The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.
The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.
The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.
The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.
(1) Amounts for the three months ended March 31, 2019 include the transition adjustment of $112.8 million for the adoption of ASC 842.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Organization and Business Operations
As of March 31, 2019, Nexstar Media Group, Inc. and its wholly-owned subsidiaries (“Nexstar”) owned, operated, programmed or provided sales and other services to 174 full power television stations, including those owned by VIEs, in 100 markets in the states of Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland,
Massachusetts, Michigan, Mississippi, Missouri, Montana, Nevada, New Mexico, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, West Virginia and Wisconsin. The stations are affiliates of ABC, NBC, FOX, CBS, The CW, MNTV and other broadcast television networks. Through various local service agreements, Nexstar provided sales, programming and other services to 36 full power television stations owned and/or operated by independent third parties.
2. Summary of Significant Accounting Policies
Principles of Consolidation
The Condensed Consolidated Financial Statements include the accounts of Nexstar and the accounts of independently-owned VIEs for which Nexstar is the primary beneficiary (See Note 2—Variable Interest Entities). Nexstar and the consolidated VIEs are collectively referred to as the “Company.” Noncontrolling interests represent the VIE owners’ share of the equity in the consolidated VIEs and are presented as a component separate from Nexstar Media Group, Inc. stockholders’ equity. All intercompany account balances and transactions have been eliminated in consolidation. Nexstar management evaluates each arrangement that may include variable interests and determines the need to consolidate an entity where it determines Nexstar is the primary beneficiary of a VIE in accordance with related authoritative literature and interpretive guidance.
The following are assets of consolidated VIEs, excluding intercompany amounts, that are not available to settle the obligations of Nexstar and the liabilities of consolidated VIEs, excluding intercompany amounts, for which their creditors do not have recourse to the general credit of Nexstar (in thousands):
|
|
March 31, 2019
|
|
|
December 31, 2018
|
|
Current assets
|
|
$
|
21,151
|
|
|
$
|
20,898
|
|
Property and equipment, net
|
|
|
14,404
|
|
|
|
10,994
|
|
Goodwill
|
|
|
121,600
|
|
|
|
121,600
|
|
FCC licenses
|
|
|
151,808
|
|
|
|
157,658
|
|
Other intangible assets, net
|
|
|
73,598
|
|
|
|
75,513
|
|
Other noncurrent assets, net
|
|
|
9,798
|
|
|
|
3,652
|
|
Total assets
|
|
$
|
392,359
|
|
|
$
|
390,315
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
$
|
21,206
|
|
|
$
|
17,594
|
|
Noncurrent liabilities
|
|
|
37,571
|
|
|
|
27,542
|
|
Total liabilities
|
|
$
|
58,777
|
|
|
$
|
45,136
|
|
Liquidity
The Company is 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 the Company’s control.
5
On November 30, 2018, Nexstar entered into a definitive merger agreement with Tribune Media Company (“Tribune”) to acquire the latter’s outstanding equity and to settle the outstanding equity-based awards for $46.50 per share in a cash transaction. The estimated total purchase price is valued at $6.4 billion, consisting of the merger cash consideration and the refinancing of Tribune's outstanding debt. The merger has been approved by the boards of directors of both companies and the stockholders of Tribune and is projected to close in the third quarter of 2019, subject
to (i) FCC approval, (ii) other regulatory approvals (including expiration of the applicable Hart-Scott-Rodino (“HSR”) waiting period) and (iii) satisfaction of other customary closing conditions.
On November 30, 2018, Nexstar received committed financing up to a maximum of $6.4 billion from a group of commercial banks to provide the debt financing to consummate the merger and the refinancing of certain of the existing indebtedness of Tribune and related transactions. See Note 3 for additional information on the merger agreement and Note 7 for information with respect to the Company’s other debt transactions during the three months ended March 31, 2019.
Interim Financial Statements
The Condensed Consolidated Financial Statements as of March 31, 2019 and for the three months ended March 31, 2019 and 2018 are unaudited. However, in the opinion of management, such financial statements include all adjustments (consisting solely of normal recurring adjustments) necessary for the fair statement of the financial information included herein in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The preparation of the Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the period. Actual results could differ from those estimates. Results of operations for interim periods are not necessarily indicative of results for the full year. These Condensed Consolidated Financial Statements should be read in conjunction with the Condensed Consolidated Financial Statements and related Notes included in Nexstar’s Annual Report on Form 10-K for the year ended December 31, 2018. The balance sheet as of December 31, 2018 has been derived from the audited financial statements as of that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements.
Variable Interest Entities
The Company may determine that an entity is a VIE as a result of local service agreements entered into with an entity. The term local service agreement generally refers to a contract between two separately owned television stations serving the same market, whereby the owner-operator of one station contracts with the owner-operator of the other station to provide it with administrative, sales and other services required for the operation of its station. Nevertheless, the owner-operator of each station retains control and responsibility for the operation of its station, including ultimate responsibility over all programming broadcast on its station. A local service agreement can be (1) a time brokerage agreement (“TBA”) or a local marketing agreement (“LMA”) which allows Nexstar to program most of a station’s broadcast time, sell the station’s advertising time and retain the advertising revenue generated in exchange for monthly payments, based on the station’s monthly operating expenses, (2) a shared services agreement (“SSA”) which 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 as described in the SSA, or (3) a joint sales agreement (“JSA”) which permits Nexstar to sell certain of the station’s advertising time and retain a percentage of the related revenue, as described in the JSA.
Consolidated VIEs
Nexstar consolidates entities in which Nexstar is deemed under U.S. GAAP to have controlling financial interests for financial reporting purposes as a result of (1) local service agreements Nexstar has with the stations owned by these entities, (2) Nexstar’s guarantees of the obligations incurred under certain VIEs’ senior secured credit facilities (see Note 7), (3) Nexstar having power over significant activities affecting these VIEs’ economic performance, including budgeting for advertising revenue, certain advertising sales and, in some cases, hiring and firing of sales force personnel and (4) purchase options granted by each VIE, exclusive of Marshall Broadcasting Group, Inc. (“Marshall”), which permit Nexstar to acquire the assets and assume the liabilities of each of the VIEs’ stations, subject to Federal Communications Commission (“FCC”) consent.
6
The following table summarizes the various loc
al service agreements Nexstar had in effect as of
March 31, 2019
with its consolidated VIEs:
Service Agreements
|
|
Owner
|
|
Full Power Stations
|
TBA Only
|
|
Mission Broadcasting, Inc. (“Mission”)
|
|
WFXP, KHMT and KFQX
|
LMA Only
|
|
WNAC, LLC
|
|
WNAC
|
|
|
54 Broadcasting, Inc. (“54 Broadcasting”)
|
|
KNVA
|
SSA & JSA
|
|
Mission
|
|
KJTL, KLRT, KASN, KOLR, KCIT, KAMC, KRBC, KSAN, WUTR, WAWV, WYOU, KODE, WTVO, KTVE, WTVW and WVNY
|
|
|
White Knight Broadcasting (“White Knight”)
|
|
WVLA, KFXK, KSHV
|
|
|
Shield Media, LLC (“Shield”)
|
|
WXXA and WLAJ
|
|
|
Vaughan Media, LLC (“Vaughan”)
|
|
WBDT, WYTV and KTKA
|
|
|
Marshall
|
|
KLJB, KPEJ and KMSS
|
SSA Only
|
|
Tamer Media, LLC (“Tamer”)
|
|
KWBQ, KASY and KRWB
|
Nexstar’s ability to receive cash from its VIEs is governed by the local service agreements. Under these agreements, Nexstar has received substantially all of the consolidated VIEs’ available cash, after satisfaction of operating costs and debt obligations. Nexstar anticipates it will continue to receive substantially all of the consolidated VIEs’ available cash, after satisfaction of operating costs and debt obligations. In compliance with FCC regulations for all the parties, each VIE maintains complete responsibility for and control over programming, finances, personnel and operations of its stations.
Nexstar had a variable interest in HITV License Subsidiary, Inc., the owner of station KHII, upon execution of a TBA effective November 1, 2018 and a purchase agreement to acquire certain assets of the station. On December 17, 2018, the FCC approved Nexstar’s acquisition of the station. Nexstar evaluated its business arrangement with KHII and determined that it was the primary beneficiary of the variable interest because it had the ultimate power to direct the activities that most significantly impact the economic performance of the station including developing the annual operating budget, selling advertising, and oversight and control of sales management personnel. Thus, Nexstar consolidated KHII as of December 17, 2018 under authoritative guidance related to the consolidation of VIEs. The assets that were consolidated into Nexstar included the license assets and network affiliation agreement of KHII but were attributed to the owner of the station at the time (noncontrolling interest). On January 28, 2019, Nexstar paid the former owner the remaining purchase price, acquired the noncontrolling interest in full and completed the acquisition. As of this date, KHII is no longer a VIE. See Note 3 for additional information.
The carrying amounts and classification of the assets and liabilities, excluding intercompany amounts, of the VIEs which have been included in the Condensed Consolidated Balance Sheets were as follows (in thousands):
|
|
March 31, 2019
|
|
|
December 31, 2018
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
14,389
|
|
|
$
|
19,060
|
|
Accounts receivable, net
|
|
|
25,991
|
|
|
|
22,725
|
|
Prepaid expenses and other current assets
|
|
|
2,523
|
|
|
|
4,423
|
|
Total current assets
|
|
|
42,903
|
|
|
|
46,208
|
|
Property and equipment, net
|
|
|
35,104
|
|
|
|
30,861
|
|
Goodwill
|
|
|
154,787
|
|
|
|
154,787
|
|
FCC licenses
|
|
|
151,808
|
|
|
|
157,658
|
|
Other intangible assets, net
|
|
|
86,791
|
|
|
|
89,225
|
|
Other noncurrent assets, net
|
|
|
21,141
|
|
|
|
8,073
|
|
Total assets
|
|
$
|
492,534
|
|
|
$
|
486,812
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Current portion of debt
|
|
$
|
54,039
|
|
|
$
|
54,616
|
|
Interest payable
|
|
|
1,206
|
|
|
|
345
|
|
Other current liabilities
|
|
|
21,206
|
|
|
|
17,594
|
|
Total current liabilities
|
|
|
76,451
|
|
|
|
72,555
|
|
Debt
|
|
|
243,083
|
|
|
|
243,717
|
|
Other noncurrent liabilities
|
|
|
37,571
|
|
|
|
27,542
|
|
Total liabilities
|
|
$
|
357,105
|
|
|
$
|
343,814
|
|
7
Non-Consolidated VIEs
Nexstar has an outsourcing agreement with Cunningham Broadcasting Corporation (“Cunningham”), which continues through December 31, 2020. Under the outsourcing agreement, Nexstar provides certain engineering, production, sales and administrative services for WYZZ, the FOX affiliate in the Peoria, Illinois market, through WMBD, the Nexstar television station in that market. During the term of the outsourcing agreement, Nexstar retains the broadcasting revenue and related expenses of WYZZ and is obligated to pay a monthly fee to Cunningham based on the combined operating cash flow of WMBD and WYZZ, as defined in the agreement.
Nexstar has determined that it has a variable interest in WYZZ. Nexstar has evaluated its arrangements with Cunningham and has determined that it is not the primary beneficiary of the variable interest in this station because it does not have the ultimate power to direct the activities that most significantly impact the station’s economic performance, including developing the annual operating budget, programming and oversight and control of sales management personnel. Therefore, Nexstar has not consolidated WYZZ under authoritative guidance related to the consolidation of VIEs. Under the local service agreement for WYZZ, Nexstar pays for certain operating expenses, and therefore may have unlimited exposure to any potential operating losses. Nexstar’s management believes that Nexstar’s minimum exposure to loss under the WYZZ agreement consists of the fees paid to Cunningham. Additionally, Nexstar indemnifies the owners of Cunningham from and against all liability and claims arising out of or resulting from its activities, acts or omissions in connection with the agreement. The maximum potential amount of future payments Nexstar could be required to make for such indemnification is undeterminable at this time. There were no significant transactions arising from Nexstar’s outsourcing agreement with Cunningham.
Leases
As discussed in Recent Accounting Pronouncements below, the Company adopted the FASB issued ASU No. 2016-02, Leases (Topic 842) and all related amendments. 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 flows 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, while the Company’s accounting for finance leases remained substantially unchanged. 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.
8
The Company recognized operating lease ROU assets on its Condensed Consolidated Balance Sheet as of January 1, 2019 of $112.8 million, inclusive of the present value of remaining future operating lease payments of $98.9 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 favorable (unfavorable) lease intangible assets, deferred rent, short-term and long-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.
|
|
|
|
|
|
ASC 842 Adoption Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
Present Value of Remaining Operating Lease
|
|
|
Reclassifications of Operating Lease Related Balance Sheet Items to Operating Lease ROU Assets
|
|
|
|
|
|
|
|
|
|
Impact on Consolidated Balance Sheets
|
|
December 31, 2018
|
|
|
Payments as of January 1, 2019
|
|
|
Net Favorable
Leases
|
|
|
Deferred Rent
|
|
|
Other
|
|
|
Total
Adjustments
|
|
|
January 1, 2019
|
|
Prepaid expenses and other
current assets
|
|
$
|
22,673
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(270
|
)
|
|
$
|
(270
|
)
|
|
$
|
22,403
|
|
Other intangible assets, net
|
|
|
1,491,923
|
|
|
|
-
|
|
|
|
(24,181
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(24,181
|
)
|
|
|
1,467,742
|
|
Other noncurrent assets, net
|
|
|
125,272
|
|
|
|
98,887
|
|
|
|
24,181
|
|
|
|
(9,748
|
)
|
|
|
(720
|
)
|
|
|
112,600
|
|
|
|
237,872
|
|
Total assets
|
|
|
7,062,030
|
|
|
|
98,887
|
|
|
|
-
|
|
|
|
(9,748
|
)
|
|
|
(990
|
)
|
|
|
88,149
|
|
|
|
7,150,179
|
|
Other current liabilities
|
|
|
12,352
|
|
|
|
17,367
|
|
|
|
-
|
|
|
|
(1,643
|
)
|
|
|
(431
|
)
|
|
|
15,293
|
|
|
|
27,645
|
|
Other noncurrent liabilities
|
|
|
270,084
|
|
|
|
81,520
|
|
|
|
-
|
|
|
|
(8,105
|
)
|
|
|
(559
|
)
|
|
|
72,856
|
|
|
|
342,940
|
|
Total liabilities
|
|
|
5,193,046
|
|
|
|
98,887
|
|
|
|
-
|
|
|
|
(9,748
|
)
|
|
|
(990
|
)
|
|
|
88,149
|
|
|
|
5,281,195
|
|
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, other current liabilities and other noncurrent liabilities in the accompanying Condensed Consolidated 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 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 it 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 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 records its finance leases within property, plant and equipment, other current liabilities and other noncurrent liabilities on the accompanying Condensed Consolidated Balance Sheets.
See Note 8 for additional disclosures on leases as of and for the three months ended March 31, 2019.
Financial Instruments
The carrying amounts of cash and cash equivalents, accounts receivable, broadcast rights, accounts payable, broadcast rights payable and accrued expenses approximate fair value due to their short-term nature.
See Note 7 for fair value disclosures related to the Company’s debt.
9
Income Per Share
Basic income per share is computed by dividing the net income by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed using the weighted-average number of common shares and potentially dilutive common shares outstanding during the period. Potentially dilutive common shares are calculated using the treasury stock method. They consist of stock options and restricted stock units outstanding during the period and reflect the potential dilution that could occur if common shares were issued upon exercise of stock options and vesting of restricted stock units. The following table shows the amounts used in computing the Company’s diluted shares (in thousands):
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2019
|
|
|
2018
|
|
Weighted average shares outstanding - basic
|
|
|
45,785
|
|
|
|
46,075
|
|
Dilutive effect of equity incentive plan instruments
|
|
|
1,999
|
|
|
|
1,610
|
|
Weighted average shares outstanding - diluted
|
|
|
47,784
|
|
|
|
47,685
|
|
Stock options and restricted stock units to acquire a weighted average of 30,000 shares and 76,000 shares for the three months ended March 31, 2019 and 2018, respectively, of Class A common stock were excluded from the computation of diluted earnings per share because their impact would have been anti-dilutive.
Basis of Presentation
Certain prior year financial statement amounts have been reclassified to conform to the current year presentation. These reclassifications had no effect on net income or stockholders’ equity as previously reported.
Recent Accounting Pronouncements
New Accounting Standards Adopted
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The Company adopted this standard and all related amendments effective January 1, 2019 using the optional transition method. The standard had a material impact on the Company’s Condensed Consolidated Balance Sheets but did not impact its operating results, cash flows or equity. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while our accounting for finance leases remained substantially unchanged. The adoption did not result in a cumulative impact on retained earnings as of January 1, 2019. See Leases above for the Company’s updated accounting policy and Note 8 for expanded disclosures.
New Accounting Standards Not Yet Adopted
In June 2016, the FASB issued ASU No. 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. In November 2018, the FASB issued ASU No. 2018-19 to clarify the scope of the guidance in the amendments in ASU 2016-13. 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. Early adoption is permitted for annual periods beginning after December 15, 2018, and interim periods within those fiscal years. The Company is currently evaluating the impact of adopting ASU 2016-13 on its Condensed Consolidated 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 Condensed Consolidated Financial Statements.
10
In August 2018, the FASB issued ASU
2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20) (“ASU 2018-14”). ASU 2018-14 removes certain disclosures that are not considered cost beneficial, clarifies certain required disclosures and adds additional disclosur
es. The amendments in ASU 2018-14 are effective for fiscal years ending after December 15, 2020, and early adoption is permitted. The updated standard should be applied on a retrospective basis. The Company is currently evaluating the impact of adopting AS
U 2018-14 on its Condensed Consolidated Financial Statements.
In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities (“ASU 2018-17”). The amendments in ASU 2018-17 for determining whether a decision-making fee is a variable interest require reporting entities to consider indirect interests held through related parties under common control on a proportional basis rather than as the equivalent of a direct interest in its entirety (as currently required in GAAP). Therefore, these amendments likely will result in more decision makers not having a variable interest through their decision-making arrangements. The amendments in ASU 2018-17 are effective for interim and annual reporting periods beginning after December 15, 2019, and early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2018-17 on its Consolidated Financial Statements.
3. Acquisitions and Dispositions
Merger Agreement with Tribune
On November 30, 2018, Nexstar entered into a definitive merger agreement with Tribune to acquire Tribune’s outstanding equity for $46.50 per share in a cash transaction. All equity-based awards of Tribune that are outstanding prior to the merger will vest in full and will be converted into the right to receive the same cash consideration. The estimated total purchase price is valued at $6.4 billion, consisting of the merger cash consideration and the refinancing of Tribune's outstanding debt. Tribune shareholders will be entitled to additional cash consideration of approximately $0.30 per share per month if the transaction has not closed by August 31, 2019, pro-rated for partial months and less an adjustment for any dividends declared on or after September 1, 2019. Transaction costs relating to this proposed acquisition, including legal and professional fees of $4.1 million, were expensed as incurred during the three months ended March 31, 2019. No costs were incurred during the three months ended March 31, 2018.
The merger agreement contains certain termination rights for both Nexstar and Tribune. If the merger agreement is terminated in connection with Tribune entering into a definitive agreement with respect to a superior proposal, as well as under certain other circumstances, the termination fee payable by Tribune to Nexstar will be $135 million. Either party may terminate the merger agreement if the merger is not consummated on or before an end date of November 30, 2019, with an automatic extension to February 29, 2020, if necessary to obtain regulatory approval under circumstances specified in the merger agreement.
The merger has been approved by the boards of directors of both companies and the stockholders of Tribune and is projected to close in the third quarter of 2019, subject to (i) FCC approval, (ii) other regulatory approvals (including expiration of the applicable HSR waiting period) and (iii) satisfaction of other customary closing conditions. The merger does not require approval of our stockholders and is not subject to any financing contingency. On November 30, 2018, we received committed financing up to a maximum of
$6.4 billion from a group of commercial banks to provide the debt financing to consummate the merger and the refinancing of certain of the existing indebtedness of Tribune and related transactions.
Tribune is a diversified media and entertainment business, comprised of 41 owned and operated local television stations and one AM radio station. Nexstar and Tribune plan to divest certain of their stations in connection with the proposed merger in order to comply with FCC media ownership rules.
In connection with obtaining the HSR approval and the FCC approval, Nexstar agreed to divest one or more television stations in certain DMAs.
On March 20, 2019, Nexstar entered into definitive asset purchase agreements to sell a total of nineteen stations in fifteen markets. Under the terms of the agreements, TEGNA Inc. (“TEGNA”) will acquire eleven stations in eight markets and The E.W. Scripps Company (“Scripps”) will acquire eight stations in seven markets.
Under the terms of the asset purchase agreement with TEGNA, TEGNA will acquire substantially all of the assets of television broadcast stations (i) WTIC and WCCT in Hartford-New Haven, CT; (ii) WPMT in Harrisburg-Lancaster-Lebanon-York, PA; (iii) WATN and WLMT in Memphis, TN; (iv) WNEP in Wilkes Barre-Scranton, PA; (v) WOI and KCWI in Des Moines-Ames, IA; (vi) WZDX in Huntsville-Decatur (Florence), AL; (vii) WQAD in Davenport, IA-Rock Island-Moline, IL; and (viii) KFSM in Ft. Smith-Fayetteville-Springdale-Rogers, AR for cash consideration of $740 million (subject to customary purchase price adjustments).
11
Under the terms of the asset purchase agreement with Scripps, Scripps will acquire substantially all of the assets of television broadcast stations (i) KASW in Phoenix (Prescott), AZ; (ii) WPIX in New York, NY, (iii) WSFL-TV in Miami-Ft. Lauderdale, FL, (iv) KSTU in Salt Lake City, UT, (v) WTKR and WGNT in Norfolk-Portsmouth-Newport News, VA, (vi) WXMI in Grand Rapids-Kalamazoo-Battle Creek, MI and (vii) WTVR-TV in Richmond-Petersburg, VA for cash consideration of $580 million (subject to customary purchase price adjustments). WPIX, WSFL and KASW are being divested in order to bring Nexstar into compliance with the FCC’s national ownership cap.
On April 8, 2019, Nexstar entered into a definitive asset purchase agreement to sell to Circle City Broadcasting I, Inc., a newly-formed minority-led broadcast company managed by DuJuan McCoy, two stations in Indianapolis, IN -- WISH, the CW affiliate, and WNDY, the MyNetwork TV affiliate -- for $42.5 million in cash.
The consummation of each divestiture transaction is subject to the satisfaction or waiver of certain customary conditions, including, among others, (i) the closing of the transactions contemplated by the Tribune Merger Agreement, (ii) the receipt of approval from the FCC and the expiration or termination of any waiting period applicable to such transaction under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and (iii) the absence of certain legal impediments to the consummation of such transaction.
The consummation of each divestiture transaction is expected to occur simultaneously with the closing of the Nexstar/Tribune merger.
KHII
KHII operated under a TBA with Nexstar that began on November 1, 2018. On December 17, 2018, Nexstar became the primary beneficiary of its variable interest in KHII and its satellite stations and consolidated the assets that Nexstar agreed to acquire as of this date, all of which were attributed to noncontrolling interest.
On January 28, 2019, Nexstar completed its acquisition of KHII and paid the remaining purchase price of $6.4 million, funded by cash on hand. Accordingly, this final payment and the previous deposit of $0.1 million were utilized by Nexstar to acquire in full the noncontrolling interest at KHII of $6.5 million. As of January 28, 2019, the TBA was terminated and KHII is no longer a VIE.
4. Intangible Assets and Goodwill
Intangible assets subject to amortization consisted of the following (in thousands):
|
|
Estimated
|
|
March 31, 2019
|
|
|
December 31, 2018
|
|
|
|
useful life,
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
in years
|
|
Gross
|
|
|
Amortization
|
|
|
Net
|
|
|
Gross
|
|
|
Amortization
|
|
|
Net
|
|
Network affiliation agreements
|
|
15
|
|
$
|
1,977,825
|
|
|
$
|
(604,193
|
)
|
|
$
|
1,373,632
|
|
|
$
|
1,977,825
|
|
|
$
|
(575,860
|
)
|
|
$
|
1,401,965
|
|
Other definite-lived intangible assets
|
|
1-20
|
|
|
221,581
|
|
|
|
(163,184
|
)
|
|
|
58,397
|
|
|
|
246,137
|
|
|
|
(156,179
|
)
|
|
|
89,958
|
|
Other intangible assets
|
|
|
|
$
|
2,199,406
|
|
|
$
|
(767,377
|
)
|
|
$
|
1,432,029
|
|
|
$
|
2,223,962
|
|
|
$
|
(732,039
|
)
|
|
$
|
1,491,923
|
|
The following table presents the Company’s estimate of amortization expense for the remainder of 2019, each of the five succeeding years ended December 31 and thereafter for definite-lived intangible assets as of March 31, 2019 (in thousands):
Remainder of 2019
|
|
$
|
106,823
|
|
2020
|
|
|
131,361
|
|
2021
|
|
|
115,913
|
|
2022
|
|
|
113,645
|
|
2023
|
|
|
112,348
|
|
2024
|
|
|
111,837
|
|
Thereafter
|
|
|
740,102
|
|
|
|
$
|
1,432,029
|
|
12
The amounts recorded to goodwill and FCC licenses were as follows (in thousands):
|
|
Goodwill
|
|
|
FCC Licenses
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
Gross
|
|
|
Impairment
|
|
|
Net
|
|
|
Gross
|
|
|
Impairment
|
|
|
Net
|
|
Balances as of December 31, 2018
|
|
$
|
2,257,774
|
|
|
$
|
(89,820
|
)
|
|
$
|
2,167,954
|
|
|
$
|
1,825,678
|
|
|
$
|
(47,410
|
)
|
|
$
|
1,778,268
|
|
Balances as of March 31, 2019
|
|
$
|
2,257,774
|
|
|
$
|
(89,820
|
)
|
|
$
|
2,167,954
|
|
|
$
|
1,825,678
|
|
|
$
|
(47,410
|
)
|
|
$
|
1,778,268
|
|
Indefinite-lived intangible assets are not subject to amortization but are tested for impairment annually or whenever events or changes in circumstances indicate that such assets might be impaired.
During the three months ended March 31, 2019,
the Company did not identify any events that would trigger impairment assessment.
5. Accrued Expenses
Accrued expenses consisted of the following (in thousands):
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2019
|
|
|
2018
|
|
Compensation and related taxes
|
|
$
|
47,935
|
|
|
$
|
44,269
|
|
Network affiliation fees
|
|
|
19,189
|
|
|
|
21,916
|
|
Capital expenditures
|
|
|
26,135
|
|
|
|
18,273
|
|
Other
|
|
|
65,722
|
|
|
|
59,392
|
|
|
|
$
|
158,981
|
|
|
$
|
143,850
|
|
6. Retirement and Postretirement Plans
The Company has a funded, qualified non-contributory defined benefit retirement plan which covers certain employees and former employees. Additionally, there are non-contributory unfunded supplemental executive retirement and ERISA excess plans which supplement the coverage available to certain executives. All of these retirement plans are frozen. The Company also has a retiree medical savings account plan which reimburses eligible retired employees for certain medical expenses and an unfunded plan that provides certain health and life insurance benefits to retired employees who were hired prior to 1992. Nexstar recognizes the underfunded status of these plan liabilities on its Condensed Consolidated Balance Sheets. The funded status of a plan represents the difference between the fair value of plan assets and the related plan projected benefit obligation. Changes in the funded status are recognized through comprehensive income in the year in which the changes occur.
The following table provides the components of net periodic benefit cost (credit) for the Company’s pension and other postretirement benefit plans (“OPEB”) (in thousands):
|
|
Three Months Ended
|
|
|
Three Months Ended
|
|
|
|
March 31, 2019
|
|
|
March 31, 2018
|
|
|
|
Pension Benefits
|
|
|
OPEB
|
|
|
Pension Benefits
|
|
|
OPEB
|
|
Interest cost
|
|
$
|
3,875
|
|
|
$
|
200
|
|
|
$
|
3,350
|
|
|
$
|
150
|
|
Expected return on plan assets
|
|
|
(5,475
|
)
|
|
|
-
|
|
|
|
(6,450
|
)
|
|
|
-
|
|
Net periodic benefit (income) cost
|
|
$
|
(1,600
|
)
|
|
$
|
200
|
|
|
$
|
(3,100
|
)
|
|
$
|
150
|
|
The Company has no required contributions to its qualified retirement plan in 2019. Payments to fund the obligations under the remaining plans are considered contributions and are expected to be less than $6.0 million in 2019.
13
7. Debt
Long-term debt consisted of the following (in thousands):
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2019
|
|
|
2018
|
|
Term loans, net of financing costs and discount of $34,287 and $37,679, respectively
|
|
$
|
2,319,077
|
|
|
$
|
2,407,490
|
|
|
Revolving loans
|
|
|
5,628
|
|
|
|
5,628
|
|
6.125% Senior unsecured notes due 2022, net of financing costs of $1,442 and $1,556,
respectively
|
|
|
273,558
|
|
|
|
273,444
|
|
5.875% Senior unsecured notes due 2022, plus premium of $5,784 and $6,233, respectively
|
|
|
405,784
|
|
|
|
406,233
|
|
5.625% Senior unsecured notes due 2024, net of financing costs of $11,343 and $11,792,
respectively
|
|
|
888,657
|
|
|
|
888,208
|
|
|
|
|
3,892,704
|
|
|
|
3,981,003
|
|
Less: current portion
|
|
|
(95,516
|
)
|
|
|
(96,093
|
)
|
|
|
$
|
3,797,188
|
|
|
$
|
3,884,910
|
|
2019 Transactions
During the three months ended March 31, 2019, Nexstar prepaid a total of $80.0 million in principal balance under its term loans, funded by cash on hand. This resulted in a loss on extinguishment of debt of $1.7 million, representing write-offs of unamortized debt financing costs and discounts.
During the three months ended March 31, 2019, the Company also repaid scheduled maturities of $11.8 million of its term loans.
On April 29, 2019, Nexstar prepaid $
30.0
million of the outstanding principal balance under its term loans, funded by cash on hand.
Unused Commitments and Borrowing Availability
The Company had $166.4 million of total unused revolving loan commitments under its senior secured credit facilities, all of which was available for borrowing, based on the covenant calculations as of March 31, 2019. The Company’s ability to access funds under its senior secured credit facilities depends, in part, on its compliance with certain financial covenants. As of March 31, 2019, the Company was in compliance with its financial covenants.
On November 30, 2018, Nexstar received committed financing up to a maximum of $
6.4
billion from a group of commercial banks to provide the debt financing to consummate its proposed merger with Tribune and the refinancing of certain of the existing indebtedness of Tribune and related transactions. The merger has been approved by the boards of directors of both companies and is projected to close in the third quarter of 2019, subject to FCC approval, other regulatory approvals and satisfaction of other customary closing conditions. See Note 3 for additional information.
Collateralization and Guarantees of Debt
The Company’s credit facilities described above are collateralized by a security interest in substantially all the combined assets, excluding FCC licenses and the other assets of consolidated VIEs unavailable to creditors of Nexstar (See Note 2). Nexstar guarantees full payment of all obligations incurred under the Mission, Marshall and Shield senior secured credit facilities in the event of their default. Mission, a consolidated VIE, and Nexstar Digital LLC (“Nexstar Digital”), a wholly-owned subsidiary of Nexstar, are both guarantors of Nexstar’s senior secured credit facility. Mission is also a guarantor of Nexstar’s 6.125% senior secured notes due 2022 (the “6.125% Notes”) and the 5.625% Notes due 2024 but does not guarantee Nexstar’s 5.875% Senior Notes due 2022 (the “5.875% Notes”). Nexstar Digital does not guarantee any of the notes. Marshall and Shield are not guarantors of any debt within the group.
In consideration of Nexstar’s guarantee of the Mission senior secured credit facility, Mission has granted Nexstar purchase options to acquire the assets and assume the liabilities of each Mission station, subject to FCC consent. 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. The Company expects these option agreements to be renewed upon expiration.
14
Debt Covenants
The Nexstar credit agreement (senior secured credit facility) 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 the Company. The Mission, Marshall and Shield amended credit agreements do not contain financial covenant ratio requirements but do provide for default in the event Nexstar does not comply with all covenants contained in its credit agreement. As of March 31, 2019, the Company was in compliance with its financial covenants.
Fair Value of Debt
The aggregate carrying amounts and estimated fair values of the Company’s debt were as follows (in thousands):
|
|
March 31, 2019
|
|
|
December 31, 2018
|
|
|
|
Carrying
|
|
|
Fair
|
|
|
Carrying
|
|
|
Fair
|
|
|
|
Amount
|
|
|
Value
|
|
|
Amount
|
|
|
Value
|
|
Term loans
(1)
|
|
$
|
2,319,077
|
|
|
$
|
2,313,395
|
|
|
$
|
2,407,490
|
|
|
$
|
2,389,439
|
|
Revolving loans
(1)
|
|
|
5,628
|
|
|
|
5,603
|
|
|
|
5,628
|
|
|
|
5,528
|
|
6.125% Senior unsecured notes
(2)
|
|
|
273,558
|
|
|
|
279,125
|
|
|
|
273,444
|
|
|
|
275,688
|
|
5.875% Senior unsecured notes
(2)
|
|
|
405,784
|
|
|
|
410,000
|
|
|
|
406,233
|
|
|
|
397,000
|
|
5.625% Senior unsecured notes
(2)
|
|
|
888,657
|
|
|
|
913,500
|
|
|
|
888,208
|
|
|
|
837,000
|
|
(1)
|
The fair value of senior secured credit facilities is computed based on borrowing rates currently available to the Company 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.
|
(2)
|
The fair value of the Company’s fixed rate debt is estimated based on bid prices obtained from an investment banking firm that regularly makes a market for these financial instruments. These fair value measurements are considered Level 2, as quoted market prices are available for low volume trading of these securities.
|
8. Leases
The Company as a Lessee
The Company has operating and finance leases for office space, vehicles, tower facilities, antenna sites, studio and other real estate properties and equipment. The Company’s leases have remaining lease terms of one year to 95 years, some of which may include options to extend the leases from two to 99 years, and some of which may include options to terminate the leases within one year. The depreciable lives of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.
Lease contracts that the Company has executed but which have not yet commenced as of March 31, 2019 were not material and are excluded.
(In thousands)
|
|
Balance Sheet Classification
|
|
March 31, 2019
|
|
Operating leases
|
|
|
|
|
|
|
Operating lease right-of-use assets, net
|
|
Other noncurrent assets, net
|
|
$
|
108,668
|
|
Current lease liabilities
|
|
Other current liabilities
|
|
$
|
17,022
|
|
Noncurrent lease liabilities
|
|
Other noncurrent liabilities
|
|
$
|
77,368
|
|
|
|
|
|
|
|
|
Finance leases
|
|
|
|
|
|
|
Finance lease right-of-use assets, net of accumulated depreciation of $2,075
|
|
Property, plant and equipment, net
|
|
$
|
8,914
|
|
Current lease liabilities
|
|
Other current liabilities
|
|
$
|
837
|
|
Noncurrent lease liabilities
|
|
Other noncurrent liabilities
|
|
$
|
15,866
|
|
Operating lease expense for the three months ended March 31, 2019 was $5.5 million, inclusive of immaterial short-term and variable lease costs. During the three months ended March 31, 2019, $3.1 million of operating lease cost is included in Direct operating expenses, excluding depreciation and amortization and $2.4 million of operating lease cost is included in Selling, general and administrative expenses, excluding depreciation and amortization in the accompanying Condensed Consolidated Statements of Operations.
The depreciation expense and interest expense associated with finance leases during the three months ended March 31, 2019 were not material.
15
Other information related to leases as of March 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
|
|
$
|
5,714
|
|
Operating cash flows from finance leases
|
|
|
240
|
|
Financing cash flows from finance leases
|
|
|
200
|
|
Weighted Average Remaining Lease Term
|
|
|
|
|
Operating leases
|
|
7.2 years
|
|
Finance leases
|
|
12.3 years
|
|
Weighted Average Discount Rate
|
|
|
|
|
Operating leases
|
|
|
5.2
|
%
|
Finance leases
|
|
|
5.7
|
%
|
Future minimum lease payments under non-cancellable leases as of March 31, 2019 were as follows (in millions):
|
|
Operating Leases
|
|
|
Finance Leases
|
|
Remainder of 2019
|
|
$
|
16,227
|
|
|
$
|
1,325
|
|
2020
|
|
|
19,629
|
|
|
|
1,795
|
|
2021
|
|
|
16,606
|
|
|
|
1,843
|
|
2022
|
|
|
13,653
|
|
|
|
1,803
|
|
2023
|
|
|
11,182
|
|
|
|
1,818
|
|
Thereafter
|
|
|
37,685
|
|
|
|
15,202
|
|
Total future minimum lease payments
|
|
|
114,982
|
|
|
|
23,786
|
|
Less imputed interest
|
|
|
(20,592
|
)
|
|
|
(7,083
|
)
|
Total
|
|
$
|
94,390
|
|
|
$
|
16,703
|
|
The Company as a Lessor
The Company has various arrangements for 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.
9. Common Stock
On April 26, 2018, Nexstar’s Board of Directors approved an additional $200 million increase in Nexstar’s share repurchase authorization to repurchase its Class A common stock. As of March 31, 2019, the remaining available amount under the share repurchase authorization was $201.9 million, inclusive of the 2018 additional authorization and the remaining balance under the prior authorization. There were no share repurchases of Nexstar’s Class A common stock during the three months ended March 31, 2019.
Share repurchases may be made from time to time in open market transactions, block trades or in private transactions. There is no minimum number of shares that Nexstar is required to repurchase and the repurchase program may be suspended or discontinued at any time without prior notice.
During the three months ended March 31, 2019 and 2018, Nexstar declared and paid dividends of $20.6 million ($0.45 per share) and $17.3 million ($0.375 per share), respectively.
10. Stock-Based Compensation Plans
During the three months ended March 31, 2019, Nexstar granted 340,500 time-based restricted stock units and 113,334 performance-based restricted stock units to employees and non-employee directors with an estimated fair value of $33.0 million and $9.6 million, respectively.
During the three months ended March 31, 2018, Nexstar granted 285,000 time-based restricted stock units and 142,500 performance-based restricted stock units to employees and non-employee directors with an estimated fair value of $19.0 million and $9.6 million, respectively. The time-based restricted stock units vest over a range of three to four years from the date of the award. The performance-based restricted stock units vest over a range of three to four years from the date of the award, subject to the achievement of pre-established Company performance metrics
.
16
11. Income Taxes
Income tax expense was $16.4 million for the three months ended March 31, 2019 compared to $17.5 million for the same period in 2018. The effective tax rates were 22.4% and 27.0% for each of the respective periods. The decrease in the effective tax rate between the two periods was primarily due to a $3.5 million increase in
the deduction for excess tax benefits related to stock-based compensation, resulting in a decrease in the effective tax rate of 4.7%.
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 and the stations to which it provides services. 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, the stations to which it provides services 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).
The 2016 Ownership Order reinstated a previously adopted 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. Parties to JSAs entered into prior to March 31, 2014 were permitted to continue to operate under those JSAs until September 30, 2025.
Nexstar and other 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, (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 denied a mandamus petition which had sought to stay their effectiveness. The Reconsideration Order remains subject to appeals before that court.
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 due in the second quarter of 2019.
17
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,” 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, which became effective again on June 15, 2017. A federal court of appeals dismissed a petition for review of the discount’s reinstatement in July 2018. In December 2017, the FCC initiated a comprehensive rulemaking to evaluate the UHF discount together with the national ownership limit. Comments and reply comments were filed in 2018, and the proceeding remains open. Nexstar is in compliance with the 39% national cap limitation.
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 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 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. Ten of Nexstar’s stations and one station owned by Vaughan, a consolidated VIE, accepted bids to relinquish their spectrum. On July 21, 2017, the Company received $478.6 million of gross proceeds from the FCC related to the incentive auction. These were recorded as liability to surrender spectrum asset pending the relinquishment of spectrum assets or conversion from UHF to VHF. Of the 11 total stations that accepted bids, one station went off the air in November 2017 and the associated spectrum asset and liability to surrender spectrum, both amounting to $34.6 million, were derecognized in the fourth quarter of 2017. The station that went off the air is not expected to have a significant impact on the Company’s future financial results because it was located in a remote rural area of the country and the Company has other stations which serve the same area. Of the remaining ten stations, eight have ceased broadcasting on their previous channels and implemented channel sharing agreements. As a result, the associated spectrum asset and liability to surrender spectrum, both amounting to $314.1 million, were derecognized in the second quarter of 2018. The remaining two stations will move to VHF channels and must vacate their current channels by September 2019 and May 2020, respectively.
The majority of the Company’s television stations did not accept bids to relinquish their television channels. Of those stations, 61 full power stations owned by Nexstar and 17 full power stations owned by VIEs have been assigned to 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 newly assigned channels and must cease operating on their former channels on a rolling 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. This allocation includes $1 billion added to the TV Broadcaster Relocation Fund as part of the Consolidated Appropriations Act, 2018. This fund is not available to reimburse repacking costs for stations which are surrendering their spectrum and entering into channel sharing relationships. Broadcasters and MVPDs have submitted estimates to the FCC of their reimbursable costs. As of February 6, 2019, these costs were approximately $1.9 billion, and the FCC has indicated that it expects those costs to rise. During the three months ended March 31, 2019 and 2018, the Company spent a total of $14.7 million and $5.4 million, respectively, in capital expenditures related to station repack which were recorded as assets under the property and equipment caption in the accompanying Condensed Consolidated Balance Sheets. During the three months ended March 31, 2019 and 2018, the Company received $14.2 million and $1.4 million, respectively, in reimbursements from the FCC related to these expenditures which were recorded as operating income in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. The Company cannot determine if the FCC will be able to fully reimburse 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.
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 on its business.
18
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 if they are adopted.
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, online video distributors (“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.
13. Commitments and Contingencies
Guarantees of Mission, Marshall and Shield Debt
Nexstar and its subsidiaries guarantee full payment of all obligations incurred under the Mission, Marshall and Shield senior secured credit facilities. In the event that Mission, Marshall or Shield is unable to repay amounts due, Nexstar will be obligated to repay such amounts. The maximum potential amount of future payments that Nexstar would be required to make under these guarantees would be generally limited to the borrowings outstanding. As of March 31, 2019, Mission had a maximum commitment of $227.2 million under its senior secured credit facility, of which $224.2 million of debt was outstanding, Marshall had used all of its commitment and had outstanding debt obligations of $50.5 million and Shield had also used all of its commitment and had outstanding obligations of $22.4 million. Based on the terms of the credit agreements, Mission’s outstanding debt is due January 2024, Marshall’s outstanding debt is due December 2019 and Shield’s outstanding debt is due October 2023. Marshall’s debt is included in the current liabilities in the accompanying Condensed Consolidated Balance Sheets. The other debts guaranteed by Nexstar are long-term debt obligations of Mission and Shield.
Indemnification Obligations
In connection with certain agreements that the Company enters into in the normal course of its business, including local service agreements, business acquisitions and borrowing arrangements, the Company enters into contractual arrangements under which the Company agrees to indemnify the third-party to such arrangement from losses, claims and damages incurred by the indemnified party for certain events as defined within the particular contract. Such indemnification obligations may not be subject to maximum loss clauses and the maximum potential amount of future payments the Company could be required to make under these indemnification arrangements may be unlimited. Historically, payments made related to these indemnifications have been 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 its 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.
19
On March 16, 2018, a group of companies including Nexstar (the “Defendants”) received a Civil Investigative Demand from the Antitrust Division of the DOJ regarding an investiga
tion into the exchange of certain information related to the pacing of sales related to the same period in the prior year among broadcast stations in some DMAs in alleged violation of federal antitrust law. Other Defendants entered into a proposed consent
decree with the DOJ on November 6, 2018. Without admitting any wrongdoing, Nexstar agreed to settle the matter with the DOJ on December 5, 2018. The DOJ filed an amended complaint adding Nexstar to the consent decree on December 13, 2018. The consent decre
e, which settles any claims by the government of alleged violations of federal antitrust laws in connection with the alleged information sharing, does not include any financial penalty. Pursuant to the consent decree, Nexstar has agreed not to exchange cer
tain non-public information with other stations operating in the same DMA and to implement certain antitrust compliance measures and to monitor and report on compliance with the consent decree.
On July 30, 2018, Clay, Massey & Associates, PC filed an antitrust class action complaint in the U.S. District Court for the Northern District of Illinois on behalf of itself and all others similarly situated against Gray Television, Inc., Hearst Communications, Nexstar Media Group, Inc., Tegna Inc., Tribune Media Company and Sinclair Broadcast Group, Inc. The lawsuit alleges unlawful coordination between broadcast television station owners to artificially increase prices of television spot advertisements in violation of Section 1 of the Sherman Act (15 U.S.C. §1). Nexstar has since been named in 15 similar complaints, including ten in the Northern District of Illinois, three in the Southern District of New York and two in the District of Maryland. Each complaint includes similar allegations and claims a violation of Section 1 of the Sherman Act. One, filed in the District of Maryland, also alleges violations of state antitrust and consumer protection statutes and a claim for unjust enrichment.
On October 9, 2018, these cases were consolidated in a multi-district litigation in the District Court for the Northern District of Illinois captioned
In Re: Local TV Advertising Antitrust Litigation
, No. 1:18-cv-06785 (“MDL Litigation”). On January 23, 2019, the Court in the MDL Litigation appointed plaintiffs’ lead and liaison counsel. The MDL Litigation is ongoing. The Plaintiffs’ Consolidated Complaint was filed on April 3, 2019; Defendants’ Motion to Dismiss must be filed by June 5, 2019. Nexstar denies the allegations against it and will defend its advertising practices as necessary.
14. Segment Data
The Company evaluates the performance of its operating segments based on net revenue and operating income. The Company’s broadcast segment includes television stations and related community-focused websites that Nexstar owns, operates, programs or provides sales and other services to in various markets across the United States. The other activities of the Company include corporate functions, digital businesses and eliminations.
Segment financial information is included in the following tables for the periods presented (in thousands):
Three Months Ended March 31, 2019
|
|
Broadcast
|
|
|
Other
|
|
|
Consolidated
|
|
Net revenue
|
|
$
|
599,183
|
|
|
$
|
27,464
|
|
|
$
|
626,647
|
|
Depreciation
|
|
|
23,627
|
|
|
|
3,810
|
|
|
|
27,437
|
|
Amortization of intangible assets
|
|
|
30,845
|
|
|
|
5,893
|
|
|
|
36,738
|
|
Income (loss) from operations
|
|
|
168,500
|
|
|
|
(41,426
|
)
|
|
|
127,074
|
|
Three Months Ended March 31, 2018
|
|
Broadcast
|
|
|
Other
|
|
|
Consolidated
|
|
Net revenue
|
|
$
|
576,985
|
|
|
$
|
38,351
|
|
|
$
|
615,336
|
|
Depreciation
|
|
|
21,400
|
|
|
|
4,414
|
|
|
|
25,814
|
|
Amortization of intangible assets
|
|
|
32,053
|
|
|
|
4,249
|
|
|
|
36,302
|
|
Income (loss) from operations
|
|
|
152,567
|
|
|
|
(34,951
|
)
|
|
|
117,616
|
|
As of March 31, 2019
|
|
Broadcast
|
|
|
Other
|
|
|
Consolidated
|
|
Goodwill
|
|
$
|
2,125,479
|
|
|
$
|
42,475
|
|
|
$
|
2,167,954
|
|
Assets
|
|
|
6,681,378
|
|
|
|
415,808
|
|
|
|
7,097,186
|
|
As of December 31, 2018
|
|
Broadcast
|
|
|
Other
|
|
|
Consolidated
|
|
Goodwill
|
|
$
|
2,125,479
|
|
|
$
|
42,475
|
|
|
$
|
2,167,954
|
|
Assets
|
|
|
6,622,604
|
|
|
|
439,426
|
|
|
|
7,062,030
|
|
20
The following tables present the disaggregation of the Company’s revenue for the periods presented (in thousands):
Three Months Ended March 31, 2019
|
|
Broadcast
|
|
|
|
|
Other
|
|
|
Consolidated
|
|
Local
|
|
$
|
188,166
|
|
|
|
|
$
|
-
|
|
|
$
|
188,166
|
|
National
|
|
|
63,678
|
|
|
|
|
|
-
|
|
|
|
63,678
|
|
Political
|
|
|
1,307
|
|
|
|
|
|
-
|
|
|
|
1,307
|
|
Retransmission compensation
|
|
|
313,974
|
|
|
|
|
|
-
|
|
|
|
313,974
|
|
Digital
|
|
|
25,386
|
|
|
|
|
|
27,449
|
|
|
|
52,835
|
|
Other
|
|
|
3,849
|
|
|
|
|
|
15
|
|
|
|
3,864
|
|
Trade revenue
|
|
|
2,823
|
|
|
|
|
|
-
|
|
|
|
2,823
|
|
Total revenue
|
|
$
|
599,183
|
|
|
|
|
$
|
27,464
|
|
|
$
|
626,647
|
|
Three Months Ended March 31, 2018
|
|
Broadcast
|
|
|
Other
|
|
|
Consolidated
|
|
Local
|
|
$
|
193,268
|
|
|
$
|
-
|
|
|
$
|
193,268
|
|
National
|
|
|
67,045
|
|
|
|
-
|
|
|
|
67,045
|
|
Political
|
|
|
9,266
|
|
|
|
-
|
|
|
|
9,266
|
|
Retransmission compensation
|
|
|
275,941
|
|
|
|
-
|
|
|
|
275,941
|
|
Digital
|
|
|
24,468
|
|
|
|
38,336
|
|
|
|
62,804
|
|
Other
|
|
|
4,154
|
|
|
|
15
|
|
|
|
4,169
|
|
Trade revenue
|
|
|
2,843
|
|
|
|
-
|
|
|
|
2,843
|
|
Total revenue
|
|
$
|
576,985
|
|
|
$
|
38,351
|
|
|
$
|
615,336
|
|
The Company is a television broadcasting and digital media company focused on the acquisition, development and operation of television stations and interactive community websites and digital media services in medium-sized markets in the United States.
Advertising revenue (local, national, political and digital) 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 OVDs in return for the consent to the retransmission of the signals of its television stations.
Retransmission compensation is recognized at the point in time the broadcast signal is delivered to the distributors and is based on
a price per subscrib
er.
15. Condensed Consolidating Financial Information
The following condensed consolidating financial information presents the financial position, results of operations and cash flows of the Company, including its wholly-owned subsidiaries and its consolidated VIEs. This information is presented in lieu of separate financial statements and other related disclosures pursuant to Regulation S-X Rule 3-10 of the Securities Exchange Act of 1934, as amended, “Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered.”
The Nexstar column presents the parent company’s financial information, excluding consolidating entities. The Nexstar Broadcasting column presents the financial information of Nexstar Broadcasting, Inc. (“Nexstar Broadcasting”), a wholly-owned subsidiary of Nexstar and issuer of the 5.625% Notes, the 6.125% Notes and the 5.875% Notes. The Mission column presents the financial information of Mission, an entity which Nexstar Broadcasting is required to consolidate as a VIE (See Note 2). The Non-Guarantors column presents the combined financial information of Nexstar Digital, a wholly-owned subsidiary of Nexstar, and other VIEs consolidated by Nexstar Broadcasting (See Note 2).
Nexstar Broadcasting’s outstanding 5.625% Notes and 6.125% Notes are fully and unconditionally guaranteed, jointly and severally, by Nexstar and Mission, subject to certain customary release provisions. These notes are not guaranteed by any other entities.
Nexstar Broadcasting’s outstanding 5.875% Notes are fully and unconditionally guaranteed, jointly and severally, by Nexstar, subject to certain customary release provisions. These notes are not guaranteed by any other entities.
The indentures governing the 5.625% Notes and the 6.125% Notes are not registered but require consolidating information that presents the guarantor information.
21
As discussed in Note 2, the Company adopted ASU No. 2016-02 Leases (Topic 842) and all related amendments using the optional transition method. As a result, 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 a
doption of ASC 842. The standard had a material impact on our Condensed Consolidated Balance Sheets but did not have an impact on our Condensed Consolidated Income Statements. The most significant impact was the recognition of ROU assets and lease liabilit
ies for operating leases, while our accounting for finance leases remained substantially unchanged. Comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods.
22
CONDENSED CONSOLIDATING BALANCE SHEET
As of March 31, 2019
(in thousands)
|
|
|
|
|
|
Nexstar
|
|
|
|
|
|
|
Non-
|
|
|
|
|
|
|
Consolidated
|
|
|
|
Nexstar
|
|
|
Broadcasting
|
|
|
Mission
|
|
|
Guarantors
|
|
|
Eliminations
|
|
|
Company
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
-
|
|
|
$
|
89,909
|
|
|
$
|
5,583
|
|
|
$
|
33,099
|
|
|
$
|
-
|
|
|
$
|
128,591
|
|
Accounts receivable
|
|
|
-
|
|
|
|
471,876
|
|
|
|
15,448
|
|
|
|
53,201
|
|
|
|
-
|
|
|
|
540,525
|
|
Amounts due from consolidated entities
|
|
|
-
|
|
|
|
90,173
|
|
|
|
77,158
|
|
|
|
-
|
|
|
|
(167,331
|
)
|
|
|
-
|
|
Spectrum asset
|
|
|
-
|
|
|
|
52,002
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
52,002
|
|
Other current assets
|
|
|
-
|
|
|
|
18,830
|
|
|
|
721
|
|
|
|
2,850
|
|
|
|
-
|
|
|
|
22,401
|
|
Total current assets
|
|
|
-
|
|
|
|
722,790
|
|
|
|
98,910
|
|
|
|
89,150
|
|
|
|
(167,331
|
)
|
|
|
743,519
|
|
Investments in subsidiaries
|
|
|
1,180,364
|
|
|
|
108,884
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,289,248
|
)
|
|
|
-
|
|
Amounts due from consolidated entities
|
|
|
761,209
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(761,209
|
)
|
|
|
-
|
|
Property and equipment, net
|
|
|
-
|
|
|
|
702,372
|
|
|
|
20,700
|
|
|
|
16,979
|
|
|
|
(70
|
)
|
|
|
739,981
|
|
Goodwill
|
|
|
-
|
|
|
|
1,970,692
|
|
|
|
33,187
|
|
|
|
164,075
|
|
|
|
-
|
|
|
|
2,167,954
|
|
FCC licenses
|
|
|
-
|
|
|
|
1,626,460
|
|
|
|
43,102
|
|
|
|
108,706
|
|
|
|
-
|
|
|
|
1,778,268
|
|
Other intangible assets, net
|
|
|
-
|
|
|
|
1,312,565
|
|
|
|
13,193
|
|
|
|
106,271
|
|
|
|
-
|
|
|
|
1,432,029
|
|
Other noncurrent assets
|
|
|
-
|
|
|
|
206,551
|
|
|
|
11,343
|
|
|
|
17,541
|
|
|
|
-
|
|
|
|
235,435
|
|
Total assets
|
|
$
|
1,941,573
|
|
|
$
|
6,650,314
|
|
|
$
|
220,435
|
|
|
$
|
502,722
|
|
|
$
|
(2,217,858
|
)
|
|
$
|
7,097,186
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current portion of debt
|
|
$
|
-
|
|
|
$
|
41,477
|
|
|
$
|
2,285
|
|
|
$
|
51,754
|
|
|
$
|
-
|
|
|
$
|
95,516
|
|
Accounts payable
|
|
|
-
|
|
|
|
58,018
|
|
|
|
1,392
|
|
|
|
12,875
|
|
|
|
-
|
|
|
|
72,285
|
|
Amounts due to consolidated entities
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
167,332
|
|
|
|
(167,332
|
)
|
|
|
-
|
|
Liability to surrender spectrum asset
|
|
|
-
|
|
|
|
52,002
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
52,002
|
|
Other current liabilities
|
|
|
524
|
|
|
|
174,079
|
|
|
|
6,834
|
|
|
|
28,698
|
|
|
|
-
|
|
|
|
210,135
|
|
Total current liabilities
|
|
|
524
|
|
|
|
325,576
|
|
|
|
10,511
|
|
|
|
260,659
|
|
|
|
(167,332
|
)
|
|
|
429,938
|
|
Debt
|
|
|
-
|
|
|
|
3,554,105
|
|
|
|
221,956
|
|
|
|
21,127
|
|
|
|
-
|
|
|
|
3,797,188
|
|
Amounts due to consolidated entities
|
|
|
-
|
|
|
|
536,797
|
|
|
|
-
|
|
|
|
224,621
|
|
|
|
(761,418
|
)
|
|
|
-
|
|
Deferred tax liabilities
|
|
|
62
|
|
|
|
628,780
|
|
|
|
-
|
|
|
|
8,184
|
|
|
|
-
|
|
|
|
637,026
|
|
Other noncurrent liabilities
|
|
|
-
|
|
|
|
303,384
|
|
|
|
11,563
|
|
|
|
19,077
|
|
|
|
-
|
|
|
|
334,024
|
|
Total liabilities
|
|
|
586
|
|
|
|
5,348,642
|
|
|
|
244,030
|
|
|
|
533,668
|
|
|
|
(928,750
|
)
|
|
|
5,198,176
|
|
Total
Nexstar Media
Group,
Inc.
stockholders'
equity (deficit)
|
|
|
1,940,987
|
|
|
|
1,301,672
|
|
|
|
(23,595
|
)
|
|
|
(42,651
|
)
|
|
|
(1,289,108
|
)
|
|
|
1,887,305
|
|
Noncontrolling interests in consolidated
variable interest entities
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
11,705
|
|
|
|
-
|
|
|
|
11,705
|
|
Total liabilities and stockholders' equity (deficit)
|
|
$
|
1,941,573
|
|
|
$
|
6,650,314
|
|
|
$
|
220,435
|
|
|
$
|
502,722
|
|
|
$
|
(2,217,858
|
)
|
|
$
|
7,097,186
|
|
23
CONDENSED CONSOLIDATING BALANCE SHEET
As of December 31, 2018
(in thousands)
|
|
|
|
|
|
Nexstar
|
|
|
|
|
|
|
Non-
|
|
|
|
|
|
|
Consolidated
|
|
|
|
Nexstar
|
|
|
Broadcasting
|
|
|
Mission
|
|
|
Guarantors
|
|
|
Eliminations
|
|
|
Company
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
-
|
|
|
$
|
105,665
|
|
|
$
|
10,798
|
|
|
$
|
28,652
|
|
|
$
|
-
|
|
|
$
|
145,115
|
|
Accounts receivable
|
|
|
-
|
|
|
|
466,270
|
|
|
|
12,857
|
|
|
|
68,158
|
|
|
|
-
|
|
|
|
547,285
|
|
Amounts due from consolidated entities
|
|
|
-
|
|
|
|
88,987
|
|
|
|
77,521
|
|
|
|
-
|
|
|
|
(166,508
|
)
|
|
|
-
|
|
Spectrum asset
|
|
|
-
|
|
|
|
52,002
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
52,002
|
|
Other current assets
|
|
|
-
|
|
|
|
17,420
|
|
|
|
1,655
|
|
|
|
3,598
|
|
|
|
-
|
|
|
|
22,673
|
|
Total current assets
|
|
|
-
|
|
|
|
730,344
|
|
|
|
102,831
|
|
|
|
100,408
|
|
|
|
(166,508
|
)
|
|
|
767,075
|
|
Investments in subsidiaries
|
|
|
1,119,605
|
|
|
|
108,884
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,228,489
|
)
|
|
|
-
|
|
Amounts due from consolidated entities
|
|
|
782,365
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(782,365
|
)
|
|
|
-
|
|
Property and equipment, net
|
|
|
-
|
|
|
|
696,910
|
|
|
|
19,867
|
|
|
|
14,833
|
|
|
|
(72
|
)
|
|
|
731,538
|
|
Goodwill
|
|
|
-
|
|
|
|
1,970,692
|
|
|
|
33,187
|
|
|
|
164,075
|
|
|
|
-
|
|
|
|
2,167,954
|
|
FCC licenses
|
|
|
-
|
|
|
|
1,620,610
|
|
|
|
43,102
|
|
|
|
114,556
|
|
|
|
-
|
|
|
|
1,778,268
|
|
Other intangible assets, net
|
|
|
-
|
|
|
|
1,365,159
|
|
|
|
13,712
|
|
|
|
113,052
|
|
|
|
-
|
|
|
|
1,491,923
|
|
Other noncurrent assets
|
|
|
-
|
|
|
|
116,660
|
|
|
|
4,421
|
|
|
|
4,191
|
|
|
|
-
|
|
|
|
125,272
|
|
Total assets
|
|
$
|
1,901,970
|
|
|
$
|
6,609,259
|
|
|
$
|
217,120
|
|
|
$
|
511,115
|
|
|
$
|
(2,177,434
|
)
|
|
$
|
7,062,030
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current portion of debt
|
|
$
|
-
|
|
|
$
|
41,477
|
|
|
$
|
2,285
|
|
|
$
|
52,331
|
|
|
$
|
-
|
|
|
$
|
96,093
|
|
Accounts payable
|
|
|
-
|
|
|
|
47,574
|
|
|
|
2,357
|
|
|
|
17,897
|
|
|
|
-
|
|
|
|
67,828
|
|
Liability to surrender spectrum asset
|
|
|
-
|
|
|
|
52,002
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
52,002
|
|
Amounts due to consolidated entities
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
166,508
|
|
|
|
(166,508
|
)
|
|
|
-
|
|
Other current liabilities
|
|
|
299
|
|
|
|
155,023
|
|
|
|
4,441
|
|
|
|
28,486
|
|
|
|
-
|
|
|
|
188,249
|
|
Total current liabilities
|
|
|
299
|
|
|
|
296,076
|
|
|
|
9,083
|
|
|
|
265,222
|
|
|
|
(166,508
|
)
|
|
|
404,172
|
|
Debt
|
|
|
-
|
|
|
|
3,641,193
|
|
|
|
222,354
|
|
|
|
21,363
|
|
|
|
-
|
|
|
|
3,884,910
|
|
Amounts due to consolidated entities
|
|
|
|
|
|
|
559,057
|
|
|
|
-
|
|
|
|
223,519
|
|
|
|
(782,576
|
)
|
|
|
-
|
|
Deferred tax liabilities
|
|
|
62
|
|
|
|
624,869
|
|
|
|
-
|
|
|
|
8,949
|
|
|
|
-
|
|
|
|
633,880
|
|
Other noncurrent liabilities
|
|
|
-
|
|
|
|
255,228
|
|
|
|
6,820
|
|
|
|
8,036
|
|
|
|
-
|
|
|
|
270,084
|
|
Total liabilities
|
|
|
361
|
|
|
|
5,376,423
|
|
|
|
238,257
|
|
|
|
527,089
|
|
|
|
(949,084
|
)
|
|
|
5,193,046
|
|
Total Nexstar Media Group, Inc.
stockholders' equity (deficit)
|
|
|
1,901,609
|
|
|
|
1,232,836
|
|
|
|
(21,137
|
)
|
|
|
(32,184
|
)
|
|
|
(1,228,350
|
)
|
|
|
1,852,774
|
|
Noncontrolling interests in consolidated
variable interest entities
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
16,210
|
|
|
|
-
|
|
|
|
16,210
|
|
Total liabilities and stockholders' equity (deficit)
|
|
$
|
1,901,970
|
|
|
$
|
6,609,259
|
|
|
$
|
217,120
|
|
|
$
|
511,115
|
|
|
$
|
(2,177,434
|
)
|
|
$
|
7,062,030
|
|
24
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
Three Months Ended March 31, 2019
(in thousands)
|
|
|
|
|
|
Nexstar
|
|
|
|
|
|
|
Non-
|
|
|
|
|
|
|
Consolidated
|
|
|
|
Nexstar
|
|
|
Broadcasting
|
|
|
Mission
|
|
|
Guarantors
|
|
|
Eliminations
|
|
|
Company
|
|
Net broadcast revenue (including trade)
|
|
$
|
-
|
|
|
$
|
567,780
|
|
|
$
|
19,407
|
|
|
$
|
39,460
|
|
|
$
|
-
|
|
|
$
|
626,647
|
|
Revenue between consolidated entities
|
|
|
8,418
|
|
|
|
22,233
|
|
|
|
7,762
|
|
|
|
17,717
|
|
|
|
(56,130
|
)
|
|
|
-
|
|
Net revenue
|
|
|
8,418
|
|
|
|
590,013
|
|
|
|
27,169
|
|
|
|
57,177
|
|
|
|
(56,130
|
)
|
|
|
626,647
|
|
Operating expenses (income):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct operating expenses, excluding
depreciation and amortization
|
|
|
-
|
|
|
|
240,195
|
|
|
|
12,036
|
|
|
|
42,499
|
|
|
|
(1,867
|
)
|
|
|
292,863
|
|
Selling, general, and administrative expenses,
excluding depreciation and amortization
|
|
|
9,748
|
|
|
|
137,269
|
|
|
|
991
|
|
|
|
10,027
|
|
|
|
(15,675
|
)
|
|
|
142,360
|
|
Local service agreement fees between
consolidated entities
|
|
|
-
|
|
|
|
16,354
|
|
|
|
14,575
|
|
|
|
7,659
|
|
|
|
(38,588
|
)
|
|
|
-
|
|
Amortization of broadcast rights
|
|
|
-
|
|
|
|
13,351
|
|
|
|
383
|
|
|
|
628
|
|
|
|
-
|
|
|
|
14,362
|
|
Amortization of intangible assets
|
|
|
-
|
|
|
|
28,663
|
|
|
|
519
|
|
|
|
7,556
|
|
|
|
-
|
|
|
|
36,738
|
|
Depreciation
|
|
|
-
|
|
|
|
25,227
|
|
|
|
608
|
|
|
|
1,602
|
|
|
|
-
|
|
|
|
27,437
|
|
Reimbursement from the FCC related to station repack
|
|
|
-
|
|
|
|
(9,685
|
)
|
|
|
(1,536
|
)
|
|
|
(2,966
|
)
|
|
|
-
|
|
|
|
(14,187
|
)
|
Total operating expenses
|
|
|
9,748
|
|
|
|
451,374
|
|
|
|
27,576
|
|
|
|
67,005
|
|
|
|
(56,130
|
)
|
|
|
499,573
|
|
(Loss) income from operations
|
|
|
(1,330
|
)
|
|
|
138,639
|
|
|
|
(407
|
)
|
|
|
(9,828
|
)
|
|
|
-
|
|
|
|
127,074
|
|
Interest expense, net
|
|
|
-
|
|
|
|
(49,208
|
)
|
|
|
(2,886
|
)
|
|
|
(863
|
)
|
|
|
-
|
|
|
|
(52,957
|
)
|
Loss on extinguishment of debt
|
|
|
-
|
|
|
|
(1,698
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,698
|
)
|
Pension and other postretirement plans credit, net
|
|
|
-
|
|
|
|
1,400
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,400
|
|
Other expenses
|
|
|
-
|
|
|
|
(475
|
)
|
|
|
-
|
|
|
|
(16
|
)
|
|
|
-
|
|
|
|
(491
|
)
|
Equity in income of subsidiaries
|
|
|
60,758
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(60,758
|
)
|
|
|
-
|
|
Income (loss) before income taxes
|
|
|
59,428
|
|
|
|
88,658
|
|
|
|
(3,293
|
)
|
|
|
(10,707
|
)
|
|
|
(60,758
|
)
|
|
|
73,328
|
|
Income tax benefit (expense)
|
|
|
312
|
|
|
|
(19,822
|
)
|
|
|
835
|
|
|
|
2,234
|
|
|
|
-
|
|
|
|
(16,441
|
)
|
Net income (loss)
|
|
|
59,740
|
|
|
|
68,836
|
|
|
|
(2,458
|
)
|
|
|
(8,473
|
)
|
|
|
(60,758
|
)
|
|
|
56,887
|
|
Net income attributable to noncontrolling interests
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,995
|
)
|
|
|
-
|
|
|
|
(1,995
|
)
|
Net income (loss) attributable to Nexstar
|
|
$
|
59,740
|
|
|
$
|
68,836
|
|
|
$
|
(2,458
|
)
|
|
$
|
(10,468
|
)
|
|
$
|
(60,758
|
)
|
|
$
|
54,892
|
|
25
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
Three Months Ended March 31, 2018
(in thousands)
|
|
|
|
|
|
Nexstar
|
|
|
|
|
|
|
Non-
|
|
|
|
|
|
|
Consolidated
|
|
|
|
Nexstar
|
|
|
Broadcasting
|
|
|
Mission
|
|
|
Guarantors
|
|
|
Eliminations
|
|
|
Company
|
|
Net broadcast revenue
|
|
$
|
-
|
|
|
$
|
549,681
|
|
|
$
|
16,102
|
|
|
$
|
49,498
|
|
|
$
|
-
|
|
|
$
|
615,281
|
|
Revenue between consolidated entities
|
|
|
-
|
|
|
|
20,256
|
|
|
|
8,483
|
|
|
|
16,705
|
|
|
|
(45,389
|
)
|
|
|
55
|
|
Net revenue
|
|
|
-
|
|
|
|
569,937
|
|
|
|
24,585
|
|
|
|
66,203
|
|
|
|
(45,389
|
)
|
|
|
615,336
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct operating expenses, excluding
depreciation and amortization
|
|
|
-
|
|
|
|
221,179
|
|
|
|
10,147
|
|
|
|
48,991
|
|
|
|
(1,354
|
)
|
|
|
278,963
|
|
Selling, general, and administrative expenses,
excluding depreciation and amortization
|
|
|
-
|
|
|
|
136,185
|
|
|
|
1,216
|
|
|
|
11,306
|
|
|
|
(6,802
|
)
|
|
|
141,905
|
|
Local service agreement fees between
consolidated entities
|
|
|
-
|
|
|
|
16,976
|
|
|
|
13,250
|
|
|
|
7,007
|
|
|
|
(37,233
|
)
|
|
|
-
|
|
Amortization of broadcast rights
|
|
|
-
|
|
|
|
14,995
|
|
|
|
412
|
|
|
|
693
|
|
|
|
-
|
|
|
|
16,100
|
|
Amortization of intangible assets
|
|
|
-
|
|
|
|
29,845
|
|
|
|
544
|
|
|
|
5,913
|
|
|
|
-
|
|
|
|
36,302
|
|
Depreciation
|
|
|
-
|
|
|
|
23,461
|
|
|
|
517
|
|
|
|
1,836
|
|
|
|
-
|
|
|
|
25,814
|
|
Reimbursement from the FCC related to station repack
|
|
|
-
|
|
|
|
(1,364
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,364
|
)
|
Total operating expenses
|
|
|
-
|
|
|
|
441,277
|
|
|
|
26,086
|
|
|
|
75,746
|
|
|
|
(45,389
|
)
|
|
|
497,720
|
|
Income (loss) from operations
|
|
|
-
|
|
|
|
128,660
|
|
|
|
(1,501
|
)
|
|
|
(9,543
|
)
|
|
|
-
|
|
|
|
117,616
|
|
Interest expense, net
|
|
|
-
|
|
|
|
(51,034
|
)
|
|
|
(2,611
|
)
|
|
|
(944
|
)
|
|
|
-
|
|
|
|
(54,589
|
)
|
Loss on extinguishment of debt
|
|
|
-
|
|
|
|
(1,005
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,005
|
)
|
Pension and other postretirement plans credit, net
|
|
|
-
|
|
|
|
2,950
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,950
|
|
Other (expense) income
|
|
|
-
|
|
|
|
(129
|
)
|
|
|
-
|
|
|
|
2
|
|
|
|
-
|
|
|
|
(127
|
)
|
Equity in income of subsidiaries
|
|
|
52,032
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(52,032
|
)
|
|
|
-
|
|
Income (loss) before income taxes
|
|
|
52,032
|
|
|
|
79,442
|
|
|
|
(4,112
|
)
|
|
|
(10,485
|
)
|
|
|
(52,032
|
)
|
|
|
64,845
|
|
Income tax (expense) benefit
|
|
|
-
|
|
|
|
(20,450
|
)
|
|
|
981
|
|
|
|
1,965
|
|
|
|
-
|
|
|
|
(17,504
|
)
|
Net income (loss)
|
|
|
52,032
|
|
|
|
58,992
|
|
|
|
(3,131
|
)
|
|
|
(8,520
|
)
|
|
|
(52,032
|
)
|
|
|
47,341
|
|
Net loss attributable to noncontrolling interests
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
781
|
|
|
|
-
|
|
|
|
781
|
|
Net income (loss) attributable to Nexstar
|
|
$
|
52,032
|
|
|
$
|
58,992
|
|
|
$
|
(3,131
|
)
|
|
$
|
(7,739
|
)
|
|
$
|
(52,032
|
)
|
|
$
|
48,122
|
|
26
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
Three Months Ended March 31, 2019
(in thousands)
|
|
|
|
|
|
Nexstar
|
|
|
|
|
|
|
Non-
|
|
|
|
|
|
|
Consolidated
|
|
|
|
Nexstar
|
|
|
Broadcasting
|
|
|
Mission
|
|
|
Guarantors
|
|
|
Eliminations
|
|
|
Company
|
|
Cash flows from operating activities
|
|
$
|
-
|
|
|
$
|
124,410
|
|
|
$
|
(5,289
|
)
|
|
$
|
5,468
|
|
|
$
|
-
|
|
|
$
|
124,589
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
-
|
|
|
|
(24,586
|
)
|
|
|
(891
|
)
|
|
|
(3,102
|
)
|
|
|
-
|
|
|
|
(28,579
|
)
|
Spectrum repack reimbursements
|
|
|
-
|
|
|
|
9,685
|
|
|
|
1,536
|
|
|
|
2,966
|
|
|
|
-
|
|
|
|
14,187
|
|
Other investing activities
|
|
|
-
|
|
|
|
639
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
639
|
|
Net cash used in investing activities
|
|
|
-
|
|
|
|
(14,262
|
)
|
|
|
645
|
|
|
|
(136
|
)
|
|
|
-
|
|
|
|
(13,753
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayments of long-term debt
|
|
|
-
|
|
|
|
(90,370
|
)
|
|
|
(571
|
)
|
|
|
(864
|
)
|
|
|
-
|
|
|
|
(91,805
|
)
|
Common stock dividends paid
|
|
|
(20,581
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(20,581
|
)
|
Inter-company payments
|
|
|
28,430
|
|
|
|
(28,430
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Purchase of noncontrolling interest from a consolidated variable interest entity
|
|
|
-
|
|
|
|
(6,393
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(6,393
|
)
|
Other financing activities
|
|
|
(7,849
|
)
|
|
|
(711
|
)
|
|
|
-
|
|
|
|
(21
|
)
|
|
|
-
|
|
|
|
(8,581
|
)
|
Net cash used in financing activities
|
|
|
-
|
|
|
|
(125,904
|
)
|
|
|
(571
|
)
|
|
|
(885
|
)
|
|
|
-
|
|
|
|
(127,360
|
)
|
Net increase in cash,
cash equivalents and restricted cash
|
|
|
-
|
|
|
|
(15,756
|
)
|
|
|
(5,215
|
)
|
|
|
4,447
|
|
|
|
-
|
|
|
|
(16,524
|
)
|
Cash, cash equivalents and restricted
cash at beginning of period
|
|
|
-
|
|
|
|
105,665
|
|
|
|
10,798
|
|
|
|
28,652
|
|
|
|
-
|
|
|
|
145,115
|
|
Cash, cash equivalents and restricted
cash at end of period
|
|
$
|
-
|
|
|
$
|
89,909
|
|
|
$
|
5,583
|
|
|
$
|
33,099
|
|
|
$
|
-
|
|
|
$
|
128,591
|
|
27
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
Three Months Ended March 31, 2018
(in thousands)
|
|
|
|
|
|
Nexstar
|
|
|
|
|
|
|
Non-
|
|
|
|
|
|
|
Consolidated
|
|
|
|
Nexstar
|
|
|
Broadcasting
|
|
|
Mission
|
|
|
Guarantors
|
|
|
Eliminations
|
|
|
Company
|
|
Cash flows from operating activities
|
|
$
|
-
|
|
|
$
|
171,164
|
|
|
$
|
(4,060
|
)
|
|
$
|
12,261
|
|
|
$
|
-
|
|
|
$
|
179,365
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
-
|
|
|
|
(18,266
|
)
|
|
|
(830
|
)
|
|
|
(1,996
|
)
|
|
|
-
|
|
|
|
(21,092
|
)
|
Deposits and payments for acquisitions
|
|
|
-
|
|
|
|
(82,790
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(82,790
|
)
|
Other investing activities
|
|
|
-
|
|
|
|
2,847
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,847
|
|
Net cash used in investing activities
|
|
|
-
|
|
|
|
(98,209
|
)
|
|
|
(830
|
)
|
|
|
(1,996
|
)
|
|
|
-
|
|
|
|
(101,035
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from long-term debt
|
|
|
-
|
|
|
|
44,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
44,000
|
|
Repayments of long-term debt
|
|
|
-
|
|
|
|
(73,061
|
)
|
|
|
(578
|
)
|
|
|
(940
|
)
|
|
|
-
|
|
|
|
(74,579
|
)
|
Common stock dividends paid
|
|
|
(17,288
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(17,288
|
)
|
Purchase of treasury stock
|
|
|
(33,820
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(33,820
|
)
|
Inter-company payments
|
|
|
53,773
|
|
|
|
(53,773
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Other financing activities
|
|
|
(2,665
|
)
|
|
|
(735
|
)
|
|
|
-
|
|
|
|
226
|
|
|
|
-
|
|
|
|
(3,174
|
)
|
Net cash provided by (used in)
financing activities
|
|
|
-
|
|
|
|
(83,569
|
)
|
|
|
(578
|
)
|
|
|
(714
|
)
|
|
|
-
|
|
|
|
(84,861
|
)
|
Net (decrease) increase in cash,
cash equivalents and restricted cash
|
|
|
-
|
|
|
|
(10,614
|
)
|
|
|
(5,468
|
)
|
|
|
9,551
|
|
|
|
-
|
|
|
|
(6,531
|
)
|
Cash, cash equivalents and restricted
cash at beginning of period
|
|
|
-
|
|
|
|
90,860
|
|
|
|
9,524
|
|
|
|
15,268
|
|
|
|
-
|
|
|
|
115,652
|
|
Cash, cash equivalents and restricted
cash at end of period
|
|
$
|
-
|
|
|
$
|
80,246
|
|
|
$
|
4,056
|
|
|
$
|
24,819
|
|
|
$
|
-
|
|
|
$
|
109,121
|
|
28
16. Subsequent Events
On April 25, 2019, Nexstar’s Board of Directors declared a quarterly cash dividend of $0.45 per share of its Class A common stock. The dividend is payable on May 24, 2019 to stockholders of record on May 10, 2019.
On April 29, 2019, Nexstar prepaid $30.0 million of the outstanding principal balance under its term loans, funded by cash on hand.
29