DEUTSCHE BANK LEVERAGED FINANCE CONFERENCE

Transcription

1 THE E.W. SCRIPPS COMPANY DEUTSCHE BANK LEVERAGED FINANCE CONFERENCE OCT. 2, 2018

2 Disclaimer Frward-Lking Statements Certain statements in this cmmunicatin may cntain frward-lking statements within the meaning f the Private Securities Litigatin Refrm Act f Statements that are nt histrical in nature and which may be identified by the use f wrds like believe, prject, expect, anticipate, estimate, intend, strategy, future, pprtunity, plan, may, shuld, will, wuld, will be, will cntinue, will likely result, and similar expressins, are frward-lking statements. These frward-lking statements are based n management's current expectatins, and are subject t certain risks, trends and uncertainties, including changes in advertising demand and ther ecnmic cnditins that culd cause actual results t differ materially frm the expectatins expressed in such frward-lking statements. Such frward-lking statements are made as f the date f this cmmunicatin and shuld be evaluated with the understanding f their inherent uncertainty. A detailed discussin f principal risks and uncertainties which may cause actual results and events t differ materially frm such frward-lking statements is included in the cmpany s Frm 10-K n file with the SEC in the sectin titled Risk Factrs. The cmpany undertakes n bligatin t publicly update any frward-lking statements t reflect events r circumstances after the date the statement is made. 2

3 Scripps Is One Of The Natin s Largest Lcal Bradcasters And Owns Cntent Brands With Natinal Scale Lcal Media Attractive statin prtfli Presence in 26 markets, including recent Raycm acquisitins Reaches ne in five TV husehlds Affiliatins with all the Big Fur netwrks Natinal Media Fast-grwing, audience-targeted brands Natinal reach and scale, with pprtunity t cntinue t braden distributin Mving frm direct respnse t mre lucrative general-market advertising t drive revenue grwth and prfitability 3

4 We Have A Cmprehensive Grwth Strategy 1 Cmplete rerganizatin f Scripps businesses accrding t the marketplaces they serve: Lcal and Natinal 2 Pursue bradcast scale as well as in-market cnslidatin 3 Reduce crprate and Lcal Media cst structures t yield mre than $30 millin in annual savings and enhance bradcast cash flw 4 Execute sale f radi business t further ptimize ur prtfli 5 Invest t fully capture the ptential in ur Natinal Media businesses, which we see as a lng-term grwth engine with significant pprtunity fr value creatin Deliver value t sharehlders thrugh prudent capital allcatin and strategic decisin making, including the recent initiatin f a quarterly dividend 6 4

5 THE E.W. SCRIPPS COMPANY Our Rerganizatin Reflects Hw Audiences And Advertisers View Our Businesses LOCAL MEDIA BRANDS NATIONAL MEDIA BRANDS Highly attractive statin prtfli Presence in 26 markets Twenty-three percent f statins in the tp 25 markets Reaches ne in five U.S. TV husehlds 26 netwrk affiliates; fur duplies Fast-grwing, audience-targeted media brands that reach audiences acrss multiple platfrms Stitcher/Midrll is the natin s leading pdcast cmpany Newsy is a millennial-fcused news netwrk distributed thrugh OTT and pay-tv platfrms The Katz netwrks are the leading prtfli f multicast netwrks, and each reaches at least 90 percent f U.S. TV husehlds 5 5

6 LOCAL MEDIA Additinal Lcal Media Scale Culd Be Valuable T Strengthen Our Cmpany s Fundatin Scale is increasingly imprtant in the lcal bradcast landscape. New TV wnership regulatins allw us t get strnger by acquiring secnd netwrk affiliates in existing markets. We als culd add statins in ther markets t strengthen the cmpany and blster revenue and cash-flw generatin. 6

7 Cst Initiatives Are Creating A Strnger, Leaner, Higher-Perfrming Cmpany Cst Savings Initiative Will Create A Strnger, Mre Nimble Scripps Segment Savings Estimate 1. Cst reductins will prvide a meaningful bst tward gal f margin and cash flw imprvement 2. Rightsizing the cst structure will imprve perating perfrmance and enhance bradcast cash flw 3. We expect t realize $20 millin in 2018 and the full $30 millin by 2019 Lcal Media Natinal Media Crprate $20 millin $3 millin $7 millin ~$30 millin Annual cst savings Ttal savings $30 millin 7

8 We Expect Cntinued Margin Expansin As We Scale Our Natinal Media Brands The Grwth Path Fr Our Natinal Media Segment 1. Create cntent that draws key target demgraphic grups 2. Grw natinwide scale and audience reach 3. Cnvert significant inventry frm direct-respnse advertising t mre lucrative general-market advertising 90%+ U.S. husehld reach by Katz netwrks 40 millin Newsy subscribers expected by end f millin mnthly pdcast listeners expected in % f U.S. listens t pdcasts mnthly 8

9 We Take A Balanced Apprach T Allcating Capital Lcal Media Acquisitins Uses Of Capital Cash And Debt McGraw-Hill: Fur ABCs; five Aztecas Cash n hand: $126 millin Granite: One ABC; ne MyNetwrk t frm Detrit duply Jurnal: Fur ABCs, tw FOXs, tw CBSs, tw NBCs, ne CW, ne MyTV Raycm: Tw ABCs Natinal Media Acquisitins Lcal Media Acquisitins 58% Return f Capital 12% 4% Share Repurchase Special Dividend Net debt: $567 millin Liquidity: $275 millin Share Repurchases In August 2018, we executed an accelerated share repurchase prgram fr $25 millin and reduced ur share cunt by abut 1.5 millin. Katz: fur natinal multicast netwrks Newsy: natinal news netwrk The accelerated plan fell under the bard s current $100 millin authrizatin. Stitcher/Midrll: pdcast industry leader Other select acquisitins 26% Natinal Media Acquisitins Dividends In February 2018, we intrduced a regular quarterly dividend f 5 cents per share. We paid a $60 millin special dividend at the clsing f the Jurnal transactin in

10 We Maintain A Strng Balance Sheet With A Path T De-Levering Scripps Is Mdestly Levered On path t under ~3.0x net leverage by year-end x 10

11 A Clser Lk at the Scripps Businesses 11

12 Our Cmprehensive Operating Strategy Fr Lcal Media Centers On Margin Imprvement In Lcal Media, we are fcused n creating the strngest prtfli t maximize bradcast cash flw by ensuring: Rbust viewership, with mre than 50 percent f Americans seeking ut TV news every week and the lin's share f primetime viewing n the Big Fur netwrks Retransmissin revenue grwth that captures ur full value frm cable and ver-the-tp TV prviders Distributin f ur lcal brands n ver-the-tp platfrms with strng ecnmics Onging grwth in plitical advertising revenue, with Scripps dedicated sales ffice helping us grw plitical margins Prtfli imprvement thrugh in-market cnslidatin as well as adding scale t ur bradcast ftprint 12

13 Our Cable/Satellite Retransmissin Revenue Cntinues Meaningful Grwth Next Year And Beynd Scripps Retransmissin Revenue Trajectry 1 $ In millins $221 $259 $148 $67 $ Abut 2 millin f ur 17 millin cable husehlds step up frm lw r $0 rates t new Cmcast rates n Jan. 1, , 2014 and 2015 figures are pr-frma fr acquisitin f Jurnal, which d nt necessarily reflect histrical results and are nt necessarily indicative f future results. 13

14 Scripps Televisin Statins Are Playing A Leading Rle In the 2018 Electins Scripps recently guided t a mre than 50 percent increase in its 2018 plitical ad revenue ver the $75 millin it garnered in

15 Our Cmprehensive Operating Strategy Fr Natinal Media Fcuses On Grwing Audience And Revenue In Natinal Media, we are creating value by seizing the pprtunities we see with the evlving habits f media cnsumers including: Fcusing Newsy and the Katz netwrks n the future f televisin thrugh ver-the-air, ver-the-tp, cable and satellite Our leadership in the fast-grwing pdcasting and n-demand audi ecsystem thrugh Stitcher/Midrll Onging high-grwth-business margin expansin 15

16 Our Natinal Brands Represent The Fastest-Grwing Segment Of Our Business Q Revenue Grwth Over Q Percent 35 Percent 21 Percent 16

17 The Fast-Grwing Katz Netwrks Leverage Target Audiences T Attract A Brad Natinal Ad Base Multicasting takes advantage f the grwth in the ver-the-air marketplace. Katz is the multicasting industry leader, with great audience resnance and advertiser relatinships. Reaching 90 percent r mre f the cuntry, each netwrk has natinal distributin and scale. The netwrks are fur f nly seven that are Nielsen rated. Katz s natinwide reach gives Scripps a new revenue stream with natinal advertisers targeting these audiences. 17

18 Newsy Is A Fast-Grwing News Netwrk Operating In Multiple Valuable Marketplaces Newsy has jurnalists arund the cuntry reprting fr its 24-hur news channel n multiple platfrms We are nearly fully deplyed n all the majr ver-the-tp and ther internet-delivered televisin services Newsy is n track t be in 40 millin cable husehlds by year end Newsy is executing a multi-platfrm strategy, including cable, with an efficient cst structure Newsy's OTT and cable marketplaces have barriers t entry and multiple revenue streams 18

19 Stitcher/Midrll Is A Leader Acrss All Parts Of The Pdcast Ecsystem CONTENT CREATION MONETIZATION DISTRIBUTION Pdcasting Is A Rapidly Grwing Media Marketplace MONTHLY LISTENERS HAVE LISTENED AWARE UNAWARE MONTHLY LISTENERS HAVE LISTENED AWARE UNAWARE Surce: Edisn Research *Midrll prjectin millin millin millin millin * 25 percent f U.S. listens t pdcasts mnthly Stitcher Is A One-Stp Shp Fr Advertisers Seeking T Reach Yunger Listeners 19

20 Chapter 6 Cnclusin: Scripps Is Well-Psitined T Create Meaningful Shrt-Term And Lng-Term Grwth And Strng Cash Flws Rerganized business and right-sized cst structure t capture value in the shrt term Diversified revenue streams and business mdels t strengthen ur fundatin fr lng-term success Leadership team cmmitted t executing strategy Strng cash flw with quick path t de-levering 20

21 THE E.W. SCRIPPS COMPANY DEUTSCHE BANK LEVERAGED FINANCE CONFERENCE OCT. 2, 2018