Nexstar Media Group (NXST) Conference Call Summary Company and Industry Overview - **Company**: Nexstar Media Group (NXST) - **Industry**: Local Broadcast Television and Media Key Points and Arguments 1. **Acquisition Announcement**: Nexstar announced the proposed acquisition of TEGNA, marking a significant step in the company's growth strategy and the local broadcast television industry [6][12] 2. **Financial Impact**: The combined company is projected to generate over $8 billion in revenue and $2.6 billion in EBITDA based on the last eight quarters' results, positioning Nexstar alongside major players like Fox and Paramount [7][12] 3. **Strategic Rationale**: The acquisition aligns with Nexstar's commitment to localism and aims to enhance scale, geographic reach, and community impact, while delivering value to shareholders [6][7][12] 4. **Local Journalism Commitment**: The merger is expected to strengthen local journalism, providing balanced and accurate news coverage amidst competition from big tech companies [8][9] 5. **Regulatory Environment**: Nexstar is optimistic about regulatory changes that could facilitate the acquisition, including the lifting of the national ownership cap and revisions to market ownership rules [9][10][28] 6. **Operational Synergies**: Nexstar anticipates approximately $300 million in synergies from the acquisition, expected to be realized in the first year post-close, which is about 37% of TEGNA's adjusted EBITDA for the last eight quarters [11][18][19] 7. **Market Reach**: The combined entity will operate 265 full-power television stations across 44 states, reaching approximately 80% of U.S. television households [15][42] 8. **Digital Opportunities**: The acquisition will enhance Nexstar's digital capabilities, particularly through TEGNA's Premion, which will strengthen digital product offerings [11][91] 9. **Advertising Strategy**: Nexstar aims to modernize its advertising approach to compete more effectively with digital platforms, focusing on impression-based selling and improving measurement systems [82][86] 10. **Long-term Growth**: The transaction is viewed as a defining moment for Nexstar, expected to accelerate growth, strengthen leadership, and enhance shareholder value [12][94] Additional Important Content 1. **Regulatory Break Fees**: The merger agreement includes a regulatory break fee of $125 million and a reverse fee of $120 million if the deal is terminated due to a higher bid [61][63] 2. **Integration Experience**: Nexstar has a proven track record of successful integrations from past acquisitions, which will be applied to the TEGNA merger [17][19] 3. **Community Impact**: The acquisition is expected to benefit local communities by enhancing the quality and quantity of local news programming [10][16] 4. **Future Acquisitions**: While focusing on the TEGNA deal, Nexstar remains open to exploring other acquisition opportunities that align with its growth strategy [44][46] This summary encapsulates the key discussions and insights from the Nexstar Media Group conference call regarding the acquisition of TEGNA, highlighting the strategic, financial, and operational implications for the company and the local broadcast television industry.

Group 1 - Nexstar Media Group (NXST.US) announced a cash acquisition of Tegna (TGNA.US) at $22 per share, representing a 31% premium over Tegna's 30-day average stock price as of August 8 [1] - The total value of the transaction is $6.2 billion, which includes Tegna's debt and estimated expenses [1] - The acquisition is expected to be completed in the second half of 2026 [1] Group 2 - Nexstar's CEO, Perry Sook, stated that initiatives promoted by the Trump administration have provided local broadcasters with opportunities to expand influence and compete more effectively against large tech companies and traditional media [1] - The company believes that acquiring Tegna is the best option to capitalize on these opportunities [1]

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This section presents Nexstar Media Group, Inc.'s unaudited financial statements and management's discussion and analysis [ITEM 1. Financial Statements (Unaudited)](index=4&type=section&id=ITEM%201%20Financial%20Statements%20(Unaudited)) This section presents Nexstar Media Group, Inc.'s unaudited condensed consolidated financial statements and comprehensive notes for the periods ended June 30, 2025 and 2024 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position at specific dates, detailing assets, liabilities, and equity Condensed Consolidated Balance Sheets (in millions) | Item | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | **ASSETS** | | | | Cash and cash equivalents | $234 | $144 | | Total current assets | $1,390 | $1,297 | | Total assets | $11,328 | $11,468 | | **LIABILITIES & EQUITY** | | | | Total current liabilities | $823 | $783 | | Debt | $6,275 | $6,399 | | Total liabilities | $9,072 | $9,200 | | Total stockholders' equity | $2,238 | $2,242 | - Total assets decreased by **$140 million (1.2%)** from December 31, 2024, to June 30, 2025, primarily due to a decrease in investments and network affiliation agreements, net, partially offset by an increase in cash and cash equivalents[8](index=8&type=chunk) - Cash and cash equivalents increased by **$90 million (62.5%)** from December 31, 2024, to June 30, 2025[8](index=8&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section outlines the company's financial performance over specific periods, detailing revenues, expenses, and net income Condensed Consolidated Statements of Operations (in millions, except per share) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net revenue | $1,229 | $1,269 | $2,462 | $2,553 | | Income from operations | $213 | $240 | $432 | $516 | | Net income | $91 | $106 | $188 | $273 | | Net income attributable to Nexstar Media Group, Inc. | $97 | $118 | $205 | $293 | | Basic EPS | $3.09 | $3.59 | $6.50 | $8.85 | | Diluted EPS | $3.06 | $3.54 | $6.43 | $8.71 | - Net revenue decreased by **3.2%** for the three months ended June 30, 2025, and by **3.6%** for the six months ended June 30, 2025, compared to the same periods in 2024[10](index=10&type=chunk) - Net income attributable to Nexstar Media Group, Inc. decreased by **17.8%** for the three months and **30.0%** for the six months ended June 30, 2025, year-over-year[10](index=10&type=chunk) [Condensed Consolidated Statements of Changes in Stockholders' Equity and Redeemable Noncontrolling Interests](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity%20and%20Redeemable%20Noncontrolling%20Interests) This section details changes in the company's equity structure, including stock repurchases, dividends, and net income impacts Key Changes in Stockholders' Equity (in millions) | Item | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--------------------------------------- | :------------------------------- | :----------------------------- | | Balances as of March 31, 2025 / Dec 31, 2024 | $2,231 / $2,242 | $2,242 | | Purchase of treasury stock | $(51) | $(126) | | Stock-based compensation expense | $21 | $39 | | Dividends declared on common stock | $(56) | $(113) | | Net income (loss) | $95 | $202 | | Balances as of June 30, 2025 | $2,238 | $2,238 | - The company repurchased **311,998 shares** for **$51 million** during the three months ended June 30, 2025, and **753,162 shares** for **$126 million** during the six months ended June 30, 2025[11](index=11&type=chunk)[13](index=13&type=chunk) - Dividends declared on common stock amounted to **$1.86 per share** for the three months and **$3.72 per share** for the six months ended June 30, 2025[11](index=11&type=chunk)[13](index=13&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the company's cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (in millions) | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $584 | $452 | | Net cash used in investing activities | $(89) | $(39) | | Net cash used in financing activities | $(405) | $(414) | | Net increase (decrease) in cash and cash equivalents | $90 | $(1) | | Cash and cash equivalents at end of period | $234 | $146 | - Net cash provided by operating activities increased by **$132 million (29.2%)** year-over-year for the six months ended June 30, 2025[15](index=15&type=chunk) - Net cash used in investing activities increased by **$50 million (128.2%)** year-over-year, primarily due to an acquisition and lower proceeds from investment disposal[15](index=15&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the unaudited condensed consolidated financial statements [Note 1: Organization and Business Operations](index=9&type=section&id=Note%201%3A%20Organization%20and%20Business%20Operations) This note describes Nexstar's business, including its television stations, digital assets, and ownership interests in other media entities - Nexstar is a diversified media company operating **201 full power television stations** and **one AM radio station** in **116 markets** across **40 states and D.C.**, reaching approximately **39% of U.S. television households** as of June 30, 2025[17](index=17&type=chunk) - The company holds a **78.7% ownership interest** in The CW Network, LLC, and a **31.3% stake** in Television Food Network, G.P. (TV Food Network)[17](index=17&type=chunk) - Digital assets include **138 local websites**, **229 mobile applications**, **72 connected television applications**, and **three free ad-supported TV channels**[17](index=17&type=chunk) [Note 2: Summary of Significant Accounting Policies](index=9&type=section&id=Note%202%3A%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the key accounting principles and methods used in preparing the condensed consolidated financial statements - Nexstar consolidates entities where it has controlling financial interests, including Variable Interest Entities (VIEs) through local service agreements and guarantees of obligations[18](index=18&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk) - The company increased its ownership in The CW from **77.7% to 78.7%** during Q2 2025; redeemable noncontrolling interests are presented as mezzanine equity due to put/call rights[30](index=30&type=chunk)[31](index=31&type=chunk) - Nexstar adopted ASU 2023-07 (Segment Reporting) retrospectively and is evaluating ASU 2024-03 (Expense Disaggregation) for future impact[33](index=33&type=chunk)[35](index=35&type=chunk) [Note 3: Acquisition](index=14&type=section&id=Note%203%3A%20Acquisition) This note details the acquisition of WBNX-TV assets, including the purchase price and primary asset acquired - On January 31, 2025, Nexstar acquired certain assets of WBNX-TV (Cleveland, OH) for a **$22 million cash purchase price**, primarily consisting of a **$20 million FCC license**[36](index=36&type=chunk) [Note 4: Intangible Assets and Goodwill](index=14&type=section&id=Note%204%3A%20Intangible%20Assets%20and%20Goodwill) This note provides a breakdown of the company's intangible assets and goodwill, including changes and estimated amortization expenses Intangible Assets and Goodwill (in millions) | Asset Type | June 30, 2025 (Net) | December 31, 2024 (Net) | | :-------------------------------- | :------------------ | :-------------------- | | Goodwill | $2,924 | $2,922 | | FCC licenses | $2,949 | $2,929 | | Network affiliation agreements, net | $1,400 | $1,494 | | Other intangible assets, net | $331 | $353 | | Total definite-lived intangible assets | $1,731 | $1,847 | - Goodwill increased by **$2 million** and FCC licenses increased by **$20 million** due to the WBNX-TV acquisition[37](index=37&type=chunk) Estimated Amortization Expense for Definite-Lived Intangible Assets (in millions) | Period | Amount | | :---------------- | :----- | | Remainder of 2025 | $151 | | 2026 | $280 | | 2027 | $265 | | 2028 | $240 | | 2029 | $222 | | 2030 | $178 | | Thereafter | $395 | | **Total** | **$1,731** | [Note 5: Investments](index=15&type=section&id=Note%205%3A%20Investments) This note details the company's equity method and other equity investments, including financial performance of TV Food Network Investments (in millions) | Investment Type | June 30, 2025 | December 31, 2024 | | :---------------------- | :------------ | :---------------- | | Equity method investments | $772 | $873 | | Other equity investments | $4 | $4 | | **Total investments** | **$776** | **$877** | - Nexstar's **31.3% equity method investment** in TV Food Network had a book value of **$753 million** as of June 30, 2025, down from **$857 million** at December 31, 2024[40](index=40&type=chunk)[43](index=43&type=chunk) TV Food Network Transactions and Financials (in millions) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Cash distributions received | $12 | $19 | $125 | $138 | | Recognized share in TV Food Network's net income | $28 | $34 | $55 | $71 | | TV Food Network Net revenue | $214 | $253 | $416 | $502 | | TV Food Network Net income | $92 | $109 | $173 | $228 | [Note 6: Accrued Expenses](index=16&type=section&id=Note%206%3A%20Accrued%20Expenses) This note presents a breakdown of accrued expenses, highlighting changes in key categories Accrued Expenses (in millions) | Category | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Compensation and related taxes | $97 | $91 | | Interest payable | $57 | $56 | | Network affiliation fees | $94 | $77 | | Other | $84 | $90 | | **Total Accrued Expenses** | **$332** | **$314** | - Total accrued expenses increased by **$18 million (5.7%)** from December 31, 2024, to June 30, 2025, primarily driven by an increase in network affiliation fees[47](index=47&type=chunk) [Note 7: Debt](index=16&type=section&id=Note%207%3A%20Debt) This note details the company's long-term debt structure, including recent refinancing activities and compliance with covenants Long-Term Debt (in millions) | Debt Type | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :---------------- | | Nexstar Revolving loans, due June 2030 | $144 | $- | | Nexstar Term Loan A, due June 2030 | $1,905 | $- | | Nexstar Term Loan A, due June 2027 | $- | $2,121 | | Nexstar Term Loan B, due June 2032 | $1,300 | $- | | Nexstar Term Loan B, due September 2026 | $- | $1,358 | | 5.625% Notes, due July 2027 | $1,714 | $1,714 | | 4.75% Notes, due November 2028 | $1,000 | $1,000 | | Mission Revolving loans, due June 2030 | $62 | $- | | Mission Revolving loans, due June 2027 | $- | $62 | | Mission Term Loan B, due June 2028 | $288 | $290 | | **Total outstanding principal** | **$6,413** | **$6,545** | | **Long-term debt, net of current portion** | **$6,275** | **$6,399** | - Nexstar and Mission refinanced their senior secured credit facilities on June 27, 2025, introducing new revolving and term loans with extended maturities and lower interest margins[50](index=50&type=chunk)[55](index=55&type=chunk) - As of June 30, 2025, Nexstar had **$586 million** and Mission had **$14 million** in unused revolving loan commitments, and the Company was in compliance with all financial covenants[53](index=53&type=chunk)[57](index=57&type=chunk) [Note 8: Leases](index=19&type=section&id=Note%208%3A%20Leases) This note provides information on the company's operating lease assets and liabilities, including future minimum lease payments Operating Lease Information (in millions) | Item | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :---------------- | | Operating lease right-of-use assets, net | $269 | $276 | | Current operating lease liabilities | $40 | $37 | | Noncurrent operating lease liabilities | $250 | $253 | | Weighted Average Remaining Lease Term | 8 years | 8 years | | Weighted Average Discount Rate | 4.8% | 4.9% | | Cash paid for operating leases (six months) | $30 | $32 | Future Minimum Lease Payments (in millions) | Period | Operating Leases | | :----------------------- | :--------------- | | Remainder of 2025 | $27 | | 2026 | $51 | | 2027 | $46 | | 2028 | $42 | | 2029 | $40 | | 2030 | $36 | | Thereafter | $114 | | **Total future minimum lease payments** | **$356** | [Note 9: Retirement and Postretirement Plans](index=20&type=section&id=Note%209%3A%20Retirement%20and%20Postretirement%20Plans) This note details the net periodic benefit cost for pension plans and expected contributions Pension Benefit Plans Net Periodic Benefit Cost (Credit) (in millions) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Interest cost | $19 | $19 | $39 | $38 | | Expected return on plan assets | $(26) | $(25) | $(52) | $(50) | | Amortization of net gain | $(1) | $(1) | $(3) | $(3) | | **Net periodic benefit credit** | **$(8)** | **$(7)** | **$(16)** | **$(15)** | - Nexstar expects to contribute **$15 million** to its qualified pension benefit plans in 2025[63](index=63&type=chunk) [Note 10: Commitments and Contingencies](index=20&type=section&id=Note%2010%3A%20Commitments%20and%20Contingencies) This note outlines the company's guarantees, ongoing litigation, tax appeals, and regulatory matters - Nexstar guarantees Mission's senior secured credit facility, with a maximum potential exposure of **$364 million** as of June 30, 2025[64](index=64&type=chunk) - The company is involved in ongoing Local TV Advertising Antitrust Litigation, with a trial date set for April 2026, and denies all allegations[68](index=68&type=chunk)[70](index=70&type=chunk) - The IRS appealed the Tax Court's decision regarding the Chicago Cubs Transactions, with a ruling from the U.S. Court of Appeals expected in the second half of 2025, with Nexstar believing the tax impact is not material[75](index=75&type=chunk)[76](index=76&type=chunk) - The FCC issued a Notice of Apparent Liability (NAL) to Nexstar and Mission for alleged unauthorized transfer of control and national television ownership limit violations related to WPIX, proposing forfeitures and potential divestiture[78](index=78&type=chunk) [Note 11: Equity](index=23&type=section&id=Note%2011%3A%20Equity) This note details share repurchase activities and dividend declarations, reflecting capital returns to stockholders - Nexstar repurchased **753,162 shares** of common stock for **$125 million** during the six months ended June 30, 2025, leaving **$1.4 billion** remaining under the share repurchase authorization[79](index=79&type=chunk) - The board of directors approved a **10% increase** in the quarterly cash dividend to **$1.86 per share**, effective Q1 2025[81](index=81&type=chunk) [Note 12: Income Taxes](index=23&type=section&id=Note%2012%3A%20Income%20Taxes) This note provides details on income tax expense, effective tax rates, and the evaluation of new tax legislation Income Tax Expense and Effective Tax Rates | Period | Income Tax Expense (in millions) | Effective Tax Rate | | :--------------------------------------- | :------------------------------- | :----------------- | | Three Months Ended June 30, 2025 | $39 | 30.0% | | Three Months Ended June 30, 2024 | $43 | 28.9% | | Six Months Ended June 30, 2025 | $80 | 29.9% | | Six Months Ended June 30, 2024 | $105 | 27.8% | - The effective tax rate for the three months ended June 30, 2025, increased to **30.0%** from **28.9%** in 2024, primarily due to permanent differences and excess benefit from restricted stock units, partially offset by changes in valuation allowance[82](index=82&type=chunk)[83](index=83&type=chunk) - The company is evaluating the potential effects of the newly signed 'One Big Beautiful Bill Act' (H.R.1) on its consolidated financial statements[87](index=87&type=chunk) [Note 13: Income Per Share](index=24&type=section&id=Note%2013%3A%20Income%20Per%20Share) This note presents basic and diluted earnings per share, along with weighted average shares outstanding Income Per Share (in millions, except per share amounts, and shares in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income available to common stockholders | $93 | $118 | $197 | $293 | | Basic EPS | $3.09 | $3.59 | $6.50 | $8.85 | | Diluted EPS | $3.06 | $3.54 | $6.43 | $8.71 | | Weighted average shares outstanding – basic | 30,221 | 32,816 | 30,375 | 33,133 | | Weighted average shares outstanding – diluted | 30,514 | 33,287 | 30,719 | 33,656 | - Basic EPS decreased by **13.9%** for the three months and **26.6%** for the six months ended June 30, 2025, year-over-year[88](index=88&type=chunk) [Note 14: Fair Value Measurements](index=24&type=section&id=Note%2014%3A%20Fair%20Value%20Measurements) This note explains the classification of fair value measurements and provides fair value and carrying amounts for long-term debt - The company classifies fair value measurements into Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1), and Level 3 (unobservable inputs)[90](index=90&type=chunk) Fair Value and Carrying Amounts of Long-Term Debt (in millions) | Debt Type | June 30, 2025 Carrying Amount | June 30, 2025 Fair Value | December 31, 2024 Carrying Amount | December 31, 2024 Fair Value | | :--------------------------------------- | :------------------------------ | :----------------------- | :-------------------------------- | :----------------------- | | Nexstar Revolving loans, due June 2030 | $144 | $143 | $- | $- | | Nexstar Term Loan A, due June 2030 | $1,899 | $1,895 | $- | $- | | Nexstar Term Loan B, due June 2032 | $1,279 | $1,297 | $- | $- | | 5.625% Notes, due July 2027 | $1,716 | $1,707 | $1,716 | $1,667 | | 4.75% Notes, due November 2028 | $996 | $968 | $995 | $930 | | Mission Revolving loans, due June 2030 | $62 | $61 | $- | $- | | Mission Term Loan B, due June 2028 | $287 | $287 | $289 | $290 | [Note 15: Segment Data](index=25&type=section&id=Note%2015%3A%20Segment%20Data) This note provides financial information by reportable segment and revenue by source, including customer concentration - Nexstar's reportable Broadcast segment includes television stations, NewsNation, multicast networks, and WGN-AM radio, with other segments including The CW and national digital businesses[92](index=92&type=chunk) Reportable Broadcast Segment Financials (in millions) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net revenue | $1,150 | $1,205 | $2,319 | $2,427 | | Segment profit | $410 | $454 | $839 | $930 | Consolidated Net Revenue by Source (in millions) | Revenue Source | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Distribution | $733 | $734 | $1,495 | $1,495 | | Advertising | $475 | $522 | $934 | $1,034 | | Other | $21 | $13 | $33 | $24 | | **Total net revenue** | **$1,229** | **$1,269** | **$2,462** | **$2,553** | - Two customers each represented approximately **13-14%** of consolidated net revenue for the three and six months ended June 30, 2025 and 2024[102](index=102&type=chunk) [Note 16: Subsequent Events](index=28&type=section&id=Note%2016%3A%20Subsequent%20Events) This note discloses significant events that occurred after the balance sheet date, such as dividend declarations - On August 1, 2025, Nexstar's Board of Directors declared a quarterly cash dividend of **$1.86 per share**, payable on August 29, 2025[103](index=103&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=ITEM%202%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Nexstar's financial condition and results for Q2 2025, highlighting revenue decline, debt refinancing, and capital returns [Executive Summary](index=29&type=section&id=Executive%20Summary) This summary highlights key financial performance, including revenue changes, capital returns, and debt refinancing efforts - Net revenue decreased by **3.2%** and **3.6%** for the three and six months ended June 30, 2025, respectively, compared to the prior year[110](index=110&type=chunk) - The company returned approximately **$106 million** (Q2 2025) and **$238 million** (YTD Q2 2025) to stockholders through stock repurchases and dividends[110](index=110&type=chunk) - Nexstar completed the refinancing of senior secured credit facilities on June 27, 2025, reducing interest margins, increasing revolver capacity, and extending maturities[111](index=111&type=chunk) [Overview of Operations](index=30&type=section&id=Overview%20of%20Operations) This section describes Nexstar's operational footprint, including its television stations, media networks, and consolidation practices - As of June 30, 2025, Nexstar owned, operated, programmed, or provided services to **201 full power television stations** and **one AM radio station** in **116 markets**[112](index=112&type=chunk) - The company holds a **78.7% ownership** in The CW, operates NewsNation, two multicast networks, and a **31.3% stake** in TV Food Network[113](index=113&type=chunk) - Nexstar consolidates VIEs due to local service agreements, guarantees of Mission Broadcasting's debt, power over economic performance, and purchase options for VIE stations[115](index=115&type=chunk) [Seasonality](index=30&type=section&id=Seasonality) This section explains how political advertising and consumer spending patterns influence the company's advertising revenue throughout the year - Advertising revenue is significantly higher in even-numbered years due to political advertising from congressional and presidential elections, and events like the Olympic Games[117](index=117&type=chunk) - Advertising revenue generally peaks in the second and fourth quarters due to increased consumer advertising in spring and retail advertising during the holiday season[117](index=117&type=chunk) - As 2025 is not an election year, a decrease in political advertising revenue is expected compared to 2024[117](index=117&type=chunk) [Historical Performance - Results of Operations](index=31&type=section&id=Historical%20Performance%20-%20Results%20of%20Operations) This section analyzes the company's operating results, including revenue, expenses, and net income trends over time Operating Results (in millions) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net revenue | $1,229 (↓3.2%) | $1,269 | $2,462 (↓3.6%) | $2,553 | | Distribution revenue | $733 (↓0.1%) | $734 | $1,495 (0%) | $1,495 | | Advertising revenue | $475 (↓9.0%) | $522 | $934 (↓9.7%) | $1,034 | | Income from operations | $213 (↓11.3%) | $240 | $432 (↓16.3%) | $516 | | Net income attributable to Nexstar Media Group, Inc. | $97 (↓17.8%) | $118 | $205 (↓30.0%) | $293 | | Interest expense, net | $(97) (↓14.2%) | $(113) | $(194) (↓14.5%) | $(227) | - Advertising revenue decreased by **$47 million** (Q2) and **$100 million** (YTD) year-over-year, primarily due to a **$36 million** (Q2) and **$68 million** (YTD) decrease in political advertising and ongoing market softness[120](index=120&type=chunk)[126](index=126&type=chunk) - Direct operating and SG&A expenses decreased by **$3 million** (Q2) and **$12 million** (YTD) due to restructuring initiatives, partially offset by debt refinancing costs[121](index=121&type=chunk)[127](index=127&type=chunk) - Income from equity method investments, net, decreased by **$5 million** (Q2) and **$16 million** (YTD) due to lower net income from TV Food Network[122](index=122&type=chunk)[127](index=127&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's ability to meet its financial obligations, detailing cash flows, debt levels, and compliance with covenants - The company believes it has sufficient unrestricted cash, positive working capital, and available revolving credit facilities to meet business operating requirements and service debt for at least the next 12 months[135](index=135&type=chunk) Cash Flow Summary (in millions) | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $584 | $452 | | Net cash used in investing activities | $(89) | $(39) | | Net cash used in financing activities | $(405) | $(414) | | Net increase (decrease) in cash and cash equivalents | $90 | $(1) | | Cash and cash equivalents (period end) | $234 | $144 | - Total outstanding debt was **$6.383 billion** as of June 30, 2025, representing **73.9%** of combined capitalization[142](index=142&type=chunk) Principal Indebtedness Scheduled to Mature (in millions) | Debt Type | Total | Remainder of 2025 | 2026 | 2027-2028 | 2029-2030 | Thereafter | | :--------------------------------------- | :---- | :---------------- | :--- | :-------- | :-------- | :--------- | | Nexstar senior secured credit facility | $3,349 | $51 | $108 | $217 | $1,741 | $1,232 | | Mission senior secured credit facility | $350 | $1 | $3 | $284 | $62 | $- | | 5.625% Notes, due July 2027 | $1,714 | $- | $- | $1,714 | $- | $- | | 4.75% Notes, due November 2028 | $1,000 | $- | $- | $1,000 | $- | $- | | **Total** | **$6,413** | **$52** | **$111** | **$3,215** | **$1,803** | **$1,232** | - The company was in compliance with its maximum consolidated first lien net leverage ratio covenant of **4.25:1.00** as of June 30, 2025[149](index=149&type=chunk) [Issuer and Guarantor Summarized Financial Information](index=36&type=section&id=Issuer%20and%20Guarantor%20Summarized%20Financial%20Information) This section provides summarized financial data for the obligor group, including balance sheet and statements of operations information Summarized Balance Sheet Information for the Obligor Group (in millions) | Item | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :---------------- | | Total current assets | $1,278 | $1,160 | | Total noncurrent assets | $9,008 | $9,140 | | Total current liabilities | $732 | $685 | | Total noncurrent liabilities | $8,219 | $8,387 | Summarized Statements of Operations Information for the Obligor Group (in millions) | Item | Six Months Ended June 30, 2025 | | :--------------------------------------- | :----------------------------- | | Total net revenue | $2,365 | | Total costs and expenses | $1,865 | | Income from operations | $500 | | Net income attributable to Obligor Group | $236 | | Income from equity method investments, net | $19 | [Critical Accounting Estimates](index=37&type=section&id=Critical%20Accounting%20Estimates) This section confirms no material changes to critical accounting estimates previously disclosed in the annual report - Management believes there have been no material changes to the critical accounting estimates previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[160](index=160&type=chunk) [Recent Accounting Pronouncements](index=37&type=section&id=Recent%20Accounting%20Pronouncements) This section refers to Note 2 for details on recently issued accounting pronouncements and their expected impact - Refer to Note 2 of the Condensed Consolidated Financial Statements for a discussion of recently issued accounting pronouncements, including expected adoption dates and effects[161](index=161&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=ITEM%203%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section quantifies Nexstar's market risk exposure, primarily focusing on interest rate fluctuations on variable-rate debt - The company's term loan borrowings under senior secured credit facilities bear interest at variable rates ranging from **5.82% to 6.82%** as of June 30, 2025[163](index=163&type=chunk) - A **100 basis point increase** in SOFR would increase annual interest expense and decrease cash flow from operations by **$37 million** (excluding tax effects)[164](index=164&type=chunk) - Nexstar's **5.625% Notes** (due July 2027) and **4.75% Notes** (due November 2028) are fixed-rate debt and not exposed to market interest rate changes[164](index=164&type=chunk) [ITEM 4. Controls and Procedures](index=38&type=section&id=ITEM%204%20Controls%20and%20Procedures) This section confirms the effectiveness of disclosure controls and procedures and reports no material changes in internal control over financial reporting - Nexstar's management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of June 30, 2025, providing reasonable assurance for timely and accurate financial reporting[165](index=165&type=chunk)[166](index=166&type=chunk) - No changes in internal control over financial reporting have materially affected, or are reasonably likely to materially affect, the company's internal control during the quarter ended June 30, 2025[167](index=167&type=chunk) [PART II. OTHER INFORMATION](index=38&type=section&id=PART%20II%20OTHER%20INFORMATION) This section provides additional information on legal proceedings, risk factors, equity sales, and other required disclosures [ITEM 1. Legal Proceedings](index=38&type=section&id=ITEM%201%20Legal%20Proceedings) This section refers to Note 10 for details on legal proceedings, which management believes will not materially affect financial condition - The company is involved in litigation arising from ordinary business operations, such as contractual or employment disputes[169](index=169&type=chunk) - Management believes that any adverse outcome from these proceedings would not have a material adverse effect on its financial condition or results of operations[169](index=169&type=chunk) - Detailed discussion of ongoing litigation is provided in Note 10, 'Commitments and Contingencies'[169](index=169&type=chunk) [ITEM 1A. Risk Factors](index=38&type=section&id=ITEM%201A%20Risk%20Factors) This section confirms no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K - No material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024[170](index=170&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=ITEM%202%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details share repurchase activities, including shares bought back, average price, and remaining authorization - During the six months ended June 30, 2025, Nexstar repurchased **753,162 shares** of common stock for **$125 million**[171](index=171&type=chunk) - As of June 30, 2025, the remaining available amount under the share repurchase authorization was **$1.4 billion**[171](index=171&type=chunk) Summary of Common Stock Repurchases (in millions, except for share and per share information) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs | | :----------------------- | :------------------------------- | :--------------------------- | :----------------------------------------------------------------------------------- | | April 2 to 24, 2025 | 209,915 | $153.16 | $1,444 | | May 15 to 30, 2025 | 93,368 | $173.50 | $1,428 | | June 2, 2025 | 8,715 | $169.81 | $1,427 | | **Total for Q2 2025** | **311,998** | **$159.71** | | [ITEM 3. Defaults Upon Senior Securities](index=39&type=section&id=ITEM%203%20Defaults%20Upon%20Senior%20Securities) This section confirms no defaults occurred on senior securities during the reported period - None[173](index=173&type=chunk) [ITEM 4. Mine Safety Disclosures](index=39&type=section&id=ITEM%204%20Mine%20Safety%20Disclosures) This section indicates no mine safety disclosures are required for the reporting period - None[174](index=174&type=chunk) [ITEM 5. Other Information](index=39&type=section&id=ITEM%205%20Other%20Information) This section confirms no Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted, modified, or terminated by directors or officers - None of the Company's directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the fiscal quarter ended June 30, 2025[175](index=175&type=chunk) [ITEM 6. Exhibits](index=39&type=section&id=ITEM%206%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including credit agreement amendments, certifications, and XBRL documents - Exhibits include Amendment No. 7 and No. 8 to the Credit Agreement dated June 27, 2025, for Nexstar Media Inc. and Mission Broadcasting, Inc., respectively[176](index=176&type=chunk) - Certifications by Perry A. Sook (Chairman and CEO) and Lee Ann Gliha (CFO) pursuant to Sections 302 and 1350 of the Sarbanes-Oxley Act of 2002 are filed[176](index=176&type=chunk) - Inline XBRL Instance Document, Taxonomy Extension Schema, and Cover Page Interactive Data File are included[176](index=176&type=chunk)

Group 1 - Nexstar Media Group, Inc. held its Q2 2025 earnings call on August 7, 2025, with key participants including the Executive VP & CFO, President & COO, and the Founder, Chairman & CEO [1] - The call was recorded and facilitated by the Investor Relations representative, indicating a structured approach to investor communication [2] - Management's statements during the call included forward-looking statements, which are subject to risks and uncertainties that could lead to actual results differing from those projected [4]

Financial Data and Key Metrics Changes - Nexstar reported second quarter net revenue of $1,230,000,000, a decline of 3.2% compared to the prior year, primarily due to reduced political advertising [17] - Adjusted EBITDA for the second quarter was $389,000,000, representing a 31.7% margin, down $25,000,000 from $414,000,000 in the same quarter last year [24] - Adjusted free cash flow for the quarter was $101,000,000, an increase from $77,000,000 in the previous year [27] Business Line Data and Key Metrics Changes - Advertising revenue decreased by $47,000,000 or 9% year-over-year to $475,000,000, with a $36,000,000 decline in political advertising [18] - Distribution revenue was $733,000,000, essentially flat compared to the prior year, reflecting modest subscriber renewals and MVPD subscriber attrition [17] - The CW network achieved five consecutive quarters of audience growth and was ranked the eighth most-watched network for the first half of 2025 [22] Market Data and Key Metrics Changes - The advertising outlook remains stable, with non-political advertising forecasted to decline in the low single digits year-over-year for the third quarter [19] - Local television news remains the most trusted news source, with audiences of all ages turning to local news programming [11] - The CW's profitability improved by $21,000,000 year-over-year, driven by reduced amortization of broadcast rights and lower operating expenses [22] Company Strategy and Development Direction - Nexstar's strategy focuses on high-impact news and sports programming, with sports now accounting for over 40% of the CW's programming hours [20] - The company is pursuing regulatory reform opportunities, including potential changes to the national ownership cap and the top four rule [14][15] - Nexstar aims to renew distribution agreements and continue the CW's path to profitability, with expectations of achieving profitability in 2026 [16][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the advertising environment, noting that trends are performing as expected without significant negative impacts [72] - There are early signs of improvement in video subscriber trends, particularly from major MVPDs [6] - The company remains focused on executing its 2025 objectives and is energized by prospects for regulatory reform [16] Other Important Information - Nexstar returned $238,000,000 or 53% of adjusted free cash flow to shareholders through share repurchases and dividends [6] - The company refinanced its credit facilities and term loans, extending maturities and strengthening its capital structure [30] - The CW's losses in the quarter were better by about $21,000,000 compared to the previous year, with expectations of a 25% reduction in losses for the year [71] Q&A Session Summary Question: Thoughts on Chairman Carr's letters to networks and M&A opportunities - Management indicated that growing the national footprint is strategically important, and they are open to M&A opportunities that create shareholder value [34][35] Question: Importance of increasing O&Os for CW in M&A scenarios - While increasing O&Os is beneficial, it is not the primary strategic priority; the focus remains on overall shareholder value [46] Question: Additional sports opportunities for CW - Management expressed interest in pursuing more college sports and noted the positive response from the advertising community to CW's sports programming [55] Question: Economic environment and ad market trends - Management reported that the ad environment is performing as expected, with no significant negative trends observed [72] Question: Trends in digital advertising - Digital advertising continues to grow, particularly in local markets, with mid-single-digit growth overall [77] Question: CW losses and profitability outlook - CW losses improved by $21,000,000 year-over-year, with expectations of achieving profitability in 2026 [71]

Financial Data and Key Metrics Changes - Nexstar reported second quarter net revenue of $1,230,000,000, a decline of 3.2% compared to the prior year, primarily due to a reduction in political advertising [16] - Adjusted EBITDA for the second quarter was $389,000,000, representing a 31.7% margin, down $25,000,000 from $414,000,000 in the same quarter of the previous year [25] - Adjusted free cash flow for the quarter was $101,000,000, an increase from $77,000,000 in the prior year [27] Business Line Data and Key Metrics Changes - Distribution revenue was $733,000,000, essentially flat compared to the prior year, reflecting modest subscriber renewals and MVPD subscriber attrition [16] - Advertising revenue decreased by $47,000,000 or 9% year-over-year, with political advertising down $36,000,000 [17] - Non-political advertising declined by 2.5% year-over-year, with a notable decline in goods-based advertising, particularly in the automotive sector [17] Market Data and Key Metrics Changes - The company noted early signs of improvement in video subscriber trends from major MVPDs, although a definitive turnaround has not yet been observed [4] - Public trust in local broadcast journalism remains strong, with local television news cited as the most trusted news source according to a 2024 survey [10] Company Strategy and Development Direction - Nexstar is focused on regulatory reform, with recent developments suggesting potential changes to the national ownership cap and the top four rule, which could enhance market opportunities [13] - The company continues to emphasize high-impact news and sports programming, with sports now accounting for over 40% of CW's programming hours [19] - Nexstar aims to achieve profitability for the CW by 2026, with expectations of improved profitability of about 25% in 2025 over 2024 [21] Management's Comments on Operating Environment and Future Outlook - Management expressed a stable outlook for advertising revenue despite broader economic uncertainties, noting that spending intentions remain positive [74] - The company remains optimistic about the advertising outlook, particularly in the context of upcoming political revenue impacts in the second half of the year [73] Other Important Information - Nexstar returned $106,000,000 to shareholders in the quarter, comprising $56,000,000 in dividends and $50,000,000 in stock repurchases [29] - The company refinanced its credit facilities, extending maturities and improving financial flexibility [30] Q&A Session Summary Question: Thoughts on Chairman Carr's letters to networks and M&A opportunities - Management indicated that growing the national footprint is strategically important, and they are open to M&A opportunities that create shareholder value [34] Question: Importance of increasing O&Os for CW in M&A scenarios - While increasing O&Os is beneficial, it is not the primary strategic priority; the focus remains on overall shareholder value [46] Question: Additional sports opportunities for CW - Management expressed interest in pursuing more college sports and noted ongoing discussions in that area [56] Question: Trends in digital advertising - Digital advertising continues to grow, particularly in the local business segment, with overall growth in the mid-single digits [77] Question: Updated thoughts on the economic environment - Management feels the advertising environment is performing as expected, with no significant negative trends observed [73]

[Executive Summary & Headline Results](index=1&type=section&id=Executive%20Summary%20%26%20Headline%20Results) This section presents Nexstar's Q2 2025 financial performance, highlighting key operational achievements and strategic initiatives despite a decline in political advertising [CEO Statement & Key Financial Overview](index=1&type=section&id=CEO%20Statement%20%26%20Key%20Financial%20Overview) Nexstar Media Group reported solid second-quarter 2025 financial results, with year-over-year impacts primarily from lower non-election year political advertising, partially offset by strong expense management - Q2 2025 results were impacted by lower non-election year political advertising revenue, partially offset by strong expense management[3](index=3&type=chunk) - The CW ascended to the **8-ranked network overall** in the first half of 2025, reflecting five consecutive quarters of primetime ratings growth and a strategic pivot to sports programming, which now accounts for over **40% of its programming hours**[3](index=3&type=chunk) - NewsNation was ranked the fastest growing network overall year-over-year, shortly after celebrating its one-year anniversary as a 24/7 cable news network[3](index=3&type=chunk) - The company refinanced senior secured term loans and revolving credit facilities, reducing interest rate margin, expanding revolver capacity, and extending maturities[2](index=2&type=chunk) - Nexstar returned **$106 million** to shareholders and repaid **$101 million** of debt during the quarter[2](index=2&type=chunk) Q2 2025 Key Financial Highlights (YoY Change) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | % Change | H1 2025 ($M) | H1 2024 ($M) | % Change | | :-------------------------------- | :----------- | :----------- | :--------- | :----------- | :----------- | :--------- | | Net Revenue | $1,229 | $1,269 | (3.2%) | $2,462 | $2,553 | (3.6%) | | Net Income | $91 | $106 | (14.2%) | $188 | $273 | (31.1%) | | Net Income % Margin | 7.4% | 8.4% | (1.0) pp | 7.6% | 10.7% | (3.1) pp | | Adjusted EBITDA | $389 | $414 | (6.0%) | $770 | $866 | (11.1%) | | Adjusted EBITDA % Margin | 31.7% | 32.6% | (0.9) pp | 31.3% | 33.9% | (2.6) pp | | Net Cash Provided by Operating Activities | $247 | $176 | 40.3% | $584 | $452 | 29.2% | | Adjusted Free Cash Flow | $101 | $77 | 31.2% | $449 | $466 | (3.6%) | [Company and Business Highlights](index=2&type=section&id=Company%20and%20Business%20Highlights) This section details Nexstar's strategic achievements, including capital structure enhancements, significant viewership growth for NewsNation and The CW, and industry recognition for journalism [Operational and Strategic Achievements](index=2&type=section&id=Operational%20and%20Strategic%20Achievements) Nexstar strengthened its capital structure through successful refinancings and received shareholder approval for key proposals - Completed refinancings for revolving credit facilities, Term Loan A, and Term Loan B, strengthening the Company's capital structure and financial flexibility by extending maturities, reducing interest rate margin, and expanding revolver capacity[8](index=8&type=chunk) - Shareholders approved all proposals at the 2025 Annual Shareholder Meeting, including electing Board nominees and affirming executive compensation with approximately **95.5% support**[8](index=8&type=chunk) - NewsNation celebrated its one-year anniversary of 24/7 news programming, ranking as the **1 basic cable network for year-over-year growth** with overall viewership growing nearly **50%** and **67%** among adults aged 25-54[8](index=8&type=chunk) - The CW achieved five consecutive quarters of audience growth, becoming the **8 network in total audience** for the first half of 2025[8](index=8&type=chunk) - Continued to build sports programming at The CW, renewing the Pac-12 Conference agreement for college football and announcing a multi-year partnership with the Professional Bowlers Association[8](index=8&type=chunk) - Finalized agreements to move three additional CW affiliations to Nexstar stations in Charlotte, NC, Erie, PA, and Elmira, NY, by September 2025[8](index=8&type=chunk) - Earned **52 Regional Edward R. Murrow Awards** for outstanding journalism and locally produced news programming[8](index=8&type=chunk) [Detailed Financial Performance](index=3&type=section&id=Detailed%20Financial%20Performance) This section provides a comprehensive breakdown of Nexstar's second-quarter financial results, analyzing changes in net revenue, distribution, advertising, net income, EBITDA, and cash flows [Net Revenue](index=3&type=section&id=Net%20Revenue) Second quarter net revenue declined by **3.2%** year-over-year to **$1.23 billion**, primarily driven by a reduction in political advertising revenue Net Revenue (Q2 YoY) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | % Change | | :--------- | :----------- | :----------- | :--------- | | Net Revenue | $1,229 | $1,269 | (3.2%) | - The decline was primarily due to reduced political advertising revenue[12](index=12&type=chunk) [Distribution Revenue](index=3&type=section&id=Distribution%20Revenue) Distribution revenue for the second quarter saw a marginal decrease of **0.1%** year-over-year to **$733 million** Distribution Revenue (Q2 YoY) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | % Change | | :----------------- | :----------- | :----------- | :--------- | | Distribution Revenue | $733 | $734 | (0.1%) | - Primarily reflects modest subscriber renewals in 2024 vs 2023 and MVPD subscriber attrition[12](index=12&type=chunk) - Partially offset by increased rates, contractual commitments, growth in vMVPD subscribers, and the addition of CW affiliations[12](index=12&type=chunk) [Advertising Revenue](index=3&type=section&id=Advertising%20Revenue) Second quarter advertising revenue decreased by **9.0%** year-over-year to **$475 million**, primarily attributable to a **$36 million** decrease in political advertising Advertising Revenue (Q2 YoY) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | % Change | | :----------------- | :----------- | :----------- | :--------- | | Advertising Revenue | $475 | $522 | (9.0%) | - Political advertising decreased by **$36 million** to **$9 million**[12](index=12&type=chunk) - Non-political advertising revenue decreased by **$11 million (2.5%)** due to television advertising market softness[12](index=12&type=chunk) [Net Income](index=3&type=section&id=Net%20Income) Net income for the second quarter decreased by **14.2%** year-over-year to **$91 million**, with the Net Income margin declining from **8.4% to 7.4%** Net Income (Q2 YoY) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | % Change | | :--------- | :----------- | :----------- | :--------- | | Net Income | $91 | $106 | (14.2%) | | Net Income Margin | 7.4% | 8.4% | (1.0) pp | - Primarily reflects lower revenue, increased one-time corporate expenses from debt refinancing, and reduced income from equity investments related to TV Food Network LLC[12](index=12&type=chunk) - Offset, in part, by lower amortization of broadcast rights at The CW, lower interest expense, income tax, and operating expenses[12](index=12&type=chunk) [Adjusted EBITDA](index=3&type=section&id=Adjusted%20EBITDA) Second quarter Adjusted EBITDA decreased by **6.0%** year-over-year to **$389 million**, with the margin at **31.7%** compared to **32.6%** in the prior year Adjusted EBITDA (Q2 YoY) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | % Change | | :-------------- | :----------- | :----------- | :--------- | | Adjusted EBITDA | $389 | $414 | (6.0%) | | Adjusted EBITDA Margin | 31.7% | 32.6% | (0.9) pp | - Primarily reflects lower revenue and reduced income from equity method investments, mainly from TV Food Network LLC[12](index=12&type=chunk) - Offset, in part, by lower amortization of broadcast rights at The CW and lower operating expenses from restructuring initiatives[12](index=12&type=chunk) [Net Cash Provided by Operating Activities](index=3&type=section&id=Net%20Cash%20Provided%20by%20Operating%20Activities) Net Cash Provided by Operating Activities for the second quarter increased significantly by **40.3%** year-over-year to **$247 million** Net Cash Provided by Operating Activities (Q2 YoY) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | % Change | | :-------------------------------- | :----------- | :----------- | :--------- | | Net Cash Provided by Operating Activities | $247 | $176 | 40.3% | - Increase primarily due to changes in operating assets and liabilities reflecting the timing of receipts and payments[12](index=12&type=chunk) - Offset, in part, by a reduction in net income excluding other non-cash items[12](index=12&type=chunk) [Adjusted Free Cash Flow](index=3&type=section&id=Adjusted%20Free%20Cash%20Flow) Second quarter Adjusted Free Cash Flow increased by **31.2%** year-over-year to **$101 million**, driven by lower interest expense, capital expenditures, cash taxes, and operating expenses Adjusted Free Cash Flow (Q2 YoY) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | % Change | | :-------------------- | :----------- | :----------- | :--------- | | Adjusted Free Cash Flow | $101 | $77 | 31.2% | - Increase primarily due to lower interest expense (from reduced SOFR and debt reduction), lower capital expenditures, lower cash taxes, and lower operating expenses[12](index=12&type=chunk) - Offset, in part, by lower advertising revenues[12](index=12&type=chunk) [Capital Allocation](index=4&type=section&id=Capital%20Allocation) This section outlines Nexstar's capital allocation strategy for Q2 2025, detailing debt repayment, dividend distributions, and share repurchases [Q2 2025 Capital Allocation Summary](index=4&type=section&id=Q2%202025%20Capital%20Allocation%20Summary) In the second quarter of 2025, Nexstar utilized cash on hand and operating cash flow to repay **$101 million** of debt, distribute **$56 million** in dividends, and repurchase **$50 million** worth of common stock - Used cash on hand and cash flow from operations to repay **$101 million** of debt in Q2 2025[13](index=13&type=chunk) - Paid **$56 million** in dividends and repurchased **311,998 shares** for **$50 million**, totaling **$106 million** in shareholder returns in Q2 2025[13](index=13&type=chunk) Capital Allocation (Q2 & H1 YoY) | Cash Used For | Q2 2025 ($M) | Q2 2024 ($M) | H1 2025 ($M) | H1 2024 ($M) | | :-------------------- | :----------- | :----------- | :----------- | :----------- | | Debt repayment | $101 | $31 | $132 | $61 | | Acquisitions | - | - | $22 | - | | Stockholder return | $106 | $190 | $238 | $358 | | Common stock dividends | $56 | $55 | $113 | $112 | | Stock repurchases | $50 | $135 | $125 | $246 | | Shares Outstanding (End of period, in thousands) | 30,315 | 32,486 | 30,315 | 32,486 | | % Change in shares outstanding | (0.1%) | (1.7%) | (1.0%) | (3.3%) | [Debt, Cash and Leverage](index=5&type=section&id=Debt%2C%20Cash%20and%20Leverage) This section provides an overview of Nexstar's consolidated debt, cash balances, and leverage ratios as of June 30, 2025, including updated calculation methodologies [Debt and Leverage Ratios](index=5&type=section&id=Debt%20and%20Leverage%20Ratios) As of June 30, 2025, Nexstar's consolidated debt stood at **$6.4 billion**, with a first lien net leverage ratio of **1.81x** and a total net leverage ratio of **3.19x** - Consolidated debt of Nexstar and Mission Broadcasting, Inc. was **$6.4 billion** as of June 30, 2025, including senior secured debt of **$3.7 billion**[18](index=18&type=chunk) - The Company updated its leverage ratio calculation to reflect the average of the last two years of EBITDA[18](index=18&type=chunk) - As of June 30, 2025, the first lien net leverage ratio was **1.81x** (compared to a covenant of **4.25x**) and the total net leverage ratio was **3.19x**[18](index=18&type=chunk) Cash Balances and Debt Obligations | ($ in millions) | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :-------------- | :---------------- | | Unrestricted Cash | $234 | $144 | | Revolving Credit Facilities | $206 | $62 | | First Lien Term Loans | 3,465 | 3,750 | | 5.625% Senior Unsecured Notes due 2027 | 1,716 | 1,716 | | 4.75% Senior Unsecured Notes due 2028 | 996 | 995 | | Total Debt | $6,383 | $6,523 | [Non-GAAP Financial Measures & Reconciliations](index=7&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) This section defines Nexstar's key non-GAAP financial measures and provides detailed reconciliations for Adjusted EBITDA, Free Cash Flow, and Adjusted Free Cash Flow [Definitions of Non-GAAP Measures](index=7&type=section&id=Definitions%20of%20Non-GAAP%20Measures) This section provides the definitions for key non-GAAP financial measures used by Nexstar, explaining their calculation methodologies and purpose as indicators of operating performance and liquidity - Adjusted EBITDA is considered an indicator of the assets' operating performance, calculated by adjusting net income for various non-cash and one-time items[21](index=21&type=chunk) - Free Cash Flow is calculated as net cash provided by operating activities less capital expenditures[22](index=22&type=chunk) - Adjusted Free Cash Flow is considered a liquidity measure, providing useful information about cash generated for ongoing operations, debt payments, dividends, share repurchases, and acquisitions, by adjusting Free Cash Flow for specific items[23](index=23&type=chunk) [Adjusted EBITDA Reconciliation](index=11&type=section&id=Adjusted%20EBITDA%20Reconciliation) This section presents the reconciliation of Net Income to Adjusted EBITDA for the three and six months ended June 30, 2025, and 2024, detailing the adjustments made to arrive at this non-GAAP measure Reconciliation of Adjusted EBITDA | ($ in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $91 | $106 | $188 | $273 | | Add (Less): | | | | | | Transaction, other one-time and restructuring expenses | 10 | - | 10 | 1 | | Stock-based compensation expense | 21 | 20 | 39 | 38 | | Depreciation and amortization expense | 197 | 208 | 402 | 398 | | (Amortization) of broadcast rights expense | (79) | (87) | (168) | (156) | | Amortization of basis difference of equity method investments | 17 | 17 | 35 | 35 | | Interest expense, net | 97 | 113 | 194 | 227 | | Pension and other postretirement plans (credit), net | (8) | (7) | (16) | (14) | | Income tax expense | 39 | 43 | 80 | 105 | | Gain on disposal of an investment | - | - | - | (40) | | Other | 4 | 1 | 6 | (1) | | **Adjusted EBITDA** | **$389** | **$414** | **$770** | **$866** | [Free Cash Flow and Adjusted Free Cash Flow Reconciliation](index=12&type=section&id=Free%20Cash%20Flow%20and%20Adjusted%20Free%20Cash%20Flow%20Reconciliation) This section provides the reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow and Adjusted Free Cash Flow for the three and six months ended June 30, 2025, and 2024 Reconciliation of Free Cash Flow and Adjusted Free Cash Flow | ($ in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $247 | $176 | $584 | $452 | | Add (Less): | | | | | | Capital expenditures | (29) | (37) | (64) | (81) | | **Free Cash Flow** | **$218** | **$139** | **$520** | **$371** | | Add (Less): | | | | | | Transaction, other one-time and restructuring expenses | 10 | - | 10 | 1 | | Changes in operating assets and liabilities | (21) | 75 | (18) | 150 | | Changes in income tax payable | (92) | (130) | (38) | (59) | | Taxes paid on sale of assets | - | 11 | - | 11 | | Pension and other postretirement plans (credit), net | (8) | (7) | (16) | (14) | | Payments for capitalized software obligations | (7) | (10) | (10) | (11) | | Proceeds from disposal of assets and insurance recoveries | 1 | 1 | 1 | 2 | | Cash contribution from noncontrolling interests | - | - | - | 19 | | Other | - | (2) | - | (4) | | **Adjusted Free Cash Flow** | **$101** | **$77** | **$449** | **$466** | [Consolidated Financial Statements](index=9&type=section&id=Consolidated%20Financial%20Statements) This section presents Nexstar's condensed consolidated statements of operations and cash flows for the specified periods, offering a statutory view of financial performance [Condensed Consolidated Statements of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section provides the condensed consolidated statements of operations for the three and six months ended June 30, 2025, and 2024, detailing net revenue, operating expenses, income from operations, net income, and earnings per share Condensed Consolidated Statements of Operations | (in millions, except for share and per share amounts) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net revenue | $1,229 | $1,269 | $2,462 | $2,553 | | Operating expenses: | | | | | | Direct operating | 557 | 552 | 1,108 | 1,100 | | Selling, general and administrative | 198 | 216 | 404 | 432 | | Corporate | 64 | 54 | 116 | 108 | | Depreciation and amortization | 197 | 208 | 402 | 398 | | Other | - | (1) | - | (1) | | Total operating expenses | 1,016 | 1,029 | 2,030 | 2,037 | | Income from operations | 213 | 240 | 432 | 516 | | Income from equity method investments, net | 11 | 16 | 19 | 35 | | Interest expense, net | (97) | (113) | (194) | (227) | | Pension and other postretirement plans credit, net | 8 | 7 | 16 | 14 | | Gain on disposal of an investment | - | - | - | 40 | | Other expenses, net | (5) | (1) | (5) | - | | Income before income taxes | 130 | 149 | 268 | 378 | | Income tax expense | (39) | (43) | (80) | (105) | | Net income | 91 | 106 | 188 | 273 | | Net loss attributable to noncontrolling interests | 6 | 12 | 17 | 20 | | Net income attributable to Nexstar Media Group, Inc. | $97 | $118 | $205 | $293 | | Net income per share available to common stockholders: | | | | | | Basic | $3.09 | $3.59 | $6.50 | $8.85 | | Diluted | $3.06 | $3.54 | $6.43 | $8.71 | | Weighted average number of common shares outstanding: | | | | | | Basic (in thousands) | 30,221 | 32,816 | 30,375 | 33,133 | | Diluted (in thousands) | 30,514 | 33,287 | 30,719 | 33,656 | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the condensed consolidated statements of cash flows for the six months ended June 30, 2025, and 2024, detailing cash flows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows | ($ in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | | Cash flows from operating activities: | | | | Net income | $188 | $273 | | Adjustments to reconcile net income to net cash provided by operating activities: | | | | Depreciation and amortization | 402 | 398 | | Stock-based compensation expense | 39 | 38 | | Amortization of debt financing costs, debt discounts and premium | 5 | 5 | | Loss on extinguishment of debt | 5 | - | | Gain on disposal of an investment | - | (40) | | Deferred income taxes | (24) | (14) | | Payments for broadcast rights | (161) | (166) | | Income from equity method investments, net | (19) | (35) | | Distribution from equity method investments – return on capital | 125 | 139 | | Changes in operating assets and liabilities, net of acquisitions and dispositions: | | | | Accounts receivable | 6 | 48 | | Prepaid and other current assets | (6) | (12) | | Other noncurrent assets | 5 | (11) | | Accounts payable | 60 | (94) | | Accrued expenses and other current liabilities | 20 | (1) | | Income tax payable | (38) | (59) | | Other noncurrent liabilities | (29) | (21) | | Other | 6 | 4 | | Net cash provided by operating activities | 584 | 452 | | Cash flows from investing activities: | | | | Purchases of property and equipment | (64) | (81) | | Payments for acquisitions | (22) | - | | Proceeds from disposal of an investment | - | 40 | | Other investing activities, net | (3) | 2 | | Net cash used in investing activities | (89) | (39) | | Cash flows from financing activities: | | | | Proceeds from debt issuance, net of debt discounts | 3,393 | 55 | | Repayments of long-term debt | (3,543) | (116) | | Purchase of treasury stock | (125) | (246) | | Common stock dividends paid | (113) | (112) | | Payments for capitalized software obligations | (10) | (11) | | Contribution from noncontrolling interests | - | 19 | | Payment for excise tax on stock repurchases | (5) | - | | Other financing activities, net | (2) | (3) | | Net cash used in financing activities | (405) | (414) | | Net increase (decrease) in cash and cash equivalents | 90 | (1) | | Cash and cash equivalents at beginning of period | 144 | 147 | | Cash and cash equivalents at end of period | $234 | $146 | [Other Information](index=5&type=section&id=Other%20Information) This section provides details on Nexstar's Q2 2025 conference call, forward-looking statement disclaimers, and investor and media contact information [Second Quarter Conference Call](index=5&type=section&id=Second%20Quarter%20Conference%20Call) Details for Nexstar's second quarter 2025 earnings conference call, including dial-in numbers, conference ID, and webcast access for investors and interested parties - Nexstar hosted a conference call on August 7, 2025, at 10:00 a.m. ET to discuss financial results[17](index=17&type=chunk) - Dial-in number: **+1 877-407-9208** or **+1 201-493-6784**, conference ID **13753994**[17](index=17&type=chunk) - A live webcast and replay are available through nexstar.tv under 'Events and Presentations' / 'Investor Relations'[17](index=17&type=chunk) [Forward-Looking Statements](index=6&type=section&id=Forward-Looking%20Statements) This section serves as a standard disclaimer, indicating that the communication contains forward-looking statements based on current expectations, which are subject to various risks and uncertainties - The communication includes forward-looking statements based on current expectations and projections about future events[19](index=19&type=chunk) - These statements involve risks and uncertainties, and are subject to change based on various important factors, including economic conditions, debt servicing, acquisitions, advertising pricing, regulatory actions, competition, programming costs, and technological developments[19](index=19&type=chunk) - Nexstar undertakes no obligation to update or revise any forward-looking statements[19](index=19&type=chunk) [Investor and Media Contacts](index=8&type=section&id=Investor%20and%20Media%20Contacts) This section provides contact information for investor relations and media inquiries, listing key personnel and their respective contact details - Investor Contacts: Lee Ann Gliha (EVP and Chief Financial Officer) and JCIR (Joe Jaffoni, Jennifer Neuman)[27](index=27&type=chunk) - Media Contact: Gary Weitman (EVP and Chief Communications Officer)[27](index=27&type=chunk)

Summary of Key Points from the Conference Call Industry Overview - The conference focused on the media and sports industry, featuring 13 companies and discussions on regulatory changes, consolidation, and digital media trends [1][2] - Media consolidation remains a significant topic, with notable deals such as Amazon's acquisition of MGM for $8.5 billion and the Discovery and WarnerMedia merger [3] - The shift from traditional media to digital media continues, with American consumers spending approximately eight hours daily on digital platforms, which is double the time spent on traditional media [4] Company Focus: EW Scripps - EW Scripps is a diversified media enterprise with a strong presence in local television, operating 61 TV stations and reaching over 36% of U.S. TV households [9][10] - The company has undergone significant transformation, focusing on expanding its local TV footprint from 27 stations to over 60 in the past decade [14] - Scripps aims to enhance connections between audiences and brands, as well as between advertisers and audiences, to drive financial benefits for shareholders [15] Financial Performance and Capital Allocation - Scripps' primary capital allocation priority is debt reduction, with leverage decreasing from 6x in Q2 of the previous year to 4.9x in the most recent quarter [17][18] - The company has directed 99% of discretionary cash flow towards debt paydown since the ION acquisition in 2021 [18] - Recent refinancing efforts have limited the increase in average debt costs to less than one percentage point despite a challenging rate environment [19] Regulatory Environment and Consolidation - There is optimism regarding deregulation in the broadcast industry, which could facilitate consolidation and benefit local broadcasters [22] - Scripps supports changes to antiquated ownership rules, emphasizing the need for regulations to adapt to the current competitive landscape, including competition from big tech [23][24] - The company sees opportunities for asset swaps and selective sales to improve operational performance rather than being a major buyer in the M&A market [31] Advertising Trends - Local advertising comprises 70% of Scripps' core advertising revenue, with national businesses accounting for 30% [59] - The advertising environment is challenging, with local businesses showing resilience while sectors like automotive are struggling [60][61] - Political advertising is expected to grow, with Scripps positioned to capture a significant share of spending in upcoming elections [79] Sports Programming Strategy - Scripps has developed a national sports strategy leveraging its reach through ION, focusing on underrepresented leagues like the WNBA and NWSL [51][54] - The company has seen significant audience growth, with the Florida Panthers' ratings up 149% compared to the previous RSN model [56] - Scripps anticipates a shift in MLB rights negotiations, likely following a model that combines linear and streaming platforms [57] Connected TV and Future Opportunities - Scripps has reported a 42% increase in connected TV revenue, now exceeding $100 million, indicating a strong growth area [87] - The company is optimistic about the potential of ATSC 3.0 technology to transform local broadcasting, with plans for significant developments in the coming years [94][96] Conclusion - Scripps is focused on improving operational performance, reducing debt, and navigating regulatory changes to enhance its competitive position in the media landscape [44][45] - The company is well-positioned to capitalize on growth opportunities in sports programming and connected TV while adapting to the evolving advertising environment [78][87]

Core Viewpoint - Nexstar Media Group, Inc. (NASDAQ: NXST) is initiated with a Strong Buy rating and a price target of $239, highlighting its position as the largest local television broadcaster and media platform in the US [1] Company Overview - Nexstar Media Group is recognized for delivering local programming and advertising, establishing itself as a key player in the local media landscape [1] Research Methodology - Moretus Research employs a structured framework to identify companies with durable business models and mispriced cash flow potential, focusing on U.S. public markets [1] - The research emphasizes rigorous fundamental analysis combined with a judgment-driven process, avoiding noise and overly complex forecasting [1] - Valuation methods are based on sector-relevant multiples tailored to each company's business model, emphasizing comparability and relevance [1] Investment Focus - The research coverage targets underappreciated companies undergoing structural changes or temporary dislocations, where disciplined analysis can lead to asymmetric returns [1] - Moretus Research aims to elevate the standard for independent investment research by providing actionable insights and a strong filter for relevant information in equity analysis [1]

Nexstar Media Group (NXST) FY Conference Summary Industry Overview - **Industry**: Broadcast Media - **Company**: Nexstar Media Group Key Points and Arguments 1. **Local Station Business Focus**: Nexstar emphasizes the importance of local stations as the foundation of their business, providing relevant content and entertainment to local communities, which fosters strong relationships with advertisers and audiences [4][5] 2. **Regulatory Environment**: The current political landscape is seen as favorable for deregulation, with one party controlling both houses of Congress, which may lead to the removal of outdated regulations that hinder competition with tech giants [6][7] 3. **Future of the Industry**: There is uncertainty about the future of traditional networks, but Nexstar anticipates a consolidation of local groups that could expand their footprint across the U.S. [8][9] 4. **Legal Challenges**: Potential legal challenges are anticipated regarding the removal of ownership caps and duopoly rules, but Nexstar believes the DOJ will be cooperative in merger reviews [10][11] 5. **M&A Strategy**: Nexstar has a strong track record in M&A, with 40 deals completed from 2011 to 2019, and aims to continue creating shareholder value through strategic acquisitions, particularly in larger markets [13][14][19] 6. **Synergy Opportunities**: The company sees opportunities for synergy capture through retransmission optimization and cost efficiencies, especially in owning multiple stations in a market [16][17][19] 7. **Advertising Revenue Composition**: 63% of Nexstar's revenue comes from distribution, which is more insulated from economic changes, while 37% comes from advertising, with a significant portion being local advertising [54][55] 8. **Political Advertising Outlook**: Nexstar expects strong political advertising revenue in 2026, driven by their presence in battleground states and increased spending in upcoming elections [58][60] 9. **News Nation Growth**: The network is focused on increasing awareness and credibility, leveraging local journalists to provide unique perspectives on news stories [49][50][52] 10. **Sports Programming Strategy**: Nexstar is expanding its sports programming, with 40% of CW's schedule now dedicated to live sports, and is exploring opportunities to acquire more sports rights [38][44][45] Additional Important Content - **Impact of Streaming Services**: The introduction of new streaming services is seen as a potential challenge, but Nexstar believes that broadcast components will remain essential for sports leagues [32][35][36] - **ATSC 3.0 Development**: Nexstar is involved in discussions about developing a backup GPS system using spectrum, which could lead to significant revenue contributions in the future [63][64][66] - **Market Dynamics**: The company acknowledges competition from tech companies like Amazon in local advertising markets, emphasizing the need for regulatory changes to level the playing field [12][26] This summary captures the essential insights from the Nexstar Media Group FY Conference, highlighting the company's strategic focus, regulatory environment, and market opportunities.