=1I.MZ2
M<$)A;A82:I.CEU6VN84I._E(>QHI2Y#A2WTT3%BA]A2SCG*H.SU09'+:Z0
MAHJUAU?6A(<=N*+IMK58>0JDL,^?$!<;G*TP.#/]41L;M