Perry SookThank you, Mimi and good morning, everyone. Thank you all for joining us today to review Nexstar's fourth quarter and full year 2010 operating results. CFO, Tom Carter is also with me on the call this morning. And after our prepared remarks, we will be glad to open the call for your questions. As we entered 2010, we telegraphed everyone that we were positioned to return to growth and I think it's evident with the record results reported each quarter throughout this year and again this morning, that Nexstar has exceeded that promise. Nexstar's industry-leading growth of this past year is directly attributable to our significant revenue diversification initiatives and our focus on free cash flow. And our fourth quarter earnings represent the highest quarterly level of revenue and cash flows in the company's history. The efficacy of our revenue diversification strategies and our expense management disciplines has been borne out in comparison in 2010 fourth quarter net revenue to that of the same period of 2008, which was a Presidential election year. Comparing these periods, we grew net revenue by approximately 21% while our cash flow growth measured by BCF, EBITDA and free cash flow grew by multiples over that same time. We refer to our quadruple play of revenue drivers and our success in driving profitable revenue growth, reflects our strength of our core local content. It also reflects our initiatives to develop distribution and digital extensions for our core content, including the creation of new online, text and mobile content and applications. And the benefit derived from leveraging our management team to provide services to other broadcasters. Strengthened core television advertising trends, which began for Nexstar in the 2009 fourth quarter is continuing here in Q1 of 2011. And we are well-positioned to further grow all of our non-political revenue sources throughout this current year.
Before we dig deeper into Q4, I want to follow-up on my statement of a moment ago of managing for free cash flow, with a quick review of our phenomenal growth on this metric since our 2003 IPO, taking into consideration the two-year political cycles. For the two-year 2003-2004 period, we generated a total of $30.9 million in free cash flow. In the '05, '06 two-year period, that figure grew rose to $41.8 million. In 2007, '08, our free cash flow totaled $54.3 million. And with the results reported this morning, our combined 2009-2010 free cash flow grew to $79.6 million. That, by the way, is an average of $1.40 per share. That's a 46.6% growth over the last two-year cycle. And looking at it on a compound annual growth basis for this two-year period going back to our IPO, our free cash flow compound annual growth rate is 37%.This, of course, was accomplished despite the 100-year drought year of 2009 and I'd like to add that we've managed our growth over this period without diluting our equity base, which stands at about 28.4 million shares, which is more or less exactly the same as when we completed our IPO. Now getting back to our fourth quarter. Nexstar strategy is for building new-to-television local direct billings and the overall advertising recovery drove a fifth consecutive quarter of core television advertising revenue growth. Our gross local and national television ad revenue growth was 2.8%. That follows a 7.2% growth in last year's fourth quarter and was achieved even as we allocated significant inventory to political ad spend. In total, gross television ad revenue, inclusive of political advertising, was up 31.8% to $85.9 million. That represents 515% growth in political ad spend to approximately $22.6 million as our Nexstar stations continue to garner leading shares of political ad spend in our market space on the strength of our local news content.
The resurgence in automotive advertising continued in Q4 with category revenue rising 16% year-over-year, reaching the highest quarterly dollar total in 2010 in Q4, even again, as we manage our inventory to book our record political revenue.Read the rest of this transcript for free on seekingalpha.com