Gray Media, Inc. · NYSE:GTN
Gray Media — Gray Television — Stephens 2019 Nashville Investment Conference
26 slides from Gray Media's conference presentation, Nov 13, 2019
Slide 1: Gray Television, Inc. Investor Presentation
Gray Television, Inc. Investor Presentation NYSE:GTN November 2019 Updated for September 30, 2019 Financial Information 4370 Peachtree Road, NE, Atlanta, GA 30319 | P 404.504.9828 | F 404.261.9607 | www.gray.tv 0
Slide 2: Leading the Industry with the Highest Quality Portfolio of Local Television Stations
GRAY TELEVISION, INC. Leading the Industry with the Highest Quality Portfolio of Local Television Stations NOTES: Financial data reflects results “as reported” except where “Combined Historical Basis” (or “CHB”) is noted. Revenue is presented net of agency commissions. Ratings data derived from Coms
Slide 3: Gray Television's National Footprint
Gray Television’s National Footprint “Big 4” network 150 program streams total 400+ program streams 93 markets markets with #1 or 95% #2 ranked TV station 2
Slide 4: Recognized Industry Leader
Recognized Industry Leader 2019 Top Ranked Top Ranked 6PM Stations Local Newscasts NAB Leadership All-Day Ratings for Newscast Ratings for Foundation’s Service All US TV Stations All US TV Stations to America Awards: November 2018 November 2018 Winner, Small Market Category, and 5 of 6 Finalists in
Slide 5: Gray + Raycom: A Highly Complimentary Combination
Gray + Raycom: A Highly Complimentary Combination Selected Highlights of transaction, which closed effective January 2, 2019: • Doubled the size of Gray from roughly $1 billion to more than $2 billion in annual net revenue; increased 17/18 average Free Cash Flow by over 66% • Brought Gray into large
Slide 6: Power of A Strong Portfolio
Power of A Strong Portfolio #1 87/93 markets With #1 or #2 ranked #2 local television station $78.28 2018 $64.13 Broadcast $56.50 $55.79 $48.00 Revenue $41.14 Per Television Household Meredith Sinclair TEGNA Nexstar + Tribune Scripps 2018 Broadcast Revenue $2,081 $846 $2,715 $2,207 $4,765 $917 2018
Slide 7: Strong Network and Distribution Positions
Strong Network and Distribution Positions Retransmission Revenue ($ in millions) $1,000 $794 to Retransmission Revenue MVPD $796 $800 Retransmission Expense (“Reverse Comp.”) Subscribers Retransmission Revenue net of Expense $674 Renewal Schedule 420 $600 $537 to 22% at YE 2019 422 $441 349 $355 56%
Slide 8: Well Positioned for Political Revenue
Well Positioned for Political Revenue $9.63 2016 Political Revenue Per $5.03 $4.67 $4.25 $4.20 TV Household $3.31 Nexstar Scripps TEGNA Meredith Sinclair+Tribune 2016 Political Revenue $118 $228 $101 $155 $52 $276 2016 TV Households 12.2 45.3 21.6 36.5 12.4 83.4 Revenue per company filings shown in
Slide 9: 2019-20 Presents Attractive Opportunity
2019-20 Presents Attractive Opportunity 2019-20: Gray Serves Most of the Most Competitive Political Markets 2019 Gubernatorial Races Gray Stations in All Three Races – KY, LA, MS February 2020 Presidential Nominating Contests Gray Stations in All Four Races – IA, NH, NV and SC 2020 Presidential Elec
Slide 10: Successful Digital Media Initiatives
Successful Digital Media Initiatives Third Quarter 2019: ✓ Over 2.4 Billion Pageviews across Desktop, Mobile and App Platforms ✓ Over 88 Million Average Monthly Web Users ✓ Over 112 Million Video Plays Across All Digital Platforms Over 1,000 Channels Streamed Across All Platforms 9
Slide 11: Diversified Revenue
Diversified Revenue 2018 CHB Revenue 4% 2% Local National 31% 41% Political Retransmission Production Companies Other-TV Stations 11% 11% Broadcast Markets Revenues Cash Flow All Others All Others 8% 6% 21 11% 10% 33% 44 34% 25 16% 18% 42 32% 32% 10
Slide 12: Consistent Growth from Superior Execution and Accretive Acquisitions
Consistent Growth from Superior Execution and Accretive Acquisitions – As Reported Basis ($ in millions) Revenue Net Income 339% 113% $1,200 $300 $1,084 $262 $1,000 $883 $250 $211 $812 $800 $200 $597 $600 $508 $150 $400 $100 $62 $48 $39 $200 $50 $0 $0 2014 2015 2016 2017 2018 2014 2015 2016 2017 201
Slide 13: Robust Free Cash Flow Generation and Conversion
Robust Free Cash Flow Generation and Conversion Presidential Election Year Non-Election Year Midterm Election Year 2016 OCF Buildup 2017/2018 Average 2017 OCF Buildup 2018 OCF Buildup FCF Per Diluted Share FCF Per Diluted Share FCF Per Diluted Share FCF Per Diluted Share $2.04 $4.70 $2.32 $3.48 $2.9
Slide 14: New Combined Scale (As-Reported Basis)
New Combined Scale As-Reported Basis Nine Months Ended September 30, % Change % Change 2019 to 2019 to 2019 2018 2018 2017 2017 (dollars in millions) Revenue (less agency commissions): Broadcast $ 1,481 $ 756 96 % $ 649 128 % Production companies 62 - - Total revenue $ 1,543 $ 756 104 % $ 649 138 %
Slide 15: New Combined Scale (Combined Historical Basis)
New Combined Scale Combined Historical Basis Nine Months Ended September 30, % Change % Change 2019 to 2019 to 2019 2018 2018 2017 2017 (dollars in millions) Revenue (less agency commissions): Broadcast $ 1,483 $ 1,479 0% $ 1,331 11 % Production companies $ 62 $ 64 (3)% $ 60 3% Total revenue $ 1,545
Slide 16: Successful Integration of Acquisitions And Meaningful Deleveraging
Successful Integration of Acquisitions And Meaningful Deleveraging Financial Leverage Net of All Cash (As Reported Basis) Projected L8Q Net Leverage 6.0x Ratio*: 5.1x 4.8x YE 2019: Lower 4.X 4.6x YE 2020: Mid 3.X 3.4x 4.2x * Projected total debt 2.9x 2.5x (excluding preferred 4.3x stock) net of all
Slide 17: Staggered Debt Maturity Profile
Staggered Debt Maturity Profile No Significant Maturities until 2024 ($ in Millions) $2,500 $200 Million Revolver Due Nov 2023 (Undrawn) $3.860(1) Billion Total Term Loan B Due Feb 2024 (L+225) $2,000 Principal Amount of Incremental Term Loan B Due Nov 2025 (L+250) Debt Outstanding Senior Notes Due
Slide 18: Appendix: Non-GAAP Reconciliations and Glossary
Appendix: Non-GAAP Reconciliations and Glossary 17
Slide 19: Non-GAAP Reconciliation
Non-GAAP Reconciliation Reconciliation of Non-GAAP Terms on As Reported Basis, in millions Nine Months Ended S eptember 30, 2019 2018 2017 Net income $ 85 $ 123 $ 96 Adjustments to reconcile from net income to Free Cash Flow: Dep reciation 60 41 39 Amortization of intangible assets 86 16 19 Non-cash
Slide 20: Non-GAAP Reconciliation
Non-GAAP Reconciliation Reconciliation of Non-GAAP Terms on Combined Historical Basis, in millions Nine Months Ended S eptember 30, 2019 2018 2017 Net income $ 87 $ 163 $ 113 Adjustments to reconcile from net income to Free Cash Flow: Dep reciation 60 65 64 Amortization of intangible assets 86 88 96
Slide 21: Non-GAAP Reconciliation
Non-GAAP Reconciliation Reconciliation of Non-GAAP Terms on As Reported Basis, in millions Year Ended December 31, 2018 2017 2016 Net income $ 211 $ 262 $ 62 Adjustments to reconcile from net income to Free Cash Flow: Depreciation 54 52 46 Amortization of intangible assets 21 25 17 Non-cash stock-ba
Slide 22: Non-GAAP Reconciliation
Non-GAAP Reconciliation Reconciliation of Non-GAAP Terms on Combined Historical Basis, in millions Year Ended December 31, 2018 2017 2016 Net income $ 286 $ 601 $ 159 Adjustments to reconcile from net income to Free Cash Flow: Depreciation 86 86 84 Amortization of intangible assets 117 124 129 Non-c
Slide 23: Reconciliation of Total Leverage Ratio
Reconciliation of Total Leverage Ratio (in millions) Eight Quarters Ended September 30, 2019 Net income $ 461 Adjustments to reconcile from net income to operating cash flow as defined in our Senior Credit Agreement: Depreciation 127 Amortization of intangible assets 113 Non-cash stock-based compens
Slide 24: 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 25: Disclaimer, Definitions, and Non-GAAP Financial Data
Disclaimer, Definitions, and Non-GAAP Financial Data This presentation contains certain forward looking statements that are based largely on Gray Television, Inc.’s (“Gray”, “Gray Television”, “GTN” or the “Company”) current expectations and reflect various estimates and assumptions by Gray. These s
Slide 26: Gray Television, Inc.
Gray Television, Inc. 4370 Peachtree Rd., NE Atlanta, Georgia 30319 www.gray.tv 25
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