Gray Media, Inc. · NYSE:GTN
Gray Media — Gray Television — Investor Presentation (March 2015)
29 slides from Gray Media's investor presentation, Mar 5, 2015
Slide 1: Investor Presentation March 2015
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Slide 2: Introduction
Introduction G stay 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
Slide 3: Company Overview
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Slide 4: Markets reaching approximately 8% of US TV households
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Slide 5: Combination Snapshot
Combination Snapshot gray As Reported Pro Forma All Acquisitions (Sin Millions) $427 8175 8154 0122014 $86 82 76 44 9.4 milion (8.0%) 44 of 44 FOX 4) Source: Company flings Gray Television, In
Slide 6: Investment Highlights
Investment Highligh Ge v ALeading Television Broadcaster in Diverse Mid Markets with Dominant Market Positions v 140 program streams and 76 “Big 4” network affiliations v #1 or #2 market rank in 41/44 markets; #1 news ranking in 28/44 markets v Improving Advertising Market and Diversification of Rev
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 Pursue selective strategic transactions Continue to prudently invest in local content and news, syndicated programs, top talent and community relationships Seek new media opportunities — cur
Slide 8: The Importance of Being #1
The Importance of Being #1 Ge Price Leadership ong History of Being #1 in the Market uo 13 13 13 us " " Highly Ranked News Franchises Drive Traffic OCB 05/06 ‘06/07 ‘07/08 "08/09 ‘09/10 10°41 11/42 12°13 13/14 Network and CBS NationalRanking 11 2041 1 1 4 «4 News Ratings 7 5 Bo 4 B he ee % * Dominat
Slide 9: Dominate Local News & Information
Dominate Local News & Information National Average vs. Gray CBS vs. Gray 5 November "14 Household Share November 14 Household Share Gray's late local news outperforms 12°12 the national ° 5 average by 73% he Network Prime(Mon- TheLate Gray's 6PM 6PM News: Late News wartng News su WEES SMSINational A
Slide 10: Gray stations cover state capitals and university towns
Approximate Ge Approximate Market College(s) Enrollment Market College(s) Enrollment Waco, TX 75 Reno, NV 20 Topeka, KS 53 Harrisonburg, VA 20 Lansing, Ml 50 ‘Sioux Falls, SD B Tallahassee, FL 43 Cheyenne, WY " Madison, WI 43 Charleston-Huntington, WV 10 Lexington, KY 30 Monroe, LA 9 Knoxille, TN ar
Slide 11: Station mix and top markets
e. od | Station mix | 2014PF Revenue: Top 10 Markets ‘) 2014PF BCF: Top 10 Markets ()(3) 140 Total Program Streams: 76 Big 4 Affiliates: = 26CBS = 24NBC = 16 ABC m = 10 FOX 73 Additional Program Streams with:@) = 17cW ma Deéieinanas 2014PF Revenue by Affiliate: 2014PF BCF by Affiliate: = 17 MyNetwor
Slide 12: Revenue Mix
| Revenue Mix gray = 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 = Diversification lowers
Slide 13: Network Affiliate Agreements
Term Network Affiliate Agreements. CBS® # of Channels Renewal Date # of Channels Renewal Date 26 8-31-19 3 12-31-17 13 12-31-18 26 16 MM FOX # of Channels Renewal Date # of Channels Renewal Date 24 12-31-18 10 6-30-17 24 10 B
Slide 14: Gray TV Retransmission Revenue
gray ‘ay TV Retransmi nRevenue™ + Approximately 9.6 million Big-4 Affiliate ($ in millions) subscribers total across all markets GB Retransmission Revenue Network “Reverse Comp.” (“Net Retransmission Revenue” + Approximately 0.8 million Big-4 Affiliate subscribers will re-price end of 2015 + Approxi
Slide 15: Political Revenue
2012 Political Revenue as % of Total.) Gray TV Political Commentary $82 Million Actual & $85 Million Pro Forma in 2014—New Record Non- Presidential Year = 2011-Off Year Record$13.5 million = Gray operates in key battleground states + #1 stations can capture over 50% of the political budget for a mar
Slide 16: Digital and new media initiatives
Operate web and mobile applications in all markets Focusedon local content: news, weather, sports All sites have converted to responsive design “Moms Everyday” digital vertical; deployed in each Gray TV market and continues to expand to other markets Full service digital solutions LOCALX MARKETING (
Slide 17: Financial Overview
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Slide 18: Net Revenue, Operating Cash Flow and Capital Expenditures
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Slide 19: Strong Free Cash Flow Conversion
Strong Free Cash Flow Conversion Ow = 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 op
Slide 20: Prudent Balance Sheet Management Leads to Deleveraging
Prudent Balance Sheet Management Leads: Deleveraging Ge = 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 nancial L
Slide 21: Capitalization
Capitalization (Sin Mttions) 42/31/2014 ‘cum, cum, 8 xL80A xLTM. ocr" ocr? Cash & Equivalents Priority Revolver (S50MM) due 2019 - 00x 0.0x TermLoanB due 2021 (LIBOR + 3% with LIBOR Floor of 0.75%) 9556.4 278x 2.43x ‘Secured Debt $556.4 278K 2AaK 7.5% Senior Notes due 10/2020 675.0 614K 5.37% Total
Slide 22: Questions & Answers
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Slide 23: Appendix
Slide 24: Acquisitions and definitions
Acquisitions’ Ge ‘The Hoak Acquisition and Gray's other previously completed acquisitions of Rapid Cities, Prime Cities, Lockwood, Yellowstone, KICT, Montana and SJL unless otherwise specified “Excalibur” (Excalibur Broadcasting, Inc): A television broadcaster with two stations (KICT, KKHD) whose fi
Slide 25: Pro Forma Non-GAAP Reconciliation
Pro Forma Non-GAAP Reconciliation Netincome $ 59350 $ 29,243 © $ 90,096 $44,297 Adjustments to reconcilefrom net income 10 ‘Broadcast Cash Flow Less Cash Corporate Expenses: Depreciation 31,838 32,202 33,798 32,020 32,998 Amonizstionof intangible assets 325 92 8360, 359 4628 Non-cash stock based com
Slide 26: Net income reconciliation
Netincome ‘Adjustments to reconcilefrom net income to ‘Broadcast Cash Flow Less Cash Corporate Expenses: Depreciation ‘Amonizstionof intangible assets Non-cash stock based compensation sin on disposals of assets, net Miscellaneous income, net Inerest expense Loss on early extinguishment of debt Inco
Slide 27: Net income reconciliation
Netincome ‘$ (17,020) Adjustments to reconcilefrom net income 10 ‘Broadcast Cash Flow Less Cash Corporate Expenses: Depreciation : 32,202 ‘Amortizationof intangible assets : 392 Non-cash stock based compensation : 1974 Gsinon disposals of assets, net i ‘350, Miscellaneous income, net : 1627 Inerest
Slide 28: Net income reconciliation
Netincome Adjustments to reconcilefrom net income to ‘Broadcast Cash Flow Less Cash Corporate Expenses: Depreciation ‘Amonizstionof intangible assets Non-cash stock based compensation Gsin on disposals of assets, net Miscellaneous income, net Inerestexpense Loss on esrly extinguishment of debt Incom
Slide 29: LisPeng
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