Gray Television, Inc. (“Gray,” “we,” “us” or “our”) (NYSE:
GTN) today announces record results of operations for the
three-months ended September 30, 2019.
Financial Highlights, Selected Operating Data and Other
Recent Developments:
- Record Third Quarter Results - Our revenue for the third
quarter of 2019 was $517 million, increasing $238 million, or 85%,
from the third quarter of 2018, our all-time best quarterly
revenue. Our net income was $59 million, and was our second best
third quarter net income. Our Broadcast Cash Flow was our all-time
best quarterly result ever at $192 million, increasing $57 million,
or 42%, from the third quarter of 2018. Comparing our reported
results to our previously issued guidance for the third quarter of
2019, our as-reported total revenue was near the high end of our
previously issued guidance while our broadcast and corporate
operating expenses were each below the low end of our guidance. Our
Adjusted EBITDA significantly exceeded the high end of our
guidance.
- Political Revenue – Our political advertising revenue was $22
million for the third quarter of 2019, significantly exceeding our
previously issued guidance of $11 million to $12 million. For
comparison, after giving effect to stations acquired and divested
between January 1, 2017 and September 30, 2019, we earned $8
million of political advertising revenue in the third quarter of
2017, which was the most recent non-election year. Our political
advertising revenue for the third quarter of 2019 was therefore
175% greater than that of the third quarter of 2017, on this
adjusted basis.
- Stock Repurchases – During the third quarter of 2019, we
repurchased approximately 652,000 shares of our common stock on the
open market at an average price of $16.37 per share, including
commissions, for a total cost of approximately $11 million, under a
stock repurchase authorization adopted in November 2016.
Yesterday, our Board of Directors authorized the Company to
repurchase up to $150 million of outstanding common stock
(GTN) and/or Class A common stock (GTN.A) through December 31,
2022. This new authorization supersedes all prior
authorizations, including the plan adopted in November 2016.
- Fox Television Network (“FOX”) Affiliations - During the third
quarter of 2019, we renewed and extended our network affiliations
for all of our FOX affiliated television stations across 21
markets, including Cincinnati, West Palm Beach, Birmingham, and New
Orleans.
- Integration of Raycom – We believe that we continue to make
great progress integrating Gray and Raycom operationally. We have
completed various actions that we expect to yield approximately $85
million of annualized first-year synergies. As we continue the
integration, we may be able to secure additional revenue and cost
synergies by year end.
- Transaction Related Expenses and Non-Cash Stock-Based
Compensation - During our third quarter and year to date
periods, we incurred transaction related expenses (“Transaction
Related Expenses”) that are incremental expenses incurred specific
to acquisitions, divestitures, and financing activities, including
but not limited to legal and professional fees, severance and
incentive compensation and contract termination fees. In addition,
we have recorded certain non-cash stock-based compensation
expenses. These expenses are summarized as follows (in
millions):
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, |
|
September 30, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Transaction Related
Expenses: |
|
|
|
|
|
|
|
Broadcast |
$ |
1 |
|
$ |
- |
|
$ |
38 |
|
$ |
3 |
Corporate and administrative |
|
1 |
|
|
3 |
|
|
34 |
|
|
6 |
Total Transaction Related Expenses |
$ |
2 |
|
$ |
3 |
|
$ |
72 |
|
$ |
9 |
|
|
|
|
|
|
|
|
Total non-cash stock-based
compensation |
$ |
5 |
|
$ |
2 |
|
$ |
10 |
|
$ |
5 |
|
|
|
|
|
|
|
|
|
|
|
|
- Selected Statement of Operations Data - Selected statement of
operations data on an As-Reported basis and excluding the impact of
Transaction Related Expenses and non-cash stock-based compensation
for the third quarter and year to date 2019 and 2018 periods was as
follows (in millions, except for per share data):
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, |
|
September 30, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
As-Reported: |
|
|
|
|
|
|
|
Net income attributable to common stockholders |
$ |
46 |
|
$ |
61 |
|
$ |
46 |
|
$ |
123 |
Net income attributable to common stockholders, diluted, per
share |
$ |
0.46 |
|
$ |
0.69 |
|
$ |
0.46 |
|
$ |
1.38 |
Adjusted EBITDA (1) |
$ |
181 |
|
$ |
128 |
|
$ |
499 |
|
$ |
303 |
|
|
|
|
|
|
|
|
Excluding Transaction Related
Expenses and non-cash stock-based comp: |
|
|
|
|
|
|
|
Net income attributable to common stockholders (1) |
$ |
51 |
|
$ |
65 |
|
$ |
107 |
|
$ |
133 |
Net income attributable to common stockholders, diluted, per share
(1) |
$ |
0.50 |
|
$ |
0.73 |
|
$ |
1.07 |
|
$ |
1.49 |
|
|
|
|
|
|
|
|
(1) See
reconciliation of non-GAAP amounts to net income, included
elsewhere herein. |
|
|
|
|
|
|
|
|
|
|
|
|
|
- Partial Pre-payment of 2019 Term Loan - On November 1, 2019, we
made a voluntary pre-payment of $100 million on the term loan
outstanding under our senior credit facility, using cash on hand.
This pre-payment reduced the lenders’ total loan commitment for the
senior credit facility by an equal amount and relieved our
obligation to make future quarterly principal payments until
maturity of the senior credit facility.
- Total Leverage Ratio, Net of all Cash - As of September 30,
2019, our total leverage ratio, as defined in our senior credit
facility, was 4.59 times on a trailing eight-quarter basis after
netting our total cash balance of $326 million, and after
giving effect to all Transaction Related Expenses. We currently
anticipate that our leverage ratio will continue to decline to
further into the “4’s” by the end of this year and continue to
decline into the “3’s” by the end of 2020, assuming consistent
macroeconomic trends and immaterial outlays for stock repurchases
and acquisitions.
- Recent Transactions – On September 25, 2019, we completed the
acquisition of KDLT-TV (NBC), in the Sioux Falls, South Dakota
market (DMA 115), for $32.5 million. On October 1, 2019, we
completed the acquisition of WVIR-TV (NBC) in the Charlottesville,
Virginia market (DMA 183) for $12 million. Also, on October 1,
2019, in order to meet regulatory requirements, we divested our
legacy stations in the Charlottesville, Virginia market, WCAV-TV
(CBS/FOX) and WVAW-LD (ABC) for $23 million, resulting in a gain of
approximately $19 million in the fourth quarter of 2019.
Combined Historical Basis Information
We define “2019 Acquisitions” as the businesses acquired, and
stations divested in connection with the merger with Raycom Media,
Inc. (the “Raycom Merger”) completed on January 2, 2019, and the
acquisition of the assets of WWNY-TV (CBS) and WNYF-CD (FOX) in
Watertown, New York (DMA 178) and KEYC-TV (CBS/FOX) in Mankato,
Minnesota (DMA 199) from United Communications Corporation (the
“United Acquisition”) completed on May 1, 2019. Including the 2019
Acquisitions, from January 1, 2017 through September 30, 2019
(except for KDLT-TV, assets acquired on September 25, 2019), we
completed seven acquisition transactions and four divestiture
transactions. Due to the significant effect that these transactions
have had on our results of operations, and in order to provide more
meaningful period over period comparisons, we present certain
financial information below on a “Combined Historical Basis” or
“CHB.” Our Combined Historical Basis presentation reflects
financial results that have been compiled by adding Gray’s
historical revenue, broadcast expenses and corporate and
administrative expenses to the historical revenue, broadcast
expenses and corporate and administrative expenses of the net
stations acquired in those acquisitions, and subtracting the
historical revenues and broadcast expenses of the divested stations
as if all stations had been acquired or divested, respectively, on
January 1, 2017, the beginning of the earliest period that CHB
information is presented herein. For more information on CHB,
see “Effects of Acquisitions and Divestitures on Our Results of
Operations and Non-GAAP Terms” at the end of this release.
Selected Operating
Data (unaudited) |
|
|
|
|
|
|
|
|
|
|
As-Reported Basis |
|
Three Months Ended September 30, |
|
|
|
|
|
% Change |
|
|
|
% Change |
|
|
|
|
|
2019 to |
|
|
|
2019 to |
|
2019 |
|
2018 |
|
2018 |
|
2017 |
|
2017 |
|
(dollars in millions) |
Revenue (less agency
commissions): |
|
|
|
|
|
|
|
|
|
Broadcast |
$ |
501 |
|
$ |
279 |
|
80 |
% |
|
$ |
219 |
|
129 |
% |
Production companies |
|
16 |
|
|
- |
|
|
|
|
- |
|
|
Total revenue |
$ |
517 |
|
$ |
279 |
|
85 |
% |
|
$ |
219 |
|
136 |
% |
|
|
|
|
|
|
|
|
|
|
Political advertising |
$ |
22 |
|
$ |
48 |
|
(54 |
)% |
|
$ |
4 |
|
450 |
% |
|
|
|
|
|
|
|
|
|
|
Operating expenses
(1)(3): |
|
|
|
|
|
|
|
|
|
Broadcast |
$ |
316 |
|
$ |
145 |
|
118 |
% |
|
$ |
140 |
|
126 |
% |
Production companies |
$ |
13 |
|
$ |
- |
|
|
|
$ |
- |
|
|
Corporate and administrative |
$ |
14 |
|
$ |
11 |
|
27 |
% |
|
$ |
8 |
|
75 |
% |
|
|
|
|
|
|
|
|
|
|
Net income attributable to
common stockholders |
$ |
46 |
|
$ |
61 |
|
(25 |
)% |
|
$ |
15 |
|
(207 |
)% |
|
|
|
|
|
|
|
|
|
|
Non-GAAP Cash Flow (2): |
|
|
|
|
|
|
|
|
|
Broadcast Cash Flow (3) |
$ |
192 |
|
$ |
135 |
|
42 |
% |
|
$ |
79 |
|
143 |
% |
Broadcast Cash Flow Less Cash Corporate Expenses (3) |
$ |
180 |
|
$ |
125 |
|
44 |
% |
|
$ |
72 |
|
150 |
% |
Free Cash Flow |
$ |
92 |
|
$ |
73 |
|
26 |
% |
|
$ |
38 |
|
142 |
% |
|
|
|
|
|
|
|
|
|
|
Transaction related expenses
included in operating expenses (4): |
|
|
|
|
|
|
|
|
|
Broadcast |
$ |
1 |
|
$ |
- |
|
|
|
$ |
- |
|
|
Production companies |
$ |
- |
|
$ |
- |
|
|
|
$ |
- |
|
|
Corporate and administrative |
$ |
1 |
|
$ |
3 |
|
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
% |
|
|
|
|
|
|
|
|
|
|
Political advertising |
$ |
30 |
|
$ |
72 |
|
(58 |
)% |
|
$ |
9 |
|
233 |
% |
|
|
|
|
|
|
|
|
|
|
Operating expenses
(1)(3): |
|
|
|
|
|
|
|
|
|
Broadcast |
$ |
986 |
|
$ |
437 |
|
126 |
% |
|
$ |
407 |
|
142 |
% |
Production companies |
$ |
57 |
|
$ |
- |
|
|
|
$ |
- |
|
|
Corporate and administrative |
$ |
83 |
|
$ |
30 |
|
177 |
% |
|
$ |
24 |
|
246 |
% |
|
|
|
|
|
|
|
|
|
|
Net income attributable to
common stockholders |
$ |
46 |
|
$ |
123 |
|
(63 |
)% |
|
$ |
96 |
|
(52 |
)% |
|
|
|
|
|
|
|
|
|
|
Non-GAAP Cash Flow (2): |
|
|
|
|
|
|
|
|
|
Broadcast Cash Flow (3) |
$ |
500 |
|
$ |
321 |
|
56 |
% |
|
$ |
243 |
|
106 |
% |
Broadcast Cash Flow Less Cash Corporate Expenses (3) |
$ |
424 |
|
$ |
294 |
|
44 |
% |
|
$ |
222 |
|
91 |
% |
Free Cash Flow |
$ |
165 |
|
$ |
165 |
|
0 |
% |
|
$ |
131 |
|
26 |
% |
|
|
|
|
|
|
|
|
|
|
Transaction related expenses
included in operating expenses (4): |
|
|
|
|
|
|
|
|
|
Broadcast |
$ |
38 |
|
$ |
3 |
|
|
|
$ |
2 |
|
|
Production companies |
$ |
- |
|
$ |
- |
|
|
|
$ |
- |
|
|
Corporate and administrative |
$ |
34 |
|
$ |
6 |
|
|
|
$ |
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Excludes depreciation, amortization and (gain) loss on
disposal of assets. (2) See definition of non-GAAP terms and a
reconciliation of the non-GAAP amounts to net income included
elsewhere herein. (3) Amounts in 2017 have been reclassified for
the implementation of Accounting Standards Update 2017-07,
Compensation – Retirement Benefits (Topic 715) – Improving the
Presentation of Net Periodic Pension Cost and Net Postretirement
Benefit Cost (“ASU 2017-07”). (4) Transaction Related Expenses are
incremental expenses incurred specific to acquisitions and
divestitures, including but not limited to legal and professional
fees, severance and incentive compensation and contract termination
fees.
Selected
Operating Data - Continued (unaudited) |
|
|
Combined Historical Basis |
|
Three Months Ended September 30, |
|
|
|
|
|
% Change |
|
|
|
% Change |
|
|
|
|
|
2019 to |
|
|
|
2019 to |
|
2019 |
|
2018 |
|
2018 |
|
2017 |
|
2017 |
|
(dollars in millions) |
Revenue (less agency
commissions): |
|
|
|
|
|
|
|
|
|
Broadcast |
$ |
501 |
|
$ |
529 |
|
(5 |
)% |
|
$ |
447 |
|
12 |
% |
Production companies |
|
16 |
|
|
19 |
|
(16 |
)% |
|
|
17 |
|
(6 |
)% |
Total revenue |
$ |
517 |
|
$ |
548 |
|
(6 |
)% |
|
$ |
464 |
|
11 |
% |
|
|
|
|
|
|
|
|
|
|
Political advertising |
$ |
22 |
|
$ |
68 |
|
(68 |
)% |
|
$ |
8 |
|
175 |
% |
|
|
|
|
|
|
|
|
|
|
Operating expenses
(1)(3): |
|
|
|
|
|
|
|
|
|
Broadcast |
$ |
316 |
|
$ |
304 |
|
4 |
% |
|
$ |
287 |
|
10 |
% |
Production companies |
$ |
13 |
|
$ |
15 |
|
(13 |
)% |
|
$ |
13 |
|
0 |
% |
Corporate and administrative |
$ |
14 |
|
$ |
19 |
|
(26 |
)% |
|
$ |
15 |
|
(7 |
)% |
|
|
|
|
|
|
|
|
|
|
Non-GAAP Cash Flow (2): |
|
|
|
|
|
|
|
|
|
Broadcast Cash Flow (3) |
$ |
195 |
|
$ |
229 |
|
(15 |
)% |
|
$ |
165 |
|
18 |
% |
Broadcast Cash Flow Less Cash Corporate Expenses (3) |
$ |
182 |
|
$ |
213 |
|
(15 |
)% |
|
$ |
153 |
|
19 |
% |
Operating Cash Flow as defined in our Senior Credit Facility
(3) |
$ |
180 |
|
$ |
232 |
|
(22 |
)% |
|
$ |
173 |
|
4 |
% |
Free Cash Flow |
$ |
95 |
|
$ |
133 |
|
(29 |
)% |
|
$ |
75 |
|
27 |
% |
|
|
|
|
|
|
|
|
|
|
Transaction related expenses
included in operating expenses (4): |
|
|
|
|
|
|
|
|
|
Broadcast |
$ |
1 |
|
$ |
- |
|
|
|
$ |
- |
|
|
Production companies |
$ |
- |
|
$ |
- |
|
|
|
$ |
- |
|
|
Corporate and administrative |
$ |
1 |
|
$ |
3 |
|
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
$ |
1,543 |
|
0 |
% |
|
$ |
1,391 |
|
11 |
% |
|
|
|
|
|
|
|
|
|
|
Political advertising |
$ |
29 |
|
$ |
108 |
|
(73 |
)% |
|
$ |
17 |
|
71 |
% |
|
|
|
|
|
|
|
|
|
|
Operating expenses
(1)(3): |
|
|
|
|
|
|
|
|
|
Broadcast |
$ |
988 |
|
$ |
906 |
|
9 |
% |
|
$ |
863 |
|
14 |
% |
Production companies |
$ |
57 |
|
$ |
57 |
|
0 |
% |
|
$ |
53 |
|
8 |
% |
Corporate and administrative |
$ |
84 |
|
$ |
54 |
|
56 |
% |
|
$ |
43 |
|
95 |
% |
|
|
|
|
|
|
|
|
|
|
Non-GAAP Cash Flow (2): |
|
|
|
|
|
|
|
|
|
Broadcast Cash Flow (3) |
$ |
540 |
|
$ |
585 |
|
(8 |
)% |
|
$ |
484 |
|
12 |
% |
Broadcast Cash Flow Less Cash Corporate Expenses (3) |
$ |
463 |
|
$ |
540 |
|
(14 |
)% |
|
$ |
448 |
|
3 |
% |
Operating Cash Flow as defined in our Senior Credit Facility
(3) |
$ |
494 |
|
$ |
603 |
|
(18 |
)% |
|
$ |
508 |
|
(3 |
)% |
Free Cash Flow |
$ |
238 |
|
$ |
331 |
|
(28 |
)% |
|
$ |
231 |
|
3 |
% |
|
|
|
|
|
|
|
|
|
|
Transaction related expenses
included in operating expenses (4): |
|
|
|
|
|
|
|
|
|
Broadcast |
$ |
38 |
|
$ |
3 |
|
|
|
$ |
2 |
|
|
Production companies |
$ |
- |
|
$ |
- |
|
|
|
$ |
- |
|
|
Corporate and administrative |
$ |
34 |
|
$ |
6 |
|
|
|
$ |
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Excludes depreciation, amortization and (gain) loss on
disposal of assets. (2) See definition of non-GAAP terms and a
reconciliation of the non-GAAP amounts to net income included
elsewhere herein. (3) Amounts in 2017 have been reclassified for
the implementation of Accounting Standards Update 2017-07,
Compensation – Retirement Benefits (Topic 715) – Improving the
Presentation of Net Periodic Pension Cost and Net Postretirement
Benefit Cost (“ASU 2017-07”). (4) Transaction Related Expenses are
incremental expenses incurred specific to acquisitions and
divestitures, including but not limited to legal and professional
fees, severance and incentive compensation and contract termination
fees.
Results of Operations for the Third Quarter of
2019
Revenue (less agency commissions).
The table below presents our revenue (less agency commissions)
by type for the third quarter of 2019 and 2018 (dollars in
millions):
|
Three Months Ended September 30, |
|
2019 |
|
2018 |
|
Amount |
|
Percent |
|
|
|
Percent |
|
|
|
Percent |
|
Increase |
|
Increase |
|
Amount |
|
of Total |
|
Amount |
|
of Total |
|
(Decrease) |
|
(Decrease) |
Revenue (less agency
commissions): |
|
|
|
|
|
|
|
|
|
|
|
Local (including internet/digital/mobile) |
$ |
218 |
|
42.2 |
% |
|
$ |
106 |
|
38.0 |
% |
|
$ |
112 |
|
|
106 |
% |
National |
|
56 |
|
10.8 |
% |
|
|
29 |
|
10.4 |
% |
|
|
27 |
|
|
93 |
% |
Political |
|
22 |
|
4.3 |
% |
|
|
48 |
|
17.2 |
% |
|
|
(26 |
) |
|
(54 |
)% |
Retransmission consent |
|
196 |
|
37.9 |
% |
|
|
92 |
|
33.0 |
% |
|
|
104 |
|
|
113 |
% |
Production companies |
|
16 |
|
3.1 |
% |
|
|
- |
|
0.0 |
% |
|
|
16 |
|
|
100 |
% |
Other |
|
9 |
|
1.7 |
% |
|
|
4 |
|
1.4 |
% |
|
|
5 |
|
|
125 |
% |
Total |
$ |
517 |
|
100.0 |
% |
|
$ |
279 |
|
100.0 |
% |
|
$ |
238 |
|
|
85 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The 2019 Acquisitions accounted for $274 million of the increase
in our total revenue for the third quarter of 2019 compared to the
third quarter of 2018. Excluding the revenue attributable to the
2019 Acquisitions, revenue decreased primarily due to decreases in
political advertising revenue, resulting primarily from 2019 being
an “off-year” of the two-year political advertising cycle.
Excluding the 2019 Acquisitions, retransmission consent revenue
increased $7 million due to increases in rates.
Revenue (less agency commissions) on Combined Historical
Basis.
On a Combined Historical Basis, total revenue decreased $31
million to $517 million in the third quarter of 2019 compared to
$548 million in the third quarter of 2018. On a Combined Historical
Basis, the changes in revenue for the third quarter of 2019
compared to the third quarter of 2018 were approximately as
follows:
- Local advertising revenue (including internet/digital/mobile)
decreased $2 million, or 1%, to $218 million.
- National advertising revenue decreased $5 million, or 8%, to
$56 million.
- Political advertising revenue decreased $46 million, or 68%, to
$22 million.
- Retransmission consent revenue increased $26 million, or 15%,
to $196 million.
- Production company revenue decreased $3 million, or 16%, to $16
million.
- Other revenue decreased $1 million, or 10%, to $9 million.
On a Combined Historical Basis, our local and national
advertising revenue was consistent with the upper end of our
guidance for the third quarter of 2019 and were slightly less than
the third quarter of 2018. Political advertising revenue decreased
consistent with 2019 being an “off-year” in the two-year political
advertising cycle yet were significantly higher than our guidance
for the third quarter of 2019, due to stronger and more widespread
demand from political ad buyers across our larger portfolio of
stations. Retransmission consent revenue continued to grow,
reflecting the increasing rate environment.
Operating Expenses (before
depreciation, amortization and gain or loss on disposal of
assets) on As-Reported
Basis.
Broadcast operating expenses increased $171 million, or 118%, to
$316 million for the third quarter of 2019 compared to the third
quarter of 2018. The 2019 Acquisitions accounted for $165 million
of the increase in broadcast operating expenses for the third
quarter of 2019. Our operating expenses for the third quarter of
2019 were better than previously expected. Broadcast operating
expenses of $316 million for the third quarter of 2019 was well
below our earlier guidance range of $322 million to $325
million.
Production company operating expenses, which relate to the video
and event production companies acquired in the Raycom Merger, were
$13 million in the third quarter of 2019. Approximately 40% of
these operating expenses were for personnel costs and approximately
half for production operating costs at sporting and other
events.
Corporate and administrative expenses increased $3 million, or
27%, to $14 million in the third quarter of 2019 as compared to the
third quarter of 2018. The increase reflects, in part, the
following:
- Non-compensation expense decreased $1 million in the 2019
period, primarily due to decreased professional fees related to
acquisition activities. Professional fees for Transaction Related
Expenses were $1 million and $2 million in the third quarters of
2019 and 2018, respectively.
- Compensation expense increased $4 million in the 2019 period,
primarily due to increases in both base and incentive compensation
costs. Non-cash stock-based amortization expenses were $2 million
and $1 million in the third quarters of 2019 and 2018,
respectively.
Operating Expenses (before depreciation, amortization
and gain or loss on disposal of assets) on Combined Historical
Basis.
On a Combined Historical Basis, broadcast operating expenses
increased $12 million, or 4%, to $316 million in the third quarter
of 2019 compared to the third quarter of 2018. The increase
reflects, in part, the following:
- Retransmission expense paid to broadcast networks increased $16
million, or 18%, to $105 million in the third quarter of 2019
compared to the third quarter of 2018 consistent with increases in
retransmission consent revenue. National sales representative
commission expense decreased by approximately $3 million in the
third quarter of 2019 compared to the third quarter of 2018
consistent with our termination of those relationships earlier in
2019. Other broadcast operating expenses, primarily professional
fees also decreased by approximately $1 million in the third
quarter of 2019 compared to the third quarter of 2018.
- Compensation expense decreased slightly in the third quarter of
2019 compared to the third quarter of 2018 due primarily from the
elimination of redundant positions related to the 2019
Acquisitions. Non-cash stock-based compensation expenses were $2
million in the third quarter of 2019, but were not significant in
the third quarter of 2018.
On a Combined Historical Basis, production company operating
expenses decreased $2 million, or 13%, to $13 million in the third
quarter of 2019 compared to the third quarter of 2018, primarily
due to decreases in the cost of sports programming.
On a Combined Historical Basis, corporate and administrative
operating expenses decreased $5 million, or 26%, to $14 million in
the third quarter of 2019 as compared to the third quarter of 2018.
The decrease was primarily the result of a reduction in
professional fees for Transaction Related Expenses of $4 million.
Non-cash stock-based compensation expenses were $2 million and $3
million in the third quarters of 2019 and 2018, respectively.
Results of Operations for the Nine-Months Ended
September 30, 2019
Revenue (less agency
commissions).
The table below presents our revenue (less agency commissions)
by type for the nine-month periods ended September 30, 2019 and
2018 (dollars in millions):
|
Nine Months Ended September 30, |
|
2019 |
|
2018 |
|
Amount |
|
Percent |
|
|
|
Percent |
|
|
|
Percent |
|
Increase |
|
Increase |
|
Amount |
|
of Total |
|
Amount |
|
of Total |
|
(Decrease) |
|
(Decrease) |
Revenue (less agency
commissions): |
|
|
|
|
|
|
|
|
|
|
|
Local (including internet/digital/mobile) |
$ |
655 |
|
42.4 |
% |
|
$ |
325 |
|
43.0 |
% |
|
$ |
330 |
|
|
102 |
% |
National |
|
162 |
|
10.5 |
% |
|
|
84 |
|
11.1 |
% |
|
|
78 |
|
|
93 |
% |
Political |
|
30 |
|
1.9 |
% |
|
|
72 |
|
9.5 |
% |
|
|
(42 |
) |
|
(58 |
)% |
Retransmission consent |
|
601 |
|
39.0 |
% |
|
|
262 |
|
34.7 |
% |
|
|
339 |
|
|
129 |
% |
Production companies |
|
62 |
|
4.0 |
% |
|
|
- |
|
0.0 |
% |
|
|
62 |
|
|
100 |
% |
Other |
|
33 |
|
2.2 |
% |
|
|
13 |
|
1.7 |
% |
|
|
20 |
|
|
154 |
% |
Total |
$ |
1,543 |
|
100.0 |
% |
|
$ |
756 |
|
100.0 |
% |
|
$ |
787 |
|
|
104 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The stations and production companies acquired in the 2019
Acquisitions accounted for $819 million of the increase in our
total revenue for the 2019 nine-month period. Excluding the revenue
attributable to the 2019 Acquisitions, revenue decreased primarily
due to decreases in political advertising revenue, resulting
primarily from 2019 being an “off-year” of the two-year political
advertising cycle.
Revenue (less agency commissions) on Combined Historical
Basis.
On a Combined Historical Basis, total revenue increased $2
million to $1.545 billion in the 2019 nine-month period compared to
$1.543 billion in the 2018 nine-month period. On a Combined
Historical Basis, the changes in revenue for the 2019 nine-month
period compared to the 2018 nine-month period were approximately as
follows:
- Local advertising revenue (including internet/digital/mobile)
decreased $9 million, or 1%, to $656 million.
- National advertising revenue decreased $14 million, or 8%, to
$162 million.
- Political advertising revenue decreased $79 million, or 73%, to
$29 million.
- Retransmission consent revenue increased $105 million, or 21%,
to $602 million.
- Production company revenue decreased $2 million, or 3%, to $62
million.
- Other revenue was unchanged at $34 million.
On a Combined Historical Basis local and national advertising
revenue decreased only slightly, reflecting a decline in
advertising spending in the automobile category. Political
advertising revenue decreased consistent with 2019 being an
off-year in the two-year political advertising cycle.
Retransmission consent revenue continues to grow reflecting the
increasing rate environment.
Operating Expenses (before
depreciation, amortization and gain or loss on disposal of
assets) on As-Reported
Basis.
Broadcast operating expenses increased $549 million, or 126%, to
$986 million for the nine-months ended September 30, 2019 compared
to the nine-months ended September 30, 2018. The 2019 Acquisitions
accounted for nearly all of the increase in broadcast operating
expenses in the 2019 nine-month period.
Production company operating expenses, related to the video and
event production companies acquired in the Raycom Merger, were $57
million in the 2019 nine-month period.
Corporate and administrative expenses increased $53 million, or
177%, to $83 million in the 2019 nine-month period compared to the
2018 nine-month period. The increase reflects, in part, the
following:
- Non-compensation expenses increased $27 million, primarily due
to increased professional fees related to acquisition activities.
Professional fees for Transaction Related Expenses were $24 million
and $6 million in the 2019 and 2018 periods, respectively.
- Compensation expense increased $27 million, primarily due to
increased incentive compensation costs related to the 2019
Acquisitions. Non-cash stock-based amortization expenses were $7
million and $3 million in the 2019 and 2018 periods,
respectively.
Operating Expenses (before depreciation, amortization
and gain or loss on disposal of assets) on Combined Historical
Basis.
On a Combined Historical Basis, broadcast operating expenses
increased $82 million, or 9%, to $988 million in the 2019
nine-month period compared to the 2018 nine-month period. The
increase reflects, in part, the following:
- Retransmission expense increased $55 million, or 21%, to $314
million in the 2019 nine-month period, compared to the 2018
nine-month period, which was consistent with the increase in
retransmission consent revenue. Professional services expense
increased $18 million to $75 million primarily as a result of
Transaction Related Expenses, including $29 million for costs
incurred to terminate sales representation agreements, partially
offset by decreases in other expenses.
- Compensation expense increased by approximately $6 million, or
1%, in the 2019 nine-month period, compared to the 2018 nine-month
period. Compensation expenses also included Transaction Related
Expenses of approximately $9 million primarily due to incentive
compensation and severance costs related to the 2019 Acquisitions,
offset by $2 million of decreases in various other components of
compensation expense. Non-cash stock-based compensation expenses
were $3 million and $2 million in the 2019 and 2018 nine-month
periods, respectively.
On a Combined Historical Basis, production company operating
expenses, related to the production companies acquired in the
Raycom Merger, were $57 million in each of the 2019 and 2018
nine-month periods.
On a Combined Historical Basis, corporate and administrative
expenses increased $30 million, or 56%, to $84 million in 2019
nine-month period compared to the 2018 nine-month period. The
increase reflects the following:
- Non-compensation expense increased by $19 million to $45
million, due to increases in professional fees of $17 million,
including Transaction Related Expenses of $23 million that were
partially offset by decreases in other expenses.
- Compensation expense increased $11 million to $39 million,
resulting from Transaction Related Expenses of $10 million for
incentive compensation and severance compensation expenses.
Non-cash stock-based compensation expenses were $7 million and $9
million in the 2019 and 2018 nine-month periods, respectively.
Taxes.
During the 2019 and 2018 nine-month periods, we made aggregate
federal and state income tax payments (net of refunds) of
approximately $12 million and $27 million, respectively. During the
remainder of 2019, we anticipate making income tax payments (net of
refunds) of approximately $13 million. We have approximately $776
million of federal operating loss carryforwards, which expire
during the years 2021 through 2037. We expect to have federal
taxable income in the carryforward periods, therefore we believe
that it is more likely than not that these federal operating loss
carryforwards will be fully utilized. Additionally, we have an
aggregate of approximately $837 million of various state operating
loss carryforwards, of which we expect that approximately $564
million will be utilized.
Detailed table of operating results
Gray Television, Inc. |
Selected Operating Data (Unaudited) |
(in millions except for net income per share data) |
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, |
|
September 30, |
|
|
|
|
|
|
|
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
|
|
|
|
Revenue (less agency
commissions): |
|
|
|
|
|
|
|
Broadcasting |
$ |
501 |
|
|
$ |
279 |
|
|
$ |
1,481 |
|
|
$ |
756 |
|
Production companies |
|
16 |
|
|
|
- |
|
|
|
62 |
|
|
|
- |
|
Total revenue (less agency commissions) |
|
517 |
|
|
|
279 |
|
|
|
1,543 |
|
|
|
756 |
|
Operating expenses before
depreciation, amortization and (gain) or loss on disposal of
fixed assets, net: |
|
|
|
|
|
|
|
Broadcast |
|
316 |
|
|
|
145 |
|
|
|
986 |
|
|
|
437 |
|
Production companies |
|
13 |
|
|
|
- |
|
|
|
57 |
|
|
|
- |
|
Corporate and administrative |
|
14 |
|
|
|
11 |
|
|
|
83 |
|
|
|
30 |
|
Depreciation |
|
20 |
|
|
|
13 |
|
|
|
60 |
|
|
|
41 |
|
Amortization of intangible
assets |
|
29 |
|
|
|
5 |
|
|
|
86 |
|
|
|
16 |
|
(Gain) loss on disposal of
fixed assets, net |
|
(14 |
) |
|
|
(3 |
) |
|
|
(27 |
) |
|
|
(6 |
) |
Operating expenses |
|
378 |
|
|
|
171 |
|
|
|
1,245 |
|
|
|
518 |
|
Operating income |
|
139 |
|
|
|
108 |
|
|
|
298 |
|
|
|
238 |
|
Other income (expense): |
|
|
|
|
|
|
|
Miscellaneous income, net |
|
- |
|
|
|
- |
|
|
|
4 |
|
|
|
2 |
|
Interest expense |
|
(57 |
) |
|
|
(25 |
) |
|
|
(173 |
) |
|
|
(74 |
) |
Income before income
taxes |
|
82 |
|
|
|
83 |
|
|
|
129 |
|
|
|
166 |
|
Income tax expense |
|
23 |
|
|
|
22 |
|
|
|
44 |
|
|
|
43 |
|
Net income |
|
59 |
|
|
|
61 |
|
|
|
85 |
|
|
|
123 |
|
Preferred stock dividends |
|
13 |
|
|
|
- |
|
|
|
39 |
|
|
|
- |
|
Net income attributable to
common stockholders |
$ |
46 |
|
|
$ |
61 |
|
|
$ |
46 |
|
|
$ |
123 |
|
|
|
|
|
|
|
|
|
Basic per share
information: |
|
|
|
|
|
|
|
Net income attributable to
common stockholders |
$ |
0.46 |
|
|
$ |
0.70 |
|
|
$ |
0.46 |
|
|
$ |
1.39 |
|
Weighted-average shares outstanding |
|
100 |
|
|
|
88 |
|
|
|
100 |
|
|
|
88 |
|
|
|
|
|
|
|
|
|
Diluted per share
information: |
|
|
|
|
|
|
|
Net income attributable to
common stockholders |
$ |
0.46 |
|
|
$ |
0.69 |
|
|
$ |
0.46 |
|
|
$ |
1.38 |
|
Weighted-average shares outstanding |
|
101 |
|
|
|
89 |
|
|
|
100 |
|
|
|
89 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Financial Data
|
As of |
|
September 30, 2019 |
|
December 31, 2018 |
|
(in millions) |
|
|
|
|
Cash |
$ |
326 |
|
|
$ |
667 |
|
Restricted Cash |
$ |
- |
|
|
$ |
752 |
|
Long-term debt including
current portion |
$ |
3,895 |
|
|
$ |
2,549 |
|
Borrowing availability under
our senior credit facility |
$ |
200 |
|
|
$ |
100 |
|
|
|
|
|
|
Nine Months Ended September 30, |
|
2019 |
|
2018 |
|
(in millions) |
|
|
|
|
Net cash provided by operating
activities |
$ |
255 |
|
|
$ |
186 |
|
Net cash used in investing
activities |
|
(2,646 |
) |
|
|
(33 |
) |
Net cash provided by (used in)
financing activities |
|
1,298 |
|
|
|
(64 |
) |
Net (decrease) increase in
cash |
$ |
(1,093 |
) |
|
$ |
89 |
|
|
|
|
|
|
|
|
|
Guidance for the Three-Months Ending December
31, 2019
Based on our current forecasts for the quarter ending December
31, 2019 (the “fourth quarter of 2019”), we anticipate changes from
the quarter ended December 31, 2018 (the “fourth quarter of 2018”)
as outlined below:
|
As Reported Basis |
Selected operating
data: |
Three Months Ending December 31, |
|
Low End Guidance |
|
High End Guidance |
|
|
|
LowGuidance forthe
FourthQuarter
of2019 |
|
AmountChange FromFourthQuarter of2018 |
|
PercentageChange
FromFourthQuarter
of2018 |
|
HighGuidance forthe FourthQuarter
of2019 |
|
AmountChange FromFourthQuarter of2018 |
|
PercentageChange FromFourthQuarter of2018 |
|
FourthQuarter of2018 |
|
(dollars in millions) |
REVENUE (less agency
commissions): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Broadcast: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Local (including internet/digital/mobile) |
$ |
238 |
|
$ |
121 |
|
|
103 |
% |
|
$ |
240 |
|
$ |
123 |
|
|
105 |
% |
|
$ |
117 |
National |
|
63 |
|
|
32 |
|
|
103 |
% |
|
|
65 |
|
|
34 |
|
|
110 |
% |
|
|
31 |
Political |
|
25 |
|
|
(58 |
) |
|
(70 |
)% |
|
|
26 |
|
|
(57 |
) |
|
(69 |
)% |
|
|
83 |
Retransmission consent |
|
192 |
|
|
99 |
|
|
106 |
% |
|
|
194 |
|
|
101 |
|
|
109 |
% |
|
|
93 |
Other |
|
9 |
|
|
5 |
|
|
125 |
% |
|
|
10 |
|
|
6 |
|
|
150 |
% |
|
|
4 |
Total Broadcast revenue |
|
527 |
|
|
199 |
|
|
61 |
% |
|
|
535 |
|
|
207 |
|
|
63 |
% |
|
|
328 |
Production companies revenue |
|
22 |
|
|
22 |
|
|
|
|
|
23 |
|
|
23 |
|
|
|
|
|
- |
Total revenue |
$ |
549 |
|
$ |
221 |
|
|
67 |
% |
|
$ |
558 |
|
$ |
230 |
|
|
70 |
% |
|
$ |
328 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES
(before depreciation, amortization and (gain) loss on
disposal of assets): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Broadcast: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Station expenses |
$ |
218 |
|
$ |
101 |
|
|
86 |
% |
|
$ |
221 |
|
$ |
104 |
|
|
89 |
% |
|
$ |
117 |
Retransmission expense |
|
106 |
|
|
63 |
|
|
147 |
% |
|
$ |
108 |
|
|
65 |
|
|
151 |
% |
|
|
43 |
Transaction Related Expenses |
|
1 |
|
|
1 |
|
|
|
|
|
1 |
|
|
1 |
|
|
|
|
|
- |
Non-cash stock-based compensation |
|
2 |
|
|
2 |
|
|
|
|
|
2 |
|
|
2 |
|
|
|
|
|
- |
Total broadcast expense |
$ |
327 |
|
$ |
167 |
|
|
104 |
% |
|
$ |
332 |
|
$ |
172 |
|
|
108 |
% |
|
$ |
160 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production companies expense |
$ |
14 |
|
$ |
14 |
|
|
|
|
$ |
15 |
|
$ |
15 |
|
|
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and administrative: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate expenses |
$ |
16 |
|
$ |
8 |
|
|
100 |
% |
|
$ |
18 |
|
$ |
10 |
|
|
125 |
% |
|
$ |
8 |
Transaction Related Expenses |
|
1 |
|
|
(1 |
) |
|
(50 |
)% |
|
|
1 |
|
|
(1 |
) |
|
(50 |
)% |
|
|
2 |
Non-cash stock-based compensation |
|
2 |
|
|
1 |
|
|
100 |
% |
|
|
2 |
|
|
1 |
|
|
100 |
% |
|
|
1 |
Total corporate and administrative expense |
$ |
19 |
|
$ |
8 |
|
|
73 |
% |
|
$ |
21 |
|
$ |
10 |
|
|
91 |
% |
|
$ |
11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Based on our current forecasts for the fourth quarter of 2019,
we anticipate changes from the fourth quarter of 2018 on a Combined
Historical Basis(1) as outlined below:
Selected operating
data: |
Combined Historical Basis (1) |
|
Three Months Ending December 31, |
|
Low End Guidance |
|
High End Guidance |
|
|
|
Low CHBGuidanceforthe FourthQuarter of2019 |
|
AmountChange FromFourthQuarter of2018 |
|
% ChangeFromCHBFourthQuarter
of2018 |
|
High CHBGuidanceforthe FourthQuarter of2019 |
|
AmountChange FromFourthQuarter of2018 |
|
% ChangeFromCHBFourthQuarter of2018 |
|
CHBFourthQuarter of2018 |
|
(dollars in millions) |
REVENUE (less agency
commissions): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Broadcast: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Local (including internet/digital/mobile) |
$ |
238 |
|
$ |
(6 |
) |
|
(2 |
)% |
|
$ |
240 |
|
$ |
(4 |
) |
|
(2 |
)% |
|
$ |
244 |
National |
|
63 |
|
|
(2 |
) |
|
(3 |
)% |
|
|
65 |
|
|
- |
|
|
0 |
% |
|
|
65 |
Political |
|
25 |
|
|
(102 |
) |
|
(80 |
)% |
|
|
26 |
|
|
(101 |
) |
|
(80 |
)% |
|
|
127 |
Retransmission consent |
|
192 |
|
|
14 |
|
|
8 |
% |
|
|
194 |
|
|
16 |
|
|
9 |
% |
|
|
178 |
Other |
|
9 |
|
|
(1 |
) |
|
(10 |
)% |
|
|
10 |
|
|
- |
|
|
0 |
% |
|
|
10 |
Total Broadcast revenue |
|
527 |
|
|
(97 |
) |
|
(16 |
)% |
|
|
535 |
|
|
(89 |
) |
|
(14 |
)% |
|
|
624 |
Production companies revenue |
|
22 |
|
|
- |
|
|
0 |
% |
|
|
23 |
|
|
1 |
|
|
5 |
% |
|
|
22 |
Total revenue |
$ |
549 |
|
$ |
(97 |
) |
|
(15 |
)% |
|
$ |
558 |
|
$ |
(88 |
) |
|
(14 |
)% |
|
$ |
646 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES
(before depreciation, amortization and (gain) loss on
disposal of assets): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Broadcast: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Station expenses |
$ |
218 |
|
$ |
(25 |
) |
|
(10 |
)% |
|
$ |
221 |
|
$ |
(22 |
) |
|
(9 |
)% |
|
$ |
243 |
Retransmission expense |
|
106 |
|
|
15 |
|
|
16 |
% |
|
|
108 |
|
|
17 |
|
|
19 |
% |
|
|
91 |
Transaction Related Expenses |
|
1 |
|
|
1 |
|
|
|
|
|
1 |
|
|
1 |
|
|
|
|
|
- |
Non-cash stock-based compensation |
|
2 |
|
|
2 |
|
|
|
|
|
2 |
|
|
2 |
|
|
|
|
|
- |
Total broadcast expense |
$ |
327 |
|
$ |
(7 |
) |
|
(2 |
)% |
|
$ |
332 |
|
$ |
(2 |
) |
|
(1 |
)% |
|
$ |
334 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production companies expense |
$ |
14 |
|
$ |
(2 |
) |
|
(13 |
)% |
|
$ |
15 |
|
$ |
(1 |
) |
|
(6 |
)% |
|
$ |
16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and administrative: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate expenses |
$ |
16 |
|
$ |
(4 |
) |
|
(20 |
)% |
|
$ |
18 |
|
$ |
(2 |
) |
|
(10 |
)% |
|
|
20 |
Transaction Related Expenses |
|
1 |
|
|
(6 |
) |
|
(86 |
)% |
|
|
1 |
|
|
(6 |
) |
|
(86 |
)% |
|
|
7 |
Non-cash stock-based compensation |
|
2 |
|
|
(2 |
) |
|
(50 |
)% |
|
|
2 |
|
|
(2 |
) |
|
(50 |
)% |
|
|
4 |
Total corporate and administrative expense |
$ |
19 |
|
$ |
(12 |
) |
|
(39 |
)% |
|
$ |
21 |
|
$ |
(10 |
) |
|
(32 |
)% |
|
$ |
31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) For the purpose of providing our forecast for the fourth
quarter of 2019, Combined Historical Basis gives effect to the 2019
Acquisitions as well as the acquisitions of KDLT-TV in Sioux Falls,
WVIR-TV in Charlottesville, Virginia and the divestiture of WCAV-TV
and WVAW-LD also in Charlottesville, Virginia as if they had all
been completed on October 1, 2018 which is the first day of the
earliest period presented.
The Company
We are a television broadcast company headquartered in Atlanta,
Georgia. Upon the completion of the Raycom Merger on January 2,
2019, we became the largest owner of top-rated local television
stations and digital assets in the United States. Currently, we own
television stations in 93 television markets broadcasting over 400
separate program streams including approximately 150 affiliates of
the ABC Network (“ABC”), the NBC Network (“NBC”), the CBS Network
(“CBS”) and the FOX Network (“FOX”). We refer to these major
broadcast networks collectively as the “Big Four” networks. Our
television stations ranked first or second among all local
television stations in 87 of our 93 markets between December 2017
and November 2018. Our station portfolio reaches approximately 24%
of total United States television households. We also own video
program production, marketing, and digital businesses including
Raycom Sports, Tupelo-Raycom, and RTM Studios, the producer of
PowerNation programs and content, which we refer to collectively as
our “production companies.”
Cautionary Statements for Purposes of the
“Safe Harbor” Provisions of the Private Securities Litigation
Reform Act
This press release contains statements that constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995 and the federal securities
laws. These “forward-looking statements” are not statements of
historical facts, and may include, among other things, statements
regarding our current expectations and beliefs of operating results
for the fourth quarter of 2019 or other periods, future income tax
payments and other future events. Actual results are subject to a
number of risks and uncertainties and may differ materially from
the current expectations and beliefs discussed in this press
release. All information set forth in this release is as of the
date hereof. We do not intend, and undertake no duty, to update
this information to reflect future events or circumstances.
Information about certain potential factors that could affect our
business and financial results and cause actual results to differ
materially from those expressed or implied in any forward-looking
statements are included under the captions "Risk Factors" and
"Management's Discussion and Analysis of Financial Condition and
Results of Operations," in our Annual Report on Form 10-K for the
year ended December 31, 2018 and may be contained in reports
subsequently filed with the U.S. Securities and Exchange Commission
(the “SEC”) and available at the SEC's website at www.sec.gov.
Conference Call Information
We will host a conference call to discuss our third quarter
operating results on November 7, 2019. The call will begin at 11:00
AM Eastern Time. The live dial-in number is 1 (855) 493-3489 and
the confirmation code is 9151326. The call will be webcast live and
available for replay at www.gray.tv. The taped replay of the
conference call will be available at 1 (855) 859-2056, Confirmation
Code: 9151326 until December 7, 2019.
Gray ContactsWeb site:
www.gray.tv
Hilton H. Howell, Jr., Executive Chairman and
Chief Executive Officer, 404-266-5512Pat
LaPlatney, President and Co-Chief Executive Officer,
334-206-1400Jim Ryan, Executive Vice President and
Chief Financial Officer, 404-504-9828Kevin P.
Latek, Executive Vice President, Chief Legal and
Development Officer, 404-266-8333
Effects of Acquisitions and Divestitures on Our Results
of Operations and Non-GAAP Terms
From January 1, 2017 through September 30, 2019, we completed
seven acquisition transactions and four divestiture transactions.
As more fully described in our Form 10-Q to be filed with the
Securities and Exchange Commission today and in our prior
disclosures, these transactions added television stations in 43 new
television markets to our operations. We refer to the 2019
Acquisitions collectively with all other television stations
acquired (except for KDLT-TV which was acquired on September 25,
2019) or divested on or subsequent to January 1, 2017 as the
“Acquisitions.”
Due to the significant effect that the Acquisitions have had on
our results of operations, and in order to provide more meaningful
period over period comparisons, we present herein certain financial
information on a Combined Historical Basis (or “CHB”). Combined
Historical Basis financial information does not include any
adjustments for other events attributable to the Acquisitions
unless otherwise described. Certain of the Combined Historical
Basis financial information has been derived from, and adjusted
based on unaudited, unreviewed financial information prepared by
other entities, which Gray cannot independently verify. We cannot
assure you that such financial information would not be materially
different if such information were audited or reviewed and no
assurances can be provided as to the accuracy of such information,
or that our actual results would not differ materially from the
Combined Historical Basis financial information if the Acquisitions
had been completed at the stated date. In addition, the
presentation of Combined Historical Basis may not comply with
accounting principles generally accepted in the United States of
America (“GAAP”) or the requirements for proforma financial
information under Regulation S-X under the Securities Act. Gray is
providing the fourth quarter of 2019 guidance estimates on a
Combined Historical Basis, which incorporate certain non–GAAP
financial measures that are dependent on financial results that are
not yet determinable with certainty. Therefore, we are unable to
present a quantitative reconciliation of the estimated non-GAAP
financial measures to their most directly comparable GAAP financial
measures because such information is not available, and management
cannot reliably estimate all of the necessary components of such
GAAP measures without unreasonable effort or expense. In addition,
we believe such reconciliations would imply a degree of precision
that would be confusing or misleading to investors.
From time to time, Gray supplements its financial results
prepared in accordance with GAAP by disclosing the non-GAAP
financial measures Broadcast Cash Flow, Broadcast Cash Flow Less
Cash Corporate Expenses, Operating Cash Flow as defined in the
Senior Credit Agreement, Free Cash Flow, Adjusted EBITDA and Total
Leverage Ratio, Net of All Cash. These non-GAAP amounts are used by
us to approximate amounts used to calculate key financial
performance covenants contained in our debt agreements and are used
with our GAAP data to evaluate our results and liquidity.
We define Broadcast Cash Flow as net income or loss plus loss
from early extinguishment of debt, non-cash corporate and
administrative expenses, non-cash stock based compensation,
depreciation and amortization (including amortization of intangible
assets and program broadcast rights), any loss on disposal of
assets, any miscellaneous expense, interest expense, any income tax
expense, non-cash 401(k) expense, Broadcast Transactions Related
Expenses and broadcast other adjustments less any gain on disposal
of assets, any miscellaneous income, any income tax benefits and
payments for program broadcast rights.
We define Broadcast Cash Flow Less Cash Corporate Expenses as
net income or loss plus loss from early extinguishment of debt,
non-cash stock based compensation, depreciation and amortization
(including amortization of intangible assets and program broadcast
rights), any loss on disposal of assets, any miscellaneous expense,
interest expense, any income tax expense, non-cash 401(k) expense,
Broadcast Transactions Related Expenses and broadcast other
adjustments less any gain on disposal of assets, any miscellaneous
income, any income tax benefits and payments for program broadcast
rights.
We define Operating Cash Flow as defined in our Senior Credit
Agreement as net income or loss plus loss from early extinguishment
of debt, non-cash stock based compensation, depreciation and
amortization (including amortization of intangible assets and
program broadcast rights), any loss on disposal of assets, any
miscellaneous expense, interest expense, any income tax expense,
non-cash 401(k) expense, Broadcast Transactions Related Expenses,
broadcast other adjustments, certain pension expenses, Corporate
Transaction Related Expenses, synergies and other adjustments less
any gain on disposal of assets, any miscellaneous income, any
income tax benefits, payments for program broadcast rights, pension
income and contributions to pension plans.
Operating Cash Flow as defined in our Senior Credit Agreement is
presented on Combined Historical Basis and gives effect to the
revenue and broadcast expenses of the Acquisitions as if they had
been acquired or divested, respectively, on January 1, 2017. It
also gives effect to certain operating synergies expected from the
Acquisitions and related financings and adds back professional fees
incurred in completing the Acquisitions. Certain of the financial
information related to the Acquisitions has been derived from, and
adjusted based on, unaudited, un-reviewed financial information
prepared by other entities, which Gray cannot independently verify.
We cannot assure you that such financial information would not be
materially different if such information were audited or reviewed
and no assurances can be provided as to the accuracy of such
information, or that our actual results would not differ materially
from this financial information if the Acquisitions had been
completed at the stated date. In addition, the presentation of
Operating Cash Flow as defined in the Senior Credit Agreement and
the adjustments to such information, including expected synergies
resulting from such transactions, may not comply with GAAP or the
requirements for pro forma financial information under Regulation
S-X under the Securities Act.
We define Free Cash Flow as net income or loss plus loss from
early extinguishment of debt, non-cash stock based compensation,
depreciation and amortization (including amortization of intangible
assets and program broadcast rights), any loss on disposal of
assets, any miscellaneous expense, any income tax expense, non-cash
401(k) expense, Broadcast Transactions Related Expenses, broadcast
other adjustments, certain pension expenses, Corporate Transaction
Related Expenses, synergies, other adjustments and amortization of
deferred financing costs less any gain on disposal of assets, any
miscellaneous income, any income tax benefits, payments for program
broadcast rights, pension income, contributions to pension plans,
preferred dividends, purchase of property and equipment (net of
reimbursements) and income taxes paid (net of any refunds
received).
We define Adjusted EBITDA as net income or loss plus loss from
early extinguishment of debt, non-cash stock based compensation,
depreciation and amortization of intangible assets, any loss on
disposal of assets, any miscellaneous expense, interest expense,
any income tax expense, non-cash 401(k) expense, Transaction
Related Expenses less any gain on disposal of assets, any
miscellaneous income and any income tax benefits.
Our Total Leverage Ratio, Net of All Cash is determined by
dividing our Adjusted Total Indebtedness, Net of All Cash by our
Operating Cash Flow as defined in our Senior Credit Agreement,
divided by two. Our Adjusted Total Indebtedness, Net of All Cash
represents the total outstanding principal of our long-term debt,
plus certain other obligations as defined in our Senior Credit
Agreement, less all cash (excluding restricted cash). Our Operating
Cash Flow as defined in our Senior Credit Agreement, divided by
two, represents our average annual Operating Cash Flow as defined
in our Senior Credit Agreement for the preceding eight
quarters.
We define Transaction Related Expenses as incremental expenses
incurred specific to acquisitions and divestitures, including but
not limited to legal and professional fees; severance and incentive
compensation; and contract termination fees. We present certain
line-items from our selected operating data net of Transaction
Related Expenses in order to present a more meaningful comparison
between periods of our operating expenses and our results of
operations.
These non-GAAP terms are not defined in GAAP and our definitions
may differ from, and therefore may not be comparable to, similarly
titled measures used by other companies, thereby limiting their
usefulness. Such terms are used by management in addition to, and
in conjunction with, results presented in accordance with GAAP and
should be considered as supplements to, and not as substitutes for,
net income and cash flows reported in accordance with GAAP.
Reconciliation of Non-GAAP Terms on As Reported Basis,
in millions:
|
Three Months Ended |
|
September 30, |
|
|
2019 |
|
|
|
2018 |
|
|
|
2017 |
|
Net income |
$ |
59 |
|
|
$ |
61 |
|
|
$ |
15 |
|
Adjustments to reconcile from net income to Free Cash
Flow: |
|
|
|
|
|
Depreciation |
|
20 |
|
|
|
13 |
|
|
|
13 |
|
Amortization of intangible assets |
|
29 |
|
|
|
5 |
|
|
|
7 |
|
Non-cash stock based compensation |
|
5 |
|
|
|
2 |
|
|
|
1 |
|
(Gain) loss on disposal of assets, net |
|
(14 |
) |
|
|
(3 |
) |
|
|
2 |
|
Interest expense |
|
57 |
|
|
|
25 |
|
|
|
24 |
|
Income tax expense |
|
23 |
|
|
|
22 |
|
|
|
11 |
|
Amortization of program broadcast rights |
|
10 |
|
|
|
5 |
|
|
|
5 |
|
Payments for program broadcast rights |
|
(9 |
) |
|
|
(5 |
) |
|
|
(6 |
) |
Corporate and administrative expenses before depreciation,
amortization of intangible assets and non-cash stock based
compensation |
|
12 |
|
|
|
10 |
|
|
|
7 |
|
Broadcast Cash Flow
(1) |
|
192 |
|
|
|
135 |
|
|
|
79 |
|
Corporate and administrative expenses before depreciation,
amortization of intangible assets and non-cash stock based
compensation |
|
(12 |
) |
|
|
(10 |
) |
|
|
(7 |
) |
Broadcast Cash Flow
Less Cash Corporate Expenses (1) |
|
180 |
|
|
|
125 |
|
|
|
72 |
|
Contributions to pension plans |
|
(3 |
) |
|
|
(2 |
) |
|
|
- |
|
Interest expense |
|
(57 |
) |
|
|
(25 |
) |
|
|
(24 |
) |
Amortization of deferred financing costs |
|
3 |
|
|
|
1 |
|
|
|
1 |
|
Preferred dividends |
|
(13 |
) |
|
|
- |
|
|
|
- |
|
Purchase of property and equipment |
|
(29 |
) |
|
|
(15 |
) |
|
|
(11 |
) |
Reimbursements of property and equipment purchases |
|
15 |
|
|
|
4 |
|
|
|
- |
|
Income taxes paid, net of refunds |
|
(4 |
) |
|
|
(15 |
) |
|
|
- |
|
Free Cash
Flow |
$ |
92 |
|
|
$ |
73 |
|
|
$ |
38 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts in 2017 have been reclassified to give effect to the
implementation of ASU 2017-07
Reconciliation of Non-GAAP Terms on As Reported Basis,
in millions:
|
Nine Months Ended |
|
September 30, |
|
|
2019 |
|
|
|
2018 |
|
|
|
2017 |
|
Net income |
$ |
85 |
|
|
$ |
123 |
|
|
$ |
96 |
|
Adjustments to reconcile from net income to Free Cash
Flow: |
|
|
|
|
|
Depreciation |
|
60 |
|
|
|
41 |
|
|
|
39 |
|
Amortization of intangible assets |
|
86 |
|
|
|
16 |
|
|
|
19 |
|
Non-cash stock based compensation |
|
10 |
|
|
|
5 |
|
|
|
4 |
|
(Gain) loss on disposal of assets, net |
|
(27 |
) |
|
|
(6 |
) |
|
|
(75 |
) |
Miscellaneous income, net (1) |
|
(4 |
) |
|
|
(2 |
) |
|
|
- |
|
Interest expense |
|
173 |
|
|
|
74 |
|
|
|
71 |
|
Loss from early extinguishment of debt |
|
- |
|
|
|
- |
|
|
|
3 |
|
Income tax expense |
|
44 |
|
|
|
43 |
|
|
|
66 |
|
Amortization of program broadcast rights |
|
30 |
|
|
|
16 |
|
|
|
15 |
|
Payments for program broadcast rights |
|
(33 |
) |
|
|
(16 |
) |
|
|
(16 |
) |
Corporate and administrative expenses before depreciation,
amortization of intangible assets and non-cash stock based
compensation |
|
76 |
|
|
|
27 |
|
|
|
21 |
|
Broadcast Cash Flow
(1) |
|
500 |
|
|
|
321 |
|
|
|
243 |
|
Corporate and administrative expenses before depreciation,
amortization of intangible assets and non-cash stock based
compensation |
|
(76 |
) |
|
|
(27 |
) |
|
|
(21 |
) |
Broadcast Cash Flow
Less Cash Corporate Expenses (1) |
|
424 |
|
|
|
294 |
|
|
|
222 |
|
Contributions to pension plans |
|
(3 |
) |
|
|
(3 |
) |
|
|
(1 |
) |
Interest expense |
|
(173 |
) |
|
|
(74 |
) |
|
|
(71 |
) |
Amortization of deferred financing costs |
|
9 |
|
|
|
3 |
|
|
|
3 |
|
Preferred dividends |
|
(39 |
) |
|
|
- |
|
|
|
- |
|
Purchase of property and equipment |
|
(73 |
) |
|
|
(35 |
) |
|
|
(21 |
) |
Reimbursements of property and equipment purchases |
|
32 |
|
|
|
7 |
|
|
|
- |
|
Income taxes paid, net of refunds |
|
(12 |
) |
|
|
(27 |
) |
|
|
(1 |
) |
Free Cash
Flow |
$ |
165 |
|
|
$ |
165 |
|
|
$ |
131 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts in 2017 have been reclassified to give effect to the
implementation of ASU 2017-07
Reconciliation of Non-GAAP Terms on Combined Historical
Basis, in millions:
|
Three Months
Ended |
|
September 30, |
|
|
2019 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
Net income |
$ |
61 |
|
|
$ |
83 |
|
|
$ |
52 |
|
Adjustments to reconcile from net income to Free Cash Flow: |
|
|
|
|
|
Depreciation |
|
20 |
|
|
|
21 |
|
|
|
21 |
|
Amortization of intangible assets |
|
29 |
|
|
|
27 |
|
|
|
32 |
|
Non-cash stock-based compensation |
|
5 |
|
|
|
4 |
|
|
|
3 |
|
Loss on disposal of assets, net |
|
(14 |
) |
|
|
(3 |
) |
|
|
(31 |
) |
Miscellaneous income, net |
|
(1 |
) |
|
|
4 |
|
|
|
(1 |
) |
Interest expense |
|
57 |
|
|
|
57 |
|
|
|
57 |
|
Income tax expense |
|
23 |
|
|
|
20 |
|
|
|
18 |
|
Amortization of program broadcast rights |
|
10 |
|
|
|
10 |
|
|
|
9 |
|
Payments for program broadcast rights |
|
(9 |
) |
|
|
(10 |
) |
|
|
(9 |
) |
Corporate and administrative expenses before depreciation,
amortization of intangible assets and non-cash stock-based
compensation |
|
13 |
|
|
|
16 |
|
|
|
12 |
|
Broadcast Transaction Related Expenses |
|
1 |
|
|
|
- |
|
|
|
1 |
|
Broadcast other adjustments |
|
- |
|
|
|
- |
|
|
|
1 |
|
Broadcast Cash Flow
(1) |
|
195 |
|
|
|
229 |
|
|
|
165 |
|
Corporate and administrative expenses before depreciation,
amortization of intangible assets and non-cash stock-based
compensation |
|
(13 |
) |
|
|
(16 |
) |
|
|
(12 |
) |
Broadcast Cash Flow
Less Cash Corporate Expenses (1) |
|
182 |
|
|
|
213 |
|
|
|
153 |
|
Contributions to pension plans |
|
(3 |
) |
|
|
(3 |
) |
|
|
- |
|
Corporate Transaction Related Expenses |
|
1 |
|
|
|
2 |
|
|
|
- |
|
Synergies and other adjustments |
|
- |
|
|
|
20 |
|
|
|
20 |
|
Operating Cash Flow as
defined in the Senior Credit Agreement (1) |
|
180 |
|
|
|
232 |
|
|
|
173 |
|
Interest expense |
|
(57 |
) |
|
|
(57 |
) |
|
|
(57 |
) |
Amortization of deferred financing costs |
|
3 |
|
|
|
3 |
|
|
|
3 |
|
Preferred dividends |
|
(13 |
) |
|
|
(13 |
) |
|
|
(13 |
) |
Purchase of property and equipment |
|
(29 |
) |
|
|
(20 |
) |
|
|
(15 |
) |
Reimbursement of purchases of property and equipment |
|
15 |
|
|
|
4 |
|
|
|
- |
|
Income taxes paid, net of refunds |
|
(4 |
) |
|
|
(16 |
) |
|
|
(16 |
) |
Free Cash
Flow |
$ |
95 |
|
|
$ |
133 |
|
|
$ |
75 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts in 2017 have been reclassified to give effect to the
implementation of ASU 2017-07
Reconciliation of Non-GAAP Terms on Combined Historical
Basis, in millions:
|
Nine Months
Ended |
|
September 30, |
|
|
2019 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
Net income |
$ |
87 |
|
|
$ |
163 |
|
|
$ |
113 |
|
Adjustments to reconcile from net income to Free Cash Flow: |
|
|
|
|
|
Depreciation |
|
60 |
|
|
|
65 |
|
|
|
64 |
|
Amortization of intangible assets |
|
86 |
|
|
|
88 |
|
|
|
96 |
|
Non-cash stock-based compensation |
|
10 |
|
|
|
11 |
|
|
|
8 |
|
Loss on disposal of assets, net |
|
(30 |
) |
|
|
(4 |
) |
|
|
(110 |
) |
Miscellaneous (income) expense, net |
|
(5 |
) |
|
|
2 |
|
|
|
(1 |
) |
Interest expense |
|
173 |
|
|
|
173 |
|
|
|
173 |
|
Loss from early extinguishment of debt |
|
- |
|
|
|
- |
|
|
|
3 |
|
Income tax expense |
|
44 |
|
|
|
39 |
|
|
|
94 |
|
Amortization of program broadcast rights |
|
30 |
|
|
|
30 |
|
|
|
29 |
|
Payments for program broadcast rights |
|
(33 |
) |
|
|
(30 |
) |
|
|
(29 |
) |
Corporate and administrative expenses before depreciation,
amortization of intangible assets and non-cash stock-based
compensation |
|
77 |
|
|
|
45 |
|
|
|
36 |
|
Broadcast Transaction Related Expenses |
|
38 |
|
|
|
3 |
|
|
|
2 |
|
Broadcast other adjustments |
|
3 |
|
|
|
- |
|
|
|
6 |
|
Broadcast Cash Flow
(1) |
|
540 |
|
|
|
585 |
|
|
|
484 |
|
Corporate and administrative expenses before depreciation,
amortization of intangible assets and non-cash stock-based
compensation |
|
(77 |
) |
|
|
(45 |
) |
|
|
(36 |
) |
Broadcast Cash Flow
Less Cash Corporate Expenses (1) |
|
463 |
|
|
|
540 |
|
|
|
448 |
|
Contributions to pension plans |
|
(3 |
) |
|
|
(3 |
) |
|
|
(1 |
) |
Corporate Transaction Related Expenses |
|
34 |
|
|
|
6 |
|
|
|
1 |
|
Synergies and other adjustments |
|
- |
|
|
|
60 |
|
|
|
60 |
|
Operating Cash Flow as
defined in the Senior Credit Agreement (1) |
|
494 |
|
|
|
603 |
|
|
|
508 |
|
Interest expense |
|
(173 |
) |
|
|
(173 |
) |
|
|
(173 |
) |
Amortization of deferred financing costs |
|
9 |
|
|
|
9 |
|
|
|
9 |
|
Preferred dividends |
|
(39 |
) |
|
|
(39 |
) |
|
|
(39 |
) |
Purchase of property and equipment |
|
(73 |
) |
|
|
(45 |
) |
|
|
(34 |
) |
Reimbursement of purchases of property and equipment |
|
32 |
|
|
|
6 |
|
|
|
- |
|
Income taxes paid, net of refunds |
|
(12 |
) |
|
|
(30 |
) |
|
|
(40 |
) |
Free Cash
Flow |
$ |
238 |
|
|
$ |
331 |
|
|
$ |
231 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts in 2017 have been reclassified to give effect to the
implementation of ASU 2017-07
Reconciliation of Net Income to Adjusted EBITDA and the
Effect of Transaction Related Expenses and Certain Non-cash
Expenses, in millions except for per share
information:
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, |
|
September 30, |
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
|
|
|
|
Net income |
$ |
59 |
|
|
$ |
61 |
|
|
$ |
85 |
|
|
$ |
123 |
|
Adjustments to reconcile from net income to Adjusted EBITDA: |
|
|
|
|
|
|
|
Depreciation |
|
20 |
|
|
|
13 |
|
|
|
60 |
|
|
|
41 |
|
Amortization of intangible assets |
|
29 |
|
|
|
5 |
|
|
|
86 |
|
|
|
16 |
|
Non-cash stock-based compensation |
|
5 |
|
|
|
2 |
|
|
|
10 |
|
|
|
5 |
|
(Gain) loss on disposals of assets, net |
|
(14 |
) |
|
|
(3 |
) |
|
|
(27 |
) |
|
|
(6 |
) |
Miscellaneous income, net |
|
- |
|
|
|
- |
|
|
|
(4 |
) |
|
|
(2 |
) |
Interest expense |
|
57 |
|
|
|
25 |
|
|
|
173 |
|
|
|
74 |
|
Income tax expense |
|
23 |
|
|
|
22 |
|
|
|
44 |
|
|
|
43 |
|
Total |
|
179 |
|
|
|
125 |
|
|
|
427 |
|
|
|
294 |
|
Add: Transaction Related Expenses |
|
2 |
|
|
|
3 |
|
|
|
72 |
|
|
|
9 |
|
Adjusted
EBITDA |
$ |
181 |
|
|
$ |
128 |
|
|
$ |
499 |
|
|
$ |
303 |
|
|
|
|
|
|
|
|
|
Net income attributable to
common stockholders |
$ |
46 |
|
|
$ |
61 |
|
|
$ |
46 |
|
|
$ |
123 |
|
Add: Transaction Related Expenses and non-cash stock-based
compensation |
|
7 |
|
|
|
5 |
|
|
|
82 |
|
|
|
14 |
|
Less: Income tax expense related to Transaction Related Expenses
and non-cash stock-based compensation |
|
(2 |
) |
|
|
(1 |
) |
|
|
(21 |
) |
|
|
(4 |
) |
Net income attributable to
common stockholders - excluding Transaction Related Expenses and
non-cash stock-based compensation |
$ |
51 |
|
|
$ |
65 |
|
|
$ |
107 |
|
|
$ |
133 |
|
|
|
|
|
|
|
|
|
Net income attributable to
common stockholders per common share, diluted - excluding
Transaction Related Expenses and non-cash stock-based
compensation |
$ |
0.50 |
|
|
$ |
0.73 |
|
|
$ |
1.07 |
|
|
$ |
1.49 |
|
|
|
|
|
|
|
|
|
Diluted weighted-average shares outstanding |
|
101 |
|
|
|
89 |
|
|
|
100 |
|
|
|
89 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Total Leverage Ratio, Net of All Cash,
in millions except for ratio
|
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 compensation |
|
20 |
|
(Gain) loss on disposals of assets, net |
|
(43 |
) |
Interest expense |
|
304 |
|
Income tax expense |
|
(13 |
) |
Amortization of program broadcast rights |
|
57 |
|
Common stock contributed to 401(k) plan |
|
4 |
|
Payments for program broadcast rights |
|
(63 |
) |
Pension expense |
|
(1 |
) |
Contributions to pension plans |
|
(8 |
) |
Adjustments for stations acquired or divested, financings and
expected synergies during the eight quarter period |
|
540 |
|
Transaction Related Expenses |
|
84 |
|
Operating Cash Flow as
defined in our Senior Credit Agreement |
$ |
1,582 |
|
Operating Cash Flow as
defined in our Senior Credit Agreement, divided by
two |
$ |
791 |
|
|
|
|
September 30, 2019 |
Adjusted Total
Indebtedness: |
|
Total outstanding principal, including current portion |
$ |
3,960 |
|
Cash |
|
(326 |
) |
Adjusted Total
Indebtedness, Net of All Cash |
$ |
3,634 |
|
|
|
Total Leverage Ratio,
Net of All Cash |
|
4.59 |
|
|
|
|
|
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