Nexstar Media Group, Inc.

Nexstar Media Group owns and operates local television stations, NewsNation and a majority stake in The CW. It earns advertising revenue and fees from distributors that carry its programming. It also owns digital media businesses and an equity-method interest in TV Food Network. The company trades on Nasdaq as NXST and reports on a December 31 year-end.

Results and the changing business

TEGNA supplied $765 million of incremental revenue and $243 million of adjusted EBITDA. Political advertising reached $317 million, including a $163 million increase at legacy broadcast operations. Legacy nonpolitical advertising fell $18 million as political spending displaced some commercial ads and the market remained soft. Distribution growth also reflects higher rates and streaming subscribers, partly offset by traditional pay-TV subscriber losses.

Adjusted EBITDA removes interest, tax, depreciation, stock compensation and specified other expenses. Consolidated net income includes outside owners' results. Diluted EPS uses earnings available to common stockholders, after the accretion on redeemable interests in The CW.

Cash generation and earlier expectations

In August, chief executive Perry A. Sook expected strong second-half free cash flow. September operating cash of $680 million compared with $298 million in June, while adjusted free cash flow rose to $443 million from $238 million. The two quarters each include TEGNA for the full period.

Free cash flow deducts capital spending from operating cash. The adjusted measure also changes working capital, taxes, transaction expenses, pension items and other amounts. Working capital added $258 million of cash in September after absorbing $39 million in June. The first nine months produced $1.267 billion of operating cash and $1.154 billion of free cash flow after $113 million of capital spending; adjusted free cash flow was $1.101 billion.

Debt, liquidity and dividends

September consolidated outstanding principal was $11.527 billion, versus $6.361 billion at December 31 before the TEGNA transaction. The carrying amounts after financing costs, discounts and premiums were $11.409 billion and $6.333 billion. September cash was $446 million, versus $280 million at December and $218 million at June. Consolidated balances include independently owned Mission Broadcasting.

Nexstar repaid $350 million of debt during the third quarter and $786 million through September. Another $400 million on October 30 and $125 million on November 5 brought the year-to-date total to $1.311 billion. These paydowns are separate from the much larger financing cash-flow totals that include refinanced debt.

The reported first-lien net leverage ratio fell to 3.03 times from 3.21 in June; total net leverage fell to 4.04 from 4.22. The first-lien covenant ceiling is temporarily 4.75 times through December 2026, then returns to 4.25. The calculation excludes The CW and expected TEGNA savings. Nexstar reported compliance. Available revolving credit was $428 million at Nexstar and $13 million at Mission, subject to the facilities' terms.

Common dividends paid totaled $171 million in the first nine months. No shares were bought back under the program in that period, and $1.4 billion of existing authorization remained at September. On October 30, the board declared a $1.86 quarterly dividend payable November 27 to November 13 record holders.

Completed acquisition and remaining obligations

The TEGNA acquisition closed March 19. The equity and award purchase price was $3.657 billion, or $3.341 billion net of acquired cash; assumed debt was separate. An April preliminary injunction restricts further integration. Nexstar's report schedules appeal arguments for November 17, 2026, and trial for July 6, 2027. August results had already disclosed the trial timing and excluded expected savings from leverage calculations.

A commitment to divest six stations depends on whether the relevant ownership waiver remains necessary within the agreed two-year period. No buyer agreement had been executed at the report date.

The CW's minority owners exercised sale rights in August, and Nexstar deferred the exercise for a year. The estimated redemption value was $110 million at September, while the recorded redeemable-interest balance was $28 million. The owners may rescind at the end of the deferral period.

Nexstar's 31.3% TV Food Network stake had a $284 million book value and supplied $100 million of distributions in the first nine months, compared with $131 million a year earlier. Nexstar intends to renew the partnership agreement ahead of its December 31, 2026 specified dissolution date. Continued debt reduction, advertising after the election cycle and the outcome of the integration restrictions are the main developments to follow.