UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC. 20549

Form 10-Q

For the quarterly period ended September 30, 2014

OR

For the transition period from            to           

Commission file number:          333-195850

MERCURY NEW HOLDCO, INC.

(Exact name of registrant as specified in its charter)

(804) 887-5000

(Registrant's telephone number, including area code)

N/A

(Former name, former address and former fiscal year,

if changed since last report.)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

     Yes            X                      No               

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

     Yes            X                      No               

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act).

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

     Yes            X                      No               

Indicate the number of shares outstanding of each of the issuer's classes of common stock as of October 31, 2014.

Common stock (no par value):          100

MERCURY NEW HOLDCO, INC.

TABLE OF CONTENTS

FORM 10-Q REPORT

September 30, 2014

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Mercury New Holdco, Inc.

CONSOLIDATED CONDENSED BALANCE SHEETS

(Unaudited, In thousands, except shares)

See accompanying notes.

Mercury New Holdco, Inc.

CONSOLIDATED CONDENSED BALANCE SHEETS

(Unaudited, In thousands, except shares)

LIABILITIES AND STOCKHOLDERS' EQUITY 

See accompanying notes.

Mercury New Holdco, Inc.

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited, In thousands, except per share amounts)

See accompanying notes.

Mercury New Holdco, Inc.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited, In thousands)

MERCURY NEW HOLDCO, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(Unaudited)

Note 1: Organization and Basis of Presentation

Organization

Mercury New Holdco, Inc.

Mercury New Holdco, Inc. (“New Holdco”), is a Virginia corporation and a direct, wholly owned subsidiary of Media General, Inc. (“Media General”). New Holdco was formed on March 19, 2014, solely to effect the combination of Media General and LIN Media LLC (“LIN”) by merging Mercury Merger Sub 1, Inc., its direct, wholly owned subsidiary, with and into Media General, and merging Mercury Merger Sub 2, LLC, its direct, wholly owned subsidiary, with and into LIN, in each case, as provided for in their merger agreement dated as of March 21, 2014, as amended on August 20, 2014. New Holdco has not commenced operations, has no significant assets or liabilities and has not conducted any material activities other than those incidental to its formation and matters contemplated by the merger agreement, as amended, from its March 19, 2014 date of incorporation through September 30, 2014.

Following the completion of the merger transaction, New Holdco will be the parent company of Media General and LIN and will be renamed “Media General, Inc.” The voting common stock of New Holdco is expected to be listed for trading on the NYSE under the symbol “MEG.” In the transaction contemplated by the merger agreement, as amended, Media General shareholders will receive one share of New Holdco for each share of Media General that they own upon closing. All LIN shareholders will receive for each LIN share that they own upon closing, at their election, $25.97 in cash or 1.4714 shares of New Holdco, subject to proration procedures described in the merger agreement, as amended. The maximum cash amount that will be paid to the LIN shareholders is $763 million.

Mercury Merger Sub 1, Inc.

Mercury Merger Sub 1, Inc. (“Merger Sub 1”) is a Virginia corporation and a direct, wholly owned subsidiary of New Holdco. Merger Sub 1 was formed solely for the purpose of consummating the merger of Merger Sub 1 with and into Media General, as provided for in the merger agreement. Merger Sub 1 has not carried on any activities incidental to its formation and activities undertaken in connect with the transactions contemplated by the merger agreement.

Mercury Merger Sub 2, LLC

Mercury Merger Sub 2, LLC (“Merger Sub 2”) is a Delaware limited liability company and a direct, wholly owned subsidiary of New Holdco. Merger Sub 2 was formed solely for the purpose of consummating the merger of Merger Sub 2 with and into LIN, as provided for in the merger agreement. Merger Sub 2 has not carried on any activities to date, except for activities incidental to its formation and activities undertaken in connection with the transactions contemplated by the merger agreement.

Basis of Presentation

The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States and with applicable quarterly reporting regulations of the Securities and Exchange Commission. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of interim financial information have been included.

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

New Holdco was formed on March 19, 2014, as a wholly owned subsidiary of Media General in conjunction with a merger agreement dated as of March 21, 2014, as amended on August 20, 2014. Following the closing of the merger transaction, New Holdco will be renamed Media General, Inc. and will be the parent company of both Media General and LIN. In the transaction, Media General shareholders will receive one share of New Holdco for each share of Media General that they own upon closing. All LIN shareholders will receive for each LIN share that they own upon closing, at their election, $25.97 in cash or 1.4714 shares of New Holdco, subject to proration procedures described in the merger agreement, as amended. The maximum cash amount that will be paid to the LIN shareholders is $763 million. It is anticipated that, upon the closing of the transaction, Media General’s former shareholders will own approximately 67%, and LIN’s former shareholders will own approximately 33%, of the fully diluted shares of the new holding company. The voting common stock of Media General trades, and after completion of the transaction, the voting common stock of New Holdco is expected to trade, on the New York Stock Exchange under the symbol “MEG.”

New Holdco has not commenced operations, has no significant assets or liabilities and has not conducted any material activities other than those incidental to its formation and matters contemplated by the merger agreement, as amended, from its March 19, 2014 date of incorporation through September 30, 2014.

* * * * * * * *

The statements above should be read together with the condensed consolidated financial statements. Certain statements in this quarterly report that are not historical facts are “forward-looking” statements, as that term is defined by the federal securities laws. Forward-looking statements include statements related to accounting estimates and assumptions, expectations regarding the pending merger, regulatory approvals and approval by shareholders and FCC approval of license applications. Forward-looking statements, including those which use words such as New Holdco “believes,” “anticipates,” “expects,” “estimates,” “intends,” “projects,” “plans,” “may” and similar words, including “outlook”, are made as of the date of this filing and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by such statements. The reader should understand that it is not possible to foresee or identify all risk factors. Consequently, any such list should not be considered a complete statement of all potential risks or uncertainties.

Various important factors could cause actual results to differ materially from New Holdco’s forward looking statements, estimates or projections including, without limitation:  failure to complete the merger transaction, the ability to satisfy debt obligations, regulatory approvals, changes in advertising demand, changes in economic conditions, failure to capture the expected synergies from the merger transaction, changes in consumer preferences for programming and delivery method, changes in relationships with broadcast networks, changes in relationships with cable and satellite providers, the performance of pension plan assets, health care cost trends, regulatory rulings including those related to ERISA and income tax law, natural disasters, the effects of retransmission agreements and integration efforts on New Holdco’s results of operations and its financial condition. Actual results may differ materially from those suggested by forward-looking statements for a number of reasons including those described in Part II, Item 1A.(“Risk Factors”) of this Form 10-Q.

Item 3.          Quantitative and Qualitative Disclosure About Market Risk.

During the period covered by this report, New Holdco did not conduct any material activities and therefore did not incur any significant interest rate risk, foreign currency exchange rate risk, commodity price risk or other relevant market risks.

Item 4.          Controls and Procedures

New Holdco’s management, including the principal executive officer and principal financial officer, performed an evaluation of the effectiveness of the design and operation of New Holdco’s disclosure controls and procedures as of September 30, 2014. Based on that evaluation, New Holdco’s management, including the principal executive officer and principal financial officer, concluded that the New Holdco’s disclosure controls and procedures were effective as of September 30, 2014. There have been no significant changes in New Holdco’s internal controls or in other factors that are reasonably likely to adversely affect internal control during the period from March 19, 2014 (date of incorporation) to September 30, 2014.

PART II.     OTHER INFORMATION

Item 1.      Legal Proceedings

Following the announcement on March 21, 2014, of the execution of the merger agreement, three complaints were filed in the Delaware Court of Chancery challenging the proposed acquisition of LIN: Sciabacucchi v. Lin Media LLC, et al. (C.A. No. 9530-CB), International Union of Operating Engineers Local 132 Pension Fund v. Lin Media LLC, et al. (C.A. No.9538-CB), and Pryor v. Lin Media LLC, et al. (C.A. No. 9577-CB). The litigations are putative class actions filed on behalf of the public stockholders of LIN and name as defendants LIN, its directors, Media General, New Holdco, Merger Sub 1 and Merger Sub 2 and HM Capital Partners LLC and several of its alleged affiliates (Hicks, Muse, Tate & Furst Equity Fund III, L.P.; HM3 Coinvestors, L.P.; Hicks, Muse, Tate & Furst Equity Fund IV, L.P.; Hicks, Muse, Tate & Furst Private Equity Fund IV, L.P.; HM4-EQ Coinvestors, L.P.; Hicks, Muse & Co. Partners, L.P.; Muse Family Enterprises, Ltd.; and JRM Interim Investors, L.P. (together with HM Capital Partners LLC and individual director defendant John R. Muse, which are collectively referred to as “HMC”)).

On April 18, 2014, the plaintiff in Engineers Local 132 Pension Fund voluntarily dismissed that action without prejudice and, on April 21, 2014, the Court approved the dismissal.

The operative complaints generally allege that the individual defendants breached their fiduciary duties in connection with their consideration and approval of the merger transaction, that the entity defendants aided and abetted those breaches and that individual director defendant Royal W. Carson III and HMC breached their fiduciary duties as controlling shareholders of LIN by causing LIN to enter into the merger transaction, which plaintiffs allege will provide disparate consideration to HMC. The complaints seek, among other things, declaratory and injunctive relief enjoining the merger transaction. On April 25, 2014, the plaintiff in the Sciabacucchi action filed an amended complaint, and the plaintiffs in the Sciabacucchi and Pryor actions each filed a motion for an expedited hearing on the plaintiff’s (yet-to-be filed) motion for a permanent injunction to enjoin the merger transaction, requesting, among other things, that the Court set a permanent injunction hearing for September 2014. On April 30, 2014, the plaintiffs in the Sciabacucchi and Pryor actions filed a stipulation to consolidate the two actions, which was approved by the Court on May 1, 2014.

On May 15, 2014, plaintiffs in the consolidated action sent a letter to the Court withdrawing the pending motion to expedite.

The outcome of the lawsuit is uncertain and cannot be predicted with any certainty. An adverse judgment for monetary damages could have a material adverse effect on the operations and liquidity of LIN or Media General. An adverse judgment granting permanent injunctive relief could indefinitely enjoin completion of the merger transaction.

Item 1A.     Risk Factors

New Holdco is subject to those risk factors set forth under the caption “Risk Factors” in the registration statement on Form S-4 (file No. 333-195850), as amended, filed by Mercury New Holdco, Inc. with the SEC, which was declared effective on July 24, 2014.

Item 6.          Exhibits

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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