NEXSTAR MEDIA GROUP INC

Previous wording

Net revenue increased 2% to $1.3 billion during the three months ended March 31, 2024, compared to the same period in 2023.

Current wording

Net revenue increased 2.3% to $1.3 billion and 2.2% to $2.6 billion during the three and six months ended June 30, 2024, respectively, compared to the same period in 2023.

Previous wording

Returned approximately $168 million of capital to stockholders through repurchases of common stock of $111 million and dividends of $57 million, funded by cash on hand.

Current wording

Returned approximately $190 million and $358 million, for the three and six months ended June 30, 2024, respectively, of capital to stockholders through repurchases of common stock and dividends, funded by cash on hand.

Previous wording

Received $40 million in cash in connection with Broadcast Music Inc.’s (“BMI”) sale to New Mountain Capital.

Current wording

Received $40 million in cash in connection with Broadcast Music Inc.’s (“BMI”) sale to New Mountain Capital in February 2024.

Previous wording

As of March 31, 2024, we owned, operated, programmed or provided sales and other services to 201 full power television stations and one AM radio station, including those owned by VIEs, in 117 markets in 40 states and the District of Columbia. The stations are affiliates of ABC, NBC, FOX, CBS, The CW, MyNetworkTV and other broadcast television networks. Through various local service agreements, we provided sales, programming and other services to 37 full power television stations owned by independent third parties, of which 35 full power television stations are VIEs that are consolidated into our financial statements. We also own a 75.0% interest in The CW, the fifth major broadcast network in the U.S., NewsNation, a national cable news network, two digital multicast networks, Antenna TV and REWIND TV, multicast network services provided to third parties, and a 31.3% ownership stake in TV Food Network. Our digital assets include 141 local websites, 279 mobile applications, 24 connected television applications, seven free ad-supported television channels representing products of our local television stations, The CW, NewsNation, The Hill and BestReviews, and a suite of advertiser solutions.

Current wording

As of June 30, 2024, we owned, operated, programmed or provided sales and other services to 201 full power television stations and one AM radio station, including those owned by VIEs, in 117 markets in 40 states and the District of Columbia. The stations are affiliates of ABC, NBC, FOX, CBS, The CW, MyNetworkTV and other broadcast television networks. Through various local service agreements, we provided sales, programming and other services to 37 full power television stations owned by independent third parties, of which 35 full power television stations are VIEs that are consolidated into our financial statements. We also own a 75.0% interest in The CW, the fifth major broadcast network in the U.S., NewsNation, a national cable news network, two digital multicast networks, Antenna TV and REWIND TV, multicast network services provided to third parties, and a 31.3% ownership stake in TV Food Network. Our digital assets include 142 local websites, 279 mobile applications, 24 connected television applications, seven free ad-supported television channels representing products of our local television stations, The CW, NewsNation, The Hill and BestReviews, and a suite of advertiser solutions.

Previous wording

In even-numbered years we generate substantial advertising revenue from the political advertising we sell to candidates, political action committees and political parties. Advertising revenue is also positively affected by certain events such as the Olympic Games or the Super Bowl. Advertising revenue is generally highest in the second and fourth quarters of each year, due in part to increases in consumer advertising in the spring and retail advertising in the period leading up to, and including, the holiday season. As 2024 is an election year, we expect an increase in political advertising revenue, a component of our advertising revenue, to be reported in 2024 compared to 2023.

Current wording

In even-numbered years we generate substantial advertising revenue from the political advertising we sell to candidates and non-candidate entities such as political action committees and political parties. Advertising revenue is also positively affected by certain events such as the Olympic Games or the Super Bowl. Advertising revenue is generally highest in the second and fourth quarters of each year, due in part to increases in consumer advertising in the spring and retail advertising in the period leading up to, and including, the holiday season. As 2024 is an election year, we expect an increase in political advertising revenue, a component of our advertising revenue, to be reported in 2024 compared to 2023.

Previous wording

The Company’s revenues increased 2% for the three months ended March 31, 2024 compared to the same period in 2023, primarily due to higher revenues from distribution and political advertising, partially offset by lower revenue from core advertising.

Current wording

The Company’s revenues increased 2.3% for the three months ended June 30, 2024, compared to the same period in 2023, primarily due to higher revenues from distribution and political advertising, partially offset by lower revenue from non-political advertising.

Previous wording

Distribution revenue increased by $33 million primarily due to the successful renewal of our distribution agreements in 2023 on terms favorable to us, scheduled annual escalation of rates per subscriber, and the return of our partner stations on one MVPD in January, partially offset by continued subscriber attrition. We anticipate a continued increase in retransmission fees until there is a more balanced relationship between viewers delivered and fees paid for delivery of such viewers.

Current wording

Distribution revenue increased by $38 million primarily due to the successful renewal of our distribution agreements in 2023 on terms favorable to us and scheduled annual escalation of rates per subscriber, growth in vMVPD subscribers, the addition of CW affiliations on certain of our stations, and the return of our partner stations on one MVPD in January, partially offset by continued MVPD subscriber attrition. We anticipate a continued increase in retransmission fees year over year until there is a more balanced relationship between viewers delivered and fees paid for delivery of such viewers, subject to trends in subscriber attrition or growth.

Previous wording

Advertising revenue decreased by $5 million, primarily due to a decrease in core and digital advertising revenue of $36 million due to ongoing advertising market softness offset, in part by an increase by $31 million in political advertising as 2024 is an election year.

Current wording

Advertising revenue increased by $11 million, primarily due to an increase in political advertising of $37 million as 2024 is an election year, offset in part by a decrease in non-political revenue of $24 million due to ongoing advertising market softness.

Previous wording

Direct operating expenses, consisting primarily of programming, news and technical expenses, and selling, general and administrative expenses increased by $8 million primarily due to increased news programming and promotional expense at NewsNation, partially offset by a reduction in restructuring costs at The CW.

Current wording

Direct operating expenses, consisting primarily of programming, news and technical expenses, and selling, general and administrative expenses increased by $22 million primarily due to increase in news programming, stock-based compensation expense from new restricted stock grants and the timing of restricted stock grants, direct digital operating, and various administrative expenses, partially offset by a reduction in restructuring costs at The CW.

Previous wording

Amortization of broadcast rights was $69 million for the three months ended March 31, 2024, compared to $129 million for the same period in 2023, a decrease of $60 million, primarily due to lower amortization of broadcast rights at The CW of $55 million to $52 million from $107 million.

Current wording

Amortization of broadcast rights was $87 million for the three months ended June 30, 2024, compared to $140 million for the same period in 2023, a decrease of $53 million, primarily due to lower amortization of broadcast rights at The CW of $49 million to $71 million from $120 million.

Previous wording

Depreciation of property and equipment was $45 million for the three months ended March 31, 2024, compared to $43 million for the same period in 2023 (no significant change).

Current wording

Depreciation of property and equipment was $46 million for the three months ended June 30, 2024, compared to $44 million for the same period in 2023 (no significant change).

Previous wording

Amortization of intangible assets was $76 million for the three months ended March 31, 2024, compared to $77 million for the same period in 2023 (no significant change).

Current wording

Amortization of intangible assets was $75 million for the three months ended June 30, 2024, compared to $78 million for the same period in 2023 (no significant change).

Previous wording

Income from equity method investments, net decreased by $6 million primarily due to a decrease in net income of TV Food Network, our largest equity method investment. TV Food Network’s net income decreased primarily due to a decrease in its advertising revenue. For additional information on our investment in TV Food Network, refer to Note 4 to our Condensed Consolidated Financial Statements.

Current wording

Income from equity method investments, net decreased by $16 million primarily due to a decrease in net income of TV Food Network, our largest equity method investment. TV Food Network’s net income decreased primarily due to a decrease in its advertising revenue. For additional information on our investment in TV Food Network, refer to Note 4 to our Condensed Consolidated Financial Statements.

Previous wording

The Company’s effective tax rates were 26.8% and 32.3% for each of the respective periods.

Current wording

The Company’s effective tax rates were 28.9% and 31.8% for each of the respective periods.

Previous wording

Changes in the valuation allowance resulted in a 4.2% decrease to the effective tax rate. Other permanent differences, including an adjustment for losses related to the minority interest in The CW, also resulted in a 1.2% decrease to the effective tax rate.

Current wording

For the three months ended June 30, 2024, changes in the valuation allowance resulted in a 2.0% decrease to the effective tax rate. Other permanent differences, including a reduction in losses related to the minority interest in The CW, resulted in a 2.8% decrease to the effective tax rate. This is partially offset by a decrease in the excess benefit from stock option exercises and restricted stock unit vesting in 2024 compared to 2023 which resulted in a 1.3% increase in the rate.

Previous wording

Depreciation and amortization expense decreased by $59 million, as follows:

Current wording

Depreciation and amortization expense decreased by $113 million, as follows:

Previous wording

Interest expense, net increased by $7 million, primarily due to increases in interest rates in the Company’s outstanding loans under its senior secured credit facilities, partially offset by decreases in interest expense from debt repayments.

Current wording

Interest expense, net increased by $9 million, primarily due to increases in interest rates in the Company’s outstanding loans under its senior secured credit facilities, partially offset by decreases in interest expense from debt repayments.

Previous wording

The Company is leveraged, which makes it vulnerable to changes in general economic conditions. The Company’s ability to repay or refinance its debt will depend on, among other things, financial, business, market, competitive and other conditions, many of which are beyond the Company’s control. The Company believes it has sufficient unrestricted cash on hand, positive working capital, and availability to access additional cash under its revolving credit facilities (with a maturity date of June 2027) to meet its business operating requirements and capital expenditures and to continue to service its debt for at least the next 12 months as of the filing date of this Quarterly Report on Form 10-Q. As of March 31, 2024, the Company was in compliance with the financial covenants contained in the amended credit agreements governing its senior secured credit facilities.

Current wording

The Company is leveraged, which makes it vulnerable to changes in general economic conditions. The Company’s ability to repay or refinance its debt will depend on, among other things, financial, business, market, competitive and other conditions, many of which are beyond the Company’s control. The Company’s primary sources of liquidity include cash on hand, borrowing capacity under its revolving credit facilities (with a maturity date of June 2027) and cash generated from operations. The Company believes these sources of liquidity are sufficient to meet its business operating requirements, its capital expenditures and to continue to service its debt for at least the next 12 months as of the filing date of this Quarterly Report on Form 10-Q. As of June 30, 2024, the Company was in compliance with the financial covenants contained in the amended credit agreements governing its senior secured credit facilities.

Previous wording

Net cash flows provided by operating activities decreased by $218 million during the three months ended March 31, 2024, compared to the same period in 2023. This was primarily due to an increase in uses of cash from (i) uses of cash related to timing of receipts and payables of $170 million, including prepaying fees associated with our TBA of KAZT-TV, (ii) a decrease in distribution from our equity investment in TV Food Network of $106 million, partially offset by a decrease in payments for broadcast rights of $66 million.

Current wording

Net cash flows provided by operating activities decreased by $227 million during the six months ended June 30, 2024, compared to the same period in 2023. This was primarily due to an increase in uses of cash from (i) timing of receipts and payables of $174 million, including prepaying fees associated with our TBA of KAZT-TV and (ii) a decrease in distribution from our equity investment in TV Food Network of $112 million, partially offset by a decrease in payments for broadcast rights of $52 million.

Previous wording

Net cash flows used in investing activities decreased by $32 million during the three months ended March 31, 2024, compared to the same period in 2023. This was primarily due to the proceeds received from disposal of an investment in connection with BMI’s sale to New Mountain Capital of $40 million, partially offset by an increase in capital expenditures of $8 million.

Current wording

Net cash flows used in investing activities decreased by $34 million during the six months ended June 30, 2024, compared to the same period in 2023. This was primarily due to the proceeds received from the disposal of an investment in connection with BMI’s sale to New Mountain Capital of $40 million, partially offset by an increase in capital expenditures of $4 million.

Previous wording

Net cash flows used in financing activities decreased by $69 million during the three months ended March 31, 2024, compared to the same period in 2023. This was primarily due to fewer shares of Nexstar common stock repurchased in the current year, or a decrease in stock buybacks of $65 million, offset by a $7 million increase in common stock dividends paid.

Current wording

Net cash flows used in financing activities decreased by $52 million during the six months ended June 30, 2024, compared to the same period in 2023. This was primarily due to fewer shares of Nexstar common stock repurchased in the current year, or a decrease in stock buybacks of $69 million and lower cash paid for shares withheld for taxes of $14 million, offset in part by a $17 million decrease in contribution from noncontrolling interests and a $14 million increase in common stock dividends paid.

Previous wording

From April 1, 2024 to May 8, 2024, we repurchased 275,532 shares of our common stock for $45 million, funded by cash on hand. As of the date of filing this Quarterly Report on Form 10-Q, the remaining available amount under the share repurchase authorization was $496 million.

Current wording

On July 26, 2024, Nexstar announced that its Board of Directors increased its share repurchase authorization by $1.5 billion. From July 1, 2024 to August 7, 2024, we repurchased 266,014 shares of our common stock for $46 million, funded by cash on hand. As of the date of filing this Quarterly Report on Form 10-Q, the remaining available amount under the share repurchase authorization was $1.9 billion.

Previous wording

As of March 31, 2024, the Company had total outstanding debt of $6.810 billion, net of unamortized financing costs, discounts and premium, which represented 74.6% of the Company’s combined capitalization. The Company’s high level of debt requires that a substantial portion of cash flow be dedicated to pay principal and interest on debt, which reduces the funds available for working capital, capital expenditures, acquisitions and other general corporate purposes.

Current wording

As of June 30, 2024, the Company had total outstanding debt of $6.781 billion, net of unamortized financing costs, discounts and premium, which represented 74.9% of the Company’s combined capitalization. The Company’s high level of debt requires that a substantial portion of cash flow be dedicated to pay principal and interest on debt, which reduces the funds available for working capital, capital expenditures, acquisitions and other general corporate purposes.

Previous wording

Based on covenant calculations as of March 31, 2024, all of the $530 million and $14 million in unused revolving loan commitments under the respective Nexstar and Mission senior secured credit facilities were available for borrowing.

Current wording

Based on covenant calculations as of June 30, 2024, all of the $531 million and $14 million in unused revolving loan commitments under the respective Nexstar and Mission senior secured credit facilities were available for borrowing.

Previous wording

As of March 31, 2024, we had outstanding standby letters of credit with various financial institutions amounting to $20 million. The outstanding balance of standby letters of credit is deducted against our unused revolving loan commitment under our senior secured credit facility and would not be available for withdrawal.

Current wording

As of June 30, 2024, we had outstanding standby letters of credit with various financial institutions amounting to $19 million. The outstanding balance of standby letters of credit is deducted against our unused revolving loan commitment under our senior secured credit facility and would not be available for withdrawal.

Previous wording

Excludes the assets and liabilities of The CW as it is not a guarantor of the 4.75% Notes, due November 2028 and 5.625% Notes, due July 2027. On September 30, 2022, Nexstar acquired a 75.0% ownership interest in The CW.

Current wording

Excludes the assets and liabilities of The CW as it is not a guarantor of the 4.75% Notes, due November 2028 and 5.625% Notes, due July 2027.

Previous wording

Excludes Issuer’s equity investments of $859 million and $958 million as of March 31, 2024 and December 31, 2023, respectively, in unconsolidated investees. These unconsolidated investees do not guarantee the 4.75% Notes, due November 2028 and 5.625% Notes, due July 2027. For additional information on equity investments, refer to Note 4 to our Condensed Consolidated Financial Statements.

Current wording

Excludes Issuer’s equity investments of $856 million and $958 million as of June 30, 2024 and December 31, 2023, respectively, in unconsolidated investees. These unconsolidated investees do not guarantee the 4.75% Notes, due November 2028 and 5.625% Notes, due July 2027. For additional information on equity investments, refer to Note 4 to our Condensed Consolidated Financial Statements.