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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549



---



FORM 10-Q



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



for the fiscal quarter ended March 31, 2002



| ̈ |  | 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: 333-62916-03



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BASTET BROADCASTING, INC.

(Exact name of registrant as specified in its charter)



|Delaware                                                     |  | 31-1537569                                          
|------------------------------------------------------------ |  | ----------------------------------------------------
|(State of Organization or Incorporation)                     |  | (IRS Employer Identification No.)                   
|                                                             |  |                                                     
|409 Lackawanna Avenue Scranton, PA 18503                     |  | (570) 961-2222                                      
|(Address of Principal Executive Offices, including Zip Code) |  | (Registrants Telephone Number, Including Area Code)



Indicate
by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that it was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes x No ̈



Indicate by check mark whether the Registrant is
an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes ̈No x



As of March 31, 2002, Bastet Broadcasting, Inc. had one shareholder, David S. Smith. Mr. Smith had 10 shares of common stock outstanding.



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##### Table of Contents



TABLE OF CONTENTS



|              |  |                                                                                                                                            |  | Page
|------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------ |  | ----
|PART I        |  |                                                                                                                                            |  |     
|ITEM 1.       |  | Financial Statements (Unaudited)                                                                                                           |  |    
|              |  | Balance SheetsDecember 31, 2001 and March 31, 2002                                                                                        |  | 1   
|              |  | Statements of Operations for the three months ended March 31, 2001 and 2002                                                                |  | 2   
|              |  | Statements of Changes in Shareholders Deficit for the year ended December 31, 2001 and for the three months ended March 31, 2001 and 2002 |  | 3   
|              |  | Statements of Cash Flows for the three months ended March 31, 2001 and 2002                                                                |  | 4   
|              |  | Notes to Financial Statements                                                                                                              |  | 5   
|ITEM 2.       |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                                      |  | 8   
|ITEM 3.       |  | Quantitative and Qualitative Disclosures about Market Risk                                                                                 |  | 13  
|              |  |                                                                                                                                            |  |     
|PART II       |  |                                                                                                                                            |  |     
|ITEM 1.       |  | Legal Proceedings                                                                                                                          |  | 14  
|ITEM 2.       |  | Changes in Securities and Use of Proceeds                                                                                                  |  | 14  
|ITEM 3.       |  | Defaults Upon Senior Securities                                                                                                            |  | 14  
|ITEM 4.       |  | Submission of Matters to a Vote of Security Holders                                                                                        |  | 14  
|ITEM 5.       |  | Other Information                                                                                                                          |  | 14  
|ITEM 6.       |  | Exhibits and Reports on Form 8-K                                                                                                           |  | 14  
|SIGNATURES    |  | 15                                                                                                                                        
|CERTIFICATION |  | 16                                                                                                                                        



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BASTET
BROADCASTING, INC.



BALANCE SHEETS



|                                                                                                                                                   |  | December 31, 2001      |         |   | March 31, 2002 |  
|-------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------- | ------- | - | -------------- | -
|                                                                                                                                                   |  | (Unaudited)            |        
|                                                                                                                                                   |  | (dollars in thousands) |        
|Assets                                                                                                                                             |  |                        |         |   |                |  
|Current assets:                                                                                                                                    |  |                        |         |   |                |  
|Cash and cash equivalents                                                                                                                          |  | $                      | 544     |   |                | $
|Accounts receivable, net of allowance for doubtful accounts of $54 and $28,
respectively                                                           |  |                        | 1,608   |   |                |  
|Current portion of broadcast rights                                                                                                                |  |                        | 1,161   |   |                |  
|Due from Mission Broadcasting of Wichita Falls, Inc.                                                                                               |  |                        |       |   |                |  
|Prepaid expenses and other current assets                                                                                                          |  |                        | 20      |   |                |  
|                                                                                                                                                   |  |                        |         |   |                |  
|Total current assets                                                                                                                               |  |                        | 3,333   |   |                |  
|Property and equipment, net                                                                                                                        |  |                        | 2,328   |   |                |  
|Broadcast rights                                                                                                                                   |  |                        | 922     |   |                |  
|Other noncurrent assets                                                                                                                            |  |                        | 15      |   |                |  
|Goodwill, net                                                                                                                                      |  |                        | 4,056   |   |                |  
|Intangible assets, net                                                                                                                             |  |                        | 9,626   |   |                |  
|                                                                                                                                                   |  |                        |         |   |                |  
|Total assets                                                                                                                                       |  | $                      | 20,280  |   |                | $
|                                                                                                                                                   |  |                        |         |   |                |  
|Liabilities and Shareholders Deficit                                                                                                              |  |                        |         |   |                |  
|Current liabilities:                                                                                                                               |  |                        |         |   |                |  
|Current portion of broadcast rights payable                                                                                                        |  | $                      | 1,120   |   |                | $
|Accounts payable                                                                                                                                   |  |                        | 65      |   |                |  
|Accrued expenses                                                                                                                                   |  |                        | 158     |   |                |  
|Interest payable                                                                                                                                   |  |                        | 262     |   |                |  
|Due to Nexstar Finance, L.L.C.                                                                                                                     |  |                        | 5,239   |   |                |  
|                                                                                                                                                   |  |                        |         |   |                |  
|Total current liabilities                                                                                                                          |  |                        | 6,844   |   |                |  
|Debt                                                                                                                                               |  |                        | 46,143  |   |                |  
|Broadcast rights payable                                                                                                                           |  |                        | 965     |   |                |  
|                                                                                                                                                   |  |                        |         |   |                |  
|Total liabilities                                                                                                                                  |  |                        | 53,952  |   |                |  
|Commitments and contingencies (Note 8)                                                                                                             |  |                        |         |   |                |  
|Shareholders deficit:                                                                                                                             |  |                        |         |   |                |  
|Common stock, $1 dollar par value; 1,000 shares authorized; 10 shares issued and
outstanding at December 31, 2001 and March 31, 2002, respectively |  |                        |        |   |                |  
|Subscription receivable                                                                                                                            |  |                        |        |   |                |  
|In-substance distribution of proceeds from credit facility that are reflected in the
financial statements of each of the two issuers               |  |                        | (18,147 | ) |                |  
|Accumulated deficit                                                                                                                                |  |                        | (15,525 | ) |                |  
|                                                                                                                                                   |  |                        |         |   |                |  
|Total shareholders deficit                                                                                                                        |  |                        | (33,672 | ) |                |  
|                                                                                                                                                   |  |                        |         |   |                |  
|Total liabilities and shareholders deficit                                                                                                        |  | $                      | 20,280  |   |                | $
|                                                                                                                                                   |  |                        |         |   |                |  



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



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BASTET BROADCASTING, INC.



STATEMENTS OF OPERATIONS



|                                                                                                                 |  | Three Months Ended March 31, |       
|---------------------------------------------------------------------------------------------------------------- |  | ---------------------------- | ------
|                                                                                                                 |  | 2001                         |       
|                                                                                                                 |  | (Unaudited)                  |       
|                                                                                                                 |  | (dollars in thousands)       |       
|Broadcast revenue (excluding trade and barter)                                                                   |  | $                            | 1,691 
|Less: commissions                                                                                                |  |                              | (255  
|                                                                                                                 |  |                              |       
|Net broadcast revenue (excluding trade and barter)                                                               |  |                              | 1,436 
|Trade and barter revenue                                                                                         |  |                              | 189   
|Revenue from Nexstar Finance, L.L.C.                                                                             |  |                              | 39    
|                                                                                                                 |  |                              |       
|Total net revenue                                                                                                |  |                              | 1,664 
|                                                                                                                 |  |                              |       
|Operating expenses:                                                                                              |  |                              |       
|Direct operating expenses (exclusive of depreciation and amortization shown separately
below)                    |  |                              | 181   
|Selling, general and administrative expenses (exclusive of depreciation and amortization
shown separately below) |  |                              | 466   
|Selling, general and administrative expenses paid to Nexstar Finance,
L.L.C.                                     |  |                              | 998   
|Amortization of broadcast rights                                                                                 |  |                              | 306   
|Amortization of intangible assets                                                                                |  |                              | 223   
|Depreciation                                                                                                     |  |                              | 233   
|                                                                                                                 |  |                              |       
|Total operating expenses                                                                                         |  |                              | 2,407 
|                                                                                                                 |  |                              |       
|Loss from operations                                                                                             |  |                              | (743  
|Interest expense, including amortization of debt financing costs                                                 |  |                              | (1,273
|Interest income                                                                                                  |  |                              | 3     
|Other expenses, net                                                                                              |  |                              |      
|                                                                                                                 |  |                              |       
|Loss before income taxes                                                                                         |  |                              | (2,013
|Income tax expense                                                                                               |  |                              | (2    
|                                                                                                                 |  |                              |       
|Net loss                                                                                                         |  | $                            | (2,015
|                                                                                                                 |  |                              |       



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



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BASTET
BROADCASTING, INC.



STATEMENTS OF
CHANGES IN SHAREHOLDERS DEFICIT



|                                               |  | Common Stock |  | Subscription |   | Accumulated |   |         | In-substance Distribution of Proceeds from Credit Facility that are
Reflected in the Financial Statementsof Each of the Two |   |                        | TotalShareholders | 
|---------------------------------------------- |  | ------------ |  | ------------ | - | ----------- | - | ------- | --------------------------------------------------------------------------------------------------------------------------- | - | ---------------------- | ------------------ | 
|                                               |  | Shares       |  | Par Value    |   | Receivable  |   | Deficit |                                                                                                                             |   | Issuers                |                    | 
|                                               |  |              |  |              |   |             |   |         |                                                                                                                             |   | (dollars in thousands) |                    | 
|Balance at December 31, 2000 (Unaudited)       |  | 10           |  | $            |  |             | $ |        |                                                                                                                             | $ | (10,092                | )                  | 
|Net loss                                       |  |             |  |              |  |             |   |        |                                                                                                                             |   | (2,015                 | )                  | 
|In-substance contribution to equity (Note 5)   |  |             |  |              |  |             |   |        |                                                                                                                             |   |                       |                    | 
|                                               |  |              |  |              |   |             |   |         |                                                                                                                             |   |                        |                    | 
|Balance at March 31, 2001 (Unaudited)          |  | 10           |  |              |  |             |   |        |                                                                                                                             |   | (12,107                | )                  | 
|Net loss                                       |  |             |  |              |  |             |   |        |                                                                                                                             |   | (3,418                 | )                  | 
|In-substance distribution from equity (Note 5) |  |             |  |              |  |             |   |        |                                                                                                                             |   |                       |                    | 
|                                               |  |              |  |              |   |             |   |         |                                                                                                                             |   |                        |                    | 
|Balance at December 31, 2001 (Unaudited)       |  | 10           |  |              |  |             |   |        |                                                                                                                             |   | (15,525                | )                  | 
|Net loss                                       |  |             |  |              |  |             |   |        |                                                                                                                             |   | (1,023                 | )                  | 
|In-substance contribution to equity (Note 5)   |  |             |  |              |  |             |   |        |                                                                                                                             |   |                       |                    | 
|                                               |  |              |  |              |   |             |   |         |                                                                                                                             |   |                        |                    | 
|Balance at March 31, 2002 (Unaudited)          |  | 10           |  | $            |  |             | $ |        |                                                                                                                             | $ | (16,548                | )                  | 
|                                               |  |              |  |              |   |             |   |         |                                                                                                                             |   |                        |                    | 



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



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BASTET BROADCASTING, INC.



STATEMENTS OF CASH FLOWS



|                                                                                                                                     |  | Three Months Ended March 31, |        
|------------------------------------------------------------------------------------------------------------------------------------ |  | ---------------------------- | -------
|                                                                                                                                     |  | 2001                         |        
|                                                                                                                                     |  | (Unaudited)                  |        
|                                                                                                                                     |  | (dollars in thousands)       |        
|Cash flows from operating activities:                                                                                                |  |                              |        
|Net loss                                                                                                                             |  | $                            | (2,015 
|Adjustments to reconcile net loss to net cash provided by (used for) operating
activities:                                           |  |                              |        
|Depreciation of property and equipment                                                                                               |  |                              | 233    
|Amortization of intangible assets                                                                                                    |  |                              | 223    
|Amortization of debt financing costs                                                                                                 |  |                              | 348    
|Amortization of broadcast rights, excluding barter                                                                                   |  |                              | 160    
|Payments for broadcast rights                                                                                                        |  |                              | (146   
|Loss on asset disposal, net                                                                                                          |  |                              |       
|In-substance contribution of proceeds from credit facility that are reflected in the
financial statements of each of the two issuers |  |                              | 396    
|Changes in assets and liabilities:                                                                                                   |  |                              |        
|Decrease in accounts receivable                                                                                                      |  |                              | 201    
|(Increase) decrease in prepaid expenses and other current assets                                                                     |  |                              | (14    
|(Decrease) increase in accounts payable and accrued expenses                                                                         |  |                              | (170   
|Increase (decrease) in interest payable                                                                                              |  |                              | 113    
|Increase in due from Mission Broadcasting of Wichita Falls, Inc.                                                                     |  |                              |       
|Increase in amounts due to Nexstar Finance, L.L.C.                                                                                   |  |                              | 1,018  
|                                                                                                                                     |  |                              |        
|Net cash provided by (used for) operating activities                                                                                 |  |                              | 347    
|                                                                                                                                     |  |                              |        
|Cash flows from investing activities:                                                                                                |  |                              |        
|Additions to property and equipment                                                                                                  |  |                              | (313   
|                                                                                                                                     |  |                              |        
|Net cash used for investing activities                                                                                               |  |                              | (313   
|                                                                                                                                     |  |                              |        
|Cash flows from financing activities:                                                                                                |  |                              |        
|Proceeds from debt issuance                                                                                                          |  |                              | 23,887 
|Repayment of loans                                                                                                                   |  |                              | (23,247
|Payments for debt financing costs                                                                                                    |  |                              | (722   
|                                                                                                                                     |  |                              |        
|Net cash used for financing activities                                                                                               |  |                              | (82    
|                                                                                                                                     |  |                              |        
|Net decrease in cash and cash equivalents                                                                                            |  |                              | (48    
|Cash and cash equivalents at beginning of year                                                                                       |  |                              | 144    
|                                                                                                                                     |  |                              |        
|Cash and cash equivalents at end of period                                                                                           |  | $                            | 96     
|                                                                                                                                     |  |                              |        
|                                                                                                                                    
|Noncash financing activities:                                                                                                        |  |                              |        
|In-substance distribution of proceeds from credit facility that are reflected in the
financial statements of each of the two issuers |  | $                            | (69    
|                                                                                                                                     |  |                              |        



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



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BASTET
BROADCASTING, INC.



NOTES TO FINANCIAL
STATEMENTS



1.    Organization and
Business Operations



Bastet Broadcasting,
Inc. (the Company) was formed in 1997 to own and operate television stations in small- and medium-sized markets across the United States. The Company completed its first acquisition in January 1998 with the purchase of WYOU, the CBS
affiliate in Wilkes Barre-Scranton, Pennsylvania. The Company subsequently purchased WFXP, the Fox affiliate in Erie, Pennsylvania in November 1998. Through various local service agreements with subsidiaries of Nexstar Finance, L.L.C.
(Nexstar), Bastet is provided with various management, sales or other services. Bastet has a time brokerage agreement for WFXP with Nexstar, which allows Nexstar to program most of the stations broadcast time, sell the
stations advertising time and retain the advertising revenue in exchange for monthly payments to us. Bastet has a shared services agreement for WYOU with Nexstar. Pursuant to the shared services agreement, Nexstar provides news production and
technical maintenance, among other services, but does not provide the services of senior management personnel, programming or sales.



In addition to providing the Company with certain services, Nexstar guarantees the debt of the Company. The Company guarantees certain
indebtedness of Nexstar (See Note 5 and Note 8).



The shareholder of the Company has granted Nexstar purchase options on each station to acquire its assets and liabilities for consideration equal to the greater of (1) seven times the stations broadcast cash flow less the
indebtedness as defined in the option agreement or (2) the amount of its indebtedness. These option agreements are freely exercisable or assignable by Nexstar without consent or approval by the Companys shareholder.



As a result of the service arrangements, the debt guarantees
and the option agreements, Nexstar is deemed to have a controlling financial interest in the Company under U.S. generally accepted accounting principles (US GAAP) while complying with the FCCs rules regarding ownership limits in
television markets. The Company retains ultimate control over each station. Such control includes, but is not limited to, retaining control over policies, programming, advertisements and operations of the stations.



2.    Summary of Significant Accounting Policies



Basis of Presentation



The financial statements as of March 31,
2002 and for the three months ended March 31, 2002 and 2001 are unaudited. However, in the opinion of management, such statements include all adjustments (consisting solely of normal recurring adjustments) necessary for the fair statement of the
financial information included herein in accordance with US GAAP and pursuant to the rules and regulations of the Securities and Exchange Commission. The preparation of financial statements in conformity with US GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues 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. The 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 year ended December 31, 2001. The balance sheet at December 31, 2001 has been derived from the audited financial statements at that date, but does not include all the information and footnotes required by generally
accepted accounting principles for complete financial statements.



Goodwill and Other Intangible Assets



Intangible assets include FCC licenses, network affiliation agreements, and goodwill. On January 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 142, Goodwill and
Other Intangible Assets (SFAS No. 142). SFAS No. 142 requires companies to cease amortizing certain intangible assets including goodwill and FCC licenses. The amortization of existing goodwill and FCC licenses resulting from
acquisitions completed prior to June 30, 2001 ceased on December 31, 2001. Any goodwill and FCC licenses resulting from acquisitions completed after June 30, 2001 were not and will not be amortized. SFAS No. 142 established a new method of testing
goodwill and FCC licenses for impairment on an annual basis or on an interim basis if an event occurs or circumstances change which would reduce the fair value of a reporting unit below its carrying value.



SFAS No. 142 requires that
goodwill be tested for impairment using a two-step process. The first step is to identify a potential impairment and, in transition, this step must be measured as of the beginning of the fiscal year. However, a company has six months from the date
of adoption to complete the first step. The Company will complete that first step of the goodwill impairment test during the second quarter of 2002. The second step of the goodwill impairment test measures the amount of the impairment loss (measured
as of the beginning of the year of adoption), if any, and must be completed by the end of the Companys fiscal year. The Company completed the first step of the impairment test during the quarter ended June 30, 2002 using the discounted cash
flow method to estimate the fair value of its stations. The valuation assumptions used in the discounted cash flow model reflected anticipated future operating results and cash flow based on our business plan. The test resulted in no impairment
being identified. During the year ended December 31, 2001, the Company incurred goodwill amortization expense of $0.1 million. FCC licenses have been tested for impairment using a one-step process, which compares the fair value to the carrying
amount of the asset as of January 1, 2002. The fair value of each station was determined using the discounted cash flow valuation method that excludes network compensation payments, assuming a hypothetical start-up whose only asset is the FCC
license. The test resulted in no impairment being identified. The following table presents certain financial information assuming that amortization expense associated with goodwill and FCC licenses was excluded for all periods presented:



|                                                           |  | Three Months Ended March 31,      |       
|---------------------------------------------------------- |  | --------------------------------- | ------
|                                                           |  | 2001                              |       
|                                                           |  | (Unaudited)(dollars in thousands) |       
|Net loss                                                   |  | $                                 | (2,015
|Add:                                                       |  |                                   |       
|Goodwill amortization, net of tax                          |  |                                   | 29    
|Indefinite-lived intangible asset amortization, net of tax |  |                                   | 71    
|                                                           |  |                                   |       
|Net lossas adjusted                                       |  | $                                 | (1,915
|                                                           |  |                                   |       



Long-lived Assets



On January 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (SFAS No. 144). SFAS No. 144 supersedes SFAS No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of and the accounting and reporting provisions relating to the disposal of a segment of a business described in Accounting Principles Board
Opinion No. 30. The adoption did not have a material impact on the Companys financial statements.



3.    Related Party Transactions



The Company is a party to a management agreement with its shareholder, David S. Smith. The Company recognized $11 thousand in expense for
each of the three month periods ended March 31, 2001 and 2002.



The Company also has various agreements in place with Nexstar for management, sales and other services. The impact of those various agreements is noted on the face of the financial statements.



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4.    Intangible Assets and Goodwill



|                                                   |  | Estimated useful life (years) |  | December 31, 2001                 |        |   | March 31, 2002 |  
|-------------------------------------------------- |  | ----------------------------- |  | --------------------------------- | ------ | - | -------------- | -
|                                                   |  |                               |  | (Unaudited)(dollars in thousands) |       
|Network affiliation agreements                     |  | 15                            |  | $                                 | 5,341  |   |                | $
|FCC licenses                                       |  | indefinite                    |  |                                   | 5,785  |   |                |  
|Debt financing costs                               |  | term of debt                  |  |                                   | 1,473  |   |                |  
|Other intangible assets                            |  | 1-15                          |  |                                   | 221    |   |                |  
|                                                   |  |                               |  |                                   |        |   |                |  
|                                                   |  |                               |  |                                   | 12,820 |   |                |  
|Less: accumulated amortization                     |  |                               |  |                                   | (3,194 | ) |                |  
|                                                   |  |                               |  |                                   |        |   |                |  
|Intangible assets, net of accumulated amortization |  |                               |  | $                                 | 9,626  |   |                | $
|                                                   |  |                               |  |                                   |        |   |                |  
|Goodwill                                           |  | indefinite                    |  |                                   | 4,056  |   |                |  
|                                                   |  |                               |  |                                   |        |   |                |  
|Intangible assets and goodwill                     |  |                               |  | $                                 | 13,682 |   |                | $
|                                                   |  |                               |  |                                   |        |   |                |  



Total
amortization expense from definite-lived intangible assets (excluding debt financing costs) for the year ended December 31, 2001 and the three months ended March 31, 2002 was $0.4 million and $0.1 million, respectively. The estimated useful
life of network affiliations contemplates renewals of the underlying agreements based on the Companys historical ability to renew such agreements without significant costs or modifications to the conditions from which the value of the
affiliation was derived. These renewals can result in estimated useful lives of individual affiliations ranging from 12 to 20 years. Management has determined that 15 years is a resonable estimate within the range of such estimated useful lives. The
carrying value of indefinite-lived intangible assets, excluding goodwill, at December 31, 2001 and March 31, 2002 was $4.3 million. The use of an indefinite life for FCC licenses contemplates the Companys historical ability to renew their
licenses, that such renewals generally may be obtained indefinitely and at little cost, and that the technology used in broadcasting is not expected to be replaced in the foreseeable future. Therefore, cash flows derived from the FCC licenses are
expected to continue indefinitely. The following table represents the Companys estimate of amortization expense for each of the five succeeding fiscal years for definite-lived intangible assets, including debt financing costs, recorded as of
December 31, 2001 (dollars in thousands):





|Year Ending December 31, |  |       
|------------------------ |  | ------
|2002                     |  | $  512
|2003                     |  | 512   
|2004                     |  | 512   
|2005                     |  | 502   
|2006                     |  | 492   





5.    Debt



Long-term debt consists of the following:



|                             |  | December 31, 2001                 |        | March 31, 2002
|---------------------------- |  | --------------------------------- | ------ | --------------
|                             |  | (Unaudited)(dollars in thousands)
|Revolving credit facility(1) |  | $                                 | 46,143 |               

---

|(1) |  | The indebtedness includes borrowings by Mission Broadcasting of Wichita Falls, Inc., an affiliated company and a co-borrower of the facility.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------



The Bastet/Mission Senior
Secured Credit Facility



On January 12,
2001, the Company and Mission Broadcasting of Wichita Falls, Inc., an affiliated company owned 100% by David S. Smith, entered into a credit agreement (the Bastet/Mission credit facility) with a group of commercial banks. The terms
provided for the banks to make revolving loans to the Company and Mission Broadcasting of Wichita Falls, Inc. not to exceed the

aggregate
commitment of $43.0 million.



On November 14,
2001, the credit facility was amended to increase the revolving facility to $58.0 million and to include Mission Broadcasting of Joplin, Inc. as a borrower. Each party is jointly and severally liable for the outstanding amount of the loan. Nexstar
is a guarantor of the credit facility. Interest rates associated with the credit facility are based, at the option of both the borrowers, on the prevailing prime rate plus an applicable margin or the LIBOR rate plus an applicable margin, as defined
(ranging from 5.41% to 5.54% at March 31, 2002). Interest is fixed for a period ranging from one month to twelve months, depending on availability of the interest basis selected, except if the borrowers select a prime-based loan, in which case the
interest rate will fluctuate during the period as the prime rate fluctuates. Interest is payable periodically based on the type of interest rate selected. In addition, the borrowers are required to pay quarterly commitment fees based on the combined
leverage ratio of Nexstar and all parties to the Bastet/Mission credit agreement for that particular quarter on the unused portion of the Bastet/Mission credit facility loan commitment. The Bastet/Mission credit facility is due and payable on the
maturity date, January 12, 2007.



Based on
borrowing rates currently available to the Company for bank loans with similar terms and average maturities, the fair value of the Companys credit facility approximates carrying value.



The parties of the Bastet/Mission credit facility guarantee
the senior credit facilities of Nexstar, which have a maximum commitment of $149.0 million. As of March 31, 2002, Nexstar had $84.5 million outstanding. Nexstar and the parties to the Bastet/Mission credit facility were in compliance with all
covenants at March 31, 2002.



As described above,
the Company and Mission Broadcasting of Wichita Falls, Inc. (collectively, the Affiliates), each of which have 100% common ownership, are parties to the Bastet/Mission credit facility. The entire amount of the indebtedness, deferred
financing costs and associated interest expense are reflected in the Companys financial statements since all of the Affiliates are jointly and severally liable for this debt. Proceeds from or payments on borrowings are reflected as
in-substance distributions or contributions in shareholders deficit. The Company has accrued interest on the outstanding balance of the indebtedness. When one of the other borrowers makes an interest payment, the Company reduces accrued
interest payable and records an in-substance contribution to equity.



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Debt
Financing Costs



In conjunction with the
refinancing of the credit facility during 2001, the Company expensed $0.3 million, related to certain debt financing costs. The amount, net of tax benefit, is included in interest expense pursuant to adoption of SFAS No. 145.



6.    Common Stock



The Company is 100% owned and controlled by one shareholder,
David S. Smith. As of March 31, 2002, the Company has authorized 1,000 shares of common stock. There are 10 shares of stock outstanding with a $1 dollar par value per share. Each share of common stock is entitled to one vote. The holders of common
stock are also entitled to receive dividends when and if declared by the Board of Directors, subject to the preferential right of holders of then outstanding preferred stock.



7.    Income Taxes



The Companys income tax expense for the three months ended March 31, 2002 was $11 thousand, compared to
$2 thousand for the three months ended March 31, 2001. The Companys effective tax rate benefit was less than 1% for the three months ended March 31, 2002 and 0% for the three months ended March 31, 2001. There were no significant differences
between the statutory rates and the effective rates.



8.    Commitments and Contingencies



From time to time, the Company is involved with claims that arise out of the normal course of business. In the opinion of management, the ultimate liability with respect to these claims will not have a
material adverse effect on the financial statements of the Company.



Guarantor of Senior Subordinated Notes



The Company is a guarantor of Nexstars $160.0 million 12.0% Senior Subordinated Notes (the Notes). The Notes mature on April 1, 2008. Interest is payable every six months in arrears
on April 1 and October 1. The Notes are general unsecured senior subordinated obligations, subordinated to all of the Companys and Nexstars senior debt.



9.    Recently Issued Accounting Standards



In July 2001, the FASB issued SFAS No. 141, Business
Combination, which prospectively prohibits the pooling of interest method of accounting for business combinations initiated after June 30, 2001.



In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13,
and Technical Corrections (SFAS No. 145), which is effective for fiscal years beginning after May 15, 2002. SFAS No. 145 rescinds SFAS No. 4 and SFAS No. 64, which addressed the accounting for gains and losses from extinguishment
of debt. SFAS No. 145 amends SFAS No. 13 to require that certain lease modifications that have economic effects similar to sale-leaseback transactions be accounted for in the same manner as sale-leaseback transactions. SFAS No. 145 also makes
technical corrections to certain existing pronouncements that are not substantive in nature. Bastet adopted SFAS No. 145 for the year ended December 31, 2002 and as a result has reclassified $0.3 million of extraordinary loss from refinancing of
credit facility to interest expense for the year ended December 31, 2001.



10.    Subsequent Events



Mission Broadcasting, Inc. (Mission), formerly known as Mission Broadcasting of Wichita Falls, Inc. completed a merger with Bastet on September 30, 2002. Bastet and Mission were separate entities, 100% owned by
the same shareholder at the beginning of fiscal year 2002 and during fiscal year 2001 and 2000.



In 2001 and 2002, Mission entered into the following transactions: On December 31, 2001, Mission Broadcasting of Joplin, Inc. (a subsidiary of Mission Broadcasting of Wichita Falls, Inc.) entered into
a time brokerage agreement (TBA) with GOCOM Broadcasting of Joplin, L.L.C., the current owner of KODE. In September 2002, Mission Broadcasting of Joplin, Inc. purchased substantially all of the assets of the station for $14.0 million.
Pursuant to the terms of the purchase agreement, Mission Broadcasting of Joplin, Inc. has made a down payment of $6.0 million against the purchase price, which is included in other noncurrent assets on the balance sheet. Mission Broadcasting of
Joplin, Inc. made TBA payments of $35 thousand per month to GOCOM Broadcasting of Joplin, L.L.C. through September 2002.



Mission entered into a shared services agreement (SSA) with KSNF, a Nexstar-owned station in Joplin, Missouri, on April 1,
2002. As a result of the SSA with KSNF and the purchase of KODE, Mission was able to reduce overhead costs associated with operations at KODE. Based on the expectation of the cost reductions through the SSA, Mission purchased KODE for an amount
which resulted in the recognition of $0.4 million of goodwill.



On December 13, 2002, Mission entered into a local marketing agreement with a subsidiary of LIN Television Corporation, the current owner of KRBC and KACB which are located in Abilene and San Angelo, Texas, pending the sale of the
stations to Mission. The local marketing agreement commenced on January 1, 2003. Following FCC consent to the transaction, Mission will purchase substantially all of the assets of the stations for $10.0 million. Pursuant to the terms of the purchase
agreement, Mission made a down payment of $1.5 million against the purchase price in December 2002, which has been included in noncurrent assets as of December 31, 2002.



On February 13, 2003, Mission and Nexstar obtained new senior credit
facilities. The facilities consist of a $185.0 million term loan (Nexstar $130.0 million and Mission $55.0 million) and an $80.0 million revolver (Nexstar $50.0 million and Mission $30.0 million). Mission used the proceeds from its facility to
refinance its existing senior credit facility, pay related debt financing costs and provide additional working capital. Financial covenants under the new senior credit facilities include a consolidated total leverage ratio of 7.25 times the last
twelve months operating cash flow (as defined in the credit agreement) through March 30, 2004, a consolidated senior leverage ratio of 4.25 times the last twelve months operating cash through June 29, 2004 and a consolidated fixed charge coverage
ratio of 1.10 to 1.00 through September 29, 2004. The term loans amortize at 1% annually in years 2004 through 2009, with the remaining 94% due in 2010. The outstanding principal amount on the revolving loans mature on December 31, 2009. As of May
9, 2003, Mission had drawn $3.1 million on its revolver. The refinancing of the existing senior credit facility resulted in a write-off for Mission, during the first quarter of 2003, of $1.1 million of debt financing costs that were capitalized at
December 31, 2002.



On May 8, 2003, Mission
entered into a TBA with Bahakel Communications relating to WBAK and simultaneously entered into a purchase and sale agreement to acquire substantially all of the assets of WBAK, the Fox affiliate in Terre Haute, Indiana for $3.0 million. The TBA
commenced on May 9, 2003. Pursuant to the terms of the TBA, Mission made a down payment of $1.5 million against the purchase price, which was funded from Missions senior credit facilities. Additionally, Mission entered into an SSA with
Nexstar, effective May 9, 2003, whereby Nexstar-owned WTWO will provide certain services to WBAK including production, technical maintenance and security, among other services. Mission also entered into a JSA, effective May 9, 2003, whereby
Nexstar-owned WTWO will purchase all the advertising time on WBAK and retain the advertising revenue in return for payments to Mission of $100.0 thousand per month, subject to adjustment to assure that each payment equals Missions actual
operating costs plus $10.0 thousand per month.



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Item 2.    Managements Discussion and Analysis of Financial Condition and Results of Operations



Forward-looking and Cautionary Statements



The following discussion and analysis should be read in conjunction with the unaudited financial statements for the three months ended
March 31, 2002 and 2001 and related notes included elsewhere in this Quarterly Report on Form 10-Q. 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, revenues, 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; 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, estimate, intend, continue, believe, expect or anticipate and other similar words.



Although we believe that the expectations
reflected in any of our forward-looking statements are reasonable, actual results could differ from this projection or assumption in any of our forward-looking statements. Our future financial condition and results of operations, as well as any
forward-looking statements are subject to change and inherent risks and uncertainties discussed elsewhere in the Quarterly Report on Form 10-Q 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 publicly update any forward-looking statements to reflect subsequent events or circumstances unless otherwise required by
law.



Introduction



The operating revenue of WYOU is derived primarily from
advertising revenue, which in turn depends on the economic conditions of the markets in which we operate, the demographic makeup of those markets and the marketing strategy we employ in each market. Our operating revenue for WFXP is derived
primarily from payments by Nexstar to us. Our primary operating expenses consist of commissions on revenues, employee compensation and related benefits, newsgathering and programming costs. A large percentage of the costs involved in the operation
of our stations remain relatively fixed.



Each of
our stations has a network affiliation agreement pursuant to which the network provides programming to the station during specified time periods, including prime time. CBS compensates our affiliated station for distributing the networks
product over the air and for keeping a portion of advertising inventory during those time periods; however, Fox does not provide compensation. Each station acquires licenses to broadcast programming in non-news time periods during the remainder of
the day. The licenses are either purchased from a program distributor for cash and/or the program distributor is allowed to retain some of the inventory as compensation to eliminate or reduce the cash cost for the license. The latter is referred to
as barter broadcast rights. The station records the estimated fair market value of the licenses, including any advertising inventory given to the program distributor as a broadcast right asset and liability. The assets are amortized as a component
of amortization of broadcast rights. Amortization is computed using the straight-line method based on the license period or usage, whichever is greater. The cash broadcast rights liabilities are reduced by monthly payments while the barter liability
is amortized over the life of the contract as a component of trade and barter revenue.



Advertising rates are based upon (1) a programs popularity among the viewers that an advertiser wishes to target, (2) the number of advertisers competing for the available time, (3) the size and
the demographic composition of the market served by the station, (4) the availability of alternative advertising media in the market area and (5) the effectiveness of the stations sales force. Advertising rates are also determined by a
stations overall ability to attract viewers in its market area, as well as the stations ability to attract viewers among particular demographic groups that an advertiser may be targeting. Advertising revenues are positively affected by
strong local economies, national and regional political election campaigns, and certain events such as the Olympic Games or the Super Bowl. Because television broadcast stations rely on advertising revenues, declines in advertising budgets,
particularly in recessionary periods, adversely affect the broadcast industry, and as a result may contribute to a decrease in the revenues of broadcast television stations.



Most advertising contracts are short-term and generally run for a few weeks. Excluding political revenue,
54.2% and 52.8% of our spot revenue for the periods ended March 31, 2002 and March 31, 2001, respectively, was generated from local advertising which is sold by a stations sales staff. The remainder of our advertising revenue represents
inventory sold for national or political advertising. Each station has an agreement with a national representative firm that normally provides for representation outside the particular stations market. National commission rates vary within the
industry but are governed by each stations agreement. All national and political revenue is placed by advertising agencies. The agencies receive a commission rate of 15.0% for the



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gross amount of advertising
schedules placed by them. While the majority of local spot revenue is placed by local agencies, some advertisers place their schedules directly with the local sales staff, thereby eliminating the agency commission.



The advertising revenue of our stations is generally highest
in the second and fourth quarters of each year, due in part to increases in consumer advertising in the spring and retail advertising in the period leading up to, and including, the holiday season. In addition, advertising revenue is generally
higher during even numbered years resulting from political advertising and advertising aired during the Olympic Games.



Station Agreements



Bastet has a time brokerage agreement for WFXP with Nexstar, which allows Nexstar to program most of the stations broadcast time,
sell the stations advertising time and retain the advertising revenue in exchange for monthly payments to us. Bastet has a shared services agreement for WYOU with Nexstar, which requires the payment of a monthly fee by WYOU (subject to annual
increases) in return for Nexstar providing services that include news production and technical maintenance.



In addition to receiving certain services from Nexstar, Nexstar also guarantees our debt. Bastet is guarantor of the senior credit
facility entered into by and the senior subordinated notes issued by Nexstar.



Our shareholder, David S. Smith, has granted Nexstar purchase options, which were amended on October 18, 2002, on each station to acquire its assets and liabilities for consideration equal to the
greater of (1) seven times the stations broadcast cash flow less the amount of indebtedness as defined in the option agreement or (2) the amount of indebtedness. These option agreements are freely exercisable or assignable by Nexstar without
the consent or approval of David S. Smith.



Historical
Performance



Revenue



The following table sets forth the
principal types of revenue received by our stations for the periods indicated, each type of revenue (other than trade and barter) as a percentage of total gross revenue, and agency and national sales representative commissions:



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|                                                     |  | Three Months Ended March 31,
|---------------------------------------------------- |  | ----------------------------
|                                                     |  | 2001                        
|                                                     |  | Amount                      
|                                                     |  | (Unaudited)                 
|                                                     |  | (dollars in thousands)      
|                                                    
|Local                                                |  | $                           
|National                                             |  |                             
|Political                                            |  |                             
|Network compensation                                 |  |                             
|Other                                                |  |                             
|                                                     |  |                             
|Total gross revenue                                  |  |                             
|Less: Agency and national representative commissions |  |                             
|                                                     |  |                             
|Net broadcast revenue                                |  |                             
|Trade and barter revenue                             |  |                             
|Revenue from Nexstar Finance, L.L.C.                 |  |                             
|                                                     |  |                             
|Total net revenue                                    |  | $                           
|                                                     |  |                             



Results of Operations



The following table sets forth a summary of our operations for the periods indicated and their percentages of total net revenue:



|                                                                            |  | Three Months Ended March 31,
|--------------------------------------------------------------------------- |  | ----------------------------
|                                                                            |  | 2001                        
|                                                                            |  | Amount                      
|                                                                            |  | (Unaudited)                 
|                                                                            |  | (dollars in thousands)      
|                                                                           
|Total net revenue                                                           |  | $                           
|Operating expenses:                                                         |  |                             
|Direct operating expense, net of trade                                      |  |                             
|Selling, general and administrative expense                                 |  |                             
|Selling, general and administrative expense paid to Nexstar Finance,
L.L.C. |  |                             
|Trade and barter expense                                                    |  |                             
|Depreciation and amortization                                               |  |                             
|Amortization of broadcast rights, excluding barter                          |  |                             
|                                                                            |  |                             
|Loss from operations                                                        |  | $                           
|                                                                            |  |                             



Three Months Ended March 31, 2002 Compared to Three Months Ended March 31, 2001



Net broadcast revenue for the three months ended March 31, 2002 was $1.5 million, a decrease of $0.1 million, compared to $1.4 million for
the three months ended March 31, 2001. The increase was attributable to increased political revenues in 2002.



Direct operating expenses and selling, general and administrative expenses, net of trade, for the three months ended March 31, 2002 were
$1.3 million, compared to $1.6 million for the three months ended March 31, 2001. The decrease was due to contractual decreases in the shared service fees in 2002 payable to Nexstar.



Amortization of broadcast rights, excluding barter, for the three months ended March 31, 2002 was $0.2
million, compared to $0.2 million for the three months ended March 31, 2002. Depreciation of property and equipment and amortization of intangible assets was $0.3 million for the three months ended March 31, 2002, compared to $0.5 million for the
three months ended March 31, 2001. The decrease is attributable to the Company ceasing amortization of indefinite-lived assets, including goodwill.



Loss from operations for the three months ended March 31, 2002 was $0.3 million as compared to $0.7 million for the three months ended
March 31, 2001. The improvement was primarily due to the contractual decreases in the shared service fees in 2002.



Interest expense, including amortization of debt financing costs, for the three months ended March 31, 2002 was $0.7 million, compared to
$1.3 million for the same period in 2001, a decrease of $0.6 million. The decrease was primarily attributable to lower cost of funds and in January 2001, we wrote off $0.3 million in debt financing costs, net of tax effect, as a result of
refinancing our credit facility, with the $0.3 million included in 2001 interest expense.



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As a result of
the factors discussed above, our net loss was $1.0 million for the three months ended March 31, 2002 compared to $2.0 million for the same period in 2001, a decrease in net loss of $1.0 million. The loss in 2001 included an extraordinary loss of
$0.3 million from refinancing of the Companys credit facility.



Liquidity and Capital Resources



As of March 31, 2002, cash and cash equivalents were $0.3 million compared to $0.1 million as of March 31, 2001.



Our primary sources of liquidity are cash flows from operating activities, including the timing of our payments to Nexstar, and the senior
credit facilities. Cash flows used by operating activities were $0.3 million for the three months ended March 31, 2002, as compared to cash flows provided by operating activities of $0.3 million for the three months ended March 31, 2001.



Cash used for investing activities was $3
thousand for the three months ended March 31, 2002, as compared to $0.3 million for the three months ended March 31, 2001. Cash used for investing activities for the three months ended March 31, 2002 was the result of capital expenditures.



Cash used for financing activities was $4.0
thousand for the three months ended March 31, 2002, compared to cash flows used for financing activities for the three months ended March 31, 2001of $82.0 thousand. The change in cash flows from financing activities for the three months ended March
31, 2001 was the result of borrowings under the new senior credit facility of $23.9 million less the payment of related debt financing costs and the repayment of the existing senior credit facility.



We are highly leveraged, which makes us vulnerable to changes
in general economic conditions. Our ability to repay or refinance our debt will depend on, among other things, financial, business, market, competitive and other conditions, many of which are beyond our control. We believe that, taken together, our
current cash balances, internally generated cash flow, availability under our credit facility, and continuation of the various service agreements between Bastet and Nextar, should result in our having adequate cash resources to meet our debt service
and other financial obligations for at least the next twelve months.



Senior Credit Facility



On January 12, 2001, we entered into a senior secured credit facility with a group of commercial banks. The terms of the credit agreement governing the facility provide for a revolving credit facility in the amount of $43.0 million.
We share the credit facility with Mission Broadcasting of Wichita Falls, Inc., an affiliated company that is also 100% owned by David S. Smith. Interest rates associated with our credit facility are based, at our option, on the prevailing prime rate
plus an applicable margin or LIBOR plus an applicable margin. Interest is fixed for a period ranging from one month to 12 months, depending on availability of the interest basis selected, except if we select a prime-based loan, in which case the
interest rate will fluctuate during the period as the prime rate fluctuates. Interest is payable periodically based on the type of interest rate selected.



On November 14, 2001, the credit facility was amended to increase the revolving facility to $58.0 million and to include Mission
Broadcasting of Joplin, Inc. as a borrower. Each party is jointly and severally liable for the outstanding amount of the loan. Nexstar is a guarantor of the agreement. Interest rates associated with our credit facility are based, at the option of
both the borrowers, on the prevailing prime rate plus an applicable margin or the LIBOR rate plus an applicable margin, as defined (ranging from 5.41% to 5.54% at March 31, 2002). Interest is fixed for a period ranging from one month to twelve
months, depending on availability of the interest basis selected, except if the borrowers select a prime-based loan, in which case the interest rate will fluctuate during the period as the prime rate fluctuates. Interest is payable periodically
based on the type of interest rate selected. In addition, the borrowers are required to pay quarterly commitment fees based on the combined leverage ratio of Nexstar and all parties to our credit agreement for that particular quarter on the unused
portion of our credit facility loan commitment. Our credit facility is due and payable on the maturity date, January 12, 2007.



In addition, we are required to pay quarterly commitment fees on the unused portion of the revolving commitments based on the consolidated
total leverage ratio of Nexstar, Bastet and Mission Broadcasting of Wichita Falls, Inc. for that particular quarter. The revolving facility is non-reducing and due and payable on January 12, 2007. The senior credit facility contains covenants which
require us to comply with certain limitations on the incurrence of additional indebtedness, issuance of equity, payment of dividends and on certain other business activities. We were in compliance with all covenants contained in the credit agreement
governing our senior credit facility at March 31, 2002.



We guarantee the senior credit facilities of Nexstar and Nexstar guarantees our debt. As of March 31, 2002, $82.0 million was outstanding on the Nexstar credit facilities, which have a maximum commitment of $149.0 million. Nexstar
was in compliance with its covenants at March 31, 2002.



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Guarantor of Senior Subordinated Notes



We are a guarantor of Nexstars $160.0 million 12% Senior Subordinated Notes (the Notes). The Notes mature on April 1, 2008. Interest is payable every six months in arrears on April 1 and October 1. The
Notes are general unsecured senior subordinated obligations, subordinated to all of our and Nexstars senior debt.



Digital Conversion



FCC regulations required us to commence digital operations by May 1, 2002, in addition to continuing our analog operations, unless an
extension of time was granted. We received an extension of time to begin digital operations for WYOU until December 1, 2002; WFXP did not require an extension of time because it has not yet received a DTV construction permit. We estimate the digital
conversion will require an average initial capital investment of $0.2 million per station for low-power transmission of digital signal programming and an average additional capital expenditure of $0.7 million per station for full-power transmission
modifications. There were no expenditures for digital conversion for the three months ended March 31, 2002. We anticipate that digital expenditures will be funded through available cash on hand and cash generated from operations.



Off-Balance Sheet Arrangements



At March 31, 2002 and 2001, we did not have any relationships
with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose 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.



Recently Issued Accounting Standards



In July 2001, the FASB issued SFAS No. 141, Business
Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No. 141 prospectively prohibits the pooling of interest method of accounting for business combinations initiated after June 30, 2001. SFAS No. 142 requires companies to cease
amortizing certain intangible assets including goodwill and FCC licenses. The amortization of existing goodwill and FCC licenses ceased on December 31, 2001. Any goodwill and FCC licenses resulting from acquisitions completed after June 30, 2001 are
not amortized. SFAS No. 142 also establishes a new method of testing goodwill and FCC licenses for impairment on an annual basis or on an interim basis if an event occurs or circumstances change which would reduce the fair value of a reporting unit
below its carrying value. We tested our goodwill and FCC licenses for impairment under the new standard during 2002, which resulted in no impairment.



In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, which was effective January
1, 2002. SFAS No. 144 supersedes SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, and the accounting and reporting provisions relating to the disposal of a segment of a business described
in Accounting Principles Board Opinion No. 30. The adoption of SFAS No. 144 did not have a material impact on our financial statements.



In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13,
and Technical Corrections (SFAS No. 145), which is effective for fiscal years beginning after May 15, 2002. SFAS No. 145 rescinds SFAS No. 4 and SFAS No. 64, which addressed the accounting for gains and losses from extinguishment of
debt. SFAS No. 145 amends SFAS No. 13 to require that certain lease modifications that have economic effects similar to sale-leaseback transactions be accounted for in the same manner as sale-leaseback transactions. SFAS No. 145 also makes technical
corrections to certain existing pronouncements that are not substantive in nature. Bastet adopted SFAS No. 145 for the year ended December 31, 2002 and as a result has reclassified $0.3 million of extraordinary loss from refinancing of credit
facility to interest expense for the year ended December 31, 2001.



Subsequent Events



Mission
Broadcasting, Inc. (Mission), formerly known as Mission Broadcasting of Wichita Falls, Inc. completed a merger with Bastet on September 30, 2002. Bastet and Mission were separate entities, 100% owned by the same shareholder at the
beginning of fiscal year 2002 and during fiscal year 2001 and 2000.



In 2001 and 2002, Mission entered into the following transactions: On December 31, 2001, Mission Broadcasting of Joplin, Inc. (a subsidiary of Mission Broadcasting of Wichita Falls, Inc.) entered into a time brokerage
agreement (TBA) with GOCOM Broadcasting of Joplin, L.L.C., the current owner of KODE. In September 2002, Mission Broadcasting of Joplin, Inc. purchased substantially all of the assets of the station for $14.0 million. Pursuant to the
terms of the purchase agreement, Mission Broadcasting of Joplin, Inc. has made a down payment of $6.0 million against the purchase price, which is included in other noncurrent assets on the balance sheet. Mission Broadcasting of Joplin, Inc. made
TBA payments of $35 thousand per month to GOCOM Broadcasting of Joplin, L.L.C. through September 2002.



Mission entered into a shared services agreement (SSA) with KSNF, a Nexstar-owned station in Joplin, Missouri, on April 1,
2002. As a result of the SSA with KSNF and the purchase of KODE, Mission was able to reduce overhead costs associated with operations at KODE. Based on the expectation of the cost reductions through the SSA, Mission purchased KODE for an amount
which resulted in the recognition of $0.4 million of goodwill.



On December 13, 2002, Mission entered into a local marketing agreement with a subsidiary of LIN Television Corporation, the current owner of KRBC and KACB which are located in Abilene and San Angelo, Texas, pending the sale of the
stations to Mission. The local marketing agreement commenced on January 1, 2003. Following FCC consent to the transaction, Mission will purchase substantially all of the assets of the stations for $10.0 million. Pursuant to the terms of the purchase
agreement, Mission made a down payment of $1.5 million against the purchase price in December 2002, which has been included in noncurrent assets as of December 31, 2002.



On February 13, 2003, Mission and Nexstar obtained new senior credit
facilities. The facilities consist of a $185.0 million term loan (Nexstar $130.0 million and Mission $55.0 million) and an $80.0 million revolver (Nexstar $50.0 million and Mission $30.0 million). Mission used the proceeds from its facility to
refinance its existing senior credit facility, pay related debt financing costs and provide additional working capital. Financial covenants under the new senior credit facilities include a consolidated total leverage ratio of 7.25 times the last
twelve months operating cash flow (as defined in the credit agreement) through March 30, 2004, a consolidated senior leverage ratio of 4.25 times the last twelve months operating cash through June 29, 2004 and a consolidated fixed charge coverage
ratio of 1.10 to 1.00 through September 29, 2004. The term loans amortize at 1% annually in years 2004 through 2009, with the remaining 94% due in 2010. The outstanding principal amount on the revolving loans mature on December 31, 2009. As of May
9, 2003, Mission had drawn $3.1 million on its revolver. The refinancing of the existing senior credit facility resulted in a write-off for Mission, during the first quarter of 2003, of $1.1 million of debt financing costs that were capitalized at
December 31, 2002.



On May 8, 2003, Mission
entered into a TBA with Bahakel Communications relating to WBAK and simultaneously entered into a purchase and sale agreement to acquire substantially all of the assets of WBAK, the Fox affiliate in Terre Haute, Indiana for $3.0 million. The TBA
commenced on May 9, 2003. Pursuant to the terms of the TBA, Mission made a down payment of $1.5 million against the purchase price, which was funded from Missions senior credit facilities. Additionally, Mission entered into an SSA with
Nexstar, effective May 9, 2003, whereby Nexstar-owned WTWO will provide certain services to WBAK including production, technical maintenance and security, among other services. Mission also entered into a JSA, effective May 9, 2003, whereby
Nexstar-owned WTWO will purchase all the advertising time on WBAK and retain the advertising revenue in return for payments to Mission of $100.0 thousand per month, subject to adjustment to assure that each payment equals Missions actual
operating costs plus $10.0 thousand per month.



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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 March 31, 2002 under our senior secured
credit facility bear interest at the base rate, or LIBOR, plus the applicable margin, as defined (ranging from 5.41% to 5.54% at March 31, 2002). Interest is payable in accordance with the credit agreements.



The following table estimates the changes to cash flow from
operations if interest rates were to fluctuate by 100 or 50 basis points, or bps (where 100 basis points represent one percentage point), for a twelve month period:



|                          |  | Interest rate decrease |       | No change to interest rate |   | Interest rate increase
|------------------------- |  | ---------------------- | ----- | -------------------------- | - | ----------------------
|                          |  | 100 BPS                |       | 50 BPS                     |   |                       
|                          |  | (dollars in thousands)
|Senior credit facility(1) |  | $                      | 2,043 |                            | $ | 2,273                 

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|(1) |  | Includes the impact of the indebtedness of Mission Broadcasting of Wichita Falls, Inc.
|--- |  | --------------------------------------------------------------------------------------



Impact of Inflation



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



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PART II



Item 1.    Legal Proceedings



None.



Item 2.    Changes in Securities and Use of Proceeds



None.



Item 3.    Defaults Upon Senior Securities



None.



Item 4.    Submission of Matters to a Vote of Securityholders



None.



Item 5.    Other Information



None.



Item 6.    Exhibits and Reports on Form 8-K



(a)  Exhibits



|Exhibit No. |  | Exhibit Index                                                  
|----------- |  | ---------------------------------------------------------------
|99.1        |  | Certification of David S. Smith pursuant to 18 U.S.C. ss. 1350.



(b)  Reports on Form 8-K



None.



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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.



May 28, 2003

BASTET BROADCASTING, INC.By:

/s/    DAVID S. SMITHDavid S. Smith President and Treasurer (Principal Executive
Officer and Principal Financial and Accounting Officer)








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I, David S. Smith, President and Treasurer (Principal Executive Officer and Principal Financial and Accounting Officer) of Bastet Broadcasting, Inc., certify that:



1.    I have reviewed this quarterly report on Form 10-Q of Bastet Broadcasting, Inc.;



2.    Based on my knowledge, this quarterly report does
not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by
this quarterly report; and



3.    Based on my
knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
periods presented in this quarterly report.



Date: May 28,
2003



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|By:
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