Nexstar Media Group, Inc. · NASDAQ:NXST
Nexstar Media — Deutsche Bank 2014 Leveraged Finance Conference
25 slides from Nexstar Media's conference presentation, October 2014
Slide 1: Deutsche Bank 2014 Leveraged Finance Conference
NXST: NASDAQ Deutsche Bank 2014 Leveraged Finance Conference Tom Carter, Chief Financial Officer OCTOBER 2014
Slide 2: Safe Harbor
Safe Harbor In addition to historical facts or statements of current conditions, this presentation contains forward-looking statements that involve risks and uncertainties within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the company’
Slide 3: Investment Summary
Investment Summary Rapidly Growing Mid-market Consolidator Recent highly accretive, strategic acquisitions Strong cash flow model and operating leverage based on diversified revenue streams and expense management discipline Leveraging Localism Building new high growth/high margin and recur
Slide 4: Nexstar Broadcasting Group: Leveraging Localism/Driving Diversification
Nexstar Broadcasting Group Leveraging Localism/Driving Diversification Diversified Top 20 TV Group with Leading Local Franchises Nexstar’s Operating Base Reaches ~16.0% of U.S. Television Households (pro-forma for all announced transactions) 107 Television Stations / 20 Multicast channels 56 M
Slide 5: Recent Key Operational Events
Recent Key Operational Events Record Financial Results Q2 2014 1H 2014 FY 2013 Actual Change Actual Change Actual Change (in millions) Y/Y(%) (in millions) Y/Y(%) (in millions) Y/Y(%) Net Revenue $146.9 +16.4% $280.7 +17.8% $502.3 +32.7% Broadcast Cash Flow $58.7 +17.8% $109.3 +22.0% $193.0 +12.9%
Slide 6: Strong Industry Fundamentals
Strong Industry Fundamentals Broadcast Television Continues to be a Dominant Force in Consumers’ Media Lives TV Reaches More People than Any Other Medium TV is the Most Influential Local Media 96 of the Top 100 Rated Programs Most Influential of All Media Television 88% are Broadcast Programs (P18-4
Slide 7: Strong Secular Trends in Television Broadcasting
Strong Secular Trends in Television Broadcasting Driving Growth Near term Drivers: Political and Retransmission Consent Fees Double Digit Growth in Political Ad Spend Strong Retransmission Growth Local National ($ in Millions) $3,372 ($ in Billions) $4.9 $571 $4.3 $2,493 $2,734 $2,300 $3.6 $444 $1,7
Slide 8: Growth in Political and Issue Advertising
Growth in Political and Issue Advertising Strong Even Year Political and Issue Advertising Growth NXST FY Political Revenue – Even Year 2014 Key Senate and Gubernatorial Elections ($ in Millions) CAGR: 18.6% $50.0 $46.3 Record Number of Statewide Races in Nexstar Markets 2008-2012 $45.0 19 Senate Se
Slide 9: Retransmission Growth Cycle
Retransmission Growth Cycle Retransmission revenue is materially diversifying NXST’s total net revenue NXST Retransmission Revenue and Agreement Cycle (Twelve Months Ended December 31) $160.0 28.0% 25.0% Annualized Retransmission Revenue $140.0 24.0% 2014 FY Retransmission Revenue as a % of Total Ne
Slide 10: Consolidation is Reshaping the Industry Landscape
Consolidation is Reshaping the Industry Landscape Note: Pro forma for all announced transactions Source: BIA, Company filings Excludes: O & O groups, Hispanic, Religious and ION 10
Slide 11: NXST M&A Snapshot 2011 - 2014
NXST M&A Snapshot 2011 - 2014 58 Television Stations Acquired in Accretive Transactions for approximately $900 Million Closed Transactions Pending Transactions Liberty Media Corporation (2011) Hoak Media / Parker Broadcasting CCA/White Knight Broadcasting (2014) (Pending Acquisition) 2 Stations / 2
Slide 12: Accretive Acquisitions: Key Recent Events
Accretive Acquisitions: Key Recent Events From 2012 YE – 2014 Q2, NXST closed the accretive strategic acquisitions of 26 stations and 2 digital technology/services platforms for ~$505 million 2013 YE 2014 YTD Acquisition of 12 TV stations in 8 markets and Acquisition of 3 TV Stations in Iowa (Q1
Slide 13: Accretive Acquisitions: Pending Transactions
Accretive Acquisitions: Pending Transactions Nexstar has 4 transactions pending before the FCC including three accretive acquisitions representing 27 stations and the strategic divestiture of 1 station Transactions Pending Approval 19 stations in 10 markets from CCA / White Knight Broadcasting C
Slide 14: Monetizing Targeted Localism
Monetizing Targeted Localism Strong Local Platforms Drive Value at Every Level NXST’s Expanding and Diversifying Revenue Mix Monetizing the local opportunity through 2009 Revenue Mix New 2013 Revenue Mix New five-tiered high margin revenue stream Media, Political, 2% Media, Other, 6% Political, 1%
Slide 15: Local/News Programming
Local/News Programming Local News Weather / Traffic Sports Campaign Coverage Local Lifestyle Programs Local Hometown Sports Community Involvement Special Reporting Award Winning News Mobile / Digital Social Media Engagement NXST’s local news rank among top 2 in Local news operations covering 42
Slide 16: Expanding Geographic Reach
Expanding Geographic Reach Local Community Focus ARKANSAS Pro forma: 107 Television Stations in 56 markets reaching ~16% of all U.S. TV HH TEXAS Little Rock-Pine Bluff, AR (56) Harlingen-Weslaco-Brownsville-McAllen, TX (86) KARK (NBC) (O&O) KVEO (NBC/Estrella) (O&O) KARZ (MNTV) (O&O) KLRT (FOX) (LSA
Slide 17: Network Affiliation Agreements
Network Affiliation Agreements Long-term record of negotiating mutually beneficial Network Affiliation agreements Affiliation Agreements: Pro forma for all announced transactions, together ABC/CBS/FOX affiliations represent approximately 70% of affiliation core ad revenue Long Term Affiliation Con
Slide 18: Nexstar Spectrum Assets
Nexstar Spectrum Assets Medium- to Long-Term Drivers / Opportunities: Spectrum Recent M&A activity has increased Nexstar’s and Mission’s spectrum assets given their expanded scale, creation of new duopolies, and entry into new markets License Type # of 6MHz Licenses MHz-pop Full Power (Big 4 Affil
Slide 19: Financial Overview
Nexstar BROADCASTING GROUP, INC. % Financial Overview
Slide 20: Growing Two Year FCF Cycle
Growing Two Year FCF Cycle (FY) Significant Free Cash Flow Growth Since IPO NXST Free Cash Flow based on two year cycles 300 * ~$265.0 250 * ~$200.0 200 ($ in millions) 150 $165.4 100 $114.7 $80.0 $54.3 50 $41.7 $15.1 0 2003/2004 2005/2006 2007/2008 2009/2010 2011/2012 2012/2013 Organic Growth, fuel
Slide 21: Historical Financial Summary
Historical Financial Historical Summary Financial (in millions) Summary (in millions) FY Net Revenue FY Core Revenues $600.0 $400.0 Local Revenue National Revenue $502.3 $348.8 $500.0 $350.0 $300.0 $266.3 $378.6 $249.8 $237.7 $400.0 $250.0 $235.9 $247.3 $313.4 $306.5 $212.5 $300.0 $266.8 $284.9 $252
Slide 22: Q2 Financial Summary
Q2 Financial Summary (in thousands) 1) Broadcast cash flow margin is broadcast cash flow as a percentage of net revenue. Adjusted EBITDA margin is Adjusted EBITDA as a percentage of net revenue. 22
Slide 23: Debt/Leverage Analysis
Debt/Leverage Analysis Nexstar Debt/Leverage Analysis TTM ENDED 6-Mo ENDED (in millions) 12/31/2010 12/31/2011 12/31/2012 12/31/2013 6/30/2014 Revolver $ - $ 24.3 $ - $ - $ - TLB 99.5 148.1 288.3 545.4 562.8 8.875% Sr Sec 2nd Lien Notes 317.4 318.4 319.4 - - 6.875% Sr Sub Notes - - 250.0 525.7 525.6
Slide 24: Transformational Acquisitions and Operating Strategies Driving Record FCF
Transformational Acquisitions and Operating Strategies Driving Record FCF Closed and Successfully Integrated Highly Accretive Acquisitions in 2013 and 2014 Additional pending accretive M&A transactions expected to close in 2014 Pending CCA, Grant and Stainless transaction expected to deliver ~
Slide 25: Deutsche Bank 2014 Leveraged Finance Conference
NXST: NASDAQ Deutsche Bank 2014 Leveraged Finance Conference Tom Carter, Chief Financial Officer OCTOBER 2014
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