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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 September 30, 2006

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, 2006, 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, 2006. As of
October 31, 2006, 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 September 30, 2006 and December 31, 2005                               |  | 1   
|                             |  |                                                                                                   
|                             |  | Condensed Statements of Operations for the three and nine months ended September 30, 2006 and 2005 |  | 2   
|                             |  |                                                                                                   
|                             |  | Condensed Statements of Cash Flows for the nine months ended September 30, 2006 and 2005           |  | 3   
|                             |  |                                                                                                   
|                             |  | Notes to Condensed Financial Statements                                                            |  | 4   
|                             |  |                                                                                                   
|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                |  | 20                                                                                                



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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)



|                                                                                                                                          |  |                    |         |   |                   |   |         |  
|----------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------ | ------- | - | ----------------- | - | ------- | -
|                                                                                                                                          |  | September 30, 2006 |         |   | December 31, 2005 |  
|                                                                                                                                          |  | (Unaudited)        |        
|ASSETS                                                                                                                                    |  |                    |         |   |                   |   |         |  
|Current assets:                                                                                                                           |  |                    |         |   |                   |   |         |  
|Cash and cash equivalents                                                                                                                 |  | $                  | 983     |   |                   | $ | 1,404   |  
|Accounts receivable (allowance for doubtful accounts of $0 and $0, respectively)                                                          |  |                    | 674     |   |                   |   | 356     |  
|Current portion of broadcast rights                                                                                                       |  |                    | 3,611   |   |                   |   | 2,489   |  
|Prepaid expenses and other current assets                                                                                                 |  |                    | 210     |   |                   |   | 123     |  
|Deferred tax asset                                                                                                                        |  |                    | 50      |   |                   |   |        |  
|                                                                                                                                          |  |                    |         |   |                   |   |         |  
|Total current assets                                                                                                                      |  |                    | 5,528   |   |                   |   | 4,372   |  
|Property and equipment, net                                                                                                               |  |                    | 19,815  |   |                   |   | 21,102  |  
|Broadcast rights                                                                                                                          |  |                    | 2,569   |   |                   |   | 730     |  
|FCC licenses                                                                                                                              |  |                    | 28,736  |   |                   |   | 28,736  |  
|Goodwill                                                                                                                                  |  |                    | 16,651  |   |                   |   | 16,651  |  
|Other intangible assets, net                                                                                                              |  |                    | 43,550  |   |                   |   | 47,597  |  
|Other noncurrent assets                                                                                                                   |  |                    | 545     |   |                   |   | 616     |  
|                                                                                                                                          |  |                    |         |   |                   |   |         |  
|Total assets                                                                                                                              |  | $                  | 117,394 |   |                   | $ | 119,804 |  
|                                                                                                                                          |  |                    |         |   |                   |   |         |  
|LIABILITIES AND SHAREHOLDERS DEFICIT                                                                                                     |  |                    |         |   |                   |   |         |  
|Current liabilities:                                                                                                                      |  |                    |         |   |                   |   |         |  
|Current portion of debt                                                                                                                   |  | $                  | 1,727   |   |                   | $ | 1,727   |  
|Current portion of broadcast rights payable                                                                                               |  |                    | 3,729   |   |                   |   | 2,669   |  
|Accounts payable                                                                                                                          |  |                    | 179     |   |                   |   | 21      |  
|Accrued expenses                                                                                                                          |  |                    | 722     |   |                   |   | 508     |  
|Interest payable                                                                                                                          |  |                    | 69      |   |                   |   | 61      |  
|Deferred revenue                                                                                                                          |  |                    | 831     |   |                   |   | 577     |  
|Due to Nexstar Broadcasting, Inc.                                                                                                         |  |                    | 19,953  |   |                   |   | 22,215  |  
|                                                                                                                                          |  |                    |         |   |                   |   |         |  
|Total current liabilities                                                                                                                 |  |                    | 27,210  |   |                   |   | 27,778  |  
|Debt                                                                                                                                      |  |                    | 169,246 |   |                   |   | 170,541 |  
|Broadcast rights payable                                                                                                                  |  |                    | 2,949   |   |                   |   | 958     |  
|Deferred tax liabilities                                                                                                                  |  |                    | 5,423   |   |                   |   | 4,490   |  
|Deferred revenue                                                                                                                          |  |                    | 295     |   |                   |   | 126     |  
|Deferred gain on sale of assets                                                                                                           |  |                    | 2,301   |   |                   |   | 2,431   |  
|Other liabilities                                                                                                                         |  |                    | 2,701   |   |                   |   | 2,491   |  
|                                                                                                                                          |  |                    |         |   |                   |   |         |  
|Total liabilities                                                                                                                         |  |                    | 210,125 |   |                   |   | 208,815 |  
|                                                                                                                                          |  |                    |         |   |                   |   |         |  
|Commitments and contingencies                                                                                                             |  |                    |         |   |                   |   |         |  
|Shareholders deficit:                                                                                                                    |  |                    |         |   |                   |   |         |  
|Common stock, $1 par value; 1,000 shares authorized; 1,000 shares issued and outstanding at both September 30, 2006 and December 31,
2005 |  |                    | 1       |   |                   |   | 1       |  
|Subscription receivable                                                                                                                   |  |                    | (1      | ) |                   |   | (1      | )
|Accumulated deficit                                                                                                                       |  |                    | (92,731 | ) |                   |   | (89,011 | )
|                                                                                                                                          |  |                    |         |   |                   |   |         |  
|Total shareholders deficit                                                                                                               |  |                    | (92,731 | ) |                   |   | (89,011 | )
|                                                                                                                                          |  |                    |         |   |                   |   |         |  
|Total liabilities and shareholders deficit                                                                                               |  | $                  | 117,394 |   |                   | $ | 119,804 |  
|                                                                                                                                          |  |                    |         |   |                   |   |         |  

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



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##### Table of Contents

MISSION BROADCASTING, INC.

CONDENSED STATEMENTS OF OPERATIONS

(in thousands)



|                                                                                                                  |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |        |  
|----------------------------------------------------------------------------------------------------------------- |  | ------------------------------- | ------ | - | ------------------------------ | - | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                                                                                                  |  | Three Months EndedSeptember 30, |        |   | Nine Months EndedSeptember 30, |  
|                                                                                                                  |  | 2006                            |        |   | 2005                           |   |        | 2006 |  |   | 2005   |  
|                                                                                                                  |  | (Unaudited)                     |        |   | (Unaudited)                    |  
|Net broadcast revenue (including barter)                                                                          |  | $                               | 1,404  |   |                                | $ | 1,141  |      |  | $ | 4,152  |   |  | $ | 3,716  |  
|Revenue from Nexstar Broadcasting, Inc.                                                                           |  |                                 | 7,836  |   |                                |   | 6,847  |      |  |   | 22,620 |   |  |   | 20,812 |  
|                                                                                                                  |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |        |  
|Net revenue                                                                                                       |  |                                 | 9,240  |   |                                |   | 7,988  |      |  |   | 26,772 |   |  |   | 24,528 |  
|                                                                                                                  |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |        |  
|Operating expenses:                                                                                               |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |        |  
|Direct operating expenses (exclusive of depreciation and amortization shown separately below)                     |  |                                 | 1,189  |   |                                |   | 1,107  |      |  |   | 3,493  |   |  |   | 3,142  |  
|Selling, general, and administrative expenses (exclusive of depreciation and amortization shown separately below) |  |                                 | 626    |   |                                |   | 534    |      |  |   | 1,716  |   |  |   | 1,560  |  
|Fees incurred pursuant to local service agreements with Nexstar Broadcasting, Inc.                                |  |                                 | 1,955  |   |                                |   | 2,850  |      |  |   | 5,855  |   |  |   | 8,550  |  
|Amortization of broadcast rights                                                                                  |  |                                 | 1,116  |   |                                |   | 1,169  |      |  |   | 2,929  |   |  |   | 3,402  |  
|Amortization of intangible assets                                                                                 |  |                                 | 1,349  |   |                                |   | 1,528  |      |  |   | 4,047  |   |  |   | 4,700  |  
|Depreciation                                                                                                      |  |                                 | 818    |   |                                |   | 699    |      |  |   | 2,472  |   |  |   | 2,099  |  
|Loss on asset disposal, net                                                                                       |  |                                 |       |   |                                |   | 1      |      |  |   | 7      |   |  |   | 54     |  
|                                                                                                                  |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |        |  
|Total operating expenses                                                                                          |  |                                 | 7,053  |   |                                |   | 7,888  |      |  |   | 20,519 |   |  |   | 23,507 |  
|                                                                                                                  |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |        |  
|Income from operations                                                                                            |  |                                 | 2,187  |   |                                |   | 100    |      |  |   | 6,253  |   |  |   | 1,021  |  
|Interest expense, including amortization of debt financing costs                                                  |  |                                 | (3,257 | ) |                                |   | (2,391 | )    |  |   | (9,129 | ) |  |   | (6,558 | )
|Loss on extinguishment of debt                                                                                    |  |                                 |       |   |                                |   |       |      |  |   |       |   |  |   | (508   | )
|Interest income                                                                                                   |  |                                 | 15     |   |                                |   | 8      |      |  |   | 40     |   |  |   | 18     |  
|                                                                                                                  |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |        |  
|Loss before income taxes                                                                                          |  |                                 | (1,055 | ) |                                |   | (2,283 | )    |  |   | (2,836 | ) |  |   | (6,027 | )
|Income tax expense                                                                                                |  |                                 | (332   | ) |                                |   | (338   | )    |  |   | (884   | ) |  |   | (1,016 | )
|                                                                                                                  |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |        |  
|Net loss                                                                                                          |  | $                               | (1,387 | ) |                                | $ | (2,621 | )    |  | $ | (3,720 | ) |  | $ | (7,043 | )
|                                                                                                                  |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   |        |  

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)



|                                                                                |  |                                 |        |   |      |   |          |  
|------------------------------------------------------------------------------- |  | ------------------------------- | ------ | - | ---- | - | -------- | -
|                                                                                |  | Nine Months Ended September 30, |       
|                                                                                |  | 2006                            |        |   | 2005 |  
|                                                                                |  | (Unaudited)                     |       
|Cash flows from operating activities:                                           |  |                                 |        |   |      |   |          |  
|Net loss                                                                        |  | $                               | (3,720 | ) |      | $ | (7,043   | )
|Adjustments to reconcile net loss to net cash provided by operating activities: |  |                                 |        |   |      |   |          |  
|Deferred income taxes                                                           |  |                                 | 883    |   |      |   | 1,010    |  
|Depreciation of property and equipment                                          |  |                                 | 2,472  |   |      |   | 2,099    |  
|Amortization of intangible assets                                               |  |                                 | 4,047  |   |      |   | 4,700    |  
|Amortization of debt financing costs                                            |  |                                 | 71     |   |      |   | 67       |  
|Amortization of broadcast rights, excluding barter                              |  |                                 | 1,394  |   |      |   | 1,517    |  
|Payments for broadcast rights                                                   |  |                                 | (1,300 | ) |      |   | (1,688   | )
|Loss on asset disposal, net                                                     |  |                                 | 7      |   |      |   | 54       |  
|Loss on extinguishment of debt                                                  |  |                                 |       |   |      |   | 508      |  
|Deferred gain recognition                                                       |  |                                 | (130   | ) |      |   | (130     | )
|Changes in operating assets and liabilities, net of acquisitions:               |  |                                 |        |   |      |   |          |  
|Accounts receivable                                                             |  |                                 | (318   | ) |      |   | 78       |  
|Prepaid expenses and other current assets                                       |  |                                 | (87    | ) |      |   | (31      | )
|Other noncurrent assets                                                         |  |                                 | (5     | ) |      |   | 211      |  
|Taxes payable                                                                   |  |                                 |       |   |      |   | (11      | )
|Accounts payable and accrued expenses                                           |  |                                 | 372    |   |      |   | (349     | )
|Interest payable                                                                |  |                                 | 8      |   |      |   | 7        |  
|Deferred revenue                                                                |  |                                 | 423    |   |      |   | 461      |  
|Other noncurrent liabilities                                                    |  |                                 | 210    |   |      |   | 144      |  
|Due to Nexstar Broadcasting, Inc.                                               |  |                                 | (2,262 | ) |      |   | 923      |  
|                                                                                |  |                                 |        |   |      |   |          |  
|Net cash provided by operating activities                                       |  |                                 | 2,065  |   |      |   | 2,527    |  
|                                                                                |  |                                 |        |   |      |   |          |  
|Cash flows from investing activities:                                           |  |                                 |        |   |      |   |          |  
|Additions to property and equipment                                             |  |                                 | (1,201 | ) |      |   | (1,024   | )
|Proceeds from sale of assets                                                    |  |                                 | 10     |   |      |   | 16       |  
|Acquisition of broadcast properties and related transaction costs               |  |                                 |       |   |      |   | (6,143   | )
|                                                                                |  |                                 |        |   |      |   |          |  
|Net cash used for investing activities                                          |  |                                 | (1,191 | ) |      |   | (7,151   | )
|                                                                                |  |                                 |        |   |      |   |          |  
|Cash flows from financing activities:                                           |  |                                 |        |   |      |   |          |  
|Proceeds from debt issuance                                                     |  |                                 |       |   |      |   | 172,700  |  
|Repayment of long-term debt                                                     |  |                                 | (1,295 | ) |      |   | (172,740 | )
|Payments for debt financing costs                                               |  |                                 |       |   |      |   | (795     | )
|                                                                                |  |                                 |        |   |      |   |          |  
|Net cash used for financing activities                                          |  |                                 | (1,295 | ) |      |   | (835     | )
|                                                                                |  |                                 |        |   |      |   |          |  
|Net decrease in cash and cash equivalents                                       |  |                                 | (421   | ) |      |   | (5,459   | )
|Cash and cash equivalents at beginning of period                                |  |                                 | 1,404  |   |      |   | 6,981    |  
|                                                                                |  |                                 |        |   |      |   |          |  
|Cash and cash equivalents at end of period                                      |  | $                               | 983    |   |      | $ | 1,522    |  
|                                                                                |  |                                 |        |   |      |   |          |  
|Supplemental schedule of cash flow information:                                 |  |                                 |        |   |      |   |          |  
|Cash paid for interest                                                          |  | $                               | 9,051  |   |      | $ | 6,570    |  
|Cash paid for income taxes, net                                                 |  | $                               |       |   |      | $ | 11       |  

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
September 30, 2006, Mission Broadcasting, Inc. (Mission or the Company) owned and operated 15 television stations, 14 of which are affiliated with the NBC, ABC, CBS, Fox or My Network TV television networks and one of
which is an independent station, in markets located in New York, Pennsylvania, Illinois, Indiana, Missouri, Texas and Montana. Through local service agreements, Nexstar Broadcasting, Inc. (Nexstar) provides sales and operating services
to all of the Mission television stations (see Note 4).

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 September 18, 2006, the UPN and WB networks
merged to form a new network called The CW. The Company operated one former UPN affiliated station located in Wichita Falls, Texas. This station did not join The CW network, but instead became an affiliate of My Network TV, a new primetime
programming network that began operating on September 5, 2006. Management believes the change in affiliation for this station will not have a material impact on the Companys condensed financial position and results of operations.



|2. | Summary of Significant Accounting Policies
|-- | ------------------------------------------

Basis of Presentation

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

Interim Financial Statements

The condensed financial statements as of September 30, 2006, and for the three and nine months ended September 30, 2006 and 2005 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, 2005. The balance sheet at December 31, 2005 has been derived from the audited financial statements at
that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements.

Recent Accounting
Pronouncements

In February 2006, the FASB issued Statement of Financial Accounting Standards No. 155, Accounting for
Hybrid Financial Instruments  an amendment to of FASB Statements No. 133 and 140 (SFAS No. 155). SFAS No. 155 provides a fair value measurement option for certain hybrid financial instruments that contain an embedded
derivative that otherwise would require bifurcation. Under SFAS No. 155, an entity must irrevocably elect, on an instrument-by-instrument basis, to apply fair value accounting to a hybrid financial instrument in its entirety in lieu of
separately accounting for the instrument as a host contract and derivative instrument. Additionally, SFAS No. 155 clarifies that both interest-only and principal-only strips are not subject to the provision of SFAS No. 133 and establishes
a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding versus those that are embedded derivatives. SFAS No. 155 is effective for all financial instruments acquired or issued after the
beginning of an entitys first fiscal year that begins after September 15, 2006, which for the Company is January 1, 2007. Earlier adoption is permitted as of the beginning of an entitys fiscal year. The Company will adopt the
provisions of SFAS No. 155 beginning in fiscal 2007. The Company does not intend to issue or acquire the hybrid financial instruments included in the scope of SFAS No. 155 and does not expect the adoption of this Statement to have a
material impact on the Companys financial position or results of operations.

In July 2006, the FASB issued Financial Interpretation
No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109 (FIN No. 48). FIN No. 48 clarifies the accounting for uncertainty in income taxes recognized in the



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MISSION BROADCASTING, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS(Continued)



|2. | Summary of Significant Accounting Policies(Continued)
|-- | ------------------------------------------------------



financial statements for tax positions taken or expected to be taken in a tax return. FIN No. 48 requires that a tax position meet a
more-likely-than-not threshold for the benefit of an uncertain tax position to be recognized in the financial statements. Under the Interpretation, this threshold is met if it is determined that the tax position will be sustained, based
on its technical merits, upon examination by a taxing authority that has full knowledge of all relevant information. A tax position that meets the threshold is measured as the largest amount of benefit that is greater than 50 percent likely of being
recognized upon ultimate settlement. This Interpretation also provides guidance for presentation and disclosure of the tax benefit and other related matters in the financial statements. FIN No. 48 is effective for fiscal years beginning after
December 15, 2006, which is the Companys fiscal year beginning January 1, 2007. Management is currently evaluating the impact the adoption of FIN No. 48 will have on the Companys financial statements.

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 September 2006, the SEC issued Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements when Quantifying
Misstatements in Current Year Financial Statements (SAB No. 108), which provides guidance on how prior year misstatements should be taken into consideration when quantifying misstatements in current year financial statements
for purposes of determining whether the current years financial statements are materially misstated. Under the provisions of SAB No. 108, financial statement misstatements are to be quantified and evaluated for materiality using both a
balance sheet and income statement approach. SAB No. 108 is effective for the first annual period ending after November 15, 2006, which is the Companys 2006 fiscal year. Management is currently evaluating the impact the adoption of
SAB No. 108 will have on the Companys financial statements.



|3. | Pending Acquisition
|-- | -------------------

On April 18, 2006,
Nexstar and Mission announced that they had filed an application with the Federal Communications Commission (FCC) for consent for Nexstar to sell KFTA Channel 24 (Ft. Smith, Arkansas) to Mission for $5.6 million. On August 28, 2006,
Nexstar and Mission entered into a time brokerage agreement whereby (a) Mission will pay Nexstar $5 thousand per month for the right to broadcast Fox programming on KFTA during the Fox network programming time periods and (b) Nexstar will
pay Mission $20 thousand per month for the right to sell all commercial time on KFTA within the Fox network programming time periods. Effective August 28, 2006, Mission entered into an affiliation agreement with the Fox network which provides
Fox programming to KFTA. The time brokerage agreement between Nexstar and Mission will terminate effective with the purchase of KFTA from Nexstar. Upon closing the purchase of KFTA, Mission plans to enter into joint sales and shared services
agreements with Nexstars KNWA whereby KNWA will provide local news, sales and other non-programming services to KFTA.

On
May 22, 2006, two subsidiaries of Equity Broadcasting Corporation (Equity) filed a petition to deny against the KFTA assignment application alleging that Nexstar improperly controls Mission and its stations. On June 6, 2006,
Nexstar and Mission submitted a joint opposition. The FCC is currently in the process of considering the KFTA assignment application. On February 1, 2005, Nexstar submitted an application for renewal of KFTAs license. On September 5,
2006, Equity submitted a petition to deny the application for the renewal of license of KFTA. With respect to Nexstars operation of KFTA, Nexstar has filed its response to the petition. 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.



|4. | Local Service Agreements with Nexstar
|-- | -------------------------------------

Mission has
entered into local service agreements with Nexstar to provide sales and operating services to all of Missions stations. Under the terms of a shared services agreement (SSA), the Nexstar station in the market provides certain
services including news production, technical maintenance and security, in exchange for monthly payments from Mission to Nexstar. For each station that Mission has entered into an SSA, it has also entered into a joint sales agreement
(JSA). Under the terms of the JSA, Nexstar sells the advertising time of the Mission station and retains a percentage of the net revenue it generates in return for monthly payments to Mission



5



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##### Table of Contents

MISSION BROADCASTING, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS(Continued)



|4. | Local Service Agreements with Nexstar  (Continued)
|-- | ---------------------------------------------------



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, and SSA fees incurred by Nexstar under the agreements
described in the table below are reported as Revenue from Nexstar Broadcasting, Inc. and Fees incurred pursuant to local service agreements with Nexstar Broadcasting, Inc. in the accompanying condensed statements of
operations.

The arrangements under the SSAs and JSAs have had the effect of Nexstar receiving substantially all of the available cash,
after debt service costs, generated by the stations listed in the table. The arrangements under the TBAs have also had the effect of Nexstar receiving substantially all of the available cash generated by the TBA stations listed in the table. Mission
anticipates that Nexstar will continue to receive substantially all of Missions available cash, after payments for debt service costs, generated by the stations listed in the table.

Missions sole shareholder has granted Nexstar a purchase option 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.

In order for both Nexstar and Mission to comply with FCC regulations, Mission maintains complete responsibility for and control over programming, finances, personnel and operations of its stations.



6



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##### Table of Contents

MISSION BROADCASTING, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS(Continued)



|4. | Local Service Agreements with Nexstar  (Continued)
|-- | ---------------------------------------------------



The following table summarizes the various local service agreements Mission-owned stations had in
effect with Nexstar as of September 30, 2006:



|         |  |                              |  |               |  |                  |  |            |  |                                                                               
|-------- |  | ---------------------------- |  | ------------- |  | ---------------- |  | ---------- |  | ------------------------------------------------------------------------------
|Station  |  | Market                       |  | Affiliation   |  | Type ofAgreement |  | Expiration |  | Consideration received fromor paid to
Nexstar                                 
|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(2)                                     
|KJBO-LP  |  |                              |  | My Network TV |  | 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(2)                                    
|         |  |                              |  |               |  | 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(2)                                     
|         |  |                              |  |               |  | 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(2)                                     
|         |  |                              |  |               |  | 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(2)                                     
|         |  |                              |  |               |  | 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(2)                                     
|KCPN-LP  |  |                              |  |              |  | 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(2)                                     
|         |  |                              |  |               |  | 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(2)                                     
|         |  |                              |  |               |  | JSA              |  | 10/31/14   |  | 70% of the WTVO net revenue collected each month received from Nexstar        

---

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



|(2) | SSA was amended effective January 1, 2006.
|--- | ------------------------------------------

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)



|5. | Property and Equipment
|-- | ----------------------

On February 8, 2006,
President Bush signed into law legislation that establishes February 17, 2009 as the deadline for television broadcasters to complete their transition to digital transmission and return their analog spectrum to the FCC. As a result, the Company
reassessed the estimated useful lives of its analog transmission equipment and has accelerated the depreciation of certain equipment affected by the digital conversion. Equipment having a net book value of approximately $2.4 million as of
February 1, 2006, which was previously being depreciated over various remaining useful lives which extended from 2013 to 2020, is now being depreciated over a remaining useful life of three years. This change will increase annual depreciation
expense by approximately $0.6 million. During the three and nine months ended September 30, 2006, the accelerated depreciation of analog transmission equipment increased depreciation expense and net loss by approximately $0.1 million and $0.4
million, respectively.



|6. | Intangible Assets and Goodwill
|-- | ------------------------------

Intangible assets
subject to amortization consisted of the following:



|                                                |  |                               |  |                          |        |                   |     |         |       |  |                          |        |                |     |        |  |   |         |   |  |   |       
|----------------------------------------------- |  | ----------------------------- |  | ------------------------ | ------ | ----------------- | --- | ------- | ----- |  | ------------------------ | ------ | -------------- | --- | ------ |  | - | ------- | - |  | - | ------
|                                                |  | Estimated useful life (years) |  | September 30, 2006       |        | December 31, 2005
|                                                |  | Gross                         |  | Accumulated Amortization |        |                   | Net |         | Gross |  | Accumulated Amortization |        |                | Net
|                                                |  |                               |  |                          |        | (in thousands)    |     |         |       |  |                          |        | (in thousands) |     |        | 
|Network affiliation agreements                  |  | 15                            |  | $                        | 66,744 |                   | $   | (29,994 | )     |  | $                        | 36,750 |                | $   | 66,744 |  | $ | (26,657 | ) |  | $ | 40,087
|Other definite-lived intangible assets          |  | 1-15                          |  |                          | 14,117 |                   |     | (7,317  | )     |  |                          | 6,800  |                |     | 14,117 |  |   | (6,607  | ) |  |   | 7,510 
|                                                |  |                               |  |                          |        |                   |     |         |       |  |                          |        |                |     |        |  |   |         |   |  |   |       
|Total intangible assets subject to amortization |  |                               |  | $                        | 80,861 |                   | $   | (37,311 | )     |  | $                        | 43,550 |                | $   | 80,861 |  | $ | (33,264 | ) |  | $ | 47,597
|                                                |  |                               |  |                          |        |                   |     |         |       |  |                          |        |                |     |        |  |   |         |   |  |   |       

Total amortization expense from definite-lived intangibles was $1.3 million and $1.5 million for
the three months ended September 30, 2006 and 2005, respectively, and was $4.0 million and $4.7 million for the nine months ended September 30, 2006 and 2005, respectively. The Companys estimate of amortization expense for
definite-lived intangible assets recorded on its books as of September 30, 2006 is approximately $5 million for each year for the years of 2006 through 2010.

The aggregate carrying value of indefinite-lived intangibles, consisting of FCC licenses and goodwill, was $45.4 million at both September 30, 2006 and December 31, 2005. 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 September 30, 2006, the Company did not identify any events that would
trigger an impairment assessment.

The change in the carrying amount of goodwill for the periods ended September 30, 2006 and
December 31, 2005 was as follows:



|                  |  |                   |        |                  |   |       
|----------------- |  | ----------------- | ------ | ---------------- | - | ------
|                  |  | September 30,2006 |        | December 31,2005
|                  |  | (in thousands)   
|Beginning balance |  | $                 | 16,651 |                  | $ | 16,307
|Acquisitions      |  |                   |       |                  |   | 344   
|                  |  |                   |        |                  |   |       
|Ending balance    |  | $                 | 16,651 |                  | $ | 16,651
|                  |  |                   |        |                  |   |       

The consummation of the acquisition of WTVO during 2005 increased goodwill by approximately $0.3
million.



|7. | Debt
|-- | ----

Long-term debt consisted of the following:



|                      |  |                   |         |   |                  |   |         |  
|--------------------- |  | ----------------- | ------- | - | ---------------- | - | ------- | -
|                      |  | September 30,2006 |         |   | December 31,2005 |  
|                      |  | (in thousands)    |        
|Term loans            |  | $                 | 170,973 |   |                  | $ | 172,268 |  
|Less: current portion |  |                   | (1,727  | ) |                  |   | (1,727  | )
|                      |  |                   |         |   |                  |   |         |  
|                      |  | $                 | 169,246 |   |                  | $ | 170,541 |  
|                      |  |                   |         |   |                  |   |         |  



8



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##### Table of Contents

MISSION BROADCASTING, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS(Continued)



|7. | Debt(Continued)
|-- | ----------------



Senior Secured Credit Facility

The Mission senior secured credit facility (the Mission Facility) consists of a Term Loan B and a $47.5 million revolving loan. As of
September 30, 2006 and December 31, 2005, Mission had $171.0 million and $172.3 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, which commenced on
December 30, 2005, with the remaining 93.25% due at maturity. During the nine months ended September 30, 2006, repayments of Missions Term Loan B totaled $1.3 million. 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 7.12% and 6.28% at September 30, 2006 and
December 31, 2005, respectively. Interest is payable periodically based on the type of interest rate selected. Additionally, Mission is required to pay quarterly commitment fees on the unused portion of its revolving loan commitment ranging
from 0.375% to 0.50% per annum, based on the consolidated senior leverage ratio of Nexstar and Mission for that particular quarter.

Unused Commitments and Borrowing Availability

As of September 30, 2006, there were approximately $47.5 million
of unused commitments under Missions senior secured credit facility. As of September 30, 2006, there was approximately $63.0 million of total available borrowings that could be drawn under the Nexstar and Mission senior secured credit
facilities.

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 May 18, 2006, the State
of Texas enacted legislation to change its existing franchise tax from a tax based on taxable capital or earned surplus to a new tax based on modified gross revenue (Margin Tax). The current Texas franchise tax structure will remain in
existence until the end of 2006. Beginning in 2007, the Margin Tax imposes a 1% tax on revenues, less certain costs, as specified in the legislation, generated from Texas activities. Additionally, the legislation provides a temporary credit for
Texas business loss carryovers existing through 2006 to be used as an offset to the Margin Tax. In accordance with FASB Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes, the Company has recalculated
its deferred tax assets and liabilities based on the change in tax law. The effect of the Margin Tax and temporary credit decreased the Companys net deferred tax liabilities position resulting in approximately a $0.1 million reduction in the
deferred state income tax provision for the nine months ended September 30, 2006.



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##### Table of Contents

MISSION BROADCASTING, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS(Continued)



|9. | Management Agreement
|-- | --------------------

Missions sole
shareholder and his spouse are parties to a management services agreement. Under this agreement, Mission pays its sole shareholder up to $0.375 million per year for certain management services and pays his spouse by the hour for certain management
services. Pursuant to the management services agreement, Mission paid compensation to its sole shareholder in the amount of $0.1 million for each of the three months ended September 30, 2006 and 2005, and $0.2 million for each of the nine
months ended September 30, 2006 and 2005, which is included in selling, general and administrative expenses in the Companys condensed statement of operations.



|10. | FCC Regulatory Matters
|--- | ----------------------

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

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

Digital Television (DTV) Conversion

Television broadcasting in the United States is moving from an analog transmission system to a digital (DTV) transmission system. All commercial television stations in the United States were required to
commence DTV operations on a schedule determined by the FCC and Congress. All of the television stations that Mission owns and operates are broadcasting at least a low-power digital television signal. The Companys conversion to a low-power DTV
signal required an average initial capital expenditure of $0.2 million per station.

Television broadcasters are currently broadcasting
with both an analog signal and a DTV signal. On February 8, 2006, President Bush signed into law legislation that establishes February 17, 2009 as the deadline for television broadcasters to complete their transition to DTV-only operations
and return their analog spectrum to the FCC. See Note 5 for a discussion of the impact this new legislation is expected to have on the estimated useful lives of certain broadcasting equipment of the Company.

The FCC also established dates by which all television stations were required to be broadcasting with a full-power DTV signal. As of September 30,
2006, Missions stations WUTR, WTVO and WYOU are broadcasting with full-power DTV signals. Stations that are not in compliance with the full-power DTV broadcasting dates were permitted to request an extension of time from the FCC to complete
the build-out of their full-power DTV facilities.Mission filed a request for extension of time to construct full-power DTV facilities for its remaining stations. The FCC has not yet acted on this request for extension of time.

DTV conversion expenditures were $1.0 million and $0.6 million, respectively, for the nine months ended September 30, 2006 and 2005. 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

On
June 21, 2006, the FCC initiated a rulemaking proceeding seeking comment on how to address the issues raised by the U.S. Court of Appeals for the Third Circuit in Prometheus v. FCC, which stayed and remanded several media ownership rules
that the Commission had adopted in June 2003. The proceeding also opens a comprehensive review of all of the 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 will
include several public hearings to be held throughout the country, will extend 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)



|11. | Commitments and Contingencies
|--- | -----------------------------

Guarantees of
Nexstar Debt

Mission is a guarantor of and has pledged substantially all its assets, excluding FCC licenses, to guarantee
Nexstars bank credit facility. Nexstars bank credit facility, which matures in 2012, consists of a Term Loan B and a $50.0 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 September 30, 2006, Nexstar had issued an aggregate principal amount of
$200.0 million of senior subordinated notes and had $162.0 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 a purchase option 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.



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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 September 30, 2006, unaudited
condensed statements of operations for the three and nine months ended September 30, 2006 and 2005, unaudited condensed statements of cash flows for the nine months ended September 30, 2006 and 2005 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, 2005.

Executive Summary

Overview of Operations

As of September 30, 2006, we owned and operated 15 television stations. We have local service agreements with certain television stations owned by
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 September 30, 2006 with Nexstar-owned stations:



|                   |  |                                                                                      
|------------------ |  | -------------------------------------------------------------------------------------
|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 services agreement (JSA) for each of these stations. The SSA allows the sharing of 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 JSAs permit 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 SSAs and JSAs have had the effect of Nexstar receiving substantially all of the available cash, after debt service costs, generated by the stations listed above. The arrangements under the
TBAs have the effect of Nexstar receiving substantially all of the available cash generated by the TBA stations listed above. Mission anticipates that Nexstar will continue to receive substantially all of Missions available cash, after
payments for debt service costs, generated by the stations listed above. For more information about our local service agreements with Nexstar, refer to Note 4 of our condensed financial statements in Part I, Item 1 of this Quarterly Report on
Form 10-Q.

Nexstar Broadcasting Group, Inc. and its subsidiaries (Nexstar Broadcasting Group) guarantee the obligations
incurred under our senior credit facility. We are a guarantor of the senior credit facility entered into by Nexstar and the senior subordinated notes issued by Nexstar. In consideration of Nexstars guarantee of our senior credit facility, our
sole shareholder has granted Nexstar purchase options to acquire the assets and assume the liabilities of each of our television stations, subject to FCC consent. These option agreements (which expire on various dates between 2008 and 2014) are
freely exercisable or assignable by Nexstar without consent or approval by our sole shareholder.

Recent Developments

On April 18, 2006, we and Nexstar announced that we had filed an application with the FCC for consent for Nexstar to sell KFTA
Channel 24 (Ft. Smith, Arkansas) to us for $5.6 million. On August 28, 2006, we and Nexstar entered into a time brokerage agreement whereby (a) we will pay Nexstar $5 thousand per month for the right to broadcast Fox programming on KFTA
during the Fox network programming time periods and (b) Nexstar will pay us $20 thousand per month for the right to sell all commercial time on KFTA within the Fox network programming time periods. Effective August 28, 2006, we entered
into an affiliation agreement with the Fox network which provides Fox programming to KFTA. The time brokerage agreement between us and Nexstar will terminate effective with the purchase of KFTA from Nexstar. Upon closing the purchase of KFTA, we
plan to enter into joint sales and shared services agreements with Nexstars KNWA whereby KNWA will provide local news, sales and other non-programming services to KFTA.

On May 22, 2006, two subsidiaries of Equity Broadcasting Corporation (Equity) filed a petition to deny against the KFTA assignment application alleging
that Nexstar improperly controls us and our stations. On June 6, 2006, we and Nexstar submitted a joint opposition. The FCC is currently in the process of considering the KFTA assignment application. On February 1, 2005, Nexstar submitted
an application for renewal of KFTAs license. On September 5, 2006, Equity submitted a petition to deny the application for the renewal of license of KFTA. With respect to Nexstars operation of KFTA, Nexstar has filed its response to
the petition. 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.



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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 September 30,   |       | Nine Months Ended September 30,   
|                                        |  | 2006                               |       | 2005                               |       | 2006   |   | 2005 
|                                        |  | Amount                             |       | %                                  |       | Amount |   | %     |  | Amount |  | % |        | Amount |       | %
|                                        |  | (in thousands, except percentages) |       | (in thousands, except percentages)
|Network compensation                    |  | $                                  | 355   |                                    | 40.3  |        | $ | 344   |  | 61.8   |  | $ | 1,070  |        | 40.9  |   | $ | 1,247  |  | 68.1 
|Retransmission compensation             |  |                                    | 492   |                                    | 55.9  |        |   | 172   |  | 30.9   |  |   | 1,455  |        | 55.6  |   |   | 488    |  | 26.7 
|Other                                   |  |                                    | 33    |                                    | 3.8   |        |   | 41    |  | 7.3    |  |   | 92     |        | 3.5   |   |   | 96     |  | 5.2  
|                                        |  |                                    |       |                                    |       |        |   |       |  |        |  |   |        |        |       |   |   |        |  |      
|Total gross revenue                     |  |                                    | 880   |                                    | 100.0 |        |   | 557   |  | 100.0  |  |   | 2,617  |        | 100.0 |   |   | 1,831  |  | 100.0
|Barter revenue                          |  |                                    | 524   |                                    |       |        |   | 584   |  |        |  |   | 1,535  |        |       |   |   | 1,885  |  |      
|Revenue from Nexstar Broadcasting, Inc. |  |                                    | 7,836 |                                    |       |        |   | 6,847 |  |        |  |   | 22,620 |        |       |   |   | 20,812 |  |      
|                                        |  |                                    |       |                                    |       |        |   |       |  |        |  |   |        |        |       |   |   |        |  |      
|Net revenue                             |  | $                                  | 9,240 |                                    |       |        | $ | 7,988 |  |        |  | $ | 26,772 |        |       |   | $ | 24,528 |  |      
|                                        |  |                                    |       |                                    |       |        |   |       |  |        |  |   |        |        |       |   |   |        |  |      

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 September 30,   |       | Nine Months Ended September 30,   
|                                                                                   |  | 2006                               |       | 2005                               |       | 2006   |   | 2005 
|                                                                                   |  | Amount                             |       | %                                  |       | Amount |   | %     |  | Amount |  | % |        | Amount |       | %
|                                                                                   |  | (in thousands, except percentages) |       | (in thousands, except percentages)
|Net revenue                                                                        |  | $                                  | 9,240 |                                    | 100.0 |        | $ | 7,988 |  | 100.0  |  | $ | 26,772 |        | 100.0 |   | $ | 24,528 |  | 100.0
|Operating expenses:                                                                |  |                                    |       |                                    |       |        |   |       |  |        |  |   |        |        |       |   |   |        |  |      
|Corporate expenses                                                                 |  |                                    | 203   |                                    | 2.2   |        |   | 152   |  | 1.9    |  |   | 605    |        | 2.3   |   |   | 505    |  | 2.1  
|Station direct operating expenses, net of trade                                    |  |                                    | 1,189 |                                    | 12.9  |        |   | 1,107 |  | 13.9   |  |   | 3,493  |        | 13.0  |   |   | 3,142  |  | 12.8 
|Selling, general and administrative expenses                                       |  |                                    | 423   |                                    | 4.6   |        |   | 382   |  | 4.8    |  |   | 1,111  |        | 4.1   |   |   | 1,055  |  | 4.3  
|Fees incurred pursuant to local service agreements with Nexstar Broadcasting, Inc. |  |                                    | 1,955 |                                    | 21.2  |        |   | 2,850 |  | 35.7   |  |   | 5,855  |        | 21.9  |   |   | 8,550  |  | 34.9 
|Loss on asset disposal, net                                                        |  |                                    |      |                                    |      |        |   | 1     |  |       |  |   | 7      |        |      |   |   | 54     |  | 0.2  
|Barter expense                                                                     |  |                                    | 524   |                                    | 5.7   |        |   | 584   |  | 7.3    |  |   | 1,535  |        | 5.7   |   |   | 1,885  |  | 7.7  
|Depreciation and amortization                                                      |  |                                    | 2,167 |                                    | 23.5  |        |   | 2,227 |  | 27.9   |  |   | 6,519  |        | 24.4  |   |   | 6,799  |  | 27.7 
|Amortization of broadcast rights, excluding barter                                 |  |                                    | 592   |                                    | 6.4   |        |   | 585   |  | 7.3    |  |   | 1,394  |        | 5.2   |   |   | 1,517  |  | 6.2  
|                                                                                   |  |                                    |       |                                    |       |        |   |       |  |        |  |   |        |        |       |   |   |        |  |      
|Income from operations                                                             |  | $                                  | 2,187 |                                    |       |        | $ | 100   |  |        |  | $ | 6,253  |        |       |   | $ | 1,021  |  |      
|                                                                                   |  |                                    |       |                                    |       |        |   |       |  |        |  |   |        |        |       |   |   |        |  |      

Three Months Ended September 30, 2006 Compared to Three Months Ended September 30, 2005.

Revenue

Net revenue for the three months ended September 30, 2006, increased by $1.3 million, or 15.7% from the same period of 2005. This increase was primarily attributed to the increases in revenue from Nexstar and retransmission
compensation. As of January 1, 2005, we receive no advertising revenue because Nexstar sells all of the advertising time of our stations.

Retransmission compensation was $0.5 million for the three months ended September 30, 2006, compared to $0.2 million for the same period in 2005, an increase of $0.3 million, or 186.0%. The increase in retransmission compensation was
primarily the result of a significant increase in the number of retransmission consent agreements with compensation terms entered into with content distributors that provide for cash compensation, the majority of which were completed in late 2005.

Revenue from Nexstar was $7.8 million for the three months ended September 30, 2006, compared to $6.8 million for the same period in 2005,
an increase of $1.0 million, or 14.4%. The increase was primarily attributed to an increase in the net 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.

Operating Expenses

Corporate expenses, related to costs associated with the centralized management of our stations, were $0.2 million for both the three months ended September 30, 2006 and 2005.



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Station direct operating expenses, consisting primarily of news, engineering and programming, and
selling, general and administrative expenses, net of trade, increased by $0.1 million, or 8.3% for the three months ended September 30, 2006, compared to the same period in 2005. The increase was primarily due to higher programming costs
relating to fees attributed to the renewal of network affiliation agreements, along with an increase in fees for news services provided by the networks.

Fees incurred pursuant to local service agreements with Nexstar relate to fees for services provided by Nexstar for the production of newscasts, technical maintenance, promotional and administrative support. For the
three months ended September 30, 2006, these expenses decreased $0.9 million, or 31.4% from the same period in 2005. The decrease was primarily attributed to the amendment of certain SSAs effective January 1, 2006, which decreased our
payments to Nexstar.

Amortization of broadcast rights, excluding barter, was $0.6 million for both the three months ended
September 30, 2006 and 2005.

Amortization of intangible assets for the three months ended September 30, 2006, decreased by $0.2
million, or 11.7% compared to the same period in 2005. The decrease was primarily the result of intangible assets at certain stations becoming fully amortized.

Depreciation of property and equipment for the three months ended September 30, 2006, increased by $0.1 million, or 17.0%, compared to the same period in 2005. The increase was primarily attributed to
accelerating the depreciation of certain assets due to the Companys reassessment of their estimated remaining useful lives.

Income from Operations

Income from operations was $2.2 million for the three months ended September 30, 2006,
compared to $0.1 million for the same period of 2005, an increase of $2.1 million. The increase in income from operations for the three months ended September 30, 2006 was primarily attributed to the increase in total net revenue and decrease
in fees incurred pursuant to local service agreements with Nexstar, as discussed above.

Interest Expense

Interest expense, including amortization of debt financing costs, increased by $0.9 million, or 36.2%, for the three months ended September 30, 2006,
compared to the same period in 2005. The increase in interest expense was primarily attributed to higher interest rates in 2006 under our senior credit facility.

Income Taxes

Income taxes were $0.3 million for both the three months ended
September 30, 2006 and 2005. 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. No tax benefit was recorded with respect to the losses for 2006 and 2005, as the utilization of such losses is not likely to
be realized in the foreseeable future.

Nine Months Ended September 30, 2006 Compared to Nine Months Ended September 30, 2005.

Revenue

Net revenue for the nine months ended September 30, 2006, increased by $2.2 million, or 9.1% from the same period of 2005. This increase was primarily attributed to the increases in revenue from Nexstar and retransmission compensation.
As of January 1, 2005, we receive no advertising revenue because Nexstar sells all of the advertising time of our stations.

Retransmission compensation was $1.5 million for the nine months ended September 30, 2006, compared to $0.5 million for the same period in 2005, an increase of $1.0 million, or 198.2%. The increase in retransmission compensation was
primarily the result of a significant increase in the number of retransmission consent agreements with compensation terms entered into with content distributors that provide for cash compensation, the majority of which were completed in late 2005.

Revenue from Nexstar was $22.6 million for the nine months ended September 30, 2006, compared to $20.8 million for the same period in
2005, an increase of $1.8 million, or 8.7%. The increase was primarily attributed to an increase in the net 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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Operating Expenses

Corporate expenses, related to costs associated with the centralized management of our stations, were $0.6 million for the nine months ended
September 30, 2006, compared to $0.5 million for the same period in 2005, an increase of $0.1 million, 19.8%. The increase was primarily attributed to higher audit-related services fees incurred during 2006.

Station direct operating expenses, consisting primarily of news, engineering and programming, and selling, general and administrative expenses, net of
trade, increased by $0.4 million, or 9.7% for the nine months ended September 30, 2006, compared to the same period in 2005. The increase was primarily due to higher programming costs relating to fees attributed to the renewal of network
affiliation agreements, along with an increase in fees for news services provided by the networks.

Fees incurred pursuant to local service
agreements with Nexstar relate to fees for services provided by Nexstar for the production of newscasts, technical maintenance, promotional and administrative support. For the nine months ended September 30, 2006, these expenses decreased $2.7
million, or 31.5% from the same period in 2005. The decrease was primarily attributed to the amendment of certain SSAs effective January 1, 2006, which decreased our payments to Nexstar.

Amortization of broadcast rights, excluding barter, for the nine months ended September 30, 2006, decreased by $0.1 million, or 8.1% from the same
period in 2005. The decrease was primarily attributed to broadcast rights being replaced with negotiated lower cost of broadcast programming.

Amortization of intangible assets for the nine months ended September 30, 2006, decreased by $0.7 million, or 13.9% compared to the same period in 2005. The decrease was primarily the result of intangible assets at certain stations
becoming fully amortized.

Depreciation of property and equipment for the nine months ended September 30, 2006, increased by $0.4
million, or 17.8%, compared to the same period in 2005. The increase was primarily attributed to accelerating the depreciation of certain assets due to the Companys reassessment of their estimated remaining useful lives.

Income from Operations

Income
from operations was $6.3 million for the nine months ended September 30, 2006, compared to $1.0 million for the same period of 2005, an increase of $5.3 million, or 512.4%. The increase in income from operations for the nine months ended
September 30, 2006 was primarily attributed to the increase in total net revenue and decrease in fees incurred pursuant to local service agreements with Nexstar, as discussed above.

Interest Expense

Interest
expense, including amortization of debt financing costs, increased by $2.6 million, or 39.2%, for the nine months ended September 30, 2006, compared to the same period in 2005. The increase in interest expense was primarily attributed to higher
interest rates in 2006 under our senior credit facility.

Loss on Extinguishment of Debt

Loss on extinguishment of debt of $0.5 million for the nine months ended September 30, 2005 consisted of the write off of $0.1 million of previously
capitalized debt financing costs and $0.4 million of transaction costs related to the refinancing of our senior secured credit facility in April 2005.

Income Taxes

Income taxes were $0.9 million for the nine months ended September 30,
2006, compared to $1.0 million for the same period in 2005, a decrease of $0.1 million, or 13.0%. The decrease in income taxes was primarily due to a $0.1 million reduction in our net deferred tax liabilities position resulting from enactment of the
new Texas Margin Tax in the second quarter of 2006. 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. No tax benefit was recorded with respect to the losses for 2006 and 2005, 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. On March 8, 2006, 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
our available cash, the residual cash flows we retain under the local service agreements with Nexstar and available borrowings under our senior credit facility



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should be sufficient to fund working capital, capital expenditure requirements, interest payments and scheduled debt principal payments for at least the next
twelve months. In order to meet future cash needs we may, from time to time, borrow under our available credit facility. We will continue to evaluate the best use of our operating cash flow among capital expenditures, acquisitions and debt
reduction.

Overview

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



|                                                   |  |                                 |         |   |                  |   |         |  
|-------------------------------------------------- |  | ------------------------------- | ------- | - | ---------------- | - | ------- | -
|                                                   |  | Nine Months Ended September 30, |        
|                                                   |  | 2006                            |         |   | 2005             |  
|                                                   |  | (in thousands)                  |        
|Net cash provided by operating activities          |  | $                               | 2,065   |   |                  | $ | 2,527   |  
|Net cash used for investing activities             |  |                                 | (1,191  | ) |                  |   | (7,151  | )
|Net cash used for financing activities             |  |                                 | (1,295  | ) |                  |   | (835    | )
|                                                   |  |                                 |         |   |                  |   |         |  
|Net decrease in cash and cash equivalents          |  | $                               | (421    | ) |                  | $ | (5,459  | )
|                                                   |  |                                 |         |   |                  |   |         |  
|Cash paid for interest                             |  | $                               | 9,051   |   |                  | $ | 6,570   |  
|Cash paid for income taxes, net                    |  | $                               |        |   |                  | $ | 11      |  
|                                                   |  |                                
|                                                   |  | September 30,2006               |         |   | December 31,2005 |  
|                                                   |  | (in thousands)                  |        
|Cash and cash equivalents                          |  | $                               | 983     |   |                  | $ | 1,404   |  
|Long-term debt including current portion           |  | $                               | 170,973 |   |                  | $ | 172,268 |  
|Unused commitments under senior credit facility(1) |  | $                               | 47,500  |   |                  | $ | 47,500  |  

---

|(1) | As of September 30, 2006, there was approximately $63.0 million of total available borrowings that could be drawn under the Nexstar and Mission senior secured credit
facilities.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Cash Flows  Operating Activities

The comparative net cash provided by operating activities decreased by $0.5 million during the nine months ended September 30, 2006 compared to the
same period in 2005. The decrease was primarily due to the timing of payments made to Nexstar.

Cash paid for interest increased by $2.5
million during the nine months ended September 30, 2006 compared to the same period in 2005 due to higher interest rates in 2006 under our senior credit facility.

Due to our recent history of net operating losses, we currently do not pay any federal income taxes. These net operating losses may be carried forward, subject to expiration and certain limitations, and used to reduce
taxable earnings in future years. Through the use of available loss carryforwards, it is possible that we may not pay significant amounts of federal income taxes in the foreseeable future.

Cash Flows  Investing Activities

The comparative net cash used for investing activities decreased by $6.0 million during the nine months ended September 30, 2006 compared to the same period in 2005. Cash flows from investing activities consist primarily of cash used
for capital additions and station acquisitions. The decrease was due to a decrease in acquisition related payments.

Capital expenditures
were $1.2 million for the nine months ended September 30, 2006, compared to $1.0 million for the nine months ended September 30, 2005. The increase was primarily attributable to digital conversion expenditures, which increased from $0.6
million for the nine months ended September 30, 2005 to $1.0 million for the same period in 2006.

There was no cash used for station
acquisitions for the nine months ended September 30, 2006, compared to $6.1 million for the nine months ended September 30, 2005. Acquisition related payments for the nine months ended September 30, 2005 included the remaining payment
of $5.75 million, exclusive of transaction costs, for the acquisition of WTVO.

Cash Flows  Financing Activities

The comparative net cash used for financing activities increased by $0.5 million during the nine
months ended September 30, 2006 compared to the same period in 2005, primarily due to the increase in repayments of term loans during 2006 under our senior secured credit facility. There were $1.3 million of scheduled term loan maturities for
the nine months ended September 30, 2006, compared to $0.4 million for the nine months ended September 30, 2005, an increase of $0.9 million. During the nine months ended September 30,



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2005, there were payments of debt financing costs of $0.8 million made in connection with the April 2005 refinancing of our senior secured credit facility.

The April 2005 refinancing of our senior credit facility provided net cash proceeds of $0.3 million, before the payment of transaction
fees and expenses, consisting of gross proceeds obtained under senior credit facility term loans of $172.7 million and the repayments of previous senior credit facility term and revolving borrowings of $172.4 million.

Although our senior credit facility now 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 September 30, 2006, we had debt of $171.0 million, which represented 218.5% 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 reduces the funds available for working capital, capital expenditures, acquisitions and other general corporate purposes.

The following table summarizes the approximate aggregate amount of principal indebtedness scheduled to mature for the periods referenced as of
September 30, 2006:



|                          |  |                |         |                  |   |           |  |           |       |            |   |       |  |   |        
|------------------------- |  | -------------- | ------- | ---------------- | - | --------- |  | --------- | ----- | ---------- | - | ----- |  | - | -------
|                          |  | Total          |         | Remainderof 2006 |   | 2007-2008 |  | 2009-2010 |       | Thereafter
|                          |  | (in thousands)
|Senior credit facility(1) |  | $              | 170,973 |                  | $ | 432       |  | $         | 3,454 |            | $ | 3,454 |  | $ | 163,633

---

|(1) | Quarterly principal payments under our senior credit facility term loan commenced on December 30, 2005.
|--- | -------------------------------------------------------------------------------------------------------

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 September 30, 2006, Nexstar has a maximum commitment of $209.2 million under
its bank credit facility, of which $162.0 million of debt is 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 Digital Television (DTV) Conversion

Television broadcasting in the United States
is moving from an analog transmission system to a digital (DTV) transmission system. It will be expensive to convert our stations from the current analog format to the digital broadcast format. All of the television stations that we own
and operate are broadcasting at least a low-power digital television signal. The Companys conversion to a low-power DTV signal required an average initial capital expenditure of approximately $0.2 million per station.

The FCC established dates by which all television stations were required to be broadcasting with a full-power DTV signal. As of September 30, 2006,
our stations WUTR, WTVO and WYOU are broadcasting with full-power DTV signals. Stations that are not in compliance with the full-power DTV broadcasting dates were permitted to request an extension of time from the FCC to complete the build-out of
their full-power DTV facilities. We filed a request for extension of time to construct full-power DTV facilities for our remaining stations. The FCC has not yet acted on this request for extension of time.



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DTV conversion expenditures were $1.0 million and $0.6 million, respectively, for the nine months ended
September 30, 2006 and 2005. We estimate that it will require an average capital expenditure of approximately $1.5 million per station (for 10 stations) 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 Acquisition

On April 18, 2006, Nexstar and us announced that we had filed an application with the FCC for consent for Nexstar to sell KFTA Channel 24 (Ft. Smith,
Arkansas) to us for $5.6 million. We intend to finance the acquisition through cash on hand and borrowings under our senior secured credit facility.

No Off-Balance Sheet Arrangements

At September 30, 2006, 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 32 through 33 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, 2005. Management believes that as of September 30, 2006 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 the recently issued accounting pronouncements including our expected date of
adoption and effects on results of operations and financial position.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact are forward-looking statements for purposes of federal and state securities laws, including: any projections or
expectations of earnings, revenue, financial performance, liquidity and capital resources or other financial items; any assumptions or projections about the television broadcasting industry; any statements of our plans, strategies and objectives for
our future operations, performance, liquidity and capital resources or other financial items; any statements concerning proposed new products, services or developments; any statements regarding future economic conditions or performance; any
statements of belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may include the words may, will, should, could, would,
predicts, potential, continue, expects, anticipates, future, intends, plans, believes, estimates and other similar words.

Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ
from this projection or assumption in any of our forward-looking statements. Our future financial position and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties, including
those described in our Annual Report on Form 10-K for the year ended December 31, 2005 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.



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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 September 30, 2006 under our senior credit facility bear interest at 7.12%, 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 September 30, 2006 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 to |   | Interest rate increase
|                       |  | 100 BPS                |        | 50 BPS       |   | interest rate          |  | 50 BPS |        | 100 BPS
|                       |  | (in thousands)        
|Senior credit facility |  | $                      | 10,464 |              | $ | 11,318                 |  | $      | 12,173 |         | $ | 13,028 |  | $ | 13,883

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. 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 in our Annual Report on Form 10-K for the year ended December 31, 2005.



|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.



|I
TEM 6. | Exhibits
|-------- | --------



|           |  |                                                                                            
|---------- |  | -------------------------------------------------------------------------------------------
|ExhibitNo. |  | Exhibit Index                                                                              
|31.1       |  | Certification of David S. Smith pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
|           | 
|32.1       |  | Certification of David S. Smith pursuant to 18 U.S.C. ss. 1350.*                           

---

|* | Filed herewith
|- | --------------



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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



MISSION BROADCASTING, INC./s/ DAVID S. SMITHBy:

David S. SmithIts:

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


Dated: November 9, 2006



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