NEXSTAR MEDIA GROUP, INC. 10-K

nxst-10k_20201231.htm UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the fiscal year ended December 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from to . Commission File Number: 000-50478 NEXSTAR MEDIA GROUP, INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 23-3083125 (State of Organization or Incorporation) (I.R.S. Employer Identification No.) 545 E. John Carpenter Freeway , Suite 700 , Irving , Texas 75062 (Address of Principal Executive Offices) (Zip Code) ( 972 ) 373-8800 (Registrant’s Telephone Number, Including Area Code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Class A Common Stock NXST NASDAQ Global Select Market Securities registered pursuant to section 12(g) of the Act: None Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐ Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒ Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that it was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by checkmark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (check one): Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒ Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ As of June 30, 2020, the aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant was $ 3,644,752,141 . As of February 23, 2021, the Registrant had 43,384,534 shares of Class A Common Stock outstanding. Documents Incorporated By Reference Portions of the Proxy Statement for the Registrant’s 2021 Annual Meeting of Stockholders will be filed with the Commission within 120 days after the close of the Registrant’s fiscal year and incorporated by reference in Part III of this Annual Report on Form 10-K. TABLE OF CONTENTS Page PART I ITEM 1. Business 5 ITEM 1A. Risk Factors 22 ITEM 1B. Unresolved Staff Comments 42 ITEM 2. Properties 42 ITEM 3. Legal Proceedings 42 ITEM 4. Mine Safety Disclosures 42 PART II ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 43 ITEM 6. Selected Financial Data 45 ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 47 ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk 69 ITEM 8. Financial Statements and Supplementary Data 69 ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 69 ITEM 9A. Controls and Procedures 69 ITEM 9B. Other Information 70 PART III ITEM 10. Directors, Executive Officers and Corporate Governance 71 ITEM 11. Executive Compensation 71 ITEM 12. Security Ownership of Certain Beneficial Owners and Management, and Related Stockholder Matters 71 ITEM 13. Certain Relationships and Related Transactions, and Director Independence 71 ITEM 14. Principal Accountant Fees and Services 71 PART IV ITEM 15. Exhibits and Financial Statement Schedules 72 ITEM 16. Form 10-K Summary 72 Index to Exhibits 73 Index to Financial Statements F-1 General As used in this Annual Report on Form 10-K and unless the context indicates otherwise, “Nexstar” refers to Nexstar Media Group, Inc. and its consolidated wholly-owned subsidiary, Nexstar Inc. (formerly Nexstar Broadcasting, Inc.); the “Company” refers to Nexstar and the variable interest entities (“VIEs”) required to be consolidated in our financial statements; and all references to “we,” “our,” “ours,” and “us” refer to Nexstar. Nexstar Inc. has time brokerage agreements (“TBAs”), shared services agreements (“SSAs”), joint sales agreements (“JSAs”), local marketing agreements (“LMAs”) and outsourcing agreements (which we generally and collectively refer to as “local service agreements”) relating to the television stations owned by VIEs but does not own any of the equity interests in these entities. For a description of the relationship between Nexstar and these VIEs, see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The information in this Annual Report on Form 10-K includes information related to Nexstar and the VIEs with whom Nexstar has relationships. In accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and as discussed in Note 2 to our Consolidated Financial Statements, the financial results of the consolidated VIEs are included in the Consolidated Financial Statements contained herein. In the context of describing ownership of television stations in a particular market, the term “duopoly” refers to owning or deriving the majority of the economic benefit, through ownership or local service agreements, from two or more stations in a particular market. For more information on how we derive economic benefit from a duopoly, see Item 1, “Business.” There are 210 generally recognized television markets, known as Designated Market Areas (“DMAs”), in the United States. DMAs are ranked in size according to various factors based upon actual or potential audience. DMA rankings contained in this Annual Report on Form 10-K are from Investing in Television Market Report 2020 4th Edition , as published by BIA Financial Network, Inc. 3 Cautionary Note Regarding Forward-Looking Statements This Annual Report on Form 10-K contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including: the risks and uncertainties related to the global Coronavirus Disease 2019 (“COVID-19”) pandemic, including, for example, expectations regarding the impact of COVID-19 on our businesses and our future financial performance; our ability to obtain financial and tax benefits from the recently-passed Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”); any projections or expectations of earnings, revenue, financial performance, liquidity and capital resources or other financial items; any assumptions or projections about the television broadcasting industry; any statements of our plans, strategies and objectives for our future operations, performance, liquidity and capital resources or other financial items; any statements concerning proposed new products, services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may include the words “may,” “will,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and other similar words. Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ from a projection or assumption in any of our forward-looking statements. Our future financial position and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties discussed under Item 1A, “Risk Factors” located elsewhere in this Annual Report on Form 10-K and in our other filings with the United States Securities and Exchange Commission (“SEC”). The forward-looking statements made in this Annual Report on Form 10-K are made only as of the date hereof, and we do not have or undertake any obligation to update any forward-looking statements to reflect subsequent events or circumstances. 4 PART I Item 1. Business Company Overview We are 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 throughout the United States. We also own WGN America, a national general entertainment cable network and the home of our national newscast “NewsNation,” digital multicast network services, various digital products, services and content, a 31.3% ownership stake in Television Food Network, G.P. (“TV Food Network”), and a portfolio of real estate assets. As of December 31, 2020, we owned, operated, programmed or provided sales and other services to 198 full power television stations, including those owned by VIEs, and one AM radio station in 116 markets in 39 states and the District of Columbia. The stations are affiliates of ABC, NBC, FOX, CBS, The CW, the MyNetworkTV (“MNTV”) and other broadcast television networks. As of December 31, 2020, we reached approximately 39% of U.S. television households (applying the Federal Communications Commission’s (“FCC”) ultra-high-frequency (“UHF”) discount) . The stations we own and operate or provide services to provide free programming to our markets’ television viewing audiences. This programming includes programs produced by networks with which the stations are affiliated, programs that the stations produce, and first-run and rerun syndicated programs that the stations acquire. Our cable network delivers a growing national newscast and quality television series and movies. Our primary sources of revenue include the sale of commercial air time on our stations to local advertisers, the sale of commercial time on our stations and cable network to national advertisers, the sale of advertising on each of our stations’ websites and mobile applications where we deliver community focused content, and the revenues earned from our retransmission consent and carriage agreements with traditional multichannel video programming distributors (“MVPDs”), such as cable and satellite providers, and online video distributors (“OVDs”), companies that provide video content through internet streaming. Our digital businesses include video and display advertising platforms that are delivered locally or nationally through our own and various third party websites and mobile applications, a recently acquired consumer product reviews platform and other digital media solutions to media publishers and advertisers. We are focused on new technologies and growing our portfolio of digital products, services and content complementary to our vision of providing local news, entertainment and sports content through broadcast and digital platforms. We seek to grow our revenue, operating income, EBITDA and cash flow by increasing the audience and revenue shares of the stations we own, operate, program or provide sales and other services to, as well as through our growing portfolio of digital products, services and content. We strive to increase the audience share of the stations by creating a strong local broadcasting presence based on highly rated local news, local sports coverage and active community sponsorship. We seek to improve revenue share by employing and supporting a high-quality local sales force that leverages the stations’ strong local brands and community presence with local advertisers. We further improve broadcast cash flow by maintaining strict control over operating and programming costs. The benefits achieved through these initiatives are magnified in our duopoly markets by owning or providing services to stations affiliated with multiple networks, capitalizing on multiple sales forces and achieving an increased level of operational efficiency. As a result of our operational enhancements, we expect revenue from the stations we have acquired or begun providing services to in the last four years to grow faster than that of our more mature stations. We hold a variety of investments. TV Food Network, in which we have a 31.3% interest, operates two 24-hour television networks, Food Network and Cooking Channel, as well as their related websites. Food Network is a fully distributed network in the United States with content distributed internationally. Cooking Channel is a digital-tier network available nationally and airs popular off-Food Network programming as well as originally produced programming. We also own attractive real estate in key markets, including development rights for certain of our real estate assets. We are a Delaware corporation formed in 1996. Our principal offices are at 545 E. John Carpenter Freeway, Suite 700, Irving, TX 75062. Our telephone number is (972) 373-8800 and our website is http://www.nexstar.tv . The information contained on, or accessible through, our website is not part of this Annual Report on Form 10-K and is not incorporated herein by reference. 5 Significant Transactions and Recent Events Recent Acquisitions and Dispositions 2020 Nexstar Acquisitions On December 29, 2020, we acquired 100% of the membership interests in BestReviews LLC (“BestReviews”) from Tribune Publishing Company, LLC (“TribPub”) and BR Holding Company, Inc. (“BR Holdco”) for $169.9 million in cash, funded by cash on hand. BestReviews engages in the business of testing, researching and reviewing consumer products. Our acquisition of BestReviews diversifies our digital portfolio while presenting new revenue channels by leveraging our media content, national reach, and consumer digital usage across multiple platforms. On September 17, 2020, we acquired WDKY-TV, the Fox affiliate in the Lexington, KY market, from Sinclair Broadcast Group, Inc. (“Sinclair”) for $18.0 million in cash, funded by cash on hand. This acquisition allowed us entry into this market. On March 2, 2020, we acquired the Fox affiliate television station WJZY and the MNTV affiliate television station WMYT in the Charlotte, NC market from Fox Television Stations, LLC (“Fox”) for $45.3 million in cash. The acquisition from Fox allowed us entry into this market. On January 27, 2020, we acquired certain non-license assets associated with television station KGBT-TV in the Harlingen-Weslaco-Brownsville-McAllen, Texas market from Sinclair for $17.9 million in cash, funded by cash on hand. 2020 Mission Acquisitions On December 30, 2020, Mission Broadcasting, Inc. (“Mission”), our consolidated VIE, acquired the CW affiliate station WPIX in the New York, NY market from The E.W. Scripps Company (“Scripps”) . Mission funded the purchase price of $85.1 million in cash through a combination of borrowing from its revolving credit facility and cash on hand . Upon Mission’s acquisition of WPIX, it entered into a TBA with us. Mission also granted us an option to purchase WPIX from Mission, subject to FCC consent. These transactions allowed the Company’s entry into this market. On November 23, 2020, Mission acquired WXXA, the Fox affiliate in the Albany, NY market, and WLAJ, the ABC affiliate in the Lansing, MI market from Shield Media, LLC (“Shield”) for $20.8 million in cash, funded through a combination of Mission’s borrowing from its revolving credit facility and cash on hand. Effective on November 23, 2020, Mission assumed the existing JSAs and SSAs between Shield and us for the stations. Mission also granted us options to purchase the stations from Mission, subject to FCC consent. Mission’s purchase of these stations allowed its entry into these markets. Prior to Mission’s acquisition, we were the primary beneficiary of these stations and consolidated their accounts into our financial statements. Under Mission’s ownership, we remained the primary beneficiary and continued to consolidate these stations into our financial statements. On November 16, 2020, Mission acquired KASY, KWBQ and KRWB from Tamer Media, LLC (“Tamer”) for $1.8 million in cash, funded through a combination of Mission’s borrowing from its revolving credit facility and cash on hand. KASY (an MNTV affiliate), KWBQ (a CW affiliate) and KRWB (a CW affiliate) are full power television stations serving the Albuquerque, New Mexico market. Effective on November 16, 2020, Mission assumed the existing SSA between Tamer and us for the stations. Mission also granted us an option to purchase the stations from Mission, subject to FCC consent. Mission’s purchase of these stations allowed its entry into this market. Prior to Mission’s acquisition, we were the primary beneficiary of these stations and consolidated their accounts into our financial statements. Under Mission’s ownership, we remained the primary beneficiary and continued to consolidate these stations into our financial statements. On September 1, 2020, Mission acquired television stations KMSS serving the Shreveport, Louisiana market, KPEJ serving the Odessa, Texas market and KLJB serving the Quad Cities, Iowa/Illinois market from Marshall Broadcasting Group, Inc. (“Marshall”) . The purchase price for the acquisition was $53.2 million, of which $49.0 million was applied against Mission’s existing loans receivable from Marshall on a dollar-for-dollar basis and the remaining $4.2 million in cash was funded by cash on hand. At closing, Mission entered into new SSAs with us for the stations. These transactions allowed Mission’s entry into these markets. 6 2020 Nexstar Dispositions On March 2, 2020, we completed the sale of Fox affiliate television station KCPQ and the MNTV affiliate television station KZJO in the Seattle, WA market, as well as Fox affiliate television station WITI in the Milwaukee, WI market, to Fox for approximately $349.9 million in cash, resulting in a net gain of $4.7 million. Our proceeds from the sale of the stations were partially used to prepay a portion of our term loans. On January 14, 2020, we sold our sports betting information website business to Star Enterprises Ltd., a subsidiary of Alto Holdings, Ltd., for a net consideration of $12.9 million (net of $2.4 million cash balance of this business that was transferred to the buyer upon sale) resulting in a net gain of $2.4 million. See Notes 3 and 9 to our Consolidated Financial Statements in Part IV, Item 15(a) of this Annual Report on Form 10-K for additional information on the above transactions . Operating Strategy We seek to generate revenue, operating income, EBITDA and cash flow growth through the following strategies: Develop Leading Local Franchises. Each of the stations that we own, operate, program, or provide sales and other services to creates a highly recognizable local brand, primarily through the quality of local news programming and community presence. Based on internally generated analysis, we believe that in over 74% of our markets in which we produce local newscasts, we rank among the top two stations in local news viewership. Strong local news typically generates higher ratings among attractive demographic profiles and enhances audience loyalty, which may result in higher ratings for programs both preceding and following the news. High ratings and strong community identity make the stations that we own, operate, program, or provide sales and other services to more attractive to local advertisers. For the year ended December 31, 2020, we earned approximately 43% of our advertising revenue from spots aired during local news programming. Currently, our stations and the stations we provide services to typically provide between 15 to 40 hours per week of local news programming , but as high as 80 hours per week in stations with enhanced time periods for local news. Extensive local sports coverage, active sponsorship of community events and the local news stories our Washington, D.C. bureau focuses on further differentiate us from our competitors and strengthen our community relationships and our local advertising appeal. Invest in Digital Media. We are focused on new technologies and growing our portfolio of digital products, services and content. Our station websites provide access to our local news and information, as well as community centric businesses and services. We delivered digital content to audiences across all of our station web sites in 2020, with approximately 91 million unique monthly users who utilized nearly 7.8 billion page views. Also in 2020, our mobile websites and mobile application accounted for 43% and 38%, respectively, of our station websites’ overall page views by year end. We are committed to serving our local markets by providing local content to both online and mobile users wherever and whenever they want. We have also invested in various digital product lines, including video and display advertising platforms that are delivered locally or nationally through our own and various third party websites and mobile applications, a recently acquired consumer product reviews platform and other digital media solutions to media publishers and advertisers. Emphasize Local Sales. We employ a high-quality local sales force in each of our markets to increase revenue from local advertisers by capitalizing on our investment in local programming and community websites. We believe that local advertising is attractive because our sales force is more effective with local advertisers, giving us a greater ability to influence this revenue source. Additionally, local advertising has historically been a more stable source of revenue than national advertising for television broadcasters. For the year ended December 31, 2020, revenue generated by our stations from core local advertising represented approximately 69% of our stations’ consolidated core advertising net revenue (total of core local and national advertising net revenue, excluding political advertising revenue). In most of our markets, we have increased the size and quality of our local sales force. We also invest in our sales efforts by implementing comprehensive training programs and employing a sophisticated inventory tracking system to help maximize advertising rates and the amount of inventory sold in each time period. Capitalize on Diverse Network Affiliations. We currently own, operate, program or provide sales and other services to a balanced portfolio of television stations with diverse network affiliations, including ABC, NBC, CBS, and FOX affiliated stations, which represented approximately 11.9%, 21%, 22.8% and 25.3%, respectively, of our 2020 combined core (local and national) and political advertising net revenue. The networks provide these stations with quality programming and numerous sporting events such as NBA basketball, Major League baseball, NFL football, NCAA sports, PGA golf and the Olympic Games. Because network programming and ratings change frequently, the diversity of our station portfolio’s network affiliations reduces our reliance on the quality of programming from a single network. Operate Duopoly Markets. Owning or providing services to more than one station in a given market enables us to broaden our audience share, enhance our revenue share and achieve significant operating efficiencies. Duopoly markets broaden audience share by providing programming from multiple networks with different targeted demographics. These markets increase revenue share by capitalizing on multiple sales forces. Additionally, we achieve significant operating efficiencies by consolidating physical facilities, eliminating redundant management and leveraging capital expenditures between stations. We derived approximately 53% of our stations’ net revenue for the year ended December 31, 2020 from our duopoly markets. 7 Operate and Expand NewsNation . In September 2020, WGN America successfully launched NewsNation, a live daily three-hour national newscast during prime time . By aggregating our current news resources of 5, 5 00 journalists in 110 newsrooms to produce a national newscast, we can leverage WGN America’s strong reach across the United States. Beginning on March 1, 2021, we will rebrand WGN America as NewsNation, rename our national prime time newscast to “NewsNationPrime” to air every night from 8 p.m. to 10 p.m. Eastern Time and launch “Banfield , ” an hour-long news and talk show, to air weeknights at 10 p.m. Eastern Time. We are also expanding NewsNation’s programming to five hours on weeknights with the launch of two new hour-long shows: “NewsNation Early Edition” at 6 p.m. Eastern Time and “The Donlon Report” at 7 p.m. Eastern Time. WGN America is currently available in approximately 7 4 million households as estimated by The Nielsen Company (US), LLC. Maintain Strict Cost Controls. We emphasize strict controls on operating and programming costs in order to increase EBITDA and free cash flow. We continually seek to identify and implement cost savings at each of our stations, the stations we provide services to and other business units, and our overall size benefits each station or business unit with respect to negotiating favorable terms with programming suppliers and other vendors. By leveraging our size and corporate management expertise, we are able to achieve economies of scale by providing programming, financial, sales and marketing support to our stations, the stations we provide services to and other business units. Monetization of Real Estate Assets . We intend to maximize the monetization of our real estate assets by continuously assessing market conditions and executing on what we believe are the best strategies for each of the properties such as opportunistic divestitures, including select properties as part of an accelerated monetization program and improving entitlements of properties to increase value prior to monetization. Attract and Retain High Quality Management. We seek to attract and retain station general managers with proven track records in larger television markets by providing equity incentives not typically offered by other station operators in our markets. Most of our station general managers have been granted restricted stock units and stock options and have extensive experience in the television broadcasting industry. Acquisition Strategy We selectively pursue acquisitions of television stations where we believe we can improve revenue, operating income, EBITDA and cash flow through active management. When considering an acquisition, we evaluate the target audience share, revenue share, overall cost structure and proximity to our regional clusters. Additionally, we seek to acquire or enter into local service agreements with stations to create duopoly markets. We selectively pursue acquisitions of digital properties, including new technologies and growing our portfolio of digital products, services and content, that leverage our capabilities and complementary to our vision of providing local news, entertainment and sports content through broadcast and digital platforms. Relationship with VIEs Through various local service agreements, as of December 31, 2020, we provided sales, programming and other services to 36 full power television stations owned by consolidated VIEs and one full power television station owned by an unconsolidated VIE. As of December 31, 2020, all of the VIEs and their stations are 100% owned by independent third parties. In compliance with FCC regulations for all the parties, the VIEs maintain complete responsibility for and control over programming, finances, personnel and operations of their stations. However, for the consolidated VIEs, we are deemed under U.S. GAAP to have controlling financial interests in these entities because of (1) the local service agreements Nexstar has with the consolidated VIEs’ stations, (2) Nexstar’s guarantee of the obligations incurred under Mission’s senior secured credit facility, (3) Nexstar having power over significant activities affecting the consolidated 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 consolidated VIE which permit Nexstar to acquire the assets and assume the liabilities of all but three of the consolidated VIEs’ stations at any time, subject to FCC consent. These purchase options are freely exercisable or assignable by Nexstar without consent or approval by the VIEs. These option agreements expire on various dates between 2021 and 2028. We expect to renew these option agreements upon expiration. Therefore, these VIEs are consolidated into these financial statements. For additional information on VIEs, see Note 2 to our Consolidated Financial Statements in Part IV, Item 15(a) of this Annual Report on Form 10-K. 8 The Stations The following chart sets forth general information about the television stations (full power, low power and multicast channels) we own, operate, program or provide sales and other services to as of December 31, 2020: Market Rank (1) Market Status (2) Full Power Stations Primary Affiliation Low Power Stations / Multicast Channels Other Affiliation FCC License Expiration Date 1 New York, NY LSA WPIX (5) The CW WPIX-D2, D3, D4 Antenna TV, Court TV, TBD 6/1/2023 2 Los Angeles, CA O&O KTLA The CW KTLA-D2, D3, D4 AntennaTV, CourtTV, TBD 12/1/2022 3 Chicago, IL O&O WGN Independent WGN-D2, D3, D4 AntennaTV, CourtTV, TBD 12/1/2021 4 Philadelphia, PA O&O WPHL MNTV WPHL-D2, D3, D4 AntennaTV, CourtTV, Comet 8/1/2023 5 Dallas, TX O&O KDAF The CW KDAF-D2, D3, D4 AntennaTV, CourtTV, Charge! 8/1/2022 6 San Francisco, CA O&O KRON MNTV KRON-D2, D3, D4, D5 Sky Link TV, GetTV, CourtTV, AntennaTV 12/1/2022 8 Houston, TX O&O KIAH The CW KIAH-D2, D3, D4, D5 AntennaTV, Comet, TBD, CourtTV 8/1/2022 9 DC/Hagerstown, MD O&O O&O WDVM (3) WDCW Independent The CW WDVM-D2, D3, D4 WDCW-D2, D3 Grit, CourtTV Mystery, Laff AntennaTV, WDVM (4) (4) 13 Tampa, FL O&O O&O WFLA WTTA (18) NBC MNTV WFLA-D2, D3 WTTA-D2 CourtTV Mystery CoziTV 2/1/2028 2/1/2021 16 Denver, CO O&O O&O O&O KDVR KWGN KFCT FOX The CW FOX KDVR-D2, D3 KWGN-D2, D3, D4 AntennaTV, TBD CourtTV, Comet, Charge! 4/1/2022 4/1/2022 4/1/2022 19 Cleveland, OH O&O WJW FOX WJW-D2, D3, D4 AntennaTV, Comet, Charge! 10/1/2021 20 Sacramento, CA O&O KTXL FOX KTXL-D2, D3, D4 AntennaTV, CourtTV, TBD 12/1/2022 21 Portland, OR O&O O&O KOIN KRCW CBS The CW KOIN-D2, D3 KRCW-D2, D3, D4 getTV, Bounce AntennaTV, CourtTV, TBD 2/1/2023 2/1/2023 22 Charlotte, NC O&O O&O WJZY WMYT FOX MNTV WJZY-D3, D4, D5, D6, D7, D8 WMYT Son Life, Movies, H&I, ION, Light TV, ShopLC (4) (4) 23 St. Louis, MO O&O O&O KPLR KTVI The CW FOX KPLR-D2, D3, D4 KTVI-D2, D3, D4 CourtTV, Comet, Grit AntennaTV, CourtTV Mystery, Dabl 2/1/2022 2/1/2022 24 Raleigh, NC O&O WNCN CBS WNCN-D2, D3, D4 CourtTV, Grit, CourtTV Mystery (4) 25 Indianapolis, IN O&O O&O O&O WTTV WTTK WXIN CBS CBS FOX WTTV-D2, D3 WTTK-D2, D3 WXIN-D2, D3, D4 Independent, Comet Independent, Cozi AntennaTV, CourtTV, Charge! 8/1/2021 8/1/2021 8/1/2021 27 San Diego, CA O&O KSWB FOX KSWB-D2, D3, D4 AntennaTV, CourtTV, ION 12/1/2022 29 Nashville, TN O&O WKRN ABC WKRN-D2, D3, D4 Bounce, True Crime, Grit 8/1/2021 30 Salt Lake City, UT O&O O&O KTVX KUCW ABC The CW KTVX-D2, D3, D4 KUCW-D2, D3, D4 MeTV, Laff, Heroes & Icons Movies!, Grit, CourtTV 10/1/2022 10/1/2022 32 New Haven, CT O&O O&O WTNH WCTX (18) ABC MNTV WTNH-D2 WCTX-D2 Bounce Grit 4/1/2023 4/1/2023 33 Columbus, OH O&O WCMH NBC WCMH-D2, D3, D4 CourtTV, ION, Laff 10/1/2021 34 Kansas City, MO O&O WDAF FOX WDAF-D2, D3, D4 AntennaTV, CourtTV, Charge! 2/1/2022 35 Spartanburg, SC O&O O&O WSPA WYCW (18) CBS The CW WSPA-D3 WYCW-D3 ION get TV (4) (4) 38 Austin, TX O&O LSA O&O KXAN KNVA (8) KBVO NBC The CW MNTV KXAN-D2, D3 KNVA-D2, D3, D4 KBVO-CD, D2, D3, D4 Cozi TV, ION Grit, Laff, CourtTV Bounce, Heroes & Icons, AntennaTV 8/1/2022 8/1/2022 8/1/2022 40 Las Vegas, NV O&O KLAS CBS KLAS-D2, D3, D4 MeTV, Movies!, ION 10/1/2022 41 Grand Rapids, MI O&O O&O O&O WOOD WOTV NBC ABC WOOD-D2, D3 WOTV-D2, D3, D4 WXSP-CD, D2, D3 Bounce, Laff getTV, Grit, Weather MNTV, Cozi TV, CourtTV Mystery 10/1/2021 10/1/2021 10/1/2021 42 Harrisburg, PA O&O WHTM ABC WHTM-D2, D3, D4, D5 ION, getTV, Laff, WLYH 8/1/2023 44 Oklahoma City, OK O&O O&O KAUT KFOR Independent NBC KAUT-D2, D3, D4 KFOR-D2, D3, D4 CourtTV, CourtTV Mystery, Cozi TV AntennaTV, True Crime, Dabl 6/1/2022 6/1/2022 45 Birmingham, AL O&O WIAT CBS WIAT-D2, D3, D4 CourtTV Mystery, True Crime, CourtTV 4/1/2021 46 Portsmouth, VA O&O O&O WAVY WVBT NBC FOX WAVY-D2, D3, D4 WVBT-D2, D3 Bounce, getTV, ShopLC Cozi TV, Heroes & Icons (4) (4) 47 Greensboro, NC O&O WGHP FOX WGHP-D2, D3, D4 AntennaTV, CourtTV, Dabl (4) 48 Albuquerque, NM O&O O&O O&O LSA LSA LSA KRQE KREZ (14) KBIM (14) KASY (5) KRWB (5) KWBQ (5) CBS CBS CBS MNTV The CW The CW KRQE-D2, D3 KREZ-D2 KBIM-D2 KASY-D2, D3, D4, D5 KRWB-D2, D3, D4 KWBQ-D2, D3, D4 FOX, Bounce FOX FOX CourtTV Mystery, getTV, Cozi TV, AntennaTV Grit, Laff, ION Grit, Laff, ION 10/1/2022 4/1/2022 10/1/2022 10/1/2022 10/1/2022 10/1/2022 9 Market Rank (1) Market Status (2) Full Power Stations Primary Affiliation Low Power Stations / Multicast Channels Other Affiliation FCC License Expiration Date 50 New Orleans, LA O&O O&O WGNO WNOL ABC The CW WGNO-D2, D3, D4 WNOL-D2, D3, D4 AntennaTV, Dabl, TBD CourtTV, Comet, Charge! 6/1/2021 6/1/2021 51 Memphis, TN O&O WREG CBS WREG-D2, D3 News3, AntennaTV 8/1/2021 52 Providence, RI O&O LSA WPRI WNAC (9) CBS FOX WPRI-D2, D3, D4 WNAC-D2, D3, D4 MNTV, Bounce, getTV The CW, Laff, AntennaTV 4/1/2023 4/1/2023 53 Buffalo, NY O&O O&O WNLO WIVB (18) The CW CBS WNLO-D2 WIVB-D2 Bounce CourtTV 6/1/2023 6/1/2023 55 Fresno, CA O&O O&O KSEE KGPE NBC CBS KSEE-D2, D3 KGPE-D2, D3, D4 Bounce, Grit CourtTV Mystery, Light TV, Court TV 12/1/2022 12/1/2022 56 Richmond, VA O&O WRIC ABC WRIC-D2, D3, D4 ION, getTV, Laff (4) 57 Mobile, AL O&O O&O WKRG WFNA CBS The CW WKRG-D2, D3, D4 WFNA-D2, D3, D4 ION, MeTV, CourtTV Bounce, True Crime, Grit 4/1/2021 4/1/2021 58 Wilkes Barre, PA O&O LSA WBRE WYOU (5) NBC CBS WBRE-D2, D3, D4 WYOU-D2, D3, D4 Laff, Grit, True Crime CourtTV Mystery, Bounce, Cozi TV 8/1/2023 8/1/2023 59 Little Rock, AR O&O O&O LSA LSA KARK KARZ KLRT (5) KASN (5) NBC MNTV FOX The CW KARK-D2, D3, D4 KARZ-D2, D3 KLRT-D2 Laff, Grit, Antenna TV Bounce, ION CourtTV Mystery 6/1/2021 6/1/2021 6/1/2021 6/1/2021 60 Albany, NY O&O LSA WTEN WXXA (5) ABC FOX WTEN-D2, D3, D4 WXXA-D2, D3, D4 getTV, True Crime, CourtTV Mystery OTB-TV, Laff, Bounce 6/1/2023 6/1/2023 62 Knoxville, TN O&O WATE ABC WATE-D2, D3, D4 getTV, Laff, Cozi TV 8/1/2021 63 Lexington, KY O&O WDKY FOX WDKY-D2, D3, D4 Comet, Charge, TBD 8/1/2021 65 Dayton, OH O&O LSA WDTN WBDT (7)(18) NBC The CW WDTN-D2, D3 WBDT-D2 CourtTV Mystery, ION Bounce 10/1/2021 10/1/2021 67 Honolulu, HI O&O O&O O&O O&O O&O O&O KHON KHAW (15) KAII (15) KGMD (15) KGMV (15) KHII FOX FOX FOX MNTV MNTV MNTV KHON-D2, D3, D4 KHAW-D2, D3, D4 KAII-D2, D3, D4 The CW, getTV, CourtTV The CW, getTV, CourtTV The CW, getTV, CourtTV 2/1/2023 2/1/2023 2/1/2023 2/1/2023 2/1/2023 2/1/2023 68 Des Moines, IA O&O WHO NBC WHO-D2, D3, D4 Weather, AntennaTV, CourtTV 2/1/2022 69 Green Bay, WI O&O WFRV CBS WFRV-D2, D3 Bounce, True Crime 12/1/2021 70 Wichita, KS O&O O&O O&O O&O O&O KSNW KSNC (16) KSNG (16) KSNK (16) NBC NBC NBC NBC KSNW-D2, D3, D4 KSNC KSNG-D2 KSNK KSNL-LD Telemundo, ION, True Crime Telemundo NBC 6/1/2022 6/1/2022 6/1/2022 6/1/2022 6/1/2022 71 Roanoke, VA O&O O&O WFXR WWCW FOX The CW WFXR-D2, D3, D4 WWCW-D2, D3, D4 The CW, Bounce, CourtTV Mystery FOX, Laff, Grit (4) (4) 74 Springfield, MO LSA O&O O&O KOLR (5) KOZL KRBK CBS MNTV FOX KOLR-D2, D3, D4 KOZL-D2, D3 KRBK-D2, D3, D4 Laff, Grit, ShopLC CourtTV Mystery, Bounce MeTV, Movies!, ION 2/1/2022 2/1/2022 2/1/2022 75 Charleston, WV O&O WOWK CBS WOWK-D2, D3, D4 CourtTV Mystery, Laff, Grit (4) 77 Rochester, NY O&O WROC CBS WROC-D2, D3, D4 Bounce, Laff, CourtTV Mystery 6/1/2023 79 Huntsville, AL O&O O&O WHDF WHNT The CW CBS WHDF-D2 WHNT-D2, D3 CourtTV The CW, AntennaTV 4/1/2021 4/1/2021 82 Colorado Springs, CO O&O O&O KXRM FOX KXRM-D2, D3, D4 KXTU-LD, D2, D3, D4 The CW, ION, CourtTV Mystery The CW, Bounce, Laff, AntennaTV 4/1/2022 83 Waco-Bryan, TX O&O O&O KWKT KYLE FOX MNTV KWKT-D2, D3, D4 KYLE-D2, D3, D4 MNTV, AntennaTV, Bounce FOX, Estrella, Laff 8/1/2022 8/1/2022 85 Brownsville, TX O&O KVEO NBC KVEO-D2, D3, D4, D5 CBS, Estrella, CourtTV Mystery, Grit 8/1/2022 86 Shreveport, LA O&O LSA LSA KTAL KMSS (5) KSHV (6) NBC FOX MNTV KTAL-D2, D3, D4 KSHV-D2, D3, D4 Laff, Cozi TV, HSN CourtTV Mystery, ION, Quest 8/1/2022 6/1/2021 6/1/2021 87 Syracuse, NY O&O WSYR ABC WSYR-D2, D3, D4 AntennaTV, Bounce, Laff 6/1/2023 89 Charleston, SC O&O WCBD NBC WCBD-D2, D3, D4 The CW, ION, Laff (4) 90 Champaign, IL O&O O&O WCIX WCIA MNTV CBS WCIX-D2, D3, D4 WCIA-D2, D3, D4 CBS, CourtTV Mystery, Laff MNTV, Bounce, Grit 12/1/2021 12/1/2021 91 Savannah, GA O&O WSAV NBC WSAV-D2, D3, D4 The CW, CourtTV/MNTV, Laff 4/1/2021 93 El Paso, TX O&O KTSM NBC KTSM-D2, D3, D4 Estrella, CourtTV Mystery, Laff 8/1/2022 94 Baton Rouge, LA O&O LSA O&O O&O WGMB WVLA (6) FOX NBC WGMB-D2, D3 WVLA-D2, D3 WBRL-CD KZUP-CD The CW, Cozi TV Laff, ION The CW Independent 6/1/2021 6/1/2021 6/1/2021 6/1/2021 95 Fayetteville, AR O&O O&O O&O KFTA KNWA KXNW FOX NBC MNTV KFTA-D2, D3, D4 KNWA-D2, D3, D4 NBC, CourtTV Mystery, Bounce FOX, Laff, Grit 6/1/2021 6/1/2021 6/1/2021 96 Burlington, VT O&O LSA WFFF WVNY (5) FOX ABC WFFF-D2, D3,D4 WVNY-D2, D3, D4 CourtTV Mystery, Bounce, AntennaTV Laff, Grit, Quest 4/1/2023 4/1/2023 97 Jackson, MS O&O WJTV CBS WJTV-D2, D3, D4 The CW, ION, CourtTV 6/1/2021 10 Market Rank (1) Market Status (2) Full Power Stations Primary Affiliation Low Power Stations / Multicast Channels Other Affiliation FCC License Expiration Date 99 Myrtle Beach-Florence, SC O&O WBTW CBS WBTW-D2, D3, D4 MNTV/AntennaTV, ION, CourtTV Mystery (4) 100 Tri-Cities, TN-VA O&O WJHL CBS WJHL-D2, D3 ABC, AntennaTV 8/1/2021 102 Greenville, NC O&O WNCT CBS WNCT-D2, D3, D4 The CW, getTV, CourtTV Mystery 12/1/2027 103 Quad Cities, IL LSA O&O O&O KLJB (5) KGCW WHBF FOX The CW CBS KLJB-D2 KGCW-D2, D3, D4 WHBF-D2, D3, D4 MeTV ThisTV, Laff, Bounce Court TV, Grit, CourtTV Mystery 2/1/2022 2/1/2022 12/1/2021 106 Evansville, IN O&O LSA WEHT WTVW (5) ABC The CW WEHT-D2, D3 WTVW-D2, D3, D4 Laff, Cozi TV Bounce, CourtTV Mystery, ION 8/1/2021 8/1/2021 107 Altoona, PA O&O WTAJ CBS WTAJ-D2, D3, D4 CourtTV Mystery, Laff, Grit 8/1/2023 109 Sioux Falls, SD O&O O&O O&O KELO KDLO (17) KPLO (17) CBS CBS CBS KELO-D2, D3, D4 KDLO-D2, D3, D4 KPLO-D2, D3, D4 MNTV, ION, CourtTV Mystery MNTV, ION, CourtTV Mystery MNTV, ION, CourtTV Mystery 4/1/2022 4/1/2022 4/1/2022 110 Tyler-Longview, TX O&O LSA LSA KETK KFXK (6) NBC FOX KETK-D2, D3, D4 KFXK-D2, D3, D4 KTPN-LD (6) Grit, ION, AntennaTV MNTV, CourtTV Mystery, Laff MNTV 8/1/2022 8/1/2022 8/1/2022 111 Ft. Wayne, IN O&O WANE CBS WANE-D2, D3, D4 ION, Laff, CourtTV Mystery 8/1/2021 112 Augusta, GA O&O WJBF ABC WJBF-D2, D3, D4 MeTV, ION, CourtTV Mystery 4/1/2021 115 Lansing, MI LSA O&O WLAJ (5) WLNS (18) ABC CBS WLAJ-D2 The CW+ 10/1/2021 10/1/2021 116 Springfield, MA O&O WWLP NBC WWLP-D2, D3, D4 The CW, ION, CourtTV Mystery 4/1/2023 119 Youngstown, OH LSA O&O O&O WYTV (7) WKBN (18) ABC CBS WYTV- D2 WKBN-D2 WYFX-LD, D2, D3, D4, D5, D6 MNTV FOX FOX, MNTV, ION, Bounce, Laff, getTV 10/1/2021 10/1/2021 122 Lafayette, LA O&O KLFY CBS KLFY-D2, D3, D4 getTV, ION, Laff 6/1/2021 123 Peoria, IL O&O LSA WMBD WYZZ (10) CBS FOX WMBD-D2, D3, D4 Bounce, Laff, CourtTV Mystery 12/1/2021 12/1/2021 125 Bakersfield, CA O&O O&O KGET NBC KGET-D2, D3, D4 KKEY-LP The CW, Telemundo, Laff Telemundo 12/1/2022 12/1/2022 127 Columbus, GA O&O WRBL CBS WRBL-D2, D3, D4 MeTV, ION, Laff 4/1/2021 129 La Crosse, WI O&O O&O WLAX WEUX (13) FOX FOX WLAX-D2, D3, D4 WEUX-D2, D3, D4 AntennaTV, Laff, Grit AntennaTV, CourtTV Mystery, Bounce 12/1/2021 12/1/2021 131 Amarillo, TX O&O LSA LSA KAMR KCIT (5) NBC FOX KAMR-D2, D3, D4 KCIT-D2, D3, D4 KCPN-LP (5) MNTV, Laff, Cozi TV Grit, CourtTV Mystery, Bounce MNTV 8/1/2022 8/1/2022 8/1/2022 138 Midland, TX O&O LSA KMID KPEJ (5) ABC FOX KMID-D2, D3, D4 KPEJ-D2 Laff, CourtTV Mystery, Grit Estrella 8/1/2022 8/1/2022 139 Rockford, IL O&O LSA WQRF WTVO (5) FOX ABC WQRF-D2, D3 WTVO-D2, D3, D4 Bounce, CourtTV Mystery MNTV, Laff, Grit 12/1/2021 12/1/2021 141 Minot-Bismarck, ND O&O O&O O&O O&O KXMA KXMB (12) KXMC KXMD (12) The CW CBS CBS CBS KXMA-D2, D3, D4 KXMB-D2, D3, D4 KXMC-D2, D3, D4 KXMD-D2, D3, D4 CBS, Laff, CourtTV Mystery The CW, Laff, CourtTV Mystery The CW, Laff, CourtTV Mystery The CW, Laff, CourtTV Mystery 4/1/2022 4/1/2022 4/1/2022 4/1/2022 142 Topeka, KS O&O LSA O&O KSNT KTKA (7) NBC ABC KSNT-D2, D3, D4 KTKA-D2, D3, D4 KTMJ-CD, D2, D3, D4 FOX, ION, Bounce getTV, The CW, AntennaTV FOX, CourtTV Mystery, Grit, Laff 6/1/2022 6/1/2022 143 Monroe, AR O&O LSA KARD KTVE (5) FOX NBC KARD-D2, D3, D4 KTVE-D2, D3, D4 Bounce, Grit, Cozi TV KARD, Laff, CourtTV Mystery 6/1/2021 6/1/2021 145 Lubbock, TX O&O LSA KLBK KAMC (5) CBS ABC KLBK-D2, D3 KAMC-D2, D3, D4 CourtTV, AntennaTV CourtTV Mystery, Bounce, QVC2 8/1/2022 8/1/2022 148 Sioux City, IA O&O KCAU ABC KCAU-D2, D3, D4 CourtTV Mystery, Laff, Bounce 2/1/2022 149 Wichita Falls, TX O&O LSA LSA KFDX KJTL (5) NBC FOX KFDX-D2, D3, D4 KJTL-D2, D3, D4 KJBO-LP (5) MNTV, Laff, Cozi TV Grit, Bounce, CourtTV Mystery MNTV 8/1/2022 8/1/2022 8/1/2022 151 Erie, PA O&O LSA WJET WFXP (5) ABC FOX WJET-D2, D3, D4 WFXP-D2, D3, D4 Laff, CourtTV Mystery, Cozi TV Grit, Bounce, AntennaTV 8/1/2023 8/1/2023 152 Joplin, MO O&O LSA KSNF KODE (5) NBC ABC KSNF-D2, D3, D4 KODE-D2, D3, D4 Laff, CourtTV Mystery, Cozi TV Grit, Bounce, ION 2/1/2022 2/1/2022 153 Panama City, FL O&O WMBB ABC WMBB-D2, D3, D4 MeTV, Laff, CourtTV Mystery 2/1/2021 156 Terre Haute, IN O&O LSA WTWO WAWV (5) NBC ABC WTWO-D2, D3, D4 WAWV-D2, D3 Laff, CourtTV Mystery, Cozi TV Grit, Bounce 8/1/2021 8/1/2021 162 Binghamton, NY O&O O&O WIVT ABC WIVT-D2, D3, D4 WBGH-CD, D2 NBC, Laff, CourtTV Mystery NBC, ABC 6/1/2023 6/1/2023 11 Market Rank (1) Market Status (2) Full Power Stations Primary Affiliation Low Power Stations / Multicast Channels Other Affiliation FCC License Expiration Date 163 Wheeling, WV O&O WTRF CBS WTRF-D2, D3, D4 MNTV, ABC, CourtTV Mystery (4) 164 Beckley, WV O&O WVNS CBS WVNS-D2 FOX (4) 165 Abilene, TX O&O LSA KTAB KRBC (5) CBS NBC KTAB-D2, D3, D4 KRBC-D2, D3, D4 Telemundo, CourtTV Mystery, ION Grit, Laff, Bounce 8/1/2022 8/1/2022 167 Billings, MT O&O LSA KSVI KHMT (5) ABC FOX KSVI-D2, D3, D4 KHMT-D2, D3, D4 CourtTV Mystery, Bounce, AntennaTV CourtTV, ION, Laff, 4/1/2022 4/1/2022 168 Hattiesburg, MS O&O WHLT CBS WHLT-D2, D3, D4 The CW, ION, CourtTV Mystery 6/1/2021 169 Rapid City, SD O&O KCLO CBS KCLO-D2, D3, D4 The CW, ION, CourtTV Mystery 4/1/2022 170 Clarksburg, WV O&O WBOY NBC WBOY-D2, D3, D4 ABC, CourtTV Mystery, Laff (4) 171 Utica, NY O&O LSA O&O WFXV WUTR (5) FOX ABC WFXV-D2, D3 WUTR-D2, D3, D4 WPNY-LP CourtTV Mystery, Laff MNTV, Grit, Bounce MNTV 6/1/2023 6/1/2023 6/1/2023 172 Dothan, AL O&O WDHN ABC WDHN-D2, D3, D4 CourtTV Mystery, Laff, Cozi TV 4/1/2021 175 Jackson, TN O&O WJKT FOX WJKT-D2, D3, D4 CourtTV Mystery, Laff, Grit 8/1/2021 178 Elmira, NY O&O WETM NBC WETM-D2, D3, D4 AntennaTV, Laff, CourtTV Mystery 6/1/2023 180 Watertown, NY O&O WWTI ABC WWTI-D2, D3, D4 The CW, Laff, CourtTV Mystery 6/1/2023 181 Alexandria, LA O&O WNTZ FOX WNTZ-D2, D3, D4 Bounce, CourtTV Mystery, Laff 6/1/2021 183 Marquette, MI O&O WJMN CBS WJMN-D2, D3, D4 CourtTV Mystery, Laff, Bounce 10/1/2021 187 Grand Junction, CO O&O O&O LSA O&O KREX KREY (11) KFQX (5) CBS CBS FOX KREX-D2, D3, D4 KREY-D2, D3, D4 KFQX-D2, D3, D4 KGJT-CD Laff, MNTV, Bounce FOX, CourtTV Mystery, Grit CBS, CourtTV Mystery, Grit MNTV 4/1/2022 4/1/2022 4/1/2022 4/1/2022 197 San Angelo, TX O&O LSA KLST KSAN (5) CBS NBC KLST-D2, D3, D4 KSAN-D2, D3, D4 CourtTV Mystery, Grit, AntennaTV Laff, Bounce, ION 8/1/2022 8/1/2022 (1) Market rank refers to ranking the size of the DMA in which the station is located in relation to other DMAs. Source: Investing in Television Market Report 2020 4th Edition , as published by BIA Financial Network, Inc. (2) O&O refers to stations that we own and operate. LSA, or local service agreement, is the general term we use to refer to a contract under which we provide services utilizing our employees to a station owned and operated by an independent third-party. Local service agreements include TBAs, SSAs, JSAs, LMAs and outsourcing agreements. For further information regarding the LSAs to which we are a party, see Note 2 to our Consolidated Financial Statements in Part IV, Item 15(a) of this Annual Report on Form 10-K. (3) Although WDVM is located within the Washington, D.C. DMA, its signal does not reach the entire Washington, D.C. metropolitan area. WDVM serves the Hagerstown, MD sub-market within the DMA. WDVM is the only commercial station licensed in the city of Hagerstown. (4) Application for renewal of license was submitted timely to the FCC. Under the FCC’s rules, the license expiration date is automatically extended pending FCC review of and action on the renewal application. (5) These stations and related multicast channels are owned by Mission. In September 2020, Mission acquired stations KMSS, KPEJ and KLJB from Marshall. In November 2020, Mission acquired stations KASY, KWBQ and KRWB from Tamer and stations WXXA and WLAJ from Shield. In December 2020, Mission acquired WPIX from Scripps. Refer to Item 1, “Business–Recent Acquisitions and Dispositions” for additional information. (6) These stations and related multicast channels are owned by White Knight Broadcasting (“White Knight”). (7) These stations and related multicast channels are owned by Vaughan Media LLC (“Vaughan”). (8) KNVA is owned by 54 Broadcasting, a subsidiary of Vaughan. (9) WNAC is owned by WNAC, LLC. (10) WYZZ is owned by Cunningham Broadcasting Corporation. (11) KREY operates as a satellite station of KREX. (12) KXMB and KXMD operate as satellite stations of KXMC. (13) WEUX operates as a satellite station of WLAX. (14) KREZ and KBIM operate as satellite stations of KRQE. (15) KHAW and KAII operate as satellite stations of KHON. KGMD and KGMV are satellites of KHII. (16) KSNC, KSNG and KSNK operate as satellite stations of KSNW. (17) KDLO and KPLO operate as satellite stations of KELO. (18) These stations are operating under channel sharing arrangements with another Company station in the same market. 12 Industry Background Commercial television broadcasting began in the United States on a regular basis in the 1940s. A limited number of channels are available for over-the-air broadcasting in any one geographic area and a license to operate a television station must be granted by the FCC. All television stations in the country are grouped by The Nielsen Company (US), LLC, a national audience measuring service, into 210 generally recognized television markets, known as DMAs, that are ranked in size according to various metrics based upon actual or potential audience. Each DMA is an exclusive geographic area consisting of all counties in which the home-market commercial stations receive the greatest percentage of total viewing hours. The Nielsen Company (US), LLC publishes data on estimated audiences for the television stations in each DMA on a quarterly basis. The estimates are expressed in terms of a “rating,” which is a station’s percentage of the total potential audience in the market, or a “share,” which is the station’s percentage of the audience actually watching television. A station’s rating in the market can be a factor in determining advertising rates. Most television stations are affiliated with networks and receive a significant part of their programming, including prime-time hours, from networks. Whether or not a station is affiliated with one of the four major networks (NBC, CBS, FOX or ABC) has a significant impact on the composition of the station’s revenue, expenses and operations. Network programming is provided to the affiliate by the network in exchange for the payment to the network of affiliation fees and the network’s retention of a substantial majority of the advertising time during network programs. The network then sells this advertising time and retains the revenue. The affiliate retains the revenue from the remaining advertising time it sells during network programs and from advertising time it sells during non-network programs. Broadcast television stations compete for advertising revenue primarily with other commercial broadcast television stations, MVPDs, OVDs, Google, Facebook and other online media, newspapers and radio stations serving the same market. Non-commercial, religious and Spanish-language broadcasting stations in many markets also compete with commercial stations for viewers. In addition, the Internet and other leisure activities may draw viewers away from commercial television stations. Advertising Sales General Television station revenue is derived from the sale of local and national advertising. All network-affiliated stations are required to carry advertising sold by their networks which reduces the amount of advertising time available for sale by stations. Our stations sell the remaining advertising to be inserted in network programming and the advertising in non-network programming, retaining all of the revenue received from these sales. A national syndicated program distributor will often retain a portion of the available advertising time for programming it supplies in exchange for no fees or reduced fees charged to stations for such programming. These programming arrangements are referred to as barter programming. Advertisers wishing to reach a national audience usually purchase time directly from the networks or advertise nationwide on a case-by-case basis. National advertisers who wish to reach a particular region or local audience often buy advertising time directly from local stations through national advertising sales representative firms. Local businesses purchase advertising time directly from the station’s local sales staff. Advertising rates are based upon a number of factors, including: • a program’s popularity among the viewers that an advertiser wishes to target; • the number of advertisers competing for the available time; • the size and the demographic composition of the market served by the station; • the availability of alternative advertising media in the market; • the effectiveness of the station’s sales force; • development of projects, features and programs that tie advertiser messages to programming; and • the level of spending commitment made by the advertiser. Advertising rates are also determined by a station’s overall ability to attract viewers in its market area, as well as the station’s ability to attract viewers among particular demographic groups that an advertiser may be targeting. Advertising revenue is positively affected by strong local economies. Conversely, declines in advertising budgets of advertisers, particularly in recessionary periods, adversely affect the broadcast industry and, as a result, may contribute to a decrease in the revenue of broadcast television stations. 13 Seasonality Advertising revenue is positively affected by national and regional political election campaigns, and certain events such as the Olympic Games or the Super Bowl. Stations’ advertising revenue is generally highest in the second and fourth quarters of each year, due in part to increases in consumer advertising in the spring and retail advertising in the period leading up to, and including, the holiday season. In addition, advertising revenue is generally higher during even-numbered years when state, congressional and presidential elections occur and advertising is aired during the Olympic Games. Local Sales Local advertising time is sold by each station’s local sales staff who call upon advertising agencies and local businesses, which typically include car dealerships, retail stores and restaurants. Compared to revenue from national advertising accounts, revenue from local advertising is generally more stable and more predictable. We seek to attract new advertisers to our television stations and websites and to increase the amount of advertising time sold to existing local advertisers by relying on experienced local sales forces with strong community ties, producing news and other programming with local advertising appeal and sponsoring or co-promoting local events and activities. We place a strong emphasis on the experience of our local sales staff and maintain an on-going training program for sales personnel. National Sales National advertising time is sold through national sales representative firms which call upon advertising agencies, whose clients typically include automobile manufacturers and dealer groups, telecommunications companies, fast food franchisers and national retailers (some of which may advertise locally). Distribution Revenue We receive compensation from cable, satellite and other MVPDs and OVDs in return for our consent to the retransmission of the signals of our television stations and the carriage of WGN America. The revenues primarily represent payments from the MVPDs and OVDs and are typically based on the number of subscribers they have. Our successful negotiations with these distributors have created agreements that now produce meaningful sustainable revenue streams. Network Affiliations Except for WGN-TV, WDVM and KAUT (independent stations), all of the full power television stations that we own and operate, program or provide sales and other services to as of December 31, 2020 are affiliated with a network pursuant to an affiliation agreement. The agreements with ABC, FOX, NBC, and CBS are the most significant to our operations. The terms of these agreements expire as discussed below: Network Affiliations Expiration Date ABC 29 agreements expire in December 2022. FOX Of the 43 agreements, one (1) expires in December 2021 and 42 expire in August 2023. NBC 35 agreements expire in December 2024. CBS Of the 49 agreements, 13 expire in December 2021, 22 expire in December 2022, and 11 expire in June 2023 and 3 expire in June 2024. (1) The affiliation agreement is owned by a station to which we provide sales and other services. We do not consolidate this station in our financial statements due to lack of a controlling financial interest. Each affiliation agreement provides the affiliated station with the right to broadcast all programs transmitted by the network with which it is affiliated. In exchange, the network receives affiliation fees and has the right to sell a substantial majority of the advertising time during these broadcasts. We expect the network affiliation agreements listed above to be renewed upon expiration. 14 Investments We hold a variety of investments as further described in Note 7 to our Consolidated Financial Statements. Currently, we derive significant cash flows from our largest equity method investment, a 31.3% interest in TV Food Network which operates two 24-hour television networks, Food Network and Cooking Channel, as well as their related websites. During 2020, we received cash distributions from TV Food Network totaling $223.3 million. Our partner in TV Food Network is Discovery, Inc. (“Discovery”), which owns a 68.7% interest in TV Food Network and operates the networks on behalf of the partnership. Food Network programming content attracts audiences interested in food-related topics such as food preparation, dining out, entertaining, food manufacturing, nutrition and healthy eating. Food Network engages audiences by creating original programming that is entertaining, instructional and informative. Food Network is a fully distributed network in the United States with content distributed internationally. Cooking Channel caters to avid food lovers by focusing on food information and instructional cooking programming and delivers content focused on baking, ethnic cuisine, wine and spirits, healthy and vegetarian cooking and kids’ foods. Cooking Channel is a digital-tier network, available nationally and airs popular off-Food Network programming as well as originally produced programming. Competition Competition in the television industry takes place on several levels: competition for audience, competition for programming and competition for advertising. Audience . We compete for audience share specifically on the basis of program popularity. The popularity of a station’s programming has a direct effect on the advertising rates it can charge its advertisers. A portion of the daily programming on the stations that we own or provide services to is supplied by the network with which each station is affiliated. In those periods, the stations are dependent upon the performance of the network programs in attracting viewers. Stations program non-network time periods with a combination of self-produced news, public affairs and other entertainment programming, including movies and syndicated programs. The major television networks have also begun to provide their programming directly to the consumer via portable digital devices, such as tablets and cell phones, which present an additional source of competition for television broadcaster audience share. Other sources of competition for audience include home entertainment systems (such as DVDs and DVRs), video-on-demand and pay-per-view, the Internet (including network distribution of programming through websites and mobile platforms) and gaming devices. Although the commercial television broadcast industry historically has been dominated by the ABC, NBC, CBS and FOX television networks, other newer television networks and the growth in popularity of subscription systems, such as local cable and direct broadcast satellite (“DBS”) systems and video streaming services, which air exclusive programming not otherwise available in a market, have become significant competitors for the over-the-air television audience. WGN America’s NewsNation, our growing national newscast, competes with other established national newscasts such as CNN, FOX News and MSNBC for viewers. WGN America’s entertainment programming also competes for viewers with other distribution technologies. Programming . Competition for programming involves negotiating with national program distributors or syndicators that sell first-run and rerun packages of programming. Stations compete against in-market broadcast station operators for exclusive access to off-network reruns and first-run product in their respective markets. Cable systems generally do not compete with local stations for programming, although various national cable networks from time to time have acquired programs that would have otherwise been offered to local television stations. Warner Media, LLC, Comcast Corporation, Viacom Inc., CBS Corporation, The News Corporation Limited and the Walt Disney Company each owns a television network and multiple cable networks and also owns or controls major production studios, which are the primary sources of programming for the networks. It is uncertain whether in the future such programming, which is generally subject to short-term agreements between the studios and the networks, will be moved from or to the networks. Television broadcasters also compete for non-network programming unique to the markets they serve. As such, stations strive to provide exclusive news stories and unique features such as investigative reporting and coverage of community events and to secure broadcast rights for regional and local sporting events. Advertising . Our stations compete for advertising revenue with other television stations in their respective markets and other advertising media such as newspapers, radio stations, magazines, outdoor advertising, transit advertising, yellow page directories, direct mail, MVPDs, OVDs and online media (e.g. Google, Facebook, etc.). Competition for advertising dollars in the broadcasting industry occurs primarily within individual markets. Generally, a television broadcast station in a particular market does not compete with stations in other market areas. Our national newscast cable network also competes for advertising revenue with other advertising media and with other established national newscasts such as CNN, FOX News and MSNBC. 15 The broadcasting industry is continually faced with technological change and innovation which increase the popularity of competing entertainment and communications media. Further advances in technology may increase competition for household audiences and advertisers. An increase in the popularity of OVDs may result in popular product offerings that do not include television broadcast stations. The increased use of digital technology by MVPDs, along with video compression techniques, will reduce the bandwidth required for television signal transmission. These technological developments are applicable to all video delivery systems, including over-the-air broadcasting, and have the potential to provide vastly expanded programming to highly targeted audiences. Reductions in the cost of creating additional channel capacity could lower entry barriers for new channels and encourage the development of increasingly specialized “niche” programming. This ability to reach very narrowly defined audiences is expected to alter the competitive dynamics for advertising expenditures. We are unable to predict the effect that these or other technological changes will have on the broadcast television industry or on the future results of our operations or the operations of the stations to which we provide services. Federal Regulation Television broadcasting is subject to the jurisdiction of the FCC under the Communications Act of 1934, as amended (the “Communications Act”). The following is a brief discussion of certain (but not all) provisions of the Communications Act and the FCC’s regulations and policies that affect the business operations of television broadcast stations. Over the years, the U.S. Congress and the FCC have added, amended and deleted statutory and regulatory requirements to which station owners are subject. Some of these changes have a minimal business impact whereas others may significantly affect the business or operation of individual stations or the broadcast industry as a whole. For more information about the nature and extent of FCC regulation of television broadcast stations, refer to the Communications Act and the FCC’s rules, case precedent, public notices and policies. License Grant and Renewal. The Communications Act prohibits the operation of broadcast stations except under licenses issued by the FCC. Television broadcast licenses are granted for a maximum term of eight years and are subject to renewal upon application to the FCC. The FCC is required to grant an application for license renewal if during the preceding term the station served the public interest, the licensee did not commit any serious violations of the Communications Act or the FCC’s rules, and the licensee committed no other violations of the Communications Act or the FCC’s rules which, taken together, would constitute a pattern of abuse. A majority of renewal applications are routinely granted under this standard. If a licensee fails to meet this standard the FCC may still grant renewal on terms and conditions that it deems appropriate, including a monetary forfeiture or renewal for a term less than the normal eight-year period. After a renewal application is filed, interested parties, including members of the public, may file petitions to deny the application, to which the licensee/renewal applicant is entitled to respond. After reviewing the pleadings, if the FCC determines that there is a substantial and material question of fact whether grant of the renewal application would serve the public interest, the FCC is required to hold a hearing on the issues presented. If, after the hearing, the FCC determines that the renewal applicant has met the renewal standard, the FCC will grant the renewal application. If the licensee/renewal applicant fails to meet the renewal standard or show that there are mitigating factors entitling it to renewal subject to appropriate sanctions, the FCC can deny the renewal application. In the vast majority of cases where a petition to deny is filed against a renewal application, the FCC ultimately grants the renewal without a hearing. No competing application for authority to operate a station and replace the incumbent licensee may be filed against a renewal application. In addition to considering rule violations in connection with a license renewal application, the FCC may sanction a station licensee for failing to observe FCC rules and policies during the license term, including the imposition of a monetary forfeiture. Under the Communications Act, the term of a broadcast license is automatically extended during the pendency of the FCC’s processing of a timely renewal application. We initiated the license renewal process for our stations in June 2020 and will continue these filings through April 2023. Station Transfer . The Communications Act prohibits the assignment or the transfer of control of a broadcast license without prior FCC approval. Ownership Restrictions . The Communications Act limits the extent of non-U.S. ownership of companies that own U.S. broadcast stations. Under this restriction, the holder of a U.S. broadcast license may have no more than 20% non-U.S. ownership (by vote and by equity). The Communications Act further prohibits more than 25% indirect foreign ownership or control of a licensee through a parent company if the FCC determines the public interest will be served by enforcement of such restriction. The FCC has interpreted this provision of the Communications Act to require an affirmative public interest finding before indirect foreign ownership of a broadcast licensee may exceed 25%. The FCC will entertain and authorize, on a case-by-case basis and upon a sufficient public interest showing and favorable executive branch review, proposals to exceed the 25% indirect foreign ownership limit in broadcast licensees. 16 The FCC also has rules which establish limits on the ownership of broadcast stations. These ownership limits apply to attributable interests in a station licensee held by an individual, corporation, partnership or other entity. In the case of corporations, officers, directors and voting stock interests of 5% or more (20% or more in the case of certain passive investors, such as insurance companies and bank trust departments) are considered attributable interests. For partnerships, all general partners and non-insulated limited partners are attributable. Limited liability companies are treated the same as partnerships. The FCC also considers attributable the holder of more than 33% of a licensee’s total assets (defined as total debt plus total equity), if that person or entity also provides over 15% of the station’s total weekly broadcast programming or has an attributable interest in another media entity in the same market which is subject to the FCC’s ownership rules. If a shareholder of Nexstar holds a voting stock interest of 5% or more (20% or more in the case of certain passive investors, such as insurance companies and bank trust departments), we must report that shareholder, its parent entities, and attributable individuals and entities of both, as attributable interest holders in Nexstar. The FCC is required to review its media ownership rules every four years to eliminate those rules it finds no longer serve the “public interest, convenience and necessity.” In August 2016, the FCC adopted a Second Report and Order (the “2016 Ownership Order”) concluding the agency’s 2010 and 2014 quadrennial reviews. The 2016 Ownership Order (1) retained the 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 ban on newspaper/broadcast cross-ownership in local markets while considering waivers and providing an exception for failed or failing entities, (4) retained the dual network rule, (5) made television JSA relationships attributable interests and (6) defined a category of sharing agreements designated as SSAs between commercial television stations and required public disclosure of those SSAs (while not considering them attributable). 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 market for common ownership of two television stations in the market to be permissible (the “eight voices test”), (3) retained the general prohibition on common ownership of two “top four” stations in a local market but provided for case-by-case review, (4) eliminated the television JSA attribution rule, and (5) retained the SSA definition and disclosure requirement for television stations. These rule modifications took effect on February 7, 2018, when the U.S. Court of Appeals for the Third Circuit (the “Third Circuit”) denied a mandamus petition which had sought to stay their effectiveness. On September 23, 2019, however, the Third Circuit issued an opinion vacating the Reconsideration Order on the ground that the FCC had failed to adequately analyze the effect of the Reconsideration Order’s deregulatory rule changes on minority and woman ownership of broadcast stations. The Third Circuit later denied petitions for en banc rehearing and its decision took effect on November 29, 2019. On December 20, 2019, the FCC issued an order reinstating the local television ownership rule, the radio/television cross-ownership rule, the newspaper/broadcast cross-ownership rule and the television JSA attribution rule as they existed prior to the Reconsideration Order (including the eight voices test with respect to local television ownership). On April 17, 2020, the FCC and a group of media industry stakeholders (including Nexstar) filed separate petitions for certiorari requesting that the U.S. Supreme Court review the Third Circuit’s decision. The Supreme Court granted certiorari on October 2, 2020. It held oral argument in the case on January 19, 2021, and a decision is expected later in 2021. 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 were filed in the second quarter of 2019. As of December 31, 2020, the proceeding remains open. Local Television Ownership (Duopoly Rule) . Under the current local television ownership, or “duopoly,” rule, a single entity is allowed to own or have attributable interests in two television stations in a market if (1) the two stations do not have overlapping service areas, or (2) after the combination there are at least eight independently owned and operating full-power television stations in the DMA with overlapping service contours and one of the combining stations is not ranked among the top four stations in the DMA. The duopoly rule also allows the FCC to consider waivers to permit the ownership of a second station, where otherwise prohibited, where the second station has failed or is failing or unbuilt. In its November 2017 Reconsideration Order, the FCC modified the duopoly rule to eliminate the “eight voices” test and permit case-by-case review of proposed “top four” combinations. As a result of the Third Circuit’s September 2019 opinion vacating the Reconsideration Order, the duopoly rule has been reinstated to the form in which it existed prior to the Reconsideration Order, although the Third Circuit’s decision is under review by the U.S. Supreme Court. The FCC attributes toward the local television ownership limits another in-market station when one station owner programs that station pursuant to a TBA or LMA, if the programmer provides more than 15% of the second station’s weekly broadcast programming. However, LMAs entered into prior to November 5, 1996 are exempt attributable interests until the FCC determines otherwise. This “grandfathering,” when reviewed by the FCC, is subject to possible extension or termination. In its 2016 Ownership Order, the FCC reinstated a rule that attributed another in-market station toward the local television ownership limits when one station owner sells more than 15% of the second station’s weekly advertising inventory under a JSA. Parties to JSAs entered into prior to March 31, 2014 were permitted to continue to operate under these JSAs until September 30, 2025. In the Reconsideration Order, the FCC eliminated the JSA attribution rule in its entirety. As a result of the Third Circuit’s September 2019 opinion vacating the Reconsideration Order, the rule has been reinstated, although the Third Circuit’s decision is under review by the U.S. Supreme Court. 17 In certain markets, the Company owns and operates both full-power and low-power television broadcast stations. The FCC’s duopoly rule and policies regarding ownership of television stations in the same market apply only to full-power television stations and not low-power television stations. In a number of markets, the Company owns two stations in compliance with the duopoly rule. We also are permitted to own two or more stations in various other markets pursuant to waivers under the FCC’s rules permitting common ownership of a “satellite” television station in a market where a licensee also owns the “primary” station. Additionally, we are permitted to own two stations in the Quad Cities, Illinois/Iowa, Greenville-Spartanburg, South Carolina-Asheville, North Carolina and Hartford-New Haven, Connecticut markets pursuant to waivers allowing ownership of a second station where that station is “failing.” We also own two “top four” stations in the Indianapolis, Indiana market pursuant to an FCC determination that prohibition of such ownership would not serve the public interest. In all of the markets where we have entered into local service agreements, except for six, we provide programming comprising less than 15% of the second station’s programming. In five of the markets where we provide more programming to the second station—WFXP in Erie, Pennsylvania, KHMT in Billings, Montana, KFQX in Grand Junction, Colorado, KNVA in Austin, Texas and WNAC-TV in Providence, Rhode Island—the TBAs or LMAs were entered into prior to November 5, 1996 and are considered grandfathered. Therefore, we may continue to program these stations under the terms of these agreements until the FCC determines otherwise. Our LMA with Mission for WPIX in New York is not attributable because we do not own a station in that market. With respect to our other local service agreements, a majority of our JSAs are once again attributable as a result of the JSA attribution rule’s reinstatement following the September 2019 Third Circuit decision, but we are allowed to maintain those agreements in effect through September 2025. Our SSAs with independently owned same-market stations are non-attributable. We may therefore retain our existing SSAs in effect indefinitely, but we must disclose them, and the FCC may in the future consider regulations with respect to such agreements. National Television Ownership. There is no limit on the number of television stations which a party may own nationally. However, the FCC’s rules limit the percentage of U.S. television households which a party may reach through its attributable interests in television stations to 39%. This rule originally provided that when calculating a party’s nationwide aggregate audience coverage, the ownership of a UHF station would be counted as 50% of a market’s percentage of total national audience. In August 2016, the FCC adopted an order eliminating 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 discount, which took effect once again in June 2017. A federal appeals court dismissed a petition for review of the discount’s reinstatement in July 2018. In December 2017, the FCC initiated a proceeding to broadly reexamine its national television ownership rule, including the percentage reach cap and the UHF discount. Comments and reply comments in this proceeding were filed in 2018, and the proceeding remains open. The stations that Nexstar owns and provides services to have a combined national audience reach of approximately 39% of all U.S. television households (applying the FCC’s UHF discount). Radio/Television Cross-Ownership Rule (One-to-a-Market Rule) . In markets with at least 20 independently owned media “voices,” ownership of one television station and up to seven radio stations, or two television stations (if allowed under the television duopoly rule) and six radio stations is permitted. If the number of independently owned media “voices” is fewer than 20 but greater than or equal to 10, ownership of one television station (or two if allowed) and four radio stations is permitted. In markets with fewer than 10 independent media “voices,” ownership of one television station (or two if allowed) and one radio station is permitted. In calculating the number of independent media “voices” in a market, the FCC includes all independently owned radio and television stations, independently owned cable systems (counted as one voice), and independently owned daily newspapers which have circulation that exceeds 5% of the households in the market. In all cases, the television and radio components of the combination must also comply, respectively, with the local television ownership rule and the local radio ownership rule. The FCC eliminated the radio/television cross-ownership rule in its November 2017 Reconsideration Order but reinstated it following the Third Circuit’s September 2019 decision, although the Third Circuit’s decision is under review by the U.S. Supreme Court. Local Newspaper/Broadcast Cross-Ownership Rule . Under this rule, a party is prohibited from having an attributable interest in a television (or radio) station and a daily newspaper in the same market. The FCC eliminated the newspaper/broadcast cross-ownership rule in its November 2017 Reconsideration Order but reinstated it following the Third Circuit’s September 2019 decision, although the Third Circuit’s decision is under review by the U.S. Supreme Court. The FCC may consider waivers or grant exemptions from the rule in certain circumstances. 18 Local Television/Cable Cross-Ownership . There is no FCC rule prohibiting common ownership of a cable television system and a television broadcast station in the same area. MVPD Carriage of Local Television Signals . Broadcasters may obtain carriage of their stations’ signals on cable, satellite and other MVPDs through either mandatory carriage or through “retransmission consent.” Every three years all stations must formally elect either mandatory carriage (“must-carry” for cable distributors and “carry one-carry all” for satellite television providers) or retransmission consent. The next election must be made by October 1, 2023 and will be effective January 1, 2024. Must-carry elections require that the MVPD carry one station programming stream and related data in the station’s local market. However, MVPDs may decline a must-carry election in certain circumstances. MVPDs do not pay a fee to stations that elect mandatory carriage. A broadcaster that elects retransmission consent waives its mandatory carriage rights, and the broadcaster and the MVPD must negotiate in good faith for carriage of the station’s signal. Negotiated terms may include channel position, service tier carriage, carriage of multiple program streams, compensation and other consideration. If a broadcaster elects to negotiate retransmission terms, it is possible that the broadcaster and the MVPD will not reach agreement and that the MVPD will not carry the station’s signal. MVPD operators have actively sought to change the regulations under which retransmission consent is negotiated before both the U.S. Congress and the FCC in order to increase their bargaining leverage with television stations. On March 3, 2011, the FCC initiated a Notice of Proposed Rulemaking to reexamine its rules (i) governing the requirements for good faith negotiations between MVPDs and broadcasters, including implementing a prohibition on one station negotiating retransmission consent terms for another station under a local service agreement; (ii) for providing advance notice to consumers in the event of dispute; and (iii) to extend certain cable-only obligations to all MVPDs. The FCC also asked for comment on eliminating the network non-duplication and syndicated exclusivity protection rules, which may permit MVPDs to import out-of-market television stations in certain circumstances. In March 2014, the FCC amended its rules governing “good faith” retransmission consent negotiations to provide that it is a per se violation of the statutory duty to negotiate in good faith for a television broadcast station that is ranked among the top-four stations in a market (as measured by audience share) to negotiate retransmission consent jointly with another top-four station in the same market if the stations are not commonly owned. On December 5, 2014, the U.S. Congress extended the joint negotiation prohibition to all non-commonly owned television stations in a market. Under this rule and the subsequent legislation, stations may not (1) delegate authority to negotiate or approve a retransmission consent agreement to another non-commonly owned station located in the same DMA or to a third-party that negotiates on behalf of another non-commonly owned station in the same DMA; or (2) if located in the same DMA and not commonly owned, facilitate or agree to facilitate coordinated negotiation of retransmission consent terms between themselves, including through the sharing of information. Accordingly, the in-market VIEs with which we have sharing agreements must separately negotiate their respective retransmission consent agreements with MVPDs. Concurrently with its adoption of the prohibition on certain joint retransmission consent negotiations, 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. Comments and reply comments on the further notice were filed in 2014, and the proceeding remains open. Congress’s December 5, 2014 legislation also directed the FCC to commence a rulemaking to “review its totality of the circumstances test for good faith [retransmission consent] negotiations.” The FCC commenced this proceeding in September 2015, and comments and reply comments were filed in 2015 and 2016. In July 2016, the then-Chairman of the FCC publicly announced that the agency would not adopt additional rules in this proceeding. However, the proceeding remains open. The FCC’s rules also govern which local television signals a satellite subscriber may receive. The U.S. Congress and the FCC have also imposed certain requirements relating to satellite distribution of local television signals to “unserved” households that do not receive a useable signal from a local network-affiliated station and to cable and satellite carriage of out-of-market signals. Certain 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 of 1976, as amended (the “Copyright Act”). In December 2014, the FCC issued a Notice of Proposed Rulemaking proposing to interpret the term “MVPD” to encompass 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. The Company has elected to exercise retransmission consent rights for all of its stations where it has legal rights to do so. The Company has negotiated retransmission consent agreements with the majority of MVPDs serving its markets to carry the stations’ signals and, where permitted by its network affiliation agreements, will negotiate agreements with OVDs. 19 Human Capital Management Values . Our key human capital management objectives are to attract, develop, and retain top industry talent that reflects the diversity of the communities in which we operate and provide services. We encourage every individual’s contributions and personal growth and foster work environments that provide personal pride through job satisfaction and a balanced life. We embrace the communities in which we operate and promote open communications, innovation and creativity. Engagement and Opportunities . With markets ranging from small to major, we offer a broad range of opportunities for every experience level, including for those who are just starting their broadcasting career or are ready to make the leap into a larger market. Our market diversity allows us to give our employees room to grow and progress in their careers. Our management team supports a culture of developing future leaders from our existing workforce, enabling us to promote from within for many leadership positions. As of December 31, 2020, our voluntary retention rate for employees was approximately 71%. We offer our employees a broad range of company-paid benefits and we believe our compensation package and benefits are competitive with others in our industry. Our employee wages are competitive and consistent with employee positions, experience, knowledge and location. In addition, in 2019, the Company initiated a company-wide minimum wage above the federal requirement, which has been increased effective January 1, 2021. Annual wage increases and incentive payments are based on merit and are communicated to employees as a part of the annual review process. Community Outreach . At Nexstar, we pride ourselves on the opportunities we provide for our employees to give back to their communities. On our 20th anniversary in June 2016, we organized our inaugural Founders Day of Caring, an employee driven effort focused on local non-profits and charities. Our employees fanned out across the country to contribute thousands of hours of community services. Founders Day has continued to be a success for our employees and their communities, with a pause in 2020. We anticipate resuming our Founders Day activities in 2021. Diversity and Inclusion. We strive to foster a culture of diversity and inclusion so all of our employees feel respected and none of them feels discriminated against. In 2020, we launched our Diversity and Inclusion Council, a working committee dedicated to creating a path toward a more diverse and inclusive workplace, where diverse talent can flourish and build a career. The Council is comprised of ten members from throughout the Company, with membership changing periodically. In 2020, the Council, initiated our Employee Resource Groups and established a model mentorship program that rolled out Company-wide in 2020. We value diversity at all levels and continue to focus on extending our diversity and inclusion initiatives across our entire workforce. We believe a diverse workforce fosters innovation and cultivates an environment of unique perspectives. As of December 31, 2020, approximately 41% and 32% of our employees and our management, respectively, were women. In the U.S., approximately 30% and 23% of our employees and our management, respectively, were racially/ethnically diverse. In order to ensure accountability in making progress in our diversity goals, a portion of our managers’ bonuses are tied to diversity metrics in their markets. In addition, we have implemented Employee Resource Groups in the categories of Latinx, Women, African American, Veterans and LGBTQ+. These groups are designed to bring together employees who share similar cultures, backgrounds, and/or interests, as well as those employees who wish to provide support to that group. Training and Mentorship . We are committed to developing the talents of our employees. We have partnered with Everfi, a leading provider of online workplace training, to deliver engaging and compelling content to all employees. Our catalog of courses includes harassment prevention, diversity/equity/inclusion, ethics, managing bias, supervisor/manager skills, and most recently, COVID-19 safety. In addition, during the fourth quarter of 2020, our Corporate Human Resources team conducted a successful pilot for a new mentorship program that will be launched company-wide in March 2021. The program matches mentors and mentees across the company and provides the pairs with a 12-topic curriculum covering skills such as communications, networking, work/life balance, and goal setting. In 2018, Nexstar settled a U.S. Department of Justice Antitrust Division investigation, as did a number of other television broadcasting companies. Nexstar did not admit any wrongdoing but, as a part of the settlement agreement, it agreed to take certain actions, including providing training programs to all officers and sales related employees to ensure they understand the antitrust laws, how those laws apply to Nexstar and our employees and to help them spot common patterns that may implicate antitrust laws. Nexstar sales employees also participate in a media sales training program provided by The Center for Sales Strategy, a third party vendor. 20 Safety and COVID-19 Response . We value our employees and are committed to providing a safe and healthy workplace. All employees are required to comply with our safety rules and are expected to actively contribute to making our company a safer place to work. In response to COVID-19, we implemented remote working for many of our employees. Our work locations developed and implemented their own plans for staffing during the pandemic, with a focus on reducing headcounts within our facilities to reduce the risk for those employees whose job functions could not be performed remotely, and in compliance with applicable state and local safety requirements and protocols. Currently, a majority of our workforce have returned to working in a facility under strong safety protocols . In allowing additional employees to return to our facilities, we considered and continue to consider guidance from the Centers for Disease Control, other health organizations, federal, state and local governmental authorities, and our customers, among others. We have taken, and continue to take, robust actions to help protect the health, safety and well-being of our employees, to support our suppliers and local communities, and to continue to serve our customers. Employees. As of December 31, 2020, we had a total of 12,412 employees, comprised of 11,086 full-time and 1,326 part-time employees. As of December 31, 2020, 1,548 of our employees were covered by collective bargaining agreements. We believe that our employee relations are satisfactory, and we have not experienced any work stoppages at any of our facilities. However, we cannot assure you that our collective bargaining agreements will be renewed in the future, or that we will not experience a prolonged labor dispute, which could have a material adverse effect on our business, financial condition or results of operations. Legal Proceedings From time to time, we are involved in litigation that arises from the ordinary operations of business, such as contractual or employment disputes or other general actions. In the event of an adverse outcome of these proceedings, we believe the resulting liabilities would not have a material adverse effect on our financial condition or results of operations. See Note 17 to our Consolidated Financial Statements included in Part IV, Item 15(a) of this Annual Report on Form 10-K is incorporated herein by reference. Available Information We file annual, quarterly and current reports, proxy statements and other information with the SEC. The SEC maintains a website that contains reports, proxy and information statements and other information regarding issuers, including us, that file electronically with the SEC. The address for the SEC’s website is http://www.sec.gov. Due to the availability of our filings on the SEC website, we do not currently make available our filings on our Internet website. Upon request, we will provide free copies of our annual reports on Form 10-K, quarterly reports on Form 10-Q and any other filings with the SEC. Requests can be sent to Nexstar Media Group, Inc., Attn: Investor Relations, 545 E. John Carpenter Freeway, Suite 700, Irving, TX 75062. Additional information about us, our stations and the stations we program or provide services to can be found on our website at http://www.nexstar.tv . We do not incorporate the information contained on or accessible through our corporate web site into this Annual Report on Form 10-K. 21 Item 1A. Risk Factors You should carefully consider the risks described below and all of the information contained in this document. The risks and uncertainties described below are not the only risks and uncertainties that the Company faces. Additional risks and uncertainties not presently known to the Company or that the Company currently deems immaterial may also impair the Company’s business operations. If any of those risks occur, the Company’s business, financial condition and results of operations could suffer. The risks discussed below also include forward-looking statements, and the Company’s actual results may differ substantially from those discussed in these forward-looking statements. See “Cautionary Note Regarding Forward-Looking Statements” for further information. Summary Risk Factors Our business is subject to a number of risks, including risks that may prevent us from achieving our business objectives or may adversely affect our business, financial condition, results of operations, cash flows, and prospects. These risks are discussed more fully below and include, but are not limited to: Risks Related to Our Operations • COVID-19 and other public health emergencies may adversely affect our business, results of operations, financial condition, cash flows and stock price; • Demand for television advertising may be adversely affected as consumers migrate to alternative media for entertainment; • Our substantial debt could limit our ability to grow and compete; • The owners of the VIEs may make decisions regarding the operation of their respective stations that could reduce the amount of cash we receive under our local service agreements; • Our postretirement benefit plan obligations may be increased by a declining stock market and lower interest rates; • The recording of deferred tax asset valuation allowances in the future or the impact of tax law changes on such deferred tax assets could affect our operating results; • We may face additional tax liabilities stemming from proposed and ongoing tax audits; • The revenue generated by our stations could decline substantially if they fail to maintain or renew their network agreements on favorable terms, or at all; • Changes in retransmission consent revenues or regulations could have an adverse effect on our business, financial condition and results of operations; • The FCC may refuse to grant renewal of the FCC license of any of our stations, resulting in that station ceasing operations; • Our growth may be limited if we are unable to implement our acquisition strategy; • FCC actions may restrict our ability to create duopolies; • The FCC may decide to terminate “grandfathered” time brokerage agreements; • The FCC’s multiple ownership rules limit our ability to acquire television stations in particular markets; • Future impairment charges on our goodwill, intangible assets and equity investments could adversely affect our future results from operations and cash flows. • Any decrease or suspension of dividend payment could cause our stock price to decline; • We may not be able to adequately protect the intellectual property and other proprietary rights that are material to our business; • Cybersecurity risks could affect our operating effectiveness; and 22 • A significant concentration of our revenue is to a select number of customers . Risks Related to Our Industry • Our operating results are dependent on advertising revenue, making us potentially more vulnerable to economic downturns and other factors beyond our control; • Due to our high fixed operating expenses, a relatively small decrease in advertising revenue could have a significant negative impact on our financial results; • Our television business may not be able to compete effectively if we are unable to respond to changes in technology and evolving advertising trends; • Intense competition in the television industry and alternative forms of media could limit our growth and profitability; • New legislation and regulation could significantly impact the operations of our stations or the television broadcasting industry as a whole; and • The FCC’s reallocation of a portion of the spectrum available for use by television broadcasters to wireless broadband use could substantially impact our future operations. Risks Related to Tribune’s Emergence from Bankruptcy • We may be unable to settle unresolved claims filed in connection with Tribune’s Chapter 11 proceedings and resolve the appeals seeking to overturn the order confirming Tribune’s bankruptcy plan. Risks Related to Tribune Publishing’s Spin-Off • Tribune may be required to pay substantial U.S. federal income taxes if the Tribune Publishing spin-off does not qualify as a tax-free distribution under Section 355 of the Internal Revenue Code; • Federal and state fraudulent transfer laws and Delaware corporate law may permit a court to void the Tribune Publishing spin-off; and • We may be exposed to additional liabilities as a result of the Tribune Publishing spin-off. Risks Related to Our Operations Our business, results of operations, financial condition, cash flows and stock price have been and may continue to be adversely affected by pandemics, epidemics or other public health emergencies, such as the recent outbreak of COVID-19. Our business, results of operations, financial condition, cash flows and stock price have been and may continue to be adversely affected by the COVID-19 outbreak. In March 2020, the World Health Organization characterized COVID-19 as a pandemic, and the President of the United States declared the COVID-19 outbreak a national emergency. The outbreak has resulted in governments in the U.S. and around the world implementing increasingly stringent measures to help control the spread of the virus, including quarantines, “shelter in place” and “stay at home” orders, travel restrictions, business curtailments, school closures, and other measures. We are considered an essential industry, as defined by the U.S. Department of Homeland Security. Although we have continued to operate our facilities to date consistent with federal guidelines and state and local orders, the outbreak of COVID-19 and any preventive or protective actions taken by governmental authorities have had and may continue to have a material adverse effect on our workforce and operations, customers (e.g. advertisers and advertising agencies, MVPDs and OVDs) and supply chain (e.g. networks). The impact of COVID-19 significantly reduced the demand for television advertising in 2020, mostly in the first part of the second quarter, and has had, and may continue to have, a material adverse impact on our financial condition, results of operations and cash flows in the future. The extent to which COVID-19 may adversely impact our business in the future depends on future developments, which are highly uncertain and unpredictable, depending upon the severity and duration of the outbreak and the effectiveness of actions in the United States taken to contain or mitigate its effects. Any resulting financial impact cannot be estimated reasonably at this time, but may materially adversely affect our business, results of operations, financial condition and cash flows. Even after the COVID-19 pandemic has subsided, we may experience materially adverse impacts to our business due to any resulting economic recession or depression. Additionally, concerns over the economic impact of COVID-19 have caused extreme volatility in financial and other capital markets, which has and may continue to adversely impact our stock price and our ability to access capital markets. 23 Our liquidity could also be negatively impacted if these conditions continue for a significant period of time and we may be required to pursue additional sources of financing to obtain working capital to meet our business operating requirements, our capital expenditures and to continue to service our debt. Capital and credit markets have been disrupted by the crisis and our ability to obtain any required financing on reasonable terms or at all is not guaranteed and is largely dependent upon evolving market conditions and other factors. Depending on the continued impact of the crisis, further actions may be required to improve the Company’s cash position, working capital and capital structure. Our credit rating could also be negatively affected, which could also impact our liquidity, our financial condition and our ability to obtain financing. A sustained economic downturn may also result in the carrying values of our major assets, including goodwill, indefinite-lived intangible assets, long-lived assets and equity investments exceeding their fair value, which may require us to recognize an impairment to those assets. A sustained downturn in the financial markets and related pension asset values may have the effect of increasing our pension funding obligations in order to ensure that our qualified pension plans continue to be adequately funded, which may divert cash flow from other uses. General trends in the television industry could adversely affect demand for television advertising as consumers migrate to alternative media, including the Internet, for entertainment. Television viewing among consumers has been negatively impacted by the increasing availability of alternative media, including the Internet. In recent years, demand for television advertising has been declining and demand for advertising in alternative media has been increasing, and we expect this trend to continue. The networks have begun streaming some of their programming on the Internet and other distribution platforms simultaneously with, or in close proximity to, network programming broadcast on local television stations, including those we own or provide services to. These and other practices by the networks dilute the exclusivity and value of network programming originally broadcast by the local stations and may adversely affect the business, financial condition and results of operations of our stations. Also, refer to “Risks Related to Our Industry––Intense competition in the television industry and alternative forms of media could limit our growth and profitability.” The Company’s substantial debt could limit its ability to grow and compete. As of December 31, 2020, the Company had $7.7 billion of debt, net of unamortized financing costs, discounts and premium, which represented 75.3% of the total combined capitalization. The Company’s high level of debt could have important consequences to its business. For example, it could: • limit the Company’s ability to borrow additional funds or obtain additional financing in the future; • limit the Company’s ability to pursue acquisition opportunities; • expose the Company to greater interest rate risk since the interest rate on borrowings under the senior secured credit facilities is variable; • limit the Company’s flexibility to plan for and react to changes in our business and our industry; and • impair our ability to withstand a general downturn in our business and place us at a disadvantage compared to our competitors that are less leveraged. See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Contractual Obligations” for disclosure of the approximate aggregate amount of principal indebtedness scheduled to mature. The Company could also incur additional debt in the future. The terms of the Company’s senior secured credit facilities, as well as the indentures governing Nexstar’s 5.625% senior unsecured notes due 2027 (“5.625% Notes due 2027”) and Nexstar’s 4.75% senior unsecured notes due 2028 (“4.75% Notes due 2028”), limit, but do not prohibit the Company from incurring substantial amounts of additional debt. To the extent the Company incurs additional debt, it would become even more susceptible to the leverage-related risks described above. 24 The agreements governing the Company’s debt contain various covenants that limit management’s discretion in the operation of its business. The terms of the Company’s senior secured credit facilities and the indentures governing Nexstar’s 5.625% Notes due 2027 and Nexstar’s 4.75% Notes due 2028 contain various restrictive covenants customary for arrangements of these types that restrict our ability to, among other things: • incur additional debt and issue preferred stock; • pay dividends and make other distributions; • make investments and other restricted payments; • make acquisitions; • merge, consolidate or transfer all or substantially all of our assets; • enter into sale and leaseback transactions; • create liens; • sell assets or stock of our subsidiaries; and • enter into transactions with affiliates. In addition, Nexstar’s senior secured credit facility requires us to maintain or meet certain financial ratios, including a maximum consolidated first lien net leverage ratio. Future financing agreements may contain similar, or even more restrictive, provisions and covenants. Because of these restrictions and covenants, management’s ability to operate our business at its discretion is limited, and we may be unable to compete effectively, pursue acquisitions or take advantage of new business opportunities, any of which could harm our business. If we fail to comply with the restrictions in present or future financing agreements, a default may occur. A default could allow creditors to accelerate the related debt as well as any other debt to which a cross-acceleration or cross-default provision applies. A default could also allow creditors to foreclose on any collateral securing such debt. The credit agreement governing our obligations under our senior secured credit facility contains covenants that require us to comply with a maximum consolidated first lien net leverage ratio of 4.25 to 1.00. The covenants, which are calculated on a quarterly basis, include the combined results of the Company. The credit agreements governing Mission’s obligations under its senior secured credit facility does not contain financial covenant ratio requirements; however, they include events of default if we do not comply with all covenants contained in the credit agreement governing our senior secured credit facility. The Company may not be able to generate sufficient cash flow to meet its debt service requirements. The Company’s ability to service its debt depends on its ability to generate the necessary cash flow. Generation of the necessary cash flow is partially subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond the Company’s control. The Company cannot assure you that its business will generate cash flow from operations, that future borrowings will be available to the Company under its current or any replacement credit facilities, or that it will be able to complete any necessary financings, in amounts sufficient to enable the Company to fund its operations or pay its debts and other obligations, or to fund its liquidity needs. If the Company is not able to generate sufficient cash flow to service its debt obligations, it may need to refinance or restructure its debt, sell assets, reduce or delay capital investments, or seek to raise additional capital. Additional financing may not be available in sufficient amounts, at times or on terms acceptable to the Company, or at all. If the Company is unable to meet its debt service obligations, its lenders may determine to stop making loans to the Company, and/or the Company’s lenders or other holders of its debt could accelerate and declare due all outstanding obligations under the respective agreements, all of which could have a material adverse effect on the Company. 25 The owners of the VIEs may make decisions regarding the operation of their respective stations that could reduce the amount of cash we receive under our local service agreements. As of December 31, 2020, the VIEs are each 100% owned by independent third parties. These entities owned and operated 37 full power television stations, of which 36 stations were included in our financial statements as consolidated VIEs. We have entered into local service agreements with these VIEs, pursuant to which we provide services to their stations. In return for the services we provide, we receive substantially all of the VIEs’ available cash, after satisfaction of their operating costs and any debt obligations. As of December 31, 2020, Mission’s senior secured credit facility consists of a $330.0 million total revolving credit facility, of which $327.0 million was drawn and outstanding. We guarantee full payment of all of the obligations incurred under Mission’s senior secured credit facility in the event of its default. All but three stations owned by consolidated VIEs have granted purchase options that permit Nexstar to acquire the assets and assume the liabilities of each of those VIEs’ stations, subject to FCC consent. These purchase options are freely exercisable or assignable by Nexstar without consent or approval by the VIEs. We do not own the VIEs or any of their respective television stations. However, we are deemed under U.S. GAAP to have controlling financial interests in the consolidated VIEs because of (1) the local service agreements Nexstar has with the VIEs’ stations, (2) Nexstar’s guarantee of the obligations incurred under Mission’s senior secured credit facility, (3) Nexstar having power over significant activities affecting the VIEs’ economic performance, including budgeting for advertising revenue, advertising sales and, in some cases, hiring and firing of sales force personnel and (4) purchase options granted by each VIE which permit Nexstar to acquire the assets and assume the liabilities of each of the VIEs’ stations at any time, exclusive of three stations, subject to FCC consent. In compliance with FCC regulations, the VIEs maintain complete responsibility for and control over programming, finances and personnel for their respective stations. As a result, the VIEs’ boards of directors and officers can make decisions with which we disagree and which could reduce the cash flow generated by these stations and, as a consequence, the amounts we receive under our local service agreements with the VIEs. For instance, the VIEs may decide to obtain and broadcast programming which, in our opinion, would prove unpopular and/or would generate less advertising revenue. The Company’s pension and other postretirement benefit plans (OPEB) are currently underfunded. A declining stock market and lower interest rates could affect the value of the Company’s retirement plan assets and increase its postretirement obligations. The Company has various funded, qualified non-contributory defined benefit retirement plans which cover certain employees and former employees. As of December 31, 2020, these qualified retirement plans were underfunded by approximately $274.0 million. The qualified retirement plans had $2.222 billion in total net assets available to pay benefits to participants enrolled in the plans as of December 31, 2020. The Company contributed a total of $40.5 million in 2020 to the Tribune Media Company (“Tribune”) qualified pension plans. The Company also has non-contributory unfunded supplemental executive retirement and ERISA excess plans which supplement the coverage of the defined benefit retirement plans to certain employees and former employees. As of December 31, 2020, the total liability was $57.7 million. The Company also has various retiree medical savings account plans which reimburse eligible retired employees for certain medical expenses and unfunded plans that provide certain health and life insurance benefits to certain retired employees. Although the Company has frozen participation and benefits under all plans, two significant elements in determining the Company’s pension expense are the expected return on plan assets and the discount rate used in projecting obligations. Large declines in the stock market and lower discount rates increase the Company’s expense and may necessitate higher cash contributions to the qualified retirement plans. The recording of deferred tax asset valuation allowances in the future or the impact of tax law changes on such deferred tax assets could affect our operating results. The Company currently has significant net deferred tax assets resulting from tax credit carryforwards, net operating losses and other deductible temporary differences that are available to reduce taxable income in future periods. Based on our assessment of the Company’s deferred tax assets, we determined that as of December 31, 2020, based on projected future income, approximately $234.4 million of the Company’s deferred tax assets, net of valuation allowance of $23.5 million, will more likely than not be realized in the future. Should we determine in the future that these assets will not be realized, the Company will be required to record a valuation allowance in connection with these deferred tax assets and the Company’s operating results would be adversely affected in the period such determination is made. In addition, tax law changes could negatively impact the Company’s deferred tax assets. 26 The Company’s ability to use net operating loss carry-forwards (“NOLs”) to reduce future tax payments may be limited if taxable income does not reach sufficient levels or there is a change in ownership of Nexstar, Mission or certain of our other VIEs. At December 31, 2020, the Company had NOLs of approximately $158.6 million for U.S. federal tax purposes and $271.0 million for state tax purposes. A valuation allowance has been recorded against $107.2 million of federal NOLs and $34.8 million of state NOLs attributable to a consolidated VIE. Federal NOLs generated for years prior to 2018 expire at varying dates through 2037 and NOLs generated after 2017 carry forward indefinitely. To the extent available, we intend to use these NOLs to reduce the corporate income tax liability associated with our operations. Section 382 (“Section 382”) of the Internal Revenue Code of 1986, as amended (the “Code”), generally imposes an annual limitation on the amount of NOLs that may be used to offset taxable income when a corporation has undergone significant changes in stock ownership. In general, an ownership change, as defined by Section 382, results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain stockholders or public groups, which are generally outside of our control. The Company’s NOLs are subject to limitations under Section 382. As of December 31, 2020, the Company does not expect any NOLs to expire as a result of a Section 382 limitation. The ability to use NOLs is also dependent upon the Company’s ability to generate taxable income. The NOLs could expire before the Company generates sufficient taxable income to use them. To the extent the Company’s use of NOLs is significantly limited, the Company’s income could be subject to corporate income tax earlier than it would if it were able to use NOLs, which could have a negative effect on the Company’s financial results and operations. Changes in ownership are largely beyond the Company’s control and the Company can give no assurance that it will continue to have realizable NOLs. We could face additional tax-related liabilities if the IRS prevails on a proposed income tax audit adjustment related to a past transaction of Tribune and Federal income tax audits of Tribune. We may also face additional tax liabilities stemming from an ongoing tax audit of Tribune. While we believe our tax positions and reserves are reasonable, the resolutions of certain tax issues related to a past transaction of Tribune are unpredictable and could negatively impact our effective tax rate, net income or cash flows for the period or periods in question. Specifically, we may be faced with additional tax liabilities as a result of our acquisition of Tribune for the transactions contemplated by the agreement, dated August 21, 2009, between Tribune and Chicago Entertainment Ventures, LLC (formerly Chicago Baseball Holdings, LLC) (“CEV LLC”), and its subsidiaries (collectively, “New Cubs LLC”), governing the contribution of certain assets and liabilities related to the business of the Chicago Cubs Major League Baseball franchise then owned by Tribune and its subsidiaries to New Cubs LLC, and related agreements thereto (the “Chicago Cubs Transactions”). We may also be faced with tax liabilities as a result of the 2014–2015 federal income tax audits of Tribune. On June 28, 2016, the IRS issued to Tribune a Notice of Deficiency which presented the IRS’s position that the gain on the Chicago Cubs Transactions should have been included in Tribune’s 2009 taxable income. Accordingly, the IRS has proposed a $182 million tax and a $73 million gross valuation misstatement penalty. After-tax interest on the proposed tax and penalty through December 31, 2020 would be approximately $120.0 million. During the third quarter of 2016, Tribune filed a petition in U.S. Tax Court to contest the IRS’s determination. A bench trial in the U.S. Tax Court took place between October 28, 2019 and November 8, 2019, and closing arguments took place on December 11, 2019. The Company has completed the Tax Court briefing process and expects an opinion on the merits to be issued in the first half of 2021. The U.S. Tax Court issued an opinion on January 6, 2020 that the IRS satisfied the procedural requirements for the imposition of the gross valuation misstatement penalty. The judge deferred any litigation of the penalty until the tax issue has been resolved by the Tax Court. If Tribune prevails on the tax issue, then there would be no penalty to litigate. We continue to pursue resolution of this disputed tax matter with the IRS and we continue to disagree with the IRS’s position that the transaction generated a taxable gain in 2009, the proposed penalty and the IRS’s calculation of the gain. If the IRS prevails in its position, the gain on the Chicago Cubs Transactions would be deemed to be taxable in 2009. We estimate that the federal and state income taxes would be approximately $225 million before interest and penalties. Any tax, interest and penalty due will be offset by tax payments made relating to this transaction subsequent to 2009. Tribune made approximately $147.0 million of tax payments prior to its merger with Nexstar . In addition, if the IRS prevails with its position, under the tax rules for determining tax basis upon emergence from bankruptcy, we would be required to reduce Tribune’s tax basis in certain assets. The reduction in tax basis would be required to reflect the reduction in the amount of Tribune’s guarantee of the New Cubs partnership debt which was included in the reported tax basis previously determined upon emergence from Tribune’s bankruptcy. Tribune no longer owns any portion of CEV LLC. We did not recognize any tax reserves related to the Chicago Cubs Transactions. 27 Prior to our merger with Tribune in September 2019, Tribune and a few of its subsidiaries were undergoing separate 2014–2015 f ederal income tax audits. In the third quarter of 2020, the IRS completed its audits of the Tribune acquired entities, and with the exception of Tribune Media Company, all other entity audits have been resolved and closed. For Tribune Media Company , the IRS issued a Revenue Agent ’ s Report which disallows the reporting of certain assets and liabilities related to Tribune’s emergence from Chapter 11 bankruptcy on December 31, 2012. We disagree with the IRS’s proposed adjustments to the tax basis of certain assets, and the related taxable income impact, and we are contesting the adjustments through the IRS administrative appeals procedures. If the IRS prevails with its position, Nexstar would be required to reduce its tax basis in certain assets resulting in a $40.0 million increase in its federal and state taxes payable and a $140 million increase in deferred income tax liability as of December 31, 2020. In accordance with ASC Topic 740, the Company has appropriately reflected $11.0 million for certain contested issues in its liability for unrecognized tax benefits. The revenue generated by stations we operate or provide services to could decline substantially if they fail to maintain or renew their network affiliation agreements on favorable terms, or at all. Due to the quality of the programming provided by the networks, stations that are affiliated with a network generally have higher ratings than unaffiliated independent stations in the same market. As a result, it is important for stations to maintain their network affiliations. Most of the stations that we operate or provide services to have network affiliation agreements. As of December 31, 2020, 29 full power television stations have primary affiliation agreements with ABC, 35 with NBC, 43 with FOX, 49 with CBS, 23 with The CW and 16 with MNTV. Each of ABC, NBC and CBS generally provides affiliated stations with up to 22 hours of prime-time programming per week, while each of FOX, MNTV and The CW provides affiliated stations with up to 15 hours of prime-time programming per week. In return, affiliated stations broadcast the applicable network’s commercials during the network programming. All of the network affiliation agreements of the stations that we own, operate, program or provide sales and other services to are scheduled to expire at various times through December 2024. In order to renew certain of our affiliation agreements we may be required to make cash payments to the network and to accept other material modifications of existing affiliation agreements. If any of our stations cease to maintain affiliation agreements with their networks for any reason, we would need to find alternative sources of programming, which may be less attractive to our audiences and more expensive to obtain. In addition, a loss of a specific network affiliation for a station may affect our retransmission consent payments resulting in us receiving less retransmission consent fees. Further, some of our network affiliation agreements are subject to earlier termination by the networks under specified circumstances. For more information regarding these network affiliation agreements, see Item 1, “Business—Network Affiliations.” The loss of or material reduction in retransmission consent revenues or further change in the current retransmission consent regulations could have an adverse effect on our business, financial condition and results of operations. A significant portion of Nexstar’s revenue comes from its retransmission consent agreements with MVPDs (mainly cable and satellite television providers) and OVDs. These agreements permit the distributors to retransmit our stations’ and WGN America’s signals to their subscribers in exchange for the payment of compensation to us from the system operators as consideration. If we are unable to renegotiate these agreements on favorable terms, or at all, the failure to do so could have an adverse effect on our business, financial condition and results of operations. Though we are typically able to renegotiate our retransmission consent agreements on favorable terms, the payments due us under these agreements are customarily based on a price per subscriber of the applicable distributor. In recent years the subscribership of MVPDs has declined, as the growth of direct Internet streaming of video programming to televisions and mobile devices has incentivized consumers to “cut the cord” and discontinue their cable or satellite service subscriptions. Decreasing MVPD subscribership leads to less revenue under our retransmission agreements, which ultimately could have an adverse effect on our business, financial condition and results of operations. Also, refer to “Risks Related to Our Industry–Intense competition in the television industry and alternative forms of media could limit our growth and profitability.” Moreover, the national television broadcast networks have taken the position that they, as the owners or licensees of certain of the programming we broadcast and provide for retransmission, are entitled to a portion of the compensation we receive from MVPDs under our retransmission consent agreements and are requiring their network affiliation agreements with us to provide for such payments. All of our affiliation agreements with the broadcast networks also include terms that limit our ability to grant retransmission consent rights to traditional MVPDs as well as OVDs, services that provide video streaming to consumers. The need to pay a portion of our retransmission consent revenue to our networks, and network limitations on our ability to enter into retransmission consent agreements, could materially reduce this revenue source to the Company and could have an adverse effect on its business, financial condition and results of operations. 28 In addition, MVPDs have actively sought to change the regulations under which retransmission consent is negotiated before both the U.S. Congress and the FCC in order to increase their bargaining leverage with television stations. On March 3, 2011, the FCC initiated a Notice of Proposed Rulemaking to reexamine its rules (1) governing the requirements for good faith negotiations between MVPDs and broadcasters, including implementing a prohibition on one station negotiating retransmission consent terms for another station under a local service agreement; (2) for providing advance notice to consumers in the event of dispute; and (3) to extend certain cable-only obligations to all MVPDs. The FCC also asked for comment on eliminating the network non-duplication and syndicated exclusivity protection rules, which may permit MVPDs to import out-of-market television stations in certain circumstances. On March 31, 2014, the FCC amended its rules governing “good faith” retransmission consent negotiations to provide that it is a per se violation of the statutory duty to negotiate in good faith for a television broadcast station that is ranked among the top-four stations in a market (as measured by audience share) to negotiate retransmission consent jointly with another top-four station in the same market if the stations are not commonly owned. On December 5, 2014, the U.S. Congress extended the joint negotiation prohibition to all non-commonly owned television stations in a market. Under this rule and the subsequent legislation, stations may not (1) delegate authority to negotiate or approve a retransmission consent agreement to another non-commonly owned station located in the same DMA or to a third-party that negotiates on behalf of another non-commonly owned television station in the same DMA; or (2) if located in the same DMA and not commonly owned, facilitate or agree to facilitate coordinated negotiation of retransmission consent terms between themselves, including through the sharing of information. Accordingly, the in-market VIEs with which we have local service agreements must separately negotiate their respective retransmission consent agreements with MVPDs and OVDs. Concurrently with its adoption of the prohibition on certain joint retransmission consent negotiations, 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 prohibition on certain joint retransmission consent negotiations and its 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. Congress’s December 5, 2014 legislation also 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 2015 and 2016. In July 2016, the then-Chairman of the FCC announced that the agency would not adopt additional rules in this proceeding. However, the proceeding remains open. In December 2019, Congress enacted and the President signed into law the Television Viewer Protection Act of 2019 (the “TVPA”). Among other things, the TVPA directs the FCC to adopt rules that require “large [television] groups” (which, as defined in the statute, include Nexstar) to negotiate retransmission consent in good faith with certain “qualified [MVPD] buying group[s]” (as defined in the statute) comprised of multiple MVPDs. Nexstar’s obligation under the TVPA to negotiate retransmission consent on a collective basis with certain groups of MVPDs may add complexity to Nexstar’s overall negotiation process and could adversely affect the amount and flow of Nexstar’s retransmission consent revenues. We cannot predict the effect of the TVPA and the FCC’s implementing rules on our business and results of operations. Certain OVDs have begun streaming broadcast programming over the Internet. In June 2014, the U.S. Supreme Court held that an OVD’s retransmissions of broadcast television signals without the consent of the broadcast station violate copyright holders’ exclusive right to perform their works publicly as provided under the Copyright Act. In December 2014, the FCC issued a Notice of Proposed Rulemaking proposing to interpret the term “MVPD” to encompass OVDs that make available for purchase multiple streams of video programming distributed at a prescheduled time and seeking comment on the effects of applying MVPD rules to such OVDs. Comments and reply comments were filed in 2015. Although the FCC has not classified OVDs as MVPDs to date, several OVDs have signed agreements for retransmission of local stations within their markets, and others are actively seeking to negotiate such agreements. If the FCC ultimately determines that an OVD is not an MVPD or declines to apply certain rules governing MVPDs to OVDs, our business and results of operations could be materially and adversely affected. 29 The FCC could decide not to grant renewal of the FCC license of any of the stations we operate or provide services to which would require that station to cease operations. Television broadcast licenses are granted for a maximum term of eight years and are subject to renewal upon application to the FCC. The FCC is required to grant an application for license renewal if, during the preceding term, the station served the public interest, the licensee did not commit any serious violations of the Communications Act or the FCC’s rules, and the licensee committed no other violations of the Communications Act or the FCC’s rules which, taken together, would constitute a pattern of abuse. A majority of renewal applications are routinely granted under this standard. If a licensee fails to meet this standard the FCC may still grant renewal on terms and conditions that it deems appropriate, including a monetary forfeiture or renewal for a term less than the normal eight-year period. However, in an extreme case, the FCC may deny a station’s license renewal application, resulting in termination of the station’s authority to broadcast. Under the Communications Act, the term of a broadcast license is automatically extended during the pendency of the FCC’s processing of a timely renewal application. We are filing applications to renew our television licenses on a rolling schedule ending in April 2023. The Company expects the FCC to grant future renewal applications for its stations in due course but cannot provide any assurances that the FCC will do so. The loss of the services of our chief executive officer could disrupt management of our business and impair the execution of our business strategies. We believe that our success depends upon our ability to retain the services of Perry A. Sook, our founder and Chief Executive Officer. Mr. Sook has been instrumental in determining our strategic direction and focus. The loss of Mr. Sook’s services could adversely affect our ability to manage effectively our overall operations and successfully execute current or future business strategies. The Company’s growth may be limited if it is unable to implement its acquisition strategy. The Company has achieved much of its growth through acquisitions. The Company intends to continue its growth by selectively pursuing acquisitions of television stations. The television broadcast industry is undergoing consolidation, which may reduce the number of acquisition targets and increase the purchase price of future acquisitions. Some of the Company’s competitors may have greater financial or management resources with which to pursue acquisition targets. Therefore, even if the Company is successful in identifying attractive acquisition targets, it may face considerable competition and its acquisition strategy may not be successful. FCC rules and policies may also make it more difficult for the Company to acquire additional television stations. Television station acquisitions are subject to the approval of the FCC and, potentially, other regulatory authorities. FCC rules limit the number of television stations a company may own and define the types of local service agreements that “count” as ownership by the party providing the services. Those rules are subject to change. For instance, Nexstar currently owns several television stations pursuant to relaxations of FCC ownership rules that have since been negated by court review. Under certain circumstances, Nexstar could be required to divest those stations in the future. The need for FCC and other regulatory approvals could restrict the Company’s ability to consummate future transactions, if, for example, the FCC or other government agencies believe that a proposed transaction would result in excessive concentration or other public interest detriment in a market, even if the proposed combination may otherwise comply with FCC ownership limitations. Additionally, our television acquisitions over the past several years have significantly increased our national audience reach to a level that approaches national television ownership limits imposed by the Communications Act and FCC rules. This may restrict future television station acquisitions by the Company and may require the Company to divest current stations in connection with any acquisition in order to comply with national television ownership limits. Growing the Company’s business through acquisitions involves risks and if it is unable to manage effectively its growth, its operating results will suffer. In 2020, we and Mission acquired various television stations in various markets. We also completed our acquisition of BestReviews, a company engaged in the business of testing, researching and reviewing consumer products. In 2019, we completed our merger with Tribune and acquired 31 full power television stations and one AM radio station in 23 markets (net of divestitures of 13 Tribune stations), WGN America, a national general entertainment cable network, a 31.3% ownership stake in TV Food Network and a portfolio of real estate assets. To manage effectively its growth and address the increased reporting requirements and administrative demands that will result from future acquisitions, the Company will need, among other things, to continue to develop its financial and management controls and management information systems. The Company will also need to continue to identify, attract and retain highly skilled finance and management personnel. Failure to do any of these tasks in an efficient and timely manner could seriously harm its business. 30 There are other risks associated with growing our business through acquisitions. For example, with any past or future acquisition, there is the possibility that: • we may not be able to successfully reduce costs, increase advertising revenue or audience share or realize anticipated synergies and economies of scale with respect to any acquired station; • we may not be able to generate adequate returns on our acquisitions or investments; • we may encounter and fail to address risks or other problems associated with or arising from our reliance on the representations and warranties and related indemnities, if any, provided to us by the sellers of acquired companies; • an acquisition may increase our leverage and debt service requirements or may result in our assuming unexpected liabilities; • our management may be reassigned from overseeing existing operations by the need to integrate the acquired business; • we may experience difficulties integrating operations and systems, as well as company policies and cultures; • we may be unable to retain and grow relationships with the acquired company’s key customers; • we may fail to retain and assimilate employees of the acquired business; and • problems may arise in entering new markets in which we have little or no experience. The occurrence of any of these events could have a material adverse effect on our operating results, particularly during the period immediately following any acquisition. FCC actions may restrict our ability to create duopolies under local service agreements or common ownership, which may harm our existing operations and impair our acquisition strategy. In a number of our markets, we have created duopolies by entering into what we refer to as local service agreements. While these agreements take varying forms, a typical local service agreement is an agreement between two separately owned television stations serving the same market, whereby the owner of one station provides operational assistance to the other station, subject to ultimate editorial and other controls being exercised by the latter station’s owner. By entering into and operating under local service agreements with same-market stations, we (and the other station) achieve significant operational efficiencies. We also broaden our audience reach and enhance our ability to capture more advertising spending in a given market. Additionally, we achieve significant operational efficiencies by owning multiple stations in a market where FCC rules allow us to do so. The FCC is required to review its media ownership rules every four years and eliminate those rules it finds no longer serve the “public interest, convenience and necessity.” In August 2016, the FCC adopted the 2016 Ownership Order concluding the agency’s 2010 and 2014 quadrennial reviews. The 2016 Ownership Order (1) retained the 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 ban on newspaper/broadcast cross-ownership in local markets while considering waivers and providing an exception for failed or failing entities, (4) retained the dual network rule, (5) made television JSA relationships attributable interests, and (6) defined a category of sharing agreements designated as SSAs between commercial television stations and required public disclosure of those SSAs (while not considering them attributable). Nexstar and other parties filed petitions seeking reconsideration of various aspects of the 2016 Ownership Order. On November 16, 2017, the FCC adopted 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 eight voices test, (3) retained the general prohibition on common ownership of two “top four” stations in a local market but provided for case-by-case review, (4) eliminated the television JSA attribution rule, and (5) retained the SSA definition and disclosure requirement for television stations. These rule modifications took effect on February 7, 2018, when the Third Circuit denied a mandamus petition which had sought to stay their effectiveness. On September 23, 2019, however, the Third Circuit issued an opinion vacating the Reconsideration Order on the ground that the FCC had failed to adequately analyze the effect of the Reconsideration Order’s deregulatory rule changes on minority and woman ownership of broadcast stations. The Third Circuit later denied petitions for en banc rehearing and its decision took effect on November 29, 2019. On December 20, 2019, the FCC issued an order reinstating the local television ownership rule, the radio/television cross-ownership rule, the newspaper/broadcast cross-ownership rule and the television JSA attribution rule as they existed prior to the Reconsideration Order (including the eight voices test with respect to local television ownership). On April 17, 2020, the FCC and a group of media industry stakeholders (including Nexstar) filed separate petitions for certiorari requesting that the U.S. Supreme Court review the Third Circuit’s decision. The Supreme Court granted certiorari on October 2, 2020. It held oral argument in the case on January 19, 2021, and a decision is expected later in 2021 . 31 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 were filed in the second quarter of 2019. As of December 31, 2020, the proceeding remains open. The 2016 Ownership Order reinstated a rule that attributed another in-market station toward the local television ownership limits when one station owner sells more than 15% of the second station’s weekly advertising inventory under a JSA. Parties to JSAs entered into prior to March 31, 2014 were permitted to continue to operate under these JSAs until September 30, 2025. In the Reconsideration Order, the FCC eliminated the JSA attribution rule in its entirety. As a result of the Third Circuit’s September 2019 opinion vacating the Reconsideration Order, the rule has been reinstated, although the Third Circuit’s decision is under review by the U.S. Supreme Court. We cannot predict what additional rules the FCC will adopt or when they will be adopted. In addition, uncertainty about media ownership regulations and adverse economic conditions have dampened the acquisition market from time to time, and changes in the regulatory approval process may make materially more expensive, or may materially delay, the Company’s ability to consummate further acquisitions in the future. The FCC may decide to terminate “grandfathered” time brokerage agreements. The FCC attributes TBAs and LMAs to the programmer under its ownership limits if the programmer provides more than 15% of a station’s weekly broadcast programming and has an attributable ownership interest in a station in the same market. However, otherwise attributable TBAs and LMAs entered into prior to November 5, 1996 are exempt from attribution for now. The FCC may review these “grandfathered” TBAs and LMAs in the future. During this review, the FCC may determine to terminate the “grandfathered” period and make all such TBAs and LMAs fully attributable to the programmer. If the FCC does so, we will be required to terminate or modify our grandfathered TBAs and LMAs unless the FCC’s rules allow ownership of two stations in the applicable markets. As of December 31, 2020, we provide services under “grandfathered” TBAs or LMAs to five television stations owned by third parties. We are subject to foreign ownership limitations which limits foreign investments in us. The Communications Act limits the extent of non-U.S. ownership of companies that own U.S. broadcast stations. Under this restriction, the holder of a U.S. broadcast license may have no more than 20% non-U.S. ownership (by vote and by equity). The Communications Act prohibits more than 25% indirect foreign ownership or control of a licensee through a parent company if the FCC determines the public interest will be served by enforcement of such restriction. The FCC has interpreted this provision to require an affirmative public interest showing before indirect foreign ownership of a broadcast licensee may exceed 25%. Therefore, certain investors may be prevented from investing in us if our foreign ownership is at or near the FCC limits. The FCC’s multiple ownership rules limit our ability to acquire television stations in particular markets, restricting our ability to execute our acquisition strategy. The number of television stations we may acquire in any local market or nationwide is limited by FCC rules and may vary depending upon whether the interests in other television stations or other media properties of persons affiliated with us are attributable under FCC rules. The broadcast television, broadcast radio and daily newspaper interests of our officers, directors and most stockholders with 5% or greater voting power are attributable under the FCC’s rules, which may limit us from acquiring or owning television stations in particular markets while those officers, directors or stockholders are associated with us. In addition, the holder of otherwise non-attributable equity and/or debt in a licensee in excess of 33% of the total debt and equity of the licensee will be attributable where the holder is either a major program supplier to that licensee or the holder has an attributable interest in another media facility in the same market that is subject to the FCC’s media ownership rules. 32 The Company has a material amount of goodwill and intangible assets, and therefore the Company could suffer losses due to future asset impairment charges. As of December 31, 2020, $8.8 billion, or 65.9%, of the Company’s combined total assets consisted of goodwill and intangible assets, including FCC licenses and network affiliation agreements. The Company tests goodwill and FCC licenses annually, and on an interim date if factors or indicators become apparent that would require an interim test of these assets, in accordance with accounting and disclosure requirements for goodwill and other intangible assets. The Company tests its finite-lived intangible assets whenever circumstances or indicators become apparent that the asset may not be recoverable through expected future cash flows. The methods used to evaluate the impairment of the Company’s goodwill and intangible assets would be affected by a significant reduction, or a forecast of such reductions, in operating results or cash flows at the Company’s broadcast or digital businesses. Our broadcast business’ operating results and cash flows could be affected by a significant adverse change in the advertising marketplaces in which the Company’s television stations operate, the loss of network affiliations or by adverse changes to FCC ownership rules, among others, which may be beyond the Company’s control. Our digital business’ operating results and cash flows could be affected by intense competition, investment in technologies that are subject to a greater degree of obsolescence, significant reliance on third-party vendors to deliver services, rapid evolving nature and other factors. If the carrying amount of goodwill and intangible assets is revised downward due to impairment, such non-cash charge could materially affect the Company’s financial position and results of operations. There can be no assurances concerning continuing dividend payments and any decrease or suspension of the dividend could cause our stock price to decline. Our common stockholders are only entitled to receive the dividends declared by our board of directors. Our board of directors has declared in 2020 a total cash dividend with respect to the outstanding shares of our Class A common stock of $2.24 per share in equal quarterly installments of $0.56 per share. We expect to continue to pay quarterly cash dividends at the rate set forth in our current dividend policy. However, future cash dividends, if any, will be at the discretion of our board of directors and can be changed or discontinued at any time. Dividend determinations (including the amount of the cash dividend, the record date and date of payment) will depend upon, among other things, our future operations and earnings, targeted future acquisitions, capital requirements and surplus, general financial condition, contractual restrictions and other factors as our board of directors may deem relevant. In addition, the Company’s senior secured credit facilities and the indentures governing our existing notes limit our ability to pay dividends. Given these considerations, our board of directors may increase or decrease the amount of the dividend at any time and may also decide to suspend or discontinue the payment of cash dividends in the future. We have made investments in digital businesses. We have invested in various digital media businesses as well as digital offerings for each of our broadcast stations. Due to intense competition, investment in technologies that are subject to a greater degree of obsolescence, historical impairment losses on our digital assets, significant reliance on third-party vendors to deliver services, limited operating history, the rapid evolving nature of digital businesses and difficulties in integrating acquisitions into our operations, the actual future operating results could be volatile and negatively impact the year-to-year trends of our operations. Adverse results from litigation or governmental investigations involving us can impact our business practices and operating results. We are party to various litigation and regulatory, environmental and other proceedings with governmental authorities and administrative agencies. Adverse outcomes in lawsuits or investigations may result in significant monetary damages or injunctive relief that may adversely affect our operating results or financial condition as well as our ability to conduct our businesses as they are presently being conducted. 33 The financial performance of our equity method investments could adversely impact our results of operations. We have significant investments in businesses (primarily our 31.3% interest in TV Food Network) that we account for under the equity method of accounting. Under the equity method, we report our proportionate share of the net earnings or losses of our equity affiliates in our Consolidated Statement of Operations and Comprehensive Income under “Income (loss) on equity investments, net,” which contributes to our income from continuing operations before income taxes. For the year ended December 31, 2020, our income from equity investments from TV Food Network was $220.3 million, less the amortization of basis difference of $147.2 million (as described in more detail in Note 7 to our Consolidated Financial Statements). During this period, we also received cash distribution from TV Food Network of $223.3 million. If the earnings or losses of and distributions from our equity investments are material in any year, those earnings or losses and distributions may have a material effect on our net income, cash flows, financial condition and liquidity. We do not control the day-to-day operations of our equity method investments or have the ability to cause them to pay dividends or make other payments or advances to their stockholders, including us, and thus the management of these businesses could impact our results of operations and cash flows. Additionally, these businesses are subject to laws, regulations, market conditions and other risks inherent in their operations. Any of these factors could adversely impact our results of operations, our cash flows and the value of our investment. We may not be able to adequately protect the intellectual property and other proprietary rights that are material to our business, or to defend successfully against intellectual property infringement claims by third parties. Our business relies on a combination of patented and patent-pending technology, trademarks, trade names, copyrights, and other proprietary rights, as well as contractual arrangements, including licenses, to establish and protect its technology, intellectual property and brand names. We believe our proprietary technology, trademarks and other intellectual property rights are important to our continued success and our competitive position. Any impairment of any such intellectual property or brands could adversely impact the results of our operations or financial condition. We seek to limit the threat of content piracy; however, policing unauthorized use of our broadcasts, products and services and related intellectual property is often difficult and the steps taken by us may not in every case prevent infringement by unauthorized third parties. Developments in technology increase the threat of content piracy by making it easier to duplicate and widely distribute pirated material. Our use of contractual provisions, confidentiality procedures and agreements, and trademark, copyright, unfair competition, trade secret and other laws to protect our intellectual property rights and proprietary technology may not be adequate. Litigation may be necessary to enforce our intellectual property rights and protect our proprietary technology, or to defend against claims by third parties that the conduct of our businesses or our use of intellectual property infringes upon such third party’s intellectual property rights. Protection of our intellectual property rights is dependent on the scope and duration of our rights as defined by applicable laws in the U.S. and abroad and the manner in which those laws are construed. If those laws are drafted or interpreted in ways that limit the extent or duration of our rights, or if existing laws are changed, our ability to generate revenue from intellectual property may decrease, or the cost of obtaining and maintaining rights may increase. There can be no assurance that our efforts to enforce our rights and protect our products, services and intellectual property will be successful in preventing content piracy. Furthermore, any intellectual property litigation or claims brought against us, whether or not meritorious, could result in substantial costs and diversion of our resources, and there can be no assurances that favorable final outcomes will be obtained in all cases. The terms of any settlement or judgment may require us to pay substantial amounts to the other party or cease exercising our rights in such intellectual property. In addition, we may have to seek a license to continue practices found to be in violation of a third party’s rights, which may not be available on reasonable terms, or at all. Our business, financial condition or results of operations may be adversely affected as a result. Cybersecurity risks could affect the Company’s operating effectiveness. The Company uses computers in substantially all aspects of its business operations. Its revenues are increasingly dependent on digital products. Such use exposes the Company to potential cyber incidents resulting from deliberate attacks or unintentional events. It is not uncommon for a company such as ours to be subjected to continuous attempted cyber-attacks or other malicious efforts to cause a cyber incident. These incidents can include, but are not limited to, gaining unauthorized access to digital systems for purposes of misappropriating assets or sensitive information, corrupting data or causing operational disruption. The changes in our work environment as a result of the COVID-19 pandemic could also impact the security of our systems, as well as our ability to protect against attacks and detect and respond to them quickly. The rapid adoption of some third-party services designed to enable the transition to a remote workforce also may introduce security risk that is not fully mitigated prior to the use of these services. We may also be subject to increased cyber-attacks, such as phishing attacks by threat actors using the attention placed on the pandemic as a method for targeting our personnel. The results of these incidents could include, but are not limited to, business interruption, disclosure of nonpublic information, decreased advertising revenues, misstated financial data, liability for stolen assets or information, increased cybersecurity protection costs, litigation and reputational damage adversely affecting customer or investor confidence. The Company’s Cybersecurity Committee helps mitigate cybersecurity risks. The role of the committee is to oversee cyber risk assessments, monitor applicable key risk indicators, review cybersecurity training procedures, establish cybersecurity policies and procedures, and to invest in and implement enhancements to the Company’s cybersecurity infrastructure. Investments over the past year included enhancements to monitoring systems, firewalls, and intrusion detection systems. 34 A significant concentration of our revenue is to a select number of customers . During the year ended December 31, 2020, revenues from two of the Company's customers exceeded 10%. Each of these customers represents approximately 11% of the Company’s consolidated net revenues. During the years ended December 31, 2019 and 2018, no single customer provided more than 10% of the Company’s consolidated net revenues. A disruption in our relationship with any of these customers could adversely affect our business. We could experience fluctuations in our customer base or the mix of revenue by customer as markets and strategies evolve. In addition, any consolidation of our customers could reduce the number of customers to whom our services could be sold. Our inability to meet our customers’ requirements could adversely impact our revenue. The loss of one or more of our major customers or any significant reduction in the service requirements of these customers could have a material adverse effect on our business, results of operations, or financial condition. Risks Related to Our Industry Our operating results are dependent on advertising revenue and as a result, we may be more vulnerable to economic downturns and other factors beyond our control than businesses not dependent on advertising. We derive a majority of our revenue from the sale of advertising time on our stations and community portal websites. Our ability to sell advertising time depends on numerous factors that may be beyond our control, including: • the health of the economy in the local markets where our stations are located and in the nation as a whole; • the popularity of our station and website programming; • fluctuations in pricing for local and national advertising; • the activities of our competitors, including increased competition from other forms of advertising-based media, particularly newspapers, cable television, Internet and radio; • the decreased demand for political advertising in non-election years; and • changes in the makeup of the population in the areas where our stations are located. Because businesses generally reduce their advertising budgets during economic recessions or downturns, our reliance upon advertising revenue makes our operating results susceptible to prevailing economic conditions. In addition, our programming may not attract sufficient targeted viewership, and we may not achieve favorable ratings. Our ratings depend partly upon unpredictable and volatile factors beyond our control, such as viewer preferences, competing programming and the availability of other entertainment activities. A shift in viewer preferences could cause our programming not to gain popularity or to decline in popularity, which could cause our advertising revenue to decline. Further, we and the programming providers upon which we rely may not be able to anticipate, and effectively react to, shifts in viewer tastes and interests in our markets. Because a high percentage of our operating expense is fixed, a relatively small decrease in advertising revenue could have a significant negative impact on our financial results. Our business is characterized generally by high fixed costs, primarily for debt service, broadcast rights and personnel. Other than commissions paid to our sales staff and outside sales agencies, our expenses do not vary significantly with an increase or decrease in advertising revenue. As a result, a relatively small change in advertising prices could have a disproportionate effect on our financial results. Accordingly, a minor shortfall in expected revenue could have a significant negative impact on our financial results. Preemption of regularly scheduled programming by news coverage may affect our revenue and results of operations. The Company may experience a loss of advertising revenue and incur additional broadcasting expenses due to preemption of our regularly scheduled programming by network coverage of a major global news event such as a war or terrorist attack or by coverage of local disasters, such as tornados and hurricanes. As a result, advertising may not be aired and the revenue for such advertising may be lost unless the station is able to run the advertising at agreed-upon times in the future. Advertisers may not agree to run such advertising in future time periods, and space may not be available for such advertising. The duration of any preemption of programming cannot be predicted if it occurs. In addition, our stations and the stations we provide services to may incur additional expenses as a result of expanded news coverage of a war or terrorist attack or local disaster. The resulting loss of revenue and increased expenses could negatively affect our results of operations. 35 If we are unable to respond to changes in technology and evolving industry trends, our television businesses may not be able to compete effectively. New technologies may adversely affect our television stations. Information delivery and programming alternatives such as cable, direct satellite-to-home services, pay-per-view, video on demand, online distribution of programming, the Internet, telephone company services, mobile devices, digital video recorders and home video and entertainment systems have fractionalized television viewing audiences and expanded the numbers and types of distribution channels for advertisers to access. Over the past decade, cable television programming services, other emerging video distribution platforms and the Internet have captured an increasing market share, while the aggregate viewership of the major broadcast television networks has declined. In addition, the expansion of cable and satellite television, digital delivery and other technological changes has increased, and may continue to increase, the competitive demand for programming. Such increased demand, together with rising production costs, may increase our programming costs or impair our ability to acquire or develop desired programming. In addition, video compression techniques now in use are expected to permit greater numbers of channels to be carried within existing bandwidth. These compression techniques and other technological developments are applicable to all video delivery systems, including over-the-air broadcasting, and have the potential to provide vastly expanded programming to targeted audiences. Reduction in the cost of creating additional channel capacity could lower entry barriers for new channels and encourage the development of increasingly specialized niche programming, resulting in more audience fractionalization. This ability to reach very narrowly defined audiences may alter the competitive dynamics for advertising expenditures. Furthermore, the FCC has authorized television broadcasters to transmit using a so-called “Next Gen” (ATSC 3.0) standard on a voluntary, market-driven basis. This new transmission standard may allow broadcast television stations to provide a multitude of enhanced services to consumers, including but not limited to the delivery of ultra-high definition video and advanced audio to home and mobile screens, new public safety capabilities such as advanced emergency alerting, and localized, personalized and interactive content. We are unable to predict the effect that these and other technological changes will have on the television industry or our results of operations. The FCC can sanction us for programming broadcast on our stations which it finds to be indecent. The FCC may impose substantial fines, exceeding $400,000 per violation (and subject to annual adjustments for inflation), on television broadcasters for the broadcast of indecent material in violation of the Communications Act and its rules. Because the Company’s programming is in large part comprised of programming provided by the networks with which the stations are affiliated, the Company does not have full control over what is broadcast on its stations and may be subject to the imposition of fines if the FCC finds such programming to be indecent. In June 2012, the U.S. Supreme Court decided a challenge to the FCC’s indecency enforcement without resolving the constitutionality of such enforcement, and the FCC thereafter requested public comment on the appropriate substance and scope of its indecency enforcement policy. The FCC has issued very few further decisions or rules in this area, and the courts may in the future have further occasion to review the FCC’s current policy or any modifications thereto. The outcomes of these proceedings could affect future FCC policies in this area and could have a material adverse effect on our business. 36 Intense competition in the television industry and alternative forms of media could limit our growth and profitability. As a television broadcasting company, we face a significant level of competition, both directly and indirectly. We generally compete for our audience against all the other leisure activities in which one could choose to engage rather than watch television. Specifically, stations we own or provide services to compete for audience share, programming and advertising revenue with other television stations in their respective markets and with other advertising media, including newspapers, radio stations, cable television, DBS systems, mobile services, video streaming services and the Internet. The entertainment and television industries are highly competitive and are undergoing a period of consolidation. Many of our current and potential competitors have greater financial, marketing, programming and broadcasting resources than we do. The markets in which we operate are also in a constant state of change arising from, among other things, technological improvements and economic and regulatory developments. Technological innovation and the resulting proliferation of television entertainment, such as cable television, wireless cable, satellite-to-home distribution services, pay-per-view, home video and entertainment systems and Internet and mobile distribution of video programming have fractionalized television viewing audiences and have subjected free over-the-air television broadcast stations to increased competition. We may not be able to compete effectively or adjust our business plans to meet changing market conditions. Technologies used in the entertainment industry continue to evolve rapidly, leading to alternative methods for the delivery and storage of digital content. These technological advancements have driven changes in consumer behavior and have empowered consumers to seek more control over when, where and how they consume news and entertainment, including through the so-called “cutting the cord” and other consumption strategies. The networks have also begun streaming some of their programming on the Internet and other distribution platforms simultaneously with, or in close proximity to, network programming broadcast on local television stations, including those we own or provide services to. These innovations and other practices by the networks dilute the exclusivity and value of network programming originally broadcast by the local stations and may adversely affect the business, financial condition and results of operations of our stations. We are unable to predict what forms of competition will develop in the future, the extent of the competition or its possible effects on our business. The FCC could implement regulations or the U.S. Congress could adopt legislation that might have a significant impact on the operations of the stations we own and the stations we provide services to or the television broadcasting industry as a whole. The FCC has open proceedings to determine whether to standardize TV stations’ reporting of programming responsive to local needs and interests; whether to modify its network non-duplication and syndicated exclusivity rules; whether to modify its standards for “good faith” retransmission consent negotiations; and whether to broaden the definition of “MVPD” to include online video programming distributors. Additionally, the outcomes of FCC proceedings to determine whether to modify or eliminate certain of its broadcast ownership rules have in some cases been negated by court review and are the subject of further litigation, and the FCC has initiated its next quadrennial proceeding to review the agency’s media ownership rules. The FCC also may decide to initiate other new rule-making proceedings on its own or in response to requests from outside parties, any of which might have such an impact. The U.S. Congress may also act to amend the Communications Act in a manner that could impact our stations and the stations we provide services to or the television broadcast industry in general. The FCC has reallocated a portion of the spectrum available for use by television broadcasters to wireless broadband use, which could substantially impact our future operations and may reduce viewer access to our programming. The FCC has repurposed a portion of the broadcast television spectrum for wireless broadband use. Pursuant to federal legislation enacted in 2012, the FCC conducted an incentive auction in 2016-17 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. Television stations that did not relinquish their spectrum were “repacked” into the frequency band still remaining for television broadcast use. Ten of Nexstar’s stations and one station owned by Vaughan, a consolidated VIE, accepted bids to relinquish their spectrum. Of these 11 total stations, one station went off the air in November 2017. The station that went off the air did not have a significant impact on our 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 ceased broadcasting on their current channels and implemented channel sharing arrangements. Of the two remaining stations, one moved to a very high frequency (“VHF”) channel and vacated its former channel in 2019 and the remaining station moved to a VHF channel and vacated its current channel in April 2020. 37 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 were assigned to new channels in the reduced post-auction television band. These “repack” stations have commenced operation on their new assigned channels and have ceased operating on their former channels. 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 fund is not available to reimburse repacking costs for stations which are surrendering their spectrum and entering into channel sharing relationships. Broadcasters, MVPDs and other parties have submitted to the FCC estimates of their reimbursable costs, followed by subsequent requests for reimbursement of those costs. As of January 4, 2021, verified cost estimates were over $2.19 billion, with additional reimbursements still to be made to repack stations as well as certain low power television and FM radio stations affected by the repack. As of January 7, 2021, the FCC reported that all repack stations had ceased operating on their former channel assignments. This includes all repack stations owned by Nexstar and its VIEs, although the Company will continue to incur costs to convert one station from interim to permanent facilities on its new channel . D uring the years ended December 31, 2020, 2019 and 2018, we spent a total of $ 54.7 million, $79.3 million and $26.8 million, respectively, in capital expenditures related to station repack which were recorded as assets under the property and equipment caption in the accompanying Consolidated Balance Sheets. During the years ended December 31, 2020, 2019 and 2018, we received $57.3 million, $70.4 million and $29.4 million, respectively, in reimbursements from the FCC related to these expenditures which were recorded as operating income in the accompanying Consolidated Statements of Operations and Comprehensive Income. We cannot determine if the FCC will be able to fully reimburse our repacking costs as this is dependent on certain factors, including our ability to incur repacking costs that are equal to or less than the FCC’s allocation of funds to us and whether the FCC will have available funds to reimburse us for additional repacking costs that we previously may not have anticipated. Whether the FCC will have available funds for additional reimbursements will also depend on the repacking costs that will be incurred by other broadcasters, MVPDs and other parties that are also seeking reimbursements. We cannot yet fully predict the impact of the incentive auction and subsequent repack on our business. The reallocation of television spectrum to broadband use may be to the detriment of our investment in digital facilities, could require substantial additional investment to continue our current operations, and may require viewers to invest in additional equipment or subscription services to continue receiving broadcast television signals. We cannot yet fully predict the impact of the incentive auction and subsequent repack on our business. 38 Risks Related to Tribune’s Emergence from Bankruptcy We may not be able to settle, on a favorable basis or at all, unresolved claims filed in connection with Tribune’s Chapter 11 proceedings and resolve the appeals seeking to overturn the order confirming Tribune’s bankruptcy plan (as defined below). On December 31, 2012, certain entities (including Tribune and certain of its direct and indirect subsidiaries) that had filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) on December 8, 2008 (or on October 12, 2009, in the case of Tribune CNLBC, LLC) (the “Debtors”) emerged from Chapter 11. Certain of the Debtors’ Chapter 11 cases have not yet been closed by the Bankruptcy Court, and certain claims asserted against the Debtors in the Chapter 11 cases remain unresolved. As a result, we expect to continue to incur certain expenses pertaining to the Chapter 11 proceedings in future periods, which may be material. On April 12, 2012, the Debtors, the official committee of unsecured creditors, and creditors under certain prepetition debt facilities filed a Chapter 11 plan of reorganization (the “Plan”) with the Bankruptcy Court. On July 23, 2012, the Bankruptcy Court issued an order confirming the Plan (the “Confirmation Order”). Several notices of appeal of the Confirmation Order were filed. The appellants sought, among other relief, to overturn the Confirmation Order and certain prior orders of the Bankruptcy Court, in whole or in part, including the settlement of certain causes of action relating to the Leveraged ESOP Transactions consummated by Tribune and Tribune’s employee stock ownership plan, EGI-TRB, L.L.C., a Delaware limited liability company wholly-owned by Sam Investment Trust (a trust established for the benefit of Samuel Zell and his family) (the “Zell Entity”) and Samuel Zell in 2007, that was embodied in the Plan. See Note 17 to our Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information. More specifically, notices of appeal were filed on August 2, 2012 by Wilmington Trust Company (“WTC”), as successor indenture trustee for the Predecessor’s Exchangeable Subordinated Debentures due 2029 (“PHONES”), and on August 3, 2012 by the Zell Entity, Aurelius Capital Management LP, Law Debenture Trust Company of New York (n/k/a Delaware Trust Company) (“Delaware Trust Company”), successor trustee under the indenture for the Predecessor’s prepetition 6.61% debentures due 2027 and the 7.25% debentures due 2096, and Deutsche Bank Trust Company Americas, successor trustee under the indentures for the Predecessor’s prepetition medium-term notes due 2008, 4.875% notes due 2010, 5.25% notes due 2015, 7.25% debentures due 2013 and 7.5% debentures due 2023. WTC and the Zell Entity also sought to overturn determinations made by the Bankruptcy Court concerning the priority in right of payment of the PHONES and the subordinated promissory notes held by the Zell Entity and its permitted assignees, respectively. As of December 31, 2020, each of the Confirmation Order appeals have been dismissed or otherwise resolved by a final order, with the exception of the appeals of Delaware Trust Company and Deutsche Bank. On July 30, 2018, the United States District Court for the District of Delaware (the “District Court”) entered an order affirming (i) the Bankruptcy Court’s judgment overruling Delaware Trust Company’s and Deutsche Bank’s objections to confirmation of the Plan and (ii) the Bankruptcy Court’s order confirming the Plan. Delaware Trust Company and Deutsche Bank appealed the District Court’s order to the United States Court of Appeals for the Third Circuit (the “Third Circuit”) on August 27, 2018. That appeal remains pending before the Third Circuit. If the remaining appellants succeed on their appeals, our financial condition may be adversely affected. 39 Risks Related to Tribune Publishing’s Spin-Off If the Tribune Publishing spin-off does not qualify as a tax-free distribution under Section 355 of the Internal Revenue Code (“IRC”), including as a result of subsequent acquisitions of stock of Tribune or Tribune Publishing, then Tribune may be required to pay substantial U.S. federal income taxes. On August 4, 2014, Tribune completed a separation transaction, resulting in the spin-off of the assets (other than owned real estate and certain other assets) and certain liabilities of the businesses primarily related to Tribune’s then principal publishing operations through a tax-free, pro rata dividend to its stockholders and warrant holders of 98.5% of the shares of common stock of Tribune Publishing. At that time, Tribune retained 1.5% of the outstanding common stock of Tribune Publishing. The publishing operations consisted of newspaper publishing and local news and information gathering functions that operated daily newspapers and related websites, as well as a number of ancillary businesses that leveraged certain of the assets of those businesses. As a result of the completion of the spin-off, Tribune Publishing operates the Publishing Business as an independent, publicly-traded company. On January 31, 2017, Tribune sold its remaining Tribune Publishing shares. In connection with the Tribune Publishing spin-off, Tribune received a private letter ruling (the “IRS Ruling”) from the IRS to the effect that the distribution and certain related transactions qualified as tax-free to Tribune, its then stockholders and warrant holders and Tribune Publishing for U.S. federal income tax purposes. Although a private letter ruling from the IRS generally is binding on the IRS, the IRS Ruling did not rule that the distribution satisfies every requirement for a tax-free distribution, and the parties have relied on the opinion of special tax counsel, Debevoise & Plimpton LLP, to the effect that the distribution and certain related transactions qualified as tax-free to Tribune and its then stockholders and warrant holders. The opinion of the special tax counsel relied on the IRS Ruling as to matters covered by it. The IRS Ruling and the opinion of the special tax counsel were based on, among other things, certain representations and assumptions as to factual matters made by Tribune and certain of its then stockholders. The failure of any factual representation or assumption to be true, correct and complete in all material respects could adversely affect the validity of the IRS Ruling or the opinion of the special tax counsel. An opinion of counsel represents counsel’s best legal judgment, is not binding on the IRS or the courts, and the IRS or the courts may not agree with the opinion. In addition, the IRS Ruling and the opinion of the special tax counsel were based on the current law then in effect, and cannot be relied upon if current law changes with retroactive effect. If the Tribune Publishing spin-off is ultimately determined not to be tax free, we could be liable for the U.S. federal and state income taxes imposed as a result of the transaction. Furthermore, events subsequent to the distribution could cause us to recognize a taxable gain in connection therewith. Although Tribune Publishing is required to indemnify us against taxes on the distribution that arise after the distribution as a result of actions or failures to act by Tribune Publishing or any member thereof, Tribune Publishing’s failure to meet such obligations and our administrative and legal costs in enforcing such obligations may have a material adverse effect on our financial condition. 40 Federal and state fraudulent transfer laws and Delaware corporate law may permit a court to void the Tribune Publishing spin-off, which would adversely affect our financial condition and our results of operations. In connection with the Tribune Publishing spin-off, Tribune undertook several corporate reorganization transactions which, along with the contribution of the Tribune Publishing business, the distribution of Tribune Publishing shares and the cash dividend that was paid to Tribune, may be subject to challenge under federal and state fraudulent conveyance and transfer laws as well as under Delaware corporate law, even though the Tribune Publishing spin-off has been completed. Under applicable laws, any transaction, contribution or distribution contemplated as part of the Tribune Publishing spin-off could be voided as a fraudulent transfer or conveyance if, among other things, the transferor received less than reasonably equivalent value or fair consideration in return for, and was insolvent or rendered insolvent by reason of, the transfer. We cannot be certain as to the standards a court would use to determine whether or not any entity involved in the Tribune Publishing spin-off was insolvent at the relevant time. In general, however, a court would look at various facts and circumstances related to the entity in question, including evaluation of whether or not: • the sum of its debts, including contingent and unliquidated liabilities, was greater than the fair market value of all of its assets; • the present fair market value of its assets was less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they become absolute and mature; or • it could pay its debts as they become due. If a court were to find that any transaction, contribution or distribution involved in the Tribune Publishing spin-off was a fraudulent transfer or conveyance, the court could void the transaction, contribution or distribution. In addition, the distribution could also be voided if a court were to find that it is not a legal distribution or dividend under Delaware corporate law. The resulting complications, costs and expenses of either finding would materially adversely affect our financial condition and results of operations. We may be exposed to additional liabilities as a result of the Tribune Publishing spin-off. The separation and distribution agreement Tribune entered into in connection with the Tribune Publishing spin-off sets forth the distribution of assets, liabilities, rights and obligations of Tribune and Tribune Publishing following the spin-off, and includes indemnification obligations for such liabilities and obligations. In addition, pursuant to the tax matters agreement, certain income tax liabilities and related responsibilities are allocated between, and indemnification obligations have been assumed by, each of Tribune and Tribune Publishing. In connection with the Tribune Publishing spin-off, Tribune also entered into an employee matters agreement, pursuant to which certain obligations with respect to employee benefit plans were allocated to Tribune Publishing. Each company will rely on the other company to satisfy its performance and payment obligations under these agreements. Certain of the liabilities to be assumed or indemnified by Tribune or Tribune Publishing under these agreements are legal or contractual liabilities of the other company. However, it could be later determined that Tribune must retain certain of the liabilities allocated to Tribune Publishing pursuant to these agreements, including with respect to certain multiemployer benefit plans, which amounts could be material. Furthermore, if Tribune Publishing were to breach or be unable to satisfy its material obligations under these agreements, including a failure to satisfy its indemnification obligations, Tribune could suffer operational difficulties or significant losses. 41 I tem 1B. Unresolved Staff Comments None. Item 2. Properties We have office space for our corporate headquarters in Irving, TX, which is leased through 2024. Each of our markets has facilities consisting of offices, studios, sales offices and tower and transmitter sites. We own approximately 56% of our office and studio locations and approximately 60% of our tower and transmitter locations. The remaining properties that we utilize in our operations are leased. We consider all of our properties, together with equipment contained therein, to be adequate for our present needs. We continually evaluate our future needs and from time to time will undertake significant projects to replace or upgrade facilities. While none of our owned or leased properties is individually material to our operations, if we were required to relocate any towers, the cost could be significant. This is because the number of sites in any geographic area that permit a tower of reasonable height to provide good coverage of the market is limited, and zoning and other land use restrictions, as well as Federal Aviation Administration and FCC regulations, limit the number of alternative locations or increase the cost of acquiring them for tower sites. See Item 1, “Business—The Stations” for a complete list of stations by market. Item 3. Legal Proceedings The information set forth under Note 17 to our Consolidated Financial Statements included in Part IV, Item 15(a) of this Annual Report on Form 10-K is incorporated herein by reference. For additional discussion of certain risks associated with legal proceedings, see “Risk Factors” above.” Item 4. Mine Safety Disclosures None. 42 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Prices; Record Holders and Dividends Our Class A Common Stock trades on The NASDAQ Global Select Market (“NASDAQ”) under the symbol “NXST.” As of February 23, 2021, there were approximately 58,000 shareholders of record of our Class A Common Stock, including shares held in nominee names by brokers and other institutions. Pursuant to our current dividend policy, our board of directors declared in 2020, 2019 and 2018 total annual cash dividends of $2.24 per share, $1.80 per share and $1.50 per share, respectively, with respect to outstanding shares of our Class A common stock. The dividends were paid in equal quarterly installments. On January 27, 2021, our board of directors approved a 25% increase in the quarterly cash dividend to $0.70 per share of outstanding Class A Common Stock beginning with the first quarter of 2021. Dividend determinations will depend upon, among other things, our future operations and earnings, targeted future acquisitions, capital requirements and surplus, general financial condition, contractual restrictions and other factors as our board of directors may deem relevant. Additionally, the Company’s senior secured credit facilities and the indentures governing Nexstar’s existing notes limit our ability to pay dividends. Given these considerations, our board of directors may increase or decrease the amount of dividends at any time and may also decide to suspend or discontinue the payment of cash dividends in the future. Recent Sales of Unregistered Securities None. Issuer Purchases of Equity Securities The following is a summary of Nexstar’s repurchases of its Class A common stock by month during the fourth quarter of 2020: Total Number of Shares Approximate Dollar Value Purchased as Part of of Shares That May Yet Be Total Number Average Price Publicly Announced Purchased Under the of Shares Purchased Paid per Share Plans or Programs Plans or Programs November 9 - 20, 2020 481,235 $ 99.54 481,235 $ 211,312,650 December 11 - 28, 2020 354,510 $ 102.61 354,510 174,934,661 835,745 $ 100.84 835,745 On January 27, 2021, our Board of Directors approved a new share repurchase program authorizing the Company to repurchase up to $1.0 billion of its Class A common stock. The new $1.0 billion share repurchase program increased the Company’s existing share repurchase authorization, of which $174.9 million remained outstanding as of December 31, 2020. Securities Authorized for Issuance Under Equity Compensation Plans as of December 31, 2020 Number of securities to be Weighted Number of securities issued upon average exercise remaining available exercise of price of for future issuance outstanding outstanding excluding securities Plan Category options options reflected in column (a) (a) (b) (c) Equity compensation plans approved by security holders 1,504,873 $ 21.42 2,852,958 Equity compensation plans not approved by security holders - - - 1,504,873 $ 21.42 2,852,958 For a more detailed description of our equity plans and grants, we refer you to Note 14 to the Consolidated Financial Statements included in Part IV, Item 15(a) of this Annual Report on Form 10-K. 43 Comparative Stock Performance Graph The following graph compares the total return of our Class A Common Stock based on closing prices for the period from December 31, 2015 through December 31, 2020 with the total return of the NASDAQ Composite Index and our peer index of pure play television companies. Our peer index consists of the following publicly traded companies: Gray Television, Inc., Tegna, Inc. and Sinclair. The graph assumes the investment of $100 in our Class A Common Stock and in both of the indices on December 31, 2015, with the reinvestment of dividends into shares of our Class A Common Stock or the indices, as applicable. The performance shown is not necessarily indicative of future performance. 12/31/2015 12/31/2016 12/31/2017 12/31/2018 12/31/2019 12/31/2020 Nexstar Media Group, Inc. (NXST) $ 100.0 $ 110.00 $ 138.61 $ 142.27 $ 216.06 $ 206.29 NASDAQ Composite Index $ 100.0 $ 108.87 $ 141.13 $ 137.12 $ 187.44 $ 271.64 Peer Group $ 100.0 $ 89.48 $ 101.39 $ 78.18 $ 111.76 $ 100.21 44 I tem 6. Selected Financial Data The selected consolidated financial data as of and for the years ended December 31, 2020, 2019, 2018, 2017, and 2016 are presented in the table below. The period-to-period comparability of our consolidated financial statements is affected by acquisitions. Fiscal year 2020 is a political year and all of the full power television stations we acquired in September 2019 were in full operations in the current year. In 2020, we and Mission acquired various full power television stations in various markets, and we also acquired BestReviews. In 2019, we acquired 23 full power television stations, net of all station divestitures, one AM radio station, a national entertainment cable network, a 31.3% interest in TV Food Network and a portfolio of real estate assets. In 2018, we acquired or began providing services to five full power television stations and acquired one digital business. In 2017, we acquired or began providing services to 65 full power television stations, net of all station divestitures, and acquired two digital businesses. In 2016, we acquired nine full power television stations, including consolidated VIEs. This information should be read in conjunction with Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our Consolidated Financial Statements and related Notes included herein. Amounts below are presented in thousands, except per share amounts. 2020 2019 2018 2017 2016 Statements of Operations Data , for the years ended December 31: Net revenue $ 4,501,269 $ 3,039,324 $ 2,766,696 $ 2,431,966 $ 1,103,190 Operating expenses (income): Corporate expenses 182,960 189,548 110,921 138,394 51,177 Direct operating expenses, net of trade 1,708,124 1,331,248 1,101,423 978,930 371,242 Selling, general and administrative expenses, excluding corporate 729,097 540,433 469,012 466,712 212,429 Trade and barter expense 12,396 17,384 16,494 56,970 45,439 Depreciation 147,688 123,375 109,789 100,658 51,300 Amortization of intangible assets 279,710 200,317 149,406 159,500 46,572 Amortization of broadcast rights, excluding barter 137,490 85,018 61,342 62,908 22,461 Goodwill and intangible assets impairment (1) - 63,317 19,911 19,985 15,262 Gain on disposal of stations, net (2) (7,473 ) (96,091 ) - (57,716 ) - Reimbursement from the FCC related to station repack (3) (57,261 ) (70,356 ) (29,381 ) - - Change in the fair value of contingent consideration attributable to a merger (4) 3,933 - - - - Gain on relinquishment of spectrum (4) (10,791 ) - - - - Total operating expenses 3,125,873 2,384,193 2,008,917 1,926,341 815,882 Income from operations (5) 1,375,396 655,131 757,779 505,625 287,308 Income (loss) on equity investments, net (6) 70,154 17,925 (2,436 ) (1,268 ) (562 ) Interest expense, net (335,303 ) (304,350 ) (220,994 ) (241,195 ) (116,081 ) Loss on extinguishment of debt, net (7) (50,745 ) (10,301 ) (12,120 ) (34,882 ) - Pension and other postretirement plans credit, net (8) 46,010 15,600 10,755 13,120 - Other (expenses) income (944 ) (684 ) (39 ) (16 ) 7 Income before income taxes 1,104,568 373,321 532,945 241,384 170,672 Income tax (expense) benefit (9) (296,508 ) (137,026 ) (144,680 ) 233,943 (77,572 ) Net income 808,060 236,295 388,265 475,327 93,100 Net (income) loss attributable to noncontrolling interests 3,381 (6,036 ) 1,212 (330 ) (1,563 ) Net income attributable to Nexstar Media Group, Inc. $ 811,441 $ 230,259 $ 389,477 $ 474,997 $ 91,537 Net income per common share attributable to Nexstar Media Group, Inc.: Basic $ 18.06 $ 5.01 $ 8.52 $ 10.38 $ 2.98 Diluted $ 17.37 $ 4.80 $ 8.21 $ 10.07 $ 2.89 Weighted average common shares outstanding: Basic 44,921 45,986 45,718 45,754 30,687 Diluted 46,720 47,923 47,412 47,149 31,664 (1) Certain of our digital businesses recognized impairment charges related to goodwill and finite-lived intangible assets during the years ended December 31, 2019, 2018, 2017 and 2016. (2) In 2020, we sold our sports betting information website business and two Fox affiliate stations for a total gain of $7.1 million. In 2019, in connection with our merger with Tribune, we sold the assets of 21 full power television stations in 16 markets, eight of which were previously owned by us and 13 of which were previously owned by Tribune. These divestitures resulted in a $96.1 million net gain on disposals. In 2017, in connection with our merger with Media General, Inc. (“Media General”), we sold the assets of 12 full power television stations in 12 markets, five of which were previously owned by us and seven of which were previously owned by Media General. These divestitures resulted in a $57.7 million net gain on disposals. For additional information on our 2020 and 2019 divestitures, refer to Note 3 to our Consolidated Financial Statements in Part IV, Item 15(a) of this Form 10-K. 45 (3) Certain of the Company’s stations have been assigned to new channels (“repack”) in connection with the FCC’s process of repurposing a portion of the broadcast television spectrum for wireless broadband use. These stations have vacated their former channels and are currently spending costs, mainly capital expenditures, to construct and license the necessary technical modifications to operate permanent facilities on their newly assigned channels. Subject to fund limitations, the FCC reimburses television broadcasters, MVPDs and other parties for costs reasonably incurred due to the repack . The reimbursements received by the Company from the FCC were recognized as operating income in 20 20, 2019 and 2018. (4) In April 2020, we completed a station’s conversion to a VHF channel representing our final relinquishment of spectrum pursuant to the FCC’s incentive auction conducted in 2016-2017. Accordingly, the associated spectrum asset with a carrying amount of $67.2 million and liability to surrender spectrum of $78.0 million, were derecognized, resulting in a non-cash gain on relinquishment of spectrum of $10.8 million. This gain was partially offset by a $3.9 million increase (expense) in the estimated fair value of contingent consideration liability related to a merger and spectrum auction. (5 ) Income from operations is generally higher during even-numbered years, when advertising revenue is increased due to the occurrence of state and federal elections and the Olympic Games. However, due to the accretive acquisitions in 2016 through 2020, the income from operations increased over time. Fiscal year 2020 notably had higher income from operations primarily due to an increase in political advertising revenue and contributions from our acquisition of Tribune in September 2019. These increases were partially offset by the business interruptions caused by COVID-19, mostly in the first part of the second quarter in 2020. ( 6 ) In connection with Nexstar’s merger with Tribune completed on September 19, 2019, Nexstar acquired a 31.3% ownership stake in TV Food Network. In 2020, Nexstar recognized a full year equity in income from this investment of $73.1 million. In 2019, from the date of acquisition to December 31, 2019, Nexstar recognized equity in income from this investment of $20.5 million. See Note 7 to our Consolidated Financial Statements in Part IV, Item 15(a) of this Annual Report on Form 10-K for additional information. ( 7 ) In September 2020, we redeemed the entire $900.0 million outstanding principal amount of its 5.625% senior unsecured notes due 2024 (the “5.625 Notes due 2024”), resulting in a loss on extinguishment of debt of $33.9 million. We also made prepayments of our outstanding term loans during 2020 resulting in a total loss on extinguishment of debt of $14.5 million. In November 2019, we redeemed the entire $400.0 million outstanding principal amount of our 5.875% senior unsecured notes due 2022 (the “5.875% Notes due 2022”) and the entire $275.0 million outstanding principal amount of our 6.125% senior unsecured notes due 2022 (the “6.125% Notes due 2022”), resulting in a loss on extinguishment of debt of $6.6 million. The Company also made prepayments of its outstanding term loans during 2019 resulting in total loss on extinguishment of debt of $3.7 million. In October 2018, we refinanced our then existing term loans and revolving loans. We also made prepayments of our outstanding term loans during 2018. These transactions resulted in total loss on extinguishment of debt of $12.1 million. In January 2017, we refinanced our then existing term loans and revolving loans. In February 2017, we redeemed the entire $525.0 million outstanding principal amount of our 6.875% senior unsecured notes due 2020. We also made prepayments of our outstanding term loans during 2017. These transactions in 2017 resulted in total loss on extinguishment of debt of $34.9 million. ( 8 ) The Company previously reported its pension and other postretirement benefit credit, consisting of expected return on plan assets and interest cost, as a credit to corporate expenses. In 2018, the Company adopted the FASB Accounting Standards Update (“ASU”) 2017-07 which requires presentation of net periodic benefit cost, other than service costs, as a separate line item below income from operations. The adoption of ASU 2017-17 reduced the operating income in 2017 by $13.2 million but did not impact net income. In 2020, we recorded a full year’s worth of the Tribune pension and OPEB plans credit. In 2019, we recorded a partial year pension and OPEB credit from September 19, 2019 to December 31, 2019 associated with the Tribune benefit plans. ( 9 ) On December 22, 2017, the Tax Cuts and Jobs Act of 2017 was signed into law which reduced the federal corporate income tax rate from 35% to 21%. The reduction in the federal corporate income tax rate resulted in a reduction of the Company’s net deferred tax liability of $322.2 million and a corresponding deferred income tax benefit in 2017. 2020 2019 2018 2017 2016 Balance Sheet data , as of December 31: Cash and cash equivalents $ 152,701 $ 232,070 $ 145,115 $ 115,652 $ 87,680 Working capital 479,094 404,210 362,903 385,515 173,639 Net intangible assets and goodwill 8,832,913 9,177,960 5,438,145 5,492,110 1,340,565 Total assets (1) 13,404,276 13,989,737 7,062,030 7,481,647 2,966,085 Total debt (1) 7,668,003 8,492,588 3,981,003 4,362,460 2,342,419 Total stockholders’ equity 2,536,876 2,053,493 1,868,984 1,581,310 284,354 Statements of Cash Flows data , for the years ended December 31: Net cash provided by (used in): Operating activities $ 1,254,170 $ 417,467 $ 736,867 $ 109,091 $ 284,253 Investing activities (2) (39,750 ) (4,702,155 ) (175,514 ) (2,066,285 ) (135,122 ) Financing activities (2) (1,293,789 ) 4,388,251 (531,890 ) 1,057,367 822,932 Capital expenditures, net of proceeds from asset disposals (3) 214,394 193,060 101,902 52,435 31,152 Cash payments for broadcast rights 193,586 100,630 61,979 62,531 23,004 (1) In 2019, the Company’s total assets and total debt increased following the consummation of our merger with Tribune in September 2019. The total purchase price of the Tribune acquisitions was $7.187 billion. In connection with the merger, we issued debt instruments with a total principal amount of $4.860 billion. In January 2017, the Company’s total assets and total debt increased following the consummation of our merger with Media General. The total purchase price of this acquisition was $4.347 billion. The Company issued term loans in January 2017 with a total principal amount of $3.044 billion, the proceeds of which were used to partially finance the merger and to refinance certain then-existing term loans with a total principal balance of $617.5 million. In 2017, we also assumed Media General’s $400.0 million 5.875% Notes due 2022 in connection with the merger, redeemed our $525.0 million 6.875% senior unsecured notes due 2020 in February 2017, and made prepayments on our term loans during the year. (2) Increases in use of cash for investing activities in 2019 and 2017 primarily relates to the payments of the purchase price, net of proceeds from station divestitures, to acquire Tribune in September 2019 and Media General in January 2017. Increase in the use of cash from financing activities in 2020 was primarily attributable to the repayments of our debt, payments of dividends and repurchase of our treasury stock. Increases in source of cash from financing activities in 2019, 2017 and 2016 were primarily due to issuances of debt to partially finance the acquisitions of Tribune and Media General. The use of cash for financing activities in 2018 was primarily due to prepayments of term loans. (3) In 2020, our capital expenditures included $54.7 million, which the FCC reimbursed in connection with the station repack. It also included capital expenditures of $4.9 million which was funded by the proceeds from the incentive auction received in 2017. In 2019, our capital expenditures included $79.3 million, which the FCC reimbursed in connection with the station repack. It also included capital expenditures of $7.2 million which were funded by the proceeds from the incentive auction received in 2017. In 2018, our capital expenditures included $26.8 million, which the FCC reimbursed in connection with the station repack. It also included capital expenditures of $2.9 million which were funded by the proceeds from the incentive auction received in 2017. 46 I tem 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis should be read in conjunction with Item 6. “Selected Financial Data” and our Consolidated Financial Statements and related Notes included in Part IV, Item 15(a) of this Annual Report on Form 10-K. As a result of our deemed controlling financial interests in the consolidated VIEs in accordance with U.S. GAAP, we consolidate the financial position, results of operations and cash flows of these VIEs as if they were wholly-owned entities. We believe this presentation is meaningful for understanding our financial performance. Refer to Note 2 to our Consolidated Financial Statements for a discussion of our determinations of VIE consolidation under the related authoritative guidance. The following discussion of our financial position and results of operations includes the consolidated VIEs’ financial position and results of operations. Executive Summary 2020 Highlights • Net revenue during 2020 increased by $1.462 billion, or 48.1%, compared to the same period in 2019. The increase in net revenue was primarily due to the incremental revenue from the Tribune acquisition in 2019 of $1.163 billion and current year acquisitions of $90.2 million. Additionally, both legacy station distribution revenues and political advertising revenues increased by $247.1 million and $293.6 million, respectively, as a result of increases in the subscriber rates and 2020 being a federal election year. These increases were partially offset by a decrease in revenue from core advertising of our legacy stations of $141.3 million, primarily due to business disruptions caused by COVID-19 and change in the mix between core and political advertising, a decrease in net revenue from station divestitures of $150.0 million and a net decrease in revenue of our digital businesses and legacy stations of $29.5 million, primarily due to the combined effect of business disruptions caused by COVID-19 and realigned digital business operations. • During the year ended December 31, 2020, we received a total of $223.3 million in cash distributions from our 31.3% equity investment in TV Food Network. • During 2020 our Board of Directors declared and paid quarterly dividends of $0.56 per share of our outstanding common stock, or total dividend payments of $101.0 million. • During 2020, we repurchased a total of 3,085,745 shares of our Class A common stock for $281.8 million, funded by cash on hand. As of December 31, 2020, the remaining available amount under the share repurchase authorization was $174.9 million. • On October 1, 2020, Nexstar Broadcasting, Inc., our wholly-owned subsidiary, filed a Certificate of Amendment with the Secretary of State of Delaware to change its name to Nexstar Inc. In connection with this change, effective on November 1, 2020, we merged our two primary operating subsidiaries, Nexstar Inc. and Nexstar Digital, LLC, with Nexstar Inc. surviving the merger as our single operating subsidiary. Accordingly, our broadcasting, network and digital businesses are now operating under the Nexstar Inc. umbrella. 2020 Nexstar Acquisitions On December 29, 2020, we acquired 100.0% of the membership interests in BestReviews from TribPub and BR Holdco for $169.9 million in cash, funded by cash on hand. BestReviews engages in the business of testing, researching and reviewing consumer products. The acquisition of BestReviews diversifies our digital portfolio while presenting new revenue channels by leveraging our media content, national reach, and consumer digital usage across multiple platforms. On September 17, 2020, we acquired WDKY-TV, the Fox affiliate in the Lexington, KY market, from Sinclair for $18.0 million in cash, funded by cash on hand. This acquisition allowed us entry into this market. On March 2, 2020, we acquired the Fox affiliate television station WJZY and the MNTV affiliate television station WMYT in the Charlotte, NC market from Fox for $45.3 million in cash. This acquisition allowed us entry into this market. On January 27, 2020, we acquired certain non-license assets associated with television station KGBT-TV in the Harlingen-Weslaco-Brownsville-McAllen, Texas market from Sinclair for $17.9 million in cash funded by cash on hand. 47 2020 Mission Acquisitions On December 30, 2020, Mission, our consolidated VIE, acquired the CW affiliate station WPIX in New York, NY from Scripps. Mission funded the purchase price of $85.1 million in cash through a combination of borrowing from its revolving credit facility and cash on hand . Upon Mission’s acquisition of WPIX, it entered into a TBA with us. Mission also granted us an option to purchase WPIX from Mission, subject to FCC consent. These transactions allowed the Company’s entry into this market. On November 23, 2020, Mission acquired WXXA, the Fox affiliate in the Albany, NY market, and WLAJ, the ABC affiliate in the Lansing, MI market, from Shield for $20.8 million in cash, funded through a combination of Mission’s borrowing from its revolving credit facility and cash on hand. Effective on November 23, 2020, Mission assumed the existing JSAs and SSAs between Shield and us for the stations. Mission also granted us options to purchase the stations from Mission, subject to FCC consent. Mission’s purchase of these stations allowed its entry into these markets. Prior to Mission’s acquisition, we were the primary beneficiary of these stations and consolidated their accounts into our financial statements. Under Mission’s ownership, we remained the primary beneficiary and continued to consolidate these stations into our financial statements. On November 16, 2020, Mission acquired KASY, KWBQ and KRWB from Tamer for $1.8 million in cash, funded through a combination of Mission’s borrowing from its revolving credit facility and cash on hand. KASY (an MNTV affiliate), KWBQ (a CW affiliate) and KRWB (a CW affiliate) are full power television stations serving the Albuquerque, New Mexico market. Effective on November 16, 2020, Mission assumed the existing SSA between Tamer and us for the stations. Mission also granted us an option to purchase the stations from Mission, subject to FCC consent. Mission’s purchase of these stations allowed its entry into this market. Prior to Mission’s acquisition, we were the primary beneficiary of these stations and consolidated their accounts into our financial statements. Under Mission’s ownership, we remained the primary beneficiary and continued to consolidate these stations into our financial statements. On September 1, 2020, Mission acquired television stations KMSS serving the Shreveport, Louisiana market, KPEJ serving the Odessa, Texas market and KLJB serving the Quad Cities, Iowa/Illinois market from Marshall. The purchase price for the acquisition was $53.2 million, of which $49.0 million was applied against Mission’s existing loans receivable from Marshall on a dollar-for-dollar basis and the remaining $4.2 million in cash was funded by cash on hand. At closing, Mission entered into new SSAs with us for the stations. This acquisition allowed Mission’s entry into these markets. 2020 Nexstar Dispositions On March 2, 2020, we completed the sale of Fox affiliate television station KCPQ and the MNTV affiliate television station KZJO in the Seattle, WA market, as well as Fox affiliate television station WITI in the Milwaukee, WI market, to Fox for approximately $349.9 million in cash, resulting in a net gain of $4.7 million. Our proceeds from the sale of the stations were partially used to prepay a portion of our term loans. On January 14, 2020, we sold our sports betting information website business to Star Enterprises Ltd., a subsidiary of Alto Holdings, Ltd., for a net consideration of $12.9 million (net of $2.4 million cash balance of this business that was transferred to the buyer upon sale). We recognized a $2.4 million gain on disposal of this business. See also Notes 3 and 9 to our Consolidated Financial Statements in Part IV, Item 15(a) of this Annual Report on Form 10-K for additional information on the above transactions. 48 2020 Debt Transactions • On September 3, 2020, we and Mission amended each of our credit agreements. The amendments provided for an incremental senior secured revolving credit facility in an aggregate capacity of $280.0 million, of which $30.0 million was initially allocated to us and $250.0 million was initially allocated to Mission. The incremental revolving credit facility is in addition to the unused revolving credit facilities under our and Mission’s existing revolving credit facilities. • On September 3, 2020, Mission drew upon $225.0 million under its incremental revolving credit facility and used the proceeds to pay in full the remaining outstanding principal balance under Mission’s Term Loan B of $224.5 million . On November 22, 2020, Mission borrowed $22.0 million under its incremental revolving credit facility to partially fund the acquisition of television stations from Shield by paying in full the latter’s outstanding Term Loan A with a total principal amount of $20.7 million . • On September 25, 2020, we completed our sale and issuance of $1.0 billion 4.75% Notes due 2028 at par. The net proceeds from the issuance of the 4.75% Notes due 2028 was used to redeem in full our $900.0 million 5.625% Notes due 2024 at 102.813% of the principal amount, plus accrued interest and fees and expenses. The remainder of the proceeds was used for general corporate purposes. • On December 3, 2020, we reallocated $80.0 million from our existing revolving credit facility to Mission which the latter drew upon on the same date following the reallocation. On December 30, 2020, Mission used the proceeds of the loans to partially fund its acquisition of television station WPIX . • In 2020, we prepaid a total of $980.0 million in principal balance under our Term Loan A and Term Loan B, funded by cash on hand. The prepayments resulted in a loss on debt extinguishment of $14.2 million. • During the year ended December 31, 2020, the Company repaid scheduled maturities of $49.6 million under its Term Loan A and $9.4 million under its Term Loan B. Impact of COVID-19 Pandemic COVID-19 was first reported in late 2019 and has since dramatically impacted the global health and economic environment, including millions of confirmed cases, business slowdowns or shutdowns, government challenges and market volatility. In March 2020, the World Health Organization characterized COVID-19 as a pandemic and the President of the United States declared the COVID-19 pandemic a national emergency. The virus continues to spread throughout the U.S. and the world and has resulted in authorities implementing numerous measures to contain the virus, including travel bans and restrictions, quarantines, shelter-in-place orders and business limitations and shutdowns. While we are unable to accurately predict the full impact that COVID-19 will have on our future results from operations, financial condition, liquidity and cash flows due to numerous uncertainties, including the duration, severity and containment measures, our compliance and the measures we have taken around the pandemic situation have impacted our day-to-day operations and disrupted our business and operations, as well as those of our key business partners, affiliates, vendors and other counterparties, and will continue to do so for an indefinite period of time. In response to COVID-19, we implemented remote working for many of our employees. Our work locations developed and implemented their own plans for staffing during the pandemic, with a focus on reducing headcounts within our facilities to reduce the risk for those employees whose job functions could not be performed remotely, and in compliance with applicable state and local safety requirements and protocols. Our leadership, crisis management and business resumption teams and local site leadership continue closely to monitor and address the developments, including the impact on our company, our employees, our customers, our suppliers and our communities. We considered and continue to consider guidance from the Centers for Disease Control, other health organizations, federal, state and local governmental authorities, and our customers, among others. We have taken, and continue to take, robust actions to help protect the health, safety and well-being of our employees, to support our suppliers and local communities, and to continue to serve our customers. 49 The disruptions caused by COVID-19 had an adverse impact on our business and our financial results mostly in the first part of the second quarter of 2020. This was followed by a significant improvement in our financial results through December 31, 2020 as certain areas throughout the United States permitted the re-opening of non-essential businesses , which has had a favorable impact to the macroeconomic environment and to the Company’s revenue . The current year results were also higher than prior year primarily due to the increase in revenue from political advertising and contributions from the acquisition of Tribune in September 2019 . Overall, the Company remained profitable in 2020 and the disruptions from COVID-19 did not have a material impact on its liquidity . T here were also no material changes in our customer mix, including our advertisers, MVPDs and OVDs . As of December 31, 2020, our unrestricted cash on hand amounted to $152.7 million, a decrease from the December 31, 2019 level of $232.1 million as we allocated resources toward acquisition of businesses and leverage reduction, including debt prepayments, repurchases of our Class A common stock and dividends to stockholders. As of December 31, 2020, we ha d a positive working capital of $ 4 79 .1 million, an increase from the December 31, 2019 levels of $404.2 million. We continue to generate operating cash flows and we believe we have sufficient unrestricted cash on hand and have the availability to access additional cash up to $92.7 million and $3.0 million under our and Mission’s respective amended revolving credit facilities (with a maturity date of October 2023) to meet our business operating requirements, our capital expenditures and to continue to service our debt for at least the next 12 months as of the filing date of this Annual Report on Form 10-K. The full extent of the impact of the COVID-19 pandemic on our future business operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the COVID-19 outbreak, new information which may emerge concerning the severity and impact of the COVID-19 pandemic, and any additional preventative and protective actions that the U.S. government, or the Company, may direct, which may result in an extended period of continued business disruption. Further financial impact cannot be reasonably estimated at this time but may continue to have a material impact on our business and results of operations and may also have a material impact on our financial condition and liquidity. We will continue to evaluate the nature and extent of the impact of COVID-19 on our business in future periods. The CARES Act On March 27, 2020, the CARES Act was signed into law. The CARES Act provides opportunities for additional liquidity, loan guarantees, and other government programs to support companies affected by the COVID-19 pandemic and their employees. The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, deferral of contributions to qualified pension plans and other postretirement benefit plans, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. In particular, under the CARES Act, (i) for taxable years beginning before 2021, net operating loss carryforwards and carrybacks may offset 100% of taxable income, (ii) NOLs arising in 2018, 2019, and 2020 taxable years may be carried back to each of the preceding five years to generate a refund and (iii) for taxable years beginning in 2019 and 2020, the base for interest deductibility is increased from 30% to 50% of EBITDA. Under the CARES Act, we elected to defer $31.7 million of employer social security payments in two equal installments on December 31, 2021 and 2022. We elected not to defer any cash contribution requirements to our qualified pension plans under the CARES Act. We intend to continue to review and consider any available potential benefits under the CARES Act for which we qualify, including those described above. The U.S. government or any other governmental authority that agrees to provide such aid under the CARES Act or any other crisis relief assistance may impose certain requirements on the recipients of the aid, including restrictions on executive officer compensation, dividends, prepayment of debt, limitations on debt and other similar restrictions that will apply for a period of time after the aid is repaid or redeemed in full. Overview of Operations As of December 31, 2020, we owned, operated, programmed or provided sales and other services to 198 full power television stations, including those owned by VIEs, in 116 markets in 39 states and the District of Columbia. The stations are affiliates of ABC, NBC, FOX, CBS, The CW, MNTV and other broadcast television networks. Through various local service agreements, we provided sales, programming and other services to 37 full power television stations owned by independent third parties, of which 36 full power television stations are VIEs that are consolidated into our financial statements. See Note 2 to our Consolidated Financial Statements in Part IV, Item 15(a) of this Annual Report on Form 10-K for a discussion of the local service agreements we have with these independent third parties. We also own WGN America, a national general entertainment cable network and the home of our national newscast NewsNation, digital multicast network services, various digital products, services and content, a 31.3% ownership stake in TV Food Network, and a portfolio of real estate assets. On October 1, 2020, Nexstar Broadcasting, Inc., our wholly-owned subsidiary, filed a Certificate of Amendment with the Secretary of State of Delaware to change its name to Nexstar Inc. In connection with this change, effective on November 1, 2020, we merged our two primary operating subsidiaries, Nexstar Inc. and Nexstar Digital, LLC, with Nexstar Inc. surviving the merger as our single operating subsidiary. Accordingly, our broadcasting, network and digital businesses are now operating under the Nexstar Inc. umbrella. 50 The operating revenue of our stations is derived substantially from broadcast and website advertising revenue, which is affected by a number of factors, including the economic conditions of the markets in which we operate, the demographic makeup of those markets and the marketing strategy we employ in each market. Most advertising contracts are short-term and generally run for a few weeks. For the years ended December 31, 2020 and 2019 , revenue generated by our television stations from core local advertising represented approximately 69% and 72% , respectively, of our consolidated core advertising net revenue (total of core local and national advertising revenue, excluding political advertising revenue). The remaining core advertising revenue represents inventory sold for national or political advertising. All national and political revenue is derived from advertisements placed through advertising agencies. While the majority of local spot revenue is placed by local agencies, some advertisers place their schedules directly with the stations’ local sales staff, thereby eliminating the agency commission. Each station also has an agreement with a national representative firm that provides for sales representation outside the particular station’s market. Advertising schedules received through the national representative firm are for national or large regional accounts that advertise in several markets simultaneously. National representative commission rates vary within the industry and are governed by each station’s agreement. Another source of revenue for the Company that has grown significantly in recent years is its distribution revenue which relates to retransmission of Company stations’ signals and the carriage of WGN America (NewsNation and other entertainment programming) by cable, satellite and other MVPDs and OVDs. MVPDs generally pay for retransmission rights on a rate per subscriber basis. The growth of this revenue stream was primarily due to increases in the subscriber rates paid by MVPDs resulting from contract renewals (retransmission consent and carriage agreements generally have a three-year term), scheduled annual escalation of rates per subscriber, and the establishment of distribution agreements with OVDs . Additionally, the rates per subscriber of newly acquired television stations are converted into our terms which are typically higher than those of other companies because we have been negotiating such agreements for a longer period of time and are, therefore, approximately one full negotiating cycle ahead of our competitors. Currently, broadcasters deliver more than 30% of all television viewing audiences in a pay television household but are paid approximately 12-14% of the total cable programming fees. Nexstar anticipates that retransmission fees will continue to increase until there is a more balanced relationship between viewers delivered and fees paid for delivery of such viewers. Most of our stations have a network affiliation agreement pursuant to which the network provides programming to the station during specified time periods, including prime time, in exchange for affiliation fees paid to the networks, in most cases, and the right to sell a substantial majority of the advertising time during these broadcasts. Network affiliation fees have been increasing industry wide and we expect that they will continue to increase over the next several years. Each station acquires licenses to broadcast programming in non-news and non-network time periods. The licenses are either purchased from a program distributor for cash and/or the program distributor is allowed to sell some of the advertising inventory as compensation to eliminate or reduce the cash cost for the license. The latter practice is referred to as barter broadcast rights. Our primary operating expenses include employee salaries, commissions and benefits, newsgathering and programming costs. A large percentage of the costs involved in the operation of our stations and the stations we provide services to remains relatively fixed. We guarantee full payment of all obligations incurred under Mission’s senior secured credit facility in the event of its default. Mission is a guarantor of our senior secured credit facility, our 5.625% Notes due 2027 and our 4.75% Notes due 2028. In consideration of our guarantee of Mission’s senior secured credit facility, except for three stations, Mission has granted us 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 us without consent or approval by Mission or its shareholders. We expect these option agreements to be renewed upon expiration. We do not own the consolidated VIEs or their television stations. However, we are deemed under U.S. GAAP to have controlling financial interests for financial reporting purposes in these entities because of (1) the local service agreements we have with their stations, (2) our guarantee of the obligations incurred under Mission’s senior secured credit facilities, (3) our power over significant activities affecting the VIEs’ economic performance, including budgeting for advertising revenue, advertising sales and, in some cases, hiring and firing of sales force personnel and (4) purchase options granted by each consolidated VIE which permit us to acquire the assets and assume the liabilities of each of these VIEs’ stations, exclusive of stations KMSS, KPEJ and KLJB, at any time, subject to FCC consent. In compliance with FCC regulations for all the parties, each of the consolidated VIEs maintains complete responsibility for and control over programming, finances and personnel for its stations. Refer to Notes 2 and 3 to our Consolidated Financial Statements in Part IV, Item 15(a) of this Annual Report on Form 10-K for additional information with respect to consolidated VIEs and acquisitions. 51 Regulatory Developments As a television broadcaster, the Company is highly regulated, and its operations require that it retain or renew a variety of government approvals and comply with changing federal regulations. In 2016, the FCC reinstated a previously adopted rule providing that a television station licensee which sells more than 15 percent of the weekly advertising inventory of another television station in the same DMA is deemed to have an attributable ownership interest in that station. Parties to existing JSAs that were deemed attributable interests and did not comply with the FCC’s local television ownership rule were given until September 30, 2025 to come into compliance. In November 2017, the FCC adopted an order on reconsideration that eliminated the rule. That elimination became effective on February 7, 2018. On September 23, 2019, a federal court of appeals vacated the FCC’s November 2017 order on reconsideration. The court later denied petitions for en banc rehearing; on November 29, 2019 its decision became effective; and on December 20, 2019 the FCC issued an order that formally reinstated the rule. On April 17, 2020, the FCC and a group of media industry stakeholders (including Nexstar) filed separate petitions for certiorari requesting that the U.S. Supreme Court review the September 2019 appeals court decision. The Supreme Court granted certiorari on October 2, 2020. It held oral argument in the case on January 19, 2021, and a decision is expected later in 2021. If the Company is ultimately required to amend or terminate its existing JSAs, the Company could have a reduction in revenue and increased costs if it is unable to successfully implement alternative arrangements that are as beneficial as the existing JSAs. The FCC has repurposed a portion of the broadcast television spectrum for wireless broadband use. In an incentive auction which concluded in April 2017, certain television broadcasters accepted bids from the FCC to voluntarily relinquish their spectrum in exchange for consideration. Television stations that did not relinquish their spectrum were “repacked” into the frequency band still remaining for television broadcast use. In July 2017, the Company received $478.6 million in gross proceeds from the FCC for eight stations that now share a channel with another station, one station that moved to a VHF channel in 2019, one station that moved to a VHF channel in April 2020 and one that went off the air in November 2017. The station that went off the air did not have a significant impact on our 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. Sixty-one (61) full power stations owned by Nexstar and 17 full power stations owned by VIEs were assigned to new channels in the reduced post-auction television band. These stations have commenced operation on their new assigned channels and have ceased operating on their former channels. 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. D uring the years ended December 31, 2020, 2019 and 2018, the Company spent a total of $54.7 million, $79.3 million and $26.8 million, respectively, in capital expenditures related to station repack which were recorded as assets under the property and equipment caption in the accompanying Consolidated Balance Sheets. During the years ended December 31, 2020, 2019 and 2018, the Company received $57.3 million, $70.4 million and $29.4 million, respectively, in reimbursements from the FCC related to these expenditures which were recorded as operating income in the accompanying Consolidated Statements of Operations and Comprehensive Income. As of December 31, 2020, approximately $23.7 million of estimated remaining costs in connection with the station repack are expected to be incurred by the Company, some or all of which will be reimbursable. If the FCC fails to fully reimburse the Company’s repacking costs, the Company could have increased costs related to the repack. Seasonality Advertising revenue is positively affected by national and regional political election campaigns and certain events such as the Olympic Games or the Super Bowl. Advertising revenue is generally highest in the second and fourth quarters of each year, due in part to increases in consumer advertising in the spring and retail advertising in the period leading up to, and including, the holiday season. In addition, advertising revenue is generally higher during even-numbered years, when state, congressional and presidential elections occur and from advertising aired during the Olympic Games. Fiscal year 2020 was a federal election year. The rescheduling of the 2020 Summer Olympics to 2021, due to the COVID-19 pandemic, decreased our advertising revenue in 2020 but is expected to increase our advertising revenue in 2021 if the Summer Olympics occur as scheduled. 52 Historical Performance Revenue The following table sets forth the amounts of the Company’s principal types of revenue (dollars in thousands) and each type of revenue as a percentage of total net revenue for the years ended December 31: 2020 2019 2018 Amount % Amount % Amount % Core advertising (local and national) $ 1,571,072 34.9 $ 1,335,126 43.9 $ 1,089,920 39.4 Political advertising 507,564 11.3 51,889 1.7 251,209 9.1 Distribution 2,152,622 47.8 1,368,881 45.0 1,121,081 40.5 Digital 223,368 4.9 241,519 8.0 261,159 9.4 Other 34,468 0.8 24,524 0.8 26,485 1.0 Trade 12,175 0.3 17,385 0.6 16,842 0.6 Total net revenue $ 4,501,269 100.0 $ 3,039,324 100.0 $ 2,766,696 100.0 Results of Operations The following table sets forth a summary of the Company’s operations for the years ended December 31 (dollars in thousands), and each component of operating expense as a percentage of net revenue: 2020 2019 2018 Amount % Amount % Amount % Net revenue $ 4,501,269 100.0 $ 3,039,324 100.0 $ 2,766,696 100.0 Operating expenses (income): Corporate expenses 182,960 4.1 189,548 6.2 110,921 4.0 Direct operating expenses, net of trade 1,708,124 37.9 1,331,248 43.8 1,101,423 39.8 Selling, general and administrative expenses, excluding corporate 729,097 16.2 540,433 17.8 469,012 17.0 Depreciation 147,688 3.3 123,375 4.1 109,789 4.0 Amortization of intangible assets 279,710 6.2 200,317 6.6 149,406 5.4 Amortization of broadcast rights 137,490 3.0 85,018 2.7 61,342 2.2 Trade and barter expense 12,396 0.3 17,384 0.6 16,494 0.6 Reimbursement from the FCC related to station repack (57,261 ) (1.3 ) (70,356 ) (2.3 ) (29,381 ) (1.1 ) Change in the fair value of contingent consideration attributable to a merger 3,933 0.1 - - - - Gain on relinquishment of spectrum (10,791 ) (0.2 ) - - - - Goodwill and intangible assets impairment - - 63,317 2.1 19,911 0.7 Gain on disposal of stations, net (7,473 ) (0.2 ) (96,091 ) (3.2 ) - - Total operating expenses 3,125,873 2,384,193 2,008,917 Income from operations $ 1,375,396 $ 655,131 $ 757,779 53 Year Ended December 31, 2020 Compared to Year Ended December 31, 2019 The period-to-period comparability of our consolidated operating results is affected by acquisitions. For each quarter we present, our legacy stations include those stations that we owned or provided services to for the complete quarter in the current and prior years. For our annual and year to date presentations, we combine the legacy stations’ amounts presented in each quarter. Revenue Core advertising revenue was $1.571 billion for the year ended December 31, 2020 as compared to $1.335 billion for the same period in 2019, an increase of $236.0 million, or 17.5%. The increase was primarily due to our incremental revenue generated from the Tribune acquisition in September 2019 of $419.1 million and current year station acquisitions of $24.7 million, partially offset by a decrease in revenue from station divestitures of $66.5 million. Our legacy stations’ core advertising revenue decreased by $141.3 million, primarily due to the business disruptions caused by COVID-19 and changes in the mix between our core and political advertising. Our largest advertiser category, automobile, represented approximately 18% and 22% of our local and national advertising revenue for each of the years ended December 31, 2020 and 2019, respectively. Overall, including past results of our newly acquired stations, revenues from our automobile category decreased by approximately 30% in 2020 compared to 2019. The other categories representing our top five were attorneys, medical/healthcare, radio/TV/cable/newspaper and home repair/manufacturing, which decreased in 2020, and insurance which increased in 2020. The full extent of the impact of the COVID-19 pandemic on our business operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the COVID-19 outbreak, new information which may emerge concerning the severity of the COVID-19 pandemic, and any additional preventative and protective actions that the U.S. government, we, or our business partners, may direct, which may result in an extended period of continued business disruption. Further financial impact cannot be reasonably estimated at this time but may continue to have a material impact on our core advertising revenue and our overall results of operations. Additionally, the rescheduling of the summer Olympics to 2021, also due to the COVID-19 pandemic, decreased our advertising revenue in 2020 but is expected to increase our advertising revenue in 2021 if the Summer Olympics occur as scheduled. Political advertising revenue was $507.6 million for the year ended December 31, 2020, compared to $51.9 million for the same period in 2019, an increase of $455.7 million as 2020 was a federal election year. Of this increase, $147.4 million was attributable to the incremental revenue from the Tribune stations we acquired in 2019, $17.3 million was attributable to current year station acquisitions and $293.6 million was attributable to our legacy stations. Distribution revenue was $2.153 billion for the year ended December 31, 2020, compared to $1.369 billion for the same period in 2019, an increase of $783.7 million, or 57.3%. The increase was primarily due to incremental revenue in 2020 generated from the Tribune acquisition in September 2019 of $571.3 million and current year station acquisitions of $47.0 million, partially offset by a decrease in revenue from station divestitures of $81.6 million. Our legacy stations’ revenue also increased by $247.1 million due to the combined effect of scheduled annual escalation of rates per subscriber, renewals of contracts providing for higher rates per subscriber (contracts generally have a three-year term), contributions from distribution agreements with OVDs and a net increase in revenue in 2020 resulting from the 2019 (July and August) temporary disruption of a distribution agreement with a certain customer, partially offset by temporary disruption of a certain customer in the month of December 2020. Broadcasters currently deliver more than 30% of all television viewing audiences in a pay television household but are paid approximately 12-14% of the total cable programming fees. We anticipate continued increase in distribution revenue until there is a more balanced relationship between viewers delivered and fees paid for delivery of such viewers. Digital revenue, representing advertising revenue on our stations’ web and mobile sites and revenue from our other digital operations, was $223.4 million for the year ended December 31, 2020, compared to $241.5 million for the same period in 2019, a decrease of $18.1 million or 7.5%. Our digital revenue from our legacy stations and other digital businesses decreased by $29.5 million primarily due to the business disruption caused by COVID-19 and realigned digital business operations. These decreases were partially offset by incremental revenue from the Tribune acquisition in September 2019 of $10.8 million, net of a decrease in revenue from station divestitures. Operating Expenses (Income) Corporate expenses, related to costs associated with the centralized management of our stations, were $183.0 million for the year ended December 31, 2020, compared to $189.5 million for the same period in 2019, a decrease of $6.6 million, or 3.5%. 54 Station direct operating expenses, consisting primarily of news, engineering, programming and selling, general and administrative expenses (net of trade expense) were $ 2.437 billion for the year ended December 31, 2020 , compared to $1. 872 billion for the same period in 2019 , an increase of $ 565.0 million , or 30 .2% . This was primarily due to expenses associated with the Tribune stations and other businesses we acquired in 2019 of $51 1.1 million (including network and programming costs of $343.4 million), and expenses associated with our current year station acquisitions of $47.3 million. In addition, our legacy stations’ programming costs increased by $118.2 million, primarily due to network affiliation renewals and annual increases in our network affiliation costs . In 2020, we also recorded $1 9 . 9 million in provision for uncollectible amounts a ssociated with transactions among entities for which we have or had variable interests . These increases were partially offset by a decrease in expense from our station divestitures of $ 84. 3 million and a $60.3 million decrease in the operating expenses of our digital products due to lower revenue. Depreciation of property and equipment was $147.7 million for the year ended December 31, 2020, compared to $123.4 million for the same period in 2019, an increase of $24.3 million, or 19.7%. The increase was primarily due to incremental depreciation from the Tribune stations we acquired in September 2019 of $29.4 million. Amortization of intangible assets was $279.7 million for the year ended December 31, 2020, compared to $200.3 million for the same period in 2019, an increase of $79.4 million, or 39.6%. This was primarily due to increased amortization from the Tribune stations we acquired in September 2019 of $95.3 million, net of decreases in amortization from certain fully amortized assets and divested stations. Amortization of broadcast rights was $137.5 million for the year ended December 31, 2020, compared to $85.0 million for the same period in 2019, an increase of $52.5 million, or 61.7%. The increase was primarily due to incremental amortization from the Tribune stations we acquired in 2019 of $54.0 million, net of decreases from station divestitures. This increase was partially offset by a reduction in amortization costs on our legacy stations due to renegotiation of certain film contracts which resulted in reduced distribution rates. Certain of the Company’s stations, including certain Tribune stations, were repacked in connection with the FCC’s process of repurposing a portion of the broadcast television spectrum for wireless broadband use. These stations have vacated their former channels by the FCC-prescribed deadline of July 13, 2020 and are continuing to spend costs, mainly capital expenditures, to construct and license the necessary technical modifications to permanently operate on their newly assigned channels. Subject to fund limitations, the FCC reimburses television broadcasters, MVPDs and other parties for costs reasonably incurred due to the repack. In 2020 and 2019, we received a total of $57.3 million and $70.4 million, respectively, in reimbursements from the FCC which we recognized as operating income. In April 2020, we completed a station’s conversion to a VHF channel representing our final relinquishment of spectrum pursuant to the FCC’s incentive auction conducted in 2016-2017. Accordingly, the associated spectrum asset with a carrying amount of $67.2 million and liability to surrender spectrum of $78.0 million were derecognized, resulting in a non-cash gain on relinquishment of spectrum of $10.8 million. This gain was partially offset by a $3.9 million increase (expense) in the estimated fair value of contingent consideration liability related to a merger and spectrum auction. In 2019, we recorded a $63.3 million goodwill and intangible assets impairment on our digital reporting unit due to deterioration in customer relationships, mainly driven by marketplace changes on select demand-side platform customers, that led to a long-term projected decrease in operating results. In 2020, we sold two Fox affiliate television stations and our sports betting information website business for total proceeds of $362.8 million in cash. These disposals resulted in a total gain on sale of $7.1 million. In 2019, in connection with the Tribune merger, we sold the assets of 21 full power television stations in 16 markets, eight of which were previously owned by us and 13 of which were previously owned or operated by Tribune. We sold the Tribune stations for $1.008 billion in cash, including working capital adjustments, and we sold our stations for $358.6 million in cash, including working capital adjustments. These divestitures resulted in a net gain on disposal of $96.1 million. Income on equity investments, net Income on equity investments, net was $70.2 million for the year ended December 31, 2020, compared to $17.9 million for the same period in 2019, an increase of $52.1 million. This was primarily attributable to the increase in income on equity investment from our 31.3% investment in TV Food Network, less amortization of basis difference. For the year ended December 31, 2020, we recognized our full year’s share in equity income of TV Food Network compared to last year’s share from September 19, 2019, the date we acquired our 31.3% ownership stake in this investment, to December 31, 2019. 55 Interest Expense, net Interest expense, net was $335.3 million for the year ended December 31, 2020, compared to $304.4 million for the same period in 2019, an increase of $30.9 million, or 10.2%, primarily due to the issuance of debt in September 2019 (term loans and $1.785 billion Notes due 2027) associated with the financing of our merger with Tribune. These increases were partially offset by decreases in interest expense primarily due to prepayments and scheduled repayments of term loans, reduction in LIBOR funding costs on our senior secured loans and refinancing of certain bonds in September 2020 for a lower interest rate (issuance of $1.0 billion 4.75% Notes due 2028 and redemption of $900 million 5.625% Notes due 2024). Loss on Extinguishment of Debt Loss on extinguishment of debt was $50.7 million for the year ended December 31, 2020, compared to $10.3 million for the same period in 2019, an increase of $40.4 million. In 2020, we made various prepayments of our outstanding term loans, redeemed our $900 million 5.625% Notes due 2024 and amended our and Mission’s credit agreements, resulting in a loss on extinguishment of debt of $50.7 million. In November 2019, we redeemed our $400.0 million 5.875% Notes due 2022 and our $275.0 million 6.125% Notes due 2022. We also made prepayments of our outstanding term loans during 2019. These 2019 transactions resulted in total loss on extinguishment of debt of $10.3 million. Income Taxes Income tax expense was $296.5 million for the year ended December 31, 2020, compared to an income tax expense of $137.0 million for the same period in 2019, an increase in income tax expense of $159.5 million. The effective tax rates during the years ended December 31, 2020 and 2019 were 26.9% and 36.8%, respectively. The decrease to the effective tax rate was driven primarily by a consolidated VIE’s establishment of a valuation allowance on its deferred tax assets in 2019 and the decrease in non-deductible goodwill associated with divestitures and impairment loss incurred in 2019. In 2020, certain of our consolidated VIEs recorded a valuation allowance on deferred tax assets of $5.3 million, compared to the $19.9 million valuation allowance on deferred tax assets recorded in 2019, including a newly established valuation allowance of $18.1 million by a consolidated VIE. This resulted in a decrease to the effective tax rate of 4.9%. In 2020, the effective tax rate also decreased by 5.15% as a result of the decrease in the amount of non-deductible goodwill associated with divestitures and impairment loss incurred in 2019. Year Ended December 31, 2019 Compared to Year Ended December 31, 2018 The period-to-period comparability of our consolidated operating results is affected by acquisitions. For each quarter we present, our legacy stations include those stations that we owned or provided services to for the complete quarter in the current and prior years. For our annual and year to date presentations, we combine the legacy stations’ amounts presented in each quarter. Revenue Core advertising revenue was $1.335 billion for the year ended December 31, 2019 as compared to $1.090 billion for the same period in 2018, an increase of $245.2 million, or 22.5%. The increase is primarily due to our incremental revenue from acquisitions, primarily resulting from our merger with Tribune of $275.0 million, partially offset by a decrease in revenue as a result of station divestitures of $14.6 million. Our legacy stations’ core advertising revenue decreased by $15.1 million. Our largest advertiser category, automobile, represented approximately 22% and 23% of our local and national advertising revenue for each of the years ended December 31, 2019 and 2018, respectively. Overall, including past results of our newly acquired stations, revenues from our automobile category decreased by approximately 3% in 2019 compared to 2018. The other categories representing our top five were attorneys and home repair/manufacturing, which increased in 2019, and furniture and medical/healthcare, which decreased in 2019. Political advertising revenue was $51.9 million for the year ended December 31, 2019, compared to $251.2 million for the same period in 2018, a decrease of $199.3 million, or 79.3%. Our legacy stations’ revenue decreased by $206.8 million as 2019 was not an election year. This was partially offset by incremental revenue from acquisitions of $12.5 million, less decreases from station divestitures of $5.0 million. 56 Distribution revenue was $1.369 billion for the year ended December 31, 2019, compared to $1.121 billion for the same period in 2018, an increase of $247.8 million, or 22.1%, primarily due to incremental revenue from our acquisitions, mainly Tribune, of $169.8 million, less decreases in revenue resulting from station divestitures of $18.5 million. Our legacy stations’ revenue also increased by $96.5 million taking into account the combined effect of recent retransmission consent agreement renewals and scheduled annual rate increases per subscriber, contributions from distribution agreements with OVDs and the temporary disruption of distribution agreements with a customer from July 2, 2019 to August 29, 2019. Broadcasters currently deliver more than 30% of all television viewing audiences in a pay television household but are paid approximately 12-14% of the total cable programming fees. We anticipate continued increase in distribution revenue until there is a more balanced relationship between viewers delivered and fees paid for delivery of such viewers. Digital revenue, representing advertising revenue on our stations’ web and mobile sites and revenue from our other digital operations, was $241.5 million for the year ended December 31, 2019, compared to $261.2 million for the same period in 2018, a decrease of $19.7 million or 7.5%. This was primarily due to a $49.7 million net decrease in revenue from our social media platform and the effects of marketplace changes which decreased select demand-side platform customer buying, partially offset by growth on our agency services. These decreases were partially offset by incremental revenue from acquisitions, primarily Tribune, of $19.5 million and an increase in revenue from our legacy stations of $12.2 million. Operating Expenses (Income) Corporate expenses, related to costs associated with the centralized management of our stations, were $189.5 million for the year ended December 31, 2019, compared to $110.9 million for the same period in 2018, an increase of $78.6 million, or 70.9%. This was primarily attributable to an increase in legal and professional fees, severance, bonuses and other compensation costs of $69.5 million primarily associated with our acquisition of Tribune, and an increase in stock-based compensation related to new equity incentive awards of $6.1 million . Station direct operating expenses, consisting primarily of news, engineering, programming and selling, general and administrative expenses (net of trade expense) were $1.872 billion for the year ended December 31, 2019, compared to $1.570 billion for the same period in 2018, an increase of $302.0 million, or 19.2%. The increase was primarily due to expenses of our newly acquired stations and entities, mainly Tribune, of $247.3 million (including network and programming costs of $157.0 million), partially offset by a decrease of $18.0 million related to our station divestitures. Additionally, our legacy stations’ programming costs increased by $96.6 million primarily due to network affiliation renewals and annual increases in our network affiliation costs. These increases were partially offset by an $18.6 million decrease in the operating expenses of our digital products due primarily to marketplace changes and challenges that led to lower revenue. Depreciation of property and equipment was $123.4 million for the year ended December 31, 2019, compared to $109.8 million for the same period in 2018, an increase of $13.6 million, or 12.4%. This was primarily due to incremental depreciation related to assets acquired in the Tribune merger of $9.0 million and increased depreciation from related station repacking activities. Amortization of intangible assets was $200.3 million for the year ended December 31, 2019, compared to $149.4 million for the same period in 2018, an increase of $50.9 million, or 34.1%. This was primarily due to increased amortization related to intangible assets acquired in the Tribune merger of $59.9 million, partially offset by decreases in amortization from certain fully amortized assets. Amortization of broadcast rights was $85.0 million for the year ended December 31, 2019, compared to $61.3 million for the same period in 2018, an increase of $23.7 million, or 38.6%. This was primarily attributable to incremental amortization resulting from new broadcast rights acquired through the Tribune merger of $30.5 million. This increase was partially offset by a reduction in amortization costs on our legacy stations due to renegotiation of certain film contracts which resulted in reduced distribution rates. Certain of the Company’s stations, including certain Tribune stations, were repacked in connection with the FCC’s process of repurposing a portion of the broadcast television spectrum for wireless broadband use. The Company’s stations are currently spending costs, mainly capital expenditures, to construct and license the necessary technical modifications to operate on their newly assigned channels and to vacate their former channels no later than July 13, 2020. Subject to fund limitations, the FCC reimburses television broadcasters, MVPDs and other parties for costs reasonably incurred due to the repack. In 2019 and 2018, we received a total of $70.4 million and $29.4 million, respectively, in reimbursements from the FCC which we recognized as operating income. In the third quarter of 2019, we recorded a $63.3 million goodwill and intangible assets impairment on our digital reporting unit due to deterioration in customer relationships, mainly driven by marketplace changes on select demand-side platform customers, that led to a long-term projected decrease in operating results. In connection with the Tribune merger, we sold the assets of 21 full power television stations in 16 markets, eight of which were previously owned by us and 13 of which were previously owned or operated by Tribune. We sold the Tribune stations for $1.008 billion in cash, including working capital adjustments, and we sold our stations for $358.6 million in cash, including working capital adjustments. These divestitures resulted in a net gain on disposal of $96.1 million. 57 Income on equity investments, net In connection with our merger with Tribune completed on September 19, 2019, we acquired a 31.3% ownership stake in TV Food Network. From the date of acquisition to December 31, 2019, Nexstar recognized equity in income from this investment of $20.5 million, along with loss from other equity method investments of $2.6 million. Interest Expense, net Interest expense, net was $304.3 million for the year ended December 31, 2019, compared to $221.0 million for the same period in 2018, an increase of $83.4 million, or 37.7%, primarily due to interest on new borrowings of $87.0 million and one time fees associated with the financing of our merger with Tribune of $26.6 million. These increases were partially offset by decreases in debt related interest expense of $23.7 million, primarily due to prepayments and scheduled repayments of term loans and redemption of bonds, and interest income we earned from an escrow deposit during the third quarter of 2019 of $4.9 million and a reduction in interest from our existing term loans due to principal prepayments and scheduled repayments. Loss on Extinguishment of Debt Loss on extinguishment of debt was $10.3 million for the year ended December 31, 2019, compared to $12.1 million for the same period in 2018, a decrease of $1.8 million, or 15.0%. In November 2019, we redeemed our $400.0 million 5.875% Notes due 2022 and our $275.0 million 6.125% Notes due 2022. We also made prepayments of our outstanding term loans during 2019. These transactions resulted in total loss on extinguishment of debt of $10.3 million. In October 2018, the Company refinanced its then existing term loans and revolving loans. We also made various prepayments of outstanding term loans during 2018. These transactions resulted in a total loss on extinguishment of debt of $12.1 million. Income Taxes Income tax expense was $137.0 million for the year ended December 31, 2019, compared to an income tax expense of $144.7 million for the same period in 2018, a decrease in income tax expense of $7.7 million. The effective tax rates during the years ended December 31, 2019 and 2018 were 36.8% and 27.1%, respectively. In 2019, we recognized the tax impact of the divested stations previously owned by us including an income tax expense of $10.3 million, or an increase to the effective tax rate of 2.8%, attributable to nondeductible goodwill written off as a result of the sale. We also recognized an impairment loss on our reporting unit’s goodwill and intangible assets. The impairment loss related to goodwill is not deductible for purposes of calculating the tax provision resulting in an income tax expense of $8.9 million, or an increase to the effective tax rate of 2.4%. Valuation allowance increased by $19.9 million, or an increase to the effective tax rate of 5.3%, primarily due to the Company’s belief, based upon consideration of positive and negative evidence, that certain deferred tax assets related to one of the VIEs were not likely to be realized. Other changes to the effective tax rates relate to the various permanent differences such as the tax impact of limitation on compensation deduction, the tax impact related to nondeductible meals and entertainment and the tax impact of excess benefits related stock-based compensation recognized in the income statement pursuant to ASU No. 2016-09 (adopted as of January 1, 2017). These transactions and events resulted in a total income tax expense effect of $6.18 million, or an increase to the effective tax rate of 1.64%. 58 Liquidity and Capital Resources We are leveraged, which makes us vulnerable to changes in general economic conditions. Our ability to meet the future cash requirements described below depends on its ability to generate cash in the future, which is subject to general economic, financial, competitive, legislative, regulatory and other conditions, many of which are beyond our control. Based on current operations and anticipated future growth, we believe that our available cash, anticipated cash flow from operations and available borrowings under the senior secured credit facilities will be sufficient to fund working capital, capital expenditure requirements, interest payments and scheduled debt principal payments for at least the next twelve months as of the filing date of this Annual Report on Form 10-K. In order to meet future cash needs we may, from time to time, borrow under our existing senior secured credit facilities or issue other long- or short-term debt or equity, if the market and the terms of its existing debt arrangements permit. We will continue to evaluate the best use of our operating cash flow among our capital expenditures, acquisitions and debt reduction. Overview The following tables present summarized financial information management believes is helpful in evaluating the Company’s liquidity and capital resources (in thousands): Years Ended December 31, 2020 2019 2018 Net cash provided by operating activities $ 1,254,170 $ 417,467 $ 736,867 Net cash used in investing activities (1) (39,750 ) (4,702,155 ) (175,514 ) Net cash provided by (used in) financing activities (1,293,789 ) 4,388,251 (531,890 ) Net increase (decrease) in cash, cash equivalents and restricted cash $ (79,369 ) $ 103,563 $ 29,463 Cash paid for interest $ 324,347 $ 250,663 $ 218,746 Income taxes paid, net of refunds (2) $ 351,715 $ 315,051 $ 90,717 (1) In 2020, the investing activities included total capital expenditures of $217.0 million, of which $54.7 million was reimbursed from the FCC in connection with the station repack and $4.9 million was funded by the incentive auction proceeds received from the FCC in 2017. In 2019, the investing activities included total capital expenditures of $197.5 million, of which $79.3 million was reimbursed from the FCC in connection with the station repack and $7.2 million was funded by the incentive auction proceeds received from the FCC in 2017. In 2018, the investing activities included total capital expenditures of $106.2 million, of which $26.8 million was reimbursed from the FCC in connection with the station repack and $2.9 million was funded by the incentive auction proceeds received from the FCC in 2017. (2) Income taxes paid, net of refunds, includes (i) $82.7 million in tax payments during 2020 related to various sale of stations and cash consideration received to settle a litigation and (ii) $199.5 million in tax payments during 2019 related to various sale of stations. As of December 31, 2020 2019 Cash, cash equivalents and restricted cash $ 169,309 $ 248,678 Long-term debt, including current portion 7,668,003 8,492,588 Unused revolving loan commitments under senior secured credit facilities (1) 95,662 142,662 (1) Based on the covenant calculations as of December 31, 2020, all of the $92.7 million and $3.0 million unused revolving loan commitments under the respective Nexstar and Mission senior secured credit facilities were available for borrowing. 59 Cash Flows – Operating Activities Net cash provided by operating activities increased by $836.7 million during the year ended December 31, 2020 compared to the same period in 2019. This was primarily attributable to an increase in net revenue (excluding trade) of $1.467 billion, an increase in distributions from our equity investments, primarily in TV Food Network of $208.4 million, and the collection of copyright royalty receivables of $13.9 million. These increases were partially offset by an increase in our corporate, direct operating and selling, general and administrative expenses (excluding non-cash transactions) of $538.4 million, an increase in cash paid for interest of $73.7 million, higher income tax payments of $36.7 million, an increase in payments for broadcast rights of $93.0 million, use of cash from timing of accounts receivable collections of $18.2 million, and use of cash from timing of payments made to our vendors of $99.8 million. Cash paid for interest increased by $73.7 million during the year ended December 31, 2020 compared to the same period in 2019, primarily due to the issuance of debt in September 2019 (term loans and $1.785 billion Notes due 2027) associated with the financing of our merger with Tribune. These increases were partially offset by decreases in interest expense primarily due to prepayments and scheduled repayments of term loans, reduction in LIBOR funding costs on our senior secured loans and refinancing of certain bonds in September 2020 for a lower interest rate (issuance of $1.0 billion 4.75% Notes due 2028 and redemption of $900 million 5.625% Notes due 2024). Net cash provided by operating activities decreased by $319.4 million during the year ended December 31, 2019 compared to the same period in 2018. This was primarily attributable to an increase in station and corporate operating expenses (excluding non-cash transactions) of $371.0 million, partially offset by an increase in net revenue (excluding trade) of $272.1 million, an increase in payments for tax liabilities of $224.3 million, primarily due to a nonrecurring tax payment of $199.5 million resulting from the sale of stations, an increase in payments for broadcast rights of $38.7 million, an increase in cash paid for interest of $31.9 million and a decrease in source of cash from timing of accounts receivable collections of $28.7 million. These were partially offset by a decrease in use of cash resulting from timing of payments to vendors of $127.6 million and an increase in distributions from our equity investments of $15.3 million. Cash paid for interest increased by $31.9 million during the year ended December 31, 2019 compared to the same period in 2018, primarily due to one-time fees incurred in 2019 amounting to $26.6 million associated with the financing of the Tribune merger. Cash Flows – Investing Activities Net cash used in investing activities during the years ended December 31, 2020, 2019 and 2018 were $39.8 million, $4.702 billion and $175.5 million, respectively. In 2020, we acquired seven television stations, certain non-license assets, and a product recommendations company for total cash consideration payments of $386.4 million. Our capital expenditures for the year ended December 31, 2020 were $217.0 million, including $54.7 million related to station repack. We also made an equity investment in a live 24/7 streaming network business of $7.0 million. These uses of cash were partially offset by the proceeds from the disposal of two television stations and our sports betting information website business for $349.9 million and $12.9 million in cash, respectively, and reimbursements received from the FCC related to station repack of $57.3 million. We also received $98.0 million of cash proceeds from settlement of a litigation between Sinclair and Tribune and Mission collected its loan receivable of $49.0 million from Marshall. In September 2019, we completed our acquisition of Tribune for a total cash purchase price of $7.187 billion, less $1.306 billion of cash and restricted cash acquired. This was partially offset by the proceeds from the sale of 21 full power television stations in 16 markets for a total cash consideration of $1.353 billion which occurred concurrently with the Tribune acquisition. On November 29, 2019, Mission, a consolidated VIE, paid the outstanding principal balances of Marshall’s loans to third party bank lenders totaling $48.9 million. After making the payment, Mission became Marshall’s new lender. Marshall is a deconsolidated VIE due to its filing for bankruptcy protection in December 2019. As such, Marshall’s cash balance of $5.0 million was excluded from our consolidated financial statements. During the year ended December 31, 2019, we spent $197.5 million in capital expenditures, including $79.3 million related to station repack and $7.2 million related to relinquishment of certain spectrum. These investing cash outflows were partially offset by the proceeds from reimbursements of spectrum repack amounting to $70.4 million, proceeds from asset disposals of $4.4 million and distribution from our equity investments of $2.2 million. In 2018, we completed our acquisition of Likqid Media Inc. (“LKQD”) for a cash purchase price of $97.0 million, less $11.2 million of cash acquired, and the acquisitions of two new stations for $18.0 million. We also spent $106.2 million in capital expenditures. These transactions were partially offset by reimbursements from the FCC related to station repack of $29.4 million and proceeds from disposal of assets of $4.3 million. 60 During the year ended December 31, 2018, capital expenditures increased by $33.8 million compared to the same period in 2017, primarily due to increased spending of $26.8 million related to station repack and $2.9 million related to the relinquishment of certain spectrum. The capital expenditures related to station repack were reimbursed from the FCC and the capital expenditures related to relinquishment of certain spectrum were funded by the incentive auction proceeds received from the FCC in 2017. Cash Flows – Financing Activities Net cash used in financing activities for the year ended December 31, 2020 was $1.294 billion, compared to net cash provided by financing activities of $4.388 billion in the same period in 2019. During the year ended December 31, 2018, net cash used in financing activities was $531.9 million. In 2020, we made payments on the outstanding principal balance of our term loans of $1,284 million (including $980.0 million in Nexstar’s debt prepayments, Mission’s full repayment of its term loan B of $226.2 million and Mission’s full repayment of Shield’s term loan A of $20.7 million). Also, we redeemed our $900.0 million 5.625% Notes due 2024 and paid $25.1 million premium on such redemption. Additionally, we repurchased shares of our Class A common stock for a total price of $281.9 million, paid dividends to our common stockholders of $101.0 million ($0.56 per share during each quarter), paid deferred financing costs of $10.7 million associated with our new $1.0 billion 4.75% Notes due 2028, paid cash for taxes in exchange for shares of common stock withheld of $6.8 million resulting from net share settlements of certain stock-based compensation and paid for finance lease and software obligations of $14.5 million. These decreases were offset by the proceeds from the issuance of our new $1.0 billion senior unsecured notes issued at par and from Mission’s drawing from its revolving credit facility of $327.0 million. In 2019, we issued term loans, net of debt discount, of $3.711 billion, issued an initial $1.120 billion in 5.625% Notes due 2027 at par, and issued an additional $665.0 million in 5.625% Notes due 2027, plus a premium of $27.4 million. We incurred and paid total financing costs of $72.1 million for issuing these loans in 2019. The proceeds from the term loans and the initial 5.625% Notes due 2027 were used to partially fund our merger with Tribune in September 2019. The proceeds from the additional 5.625% Notes due 2027 were used to redeem in full our two senior unsecured notes with a total principal balance of $675.0 million, plus total premium of $10.1 million. We also made prepayments and scheduled principal payments of its existing term loans totaling $227.3 million, funded by cash on hand. In 2019, we paid dividends to our common stockholders of $82.8 million ($0.45 per share each quarter), repurchased our treasury shares for $45.1 million, made payments on our finance lease and capitalized software obligations of $9.2 million, paid taxes in exchange for shares of common stock withheld of $9.8 million and purchased a noncontrolling interest of $6.4 million. These outflows were partially offset by the proceeds from the exercise of stock options during the year amounting to $2.4 million. In 2018, we borrowed $44.0 million under our revolving credit facility to partially fund our acquisition of LKQD and received $6.0 million in proceeds from stock option exercises. Marshall also issued a $51.8 million term loan to refinance the outstanding principal balances under our previous term loan and revolving credit facility of $48.8 million and $3.0 million, respectively. Additionally, Marshall borrowed a $5.6 million revolving loan to partially repay its Term Loan A of $5.6 million. In October 2018, we amended our credit agreements which decreased the interest rates and extended the maturity date on certain of its debt. In connection with this refinancing, Nexstar borrowed an additional $150.0 million under its Term Loan A, the proceeds of which were used to partially repay the outstanding principal balance under Nexstar’s Term Loan B of $150.0 million. These transactions were partially offset by repayments of outstanding obligations under our revolving credit facility of $44.0 million, repayments of outstanding principal balance under the Company’s term loans of $401.6 million, purchases of treasury stock of $50.5 million, payments of dividends to our common stockholders of $68.6 million ($0.375 per share each quarter), payments for capital lease and capitalized software obligations of $8.8 million, cash payment for taxes in exchange for shares of common stock withheld of $4.9 million, payments to acquire the remaining assets of a station previously owned by KRBK, LLC of $2.5 million and payments for debt financing costs associated with the Company’s debt refinancing of $1.1 million. Future Sources of Financing and Debt Service Requirements As of December 31, 2020, the Company had total debt of $7.668 billion, net of unamortized financing costs, discounts and premium, which represented 75.3% of the Company’s combined capitalization. The Company’s high level of debt requires that a substantial portion of cash flow be dedicated to pay principal and interest on debt, which reduces the funds available for working capital, capital expenditures, acquisitions and other general corporate purposes. 61 The following table summarizes the approximate aggregate amount of principal indebtedness scheduled to mature for the periods referenced as of December 31, 2020 (in thousands): Total 2021 2022-2023 2024-2025 Thereafter Nexstar senior secured credit facility $ 4,630,557 $ 21,429 $ 597,070 $ 1,367,742 $ 2,644,316 Mission senior secured credit facility 327,000 - 327,000 - - 5.625% Notes due 2027 1,785,000 - - - 1,785,000 4.75% Notes due 2028 1,000,000 - - - 1,000,000 $ 7,742,557 $ 21,429 $ 924,070 $ 1,367,742 $ 5,429,316 We make semiannual payments on the 5.625% Notes due 2027 on January 15 and July 15 of each year. We make semiannual interest payments on our 4.75% Notes due 2028 on May 1 and November 1 of each year. Interest payments on our and Mission’s senior secured credit facilities are generally paid every one to three months and are payable based on the type of interest rate selected. The terms of our and Mission’s senior secured credit facilities, as well as the indentures governing our 5.625% Notes due 2027 and 4.75% Notes due 2028, limit, but do not prohibit us or Mission, from incurring substantial amounts of additional debt in the future. The Company does not have any rating downgrade triggers that would accelerate the maturity dates of its debt. However, a downgrade in the Company’s credit rating could adversely affect its ability to renew the existing credit facilities, obtain access to new credit facilities or otherwise issue debt in the future and could increase the cost of such debt. The Company had $95.7 million of total unused revolving loan commitments under the senior secured credit facilities, all of which were available for borrowing, based on the covenant calculations as of December 31, 2020. The Company’s ability to access funds under its senior secured credit facilities depends, in part, on our compliance with certain financial covenants. Any additional drawings under the senior secured credit facilities will reduce the Company’s future borrowing capacity and the amount of total unused revolving loan commitments. As discussed above, the ultimate outcome of the COVID-19 pandemic is uncertain at this time and may significantly impact our future operating performance, liquidity and financial position. Any adverse impact of the COVID-19 pandemic may cause us to seek alternative sources of funding, including accessing capital markets, subject to market conditions. Such alternative sources of funding may not be available on commercially reasonable terms or at all. During 2020, we repurchased a total of 3,085,745 shares of our Class A common stock for $281.8 million, funded by cash on hand. On January 27, 2021, our Board of Directors approved a new share repurchase program authorizing us to repurchase up to $1.0 billion of our Class A common stock. The new $1.0 billion share repurchase program increased our existing share repurchase authorization, of which $174.9 million remained outstanding as of December 31, 2020. On January 27, 2021, our Board of Directors declared a quarterly dividend of $0.70 per share of our Class A common stock. The dividend was paid on February 26, 2021 to stockholders of record on February 12, 2021. Debt Covenants Our credit agreement contains a covenant which requires us 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 our combined results. The Mission amended credit agreement does not contain financial covenant ratio requirements but does provide for default in the event we do not comply with all covenants contained in our credit agreement. As of December 31, 2020 , we were in compliance with our financial covenant. We believe Nexstar and Mission will be able to maintain compliance with all covenants contained in the credit agreements governing the senior secured facilities and the indentures governing our 5.625% Notes due 2027 and our 4.75% Notes due 2028 for a period of at least the next 12 months from December 31, 2020 . Off-Balance Sheet Arrangements As of December 31, 2020, we did not have any relationships with unconsolidated entities or financial partnerships (except as described below), such as entities often referred to as structured finance or variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. All of our arrangements with our VIEs in which we are the primary beneficiary are on-balance sheet arrangements. Our variable interests in other entities are obtained through local service agreements, which have valid business purposes and transfer certain station activities from the station owners to us. We are, therefore, not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships. As of December 31, 2020, we have outstanding standby letters of credit with various financial institutions amounting to $23.7 million, of which $20.3 million was assumed from the merger with Tribune primarily in support of the worker’s compensation insurance program. The outstanding balance of standby letters of credit is deducted against our unused revolving loan commitment under senior secured credit facilities and would not be available for withdrawal. 62 Contractual Obligations The following summarizes the Company’s contractual obligations as of December 31, 2020, and the effect such obligations are expected to have on the Company’s liquidity and cash flow in future periods (in thousands): Total 2021 2022-2023 2024-2025 Thereafter Recorded contractual obligations: Nexstar senior secured credit facility $ 4,630,557 $ 21,429 $ 597,070 $ 1,367,742 $ 2,644,316 Mission senior secured credit facility 327,000 - 327,000 - - 5.625% senior unsecured notes due 2027 1,785,000 - - - 1,785,000 4.75% senior unsecured notes due 2028 1,000,000 - - - 1,000,000 Operating lease obligations 350,464 47,181 93,067 70,878 139,338 Finance lease obligations 20,667 1,843 3,621 3,712 11,491 Broadcast rights current cash commitments (1) 201,977 105,522 83,528 12,927 - Other (2)(3) 46,996 14,789 31,674 533 - Unrecorded contractual obligations: Network affiliation agreements 2,636,307 1,143,735 1,481,348 11,224 - Cash interest on debt (4) 1,628,681 276,711 547,688 459,218 345,064 Executive employee contracts (5) 83,625 36,412 45,972 1,241 - Broadcast rights future cash commitments (6) 194,376 74,904 84,085 35,387 - Other 79,554 30,054 49,500 - - $ 12,985,204 $ 1,752,580 $ 3,344,553 $ 1,962,862 $ 5,925,209 (1) Future minimum payments for license agreements for which the license period has begun and liabilities have been recorded. (2) As of December 31, 2020, we had $47.4 million of unrecognized tax benefits, inclusive of interest and certain deduction benefits. This liability represents an estimate of tax positions that the Company has taken in its tax returns, which may ultimately not be sustained upon examination by the tax authorities. The resolution of these tax positions may not require cash settlement due to the existence of federal and state NOLs. As such, our contractual obligations table above excludes this liability. ( 3 ) As of December 31, 2020, we had $331.7 million and $29.6 million of funding obligations with respect to our pension benefit plans and other postretirement benefit plans, respectively, which are not included in the table above. See Note 11 to our Consolidated Financial Statements for further information regarding our funding obligations for these benefit plans. ( 4 ) Estimated interest payments due as if all debt outstanding as of December 31, 2020 remained outstanding until maturity, based on interest rates in effect at December 31, 2020. ( 5 ) Includes the employment contracts for all corporate executive employees and general managers of our stations and entities. We expect our contracts will be renewed or replaced with similar agreements upon their expiration. Amounts included in the table above assumed that contracts are not terminated prior to their expiration. ( 6 ) Future minimum payments for license agreements for which the license period has not commenced and no liability has been recorded. 63 Summarized Financial Information Nexstar Inc.’s (a wholly-owned subsidiary of Nexstar and herein referred to as the “Issuer”) 5.625% Notes due 2027 and 4.75% Notes due 2028 are fully and unconditionally guaranteed (the “Guarantees”), jointly and severally, by Nexstar Media Group, Inc. (“Parent”), Mission (a consolidated VIE) and certain of Nexstar Inc.’s restricted subsidiaries (collectively, the “Guarantors” and, together with the Issuer, the “Obligor Group”). The Guarantees are subject to release in limited circumstances upon the occurrence of certain customary conditions set forth in the indentures governing the 5.625% Notes due 2027 and the 4.75% Notes due 2028. The Issuer’s 5.625% Notes due 2027 and 4.75% Notes due 2028 are not registered with the SEC. The following combined summarized financial information is presented for the Obligor Group after elimination of intercompany transactions between Parent, Issuer and Guarantors in the Obligor Group and amounts related to investments in any subsidiary that is a non-guarantor. This information is not intended to present the financial position or results of operations of the consolidated group of companies in accordance with U.S. GAAP. In November 2020, we merged our two primary operating subsidiaries, Nexstar Inc. and Nexstar Digital, LLC, with Nexstar Inc. surviving the merger as our single operating subsidiary. Prior to the merger, Nexstar Digital, LLC was not a guarantor of the notes. In November 2020, Mission acquired television stations previously owned by Shield and Tamer. Prior to Mission’s acquisition, the stations were not guarantors of the notes but Nexstar was the primary beneficiary and has consolidated these business units since January 2017. Upon Mission’s acquisition of the stations in November 2020, Nexstar remained to be the primary beneficiary and continued to consolidate the stations into its financial statements. The following combined summarized financial information is presented as if the accounts of Nexstar Digital LLC and the stations that Mission acquired from Shield and Tamer were part of the Obligor Group as of the earliest period presented. Summarized Balance Sheet Information (in thousands) – Summarized balance sheet information as of December 31 of the Obligor Group is as follows: 2020 2019 Current assets - external $ 1,205,580 $ 1,347,456 Current assets - due from consolidated entities outside of Obligor Group 35,572 45,952 Total current assets $ 1,241,152 $ 1,393,408 Noncurrent assets - external (1) 10,676,397 10,971,539 Noncurrent assets - due from consolidated entities outside of Obligor Group 53,292 40,761 Total noncurrent assets $ 10,729,689 $ 11,012,300 Total current liabilities $ 727,557 $ 942,832 Total noncurrent liabilities $ 10,123,544 $ 10,973,364 Noncontrolling interests $ 6,951 $ 7,186 (1) Excludes Nexstar Inc.’s equity investments of $1.334 billion and $1.477 billion as of December 31, 2020 and 2019, respectively, in unconsolidated investees. These unconsolidated investees do not guarantee the 4.75% Notes due 2028 and 5.625% Notes due 2027. For additional information on equity investments, refer to Note 7 to our Consolidated Financial Statements. Summarized Statements of Operations Information for the Obligor Group (in thousands) : Year Ended December 31, 2020 Net revenue - external $ 4,486,469 Net revenue - from consolidated entities outside of Obligor Group 17,198 Total net revenue 4,503,667 Costs and expenses - external 3,104,595 Costs and expenses - to consolidated entities outside of Obligor Group 19,493 Total costs and expenses 3,124,088 Income from operations $ 1,379,579 Net income $ 741,244 Net income attributable to Obligor Group $ 741,244 Income on equity method investments $ 70,154 64 Critical Accounting Policies and Estimates Our Consolidated Financial Statements have been prepared in accordance with U.S. GAAP, which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the Consolidated Financial Statements and reported amounts of revenue and expenses during the period. On an ongoing basis, we evaluate our estimates, including those related to business acquisitions, goodwill and intangible assets, property and equipment, broadcast rights, distribution revenue, pension and postretirement benefits and income taxes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from those estimates. For an overview of our significant accounting policies, we refer you to Note 2 to our Consolidated Financial Statements in Part IV, Item 15(a) of this Annual Report on Form 10-K. We believe the following critical accounting policies are those that are the most important to the presentation of our Consolidated Financial Statements, affect our more significant estimates and assumptions, and require the most subjective or complex judgments by management. Consolidation of Variable Interest Entities We regularly evaluate our local service agreements and other arrangements where we may have variable interests to determine whether we are the primary beneficiary of a VIE. Under U.S. GAAP, a company must consolidate an entity when it has a “controlling financial interest” resulting from ownership of a majority of the entity’s voting rights. Accounting rules expanded the definition of controlling financial interest to include factors other than equity ownership and voting rights. In applying accounting and disclosure requirements, we must base our decision to consolidate an entity on quantitative and qualitative factors that indicate whether or not we have the power to direct the activities of the entity that most significantly affect its economic performance and whether or not we have the obligation to absorb losses of the entity or the right to receive benefits from the entity that could potentially be significant to the VIE. Our evaluation of the “power” and “economics” model must be an ongoing process and may alter as facts and circumstances change. Mission and the other consolidated VIEs are included in our Consolidated Financial Statements because we are deemed to have controlling financial interests in these entities as VIEs for financial reporting purposes as a result of (1) local service agreements we have with the stations they own, (2) our guarantee of the obligations incurred under Mission’s senior secured credit facility, (3) our power over significant activities affecting these entities’ economic performance, including budgeting for advertising revenue, advertising sales and, in some cases, hiring and firing of sales force personnel and (4) purchase options granted by each consolidated VIE which permit Nexstar to acquire the assets and assume the liabilities of all but three of these VIEs’ stations at any time, subject to FCC consent. These purchase options are freely exercisable or assignable by Nexstar without consent or approval by the VIEs. These option agreements expire on various dates between 2021 and 2028. We expect to renew these option agreements upon expiration. Therefore, these VIEs are consolidated into these financial statements. Valuation of Goodwill and Intangible Assets Intangible assets represented $8.8 billion, or 65.9%, of our total assets as of December 31, 2020. Intangible assets consist primarily of goodwill, FCC licenses, network affiliation agreements, developed technology, brand value, and customer relationships arising from acquisitions. The purchase prices of acquired businesses are allocated to the assets and liabilities acquired at estimated fair values at the date of acquisition using various valuation techniques, including discounted projected cash flows, the cost approach and other. The e stimated fair value of an FCC license acquired in a business combination is calculated using a discounted cash flow model referred to as the Greenfield Method. The Greenfield Method attempts to isolate the income that is attributable to the license alone. This approach is based upon modeling a hypothetical start-up station and building it up to a normalized operation that, by design, lacks an affiliation with a network (commonly known as an independent station), lacks inherent goodwill and whose other assets have essentially been added as part of the build-up process. The Greenfield Method assumes annual cash flows over a projection period model. Inputs to this model include, but are not limited to, (i) a four-year build-up period for a start-up station to reach a normalized state of operations, (ii) market long-term revenue growth rate over a projection period, (iii) estimated market revenue share for a typical market participant without a network affiliation, (iv) estimated profit margins based on industry data, (v) capital expenditures based on the size of market and the type of station being constructed, (vi) estimated tax rates in the appropriate jurisdiction, and (vii) an estimated discount rate using a weighted average cost of capital analysis. The Greenfield Method also includes an estimated terminal value by discounting an estimated annual cash flow with an estimated long-term growth rate. 65 The assumptions used in estimating the fair value of a network affiliation agreement acquired in a business combination are similar to those used in the valuation of an FCC license. The Greenfield Method is also utilized in this valuation e xcept that the estimated market revenue share, estimated profit margins, capital expenditures and other assumptions reflect a market participant premium based on the programming of a network affiliate relative to an independent station. This approach would result in an estimated fair value of the collective FCC license and a network affiliation agreement. Goodwill represents t he excess of the purchase price of a business over the fair value of net assets acquired. For purposes of goodwill impairment tests, the Company has one aggregated television stations reporting unit, because of the stations’ similar economic characteristics, one cable network reporting unit and one digital business reporting unit. The Company’s impairment review for FCC licenses is performed at the television station market level. We test our goodwill and FCC licenses in our fourth quarter each year, or whenever events or changes in circumstances indicate that such assets might be impaired. We first assess the qualitative factors to determine the likelihood of our goodwill and FCC licenses being impaired. Our qualitative impairment test includes, but is not limited to, assessing the changes in macroeconomic conditions, regulatory environment, industry and market conditions, and the financial performance versus budget of the reporting units, as well as any other events or circumstances specific to the reporting unit or the FCC licenses. If it is more likely than not that the fair value of a reporting unit or an FCC license is greater than its respective carrying amount, no further testing will be required. Otherwise, we will apply the quantitative impairment test method. The quantitative impairment test for goodwill is performed by comparing the fair value of a reporting unit with its carrying amount. If the fair value of the reporting unit exceeds its carrying value, goodwill is not impaired and no further testing is required. If the fair value of the reporting unit is less than the carrying value, an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The quantitative impairment test for FCC licenses consists of a market-by-market comparison of the carrying amounts of FCC licenses with their fair value, using the Greenfield Method of discounted cash flow analysis. An impairment is recorded when the carrying value of an FCC license exceeds its fair value. We test our finite-lived intangible assets whenever events or circumstances indicate that their carrying amount may not be recoverable, relying on a number of factors including operating results, business plans, economic projections and anticipated future cash flows. Impairment in the carrying amount of a finite-lived intangible asset is recognized when the expected future operating cash flow derived from the operations to which the asset relates is less than its carrying value. In the fourth quarter of 2020, using the qualitative impairment test, the Company performed its annual impairment test on goodwill attributable to its aggregated television stations and concluded that it was more likely than not that the fair value would sufficiently exceed the carrying amount. As of December 31, 2020, the digital reporting unit’s goodwill is attributable to BestReviews, a consumer product recommendations company we acquired on December 29, 2020. As of December 31, 2020, our cable network reporting unit’s goodwill balance was $400.0 million, representing approximately 13% of the consolidated carrying amount. We acquired this business in September 2019 through our merger with Tribune. In September 2020, our cable network launched NewsNation, a national news program during prime time and currently expanding to provide news programs in other day parts. In the fourth quarter of 2020, management completed a quantitative impairment test of its cable network reporting unit goodwill. The results of this impairment test indicated that the reporting unit fair value exceeded the carrying amount by approximately 70%, and therefore no goodwill impairment was identified. The quantitative impairment test was performed using a combination of an income approach, which employs a discounted cash flow model, and market approaches, which considers earnings multiples of comparable publicly traded businesses and recent market transactions. In estimating the fair value using the income approach, the discounted cash flow model assuming an asset purchase was utilized. This method uses asset tax bases at fair value and results to a higher depreciation and amortization, lower income taxes on cash flows and ultimately increases the estimated fair value of the reporting unit. The significant assumptions in estimating fair value included: (i) annual revenue growth rates, (ii) operating profit margins, (iii) discount rate, (iv) selection of comparable public companies and related implied EBITDA multiples in such company’s estimated enterprise values; (v) selection of comparable recent observable transactions for similar assets and the related implied EBITDA multiple; (vi) selection of recent comparable observable transactions for similar assets and the related implied value per subscriber. In the fourth quarter of 2020, the Company also performed its annual impairment test on FCC licenses for each station market using the qualitative impairment test. Except for nine station markets that indicated unfavorable trends, the Company concluded that it was more likely than not that their fair values have exceeded the respective carrying amounts. For the station markets that indicated unfavorable trends, management extended its procedures and performed a quantitative impairment test. As of December 31, 2020, the FCC licenses of these stations had a total balance of $172.8 million, representing approximately 6% of the consolidated carrying amount. Our quantitative impairment test of these assets indicated that each of their estimated fair values (Greenfield Method) exceeded the respective carrying amounts and no such individual FCC license had carrying values that were material. Thus, no impairment was recorded. 66 We also performed quantitative and qualitative tests to determine whether our finite-lived assets are recoverable. Based on our estimate of undiscounted future pre-tax cash flows expected to result from the use of these assets, we determined that the carrying amounts are recoverable as of December 31, 2020. No other events or circumstances were noted in 2020 that would indicate impairment. Our quantitative goodwill impairment tests are sensitive to changes in key assumptions used in our analysis, such as expected future cash flows and market trends. If the assumptions used in our analysis are not realized, it is possible that an additional impairment charge may need to be recorded in the future. We cannot accurately predict the amount and timing of any impairment of goodwill or other intangible assets. Due to the continued impact of COVID-19 pandemic subsequent to December 31, 2020, the Company will actively monitor and evaluate its indefinite-lived intangible assets, long-lived assets and goodwill to determine if an impairment triggering event will occur in future periods. Any further adverse impact of COVID-19 or the general market conditions on the Company’s operating results could reasonably be expected to negatively impact the fair value of the Company’s indefinite-lived intangible assets and its reporting units as well as the recoverability of its long-lived assets and may result in future impairment charges which could be material . Valuation of Investments We account for investments in which we own at least 20% of an investee’s voting securities or we have significant influence over an investee under the equity method of accounting. We record equity method investments at cost. For investments acquired in a business combination, the cost is the estimated fair value allocated to the investment. We evaluate our equity method investments for other-than temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. In each of the quarters of 2020, we evaluated our equity method investments for other-than-temporary impairment (“OTTI”) due to the events and circumstances surrounding the COVID-19 pandemic. Based on the results of the review, we determined that no impairments existed that required further assessment. We may experience future declines in the fair value of our equity method investments, and we may determine an impairment loss will be required to be recognized in a future reporting period. Such determination will be based on the prevailing facts and circumstances, including those related to the reported results and financial statement disclosures of the investees as well as the general market conditions. We will continue to evaluate our equity method investments in future periods to determine if an OTTI has occurred. Broadcast Rights Carrying Amount We record cash broadcast rights contracts as an asset and a liability when the license period has begun, the cost of each program is known or reasonably determinable, we have accepted the program material, and the program is produced and available for broadcast. Cash broadcast rights are initially recorded at the contract cost and are amortized on a straight-line basis over the period the programming airs. The current portion of cash broadcast rights represents those rights available for broadcast which will be amortized in the succeeding year. Periodically, we evaluate the net realizable value, calculated using the average historical rates for the programs or the time periods the programming will air, of our cash broadcast rights and adjust amortization in that quarter for any deficiency calculated. As of December 31, 2020, the carrying amounts of our current cash broadcast rights were $50.2 million and our non-current cash broadcast rights were $57.2 million. Pension plans and other postretirement benefits A determination of the liabilities and cost of the Company’s pension and other postretirement plans (“OPEB”) requires the use of assumptions. The actuarial assumptions used in the Company’s pension and postretirement reporting are reviewed annually with independent actuaries and are compared with external benchmarks, historical trends and the Company’s own experience to determine that its assumptions are reasonable. The assumptions used in developing the required estimates include the following key factors: • discount rates • expected return on plan assets • mortality rates • retirement rates • expected contributions 67 As of December 31, 2020, the effective discount rates used for determining pension benefit obligations range from 2.15% to 2.29%. During 2020, the assumptions utilized in determining net periodic benefit credit on our pension plans were (i) 5.45% to 5.75% expected rate of return on plan assets and (ii) 3.08% effective discount rates. As of and for the year ended December 31, 2020, our pension plans’ benefit obligations and related net period benefit credit was $2.553 billion and $45.9 million, respectively. As of December 31, 2020, a 1% change in the discount rates would have the following effects (in thousands): 1% Increase 1% Decrease Projected impact on net periodic benefit credit $ 13,162 $ (16,094 ) Projected impact on pension benefit obligations (240,557) 277,856 For additional information on our pension and OPEB, see Note 11 to our Consolidated Financial Statements included in Part IV, Item 15(a) of this Annual Report on Form 10-K. Distribution Revenue We earn revenues from local cable providers, DBS services and other MVPDs and OVDs for the retransmission of our broadcasts and the carriage of WGN America. These revenues are generally earned based on a price per subscriber of the distributor within the retransmission or the carriage area. The distributors report their subscriber numbers to us generally on a 30- to 60-day lag, generally upon payment of the fees due to us. Prior to receiving the reports, we record revenue based on management’s estimate of the number of subscribers, utilizing historical levels and trends of subscribers for each distributor. Adjustments associated with the resolution of such estimates have, historically, been inconsequential . Income Taxes We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and tax basis of assets and liabilities. A valuation allowance is applied against net deferred tax assets if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. While we have considered future taxable income in assessing the need for a valuation allowance, in the event that we were to determine that we would not be able to realize all or part of our deferred tax assets in the future, an adjustment to the valuation allowance would be charged to income in the period such a determination was made. Section 382 of the Code generally imposes an annual limitation on the amount of NOLs that may be used to offset taxable income when a corporation has undergone significant changes in stock ownership. Ownership changes are evaluated as they occur and could limit the ability to use NOLs. The ability to use NOLs is also dependent upon the Company’s ability to generate taxable income. The NOLs could expire prior to their use. To the extent the Company’s use of NOLs is significantly limited, the Company’s income could be subject to corporate income tax earlier than it would if it were not able to use NOLs, which could have a negative effect on the Company’s financial results and operations. We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities. The determination is based on the technical merits of the position and presumes that each uncertain tax position will be examined by the relevant taxing authority that has full knowledge of all relevant information. We recognize interest and penalties relating to income taxes as components of income tax expense. Recent Accounting Pronouncements Refer to Note 2 of our Consolidated Financial Statements in Part IV, Item 15(a) of this Annual Report on Form 10-K for a discussion of recently issued accounting pronouncements, including our expected date of adoption and effects on results of operations and financial position. 68 Item 7A. Quantitative and Qualitative Disclosures About Market Risk Interest Rate Risk Our exposure to market risk for changes in interest rates relates primarily to our long-term debt obligations. The term loan borrowings under the Company’s senior credit facilities bear interest at rates ranging from 1.89% to 2.89% as of December 31, 2020, which represented the base rate, or LIBOR, plus the applicable margin, as defined. The revolving loans bear interest at LIBOR plus the applicable margin, ranging from 1.89% to 2.39% at December 31, 2020. Interest is payable in accordance with the credit agreements. If LIBOR were to increase by 100 basis points, or one percentage point, from the December 31, 2020 level, the Company’s annual interest expense would increase and cash flow from operations would decrease by $46.3 million, based on the outstanding balance of its credit facilities as of December 31, 2020. An increase in LIBOR of 50 basis points (one-half of a percentage point) would result in a $23.2 million increase in the Company’s annual interest expense and decrease in cash flows from operations. If LIBOR were to decrease either by 100 basis points or 50 basis points, the Company’s annual interest would decrease and cash flows from operations would increase by $6.7 million. Our 5.625% Notes due 2027 and 4.75% Notes due 2028 are fixed rate debt obligations and therefore are not exposed to market interest rate changes. As of December 31, 2020, we have no financial instruments in place to hedge against changes in the benchmark interest rates on our senior credit facilities. Impact of Inflation We believe that our results of operations are not affected by moderate changes in the inflation rate. However, the COVID-19 pandemic has created great uncertainty about the path of the economy and society in the years ahead. Recent supply and demand shocks and dramatic changes in fiscal policy may lead to higher levels of inflation in future periods. Item 8. Financial Statements and Supplementary Data Our Consolidated Financial Statements are filed with this report. The Consolidated Financial Statements and Supplementary Data are included in Part IV, Item 15(a) of this Annual Report on Form 10-K. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures Nexstar’s management, with the participation of its Chairman and Chief Executive Officer along with its President, Chief Operating Officer and Chief Financial Officer, conducted an evaluation as of the end of the period covered by this Annual Report of the effectiveness of the design and operation of Nexstar’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based upon that evaluation, Nexstar’s Chairman and Chief Executive Officer and its President, Chief Operating Officer and Chief Financial Officer concluded that as of December 31, 2020, Nexstar’s disclosure controls and procedures were effective in providing reasonable assurance that information required to be disclosed in the reports that it files or submits under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to Nexstar’s management, including its Chairman and Chief Executive Officer and its President, Chief Operating Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Changes in Internal Control over Financial Reporting During the quarterly period as of the end of the period covered by this report, there have been no changes in Nexstar’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting. Nexstar has not experienced any significant impact to its internal controls over financial reporting related to the COVID-19 pandemic. Nexstar is continually monitoring and assessing the COVID-19 situation on its internal controls to minimize the impact on their design and operating effectiveness. 69 Management’s Report on Internal Control over Financial Reporting Nexstar’s management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2020 based upon the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013) . Based on management’s assessment, we have concluded that our internal control over financial reporting was effective as of December 31, 2020. PricewaterhouseCoopers LLP, an independent registered public accounting firm, has audited the effectiveness of our internal control over financial reporting as of December 31, 2020 as stated in their report which appears herein. Item 9B. Other Information None. 70 PART III Item 10. Directors, Executive Officers and Corporate Governance Information concerning directors that is required by this Item 10 will be set forth in the Proxy Statement to be provided to stockholders in connection with our 2021 Annual Meeting of Stockholders (the “Proxy Statement”) or in an amendment to this Annual Report on Form 10-K under the headings “Directors” and “Delinquent Section 16(a) Report” which information is incorporated herein by reference. Item 11. Executive Compensation Information required by this Item 11 will be set forth in the Proxy Statement under the headings “Compensation of Named Executive Officers” and “Compensation of Directors,” which information is incorporated herein by reference. Information specified in Items 402(k) and 402(l) of Regulation S-K and set forth in the Proxy Statement is incorporated by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management, and Related Stockholder Matters Information required by this Item 12 will be set forth in the Proxy Statement under the headings “Beneficial Ownership of Nexstar Common Stock” and “Compensation of Named Executive Officers,” which information is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions, and Director Independence Information required by this Item 13 will be set forth in the Proxy Statement under the heading “Certain Relationships and Related Person Transactions,” which information is incorporated herein by reference. Item 14. Principal Accountant Fees and Services Information required by this Item 14 will be set forth in the Proxy Statement under the heading “Ratification of the Selection of Independent Registered Public Accounting Firm,” which information is incorporated herein by reference. 71 PART IV Item 15. Exhibits and Financial Statement Schedules (a) Documents filed as part of this report: (1) Consolidated Financial Statements. The Consolidated Financial Statements of Nexstar Media Group, Inc. listed on the index on page F-1 have been included beginning on page F-5 of this Annual Report on Form 10-K. (2) Financial Statement Schedules . The schedule of Valuation and Qualifying Accounts appears in Note 20 to the Consolidated Financial Statements filed as part of this report. (3) Exhibits . The exhibits listed on the accompanying Index to Exhibits on this Annual Report on Form 10-K are filed, furnished or incorporated into this Annual Report on Form 10-K by reference, as applicable. Ite m 16. Form 10-K Summary Not applicable. 72 Exhibit Index Exhibit Number Exhibit Description 2.1 Agreement and Plan of Merger, dated as of January 27, 2016, by and between Nexstar Media Group, Inc., Media General, Inc., and Neptune Merger Sub, Inc. (Incorporated by reference to Exhibit 2.1 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Media Group, Inc. on January 28, 2016). + 2.2 Agreement and Plan of Merger, dated as of November 30, 2018, by and between Nexstar Media Group, Inc., Tribune Media Company and Titan Merger Sub, Inc. (Incorporated by reference to Exhibit 2.1 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Media Group, Inc. on December 4, 2018). 2.3 Asset Purchase Agreement, dated as of March 20, 2019, by and among Nexstar Media Group, Inc., Belo Holdings, Inc. and TEGNA Inc. (Incorporated by reference to Exhibit 2.1 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Media Group, Inc. on March 26, 2019). 2.4 Asset Purchase Agreement, dated as of March 20, 2019, by and among Nexstar Media Group, Inc., Scripps Media, Inc. and Scripps Broadcasting Holdings, LLC. (Incorporated by reference to Exhibit 2.2 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Media Group, Inc. on March 26, 2019). 3.1 Amended and Restated Certificate of Incorporation of Nexstar Media Group, Inc. (Incorporated by reference to Exhibit 3.1 to Registration Statement on Form S-4 (File No. 333-190283) filed by Nexstar Broadcasting, Inc.). 3.2 Certificate of Amendment to Amended and Restated Certificate of Incorporation of Nexstar Media Group, Inc. (Incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Media Group, Inc. on January 17, 2017). 3.3 Amended and Restated Bylaws of Nexstar Media Group, Inc. (Incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Media Group, Inc. on January 31, 2020). 4.1 Specimen Class A Common Stock Certificate. (Incorporated by reference to Exhibit 4.1 to Amendment No. 6 to Registration Statement on Form S-1 (File No. 333-86994) filed by Nexstar Media Group, Inc.) . 4.2 Indenture, dated as of July 3, 2019, between Nexstar Escrow, Inc., as issuer, and Citibank, N.A., as trustee (Incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Media Group, Inc. on July 3, 2019). 4.3 Form of 5.675% Senior Note due 2027 (Incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Media Group, Inc. on July 3, 2019). 4.4 First Supplemental Indenture, dated as of September 19, 2019, by and among Nexstar Broadcasting, Inc., as issuer, the guarantors party thereto, and Citibank, N.A. as trustee (Incorporated by reference to Exhibit 4.3 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Media Group, Inc. on September 20, 2019). 4.5 Second Supplemental Indenture, dated as of November 22, 2019, by and among Nexstar Broadcasting, Inc., as issuer, the guarantors party thereto, and Citibank, N.A. as trustee (Incorporated by reference to Exhibit 4.3 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Media Group, Inc. on November 22, 2019). 4.6 Indenture, dated as of September 25, 2020, by and among Nexstar Broadcasting, Inc., as issuer, the guarantors party thereto, and Citibank, N.A., as trustee (Incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Media Group, Inc. on September 25, 2020). 4.7 Form of 4.750% Senior Notes due 2028 (Incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Media Group, Inc. on September 25, 2020). 4.8 Description of the Registrant's Securities registered under Section 12 of the Securities Exchange Act of 1934.* 10.1 Contingent Value Rights Agreement, dated as of January 13, 2017, by and between Nexstar Media Group, Inc. and American Stock Transfer & Trust Company, LLC as rights agent (Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Media Group, Inc. on January 17, 2017). 10.2 Stock Option Agreement, dated as of November 29, 2011, by and among Mission Broadcasting, Inc., Nancie J. Smith, Dennis Thatcher and Nexstar Broadcasting, Inc. (Incorporated by reference to Exhibit 10.44 to Annual Report on Form 10-K for the year ended December 31, 2011 (File No. 000-50478) filed by Nexstar Media Group, Inc.). 10.3 Amendment, dated as of November 15, 2019, to Stock Option Agreement, dated as of November 29, 2011, by and between Mission Broadcasting, Inc., Dennis Thatcher, Nancie J. Smith, and Nexstar Broadcasting, Inc. (Incorporated by reference to Exhibit 10.87 to Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 (File No. 000-50478) filed by Nexstar Media Group, Inc.) . 10.4 Amendment, dated as of November 30, 2020, to Stock Option Agreement, dated as of November 29, 2011, as amended November 15, 2019, by and between Mission Broadcasting, Inc., Dennis Thatcher, Nancie J. Smith, and Nexstar Broadcasting, Inc.* 10.5 Credit Agreement, dated as of January 17, 2017, by and among Nexstar Media Group, Inc., as a holding company, Nexstar Broadcasting, Inc., as the borrower, Bank of America, N.A., as the administrative agent, the collateral agent, a letter of credit issuer and a swing line lender and other financial institutions from time to time party thereto (Incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Media Group, Inc. on January 17, 2017). 10.6 Amendment No. 1, dated as of July 19, 2018, to Credit Agreement, dated as of January 17, 2017, by and among Nexstar Broadcasting, Inc., Nexstar Media Group, Inc., Bank of America, N.A. and the several lenders party thereto (Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Broadcasting Group, Inc. on July 25, 2017). 73 10. 7 Amendment No. 2, dated as of October 26, 2018, to Credit Agreement, dated as of January 17, 2017, by and among Nexstar Broadcasting, Inc., Nexstar Media Group, Inc., Bank of America, N.A. and the several lenders party thereto (Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Media Group, Inc. on November 1, 2018). 10.8 Amendment No. 3, dated as of September 19, 2019, to Credit Agreement, dated as of January 17, 2017, by and among Nexstar Broadcasting, Inc., Nexstar Media Group, Inc., Bank of America, N.A. and the several lenders party thereto (Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Media Group, Inc. on September 20, 2019). 10.9 Amendment No. 4 , dated as of September 3, 2020, to Credit Agreement, dated as of January 17, 2017, by and among Nexstar Broadcasting, Inc., Nexstar Media Group, Inc., Bank of America, N.A. and the several lenders party thereto (Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K/A (File No. 000-50478) filed by Nexstar Media Group, Inc. on September 9, 2020). 10.10 Credit Agreement, dated as of January 17, 2017, by and among Mission Broadcasting, Inc., as the borrower and Bank of America, N.A., as the administrative agent and the collateral agent and other financial institutions from time to time party thereto (Incorporated by reference to Exhibit 10.8 to Annual Report on Form 10-K for the period ended December 31, 2016 (File No. 333-62916-02) filed by Mission Broadcasting, Inc.). 10.11 Amendment No. 1, dated as of July 19, 2017, to Credit Agreement, dated as of January 17, 2017, by and among Mission Broadcasting, Inc., Bank of America, N.A. and the several lenders party thereto (Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K (File No. 333-62916-02) filed by Mission Broadcasting, Inc. on July 25, 2017). 10.12 Amendment No. 2, dated as of October 26, 2018, to Credit Agreement, dated as of January 17, 2017, by and among Mission Broadcasting, Inc., Bank of America, N.A. and the several lenders party thereto (Incorporate by reference to Exhibit 10.1 to Current Report on Form 8-K (File No. 333-62916-02) filed by Mission Broadcasting, Inc. on November 1, 2018). 10.13 Amendment No. 3, dated as of September 3, 2020, to Credit Agreement, dated as of January 17, 2017, by and among Mission Broadcasting, Inc., Bank of America, N.A. and the several lenders party thereto (Incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K/A (File No. 000-50478) filed by Nexstar Media Group, Inc. on September 9, 2020). 10.14 Executive Employment Agreement, dated as of January 5, 1998, by and between Perry A. Sook and Nexstar Media Group, Inc., as amended on January 5, 1999. (Incorporated by reference to Exhibit 10.11 to Registration Statement on Form S-4 (File No. 333-62916) filed by Nexstar Finance, L.L.C. and Nexstar Finance, Inc.). 10.15 Amendment to Employment Agreement, dated as of May 10, 2001, by and between Perry A. Sook and Nexstar Media Group, Inc. (Incorporated by reference to Exhibit 10.12 to Registration Statement on Form S-4 (File No. 333-62916) filed by Nexstar Finance, L.L.C. and Nexstar Finance, Inc.). 10.16 Modifications to Employment Agreement, dated as of September 26, 2002, by and between Perry A. Sook and Nexstar Media Group, Inc. (Incorporated by reference to Exhibit 10.55 to Amendment No. 2 to Registration Statement on Form S-1 (File No. 333-86994) filed by Nexstar Media Group, Inc.). 10.17 Addendum to Employment Agreement, dated as of August 25, 2003, by and between Perry A. Sook and Nexstar Media Group, Inc. (Incorporated by reference to Exhibit 10.20 to Registration Statement on Form S-1 (File No. 333-86994) filed by Nexstar Media Group, Inc.). 10.18 Addendum to Employment Agreement, dated as of July 2, 2007, by and between Perry A. Sook and Nexstar Media Group, Inc. (Incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q for the period ended June 30, 2007 (File No. 000-50478) filed by Nexstar Media Group, Inc. on August 8, 2007). 10.19 Addendum to Executive Employment Agreement between Perry A. Sook and Nexstar Media Group, Inc. (Incorporated by reference to Exhibit 10.93 to Annual Report on Form 10-K (File No. 000-50478) filed by Nexstar Media Group, Inc. on March 31, 2009). 10.20 Addendum to Executive Employment Agreement, dated as of September 11, 2012, between Perry A. Sook and Nexstar Broadcasting, Inc. (Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Media Group, Inc. on September 17, 2012). 10.21 Amendment to Executive Employment Agreement, dated as of January 29, 2015 between Perry A. Sook and Nexstar Broadcasting, Inc. (Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Media Group, Inc. on February 5, 2015). 10.22 Amendment to Executive Employment Agreement, dated as of January 15, 2019 between Perry A. Sook and Nexstar Broadcasting, Inc. (Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Media Group, Inc. on January 22, 2019). 10.23 Executive Employment Agreement, dated as of July 13, 2009, by and between Thomas E. Carter and Nexstar Media Group, Inc. (Incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q (File No. 000-50478) filed by Nexstar Media Group, Inc. on August 12, 2009). 10.24 Amendment to the Executive Agreement between Thomas E. Carter and Nexstar Media Group, Inc. (Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Media Group, Inc. on August 1, 2014). 10.25 Amendment to Executive Employment Agreement, dated as of January 9, 2017, between Thomas E. Carter and Nexstar Media Group, Inc. (Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Media Group, Inc. on January 13, 2017). 74 10.2 6 Executive Employment Agreement between Timothy Busch and Nexstar Media Group, Inc. (Incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q (File No. 000-50478) filed by Nexstar Media Group, Inc. on August 12, 2008). 10.27 Amendment to the Executive Employment Agreement, dated as of May 31, 2013, between Timothy C. Busch and Nexstar Media Group, Inc. (Incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Media Group, Inc. on June 6, 2013). 10.28 Second Amendment to the Executive Employment Agreement, dated as of January 17, 2017, between Timothy C. Busch and Nexstar Media Group, Inc. (Incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q for the period ended March 31, 2017 (File No. 000-50478) filed by Nexstar Media Group, Inc.) 10.29 Executive Employment Agreement, dated as of April 1, 2017, between Gregory Raifman and Nexstar Media Group, Inc. (Incorporated by reference to Exhibit 10.29 to Annual Report on Form 10-K for the year ended December 31, 2017 (File No. 000-50478) filed by Nexstar Media Group, Inc.). 10.30 Executive Employment Agreement, dated as of September 25, 2020, between Thomas E. Carter and Nexstar Media Group, Inc. (Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Media Group, Inc. on October 1, 2020). 10.31 Nexstar Media Group, Inc. 2012 Long-Term Equity Incentive Plan (Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K (File No. 000-50478) filed by Nexstar Media Group, Inc. on October 2, 2012). 10.32 Nexstar Media Group, Inc. 2015 Long-Term Equity Incentive Plan (Incorporated by reference to Definitive Proxy Statement on Schedule 14A (File No. 000-50478) filed by Nexstar Media Group, Inc. on April 24, 2015). 10.33 Nexstar Media Group, Inc. 2019 Long-Term Equity Incentive Plan (Incorporated by reference to Definitive Proxy Statement on Schedule 14A (File No. 000-50478) filed by Nexstar Media Group, Inc. on April 26, 2019). 10.34 Nexstar Media Group, Inc.’s Restricted Stock Unit Agreement Form (Incorporated by reference to Exhibit 10.88 to Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 (File No. 000-50478) filed by Nexstar Media Group, Inc.). 14.1 Nexstar Media Group, Inc. Code of Ethics. (Incorporated by reference to Exhibit 14.1 to the Annual Report on Form 10-K for the year ended December 31, 2003 (File No. 000-50478) filed by Nexstar Media Group, Inc.). 21.1 Subsidiaries of the Registrant.* 23.1 Consent issued by PricewaterhouseCoopers LLP.* 31.1 Certification of Perry A. Sook pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* 31.2 Certification of Thomas E. Carter pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* 32.1 Certification of Perry A. Sook pursuant to 18 U.S.C. ss. 1350.* 32.2 Certification of Thomas E. Carter pursuant to 18 U.S.C. ss. 1350.* 101.INS Inline XBRL Instance Document – the XBRL Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.* 101.SCH Inline XBRL Taxonomy Extension Schema Document.* 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document.* 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document.* 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document.* 101.PRE Inline XBRL Taxonomy Extension Presentation Loinkbase Document.* 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).* + Schedules have been omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule will be furnished to the Securities and Exchange Commission upon request. * Filed herewith. 75 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. NEXSTAR MEDIA GROUP, INC. By: /s/ P ERRY A. S OOK Perry A. Sook Chairman and Chief Executive Officer By: /s/ T HOMAS E. C ARTER Thomas E. Carter President, Chief Operating Officer and Chief Financial Officer Dated: March 1, 2021 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities indicated on March 1, 2021. Name Title /s/ PERRY A. SOOK Chairman and Chief Executive Officer Perry A. Sook (Principal Executive Officer) /s/ THOMAS E. CARTER President, Chief Operating Officer and Chief Financial Officer Thomas E. Carter (Principal Financial and Accounting Officer) /s/ GEOFF ARMSTRONG Director Geoff Armstrong /s/ BERNADETTE AULESTIA Director Bernadette Aulestia /s/ DENNIS J. FITZSIMONS Director Dennis J. FitzSimons /s/ JAY M. GROSSMAN Director Jay M. Grossman /s/ C. THOMAS MCMILLEN Director C. Thomas McMillen /s/ LISBETH MCNABB Director Lisbeth McNabb /s/ DENNIS A. MILLER Director Dennis A. Miller /s/ JOHN R. MUSE Director John R. Muse /s/ I. MARTIN POMPADUR Director I. Martin Pompadur 76 NEXSTAR MEDIA GROUP, INC. INDEX TO FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm F-2 Consolidated Balance Sheets as of December 31, 20 20 and 20 19 F-4 Consolidated Statements of Operations and Comprehensive Income for the years ended December 31, 202 0 , 201 9 and 201 8 F-5 Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2020, 2019 and 2018 F-6 Consolidated Statements of Cash Flows for the years ended December 31, 2020, 2019 and 2018 F-7 Notes to Consolidated Financial Statements Note 1: Organization and Business Operations F-8 Note 2: Summary of Significant Accounting Policies F-8 Note 3: Acquisitions and Dispositions F-22 Note 4: Property and Equipment F-31 Note 5: Intangible Assets and Goodwill F-31 Note 6: Assets Held for Sale F-33 Note 7: Investments F-33 Note 8: Accrued Expenses F-35 Note 9: Debt F-35 Note 10: Leases F-40 Note 11: Retirement and Postretirement Plans F-41 Note 12: Fair Value Measurements F-47 Note 13: Common Stock F-48 Note 14: Stock-Based Compensation Plans F-49 Note 15: Income Taxes F-50 Note 16: FCC Regulatory Matters F-53 Note 17: Commitments and Contingencies F-55 Note 18: Segment Data F-59 Note 19: Unaudited Quarterly Data F-61 Note 20: Valuation and Qualifying Accounts F-61 Note 21: Subsequent Events F-61 F-1 Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Nexstar Media Group, Inc. Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Nexstar Media Group, Inc. and its subsidiaries (the “Company”) as of December 31, 2020 and 2019, and the related consolidated statements of operations and comprehensive income, of changes in stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2020, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Change in Accounting Principle As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in 2019. Basis for Opinions The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. F-2 Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Goodwill Impairment Assessment – Cable Network Reporting Unit As described in Note 5 to the consolidated financial statements, the Company’s goodwill balance was $2,984 million as of December 31, 2020, and the goodwill associated with the cable network reporting unit was $400 million. Management conducts an impairment test annually in the fourth quarter, or whenever events or changes in circumstances indicate that goodwill might be impaired. In the fourth quarter of 2020, management completed a quantitative impairment test of its cable network reporting unit goodwill. The results of this impairment test indicated that the reporting unit fair value exceeded the carrying amount by approximately 70%, and therefore no goodwill impairment was identified. Fair value was estimated using a combination of income and market approaches. The significant assumptions utilized by management in estimating the fair value of the cable network reporting unit included, among others, selection of comparable public companies and related implied EBITDA multiples in such company’s estimated enterprise values; selection of comparable recent observable transactions for similar assets and the related implied EBITDA multiple, and selection of recent comparable observable transactions for similar assets and the related implied value per subscriber. The principal considerations for our determination that performing procedures relating to the goodwill impairment assessment of the cable network reporting unit is a critical audit matter are (i) the significant judgment by management when developing the fair value measurement of the reporting unit; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to the selection of comparable public companies and related implied EBITDA multiples in such company’s estimated enterprise values, selection of comparable recent observable transactions for similar assets and the related implied EBITDA multiple, and selection of recent comparable observable transactions for similar assets and the related implied value per subscriber; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s goodwill impairment test, including controls over the valuation of the cable network reporting unit. These procedures also included, among others (i) testing management’s process for developing the fair value estimate; (ii) evaluating the appropriateness of the utilization of a combination of income and market approaches; (iii) testing the completeness and accuracy of underlying data used in the market approach; (iv) evaluating the reasonableness of the significant assumptions used by management related to the selection of comparable public companies and related implied EBITDA multiples in such company’s estimated enterprise values, selection of comparable recent observable transactions for similar assets and the related implied EBITDA multiple, and selection of recent comparable observable transactions for similar assets and the related implied value per subscriber. Professionals with specialized skill and knowledge were used to assist in the evaluation of the Company’s valuation method and the aforementioned significant assumptions. /s/ PricewaterhouseCoopers LLP Dallas, Texas March 1, 2021 We have served as the Company’s auditor since 1997. F-3 NEXSTAR MEDIA GROUP, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except for share and per share information) December 31, December 31, 2020 2019 ASSETS Current assets: Cash and cash equivalents $ 152,701 $ 232,070 Restricted cash and cash equivalents 16,608 16,608 Accounts receivable, net of allowance for doubtful accounts of $ 34,922 and $ 17,205 , respectively 904,801 883,921 Spectrum asset - 67,171 Prepaid expenses and other current assets 135,872 151,997 Total current assets 1,209,982 1,351,767 Property and equipment, net 1,604,881 1,290,428 Goodwill 2,984,008 2,996,875 FCC licenses 2,909,704 2,921,465 Network affiliation agreements, net 2,250,283 2,532,266 Other intangible assets, net 688,918 727,354 Assets held for sale 4,524 240,524 Investments 1,333,778 1,477,353 Other noncurrent assets, net 418,198 451,705 Total assets (1) $ 13,404,276 $ 13,989,737 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of debt $ 21,429 $ 109,310 Accounts payable 218,418 157,366 Broadcast rights payable 105,557 120,165 Accrued expenses 307,192 422,511 Liability to surrender spectrum asset - 77,962 Other current liabilities 78,292 60,243 Total current liabilities 730,888 947,557 Debt 7,646,574 8,383,278 Deferred tax liabilities 1,674,008 1,710,664 Other noncurrent liabilities 815,930 894,745 Total liabilities (1) 10,867,400 11,936,244 Commitments and contingencies (Note 17) Stockholders' equity: Preferred stock - $ 0.01 par value, 200,000 shares authorized; none issued and outstanding at each of December 31, 2020 and December 31, 2019 - - Class A Common stock - $ 0.01 par value, 100,000,000 shares authorized; 47,291,463 shares issued, 43,256,828 shares outstanding as of December 31, 2020 and 47,291,463 shares issued, 45,749,788 shares outstanding as of December 31, 2019 473 473 Class B Common stock - $ 0.01 par value, 20,000,000 shares authorized; none issued and outstanding at each of December 31, 2020 and December 31, 2019 - - Class C Common stock - $ 0.01 par value, 5,000,000 shares authorized; none issued and outstanding at each of December 31, 2020 and December 31, 2019 - - Additional paid-in capital 1,362,510 1,353,729 Accumulated other comprehensive income 34,510 19,850 Retained earnings 1,488,031 778,833 Treasury stock - at cost; 4,034,635 and 1,541,675 shares as of December 31, 2020 and December 31, 2019, respectively ( 367,132 ) ( 121,388 ) Total Nexstar Media Group, Inc. stockholders’ equity 2,518,392 2,031,497 Noncontrolling interests 18,484 21,996 Total stockholders' equity 2,536,876 2,053,493 Total liabilities and stockholders’ equity $ 13,404,276 $ 13,989,737 The accompanying Notes are an integral part of these Consolidated Financial Statements. (1) The consolidated total assets as of December 31, 2020 and 2019 include certain assets held by consolidated VIEs of $ 323.2 million and $ 261.8 million, respectively, which are not available to be used to settle the obligations of Nexstar. The consolidated total liabilities as of December 31, 2020 and 2019 include certain liabilities of consolidated VIEs of $ 142.6 million and $ 61.7 million, respectively, for which the creditors of the VIEs have no recourse to the general credit of Nexstar. See Note 2 for additional information. F-4 NEXSTAR MEDIA GROUP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (in thousands, except per share information) Years Ended December 31, 2020 2019 2018 Net revenue $ 4,501,269 $ 3,039,324 $ 2,766,696 Operating expenses (income): Direct operating expenses, excluding depreciation and amortization 1,720,520 1,348,632 1,117,917 Selling, general and administrative expenses, excluding depreciation and amortization 912,057 729,981 579,933 Amortization of broadcast rights 137,490 85,018 61,342 Amortization of intangible assets 279,710 200,317 149,406 Depreciation 147,688 123,375 109,789 Reimbursement from the FCC related to station repack ( 57,261 ) ( 70,356 ) ( 29,381 ) Goodwill and intangible assets impairment - 63,317 19,911 Gain on disposal of stations, net ( 7,473 ) ( 96,091 ) - Change in the fair value of contingent consideration attributable to a merger 3,933 - - Gain on relinquishment of spectrum ( 10,791 ) - - Total operating expenses 3,125,873 2,384,193 2,008,917 Income from operations 1,375,396 655,131 757,779 Income (loss) on equity investments, net 70,154 17,925 ( 2,436 ) Interest expense, net ( 335,303 ) ( 304,350 ) ( 220,994 ) Loss on extinguishment of debt ( 50,745 ) ( 10,301 ) ( 12,120 ) Pension and other postretirement plans credit, net 46,010 15,600 10,755 Other expenses, net ( 944 ) ( 684 ) ( 39 ) Income before income taxes 1,104,568 373,321 532,945 Income tax expense ( 296,508 ) ( 137,026 ) ( 144,680 ) Net income 808,060 236,295 388,265 Net (income) loss attributable to noncontrolling interests 3,381 ( 6,036 ) 1,212 Net income attributable to Nexstar Media Group, Inc. $ 811,441 $ 230,259 $ 389,477 Net income per common share attributable to Nexstar Media Group, Inc.: Basic $ 18.06 $ 5.01 $ 8.52 Diluted $ 17.37 $ 4.80 $ 8.21 Weighted average number of common shares outstanding: Basic 44,921 45,986 45,718 Diluted 46,720 47,923 47,412 Net income $ 808,060 $ 236,295 $ 388,265 Other comprehensive income (loss): Change in unrecognized amounts included in pension and other postretirement benefit obligations, net of tax (expense) benefit of ($ 5,007 ) in 2020, ($ 11,723 ) in 2019, and $ 7,147 in 2018 14,611 34,166 ( 20,456 ) Total comprehensive income 822,671 270,461 367,809 Total comprehensive (income) loss attributable to noncontrolling interests 3,381 ( 6,036 ) 1,212 Total comprehensive income attributable to Nexstar Media Group, Inc. $ 826,052 $ 264,425 $ 369,021 The accompanying Notes are an integral part of these Consolidated Financial Statements. F-5 NEXSTAR MEDIA GROUP, INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY For the Three Years Ended December 31, 2020 (in thousands, except for share and per share information) Accumulated Class A Additional Other Total Common Stock Paid-In Retained Comprehensive Treasury Stock Noncontrolling Stockholders' Shares Amount Capital Earnings (Loss) Income Shares Amount interests Equity Balances as of December 31, 2017 47,291,463 $ 473 $ 1,342,541 $ 299,523 $ 6,140 ( 1,325,049 ) $ ( 78,063 ) $ 10,696 $ 1,581,310 Purchase of treasury stock - - - - - ( 751,920 ) ( 50,524 ) - ( 50,524 ) Stock-based compensation expense - - 31,260 - - - - - 31,260 Vesting of restricted stock units and exercise of stock options - - ( 21,870 ) - - 411,752 22,902 - 1,032 Common stock dividends declared ($ 1.50 per share) - - - ( 68,629 ) - - - - ( 68,629 ) Consolidation of variable interest entities - - - - - - - 6,500 6,500 Contribution from a noncontrolling interest - - - - - - - 226 226 Change in pension and other postretirement benefit obligations, net of tax - - - - ( 20,456 ) - - - ( 20,456 ) Net income (loss) - - - 389,477 - - - ( 1,212 ) 388,265 Balances as of December 31, 2018 47,291,463 473 1,351,931 620