Nexstar Media Group, Inc.

Good day and welcome to Nexstar Media Group fourth quarter and full year 2022 conference call. Today's call is being recorded and I now like to turn the conference over to Joey Giaffone, Investor Relations. Please go ahead, sir.

Thanks Priscilla and good morning everyone. I'll first read the safe harbor language and then we'll get right into the call. 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. Next, our 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 this call. For additional details on these risks and uncertainties, please see Nexstar's annual report on Form 10-K, for the year ended December 31st, 2021, as filed with the Securities and Exchange Commission, 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. With that, it's now my pleasure to turn the conference over to your host, Nextar Chairman and CEO, Perry Suk. Perry, please go ahead.

Thank you, Joe, and good morning, everyone. We appreciate you joining us today to discuss Nexstar's outstanding fourth quarter and full year financial results. As always, with me on the call this morning are Tom Carter, our President and Chief Operating Officer, and Leanne Gliha, our CFO. I'll start with a summary of recent highlights and developments. That will be followed by Tom's operations review and Leanne's financial review, and then we'll open the call for questions from you. It's clear from our results that 2022 was a monumental year for Nexstar and a referendum on the power of the broadcast model and its ability to deliver audiences at scale and strong levels of free cash flow. Full year net revenue, adjusted EBITDA, and attributable free cash flow reached new all-time highs. We exceeded the $5 billion annual revenue milestone for the first time in the company's history, and we delivered record adjusted EBITDA, attributable free cash flow of $2.2 billion and $1.5 billion respectively. Overall, our full year top and bottom line performance was led by strong year-over-year growth in political advertising, distribution revenue, as well as digital revenue. Double-digit attributable free cash flow growth enabled us to return approximately 68% of our 2022 attributable free cash flow, or a record of $1.02 billion to our shareholders in the form of share repurchases as well as dividends. In addition to posting another blockbuster year of financial results, Nexstar achieved a number of strategic and operational accomplishments that are positioning our company for future growth while enabling us to continue delivering the financial performance, cash flows, and shareholder returns that investors have come to expect from Nexstar. On the strategic side, we acquired a 75% interest in the CW network for no purchase consideration, adding a national broadcast platform to our portfolio, another asset, in addition to NewsNation and ATSC 3.0, that will be capable of contributing long-term outsized growth to the company. Operationally in the fourth quarter, we renewed and extended our network affiliation agreement with ABC on terms favorable to the company, and we successfully renewed and extended distribution agreements with our largest MBPD partners on terms that will enable Nexstar to enjoy continued annual growth in distribution revenue for the foreseeable future. Our ability to execute on these renewals just reinforces what we already know, that broadcast matters. Today, broadcast television remains the only place for content creators, sports organizations, team owners, and most importantly, advertisers to access local audiences at scale. We have developed these audiences over decades by consistently providing top-rated local news, sports, and entertainment content. We provide reach that no other medium can, especially for sports content, where accessing the fan base both nationally and in local markets is important for advertisers and brands. As the largest local broadcaster, Nexstar is important to both our network partners and our MVPD partners, which provides us with a very strong negotiating position. In turn, our portfolio of local and national media assets now provides nationwide reach on par with other broadcast networks, combined with local activation at a greater scale than any other broadcast network owner, creating a differentiated and highly attractive value proposition for advertisers, brands, content owners in an increasingly fragmented marketplace. We continue to expand our capabilities and leverage our linear, digital, mobile, and streaming assets in new ways to deliver new levels of monetization, growth, and shareholder returns. Our ability to generate record results and excellent shareholder returns underscores the benefits of our unique scale, the strength of our operating model, and our ability to consistently generate substantial free cash flow. Nexstar was one of only four stocks that was up in all of media and entertainment in 2022, which we believe is a testament to our ability to create shareholder value through free cash flow generation, return of capital to our shareholders, and our ability to continue to grow our revenue streams. And we've seen a lot of our competitors in the media industry with broadcast assets take notice, suddenly remembering the lion's share of their revenue and profit come from that tried and true, effective and profitable broadcast medium. Before handing the call over to Tom, I want to briefly touch on a few updates on our organic growth prospects. Starting with core advertising, with our portfolio of strong national and unparalleled local broadcasts, we believe that Nextar has the ability to improve our core advertising by uniting our go-to-market strategies under the one united Nextar platform, using data-driven strategies to achieve our clients' objectives. To that end, we have recently appointed experienced sales and advertising executive Michael Strober to the newly created position of EBP and Chief Revenue Officer, responsible for leading the execution of a new advertising sales and go-to-market strategy for the company, which is designed to accelerate the monetization of our platform with a focus on the national advertising opportunity, which is roughly double the size of the local advertising market that Nexstar has predominantly served historically. Second, we continue to make significant progress building out News Nation, America's fastest-growing cable news network. This past year, we expanded weekday news programming to 17 hours per day, made key journalist and editorial editions, and are completing production facility expansions in both New York City and in Washington, D.C. While still early, our strategy of providing unbiased news for all America is already delivering results as News Nation was the only cable news network to see double-digit growth in total viewers in 2022. Our programming continues to be recognized by watchdog groups for its independence, and we believe this is the type of content that journalists want to report and audiences want to watch. Our ability to attract top-tier talent and make good progress on ratings with January 2023 marking NewsNation's highest-rated month to date all only reinforces that view. Third, we are already making progress with the CW, not only to bring the network to profitability, but to create value for the entire Nexstar enterprise as a result of the acquisition. At the Nexstar level, we see the CW as instrumental to our ability to unlock the national advertising opportunity I discussed just a moment ago. And in our recent distribution renewal negotiations, our ownership of the CW positively impact the outcomes of those discussions by an amount that already effectively paid for the investment that we'll make in the network. At the CW level on the programming front, while we are locked into most programming for the 22-23 broadcast season, we've already taken action to improve and diversify our content to better align with audiences through our exclusive multi-year broadcast rights agreement with Live Golf. Beginning with the Live Golf season, which kicked off last Friday, the CW will air 14 global events and stream the events live on our CW app. We also have begun to execute on our cost savings plan by reducing redundant functions at the network, and we've hired new top-tier executives with backgrounds at Fox, NBCUniversal, HBO, Pop TV, and Google to lead our programming and distribution strategies. These are results-driven professionals who share our excitement and our vision for the network, and we continue to expect to achieve profitability by 2025. Finally, Nexstar continues to lead the industry in total deployment of ATSC 3.0, or Next Gen TV, with markets reaching approximately 35% of the U.S. households, and we have a goal of reaching 50% of the U.S. populations with ATSC 3.0 signals via our stations by the end of this year. Discussions with potential technology and business partners for this service are ongoing, and we continue to believe the revenue opportunity for applications is your spectrum. could rival our retransmission revenues by the end of this decade. In summary, we remain confident in our strategy, the quality of our assets, and the strength of our financial position. Consistent with our capital allocation priorities and focus on enhancing shareholder value, in January, the Board of Directors increased Nexstar's quarterly cash dividend by 50% to $1.35 per share per quarter, substantially exceeding our historical compound annual dividend growth rate of 25%. Our strong free cash flow enables us not only to increase the percentage of capital return to shareholders in the form of dividends, but also allows us to continue to opportunistically repurchase shares as well as reduce debt and pursue other strategic opportunities to further enhance shareholder value. Looking ahead, 2023 will benefit from the renegotiation of our distribution contracts representing more than half of our subscribers during 2022. And 2024 will benefit from the presidential election year political advertising cycle, as well as additional distribution contract renewals at the end of this year. For the 23-24 cycle, we expect to generate pro forma average annual attributable free cash flow of approximately $1.25 billion, inclusive of our approximate $90 million attributable to the investment losses associated and tax benefits related to our turnaround of the CWU. With all of that said, let me now turn the call over to Tom Carter for the operational review. Tom?