Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with 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
2025 Highlights
Entered into a definitive agreement to acquire TEGNA Inc. for $6.2 billion in a transaction expected to be accretive to Nexstar’s standalone Adjusted Free Cash Flow. The transaction is subject to regulatory approvals and is anticipated to close by the second half of 2026.
Returned approximately $351 million of capital to shareholders through repurchases of common stock and dividends.
Renewed distribution agreements in the fourth quarter, covering more than 60% of our subscriber base.
Acquired the assets of WBNX-TV, an independent full power television station serving the Cleveland, OH market for a $22 million cash purchase price. On September 1, 2025, the station became affiliated with The CW.
Completed the refinancing of senior secured credit facilities on June 27, 2025, reducing the interest margin, increasing capacity under our revolver, and extending the maturities. During 2025, the Company repaid $185 million of its debt.
Overview of Operations
As of February 26, 2026, we owned, operated, programmed or provided sales and other services to 201 full power television stations and one AM radio station, including those owned by VIEs, in 116 markets in 40 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 35 full power television stations are VIEs that are consolidated into our financial statements. See Note 2 to our Consolidated Financial Statements included 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 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 (i) the local service agreements we have with their stations, (ii) our (excluding The CW) guarantee of the obligations incurred under Mission’s senior secured credit facility, (iii) our power over significant activities affecting the consolidated VIEs’ economic performance, including budgeting for advertising revenue, advertising sales and, in some cases, hiring and firing of sales force personnel and (iv) purchase options granted by each consolidated VIE which permit us to acquire the assets and assume the liabilities of each of these VIEs’ stations, 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.
As of December 31, 2025, we also own an 80.8% ownership interest in The CW, the fifth major broadcast network in the U.S., NewsNation, a national news network, two multicast networks, Antenna TV and REWIND TV, multicast network services provided to third parties, and a 31.3% ownership stake in TV Food Network. Our digital assets include 125 local websites and 229 mobile applications across local stations, NewsNation and The Hill. The portfolio also includes 110 CTV applications and three FAST channels from The CW and The Hill.
The Company generates revenue primarily from distribution and advertising. Distribution revenue consists of fees received for the retransmission of our stations’ signals and for the carriage of our cable and broadcast networks by cable, satellite, and other MVPDs, vMVPDs, and direct-to-consumer OTT services. Advertising revenue is derived from the sale of local and national advertising across our stations, networks, websites, apps, and other digital platforms, including through third‑party media partners. In even-numbered years, we also earn significant political advertising revenue from candidates, political action committees, political parties, and interest groups.
Our principal operating expenses include third-party programming, news production, promotion, sales, digital cost of goods sold, content creation, and other administrative and corporate costs.
For additional information, see Item 1. “Business” and Item 1A. “Risk Factors.”
Merger Agreement with TEGNA
On August 18, 2025, we entered into a definitive Merger Agreement to acquire the outstanding equity of TEGNA. TEGNA owns and operates 64 television stations and two radio stations in 51 DMAs in the U.S. The Merger is anticipated to close by the second half of 2026. Upon closing, the Merger is expected to increase our operational and geographic diversity and scale, enhance our presence in various localities and extend our footprint to additional areas experiencing contested elections. Pursuant to the Merger Agreement, we will acquire TEGNA’s outstanding equity for a cash payment of $22 per share. The transaction is valued at an estimated $6.2 billion, which includes the estimated purchase price of $5.8 billion (comprising the Merger Consideration and the refinancing of certain existing TEGNA debt), financing fees and transaction costs and expenses. On August 18, 2025, we entered into a debt commitment letter, which was subsequently amended and restated on September 11, 2025, pursuant to which a syndicate of financial institutions committed to provide debt financing up to a maximum of $5.725 billion to consummate the Merger, the refinancing of certain of TEGNA’s existing debt and related transactions.
The Merger Agreement has been approved by the boards of directors of both companies and by the stockholders of TEGNA. The consummation of the Merger is subject to the satisfaction of certain customary conditions, including receipt of regulatory approvals.
See Note 1 to our Consolidated Financial Statements included in Part IV, Item 15(a) of this Annual Report on Form 10-K for additional information.
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 December 2023, the FCC issued an order concluding its 2018 quadrennial review of certain media ownership rules. The order retained the local television ownership rule in its then-existing form without deregulatory changes while extending the rule to prohibit, in certain circumstances, the acquisition of a network affiliation that would establish a “top four” combination involving a network affiliated LPTV station or digital multicast stream. In a July 2025 decision on appeal of the FCC’s 2018 quadrennial review order, a federal court of appeals vacated the “top four” portion of the local television ownership rule, which had generally prohibited common ownership of two of the top four highest-rated stations in a DMA. The court also vacated the December 2023 rule prohibiting certain “top four” combinations involving LPTV stations or digital multicast streams.
The FCC has not yet issued an order repealing the “top four” portion of the duopoly rule and the “top four” rule concerning LPTV stations and digital multicasts. Moreover, the FCC’s 2022 quadrennial media ownership review and an FCC proceeding to review the current national limit on television ownership are currently pending. The FCC could reinstitute earlier television ownership restrictions or impose other limitations in these or any future reviews.
Historical Performance
Results of Operations
The following table sets forth the Company’s operating results:
Years Ended December 31,
% Change
Net revenue:
Distribution
Advertising
Other
Net revenue
Operating expenses:
Direct operating
Selling, general and administrative
Amortization of broadcast rights
Depreciation and amortization of intangible assets
Goodwill and long-lived asset impairments
Other
Total operating expenses
Income from operations
Income from equity method investments, net (excluding impairment)
Impairment of an equity method investment
Interest expense, net
Pension and other postretirement plans credit, net
Gain on disposal of an investment
Other expenses, net
Income before income taxes
Income tax expense
Net income
Net loss attributable to noncontrolling interests
Net income attributable to Nexstar Media Group, Inc.
NM = Not Meaningful
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
The Company’s revenues decreased 8.5% for the year ended December 31, 2025, compared to the same period in 2024, primarily due to lower revenues from advertising.
Distribution revenue decreased by $4 million primarily due to the impact of MVPD subscriber attrition and the nonrecurring resolution of a disputed customer claim, offset in part by annual rate escalators, growth in vMVPD subscribers, and the addition of CW affiliations on certain of our stations.
Advertising revenue decreased by $456 million, due to a decrease in political advertising by $446 million, as 2025 is not an election year, and a decrease in non-political revenue of $10 million due to ongoing advertising market softness.
Direct operating expenses, consisting primarily of programming, news and technical expenses, and selling, general and administrative expenses decreased by $11 million primarily due to recent restructuring initiatives to streamline key lines of business, offset in part by legal and professional fees related to the proposed merger with TEGNA, nonrecurring costs related to a disputed customer claim, and costs associated with the debt refinancing completed in June 2025.
Amortization of broadcast rights decreased by $10 million, primarily due to lower amortization of broadcast rights at The CW of $6 million to $253 million in 2025 from $259 million in 2024.
Depreciation and amortization of intangible assets decreased by $13 million, primarily driven by a decrease in depreciation expense associated with certain fully depreciated assets.
In 2025 and 2024, we recognized goodwill impairment charges of $14 million and $24 million, respectively, related to a digital business unit. These charges resulted from our annual impairment review of assets in the fourth quarter of each year.
Income from equity method investments, net (excluding impairment) decreased by $40 million, primarily due to decline in TV Food Network’s net income resulting from lower revenue. Additional information regarding our investment in TV Food Network is provided in Note 6 to Consolidated Financial Statements included in Part IV, Item 15(a) of this Annual Report on Form 10-K.
In 2025, we recognized a non-cash impairment charge of $381 million pertaining to other-than-temporary impairment on our investment in TV Food Network, driven by ongoing pressures in the cable network industry and recent market data.
Interest expense, net decreased by $65 million, or 14.6%, primarily due to lower interest rates and a reduction in outstanding debt.
During the first quarter of 2024, Nexstar received $40 million in cash proceeds, and recorded a gain on disposal of an investment for the same amount, in connection with BMI’s sale to New Mountain Capital.
The Company’s effective tax rates during the years ended December 31, 2025 and 2024 were 44.7% and 28.8%, respectively. In 2025, nondeductible permanent differences accounted for a 12% increase to the effective tax rate, primarily driven by the impact of the other-than-temporary impairment included in pre-tax book income. Additionally, changes in the valuation allowance resulted in a 3.5% increase in the effective tax rate.
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023
The Company’s revenues increased 9.6% for the year ended December 31, 2024, compared to the same period in 2023, primarily due to higher revenues from political advertising and distribution, partially offset by lower revenue from non-political advertising.
Distribution revenue increased by $201 million primarily due to a dispute with an MVPD which caused Nexstar stations to be dark for 76 days during the third quarter in 2023, the benefit of distribution contract renewals in 2023 on terms favorable to the Company, annual rate escalators, growth in vMVPDs subscribers, the addition of CW affiliations on certain of our stations, and the return of partner stations on one MVPD in January 2024, which more than offset MVPD subscriber attrition.
Advertising revenue increased by $294 million primarily due to an increase of $426 million in political advertising as 2024 was an election year, offset in part by a decrease in non-political revenue of $132 million due to ongoing advertising market softness and political crowd-out.
Direct operating expenses, consisting primarily of programming, news and technical expenses, and selling, general and administrative expenses increased by $58 million primarily due to increased news expenses related to expansion of news programming, programming expenses primarily due to lower variable programming expenses in 2023 as a result of the period when Nexstar stations were dark, stock-based compensation expense from new restricted stock grants and the timing of restricted stock grants, and direct digital operating expenses, partially offset by lower expense from various administrative expenses.
Amortization of broadcast rights decreased by $129 million, primarily due to lower amortization of broadcast rights at The CW of $117 million to $259 million in 2024 from $376 million in 2023.
Depreciation and amortization of intangible assets decreased by $4 million, primarily due to lower amortization of intangible assets resulting from impairment recorded in 2023, partially offset by higher depreciation from asset purchases.
In 2024, we recorded a $24 million goodwill impairment related to a digital business unit. In 2023, we recorded $35 million of goodwill and intangible assets impairment attributable to a separate digital business unit. These charges resulted from our annual impairment review of assets in the fourth quarter of each year.
Income from equity method investments, net decreased by $34 million primarily due to a decrease in net income of TV Food Network, our largest equity method investment. TV Food Network’s net income decreased primarily due to a decrease in its advertising revenue. For additional information on our investment in TV Food Network, refer to Note 6 to Consolidated Financial Statements included in Part IV, Item 15(a) of this Annual Report on Form 10-K.
In February 2024, Nexstar received $40 million in cash proceeds, and recorded a gain on disposal of an investment for the same amount, in connection with BMI’s sale to New Mountain Capital.
The effective tax rates during the years ended December 31, 2024 and 2023 were 28.8% and 32.7%, respectively. Changes in the valuation allowance resulted in a 2.3% decrease to the effective tax rate. Other permanent differences, including a reduction in losses related to the minority interest in The CW, resulted in a 3.1% decrease to the effective tax rate. This was partially offset by provision to return and other reserve adjustments which resulted in a 1.6% increase in the effective tax rate.
Liquidity and Capital Resources
The Company is leveraged, which makes it vulnerable to changes in general economic conditions. The Company’s ability to repay or refinance its debt will depend on, among other things, financial, business, market, competitive and other conditions, many of which are beyond the Company’s control. The Company’s primary sources of liquidity include cash on hand, borrowing capacity under its revolving credit facilities (with a maturity date of June 2030) and cash generated from operations. The Company believes these sources of liquidity are sufficient to meet its business operating requirements, its capital expenditures and to continue to service its debt for at least the next 12 months as of the filing date of this Annual Report on Form 10-K. As of December 31, 2025, the Company was in compliance with the financial covenants contained in the amended credit agreements governing its senior secured credit facilities.
Any future adverse economic conditions, including those resulting from sustained inflation, high interest rates and supply chain disruptions, could adversely affect the Company’s future operating results, cash flows and financial condition.
Cash Flow Summary
The following tables present the Company’s total operating, investing and financing activity cash flows for the three years ended December 31 (in millions):
Net cash provided by operating activities
Net cash used in investing activities (1)
Net cash used in financing activities
Net increase (decrease) in cash, cash equivalents and restricted cash
Cash paid for interest
Income taxes paid, net of refunds (2)
In 2025, 2024 and 2023, the investing activities included total capital expenditures of $148 million, $145 million and $149 million.
In 2024, income taxes paid, net of refunds, includes $11 million in tax payments related to a gain from disposal of an investment.
As of December 31,
Cash, cash equivalents and restricted cash
Cash Flows—Operating Activities
Net cash provided by operating activities decreased by $359 million in 2025 compared to 2024, primarily due to lower net income and changes in operating assets and liabilities primarily reflecting timing of receipts and payments. In 2024, net cash
provided by operating activities increased by $251 million compared to 2023, mainly due to higher net income and changes in operating assets and liabilities primarily reflecting timing of receipts and payments.
Cash Flows—Investing Activities
Net cash flows used in investing activities increased by $71 million in 2025 compared to 2024, primarily due to a $22 million acquisition, a decrease in proceeds received from disposal of an investment of $40 million, and a $3 million increase in capital expenditures.
Net cash flows used in investing activities decreased by $71 million in 2024 compared to 2023, mainly due to $40 million proceeds received from the disposal of an investment in connection with BMI’s sale to New Mountain Capital and a $38 million decrease in cash used for acquisitions.
Cash Flows—Financing Activities
Net cash flows used in financing activities decreased by $569 million in 2025 compared to2024, primarily due to a $476 million decrease in stock repurchases and a $125 million decrease in debt repayments, partially offset by a $19 million decrease in contributions received from noncontrolling interests.
Net cash flows used in financing activities increased by $252 million in 2024 compared to 2023, mainly due to the $203 million prepayment of Term Loan B, a $43 million decrease in contributions from noncontrolling interests, and a $28 million increase in common stock dividends paid, offset in part by $16 million lower cash paid for shares withheld for taxes.
Material Cash Requirements
The Company is a party to many contractual obligations involving commitments to make payments to third parties. Certain contractual obligations are recorded on the Consolidated Balance Sheet as of December 31, 2025, while others are considered future commitments. The following summarizes the Company’s contractual obligations as of December 31, 2025, and the effect such obligations are expected to have on the Company’s short-term and long-term liquidity and capital resource needs (in millions):
Payments Due by Period
Total
Thereafter
Recorded contractual obligations:
Nexstar senior secured credit facility
Mission senior secured credit facility
5.625% senior unsecured notes due 2027
4.75% senior unsecured notes due 2028
Operating lease obligations
Broadcast rights current cash commitments (1)
Other (2)(3)
Unrecorded contractual obligations:
Network affiliation agreements (4)
Cash interest on debt (5)
Executive employee contracts (6)
Broadcast rights future cash commitments (7)
Other
Future minimum payments for license agreements for which the license period has begun and liabilities have been recorded.
As of December 31, 2025, we had $33 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.
As of December 31, 2025, we had $154 million and $16 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 10 to our Consolidated Financial Statements included in Part IV, Item 15(a) of this Annual Report on Form 10-K for further information regarding our funding obligations for these benefit plans.
Future minimum payments for network affiliation agreements during the contract period. Excludes network affiliation agreements between the Company’s stations and The CW as the related fees are eliminated in consolidation.
Estimated interest payments due as if all debt outstanding as of December 31, 2025 remained outstanding until maturity, based on interest rates in effect at December 31, 2025.
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 assume that contracts are not terminated prior to their expiration.
Future minimum payments for license agreements for which the license period has not commenced and no liability has been recorded.
On August 18, 2025, Nexstar entered into the Merger Agreement with TEGNA. The transaction is anticipated to close by the second half of 2026, subject to the satisfaction of certain customary conditions, including receipt of regulatory approvals. The transaction is valued at an estimated $6.2 billion, which includes the estimated purchase price of $5.8 billion (comprising the Merger Consideration and the refinancing of certain existing TEGNA debt), financing fees and transaction costs and expenses. The agreement contains certain termination rights for both parties, including termination fees under certain circumstances. Nexstar also received committed financing from a group of commercial banks to fund the Merger with TEGNA and related transactions. See Note 1 to our Consolidated Financial Statements included in Part IV, Item 15(a) of this Annual Report on Form 10-K for additional information.
As of December 31, 2025, the remaining available amount under the share repurchase authorization was $1.4 billion. No shares were repurchased from that date through the filing of this Annual Report on Form 10-K.
On January 30, 2026, our board of directors declared a quarterly cash dividend of $1.86 per share of its common stock. The dividend is payable on February 27, 2026 to stockholders of record on February 13, 2026.
Long-term debt
As of December 31, 2025, the Company had total outstanding debt of $6.3 billion, net of unamortized financing costs, discounts and premium, which represented 75.4% of the Company’s combined capitalization. The Company’s high level of debt requires that a substantial portion of cash flow be dedicated to pay principal and interest on debt, which reduces the funds available for working capital, capital expenditures, acquisitions and other general corporate purposes.
As of December 31,
($ in millions)
Nexstar senior secured credit facility
Mission senior secured credit facility
5.625% Notes, due July 2027
4.75% Notes, due November 2028
Total outstanding principal
Less: Unamortized financing costs, discounts and premium, net
Total outstanding debt
Unused revolving loan commitments under senior secured credit facilities (1)
Based on the covenant calculations as of December 31, 2025, all of the $586 million (net of outstanding standby letters of credit of $20 million) and $14 million unused revolving loan commitments under the respective Nexstar and Mission senior secured credit facilities were available for borrowing.
We (excluding The CW) 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 July 2027 and our 4.75% Notes, due November 2028. In consideration of our guarantee of Mission’s senior secured credit facility, 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 2026 and 2034) 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 make semiannual interest payments on the 5.625% Notes, due July 2027 on January 15 and July 15 of each year. We make semiannual interest payments on our 4.75% Notes, due November 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 July 2027 and 4.75% Notes, due November 2028, limit, but do not prohibit us or Mission from incurring substantial amounts of additional
debt in the future. Our senior secured credit facilities and the indentures governing our existing notes may limit the amount of dividends we may pay to stockholders and share repurchases we may make.
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’s ability to access funds under its senior secured credit facilities depends, in part, on its 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. Any future adverse economic conditions, including those resulting from sustained inflation and high interest rates, could adversely affect our future operating results and cash flows and 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.
The Nexstar 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. Pursuant to the Nexstar credit agreement, this covenant ratio at Nexstar’s election will increase to 4.75:1.00 with respect to the last day of the fiscal quarter during which a Material Transaction (as defined therein) shall have been consummated and the last day of each of the immediately following three consecutive fiscal quarters; provided that no more than two such elections will be made during the life of the facility. The financial covenant, which is formally calculated on a quarterly basis, is based on the Company’s combined results, excluding the operating results of The CW, which Nexstar designated as an unrestricted subsidiary under its credit agreements and indentures. The Mission 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, 2025, we were in compliance with our financial covenants. We believe the Company will be able to maintain compliance with all covenants contained in the credit agreements governing its senior secured facilities and the indentures governing Nexstar’s 5.625% Notes, due July 2027 and Nexstar’s 4.75% Notes, due November 2028 for a period of at least the next 12 months as of the filing date of this Annual Report on Form 10-K.
Off-Balance Sheet Arrangements
As of December 31, 2025, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or VIEs, 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, 2025, we have outstanding standby letters of credit with various financial institutions amounting to $20 million. The outstanding balance of standby letters of credit is deducted against our unused revolving loan commitment under our senior secured credit facility and would not be available for withdrawal.
Issuer and Guarantor Summarized Financial Information
Nexstar Media Inc. (the “Issuer”) is the issuer of 5.625% Notes, due July 2027 and 4.75% Notes, due November 2028. These notes are fully and unconditionally guaranteed, jointly and severally, by Nexstar Media Group, Inc. (“Parent”), Mission (a consolidated VIE) and the Subsidiary Guarantors (as defined below). The Issuer, Subsidiary Guarantors, Parent and Mission are collectively referred to as the “Obligor Group” for the 5.625% Notes, due July 2027 and 4.75% Notes, due November 2028. “Subsidiary Guarantors” refers to certain of the Issuer’s restricted subsidiaries (excluding The CW) that guarantee these notes. The guarantees of the notes 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 July 2027 and the 4.75% Notes, due November 2028. The 5.625% Notes, due July 2027 and 4.75% Notes, due November 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, Subsidiary Guarantors and Mission 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.
Summarized Balance Sheet Information for the Obligor Group as of December 31 (in millions):
Current assets – external (1)
Current assets – due from consolidated entities outside of Obligor Group
Total current assets
Noncurrent assets – external (1)(2)
Noncurrent assets – due from consolidated entities outside of Obligor Group
Total noncurrent assets
Total current liabilities (1)
Total noncurrent liabilities (1)
Noncontrolling interests
Excludes the assets and liabilities of The CW as it is not a guarantor of the 4.75% Notes, due November 2028 and 5.625% Notes, due July 2027.
Excludes Issuer’s equity investments of $396 million and $877 million as of December 31, 2025 and 2024, respectively, in unconsolidated investees. These unconsolidated investees do not guarantee the 4.75% Notes, due November 2028 and 5.625% Notes, due July 2027. For additional information on equity investments, refer to Note 6 to our Consolidated Financial Statements included in Part IV, Item 15(a) of this Annual Report on Form 10-K for additional information.
Summarized Statements of Operations Information for the Obligor Group (in millions):
Year Ended
December 31, 2025
Net revenue – external
Net revenue – from consolidated entities outside of Obligor Group
Total net revenue
Costs and expenses – external
Costs and expenses – to consolidated entities outside of Obligor Group
Total costs and expenses
Income from operations
Net income
Net income attributable to Obligor Group
Income from equity method investments, net (excluding impairment)
Critical Accounting 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, revenue and expenses and related disclosures. On an ongoing basis, we base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from those estimates, and any such differences could be material to our Consolidated Financial Statements.
For a summary 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 estimates 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 (i) local service agreements we have with the stations they own, (ii) Nexstar’s (excluding The CW) guarantee of the obligations incurred under Mission’s senior secured credit facility, (iii) 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 (iv) purchase options granted by each consolidated VIE which permit Nexstar to acquire the assets and assume the liabilities of all 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 2026 and 2034. 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 $7.4 billion, or 68.7%, of our total assets as of December 31, 2025. Intangible assets consist primarily of goodwill, indefinite-lived intangible assets (such as FCC licenses), and definite-lived intangible assets (such as network affiliation agreements).
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 replacement cost approach and other income, market or cost approaches.
The estimated fair value of an FCC license acquired in a business combination is calculated using a discounted projected 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) television 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.
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 the valuation of network affiliation agreements except 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 collective fair value of the FCC license and a network affiliation agreement. The excess of the estimated fair value in this model over the estimated value of an FCC license of an independent station under the Greenfield Method represents the estimated fair value of a network affiliation agreement.
Goodwill represents the excess of the purchase price of a business over the fair value of the net assets acquired.
Subsequent to acquisition, goodwill and FCC licenses are tested for impairment in the fourth quarter each year, or more frequently whenever events or changes in circumstances indicate that such assets might be impaired. 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 two digital business reporting units. The Company’s impairment review for FCC licenses is performed at the television station market level.
The Company first assesses the qualitative factors to determine the likelihood of goodwill and FCC licenses being impaired. The 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, the quantitative impairment test method is applied.
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 values, 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 definite-lived intangible assets and other long-lived assets to be held and used for impairment whenever events or circumstances indicate that their carrying amount may not be recoverable, relying on certain factors including operating results, business plans, economic projections and anticipated future cash flows. The carrying value of a long-lived asset or asset group is considered impaired when the projected future undiscounted cash flows to be generated from the asset or asset group over its remaining life, or primary asset’s life, plus any proceeds from the eventual disposition are less than its carrying value. The Company measures impairment based on the amount by which the carrying value exceeds the estimated fair value of the long-lived asset or asset group. The fair value is determined primarily by using the projected future cash flows discounted at a rate commensurate with the risk involved as well as market valuations.
In the fourth quarter of 2025, using the qualitative impairment test, the Company performed its annual impairment assessment on goodwill attributable to its aggregated television stations reporting unit and cable reporting unit. Based on the results of such qualitative impairment tests, the Company concluded that it was more likely than not that the reporting unit’s fair value would sufficiently exceed the related carrying amount.
With respect to goodwill allocated to a digital reporting unit, the Company elected to perform quantitative impairment tests due to recent performance and uncertain economic conditions. The Company’s assessment indicated that its fair value was less than its carrying amount, therefore the Company recorded a goodwill impairment of $14 million. We estimated the reporting unit’s fair value based on a valuation report prepared by a third-party valuation firm who used a combination of an income approach, which employs a discounted cash flow model, and a market approach, which based the valuation on earnings multiples of comparable publicly traded digital media businesses and market net revenue multiples of comparable digital media transactions. As of December 31, 2025, the remaining goodwill of this reporting unit was $31 million. The likelihood of a material impairment is mitigated by the reduced book value of remaining goodwill.
Our quantitative goodwill impairment tests are sensitive to changes in key assumptions used in our analysis. In our income approach models, if our projections of revenue growth rates and margins are not realized, if market factors outside of our control, such as increases in discount rates, occur, or if management’s expectations or plans change, including changes to a reporting unit’s long-term operating plans, the Company’s goodwill and other key assets could be impaired in the future. With respect to net revenue and earnings multiples, the key uncertainties are determining the reporting unit’s comparable public companies, comparable transactions and the selection of the market multiples.
The Company performed its annual impairment assessment on FCC licenses for each television station market using the qualitative impairment test. Based on the results of such qualitative impairment tests, the Company concluded that it was more likely than not that their fair values would sufficiently exceed the related carrying amount.
The Company also evaluated its definite-lived intangible assets and other long-lived assets as to whether events or changes in circumstances indicate that such assets may be impaired. Based on our estimate of undiscounted future pre-tax cash flows expected to result from the use and eventual disposition of these assets, the Company determined that the carrying amounts are recoverable. No other events or circumstances were noted in 2025 that would indicate impairment.
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. If the fair value of the investment is below the carrying value, an impairment charge is recorded.
During the fourth quarter of 2025, we identified indicators of OTTI related to our 31.3% equity investment in TV Food Network, including continued softness in the U.S. linear advertising market for entertainment cable networks, declining MVPD subscribers and demand for entertainment cable networks by viewers and distributors, ongoing shifts in consumer preferences toward streaming services and other digital products and additional market data from recent spin-offs involving cable networks. We estimated the fair value of the investment using a valuation prepared by an independent third‑party firm applying both income and market approaches. The income approach utilized a discounted cash flow model based on a five‑year projection period, a 9.25% discount rate, and a terminal value incorporating a long‑term cash flow growth rate of -3%. The market approach considered earnings multiples of comparable publicly traded businesses. Based on this analysis, we concluded that the fair value of our investment was below its carrying amount. As a result, we recorded a pre‑tax, non‑cash impairment charge of $381 million. The OTTI
was recorded in “Impairment of an equity method investment” in the Consolidated Statements of Operations in Part IV, Item 15(a) of this Annual Report on Form 10-K.
Fair value estimates related to our investment in TV Food Network are sensitive to changes in the key assumptions used. Under the income approach, our lack of control over TV Food Network introduces significant uncertainty in the projected operating results. If projected revenue or cash flows are not achieved due to changes in TV Food Network’s strategic or operational plans, if the projected long-term decline rate increases, or if external market forces such as increases in discount rates occur, the estimated fair value of our investment could decline further, potentially resulting in additional impairment charges. When applying market approaches, key uncertainties include the identification of appropriate comparable public companies, the lack of recent comparable market transactions, and the selection of market multiples.
Pension plans and other postretirement benefits
A determination of the liabilities and cost of Nexstar’s pension and other postretirement plans (“OPEB”) requires the use of assumptions. The actuarial assumptions used in the pension and postretirement reporting are reviewed annually with independent actuaries and are compared with external benchmarks, historical trends and Nexstar’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
As of December 31, 2025, the effective discount rate used for determining pension benefit obligations was 5.13%. During 2025, the assumptions utilized in determining net periodic benefit credit on our pension plans were (i) 5.82% to 6.59% expected rate of return on plan assets and (ii) 5.44% effective discount rates. As of December 31, 2025, our pension plans’ benefit obligations were $1.6 billion. For the year ended December 31, 2025, our pension plans’ net periodic benefit credit was $30 million. As of December 31, 2025, a 1% change in the discount rates would have the following effects (in millions):
1% Increase
1% Decrease
Projected impact on net periodic benefit credit
Projected impact on pension benefit obligations
For additional information on our pension and OPEB, see Note 10 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 MVPDs and vMVPDs for the retransmission of our broadcasts and the carriage of NewsNation. These revenues are generally earned based on a price per subscriber of the distributor within the retransmission or 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.
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.
The estimate of the Company’s tax liabilities relating to uncertain tax positions requires management to assess uncertainties and to make judgments about the application of complex tax laws and regulations. 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.
Item 7A. Quantitative and Qualitat ive Disclosures About Market Risk
Interest Rate Risk
The Company’s exposure to market risk for changes in interest rates relates primarily to its long-term debt obligations.
The term loan borrowings under the Company’s senior secured credit facilities bear interest at rates ranging from 5.20% to 6.20% as of December 31, 2025, which represent (i) the base rate, the SOFR plus (ii) a credit spread adjustment, and (iii) the applicable margin, as defined. Interest is payable in accordance with the credit agreements.
Based on the outstanding balances of the Company’s senior secured credit facilities (term loans and revolving loans) as of December 31, 2025, an increase in each of SOFR by 100 basis points would increase our annual interest expense and decrease our cash flow from operations by $36 million (excluding tax effects). A decrease in each of SOFR by 100 basis points would decrease our annual interest expense and increase our cash flow from operations by $36 million (excluding tax effects). Our 5.625% Notes due July 2027 and 4.75% Notes due November 2028 are fixed rate debt obligations and therefore are not exposed to market interest rate changes. As of December 31, 2025, the Company has no financial instruments in place to hedge against changes in the benchmark interest rates on its senior secured credit facilities.
Item 8. Financial Statemen ts 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.
