Nexstar Media Group, Inc. (NXST) Q3 2020 Earnings Call Transcript @themotleyfool #stocks $NXST

Transaction expenses will be approximately $30 million for the fourth quarter. Operating cash taxes are expected to be approximately $133 million in Q4, and we’re still expecting operating cash taxes between $240 million and $250 million for the year. Fourth quarter capex should come in at approximately $37 million, with our full year expectation unchanged at approximately $160 million. The investment related to the launch of News Nation on September one came in as expected, and we have prioritized capital expenditures to maintain maximum financial flexibility in the current environment. Finally, we expect Nexstar’s cash interest expense to be approximately $7 million — $70 million for the fourth quarter and $320 million for the full year, reflecting the interest rate savings related to the decline in LIBOR and the aforementioned refinancing of some of the senior notes. Turning to the balance sheet. Reflecting the capital markets transactions noted at the beginning of my comments and the $162.5 million of debt reductions in Q3. Nexstar’s outstanding debt at September 30 was $7.88 billion and consisted of approximately $5.1 billion in first lien term loans with a balance in two senior sub notes — sorry, senior note issuances the 5.625%, which is approximately $1.8 billion and the new 4.75%, which is $1 billion face amount. Total net debt amounted to approximately $7.5 billion, as I mentioned before, compared to $8.3 billion at 09/30/2019. Net debt for the first lien covenant purposes was $4.9 billion, with net cash limited to $200 million. Our net lien first covenant — our net first lien covenant ratio at 09/30 was approximately 2.69 compared to 3.52 at year-end ’19, which is well below our first lien covenant of 4.25. As a reminder, our first lien covenant permits netting of cash to a maximum of $200 million at any time.

Our total net leverage at quarter end was approximately 4.11 compared to 5.18 at year-end 2019. As a reminder, Nexstar’s only meaningful financial covenant is our first lien debt, which is the aforementioned 4.25 times. At the onset of the pandemic, Nexstar took immediate actions to adapt our business to operations in the current environment and to preserve liquidity in order to best position the company for long-term success as we return to normalized operations. In this regard, we continue to prioritize cash retention and ended Q3 with approximately $410 million of cash on hand and approximately $200 million available under various revolving credit facilities. At the same time, during the quarter, we returned $150 million to shareholders through the repurchase of 1.3 million of Class A shares and through our quarterly cash dividend payment of approximately $25 million. We also made the aforementioned $162 million in debt repayments during the quarter. As reflected by the new revolver in the 4.75% bond issue. During the first nine months of 2020, we have actively managed our capital structure, cost of capital and liquidity position to support our business and enhance shareholders’ returns. Year-to-date, we have allocated approximately $1.1 billion to our shareholder value creation opportunities including approximately $800 million in debt reductions, $75 million in debt — in dividend payments and $200 million in share repurchases.

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