Good day, and welcome to the Nexstar Broadcasting Group's 2011 Fourth Quarter Conference Call. Today's call is being recorded. All statements and comments made by management during this conference and other 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 operation, as well as forward-looking statements, are subject to change. The forward-looking statements and comments made during the 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 statement and 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. In addition, given Nexstar's announcement of July 21, 2011, that the company's Board of Directors decided to explore and evaluate strategic alternatives intended to maximize shareholder value, including a possible sale of the company, Nexstar does not intend to disclose developments with respect to the strategic review process until such time as the Board of Directors has approved a transaction or otherwise deems disclosure appropriate. As such, management will not be making comments on this topic today. At this time, I'd like to turn the conference over to your host, Nexstar President and CEO, Perry Sook. Please go ahead, sir.

Thank you, and good morning, everyone. I'd like to thank you all for joining us to review our 2011 fourth quarter and our full-year 2011 operating results. Tom Carter, our Chief Financial Officer, is here with me this morning as well as Tim Busch and Brian Jones, our Co-Chief Operating Officers. I'm very proud to report today that Nexstar generated record odd-year fourth quarter financial results, including an 8.4% increase in 2011 fourth quarter total revenue, excluding total [ph] spending. We ended what was a strong 2011 for Nexstar with the fourth quarter core revenue growth of 6.4%. That marked the highest rate of quarterly core revenue growth during the year and our ninth consecutive quarter of year-over-year core television advertising revenue growth. Solely reflecting the impact of $20.6 million in year-over-year declines in political revenue, our Q4 '11 net revenue came in at $86.2 million, which was 11.2% behind last year's final. Nexstar's continued leadership in new business development resulted in a 4.6% increase in fourth-quarter local spot revenue and an 11.6% rise in national spot revenue. Our year-over-year core revenue growth marks a quarterly sequential improvement over the 5.3% growth in Q3 of '11, the 4.3% increase in Q2 and the 3.3% rise posted in Q1 of '11. And it is more than double the 2.9% core local and national television ad revenue growth recorded in last year's fourth quarter. In addition, the strength in core advertising activity, Nexstar's record odd-year fourth quarter revenue, EBITDA and free cash flow highlight the continued growth in every one of our non-television advertising revenue sources, with each reaching record annual levels of contribution. Our Q4 core TV ad revenue growth was complemented by a 34.9% rise in retransmission fee revenue, an 8.1% increase in e-Media revenue and a 9% improvement in…

Thanks, Perry, and good morning, everybody. I'll start with the review of Nexstar's Q4 income statement and balance sheet data, after which, I'll provide an update on our capital structure. As Perry mentioned, net revenues were down 11.2% to $86.2 million, largely reflecting the $20 million decrease in political spending from Q4 2010 to Q4 2011. Core revenue was up 6.4% to $67.3 million, with local revenue up 4.6% and national revenue up 11.6%. Retrans fees were up 34.9% to $10.3 million, reflecting the impact of some of our new contracts during the fourth quarter. e-Media revenues continue their growth trajectory at up 8.1% to $4.3 million. Broadcast cash flow was $34.9 million. Adjusted EBITDA was $29.6 million and free cash flow was $15.3 million. Nexstar's fourth quarter corporate expenses were $5.3 million or 9.3% ahead of the year ago. Of the additional $454,000 of cash corporate expenses, a large percentage was associated with our acquisition activity and the ongoing strategic review process which was announced in July. In Q4, we incurred $299,000 of non-cash option expense compared to $332,000 in the same quarter in the prior year. Station direct operating expenses, consisting primarily of news, engineering and programming, and selling and general administrative expenses net of trade expense, were $43.1 million for the 3 months ending 12/31/11 compared to $42 million in the year-ago quarter or a 2.6% increase. The increase largely reflects a full quarter of expenses for the new stations in Michigan and Wisconsin and a month of expenses in Evansville, Indiana, which increased our overall expenses, combined with expanded local news initiatives in our markets, increased variable expenses associated with our JOAs in Peoria and Rochester and e-Media-related expenses. Net of the acquisitions on the same station basis, our operating expenses were actually down 3.4%. The…

Great. Thanks, Tom. Nexstar's positive core television advertising trends are continuing in the first quarter and we expect positive year-over-year core revenue comparisons throughout 2012. The expected core revenue growth will be driven by strength in key categories, such as auto, and our commitment to producing and broadcasting high-quality local programming in our markets while airing high-profile events like the Super Bowl and the Grammys, both of which recently garnered record ratings, and we will also have the Summer Olympics on our NBC affiliates later this year. Nexstar is on track to deliver record 2012 financial results, which will benefit from the growth and overall advertiser spending, significant political revenue and increasing growth from revenue in our newest retransmission agreements, as well as further immediate contributions. Beyond the revenue and the operating momentum, our recent acquisition and programming activity has strategically strengthened our platform through the accretive de-leveraging transactions we talked about earlier, and our expanding scale is also reflected in our upbeat 2012 outlook. As we mentioned earlier, due to the volume of renewed retrans contracts and the high number of subscribers they represent, we believe that our percentage growth in retransmission revenue will be approximately double in 2012, the growth rate of 2011. This growth trajectory has been confirmed in retrans results that we have booked thus far in 2012. Additionally, our acquisitions which closed in the second half of 2012 are expected to add an incremental $20 million in revenue and approximately $10 million in EBITDA for the full year of 2012. With the anticipated significant net revenue growth throughout the year, margins should easily surpass the levels we achieved in 2010. In addition, Tom and the finance team have done a superb job of improving our capital structure, which we plan to address further in 2012, based on our expected record levels of free cash flow. We believe that we're firmly on plan to generating 9-figure level of free cash flow for the 2011, 2012 cycle. Since our IPO in 2003, Nexstar has posted an impressive 37% CAGR of free cash flow for the 2-year cycle starting with 2003, 2004 through the 2-year cycle that included 2009, 2010. And in that 2-year cycle, we generated total of $79.6 million in free cash flow. If we maintain our 37% CAGR growth rate for the 2-year cycles, we would then generate in excess of $109 million for the '11, '12 cycle, which would mean that based on our results that are in the books for 2011, that 2012 free cash flow would have to come in somewhere around $75 million. From my vantage point, I will be highly disappointed if we don't exceed those levels. So with that, let's open the phone for your Q&A and address your specific areas of interest. Operator?

[Operator Instructions] We'll take our first question from Bishop Cheen with Wells Fargo.

So just a couple of quick questions, one to kind of the tenor and tone of ad revenue. It feels like auto is driving a whole lot of January and February and whatever -- I know you're not giving specific guidance or I didn't hear that, but whatever you're seeing or feeling out there, how much of it is auto and how much of it is kind of a more diversified strength in the ad environment?

Well, I would say, generally, what we see in first quarter results with 2 months in the books at this point, Bishop, is kind of a continuation of what we saw throughout 2011 and particularly in the fourth quarter. Auto is our largest category. It is still up and continues to grow. We're not back to where we were at 25% of revenue. But we're north of 21% of our revenue now. So if your largest category, that's 20%, is up 10%, that's 2 points of growth. And we're reporting, for the quarter, something on the order of 6.4% of core ad revenue. So it is a driver but I would tell you that when we look at our top 5 categories, our top 10 categories, dramatically, again, it's 4 out of 5 or 7 out of 10 that are showing growth and continuing to grow. So I would say, thematically, first quarter looks and feels a lot like fourth quarter in terms of core ad spend.

Okay, that is helpful. And Tom, this is also just kind of a general big picture. Nexstar, historically, has a nice high data of leverage in and out of the -- that political cycle and you tend to always use it to take down debt and come back with stronger, better improved leverage every 2 years. So as you enter this political and strong growth cycle for all your non-traditional revenue and the $75 million, hopefully, plus of free cash flow applied to debt reduction, where do you think you can take your leverage target down to at the end of this year?

Somewhere 4 or south.

4 times or south, which gives you a lot of cushion heading into 2013. And then the last part to the grand inquisition, at what point do you start thinking about perhaps returning value to shareholders via buybacks or dividends?

Well, Bishop, that's kind of above my pay grade, what the board wants to do. But I will say, clearly, my job is to give the company as much financial flexibility as possible. We are going to have a substantial amount of free cash flow this year. We do have some bonds that mature in early 2014 that are on our radar screen. But with the strong free cash flow, I think it gives us a number of opportunities as it relates to that. And then strategically, what the company does is just part of our -- and the board's, quite honestly, overall strategic review that is ongoing.

We'll take our next question from John Kornreich with JK Media.

Just one quickie -- a couple of quickies. What was the local growth -- the local and international core revenue growth in the fourth quarter excluding acquisitions, apples to apples?

Well, John, the information that we have given is excluding acquisitions and the 3 affiliation switches. So kind of a steady-state, apples-to-apples and core growth in the fourth quarter on, we call it the unaffected stations, was up 3.4%. So I think, if someone asks me, what -- how does the market look? That's kind of an apples to apples.

Okay. More importantly, I think you mentioned in the press release that this huge jump in retrans is largely due to 2 very big ones that were signed in the second half of 2011. When do the other 3 of the top 5 get renewed?

Those are basically 2013 events. One of them is 2014 but that will be the next big jump. I mean, obviously, with 130-plus agreements renewed and escalators and all of the other ones, that's accumulative effect. But again, 2 of the top 5 are driving a lot of that top line growth.

When you say 2013 is the next round of renewals, that would show up in 2014 or actually show up in -- or somewhat show up in part of 2013? And is it a December 2013 or is it during the year?

It is primarily a year-end event. But if you're talking about the other 3 of the top 5, the vast majority of that impact would be felt in 2014.

Okay. So I blanched when you first said that the growth rate for retrans will be double the 25%. I thought I heard it wrong and then you said it again. So I'll ask you to say it one last time, you're talking about mid-50s retrans.

We're talking about a number that is 50% growth, yes.

We'll take our next question from Edward Atorino with Benchmark.

Well, I had a question on the categories, too, which you sort of answered. How did you do in the primaries? Were anything of noteworthy committed primaries in your markets in terms of ad dollars?

Not specifically. And it's because, Ed, the Texas primary that [indiscernible] coming in the first quarter came, it's now a late May event. So that spending will all be in the second quarter at this point. We got money on the books yesterday for the Illinois primary, which comes up a couple of weeks down the road. The spending in Wisconsin for everything that's going on there continues to surpass our expectations. So pretty much as advertised, with the exception of money we had internally projected for Texas is now moving from first quarter to second quarter.

Out of these 7 categories that are up beside auto, what would be the next 2 biggest growth carriers?

You're talking about top 10 product categories?

Yes, what you mentioned. You mentioned food, was it? And...

Well, fast food was down and that was due to the -- just the volatility of the money kind of moving between network and spot and scatter. And that always happens in fast food. But in terms of percentage growers for the year, department and retail stores was up a mid-teens amount for us for the full year. That's just outside of the top 5. We saw growth in medical and healthcare. And the service area is the only other category that, out of the top 10 categories, that is down significantly was telecom and that was driven primarily by the mergers or lack thereof in that category.

[Operator Instructions] We'll take our next question from Barry Lucas with Gabelli & Company. Barry L. Lucas - Gabelli & Company, Inc.: A couple of items, you touched on revenue growth and the good job you did in expenses on the core basis in '11. Tom, where you think expense growth is going to be in '12?

Barry, obviously, you've got the variable component will be up not insignificantly because revenues will be up both on e-Media as well as the core business and political. So you've got the sales expenses associated with that. Then you got fixed expenses will be up a low single-digit percentage largely due to general cost containment and the fact that I think we've got those well under control. So on a blended basis, I would imagine it would be up mid-single digits. Barry L. Lucas - Gabelli & Company, Inc.: Okay, helpful. The next area and just really for Perry, with auto tracking back to its historic levels in terms of percentage of the total revenue pie, and you've done a good job diversifying a way. But we saw what happened the last time when auto cratered in '09. So what other efforts do you have on the way that can reduce your reliance on auto?

Well, I think that from our perspective, I look at the whole company and better than 40% of our EBITDA comes from non-television ad spend. So we're 60% EBITDA driven by television ad spend. Automotive, if it's 20% or 25%, so that means you're 12 to 14 points or so of total ad spend that comes from the automotive category. We have lessened our reliance but we continue to focus on new business development and e-Media growth. I think I mentioned on our previous call that we also, part of our acquisition strategy for acquiring GoLocal.biz was to potentially try and syndicate that product to markets that we are not in or do not serve. So we're continuing to try and take our platform and derive as many ancillary revenue sources, in addition to our continuing new business development efforts at the grassroots level to just bring new advertisers into the medium and continue to keep those availabilities filled with new advertisers. So it's kind of part of a global discipline of diversification and revenue growth and not become reliant on any one category as we had in the past. Barry L. Lucas - Gabelli & Company, Inc.: Great. Two more quickies, if I may, Perry. And first one, net debt was up sequentially from September 30 to 12/31 by about $18 million or the cost of the station at Evansville. But you also generated $15 million of free cash in the quarter. So where was the delta? What am I missing in the debt balance that drove that number up a bit?

Well, it all really has to do with the timing of some of the actual receipt of those payments. For example, the Four Points incentive fee in the fourth quarter was paid when the deal closed on January 3. So I mean, it really is just more of a timing. I will tell you our revolver balance today is substantially below the $24.3 million level. So when you collect those funds, that obviously affects the balance sheet. Barry L. Lucas - Gabelli & Company, Inc.: Sure, that's very helpful. Tom, I appreciate that. And I'm going to toss this one out there despite the early announcement by the moderator. We're now 8 months, 7 months into this strategic review process. Maybe you could just -- without commenting on what's going on -- it feels open ended, Perry. And so when might we expect some closure?

I appreciate that. I got burned on some timetable projections that I made in conferences last year so I don't want to do that. But I will tell you that the board is, of which I'm a member, is determined that when the process concludes, we will make an announcement that the process has concluded either by making an announcement of activity or no activity. So please, just infer from that, that discussions are still on going on various array of fronts and things move slower than we would all like potentially but pencils are not down on this, there are still discussions of various alternatives and continuing to weigh what is in the long-term best interest of shareholders. So the board is being very deliberate about this. There is no sense of urgency per se but there is a sense that this can't go on. And I will be highly doubtful that we will pass the anniversary date of the announcement, that we are in this process without an announcement about this process.

[Operator Instructions] And we'll take our next question from Alex Sharnelli [ph] with SM Investors.

I was looking at the cash interest expenses that are provided for the year 2010, that are provided in the press release, just think at around $41.3 million. And then when I look at the 10-K, so for 2010 at the cash flow statement and I go down to the supplemental information, the interest paid number there is $46.9 million. May I ask you what is the difference between those 2 numbers?

I would have to get back to you. I don't know right off the top of my hand what the difference between the press release and the K is. It could be a number of things including amortization, et cetera. I'll have to check.

And we have no further questions in the queue at this time. I'd like to turn the call back over to our speakers for any closing remarks.

All right. Well, thank you very much. I hope you all found this morning's call informative and helpful. And I'd, again, like to thank you all for joining us.

That concludes today's conference. Thank you for your participation.