Good day, and welcome to the Nexstar Broadcasting Group's 2011 First Quarter Conference Call. Today's call is being recorded. All statements and comments made by management during this conference, other than statements of historical fact, may be deemed forward looking statements within the meaning of Section 21 of the Securities Act of 1933 and Section 21A of the Securities and Exchange Act of 1934. The company's future financial conditions and results of operations, as well as forward-looking statements, are subject to change. The forward-looking statements and comments made during this conference call are made only as of the date of today's conference call. Management will also be discussing non-GAAP information during this call. In compliance with Regulation G, reconciliations of this non-GAAP information to GAAP measurements are included in today's news announcement. The company does not undertake any obligation to update forward-looking statements reflective of changes and circumstances. At this time, I'd like to turn the conference over to your host, Nexstar President and CEO, Perry Sook. Please go ahead.

Thanks, Nikki, and good morning, everyone. Thank you all for joining us this morning to review the Nexstar first quarter 2011 operating results and our recent developments. Our Chief Financial Officer, Tom Carter, is also with me here this morning. Nexstar's strong operating and financial momentum continues into the first quarter of 2011, as reflected by our all-time record first quarter revenues and our record odd year EBITDA and free cash flow. With most companies in our sector now having reported, I think it's fair to say that Nexstar's revenue growth in the first quarter was among the best in the industry. At the same time, we continue to make excellent progress in streamlining our capital structure, reducing our leverage and lowering our weighted average cost of debt. During Q1, our focus on building new-to-television local direct billings, combined with the ongoing advertising recovery, drove Nexstar's 6 consecutive quarter core television revenue growth, core revenue being comprised of just local and national advertising. By again coupling our core revenue growth with further execution of our strategies to diversify our revenue sources, we handled the offset, the 82% year-over-year decline in political advertising, as well as the benefit of approximately $4.5 million in last year's first quarter from advertising related to the Winter Olympics. Notably, excluding the impact of political revenue from both periods, Nexstar's first quarter 2011 revenue rose approximately 5.2% compared with the first quarter of 2010. And while we expected political revenue to drop from the 2010 levels, our 2011 Q1 gross political revenue exceeded the levels in Q1 of 2009 by about 30%. Nexstar's 2011 first quarter net revenue increase of 1.9% was driven by growth in both core local and national revenue, including another double-digit gain in automotive advertising, as well as ongoing robust e-MEDIA and…

Thanks, Perry, and good morning, everyone, I'll start with a review of Nexstar's Q1 income statement and balance sheet data, then spend a minute updating you on our debt reduction progress and our capital structure. Just to reiterate a couple of the key top line items for Nexstar's Q1 of '11, net revenue was up 1.9% to $69.9 million, driven by a core revenue increase of 3.3%, $58.3 million in total. Core was driven by local revenue of $43.3 million, up 3.7%. And national revenue also up 2.1% to $15 million. Political revenue, as common in the odd year, was down to $600,000 from $3.2 million in 2010. The only meaningful revenue category that was down for the year -- or for the quarter, over the previous year's quarter. Retransmission fee revenue was up 15.6% to $8.5 million. e-MEDIA revenues were up a robust 23.8% to $3.7 million. Broadcast cash flow's stood at $24.8 million, adjusted EBITDA at $20 million and free cash flow at $3.6 million. Nexstar's first quarter 2011 and 2010 corporate expenses were consistent at $4.8 million, with both quarters including $285,000 of noncash option expense. Station direct operating expenses, consisting primarily of news, engineering and programming, and selling and SG&A expenses net of trade, were $37.8 million for the 3 months ending March 31, 2011, compared to $35.9 million for the same period in 2010, an increase of $1.9 million or 5.4%. Included in the additional expenses were identifiable costs for additions to receivables, reserve and the legal and professional fees largely related to our senior secured credit facility amendment and our agreement to acquire 2 CBS television stations. The remainder of the increase was attributable to variable costs related to higher revenue levels, some property tax increases experienced during the year, and costs related to…

Thanks very much, Tom. Nexstar is consistently demonstrating that the growing diversification in our operations and in our business model and delivering great local programming and content to viewers both online and through mobile devices, while also operating a growing range of traditional and new media marketing solutions to our advertisers, collectively is the appropriate strategy to continue to strengthen our platform and to succeed in our markets both now and in the future. We are leveraging localism and building digital extensions for our core content that heightened consumer engagement, and we are actively pursuing a range of similar opportunities that will further elevate our value to consumers, advertisers and shareholders alike. With strength in our core television advertising trends continuing year-to-date in 2011, expectations are that we will continue to grow all of our nonpolitical revenue sources throughout the year and that coupled with our continued deleveraging activity and our recent agreement to acquire the 2 CBS affiliates, we see 2011 shaping up very strongly for Nexstar while positioning us as well for a terrific 2012, which is both an election year and a year that will result in record levels of free cash flow. Q2 of 2011 marks Nexstar's 15th anniversary, and our success over this period has been defined by our deep industry experience and our confidence in the future of television as the foundation of a broad reaching multimedia platform. Television is an evolving medium with an incredibly vast, diverse and loyal group of local viewers, and the Nexstar management and operating teams are strong advocates of the changes occurring in our industry today, which we believe will enhance broadcasters' long-term potential. Technology has always been a driver of new revenue opportunities for broadcasters, and here at Nexstar, we are quickly developing strategies to benefit from…

[Operator Instructions] Our first question comes from Bishop Cheen from Wells Fargo.

So let me just ask one or two housekeeping questions and move it along quickly. So revolver [ph] capacity when all the parts stop moving, and you have your new facility, your expanded Term B. How much of a capacity?

It's $75 million all unfunded and all available under the debt covenants.

Right. Okay. And then correct me if I'm wrong, but from an investment standpoint, other than perhaps a CUSIP [ph] There's really no meaningful difference now between the former PIKs and the cash pay 7's they're both cash pay 7's?

Correct.

Okay. With the same maturity date?

Correct.

Okay. Those are the 2 housekeeping. So look, you guys have done what you said you would do with the balance sheet, you're going to enter 2012, it would appear in pretty good shape. Let's talk M&A. Are you gaining momentum as better buyers out there? And if so, is there stuff out there to satisfy your appetite?

Well, we are obviously very selective, Bishop, in what we would look to do and acquire. And we have our unfunded revolver capacity for tuck-in, tuck-under acquisitions. The stations in Green Bay and Marquette, as you know, it was kind of a clean-up trade for Liberty Media. It was -- they were kind of a 1.5 station group, if you will, so it fits in perfectly with our strategy of bringing them under our group umbrella, applying best practices, overlaying our retransmission contracts and for all of those reasons, it's an immediately accretive acquisition to the company. It's a very high bar for us in that all acquisitions must be immediately accretive on a free-cash-flow-per-share basis, Green Bay and Marquette fit that. If you look at interest expense and CapEx, about $1 million a year and BCF that will be somewhere between $5 million and $5.5 million per year, depending on odd or even year, and the impact of political. So immediately accretive on a free-cash-flow-per-share basis and leverage neutral to deleveraging. So I would not say that the landscape is littered with opportunities like that, but there may be selectively, one-off or 2-off opportunity that we would evaluate. And again, everything has got to beat our steady-state, pay down debt with free cash flow opportunity, which we think is pretty compelling for debt holders and equity holders alike in terms of the appreciation that can happen just from doing that with our proceeds.

It all make sense. Meanwhile, TV awaits that defining M&A transaction, like radio has enjoyed this year. We still keep waiting.

Yes, we do.

And I'm showing our next question comes from John Evans from Edmonds White.

Can you just help you understand, so you've called the '13, is that correct? And do you have the new loan agreement already taken care of? Is that correct?

We have. It's the 11.375% notes that are due at 2013 maturity. $33.2 million outstanding. And we have commitments from a group of lenders to fund $50 million next week to fund that redemption, as well as the interest payments and additional liquidity for the company.

Got it. So you'll basically call those win, and then can you help us understand what the new $50 million goes to, LIBOR plus? I'm just try to figure out how much you're going to pick up, does that make sense?

Right. No, absolutely. Well,, we're going to -- it should happen early next week. We actually made the redemption notice on like the 14th or 15th of April, you will have to forgive my exact -- we have 30 days notice, that 30 days is up next Monday. And so all of these should transpire early next week and that additional $50 million is on the same terms as the existing approximate $100 million of Term Loan B, which is LIBOR plus 400 at a 1% LIBOR floor. So if you look at that just apples-to-apples, you're taking out $33 million of 11.375% debt and you're refunding that with 5% debt, so you're picking up 638 basis points on $33 million of debt, which is slightly in excess of $2 million annualized.

And I'm showing our next question comes from Barry Lucas from Gabelli & Company. Barry Lucas - Gabelli & Company, Inc.: Just to stay on the balance sheet for a moment. Perry, by the math that you've described including the acquisition and sort of kicking around a free cash flow number that I've got in my model, it looks like leverage goes to about a little bit under $6.5 million by '11 year-end, and then drops off the cliff in '12. Does that sound fairly reasonable?

We think it will be at sub-$6.5 million, I think how far sub is open for various interpretations of what your model says. And then, you're exactly right, it's substantial leverage reduction, not only through EBITDA increases, but through debt, absolute debt reductions in 2012. Barry Lucas - Gabelli & Company, Inc.: Okay. And to come back to the topic de jour which nobody's asked yet this morning. Auto was up 10 or so in the first quarter. What do you see and what do you hear in halfway through the second quarter, supply disruptions, et cetera? Can you match that pace or better it or does it go down, cancellations? You tell me.

Sure, Barry. Thanks and congratulations. I think I read your name in the paper yesterday. So the Q2 cancels on auto are less than $250,000 to date and that's on an almost $70 million revenue base. So not a meaningful number. Over half of those cancellations have been related to Toyota and Lexus. Thanks to our co-COO Tim Busch, who've forwarded on an article on automotive news this morning, Toyota said this morning that they expect domestic and overseas production to begin recovering in June compared with an earlier forecast of July to August and they expect to be at 70% of normal levels for their June output. As to how the quarter will end up, we still feel that automotive will finish in positive territory. The only facts that I have in front of me are where we finished in the month of April, and we've finished up a mid-single-digit in the automotive category, even taking effect for the Ford cancellations. And much like first quarter, that was driven by a double-digit 25% increase in local dealer ad spend, which our local sales teams have worked very hard to cement and maintain and grow those relationships. So auto ad or ad category for us in April was plus a mid-single digit, driven by local dealers. The pace for May and June is similar to those results, and we'll see where the quarter ends up. We have seen increased spending from domestics, not probably a surprise to anyone. And obviously, some of the European and German nameplates have increased their spending as well. But again, we're looking for growth in the automotive category in Q2 and have exhibited growth in the month of April, which is the only month in the book so far. Barry Lucas - Gabelli & Company, Inc.: A couple more quickies and I'm going to put my rose-colored glasses on here. With, as you point out, Toyota's production picking up maybe a little bit sooner than expected and the fact that they've dropped market share in the last year. And I think about the buzz that's coming out of the upfront, which gather up fairly dramatically. Can you see or sense that national spot could really ratchet up in the back half of the year?

Well, I think the way to answer that is our peak year for national spot, which excludes political, was back in 2007 and we're still 15% below that high watermark. So without testing any new highs, we've got substantial double-digit growth capability in front of us. Our thesis for the year was core revenue growth, both local and national, in the mid-single-digits, and that was evidenced in the first quarter. We think that continues in the second quarter. And yes, I still think that automotive ad spend is about 20% of our core ad revenues. At its high watermark, it was 26%. I don't know that it'll get back to those levels because I think that was driven by extra capacity and unit production that was not sustainable. But I think everyone seems to agree and I recently had lunch with the new president of the National Automobile Dealers Association out in Utah, and he said, everyone seems to feel that a steady state is probably $15 million to $15.5 million SAR on new car sales. And that right now, the build rate is less than the scrappage rate. So could there be a potential bubble year kind of a catch-up year coming? That's possible. But even if you just look at kind of a steady-state growth over a couple of years to get back to that level, that would indicate that there is double-digit potential in the auto ad category. And again, what I'm very pleased with is our sales teams and our local station management has worked very hard to develop programs and promotions and partnerships with local dealers. And our local dealer ad spend was up 31% in the first quarter and 25% in April. And that's at the Main Street level. And so we can't really control the factory ad spend and what happens at the network in scatter but we can help move Ford pick-up trucks in Wichita Falls, Texas, which we're very focused on doing. Barry Lucas - Gabelli & Company, Inc.: Last area, is a sort of your state of the nation either on spectrum, any new thoughts there or affiliate group owner relationships such as those with FOX? I just like to get the state of the union, if you will.

Sure. One man's opinion, I think that as we look at the -- I'll take your second topic first, the interrelationships of conversations with the networks. I don't think it should be newsworthy or news that networks are asking the affiliates for more money than we have paid them previously. We pay them now, it's just now they're asking for more money so obviously, we treat that as any vendor relationship and negotiate the best deal possible for us to with which parties will agree. Of the big 4 networks, we have transacted with 2 and we're in meaningful discussions with the third. Our conversations with FOX have not progressed, but that's no change from second quarter of last year. I think that at the end of the day, both parties need each other, I think it is a symbiotic relationship. We sell time in the programs that they provide us. They provide us with programming, we provide them with eyeballs and a superior distribution to cable and I think the ratings continue to validate that day-in and day-out. And they sell the bulk of that inventory to our eyeballs, which that message goes home with the very local levels. So I tend to think and maintain that these negotiations should be done privately and will ultimately be worked out to an agreement that both parties can agree to. So no change there, I mean, we -- obviously, we have discussions with our network partners, literally, on a weekly basis on any number of topics and compensation is only one of them. So it's an ongoing business relationship that I expect will continue to be ongoing. And then just on spectrum, to answer the first part of your question, we see no, nothing imminent, nothing -- don't think that the voluntary plan has much legs than -- I think the NAB is doing a good job of making sure that voluntary is just that voluntary and not the military definition of voluntary. So we expect that those conversations will continue, and quite frankly, expect there'll be no imminent activity as it relates to spectrum anytime soon.

[Operator Instructions] And I'm showing our next question comes from Jonathan Levine from Jefferies.

Yes. I was just wondering if you guys could talk a little bit about what are the pacings were during the first quarter on a monthly basis? And then what you're seeing thus far for the second quarter? Thanks.

Well, in the first quarter, there was really no discernible change versus the prior year. I think that January was -- we get off to a good start. I think our total spot revenue was up in the mid-single digits and that's basically where we ended for the quarter so there was really no significant difference for month-to-month, local and national core. Our e-MEDIA revenue accelerated during the quarter and has obviously continue to do that here in the third quarter. We finished April 30% ahead on our e-MEDIA revenues. But no, we see the same single-digit increase in core revenue kind of month-to-month throughout the second quarter. So there's really no trajectory. Our pace actually is stronger in May than we finished April and stronger than June than it is in May. But there's so many things that go into that, timing of orders and things of that sort, that I wouldn't read too much into that. I mean, I can make a statement that our pace is accelerating but I'm still sticking with our mid-single-digit projection for the finish of those months.

Okay. And then I guess your sense for local versus national as we go into Q2?

Similar thematic to first quarter. Again, where local slightly outpaced national on growth over the prior year. I would expect that would be the case in the second quarter, although we have a substantial double-digit pace on our June national over the prior year again, but it's too early to really make a call on that.

I'm showing no further questions at this time.

All right. Well, thank you very much, everyone, for joining us. And we look forward to joining you early in third quarter to report on our second quarter results, which are shaping up according to plan and quite nicely for all of us. So thank you for joining us, and we'll talk again soon.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the conference, and you may now disconnect. Everyone, have a wonderful day.