Gray Reports Record Operating Results for the Quarter Ended June 30, 2018
ATLANTA, Aug. 7, 2018 /PRNewswire/ -- Gray Television, Inc. ("Gray," "we," "us" or "our") (NYSE: GTN and GTN.A) today announces record results of operations for the three-months ended June 30, 2018, including record revenue and Broadcast Cash Flow (a non-GAAP financial measure, defined below). Our net income per diluted share for the second quarter of 2018 was $0.46.
Financial Highlights, Selected Operating Data and Other Recent Developments:
-- Record Second Quarter Revenue and Broadcast Cash Flow - Our revenue for
the second quarter of 2018 was an all-time record of $250.3 million,
increasing $23.7 million, or 10%, from the second quarter of 2017. Our
net income for the second quarter of 2018 was $40.7 million and our
Broadcast Cash Flow was an all-time record of $108.3 million for the
second quarter of 2018, increasing $15.2 million, or 16%, from the
second quarter of 2017.
-- Political Revenue - Our second quarter of 2018 political advertising
revenue was $18.1 million, exceeding the high-end of our guidance range
of $15.0 million. After giving effect to stations acquired and divested
since 2014, we earned $16.5 million of political advertising revenue in
the second quarter of 2014 which was the most recent non-presidential
election year. Our political advertising revenue for the second quarter
of 2018 was 9% greater than that of the second quarter of 2014.
-- Retransmission Revenue, Expense and Net - Our second quarter of 2018
gross retransmission revenue was $85.3 million, and our second quarter
2018 retransmission expense was $39.2 million. Our retransmission
revenue, net of retransmission expense, was $46.1 million for the second
quarter of 2018, exceeding the high end of our guidance by approximately
$0.6 million. We currently anticipate that for calendar year 2018, gross
retransmission revenue will be approximately $350.0 million to $353.0
million and retransmission revenue, net of retransmission expense, will
be approximately $182.0 million to $184.0 million.
-- Total Leverage Ratio, Net of all Cash - As of June 30, 2018, our total
leverage ratio, as defined in our senior credit facility, was 3.91 times
on a trailing eight-quarter basis, netting our total cash balance of
$510.6 million.
-- Pending Merger with Raycom Media - On June 23, 2018, we entered into a
merger agreement with, among others, Raycom Media, Inc. Giving effect to
the merger and prior to divestitures of stations due to market overlaps,
we expect to own and/or operate 142 full-power television stations
serving 92 markets. Upon completion, we expect to reach approximately 24
percent of U.S. television households through nearly 400 separate
program streams including approximately 165 affiliates of the
ABC/NBC/CBS/FOX networks, and over 100 affiliates of the CW, MyNetwork,
and MeTV networks. These stations were ranked number-one in all day
Nielsen ratings in 62 of the combined markets and number-one or
number-two in 92% of the combined markets. In addition to high quality
television stations, we also expect to acquire additional Raycom
businesses that provide sports marketing, production and digital signage
services, resulting in our becoming a more diversified media company.
The consummation of the transaction is subject to the satisfaction or
waiver of certain customary conditions, including, approval from the
Federal Communications Commission, the expiration or early termination
of the applicable waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act, the absence of any legal impediments to the merger,
and customary third-party consents. We anticipate that the transaction
will be completed during the fourth quarter of 2018.
Selected Operating Data (unaudited):
------------------------------------
Three Months Ended June 30,
---------------------------
% Change % Change
2018 to 2018 to
2018 2017 2017 2016 2016
---- ---- ---- ---- ----
(dollars in thousands)
Revenue (less agency commissions):
Total $250,344 $226,681 10 % $196,633 27 %
Political $18,070 $3,708 387 % $9,649 87 %
Operating expenses (1)(3):
Broadcast $141,919 $133,683 6 % $117,299 21 %
Corporate and administrative $10,833 $8,432 28 % $8,520 27 %
Net income $40,705 $70,561 (42)% $17,662 130 %
Non-GAAP cash flow (2):
Broadcast Cash Flow(3) $108,270 $93,077 16 % $79,307 37 %
Broadcast Cash Flow Less
Cash Corporate Expenses(3) $98,672 $85,746 15 % $71,753 38 %
Free Cash Flow $58,524 $55,883 5 % $25,928 126 %
Six Months Ended June 30,
-------------------------
% Change % Change
2018 to 2018 to
2018 2017 2017 2016 2016
---- ---- ---- ---- ----
(dollars in thousands)
Revenue (less agency commissions):
Total $476,602 $430,142 11 % $370,356 29 %
Political $23,845 $5,029 374 % $19,304 24 %
Operating expenses (1)(3):
Broadcast $291,573 $267,239 9 % $225,835 29 %
Corporate and administrative $19,093 $16,142 18 % $24,190 (21)%
Net income $60,650 $81,066 (25)% $26,652 128 %
Non-GAAP cash flow (2):
Broadcast Cash Flow(3) $185,954 $163,456 14 % $145,244 28 %
Broadcast Cash Flow Less
Cash Corporate Expenses(3) $169,045 $149,390 13 % $122,980 37 %
Free Cash Flow $91,857 $92,477 (1)% $50,144 83 %
(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 and 2016 have been reclassified to give effect to 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").
Results of Operations for the Second Quarter of 2018
----------------------------------------------------
Revenue (less agency commissions).
The table below presents our revenue (less agency commissions) by type for the second quarter of 2018 and 2017 (dollars in thousands):
Three Months Ended June 30,
---------------------------
2018 2017 Amount Percent
---- ----
Percent Percent Increase Increase
Amount of Total Amount of Total (Decrease) (Decrease)
------ -------- ------ -------- --------- ---------
Revenue (less agency commissions):
Local (including internet/digital/mobile) $112,921 45.1% $117,917 52.0% $(4,996) (4)%
National 29,873 11.9% 30,981 13.7% (1,108) (4)%
Political 18,070 7.2% 3,708 1.6% 14,362 387 %
Retransmission consent 85,307 34.1% 69,371 30.6% 15,936 23 %
Other 4,173 1.7% 4,704 2.1% (531) (11)%
Total $250,344 100.0% $226,681 100.0% $23,663 10 %
======== ===== ======== ===== =======
Total revenue increased $23.7 million, or 10%, to $250.3 million for the second quarter of 2018 compared to the second quarter of 2017. Total revenue increased primarily as a result of increased retransmission consent revenue, due primarily to increased retransmission consent rates, and increased political advertising revenue due to 2018 being the "on-year" of the two-year election cycle.
Broadcast Operating Expenses.
Broadcast operating expenses (before depreciation, amortization and gain or loss on disposal of assets) increased $8.2 million, or 6%, to $141.9 million for the second quarter of 2018. The increase reflects, in part, the following:
-- Non-compensation expense increases of $6.5 million, or 10%, in the 2018
period primarily as the result of increased retransmission expense of
$5.4 million, or 16%, to $39.2 million in the second quarter of 2018 and
increases in professional fees.
-- Compensation expense increases of $1.7 million in 2018, primarily due to
routine increases in compensation and severance costs. Including the
effect of a $0.5 million adjustment related to forfeitures of equity
incentive awards, we did not incur any non-cash stock-based compensation
expenses in the second quarter of 2018. In the second quarter of 2017,
our non-cash stock-based compensation expenses were $0.4 million.
Corporate and Administrative Operating Expenses.
Corporate and administrative expenses (before depreciation, amortization and gain or loss on disposal of assets) increased $2.4 million, or 28%, to $10.8 million in the second quarter of 2018. The increase reflects, in part, the following:
-- Non-compensation expense increases of $2.1 million, primarily due to an
increase of $1.9 million of professional fees related to acquisition
activities. Professional fees related to acquisition activities were
$3.7 million in the second quarter of 2018.
-- Compensation expense increases of $0.3 million, primarily due to
increases in incentive compensation costs. Non-cash stock-based
amortization expenses were $1.2 million and $1.1 million in the second
quarters of 2018 and 2017, respectively.
Taxes.
During the second quarter of 2018, we made aggregate federal and state income tax payments of approximately $3.6 million.
Results of Operations for the Six-Month Period Ended June 30, 2018
------------------------------------------------------------------
Revenue (less agency commissions).
The table below presents our revenue (less agency commissions) by type for the six-month periods ended June 30, 2018 and 2017 (dollars in thousands):
Six Months Ended June 30,
-------------------------
2018 2017 Amount Percent
---- ----
Percent Percent Increase Increase
Amount of Total Amount of Total (Decrease) (Decrease)
------ -------- ------ -------- --------- ---------
Revenue (less agency commissions):
Local (including internet/digital/mobile) $218,390 45.8% $220,514 51.3% $(2,124) (1)%
National 54,385 11.4% 55,795 13.0% (1,410) (3)%
Political 23,845 5.0% 5,029 1.2% 18,816 374 %
Retransmission consent 170,858 35.9% 136,944 31.8% 33,914 25 %
Other 9,124 1.9% 11,860 2.7% (2,736) (23)%
Total $476,602 100.0% $430,142 100.0% $46,460 11 %
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Total revenue increased $46.5 million, or 11%, to $476.6 million for the six-months ended June 30, 2018 compared to the six-months ended June 30, 2017. Total revenue increased primarily as a result of increased retransmission consent revenue, due primarily to increased retransmission consent rates, and increased political advertising revenue due to 2018 being the "on-year" of the two-year election cycle. Local and national advertising revenue decreased only slightly, in spite of the $2.3 million of revenue we earned from the broadcast of the 2018 Super Bowl on our NBC-affiliated stations, compared to $0.6 million that we earned from the broadcast of the 2017 Super Bowl on our FOX-affiliated stations. In addition, revenue from the broadcast of the 2018 Winter Olympic Games on our NBC-affiliated stations was approximately $5.5 million.
Broadcast Operating Expenses.
Broadcast operating expenses (before depreciation, amortization and gain or loss on disposal of assets) increased $24.3 million, or 9%, to $291.6 million for the six-months ended June 30, 2018. The increase reflects, in part, the following:
-- Non-compensation expense increases of $19.6 million, or 15%, in the 2018
period, primarily as the result of increased retransmission expense of
$14.9 million, or 23%, to $80.9 million in 2018 and net increases in
several other expense categories including programming and other
professional fees. Our programming costs related to the 2018 Winter
Olympic Games were $1.5 million.
-- Compensation expense increases of $5.0 million in the 2018 period,
primarily due to routine increases in compensation and severance costs.
Including the effect of a $0.5 million adjustment related to
forfeitures, our non-cash stock-based compensation expenses were $1.2
million and $0.7 million in the 2018 and 2017 periods, respectively.
Corporate and Administrative Operating Expenses.
Corporate and administrative expenses (before depreciation, amortization and gain or loss on disposal of assets) increased $3.0 million, or 18%, to $19.1 million for the 2018 period. The increase reflects, in part, the following:
-- Non-compensation expense increases of $2.4 million, primarily due to an
increase of $2.0 million of professional fees related to acquisition
activities. Professional fees related to acquisition activities were
$3.8 million in the 2018 period.
-- Compensation expense increases of $0.6 million, primarily due to
increased incentive compensation costs. Non-cash stock-based
amortization expenses were $2.2 million and $2.1 million in the 2018 and
2017 periods, respectively.
(Gain) Loss on Disposal of Assets.
During the 2018 period, we reported gains on disposals of assets of $1.6 million compared to $76.8 million in the 2017 period. On June 1, 2017, we tendered two of our broadcast licenses and made other modifications to our broadcast spectrum related to our participation in the FCC's broadcast spectrum auction. Our proceeds from this auction were $90.8 million and the cost of the assets disposed was $13.1 million.
Loss from Early Extinguishment of Debt.
In the 2017 period, we recorded a loss from early extinguishment of debt of approximately $2.9 million related to the amendment and restatement of our senior credit facility.
Taxes.
During the 2018 period, we made aggregate federal and state income tax payments of approximately $12.0 million. During the remainder of 2018, we anticipate making income tax payments (net of refunds) of approximately $23.9 million.
Detailed Table of Operating Results
-----------------------------------
Gray Television, Inc.
Selected Operating Data (Unaudited)
(in thousands except for per share data)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2018 2017 2018 2017
---- ---- ---- ----
Revenue (less agency commissions) $250,344 $226,681 $476,602 $430,142
Operating expenses before depreciation, amortization
and gain on disposal of assets, net:
Broadcast (1) 141,919 133,683 291,573 267,239
Corporate and administrative (1) 10,833 8,432 19,093 16,142
Depreciation 13,543 12,841 27,237 25,470
Amortization of intangible assets 5,153 6,657 10,589 12,224
Gain on disposals of assets, net (794) (77,326) (1,615) (76,799)
Operating expenses 170,654 84,287 346,877 244,276
------- ------ ------- -------
Operating income 79,690 142,394 129,725 185,866
Other income (expense):
Miscellaneous income, net (1) 702 162 1,262 255
Interest expense (24,831) (23,791) (49,081) (46,982)
Loss from early extinguishment of debt - (311) - (2,851)
--- ---- --- ------
Income before income tax expense 55,561 118,454 81,906 136,288
Income tax expense 14,856 47,893 21,256 55,222
------ ------ ------ ------
Net income $40,705 $70,561 $60,650 $81,066
======= ======= ======= =======
Basic per share information:
Net income $0.46 $0.98 $0.69 $1.13
===== ===== ===== =====
Weighted-average shares outstanding 87,765 71,821 88,408 71,849
====== ====== ====== ======
Diluted per share information:
Net income $0.46 $0.97 $0.68 $1.12
===== ===== ===== =====
Weighted-average shares outstanding 88,305 72,501 88,937 72,510
====== ====== ====== ======
Political advertising revenue (less agency commissions) $18,070 $3,708 $23,845 $5,029
(1) Amounts in 2017 have been reclassified to give effect to the implementation of ASU 2017-07.
Other Financial Data:
---------------------
As of
-----
June 30, December 31,
2018 2017
---- ----
(in thousands)
Cash $510,577 $462,399
Long-term debt,
including current
portion $1,836,229 $1,837,428
Borrowing
availability under
our revolving
credit facility $100,000 $100,000
Six Months Ended June 30,
2018 2017
---- ----
(in thousands)
Net cash provided by
operating
activities $97,452 $59,144
Net cash used in
investing
activities (22,106) (413,217)
Net cash (used in)
provided by
financing
activities (27,168) 71,244
Net increase
(decrease) in cash $48,178 $(282,829)
======= =========
Guidance for the Three-Months Ending September 30, 2018
-------------------------------------------------------
Based on our current forecasts for the quarter ending September 30, 2018 (the "third quarter of 2018") and excluding the anticipated results of any pending transactions, we anticipate the changes from the quarter ended September 30, 2017 (the "third quarter of 2017") as outlined below:
Low End High End
Guidance for % Change From Guidance for % Change From
the Third Third the Third Third Third
Quarter of Quarter of Quarter of Quarter of Quarter of
Selected operating data: 2018 2017 2018 2017 2017
------------------------ ---- ---- ---- ---- ----
(dollars in thousands)
OPERATING REVENUE:
Revenue (less agency commissions) $270,000 23 % $280,000 28 % $218,977
OPERATING EXPENSES (1)
(before depreciation, amortization and
(gain) loss on disposal of assets):
Broadcast $145,000 4 % $148,000 6 % $139,542
Corporate and administrative $10,000 20 % $11,000 32 % $8,330
OTHER SELECTED DATA:
Political advertising revenue
(less agency commissions) $41,000 924 % $45,000 1024 % $4,005
(1) Amounts in 2017 have been reclassified to give effect to the implementation of ASU 2017-07.
Comments on Third Quarter of 2018 Guidance
Revenue.
Based on our current forecasts for the third quarter of 2018, we anticipate the following changes from the third quarter of 2017:
-- We believe our third quarter of 2018 local advertising revenue
(including internet/digital/mobile) will change to be within a range of
approximately $107.0 million to $110.0 million, representing a -3% to
+0% change.
-- We believe our third quarter of 2018 national advertising revenue will
change to be within a range of approximately $28.5 million to $29.5
million, representing a -8% to -5% change.
-- We believe our third quarter of 2018 political advertising revenue will
be within a range of approximately $41.0 million to $45.0 million. After
giving effect to stations acquired and divested since 2014, we earned
$41.1 million of political advertising revenue in the third quarter of
2014 which was the most recent non-presidential election year. We
estimate that our political advertising revenue for the third quarter of
2018 will be equal to or as much as +9% greater than that of the third
quarter of 2014.
-- We anticipate that our gross retransmission revenue for calendar year
2018 will be within a range of approximately $350.0 million to $353.0
million and net retransmission revenue will be within a range of
approximately $182.0 million to $184.0 million. We believe our third
quarter of 2018 retransmission consent revenue will be within a range of
approximately $90.0 million to $92.0 million.
Broadcast Operating Expenses (before depreciation, amortization and gain or loss on disposal of assets, net).
For the third quarter of 2018, we anticipate that our broadcast operating expenses will increase primarily due to retransmission expense which we expect to increase by a range of approximately $6.3 million to $7.3 million to within a range of approximately $41.0 million to $42.0 million.
Corporate and Administrative Operating Expenses (before depreciation, amortization and gain or loss on disposal of assets).
For the third quarter of 2018, we anticipate our corporate and administrative operating expense will increase to within a range of approximately $10.0 million to $11.0 million, primarily attributable to increases in professional services fees. We anticipate that costs related to our pending acquisitions, and in particular the Raycom merger, will be approximately $2.0 million to $3.0 million in the third quarter.
The Company
We are a television broadcast company headquartered in Atlanta, Georgia, that owns and operates over 100 television stations across 57 television markets that collectively broadcast over 200 program streams including over 100 channels affiliated with the CBS/NBC/ABC/FOX television networks. Our portfolio includes the number-one or number-two ranked television station for both overall audience and news audience in all 57 of our 57 markets, which collectively cover approximately 10.4% of total United States television households.
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 third quarter of 2018 or other periods, future income tax payments, pending transactions 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, 2017 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 second quarter operating results on August 7, 2018. The call will begin at 10:00:00 A.M. Eastern Time. The live dial-in number is 1(855) 493-3489 and the confirmation code is 4239649. 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: 4239649 until September 4, 2018.
Effects of Acquisitions and Divestitures on Our Results of Operations and Non-GAAP Terms
From January 1, 2016 (the beginning of the earliest period presented) through June 30, 2018, we completed eight acquisition transactions and one divestiture transaction. As more fully described in our 2017 Form 10-K filed with the Securities and Exchange Commission and in our other prior disclosures, these transactions added a net total of 21 television stations to our operations. We refer to these transactions, collectively, as the "Acquisitions."
From time to time, Gray supplements its financial results prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") by disclosing the non-GAAP financial measures Broadcast Cash Flow, Broadcast Cash Flow Less Cash Corporate Expenses, Free Cash Flow, Operating Cash Flow as defined in the Senior Credit Agreement and Total Leverage Ratio and 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 plus loss from early extinguishment of debt, 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 and non-cash 401(k) expense, 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 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, and non-cash 401(k) expense, less any gain on disposal of assets, any miscellaneous income, any income tax benefits and any payments for program broadcast rights.
We define Free Cash Flow as net income 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, amortization of deferred financing costs, any income tax expense and non-cash 401(k) expense, less any gain on disposal of assets, any miscellaneous income, any income tax benefits, payments for program broadcast rights, contributions to pension plans, amortization of original issue premium on our debt, purchases of property and equipment (net of reimbursements) and the payment of income taxes (net of any refunds received).
We define Operating Cash Flow as defined in our Senior Credit Agreement as net income 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, interest expense, any income tax expense, non-cash 401(k) expense and trade expense less any gain on disposal of assets, any income tax benefits, payments for program broadcast rights, trade 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 the Acquisitions as if they had been acquired or divested, respectively, on April 1, 2016. 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.
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. 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.
These non-GAAP terms are not defined in GAAP and our definitions may differ from, and therefore 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, in thousands - Quarter:
---------------------------------------
Three Months Ended June 30,
---------------------------
2018 2017 2016
---- ---- ----
Net income $40,705 $70,561 $17,662
Adjustments to reconcile from net income to
Free Cash Flow:
Depreciation 13,543 12,841 11,617
Amortization of intangible assets 5,153 6,657 4,242
Non-cash stock-based compensation 1,214 1,434 1,272
(Gain) loss on disposals of
assets, net (794) (77,326) 1,228
Miscellaneous income, net (1) (702) (163) (101)
Interest expense 24,831 23,791 24,269
Loss from early extinguishment of
debt - 311 -
Income tax expense 14,856 47,893 11,897
Amortization of program broadcast
rights 5,258 5,013 4,813
Common stock contributed to 401(k) plan
excluding corporate 401(k)
contributions - 8 7
Payments for program broadcast
rights (5,392) (5,274) (5,153)
Corporate and administrative expenses excluding
depreciation, amortization of intangible assets and
non-cash stock-based compensation 9,598 7,331 7,554
----- ----- -----
Broadcast Cash Flow (1) 108,270 93,077 79,307
Corporate and administrative expenses excluding
depreciation, amortization of intangible assets and
non-cash stock-based compensation (9,598) (7,331) (7,554)
Broadcast Cash Flow Less Cash
Corporate Expenses (1) 98,672 85,746 71,753
Contributions to pension plans - - (1,113)
Interest expense (24,831) (23,791) (24,269)
Amortization of deferred
financing costs 1,158 1,158 1,196
Amortization of net original issue premium on
senior notes (152) (152) (216)
Purchases of property and
equipment (13,635) (6,438) (7,544)
Reimbursements of property and
equipment purchases 909 - -
Income taxes paid, net of refunds (3,597) (640) (13,879)
Free Cash Flow $58,524 $55,883 $25,928
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(1) Amounts in 2017 and 2016 have been reclassified to give effect to the implementation of ASU 2017-07.
Reconciliation, in thousands - Year to Date:
--------------------------------------------
Six Months Ended June 30,
-------------------------
2018 2017 2016
---- ---- ----
Net income $60,650 $81,066 $26,652
Adjustments to reconcile from net income to
Free Cash Flow:
Depreciation 27,237 25,470 22,743
Amortization of intangible assets 10,589 12,224 8,130
Non-cash stock based compensation 3,371 2,772 2,556
(Gain) loss on disposals of assets, net (1,615) (76,799) (420)
Miscellaneous income, net (1) (1,262) (255) (630)
Interest expense 49,081 46,982 45,544
Loss from early extinguishment of debt - 2,851 -
Income tax expense 21,256 55,222 18,312
Amortization of program broadcast rights 10,604 10,235 9,209
Common stock contributed to 401(k) plan
excluding corporate 401(k) contributions - 15 14
Payments for program broadcast rights (10,866) (10,393) (9,130)
Corporate and administrative expenses excluding
depreciation, amortization of intangible assets and
non-cash stock-based compensation 16,909 14,066 22,264
------ ------ ------
Broadcast Cash Flow (1) 185,954 163,456 145,244
Corporate and administrative expenses excluding
depreciation, amortization of intangible assets and
non-cash stock-based compensation (16,909) (14,066) (22,264)
------- ------- -------
Broadcast Cash Flow Less Cash Corporate Expenses (1) 169,045 149,390 122,980
Contributions to pension plans - (624) (1,633)
Interest expense (49,081) (46,982) (45,544)
Amortization of deferred financing costs 2,315 2,309 2,267
Amortization of net original issue premium on
senior notes (305) (305) (432)
Purchases of property and equipment (19,915) (10,415) (13,475)
Reimbursements of property and equipment purchases 1,846 - -
Income taxes paid, net of refunds (12,048) (896) (14,019)
-------
Free Cash Flow $91,857 $92,477 $50,144
======= ======= =======
(1) Amounts in 2017 and 2016 have been reclassified to give effect to the implementation of ASU 2017-07.
Reconciliation of Total Leverage Ratio, Net of All Cash, in
thousands except for ratio:
-----------------------------------------------------------
Eight Quarters Ended
June 30, 2018
-------------
Net income $358,223
Adjustments to reconcile
from net income to
operating cash flow as
defined in our Senior
Credit Agreement:
Depreciation 102,390
Amortization of
intangible assets 44,127
Non-cash stock-based
compensation 14,220
(Gain) loss on disposal
of assets, net (75,066)
Interest expense 196,032
Loss from early
extinguishment of debt 34,838
Income tax (benefit)
expense (22,312)
Amortization of program
broadcast rights 41,429
Common stock contributed
to 401(k) plan 31
Payments for program
broadcast rights (41,577)
Pension expense (931)
Contributions to pension
plans (4,539)
Adjustments for stations
acquired or divested,
financings and expected
synergies during the
eight quarter period 35,951
Professional fees
related to acquisitions
and divestitures 6,182
Operating Cash Flow as
defined in our Senior
Credit Agreement $688,998
========
Operating Cash Flow as
defined in our Senior
Credit Agreement,
divided by two $344,499
========
June 30, 2018
-------------
Adjusted Total
Indebtedness:
Total outstanding
principal, including
current portion $1,857,026
Capital leases and other
debt 691
Cash (510,577)
Adjusted Total
Indebtedness, Net of
All Cash $1,347,140
==========
Total Leverage Ratio,
Net of All Cash 3.91
====
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SOURCE Gray Television
