Slide 1: Investor Presentation
Gray Television, Inc. Investor Presentation June 25, 2018 Gray to Combine with Raycom to Become the Third Largest TV Broadcast Group 4370 Peachtree Road, NE, Atlanta, GA 30319 | P 404.504.9828 | F 404.261.9607 | www.gray.tv 0
Slide 2: Disclaimer and Non-GAAP Financial Data
Disclaimer and Non-GAAP Financial Data This presentation contains certain forward looking statements that are based largely on Gray’s current expectations and reflect various estimates and assumptions. These statements may be identified by words such as “estimates”, “expect,” “anticipate,” “will,” “
Slide 3: Highly Complementary Portfolio Will Expand Geographic Footprint
Highly Complementary Portfolio Will Expand Geographic Footprint Combined Company Highlights(1) 92 Markets 24% of U.S. TV Households 62 #1 Rated TV Stations 92% of Markets with #1/#2 Rated TV Stations $2.0 Billion in 2016/2017 CHB Blended Revenue Highest CHB OCF(2) / TVHH in the Industry
Slide 4: A Compelling Combination
A Compelling Combination Gray to combine with Raycom for $3.547 billion in enterprise value to become the third largest television broadcast group based on OCF, markets and stations Compelling geographic footprint with presence in 92 markets Nearly 400 separate program streams including approx
Slide 5: Transaction Summary
Transaction Summary Gray to combine with Raycom for $3.647 billion in total proceeds ($3.547 billion enterprise value Transaction plus $100 million of Raycom cash) Value and $2.850 billion in cash Proceeds $650 million in new series of perpetual preferred stock 11.500 million shares of Gray
Slide 6: Combined Company Snapshot – Continued Diversification
Combined Company Snapshot – Continued Diversification ($ in Millions) Gray + Raycom Gray Raycom (1) ( P re - O v e rla p S t a t io n D iv e s t it ure s ) Financial Profile 2016 / 2017 CHB Blended Net Revenue $921 $1,043 $1,983 (2) 2016 / 2017 CHB Blended OCF $336 $355 $782 (2,3) % Margin 37% 34% 3
Slide 7: Gray Will be the Third Largest TV Broadcast Group with the Highest Quality Assets
Gray Will be the Third Largest TV Broadcast Group with the Highest Quality Assets 2016 / 2017 CHB Blended Adj. EBITDA(1) $1,456 TV Broadcast Affiliate $886 $782 $772 Group Owners ~$400 $355 $336 ~$280 $222 $183 $155 Sinclair + (2) Nexstar (3) TEGNA (4) Hearst (5) Cox (5) Meredith Graham Scripps Trib
Slide 8: Significant Identified and Achievable Synergies
Significant Identified and Achievable Synergies Total Expected Year 1 Annual Synergies of $80 Million Net Comprised of contracted step-up of Raycom subscribers to Gray’s Retransmission ~$15 million retransmission rates Revenue Rationalization of station expenses and creation of efficient operati
Slide 9: Appendix
— Appendix .’
Slide 10: Glossary
Glossary “Combined Historical Basis” Combined Historical Basis reflects financial results that have been compiled by adding historical revenue or “CHB” and broadcast expenses to the historical revenue and broadcast expenses of the stations acquired in the Completed Transactions and subtracting the h
Slide 11: Non-GAAP Terms
Non-GAAP Terms From time to time, Gray supplements its financial results prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) by disclosing the non-GAAP financial measures Broadcast Cash Flow, Broadcast Cash Flow Less Cash Corporate Expenses,
Slide 12: Annual Year-Over-Year Results (Gray Only) As Reported Basis
Annual Year-Over-Year Results (Gray Only) As Reported Basis As Reported Results Year Ended December 31 % Change % Change 2017 to 2017 to 2017 2016 2016 2015 2015 (dollars in thousands) Revenue (less agency commissions): Total $ 882,728 $ 812,465 9% $ 597,356 48 % Political $ 16,498 $ 90,095 (82)% $
Slide 13: Annual Year-Over-Year Results (Gray Only) Combined Historical Basis
Annual Year-Over-Year Results (Gray Only) Combined Historical Basis Combined Historical Basis Year Ended December 31 % Change % Change 2017 to 2017 to 2017 2016 2016 2015 2015 (dollars in thousands) Revenue (less agency commissions): Total $ 895,081 $ 946,001 (5)% $ 821,599 9% Political $ 16,539 $ 1
Slide 14: Non-GAAP Reconciliation (Gray Only) As Reported Basis
Non-GAAP Reconciliation (Gray Only) As Reported Basis As Reported Basis Year Ended December 31 2017 2016 2015 2014 (dollars in thousands) Net income $ 261,952 $ 62,273 $ 39,301 $ 48,061 Depreciation 51,973 45,923 36,712 30,248 Amortization of intangible assets 25,072 16,596 11,982 8,297 Non-cash sto
Slide 15: Non-GAAP Reconciliation (Gray Only) Combined Historical Basis
Non-GAAP Reconciliation (Gray Only) Combined Historical Basis Combined Historical Basis Year Ended December 31 2017 2016 2015 2014 (dollars in thousands) Net income $ 260,133 $ 105,523 $ 65,202 $ 130,807 Depreciation 52,710 51,829 52,056 49,781 Amortization of intangible assets 25,098 17,904 19,261
Slide 16: Gray Television, Inc.
Gray Television, Inc. 4370 Peachtree Rd., NE Atlanta, Georgia 30319 www.gray.tv 15