Press release

Nexstar Media Group Reports Record First Quarter Net Revenue of $626.6 Million

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Nexstar Media Group, Inc. (NASDAQ: NXST) (“Nexstar” or “the Company”)
today reported financial results for the first quarter ended March 31,
2019 as summarized below.

Summary 2019 First Quarter Highlights

  Three Months Ended March 31,    
($ in thousands) 2019   2018 Change
Local Revenue $ 188,166 $ 193,268 (2.6 )%
National Revenue $ 63,678 $ 67,045 (5.0 )%
Political Revenue $ 1,307 $ 9,266 (85.9 )%
Television Ad Revenue $ 253,151 $ 269,579 (6.1 )%
Retransmission Fee Revenue $ 313,974 $ 275,941 +13.8 %
Digital Revenue $ 52,835 $ 62,804 (15.9 )%
Trade / Other Revenue $ 6,687 $ 7,012 (4.6 )%
Net Revenue $ 626,647 $ 615,336 +1.8 %
Income from Operations $ 127,074 $ 117,616 +8.0 %
Net income $ 56,887 $ 47,341 +20.2 %
Broadcast Cash Flow(1) $ 207,730 $ 204,503 +1.6 %
Broadcast Cash Flow Margin(2) 33.1 % 33.2 %
Adjusted EBITDA Before One-Time Transaction Expenses(1) $ 183,762 $ 182,091 +0.9 %
Adjusted EBITDA(1) $ 178,365 $ 181,110 (1.5 )%
Adjusted EBITDA Margin(2) 28.5 % 29.4 %
Free Cash Flow Before One-Time Transaction Expenses(1) $ 125,762 $ 122,449 +2.7 %
Free Cash Flow(1) $ 120,365 $ 121,468 (0.9 )%

(1) Definitions and disclosures regarding non-GAAP financial information
including reconciliations are included at the end of the press release.

(2) 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.

CEO Comment
Perry A. Sook, Chairman, President and Chief
Executive Officer of Nexstar Media Group, Inc. commented, “Our record
first quarter 2019 results, before one-time expenses, reflect another
period of operating and growth momentum and represent the start of a
very exciting year for Nexstar as we balance our focus on current
operations, including preparations for the 2020 election cycle and a
significant level of retransmission consent agreement renewals, with the
expected completion of the highly accretive Tribune Media transaction
later this year. We generated record first quarter net revenue, despite
the absence of non-recurring political and Olympic revenue, which led to
record first quarter operating income, net income, BCF, Adjusted EBITDA
and free cash flow of $125.8 million before $5.4 million of one-time
transaction expenses. For the quarter, we delivered about 20% of every
net revenue dollar to the free cash flow line allowing us to invest in
our local media platform and content as well as initiatives to drive
shareholder returns. Reflecting our return of capital, leverage
reduction and total shareholder return focus, during the first quarter
we paid down funded debt by approximately $92.0 million while returning
approximately $21.0 million to shareholders through our recently upsized
quarterly cash dividend.

“During and just subsequent to the end of the first quarter we announced
three definitive divestiture agreements marking further progress with
our comprehensive regulatory compliance plan which moves us closer to
completing the strategic and financially compelling Tribune Media
transaction. In aggregate, and concurrent with the closing of the
Tribune transaction later this year, we will divest a total of 21
stations in 16 markets for gross proceeds of $1.36 billion. The total
gross proceeds from the proposed station divestitures exceed our initial
estimate by approximately 36%, while the cash flow to be divested,
inclusive of the elimination of certain synergies, is less than those in
our prior projections. As a result, our borrowings and leverage will be
lower than anticipated at closing which collectively serves to reinforce
our confidence that the Tribune transaction will result in approximately
46% growth in Nexstar’s average annual free cash flow in the 2018/2019
cycle to approximately $900 million.

“First quarter television advertising revenue excluding political
advertising declined by $8.5 million or 3.3%, reflecting approximately
$20.0 million of Winter Olympics net revenue recorded in the comparable
2018 period, which was non-recurring in 2019. Excluding political, TV ad
spending increased by low single digits on a percentage basis in January
and March, partially offset by a high single digit decline in February
related to the absence of Olympic ad spending. Importantly, our local
teams remain on track to meet our full year expectations for
non-political television advertising revenue growth in the low
single-digit range.

“Combined first quarter digital media and retransmission fee revenue of
$366.8 million rose 8.3% over the prior-year period and accounted for
58.5% of net revenue compared to 55.1% of net revenue in the 2018 first
quarter, illustrating again the positive and ongoing shift in our
revenue mix. Retransmission fee revenue increased by $38.0 million or
13.8% over the prior-year period, reflecting recent renewals of
distribution agreements with multichannel video programming
distributors, and contributions from distribution agreements with
various OTT providers. With retransmission consent agreements
representing approximately 10.0% of our subscriber base renewed in late
2018 and more than 70% to be renewed by 2019 year-end, continued revenue
growth from this source remains highly visible for 2019 and beyond.
First quarter 2019 digital revenue declined by approximately $10.0
million or 15.9%, primarily due to marketplace changes which affected
select demand-side platform customer buying with local customer buying
trends remaining on track, as well as approximately $1.0 million of
cyclical Winter Olympics net digital revenue recorded in comparable 2018

“The rise in first quarter station direct operating expenses (net of
trade expense) primarily reflects the growth in budgeted increases in
network affiliation expense. The $4.0 million or 3.4% decline in SG&A
expense primarily reflects the decrease in variable costs of our legacy
stations related to special political programming and sales that
occurred in the 2018 first quarter. First quarter corporate expense
excluding non-cash compensation and one-time transaction expenses was
essentially flat, and in line with our expectations.

“Overall, we believe our first quarter results continue to highlight the
value of the strategy we’ve successfully executed for over 23 years.
During this period, the Company has grown from a single station to
become an industry leader based on our disciplined approach to
completing accretive acquisitions, a focus on enhancing the operating
results of acquired stations and digital media properties, and an
organization-wide commitment to localism. At the same time, our
development of complementary retransmission 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 platforms. We also we
continue to raise our commitment to support the evolving needs of the
viewers, businesses and local communities that we serve each day by
working with our network partners and distributors to deliver our
content anywhere, anytime and on any device. This approach has
positioned Nexstar to continue investing in our business and our
employees, while reducing leverage and returning capital to shareholders.

“Since the beginning, Nexstar has remained true to our mission of
upholding the public interest principles of localism, diversity and
unbiased broadcast journalism. In the face of our unregulated
competition, our company and industry continue to support the
preservation of democratic life in America by putting in the hard work
and making the investments necessary to deliver the local stories that
matter to our local communities who rely on our stations to sort the
facts from falsehoods. As Nexstar stands at the precipice of completing
our transformative acquisition of Tribune Media making us the largest
company in local television broadcasting, we have identified many
opportunities in acquired markets to add more local programming and
enhance overall community involvement. Similar to the Media General
transaction, the resources of the combined company will allow us to once
again expand our Washington DC news bureau, as well as fund and create
additional news bureaus in state capitals across our footprint and make
other enhancements focused on expanding audience reach and engagement.

“Looking ahead, with significant and growing free cash flow and the
expected closing later this year of the Tribune Media transaction,
Nexstar is positioned with the financial capacity and flexibility to
reduce leverage while returning capital to shareholders and in January
we announced a 20% increase in the amount of our quarterly cash
dividend. As we begin to benefit from initial contributions from Tribune
later this year, the continued double-digit growth of combined
retransmission and digital revenue, a large number of distribution
contract renewals at 2019 year-end and the return of the political cycle
with the upcoming 2020 presidential election, we have excellent
visibility to delivering on our free cash flow and leverage targets and
a clear path for the continued near- and long-term enhancement of
shareholder value.”

The consolidated debt of Nexstar and independently-owned Variable
Interest Entities (VIEs) including, Mission Broadcasting, Inc., Marshall
Broadcasting Group, Inc. and Shield Media, LLC (collectively, the
“Company”) at March 31, 2019, was $3,892.8 million including senior
secured debt of $2,324.7 million. The Company’s total net leverage ratio
at March 31, 2019 was 3.57x and first lien net leverage ratio at March
31, 2019 was 2.09x compared to a covenant of 4.25x.

The table below summarizes the Company’s debt obligations (net of
financing costs and discounts):

($ in millions)     3/31/2019       12/31/2018
Revolving Credit Facilities $ 5.6 $ 5.6
First Lien Term Loans $ 2,319.1 $ 2,407.5
6.125% Senior Unsecured Notes $ 273.6 $ 273.4
5.875% Senior Unsecured Notes $ 405.8 $ 406.2
5.625% Senior Unsecured Notes $ 888.7 $ 888.2
Total Funded Debt $ 3,892.8 $ 3,980.9
Cash on Hand $ 128.6 $ 145.1

First Quarter Conference Call
Nexstar will host a conference
call at 10:00 a.m. ET today. Senior management will discuss the
financial results and host a question and answer session. The dial in
number for the audio conference call is 334/323-0509, conference ID
6276693 (domestic and international callers). Participants can also
listen to a live webcast of the call through the “Events and
Presentations” section under “Investor Relations” on Nexstar’s website
A webcast replay will be available for 90 days following the live event

Definitions and Disclosures Regarding non-GAAP Financial Information
cash flow is calculated as net income, plus interest expense (net), loss
on extinguishment of debt, income tax expense (benefit), depreciation,
amortization of intangible assets and broadcast rights (excluding
barter), (gain) loss on asset disposal, corporate expenses, other
expense (income) and goodwill and intangible assets impairment, minus
pension and other postretirement plans credit (net), reimbursement from
the FCC related to station repack and broadcast rights payments. We
consider broadcast cash flow to be an indicator of our assets’ operating
performance. We also believe that broadcast cash flow and multiples of
broadcast cash flow are useful to investors because it is frequently
used by industry analysts, investors and lenders as a measure of
valuation for broadcast companies.

Adjusted EBITDA is calculated as broadcast cash flow, plus pension and
other postretirement plans credit (net), minus corporate expenses. We
consider Adjusted EBITDA to be an indicator of our assets’ operating
performance and a measure of our ability to service debt. It is also
used by management to identify the cash available for strategic
acquisitions and investments, maintain capital assets and fund ongoing
operations and working capital needs. We also believe that Adjusted
EBITDA is useful to investors and lenders as a measure of valuation and
ability to service debt.

Free cash flow is calculated as net income, plus interest expense (net),
loss on extinguishment of debt, income tax expense (benefit),
depreciation, amortization of intangible assets and broadcast rights
(excluding barter), (gain) loss on asset disposal, stock-based
compensation expense, goodwill and intangible assets impairment and
other expense (income), minus payments for broadcast rights, cash
interest expense, capital expenditures, proceeds from disposals of
property and equipment, and net operating cash income taxes. We consider
Free Cash Flow to be an indicator of our assets’ operating performance.
In addition, this measure is useful to investors because it is
frequently used by industry analysts, investors and lenders as a measure
of valuation for broadcast companies, although their definitions of Free
Cash Flow may differ from our definition.

For a reconciliation of these non-GAAP financial measurements to the
GAAP financial results cited in this news announcement, please see the
supplemental tables at the end of this release.

With respect to our forward-looking guidance, no reconciliation between
a non-GAAP measure to the closest corresponding GAAP measure is included
in this release because we are unable to quantify certain amounts that
would be required to be included in the GAAP measure without
unreasonable efforts and we believe such reconciliations would imply a
degree of precision that would be confusing or misleading to investors.
In particular, reconciliation of forward-looking Free Cash Flow to the
closest corresponding GAAP measure is not available without unreasonable
efforts on a forward-looking basis due to the high variability,
complexity and low visibility with respect to the charges excluded from
these non-GAAP measures such as the measures and effects of stock-based
compensation expense specific to equity compensation awards that are
directly impacted by unpredictable fluctuations in our stock price and
other non-recurring or unusual items such as impairment charges,
transaction-related costs and gains or losses on sales of assets. We
expect the variability of these items to have a significant, and
potentially unpredictable, impact on our future GAAP financial results.

About Nexstar Media Group, Inc.
Nexstar Media Group is a
leading diversified media company that leverages localism to bring new
services and value to consumers and advertisers through its traditional
media, digital and mobile media platforms. Nexstar owns, operates,
programs or provides sales and other services to 174 full power
television stations and related digital multicast signals reaching 100
markets or nearly 39% of all U.S. television households. Nexstar’s
portfolio includes primary affiliates of NBC, CBS, ABC, FOX, MyNetworkTV
and The CW. Nexstar’s community portal websites offer additional
hyper-local content and verticals for consumers and advertisers,
allowing audiences to choose where, when and how they access content
while creating new revenue opportunities. For more information please

Forward-Looking Statements
This communication includes
forward-looking statements. We have based these forward-looking
statements on our current expectations and projections about future
events. Forward-looking statements include information preceded by,
followed by, or that includes the words “guidance,” “believes,”
“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 this communication, concerning, among other things, 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 impact of changes in
national and regional economies, the ability to service and refinance
our outstanding debt, successful integration of acquired television
stations and digital businesses (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, volatility in programming costs, the effects of
governmental regulation of broadcasting, industry consolidation,
technological developments and major world news events. 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 this communication might not occur.
You should not place undue reliance on these forward-looking statements,
which speak only as of the date of this release. For more details on
factors that could affect these expectations, please see Nexstar’s other
filings with the Securities and Exchange Commission.

-tables follow-

Nexstar Media Group, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts, unaudited)

      Three Months Ended

March 31,

2019       2018
Net revenue $ 626,647 $ 615,336
Operating expenses (income):
Corporate expenses 30,765 26,343
Direct operating expenses, net of trade 289,432 275,479
Selling, general and administrative expenses, excluding corporate 111,595 115,562
Trade expense 3,431 3,484
Depreciation 27,437 25,814
Amortization of intangible assets 36,738 36,302
Amortization of broadcast rights 14,362 16,100
Reimbursement from the FCC related to station repack   (14,187 )   (1,364 )
Total operating expenses   499,573   497,720
Income from operations 127,074 117,616
Interest expense, net (52,957 ) (54,589 )
Loss on debt extinguishment (1,698 ) (1,005 )
Pension and other postretirement plans credit, net 1,400 2,950
Other expenses   (491 )   (127 )
Income before income taxes 73,328 64,845
Income tax expense   (16,441 )   (17,504 )
Net income 56,887 47,341
Net (income) loss attributable to noncontrolling interests   (1,995 )   781
Net income attributable to Nexstar $ 54,892 $ 48,122
Net income per common share attributable to Nexstar Media Group,
Basic $ 1.20 $ 1.04
Diluted $ 1.15 $ 1.01
Weighted average number of common shares outstanding:
Basic 45,785 46,075
Diluted 47,784 47,685

Nexstar Media Group, Inc.

Reconciliation of Broadcast Cash Flow and Adjusted EBITDA
(Non-GAAP Measures)

UNAUDITED (in thousands)

      Three Months Ended

March 31,

Broadcast Cash Flow and Adjusted EBITDA: 2019       2018
Net income $ 56,887 $ 47,341
Add (Less):
Interest expense, net 52,957 54,589
Loss on extinguishment of debt 1,698 1,005
Income tax expense 16,441 17,504
Depreciation 27,437 25,814
Amortization of intangible assets 36,738 36,302
Amortization of broadcast rights 14,362 16,100
Amortization of right-of-use assets attributable to favorable
(unfavorable) leases
Gain on asset disposal, net (533 ) (59 )
Loss on operating lease terminations 411
Corporate expenses 30,765 26,343
Other expenses 491 127
Pension and other postretirement plans credit, net (1,400 ) (2,950 )
Reimbursement from the FCC related to station repack (14,187 ) (1,364 )
Payments for broadcast rights   (14,489 )   (16,249 )
Broadcast cash flow 207,730 204,503
Margin % 33.1 % 33.2 %
Add (Less):
Pension and other postretirement plans credit, net 1,400 2,950
Corporate expenses, excluding one-time transaction expenses   (25,368 )   (25,362 )
Adjusted EBITDA before one-time transaction expenses 183,762 182,091
Margin % 29.3 % 29.6 %
Corporate one-time transaction expenses   (5,397 )   (981 )
Adjusted EBITDA $ 178,365 $ 181,110
Margin % 28.5 % 29.4 %

Nexstar Media Group, Inc.

Reconciliation of Free Cash Flow (Non-GAAP Measure)

UNAUDITED (in thousands)

  Three Months Ended

December 31,

Free Cash Flow: 2019   2018
Net income $ 56,887 $ 47,341
Add (Less):
Interest expense, net 52,957 54,589
Loss on extinguishment of debt 1,698 1,005
Income tax expense 16,441 17,504
Depreciation 27,437 25,814
Amortization of intangible assets 36,738 36,302
Amortization of broadcast rights 14,362 16,100
Amortization of right-of-use assets attributable to favorable
(unfavorable) leases
Gain on asset disposal, net (533 ) (59 )
Loss on operating lease terminations 411
Non-cash compensation expense 560
Stock-based compensation expense 8,069 6,400
Corporate one-time transaction expenses 5,397 981
Other expenses 491 127
Payments for broadcast rights (14,489 ) (16,249 )
Cash interest expense (51,015 ) (51,963 )
Capital expenditures, excluding station repack and CVR spectrum(1) (13,236 ) (14,653 )
Capital expenditures related to station repack (14,710 ) (5,422 )
Proceeds from disposals of property and equipment 588 2,847
Operating cash income tax (payments) refund, net   (1,883 )   1,225
Free cash flow before one-time transaction expenses 125,762 122,449
Corporate one-time transaction expenses   (5,397 )   (981 )
Free cash flow $ 120,365 $ 121,468

(1) During the three months ended March 31, 2019 and 2018, capital
expenditures related to relinquishment of the CVR spectrum were $0.6
million and $1.0 million, respectively.