Q3 2019 Earnings Call
Excuse me, ladies and gentlemen, thank you for your patience and holding the conference will begin momentarily again, thank you for your patience and holding.
Yes.
Good day and welcome to Nexstar Media Group 2019 third quarter earnings call. Today's call is being recorded I would now like to turn the conference every teacher Phony Investor Relations. Please go ahead Sir.
Thanks, Sam and good morning, everyone I, just need to read the safe Harbor disclosure after which we'll get to the media the call all statement statements or comments made by management. During this conference call other than statements of historical fact may be deemed forward looking statements Nexstars based these forward looking statements on its 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 these statements Nexstar claims the protection of the Safe Harbor for forward looking statements contained in the private Securities Litigation Reform Act of 1995.
We're looking statements contained in today's call concerning among other things the benefits of the Tribune media acquisition Nexstars future financial performance, including changes in net revenue cash flow in 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 Nexstars.
Related to service and refinance outstanding debt Nexstars ability to successfully integrate tribune media, including its really realize acquisitions synergies and cost reductions.
Pricing fluctuations in local national advertising future regulatory actions that conditions in Nexstars television stations operating areas competition from others in the broadcast television markets served by Nexstar.
Volatility in programming costs, the effects of governmental regulations on broadcasting industry consolidation technological developments and major world news events.
Extra undertakes no obligation to update or revise any forward looking statements whether as as a result of new information future events or otherwise in light of these risks uncertainties and assumption nexstars actual results and financial condition may differ materially from that reflected by forward looking statements made during today's call.
You should not place undue reliance on these forward looking statements, which speak only as of the data deep made and listeners are cautioned that changes in general economic business regulatory or other conditions or in the financial results of operation Nexstar may have occurred since such date.
For more details on factors that could affect these expectations. Please see nexstars annual report for the year ended December 30, Onest 2018 Tribune Media's annual report for the year ended December 31st 2018, and each of Nexstar and Tribune Media's subsequent public filings with Securities Exchange Commission.
Thank you for your patience with that and now it's my pleasure turn the call over to your hosts Nexstar Chairman President and CEO Perry Sook Perry. Please go ahead.
Thank you Joe and good morning, everyone. Thank you all for joining US today to review Nexstars 2019, third quarter results and our operating and strategic initiatives as we embark on a new and significant free cash flow growth cycle, which will fuel our substantial leverage reduction and support our goals of driving shareholder returns, our chief financial officer.
Tom Carter is with me on the call this morning as always.
Obviously at the top up our list was the completion in mid September of a highly accretive Tribune media acquisition, the associated divestitures and our increased guide for the synergies that we're generating as we combined the operations with 197 full power owned and serviced television stations in 115 markets with consistent and meaningful contributions from our 31.
For say, a 31.7% TB food news network ownership stake.
And significant positive cash flow from our National Cable network WGN America Nexstar is now entering its next growth cycle as the nations largest pure play local broadcast television and digital media company. We now have truly national reach and coverage with the Nexstar owned or operated stations, reaching approximately 69 million U.S. television.
Households, or 63% of the country [noise].
In addition to our expanded reach were also a local content creation leader as we now produce more local news programming than any other entity. In fact, we have over 5400 journalists across the United States, which is more than any broadcast or cable network and through their efforts, we produce over 254000 hours of local news annually.
All of which is to say that our platform and original content creation is unrivaled as is our ability to address engage consumers both locally and now nationally.
Our strategy is to expand our reach and scale over the past 23 years are married to a commitment to enhance value for shareholders [noise].
Pardon me and with approximately 60% free cash flow accretion to be arrived from our Tribune acquisition. We view this as best of the 36 transactions we've done on our history.
Our focus is building scale to improve our competitive position in service to our AD clients predicated on a simultaneous ability to meaningfully drive free cash flow growth and we're delivering on this promise to our shareholders. Throughout this time, we've actively managed our station portfolio with the goal of serving the local communities, where we operate complying with regulation.
Diversifying our operations managing risk and improving financial results in connection with the Tribune acquisition, we divested 21 stations at levels above initial expectations, while completing the transaction financing on more favorable terms than we originally anticipated.
We previously noted that even with the Tribune transaction related divestitures, we are very near the national ownership cap is defined by the FCC, but that we saw opportunities to continue to refine our portfolio free up some owners or cap space and in some instances position us a new strategic markets or markets, where we believe there is greater upside and growth.
In this regard yesterday, we announced a set of station transactions with Fox, which will position nexstar and the fast growing Charlotte market, which is highly complementary to our existing broadcast and digital operations in North Carolina, South Carolina, Tennessee, and Virginia, while contributing to our ability to rapidly de lever as a result will be approximately $300 million in proceeds.
We will receive about what we're paying for Charlotte.
Overall, the proceeds from the 21 station sales completed in September enable nexstar to produce leverage at the time, we closed Tribune two at levels below our initial expectations. The Fox transaction further is that leverage reduction effort and I'm happy to report that our pro forma net leverage ratio at September 32019, a 4.4 times demonstrates that were.
Well on our path to reduce total leverage below four times at December 31 of 2020.
With respect to our expectations for net retrans growth in the mid teens percentage range in 2020 during the third quarter and more recently, we entered into new long term network affiliation agreements with both CBS and Fox, marking our successful completion of the majority of the outstanding network affiliation agreement renewals for 2019.
At the same time, we continue to successfully finalize new retransmission distribution contract renewals and to date, we've completed new agreements addressing approximately a third of the 70% of our subscriber base, which will be renewed this year. We believe we have solid visibility of our net retrans revenue growth expectations, both next year and beyond.
Our success in rapidly integrating and realizing value for acquisitions has been proven time, and again and transactions large and small our successful integrations are result of the preparations we make leading up to the closing including station visits establishing business plans for each newly acquired entity and creating a comprehensive overall integration plan. So that we are.
Passed out of the gate to meet our operating and synergy expectations on or ahead of schedule, reflecting the work done between announcing Tribune last December and our September closing, we raised our initial anticipated first year transaction operating synergies target to approximately 185 million from approximately 160 million originally.
And in the seven weeks since closing we're ahead of schedule with all of the Tribune media integration and synergy realization initiatives.
It is closing Tribune, we've expanded our staffing in our Washington, DC Bureau, and relocated into larger DC space to accommodate our commitment to provide the best local stories from Washington for markets. We are working quickly to expand local news bureaus and produce more local news and other relevant programming and several of our acquired markets.
We've also appointed new station operating leaders oversee key markets, including Dallas, Fresno des Moines, Tampa, and Spartanburg, and we've elevated members of the legacy Nexstar operating sales and finance teams to new roles to acknowledge their ongoing contributions to the company's growth. In addition, we named proven broadcasting industry executives from tribute to dry.
Growth at WGN America through content acquisition from a distribution revenue streams and to oversee corporate communications.
With our expanded and diversified operating base expectations for significant 2020, political spending and the benefit of recent soon to be completed distribution agreement renewals, we remain confident and generating record levels of free cash flow next year, while reducing our leverage taken together. These developments are reflected in our pro forma.
Annual average free cash flow guidance for the 2019 2020 cycle of approximately $1.02 billion annually, which represents nearly 60% accretion relative to legacy Nexstar operations.
Given the treatment acquisition was a cash transaction and our outstanding share count remains at approximately 46.1 million. We remain focused on the disciplined management of our share base and capital structure as additional means of enhancing shareholder value.
With respect to third quarter, Nexstars net revenue, excluding political and including the Tribune stub contribution and net of divestitures that number increased 4.8% compared to the prior year period marketing our quarterly sequential improvement over the 2.7% growth ex political in the second quarter, we saw another period of improving.
Bob television advertising trends that book the legacy Nexstar stations net of divestitures and the Tribune stations for the 12 days that we had them in the quarter.
Third quarter local television AD revenue grew 10%, while national AD revenue at least increased 14.3%, resulting in total TV spot AD revenue for the quarter rising 11.2% and these results offset onetime AD revenue losses related to our 80 distribution negotiations.
On a year over year basis political revenue declined by just under $60 million on an actual basis.
For the 2019 full year, we continue to expect low single digit growth in same station nonpolitical television advertising revenue versus the comparable 2018 period.
Overall third quarter broadcast cash flow adjusted EBITDA and free cash flow before onetime transaction expenses and onetime revenue losses in expenses related to the ATM distribution negotiations were inline with our internal expectations.
In Q3 of 19 for the legacy top nine AD categories were up and five the nine AD categories grew at the former through these patients.
Overall nexstar legacy local sales initiatives continue to generate helping levels of core new business revenue with Q3, new to television AD revenue of $16.2 million, a 15% rise over the prior year and this trend like spot advertising trends has improved as the year has progressed.
Looking forward, we see upside in the new television AD revenue metric as the former Tribune stations begin to fully adopted nexstar sales disciplines and as we transition their sales teams to the next our incentive plans, which deliver strong alignment between our local teams and our corporate goals.
We've also recently began transitioning our advertising sales or cost per impression model comprise a to provide more qualitative data advertisers regarding audience consumption of our content across all of the Nexstar broadcasting digital mobile and streaming video platforms with respect to political Nexstar legacy Andy acquired Tribune stations.
Both exceeded the internal budgets as we saw the advent of some presidential candidate spending we benefited from gubernatorial spending in several states and the continued healthy level APAC issue and propositions is spending continue.
Combined third quarter retransmission fee and digital media revenue reported on the actual basis of 352.9 million was essentially flat with the prior year and accounted for 53.2% of total net revenue compared to 51.2% of net revenue into 2018 third quarter that largely reflects lower levels of political advertising.
During the current period and the onetime effect of the 18th distribution negotiations of 185 million of targeted synergies related to the Tribune acquisition. Approximately 85 million are earmarked for net retrans revenues and combined with our negotiations for 70% of our sub base. This year significant net retrans revenue growth in 2020 will complement the strong.
Political growth that we'll see you next year.
With the closing of the Tribune transaction. We also believe that we have incremental upside related to securing retransmission fees for WGN America with traditional and virtual mbps.
TNT now recently added WGN, a marking the first time that WGN a will be available on the live streaming service and we now hope to complete similar agreements with other virtual mbps in the future.
Total third quarter digital revenue declined by approximately 11.2 million or 16% as we remain focused on generating profitable revenue and as we continue to cycle through certain local marketplace changes that occurred earlier in the year.
Nexstars legacy and third quarter local digital advertising revenue and our digital agency services business, both generated year over year percentage growth in the mid teens over 2018.
As we combined the Nexstar and Tribune digital operations and assets. There are several initiatives underway to build on our successes to deemphasize operations that don't meet our criteria for EBITDA contribution and to realize the potential of the massive usage of our combined websites and portals to better leverage our premium local content across our digital operations.
Extension expansion significantly strengthened nexstars ability to deliver superior engagement across all devices, including large scale reached online users as the combined active users of the Nexstar and Tribune websites.
Combined would be the nation's top site for news and information and drank price comscore with over 106 million monthly unique users and in a brand safe environment for advertisers in the meantime, we've reallocated approximately 20% of our journalist resources to mine and harvest the digital opportunity presented by our reach and the usage of our websites.
We have I high expectations and great confidence in the value of the Tribune transaction that it brings to the next our shareholders over the past 23 years, we've completed successful successfully integrated and generate a growing value for shareholders from 36 transactions, which have increased our scale diversified our portfolio and enabled us to remain highly competitive in today.
Media and technology ecosystem from our shareholder standpoint, the Tribune transaction will be our biggest and best transaction in terms of driving significant free cash flow accretion.
Given the significant free cash flow from operations, we will be immediately reducing leverage and we intend to increase our return of capital to shareholders, while investing in our business and our team to improve service to both viewers and advertisers.
This focus combined with our time proven operating and integration strategies will enable us to extend our strong long term record of shareholder value creation.
So with all that said, we now turn the call over to Tom Carter for our financial review and update Tom. Thanks, Perry and good morning, everyone has outlined in our press release. This morning, Nexstar completed its acquisition and Tribune and also close on that divestitures at 21 stations on September 19th the actual results for the three months ended September 32019 reflect that.
Companies legacy Nexstar broadcasting and digital operations.
Last 12 days of results from the eight Nexstars television station divestitures and it includes 12 days of results from the Tribune media stations net of their divestitures.
Third quarter 2019 revenue from WGN America acquired and interviewing transaction is included a national AD revenue and retransmission fee revenue. The 12 day contribution in 2019 third quarter from Nexstars, 31.3% ownership stake in the TV food network and other investments and acquired in the TVN transaction.
It is also included in the full income statement in our press release under income or loss on equity investments net.
The comparable three month period, ending September 32018 reflects Nexstars legacy broadcasting and digital operations as is required by GAAP.
In connection with Tribune's acquisition, and the truth and the station divestitures, we disclose that we would record several onetime transaction expenses, which for the quarter came in at approximately $33 million.
With that is kind of preface I'll start with a review of Nexstars Q3 income statement and balance sheet data after which I'll provide an update on our capital structure and some points of guidance.
So during this part of the presentation I'll give you a feel for some of the revenue items on a.
Percentage change on a pro forma combined same station basis, which is basically.
All of the results for the new pro forma assets in the portfolio that we have compared to those same assets.
And their performance in Q3 of 18.
Net revenue was down 4.2% to $634 million.
TV spot advertising revenue was 290.2 million, which is up 11.2% over the $261 million reported basis.
Spot total spot revenue for us is defined as local plus national and on a same station basis that was flat for Q3 local revenue was reported up 10% on a same station combined basis that was up 1%.
National revenue was reported up 14.3% to $82 million and on the same station basis that was down 2%. So as local was up 1% and that national was down 2% that combine to flat for total AD revenue total core AD revenue political AD revenue obviously was.
Down meaningfully during the quarter compared to 2018.
Using approximately $60 million down to an $11 million number from a high of 70 million in Q3 of 18 total.
AD revenue, which includes local national and political was down 9% again, driven by the political decline as is cyclically experienced.
Total net revenue ex political was up 5% because again, we've had growth in other areas.
And reported from the Tribune acquisition net Retrans fees were up 3.7%.
Which again reflects the ATM teen negotiations and that the approximately 60 day blackout their digital revenues were down $11 million to 58 million.
Total broadcast cash flow was and these numbers are before onetime expenses.
202 million versus 280 million in 28 in 2018 again. The 2018 number was the result of a lot of political revenue.
Adjusted EBITDA before onetime expenses was 178 million free cash flow, but before onetime expenses was approximately $100 million.
Total digital and distribution revenue included approximately a 4% rise in retransmission fee revenue to 295 million, which was partially offset by a decline in digital revenue the 58 million.
As previously disclosed in the September Nexstar Tribune closing press release retransmission revenue growth during the quarter was impacted by the 18 T. distribution negotiations on August 29, excess nexstar entered into a new multiyear distribution agreement with 18 T. at favorable terms, which is reflected in our upside.
Just one year total synergy projections of 185 million as well as our pro forma average free cash flow guidance for the 1920 cycle of approximately a $1.020 billion as a reminder for modeling purposes onetime revenue losses in expenses incurred in 2019 third quarter relating to the distribution.
Negotiations with age TNT resulted in approximately 20 million dollar average annual impact to Nexstars pro forma free cash flow in the 18, 19, and 1920 cycles and this is reflected in all of the aforementioned guidance.
Looking deeper at our digital revenue third quarter core digital advertising revenue, meaning our stations hyper local websites and mobile apps increased 13% year over year, while our local digital agency services business achieved a 15% growth year over year as we stated over the past several quarters, we anticipate a topline growth.
Growth in digital would be impacted in the near term as we cycle through certain marketplace changes that continue to impact the select demand side platform customer buying as well as deemphasizing nonprofitable and marginally profitable lines of business in Q4 of 18 in early 2019 as a result, we have it we.
Evaluated the portfolio and recorded a onetime noncash impairment charge of approximately $63 million relating to our digital assets, which were impacted and reported in net net operating income net income and EPS, but did not affect broadcast cash flow free cash flow or adjusted EBITDA.
After months of planning leading into the Tribune closing, we're well aware and positioned to take a take advantage of immediate action to align our digital businesses with tribune's assets in order to best leverage the value of the company's continued scale going forward and expect the financial benefits of our digital strategy become more visible in the future.
As we continue to successfully execute on integration plans over the coming quarters as Perry alluded to when discussing the mass uses of our combined websites. Our focus in digital will be on the Nexstar Tribune combined fast growing local hyper local websites and mobile apps and the digital agency operations and less so on the Dimont.
Demand side platforms that we've experienced in the past.
Third quarter station direct operating expenses net of trade expense increased approximately 13% to 318 million, primarily reflecting incremental partial quarter increases relating to the operation The Tribune station and budgeted increase in network operating network affiliation expense same station fixed expenses.
Including programming expenses were down approximately 1% for the quarter.
Third quarter, EPS, DNA rose, 6% to $120 million again relating to the partial quarter inclusion of Tribune corporate expense was 63 million inclusive of $10 million of stock based compensation and $34 million and onetime transaction expenses, when excluding noncash comp and onetime expenses recurrent.
This is otherwise would have been down low single digit percentage wise compared to the prior year.
Third quarter operating cash taxes were $16 million, while station and digital related bus station digital Capex related operations totaled $17 million spectrum Repack capex totaled approximately $20 million for the quarter, which was offset by a like amount of reimbursements for the quarter.
Third quarter total interest expense.
Total.
Totaled $93 million up from 60 56 million in 2018, while cash interest expense was 55 million compared to 54 million with increases due to the incurrence of debt.
Funded by Tribune, the difference between the 55 million in the 93 million really relates to.
Fees and expenses and showed associated with the refinancing as well as about $8 million of Escrowed bond interest, which was from the period of July 3rd through September 18th.
Where we weren't employing those funds for for the business in more so we're just collateralizing the bonds until the TREVYENT transaction closed.
Third quarter broadcast cash flow of 203 million as well as adjusted EBITDA of 178 million and free cash flow of 100 million pre transaction expenses were in line with our expectations based on the revised guidance provided in September relating to the TNT.
Retrans negotiations.
As a result, nexstars reiterating it's for a pro forma annual free cash flow guidance for the 1920 cycle of approximately.
Billion $20 million looking ahead to Q4 of 2019 for the combined company, we project recurring cash corporate overhead of approximately $30 million exclusive of stock comp and tribunal related transaction expenses noncash comp for the quarter is projected to be approximately.
$10 million, bringing the total to the year for $38 million cash transaction expenses, primarily professional fees and severance that can't be capitalized are expected to be approximately $20 million for the fourth quarter and $54 million for 2019.
Fourth quarter operating cash taxes are estimated to be approximately $48 million and $115 million for the year actual cash taxes will be higher because we will also a cash tax on the profit recorded from the station divestitures.
That happened on September 19th, but the portion of cash taxes associated with operating profits as 48 million.
Fourth quarter Capex should come in at approximately $36 million.
For the quarter and in addition, there will be approximately $26 million and transaction related capex.
That's anticipated for us to invest in the Tribune stations and enhance their news and station infrastructure and to bring them into the.
Next our operating environment total capex for the year 2019 will be approximately $835 million and looking forward to 2020.
Total capex will be approximately $140 million, both 135 and $140 million includes the transition capex for both years.
Finally, we expect Nexstars fourth quarter cash interest expense of approximately $100 million for the quarter.
Turning to the balance sheet our review the key items as of September 32019, and provide an updated pro forma for the completion of the transaction total net leverage for September Thirtyth 2019 was 4.35% first lien covenant was 2.9 per se.
Oh, Im sorry, 2.96 times versus a covenant of four foreign a quarter total net debt outstanding as of.
930 was 8.2 billion total gross debt was 8.5 billion with $300 million of cash on the balance sheet.
Net debt again was 8.2 billion compared to 3.7 billion at the end of 2019 obvious I am sorry June Thirtyth 2019, obviously, reflecting the closing of the transaction, where we added a new 675 million dollar term loan a approximately $3.1 billion term loan b and the new.
$1.1 billion of notes the existing revolver $900 million of senior notes $400 million.
Two issues of four and 400 million, a 275 million all rolled over as well as the existing term loan a and term loan b.
We remain committed to allocating significant portion of our free cash flow towards leverage reduction.
Shortly.
Sure.
So if you're a speaker or presenter.
Quarter of 2019 reduce total funded debt by approximately $60 million, while also allocating 20.
Name.
Collars to dividend.
Then.
With going growing distribution revenue and anticipate high levels of political spending in 2020.
Nation.
Tends to reduce total leverage.
Using.
Reduces total leverage ratio to below four times by 12 31 of 2020.
Our capital structure waste the proper balance of fixed and floating debt and attractive weighted average cost of capital and prepayment in refinancing flexibility. In addition, we'll have a well staggered maturity profile with no significant maturities until 2022 at which point, we'll expect it will have made a significant headway towards substantial debt reduction.
Going into the closing we reduced our leverage levels to below initial expectations and Nexstar has consistently demonstrated prudent use of leverage and its ability to source capital at attractive rates to support our strategy for growth in the enhancement of shareholder value given the significant free cash flow from operations. The combined entity will be poised for growth.
Leverage and reduction in increased capital returns to our shareholders. This this focus combined with our time proven operating and integration strategies and the disciplined management of our capital structure and focus on a median substantial leverage reduction will enable us to to extend our strong long term record of shareholder value creation.
In summary on as Perry stated on the call next or entered into significant free cash flow is entering a significant free cash flow cycle, which will drive meaningful and rapid deleveraging as well as shareholder value creation opportunities the integration of our synergy realization and operating plans are generated results our capital structures and great.
Shape from both the cost of capital and ability to quickly address leverage and our service to our local communities and local national advertisers has never been stronger.
Our disciplines in these areas have significant growth have provided significant growth as well as consistency and visibility to results as such we remain confident our ability to deliver deliver on the value of the Tribune transaction, which resulted in an approximately 60% growth and nexstars standalone free cash flow I'm, sorry, 50% in Standalone free cash.
Hello, and 60% in combined free cash flow growth, 60% to approximately.
$1 billion $20 million, we look forward to initiating our 2020 2021 free cash flow guidance. When we report the fourth quarter of 2019 in February of 2020, and provide an update on that time on our synergy realization progress that concludes the financial review for the call I'll turn it back over to Perry for some closing remarks before Q.
Okay.
Thanks, very much Tom for navigating through all of that with stable spot trends in the four year benefit in 2020 of new affiliation and Retrans renewals combined with our ability to capture large shares of political advertising in our markets. We have excellent visibility toward achieving our free cash flow deleveraging and return of capital targets.
Remaining opportunistic with respect to transactions that are further optimize our operating platform relative to the national ownership limits.
For Nexstar and our shareholders free cash flow is our priority and performance metric I Hope My comments. This morning highlight why we believe we have visible prospects to generating pro forma average annual free cash flow of.
1.02 billion in the 2019 2020 cycle.
We look forward and reporting our continued growth and accomplishments in three months time and on behalf of the more than 13000 employees of the new Nexstar nation and our management team. Thank you for your continued interest support and joining US today now, let's open the call to Q and eight to address your specific areas of interest operator.
Thank you if you would like to ask a question. Please signaled by pressing star one on your telephone keypad, if you're using a speakerphone. Please make sure. Your mute function is turned off to allow your signal to reach ever equipment. Once again press star one to ask a question, we'll pause for just a moment hello, everyone an opportunity to signal for questions.
Our first question comes from Dan Kurnos with benchmark company.
Great. Thanks, Good morning, Perry can you just maybe just to dig a little bit deeper into sort of the rationale on the effectively the station swap with Fox, obviously, you get to de lever, but it also kind of changes the footprint I mean does that it sounds like you want to use the capital to de lever faster, but what we've always are sort of thought about.
Maybe you guys, even doing something with cross on or.
Getting a little bit more aggressive buying back W. Kayak. So just maybe some quick thoughts there and just the synergy benefits maybe that you get out of the smaller stations and then also little bit interested on the Comscore switch given some of the challenges they've had but just sort of love to hear sort of how you think that impacts.
Selling abilities going forward and why your decision to do that now thanks.
Sure first on the on the transaction announced with Fox yesterday, I mean, we characterize this as a win win the acquisition for US is highly accretive it has high growth potential. So we took our measure of that relating to the other operating assets. It's cements our relationship with Fox, where we are by far our there.
Our just affiliate group.
Frees up approximately seven tenths of a percent you've got to remember the right Jeff discount for cap space for other follow on transactions that were contemplated we were literally at the caf within a less than.
A 10th of a decimal point and attract that transaction also Nox one.
0.1% or 110th of a point off of our leverage so the four four times that I told you at 930 on a pro forma basis will be 4.3 times. So given all of that we think that it was a a win win from a transaction and.
And so we were happy to enter into it as it relates to Comscore, we have any subscriber of Comscore all along our entire portfolio has access to Comscore. The change announced was a change from.
Selling rating points to basically selling thousands or impressions, which would allow us to level set across the entire platform and made no sense to us that if I was trying to reach Tom Carter as a television advertiser I would keep track in terms of rating points, but through every other device that we use to try and reaching digital mobile streaming.
We keep track and impression. So this kind of helps level set it makes the business easier to sell we happened to have developed a tool with Comscore, which we think will put us down the road further faster in making this transition, but we're still a subscriber to Nielsen and some of our LPM markets and we're subscriber to comscore across the portfolio. So no change in.
Strategy there other than the change to impressions.
And Dan just one follow up comment it was structured as two separate.
Days, because if you remember and again these are tribune assets and Tribune will be buying the former Tribune subsidiaries will be buying Charlotte Tribune had a.
A tax deferral associated with the spectrum sale that they did back in 2018, and so im sorry 2017.
So there is an opportunity here from a tax perspective to defer some some cash taxes.
Thats why it was structured as two separate transactions.
Perfect. Thanks for the color guys appreciate it.
If you find that your question has been answered you may run. These yourself from the question in queue by pressing star team.
Our next question will come from Marci Ryvicker with Wolfe research.
Thanks, I have a couple of the first one at Terry said.
Net retrans growth in mid teens for 2020 and I'm just curious what's in there that seemed station is that including from University Standalone Nexstar does not include Wtnh.
How does that compared to when you talked that mid teens last time, and then you said you have visibility for 2020 and beyond so would that apply to 2021 as well.
Marci I'll take that the mid teens growth is on a same station comparable basis. So basically for the portfolio that we have right now.
And it does take into account the 18 t. deal as well as the most recent renewals on the affiliate side. So we have a high degree of confidence in that.
The mid teens number is for 2020, not surprisingly that number is going to be the highest of any of the next two or three years because of the level of subscriber renewals that we have.
Have done heretofore and 2019, and we'll do by year end. So the double digit net retrans growth is still applicable over the next two to three years.
It's just that it'll be front end loaded with slightly higher than higher than the average in 2020 because of the level of.
Renewals and slightly less than the average.
After that because our renewals will be more more measured.
After this year does that make sense, yes. Thanks.
And then I know you said I look forward be up low single digit same station for 19 versus 18 any color on Q4.
Sure not surprisingly October from a core ad sales.
Perspective was by far our best month of the year up just shy of double digits on local and National combined now you might expect that given that there was shy of $200 million of political revenue occupying those same seats on the airplane last year.
But for the quarter, we anticipate low single digit growth in core obviously political becomes less of factor. Once you get passed this first week of November but.
But yes, we're seeing and it's interesting timbers president of the of the broadcast Division did a third quarter comparison of Nexstar and Tribune.
Standalone revenue results and they're virtually on top of one another theres not a lot of variance. So we think it's a pretty good proxy for what we see in our footprint and for the industry, but we do anticipate reporting single digit growth in core revenue in the in the fourth quarter.
Got it and then last question is there any chance you weren't going to give us pro forma is by quarter through Q3 of 19 said that we know how to model going forward.
While you noticed we gave you pro forma as for.
During the June thirtyth quarter on Monday that.
That satisfies their requirement by the FCC I think we historically have not given detailed pro formas on historical basis, but we'll take that under consideration.
Thank you.
Thank you. Our next question comes from Zacks, Silver with B. Riley FBR.
Okay, great. They Shouldnt question just wanted to ask a question about the subscriber accounts just trying to reconcile.
You say in the press release Subcount stayed relatively consistent but in the second quarter in the third quarter, we're seeing.
Meaningful deterioration in pay TV subs and little bit weaker on the TV subscribers as well.
So just trying to see if you can help reconcile that.
Well I can't help reconcile the entire industry. Unfortunately.
The comment with regard to current sub counts, obviously excludes ATM team because we don't have any sub the last sub count we have freight TNT was basically June thirtyth.
But all other.
Mbps and Otcs that are reporting to us and by the way, we'll get a new sub count for ATM T. here by the end of this month.
All sub counts were again flat.
Between.
June and July .
And that is basically a flat number for the trailing 12 months at that basis again, the only thing that I can think of is our our growth in the OTI has been phenomenal.
If you look back a year.
Our OTI subscribers are up 525%, which is kind of just opened with numbers, but basically all of the LTT growth has offset.
The traditional MPPD subscriber declines largely because.
If you go if you look back to Q2 in Q3 of 18, we were just launching OTI in many markets at that point. So I'm not sure are and believe me our budget is not for.
Flat subscriber accounts.
Either end 2019 or in 2020, it's just that the OTI has been more robust because we're seeing early we're seeing adoption. When these services are rolled out in some of the smaller market. So that's the only thing I can really comment on why our performance would be different is because we are.
We're playing catch up in the OTG markets and obviously that.
That can't last forever, and we acknowledge that because basically at this point our our traditional MVP. These are basically at budget in terms of subscriber attrition, but our adoption on the OTI as far exceeding our expectations, which on a combined basis leads to flat.
Okay that makes sense and then just a quick one on the net Retrans synergy guidance does that 85 million include WGN, a any additional Andy VTB distribution from them or some of the recent deals we've done.
It includes all of that.
Got it Okay, and then one more just on.
One of the regulatory out and just on stellar coming out then there's been some rumbling around that just curious to hear perrier Tom on either one of your thoughts on how you think thats going to play out and how you think that will impact you guys.
Well as you know the bill expires at the end of this year.
There's a lot going on in Washington on the priority list that it before they ever get to sell our so.
I think that the industry is of a mine that this is a ROIC of a bygone era and should just be allowed to sunset. There are some provisions as some people.
In Washington would find useful and meaningful which would be a good standing good faith provision and things like that so.
Somewhere between no bill.
I have dramatically slimmed down Bill I think you know is an area that could get consensus.
And we we think the the the Bill itself is is ROIC of a bag on era, and our bias would be to see if the sunset at the end of year.
Alright, great. Thank you both.
Thank you. Our next question comes from David Joyce with Evercore ISI.
Could you just help us think about the phasing in of.
The synergies on the revenue in the cost side over the next few quarters and then separately.
Where are you in the industry.
Initiative and trying to tap into the programmatic and other addressable advertising. Thank you sure I'll I'll take the on the synergy corporate is.
Ahead of schedule and obviously.
From a sequencing perspective, thats pretty straightforward we are in the in the process of transitioning there.
Operating centers to our operating or centers. So I would say, there's still more to come on corporate.
That was some large dollar.
Take large ticket items there not surprisingly early on.
Retrans is.
In process that will be completely done by the first quarter of.
2020, the station operating expenses will be getting really haven't begun in earnest yet and won't begin because we're we're basically staying on many of the same systems through year end for audit and Sox compliance purposes, and we will start transitioning off of.
Matt.
Legacy Tribune station or station operating systems in Q1, so those relate you've seen a little bit of.
Of synergies on the station side, but most of those will come in 2020.
The retrans will be largely done by the ended the year and it will be.
Reflected in the 2020 numbers and I would say right now corporate is probably 50% Don.
The other 50% coming.
Before year end and really fully realized in early 2020.
Is that helpful. If that is good thank you.
All right and tip.
The tip initiative.
Money is is beginning to flow.
Through that platform.
Theres still a bit of a push pull with the vendors who are happy to build compliance systems, but also want to be paid.
Paid a total to use their toll road.
So theres a bit of a push pull still going on there but.
Agencies are beginning to mandate that the reconciliation piece of this be every every they're demanding that people right and transact to those standards and that's really what will drive adoption. So we continue to push forward. There's a good consortium of industry.
Participants that are pushing for this on the sell side and obviously our job now is to make sure that the buy side is.
Is making this a prerequisite and and and so it's still early days, but we are we continue to be encouraged by the adoption and awareness levels continuing to increase.
Great. Thank you very much.
Our next question comes from Craig Huber Huber Research partners.
I'm Sorry next question comes from Davis, Herbert with Wells Fargo.
Hi, everyone. Thanks for taking the questions first of all welcome to Charlotte.
And.
Just a couple of questions from me.
And if im looking at your debt repayment plan and deleveraging plan would you anticipate paying down the credit facility with proceeds from the box.
Transaction as well as ongoing free cash flow is that the plan.
I would say.
Short answer is yes.
I can't say that.
Trace that the funds from Fox to an exact repayment or not obviously there there may be other transactions that we'll be doing now that we have a little bit of cap space.
But yes, the majority of free cash flow.
From operations and cash generated from other up.
Other activities will be used for debt reduction.
But at the same time as we've said before we can walk and chew gum at same time, we can do further M&A, we can buy back stock Opportunistically et cetera. So all of those are options as well.
We don't we anticipate.
The Fox transaction will close.
Best case, probably March worst case, probably April or May.
You know tell me what the stock prices then tell me how much that we've already pay down and I can give you a better feel for things, but yes. I mean, it's this we're running the same play regardless of its free cash flow from operations are cash generated from other activities.
Okay. That's helpful. And then second question for me given the wrench kind of thrown in the things on understood limits by the third Circuit Court.
Hey, being a low probability outcome you could.
Repurchase W.P.I. ex does that change your M&A strategy at all.
Well the third third circuit really had nothing to do with national ownership Caf Thats still stands and.
As long as the cap stands at 39%, whether you HF discount.
We it's tough to clear enough cap space under the current rules for us to be able to repurchase WPS acts as you know Thats, a VHF station and New York accounts for approximately 6.4% of all us television households, so the 0.7%.
Clear by the transaction with Fox certainly doesn't get us home at that point so.
We continue to lobby for and I was with the chairman of the FCC yesterday on two separate occasions here in the market events that he and I. Both attended and we continue to lobby for elimination of the cap or at minimum codified in the regulations of 39% where the rates have discount that would equal 78 per se.
But the us being the theoretical national cap today, just codified that taking the uncertainty out of it which would allow us room at that point to acquire W.P.I. X, but we we have an option period that runs for about a year and a half post the acquisition. So hopefully there'll be an opportunity for us to do that.
Okay, great. Thank you.
Okay. Next question comes from Craig Huber Huber Research partners.
Hi, it's been a few questions if you could hear me.
Yes, I think Tom you said earlier on 33% or so of your sub zero renewal. This year is that correct and also more portly is what's the 2000 2021 number pro forma basis for the of the station Jeff.
Craig that number the percentages subscribers that are up this year is 70% of total subscribers. The 30 333 of the 70, 33% of the 70% have already been done.
Okay got you then and then the.
That not surprisingly if 70% is done this year than I want to say, it's 20% next year.
Percentage next year's Capex, obviously, you can't have successive years of 50% plus subscriber renewals.
Okay. Then on the thank you guys on the AD revenue side I think you said you guys were flat the core advertising number the quarter pro forma what was auto category.
And a little bit retail can you comment out those two complete outlook is there. Please.
Auto was down a low single digit like a minus two and what is the other category you're asking about retail retail please.
Retail if I look across the portfolio that was down I kind of a high single digits.
Attorneys if you want some more color attorneys.
The company were up almost double digits and repair was up double digits cable advertising.
Was up.
A high single digit insurance was up almost 25% and.
So those with the categories that were that were leading.
Next our higher in the third quarter.
What's your sense Perry about auto once we get through these comparisons here for the political year ago, I guess for December as you kind of look out here.
Well.
Third quarter again, our fourth quarter as you know like I said October last year, there was a little less than $200 million in political advertising on the books. So that is going to color every core advertising category, but as I said, we were up double almost double digits in core advertising in October that will come down for November and December because there was less of a play.
Medical displacement, but our sense is that kind of automotive is settling in where it is and it's maybe not 2020, 627% of our business, but its 20, 324% of our business, we think thats going to be a fairly steady state.
The category that.
That is phenomenal in this growth because it continues to be unabated is the legal category I was on a panel with some other.
TV company Ceos, and one remark that in two of his markets legal is the number one category in terms of has surpassed auto we're not there yet and Theres a long way to go for us to get there, but that is now our number two category supplanting fast food and furniture and some of the other perennial.
Strong categories that are strong insist that the growth curve on on legal advertising continues unabated.
And then Korea, we'd like to ask you what's your.
Current thoughts in the US economy here given that you guys are about 115 markets. The you'll see feeling better worse for about the same say versus three months ago.
Yes, I mean.
As long as money be continues to become cheaper in this company and we can continue to print more of it but that doesn't seem to trigger inflation I mean, we feel.
Very confident about the economy. If we look forward 18 months I think it's it's almost impossible to imagine that we would have any kind of a recession in political year an election year.
And while this continues to be kind of a goldilocks recovery. It's also now the longest recovery. We've had post post recession again, we're we're going to be very focused on leverage reduction because who knows what's around the corner and 20 122 or beyond.
But we don't see any anything in the future coming that would cause our our outlook to become pessimistic. We think it's a you know, it's a 2% or plus or minus GDP world I will say that.
In the upper Midwest and some of our smaller markets that are dependent on AG business that the tariffs have have shown in effect and we've seen a little bit of slowdown in farm equipment tractor implement purchases and advertising as well as you know truck sales or maybe a little slower and a couple of states but.
But I think that is very specific and again those markets are not not our largest contributors but.
I think on balance we see no.
No clouds on the horizon absent extraneous shocks to the economy or the country.
Thank you for that my final question, Tom The 1.02 billion free cash flow guidance number.
What's the EBITDA number your mind that corresponds to that.
We haven't given.
We don't give specific EBITDA guidance.
But you can kind of work your way back if you think about.
You know the specific capex guidance that we've given pretty specific interests guidance that we've given you could back into.
An estimate of cash taxes, as well and that would give you give your EBITDA.
I should check and like at some point like there's change out Hey, Joe Yes, sorry, you're on the you're on the speakerphone.
On the conference line.
Policies.
Yep.
Tom.
Yes.
Again, we don't we kind of give you some building blocks and you can you can get into a neighborhood.
Let me ask you look different question than this 100 million of interest expense, Tom I think you said.
Expected for the fourth quarter, how much less cash cash interest expense. Please that's really that it really is all it is that is cash I should have been more more specific that is cash.
Okay very good thank you and actually if you go back and look when we did the bond deal again.
July I.
I want to set I know that we also did an 8-K on.
Trailing 12, an l. HQ way.
EBITDA at that time, when we did the closing deck on the September nine or September Twentyth call for Tribune, we updated that for 630.
Trailing 12 and twice trailing late Q way.
And from time to time, if we do bond deals et cetera, et cetera, we'll have to update that as well for the bond market. So there are some data points out there for people to.
Defined.
Very good thank you and I am happy that point you to those specific documents.
Later thats helpful.
Great. Thank you.
Our next question comes from Steven Cahall with Wells Fargo.
Hey, Thanks, maybe I missed this at the beginning but I was wondering if you could give us either the 2016 or the 2018 political revenue on a same station basis, and maybe just how you're thinking about how it grows off that base within the free cash flow guide.
I don't have that information with me on this call right now we can.
We can healthy helpful. Later, but I will say our expectations for 2020 as it relates to political or obviously higher than both of those.
2018, even though it was a non presidential year, the combined Nexstar Tribune political revenue was up.
Compared to 2016 I want to say, our 2020 numbers are a double digit increase over 2016 and a mid single digit increase over 2018 on a same station basis.
Great. Thanks, sorry.
Yes, I don't have that that's where I can give you the trajectory I just can't give you that the dollars at this point.
Okay.
And then maybe on the leverage target that you've set out for next year I mean should we think about that as a bit of like a watermark level whereby after that you're maybe more comfortable in light of the industry trends are the cyclicality to start deploying cash beyond deleveraging or do you think that you'll need to run a more concern.
It is balance sheet for any reason.
After that point than you historically half.
The only reason to run a more conservative balance sheet at that point is if interest rates increase because obviously, we all use leverage.
At the EBITDA as a crutch, but the real.
Cost of leverage as the interest expense, if we have higher interest rates and higher interest expense were going to have lower leverage.
Just to kind of get to the same spot from a free cash flow perspective. So.
We think that.
Sub four to the mid threes is a sustainable leverage level as we've said before we don't have any.
Aspirations to be an investment grade company has to be an investment grade company would require something probably in the mid twos and that would require a 1.8 billion dollar reduction in that we'd rather.
The shareholders participate and that amount rather than pay down debt, we see there diminishing returns on paying down debt in the current interest rate environment significantly below four times does that help.
That does and then just the last one from me your your Retrans outlook for 19, 2021, and what you just gone through even with a little does step with 18 tee. It seems like things are still moving along.
Pretty pretty well I wonder if you could just comment at all like if you think that the whole industry is going to be able to equally smoothly absorb a big NFL step up that you get that at some of the broadcast networks and the next cycle already starting to see those questions come up like with CBS and Fox. So how do you just think about where the level of 10.
Mention is in terms of either both gross retrans or reverse compensation and the ability of the whole system to absorb maybe a lot more cost rolling through thank you.
Well, obviously, the NFL agreements would affect the fall of 2023 and beyond and so even if deals are struck before then payments what we do before then.
I would tell me is someone on the outside looking in and we're going to have a decidedly different you know.
Cash payment.
Opinion, there or if someone steps up and picks up more than one package I mean, there's a lot of variables.
The.
There was an NFL owners sitting across the table for me at lunch yesterday, and so as you know that television revenue was 60% of their total total revenue now. It's obviously, it's important revenue stream to them, they're not going to want to jeopardize.
And I will make a statement I think that all packages will be on.
Linear television in some way shape or form.
There may be a streaming package.
Increasing streaming packages with each of the packages.
But I do believe that whether it's a game of musical chairs or things remain status quo that the basic packages will be.
On linear television as to where we are in the process I can't speak for other companies. All I know is that the broadcast industry as a whole this year will generate approximately 15%.
Depending on whose numbers you believe thats, our number 15% of the revenue from a bundle while supplying between 30% to 35% to be aggregate viewing in an MPPD home. So there's still a long way to go before we are earning our fair share and anywhere near parity. So we continue to build.
Leave and obviously you get what you negotiate both on the revenue side and the expense side, but we feel confident in our outlook and but really can't speak for others.
Thank you.
Our next question comes from Kyle Evans Stephens.
Thanks, two quick ones could you give a little bit more clarity on the 16% decline digitally reference cycling marketplace changes what are we cycling specifically and when is the impairment.
On liquid thanks.
The impairment is not all on liquid but a good portion of it is.
And really what we're seeing the decline is as I mentioned, we're seeing growth at the local level. It's the.
It's the marketplace level, where we're seeing pressure from the largest players in the market to continue to change.
Access to some of their inventory.
And our ability to access that inventory to sell into resell to our advertisers I think thats the subject of.
Congressional hearings right now with regard to some of the practices that they employee as it relates to that but you should think about it more kind of on the wholesale side than on the retail side are.
Our local web sites and the local businesses that we're selling to on those web sites continues to be healthy it's kind of more the the wholesale business, yes, Kyle I mean there.
Few pieces, they're smaller pieces of our business that are.
Not contributing positive EBITDA and we're engaged in discussions to dispose of those businesses.
GDPR was more of an impact domestically because people do business internationally and agencies and so.
Data and the California privacy laws some of those things are having influence, but as Tom said that.
The change in algorithms that two of the largest players and digital advertising.
Negatively affected third party resellers of that now while you've seen a.
16% decline in topline revenue it hadn't had anywhere near that on the bottom line because these some of these third party reseller agreements come it basically 10% margin. So it may seem like a topline decline, but it hasn't affected the bottom line.
But I will tell you the positive signs local digital revenue for US continues to grow double digits. Our agency services business as a double digit growth our data business, while a small business as growth that is literally off the charts and so.
We will cycle through all of this fourth quarter should be the last year before we meet ourselves coming back and have lapped ourselves. So I think the outlook for 2028 would be would would be optimistic because of the growing piece of the businesses and the fact that the declines in some of our lines of business will have a full year of that and be up against our own numbers.
Great. Thank you so much.
Our next question comes from Jim Goss with Barrington Research.
Thank you.
With the national reach and Brett you have now plus the large market exposure.
Any specific programming AD sales or other initiatives.
You have targeted toward taking advantage of this change position.
Well, Jim I think you bring up an interesting point, we have a basic cable network that WGN America that reaches approximately 70 million households are broadcast footprint across the country reaches approximately 69 million households.
We have 106 million unique monthly digital users are combined across our platform seems to me that.
If we can find a way to bundle that there would be people that we'd like to buyback for this year reach of those of those different linear and digital platform. So there's a lot of conversation about that from an AD sales perspective.
We're not necessarily interested in producing national content across our TV stations, but we think we can take the unique content that we own our local news our local programming as well as what we produce for digital and bundled those things together and and sell them, which is again with part.
Our move to an impressions based selling model. So we can bundle all of that up and go to market. So I think you could see us with our reach attempt to tap the national advertising market or maybe I should say the network advertising market over time, we have to develop the plumbing to be able to do that easily and make it easy for the buying coming.
Entity, but that is certainly an area of focus of the company and discussions that we're having literally on a real time basis.
I would imagine it also positions you better twos direct national spot.
And since you have a large number of markets along those lines.
Direct meaning without well refer.
Well or at least you would you would have more in your bundle that.
Perhaps it perhaps it would be with or without a rep firm.
Well again, you know if we put together a local news network, reaching 60, 63% of the country nobody else can do that right and so there are some uniqueness is through our platform 106 million unique monthly users now we've got to be able to aggregate that track them have first party data on them.
And so.
I look at the assets, we have in and say, how what is the highest and best opportunity to to monetize and see a return on investment in those assets. So we are.
There are so there's not another company like this out there that has this much reach at the local level at the last mile retail level. We think that is unique and we are working hard internally to develop opportunities to to capitalize on that uniqueness.
Okay last thing following the Charlotte edition will further portfolio refinement, perhaps even without any change in the.
Regulation right now.
Would it be more.
In terms of market size, geography affiliate mix or something else that would be your treats call them. I think we'll continue to be opportunistic there may or may not be opportunities that too.
Buy or sell but we're going to be very opportunistic and doing what has the opportunity for the highest growth potential.
What's in the best interests of our shareholders in terms of.
Growing the equity and and we could be on either side of the transaction I would think opportunistically.
We'll evaluate every element of our portfolio I was going to say and Jim obviously, we have a preference for big four affiliates and we have a preference for duopolies. So that that obviously as always you know.
Just from a.
Mass perspective, what has worked out best for us So we're always trying to.
Take advantage of those opportunities when they come up and I would say that we'll continue to be the case.
All right. Thanks, we also have a preference for stations that produce a high quantum of local news like a K T la like at WGN Micron in San Francisco and.
The nice thing about that as you know if you follow the the la fire coverage Kt late dominated every station in the marketplace literally for the last two weeks because without a network requirement, we literally could go wall to wall. So they have been the number one station in terms of coverage literally.
People news for the last two weeks dominating the network, our windows and other stations producing news in the marketplace. So.
Stations that are like that that are local news stations for us and thats their hallmark.
Our valuable pieces of our portfolio and we tend to have those in the major markets and so.
Those are.
Well components to our portfolio as well.
Great points. Thank you.
Our next question comes from Kyle David.
Hi, I had a few questions.
Given all the moving pieces around Retrans.
Given the 18 T. outage and the Tribune deal I was wondering if you could give us a sense of the Q4 pro forma run rate for that revenue category and then my another question was.
You talked about same station core being flat and I was wondering if that was inclusive of the impact of 18 Ti or.
Flat before that impact and then the last question is with the stock trading where it is would you consider.
Shifting in the near term more towards stock buybacks as opposed to leverage reduction given how close you are pro forma for the Fox transaction to being below four times leverage.
Well I think that will pretty much cover the waterfront in terms of the types of questions. We don't give specific retrans guidance.
Fourth quarter, Retrans will be higher on a pro forma basis and you have to be careful here, because it's obviously nexstar plus tribune minus divestitures, it will be higher than both the second and third quarter. So that will give you some feel for all of that because obviously start.
It was affected by 18 tea.
The advertising was as reported so that includes the negative impact.
Albeit somewhat slight from advertising because of the TNT.
Dispute in the third quarter of 2019. So that is already included in that number. So if you excluded that.
Local and national would have actually been up for the quarter, and then lastly, and with regard to.
Capital allocation, we are an opportunistic buyer of stock.
I will say that the company has basically been in a blackout for the last year from a stock repurchase perspective.
We do have obviously substantial free cash flow we have.
Restricted payments capacity.
Buying back stock is definitely.
A potential here, but it's all kind of situation specific.
And I'd anticipate.
From a regulatory perspective being out of the out of the black out of the black black out in the not too distant future and then we'll just have to take measure of all of that at that time.
And the 40 million dollar cash flow onetime impact from 18 team was that all in this quarter or is there some to go in subsequent quarters.
No that was the it was all in that quarter directly in that quarter and its $20 million annually are obviously $40 million. When you when you bring it forward into one period, Okay got it. Thank you.
Which were made for an interesting comp in third quarter 2020 by the way right.
Thank you and me have no further questions in the queue at this time.
Alright, well I'd like to thank everyone for joining us today and working through the third quarter. We look forward to reporting to you in the new year for our first full quarter as the new Nexstar. So we'll get back together in March and we look forward to reporting on our results that time, thanks, very much everyone have a good day.
Thank you ladies and gentlemen. This concludes today's teleconference. You may now disconnect.
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