Nexstar Media Group, Inc.

Dave, and welcome to Nexstar Media Group's first quarter 2023 conference call. Today's call is being recorded. And now, I'll turn the conference over to Joe Giffoni, Investor Relations. Please go ahead, sir.

Thank you, Kyle, and good morning, everyone. Let me read the safe harbor language, and we'll get right into the call and your questions and answers. 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 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 31, 2022, as filed with the Securities and Exchange Commission, and Nexstar's subsequent public filings with the SEC. Nextar undertakes no obligation to update or revise any forward-looking statements, whether it is 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, Joe. Good morning, everyone. We appreciate you all joining us today to discuss Nextar's first quarter results. With me on the call today, Tom Carter, our President and COO, and Leanne Gleha, our CFO. I will start with a summary of our recent highlights and developments, followed by Tom's operations review and Leanne's financial review. Next, our first quarter financial results mark a very strong start to the year for the company. Record first quarter net revenues were driven by all-time high quarterly distribution revenue and the benefit of the CW acquisition, which more than offset the cyclical year-over-year decline in political and Olympic advertising. Net revenue, adjusted EBITDA, and attributable free cash flow all came in ahead of consensus estimates, extending our long-term record of exceeding expectations. We returned nearly 60% of our attributable free cash flow, or approximately $6.25 per share, to our shareholders in the form of dividends and share purchases in the quarter. While economic uncertainty and rapidly changing expectations regarding monetary policy are contributing to the turbulent markets, The scale and the financial success and strength of our highly diversified and profitable operating model, combined with our focus on execution, drove excellent results and strong shareholder returns in the quarter. Looking ahead, we remain positioned to perform well in the current environment, with over 50% of our net revenue derived from contractual and recurring high margin distribution revenue, and two-thirds of our core advertising revenue comprised of more resilient local advertising. During the quarter and subsequent to quarter end, Nexstar successfully reached new multi-year agreements with two of the largest virtual MVPDs, YouTube, TV, and Hulu. In addition to extending carriage of our big four network stations, which were up for renewal, both operators are now carrying Nexstar's MyNetwork and independent stations as well. In addition, Hulu will continue to carry Nexstar's owned and operated CW stations, and YouTube TV will initiate carriage of our CW affiliates this year. These agreements again validate what we already know to be true. Consumers and distributors value Nexstar's local content. As America's largest local broadcasting company and one of the nation's largest producers and distributors of local and national news, sports, and entertainment content, our television assets reach over 210 million Americans. As such, our stations, networks, and cable offerings continue to represent an attractive value proposition to virtual MVPDs seeking to enhance the competitiveness of their video offerings. Given recent volatility in our share price performance, driven by misplaced speculation surrounding distribution agreement and negotiations, it's important to step back for a moment and separate the reality from the noise. First and foremost, we stand behind our guidance of distribution revenue growth to be up in the high single to low double digits for 2023, excluding the benefit of the CW. In the first quarter, our distribution revenue increased 9% over last year, despite the impact of the removal of our partner stations on certain MBPDs related to ongoing contract negotiations. Second, since the first dollar of retrans revenue that we generated almost 20 years ago, Distribution negotiations have always been hard fought by both parties. There have been several cases in the past when typically private negotiations are played out publicly or Nexstar or our partner stations have been forced to go dark until we reach a fair agreement. For us, this is business as usual whether Nexstar is negotiating directly or indirectly through our network affiliation boards. We remain confident in the value that we bring to our distribution partners and with approximately 40% of our subscribers up for renewal this year, We expect continued growth throughout 2023 and beyond. In addition to posting another strong quarter of financial results, we continue to execute our strategy focused on leveraging our linear, digital, and mobile and streaming assets in new ways to drive increased monetization and growth across our portfolio. We're also driving strong momentum across our organic growth initiatives. First, we're making significant progress in our operating plan for the CWs. having executed the lion's share of our corporate overhead savings and making our key personnel appointments all by the end of the first quarter. We also launched new sports and sports-related programming, including Live Golf on the CW and 100 Days to Indy, a motorsports docuseries following the drivers and teams from IndyCar Racing leading up to the Indy 500. We're extremely pleased with the early results of our Live Golf partnership. Despite being a completely new sports league, and sports for the first time on the CW, our ratings performance to date has been significantly exceeding previously aired programming on those stations during the time period. Live Golf audiences are also increasingly engaging with Live Golf on the CW app. For the most recent Live Golf event weekend in Singapore, the CW app audiences watched for 96 minutes on average over the three-day event, and on the final day, they watched for over two hours on the app. On the advertising front, our CW affiliates are already benefiting from increased local revenue, and we expect national revenue on the network to grow over time as we air more events and establish a ratings track record. With the upfronts quickly approaching, you have seen and can expect to see a variety of new programming announcements for the CW's 23-24 season. Consistent with our plan, our programming lineup will feature a more diversified mix of scripted and unscripted shows, which we anticipate will drive ratings growth. Several of the highly acclaimed new scripted series included in our summer and fall schedules have already been written and produced and are therefore not affected by the current writer's strife. Second, NewsNation continues to build and grow, with the first quarter achieving the highest audience delivery to date. During the quarter, we launched all new NewsNation-connected television apps on a variety of major OTT and CTV platforms, We added key journalists and expanded our roster of political, legal, national security, and medical contributors. In April, News Nation marked a major cable news milestone by becoming a 24-5 news network with the debut of new expanded daytime programming as well as the launch of the network's political ensemble show, The Hill, and evening news program, Elizabeth Vargas Reports. Overall, our strategy to leverage our core competency in news to build a profitable, differentiated, and highly valuable national cable news network is delivering results. We remain the fastest growing cable news network in the most watched genre of cable television, with content that continues to be rated as unbiased and trustworthy by the leading watchdog groups. We've all seen the major changes that are taking place at the incumbents in this space, and we believe that this activity only strengthens NewsNation's ability to build awareness, audience, and profits. Finally, we continue to make progress on our deployment of next-gen TV, or ATSC 3.0. In Q1, we launched three additional markets, and as of today, we've completed the transition of stations covering 37.5% of the U.S. population. And we are well on our way to achieving our near-term goal of reaching 50% of the country. As discussed previously, Nexstar partnered with Scripps to leverage the combined power of our station portfolios, which together reach over 90% of the country. As part of our partnership, we're collaborating with Hewlett Packard Enterprise and Sony to create powerful new high-speed data solutions for businesses that are planning use cases and simulations with a variety of applications for vehicles utilized by agricultural businesses, logistic companies, and first responders. The partnership and nationwide scale of our combined coverage demonstrates why the ATSC 3.0 opportunity is more actionable now than ever before. Thanks to the industry consolidation over the last decade, we're now in a position where just two broadcast operators working together can cover the majority of U.S. television households, while before it would have required the collaboration of many operators. And aiding our effort, last month at the NAB show, FCC Chair Jessica Rosenworcel announced the Future of Television Initiative, a new effort designed as a public-private partnership to ensure a smooth transition to ATSC 3.0 for broadcasters, associated industries, and the public. We view this initiative as an important step forward as regulatory support for the transition helps expedite our time to market. We're also happy to have announced yesterday the acquisition of KUSI, an independent station in San Diego, the nation's 30th largest television market. The station is already a powerhouse local news organization, and together with our O&O station in the market, Fox affiliate KSWB-TV, we will offer more local news and information programming than all the other local stations in the market combined. The acquisition will be instrumental in expediting our transition to ATSC 3.0 in San Diego and will benefit economically from recapturing the CW affiliate on a primary signal when the affiliation becomes available in the market. We expect the transition to close later this year and to be accretive once we're able to reprogram the asset with the CW programming. In summary, we remain confident in our strategy and ability to continue to generate significant free cash flow. 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 increasing our historical compound annual dividend growth rate of 25%. Our strong free cash flow enables us not only to increase the percentage of capital returned to shareholders in the form of dividends, but also to continue to opportunistically repurchase shares, as well as reduce debt and pursue other strategic opportunities to further enhance value for our shareholders. With all of that said, let me now turn the call over to Tom Carter for the operations review. Tom?