Hearst Argyle Television — 11th Annual Deutsche Bank Securities Media Conference (June 2003)
31 slides from Hearst Argyle Television's conference presentation, Jun 3, 2003
Slide 1: Hearst-Argyle Television, Inc.
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Slide 2: Forward-looking statements
www.hearstargyle.com This presentation contains forward-looking statements that.are subject to Hisks and uncertainties. Forward looking statements include information preceded by, followed by, or that inctudes the words “believes,” “Expects,” “anticipates,” “could,” or similar expressions, For these
Slide 3: Today's Discussion
Today’s Discussion * David Barrett, President & CEO — The New Regulatory Landscape — HTV’s Vision and Priorities = Upfront, Industry Outlook * Harry Hawks, Executive Vice President & CFO = The “Business Cycle” — The Strength of HTV’s Capital Structure — Guidance
Slide 4: The New FCC Rules on Media Concentration
The New FCC Rules on Media Concentration 1. National TV Ownership Limit: — Cap Increases from 35% to 45% 2, Dual Network Ownership Prohibition: = Continued Prohi ion on Mergers Among Any of the Top-4 National Broadcast Networks
Slide 5: The New FCC Rules on Media Concentration (cont'd)
The New FCC Rules or Media Concentration (cont’ 3. Cross-Media Limits (CML): In Markets with 3 or Fewer TV Stations, Cross-Own Between TV, Newspaper and Radio ts Not Permitted In Markets with 4 to 8 TV Stations, Combinations Are Limited to One of the Following: a) A Daily Newspaper, One TV Station,
Slide 6: New Market Opportunities Due To De-reg
New Market Opportunities Due To De-reg Newspaper/TV Cross Ownership Tv/Duopoly Market Rank Market Rank San Francisco 5 Boston* 6 Houston 1 Pittsburgh 21 Seattle 12 Baltimore 24 St. Louis 22 Cincinnati 32 San Antonio 37 Louisville 50 Albany 55 Des Moines 72 Omaha 78 Kansas City 33 *Triopoly
Slide 7: Add to Existing Opportunity
Add to Existing Opportunity Market Tampa Sacramento Orlando Milwaukee Greenville West Palm New Orleans Oklahoma City Winston Salem Lancaster Albuquerque Honolulu Rank 13 19 20 31 35 39 42 45
Slide 8: Markets With No Opportunity
Markets With No Opportunity Market Rank Jackson 89 Plattsburg 91 Ft. Smith 108 Monterey 120
Slide 9: HTV Strategic Balance Sheet
HTV Strategic Balance Sheet Core Execution 2 Growth & Adaptation + News Leadership . Investments & Joint + Syndicated Programming Ventures & Alliances + Network Partnership + Deregulation Opportunities ¢ Financial Stewardship + Local Media Expansion * Communication * Substantial FCF + Engineering &
Slide 10: Markets Covered
MARKETS COVERED Albuquerque ‘Anta Bakersfield Baltimore Birmingham Boston Charlotte Chicago Cincinnati Cleveland Columbus Dallas Dayton Denver Des Moines Detroit EI Paso Fort Smith Greensboro Greenville Hartford Honolulu Houston Indianapolis. Jackson, Jacksonville Johnstown, PA Kansas City Lancaster
Slide 11: Slide 11
Slide 12: Strong Platform for New Programming: Syndication Partnership
Strong Platform for New Programming: she Syndication Partnership « Our NBC Production/ Syndication Venture Gives Us * Greater Control Over Programming and Costs; + Potential Syndication Profits; + Stronger Network-Affiliate Partnership * “John Walsh”: Highest-Rated New Syndicated Talk Show of 2002-2
Slide 13: Our Commitment to Political News Leadership
_ Our Commitment to Political News Leadership Has Earned Credibility with Audiences
Slide 14: HTV Stations Receive Major Political Advertising
HTV Stations Receive Major Pol News Leadership — as Exemplified by Commitment 20 & 2004 — and Leading Roles within Thel Communities Major Local Political Advertising is Virtually Uni Broadcast News Outlets, Causing Unusual! Cyclicality for. Top TV Broadcasters Political Advertising Validates the Pow
Slide 15: 2004 Political Campaigns Are In Preparations Today
2004 Political Campaigns Are In Preparations Today Presidential Race — January: lowa Caucuses; New Hampshire Primary — February: South Carolina Primary; Missouri) Primary — Heavy activity expected in HTV “swing states” of Florida, Missouri, Pennsylvania, Ohio, in addition to other HIV states, i-e.,
Slide 16: Strong Upfront Ad Market
Strong Upfront Ad Market Record $13.1 Billion Aggregate Broadcast Network Upfront* — Up 9% Over 2002 CPM Gains of as Much as 22% = A Generally Favorable Response to Fall Program Lineups = Indicative of Tightening in Pricing — Affirmation of Medium’s Effectiveness This Time, Auto Spending Was Not the
Slide 17: Executive Vice President & CFO
Executive Vice President &
Slide 18: A Suggested Perspective on the Length of the Business Cycle
A Suggested Perspective on the Length of The “Business Cycle” Understanding our normal business cycle and our strategic planning horizon may influence one's assessment of the core strength of our assets and, ultimately, one’s investment thesis - influencing one’s view of the appropriate investment h
Slide 19: Two Major Categories of Revenues on an Even- and Odd-Year Cycle
At Least Two Major Categorie: On An Even- and Odd-Year Revenues” 90 $ millions 80 70 60 50 40 1996 1997 1998 1999 2000 2001 2002 (non-GAAP) Olympics m Political
Slide 20: Evaluate The Strength of Our Industry And HTV Over a Complete Cycle
Evaluate The Strength of Our Industry And HTV Over a Complete Cycle * Closer review of business cycle suggests a two year look and, ideally, a four year perspective is most enlightening because: — Political: » One complete presidential term » One interim election cycle — Olympics: » One winter Olymp
Slide 21: Various Determinants of Value
Various Determinants of Value While dozens of attributes, qualities and metrics contribute to the assessment of appropriate valuation, the current debate of non-GAAP measures (such as. EBITDA) vs. GAAP measures (such as earnings and cash flow from operations), especially in light of Regulation G, de
Slide 22: Free Cash Flow, While Non-GAAP, Does Have Relevance
“Free Cash Flow” (FGF), While Non-GAAP, Does Have Relevance ($ In Millions Except Per, Share Data) 2002 -2001_—«2000 1999 EBITDA 1) $310.1 $245.2 $345.5 $287.5 less: CapEx @) $ 25.9 $ 32.3 $ 32.0 $ 524 Interest, net @) 70.5 96.7 111.8 103.7 Cash taxes 4) 18.4 5.0 30.5 36.2 Dividends «) 16.4 1.9 14 1
Slide 23: Compare Various Measures To Determine The Quality of Earnings
Compare Various Measures To Determine The Quality of Earnings (§ In Millions Except Per Share Data) 2002: 2001_~—S=s2000— 1999 Operating Cash Flow (EBITDA)* $ 310.1 § 245.2 $ 345.5 $ 2875 Cash Flow from Operations (1) $ 205.4 $ 165.9 $ 1893 $ 138.9 Free Cash Flow* $ 178.9 $ 109.3 $ 1698 $ 93.8 Net I
Slide 24: A Healthy Capital Structure is a Strategic And Competitive Advantage
A Healthy Capital Structure is a Strategic And Competitive Advantage Recognized As Having One of fie Best Capital Structures in the Industry, HTV Has Placed A Priority on Flexibility, Liquidity, investment Grade Status And Continued Access To Capital
Slide 25: Our Healthy Capital Structure Provides Flexibility
Our Healthy Capital Structure Provides Flexibility To Capitalize On Opportunities ($ In Millions). 3/31/03 12/31/02 @ MKT Gi @ MKT (1 Long-Term Debt $ 9443 $ 973.4 Redeemable Convertible Preferred 200.0 200.0 Preferred Stock 183 20.2 Common Stock (1) 2,081.9 2,078.2 Total Mkt. Capitalization $ 3.244
Slide 26: Solid Track Record of Debt Reduction
Solid Track Record) of Debt Reduction: More Than $700mm Paid Down Since @1799 (In Thousands) $1,700 $1,500 Leverage" en @ 3/31/03: 3.1X $4,100 ; $900 PP PP SS SO SF Sh gh Gh gh gh Gh Gh Gh S SP Pgh gh gS Sh hr Sos ee Se SY ee eek o Pk MHP HN a Pk oh “Leverage ratio defined as total debt excluding Co
Slide 27: Encouraging Trends In Float, Trading & Liquidity
Encouraging) Trends In Float, Trading & Liquidity Growth in Float And Market Value Growth in Average Daily Volume and Market Value 60 00 60 00 " «ao 6 0 70 2 a0 1" a ‘ 20 20 7 20 al tio of Decss Dec) «= MBee da Mar Decsa Decdd« Dec OG Mar @®ioat in millions of shares) (30-Day Average Daily Vol. in c
Slide 28: Expense Guidance for 2003
Expense Guidance for 2003 (As Updated on May 2) Salaries, benefits, other operating costs; + 1% to 2% (business insurance, health, welfare and benefits expenses, etc) Amontization of Program Rights: + 4% ( “Oprah, "Dr. Phil”) Depreciation & Amortization: @ $45 million Corporate, general and administ
Slide 29: Revenue Pacing Update
Revenue Pacing Update April Actual: +1% May Projection: -2% No June Guidance Q2 2002 Political Revenues were $8.i1mm
Slide 30: Reconciliation of Non-GAAP Measures (Cont'd)
Footnote: Reconciliation of Non- GAAP Measures (Cont'd) Operating income ‘Add: Depreciation ard anorization. Aad: Awortizationof program rights Less: Program payments Operating cashflow Less: Inerest expense, net(2). Less: Dividends Less: Capital expenditues Less: Cash pad for taxes, net of refs Fre
Slide 31: Hearst-Argyle Television, Inc.
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