Exhibit 99.2
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma condensed consolidated financial statements have been prepared by our management and are based on (a) the historical financial statements of (i) Nexstar Broadcasting Group, L.L.C., our predecessor, (ii) Quorum Broadcast Holdings, LLC and (b) the assumptions and adjustments described below.
The unaudited pro forma condensed consolidated balance sheet gives effect to the following transactions, as if such transactions had taken effect on September 30, 2003:
| | • | our corporate reorganization and merger with and into Nexstar Broadcasting Group, Inc., |
| | • | the completion of our public offering and the application of the net proceeds therefrom to redeem the mandatorily redeemable Series AA preferred membership interests of our predecessor Nexstar Broadcasting Group, L.L.C., redeem all of Nexstar Finance Holdings’ senior subordinated notes and partially finance the Quorum acquisition; |
| | • | the completion of the private placement of the 7% senior subordinated notes of $125 million by Nexstar Finance, Inc.; |
| | • | additional borrowings under our amended senior credit facilities; and |
| | • | the acquisition of Quorum. |
The unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2002, 2001 and 2000 and the nine months ended September 30, 2003 and 2002 give effect to the above transactions, as if they had occurred at the beginning of such period.
We have included all adjustments, consisting of normal recurring adjustments, which in the opinion of management, are necessary for a fair presentation of the data. We based the pro forma adjustments on available information and on assumptions that we believe are reasonable under the circumstances.
For pro forma purposes, the acquisition of Quorum was accounted for as a combination of entities under common control in a manner similar to a pooling of interests. Common control exists because ABRY Partners through its various funds both before and after merger holds more than 50% of the voting ownership of both Nexstar and Quorum. This conclusion is based on the guidance in FASB Statement No. 141 “Business Combinations” and EITF 02-05 “Definition of ‘Common Control’ in Relation to FASB Statement No. 141”.
The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the historical financial statements of Nexstar Broadcasting Group, L.L.C. and Quorum Broadcast Holdings, LLC and the related notes.
F-25
NEXSTAR BROADCASTING GROUP, L.L.C.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 2003
| | | | | | | | | | | | | | | | |
| | | Nexstar as of September 30, 2003
| | | Quorum as of September 30, 2003
| | | Pro Forma Adjustments
| | | Unaudited Pro Forma
| |
| | | | | | (dollars in thousands) | | | | |
Current assets | | | | | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 51,733 | | | $ | 1,283 | | | $
| 124,920
(53,418
(111,514
(38,098
(60
(7,159
(65,564
(2,000
(1,000
122,700
(197,150
229,500
(800
(700
(34,500
(4,000 | (1a)
)(2a)
)(4b)
)(4c)
)(4d)
)(4e)
)(4f)
)(4g)
)(4h)
(6)
)(7a)
(7b)
)(4a)
)(4i)
)(5)
)(3) | | $ | 14,173 | |
Accounts receivable, net | | | 28,520 | | | | 13,819 | | | | — | | | | 42,339 | |
Current portion of broadcast rights | | | 13,954 | | | | 10,650 | | | | — | | | | 24,604 | |
Other current assets | | | 2,644 | | | | 600 | | | | — | | | | 3,244 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total current assets | | | 96,851 | | | | 26,352 | | | | (38,843 | ) | | | 84,360 | |
Property and equipment, net | | | 67,253 | | | | 22,259 | | | | — | | | | 89,512 | |
Broadcast rights | | | 3,670 | | | | 4,847 | | | | — | | | | 8,517 | |
Intangible assets, net | | | 387,409 | | | | 145,218 | | |
| (4,038
2,300 | )(8)
(6) | | | 530,889 | |
Other assets | | | 1,973 | | | | 163 | | | | — | | | | 2,136 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total assets | | $ | 557,156 | | | $ | 198,839 | | | $ | (40,581 | ) | | $ | 715,414 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Current liabilities | | | | | | | | | | | | | | | | |
Accounts payable and accrued expenses | | $ | 9,555 | | | $ | 6,671 | | | $ | — | | | $ | 16,226 | |
Current portion of broadcast rights payable | | | 14,121 | | | | 9,839 | | | | — | | | | 23,960 | |
Current portion of senior credit facility | | | 1,388 | | | | — | | | | (1,388 | )(7a) | | | — | |
Current portion of long-term debt | | | — | | | | 11,500 | | | | (11,500 | )(4b) | | | — | |
Other current liabilities | | | 10,954 | | | | 223 | | | | — | | | | 11,177 | |
Amounts due related parties | | | — | | | | 1,183 | | | | (1,183 | )(4d) | | | — | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total current liabilities | | | 36,018 | | | | 29,416 | | | | (14,071 | ) | | | 51,363 | |
Senior credit facilities | | | 195,762 | | | | 100,014 | | |
| (195,762
(100,014
229,500 | )(7a)
)(4b)
(7b) | | | 229,500 | |
Senior discount notes | | | — | | | | 31,522 | | | | (31,522 | )(4c) | | | — | |
7% Senior subordinated notes due 2014 | | | — | | | | — | | | | 125,000 | (6) | | | 125,000 | |
12% Senior subordinated notes due 2008, net of discount | | | 155,313 | | | | — | | | | — | | | | 155,313 | |
16% Senior discount notes due 2009, net of discount | | | 27,697 | | | | — | | | | (27,697 | )(5) | | | — | |
11 3/8% Senior discount notes due 2013, net of discount | | | 78,997 | | | | — | | | | — | | | | 78,997 | |
SFAS No. 133 hedge accounting adjustment | | | 3,503 | | | | — | | | | — | | | | 3,503 | |
Note payable to related party | | | — | | | | 2,000 | | | | (2,000 | )(4g) | | | — | |
Broadcast rights payable | | | 4,008 | | | | 6,665 | | | | — | | | | 10,673 | |
Deferred revenue | | | 3,892 | | | | — | | | | — | | | | 3,892 | |
Deferred tax liabilities | | | 40,316 | | | | 3,929 | | | | — | | | | 44,245 | |
Preferred units subject to mandatory redemption | | | 53,418 | | | | 107,263 | | |
| (53,418
(65,564
(41,699 | )(2a)
)(4f)
)(4i) | | | — | |
Common units subject to mandatory redemption | | | — | | | | 1,500 | | | | (1,500 | )(4i) | | | — | |
Other liabilities | | | 4,239 | | | | 9,046 | | | | — | | | | 13,285 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total liabilities | | | 603,163 | | | | 291,355 | | | | (178,747 | ) | | | 715,771 | |
Redeemable common units | | | 8,298 | | | | — | | | | (8,298 | )(2b) | | | — | |
Minority interest in consolidated entity | | | 2,883 | | | | — | | | | — | | | | 2,883 | |
Members’ interest or stockholders’ equity | | | | | | | | | | | | | | | | |
Contributed capital | | | 118,685 | | | | 96,925 | | |
| (118,685
—
(96,925 | )(2b)
(4e)
)(4a) | | | — | |
Class A common stock | | | — | | | | — | | |
| 101
4
31 | (1b)
(4a)
(4i) | | | 136 | |
Class B common stock | | | — | | | | — | | |
| 1
133 | (4d)
(2b) | | | 134 | |
Class C common stock | | | — | | | | — | | | | 14 | (2b) | | | 14 | |
Additional paid-in capital | | | — | | | | — | | |
| 124,819
118,552
96,121
8,284
42,468
1,122 | (1c)
(2b)
(4a)
(2b)
(4i)
(4d) | | | 391,366 | |
Retained earnings (accumulated deficit) | | | (175,873 | ) | | | (189,441 | ) | |
| (3,754
(2,822
(7,159
(2,044
(4,038
(4,759
(1,000
(4,000 | )(4c)
)(4c)
)(4e)
)(5)
)(8)
)(5)
)(4h)
)(3) | | | (394,890 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total members’ interest or stockholders’ equity | | | (46,007 | ) | | | (92,516 | ) | | | 138,166 | | | | (357 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total liabilities, redeemable preferred and common units and members’ interest or stockholders’ equity | | $ | 557,156 | | | $ | 198,839 | | | $ | (40,581 | ) | | $ | 715,414 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
See notes to unaudited pro forma condensed consolidated balance sheet.
F-26
NEXSTAR BROADCASTING GROUP, L.L.C.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 2003
(dollars in thousands)
| (1) | To record the impact of the sale of Class A common stock reflects: |
| | (a) | net cash proceeds of $124.9 million from the offering used to repay the 16% senior discount notes, to redeem certain equity interests and used to partially finance the Quorum acquisition, |
| | (b) | par value of common stock, and |
| | (c) | additional paid-in capital. |
| (2) | To record the effect of our corporate reorganization as of September 30, 2003: |
| | (a) | To redeem mandatorily redeemable 15% Series AA preferred membership interests of $53.4 million, including accrued yield and premium of $1.6 million. |
| | (b) | To record the effect of the reorganization by allocating contributed capital of $118.7 million and redeemable common units of $8.3 million to the three classes of common stock. |
| (3) | To record the impact of paying a $4.0 million success fee to Perry A. Sook, our chief executive officer. |
| (4) | To record the effect of the Quorum acquisition as of September 30, 2003: |
| | (a) | To record the impact of converting common units of Quorum of $96.1 million into Class A common stock and repurchase of units of $0.8 million from former or departing senior executive employees of Quorum, primarily the chief executive officer. |
| | (b) | To record the impact of repaying Quorum’s existing revolving credit facility of $40.4 million and term loan facility of $71.1 million, for a total of $111.5 million. As of September 30, 2003, $11.5 million was classified as current liabilities. |
| | (c) | To record the impact of repaying Quorum’s 15% senior discount notes for a total of $38.1 million, including the associated call premium of $2.8 million and the acceleration of amortization of $3.8 million. As of September 30, 2003 the accreted balance amounted to $31.5 million. |
| | (d) | To record the impact of converting an accrued management fee of $1.1 million into 80,230 shares of Class B common stock and paying approximately $0.1 million for an accrued management fee payable to ABRY Partners, L.L.C. |
| | (e) | In connection with the Quorum acquisition, we will pay Quorum’s departing chief executive officer a discretionary severance payment of up to $7.2 million. |
| | (f) | To record the impact of redeeming preferred membership interests of Quorum for a total of $65.6 million, including accrued yield and premium of $1.3 million. |
| | (g) | To record the impact of repaying a $2.0 million note owed to Victor Rumore, the owner of VHR. |
| | (h) | To record the impact of paying $1.0 million of other costs related to the Quorum acquisition. |
| | (i) | To record the impact of converting preferred membership interests of Quorum of $41.7 million and redeemable common units of Quorum of $0.8 million into Class A common stock. The remaining redeemable common units of Quorum will be purchased for approximately $0.7 million from unaffiliated third party investors. |
| (5) | To record the impact of repaying Nexstar’s 16% senior discount notes for a total of $34.5 million, including the associated call premium of $4.8 million. As of September 30, 2003 the accreted balance of the senior subordinated notes amounted to $27.7 million. The excess of liquidation preference over carrying value of $2.0 million had been recorded to retained earnings. |
| (6) | To record the impact of the completion of the offering of senior subordinated notes of $125.0 million net proceeds aggregate principal by Nexstar Finance, excluding fees of $2.3 million. |
| (7) | To record the effect of Nexstar’s senior credit facilities refinancing: |
| | (a) | To record the impact of repaying Nexstar’s existing term loan facility of $130.0 million, Mission’s existing term loan facility of $55.0 million and Mission’s revolving credit facility of $12.2 million, for a total of $197.2 million. |
| | (b) | To record the impact of borrowing $140.0 million under Mission’s term loan facility, $55.0 million under Nexstar’s term loan facility and $34.5 million under Nexstar’s revolving credit facility, for a total of $229.5 million. |
| (8) | To record the impact of the write-off of debt issuance costs of $4.0 million, resulting from the redemption of Nexstar’s 16% senior discount notes ($0.9 million) and the extinguishment of the bank agreement ($3.1 million). |
F-27
NEXSTAR BROADCASTING GROUP, L.L.C.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2003
| | | | | | | | | | | | | | | | |
| | | Nexstar (1)
| | | Quorum(2)
| | | Pro Forma Adjustments
| | | Unaudited Pro Forma
| |
| | | (amounts in thousands, except per unit and
per share data) | | | | | | | |
Net broadcast revenue | | $ | 93,781 | | | $ | 47,328 | | | $ | — | | | $ | 141,109 | |
Trade and barter revenue | | | 8,365 | | | | 5,834 | | | | — | | | | 14,199 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total net revenue | | | 102,146 | | | | 53,162 | | | | — | | | | 155,308 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Operating expenses: | | | | | | | | | | | | | | | | |
Direct operating expenses (exclusive of depreciation and amortization shown separately below) | | | 30,528 | | | | 13,844 | | | | | | | | 44,372 | |
Selling, general and administrative expenses (exclusive of depreciation and amortization shown separately below) | | | 30,264 | | | | 20,303 | | | | — | | | | 50,567 | |
Amortization of broadcast rights | | | 11,030 | | | | 7,091 | | | | — | | | | 18,121 | |
Depreciation and amortization | | | 21,000 | | | | 12,060 | | | | — | | | | 33,060 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total operating expense | | | 92,822 | | | | 53,298 | | | | — | | | | 146,120 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Income (loss) from operations | | | 9,324 | | | | (136 | ) | | | — | | | | 9,188 | |
Interest expense | | | (40,371 | ) | | | (8,492 | ) | | | — | | | | (48,863 | ) |
Interest income | | | 471 | | | | — | | | | — | | | | 471 | |
Other income net | | | 1,403 | | | | 1,444 | | | | — | | | | 2,847 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Loss before income taxes and minority interest in consolidated entity | | | (29,173 | ) | | | (7,184 | ) | | | — | | | | (36,357 | ) |
Income tax (expense) | | | (1,478 | ) | | | (946 | ) | | | — | (3) | | | (2,424 | ) |
Minority interest in consolidated entity | | | 263 | | | | — | | | | — | | | | 263 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Loss before cumulative effect of change in accounting principle | | $ | (30,388 | ) | | $ | (8,130 | ) | | $ | — | | | $ | (38,518 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Basic and diluted loss per common unit: | | | | | | | | | | | | | | | | |
Loss before cumulative effect of change in accounting principle | | $ | (4.38 | ) | | | | | | | | | | | | |
Basic and diluted pro forma loss per common share(4): | | | | | | | | | | | | | | | | |
Loss before cumulative effect of change in accounting principle | | | | | | | | | | | | | | $ | (1.36 | ) |
Weighted-average number of common units outstanding used in calculating basic and diluted loss per common unit | | | 6,941 | | | | | | | | | | | | | |
Weighted-average number of pro forma common shares outstanding used in calculating basic and diluted pro forma loss per common share(4) | | | | | | | | | | | | | | | 28,283 | |
See notes to unaudited pro forma condensed consolidated statement of operations.
F-28
NEXSTAR BROADCASTING GROUP, L.L.C.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2002
| | | | | | | | | | | | | | | | |
| | | Nexstar (1)
| | | Quorum(2)
| | | Pro Forma Adjustments
| | | Unaudited Pro Forma
| |
| | | (amounts in thousands,
except per unit and per share data) | | | | | | | |
Net broadcast revenue | | $ | 83,931 | | | $ | 46,456 | | | $ | — | | | $ | 130,387 | |
Trade and barter revenue | | | 7,603 | | | | 5,432 | | | | — | | | | 13,035 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total net revenue | | | 91,534 | | | | 51,888 | | | | — | | | | 143,422 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Operating expenses: | | | | | | | | | | | | | | | | |
Direct operating expenses (exclusive of depreciation and amortization shown separately below) | | | 25,893 | | | | 12,617 | | | | | | | | 38,510 | |
Selling, general and administrative expenses (exclusive of depreciation and amortization shown separately below) | | | 25,445 | | | | 19,581 | | | | — | | | | 45,026 | |
Amortization of broadcast rights | | | 10,825 | | | | 7,335 | | | | — | | | | 18,160 | |
Depreciation and amortization | | | 19,690 | | | | 13,401 | | | | — | | | | 33,091 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total operating expense | | | 81,853 | | | | 52,934 | | | | — | | | | 134,787 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Income (loss) from operations | | | 9,681 | | | | (1.046 | ) | | | — | | | | 8,635 | |
Interest expense | | | (28,927 | ) | | | (18,084 | ) | | | — | | | | (47,011 | ) |
Interest income | | | 95 | | | | — | | | | — | | | | 95 | |
Other income (expense), net | | | (2,366 | ) | | | 386 | | | | — | | | | (1,980 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Loss before income taxes and minority interest in consolidated entity | | | (21,517 | ) | | | (18,744 | ) | | | — | | | | (40,261 | ) |
Income tax benefit (expense) | | | 2,685 | | | | (2,957 | ) | | | — | (3) | | | (272 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Loss before cumulative effect of change in accounting principle | | $ | (18,832 | ) | | $ | (21,701 | ) | | $ | — | | | $ | (40,533 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Basic and diluted loss per common unit: | | | | | | | | | | | | | | | | |
Loss before cumulative effect of change in accounting principle | | $ | (3.03 | ) | | | | | | | | | | | | |
Basic and diluted pro forma loss per common share(4): | | | | | | | | | | | | | | | | |
Loss before cumulative effect of change in accounting principle | | | | | | | | | | | | | | $ | (1.43 | ) |
Weighted-average number of common units outstanding used in calculating basic and diluted loss per common unit | | | 6,206 | | | | | | | | | | | | | |
Weighted-average number of pro forma common shares outstanding used in calculating basic and diluted pro forma loss per common share(4) | | | | | | | | | | | | | | | 28,283 | |
See notes to unaudited pro forma condensed consolidated statement of operations.
F-29
NEXSTAR BROADCASTING GROUP, L.L.C.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2003 and 2002
(dollars in thousands)
| (1) | Represents the unaudited consolidated statement of operations of Nexstar Broadcasting Group, L.L.C., our predecessor entity, for the nine months ended September 30, 2003 and 2002. |
| (2) | Represents the unaudited consolidated statement of operations of Quorum Broadcast Holdings, LLC, for the nine months ended September 30, 2003 and 2002. |
| (3) | The pro forma income tax benefit resulting from the pro forma adjustments is based on Nexstar Broadcasting Group, L.L.C.’s historical tax provision using historical amounts. For pro forma purposes, Nexstar has determined that it is more likely than not that any deferred tax assets arising from the pro forma adjustments will not be realized and, as a result, a full valuation allowance has been established. |
| (4) | Pro forma loss per common share has been calculated by dividing the pro forma loss before cumulative effect of change in accounting principle by the weighted average number of common shares outstanding. |
F-30
NEXSTAR BROADCASTING GROUP, L.L.C.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2002
| | | | | | | | | | | | | | | | |
| | | Nexstar (1)
| | | Quorum(3)
| | | Pro Forma Adjustments
| | | Unaudited Pro Forma
| |
| | | (amounts in thousands, except per unit and per share data) | |
Net broadcast revenue | | $ | 123,137 | | | $ | 64,981 | | | | — | | | $ | 188,118 | |
Trade and barter revenue | | | 10,702 | | | | 7,457 | | | | — | | | | 18,159 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total net revenue | | | 133,839 | | | | 72,438 | | | | — | | | | 206,277 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Operating expenses: | | | | | | | | | | | | | | | | |
Direct Station operating expenses (exclusive of depreciation and amortization shown separately below) | | | 35,147 | | | | 18,224 | | | | — | | | | 53,371 | |
Selling, general and administrative expenses (exclusive of depreciation and amortization shown separately below) | | | 35,823 | | | | 26,288 | | | | — | | | | 62,111 | |
Amortization of broadcast rights | | | 14,776 | | | | 9,913 | | | | — | | | | 24,689 | |
Depreciation and amortization | | | 26,657 | | | | 18,185 | | | | — | | | | 44,842 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total operating expense | | | 112,403 | | | | 72,610 | | | | — | | | | 185,013 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Income (loss) from operations | | | 21,436 | | | | (172 | ) | | | — | | | | 21,264 | |
Interest expense | | | (35,075 | ) | | | (28,705 | ) | | | — | | | | (63,780 | ) |
Interest income | | | 150 | | | | — | | | | — | | | | 150 | |
Other income (expense) | | | (2,356 | ) | | | 1,140 | | | | — | | | | (1,216 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Loss before income taxes | | | (15,845 | ) | | | (27,737 | ) | | | — | | | | (43,582 | ) |
Income tax benefit (expense) | | | 363 | | | | (3,001 | ) | | | — | (3) | | | (2,638 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Loss before cumulative effect of change in accounting principle | | $ | (15,482 | ) | | $ | (30,738 | ) | | $ | — | | | $ | (46,220 | ) |
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|
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|
|
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|
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|
Basic and diluted loss per common unit: | | | | | | | | | | | | | | | | |
Loss before cumulative effect of change in accounting principle | | $ | (2.49 | ) | | | | | | | | | | | | |
Basic and diluted pro forma loss per common share(4): | | | | | | | | | | | | | | | | |
Loss before cumulative effect of change in accounting principle | | | | | | | | | | | | | | $ | (1.63 | ) |
Weighted-average number of common units outstanding used in calculating basic and diluted loss per common unit | | | 6,216 | | | | | | | | | | | | | |
Weighted-average number of pro forma common shares outstanding used in calculating basic and diluted pro forma loss per common share(4) | | | | | | | | | | | | | | | 28,283 | |
See notes to unaudited pro forma condensed consolidated statement of operations.
F-31
NEXSTAR BROADCASTING GROUP, L.L.C.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2001
| | | | | | | | | | | | | | | | |
| | | Nexstar(1)
| | | Quorum(3)
| | | Pro Forma Adjustments
| | | Unaudited Pro Forma
| |
| | | (amounts in thousands, except per unit and per share data) | |
Net broadcast revenue | | $ | 99,054 | | | $ | 58,746 | | | $ | — | | | $ | 157,800 | |
Trade and barter revenue | | | 11,675 | | | | 7,244 | | | | — | | | | 18,919 | |
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|
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Total net revenue | | | 110,729 | | | | 65,990 | | | | — | | | | 176,719 | |
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Operating expenses: | | | | | | | | | | | | | | | | |
Direct Station operating expenses (exclusive of depreciation and amortization shown separately below) | | | 31,332 | | | | 15,545 | | | | — | | | | 46,877 | |
Selling, general and administrative expenses (exclusive of depreciation and amortization shown separately below) | | | 28,180 | | | | 24,715 | | | | — | | | | 52,895 | |
Amortization of broadcast rights | | | 17,344 | | | | 9,814 | | | | — | | | | 27,158 | |
Depreciation and amortization | | | 33,811 | | | | 27,065 | | | | — | | | | 60,876 | |
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Total operating expense | | | 110,667 | | | | 77,139 | | | | — | | | | 187,806 | |
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|
Income (loss) from operations | | | 62 | | | | (11,149 | ) | | | — | | | | (11,087 | ) |
Interest expense | | | (35,455 | ) | | | (23,623 | ) | | | — | | | | (59,078 | ) |
Interest income | | | 316 | | | | — | | | | — | | | | 316 | |
Other income (expense), net | | | (519 | ) | | | (2,417 | ) | | | — | | | | (2,936 | ) |
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|
Loss before income taxes | | | (35,596 | ) | | | (37,189 | ) | | | — | | | | (72,785 | ) |
Income tax benefit (expense) | | | 951 | | | | (1,562 | ) | | | — | (3) | | | (611 | ) |
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Loss before cumulative effect of change in accounting principle | | $ | (34,645 | ) | | $ | (38,751 | ) | | $ | — | | | $ | (73,396 | ) |
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|
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|
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|
Basic and diluted loss per common unit: | | | | | | | | | | | | | | | | |
Loss before cumulative effect of change in accounting principle | | $ | (6.82 | ) | | | | | | | | | | | | |
Basic and diluted pro forma loss per common share(4): | | | | | | | | | | | | | | | | |
Loss before cumulative effect of change in accounting principle | | | | | | | | | | | | | | $ | (2.60 | ) |
Weighted-average number of common units outstanding used in calculating basic and diluted loss per common unit | | | 5,078 | | | | | | | | | | | | | |
Weighted-average number of pro forma common shares outstanding used in calculating basic and diluted pro forma loss per common share(4) | | | | | | | | | | | | | | | 28,283 | |
See notes to unaudited pro forma condensed consolidated statement of operations.
F-32
NEXSTAR BROADCASTING GROUP, L.L.C.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2000
| | | | | | | | | | | | | | | | |
| | | Nexstar (1)
| | | Quorum(3)
| | | Pro Forma Adjustments
| | | Unaudited Pro Forma
| |
| | | (amounts in thousands, except per unit and per share data) | |
Net broadcast revenue | | $ | 107,085 | | | $ | 67,390 | | | $ | — | | | $ | 174,475 | |
Trade and barter revenue | | | 10,382 | | | | 7,758 | | | | — | | | | 18,140 | |
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Total net revenue | | | 117,467 | | | | 75,148 | | | | — | | | | 192,615 | |
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Operating expenses: | | | | | | | | | | | | | | | | |
Direct Station operating expenses (exclusive of depreciation and amortization shown separately below) | | | 29,269 | | | | 14,041 | | | | — | | | | 43,310 | |
Selling, general and administrative expenses (exclusive of depreciation and amortization shown separately below) | | | 28,790 | | | | 25,425 | | | | — | | | | 54,215 | |
Amortization of broadcast rights | | | 16,905 | | | | 10,803 | | | | — | | | | 27,708 | |
Depreciation and amortization | | | 23,933 | | | | 26,742 | | | | — | | | | 50,675 | |
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|
|
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|
|
| |
|
|
| |
|
|
|
Total operating expense | | | 98,897 | | | | 77,011 | | | | — | | | | 175,908 | |
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|
|
| |
|
|
| |
|
|
| |
|
|
|
Income (loss) from operations | | | 18,570 | | | | (1,863 | ) | | | — | | | | 16,707 | |
Interest expense | | | (20,170 | ) | | | (27,199 | ) | | | — | | | | (47,369 | ) |
Interest income | | | 309 | | | | — | | | | — | | | | 309 | |
Other income (expense), net | | | (259 | ) | | | 126 | | | | — | | | | (133 | ) |
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|
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|
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Loss before income taxes | | | (1,550 | ) | | | (28,936 | ) | | | — | | | | (30,486 | ) |
Income tax benefit (expense) | | | (1,091 | ) | | | (373 | ) | | | — | (3) | | | (1,464 | ) |
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|
|
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| |
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Loss before cumulative effect of change in accounting principle | | $ | (2,641 | ) | | $ | (29,309 | ) | | $ | — | | | $ | (31,950 | ) |
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| |
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| |
|
|
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Basic and diluted loss per common unit: | | | | | | | | | | | | | | | | |
Loss before cumulative effect of change in accounting principle | | $ | (0.73 | ) | | | | | | | | | | | | |
Basic and diluted pro forma loss per common share(4): | | | | | | | | | | | | | | | | |
Loss before cumulative effect of change in accounting principle | | | | | | | | | | | | | | $ | (1.13 | ) |
Weighted-average number of common units outstanding used in calculating basic and diluted loss per common unit | | | 3,605 | | | | | | | | | | | | | |
Weighted-average number of pro forma common shares outstanding used in calculating basic and diluted pro forma loss per common share(4) | | | | | | | | | | | | | | | 28,283 | |
See notes to unaudited pro forma condensed consolidated statement of operations.
F-33
NEXSTAR BROADCASTING GROUP, L.L.C.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEARS ENDED DECEMBER 31, 2002, 2001 and 2000
(dollars in thousands)
| (1) | Represents the audited consolidated statement of operations of Nexstar Broadcasting Group, L.L.C., our predecessor entity, for the years ended December 31, 2002, 2001 and 2000. |
| (2) | Represents the audited consolidated statement of operations of Quorum Broadcast Holdings, LLC, for the years ended December 31, 2002, 2001 and 2000. |
| (3) | The pro forma income tax benefit resulting from the pro forma adjustments is based on Nexstar Broadcasting Group, L.L.C.’s historical tax provision using historical amounts. For pro forma purposes, Nexstar has determined that it is more likely than not that any deferred tax assets arising from the pro forma adjustments will not be realized and, as a result, a full valuation allowance has been established. |
| (4) | Pro forma loss per common share has been calculated by dividing pro forma loss before cumulative effect of change in accounting principle by the weighted average number of common shares outstanding. |
F-34
