Gray Media, Inc. · NYSE:GTN
Gray Media — Gray Television — JP Morgan Presentation (February 2012)
27 slides from Gray Media's conference presentation, Feb 28, 2012
Slide 1: Investor Presentation
Investor Presentation Financial Information as of December 31, 2011 1
Slide 2: Company Overview
Company Overview GRAY :-: mS) [WE @ 22 em DS hn CU oe mo oe gg eee jj Slop TELEVISION, INC. wz aie Gp me OH QD m=O Ly meee ve E 2 Se
Slide 3: A Significant Pure-Play Mid-Market TV Platform
Gray Television Overview 2011 Revenue by State A Significant Pure-Play Mid-Market TV Platform KY12% Other 24% WV 10% IN 4% WI 10% 76 channels of programming TN 5% VA 5% Spread across 30 markets NE10% KS 6% FL 6% TX 8% 36 top 4 primary network affiliates, 40 secondary channels 2011 Revenue by A
Slide 4: Gray's National Footprint
Gray’s National Footprint 30 markets reaching approximately 6.2% of US TV households Wausau - Omaha, NE Rhinelander, WI Lincoln - Hastings - La Crosse - Rockford, IL Kearney, NE Eau Claire, WI Madison, WI Parkersburg, WV South Bend, IN Harrisonburg, VA Topeka, KS Lansing, MI Lexington, KY Charleston
Slide 5: Investment Highlights
Investment Highlights Mid Markets Presence – State Capitals and University Towns Leading Market Revenue Share With #1 / #2 Stations in 29 of 30 Markets Diversification Across Networks Long Standing Relations and Strong Leverage With Networks Rebound in Advertising Market Large Political
Slide 6: Stable Markets – Focus on State Capitals / Collegiate Presence
Stable Markets – Concentration on Markets DMA 61-200 With Focus on State Capitals / Collegiate Presence •Approximate •Approximate •Market •College(s) •Enrollment •Market •College(s) •Enrollment •Waco, TX •60 •Lincoln, NE •25 •Topeka, KS 51 •Charlottesville, VA •21 •Lansing, MI •47 •Bowling Green, KY
Slide 7: Gray's Market Leadership
Gray’s Market Leadership Market Rank News Rank Market Rank News Rank Rank Market Station Affiliation in DMA in DMA Rank Market Station Affiliation in DMA in DMA La Crosse / 61 Knoxville, TN WVLT CBS 2 2 128 WEAU NBC 1 1 Eau Claire, WI 64 Lexington, KY WKYT CBS 1 1 134 Rockford, IL WIFR CBS 1 1 #1
Slide 8: The Importance of Being #1
The Importance of Being #1 Dominate local and political Price Reinvest revenue with highly-rated Leadership in news platforms Business Maximize cash flow Deliver high margins Share of Reduce syndicated Market Ad $ Network and programming costs News Ratings Attract and retain talent 8
Slide 9: Long History of Being #1 in the Market
Long History of Being #1 in the Market # of Gray Stations Ranked #1 12 12 12 12 12 11 11 11 11 11 11 11 11 10 (15 Total Gray CBS Markets) '97/'98 '98/'99 '99/'00 '00/'01 '01/'02 '02/'03 '03/'04 '04/'05 '05/'06 '06/'07 '07/'08 '08/'09 '09/'10 '10/'11 CBS National Ranking 2 1 3 1 2 1 1 1 1 1 2 1 1 1 8
Slide 10: Long-Term Affiliate Contracts
Long-Term Affiliate Contracts Gray Markets 15 10 5 Renewal Date Dec. 2014 9 in March 2012 Dec. 2013 1 in Jan. 2016 10
Slide 11: Dominate Local News & Information
Dominate Local News & Information National Average vs. Gray CBS vs. Gray November ’11 Household Share November ’11 Household Share Gray’s late local news 25 23 15 outperforms 13 14 15 14 10 10 the national 8 8 6 average by 64% Gray’s 6PM 6PM News Late News The Early Network Prime The Late Show N
Slide 12: #1 News Platform Allows for Less Syndicated Programming
#1 News Platform Allows for Less Syndicated Programming Syndicated Program Payments as a % of Revenue 10.4% 6.4% 5.2% 3.1% 2 1 2 1 Nexstar Gray TV LIN TV Sinclair Gray’s Syndicated Program Payments as a % of Revenue is Among the Lowest of its Peers 12011 Information from Annual Reports filed on Form
Slide 13: Diversification Across Networks and Markets
Diversification Across Networks and Markets Current Station Mix 2011 Revenue: Top 10 Markets 2011 BCF: Top 10 Markets Charlest on / 76 channels of Charleston / Hunt ingt on, WV 12% programming, including: Huntington, WV 8% Lexington, KY Lexingt on, KY 8% 7% Primary Channels Waco - Bryan, TX Ot her 3
Slide 14: Continuing Rebound in Advertising Market
Continuing Rebound in Advertising Market 2011 Ad Revenue by Category Gray TV Continuing Ad Rebound % of Commercial Time Sales Legal Services Finance / Insurance Department / 4% 5% Ot her Auto up 6% in 2011 Discount 15% 5% Political Supermarket s 5% 5% Most other categories also Ent ert ainment i
Slide 15: Large Political Upside
Large Political Upside Gray TV Political Commentary 2010 Political as % of Total Revenue 2010 Even Year Record $57.6 million; 16.7% of 16.7% Total Revenue 2011 Odd Year record $13.5 million 11.5% 10.7% 10.0% 8.1% Gray operates in key battleground states 5.7% • #1 stations can capture over 50%
Slide 16: Growing Retransmission Revenue
Growing Retransmission Revenue Gray Retransmission Revenue Agreements with all Major Cable and Satellite Providers $20.2 (“MVPD’s”) $18.8 $15.6 Agreements cover virtually all in-market subscribers and certain $2.4 $3.0 $1.0 $1.6 out-of-market subscribers 2005 2006 2007 2008 2009 2010 2011 % of T
Slide 17: Successful Digital Media Initiatives
Successful Digital Media Initiatives Operate web, mobile and Gray TV Digital Media Revenue desktop applications in all markets Focused on local content: $20.1 news, weather, sports Demonstrated strong growth $13.4 in page views: ‘05 to ‘11 $11.9 $11.4 +497% (29.1% CAGR) $9.5 $7.6 $6.4 Curren
Slide 18: Monetizing Digital Spectrum
Monetizing Digital Spectrum In 2011, Gray Generated $11.2 Million in Revenue and $5.4 Million in BCF(1) from Additional Digital Channels 40 Secondary channels of programming, including: 1 Digital ABC station 4 Digital FOX stations 8 Digital CW 18 Digital MyNetwork TV 7 Local 24-hour news a
Slide 19: Prudent Cost Management
Prudent Cost Management Reduced total number of employees by 346, or 14.1%, since December 2007 Decreased operating costs by converting to digital 2011 Total TV Operating Expense of $194.2 million BELOW 2007 level of $199.7 million. 2011 Corporate Overhead of $14.2 million BELOW 2007 level o
Slide 20: Financial Summary
Financial Summary GRAY :-: 6 7) TOs. D t,o Es mo oe gg eee jj Slop TELEVISION, INC. wz aie Gp me OH QD m=O Ly meee ve E 2 Se
Slide 21: Historical Financial Overview
Historical Financial Overview Net Revenue Operating Cash Flow1 $346 $136 $327 $119 $307 $307 $99 $97 $270 $71 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 YOY Growth 6% (17%) 28% (11%) % Margin 32% 36% 26% 39% 32% 2YOY Growth (12%) 6% 14% 1Operating Cash Flow as defined in Senior Credit Facilit
Slide 22: Update on YTD 2011 Performance
Update on YTD 2011 Performance ($ in millions) Year-To-Date December 31, Variance vs. 2011 2010 2010 $ % Local/Regional $187.0 $183.2 $3.8 2.1% Solid Revenue performance YTD 2011 given “off National 56.3 57.6 (1.3) -2.3% year” political cycle and Olympic and Super Bowl Core Revenue $243.3 $240.8 $
Slide 23: Broadcast Cash Flow less Cash Corporate Expenses to OCF Reconciliation
Broadcast Cash Flow less Cash Corporate Expenses to OCF Reconciliation ($ in millions) ($ in millions) 2007 2008 2009 2010 2011 PF 2005 PF 2006 2007A 2008A 2009A 2010A Broadcast Cash Flow less $96.5 $118.1 $69.2 $135.7 $95.6 Cash Corporate Expenses Plus: Pension Expense Accruals 3.2 3.2 5.2 4.9 5.1
Slide 24: Capitalization
Capitalization ($ in millions) Maturity Pricing 12/31/10 12/31/11 Actual Cash and Cash Equivalents $5.4 $5.2 Revolving Credit Facility ($40mm) Mar-14 L + 350 bps(2) Term Loan B Dec-14 L + 350 bps(2) 467.8 472.0 Total First Lien Debt $467.8 $472.0 Senior Secured Second Lien Notes Jun-15 10.50% 365.0
Slide 25: Safe-Harbor
SAFE-HARBOR Certain statements in this presentation constitute “forward-looking statements” within the meaning of and subject to the protections the Private Securities Litigation Reform Act of 1995 and other federal and state securities laws. Such forward-looking statements involve known and unknown
Slide 26: Questions & Answers
Questions & Answers GRAY :-: mS) [WE @ 22 em DS hn CU oe mo oe gg eee jj Slop TELEVISION, INC. wz aie Gp me OH QD m=O Ly meee ve E 2 Se
Slide 27: Investor Presentation
Investor Presentation Financial Information as of December 31, 2011 27
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