S&P: Gray Television outlook positive

Standard & Poor's said it revised its outlook on Gray Television Inc. to positive from stable. All ratings, including the B+ corporate credit rating, on the company were affirmed.

The outlook revision reflects the expectation of improvements in Gray's financial profile over the intermediate term that may warrant an upgrade. Profitability and cash flow should get a meaningful boost in 2004 from election-year political ad spending and from continued strengthening of core local and national advertising. This should boost Gray's debt plus preferred stock to EBITDA leverage ratio to the low-5x area or lower.

S&P said the ratings reflect the strong market position of Gray's TV stations, a degree of geographical and operational diversity, and the good margin and free cash flow potential of television broadcasting.

These factors are balanced by Gray's aggressive financial profile, and the slow growth and somewhat cyclical nature of the television and newspaper industries.

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