Super Bowl Update

Gray Television, Inc. has announced an increase in its record revenue estimates for the three-month period ending December 31, 2012 (the "fourth quarter of 2012").

Last week, Gray, which owns and operates Bowling Green ABC/Fox/CW affiliate WBKO, issued guidance relating to certain expected fourth quarter 2012 operating results.  Through Tuesday, the company reports that it has earned "significantly more" political advertising revenue than previously anticipated.

The updated political advertising revenue estimates for the fourth quarter of 2012 would represent new record levels for a fourth quarter; the previous actual record was $33.1 million in 2010.  For the year ending December 31, 2012, the company anticipates total political advertising revenue to range between $85 million and $86 million, compared to its previous annual record political advertising revenue of $57.6 million in 2010.

"We also currently anticipate that our total annual revenue for 2012 will exceed $400 million, compared to our previous annual record revenue of $346.1 million in 2010," the company said in a statement.

Gray Television this morning announced its results for the third quarter of 2012, along with comparisons to the same period last year as well as the year to date.

The company, which owns Bowling Green, Ky. ABC/Fox/CW affiliate WBKO and operates Nashville ABC affiliate WKRN for Young Broadcasting, posted record revenue for the quarter of $102.9 million; that's a 34% increase over the third quarter of 2011 and $17.6 million higher than the previous third quarter record in 2010.

Political advertising revenue increased $19.3 million, or 367%, to $24.5 million.  All other advertising categories were also up compared to 2011.  Retransmission consent revenue was also higher by 65%.

Gray Television, Inc., which owns Bowling Green, Ky. ABC/Fox/CW affiliate WBKO and operates WKRN, the ABC affiliate in Nashville, for Young Broadcasting, today that it is commencing a refinancing of its existing capital structure. Gray has commenced a cash tender offer for up to $225 million of its outstanding 10½% senior secured second lien notes due 2015.

Note holders are being offered $1,078.75, plus an early tender premium of $5.00, amounting to a total of $1,083.75 per $1,000 of face value.

Gray also announced today that, in addition to entering into discussions with its lenders relating to an amendment to its senior credit facility necessary in order to complete the Tender Offer, it has entered into discussions with certain banks relating to an overall refinancing of its senior credit facility, subject to market and other conditions. Gray expects that its refinanced senior credit facility would provide for total commitments of $665.0 million, consisting of a $40.0 million revolving credit facility and a $625.0 million term loan facility.

Proceeds from borrowings under the refinanced senior credit facility are expected to be used to repay outstanding borrowings under the company's existing senior credit facility, repurchase or redeem any notes not previously purchased in the Tender Offer, redeem the outstanding shares of the company's Series D perpetual preferred stock and pay related fees and expenses.

Gray Television, which owns Bowling Green, Ky. ABC/Fox/CW affiliate WBKO-13 and manages ABC affiliate WKRN-2 in Nashville for Young Broadcasting, reported its second quarter earnings this morning.

For the three months ending June 30, the company took in $94.691 million, a record for the company and a 24% increase over the same period in 2011.  The company credited the big gains to substantial increases in ad spending and retransmission fees.  Indeed, some ad categories were way up over 2Q2011, led by political advertising (up 467%) and internet advertising (up 31%).

Retransmission fees paid to Gray by cable and satellite operators were up 64% for the quarter, and the company's income from the management of the seven Young Broadcasting stations held steady at $600,000.

For the first half of 2012, Gray has whittled its long-term debt down by $11 million, and improved its borrowing position with a $9 million increase in its senior borrowing facility.

The company expects gains to continue in the third quarter.