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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, 2008

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) |  | (IRS Employer Identification No.)



|                                                             |  |                                                     
|------------------------------------------------------------ |  | ----------------------------------------------------
|7650 Chippewa Road, Suite 305 Brecksville, Ohio 44141        |  | (440) 526-2227                                      
|(Address of Principal Executive Offices, including Zip Code) |  | (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 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, 2008, 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, 2008. As
of April 30, 2008, Mission Broadcasting, Inc. had 1,000 shares of outstanding common stock.









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##### Table of Contents

TABLE OF CONTENTS



|              |  |                                                                                                   |  |     
|------------- |  | ------------------------------------------------------------------------------------------------- |  | ----
|              |  |                                                                                                   |  | Page
|PART I        |  | FINANCIAL INFORMATION                                                                             |  |     
|              |  |                                                                                                  
|ITEM 1.       |  | Financial Statements (Unaudited)                                                                  |  |     
|              |  |                                                                                                  
|              |  | Condensed Balance Sheets at March 31, 2008 and December 31, 2007                                  |  | 1   
|              |  |                                                                                                  
|              |  | Condensed Statements of Operations for the three months ended March 31, 2008 and 2007             |  | 2   
|              |  |                                                                                                  
|              |  | Condensed Statement of Changes in Shareholders Deficit for the three months ended March 31, 2008 |  | 3   
|              |  |                                                                                                  
|              |  | Condensed Statements of Cash Flows for the three months ended March 31, 2008 and 2007             |  | 4   
|              |  |                                                                                                  
|              |  | Notes to Condensed Financial Statements                                                           |  | 5   
|              |  |                                                                                                  
|ITEM 2.       |  | Managements Discussion and Analysis of Financial Condition and Results of Operations             |  | 13  
|              |  |                                                                                                  
|ITEM 3.       |  | Quantitative and Qualitative Disclosures about Market Risk                                        |  | 19  
|              |  |                                                                                                  
|ITEM 4.       |  | Controls and Procedures                                                                           |  | 20  
|              |  |                                                                                                  
|PART II       |  | OTHER INFORMATION                                                                                 |  |     
|              |  |                                                                                                  
|ITEM 1.       |  | Legal Proceedings                                                                                 |  | 21  
|              |  |                                                                                                  
|ITEM 1A.      |  | Risk Factors                                                                                      |  | 21  
|              |  |                                                                                                  
|ITEM 2.       |  | Unregistered Sales of Equity Securities and Use of Proceeds                                       |  | 21  
|              |  |                                                                                                  
|ITEM 3.       |  | Defaults Upon Senior Securities                                                                   |  | 21  
|              |  |                                                                                                  
|ITEM 4.       |  | Submission of Matters to a Vote of Security Holders                                               |  | 21  
|              |  |                                                                                                  
|ITEM 5.       |  | Other Information                                                                                 |  | 21  
|              |  |                                                                                                  
|ITEM 6.       |  | Exhibits                                                                                          |  | 21  
|              | 
|EXHIBIT INDEX |  |                                                                                                  



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##### Table of Contents

PART I. FINANCIAL INFORMATION



|ITEM 1. | Financial Statements
|------- | --------------------

MISSION BROADCASTING, INC.

CONDENSED BALANCE SHEETS

(in thousands, except share information)



|                                                                                                                                      |  |               |         |   |                  |   |         |  
|------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ------- | - | ---------------- | - | ------- | -
|                                                                                                                                      |  | March 31,2008 |         |   | December 31,2007 |  
|                                                                                                                                      |  | (Unaudited)   |        
|ASSETS                                                                                                                                |  |               |         |   |                  |   |         |  
|Current assets:                                                                                                                       |  |               |         |   |                  |   |         |  
|Cash and cash equivalents                                                                                                             |  | $             | 3,645   |   |                  | $ | 9,916   |  
|Accounts receivable (allowance for doubtful accounts of $9 and $0, respectively)                                                      |  |               | 883     |   |                  |   | 849     |  
|Current portion of broadcast rights                                                                                                   |  |               | 2,371   |   |                  |   | 2,872   |  
|Prepaid expenses and other current assets                                                                                             |  |               | 116     |   |                  |   | 198     |  
|Deferred tax asset                                                                                                                    |  |               | 8       |   |                  |   | 8       |  
|                                                                                                                                      |  |               |         |   |                  |   |         |  
|Total current assets                                                                                                                  |  |               | 7,023   |   |                  |   | 13,843  |  
|                                                                                                                                      |  |              
|Property and equipment, net                                                                                                           |  |               | 23,839  |   |                  |   | 20,061  |  
|Broadcast rights                                                                                                                      |  |               | 1,715   |   |                  |   | 1,877   |  
|Goodwill                                                                                                                              |  |               | 17,708  |   |                  |   | 17,122  |  
|FCC licenses                                                                                                                          |  |               | 31,396  |   |                  |   | 28,736  |  
|Other intangible assets, net                                                                                                          |  |               | 36,167  |   |                  |   | 36,368  |  
|Other noncurrent assets                                                                                                               |  |               | 198     |   |                  |   | 596     |  
|Deferred tax asset                                                                                                                    |  |               | 350     |   |                  |   | 352     |  
|                                                                                                                                      |  |               |         |   |                  |   |         |  
|Total assets                                                                                                                          |  | $             | 118,396 |   |                  | $ | 118,955 |  
|                                                                                                                                      |  |               |         |   |                  |   |         |  
|                                                                                                                                      |  |              
|LIABILITIES AND SHAREHOLDERS DEFICIT                                                                                                 |  |               |         |   |                  |   |         |  
|Current liabilities:                                                                                                                  |  |               |         |   |                  |   |         |  
|Current portion of debt                                                                                                               |  | $             | 1,727   |   |                  | $ | 1,727   |  
|Current portion of broadcast rights payable                                                                                           |  |               | 2,301   |   |                  |   | 2,998   |  
|Taxes payable                                                                                                                         |  |               | 90      |   |                  |   | 72      |  
|Accounts payable                                                                                                                      |  |               | 856     |   |                  |   | 427     |  
|Accrued expenses                                                                                                                      |  |               | 1,133   |   |                  |   | 1,115   |  
|Interest payable                                                                                                                      |  |               | 21      |   |                  |   | 32      |  
|Deferred revenue                                                                                                                      |  |               | 1,131   |   |                  |   | 982     |  
|Due to Nexstar Broadcasting, Inc.                                                                                                     |  |               | 19,785  |   |                  |   | 18,485  |  
|                                                                                                                                      |  |               |         |   |                  |   |         |  
|Total current liabilities                                                                                                             |  |               | 27,044  |   |                  |   | 25,838  |  
|                                                                                                                                      |  |              
|Debt                                                                                                                                  |  |               | 173,656 |   |                  |   | 174,087 |  
|Broadcast rights payable                                                                                                              |  |               | 2,340   |   |                  |   | 2,470   |  
|Deferred tax liabilities                                                                                                              |  |               | 7,447   |   |                  |   | 7,085   |  
|Deferred revenue                                                                                                                      |  |               | 358     |   |                  |   | 379     |  
|Deferred gain on sale of assets                                                                                                       |  |               | 2,041   |   |                  |   | 2,085   |  
|Other liabilities                                                                                                                     |  |               | 1,584   |   |                  |   | 1,498   |  
|                                                                                                                                      |  |               |         |   |                  |   |         |  
|Total liabilities                                                                                                                     |  |               | 214,470 |   |                  |   | 213,442 |  
|                                                                                                                                      |  |               |         |   |                  |   |         |  
|                                                                                                                                      |  |              
|Commitments and contingencies                                                                                                         |  |               |         |   |                  |   |         |  
|                                                                                                                                      |  |              
|Shareholders deficit:                                                                                                                |  |               |         |   |                  |   |         |  
|Common stock, $1 par value; 1,000 shares authorized; 1,000 shares issued and outstanding at both March 31, 2008 and December 31,
2007 |  |               | 1       |   |                  |   | 1       |  
|Subscription receivable                                                                                                               |  |               | (1      | ) |                  |   | (1      | )
|Accumulated deficit                                                                                                                   |  |               | (96,074 | ) |                  |   | (94,487 | )
|                                                                                                                                      |  |               |         |   |                  |   |         |  
|Total shareholders deficit                                                                                                           |  |               | (96,074 | ) |                  |   | (94,487 | )
|                                                                                                                                      |  |               |         |   |                  |   |         |  
|Total liabilities and shareholders deficit                                                                                           |  | $             | 118,396 |   |                  | $ | 118,955 |  
|                                                                                                                                      |  |               |         |   |                  |   |         |  

The accompanying notes are an integral part of these condensed financial statements.



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MISSION BROADCASTING, INC.

CONDENSED STATEMENTS OF OPERATIONS

(in thousands)



|                                                                                                                  |  |                             |        |   |      |   |        |  
|----------------------------------------------------------------------------------------------------------------- |  | --------------------------- | ------ | - | ---- | - | ------ | -
|                                                                                                                  |  | Three Months EndedMarch 31, |       
|                                                                                                                  |  | 2008                        |        |   | 2007 |  
|                                                                                                                  |  | (Unaudited)                 |       
|Net broadcast revenue                                                                                             |  | $                           | 1,535  |   |      | $ | 1,667  |  
|Revenue from Nexstar Broadcasting, Inc.                                                                           |  |                             | 7,785  |   |      |   | 7,172  |  
|                                                                                                                  |  |                             |        |   |      |   |        |  
|Net revenue                                                                                                       |  |                             | 9,320  |   |      |   | 8,839  |  
|                                                                                                                  |  |                             |        |   |      |   |        |  
|                                                                                                                  |  |                            
|Operating expenses (income):                                                                                      |  |                             |        |   |      |   |        |  
|Direct operating expenses (exclusive of depreciation and amortization shown separately below)                     |  |                             | 1,529  |   |      |   | 1,224  |  
|Selling, general, and administrative expenses (exclusive of depreciation and amortization shown separately below) |  |                             | 637    |   |      |   | 528    |  
|Fees incurred pursuant to local service agreements with Nexstar Broadcasting, Inc.                                |  |                             | 2,015  |   |      |   | 1,965  |  
|Amortization of broadcast rights                                                                                  |  |                             | 1,180  |   |      |   | 950    |  
|Amortization of intangible assets                                                                                 |  |                             | 1,348  |   |      |   | 1,349  |  
|Depreciation                                                                                                      |  |                             | 867    |   |      |   | 836    |  
|Loss (on asset disposal, net                                                                                      |  |                             |       |   |      |   | 1      |  
|                                                                                                                  |  |                             |        |   |      |   |        |  
|Total operating expenses                                                                                          |  |                             | 7,576  |   |      |   | 6,853  |  
|                                                                                                                  |  |                             |        |   |      |   |        |  
|                                                                                                                  |  |                            
|Income from operations                                                                                            |  |                             | 1,744  |   |      |   | 1,986  |  
|Interest expense, including amortization of debt financing costs                                                  |  |                             | (2,974 | ) |      |   | (3,126 | )
|Interest income                                                                                                   |  |                             | 25     |   |      |   | 20     |  
|                                                                                                                  |  |                             |        |   |      |   |        |  
|Loss before income taxes                                                                                          |  |                             | (1,205 | ) |      |   | (1,120 | )
|Income tax expense                                                                                                |  |                             | (382   | ) |      |   | (349   | )
|                                                                                                                  |  |                             |        |   |      |   |        |  
|Net loss                                                                                                          |  | $                           | (1,587 | ) |      | $ | (1,469 | )
|                                                                                                                  |  |                             |        |   |      |   |        |  

The accompanying notes are an integral part of these condensed financial statements.



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MISSION BROADCASTING, INC.

CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS DEFICIT

For the Three Months Ended March 31, 2008

(in thousands, except share information)



|                                       |  |              |  |                        |   |  |                    |    |   |                           |   |         |   |  |   |         |  
|-------------------------------------- |  | ------------ |  | ---------------------- | - |  | ------------------ | -- | - | ------------------------- | - | ------- | - |  | - | ------- | -
|                                       |  | Common Stock |  | SubscriptionReceivable |   |  | AccumulatedDeficit |    |   | TotalShareholdersDeficit |  
|                                       |  | Shares       |  | Par Value              |   |  |                   
|Balance at January 1, 2008 (Unaudited) |  | 1,000        |  | $                      | 1 |  | $                  | (1 | ) |                           | $ | (94,487 | ) |  | $ | (94,487 | )
|Net loss                               |  |             |  |                        |  |  |                    |   |   |                           |   | (1,587  | ) |  |   | (1,587  | )
|                                       |  |              |  |                        |   |  |                    |    |   |                           |   |         |   |  |   |         |  
|Balance at March 31, 2008 (Unaudited)  |  | 1,000        |  | $                      | 1 |  | $                  | (1 | ) |                           | $ | (96,074 | ) |  | $ | (96,074 | )
|                                       |  |              |  |                        |   |  |                    |    |   |                           |   |         |   |  |   |         |  

The accompanying notes are an integral part of these condensed financial statements.



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MISSION BROADCASTING, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(in thousands)



|                                                                                |  |                             |        |   |      |   |        |  
|------------------------------------------------------------------------------- |  | --------------------------- | ------ | - | ---- | - | ------ | -
|                                                                                |  | Three Months EndedMarch 31, |       
|                                                                                |  | 2008                        |        |   | 2007 |  
|                                                                                |  | (Unaudited)                 |       
|Cash flows from operating activities:                                           |  |                             |        |   |      |   |        |  
|Net loss                                                                        |  | $                           | (1,587 | ) |      | $ | (1,469 | )
|Adjustments to reconcile net loss to net cash provided by operating activities: |  |                             |        |   |      |   |        |  
|Deferred income taxes                                                           |  |                             | 364    |   |      |   | 333    |  
|Depreciation of property and equipment                                          |  |                             | 867    |   |      |   | 836    |  
|Amortization of intangible assets                                               |  |                             | 1,348  |   |      |   | 1,349  |  
|Amortization of debt financing costs                                            |  |                             | 11     |   |      |   | 11     |  
|Amortization of broadcast rights, excluding barter                              |  |                             | 562    |   |      |   | 374    |  
|Payments for broadcast rights                                                   |  |                             | (467   | ) |      |   | (423   | )
|Loss on asset disposal, net                                                     |  |                             |       |   |      |   | 1      |  
|Deferred gain recognition                                                       |  |                             | (44    | ) |      |   | (44    | )
|Changes in operating assets and liabilities net of acquisition:                 |  |                             |        |   |      |   |        |  
|Accounts receivable                                                             |  |                             | 1,047  |   |      |   | (8     | )
|Prepaid expenses and other current assets                                       |  |                             | 94     |   |      |   | 63     |  
|Other noncurrent assets                                                         |  |                             | (1     | ) |      |   | (5     | )
|Taxes payable                                                                   |  |                             | 18     |   |      |   | 16     |  
|Accounts payable and accrued expenses                                           |  |                             | 280    |   |      |   | (175   | )
|Interest payable                                                                |  |                             | (11    | ) |      |   | (35    | )
|Deferred revenue                                                                |  |                             | 128    |   |      |   | 66     |  
|Other noncurrent liabilities                                                    |  |                             | 86     |   |      |   | 65     |  
|Due to Nexstar Broadcasting, Inc.                                               |  |                             | 500    |   |      |   | (1,884 | )
|                                                                                |  |                             |        |   |      |   |        |  
|Net cash provided by operating activities                                       |  |                             | 3,195  |   |      |   | (929   | )
|                                                                                |  |                             |        |   |      |   |        |  
|                                                                                |  |                            
|Cash flows from investing activities:                                           |  |                             |        |   |      |   |        |  
|Additions to property and equipment                                             |  |                             | (1,112 | ) |      |   | (762   | )
|Proceeds from sale of assets                                                    |  |                             |       |   |      |   | 2      |  
|Acquisition of broadcast properties and related transaction costs               |  |                             | (7,923 | ) |      |   |       |  
|                                                                                |  |                             |        |   |      |   |        |  
|Net cash used for investing activities                                          |  |                             | (9,035 | ) |      |   | (760   | )
|                                                                                |  |                             |        |   |      |   |        |  
|                                                                                |  |                            
|Cash flows used for financing activities:                                       |  |                             |        |   |      |   |        |  
|Repayment of long-term debt                                                     |  |                             | (431   | ) |      |   | (432   | )
|                                                                                |  |                             |        |   |      |   |        |  
|                                                                                |  |                            
|Net decrease in cash and cash equivalents                                       |  |                             | (6,271 | ) |      |   | (2,121 | )
|Cash and cash equivalents at beginning of period                                |  |                             | 9,916  |   |      |   | 3,577  |  
|                                                                                |  |                             |        |   |      |   |        |  
|Cash and cash equivalents at end of period                                      |  | $                           | 3,645  |   |      | $ | 1,456  |  
|                                                                                |  |                             |        |   |      |   |        |  
|                                                                                |  |                            
|Supplemental schedule of cash flow information:                                 |  |                             |        |   |      |   |        |  
|Cash paid during the period for:                                                |  |                             |        |   |      |   |        |  
|Interest                                                                        |  | $                           | 2,973  |   |      | $ | 3,150  |  
|                                                                                |  |                             |        |   |      |   |        |  
|Income taxes, net                                                               |  | $                           |       |   |      | $ |       |  
|                                                                                |  |                             |        |   |      |   |        |  

The accompanying notes are an integral part of these condensed financial statements.



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MISSION BROADCASTING, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

1. Organization and Business Operations

As of
March 31, 2008, 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 3). As more fully described in Note 11, 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.

2. Summary of Significant Accounting Policies

Interim Financial Statements

The condensed financial statements as of March 31, 2008, and for the three months ended March 31, 2008 and 2007 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, 2007. The balance sheet at December 31, 2007 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.

In February
2007, the FASB issued Statement of Financial Accounting Standards No. 159, The Fair Value Option for Financial Assets and Financial Liabilities  Including an amendment of FASB No. 115 (SFAS No. 159),
which provides a fair value measurement option for eligible financial assets and liabilities. Under SFAS No. 159, an entity is permitted to elect to apply fair value accounting to a single eligible item, subject to certain exceptions, without
electing it for other identical items. Subsequent unrealized gains and losses on items for which the fair value option has been elected will be included in earnings. The fair value option established by this Statement is irrevocable, unless a new
election date occurs. This standard reduces the complexity in accounting for financial instruments and mitigates volatility in earnings caused by measuring related assets and liabilities differently. SFAS No. 159 is effective as of the
beginning of an entitys first fiscal year beginning after November 15, 2007 which for the Company is January 1, 2008. The Company has adopted the provisions of this Statement in the first quarter of 2008. Management has determined
that the adoption of SFAS No. 159 did not have a material effect on its financial position or results of operations.

In December
2007, the FASB issued Statement of Financial Accounting Standards No. 141R, Business Combinations (SFAS No. 141R), which establishes principles and requirements for how the acquirer of a business recognizes and
measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree. SFAS 141R also provides guidance for recognizing and measuring the goodwill acquired in the business
combination and determines what information to disclose to enable users of the financial statement sot evaluate the nature and financial effects of the business combination. SFAS 141R is effective for fiscal years beginning after December 15,
2008. Early adoption is not permitted. Management is currently evaluating the impact the adoption of SFAS No. 141R will have on the Companys financial statements, but does not presently anticipate it will have a material impact on its
financial position or results of operations.



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##### Table of Contents

MISSION BROADCASTING, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS(Continued)



3. Fair Value Measurements

The Company adopted SFAS No. 157 effective January 1, 2008 for financial assets and financial liabilities measured on a recurring basis. SFAS No. 157 applies to all financial assets and financial
liabilities that are being measured and reported on a fair value basis. There was no impact for adoption of SFAS No. 157 to the Unaudited Condensed Consolidated Financial Statements as it relates to financial assets and financial liabilities.
SFAS No. 157 requires disclosure that establishes a framework for measuring fair value and expands disclosure about fair value measurements. The statement requires fair value measurement 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. We do not enter into investments for trading or speculative purposes. As of March 31, 2008, there were no investments in
marketable securities.

As of March 31, 2008, the Company had $2.9 million invested in a money market investment. These investments
are required to be measured at fair value on a recurring basis. The Company has determined that the money market investment is defined as Level 1 in the fair value hierarchy. As of March 31, 2008, the fair value of the money market investment
was an asset of $2.9 million.

In February 2008, the FASB issued FASB Staff Position No. FAS 157-2, Effective Date of FASB Statement
No. 157, which defers the effective date for us to January 1, 2009 for all nonfinancial assets and liabilities, except those that are recognized or disclosed at fair value on a recurring basis (that is, at least annually). The
Company elected to delay the application of SFAS 157 to nonfinancial assets and nonfinancial liabilities, as allowed by FASB Staff Position SFAS 157-2.

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 has 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, personnel and operations of its stations.



6



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##### Table of Contents

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, 2008:



|               |  |                                              |  |             |  |                  |  |            |  |                                                                                   
|-------------- |  | -------------------------------------------- |  | ----------- |  | ---------------- |  | ---------- |  | ----------------------------------------------------------------------------------
|Station        |  | Market                                       |  | Affiliation |  | Type ofAgreement |  | Expiration |  | Consideration received from or paid to Nexstar                                    
|Mission-Owned: |  |                                              |  |             |  |                  |  |           
|               |  |                                              |  |             | 
|WFXP           |  | Erie, PA                                     |  | Fox         |  | TBA              |  | 8/16/11    |  | Monthly payments received from Nexstar(1)                                         
|               |  |                                              |  |             | 
|KJTL and       |  | Wichita Falls, TX-Lawton, OK                 |  | Fox         |  | SSA              |  | 5/31/09    |  | $60 thousand per month paid to Nexstar                                            
|KJBO-LP        |  |                                              |  | MyNetworkTV |  | JSA              |  | 5/31/09    |  | 70% of the KJTL/KJBO-LP net revenue collected each month received from Nexstar    
|               |  |                                              |  |             | 
|WYOU           |  | Wilkes Barre-Scranton, PA                    |  | CBS         |  | SSA              |  | 1/4/18     |  | $110 thousand per month paid to Nexstar                                           
|               |  |                                              |  |             |  | JSA              |  | 9/30/14    |  | 70% of the WYOU net revenue collected each month received from Nexstar            
|               |  |                                              |  |             | 
|KODE           |  | Joplin, MO-Pittsburg, KS                     |  | ABC         |  | SSA              |  | 3/31/12    |  | $75 thousand per month paid to Nexstar                                            
|               |  |                                              |  |             |  | JSA              |  | 9/30/14    |  | 70% of the KODE net revenue collected each month received from Nexstar            
|               |  |                                              |  |             | 
|KRBC           |  | Abilene-Sweetwater, TX                       |  | NBC         |  | SSA              |  | 6/12/13    |  | $25 thousand per month paid to Nexstar                                            
|               |  |                                              |  |             |  | JSA              |  | 6/30/14    |  | 70% of the KRBC net revenue collected each month received from Nexstar            
|               |  |                                              |  |             | 
|KSAN           |  | San Angelo, TX                               |  | NBC         |  | SSA              |  | 5/31/14    |  | $10 thousand per month paid to Nexstar                                            
|               |  |                                              |  |             |  | JSA              |  | 5/31/14    |  | 70% of the KSAN net revenue collected each month received from Nexstar            
|               |  |                                              |  |             | 
|WFXW           |  | Terre Haute, IN                              |  | Fox         |  | SSA              |  | 5/8/13     |  | $10 thousand per month paid to Nexstar                                            
|               |  |                                              |  |             |  | JSA              |  | 5/8/13     |  | 70% of the WFXW net revenue collected each month received from Nexstar            
|               |  |                                              |  |             | 
|KCIT and       |  | Amarillo, TX                                 |  | Fox         |  | SSA              |  | 4/30/09    |  | $50 thousand per month paid to Nexstar                                            
|KCPN-LP        |  |                                              |  | MyNetworkTV |  | JSA              |  | 4/30/09    |  | 70% of the KCIT/KCPN-LP net revenue collected each month received from Nexstar    
|               |  |                                              |  |             | 
|KHMT           |  | Billings, MT                                 |  | Fox         |  | TBA              |  | 12/13/09   |  | Monthly payments received from Nexstar(1)                                         
|               |  |                                              |  |             | 
|KAMC           |  | Lubbock, TX                                  |  | ABC         |  | SSA              |  | 2/15/09    |  | $75 thousand per month paid to Nexstar                                            
|               |  |                                              |  |             |  | JSA              |  | 2/15/09    |  | 70% of the KAMC net revenue collected each month received from Nexstar            
|               |  |                                              |  |             | 
|KOLR           |  | Springfield, MO                              |  | CBS         |  | SSA              |  | 2/15/09    |  | $150 thousand per month paid to Nexstar                                           
|               |  |                                              |  |             |  | JSA              |  | 2/15/09    |  | 70% of the KOLR net revenue collected each month received from Nexstar            
|               |  |                                              |  |             | 
|WUTR           |  | Utica, NY                                    |  | ABC         |  | SSA              |  | 3/31/14    |  | $10 thousand per month paid to Nexstar                                            
|               |  |                                              |  |             |  | JSA              |  | 3/31/14    |  | 70% of the WUTR net revenue collected each month received from Nexstar            
|               |  |                                              |  |             | 
|WTVO           |  | Rockford, IL                                 |  | ABC         |  | SSA              |  | 10/31/14   |  | $75 thousand per month paid to Nexstar                                            
|               |  |                                              |  |             |  | JSA              |  | 10/31/14   |  | 70% of the WTVO net revenue collected each month received from Nexstar            
|               |  |                                              |  |             | 
|KTVE           |  | Monroe, LA  El Dorado, AR                   |  | NBC         |  | SSA              |  | 1/16/18    |  | $20 thousand per month paid to Nexstar                                            
|               |  |                                              |  |             |  | JSA              |  | 1/16/18    |  | 70% of the KTVE net revenue collected each month received from Nexstar            
|Nexstar-owned: |  |                                              |  |             |  |                  |  |           
|               |  |                                              |  |             | 
|KFTA           |  | Ft. Smith-Fayetteville-Springdale-Rogers, AR |  | Fox/NBC     |  | TBA              |  | (2)        |  | $5 thousand per month paid to Nexstar $20 thousand per
month received from Nexstar



|(1) | Payments are variable based on stations monthly operating expenses.
|--- | --------------------------------------------------------------------

|(2) | TBA will terminate upon the assignment of KFTAs FCC license from Nexstar.
|--- | --------------------------------------------------------------------------

In conjunction with its acquisition of KTVE, the NBC affiliate in the Monroe, Louisiana  El Dorado, Arkansas market, effective January 16,
2008, Mission entered into a JSA and SSA with Nexstar. Under terms of the JSA, 70% of the KTVE net revenue collected each month is to be received from Nexstar and under terms of the SSA, Mission will pay Nexstar $20,000 per month in SSA fees.



7



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##### Table of Contents

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 for
KFTA Channel 24 (Ft. Smith, Arkansas) from Nexstar to Mission. Consideration for this transaction is set at $5.6 million. On August 28, 2006, Mission and Nexstar entered into a local service agreement (see Note 3) whereby Mission pays Nexstar
for the right to broadcast programming on KFTA and Nexstar pays Mission for the right to sell all advertising time on KFTA within certain time periods. Also in 2006, Mission entered into an affiliation agreement with the Fox network which provides
Fox programming to KFTA. Upon completing the assignment of KFTAs license, the Company plans to enter into JSA and SSA agreements 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.

In March 2008, the FCC granted the application to assign the license for KFTA from
Nexstar to Mission. The closing on the transaction is likely to occur on or before June 30, 2008.

6. Acquisition

On June 27, 2007, Mission entered into a purchase agreement with Piedmont Television Holdings LLC to acquire substantially all the assets of KTVE,
the NBC affiliate serving the Monroe, Louisiana / El Dorado, Arkansas market. On January 16, 2008, Mission completed the acquisition of KTVE for total consideration of $7.9 million, inclusive of transaction costs of $0.5 million. Pursuant to
the terms of the agreement, Mission made a down payment of $0.4 million against the purchase price in June 2007 and paid the remaining $7.4 million on January 16, 2008 from available cash on hand. Upon closing the purchase of KTVE, Mission
entered into a JSA and SSA with Nexstar-owned KARD, the Fox affiliate in the market, whereby KARD provides local news, sales and other non-programming services to KTVE.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition. The allocation of the KTVE purchase consideration to the assets and liabilities
acquired, including goodwill, has not been concluded due to the pending completion of tangible and intangible assets appraisals.



|                                                  |  |   |      
|------------------------------------------------- |  | - | -----
|Accounts receivable                               |  | $ | 1,081
|Current portion of broadcast rights               |  |   | 408  
|Prepaid expenses and other current assets         |  |   | 12   
|Property and equipment                            |  |   | 3,534
|Intangible assets                                 |  |   | 3,808
|Goodwill                                          |  |   | 586  
|                                                  |  |   |      
|Total assets acquired                             |  |   | 9,429
|Less: current portion of broadcast rights payable |  |   | 152  
|Less: accounts payable                            |  |   | 113  
|Less: accrued expenses and other liability        |  |   | 854  
|                                                  |  |   |      
|Net assets acquired                               |  | $ | 8,310
|                                                  |  |   |      

Of the $3.8 million of acquired intangible assets, $2.7 million was assigned to FCC licenses that
are not subject to amortization and $1.1 million was assigned to network affiliation agreements (estimated useful life of 15 years). Goodwill of $0.6 million is expected to be deductible for tax purposes.



8



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##### Table of Contents

MISSION BROADCASTING, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS(Continued)



6. Acquisition(Continued)



Unaudited Pro Forma Information

The following unaudited pro forma information has been presented as if the acquisition of KTVE had occurred on January 1, 2007 and 2008:



|                         |  |                                 |        |   |                                 |   |        |  
|------------------------ |  | ------------------------------- | ------ | - | ------------------------------- | - | ------ | -
|                         |  | Three MonthsEndedMarch 31, 2008 |        |   | Three MonthsEndedMarch 31, 2007 |  
|                         |  | (in thousands)                  |       
|Net revenue              |  | $                               | 9,570  |   |                                 | $ | 10,408 |  
|Income from operations   |  |                                 | 1,750  |   |                                 |   | 2,068  |  
|Loss before income taxes |  |                                 | (1,218 | ) |                                 |   | (1,152 | )
|Net loss                 |  |                                 | (1,605 | ) |                                 |   | (1,529 | )

The above selected unaudited pro forma information is presented for illustrative purposes only and
is not necessarily indicative of results of operations in future periods or results that would have been achieved had the Company owned the acquired station during the specified period.

7. Intangible Assets and Goodwill

Intangible assets subject to amortization consisted of the
following:



|                                                |  |                             |  |                         |        |                   |     |         |       |  |                         |        |                |     |        |  |   |         |   |  |   |       
|----------------------------------------------- |  | --------------------------- |  | ----------------------- | ------ | ----------------- | --- | ------- | ----- |  | ----------------------- | ------ | -------------- | --- | ------ |  | - | ------- | - |  | - | ------
|                                                |  | Estimateduseful life(years) |  | March 31, 2008          |        | December 31, 2007
|                                                |  | Gross                       |  | AccumulatedAmortization |        |                   | Net |         | Gross |  | AccumulatedAmortization |        |                | Net
|                                                |  |                             |  |                         |        | (in thousands)    |     |         |       |  |                         |        | (in thousands) |     |        | 
|Network affiliation agreements                  |  | 15                          |  | $                       | 67,892 |                   | $   | (36,684 | )     |  | $                       | 31,208 |                | $   | 66,744 |  | $ | (35,556 | ) |  | $ | 31,188
|Other definite-lived intangible assets          |  | 1-15                        |  |                         | 13,117 |                   |     | (8,158  | )     |  |                         | 4,959  |                |     | 13,117 |  |   | (7,937  | ) |  |   | 5,180 
|                                                |  |                             |  |                         |        |                   |     |         |       |  |                         |        |                |     |        |  |   |         |   |  |   |       
|Total intangible assets subject to amortization |  |                             |  | $                       | 81,009 |                   | $   | (44,842 | )     |  | $                       | 36,167 |                | $   | 79,861 |  | $ | (43,493 | ) |  | $ | 36,368
|                                                |  |                             |  |                         |        |                   |     |         |       |  |                         |        |                |     |        |  |   |         |   |  |   |       

Total amortization expense from definite-lived intangibles was $1.3 million for both the three
months ended March 31, 2008 and 2007. The Companys estimate of amortization expense for definite-lived intangible assets recorded on its books as of March 31, 2008 is approximately $5 million for each year for the years of 2008
through 2012.

The aggregate carrying value of indefinite-lived intangibles, consisting of FCC licenses and goodwill, was $49.1 million and
$45.9 million at March 31, 2008 and December 31, 2007, respectively. 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, 2008, the Company did not identify any events that would trigger an impairment assessment.

The change in carrying amount of goodwill for the three months ended March 31, 2008 was as follows:



|                  |  |                |       
|----------------- |  | -------------- | ------
|                  |  | March 31,2008 
|                  |  | (in thousands)
|Beginning balance |  | $              | 17,122
|Acquisition       |  |                | 586   
|                  |  |                |       
|Ending balance    |  | $              | 17,708
|                  |  |                |       

During 2008, the consummation of Missions acquisition of KTVE increased goodwill by $0.6
million.



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##### Table of Contents

MISSION BROADCASTING, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS(Continued)



8. Debt

Long-term debt consisted of the following:



|                          |  |                |         |   |                  |   |         |  
|------------------------- |  | -------------- | ------- | - | ---------------- | - | ------- | -
|                          |  | March 31,2008  |         |   | December 31,2007 |  
|                          |  | (in thousands) |        
|Term loans                |  | $              | 168,383 |   |                  | $ | 168,814 |  
|Revolving credit facility |  |                | 7,000   |   |                  |   | 7,000   |  
|                          |  |                |         |   |                  |   |         |  
|                          |  |                | 175,383 |   |                  |   | 175,814 |  
|Less: current portion     |  |                | (1,727  | ) |                  |   | (1,727  | )
|                          |  |                |         |   |                  |   |         |  
|                          |  | $              | 173,656 |   |                  | $ | 174,087 |  
|                          |  |                |         |   |                  |   |         |  

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, 2008 and December 31, 2007, Mission had $168.4 million and $168.8 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, 2008 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.

The total weighted-average interest rate of the Mission Facility was 4.43% and 6.61% at March 31, 2008 and December 31,
2007, respectively. 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 ranging from 0.375% to
0.50% per annum, based on the consolidated senior leverage ratio of Nexstar and Mission for that particular quarter.

Unused
Commitments and Borrowing Availability

As of March 31, 2008, there were $8.0 million of unused commitments under
Missions credit facility. The total amount of borrowings available under the revolving loan commitment of Missions senior secured credit facility is based on covenant calculations contained in Nexstars credit agreement. As of
March 31, 2008, all $8.0 million of total unused commitments under the Mission credit 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 Missions bank credit facility in the event of its default. Similarly, Mission is a guarantor of Nexstars bank credit facility and the senior subordinated notes issued by
Nexstar. The bank credit facilities are collateralized by a security interest in substantially all the combined assets, excluding FCC licenses, of Nexstar and Mission.

Debt Covenants

Missions bank credit facility agreement does not contain financial
covenant ratio requirements, but does provide for default in the event Nexstar does not comply with all covenants contained in its credit agreement.

9.
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, 2008, the Company had gross unrecognized tax benefits of approximately $3.7 million, which did not materially
change as of March 31, 2008. 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, 2008, the Company has not
accrued interest on the unrecognized tax benefits as 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



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##### Table of Contents

MISSION BROADCASTING, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS(Continued)



9. 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 2003. 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.

10. 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.

Some of the more significant FCC regulatory matters impacting
the Companys operations are discussed below.

Digital Television (DTV) Conversion

Television broadcasting in the United States is moving from an analog transmission system to a digital transmission system. For the transition period, the
FCC allotted each licensed television station a second channel for broadcast of a DTV signal. In 2006, President Bush signed into law legislation that establishes February 17, 2009 as the deadline for television broadcasters to broadcast on a
single DTV channel and return their analog channel to the FCC. Prior to February 17, 2009, television stations must broadcast with both analog and DTV signals.

Except for stations which have requested waiver of the FCCs deadline for construction, broadcast television stations are required to be broadcasting a full-power DTV signal. As of March 31, 2008,
Missions stations WUTR, WTVO, WYOU, KRBC and KAMC are broadcasting with full-power DTV signals. The FCC has authorized Mission to operate DTV facilities for its remaining stations at low-power until certain dates established by the FCC. The
FCC has established May 18, 2008 as the deadline for Mission stations KJTL, KCIT, KSAN, WFXW, WFXP and KODE. The FCC also has established August 18, 2008 as the deadline for Mission station KHMT and February 17, 2009 is the deadline for
KOLR.

Extension requests were filed with the FCC on March 19, 2008 for the Mission stations with permit expiration dates of
May 18, 2008 unless the stations were expected to begin DTV full-power operations by the May 18, 2008 deadline. An extension request will be filed with the FCC on or before June 19, 2008 (the due date for such filings) for Mission
station KHMT unless the station is expected to begin DTV full-power operations by its August 18, 2008 deadline. KOLR is expected to be operating at DTV full-power on or before February 17, 2009.

DTV conversion expenditures were $1.3 million and $0.7 million, respectively, for the three months ended March 31, 2008 and 2007. The Company will
incur various capital expenditures to modify its remaining stations DTV transmitting equipment for full-power DTV operations, including costs for the transmitter, transmission line, antenna and installation, and estimated costs for tower
upgrades and/or modifications. The Company anticipates these expenditures will be funded through available cash on hand and cash generated from operations as incurred in future years.

Media Ownership

In 2006, the
FCC initiated a rulemaking proceeding contemplating a comprehensive review of all of its media ownership rules, as required by the Communications Act. In a decision adopted December 18, 2007 and released on February 2, 2008, the FCC made
one change in its broadcasting ownership rules  allowing local newspaper/broadcasting cross-ownership under certain circumstances  but determined that it would not make any other changes in its media ownership rules. This FCC decision is
being appealed. In addition, the FCC has a separate proceeding to determine whether to make television joint sales agreements attributable interests under its ownership rules.



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##### Table of Contents

MISSION BROADCASTING, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS(Continued)



11. 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 bank credit facility. Nexstars bank 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 $200.0 million of 7% senior subordinated notes (7% Notes) due
2014 issued by Nexstar. The 7% 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 bank credit facility agreement and senior subordinated 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 bank
credit facility and the 7% Notes. At March 31, 2008, Nexstar had issued an aggregate principal amount of $200.0 million of senior subordinated notes and had $159.4 million outstanding under its bank credit facility.

Purchase Options Granted to Nexstar

In consideration of Nexstar Broadcasting Groups guarantee of Missions bank credit 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 agreement, or (2) the
amount of its indebtedness. Cash flow is defined as income or loss from operations, plus depreciation and amortization (including amortization of broadcast rights), interest income, non-cash trade and barter expenses, nonrecurring expenses
(including time brokerage agreement fees), network compensation payments received or receivable and corporate management fees, less payments for broadcast rights, non-cash trade and barter revenue and network compensation revenue. These option
agreements (which expire on various dates between 2008 and 2014) 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.



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##### Table of Contents

|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, 2008, unaudited
condensed statements of operations for the three months ended March 31, 2008 and 2007, unaudited condensed statement of changes in shareholders deficit for the three months ended March 31, 2008, unaudited condensed statements of cash
flows for the three months ended March 31, 2008 and 2007 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,
2007.

Executive Summary

Overview of Operations

As of March 31, 2008, 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, personnel and operations of our stations.

The following table summarizes the various local service agreements our stations had in effect as of March 31, 2008 with Nexstar:



|                   |  |                                                                                            
|------------------ |  | -------------------------------------------------------------------------------------------
|Service Agreements |  | Stations                                                                                   
|TBA Only(1)        |  | WFXP and KHMT                                                                              
|                   | 
|SSA & JSA(2)       |  | KJTL, KJBO-LP, KOLR, KCIT, KCPN-LP, KAMC, KRBC, KSAN, WUTR, 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.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In conjunction with its acquisition of KTVE, the NBC affiliate in the Monroe, Louisiana  El Dorado, Arkansas
market, effective January 16, 2008, Mission entered into a SSA and JSA with Nexstar. The terms of the SSA and JSA are comparable to the terms of the SSAs and JSAs between Nexstar and Mission as discussed above.

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 3 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 credit facility. We are a guarantor of the senior credit facility entered into by Nexstar and the senior subordinated notes issued by Nexstar. In consideration of Nexstars guarantee of our senior 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 2008 and 2014) 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.

Recent Developments

On June 27, 2007, Mission entered into a purchase
agreement with Piedmont Television Holdings LLC to acquire substantially all the assets of KTVE, the NBC affiliate serving the Monroe, Louisiana / El Dorado, Arkansas market. On January 16, 2008, Mission completed the acquisition of KTVE for
total consideration of $7.8 million, exclusive of transaction costs. Pursuant to the terms of the agreement, Mission made a down payment of $0.4 million against the purchase price in June 2007 and paid the remaining $7.4 million on January 16,
2008 from available cash on hand as of December 31, 2007. Upon closing the purchase of KTVE, Mission entered into a JSA and SSA with Nexstar-owned KARD, the Fox affiliate in the market, whereby KARD provides local news, sales and other
non-programming services to KTVE.

On April 11, 2006, we and Nexstar 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 is set at $5.6 million. Also in 2006, we entered into an affiliation agreement with the Fox network which provides Fox programming to KFTA.
On August 28, 2006, we and Nexstar entered into a local service agreement whereby we pay Nexstar for the right to broadcast programming on KFTA and Nexstar pays us for the right to sell all advertising time within certain time periods. The time
brokerage agreement will terminate upon the assignment of KFTAs FCC license from Nexstar to us. Upon completing the assignment of KFTAs license, we plan to enter into joint sales and shared services agreements 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.



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In March 2008, the FCC granted the application to assign the license for KFTA from Nexstar to
Mission. The closing on the transaction is likely to occur on or before June 30, 2008.

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,      
|                                            |  | 2008                               |       | 2007
|                                            |  | Amount                             |       | %    |       | Amount |   | %    
|                                            |  | (in thousands, except percentages)
|Retransmission compensation                 |  | $                                  | 660   |      | 72.0  |        | $ | 538   |  | 49.3 
|Network compensation                        |  |                                    | 234   |      | 25.5  |        |   | 501   |  | 45.9 
|Other                                       |  |                                    | 23    |      | 2.5   |        |   | 52    |  | 4.8  
|                                            |  |                                    |       |      |       |        |   |       |  |      
|Net broadcast revenue before barter revenue |  |                                    | 917   |      | 100.0 |        |   | 1,091 |  | 100.0
|Barter revenue                              |  |                                    | 618   |      |       |        |   | 576   |  |      
|Revenue from Nexstar Broadcasting, Inc.     |  |                                    | 7,785 |      |       |        |   | 7,172 |  |      
|                                            |  |                                    |       |      |       |        |   |       |  |      
|Net revenue                                 |  | $                                  | 9,320 |      |       |        | $ | 8,839 |  |      
|                                            |  |                                    |       |      |       |        |   |       |  |      

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,      
|                                                                                   |  | 2008                               |       | 2007
|                                                                                   |  | Amount                             |       | %    |       | Amount |   | %    
|                                                                                   |  | (in thousands, except percentages)
|Net revenue                                                                        |  | $                                  | 9,320 |      | 100.0 |        | $ | 8,839 |  | 100.0
|Operating expenses (income):                                                       |  |                                    |       |      |       |        |   |       |  |      
|Corporate expenses                                                                 |  |                                    | 280   |      | 3.0   |        |   | 217   |  | 2.5  
|Station direct operating expenses                                                  |  |                                    | 1,529 |      | 16.4  |        |   | 1,224 |  | 13.8 
|Selling, general and administrative expenses                                       |  |                                    | 357   |      | 3.8   |        |   | 311   |  | 3.5  
|Fees incurred pursuant to local service agreements with Nexstar Broadcasting, Inc. |  |                                    | 2,015 |      | 21.6  |        |   | 1,965 |  | 22.2 
|Gain on asset exchange                                                             |  |                                    |      |      |      |        |   |      |  |     
|Loss (gain) on asset disposal, net                                                 |  |                                    |      |      |      |        |   | 1     |  |     
|Barter expense                                                                     |  |                                    | 618   |      | 6.6   |        |   | 576   |  | 6.5  
|Depreciation and amortization                                                      |  |                                    | 2,215 |      | 23.8  |        |   | 2,185 |  | 24.7 
|Amortization of broadcast rights, excluding barter                                 |  |                                    | 562   |      | 6.0   |        |   | 374   |  | 4.2  
|                                                                                   |  |                                    |       |      |       |        |   |       |  |      
|Income from operations                                                             |  | $                                  | 1,744 |      |       |        | $ | 1,986 |  |      
|                                                                                   |  |                                    |       |      |       |        |   |       |  |      

Three Months Ended March 31, 2008 Compared to Three Months Ended March 31, 2007.

Revenue

Net revenue for the three months ended March 31, 2008, increased by $0.5 million, or 5.4% from the same period of 2007. This increase was primarily attributed to an increase in revenue from Nexstar as discussed below.

Revenue from Nexstar was $7.8 million for the three months ended March 31, 2008, compared to $7.2 million for the same period in 2007, an increase
of $0.6 million, or 8.5%. The increase was attributed to an increase in revenue that Nexstar generated from selling all of the advertising of our stations, primarily from our newly acquired television station KTVE, which in turn increased the
revenue we earned from Nexstar through JSAs.



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Compensation from retransmission consent and network affiliation agreements was $0.9 million for the
three months ended March 31, 2008, compared to $1.0 million for the same period in 2007, a decrease of $0.1 million, or 14.0%. The decrease was primarily due to approximately $0.3 million less of compensation recognized from network affiliation
agreements due to two new affiliation agreements becoming effective in January 2008, partially offset by an increase in the compensation we receive under retransmission consent agreements which primarily resulted from increases in the number of
cable and satellite subscribers in our markets.

Operating Expenses

Corporate expenses, related to costs associated with the centralized management of our stations, increased by $0.1 million, or 29.0%, for the three months
ended March 31, 2008 compared to same period in 2007. The increase was primarily due to higher compensation costs incurred in 2008 compared to 2007.

Station direct operating expenses, consisting primarily of news, engineering and programming, and selling, general and administrative expenses increased by $0.4 million, or 22.9% for the three months ended
March 31, 2008, compared to the same period in 2007. The increase was primarily due to an increase in the addition of our newly acquired television station KTVE and higher electric usage costs incurred in 2008.

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 increased by $50 thousand, or 2.5%, for the three months ended March 31, 2008 compared to the same period in 2007. These fees increased in 2008 due to the SSA fees related to our
newly acquired television station KTVE.

Amortization of broadcast rights, excluding barter, increased by $0.2 million, or 50.3%, for the
three months ended March 31, 2008, compared to the same period in 2007. The increase was primarily attributed to the addition of our newly acquired television station KTVE in 2008.

Amortization of intangible assets was $1.3 million for both the three months ended March 31, 2008 and 2007.

Depreciation of property and equipment was $0.9 million for the three months ended March 31, 2008, compared to $0.8 million for the same period in
2007, an increase of $0.1 million, or 3.7%. The increase was primarily attributed to the addition of our newly acquired television station KTVE in 2008.

Income from Operations

Income from operations was $1.8 million for the three months ended
March 31, 2008, compared to $2.0 million for the same period of 2007, a decrease of $0.2 million, or 12.2%. The decrease in income from operations for the three months ended March 31, 2008 was primarily attributed to increases in certain
operating expenses in 2008, partially offset by an increase in total net revenue, as discussed above.

Interest Expense

Interest expense, including amortization of debt financing costs, decreased by $0.2 million, or 4.9%, for the three months ended
March 31, 2008, compared to the same period in 2007. The lower amount of interest expense was primarily attributed to lower average interest rates incurred during the three months ended March 31, 2008 compared to the same period in 2007,
partially offset by an increase in the average amount outstanding during 2008 under our senior credit facility.

Income Taxes

Income tax expense increased by $33 thousand for the three months ended March 31, 2008, compared to the same period in 2007.
Our provision for income taxes is primarily created by an increase in the deferred tax liabilities position during the year arising from the amortizing of goodwill and other indefinite-lived intangible assets for income tax purposes which are not
amortized for financial reporting purposes. No tax benefit was recorded with respect to the losses for 2008 and 2007, as the utilization of such losses is not likely to be realized in the foreseeable future.

Liquidity and Capital Resources

We are highly
leveraged, which makes us vulnerable to changes in general economic conditions. Our ability to meet the future cash requirements described below depends on our ability to generate cash in the future, which is subject to general economic, financial,
competitive, legislative, regulatory and other conditions, many of which are beyond our control. Our ability to meet future cash requirements is also dependent upon the local service agreements we have entered into with Nexstar. Under our local
service agreements, Nexstar sells our advertising time and pays us a percentage of the amount collected. The payments we receive from Nexstar are a significant component of our cash flows. On March 7, 2008, 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



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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 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 December 31 2007. 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.

Overview

The following tables present summarized financial information management believes is helpful in evaluating the Companys liquidity and capital resources:



|                                                     |  |                             |         |   |                  |   |         |  
|---------------------------------------------------- |  | --------------------------- | ------- | - | ---------------- | - | ------- | -
|                                                     |  | Three Months EndedMarch 31, |        
|                                                     |  | 2008                        |         |   | 2007             |  
|                                                     |  | (in thousands)              |        
|Net cash provided by (used for) operating activities |  | $                           | 3,195   |   |                  | $ | (929    | )
|Net cash used for investing activities               |  |                             | (9,035  | ) |                  |   | (760    | )
|Net cash used for financing activities               |  |                             | (431    | ) |                  |   | (432    | )
|                                                     |  |                             |         |   |                  |   |         |  
|Net decrease in cash and cash equivalents            |  | $                           | (6,271  | ) |                  | $ | (2,121  | )
|                                                     |  |                             |         |   |                  |   |         |  
|Cash paid for interest                               |  | $                           | 2,973   |   |                  | $ | 3,150   |  
|Cash paid for income taxes, net                      |  | $                           |        |   |                  | $ |        |  
|                                                     |  |                            
|                                                     |  | March 31,2008               |         |   | December 31,2007 |  
|                                                     |  | (in thousands)              |        
|Cash and cash equivalents                            |  | $                           | 3,645   |   |                  | $ | 9,916   |  
|Long-term debt including current portion             |  | $                           | 175,383 |   |                  | $ | 175,814 |  
|Unused commitments under senior credit facility(1)   |  | $                           | 8,000   |   |                  | $ | 8,000   |  



|(1) | As of March 31, 2008, 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 increased by $4.1 million during the three months ended March 31, 2008 compared to the same
period in 2007. The increase was primarily due to (1) an increase of $2.4 million resulting from the timing of payments made relating to our payable to Nexstar, (2) an increase of $1.1 million resulting from the timing of collections of
accounts receivable and (3) an increase of $0.5 million resulting from the timing of payments made for accounts payable and accrued expenses.

Cash paid for interest decreased by $0.2 million during the three months ended March 31, 2008 compared to the same period in 2007 due to lower average interest rates incurred during the three months ended March 31, 2008 compared
to the same period in 2007 under our senior credit facility, partially offset by an increase in the average amount outstanding during 2008 under our senior 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 increased by $8.3 million during the three months ended March 31, 2008 compared to the
same period in 2007. Cash flows from investing activities consisted of cash used for capital additions and acquisition-related payments.

Capital expenditures were $1.1 million for the three months ended March 31, 2008, compared to $0.8 million for the same period in 2007. The increase was primarily attributed to digital conversion expenditures, which increased to $1.3
million for the three months ended March 31, 2008 from $0.7 million for the same period in 2007.

Acquisition-related payments for the
three months ended March 31, 2008 consisted of total consideration of $7.9 million, inclusive of transaction costs of $0.5 million, for our acquisition of KTVE.



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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 both the three months ended March 31, 2008 and 2007.

Although our senior credit facility allows for the payment of
cash dividends, we do not currently intend to declare or pay a cash dividend.

Future Sources of Financing and Debt Service
Requirements

As of March 31, 2008, we had debt of $175.4 million, which represented 221.1% 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, 2008, 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, 2008:



|                       |  |                |         |                  |   |           |  |           |       |            |   |         |  |   |  
|---------------------- |  | -------------- | ------- | ---------------- | - | --------- |  | --------- | ----- | ---------- | - | ------- |  | - | -
|                       |  | Total          |         | Remainderof 2008 |   | 2009-2010 |  | 2011-2012 |       | Thereafter
|                       |  | (in thousands)
|Senior credit facility |  | $              | 175,383 |                  | $ | 1,295     |  | $         | 3,454 |            | $ | 170,634 |  | $ | 

Interest payments on our senior 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 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, Inc. (Nexstars ultimate parent) and its subsidiaries guarantee full payment of all obligations under our bank credit facility in the event of our default. Similarly, we are a
guarantor of Nexstars bank credit facility and the senior subordinated notes issued by Nexstar. The bank 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, 2008, Nexstar had a maximum commitment of $241.9 million under its bank credit facility, of which $225.4 million of debt was outstanding, and had issued an aggregate principal amount of $200.0 million of senior
subordinated notes.

Debt Covenants

Our bank credit facility agreement does not contain financial covenant ratio requirements, but does provide for default in the event Nexstar does not comply with all covenants contained in its credit agreement.

As of March 31, 2008, Nexstar was in compliance with all covenants contained in the credit agreements governing its senior secured
credit facility and the indentures governing its publicly-held notes. Nexstar anticipates compliance with all the covenants through December 31, 2008.

On April 1, 2008, Nexstar redeemed a principal amount of approximately $46.9 million of its $130.0 million 11.375% senior discount notes (11.375% Notes) outstanding which will be sufficient to ensure
that the 11.375% Notes will not be applicable high yield discount obligations within the meaning of Section 163(i)(1) of the Internal Revenue Code. This principal payment was funded with cash generated from operations and from
borrowings under its senior secured credit facility.

Effective on April 1, 2008 under its bank credit facility agreement, Nexstar is
required to include the remaining principal balance of Nexstar Finance Holdings 11.375% Notes in the calculation of its total leverage ratio. Accordingly, as of June 30, 2008, the outstanding principal of $83.1 million on the 11.375% Notes will
be included as debt outstanding in this covenant compliance ratio.



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Given the impact of including the 11.375% notes in its June 30, 2008 total leverage ratio, Nexstar
is currently pursuing certain initiatives to enhance its ability to comply with this June 30, 2008 covenant. These initiatives included modifying certain vendor payment terms which will have a more favorable impact on its cash flows relative to
covenant calculations, prior to June 30, 2008. Nexstar also has repositioned approximately $13.0 million of capital expenditures originally planned for the first six months of 2008 into the last six months of 2008. In addition, Nexstars
management believes that it has certain other cash management and cost containment measures that could be implemented by the management team to ensure compliance with its covenants at June 30, 2008. Notwithstanding the operational initiatives
described above, Nexstar would also have the ability to seek a debt covenant waiver from its lenders.

Cash Requirements for DTV
Conversion

Television broadcasting in the United States is moving from an analog transmission system to a digital transmission
system. The conversion from broadcasting in the analog format to the digital format is expensive. Our conversion to a low-power DTV signal required an average initial capital expenditure of approximately $0.2 million per station. All of the
television stations that we own and operate are broadcasting at least a low-power digital television signal.

Except for stations which
have requested waiver of the FCCs deadline for construction, broadcast television stations are required to be broadcasting a full-power DTV signal. As of March 31, 2008, Missions stations WUTR, WTVO, WYOU, KOLR, KRBC and KAMC are
broadcasting with full-power DTV signals. The FCC has authorized Mission to operate DTV facilities for its remaining stations at low-power until certain dates established by the FCC. The FCC has established May 18, 2008 as the deadline for
Mission stations KJTL, KCIT, KSAN, WFXW, WFXP and KODE. The FCC also has established August 18, 2008 as the deadline for Mission station KHMT.

Extension requests were filed with the FCC on March 19, 2008 for the Mission stations with permit expiration dates of May 18, 2008 unless the stations were scheduled to go DTV full-power by the May 18, 2008 deadline.
Extension requests will be filed with the FCC on or before June 19, 2008 (the due date for such filings) for the Mission station with the permit expiration date of August 18, 2008 unless the station is scheduled to go DTV full-power by the
August 18, 2008 deadline.

DTV conversion expenditures were $1.3 million and $0.7 million, respectively, for the three months ended
March 31, 2008 and 2007. We estimate that it will require an average capital expenditure of approximately $1.5 million per station (for 7 stations as of March 31, 2008) to modify our remaining stations DTV transmitting equipment for
full-power DTV operations, including costs for the transmitter, transmission line, antenna and installation, and estimated costs for tower upgrades and/or modifications. We anticipate these expenditures will be funded through available cash on hand
and cash generated from operations as incurred in future years.

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 is set at $5.6 million. We intend to finance this transaction through cash on hand and borrowings under our senior secured credit facility.

No Off-Balance Sheet Arrangements

At March 31, 2008, 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 accounting principles generally accepted in the United States of America
(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 27 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, 2007. Management believes that as of March 31, 2008 there has been no material change to this information.



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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, 2007 and in our other filings with the Securities and Exchange Commission. The forward-looking statements made in this Quarterly Report on Form 10-Q are made only
as of the date hereof, and we do not have or undertake any obligation to update any forward-looking statements to reflect subsequent events or circumstances unless otherwise required by law.



|ITEM 3. | Quantitative and Qualitative Disclosures About Market Risk
|------- | ----------------------------------------------------------

Interest Rate Risk

Our exposure to market risk for changes in interest rates relates primarily to our long-term debt
obligations.

All term loan borrowings at March 31, 2008 under our senior credit facility bear interest at 4.45%, which represented
the base rate, or LIBOR, plus the applicable margin, as defined. All revolving loan borrowings at March 31, 2008 under our senior credit facility bear interest at 3.95%, 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, 2008 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 increase |  
|                       |  | 100 BPS                |       | 50 BPS                 |   | 50 BPS |  |   | 100 BPS |  
|                       |  | (in thousands)         |       | (in thousands)         |  
|Senior credit facility |  | $                      | 1,754 |                        | $ | 877    |  | $ | (877    | ) |  | $ | (1,754 | )

Impact of Inflation

We believe that our results of operations are not affected by moderate changes in the inflation rate.



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##### Table of Contents

|ITEM 4. | Controls and Procedures
|------- | -----------------------

Evaluation of
Disclosure Controls and Procedures

Missions management, with the participation of Missions President and Treasurer (who
is Missions principal executive officer and principal financial and accounting officer), conducted an evaluation as of the end of the period covered by this report of the effectiveness of the design and operation of Missions disclosure
controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934.

Based upon that evaluation,
Missions President and Treasurer concluded that as of the end of the period covered by this report Missions disclosure controls and procedures were effective in ensuring that information required to be disclosed by Mission in the reports
it files or submits under the Securities Exchange Act of 1934 (i) is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms and (ii) is accumulated and communicated to
Missions management, including its President and Treasurer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

During the quarterly period as of the end of the period covered
by this report, there have been no changes in Missions internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.



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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, 2007.



|ITEM 2. | Unregistered Sales of Equity Securities and Use of Proceeds
|------- | -----------------------------------------------------------

None.



|ITEM 3. | Defaults Upon Senior Securities
|------- | -------------------------------

None.



|ITEM 4. | Submission of Matters to a Vote of Security Holders
|------- | ---------------------------------------------------

None.



|ITEM 5. | Other Information
|------- | -----------------

None.



|ITEM 6. | Exhibits
|------- | --------



|            |  |                                                                                            
|----------- |  | -------------------------------------------------------------------------------------------
|Exhibit No. |  | Exhibit Index                                                                              
|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
|- | --------------



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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:

David S. SmithIts:

President and Treasurer(Principal Executive Officer and Principal Financial
and Accounting Officer)


Dated: May 12, 2008



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