Nexstar Media Group (NXST) Q4 2015 earnings summary

Executive summary

• Fourth consecutive year of record results; FY15 net revenue rose 42.0% to $896.4m, driven by acquisitions and higher retransmission revenue.

• Free cash flow reached $208.2m, up 30.4% YoY; free cash flow per share was ~$6.70, up 29% from 2014.

• Local programming and digital growth, acquisition integration, retransmission renewals, and cost controls supported the strategy; 2016 was projected as a fifth consecutive record-results year.

Financial highlights

• Operating income was $206.1m versus $173.2m in 2014; net income attributable to Nexstar Broadcasting Group, Inc. was $77.7m versus $64.6m.

• Diluted EPS was $2.42 versus $2.02; declared dividends were $0.76 per share for 2015.

• Broadcast advertising revenue, including local, national, and political, increased 18.1% to $535.6m; retransmission revenue rose 92.3% to $298.0m.

• Digital revenue grew 92.5% to $89.9m; broadcast cash flow increased 29.7% to $350.0m and Adjusted EBITDA rose 30.0% to $305.1m.

• Excluding trade and barter, operating cash flow was $197.3m; Adjusted free cash flow was $208.2m, versus $159.7m in 2014.

Outlook and guidance

• Management expected a fifth consecutive year of record financial results in 2016, citing visibility on growth in distribution, digital, and political revenue.

• The Media General merger was expected to close late Q3 or early Q4 2016, subject to shareholder votes, FCC and other regulatory approvals, and customary conditions.

• Following the merger, the combined entity was projected to generate annual revenue above $2.3bn, operate 171 full-power stations in 100 markets, and reach nearly 39% of U.S. TV households.