Jefferies 2013 Global Technology, Media and Telecom Conference
Safe Harbor
This presentation includes statements that constitute "forward-looking statements," including statements regarding our future plans and strategies. Forward-looking statements inherently involve risks and uncertainties, including, among other factors, general economic conditions, demand for advertising, competition for audience and programming, government regulations and new technologies, that could cause our actual results to differ materially from the forward-looking statements. Factors that could contribute to such differences include the risks detailed in our periodic reports filed with the Securities and Exchange Commission. Reports may be accessed online at www.sec.gov or www.linmedia.com. By making these forward-looking statements, we undertake no obligation to update these statements for revisions or changes after the date of this presentation.
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Record Results in 2012
▲ Record revenue, EBITDA & margin Strongest Balance Sheet Since ▲ Largest acquisition in company history Going Public in 2002
▲ Unprecedented political revenues 2008 2012 Net Debt $723.2 $843.9 ▲ New retrans agreements for almost half of LIN’s pay TV subs EBITDA $123.4 $218.7
▲ Record interactive revenue & Interest Expense $54.6 $46.7 contribution to total revenue Leverage Ratio 5.9x 3.3x
▲ Issued notes at lowest cost of Interest Expense 2.3x 4.5x borrowing on company record Coverage Ratio Equity Market $56.1 $407.6 ▲ Total year-end debt leverage 3.3x, Capitalization lowest level in nearly a decade
▲ Developed a plan to resolve NBC JV
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Executing our Strategy in 2013
M&A – Integrating & Maximizing Benefits Summary of Q1’13 Results
ü All 10 acquired/serviced TV stations transitioned to LIN’s Ø Revenue +37% vs PY news, sales and digital platforms (+4.1% on same-station ü Hired DSDs in 6 mkts; all selling LIN Digital basis) ü Upgraded research capabilities Ø Core -2.4% on same-station
Building & Differentiating Digital Business basis; mixed economic signals – fragile in many ü Two new digital acquisitions – HYFN & Dedicated Media markets ü LIN Mobile – leveraged LIN Digital to develop mobile creative solutions; integrated ads into TV app platforms Ø Retrans & Interactive Operational Excellence Across Multiple Platforms revenues more than offset softness ü 68% of Big-4 news stations ranked #1 or #2 in their markets(1) for ratings Ø Interactive revenues +29% ü 100% of measured web sites & mobile apps ranked #1 or vs PY #2 for unique visitors vs local broadcast competitors(2)
1 Average of LIN Media’s February 2013 Nielsen ratings based on Key Demographics. Monday‑Friday, Early Morning, Early Evening, Late News. All Nielsen data included in this presentation represents Nielsen’s estimates, and Nielsen has neither reviewed nor approved the data included in this presentation. 2 comScore media and mobile metrix data; March 2013 (3 month average). The basis for comparison is calculated against the Company’s and local media competitors’ self-defined classification from within the comScore dictionary, excluding the television stations acquired from New Vision Television in October 2012 as sites were not launched until Q2 2013. 4
Our Expanded Footprint
Corporate LIN Markets New Markets Offices Digital Sales Tech Centers
7 New Markets & 4M HH Expanded Shared Services & Tech Centers
Digital Sales HQ & LIN Mobile
2 New Digital Acquisi ons
Opened 3rd Tech Center 5
Meaningful Actions to Diversify Revenue
2008 2012
Digital 2% Digital Political 10% 10% Political Other 14% 8%
80% Other 60% 16%
TV Ad Revenue Reduced from 80% of Total in 2008 to 60% of Total in 2012
Notes: Digital includes TV sta on web sites in 2008 and TV sta on web sites, LIN Digital and Nami Media in 2012 Other includes retransmission fees, network compensa on, barter and other miscellaneous. All amounts on a same-asset basis. 6
Unified Media Solutions ‘Under One Roof’ Ø We utilize any combination of our multiplatform products to develop customized campaigns that reach target audiences & generate results
Local Digital ! Television! Media!
Targeted Email Market- Unique local Websites leading news programming Top-rated Video SMS/Text syndicated Mobile programs
We are Building Deeper Relationships with Advertisers By Offering Innovative Local Opportunities
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LIN Digital Media – Gaining Share of Wallet
Ø 37 billion – 2012 US digital Marke ng Services advertising dollars; +15% Ø Performance Marketing Ø Planning & Buying Ø 65% digital marketing now Ø Display & Rich Media performance-based Ø Video Ø Search Ø 137 million total smartphones Ø PPC in US Ø Tier I, II, III Agency & Direct Clients & Publishers Ø Proprietary technology identifies, engages, clean Ø 58% Internet users that are audiences mobile users Ø “Target-ability” = ROI Mobile Ø 1 in 8 total page views from mobile devices Ø Premium Publisher Relations & Inventory Ø Creative & Delivery Ø Reporting & Analysis Ø 17% of 2013 US digital ad Ø Client Real-time Dashboard spending to be mobile Ø Mobile ROI
Ø 27% of consumer time spent Social Media on social networks Ø Platform-Agnostic Ø Creative, Development & Implementation Ø 11 billion – social media Ø Facebook Preferred Developer (one of few w/ multiple advertising revenue by 2017 badges) Ø Social App, Game, e-Commerce & Advertising
300+ AEs presen ng a diversified suite of marke ng/adver sing solu ons for every screen – na onal, regional and local 8
Subscriber Fees SNL Kagan Retrans Analysis – 4Q’12
Ø Q4’12 Avg. $.47/sub; +$.13 PY Ø 2012 Avg. $.43/sub; +$.32 PY Ø Peers starting to make retrans a priority Ø LIN committed early; continues to see modest growth
Broadcast TV Model Now Has Cable’s Dual Revenue Streams 9
TV Still the Dominant Media Ø Broadcast TV still the best way to reach large audiences; 2x more than Cable
Most Influen al Adver sing Medium (1) S ll the Best Way to Reach Mass Audiences (2) CUME Rating Newspapers Magazines 3.1% 2.0% Mobile Radio 0.9% Top 4 Broadcast Networks Top 4 Cable Networks 3.8% 75% 72% 71% 70% Internet 4.5% 38% 38% 36% 36%
CBS NBC ABC FOX TBSC USA ESPN TNT
Projected TV Sta on Revenue Mix Local Ad Revenue 2006 2018 2% 7% (in billions) Website Local Broadcast TV 1% 1% 19%
Ad Revenue $16.9 $16.5 $15.6 $15.8 $16.4 Retrans Revenue $12.6
Online Revenue $.8 $1.1 $1.2 $1.4 $1.6 $1.7 Network Comp 96% 74% 2007 2008 2009 2010 2011 2012
Source: Adage, SNL Kagan, Veronis Suhler Stevenson 2010-2014 and TVB Media Comparisons Study. 1. Survey of the public’s percep on of adver sing in media by delivery type. 2. Measure of weekly cumula ve audience (CUME), defined as the percentage of adults tuning into television each week. 10
Recent Private Market Broadcasting Valuations (Blended BCF Multiple)
Seller Mul ple High: 10.4x Median: 9.1x Low: 8.2x
Target:
Acquirer:
1 Sinclair indicated a buyer’s multiple of 6.5x based on odd-even year EBITDA including synergies during September 8, 2011 conference call 2 On October 3, 2011 conference call, E.W. Scripps indicated a 8.0x multiple based on $190 million purchase price net of estimated present value of tax benefits and 2012 estimated cash flow; Buyer multiple based on 35% margin 3 Sinclair indicated a 6.6x buyer’s multiple of ‘12E/’13E Blended EBITDA during November 2, 2011 conference call 4 On May 9, 2012 conference call, LIN indicated a buyer’s multiple of just under 6.0x ‘11A/’12E EBITDA inclusive of $25 million of annual synergies and -4.5x ‘11A/’12E EBITDA net of estimated present value of tax step-up 5 On August 1, 2012 conference call; Sinclair indicated a buyer’s multiple of 7.2x and seller’s multiple of 9.75x based on odd-even year BCF 6 On July 19, 2012 conference call, Nexstar indicated a buyer’s multiple of 5.5x based on ‘11A/’12E BCF inclusive of $19 million of projected synergies and a seller’s multiple of 8.3x ‘11A/’12E BCF Source: Wells Fargo Securities 11
Looking Forward…Industry Opportunities Catalysts Ø Benefit from local ad recovery, particularly in auto & political
Ø Ability to generate greater retransmission revenue
Ø Unique & effective digital marketing services & solutions
Ø Advanced technology creates competitive advantages
Ø Long term disintermediation; TV aggregates largest audiences
Ø Opportunities for M&A
Strong Get Stronger
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