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

Gray
Television, Inc. Exhibit 99

NEWS RELEASE

Gray Reports Operating Results

For the Three Months and Nine Months Ended September 30, 2008

Atlanta, Georgia — November 5, 2008. . . Gray Television, Inc. (“Gray,” “we” or “us”) (NYSE: GTN) today announced results from operations for the three months (the “third quarter”) and nine months ended September 30, 2008 as compared to the three months and nine months ended September 30, 2007.

Comments on Results of Operations for the Three Months Ended September 30, 2008:

Revenues.

Total net revenue increased $9.0 million, or 12%, to $82.6 million due primarily to increased political and internet advertising revenue, partially offset by decreased local and national advertising revenue in the third quarter of 2008. The increase in political advertising revenue reflects increased advertising from political candidates in the 2008 general elections. Spending on political advertising during the third quarter of 2008 was the strongest at our stations in Colorado, West Virginia, Wisconsin, Michigan and North Carolina, accounting for approximately 67% of the total political net revenue for the third quarter of 2008. Increased internet advertising revenue reflects our internet sales initiatives in each of our markets. The decrease in local and national revenue was largely due to the general weakness in the economy offset in part by $3.4 million of net revenue earned in the third quarter attributable to the broadcast of the 2008 Summer Olympics on our ten NBC stations.

Political advertising revenue increased $11.6 million, or 801%, to $13.1 million.

Internet advertising revenue increased $0.4 million, or 18%, to $3.0 million.

Local advertising revenue decreased $1.5 million, or 3%, to $46.3 million.

National advertising revenue decreased $1.7 million, or 9%, to $17.5 million.

Operating expenses.

Broadcast expenses (before depreciation, amortization and loss on disposal of assets) increased $0.3 million, or 1%, to $49.9 million. This modest increase primarily reflects the impact of increased national sales representative commissions on the incremental political advertising revenues offset in part by a slight reduction in payroll related costs.

Corporate and administrative expenses (before depreciation, amortization and gain/loss on disposal of assets) decreased $0.2 million, or 5%, to $3.8 million primarily reflecting a decrease in incentive based compensation expenses.

We recorded non-cash stock-based compensation expense during the three months ended September 30, 2008 and 2007 of $399,000 and $285,000, respectively.

Comments on Results of Operations for the Nine Months Ended September 30, 2008:

Revenues.

Total net revenue increased $9.4 million, or 4%, to $232.4 million due primarily to increased political and internet advertising revenue, partially offset by decreased local and national advertising revenue in the nine months ended September 30, 2008. The increase in political advertising revenue reflects increased advertising from political candidates in the 2008 primary and general elections. Spending on political

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

advertising was the strongest at our stations in Colorado, West Virginia, Wisconsin, Michigan and North Carolina, accounting for approximately 60% of the total political net revenue for the nine months ended September 30, 2008. Increased internet advertising revenue reflects our internet sales initiatives in each of our markets. The decrease in local and national revenue was largely due to the general weakness in the economy and due to the change in networks broadcasting the Super Bowl. During the first nine months of 2008, we earned approximately $130,000 of net revenue relating to the 2008 Super Bowl broadcast on our six Fox channels compared to approximately $750,000 of net revenue relating to the 2007 Super Bowl broadcast on our 17 CBS channels during the first nine months of 2007. The decrease in local and national revenue was offset in part by $3.4 million of net revenue earned in the third quarter attributable to the broadcast of the 2008 Summer Olympics on our ten NBC stations.

Political advertising revenue increased $15.9 million, or 307%, to $21.1 million.

Internet advertising revenue increased $1.8 million, or 26%, to $8.6 million.

Local advertising revenue decreased $5.0 million, or 3%, to $141.5 million.

National advertising revenue decreased $3.8 million, or 7%, to $52.4 million.

Operating expenses.

Broadcast expenses (before depreciation, amortization and gain/loss on disposal of assets) increased $0.9 million, or 1%, to $148.4 million. This modest increase primarily reflects the impact of increased national sales representative commissions on the incremental political advertising revenues.

Corporate and administrative expenses (before depreciation, amortization and loss on disposal of assets) decreased $1.6 million, or 13%, to $10.0 million primarily reflecting a decrease in incentive based compensation expenses.

We recorded non-cash stock-based compensation expense during the nine months ended September 30, 2008 and 2007 of $1,088,000 and $1,115,000, respectively.

Internet Initiatives:

We have continued to expand our internet initiatives in each of our markets. Our focus has been to expand local content to attract traffic to our websites.

This strong revenue growth reflects the significantly increased traffic to our websites as illustrated below by the aggregate page views reported by our websites in the three-month and nine-month periods ended September 30, 2008 compared to the three-month and nine-month periods ended September 30, 2007.

Gray Television, Inc.
Earnings Release for the three months and nine months ended September 30, 2008 Page 2 of 11

Gray Websites — Aggregate Page Views

	Three Months Ended
	September 30,
					%
	2008		2007		Change
	(in millions)
Total Aggregate Page Views (including video plays and cell phone page views)		149.3		101.2		48	%

	Nine Months Ended
	September 30,
					%
	2008		2007		Change
	(in millions)
Total Aggregate Page Views (including video plays and cell phone page views)		461.8		304.8		52	%

We attribute the increase in our website traffic to increased posting of local content and public awareness of our websites as the result of our on-air promotion of our websites.

The aggregate internet revenues discussed above are derived from two sources. The first source is advertising or sponsorship opportunities directly on our websites. We call this “direct internet revenue.” The other source is television advertising time purchased by our clients to directly promote their involvement in our websites. We refer to this internet revenue source as “internet related commercial time sales.”

In the future, we anticipate our direct internet revenue will grow at a significantly faster pace relative to our internet related commercial time sales.

Gray Television, Inc.
Earnings Release for the three months and nine months ended September 30, 2008 Page 3 of 11

Other Financial Data:

	September 30, 2008			December 31, 2007
	(in thousands)
Cash and cash equivalents	$	32,575		$	15,338
Total debt		830,446			925,000
Preferred stock		91,883			—
Credit commitment under senior credit facility		100,000			100,000
	Nine Months Ended September 30,
	2008			2007
	(in thousands )
Net cash provided by operating activities	$	36,692		$	11,919
Net cash used in investing activities		(12,144	)		(22,575	)
Net cash (used in) provided by financing activities		(7,311	)		7,148

On June 26, 2008, we issued 750 shares of Series D Perpetual Preferred Stock (the “Series D Preferred Stock”) having an aggregate liquidation value of $75.0 million in a privately placed transaction to qualified investors. We received approximately $68.6 million in net proceeds after issuance discounts and transaction expenses. Also on June 26, 2008, we used $65.0 million of the net proceeds from the issuance to make a voluntary prepayment on our term loan under our senior credit facility. We retained the remaining $3.6 million of the net proceeds for general corporate purposes.

On July 15, 2008, we issued an additional 250 shares of Series D Perpetual Preferred Stock having an aggregate liquidation value of $25.0 million in a privately placed transaction to qualified investors. We received approximately $23.0 million in net proceeds after issuance discounts and transaction expenses. Also on July 15, 2008, we used the $23.0 million of net proceeds from the issuance to make a voluntary prepayment on our term loan under our senior credit facility.

Subsequent Event:

On October 3, 2008, we used cash on hand to make a voluntary prepayment of $10 million on our term loan under our senior credit facility. After applying this voluntary prepayment, the total outstanding balance on our term loan was $820.4 million and we had no amounts outstanding on our revolving credit facility under our senior credit facility.

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

Gray Television, Inc.
Earnings Release for the three months and nine months ended September 30, 2008 Page 4 of 11

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

	Three Months Ended
	September 30,
							%
	2008			2007			Change
Revenues (less agency commissions)	$	82,631		$	73,585			12	%
Operating expenses before depreciation, amortization and gain on disposal of assets, net:
Broadcast		49,907			49,583			1	%
Corporate and administrative		3,754			3,932			(5	)%
Depreciation and amortization of intangible assets		8,797			10,156			(13	)%
(Gain) loss on disposals of assets, net		(338	)		5			(6860	)%
		62,120			63,676			(2	)%
Operating income		20,511			9,909			107	%
Other income (expense):
Miscellaneous income, net		36			177			(80	)%
Interest expense		(12,626	)		(16,812	)		(25	)%
Income (loss) before income tax		7,921			(6,726	)
Income tax expense (benefit)		3,277			(2,546	)
Net income (loss)		4,644			(4,180	)
Preferred dividends (includes accretion of issuance cost of $275 and $0, respectively)		3,167			—
Net income (loss) available to common stockholders	$	1,477		$	(4,180	)
Basic per share information:
Net income (loss) available to common stockholders	$	0.03		$	(0.09	)
Weighted average shares outstanding		48,370			47,760			1	%
Diluted per share information:
Net income (loss) available to common stockholders	$	0.03		$	(0.09	)
Weighted average shares outstanding		48,413			47,760			1	%
Political revenue (less agency commission)	$	13,065		$	1,450			801	%

Gray Television, Inc.
Earnings Release for the three months and nine months ended September 30, 2008 Page 5 of 11

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

	Nine Months Ended
	September 30,
							%
	2008			2007			Change
Revenues (less agency commissions)	$	232,373		$	223,015			4	%
Operating expenses before depreciation, amortization and gain on disposal of assets, net:
Broadcast		148,383			147,449			1	%
Corporate and administrative		10,015			11,577			(13	)%
Depreciation and amortization of intangible assets		26,788			30,048			(11	)%
(Gain) loss on disposals of assets, net		(1,343	)		122			(1201	)%
		183,843			189,196			(3	)%
Operating income		48,530			33,819			43	%
Other income (expense):
Miscellaneous income, net		126			984			(87	)%
Interest expense		(41,827	)		(50,610	)		(17	)%
Loss on early extinguishment of debt		—			(22,853	)
Income (loss) before income tax benefit		6,829			(38,660	)
Income tax expense (benefit)		2,820			(14,021	)
Net income (loss)		4,009			(24,639	)
Preferred dividends (includes accretion of issuance cost of $275 and $439, respectively)		3,292			1,626			102	%
Net income (loss) available to common stockholders	$	717		$	(26,265	)
Basic per share information:
Net income (loss) available to common stockholders	$	0.01		$	(0.55	)
Weighted average shares outstanding		48,253			47,728			1	%
Diluted per share information:
Net income (loss) available to common stockholders	$	0.01		$	(0.55	)
Weighted average shares outstanding		48,293			47,728			1	%
Political revenue (less agency commission)	$	21,089		$	5,181			307	%

Gray Television, Inc.
Earnings Release for the three months and nine months ended September 30, 2008 Page 6 of 11

Guidance for the Fourth Quarter of 2008

We currently anticipate that our broadcast results of operations for the three months ending December 31, 2008 (the “fourth quarter of 2008”) will approximate the ranges presented in the table below.

			%					%
	2008		Change			2008		Change
	Guidance		From			Guidance		From
	Low		Actual			High		Actual			Actual
Selected Operating Data:	Range		2007			Range		2007			2007
	(dollars in thousands)
OPERATING REVENUES:
Revenues (less agency commissions)	$	90,000		7	%	$	95,000		13	%	$	84,272
OPERATING EXPENSES:
(before depreciation, amortization and other expenses)
Broadcast	$	51,500		(1	)%	$	52,000		0	%	$	52,238
Corporate and administrative	$	3,000		(15	)%	$	3,500		0	%	$	3,513
OTHER SELECTED DATA:
Broadcast political revenues (less agency commissions)	$	26,000				$	26,500				$	2,627
Expense for non-cash contributions to 401(k) plan	$	550				$	600				$	411
Expense for corporate non-cash stock-based compensation	$	375				$	400				$	134

Comments on Guidance

Total revenues anticipated for the fourth quarter of 2008 reflect an incremental increase in political revenues. Local non-political advertising revenue for the fourth quarter of 2008 is currently anticipated to be down approximately mid double digits compared to the results of the three-month period ended December 31, 2007 (the “fourth quarter of 2007”). National non-political advertising revenue is currently anticipated to be down approximately 25% in the fourth quarter of 2008 compared to the fourth quarter of 2007. Internet advertising revenue for the fourth quarter of 2008 is currently anticipated to increase approximately 10% to 15% compared to the fourth quarter of 2007.

Gray Television, Inc.
Earnings Release for the three months and nine months ended September 30, 2008 Page 7 of 11

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.

In our disclosures issued prior to December 31, 2007, we had included internet advertising revenue with local advertising revenue and retransmission consent revenue was included with production and other revenue. We are now presenting internet advertising revenue and retransmission consent revenue separately. The table below presents our expanded disclosure for the three-month and nine month periods ended September 30, 2008 and 2007, respectively (dollars in thousands):

	Three Months Ended September 30,
	2008					2007
			Percent					Percent
	Amount		of Total			Amount		of Total
Broadcasting net revenues :
Local	$	46,279		56.0	%	$	47,761		64.9	%
National		17,546		21.2	%		19,237		26.1	%
Internet		2,954		3.6	%		2,505		3.4	%
Political		13,065		15.8	%		1,450		2.0	%
Retransmission consent		762		0.9	%		501		0.7	%
Production and other		1,841		2.2	%		1,951		2.7	%
Network compensation		184		0.3	%		180		0.2	%
Total	$	82,631		100.0	%	$	73,585		100.0	%

	Nine Months Ended September 30,
	2008					2007
			Percent					Percent
	Amount		of Total			Amount		of Total
Broadcasting net revenues:
Local	$	141,493		60.9	%	$	146,467		65.7	%
National		52,362		22.5	%		56,192		25.2	%
Internet		8,631		3.7	%		6,830		3.1	%
Political		21,089		9.1	%		5,181		2.3	%
Retransmission consent		2,209		1.0	%		1,443		0.6	%
Production and other		6,025		2.6	%		6,338		2.8	%
Network compensation		564		0.2	%		564		0.3	%
Total	$	232,373		100.0	%	$	223,015		100.0	%

The aggregate internet revenue presented above are derived from two sources: (i) direct internet revenue and (ii) internet related commercial time sales.

Gray Television, Inc.
Earnings Release for the three months and nine months ended September 30, 2008 Page 8 of 11

Conference Call Information

     We will host a conference call to discuss our third quarter operating results on November 5, 2008. The call will begin at 11:00 AM Eastern Time. The live dial-in number is 1 (800) 533-7619 and the confirmation code is 8072046. 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: 8072046 until December 4, 2008.

For information contact:	Website: 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 three months and nine months ended September 30, 2008 Page 9 of 11

Reconciliations:
Reconciliation of net income (loss) to the non-GAAP terms (in thousands):

	As Reported
	Three Months Ended
	September 30,
	2008			2007
Net income (loss)	$	4,644		$	(4,180	)
Adjustments to reconcile to Broadcast Cash Flow Less Cash Corporate Expenses:
Depreciation and amortization of intangible assets		8,797			10,156
Amortization of non-cash stock based compensation		399			285
(Gain) loss on disposals of assets, net		(338	)		5
Miscellaneous (income) expense, net		(36	)		(177	)
Interest expense		12,626			16,812
Income tax expense (benefit)		3,277			(2,546	)
Amortization of program broadcast rights		3,926			3,750
Common stock contributed to 401(k) plan excluding corporate 401(k) contributions		553			550
Network compensation revenue recognized		(184	)		(180	)
Network compensation per network affiliation agreement		30			78
Payments for program broadcast rights		(3,708	)		(3,821	)
Broadcast Cash Flow Less Cash Corporate Expenses		29,986			20,732
Corporate and administrative expenses excluding amortization of non-cash stock-based compensation		3,355			3,647
Broadcast Cash Flow	$	33,341		$	24,379

	As Reported
	Nine Months Ended
	September 30,
	2008			2007
Net income (loss)	$	4,009		$	(24,639	)
Adjustments to reconcile to Broadcast Cash Flow Less Cash Corporate Expenses:
Depreciation and amortization of intangible assets		26,788			30,048
Amortization of non-cash stock based compensation		1,088			1,115
(Gain) loss on disposals of assets, net		(1,343	)		122
Miscellaneous (income) expense, net		(126	)		(984	)
Interest expense		41,827			50,610
Loss on early extinguishment of debt		—			22,853
Income tax expense (benefit)		2,820			(14,021	)
Amortization of program broadcast rights		11,598			11,345
Common stock contributed to 401(k) plan excluding corporate 401(k) contributions		1,751			1,750
Network compensation revenue recognized		(564	)		(564	)
Network compensation per network affiliation agreement		90			235
Payments for program broadcast rights		(10,149	)		(11,507	)
Broadcast Cash Flow Less Cash Corporate Expenses		77,789			66,363
Corporate and administrative expenses excluding amortization of non-cash stock-based compensation		8,927			10,462
Broadcast Cash Flow	$	86,716		$	76,825

See the next page for the definition of Non-GAAP terms.

Gray Television, Inc.
Earnings Release for the three months and nine months ended September 30, 2008 Page 10 of 11

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 us to approximate the amount used to calculate a key financial performance covenant as defined in our senior credit facility. 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 loss calculated in accordance with GAAP.

Gray Television, Inc.

Gray Television, Inc. is a television broadcast company headquartered in Atlanta, GA. We currently operate 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, we currently operate 39 digital second channels including 1 ABC, 5 Fox, 7 CW and 16 MyNetworkTV affiliates plus 8 local news/weather channels and 2 “independent” channels in certain of our existing markets.

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

The comments on our current expectations of operating results for the fourth quarter of 2008 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 November 5, 2008. We do not intend, and undertake no duty, to update this information to reflect future events or circumstances. Information about potential factors that could affect our business and financial results and cause actual results to differ materially from those in the 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, 2007 which is on file with the SEC and available at the SEC’s website at www.sec.gov.

Gray Television, Inc.
Earnings Release for the three months and nine months ended September 30, 2008 Page 11 of 11