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Gray Television expects to repay at least $40 million of debt in 2010
By Jennifer Lanning Drey
Portland, Ore., Aug. 12 - Gray Television, Inc. expects to be able to pay down $40 million to $50 million of debt in 2010, assuming the company hits its projected political numbers, Robert Prather, Gray's chief operating officer, said Thursday during its second-quarter earnings conference call.
The company plans to use free cash flow generated by its stations to continue to reduce total debt going forward, Hilton Howell Jr., its chief executive officer, said during the call.
Gray had $880 million of total debt on the balance sheet and $15.7 million of cash at June 30.
During the second quarter, the company issued $365 million of senior secured second-lien notes due 2015 and used the net proceeds to repay $300 million in principal outstanding under its senior credit facility.
The transactions increased Gray's operational and financial flexibility, Howell said.
Upon issuing the new notes and paying down the credit facility, Gray went to a first-lien leverage test with the senior credit facility. Based on the defined leverage calculation, Gray was at 5.35 at quarter end, against a covenant maximum of 7.0, Ryan reported.
With the bulk of political expenditures expected in the months to come, Gray is confident with regard to the balance of the year, Howell said.
Gray's revenue increased to $75.6 million in the second quarter, compared to $65.1 million in the same period of 2009.
Howell said the improvement reflected increases in revenue throughout the company's major revenue classifications, including local, national and political advertising revenue.
Gray Television is an Atlanta-based television broadcast company.
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