“Excluding political advertising revenue and reflecting our operation of recently acquired stations, third quarter station revenue grew 52.9%. In addition to the station revenue growth, Nexstar’s accretive M&A activity is accelerating our revenue diversification initiatives as reflected in the growth in total third quarter retransmission fee and digital media revenue which rose 82.0% to $35.6 million, and accounted for 28.3% of 2013 third quarter net revenue. By comparison, total third quarter retransmission fee and digital media revenue comprised 21.8% of net revenue in the year-ago period and 19% of net revenue in the 2011 third quarter.
“The rise in third quarter station direct operating expenses (net of trade expense) and SG&A primarily reflects higher variable costs related to the significant increase in national and local revenues and the operation of new stations, while corporate expense increased largely due to expenses associated with personnel costs, recently announced strategic transactions, and expenses related to various capital market activities completed during the period. We estimate there were approximately $0.9 million in non-recurring expenses in the third quarter associated with these items. Inclusive of these one-time expenses, third quarter 2013 BCF and adjusted EBITDA grew 17.3% and 18.0%, respectively. With our operating and financial management focus on generating free cash flow, third quarter 2013 free cash flow was up over four-fold from the third quarter of 2011, the previous non-political period, and by nearly 9% compared to last year.
“Consistent with our long-term strategic objective to identify and execute accretive transactions that expand our revenue, scale and operating base, during the third quarter Nexstar and Mission Broadcasting, Inc. (“Mission”) were active and successful in further building the platform for continued growth and the return of political advertising revenue in 2014. In September, we and Mission entered into definitive agreements to acquire five television stations in three new markets for total consideration of $103.25 million in transactions that are expected to be immediately accretive to Nexstar’s free cash flow in the first full year of operations following closing in early 2014.
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