UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the fiscal year ended December 31, 2019

for the fiscal year ended December 31, 2018

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from to .

for the transition period from to .

Commission File Number: 333-62916-02

MISSION BROADCASTING, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	~~51-0388022~~	51-0388022
(State of Organization or Incorporation)	~~(IRS Employer Identification No.)~~	(IRS Employer Identification No.)
30400 Detroit Road, Suite 304 Westlake, Ohio	44145
(Address of Principal Executive Offices)	(Zip Code)
(440) 526-2227
(Registrant’s Telephone Number, Including Area Code)

Securities Registered Pursuant to Section 12(b) of the Act: None

901 Indiana Ave, Suite 375, Wichita Falls, Texas		76301
(Address of Principal Executive Offices)		(Zip Code)

~~Securities~~Registrant’s ~~Registered~~Telephone ~~Pursuant~~Number, toIncluding ~~Section 12(g)~~Area ~~of the Act~~Code: ~~None~~(940) 228-7861

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

N/A

Securities registered pursuant to section 12(g) of the Act: None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☒ No ☐

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 ☐ No ☒

Note: The registrant is a voluntary filer and is not subject to the filing requirements. However, the registrant 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.

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark ifwhether ~~disclosure~~the ofregistrant ~~delinquent~~is ~~filers~~a ~~pursuant~~large toaccelerated ~~Item 405~~filer, ofan ~~Regulation~~accelerated Sfiler, a non-Kaccelerated ~~(§229.405)~~filer, isa ~~not~~smaller ~~contained~~reporting ~~herein~~company, ~~and~~or ~~will~~an ~~not~~emerging begrowth ~~contained,~~company. toSee the ~~best~~definitions of ~~the~~“large ~~Registrant’s~~accelerated ~~knowledge~~filer,” in“accelerated ~~definitive~~filer,” ~~proxy~~“smaller orreporting ~~information~~company,” ~~statements~~and ~~incorporated~~“emerging bygrowth ~~reference~~company” in ~~Part~~Rule ~~III~~12b-2 of ~~this~~the ~~Form~~Exchange ~~10-K or any amendment to this Form 10-K~~Act. ☒

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

~~None of the voting or non-voting common equity of the registrant is held by a non-affiliate of the registrant. There is no publicly traded market for any class of common equity of the registrant.~~ As of March 2227, ~~2019~~2020, the Registrant had 1,000 shares of common stock outstanding, held by two shareholders.

TABLE OF CONTENTS

		Page
PART I
ITEM 1.	Business	2
ITEM 1A.	Risk Factors	10
ITEM 1B.	Unresolved Staff Comments	1820
ITEM 2.	Properties	1820
ITEM 3.	Legal Proceedings	1820
ITEM 4.	Mine Safety Disclosures	1920
PART II
ITEM 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	1921
ITEM 6.	Selected Financial Data	2022
ITEM 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2224
ITEM 7A.	Quantitative and Qualitative Disclosures About Market Risk	3134
ITEM 8.	Financial Statements and Supplementary Data	3234
ITEM 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	3234
ITEM 9A.	Controls and Procedures	3235
ITEM 9B.	Other Information	3235
PART III
ITEM 10.	Directors, Executive Officers and Corporate Governance	3336
ITEM 11.	Executive Compensation	3437
ITEM 12.	Security Ownership of Certain Beneficial Owners and Management, and Related Stockholder Matters	3437
ITEM 13.	Certain Relationships and Related Transactions, and Director Independence	3538
ITEM 14.	Principal Accountant Fees and Services	3639
PART IV
ITEM 15.	Exhibits and Financial Statement Schedules	3740
ITEM 16.	Form 10-K Summary	3740
Index to Exhibits		E-1
Index to Financial Statements		F-1

General

As used in this Annual Report on Form 10-K and unless the context indicates otherwise, “Mission,” “we,” “our,” “ours,” “us” and the “Company” refer to Mission Broadcasting, Inc., and “Nexstar” refers to Nexstar Media Group, Inc. and its consolidated subsidiaries. Mission has entered into time brokerage, shared services and joint sales agreements (which we generally refer to as “local service agreements”) with certain television stations owned by Nexstar, but Mission does not own any equity interests in Nexstar and Nexstar does not own any equity interests in Mission. For a description of the relationship between Mission and Nexstar, see Part III Item 13. “Certain Relationships and Related Transactions, and Director Independence.”

There are 210 generally recognized television markets, known as Designated Market Areas, or “DMAs,” in the United States. DMAs are ranked in size according to various factors based upon actual or potential audience. DMA rankings contained in this Annual Report on Form 10-K are from Investing in Television Market Report ~~2018~~2019 4th Edition, as published by BIA Financial Network, Inc.

Reference is made in this Annual Report on Form 10-K to the following trademarks/tradenames which are owned by the third parties referenced in parentheses: Two and a Half Men (Warner Bros. Domestic Television) and Entertainment Tonight (CBS Television Distribution).

Cautionary Note Regarding Forward-Looking Statements

This Annual Report on Form 10-K contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). 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~~predict,” “potential,” “continue,” “~~expects~~expect,” “~~anticipates~~anticipate,” “future,” “~~intends~~intend,” “~~plans~~plan,” “~~believes~~believe,” “~~estimates~~estimate” 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 a 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~~including as result of the inherent risks and uncertainties discussed under Item 1A. “Risk Factors” located elsewhere in this Annual Report on Form 10-K and in our other filings with the Securities and Exchange Commission (“SEC”). The forward-looking statements made in this Annual Report on Form 10-K 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~~.

PART I

Item 1.

Business

Company Overview

We are a television broadcasting company focused exclusively on the acquisition, development and operation of television stations and interactive community websites in medium-sized markets in the United States.

We believe that medium-sized markets offer significant advantages over large-sized markets. First, because there are fewer well-capitalized acquirers with a medium-market focus, we have been successful in purchasing stations on more favorable terms than acquirers of large market stations. Second, in the majority of our markets, only four to six local commercial television stations exist. As a result, we achieve lower programming costs than stations in larger markets because the supply of quality programming exceeds the demand.

Our stations provide free over-the-air programming to our markets’ television viewing audiences. This programming includes (a) programs produced by networks with which the stations are affiliated; (b) programs that the stations produce; and (c) first-run and rerun syndicated programs that the stations acquire. Our primary source of revenue is indirectly derived from the sale of commercial air time on our stations to local and national advertisers by Nexstar under local service agreements. We also earn revenue from our retransmission consent agreements with traditional multichannel video programming distributors (“MVPDs”), such as cable and satellite providers, and ~~over-the-top~~online video distributors (“~~OTTDs~~OVDs”), companies that provide video content through internet streaming.

We are a Delaware corporation formed in 1998. Our principal offices are located at ~~30400~~901 ~~Detroit~~Indiana ~~Road~~Ave, Suite ~~304~~375, ~~Westlake~~Wichita Falls, ~~Ohio~~Texas ~~44145~~76301. Our telephone number is (~~440~~940) ~~526‑2227.~~ 228-7861.

Local Service Agreements and Purchase Options

The Company has entered into local service agreements with Nexstar to provide sales and/or operating services to all of its stations. For the stations with 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 to Nexstar. For each station with which the Company has entered into an SSA, it has also entered into a joint sales agreement (“JSA”), whereby Nexstar sells certain advertising time of the station and retains a percentage of the related revenue. For the stations with 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, based on the station’s monthly operating expenses. JSA and TBA fees generated from Nexstar under the agreements are reported as “Revenue from Nexstar Broadcasting, Inc.,” and SSA fees incurred by Mission under the agreements are reported as “Fees incurred pursuant to local service agreements with Nexstar Broadcasting, Inc.” in the accompanying Statements of Operations.

Nexstar guarantees all obligations incurred under our senior secured credit facility. We are a guarantor of the senior secured credit facility entered into by Nexstar, ~~and~~ the 6$1.~~125~~785 billion 5.625% senior unsecured notes due 2027 (the “65.~~125~~625% Notes due 2027”) issued by Nexstar and the $900.0 million 5.625% senior unsecured notes due 2024 (the “5.625% Notes due 2024”) issued by Nexstar. In consideration of Nexstar’s guarantee of our senior secured credit facility, we have granted Nexstar purchase options to acquire the assets and assume the liabilities of each Mission television station 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. Additionally, on November 29, 2011, Mission’s shareholders granted Nexstar an option to purchase any or all of our stock for a price equal to the pro rata portion of the greater of (1) five times the Mission stations’ cash flow, as defined in the agreement, reduced by the amount of indebtedness, as defined in the agreement, or (2) $100,000. These option agreements (which expire on various dates between 2021 and 2028) are freely exercisable or assignable by Nexstar without our consent or approval. We expect these option agreements to be renewed upon expiration. Nexstar’s acquisition of any station or our stock pursuant to an exercise of the applicable option is subject to prior Federal Communications Commission (“FCC”) approval.

Under the local service 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 local service agreements generally have a term of eight to ten years and have terms for renewal periods. Nexstar indemnifies Mission from Nexstar’s activities pursuant to the local service agreements ~~to which Nexstar is a party~~.

Under the local service agreements, Nexstar receives substantially all of the Company’s available cash, after satisfaction of operating costs and debt obligations. The Company anticipates that Nexstar will continue to receive substantially all of its available cash, after satisfaction of operating costs and debt obligations. In compliance with FCC regulations for both the Company and Nexstar, Mission maintains complete responsibility for and control over programming, finances, personnel and operations of its stations. Mission had the following local service agreements in effect with Nexstar as of December 31, 2018: 2

Service Agreements		Full Power Stations
TBA Only		WFXP, KHMT and KFQX
SSA & JSA		KJTL, KLRT, KASN, KOLR, KCIT, KAMC, KRBC, KSAN, WUTR, WAWV, WYOU, KODE, WTVO, KTVE, WTVW and WVNY

Refer to Part III, Item 13. “Certain Relationships and Related Transactions, and Director Independence” for a more complete disclosure of the local service and option agreements our stations had in effect as of December 31, ~~2018~~2019.

Business Strategy

The operating revenue of our stations is derived primarily from (1) retransmission consent agreements with MVPDs and ~~OTTDs~~OVDs that permit the operators to retransmit our stations’ signals to their subscribers in exchange for the payment of compensation to us and (2) broadcast advertising revenue sold and collected by Nexstar and paid to us under the JSAs. Broadcast advertising revenue is affected by a number of factors, including the economic conditions of the markets in which we operate, the demographic makeup of those markets and the marketing strategy employed in each market. Our primary operating expenses include network affiliation costs, which can vary based on our broadcast programming and retransmission subscribers, and fixed monthly SSA fees paid to Nexstar for news production and technical and other services. To a lesser extent our operating expenses include employee compensation and related benefits. A large percentage of the costs involved in the operation of our stations remains fixed.

The Stations

The following chart sets forth general information about the stations that we owned and operated as of December 31, ~~2018~~2019:

Market Rank(1)	Market	Full Power Stations	Primary Affiliation	Low Power Stations / Multicast Channels	Other Affiliation	FCC License Expiration Date
57	Little Rock, AR	KLRT KASN	FOX The CW	KLRT-D2	Escape	6/1/2021 6/1/2021
60	Wilkes Barre, PA	WYOU	CBS	WYOU-D2, D3, D4	CourtTV Mystery, Bounce, Cozi TV	8/1/2023
62	~~Wilkes~~Little ~~Barre~~Rock, PAAR	~~WYOU~~KLRT KASN	~~CBS~~FOX The CW	~~WYOU~~KLRT-D2~~, D3, D4~~	~~Escape,~~CourtTV ~~Bounce, Cozi TV~~Mystery	86/1/~~2023~~2021 6/1/2021
72	Springfield, MO	KOLR	CBS	KOLR-D2, D3, D4	Laff, Grit, CBN	2/1/2022
73	Springfield, MO	KOLR	CBS	KOLR-D2, D3, D4	Laff, Grit, CBN	2/1/2022
96	Burlington, VT	WVNY	ABC	WVNY-D2, D3, D4	Laff, Grit, Quest	4/1/2023
103	Evansville, IN	WTVW	The CW	WTVW-D2, D3, D4	Bounce, Escape, ION	8/1/2021
105	Evansville, IN	WTVW	The CW	WTVW-D2, D3, D4	Bounce, CourtTV Mystery, ION	8/1/2021
131	Amarillo, TX	KCIT	FOX	KCIT-D2, D3, D4 KCPN-LP	Grit, Escape, Bounce MNTV	8/1/2022 8/1/2022
132	Amarillo, TX	KCIT	FOX	KCIT-D2, D3, D4 KCPN-LP	Grit, CourtTV Mystery, Bounce MNTV	8/1/2022 8/1/2022
137	Monroe, AR	KTVE	NBC	KTVE-D2, D3, D4	KARD, Laff, Escape	6/1/2021
140	Monroe, AR	KTVE	NBC	KTVE-D2, D3, D4	KARD, Laff, CourtTV Mystery	6/1/2021
139	Rockford, IL	WTVO	ABC	WTVO-D2, D3, D4	MNTV, Laff, Grit	12/1/2021
138	Rockford, IL	WTVO	ABC	WTVO-D2, D3, D4	MNTV, Laff, Grit	12/1/2021
143	Lubbock, TX	KAMC	ABC	KAMC-D2, D3, D4	Escape, Bounce, CBN	8/1/2022
142	Lubbock, TX	KAMC	ABC	KAMC-D2, D3, D4	CourtTV Mystery, Bounce, CBN	8/1/2022
148	Wichita Falls, TX	KJTL	FOX	KJTL-D2, D3, D4 KJBO-LP	Grit, Bounce, Escape MNTV	8/1/2022 8/1/2022
147	Wichita Falls, TX	KJTL	FOX	KJTL-D2, D3, D4 KJBO-LP	Grit, Bounce, CourtTV Mystery MNTV	8/1/2022 8/1/2022
151	Erie, PA	WFXP	FOX	WFXP-D2, D3	Grit, Bounce	8/1/2023
152	Erie, PA	WFXP	FOX	WFXP-D2, D3, D4	Grit, Bounce, AntennaTV	8/1/2023
153	Joplin, MO	KODE	ABC	KODE-D2, D3, D4	Grit, Bounce, ION	2/1/2022
158	Terre Haute, IN	WAWV	ABC	WAWV-D2, D3	Grit, Bounce	8/1/2021
160	Terre Haute, IN	WAWV	ABC	WAWV-D2, D3	Grit, Bounce	8/1/2021
165	Abilene, TX	KRBC	NBC	KRBC-D2, D3, D4	Grit, Laff, Bounce	8/1/2022
164	Abilene, TX	KRBC	NBC	KRBC-D2, D3, D4	Grit, Laff, Bounce	8/1/2022
167	Billings, MT	KHMT	FOX	KHMT-D2, D3, D4	Grit, Laff, ION	4/1/2022
168	Billings, MT	KHMT	FOX	KHMT-D2, D3	CourtTV, ION	4/1/2022
169	Utica, NY	WUTR	ABC	WUTR-D2, D3, D4	MNTV, Grit, Bounce	6/1/2023
172	Utica, NY	WUTR	ABC	WUTR-D2, D3, D4	MNTV, Grit, Bounce	6/1/2023
187	Grand Junction, CO	KFQX	FOX	KFQX-D2, D3, D4	CBS, Escape, Grit	4/1/2022
188	Grand Junction, CO	KFQX	FOX	KFQX-D2, D3, D4	CBS, CourtTV Mystery, Grit	4/1/2022
196	San Angelo, TX	KSAN	NBC	KSAN-D2, D3, D4	Laff, Bounce, ION	8/1/2022
195	San Angelo, TX	KSAN	NBC	KSAN-D2, D3, D4	Laff, Bounce, ION	8/1/2022

(1) Market rank refers to ranking the size of the DMA in which the station is located in relation to other DMAs. Source: Investing in Television Market Report ~~2018~~2019 4th Edition, as published by BIA Financial Network, Inc.

Industry Background

Commercial television broadcasting began in the United States on a regular basis in the 1940s. A limited number of channels are available for over-the-air broadcasting in any one geographic area and a license to operate a television station must be granted by the FCC. All television stations in the country are grouped by The Nielsen Company (US), LLC, a national audience measuring service, into 210 generally recognized television markets, known as DMAs, that are ranked in size according to various metrics based upon actual or potential audience. Each DMA is an exclusive geographic area consisting of all counties in which the home-market commercial stations receive the greatest percentage of total viewing hours. Nielsen publishes data on estimated audiences for the television stations in each DMA on a quarterly basis. The estimates are expressed in terms of a “rating,” which is a station’s percentage of the total potential audience in the market, or a “share,” which is the station’s percentage of the audience actually watching television. A station’s rating in the market can be a factor in determining advertising rates.

Most television stations are affiliated with networks and receive a significant part of their programming, including prime-time hours, from networks. Whether or not a station is affiliated with one of the four major networks (NBC, CBS, FOX or ABC) has a significant impact on the composition of the station’s revenue, expenses and operations. Network programming is provided to the affiliate by the network in exchange for the payment to the network of affiliation fees and the network’s retention of a substantial majority of the advertising time during network programs. The network then sells this advertising time and retains the revenue. The affiliate retains the revenue from the remaining advertising time it sells during network programs and from advertising time it sells during non-network programs.

Broadcast television stations compete for advertising revenue primarily with other commercial broadcast television stations, cable and satellite television systems, ~~OTTDs~~OVDs, Google, Facebook and other online media, newspapers, radio stations and non-commercial, religious and Spanish-language broadcasting stations serving the same market. In addition, the Internet and other leisure activities may draw viewers away from commercial television stations.

Network Affiliations

All of the full power television stations that we own and operate as of December 31, ~~2018~~2019 are affiliated with a network pursuant to an affiliation agreement. The agreements with ABC, FOX, NBC and CBS are the most significant to our operations. The terms of these agreements expire as discussed below:

Network Affiliations		Expiration Date
ABC		All 6 agreements expire in December 2022.
FOX		All 6 agreements expire in ~~December~~August ~~2019~~2023.
NBC		All 3 agreements expire in December ~~2019~~2023.
CBS		Of the 2 agreements, one expires in June 2020 and one expires in December 2021.

We expect the network affiliation agreements listed above to be renewed upon expiration.

Competition

Competition in the television industry takes place on several levels: competition for audience, competition for programming and competition for advertising.

Audience. We compete for audience share specifically on the basis of program popularity. The popularity of a station’s programming has a direct effect on the advertising rates it can charge its advertisers. A portion of the daily programming on the stations that we own is supplied by the network with which each station is affiliated. In those periods, the stations are dependent upon the performance of the network programs in attracting viewers. Stations program non-network time periods with a combination of self-produced news, public affairs and other entertainment programming, including movies and syndicated programs. The major television networks have also begun to provide their programming directly to the consumer via portable digital devices such as tablets and cell phones, which presents an additional source of competition for television broadcaster audience share. Other sources of competition for audience include home entertainment systems (such as DVDs and DVRs), video-on-demand and pay-per-view, the Internet (including network distribution of programming through websites and mobile platforms) and gaming devices.

Although the commercial television broadcast industry historically has been dominated by the ABC, NBC, CBS and FOX television networks, other newer television networks and the growth in popularity of subscription systems, such as local cable and direct broadcast satellite (“DBS”) systems and video streaming services, which air exclusive programming not otherwise available in a market, have become significant competitors for the over-the-air television audience.

Programming. Competition for programming involves negotiating with national program distributors or syndicators that sell first-run and rerun packages of programming. Stations compete against in-market broadcast station operators for exclusive access to off-network reruns (such as Two and a Half Men) and first-run product (such as Entertainment Tonight) in their respective markets. Cable systems generally do not compete with local stations for programming, although various national cable networks from time to time have acquired programs that would have otherwise been offered to local television stations. Warner Media, LLC, Comcast Corporation, Viacom Inc., CBS Corporation, The News Corporation Limited and the Walt Disney Company each owns a television network and multiple cable networks and also owns or controls major production studios, which are the primary sources of programming for the networks. It is uncertain whether in the future such programming, which is generally subject to short-term agreements between the studios and the networks, will be moved from or to the networks. Television broadcasters also compete for non-network programming unique to the markets they serve. As such, stations strive to provide exclusive news stories and unique features such as investigative reporting and coverage of community events and to secure broadcast rights for regional and local sporting events. 4

~~Advertising~~Programming. Competition for programming involves negotiating with national program distributors or syndicators that sell first-run and rerun packages of programming. Stations compete against in-market broadcast station operators for ~~advertising~~exclusive ~~revenue~~access ~~with~~to ~~other~~off-network ~~television~~reruns ~~stations~~(such as Two and a Half Men) and first-run product (such as Entertainment Tonight) in their respective markets. ~~and~~Cable ~~other~~systems ~~advertising~~generally ~~media~~do ~~such~~not ascompete ~~newspapers,~~with ~~radio~~local stations, ~~magazines~~for programming, ~~outdoor~~although ~~advertising,~~various ~~transit~~national ~~advertising~~cable networks from time to time have acquired programs that would have otherwise been offered to local television stations. Warner Media, ~~yellow~~LLC ~~page~~(a ~~directories~~subsidiary of AT&T Inc.), ~~direct~~Comcast ~~mail~~Corporation, ~~MVPDs~~ViacomCBS, ~~OTTDs~~The News Corporation Limited and ~~online~~the ~~media~~Walt ~~(e.g.~~Disney ~~Google,~~Company ~~Facebook~~each owns a television network and multiple cable networks and also owns or controls major production studios, ~~etc.).~~which ~~Competition~~are the primary sources of programming for ~~advertising~~the ~~dollars~~networks. It is uncertain whether in the ~~broadcasting~~future ~~industry~~such ~~occurs~~programming, ~~primarily~~which ~~within~~is ~~individual~~generally ~~markets.~~subject ~~Generally~~to short-term agreements between the studios and the networks, awill ~~television~~be ~~broadcast~~moved ~~station~~from inor ato ~~particular~~the ~~market~~networks. ~~does~~Television ~~not~~broadcasters also compete ~~with~~for non-network programming unique to the markets they serve. As such, stations instrive ~~other~~to ~~market~~provide ~~areas~~exclusive news stories and unique features such as investigative reporting and coverage of community events and to secure broadcast rights for regional and local sporting events.

5Advertising. Stations compete for advertising revenue with other television stations in their respective markets and other advertising media such as newspapers, radio stations, magazines, outdoor advertising, transit advertising, yellow page directories, direct mail, MVPDs, OVDs and online media (e.g. Google, Facebook, etc.). Competition for advertising dollars in the broadcasting industry occurs primarily within individual markets. Generally, a television broadcast station in a particular market does not compete with stations in other market areas.

Additional Competitive Factors. The broadcasting industry is continually faced with technological change and innovation which increase the popularity of competing entertainment and communications media. Further advances in technology may increase competition for household audiences and advertisers. An increase in the popularity of ~~OTTDs~~OVDs may result in popular product offerings that do not include television broadcast stations. The increased use of digital technology by MVPDs, along with video compression techniques, will reduce the bandwidth required for television signal transmission. These technological developments are applicable to all video delivery systems, including over-the-air broadcasting, and have the potential to provide vastly expanded programming to highly targeted audiences. Reductions in the cost of creating additional channel capacity could lower entry barriers for new channels and encourage the development of increasingly specialized “niche” programming. This ability to reach very narrowly defined audiences is expected to alter the competitive dynamics for advertising expenditures. We are unable to predict the effect that these or other technological changes will have on the broadcast television industry or on the future results of our operations.

Federal Regulation

Television broadcasting is subject to the jurisdiction of the FCC under the Communications Act of 1934, as amended (the “Communications Act”). The following is a brief discussion of certain (but not all) provisions of the Communications Act and the FCC’s regulations and policies that affect the business operations of television broadcast stations. Over the years, the U.S. Congress and the FCC have added, amended and deleted statutory and regulatory requirements to which station owners are subject. Some of these changes have a minimal business impact whereas others may significantly affect the business or operation of individual stations or the broadcast industry as a whole. For more information about the nature and extent of FCC regulation of television broadcast stations, you should refer to the Communications Act and the FCC’s rules, case precedent, public notices and policies.

License Grant and Renewal. The Communications Act prohibits the operation of broadcast stations except under licenses issued by the FCC. Television broadcast licenses are granted for a maximum term of eight years and are subject to renewal upon application to the FCC. The FCC is required to grant an application for license renewal if during the preceding term the station served the public interest, the licensee did not commit any serious violations of the Communications Act or the FCC’s rules, and the licensee committed no other violations of the Communications Act or the FCC’s rules which, taken together, would constitute a pattern of abuse. If a licensee fails to meet this standard the FCC may grant renewal on terms and conditions that it deems appropriate, including a monetary forfeiture or renewal for a term less than the normal eight-year period.

After a renewal application is filed, interested parties, including members of the public, may file petitions to deny the application, to which the licensee/renewal applicant is entitled to respond. After reviewing the pleadings, if the FCC determines that there is a substantial and material question of fact whether grant of the renewal application would serve the public interest, the FCC is required to hold a hearing on the issues presented. If, after the hearing, the FCC determines that the renewal applicant has met the renewal standard, the FCC will grant the renewal application. If the licensee/renewal applicant fails to meet the renewal standard or show that there are mitigating factors entitling it to renewal subject to appropriate sanctions, the FCC can deny the renewal application. In the vast majority of cases where a petition to deny is filed against a renewal application, the FCC ultimately grants the renewal without a hearing. No competing application for authority to operate a station and replace the incumbent licensee may be filed against a renewal application.

In addition to considering rule violations in connection with a license renewal application, the FCC may sanction a station licensee for failing to observe FCC rules and policies during the license term, including the imposition of a monetary forfeiture.

Under the Communications Act, the term of a broadcast license is automatically extended during the pendency of the FCC’s processing of a timely renewal application.

Station Transfer. The Communications Act prohibits the assignment or the transfer of control of a broadcast license without prior FCC approval.

Ownership Restrictions. The Communications Act limits the extent of non-U.S. ownership of companies that own U.S. broadcast stations. Under this restriction, the holder of a U.S. broadcast license may have no more than 20% non-U.S. ownership (by vote and by equity). The Communications Act further prohibits more than 25% indirect foreign ownership or control of a licensee through a parent company if the FCC determines the public interest will be served by enforcement of such restriction. The FCC has interpreted this provision of the Communications Act to require an affirmative public interest finding before indirect foreign ownership of a broadcast licensee may exceed 25%. The FCC will entertain and authorize, on a case-by-case basis and upon a sufficient public interest showing and favorable executive branch review, proposals to exceed the 25% indirect foreign ownership limit in broadcast licensees. In September 2016, the FCC adopted rules to simplify and streamline the process for requesting authority to exceed the 25% indirect foreign ownership limit and reformed the methodology that publicly traded broadcasters ~~may~~must use to assess their compliance with the foreign ownership restrictions.

The FCC also has rules which establish limits on the ownership of broadcast stations. These ownership limits apply to attributable interests in a station licensee held by an individual, corporation, partnership or other entity. In the case of corporations, officers, directors and voting stock interests of 5% or more (20% or more in the case of certain passive investors, such as insurance companies and bank trust departments) are considered attributable interests. For partnerships, all general partners and non-insulated limited partners are attributable. Limited liability companies are treated the same as partnerships. The FCC also considers attributable the holder of more than 33% of a licensee’s total assets (defined as total debt plus total equity), if that person or entity also provides over 15% of the station’s total weekly broadcast programming or has an attributable interest in another media entity in the same market which is subject to the FCC’s ownership rules. If a shareholder of Mission holds a voting stock interest of 5% or more (20% or more in the case of qualified investment companies, such as insurance companies and bank trust departments), we must report that shareholder, its parent entities, and attributable individuals and entities of both, as attributable interest holders in Mission.

The FCC is required to review its media ownership rules every four years to eliminate those rules it finds no longer serve the “public interest, convenience and necessity.” In August 2016, the FCC adopted a Second Report and Order (the “2016 Ownership Order”) concluding the agency’s 2010 and 2014 quadrennial reviews. The 2016 Ownership Order (1) retained the ~~then-existing~~ local television ownership rule and radio/television cross-ownership rule with minor technical modifications, (2) extended the ban on common ownership of two top-four television stations in a market to network affiliation swaps, (3) retained the ~~then-existing~~ ban on newspaper/broadcast cross-ownership in local markets while considering waivers and providing an exception for failed or failing entities, (4) retained the dual network rule, (5) made television JSA relationships attributable interests and (6) defined a category of sharing agreements designated as SSAs between commercial television stations and required public disclosure of those SSAs (while not considering them attributable). Various parties filed petitions seeking reconsideration of various aspects of the 2016 Ownership Order. On November 16, 2017, the FCC adopted an order (the “Reconsideration Order”) addressing the petitions for reconsideration. The Reconsideration Order (1) eliminated the rules prohibiting newspaper/broadcast cross-ownership and limiting television/radio cross-ownership, (2) eliminated the requirement that eight or more independently-owned television stations remain in a market for common ownership of two television stations in the market to be permissible (the “eight voices test”), (3) retained the general prohibition on common ownership of two “top four” stations in a local market but provided for case-by-case review, (4) eliminated the television JSA attribution rule, and (5) retained the SSA definition and disclosure requirement for television stations. These rule modifications took effect on February 7, 2018, when the U.S. Court of Appeals for the Third Circuit (the “Third Circuit”) denied a mandamus petition which had sought to stay their effectiveness. ~~The~~ On September 23, 2019, however, the Third Circuit issued an opinion vacating the Reconsideration Order’s ~~rule~~on ~~modifications~~the ~~(a)~~ground ~~could~~that ~~allow~~the ~~Mission~~FCC had failed to ~~acquire~~adequately aanalyze ~~second~~the ~~television~~effect ~~station~~of inthe ~~certain~~Reconsideration ~~markets~~Order’s ~~where~~deregulatory rule changes on minority and woman ownership of ~~two~~broadcast ~~television~~ stations. The ~~was~~Third ~~not~~Circuit ~~previously~~later ~~permitted,~~denied ~~(b)~~petitions ~~allow~~for ~~Mission~~en tobanc ~~acquire~~rehearing ~~television~~and ~~stations~~its ~~without~~decision ~~regard~~took toeffect ~~any~~on ~~interests~~November of29, ~~its~~2019. On ~~officers~~December 20, ~~directors~~2019, orthe ~~attributable~~FCC ~~shareholders~~issued inan ~~same-market~~order ~~radio~~reinstating ~~stations~~the orlocal ~~newspapers~~television ownership rule, ~~(c)~~the ~~permit~~radio/television ~~Mission’s~~cross-ownership ~~existing~~rule, ~~JSAs~~the ~~with~~newspaper/broadcast ~~Nexstar~~cross-ownership torule ~~remain~~and inthe ~~effect~~television ~~indefinitely,~~JSA ~~and~~attribution ~~(d)~~rule ~~could~~as ~~enable~~they ~~Mission~~existed prior to ~~enter~~the ~~into~~Reconsideration ~~new~~Order ~~JSAs~~(including ~~without~~the ~~violating~~eight ~~FCC~~voices ~~regulations~~test with respect to local television ownership). ~~The~~ ~~Reconsideration~~There ~~Order~~is ~~remains~~the ~~subject~~possibility toof ~~appeals~~further ~~before~~litigation regarding the Third Circuit’s September 2019 opinion.

In December 2018, the FCC initiated its 2018 quadrennial review with the issuance of a Notice of Proposed Rulemaking. Among other things, the FCC seeks comment on all aspects of the local television ownership rule’s implementation and whether the current version of the rule remains necessary in the public interest. Comments and reply comments in the 2018 quadrennial review ~~are~~were ~~due~~filed in the second quarter of 2019.

Local Television Ownership (Duopoly Rule). Under the current local television ownership, or “duopoly,” rule, a single entity is allowed to own or have attributable interests in two television stations in a market if (1) the two stations do not have overlapping service areas, or (2) one of the combining stations is not ranked among the top four stations in the DMA, although the FCC will consider showings that this “top four” prohibition should not apply in a given case. The duopoly rule allows the FCC to consider waivers to permit the ownership of a second station, where otherwise prohibited, where the second station has failed or is failing or unbuilt. The FCC reconfirmed that the duopoly rule continues to serve the public interest in the 2016 Ownership Order, which generally retained the rule in the form in which it had existed since 1999. In its Reconsideration Order, however, the FCC modified the duopoly rule to (1) eliminate the “eight voices” test (whereby the rule had previously required, in addition to the “top four” prohibition, that at least eight independently owned television stations remain in a market after a proposed combination) and (2) permit case-by-case review of proposed “top four” combinations (while generally retaining the “top four” prohibition). These modifications took effect on February 7, 2018. The modifications could allow Mission to acquire a second television station in certain markets where ownership of two television stations was not previously permitted. The November 2017 Reconsideration Order remains subject to federal court appeals.6

Local Television Ownership (Duopoly Rule). Under the current local television ownership, or “duopoly,” rule, a single entity is allowed to own or have attributable interests in two television stations in a market if (1) the two stations do not have overlapping service areas, or (2) after the combination there are at least eight independently owned and operating full-power television stations in the DMA with overlapping service contours and one of the combining stations is not ranked among the top four stations in the DMA. The duopoly rule allows the FCC to consider waivers to permit the ownership of a second station, where otherwise prohibited, where the second station has failed or is failing or unbuilt. In its November 2017 Reconsideration Order, the FCC modified the duopoly rule to eliminate the “eight voices” test and permit case-by-case review of proposed “top four” combinations As a result of the Third Circuit’s September 2019 opinion vacating the Reconsideration Order, the duopoly rule has been reinstated to the form in which it existed prior to the Reconsideration Order, although further litigation is possible.

The FCC attributes toward the local television ownership limits another in-market station when one station owner programs that station pursuant to a TBA or LMA, if the programmer provides more than 15% of the second station’s weekly broadcast programming. However, LMAs entered into prior to November 5, 1996 are exempt attributable interests until the FCC determines otherwise. This “grandfathering,” when reviewed by the FCC, is subject to possible extension or termination.

7In its 2016 Ownership Order, the FCC reinstated a rule that attributed another in-market station toward the local television ownership limits when one station owner sells more than 15% of the second station’s weekly advertising inventory under a JSA (this rule had been previously adopted but was vacated by the Third Circuit). Parties to JSAs entered into prior to March 31, 2014 were permitted to continue to operate under these JSAs until September 30, 2025. In the Reconsideration Order, the FCC eliminated the JSA attribution rule in its entirety. As a result of the Third Circuit’s September 2019 opinion vacating the Reconsideration Order, the rule has been reinstated, although further litigation is possible.

In ~~its~~certain ~~2016~~of ~~Ownership~~our ~~Order~~markets, ~~the~~we ~~FCC~~own ~~reinstated~~and aoperate ~~rule~~both ~~that~~full-power ~~attributed~~and ~~another in~~low-~~market~~power ~~station toward the local~~ television ~~ownership~~broadcast ~~limits~~stations. ~~when~~The ~~one station owner sells more than 15% of the second station~~FCC’s ~~weekly~~duopoly ~~advertising~~rules ~~inventory~~and ~~under~~policies aregarding ~~JSA~~ownership ~~(this rule had been previously adopted but was vacated by the U.S. Court~~ of ~~Appeals~~television ~~for~~stations ~~the Third Circuit). Parties to JSAs entered into prior to March 31, 2014 were permitted to continue to operate under these JSAs until September 30, 2025. However,~~ in the ~~Reconsideration~~same ~~Order,~~market ~~the~~apply ~~FCC~~only ~~eliminated~~to ~~the~~full-power ~~JSA~~television ~~attribution~~stations ~~rule in its entirety. This elimination took effect on February 7, 2018. As a result of this rule elimination, Mission’s existing JSAs with Nexstar may remain in effect indefinitely,~~ and ~~Mission~~not ~~may~~low-power ~~enter~~television ~~into new JSAs without violating FCC regulations~~stations. ~~The~~ ~~November 2017 Reconsideration Order remains subject to pending federal court appeals.~~

InNational ~~certain~~Television Ownership. There is no limit on the number of ~~our~~television ~~markets,~~stations wewhich a party may own ~~and~~nationally. ~~operate~~However, ~~both~~the ~~full-power~~FCC’s ~~and~~rules ~~low-power~~limit the percentage of U.S. television ~~broadcast~~households which a party may reach through its attributable interests in television stations to 39%. This rule originally provided that when calculating a party’s nationwide aggregate audience coverage, the ownership of an ultra-high frequency (in“UHF”) ~~Wichita~~station ~~Falls~~would be counted as 50% of a market’s percentage of total national audience. In August 2016, wethe ~~own~~FCC ~~and~~adopted ~~operate~~an ~~KJTL~~order ~~and~~eliminating ~~KJBO-LP~~this “UHF discount,” and that rule change became effective in ~~Amarillo~~October 2016. On April 20, we2017, ~~own~~the ~~and~~FCC ~~operate~~adopted ~~KCIT~~an ~~and~~order ~~KCPN-LP)~~on reconsideration that reinstated the discount, which took effect once again in June 2017. ~~The~~A ~~FCC’s~~federal ~~duopoly~~appeals ~~rules~~court ~~and~~dismissed ~~policies~~a ~~regarding~~petition ~~ownership~~for review of ~~television~~the ~~stations~~discount’s reinstatement in July 2018. In December 2017, the ~~same~~FCC ~~market~~initiated ~~apply~~a ~~only~~proceeding to ~~full-power~~broadly reexamine its national television ~~stations~~ownership rule, including the percentage reach cap and ~~not~~the ~~low-power~~UHF ~~television~~discount. Comments and reply comments in this proceeding were filed in 2018. Our stations ~~such~~have asa ~~KJBO-LP~~combined ~~and~~national ~~KCPN-LP~~audience reach of 3.2% of television households without the UHF discount.

~~National~~ Radio/Television Cross-Ownership. ~~There~~Rule is(One-to-a-Market noRule). ~~limit~~In onmarkets ~~the~~with ~~number~~at ofleast ~~television~~20 ~~stations~~independently ~~which~~owned amedia ~~party may own. However~~“voices,” ~~the~~ownership ~~FCC’s rules limit the percentage~~ of ~~U.S.~~one television ~~households~~station ~~which~~and aup ~~party~~to ~~may~~seven ~~reach~~radio ~~through~~stations, ~~its~~or ~~attributable~~two ~~interests in~~ television stations to(if ~~39%.~~allowed ~~This~~under ~~rule~~the ~~originally~~television ~~provided~~duopoly ~~that~~rule) ~~when~~and ~~calculating~~six aradio ~~party’s~~stations ~~nationwide~~is ~~aggregate~~permitted. ~~audience~~If ~~coverage,~~ the ~~ownership~~number of anindependently ~~ultra-high~~owned ~~frequency~~media (“~~UHF~~voices”) ~~station~~is ~~would~~fewer bethan ~~counted~~20 asbut ~~50%~~greater ofthan aor ~~market’s~~equal ~~percentage~~to of10, ~~total~~ownership ~~national~~of ~~audience. In~~one ~~August~~television ~~2016,~~station ~~the~~(or ~~FCC~~two ~~adopted~~if anallowed) ~~order~~and ~~eliminating~~four ~~this~~radio ~~“UHF~~stations ~~discount~~is permitted.” OnIn ~~reconsideration,~~markets ~~however,~~with ~~the~~fewer ~~FCC~~than ~~reinstated~~10 ~~the~~independent ~~discount~~media “voices,” ~~which~~ownership ~~took~~of ~~effect~~one ~~once~~television ~~again~~station in(or ~~June~~two ~~2017.~~if Aallowed) ~~petition~~and ~~for~~one ~~review~~radio ofstation ~~the~~is ~~FCC’s~~permitted. ~~order~~In ~~reinstating~~calculating the ~~UHF~~number ~~discount~~of ~~was~~independent ~~filed~~media “voices” in a ~~federal~~market, ~~appeals~~the ~~court.~~FCC Inincludes ~~July~~all ~~2018,~~independently ~~the~~owned ~~federal~~radio ~~court~~and ~~dismissed~~television ~~the~~stations, ~~appeal~~independently ~~for~~owned ~~lack~~cable ofsystems ~~standing. In~~(counted ~~December~~as ~~2017~~one voice), ~~the~~and ~~FCC~~independently ~~initiated~~owned adaily ~~proceeding~~newspapers towhich ~~broadly~~have ~~reexamine~~circulation ~~its~~that ~~national~~exceeds ~~television~~5% ~~ownership~~of ~~rule,~~the ~~including~~households in the ~~percentage~~market. ~~reach~~In ~~cap~~all ~~and~~cases, the ~~UHF~~television ~~discount. Comments~~ and ~~reply~~radio ~~comments~~components inof ~~this~~the ~~proceeding~~combination ~~were~~must ~~filed~~also incomply, respectively, with the ~~first~~local television ownership rule and ~~second~~the ~~quarters~~local ofradio ~~2018~~ownership rule. ~~Our~~The ~~stations~~FCC ~~have~~eliminated athe ~~combined~~radio/television ~~national~~cross-ownership ~~audience~~rule ~~reach~~in ofits ~~3.2%~~November of2017 ~~television~~Reconsideration ~~households~~Order ~~without~~but reinstated it following the ~~UHF~~Third ~~discount~~Circuit’s September 2019 decision.

~~Radio/~~Local Television/Newspaper Cross-Ownership Rule ~~(One-to-a-Market Rule)~~. AnUnder ~~FCC~~this rule, ~~formerly~~a ~~limited~~party ~~the~~is ~~extent~~prohibited tofrom ~~which~~having aan ~~party could hold~~ attributable ~~interests~~interest in ~~both~~a television ~~stations~~station and ~~radio~~a ~~stations~~daily newspaper in the same market. InThe ~~its November 2017 Reconsideration Order, however, the~~ FCC eliminated the ~~radio~~newspaper/~~television~~broadcast cross-ownership rule in its ~~entirety. This~~November ~~elimination~~2017 ~~took~~Reconsideration ~~effect~~Order onbut ~~February~~reinstated 7,it ~~2018~~following the Third Circuit’s September 2019 decision. The ~~Reconsideration~~FCC ~~Order~~may ~~remains~~consider ~~subject~~waivers toor ~~federal~~grant ~~court~~exemptions ~~appeals~~from the rule in certain circumstances.

Local Television/Newspaper Cross-Ownership Rule. An FCC rule formerly prohibited a party from having an attributable interest in a television station and a daily newspaper in the same market. In its November 2017 Reconsideration Order, however, the FCC eliminated the newspaper/broadcast cross-ownership rule in its entirety. This elimination took effect on February 7, 2018. The Reconsideration Order remains subject to federal court appeals.

Local Television/Cable Cross-Ownership. There is no FCC rule prohibiting common ownership of a cable television system and a television broadcast station in the same area.

MVPD Carriage of Local Television Signals. Broadcasters may obtain carriage of their stations’ signals on cable, satellite and other MVPDs through either mandatory carriage or through “retransmission consent.” Every three years all stations must formally elect either mandatory carriage (“must-carry” for cable distributors and “carry one-carry all” for satellite television providers) or retransmission consent. The next election must be made by October 1, 2020 and will be effective January 1, 2021. Must-carry elections require that the MVPD carry one station programming stream and related data in the station’s local market. However, MVPDs may decline a must-carry election in certain circumstances. MVPDs do not pay a fee to stations that elect mandatory carriage.

A broadcaster that elects retransmission consent waives its mandatory carriage rights, and the broadcaster and the MVPD must negotiate in good faith for carriage of the station’s signal. Negotiated terms may include channel position, service tier carriage, carriage of multiple program streams, compensation and other consideration. If a broadcaster elects to negotiate retransmission terms, it is possible that the broadcaster and the MVPD will not reach agreement and that the MVPD will not carry the station’s signal.

MVPD operators are actively seeking to change the regulations under which retransmission consent is negotiated before both the U.S. Congress and the FCC in order to increase their bargaining leverage with television stations. On March 3, 2011, the FCC initiated a Notice of Proposed Rulemaking to reexamine its rules (i) governing the requirements for good faith negotiations between MVPDs and broadcasters, including implementing a prohibition on one station negotiating retransmission consent terms for another station under a local service agreement; (ii) for providing advance notice to consumers in the event of dispute; and (iii) to extend certain cable-only obligations to all MVPDs. The FCC also asked for comment on eliminating the network non-duplication and syndicated exclusivity protection rules, which may permit MVPDs to import out-of-market television stations in certain circumstances.

8In March 2014, the FCC amended its rules governing “good faith” retransmission consent negotiations to provide that it is a per se violation of the statutory duty to negotiate in good faith for a television broadcast station that is ranked among the top-four stations in a market (as measured by audience share) to negotiate retransmission consent jointly with another top-four station in the same market if the stations are not commonly owned. On December 5, 2014, the U.S. Congress extended the joint negotiation prohibition to all non-commonly owned television stations in a market. Under this rule and the subsequent legislation, stations may not (1) delegate authority to negotiate or approve a retransmission consent agreement to another non-commonly owned station located in the same DMA or to a third-party that negotiates on behalf of another non-commonly owned station in the same DMA; or (2) if located in the same DMA and not commonly owned, facilitate or agree to facilitate coordinated negotiation of retransmission consent terms between themselves, including through the sharing of information. Accordingly, we must separately negotiate our retransmission consent agreements with MVPDs. Concurrently with its adoption of the prohibition on certain joint retransmission consent negotiations, the FCC also adopted a further notice of proposed rulemaking which sought additional comment on the elimination or modification of the network non-duplication and syndicated exclusivity rules. Comments and reply comments on the further notice were filed in 2014.

InCongress’s ~~March~~December ~~2014~~5, ~~the~~2014 ~~FCC~~legislation ~~amended~~also ~~its~~directed ~~rules~~the ~~governing~~FCC ~~“good~~to ~~faith”~~commence ~~retransmission~~a ~~consent~~rulemaking ~~negotiations~~ to ~~provide~~“review ~~that~~its ittotality ~~is a per se violation~~ of the ~~statutory~~circumstances ~~duty~~test tofor ~~negotiate in~~ good faith ~~for a television broadcast station that is ranked among the top-four stations in a market (as measured by audience share) to negotiate~~ [retransmission consent] ~~jointly with another top-four station in the same market if the stations are not commonly owned~~negotiations.” OnThe ~~December~~FCC 5,commenced ~~2014,~~this ~~the~~proceeding ~~U.S. Congress extended the joint negotiation prohibition to all non-commonly owned television stations~~ in aSeptember ~~market. Under~~2015, ~~this~~and ~~rule~~comments and ~~the~~reply ~~subsequent~~comments ~~legislation,~~were ~~same-market~~filed ~~stations may not (1) delegate authority to negotiate or approve a retransmission consent agreement to another non-commonly owned station located~~ in ~~the~~2015 ~~same~~and DMA or to a third-party that negotiates on behalf of another non-commonly owned station in the same DMA; or (2) if not commonly owned, facilitate or agree to facilitate coordinated negotiation of retransmission consent terms between themselves, including through the sharing of information2016. ~~Accordingly,~~In weJuly ~~must separately negotiate our retransmission consent agreements with MVPDs. Concurrently with its adoption of the prohibition on certain joint retransmission consent negotiations~~2016, the ~~FCC~~then-Chairman ~~also adopted a further notice~~ of ~~proposed rulemaking which seeks additional comment on~~ the ~~elimination~~FCC orpublicly ~~modification~~announced ofthat the ~~network~~agency ~~non-duplication~~would ~~and~~not ~~syndicated~~adopt ~~exclusivity~~additional rules~~. Comments~~ ~~and~~in ~~reply~~this ~~comments~~proceeding. onHowever, the ~~further~~proceeding ~~notice~~remains ~~were filed in 2014~~open.

In addition, in the STELA Reauthorization Act of 2014, which was adopted and signed into law in December 2014, the U.S. Congress directed the FCC to commence a rulemaking to “review its totality of the circumstances test for good faith [retransmission consent] negotiations.” The FCC commenced this proceeding in September 2015, and comments and reply comments were filed in 2015 and 2016. In July 2016, the then-Chairman of the FCC publicly announced that the agency would not adopt additional rules in this proceeding. However, the proceeding remains open.

The FCC’s rules also govern which local television signals a satellite subscriber may receive. The U.S. Congress and the FCC have also imposed certain requirements relating to satellite distribution of local television signals to “unserved” households that do not receive a useable signal from a local network-affiliated station and to cable and satellite carriage of out-of-market signals.

Certain ~~online~~OVDs ~~video distributors and other OTTDs~~ have begun streaming broadcast programming over the Internet. In June 2014, the U.S. Supreme Court held that an ~~OTTD~~OVD’s retransmissions of broadcast television signals without the consent of the broadcast station violate copyright holders’ exclusive right to perform their works publicly as provided under the Copyright Act of 1976, as amended (the “Copyright Act”). In December 2014, the FCC issued a Notice of Proposed Rulemaking proposing to interpret the term “MVPD” to encompass ~~OTTDs~~OVDs that make available for purchase multiple streams of video programming distributed at a prescheduled time and seeking comment on the effects of applying MVPD rules to such ~~OTTDs~~OVDs. Comments and reply comments were filed in 2015. Although the FCC has not classified ~~OTTDs~~OVDs as MVPDs to date, several ~~OTTDs~~OVDs have signed agreements for retransmission of local stations within their markets, and others are actively seeking to negotiate such agreements.

The Company has elected to exercise retransmission consent rights for all of its stations where it has legal rights to do so. The Company has negotiated retransmission consent agreements with the majority of MVPDs serving its markets to carry the stations’ signals and, where permitted by its network affiliation agreements, has negotiated agreements with ~~OTTDs~~OVDs.

Employees

As of December 31, ~~2018~~2019, we had a total of 4142 employees, all of which were full-time. As of December 31, ~~2018~~2019, none of our employees were covered by a collective bargaining agreement. We believe that our employee relations are satisfactory, and we have not experienced any work stoppages at any of our facilities.

Available Information

We file annual, quarterly and current reports and other information with the SEC. The SEC maintains a website that contains reports, proxy and information statements and other information regarding issuers, including us, that file electronically with the SEC. The address for the SEC’s website is http://www.sec.gov.

Item 1A.

Risk Factors

You should carefully consider the risks described below and all of the information contained in this document. The risks and uncertainties described below are not the only risks and uncertainties that the Company faces. Additional risks and uncertainties not presently known to the Company or that the Company currently deems immaterial may also impair the Company’s business operations. If any of those risks actually occur, the Company’s business, financial condition and results of operations could suffer. The risks discussed below also include forward-looking statements, and the Company’s actual results may differ substantially from those discussed in these forward-looking statements. See “Cautionary Note Regarding Forward-Looking Statements” for further information.

Risks Related to Our Operations

General trends in the television industry could adversely affect demand for television advertising as consumers migrate to alternative media, including the Internet, for entertainment.

Television viewing among consumers has been negatively impacted by the increasing availability of alternative media, including the Internet. As a result, in recent years demand for television advertising has been declining and demand for advertising in alternative media has been increasing, and we expect this trend to continue.

The networks have begun streaming some of their programming on the Internet and other distribution platforms simultaneously with, or in close proximity to, network programming broadcast on local television stations, including those we own. These and other practices by the networks dilute the exclusivity and value of network programming originally broadcast by the local stations and may adversely affect the business, financial condition and results of operations of our stations. Also refer to “Risks Related to Our Industry – —Intense competition in the television industry and alternative forms of media could limit our growth and profitability.”

The Company’s substantial debt could limit its ability to grow and compete.

As of December 31, ~~2018~~2019, we had $~~224~~223.61 million of debt, which represented ~~110~~128.47% of our total capitalization.

The Company’s high level of debt could have important consequences to our business. For example, it could:

•

limit the Company’s ability to borrow additional funds or obtain additional financing in the future;

•

limit the Company’s ability to pursue acquisition opportunities;

•

expose the Company to greater interest rate risk since the interest rate on borrowings under our senior secured credit facility is variable;

•

limit the Company’s flexibility to plan for and react to changes in our business and our industry; and

•

impair our ability to withstand a general downturn in our business and place us at a disadvantage compared to our competitors that are less leveraged.

See Item 7., “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Contractual Obligations” for disclosure of the approximate aggregate amount of principal indebtedness scheduled to mature.

The Company could also incur additional debt in the future. The terms of the Company’s senior secured credit facility limit, but do not prohibit the Company from incurring substantial amounts of additional debt. To the extent the Company incurs additional debt, we would become even more susceptible to the leverage-related risks described above.

The agreements governing the Company’s debt contain various covenants that limit management’s discretion in the operation of our business.

The terms of the Company’s senior secured credit facility contain various restrictive covenants customary for arrangements of ~~these~~this ~~types~~type that restrict our ability to, among other things:

•

incur additional debt and issue preferred stock;

•

pay dividends and make other distributions;

•

make investments and other restricted payments;

•

make acquisitions;

•

merge, consolidate or transfer all or substantially all of our assets;

•

enter into sale and leaseback transactions;

•

create liens;

•

sell assets or stock of our subsidiaries; and

•

enter into transactions with affiliates.

Our senior secured credit facility agreement does not contain financial covenant ratio requirements but does provide for default in the event that Nexstar does not comply with all covenants contained in its credit agreement. Future financing agreements may contain financial covenants which could limit our management’s ability to operate our business at its discretion, and consequently we may be unable to compete effectively, pursue acquisitions or take advantage of new business opportunities, any of which could harm our business.

If we or Nexstar fail to comply with the restrictions in their respective present or future financing agreements, a default may occur. A default could allow creditors to accelerate the related debt as well as any other debt to which a cross-acceleration or cross-default provision applies. A default could also allow creditors to foreclose on any collateral securing such debt.

Our ability to continue as a going concern is dependent on Nexstar’s pledge to continue the local service agreements described in a letter of support dated March 2227, ~~2019~~2020. Nexstar’s senior secured credit facility agreement contains covenants which require Nexstar to comply with a maximum consolidated first lien net leverage ratio of 4.25 to 1.00. The covenants, which are calculated on a quarterly basis, include our and Nexstar’s combined results. Our senior secured credit facility agreement does not contain financial covenant ratio requirements; however, it does include an event of default if Nexstar does not comply with all covenants contained in its credit agreement. As of December 31, ~~2018~~2019, Nexstar was in compliance with all covenants contained in the credit agreements governing its senior secured credit facility and the indentures governing its publicly-held notes.

The Company may not be able to generate sufficient cash flow to meet its debt service requirements.

The Company’s ability to service its debt depends on its ability to generate the necessary cash flow. Generation of the necessary cash flow is partially subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond the Company’s control. The Company cannot assure you that its business will generate cash flow from operations, that future borrowings will be available to the Company under its current or any replacement credit facilities, or that it will be able to complete any necessary financings, in amounts sufficient to enable the Company to fund its operations or pay its debts and other obligations, or to fund its liquidity needs. If the Company is not able to generate sufficient cash flow to service its debt obligations, it may need to refinance or restructure its debt, sell assets, reduce or delay capital investments, or seek to raise additional capital. Additional financing may not be available in sufficient amounts, at times or on terms acceptable to the Company, or at all. If the Company is unable to meet its debt service obligations, its lenders may determine to stop making loans to the Company, and/or the Company’s lenders or other holders of its debt could accelerate and declare due all outstanding obligations due under the respective agreements, all of which could have a material adverse effect on the Company.

We guarantee certain senior unsecured notes issued by Nexstar and the amounts outstanding under Nexstar’s senior secured credit facility.

If Nexstar, which is leveraged with debt, is unable to satisfy its debt obligations, we can be held liable for those obligations under our guarantees. As of December 31, ~~2018~~2019, we guarantee the following debt of Nexstar:

~~• The 6.125% Notes with an outstanding balance of $273.4 million, due 2022;~~11

• The 5.625% Notes due 2027 with an outstanding principal balance of $~~888~~1.2785 ~~million, due 2024~~billion; ~~and~~

• ~~Nexstar’s~~The ~~maximum commitment under its senior secured credit facility of $2~~5.~~278~~625% ~~billion,~~Notes ~~of which $1.289 billion in Term Loan B (~~due 2024) ~~and~~with ~~$825.1~~an ~~million in Term Loan A (due 2022) were~~ outstanding. ~~Nexstar~~balance ~~also~~of ~~has a~~ $~~163.4~~900 million; ~~revolving loan commitment (maturing in 2022), of which none was outstanding as of December 31, 2018.~~and

•

Nexstar’s maximum commitment under its senior secured credit facility of $5.667 billion, of which $3.065 billion (due September 2026) and $1.139 billion (due January 2024) of Term Loan B, and $675.0 million (due September 2024) and $788.1 million (due October 2023) of Term Loan A were outstanding as of December 31, 2019. Nexstar also has a $139.7 million revolving credit loan commitment (maturing in October 2023), of which none was outstanding as of December 31, 2019.

Marshall may be unable to satisfy its debt obligations to us.

On November 29, 2019, Nexstar assigned its guarantee obligation of Marshall Broadcasting Group Inc.’s (“Marshall”) credit agreement to us. As a result of the assignment, we became the guarantor of Marshall’s debt and Nexstar’s guarantee was released.

On November 29, 2019, Marshall defaulted on the payment of principal and interest and other payments due to the third-party bank lenders under the credit agreement. Following the default, we paid the outstanding principal balances of Marshall’s Term Loan A and revolving credit facility of $43.2 million and $5.6 million, respectively, plus accrued and unpaid interest. This was funded by a $50.0 million cash we received from Nexstar as payment for amounts due from the latter. After making the payments, we became Marshall’s new lender under the same credit agreement. Thus, we recognized a loan receivable from Marshall totaling $48.9 million as a result of these transactions. In December 2019, Marshall filed a voluntary petition for Chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of Texas. Marshall may not be able to make its principal or interest payments to us under the credit agreement when due or at all. It’s failure to satisfy its debt obligations to us may have an adverse effect on our business and results of operations.

The recording of deferred tax asset valuation allowances in the future or the impact of tax law changes on such deferred tax assets could affect our operating results.

The Company currently has significant ~~net~~ deferred tax assets resulting from tax credit carryforwards, net operating losses and other deductible temporary differences that are available to reduce taxable income in future periods. Based on our assessment of the Company’s deferred tax assets, we determined that as of December 31, ~~2018~~2019, based on projected future income, approximately $18.46 million of the Company’s deferred tax assets will more likely than not fail to be realized in the future, and noa valuation allowance is currently required for these deferred tax assets. Should we determine in the future that these assets will ~~not~~ be realized, the Company will bereverse ~~required~~the torecorded ~~record a~~ valuation allowance in connection with these deferred tax assets ~~and the Company’s operating results would be adversely affected in the period such determination is made~~. ~~In addition, tax law changes could negatively impact the Company’s deferred tax assets.~~

Our ability to use net operating loss carry-forwards (“NOLs”) to reduce future tax payments may be limited if taxable income does not reach sufficient levels or there is a change in ownership of the Company.

At December 31, ~~2018~~2019, we had NOLs of approximately $5763.1 million for U.S. federal tax purposes and $1416.17 million for state tax purposes. Federal NOLs generated for years prior to 2018 expire at varying dates through 2033, and NOLs generated in 2018 carry forward indefinitely. NOLs generated beginning in years 2018 are subject to an overall limitation based on 80% of taxable income. To the extent available, we intend to use these NOLs to reduce the corporate income tax liability associated with our operations. Section 382 (“Section 382”) of the Internal Revenue Code of 1986, as amended (the “Code”), generally imposes an annual limitation on the amount of NOLs that may be used to offset taxable income when a corporation has undergone significant changes in stock ownership. In general, an ownership change, as defined by Section 382, results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain stockholders or public groups. While our analysis shows that historical events have not resulted in ownership changes that would limit our ability to use these NOLs, any subsequent ownership changes could result in such a limitation. In addition, our ability to use NOLs will be dependent on our ability to generate taxable income. The NOLs could expire before we generate sufficient taxable income. To the extent our use of NOLs is significantly limited, our income could be subject to corporate income tax earlier than it would if we were able to use NOLs, which could have a negative effect on our financial results and results of operations.

Our broadcast operations could be adversely affected if our stations fail to maintain or renew their network affiliation agreements on favorable terms, or at all.

Due to the quality of the programming provided by the networks, stations that are affiliated with a network generally have higher ratings than unaffiliated independent stations in the same market. As a result, it is important for stations to maintain their network affiliations. All of the full power television stations that we operate have network affiliation agreements – six stations have primary affiliation agreements with ABC, six with FOX, three with NBC, two with CBS and two with The CW. Each of ABC, NBC and CBS generally provides affiliated stations with up to 22 hours of prime-time programming per week, while each of FOX and The CW provides affiliated stations with up to 15 hours of prime-time programming per week. In return, affiliated stations broadcast the respective networks’ commercials during the network programming.

Our broadcast operations could be adversely affected if our stations fail to maintain or renew their network affiliation agreements on favorable terms, or at all.

Due to the quality of the programming provided by the networks, stations that are affiliated with a network generally have higher ratings than unaffiliated independent stations in the same market. As a result, it is important for stations to maintain their network affiliations. All of the full power television stations that we operate have network affiliation agreements – six stations have primary affiliation agreements with ABC, six with FOX, three with NBC, two with CBS and two with The CW. Each of ABC, NBC and CBS generally provides affiliated stations with up to 22 hours of prime-time programming per week, while each of FOX and The CW provides affiliated stations with up to 15 hours of prime-time programming per week. In return, affiliated stations broadcast the applicable network’s commercials during the network programming.

All of the network affiliation agreements of our stations are scheduled to expire at various times through December 2022. In order to renew certain of our affiliation agreements we may be required to make cash payments to the network, and to accept other material modifications of existing affiliation agreements. If any of our stations cease to maintain affiliation agreements with networks for any reason, we would need to find alternative sources of programming, which may be less attractive to our audiences and more expensive to obtain. In addition, a loss of a specific network affiliation for a station may affect our retransmission consent payments resulting in us receiving less retransmission consent fees. Further, some of our network affiliation agreements are subject to earlier termination by the networks under specified circumstances. For more information regarding these network affiliation agreements, see Item 1. “Business––Network Affiliations.”

The loss of or material reduction in retransmission consent revenues or a change in the current retransmission consent regulations could have an adverse effect on our business, financial condition and results of operations.

A significant portion of our revenue comes from our retransmission consent agreements with MVPDs (mainly cable and satellite television providers) and ~~OTTDs~~OVDs. These agreements permit the distributors to retransmit our stations’ signals to their subscribers in exchange for the payment of compensation to us from the system operators as consideration. If we are unable to renegotiate these agreements on favorable terms, or at all, the failure to do so could have an adverse effect on our business, financial condition and results of operations.

Though we are typically able to renegotiate our retransmission consent agreements on favorable terms, the payments due us under these agreements are customarily based on a price per subscriber of the applicable distributor. In recent years the subscribership of MVPDs has declined, as the growth of direct Internet streaming of video programming to televisions and mobile devices has incentivized consumers to “cut the cord” and discontinue their cable or satellite service subscriptions. Decreasing MVPD subscribership leads to less revenue under our retransmission agreements, which ultimately could have an adverse effect on our business, financial condition and results of operations. Also refer to “Risks Related to Our Industry–Intense competition in the television industry and alternative forms of media could limit our growth and profitability.”

Moreover, the national television broadcast networks have taken the position that they, as the owners or licensees of certain of the programming we broadcast and provide for retransmission, are entitled to a portion of the compensation we receive from MVPDs under our retransmission consent agreements and are requiring their network affiliation agreements with us to provide for such payments. All of our affiliation agreements with the broadcast networks also include terms that limit our ability to grant retransmission consent rights both to traditional MVPDs and to ~~OTTDs~~OVDs, services that provide ~~multiple~~ video streaming ~~channels~~ to consumers. The need to pay a portion of our retransmission consent revenue to our networks, and network limitations on our ability to enter into retransmission consent agreements, could materially reduce this revenue source to the Company and could have an adverse effect on its business, financial condition and results of operations.

In addition, MVPDs are actively seeking to change the regulations under which retransmission consent is negotiated before both the U.S. Congress and the FCC in order to increase their bargaining leverage with television stations. On March 3, 2011, the FCC initiated a Notice of Proposed Rulemaking to reexamine its rules (1) governing the requirements for good faith negotiations between MVPDs and broadcasters, including implementing a prohibition on one station negotiating retransmission consent terms for another station under a local service agreement; (2) for providing advance notice to consumers in the event of dispute; and (3) to extend certain cable-only obligations to all MVPDs. The FCC also asked for comment on eliminating the network non-duplication and syndicated exclusivity protection rules, which may permit MVPDs to import out-of-market television stations in certain circumstances.

On March 31, 2014, the FCC amended its rules governing “good faith” retransmission consent negotiations to provide that it is a per se violation of the statutory duty to negotiate in good faith for a television broadcast station that is ranked among the top-four stations in a market (as measured by audience share) to negotiate retransmission consent jointly with another top-four station in the same market if the stations are not commonly owned. On December 5, 2014, the U.S. Congress extended the joint negotiation prohibition to all non-commonly owned television stations in a market. Under this rule and the subsequent legislation, same-market stations may not (1) delegate authority to negotiate or approve a retransmission consent agreement to another non-commonly owned station located in the same DMA or to a third-party that negotiates on behalf of another non-commonly owned television station in the same DMA; or (2) if not commonly owned, facilitate or agree to facilitate coordinated negotiation of retransmission consent terms between themselves, including through the sharing of information. Accordingly, in all markets, Mission must separately negotiate its retransmission consent agreements with MVPDs and OTTDs.

~~Concurrently~~On ~~with~~March ~~its~~31, ~~adoption~~2014, of the ~~prohibition~~FCC onamended ~~certain~~its ~~joint~~rules governing “good faith” retransmission consent negotiations, ~~the~~to ~~FCC~~provide ~~also~~that ~~adopted~~it is a ~~further~~per ~~notice~~se violation of ~~proposed~~the ~~rulemaking~~statutory ~~which~~duty ~~seeks~~to ~~additional~~negotiate ~~comment~~in ongood ~~the~~faith ~~elimination~~for ora ~~modification~~television ofbroadcast ~~the~~station ~~network~~that ~~non~~is ranked among the top-~~duplication~~four ~~and~~stations ~~syndicated~~in ~~exclusivity~~a ~~rules.~~market ~~The~~(as ~~FCC’s~~measured ~~prohibition~~by onaudience ~~certain~~share) ~~joint~~to negotiate retransmission consent ~~negotiations~~jointly ~~and~~with ~~its~~another ~~possible~~top-four ~~elimination~~station orin ~~modification~~the ofsame market if the ~~network~~stations are not commonly owned. On December 5, 2014, the U.S. Congress extended the joint negotiation prohibition to all non-~~duplication~~commonly owned television stations in a market. Under this rule and ~~syndicated~~the ~~exclusivity~~subsequent ~~protection~~legislation, ~~rules~~stations may ~~affect~~not ~~our~~(1) ~~ability~~delegate authority to ~~sustain~~negotiate ~~our~~or ~~current~~approve ~~level~~a of retransmission consent ~~revenues~~agreement orto ~~grow~~another ~~such~~non-commonly ~~revenues~~owned station located in the ~~future~~same ~~and~~DMA ~~could~~or ~~have~~to ana ~~adverse~~third-party ~~effect~~that negotiates on ~~our~~behalf ~~business,~~of ~~financial~~another ~~condition~~non-commonly ~~and~~owned ~~results~~television ofstation ~~operations.~~in Wethe ~~cannot~~same ~~predict~~DMA; ~~the~~or ~~resolution~~(2) ofif ~~the~~located ~~FCC’s~~in ~~network~~the ~~non-duplication~~same DMA and ~~syndicated~~not ~~exclusivity~~commonly ~~proposals~~owned, facilitate or agree to facilitate coordinated negotiation of retransmission consent terms between themselves, including through the ~~impact~~sharing of ~~these~~information. ~~proposals~~Accordingly, onin ~~our~~all ~~business~~markets, Mission must separately negotiate its retransmission consent agreements with MVPDs and OVDs.

InConcurrently ~~addition,~~with inits adoption of the ~~STELA~~prohibition ~~Reauthorization~~on ~~Act~~certain ofjoint ~~2014~~retransmission consent negotiations, ~~which~~the ~~was~~FCC also adopted ~~and~~a ~~signed~~further ~~into~~notice ~~law~~of inproposed ~~December~~rulemaking ~~2014,~~which sought additional comment on the ~~U.S.~~elimination ~~Congress~~or ~~directed~~modification of the network non-duplication and syndicated exclusivity rules. The FCC’s toprohibition ~~commence~~on acertain ~~rulemaking~~joint toretransmission ~~“review~~consent negotiations and its ~~totality~~possible elimination or modification of the ~~circumstances~~network ~~test~~non-duplication ~~for~~and ~~good~~syndicated ~~faith~~exclusivity [protection rules may affect our ability to sustain our current level of retransmission consent] ~~negotiations.”~~revenues ~~The~~or ~~FCC~~grow ~~commenced~~such ~~this~~revenues ~~proceeding~~ in ~~September~~the ~~2015,~~future and ~~comments~~could ~~and~~have ~~reply~~an ~~comments~~adverse ~~were~~effect ~~submitted~~on inour ~~2015~~business, financial condition and ~~2016~~results of operations. InWe ~~July~~cannot ~~2016,~~predict the ~~then-Chairman~~resolution of the FCC’s ~~announced~~network ~~that~~non-duplication ~~the~~and ~~agency~~syndicated ~~would~~exclusivity ~~not~~proposals ~~adopt~~or ~~additional~~the ~~rules~~impact inof ~~this~~these ~~proceeding.~~proposals ~~However,~~if ~~the~~they ~~proceeding~~are ~~remains open~~adopted.

~~Certain online video distributors and other OTTDs have begun streaming broadcast programming over the Internet. In June 2014, the U.S. Supreme Court held that an OTTD~~Congress’s ~~retransmissions~~December of5, ~~broadcast~~2014 ~~television~~legislation ~~signals~~also ~~without~~directed the ~~consent~~FCC ~~of the broadcast station violate copyright holders’ exclusive right~~ to ~~perform~~commence ~~their works publicly as provided under the Copyright Act. In December 2014, the FCC issued~~ a ~~Notice~~rulemaking ~~of Proposed Rulemaking proposing~~ to ~~interpret the term~~ “~~MVPD”~~review toits ~~encompass~~totality ~~OTTDs~~of ~~that~~the ~~make~~circumstances ~~available~~test for ~~purchase~~good ~~multiple~~faith ~~streams~~[retransmission ofconsent] ~~video~~negotiations.” ~~programming~~The ~~distributed~~FCC atcommenced athis ~~prescheduled~~proceeding ~~time~~in ~~and~~September ~~seeking~~2015, ~~comment~~and oncomments ~~the effects of applying MVPD rules to such OTTDs. Comments~~ and reply comments were ~~filed~~submitted in 2015. ~~Although~~and ~~the~~2016. ~~FCC~~In ~~has~~July ~~not classified OTTDs as MVPDs to date~~2016, ~~several~~the ~~OTTDs~~then-Chairman ~~have signed agreements for retransmission~~ of ~~local stations within their markets, and others are actively seeking to negotiate such agreements. If~~ the FCC ~~ultimately~~announced ~~determines~~ that anthe ~~OTTD~~agency iswould not anadopt ~~MVPD~~additional ~~or declines to apply certain~~ rules ~~governing~~in ~~MVPDs~~this toproceeding. ~~OTTDs~~However, ~~our~~the ~~business~~proceeding ~~and~~remains ~~results of operations could be materially and adversely affected~~open.

Certain OVDs have begun streaming broadcast programming over the Internet. In June 2014, the U.S. Supreme Court held that an OVD’s retransmissions of broadcast television signals without the consent of the broadcast station violate copyright holders’ exclusive right to perform their works publicly as provided under the Copyright Act. In December 2014, the FCC issued a Notice of Proposed Rulemaking proposing to interpret the term “MVPD” to encompass OVDs that make available for purchase multiple streams of video programming distributed at a prescheduled time and seeking comment on the effects of applying MVPD rules to such OVDs. Comments and reply comments were filed in 2015. Although the FCC has not classified OVDs as MVPDs to date, several OVDs have signed agreements for retransmission of local stations within their markets, and others are actively seeking to negotiate such agreements. If the FCC ultimately determines that an OVD is not an MVPD or declines to apply certain rules governing MVPDs to OVDs, our business and results of operations could be materially and adversely affected.

The FCC could decide not to grant renewal of the FCC license of any of the stations we operate which would require that station to cease operations.

Television broadcast licenses are granted for a maximum term of eight years and are subject to renewal upon application to the FCC. The FCC is required to grant an application for license renewal if, during the preceding term, the station served the public interest, the licensee did not commit any serious violations of the Communications Act or the FCC’s rules, and the licensee committed no other violations of the Communications Act or the FCC’s rules which, taken together, would constitute a pattern of abuse. If a licensee fails to meet this standard the FCC may grant renewal on terms and conditions that it deems appropriate, including a monetary forfeiture or renewal for a term less than the normal eight-year period. However, in an extreme case, the FCC may deny a station’s license renewal application, resulting in termination of the station’s authority to broadcast. Under the Communications Act, the term of a broadcast license is automatically extended during the pendency of the FCC’s processing of a timely renewal application. We cannot provide any assurances that the FCC will grant future renewal applications.

Our growth may be limited if we are unable to implement our acquisition strategy.

We have achieved much of our growth through acquisitions. We intend to continue our growth by selectively pursuing acquisitions of television stations. The television broadcast industry is undergoing consolidation, which may reduce the number of acquisition targets and increase the purchase price of future acquisitions. Some of our competitors may have greater financial or management resources with which to pursue acquisition targets. Therefore, even if we are successful in identifying attractive acquisition targets, we may face considerable competition and our acquisition strategy may not be successful.

FCC rules and policies may also make it more difficult for us to acquire additional television stations. Television station acquisitions are subject to the approval of the FCC and, potentially, other regulatory authorities. FCC rules limit the number of television stations a company may own and define the types of local service agreements that “count” as ownership by the party providing the services. Those rules are subject to change. The need for FCC and other regulatory approvals could restrict our ability to consummate future transactions if, for example, the FCC or other government agencies believe that a proposed transaction would result in excessive concentration or other public interest detriment in a market, even if the proposed combination may otherwise comply with FCC ownership limitations.

Growing our business through acquisitions involves risks and if we are unable to effectively manage our growth, our operating results will suffer.

To effectively manage our growth and address the increased reporting requirements and administrative demands that will result from future acquisitions, we will need, among other things, to continue to develop our financial and management controls and management information systems. We will also need to continue to identify, attract and retain highly skilled finance and management personnel. Failure to do any of these tasks in an efficient and timely manner could seriously harm our business.

There are other risks associated with growing our business through acquisitions. For example, with any past or future acquisition, there is the possibility that:

•

we may not be able to successfully reduce costs, increase advertising revenue or audience share or realize anticipated synergies and economies of scale with respect to any acquired station;

•

an acquisition may increase our leverage and debt service requirements or may result in our assuming unexpected liabilities;

•

our management may be reassigned from overseeing existing operations by the need to integrate the acquired business;

•

we may experience difficulties integrating operations and systems, as well as company policies and cultures;

•

we may fail to retain and assimilate employees of the acquired business; and

•

problems may arise in entering new markets in which we have little or no experience.

The occurrence of any of these events could have a material adverse effect on our operating results, particularly during the period immediately following any acquisition.

The FCC may decide to terminate “grandfathered” time brokerage agreements.

The FCC attributes TBAs and ~~local marketing agreements (“~~LMAs”) to the programmer under its ownership limits if the programmer provides more than 15% of a station’s weekly broadcast programming. However, TBAs and LMAs entered into prior to November 5, 1996 are exempt from attribution for now.

The FCC may review these “grandfathered” TBAs and LMAs in the future. During this review, the FCC may determine to terminate the “grandfathered” period and make all TBAs and LMAs fully attributable to the programmer. If the FCC does so, we will be required to terminate our TBAs with Nexstar for stations WFXP, KHMT and KFQX unless the FCC’s duopoly rule allows ownership of two stations in the applicable markets. During the year ended December 31, ~~2018~~2019, the combined net revenue of WFXP, KHMT and KFQX represented less than 1% of our total net revenue and the combined net loss of these stations represented 3% of our total net loss.

FCC actions could limit or prohibit our local service agreements with Nexstar, which may harm our operations and impair our acquisition strategy.

We have entered into local service agreements with Nexstar for our stations. The FCC has in the past taken actions to restrict local service agreements as a means of creating substantial operating efficiencies, although a number of those actions have more recently been reversed.

The 2016 Ownership Order reinstated a rule that attributed another in-market station toward the local television ownership limits when one station owner sells more than 15% of the second station’s weekly advertising inventory under a JSA (this rule had been previously adopted but was vacated by the Third Circuit). Parties to JSAs entered into prior to March 31, 2014 were permitted to continue to operate under these JSAs until September 30, 2025. However, in its November 2017 Reconsideration Order, the FCC eliminated the JSA attribution rule in its entirety. This elimination took effect on February 7, 2018, although the Reconsideration Order remains subject to federal court appeals.

We cannot predict what additional rules the FCC will adopt or when they will be adopted. If Mission is required to modify or terminate its JSAs or other local service agreements with Nexstar, it could lose some or all of the revenues generated from those arrangements.

FCC actions could limit or prohibit our local service agreements with Nexstar, which may harm our operations and impair our acquisition strategy.

The 2016 Ownership Order reinstated a rule that attributed another in-market station toward the local television ownership limits when one station owner sells more than 15% of the second station’s weekly advertising inventory under a JSA (this rule had been previously adopted but was vacated by the Third Circuit). Parties to JSAs entered into prior to March 31, 2014 were permitted to continue to operate under these JSAs until September 30, 2025. In its November 2017 Reconsideration Order, the FCC eliminated the JSA attribution rule in its entirety. However, in December 2019, the FCC reinstated the rule following the Third Circuit’s decision vacating the Reconsideration Order. Our JSAs with Nexstar are therefore once again attributable, although we may continue to operate under the JSAs until September 30, 2025 and further litigation is possible in connection with the Third Circuit’s decision.

We cannot predict what additional rules the FCC will adopt, the result of any further litigation regarding the FCC’s current rules, or when either will occur (if at all). If Mission is required to modify or terminate its JSAs or other local service agreements with Nexstar, it could lose some or all of the revenues generated from those arrangements.

We have a material amount of goodwill and intangible assets and could therefore suffer losses due to future asset impairment charges.

As of December 31, ~~2018~~2019, $9088.01 million, or ~~41.6~~43%, of our total assets consisted of goodwill and intangible assets, including FCC licenses and network affiliation agreements. We test goodwill and FCC licenses annually, and when factors or indicators become apparent that would require an interim test of these assets, in accordance with accounting and disclosure requirements for goodwill and other intangible assets. We test network affiliation agreements whenever circumstances or indicators become apparent that the asset may not be recoverable through expected future cash flows. The methods used to evaluate the impairment of our goodwill and intangible assets would be affected by a significant reduction in operating results or cash flows at one or more of our television stations, or a forecast of such reductions, a significant adverse change in the advertising marketplaces in which our television stations operate, the loss of network affiliations, or adverse changes to FCC ownership rules, among others, which may be beyond our control. If the carrying amount of goodwill and intangible assets is revised downward due to impairment, such non-cash charge could materially affect our financial position and results of operations.

Cybersecurity risks could affect the Company’s operating effectiveness.

Mission leverages the IT infrastructure of Nexstar and uses computers in substantially all aspects of its business operations. Mission’s revenues are increasingly dependent on digital products. Such use exposes the Company to potential cyber incidents resulting from deliberate attacks or unintentional events on Nexstar’s cybersecurity. These incidents can include, but are not limited to, gaining unauthorized access to digital systems for purposes of misappropriating assets or sensitive information, corrupting data or causing operational disruption. The results of these incidents could include, but are not limited to, business interruption, disclosure of nonpublic information, decreased advertising revenues, misstated financial data, liability for stolen assets or information, increased cybersecurity protection costs, litigation and reputational damage adversely affecting customer or investor confidence. Nexstar’s Cybersecurity Committee helps mitigate cybersecurity risks. The role of the committee is to oversee cyber risk assessments, monitor applicable key risk indicators, review cybersecurity training procedures, establish cybersecurity policies and procedures, and to invest in and implement enhancements to the Company’s cybersecurity infrastructure. Investments over the past year included enhancements to monitoring systems, firewalls, and intrusion detection systems.

Risks Related to Our Industry

Our operating results are dependent on advertising revenue and as a result, we may be more vulnerable to economic downturns and other factors beyond our control than businesses not dependent on advertising.

We derive a majority of our revenue from the sale of advertising time on our stations and community portal websites. Our ability to sell advertising time depends on numerous factors that may be beyond our control, including:

•

the health of the economy in the local markets where our stations are located and in the nation as a whole;

•

the popularity of our station and website programming;

•

fluctuations in pricing for local and national advertising;

•

the activities of our competitors, including increased competition from other forms of advertising-based media, particularly newspapers, cable television, Internet and radio;

•

the decreased demand for political advertising in non-election years; and

•

changes in the makeup of the population in the areas where our stations are located.

Because businesses generally reduce their advertising budgets during economic recessions or downturns, the reliance upon advertising revenue makes our operating results susceptible to prevailing economic conditions. In addition, our programming may not attract sufficient targeted viewership, and we may not achieve favorable ratings. Our ratings depend partly upon unpredictable and volatile factors beyond our control, such as viewer preferences, competing programming and the availability of other entertainment activities. A shift in viewer preferences could cause our programming not to gain popularity or to decline in popularity, which could cause our advertising revenue to decline. Further, we and the programming providers upon which we rely may not be able to anticipate, and effectively react to, shifts in viewer tastes and interests in our markets.

Preemption of regularly scheduled programming by network news coverage may affect our revenue and results of operations.

We may experience a loss of advertising revenue and incur additional broadcasting expenses due to preemption of our regularly scheduled programming by network coverage of a major global news event such as a war, or terrorist attack or epidemics, including corona virus, or by coverage of local disasters, such as tornados and hurricanes. As a result, advertising may not be aired and the revenue for such advertising may be lost unless the station is able to run the advertising at agreed-upon times in the future. Advertisers may not agree to run such advertising in future time periods, and space may not be available for such advertising. The duration of any preemption of local programming cannot be predicted if it occurs. In addition, our stations may incur additional expenses as a result of expanded news coverage of a war or terrorist attack or local disaster. The loss of revenue and increased expenses could negatively affect our results of operations.

If we are unable to respond to changes in technology and evolving industry trends, our television business may not be able to compete effectively.

New technologies may adversely affect our television stations. Information delivery and programming alternatives such as cable, direct satellite-to-home services, pay-per-view, video on demand, over-the-top distribution of programming, the Internet, telephone company services, mobile devices, digital video recorders and home video and entertainment systems have fractionalized television viewing audiences and expanded the numbers and types of distribution channels for advertisers to access. Over the past decade, cable television programming services, other emerging video distribution platforms and the Internet have captured an increasing market share, while the aggregate viewership of the major television networks has declined. In addition, the expansion of cable and satellite television, digital delivery and other technological changes has increased, and may continue to increase, the competitive demand for programming. Such increased demand, together with rising production costs, may increase our programming costs or impair our ability to acquire or develop desired programming.

In addition, video compression techniques now in use are expected to permit greater numbers of channels to be carried within existing bandwidth. These compression techniques and other technological developments are applicable to all video delivery systems, including over-the-air broadcasting, and have the potential to provide vastly expanded programming to targeted audiences. Reduction in the cost of creating additional channel capacity could lower entry barriers for new channels and encourage the development of increasingly specialized niche programming, resulting in more audience fractionalization. This ability to reach very narrowly defined audiences may alter the competitive dynamics for advertising expenditures. Furthermore, the FCC has authorized television broadcasters to transmit using a so-called “Next Gen” (ATSC 3.0) standard on a voluntary, market-driven basis. This new transmission standard may allow broadcast television stations to provide a multitude of enhanced services to consumers, including but not limited to the delivery of ultra-high definition video and advanced audio to home and mobile screens, new public safety capabilities such as advanced emergency alerting, and localized, personalized and interactive content. We are unable to predict the effect that these and other technological changes will have on the television industry or our results of operations.

1617

The FCC can sanction us for programming broadcast on our stations which it finds to be indecent.

The FCC may impose substantial fines, toexceeding ~~a maximum of~~ $~~325~~400,000 per violation (and subject to annual adjustments for inflation), on television broadcasters for the broadcast of indecent material in violation of the Communications Act and its rules. Because our stations’ programming is in large part comprised of programming provided by the networks with which the stations are affiliated, we do not have full control over what is broadcast on our stations, and we may be subject to the imposition of fines if the FCC finds such programming to be indecent.

In June 2012, the U.S. Supreme Court decided a challenge to the FCC’s indecency enforcement without resolving the constitutionality of such enforcement, and the FCC thereafter requested public comment on the appropriate substance and scope of its indecency enforcement policy. The FCC has issued very few further decisions or rules in this area, and the courts may in the future have further occasion to review the FCC’s current policy or any modifications thereto. The outcomes of these proceedings could affect future FCC policies in this area and could have a material adverse effect on our business.

Intense competition in the television industry and alternative forms of media could limit our growth and profitability.

As a television broadcasting company, we face a significant level of competition, both directly and indirectly. Generally we compete for our audience against all the other leisure activities in which one could choose to engage rather than watch television. Specifically, our stations compete for audience share, programming and advertising revenue with other television stations in their respective markets and with other advertising media, including newspapers, radio stations, cable television, DBS systems, mobile services, video streaming services and the Internet.

The entertainment and television industries are highly competitive and are undergoing a period of consolidation. Many of our current and potential competitors have greater financial, marketing, programming and broadcasting resources than we do. The markets in which we operate are also in a constant state of change arising from, among other things, technological improvements and economic and regulatory developments. Technological innovation and the resulting proliferation of television entertainment, such as cable television, wireless cable, satellite-to-home distribution services, pay-per-view, home video and entertainment systems and Internet and mobile distribution of video programming have fractionalized television viewing audiences and have subjected free over-the-air television broadcast stations to increased competition. We may not be able to compete effectively or adjust our business plans to meet changing market conditions.

Technologies used in the entertainment industry continue to evolve rapidly, leading to alternative methods for the delivery and storage of digital content. These technological advancements have driven changes in consumer behavior and have empowered consumers to seek more control over when, where and how they consume news and entertainment, including through the so-called “cutting the cord” and other consumption strategies. The networks have also begun streaming some of their programming on the Internet and other distribution platforms simultaneously with, or in close proximity to, network programming broadcast on local television stations, including those we own. These innovations and other practices by the networks dilute the exclusivity and value of network programming originally broadcast by the local stations and may adversely affect the business, financial condition and results of operations of our stations. We are unable to predict what forms of competition will develop in the future, the extent of the competition or its possible effects on our business.

The FCC could implement regulations, or the U.S. Congress could adopt legislation that might have a significant impact on the operations of the stations we own or the television broadcasting industry as a whole.

The FCC has open proceedings to determine whether to standardize TV stations’ reporting of programming responsive to local needs and interests; whether to modify its network non-duplication and syndicated exclusivity rules; whether to modify its standards for “good faith” retransmission consent negotiations; and whether to broaden the definition of “MVPD” to include “over-the-top” video programming distributors. Additionally, the outcomes of FCC proceedings to determine whether to modify or eliminate certain of its broadcast ownership rules ~~are~~have in some cases been negated by court review and may be the subject of ~~pending~~further ~~court appeals~~litigation, and the FCC has initiated its next quadrennial proceeding to review the agency’s media ownership rules.

The FCC also has sought comment on whether there are alternatives to the use of DMAs to define local markets such that certain viewers whose current DMAs straddle multiple states would be provided with more in-state broadcast programming. If the FCC determines to modify the use of existing DMAs to determine a station’s local market, such change might materially alter current station operations and could have an adverse effect on our business, financial condition and results of operations.

The FCC also may decide to initiate other new rule-making proceedings on its own or in response to requests from outside parties, any of which might have such an impact. The U.S. Congress may also act to amend the Communications Act in a manner that could impact our stations or the television broadcast industry in general.

1718

The FCC is reallocating a portion of the spectrum available for use by television broadcasters to wireless broadband use, which could substantially impact our future operations and may reduce viewer access to our programming.

The FCC is in the process of repurposing a portion of the broadcast television spectrum for wireless broadband use. Pursuant to federal legislation enacted in 2012, the FCC conducted an incentive auction for the purpose of making additional spectrum available to meet future wireless broadband needs. Under the auction statute and rules, certain television broadcasters accepted bids from the FCC to voluntarily relinquish ~~all or part of~~ their spectrum in exchange for consideration, and certain wireless broadband providers and other entities submitted successful bids to acquire the relinquished television spectrum. ~~Over~~Television ~~the next several years, television~~ stations that are not relinquishing their spectrum are being “repacked” into the frequency band still remaining for television broadcast use.

The incentive auction commenced on March 29, 2016 and officially concluded on April 13, 2017. None of the Company’s television stations accepted bids to relinquish their television channels. Seven of the Company’s stations ~~have~~were ~~been~~ assigned new channels in the reduced post-auction television band. These “repacked” stations are required to construct and license the necessary technical modifications to operate on their new assigned channels and must cease operating on their former channels byon ~~deadlines~~a ~~which~~rolling ~~the~~schedule ~~FCC~~ending ~~has~~in ~~established and which are no later than~~ July ~~13,~~ 2020. Congress has allocated up to an industry-wide total of $2.75 billion to reimburse television broadcasters, MVPDs and other parties for costs reasonably incurred due to the repack. This allocation includes $1 billion added to the TV Broadcaster Relocation Fund as part of the Consolidated Appropriations Act, 2018. Broadcasters, MVPDs and ~~MVPDs~~other parties have submitted ~~estimates~~ to the FCC estimates of their reimbursable costs and, in many cases, subsequent requests for reimbursement of those costs. As of ~~February~~December 6, 2019, ~~these~~verified ~~costs~~cost estimates for repack stations and MVPDs were approximately $1.9 billion, ~~and~~with 79 percent of the ~~FCC~~repack ~~has~~complete ~~indicated~~and ~~that~~reimbursements itstill ~~expects~~to ~~those~~be ~~costs~~made to ~~rise~~certain low power television and FM radio stations affected by the repack. In ~~2018~~2019 and ~~2017~~2018, the Company spent a total of $4.9 million and $4.3 million, respectively, in capital expenditures related to station repack,. We received $25.87 million ofand ~~which~~$2.8 ~~have~~million, ~~been~~respectively, ~~reimbursed~~in byreimbursements from the FCC in 2019 and 2018. As of December 31, ~~2018~~2019, approximately $1410.01 million of estimated remaining costs in connection with the station repack are expected to be incurred by the Company, some or all of which will be reimbursable. We cannot determine if the FCC will be able to fully reimburse our repacking costs as this is dependent on certain factors, including our ability to incur repacking costs that are equal to or less than the FCC’s allocation of funds to us and whether the FCC will have available funds to reimburse us for additional repacking costs that we previously may not have anticipated. Whether the FCC will have available funds for additional reimbursements will also depend on the repacking costs that will be incurred by other broadcasters, MVPDs and other parties that are also seeking reimbursements.

The reallocation of television spectrum to broadband use may be to the detriment of the Company’s investment in digital facilities, could require substantial additional investment to continue current operations, and may require viewers to invest in additional equipment or subscription services to continue receiving broadcast television signals. The Company cannot predict the impact of the incentive auction and subsequent ~~repacking~~repack on its business.

Item 1B.

Unresolved Staff Comments

None.

Item 2.

Properties

We have office space for our corporate headquarters in ~~Westlake~~Wichita Falls, ~~Ohio~~Texas, which is leased month to month. Each of our markets has facilities consisting of offices, studios, sales offices and tower and transmitter sites. Approximately 78% of the office and studio locations that our stations use are owned by Nexstar. We own the rest of the office and studio locations. We lease approximately 5048% of the tower and transmitter locations that our stations use. The remaining properties that we utilize are either owned by us or owned by Nexstar. We consider all of our properties, together with equipment contained therein, to be adequate for our present needs. We continually evaluate our future needs and from time to time will undertake significant projects to replace or upgrade facilities.

While none of our owned or leased properties are individually material to our operations, if we were required to relocate any towers, the cost could be significant. This is because the number of sites in any geographic area that permit a tower of reasonable height to provide good coverage of the market is limited, and zoning and other land use restrictions, as well as Federal Aviation Administration and FCC regulations, limit the number of alternative locations or increase the cost of acquiring them for tower sites. See Item 1, “Business—The Stations” for a complete list of stations by market.

Item 3.

Legal Proceedings

From time to time, the Company is involved in litigation that arises from the ordinary course of business, such as contractual or employment disputes or other general actions. In the event of an adverse outcome of these legal proceedings, the Company believes the resulting liabilities would not have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

Item 4.

Mine Safety Disclosures

None.

PART II

Item 5.

Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information

As of December 31, ~~2018~~2019, our common stock was not traded on any market and two shareholders held all 1,000 shares of outstanding common stock. Our senior secured credit facility may limit the amount of dividends we may pay to shareholders over the term of the agreement.

1921

Item 6. Selected Financial Data

The selected financial data as of and for the years ended December 31, 2019, 2018, 2017, 2016, ~~2015~~ and ~~2014~~2015 are included below. The period-to-period comparability of our financial statements is affected by the acquisition of one television station in 2017. This information should be read in conjunction with Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our Financial Statements and related Notes included herein (the “Financial Statements”). Amounts below are presented in thousands.

	2018			2017			2016			2015			2014
	2019			2018			2017			2016			2015
Statements of Operations Data, for the years ended December 31:
Retransmission compensation and other	$	69,227		$	70,592		$	61,402		$	51,132		$	36,498
Distribution revenue and other	$	77,591		$	69,227		$	70,592		$	61,402		$	51,132
Revenue from Nexstar(1)		3934,~~997~~652			3639,~~546~~997			4236,~~791~~546			3742,~~000~~791			4237,~~079~~000
Net Revenue		~~109~~112,~~224~~243			~~107~~109,~~138~~224			~~104~~107,~~193~~138			88104,~~132~~193			7888,~~577~~132
Operating expenses (income):
Operating expenses:
Corporate expenses		2,~~331~~093			12,~~727~~331			1,~~372~~727			1,~~257~~372			1,~~176~~257
Station direct operating expenses		4048,~~861~~736			3540,~~802~~861			3035,~~201~~802			2430,~~601~~201			1824,~~135~~601
Selling, general and administrative expenses, excluding corporate		2,~~634~~382			2,~~426~~634			2,~~177~~426			2,~~279~~177			2,~~012~~279
Fees incurred pursuant to local service agreement with Nexstar(2)		5561,~~650~~215			3555,~~500~~650			1835,~~000~~500			918,~~780~~000			9,780
Amortization of broadcast rights, excluding barter		1,~~584~~493			1,~~619~~584			1,~~596~~619			1,~~755~~596			1,~~765~~755
Barter expense(3)		-			~~4,026~~-			34,~~971~~026			43,~~011~~971			4,~~079~~011
Depreciation		32,~~171~~586			23,~~342~~171			2,~~400~~342			2,~~435~~400			2,~~760~~435
Amortization of intangible assets		21,~~129~~919			2,~~392~~129			2,~~422~~392			2,~~418~~422			2,~~728~~418
Reimbursement from the FCC related to station repack(4)		(25,~~818~~663	)		-(2,818	)		-			-			-
Total operating expenses		~~105~~114,~~542~~761			85105,~~834~~542			6285,~~139~~834			4862,~~536~~139			4248,~~435~~536
Income from operations(5)		3,682			21,304			42,054			39,596			36,142
(Loss) income from operations(5)		(2,518	)		3,682			21,304			42,054			39,596
Interest expense		(1110,~~101~~841	)		(1011,~~135~~101	)		(10,~~251~~135	)		(910,~~325~~251	)		(109,~~014~~325	)
Loss on extinguishment of debt, net(6)		~~(452~~-	)		(~~2,133~~452	)		-(2,133	)		-			~~(21~~-	)
(Loss) Income before income taxes		(7,871	)		9,036			31,803			30,271			26,107
(Loss) income from continuing operations before income tax expense		(13,359	)		(7,871	)		9,036			31,803			30,271
Income tax benefit (expense)		2(15,~~042~~304	)		(32,~~400~~042	)		(123,~~337~~400	)		(12,~~172~~337	)		(1012,~~023~~172	)
Net (loss) income	$	(528,~~829~~663	)	$	(5,~~636~~829	)	$	195,~~466~~636		$	1819,~~099~~466		$	1618,~~084~~099

(1)

We have joint sales agreements with Nexstar, which permit Nexstar to sell certain advertising time for certain of our stations and retain a percentage of the related revenue. We also have time brokerage agreements with Nexstar that allow Nexstar to program most of the broadcast time for certain of our stations, sell the advertising time and retain the advertising revenue generated in exchange for monthly payments to us.

(2)	We have shared services agreements with Nexstar for certain of our stations, which allow the sharing of services including news production, technical maintenance and security, in exchange for Nexstar’s right to receive certain payments from us.

(3) On January 1, 2018, we adopted Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers, the new revenue accounting guidance issued by the Financial Accounting Standards Board (“ASU 2014-09”). The adoption resulted in certain changes in our revenue recognition policies and the presentation of certain revenue sources. Beginning in the first quarter of 2018, we no longer recognize barter revenue (and the related barter expense) resulting from the exchange of advertising time for certain program material. ~~Under the Company’s historical accounting policy prior to the adoption of ASC 606, barter revenue and barter expense would have been $3.8 million for the year ended December 31, 2018.~~

(4) Certain of the Company’s stations have been assigned new channels (“repack”) in connection with the FCC’s process of repurposing a portion of the broadcast television spectrum for wireless broadband use. These stations are currently spending costs, mainly capital expenditures, to construct and license the necessary technical modifications to operate on their newly assigned channels and to vacate their former channels no later than July 13, 2020. Subject to fund limitations, the FCC reimburses television broadcasters, MVPDs and other parties for costs reasonably incurred due to the repack. The reimbursements received by the Company from the FCC were recognized as operating income in 2019 and 2018.

(5) Income from operations is generally higher during even-numbered years, when advertising revenue is increased due to the occurrence of state and federal elections and the Olympic Games. However, due to the amendment of our shared services agreements with Nexstar, effective July 1, 2017, the income from operations ~~has~~continued ~~decreased~~to decline in ~~2018~~2019 due to an increase in recurring SSA fees.

(6)	In 2018 and 2017, the Company refinanced its then existing term loan and revolving loan, resulting in losses on extinguishment of debt of $0.5 million and $2.1 million, respectively.

2022

2018

2017

2016

2015

2014

2019

2018

2017

2016

2015

Balance Sheet data, as of December 31:

Cash and cash equivalents

108,~~798~~686

910,~~524~~798

69,~~474~~524

46,~~361~~474

~~880~~4,361

Working capital

9327,~~748~~289

~~102~~93,~~517~~748

90102,~~263~~517

5690,~~923~~263

3056,~~818~~923

Net intangible assets and goodwill

9088,~~001~~081

9290,~~130~~001

9092,~~522~~130

9290,~~944~~522

9592,~~362~~944

Total assets

~~216~~205,~~595~~679

~~232~~216,~~460~~595

~~222~~232,~~188~~460

~~202~~222,~~326~~188

~~189~~202,~~264~~326

Total debt

~~224~~223,~~639~~065

~~225~~224,~~742~~639

~~223~~225,~~765~~742

~~225~~223,~~570~~765

~~232~~225,~~393~~570

Total shareholders’ deficit

(2149,~~137~~800

)

(1521,~~308~~137

)

(2015,~~944~~308

)

(4020,~~410~~944

)

(5840,~~509~~410

)

Statements of Cash Flows data, for the years ended December 31:

Net cash provided by (used in):

Operating activities

~~4,810~~627

4,~~696~~810

54,~~372~~696

105,~~934~~372

(110,~~928~~934

)

Investing activities

(149,~~226~~330

)

(1,~~400~~226

)

(~~241~~1,400

)

(~~108~~241

)

(~~3,436~~108

)

Financing activities

(246,~~310~~591

)

(~~246~~2,310

)

(~~3,018~~246

)

(73,~~345~~018

)

2(7,~~528~~345

)

Capital expenditures

46,~~044~~117

~~700~~4,044

~~241~~700

~~258~~241

~~236~~258

Cash payments for broadcast rights

1,~~591~~495

1,~~632~~591

1,~~685~~632

1,~~762~~685

1,~~714~~762

2123

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with Item 6. “Selected Financial Data” and the Financial Statements and related Notes included in Part IV, Item 15(a) of this Annual Report on Form 10-K. As used in this discussion, unless the context indicates otherwise, “Mission” refers to Mission Broadcasting, Inc., and all references to “we,” “our,” “us” and the “Company” refer to Mission.

Executive Summary

Debt Transactions

• On ~~October~~November 2629, ~~2018~~2019, weNexstar ~~amended~~assigned ~~our~~its ~~senior~~guarantee ~~secured~~obligation ~~credit facility. The amendment extended the maturity date~~ of ~~our~~Marshall’s ~~revolving~~ credit ~~facility~~agreement ~~from July 19, 2022~~ to ~~October~~Mission. ~~26,~~As ~~2023~~a ~~and~~result ~~reduced~~of the ~~applicable~~assignment, ~~margin~~Mission ~~portion~~became of the ~~interest~~guarantor ~~rates~~of ~~for~~Marshall’s ~~our~~debt ~~Term Loan B~~ and ~~revolving~~Nexstar ~~credit~~is ~~facility~~no bylonger 25a ~~basis points~~guarantor.

• ~~Through~~On ~~December~~November ~~2018~~29, we2019, ~~repaid~~Marshall ~~scheduled~~defaulted ~~maturities~~on the payment of principal and interest and other payments due to its third-party bank lenders. Following the default, Mission paid the outstanding principal balances of Marshall’s Term Loan A and revolving credit facility of $43.2 million and $5.36 million, respectively, plus accrued and unpaid interest. This was funded by a $50.0 million cash we received from Nexstar as payment for amounts due from the latter. After making the payment, Mission became Marshall’s new lender under ~~our~~the ~~Term~~same ~~Loan~~Marshall Bcredit agreement. Thus, Mission recognized a loan receivable from Marshall totaling $48.9 million as a result of these transactions.

•

Through December 2019, we repaid scheduled maturities of $2.3 million under our Term Loan B.

Overview of Operations

As of December 31, ~~2018~~2019, we owned and operated 19 full power television stations in 18 markets in the states of Arkansas, Colorado, Illinois, Indiana, Louisiana, Missouri, Montana, New York, Pennsylvania, Texas and Vermont. Our stations are affiliated with ABC, FOX, NBC, CBS, The CW, ~~MNTV~~ and other broadcast television networks. We have local service agreements with certain television stations owned by Nexstar, through which Nexstar provides various programming, sales or other services to our television stations. In compliance with FCC regulations for both Nexstar and us, we maintain complete responsibility for and control over programming, finances and personnel for our stations.

The following table summarizes the various local service agreements our full power television stations had in effect as of December 31, ~~2018~~2019 with Nexstar:

Service Agreements		Full Power Stations
TBA Only		WFXP, KHMT and KFQX
SSA & JSA		KJTL, KLRT, KASN, KOLR, KCIT, KAMC, KRBC, KSAN, WUTR, WAWV, WYOU, KODE, WTVO, KTVE, WTVW and WVNY

Under the local service agreements, Nexstar has received substantially all of our available cash, after satisfaction of operating costs and debt obligations. We anticipate that Nexstar will continue to receive substantially all of our available cash, after satisfaction of operating costs and debt obligations. For more information about our local service agreements with Nexstar, refer to Note 43 of our Financial Statements in Part IV, Item 15(a) of this Annual Report on Form 10-K.

The operating revenue of our stations is derived primarily from revenues earned under our retransmission agreements with MVPDs and ~~OTTDs~~OVDs and broadcast advertising revenue sold and collected by Nexstar and paid to us under the JSAs. Broadcast advertising revenue is affected by a number of factors, including the economic conditions of the markets in which we operate, the demographic makeup of those markets and the marketing strategy employed in each market. Advertising revenue is positively affected by strong local economies, national and regional political election campaigns, and certain events such as the Olympic Games or the Super Bowl. Because television broadcast stations rely on advertising revenue, declines in advertising budgets, particularly in recessionary periods, adversely affect the broadcast industry, and as a result may contribute to a decrease in the revenue of broadcast television stations. The stations’ advertising revenue is generally highest in the second and fourth quarters of each year, due in part to increases in consumer advertising in the spring and retail advertising in the period leading up to, and including, the holiday season. In addition, advertising revenue is generally higher during even-numbered years, when state, congressional and presidential elections occur and from advertising aired during the Olympic Games. ~~2018~~Fiscal year 2019 was neither an election ~~year~~nor ~~and~~ an Olympic year.

We earn revenues from distributors including local cable providers, DBS services and other MVPDs and OTTDs for the retransmission of our broadcasts. These revenues are generally earned based on a price per subscriber of the distributor within the retransmission area. We have been successful at negotiating favorable pricing with distributors, as well as signing retransmission agreements with additional distributors, driving significant revenue gains over the last few years.24

~~Most~~We earn revenues from distributors including local cable providers, DBS services and other MVPDs and OVDs for the retransmission of our ~~stations~~broadcasts. ~~have~~These ~~network~~revenues ~~affiliation~~are ~~agreements~~generally ~~pursuant~~earned tobased ~~which~~on ~~the~~a ~~networks~~price ~~provide~~per ~~programming~~subscriber toof the ~~stations~~distributor ~~during~~within ~~specified~~the ~~time~~retransmission ~~periods,~~area. ~~including~~We ~~prime~~have ~~time,~~been insuccessful ~~exchange~~at ~~for~~negotiating ~~network~~favorable ~~affiliation~~pricing ~~fees~~with ~~and~~distributors, ~~the~~as ~~right~~well toas ~~sell~~signing aretransmission ~~portion~~agreements ofwith ~~the~~additional ~~advertising~~distributors, ~~time~~driving ~~during~~significant ~~these~~revenue ~~broadcasts~~gains over the last few years.

22All of our stations have network affiliation agreements pursuant to which the networks provide programming to the stations during specified time periods, including prime time, in exchange for network affiliation fees and the right to sell a portion of the advertising time during these broadcasts.

Our primary operating expenses include network affiliation costs, which can vary based on our broadcast programming and retransmission subscribers, and fixed monthly SSA fees paid to Nexstar for news production and technical and other services. To a lesser extent our operating expenses include employee compensation and related benefits. A large percentage of the costs involved in the operation of our stations remains fixed.

Regulatory Developments

As a television broadcaster, wethe ~~are~~Company is highly regulated, and ~~our~~its operations require that weit retain or renew a variety of government approvals and comply with changing federal regulations. In 2016, the FCC reinstated a previously adopted rule providing that a television station licensee which sells more than 15 percent of the weekly advertising inventory of another television station in the same DMA is deemed to have an attributable ownership interest in that station ~~(this rule had been adopted in 2014 but was vacated by a federal court of appeals)~~. Parties to existing JSAs that were deemed attributable interests and did not comply with the FCC’s local television ownership rule were given until September 30, 2025 to come into compliance. In November 2017, ~~however,~~ the FCC adopted anits ~~order~~Reconsideration onOrder ~~reconsideration~~ that eliminated the rule. That elimination became effective on February 7, 2018. On September 23, ~~although~~2019, a federal court of appeals vacated the ~~FCC’s~~Reconsideration Order. The court later denied petitions for en banc rehearing; on November ~~2017~~29, ~~order~~2019 its decision became effective; and on ~~reconsideration~~December ~~remains~~20, 2019 the ~~subject~~FCC ofissued ~~pending~~an ~~court~~order ~~appeals~~that formally reinstated the rule. Further litigation is possible. If wethe ~~are~~Company is ultimately required to amend or terminate ~~our~~its existing ~~agreements~~JSAs, wethe Company could have a reduction in revenue and increased costs if weit ~~are~~is unable to successfully implement alternative arrangements that are as beneficial as the existing JSAs.

The FCC is in the process of repurposing a portion of the broadcast television spectrum for wireless broadband use. In an incentive auction which concluded in April 2017, certain television broadcasters accepted bids from the FCC to voluntarily relinquish ~~all or part of~~ their spectrum in exchange for consideration. Television stations that are not relinquishing their spectrum are being “repacked” into the frequency band still remaining for television broadcast use. Seven stations owned by usthe ~~have~~Company ~~been~~were assigned to new channels in the reduced post-auction television band and are required to construct and license the necessary technical modifications to operate on their new assigned channels on a variable schedule ending in July 2020. Congress has allocated up to an industry-wide total of $2.75 billion to reimburse television broadcasters, MVPDs, and other parties for costs reasonably incurred due to the repack. The Company expects to incur costs between now and July 2020 in connection with the repack, some or all of which will be reimbursable. In ~~2018~~2019 and ~~2017~~2018, we spent a total of $4.9 million and $4.3 million, respectively, in capital expenditures related to station repack, which were recorded as assets under the property and equipment caption in the Balance Sheets. The Company received $25.87 million ofand ~~which~~$2.8 ~~has~~million ~~been~~in ~~reimbursed~~reimbursements byfrom the FCC related to these expenditures in 2019 and 2018, respectively, which were recorded as operating income in the accompanying Statements of Operations. As of December 31, ~~2018~~2019, ~~we expect to incur~~ approximately $148.04 million of estimated remaining costs in connection with the station repack are expected to be incurred by the Company, some or all of which will be reimbursable. If the FCC fails to fully reimburse ~~our~~the Company’s repacking costs, wethe Company could have increased costs related to the ~~repacking~~repack.

2325

Historical Performance

Revenue

The following table sets forth the principal types of revenue earned by our stations for the years ended December 31 (in thousands):

	2018			2017			2016
		2019			2018			2017
Retransmission compensation	$	68,365		$	65,854		$	56,802
Distribution revenue		$	76,326		$	68,365		$	65,854
Other		862			712			629
Revenue from Nexstar			34,652			39,997			36,546
Barter revenue		-			4,026			3,971
Other			1,265			862			712
Revenue from Nexstar		39,997			36,546			42,791
Barter revenue			-			-			4,026
Net revenue	$	~~109,224~~$	112,243	$	~~107,138~~$	109,224	$	~~104,193~~$	107,138

On January 1, 2018, we adopted ASU 2014-09, Revenue from Contracts with Customers. The adoption resulted in certain changes in our revenue recognition policies and the presentation of certain revenue sources. Beginning in the first quarter of 2018, we no longer recognize barter revenue (and the related barter expense) resulting from the exchange of advertising time for certain program material. Under the Company’s historical accounting policy prior to the adoption of ASC 606, barter revenue and barter expense would have been $3.8 million for the year ended December 31, 2018.

Results of Operations

The following table sets forth a summary of our operations for the years ended December 31 (in thousands), and each component of operating expense as a percentage of net revenue:

	~~Years Ended December 31,~~	Years Ended December 31,
	2018								2017								2016
		2019								2018								2017
	~~Amount~~	Amount			%	%			~~Amount~~	Amount			%	%			~~Amount~~	Amount		%	%
Net revenue	$	~~109,224~~	112,243			~~100.0~~	100.0		$	~~107,138~~	109,224			~~100.0~~	100.0		$	~~104,193~~	107,138		~~100.0~~	100.0
Operating expenses (income):
Corporate expenses		~~2,331~~	2,093			~~2.1~~	1.9			~~1,727~~	2,331			~~1.6~~	2.1			~~1,372~~	1,727		~~1.3~~	1.6
Station direct operating expenses		~~40,861~~	48,736			~~37.4~~	43.4			~~35,802~~	40,861			~~33.4~~	37.4			~~30,201~~	35,802		~~29.0~~	33.4
Selling, general and administrative expenses, excluding corporate		~~2,634~~	2,382			~~2.4~~	2.1			~~2,426~~	2,634			~~2.2~~	2.4			~~2,177~~	2,426		~~2.1~~	2.2
Fees incurred pursuant to local service agreements with Nexstar		~~55,650~~	61,215			~~51.0~~	54.5			~~35,500~~	55,650			~~33.1~~	51.0			~~18,000~~	35,500		~~17.3~~	33.1
Barter expense		-	-			-	-			~~4,026~~	-			~~3.8~~	-			~~3,971~~	4,026		~~3.8~~	3.8
Depreciation		~~3,171~~	2,586			~~2.9~~	2.3			~~2,342~~	3,171			~~2.2~~	2.9			~~2,400~~	2,342		~~2.3~~	2.2
Amortization of intangible assets		~~2,129~~	1,919			~~1.9~~	1.7			~~2,392~~	2,129			~~2.2~~	1.9			~~2,422~~	2,392		~~2.3~~	2.2
Amortization of broadcast rights, excluding barter		1,584				1.5				1,619				1.5				1,596			1.5
Amortization of broadcast rights			1,493				-				1,584				1.5				1,619			1.5
Reimbursement from the FCC related to station repack		~~(2,818~~	)(5,663	)		~~(2.6~~	)(5.0	)		-	(2,818	)		-	(2.6	)		-	-		-	-
Total operating expenses		~~105,542~~	114,761							~~85,834~~	105,542							~~62,139~~	85,834
Income from operations	$	3,682							$	21,304							$	42,054
(Loss) Income from operations		$	(2,518	)						$	3,682							$	21,304

2426

Year Ended December 31, 2019 Compared to Year Ended December 31, 2018

Revenue

Net revenue for the year ended December 31, 2019 increased by $3.0 million, or 3%, from the same period in 2018.

Revenue from Nexstar was $34.7 million for the year ended December 31, 2019, compared to $40.0 million for the same period in 2018, a decrease of $5.3 million, or 13%, as a result of 2019 not being an election year. The revenue we earn from Nexstar through our JSAs is directly correlated to the advertising revenue at our stations.

Distribution revenue was $76.3 million for the year ended December 31, 2019, compared to $68.4 million for the same period in 2018, an increase of $7.9 million, or 12%. The increase was primarily due to scheduled annual escalation of rates per subscriber and the renewals of smaller contracts providing for higher rates per subscriber (contracts generally have a three-year term). Broadcasters currently deliver more than 30% of all television viewing audiences in a pay television household but are paid approximately 12-14% of the total basic cable programming fees. We anticipate continued increase of distribution revenue until there is a more balanced relationship between viewers delivered and fees paid for delivery of such viewers.

Operating Expenses

Corporate expenses, costs associated with the centralized management of our stations, were consistent at $2.1 million for the year ended December 31, 2019, compared to $2.3 million for the same period in 2018.

Station direct operating expenses, consisting primarily of news, engineering and programming and station selling, general and administrative expenses were $51.1 million for the year ended December 31, 2019, compared to $43.5 million for the same period in 2018, an increase of $7.6 million, or 17%. The increase was primarily due to an increase in programming costs of $7.8 million, primarily related to contract renewals and scheduled annual escalation of our network affiliation agreements. Network affiliation fees have been increasing industry wide and will continue to increase over the next several years.

Local service agreement fees associated with Nexstar relate to services provided by Nexstar in the production of newscasts, technical maintenance, promotional and administrative support under the SSAs. The local service agreement fees were $61.2 million for the year ended December 31, 2019, compared to $55.7 million for the same period in 2018, an increase of $5.5 million, due to scheduled annual escalation in the recurring SSA fees.

Depreciation of property and equipment was $2.6 million for the year ended December 31, 2019, compared to $3.2 million for the year ended December 31, 2018, a decrease of $0.6 million, or 18%. This was primarily due to decreased depreciation of various assets as a result of a smaller amount of assets being put into service during the year.

Amortization of intangible assets was consistent at $1.9 million for the year ended December 31, 2019 and $2.1 million for the year ended December 31, 2018.

Interest Expense

Interest expense was consistent at $10.8 million for the year ended December 31, 2019, compared to $11.1 million for the year ended December 31, 2018.

Loss on Extinguishment of Debt

There was no loss on extinguishment of debt for the year ended December 31, 2019. In 2018, we refinanced our Term Loan B and revolving loan, resulting in a loss on extinguishment of debt of $0.5 million, representing the write-off of unamortized debt financing costs.

Income Taxes

Income tax expense was $15.3 million for the year ended December 31, 2019, compared to a $2.0 million income tax benefit for the same period in 2018, an increase of $17.3 million. The effective tax rates for the years ended December 31, 2019 and 2018 were (114.6%) and 25.9%, respectively. A valuation allowance of $18.6 million was established in December 31, 2019 which had a rate impact of (138.9)%.

Year Ended December 31, 2018 Compared to Year Ended December 31, 2017

Revenue

Net revenue for the year ended December 31, 2018 increased by $2.1 million, or 1.9%, from the same period in 2017.

Revenue from Nexstar was $40.0 million for the year ended December 31, 2018, compared to $36.5 million for the same period in 2017, an increase of $3.5 million, or 9.4%, due to increased political advertising from our stations partially offset by decreased local and national advertising.

Compensation from retransmission consent was $68.4 million for the year ended December 31, 2018, compared to $66.0 million for the same period in 2017, an increase of $2.5 million, or 3.8%. The increase was primarily due to scheduled annual escalation of rates per subscriber and the renewals of smaller contracts providing for higher rates per subscriber (contracts generally have a three-year term). Broadcasters currently deliver more than 30% of all television viewing audiences but are paid approximately 12-14% of the total basic cable programming fees. We anticipate continued increase of retransmission fees until there is a more balanced relationship between viewers delivered and fees paid for delivery of such viewers.

Operating Expenses

Corporate expenses, costs associated with the centralized management of our stations, were $2.3 million for the year ended December 31, 2018, compared to $1.7 million for the same period in 2017, an increase of $0.6 million, or 35.0%. The increase was primarily due to an increase in professional services of $0.3 million, resulting from our debt refinancing and the timing of services performed, and an increase in payroll expenses of $0.2 million due to renegotiated employment contracts effective July 1, 2017.

Station direct operating expenses, consisting primarily of news, engineering and programming, and station selling, general and administrative expenses were $43.5 million for the year ended December 31, 2018, compared to $38.2 million for the same period in 2017, an increase of $5.3 million, or 13.9%. The increase was primarily due to an increase in programming costs of $5.0 million, primarily related to contract renewals and scheduled annual escalation of our network affiliation agreements. Network affiliation fees have been increasing industry wide and will continue to increase over the next several years.

Local service agreement fees associated with Nexstar relate to services provided by Nexstar in the production of newscasts, technical maintenance, promotional and administrative support under the SSAs. Effective July 1, 2017, we amended the SSAs with Nexstar resulting in an increase in the recurring SSA fees. The local service agreement fees were $55.7 million for the year ended December 31, 2018, compared to $35.5 million for the same period in 2017, an increase of $20.2 million, or 56.8%.

Depreciation of property and equipment was $3.2 million for the year ended December 31, 2018, compared to $2.2 million for the year ended December 31, 2017, an increase of $1.0 million, or 45.5%. This was primarily due to increased depreciation of various assets that were disposed and are being replaced in connection with the station repack.

Amortization of intangible assets was consistent at $2.1 million for the year ended December 31, 2018 and $2.4 million for the year ended December 31, 2017.

Interest Expense

Interest expense was $11.1 million for the year ended December 31, 2018, compared to $10.1 million for the same period in 2017, an increase of $1.0 million, or 9.5%. This increase was primarily due to an increasing trend in London Interbank Offered Rate (“LIBOR”).

Loss on Extinguishment of Debt

Loss on extinguishment of debt was $0.5 million for the year ended December 31, 2018, compared to $2.1 million for the same period in 2017, a decrease of $1.6 million, or 76.2%. In 2018, we refinanced our Term Loan B and revolving loan, resulting in a loss on extinguishment of debt of $0.5 million, representing the write-off of unamortized debt financing costs. In 2017, we refinanced our then existing Term Loan B with an outstanding principal of $225.9 million, resulting in a loss on extinguishment of debt of $2.1 million, representing the write-off of unamortized debt financing costs and debt discounts.

Income Taxes

Income tax benefit was $2.0 million for the year ended December 31, 2018, compared to a $3.4 million income tax expense for the same period in 2017, a decrease of $5.4 million. The effective tax rates for the years ended December 31, 2018 and 2017 were (25.9%) and 37.6%, respectively.

In 2017, the Tax Cuts and Jobs Act of 2017 was signed into law which reduced the federal corporate income tax rate from 35% to 21%. The reduction in the federal corporate income tax rate resulted in a reduction of our reserves for uncertain tax positions and a corresponding recognition of income tax benefit of $1.5 million in 2017, or an increase to the effective tax rate of 16.3% between the two periods. Additionally, the reduction in the federal corporate income tax rate resulted in a reduction to net deferred tax asset and a corresponding recognition of income tax expense of $1.2 million in 2017, or a decrease to the effective tax rate between the two periods of 13.5%.

Year Ended December 31, 2017 Compared to Year Ended December 31, 2016

Revenue

Net revenue for the year ended December 31, 2017 increased by $2.9 million, or 2.8%, from the same period in 2016. This increase was primarily attributed to compensation from retransmission consent.

Revenue from Nexstar was $36.5 million for the year ended December 31, 2017, compared to $42.8 million for the same period in 2016, a decrease of $6.2 million, or 14.6%, as 2017 was neither an election year nor an Olympic year. The revenue we earn from Nexstar through our JSAs is directly correlated to the advertising revenue earned at our stations.

Compensation from retransmission consent was $65.8 million for the year ended December 31, 2017, compared to $56.8 million for the same period in 2016, an increase of $9.1 million, or 15.9%. The increase was primarily due to retransmission consent providing for higher rates per subscriber during the period.

Operating Expenses

Corporate expenses, costs associated with the centralized management of our stations, were $1.7 million for the year ended December 31, 2017, compared to $1.4 million for the same period in 2016, an increase of $0.3 million, or 25.9%. The increase was primarily due to an increase in professional services of $0.1 million, resulting from the timing of services performed, and an increase in payroll expenses of $0.2 million due to renegotiated employment contracts effective July 1, 2017.

Station direct operating expenses, consisting primarily of news, engineering and programming, and station selling, general and administrative expenses were $38.2 million for the year ended December 31, 2017, compared to $32.2 million for the same period in 2016, an increase of $5.9 million, or 18.5%. The increase was primarily due to an increase in programming costs primarily related to recently enacted network affiliation agreements. Network affiliation fees have been increasing industry wide and will continue to increase over the next several years.

Local service agreement fees associated with Nexstar relate to services provided by Nexstar in the production of newscasts, technical maintenance, promotional and administrative support under the SSAs. Effective July 1, 2017, we amended the SSAs with Nexstar resulting in an increase in the recurring SSA fees. The local service agreement fees were $35.5 million for the year ended December 31, 2017, compared to $18.0 million for the same period in 2016, an increase of $17.5 million, or 97.2%.

Depreciation of property and equipment was consistent at $2.3 million for the year ended December 31, 2017 and $2.4 million for the year ended December 31, 2016.

Amortization of intangible assets was consistent at $2.4 million for the years ended December 31, 2017 and 2016.

Interest Expense

Interest expense was $10.1 million for the year ended December 31, 2017, compared to $10.3 million for the same period in 2016, a decrease of $0.2 million, or 1.1%. This decrease was primarily attributable to repayments of principal on our outstanding term loan and a reduction of the term loan and revolving credit facility interest rates in connection with the July 19, 2017 amendments as discussed in the Executive Summary above.

Income Taxes

Income tax expense was $3.4 million for the year ended December 31, 2017, compared to $12.3 million for the same period in 2016, a decrease of $8.9 million. The effective tax rates for the years ended December 31, 2017 and 2016 were 37.6% and 38.9%, respectively.

In 2017, the Tax Cuts and Jobs Act of 2017 was signed into law which reduced the federal corporate income tax rate from 35% to 21%. The reduction in the federal corporate income tax rate resulted in a reduction of our reserves for uncertain tax positions and a corresponding recognition of income tax benefit of $1.5 million in 2017, or a decrease to the effective tax rate of 16.3%. Additionally, the reduction in the federal corporate income tax rate resulted in a reduction to net deferred tax asset and a corresponding recognition of income tax expense of $1.2 million in 2017, or an increase to the effective tax rate of 13.5%. Other adjustments also resulted in the reduction to deferred tax assets of $0.1 million, or an increase to the effective tax rate of 1.2%.

Liquidity and Capital Resources

We are highly leveraged, which makes us vulnerable to changes in general economic conditions. Our ability to meet the future cash requirements described below depends on our ability to generate cash in the future, which is subject to general economic, financial, competitive, legislative, regulatory and other conditions, many of which are beyond our control. Our ability to meet future cash requirements is also dependent upon the local service agreements we have entered into with Nexstar. Under our local service agreements, Nexstar sells our advertising time and pays us a percentage of the amount collected. The payments we receive from Nexstar are a significant component of our cash flows. On March 2227, ~~2019~~2020, Nexstar represented to us in a letter of support that it will continue the various local service agreements under which it provides sales and other services to our television stations, thereby providing financial support to enable us to continue to operate as a going concern. We believe that with Nexstar’s pledge to continue the local service agreements, our available cash, anticipated cash flow from operations and available borrowings under our senior secured credit facility should be sufficient to fund working capital, capital expenditure requirements, interest payments and scheduled debt principal payments for at least the next twelve months from March 2227, ~~2019~~2020. In order to meet future cash needs we may, from time to time, borrow under our existing senior secured credit facility. We will continue to evaluate the best use of our operating cash flow among capital expenditures and debt reduction.

Overview

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

	Years Ended December 31,
	2018			2017			2016
	2019			2018			2017
Net cash provided by operating activities	$	~~4,810~~627		$	4,~~696~~810		$	54,~~372~~696
Net cash used in investing activities		(149,~~226~~330	)		(1,~~400~~226	)		(~~241~~1,400	)
Net cash used in financing activities		(2,310	)		(246	)		(3,018	)
Net cash provided by (used in) financing activities		46,591			(2,310	)		(246	)
Net increase in cash and cash equivalents	$	1,274		$	3,050		$	2,113
Net (decrease) increase in cash and cash equivalents	$	(2,112	)	$	1,274		$	3,050
Cash paid for interest	$	109,~~953~~505		$	910,~~639~~953		$	89,~~685~~639
Cash paid for income taxes, net of refunds	$	221		$	1,101		$	1,307
Cash (paid) received from income tax refunds, net of cash paid for income taxes	$	(1,147	)	$	221		$	1,101

	As of December 31,
	2018		2017
	2019		2018
Cash and cash equivalents	$	108,~~798~~686	$	910,~~524~~798
Long-term debt including current portion		~~224~~223,~~639~~065		~~225~~224,~~742~~639
Unused revolving loan commitments under senior secured credit facilities		3,000		3,000

Cash Flows – Operating Activities

Net cash ~~flows~~ provided by operating activities ~~increased~~decreased by $04.12 million during the year ended December 31, ~~2018~~2019 compared to the same period in ~~2017~~2018. This was primarily attributable to ~~$27.5~~a ~~million~~smaller ~~resulting~~amount ~~from the timing~~ of contractual payments under local service agreements with Nexstar of $2.1 million, a source of cash resulting from timing of accounts receivable collections of $4.2.7 million, and an increase in ~~net~~the ~~revenue~~recurring SSA fees of $25.16 million. These ~~increases~~decreases were ~~partially~~ offset by an increase in ~~the~~net ~~recurring~~revenue ~~SSA fees~~ of $203.20 million and use of cash resulting from timing of payments to vendors of $11.86 million.

Net cash flows provided by operating activities decreased by $0.7 million during the year ended December 31, 2017 compared to the same period in 2016. The decrease was primarily due to a $0.8 million increase in contractual payments under local service agreements with Nexstar.29

Net cash provided by operating activities increased by $0.1 million during the year ended December 31, 2018 compared to the same period in 2017. This was primarily attributable to $27.5 million resulting from the timing of contractual payments under local service agreements with Nexstar, a source of cash resulting from timing of accounts receivable collections of $4.1 million, and an increase in net revenue of $3.0 million. These increases were partially offset by an increase in the recurring SSA fees of $20.2 million and use of cash resulting from timing of payments to vendors of $11.8 million.

Cash Flows – Investing Activities

Net cash ~~flows~~ used in investing activities for the year ended December 31, ~~2018~~2019 ~~were~~was $049.23 million, compared to $1.42 million and $01.24 million for the same period in ~~2017~~2018 and ~~2016~~2017, respectively.

In 2019, we spent $6.1 million in capital expenditures and received $5.7 million in reimbursements from the FCC related to station repack. We also paid off Marshall’s term loan and revolver totaling $48.9 million which we treated as an investment in loan receivable from Marshall.

In 2018, we spent $4.0 million in capital expenditures and received $2.8 million in reimbursements from the FCC related to station repack.

In 2017, we paid the remaining purchase price for the acquisition of Parker of $0.8 million and spent $0.7 million in capital expenditures. We also received $0.1 million in proceeds from the disposal of property and equipment.

In 2016, we spent $0.2 million in capital expenditures.

Cash Flows – Financing Activities

Net cash ~~flows~~provided ~~used~~by in financing activities for the year ended December 31, ~~2018~~2019 ~~were~~was $246.36 million, compared to net cash used in financing activities of $0.2.3 million and $3.0.2 million for the same period in ~~2017~~2018 and ~~2016~~2017, respectively.

In ~~2018~~2019, we received a $50.0 million of cash from Nexstar in connection with our assumption of Nexstar’s guarantee of Marshall debt and payment of amounts due from Nexstar. Of the total cash received, we utilized, $48.9 million to honor our guarantee and pay off of Marshall’s debt. The remainder was used in our operations. In 2019, we also paid the scheduled principal maturities under our term loan of $2.3 million.

In 2018, we paid the scheduled principal maturities under our term loan of $2.3 million.

In 2017, we issued new long-term debt of $230.6 million, net of debt discount, to refinance our term loan with a principal balance of $225.9 million. During 2017, we also paid the scheduled principal maturities under our term loan of $1.2 million.

In 2016, we paid the scheduled principal maturities under our term loan of $2.3 million.

Future Sources of Financing and Debt Service Requirements

As of December 31, ~~2018~~2019, we had total debt of $~~224~~223.61 million which represented ~~110~~128.47% 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 our debt, which reduces the funds available for working capital, capital expenditures, acquisitions and other general corporate purposes.

The total amount of borrowings available to us under our revolving credit facility is based on covenant calculations contained in Nexstar’s credit agreement. As of December 31, ~~2018~~2019, we have $3.0 million unused revolving loan commitment under our senior secured credit facility.

The following table summarizes the approximate aggregate amount of principal indebtedness scheduled to mature for the periods referenced as of December 31, ~~2018~~2019 (in thousands):

		Total				~~2019~~2020				~~2020-~~2021-2022				~~2022-~~2023-2024				~~Thereafter~~
Senior secured credit facility		$	~~228~~226,~~527~~242			$	2,285			$	4,570			$	4219,~~570~~387			$	~~217,102~~

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 our existing credit facility, obtain access to a new credit facility or otherwise issue debt in the future and could increase the cost of such debt.

Collateralization and Guarantees of Debt

Nexstar guarantees full payment of all obligations under ~~our~~the Mission senior secured credit facility in the event of ~~our~~Mission’s default. Similarly, weMission ~~are~~is a guarantor of Nexstar’s senior secured credit facility, the $~~900~~1.0785 ~~million~~billion 5.625% senior unsecured notes due 2027 (the “5.625% Notes due 2027”) issued by Nexstar and the $~~275~~900.0 million 65.~~125~~625% senior unsecured notes due 2024 (the “5.625% Notes due 2024”) issued by Nexstar. The senior secured credit facilities are collateralized by a security interest in substantially all the combined assets, excluding FCC licenses, of ~~Nexstar~~the Company and usNexstar.

The 5.625% Notes due 2027 and the 65.~~125~~625% Notes due 2024 are general senior unsecured obligations subordinated to all of ~~our~~Mission’s senior secured debt. In the event that Nexstar is unable to repay amounts due under these debt obligations, wethe Company will be obligated to repay such amounts. The maximum potential amount of future payments that weMission would be required to make under these guarantees would be generally limited to the amount of borrowings outstanding under Nexstar’s senior secured credit facility, and the aggregate principal amount outstanding under the 5.625% Notes, due 2027 and the 65.~~125~~625% Notes due 2024. As of December 31, ~~2018~~2019, Nexstar had $~~888~~1.2785 ~~million~~billion ~~outstanding~~aggregate ~~obligations~~principal amount outstanding under its 5.625% Notes due 2027, $~~273~~900.40 million ~~outstanding~~aggregate ~~obligations~~principal amount outstanding under its 65.~~125~~625% Notes due 2024 and a maximum commitment of $25.~~278~~830 billion under its senior secured credit facility, of which $14.~~289~~116 billion in Term Loan B ~~and~~(including new Term Loan B), $~~825.~~1.450 billion ~~million~~ in Term Loan A (including new Term Loan A), and $23.7 million of standby letters of credit were outstanding.

On January 30, 2020 and February 28, ~~2019~~2020, Nexstar prepaid $6030.0 million and $100.0 million, respectively, of the outstanding principal balance under its old Term Loan B.

Debt Covenants

Our ability to continue as a going concern is dependent on Nexstar’s pledge to continue the local service agreements described in a letter of support dated March 2227, ~~2019~~2020. Our senior secured credit facility agreement does not contain financial covenant ratio requirements; however, it does include an event of default if Nexstar does not comply with all covenants contained in its credit agreement. Nexstar’s senior secured credit facility agreement contains covenants which require Nexstar to comply with a maximum consolidated first lien net leverage ratio of 4.25 to 1.00. The covenants, which are calculated on a quarterly basis, include the combined results of Nexstar and us. The indentures governing Nexstar’s 65.~~125~~625% Notes due 2027 and Nexstar’s 5.625% Notes due 2024 contain restrictive covenants customary for borrowing arrangements of these types. As of December 31, ~~2018~~2019, Nexstar informed us that it was in compliance with all covenants contained in the credit agreement governing its senior secured credit facility and the indentures governing its 65.~~125~~625% Notes due 2027 and 5.625% Notes due 2024.

No Off-Balance Sheet Arrangements

As of December 31, ~~2018~~2019, 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.

Contractual Obligations

The following summarizes our contractual obligations as of December 31, ~~2018~~2019, and the effect such obligations are expected to have on our liquidity and cash flow in future periods (in thousands):

	Total		~~2019~~2020		2021-2022		~~2020-2021~~		2023-2024		~~2022-2023~~		Thereafter		~~Thereafter~~
Recorded contractual obligations:(1)
Senior secured credit facility	$	~~228~~226,~~527~~242	$	2,285	$	4,570	$	~~4,570~~	$	219,387	$	~~4,570~~	$	-	$	~~217,102~~
Broadcast rights current cash commitments(2)		~~1,076~~794		~~325~~311		391		~~495~~		92		~~256~~		-		-
Unrecorded contractual obligations:
Cash interest on debt(3)		5335,~~003~~812		89,~~994~~008		17,692		~~17,740~~		9,112		~~17,348~~				~~8,921~~
Operating lease obligations		1311,~~956~~472		2,~~433~~434		2,384		~~3,954~~		1,843		~~1,836~~		4,811		~~5,733~~
Broadcast rights future cash commitments(4)		1,~~367~~543		~~953~~908		602		~~412~~		33		2		-		-
Other		1,178		453				725				-				-
	$	275,863	$	14,946	$	25,639			$	230,467			$	4,811
	$	299,107	$	15,443			$	27,896			$	24,012			$	231,756

(1) As of December 31, ~~2018~~2019, we had $2.2 million of gross unrecognized tax benefits. This liability represents an estimate of tax positions that the Company has taken in its tax returns which may ultimately not be sustained upon examination by the tax authorities. The resolution of these tax positions may not require cash settlement due to the existence of federal and state NOLs. As such, our contractual obligations table above excludes this liability.

(2)	Future minimum payments for license agreements for which the license period has begun.

~~(3) Estimated interest payments due, as if all debt outstanding as of December~~ 31~~, 2018 remained outstanding until maturity, based on interest rates in effect at December 31, 2018.~~

(3)	Estimated interest payments due, as if all debt outstanding as of December 31, 2019 remained outstanding until maturity, based on interest rates in effect at December 31, 2019.

(4)	Future minimum payments for license agreements for which the license period has not commenced and no liability has been recorded.

Critical Accounting Policies and Estimates

Our Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”), which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the Financial Statements and reported amounts of revenue and expenses during the period. On an ongoing basis, we evaluate our estimates, including those related to business acquisitions, goodwill and intangible assets, property and equipment, bad debts, broadcast rights, ~~retransmission~~distribution revenue and income taxes. 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.

For an overview of our significant accounting policies, we refer you to Note 2 to our Financial Statements in Part IV, Item 15 of this Annual Report on Form 10-K. We believe the following critical accounting policies are those that are the most important to the presentation of our Financial Statements, affect our more significant estimates and assumptions, and require the most subjective or complex judgments by management.

Valuation of Goodwill and Intangible Assets

Intangible assets represented $9088.01 million, or ~~41.6~~43%, of our total assets as of December 31, ~~2018~~2019. Intangible assets consist primarily of goodwill, FCC licenses, network affiliation agreements and customer relationships arising from acquisitions. The purchase prices of acquired businesses are allocated to the assets and liabilities acquired at estimated fair values at the date of acquisition using various valuation techniques, including discounted projected cash flows, the cost approach and the income approach. The estimated fair value ~~estimates~~of ~~are~~an FCC license is calculated using a discounted cash flow model referred to as the Greenfield Method. The Greenfield Method attempts to isolate the income that is attributable to the license alone. This approach is based onupon modeling a hypothetical start-up station and building it up to a normalized operation that, by design, lacks an affiliation with a network (commonly known as an independent station), lacks inherent goodwill and whose other assets have essentially been added as part of the build-up process. The Greenfield Method assumes annual cash flows over a projection period model. Inputs to this model include, but are not limited to, ~~expected~~(i) ~~future~~a four-year build-up period for a start-up station to reach a normalized state of operations, (ii) market long-term revenue growth rate over a projection period, (iii) estimated market revenue share for a typical market participant without a network affiliation, (iv) estimated profit margins based on industry data, (v) capital expenditures based on the size of market and ~~cash~~the ~~flows~~type of station being constructed, ~~expected~~(vi) ~~future~~estimated ~~growth~~tax rates in the appropriate jurisdiction, and (vii) an estimated discount ~~rates.~~rate ~~The~~using ~~excess~~a weighted average cost of ~~the~~capital ~~purchase~~analysis. ~~price~~The ~~over~~Greenfield ~~the~~Method ~~fair~~also includes an estimated terminal value ofby ~~net~~discounting ~~assets~~an ~~acquired~~estimated isannual ~~recorded~~cash asflow ~~goodwill~~with an estimated long-term growth rate. IfThe assumptions used in estimating the fair value of ~~these~~a ~~assets~~network affiliation agreement are similar to those used in the valuation of an FCC license. The Greenfield Method is ~~less~~also ~~than~~utilized in the ~~carrying~~valuation ~~value~~of network affiliation agreements except that the estimated market revenue share, weestimated ~~may~~profit bemargins, ~~required~~capital expenditures and other assumptions reflect a market participant premium based on the programming of a network affiliate relative to ~~record~~an independent station. This approach would result in an ~~impairment~~estimated ~~charge~~fair value of the collective FCC license and a network affiliation agreement. The excess of the purchase price over the fair value of net assets acquired is recorded as goodwill.

WeThe ~~aggregate~~Company’s ~~our~~goodwill ~~television~~and ~~station~~FCC ~~markets~~licenses ~~into~~are aconsidered ~~single~~to ~~broadcast~~be ~~business~~indefinite-lived ~~reporting~~intangible ~~unit~~assets ~~for~~and ~~purposes~~are ofnot ~~our~~amortized ~~goodwill~~but are tested for impairment ~~tests~~annually ~~because~~in the Company’s fourth quarter or whenever events or changes in circumstances indicate that such assets might be impaired. The use of ~~their~~an ~~similar~~indefinite ~~economic~~life ~~characteristics~~for FCC licenses contemplates the Company’s historical ability to renew its licenses and that such renewals generally may be obtained indefinitely and at little cost. WeTherefore, ~~perform~~cash ~~our~~flows derived from the FCC ~~license~~licenses ~~impairment~~are ~~tests~~expected to continue indefinitely. Network affiliation agreements are subject to amortization computed on a ~~market~~straight-line basis over the estimated useful life of 15 years. The 15-year life assumes affiliation contracts will be renewed upon expiration. Changes in the likelihood of renewal could require a change in the useful life of such assets and cause an acceleration of amortization. The Company evaluates the remaining lives of its network affiliations whenever changes occur in the likelihood of affiliation contract renewals, and at least on an annual basis.

WeThe ~~test~~Company ~~our~~aggregates ~~goodwill~~its ~~and~~television ~~FCC~~stations ~~licenses~~into ina ~~our~~single ~~fourth~~broadcast ~~quarter~~business ~~each~~reporting ~~year,~~unit orfor ~~whenever~~purposes ~~events or changes in circumstances indicate that such assets might be impaired. We first assess the qualitative factors to determine the likelihood~~ of ~~our~~ goodwill ~~and~~impairment ~~FCC~~tests ~~licenses~~because being impaired. Our qualitative analysis includes, but is not limited to, assessing the changes in macroeconomic conditions, regulatory environment, industry and market conditions, and the financial performance versus budget of the ~~reporting~~stations’ ~~units,~~similar aseconomic ~~well~~characteristics. asThe ~~any~~Company’s ~~other~~impairment ~~events~~review orfor ~~circumstances specific to the reporting unit or the~~ FCC licenses. ~~If it~~ is ~~more~~performed ~~likely~~at ~~than not that~~ the ~~fair~~television ~~value~~station ofmarket ~~a reporting unit or an FCC license is greater than their respective carrying amounts, no further testing will be required~~level. ~~Otherwise, we will apply the quantitative impairment test method.~~

The quantitative impairment test for goodwill is performed by comparing the fair value of a reporting unit with its carrying amount. If the fair value of the reporting unit exceeds its carrying value, goodwill is not impaired, and no further testing is required. If the fair value of the reporting unit is less than the carrying value, an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The quantitative impairment test for FCC licenses consists of a market-by-market comparison of the carrying amounts of FCC licenses with their fair value, using a discounted cash flow analysis. An impairment is recorded when the carrying value of an FCC license exceeds its fair value.32

WeThe ~~test~~Company ~~our~~first ~~finite-lived~~assesses ~~intangible~~the ~~assets~~qualitative ~~whenever~~factors ~~events~~to ordetermine ~~circumstances~~the ~~indicate~~likelihood ~~that~~of ~~their~~the ~~carrying~~goodwill ~~amount~~and ~~may~~FCC ~~not~~licenses bebeing ~~recoverable~~impaired. The qualitative analysis includes, ~~relying~~but onis anot ~~number~~limited ofto, ~~factors~~assessing ~~including~~the ~~operating~~changes ~~results~~in macroeconomic conditions, ~~business~~regulatory ~~plans~~environment, ~~economic~~industry ~~projections~~and market conditions, and ~~anticipated~~the ~~future~~financial ~~cash~~performance ~~flows.~~versus ~~Impairment~~budget inof the ~~carrying~~reporting ~~amount~~units, ofas awell ~~finite-lived~~as ~~intangible~~any ~~asset~~other isevents ~~recognized~~or ~~when~~circumstances specific to the ~~expected~~reporting ~~future~~units ~~operating~~or ~~cash~~the ~~flow~~FCC ~~derived~~licenses. ~~from~~If ~~the~~it ~~operations~~is tomore ~~which~~likely than not that the ~~asset~~fair ~~relates~~value of a reporting unit’s goodwill or a station’s FCC license is ~~less~~greater than its carrying ~~value~~amount, no further testing will be required. Otherwise, the Company will apply the quantitative impairment test method.

WeThe quantitative impairment test for goodwill is performed ~~our~~by ~~annual~~comparing ~~impairment~~the ~~tests~~fair onvalue ~~goodwill~~of ~~and~~a ~~FCC~~reporting ~~licenses~~unit ~~attributable~~with toits ~~our~~carrying ~~broadcast~~amount. ~~business~~If ~~using~~the fair value of the ~~qualitative~~reporting ~~analysis~~unit ~~approach~~exceeds its carrying value, goodwill is not impaired and ~~concluded~~no ~~that~~further ittesting ~~was~~is ~~more~~required. ~~likely~~If the fair value of the reporting unit is less than ~~not~~the ~~that~~carrying ~~their~~value, an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair ~~values~~value; ~~would~~however, ~~sufficiently~~the loss recognized should not exceed the ~~carrying~~total ~~amounts.~~amount ~~There~~of ~~were~~goodwill noallocated ~~indicators~~to that ~~our~~reporting ~~finite~~unit. The quantitative impairment test for FCC licenses consists of a market-~~lived~~by-market ~~intangible~~comparison ~~assets~~of ~~attributable~~the tocarrying ~~broadcast~~amounts ~~markets~~of ~~will~~FCC ~~not~~licenses bewith ~~recoverable~~their fair value, using the Greenfield Method of discounted cash flow analysis. An impairment is recorded when the carrying value of an FCC license exceeds its fair value.

Determining the fair value of the aggregated reporting unit and FCC licenses requires management to make a number of judgments about assumptions and estimates that are highly subjective and that are based on unobservable inputs. The actual results may differ from these assumptions and estimates, and it is possible that such differences could have a material impact on the Company’s Financial Statements. In addition to the various inputs (i.e., market growth, operating profit margins, discount rates) used to calculate the fair value of FCC licenses and reporting units, the Company evaluates the reasonableness of its assumptions by comparing the fair values of its reporting units and FCC licenses to recent market television station sale transactions.

The Company tests finite-lived intangible assets and other long-lived assets for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable, relying on a number of factors including operating results, business plans, economic projections and anticipated future cash flows. The impairment test for finite-lived intangible assets consists of an asset (asset group) comparison of the carrying amount with its estimated undiscounted future cash flows. An impairment in the carrying amount of a finite-lived intangible asset is recognized when the expected discounted future operating cash flow derived from the operation to which the asset relates is less than its carrying value.

Broadcast Rights Carrying Amount

We record broadcast rights contracts as an asset and a liability when the license period has begun, the cost of each program is known or reasonably determinable, we have accepted the program material, and the program is produced and available for broadcast. Cash broadcast rights are initially recorded at the contract cost and are amortized on a straight-line basis over the period the programming airs. The current portion of broadcast rights represents those rights available for broadcast which will be amortized in the succeeding year. At least quarterly, we evaluate the net realizable value, calculated using the average historical rates for the programs or the time periods the programming will air, of our broadcast rights and adjust amortization in that quarter for any deficiency calculated. As of December 31, ~~2018~~2019, the carrying amounts of our current broadcast rights were $0.3 million and non-current broadcast rights were $0.75 million.

Characterization of SSA Fees

We present the fees incurred pursuant to SSAs with Nexstar as an operating expense in our Financial Statements. Our decision to characterize the SSA fees in this manner is based on our conclusion that (a) the benefit our stations receive from the SSAs is sufficiently separate from the consideration paid to us from Nexstar under JSAs, (b) we can reasonably estimate the fair values of the benefits our stations receive under the SSAs, and (c) the SSA fees we pay to Nexstar do not exceed the estimated fair values of the benefits our stations receive.

30Distribution Revenue

~~Retransmission~~We ~~Revenue~~earn revenues from local cable providers, DBS services and other MVPDs and OVDs for the retransmission of our broadcasts. These revenues are typically earned based on a price per subscriber of the MVPD within the retransmission area. The distributors report their subscriber numbers to us generally on a 30- to 60-day lag, generally upon payment of the fees due to us. Prior to receiving the reports, we record revenue based on management’s estimate of the number of subscribers, utilizing historical levels and trends of subscribers for each distributor. Adjustments associated with the resolution of such estimates has, historically, been inconsequential.

We earn revenues from local cable providers, DBS services and other MVPDs and OTTDs for the retransmission of our broadcasts. These revenues are typically earned based on a price per subscriber of the MVPD within the retransmission area. The distributors report their subscriber numbers to us generally on a 30- to 60-day lag, generally upon payment of the fees due to us. Prior to receiving the reports, we record revenue based on management’s estimate of the number of subscribers, utilizing historical levels and trends of subscribers for each distributor. The impact of the lag in the number of subscribers is not significant.33

Income Taxes

We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and tax basis of assets and liabilities. A valuation allowance is applied against net deferred tax assets if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. While we have considered future taxable income in assessing the need for a valuation allowance, in the event that we were to determine that we would not be able to realize all or part of our deferred tax assets in the future, an adjustment to the valuation allowance would be charged to income in the period such a determination was made. Section 382 of the Code generally imposes an annual limitation on the amount of NOLs that may be used to offset taxable income when a corporation has undergone significant changes in stock ownership. Ownership changes are evaluated as they occur and could limit the ability to use NOLs. The Company ~~expects~~does not to be able to utilize the existing NOLs prior to their expiration.

The ability to use NOLs is also dependent upon the Company’s ability to generate taxable income. The NOLs could expire prior to their use. To the extent the Company’s use of NOLs is significantly limited, the Company’s income could be subject to corporate income tax earlier than it would if it were able to use NOLs, which could have a negative effect on the Company’s financial results and operations. Changes in ownership are largely beyond our control and we can give no assurance that we will continue to have realizable NOLs.

We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities. The determination is based on the technical merits of the position and presumes that each uncertain tax position will be examined by the relevant taxing authority that has full knowledge of all relevant information. We recognize interest and penalties relating to income taxes as components of income tax expense.

Recent Accounting Pronouncements

Refer to Note 2 of our Financial Statements in Part IV, Item 15(a) of this Annual Report on Form 10-K for a discussion of recently issued accounting pronouncements, including our expected date of adoption and effects on results of operations and financial position.

Item 7A.

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.

~~The~~Our ~~interest rate on the~~ term loan borrowings under our senior secured credit facility ~~was~~bear interest at a rate of 4.7701% as of December 31, ~~2018~~2019 and the interest rate on the revolving credit facility was 43.2751%, which represented the base rate, or ~~the London Interbank Offered Rate (“~~LIBOR”), plus the applicable margin, as defined. Interest is payable in accordance with the credit agreement.

If LIBOR were to increase by 100 basis points, or one percentage point, from its December 31, ~~2018~~2019 level, our annual interest expense would increase and cash flow from operations would decrease by approximately $2.3 million, based on the outstanding balance of our credit facility as of December 31, ~~2018~~2019. ~~Due~~An ~~to the LIBOR floor on our term loan, an~~ increase of 50 basis points in LIBOR would increase our annual interest expense and decrease our cash flow from operations by approximately $1.21 million. ~~Any~~A decrease inof ~~LIBOR~~100 ~~would not have an impact on our operations~~ or ~~cash~~50 ~~flows.~~basis Aspoints ~~of December 31, 2018, we have no financial instruments~~ in ~~place to hedge against changes in the benchmark interest rates on our senior credit facility.~~LIBOR

would decrease our annual interest expense and increase our cash flow from operations by approximately $2.3 million and $1.1 million, respectively. As of December 31, 2019, we have no financial instruments in place to hedge against changes in the benchmark interest rates on our senior credit facility.

Impact of Inflation

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

Item 8.

Financial Statements and Supplementary Data

Our Financial Statements are filed with this report. The Financial Statements and Supplementary Data are included in Part IV, Item 15(a) of this Annual Report on Form 10-K.

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

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

Based upon that evaluation, our President and Treasurer concluded that as of December 31, ~~2018~~2019, our disclosure controls and procedures were effective in providing reasonable assurance that information required to be disclosed in the reports we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to our management, including our President and Treasurer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

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

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Management assesses the effectiveness of our internal control over financial reporting as of December 31, ~~2018~~2019 based upon the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013).

Based on management’s assessment, we have concluded that our internal control over financial reporting was effective as of December 31, ~~2018~~2019.

Item 9B.

Other Information

None.

3235

PART III

Item 10.

Directors, Executive Officers of the Registrant and Corporate Governance

The table below sets forth information about our Directors and executive officers:

Name	Age	Position With Company
Nancie J. Smith	6566	Chairman of the Board and Secretary
Dennis Thatcher	7172	President, Treasurer and Director

Nancie J. Smith has served as our Secretary since December 1997. Ms. Smith was elected as Chairman of the Board effective December 19, 2011. Ms. Smith performed roles similar to our principal executive officer, principal financial officer and principal accounting officer until Mr. Thatcher’s appointment as President and Treasurer became effective.

Ms. Smith’s qualifications for being a Director of the Company include her years of experience in the television broadcast industry.

Dennis Thatcher was appointed as President and Treasurer and elected to the Board of Directors effective December 19, 2011. Mr. Thatcher previously served as our Executive Vice President and Chief Operating Officer since October 2004. From November 2003 to March 2004, Mr. Thatcher served as Regional Market Manager for United Media Partners. From November 2002 to October 2003, Mr. Thatcher served as General Sales Manager of KZTV for Eagle Creek Broadcasting. From July 2000 to October 2002, Mr. Thatcher pursued personal interests. From April 1998 to June 2000, Mr. Thatcher served as Senior Vice President and Central Regional Manager for Paxson Communications.

Mr. Thatcher’s qualifications for being a Director of the Company include his years of experience in the television broadcast industry.

Code of Ethics

Our Board of Directors adopted a code of ethics that applies to our senior management and Board of Directors, including our named executive officers. The purpose of the code of ethics is to promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships, to promote full, fair, accurate, timely and understandable disclosure in periodic reports required to be filed by us, and to promote compliance with all applicable rules and regulations that apply to us and our officers and Directors. The code of ethics is filed as Exhibit 14.1 hereto.

3336

Item 11.

Executive Compensation

The Board of Directors has submitted the following report and has recommended that the Compensation Discussion and Analysis set forth below be included in this Annual Report on Form 10-K for the year ended December 31, ~~2018~~2019 for filing with the SEC.

Compensation Discussion and Analysis

On July 1, 2017, the Company entered into an amended employment agreement with Dennis Thatcher to serve as President of the Company. The amended employment agreement provides for $300,000 in annual compensation beginning on July 1, 2017 with 3% annual increases thereafter and an annual bonus in an amount up to 20% of the annual compensation. The agreement has no fixed termination date. In the event of termination pursuant to a consolidation, merger or comparable transaction, as defined in the agreement, Mr. Thatcher is eligible to receive a severance payment of $1.0 million, payable within 30 days, and any accrued and unpaid salary and vacation time, payable as soon as is practicable. Mr. Thatcher is eligible to receive a one-time contract completion bonus of $500,000 if termination occurs on the contract expiration date of June 30, 2022, to increase by $100,000 annually each year the agreement is renewed. The agreement also contains non-competition and confidentiality restrictions on Mr. Thatcher. Prior to December 19, 2011, Mr. Thatcher served as our Chief Operating Officer and was compensated based on his scope of responsibilities, taking into account competitive market compensation paid by other similarly situated companies for this position. Mr. Thatcher also serves as a Director.

On July 1, 2017, the Company entered into an amended employment agreement with Nancie J. Smith to serve as Chairman of the Board and Secretary of the Company. The amended employment agreement provides for $300,000 in annual compensation beginning on July 1, 2017 with 3% annual increases thereafter and an annual bonus in an amount up to 15% of the annual compensation. The agreement has no fixed termination date. In the event of termination pursuant to a consolidation, merger or comparable transaction, as defined in the agreement, Ms. Smith is eligible to receive a severance payment of $1.0 million, payable within 30 days, and any accrued and unpaid salary and vacation time, payable as soon as is practicable. Ms. Smith is eligible to receive a one-time contract completion bonus of $500,000 if termination occurs on the contract expiration date of June 30, 2022, to increase by $100,000 annually each year the agreement is renewed. The agreement also contains non-competition and confidentiality restrictions on Ms. Smith. Prior to Ms. Smith’s employment as Chairman of the Board and Secretary of Mission on December 29, 2011, she was employed by the Company as Vice President and Secretary.

The following table sets forth the compensation earned or awarded for services rendered to the Company by our executive officers for the fiscal years ended December 31:

Summary Compensation Table

	Year		Salary		Bonus		StockAwards		OptionAwards		Non-EquityIncentive PlanCompensation	Change inPension Value andNon-QualifiedDeferredCompensationEarnings			All OtherCompensation		Total
Dennis ThatcherPresident, Treasurer and Director,	~~2018~~2019	$	~~304~~313,~~500~~331	$	6061,~~000~~800	$	—	$	—	$	—	$	—	$	~~250~~233	$	~~364~~375,~~750~~364
	2017		241,035		25,000		—		—		—		—		532	$	266,567
	2018		304,500		60,000		—		—		—		—		250		364,750
	2016		178,446		25,000		—		—		—		—		724		204,170
	2017		241,035		25,000		—		—		—		—		532		266,567
Nancie J. SmithChairman of the Board and Secretary	~~2018~~2019		~~304~~312,~~500~~209		4546,~~000~~350		—		—		—		—		1,~~999~~355		~~351~~359,~~499~~914
	2018		304,500		45,000		—		—		—		—		1,999		351,499
	2017		228,030		—		—		—		—		—		1,188		229,218
	2016		152,954		—		—		—		—		—		793		153,747

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The Company is owned by two shareholders, Nancie J. Smith, Chairman of the Board and Secretary, and Dennis Thatcher, President, Treasurer and Director. As of March 2227, ~~2019~~2020, Ms. Smith owned 510 shares of common stock (51% of common stock outstanding) and Mr. Thatcher owned 490 shares of common stock (49% of common stock outstanding).

3437

Item 13.

Certain Relationships and Related Transactions, and Director Independence

The following table summarizes the various local service agreements Mission-owned stations had in effect with Nexstar as of December 31, ~~2018~~2019:

Station	Market	Type of Agreement	Expiration	Consideration
WFXP	Erie, PA	TBA	8/17/30	Monthly payments received from Nexstar
KHMT	Billings, MT	TBA	12/15/29	Monthly payments received from Nexstar
KFQX	Grand Junction, CO	TBA	6/14/26	Monthly payments received from Nexstar
KJTL/KJBO-LP	Wichita Falls, TX-Lawton, OK	SSA JSA	6/30/25 5/31/1935	$~~165~~182 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
WYOU	Wilkes Barre-Scranton, PA	SSA JSA	6/30/25 9/30/24	$~~848~~933 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
KODE	Joplin, MO-Pittsburg, KS	SSA JSA	6/30/25 9/30/24	$~~307~~338 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
KRBC	Abilene-Sweetwater, TX	SSA JSA	6/30/25 6/30/23	$~~225~~247 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
KSAN	San Angelo, TX	SSA JSA	6/30/25 5/31/24	$~~188~~207 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
WAWV	Terre Haute, IN	SSA JSA	6/30/25 5/808/23	$7381 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
KCIT/KCPN-LP	Amarillo, TX	SSA JSA	6/30/25 4/30/1935	$~~220~~242 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
KAMC	Lubbock, TX	SSA JSA	6/30/25 2/16/35	$~~303~~333 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
KOLR	Springfield, MO	SSA JSA	6/30/25 2/16/35	$~~706~~776 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
WUTR	Utica, NY	SSA JSA	6/30/25 3/31/24	$92101 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
WTVO	Rockford, IL	SSA JSA	6/30/25 10/31/24	$~~321~~353 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
KTVE	Monroe, LA-El Dorado, AR	SSA JSA	6/30/25 1/16/28	$~~358~~393 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
WTVW	Evansville, IN	SSA JSA	6/30/25 118/3001/1921	$~~193~~212 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
KLRT/KASN	Little Rock-Pine Bluff, AR	SSA JSA	6/30/25 1/101/21	$~~578~~635 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
WVNY	Burlington-Plattsburgh, VT	SSA JSA	6/30/25 3/101/21	$~~284~~313 thousand per month paid to Nexstar 70% of net revenue received from Nexstar

Under these agreements, we are responsible for certain operating expenses of our stations and therefore may have unlimited exposure to any potential operating losses. We will continue to operate our stations under the SSAs and JSAs or TBAs until the termination of such agreements. The local service agreements generally have a term of eight to ten years and have terms for renewal periods. Nexstar indemnifies us for Nexstar’s activities pursuant to the local service agreements.

For disclosure of the amounts of revenue associated with and the fees incurred by Mission pursuant to the local service agreements our stations have with Nexstar, we refer you to Note 43 to the Financial Statements included in Part IV, Item 15(a) of this Annual Report on Form 10-K.

3538

Option Agreements

In consideration of Nexstar’s guarantee of our indebtedness, Nexstar has options to purchase the assets of all of our stations. Additionally, on November 29, 2011, Mission’s shareholders granted Nexstar an option to purchase any or all of our stock for a price equal to the pro rata portion of the greater of (1) five times the Mission stations’ cash flow, as defined in the agreement, reduced by the amount of indebtedness, as defined in the agreement, or (2) $100,000. This stock purchase option expires on November 2930, ~~2019~~2020.

The following table summarizes the station option agreements we have in effect with Nexstar as of December 31, ~~2018~~2019:

Station	Market	Affiliation	Expiration Date
KTVE	Monroe, LA-El Dorado, AR	NBC	1/16/27
KCIT and KCPN-LP	Amarillo, TX	FOX MNTV	5/1/28 5/1/28
WYOU	Wilkes Barre-Scranton, PA	CBS	5/19/28
KJTL and KJBO-LP	Wichita Falls, TX-Lawton, OK	FOX MNTV	6/1/28 6/1/28
KODE	Joplin, MO-Pittsburg, KS	ABC	4/24/21
KLRT/KASN	Little Rock-Pine Bluff, AR	FOX/The CW	1/1/22
WVNY	Burlington-Plattsburgh, VT	ABC	3/1/22
WAWV	Terre Haute, IN	ABC	5/9/22
KRBC	Abilene-Sweetwater, TX	NBC	6/13/22
KSAN	San Angelo, TX	NBC	6/13/22
WTVW	Evansville, IN	The CW/Bounce TV	11/1/22
KHMT	Billings, MT	FOX	12/31/22
KAMC	Lubbock, TX	ABC	12/31/22
KOLR	Springfield, MO	CBS	12/31/22
WUTR	Utica, NY	ABC	3/31/23
WFXP	Erie, PA	FOX	11/30/23
WTVO	Rockford, IL	ABC/MNTV	10/31/24
KFQX	Grand Junction, CO	FOX	6/13/22

Under the terms of these option agreements, Nexstar may exercise its option upon written notice to us. In each option agreement, the exercise price is 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. We may terminate each option agreement by written notice any time after the seventh anniversary date of the relevant option agreement. Nexstar’s acquisition of any station or our stock pursuant to an exercise of the applicable option is subject to prior FCC approval.

Item 14.

Principal Accountant Fees and Services

We retained PricewaterhouseCoopers LLP to audit the Company’s Financial Statements for the years ended December 31, ~~2018~~2019, ~~2017~~2018 and ~~2016~~2017 and review the Financial Statements included in each of ~~its~~The Company’s Quarterly Reports on Form 10-Q during such years and for tax compliance matters. The aggregate fees for professional services rendered by PricewaterhouseCoopers LLP in the three years ended December 31, ~~2018~~2019 for these various services were:

	2018	2017	2016
	2019	2018	2017
Audit Fees (1)	$ ~~206~~205,000	$ ~~203~~206,000	$ ~~223~~203,000
Audit Related Fees (2)	—	—	—
Tax Fees (3)	6570,~~625~~500	6265,~~000~~625	6762,000
All Other Fees (4)	—	—	—
Total	~~271~~275,~~625~~500	~~265~~271,~~000~~625	~~290~~265,000

(1)

“Audit Fees” are fees billed by PricewaterhouseCoopers LLP for professional services for the audit of the Financial Statements included in our Annual Report on Form 10-K and review of Financial Statements included in our Quarterly Reports on Form 10-Q, or for services that are normally provided by the auditors in connection with statutory and regulatory filings or engagements.

(2)	“Audit Related Fees” are fees billed by PricewaterhouseCoopers LLP for assurance and related services that are reasonably related to the performance of the audit or review of our Financial Statements.

(3)	“Tax Fees” are fees billed by PricewaterhouseCoopers LLP for tax compliance and consulting.

(4)	“All Other Fees” are fees billed by PricewaterhouseCoopers LLP for any services not included in the first three categories.

3639

PART IV

Item 15.

Exhibits and Financial Statement Schedules

(a) Documents filed as part of this report:

(1)

Financial Statements. The Financial Statements of Mission Broadcasting, Inc. listed on the index on page F-1 have been included beginning on page F-3 of this Annual Report on Form 10-K.

(2)

Exhibits. The exhibits listed on the accompanying Index to Exhibits on this Annual Report on Form 10-K are filed, furnished or incorporated into this Annual Report on Form 10-K by reference, as applicable.

Item 16.

Form 10-K Summary

Not applicable.

3740

INDEX TO EXHIBITS

Exhibit No.		Exhibit Index
3.1		Certificate of Incorporation of Mission Broadcasting, Inc. (f/k/a Mission Broadcasting of Wichita Falls, Inc.) (Incorporated by reference to Exhibit 3.1 to Annual Report on Form 10-K for the year ended December 31, 2002 (File No. 333-62916-02) filed by Mission Broadcasting of Wichita Falls, Inc.).
3.2		By-laws of Mission Broadcasting, Inc. (f/k/a Mission Broadcasting of Wichita Falls, Inc.) (Incorporated by reference to Exhibit 3.3 to Annual Report on Form 10-K for the year ended December 31, 2002 (File No. 333-62916-02) filed by Mission Broadcasting of Wichita Falls, Inc.).
4.1		Indenture, dated as of ~~January~~July 2927, ~~2015~~2016, ~~among~~between Nexstar ~~Broadcasting,~~Escrow ~~Inc.~~Corporation, ~~Nexstar Broadcasting Group, Inc.,~~ as ~~a guarantor~~issuer, ~~Mission Broadcasting, Inc., as a guarantor,~~ and Wells Fargo Bank, National Association, as trustee (~~Incorporated~~incorporated by reference to Exhibit 4.1 to Nexstar's Current Report on Form 8-K ~~(File No. 000-50478)~~ filed byJuly ~~Nexstar Broadcasting Group~~29, ~~Inc. on January 30, 2015~~2016).
4.2		Form of Senior Note (Incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Media Group, Inc. on ~~January~~July 3029, ~~2015~~2016).
4.3		First Supplemental Indenture, dated as of ~~July~~January 2717, ~~2016~~2017, ~~between~~by and among Nexstar ~~Escrow~~Broadcasting, ~~Corporation~~Inc., as issuer, the guarantors party thereto, and Wells Fargo Bank, National Association, as trustee (~~incorporated~~Incorporated by reference to Exhibit 4.13 to ~~Nexstar's~~ Current Report on Form 8-K (File No. 000-50478) filed ~~July~~by 29Nexstar Media Group, ~~2016~~Inc. on January 17, 2017).
4.4		~~Form~~Second Supplemental Indenture, dated as of ~~Senior~~September ~~Note~~19, 2019, by and among Nexstar Broadcasting, Inc., as issuer, the guarantors party thereto, and Wells Fargo, National Association, as trustee (Incorporated by reference to Exhibit 4.15 to ~~Current~~Quarterly Report on Form 810-KQ for the period ended September 30, 2019 (File No. 000-50478) filed by Nexstar Media Group, Inc. ~~on July 29, 2016~~).
4.5		~~First Supplemental~~ Indenture, dated as of ~~January~~July 173, ~~2017~~2019, bybetween ~~and among~~ Nexstar ~~Broadcasting~~Escrow, Inc., as issuer, ~~the guarantors party thereto,~~ and ~~Wells Fargo Bank~~Citibank, ~~National Association~~N.A., as trustee (Incorporated by reference to Exhibit 4.31 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Media Group, Inc. on ~~January~~July 173, ~~2017~~2019).
4.6		Form of Senior Note (Incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Media Group, Inc. on July 3, 2019).
4.7		First Supplemental Indenture, dated as of September 19, 2019, by and among Nexstar Broadcasting, Inc., as issuer, the guarantors party thereto, and Citibank, N.A. as trustee (Incorporated by reference to Exhibit 4.3 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Media Group, Inc. on September 20, 2019).
4.8		Second Supplemental Indenture, dated as of November 22, 2019, by and among Nexstar Broadcasting, Inc., as issuer, the guarantors party thereto, and Citibank, N.A. as trustee (Incorporated by reference to Exhibit 4.3 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Media Group, Inc. on November 22, 2019).
10.1		Credit Agreement, dated as of January 17, 2017, by and among Mission Broadcasting, Inc., as the borrower, Bank of America, N.A., as the administrative agent and the collateral agent and other financial institutions from time to time party thereto (Incorporated by reference to Exhibit 10.8 to Annual Report on Form 10-K for the period ended December 31, 2016 (File No. 333-62916-02) filed by Mission Broadcasting, Inc.).
10.2		Amendment No. 1, dated as of July 19, 2017, to Credit Agreement, dated as of January 17, 2017, by and among Mission Broadcasting, Inc., Bank of America, N.A. and the several lenders party thereto, ~~as amended by that Amendment No. 1, dated as of July 19, 2017~~ (Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K (File No. 333-62916-02) filed by Mission Broadcasting, Inc. on July 25, 2017).
10.3		Amendment No. 2, dated as of October 26, 2018, to Credit Agreement, dated as of January 17, 2017, by and among Mission Broadcasting, Inc., Bank of America, N.A. and the several lenders party thereto, ~~as amended by that Amendment No. 2, dated as of October 26, 2018~~ (Incorporate by reference to Exhibit 10.1 to Current Report on Form 8-K (File No. 333-62916-02) filed by Mission Broadcasting, Inc. on November 1, 2018).
10.4		Credit Agreement, dated as of January 17, 2017, by and among Nexstar Media Group, Inc., as a holding company, Nexstar Broadcasting, Inc., as the borrower, Bank of America, N.A., as the administrative agent, the collateral agent, a letter of credit issuer and a swing line lender and other financial institutions from time to time party thereto (Incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Media Group, Inc. on January 17, 2017).
10.5		Amendment No. 1, dated as of July 19, 2017, to Credit Agreement, dated as of January 17, 2017, by and among Nexstar Broadcasting, Inc., Nexstar Media Group, Inc., Bank of America, N.A. and the several lenders party thereto, ~~as amended by that Amendment No. 1, dated as of July 19, 2017~~ (Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc. on July 25, 2017).
10.6		Amendment No. 2, dated as of October 26, 2018, to Credit Agreement, dated as of January 17, 2017, by and among Nexstar Broadcasting, Inc., Nexstar Media Group, Inc., Bank of America, N.A. and the several lenders party thereto, ~~as amended by that Amendment No. 2, dated as of October 26, 2018~~ (Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Media Group, Inc. on November 1, 2018).
10.7		Executive Employment Agreement, dated December 19, 2011, by and between Nancie J. Smith and Mission Broadcasting, Inc. (Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K (File No. 333-62916-02) filed by Mission Broadcasting, Inc. on December 23, 2011).
10.8		Amendment to Executive Employment Agreement, dated December 31, 2014, by and between Nancie J. Smith and Mission Broadcasting, Inc. (Incorporated by reference to Exhibit 10.19 to Annual Report on Form 10-K (File No. 333-62916-02) filed by Mission Broadcasting, Inc. on March 30, 2016).
10.9		Amended and Restated Executive Employment Agreement, dated as of July 1, 2017, by and between Nancie J. Smith and Mission Broadcasting, Inc. (Incorporated by reference to Exhibit 10.4 to Quarterly Report on Form 10-Q (File No. 333-62916-02) filed by Mission Broadcasting, Inc. on November 13, 2017).

E-1

Exhibit No.		Exhibit Index
10.10		Executive Employment Agreement, dated December 19, 2011, by and between Dennis Thatcher and Mission Broadcasting, Inc. (Incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K (File No. 333-62916-02) filed by Mission Broadcasting, Inc. on December 23, 2011).
10.7		Amendment No. 3, dated as of September 19, 2019, to Credit Agreement, dated as of January 17, 2017, by and among Nexstar Broadcasting, Inc., Nexstar Media Group, Inc., Bank of America, N.A. and the several lenders party thereto (Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Media Group, Inc. on September 20, 2019).
10.11		Amendment to Executive Employment Agreement, dated December 31, 2014, by and between Dennis Thatcher and Mission Broadcasting, Inc. (Incorporated by reference to Exhibit 10.21 to Annual Report on Form 10-K (File No. 333-62916-02) filed by Mission Broadcasting, Inc. on March 30, 2016).
10.8		Credit Agreement, dated as of January 17, 2017, by and among Marshall Broadcasting Group, Inc., as the borrower and Bank of America, N.A., as the administrative agent and the collateral agent and other financial institutions from time to time party thereto (Incorporated by reference to Exhibit 10.8 to Annual Report on Form 10-K for the year ended December 31, 2017 (File No. 000-50478) filed by Nexstar Media Group, Inc.)
10.12		Amended and Restated Executive Employment Agreement, dated as of July 1, 2017, by and between Dennis Thatcher and Mission Broadcasting, Inc. (Incorporated by reference to Exhibit 10.3 to Quarterly Report on Form 10-Q (File No. 333-62916-02) filed by Mission Broadcasting, Inc. on November 13, 2017).
10.9		Amendment No. 1, dated as of July 19, 2017, to Credit Agreement, dated as of January 17, 2017, by and among Marshall Broadcasting Group, Inc., Bank of America, N.A. and the several lenders party thereto (Incorporated by reference to Exhibit 10.9 to Annual Report on Form 10-K for the year ended December 31, 2017 (File No. 000-50478) filed by Nexstar Media Group, Inc.)
10.13		Stock Option Agreement, dated as of November 29, 2011, by and among Mission Broadcasting, Inc., Nancie J. Smith, Dennis Thatcher and Nexstar Broadcasting, Inc. (Incorporated by reference to Exhibit 10.44 to Annual Report on Form 10-K for the year ended December 31, 2011 (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc.).
10.10		Amendment No. 2, dated as of June 28, 2018, to Credit Agreement, dated as of January 17, 2017, by and among Marshall Broadcasting Group, Inc., Bank of America, N.A. and the several lenders party thereto (Incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-q for the quarter ended June 30, 2018 (File No. 000-50478) filed by Nexstar Media Group, Inc.)
10.14		Option Agreement, dated as of November 30, 1998, among Bastet Broadcasting, Inc., David Smith and Nexstar Broadcasting Group, L.L.C. (WFXP) (Incorporated by reference to Exhibit 10.47 to Amendment No. 2 to Registration Statement on Form S-1 (File No. 333-86994) filed by Nexstar Broadcasting Group, Inc.).
10.11		Executive Employment Agreement, dated December 19, 2011, by and between Nancie J. Smith and Mission Broadcasting, Inc. (Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K (File No. 333-62916-02) filed by Mission Broadcasting, Inc. on December 23, 2011).
10.15		Amendment to Option Agreement, dated as of November 15, 2014, by and between Mission Broadcasting Inc. and Nexstar Broadcasting, Inc. (WFXP) (Incorporated by reference to Exhibit 10.37 to Annual Report on Form 10-K for the year ended December 31, 2014 (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc.).
10.12		Amendment to Executive Employment Agreement, dated December 31, 2014, by and between Nancie J. Smith and Mission Broadcasting, Inc. (Incorporated by reference to Exhibit 10.19 to Annual Report on Form 10-K (File No. 333-62916-02) filed by Mission Broadcasting, Inc. on March 30, 2016).
10.16		Amendment to Option Agreement, dated as of December 17, 2012, by and between Mission Broadcasting Inc. and Nexstar Broadcasting, Inc. (KHMT) (Incorporated by reference to Exhibit 10.66 to Annual Report on Form 10-K for the year ended December 31, 2012 (File No. 333-62916-02) filed by Mission Broadcasting, Inc.).
10.13		Amended and Restated Executive Employment Agreement, dated as of July 1, 2017, by and between Nancie J. Smith and Mission Broadcasting, Inc. (Incorporated by reference to Exhibit 10.4 to Quarterly Report on Form 10-Q (File No. 333-62916-02) filed by Mission Broadcasting, Inc. on November 13, 2017).
10.17		Option Agreement, dated as of June 1, 1999, among Mission Broadcasting of Wichita Falls, Inc., David Smith and Nexstar Broadcasting of Wichita Falls, L.P. (KJTL and KJBO-LP (Incorporated by reference to Exhibit 10.42 to Amendment No. 2 to Registration Statement on Form S-1 (File No. 333-86994) filed by Nexstar Broadcasting Group, Inc.).
10.14		Executive Employment Agreement, dated December 19, 2011, by and between Dennis Thatcher and Mission Broadcasting, Inc. (Incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K (File No. 333-62916-02) filed by Mission Broadcasting, Inc. on December 23, 2011).
10.18		Option Agreement, dated as of May 19, 1998, among Bastet Broadcasting, Inc., David Smith and Nexstar Broadcasting of Northeastern Pennsylvania, L.P. (WYOU) (Incorporated by reference to Exhibit 10.45 to Amendment No. 2 to Registration Statement on Form S-1 (File No. 333-86994) filed by Nexstar Broadcasting Group, Inc.).
10.15		Amendment to Executive Employment Agreement, dated December 31, 2014, by and between Dennis Thatcher and Mission Broadcasting, Inc. (Incorporated by reference to Exhibit 10.21 to Annual Report on Form 10-K (File No. 333-62916-02) filed by Mission Broadcasting, Inc. on March 30, 2016).
10.19		Amendment to Option Agreements, dated as of October 18, 2002, among Mission Broadcasting, Inc., David Smith, Nexstar Broadcasting of Northeastern Pennsylvania, L.L.C., Nexstar Broadcasting Group, L.L.C., Nexstar Broadcasting of Wichita Falls, L.L.C., and Nexstar Broadcasting of Joplin, L.L.C. (WYOU, WFXP, KJTL, KJBO-LP and KODE) (Incorporated by reference to Exhibit 10.54 to Amendment No. 2 to Registration Statement on Form S-1 (File No. 333-86994) filed by Nexstar Broadcasting Group, Inc.).
10.16		Amended and Restated Executive Employment Agreement, dated as of July 1, 2017, by and between Dennis Thatcher and Mission Broadcasting, Inc. (Incorporated by reference to Exhibit 10.3 to Quarterly Report on Form 10-Q (File No. 333-62916-02) filed by Mission Broadcasting, Inc. on November 13, 2017).
10.20		Amendment to Option Agreement, dated as of May 1, 2018, by and between Mission Broadcasting, Inc. and Nexstar Broadcasting, Inc. (WYOU) (Incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 (File No. 333-62916-02) filed by Mission Broadcasting, Inc.).
10.17		Stock Option Agreement, dated as of November 29, 2011, by and among Mission Broadcasting, Inc., Nancie J. Smith, Dennis Thatcher and Nexstar Broadcasting, Inc. (Incorporated by reference to Exhibit 10.44 to Annual Report on Form 10-K for the year ended December 31, 2011 (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc.).
10.21		Amendment to Option Agreement, dated as of May 1, 2018, by and between Mission Broadcasting, Inc. and Nexstar Broadcasting, Inc. (KJTL) (Incorporated by reference to Exhibit 10.3 to Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 (File No. 333-62916-02) filed by Mission Broadcasting, Inc.).
10.18		Option Agreement, dated as of November 30, 1998, among Bastet Broadcasting, Inc., David Smith and Nexstar Broadcasting Group, L.L.C. (WFXP) (Incorporated by reference to Exhibit 10.47 to Amendment No. 2 to Registration Statement on Form S-1 (File No. 333-86994) filed by Nexstar Broadcasting Group, Inc.).
10.22		Option Agreement, dated as of April 1, 2002, by and between Mission Broadcasting of Joplin, Inc. and Nexstar Broadcasting of Joplin, L.L.C. (KODE) (Incorporated by reference to Exhibit 10.50 to Amendment No. 2 to Registration Statement on Form S-1 (File No. 333-86994) filed by Nexstar Broadcasting Group, Inc.).
10.19		Amendment to Option Agreement, dated as of November 15, 2014, by and between Mission Broadcasting Inc. and Nexstar Broadcasting, Inc. (WFXP) (Incorporated by reference to Exhibit 10.37 to Annual Report on Form 10-K for the year ended December 31, 2014 (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc.).
10.23		Amendment to Option Agreement, dated April 25, 2011, by and between Mission Broadcasting, Inc. and Nexstar Broadcasting, Inc. (KODE) (Incorporated by reference to Exhibit 10.26 to Annual Report on Form 10-K for the year ended December 31, 2011 (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc.).
10.20		Amendment to Option Agreement, dated as of December 17, 2012, by and between Mission Broadcasting Inc. and Nexstar Broadcasting, Inc. (KHMT) (Incorporated by reference to Exhibit 10.66 to Annual Report on Form 10-K for the year ended December 31, 2012 (File No. 333-62916-02) filed by Mission Broadcasting, Inc.).
10.24		Option Agreement, dated as of June 13, 2003, among Mission Broadcasting, Inc., David Smith and Nexstar Broadcasting of Abilene, L.L.C. (KRBC) (Incorporated by reference to Exhibit 10.64 to Amendment No. 3 to Registration Statement on Form S-1 (File No. 333-86994) filed by Nexstar Broadcasting Group, Inc.).
10.21		Option Agreement, dated as of June 1, 1999, among Mission Broadcasting of Wichita Falls, Inc., David Smith and Nexstar Broadcasting of Wichita Falls, L.P. (KJTL and KJBO-LP (Incorporated by reference to Exhibit 10.42 to Amendment No. 2 to Registration Statement on Form S-1 (File No. 333-86994) filed by Nexstar Broadcasting Group, Inc.).
10.25		Amendment to Option Agreement, dated as of June 1, 2012, by and between Mission Broadcasting, Inc. and Nexstar Broadcasting, Inc. (KRBC and KSAN) (Incorporated by reference to Exhibit 10.2 to Quarterly Report on Form 10-Q (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc. on August 8, 2012).
10.22		Option Agreement, dated as of May 19, 1998, among Bastet Broadcasting, Inc., David Smith and Nexstar Broadcasting of Northeastern Pennsylvania, L.P. (WYOU) (Incorporated by reference to Exhibit 10.45 to Amendment No. 2 to Registration Statement on Form S-1 (File No. 333-86994) filed by Nexstar Broadcasting Group, Inc.).
10.26		Option Agreement, dated as of May 9, 2003, among Mission Broadcasting, Inc., David Smith and Nexstar Broadcasting of the Midwest, Inc. (WAWV) (Incorporated by reference to Exhibit 10.3 to Quarterly Report on Form 10-Q for the period ended June 30, 2003 (File No. 333-62916-02) filed by Mission Broadcasting, Inc.).
10.23		Amendment to Option Agreements, dated as of October 18, 2002, among Mission Broadcasting, Inc., David Smith, Nexstar Broadcasting of Northeastern Pennsylvania, L.L.C., Nexstar Broadcasting Group, L.L.C., Nexstar Broadcasting of Wichita Falls, L.L.C., and Nexstar Broadcasting of Joplin, L.L.C. (WYOU, WFXP, KJTL, KJBO-LP and KODE) (Incorporated by reference to Exhibit 10.54 to Amendment No. 2 to Registration Statement on Form S-1 (File No. 333-86994) filed by Nexstar Broadcasting Group, Inc.).
10.27		Amendment of Option Agreement, dated as of May 1, 2012, by and between Mission Broadcasting, Inc. and Nexstar Broadcasting, Inc. (WAWV) (Incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc. on August 8, 2012).
10.28		Amendment to Option Agreement, dated October 15, 2013 by and between Mission Broadcasting, Inc. and Nexstar Broadcasting, Inc. (WTVO) (Incorporated by reference to Exhibit 10.54 to Annual Report on Form 10-K for the year ended December 31, 2013 (File No. 333-62916-02) filed by Mission Broadcasting, Inc.).

E-2

Exhibit No.		Exhibit Index
10.29		Amendment to Option Agreement, dated as of December 17, 2012, by and between Mission Broadcasting Inc. and Nexstar Broadcasting, Inc. (KAMC) (Incorporated by reference to Exhibit 10.65 to Annual Report on Form 10-K for the year ended December 31, 2012 (File No. 333-62916-02) filed by Mission Broadcasting, Inc.).
10.24		Amendment to Option Agreement, dated as of May 1, 2018, by and between Mission Broadcasting, Inc. and Nexstar Broadcasting, Inc. (WYOU) (Incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 (File No. 333-62916-02) filed by Mission Broadcasting, Inc.).
10.30		Amendment to Option Agreement, dated as of December 17, 2012, by and between Mission Broadcasting Inc. and Nexstar Broadcasting, Inc. (KOLR) (Incorporated by reference to Exhibit 10.67 to Annual Report on Form 10-K for the year ended December 31, 2012 (File No. 333-62916-02) filed by Mission Broadcasting, Inc.).
10.25		Amendment to Option Agreement, dated as of May 1, 2018, by and between Mission Broadcasting, Inc. and Nexstar Broadcasting, Inc. (KJTL) (Incorporated by reference to Exhibit 10.3 to Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 (File No. 333-62916-02) filed by Mission Broadcasting, Inc.).
10.31		Option Agreement, dated as of November 1, 2013, among Mission Broadcasting, Inc., Nancie Smith, Dennis Thatcher and Nexstar Broadcasting, Inc. (WTVW) (Incorporated by reference to Exhibit 10.4 to Quarterly Report on Form 10-Q for the period ended September 30, 2013 (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc.).
10.26		Option Agreement, dated as of April 1, 2002, by and between Mission Broadcasting of Joplin, Inc. and Nexstar Broadcasting of Joplin, L.L.C. (KODE) (Incorporated by reference to Exhibit 10.50 to Amendment No. 2 to Registration Statement on Form S-1 (File No. 333-86994) filed by Nexstar Broadcasting Group, Inc.).
10.32		Option Agreement, dated as of January 1, 2013, among Mission Broadcasting Inc., Nancie Smith, Dennis Thatcher and Nexstar Broadcasting, Inc. (KLRT-TV - KASN) (Incorporated by reference to Exhibit 10.87 to Annual Report on Form 10-K for the year ended December 31, 2012 (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc.).
10.27		Amendment to Option Agreement, dated April 25, 2011, by and between Mission Broadcasting, Inc. and Nexstar Broadcasting, Inc. (KODE) (Incorporated by reference to Exhibit 10.26 to Annual Report on Form 10-K for the year ended December 31, 2011 (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc.).
10.33		Option Agreement, dated as of March 1, 2013, among Mission Broadcasting Inc., Nancie Smith, Dennis Thatcher and Nexstar Broadcasting, Inc. (WVNY) (Incorporated by reference to Exhibit 10.90 to Annual Report on Form 10-K for the year ended December 31, 2012 (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc.).
10.28		Option Agreement, dated as of June 13, 2003, among Mission Broadcasting, Inc., David Smith and Nexstar Broadcasting of Abilene, L.L.C. (KRBC) (Incorporated by reference to Exhibit 10.64 to Amendment No. 3 to Registration Statement on Form S-1 (File No. 333-86994) filed by Nexstar Broadcasting Group, Inc.).
10.34		Amendment to Option Agreement, dated as of January 15, 2017, among Mission Broadcasting Inc. and Nexstar Broadcasting , Inc. (KTVE) (Incorporated by reference to Exhibit 10.76 to Annual Report on Form 10-K for the year ended December 31, 2012 (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc.).
10.29		Amendment to Option Agreement, dated as of June 1, 2012, by and between Mission Broadcasting, Inc. and Nexstar Broadcasting, Inc. (KRBC and KSAN) (Incorporated by reference to Exhibit 10.2 to Quarterly Report on Form 10-Q (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc. on August 8, 2012).
10.35		Amendment to Option Agreement, dated as of May 1, 2018, by and between Mission Broadcasting, Inc. and Nexstar Broadcasting, Inc. (KCIT) (Incorporated by reference to Exhibit 10.2 to Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 (File No. 333-62916-02) filed by Mission Broadcasting, Inc.).
10.30		Option Agreement, dated as of May 9, 2003, among Mission Broadcasting, Inc., David Smith and Nexstar Broadcasting of the Midwest, Inc. (WAWV) (Incorporated by reference to Exhibit 10.3 to Quarterly Report on Form 10-Q for the period ended June 30, 2003 (File No. 333-62916-02) filed by Mission Broadcasting, Inc.).
10.36		Time Brokerage Agreement, dated as of April 1, 1996, by and between SJL Communications, L.P. and NV Acquisitions Co. (WFXP - WJET) (Incorporated by reference to Exhibit 10.48 to Amendment No. 2 to Registration Statement on Form S-1 (File No. 333-86994) filed by Nexstar Broadcasting Group, Inc.).
10.31		Amendment of Option Agreement, dated as of May 1, 2012, by and between Mission Broadcasting, Inc. and Nexstar Broadcasting, Inc. (WAWV) (Incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc. on August 8, 2012).
10.37		Amendment to Time Brokerage Agreement, dated as of July 31, 1998, between SJL Communications, L.P. and NV Acquisitions Co. (WFXP - WJET) (Incorporated by reference to Exhibit 10.49 to Amendment No. 2 to Registration Statement on Form S-1 (File No. 333-86994) filed by Nexstar Broadcasting Group, Inc.).
10.32		Amendment to Option Agreement, dated October 15, 2013 by and between Mission Broadcasting, Inc. and Nexstar Broadcasting, Inc. (WTVO) (Incorporated by reference to Exhibit 10.54 to Annual Report on Form 10-K for the year ended December 31, 2013 (File No. 333-62916-02) filed by Mission Broadcasting, Inc.).
10.38		Amendment to Time Brokerage Agreement, dated as of July 17, 2006, between Nexstar Broadcasting, Inc. and Mission Broadcasting, Inc. (WFXP - WJET) (Incorporated by reference to Exhibit 10.21 to Annual Report on Form 10-K for the year ended December 31, 2011 (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc.).
10.33		Amendment to Option Agreement, dated as of December 17, 2012, by and between Mission Broadcasting Inc. and Nexstar Broadcasting, Inc. (KAMC) (Incorporated by reference to Exhibit 10.65 to Annual Report on Form 10-K for the year ended December 31, 2012 (File No. 333-62916-02) filed by Mission Broadcasting, Inc.).
10.39		Letter, notifying Mission Broadcasting, Inc. of the election to extend Time Brokerage Agreement (WFXP - WJET) (Incorporated by reference to Exhibit 10.22 to Annual Report on Form 10-K for the year ended December 31, 2011 (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc.).
10.34		Amendment to Option Agreement, dated as of December 17, 2012, by and between Mission Broadcasting Inc. and Nexstar Broadcasting, Inc. (KOLR) (Incorporated by reference to Exhibit 10.67 to Annual Report on Form 10-K for the year ended December 31, 2012 (File No. 333-62916-02) filed by Mission Broadcasting, Inc.).
10.40		Second amendment to Time Brokerage Agreement, dated as of August 2, 2016, between Nexstar Broadcasting, Inc. and Mission Broadcasting, Inc. (WFXP - WJET). (Incorporated by reference to Exhibit 10.16 to Quarterly Report on Form 10-Q for the period ended March 31, 2016 (File No. 333-62916-02) filed by Mission Broadcasting, Inc.)
10.35		Option Agreement, dated as of November 1, 2013, among Mission Broadcasting, Inc., Nancie Smith, Dennis Thatcher and Nexstar Broadcasting, Inc. (WTVW) (Incorporated by reference to Exhibit 10.4 to Quarterly Report on Form 10-Q for the period ended September 30, 2013 (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc.).
10.41		Shared Services Agreement entered into as of July 1, 2017 by and between Mission Broadcasting, Inc. and Nexstar Broadcasting, Inc. (Incorporated by reference to Exhibit 10.77 to Annual Report on Form 10-K for the year ended December 31, 2017 (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc.).
10.36		Option Agreement, dated as of January 1, 2013, among Mission Broadcasting Inc., Nancie Smith, Dennis Thatcher and Nexstar Broadcasting, Inc. (KLRT-TV - KASN) (Incorporated by reference to Exhibit 10.87 to Annual Report on Form 10-K for the year ended December 31, 2012 (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc.).
10.42		Agreement for the Sale of Commercial Time, dated as of June 1, 1999, among Mission Broadcasting of Wichita Falls, Inc., David Smith and Nexstar Broadcasting of Wichita Falls, L.P. (KJTL and KJBO-LP - KFDX) (Incorporated by reference to Exhibit 10.44 to Amendment No. 2 to Registration Statement on Form S-1 (File No. 333-86994) filed by Nexstar Broadcasting Group, Inc.)
10.37		Option Agreement, dated as of March 1, 2013, among Mission Broadcasting Inc., Nancie Smith, Dennis Thatcher and Nexstar Broadcasting, Inc. (WVNY) (Incorporated by reference to Exhibit 10.90 to Annual Report on Form 10-K for the year ended December 31, 2012 (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc.).
10.43		Amendment to Agreement for Sale of Commercial Time, dated January 1, 2004, by and between Nexstar Broadcasting, Inc. (as successor to Nexstar Broadcasting of Wichita Falls, L.P.) and Mission Broadcasting, Inc. (f/k/a Mission Broadcasting of Wichita Falls, Inc.) (KJTL and KJBO - KFDX). (Incorporated by reference to Exhibit 10.101 to Amendment No. 1 to Registration Statement on Form S-4 (File No. 333-114963) filed by Nexstar Broadcasting, Inc.)
10.38		Amendment to Option Agreement, dated as of January 15, 2017, among Mission Broadcasting Inc. and Nexstar Broadcasting , Inc. (KTVE) (Incorporated by reference to Exhibit 10.76 to Annual Report on Form 10-K for the year ended December 31, 2012 (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc.).
10.44		Letter dated September 15, 2014, notifying Mission Broadcasting, Inc. of the election to extend the Agreement for the Sale of Commercial Time (WYOU) (Incorporated by reference to Exhibit 10.2 to Quarterly Report on Form 10-Q for the period ended September 30, 2014 (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc.)
10.39		Amendment to Option Agreement, dated as of May 1, 2018, by and between Mission Broadcasting, Inc. and Nexstar Broadcasting, Inc. (KCIT) (Incorporated by reference to Exhibit 10.2 to Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 (File No. 333-62916-02) filed by Mission Broadcasting, Inc.).
10.45		Letter dated September 15, 2014, notifying Mission Broadcasting, Inc. of the election to extend the Agreement for the Sale of Commercial Time (KODE) (Incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q for the period ended September 30, 2014 (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc.)
10.40		Time Brokerage Agreement, dated as of April 1, 1996, by and between SJL Communications, L.P. and NV Acquisitions Co. (WFXP - WJET) (Incorporated by reference to Exhibit 10.48 to Amendment No. 2 to Registration Statement on Form S-1 (File No. 333-86994) filed by Nexstar Broadcasting Group, Inc.).
10.46		Letter, extending Shared Services Agreement and Sale of Commercial Time, dated as of June 1, 2013, by and between Mission Broadcasting, Inc. and Nexstar Broadcasting, Inc. (KRBC) (Incorporated by reference to Exhibit 10.7 to Quarterly Report on Form 10-Q for the period ended June 30, 2013 (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc.)
10.41		Amendment to Time Brokerage Agreement, dated as of July 31, 1998, between SJL Communications, L.P. and NV Acquisitions Co. (WFXP - WJET) (Incorporated by reference to Exhibit 10.49 to Amendment No. 2 to Registration Statement on Form S-1 (File No. 333-86994) filed by Nexstar Broadcasting Group, Inc.).
10.42		Amendment to Time Brokerage Agreement, dated as of July 17, 2006, between Nexstar Broadcasting, Inc. and Mission Broadcasting, Inc. (WFXP - WJET) (Incorporated by reference to Exhibit 10.21 to Annual Report on Form 10-K for the year ended December 31, 2011 (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc.).

E-3

Exhibit No.		Exhibit Index
10.47		Letter dated May 28, 2014, notifying Mission Broadcasting, Inc. of the election to extend Shared Services Agreement and Agreement for the Sale of Commercial Time (KSAN) (Incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q for the period ended June 30, 2014 (File No. 333-62916-02) filed by Mission Broadcasting, Inc.)
10.43		Letter, notifying Mission Broadcasting, Inc. of the election to extend Time Brokerage Agreement (WFXP - WJET) (Incorporated by reference to Exhibit 10.22 to Annual Report on Form 10-K for the year ended December 31, 2011 (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc.).
10.48		Agreement for the Sale of Commercial Time, dated as of May 9, 2003, by and between Mission Broadcasting, Inc. and Nexstar Broadcasting of the Midwest, Inc. (WAWV - WTWO) (Incorporated by reference to Exhibit 10.2 to Quarterly Report on Form 10-Q for the period ended June 30, 2003 (File No. 333-62916-02) filed by Mission Broadcasting, Inc.)
10.44		Second amendment to Time Brokerage Agreement, dated as of August 2, 2016, between Nexstar Broadcasting, Inc. and Mission Broadcasting, Inc. (WFXP - WJET). (Incorporated by reference to Exhibit 10.16 to Quarterly Report on Form 10-Q for the period ended March 31, 2016 (File No. 333-62916-02) filed by Mission Broadcasting, Inc.)
10.49		Amendment to Agreement for Sale of Commercial Time, dated January 13, 2004, by and between Nexstar Broadcasting, Inc. and Mission Broadcasting, Inc. (WAWV-WTWO). (Incorporated by reference to Exhibit 10.97 to Amendment No. 1 to Registration Statement on Form S-4 (File No. 333-114963) filed by Nexstar Broadcasting, Inc.)
10.45		Shared Services Agreement entered into as of July 1, 2017 by and between Mission Broadcasting, Inc. and Nexstar Broadcasting, Inc. (Incorporated by reference to Exhibit 10.77 to Annual Report on Form 10-K for the year ended December 31, 2017 (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc.).
10.50		Extension of the Agreement for the Sale of Commercial Time, dated as of May 1, 2013, by and between Mission Broadcasting, Inc. and Nexstar Broadcasting, Inc. (WAWV-TV) (Incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q for the period ended March 31, 2013 (File No. 333-62916-02) filed by Mission Broadcasting, Inc.)
10.46		Agreement for the Sale of Commercial Time, dated as of June 1, 1999, among Mission Broadcasting of Wichita Falls, Inc., David Smith and Nexstar Broadcasting of Wichita Falls, L.P. (KJTL and KJBO-LP - KFDX) (Incorporated by reference to Exhibit 10.44 to Amendment No. 2 to Registration Statement on Form S-1 (File No. 333-86994) filed by Nexstar Broadcasting Group, Inc.)
10.51		Letter dated October 15, 2014, notifying Mission Broadcasting, Inc. of the election to extend Shared Services Agreement and Agreement for the Sale of Commercial Time (WTVO) (Incorporated by reference to Exhibit 10.3 to Quarterly Report on Form 10-Q for the period ended September 30, 2014 (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc.)
10.47		Amendment to Agreement for Sale of Commercial Time, dated January 1, 2004, by and between Nexstar Broadcasting, Inc. (as successor to Nexstar Broadcasting of Wichita Falls, L.P.) and Mission Broadcasting, Inc. (f/k/a Mission Broadcasting of Wichita Falls, Inc.) (KJTL and KJBO - KFDX). (Incorporated by reference to Exhibit 10.101 to Amendment No. 1 to Registration Statement on Form S-4 (File No. 333-114963) filed by Nexstar Broadcasting, Inc.)
10.52		Amendment to Agreement for Sale of Commercial Time, dated January 1, 2004, by and between Nexstar Broadcasting, Inc. and Mission Broadcasting, Inc. (KCIT-KAMR). (Incorporated by reference to Exhibit 10.95 to Amendment No. 1 to Registration Statement on Form S-4 (File No. 333-114963) filed by Nexstar Broadcasting, Inc.)
10.48		Amendment to Agreement for Sale of Commercial Time, dated May 31, 2019, by and between Nexstar Broadcasting, Inc. (as successor to Nexstar Broadcasting of Wichita Falls, L.P.) and Mission Broadcasting, Inc. (f/k/a Mission Broadcasting of Wichita Falls, Inc.) (KJTL and KJBO-KFDX). (Incorporated by reference to Exhibit 10.3 to Quarterly Report on Form 10-Q for the period ended June 30, 2019 (File No. 000-50478) filed by Nexstar Media Group, Inc.)
10.53		Amendment to Agreement for Sale of Commercial Time, dated December 30, 2003, by and between Nexstar Broadcasting, Inc. and Mission Broadcasting, Inc. (KAMC-KLBK). (Incorporated by reference to Exhibit 10.91 to Amendment No. 1 to Registration Statement on Form S-4 (File No. 333-114963) filed by Nexstar Broadcasting, Inc.)
10.49		Letter dated September 15, 2014, notifying Mission Broadcasting, Inc. of the election to extend the Agreement for the Sale of Commercial Time (WYOU) (Incorporated by reference to Exhibit 10.2 to Quarterly Report on Form 10-Q for the period ended September 30, 2014 (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc.)
10.54		Amendment to Agreement for Sale of Commercial Time, dated February 14, 2019, by and between Nexstar Broadcasting, Inc. and Mission Broadcasting, Inc. (KAMC-KLBK).*
10.50		Letter dated September 15, 2014, notifying Mission Broadcasting, Inc. of the election to extend the Agreement for the Sale of Commercial Time (KODE) (Incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q for the period ended September 30, 2014 (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc.)
10.55		Amendment to Agreement for Sale of Commercial Time, dated December 30, 2003, by and between Nexstar Broadcasting, Inc. and Mission Broadcasting, Inc. (KOLR-KOZL). (Incorporated by reference to Exhibit 10.93 to Amendment No. 1 to Registration Statement on Form S-4 (File No. 333-114963) filed by Nexstar Broadcasting, Inc.)
10.51		Letter, extending Shared Services Agreement and Sale of Commercial Time, dated as of June 1, 2013, by and between Mission Broadcasting, Inc. and Nexstar Broadcasting, Inc. (KRBC) (Incorporated by reference to Exhibit 10.7 to Quarterly Report on Form 10-Q for the period ended June 30, 2013 (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc.)
10.56		Amendment to Agreement for Sale of Commercial Time, dated February 14, 2019, by and between Nexstar Broadcasting, Inc. and Mission Broadcasting, Inc. (KOLR-KOZL).*
10.52		Letter dated May 28, 2014, notifying Mission Broadcasting, Inc. of the election to extend Shared Services Agreement and Agreement for the Sale of Commercial Time (KSAN) (Incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q for the period ended June 30, 2014 (File No. 333-62916-02) filed by Mission Broadcasting, Inc.)
10.57		Agreement for Sale of Commercial Time, dated April 1, 2004, by and between Nexstar Broadcasting, Inc. and Mission Broadcasting, Inc. (WUTR-WFXV). (Incorporated by reference to Exhibit 10.99 to Amendment No. 1 to Registration Statement on Form S-4 (File No. 333-114963) filed by Nexstar Broadcasting, Inc.)
10.53		Agreement for the Sale of Commercial Time, dated as of May 9, 2003, by and between Mission Broadcasting, Inc. and Nexstar Broadcasting of the Midwest, Inc. (WAWV - WTWO) (Incorporated by reference to Exhibit 10.2 to Quarterly Report on Form 10-Q for the period ended June 30, 2003 (File No. 333-62916-02) filed by Mission Broadcasting, Inc.)
10.58		Letter dated March 25, 2014, notifying Mission Broadcasting, Inc. of the election to extend Shared Services Agreement and Agreement for the Sale of Commercial Time (WUTR) (Incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q for the period ended March 31, 2014 (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc.)
10.54		Amendment to Agreement for Sale of Commercial Time, dated January 13, 2004, by and between Nexstar Broadcasting, Inc. and Mission Broadcasting, Inc. (WAWV-WTWO). (Incorporated by reference to Exhibit 10.97 to Amendment No. 1 to Registration Statement on Form S-4 (File No. 333-114963) filed by Nexstar Broadcasting, Inc.)
10.59		Agreement for the Sale of Commercial Time, dated December 1, 2011, by and between Mission Broadcasting, Inc. and Nexstar Broadcasting, Inc. (WEHT-WTVW) (Incorporated by reference to Exhibit 10.46 to Annual Report on Form 10-K for the year ended December 31, 2011 (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc.)
10.55		Extension of the Agreement for the Sale of Commercial Time, dated as of May 1, 2013, by and between Mission Broadcasting, Inc. and Nexstar Broadcasting, Inc. (WAWV-TV) (Incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q for the period ended March 31, 2013 (File No. 333-62916-02) filed by Mission Broadcasting, Inc.)
10.60		Agreement for the Sale of Commercial Time, dated as of January 1, 2013, by and between Mission Broadcasting, Inc. and Nexstar Broadcasting, Inc. (KLRT-TV - KASN) (Incorporated by reference to Exhibit 10.85 to Annual Report on Form 10-K for the year ended December 31, 2012 (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc.)
10.56		Letter dated October 15, 2014, notifying Mission Broadcasting, Inc. of the election to extend Shared Services Agreement and Agreement for the Sale of Commercial Time (WTVO) (Incorporated by reference to Exhibit 10.3 to Quarterly Report on Form 10-Q for the period ended September 30, 2014 (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc.)
10.61		Agreement for the Sale of Commercial Time, dated as of March 1, 2013, by and between Mission Broadcasting, Inc. and Nexstar Broadcasting, Inc. (WVNY) (Incorporated by reference to Exhibit 10.88 to Annual Report on Form 10-K for the year ended December 31, 2012 (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc.)
10.57		Amendment to Agreement for Sale of Commercial Time, dated January 1, 2004, by and between Nexstar Broadcasting, Inc. and Mission Broadcasting, Inc. (KCIT-KAMR). (Incorporated by reference to Exhibit 10.95 to Amendment No. 1 to Registration Statement on Form S-4 (File No. 333-114963) filed by Nexstar Broadcasting, Inc.)
10.62		Agreement for the Sale of Commercial Time, dated as of January 15, 2018, by and between Mission Broadcasting, Inc. and Nexstar Broadcasting, Inc. (KTVE-TV) (Incorporated by reference to Exhibit 10.56 to Annual Report on Form 10-K for the year ended December 31, 2017 (File No. 333-62916-02) filed by Mission Broadcasting, Inc.).
10.58		Amendment to Agreement for Sale of Commercial Time, dated April 30, 2019, by and between Nexstar Broadcasting, Inc. and Mission Broadcasting, Inc. (KCIT-KAMR). (Incorporated by reference to Exhibit 10.4 to Quarterly Report on Form 10-Q for the period ended June 30, 2019 (File No. 000-50478) filed by Nexstar Media Group, Inc.)
14.1		Mission Broadcasting, Inc. Code of Ethics. (Incorporated by reference to Exhibit 14.1 to Annual Report on Form 10-K for the year ended December 31, 2003 (File No. 333-62916-02) filed by Mission Broadcasting, Inc.).
10.59		Amendment to Agreement for Sale of Commercial Time, dated December 30, 2003, by and between Nexstar Broadcasting, Inc. and Mission Broadcasting, Inc. (KAMC-KLBK). (Incorporated by reference to Exhibit 10.91 to Amendment No. 1 to Registration Statement on Form S-4 (File No. 333-114963) filed by Nexstar Broadcasting, Inc.)
23.1		Consent of PricewaterhouseCoopers LLP.*
10.60		Amendment to Agreement for Sale of Commercial Time, dated February 14, 2019, by and between Nexstar Broadcasting, Inc. and Mission Broadcasting, Inc. (KAMC-KLBK).*
31.1		Certification of Dennis Thatcher pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1		Certification of Dennis Thatcher pursuant to 18 U.S.C. ss. 1350.*
101		The Company’s Financial Statements and related Notes for the year ended December 31, 2018 from this Annual Report on Form 10-K, formatted in iXBRL (Inline eXtensible Business Reporting Language).*

* Filed herewith

E-4

Exhibit No.		Exhibit Index

10.61		Amendment to Agreement for Sale of Commercial Time, dated December 30, 2003, by and between Nexstar Broadcasting, Inc. and Mission Broadcasting, Inc. (KOLR-KOZL). (Incorporated by reference to Exhibit 10.93 to Amendment No. 1 to Registration Statement on Form S-4 (File No. 333-114963) filed by Nexstar Broadcasting, Inc.)
10.62		Amendment to Agreement for Sale of Commercial Time, dated February 14, 2019, by and between Nexstar Broadcasting, Inc. and Mission Broadcasting, Inc. (KOLR-KOZL).*
10.63		Agreement for Sale of Commercial Time, dated April 1, 2004, by and between Nexstar Broadcasting, Inc. and Mission Broadcasting, Inc. (WUTR-WFXV). (Incorporated by reference to Exhibit 10.99 to Amendment No. 1 to Registration Statement on Form S-4 (File No. 333-114963) filed by Nexstar Broadcasting, Inc.)
10.64		Letter dated March 25, 2014, notifying Mission Broadcasting, Inc. of the election to extend Shared Services Agreement and Agreement for the Sale of Commercial Time (WUTR) (Incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q for the period ended March 31, 2014 (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc.)
10.65		Agreement for the Sale of Commercial Time, dated December 1, 2011, by and between Mission Broadcasting, Inc. and Nexstar Broadcasting, Inc. (WEHT-WTVW) (Incorporated by reference to Exhibit 10.46 to Annual Report on Form 10-K for the year ended December 31, 2011 (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc.)
10.66		Agreement for the Sale of Commercial Time, dated as of January 1, 2013, by and between Mission Broadcasting, Inc. and Nexstar Broadcasting, Inc. (KLRT-TV - KASN) (Incorporated by reference to Exhibit 10.85 to Annual Report on Form 10-K for the year ended December 31, 2012 (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc.)
10.67		Agreement for the Sale of Commercial Time, dated as of March 1, 2013, by and between Mission Broadcasting, Inc. and Nexstar Broadcasting, Inc. (WVNY) (Incorporated by reference to Exhibit 10.88 to Annual Report on Form 10-K for the year ended December 31, 2012 (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc.)
10.68		Agreement for the Sale of Commercial Time, dated as of January 15, 2018, by and between Mission Broadcasting, Inc. and Nexstar Broadcasting, Inc. (KTVE-TV) (Incorporated by reference to Exhibit 10.56 to Annual Report on Form 10-K for the year ended December 31, 2017 (File No. 333-62916-02) filed by Mission Broadcasting, Inc.).
10.69		Amendment to November 29, 2011 Stock Option Agreement by and between Mission Broadcasting, Inc., Dennis Thatcher, Nancie J. Smith, and Nexstar Broadcasting, Inc.*
14.1		Mission Broadcasting, Inc. Code of Ethics. (Incorporated by reference to Exhibit 14.1 to Annual Report on Form 10-K for the year ended December 31, 2003 (File No. 333-62916-02) filed by Mission Broadcasting, Inc.).
23.1		Consent of PricewaterhouseCoopers LLP.*
31.1		Certification of Dennis Thatcher pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1		Certification of Dennis Thatcher pursuant to 18 U.S.C. ss. 1350.*
101.INS		Inline XBRL Instance Document.*
101.SCH		Inline XBRL Taxonomy Extension Schema Document.*
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.*
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.*
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document.*
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.*
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).*

*	Filed herewith

E-5

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.

	By:	/s/ Dennis Thatcher
		Dennis Thatcher
		President and Treasurer
		(Principal Executive Officer and Principal Financial and Accounting Officer)

Dated: March 2227, ~~2019~~2020

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities indicated on March 2227, ~~2019~~2020.

/s/ Nancie J. Smith
Nancie J. Smith
Chairman of the Board
/s/ Dennis Thatcher
Dennis Thatcher
President, Treasurer and Director (Principal Executive Officer and Principal Financial and Principal Accounting Officer)

MISSION BROADCASTING, INC.

INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm		F-2
Balance Sheets as of December 31, 2018 and 2017		F-3
Balance Sheets as of December 31, 2019 and 2018		F-3
Statements of Operations for the years ended December 31, 2018, 2017 and 2016		F-4
Statements of Operations for the years ended December 31, 2019, 2018 and 2017		F-4
Statements of Changes in Shareholders’ Deficit for the years ended December 31, 2018, 2017 and 2016		F-5
Statements of Changes in Shareholders’ Deficit for the years ended December 31, 2019, 2018 and 2017		F-5
Statements of Cash Flows for the years ended December 31, 2018, 2017 and 2016		F-6
Statements of Cash Flows for the years ended December 31, 2019, 2018 and 2017		F-6
Notes to Financial Statements		F-7
Note 1: Organization and Business Operations		F-7
Note 2: Summary of Significant Accounting Policies		F-7
Note 3: Local Service Agreements with Nexstar		F-15
Note 4: Property and Equipment		F-16
Note 5: Intangible Assets and Goodwill		F-16
Note 6: Accrued Expenses and Other Current Liabilities		F-17
Note 7: Debt		F-17
Note 8: Leases		F-19
Note 9: Revenue		F-20
Note 10: Common Stock		F-20
Note 11: Income Taxes		F-21
Note 12: FCC Regulatory Matters		F-22
Note 13: Commitments and Contingencies		F-25
Note 14: Employee Benefits		F-26

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Mission Broadcasting, Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Mission Broadcasting, Inc. (the “Company”) as of December 31, ~~2018~~2019 and December 31, ~~2017~~2018, and the related statement of operations, statement of changes in stockholder’s deficit, and statement of cash flows for each of the three years in the period ended December 31, ~~2018~~2019, including the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, ~~2018~~2019 and December 31, ~~2017~~2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, ~~2018~~2019 in conformity with accounting principles generally accepted in the United States of America.

Change in Accounting Principle

As discussed in Note 2 to the financial statements, the Company changed the manner in which it accounts for ~~revenues~~leases ~~from contracts with customers~~ in ~~2018~~2019.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these financial statements in accordance with the auditing standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

Dallas, Texas

March 2227, ~~2019~~2020

We have served as the Company's auditor since 1998.

F-2

MISSION BROADCASTING, INC.

BALANCE SHEETS

(in thousands, except share information)

	December 31,
	2018			2017
	2019			2018
ASSETS
Current assets:
Cash and cash equivalents	$	108,~~798~~686		$	910,~~524~~798
Accounts receivable, net of allowance for doubtful accounts of $222 and $128, respectively		12,857			14,717
Accounts receivable, net of allowance for doubtful accounts of $235 and $222, respectively		15,069			12,857
Due from Nexstar Broadcasting, Inc.		7715,~~521~~232			9277,~~920~~521
Prepaid expenses and other current assets		~~1,130~~632			21,~~070~~130
Total current assets		~~102~~39,~~306~~619			~~119~~102,~~231~~306
Property and equipment, net		1922,~~867~~722			1819,~~454~~867
Goodwill		33,187			33,187
FCC licenses		43,102			43,102
Other intangible assets, net		13,712			15,841
Network affiliation agreements, net		11,301			13,095
Deferred tax assets, net		3,485			1,508
Other intangible assets, net		491			617
Other noncurrent assets, net		936			1,137
Deferred tax assets, net		-			3,485
Total assets	$	216,595		$	232,460
Investment in loan receivable		48,876			-
LIABILITIES AND SHAREHOLDERS' DEFICIT
Other noncurrent assets, net		6,381			936
Total assets	$	205,679		$	216,595
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current liabilities:
Current portion of debt	$	2,285		$	2,~~314~~285
Current portion of broadcast rights payable		325			986
Accounts payable		3,144			1,832
Accounts payable		1,832			1,090
Deferred rent		-			721
Accrued expenses		1,992			10,851
Operating lease liabilities		2,009			-
Accrued capital expenditures		1,251			-
Interest payable		771			152
Interest payable		152			771
Accrued capital expenditures		577			1,251
Deferred rent		721			702
Accrued expenses and other current liabilities		3,544			2,317
Total current liabilities		812,~~558~~330			168,~~714~~558
Debt		~~222~~220,~~354~~780			~~223~~222,~~428~~354
Other noncurrent liabilities		6,820			7,626
Deferred tax liabilities, net		12,565			-
Total liabilities		237,732			247,768
Other noncurrent liabilities		9,804			6,820
Commitments and contingencies (Note 12)
Total liabilities		255,479			237,732
Commitments and contingencies (Note 13)
Shareholders' deficit:
Common stock - $1 par value, 1,000 shares authorized, issued and outstanding as of each of December 31, 2018 and December 31, 2017		1			1
Common stock - $1 par value, 1,000 shares authorized, issued and outstanding as of each of December 31, 2019 and 2018		1			1
Subscription receivable		(1	)		(1	)
Accumulated deficit		(2149,~~137~~800	)		(1521,~~308~~137	)
Total shareholders' deficit		(21,137	)		(15,308	)
Total shareholders’ deficit		(49,800	)		(21,137	)
Total liabilities and shareholders' deficit	$	216,595		$	232,460
Total liabilities and shareholders’ deficit	$	205,679		$	216,595

The accompanying Notes are an integral part of these Financial Statements.

F-3

MISSION BROADCASTING, INC.

STATEMENTS OF OPERATIONS

(in thousands)

	~~Years Ended December 31,~~	Years Ended December 31,
	2018				2017				2016
		2019				2018				2017
Net broadcast revenue	$	~~69,227~~$	77,591		$	~~70,592~~$	69,227		$	~~61,402~~$	70,592
Revenue from Nexstar Broadcasting, Inc.		~~39,997~~	34,652			~~36,546~~	39,997			~~42,791~~	36,546
Net revenue		~~109,224~~	112,243			~~107,138~~	109,224			~~104,193~~	107,138
Operating expenses (income):
Direct operating expenses, excluding depreciation and amortization		~~40,861~~	48,736			~~35,802~~	40,861			~~30,201~~	35,802
Selling, general and administrative expenses, excluding depreciation and amortization		~~4,965~~	4,475			~~4,153~~	4,965			~~3,549~~	4,153
Fees incurred pursuant to local service agreements with Nexstar Broadcasting, Inc.		~~55,650~~	61,215			~~35,500~~	55,650			~~18,000~~	35,500
Amortization of broadcast rights		~~1,584~~	1,493			~~5,645~~	1,584			~~5,567~~	5,645
Amortization of intangible assets		~~2,129~~	1,919			~~2,392~~	2,129			~~2,422~~	2,392
Depreciation		~~3,171~~	2,586			~~2,342~~	3,171			~~2,400~~	2,342
Reimbursement from the FCC related to station repack		~~(2,818~~	)(5,663	)		-	(2,818	)		-	-
Total operating expenses		~~105,542~~	114,761			~~85,834~~	105,542			~~62,139~~	85,834
Income from operations		3,682				21,304				42,054
(Loss) income from operations			(2,518	)			3,682				21,304
Interest expense		~~(11,101~~	)(10,841	)		~~(10,135~~	)(11,101	)		~~(10,251~~	)(10,135	)
Loss on extinguishment of debt		~~(452~~	)-			~~(2,133~~	)(452	)		-	(2,133	)
(Loss) income before income taxes		~~(7,871~~	)(13,359	)		~~9,036~~	(7,871	)		~~31,803~~	9,036
Income tax benefit (expense)		2,042				(3,400	)			(12,337	)
Income tax (expense) benefit			(15,304	)			2,042				(3,400	)
Net (loss) income	$	~~(5,829~~$	)(28,663	)	$	~~5,636~~$	(5,829	)	$	~~19,466~~$	5,636

The accompanying Notes are an integral part of these Financial Statements.

F-4

MISSION BROADCASTING, INC.

STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT

For the Three Years Ended December 31, ~~2018~~2019

(in thousands, except share information)

											Total
	Common Stock				Subscription			Accumulated			Shareholders'’
	Shares		Amount		Receivable			Deficit			Deficit
Balances as of December 31, 2015		1,000		1		(1	)		(40,410	)		(40,410	)
Balances as of December 31, 2016		1,000	$	1	$	(1	)	$	(20,944	)	$	(20,944	)
Net income		-		-		-			19,466			19,466
Balances as of December 31, 2016		1,000		1		(1	)		(20,944	)		(20,944	)
Net income		-		-		-			5,636			5,636
Balances as of December 31, 2017		1,000		1		(1	)		(15,308	)		(15,308	)
Net loss		-		-		-			(5,829	)		(5,829	)
Balances as of December 31, 2018		1,000		1		(1	)		(21,137	)		(21,137	)
Net loss		-		-		-			(28,663	)		(28,663	)
Balances as of December 31, 2019		1,000	$	1	$	(1	)	$	(49,800	)	$	(49,800	)

The accompanying Notes are an integral part of these Financial Statements.

F-5

MISSION BROADCASTING, INC.

STATEMENTS OF CASH FLOWS

(in thousands)

	Years Ended December 31,
	2018			2017			2016
	2019			2018			2017
Cash flows from operating activities:
Net (loss) income	$	(528,~~829~~663	)	$	(5,~~636~~829	)	$	195,~~466~~636
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Deferred income tax (benefit) expense		(116,~~977~~046	)		4(1,~~451~~977	)		114,~~032~~451
Provision for bad debt		97130			8697			-86
Depreciation of property and equipment		32,~~171~~586			23,~~342~~171			2,~~400~~342
Amortization of intangible assets		21,~~129~~919			2,~~392~~129			2,~~422~~392
Amortization of debt financing costs and debt discount		~~764~~721			~~750~~764			~~566~~750
Amortization of broadcast rights, excluding barter		1,584			1,619			1,596
Amortization of broadcast rights		1,493			1,584			1,619
Payments for broadcast rights		(1,~~591~~495	)		(1,~~632~~591	)		(1,~~685~~632	)
Loss on asset disposal		43			754			~~168~~75
Deferred gain recognition		(198	)		(198	)		(198	)
Loss on extinguishment of debt		-			452			2,133
Loss on extinguishment of debt		452			2,133			-
Deferred gain recognition		(660	)		(198	)		(198	)
Spectrum repack reimbursements		(2,818	)		-			-
Spectrum repack reimbursements from the FCC		(5,663	)		(2,818	)		-
Changes in operating assets and liabilities, net of acquisitions:
Changes in operating assets and liabilities:
Accounts receivable		1(2,~~763~~342	)		(21,~~469~~763	)		(2,~~962~~469	)
Prepaid expenses and other current assets		~~282~~408			~~(818~~282	)		6(818	)
Other noncurrent assets		8(306	)		(78	)		(117	)
Accounts payable, accrued expenses and deferred rent		(8,030	)		4,255			1,804
Accounts payable, accrued expenses and other current liabilities		3,171			(8,030	)		4,255
Other noncurrent liabilities		~~(400~~-	)		(~~1,819~~400	)		(~~395~~1,819	)
Due from Nexstar Broadcasting, Inc.		1513,~~399~~279			~~(12~~15,~~100~~399	)		(2812,~~837~~100	)
Net cash provided by operating activities		~~4,810~~627			4,~~696~~810			54,~~372~~696
Cash flows from investing activities:
Purchases of property and equipment		(46,~~044~~117	)		(~~700~~4,044	)		(~~241~~700	)
Spectrum repack reimbursements		2,818			-			-
Spectrum repack reimbursements from the FCC		5,663			2,818			-
Payment for acquisition		-			(800	)		-
Investment in a loan receivable		(48,876	)		-			-
Proceeds from disposals of property and equipment		-			100			-
Payment for acquisition		-			-			(800	)
Net cash used in investing activities		(1,226	)		(1,400	)		(241	)
Proceeds from disposals of property and equipment		-			-			100
Net cash used in investing activities		(49,330	)		(1,226	)		(1,400	)
Cash flows from financing activities:
Proceeds from issuance of long-term debt		-			230,609			-
Proceeds from the issuance of long term debt		-			-			230,609
Repayments of long-term debt		(2,310	)		(227,051	)		(2,335	)
Inter-company payments		48,876			-			-
Payments for debt financing costs		-			(3,804	)		(683	)
Repayments of long-term debt		(2,285	)		(2,310	)		(227,051	)
Net cash used in financing activities		(2,310	)		(246	)		(3,018	)
Payments for debt financing costs		-			-			(3,804	)
Net increase in cash and cash equivalents		1,274			3,050			2,113
Net cash provided by (used in) financing activities		46,591			(2,310	)		(246	)
Cash and cash equivalents at beginning of period		9,524			6,474			4,361
Net (decrease) increase in cash and cash equivalents		(2,112	)		1,274			3,050
Cash and cash equivalents at end of period	$	10,798		$	9,524		$	6,474
Cash and cash equivalents at beginning of period		10,798			9,524			6,474
Non-cash investing activities:
Cash and cash equivalents at end of period	$	8,686		$	10,798		$	9,524
Accrued purchases of property and equipment	$	1,251		$	707		$	-
Supplemental information:
Interest paid	$	109,~~953~~505		$	910,~~639~~953		$	89,~~685~~639
Income taxes paid, net of refunds	$	221		$	1,101		$	1,307
Income tax (refunded) paid, net	$	(1,147	)	$	221		$	1,101
Non-cash investing and financing activities
Accrued purchases of property and equipment	$	577		$	1,251		$	707
Right-of-use assets obtained in exchange for operating lease obligations (1)	$	6,450		$	-		$	-

The accompanying Notes are an integral part of these Financial Statements.

(1) The entire amount represents transition adjustment for the adoption of ASC 842.

F-6

MISSION BROADCASTING, INC.

NOTES TO FINANCIAL STATEMENTS

Note 1. : Organization and Business Operations

~~As of December 31, 2018,~~ Mission Broadcasting, Inc. (“Mission” or the “Company”), a Delaware corporation, is a television broadcasting focused on the acquisition, development and operation of television stations and interactive community websites in medium-sized markets in the United States. As of December 31, 2019, Mission owned and operated 19 full power television stations, affiliated with ABC, FOX, NBC, CBS, The CW, ~~MNTV~~ and other broadcast television networks, in 18 markets located in the states of Arkansas, Colorado, Illinois, Indiana, Louisiana, Missouri, Montana, New York, Pennsylvania, Texas and Vermont. The Company operates in one reportable television broadcasting segment. Through local service agreements, Nexstar Broadcasting, Inc., a subsidiary of Nexstar Media Group, Inc. (collectively “Nexstar”), provides sales and operating services to all of the Mission television stations (see Notes 2 and 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. Management believes that with Nexstar’s pledge to continue the local service agreements as described in a letter of support dated March 2227, ~~2019~~2020, the Company’s available cash, anticipated cash flow from operations and available borrowings under its senior secured credit facility should be sufficient to fund working capital, capital expenditure requirements, interest payments and scheduled debt principal payments for at least the next twelve months from March 2227, ~~2019~~2020, enabling Mission to continue to operate as a going concern.

Nexstar’s senior secured credit agreement contains a covenant which requires Nexstar to comply with a maximum consolidated first lien net leverage ratio of 4.25 to 1.00. The financial covenant, which is formally calculated on a quarterly basis, is based on the combined results of Nexstar and its variable interest entities, including Mission. Mission’s credit agreement does not contain financial covenant ratio requirements but does provide for default in the event Nexstar does not comply with all covenants contained in its credit agreement. As of December 31, ~~2018~~2019, Nexstar has informed Mission that it was in compliance with all covenants contained in its credit agreement and the indentures governing its senior unsecured notes.

2On November 29, 2019, Nexstar assigned its guarantee obligation of Marshall Broadcasting Group, Inc. ~~Summary~~’s (“Marshall”) credit agreement to Mission. As a result of ~~Significant~~the ~~Accounting~~assignment, ~~Policies~~Mission became the guarantor of Marshall’s debt and Nexstar is no longer a guarantor. Subsequent to the assignment of guarantee, Nexstar made a partial payment of Mission’s outstanding receivable from Nexstar amounting to $50.0 million to facilitate Mission’s funding of the guarantee. The payment of Nexstar to Mission was included in the “Due from Nexstar Broadcasting, Inc.” in the accompanying Balance Sheets.

On November 29, 2019, Marshall defaulted on the payment of principal and interest and other payments due to its third-party bank lenders. Following the default, Mission paid the outstanding principal balances of Marshall’s Term Loan A and revolving credit facility of $43.2 million and $5.6 million, respectively, plus accrued and unpaid interest using the cash received from Nexstar. After making the payment, Mission became Marshall’s new lender under the same Marshall credit agreement. Mission recognized a loan receivable from Marshall totaling $48.9 million which is presented as “Investment in loan receivable” in the accompanying Balance Sheets as a result of these transactions. In December 2019, Marshall filed a voluntary petition for Chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of Texas. Marshall may not be able to make its principal or interest payments to Mission under the credit agreement when due or at all. Marshall’s failure to satisfy its debt obligations to Mission may have an adverse effect on the Company’s business and results of operations. The Company believes its loan receivable from Marshall is collectible. Mission will continue to evaluate future developments on Marshall’s bankruptcy process.

Note 2: Summary of Significant Accounting Policies

Local Service Agreements and Purchase Options

The following table summarizes the various local service agreements Mission’s stations had in effect as of December 31, ~~2018~~2019 with Nexstar:

Service Agreements		Stations
TBA Only(1)		WFXP, KHMT and KFQX
SSA & JSA(2)		KJTL, KLRT, KASN, KOLR, KCIT, KAMC, KRBC, KSAN, WUTR, WAWV, WYOU, KODE, WTVO, KTVE, WTVW and WVNY

Service Agreements		Full Power Stations
TBA Only		WFXP, KHMT and KFQX
SSA & JSA		KJTL, KLRT, KASN, KOLR, KCIT, KAMC, KRBC, KSAN, WUTR, WAWV, WYOU, KODE, WTVO, KTVE, WTVW and WVNY

(1)

Mission has 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 Mission, based on the station’s monthly operating expenses.

F-7

(2)

Mission has both a shared services agreement (“SSA”) and a joint sales agreement (“JSA”) for each of these stations. Each SSA allows the Nexstar station in the market to provide services including news production, technical maintenance and security, in exchange for Nexstar’s right to receive certain payments from Mission as described in the SSAs. Each JSA permits Nexstar to sell certain of the station’s advertising time and retain a percentage of the related revenue, as described in the JSAs.

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 local service agreements generally have terms of eight to ten years. Nexstar indemnifies Mission from Nexstar’s activities pursuant to the local service agreements. In compliance with Federal Communications Commission (“FCC”) regulations for both Nexstar and Mission, Mission maintains complete responsibility for and control over programming, finances, personnel and operation of its stations.

Under the local service agreements, Nexstar has received substantially all of Mission’s available cash, after satisfaction of operating costs and debt obligations. Mission anticipates that Nexstar will continue to receive substantially all of Mission’s available cash, after satisfaction of operating costs and debt obligations.

F-7

Mission has granted Nexstar purchase options to acquire the assets and assume the liabilities of each Mission station, subject to FCC consent, for consideration equal to the greater of (1) seven times the station’s cash flow, as defined in the option agreement, less the amount of its indebtedness as defined in the option agreement, or (2) the amount of its indebtedness. Cash flow is defined as income or loss from operations, plus depreciation and amortization (including amortization of broadcast rights), interest income, nonrecurring expenses (including time brokerage agreement fees), network compensation payments received or receivable and corporate management fees, less payments for broadcast rights, and network compensation revenue. Additionally, on November 29, 2011, Mission’s shareholders granted Nexstar an option to purchase any or all of the Company’s common stock, subject to FCC consent, for a price equal to the pro rata portion of the greater of (1) five times the Mission stations’ cash flow, as defined in the agreement, reduced by the amount of indebtedness, as defined in the agreement, or (2) $100,000. These option agreements (which expire on various dates between 2021 and 2028) are freely exercisable or assignable by Nexstar without consent or approval by Mission or its shareholders. The Company expects these option agreements to be renewed upon expiration.

Nexstar is deemed under accounting principles generally accepted in the United States of America (“U.S. GAAP”) to have a controlling financial interest in Mission as a variable interest entity for financial reporting purposes as a result of (1) the local service agreements Nexstar has with the Mission stations, (2) Nexstar’s guarantee of the obligations incurred under Mission’s senior secured credit facility (see Note 7), (3) Nexstar having power over significant activities affecting Mission’s economic performance, including budgeting for advertising revenue, advertising and hiring and firing of sales force personnel and (4) the purchase options Mission has granted to Nexstar. Nexstar consolidates the financial accounts of Mission into its financial results.

Characterization of SSA Fees

The Company presents the fees incurred pursuant to SSAs with Nexstar as an operating expense in the Company’s Statements of Operations. The Company’s decision to characterize the SSA fees in this manner is based on management’s conclusion that (1) the benefit the Company’s stations receive from the SSAs is sufficiently separate from the consideration paid to the Company from Nexstar under JSAs, (2) management can reasonably estimate the fair value of the benefit our stations receive under the SSAs, and (3) the SSA fees the Company pays to Nexstar do not exceed the estimated fair value of the benefits the Company’s stations receive.

Basis of Presentation

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

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and use assumptions that affect the reported amounts of assets and liabilities and the disclosure for contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The more significant estimates made by management include those relating to the allowance for doubtful accounts, valuation of assets acquired and liabilities assumed in business combinations, ~~retransmission~~distribution revenue recognized, income taxes, the recoverability of goodwill, FCC licenses and other long-lived assets, the recoverability of broadcast rights and the useful lives of property and equipment and intangible assets. Actual results may vary from such estimates recorded.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of 90 days or less to be cash equivalents.

F-8

Accounts Receivable and Allowance for Doubtful Accounts

The Company’s accounts receivable consist primarily of billings to cable and satellite carriers for compensation associated with retransmission consent agreements. The Company maintains an allowance for doubtful accounts when necessary for estimated losses resulting from the inability of customers to make required payments. Management evaluates the collectability of accounts receivable based on a combination of factors, including customer payment history, known customer circumstances, the overall aging of customer balances and trends. In circumstances where management is aware of a specific customer’s inability to meet its financial obligations, an allowance is recorded to reduce the receivable amount to an amount estimated to be collectable.

Concentration of Credit Risk

Financial instruments which potentially expose the Company to a concentration of credit risk consist principally of cash and cash equivalents and accounts receivable. Cash deposits are maintained with several financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits; however, the Company believes these deposits are maintained with financial institutions of reputable credit and are not subject to any unusual credit risk. A significant portion of the Company’s accounts receivable is due from cable or satellite operators. The Company does not require collateral from its customers but maintains reserves for potential credit losses. Management believes that the allowance for doubtful accounts is adequate, but if the financial condition of the Company’s retransmission carriers were to deteriorate, additional allowances may be required. The Company has not experienced significant losses related to receivables from individual customers or by geographical area.

F-8

Revenue Recognition

AsThe ~~discussed in Recent Accounting Pronouncements below, the~~ Company adopted the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASC 606”) and all related amendments effective January 1, 2018 using the modified retrospective method as applied to customer contracts that were not completed as of January 1, 2018. ASC 606 establishes a comprehensive new revenue recognition model designed to depict the transfer of goods or services to a customer in an amount that reflects the consideration the entity expects to be entitled to receive in exchange for those goods or services and requires significantly enhanced revenue disclosures. ~~The Company adopted this standard effective January 1, 2018 using the modified retrospective method as applied to customer contracts that were not completed as of January 1, 2018.~~ As a result, financial information for reporting periods beginning on or after January 1, 2018 is presented under ASC 606, while comparative financial information has not been adjusted and continues to be reported in accordance with the Company’s historical accounting policy for revenue recognition prior to the adoption of ASC 606.

The Company’s revenue is primarily derived from the sale of advertising by Nexstar under JSAs, and the compensation received from multichannel video programming distributors (“MVPDs”) and ~~over-the-top~~online video distributors (“~~OTTDs~~OVDs”) in its markets in return for the Company’s consent to the retransmission of the signals of its television stations. Total revenue includes revenue from Nexstar, ~~retransmission~~distribution ~~compensation~~revenue, and other broadcast related revenues. The Company’s contracts with customers may include multiple performance obligations. For such arrangements, the Company allocates revenue to each performance obligation based on its relative standalone selling price, which is generally determined based on the price charged to customers. The Company also determines whether gross or net presentation is appropriate based on its relationship in the applicable transaction with its ultimate customer. Any amounts paid by customers but not earned as of the balance sheet date are recorded as a contract liability (deferred revenue). ~~The~~Adjustments ~~lag~~associated ~~between~~with ~~billing~~ the ~~customers~~resolution ~~and~~of ~~when~~such ~~the~~estimates ~~payment~~have, ishistorically, ~~due~~been ~~is not significant~~inconsequential.

Revenue from Nexstar is directly correlated to the advertising revenue earned at the Company’s stations and is recognized, for the amount the Company is entitled to receive, when the television advertising spots are sold by Nexstar and the advertisements are broadcast on Mission stations or delivered on Mission’s television station websites. Television advertising contracts are short-term in nature and include a number of spots that are delivered over the term of the arrangement. The performance obligation for the broadcast of commercials (local, national and political advertising) is identified at the contract level as it represents a station’s promise to deliver an agreed number of spots, an agreed price per spot and other specifications. Each performance obligation is satisfied over time as the advertiser receives and consumes benefits when a station airs the advertiser’s commercial.

The Company’s retransmission consent agreements with MVPDs and ~~OTTDs~~OVDs generally have a three-year term and provide revenue based on a monthly amount the Company is entitled to receive per subscriber. Under ASC 606, these revenues are considered arising from the licensing of functional intellectual property. As such, the Company applied the exception for sales- or usage-based royalty for the accounting of variable consideration and recognizes revenues (~~retransmission~~distribution ~~compensation~~revenue) at the point in time the broadcast signal is delivered to the distributors. The distributors report their subscriber numbers to the Company on a 30- to 60-day lag, which coincides with their payment of the fees due to the Company. Prior to receiving the report from the MVPDs, the Company records revenue based on estimated subscribers and the monthly amount the Company is entitled to receive per subscriber. The impact of the lag in the number of subscribers is not significant.

~~The~~Effective ~~above~~on January 1, 2018, the Company no longer recognizes barter revenue ~~recognition~~(and ~~policies~~the ~~are~~related ~~consistent~~barter ~~with~~expense) resulting from the ~~Company’s~~exchange ~~historical~~of ~~accounting~~advertising ~~policies~~time ~~prior~~for tocertain program material. During the ~~adoption~~year ofended ~~ASC~~December ~~606~~31, 2017, barter revenue (and the related barter expense) was $4.0 million.

Effective on January 1, 2018, the Company no longer recognizes barter revenue (and the related barter expense) resulting from the exchange of advertising time for certain program material. During the years ended December 31, 2017 and 2016, barter revenue (and the related barter expense) was $4.0 million for each year. The barter expense was included in amortization of broadcast rights in the accompanying Condensed Statement of Operations. As of December 31, 2017, the current barter assets (and the related current barter liabilities) were $0.6 million, and the noncurrent barter assets (and the related noncurrent barter liabilities) were $0.5 million. On January 1, 2018, the Company recorded an adjustment to remove the offsetting balances of barter assets and barter liabilities.

Under the Company’s historical accounting policy prior to the adoption of ASC 606, barter revenue (and the related barter expense) would have been $3.8 million during the year ended December 31, 2018. In addition, the current barter assets (and the related current barter liabilities) would have been $0.4 million, and the noncurrent barter assets (and the related noncurrent barter liabilities) would have been $0.2 million as of December 31, 2018.

The Company elected to utilize the practical expedient around costs incurred to obtain contracts due to their short-term nature. Additionally, the incremental benefit from efforts in acquiring these contracts is considered not significant. Thus, the Company continued to expense sales commissions when incurred.

F-9

The Company ~~did~~elected ~~not~~to ~~disclose~~utilize the ~~value~~practical ofexpedient ~~unsatisfied~~around ~~performance~~costs ~~obligations~~incurred onto ~~its~~obtain contracts ~~with~~due ~~customers~~to ~~because~~their ~~they are either (i) contracts with an original expected~~ short-term ofnature. ~~one year or less~~Additionally, ~~or (ii) contracts for which~~ the ~~sales-~~incremental orbenefit ~~usage-based~~from ~~royalty~~efforts ~~exception~~in ~~was~~acquiring ~~applied,~~these ~~or (iii)~~ contracts ~~for which revenue~~ is ~~recognized~~considered innot ~~proportion~~significant. toThus, the ~~amount the~~ Company ~~has~~continued ~~the right~~ to ~~invoice~~expense ~~for~~sales ~~services~~commissions ~~performed~~when incurred.

~~See~~The ~~Note~~Company 7did ~~for~~not ~~additional~~disclose ~~disclosures~~the onvalue ~~revenue~~of ~~from~~unsatisfied performance obligations on its contracts with customers because they are either (i) contracts with an original expected term of one year or less, (ii) contracts for which the sales- or usage-based royalty exception was applied, or (iii) contracts for which revenue is recognized in proportion to the amount the Company has the right to invoice for services performed.

See Note 9 for additional disclosures on revenue from contracts with customers.

Leases

As discussed in the “Recent Accounting Pronouncements” Section below, the Company adopted ASU No. 2016-02, Leases (Topic 842) and all related amendments issued by the FASB. Accounting Standards Codification (“ASC”) 842 establishes a comprehensive new lease accounting model that requires the recording of assets and liabilities arising from operating leases on the balance sheet accompanied by enhanced qualitative and quantitative disclosures in the notes to the financial statements. The standard was issued to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flow arising from leases.

The Company adopted this standard effective January 1, 2019 using the optional transition method. The most significant impact was the recognition of right-of-use (“ROU”) assets and lease liabilities for operating leases. Financial information for reporting periods beginning after January 1, 2019 is presented under ASC 842, while comparative financial information has not been adjusted and continues to be reported in accordance with the Company’s historical accounting policy for lease contracts prior to the adoption of ASC 842.

The Company has elected the “package of practical expedients” permitted under the transition guidance within ASC 842, which permits the Company to carry forward the historical lease classification and not reassess whether any expired or existing contracts are or contain leases. In addition, the Company is not required to reassess initial direct costs for any existing leases. The Company did not elect the land easements and the use of hindsight practical expedients in determining the lease term for existing leases. ASC 842 also provides practical expedients for an entity’s ongoing accounting. The Company has elected the short-term lease recognition exemption for all leases that qualify. As a result, for those leases with a term of less than 12 months, it will not recognize ROU assets or lease liabilities. The vast majority of the Company’s television station leases are comprised of fixed lease payments, with a small percentage of television station lease payments that are tied to a rate or index which may be subject to variability. For these leases, the calculation of the present value of future minimum lease payments is the base rate as of the later of (i) when the television station was acquired by the Company, or (ii) the commencement date of the lease agreement. Certain real estate leases also include executory costs such as common area maintenance (non-lease component), as well as property insurance and property taxes (non-components). These are not significant and the Company historically excluded these executory costs from its future minimum lease payments under its historical policy prior to the adoption of ASC 842. As such, the executory costs were excluded from the calculation of ROU assets and lease liabilities associated with operating leases upon transition. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that it will exercise that option. The discount rate represents a risk-adjusted rate on a secured basis, and is the rate at which the Company would borrow funds to satisfy the scheduled lease liability payment streams commensurate with the lease term. On January 1, 2019, the discount rate used on existing leases at adoption was determined based on the remaining lease term using available data as of that date.

The Company recognized operating lease ROU assets on its Balance Sheet as of January 1, 2019 of $6.5 million, inclusive of the present value of remaining future operating lease payments of $11.0 million and reclassifications of certain operating lease related assets and liabilities under the Company’s historical accounting policy prior to the adoption of ASC 842 such as deferred rent, short-term prepaid expenses and other accruals. These are summarized in the table below (in thousands). The adoption did not result in a cumulative impact on retained earnings as of January 1, 2019.

F-10

			ASC 842 Adoption Adjustments
			Present Value of Remaining		Reclassifications of Operating Lease Related Balance Sheet Items to Operating Lease Right-of-Use Assets
Impact on Balance Sheets	December 31, 2018		Operating Lease Payments as of January 1, 2019		Deferred Rent			Other			Total			January 1, 2019
Prepaid expenses and other current assets	$	1,130	$	-	$	-		$	(77	)	$	(77	)	$	1,053
Other noncurrent assets, net		936		10,957		(4,175	)		(332	)		6,450			7,386
Total Assets		216,595		10,957		(4,175	)		(409	)		6,373			222,968
Other current liabilities		8,558		1,802		(531	)		(198	)		1,073			9,631
Other noncurrent liabilities		6,820		9,155		(3,644	)		(211	)		5,300			12,120
Total Liabilities		237,732		10,957		(4,175	)		(409	)		6,373			244,105

After transition to ASC 842, the Company determines if an arrangement is a lease at inception. The ROU assets arising from operating leases are included in other noncurrent assets, current operating lease liabilities and other noncurrent liabilities in the accompanying Balance Sheets. Operating lease ROU assets and operating lease liabilities that are recognized after the adoption of ASC 842 are based on the present value of the future minimum lease payments over the lease term at the commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and executory costs (not significant). The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. When determining if a renewal option is reasonably certain of being exercised, the Company considers several factors, including but not limited to the significance of leasehold improvements incurred on the property, whether the asset is difficult to replace, or specific characteristics unique to the particular lease that would make it reasonably certain that the Company would exercise such option. In most cases, the Company has concluded that renewal and early termination options are not reasonably certain of being exercised by the Company (and thus not included in its ROU asset and lease liability) unless there is an economic, financial or business reason to do so. As most of the Company’s leases do not provide an implicit rate, the incremental borrowing rate was used based on the information available at the commencement date in determining the present value of future lease payments. The discount rate represents a risk-adjusted rate on a secured basis and is the rate at which the Company would borrow funds to satisfy the scheduled lease liability payment streams commensurate with the lease term. For new or renewed leases starting in 2019, the discount rate is determined using available data at lease commencement and based on the lease term including any reasonably certain renewal periods. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

In rare circumstances, the Company may enter into finance leases for specific equipment or real estate used in its operations, in which the lease term is for the major part of the remaining economic life of the underlying asset or the present value of the lease payments equals or exceeds substantially all of the estimated fair value of the underlying asset. The Company will record its finance leases within property, plant and equipment, other current liabilities and other noncurrent liabilities on the accompanying Balance Sheets.

See Note 8 for additional disclosures on leases as of December 31, 2019.

Broadcast Rights and Broadcast Rights Payable

The Company records broadcast rights contracts as an asset and a liability when the following criteria are met: (1) the license period has begun, (2) the cost of each program is known or reasonably determinable, (3) the program material has been accepted in accordance with the license agreement, and (4) the program is produced and available for broadcast. Cash broadcast rights are initially recorded at the contract cost and are amortized on a straight-line basis over the period the programming airs. The current portion of cash broadcast rights represents those rights available for broadcast which will be amortized in the succeeding year. The Company periodically evaluates the net realizable value, calculated using the average historical advertising rates for the programs or the time periods the programming will air, of cash broadcast rights and adjusts amortization in that quarter for any deficiency calculated.

Effective on January 1, 2018, the Company no longer recognizes barter broadcast rights and barter broadcast rights payable resulting from the exchange of advertising time for certain program material. See Revenue Recognition policy above for additional information.

Property and Equipment, Net

Property and equipment is stated at cost or estimated fair value atif ~~the~~acquired ~~date of acquisition~~ through a business combination. The cost and related accumulated depreciation applicable to assets sold or retired are removed from the accounts and the gain or loss on disposition is recognized. Major renewals and betterments are capitalized, and ordinary repairs and maintenance are charged to expense in the period incurred. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets (see Note 5).

F-11

Intangible Assets, Net

Intangible assets consist primarily of goodwill, FCC licenses, network affiliation agreements and customer relationships arising from acquisitions. The Company accounts for acquired businesses using the acquisition method of accounting, which requires that purchase prices, including any contingent consideration, are measured at acquisition date fair values. These purchase prices are allocated to the assets acquired and liabilities assumed at estimated fair values at the date of acquisition using various valuation techniques, including discounted projected cash flows, the cost approach and the income approach. The estimated fair value ~~estimates~~of ~~are~~an FCC license is calculated using a discounted cash flow model referred to as the Greenfield Method. The Greenfield Method attempts to isolate the income that is attributable to the license alone. This approach is based onupon modeling a hypothetical start-up station and building it up to a normalized operation that, by design, lacks an affiliation with a network (commonly known as an independent station), lacks inherent goodwill and whose other assets have essentially been added as part of the build-up process. The Greenfield Method assumes annual cash flows over a projection period model. Inputs to this model include, but are not limited to, ~~expected~~(i) ~~future~~a four-year build-up period for a start-up station to reach a normalized state of operations, (ii) market long-term growth rate over a projection period, (iii) estimated market revenue share for a typical market participant without a network affiliation, (iv) estimated profit margins based on industry data, (v) capital expenditures based on the size of market and ~~cash~~the ~~flows~~type of station being constructed, ~~expected~~(vi) ~~future~~estimated ~~growth~~tax rates in the appropriate jurisdiction, and (vii) an estimated discount ~~rates~~rate using a weighted average cost of capital analysis. The Greenfield Method also includes an estimated terminal value by discounting an estimated annual cash flow with an estimated long-term growth rate. The assumptions used in estimating the fair value of a network affiliation agreement are similar to those used in the valuation of an FCC license. The Greenfield Method is also utilized in the valuation of network affiliation agreements except that the estimated market revenue share, estimated profit margins, capital expenditures and other assumptions reflect a market participant premium based on the programming of a network affiliate relative to an independent station. This approach would result in an estimated fair value of the collective FCC license and a network affiliation agreement. The excess of the estimated fair value in this model over the estimated value of an FCC license of an independent station under the Greenfield Method represents the estimated fair value of a network affiliation agreement. The excess of the purchase price over the fair value of identifiable net assets acquired is recorded as goodwill. During the measurement period, which may be up to one year from the acquisition date, the Company records adjustments related to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired and liabilities assumed, whichever comes first, any subsequent adjustments are recognized in the Company’s Statements of Operations.

The Company’s goodwill and FCC licenses are considered to be indefinite-lived intangible assets and are not amortized but are tested for impairment annually in the Company’s fourth quarter or whenever events or changes in circumstances indicate that such assets might be impaired. The use of an indefinite life for FCC licenses contemplates the Company’s historical ability to renew its licenses and that such renewals generally may be obtained indefinitely and at little cost. Therefore, cash flows derived from the FCC licenses are expected to continue indefinitely. Network affiliation agreements are subject to amortization computed on a straight-line basis over the estimated useful life of 15 years. The 15 -year life assumes affiliation contracts will be renewed upon expiration. Changes in the likelihood of renewal could require a change in the useful life of such assets and cause an acceleration of amortization. The Company evaluates the remaining lives of its network affiliations whenever changes occur in the likelihood of affiliation contract renewals, and at least on an annual basis.

The Company aggregates its television stations into a single broadcast business reporting unit for purposes of goodwill impairment tests because of ~~their~~the stations’ similar economic characteristics. The Company’s impairment review for FCC licenses is performed at the television station market level.

F-10

The Company first assesses the qualitative factors to determine the likelihood of the goodwill and FCC licenses being impaired. The qualitative analysis includes, but is not limited to, assessing the changes in macroeconomic conditions, regulatory environment, industry and market conditions, and the financial performance versus budget of the reporting units, as well as any other events or circumstances specific to the reporting units or the FCC licenses. If it is more likely than not that the fair value of a reporting unit’s goodwill or a station’s FCC license is greater than its carrying amount, no further testing will be required. Otherwise, the Company will apply the quantitative impairment test method.

The quantitative impairment test for goodwill is performed by comparing the fair value of a reporting unit with its carrying amount. If the fair value of the reporting unit exceeds its carrying value, goodwill is not impaired and no further testing is required. If the fair value of the reporting unit is less than the carrying value, an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The quantitative impairment test for FCC licenses consists of a market-by-market comparison of the carrying amounts of FCC licenses with their fair value, using athe Greenfield Method of discounted cash flow analysis. An impairment is recorded when the carrying value of an FCC license exceeds its fair value.

Determining the fair value of reporting units and FCC licenses requires management to make a number of judgments about assumptions and estimates that are highly subjective and that are based on unobservable inputs. The actual results may differ from these assumptions and estimates, and it is possible that such differences could have a material impact on the Company’s Financial Statements. In addition to the various inputs (i.e., market growth, operating profit margins, discount rates) used to calculate the fair value of FCC licenses and reporting units, the Company evaluates the reasonableness of its assumptions by comparing the fair values of its reporting units and FCC licenses to recent market television station sale transactions. F-12

Debt Financing Costs

Debt financing costs represent direct costs incurred to obtain long-term financing and are amortized to interest expense over the term of the related debt using the effective interest method. Previously capitalized debt financing costs are expensed and included in loss on extinguishment of debt if the Company determines that there has been a substantial modification of the related debt. As of December 31, ~~2018~~2019 and ~~2017~~2018, debt financing costs related to the term loan of $3.92 million and $53.19 million, respectively, were presented as a direct deduction from the carrying amount of debt. ~~Debt financing costs related to the revolving credit facility of $0.1 million at each of December 31, 2018 and 2017 were included in other noncurrent assets.~~

Comprehensive Income

Comprehensive income includes net income and certain items that are excluded from net income and recorded as a separate component of shareholders’ deficit. During the years ended December 31, ~~2018~~2019, ~~2017~~2018 and ~~2016~~2017, the Company had no items of other comprehensive income and, therefore, comprehensive income does not differ from reported net income.

Financial Instruments

The Company utilizes the following categories to classify the valuation methodologies for fair values of financial assets and liabilities:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability;

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

The carrying amount of cash and cash equivalents, accounts receivable, broadcast rights payable, accounts payable and accrued expenses approximates fair value due to their short-term nature. See Note 7 for fair value disclosures related to the Company’s debt.

F-11

Income Taxes

The Company accounts for income taxes under the asset and liability method which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and tax basis of assets and liabilities. A valuation allowance is applied against net deferred tax assets if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities. The determination is based on the technical merits of the position and presumes that each uncertain tax position will be examined by the relevant taxing authority that has full knowledge of all relevant information. The Company recognizes interest and penalties relating to income taxes within income tax expense.

F-13

Recent Accounting Pronouncements

New Accounting Standards Adopted

In ~~May~~February ~~2014~~2016, the FASB issued ASU No. ~~2014~~2016-0902, ~~Revenue~~Leases ~~from Contracts with Customers~~ (Topic ~~606~~842). The Company adopted this standard and all related amendments effective January 1, ~~2018~~2019 using the ~~modified~~optional ~~retrospective~~transition method. asThe ~~applied~~standard tohad ~~customer~~a ~~contracts~~material ~~that~~impact ~~were~~on ~~not~~the ~~completed~~Company’s asBalance ofSheets ~~January~~but 1did not impact its operating results, ~~2018~~cash flows or equity. ~~Upon~~The ~~adoption~~most ofsignificant ~~this~~impact ~~standard,~~was the ~~cumulative~~recognition ~~adjustment~~of toROU ~~the~~assets ~~Company’s~~and ~~accumulated~~lease ~~deficit~~liabilities asfor ofoperating ~~January~~leases. 1,The ~~2018~~adoption ~~for~~did ~~the~~not ~~cumulative~~result ~~effect~~in ofa ~~initially~~cumulative ~~applying~~impact ~~the~~on ~~new~~retained ~~standard~~earnings isas ~~not~~of ~~material~~January 1, 2019. See ~~Revenue~~Leases ~~Recognition~~ above for the Company’s updated accounting policy and Note 8 for expanded disclosures.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force) (“ASU 2016-15”). The amendments in ASU 2016-15 address eight specific cash flow issues and apply to all entities that are required to present a statement of cash flows under FASB Accounting Standards Codification 230, Statement of Cash Flows. The amendments in ASU 2016-15 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. The Company has applied the change in accounting as of January 1, 2018. The adoption of ASU 2016-15 did not impact the Company's Financial Statements.

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”). ASU 2017-01 provides clarification on the definition of a business and adds guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. To be considered a business under the new guidance, it must include an input and a substantive process that together significantly contribute to the ability to create output. The amendment removes the evaluation of whether a market participant could replace missing elements. The amendments in this update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, and will be applied prospectively. The Company has applied this change in accounting as of January 1, 2018. The adoption of ASU 2017-01 did not impact the Company's Financial Statements.

In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract (“ASU 2018-15”). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The amendments in this Update are effective for interim and annual reporting periods beginning after December 15, 2019, and early adoption is permitted. The Company has applied the change in accounting as of January 1, 2018. The adoption of this ASU did not have a significant impact on the Company's Consolidated Financial Statements.

In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders' equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders' equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. This final rule is effective on November 5, 2018. The Company has applied the new SEC disclosure requirements in its financial statements on a retrospective basis.

F-12

New Accounting Standards Not Yet Adopted

In ~~February~~December ~~2016~~2019, the FASB issued ASU ~~No. 2016~~2019-0212, ~~Leases~~which ~~(Topic~~is ~~842)~~intended ~~(“ASU~~to ~~2016-02”).~~simplify ~~Under~~various ~~this~~aspects ~~guidance,~~related ~~lessees are required~~ to ~~recognize~~accounting onfor ~~the~~income ~~balance~~taxes. ~~sheet~~ASU ~~a right~~2019-~~of-use~~12 ~~asset~~removes ~~and~~certain aexceptions ~~lease~~to ~~liability~~the ~~arising~~general ~~from~~principles ~~operating~~in ~~leases~~Topic ~~except~~740 ~~for~~and ~~short-term contracts with original terms of twelve months or less. The new guidance~~ also ~~requires~~clarifies ~~enhanced qualitative~~ and ~~quantitative~~amends ~~disclosures~~existing inguidance ~~the notes~~ to ~~the~~improve ~~financial~~consistent ~~statements and is expected to provide transparency of information and comparability among organizations~~application. ASU ~~2016~~2019-0212 ~~and~~will ~~related~~be ~~amendments is~~ effective for interim and annual ~~reporting~~ periods beginning after December 15, ~~2018,~~2020 ~~with early adoption permitted. The Company will adopt ASU 2016–02 as of~~ (January 1, ~~2019~~2021 ~~using~~for the ~~optional transition method~~Company). AsEarly ~~such,~~adoption ~~the~~is ~~Company's reporting for the comparative periods presented in the financial statements will continue to be in accordance with ASC Topic 840, Leases~~permitted. The Company ~~will~~is ~~apply~~currently ~~certain~~evaluating ~~practical~~the ~~expedients~~impact ~~offered in~~ the ~~new~~adoption ~~lease guidance, such as no reassessment~~ of ~~whether~~ASU ~~expired or existing contracts contain leases, no re~~2019-~~evaluation~~12 ofwill the classification of expired or existing leases and no reassessment of initial direct costs for existing leases. Upon adoption, the Company expects to record an increase in total assets and total liabilities by less than 5%. Management does not expect the standard to have ~~a material impact~~ on its ~~cash~~financial ~~flows or results of operations~~statements.

In ~~June~~April ~~2016~~2019, the FASB issued ASU ~~No. 2016~~2019-1304, “~~Financial~~Codification ~~Instruments~~Improvements -to ~~Credit Losses (~~Topic 326), ~~(“ASU~~Financial ~~2016~~Instruments-~~13”).”~~Credit ~~The standard requires entities to estimate loss of financial assets measured at amortized cost~~Losses, ~~including~~Topic ~~trade receivables~~815, ~~debt~~Derivatives ~~securities~~ and ~~loans~~Hedging, ~~using~~and anTopic ~~expected~~825, ~~credit~~Financial ~~loss~~Instruments,” ~~model.~~which ~~The~~provided ~~expected credit~~certain ~~loss~~improvements ~~differs~~to ~~from~~ASU ~~the~~2016-01, ~~previous~~“Financial ~~incurred~~Instruments ~~losses~~- ~~model~~Overall ~~primarily~~(Subtopic in825-10): ~~that~~Recognition ~~the~~and ~~loss~~Measurement ~~recognition threshold~~ of ~~“probable”~~Financial ~~has~~Assets ~~been eliminated~~ and ~~that~~Financial ~~expected~~Liabilities,” ~~loss~~ASU ~~should~~2016-13, ~~consider~~“Financial ~~reasonable~~Instruments ~~and~~- ~~supportable~~Credit ~~forecasts~~Losses in(Topic ~~addition~~326): toMeasurement ~~the~~of ~~previously~~Credit ~~considered~~Losses ~~past~~on ~~events~~Financial Instruments” and ~~current~~ASU ~~conditions. Additionally~~2017-12, ~~the~~“Derivatives ~~guidance~~and ~~requires~~Hedging ~~additional~~(Topic ~~disclosures~~815): ~~related~~Targeted toImprovements ~~the further disaggregation of information related~~ to ~~the~~Accounting ~~credit quality of financial assets by year of the asset’s origination~~ for asHedging ~~many as five years~~Activities.” ~~Entities~~As ~~must apply~~ the ~~standard~~Company ~~provision~~has asadopted aASU ~~cumulative~~2016-~~effect~~01 ~~adjustment~~and toASU ~~retained~~2017-12, ~~earnings as of~~ the ~~beginning~~improvements ~~of the first reporting period~~ in ~~which~~ASU ~~the~~2019-04 ~~guidance~~are is effective. ~~The standard is effective~~ for fiscal years beginning after December 15, 2019, and the interim periods within those fiscal years. Early adoption is permitted. ~~for~~The ~~annual~~Company ~~periods~~expects ~~beginning~~to ~~after~~adopt ~~December~~ASU 152016-13 in the first quarter of 2020, ~~2018~~as described below, and ~~interim~~the ~~periods~~improvements ~~within~~in ~~those~~ASU ~~fiscal~~2019-04 ~~years~~will be adopted concurrently. The Company is currently evaluating the impact of adopting ASU ~~2016~~2019-13 04 on its financial statements.

In March 2019, the FASB issued ASU 2019-02, “Entertainment-Films-Other Assets-Film Costs (Subtopic 926-20) and Entertainment-Broadcasters-Intangibles-Goodwill and Other (Subtopic 920-350).” The standard requires production costs of episodic television series to be capitalized as incurred, which aligns the guidance with the accounting for production costs of films. In addition, once ASU 2019-02 is effective, capitalized costs associated with films and license agreements will be tested for impairment based on the lower of unamortized cost or fair value, as opposed to the existing guidance where the impairment test is based on estimated net realizable value. The guidance also includes additional disclosure requirements. The standard is effective for fiscal years beginning after December 15, 2019, and the interim periods within those fiscal years. The amendments in ASU 2019-02 should be applied prospectively. The Company does not expect the standard to have a material impact on its financial statements.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820) (“ASU 2018-13”), which modifies the disclosure requirements on fair value measurements. The amendments in this update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for any removed or modified disclosures. The Company is currently evaluating the impact of adopting ASU 2018-13 on its financial statements.

3In June 2016, the FASB issued ASU No. ~~Acquisitions~~ 2016-13, “Financial Instruments - Credit Losses (Topic 326) (“ASU 2016-13”).” The standard requires entities to estimate loss of financial assets measured at amortized cost, including trade receivables, debt securities and loans, using an expected credit loss model. The expected credit loss model differs from the previous incurred losses model primarily in that the loss recognition threshold of “probable” has been eliminated and that expected loss should consider reasonable and supportable forecasts in addition to the previously considered past events and current conditions. Additionally, the guidance requires additional disclosures related to the further disaggregation of information related to the credit quality of financial assets by year of the asset’s origination for as many as five years. Entities must apply the standard provision as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The standard is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company is currently evaluating the impact of adopting ASU 2016-13 on its financial statements.

2017 Acquisitions

Parker

On May 27, 2014, Mission assumed the rights, title and interest to an existing purchase agreement to acquire Parker Broadcasting of Colorado, LLC, the owner of television station KFQX, the FOX affiliate in the Grand Junction, Colorado market, for $4.0 million in cash. In connection with this assumption, Mission paid a deposit of $3.2 million on June 13, 2014. The acquisition was approved by the FCC in February 2017 and met all other customary conditions in March 2017. On March 31, 2017, Mission completed this acquisition and paid the remaining purchase price of $0.8 million, funded by cash on hand. The acquisition allowed Mission entrance into this market.

The fair values of the assets acquired and liabilities assumed were as follows (in thousands):

FCC licenses	$	1,539
Network affiliation agreements		1,743
Other intangible assets		20
Goodwill		698
Total assets acquired	$	4,000

The fair value assigned to goodwill is attributable to future expense reductions utilizing management’s leverage in programming and other station operating costs. The goodwill and FCC licenses are deductible for tax purposes. The intangible assets related to the network affiliation agreements are amortized over 15 years.

F-13

4. Local Service Agreements with Nexstar

The Company has entered into local service agreements with Nexstar to provide sales and/or operating services to all of its stations. For the stations with an SSA, the Nexstar station in the market provides certain services including news production, technical maintenance and security, in exchange for monthly payments to Nexstar. For each station with which the Company has entered into an SSA, it has also entered into a JSA, whereby Nexstar sells certain advertising time of the station and retains a percentage of the related revenue. For the stations with a 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, based on the station’s monthly operating expenses. JSA and TBA fees generated from Nexstar under the agreements are reported as “Revenue from Nexstar Broadcasting, Inc.,” and SSA fees incurred by Mission under the agreements are reported as “Fees incurred pursuant to local service agreements with Nexstar Broadcasting, Inc.” in the accompanying Condensed Statements of Operations.

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 local service agreements generally have a term of eight to ten years and have terms for renewal periods. Nexstar indemnifies Mission from Nexstar’s activities pursuant to the local service agreements to which Nexstar is a party.

Under the local service agreements, Nexstar receives substantially all of the Company’s available cash, after satisfaction of operating costs and debt obligations. The Company anticipates that Nexstar will continue to receive substantially all of its available cash, after satisfaction of operating costs and debt obligations. Monthly consideration under the SSA arrangements are flat fees subject to a 10.0% annual escalation. In compliance with FCC regulations for both the Company and Nexstar, Mission maintains complete responsibility for and control over programming, finances, personnel and operations of its stations. Mission had the following local service agreements in effect with Nexstar as of December 31, 2018:

Station	Market	Type of Agreement	Expiration	Consideration
WFXP	Erie, PA	TBA	8/17/30	Monthly payments received from Nexstar
KHMT	Billings, MT	TBA	12/15/29	Monthly payments received from Nexstar
KFQX	Grand Junction, CO	TBA	6/14/26	Monthly payments received from Nexstar
KJTL/KJBO-LP	Wichita Falls, TX-Lawton, OK	SSA JSA	6/30/25 5/31/19	$165 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
WYOU	Wilkes Barre-Scranton, PA	SSA JSA	6/30/25 9/30/24	$848 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
KODE	Joplin, MO-Pittsburg, KS	SSA JSA	6/30/25 9/30/24	$307 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
KRBC	Abilene-Sweetwater, TX	SSA JSA	6/30/25 6/30/23	$225 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
KSAN	San Angelo, TX	SSA JSA	6/30/25 5/31/24	$188 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
WAWV	Terre Haute, IN	SSA JSA	6/30/25 5/8/23	$73 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
KCIT/KCPN-LP	Amarillo, TX	SSA JSA	6/30/25 4/30/19	$220 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
KAMC	Lubbock, TX	SSA JSA	6/30/25 2/16/35	$303 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
KOLR	Springfield, MO	SSA JSA	6/30/25 2/16/35	$706 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
WUTR	Utica, NY	SSA JSA	6/30/25 3/31/24	$92 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
WTVO	Rockford, IL	SSA JSA	6/30/25 10/31/24	$321 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
KTVE	Monroe, LA-El Dorado, AR	SSA JSA	6/30/25 1/16/28	$358 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
WTVW	Evansville, IN	SSA JSA	6/30/25 11/30/19	$193 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
KLRT/KASN	Little Rock-Pine Bluff, AR	SSA JSA	6/30/25 1/1/21	$578 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
WVNY	Burlington-Plattsburgh, VT	SSA JSA	6/30/25 3/1/21	$284 thousand per month paid to Nexstar 70% of net revenue received from Nexstar

F-14

~~5. Property~~Note ~~and~~3: ~~Equipment~~Local Service Agreements with Nexstar

Under these agreements, Mission is responsible for certain operating expenses of its stations and therefore may have unlimited exposure to any potential operating losses. Mission will continue to operate its stations under the SSAs and JSAs or TBAs until the termination of such agreements. The local service agreements generally have a term of eight to ten years and have terms for renewal periods. Nexstar indemnifies Mission from Nexstar’s activities pursuant to the local service agreements to which Nexstar is a party.

Under the local service agreements, Nexstar receives substantially all of the Company’s available cash, after satisfaction of operating costs and debt obligations. The Company anticipates that Nexstar will continue to receive substantially all of its available cash, after satisfaction of operating costs and debt obligations. Monthly consideration under the SSAs is a flat fee subject to a 10.0% annual escalation. In compliance with FCC regulations for both the Company and Nexstar, Mission maintains complete responsibility for and control over programming, finances, personnel and operations of its stations. Mission had the following local service agreements in effect with Nexstar as of December 31, 2019:

Station	Market	Type of Agreement	Expiration	Consideration
WFXP	Erie, PA	TBA	8/17/30	Monthly payments received from Nexstar
KHMT	Billings, MT	TBA	12/15/29	Monthly payments received from Nexstar
KFQX	Grand Junction, CO	TBA	6/14/26	Monthly payments received from Nexstar
KJTL/KJBO-LP	Wichita Falls, TX-Lawton, OK	SSA JSA	6/30/25 5/31/35	$182 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
WYOU	Wilkes Barre-Scranton, PA	SSA JSA	6/30/25 9/30/24	$933 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
KODE	Joplin, MO-Pittsburg, KS	SSA JSA	6/30/25 9/30/24	$338 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
KRBC	Abilene-Sweetwater, TX	SSA JSA	6/30/25 6/30/23	$247 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
KSAN	San Angelo, TX	SSA JSA	6/30/25 5/31/24	$207 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
WAWV	Terre Haute, IN	SSA JSA	6/30/25 5/08/23	$81 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
KCIT/KCPN-LP	Amarillo, TX	SSA JSA	6/30/25 4/30/35	$242 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
KAMC	Lubbock, TX	SSA JSA	6/30/25 2/16/35	$333 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
KOLR	Springfield, MO	SSA JSA	6/30/25 2/16/35	$776 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
WUTR	Utica, NY	SSA JSA	6/30/25 3/31/24	$101 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
WTVO	Rockford, IL	SSA JSA	6/30/25 10/31/24	$353 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
KTVE	Monroe, LA-El Dorado, AR	SSA JSA	6/30/25 1/16/28	$393 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
WTVW	Evansville, IN	SSA JSA	6/30/25 8/01/21	$212 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
KLRT/KASN	Little Rock-Pine Bluff, AR	SSA JSA	6/30/25 1/01/21	$635 thousand per month paid to Nexstar 70% of net revenue received from Nexstar
WVNY	Burlington-Plattsburgh, VT	SSA JSA	6/30/25 3/01/21	$313 thousand per month paid to Nexstar 70% of net revenue received from Nexstar

F-15

Note 4: Property and Equipment

Property and equipment consisted of the following, as of December 31 (dollars in thousands):

	Estimated
	useful life,
	in years	~~2018~~2019			~~2017~~2018
Buildings and improvements	39	$	8,~~396~~420		$	8,~~385~~396
Land	N/A		1,632			1,632
Leasehold improvements	term of lease		70			70
Studio and transmission equipment	5-15		36,~~074~~210			3836,~~697~~074
Computer equipment	3-5		320			~~544~~320
Furniture and fixtures	7		832			832
Vehicles	5		~~701~~611			~~734~~701
Construction in progress	N/A		58,~~423~~755			~~989~~5,423
			53,448			51,883
			56,850			53,448
Less: accumulated depreciation			(3334,~~581~~128	)		(33,~~429~~581	)
Property and equipment, net		$	1922,~~867~~722		$	1819,~~454~~867

The increase in property and equipment (most notably construction in progress) primarily relates to spectrum repack projects, routine purchases of property and equipment, less disposals.

InNote ~~2001,~~5: ~~entities~~Intangible ~~acquired~~Assets ~~by the Company sold certain of their telecommunications tower facilities for cash~~ and then entered into noncancelable operating leases with the buyer for tower space. In connection with this transaction, a gain on the sale was deferred and is being recognized over the lease term which expires in May 2021. As of December 31, 2018 and 2017, the balance of deferred gain included $0.2 million and $0.4 million, respectively, in other noncurrent liabilities in the accompanying Balance Sheets and $0.2 million in other current liabilities as of each of the years then ended.Goodwill

6. Intangible Assets and Goodwill

Intangible assets subject to amortization consisted of the following, as of December 31 (dollars in thousands):

	Estimated		~~2018~~2019							~~2017~~2018
	useful life,				Accumulated							Accumulated
	in years		Gross		Amortization			Net		Gross		Amortization			Net
Network affiliation agreements		15	$	86,248	$	(7374,~~153~~947	)	$	1311,~~095~~301	$	86,248	$	(7173,~~150~~153	)	$	1513,~~098~~095
Other definite-lived intangible assets	1-15			15,681		(15,~~064~~190	)		~~617~~491		15,681		(1415,~~938~~064	)		~~743~~617
Other intangible assets			$	101,929	$	(8890,~~217~~137	)	$	1311,~~712~~792	$	101,929	$	(8688,~~088~~217	)	$	1513,~~841~~712

The estimated useful life of network affiliation agreements contemplates renewals of the underlying agreements based on the Company’s historical ability to renew such agreements without significant cost or modifications to the conditions from which the value of the affiliation was derived. These renewals can result in estimated useful lives of individual affiliations ranging from 12 to 20 years. Management has determined that 15 years is a reasonable estimate within the range of such estimated useful lives.

No events or circumstances were noted leading management to conclude that impairment testing should be performed on intangible assets subject to amortization during ~~2018~~2019 or ~~2017~~2018.

FThe following table presents the Company’s estimate of amortization expense for each of the five succeeding fiscal years and thereafter for definite-15lived intangible assets as of December 31, 2019 (in thousands):

The following table presents the Company’s estimate of amortization expense for each of the five succeeding fiscal years and thereafter for definite-lived intangible assets as of December 31, 2018 (in thousands):


2020	$	1,518
2021		1,517
2022		1,517
2023		1,444
2024		1,330
Thereafter		4,466
	$	11,792

2019	$	1,919
2020		1,518
2021		1,517
2022		1,517
2023		1,444
Thereafter		5,797
	$	13,712

F-16

The carrying amounts of goodwill and FCC licenses for the years ended December 31, ~~2018~~2019 and ~~2017~~2018 are as follows (in thousands):

	Goodwill								FCC Licenses				~~FCC Licenses~~
			Accumulated		~~Accumulated~~						Accumulated						~~Accumulated~~
	Gross		Impairment		~~Impairment~~		Net		~~Net~~Gross		Impairment		~~Gross~~		Net		~~Impairment~~			~~Net~~
Balances as of December 31, 2016	$	34,039			$	(1,550	)		$	32,489			$	52,260			$	(10,697	)	$	41,563
Balances as of December 31, 2018	$	34,737	$	(1,550	)		$	33,187	$	53,799	$	(10,697	)		$	43,102
Acquisitions (See Note 3)		698				-				698				1,539				-			1,539
Balances as of December 31, 2019	$	34,737	$	(1,550	)		$	33,187	$	53,799	$	(10,697	)		$	43,102
Balances as of December 31, 2017		34,737				(1,550	)			33,187				53,799				(10,697	)		43,102
Balances as of December 31, 2018	$	34,737			$	(1,550	)		$	33,187			$	53,799			$	(10,697	)	$	43,102

As discussed in Note 2, the Company has one aggregated broadcast business reporting unit for purposes of annual goodwill impairment review as of December 31, ~~2018~~2019. The Company’s annual impairment review of FCC licenses is performed at the station market level.

In the fourth quarter of ~~2018~~2019, the ~~company~~Company performed its annual impairment tests on goodwill and FCC licenses using the qualitative analysis approach and concluded that it was more likely than not that the fair values of the aggregated reporting ~~units~~unit and FCC licenses would sufficiently exceed their respective carrying amounts.

~~7. Debt~~Note 6: Accrued Expenses and Other Current Liabilities

Accrued expenses consisted of the following as of December 31 (in thousands):

	2019		2018
Network affiliation fees	$	299	$	279
Compensation and related taxes		293		262
Current portion of broadcast rights payable		312		325
Other		2,640		1,451
	$	3,544	$	2,317

Note 7: Debt

Long-term debt consisted of the following, as of December 31 (in thousands):

	2018			2017
	2019			2018
Term loan, net of financing costs and discount of $3,888 and $5,099, respectively	$	224,639		$	225,742
Term loans	$	226,242		$	228,527
Less: current portion		(2,285	)		(2,314	)
Less: unamortized financing costs and discount		(3,177	)		(3,888	)
	$	222,354		$	223,428
Total outstanding debt		223,065			224,639
Less: current portion		(2,285	)		(2,285	)
Long-term debt, net of current portion	$	220,780		$	222,354

Senior Secured Credit Facility

OnAs ~~October~~of 26December 31, 2019 and 2018, Mission’s ~~amended~~Term ~~its~~Loan ~~senior~~B ~~secured~~had ~~credit~~outstanding ~~facility,~~principal ~~which~~balances ~~reduced the applicable~~of ~~margin~~$226.2 ~~portion~~million ofand ~~the~~$228.5 ~~interest~~million, ~~rates~~respectively, ofand ~~its~~none ~~term~~outstanding ~~loan and~~under its revolving credit facility ~~by 25 basis~~as ~~points~~of ~~and~~each ~~extended~~of the ~~maturity~~years ~~date~~then ofended. ~~its~~The ~~revolving~~Term ~~credit~~Loan ~~facility~~B ~~to October~~has ~~26,~~a ~~2023.~~maturity ~~The~~date ~~loan~~of ~~refinancing~~January ~~resulted~~17, in2024 awhile ~~loss~~the onrevolving ~~extinguishment~~credit offacility ~~debt~~has ofa ~~$0.5~~maturity ~~million,~~date ~~representing the write-off~~ of ~~unamortized~~October ~~debt~~26, ~~financing costs~~2023.

AsThe ofMission ~~December~~Term ~~31,~~Loan ~~2018~~B ~~and~~is ~~2017,~~payable ~~the~~in ~~Mission~~consecutive ~~senior~~quarterly ~~secured~~installments ~~credit~~of ~~facility~~0.25%, ~~had~~with ~~$224.6~~the ~~million~~remainder ~~and~~due ~~$225~~at maturity.7 ~~million~~During ~~outstanding~~the ~~under~~year ~~its~~ended ~~term~~December ~~loan~~31, ~~respectively~~2019, ~~and no amounts~~Mission ~~outstanding~~repaid ~~under~~scheduled ~~its~~maturities ~~revolving~~of ~~credit~~$2.3 ~~facility~~million as of ~~each~~its ofTerm ~~the~~Loan ~~years then ended~~B.

~~The~~Interest rates are selected at Mission’s ~~term~~option ~~loan~~and the applicable margin is ~~payable~~adjusted quarterly as defined in ~~consecutive~~Mission’s ~~quarterly~~amended ~~installments~~credit agreement. The interest rate of 0Mission’s Term Loan B was 4.2501% and 4.77% as of December 31, ~~with~~2019 ~~the~~and ~~remainder~~2018, ~~due~~respectively. atThe ~~maturity~~interest rate on Mission’s revolving credit facility was 3.51% ~~During~~and ~~the~~4.27% ~~year~~as ~~ended~~of December 31, 2019 and 2018, respectively. Additionally, Mission ~~repaid~~is ~~the~~required ~~scheduled~~to ~~maturities~~pay ofquarterly ~~$2.3~~commitment ~~million~~fees on the unused portion of its ~~term~~revolving loan commitment of 0.5% per annum.

Interest rates are selected at Mission’s option and the applicable margin is adjusted quarterly as defined in Mission’s amended credit agreement. The interest rate of Mission’s term loan was 4.77% and 4.06% for the years ended December 31, 2018 and 2017, respectively. The interest rate on Mission’s revolving loan was 4.27% and 3.56% as of December 31, 2018 and 2017, 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 of 0.5% per annum.F-17

F-16

Unused Commitments and Borrowing Availability

As of December 31, ~~2018~~2019, Mission had $3.0 million of total unused revolving loan commitments under its senior secured credit facility, all of which was available for borrowing, based on the covenant calculations. Pursuant to the terms of Mission’s and Nexstar’s credit agreements, Mission may reallocate any of its unused revolving loan commitment to Nexstar and Nexstar may also reallocate certain of its unused revolving loan commitment to Mission.

Collateralization and Guarantees of Debt

Nexstar guarantees full payment of all obligations under the Mission senior secured credit facility in the event of Mission’s default. Similarly, Mission is a guarantor of Nexstar’s senior secured credit facility, the $~~900~~1.0785 ~~million~~billion 5.625% senior unsecured notes due ~~2024~~2027 (the “5.625% Notes due 2027”) issued by Nexstar and the $~~275~~900.0 million 65.~~125~~625% senior unsecured notes due ~~2022~~2024 (the “65.~~125~~625% Notes due 2024”) issued by Nexstar. The senior secured credit facilities are collateralized by a security interest in substantially all the combined assets, excluding FCC licenses, of the Company and Nexstar.

The 5.625% Notes due 2027 and the 65.~~125~~625% Notes due 2024 are general senior unsecured obligations subordinated to all of Mission’s senior secured debt. In the event that Nexstar is unable to repay amounts due under these debt obligations, the Company will be obligated to repay such amounts. The maximum potential amount of future payments that Mission would be required to make under these guarantees would be generally limited to the amount of borrowings outstanding under Nexstar’s senior secured credit facility, and the aggregate principal amount outstanding under the 5.625% Notes due 2027 and the 65.~~125~~625% Notes due 2024. As of December 31, ~~2018~~2019, Nexstar had $~~888~~1.2785 ~~million~~billion ~~outstanding~~aggregate ~~obligations~~principal amount outstanding under its 5.625% Notes due 2027, $~~273~~900.40 million ~~outstanding~~aggregate ~~obligations~~principal amount outstanding under its 65.~~125~~625% Notes due 2024 and a maximum commitment of $25.~~278~~830 billion under its senior secured credit facility, of which $14.~~289~~116 billion in Term Loan B (~~due~~including ~~January~~new ~~17,~~Term ~~2024~~Loan B), ~~and~~ $~~825.~~1.450 ~~million~~billion in Term Loan A (~~due~~including ~~July~~new ~~19,~~Term ~~2022~~Loan A), and $23.7 million of standby letters of credit were outstanding.

As discussed in Note 1—Organization and Business Operations, on November 29, 2019, Nexstar assigned its guarantee obligation of Marshall’s credit agreement to Mission. As a result of the assignment, Mission became the guarantor of Marshall’s debt and Nexstar is no longer a guarantor. Subsequent to the assignment of guarantee, Nexstar made a partial payment of Mission’s outstanding receivable from Nexstar amounting to $50.0 million to facilitate Mission’s funding of the guarantee. The payment of Nexstar to Mission was included in the “Due from Nexstar Broadcasting, Inc.” in the accompanying Balance Sheets.

Debt Covenants

The Mission term loan does not require financial covenant ratios but does provide for default in the event Nexstar does not comply with all covenants contained in its credit agreement. Nexstar was in compliance with its financial covenants as of December 31, ~~2018~~2019.

Fair Value of Debt

The aggregate carrying amounts and estimated fair values of the Company’s debt were as follows, as of December 31 (in thousands):

	2018				2017
	2019				2018
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Term loan	$	224,639	$	220,450	$	225,742	$	231,580
Term loans	$	226,242	$	227,154	$	224,639	$	220,450

The fair value of the term loan is computed based on borrowing rates currently available to Mission for bank loans with similar terms and average maturities. These fair value measurements are considered Level 3, as significant inputs to the fair value calculation are unobservable in the market.

F-18

Debt Maturities

The maturities of the Company’s debt, excluding the unamortized discount and certain debt financing costs, as of December 31, ~~2018~~2019 are summarized as follows (in thousands):

2019	$	2,285
2020	$	2,285
2020		2,285
2021		2,285
2022		2,285
2023		2,285
Thereafter		217,102
	$	~~228~~226,~~527~~242

~~F-17~~Note 8: Leases

~~8. Revenue~~The Company as a Lessee

AsThe ~~discussed~~Company inhas ~~Note~~operating 2,leases ~~the~~for ~~Company~~office ~~adopted~~space, ~~the~~tower ~~FASB~~facilities, ~~issued~~antenna ~~ASU No. 2014-09~~sites, ~~Revenue~~studio ~~from~~and ~~Contracts~~other ~~with~~real ~~Customers~~estate ~~(Topic~~properties ~~606)~~ and ~~all related amendments~~equipment. ~~ASC~~The ~~606~~Company’s ~~establishes~~leases ahave ~~comprehensive~~remaining ~~new~~lease ~~revenue~~terms ~~recognition~~of ~~model~~4 ~~designed~~months to ~~depict~~13 ~~the~~years, ~~transfer~~some of ~~goods~~which ormay ~~services~~include options to aextend ~~customer in an amount that reflects~~ the ~~consideration~~leases ~~the~~from ~~entity~~5 ~~expects~~ to be25 ~~entitled~~years, toand ~~receive~~some inof ~~exchange~~which ~~for~~may ~~those~~include ~~goods~~options orto ~~services~~terminate ~~and~~the ~~requires~~leases ~~significantly~~within ~~enhanced~~one ~~revenue disclosures~~year. The ~~Company~~depreciable ~~adopted~~life ~~this standard effective January 1, 2018 using the modified retrospective method as applied to customer contracts that were not completed as~~ of ~~January~~assets 1,and ~~2018.~~leasehold Asimprovements ais ~~result,~~limited ~~financial~~by ~~information~~the ~~for~~expected ~~reporting~~lease ~~periods beginning after January 1~~term, ~~2018~~unless there is ~~presented~~a ~~under~~transfer ~~ASC~~of ~~606,~~title ~~while~~or ~~comparative~~purchase ~~financial~~option ~~information~~reasonably ~~has~~certain ~~not been adjusted and continues to be reported in accordance with the Company’s historical accounting policy for revenue recognition prior to the adoption~~ of ~~ASC 606~~exercise. ~~Upon~~The ~~adoption~~components of ~~this~~lease ~~standard,~~expense ~~the~~during ~~cumulative adjustment to~~ the ~~Company’s~~year ~~accumulated~~ended ~~deficit~~December as31, of2019 ~~January~~was $1,.7 ~~2018~~million ~~for the cumulative effect~~ of ~~initially~~operating ~~applying~~lease ~~the~~cost ~~new~~included ~~standard~~in ~~was~~Direct ~~not~~operating ~~material.~~expenses, ~~Comparative~~excluding ~~information~~depreciation ~~has not been restated~~ and ~~continues~~amortization, ~~to be reported under the accounting standards~~ in ~~effect for those periods. The following are additional disclosures about~~ the ~~Company’s~~accompanying ~~revenue~~Statements ~~under~~of ~~ASC 606~~Operations.

The following table summarizes the components of our lease right-of-use assets and liabilities at December 31, 2019 (in thousands):

(In thousands)	Balance Sheet Classification	December 31, 2019
Operating Leases
Operating lease right-of-use assets, net	Other noncurrent assets, net	$	5,275
Current lease liabilities	Current operating lease liabilities	$	2,009
Noncurrent lease liabilities	Other noncurrent liabilities	$	7,114

Other information related to leases as of December 31, 2019 was as follows (in thousands, except lease term and discount rate):

Supplemental Cash Flows Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,698
Weighted Average Remaining Lease Term		8
Weighted Average Discount Rate		5.33	%

Future minimum lease payments under non-cancellable leases as of December 31, 2019 were as follows (in thousands):

2020	$	2,434
2021		1,494
2022		890
2023		922
2024		921
Thereafter		4,811
Total future minimum lease payments		11,472
Less imputed interest		(2,349	)
Total	$	9,123

F-19

The Company as a Lessor

The Company has various arrangements under which it is the lessor for the use of its tower space. These leases meet the criteria for operating lease classification, but the associated lease income is not material. As part of the adoption, the Company elected the practical expedient to combine lease and non-lease components in its lessor arrangements.

Note 9: Revenue

The following are additional disclosures about the Company’s revenue under ASC 606.

Contract Balance

Contract balances typically arise when a difference in timing between the transfer of control to the customer and receipt of consideration occurs. As of each of December 31, ~~2018~~2019 and ~~January~~December 131, 2018, the Company had no contract balances.

Disaggregation of Revenues

The following table presents the disaggregation of our revenue for the years ended December 31, ~~2018~~2019, ~~2017~~2018 and ~~2016~~2017 under ASC 606. Comparative 2017 ~~and 2016~~ revenues are presented in accordance with the Company’s historical accounting standard prior to the adoption of ASC 606 (in thousands):

	2018			2017			2016
		2019			2018			2017
Retransmission compensation	$	68,365		$	65,854		$	56,802
Distribution revenue		$	76,326		$	68,365		$	65,854
Other		862			712			629
Revenue from Nexstar			34,652			39,997			36,546
Barter revenue		-			4,026			3,971
Other			1,265			862			712
Revenue from Nexstar		39,997			36,546			42,791
Barter revenue			-			-			4,026
Net revenue	$	~~109,224~~$	112,243	$	~~107,138~~$	109,224	$	~~104,193~~$	107,138

Revenue from Nexstar is directly correlated to the advertising revenue earned at the Company’s stations and is positively affected by national and regional political campaigns, and certain events such as the Olympic Games or the Super Bowl. Company stations’ advertising revenue is generally highest in the second and fourth quarters of each year, due in part to increases in consumer advertising in the spring and retail advertising in the period leading up to, and including, the holiday season. In addition, advertising revenue is generally higher during even-numbered years when congressional and presidential elections occur, and advertising is aired during the Olympic Games.

The Company receives compensation from MVPDs and ~~OTTDs~~OVDs in return for the consent to the retransmission of the signals of its television stations. ~~Retransmission~~Distribution ~~compensation~~revenue is recognized at the point in time the broadcast signal is delivered to the distributors and is based on a price per subscriber.

Beginning in 2018, the Company no longer recognizes barter revenue (and the related barter expense) resulting from the exchange of advertising time for certain program material. Under the Company’s historical accounting policy prior to the adoption of ASC 606, barter revenue (and the related barter expense) would have been $3.8 million during the year ended December 31, 2018.

9. Note 10: Common Stock

The Company is owned by two shareholders, Nancie J. Smith, Chairman of the Board and Secretary, and Dennis Thatcher, President, Treasurer and Director. As of December 31, ~~2018~~2019 and ~~2017~~2018, the Company had authorized, issued and outstanding 1,000 shares of common stock with a one dollar par value. Each share of common stock is entitled to one vote.

F-1820

~~10.~~ Note 11: Income Taxes

The income tax (benefit) expense consisted of the following components for the years ended December 31 (in thousands):

	2018			2017			2016
	2019			2018			2017
Current tax (benefit) expense:
Federal	$	(5759	)	$	(~~1,355~~5	)	$	~~545~~(1,355	)
State		~~(60~~17	)		~~304~~(60	)		~~760~~304
		(65	)		(1,051	)		1,305
		(742	)		(65	)		(1,051	)
Deferred tax (benefit) expense:
Deferred tax expense (benefit):
Federal		(115,~~523~~557	)		4(1,~~140~~523	)		94,~~844~~140
State		~~(454~~489	)		~~311~~(454	)		~~1,188~~311
		(1,977	)		4,451			11,032
		16,046			(1,977	)		4,451
Income tax (benefit) expense	$	(2,042	)	$	3,400		$	12,337
Income tax expense (benefit)	$	15,304		$	(2,042	)	$	3,400

The income tax expense (benefit) ~~expense~~ differs from the amount computed by applying the statutory federal income tax rate to (loss) income before income taxes. The sources and tax effects of the differences were as follows, for the years ended December 31 (in thousands):

	2018			2017			2016
	2019			2018			2017
Federal income tax at the statutory rate	$	(1,653	)	$	3,162		$	11,131
Income tax expense (benefit) at 35% statutory federal rate	$	(2,805	)	$	(1,653	)	$	3,162
State and local taxes, net of federal benefit		(~~395~~527	)		~~410~~(395	)		~~1,265~~410
Impact of federal tax rate reduction on deferred taxes		-			~~1,220~~-			-1,220
Impact of federal tax rate reduction on uncertain tax positions		-			~~(1,471~~-	)		-(1,471	)
Other		676			796			~~(59~~79	)
Income tax expense (benefit)	$	(2,042	)	$	3,400		$	12,337
Change in beginning of year valuation allowance		18,560			-			-
Income tax (benefit) expense	$	15,304		$	(2,042	)	$	3,400

In 2017, the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) was signed into law which reduced the federal corporate income tax rate from 35% to 21%. In our Annual Report on Form 10-K for the year ended December 31, 2017, we reported a provisional effect of the Tax Act to our financial statements for that period. During the year ended December 31, 2018 the Company completed its accounting for the Tax Act. There were no material changes to the provisional amounts included in the Annual Report on Form 10-K for the year ended December 31, 2018.

The components of the net deferred tax asset were as follows, as of December 31 (in thousands):

	2018			2017
	2019			2018
Deferred tax assets:
Net operating loss carryforwards	$	1214,~~808~~321		$	1112,~~726~~808
Rent		~~501~~-			~~601~~501
Other		56,~~139~~974			25,~~621~~139
Total deferred tax assets		18,448			14,948
Total		21,295			18,448
Valuation allowance		(18,560	)		-
Total deferred tax assets		2,735			18,448
Deferred tax liabilities:
Property and equipment		(1,~~721~~855	)		(21,~~141~~721	)
Goodwill		(46,~~888~~279	)		(4,~~300~~888	)
Other intangible assets		(~~833~~43	)		(~~901~~833	)
FCC licenses		(67,~~706~~260	)		(6,~~098~~706	)
Other		~~(815~~137	)		-(815	)
Total deferred tax liabilities		(1415,~~963~~300	)		(1314,~~440~~963	)
Net deferred tax assets	$	3,485		$	1,508
Net deferred tax (liabilities) assets	$	(12,565	)	$	3,485

As of December 31, ~~2018~~2019, the Company’s ~~reserve~~had ~~for~~a ~~uncertain~~valuation ~~tax~~allowance ~~positions~~related ~~totaled~~to ~~approximately~~deferred tax assets of $218.2 6 million. ~~For~~which ~~the~~was ~~years~~not ~~ended~~likely ~~December~~to ~~31,~~be ~~2018~~realized, ~~2017~~an ~~and~~increase ~~2016~~of ~~there were~~ $218.2 6 million, ~~$2.2~~from ~~million~~December ~~and~~31, $32018.7 During ~~million~~the ofyear ~~gross~~ended ~~unrecognized~~December ~~tax benefits~~31, ~~respectively~~2019, ~~that would reduce~~ the ~~effective tax rate if the underlying tax positions were sustained or settled favorably.~~

F-1921

valuation allowance increased primarily due to the Company’s belief, based upon consideration of the positive and negative evidence, that certain deferred tax assets of the Company were not likely to be realized. The primary negative evidence considered was the net loss recorded in 2019.

As of December 31, 2019, the Company’s reserve for uncertain tax positions totaled approximately $2.2 million. For the years ended December 31, 2019, 2018 and 2017 there were $2.2 million, $2.2 million and $2.2 million of gross unrecognized tax benefits, respectively, that would reduce the effective tax rate if the underlying tax positions were sustained or settled favorably.

A reconciliation of the beginning and ending balances of the gross liability for uncertain tax positions is as follows (in thousands):

	2018		2017			2016
	2019		2018			2017
Uncertain tax position liability at the beginning of the year	$	2,206	$	32,~~677~~206		$	3,677
Decreases related to tax positions taken during prior periods		-		~~(1,471~~-	)		-(1,471	)
Uncertain tax position liability at the end of the year	$	2,206	$	2,206		$	32,~~677~~206

While the Company does not anticipate any significant changes to the amount of liabilities for gross unrecognized tax benefits within the next twelve months, there can be no assurance that the outcomes from any tax examinations will not have a significant impact on the amount of such liabilities, which could have an impact on the operating results or financial position of the Company.

Interest expense and penalties related to the Company’s uncertain tax positions would be reflected as a component of income tax expense in the Company’s Statements of Operations. For the years ended December 31, ~~2018~~2019, ~~2017~~2018 and ~~2016~~2017, the Company did not accrue interest on the unrecognized tax benefits as an unfavorable outcome upon examination would not result in a cash outlay but would reduce NOLs.

The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. The Company is subject to U.S. federal tax examinations for years after ~~2014~~2015. Additionally, any NOLs that were generated in prior years and utilized in the current or future years may also be subject to examination by the Internal Revenue Service. State jurisdictions that remain subject to examination are not considered significant.

As of December 31, ~~2018~~2019, the Company has federal NOLs available of $5763.1 million and post-apportionment state NOLs available of $1416.17 million which are available to reduce future taxable income if utilized before their expiration. The federal NOLs generated prior to 2018 expire at various dates through 2033 if not utilized. NOLs generated beginning in years 2018 are subject to an overall limitation based on 80% of taxable income. Any excess NOL carryover in a year beginning in 2018 has no expiration. These NOLs have an indefinite life carryover and utilization in any year will be limited to 80% of taxable income. The $3.4 million of NOL generated in 2018 and $7.4 million generated in 2019 would be subject to this limitation. Utilization of NOLs in the future may be limited if changes in the Company’s ownership occur.

~~11.~~ Note 12: 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 or adopt other legislation in a manner that could impact the Company’s stations and the television broadcast industry in general.

The FCC has adopted rules with respect to the final conversion of existing low power and television translator stations to digital operations, which must be completed by July 2021.

Media Ownership

The FCC is required to review its media ownership rules every four years and to eliminate those rules it finds no longer serve the “public interest, convenience and necessity.”

In August 2016, the FCC adopted a Second Report and Order (the “2016 Ownership Order”) concluding the agency’s 2010 and 2014 quadrennial reviews. The 2016 Ownership Order (1) retained the ~~then-existing~~ local television ownership rule and radio/television cross-ownership rule with minor technical modifications, (2) extended the ban on common ownership of two top four television stations in a market to network affiliation swaps, (3) retained the ~~then-existing~~ ban on newspaper/broadcast cross-ownership in local markets while considering waivers and providing an exception for failed or failing entities, (4) retained the dual network rule, (5) made JSA relationships attributable interests and (6) defined a category of sharing agreements designated as SSAs between stations and required public disclosure of those SSAs (while not considering them attributable).

F-22

waivers and providing an exception for failed or failing entities, (4) retained the dual network rule, (5) made television JSA relationships attributable interests and (6) defined a category of sharing agreements designated as SSAs between commercial television stations and required public disclosure of those SSAs (while not considering them attributable).

FVarious parties filed petitions seeking reconsideration of various aspects of the 2016 Ownership Order. On November 16, 2017, the FCC adopted an order (the “Reconsideration Order”) addressing the petitions for reconsideration. The Reconsideration Order (1) eliminated the rules prohibiting newspaper/broadcast cross-ownership and limiting television/radio cross-ownership, (2) eliminated the requirement that eight or more independently-owned television stations remain in a local market for common ownership of two television stations in that market to be permissible (the “eight voices test”), (3) retained the general prohibition on common ownership of two “top four” stations in a local market but provided for case-by-case review, (4) eliminated the television JSA attribution rule, and (5) retained the SSA definition and disclosure requirement for television stations. These rule modifications took effect on February 7, 2018, when the Third Circuit denied a mandamus petition which had sought to stay their effectiveness. On September 23, 2019, however, the Third Circuit issued an opinion vacating the Reconsideration Order on the ground that the FCC had failed to adequately analyze the effect of the Reconsideration Order’s deregulatory rule changes on minority and woman ownership of broadcast stations. The Third Circuit later denied petitions for en banc rehearing and its decision took effect on November 29, 2019. On December 20, 2019, the FCC issued an order reinstating the local television ownership rule, the radio/television cross-ownership rule, the newspaper/broadcast cross-ownership rule and the television JSA attribution rule as they existed prior to the Reconsideration Order (including the eight voices test with respect to local television ownership). There is the possibility of further litigation in connection with the Third Circuit’s September 2019 opinion.

~~Various~~In ~~parties~~December ~~filed~~2018, ~~petitions seeking reconsideration of various aspects of~~ the ~~2016~~FCC ~~Ownership~~initiated ~~Order. On~~its ~~November~~2018 ~~16,~~quadrennial ~~2017,~~review ~~the~~with ~~FCC adopted an order (~~the ~~“Reconsideration~~issuance ~~Order”)~~of ~~addressing~~a ~~the~~Notice ~~petitions~~of ~~for~~Proposed ~~reconsideration~~Rulemaking. ~~The~~Among ~~Reconsideration~~other ~~Order~~things, ~~(1) eliminated~~ the ~~rules~~FCC ~~prohibiting~~seeks ~~newspaper/broadcast~~comment ~~cross-ownership~~on ~~and~~all ~~limiting~~aspects ~~television/radio~~of ~~cross-ownership, (2) eliminated~~ the ~~requirement~~local ~~that eight or more independently-owned~~ television ~~stations remain in a local market for common~~ ownership ofrule’s ~~two~~implementation ~~television~~and ~~stations~~whether ~~in that market to be permissible, (3) retained~~ the ~~general~~current ~~prohibition~~version ~~on common ownership~~ of ~~two “top four” stations in a local market but provided for case-by-case review, (4) eliminated~~ the ~~television JSA attribution~~ rule, ~~and~~remains ~~(5)~~necessary ~~retained~~in the ~~SSA~~public ~~definition and disclosure requirement for television stations~~interest. ~~These~~Comments ~~rule~~and ~~modifications~~reply ~~took~~comments ~~effect~~in onthe ~~February 7,~~ 2018, ~~when~~quadrennial ~~the~~review ~~Third~~were ~~Circuit~~filed ~~denied~~in athe ~~mandamus~~second ~~petition~~quarter ~~which~~of ~~had sought to stay their effectiveness~~2019. ~~The Reconsideration Order remains subject to appeals before the Third Circuit.~~

InThe ~~December~~FCC’s ~~2018,~~media ownership rules limit the ~~FCC~~percentage ~~initiated~~of U.S. television households which a party may reach through its ~~2018~~attributable ~~quadrennial~~interests ~~review~~in ~~with~~television stations to 39% on a nationwide basis. Historically, the ~~issuance~~FCC has counted the ownership of an ultra-high frequency (“UHF”) station as reaching only 50% of a ~~Notice~~market’s percentage of ~~Proposed~~total ~~Rulemaking~~national audience. ~~Among~~ ~~other~~On ~~things~~August 24, 2016, the FCC ~~seeks~~adopted ~~comment~~a Report and Order abolishing this “UHF discount”, and that rule change became effective in October 2016. On April 20, 2017, the FCC adopted an order on ~~all~~reconsideration ~~aspects~~that ofreinstated the ~~local~~UHF ~~television~~discount, ~~ownership~~which ~~rule~~became effective again on June 15, 2017. A federal court of appeals dismissed a petition for review of the discount’s ~~implementation~~reinstatement ~~and~~in ~~whether~~July 2018. In December 2017, the ~~current~~FCC ~~version~~initiated ofa comprehensive rulemaking to evaluate the ~~rule~~UHF ~~remains~~discount ~~necessary~~together inwith the ~~public~~national ~~interest~~ownership limit. Comments and reply comments were filed in 2018, and the ~~2018~~proceeding ~~quadrennial~~remains ~~review~~open. ~~are~~Mission ~~due~~is in compliance with the ~~second~~39% ~~quarter~~national ofcap ~~2019~~limitation without the UHF discount and, therefore, with the UHF discount as well.

The FCC’s media ownership rules limit the percentage of U.S. television households which a party may reach through its attributable interests in television stations to 39% on a nationwide basis. Historically, the FCC has counted the ownership of an ultra-high frequency (“UHF”) station as reaching only 50% of a market’s percentage of total national audience. On August 24, 2016, the FCC adopted a Report and Order abolishing this “UHF discount” for the purposes of a licensee’s determination of compliance with the 39% national cap, and that rule change became effective in October 2016. On April 20, 2017, the FCC adopted an order on reconsideration that reinstated the UHF discount. That order stated that the FCC would launch a comprehensive rulemaking later in 2017 to evaluate the UHF discount together with the national ownership limit. The FCC initiated that proceeding in December 2017, and comments and reply comments were filed in the first and second quarters of 2018. The FCC’s April 2017 reinstatement of the UHF discount became effective on June 15, 2017. A petition for review of the FCC’s order reinstating the UHF discount was filed in a federal appeals court. On July 25, 2018, the federal court dismissed the appeal for lack of standing. Mission is in compliance with the 39% national cap limitation without the UHF discount and, therefore, with the UHF discount as well.

Spectrum

The FCC is in the process of repurposing a portion of the broadcast television spectrum for wireless broadband use. Pursuant to federal legislation enacted in 2012, the FCC conducted an incentive auction for the purpose of making additional spectrum available to meet future wireless broadband needs. Under the auction statute and rules, certain television broadcasters accepted bids from the FCC to voluntarily relinquish ~~all or part of~~ their spectrum in exchange for consideration, and certain wireless broadband providers and other entities submitted successful bids to acquire the relinquished television spectrum. ~~Over~~ ~~the~~Television ~~next several years, television~~ stations that are not relinquishing their spectrum are being “repacked” into the frequency band still remaining for television broadcast use.

The incentive auction commenced on March 29, 2016 and officially concluded on April 13, 2017. None of the Company’s television stations accepted bids to relinquish their television channels. Seven of the Company’s stations have been assigned new channels in the reduced postF-auction television band. These “repacked” stations are required to construct and license the necessary technical modifications to operate on their new assigned channels and will need to cease operating on their former channels, by deadlines which the FCC has established and which are no later than July 13, 2020. Congress has allocated up to an industry-wide total of $2.75 billion to reimburse television broadcasters, MVPDs and other parties for costs reasonably incurred due to the repack. This allocation includes $1.0 billion added to the TV Broadcaster Relocation Fund as part of the Consolidated Appropriations Act, 2018. Broadcasters and MVPDs have submitted estimates to the FCC of their reimbursable costs. As of February 6, 2019, these costs were approximately $1.95 billion, and the FCC has indicated that it expects those costs to rise. During the year ended December 31, 2018 and 2017, the Company spent a total of $3.9 million and $0.1 million, respectively, in capital expenditures related to station repack which were recorded as assets under the property and equipment caption in the accompanying Balance Sheets. In 2018, the Company received $2.8 million in reimbursements from the FCC related to these expenditures which were recorded as operating income in the accompanying Consolidated Statements of Operations and Comprehensive Income. There were no reimbursements received related to station repack in 2017. The Company cannot determine if the FCC will be able to fully reimburse the its repacking costs as this is dependent on certain factors, including the Company’s ability to incur repacking costs that are equal to or less than the FCC’s allocation of funds to the Company and whether the FCC will have available funds to reimburse the Company for additional repacking costs that it previously may not have anticipated. Whether the FCC will have available funds for additional reimbursements will also depend on the repacking costs that will be incurred by other broadcasters, MVPDs and other parties that are also seeking reimbursements.23

The ~~reallocation~~incentive ofauction ~~television~~commenced ~~spectrum~~on toMarch ~~broadband~~29, ~~use~~2016 ~~may~~and beofficially toconcluded on April 13, 2017. None of the ~~detriment~~Company’s television stations accepted bids to relinquish their television channels. Seven of the Company’s ~~investment~~stations have been assigned new channels in ~~digital~~the ~~facilities~~reduced post-auction television band. These “repacked” stations are required to construct and license the necessary technical modifications to operate on their new assigned channels, ~~could~~and ~~require~~must ~~substantial~~cease ~~additional~~operating ~~investment~~on their former channels, on a rolling schedule ending in July 2020. Congress has allocated up to ~~continue~~an ~~current~~industry-wide ~~operations~~total of $2.75 billion to reimburse television broadcasters, MVPDs and ~~may~~other ~~require~~parties ~~viewers~~for costs reasonably incurred due to ~~invest~~the repack. This allocation includes $1.0 billion added to the TV Broadcaster Relocation Fund as part of the Consolidated Appropriations Act, 2018. Broadcasters, MVPDs and other parties have submitted to the FCC estimates of their reimbursable costs and, in ~~additional~~many ~~equipment~~cases, orsubsequent ~~subscription~~requests ~~services~~for reimbursement of those costs. As of December 6, 2019, verified cost estimates were approximately $1.95 billion, with 79 percent of the repack complete and reimbursements still to ~~continue~~be ~~receiving~~made ~~broadcast~~to certain low power television ~~signals~~and FM radio stations affected by the repack. During the years ended December 31, 2019 and 2018, the Company spent a total of $5.6 million and $3.9 million, respectively, in capital expenditures related to station repack which were recorded as assets under the property and equipment caption in the accompanying Balance Sheets. During the years ended December 31, 2019 and 2018, the Company received $5.7 million and $2.8 million, respectively, in reimbursements from the FCC related to these expenditures which were recorded as operating income in the accompanying Statements of Operations. There were no reimbursements received related to station repack in 2017. The Company cannot ~~predict~~determine if the ~~impact~~FCC ofwill be able to fully reimburse its repacking costs as this is dependent on certain factors, including the ~~incentive~~Company’s ~~auction~~ability to incur repacking costs that are equal to or less than the FCC’s allocation of funds to the Company and ~~subsequent~~whether the FCC will have available funds to reimburse the Company for additional repacking costs that it previously may not have anticipated. Whether the FCC will have available funds for additional reimbursements will also depend on ~~its~~the ~~business~~repacking costs that will be incurred by other broadcasters, MVPDs, and other parties that are also seeking reimbursements.

~~F-21~~The reallocation of television spectrum to broadband use may be to the detriment of the Company’s investment in digital facilities, could require substantial additional investment to continue current operations, and may require viewers to invest in additional equipment or subscription services to continue receiving broadcast television signals. The Company cannot predict the impact of the incentive auction and subsequent repack on its business.

Exclusivity/Retransmission Consent

On March 3, 2011, the FCC initiated a Notice of Proposed Rulemaking which among other things asked for comment on eliminating the network non-duplication and syndicated exclusivity protection rules, which may permit MVPDs to import out-of-market television stations in certain circumstances. In March 2014, the FCC adopted a further notice of proposed rulemaking which sought additional comment on the elimination or modification of the network non-duplication and syndicated exclusivity rules. The FCC’s possible elimination or modification of the network non-duplication and syndicated exclusivity protection rules may affect the Company’s ability to sustain its current level of retransmission consent revenues or grow such revenues in the future and could have an adverse effect on the Company’s business, financial condition and results of operations. The Company cannot predict the resolution of the FCC’s network non-duplication and syndicated exclusivity proposals, or the impact of these proposals.

On December 5, 2014, federal legislation directed the FCC to commence a rulemaking to “review its totality of the circumstances test for good faith [retransmission consent] negotiations.” The FCC commenced this proceeding in September 2015 and comments and reply comments were submitted. In July 2016, the then-Chairman of the FCC publicly announced that the agency would not adopt additional rules in this proceeding. However, the proceeding remains open.

Further, ~~certain~~OVDs ~~online video distributors and other over-the-top video distributors (“OTTDs”)~~ have begun streaming broadcast programming over the Internet. In ~~June~~September 2014, the U.S. Supreme Court held that an ~~OTTD~~OVD’s retransmissions of broadcast television signals without the consent of the broadcast station violate copyright holders’ exclusive right to perform their works publicly as provided under the Copyright Act. In December 2014, the FCC issued a Notice of Proposed Rulemaking proposing to interpret the term “MVPD” to encompass ~~OTTDs~~OVDs that make available for purchase multiple streams of video programming distributed at a prescheduled time and seeking comment on the effects of applying MVPD rules to such ~~OTTDs~~OVDs. Comments and reply comments were filed in 2015. Although the FCC has not classified ~~OTTDs~~OVDs as MVPDs to date, several ~~OTTDs~~OVDs have signed agreements for retransmission of local stations within their markets and others are actively seeking to negotiate such agreements.

~~12. Commitments and Contingencies~~ F-24

Note 13: Commitments and Contingencies

Broadcast Rights Commitments

Broadcast rights acquired for cash under license agreements are recorded as an asset and a corresponding liability at the inception of the license period. Future minimum payments for license agreements for which the license period has not commenced and no asset or liability has been recorded are as follows as of December 31, ~~2018~~2019 (in thousands):

2019	$	953
2020	$	908
2020		375
2021		411
2021		37
2022		191
2022		2
2023		33
	$	1,~~367~~543

Operating Leases

The Company leases office space, vehicles, towers, antenna sites, studio and other operating equipment under noncancelable operating lease arrangements expiring through April 2032. Rent expense recorded in the Company’s Statements of Operations for such leases was $1.9 million during each of the years ended December 31, 2018, 2017 and 2016. Future minimum lease payments under these operating leases are as follows as of December 31, 2018 (in thousands):

2019	$	2,433
2020		2,447
2021		1,507
2022		902
2023		934
Thereafter		5,733
	$	13,956

Guarantees of Nexstar Debt

Mission is a guarantor of and has pledged substantially all its assets, excluding FCC licenses, to guarantee Nexstar’s credit facility. Mission is also a guarantor of Nexstar’s 65.~~125~~625% Notes due 2027 and Nexstar’s 5.625% Notes due 2024.

~~F-22~~The 5.625% Notes due 2027 and the 5.625% Notes due 2024 are general senior unsecured obligations subordinated to all of Mission’s senior secured debt. In the event that Nexstar is unable to repay amounts due under these debt obligations, the Company will be obligated to repay such amounts. The maximum potential amount of future payments that Mission would be required to make under these guarantees would be generally limited to the amount of borrowings outstanding under Nexstar’s senior secured credit facility, and the aggregate principal amounts outstanding under the 5.625% Notes due 2027 and the 5.625% Notes due 2024. As of December 31, 2019, Nexstar had $1.785 billion aggregate principal amount outstanding under its 5.625% Notes due 2027, $900.0 million aggregate principal amount outstanding under its 5.625% Notes due 2024 and a maximum commitment of $5.830 billion under its senior secured credit facility, of which $4.116 billion in Term Loan B (including new Term Loan B), $1.450 billion in Term Loan A (including new Term Loan A), and $23.7 million of standby letters of credit were outstanding. Nexstar also has a $139.7 million revolving loan commitment, of which none was outstanding as of December 31, 2019. Nexstar’s new and old Term Loan B mature on September 18, 2026 and January 17, 2024, respectively. Nexstar’s new and old Term Loan A and revolving loans mature on September 19, 2024 and October 26, 2023, respectively.

~~The~~On ~~6.125%~~January Notes and the 5.625% Notes are general senior unsecured obligations subordinated to all of Mission’s senior secured debt. In the event that Nexstar is unable to repay amounts due under these debt obligations30, ~~Mission~~2020 will be obligated to repay such amounts. The maximum potential amount of future payments that Mission would be required to make under these guarantees would be generally limited to the amount of borrowings outstanding under Nexstar’s senior secured credit facility, the 6.125% Notes and ~~the~~February ~~5.625% Notes. As of December 31~~28, ~~2018~~2020, Nexstar ~~had~~prepaid $~~273~~30.40 million ~~outstanding~~and ~~obligations under its 6.125% Notes due on February 15, 2022, had~~ $~~888~~100.20 million ~~outstanding obligations under its 5.625% Notes due on August 1~~, ~~2024 and had a maximum commitment of $2.278 billion under its senior secured credit facility~~respectively, of ~~which~~the ~~$1.289 billion in Term Loan B and $825.1 million in Term Loan A were~~ outstanding. ~~Nexstar~~principal ~~also~~balance ~~has~~under aits ~~$163.4~~old ~~million revolving loan commitment, of which none was outstanding as of December 31, 2018. Nexstar’s~~ Term Loan B ~~matures on January 17, 2024~~. ~~Nexstar’s Term Loan A and revolving loans mature on July 19, 2022.~~

On February 28, 2019, Nexstar prepaid $60.0 million of the outstanding principal balance under its Term Loan B.

Purchase Options Granted to Nexstar

In consideration of the guarantee of Mission’s bank credit facility by Nexstar Media Group, Inc. and its subsidiaries, Mission has granted Nexstar purchase options to acquire the assets and assume the liabilities of each Mission station, subject to FCC consent, for consideration equal to the greater of (1) seven times the station’s cash flow, as defined in the option agreement, less the amount of its indebtedness as defined in the option agreement, or (2) the amount of its indebtedness. Cash flow is defined as income or loss from operations, plus depreciation and amortization (including amortization of broadcast rights), interest income, nonrecurring expenses (including time brokerage agreement fees), network compensation payments received or receivable and corporate management fees, less payments for broadcast rights and network compensation revenue. Additionally, Mission’s shareholders have granted Nexstar an option to purchase any or all of the Company’s common stock, subject to FCC consent, for a price equal to the pro rata portion of the greater of (1) five times the Mission stations’ cash flow, as defined in the agreement, reduced by the amount of indebtedness, as defined in the agreement, or (2) $100,000. These option agreements (which expire on various dates between 2021 and 2028) are freely exercisable or assignable by Nexstar without consent or approval by Mission or its shareholders. The Company expects these option agreements to be renewed upon expiration.

F-25

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 other 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 insignificant 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.

~~13.~~Note 14: Employee Benefits

The Company has established a retirement savings plan (the “Plan”) under Section 401(k) of the Code. The Plan covers substantially all employees of the Company who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. Contributions to the Plan may be made at the discretion of the Company. The Company contributed $4555,000, $2345,000 and $2023,000 to the Plan for the years ended December 31, ~~2018~~2019, ~~2017~~2018 and ~~2016~~2017, respectively.

F-2326

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

Filing Compare · MISSION BROADCASTING INC