Attached files
| file | filename |
|---|---|
| 8-K - 8-K NEXSTAR - DIVESTURES - NEXSTAR MEDIA GROUP, INC. | nxst-8k_20170117.htm |
Exhibit 99.1
UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS
On January 17, 2017, Nexstar Media Group, Inc. (formerly Nexstar Broadcasting Group, Inc. and herein referred to as “Nexstar”) completed its previously announced acquisition of Media General, Inc. (“Media General”) pursuant to an Agreement and Plan of Merger, dated as of January 27, 2016. Substantially concurrent with this acquisition, Nexstar also completed the previously announced sale of the assets of 13 television stations in 12 markets for a total consideration of $547.8 million, plus working capital adjustments. These divestitures were made to comply with the Federal Communications Commission’s local television ownership rule and to meet the 39% U.S. television household national ownership cap. The stations sold are as follows:
|
Agreement Date |
|
Buyer |
|
Previous Owner |
|
Station |
|
Affiliation |
|
Market |
|
Price |
|
May 10, 2016 |
|
Marquee Broadcasting, Inc. |
|
Nexstar |
|
KREG-TV |
|
(a) |
|
Denver, CO |
|
$0.35 million |
|
May 26, 2016 |
|
Bayou City Broadcasting Lafayette, Inc. |
|
Nexstar |
|
KADN-TV KLAF-LD |
|
FOX NBC |
|
Lafayette, LA |
|
$40.0 million |
|
May 26, 2016 |
|
Graham Media Group, Inc. |
|
Nexstar Media General |
|
WCWJ WSLS-TV |
|
The CW NBC |
|
Jacksonville, FL Roanoke-Lynchburg, VA |
|
$120.0 million |
|
June 3, 2016 |
|
Gray Television Group, Inc. |
|
Media General |
|
WBAY-TV KWQC-TV |
|
ABC NBC |
|
Green Bay, WI Davenport-Moline-Rock Island, IA |
|
$270.0 million |
|
June 10, 2016 |
|
USA Television MidAmerica Holdings, LLC |
|
Nexstar
Media General |
|
WFFT-TV KQTV KIMT WTHI-TV WLFI-TV |
|
FOX ABC CBS CBS CBS |
|
Ft. Wayne, IN St. Joseph, MO Mason City, IA Terre Haute, IN Lafayette, IN |
|
$115.0 million |
|
June 30, 2016 |
|
Ramar Communications Inc. |
|
Media General |
|
KASA-TV |
|
(b) |
|
Albuquerque- Santa Fe, NM |
|
$2.5 million |
|
|
|
(a) |
KREG-TV operated as a satellite station of Nexstar-owned CBS affiliate KREX-TV and will not retain such affiliation post-closing. |
|
(b) |
KASA-TV operated as a FOX affiliated station under Media General. It will not retain such affiliation post-closing. |
The six stations previously owned by Nexstar were sold for $115.6 million in cash, plus working capital adjustments (the “Nexstar Divestitures”). The seven stations previously owned by Media General were sold for a total consideration of $432.2 million, plus working capital adjustments.
The unaudited pro forma condensed balance sheet gives effect to the Nexstar Divestitures as if they had occurred on September 30, 2016. The unaudited pro forma condensed statements of operations give effect to the Nexstar Divestitures as if they had occurred on January 1, 2015. The unaudited pro forma condensed financial statements do not purport to represent what the actual results of operations or financial position would have been had the Nexstar Divestitures occurred on the dates assumed, nor are they necessarily indicative of future results of operations or financial position.
The unaudited pro forma condensed financial statements are presented based on currently available information and certain assumptions, which are described in the accompanying notes and which management believes are reasonable. The actual amounts recorded as of the closing of the Nexstar Divestitures may differ materially from the information presented in the unaudited pro forma condensed financial statements as a result of several factors, including the completion of full valuation procedures on the divestitures described above which is the basis used to allocate the sales prices of certain stations previously owned by Nexstar and Media General and changes in the Nexstar Divestitures’ net assets between the pro forma balance sheet as of September 30, 2016 and the closing of the sale.
The unaudited pro forma condensed financial statements should be read in conjunction with (i) the accompanying notes to the unaudited pro forma condensed financial statements, (ii) the audited consolidated financial statements and accompanying notes included in Nexstar’s Annual Report on Form 10-K as of and for the year ended December 31, 2015, filed with the Securities and Exchange Commission (“SEC”) on February 29, 2016, and (iii) the unaudited condensed consolidated financial statements and accompanying notes included in Nexstar’s Form 10-Q as of and for the three and nine months ended September 30, 2016, filed with the SEC on November 9, 2016.
UNAUDITED PRO FORMA CONDENSED BALANCE SHEET
AS OF SEPTEMBER 30, 2016
(in thousands)
|
ASSETS |
|
Historical |
|
|
Nexstar Divestitures Pro Forma Adjustments |
|
|
|
Pro Forma |
|
||||
|
Current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
29,256 |
|
|
$ |
114,497 |
|
(a) |
|
$ |
143,753 |
|
|
|
Accounts receivable, net |
|
|
214,404 |
|
|
|
(7,539 |
) |
(b) |
|
|
206,865 |
|
|
|
Broadcast rights |
|
|
15,495 |
|
|
|
(1,448 |
) |
(b) |
|
|
14,047 |
|
|
|
Prepaid expenses and other current assets |
|
|
27,866 |
|
|
|
(45 |
) |
(b) |
|
|
27,821 |
|
|
|
Total current assets |
|
|
287,021 |
|
|
|
105,465 |
|
|
|
|
392,486 |
|
|
|
Property and equipment, net |
|
|
283,600 |
|
|
|
(9,504 |
) |
(b) |
|
|
274,096 |
|
|
|
Goodwill |
|
|
488,432 |
|
|
(19,963 |
) |
(b) |
|
|
468,469 |
|
||
|
FCC licenses |
|
|
542,524 |
|
|
(17,734 |
) |
(b) |
|
|
524,790 |
|
||
|
Other intangible assets, net |
|
|
336,406 |
|
|
|
(6,212 |
) |
(b) |
|
|
330,194 |
|
|
|
Restricted cash |
|
|
900,402 |
|
|
— |
|
|
|
|
900,402 |
|
||
|
Other noncurrent assets, net |
|
|
82,311 |
|
|
|
(1,542 |
) |
(b) |
|
|
80,769 |
|
|
|
Total assets |
|
$ |
2,920,696 |
|
|
$ |
50,510 |
|
|
|
$ |
2,971,206 |
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current portion of debt |
|
$ |
28,093 |
|
|
$ |
— |
|
|
|
$ |
28,093 |
|
|
|
Current portion of broadcast rights payable |
|
|
16,750 |
|
|
|
(1,463 |
) |
(b) |
|
|
15,287 |
|
|
|
Accounts payable |
|
|
25,388 |
|
|
|
(493 |
) |
(b) |
|
|
24,895 |
|
|
|
Accrued expenses |
|
|
70,364 |
|
|
|
14,865 |
|
(b)(c) |
|
|
85,229 |
|
|
|
Interest payable |
|
|
24,751 |
|
|
— |
|
|
|
|
24,751 |
|
||
|
Other current liabilities |
|
|
15,804 |
|
|
|
(183 |
) |
(b) |
|
|
15,621 |
|
|
|
Total current liabilities |
|
|
181,150 |
|
|
|
12,726 |
|
|
|
|
193,876 |
|
|
|
Debt |
|
|
2,320,077 |
|
|
— |
|
|
|
|
2,320,077 |
|
||
|
Deferred tax liabilities |
|
|
111,079 |
|
|
|
9,297 |
|
(b)(d) |
|
|
120,376 |
|
|
|
Other noncurrent liabilities |
|
|
40,789 |
|
|
|
(1,927 |
) |
(b) |
|
|
38,862 |
|
|
|
Total liabilities |
|
|
2,653,095 |
|
|
|
20,096 |
|
|
|
|
2,673,191 |
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock |
|
— |
|
|
— |
|
|
|
— |
|
||||
|
Class A common stock |
|
|
316 |
|
|
— |
|
|
|
|
316 |
|
||
|
Class B common stock |
|
— |
|
|
— |
|
|
|
— |
|
||||
|
Class C common stock |
|
— |
|
|
— |
|
|
|
— |
|
||||
|
Additional paid-in capital |
|
|
392,836 |
|
|
— |
|
|
|
|
392,836 |
|
||
|
Accumulated deficit |
|
|
(197,065 |
) |
|
|
30,414 |
|
(e) |
|
|
(166,651 |
) |
|
|
Treasury stock |
|
|
(43,619 |
) |
|
— |
|
|
|
|
(43,619 |
) |
||
|
Total Nexstar Media Group, Inc. stockholders’ equity |
|
|
152,468 |
|
|
|
30,414 |
|
|
|
|
182,882 |
|
|
|
Noncontrolling interests in consolidated variable interest entities |
|
|
115,133 |
|
|
— |
|
|
|
|
115,133 |
|
||
|
Total stockholders’ equity |
|
|
267,601 |
|
|
|
30,414 |
|
|
|
|
298,015 |
|
|
|
Total liabilities and stockholders’ equity |
|
$ |
2,920,696 |
|
|
$ |
50,510 |
|
|
|
$ |
2,971,206 |
|
|
See the accompanying notes to the unaudited pro forma condensed financial statements.
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2016
(in thousands)
|
|
|
Historical |
|
|
Nexstar Divestitures Pro Forma Adjustments (b) |
|
|
|
Pro Forma |
|
|||||||||||||
|
Net revenue |
|
$ |
793,311 |
|
|
$ |
(28,538 |
) |
|
|
$ |
764,773 |
|
||||||||||
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Direct operating expenses, excluding depreciation and amortization |
|
|
283,802 |
|
|
|
(7,113 |
) |
|
|
|
276,689 |
|
||||||||||
|
Selling, general, and administrative expenses, excluding depreciation and amortization |
|
|
197,539 |
|
|
|
(5,995 |
) |
|
|
|
191,544 |
|
||||||||||
|
Amortization of broadcast rights |
|
|
44,060 |
|
|
|
(2,750 |
) |
|
|
|
41,310 |
|
||||||||||
|
Amortization of intangible assets |
|
|
34,903 |
|
|
|
(592 |
) |
|
|
|
34,311 |
|
||||||||||
|
Depreciation |
|
|
38,174 |
|
|
|
(1,044 |
) |
|
|
|
37,130 |
|
||||||||||
|
Total operating expenses |
|
|
598,478 |
|
|
|
(17,494 |
) |
|
|
|
580,984 |
|
||||||||||
|
Income from operations |
|
|
194,833 |
|
|
|
(11,044 |
) |
|
|
|
183,789 |
|
||||||||||
|
Interest expense, net |
|
|
(70,853 |
) |
|
— |
|
|
|
|
(70,853 |
) |
|||||||||||
|
Other expenses |
|
|
(409 |
) |
|
— |
|
|
|
|
(409 |
) |
|||||||||||
|
Income before income taxes |
|
|
123,571 |
|
|
|
(11,044 |
) |
|
|
|
112,527 |
|
||||||||||
|
Income tax expense |
|
|
(50,882 |
) |
|
|
4,277 |
|
|
|
|
(46,605 |
) |
||||||||||
|
Net income |
|
|
72,689 |
|
|
|
(6,767 |
) |
|
|
|
65,922 |
|
||||||||||
|
Net (income) attributable to noncontrolling interests |
|
|
(1,634 |
) |
|
— |
|
|
|
|
(1,634 |
) |
|||||||||||
|
Net income attributable to Nexstar Media Group, Inc. |
|
$ |
71,055 |
|
|
$ |
(6,767 |
) |
|
|
$ |
64,288 |
|
||||||||||
|
Net income per common share attributable to Nexstar Media Group, Inc.: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Basic |
|
$ |
2.32 |
|
|
|
|
|
|
|
$ |
2.10 |
|
||||||||||
|
Diluted |
|
$ |
2.25 |
|
|
|
|
|
|
|
$ |
2.03 |
|
||||||||||
|
Weighted average number of common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Basic |
|
|
30,678 |
|
|
|
|
|
|
|
|
30,678 |
|
||||||||||
|
Diluted |
|
|
31,619 |
|
|
|
|
|
|
|
|
31,619 |
|
||||||||||
See the accompanying notes to the unaudited pro forma condensed financial statements.
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2015
(in thousands)
|
|
|
Historical |
|
|
Nexstar Divestitures Pro Forma Adjustments (b) |
|
|
|
Pro Forma |
|
||||
|
Net revenue |
|
$ |
896,377 |
|
|
$ |
(34,401 |
) |
|
|
$ |
861,976 |
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct operating expenses, excluding depreciation and amortization |
|
|
302,257 |
|
|
|
(7,384 |
) |
|
|
|
294,873 |
|
|
|
Selling, general, and administrative expenses, excluding depreciation and amortization |
|
|
232,480 |
|
|
|
(7,519 |
) |
|
|
|
224,961 |
|
|
|
Amortization of broadcast rights |
|
|
59,836 |
|
|
|
(3,837 |
) |
|
|
|
55,999 |
|
|
|
Amortization of intangible assets |
|
|
48,475 |
|
|
|
(918 |
) |
|
|
|
47,557 |
|
|
|
Depreciation |
|
|
47,222 |
|
|
|
(1,239 |
) |
|
|
|
45,983 |
|
|
|
Total operating expenses |
|
|
690,270 |
|
|
|
(20,897 |
) |
|
|
|
669,373 |
|
|
|
Income from operations |
|
|
206,107 |
|
|
|
(13,504 |
) |
|
|
|
192,603 |
|
|
|
Interest expense, net |
|
|
(80,520 |
) |
|
|
— |
|
|
|
|
(80,520 |
) |
|
|
Other expenses |
|
|
(517 |
) |
|
|
— |
|
|
|
|
(517 |
) |
|
|
Income before income taxes |
|
|
125,070 |
|
|
|
(13,504 |
) |
|
|
|
111,566 |
|
|
|
Income tax expense |
|
|
(48,687 |
) |
|
|
5,230 |
|
|
|
|
(43,457 |
) |
|
|
Net income |
|
|
76,383 |
|
|
|
(8,274 |
) |
|
|
|
68,109 |
|
|
|
Net loss attributable to noncontrolling interests |
|
|
1,301 |
|
|
|
— |
|
|
|
|
1,301 |
|
|
|
Net income attributable to Nexstar Media Group, Inc. |
|
$ |
77,684 |
|
|
$ |
(8,274 |
) |
|
|
$ |
69,410 |
|
|
|
Net income per common share attributable to Nexstar Media Group, Inc.: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
2.50 |
|
|
|
|
|
|
|
$ |
2.23 |
|
|
|
Diluted |
|
$ |
2.42 |
|
|
|
|
|
|
|
$ |
2.16 |
|
|
|
Weighted average number of common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
31,100 |
|
|
|
|
|
|
|
|
31,100 |
|
|
|
Diluted |
|
|
32,091 |
|
|
|
|
|
|
|
|
32,091 |
|
|
See the accompanying notes to the unaudited pro forma condensed financial statements.
NOTES TO THE UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS
The unaudited pro forma condensed balance sheet and the unaudited pro forma condensed statements of operations includes the following adjustments:
|
|
(a) |
Represents the proceeds attributable to the Nexstar Divestitures, including adjustments for working capital, of $115.6 million, less the fees associated with the sale of $1.2 million. Certain sale agreements do not allocate the sales price between the stations previously owned by Nexstar and the stations previously owned by Media General. In order to calculate the proceeds attributable to the Nexstar Divestitures, the sales prices were allocated using the estimated fair value of the stations derived from their estimated future cash flows. |
|
|
(b) |
Represents the elimination of historical amounts attributable to the Nexstar Divestitures. |
|
|
(c) |
Represents the federal and state tax payable of $16.0 million resulting from the estimated taxable gain on the Nexstar Divestitures of $89.9 million, using a blended statutory tax rate. |
|
|
(d) |
Represents the use of $18.8 million federal net operating losses due to the Nexstar Divestitures. |
|
|
(e) |
Represents the estimated book gain on the Nexstar Divestitures of $66.4 million, less the fees associated with the sale of $1.2 million and $34.8 million estimated taxes using a blended statutory tax rate on the estimated taxable gain. |