Good morning. My name is Kelly, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Gray Television First Quarter 2019 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Mr. Hilton Howell, Executive Chairman and CEO. Please go ahead.

Thank you so much, Kelly, and thank everyone for joining us this morning. As Kelly mentioned, I'm Hilton Howell, and I really appreciate everyone joining us for our first quarter 2019 earnings call. As usual, I am joined today by our President and co-CEO, Pat LaPlatney; our Chief Legal and Development Officer, Kevin Latek; and our Chief Financial Officer, Jim Ryan. We will begin this morning with a disclaimer that Kevin will provide and then each of the 4 of us will have a brief statement and then open it up for questions.

Thank you, Hilton. Good morning, everyone. Certain matters discussed on this call may include forward-looking statements regarding, among other things, future operating results. Those results are subject to a number of risks and uncertainties. Actual results in the future could differ from those described in the forward-looking statements as a result of the various important factors. Such factors have been set forth in the company's most recent reports filed with the SEC and included in today's earnings release. The company undertakes no obligation to update these forward-looking statements. Gray uses its website as a key source of company information. The website address is www.gray.tv. We also will post an updated investor deck to the website in about 2 weeks. Included on the call will be a discussion of non-GAAP financial measures and, in particular, broadcast cash flow, broadcast cash flow less corporate expenses, operating cash flow, free cash flow and certain leverage ratios. These metrics are not meant to replace GAAP measurements but are provided as supplements to assist the public in their analysis and valuation of our company. We include reconciliations of the non-GAAP financial measures to the GAAP measures in our financial statements that are available on our website. I now return the call to Hilton.

Thank you very much, Kevin. We are exceptionally pleased to report the results this morning of our very first quarter as the new, larger, more diversified Gray Television. We're exceptionally pleased to report, once again, all-time record news. Our total revenue for the first quarter was $518 million, a 129% increase. This is an exceptionally strong showing, and I believe it confirms the wisdom of the Raycom transaction that we closed on the 1st of January of this year. Our profits would have been an all-time high for the company, an outstanding record, except for the transaction-related expenses that we will cover subsequent in the conversation. Across the board, we saw continued improvement in our local business conditions that started last summer, really bills during the first quarter. Recall that we had guided our Q1 core local and national ad revenue, excluding the nonreturning Winter Olympics revenue, would be approximately flat. Instead, on a combined historical basis, excluding 2018 Winter Olympics revenue, our first quarter local and national advertising revenue grew by $7 million from the year-earlier period representing a 3% increase for the quarter. As you saw in our release this morning, our GAAP net loss attributable to common shareholders for the first quarter was $31 million. As we also explained in the release, the Raycom transaction necessitated the immediate expensing of $68 million transaction-related expenses, specifically those costs included incentive and severance compensation, third-party termination fees and legal, accounting, finance and other professional fees. Excluding those transaction-related costs, our net income attributable to our common shareholders would have been our best first quarter ever of approximately $27 million, and our diluted net income per common share would have been approximately $0.27. We are again exceptionally pleased that our broadcast cash flow for the first quarter was $123 million, our best first quarter broadcast cash flow in the company's history. We need to be careful not to read too much into one quarter's results. Nevertheless, we take great pride in our Q1 results because it proves the wisdom of the Raycom transaction and vindicates all of the hard work and sacrifices made by all of my many colleagues here in Gray and heritage Gray and heritage Raycom and by our advisers over the past several months. We are off to a brilliant start as a major television broadcast group, and I cannot wait to keep building on the success we are reporting today. I'd now like to turn the call over to Pat to address a few operational milestones and the progress of our new company.

Thanks, Hilton, and good morning, everyone. Today's result and our guidance today certainly paint a good picture. We saw general market conditions improve each quarter last year, and while this year began slowly, in part due to the long government shutdown, business conditions and sentiment appear to be improving as the year progresses. We're particularly pleased that core finished up this quarter ex Olympics, which is certainly better than we expected in February. On our last earnings call, we announced that Greta Van Susteren joined Gray as our Chief National Political Analyst. She hit the ground running, appearing on countless local newscasts every week from Washington. She's already provided our local newsrooms with expert, unbiased coverage of national and international political developments, of which there have been many in the past few weeks. At the NAB show last month, we announced that Gray will launch a new weekly program this September called Full Court Press with Greta. This new weekend political show will focus on how policy and national events impact local communities across the country. It will also involve a broad bench of Gray Television journalists from newsrooms across the country, including the award-winning team of Investigate TV out of New Orleans. Since that announcement, we've reached verbal commitments to clear the show from television stations across the country, including stations in the New York, Los Angeles, Chicago and San Francisco markets. Today we have a preliminary reach of 46.5% of the country for Full Court Press, and we still have many active discussions that will ensure broad distribution for the show when it launches in September. 2 weeks ago we announced another exciting new venture. Specifically, we have entered into a joint venture with Opry Entertainment Group, a subsidiary of Ryman Hospitality Properties, to create a premier linear multicast and over-the-top channel dedicated to the country lifestyle. We expect this new channel will transform the current landscape of country music media offerings by providing a dedicated home for artist-driven country lifestyle programming. The new channel will deliver a premium entertainment service featuring content that highlights country music artists and the passions, hobbies and love of music they share with their fans. The new service will be based in Nashville and will be fueled by marketing and promotional resources from both companies' extensive network of media assets. We will announce a new name for the channel soon, and we expect it to launch in early 2020 across TV stations located throughout the country, followed by a companion premium over-the-top service in mid-2020. I now turn the call to Kevin.

Thank you, Pat. I begin this morning with retransmission, which we know has been a key concern for media investors lately. Our retransmission revenue for the first quarter came in at $204 million. This figure represents, on a combined historical basis, an increase of $42 million or 26% over the first quarter of last year. We beat even our guidance here because of better-than-expected OTT and MVPD subscriber numbers as well as some catch-up payments from certain providers. We guided on our last call an approximately 20% increase in gross retransmission revenue for the year. We remain very comfortable with that guide, which could turn out to be a bit cautious, given the factors that led our first quarter numbers to come in a little stronger. Yes, we are, like everyone else, seeing some modest sub erosion in the MVPD universe. At the same time, however, our nontraditional subscriber base has been growing faster than anticipated. In fact, our nontraditional sub count nearly doubled between the end of 2017 and the end of 2018. Moreover, we have now crossed an important milestone in that the number of monthly paid subscribers receiving a Big 4 channel via an OTT or direct-to-consumer platform now exceeds last year's decline in the number of traditional MVPD subs. Given all this, we continue to expect growth in our gross and net retransmission revenues. We will provide guidance on our net retrans revenues once we complete our ongoing negotiations to renew our existing Fox Network agreements, all 21 of which expire this June 30. Fox makes up a fairly small portion of our sub base and our total revenues. We're just not comfortable providing net returns guidance until we have full visibility into our anticipated expenses. As a reminder, already this year we entered into new…

Thank you, Kevin. Good morning, everyone. Our earnings release and our 10-Q were filed a little earlier this morning. I'll keep my comments on results of operations for Q1 as well as comments on Q2 to a combined historical basis. As Hilton mentioned earlier, we're very pleased with where first quarter revenue came out, especially considering the $13 million of Olympic revenue we were going against from last year, and we are encouraged that March finished stronger than had originally been anticipated. First quarter expenses were in line with our guidance, and as discussed in our Q4 call and as well as Hilton mentioned earlier today, our Q1 results were impacted significantly by the one-time-only costs associated with the Raycom merger, which again included $28 million of third-party contract termination fees, $22 million of professional fees and $18 million of incentive and/or severance compensation. Of those costs, approximately $36 million hit our broadcast expense line, and approximately $32 million hit our corporate expense line. If you back out those one-time-only costs, then our net income available to common shareholders for the first quarter of '19 would have approximated an income of $27 million or about $0.27 per share. Quickly updating everyone again on our Raycom merger synergies, as we discussed on our last call as well, payroll, we have currently taken actions to implement approximately an aggregate of $62 million worth of annualized savings. That includes payroll reductions involving over 130 positions and $22 million of annual pay compensation. Contractual arrangements terminating a national rep firm and other contract changes produced $18 million to $20 million of annualized savings. We're still very comfortable with the $15 million of net retransmission uplift that we have talked about. And the Raycom Aviation Unit was closed down immediately upon closing, and the aircraft were sold for just shy of $3 million in Q1. Those annualized savings approximate about $11 million of real year-over-year savings in Q1, and I would expect in Q2 that year-over-year savings is a little higher, somewhere between $12 million and $15 million. Turning to the balance sheet. As of March 31, 2019, our total leverage ratio as defined in our senior credit facility was 4.86x. That was based on a trailing 8-quarter operating cash flow number of $770 million. Aggregate principal amount of debt outstanding as of 3/31 was $3.967 billion. Cash on hand was approximately $225 million. Our second quarter guidance, we anticipate revenue increasing low-single-digit percent, with strong mid-20s growth in retransmission revenue and low-single-digit growth in core. Broadcast expenses are really being driven in Q2 by increase of reverse comp of $22 million to $23 million as the principal driver. I'll turn the call back to Hilton.

Thank you very much. And now Kelly, we will open up the call to any questions that anyone may have of us.

[Operator Instructions.] Your first question comes from the line of Marci Ryvicker from Wolfe Research.

I have just a couple of questions. Jim, that $12 million to $15 million of net synergies for Q2, I guess, is that net? Or are there any other onetime expenses we need to think about that may hit either corporate or broadcast OpEx?

We said in our guidance that we expect in Q2 maybe about $1 million of OTO related to the merger in the broadcast line and somewhere between $1 million and $2 million in the corporate line. There would be some more OTO coming later in the year as we make additional progress in reaching our $80 million worth of total synergies and which we feel very comfortable about attaining on an annualized basis. But that would be Q3 and Q4, and we'll talk about that as we get to our Q2 call.

Okay. For the new channels that you're launching, how should we think about investment spend on those throughout the year?

It's de minimis. I would describe it as immaterial, and any investments, especially in the joint venture with Ryman, would be over a 2- to 3-year period. So it's -- we're very excited, and Pat can speak more to the project. But from a cash investment standpoint, it's not a material event for us.

Okay. And then, Kevin, with Fox, can you remind us when this is up? And I couldn't tell from your comments if you're already talking to them.

We started talking with all of the networks some time ago. We got the other negotiations done pretty quickly. Fox has always, in my experience, just taken a lot longer and usually goes up to and sometimes past the deadline with extensions. So all 21 of our affiliations are up on June 30 of this year, which is sort of a typical expiration date for Fox contracts. They typically do expire on June 30 for most companies.

Your next question comes from the line of Kyle Evans from Stephens.

Jim, you ripped through those $62 million in synergies. I'm sorry. Would you mind ticking through those one more time a little bit more slowly? And then I've got some follow-ups.

Yes, sure. So $28 million is contract termination fees; $22 million would be professional fees, so that's bankers, lawyers, everybody else that gets paid in a large deal, accountants; and $18 million of a combination of incentive pay and/or severance stemming from the merger. And as I said, $36 million of that hits the broadcast line in Q1, and about $32 million hits the corporate expense line in Q1.

Great. You mentioned low singles on core pacing in Q2. Could you dive down and just kind of tell us what's driving that there, with some specific commentary on auto, please?

Auto has continued to be sluggish. Maybe Pat has a little more color for that.

Yes, auto is sluggish, although we're seeing pretty strong performance out of legal and financial. In fact, both are really very strong relative to the past few quarters. But auto continues to be weak.

As we talked about on our Q4 call, we mentioned that Ford spending was off this year. We think that's due to their product line shift from sedans to trucks and SUVs, so we are seeing that a little bit. And as we've commented several times over the last few calls, Dodge/Chrysler/Jeep continues to be challenged by all their product issues.

Where do you think auto shakes out for the year?

It's off to a slow start first half of the year, so I think it's -- I don't know exactly where it shakes out, but it's not going to be as -- I don't think quite as robust for us as we originally had hoped.

Okay. And I'm not looking for real detail here, given that digital's now no longer its own segment, but just curious as to kind of what you're seeing underlying in digital as it's embedded in your local and national core.

We see continued growth there.

Low single, mid-single, high single? Just...

Low doublish.

Your next question comes from the line of Davis Hebert from Wells Fargo Securities.

I wanted to ask about some of the adjustments, or the one-time-only costs you laid out. If I had those back -- severance, the third-party contract and the professional fees -- I get about $147 million of I guess what I'd call EBITDA. But then your allowance for the credit agreement seems to be more limited. I think you reported a little over $100 million there. So just wanted to understand the distinction between things.

Yes, you are perceptive. The credit agreement, by the way the definition works, we're allowed to add back the $22 million of professional fees that we incurred around the merger. I'm not allowed, under the strict definition, to add back the $28 million of third-party contract termination fees nor the $18 million of incentive/severance comp. So you can add -- everybody has those data points, and you can add back as appropriate, because they are definitely one-time-only costs, and they're in our rearview mirror at this point.

Okay. So if that's the case, I guess I can say at liberty, then, the 4.86x slightly overestimates your leverage. Is that accurate? If I were to add back all those costs?

Yes. As a matter of fact, if you do those add-backs, it's more like a 4.74x rather than the 4.86x that the strict definition makes us adhere to.

Okay. And then in looking at your operating expense guidance for the second quarter, just looking through the various items, I estimated $2 million to $3 million of one-time expenses that you expect to incur in the second quarter. Is that accurate?

Yes, that is what our guidance indicated. And as I mentioned a few minutes ago, I would anticipate that there's going to be more OTO costs sometime in the third or fourth quarter as we continue to move forward in the year and get the full $80 million of annualized synergies that we had promised nearly a year ago when we first announced the deal.

Okay. Understood. And then lastly on the leverage trajectory here, I think in the past you've said in the mid-4x area by the end of this year, and then the mid-3x area by the end of 2020. Do you anticipate any changes to those levels?

What we have said, to say it slightly differently, is we think we will be lower in the 4s by the end of this year, and I would anticipate right now that's south of 4.5, and we will definitely be somewhere comfortably in the 3s at the end of next year. I don't think we've quite characterized where -- I wouldn't describe it as necessarily low 3s, but comfortably in the 3s.

Your next question comes from the line of Dan Kurnos from Benchmark.

Kevin, look, I don't want to be cynical or whatever. I know you guys have said that the outlook might be a little bit cautious. But based on Q1 and your guide, and obviously we've had some -- I'd love to get your thoughts on this. You kind of alluded to it in your commentary. We had Nexstar also mentioning that some of the MVPDs have moved more aggressively down market. So I'm wondering if that's part of the reason why you're seeing some of the upside here. But you would need, obviously, some kind of sub attrition baked in or a reset of rate, which can obviously happen with timing, in order to get back down to your original guide. So just maybe any additional color you could provide around how you're thinking about retrans over the balance of the year would be helpful.

Last call we had said we expected gross would be up about 20% for the year. We think that's very doable. I think Jim said in his remarks, he said growth of retrans could be up in the mid-20% for this year, and that's on a combined historical basis, not just coming off of the as-reported GAAP number pre-Raycom. So I think that's pretty strong relative to our peers. I haven't done a line-by-line, but we're pretty happy with being up 20% on a combined historical basis. That's pretty in line with where we've been the last couple of years. Given that we had very few renewals this year, as I said, we're seeing some sub losses like everybody else, but our OTT growth is really strong. And the net-net is that our gross is doing better than expected. So I think we're in better shape now with retrans than we even thought we'd be last year at this time. So I'm not sure what the concern is. If you're asking are we slowing down...

It's not a concern, Kevin. My point is that you guys are beating by a pretty big margin, and it seems like it's going to flow through the rest of the year. So to get to your original guide, there would have to be some kind of weird step-down in the back half of the year that I don't think it feels like you're anticipating.

No. Retrans can sometimes be lumpy, and that's kind of what we're -- we said about 20% or so gets you a little above $800 million in gross for the year. But payments lie. We have some folks who just pay late. We have some folks who missed a month and we're getting caught up. We've had some audits that turned up some underpayments. So that stuff's just a little bit lumpy. So we're still confident the year's going to be 20% or better increase on growth on a combined historic basis. So we think that's pretty strong.

Yes, and for the record, Kevin, I think we all think that your retrans is pretty damn strong relative to everybody else. Anyway, just let me shift to core. Given kind of the auto softness and with crowd out, obviously, or benefits from displacement in the back half of the year, I think you guys still said you thought core would be up. Has that changed at all, given sort of the incremental squishiness in the auto category?

I think local has an opportunity to be up a little bit by the time we get through a full year. Given national off to a slow start, and national's going to reflect the auto more than the local will, that's probably not going to show growth year-over-year. But I think core has an opportunity, still, I think especially as, hopefully, things will pick up later in the year. And as you mentioned, comps are easier, especially in Q4, that local could still be showing in the green territory by the time we get to the end of the year.

Your next question comes from the line of [ John Kornreich ] from [ Gray Media ].

Jim, tell me again. What was that $770 million number you threw out? Was that trailing 24 months?

Yes, trailing 8-quarter, yes.

Through the end. And on a normalized basis, would you say that the conversion rate of free cash flow to EBITDA should be south of 50% or north of 50%?

[ John ], actually, I don't think I've thought about that quite like that.

I mean in that $770 million, is the free cash flow in the $400 million range, which is north of 50%?

I'd say it a little differently, and it depends on -- if you're talking about a 2-year blended, so you get the full political cycle?

Right, yes, absolutely.

It's probably -- definitely well into the 40% conversion rate, and maybe getting closer to 50%. But it's very strong. As we've talked about many times, you can see it in the historical numbers that we've published in several investor decks. And obviously, with the $770 million, you really need to add back about $42 million or $46 million of OTO that the definition doesn't let me add back. So you're north -- if you do that, you're north of $800 million. I've got $220 million of cash interest. You can pick that up right from the balance sheet in the Q. We have $14 million of required debt amortization every year; $75 million of CapEx, roughly, we've talked about several times with people; $52 million of preferred dividends; and then it's what's the cash tax is over the next couple of years. And this year we're saying it's -- and the Q says we're expecting maybe $13 million, $12 million, $13 million of cash taxes. Obviously, next year, it gets up significantly higher with the political, but we still have NOL to use up next year as well and probably into the year after that to some extent. So you get very strong free cash flow generation out of this company on a 2-year basis.

I just did the quick numbers in response to what you said, and it's definitely north of 50%. What I'm getting at, I'm trying to figure out why this...

That's good, [ John ].

[indiscernible]

I like your math. Keep it up.

Yes. What could the -- what should the normalized tax rate be in the next 2 or 3 years? Cash tax rate? It should be...

This year we're especially low, and I won't -- just because of basically some prepayments last year that didn't need -- that actually we get the benefit of this year. I think next couple of years is an off year and a non-political year, you're probably in the mid-30-ish range in cash taxes. In a political year, obviously, that's going to depend a little bit on the political revenue. But as we've all talked about many times, 2020 especially will be a good year, and we could all argue how good is good. I think you're probably in the $60 million, $70 million, $75 million range. So on an average, $40 million to $50 million, maybe.

Okay. Lastly, you used to put in your slide shows the breakdown of revenue between networks. Can you at least roughly give that to us now on a pro forma basis?

We haven't done that for a while, but I'd say CBS and NBC probably accounts for about 2/3 in total, and they're split pretty much equal. Fox revenue is maybe 10 -- high-single-digit percentage, maybe 10%. It's not big, even with the new company combined. And the other piece, then, would be your ABC. Trying to do math in my head, but I think that probably accounts for about high teens percentage, 20-ish, maybe.

Okay. So I mean if the Fox renegotiations go pretty much as planned, is that how we get the 25% increase in gross -- in net retrans?

No, we're talking about gross increase in retrans. We have not given any guide for net retrans yet this year, and we won't until we get through the Fox negotiation.

Okay. Even though Fox is 9% of revenue?

Correct.

Your next question comes from the line of Jim Goss from Barrington Research.

Maybe this is a Kevin or possibly a Jim. But in terms of the sub stabilization, if you will, with OTT versus exceeding loss in subscriber levels, is that -- are you implying that that's also true in financial terms, that they're pretty much -- the give-and-take is pretty much even on both sides so that it's not just in terms of your viewers and subscribers, but it's also in the financial impact?

Jim, we don't know how at this point to guess how many OTT subs are cord cutters versus people who already have an MVPD sub versus people who never had an MVPD subscription. What we have said is that we're largely indifferent as to how a sub gets to us, whether it's through traditional or nontraditional means. The MVPD -- I'm sorry, the non-MVPD sub base is certainly growing a lot faster than expected, and so we're pretty happy with that. But we haven't done any, and I don't know how we would do any kind of analysis to decide whether it's a -- we're financially better off or not because there's too many assumptions as to where these subs are coming from.

Is the retrans you generally negotiate going to be based on a certain value or certain markets and not on a per-sub basis such that any impact on a change of that subscriber base wouldn't happen until the next renegotiation?

I'm not sure I understand the question. All of our MVPD contracts pay a per-sub, per-month fee for the type of channels that are being carried. And that's, I think, consistent in probably every single retrans contract across the industry.

Okay. And the other question regarding some of the programming you had with Greta Van Susteren and Opry. I think Jim indicated to Marci that it was somewhat immaterial in terms of cost. I was wondering what the primary purposes were of the programming. Is it for branding? Do they syndicate some of the programs? Or are there -- is it to create some programming for local ad sales rather than purchase programming from others? And if you have any further ambitions, I wonder if you could frame that out in terms of programming.

I would say the channel with Opryland we're doing is a 24/7 channel that we're going to launch on multicast networks. We're doing it because we think we're going to make money. Remember, Pat comes from a company that had launched multicast channels in the past and done pretty well with it, so we're hoping to repeat that success. Greta's is shown on a channel, [ Rule 1 ]. Greta has been really valuable to our local TV stations and their franchises already, but taking a -- creating a political show is the next step in our relationship with her, and we're doing that again because we think we're going to make money on it. And it's a weekend program, so it's not like we're looking to save money on traditional game shows or judge's shows. This is a weekend political show, so it's going to be on -- it's not really to place -- it's not replacing content that we're buying from syndicators. It's something we think will be good for the audience, good for our demo and again, at the end of the day, we're spending a little bit of money. I think we're going to make it back. So neither one of these is a big material investment or a material cost, but we do things because they make money.

[Operator Instructions.] Your next question comes from the line of Michael Kupinski from NOBLE Capital Markets.

Congratulations on your quarter. Can you give some color -- you gave guidance in terms of the second quarter in terms of corporate and administrative expenses as well as production expenses. Is the second quarter, then, a good runway for what we should expect for the balance of the year on those line items?

The production expenses are very seasonal. If you go look back in the first quarter, basically the production company, think about it with the collegiate sports schedule and the professional sports schedule. First quarter, you've got basketball; fourth quarter, you've got football. Second and third quarters are pretty lean both in the revenue lines and the expense lines, and it's just the natural flow of that business. I think you're -- the corporate line in Q2, to some extent, would be a reasonable indicator for Q3. We're certainly working on some synergies, but I think Q4 corporate line usually runs a little bit higher than Q2 and Q3 just because of seasonality and incentive comps blocking the final numbers.

Got you. And I know that you plan to focus on digesting the Raycom acquisition, but I also know that the company always thinks about the next acquisition, given that you likely starts the seeds of developing relationships quite early on. Can you discuss the pipeline for future acquisitions and the nature of those, whether the targets might be larger or smaller in nature, maybe geographic areas or affiliations or areas of interest there?

Yes. We don't have the luxury of choosing from among a large number of data points and saying, "Now we're going to focus on the state of Oregon"; or "We're going to focus on CBS affiliations." There's a limited number of markets, and so by definition, a limited number of #1 and #2 TV stations that would meet our criteria. Of those, a lot of stations are already owned by a network or one of our larger peers. So we're -- our pipeline are the #1 and strong #2 TV stations that are not owned by a conglomerate or another large peer who's not selling. Their decisions as to when to exit are driven entirely by factors really beyond our control and beyond our visibility. So we have seen in our 30-some transactions over the last few years that people decide to sell based on generational issues, family issues, and it has nothing to do with where the stock market is or where the networks are at or how the local football team is doing. It is entirely up to sort of family dynamics. And so we are at their mercy. We keep close with lots of folks, and we'll continue to do so. The pipeline is kind of the same group of stations that we've talked about for a long time now. When people decide to sell, it will be up to them. So what we're -- we're always looking at stuff. And if we can -- if something makes sense on a dollar value and it's in a new state for us, that's -- we're not going to walk away. If it's in a state we're already at, we're not going to walk away because we're already in that market. We're really just looking for the quality stations. And over the long term, it will all work out and we'll have an even bigger portfolio than we have today. But we don't have -- it's not like there's 20 stations for sale and we're just picking on a, "We want CBS affiliates in the state of Oregon," just to make something up. It's really we're waiting for the right opportunity. As Jim has said many times, we plan to be opportunistic but also very patient.

Got you. And in terms of just how active the pipeline is at this point, do you feel that it's likely that you will make acquisitions this year? Or do you think it's just something that you have to assess as, like you said, whether or not these families might decide to sell?

I would expect there will still be acquisitions this year.

Your next question comes from the line of Dennis Leibowitz from Act II Partners.

When you released the fourth quarter, you made an estimate of free cash flow preliminarily for 2018 of $500 million to $525 million. I wonder if that was refined specifically. And if you combine that with 2017, you would have gotten somewhere over $4.00 a share in free cash flow per share. And aside from those numbers, I wondered if you combine '18 and '19 in your outlook, would that be more or less.

We have not yet updated that free cash estimate for '18. We will be doing so over the next couple of weeks, and we'll be updating our investor presentation, and we'll post that within a couple of weeks as well. But I think that number is still in the right zip code. We will lock it down to a final calculation, though, in the next couple of weeks. I don't disagree with your math about the '18 estimate and '17. That sounds about right to me. I think -- I didn't quite catch the piece of the question about '18 and '19?

Yes, would it be at least that high for '18 and '19? And then presumably it would be higher for '20 when you throw in political and retrans.

It could -- without having '18 locked down yet, and we haven't commented specifically on '19, it might be a little bit higher. Certainly, net retrans growth, '17 to '19, is very nice growth. I think your core '19 to '17 is probably not vastly different, maybe up a little. But it's -- really, the key would be the growth in net retrans, so that probably makes it a little bit higher. And political in '19 would be -- I would expect it to be lower than '17 because in '17 there were some off-year governor races that don't occur in '19, so it's not quite a straight apples-to-apples comparison.

And if you extend it to '19-'20, wouldn't you assume it would have to be higher because of political in '20 and growth in retrans?

Certainly, retrans will grow. We have not said, we have not given a number for '20 political, other to say that we think it will be a very strong year. So does that equal '18, which was a very strong year? Is it a little bit better than '18? Everybody can have their own opinion on that. I think '19-'20 combined free cash flow, though, will again be very significant for the company, as we talked about a little bit earlier.

And there's no further questions at this time. I will now turn the call back to Mr. Hilton Howell for closing remarks.

Thank you very much, Kelly, and I just want to thank all of you for being on the line today. We're exceptionally pleased with our quarter's results and look forward to Q2 and the rest of this year. It's going to be an exciting time. Talk to you soon.

This concludes today's conference call. You may now disconnect.