Gray Television, Inc. (“Gray,” “we,” “us” or “our”) (NYSE:
GTN) today announced its strong financial results for the
second quarter ended June 30, 2022, including a 231% increase in
net income attributable to common stockholders, compared to the
second quarter of 2021. Overall, the second quarter of 2022
produced record results, including $868 million in total revenue,
due to the combination of recent acquisitions, added scale,
increasingly efficient integrated operations, and the “on-year” of
the two-year political advertising cycle. We anticipate continued
strong financial results for the remainder of the year, especially
political advertising revenue. Based on our current forecasts, we
now anticipate that our political advertising revenue for calendar
year 2022 will match the $652 million of political advertising
revenue that our current portfolio of stations recorded in 2020, a
presidential election year.
Gray’s strong cash flow in the second quarter of 2022 enabled us
to return $125 million of capital to our shareholders during the
second quarter by, paying down $54 million of outstanding debt;
repurchasing $50 million of our common stock in the open market;
and paying $21 million of cash dividends to our preferred and
common shareholders. Even after these actions, Gray ended the
quarter with $162 million of cash on hand. Strong operating results
and political advertising revenue are expected to enable Gray to
fund additional de-leveraging and cash dividend payments during the
remainder of the year.
Due to the significant effect that material transactions have
had on our results of our operations, we present the financial
information herein consistent with both U.S. Generally Accepted
Accounting Principles (“GAAP” or “As Reported Basis”) and on a
Combined Historical Basis (“CHB”), which incorporates certain
historical results of acquired businesses, less the historical
results of divested businesses. We also furnish certain other
detailed non-GAAP metrics to provide more meaningful
period-over-period comparisons to assist the public in its analysis
and valuation of the Company. This additional information includes
a summary of incremental expenses that were specific to our
acquisitions, divestitures, and related financing activities
(“Transaction Related Expenses”), non-cash stock-based compensation
expenses and certain non-GAAP terms common in our industry. Please
refer to the detailed discussion of the foregoing terms and
concepts included elsewhere herein.
Summary of Second Quarter Operating Results |
As Reported Basis (the respective
2021 periods reflect the “off-year” of the two-year political
advertising cycle):
- Total revenue was $868 million, an
increase of 59% from the second quarter of 2021.
- Net income attributable to common
stockholders was $86 million, or $0.91 per fully diluted share, an
increase of 231% from the second quarter of 2021.
- Broadcast Cash Flow was $327
million, an increase of 79% from the second quarter of 2021.
- Adjusted EBITDA was $309 million, an
increase of 82% from the second quarter of 2021.
Combined Historical Basis (the respective 2021
periods reflect the “off-year” of the two year political
advertising cycle):
- Revenue was $868 million, an
increase of 15% from the second quarter of 2021.
- Core Advertising Revenue decreased
less than 1% from the second quarter of 2021.
- Broadcast Cash Flow was $330
million, an increase of 25% from the second quarter of 2021.
Other Key Metrics
- As of June 30, 2022, our Total
Leverage Ratio, Net of all Cash, was 5.16 times on a trailing
eight-quarter basis, netting our total cash balance of $162 million
and giving effect to all Transaction Related Expenses, which is
calculated as set forth in our Senior Credit Facility.
- During the three and six-months
ended June 30, 2022 and 2021, we incurred Transaction Related
Expenses on an As Reported Basis that included but were not limited
to legal and professional fees, severance and incentive
compensation and contract termination fees. In addition, we
recorded certain non-cash stock-based compensation expenses. These
expenses are summarized as follows:
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
June 30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
(in millions) |
Transaction Related
Expenses: |
|
|
|
|
|
|
|
Broadcasting |
$ |
2 |
|
$ |
- |
|
$ |
4 |
|
$ |
- |
Corporate and administrative |
- |
|
7 |
|
1 |
|
8 |
Miscellaneous expense, net |
- |
|
7 |
|
- |
|
7 |
Total Transaction Related Expenses |
$ |
2 |
|
$ |
14 |
|
$ |
5 |
|
$ |
15 |
|
|
|
|
|
|
|
|
Total non-cash stock-based
compensation |
$ |
6 |
|
$ |
4 |
|
$ |
11 |
|
$ |
7 |
|
|
|
|
|
|
|
|
Taxes
- During the six-months ended June 30,
2022 and 2021, we made income tax payments of $119 million and $38
million, respectively. During the remainder of 2022, based on our
current forecasts, we anticipate making income tax payments (net of
our expected $21 million refund) within a range of $70 million to
$90 million.
- As of June 30, 2022, we have an
aggregate of $337 million of various state operating loss
carryforwards, of which we expect that approximately half will be
utilized.
FOX Network Affiliation Agreement Renewal
On August 4, 2022, we renewed the network affiliations for all
of our FOX affiliated television stations across 27 markets,
including Portland, Oregon; Cincinnati, Ohio;
Greenville-Spartanburg, South Carolina; West Palm Beach, Florida;
Las Vegas, Nevada; Birmingham, Alabama; and New Orleans,
Louisiana.
Guidance for the Three-Months Ending September 30,
2022 |
Based on our current forecasts for the quarter
ending September 30, 2022, we anticipate the following key
financial results, as outlined below in approximate ranges. We
present revenue net of agency commissions. We exclude depreciation,
amortization and gain/loss on disposal of assets from our estimates
of operating expenses.
- Revenue:
- Core advertising revenue of $345 million to $355 million.
- Retransmission revenue of $365 million to $370 million.
- Political revenue of $193 million to $195 million.
- Production company revenue of $20 million to $21 million.
- Total revenue of $940 million to $959 million.
- Operating Expenses:
- Broadcasting expenses of $545 million to $550 million,
including retransmission expense of approximately $225 million and
transaction related expenses of approximately $1 million and
non-cash stock-based compensation expense of approximately $1
million.
- Production company expenses of approximately $17 million.
- Corporate expenses of $30 million to $35 million, including
transaction related expenses of approximately $1 million and
non-cash stock-based compensation expense of approximately $5
million.
Selected Operating Data on As Reported Basis
(Unaudited) |
|
|
|
|
|
Three Months Ended June 30, |
|
|
|
|
|
% Change |
|
|
|
|
% Change |
|
|
|
|
|
|
2022 to |
|
|
|
|
2022 to |
|
|
2022 |
|
2021 |
|
2021 |
|
|
2020 |
|
2020 |
|
|
(dollars in millions) |
Revenue (less agency
commissions): |
|
|
|
|
|
|
|
|
|
|
|
Broadcasting |
$ |
855 |
|
$ |
537 |
|
59 |
% |
|
$ |
449 |
|
90 |
% |
Production companies |
13 |
|
10 |
|
30 |
% |
|
2 |
|
550 |
% |
Total revenue |
$ |
868 |
|
$ |
547 |
|
59 |
% |
|
$ |
451 |
|
92 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Political advertising revenue |
$ |
90 |
|
$ |
6 |
|
1400 |
% |
|
$ |
21 |
|
329 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses (1): |
|
|
|
|
|
|
|
|
|
|
|
Broadcasting |
$ |
528 |
|
$ |
354 |
|
49 |
% |
|
$ |
324 |
|
63 |
% |
Production companies |
$ |
14 |
|
$ |
9 |
|
56 |
% |
|
$ |
5 |
|
180 |
% |
Corporate and administrative |
$ |
25 |
|
$ |
25 |
|
0 |
% |
|
$ |
17 |
|
47 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
99 |
|
$ |
39 |
|
154 |
% |
|
$ |
11 |
|
800 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP cash flow (2): |
|
|
|
|
|
|
|
|
|
|
|
Broadcast Cash Flow |
$ |
327 |
|
$ |
183 |
|
79 |
% |
|
$ |
123 |
|
166 |
% |
Broadcast Cash Flow Less |
|
|
|
|
|
|
|
|
|
|
|
Cash Corporate Expenses |
$ |
306 |
|
$ |
161 |
|
90 |
% |
|
$ |
108 |
|
183 |
% |
Free Cash Flow |
$ |
38 |
|
$ |
34 |
|
12 |
% |
|
$ |
35 |
|
9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
|
|
% Change |
|
|
|
|
% Change |
|
|
|
|
|
|
2022 to |
|
|
|
|
2022 to |
|
|
2022 |
|
2021 |
|
2021 |
|
|
2020 |
|
2020 |
|
|
(dollars in millions) |
Revenue (less agency
commissions): |
|
|
|
|
|
|
|
|
|
|
|
Broadcasting |
$ |
1,659 |
|
$ |
1,067 |
|
55 |
% |
|
$ |
964 |
|
72 |
% |
Production companies |
36 |
|
24 |
|
50 |
% |
|
21 |
|
71 |
% |
Total revenue |
$ |
1,695 |
|
$ |
1,091 |
|
55 |
% |
|
$ |
985 |
|
72 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Political advertising revenue |
$ |
116 |
|
$ |
15 |
|
673 |
% |
|
$ |
57 |
|
104 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses (1): |
|
|
|
|
|
|
|
|
|
|
|
Broadcasting |
$ |
1,058 |
|
$ |
715 |
|
48 |
% |
|
$ |
659 |
|
61 |
% |
Production companies |
$ |
40 |
|
$ |
26 |
|
54 |
% |
|
$ |
24 |
|
67 |
% |
Corporate and administrative |
$ |
53 |
|
$ |
43 |
|
23 |
% |
|
$ |
32 |
|
66 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
161 |
|
$ |
78 |
|
106 |
% |
|
$ |
64 |
|
152 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP cash flow (2): |
|
|
|
|
|
|
|
|
|
|
|
Broadcast Cash Flow |
$ |
598 |
|
$ |
351 |
|
70 |
% |
|
$ |
304 |
|
97 |
% |
Broadcast Cash Flow Less |
|
|
|
|
|
|
|
|
|
|
|
Cash Corporate Expenses |
$ |
554 |
|
$ |
314 |
|
76 |
% |
|
$ |
276 |
|
101 |
% |
Free Cash Flow |
$ |
177 |
|
$ |
112 |
|
58 |
% |
|
$ |
120 |
|
48 |
% |
(1) Excludes depreciation, amortization and
gain 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.
Selected Operating Data on As Reported Basis
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
2022 |
|
|
2021 |
|
|
Amount |
|
Percent |
|
|
|
|
Percent |
|
|
|
|
Percent |
|
|
Increase |
|
Increase |
|
|
Amount |
|
of Total |
|
|
Amount |
|
of Total |
|
|
(Decrease) |
|
(Decrease) |
|
|
(dollars in millions) |
Revenue (less agency
commissions): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core advertising |
$ |
366 |
|
42 |
% |
|
$ |
279 |
|
51 |
% |
|
$ |
87 |
|
31 |
% |
Political |
90 |
|
10 |
% |
|
6 |
|
1 |
% |
|
84 |
|
1400 |
% |
Retransmission consent |
382 |
|
44 |
% |
|
242 |
|
44 |
% |
|
140 |
|
58 |
% |
Production companies |
13 |
|
1 |
% |
|
10 |
|
2 |
% |
|
3 |
|
30 |
% |
Other |
17 |
|
3 |
% |
|
10 |
|
2 |
% |
|
7 |
|
70 |
% |
Total |
$ |
868 |
|
100 |
% |
|
$ |
547 |
|
100 |
% |
|
$ |
321 |
|
59 |
% |
Operating expenses
(before |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
depreciation, amortization and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
gain on disposal of assets): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Broadcasting: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Station expenses |
$ |
300 |
|
57 |
% |
|
$ |
209 |
|
59 |
% |
|
$ |
91 |
|
|
44 |
% |
Retransmission expense |
225 |
|
43 |
% |
|
144 |
|
41 |
% |
|
81 |
|
|
56 |
% |
Transaction Related Expenses |
2 |
|
0 |
% |
|
- |
|
0 |
% |
|
2 |
|
|
100 |
% |
Non-cash stock-based |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
compensation |
1 |
|
0 |
% |
|
1 |
|
0 |
% |
|
- |
|
|
0 |
% |
Total broadcasting expense |
$ |
528 |
|
100 |
% |
|
$ |
354 |
|
100 |
% |
|
$ |
174 |
|
|
49 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production companies expense |
$ |
14 |
|
|
|
|
$ |
9 |
|
|
|
|
$ |
5 |
|
|
56 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and administrative: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate expenses |
$ |
20 |
|
80 |
% |
|
$ |
15 |
|
60 |
% |
|
$ |
5 |
|
|
33 |
% |
Transaction Related Expenses |
- |
|
0 |
% |
|
7 |
|
28 |
% |
|
(7 |
) |
|
(100 |
)% |
Non-cash stock-based compensation |
5 |
|
20 |
% |
|
3 |
|
12 |
% |
|
2 |
|
|
67 |
% |
Total corporate and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
administrative expense |
$ |
25 |
|
100 |
% |
|
$ |
25 |
|
100 |
% |
|
$
- |
|
|
0 |
% |
Selected Operating Data on As Reported Basis
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
2022 |
|
|
2021 |
|
|
Amount |
|
Percent |
|
|
|
|
Percent |
|
|
|
|
Percent |
|
|
Increase |
|
Increase |
|
|
Amount |
|
of Total |
|
|
Amount |
|
of Total |
|
|
(Decrease) |
|
(Decrease) |
|
|
(dollars in millions) |
Revenue (less agency
commissions): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core advertising |
$ |
731 |
|
43 |
% |
|
$ |
539 |
|
49 |
% |
|
$ |
192 |
|
36 |
% |
Political |
116 |
|
7 |
% |
|
15 |
|
1 |
% |
|
101 |
|
673 |
% |
Retransmission consent |
775 |
|
46 |
% |
|
489 |
|
45 |
% |
|
286 |
|
58 |
% |
Production companies |
36 |
|
2 |
% |
|
24 |
|
2 |
% |
|
12 |
|
50 |
% |
Other |
37 |
|
2 |
% |
|
24 |
|
3 |
% |
|
13 |
|
54 |
% |
Total |
$ |
1,695 |
|
100 |
% |
|
$ |
1,091 |
|
100 |
% |
|
$ |
604 |
|
55 |
% |
Operating expenses
(before |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
depreciation, amortization and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
gain on disposal of assets): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Broadcasting: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Station expenses |
$ |
600 |
|
57 |
% |
|
$ |
425 |
|
60 |
% |
|
$ |
175 |
|
|
41 |
% |
Retransmission expense |
452 |
|
43 |
% |
|
289 |
|
40 |
% |
|
163 |
|
|
56 |
% |
Transaction Related Expenses |
4 |
|
0 |
% |
|
- |
|
0 |
% |
|
4 |
|
|
100 |
% |
Non-cash stock-based |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
compensation |
2 |
|
0 |
% |
|
1 |
|
0 |
% |
|
1 |
|
|
100 |
% |
Total broadcasting expense |
$ |
1,058 |
|
100 |
% |
|
$ |
715 |
|
100 |
% |
|
$ |
343 |
|
|
48 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production companies expense |
$ |
40 |
|
|
|
|
$ |
26 |
|
|
|
|
$ |
14 |
|
|
54 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and administrative: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate expenses |
$ |
43 |
|
81 |
% |
|
$ |
29 |
|
67 |
% |
|
$ |
14 |
|
|
48 |
% |
Transaction Related Expenses |
1 |
|
2 |
% |
|
8 |
|
19 |
% |
|
(7 |
) |
|
(88 |
)% |
Non-cash stock-based |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
compensation |
9 |
|
17 |
% |
|
6 |
|
14 |
% |
|
3 |
|
|
50 |
% |
Total corporate and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
administrative expense |
$ |
53 |
|
100 |
% |
|
$ |
43 |
|
100 |
% |
|
$ |
10 |
|
|
23 |
% |
Detail Table of Operating Results on As Reported Basis
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
June 30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
(in millions, except for per share information) |
Revenue (less agency
commissions): |
|
|
|
|
|
|
|
|
|
|
|
Broadcasting |
$ |
855 |
|
|
$ |
537 |
|
|
$ |
1,659 |
|
|
$ |
1,067 |
|
Production companies |
13 |
|
|
10 |
|
|
36 |
|
|
24 |
|
Total revenue (less agency commissions) |
868 |
|
|
547 |
|
|
1,695 |
|
|
1,091 |
|
Operating expenses before
depreciation, amortization |
|
|
|
|
|
|
|
|
|
|
|
and gain on disposal of assets, net: |
|
|
|
|
|
|
|
|
|
|
|
Broadcasting |
528 |
|
|
354 |
|
|
1,058 |
|
|
715 |
|
Production companies |
14 |
|
|
9 |
|
|
40 |
|
|
26 |
|
Corporate and administrative |
25 |
|
|
25 |
|
|
53 |
|
|
43 |
|
Depreciation |
31 |
|
|
25 |
|
|
63 |
|
|
50 |
|
Amortization of intangible
assets |
52 |
|
|
27 |
|
|
104 |
|
|
53 |
|
Gain on disposal of assets,
net |
- |
|
|
(1 |
) |
|
(5 |
) |
|
(5 |
) |
Operating expenses |
650 |
|
|
439 |
|
|
1,313 |
|
|
882 |
|
Operating income |
218 |
|
|
108 |
|
|
382 |
|
|
209 |
|
Other expense: |
|
|
|
|
|
|
|
|
|
|
|
Miscellaneous expense, net |
- |
|
|
(7 |
) |
|
(2 |
) |
|
(6 |
) |
Interest expense |
(81 |
) |
|
(47 |
) |
|
(160 |
) |
|
(95 |
) |
Income before income
taxes |
137 |
|
|
54 |
|
|
220 |
|
|
108 |
|
Income tax expense |
38 |
|
|
15 |
|
|
59 |
|
|
30 |
|
Net income |
99 |
|
|
39 |
|
|
161 |
|
|
78 |
|
Preferred stock dividends |
13 |
|
|
13 |
|
|
26 |
|
|
26 |
|
Net income attributable to
common stockholders |
$ |
86 |
|
|
$ |
26 |
|
|
$ |
135 |
|
|
$ |
52 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic per share
information: |
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to common stockholders |
$ |
0.92 |
|
|
$ |
0.27 |
|
|
$ |
1.45 |
|
|
$ |
0.55 |
|
Weighted-average shares outstanding |
93 |
|
|
95 |
|
|
93 |
|
|
94 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted per share
information: |
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to common stockholders |
$ |
0.91 |
|
|
$ |
0.27 |
|
|
$ |
1.44 |
|
|
$ |
0.55 |
|
Weighted-average shares outstanding |
94 |
|
|
95 |
|
|
94 |
|
|
95 |
|
Selected Operating Data on Combined Historical Basis
(Unaudited) |
|
|
|
|
|
Three Months Ended June 30, |
|
|
|
|
|
% Change |
|
|
|
|
% Change |
|
|
|
|
|
|
2022 to |
|
|
|
|
2022 to |
|
|
2022 |
|
2021 |
|
2021 |
|
|
2020 |
|
2020 |
|
|
(dollars in millions) |
Revenue (less agency
commissions): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Broadcast |
$ |
855 |
|
$ |
744 |
|
15 |
% |
|
$ |
626 |
|
37 |
% |
Production companies |
13 |
|
10 |
|
30 |
% |
|
$ |
2 |
|
550 |
% |
Total |
$ |
868 |
|
$ |
754 |
|
15 |
% |
|
$ |
628 |
|
38 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses (1): |
|
|
|
|
|
|
|
|
|
|
|
Broadcast |
$ |
528 |
|
$ |
499 |
|
6 |
% |
|
$ |
455 |
|
16 |
% |
Production companies |
$ |
14 |
|
$ |
9 |
|
56 |
% |
|
$ |
5 |
|
180 |
% |
Corporate and administrative |
$ |
25 |
|
$ |
25 |
|
0 |
% |
|
$ |
17 |
|
47 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP cash flow (2): |
|
|
|
|
|
|
|
|
|
|
|
Broadcast Cash Flow |
$ |
330 |
|
$ |
264 |
|
25 |
% |
|
$ |
186 |
|
77 |
% |
Broadcast Cash Flow Less Cash |
|
|
|
|
|
|
|
|
|
|
|
Corporate Expenses |
$ |
309 |
|
$ |
242 |
|
28 |
% |
|
$ |
171 |
|
81 |
% |
Operating Cash Flow as defined in |
|
|
|
|
|
|
|
|
|
|
|
the 2019 Senior Credit Facility |
$ |
310 |
|
$ |
249 |
|
24 |
% |
|
$ |
171 |
|
81 |
% |
Free Cash Flow |
$ |
43 |
|
$ |
75 |
|
(43 |
)% |
|
$ |
57 |
|
(25 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
|
|
% Change |
|
|
|
|
% Change |
|
|
|
|
|
|
2022 to |
|
|
|
|
2022 to |
|
|
2022 |
|
2021 |
|
2021 |
|
|
2020 |
|
2020 |
|
|
(dollars in millions) |
Revenue (less agency
commissions): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Broadcast |
$ |
1,659 |
|
$ |
1,483 |
|
12 |
% |
|
$ |
1,351 |
|
23 |
% |
Production companies |
36 |
|
24 |
|
50 |
% |
|
$ |
21 |
|
71 |
% |
Total |
$ |
1,695 |
|
$ |
1,507 |
|
12 |
% |
|
$ |
1,372 |
|
24 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses (1): |
|
|
|
|
|
|
|
|
|
|
|
Broadcast |
$ |
1,058 |
|
$ |
1,004 |
|
5 |
% |
|
$ |
932 |
|
14 |
% |
Production companies |
$ |
40 |
|
$ |
26 |
|
54 |
% |
|
$ |
24 |
|
67 |
% |
Corporate and administrative |
$ |
53 |
|
$ |
44 |
|
20 |
% |
|
$ |
32 |
|
66 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP cash flow (2): |
|
|
|
|
|
|
|
|
|
|
|
Broadcast Cash Flow |
$ |
602 |
|
$ |
517 |
|
16 |
% |
|
$ |
454 |
|
33 |
% |
Broadcast Cash Flow Less Cash |
|
|
|
|
|
|
|
|
|
|
|
Corporate Expenses |
$ |
558 |
|
$ |
480 |
|
16 |
% |
|
$ |
426 |
|
31 |
% |
Operating Cash Flow as defined in |
|
|
|
|
|
|
|
|
|
|
|
the 2019 Senior Credit Facility |
$ |
561 |
|
$ |
488 |
|
15 |
% |
|
$ |
426 |
|
32 |
% |
Free Cash Flow |
$ |
186 |
|
$ |
194 |
|
(4 |
)% |
|
$ |
192 |
|
(3 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
(1) Excludes depreciation, amortization and
gain 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.
Selected Operating Data on Combined Historical Basis
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
2022 |
|
|
2021 |
|
|
Amount |
|
|
Percent |
|
|
|
|
Percent |
|
|
|
|
Percent |
|
|
Increase |
|
|
Increase |
|
|
Amount |
|
of Total |
|
|
Amount |
|
of Total |
|
|
(Decrease) |
|
|
(Decrease) |
|
|
(dollars in millions) |
Revenue (less agency
commissions): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core advertising |
$ |
366 |
|
42 |
% |
|
$ |
369 |
|
49 |
% |
|
$ |
(3 |
) |
|
(1 |
)% |
Political |
90 |
|
10 |
% |
|
8 |
|
1 |
% |
|
82 |
|
|
1025 |
% |
Retransmission consent |
382 |
|
44 |
% |
|
351 |
|
47 |
% |
|
31 |
|
|
9 |
% |
Production companies |
13 |
|
1 |
% |
|
10 |
|
1 |
% |
|
3 |
|
|
30 |
% |
Other |
17 |
|
3 |
% |
|
16 |
|
2 |
% |
|
1 |
|
|
6 |
% |
Total |
$ |
868 |
|
100 |
% |
|
$ |
754 |
|
100 |
% |
|
$ |
114 |
|
|
15 |
% |
Operating expenses
(before |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
depreciation, amortization and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
gain on disposal of assets): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Broadcasting: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Station expenses |
$ |
300 |
|
57 |
% |
|
$ |
291 |
|
58 |
% |
|
$ |
9 |
|
|
3 |
% |
Retransmission expense |
225 |
|
43 |
% |
|
207 |
|
42 |
% |
|
18 |
|
|
9 |
% |
Transaction Related Expenses |
2 |
|
0 |
% |
|
- |
|
0 |
% |
|
2 |
|
|
100 |
% |
Non-cash stock-based |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
compensation |
1 |
|
0 |
% |
|
1 |
|
0 |
% |
|
- |
|
|
0 |
% |
Total broadcasting expense |
$ |
528 |
|
100 |
% |
|
$ |
499 |
|
100 |
% |
|
$ |
29 |
|
|
6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production companies expense |
$ |
14 |
|
|
|
|
$ |
9 |
|
|
|
|
$ |
5 |
|
|
56 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and administrative: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate expenses |
$ |
20 |
|
80 |
% |
|
$ |
15 |
|
60 |
% |
|
$ |
5 |
|
|
33 |
% |
Transaction Related Expenses |
- |
|
0 |
% |
|
7 |
|
28 |
% |
|
(7 |
) |
|
(100 |
)% |
Non-cash stock-based |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
compensation |
5 |
|
20 |
% |
|
3 |
|
12 |
% |
|
2 |
|
|
67 |
% |
Total corporate and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
administrative expense |
$ |
25 |
|
100 |
% |
|
$ |
25 |
|
100 |
% |
|
$
- |
|
|
0 |
% |
Selected Operating Data on Combined Historical Basis
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
2022 |
|
|
2021 |
|
|
Amount |
|
Percent |
|
|
|
|
Percent |
|
|
|
|
Percent |
|
|
Increase |
|
Increase |
|
|
Amount |
|
of Total |
|
|
Amount |
|
of Total |
|
|
(Decrease) |
|
(Decrease) |
|
|
(dollars in millions) |
Revenue (less agency
commissions): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core advertising |
$ |
731 |
|
43 |
% |
|
$ |
720 |
|
48 |
% |
|
$ |
11 |
|
2 |
% |
Political |
116 |
|
7 |
% |
|
21 |
|
1 |
% |
|
95 |
|
452 |
% |
Retransmission consent |
775 |
|
46 |
% |
|
707 |
|
47 |
% |
|
68 |
|
10 |
% |
Production companies |
36 |
|
2 |
% |
|
24 |
|
2 |
% |
|
12 |
|
50 |
% |
Other |
37 |
|
2 |
% |
|
35 |
|
2 |
% |
|
2 |
|
6 |
% |
Total |
$ |
1,695 |
|
100 |
% |
|
$ |
1,507 |
|
100 |
% |
|
$ |
188 |
|
12 |
% |
Operating expenses
(before |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
depreciation, amortization and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
gain on disposal of assets): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Broadcasting: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Station expenses |
$ |
601 |
|
57 |
% |
|
$ |
586 |
|
58 |
% |
|
$ |
15 |
|
|
3 |
% |
Retransmission expense |
451 |
|
43 |
% |
|
416 |
|
42 |
% |
|
35 |
|
|
8 |
% |
Transaction Related Expenses |
4 |
|
0 |
% |
|
- |
|
0 |
% |
|
4 |
|
|
100 |
% |
Non-cash stock-based compensation |
2 |
|
0 |
% |
|
2 |
|
0 |
% |
|
- |
|
|
0 |
% |
Total broadcasting expense |
$ |
1,058 |
|
100 |
% |
|
$ |
1,004 |
|
100 |
% |
|
$ |
54 |
|
|
5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production companies expense |
$ |
40 |
|
|
|
|
$ |
26 |
|
|
|
|
$ |
14 |
|
|
54 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and administrative: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate expenses |
$ |
43 |
|
81 |
% |
|
$ |
30 |
|
68 |
% |
|
$ |
13 |
|
|
43 |
% |
Transaction Related Expenses |
1 |
|
2 |
% |
|
8 |
|
18 |
% |
|
(7 |
) |
|
(88 |
)% |
Non-cash stock-based compensation |
9 |
|
17 |
% |
|
6 |
|
14 |
% |
|
3 |
|
|
50 |
% |
Total corporate and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
administrative expense |
$ |
53 |
|
100 |
% |
|
$ |
44 |
|
100 |
% |
|
$ |
9 |
|
|
20 |
% |
Other Financial Data on As Reported Basis
(Unaudited) |
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
2022 |
|
2021 |
|
(in millions) |
|
|
|
|
|
|
Net cash provided by operating activities |
$ |
330 |
|
|
$ |
238 |
|
Net cash used in investing
activities |
(201 |
) |
|
(177 |
) |
Net cash used in financing
activities |
(156 |
) |
|
(49 |
) |
Net (decrease) increase in
cash |
$ |
(27 |
) |
|
$ |
12 |
|
|
|
|
|
|
|
|
As of |
|
June 30, |
|
December 31, |
|
2022 |
|
2021 |
|
(in millions) |
|
|
|
|
|
|
Cash |
$ |
162 |
|
|
$ |
189 |
|
Long-term debt, including
current portion, less deferred |
|
|
|
|
|
financing costs |
$ |
6,705 |
|
|
$ |
6,755 |
|
Series A Perpetual Preferred
Stock |
$ |
650 |
|
|
$ |
650 |
|
Borrowing availability under
Revolving Credit Facility |
$ |
496 |
|
|
$ |
497 |
|
The Company
We are a multimedia company headquartered in Atlanta, Georgia.
We are the nation’s largest owner of top-rated local television
stations and digital assets in the United States. Our television
stations serve 113 television markets that collectively reach
approximately 36 percent of US television households. This
portfolio includes 80 markets with the top-rated television station
and 100 markets with the first and/or second highest rated
television station. We also own video program companies Raycom
Sports, Tupelo Media Group (formerly Tupelo Honey), PowerNation
Studios, as well as the studio production facilities Assembly
Atlanta and Third Rail Studios.
Cautionary Statements for Purposes of the
“Safe Harbor” Provisions of the Private Securities Litigation
Reform Act
This press release contains certain forward-looking statements
that are based largely on our current expectations and reflect
various estimates and assumptions by us. These statements are
statements other than those of historical fact and may be
identified by words such as “estimates,” “expect,” “anticipate,”
“will,” “implied,” “assume” and similar expressions.
Forward-looking statements are subject to certain risks, trends and
uncertainties that could cause actual results and achievements to
differ materially from those expressed in such forward-looking
statements. Such risks, trends and uncertainties, which in some
instances are beyond our control, include our inability to achieve
expected synergies from recent transactions on a timely basis or at
all, the impact of recently completed transactions, estimates of
future revenue, future expenses and other future events. We are
subject to additional risks and uncertainties described in our
quarterly and annual reports filed with the Securities and Exchange
Commission from time to time, including in the “Risk Factors,” and
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” sections contained therein, which reports
are made publicly available via our website, www.gray.tv. Any
forward-looking statements in this press release should be
evaluated in light of these important risk factors. This press
release reflects management’s views as of the date hereof. Except
to the extent required by applicable law, Gray undertakes no
obligation to update or revise any information contained in this
press release beyond the published date, whether as a result of new
information, future events or otherwise. 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, 2021,
and may be contained in reports subsequently filed with the U.S.
Securities and Exchange Commission and available at
www.sec.gov.
Conference Call Information
We will host a conference call to discuss our second quarter
operating results on August 5, 2022. The call will begin at 11:00
AM Eastern Time. The live dial-in number is 1-800-289-0720 and the
confirmation code is 7144937. 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 1-888-203-1112 and the
confirmation code is 7144937, until September 4, 2022.
Gray Contacts
Web site: www.gray.tv
Hilton H. Howell, Jr., Executive Chairman and
Chief Executive Officer, (404) 266-5513
Pat LaPlatney, President and Co-Chief Executive
Officer, (334) 206-1400
Jim Ryan, Executive Vice President and Chief
Financial Officer, (404) 504-9828
Kevin 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, 2020 through December 31, 2021, we
completed several acquisition and 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 materially affected our operations. We refer to all
television stations acquired or divested from January 1, 2020
through December 31, 2021, 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
United Stated Generally Accepted Accounting Principles (“GAAP”) or
the requirements for proforma financial information under
Regulation S-X under the Securities Act.
From time to time, we supplement our 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 on
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 on 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,
Transaction Related Expenses and 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 on 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, Transaction Related Expenses, other
adjustments, certain pension 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
gives effect to the revenue and broadcast expenses of all completed
acquisitions and divestitures as if they had been acquired or
divested, respectively, on July 1, 2020. 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 on 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 of 1933.
We define Free Cash Flow as net income or loss, plus loss on
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, Transactions Related Expenses, broadcast other
adjustments, certain pension 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 certain defined
purchases) and income taxes paid (net of any refunds received and
certain defined payments).
We define Adjusted EBITDA as net income or loss, plus loss on
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: |
|
|
Three Months Ended June 30, |
|
2022 |
|
2021 |
|
2020 |
|
(in millions) |
|
|
|
|
|
|
|
|
|
Net income |
$ |
99 |
|
|
$ |
39 |
|
|
$ |
11 |
|
Adjustments to reconcile from net income to |
|
|
|
|
|
|
|
|
Free Cash Flow: |
|
|
|
|
|
|
|
|
Depreciation |
31 |
|
|
25 |
|
|
21 |
|
Amortization of intangible assets |
52 |
|
|
27 |
|
|
26 |
|
Non-cash stock-based compensation |
6 |
|
|
3 |
|
|
3 |
|
Gain on disposal of assets, net |
- |
|
|
(1 |
) |
|
(7 |
) |
Miscellaneous expense, net |
- |
|
|
7 |
|
|
2 |
|
Interest expense |
81 |
|
|
47 |
|
|
46 |
|
Income tax expense |
38 |
|
|
15 |
|
|
6 |
|
Amortization of program broadcast rights |
12 |
|
|
8 |
|
|
10 |
|
Payments for program broadcast rights |
(13 |
) |
|
(9 |
) |
|
(10 |
) |
Corporate and administrative expenses before |
|
|
|
|
|
|
|
|
depreciation, amortization of intangible assets and |
|
|
|
|
|
|
|
|
non-cash stock-based compensation |
21 |
|
|
22 |
|
|
15 |
|
Broadcast Cash
Flow |
327 |
|
|
183 |
|
|
123 |
|
Corporate and administrative expenses before |
|
|
|
|
|
|
|
|
depreciation, amortization of intangible assets and |
|
|
|
|
|
|
|
|
non-cash stock-based compensation |
(21 |
) |
|
(22 |
) |
|
(15 |
) |
Broadcast Cash Flow
Less Cash Corporate Expenses |
306 |
|
|
161 |
|
|
108 |
|
Pension benefit |
(1 |
) |
|
- |
|
|
- |
|
Interest expense |
(81 |
) |
|
(47 |
) |
|
(46 |
) |
Amortization of deferred financing costs |
4 |
|
|
3 |
|
|
3 |
|
Preferred stock dividends |
(13 |
) |
|
(13 |
) |
|
(13 |
) |
Common stock dividends |
(8 |
) |
|
(7 |
) |
|
- |
|
Purchases of property and equipment (1) |
(50 |
) |
|
(28 |
) |
|
(24 |
) |
Reimbursements of property and equipment purchases |
- |
|
|
3 |
|
|
8 |
|
Income taxes paid, net of refunds |
(119 |
) |
|
(38 |
) |
|
(1 |
) |
Free Cash
Flow |
$ |
38 |
|
|
$ |
34 |
|
|
$ |
35 |
|
(1) Excludes approximately $62 million and $80
million related to the Assembly Atlanta project in 2022 and 2021,
respectively.
Reconciliation of Non-GAAP Terms on As Reported
Basis: |
|
|
Six Months Ended June 30, |
|
2022 |
|
2021 |
|
2020 |
|
(in millions) |
|
|
|
|
|
|
|
|
|
Net income |
$ |
161 |
|
|
$ |
78 |
|
|
$ |
64 |
|
Adjustments to reconcile from net income to |
|
|
|
|
|
|
|
|
Free Cash Flow: |
|
|
|
|
|
|
|
|
Depreciation |
63 |
|
|
50 |
|
|
42 |
|
Amortization of intangible assets |
104 |
|
|
53 |
|
|
52 |
|
Non-cash stock-based compensation |
11 |
|
|
7 |
|
|
7 |
|
Non-cash 401(k) expense |
- |
|
|
1 |
|
|
- |
|
Gain on disposal of assets, net |
(5 |
) |
|
(5 |
) |
|
(13 |
) |
Miscellaneous expense, net |
2 |
|
|
6 |
|
|
3 |
|
Interest expense |
160 |
|
|
95 |
|
|
98 |
|
Income tax expense |
59 |
|
|
30 |
|
|
24 |
|
Amortization of program broadcast rights |
25 |
|
|
17 |
|
|
19 |
|
Payments for program broadcast rights |
(26 |
) |
|
(18 |
) |
|
(20 |
) |
Corporate and administrative expenses before |
|
|
|
|
|
|
|
|
depreciation, amortization of intangible assets and |
|
|
|
|
|
|
|
|
non-cash stock-based compensation |
44 |
|
|
37 |
|
|
28 |
|
Broadcast Cash
Flow |
598 |
|
|
351 |
|
|
304 |
|
Corporate and administrative expenses before |
|
|
|
|
|
|
|
|
depreciation, amortization of intangible assets and |
|
|
|
|
|
|
|
|
non-cash stock-based compensation |
(44 |
) |
|
(37 |
) |
|
(28 |
) |
Broadcast Cash Flow
Less Cash Corporate Expenses |
554 |
|
|
314 |
|
|
276 |
|
Pension benefit |
(2 |
) |
|
- |
|
|
- |
|
Interest expense |
(160 |
) |
|
(95 |
) |
|
(98 |
) |
Amortization of deferred financing costs |
8 |
|
|
6 |
|
|
6 |
|
Preferred stock dividends |
(26 |
) |
|
(26 |
) |
|
(26 |
) |
Common stock dividends |
(16 |
) |
|
(15 |
) |
|
- |
|
Purchases of property and equipment (1) |
(67 |
) |
|
(41 |
) |
|
(51 |
) |
Reimbursements of property and equipment purchases |
5 |
|
|
7 |
|
|
14 |
|
Income taxes paid, net of refunds |
(119 |
) |
|
(38 |
) |
|
(1 |
) |
Free Cash
Flow |
$ |
177 |
|
|
$ |
112 |
|
|
$ |
120 |
|
|
|
|
|
|
|
|
|
|
(1) Excludes approximately $92 million and $80
million related to the Assembly Atlanta project in 2022 and 2021,
respectively.
Reconciliation of Non-GAAP Terms on Combined Historical
Basis: |
|
|
Three Months Ended |
|
June 30, |
|
2022 |
|
2021 |
|
2020 |
|
(in millions) |
|
|
|
|
|
|
|
|
|
Net income |
$ |
99 |
|
|
$ |
69 |
|
|
$ |
22 |
|
Adjustments to reconcile from net income to |
|
|
|
|
|
|
|
|
Free Cash Flow: |
|
|
|
|
|
|
|
|
Depreciation |
31 |
|
|
32 |
|
|
30 |
|
Amortization of intangible assets |
52 |
|
|
28 |
|
|
28 |
|
Non-cash stock-based compensation |
6 |
|
|
4 |
|
|
4 |
|
Gain on disposals of assets, net |
- |
|
|
(3 |
) |
|
(7 |
) |
Miscellaneous expense, net |
- |
|
|
7 |
|
|
2 |
|
Interest expense |
81 |
|
|
77 |
|
|
77 |
|
Income tax expense (benefit) |
38 |
|
|
9 |
|
|
(2 |
) |
Amortization of program broadcast rights |
12 |
|
|
13 |
|
|
15 |
|
Payments for program broadcast rights |
(13 |
) |
|
(14 |
) |
|
(15 |
) |
Corporate and administrative expenses excluding |
|
|
|
|
|
|
|
|
depreciation, amortization of intangible assets and |
|
|
|
|
|
|
|
|
non-cash stock-based compensation |
21 |
|
|
22 |
|
|
15 |
|
Broadcast Transaction Related Expenses |
2 |
|
|
- |
|
|
- |
|
Broadcast other adjustments |
1 |
|
|
20 |
|
|
17 |
|
Broadcast Cash
Flow |
330 |
|
|
264 |
|
|
186 |
|
Corporate and administrative expenses excluding |
|
|
|
|
|
|
|
|
depreciation, amortization of intangible assets and |
|
|
|
|
|
|
|
|
non-cash stock-based compensation |
(21 |
) |
|
(22 |
) |
|
(15 |
) |
Broadcast Cash Flow
Less Cash Corporate Expenses |
309 |
|
|
242 |
|
|
171 |
|
Pension benefit |
(1 |
) |
|
- |
|
|
- |
|
Adjustments for unrestricted subsidiaries |
2 |
|
|
- |
|
|
- |
|
Corporate Transaction Related Expenses |
- |
|
|
7 |
|
|
- |
|
Operating Cash Flow as
Defined in Senior Credit Agreement |
310 |
|
|
249 |
|
|
171 |
|
Interest expense |
(81 |
) |
|
(77 |
) |
|
(77 |
) |
Amortization of deferred financing costs |
4 |
|
|
3 |
|
|
3 |
|
Preferred dividends |
(13 |
) |
|
(13 |
) |
|
(13 |
) |
Common stock dividends |
(8 |
) |
|
(7 |
) |
|
- |
|
Purchases of property and equipment (1) |
(50 |
) |
|
(32 |
) |
|
(27 |
) |
Reimbursements of property and equipment purchases |
- |
|
|
4 |
|
|
9 |
|
Income taxes paid, net of refunds |
(119 |
) |
|
(52 |
) |
|
(9 |
) |
Free Cash
Flow |
$ |
43 |
|
|
$ |
75 |
|
|
$ |
57 |
|
(1) Excludes approximately $62 million and $80
million related to the Assembly Atlanta project in 2022 and 2021,
respectively.
|
Reconciliation of Non-GAAP Terms on Combined Historical
Basis: |
|
|
Six Months Ended |
|
June 30, |
|
2022 |
|
2021 |
|
2020 |
|
(in millions) |
|
|
|
|
|
|
|
|
|
Net income |
$ |
161 |
|
|
$ |
142 |
|
|
$ |
91 |
|
Adjustments to reconcile from net income to |
|
|
|
|
|
|
|
|
Free Cash Flow: |
|
|
|
|
|
|
|
|
Depreciation |
63 |
|
|
64 |
|
|
59 |
|
Amortization of intangible assets |
104 |
|
|
56 |
|
|
57 |
|
Non-cash stock-based compensation |
11 |
|
|
8 |
|
|
9 |
|
Non-cash 401(k) expense |
- |
|
|
1 |
|
|
- |
|
Gain on disposals of assets, net |
(5 |
) |
|
(7 |
) |
|
(16 |
) |
Miscellaneous expense, net |
2 |
|
|
6 |
|
|
25 |
|
Interest expense |
160 |
|
|
155 |
|
|
155 |
|
Income tax expense |
59 |
|
|
17 |
|
|
12 |
|
Amortization of program broadcast rights |
25 |
|
|
27 |
|
|
29 |
|
Payments for program broadcast rights |
(26 |
) |
|
(29 |
) |
|
(30 |
) |
Corporate and administrative expenses excluding |
|
|
|
|
|
|
|
|
depreciation, amortization of intangible assets and |
|
|
|
|
|
|
|
|
non-cash stock-based compensation |
44 |
|
|
37 |
|
|
28 |
|
Broadcast Transaction Related Expenses |
4 |
|
|
- |
|
|
- |
|
Broadcast other adjustments |
- |
|
|
40 |
|
|
35 |
|
Broadcast Cash
Flow |
602 |
|
|
517 |
|
|
454 |
|
Corporate and administrative expenses excluding |
|
|
|
|
|
|
|
|
depreciation, amortization of intangible assets and |
|
|
|
|
|
|
|
|
non-cash stock-based compensation |
(44 |
) |
|
(37 |
) |
|
(28 |
) |
Broadcast Cash Flow
Less Cash Corporate Expenses |
558 |
|
|
480 |
|
|
426 |
|
Pension benefit |
(2 |
) |
|
- |
|
|
- |
|
Adjustments for unrestricted subsidiaries |
4 |
|
|
- |
|
|
- |
|
Corporate Transaction Related Expenses |
1 |
|
|
8 |
|
|
- |
|
Operating Cash Flow as
defined in Senior Credit Agreement |
561 |
|
|
488 |
|
|
426 |
|
Interest expense |
(160 |
) |
|
(155 |
) |
|
(155 |
) |
Amortization of deferred financing costs |
8 |
|
|
6 |
|
|
6 |
|
Preferred dividends |
(26 |
) |
|
(26 |
) |
|
(26 |
) |
Common stock dividends |
(16 |
) |
|
(15 |
) |
|
- |
|
Purchases of property and equipment (1) |
(67 |
) |
|
(47 |
) |
|
(59 |
) |
Reimbursements of property and equipment purchases |
5 |
|
|
9 |
|
|
18 |
|
Income taxes paid, net of refunds |
(119 |
) |
|
(66 |
) |
|
(18 |
) |
Free Cash
Flow |
$ |
186 |
|
|
$ |
194 |
|
|
$ |
192 |
|
(1) Excludes approximately $92 million and $80
million related to the Assembly Atlanta project in 2022 and 2021,
respectively.
Reconciliation of Net Income to Adjusted EBITDA and the
Effect of Transaction Related Expenses and Certain Non-Cash
Expenses: |
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
June 30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
(in millions, except for per share information) |
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
99 |
|
|
$ |
39 |
|
|
$ |
161 |
|
|
$ |
78 |
|
Adjustments to reconcile from net income to |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
31 |
|
|
25 |
|
|
63 |
|
|
50 |
|
Amortization of intangible assets |
52 |
|
|
27 |
|
|
104 |
|
|
53 |
|
Non-cash stock-based compensation |
6 |
|
|
4 |
|
|
11 |
|
|
7 |
|
Gain on disposal of assets, net |
- |
|
|
(1 |
) |
|
(5 |
) |
|
(5 |
) |
Miscellaneous expense, net |
- |
|
|
7 |
|
|
2 |
|
|
6 |
|
Interest expense |
81 |
|
|
47 |
|
|
160 |
|
|
95 |
|
Income tax expense |
38 |
|
|
15 |
|
|
59 |
|
|
30 |
|
Total |
307 |
|
|
163 |
|
|
555 |
|
|
314 |
|
Add: Transaction Related Expenses (1) |
2 |
|
|
7 |
|
|
5 |
|
|
8 |
|
Adjusted
EBITDA |
$ |
309 |
|
|
$ |
170 |
|
|
$ |
560 |
|
|
$ |
322 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to
common stockholders |
$ |
86 |
|
|
$ |
26 |
|
|
$ |
135 |
|
|
$ |
52 |
|
Add: Transaction Related Expenses and non-cash |
|
|
|
|
|
|
|
|
|
|
|
stock-based compensation |
8 |
|
|
18 |
|
|
16 |
|
|
22 |
|
Less: Income tax expense related to Transaction Related |
|
|
|
|
|
|
|
|
|
|
|
Expenses and non-cash stock-based compensation |
(2 |
) |
|
(5 |
) |
|
(4 |
) |
|
(6 |
) |
Net income attributable to
common stockholders - excluding |
|
|
|
|
|
|
|
|
|
|
|
Transaction Related Expenses and non-cash stock-based |
|
|
|
|
|
|
|
|
|
|
|
compensation |
$ |
92 |
|
|
$ |
39 |
|
|
$ |
147 |
|
|
$ |
68 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to
common stockholders common per share, |
|
|
|
|
|
|
|
|
|
|
|
diluted - excluding Transaction Related Expenses and non-cash |
|
|
|
|
|
|
|
|
|
|
|
stock-based compensation |
$ |
0.98 |
|
|
$ |
0.41 |
|
|
$ |
1.56 |
|
|
$ |
0.72 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted-average common shares outstanding |
94 |
|
|
95 |
|
|
94 |
|
|
95 |
|
(1) Excludes $7 million of Transaction
Related Expenses included in miscellaneous expense, net for the
three and six-month periods ended June 30, 2021, respectively.
Reconciliation of Total Leverage Ratio, Net of All
Cash: |
|
|
Eight Quarters |
|
Ended |
|
June 30, 2022 |
|
(dollars in millions) |
|
|
|
Net income |
$ |
595 |
|
Adjustments to reconcile from net income to Operating Cash Flow
as |
|
|
defined in our Senior Credit Agreement: |
|
|
Depreciation |
221 |
|
Amortization of intangible assets |
274 |
|
Non-cash stock-based compensation |
32 |
|
Gain on disposal of assets, net |
21 |
|
Interest expense |
457 |
|
Loss on early extinguishment of debt |
12 |
|
Income tax expense |
248 |
|
Amortization of program broadcast rights |
81 |
|
Common stock contributed to 401(k) plan |
15 |
|
Payments for program broadcast rights |
(83 |
) |
Pension benefit |
(4 |
) |
Contributions to pension plans |
(7 |
) |
Adjustments for unrestricted subsidiaries |
8 |
|
Adjustments for stations acquired or divested, financings and
expected |
|
|
synergies during the eight quarter period |
606 |
|
Transaction Related Expenses |
87 |
|
Other |
2 |
|
Operating Cash Flow as defined in our Senior Credit
Agreement |
$ |
2,565 |
|
Operating Cash Flow as defined in our Senior Credit
Agreement, |
|
|
divided by two |
$ |
1,283 |
|
|
|
|
|
June 30, 2022 |
|
Adjusted Total Indebtedness: |
|
|
Total outstanding principal |
$ |
6,778 |
|
Letters of credit outstanding |
4 |
|
Cash |
|
(162 |
) |
Adjusted Total Indebtedness, Net of All Cash |
$ |
6,620 |
|
|
|
|
Total Leverage Ratio, Net of All Cash |
5.16 |
|
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