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Media General Management Discusses Q2 2012 Results - Earnings Call Transcript

Tampa Tribune and its associated print properties were our only newspapers not included in the sale. We're in discussions with prospective buyers for our Tampa print properties and associated websites, and we believe the sale of these properties is probable, although we can't provide a definitive timetable today.

All Media General newspapers are shown in our financial presentation as discontinued operations as our Professional Communications Systems, a broadcast equipment company that ceased operations in the second quarter, and DealTaker.com, whose assets were sold to a private buyer for a nominal amount.

Let me now review our operating results for the second quarter of 2012, which reflect our performance as a pure-play television broadcaster with associated digital products and services. We're pleased to be focused on our higher-margin Broadcast television business with its attractive economic model fueled by revenue growth, including Political, retransmission and digital revenues. Our stations have done an excellent job capitalizing on the event-driven revenue opportunities of this year.

Operating income of $16.4 million compared with $6.2 million last year. Primary driver of the increase was 17% growth in total revenues, which were $84 million in the quarter. Core time sales, excluding Political, grew 4%. Spending by automotive advertisers, our largest category, increased 26.5% from last year. Other top 10 advertising categories that grew in the quarter were professional services, home improvement, medical and grocery. Top categories showing declines included restaurants, department stores, furniture, entertainment and telecommunications. Local time sales accounted for 2/3 of our core business and increased 4.4% in the second quarter. National time sales grew 3%.

Political revenues totaled $7.5 million compared with just under $600,000 last year. This quarter's Political revenues reflect the spending by both presidential campaigns, PACs, Super PACs, the Massachusetts senate race and congressional primaries in Virginia and South Carolina.

We have 6 stations in 4 key presidential ballot round states: Florida, Ohio, Virginia and North Carolina. We also anticipate highly contested level -- state-level races, including a gubernatorial race in North Carolina and senate races in Virginia, Florida, Ohio and Massachusetts. PAC and issue spending are difficult to be -- or expected to be significant as well, although these categories are difficult to forecast, but typically garner above market share of Political revenues as a result of advertisers seeking out our highly rated newscasts and other programming.

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