Gray Media, Inc. · NYSE:GTN

Gray Media — Gray Television — Investor Presentation (March 2015)

29 slides from Gray Media's investor presentation, March 2015

  1. Slide 1: Investor Presentation

    Investor Presentation March, 2015 Financial Information as of December 31, 2014 1

  2. Slide 2: Introduction

    Introduction Certain statements in this presentation constitute “forward-looking statements” within the meaning of and subject to the protections of the Private Securities Litigation Reform Act of 1995 and other federal and state securities laws. Such forward-looking statements involve known and unk

  3. Slide 3: Company Overview

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  4. Slide 4: Gray Has a Diverse and National Footprint

    Gray Has a Diverse and National Footprint 44 markets reaching approximately 8% of US TV households Great Falls, MT Sioux Falls, SD Lincoln, NE Rockford, IL Lansing, MI South Bend, IN North Platte, NE Helena, MT Rapid City, SD Fargo, ND Wausau - Bismarck, ND Omaha, NE Toledo, OH Rhinelander, WI Flint

  5. Slide 5: Combination Snapshot

    Combination Snapshot As Reported Pro Forma All Acquisitions ($ in Millions) Financial Profile Blended 2 year Average ‘14A-’13A Revenue $427 $522 ‘14A-’13A BCF $175 $215 ‘14A-’13A OCF $154 $200 Political Revenue 2012 2014 2012 2014 $86 $82 $118 $85 Scale 76 Stations 44 Non-Duplicated Markets 9.4 mill

  6. Slide 6: Investment Highlights

    Investment Highlights  A Leading Television Broadcaster in Diverse Mid Markets with Dominant Market Positions  140 program streams and 76 “Big 4” network affiliations  #1 or #2 market rank in 41/44 markets; #1 news ranking in 28/44 markets  Improving Advertising Market and Diversification of Rev

  7. Slide 7: Operational Strategy Focused on Market Leadership and Growth

    Operational Strategy Focused on Market Leadership and Growth  Maintain and grow our market leadership position Monetize Spectrum  Pursue selective strategic transactions Accretive Partnerships  Continue to prudently invest in local content and news, syndicated programs, top talent Maintain Intern

  8. Slide 8: The Importance of Being #1

    The Importance of Being #1 Price Leadership Reinvest Long History of Being #1 in the Market in Business 14 14 13 12 13 13 Share Highly 10 11 11 of Ranked News Reinvest Market in Franchises Ad $ Business Drive Traffic Share of '05/'06 '06/'07 '07/'08 '08/'09 '09/'10 10/'11 11/'12 12/'13 13/'14 Market

  9. Slide 9: Dominate Local News & Information

    Dominate Local News & Information National Average vs. Gray CBS vs. Gray November ’14 Household Share November ’14 Household Share  Gray’s late local news 25 17 14 outperforms 19 12 12 11 10 9 15 the national 11 5 average by 73% The Network Prime (Mon- The Late Morning News Sun) Show  Gray’s 6PM 6

  10. Slide 10: Stable Markets – Concentration on DMAs 61-208

    Stable Markets – Concentration on DMAs 61-208 With Focus on State Capitals / Collegiate Presence Approximate Approximate Market College(s) Enrollment Market College(s) Enrollment Waco, TX 75 Reno, NV 20 Topeka, KS 53 Harrisonburg, VA 20 Lansing, MI 50 Sioux Falls, SD 13 Tallahassee, FL 43 Cheyenne,

  11. Slide 11: Diversification Across Networks and Markets

    Diversification Across Networks and Markets Station Mix 2014PF Revenue: Top 10 Markets (1) 2014PF BCF: Top 10 Markets (1), (3) 140 Total Program Streams: Charleston, WV 6% Lexington, KY Charleston, WV 5% 9% Lexington, KY Omaha, NE 6% 76 Big 4 Affiliates: 5% Waco, TX Omaha, NE 5%  26 CBS 4% Lincoln,

  12. Slide 12: Revenue Mix Continues to Diversify

    Revenue Mix Continues to Diversify  Growth in net revenue, driven by increases in core revenue, political, retransmission and internet revenues  Revenue mix continues to diversify from traditional ad-based sources to new media – Internet and subscriber driven – and retransmission revenue  Diversi

  13. Slide 13: Long-Term Network Affiliate Agreements

    Long-Term Network Affiliate Agreements # of Channels Renewal Date # of Channels Renewal Date 26 8-31-19 3 12-31-17 13 12-31-18 26 16 # of Channels Renewal Date # of Channels Renewal Date 24 12-31-18 10 6-30-17 24 10 Gray Television, Inc. 1313

  14. Slide 14: Strong Growth in Retransmission Revenue

    Strong Growth in Retransmission Revenue Gray TV Retransmission Revenue (1)  Approximately 9.6 million Big-4 Affiliate ($ in millions) 180.0 subscribers total across all markets Retransmission Revenue 162.8  Approximately 0.8 million Big-4 Affiliate Network “Reverse Comp.” “Net Retransmission Reven

  15. Slide 15: Gray is A Leading Beneficiary of Political Revenue with Large Upside

    Gray is A Leading Beneficiary of Political Revenue with Large Upside Gray TV Political Commentary 2012 Political Revenue as % of Total (1), (2)  $82 Million Actual & $85 Million Pro Forma in 2014 – New Record Non- Presidential Year 21.2% 21.2%  2011 - Off Year Record $13.5 million  Gray operates

  16. Slide 16: Successful Digital Media Initiatives

    Successful Digital Media Initiatives  Operate web and mobile Gray TV Digital Media Revenue (1) applications in all markets ($ in millions)  Focused on local content: news, weather, sports $29.5 $28.2 $28.1  All sites have converted to $25.0 $25.4 $20.1 responsive design $11.4 $13.4  “Moms Everyd

  17. Slide 17: Financial Overview

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  18. Slide 18: Gray Historical Financial Summary

    Gray Historical Financial Summary Net Revenue (1) $572 LTM L8QA $514 $522 $508 $473 $427 $405 $356 $376 $346 $327 $346 $308 $307 2010 2011 2012 2013 2014 2013PF 2014PF ) L8QA Growth 3% 6% 9% 5% 14% -- 2% LTM 2-Yr. Growth 6% 14% 17% 13% 25% -- 3% Operating Cash Flow (1) Capital Expenditures (1) ($ in

  19. Slide 19: Strong Free Cash Flow Conversion

    Strong Free Cash Flow Conversion  Gray realized record free cash flow of $95 million in 2014  Gray’s free cash flow is expected to increase with the Acquisitions due to the incremental OCF, expected tax savings and moderate increase in CAPEX  Gray will also benefit from ~$160 million in net opera

  20. Slide 20: Prudent Balance Sheet Management Leads to Deleveraging

    Prudent Balance Sheet Management Leads to Deleveraging  Gray has significantly reduced secured and total leverage from historical levels  Gray’s strategic investments have diversified its revenue base, allowing for significant free cash flow in both political and non-political years Net Financial

  21. Slide 21: Capitalization

    Capitalization Current Capitalization ($ in Millions) 12/31/2014 Cum. Cum. $ xL8QA xLTM OCF 1 OCF 2 Cash & Equivalents $30.8 Priority Revolver ($50MM) due 2019 - 0.0x 0.0x Term Loan B due 2021 (LIBOR + 3% with LIBOR Floor of 0.75%) $556.4 2.78x 2.43x Secured Debt $556.4 2.78x 2.43x 7.5% Senior Notes

  22. Slide 22: Questions & Answers

    Television Digital * Mobile Questions & Answers aig DAKOTA

  23. Slide 23: Appendix

    Television Digital * Mobile Appendix

  24. Slide 24: Glossary

    Glossary “Acquisitions”: The Hoak Acquisition and Gray’s other previously completed acquisitions of Rapid Cities, Prime Cities, Lockwood, Yellowstone, KJCT, Montana and SJL unless otherwise specified “Excalibur” (Excalibur Broadcasting, A television broadcaster with two stations (KJCT, KKHD) whose f

  25. Slide 25: Pro Forma Non-GAAP Reconciliation

    Pro Forma Non-GAAP Reconciliation Gray Television Inc. Pro Forma Non-GAAP Reconciliation L8QA L8QA 2012 2013 2014 2013 2014 Net income $ 59,350 $ 29,243 $ 90,096 $ 44,297 $ 59,670 Adjustments to reconcile from net income to Broadcast Cash Flow Less Cash Corporate Expenses: Depreciation 31,838 32,202

  26. Slide 26: Pro Forma Non-GAAP Reconciliation (continued)

    Pro Forma Non-GAAP Reconciliation (continued) Pro Forma Twelve Months Ended December 31, 2012 Gray Pro forma Gray Actual Acquisitions Adjustments Pro forma Net income $ 28,129 $ 42,731 $ (11,510) $ 59,350 Adjustments to reconcile from net income to Broadcast Cash Flow Less Cash Corporate Expenses: D

  27. Slide 27: Pro Forma Non-GAAP Reconciliation (continued)

    Pro Forma Non-GAAP Reconciliation (continued) Pro Forma Twelve Months Ended December 31, 2013 Gray Pro forma Gray Actual Acquisitions Adjustments Pro forma Net income $ 18,288 $ 27,975 $ (17,020) $ 29,243 Adjustments to reconcile from net income to Broadcast Cash Flow Less Cash Corporate Expenses: D

  28. Slide 28: Pro Forma Non-GAAP Reconciliation (continued)

    Pro Forma Non-GAAP Reconciliation (continued) Pro Forma Twelve Months Ended December 31, 2014 Gray Pro forma Gray Actual Acquisitions Adjustments Pro forma Net income $ 48,061 $ 45,282 $ (3,247) $ 90,096 Adjustments to reconcile from net income to Broadcast Cash Flow Less Cash Corporate Expenses: De

  29. Slide 29: Investor Presentation

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