Nexstar Media Group, Inc.

Good day everyone and welcome to the Nexstar Media Group fourth quarter 2021 results conference call. Today's call is being recorded and now at this time I'd like to turn the call over to Joe Jeff Foney of Investor Relations. Please go ahead.

Thank you April and good morning everyone. I'll just read the safe harbor language and then we'll get right into the call and your questions. All statements and comments made by management during today's conference call other than statements of historical fact may be deemed forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. Nexstar cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those reflected by the forward-looking statements made during today's call. For additional details on these risks and uncertainties, please see Nexstar's annual report on Form 10-K for the year ended December 31, 2020, as filed with the Securities and Exchange Commission, or the 10-K for the December 31st, 2021 year, which will be filed with the SEC on or about February 25th, 2022, and Nextar's subsequent public filings with the SEC. Nextar undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Thank you for your patience with that, and it's now my pleasure to turn the conference over to your host, Nextar Chairman and CEO, Perry Sook. Perry, please go ahead.

Thank you, Joseph, and good morning, everyone. Thank you very much for joining us today. Nexar's 2021 fourth quarter financial results marked the end of an outstanding year for the company as we achieved another record year with full year 2021 revenues exceeding what was also a record 2020, which, as you will recall, included record political revenues. In 2021, we grew revenues across each of core advertising, distribution, and digital revenues. demonstrating the strength of our business and also the recovery of the ad market. Our fourth quarter and full year 2021 net revenue, adjusted EBITDA, and free cash flow all exceeded consensus expectations. We are also pleased this morning to issue our guidance for average annual free cash flow for the 2022-2023 cycle of $1.4 billion annually, which again will be a record amount of cash flow for Nexstar. Tom Carter, Nexar's President and Chief Operating Officer, and Leanne Gleeha, our CFO, are also here with me this morning. I'll start with a summary of recent highlights and developments, followed by Tom's operational review and Leanne's financial review, then we'll open for questions. First, I'd like to comment that we're feeling good about the overall business environment. So far in Q1 2022, our core advertising is pacing ahead of 2019 levels, which is a real testament to to the strength of our business and the economy since our largest category, auto, while recovering remains still somewhat challenged. Q122 has benefited from the Olympics and Super Bowl as we are the second largest NBC affiliate group, as well as early political and PAC spending in response to the upcoming Supreme Court nomination and other local and national political issues. Local television advertising remains the gold standard for effective political campaigns because it has the biggest credible influence on voters. For 2022, we anticipate we will generate a record level of midterm net political revenue, eclipsing our pro forma 2018 midterm political revenue number of $383 million. We also anticipate a recovery in the automotive category. In addition, as Tom will cover later, we continue to see strength in the sports betting category, with new states legalizing online sports betting, including New York, Connecticut, and Louisiana. And most recently, Illinois, which is expected to come online in March, and we already have orders on the books. Likewise, you can expect to see continued growth in our distribution revenue based on 2021 MBPD renewals and the annual escalators we have in all of our contracts. In 2022, we have contracts representing more than half of our subscribers up for renewal and repricing, which will benefit us in 2023. In 2021, we significantly expanded programming at NewsNation to 13 hours of original news programming per weekday, and we completed the accretive acquisition of The Hill's digital political news platform, bringing synergies across multiple of our business lines. From a financial perspective, we are the only cable news network to launch profitably. While our audience for NewsNation is still modest, we are the fastest growing cable news network, and advertisers are validating our strategy and News Nation's unbiased content as we generate the same CPMs as our cable news network peers. In the fourth quarter and throughout 2021, we continue to focus on leveraging Nexstar's industry-leading scale and content platform to drive near and long-term growth while creating value for our customers, shareholders, and communities. Over the course of the year, Nexstar launched multicast network Rewind TV, which together with Antenna TV, our other owned and operated network, network, as well as our multicast services, generate combined eight figures of annual adjusted EBITDA. In 2021, we deployed next gen TV in 17 markets, expanding our coverage to 29% of all US television households. And we're on pace to launch additional stations to increase our reach to 50% of the US population by the end of this year. Nexstar is among the nation's largest holders of Spectrum, and we believe our scale and national reach will be critically important to cultivating demand for its use. What we're most excited about are the myriad new revenue opportunities that our Spectrum will represent. Consistent with our capital allocation priorities and focus on enhancing shareholder value, in January, our board of directors increased Nexstar's quarterly cash dividend by 29% to $90, I'm sorry, 90 cents per share per quarter. The double-digit increase in Nexstar's dividend for the ninth consecutive year, ongoing opportunistic share repurchases, and our free cash flow growth will allow us to continue delivering industry-leading returns to our shareholders. And, of course, we will continue to pursue M&A opportunistically to drive shareholder value as we've done for our almost 26-year history. Our M&A strategy is focused on leveraging our scale by acquiring businesses that are synergistic and enhance the value of our enterprise. As I'm fond of saying at Nexstar, we like to read the financials from the bottoms up. We apply that ethos to pretty much everything that we do, including our M&A. In January, we released a new investor deck on our website, which I encourage you to review. The deck highlights the assets and scale of our business, the investment thesis for the company, and how we plan to grow both in the short and long term. Nexstar is a scaled business with a significantly larger footprint than other broadcasters. We reach over 210 million people in the United States with our television signals and over 120 million monthly uniques with our digital assets, making us a top 10 digital news and information property. We also have a differentiated free cash flow focused model, which positions us well versus the larger diversified media interests. For those of you looking to invest in Nexstar, we think this could not be a better time. We have excellent three-year visibility on the business, with 2022 being a political year, 2023 benefiting from our expectation of increased retransmission revenue as more than half of our distribution agreements will be up for renewal toward the back half of 2022. And in 2024, we have both a presidential collection year and we will also have the benefit of the increased revenue from 2023 distribution agreement renewals. This solid expected financial performance will provide us with the financial flexibility to expand and pursue strategic organic growth initiatives as well as the creative M&A while supporting growing shareholder returns. With all of that said, let me now turn the call over to Tom Carter for our operations review.