Good day, and welcome to Nexstar Media Group's 2018 Fourth Quarter Conference Call. Today's conference is being recorded. I would now like to turn the conference over to Joe Jaffoni, Investor Relations. Please go ahead sir.

Good morning. Thank you for joining Nexstar's 2018 fourth quarter conference call. Statements and comments made by management during today's call may include forward-looking statements. Nexstar has based these forward-looking statements on its current expectations and projections about future events. Forward-looking statements include information preceded by, followed by, or that includes the words guidance, beliefs, expects, anticipates, could or similar expressions. For these statements, Nexstar claims the protection of the Safe Harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The forward-looking statements contained in today's call concerning among other things, the ultimate outcome and benefits of the announced transaction between Nexstar and Tribune Media and timing thereof and future financial performance including changes in net revenue, cash flow and operating expenses, involve risks and uncertainties, and are subject to change based on various important factors including the timing of and any potential delay in consummating the proposed transaction; the risks that are conditioned to closing of the proposed transaction may not be satisfied and the transaction may not close, the risk that a regulatory approval that may be required for the proposed transaction is delayed is not obtained or is obtained subject to conditions that are not anticipated; the impact of change in national and regional economies; Nexstar's ability to service and refinance outstanding debt; successful integration of Tribune Media, including achievement of synergies and cost reductions; pricing fluctuations in local and national advertising; future regulatory actions and conditions in the television stations' operating areas; competition from others in the broadcast television markets served by Nexstar; volatility and programming costs; the effects of government regulation of broadcasting; industry consolidation; technological developments; and major world news events. Unless required by law, Nexstar undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in today's communication may not occur. You should not place undue reliance on these forward-looking statements, which speak only of this date of this release. For more information or details on factors that could affect these expectations, please see Nexstar's filings with the Securities and Exchange Commission. Thank you for your patience with that. And it's now my pleasure to turn the conference over to your host, Nexstar's Chairman President and CEO, Perry Sook. Perry?

Thank you, Joe. Good morning, everyone, and thank you for joining Tom Carter, our Chief Financial Officer and me, today to review Nexstar's record financial performance and our outlook for 2018/2019. With our record fourth quarter and full year 2018 financial results, the December announcement of the Tribune Media transaction and our immediate work on the regulatory approval process and the development of our post-closing plans, it's been an active and productive time here at Nexstar. We believe what we've accomplished since the closing of the Media General transaction is an important guide for what we will achieve as we move toward the closing of the Tribune transaction expected later this year. Nexstar had an outstanding 2018. Our strong fourth quarter and full year operating results, mark our seventh consecutive year of record financial performance with all of our key metrics from net revenue to free cash flow, growing at double-digit rates and coming in at the highest levels in the company's history for both the three and the 12-month periods. The 22.1% rise in fourth quarter net revenue and nearly 100% increase in operating income highlight the ongoing value of our strategies focused on leveraging our local content and community involvement to generate record shares of political spending in our markets as well as continued distribution and digital revenue growth. Our ability to capture historic levels of mid-term election spending in our markets combined with the strong operating leverage in our business model drove our record fourth quarter -- a record fourth quarter BCF, adjusted EBITDA and free cash flow. For the full year, our enterprise-wide focus on managing operations for current and future cash flow enabled us to generate free cash flow of $692.7 million or about $15.20 per share, representing approximately a 31% growth over 2017 levels.…

Thanks, Perry and good morning everybody. I'll start with a review of Nexstar's Q4 income statement and balance sheet data after which I'll provide an update on our capital structure and some points of guidance. To start, as noted previously effective 01/01 of 2018, the Company adopted the new revenue accounting guidance issued by FASB. As a result, beginning on 01/01 of 2018, the Company presents local, national digital and political revenues net of their related agency commissions. This morning's release also provided the 2017, Q4 and year-to-date local, national and political revenue comps adjusted to net out the sales commissions. In addition, we no longer recognize barter revenue and barter expense related to the exchange of advertising time for certain program materials. These changes don't impact the Company's past or future income from operations, net income, BCF, adjusted EBITDA or free cash flow. Also effective at the beginning of 2018, the Company adopted an accounting standards update which requires pension and other post-retirement plans cost or credit other than service cost to be presented outside of income from operations. Thus the income from operations during the three and 12 months ended 12/31/2018 was decreased by a pension -- I'm sorry -- 12/31/2017 was decreased by a pension and other post-retirement credit of $4.2 million and $13.1 million, respectively. And I'm pleased to say that's the last time I'll have to remind everyone of those accounting changes. Now turning to the Q4 income statement. Net revenues were $798 million which was a 22% increase over the same fourth quarter -- over the same period the previous year fourth quarter of 2017. Total television ad revenue local national political was up almost 39% to $438 million with local revenue down 1.5% to $216 million and national revenue at $81.9 million which…

Thanks very much Tom. In the almost 23 years since Nexstar was founded, we remain true to our mission to deliver premium local programming and content as well as advertising solutions at the local level, now with the growing scale for advertisers as well as political campaigns. This focus is proven to be a good business for Nexstar as it consistently has positioned us to continue to invest in our business as well as reducing leverage and aggressively returning capital to shareholders and building shareholder value. Consumers brand awareness and purchasing decisions are every bit as strong if not stronger at the local level where businesses operate and transactions take place. Local diversified media companies like ours are uniquely positioned to thrive in the today's multiplatform world because we provide superior local content that is unique and relative to each of the local communities that we serve across the U.S. while operating local businesses, advertisers and brands unparalleled 24/7 marketing opportunities across all screens and all devices. At the same time, our development of complementary retrans and digital revenue streams have materially diversified our revenue mix and we continue to focus on implementing new standards and technologies to monetize the unrivaled reach, trust and influence of our leading local platform. The fourth quarter marked a strong end to a record year of financial performance for Nexstar as well as the beginning of what we expect to be a tremendous period of growth for the company with our pending acquisition of Tribune Media. As we begin to benefit from initial contributions from Tribune later this year as well as the continued double-digit growth of combined retransmission and digital revenue and a large number of distribution contract renewals up at the end of the year and what many expect to be a very substantial and possibly unprecedented spending level related to the 2020 presidential election cycle, we have excellent visibility to delivering on or exceeding our free cash flow targets and a clear path for the continued near and long-term enhancement of shareholder value through our commitment to localism, innovation and growth. With that I'd like to turn the call over to our operator to express and hear from you as to your specific areas of interest. Operator?

[Operator Instructions] The first question will come from Marci Ryvicker with Wolfe Research. Please go ahead. Q – Marci Ryvicker: Thank you. I'm surprised by the core guide for 2019. So curious what's driving positive core? Is this Nexstar specific? Is it just an overall better environment? Is it a contribution from auto? Or is it growing in spite of auto? A – Perry Sook: I would say it's a little bit of all of the above Marci. We budget conservatively for core growth this year, but I would say the absence of political has inventory back into our base that we can resell to local advertisers. Automotive is better than what we saw ending the Q4 period and 2018 and I think it's just a combination of things. I think at Main Street there is a pretty good level of confidence in the economy and so we're also beating the business for new business. So I think it's a combination of things that are driving the growth. And with January and February in the books, we are over budget on core -- our core revenue budgets for this year. And obviously in February we budgeted down because of the Olympics last year, but we have exceeded our goals in the first two months of the year, small sample size, but it's the beginning of a streak. Q – Marci Ryvicker: Got it. In terms of the Tribune deal, I have a couple of questions. It feels like you're still on part of close in Q3 despite the government shutdown. I assume that means that conversations with the regulators are going well. And then can you also update us on the timing of station divestitures? Is that forthcoming in the next couple of weeks? A – Perry Sook: Sure. The…

Thank you. The next question will come from Dan Kurnos with Benchmark. Please go ahead. Q – Dan Kurnos: Yeah, good morning, heck of a quarter guys. Just quickly to go back on the core, I think the bigger surprise in the quarter was Q4 core strength. Perry, you talked about November and December being particularly strong and we're kind of trying to do the math or crowd out. I know it's never really a clean number, but if you could give us a sense of kind of what December was up? And kind of what you think sort of ex crowd out Q4 look like that would be helpful? A – Perry Sook: Well I can tell you core December was up mid-single digit and the crowd-out thing is almost impossible to quantify because the last passenger on the plane pays the highest rate. So some of the political rates were multiples of what regular advertisers pay on a 52-week basis. So it's hard -- you would have to assume a static demand quarter-over-quarter, year-over-year and of course that's not the case. So I hesitate the comment on that because I wouldn't want to lead you down and exit ramp that goes nowhere, but we did see mid-single growth in core and as I look at Q1 core revenue, again with the comparison of February out of the mix, if I look at January and March taken together it's a mid-single-digit pacing increase on core business right now. Q – Dan Kurnos: Perfect. That's really helpful. And then obviously you had a bit of a protracting negotiation with TDS which got resolved. I know you guys talked about a pretty healthy retrans outlook. I don't know if those negotiations are getting any more contentious, but it doesn't sound like your outlook has been changed, but if you care to comment on sort of the landscape that you're seeing there? A – Perry Sook: There is a deal of contention in every negotiation and ultimately a constructive conversation. So I don't think that -- certainly we feel that this is a business and a revenue stream that we pioneered that we pay a lot of attention to it, treat it with respect and do a lot of planning and analysis before we begin the negotiations. So I -- the outage is the exception rather than the rule if you look at our track record here and I don't think that 2019 renewals will be any different from that from where we sit today. Q – Dan Kurnos: Great, and then just last Tom, I don't know if I maybe misheard you, but you said retrans up double digits. I'm assuming that was gross as your outlook -- your guys outlook changed at all for net for this year or next?

Thank you for the question. The next question will come from David Joyce with Evercore. Please go ahead.

Thank you for the question. The next question will come from Kyle Evans with Stephens. Please go ahead.

Thank you for the question. The next question will come from Zack Silver with B. Riley FBR. Please go ahead.

Thank you for your question. The next question will come from Craig Huber with Huber Research Partners. Please go ahead.

Thank you. The next question will come from Steven Cahall with Royal Bank of Canada. Please go ahead.

Thank you for the question. We have a question from Jim Goss with Barrington Research. Please go ahead.

Thank you. The next question will come from Barton Crockett with BCS Stocks [ph]. Please go ahead.

Thank you. The next question will come from Ryan Vaughan with Needham. Please go ahead. Q – Ryan Vaughan: Hi Tom and Perry, thanks for taking my question. Just Tom, you mentioned the -- I'm sorry Perry you mentioned that the $10 billion or $11 billion. I actually have a retrans question for you. So you've talked about double-digit growth for years to come. I'm just curious how do you think about that? Whether it's coming from virtual MVPD sub growth? Or is it the distribution options with the pricing expense? Or is it coming from some of the lower viewership channels that are getting bumped off certain packages fully recognized in the bigger picture that broadcast is under earning relative to what cable is getting today? This is a big picture question there. A – Perry Sook: Yes if you look at 2019, the estimate is that total distribution payments are $50 billion and we're getting, let's call it $10 billion or $11 billion. So we're somewhere between 20%, 22% of the pie and that's for all television stations in aggregate. And all television stations in aggregate typical MVPD home generate 35% of the cumulative viewing. So I would say that's your bid and ask to begin with, we won't even get into a quality of content, premium content and what people really want which is the local television stations. But we're right now at about $1.6 million in OTT sub-counts and that number is probably a little less than the actual because there is a payment lag on that from the networks who are paying us to be part of their offering. And so that is a growth driver. Again we've seen our sub-count declines really level off. I think people kind of get the bundle and the value of the bundle when they don't have four remotes on the coffee table again. And so broadband plus video and navigation is pretty powerful. And so -- but I think the primary driver is going to be from getting our fair share of the distribution bundle and I think that will occur over the next couple of cycles which would be three to six years basically.

Thank you. The final question will come from Dennis Leibowitz with Act II Partners. Please go ahead. Q – Dennis Leibowitz: Yes wouldn't the same factors that are causing you to raise your free cash flow estimates moving from 2018-2019 to 2019-2020 for core apply to the Tribune stations as well meaning that the total 1950 or even 2050 would be higher than that? A – Tom Carter: We're not prepared to comment on Tribune 2019-2020 free cash flow guidance yet. There's a lot of moving parts that goes into that. I think we want to do it once and we want to do it with full information from synergies, from diligence, from financing, from divestitures et cetera, but we're just speaking for the Nexstar at this point.

Thank you, speakers. This concludes the Q&A portion. I'll turn it back to you for closing remarks.

Well thank you all for joining us today and celebrating our record Q4 2018 and full year 2018 results. We look forward to gathering again in three months' time not only to report on our Q1 results, but to update you on the Tribune divestiture process and the Tribune process overall. So thank you for joining us today and we look forward to catching up down the road.

Thank you. Ladies and gentlemen, this concludes today's event. You may now disconnect your lines.