This excerpt taken from the NXST 10-K filed Mar 15, 2005.
Nexstar and Mission have a history of net losses and a substantial accumulated deficit.
Nexstar and Mission had consolidated net losses of $20.5 million, $71.8 million and $99.1 million for the years ended December 31, 2004, 2003 and 2002, respectively, primarily as a result of amortization of intangible assets and debt service obligations. In addition, as of December 31, 2004, Nexstar and Mission had a combined accumulated deficit of $410.0 million. Nexstar and Mission may not be able to achieve or maintain profitability.
Nexstar and Mission have a material amount of goodwill and intangible assets, and if Nexstar and Mission are required to write down goodwill and intangible assets in future periods in compliance with prevailing accounting standards, it would reduce Nexstar and Missions net income, which in turn could materially and adversely affect Nexstar and Missions results of operations.
Approximately $519.6 million, or 70.7%, of Nexstar and Missions combined total assets as of December 31, 2004, consist of goodwill and unamortized intangible assets. Intangible assets principally include network affiliation agreements and FCC licenses. In July 2001, the FASB issued Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets (SFAS No. 142) which became effective on January 1, 2002. SFAS No. 142 requires, among other things, the discontinuance of the amortization of goodwill and FCC licenses, and the introduction of impairment testing in its place. SFAS No. 142 also required Nexstar and Mission to complete a transitional test of goodwill and FCC licenses for impairment and, as a result, Nexstar and Mission recorded goodwill impairment loss of $43.5 million, net of taxes, which has been accounted for as a cumulative effect of change in accounting principle in the first quarter of 2002. We and Mission completed our annual tests for impairment of goodwill and FCC licenses as of December 31, 2004 and 2003 with $0 impairment being recognized in 2004 and 2003 from this testing.