NXST - Earnings call transcript Q1 2018 | Nexstar Media Group, Inc.

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Operator

Good day, everyone and welcome to the Nexstar Media Group 2018 First Quarter Earnings Conference Call. Today's call is being recorded. At this time, I'd like to turn the call over to Mr. Joseph Jaffoni, Nexstar Investor Relations. Please go ahead, sir.

Joseph N. Jaffoni

you call. Nexstar thank first Group's and conference quarter morning, for Media joining XXXX Good to presentation the get questions-and-answers, We'll management's but as as first, your well I'll review Safe disclosure. and Harbor comments momentarily, results uncertainties and forward-looking may are of fact be the subject or and statements to meaning to statements other statements federal cause the risks, deemed historical comments conference in known may this implied All from call statements. and during different securities that than those of forward-looking future be other factors within made materially laws unknown and expressed the Important and those and factors expressed Exchange Commission. future filings specified cause from forward-looking risks, the other assumptions are statements that to could in in materially Securities other the differ Nexstar's results with turn CEO, Perry Nexstar call pleasure time, to over my host, Sook. and At this Founder, it's President the conference Chairman, to your ahead. go please Perry,

Perry A. Sook

results review us Thank XXXX first you, for all, Joseph, joining operating morning. and you, good Nexstar's record Thank everyone. this to morning, quarter

With financial the and localism, to operating integration continued our success review our we're and XXXX and growth, innovation of excited our results. commitment to initiatives

Our cycle other returns. initiatives return our drive reduction leverage and to growth cash and free flow ongoing the for of shareholder and outlook capital XXXX-XXXX activities,

quarter EBITDA exceeded Officer metrics revenue net and another As off financial this first record me morning. Nexstar, period adjusted Tom to for all is XXXX of with flow. across that an our always, marked free Chief on first Carter, the BCF, Financial as is with growth here the call expectations excellent cash quarter start

initiatives; political and of another Super to markets; key through ongoing from, advertising diversification; First advertising spending digital and quarter ability solid scale in revenue Olympic and benefited our growth. retransmission quarter results multi-platform Bowl revenue double-digit monetize our expanded and our

levels disciplines on about a we in free in of flow every advantage what reduction. advertising. free opportunities cash metric took that XX% amounted line several $XX through $XXX of quarter throughout mid-term are before focus net double-digit grow value which free million revenue be operations capital enhance with quarter. of initiatives, across flow repurchases, flow share flow, cash return dividend the the the And into brought dollar to with total growth debt first the will return of combined million line, over approximately transaction and managing expenses cash of of for in we translated quarter to our payments leverage our and shareholder anticipated With record and expense XX.X% XXXX to million spread Our top of increase reduction quarterly $X of cash political to

We and spending build key and growth Nexstar Jobs well Act. course expect to continued levels from factors as benefit growing flow free of recurring Tax benefit from the as of cash digital of results the enactment including as retransmission will XXXX mid-term and the over the revenue election Cuts

endured In the So XXXX-XXXX first quarter million that our high remain we've we that additional of can't while another of structure with and the repurchase remain company's volatility for shareholder annual dividend and enhance share this year target recent earlier fifth expansion our and to an continues cycle. highly of average Nation approved board our changes this repurchase confident are and a in first quarter regard anticipated remain record market consecutive at the $XXX following opportunistic authorization free I recently stress Nexstar shareholder in landscape ecosystem an actively we've In with concert annual only flow increase can for of capital we the in up very execute taking enhancing as to common media and $XXX of believe means in the million we return the A participating policies, capital actions value. managing level we our cash of repurchases stock, for in our on excess value. outstanding. focused the Class operating our enough our results meeting class activity,

absent returns X strategic times and net to additional additional activity the We the the discretionary mid-high capital to continue to decline range of Nexstar's end expect leverage, year. by

finances we continue we the on from items we assets, visibility the enhancement our and political significant the value. now profitable expected XXXX for value sheet targets the will growing highlights cash interest. long-term As an which go mid-term of to I'll quarter benefit in have continued of flow the operation free Tom consent agreements a of believe cycle balance near- excellent review our update spending, our our retransmission current forged meet to after clear of first other including digital path the through shareholder and and operating we and

First revenue. growth a quarter revenue X.X%, increased reflecting television increase and national local spot an in revenue in ad core X.X% X.X% spot

vehicle first increases. up the In aggressive While expected the was to dealers more incentives auto of high year, believe period. the this last quarter, to attributable prior-year pace record we is rate financing interest deployed terms versus primarily ahead move of inventory auto

in programs these seven was will XX gains the look at incentive and story with that up. moderates as we Overall, marketing impacted those While inventory moves to spending move seek support brands and same of year financing budgets, of on. you and categories and directly marketing the moderate Nexstar lease aggressive as our incremental five trends believe the nine when next the had top these

metric the over to of on core new to new marks offsetting and and approximately through X.X% approximately the share market. to as in revenue, XX.X% core ad markets development spot local reflect accounted Nexstar's and the new X.X% we increases across for from media first market year's total total, implementation in in $XX.X our still XXXX. a practices business ad continue of QX our advertisers address increase for QX These our sales with TV X% of QX which local an ad quarter focus quarter. sales revenue last first means see of of million, In television improvement national continue this We weaker the general proven building a efforts

outperformed we result, a our As believe core industry. the results

late interfaces to standardized for space keys television accelerate an Hearst industry the partners. available for and TIP which are advance TV continues released includes accelerating growth to advertising the focused local In on modern in system advertising To-date, Streamlining and effort selling is agency process and collaborative local broadcast future media space. interoperabilities. transaction interfaces which Initiative Tribune driving in making innovation framework has to the the updated formed their standard addition, broadcasters buying transaction transactions and the this Sinclair, TEGNA, electronic XXXX, and

agencies done, goal common alignment more promising. television more toward of for lot creating our there local be advertising and While broadcasters the is early a to of a most marketplace work is efficient

this ad had by a about XX% NBC compared the stations we supported year to With about the Bowl Super but game XX% XXXX on when year-over-year it revenue airing Fox, airing grew we fewer aired on basis. on

rise simulcast also a streaming revenue posted prior revenue. We the over inclusive XX.X% of in new Winter Olympics

events approximately quarter ability comparable and of performer leverage work we in over did job we first XXX.X% in and the custom election screens news best last demonstrated $X.X both Super revenue. which stations across our were to XXX the able as the across XXXX Winter solid coverage serve Olympic vignettes, streams markets was creating revenue drive Bowl increase our and local to a record political to supported all digital For a our again content million, the revenue ad for rose period our incremental ad was Political mid-term to revenue cycle. which

spot as result, inclusive increase political our television inventory management XX% advertising grew of ad political As more revenue. than five-fold year-over-year revenue Nexstar's strategies drove a in

spending reflecting political compared from early to category Notably, balance. in broadcasting candidate political prior commitment political, significant content made unwavering we By spending value of Nexstar's grew and issue spending, Illinois gubernatorial localism. the creation model, across realized from benefited first quarter in our the we television we and leveraging the the continued Texas while of XX PAC revenue revenue QX, capabilities our in up During XX% XX.X% excluding and about spending to our our operating progress year net states. QX booked and solid

reflects growth the rose scale revenue level well of quarter fee revenue to challenged quarterly increase XX.X% The the revenue for In revenue digital first record the Moving were retrans XX% first lines, our consistent XXXX sales the outpaced first providers acquisition with mix that expectations, continued MVPD see our respectively. $XXX.X General digital as digital as closing, Again, we first clauses embedded quarter in this the OTT potential remain ad as ongoing success And in our with across XX.X%. well agreements metric, revenue MVPDs period. for in acquired marking markets shift remains year. of this million industry. of somewhat quarter to to significant XXXX both advertising agreements consent revenue benefiting the XX.X% our target our distribution first to on down reflects our I initiatives XXXX. and our expanding tracking On net our guidance year OTT in after mix Media and we're also accretive we our synergies XX.X% over last $XXX all levels XXXX. of we and and already also at confident related of in our quarter and front and the national and the consistent has what and as revenue It with renewal across that retransmission and from levels expect revenue rose quarter markets subscriber contracts of that build January and political again our upside political non-television we levels local media was of prior year-over-year from with and reflects for are revenue and highest core million now add that diversify a our record north growth year. remain the and combined accounted of basis, believe the completed advertising retrans digital Together organic the profitable contribution of our expectations of will LKQD, operations. combined including as those revenue retransmission

growth Additionally, we of with our cash have solid our revenue free visibility consent targets. the its base, platform agreements ongoing or digital retransmission renewal exceeding of and on both our and delivering in flow

flow continue and XXXX over enhancement value. $XXX shareholder significant on for to that and in free value. of We the is to that of Nexstar's a focused shareholder activity average demonstrate see allocate cash other we we directed leverage quarterly And our growing excess remain share of as opportunistic reduction, enhancement support XXXX to on will to repurchases, that the we allocation million dividend intend capital actions and year

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

Thomas E. Carter

points I'll after Accounting update as of guidance. and balance provide the Standards statement accounting morning, income Nexstar's Perry everybody. data, new call, on with Thanks, X/X/XXXX some good guidance an structure start our revenue quarter's sheet capital issued effective last QX I'll Board. review start, the of on To by Financial and the company and noted a which adopted

the first well a This revenue beginning related national, release morning's quarter As comps of agency as of out company net digital provided result XXXX, as national, XXXX in net to digital also political, commission. to revenues revenues sales presents and commission. political their the local, local, adjusted the

call related plans credit XXXX-XX, Also, Standards be normal income adjusted income In expense operations. outside as the programming These cost barter post-retirement and company's addition, past don't impact Update we cash free other Accounting no of adopted number from for and X/X/XXXX, material. cash costs certain time net effective the of other income income, flow, longer well future or changes as recognize or from ex-political that which exchange than three the was company months from was advertising previously operations, net our were rose service the same-station barter the million X% Thus, to pension down X.X%. X%. and presented revenue EBITDA broadcast and to requires in pension flow. same-station increasing up credit up basis revenue post-retirement the the ended $X.X revenue for was Same-station with Same last and continuing $X.X on and as decreased all recent this previously, the during announced Nexstar retrans XX%. was, a LKQD previously million revenues same-station operations by Core of over corporate other expenses. acquisition with of was revenue X/XX/XXXX plans station again, up revenue digital X% on mid-teens advertising and

of network of expenses, fixed our of and non-cash and inclusive rose affiliation First was digital primarily comp and direct previous were as expenses to one-time million programming LKQD X.X% Same-station X.X% quarter budgeted trade expense costs the million ex-programming completion local expenses in SG&A of Media first well transactions. and quarter year. of $X.X respectively, expenses scale expense operations down expanded the XX.X% for transaction corporate over operating $XX.X $X.X station Nexstar's expenses the of and million the as expanded reflecting LKQD. and broadcasting General relating net expense, increases expense

project will Non-cash For stock million stock overhead cash to million XXXX $XX of of for for QX. compensation $XX corporate comp. exclusive the million the million issuance to recurring to quarter, new year $X awards and forecasted million in quarter million is we second approximately incentive $XX the be $XX equity reflecting to $X

our in some reclassified mentioned administrative plans and reflect corporate corporate non-operating them aforementioned call, of post-retirement pension the recur As the our in last XXXX, to for out will a reconciliation we but a and included moved to of as items, of million they accounting year. on with still to EBITDA quarterly other for digital treatment adoption is expenses standards which the are of and this remain update forward. the balance our $X.X expected The included definition going basis was financial of in expenses

Turning as was times. XXXX. net I'll key March to times leverage of versus lien the Total covenant X.XX review first a a balance and of few covenant leverage sheet, X.XX items X.X times XX, was

very the to good comprised going expectations and XX/XX revolver million of first structure the totaled increase well borrowings decrease us $XX prepay of year's General our believe with against of flows largely XXXX maturities reflecting $XX.X interest and our in term QX rate the penalties, about a that debt significant billion a feel $X.XX in of transaction the lien loans senior financing revolver First borrowings with the debt the cash million rising With in last forward. without capital to we the in up environment in from structure and loans lien of will first associated sub free LKQD flexibility acquisition. leading serve XXXX Media term a payments for

year-end returns additional for activity X/XX/XXXX, discretionary $X.XX close the me debt to range absent $X.XX We X amounted X/XX/XXXX XX/XX/XXXX. to and continue leverage, to MEG XXXX. decline the high expect $X.X times strategic at pardon on the at by of to billion Nexstar's to capital to transaction mid compared and billion Net billion

since approximately Media net million. amounts General total Our reduction debt transaction $XXX to the

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

further of approximately million. operating record us shareholder enabled approximately $XX million enhance to As million That includes first from million. amounted and through purchase consecutive of return total free action quarter dividend quarterly $XX reduction flow the and of in in $XX Perry of noted, XXst our value to amounting our million approximately paid cash our shares including results cash quarterly leverage to take to $XX.X capital stock which to $XX.X we XXX,XXX operations cash initiatives, Nexstar's

to million interest amount million to advertising $XX $XX million to the Technologies, expense of was minimal quarter XXXX. business LKQD funded cash acquisition digital technology, enterprise we cash expense addition, previous year's compared $XX amounted in and $XX million QX with of $XX.X QX first a interest compared the total In million of video, our borrowings. infrastructure in

for expect interest cash we continue an and As approximate cash in we XXXX. $X.X before million million. to QX to operating mentioned to had we XXXX we tax In of cash million of refund reiterate, compared $X.X QX, of taxes $XXX had expense

we largely million, the December, platform rate programming Tax quarter and $X.X federal of The reduced operations and the remaining taxes terms XXXX the timely to the continue digital station our the of at were Act $XX.X XX% was CapEx in as infrastructure, was costs, approximate of of was cash station to totaled with with relinquishment our which million from relinquishment Nexstar's in XX%. benefiting million costs CVR. the and the MEG investments, minimal Tax to income enactment Cuts Jobs expect Nexstar NOLs in the $XXX in and and related million. With repack for $XX.X for spectrum of tax to yearend associated Act spectrum

year, approximately million $XX coming continuing from operations For CapEx in to the entire approximate QX. expect $XX with we million

additional With of which reimbursements, mandated RAY dollars Act should the be repack costs the fully our BAUM an repack passage provides reimbursable. March billion in of FCC

we expect spent approximate included have and million. then XXXX, the Through repack the CapEx of $X.X million, in $X.X reflected For CapEx to statement. we in $XX is million, that income year, XX which amount March reimbursed is

We reimbursable of end will at year manage flow during this cash the flow any fully impact day. expect the item I to be to and cash as minimize expenses before those the mentioned

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

expectations compared free with quarter such cash consensus of was million flow favorably approximately million. recurring approximately first As the our $XXX $XXX

that believe of debt balance capital ideal fixed weighted attractive flexibility. and to continue and both than structure less prepayment of X% refinancing We of an represents and cost capital and our floating average

maturity ago, to have we at reduction. significant moment significant XXXX a towards with maturities noted expect a As debt no profile we'll staggered headway have until substantial which made point

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

on and before over concludes I'll Q&A. a review the financial are Perry $XX.XX for we the now flow cycle fully it turn for or $XXX back to closing remarks call approximately XXXX/XXXX some tax the for annual share guidance of free the such That cash basis. in reiterating per As approximately million,

Perry A. Sook

much, very in business structure cost In to continues Thanks to all and operational of synergy facets further and our Nexstar the realization, optimizing advertisers. of our improving including improvements, our continued capital Tom. closing, service and planning execute local additional viewers capital

the visibility Our our consistency of that as returns established supporting successful disciplines the control growing and shareholders. have variable forward cost the in strategies optimizing the these balance strengthened highly and growth results follow maintaining building the we going close for our sheet. while in areas strong prospects in terms line, fixed of and we've We're top our of confident

reporting forward behalf on the than you on your the employees on we growth support. the and and year thank With Nexstar for of more as X,XXX our your XXXX accomplishments and in goes morning continued interest of ongoing this Nation,

So now let's specific open interest. call of Q&A the to areas to your Operator? address

Operator

first from Thank our sir. Company. Kurnos question you. Benchmark with take Dan go ahead We'll Please

Dan L. Kurnos

results. Great, thanks. Good on morning. Congrats the

for on Just, I've that's de over about pretty topic the happen if are there an economics. spoken be kind consideration sort unit been be us and so you're likely update the don't of since that know of next in of you've space give start opportunity I know, about that months, ultimately let's Thanks. still the and appreciated? negotiations of OTT the the I to in in Maybe seems sort to leverage would the vocal color seeing terms you some sub-counts just trends so upcoming space. Perry, in a there potential XX jour,

Perry A. Sook

last we they've to took TV the all I'm we we launched all on of wanted as we time wanted, that first markets Friday. four so NBC and networks Friday. Well, announce that deal have now, YouTube the Obviously launched YouTube it in to get us last our launched happy Sure. the of for on but are that affiliates terms

up from of last one services. of again, as an sub-count YouTube So it's XX for what the be the point days and at we our or this for appears to reports XX by purveyors be probably won't larger All OTT important another to report step and running on probably but NBC day XX they days. lagged of TV days, sub all see in current

confident zero year is terms to of space, and it now addition off terms participate a deal there a after tell a quarters deliberate participate in so grow. until contribution real a will very XXXX subscriber period, again, and base few, going have so think roll free the wanted, that against We services we in real be. will we in of steady feel as we again, that a the that I will the the the And mid-six figure of fair forward state take number that OTT you with would the and we're dollars maybe were any coming sense couple would amount sub-count to I expect of we churn have this. what in a a continue OTT out. getting of we NBC, this But of I

revenue So source at company. all it for as this of and the another MVPD we plus view to revenue contributions our as look

Dan L. Kurnos

Great. probably ask Thanks. auto else of And let I'll just core the everyone I and questions. all think

political on just here. forward Perry, So going

$XXX You kind of above reiterated million. you're

kind imply think market. the of that strength I in you you see some

fall know the which this, any like So exact peers. any give of of performing to handicap some if number is sort markets we're but from it pacing, if from which sound other Thanks. another don't shifting many when going sense was of us to can timing there hearing And QX going if of you're doesn't to you of digital there is pressure on well, are QX? I from just kind political a

Perry A. Sook

up primary second Well, West and Tennessee last quarter the was if But of Indiana to-date night followed the Republican political Virginia highest West closely election a contributing across surprisingly by Pennsylvania. side. state follow footprint dollars look our and there the see Ohio we the Not in listen, you in Virginia is gubernatorial on House the news, we and about call the as would be XX those goes year the is least to representing will all we of said and geographies that being of be in are what those battleground the and competitions. races on. XX much this of at Obviously, half year, contested here and we of

as the we We of fairly XX approximately Senate half contested. XX far of And, races, As as contested. for being XX. them see of those being geographies are again, represent there

second So and the political finished month we quarter. building the we're a week. we on this in is literally than political point At after very have a revenue that's books – and more first quarter,

So or feel it's X.X first the slightly our year and is out our of above guidance of that months strongly north playing expectations year. we the the very million solid $XXX for at for

Dan L. Kurnos

Perry. you, Thank

Operator

you. now We'll from question next our take Riley with Thank Crockett Barton FBR. B.

Barton Crockett

Thanks little Okay. might I to talk I I pig kind that could a M&A you ask Sinclair. guys now for the taking now you we up environment lot in you question. wrapped kind in if were by had that. a little more the the bit a we've wondering just that seen of about big divestitures bit about wanted a because of and bit to was how noticed a python up I of guess of of kept And not see firmed and there process, deals openness what more of kind you little doing this maybe out if Sinclair? availability that kind be with

Perry A. Sook

figures. not. number weeks, walkaway last you of single Sinclair which Well, involved would of number conversations That's it two some the potentially nine everything, station looking high-single any any divestitures, have when millions and to in and are we I will some swap the from reported go we we're of consistent at the acquisitions any obviously appraise that companies, in walkaway with We're walk digit relates have tell our acquisitions. I practice above prices, say our our away. prices been to prices, with as we

I seeing at. pressing being lot It's screen a time. it's just just there's looked a need it. simple and – negotiated stock and things on not mean, a buying that's obviously enter and So contracts as to take be as

our rollout Media the XXXX. we I of rollout of conversations you the January saw think I A early of on General do pick expect acquisition acquisition moving cadence the the closed in As will up. mirroring of of from Sinclair-Tribune parts. lot

we on in particularly on national have later the agencies then the think the clarity additional late some perhaps clarity probably that provoke see you'll regulatory year will from this court others, the But inevitable increasing I regulatory cap, that think challenge. I on summer. and fronts

we think certainty, confident but our a certain that I relates think I I opportunities think now think national we're know and overhang in or there a removal and to feel forward point it of increase and talking sector, would current back opportunities a the the once we I don't I regulatory the So exposure. that have moving clarity certain ever in And to we the more environment, from in-market will that at Sinclair-Tribune have, we can the that closes, business business. doing an be relief about get merger of as

Barton Crockett

as then picture, really mean the ad money spent kind back just to Okay, idea that not yanked ad not auto any softness it's can cite to the stepping being great. And on your think environment, bigger that the on it's evidence I it's digital auto allocated away asserted a is is there just being and just I being to elsewhere from pocketed? TV being to been opposed of just media. Is support spent from that belief? that And TV so, if you TV

Thomas E. Carter

Jeep quarter that again, was from a first then those was down. Ford of total. was we the had huge lower most high-single saw Chrysler, Well, our auto in kind the Dodge, digit that But And prior in a The year. up amount against increase negative. comps down of from

on business company. like top are vice is so The do what almost that sit Busch quarter to the of going you're in on and the So up midst regional going over our other a our of XX top having in side a folks folks all detail dealers talk billing, XX auto the of and Jones about are X,XXX down Tim to television represent have Brian those of down. it's presidents and in and We with in those detailed are the great XX with marketplace. conversations dealers every category,

to sucking contributing the co-op incentives some cases associations. and I think away continued decline the factors of money support in shift is or marketing there local budgets think dealers is a One the in addition I from in dollars that

some that taken level, controlled is money as spot. that I think say out or have will factory increasingly cyclical OEM may money at be can I the well. so that being of local that

money we out back saw money shift they're Just of spot in shifting as spot, XXXX. the Ford into

here. in businesses think change with and auto in that. certainly flow with just think secular of auto of cyclicality or what's we're But with So to we a trend advertisers, come and I away is can see is very Again, and on categories. knowledge the is I I the do a one certain a there conversations ad-supported the those XX space. see don't going ebb auto secular I granular that top

Barton Crockett

helpful color. Thanks That's a Okay. lot.

Operator

now Thank Kyle you. with move to Evans on Stephens, Inc. We'll

Kyle Evans

to sorry Hey, but replay local, really to you again? core you something, going ask fast. national numbers same-store to Tom, were Can the do you have

Thomas E. Carter

Total acquisition core advertising net X%, digital same-station up same-station up total X%, and mid-teens, net ex-political percent. X.X%, Sure. down revenues same-station continuing up retrans increased X%, LKQD revenue the revenue up same-station XX-plus

Kyle Evans

little – Can Thank look what that a specifically? expectations. know you you. said like tell pacings line in Perry about what bit or pacings talk with I were Could you expectations us were your

Perry A. Sook

quarter? for Are talking about second you

Kyle Evans

Yes, sir.

Perry A. Sook

going to of quarter repeat be a first second quarter. think I is

of finished right first for the books, look have we April and them and I are they at compare on We top quarter, one April if month to one in another. where the percentages

bookings first to going see to it five our weeks obviously are a quarter of quarter, now sit we but and of increasing looks in political, lot us. an the terms cadence where we So into like right

Kyle Evans

XXXX for sub the the side on the you MVPD side thanks traditional us Got saw half like? of first and count for what the what equation. it. Can And XXXX looks tell you on OTT detail

Thomas E. Carter

were as haven't sub quarter, the numbers, MVPD in a quarter We virtual that MVPD from down increase MVPD completely quarter quarter. call, the much lack fourth we've sub I that result we've in mentioned And numbers traditional the a in And numbers, the been you there. fourth specific steady the with seen mitigated and third virtual QX. say the environment of saw lower a first more results loss traditional in numbers from was seen not but offset obviously has numbers, if of MVPD retrans removed that we given slightly would

Perry A. Sook

XX acceptable at of terms top a of was on the that to subscribers but MVPD repricing their the repriced very completed company repriced I'll a MVPD. majority the May And also a X. end negotiation Kyle, the that and subscribers were of some that mention, the to that year, we just their and with on done

Thomas E. Carter

growth our net both gross for rate, and with consistent And retrans indications retrans.

Kyle Evans

Can for segue. kind kind of retrans of net is outlook your remind Great long-term what us you and gross growth?

Thomas E. Carter

Well, Sure. to expect well trajectory growth grow net continue retrans double-digit a we at retrans? as the type for over as three-year period, same to gross

Kyle Evans

sir. you, Thank

Thomas E. Carter

finally YouTube Rock And Live to by going Kyle. KARK on be the to you're in get able Little now, way,

Kyle Evans

happy. My dad really is

Thomas E. Carter

for. here we're what That's

Kyle Evans

Thanks.

Operator

next you. our with now Fargo. Thank Ryvicker from take question We'll Marci Wells

Marci L. Ryvicker

that's sure down I'm was and Bowl, we to was that you last going includes auto that's make on flat? took Super it and you to the if flat had bug When you to sort want of core. that Thanks. I to expected And comparing what just be we're the Olympics quarter, and down core X% case, the X%?

Perry A. Sook

so be, was – network national about that Tampa, unwired overflow. we because the was Norfolk X%. affiliates, down in would you would owned down we needed participated And Columbus, and it think have level. operated our during basically year large organized which again say element Olympic the flat only is was station would Austin, break minus level would market and there group the materialize say that's this missing by X up, yielded way. this traditionally I make didn't what available That point, the inventory network be in goods for for is NBC I the the local inventory and X and at along from NBC at about networks network points, if times

that we between and So difference X% number than less and revenue flat millions the a that minus, that's would the probably slightly the only was reported that morning. be digit this mid-single element here

Marci L. Ryvicker

And flat when or X%? more you say to QX more trending trending QX, the similar like negative close like is to is it

Perry A. Sook

was trending think like I I more said QX. it

be minus So operative a I would say digit low-single would an term.

Marci L. Ryvicker

what underlying is up? cash of it Is the core Okay. expectation? $XXX million, guidance And excess then with flow your flat, down, in of free

Thomas E. Carter

Yeah.

For half, flat. second it's the

Marci L. Ryvicker

strategy expect years? And next other to you a has talk about margin over your lot little couple versus successful initiatives of then what more digital for today my question been last the contribution Can bit a of or peers. you, than you your

Thomas E. Carter

is that whole of and plus I the includes would a our a digital number. station now level XX% Right business website kind contribution margin as probably taken say digital from the at

digit just business to If digit a digital percentage. probably you high-single services low-double target that's the a closer to

those and Some businesses high-volume are of low-margin business.

local I level growing the very think trouble. with a those be think but from business business we business something period a high-growth what perspective. television over we're should And are good what believe at then single-digit and to Digital, you overall is the starting mid-to-high that time. be evaluate businesses But what Nexstar And about the double-digit high-single LKQD a the focused expect and from saw are. the we we teens margins if level, to service approximating not margins worth into something if low will the all and we at margins in of LLC website services time

Marci L. Ryvicker

Great. Thank you much. so

Operator

from take Janedis now question our We'll you. John Thank next with Jefferies.

John Janedis

broader Thanks. to the front. the you've your on advertising Yeah, given tended marketplace footprint, Parry, outperform

are much I grown, far in categories then So larger- a money new your difference the and smaller-sized higher? you you topic, And it's that that and a when of along there as in was performance on TV are about And a to as markets. couple are talk wondering you stand maybe of how between seeing driving contributors? out maybe of related terms

Perry A. Sook

now. and largest our affiliate team NBC our of Well, management is Tampa first all, right killing just our it traditional is in market, Tampa

Tampa markets and markets, size it's in and comparisons on good market but marketplaces. doing money those and job I jobs South available, Obviously, think small I market to like Fort management less you we fewer So make competitors and and locally Charleston, Arkansas. a Austin the Smith, Little smaller large all are in and down I do there Rock Carolina are generally Norfolk can don't in have teams even about and medium how any here. mean, good great

don't tell will that. don't literally revenue of I hit or his is you broadcast business I of you led development from all basis, give and in think quarterly can draw back on your byproduct commission think a any agency actually in you target by Tim Busch conclusion if and new So of being the there's the division business where your monthly a is structure you that change teams percentage commission new a revenue. I our

to So you're if money. you did do the same going you year thing make less as last

to results. uniformly first internal say, what our business here new across culture core will comes kind that think is which revenue includes our the that new So of from saw basis. we you driving that our target acquired the on recently I was people tell you business. three with new all I And in I would stations. an driving of we've introduced have annual platform the my business is develop comments. And within XX% also number is our reported that years quarter that of

So we goal, think I that's it than aspirational, achievable is it's that internal but is more an think achievable. I and think

John Janedis

Great. Thank you.

Operator

Thank take with our Capital. from Cooperman you. We'll question Cobalt Wayne now next

Wayne Manning Cooperman

Hey, guys.

now and on growing debt million numbers Why more mean low and great buy your trades sure that of won't the I'm the is and $XXX you're go be because the Just a I this back flow just each not stock a but two multiple. shares the of EBITDA up be cash years your to into question, next going flat. really leverage very at isn't will obviously free

really taking yield? debt curious capital a and kind free allocation advantage high Just cash targets, flow about of of

Thomas E. Carter

Sure.

a me. that behind structure. is in then obviously all here. on some But any and We're Let come stab Perry me can not at method there one to in our madness take

unlimited at. basket meaningful RP basket less is to when level becomes below not times. us we're leverage Our RP the The at leverage is X.XX

we're but debt first will of bought a there us of and XX-day benefit not in forward. just capital de-risking about to of us perspective in But fact only basis basically that was the a shareholder balance that but saw and that window also to it is you what also does from sheet that's we for And allocate a the and mindful going of XXX,XXX capital target share to as so quarter leverage opportunistic shares, require some on back we a shareholders a reduction, the of do repurchases return general. care allows amount do

and there's price buying on free behind and or yield down not measured share the an either logic it's for nothing back flow strategy acknowledge the a like and it There's some high all stock, we for approach to buying it or debt but think paying we So stock. we'd as are cash to that the back well.

Wayne Manning Cooperman

less given you to stock and to you'd was accordingly? – guess go do then is, I my and where repurchase question change deleverage Yeah, the more adjust

Thomas E. Carter

call opportunistic. it we why That's

Wayne Manning Cooperman

Okay. Thanks.

Operator

Thank Research. Barrington take next you. question our We'll now with Goss from Jim

James Charles Goss

Thanks.

immune enabling from do advertising, requirements needs? to that flow As level of the maintain increasingly agencies for the become cash free rating your the flexibility desired revenues leverage various your your indicate in use moderate greater variability of rating

Thomas E. Carter

I've a from what or business. process. like or we run they're never that that in does heard revenue, dynamic anything give changes leverage to it have terms the rating subscription-based agencies ratings the the – our They about to perspective fact changes not targets they regard but of say want much to specific with

model correct, business that they or think believe your I think our in necessarily more line considerations. has We we are rating that advertising leverage when not ratings I'm higher sure less I that of same for but is to into either cyclicality, that is or healthier. think questioning share of we materialized the that kind higher immune

James Charles Goss

you that in DBL scripted program working DBL Okay. One it's you're I aware I'm joining? that your interest sure TEGNA's other if or of ad was in own TEGNA's an of it's you of news a similar broadcasters other to with and potentially thought, to appealing have vehicles with create sort i.e., don't wondering know join I focused programming. to programming

Perry A. Sook

note the and we to our the will in skated the have will can but are do press see to in continue new core retransmission and we we're core to back written, advertising be time, think first we that territory to probably is and revenue a the I first that going larger we're our for the front I our earlier continue their you'll follow, to revenue offering company at release, trend real drive time only our than here in or point the whether growth is think company we but puck, space fee to not your think that drive, make statement diverge, industry so that value that fee this continuing to also a think want obviously for of as go going participate look in that though, page revenue, and you but in evaluating others if we Jim, making I I Yeah, Nexstar. is want be as first certainly I on also we're judgments and of think that to not this rates still and story retransmission that. as

James Charles Goss

Okay.

have you I be argument you. an thank think to made. And

Thomas E. Carter

disagree. don't We

Perry A. Sook

you. Thank

Operator

Thank you. We'll Lucas Company. hear now from Gabelli Barry with &

Barry L. Lucas

one start, housekeeping morning. of compare for would Thanks. And combined forma million question Tom, the against political year to pro XXXX good $XXX this just a what? target

Thomas E. Carter

$XXX million or slightly less.

Barry L. Lucas

do kind swaps trade noted are Okay. the outside are companies in since And issue involved the you think discussions ongoing, to that earlier anything in yet haven't and economic benefits Perry, swap terms fairly we seen already parties dollars, tape several the to Sinclair, deal? and I the think these on a you purview that are probably mentioned Tribune manifest. have of less whole of gross trades the Why but require of

Perry A. Sook

they're think of I think I that all factors, there's any situational. number

in find companies figure used more than one other what benefits million be multiple we we're activities a listen driving of And is and marketplace. perfect understand and/or by willing, the to stand $XX economic match (XX:XX) obviously distracted the pay cash exchange benefit we flow, to an going station in of Some ratio, flow $XX an out may somebody in has for to cash million for it's trading tough where now. so right got be

if stations other started of the or – I a are in discussions the situational there's literally conversations point. February, January all any I think this think more duopolies. any with just I somewhat it's mean and think than duopolized but at I early virtual broadcaster issue own out there don't we're process. May, it's think I it's part And gating

Barry L. Lucas

you. Thank

Operator

conference back to question-and-answer Thank turn or you. does to that remarks. today's conclude over closing the management session. And like I'd additional any for

Perry A. Sook

forward and interest for and XX joining you we and thank QX all Nexstar us in for afternoon. days. the Have a your Thank to great next reporting support you look in results today our continued

Operator

your Thank participation. for conference. you you. all conclude Thank does That today's

Nexstar Media (NXST) 9 May 182018 Q1 Earnings call transcript