Nexstar Broadcasting Group Reports Record Fourth Quarter Operating Results

Nexstar Broadcasting Group, Inc. (NASDAQ: NXST) today reported record financial results for the fourth quarter ended December 31, 2008.

Summary 2008 Fourth Quarter Highlights:

Net revenue for the quarter ended December 31, 2008 rose 12.3% to $80.3 million from $71.6 million in the fourth quarter of 2007. Broadcast cash flow totaled $34.7 million in the fourth quarter of 2008, a 23.3% increase from $28.2 million in the same period in 2007. EBITDA increased 25.6% to $30.3 million for the fourth quarter of 2008, compared with $24.1 million in the fourth quarter of 2007, while fourth quarter 2008 free cash flow totaled $7.3 million.

Nexstar’s fourth quarter 2008 net income and net income per basic and diluted share was approximately $5.4 million and $0.19, respectively, excluding any fourth quarter non-cash impairment charge, which could be significant. The non-cash fourth quarter impairment charge, and its related tax impact have not been finalized at this time and are therefore not reflected in the attached unaudited financial information. Our final results will be included in the Company’s Annual Report on Form 10-K to be filed with the Securities and Exchange Commission.

Summary 2008 Full Year Highlights:

For the 2008 full year, net revenue was $284.9 million, an $18.1 million increase over $266.8 million for 2007. Broadcast cash flow in 2008 was $111.7 million compared to $98.5 million for 2007. EBITDA totaled $96.2 million for 2008 compared to $85.1 million for 2007, while free cash flow totaled $26.3 million in 2008.

Reflecting a total of approximately $55.7 million of non-cash contract termination fees and non-cash impairment charges, Nexstar’s full year 2008 net loss and net loss per basic and diluted share was approximately $51.4 million and $1.81, respectively, excluding any fourth quarter non-cash impairment charge, which could be significant. The non-cash fourth quarter impairment charge, and its related tax impact have not been finalized at this time and are therefore not reflected in the attached unaudited financial information. Our final results will be included in the Company’s Annual Report on Form 10-K to be filed with the Securities and Exchange Commission.

CEO Comment

Perry A. Sook, Chairman, President and Chief Executive Officer of Nexstar Broadcasting Group, Inc., commented, "Nexstar’s double digit fourth quarter net revenue growth highlights strong year-over-year increases in political, retransmission consent and e-MEDIA revenues which helped to offset the impact of the current economy and soft general advertising environment. Fourth quarter net revenue of $80.3 million included approximately $16.6 million of net political advertising revenue and full year 2008 net political advertising revenue reached $28.0 million, in line with our expectations. In 2008, e-MEDIA revenue increased 100% over 2007 levels while full year retransmission consent revenue rose 27% to $21.8 million.

"On February 19, Nexstar announced renewed and new multi-year retransmission consent agreements which will contribute more than $75 million in revenues to the Company over the lives of these agreements. Approximately one third of this revenue is expected to be realized in 2009.

"We are projecting another year of significant e-MEDIA revenue growth based on the full year benefits of approximately fifteen revenue generating applications that we are now offering across all markets in our platform. We’ll also launch Nexstar’s community portal e-MEDIA offerings in any new markets that we enter.

"Our pending and de-leveraging acquisitions of WCWJ-TV in Jacksonville, Florida and KARZ-TV in Little Rock, Arkansas will also contribute to offsetting the impact of lower political revenues and ongoing industry softness in 2009. In light of the current economic conditions and the absence of significant political revenues this year, Nexstar is taking steps to reduce expenses on all fronts at both the station and corporate levels.

"Fourth quarter and full year 2008 cap ex spending was approximately $12.7 million and $30.8 million, respectively, with approximately $10.8 million and $24.4 million of these respective amounts allocated to digital conversions. The Company will incur approximately $5.4 million of capital expenditures in early 2009 to complete the remaining stations’ digital television requirements.”

Outstanding Debt

The Company’s total net debt at December 31, 2008 was $646.3 million, compared to $665.0 million at December 31, 2007. The total net debt consists of $356.2 million of bank debt, $190.8 million of senior subordinated 7% notes, $37.3 million of senior subordinated 12% PIK notes and $77.8 million of 11.375% senior discount notes, less cash on hand of $15.8 million.

During the fourth quarter, the Company repurchased approximately $7.5 million of the 7% senior subordinated notes, resulting in a $2.9 million pre-tax gain. The purchase of these notes was funded with cash flows from operations.

As defined in the Company’s credit agreement, consolidated total net debt was $609.7 million at December 31, 2008. The Company’s total leverage ratio at December 31, 2008 was 6.18x compared to a permitted leverage covenant of 6.50x.

Total interest expense in the fourth quarter of 2008 was $12.4 million, compared to $13.8 million for the same period in 2007. Cash interest expense for the fourth quarter of 2008 was $10.7 million, compared to $10.0 million for the same period in 2007.

Debt Exchange

On February 27, 2009, Nexstar Broadcasting, Inc. ("Nexstar Broadcasting”), an indirect subsidiary of Nexstar Broadcasting Group, Inc., commenced an offer to exchange up to $143.6 million aggregate principal amount of its outstanding $191.51 million in aggregate principal amount of 7% Senior Subordinated Notes due 2014 (the "Old Notes”) in exchange for (i) up to $143.6 million in aggregate principal amount of Nexstar Broadcasting’s 7% Senior Subordinated PIK Notes due 2014 (the "New Notes”), to be guaranteed by each of the existing guarantors to the Old Notes, and (ii) cash. The exchange offer is being conducted upon the terms and subject to the conditions set forth in the Offering Memorandum dated February 27, 2009 and the related letter of transmittal.

The exchange offer is subject to certain conditions, including the minimum tender condition, that Nexstar Broadcasting receive valid tenders, not validly withdrawn, of at least $114.9 million of the aggregate principal amount of Old Notes. Documents relating to the exchange offer will only be distributed to holders of Old Notes who complete and return a letter of eligibility confirming that they are within the category of eligible investors for this private offer.

Pending Acquisition

On January 28, 2009, Nexstar Broadcasting Group entered into a definitive agreement to acquire the assets of WCWJ-TV, the CW affiliate serving the Jacksonville, Florida market, from Media General, Inc. This acquisition marks Nexstar’s entrée into the State of Florida and will represent the 52nd television station that the Company owns or for which it provides sales, programming or other services. Additionally, the Company’s acquisition of KARZ-TV (formerly KWBF-TV) in Little Rock, Arkansas, which was announced on October 7, 2008, was approved on February 26 by the bankruptcy court and closing will occur before the end of March.

Guidance

Given the uncertain economic environment, the Company has elected to discontinue the practice of providing quarterly guidance for net revenue, station operating expenses and corporate overhead.

Fourth Quarter Conference Call

Nexstar will host a conference call at 10:00 a.m. ET today. Senior management will discuss the financial results and host a question and answer session. A live audio webcast of the call will be accessible to the public on Nexstar’s web site, www.nexstar.tv. A recording of the webcast will subsequently be archived on the site. The dial in number for the audio conference call is 212/231-2926 (303/223-0118 for international callers); no access code is needed. A replay of the call will be available through March 10, 2009 by dialing 800/633-8284 (402/977-9140 for International callers) and entering access code 21415619.

Additional Information About the Debt Exchange

The New Notes have not been registered under the Securities Act of 1933, as amended (the "Securities Act”), or any state securities laws. Therefore, the New Notes may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and any applicable state securities laws. The exchange offer is only made, and copies of the offering documents will only be made available, (1) to holders of the Old Notes who have certified certain matters to Nexstar Broadcasting, including their status as "qualified institutional buyers” as defined in Rule 144A under the Securities Act, or (2) outside the United States, to holders of Old Notes who are non-U.S. persons in compliance with Regulation S under the Securities Act.

This announcement is neither an offer to purchase nor a solicitation of an offer to sell any securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering, solicitation or sale would be unlawful. No recommendation is made as to whether holders of Old Notes should tender their Old Notes.

Definitions and Disclosures Regarding non-GAAP Financial Information

Broadcast cash flow is calculated as income from operations, plus corporate expenses, depreciation, amortization of intangible assets and broadcast rights (excluding barter), non-cash contract termination fees, non-cash impairment charges, loss (gain) on asset exchange and loss (gain) on asset disposal, net, minus broadcast rights payments.

EBITDA is calculated as broadcast cash flow less corporate expenses.

Free cash flow is calculated as income from operations plus depreciation, amortization of intangible assets and broadcast rights (excluding barter), non-cash contract termination fees, non-cash impairment charges, loss (gain) on asset exchange, loss (gain) on asset disposal, net, and non-cash stock option expense, less payments for broadcast rights, cash interest expense, capital expenditures and net cash income taxes.

Broadcast cash flow, EBITDA and free cash flow results are non-GAAP financial measures. Nexstar believes the presentation of these non-GAAP measures are useful to investors because they are used by lenders to measure the Company’s ability to service debt; by industry analysts to determine the market value of stations and their operating performance; by management to identify the cash available to service debt, make strategic acquisitions and investments, maintain capital assets and fund ongoing operations and working capital needs; and, because they reflect the most up-to-date operating results of the stations inclusive of pending acquisitions, TBAs or LMAs. Management believes they also provide an additional basis from which investors can establish forecasts and valuations for the Company’s business. For a reconciliation of these non-GAAP financial measurements to the GAAP financial results cited in this news announcement, please see the supplemental tables at the end of this release.

The Company has also provided net income before the effect of impairment charges which is a non-GAAP financial measure. The non-cash impairment charge and related tax effects have not been finalized at this time and could be significant.

About Nexstar Broadcasting Group, Inc.

Upon the completion of announced transactions, Nexstar Broadcasting Group will own, operate, program or provide sales and other services to 52 television stations in 30 markets in the states of Illinois, Indiana, Maryland, Missouri, Montana, Texas, Pennsylvania, Louisiana, Arkansas, Alabama, New York and Florida. Nexstar’s television station group includes affiliates of NBC, CBS, ABC, FOX, MyNetworkTV and The CW and pro-forma for the completion of all announced transactions, reaches approximately 10 million U.S. television households or approximately 8.8% of all U.S. television households.

Forward-Looking Statements

This news release includes forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events. Forward-looking statements include information preceded by, followed by, or that includes the words "guidance," "believes," "expects," "anticipates," "could," or similar expressions. For these statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The forward-looking statements contained in this news release, concerning, among other things, changes in net revenue, cash flow and operating expenses, involve risks and uncertainties, and are subject to change based on various important factors, including the impact of changes in national and regional economies, our ability to service and refinance our outstanding debt, successful integration of acquired television stations (including achievement of synergies and cost reductions), pricing fluctuations in local and national advertising, future regulatory actions and conditions in the television stations' operating areas, competition from others in the broadcast television markets served by the Company, volatility in programming costs, the effects of governmental regulation of broadcasting, industry consolidation, technological developments and major world news events. Unless required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this news release might not occur. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this release. For more details on factors that could affect these expectations, please see our filings with the Securities and Exchange Commission.