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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549



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FORM 10-Q



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|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

for the quarterly period ended June 30, 2007

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



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MISSION
BROADCASTING, INC.

(Exact name of registrant as specified in its charter)



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|                                         |  |                                  
|---------------------------------------- |  | ---------------------------------
|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)



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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 or a non-accelerated filer. See definition of
accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (check one):

Large accelerated
filer ̈Accelerated filer ̈Non-accelerated filer  x

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 June 30, 2007, 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 June 30, 2007. As of July 31, 2007, 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 June 30, 2007 and December 31, 2006                                |  | 1   
|              |  |                                                                                               
|              |  | Condensed Statements of Operations for the three and six months ended June 30, 2007 and 2006   |  | 2   
|              |  |                                                                                               
|              |  | Condensed Statement of Changes in Shareholders Deficit for the six months ended June 30, 2007 |  | 3   
|              |  |                                                                                               
|              |  | Condensed Statements of Cash Flows for the six months ended June 30, 2007 and 2006             |  | 4   
|              |  |                                                                                               
|              |  | Notes to Condensed Financial Statements                                                        |  | 5   
|              |  |                                                                                               
|ITEM 2.       |  | Managements Discussion and Analysis of Financial Condition and Results of Operations          |  | 12  
|              |  |                                                                                               
|ITEM 3.       |  | Quantitative and Qualitative Disclosures about Market Risk                                     |  | 19  
|              |  |                                                                                               
|ITEM 4.       |  | Controls and Procedures                                                                        |  | 19  
|              |  |                                                                                               
|PART II       |  | OTHER INFORMATION                                                                              |  |     
|              |  |                                                                                               
|ITEM 1.       |  | Legal Proceedings                                                                              |  | 20  
|              |  |                                                                                               
|ITEM 1A.      |  | Risk Factors                                                                                   |  | 20  
|              |  |                                                                                               
|ITEM 2.       |  | Unregistered Sales of Equity Securities and Use of Proceeds                                    |  | 20  
|              |  |                                                                                               
|ITEM 3.       |  | Defaults Upon Senior Securities                                                                |  | 20  
|              |  |                                                                                               
|ITEM 4.       |  | Submission of Matters to a Vote of Security Holders                                            |  | 20  
|              |  |                                                                                               
|ITEM 5.       |  | Other Information                                                                              |  | 20  
|              |  |                                                                                               
|ITEM 6.       |  | Exhibits                                                                                       |  | 20  
|             
|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)



|                                                                                                                                     |  |               |         |   |                   |   |         |  
|------------------------------------------------------------------------------------------------------------------------------------ |  | ------------- | ------- | - | ----------------- | - | ------- | -
|                                                                                                                                     |  | June 30, 2007 |         |   | December 31, 2006 |  
|                                                                                                                                     |  | (Unaudited)   |        
|ASSETS                                                                                                                               |  |               |         |   |                   |   |         |  
|Current assets:                                                                                                                      |  |               |         |   |                   |   |         |  
|Cash and cash equivalents                                                                                                            |  | $             | 1,785   |   |                   | $ | 3,577   |  
|Accounts receivable (allowance for doubtful accounts of $0 and $0, respectively)                                                     |  |               | 778     |   |                   |   | 619     |  
|Current portion of broadcast rights                                                                                                  |  |               | 1,624   |   |                   |   | 2,919   |  
|Prepaid expenses and other current assets                                                                                            |  |               | 24      |   |                   |   | 145     |  
|Deferred tax asset                                                                                                                   |  |               | 8       |   |                   |   | 2       |  
|                                                                                                                                     |  |               |         |   |                   |   |         |  
|Total current assets                                                                                                                 |  |               | 4,219   |   |                   |   | 7,262   |  
|                                                                                                                                     |  |              
|Property and equipment, net                                                                                                          |  |               | 20,034  |   |                   |   | 20,420  |  
|Broadcast rights                                                                                                                     |  |               | 1,324   |   |                   |   | 2,121   |  
|FCC licenses                                                                                                                         |  |               | 28,736  |   |                   |   | 28,736  |  
|Goodwill                                                                                                                             |  |               | 16,651  |   |                   |   | 16,651  |  
|Other intangible assets, net                                                                                                         |  |               | 39,503  |   |                   |   | 42,201  |  
|Other noncurrent assets                                                                                                              |  |               | 618     |   |                   |   | 253     |  
|Deferred tax asset                                                                                                                   |  |               | 363     |   |                   |   | 82      |  
|                                                                                                                                     |  |               |         |   |                   |   |         |  
|Total assets                                                                                                                         |  | $             | 111,448 |   |                   | $ | 117,726 |  
|                                                                                                                                     |  |               |         |   |                   |   |         |  
|LIABILITIES AND SHAREHOLDERS DEFICIT                                                                                                |  |               |         |   |                   |   |         |  
|Current liabilities:                                                                                                                 |  |               |         |   |                   |   |         |  
|Current portion of debt                                                                                                              |  | $             | 1,727   |   |                   | $ | 1,727   |  
|Current portion of broadcast rights payable                                                                                          |  |               | 1,672   |   |                   |   | 3,028   |  
|Taxes payable                                                                                                                        |  |               | 33      |   |                   |   |        |  
|Accounts payable                                                                                                                     |  |               | 230     |   |                   |   | 379     |  
|Accrued expenses                                                                                                                     |  |               | 591     |   |                   |   | 997     |  
|Interest payable                                                                                                                     |  |               | 67      |   |                   |   | 102     |  
|Deferred revenue                                                                                                                     |  |               | 960     |   |                   |   | 886     |  
|Due to Nexstar Broadcasting, Inc.                                                                                                    |  |               | 18,562  |   |                   |   | 20,167  |  
|                                                                                                                                     |  |               |         |   |                   |   |         |  
|Total current liabilities                                                                                                            |  |               | 23,842  |   |                   |   | 27,286  |  
|                                                                                                                                     |  |              
|Debt                                                                                                                                 |  |               | 167,951 |   |                   |   | 168,814 |  
|Broadcast rights payable                                                                                                             |  |               | 1,673   |   |                   |   | 2,467   |  
|Deferred tax liabilities                                                                                                             |  |               | 6,408   |   |                   |   | 5,746   |  
|Deferred revenue                                                                                                                     |  |               | 421     |   |                   |   | 337     |  
|Deferred gain on sale of assets                                                                                                      |  |               | 2,171   |   |                   |   | 2,258   |  
|Other liabilities                                                                                                                    |  |               | 1,389   |   |                   |   | 2,765   |  
|                                                                                                                                     |  |               |         |   |                   |   |         |  
|Total liabilities                                                                                                                    |  |               | 203,855 |   |                   |   | 209,673 |  
|                                                                                                                                     |  |               |         |   |                   |   |         |  
|                                                                                                                                     |  |              
|Commitments and contingencies                                                                                                        |  |               |         |   |                   |   |         |  
|                                                                                                                                     |  |              
|Shareholders deficit:                                                                                                               |  |               |         |   |                   |   |         |  
|Common stock, $1 par value; 1,000 shares authorized; 1,000 shares issued and outstanding at both June 30, 2007 and December 31, 2006 |  |               | 1       |   |                   |   | 1       |  
|Subscription receivable                                                                                                              |  |               | (1      | ) |                   |   | (1      | )
|Accumulated deficit                                                                                                                  |  |               | (92,407 | ) |                   |   | (91,947 | )
|                                                                                                                                     |  |               |         |   |                   |   |         |  
|Total shareholders deficit                                                                                                          |  |               | (92,407 | ) |                   |   | (91,947 | )
|                                                                                                                                     |  |               |         |   |                   |   |         |  
|Total liabilities and shareholders deficit                                                                                          |  | $             | 111,448 |   |                   | $ | 117,726 |  
|                                                                                                                                     |  |               |         |   |                   |   |         |  

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 EndedJune 30, |        |   | Six Months EndedJune 30, |  
|                                                                                                                  |  | 2007                       |        |   | 2006                     |   |        | 2007 |  |   | 2006   |  
|                                                                                                                  |  | (Unaudited)                |        |   | (Unaudited)              |  
|Net broadcast revenue                                                                                             |  | $                          | 1,659  |   |                          | $ | 1,379  |      |  | $ | 3,326  |   |  | $ | 2,748  |  
|Revenue from Nexstar Broadcasting, Inc.                                                                           |  |                            | 7,974  |   |                          |   | 7,808  |      |  |   | 15,146 |   |  |   | 14,784 |  
|                                                                                                                  |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Net revenue                                                                                                       |  |                            | 9,633  |   |                          |   | 9,187  |      |  |   | 18,472 |   |  |   | 17,532 |  
|                                                                                                                  |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  
|                                                                                                                  |  |                            |        |  
|Operating expenses:                                                                                               |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Direct operating expenses (exclusive of depreciation and amortization shown separately below)                     |  |                            | 1,292  |   |                          |   | 1,165  |      |  |   | 2,516  |   |  |   | 2,304  |  
|Selling, general, and administrative expenses (exclusive of depreciation and amortization shown separately below) |  |                            | 635    |   |                          |   | 589    |      |  |   | 1,163  |   |  |   | 1,090  |  
|Fees incurred pursuant to local service agreements with Nexstar Broadcasting, Inc.                                |  |                            | 1,965  |   |                          |   | 1,950  |      |  |   | 3,930  |   |  |   | 3,900  |  
|Amortization of broadcast rights                                                                                  |  |                            | 933    |   |                          |   | 868    |      |  |   | 1,883  |   |  |   | 1,813  |  
|Amortization of intangible assets                                                                                 |  |                            | 1,349  |   |                          |   | 1,349  |      |  |   | 2,698  |   |  |   | 2,698  |  
|Depreciation                                                                                                      |  |                            | 827    |   |                          |   | 873    |      |  |   | 1,663  |   |  |   | 1,654  |  
|Loss on asset disposal, net                                                                                       |  |                            | 4      |   |                          |   |       |      |  |   | 5      |   |  |   | 7      |  
|                                                                                                                  |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Total operating expenses                                                                                          |  |                            | 7,005  |   |                          |   | 6,794  |      |  |   | 13,858 |   |  |   | 13,466 |  
|                                                                                                                  |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  
|                                                                                                                  |  |                            |        |  
|Income from operations                                                                                            |  |                            | 2,628  |   |                          |   | 2,393  |      |  |   | 4,614  |   |  |   | 4,066  |  
|Interest expense, including amortization of debt financing costs                                                  |  |                            | (3,078 | ) |                          |   | (3,083 | )    |  |   | (6,204 | ) |  |   | (5,872 | )
|Interest income                                                                                                   |  |                            | 18     |   |                          |   | 12     |      |  |   | 38     |   |  |   | 25     |  
|                                                                                                                  |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Loss before income taxes                                                                                          |  |                            | (432   | ) |                          |   | (678   | )    |  |   | (1,552 | ) |  |   | (1,781 | )
|                                                                                                                  |  |                            |        |  
|Income tax expense                                                                                                |  |                            | (59    | ) |                          |   | (215   | )    |  |   | (408   | ) |  |   | (552   | )
|                                                                                                                  |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Net loss                                                                                                          |  | $                          | (491   | ) |                          | $ | (893   | )    |  | $ | (1,960 | ) |  | $ | (2,333 | )
|                                                                                                                  |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  

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 Six Months Ended June 30, 2007

(in thousands, except share information)



|                                                            |  |              |  |           |   |                        |   |    |                     |       |   |                       |   |  |   |         |  
|----------------------------------------------------------- |  | ------------ |  | --------- | - | ---------------------- | - | -- | ------------------- | ----- | - | --------------------- | - |  | - | ------- | -
|                                                            |  | Common Stock |  |           |   |                        |   |    |                     | Total |  
|                                                            |  | Shares       |  | Par Value |   | SubscriptionReceivable |   |    | Accumulated Deficit |       |   | Shareholders Deficit |  
|Balance at January 1, 2007 (Unaudited)                      |  | 1,000        |  | $         | 1 |                        | $ | (1 | )                   |       | $ | (91,947               | ) |  | $ | (91,947 | )
|Adjustment for the cumulative effect of adopting FIN No. 48 |  |             |  |           |  |                        |   |   |                     |       |   | 1,500                 |   |  |   | 1,500   |  
|Net loss                                                    |  |             |  |           |  |                        |   |   |                     |       |   | (1,960                | ) |  |   | (1,960  | )
|                                                            |  |              |  |           |   |                        |   |    |                     |       |   |                       |   |  |   |         |  
|Balance at June 30, 2007 (Unaudited)                        |  | 1,000        |  | $         | 1 |                        | $ | (1 | )                   |       | $ | (92,407               | ) |  | $ | (92,407 | )
|                                                            |  |              |  |           |   |                        |   |    |                     |       |   |                       |   |  |   |         |  

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)



|                                                                                |  |                          |        |   |      |   |        |  
|------------------------------------------------------------------------------- |  | ------------------------ | ------ | - | ---- | - | ------ | -
|                                                                                |  | Six Months EndedJune 30, |       
|                                                                                |  | 2007                     |        |   | 2006 |  
|                                                                                |  | (Unaudited)              |       
|Cash flows from operating activities:                                           |  |                          |        |   |      |   |        |  
|Net loss                                                                        |  | $                        | (1,960 | ) |      | $ | (2,333 | )
|Adjustments to reconcile net loss to net cash provided by operating activities: |  |                          |        |   |      |   |        |  
|Deferred income taxes                                                           |  |                          | 375    |   |      |   | 552    |  
|Depreciation of property and equipment                                          |  |                          | 1,663  |   |      |   | 1,654  |  
|Amortization of intangible assets                                               |  |                          | 2,698  |   |      |   | 2,698  |  
|Amortization of debt financing costs                                            |  |                          | 22     |   |      |   | 47     |  
|Amortization of broadcast rights, excluding barter                              |  |                          | 764    |   |      |   | 802    |  
|Payments for broadcast rights                                                   |  |                          | (818   | ) |      |   | (905   | )
|Loss on asset disposal, net                                                     |  |                          | 5      |   |      |   | 7      |  
|Deferred gain recognition                                                       |  |                          | (87    | ) |      |   | (87    | )
|Changes in operating assets and liabilities:                                    |  |                          |        |   |      |   |        |  
|Accounts receivable                                                             |  |                          | (159   | ) |      |   | (324   | )
|Prepaid expenses and other current assets                                       |  |                          | 121    |   |      |   | 103    |  
|Other noncurrent assets                                                         |  |                          | (5     | ) |      |   | (1     | )
|Taxes payable                                                                   |  |                          | 33     |   |      |   |       |  
|Accounts payable and accrued expenses                                           |  |                          | (555   | ) |      |   | 262    |  
|Interest payable                                                                |  |                          | (35    | ) |      |   | (26    | )
|Deferred revenue                                                                |  |                          | 158    |   |      |   | 327    |  
|Other noncurrent liabilities                                                    |  |                          | 124    |   |      |   | 143    |  
|Due to Nexstar Broadcasting, Inc                                                |  |                          | (1,605 | ) |      |   | (1,569 | )
|                                                                                |  |                          |        |   |      |   |        |  
|Net cash provided by operating activities                                       |  |                          | 739    |   |      |   | 1,350  |  
|                                                                                |  |                          |        |   |      |   |        |  
|Cash flows from investing activities:                                           |  |                          |        |   |      |   |        |  
|Additions to property and equipment                                             |  |                          | (1,284 | ) |      |   | (647   | )
|Proceeds from sale of assets                                                    |  |                          | 3      |   |      |   | 10     |  
|Down payment on acquisition of station                                          |  |                          | (387   | ) |      |   |       |  
|                                                                                |  |                          |        |   |      |   |        |  
|Net cash used for investing activities                                          |  |                          | (1,668 | ) |      |   | (637   | )
|                                                                                |  |                          |        |   |      |   |        |  
|Cash flows used for financing activities:                                       |  |                          |        |   |      |   |        |  
|Repayment of long-term debt                                                     |  |                          | (863   | ) |      |   | (863   | )
|                                                                                |  |                          |        |   |      |   |        |  
|Net decrease in cash and cash equivalents                                       |  |                          | (1,792 | ) |      |   | (150   | )
|                                                                                |  |                         
|Cash and cash equivalents at beginning of period                                |  |                          | 3,577  |   |      |   | 1,404  |  
|                                                                                |  |                          |        |   |      |   |        |  
|Cash and cash equivalents at end of period                                      |  | $                        | 1,785  |   |      | $ | 1,254  |  
|                                                                                |  |                          |        |   |      |   |        |  
|                                                                                |  |                         
|Supplemental schedule of cash flow information:                                 |  |                          |        |   |      |   |        |  
|Cash paid during the period for:                                                |  |                          |        |   |      |   |        |  
|Interest                                                                        |  | $                        | 6,217  |   |      | $ | 5,851  |  
|                                                                                |  |                          |        |   |      |   |        |  
|Income taxes, net                                                               |  | $                        |       |   |      | $ |       |  
|                                                                                |  |                          |        |   |      |   |        |  

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



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##### Table of Contents

MISSION BROADCASTING, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

1. Organization and Business Operations

As of
June 30, 2007, Mission Broadcasting, Inc. (Mission or the Company) owned and operated 15 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 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 10, Missions sole shareholder has granted Nexstar purchase options to acquire the assets and assume the liabilities of each Mission
station, subject to Federal Communications Commission (FCC) consent.

The Company is highly leveraged, which makes it
vulnerable to changes in general economic conditions. The Companys ability to repay or refinance its debt will depend on, among other things, financial, business, market, competitive and other conditions, many of which are beyond its control,
as well as Nexstar maintaining its pledge to continue the local service agreements with the Companys stations.

On May 17, 2007,
Nexstar Broadcasting Group, Inc. announced that its Board of Directors decided to engage Goldman, Sachs & Co. to assist it in reviewing strategic alternatives including, but not limited to, the sale of Nexstar. On August 3, 2007, in
light of the difficult conditions in the financing markets, Nexstar Broadcasting Group, Inc.s Board of Directors, in consultation with its financial advisor Goldman, Sachs & Co., decided to suspend discussions with prospective
acquirers of Nexstar. At this time, it is not possible to determine what, if any, impact this may have on Mission.

2. Summary of Significant Accounting
Policies

Interim Financial Statements

The condensed financial statements as of June 30, 2007, and for the three and six months ended June 30, 2007 and 2006 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, 2006. The balance sheet at December 31, 2006 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.

Adoption of FIN No. 48

On January 1, 2007, the Company adopted FIN No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement
No. 109 (FIN No. 48) which clarifies whether the benefit of tax positions taken in a filed tax return, or expected to be taken in a future tax return, should be reflected in income tax expense in the financial statements.
FIN No. 48 requires that the benefit from an uncertain tax position be recognized in the financial statements only if it is more likely than not that the tax position will be sustained, based on its technical merits, upon examination by a
taxing authority. The amount recognized in the financial statements from an uncertain tax position is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. To the extent a tax
return position has not been reflected in the financial statements, a liability (unrecognized tax benefit) is recorded. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense,
which is consistent with its recognition of these items in prior period financial statements. As a result of adopting FIN No. 48, the Company recorded a $1.5 million decrease to other liabilities and a cumulative-effect adjustment decreasing
the January 1, 2007 balance of accumulated deficit by a corresponding amount. See Note 8 for further discussion of the Companys unrecognized tax benefits.

Basis of Presentation

Certain prior year financial statement amounts have been reclassified
to conform to the current year presentation.



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##### Table of Contents

MISSION BROADCASTING, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS(Continued)



2. Summary of Significant Accounting Policies(Continued)



Recent Accounting Pronouncements

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS
No. 157), which addresses how companies should determine fair value when they are required to use a fair value measure for recognition or disclosure purposes under generally accepted accounting principles. SFAS No. 157 defines fair
value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. Under SFAS No. 157, the definition of fair value retains the exchange price notion in earlier definitions of fair value,
but clarifies that the exchange price is the price in an orderly transaction between market participants to sell the asset or transfer the liability in the market in which the reporting entity would transact for the asset or liability. The
transaction to sell the asset or transfer the liability is a hypothetical transaction at the measurement date, considered from the perspective of a market participant that holds the asset or owes the liability. SFAS No. 157 is effective for
financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years, which is the Companys 2008 fiscal year. The Company will adopt this Statement in the first quarter 2008.
Management is currently evaluating the impact of adopting SFAS No. 157, but does not presently anticipate it will have a material effect on its financial position or results of operations.

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 will adopt the provisions of this Statement beginning in fiscal 2008. Management is currently evaluating the impact the adoption of SFAS No. 159 will have on the Companys financial statements, but does not presently anticipate
it will have a material effect on its financial position or results of operations.

3. 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.

On August 28, 2006, Mission entered
into a TBA with Nexstar and the Company began providing Fox network programming to Nexstar-owned KFTA Channel 24 (Fort Smith, Arkansas) in exchange for monthly payments of $5 thousand to Nexstar. Also under the TBA, Nexstar began selling all
advertising time during the Fox programming time periods in exchange for monthly payments of $20 thousand to Mission. The TBA will terminate upon the assignment of KFTAs FCC license from Nexstar (see Note 4).

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)



3. Local Service Agreements with Nexstar (Continued)



The following table summarizes the various local service agreements Mission had in effect with
Nexstar as of June 30, 2007:



|               |  |                                              |  |             |  |                  |  |            |  |                                                                                   
|-------------- |  | -------------------------------------------- |  | ----------- |  | ---------------- |  | ---------- |  | ----------------------------------------------------------------------------------
|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              |  | 1/4/08     |  | $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            
|               |  |                                              |  |             | 
|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.
|--- | --------------------------------------------------------------------------

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.



7



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##### Table of Contents

MISSION BROADCASTING, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS(Continued)



4. 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 May 2006, two affiliates of Equity Broadcasting Corporation (Equity) filed a petition to
deny against the KFTA assignment application alleging that Nexstar improperly controls Mission and its stations. Nexstar and Mission submitted a joint opposition to Equitys petition to deny. The FCC is currently considering the KFTA assignment
application. In September 2006, Equity also submitted a petition to deny Nexstars application for the renewal of KFTAs FCC license. Nexstar has filed its response to Equitys petition to deny the license renewal. Although management
believes that the petitions have no merit, it is not possible to predict what action the FCC will take on the petitions to deny, or when it will take such action.

5. Pending Acquisition

On June 27, 2007, Mission entered into a purchase agreement to acquire substantially all the
assets of KTVE, the NBC affiliate serving the Monroe, Louisiana / El Dorado, Arkansas market, for $7.7 million in cash from Piedmont Television Holdings LLC. Pursuant to the terms of the agreement, Mission made a down payment of $0.4 million against
the purchase price in June 2007. Mission intends to finance the acquisition through borrowings under its senior secured credit facility. The acquisition is expected to close in the fourth quarter of 2007, subject to FCC consent. Upon closing the
purchase of KTVE, Mission will enter into a JSA and SSA with Nexstar-owned KARD, the Fox affiliate in the market, whereby KARD will provide local news, sales and other non-programming services to KTVE.

6. Intangible Assets and Goodwill

Intangible assets
subject to amortization consisted of the following:



|                                                |  |                               |  |                          |        |                   |     |         |       |  |                          |        |  |     |        |  |   |         |   |  |   |       
|----------------------------------------------- |  | ----------------------------- |  | ------------------------ | ------ | ----------------- | --- | ------- | ----- |  | ------------------------ | ------ |  | --- | ------ |  | - | ------- | - |  | - | ------
|                                                |  | Estimated useful life (years) |  | June 30, 2007            |        | December 31, 2006
|                                                |  | Gross                         |  | Accumulated Amortization |        |                   | Net |         | Gross |  | Accumulated Amortization |        |  | Net
|                                                |  |                               |  | (in thousands)           |        | (in thousands)   
|Network affiliation agreements                  |  | 15                            |  | $                        | 66,744 |                   | $   | (33,331 | )     |  | $                        | 33,413 |  | $   | 66,744 |  | $ | (31,106 | ) |  | $ | 35,638
|Other definite-lived intangible assets          |  | 1-15                          |  |                          | 14,117 |                   |     | (8,027  | )     |  |                          | 6,090  |  |     | 14,117 |  |   | (7,554  | ) |  |   | 6,563 
|                                                |  |                               |  |                          |        |                   |     |         |       |  |                          |        |  |     |        |  |   |         |   |  |   |       
|Total intangible assets subject to amortization |  |                               |  | $                        | 80,861 |                   | $   | (41,358 | )     |  | $                        | 39,503 |  | $   | 80,861 |  | $ | (38,660 | ) |  | $ | 42,201
|                                                |  |                               |  |                          |        |                   |     |         |       |  |                          |        |  |     |        |  |   |         |   |  |   |       

Total amortization expense from definite-lived intangibles was $1.3 million for both the three
months ended June 30, 2007 and 2006, and was $2.7 million for both the six months ended June 30 2007 and 2006. The Companys estimate of amortization expense for definite-lived intangible assets recorded on its books as of
June 30, 2007 is approximately $5 million for each year for the years of 2007 through 2011.

The aggregate carrying value of
indefinite-lived intangibles, consisting of FCC licenses and goodwill, was $45.4 million at both June 30, 2007 and December 31, 2006. 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 June 30, 2007, the Company did not identify any events that would trigger an impairment assessment.

During the six-month period ended June 30, 2007, there were no changes to the carrying amount of goodwill.



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##### Table of Contents

MISSION BROADCASTING, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS(Continued)



7. Debt

Long-term debt consisted of the following:



|                      |  |                |         |   |                  |   |         |  
|--------------------- |  | -------------- | ------- | - | ---------------- | - | ------- | -
|                      |  | June 30,2007   |         |   | December 31,2006 |  
|                      |  | (in thousands) |        
|Term loans            |  | $              | 169,678 |   |                  | $ | 170,541 |  
|                      |  |               
|Less: current portion |  |                | (1,727  | ) |                  |   | (1,727  | )
|                      |  |                |         |   |                  |   |         |  
|                      |  | $              | 167,951 |   |                  | $ | 168,814 |  
|                      |  |                |         |   |                  |   |         |  

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
June 30, 2007 and December 31, 2006, Mission had $169.7 million and $170.5 million, respectively, outstanding under its Term Loan B and no 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 six months ended June 30, 2007 repayments of Missions Term Loan B totaled $0.9 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 7.11% at both June 30, 2007 and December 31,
2006. 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 June 30, 2007, there were $15.0 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 June 30, 2007, all
$15.0 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.

8. Income Taxes

The Companys provision for income taxes is primarily comprised of deferred income taxes created by an increase in the deferred tax liabilities
position during the year resulting from the amortization of goodwill and other indefinite-lived intangible assets for income tax purposes which are not amortized for financial reporting purposes. These deferred tax liabilities do not reverse on a
scheduled basis and are not used to support the realization of deferred tax assets. The Companys deferred tax assets primarily result from federal and state net operating loss carryforwards (NOLs). The Companys NOLs are
available to reduce future taxable income if utilized before their expiration. The Company has provided a valuation allowance for certain deferred tax assets as it believes they may not be realized through future taxable earnings.



On June 15, 2007, the Texas Governor signed legislation that provided
various technical corrections to the Texas Margin Tax. Based on the changes provided in this newly enacted tax law, the Company adjusted its temporary credit for Texas business loss carryovers to be used as an offset to the Margin Tax and a related
deferred tax asset during the second quarter of 2007. The effect of the revision made to the temporary credit increased the Companys deferred tax assets position resulting in approximately a $0.3 million reduction in the deferred state income
tax provision for the three and six months ended June 30, 2007.



9



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##### Table of Contents

MISSION BROADCASTING, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS(Continued)



8. Income Taxes(Continued)



At January 1, 2007, the Company had gross unrecognized tax benefits of approximately $4.1
million, which did not materially change as of June 30, 2007. 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. Due to the existence of a valuation allowance, their reversal will have no effect on the Companys effective tax rate or financial position.

The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. The Company is no longer subject to U.S. federal tax examinations for years after 2002. Additionally, any NOLs
that were generated in prior years and that are utilized in the future may be subject to examination by the Internal Revenue Service. State jurisdictions that remain subject to examination are not considered significant.

9. FCC Regulatory Matters

Television
broadcasting is subject to the jurisdiction of the FCC under the Communications Act of 1934, as amended (the Communications Act). The Communications Act prohibits the operation of television broadcasting stations except under a license
issued by the FCC, and empowers the FCC, among other things, to issue, revoke, and modify broadcasting licenses, determine the location of television stations, regulate the equipment used by television stations, adopt regulations to carry out the
provisions of the Communications Act and impose penalties for the violation of such regulations. The FCCs ongoing rule making proceedings could have a significant future impact on the television industry and on the operation of the
Companys stations. In addition, the U.S. Congress may act to amend the Communications Act in a manner that could impact the Companys stations and the television broadcast industry in general.

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 June 30, 2007, Missions stations KOLR, WUTR, WTVO and WYOU are broadcasting with
full-power DTV signals. The Companys remaining stations are broadcasting low-power DTV signals. The FCC has granted Mission an extension of time until November 18, 2007 to begin broadcasting full-power digital television signals for its
remaining stations. Mission will be required to request a further extension of time to construct full-power DTV facilities for its stations which do not initiate full-power DTV broadcasts by November 18, 2007. If the FCC denies this further
request for extension of time, the stations may lose interference protection for their signals outside their low-power coverage area.

DTV
conversion expenditures were $1.3 million and $0.6 million, respectively, for the six months ended June 30, 2007 and 2006. 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 which provides for a comprehensive review of all of its media ownership rules, as required by the
Communications Act. The Commission is considering rules relating to ownership of two or more TV stations in a market, ownership of local TV and radio stations by daily newspapers in the same market, cross-ownership of local TV and radio stations,
and changes to how the national TV ownership limits are calculated. The proceeding, which includes several public hearings to be held throughout the country, has extended into 2007. At this time, it is not possible to predict the outcome of any
changes, if any, to the FCCs media ownership rules.



10



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##### Table of Contents

MISSION BROADCASTING, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS(Continued)



10. Commitments and Contingencies

Guarantees of Nexstar Debt

Mission is a guarantor of and has pledged substantially all its assets, excluding FCC licenses, to guarantee Nexstars 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 June 30, 2007, Nexstar had issued an aggregate principal amount of $200.0 million of senior subordinated notes and had $194.7 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.

Indemnification Obligations

In connection with certain agreements that the Company enters into in the normal course of its business, including local service agreements, business acquisitions and borrowing arrangements, the Company enters into contractual arrangements
under which the Company agrees to indemnify the third party to such arrangement from losses, claims and damages incurred by the indemnified party for certain events as defined within the particular contract. Such indemnification obligations may not
be subject to maximum loss clauses and the maximum potential amount of future payments the Company could be required to make under these indemnification arrangements may be unlimited. Historically, payments made related to these indemnifications
have been immaterial and the Company has not incurred significant costs to defend lawsuits or settle claims related to these indemnification agreements.

Litigation

From time to time, the Company is involved with claims that arise out of the
normal course of business. In the opinion of management, any resulting liability with respect to these claims would not have a material adverse effect on the Companys financial position or results of operations.



11



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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 June 30, 2007, unaudited
condensed statements of operations for the three and six months ended June 30, 2007 and 2006, unaudited condensed statement of changes in shareholders deficit for the six months ended June 30, 2007, unaudited condensed statements of
cash flows for the six months ended June 30, 2007 and 2006 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,
2006.

Executive Summary

Overview of Operations

As of June 30, 2007, we owned and operated 15 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 June 30, 2007 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 and WTVO

---

|(1) | We have a time brokerage agreement (TBA) for each of these stations which allows Nexstar to program most of
each stations broadcast time, sell each stations advertising time and retain the advertising revenue generated in exchange for monthly payments to us.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | We have both a shared services agreement (SSA) and a joint sales agreement (JSA) for each of
these stations. The SSA allows the Nexstar station in the market to provide certain services including news production, technical maintenance and security, in exchange for Nexstars right to receive certain payments from us as described in the
SSAs. The JSA permits Nexstar to sell and retain a percentage of the net revenue from the stations advertising time in return for monthly payments to us of the remaining percentage of the net revenue, as described in the JSAs.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The arrangements under the local service agreements each Mission station has entered into with Nexstar has had the
effect of Nexstar receiving substantially all of the available cash, after our payments of operating costs and debt service, generated by our stations. We anticipate that Nexstar will continue to receive substantially all of our available cash,
after our payments for operating costs and debt service, generated by our stations. 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 are freely exercisable or assignable by Nexstar
without consent or approval by our sole shareholder.

Recent Developments

On May 17, 2007, Nexstar Broadcasting Group, Inc. announced that its Board of Directors decided to engage Goldman, Sachs & Co. to assist it
in reviewing strategic alternatives including, but not limited to, the sale of Nexstar. On August 3, 2007, in light of the difficult conditions in the financing markets, Nexstar Broadcasting Group, Inc.s Board of Directors, in
consultation with its financial advisor Goldman, Sachs & Co., decided to suspend discussions with prospective acquirers of Nexstar. At this time, it is not possible to determine what, if any, impact this may have on Mission.

On June 27, 2007, we entered into a purchase agreement to acquire substantially all the assets of KTVE, the NBC affiliate serving the Monroe,
Louisiana / El Dorado, Arkansas market, for $7.7 million in cash from Piedmont Television Holdings LLC. Pursuant to the terms of the agreement, we made a down payment of $0.4 million against the purchase price in June 2007. We intend to finance the
acquisition through borrowings under our senior secured credit facility. The acquisition is expected to close in the fourth quarter of 2007, subject to FCC consent. Upon closing the purchase of KTVE, we will enter into a JSA and SSA with
Nexstar-owned KARD, the Fox affiliate in the market, whereby KARD will provide 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 May 2006, two affiliates of Equity Broadcasting Corporation (Equity) filed a petition to
deny against the KFTA assignment application alleging that Nexstar improperly controls us and our stations. We and Nexstar have submitted a joint opposition to Equitys petition to deny. The FCC is currently considering the KFTA assignment
application. In September 2006, Equity also submitted a petition to deny Nexstars application for the renewal of KFTAs FCC license. Nexstar has filed its response to Equitys petition to deny the license renewal. Although management
believes that the petitions have no merit, it is not possible to predict what action the FCC will take on the petitions to deny, or when it will take such action.

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 June 30,        |       | Six Months Ended June 30,         
|                                        |  | 2007                               |       | 2006                               |       | 2007   |   | 2006 
|                                        |  | Amount                             |       | %                                  |       | Amount |   | %     |  | Amount |  | % |        | Amount |       | %
|                                        |  | (in thousands, except percentages) |       | (in thousands, except percentages)
|Retransmission compensation             |  | $                                  | 646   |                                    | 57.9  |        | $ | 488   |  | 55.2   |  | $ | 1,184  |        | 53.6  |   | $ | 963    |  | 55.4 
|Network compensation                    |  |                                    | 448   |                                    | 40.1  |        |   | 371   |  | 41.9   |  |   | 949    |        | 43.0  |   |   | 715    |  | 41.2 
|Other                                   |  |                                    | 22    |                                    | 2.0   |        |   | 26    |  | 2.9    |  |   | 74     |        | 3.4   |   |   | 59     |  | 3.4  
|                                        |  |                                    |       |                                    |       |        |   |       |  |        |  |   |        |        |       |   |   |        |  |      
|Net broadcast revenue before barter     |  |                                    | 1,116 |                                    | 100.0 |        |   | 885   |  | 100.0  |  |   | 2,207  |        | 100.0 |   |   | 1,737  |  | 100.0
|Barter revenue                          |  |                                    | 543   |                                    |       |        |   | 494   |  |        |  |   | 1,119  |        |       |   |   | 1,011  |  |      
|Revenue from Nexstar Broadcasting, Inc. |  |                                    | 7,974 |                                    |       |        |   | 7,808 |  |        |  |   | 15,146 |        |       |   |   | 14,784 |  |      
|                                        |  |                                    |       |                                    |       |        |   |       |  |        |  |   |        |        |       |   |   |        |  |      
|Net revenue                             |  | $                                  | 9,633 |                                    |       |        | $ | 9,187 |  |        |  | $ | 18,472 |        |       |   | $ | 17,532 |  |      
|                                        |  |                                    |       |                                    |       |        |   |       |  |        |  |   |        |        |       |   |   |        |  |      

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 June 30,        |       | Six Months Ended June 30,         
|                                                                                   |  | 2007                               |       | 2006                               |       | 2007   |   | 2006 
|                                                                                   |  | Amount                             |       | %                                  |       | Amount |   | %     |  | Amount |  | % |        | Amount |       | %
|                                                                                   |  | (in thousands, except percentages) |       | (in thousands, except percentages)
|Net revenue                                                                        |  | $                                  | 9,633 |                                    | 100.0 |        | $ | 9,187 |  | 100.0  |  | $ | 18,472 |        | 100.0 |   | $ | 17,532 |  | 100.0
|Operating expenses:                                                                |  |                                    |       |                                    |       |        |   |       |  |        |  |   |        |        |       |   |   |        |  |      
|Corporate expenses                                                                 |  |                                    | 267   |                                    | 2.8   |        |   | 248   |  | 2.7    |  |   | 484    |        | 2.6   |   |   | 402    |  | 2.3  
|Station direct operating expenses, net of trade                                    |  |                                    | 1,292 |                                    | 13.4  |        |   | 1,165 |  | 12.7   |  |   | 2,516  |        | 13.6  |   |   | 2,304  |  | 13.1 
|Selling, general and administrative expenses                                       |  |                                    | 368   |                                    | 3.8   |        |   | 341   |  | 3.7    |  |   | 679    |        | 3.7   |   |   | 688    |  | 3.9  
|Fees incurred pursuant to local service agreements with Nexstar Broadcasting, Inc. |  |                                    | 1,965 |                                    | 20.4  |        |   | 1,950 |  | 21.2   |  |   | 3,930  |        | 21.3  |   |   | 3,900  |  | 22.2 
|Loss on asset disposal, net                                                        |  |                                    | 4     |                                    |      |        |   |      |  |       |  |   | 5      |        |      |   |   | 7      |  |     
|Barter expense                                                                     |  |                                    | 543   |                                    | 5.6   |        |   | 494   |  | 5.4    |  |   | 1,119  |        | 6.1   |   |   | 1,011  |  | 5.8  
|Depreciation and amortization                                                      |  |                                    | 2,176 |                                    | 22.6  |        |   | 2,222 |  | 24.2   |  |   | 4,361  |        | 23.6  |   |   | 4,352  |  | 24.8 
|Amortization of broadcast rights, excluding barter                                 |  |                                    | 390   |                                    | 4.0   |        |   | 374   |  | 4.1    |  |   | 764    |        | 4.1   |   |   | 802    |  | 4.6  
|                                                                                   |  |                                    |       |                                    |       |        |   |       |  |        |  |   |        |        |       |   |   |        |  |      
|Income from operations                                                             |  | $                                  | 2,628 |                                    |       |        | $ | 2,393 |  |        |  | $ | 4,614  |        |       |   | $ | 4,066  |  |      
|                                                                                   |  |                                    |       |                                    |       |        |   |       |  |        |  |   |        |        |       |   |   |        |  |      

Three Months Ended June 30, 2007 Compared to Three Months Ended June 30, 2006.

Revenue

Net revenue for the
three months ended June 30, 2007, increased by $0.4 million, or 4.9% from the same period of 2006. This increase was primarily attributed to the increases in revenue from Nexstar and retransmission compensation.

Revenue from Nexstar was $8.0 million for the three months ended June 30, 2007, compared to $7.8 million for the same period in 2006, an increase of
$0.2 million, or 2.1%. The increase was primarily attributed to increases in the local and national revenue that Nexstar generated from selling all of the advertising of our stations, which in turn increased the revenue we earned from Nexstar
through JSAs. The increase also included revenue generated from the TBA entered into with Nexstar-owned KFTA that did not commence until the third quarter of 2006.



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Compensation from retransmission consent and network affiliation agreements was $1.1 million for the
three months ended June 30, 2007, compared to $0.9 million for the same period in 2006, an increase of $0.2 million, or 27.5%. The increase was primarily due to an increase in the compensation we receive under retransmission consent agreements
which primarily resulted from increases in the number cable and satellite subscribers in our markets.

Operating Expenses

Corporate expenses, related to costs associated with the centralized management of our stations, increased by $19 thousand, or 7.7%, for
the three months ended June 30, 2007 compared to same period in 2006.

Station direct operating expenses, consisting primarily of
news, engineering and programming, net of trade, increased by $0.1 million, or 10.9% for the three months ended June 30, 2007, compared to the same period in 2006. The increase was primarily due to an increases in network affiliate related
fees.

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 $15 thousand, or 0.8%, for the three months ended June 30, 2007 compared to the same period in 2006. These fees increased in 2007 due to the TBA
entered into with Nexstar-owned KFTA that did not commence until the third quarter of 2006.

Amortization of broadcast rights, excluding
barter, was $0.4 million for both the three months ended June 30, 2007 and 2006.

Amortization of intangible assets was $1.3 million
for both the three months ended June 30, 2007 and 2006.

Depreciation of property and equipment for the three months ended
June 30, 2007, decreased by $46 thousand, or 5.3%, compared to the same period in 2006.

Income from Operations

Income from operations was $2.6 million for the three months ended June 30, 2007, compared to $2.4 million for the same period
of 2006, an increase of $0.2 million, or 9.8%. The increase in income from operations for the three months ended June 30, 2007 was primarily attributed to the increase in total net revenue, partially offset by increases in certain operating
costs, as discussed above.

Interest Expense

Interest expense, including amortization of debt financing costs, was $3.1 million for both the three months ended June 30, 2007 and 2006. The constant amount of interest expense was primarily attributed to
continual reductions in the amount outstanding under our Term Loan B during the second half of 2006 and in 2007, offset by higher interest rates incurred in 2007 compared to 2006 under our senior credit facility.

Income Taxes

Income tax
expense was $0.1 million for the three months ended June 30, 2007, compared to $0.2 million for the same period in 2006. The decrease in income taxes was primarily due to a $0.3 million increase in our deferred tax assets resulting from a newly
enacted tax law that decreased our provision for deferred state income taxes in the second quarter of 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. This expense has no impact on our cash flows. Based primarily on our recent history of net
operating losses, we do not consider the realization of our net deferred tax assets to be more likely than not. Accordingly, we have provided a full valuation allowance for net deferred tax assets excluding deferred tax liabilities attributable to
goodwill and indefinite-lived intangible assets. No tax benefit was recorded with respect to the losses for 2007 and 2006, as the utilization of such losses is not likely to be realized in the foreseeable future.

Six Months Ended June 30, 2007 Compared to Six Months Ended June 30, 2006.

Revenue

Net revenue for the
six months ended June 30, 2007, increased by $0.9 million, or 5.4% from the same period of 2006. This increase was primarily attributed to the increases in revenue from Nexstar and retransmission and network compensation.



Revenue from Nexstar was $15.1 million for the six months ended June 30,
2007, compared to $14.8 million for the same period in 2006, an increase of $0.3 million, or 2.4%. The increase was primarily attributed to an increase in the local and national revenue that Nexstar generated from selling all of the advertising of
our stations, which in turn increased the revenue we earned from Nexstar through the JSAs.



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Compensation from retransmission consent and network affiliation agreements was $2.1 million for the six
months ended June 30, 2007, compared to $1.7 million for the same period in 2006, an increase of $0.4 million, or 27.1%. The increase was primarily due to an increase in the compensation we receive under retransmission consent agreements which
primarily resulted from increases in the number 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
20.4% for the six months ended June 30, 2007, compared to the same period in 2006. The increase was primarily attributed to higher compensation costs and audit-related professional fees incurred in 2007 compared to 2006.

Station direct operating expenses, consisting primarily of news, engineering and programming, net of trade, increased by $0.2 million, or 9.2% for the
six months ended June 30, 2007, compared to the same period in 2006. The increase was primarily due to an increases in network affiliate related fees.

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 $30 thousand, or 0.8%, for the six months ended June 30, 2007 compared to the same period in 2006. These fees increased in 2007 due to the TBA entered into with Nexstar-owned KFTA that did not commence until the third quarter of
2006.

Amortization of broadcast rights, excluding barter, was $0.8 million for both the six months ended June 30, 2007 and 2006.

Amortization of intangible assets was $2.7 million for both the six months ended June 30, 2007 and 2006.

Depreciation of property and equipment was $1.7 million for both the six months ended June 30, 2007 and 2006.

Income from Operations

Income
from operations was $4.6 million for the six months ended June 30, 2007, compared to $4.1 million for the same period of 2006, an increase of $0.5 million, or 13.5%. The increase in income from operations for the six months ended June 30,
2007 was primarily attributed to the increase in total net revenue, partially offset by increases in certain operating costs, as discussed above.

Interest Expense

Interest expense, including amortization of debt financing costs, increased by $0.3 million, or
5.7%, for the six months ended June 30, 2007, compared to the same period in 2006. The increase in interest expense was primarily attributed to higher interest rates incurred in 2007, partially offset by a reduction in the amount outstanding
under our senior credit facility during 2007.

Income Taxes

Income taxes were $0.4 million for the six months ended June 30, 2007, compared to $0.6 million for the same period in 2006. The decrease in income
taxes was primarily due to a $0.3 million increase in our deferred tax assets resulting from a newly enacted tax law that decreased our provision for deferred state income taxes in the second quarter of 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. This expense has no impact on our cash flows. Based primarily on our recent history of net operating losses, we do not consider the realization of our net deferred tax assets to be more likely than not. Accordingly, we have provided a full
valuation allowance for net deferred tax assets excluding deferred tax liabilities attributable to goodwill and indefinite-lived intangible assets. No tax benefit was recorded with respect to the losses for 2007 and 2006, 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 9, 2007, Nexstar represented to us that it will continue the various local service agreements under which it provides sales and other services to our television stations thereby
providing financial support to enable us to continue to operate as a going concern. We believe that with Nexstars pledge to continue the local service agreements, our available cash, anticipated cash flow from operations and available
borrowings under our senior 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 2006. In
order to meet future cash needs we may, from time to time, borrow under our available credit



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facility. We will continue to evaluate the best use of our operating cash flow among capital expenditures, acquisitions and debt reduction.

On May 17, 2007, Nexstar Broadcasting Group, Inc. announced that its Board of Directors decided to engage Goldman, Sachs & Co. to assist it
in reviewing strategic alternatives including, but not limited to the sale of Nexstar. On August 3, 2007, in light of the difficult conditions in the financing markets, Nexstar Broadcasting Group, Inc.s Board of Directors, in consultation
with its financial advisor Goldman, Sachs & Co., decided to suspend discussions with prospective acquirers of Nexstar. At this time, it is not possible to determine what, if any, impact this may have on Mission.

Overview

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



|                                                   |  |                           |         |   |                  |   |         |  
|-------------------------------------------------- |  | ------------------------- | ------- | - | ---------------- | - | ------- | -
|                                                   |  | Six Months Ended June 30, |        
|                                                   |  | 2007                      |         |   | 2006             |  
|                                                   |  | (in thousands)            |        
|Net cash provided by operating activities          |  | $                         | 739     |   |                  | $ | 1,350   |  
|Net cash used for investing activities             |  |                           | (1,668  | ) |                  |   | (637    | )
|Net cash used for financing activities             |  |                           | (863    | ) |                  |   | (863    | )
|                                                   |  |                           |         |   |                  |   |         |  
|Net decrease in cash and cash equivalents          |  | $                         | (1,792  | ) |                  | $ | (150    | )
|                                                   |  |                           |         |   |                  |   |         |  
|Cash paid for interest                             |  | $                         | 6,217   |   |                  | $ | 5,851   |  
|Cash paid for income taxes, net                    |  | $                         |        |   |                  | $ |        |  
|                                                   |  |                          
|                                                   |  | June 30,2007              |         |   | December 31,2006 |  
|                                                   |  | (in thousands)            |        
|Cash and cash equivalents                          |  | $                         | 1,785   |   |                  | $ | 3,577   |  
|Long-term debt including current portion           |  | $                         | 169,678 |   |                  | $ | 170,541 |  
|Unused commitments under senior credit facility(1) |  | $                         | 15,000  |   |                  | $ | 15,000  |  

---

|(1) | As of June 30, 2007, all $15.0 million of total unused commitments under Missions credit facility were
available for borrowing.
|--- | --------------------------------------------------------------------------------------------------------------------------------

Cash Flows  Operating Activities

The comparative net cash flows provided by operating activities decreased by $0.6 million during the six months ended June 30, 2007 compared to the
same period in 2006. The decrease was primarily due to the timing of payments made for accounts payable and accrued expenses, partially offset by the timing of collections of accounts receivable and an increase in the revenue we earn from Nexstar
through JSAs.

Cash paid for interest increased by $0.4 million during the six months ended June 30, 2007 compared to the same period
in 2006 due to higher interest rates incurred in 2007 under our senior credit facility, partially offset by a reduction in the amount outstanding under our senior credit facility during 2007.

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 $1.0 million during the six months ended June 30, 2007 compared to the same period in 2006. Cash flows from investing activities consisted
of cash used for capital additions and acquisition-related payments.

Capital expenditures were $1.3 million for the six months ended
June 30, 2007, compared to $0.6 million for the same period in 2006. The increase was primarily attributed to digital conversion expenditures, which increased from $0.6 million for the six months ended June 30, 2006 to $1.3 million for the
same period in 2007.

Acquisition-related payments for the six months ended June 30, 2007 consisted of a $0.4 million down payment for
our pending 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
$0.9 million for both the six months ended June 30, 2007 and 2006.

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 June 30, 2007, we had debt of $169.7 million, which represented 219.6% 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 June 30, 2007, all $15.0 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
June 30, 2007:



|                       |  |       |         |                  |   |                |  |           |       |            |   |       |  |   |        
|---------------------- |  | ----- | ------- | ---------------- | - | -------------- |  | --------- | ----- | ---------- | - | ----- |  | - | -------
|                       |  | Total |         | Remainderof 2007 |   | 2008-2009      |  | 2010-2011 |       | Thereafter
|                       |  |       |         |                  |   | (in thousands) |  |           |       |           
|Senior credit facility |  | $     | 169,678 |                  | $ | 864            |  | $         | 3,454 |            | $ | 3,454 |  | $ | 161,906

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 June 30, 2007, Nexstar had a maximum commitment of $243.2 million under its bank credit facility, of which $194.7 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.

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 June 30, 2007, Missions stations KOLR, WUTR, WTVO and WYOU are broadcasting with full-power DTV signals. The Companys remaining stations are broadcasting low-power DTV signals. The FCC
has granted us an extension of time until November 18, 2007 to begin broadcasting full-power digital television signals for our remaining stations. We will be required to request a further extension of time to construct full-power DTV
facilities for our stations which do not initiate full-power



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DTV broadcasts by November 18, 2007. If the FCC denies this further request for extension of time, the stations may lose interference protection for
their signals outside their low-power coverage area.

DTV conversion expenditures were $1.3 million and $0.6 million, respectively, for the
six months ended June 30, 2007 and 2006. We estimate that it will require an average capital expenditure of approximately $1.5 million per station (for 9 stations as of June 30, 2007) 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 Transactions

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.

On June 27, 2007, we entered into a purchase agreement to acquire substantially all the assets of KTVE, the NBC affiliate serving the Monroe,
Louisiana/El Dorado, Arkansas market for $7.7 million in cash. Pursuant to the terms of the agreement, we made a down payment of $0.4 million against the purchase price in June 2007. We intend to finance this acquisition through borrowings under our
senior secured credit facility.

No Off-Balance Sheet Arrangements

At June 30, 2007, 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 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, 2006. Management believes that as of June 30, 2007 there has been no material change to this information.

Recent Accounting Pronouncements

Refer to Note 2 of our condensed financial statements in Part I, Item 1 of this
Quarterly Report on Form 10-Q for a discussion of our adoption of Financial Accounting Standards Board (FASB) Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement
No. 109 (FIN No. 48) and other 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.



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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, 2006 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 borrowings at June 30, 2007 under our senior credit facility bear interest at 7.11%, 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 June 30, 2007 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 |        | No change tointerest rate |   | Interest rate increase
|                       |  | 100 BPS                |        | 50 BPS                    |   |                        | 50 BPS |   | 100 BPS
|                       |  | (in thousands)        
|Senior credit facility |  | $                      | 10,367 |                           | $ | 11,216                 |        | $ | 12,064  |  | $ | 12,912 |  | $ | 13,761

Impact of Inflation

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



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

(a) Evaluation of
Disclosure Controls and Procedures. Mission carried out an evaluation as of the end of the period covered in this report, under the supervision and with the participation of Missions management, including Missions president and
treasurer (who is Missions principal executive officer and principal financial and accounting officer), of the effectiveness of the design and operation of Missions disclosure controls and procedures pursuant to Exchange Act Rule
13a-15(d) and 15d-15(e) under the Securities Exchange Act of 1934. Based upon that evaluation, Missions president and treasurer (its principal executive officer and principal financial and accounting officer) concluded that Missions
disclosure controls and procedures (1) were effective in timely alerting him to material information relating to Mission required to be included in Missions periodic SEC filings and (2) were adequate to ensure that information
required to be disclosed by Mission in the reports filed or submitted by Mission under the Securities Exchange Act of 1934 is recorded, processed and summarized and reported within the time periods specified in the SECs rules and forms.

(b) 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 identified in connection with the evaluation described in paragraph (a) above that have materially affected or are reasonably likely to materially
affect Missions 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, 2006.



|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                                                                                                                                                                                                                                                                                                                                          
|2.1         |  | Asset Purchase Agreement, dated as of June 27, 2007 (entered into by Mission Broadcasting, Inc. on June 27, 2007), by, between and among Mission Broadcasting, Inc. and Piedmont Television
Holdings LLC, Piedmont Television Communications LLC, Piedmont Television of Monroe/El Dorado LLC and Piedmont Television of Monroe/El Dorado License LLC.*
|            | 
|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: August 8, 2007



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