UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
DC 20549
 
  FORM
10-Q
 
  x
              QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
  For
the quarterly period ended March 31, 2010
  OR
   ̈TRANSITION REPORT
      PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
  For
the transition period from
             to
            .
  Commission
File Number: 333-62916-02
 
  MISSION
BROADCASTING, INC.
 (Exact
Name of Registrant as Specified in its Charter)
 
 
 Delaware
              51-0388022(State
      of Organization or Incorporation)
              (I.R.S.
      Employer Identification No.)7650
      Chippewa Road, Suite 305, Brecksville, Ohio
              44141(Address
      of Principal Executive Offices)
              (Zip
      Code)(440)
      526-2227(Registrant’s
      Telephone Number, Including Area
Code)
 
  Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that it was required
to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.    Yes  x    No   ̈
  Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such
files).    Yes   ̈    No   ̈
  Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (check one):
 
 Large accelerated filer
               ̈
              Accelerated filer
               ̈Non-accelerated
      filer
              x
              Smaller reporting company
               ̈(Do
      not check if a smaller reporting company)
  Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).    Yes   ̈    No  x
  As of
March 31, 2010, Mission Broadcasting, Inc. had one shareholder, David S.
Smith. Mr. Smith held all 1,000 shares of the outstanding common stock of
Mission Broadcasting, Inc. at March 31, 2010. As of April 30, 2010,
Mission Broadcasting, Inc. had 1,000 shares of outstanding common
stock.
 
 
  
 
  TABLE
OF CONTENTS
 
 PagePART I
              FINANCIAL
      INFORMATIONITEM 1.
              Financial
      Statements (Unaudited)Condensed
      Balance Sheets at March 31, 2010 and December 31, 2009
              1Condensed
      Statements of Operations for the three months ended March 31, 2010 and
      2009
              2Condensed
      Statement of Changes in Shareholder’s Deficit for the three months ended
      March 31, 2010
              3Condensed
      Statements of Cash Flows for the three months ended March 31, 2010 and
      2009
              4Notes
      to Condensed Financial Statements
              5ITEM 2.
              Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
              14ITEM 3.
              Quantitative
      and Qualitative Disclosures about Market Risk
              20ITEM 4.
              Controls
      and Procedures
              20PART II
              OTHER
      INFORMATIONITEM 1.
              Legal
      Proceedings
              21ITEM 1A.
              Risk
      Factors
              21ITEM 2.
              Unregistered
      Sales of Equity Securities and Use of Proceeds
              21ITEM 3.
              Defaults
      Upon Senior Securities
              21ITEM 4.
              Reserved
              21ITEM 5.
              Other
      Information
              21ITEM 6.
              Exhibits
              22EXHIBIT
      INDEX
 
  i
  PART
I. FINANCIAL INFORMATION
  ITEM 1.
              Financial
      Statements
  MISSION
BROADCASTING, INC.
  CONDENSED
BALANCE SHEETS
 (in
thousands, except share information)
 
 March 31,
                2010
              
              
              December 31,
                2009(Unaudited)ASSETSCurrent
      assets:Cash
      and cash equivalents
              
              $
              1,057
              
              
              $
              903Accounts
      receivable
              
              
              1,522
              
              
              
              1,430Current
      portion of broadcast rights
              
              
              2,399
              
              
              
              3,014Prepaid
      expenses and other current assets
              
              
              176
              
              
              
              216Deferred
      tax asset
              
              
              8
              
              
              
              8Total
      current assets
              
              
              5,162
              
              
              
              5,571Property
      and equipment, net
              
              
              27,883
              
              
              
              28,610Broadcast
      rights
              
              
              1,368
              
              
              
              1,785Goodwill
              
              
              18,729
              
              
              
              18,729FCC
      licenses
              
              
              20,698
              
              
              
              20,698Other
      intangible assets, net
              
              
              24,230
              
              
              
              25,517Other
      noncurrent assets
              
              
              1,619
              
              
              
              1,785Deferred
      tax asset
              
              
              334
              
              
              
              336Total
      assets
              
              $
              100,023
              
              
              $
              103,031LIABILITIES
      AND SHAREHOLDER’S DEFICITCurrent
      liabilities:Current
      portion of debt
              
              $
              1,727
              
              
              $
              1,727Current
      portion of broadcast rights payable
              
              
              2,775
              
              
              
              3,362Taxes
      payable
              
              
              82
              
              
              
              56Accounts
      payable
              
              
              5
              
              
              
              111Accrued
      expenses
              
              
              630
              
              
              
              629Interest
      payable
              
              
              24
              
              
              
              24Deferred
      revenue
              
              
              884
              
              
              
              992Due
      to Nexstar Broadcasting, Inc
              
              
              12,492
              
              
              
              13,370Total
      current liabilities
              
              
              18,619
              
              
              
              20,271Debt
              
              
              170,202
              
              
              
              170,633Broadcast
      rights payable
              
              
              2,134
              
              
              
              2,714Deferred
      tax liabilities
              
              
              7,464
              
              
              
              7,180Deferred
      revenue
              
              
              650
              
              
              
              709Deferred
      gain on sale of assets
              
              
              1,693
              
              
              
              1,737Other
      liabilities
              
              
              4,463
              
              
              
              4,441Total
      liabilities
              
              
              205,225
              
              
              
              207,685Commitments
      and contingenciesShareholder’s
      deficit:Common
      stock, $1 par value; 1,000 shares authorized; 1,000 shares issued and
      outstanding at both March 31, 2010 and December 31,
      2009
              
              
              1
              
              
              
              1Subscription
      receivable
              
              
              (1
              )
              
              
              (1
              )Accumulated
      deficit
              
              
              (105,202
              )
              
              
              (104,654
              )Total
      shareholder’s deficit
              
              
              (105,202
              )
              
              
              (104,654
              )Total
      liabilities and shareholder’s deficit
              
              $
              100,023
              
              
              $
              103,031
  The
accompanying notes are an integral part of these condensed financial
statements.
 
  1
  MISSION
BROADCASTING, INC.
  CONDENSED
STATEMENTS OF OPERATIONS
 (in
thousands)
 
 Three Months Ended
                March 31,2010
              
              
              2009(Unaudited)Net
      broadcast revenue
              
              $
              2,229
              
              
              $
              2,109Revenue
      from Nexstar Broadcasting, Inc
              
              
              6,740
              
              
              
              6,088Net
      revenue
              
              
              8,969
              
              
              
              8,197Operating
      expenses (income):Direct
      operating expenses (exclusive of depreciation and amortization shown
      separately below)
              
              
              1,446
              
              
              
              1,626Selling,
      general, and administrative expenses (exclusive of depreciation and
      amortization shown separately below)
              
              
              602
              
              
              
              745Fees
      incurred pursuant to local service agreements with Nexstar Broadcasting,
      Inc
              
              
              1,800
              
              
              
              2,025Amortization
      of broadcast rights
              
              
              973
              
              
              
              1,162Amortization
      of intangible assets
              
              
              1,287
              
              
              
              1,287Depreciation
              
              
              731
              
              
              
              854(Gain)
      loss on asset exchange
              
              
              11
              
              
              
              (248
              )Loss
      on asset disposal, net
              
              
              21
              
              
              
              3Total
      operating expenses
              
              
              6,871
              
              
              
              7,454Income
      from operations
              
              
              2,098
              
              
              
              743Interest
      expense, including amortization of debt financing costs
              
              
              (2,335
              )
              
              
              (1,406
              )Interest
      income
              
              
              —
              
              
              
              1Loss
      before income taxes
              
              
              (237
              )
              
              
              (662
              )Income
      tax expense
              
              
              (311
              )
              
              
              (311
              )Net
      loss
              
              $
              (548
              )
              
              $
              (973
              )
  The
accompanying notes are an integral part of these condensed financial
statements.
 
  2
  MISSION
BROADCASTING, INC.
  CONDENSED
STATEMENT OF CHANGES IN SHAREHOLDER’S DEFICIT
 For
the Three Months Ended March 31, 2010
 (in
thousands, except share information)
 
 Common
      StockShares
              
              
              Par Value
              
              
              Subscription
                Receivable
              
              
              Accumulated
                Deficit
              
              
              Total
                Shareholder’s
                DeficitBalance
      at January 1, 2010 (Unaudited)
              
              
              1,000
              
              
              $
              1
              
              
              $
              (1
              )
              
              $
              (104,654
              )
              
              $
              (104,654
              )Net
      loss
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              (548
              )
              
              
              (548
              )Balance
      at March 31, 2010 (Unaudited)
              
              
              1,000
              
              
              $
              1
              
              
              $
              (1
              )
              
              $
              (105,202
              )
              
              $
              (105,202
              )
  The
accompanying notes are an integral part of these condensed financial
statements.
 
  3
  MISSION
BROADCASTING, INC.
 CONDENSED
STATEMENTS OF CASH FLOWS
 (in
thousands)
 
 Three Months Ended
                March 31,2010
              
              
              2009(Unaudited)Cash
      flows from operating activities:Net
      loss
              
              $
              (548
              )
              
              $
              (973
              )Adjustments
      to reconcile net loss to net cash provided by operating activities:Deferred
      income taxes
              
              
              286
              
              
              
              294Depreciation
      of property and equipment
              
              
              731
              
              
              
              854Amortization
      of intangible assets
              
              
              1,287
              
              
              
              1,287Amortization
      of debt financing costs
              
              
              166
              
              
              
              11Amortization
      of broadcast rights, excluding barter
              
              
              411
              
              
              
              503Payments
      for broadcast rights
              
              
              (546
              )
              
              
              (496
              )(Gain)
      loss on asset exchange
              
              
              11
              
              
              
              (248
              )Loss
      on asset disposal, net
              
              
              21
              
              
              
              3Deferred
      gain recognition
              
              
              (44
              )
              
              
              (43
              )Changes
      in operating assets and liabilities net of acquisition:Accounts
      receivable
              
              
              (92
              )
              
              
              (449
              )Prepaid
      expenses and other current assets
              
              
              40
              
              
              
              121Taxes
      payable
              
              
              26
              
              
              
              17Accounts
      payable and accrued expenses
              
              
              (100
              )
              
              
              (1,117
              )Interest
      payable
              
              
              —
              
              
              
              (2
              )Deferred
      revenue
              
              
              (167
              )
              
              
              (96
              )Other
      noncurrent liabilities
              
              
              22
              
              
              
              94Due
      to Nexstar Broadcasting, Inc
              
              
              (878
              )
              
              
              1,013Net
      cash provided by operating activities
              
              
              626
              
              
              
              773Cash
      flows from investing activities:Additions
      to property and equipment
              
              
              (41
              )
              
              
              (530
              )Net
      cash used for investing activities
              
              
              (41
              )
              
              
              (530
              )Cash
      flows used for financing activities:Repayment
      of long-term debt
              
              
              (431
              )
              
              
              (431
              )Net
      cash used for financing activities
              
              
              (431
              )
              
              
              (431
              )Net
      increase (decrease) in cash and cash equivalents
              
              
              154
              
              
              
              (188
              )Cash
      and cash equivalents at beginning of period
              
              
              903
              
              
              
              1,426Cash
      and cash equivalents at end of period
              
              $
              1,057
              
              
              $
              1,238Supplemental
      schedule of cash flow information:Cash
      paid during the period for:Interest
              
              $
              2,169
              
              
              $
              1,393Income
      taxes, net
              
              $
              —
              
              
              $
              —Non-cash
      investing activities:Acquisition
      of equipment:
              
              $
              3
              
              
              $
              337
  The
accompanying notes are an integral part of these condensed financial
statements.
 
  4
  MISSION
BROADCASTING, INC.
  NOTES
TO CONDENSED FINANCIAL STATEMENTS
  1.
              Organization
      and Business Operations
  As of
March 31, 2010, Mission Broadcasting, Inc. (“Mission” or the “Company”)
owned and operated 16 television stations, all of which are affiliated with the
NBC, ABC, CBS, Fox or MyNetworkTV television networks, in markets located in New
York, Pennsylvania, Illinois, Indiana, Missouri, Texas, Louisiana, Arkansas and
Montana. The Company operates in one reportable television broadcasting segment.
Through local service agreements, Nexstar Broadcasting, Inc. (“Nexstar”)
provides sales and operating services to all of the Mission television stations
(see Note 4). As more fully described in Note 10, Mission’s sole shareholder has
granted Nexstar purchase options to acquire the assets and assume the
liabilities of each Mission station, subject to Federal Communications
Commission (“FCC”) consent.
  The
Company is highly leveraged, which makes it vulnerable to changes in general
economic conditions. The Company’s ability to repay or refinance its debt will
depend on, among other things, financial, business, market, competitive and
other conditions, many of which are beyond its control, as well as Nexstar
maintaining its pledge to continue the local service agreements with the
Company’s stations. Management believes that with Nexstar’s pledge to continue
the local service agreements, as described in a letter of support dated March 9,
2010, our available cash, anticipated cash flow from operations and available
borrowings under our senior secured credit facility should be sufficient to fund
working capital, capital expenditure requirements, interest payments and
scheduled debt principal payments for at least the next twelve months from March
31, 2010, enabling Mission to continue to operate as a going
concern.
  Nexstar’s
senior secured credit facility agreement contains covenants which require it to
comply with certain financial ratios, including (a) maximum total and
senior leverage ratios, (b) a minimum interest coverage ratio, and
(c) a minimum fixed charge coverage ratio. The covenants, which are
calculated on a quarterly basis, include the combined results of Nexstar and us.
Our senior secured credit facility agreement does not contain financial covenant
ratio requirements; however it does include an event of default if Nexstar does
not comply with all covenants contained in its credit agreement. As of
March 31, 2010, Nexstar was in compliance with all covenants contained in
the credit agreements governing our senior secured credit facility and the
indentures governing its publicly-held notes.
  2.
              Summary
      of Significant Accounting Policies
  Interim
Financial Statements
  The
condensed financial statements as of March 31, 2010, and for the three
months ended March 31, 2010 and 2009 are unaudited. However, in the opinion
of management, such financial statements include all adjustments (consisting
solely of normal recurring adjustments) necessary for the fair statement of the
financial information included herein in accordance with accounting principles
generally accepted in the United States of America (“U.S. GAAP”) and pursuant to
the rules and regulations of the Securities and Exchange Commission. The
preparation of the condensed financial statements in conformity with U.S. GAAP
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of contingent assets and
liabilities at the date of the financial statements and reported amounts of
revenue and expenses during the period. Actual results could differ from those
estimates. Results of operations for interim periods are not necessarily
indicative of results for the full year. These financial statements should be
read in conjunction with the financial statements and related notes included in
the Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2009. The balance sheet at December 31, 2009 has been
derived from the audited financial statements at that date, but does not include
all of the information and footnotes required by U.S. GAAP for complete
financial statements.
  Recent
Accounting Pronouncements
  In
January 2010, the Financial Accounting Standards Board (the “FASB”) issued
authoritative guidance which requires additional disclosures about transfers
between Levels 1 and 2 of the fair value hierarchy and disclosures about
purchases, sales, issuances and settlements in the roll forward of activity in
Level 3 fair value measurements.  This guidance was effective for the
Company January 1, 2010, except for the Level 3 activity disclosures, which are
effective for fiscal years beginning after December 15, 2010.  The
adoption of this guidance, which is related to disclosure only, did not have a
material impact on the Company’s financial position or results of
operations.
  In June
2009, the FASB issued an amendment to the accounting and disclosure requirements
for the consolidation of VIEs.  This amendment requires an analysis to
determine whether a variable interest gives the entity a controlling financial
interest in a variable interest entity. The amendment requires an ongoing
reassessment and eliminates the quantitative approach previously required for
determining whether an entity is the primary beneficiary. This amendment is
effective for our fiscal year beginning January 1, 2010.  We adopted
the amendment January 1, 2010 and it did not have any impact on the Company’s
financial position or results of operations.
  5
 
 MISSION
BROADCASTING, INC.
  NOTES
TO CONDENSED FINANCIAL STATEMENTS—(Continued)
  3.
              Fair
      Value Measurements
  The
Company adopted authoritative guidance effective January 1, 2008 for
financial assets and financial liabilities measured on a recurring basis and
January 1, 2009 for non-financial assets and non-financial liabilities.
This guidance applies to all assets and liabilities that are being measured and
reported on a fair value basis. There was no impact upon adoption to the
Unaudited Condensed Consolidated Financial Statements as it relates to assets
and liabilities. This guidance requires disclosure that establishes a framework
for measuring fair value and expands disclosure about fair value measurements.
Fair value measurements must be classified and disclosed in one of the following
three categories:
  Level 1:
Unadjusted quoted prices in active markets that are accessible at the
measurement date for identical, unrestricted assets or liabilities;
  Level 2:
Quoted prices in markets that are not active, or inputs which are observable,
either directly or indirectly, for substantially the full term of the asset or
liability;
  Level 3:
Prices or valuation techniques that require inputs that are both significant to
the fair value measurement and unobservable (i.e., supported by little or no
market activity).
  The
Company invests in short term interest bearing obligations with original
maturities less than 90 days, primarily money market funds. Mission does not
enter into investments for trading or speculative purposes. As of March 31,
2010 and December 31, 2009, there were no investments in marketable
securities.
  4.
              Local
      Service Agreements with Nexstar
  Mission
has entered into local service agreements with Nexstar to provide sales and
operating services to all of Mission’s stations. Under the terms of a shared
services agreement (“SSA”), the Nexstar station in the market provides certain
services including news production, technical maintenance and security, in
exchange for monthly payments from Mission to Nexstar. For each station that
Mission has entered into an SSA, it has also entered into a joint sales
agreement (“JSA”). Under the terms of the JSA, Nexstar sells the advertising
time of the Mission station and retains a percentage of the net revenue it
generates in return for monthly payments to Mission of the remaining percentage
of net revenue. Under the terms of a time brokerage agreement (“TBA”), Nexstar
programs most of the station’s broadcast time, sells the station’s advertising
time and retains the advertising revenue it generates in exchange for monthly
payments to Mission. JSA and TBA fees generated from Nexstar under the
agreements are reported as “Revenue from Nexstar Broadcasting, Inc.”, and SSA
fees incurred by Mission under the agreements are reported as “Fees incurred
pursuant to local service agreements with Nexstar Broadcasting, Inc.” in
accompanying condensed statements of operations.
  The
arrangements under the local service agreements each Mission station has entered
into with Nexstar have had the effect of Nexstar receiving substantially all of
the available cash, after Mission’s payment of operating costs and debt service,
generated by the Company’s stations. Mission anticipates that Nexstar will
continue to receive substantially all of Mission’s available cash, after
payments for operating costs and debt service, generated by its
stations.
  In order
for both Nexstar and Mission to comply with FCC regulations, Mission maintains
complete responsibility for and control over programming, finances and personnel
for its stations.
 
  6
   MISSION
BROADCASTING, INC.
  NOTES
TO CONDENSED FINANCIAL STATEMENTS—(Continued)
  4.
              Local
      Service Agreements with
Nexstar—(Continued)
  The
following table summarizes the various local service agreements Mission-owned
stations had in effect with Nexstar as of March 31, 2010:
 
 Station
              Market
              Affiliation
              Type
      of
                Agreement
              Expiration
              Consideration
      received from or paid to NexstarMission-Owned:WFXP
              Erie,
      PA
              Fox
              TBA
              8/16/11
              Monthly
      payments received from Nexstar(1)KJTL
      and
              Wichita
      Falls, TX-Lawton, OK
              Fox
              SSA
              5/31/19
              $60
      thousand per month paid to NexstarKJBO-LP
              
              MyNetworkTV
              JSA
              5/31/19
              70%
      of the KJTL/KJBO-LP net revenue collected each month received from
      NexstarWYOU
              Wilkes
      Barre-Scranton, PA
              CBS
              SSA
              1/4/18
              $35
      thousand per month paid to NexstarJSA
              9/30/14
              70%
      of the WYOU net revenue collected each month received from
      NexstarKODE
              Joplin,
      MO-Pittsburg, KS
              ABC
              SSA
              3/31/12
              $75
      thousand per month paid to NexstarJSA
              9/30/14
              70%
      of the KODE net revenue collected each month received from
      NexstarKRBC
              Abilene-Sweetwater,
      TX
              NBC
              SSA
              6/12/13
              $25
      thousand per month paid to NexstarJSA
              6/30/14
              70%
      of the KRBC net revenue collected each month received from
      NexstarKSAN
              San
      Angelo, TX
              NBC
              SSA
              5/31/14
              $10
      thousand per month paid to NexstarJSA
              5/31/14
              70%
      of the KSAN net revenue collected each month received from
      NexstarWFXW
              Terre
      Haute, IN
              Fox
              SSA
              5/8/13
              $10
      thousand per month paid to NexstarJSA
              5/8/13
              70%
      of the WFXW net revenue collected each month received from
      NexstarKCIT
      and
              Amarillo,
      TX
              Fox
              SSA
              4/30/19
              $50
      thousand per month paid to NexstarKCPN-LP
              
              MyNetworkTV
              JSA
              4/30/19
              70%
      of the KCIT/KCPN-LP net revenue collected each month received from
      NexstarKHMT
              Billings,
      MT
              Fox
              TBA
              12/13/17
              Monthly
      payments received from Nexstar(1)KAMC
              Lubbock,
      TX
              ABC
              SSA
              2/15/19
              $75
      thousand per month paid to NexstarJSA
              2/15/19
              70%
      of the KAMC net revenue collected each month received from
      NexstarKOLR
              Springfield,
      MO
              CBS
              SSA
              2/15/19
              $150
      thousand per month paid to NexstarJSA
              2/15/19
              70%
      of the KOLR net revenue collected each month received from
      NexstarWUTR
              Utica,
      NY
              ABC
              SSA
              3/31/14
              $10
      thousand per month paid to NexstarJSA
              3/31/14
              70%
      of the WUTR net revenue collected each month received from
      NexstarWTVO
              Rockford,
      IL
              ABC
              SSA
              10/31/14
              $75
      thousand per month paid to NexstarMyNetworkTV
              JSA
              10/31/14
              70%
      of the WTVO net revenue collected each month received from
      NexstarKTVE
              Monroe,
      LA – El Dorado, AR
              NBC
              SSA
              1/16/18
              $20
      thousand per month paid to NexstarJSA
              1/16/18
              70%
      of the KTVE net revenue collected each month received from
      NexstarNexstar-owned:KFTA
              Ft.
      Smith-Fayetteville-Springdale-Rogers, AR
              Fox
              TBA
              (2)
              $5
      thousand per month paid to Nexstar
                $20
      thousand per month received from
Nexstar
 
 (1)
              Payments
      are variable based on the station’s monthly operating
      expenses.
 (2)
              TBA
      terminated May 1, 2010 (See Note
5).
  7
   MISSION
BROADCASTING, INC.
  NOTES
TO CONDENSED FINANCIAL STATEMENTS—(Continued)
  4.
              Local
      Service Agreements with
Nexstar—(Continued)
  Under
these agreements, Mission is responsible for certain operating expenses of its
stations and therefore may have unlimited exposure to any potential operating
losses. Mission will continue to operate its stations under the SSAs and JSAs or
TBAs until the termination of such agreements. The SSAs and JSAs generally have
a term of ten years. Nexstar indemnifies Mission from Nexstar’s activities
pursuant to the local service agreement to which Nexstar is a
party.
  5.
              Pending
      Transaction with Nexstar
  On
April 11, 2006, Nexstar and Mission filed an application with the FCC for
consent to assignment of the license of KFTA Channel 24 (Ft. Smith, Arkansas)
from Nexstar to Mission. Consideration for this transaction was set at $5.6
million. On August 28, 2006, Nexstar and Mission entered into a local
service agreement whereby (a) Mission pays Nexstar $5 thousand per month
for the right to broadcast Fox programming on KFTA during the Fox network
programming time periods and (b) Nexstar pays Mission $20 thousand per
month for the right to sell all advertising time on KFTA within the Fox network
programming time periods. Also in 2006, Mission entered into an affiliation
agreement with the Fox network which provides Fox programming to KFTA. The local
service agreement between Nexstar and Mission will terminate upon assignment of
KFTA’s FCC license from Nexstar to Mission. Upon completing the assignment of
KFTA’s license, Mission planned to enter into a JSA and SSA with Nexstar-owned
KNWA in Fort Smith-Fayetteville-Springdale-Rogers, Arkansas, whereby KNWA will
provide local news, sales and other non-programming services to KFTA. Nexstar’s
KNWA, licensed to Rogers, Arkansas, has renewed its affiliation agreement for
KNWA to continue as the NBC affiliate in Ft.
Smith-Fayetteville-Springdale-Rogers, Arkansas through 2014. In March 2008, the
FCC granted the application to assign the license for KFTA from Nexstar to
Mission. On March 9, 2010, Nexstar and Mission notified the FCC that the
transaction would not be consummated.  The TBA terminated on May 1,
2010.
  6.
              Intangible
      Assets and Goodwill
  Intangible
assets subject to amortization consisted of the following:
 
 March 31,
      2010
              
              
              December 31,
      2009Estimated
                useful
      life
                (years)
              
              
              Gross
              
              
              Accumulated
                Amortization
              
              
              Net
              
              
              Gross
              
              
              Accumulated
                Amortization
              
              
              Net(in thousands)
              
              
              
              
              
              
              
              
              (in thousands)Network
      affiliation agreements
              
              
              15
              
              
              $
              66,443
              
              
              $
              (45,415
              )
              
              $
              21,028
              
              
              $
              66,443
              
              
              $
              (44,348
              )
              
              $
              22,095Other
      definite-lived intangible assets
              
              
              1-15
              
              
              
              13,117
              
              
              
              (9,915
              )
              
              
              3,202
              
              
              
              13,117
              
              
              
              (9,695
              )
              
              
              3,422Total
      intangible assets subject to amortization
              
              
              
              
              
              $
              79,560
              
              
              $
              (55,330
              )
              
              $
              24,230
              
              
              $
              79,560
              
              
              $
              (54,043
              )
              
              $
              25,517
  Total
amortization expense from definite-lived intangibles was $1.3 million for each
of the three months ended March 31, 2010 and 2009. The Company’s estimate
of amortization expense for definite-lived intangible assets recorded on its
books as of March 31, 2010 is approximately $5.1 million for each year for
the years of 2010 through 2012; $4.3 million for 2013; and $1.4 million for
2014.
  The
aggregate carrying value of indefinite-lived intangibles, consisting of FCC
licenses and goodwill, was $39.4 million at both March 31, 2010 and
December 31, 2009. The Company expenses any costs to renew its FCC licenses
as incurred. Indefinite-lived intangible assets are not subject to amortization,
but are tested for impairment annually or whenever events or changes in
circumstances indicate that such assets might be impaired. As of March 31,
2010, the Company did not identify any events that would trigger an impairment
assessment.
  8
   MISSION
BROADCASTING, INC.
  NOTES
TO CONDENSED FINANCIAL STATEMENTS—(Continued)
  6.
              Intangible
      Assets and Goodwill—(Continued)
  The
changes in the carrying amount of goodwill for the three months and year ended
March 31, 2010 and December 31, 2009, respectively, are as follows:
 2010
              
              
              2009Goodwill
              
              $
              20,279
              
              
              $
              19,924Accumulated
      impairment losses
              
              
              (1,550
              )
              
              
              (1,289
              )Balance
      as of January 1
              
              $
              18,729
              
              
              $
              18,635
 
 Impairment
              
              
              —
              
              
              
              (261
              )Reclassification
      of asset
              
              
              —
              
              
              
              355
 
 Goodwill
              
              $
              20,279
              
              
              $
              20,279Accumulated
      impairment losses
              
              
              (1,550
              )
              
              
              (1,550
              )Balance
      as of March 31, 2010 and December 31, 2009, respectively
              
              $
              18,729
              
              
              $
              18,729
  The
changes in the carrying amount of FCC licenses for the three months and year
ended March 31, 2010 and December 31, 2009, respectively, are as
follows:
 
 2010
              
              
              2009FCC
      licenses
              
              $
              31,395
              
              
              $
              31,395Accumulated
      impairment losses
              
              
              (10,697
              )
              
              
              (8,700
              )Balance
      as of January 1
              
              $
              20,698
              
              
              $
              22,695
 
 Impairment
              
              
              —
              
              
              
              (1,997
              )
 
 FCC
      licenses
              
              $
              31,395
              
              
              $
              31,395Accumulated
      impairment losses
              
              
              (10,697
              )
              
              
              (10,697
              )Balance
      as of March 31, 2010 and December 31, 2009, respectively
              
              $
              20,698
              
              
              $
              20,698
  7.
              Debt
  Long-term
debt consisted of the following:
 
 March 31,
                2010
              
              
              December 31,
                2009(in
      thousands)Term
      loans
              
              $
              164,929
              
              
              $
              165,360Revolving
      credit facility
              
              
              7,000
              
              
              
              7,000171,929
              
              
              
              172,360Less:
      current portion
              
              
              (1,727
              )
              
              
              (1,727
              )$
              170,202
              
              
              $
              170,633
  Senior
Secured Credit Facility
  The
Mission senior secured credit facility (the “Mission Facility”) consists of a
Term Loan B and a $15.0 million revolving loan. As of March 31, 2010 and
December 31, 2009, Mission had $164.9 million and $165.4 million,
respectively, outstanding under its Term Loan B and $7.0 million of borrowings
were outstanding under its revolving loan.
  The Term
Loan B, which matures in October 2012, is payable in consecutive quarterly
installments amortized at 0.25% quarterly, with the remaining 93.25% due at
maturity. During the three months ended March 31, 2010, repayments of
Mission’s Term Loan B totaled $0.4 million, all of which were scheduled
maturities. The revolving loan is not subject to incremental reduction and
matures in April 2012.
  9
   MISSION
BROADCASTING, INC.
  NOTES
TO CONDENSED FINANCIAL STATEMENTS—(Continued)
  7.
              Debt—(Continued)
  The total
weighted-average interest rate of the Mission Facility was 5.0% at both
March 31, 2010 and December 31, 2009. Interest is payable periodically
based on the type of interest rate selected. Additionally, Mission is required
to pay quarterly commitment fees on the unused portion of its revolving loan
commitment of 0.75% per annum, based on the consolidated senior leverage ratio
of Nexstar and Mission for that particular quarter.
  See Note
11 for subsequent events related to our credit facility.
  Unused
Commitments and Borrowing Availability
  As of
March 31, 2010, there were $8.0 million of unused commitments under the
Mission Facility. The total amount of borrowings available under the revolving
loan commitment of the Mission Facility is based on covenant calculations
contained in Nexstar’s credit agreement. As of March 31, 2010, all $8.0
million of total unused commitments under the Mission Facility were available
for borrowing.
  Collateralization
and Guarantees of Debt
  Nexstar
Broadcasting Group, Inc. (Nexstar’s ultimate parent) and its subsidiaries
guarantee full payment of all obligations under the Mission Facility in the
event of its default. Similarly, Mission is a guarantor of Nexstar’s senior
secured credit facility, the 7% senior subordinated PIK notes and the 7% senior
subordinated notes issued by Nexstar. The senior secured credit facilities are
collateralized by a security interest in substantially all the combined assets,
excluding FCC licenses, of Nexstar and Mission. See Note 11 for subsequent
events related to our credit facility.
  Debt
Covenants
  The
Mission Facility does not contain financial covenant ratio requirements, but
does provide for default in the event Nexstar does not comply with all covenants
contained in its credit agreement.
  Fair
Value of Debt
  The
aggregate carrying amounts and estimated fair value of Mission’s debt were as
follows:
 
 March 31, 2010
              
              
              December 31,
      2009Carrying
                  Amount
              
              
              Fair
      Value
              
              
              Carrying
                  Amount
              
              
              Fair
                  Value(in
      thousands)Term
      loans(1)
              
              $
              164,929
              
              
              $
              162,402
              
              
              $
              165,360
              
              
              $
              154,850Revolving
      credit facilities(1)
              
              $
              7,000
              
              
              $
              6,912
              
              
              $
              7,000
              
              
              $
              6,624
 
 (1)
              The
      fair value of senior secured credit facilities is computed based on
      borrowing rates currently available to Mission for bank loans with similar
      terms and average maturities.  These fair value measurements are
      considered Level 3 (significant and
  unobservable).
  8.
              Income
      Taxes
  The
Company’s provision for income taxes is primarily comprised of deferred income
taxes created by an increase in the deferred tax liabilities position during the
year resulting from the amortization of goodwill and other indefinite-lived
intangible assets for income tax purposes which are not amortized for financial
reporting purposes. These deferred tax liabilities do not reverse on a scheduled
basis and are not used to support the realization of deferred tax assets. The
Company’s deferred tax assets primarily result from federal and state net
operating loss carryforwards (“NOLs”). The Company’s NOLs are available to
reduce future taxable income if utilized before their expiration. The Company
has provided a valuation allowance for certain deferred tax assets as it
believes they may not be realized through future taxable earnings.
  At
January 1, 2010, the Company had gross unrecognized tax benefits of
approximately $3.7 million, which did not materially change as of March 31,
2010. If recognized, this amount would result in a favorable effect on the
Company’s effective tax rate excluding impact on the Company’s valuation
allowance. As of March 31, 2010, the Company has not accrued interest on
the unrecognized tax benefits since an unfavorable outcome upon examination
would not result in a cash outlay but would reduce NOLs subject to a valuation
allowance. The Company does not expect the amount of unrecognized tax benefits
to significantly change in the next twelve months.
  10
   MISSION
BROADCASTING, INC.
  NOTES
TO CONDENSED FINANCIAL STATEMENTS—(Continued)
  8.
              Income
      Taxes—(Continued)
  The
Company files income tax returns in the U.S. federal jurisdiction and various
state jurisdictions. The Company is subject to U.S. federal tax examinations for
years after 2005. Additionally, any NOLs that were generated in prior years and
that are utilized in the future may be subject to examination by the Internal
Revenue Service. State jurisdictions that remain subject to examination are not
considered significant.
  9.
              FCC
      Regulatory Matters
  Television
broadcasting is subject to the jurisdiction of the FCC under the Communications
Act of 1934, as amended (the “Communications Act”). The Communications Act
prohibits the operation of television broadcasting stations except under a
license issued by the FCC and empowers the FCC, among other things, to issue,
revoke, and modify broadcasting licenses, determine the location of television
stations, regulate the equipment used by television stations, adopt regulations
to carry out the provisions of the Communications Act and impose penalties for
the violation of such regulations. The FCC’s ongoing rule making proceedings
could have a significant future impact on the television industry and on the
operation of the Company’s stations. In addition, the U.S. Congress may act to
amend the Communications Act in a manner that could impact the Company’s
stations and the television broadcast industry in general.
  Media
Ownership
  In 2006,
the FCC initiated a rulemaking proceeding which provides for a comprehensive
review of all of its media ownership rules, as required by the Communications
Act. The Commission considered rules relating to ownership of two or more TV
stations in a market, ownership of local TV and radio stations by daily
newspapers in the same market, cross-ownership of local TV and radio stations,
and changes to how the national TV ownership limits are calculated. In February
2008, the FCC adopted modest changes to its newspaper broadcast cross-ownership
rule while retaining the rest of its ownership rules then currently in
effect.  Multiple challenges to this proceeding were filed with the
U.S. Courts of Appeal.  The court proceedings remain
pending.
  The FCC
is required by statute to review its media ownership rules every four years and
to eliminate those rules it finds no longer serve the “public interest,
convenience and necessity.”  During 2009, the FCC held a series of
hearings designed to evaluate possible changes to its rules.  Sometime
during 2010, the FCC is expected to officially initiate the next
statutorily-mandated review of its media ownership rules and request public
comments thereon.
  10.
              Commitments
      and Contingencies
  Guarantees
of Nexstar Debt
  Mission
is a guarantor of and has pledged substantially all its assets, excluding FCC
licenses, to guarantee Nexstar’s senior secured credit facility. Nexstar’s
senior secured credit facility, which matures in 2012, consists of a Term Loan B
and a $82.5 million revolving loan.
  Mission
is also a guarantor of the 7% senior subordinated notes (“7% Notes”) and 7%
senior subordinated PIK notes, both due 2014 issued by Nexstar. Both notes are
general unsecured senior subordinated obligations subordinated to all of
Mission’s senior debt.
  Mission
guarantees full payment of all obligations incurred under Nexstar’s senior
secured credit facility agreement and the 7% Notes. In the event that Nexstar is
unable to repay amounts due under these debt obligations, Mission will be
obligated to repay such amounts. The maximum potential amount of future payments
that Mission would be required to make under these guarantees would be generally
limited to the amount of borrowings outstanding under Nexstar’s senior secured
credit facility, the 7% senior subordinated PIK notes and the 7% Notes. At
March 31, 2010, Nexstar had issued an aggregate principal amount of $47.9
million of the 7% Notes and $143.0 million of the 7% senior subordinated PIK
notes and had $215.3 million outstanding under its bank credit
facility.
  11
   MISSION
BROADCASTING, INC.
  NOTES
TO CONDENSED FINANCIAL STATEMENTS—(Continued)
  10.
              Commitments
      and Contingencies—(Continued)
  Purchase
Options Granted to Nexstar
  In
consideration of Nexstar Broadcasting Group’s guarantee of the Mission Facility,
Mission’s sole shareholder has granted Nexstar purchase options to acquire the
assets and assume the liabilities of each Mission station, subject to FCC
consent, for consideration equal to the greater of (1) seven times the
station’s cash flow, as defined in the option agreement, less the amount of its
indebtedness as defined in the option agreements, or (2) the amount of its
indebtedness. Cash flow is defined as income or loss from operations, plus
depreciation and amortization (including amortization of broadcast rights),
interest income, non-cash trade and barter expenses, nonrecurring expenses
(including time brokerage agreement fees), network compensation payments
received or receivable and corporate management fees, less payments for
broadcast rights, non-cash trade and barter revenue and network compensation
revenue. These option agreements (which expire on various dates between 2011 and
2018) are freely exercisable or assignable by Nexstar without consent or
approval by Mission’s sole shareholder. The Company expects these option
agreements to be renewed upon expiration.
  Indemnification
Obligations
  In
connection with certain agreements that the Company enters into in the normal
course of its business, including local service agreements, business
acquisitions and borrowing arrangements, the Company enters into contractual
arrangements under which the Company agrees to indemnify the third 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 business. In the opinion of management, any resulting liability with respect
to these claims would not have a material adverse effect on the Company’s
financial position or results of operations.
  11.
              Subsequent
      Events
  Issuance
of Senior Secured Second Lien Notes Due 2017
  On April
19, 2010, Mission and  Nexstar, as co-issuers, completed the issuance
and sale of $325.0 million aggregate principal amount of senior secured second
lien notes due 2017 (the “Notes”). The Notes will mature on April 15, 2017.
Interest on the Notes accrues at a rate of 8.875% per annum and is payable
semiannually in arrears on April 15 and October 15 of each year,
commencing on October 15, 2010.
  The Notes
were issued pursuant to an Indenture, dated as of April 19, 2010 (the
“Indenture”), by and among Mission and Nexstar as co-issuers, Nexstar
Broadcasting Group, Inc. (“Nexstar Broadcasting Group”), as guarantor, and The
Bank of New York Mellon, as trustee and collateral agent. Mission’s and
Nexstar’s obligations under the Notes are jointly and severally guaranteed by
Nexstar’s parent and all of Nexstar and Mission’s future domestic
subsidiaries.
  The Notes
were issued in a private offering that was exempt from the registration
requirements of the Securities Act of 1933, as amended (the “Securities Act”),
to qualified institutional buyers in accordance with Rule 144A and to persons
outside of the United States pursuant to Regulation S under the Securities Act.
The net proceeds to Mission and Nexstar from the sale of the Notes were
approximately $316.8 million. Mission and Nexstar used the net proceeds of the
offering, together with borrowings under Mission and Nexstar amended senior
secured credit facilities and cash on hand, to repurchase Nexstar’s outstanding
senior subordinated PIK notes due 2014, to refinance Mission and Nexstar’s
existing senior secured credit facilities, pay related fees and expenses and for
general corporate purposes.
  12
   MISSION
BROADCASTING, INC.
  NOTES
TO CONDENSED FINANCIAL STATEMENTS—(Continued)
  11.
              Subsequent
      Events—(Continued)
  The Notes
are secured by second-priority liens, subject to certain exceptions and
permitted liens, on all of the assets that secure Mission’s and Nexstar ’s
senior secured credit facilities on a first-priority lien basis. The Notes and
the guarantees are Mission’s, Nexstar ’s and the guarantors’ senior secured
obligations, rank equal in right of payment with all of Mission’s, Nexstar ’s
and the guarantors’ existing and future senior indebtedness and rank senior in
right of payment to all of Mission’s, Nexstar ’s and the guarantors’ future
subordinated indebtedness. The Notes and the guarantees are effectively junior
to Mission’s, Nexstar ’s and the guarantors’ obligations which are either
secured by assets that are not collateral or which are secured on a first
priority basis, including borrowings under Mission’s and Nexstar ’s senior
secured credit facilities, in each case, to the extent of the value of the
assets securing such obligations.
  Mission
and Nexstar have the option to redeem all or a portion of the Notes at any time
prior to April 15, 2014 at a price equal to 100% of the principal amount of
the Notes redeemed plus accrued and unpaid interest to the redemption date plus
a “make-whole” premium. At any time on or after April 15, 2014, Mission and
Nexstar may redeem the Notes, in whole or in part, at the redemption prices set
forth in the Indenture. At any time before April 15, 2013, Mission and
Nexstar may also redeem up to 35% of the aggregate principal amount of the Notes
at a redemption price of 108.875% of the principal amount, plus accrued and
unpaid interest, if any, to the date of redemption, with the proceeds of certain
equity offerings.
  Upon the
occurrence of a change of control (as defined in the Indenture), each holder of
the Notes may require Mission and Nexstar to repurchase all or a portion of the
Notes in cash at a price equal to 101% of the aggregate principal amount of the
Notes to be repurchased, plus accrued and unpaid interest, if any, thereon to
the date of repurchase.
  The
Indenture contains covenants that limit, among other things, Mission’s and
Nexstar’s ability to (1) incur additional debt and issue preferred stock,
(2) make certain restricted payments, (3) consummate specified asset
sales, (4) enter into transactions with affiliates, (5) create liens,
(6) pay dividends or make other distributions, (7) make certain
investments, (8) merge or consolidate with another person and (9) enter new
lines of business. These covenants are subject to a number of important
exceptions and qualifications.
  The
Indenture provides for customary events of default (subject in certain cases to
customary grace and cure periods), which include nonpayment, breach of covenants
in the Indenture, payment defaults or acceleration of other indebtedness, a
failure to pay certain judgments and certain events of bankruptcy and
insolvency. The Indenture also provides for events of default with respect to
the collateral, which include (i) default in the performance of the security
documents which adversely affects the enforceability, validity, perfection or
priority of the second priority liens on any collateral, individually or in the
aggregate, having a fair market value in excess of $10.0 million, (ii)
repudiation or disaffirmation by Mission, Nexstar Broadcasting or any guarantor
of material obligations under the security documents, and (iii) the
determination in a judicial proceeding that the security documents are
unenforceable or invalid against Mission, Nexstar Broadcasting or any guarantor
for any reason with respect to any collateral, individually or in the aggregate,
having a fair market value in excess of $10.0 million. Generally, if an event of
default occurs, the Trustee or holders of at least 25% in principal amount of
the then outstanding Notes may declare the principal of and accrued but unpaid
interest, including additional interest, on all the Notes to be due and
payable.
  Amendments
to Credit Agreements
  On April
19, 2010, the Second Amendment to Mission’s Third Amended and Restated Credit
Agreement, dated as of April 1, 2005 (as amended, the “Mission Credit
Agreement”), among Mission, the several financial institutions from time to time
parties thereto and Bank of America, N.A., as administrative agent and
syndication agent became effective. Under the terms of the Mission Credit
Agreement, the principal amount available under the revolving credit facility
was reduced to $10.0 million, and the term loan B was reduced to $39.0
million.
  The
Mission Credit Agreement was amended to, among other things, (i) extend the
revolving loan commitments to December 31, 2013 (subject to earlier springing
maturity dates), (ii) extend the maturity date of the Term Loan B to September
30, 2016 (subject to earlier springing maturity dates), (iii) permit Mission,
under certain circumstances, to incur indebtedness and make restricted payments,
in each case, in part, to repurchase or extinguish existing indebtedness. In
connection with these transactions, we anticipate to write off unamortized debt
finance costs related to the existing senior secured credit
facilities.
  13
   ITEM 2.
              Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
  The
following discussion and analysis should be read in conjunction with the
unaudited condensed balance sheet as of March 31, 2010, unaudited condensed
statements of operations for the three months ended March 31, 2010 and
2009, unaudited condensed statement of changes in shareholder’s deficit for the
three months ended March 31, 2010, unaudited condensed statements of cash
flows for the three months ended March 31, 2010 and 2009 and related notes
included elsewhere in this Quarterly Report on Form 10-Q and the financial
statements contained in our Annual Report on Form 10-K for the year ended
December 31, 2009.
  Executive
Summary
  Overview
of Operations
  As of
March 31, 2010, we owned and operated 16 television stations. We have local
service agreements with certain television stations of Nexstar Broadcasting,
Inc. (“Nexstar”), through which Nexstar provides various programming, sales or
other services to our television stations. In order for both Nexstar and us to
comply with Federal Communications Commission (“FCC”) regulations, we maintain
complete responsibility for and control over programming, finances and personnel
for our stations.
  The
following table summarizes the various local service agreements our stations had
in effect as of March 31, 2010 with Nexstar:
 
 Service Agreements
              StationsTBA
      Only(1)
              WFXP
      and KHMTSSA & JSA(2)
              KJTL,
      KJBO-LP, KOLR, KCIT, KCPN-LP, KAMC, KRBC, KSAN, WUTR, WFXW, WYOU, KODE,
      WTVO and KTVE
 
 (1)
              We
      have a time brokerage agreement (“TBA”) for each of these stations which
      allows Nexstar to program most of each station’s broadcast time, sell each
      station’s advertising time and retain the advertising revenue generated in
      exchange for monthly payments to
us.
 (2)
              We
      have both a shared services agreement (“SSA”) and a joint sales agreement
      (“JSA”) for each of these stations. The SSA allows the Nexstar station in
      the market to provide certain services including news production,
      technical maintenance and security, in exchange for Nexstar’s right to
      receive certain payments from us as described in the SSAs. The JSA permits
      Nexstar to sell and retain a percentage of the net revenue from the
      station’s advertising time in return for monthly payments to us of the
      remaining percentage of the net revenue, as described in the
      JSAs.
  The
arrangements under the local service agreements each Mission station has entered
into with Nexstar has had the effect of Nexstar receiving substantially all of
the available cash, after our payments of operating costs and debt service,
generated by our stations. We anticipate that Nexstar will continue to receive
substantially all of our available cash, after our payments for operating costs
and debt service, generated by our stations listed above. For more information
about our local service agreements with Nexstar, refer to Note 4 of our
condensed financial statements in Part I, Item 1 of this Quarterly Report
on Form 10-Q.
  Nexstar
Broadcasting Group, Inc. and its subsidiaries (“Nexstar Broadcasting Group”)
guarantee all obligations incurred under our senior secured credit facility. We
are a guarantor of the senior secured credit facility entered into by Nexstar,
the 7% senior subordinated PIK notes and the 7% senior subordinated notes issued
by Nexstar. In consideration of Nexstar’s guarantee of our senior secured credit
facility, our sole shareholder has granted Nexstar purchase options to acquire
the assets and assume the liabilities of each of our television stations,
subject to FCC consent. These option agreements (which expire on various dates
between 2011 and 2018) are freely exercisable or assignable by Nexstar without
consent or approval by our sole shareholder. We expect these option agreements
to be renewed upon expiration.
  14
   Historical
Performance
  Revenue
  The
following table sets forth the principal types of revenue earned by our stations
for the periods indicated and each type of revenue (other than barter revenue
and revenue from Nexstar Broadcasting, Inc.) as a percentage of total gross
revenue:
  
 Three Months
      Ended March 31,2010
              
              
              2009Amount
              
              
              %
              
              
              Amount
              
              
              %(in
      thousands, except percentages)Retransmission
      compensation
              
              $
              1,405
              
              
              
              84.3
              
              
              $
              1,175
              
              
              
              81.0Network
      compensation
              
              
              234
              
              
              
              14.0
              
              
              
              256
              
              
              
              17.7Other
              
              
              28
              
              
              
              1.7
              
              
              
              19
              
              
              
              1.3Net
      broadcast revenue before barter revenue
              
              
              1,667
              
              
              
              100.0
              
              
              
              1,450
              
              
              
              100.0Barter
      revenue
              
              
              562
              
              
              
              
              
              
              
              659Revenue
      from Nexstar Broadcasting, Inc.
              
              
              6,740
              
              
              
              
              
              
              
              6,088Net
      revenue
              
              $
              8,969
              
              
              
              
              
              
              $
              8,197
  Results
of Operations
  The
following table sets forth a summary of our operations for the periods indicated
and their percentages of net revenue:
 
 Three Months
      Ended March 31,2010
              
              
              2009Amount
              
              
              %
              
              
              Amount
              
              
              %(in
      thousands, except percentages)Net
      revenue
              
              $
              8,969
              
              
              
              100.0
              
              
              $
              8,197
              
              
              
              100.0Operating
      expenses (income):Corporate
      expenses
              
              
              261
              
              
              
              2.9
              
              
              
              329
              
              
              
              4.0Station
      direct operating expenses
              
              
              1,446
              
              
              
              16.1
              
              
              
              1,626
              
              
              
              19.8Selling,
      general and administrative expenses
              
              
              341
              
              
              
              3.8
              
              
              
              416
              
              
              
              5.1Fees
      incurred pursuant to local service agreements with Nexstar Broadcasting,
      Inc.
              
              
              1,800
              
              
              
              20.1
              
              
              
              2,025
              
              
              
              24.7(Gain)
      loss on asset exchange
              
              
              11
              
              
              
              0.1
              
              
              
              (248
              )
              
              
              (3.0
              )Loss
      on asset disposal, net
              
              
              21
              
              
              
              0.2
              
              
              
              3
              
              
              
              —Barter
      expense
              
              
              562
              
              
              
              6.3
              
              
              
              659
              
              
              
              8.0Depreciation
      and amortization
              
              
              2,018
              
              
              
              22.5
              
              
              
              2,141
              
              
              
              26.1Amortization
      of broadcast rights, excluding barter
              
              
              411
              
              
              
              4.6
              
              
              
              503
              
              
              
              6.1Income
      from operations
              
              $
              2,098
              
              
              
              
              
              
              $
              743
  Three
Months Ended March 31, 2010 Compared to Three Months Ended March 31,
2009
  Revenue
  Net
revenue for the three months ended March 31, 2010, increased by $0.8
million, or 9.4% from the same period of 2009. This increase was primarily
attributed to an increase in revenue from Nexstar as well as an increase in
retransmission compensation as discussed below.
  Revenue
from Nexstar was $6.7 million for the three months ended March 31, 2010,
compared to $6.1 million for the same period in 2009, an increase of $0.6
million, or 10.7%. The increase was attributed to an increase in revenue that
Nexstar generated from selling all of the advertising of our stations, which in
turn increased the revenue we earned from Nexstar through JSAs.
  15
   Compensation from retransmission
consent and network affiliation agreements was $1.6 million for the three months
ended March 31, 2010, compared to $1.4 million for the same period in 2009,
an increase of $0.2 million, or 14.5%. The increase was primarily due to an
increase in billing rates on certain contracts and the addition of a new
contract in the second half of 2009.
  Operating
Expenses
  Corporate
expenses, related to costs associated with the centralized management of our
stations were $0.3 million for each of the three months ended March 31,
2010 and 2009.
  Station direct operating expenses,
consisting primarily of news, engineering and programming, and selling, general
and administrative expenses were $1.8 million for the three months ended
March 31, 2010, compared to $2.0 million for the same period in 2009, a
decrease of $0.2 million or 12.5%. The decrease was primarily due to a decrease
in utilities due to the DTV conversions completed in 2009.
  Local service agreement fees associated
with Nexstar relate to services provided by Nexstar in the production of
newscasts, technical maintenance, promotional and administrative support under
the SSAs. SSA fees were $1.8 million for the three months ended March 31, 2010,
compared to $2.0 million for the same period in 2009, a decrease of $0.2 million
or 11.1%.  The decrease was due to the elimination of the newscast in
Wilkes-Barre, effective April 1, 2009.
  Amortization of broadcast rights,
excluding barter, was $0.4 million for the three months ended March 31, 2010,
compared to $0.5 million for the same period in 2009, a decrease of $0.1 million
or 18.3%.  The decrease was due to write-downs of broadcast rights of
approximately $0.1 million in the three months ended March 31,
2009.
  Amortization
of intangible assets was $1.3 million for each of the three months ended
March 31, 2010 and 2009.
  Depreciation
of property and equipment was $0.7 million for the three months ended
March 31, 2010 compared to $0.9 million for the same period in 2009, a
decrease of $0.2 million or 14.4%.  The decrease was primarily due to
assets at WTVO becoming fully depreciated in 2009.
  Income
from Operations
  Income
from operations was $2.1 million for the three months ended March 31, 2010,
compared to $0.7 million for the same period of 2009, an increase of $1.4
million or 182.4%. The increase in income from operations for the three months
ended March 31, 2010 was primarily attributed to the overall increase in
net revenue, combined with the reduction in SSA fees to Nexstar, reduction in
station direct operating expense and selling, general and administrative expense
and the reduction in depreciation expense.
  Interest
Expense
  Interest
expense, including amortization of debt financing costs, was $2.3 million for
the three months ended March 31, 2010, compared to $1.4 million for the same
period in 2009, an increase of $0.9 million or 66.1%.  The increase
was primarily due to higher average interest rates in 2010.
  Income
Taxes
  Income
tax expense was $0.3 million for the three months ended March 31, 2010 and
2009.  The Company’s provision for income taxes is primarily comprised
of deferred income taxes resulting from the difference in the value of goodwill
and other indefinite-lived assets for income tax purposes compared to the value
for financial reporting purposes.
  Liquidity
and Capital Resources
  We are
highly leveraged, which makes us vulnerable to changes in general economic
conditions. Our ability to meet the future cash requirements described below
depends on our ability to generate cash in the future, which is subject to
general economic, financial, competitive, legislative, regulatory and other
conditions, many of which are beyond our control. Our ability to meet future
cash requirements is also dependent upon the local service agreements we have
entered into with Nexstar. Under our local service agreements, Nexstar sells our
advertising time and pays us a percentage of the amount collected. The payments
we receive from Nexstar are a significant component of our cash flows. On
March 9, 2010, Nexstar represented to us that it will continue the various
local service agreements under which it provides sales and other services to our
television stations thereby providing financial support to enable us to continue
to operate as a going concern. We believe that with Nexstar’s pledge to continue
the local service agreements, our available cash, anticipated cash flow from
operations and available borrowings under our senior secured credit facility
should be sufficient to fund working capital, capital expenditure requirements,
interest payments and scheduled debt principal payments for at least the next
twelve months from March 31, 2010. In order to meet future cash needs we may,
from time to time, borrow under our available credit facility. We will continue
to evaluate the best use of our operating cash flow among capital expenditures,
acquisitions and debt reduction.
  16
   Overview
  The
following tables present summarized financial information management believes is
helpful in evaluating the Company’s liquidity and capital
resources:
 
 Three Months Ended
                  March 31,2010
                
                
                2009(in
      thousands)Net
      cash provided by operating activities
                
                $
                626
                
                
                $
                773Net
      cash used for investing activities
                
                
                (41
                )
                
                
                (530
                )Net
      cash used for financing activities
                
                
                (431
                )
                
                
                (431
                )Net
      increase (decrease) in cash and cash equivalents
                
                $
                154
                
                
                $
                (188
                )Cash
      paid for interest
                
                $
                2,169
                
                
                $
                1,393
  March 31,
                  2010
                
                
                December 31,
                  2009(in
      thousands)Cash
      and cash equivalents
                
                $
                1,057
                
                
                $
                903Long-term
      debt including current portion
                
                $
                171,929
                
                
                $
                172,360Unused
      commitments under senior secured credit facility(1)
                
                $
                8,000
                
                
                $
                8,000
  (1)
                As
      of March 31, 2010, all $8.0 million of total unused commitments under
      Mission’s credit facility were available for
  borrowing.
  Cash
Flows – Operating Activities
  The
comparative net cash flows from operating activities decreased by $0.1 million
during the three months ended March 31, 2010 compared to the same period in
2009. The decrease was primarily due to changes in the timing of payments to
Nexstar, partially offset by the overall increase in net sales.
  Cash paid
for interest increased by $0.8 million during the three months ended
March 31, 2010 compared to the same period in 2009 due to higher average
interest rates during the three months ended March 31, 2010 compared to the
same period in 2009 under our senior secured credit facility.
  Due to
our recent history of net operating losses, we currently do not pay any federal
income taxes. These net operating losses may be carried forward, subject to
expiration and certain limitations, and used to reduce taxable earnings in
future years. Through the use of available loss carryforwards, it is possible
that we may not pay significant amounts of federal income taxes in the
foreseeable future.
  Cash
Flows – Investing Activities
  The
comparative net cash flows used for investing activities decreased by $0.5
million during the three months ended March 31, 2010 compared to the same
period in 2009. The decrease was primarily attributable to less capital
expenditures in 2010.
  Capital expenditures were $41 thousand
for the three months ended March 31, 2010, compared to $0.5 million for the
same period in 2009. The decrease was primarily attributable to the completion
of Nextel projects at two stations in the first quarter of
2009.
  Cash
Flows – Financing Activities
  The
comparative net cash flows used for financing activities, consisting of
scheduled term loan maturities under our senior secured credit facility, were
$0.4 million for each of the three months ended March 31, 2010 and
2009.
  Although
our senior secured credit facility allows for the payment of cash dividends, we
do not currently intend to declare or pay a cash dividend.
  17
   Future
Sources of Financing and Debt Service Requirements
  As of
March 31, 2010, we had debt of $171.9 million, which represented 257.7% of
our total capitalization. Our high level of debt requires that a substantial
portion of cash flow be dedicated to pay principal and interest on debt which
will reduce the funds available for working capital, capital expenditures,
acquisitions and other general corporate purposes.
  The total
amount of borrowings available to us under the revolving loan commitment of our
senior secured credit facility is based on covenant calculations contained in
Nexstar’s credit agreement. As of March 31, 2010, all $8.0 million of total
unused commitments under our credit facility were available for
borrowing.
  The
following table summarizes the approximate aggregate amount of principal
indebtedness scheduled to mature for the periods referenced as of March 31,
2010:
  
 Total
              
              
              Remainder
                of 2010
              
              
              
              2011-2012
              
              
              
              2013-2014
              
              
              Thereafter(in
      thousands)Senior
      secured credit facility
              
              $
              171,929
              
              
              $
              1,295
              
              
              $
              170,634
              
              
              $
              —
              
              
              $
              —
  On April
19, 2010, the Second Amendment to Mission’s Third Amended and Restated Credit
Agreement, dated as of April 1, 2005 (as amended, the “Mission Credit
Agreement”), among Mission, the several financial institutions from time to time
parties thereto and Bank of America, N.A., as administrative agent and
syndication agent became effective. Under the terms of the Mission Credit
Agreement, the principal amount available under the revolving credit facility
was reduced to $10.0 million, and the Term Loan B was reduced to $39.0
million.
  On April
19, 2010, Mission and  Nexstar, as co-issuers, completed the issuance
and sale of $325.0 million aggregate principal amount of senior secured second
lien notes due 2017 (the “Notes”). The Notes will mature on April 15, 2017.
Interest on the Notes accrues at a rate of 8.875% per annum and is payable
semiannually in arrears on April 15 and October 15 of each year,
commencing on October 15, 2010.
  The net
proceeds to Mission and Nexstar from the sale of the Notes were approximately
$316.8 million. Mission and Nexstar used the net proceeds of the offering,
together with borrowings under Mission’s and Nexstar’s amended senior secured
credit facilities and cash on hand, to repurchase $34.3 million of Nexstar’s
outstanding senior subordinated PIK notes due 2014, to refinance Mission and
Nexstar’s existing senior secured credit facilities, pay related fees and
expenses and for general corporate purposes.
  Interest
payments on our senior secured credit facility are generally paid every one to
three months and are payable based on the type of interest rate
selected.
  The terms
of our senior secured credit facility limit, but do not prohibit us from
incurring substantial amounts of additional debt in the future.
  We do not
have any rating downgrade triggers that would accelerate the maturity dates of
our debt. However, a downgrade in our credit rating could adversely affect our
ability to renew existing, or obtain access to new, credit facilities in the
future and could increase the cost of such facilities.
  Collateralization
and Guarantees of Debt
  Nexstar
Broadcasting Group and its subsidiaries guarantee full payment of all
obligations under our senior secured credit facility in the event of our
default. Similarly, we are a guarantor of Nexstar’s senior secured credit
facility and the senior subordinated notes issued by Nexstar. The senior secured
credit facilities are collateralized by a security interest in substantially all
the combined assets, excluding FCC licenses, of Nexstar and us. As of
March 31, 2010, Nexstar had a maximum commitment of $235.9 million under
its senior secured credit facility, of which $215.3 million of debt was
outstanding, and had issued an aggregate principal amount outstanding of $47.9
million of 7% senior subordinated notes and $143.0 million of 7% senior
subordinated PIK notes.
  Debt
Covenants
  Our
ability to continue as a going concern is dependent on Nexstar’s pledge to
continue the local services agreements described in a letter of support dated
March 9, 2010. Nexstar’s amended senior secured credit facility agreement
contains covenants which require them to comply with certain financial ratios,
including a consolidated maximum first lien indebtedness ratio, based on the
aggregate first-lien indebtedness maintained by Nexstar and Mission. As of
March 31, 2010, Nexstar was in compliance with all covenants contained in
the credit agreement governing its senior secured credit facility and the
indentures governing its publicly-held notes.
  18
   Cash
Requirements for Pending Transaction
  On
April 18, 2006, we and Nexstar announced that we had filed an application
with the FCC for consent to assignment of the license for KFTA Channel 24 (Ft.
Smith, Arkansas) from Nexstar to us. Consideration for this transaction was set
at $5.6 million. On March 9, 2010, Nexstar and Mission notified the FCC that the
transaction would not be consummated.
  No
Off-Balance Sheet Arrangements
  At
March 31, 2010, we did not have any relationships with unconsolidated
entities or financial partnerships, such as entities often referred to as
structured finance or variable interest entities, which would have been
established for the purpose of facilitating off-balance sheet arrangements or
other contractually narrow or limited purposes. We are, therefore, not
materially exposed to any financing, liquidity, market or credit risk that could
arise if we had engaged in such relationships.
  Critical
Accounting Policies and Estimates
  Our
condensed financial statements have been prepared in accordance with U.S. GAAP
which require us to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of contingent assets and
liabilities at the date of the condensed financial statements and reported
amounts of revenue and expenses during the period. On an ongoing basis, we
evaluate our estimates, including those related to goodwill and intangible
assets, bad debts, broadcast rights, trade and barter, income taxes, commitments
and contingencies. We base our estimates on historical experience and on various
other assumptions that we believe to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values
of assets and liabilities that are not readily apparent from other sources.
Actual results may differ from those estimates. Results of operations for
interim periods are not necessarily indicative of results for the full
year.
  Information
with respect to our critical accounting policies which we believe could have the
most significant effect on our reported results and require subjective or
complex judgments by management is contained on pages 26 through 29 in Part II,
Item 7, “Management’s Discussion and Analysis of Financial Condition and
Results of Operations”, of our Annual Report on Form 10-K for the fiscal year
ended December 31, 2009. Management believes that as of March 31, 2010
there has been no material change to this information.
  Recent
Accounting Pronouncements
  Refer to
Note 2 of our condensed financial statements in Part I, Item 1 of this
Quarterly Report on Form 10-Q for a discussion of our adoption of recently
issued accounting pronouncements, including our expected date of adoption and
effects on results of operations and financial position.
  Cautionary
Note Regarding Forward-Looking Statements
  This
Quarterly Report on Form 10-Q contains “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. All statements other than statements of
historical fact are “forward-looking statements” for purposes of federal and
state securities laws, including: any projections or expectations of earnings,
revenue, financial performance, liquidity and capital resources or other
financial items; any assumptions or projections about the television
broadcasting industry; any statements of our plans, strategies and objectives
for our future operations, performance, liquidity and capital resources or other
financial items; any statements concerning proposed new products, services or
developments; any statements regarding future economic conditions or
performance; any statements of belief; and any statements of assumptions
underlying any of the foregoing. Forward-looking statements may include the
words “may,” “will,” “should,” “could,” “would,” “predicts,” “potential,”
“continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,”
“estimates” and other similar words.
  Although
we believe that the expectations reflected in any of our forward-looking
statements are reasonable, actual results could differ from this projection or
assumption in any of our forward-looking statements. Our future financial
position and results of operations, as well as any forward-looking statements,
are subject to change and inherent risks and uncertainties, including those
described in our Annual Report on Form 10-K for the year ended December 31,
2009 and in our other filings with the Securities and Exchange Commission. The
forward-looking statements made in this Quarterly Report on Form 10-Q are made
only as of the date hereof, and we do not have or undertake any obligation to
update any forward-looking statements to reflect subsequent events or
circumstances unless otherwise required by law.
  19
   ITEM 3.
              Quantitative
      and Qualitative Disclosures About Market
Risk
  Interest
Rate Risk
  Our
exposure to market risk for changes in interest rates relates primarily to our
long-term debt obligations.
  All term
loan borrowings at March 31, 2010 under our senior secured credit facility
bear interest at 5.00%, which represented the base rate, or LIBOR, plus the
applicable margin, as defined. All revolving loan borrowings at March 31,
2010 under our senior secured credit facility bear interest at 5.00%, which
represented the base rate, or LIBOR, plus the applicable margin, as defined.
Interest is payable in accordance with the credit agreement.
  The
following table estimates the changes to cash flow from operations as of
March 31, 2010 if interest rates were to fluctuate by 100 or 50 basis
points, or BPS (where 100 basis points represents one percentage point), for a
twelve-month period:
 
 Interest rate decrease
              
              
              Interest rate increase100 BPS
              
              
              50 BPS
              
              
              50 BPS
              
              
              100 BPS(in
      thousands)
              
              
              (in
      thousands)Senior
      secured credit facility
              
              $
              1,719
              
              
              $
              860
              
              
              $
              (860
              )
              
              $
              (1,719
              )
  Impact
of Inflation
  We
believe that our results of operations are not affected by moderate changes in
the inflation rate.
  ITEM 4.
              Controls
      and Procedures
  Evaluation
of Disclosure Controls and Procedures
  Mission’s
management, with the participation of Mission’s President and Treasurer (who is
Mission’s principal executive officer and principal financial and accounting
officer), conducted an evaluation as of the end of the period covered by this
report of the effectiveness of the design and operation of Mission’s disclosure
controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934.
  Based
upon that evaluation, Mission’s President and Treasurer concluded that as of the
end of the period covered by this report Mission’s disclosure controls and
procedures were effective in ensuring that information required to be disclosed
by Mission in the reports it files or submits under the Securities Exchange Act
of 1934 (i) is recorded, processed, summarized and reported within the time
periods specified in the SEC’s rules and forms and (ii) is accumulated and
communicated to Mission’s management, including its President and Treasurer, as
appropriate to allow timely decisions regarding required
disclosure.
  20
   Changes
in Internal Control over Financial Reporting
  During
the quarterly period as of the end of the period covered by this report, there
have been no changes in Mission’s internal control over financial reporting that
have materially affected, or are reasonably likely to materially affect, its
internal control over financial reporting.
  PART
II. OTHER INFORMATION
  ITEM 1.                      Legal
Proceedings
  From time
to time, we are involved in litigation that arises from the ordinary operations
of business, such as contractual or employment disputes or other general
actions. In the event of an adverse outcome of these proceedings, we believe the
resulting liabilities would not have a material adverse effect on our financial
condition or results of operations.
  ITEM 1A.                      Risk
Factors
  There are
no material changes from the risk factors previously disclosed in Part I,
Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year
ended December 31, 2009.
  ITEM 2.                      Unregistered
Sales of Equity Securities and Use of Proceeds
  None.
  ITEM 3.                      Defaults
Upon Senior Securities
  None.
  ITEM 4.                      Reserved
   ITEM 5.                      Other
Information
  None.
  21
   ITEM 6.                      Exhibits
 
 Exhibit No.
              Exhibit
      Index1.1
              Purchase
      Agreement, by and among Nexstar Broadcasting, Inc, Nexstar Broadcasting
      Group, Inc., Mission Broadcasting, Inc. and Banc of America Securities
      LLC, UBS Securities LLC, Deutsche Bank Securities Inc., and RBC Capital
      Markets Corporation, each for itself and acting on behalf of the several
      initial purchasers, dated April 8, 2010. (Incorporated by reference
      to the exhibit of the same number to Current Report on Form 8-K (File No.
      333-62916-02) filed by Mission Broadcasting, Inc. on April 12,
      2010.)4.1
              Indenture,
      dated as of April 19, 2010, by and among Nexstar Broadcasting, Inc.
      and Mission Broadcasting Inc., as Issuers, Nexstar Broadcasting Group,
      Inc., as Guarantor, and The Bank of New York Mellon, as Trustee, and The
      Bank of New York Mellon, as Collateral Agent. (Incorporated by reference
      to the exhibit of the same number to Current Report on Form 8-K (File No.
      333-62916-02) filed by Mission Broadcasting, Inc. on April 23,
      2010.)4.2
              Form
      of Senior Secured Second Lien Note. (Incorporated by reference to the
      exhibit of the same number to Current Report on Form 8-K (File No.
      333-62916-02) filed by Mission Broadcasting, Inc. on April 23,
      2010.)10.1
              Registration
      Rights Agreement, dated April 19, 2010, by and among Nexstar
      Broadcasting, Inc., Mission Broadcasting, Inc., Nexstar Broadcasting
      Group, Inc., as guarantor, Banc of America Securities LLC, UBS Securities
      LLC, Deutsche Bank Securities Inc. and RBC Capital Markets Corporation.
      (Incorporated by reference to the exhibit of the same number to Current
      Report on Form 8-K (File No. 333-62916-02) filed by Mission Broadcasting,
      Inc. on April 23, 2010.)10.2
              Third
      Amendment to the Fourth Amended and Restated Credit Agreement, dated as of
      April 19, 2010, among Nexstar Broadcasting, Inc., Nexstar
      Broadcasting Group, Inc., the several financial institutions from time to
      time parties thereto, Bank of America, N.A., as administrative agent and
      syndication agent, and Banc of America Securities LLC, UBS Securities LLC,
      and Deutsche Bank Securities Inc., as joint lead arrangers, joint book
      managers and co-documentation agents. (Incorporated by reference to the
      exhibit of the same number to Current Report on Form 8-K (File No.
      333-62916-02) filed by Mission Broadcasting, Inc. on April 23,
      2010.)10.3
              Second
      Amendment to the Third Amended and Restated Credit Agreement, dated as of
      April 19, 2010, among Mission Broadcasting, Inc., the several financial
      institutions from time to time parties thereto, Bank of America, N.A., as
      administrative agent and syndication agent, and Banc of America Securities
      LLC, UBS Securities LLC, and Deutsche Bank Securities Inc., as joint lead
      arrangers, joint book managers and co-documentation agents. (Incorporated
      by reference to the exhibit of the same number to Current Report on Form
      8-K (File No. 333-62916-02) filed by Mission Broadcasting, Inc. on April
      23, 2010.)31.1
              Certification
      of David S. Smith pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002.*32.1
              Certification
      of David S. Smith pursuant to 18 U.S.C. ss.
  1350.*
 
 *
              Filed
      herewith
  22
  SIGNATURES
  Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
  
 MISSION
      BROADCASTING, INC./s/ DAVID
      S. SMITHBy:
                Its:
              David
      S. Smith
                President
      and Treasurer
                (Principal
      Executive Officer and
                Principal
      Financial and Accounting Officer)
  Dated:
May 14, 2010
 
  23