Gray Television (GTN) 8-K Gray Reports Operating Results

Gray	Exhibit 99
Television, Inc.

NEWS RELEASE

Gray Reports Operating Results

For the Three Months and Year Ended December 31, 2006

Atlanta, Georgia — March 15, 2007. . . Gray Television, Inc. (“Gray” or the “Company”) (NYSE: GTN) today announced results from operations for the three months (“fourth quarter”) and year ended December 31, 2006 as compared to the three months and year ended December 31, 2005.

Significant items to note for the period ended December 31, 2006:

Pro forma net revenue increased 26% in the fourth quarter of 2006, to $101.9 million, compared to $81.2 million in 2005. For the year ended December 31, 2006, pro forma net revenue increased 13%, to $334.7 million, compared to $297.1 million in 2005.

Pro forma Broadcast Cash Flow increased 42%, to $48.6 million, in the fourth quarter of 2006 compared to $34.3 million in 2005. For the year ended December 31, 2006, pro forma Broadcast Cash Flow increased 21%, to $143.8 million, compared to $119.1 million in 2005. See Page 8 for a reconciliation of this Non-GAAP term to Net Income.

Gray’s quarter and year end results benefited from record net political revenue in a non-presidential election year. The Company’s strategy of owning strong #1 news stations in a majority of its markets allowed it to capture a majority of the net political revenue spent in those markets.

General Comment on Expansion of Operations:

Since January 1, 2005, Gray has continued to grow through acquisitions of new stations and the start up of new operations. During the last two years, the Company has completed two “top 100 market” acquisitions with the purchase of WSAZ, Charleston — Huntington, WV on November 30, 2005 and WNDU, South Bend, IN on March 3, 2006. These two stations are significant to Gray and have added to Gray’s Broadcast Cash Flow from their date of acquisition. Due to their relative significance to Gray’s results of operations, Gray’s pro forma results have been presented to include the results of WSAZ and WNDU as if each station had been acquired on January 1, 2005.

Comments on Results of Operations for the Three Months Ended December 31, 2006:

Revenues.

On a pro forma⁽¹⁾ basis, after giving effect to the acquisition of television stations WSAZ and WNDU, total net revenue for all stations increased 26%, or $20.7 million, due primarily to increases in political advertising revenues. These increases were partially offset by decreases in local advertising revenues, national advertising revenues and network compensation.

Political advertising revenues increased to $25.6 million from $1.7 million reflecting the cyclical influence of the 2006 elections.

Local and national advertising was influenced, in part, by the proportion of the total available advertising time utilized by political announcements.

4370 Peachtree Road, NE * Atlanta, GA 30319
(404) 504-9828 * Fax (404) 261-9607

Operating expenses.

On a pro forma⁽¹⁾ basis, after giving effect to the acquisition of television stations WSAZ and WNDU, total broadcast expenses (before depreciation, amortization and loss on disposal of assets) increased approximately 11% to $53.4 million.

Payroll related expenses increased approximately 4% or $1.3 million. This increase was due primarily to routine compensation increases at Gray’s existing stations, increased incentive compensation and modest staffing increases at each station to support the operation of the new digital second channels.

Non-payroll related expenses increased approximately 21% or $3.8 million. This increase was largely due to an incremental increase in non-payroll expenses for the digital second channels and an incremental increase in national sales representative commissions on political advertising revenue.

Corporate and administrative expenses, before depreciation, amortization and loss on disposal of assets increased 67% to $5.0 million from $3.0 million due, in part, to an incremental increase in legal fees and consulting expense. In addition, the 2006 period includes an aggregate of approximately $511,000 of non-cash expenses recorded in connection with restricted stock awards and the Company’s adoption on January 1, 2006 of Statement of Financial Accounting Standards No. 123(R) (“SFAS 123(R)”) which relates to the new accounting rules for expensing stock based compensation. The corresponding period of 2005 contains $97,000 of non-cash expenses associated with restricted stock awards.

Comments on Results of Operations for the Year Ended December 31, 2006:

Revenues.

On a pro forma⁽¹⁾ basis, after giving effect to the acquisition of television stations WSAZ and WNDU, total net revenue for all stations increased 13%, or $37.6 million, due primarily to increases in political advertising revenues and local advertising revenues. These increases were partially offset by decreases in national advertising revenues and network compensation.

Political advertising revenues increased to $42.8 million from $3.7 million reflecting the cyclical influence of the 2006 elections.

Local and national advertising was influenced, in part, by the proportion of the total available advertising time utilized by political announcements.

Operating expenses.

On a pro forma⁽¹⁾ basis, after giving effect to the acquisition of television stations WSAZ and WNDU, total broadcast expenses (before depreciation, amortization and loss on disposal of assets) increased approximately 6% to $193.6 million.

Payroll related expenses increased approximately 3% or $3.4 million. This increase was due primarily to routine compensation increases at Gray’s existing stations, increased incentive compensation and modest staffing increases at each station to support the operation of the new digital second channels.

Non-payroll related expenses increased approximately 11% or $7.3 million. This increase was largely due to an incremental increase in non-payroll expenses for the digital second channels and an incremental increase in national sales representative commissions on political advertising revenue.

Corporate and administrative expenses, before depreciation, amortization and loss on disposal of assets increased 27% to $15.1 million from $11.9 million due, in part, to incremental increases in legal fees,

Gray Television, Inc.
Earnings release for the year ended December 31, 2006	Page 2 of 9

payroll expense and consulting expense. The 2006 period also includes an aggregate of approximately $1.1 million of non-cash expenses recorded in connection with restricted stock awards and the Company’s adoption on January 1, 2006 of SFAS 123(R) which relates to the new accounting rules for expensing stock based compensation. The corresponding period of 2005 contains $391,000 of non-cash expenses associated with restricted stock awards.

Other Financial Data:

	December 31,
	2006		2005
	(dollars in thousands)
Cash	$	4,741	$	9,315
Total debt(2)		851,654		792,509
Available credit under senior credit facility		97,000		58,500

	Years Ended December 31,
	2006			2005
	(dollars in thousands)
Net cash provided by operating activities	$	79,860		$	50,482
Net cash used in investing activities		(129,305	)		(245,925	)
Net cash provided by financing activities		44,871			154,192

Gray generated $79.9 million of net cash from operations during 2006 compared to $50.5 million for the prior year. The increase was due largely to the addition of WSAZ and WNDU as well as additional advertising revenue at Gray’s existing stations.

During 2006, Gray borrowed $84.9 million to finance the acquisition of WNDU and repaid $25.8 million for a net increase in debt of $59.1 million since December 31, 2005.

Gray repurchased 175 shares of Series C Redeemable Serial Preferred Stock for $1.8 million and repurchased 902,200 shares of common stock for $5.6 million. The preferred shares were retired and the common stock is held in treasury.

A Detailed table of operating results follows on the next page.

Gray Television, Inc.
Earnings release for the year ended December 31, 2006	Page 3 of 9

Gray Television, Inc.
Selected As Reported and Pro Forma Operating Data (Unaudited)
(in thousands except for per share data and percentages)

	As Reported									Pro Forma(1)
	Three Months Ended									Three Months Ended
	December 31,									December 31,
							%									%
	2006			2005			Change			2006			2005			Change
Revenues (less agency commissions)	$	101,920		$	72,975			40	%	$	101,920		$	81,197			26	%
Operating expenses:
Operating expenses before depreciation, amortization and loss on disposal of assets, net:		53,444			43,607			23	%		53,444			48,296			11	%
Corporate and administrative		4,956			2,964			67	%		4,956			2,964			67	%
Depreciation and amortization of intangible assets		9,698			7,590			28	%		9,698			9,172			6	%
Loss on disposals of assets, net		528			1,309			(60	)%		528			1,309			(60	)%
		68,626			55,470			24	%		68,626			61,741			11	%
Operating income		33,294			17,505			90	%		33,294			19,456			71	%
Other income (expense):
Miscellaneous income (expense), net		181			(150	)		(221	)%		181			(150	)		(221	)%
Interest expense		(17,123	)		(13,002	)		32	%		(17,123	)		(16,202	)		6	%
Loss on early extinguishment of debt		—			(1,773	)		(100	)%		—			(1,773	)		(100	)%
Income from continuing operations before income tax expense		16,352			2,580			534	%		16,352			1,331			1129	%
Income tax expense		7,765			1,450			436	%		7,765			519			1396	%
Income from continuing operations		8,587			1,130			660	%		8,587			812			958	%
Loss from operations of discontinued publishing and wireless operations net of income tax expense of $0, $810, $0 and $810, respectively		—			(4,979	)		(100	)%		—			(4,979	)		(100	)%
Net income (loss)		8,587			(3,849	)		(323	)%		8,587			(4,167	)		(306	)%
Preferred dividends (includes accretion of issuance cost of $21, $29, $21, $29, respectively)		778			814			(4	)%		778			814			(4	)%
Deemed non-cash preferred stock dividend		—			2,390			(100	)%		—			2,390			(100	)%
Net income (loss) available to common stockholders	$	7,809		$	(7,053	)		(211	)%	$	7,809		$	(7,371	)		(206	)%
Basic per share information:
Income (loss) from continuing operations available to common stockholders	$	0.16		$	(0.05	)				$	0.16		$	(0.05	)
Loss from discontinued operations, net of tax		—			(0.10	)					—			(0.10	)
Net income (loss) available to common stockholders	$	0.16		$	(0.15	)				$	0.16		$	(0.15	)
Weighted average shares outstanding		48,040			48,630			(1	)%		48,040			48,630			(1	)%
Diluted per share information:
Income (loss) from continuing operations available to common stockholders	$	0.16		$	(0.05	)				$	0.16		$	(0.05	)
Loss from discontinued operations, net of tax		—			(0.10	)					—			(0.10	)
Net income (loss) available to common stockholders	$	0.16		$	(0.15	)				$	0.16		$	(0.15	)
Weighted average shares outstanding		48,076			48,630			(1	)%		48,076			48,630			(1	)%
Political revenue (less agency commission)	$	25,605		$	1,433			1687	%	$	25,605		$	1,713			1395	%

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Earnings release for the year ended December 31, 2006	Page 4 of 9

Gray Television, Inc.
Selected As Reported and Pro Forma Operating Data (Unaudited)
(in thousands except for per share data and percentages)

	As Reported									Pro Forma(1)
	Years Ended									Years Ended
	December 31,									December 31,
							%										%
	2006			2005			Change			2006				2005			Change
Revenues (less agency commissions)	$	332,137		$	261,553			27	%	$	334,722			$	297,050			13	%
Operating expenses:
Operating expenses before depreciation, amortization and loss on disposal of assets, net:		191,502			161,905			18	%		193,639				182,936			6	%
Corporate and administrative		15,097			11,896			27	%		15,097				11,896			27	%
Depreciation and amortization of intangible assets		36,526			25,490			43	%		37,194				32,936			13	%
Loss on disposals of assets, net		1,021			1,401			(27	)%		1,021				1,401			(27	)%
		244,146			200,692			22	%		246,951				229,169			8	%
Operating income		87,991			60,861			45	%		87,771				67,881			29	%
Other income (expense):
Miscellaneous income, net		677			558			21	%		677				558			21	%
Interest expense		(66,787	)		(46,549	)		43	%		(67,212	)			(59,511	)		13	%
Loss on early extinguishment of debt		(347	)		(6,543	)		(95	)%		(347	)			(6,543	)		(95	)%
Income from continuing operations before income tax expense		21,534			8,327			159	%		20,889				2,385			776	%
Income tax expense		9,823			3,723			164	%		9,588				930			931	%
Income from continuing operations		11,711			4,604			154	%		11,301				1,455			677	%
Loss from operations of discontinued publishing and wireless operations net of income tax expense of $0, $3,253, $0 and $3,253, respectively		—			(1,242	)		(100	)%		—				(1,242	)		(100	)%
													��
Net income		11,711			3,362			248	%		11,301				213			5206	%
Preferred dividends (includes accretion of issuance cost of $111, $87, $111 and $87, respectively)		3,247			3,258			0	%		3,247				3,258			0	%
Deemed non-cash preferred stock dividend		—			2,390			(100	)%		—				2,390			(100	)%
Net income (loss) available to common stockholders	$	8,464		$	(2,286	)		(470	)%	$	8,054			$	(5,435	)		(248	)%
Basic per share information:
Income (loss) from continuing operations available to common stockholders	$	0.17		$	(0.02	)				$	0.17			$	(0.08	)
Loss from discontinued operations, net of tax		—			(0.03	)					—				(0.03	)
Net income (loss) available to common stockholders	$	0.17		$	(0.05	)				$	0.17			$	(0.11	)
Weighted average shares outstanding		48,408			48,649			0	%		48,408				48,649			0	%
Diluted per share information:
Income (loss) from continuing operations available to common stockholders	$	0.17		$	(0.02	)				$	0.17			$	(0.08	)
Loss from discontinued operations, net of tax		—			(0.03	)					—				(0.03	)
Net income (loss) available to common stockholders	$	0.17		$	(0.05	)				$	0.17			$	(0.11	)
Weighted average shares outstanding		48,425			48,649			0	%		48,425				48,649			0	%
Political revenue (less agency commission)	$	42,682		$	2,862			1391	%	$	42,762			$	3,659			1069	%

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Earnings release for the year ended December 31, 2006	Page 5 of 9

Guidance for the First Quarter of 2007

We currently anticipate that Gray’s broadcasting results of operations for the three months ending March 31, 2007 will approximate the ranges presented in the table below.

			%			%					%			%
	2007		Change			Change			2007		Change			Change
	Guidance		From			From			Guidance		From			From
	Low		Actual			Pro Forma			High		Actual			Pro Forma			Actual		Pro Forma
Selected operating data:	Range		2006			2006			Range		2006			2006			2006		2006
	(dollars in thousands)
OPERATING REVENUES:
Revenues (less agency commissions)	$	69,000		1	%		(3	)%	$	69,500		2	%		(2	)%	$	68,234	$	70,819
														��
OPERATING EXPENSES:
(before depreciation, amortization and other expenses)
Broadcast	$	49,000		9	%		4	%	$	49,500		10	%		5	%	$	45,064	$	47,201
Corporate	$	3,800		2	%		2	%	$	3,900		4	%		4	%	$	3,743	$	3,743
OTHER SELECTED DATA:
Broadcast political revenues (less agency commissions)	$	500							$	700							$	1,776	$	1,856
Broadcast Olympic revenues (less agency commissions)	$	—							$	—							$	2,880	$	3,390
Expense for non-cash contributions to 401(k) plan	$	525							$	575							$	573	$	573
Expense for corporate non-cash stock based compensation	$	490							$	510							$	198	$	198

Pro forma information presented in this guidance section includes operating results of WNDU as if it had been acquired on January 1, 2006.

Comments on Guidance

On a pro forma basis after giving effect to the acquisition of WNDU, the growth in local revenue over the pro forma results for the first quarter of 2006 was not expected to completely off-set the $3.4 million of pro forma revenue earned from the broadcast of the 2006 Winter Olympics or the approximate $1.2 million incremental decline in pro forma political revenues.

On a pro forma basis, after giving effect to the acquisition of WNDU, approximately $1.2 million of the expected increase in broadcast operating expenses for all stations, before depreciation, amortization and loss on disposal of assets is attributable to the incremental costs of the digital second channels discussed above.

Changes in the classification of certain items:

The classification of certain prior year amounts in the accompanying consolidated financial statements have been changed in order to conform to the current year presentation.

Conference Call Information

Gray Television, Inc. will host a conference call to discuss its fourth quarter and year ended operating results on March 15, 2007. The call will begin at 2:00 PM Eastern Time. The live dial-in number is 1-800-946-

Gray Television, Inc.
Earnings release for the year ended December 31, 2006	Page 6 of 9

0716 and the confirmation code is 4477457. 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, Confirmation Code: 4477457 until March 22, 2007.

For information contact:	Web site:www.gray.tv
Bob Prather	Jim Ryan
President and Chief Operating Officer	Senior V. P. and Chief Financial Officer
(404) 266-8333	(404) 504-9828

Gray Television, Inc.
Earnings release for the year ended December 31, 2006	Page 7 of 9

Reconciliations:

Reconciliation of net income (loss) to the Non-GAAP terms:

	As Reported						Pro Forma(1)
	Three Months Ended						Three Months Ended
	December 31,						December 31,
	2006			2005			2006			2005
	(in thousands)						(in thousands)
Net income (loss)	$	8,587		$	(3,849	)	$	8,587		$	(4,167	)
Adjustments to reconcile to Adjusted Broadcast Cash Flow:
Depreciation and amortization of intangible assets		9,698			7,590			9,698			9,172
Amortization of non-cash stock based compensation		511			97			511			97
Loss on disposals of assets, net		528			1,309			528			1,309
Miscellaneous (income) expense, net		(181	)		150			(181	)		150
Interest expense		17,123			13,002			17,123			16,202
Loss on early extinguishment of debt		—			1,773			—			1,773
Income tax expense		7,765			1,450			7,765			519
Loss from discontinued operations		—			4,979			—			4,979
Amortization of program broadcast rights		3,803			2,959			3,803			2,959
Common Stock contributed to 401(k) Plan excluding corporate 401(k) contributions		556			476			556			476
Network compensation revenue recognized		(250	)		(1,060	)		(250	)		(1,060	)
Network compensation per network affiliation agreement		539			1,935			539			1,935
Payments for program broadcast rights		(4,482	)		(2,880	)		(4,482	)		(2,880	)
Broadcast Cash Flow Less Cash Corporate Expenses		44,197			27,931			44,197			31,464
Corporate and administrative expenses excluding amortization of non-cash stock based compensation		4,445			2,867			4,445			2,867
Broadcast Cash Flow	$	48,642		$	30,798		$	48,642		$	34,331

	As Reported						Pro Forma(1)
	Years Ended						Years Ended
	December 31,						December 31,
	2006			2005			2006			2005
	(in thousands)						(in thousands)
Net income	$	11,711		$	3,362		$	11,301		$	213
Adjustments to reconcile to Adjusted Broadcast Cash Flow:
Depreciation and amortization of intangible assets		36,526			25,490			37,194			32,936
Amortization of non-cash stock based compensation		1,092			391			1,092			391
Loss on disposals of assets, net		1,021			1,401			1,021			1,401
Miscellaneous (income) expense, net		(677	)		(558	)		(677	)		(558	)
Interest expense		66,787			46,549			67,212			59,511
Loss on early extinguishment of debt		347			6,543			347			6,543
Income tax expense		9,823			3,723			9,588			930
Loss from discontinued operations		—			1,242			—			1,242
Amortization of program broadcast rights		14,234			11,577			14,234			11,577
Common Stock contributed to 401(k) Plan excluding corporate 401(k) contributions		2,234			1,912			2,234			1,912
Network compensation revenue recognized		(1,089	)		(5,095	)		(1,089	)		(5,095	)
Network compensation per network affiliation agreement		2,216			8,031			2,216			8,031
Payments for program broadcast rights		(14,839	)		(11,452	)		(14,839	)		(11,452	)
Broadcast Cash Flow Less Cash Corporate Expenses		129,386			93,116			129,834			107,582
Corporate and administrative expenses excluding amortization of non-cash stock based compensation		14,005			11,505			14,005			11,505
Broadcast Cash Flow	$	143,391		$	104,621		$	143,839		$	119,087

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Earnings release for the year ended December 31, 2006	Page 8 of 9

Non-GAAP Terms

This press release includes the non-GAAP financial measure of Broadcast Cash Flow and Broadcast Cash Flow Less Cash Corporate Expenses. These non-GAAP amounts are used by the Company to approximate the amount used to calculate key financial performance covenants including, but not limited to, limitations on debt, interest coverage, and fixed charge coverage ratios as defined in the Company’s senior credit facility and/or senior subordinated note indenture. Broadcast Cash Flow is defined as operating income, plus corporate expense, depreciation and amortization (including amortization of program broadcast rights), non-cash compensation and (gain) loss on disposal of assets and cash payments received or receivable under network affiliation agreements less payments for program broadcast obligations, less network compensation revenue and less income (loss) from discontinued operations, net of income taxes. Corporate expenses (excluding depreciation, amortization and non-cash stock based compensation) are deducted from Broadcast Cash Flow to calculate “Broadcast Cash Flow Less Cash Corporate Expenses”. These non-GAAP terms are used 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 (loss) calculated in accordance with GAAP.

Notes

(1) The pro forma presentation gives effect to the results of operations for the acquisition of television stations WSAZ, Charleston — Huntington, WV on November 30, 2005 and WNDU, South Bend, IN on March 3, 2006 as if each station had been acquired on January 1, 2005. Due to the relative size of the acquisition of KKCO, Grand Junction, CO and WSWG, Albany, GA, the results of operations for KKCO and WSWG are included as of their respective acquisition date in both the “As Reported” and “Pro Forma” results.

(2) Total debt as of December 31, 2006 and December 31, 2005 does not include $653,000 and $811,000, respectively, of unamortized debt discount on Gray’s 9¹/4% Senior Subordinated Notes due 2011. The decrease is due to the amortization of the discount.

The Company

Gray Television, Inc. is a television broadcast company headquartered in Atlanta, GA. Gray currently operates 36 television stations serving 30 markets. Each of the stations are affiliated with either CBS (17 stations), NBC (10 stations), ABC (8 stations) or FOX (1 station). In addition, Gray currently operates 36 digital second channels including 1 ABC, 5 Fox, 7 CW and 15 MyNetworkTV affiliates plus 6 local news/weather channels and 2 “independent” channels in certain of its existing markets. Gray intends to start an additional 4 digital second channels during 2007 including 1 CW affiliate, 1 MyNetworkTV affiliate and 2 local news/weather channels.

Cautionary Statements for Purposes of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act

The comments on Gray’s current expectations of operating results for the first quarter of 2007 and other future events are “forward looking statements” for purposes of the Private Securities Litigation Reform Act of 1995. Actual results of operations are subject to a number of risks and uncertainties and may differ materially from the current expectations discussed in this press release. All information set forth in this release and its attachments is as of March 15, 2007. Gray does not intend, and undertakes no duty, to update this information to reflect future events or circumstances. Information about potential factors that could affect Gray’s business and financial results and cause actual results to differ materially from those in the forward-looking statements is included under the captions, “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in Gray’s Annual Report on Form 10-K for the year ended December 31, 2006 which is on file with the SEC and available at the SEC’s website at www.sec.gov.

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