Condensed Consolidating Financial Information | 14. Condensed Consolidating Financial Information The following condensed consolidating financial information presents the financial position, results of operations and cash flows of the Company, including its wholly-owned subsidiaries and its consolidated VIEs. This information is presented in lieu of separate financial statements and other related disclosures pursuant to Regulation S-X Rule 3-10 of the Securities Exchange Act of 1934, as amended, “Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered.” The Nexstar column presents the parent company’s financial information, excluding consolidating entities. The Nexstar Broadcasting column presents the financial information of Nexstar Broadcasting, Inc. (“Nexstar Broadcasting”), a wholly-owned subsidiary of Nexstar and issuer of the 5.625% Notes, the 6.125% Notes and the 5.875% Notes. The Mission column presents the financial information of Mission, an entity which Nexstar Broadcasting is required to consolidate as a VIE (See Note 2). The Non-Guarantors column presents the combined financial information of Nexstar Digital, a wholly-owned subsidiary of Nexstar, and other VIEs consolidated by Nexstar Broadcasting (See Note 2). Nexstar Broadcasting’s outstanding 5.625% Notes and 6.125% Notes are fully and unconditionally guaranteed, jointly and severally, by Nexstar and Mission, subject to certain customary release provisions. These notes are not guaranteed by any other entities. Nexstar Broadcasting’s outstanding 5.875% Notes are fully and unconditionally guaranteed, jointly and severally, by Nexstar, subject to certain customary release provisions. These notes are not guaranteed by any other entities. The indentures governing the 5.625% Notes and the 6.125% Notes are not registered but require consolidating information that presents the guarantor information. As discussed in Note 2, the Company adopted ASU No. 2016-15 on a retrospective basis which reclassified the cash flow classification of certain payments for contingent consideration related to an acquisition in 2017 from financing activities to operating activities and payments received for the settlement of corporate-owned life insurance claims from operating activities to investing activities. The Company also adopted ASU No. 2016-18 on a retrospective basis which impacted the cash flow treatment of transfers between cash, cash equivalents and restricted cash in 2017. Further, the Company adopted ASU No. 2017-07 on a retrospective basis which requires the presentation of the net periodic benefit costs, other than the current service costs, in the income statement separately from the service cost component and outside the subtotal of income from operations. The effects of these adoptions were reflected in the accompanying Condensed Consolidating Statement of Operations and Condensed Consolidating Statement of Cash Flows during the three and six months ended June 30, 2017. CONDENSED CONSOLIDATING BALANCE SHEET As of June 30, 2018 (in thousands) Nexstar Non- Consolidated Nexstar Broadcasting Mission Guarantors Eliminations Company ASSETS Current assets: Cash and cash equivalents $ - $ 126,362 $ 6,557 $ 14,762 $ - $ 147,681 Accounts receivable - 435,598 12,943 75,537 - 524,078 Amounts due from consolidated entities - 74,146 84,872 - (159,018 ) - Other current assets - 39,570 1,219 4,996 (456 ) 45,329 Total current assets - 675,676 105,591 95,295 (159,474 ) 717,088 Investments in subsidiaries 857,802 108,884 - - (966,686 ) - Amounts due from consolidated entities 800,691 13,218 - - (813,909 ) - Property and equipment, net - 687,789 18,364 14,386 (75 ) 720,464 Goodwill - 1,968,147 33,187 183,648 - 2,184,982 FCC licenses - 1,615,830 43,102 108,706 - 1,767,638 Other intangible assets, net - 1,416,778 14,757 125,742 - 1,557,277 Other noncurrent assets - 166,214 3,569 15,480 (13,218 ) 172,045 Total assets $ 1,658,493 $ 6,652,536 $ 218,570 $ 543,257 $ (1,953,362 ) $ 7,119,494 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Current portion of debt $ - $ 36,243 $ 2,314 $ 3,165 $ - $ 41,722 Accounts payable - 51,359 1,783 12,986 - 66,128 Amounts due to consolidated entities - - - 159,018 (159,018 ) - Other current liabilities 213 155,618 4,776 26,569 (456 ) 186,720 Total current liabilities 213 243,220 8,873 201,738 (159,474 ) 294,570 Debt - 3,951,509 222,651 71,764 - 4,245,924 Amounts due to consolidated entities - 567,341 - 246,778 (814,119 ) - Deferred tax liabilities - 621,727 - 11,289 - 633,016 Other noncurrent liabilities - 302,898 6,773 7,077 (13,218 ) 303,530 Total liabilities 213 5,686,695 238,297 538,646 (986,811 ) 5,477,040 Total stockholders' equity (deficit) 1,658,280 965,841 (19,727 ) (4,404 ) (966,551 ) 1,633,439 Noncontrolling interests in consolidated variable interest entities - - - 9,015 - 9,015 Total liabilities and stockholders' equity (deficit) $ 1,658,493 $ 6,652,536 $ 218,570 $ 543,257 $ (1,953,362 ) $ 7,119,494 CONDENSED CONSOLIDATING BALANCE SHEET As of December 31, 2017 (in thousands) Nexstar Non- Consolidated Nexstar Broadcasting Mission Guarantors Eliminations Company ASSETS Current assets: Cash and cash equivalents $ - $ 90,860 $ 9,524 $ 15,268 $ - $ 115,652 Accounts receivable - 484,096 14,717 64,130 - 562,943 Amounts due from consolidated entities - 55,417 92,923 - (148,340 ) - Spectrum asset - 279,069 - 26,695 - 305,764 Other current assets - 64,256 2,070 5,533 - 71,859 Total current assets - 973,698 119,234 111,626 (148,340 ) 1,056,218 Investments in subsidiaries 617,297 109,354 - - (726,651 ) - Amounts due from consolidated entities 970,207 - - - (970,207 ) - Property and equipment, net - 697,898 18,454 17,861 (75 ) 734,138 Goodwill - 1,959,386 33,187 150,273 - 2,142,846 FCC licenses - 1,615,830 43,102 108,706 - 1,767,638 Other intangible assets, net - 1,476,297 15,841 89,488 - 1,581,626 Other noncurrent assets - 189,303 2,645 7,233 - 199,181 Total assets $ 1,587,504 $ 7,021,766 $ 232,463 $ 485,187 $ (1,845,273 ) $ 7,481,647 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Current portion of debt $ - $ 36,243 $ 2,314 $ 54,251 $ - $ 92,808 Accounts payable - 24,293 1,090 5,753 - 31,136 Liability to surrender spectrum asset - 286,740 - 27,347 - 314,087 Amounts due to consolidated entities - - - 148,340 (148,340 ) - Other current liabilities - 192,827 13,310 26,535 - 232,672 Total current liabilities - 540,103 16,714 262,226 (148,340 ) 670,703 Debt - 4,024,129 223,428 22,095 - 4,269,652 Amounts due to consolidated entities 714,408 - 256,010 (970,418 ) - Deferred tax liabilities - 613,227 - 6,214 - 619,441 Other noncurrent liabilities - 322,572 7,626 10,343 - 340,541 Total liabilities - 6,214,439 247,768 556,888 (1,118,758 ) 5,900,337 Total Nexstar Media Group, Inc. stockholders' equity (deficit) 1,587,504 807,327 (15,305 ) (82,397 ) (726,515 ) 1,570,614 Noncontrolling interests in consolidated variable interest entities - - - 10,696 - 10,696 Total liabilities and stockholders' equity (deficit) $ 1,587,504 $ 7,021,766 $ 232,463 $ 485,187 $ (1,845,273 ) $ 7,481,647 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS Three Months Ended June 30, 2018 (in thousands) Nexstar Non- Consolidated Nexstar Broadcasting Mission Guarantors Eliminations Company Net broadcast revenue (including trade) $ - $ 594,056 $ 17,606 $ 48,661 $ - $ 660,323 Revenue between consolidated entities 13,205 22,447 9,058 18,439 (63,149 ) - Net revenue 13,205 616,503 26,664 67,100 (63,149 ) 660,323 Operating expenses (income): Direct operating expenses, excluding depreciation and amortization - 218,740 10,013 46,996 (1,310 ) 274,439 Selling, general, and administrative expenses, excluding depreciation and amortization 15,181 133,087 1,112 10,945 (21,422 ) 138,903 Local service agreement fees between consolidated entities - 17,971 13,250 9,196 (40,417 ) - Amortization of broadcast rights - 14,797 409 707 - 15,913 Amortization of intangible assets - 29,674 540 6,967 - 37,181 Depreciation - 22,885 504 1,701 - 25,090 Reimbursement from the FCC related to station repack - (5,510 ) (187 ) - - (5,697 ) Total operating expenses 15,181 431,644 25,641 76,512 (63,149 ) 485,829 (Loss) income from operations (1,976 ) 184,859 1,023 (9,412 ) - 174,494 Interest expense, net - (52,539 ) (2,739 ) (1,003 ) - (56,281 ) Loss on extinguishment of debt - (481 ) - - - (481 ) Pension and other postretirement plans credit, net - 2,950 - - - 2,950 Other expenses - (812 ) - - - (812 ) Equity in income of subsidiaries 94,171 - - - (94,171 ) - Income (loss) before income taxes 92,195 133,977 (1,716 ) (10,415 ) (94,171 ) 119,870 Income tax (expense) benefit (423 ) (34,455 ) 425 1,189 - (33,264 ) Net income (loss) 91,772 99,522 (1,291 ) (9,226 ) (94,171 ) 86,606 Net loss attributable to noncontrolling interests - - - 1,126 - 1,126 Net income (loss) attributable to Nexstar $ 91,772 $ 99,522 $ (1,291 ) $ (8,100 ) $ (94,171 ) $ 87,732 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS Three Months Ended June 30, 2017 (in thousands) Nexstar Non- Consolidated Nexstar Broadcasting Mission Guarantors Eliminations Company Net broadcast revenue (including trade and barter) $ - $ 544,266 $ 17,555 $ 64,294 $ - $ 626,115 Revenue between consolidated entities - 18,656 9,400 6,438 (34,494 ) - Net revenue - 562,922 26,955 70,732 (34,494 ) 626,115 Operating expenses: Direct operating expenses, excluding depreciation and amortization - 200,039 8,892 44,705 (1,026 ) 252,610 Selling, general, and administrative expenses, excluding depreciation and amortization - 142,633 877 11,351 (7,420 ) 147,441 Local service agreement fees between consolidated entities - 15,577 4,500 5,971 (26,048 ) - Amortization of broadcast rights - 22,723 1,414 1,549 - 25,686 Amortization of intangible assets - 33,146 638 4,773 - 38,557 Depreciation - 24,120 587 1,585 - 26,292 Total operating expenses - 438,238 16,908 69,934 (34,494 ) 490,586 Income from operations - 124,684 10,047 798 - 135,529 Interest expense, net - (51,760 ) (2,556 ) (1,369 ) - (55,685 ) Loss on extinguishment of debt - (1,323 ) - - - (1,323 ) Pension and other postretirement plans credit, net - 3,156 - - - 3,156 Other (expenses) income - (1,331 ) - 431 - (900 ) Equity in income of subsidiaries 39,434 - - - (39,434 ) - Income (loss) before income taxes 39,434 73,426 7,491 (140 ) (39,434 ) 80,777 Income tax (expense) - (28,850 ) (2,917 ) (555 ) - (32,322 ) Net income (loss) 39,434 44,576 4,574 (695 ) (39,434 ) 48,455 Net income attributable to noncontrolling interests - - - (4,463 ) - (4,463 ) Net income (loss) attributable to Nexstar $ 39,434 $ 44,576 $ 4,574 $ (5,158 ) $ (39,434 ) $ 43,992 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS Six Months Ended June 30, 2018 (in thousands) Nexstar Non- Consolidated Nexstar Broadcasting Mission Guarantors Eliminations Company Net broadcast revenue (including trade and barter) $ - $ 1,143,737 $ 33,763 $ 98,159 $ - $ 1,275,659 Revenue between consolidated entities 13,205 42,703 17,486 35,144 (108,538 ) - Net revenue 13,205 1,186,440 51,249 133,303 (108,538 ) 1,275,659 Operating expenses (income): Direct operating expenses, excluding depreciation and amortization - 439,919 20,160 95,987 (2,664 ) 553,402 Selling, general, and administrative expenses, excluding depreciation and amortization 15,181 269,272 2,328 22,251 (28,224 ) 280,808 Local service agreement fees between consolidated entities - 34,947 26,500 16,203 (77,650 ) - Amortization of broadcast rights - 29,792 821 1,400 - 32,013 Amortization of intangible assets - 59,519 1,084 12,880 - 73,483 Depreciation - 46,346 1,021 3,537 - 50,904 Reimbursement from the FCC related to station repack - (6,874 ) (187 ) - - (7,061 ) Total operating expenses 15,181 872,921 51,727 152,258 (108,538 ) 983,549 (Loss) income from operations (1,976 ) 313,519 (478 ) (18,955 ) - 292,110 Interest expense, net - (103,573 ) (5,350 ) (1,947 ) - (110,870 ) Loss on extinguishment of debt - (1,486 ) - - - (1,486 ) Pension and other postretirement plans credit, net - 5,900 - - - 5,900 Other expenses - (941 ) - 2 - (939 ) Equity in income of subsidiaries 146,203 - - - (146,203 ) - Income (loss) before income taxes 144,227 213,419 (5,828 ) (20,900 ) (146,203 ) 184,715 Income tax (expense) benefit (423 ) (54,905 ) 1,406 3,154 - (50,768 ) Net income (loss) 143,804 158,514 (4,422 ) (17,746 ) (146,203 ) 133,947 Net loss attributable to noncontrolling interests - - - 1,907 - 1,907 Net income (loss) attributable to Nexstar $ 143,804 $ 158,514 $ (4,422 ) $ (15,839 ) $ (146,203 ) $ 135,854 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS Six Months Ended June 30, 2017 (in thousands) Nexstar Non- Consolidated Nexstar Broadcasting Mission Guarantors Eliminations Company Net broadcast revenue (including trade and barter) $ - $ 1,018,412 $ 35,463 $ 112,557 $ - $ 1,166,432 Revenue between consolidated entities - 32,726 18,222 4,615 (55,563 ) - Net revenue - 1,051,138 53,685 117,172 (55,563 ) 1,166,432 Operating expenses (income): Direct operating expenses, excluding depreciation and amortization - 378,796 17,912 75,696 (1,065 ) 471,339 Selling, general, and administrative expenses, excluding depreciation and amortization - 309,109 1,850 23,001 (9,586 ) 324,374 Local service agreement fees between consolidated entities - 25,783 9,000 10,129 (44,912 ) - Amortization of broadcast rights - 44,184 2,812 3,157 - 50,153 Amortization of intangible assets - 74,512 1,274 10,929 - 86,715 Depreciation - 44,190 1,175 3,153 - 48,518 Gain on disposal of stations, net - (57,716 ) - - - (57,716 ) Total operating expenses - 818,858 34,023 126,065 (55,563 ) 923,383 (Loss) income from operations - 232,280 19,662 (8,893 ) - 243,049 Interest expense, net - (127,340 ) (5,206 ) (2,376 ) - (134,922 ) Loss on extinguishment of debt - (30,768 ) (2,133 ) (226 ) - (33,127 ) Pension and other postretirement plans credit, net - 5,787 - - - 5,787 Other expenses - (1,007 ) - - - (1,007 ) Equity in income of subsidiaries 42,558 - - - (42,558 ) - Income (loss) before income taxes 42,558 78,952 12,323 (11,495 ) (42,558 ) 79,780 Income tax (expense) benefit - (24,989 ) (4,798 ) 3,406 - (26,381 ) Net income (loss) 42,558 53,963 7,525 (8,089 ) (42,558 ) 53,399 Net income attributable to noncontrolling interests - - - (3,358 ) - (3,358 ) Net income (loss) attributable to Nexstar $ 42,558 $ 53,963 $ 7,525 $ (11,447 ) $ (42,558 ) $ 50,041 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Six Months Ended June 30, 2018 (in thousands) Nexstar Non- Consolidated Nexstar Broadcasting Mission Guarantors Eliminations Company Cash flows from operating activities $ - $ 320,610 $ (1,298 ) $ 4,823 $ - $ 324,135 Cash flows from investing activities: Purchases of property and equipment - (32,198 ) (512 ) (3,680 ) - (36,390 ) Deposits and payments for acquisitions - (85,867 ) - - - (85,867 ) Other investing activities - 4,256 - 5 - 4,261 Net cash used in investing activities - (113,809 ) (512 ) (3,675 ) - (117,996 ) Cash flows from financing activities: Proceeds from long-term debt - 44,000 - 51,759 - 95,759 Repayments of long-term debt - (122,120 ) (1,157 ) (53,639 ) - (176,916 ) Common stock dividends paid (34,443 ) - - - - (34,443 ) Purchase of treasury stock (50,524 ) - - - - (50,524 ) Inter-company payments 87,624 (87,624 ) - - - - Other financing activities (2,657 ) (5,555 ) - 226 - (7,986 ) Net cash used in financing activities - (171,299 ) (1,157 ) (1,654 ) - (174,110 ) Net increase (decrease) in cash, cash equivalents and restricted cash - 35,502 (2,967 ) (506 ) - 32,029 Cash, cash equivalents and restricted cash at beginning of period - 90,860 9,524 15,268 - 115,652 Cash, cash equivalents and restricted cash at end of period $ - $ 126,362 $ 6,557 $ 14,762 $ - $ 147,681 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Six Months Ended June 30, 2017 (in thousands) Nexstar Non- Consolidated Nexstar Broadcasting Mission Guarantors Eliminations Company Cash flows from operating activities $ - $ 99,646 $ (756 ) $ 11,959 $ - $ 110,849 Cash flows from investing activities: Purchases of property and equipment - (23,525 ) (182 ) (3,984 ) - (27,691 ) Deposits and payments for acquisitions - (2,970,394 ) (800 ) - - (2,971,194 ) Proceeds from sale of a station - 481,944 - - - 481,944 Other investing activities - 14,828 - - - 14,828 Net cash used in investing activities - (2,497,147 ) (982 ) (3,984 ) - (2,502,113 ) Cash flows from financing activities: Proceeds from long-term debt - 2,797,106 230,840 53,915 - 3,081,861 Repayments of long-term debt - (1,111,606 ) (225,892 ) (53,300 ) - (1,390,798 ) Premium paid on debt extinguishment - (18,050 ) - - - (18,050 ) Purchase of noncontrolling interests - (66,901 ) - - - (66,901 ) Common stock dividends paid (28,268 ) - - - (28,268 ) Payments for debt financing costs - (47,578 ) (3,779 ) - - (51,357 ) Purchase of treasury stock (58,294 ) - - - - (58,294 ) Inter-company payments 87,291 (87,291 ) - - - - Other financing activities (729 ) (4,013 ) - (1,764 ) - (6,506 ) Net cash provided by (used in) financing activities - 1,461,667 1,169 (1,149 ) - 1,461,687 Net (decrease) increase in cash, cash equivalents and restricted cash - (935,834 ) (569 ) 6,826 - (929,577 ) Cash, cash equivalents and restricted cash at beginning of period - 1,003,629 6,478 5,372 - 1,015,479 Cash, cash equivalents and restricted cash at end of period $ - $ 67,795 $ 5,909 $ 12,198 $ - $ 85,902 |