Good day, everyone, and welcome to the Nexstar Media Group 2017 Third Quarter Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the call over to Mr. Joseph Jaffoni, Nexstar Investor Relations. Please go ahead. Joseph N. Jaffoni - Jaffoni & Collins LP: Thanks, Cathy. Good morning, everyone, and thank you for joining Nexstar Media Group's 2017 third quarter conference call. We'll get to management's presentation and comments momentarily, as well as your questions and answers but first I'll review the Safe Harbor disclosure. All statements and comments made by management during this conference call other than statements of historical fact may be deemed forward-looking statements. These forward-looking statements are based on our current expectations and projections about future events. Forward-looking statements include information preceded by, followed by or that include the words guidance, believes, expects, anticipates, could or similar expressions For those statements, Nexstar claims protection of the Safe Harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The forward-looking statements contained in this communication concerning among other things, future financial performance, including changes in net revenue, cash flow and operating expenses involve risks and uncertainties and are subject to change based on various important factors, including the impact of changes in national and regional economies, the ability to service and refinance our outstanding debt, successful integration of acquired television stations and digital businesses, including achievement of synergies and cost reduction, pricing fluctuations in local and national advertising, future regulatory actions and conditions in the television stations' operating areas, competition from others in the broadcast television markets, volatility and programming costs, the effects of governmental regulations on broadcasting, industry consolidation, technological developments and major world news events. Nexstar undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. In light of these risks and uncertainties and assumptions, the forward-looking events discussed in this communication might not occur. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this release. For more details on the factors that could affect these expectations, please see Nexstar's other filings with the SEC. With that, it's my pleasure to turn the conference call over to your host, Nexstar Chairman, President and CEO, Perry Sook. Perry?

Thank you, Joe, and good morning, everyone. I'd like to thank you all for joining us today to discuss Nexstar's record third quarter results. This morning, we will discuss our continued operating and financial growth, as well as our Media General integration process, our return of capital and leverage reduction activities, and our outlook for the 2018 political opportunity, which, for Nexstar, is beginning to be reflected in our current results. Tom Carter, as always, our Chief Financial Officer, is here with me this morning. Nexstar, again, generated record quarterly results and exceeded consensus expectations as our expanded scale and the ongoing diversification of our revenue streams, combined with operating and cost management disciplines, offset the cyclical $17 million year-over-year decline in political advertising and in excess of $30 million of non-recurring revenue on our NBC stations related to the 2016 Summer Olympics. Notwithstanding the expected year-to-year decline in political, the demand for political advertising during the third quarter exceeded our expectations and we allocated spot inventory in certain markets to meet the rising demand related to special elections in Utah and Alabama as well as early stage PAC spend. Reflecting the benefits of scale and the strong operating leverage in our business model, Nexstar's third quarter net revenue rose 122%, driving 92.4% growth in third quarter BCF, a 96.1% increase in adjusted EBITDA and 105.9% rise in free cash flow. And we brought about $0.20 of every net revenue dollar to the free cash flow line, a metric that will grow in 2018 with the return of robust levels of political advertising. Our record third quarter results mark continued success in the integration of the Media General broadcasting and digital media properties into our platform, while extracting anticipated revenue and cost synergies and acting on the range of growth…

Thanks, Perry, and good morning, everybody. I'll start with a review of Nexstar's Q3 income statement and balance sheet data, after which I'll provide an update on our capital structure and some points of guidance. As noted in this morning's release, actual Q3 results presented reflect the impact of previously disclosed one-time Media General-related transaction expenses of $2.8 million and $56.8 million incurred in the three and the nine months ended September 30, 2017. The actual results for the three months ended September 30, 2017, reflect the company's legacy Nexstar broadcasting and digital operations net of the six Nexstar station divestitures, and the second full quarter of results from the Media General stations, net of the seven Media General station divestitures, and its digital assets. Though, as Perry alluded to, we've discontinued or merged certain Media General digital assets consistent with our plan to cull any of the previously unprofitable operations from our platform. The comparable three-month period ended September 30, 2016, reflects the company's legacy Nexstar broadcasting and digital operations inclusive of the six Nexstar stations which were divested simultaneously with the closing of the Media General transaction. Now turning to the Q3 income statement, net revenue was $611.9 million, up 122% over the previous year's period. Core revenue was $113.6 million, up 138.7%. Local revenue was also up approximately 136% to $224 million, with national revenue increasing 145%, up to $89.6 million. As Perry mentioned, the off-cycle political revenue was $8.4 million for the quarter. Retransmission fees were consistent with the previous quarter at approximately $257.5 million, which again is 162% of the prior year and digital revenues were $56.2 million, up 36%. Broadcast cash flow was a record $211.5 million, EBITDA before adjusted one-time expenses was $194.4 million, adjusted EBITDA after these expenses was $191.6 million and…

Thanks very much, Tom. With the hard work of our more than 9,200 employees, we've achieved a near perfect integration of the Media General assets. And Nexstar's record third quarter results exhibited the accretion that we discussed leading up to the acquisition closing last January. At the same time, operational execution across our expanding platform and our scale have driven year-to-date free cash flow from operations of $370.4 million or approximately $8.12 per share through the first three quarters. Our leverage reduction program has proceeded on plan year-to-date with approximately $400 million in debt already eliminated this year and we remain on target for our 2017 and 2018 leverage targets. Additionally, as mentioned, year-to-date, we bought in a total of 1.7 million shares, repurchased for a little less than $100 million, all funded from cash from operations. As I said earlier, reflecting the recent share repurchases, our 2017/2018 free cash flow guide is now approximately $1.15 billion over two years. With the full year benefit in 2018 of the new affiliation and retrans renewals, our proven ability of the captured large shares of political advertising in our markets, the rightsizing and growth prospects of our digital assets and the pick-up in core, we're looking at an enormous year of free cash flow generation in 2018. Longer-term, we're highly encouraged by the news regarding the FCC's proposed rulemaking to modernize the local media ownership rules to reflect the realities of the evolving media marketplace, as well as the FCC's proposal to continue advancing the new ATSC 3.0 standards for innovative next-gen TV services. The FCC's proposed rulemaking takes an important step forward in rewriting the outdated local media ownership rules and modernizing regulations to allow the local broadcast industry to compete on equal footing in this space. With the FCC's support for 21st Century ownership rules and the voluntary adoption of the new ATSC 3.0 standards for innovative next-gen TV, local broadcasters will be able to bring consumers more localized programming content, mobile TV, advanced emergency alert systems and a host of other valuable, informative and in some cases critical services. At the same time, our consortium with Sinclair, Univision and others to be announced soon is in the process of identifying opportunities to generate new spectrum-related revenue, which will all be made possible by the next-gen ATSC 3.0 broadcast standard. Today's results, our excellent and differentiated record in the industry in terms of execution consistency and capital allocation, our financial prospects for 2018 and our ability to capitalize on the political cycle, as well as the expectation of significant opportunities created by the pending industry deregulation makes me as optimistic as ever about Nexstar's near and long-term prospects for growth and the enhancement of shareholder value. So, on behalf of the entire Nexstar team, thank you for joining us this morning. Thank you for your continued interest in the company. And let's open the call to Q&A to address your specific areas of interest. Operator?

Yes, thank you. And we'll take our first question from Aaron Watts with Deutsche Bank. Caller, your line is open.

Hello?

Hey, Aaron.

Hey, sorry about that. Tom, I want to make sure I understand what you were saying about core advertising on a pro forma basis in the quarter. I know you started with minus 4.3%. Can you do that walk again to the plus 5.7% or plus 2%?

Sure. We had $31 million in same station Olympic revenue in 2016. If you assume no displacement and add that 31% back, the negative 4.3% becomes positive 5.7%.

Got it.

And then you can go, whatever your flavor of displacement, and we picked 35% because if you assume 35% of that was non-returning, then the negative 4.3% becomes plus 2% rather than plus 5.7%.

Okay. Got it. And so as I think about that and recognizing that the fourth quarter is going to be noisy again with political, how does the environment feel on kind of same station core basis in the fourth quarter? And any visibility you can give us into the environment heading into 2018, recognizing there's still some policy uncertainties out in Washington?

Perry will answer Q4, but just as it relates to Q3, if you look at the way the quarter broke down, obviously July and September were both at or above prior years. And August, because of the Olympics was below prior year. So really, we view that July, there was very little noise and that was up low to mid-single digits on a same-station basis. And I will also say that all of the networks ex-NBC were up during the quarter. So it really kind of does all focus around Olympics in August of Q3 for this year or for this last quarter. I'll pass the baton to Perry, and he can give you some color on Q4.

Yeah, Aaron. I mean, October was by far our best month of the year. Our core revenue finished double digits ahead of the prior year, which we quite frankly expected and forecast given the displacement from political, given that October of 2016 was the biggest political month of the year. I would say that the quarter itself is pacing for mid single-digit growth in core. And if I look at the categories, autos are up, attorneys are up, cable, medical health care, insurance, services, which is basically home security, employment, governmental are all up. And then outside of our top 10, so that's half of the top 10 are pacing ahead of the prior year and not by an insignificant margin. But then, if I look at other categories that are up, home, repair, lottery, entertainment, real estate are all pacing double digits ahead of the prior year as well. So I think that's the momentum that we had anticipated. And again, quite frankly, the comps that we had anticipated with a heavy dollop of political in Q4 of 2016. And it's obviously very, very early to tell about the 2018 core revenue, but again what we tend to see is momentum in the fourth quarter of an odd year carrying over into the first quarter of an even numbered year. And so I'm optimistic that this momentum will continue.

And when you sit back and try and filter out some of the noise from prior years, whether it be political or Olympics, I think we've been pretty consistent that sequentially throughout the year, every quarter has gotten better. And again some of that is due to factoring in Olympics and factoring in political, but I would say that trend line has been – from our perspective continues through Q4 of 2017, feeling better and producing results better than Q3 of 2017, which obviously was better than the prior quarters earlier in the year.

There is also a performance element to this. Our audited markets, which were approximately two-thirds of our 100 markets in which we do business on core television ad revenue have shown approximately a 1 share point of core revenue growth on a year-to-date basis. So our local managers and our local sales teams are having an impact too.

Helpful color, guys. Thank you.

And we'll take our next question from Barton Crockett with the B. Riley FBR. Barton Crockett - FBR Capital Markets & Co.: Okay. Thank you for taking the question. And I was interested in a discussion around the retrans – excuse me, the affiliation negotiations that are – you guys are, I guessed, in the midst of a cycle, where I think we have maybe a CBS and NBC that were last renewed in 2014, 2015 and that one might think would be coming up at some point in the not-too-distant future, you've recently done Fox renewal. And I was just wondering if you could talk about your belief on your ability to hang on to net retrans revenues as you go through these negotiations. And also talk a little bit about what your leverage is? So if you need to choose to leave, I think there's an investor belief that there's no net retrans, that all the value is really in the broadcast network, but I think you've seen that there is value from your local news presence and that is not so black and white and I was wondering if you could talk a little bit about that?

Sure. The only affiliation agreements that expire between now and the end of 2018 are a handful of NBC affiliates that were the legacy Media General NBC affiliates and we're in conversation with NBC on that now. And so those are the only affiliate agreements that expire between now and the end of 2018. We have some CBS at the end of 2018 but the very end. So the conversations are productive, we've done business with NBC before and I believe that consistent with our view, we'll continue to maintain a net retrans margin that is acceptable to us. And I don't really want to talk about the mutually assured destruction scenario of the parties divorcing one another, that's just not a topic of conversation in any of our agreements. We're the second largest NBC affiliate group, the largest CBS, we will soon be the second largest Fox affiliate group, when Tribune and Sinclair merge and we're number three for ABC. So we're material partners here, but suffice it to say that our retrans agreements have been engineered in such a way that there is a rate for a news producing non-network affiliate and again that retrans revenue is at 100% margin to the company. That exists in our agreements, but again our goal is to renew our affiliation agreements with our network partners on terms that we can both live with and both be acceptable as partners into the future. Barton Crockett - FBR Capital Markets & Co.: Okay. That's very helpful. And if I could follow-up with one other question about the ad environment. There's been a lot of focus on national advertisers expressing some concerns about the NFL, Papa John's and others. I was wondering if you're seeing anything like that at the local level and just how you feel about kind of the sports advertising environment generally.

Well, as I think, I've mentioned on other calls, in an entire NFL game, if you count the number of commercials the local affiliate gets from kickoff to the final whistle, we have nine spots to sell. So for us, it is truly a supply demand issue. I guarantee you that all of the CBS affiliates carrying the Cowboys game were sold out yesterday. So it's not been an issue for us because of the tremendously limited inventory we have to sell in game. Barton Crockett - FBR Capital Markets & Co.: Okay. Great. Thank you.

We'll take our next question from Dan Kurnos with Benchmark Company.

Great, thanks. Just a couple for me. Perry, if we could just touch on the CBS OTT agreement, I don't know if you're willing to disclose the length, most of them have been running through 19. But could you just talk about maybe what you're seeing in terms of OTT penetration in your markets? I'm assuming you guys aren't getting much of the MVPD money yet. But just whether or not that's filtering down into the smaller markets? And I'll ask a question on political. Thanks.

Well, I'm happy to report that in the third quarter, we received our first report of OTT subs from one of the OTT providers. So we do have subs, the payment will probably lag. I think the terms of the contract is 60 or 90 days. So they are pay-on subs. So we are now starting to see from some of the OTT providers a modicum of paid subs that will flow into our retrans revenue situation over time. The negotiations with CBS were as much as they were with ABC and with Fox, there's a lot besides rate that we want to talk about in terms of inventory and preservation of rights and real estate and so. And then, once you negotiate an agreement with the network for the terms of the participation with the network, you then turn around and have to negotiate individual opt-in agreements with each of the seven different OTT providers, depending on which ones the networks are in business with. So we have a matrix, it's got a lot of squares on it and we are working to continue to fill in those squares and we are of a mind that we will have agreements with all of the networks by year-end and all of the participating OTT services by year-end and we'll see what it ultimately amounts to. But we did get our first subscriber statement in the third quarter, so we're pleased with that.

Congratulations. Let me just get – can I just follow-up with you on that, Perry? Are there – can you just talk about the escalators built into those OTT contracts and just how – and sort of the sub declines that are factored into those negotiations, could you give us any color there?

Well, we get paid on a subscriber, so whether we negotiate with the MVPD, the MVPD pays us and then we negotiate some form of payment back to the network or in the case of the new entrants, the network negotiates with the OTT provider, we negotiate with the network to – for an equitable split and then we opt-in. We are anywhere between benign to slightly better off, if the provider comes in through the OTT door or the subscriber, rather than the MVPD door. So escalators, if I just – and these agreements, again, we've said, we're no worse off through the OTT world, so if I just look at our regular way MVPD, our escalators are in the double-digits next year for the agreements that we'll re-price next year, and that does not count the approximately 350 agreements, which is little less than 10% of our subs that are yet to be re-priced this year, but we just did a run on retrans revenue next year just with the escalators, and so that's a double-digit increase, and so I think that's proxy for the OTT in the agreements that we've negotiated as well.

Got it. That's super helpful. Thanks, Perry. And then, I feel like you guys were itching to talk about political a little bit more – with a little bit more granularity last time, I don't know if you guys want to throw a number out there for 2018, but you've also had a few races that were not going to be competitive now break your way to become competitive. So I know you talked about record political if you want to – if you could be a little bit more granular and give us sort of maybe a starting point, I'm sure we'd all appreciate it.

Sure. Well, if you look at what this platform generated, current stations less the divestitures, it was a number that was slightly under $200 million for 2016 – actually 2014. So if you now look at 2018, we're willing to guide to a number that is ever so slightly above $200 million, just given our geography and time will tell. I can tell you that our fourth quarter political is ahead of expectations and our third quarter political in terms of our internal targets finished about 25% ahead. So I think the bias is on the upside, but we are cautious because again, we don't control the flow of those money, we just compete for share of those money. But I think a walking around number of about $200 million is not a bad place to start for 2018.

Got it. Great. Thanks, Perry.

And we'll take our next question from Marci Ryvicker with Wells Fargo.

Thanks. Perry, I want to go back to – you mentioned something on digital in your opening remarks. Are you shutting more digital assets down at Media General or are others underperforming? I don't really understand the context of the comment. And then, the second question is more a big picture. What do you view to be a bigger benefit, gaining scale across the country, so increasing coverage or gaining scale within your markets by creating more duopolies?

Sure. On digital, I think we have been public in saying that we have shuttered Federated Media and Dedicated Media. Dedicated Media's wind-down was completed in the third quarter, so that will be the tail-off of those results. What we have done with the remaining digital assets is rather than having half a dozen companies out there, we now have consolidated into three brands with different products. And so there is some additional consolidation there, that we're not maintaining seven separate infrastructures for companies and that helps to improve the profitability. So we now kind of have the critical mass that we need for the services we provide and sell out of house. We're making investments in technology through our CapEx to improve those services to the Nexstar platforms, as well as other publishers out of house that we sell and serve too. But I would say, at this point, the consolidation to profitability exercise is by and large complete with the assets that we currently own. And I forgot the second part of your question, Marci.

National scale or...

Oh, national scale versus – well, I will tell you that we evaluate each piece of that through the same screen, is it accretive, how much accretive. I will tell you that I think both are important. I think that in-market consolidation, where we drive an economic benefit today from a second station or more in two-thirds of our markets. So we know how to do that. We have that playbook and have been running it since 1998. And the execution risk is somewhat mitigated, because you're already in the markets, you already have boots on the ground. So that's an important way to build scale and continuing – we're at, just shy, 26% including the UHF discount under the 39% cap. So we have potential headway to grow. Again, if the acquisition is accretive and fits our profile of stations that have growth opportunities. So I wouldn't say one versus the other. We are evaluating opportunities to add markets and add stations within markets in real time right now.

Okay. Thank you.

We'll take our next question from Kyle Evans with Stephens.

Hi. Thanks. A follow-up to the digital question. Could you just give us updated thoughts on legacy Nexstar digital products? And then I've got some follow-ons.

Sure. Well, what we have taken now is we have LAKANA, which is our CMS provider, which is the plumbing for that drives our websites as well as the websites of TEGNA, the FOX O&O, Scripps, and other broadcasters. And we are making investments in that platform to allow for ancillary services and particularly to mine the mobile video revenue opportunity. So that's one tenet of the platform. We've kind of combined a lot of the legacy LIN Digital and Yashi and Kixer assets under a company called Mass², and that's really a product, that provides those kinds of services, which is programmatic digital video. Some SEO, SEM and things like that. And then we have a company called HYFN, which basically is in the social media space, both social media buying and social agency, and they are a primary customer using Facebook Inventory. And so I would say at this point those are kind of the three pillars upon which we are building our businesses. And as we look forward, there are interesting opportunities in ad-tech, and we are in the ad-tech business to a certain extent. Again, they compete for capital, Greg Raifman, President of the Digital business competes for capital along with Tim Busch, President of the Broadcasting business, through the same screens, are they accretive and what are the high growth potentials. And we also think there is a tremendous opportunity to build businesses serving SMBs. Our company has approximately 1,500 sales people and we call on in excess of 60,000 SMBs in 40% of the country. So we think the opportunity to provide a complete suite of services for both your television and your digital and you're working almost with a local concierge and not a call center. So if you have a problem, you can call somebody up and deal with it directly. We think there are opportunities for smart acquisitions in that space as well.

Great. And you mentioned that you've recognized essentially all of the $81 million in cost synergies from Media General. Any new thoughts there or looking back any lessons learned?

I would ask you to stay tuned. On the February or March conference call, we'll talk about performance going forward.

Okay. Last one, you mentioned that your sub counts were not giving you any cause for concern, so a little different than one of your peers late last week. Could you be a little bit more granular about your sub count trends? Thank you.

Well, I would point you to the third quarter retrans revenue versus the second quarter retrans revenue. It was up nominally. I think you should assume that is largely due to a few escalators that were implemented at mid-year but, clearly, the sub counts haven't changed in any meaningful way, which is the biggest driver of the retrans revenue.

Thank you.

And we'll take our next question from Leo Kulp with RBC Capital Markets.

Hi, good morning. Just two quick ones. Can you remind us what percentage of your MVPD subscribers are up for renewal over the next couple of years? And then, how should we think about net retrans growth? And then the second one is, I know it's early, but how are you thinking about the 2018, 2019 free cash guide relative to the current guide, given that you'll be a full tax payer starting next year?

I'll take the last question first, which is same answer to Kyle's question. Stay tuned for the February, March conference call, where we'll give 2018, 2019 guidance. I'm not going to run – gun jump that. Specifically as it – what were your other questions? I'm sorry. The first one was of the...

Retrans.

... of net retrans, we have less than 10% of our subscribers up at the end of this year. So it's a relatively modest amount, but I'll point you again to Perry's comments with regard to the effective escalators this year, which was not as substantial from our perspective. And with regard to net retrans, Leo, the numbers haven't changed. It continues to be double-digit growth 2017, 2018, 2019, both top line and net retrans for that three-year cycle. Acknowledging that 2017 will be the highest of the three years, 2018 will probably be the lowest and 2019 will be back up from 2018, but on a three-year CAGR, it will be double-digit growth in both numbers.

Got it. Thanks, Tom.

We will take our next question from Barry Lucas with Gabelli & Company. Barry L. Lucas - Gabelli & Company: Great. Thanks. Just two. Tom, if you can't speak to the guide, so on free cash for 2018, could you give us a sense of what you think your cash tax rate will be in 2018?

Well, 2018, we've already given it. I think what someone was asking was 2018, 2019 guidance and I'm not prepared to do 2019 yet, but 2018 will be a cash tax rate somewhere approximating 30% of pre-tax income. Barry L. Lucas - Gabelli & Company: Great.

Unless, of course, there is a change in the statutory tax rate.

That's true. Barry L. Lucas - Gabelli & Company: Right. Okay. And I don't want a...

Basically, we will have some NOLs left over to benefit 2018, but not nearly to the degree that it benefited 2017. Barry L. Lucas - Gabelli & Company: Great. And Perry, I don't want a carp, you threw out a host of pacings in various categories for the fourth quarter and nearly all of them sounded to be up double-digit and you've got sort of the core at mid-single digits. So what's weak and why wouldn't you be a little bit more optimistic in terms of core high-single digits or better?

I think in this environment, I'll take mid-single digits. I would tell you the – so I reported on the categories that were up out of the top 10, the three that are pacing behind are fast foods, furniture, retail and one more paid program and which is the infomercials, which you see. So 6 of the top 10 up, 4 of the top 10 pacing behind. Outside of that grocery is flat and schools are down, telecom is slightly down, drug stores are down, but again, I think that once we get to this point of the quarter, political now would be in the rearview mirror in the history and we're seeing our pacings increased for the quarter, saw it last Friday and have seen it now for about seven or eight weeks that have the pacings have increased. So I'm pleased that November and December are both pacing mid-single digits ahead of the prior year and that's without any real political displacement behind – in the – in history. So and again, October was, as I said, double-digit growth in core revenue over the prior year and that's first time we've seen that in quite some time. Barry L. Lucas - Gabelli & Company: Great. Thanks for that, Perry.

It appears there are no further questions at this time. I'd like to turn the conference back to your host for any additional or closing remarks.

Thank you all for joining us in the wake of the shootings that took place in South Texas over the weekend, it reminded me that our news departments and our staffs had to deal with a lot of disaster coverage in the quarter, whether it was the Hurricane Harvey in Texas, Hurricane Irma in Florida, Las Vegas shootings or the California wildfires, our local journalists and our local folks in those markets did yeoman's work in providing information to – for safety and security and then sharing information not only with the communities, but the rest of the Nexstar Nation. And I will tell you that in the wake of particularly the Florida and Texas hurricanes and damage, our companies came together, our stations came together and raised in excess of $10.6 million in cash and in-kind supplies and other donations to support those – the rebuilding or relief efforts of those communities. And for those efforts, I could not be more proud of the employees of the Nexstar Nation. So with that postscript, thank you for joining us. We'll be back in early 2018 to refresh our outlook for 2018 and 2019, free cash flow, as well as give you updates on our finish to the Q4 of 2017. Thanks very much for joining us and we'll talk to you soon.

That concludes today's conference. Thank you for your participation. You may now disconnect.