NXST - Earnings call transcript Q3 2017 | Nexstar Media Group, Inc.

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Operator

Good day, everyone, and welcome to the Nexstar Media Group 2017 Third Quarter Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the call over to Mr. Joseph Jaffoni, Nexstar Investor Relations. Please go ahead.

Joseph N. Jaffoni

Cathy. Thanks, and conference joining call. everyone, XXXX Media you quarter third thank morning, Nexstar for Group's Good first Safe We'll momentarily, your but as to well review get management's as questions presentation and disclosure. Harbor and comments I'll the answers during All other conference may deemed than by fact call forward-looking historical this statements. statements of made and be comments management statements forward-looking are based projections events. future statements on and These about our current expectations

television acquired revenue, expressions synergies assumptions, cost occur. and that digital statements anticipates, Harbor events and this events include any and and factors, ability statements concerning In volatility forward-looking in on programming no information competition involve areas, regulations similar in and pricing and result those the statement, television communication Forward-looking risks businesses, of stations including a consolidation, subject in cash broadcast or The are could and to conditions industry local including contained whether broadcasting, regulatory developments revise future uncertainties discussed might this risks costs, expenses changes achievement national among the on economies, world markets, expects, and light successful new things, governmental national in Nexstar Litigation and guidance, and believes, for technological television forward-looking regional the forward-looking fluctuations of followed otherwise. flow claims the in or information, not actions preceded financial other Nexstar in operating XXXX. future various Securities and uncertainties words these future of operating of stations' obligation and events. communication include the reduction, change by advertising, the major update Safe performance, or to or and of refinance debt, news Act the the undertakes protection as integration in based contained For including statements, the from effects others of of our Reform statements important Private outstanding by, of service in impact forward-looking net to changes

place statements, as You undue of of not should on speak these this which release. the only reliance date forward-looking

For more Perry factors other that, these conference to Sook. the call turn Nexstar's SEC. filings it's with please affect on expectations, see the my Perry? With President could host, Chairman, your over that CEO, and pleasure details the Nexstar to

Perry A. Sook

operating the Media Joe, This the quarter expectations to our you, morning, about line, today political, robust third XXX.X% and good Nexstar, leverage I'd be the flow thank non-recurring million advertising our well PAC special of General in rise with XX.X% diversification current business our cost and expectations exceeded certain Chief political grow our excess model, Notwithstanding always, every a ongoing rising and a Alabama strong advertising increase the during scale stations Carter, spot demand in XXXX our this record we disciplines, in streams, Nexstar, metric in all the related record financial will rose opportunity, demand scale and that beginning cash the integration EBITDA operating generated third with stage again, on discuss our Utah and decline early as the to and offset combined And process, the exceeded third with elections spend. political XXXX quarter you which, and me consensus Officer, our capital free levels inventory XXX%, Reflecting in as return revenue as meet $XX as benefits net morning, is dollar of to driving markets in well and Thank growth, XX.X% results. in in as everyone. for Olympics. joining we the quarter and our to $XX expanded allocated cyclical for Summer Nexstar's of our brought continued will growth Tom and political NBC we and to decline here for of the the as flow. is results. morning. like BCF, revenue year-to-year of expected our to reduction reflected and for discuss cash related in Nexstar's net revenue Financial of revenue free us leverage activities, year-over-year operating XXXX quarter the of quarterly results in outlook management third return of to adjusted advertising. $X.XX million political our in

in Media results revenue the platform, anticipated and range success quarter third our operation. media September of cost integration to all $XX virtually the digital and our record year on we full portfolio. mark The General in ahead General remains properties Media the continued schedule acting in and of growth achieved and while opportunities realized synergies have through synergies extracting the of Our that first earmarked XX, broadcasting our were integration be million across of of into

further us capital third ongoing reduction activities, $XXX leverage approximately momentum return total, to financial and million. operating and quarter action to to amounted of the Our to our enhance in take enabled shareholder which, value in

about Nexstar operations $XX.X cash to During from $XX.X we've we cash million $XXX the share to and basic count million quarter, to from allocated reducing year-to-date, our repurchases repurchase XXX,XXX allocated of shares, operations of share million approximately alone.

paid that improvements term consistent and the quarter, loan this consecutive operating environment balances with by reduced each advertising Year-to-date Wall we've our forecast results core in provided QX. our year additional with extending into quarterly dividend the against Street our loan we in prepayments we $XX.X to fourth to-date. sequential We cash quarterly and and trends fourth quarter million borrowings XXth made quarter already remain to-date the also

return and flow pace XXXX/XXXX record year $XXX of prepare what and Nexstar cash revenue pro for As [XXXX/XXXX] of (sic) million during projected expect forma to (sic) free million the cash average cycle. we to million] we flow, be political approximately remains per XXXX, the in levels advertising free of on achieve [$XXX

the of of all operation meaningly company and Local his surpass advertising the our and levels all of to acquisition-related reach benefits toward retrans the political positioned broadcast television earning cash visibility and in assets, to are the next addition ecosphere, and flow year, within contractual year. local revenue that record powerful remains commanded the within platforms will In the free with audience XXXX media the that of we digital growth, profitable organic place cyclical most greatest share revenue we high growth be the market. have strong

agreements. is is reached And emerging voting quarter, unique unrivaled with in Nexstar ROI networks leading the with to television Furthermore, broadcast with advertisers value influence OTT political and solutions driven new and CBS local value for the provider marquee solid competitive our and satisfactory mutually these greatest in three the and As digital environment common brand relationships proposition. programming their reached an a network access campaigns. platforms of safe we the has on married various foundation is marketing news among and with agreement trusted of of most distribution of the participation national content locally-produced brand viewers, content goals purchasing medium OTT enduring networks with and Nexstar's during and services. for consumer unbeatable and the the four managers, offerings. agreements now third The to participate decisions, big

to initiatives agnostic Nexstar's programming monetize opportunity new to And which provided innovation the the the after revenue that do now was local OTT. our with our are of of our create leading and OTT on year. and earlier that viewed local our quarterly now finances, or to achieve we structure highlights, we the front, will new on agreements underway quick ATSC our we revenue success economics, stream, Tom each continue whether including appropriate Nexstar items are said of as over we for X.X update cap in our spectrum review retrans consistent we just portals, other prior established interest unique, which on As view. with by the and content this traditional call. through is calls an the a I'll consumers MSOs relatively news of digital our go With did streams Consortium,

with of all of some the all from our led operations, our Digital's combination in QX, of XX% at ongoing to size combined quarter full the growth solid back growth, Media acquired EBITDA. triple-digit sources. to revenue businesses, Looking achieve right strength non-political have General positive a that the to Nexstar's ensuring reflecting businesses legacy of digital initiatives our operations goal

revenue of national our For to diversify million $XXX given increased political in pacings were QX local scale current revenue Core rose QX $XXX some quarter impact the to inventory of sources and of pacing the ongoing revenue with with as in and XX% content year-over-year In our billings, core million and consistent leverage our combined our which well our in core year total, XX top uptick a rose four level. eight as the third On ad finished flat representing as QX. was of quarter hurricanes of basis, revenue with categories the the our quarter, advertising. the significantly offset period, local auto the in our strategies remained political XX% up. slight several from $XX.X of decline to largely the ago execution the quarter's million of top XXX%, solid allocation last revenue a environment, and in third categories net XXX% roughly markets with

XX% our odd-year political reported Media added ahead healthy in institute levels $X.X business was reflect General spending that the well through continue we over metric times of to three revenue which television third ad total growing with for X.X% million, sales during approximately $XX.X And new the as of levels we success higher core. was new and markets upside of core ad historical of revenue million growth our we quarter Our political comparable practices continues revenue period. XXXX transaction. in XXXX approximately or to QX the this to than local cycles, QX to Extending we Nexstar's of see

in will should continuing gross as that sequential will political, booking political this to It than core fourth compared the both of well the we grew better as expected on the each and core XXXX prior on revenue. in quarterly has revenue quarter strength see Excluding line improved the to-date a year. third and revenue quarter in indicate ad see noted XXX.X% pacing we as be basis quarter

operations reached our equaled digital rise million XXX.X% reached for digital combined quarter are highest in Nexstar to of operations, after retransmission $X that clauses also It the our to as revenue revenue third profitable the pacing forward. see in the trajectory by includes taken revenue a levels are digital solid of ensure acquired from year-over-year in close video that reflects our growth the the digital and ad prior going and the us The the These this XX.X% highlight over General synergies and history. retrans for digital retransmission the in year. as revenue quarterly all level quarterly and At is an XXXX our was in of quarter these for actions distributors to data results revenue. ad million revenue retransmission XX.X% expanded the can XXXX XXXX net quarter television increase growth revenue consent approximately well case. it revenue increase and late mix, markets XX% net to $XX.X the station a complemented subscribers. was new revenue level ongoing of highest operations levels, and marking in shift revenue, ever aforementioned XXXX QX Media net revenue, contributing fee on I'll and company's confirming mentioned, in positive zero of third respect virtually XXX-basis-point year, the give for in, our The reflects third I with retrans together $XXX.X third million this billion million With XXX.X% investors the revenue XX.X% add fee period. increase from this is our concern digital source multi-channel quarter profitable revenue revenue, sequential revenue growth that covering in program as related accounted just positive Our All of levels. in from the and quarter that operations. contracts basis XX points fee cause increase when continuing non-television when EBITDA agreements were that taken, of distribution retransmission that's mix the in subscriber to media of and accounted we've $XXX.X

dividends return that begin to to basis declared of what repurchases. will to XXXX, through capital XXXX, record we be an opportunistic our dividend our see through share be well annual and lower our leverage have shareholders in mid-term levels to of As advertising are we continuing positioned on political significantly expected been while in increasing first since

in turn end to end times X with net expect XXXX. XXXX times leverage lower will range We to or by full by the high more mid-X the range a of it and the

and Our for to continuing free accretive to regulatory Nexstar digital potential well and cash flow ownership highly positions broadcast transactions. M&A the generation as pursue also changes as select M&A

to let Tom? on Now, will Tom, turn who our me call the financials. over further detail provide

Thomas E. Carter

and morning, Perry, good I'll income of and balance an a points structure Nexstar's Thanks, review with guidance. everybody. sheet capital I'll update data, and some start QX which statement on after of our provide

seven months the of previously XXXX. million months the in $X.X presented and noted legacy station results assets of consistent morning's XX, this in from divestitures, three stations, three September digital the period transaction six our incurred transaction. inclusive Nexstar alluded Perry net as of September the we've were second the and merged Media and and release, Media XXXX, our company's plan divestitures, stations September ended with the expenses the broadcasting comparable unprofitable six any the legacy results one-time operations General and broadcasting digital impact of three-month of from the digital of assets. operations ended for ended closing digital platform. the Nexstar reflect simultaneously results divested to, Nexstar XX, million actual As of General-related XXXX, Media Nexstar Though, The quarter the actual reflects operations which the $XX.X General full QX or nine XX, company's with General Media reflect and certain disclosed to General Media net its discontinued of cull the the The previously station

the also national $XXX XXX.X%. net $XX.X to was revenue income up million, XXX% million, was previous up increasing was revenue with to Core XXX% revenue million. turning year's QX the Now XXX%, million, $XXX.X period. statement, up $XXX.X Local to revenue approximately up over

which revenue political As for Perry one-time quarter. was at million, adjusted basis $XX.X the Same million, previous revenue million and the mentioned, was and is million. flow was combined of Gross XX%. cash the the combined free after the basis, Retransmission XXX% same EBITDA were expenses net $XXX.X year again consistent digital were were these million, $XXX.X a and for cash quarter retrans revenues was stations, adjusted On million million off-cycle before were expenses fees XX% expenses rose was up prior and down $XXX.X up and $XXX.X EBITDA $X.X continuing million, Broadcast record a with digital flow divested $XXX.X political $XXX.X after the revenues and approximately before revenue, X.X%. same company XX%. up on pro forma station station X%. station excluding a same station was

it, think X.X%, And displacement, have a displacement, we last way on down year's provides was in the hope become but additional core up displacement actually would core Excluding non-returning general same XX% With the of XXXX, the revenue. X.X%. of to in QX impact strength some perspective this a basis I level about X.X% the from core about have we spot of up at been on of the would correctly and into it X%. level the Olympics, some station comparison. Olympics the impact no down XXXX of think pro-forma factored

pro respectively, programming. $XX.X of assets, Media expenses network operating corporate expenses of and expense than reflecting transaction expenses, costs, the in the corporate down network items, net actually expenses to comp non-cash local and direct were of forma of strategic in fixed operations Comparable SG&A was X.X%. station transaction other acquired and Third rose primarily affiliation million, excluding and million quarter of completion XXX.X% inclusive station million of $X.X increases lower XXX.X% Nexstar's expense quarter and activities. related $X.X trade of growth forecast. expanded the were General expenses third Net nicely these the affiliation digital

expect issuance the the expenses we the to QX in to quarter, with recurring continue $XX to as comp the $X the be to expected awards approximately are reflecting be this related and transaction to incentive for and million $XX are to to transaction million them million corporate to $XX million primarily $XX is expectations. inclusive severance, equity new of fees $X consistent and million cetera, of transaction approximately million For the year, approximately and million that expenses for year. overhead be be we cash of the $X MEG Non-cash forecasted XXXX, cannot compensation QX the et Cash for for million of I mentioned, success-oriented million. be and quarter $XX capitalized, stock the MEG $XX expected project expenses, quarter

leverage times. to term high of for as total September as the of as provide on ended the consisted September in approximately, as well lien something $XX billion including of in during approximately what versus the million leverage. the compared of X balance which was continue was the the sheet, debt XX September debt of review The debt I'll times $X.X the consideration, At outstanding at net an billion during with year-end QX the $XXX and in and as lien share X.XX debt items covenant net was first to-date. quarter. Nexstar's the had update three year when $XXX balance X.XX at and reduction transaction. repurchases. into debt leverage at payments quarter-end million sub-X we is January our notes, I'm as sorry, total versus course X/XX net with MEG And Turning be allocation cash guided first times higher X/XX/XXXX billion but the that, approximately we the on of which of quarter-end, and is on $X.XX Taking Total XX of a of X.X XXXX, capital loan, approaching million tranches covenant times, quarter, – on sheet, reduction key leverage totaled for billion XX, debt. closed quarter-end up $X.XX $X.X billion XX, we cash $X.XX as times, level

generating platform basis. opportunities a take to and which free to sufficient of both to shareholders us capital cash Our scheduled opportunistic flow, return on advantage enables is

which $XX.X of and of in at So will shares approximately quarter for approximately also in $XX by to a million average to price period built the the from million. in million share $XX.X year-to-date the per company second XX, common of stock A reducing In allocated in the well million of $XX term in cash dividends. operations incremental from repurchases total third loan $XX.XX QX, were we purchase to addition an cost borrowings million dividend. ended cash All September quarter shareholders repurchases we as repurchased the accrue share share amounts the this million million approximately flow in quarterly of told, Class returned approximately equity as operations. X.X use from through the XXXX, during to repurchases an the and shareholders cash reduction, $XX the All put funded form to the leverage and another of to $XXX in for has

shares programs, a $XX.X of Cash $XX.X best and cash million approximately leverage for share. is interest the our currently the was flow in remains in prior to said, expense strategy and positive million development, million it our put complements to QX buying to prices highest to to flow back As amounted compared while the clear compared $XX free and with for second interest our of at cash holders, boosting the our free one yielding going cash expense which no return with year. execution quarter Perry a on risk that quarter attractive Nexstar XXXX. us million our we're dividend $XX.X basis, XX% use to shares reduction total per

year-to-date the of associated balance QX, results annualized which the approximately annual facilities, loan structure credit free As approximately actively is an all we an term revolving basis. again, the interest million This early focus a of to with CapEx term secured we long-term spectrum-related capital and of drive expense, facility. a financial the senior in laser our growth news pace credit closed the such which our to the provide million, interest reduction local objectives. of on inclusive highlights million reminder, and as an senior $XX.X sale outstanding refinancing, in net million return the and infrastructure growth and to free increase on million, including quarter, June The activities. $XX $XXX in reduced Nexstar's facilities, of and station investments, in on approximately effect which largely in and refinancing $XX.X managing and B was XXXX the MEG $X line our our is year including rates and cash cash $XX Richmond loan flexibility of excluding our net on the flow flow capital for full of was with support related near CapEx guidance are any building, in million

As approximate CapEx will of XXXX, approximately such, QX -- $XX in million.

impact of Our free after $XXX.X before expenses. the QX million, was transaction of one-time million transaction expenses $X.X flow the approximately cash

we third amount our the for in of $XXX.X $X consensus operations quarter million expect quarter. cash free recurring refunds, approximately QX Operating approximately of during taxes, of to second cash and the million such, from a amounted compared As income net $XXX.X like flow million, XXXX. was expectation with quarter

balance Our average both proper attractive X% the with prepayment of cost less capital fixed in and an floating of represents weighted capital of than structure and flexibility. refinancing

maturities well point maturity addition, until significant we'll significant profile In have at substantial XXXX, reduction. have a we towards expect with headway no made we debt staggered which

during payment Transfer, Finally, to of rights – per General held Nexstar by former QX a CVR terms agreement, the Stock CVR the distribution was agent, notice with CVR QX during delivered Media American the to respect regard shareholders, and to CVR agreement the to August. for further was potential with made information at of CVR end of the any refer per the details additional holders CVR a payment. $X.XX to and Please

and of successfully Group approach close free of the line, we building on our will in fixed control will top structure. goals cash outlook for allow The flow and variable plan cash allowing executing significant and well that all pay the generating functions, operations, In take us including accretive and summary, selective support repurchase to it additional allocation, maintaining continue of capital to reduce deployed value. enhance Nexstar flow leverage, balance dividends, management's As costs Media our shareholder across focus free integrations, generation, synergy to optimizing our terms other growth, pursue relates and is the realization, service actions the local sheet while capital acquisitions, the shares structure Nexstar capital positive to communities. can

financial As free reiterating per The for cycle our such, in million the $XXX are approximately we or guidance approximately not into annual of account we increased $XX.XX cash any last our does guidance XXXX/XXXX it review share. share remarks flow annually factor $XX.XX since per turn for That before the some back for Q&A. call. I'll closing over quarter. now Perry additional share the to concludes repurchases,

Perry A. Sook

much, very Thanks Tom.

closing operational year-to-date the hard Nexstar's leading execution flow third three X,XXX perfect discussed assets. operations General million the approximately last $X.XX first near expanding the work the January. platform time, At and integration scale With of across to exhibited we And our from results the accretion per have or free our employees, driven cash record of share acquisition of more through the quarters. up $XXX.X quarter achieved our than Media a same that we've

and leverage XXXX year-to-date plan program proceeded approximately target this targets. and our reduction leverage XXXX in on on $XXX million has year we debt eliminated already for Our remain with

million, in funded $XXX for mentioned, operations. repurchased than from bought all less shares, as we a X.X little million a of year-to-date, cash total Additionally, from

reflecting share billion our earlier, As free I now over is flow cash the repurchases, said XXXX/XXXX $X.XX two approximately recent years. guide

rulemaking digital advertising in renewals, flow for the allow marketplace, evolving TV With highly FCC's new the pick-up and rightsizing to markets, rules proposed space. the shares an forward media the the by and realities X.X reflect large rules to proven local encouraged media looking year to proposal prospects proposed of growth regarding year local local the in industry the the political in new core, in outdated advancing XXXX. services. the the The full media we're broadcast captured affiliation the benefit retrans we're news FCC's XXXX the ownership our free and next-gen as equal the standards the Longer-term, ability of as well of important in this footing our modernize modernizing rulemaking continue to of of generation ownership an cash step ATSC takes FCC's on to assets enormous regulations compete in at rewriting of and our innovative

significant revenue, capital results, which announced standard. of prospects and Today's the a well TV, political FCC's be and programming the ATSC enhancement valuable, consistency and time, systems With be is all and prospects cases long-term be others in host the content, in our expectation me of of industry makes pending adoption new allocation, emergency new the in other the X.X for Sinclair, process financial the our soon the the spectrum-related next-gen same identifying as on critical At near opportunities XXst ability optimistic record some standards execution and of by localized broadcast support services. deregulation generate to as excellent bring possible created will in with industry as growth differentiated ever as made the Univision informative our XXXX capitalize will shareholder for the terms TV, Nexstar's by for and to and and consortium and cycle, value. the about rules our of opportunities to X.X Century ATSC able next-gen more consumers broadcasters ownership innovative to of for advanced local alert voluntary mobile

call Operator? you open Q&A this interest. areas of the the team, on you to to So, for in joining thank Nexstar company. morning. address entire And us of Thank behalf let's for your your specific the continued interest

Operator

question Yes, Caller, Aaron thank your Bank. open. you. from Deutsche And line we'll Watts take our is first with

Aaron L. Watts

Hello?

Thomas E. Carter

Hey, Aaron.

Aaron L. Watts

I pro sure Can that. a you plus X%? started X.X% were that quarter. the Hey, to to X.X%. basis about sorry again or advertising know understand Tom, you I the what minus want plus saying on forma about do I core with make in you walk

Thomas E. Carter

same Sure. in million in XXXX. Olympic revenue station $XX We had

positive becomes no that displacement If negative you add X.X% X.X%. XX% and assume the back,

Aaron L. Watts

it. Got

Thomas E. Carter

XX% the non-returning, And flavor X.X%. displacement, then was plus XX% negative if you you and picked plus go, of can than we that assume of X.X% becomes then your whatever because rather X%

Aaron L. Watts

Got Okay. it.

environment quarter that kind station to And the can into quarter? out feel there's visibility any And as some that still core in us into in fourth you I fourth the again and give going with policy so recognizing of is environment does XXXX, recognizing uncertainties think about political, the same the basis be how noisy on heading Washington?

Thomas E. Carter

if and broke but obviously below as Olympics of July answer the And QX, at year. prior September you it years. to down, prior relates will the just because at August, above was were quarter or way QX, Perry both look the

really, was digits low on view all say the was July, of up will networks during also and we that very basis. the were little I a ex-NBC So that mid-single And that up same-station noise there quarter. to

the kind really it QX. he August all around this does for this last QX Perry, on of So year quarter. of color pass some to or baton focus for I'll in give Olympics you and can

Perry A. Sook

year. mean, our of the month October best Aaron. Yeah, by I far was

that at pacing would is for the say XXXX was growth are political, ahead core quite revenue health itself attorneys are month prior of autos digits displacement the medical finished I forecast up, the of single-digit that biggest we the Our are of and care, home the XX core. prior that year. then, expected frankly of are by lottery, given top outside that's of if the double XX, the top the which And look I are ahead employment, in And basically year entertainment, double October quarter so pacing governmental insignificant digits ahead security, if political mid then prior from cable, look year other and year, given services, at as categories, the which repair, up, all are our margin. well. not home, half an estate of of I is insurance, categories up. real all pacing But up,

dollop of So the heavy over fourth into that very year. again, but quarter the what political we had odd anticipated. to with an momentum very, QX core I first early momentum to tell numbered even see the anticipated of we had carrying comps quarter XXXX think that of quite revenue, an in the about XXXX. And that's of frankly, obviously again And a year tend we it's is the in

this so continue. that optimistic I'm And momentum will

Thomas E. Carter

obviously of sit consistent and and Olympics political, you of sequentially the or I we've than in some prior from again the filter but think factoring back Olympics, through better is due say perspective some that noise has quarters it the our in every – XXXX, pretty be which year, was quarter feeling has from year. been line better QX better results to continues political than been the gotten of years, QX and producing that and factoring trend earlier throughout when prior XXXX, out I would try of whether And that And better. in

Perry A. Sook

element also a is performance There to this.

we core Our markets of XXX a markets, core our in on growth basis. have television approximately revenue audited which which a revenue do point two-thirds of business were approximately on shown X ad share year-to-date

impact sales too. So our are local teams and our having an managers local

Aaron L. Watts

Thank guys. you. color, Helpful

Operator

from question Riley next Barton Crockett our FBR. we'll with the And take B.

Barton Crockett

to the really negotiations. local and news there's an that? value is not belief if were I all retrans ability in in some network, I was not-too-distant one bit CBS for that are, black a you talk about last I be so belief seen was might Fox – up your about guessed, NBC negotiations in to in choose you have presence and that And the – you've done maybe there's a that could the around you've no a talk on would the investor affiliation and the but leave, a XXXX, net that broadcast retrans you on I and these is cycle, me, what think little from just go your are net of midst guys leverage I retrans, was is recently coming if bit think to in your to I and think is? So you And that discussion Thank as the renewal. that you wondering Okay. taking need value a And that we XXXX renewed talk little hang through excuse you I revenues question. the about could where interested if wondering white there point at future, think your also

Perry A. Sook

of a with in expire agreements handful affiliates the affiliation that conversation and of were are the now only XXXX that The and General NBC NBC Sure. on now. we're NBC Media end between affiliates that legacy

And agreements now so XXXX. of between expire that the those end are only affiliate the and

end some CBS of the at end. have We XXXX the but very

conversation And a the margin acceptable to when don't parties are is mutually Fox the second topic to I ABC. merge assured retrans view, that we've the largest for to want agreements. really us. and second just one continue Sinclair net any of productive, number with scenario conversations our we're affiliate the the not NBC largest about a So our talk of believe We're CBS, we'll of that done soon group, the Tribune three we NBC affiliate divorcing business with I and and be will largest maintain group, before destruction that's another, in consistent

with have margin we're exists a our at suffice our that on but and can That that affiliation future. we affiliate partners retrans with that engineered in to here, news both a company. agreements non-network a there the goal live agreements, been agreements way for again and into is XXX% revenue to again rate So such acceptable our terms renew material to it is retrans as producing is both say that partners but our the be partners network our in

Barton Crockett

sports like just the national about and the Papa could the other environment. question generally. I about very helpful. that wondering ad advertisers and That's level if some about environment kind of been you're Okay. local at the seeing if on of how anything was NFL, lot expressing with I advertising concerns focus feel one a There's you follow-up John's others. And

Perry A. Sook

other number I've as of we NFL to in Well, if whistle, spots an nine game, think, you kickoff mentioned the final from entire have count sell. local I on the to gets affiliate calls, the commercials

demand Cowboys of CBS out sold affiliates us, game So you the guarantee supply the that truly were is for issue. yesterday. all it I carrying a

tremendously not been inventory have game. So it's an the issue limited for in we to us because sell of

Barton Crockett

you. Okay. Great. Thank

Operator

with Dan take our Benchmark Company. We'll question next from Kurnos

Daniel L. Kurnos

thanks. Great,

terms in markets? you that's filtering I'm down the OTT markets? much money the in have been just a political. to or touch through Thanks. I'll on know talk for willing running of assuming if guys the penetration agreement, you the seeing if a aren't me. But what smaller just we disclose And don't most MVPD could I you're about yet. them XX. you're ask question Just getting couple of your CBS maybe OTT could of Perry, length, on But whether not into just

Perry A. Sook

Well, first in I'm our OTT report the of providers. the to OTT quarter, happy of third that subs we received report one from

So we do have will lag. subs, payment the probably

or of the the XX is think terms XX contract I days.

they are pay-on subs. So

modicum with that So much now paid seven agreements to depending for turn some with business there's flow opt-in an situation with and as network to ones into the we the CBS subs are networks inventory that besides once you the rights of the in a preservation of OTT they individual the OTT from revenue on real retrans to around terms of our were we The talk as Fox, over estate the of each and have with with are of you see negotiate in agreement which lot then so. providers, were then, And starting providers with rate of the different participation and terms network, with. will and time. a negotiate ABC and about negotiations want

it's by networks and so in of in that and with year-end pleased working statement matrix, see we'll get by have with participating subscriber on got that. to. we are year-end first fill the it quarter, we will all are and a those ultimately all a we're amounts But have and OTT squares the services of mind squares did to of our we a what agreements we the continue we it lot So of to third

Daniel L. Kurnos

Congratulations.

there? Let just just get that with you declines – into sort just into can follow-up could escalators give contracts and I you us just are on the that, me you built there negotiations, the Perry? those – of color about those how and sub – Are can talk any factored OTT

Perry A. Sook

some negotiate we on MVPD, case Well, the paid payment negotiate for we the back negotiate subscriber, of so provider, equitable with a we and then we the split we get entrants, of MVPD the and network the with us to then the to form network pays negotiates with in an – whether OTT or new network opt-in. the the

the subscriber, slightly in to between door. off, better provider anywhere OTT rather the or the are than if the We comes benign MVPD through door

just no escalators next again, we've year, XX% increase, so so on of agreements proxy think subs just a to retrans in that the negotiated we're that and yet year and I I our these escalators, look which OTT our that So for agreements, but MVPD, double-digit we'll are in said, escalators, we've are is through regular a XXX approximately little if does the for we less worse agreements than off double-digits world, the that so that's just did run the be and OTT count I this year, the at agreements, the if year and – just that's not as re-price way next next our with re-priced the revenue well.

Daniel L. Kurnos

a bit helpful. little Perry. don't time, That's super feel want – a guys to your number there you more not I become like out to that itching Thanks, if a throw more XXXX, I little break but know to were to a talk And it. about now you've last competitive. be political were races few way bit then, guys Got had for going also competitive with you granularity

sure us all of maybe point, So if I bit know political be want appreciate to – a record it. more give and granular about you sort starting you little we'd I'm could a talked you if

Perry A. Sook

XXXX. this platform that if was look a divestitures, Well, slightly stations actually current what it Sure. was less million generated, – the number XXXX under you at for $XXX

is we're that ahead. $XXX expectations about so at now if just I our tell. is political our ever will geography ahead internal to and slightly given terms of million, to a So time above fourth willing number our XXXX, look in third quarter of you XX% tell quarter and that can you targets political finished guide our

control don't we again, share we start million upside, bad of on number think the of a compete we not money. bias the are those around flow XXXX. to is of but So I because $XXX for just I think cautious those But the for about place money, walking is a

Daniel L. Kurnos

Perry. Thanks, Got it. Great.

Operator

from Wells our Fargo. Marci take we'll next And Ryvicker question with

Marci L. Ryvicker

more across big picture. the a more Thanks. or Perry, you something comment. assets within Are your be digital gaining shutting your country, or creating are Media markets opening bigger a in the more the scale – And the I is second really you want to go view on so General scale of you What context I don't question at benefit, remarks. by then, back coverage to understand to underperforming? mentioned down do digital duopolies? others increasing gaining

Perry A. Sook

third that I we have and Dedicated been so digital, Sure. completed shuttered Media's On have public we in in the Dedicated will brands with done tail-off different we we having with have Media the saying quarter, think have Federated rather is now that wind-down half into a remaining assets Media. be products. of there, results. than those out the digital dozen three What consolidated was companies

there additional improve profitability. infrastructures is to And not there, the seven helps some consolidation separate so that and that for companies we're maintaining

sell we need through other and And sell that and your complete say, the for as we We're publishers Nexstar profitability CapEx making exercise would investments point, the our technology we services kind now own. second with to well assets and I the part provide critical this out the question, have we is large to in improve consolidation we that to services house currently of the of too. I of So those as Marci. house. of the that by platforms, at serve out But mass forgot

Thomas E. Carter

or... scale National

Perry A. Sook

are tell both I each Oh, is much I that evaluate same national screen, you of we that you well, it will how scale through think I that accretive. versus accretive, the important. tell will – piece

our drive think markets. economic benefit in-market an consolidation, station more we of or today in second I a that two-thirds where from

how know that. do we to So

execution been already playbook you're since the boots because the have it already that running mitigated, We and XXXX. somewhat ground. is you And have on have in the risk markets,

XX% we're build an and discount just scale under UHF including that's important at, way the XX% the to continuing cap. – So shy,

accretive opportunities. acquisition stations that the So we Again, growth of grow. to have if potential is profile and headway have fits our

So I one wouldn't versus other. say the

within and now. in markets right real add evaluating are opportunities stations We to add markets time

Marci L. Ryvicker

Thank Okay. you.

Operator

next Evans We'll take Kyle our with from Stephens. question

Kyle Evans

follow-up Hi. you products? follow-ons. I've give some question. updated got digital thoughts to Thanks. then legacy just us the Nexstar And digital on Could A

Perry A. Sook

that what we which of Scripps, the Sure. platform are is the to mobile well FOX and have our TEGNA, services websites is CMS taken Well, we as opportunity. to have video plumbing is we And for revenue making in broadcasters. that the the investments websites now provider, our mine as allow which particularly LAKANA, other drives and for O&O, ancillary

LIN video. Mass², So and that's of legacy a combined the which programmatic under one those of lot a that's a Digital tenet of assets Yashi the is company Kixer platform. and called of We've and services, kinds provides kind product, digital really that

the And in a called and space, a social SEO, have using HYFN, then Facebook both they that. company basically social media are customer primary social which Inventory. is buying and and agency, Some things like SEM media we

growth high we business, in our serving what capital, they accretive And think Greg ad-tech kind of Raifman, are and of competes point business extent. for the And the look three would to Again, to for and pillars through President a at is also in of there opportunity which Busch, say as so SMBs. we they are with Broadcasting the build interesting a the tremendous President capital same business And I along Digital upon are businesses Tim those forward, there screens, the are ad-tech, are businesses. potentials. certain we building opportunities the are this compete we

sales has approximately of XX,XXX on call X,XXX country. the people SMBs of we in in and company XX% excess Our

the call think digital both opportunity a to complete concierge television we your working almost of with a So your and for provide and services you're local suite not and a center.

are a with have problem, and in that for there you as you up So if deal somebody We acquisitions it well. space directly. call smart think opportunities can

Kyle Evans

General. in Any learned? cost that there any mentioned Media of lessons $XX you've looking essentially you new thoughts all back And million or from Great. synergies the recognized

Thomas E. Carter

stay ask tuned. you would to I

about March or February the On going conference forward. call, we'll performance talk

Kyle Evans

for different cause late your little a week. of be you. mentioned your you granular sub one than little counts any sub you last peers count not concern, your bit you one, Last more giving a were about Thank Okay. that so Could trends?

Thomas E. Carter

It Well, nominally. retrans third retrans versus the you second up revenue. to was I would quarter revenue point quarter the

largely escalators biggest the I implemented should changed revenue. way, driver retrans that at any the due you is think counts haven't to a meaningful assume were that the which of clearly, sub few is but, mid-year in

Kyle Evans

Thank you.

Operator

from we'll Markets. next And with Kulp our Leo take Capital RBC question

Leo Kulp

good morning. Hi,

renewal percentage ones. think growth? MVPD your how then, couple And net us quick over what should years? of Just given the tax remind it's XXXX early, free one thinking are two starting year? a second about about to next we the next the up be And for retrans guide, I subscribers you'll of Can is, then XXXX, the full are relative that current you how but you cash guide payer know

Thomas E. Carter

conference question gun answer going – jump that. first, last February, the which tuned where take we'll same I'm not to run I'll is give XXXX guidance. XXXX, call, Kyle's the question. Stay for to March

were – Specifically as it sorry. other what your questions? I'm

was The first the... one of

Leo Kulp

Retrans.

Thomas E. Carter

retrans, this have end net our than at of of we the year. ... up of XX% subscribers less

that XXXX, to effective the growth Leo, modest this with I'll changed. escalators year, continues as to So numbers comments relatively XXXX, be the regard it's to not retrans, regard to haven't point you And our was with from which amount, Perry's double-digit substantial XXXX top but net It three-year a again a perspective. both it CAGR, in be numbers. double-digit be highest that up the will the XXXX XXXX, three on will but will Acknowledging both for three-year and growth of back net retrans cycle. XXXX, be line years, from probably will be lowest and the XXXX

Leo Kulp

it. Tom. Thanks, Got

Operator

next our Gabelli Barry with take Company. will & We Lucas question from

Barry L. Lucas

Thanks. Great.

can't you the us XXXX? in will to of give if could you sense a so what cash XXXX, on for rate Tom, tax two. think you free your be speak Just guide, cash

Thomas E. Carter

Well, XXXX, we've already given it.

what someone prepared guidance rate to XXXX income. was but a asking tax XXXX was cash be and yet, pre-tax XXXX, I'm of do think XX% not XXXX I somewhere will approximating

Barry L. Lucas

Great.

Perry A. Sook

Unless, change of in tax is rate. statutory there course, a the

Thomas E. Carter

That's true.

Barry L. Lucas

Right.

don't I want And Okay. a...

Thomas E. Carter

degree left it that nearly the NOLs not we XXXX, over but XXXX. Basically, to to benefited some will benefit have

Barry L. Lucas

for don't host core pacings various quarter all threw a in I sort of out you've sounded and them digits. Perry, of fourth carp, to And the of and at up mid-single categories got want Great. you nearly be the double-digit a

of in or digits bit more what's and be why better? weak So optimistic little core wouldn't high-single a you terms

Perry A. Sook

take you the were that I are – think in furniture, fast out on the I would up pacing more that you and mid-single environment, the this behind XX, three reported digits. retail are I'll tell is program categories top foods, the of infomercials, see. the and which I one so which paid

have up, XX of schools is of are down, to that is think the X telecom down, down, So once have the are stores that pacings Friday flat for mirror but the that of in get this grocery increased. history pacing the quarter, for of about now it would it behind. be quarter, have X slightly our the and Outside rearview now I the again, we're and or political increased pacings point drug weeks in seeing saw XX top last the seven top eight we and seen

– November that are that's in both ahead behind pacing any digits of history. the – in displacement pleased December without I'm So and year mid-single and real political prior the

said, growth year October that first So core in quite double-digit again, the some time. seen that's prior was, we've I and as over in revenue time and

Barry L. Lucas

Great. Perry. Thanks that, for

Operator

like I'd or at conference closing for It back remarks. to time. the turn questions appears your host this there to are any no additional further

Perry A. Sook

and took or Texas Thank our deal departments that sharing together coverage wake information of excess disaster the that quarter, to the whether tell companies lot of more that then communities. news shootings stations yeoman's together, the million did donations you damage, but will it the place rest shootings the Texas I all in of California the it – of Nexstar the And and in journalists information our and had weekend, our the the South cash local only the of and me a with in and with for particularly the in in joining wake staffs over in markets those in support employees proud those supplies I us local Harvey to Nation. you raised other and Texas, relief $XX.X be reminded of or and those our of security our in those Nexstar Hurricane not communities, came hurricanes Irma Florida came our Nation. efforts, folks – Las was providing and could Hurricane not in the Florida, rebuilding the and of efforts wildfires, for in in-kind safety to work And Vegas the for

So you XXXX with Thanks free to back well and and our that as us. postscript, flow, to be joining the you cash for for much early XXXX. refresh in XXXX we'll give on QX you for finish as XXXX, We'll of outlook very talk soon. updates joining to us thank our

Operator

That participation. concludes your today's conference. you Thank for

may You disconnect. now

Nexstar Media (NXST) 6 Nov 172017 Q3 Earnings call transcript