Nexstar Media Group, Inc.

and welcome to the Nexar Media Group second quarter 2022 results. Today's call is being recorded. I would now like to turn the conference over to Joe Jassani, Investor Relations. Please go ahead, sir.

Thank you, Anne, and good morning, everyone. I'll read the Safe Harbor language, and then we'll get right into the call. All statements and comments made by management during this 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, 2021, as filed with the U.S. Securities and Exchange Commission, and Nexstar's subsequent public filings with the SEC. Nexstar 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. It's now my pleasure to turn the conference call over to your host, Nexstar Chairman and CEO, Perry Sook. Perry, please go ahead.

Thank you, Joseph, and good morning, everyone. We appreciate you joining us today to discuss Nexstar's record second quarter financial results. With me on the call today are Tom Carter, our president and chief operating officer, as well as Leanne Gleeha, our CFO. I'll start with a summary of recent highlights and developments, followed by Tom's operations review and Leanne's financial review. Next are delivered another outstanding quarter of financial results and shareholder returns. Top and bottom line performance was driven by a strong year-over-year growth in political advertising and distribution and digital revenues. Net revenue, adjusted EBITDA, and free cash flow came in well ahead of consensus, continuing our track record of exceeding expectations. These results validate what our company has proven so many times over the years, regardless of the operating environment. Our business model is resilient and built to outperform. In the first half and the second quarter of 2022, we returned $486 million and $284 million respectively to shareholders, through share repurchases and dividends, marking all-time highs for both periods. In fact, in the first six months of 2022, we returned approximately 62% of Nexstar's free cash flow, or approximately $12.16 per share, to our shareholders. Since our last call, the financial markets have been hit by fears of a possible recession. While there's no doubt that companies across all industries are operating in an unpredictable environment, The breadth and reach of our platform and our customer relationships with over 40,000 businesses enable Nexstar to separate the reality from the noise. Based on what we're seeing, there is little to suggest that the current macroeconomic uncertainty will have a material impact on our business. This is consistent with recent positive corporate earnings results across a variety of industries, as well as broad-based economic data, including consumer spending, employment levels, and payrolls, and industrial manufacturing, all of which remain healthy. In addition, we have the benefit of the 2022 midterm election cycle, which by all accounts will be another record year for political ad spend. As such, we continue to have solid visibility on our free cash flow outlook. Let me briefly highlight some of the reasons why Nexstar is uniquely positioned for growth in the current environment. The scale and diversity we've achieved through consolidation, our distribution arrangements, and digital content M&A have fortified the strength of our margins and our earnings power and have created the best operating model in the industry. For several years now, over 50% of our total net revenue has been derived from distribution revenue. This contractual and recurring high margin revenue source has historically been resistant to periods of economic downturn. We have a solid foundation for continued visibility in the second half of 2022, and with over half of our subscribers up for renewal at year end, we expect continued growth in this period as well as beyond. Looking at the last two election cycles, political advertising revenue has accounted for approximately 10% of our total net revenue on average. Our focused approach to optimizing the political advertising opportunity and our scaled presence in markets representing over 80% of contested races gives Nexstar a distinct competitive advantage in capturing leading shares of spending. Second quarter political revenue more than tripled on a quarterly sequential basis, and was up approximately 80% over pro forma Q2 2018. Our political revenue is also pacing more than 40% ahead of 2020 year-to-date levels, setting us up nicely as we head into the second half of the year. Importantly, fundraising, which is a key indicator for political ad spend, increased 76% over Q2 2018, according to the Federal Elections Commission. We expect fundraising levels to accelerate as we move through the year, given those positive trends and recent events. Together, these factors reinforce our confidence that we will generate record midterm election net political advertising revenue for 2022, meaningfully exceeding pro forma 2018 levels. The strength of this revenue source should also help offset continued weakness in the automotive category and any general economic weakness that may arise. With only 33% of our total net revenue derived from core television advertising, we are simply less dependent on this revenue source than ever before. While Q3 core television advertising at the station level is pacing slightly behind 2021, primarily due to political squeeze-out, softness in national advertising, and a comp to Q3 of 2021, which included the Tokyo Olympics, there are several bright spots among our advertising categories. First, approximately half of our television advertising categories are pacing up for the quarter. The station categories that are pacing up the most in third quarter to date include some of our most stalwart categories, such as attorneys, drug stores, home repair, manufacturing, as well as telecom and entertainment. The categories that are pacing down the most in Q3 include sports betting, insurance, and government services, most of which is unrelated to the economy. Sports betting has seen a pullback, although Kansas and Massachusetts recently approved bills legalizing online sports betting, and Ohio will launch on January 1 of 2023. Government services have been impacted as state-sponsored COVID-19 funds have begun to expire. But on the whole, we feel good about the strength of our local advertisers, the economy, and our expectations for our consolidated net revenue. On the cost side, our operating expenses are largely fixed, and our balance sheet and capital structure are both in great shape. Our leverage is only 3.3 times, and it's going lower. The recent refinancing of our senior secured term loans and revolving credit facilities reduces our annual cash interest expense by approximately $10 million a year, while also extending our maturities. We're halfway through what we expect to be another year of record financial performance for the Next Star Nation and our shareholders. As I mentioned earlier, we continue to have excellent long-term three-year visibility on our growth trajectory. In addition to political revenue this year and the presidential election in 2024, both 23 and 24 will benefit from the distribution agreement renewals covering virtually all of our subscribers during that period, which we expect will materially benefit our cash flows. As a result, we remain confident in our ability to generate pro forma average annual free cash flow of $1.4 billion on the 22-23 cycle, and we will continue to deploy that cash flow to maximize our shareholders' returns. The Board's recent approval of a new $1.5 billion share repurchase authorization further highlights our confidence in Nexstar's free cash flow growth outlook. The strength and consistency of our results and free cash flow generation remains one of Nexstar's most powerful differentiators from our peer group as well as larger diversified media companies. But beyond all of these great characteristics of our business, I am very enthusiastic about our organic growth prospects. We have a scale now that will enable us to capitalize on new opportunities that we were unable to do before as a more regionalized player. We continue to make progress at NewsNation. We are the fastest growing cable news network in the most watched genre of cable television. We offer 86 hours of news programming per week, which is four times more than we had at our launch less than two years ago. As you probably saw, our reputation as the unbiased news network helped us to land Chris Cuomo, which adds to an already fantastic group of award-winning anchors and journalists that should help accelerate our growth. We also continue to make progress on the rollout of ATSC 3.0, launching in four additional markets this quarter, and accelerating our discussions behind the scenes with potential technology and business partners for this service. With our proven business model, Nexstar has a very long runway ahead of it. While the CEO of a streamer that is now facing new competition is wrongfully predicting the demise of our sector, by the way, something we've been hearing for over 25 years, while at the same time now copying our business model, we will intend to keep just doing what we do best, executing, innovating, exceeding estimates, and growing and creating shareholder value. We have one of the best performing stocks in the media sector and are only in the early innings of harvesting the potential of our platform. And it's probably not lost on investors that while Nexstar's stock has more than doubled over the past two years, Netflix holders have lost half of the value of their shares. As we say in the TV business, stay tuned. With that, I'll turn the call over to Tom for the operations review. Tom?