Earnings call transcript Q4 2022

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Operator

Good day, and welcome to Nexstar Media Group Fourth Quarter and Full-Year 2022 Conference Call. Today's call is being recorded. And now I would like to turn the conference over to Joe Jaffoni, Investor Relations. Please go ahead, sir.

Joseph Jaffoni

Thanks, Priscilla, and good morning, everyone. safe call. and the right we'll read the into first harbor then language, get I'll and made may statements Securities than statements All comments purposes Litigation statements call, today's for XXXX. of other Reform conference Act historical the fact of be of forward-looking by deemed Private management during are call. these forward-looking from and those by to the uncertainties to that Nexstar cautions subject results materially that may made differ this during statements forward-looking statements risks cause actual reflected

uncertainties, and December please Nexstar's additional future a as filed any details filings risks For SEC. undertakes for new Commission ended of these on result with report year with Exchange Nexstar revise XX-K forward-looking public no XX, see statements, or Form Nexstar and on events information, otherwise. annual as subsequent obligation whether and the or the to the Securities XXXX, update

it's With your and Nexstar Chairman now to over ahead. conference pleasure Sook. go to that, turn host, please Perry my CEO, the Perry,

Perry Sook

and Thank appreciate fourth financial good discuss you results. quarter and you, outstanding to today morning, Nexstar's Joe, us full-year joining We everyone.

call with Ann morning always, CFO. Gliha, the and President this Operating on me our our are Tom Lee and Chief As Carter, Officer;

of followed and then and recent a That will the developments. call be open we'll with start Ann's financial I'll you. from by summary review operations and Tom's highlights Lee review, for questions

the and attributable $X.X delivered cash billion the highs. all-time the record model adjusted $X.X company's of new scale broadcast a revenue, of of annual was at EBITDA Nexstar It's history, levels reached exceeded cash the referendum we flow cash its deliver in XXXX free the revenue flow our monumental and respectively. Full-year year for free milestone time for attributable clear billion, power that $X first net strong results billion from and free EBITDA, a ability adjusted and on flow. audiences and and to We

as distribution billion of approximately in revenue. well flow year-over-year enabled free $X.XX as Overall, return top attributable was form well share to as led strong free XXXX by a or the cash advertising, performance full-year shareholders dividends. flow political in repurchases our XX% Double-digit our attributable our line revenue growth growth as to of cash of record and bottom us digital

to that of achieved number us enabling continue of year from financial Nexstar. that posting the for flows while another accomplishments addition growth investors and delivering to positioning come In operational blockbuster Nexstar our have expect cash shareholder a financial results, returns strategic are and performance, future company to

the our the to side, contributing consideration, CW strategic broadcast adding asset capable purchase and platform the company. to in that national NewsNation On will we be ATSC network a interest in long-term outsized X.X of for XX% a no to acquired portfolio, another addition growth

favorable successfully growth in largest ABC on MVPD agreement terms to Nexstar we renewed our and annual will Operationally, and affiliation in on enable network the the quarter, extended and for partners with terms agreements distribution enjoy distribution renewed company, the extended fourth continued we revenue foreseeable to future. with our that

television broadcast renewals at on that owners Today, content scale. sports team execute place creators, just these importantly, organizations, already reinforces most we broadcast the to remains to know ability what matters. audiences local advertisers only access Our for and

fan for content. important over and these local for and reach local sports sports at decades especially and brands. markets both medium consistently We providing other news, by can, We're base, audiences no is content. developed have top-rated entertainment that the nationally We provide advertisers accessing

provides brands, highly local broadcast than owner any content for provides MVPD media the a scale other assets partners, a important an which As local broadcast both differentiated us partners owners negotiating broadcaster, other turn, In to reach networks, national and portfolio advertisers, network in is par fragmented and nationwide combined Nexstar of largest creating position. very our marketplace. at strong network now local value greater with with our activation with on a our and increasingly proposition attractive

and continue shareholder deliver capabilities monetization, expand We levels to streaming growth assets linear, new new in returns. leverage our of our digital, and and ways to mobile

excellent generate to scale, of our consistently returns underscores our and ability operating unique record shareholder Our results the of ability cash and free our strength benefits to substantial generate model the flow.

in through and of XXXX, in our a shareholders our to was flow and testament all stocks shareholder to free is and capital Lion's seen true share Nexstar ability competitors come suddenly to that one in the continue broadcast was revenue a return of effective media we've to four generation, And broadcast of streams. of we create entertainment with from take lot believe and only up tried profitable their which and that of our value ability industry to media. our our notice assets the cash grow revenue media remembering profit

United with to I call few growth Before clients' local and Starting over Nexstar broadcast, on has under advertising want to using updates to national go-to-market core objectives. our by ability the Tom, we improve platform strong strategies data-driven of our core with Nexstar unparalleled handing One advertising our organic the to portfolio strategies prospects. briefly the on our touch a uniting that believe achieve our

for and executive, Michael new EVP of To platform leading which market for position the to local the that the the is double Revenue created experienced go-to-market opportunity end, accelerate is of which has the with have a advertising strategy responsible our and Nexstar to national of predominantly we and historically. recently Strober that a sales sales the appointed advertising size Chief Officer roughly on company, execution designed served focus monetization newly advertising the of advertising

XX cable New Washington, additions we and per expanded network. expansions significant fastest-growing building news City facility hours weekday programming Second, made America's make to and This out we key D.C. to news past and NewsNation, production journalists in day, completing York progress year, both in are continue editorial

viewers was the results only providing in NewsNation news total While cable our as is still double-digit see early, unbiased to strategy America already news XXXX. all network of growth in for delivering

be to want audiences continues for Group by we to Our that type watch. and its recognized this and to believe the Dog is report Watch journalists programming of content independence, want

attract on ratings, to to view. make that NewsNation's reinforces Our highest-rated January with top-tier ability only XXXX, marking date, talent good all month and progress

Third, the to a but the advertising to the of already At instrumental a Nexstar network to ago. with making are to see the I just for discussed opportunity only ability we we moment result as not create bring unlock entire national profitability CW, enterprise progress CW value to the our the as the Nexstar acquisition. level,

impact LIV already broadcast most broadcast the that our those the action we'll And with in are on rights events through air programming agreement our events Friday, improve the the paid exclusive season, CW audiences the recent 'XX, the Beginning and positively distribution we've season, CW last LIV the CW and discussions investment to effectively CW diversify our stream live the the taken that front, in with of off negotiations, At global our for Golf the which multiyear XX content with for align our ownership better locked Golf. an will app. of amount programming network. to make kicked 'XX on outcomes and we into already renewal level, while by

results POP execute redundant and the to for executives our at on and and functions distribution also backgrounds new top-tier Google and network, our hired have Universal, expect TV we've begun strategies. driven vision are to our to continue at and our profitability Fox, with network professionals who savings share by excitement to We by HBO, These lead the achieve XXXX. programming plan cost reducing NBC we

Discussions the signals total industry end of could the this the ongoing, Nexstar service have U.S. deployment revenue applications X.X with markets continues our households, continue business populations of reaching U.S. year. with of our this rival a our TV NextGen in of for XX% are to of to revenues potential lead approximately believe end goal with this technology ATSC Finally, and XX% X.X retransmission partners we using the spectrum or opportunity via by and of and ATSC decade. the the we by reaching stations for

our the Nexstar's our our cash by position. per the substantially remain our on per annual of our exceeding the capital enhancing financial increased historical we summary, January, XX% rate of Board shareholder focus priorities $X.XX with share quarterly of Consistent growth allocation in compound in dividend quarter, In dividend quality and strength and to confident assets Directors value, of strategy, XX%.

and increase allows strong to cash enables only in value. debt the pursue capital Our strategic opportunistically well enhance of shareholder reduce to other return to as opportunities shares us the us also to shareholders percentage to but repurchase not free flow of as dividends further continue form

distribution contract during year, this from cycle from distribution our Looking at of renegotiation year. end the advertising the ahead, and of than XXXX the election more as XXXX contracts, half as well additional representing benefit political subscribers will benefit XXXX will Presidential of renewals our

generate call inclusive for of related our cash review. 'XX me attributable of to pro let billion, that to to Carter average turn tax forma our $XX turnaround and million associated flow cycle, said, over For With attributable investment the losses the approximate benefits of 'XX, we annual all to $X.XX CW. of the the Tom? expect approximately free Tom now operational the

Tom Carter

primarily with another all-time prior-year generated offset of the decline the operating of revenue quarter revenue strong result a and by the results as quarter Net of everyone. national performance CW, $X.XX increased billion. market quarter morning, strong Perry, good high of advertising inclusion primarily XX.X% quarter our the to fourth from softness. Thanks, political due We as core well partially from for a net advertising in results

of up Excluding was the revenue net the XX.X%. CW, results

Core year-over-year. television advertising X.X% decreased

driven television rates for of of the CW, our displacement. primarily national XX% Excluding revenues political impact and ad which of advertising the double-digit advertising, was approximately core decline by inventory approximately down X.X%, in core accounts spot

of which the our X% continues the declining approximately core revenue, advertising during national political allocations to ad represents TV towards excluding year-over-year meaningfully local CW outperform despite revenues, significant XX% inventory just TV Nexstar's quarter. total

economic to advertisers more the historical levels trends continues spending be ad line This maintain throughout of with local cycles. consistent with in

fourth So category. far this of in similar to results with in saw QX we the quarter we're seeing what revenue 'XX,

our of its categories manufacturing, entertainment, heating. the were advertising spent, our conditioning quarter, paid repair trajectory impact largest air growth QX and in the maintain terms programming of second increasing for the CW, home see Excluding extremely the auto, quarter over top-performing pleased We're in consecutive 'XX. and XX.X% and of to automotive, dollars category

deliver the of sales our displacement. healthy continue political local prior-year sales generating program incentive levels In million, to flat new despite Nexstar's advertising of teams $XX with business new revenue initiatives local significant addition, to

TV, the core the issues movement local betting, The related newspapers. of advertising market industry-specific the to radio, primarily softness were for category sports gaming, is response, and medical primarily cable, to The revenue from market. and the was insurers direct responsible care health decline category some insurance insurance, national

was a care Care health impacted Direct dollars the due more betting response be gaming advertising state sports larger by versus largest The funds betting of prior-year. marketing by marketing established trends medical by to the to network spending reduced the decline year-over-year sports to national market impacted the Affordable continues experienced weaker fewer and general in and in quarter, and category Act reduced markets. operators movement advertising launches

clip. betting impacted in see legalized for time modest in the California. sports Ohio Category two spending The bright companies in In quarter category, sports fourth and propositions albeit in Missouri addition, automotive declining was we continue these reversal the Despite in which spending categories. 'XX. to 'XX, of to see a dollars to now at total was ramp-up a when online betting was of by advertising voter Kansas, of we Kansas was spots and as came redirected driven at expect City advertising included a gaming sports sports this trends, September more in to television where legalize legalized performance of betting betting beginning and advertising gambling

of fourth Turning just $XXX.X Presidential up our comp. political XXXX, quarter million, election advertising. XXXX advertising of impressive to an revenue million year forma shy to Nexstar political pro the the generated full-year XX% political $XXX.X results over propelling and of midterm X% last

more the television California. in in billion of betting over XX% by X% XXXX advertising compared generated media record over XX% driven sports Local and broadcasting spend races XXXX. up a election, a large total in propositions more record XXXX, amount on to all growth was political representing for total According up a gross Kantar, in gross significantly ad competitive in XXXX of $X.X in XXXX, midterm dollars, the impact to part capturing political than

limit representing a versus TV regulated XX% for standard digital. on other which political local can a political TV has ad particularly advertisers together of impressive fixed cable the local with continues since offer to funds Canada-specific be gross gold TV media a This is is inventory TV the and and of amount pricing, spending. like

television the Moreover, versus is choice that as with political used in prior-years. messaging the local television it fundraising line of branding. XX.X% of medium should total for captured noted for the be Nexstar preferred political dollars spending is digital primarily

Pack our scale these majority and fact in from dollars regulatory is political political player advertisers and race stations on advertising limit accounted is for there important race and an is This like can season we to these XX% have a markets. pricing as shift competitive political a since quickly benefits substantial revenue. no Nexstar the of progresses of for

distributed addition, election distributed debates, NewsNation. state Pennsylvania nearly via because gubernatorial also cycle, Texas the nationally of those races the XX during and breadth In including the our midterm portfolio, political Nexstar race and of and produced we high-profile 'XX which Georgia

enabled Nexstar of state-by-state our initial the has looking attribute scale meticulous success XXXX We're cycle to revenue the nicely and cycle. of and guidance midterm to and a race-by-race full-year political on XXXX analysis between benefits the range during pro which We and forma election our forward us net levels. exceed XXXX basis, midpoint planning solid a record to

of revenue. the the in CW resets contracts Moving MVPDs and this impact impacting renegotiations ours Positively during these as the impacting revenue of new approximately on rate connection category fees the rate partner continued MVPD as growth quarter with as subscriber the contract with of were was factors stations connection the flat to quarter annual to revenue the well disputes affiliate Fourth quarter certain $XXX revenue was well prior-year. inclusion MVPD attrition. in these distribution and going and Offsetting million in as the virtual and the in escalators. MVPD our of dark certain settlement distribution

by subscribers. decline increase subscribers in Overall, impacted an to in offset growth MVPD rate in the by continued MVPD saw of declines DTC of the quarter, mid-single-digit rate at virtual we higher the was range, our which and

dark CW been up have of and impact low negotiation our settlements, the Excluding the other single-digits. going would revenue and distribution

double-digits the of fees, given impact inclusive recent MVPDs up multiple subscriber with our low to the excluding our XXXX, of on with couple revenues contract depending attrition. they of for expect partners' negotiations are on be and ahead, Looking we resets, of CW -- outcome our projections to currently affiliate for a which distribution the ongoing high-single dark

near are until positive will While we partners' resolved, affiliation will acquisition have for our date. on impact growth this year-over-year the the for CW in ongoing rates fees growth expectations slight have reported our higher our year, line rate item negotiations remain until a the mid-single-digit area. growth we lap

our and mid-single-digit to As Perry retrans of nice mentioned, rate, recent we're our have our will On basis, the extremely affiliation at on improving we revenue. agreement a reverse net or increase net retransmission negotiations a margin. that pleased expect comp overall with distribution a outcome slightly impact but

revenue think revenue segments, some virtual outlook distribution think provide our like how investors on other and reviewing MVPDs. relationships about our the with Before I'd to we color evolving should

like MVPDs Paramount like TV and MVPDs from linear and Nexstar like our Charter, Comcast reminder, direct-to-consumer Hulu Plus and YouTube other and revenues platforms Peacock. distribution a As generates virtual

in of NewsNation, it negotiate less of MVPDs. XXXX which which several up perspective, benefit MVPDs. from the renewal we derived than gross XXXX, our is by for are year-end, distribution separately, Nexstar including of our put Approximately subscribers virtual excluding virtual revenue to from generated But XX% XX% will revenue carriage

their regard of with negotiate to that affiliate own the of which on station in or believe instead like discussions the on the virtual our we agreements. of include the network MVPD to affiliates, should destiny Currently, boards networks the groups firmly individual out network allowing respective lead with to MVPDs opt We behalf. control virtual Nexstar behalf our

proposed a and stations, we and Nexstar, we CBS with The it's Board the affiliated followed MVPD, that of as that important in an small fuboTV, Presently, as were affiliate off-the-air market, a platform. have virtual recommendation. their united recommended opt remain CBS industry. lack digital including result, remain the affiliates world, below not has CBS agreement regulation that into terms the on Given the

taken The a and with may not Plus agreement the [ph] these especially come are the XXXX. there linear we moving do there later of have elsewhere contracts up As Paramount we may of a at up renewal VMVP a are is pieces you this all in of CVS, for agreement, lot discussions fuboTV agreement, what with know, where which year. actions representative as other or be in virtual networks,

Contrary to we be approach, with our the want networks sought stations content news the In deals that viewers. not out will because deliver content, any accepting narrative, local of the virtual to by line and MVPDs our the our local these value historical platforms. discount it's

is the not on position matter new. Our

factors in into levers hard with we can We fought have always of and negotiations pull. come play number a that

Now to agency Revenue the in Nexstar's of year-over-year driven the growth revenues quarter. in revenue to million. by the offset was softness national XX.X% businesses, the and QX local rest our inclusion services advertising e-commerce. and moving part year-over-year in digital $XXX of approximately by in back advertising digital items and increased line CW increases

CW, digital revenue the declined X.X%. Excluding

EBITDA XX.X% $XXX.X margin consolidated million. quarter a $XXX.X XX.X% XX.X% quarter attributable to million, On basis, increased fourth the prior-year a free cash fourth adjusted flow to representing and over increased

flow million, CW, adjusted fourth the free increased from $XXX.X XX% cash income increased to to XX.X% million. $XXX quarter Excluding net and

XX.X% approximately our well practices take converted to we disclosures improve priority free to already XX% remains flow. for on profile. EBITDA strong our ESG margin an also and executing EBITDA of to continue adjusted and And and cash generated our Nexstar while actions Nexstar, adjusted a business, to evolve we're

the media Board, we on our key prepared disclosures Standard or policies Accounting be companies website, and Sustainability suggested Nexstar SASB. which by in contains entertainment also year, This industry principles, our report and The for action. outlining will an ESG available for report, as

announced initiatives, our in we Class read allow which and an maintain Index. inclusion resulting Class annual in Board to and We C Directors, including to ESG to shares, cleared shareholders eliminating throughout active the B able our accessible our on we the XXX several plans executed to investors in of our report be way institutional Relations for and survey. you'll function, several in S&P acknowledgments declassify XXXX, As vote Investor

we its which their our addition, awarded unbiased been our -- been the has network independent and In being trustworthy. for excellent cable been as continue and reliable, -- fact-based groups for have awarded for for have for NewsNation provide which excellence our watchdog sponsors content reporters news by recognized to balanced

Nexstar year hours and initiatives over worthy in raise and dedicated to programs, practices be diversity, for of employees Nationwide and helping each of finally, donating and hiring and committed And fostering as is X,XXX treating well as providing locally, environment continue positive a to ethically and thousands equity causes. community to involved millions dollars work we inclusion fairly mentorships.

provide our Lee to and with the areas, growth drive new distribution, Lee our financial results to hear begin In the advertising, statement. record summary, process. of for ahead across the proxy where it's review direct more shareholder including With outreach results even performance our Ann? shareholders. discuss and call our initiative continued political and feedback annual of to that our update in Ann our that, reflected about process the the turn in from annual growth to us. of local as remainder advertising we key initiatives we near-term financial digital top will over my past, pleasure And XXXX We're

Lee Ann Gliha

everyone. morning, good and Tom, you, Thank

continue record our delivering results Our strength and underlying XXXX and our ability showcase results to financial capital scale the returns significant to full-year and model business fourth of and shareholders. quarter

in control financial few foreshadowing. own financial wanted consolidated that and our is and CW, dive I been step to I CW presentation Since financial minute we've the into the Before to our results. discussion, my take back changes discuss to XX% a we a usual

of small overall a to is of we've out by analysts it investors break and announced results, part financial the the CW. impact Although our

the to by a price, also so purchase intend believe view XXXX. to losses since near-term the We do to it for the asset is profitability CW as as we bring important we of proxy

our the as covenants. of CW purposes purposes not for indentures, of addition, is unrestricted it for and have In credit and calculating subsidiary, designated our an included agreement we

excluding the on tables will release, the able on for you at Nexstar also end, basis to the our financial earnings find for of CW that of for the consolidated the cover standalone metrics and a CW Nexstar, back and To release basis. the selected in on be a

flow interest the free attributable the cash benefits opted free XX% of our the our and attributable tax use an and the guidance, interest related includes to Food its figure respect Network in losses cash With the flow those cash we've Nexstar to of of in and losses. flow that CW

to repay for to Seasonally good is proxy return available attributable to shareholders. metric debt the or used be flow reinvested be to a cash

statements you financial are prepared use reconciling been our GAAP with and As should have with these metrics connection always, the that and in in accordance with schedules filed SEC.

note of streamlined and we EBITDA on also earnings cover are page. release that our flow cash should free number You metrics we showing have the

these we such, As transaction onetime figures. and exclude to from opting are expenses

the provided is back. always, in in detail the As our reconciling schedules

the research until have our analysts cover of now, of variety of Because that numbers. ways of had the us lack a showing information

some and in on page get the We exclude much to can CW noise call. hope it, our as consensus estimates. creating this after we same as include everybody some the Some

to scheduled our back Now programming. regularly

and Perry details gave revenue As the side. Tom most of on you the always,

to discussion a on CW our then little guidance. So color some financial expenses jump the results and by provide followed I'll on

We In million generated the revenue of EBITDA XX, fourth XXXX. and million closed the our line the expectations on acquisition for of of September the CW quarter, $XX in quarter. losses the adjusted with $XX CW

content an $XX from to comprised CW MVPDs onetime of affiliates charges generates for advertising, national and well player. and million virtual bonuses. responsible SVOD The digital was CW continuing television as and fees the addition, and as some restructuring from In revenue from primarily of retention distribution short-term expenses licensing revenue

programming play see CW will that quarter season, fourth unfold. be to Nexstar XXXX schedule the be is broadcast until in the start won't it for to able locked you the book XXXX, the Since

XXXX. to continue profitability We to a anticipate nine-figure low by investment achieve and

approximately inclusion expenses to onetime $XX.X million of including million, the I quarter and expenses. expenses Nexstar Together, due increased SG&A $XX the mentioned. the of fourth restructuring to primarily back operating just Moving CW, direct

operating as revenues, of related to costs to from SG&A costs direct payments content. Excluding is the quarter move reduced from programming related syndicated part other syndicated result fourth CW, our programming and EBITDA variable programming, news expenses increased in to only which $X.X of the programming offset in a higher increased and calculation million related adjusted to NewsNation higher

Increased offset reversal expenses distribution accrual in to were by a due an our renewals. agreement with connection of settlement a

As declined political a percentage growth controlling our and revenue net focus expenses of total revenues, our given expense growth. significant on

corporate was compared QX expense approximately expense new of expense the noncash XXXX million total expense $XX.X XXXX. million, to Noncash compensation including noncash million, $XX.X $XX.X due in grew $XX.X of including million CEO's compensation contract. compensation to primarily

item, expenses corporate in included effectively onetime Excluding flat. expenses were this

fulfilled $XX $XX.X quarter. that was the of Fourth was related CW. quarters CapEx was prior first CapEx the was delayed in three the disruptions to quarter excluding fourth fourth to finally CapEx the XXXX chain due in than higher quarter the year in in supply CapEx million as or million, quarters

debt. than due to booked. to full-year, $XXX CW, our total prior the floating reimbursement expense been higher CapEx impact rebates have yet rates for rate of and that expectation quarter to the million excluding million interest and from $XX.X anticipated million million, the in increased LIBOR not our of Fourth quarter $XXX applicable $XXX.X increasing was slightly to SOFR primarily due

and the -- curve Cash versus yield quarter actual interest the last call expense due than projected year, impact for the expectation for and $XXX at debt of the repayment. of our $XXX.X the million million to slightly was million $XXX lower

includes Fourth a CW. million quarter to rate were million, from taxes for the in XX.X% investment CW attributable Overall, CW the from operating for taxes $XX.X excluding $XX.X and deductible cash benefit a the and $XXX.X Nexstar, from which operating including cash Nexstar, income tax year, $XX.X our million losses. CW, the the deductible excluding pretax benefit were tax tax million implying attributable million, $XXX.X attributable losses

quarter. related interim over equity fourth our year decrease $XX.X and payments XX% recorded These last in network XX.X% in a represents lower Food income million TV distributions are We distributions quarter, this tax are to investments year. primarily operating the ownership in to due prior-year which versus from for the

for overhead in comp comp the -- approximately expected transaction price year. million to is to for the the million area Looking but first project and the and actual corporate be cost ahead, $XX quarter stock on quarter, approximately around we'll grants. million for will and $XXX in of first we stock vary full-year, we $XX overhead $XX Noncash expect and the exclusive million but be based

For we when our tax benefit tax cash and rate taxes, use onetime a before XX.X% adjustments. estimated other calculating

cash We million first $XXX CapEx $XX full-year. the quarter in million are the currently projecting for and of

in spend typically we reminder, a nonpolitical political number less As than CapEx in odd years years.

expectations Nexstar's falling thereafter. July expect forward and We quarter debt and forward $XXX cash million speaking current first for shows and for the to reflecting the repayment. in interest curve $XXX approximate for expense million currently year, The rates curve interest

our as XX, with CW accounted billion, year. losses of $X.XX of billion agreement. debt leverage credit the Turning $X.XX XXXX, the we for have Because purposes balance Nexstar's subsidiary, at an year-end December the was with calculation outstanding our CW unrestricted down not of sheet. associated last to to in from for are designated

such, was our lien rate Nexstar, only for first lien coverage net well first-lien of the excluding -- CW net -- X.XXx, first-lien covenant December at -- sorry, below and our X.XXx. ratio our As which XX, covenant XXXX is

X.XXx, from QX. in of XXXX net at leverage down quarter-end, X.XX% December total CW for X.Xx as excluding Our was and XX, Nexstar,

political slightly up a expect expect again on expect a fall versus to year. quantum XXXX. two-year As basis is in our of in to But last debt, we typical be years, we XXXX, average leverage tick don't nonpolitical calculate a to will the in But XX-month we which which leverage, up. we tick

to portion indebtedness, In XXXX, we from our payments. free mandatory primarily amortization plan a reduce to flow of cash allocate

billion XX, proceeds flow December included For attributable We our other attributable XXXX. or $XXX net cash we million repurchasing Other of expenses our flow $XXX sales attributable in and and to of cash XXXX, The XX% capital XX% of free generated of generated shareholders million stock of related debt. shares of as the full-year, paying approximately to $XXX or in items. billion $X.XX in returned XXXX. X.X free million flow repay $X.X asset and cash to our dividends transaction million uses shares cash went of remainder of outstanding working free

a move cash that value. we consistent highest we our will to deploy the commitment continue As to with our shareholder is forward, in manner creating strategically

XXXX, For are pro are ability Perry enumerated remain $X.XX by the attributable new the enhance annual million we -- ownership average for tax about with shareholder for losses forma billion, deliver in cash and XXXX CW. and confident approximately factors guidance Tom, all in of cycle on to flow prospects value including associated in our of XXXX connection and our annual attributable and interest our excited $XX benefit free

Comparing in XXXX, million this we average, loss attributable XXXX, $X.X for about $XX million interest the billion, the guidance more given our expense investment have the for the of in interest and XXXX movement $XXX CW. XXXX to original a rates

free XXXX, our $X.XX flow these Excluding cash been impacts, XXXX would for purposes. have comparison billion

and we business XXXX expected consideration perspective, From our trends up flow A for before current best an core based on into on our few additional current these XXXX, figures our open free of for today. questions. cash operating notes guidance as take estimates

transaction M&A usual or these material We other have no assumed or figures. one-time

floating dividends, consideration in So expense in will and our repayment, the rate impact which debt flow debt our are of forward in, reinvestment, which interest is load. repurchases. We've into taken significant we curve given cash free expected form share deployed also the

XXXX flow by our XXXX but attributable only companies generation increased powerful per peers, our as not from $X.XX free XX% larger XX% per one X.X% media shareholders free billion Nexstar's of our from consistently to recently differentiators share a our $X.XX cash representing or diversified of returned most to dividend We've in year, well. yield. and cash strong flow remains

remain report deleveraging organic priorities modest allocation capital value-enhancing in repurchases. business, mix dividends and Our our share focused a accretive on of through shareholder initiatives M&A, returns and

open line That the call. the Operator, review questions. concludes financial for for please the

Operator

Huber first Research gentlemen Instructions]. our Huber comes begin and will Craig session. question-and-answer we now question [Operator And the Ladies with Partners. from

Craig Huber

Great. Thank you.

nitpick CW. questions, could the on off I some if Just with start

And CW? direct question. how said excluding I this operating my was are you think $X.X was It's that that year? expenses, excluding seeing SG&A you tracking new CW. the first What up your the million,

Lee Ann Gliha

in... I'm our expenses direct tracking sorry, how operating

Craig Huber

Well, the your direct year, anything and CW expenses putting the I there aside about of mean beyond this ordinary? is ordinary should the we know operating out

Lee Ann Gliha

Nothing out of no. the ordinary,

Craig Huber

you was Okay. if exclude the percent What hit, unfortunately, And the that CW? what including for the retrans blackouts? revenue your was change then just

Lee Ann Gliha

what know was excluding to want You the the distribution revenue CW?

Craig Huber

yes, Yes. In -- quarter, the able get please. fourth just to I yes.

Tom Carter

we adjusted think up I percentage was single-digit gave basis. Well, an on that. low It

Lee Ann Gliha

amount at -- He revenue just CWs amount to high-teen of the what of CW. of know wants the to related number high-teen, the

Craig Huber

picture question. big the and Great. how then the and the mean given Okay. economy station is I out there TV controversy given a all your side, about Perry uncertainty U.S. on And U.S. your footprint feeling What Are worse about at where thought months than cetera. the say, on or increasingly any you et or it Tom now is economy were, three now? right is ago? you large

Perry Sook

at are interesting. and at And see the the basic spending X% they and know seeing spent time they net Craig, lot of into the worth business and local their factored consumers spending cash some up counter by Obviously, lives. checkout and owners customer in buy And $X at a some really local it's advertisers. their maybe and daily showing have of of that are gasoline register, $X items. choices No, we or front customers making higher local that Walmart and you're to moving in and mortgages

national advertisers still obviously a in have is due reduced where in and first end national forward. spending close The paused weakness to local spending consumer the just the that spending there customer in consumers hanging or for going weakness to us is user aren't we is fine potential the But as and quarter. in see

back just our the dichotomy surviving at have advertisers anticipation not that the a and it's national itself their point weakness or at a spending, and scoping level. Main where in is fine, more manifested numbers Street really pulled which it's on consumer has local So in of this in spending

Craig Huber

that -- down, holding Sorry. you to first mid like. maybe well, about single-digits? be down overall the My but roughly you up -- expecting quarter. question, said quick local for -- X%, for How last for though core was But XQ? was pretty it advertising core I about know the are sounds much

Perry Sook

For prior a spending versus year?

Craig Huber

CW, the excluding please? year, Prior

Perry Sook

amount. single-digit a It's

a a double-digit kind advertising we numbers, low of a budgeted currently. We given down will we're in would again, slight show the which year-over-year amount. expect forecasting our will achieve QX. low local be single-digit National those is see, increase numbers, of decline And what weighting

Craig Huber

Great. Thank you guys.

Operator

comes Wells Cahall Fargo. next Our Steven with from question

Steven Cahall

Thank you.

Tom, expected, as maybe of a the retrans things So some hoping little we just through could unpack you went bit. on

to then renewals the of you mid into was guidance is think guidance. that then it CW I So new I some get single-digit. you this And And if up the done, accelerates about be if correctly, prior current blackout retrans mid-teens. that expect that the ex understood

just or bridge was wondering we cutting? about? Or difference that you kind I anything Is you're could if cord need achieving any the in that else think So to us help gap there. rates of

TomCarter

Well, more is quarter for differentiating only to how In think the it continue. in the said expect and blackouts the I single high the And I've first we I year, be long will the pronounced. again, double-digit full-year, first growth. factor that low of the think half

believe half single-digits, So expectations will like it into of we grow the be full-year the back mid the year. more the then and first in will half

mid-teens with at double-digits if a assuming you no quick attrition. again, regard double-digits look low low expectations, bridge growth, blackouts in to be our between resolution overall the and would further increased And at

Steven Cahall

you. Got

went also, sounds going that on, growth be going what's is the then the gave And was is you just kind months through the there that to know point. think, back at mid-teens change you any on It Okay. few reverse of to your like and side. I about on that outlook kind side, mid there a single-digit, up of reverse I

anything gross the the reverse is to just difference or net So comp in else the side? the on change implied

Tom Carter

I the is in much no, retrans affiliation I in Well, think comments network it in growth than my that mentioned growth our revenue. modest more

retrans revenue increase. but I give be a higher it growth. So didn't net you'll the will than specific, see margin our

Steven Cahall

renewals the Perry, for recent CW deal. you then, distribution have the paid effectively And mentioned Great. that

context. CW or to other incremental CW? you're put the pay not for more just a little always broadcast a it whether an the of when put any could part you now pairing or you that's you with of maybe affiliate stations higher around you So thinking surprise and that Are been context kind statement was happy bought your that could MVPDs fee the kind that or of

Perry Sook

Right.

you thinking. parent big related I leverage we're four the think a it when as this and with the number all part We then priorities CW reasons, think agendas. station mostly negotiating company group predecessor was that also in of all And and to was the package, is any undervalued inherent largest of negotiate and for owners model. there

And hoping the are we we so very pleased value so as value ability more like more other extract ultimately to and with our we to things more CW. And earn can expansions, we're Golf that with continue obviously, programming to create go. LIV for

Steven Cahall

sports the a it Do Is both number Great. announced that. And that's kind of do seen it's How too I rights. kind between local the a change. little then sports lastly, a know enough still recently groups your get pick into stations of Last going also that content. you to if just local see market? has we you And quarter, or you. Clippers early? Thank launched buyer's opportunity and service period deal. a on of appreciate regional a of of CW. up yet to RSN We've now one peers know

Perry Sook

I can tell here. going activity are are is The as discussions. there that team lots that of on inbound with the discussions number you well Well, of the frenetic -- inquiries around owners as

taken inside on. of deal the team a other kind that Clippers think There on notice of broke broadcast with that exclusively to TV putting going of games of and not seal. of a lot expose our that. conversations that Ballmer market are pay the group the is And think to the universe Clippers the Steve I part I owners have

and us I would how a influences extent, what and people you'll think on. a much to and pay the as universe. owners and forward. their see audience goes going TV therefore, behavior means time RSN certainly want that more how then, among receptive distributing product do audience, is But them broadcast than TV larger in exposing to their that certain the NBA value the see expect to of But and see a deals out I that NHL plays available to have we owners

Steven Cahall

you. Thank

Operator

next Company. question the Our from Kurnos comes Benchmark Dan with

Daniel Kurnos

either sort if or to we a bit. helpful? Great. on from don't kind wanted Thanks. to about programming your perspective, think prime trade CPM between morning. that any Golf, these of stuff just to off time sense directionally in we follow-up CW are to sort put we should And I what have Perry, be a Good -- of deals you and of how programming, willingness like a about that How the on so if could of of sort a maybe LIV of little kind viewership way sports. size trade-off would traditional kind of there's just know, be of thinking impact

Perry Sook

before. of create CW very by golf the we're goal Golf I LIV linear think weekend the Mayakoba, three value was our in first Certainly, first platform, with year-to-date across both as television average been never LIV pursued earlier, X.X across the Golf is CW. I more was pleased can network tell the app, Mexico. average as I -- viewership I one our guess game viewers that the sports viewed stated XX% than -- there has over that CW first to our is Well, our Golf's avenue two linear our to well you days linear total from digital million LIV higher on average. day the compared

that in this well our our were And know about amount Xx most as money generated and outing. affiliates thrilled. the generated And broadcast say which all affiliates of important I for to to the is of XX% Sunday stations CW first our that for top numbers markets XX affiliates own network the exceeded so those us, increased expectations. the from ratings as Saturday importantly, the linear --

and And season the so well get more selling as continue I we'll we involved. into more very think and it's grow to

the big sports, -- with a time that another distribution all think the night par to are we the four. again, I schedule, the want And prime on has it expect I mean, adding Sunday to in make hour I on CW things So future. you can think

our obviously choices network the and more on there. to interest is that, job par and of are can that is programming, out relevance put big now that us a continue piece profile, programming the varied the So increase to in other offer with more sports

Daniel Kurnos

or properties And on you know I specific broad we've obviously 'XX, seen obviously you. have for And early it, helpful. have and others a CTV you some That's political political, what creative now. guys of just whether really some one, own it's that partnerships platform, have but attacked mean the another just kind I ways

So pro year? forma or what channels I whatever have of don't know of next number? kind 'XX to how incremental do we you see do into opportunities heading And if XXXX was you kind that yardstick relative

Perry Sook

it Well, in both would this the morning up say, what first is XXXX. you saw of number in embedded that all, guidance XXXX, record for in inconsequentially and I issued is XXXX a not that we and political from

races, Senate overlaps So presidential are record well a The which it very will that be game the is in expected of to where local year. states be with platform, played contest. political reach play the is our open the for the

political so bullish are on very XXXX. And we

politicians will by and The things And contested. will XXXX reach a as audience. be network which America NewsNation don't we o'clock in Monday we Friday did of exist were XX the say, of debates company, business April. were in national across that a for -- anticipate Hill the is There we to the on debate states That that in newsmakers, in being our called show in would of on to active to launch being cable perfect they national three that through exist We offer which will XXXX, all outside X XXXX. be would a I at others that today. conduit put

power which that backbone local opportunity see the highlight debate to you'll beyond. us the and think brand; the see a strength effort is stations, at together stage. of the look is a the unified I do, XXXX and you our all more with national NewsNation, Certainly, of of Hill, everything available national on of us a think brand active sales is concert to The come I which you'll in in we when which in

Daniel Kurnos

appreciate I Thanks. it. Great.

Operator

Our next question comes from Nick Zangler with Stephens.

Nicholas Zangler

a to Yes, affiliates over these drawing with and TV? Hulu here, line which coming up could carries talking Are hey other gauge on. that well? all? And you TV, relationships me impact Sling the Thanks we like the at sand the giving impasse for CBS the would I TV, in negotiations spillover the other How fuboTV guess, could risk, YouTube over vMVPDs effectively vMVPDs those and see about with create are as guys.

Perry Sook

virtual total Tom go to that his what revenue prepared said MVPD in remarks I'll our Well, back is distribution XX% is approximately of revenue.

were dispute talking at Right about. the say a if fubo the it number over is now, that's risk, So well you're that issues. I as governance can all money dispute that as think you

think I content. money be of issues agreements that behalf two you'll are so else see that no to should own the And affiliates point and should and one on here. negotiate continue press And our the negotiating our that we

we And think watching? at other local at the locals. what health MVPDs, And we fubo talk virtual they Roku people to I are and they say, at ecosystem, the asked for them, of long-term the

sell to a traditional in à we value value. we virtual the And a collectively, unlike discount so be And bundle, we willing not and where would we think carte that are it And at different so not channels why the universe? cable, I will basis. have an la and most that recognize or sell in watched are individually know to on

the marketplace. you an So offering inferior have in

tell everything in you the should you global discussions. think about I you that If to have need the stations, the know don't leverage

go to to while we And so point. little make that the dark a for means if have

our in industry -- the to as have do that. well think others made judgment as value company the I

Nicholas Zangler

guys. continue from to that content just if Understood. a there. size vertical Curious pre-COVID want huge bearing those up room No, look a question that to is back, a here? XXXX to rate to auto still on they local but a normalized that that to how levels. yesterday great directly significant more performing we are era? here. run understood back, could heard fuboTV pre-COVID auto maybe wondering second auto relative And you obviously, when I'm for there in we full It's Or Are it normalization you back then hear back you bit. getting come

Perry Sook

are Yes, not back to yet. XXXX levels we

seeing healthy some increases are lower We sustained of that base. off

to and national I levels, of see unit we that certainly core tailwind of we and of up kinds that have But begin from a as XXXX increases approach throughout continuing spending. up both revenue another well is think the in as years these SAAR auto we a before couple is year. advertising double-digits, it

Nicholas Zangler

likely you're pre-COVID auto $XX-ish million -- push back levels bag which SAAR is -- the tailwind as under in require way to So multi-year million that normalization, Auto in unit it. a or would era? we continue range to basically, describing

Perry Sook

it company, multiple certainly. for Yes. a our We tailwind year see as

Nicholas Zangler

Got it. Thanks so guys. much

Operator

Research. question next Our with from Barrington comes Jim Goss

Jim Goss

you. Thank

about the content to you the try rate of the the Could bit could desired how to talk CW. navigate the that drawing little about attention and going challenges. its audience are process comments transition that changing to a publicizing Your else to since pause you of changes own in content attract

Perry Sook

the move think and We there, for networks I but be out our the Well, listening. and programming displayed put because don't might deployed as you'll towards schedule that other will I want we Sure. level upfront be the fall. think see to playbook necessarily

that They're hard seen We've I their historically. you are profile than see some and some work putting certainly tons things. Miller together. there, Brad signed fielding and pitches. think of in you'll Schwartz have higher Dennis programming the unscripted teams at

think We of will yet announced haven't interest. that be I

process. an but profile, gradual get less will more maybe but of get quality the some genre. you'll higher not unscripted, we're little on that eyeballs. it's reliance going bit and more higher a to on although a noisy a And think scripted, something that's generally so reliance a But of I unscripted, see a attention abandon process, I just iterative It's think totally some

that And of that has, no broadcast of wouldn't understand to, has occasion. into prime any be else that which may may upon for on we continue it one what afternoons everyone look superior opportunities sports people to additional and know I not we time weekend reach. rule And we'll is may broadcast from power bleed the we or mean, talk out.

enthusiastic in engaging the distribution reception interested we're and very over had frankly, we've there so another through the about there, be And the conversations. pleased voice quite that for with are people model. opportunity those in and the may air national And broadcast marketplace out another

Jim Goss

Perry. Okay. basically what It sitcoms. through was And assume the steps -- much there. NewsNation. And process other initial with than you're Thanks better the wondered seems pretty I reshaping to do you I with are. one with next like the bogey were one the we off-network

generate want that with Now your the and station you that if you talk probably could the to about raise network. you little a profitability bit, I too? in the of margins wonder sights terms or can

Perry Sook

Sure.

us, Vargas end have will by schedule in joins network be Next April, that program the And Elizabeth will steps of for XX/X. the news a April. obviously, we

X at Monday addition expansion, the Eastern show Friday. news a be through will network addition Hill, the the the that and of end o'clock April, we'll XX-hour Elizabeth Monday So Friday reports by include through daytime the Vargas of of

five that we're did distribution to general in content a at one and cost And our networks networks. news in thousands because being point, entertainment obviously, We've programming. getting per of we than one news grow off-network XXX higher able of of been than programming rather substantially revenue

-- If in ratings, couldn't made you at follow network a better the decline general pivot the time. have entertainment general network we

syndicated feel our that hours and now XX/X. fill set We our yes, and entertainment we're how currently we're so Sunday And into what's obviously, That's the comes XX/X news. buildout. once we the sights And enhanced, and our are then XX driving journalism. programming to with have back expense investing on April has and we programming, profitability been that on Saturday

will cable that have a the end of network. XXXX and piece And lift, news by so XX/X then we'll and we'll big be the done be that

January was I in network remarks, cumulative the As said its highest inception. since the my audience for

they base, what we're to fourth the don't of now. up from in that continue again, are We to in but minute-to-minute and don't minutia, ratings we growing, we all I people, network from care of just we'll put and the grow. to grow just cable care months and and grow the a are every the I better, to years So And it. day double-digits continue news tell continue grow the now, is low do are three out off quarter. I continue caught but three get numbers good only product a what grew

raise have kick and on million the is campaign month feel and look the our in stations very we the continue off out folks our expose to that investment of and to they our I between to what media. continue we will dayparts. that level do, and It's awareness the in I'm will the attempt we of April earnest of balance raise air the have add promotional other top-tier fill Our as and of job through level talent the to these paid profile, proud our approximately on we other network. and $XXX year that the hours that to

Jim Goss

All for it. color. right. all appreciate Thanks the I

Operator

Rosenblatt Crockett Barton comes question from next Securities. Our with

Barton Crockett

is the football to from understand -- to look kind as really to on Is the see just I a leverage bit the able with Hi, Or a if game logistical are somehow CBS? games see or NFL there about wanted this on rights thanks want I the the just taking local by Or agreement first Are for it national you like ask the question. local kind just only to feed. little feed? national is just all? ability on thing. one they game it of news constructed topics not? two There you of any around that that a national

Perry Sook

Bay, station are talking or talking local network are about the who about? You the to refer you you When because...

Barton Crockett

game? subscriber a am the the can Or some coin see that's if Sunday giving in If I station, was Seahawks I Yes, fubo yes. like [indiscernible]? on or game you like where Portland the I a about on CBS talking have local I'm national not?

Perry Sook

on you On white the feed. yes, see will, the can you that that probably feed, CBS -- CBS game if

include right to if find I dispute their that I in they guess at have all in but football to goes season, think think this of I end point we'll time. the this the do out, feet

Barton Crockett

Okay.

then... your is local just So And news. really your leverage All local content, your right.

Perry Sook

is for value. Because But lot. the that content. yes, local don't want a people what that's is us Yes,

Barton Crockett

about Or are switching revenues without that can legacy the little necessity a enough It importance bit to then really the X.X is And interesting feeling to to down up a that was to the that? ATSC FCC you of getting was talking meaningful move the mean so that? Okay. to kind their I feeling generate of Sinclair of free shut get about your What's ATSC. you capacity meaningful that generate about bandwidth off that revenues of kind can this. capacity? stations,

Perry Sook

what I've at constrain as requirement current Commissioners the you're capacity as to the can FCC well And does meeting recently the The I our simulcast been think we do. as a with ATSC that the some private going NAV engage kind Chairwoman. And the public a and the further of probably sort explore FCC of of develop see in task an development to arrangement with force to X.X.

to is here. that think I absolutely necessary advancement

the on compatible begin of if be to all standard, or set don't of to consumer that with sunset that has that, that even we lessen customers, disenfranchising not would and to hence, to again, was issues viewers have dongles it come first business with cause too. We're backward if and and foremost. of the the receivers had sets dealt and for to X.X, years, in And those the think, need advertisers. manufacturers a problem that we have several I the sets compatibility build

ideas, I -- and sector private around kick about that's So and holistically I talk sit if the and down can think think but and coming. this public

And of used we're think be and that industry TV. constraints and companies can capacity the that cases be growth with positive the today, for positive NextGen happens, develop enhanced day Sinclair GPS development if a power to business other and and distributed day bandwidth-intensive. independently and -- that for I a think and I with will the some are it working very So you'll applications other given not use

this developed from NextGen in ancillary And I we'll that the be TV will again and development spectrum. see, think seeing cases of use forward revenues you'll that in be cases again, -- test is some XXXX, progress

standard. needs bullish to and of transmission very on sunset point it. Obviously, X.X needs at as sunset the simulcast be requirement to we're there the So endorsement of X.X new some and the to and a things we're think bullish are in up, these and And when I line accelerate. on those begin I think way. prospects But things development the think you'll on the very see an queue

Barton Crockett

mean Okay. that. I that this Are do you that Sinclair was XXXX, revenues think point? saying from you in you saying at guys start

Perry Sook

it's our we spectrum the I revenues and to primarily now have right multicast distribution. people form multicast of leasing spectrum for Well, revenue from mean, in their

But an talking and not cases. revenue is would testing the they be more be it's in anyone a from I the I'm there would on of test of tests. use spectrum contract form the don't could expect the chance sign amount. very had until number. things, to our terms a today. people ancillary technology to a that But certain modest So big of in administer -- inconsequential It uses But of so flowing there about their

Barton Crockett

That's Okay. you. helpful. Thank

Operator

remarks. gentlemen, further turn to I the Perry like call go closing back no to are ahead. since and for questions, would there Ladies Sook Please the

Perry Sook

you. Thank

and the We in flow performing shareholders best continue media, cash long-term low investment case with along of simple. prospects of been the growth returns Nexstar one short stock is for to free solid highest one percentage to and valuation. a has stocks very long-term of believe in the Nexstar's media

initiatives. have multiple leverage growth visibility excellent with We long-term low and balance short-term strong with a material sheet

'XX benefit new XXXX from year. agreements we've and and as will discussed, as 'XX distribution election political Presidential and big the

also multiple the We CW to being drivers, X.X including future. that have growth organic in positioned are for and the ATSC NewsNation, Nexstar material growth generate

top-tier but represent 'XX existing the the potential as yield. company at performance we a cash investment in opportunity for with shareholders solid free a broadcast we 'XX, trade As such, sector, Nexstar operational very and flow shares largest are modest

again today. we you, thank when results. So We speaking to soon first XXXX everyone, quarter look to you for joining us our forward report

Operator

much day. and This concludes Thank for very you today. good conference call your have our for a participation,

Nexstar Media (NXST) 28 Feb 232022 Q4 Earnings call transcript