Good day, ladies and gentlemen and welcome to the Fourth Quarter 2012 Media General Earnings Conference Call. My name is Charissa, and I’ll be your coordinator for today. At this time, all participants are in a listen-only mode. We will be facilitating the question-and-answer session towards the end of this conference. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes. I will now turn the presentation over to your host for today's conference, Ms. Lou Anne Nabhan, Vice President of Corporate Communications. Please proceed.

Thank you, Charissa, and good afternoon everyone. Welcome to Media General’s fourth quarter conference call and webcast. Earlier today, we announced fourth quarter and full-year 2012 results. The press release is on our website. A transcript of the comments from today's call will be posted immediately after the call and a replay will also be available. Today’s presentation contains forward-looking statements, which are subject to various risks and uncertainties. They should be understood in the context of the company’s publicly available reports filed with the SEC, including the section on Risk Factors. Media General’s future performance could differ materially from its current expectations. Our speakers today are George Mahoney, who became Media General’s President and Chief Executive Officer on January 1st and Jim Woodward, Vice President, Finance and Chief Financial Officer. Let me now turn the presentation over to George.

Thank you, Lou Anne, and good afternoon everyone. I am delighted to speak to you for the first time as Media General’s President and Chief Executive Officer. I met with a number of our shareholders, other investors and industry analysts in November and December. These meetings will continue; they’re a priority for me. I also look forward to working with the reporters and editors who cover our company and the broadcast industry, some of whom may be listening to this call. Media General begins 2013 as a vastly different company compared to where we were a year ago. Last year, we had a portfolio of newspapers, television stations and advertising services businesses, and we had debt refinancing needs. We enter 2013 having divested our newspapers and advertising services businesses and having refinanced our bank debt with maturity in 2020. We also have a significant new stockholder, Berkshire Hathaway. These are truly transformational changes for our company and they were accomplished fast. We’re delighted with our new business model as a pure-play broadcast television and digital media company. The expanded opportunities provided by our new model give us a bright future. We’re now moving forward with excellent performance, serving our customers in new ways across multiple platforms, adapting quickly and living our core values of integrity, quality and innovation. Operationally, 2012 was an outstanding year for Media General, marked by strong performance in our core broadcast advertising revenue. So we benefited not only from Political spending, the Super Bowl and the Olympics, but also from growth in key local and national advertising categories, particularly automotive. Broadcast cash flow for the full year was $146 million. EBITDA was $112 million. Our full year performance included an outstanding fourth quarter for Media General’s television stations. I’ll summarize our fourth-quarter results. Broadcast cash flow…

Thank you, George. Since George covered revenues in detail, let me start with our expenses. Total operating costs in the fourth quarter were $66 million, compared with $62 million in the prior year. This increase reflected additional affiliate fees for our NBC stations, a five day furlough repayment in December 2012, and an increase in commissions due to the strong revenue performance. Also in the fourth quarter of 2012, there is a $2 million expense related to fixed assets. This was primarily a reduction in the carrying value of a building in Richmond that we have listed for sale. Operating expenses in the fourth quarter of 2011 included savings of almost $2 million from the company-wide furlough program. Total corporate and other expense in the fourth quarter was $101,000 compared with $9.6 million last year and included two large non-recurring gains in the current quarter. The gains included a non-cash curtailment gain of more than $2 million resulting from former newspaper employees leaving the company's post retirement plan and a $5 million non-cash gain resulting from outsourcing disability coverage for substantially all Medicare eligible participants. Referring to the corporate expense supplemental table provided in our press release, the first line of table shows our corporate expense in the fourth quarter of 2012 was $6 million compared with $7 million in the prior year. This excludes the two non-recurring gains I just discussed. This 13% reduction reflected savings from the July 2012 downsizing in our corporate staffing and favorable benefit adjustments as a result of fewer employees. For this line, we've entered 2013 at our new annual run rate of $20 million. Total interest expense in the fourth quarter was $21 million. Of that total, cash interest paid was $16.7 million, non-cash interest expense was $2.6 million and accrued but not…

Thank you, Jim. To summarize, because of our strong operating track record and the steps we've taken to transform the company, Media General has a bright future. We've a portfolio of top ranked stations located in attractive growing markets. This is the time of great opportunity for us and we have a clear path forward. For 2013 as is typical and an odd year in our business, total revenues will decrease from last year due to the absence of non-recurring political and other event driven revenues. We have in place a number of key revenue drivers to help offset these expected declines. In the November ratings, our household numbers were up. We also start with higher core market share numbers and all of our stations had business development programs in place to further increase local time sales. We expect political revenues of at least $5 million from the Virginia guber-natorial race from the [Carey] Senate race in Massachusetts which will benefit our Providence station from congressional races in Alabama and South Carolina and from issue advertising across a number of our markets. The Super Bowl on CBS will benefit eight of our television stations. Our retransmission revenues will increase by 50% based on contracts already renegotiated. Our digital business will grow at a better than industry rate. In a near-term, we are focused primarily on organic growth initiatives. In 2013, we will increase our market share, grow our existing products, introduce new products that will serve our local audiences and advertisers and improve our cash flow margins. Our stations additionally we are investing in research and they have shown they can react quickly to changing consumer interest in their markets. We care deeply about new technology both the opportunities it presents and to keep our people and our industry focused forward. We know our market leading stations will deliver a solid year in 2013. And now we will be pleased to take your questions.

(Operator Instructions) And your first question comes from the line of Barry Lucas with Gabelli & Company. Please proceed.

Couple of quick ones and then maybe something more high level, but any color you can provide on 1Q pacing and particularly any shading with some of the key categories like auto?

Well, I think it’s a little early to put too sharp (inaudible) on the first quarter, but we are not seeing any pitfalls in the first quarter, really to the contrary, here is how we are looking at the first quarter and beyond, Barry. We had into the first quarter with improved November ratings across our stations, so we are in a strong selling position in each of our markets. We are similarly well positioned because we saw core growth into the first three quarters of 2012, as the period I mentioned where we have all the numbers. And we are comfortable that our core share growth also continue through the fourth quarter. We had a Super Bowl on our eight CBS stations this weekend and we’ve done very well of selling the game. We expect double-digit growth over a 2010 Super Bowl number which is the last time CBS had the game. As I said, retrans will be at 50% over 2012 based on contracts already negotiated. Our digital revenues will increase significantly and that means they are better than industry rates, and there is political upside for us, not just for the Virginia guber-natorial race and issue advertising, but also where the Alabama race I mentioned, interesting house race in South Carolina for Tim Scott’s seat and (inaudible) Senate seats. As you know our WJR station in Providence (inaudible) a significant portion of its signal over the Southern part of Massachusetts and if people want to reach those voters in Massachusetts they know they need to go to WJAR. So as I said, we feel that the quarter and the year are both very solid. Does that help?

That is helpful George, and let me just move maybe to something structural, historically newspaper publishers have had the two class structure of the stock in ostensibly to provide editorial independence and that sort of thing. But you've gotten rid of the newspapers and your pure play broadcaster and you have I guess in terms of a back stop for any reasonable purposes you have the FCC and license oversight. So what if any thoughts have you given to collapsing the structure of the AB stock in the hopes as an investor to perhaps narrowing the multiple gap between Media General and some of its peers.

I appreciate the question Barry, and the true answer on that one is it’s a little bit above my pay grade. But probably practical answer is that I don't see any changes there. We are comfortable with the structure. We acknowledge the issues that it presents, but its one that we have and its one that frankly would be very difficult for us to change.

And your next question comes from the line of Mario Gabelli of Gabelli & Company.

I just wanted to say welcome to the investment world George and it’s a debut. I wouldn't have been as genteel as Barry. I don't think you need the AB stock and I think it would be a great service toward the whole world if the B holders convert to A at some premium. Anyway on a more of mundane note you have a big NOL, your interest expense is obviously the same as an after tax charge. It is pretty draconian shift in the wealth as we've talked about in the past from the debt or from the equity holders and the debt holders. Tell us what's your framework here. You got the next trench of bonds come up when the public…

February next year Mario.

And the coupon on that?

11 and three quarters.

Okay and you are talking to your bankers; you've got some pretty good people on the Board that are in the private finance world. I forget the guy’s name from Omaha but in any event he is not on Board. What's your sense here of what if you refinance those within some period of time what the going rate is.

Let me leave Jim Woodward to the specifics on interest rates. As you know the bonds are callable at 106 and they are trading now at a significant premium. So there isn't very much we can do about that right now.

Yeah if they are callable at 106, you can buy them at 106, it’s not complicated.

Not today we can't.

But you say they are callable on next year?

They are in February next year ’14.

Exactly.

I take your point and we would love to be able to call them now.

No, I got it, you are going to call them at that time, but the question that is you know you've got a very high cost of interest rates and one is the big equity holder whose clearly would help the equity portion of its portfolio and I'm just trying to get a handle on how you are approaching the fixed income balance sheet side of the equation.

Well let me ask Jim Woodward to give you a little bit more color Mario, thanks.

And Jim so that I got that right, because I was trying to listen to three calls at one time, 312 million NOL?

370.

Thanks for clarifying it.

So I checked this morning the bonds are trading at 114, 115 range. So just to put a period on that point, it doesn’t make sense for us to.

And the holder of the bond is going to lose eight points because you are going to call him February. So he is going to give 106 plus his coupon, minus, you know, and he is looking at that relative to alternative interest rates. Everybody has got a sharp pencil out there.

Yes, they really do. To answer your question, one of our advisors are telling us that in February ‘14, provided the credit markets are still in good shape and we wouldn’t be unreasonable for us to expect if we went with the bond to get between 7% and 8% on it.

That sounds fair and you can lock that in some serious stuff that you got. Just beat up on Todd and Ted and --.

Remember the bank, the traditional bank lend, the rate would be something lower.

Yeah, but you will figure it out. I just wanted to understand how quickly you could do that. I mean it sounds like you are already pretty far along and it's already 12 months away. Then you have another holder of debt that has a coupon. What's the coupon and the other holder of debt, I know [Barry’s] spread sheets are in front of you he is on the sell side, I am on the buy side. So he does all the work.

10.5.

That's an also, obviously, given your cash flows of BCF, there is an opportunity there as well. Anything other than Stuart looking like a hero and converting the B to an A of small premium, anything else that we should think about in terms of financial engineering?

In the short term, no. The focus is on those 2017 bonds.

No, that part I understand.

And your next question comes from the line of David Cohen of Midwood Capital. Please proceed.

Question to a degree that there is some revenue decline from lack of political or political declining in 2013, how should we expect your station production expenses will behave? How variable are those costs?

I know that I would tie the two things political and station…

Not real, but political is primary source of overall revenue decline that’s the only reason I point that out. I mean it would be hard for you to grow revenue in 2013 is what I am saying.

There is a big delta there but we are also working very hard on putting back as much of that as possible as you would expect.

But so how should your production expenses behave relative to revenue?

Let me ask Jim if he can give us a little of color on that.

I think the obvious one is the fees and commissions that we will pay won’t be as high as a result of not having the political. Although I just have to power on to what George said, we have a lot of plans in place to replace a large part of that and hopefully all of it. So that will be one thing where there will be a variable expense with that which in; and other than that they are not allowed obvious levers that go along with that. Our expenses will be in line with the industry as far as salary increases or projected salary increases those kinds of things, so we don’t expect any significant increases.

I’d add David one more thing and that is you saw our CapEx numbers in 2012 and in 2013 they will be slightly reduced from those numbers. So we are modeling to look at $15 million number.

Okay, and speaking to commissions, obviously you can back in to what the gap is between the gross revenue provided across those different revenue sources local, national, political etcetera and you get the station revenue which is net of agency commissions and that rate is actually vary a lot throughout the year. So from a modeling perspective, what portion of your gross revenue will go to agency commission as we look forward to 2013?

I don't have that in front of me, because it is just not something we focus on. I know our commission rates but those are paid to a rep agency and internally are competitive, they are not high, they are not low. So on a local level if they were up, think we couldn’t attract good talent and we have a good national rep relationship and we get the very competitive rates on that one.

But David I’d use the industry number if you’ve got one.

Okay, and one last comment not a question, but given the occurrence in the fourth quarter of the two benefits that were pretty material and might be useful to see not just an adjusted EBITDA or [BCF] but or not just EBITDA or [BCF] but something that adjust four non-recurring item as you guys sort of package your quarterly performance, thanks.

And your next question comes from the line of David (inaudible) of Wells Fargo Securities. Please proceed.

The Super Bowl you mentioned on CBS was on NBC last year I believe?

It was. We had with our NBC stations last year yes.

So would you expect incremental revenue because you have eight NBC stations versus I guess eight CBS stations in 2013?

I don't think I was looking at it that way. I think the way I look at it is how much better we do than we did with our CBS stations in 2010. NBC stations are in different markets and so you are really not looking at apples and apples when you do that. There are more apples and apples comparison would be 2010 versus 2013.

And you mentioned retrans I believe up 50% this year, are you baking in any contract renewals for this year?

Not so.

No, so that do you have any sizeable contracts to come up for renewal in ’13?

We do. We have a dish contract that comes up at the end of June and it is for about 11% of all of our households.

Okay, that's a big one. So that could potentially benefit you guys back half and in ’14 and beyond?

Yes, however I can't speculate beyond that.

Fair enough. Okay and then on the cash outlays for ’13 you laid out CapEx interest pension, how should we think about payments to NBC, I believe in 8-K you filed in December said a minimum of $8 million to $10 million, what's the right way to think about that?

The right way to think about it is exactly the way we put it in the 8-K. That's as close as I can get for you.

Okay, good deal and then finally local national 4% in aggregate for Q4. I noticed that there was an extra week in the quarter compared to last year is that an immaterial effect or what would be more of an apples-to-apples comparison there.

Jim, you want to speak to that?

Yeah the extra weight undoubtedly contributed positively to the year, but with so many variables being within the advertising market and the fact that it was between Christmas and New Year, it will be highly subjective of me on how you might quantify that.

Yeah, just interesting, I mean what's the political crowd out, did you guys see that at all during the quarter, I mean obviously.

Political?

Yeah, political crowd out.

Obviously let me speak to it just for a second, because obviously we were seeing it. But the real story for us on 2012 fourth quarter is how hard our people came back after the election to put those local dollars back in and that's why the market share numbers that I was talking about are so important to us. They reflect just flat out hustling in the marketplace and doing a terrific job, speaking with and helping our core local advertisers. So we are really proud of our people for that.

Is that something you could break out like local, national by month in the quarter or are we…

We get all the audited numbers in and we could give you something there.

(Operator Instructions) And your next question comes from the line of Lance Vitanza of CRT Capital Group.

You alluded to some increased expense associated with the new NBC deal on the press release, and I apologize I missed the beginning of the call but could you elaborate on that a bit.

Lance you know the best place to go there is an 8-K we filed as soon as we signed that deal with NBC and that will give you the detail that we can give you.

Did their share of your Retrans revenue go up?

Not quite sure how to answer that. What we do is, I mean, those two things just really aren’t related.

So, you are saying that NBC has no, they are not getting any piece of your Retrans dollars?

Well we pay fees to NBC, but we don’t pay specifically in connections with Retrans dollars. So that’s just not a fair way to look at it.

I understand. So it's not as though, for example, you know, you go out and increase the amount of Retrans that you negotiate with one of your cable partners and suddenly they are taking percentage of that. You pay them a fixed amount or an amount that in any case is structured in some other way and that leaves you free to go out and negotiate better Retrans deals and you capture 100% of that incremental revenue.

Yes.

(Operator Instructions)

Thank you all. Is there anybody else out there?

No, you have no further audio questions.

Well, we thank you all for your interest in Media General. It is wonderful to be sitting in this chair with a transformed company. As you’ve heard, 2013 should be a great year for Media General and we hope you will continue to tune in to our calls. We think you will like what you hear. Bye, bye. Take care.

Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect. Good day.