EX-99.4 12 d236219dex994.htm EX-99.4

Exhibit 99.4

UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

The following unaudited pro forma combined financial statements of Gray give effect to the Meredith Transactions (as defined below), including the Meredith Acquisition (or the “Meredith Merger”) for an adjusted purchase price of approximately $2.8 billion, the offering of Gray’s $1,300,000,000 5.375% Senior Notes due 2031, the funding of a $1.5 billion incremental term loan, an amendment and restatement of the Gray’s revolving credit facility to up to $500 million, which would consist of (i) a $425 million five year revolving credit facility and (ii) a $75 million revolving credit facility with commitments expiring January 2, 2026, and the payment of fees and expenses in connection with each of the foregoing, and the recently completed divesture of WJRT (ABC) (“WJRT”) in Flint MI to an affiliate of Allen Media Broadcasting, LLC (“Allen Media”) for $70 million in cash (the “WJRT Transaction”) to facilitate regulatory approvals of the Meredith Merger (each of the foregoing, collectively, the “Meredith Transactions”).

We have derived the unaudited pro forma combined financial information for the nine month period ended September 30, 2021 and the year ended December 31, 2020 from the historical consolidated financial statements of Gray, which has a fiscal year ending on December 31, and from the historical combined financial statements of Meredith LMG, which has a fiscal year ending on June 30.

The unaudited pro forma combined statements of operations for the nine month period ended September 30, 2021 and the year ended December 31, 2020 were prepared based on the historical: (i) consolidated statements of operations of Gray; and (ii) combined financial statements of operations of Meredith LMG, giving pro forma effect to the Meredith Transactions and the divestiture of WJRT (ABC) in the Flint-Saginaw, Michigan market as if they had all been consummated on January 1, 2020. The unaudited pro forma combined balance sheet was prepared based on the historical: (i) consolidated balance sheet of Gray and (ii) combined balance sheet of Meredith LMG, each as of September 30, 2021, giving pro forma effect to the Meredith Transactions as if they had all been consummated on September 30, 2021. The following unaudited pro forma combined financial statements do not give effect to the acquisition of all of the outstanding shares of capital stock of Quincy Media, Inc. and related divestures (the “Quincy Transactions”) or the acquisition of Third Rail Studios (the “Third Rail Transaction”).

The following unaudited pro forma combined financial information was prepared using the acquisition method of accounting, with Gray considered the acquirer of Meredith LMG. Under the acquisition method of accounting, the purchase price is allocated to the underlying tangible and intangible assets acquired and liabilities assumed based on their respective fair values at the date of acquisition, with any excess purchase price allocated to goodwill. To date, Gray has completed only a preliminary allocation of the purchase price to the assets acquired and liabilities assumed in the Meredith Merger and is in the process of completing a final allocation of such purchase price. The final purchase price allocation may differ from that reflected in the following unaudited pro forma combined financial statements, and these differences may be material.

The following unaudited pro forma combined financial information is being provided for illustrative purposes only and does not purport to represent what the actual consolidated results of operations of Gray would have been had the Meredith Transactions and the WJRT Transaction occurred on the date assumed or any other date, nor is it necessarily indicative of Gray’s future results of operations for any future period or as of any future date. The following unaudited pro forma combined financial information is based upon currently available information and estimates and assumptions that Gray management believes are reasonable as of the date hereof. Any of the factors underlying these estimates and assumptions may change or prove to be materially different.

The following unaudited pro forma combined financial information does not contain all of the information you should consider before deciding whether or not to invest in the notes and should be read in conjunction with the unaudited interim historical consolidated financial statements as of and for the nine month period ended September 30, 2021 and the audited historical consolidated financial statements as of and for the year ended December 31, 2020 of Gray, which have been filed with the Securities and Exchange Commission (“SEC”), and the combined financial statements and notes thereto, of Meredith LMG, incorporated by reference into this Current Report on Form 8-K.

Gray has incurred significant costs, and expects to achieve certain revenue and other synergies, in connection with the completion of the Meredith Merger and the integration of the acquired operations. The following unaudited pro forma combined financial statements do not reflect the costs of any integration activities or benefits that may result from realization of future cost savings from operating efficiencies, or any revenue, tax or other synergies expected to result from the Meredith Merger. Assumptions underlying the pro forma adjustments are described in the accompanying notes, which should be read in conjunction with the unaudited pro forma combined financial statements.

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GRAY TELEVISION, INC.

UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS

(IN MILLIONS)

|  | Nine Month Period Ended September 30, 2021 |
|  | Gray |  |  | Meredith LMG (a) |  |  | Pro Forma Adjustments (b) |  |  | Pro Forma |
Statement of Operations Data: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenue (less agency commissions): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Broadcasting |  | $ | 1,648 |  |  | $ | 548 |  |  | $ | (19 | ) |  | $ | 2,177 |
Production companies |  |  | 44 |  |  |  | — |  |  |  | — |  |  |  | 44 |
Total revenue (less agency commissions) |  |  | 1,692 |  |  |  | 548 |  |  |  | (19 | ) |  |  | 2,221 |
Operating expenses before depreciation, amortization, and gain on disposals of assets, net: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Broadcasting |  |  | 1,099 |  |  |  | 379 |  |  |  | (13 | ) |  |  | 1,465 |
Production companies |  |  | 39 |  |  |  | — |  |  |  | — |  |  |  | 39 |
Corporate and administrative |  |  | 75 |  |  |  | 19 |  |  |  | (27 | ) |  |  | 67 |
Restructuring and related activities |  |  | — |  |  |  | 2 |  |  |  | (2 | ) |  |  | — |
Depreciation |  |  | 76 |  |  |  | 16 |  |  |  | (2 | ) |  |  | 90 |
Amortization of intangible assets |  |  | 81 |  |  |  | 5 |  |  |  | 195 |  |  |  | 281 |
Impairment of long-lived assets |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
(Gain) loss on disposal of assets, net |  |  | 46 |  |  |  | — |  |  |  | (5 | ) |  |  | 41 |
Operating expenses, net |  |  | 1,416 |  |  |  | 421 |  |  |  | 146 |  |  |  | 1,983 |
Operating income |  |  | 276 |  |  |  | 127 |  |  |  | (165 | ) |  |  | 238 |
Other income (expense): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Miscellaneous (expense) income, net |  |  | (7 | ) |  |  | 1 |  |  |  | — |  |  |  | (6 | )
Interest expense |  |  | (143 | ) |  |  | — |  |  |  | (93 | ) |  |  | (236 | )
Loss on early extinguishment of debt |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Income before income taxes |  |  | 126 |  |  |  | 128 |  |  |  | (258 | ) |  |  | (4 | )
Income tax expense |  |  | 65 |  |  |  | 32 |  |  |  | (65 | ) |  |  | 32 |
Net income |  |  | 61 |  |  |  | 96 |  |  |  | (193 | ) |  |  | (36 | )
Preferred stock dividends |  |  | 39 |  |  |  | — |  |  |  | — |  |  |  | 39 |
Net income attributable to common stockholders |  | $ | 22 |  |  | $ | 96 |  |  | $ | (193 | ) |  | $ | (75 | )
Basic per share information: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income available to common stockholders |  | $ | 0.23 |  |  |  |  |  |  |  |  |  |  | $ | (0.80 | )
Weighted average shares outstanding |  |  | 94 |  |  |  |  |  |  |  |  |  |  |  | 94 |
Diluted per share information: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income available to common stockholders |  | $ | 0.23 |  |  |  |  |  |  |  |  |  |  | $ | (0.79 | )
Weighted average shares outstanding |  |  | 95 |  |  |  |  |  |  |  |  |  |  |  | 95 |

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GRAY TELEVISION, INC.

UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS

(IN MILLIONS)

|  | Year Ended December 31, 2020 |
|  | Gray |  |  | Meredith LMG (a) |  |  | Pro Forma Adjustments (b) |  |  | Pro Forma |
Statement of Operations Data: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenue (less agency commissions): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Broadcasting |  | $ | 2,320 |  |  | $ | 839 |  |  | $ | (27 | ) |  | $ | 3,132 |
Production companies |  |  | 61 |  |  |  | — |  |  |  | — |  |  |  | 61 |
Total revenue (less agency commissions) |  |  | 2,381 |  |  |  | 839 |  |  |  | (27 | ) |  |  | 3,193 |
Operating expenses before depreciation, amortization, and gain on disposals of assets, net: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Broadcasting |  |  | 1,340 |  |  |  | 500 |  |  |  | (16 | ) |  |  | 1,824 |
Production companies |  |  | 52 |  |  |  | — |  |  |  | — |  |  |  | 52 |
Corporate and administrative |  |  | 65 |  |  |  | 23 |  |  |  | (23 | ) |  |  | 65 |
Restructuring and related activities |  |  | — |  |  |  | 7 |  |  |  | (7 | ) |  |  | — |
Depreciation |  |  | 96 |  |  |  | 24 |  |  |  | (11 | ) |  |  | 109 |
Amortization of intangible assets |  |  | 105 |  |  |  | 9 |  |  |  | 191 |  |  |  | 305 |
Impairment of long-lived assets |  |  | — |  |  |  | 22 |  |  |  | — |  |  |  | 22 |
(Gain) loss on disposal of assets, net |  |  | (29 | ) |  |  | (1 | ) |  |  | — |  |  |  | (30 | )
Operating expenses, net |  |  | 1,629 |  |  |  | 584 |  |  |  | 134 |  |  |  | 2,347 |
Operating income |  |  | 752 |  |  |  | 255 |  |  |  | (161 | ) |  |  | 846 |
Other income (expense): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Miscellaneous (expense) income, net |  |  | (5 | ) |  |  | (2 | ) |  |  | — |  |  |  | (7 | )
Interest expense |  |  | (191 | ) |  |  | — |  |  |  | (124 | ) |  |  | (315 | )
Loss on early extinguishment of debt |  |  | (12 | ) |  |  | — |  |  |  | — |  |  |  | (12 | )
Income before income taxes |  |  | 544 |  |  |  | 253 |  |  |  | (285 | ) |  |  | 512 |
Income tax expense |  |  | 134 |  |  |  | 63 |  |  |  | (69 | ) |  |  | 128 |
Net income |  |  | 410 |  |  |  | 190 |  |  |  | (216 | ) |  |  | 384 |
Preferred stock dividends |  |  | 52 |  |  |  | — |  |  |  | — |  |  |  | 52 |
Net income attributable to common stockholders |  | $ | 358 |  |  | $ | 190 |  |  | $ | (216 | ) |  | $ | 332 |
Basic per share information: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income available to common stockholders |  | $ | 3.73 |  |  |  |  |  |  |  |  |  |  | $ | 3.46 |
Weighted average shares outstanding |  |  | 96 |  |  |  |  |  |  |  |  |  |  |  | 96 |
Diluted per share information: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net income available to common stockholders |  | $ | 3.69 |  |  |  |  |  |  |  |  |  |  | $ | 3.42 |
Weighted average shares outstanding |  |  | 97 |  |  |  |  |  |  |  |  |  |  |  | 97 |

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GRAY TELEVISION, INC.

UNAUDITED PRO FORMA COMBINED BALANCE SHEET

(IN MILLIONS)

|  | As of September 30, 2021 |
|  | Gray |  |  | Meredith LMG (c) |  |  | Pro Forma Adjustments (d) |  |  | Pro Forma |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash |  | $ | 322 |  |  | $ | — |  |  | $ | (88 | ) |  | $ | 234 |
Accounts receivable, net |  |  | 440 |  |  |  | 135 |  |  |  | — |  |  |  | 575 |
Current portion of program broadcast rights, net |  |  | 32 |  |  |  | 16 |  |  |  | — |  |  |  | 48 |
Income tax refunds receivable |  |  | 21 |  |  |  | — |  |  |  | — |  |  |  | 21 |
Prepaid income taxes |  |  | 28 |  |  |  | — |  |  |  | 7 |  |  |  | 35 |
Prepaid and other current assets |  |  | 29 |  |  |  | 1 |  |  |  | — |  |  |  | 30 |
Total current assets |  |  | 872 |  |  |  | 152 |  |  |  | (81 | ) |  |  | 943 |
Property and equipment, net |  |  | 908 |  |  |  | 114 |  |  |  | 51 |  |  |  | 1,073 |
Broadcast rights |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Operating leases right of use asset |  |  | 56 |  |  |  | 20 |  |  |  | — |  |  |  | 76 |
Broadcast licenses |  |  | 3,784 |  |  |  | 653 |  |  |  | 497 |  |  |  | 4,934 |
Goodwill |  |  | 1,633 |  |  |  | 112 |  |  |  | 820 |  |  |  | 2,565 |
Other intangible assets, net |  |  | 407 |  |  |  | 64 |  |  |  | 936 |  |  |  | 1,407 |
Investments in broadcasting and technology companies |  |  | 105 |  |  |  | — |  |  |  | — |  |  |  | 105 |
Other |  |  | 14 |  |  |  | 10 |  |  |  | — |  |  |  | 24 |
Total assets |  | $ | 7,779 |  |  | $ | 1,125 |  |  | $ | 2,223 |  |  | $ | 11,127 |
Liabilities and stockholders’ equity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accounts payable |  | $ | 34 |  |  | $ | 27 |  |  | $ | — |  |  | $ | 61 |
Employee compensation and benefits |  |  | 70 |  |  |  | — |  |  |  | — |  |  |  | 70 |
Accrued interest |  |  | 50 |  |  |  | — |  |  |  | — |  |  |  | 50 |
Accrued network programming fees |  |  | 35 |  |  |  | — |  |  |  | — |  |  |  | 35 |
Other accrued expenses |  |  | 26 |  |  |  | 45 |  |  |  | — |  |  |  | 71 |
Current portion of program broadcast obligations |  |  | 33 |  |  |  | 17 |  |  |  | — |  |  |  | 50 |
Deferred revenue |  |  | 11 |  |  |  | 5 |  |  |  | — |  |  |  | 16 |
Dividends payable |  |  | 13 |  |  |  | — |  |  |  | — |  |  |  | 13 |
Current portion of operating lease liabilities |  |  | 8 |  |  |  | 2 |  |  |  | — |  |  |  | 10 |
Current portion of long-term debt |  |  | — |  |  |  | — |  |  |  | 15 |  |  |  | 15 |
Total current liabilities |  |  | 280 |  |  |  | 96 |  |  |  | 15 |  |  |  | 391 |
Long-term debt, less deferred loan costs |  |  | 3,981 |  |  |  | — |  |  |  | 2,722 |  |  |  | 6,703 |
Program broadcast obligations, less current portion |  |  | 3 |  |  |  | 6 |  |  |  | — |  |  |  | 9 |
Deferred income taxes |  |  | 994 |  |  |  | 126 |  |  |  | 377 |  |  |  | 1,497 |
Accrued pension costs |  |  | 39 |  |  |  | — |  |  |  | — |  |  |  | 39 |
Operating lease liabilities, less current portion |  |  | 51 |  |  |  | 18 |  |  |  | — |  |  |  | 69 |
Other |  |  | 19 |  |  |  | 6 |  |  |  | — |  |  |  | 25 |
Total liabilities |  |  | 5,367 |  |  |  | 252 |  |  |  | 3,114 |  |  |  | 8,733 |
Perpetual redeemable preferred stock |  |  | 650 |  |  |  | — |  |  |  | — |  |  |  | 650 |
Stockholders’ equity |  |  | 1,762 |  |  |  | 873 |  |  |  | (891 | ) |  |  | 1,744 |
Total liabilities, preferred stock and stockholders’ equity |  | $ | 7,779 |  |  | $ | 1,125 |  |  | $ | 2,223 |  |  | $ | 11,127 |

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The accompanying unaudited pro forma combined financial statements present the pro forma combined financial position and results of operations of the combined company based upon the historical financial statements of each of Gray and Meredith LMG, after giving effect to the Meredith Transactions and the divestiture of WJRT (ABC) in the Flint-Saginaw, Michigan market, including the pro forma adjustments described in these notes, and are intended to reflect the impact of the transactions on Gray’s historical financial position and consolidated results of operations. The unaudited pro forma combined statements of operations for the nine month period ended September 30, 2021 and the year ended December 31, 2020 combine the historical consolidated statements of operations of Gray with the historical combined financial statements of operations of Meredith LMG, as if the Meredith Transactions and the divestiture of WJRT had occurred as of January 1, 2020. The unaudited pro forma combined balance sheet as of September 30, 2021 combines the historical consolidated balance sheet of Gray with the historical combined balance sheet of Meredith LMG, as if the Meredith Transactions and the divestiture of WJRT had occurred as of September 30, 2021. The accompanying unaudited pro forma combined financial information has been prepared using, and should be read in conjunction with, the unaudited interim consolidated financial statements of Gray for the nine month period ended September 30, 2021, the audited consolidated financial statements of Gray for the year ended December 31, 2020, the unaudited condensed combined financial statements of Meredith LMG for the three month period ended September 30, 2021 and six month periods ended June 30, 2020 and 2019 and the audited combined financial statements of Meredith LMG for their fiscal years ended June 30, 2021 and 2020.

The accompanying unaudited pro forma combined financial information is presented for illustrative purposes only and does not reflect the costs of any integration activities or benefits that may result from realization of future costs savings due to operating efficiencies or revenue synergies expected to result from the Meredith Merger.

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The unaudited pro forma combined financial information was prepared using the acquisition method of accounting with Gray considered the acquirer of Meredith LMG. The following adjustments are reflected:

(a) Upon consummation of the Meredith Merger, Meredith LMG’s accounting policies will be conformed to those of Gray. Gray has identified preliminary adjustments to Meredith LMG’s accounting policies to those of Gray based upon currently available information and assumptions management believes to be reasonable. Financial information presented in the “Meredith LMG Historical” column in the unaudited pro forma combined statements of operations for nine month period ended September 30, 2021 and the year ended December 31, 2020, has been reclassified to conform to that of Gray as indicated in the table below (in millions):

|  | Presentation in Unaudited Pro Forma Condensed Combined Financial Statements |  | Nine Month Period Ended September 30, 2021 |
Presentation in Meredith LMG Historical Financial Statements |  | Meredith LMG Historical |  |  |  |  | Reclassifications |  |  |  |  | Unaudited Pro Forma |
- |  | Broadcasting revenue (less agency commissions) |  | $ | — |  |  |  |  | $ | 548 |  |  | 2 |  | $ | 548 |
Advertising related revenues |  | - |  |  | 246 |  |  | 1 |  |  | (246 | ) |  | 2 |  |  | — |
Retransmission revenues |  | - |  |  | 290 |  |  | 1 |  |  | (290 | ) |  | 2 |  |  | — |
Other revenues |  | - |  |  | 12 |  |  | 1 |  |  | (12 | ) |  | 2 |  |  | — |
- |  | Broadcasting operating expenses |  |  | — |  |  |  |  |  | 379 |  |  | 3 |  |  | 379 |
Production, distribution, and editorial expenses |  | - |  |  | 277 |  |  | 1 |  |  | (277 | ) |  | 3 |  |  | — |
Selling, general, and administrative expenses |  | - |  |  | 121 |  |  | 1 |  |  | (121 | ) |  | 3 |  |  | — |
- |  | Corporate and administrative expenses |  |  | — |  |  |  |  |  | 19 |  |  | 3 |  |  | 19 |
Restructuring related activities expenses |  | Restructuring related activities |  |  | 2 |  |  | 1 |  |  | — |  |  |  |  |  | 2 |
- |  | Depreciation |  |  | — |  |  |  |  |  | 16 |  |  | 4 |  |  | 16 |
- |  | Amortization of intangible assets |  |  | — |  |  |  |  |  | 5 |  |  | 4 |  |  | 5 |
Depreciation and amortization |  | - |  |  | 21 |  |  | 1 |  |  | (21 | ) |  | 4 |  |  | — |
- |  | Miscellaneous (expense) income, net |  |  | — |  |  |  |  |  | 1 |  |  | 5 |  |  | 1 |
Non-operating income, net |  | - |  |  | 1 |  |  | 1 |  |  | (1 | ) |  | 5 |  |  | — |
|  | Presentation in Unaudited Pro Forma Condensed Combined Financial Statements |  | Year Ended December 31, 2020 |
Presentation in Meredith LMG Historical Financial Statements |  | Meredith LMG Historical |  |  |  |  | Reclassifications |  |  |  |  | Unaudited Pro Forma |
- |  | Broadcasting revenue (less agency commissions) |  | $ | — |  |  |  |  | $ | 839 |  |  | 2 |  | $ | 839 |
Advertising related revenues |  | - |  |  | 458 |  |  | 1 |  |  | (458 | ) |  | 2 |  |  | — |
Retransmission revenues |  | - |  |  | 367 |  |  | 1 |  |  | (367 | ) |  | 2 |  |  | — |
Other revenues |  | - |  |  | 14 |  |  | 1 |  |  | (14 | ) |  | 2 |  |  | — |
- |  | Broadcasting operating expenses |  |  | — |  |  |  |  |  | 500 |  |  | 3 |  |  | 500 |
Production, distribution, and editorial expenses |  | - |  |  | 352 |  |  | 1 |  |  | (352 | ) |  | 3 |  |  | — |
Selling, general, and administrative expenses |  | - |  |  | 170 |  |  | 1 |  |  | (170 | ) |  | 3 |  |  | — |
- |  | Corporate and administrative expenses |  |  | — |  |  |  |  |  | 23 |  |  | 3 |  |  | 23 |
Restructuring related activities expenses |  | Restructuring related activities |  |  | 7 |  |  | 1 |  |  | — |  |  |  |  |  | 7 |
- |  | Depreciation |  |  | — |  |  |  |  |  | 24 |  |  | 4 |  |  | 24 |
- |  | Amortization of intangible assets |  |  | — |  |  |  |  |  | 9 |  |  | 4 |  |  | 9 |
Depreciation and amortization |  | - |  |  | 33 |  |  | 1 |  |  | (33 | ) |  | 4 |  |  | — |
Impairment of long-lived assets |  | - |  |  | 22 |  |  | 1 |  |  | — |  |  |  |  |  | 22 |
- |  | (Gain) loss on disposal of assets, net |  |  | — |  |  |  |  |  | (1 | ) |  | 3 |  |  | (1 | )
- |  | Miscellaneous (expense) income, net |  |  | — |  |  |  |  |  | (2 | ) |  | 5 |  |  | (2 | )
Non-operating expense, net |  | - |  |  | (2 | ) |  | 1 |  |  | 2 |  |  | 5 |  |  | — |

1 - | For the nine month period ended September 30, 2021, amounts have been prepared by summing the results of operations as reported in the unaudited interim condensed combined financial statements of Meredith LMG for the three month period ended September 30, 2021, and the audited combined financial statements of Meredith LMG for their fiscal year ended June 30, 2021 less the results of operations as reported in the unaudited interim condensed combined financial statements of Meredith LMG for the six month period ended December 31, 2020. For the year ended December 31, 2020, amounts have been prepared by summing the results of operations as reported in the unaudited interim condensed combined financial statements of Meredith LMG for the six month period ended December 30, 2020, and the

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| audited combined financial statements of Meredith LMG for the fiscal year ended June 30, 2020 less the results of operations as reported in the unaudited interim condensed combined financial statements of Meredith LMG for the six month period ended December 31, 2019. Immaterial differences exist due to rounding between the amounts derived from the Meredith LMG financial statements and the amounts presented herein for Meredith LMG.

2 - | In order to conform with the treatment of revenue for Gray’s financial reporting, amounts classified as Advertising related revenues, Retransmission revenues and Other revenues have been reclassified out of those respective line items into Broadcast revenue (less agency commissions).

3 - | In order to conform with the treatment of expense for Gray’s financial reporting, amounts classified as Production, distribution, and editorial expenses and Selling, general, and administrative expenses have been reclassified out of those respective line items into Broadcast operating expenses, Corporate and administrative expenses and (Gain) loss on disposal of assets, net.

4 - | In order to conform with the treatment of expense for Gray’s financial reporting, amounts classified as Depreciation and amortization have been reclassified out of those respective line items into Depreciation and amortization of intangible assets.

5 - | In order to conform with the treatment of expense for Gray’s financial reporting, amounts classified as Non-operating expense, net have been reclassified out of that line item into Miscellaneous (expense) income, net.

Management of Gray is currently in the process of conducting a more detailed review of Meredith LMG’s accounting policies to determine if differences in accounting policies require any further reclassification of Meredith LMG’s financials to conform to Gray’s accounting policies and classifications. As a result, Gray may identify additional differences between the accounting policies of the two companies that, when conformed, could have a material impact on these unaudited pro forma combined financial statements.

(b) The following tables reflect certain adjustments necessary to present the combined results of operations of Gray, the Meredith Merger and the divestiture of WJRT on a pro forma basis (in millions):

|  | Nine Month Period Ended September 30, 2021 |
|  | Meredith LMG Corporate Expense Allocation (1) |  |  | Meredith LMG Restructuring Fee (2) |  |  | Interest Adj. (3) |  |  | Depreciation Amortization Adjustments (4) |  |  | Reverse Gray Transaction Costs (5) |  |  | WJRT (6) |  |  | Pro Forma Adjustment |
Broadcasting revenue (less agency commisions) |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (19 | ) |  | $ | (19 | )
Broadcasting operating expenses |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (13 | ) |  |  | (13 | )
Corporate and administrative expenses |  |  | (19 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (8 | ) |  |  | — |  |  |  | (27 | )
Restructuring related activities |  |  | — |  |  |  | (2 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (2 | )
Depreciation |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (2 | ) |  |  | — |  |  |  | — |  |  |  | (2 | )
Amortization of intangible assets |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 195 |  |  |  | — |  |  |  | — |  |  |  | 195 |
(Gain) loss on disposal of assets, net |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (5 | ) |  |  | (5 | )
Interest expense |  |  | — |  |  |  | — |  |  |  | (93 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (93 | )
Income tax expense (benefit) |  |  | 5 |  |  |  | 1 |  |  |  | (24 | ) |  |  | (49 | ) |  |  | 2 |  |  |  | — |  |  |  | (65 | )
|  | Year Ended December 31, 2020 |
|  | Meredith LMG Corporate Expense Allocation (1) |  |  | Meredith LMG Restructuring Fee (2) |  |  | Interest Adj. (3) |  |  | Depreciation Amortization Adjustments (4) |  |  | Reverse Gray Transaction Costs (5) |  |  | WJRT (6) |  |  | Pro Forma Adjustment |
Broadcasting revenue (less agency commisions) |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (27 | ) |  | $ | (27 | )
Broadcasting operating expenses |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (16 | ) |  |  | (16 | )
Corporate and administrative expenses |  |  | (23 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (23 | )
Restructuring related activities |  |  | — |  |  |  | (7 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (7 | )
Depreciation |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (10 | ) |  |  | — |  |  |  | (1 | ) |  |  | (11 | )
Amortization of intangible assets |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 191 |  |  |  | — |  |  |  | — |  |  |  | 191 |
Interest expense |  |  | — |  |  |  | — |  |  |  | (124 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (124 | )
Income tax expense (benefit) |  |  | 6 |  |  |  | 2 |  |  |  | (31 | ) |  |  | (46 | ) |  |  | — |  |  |  | — |  |  |  | (69 | )

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(1) | Adjustments to reflect the elimination of corporate expenses of Meredith LMG’s parent that were allocated to Meredith LMG.

(2) | Adjustments to reflect the elimination of restructuring expenses of Meredith LMG.

(3) | Adjustments to reflect the inclusion of incremental interest expense resulting from the borrowings incurred to finance the Meredith Merger.

(4) | Adjustments to reflect the inclusion of incremental depreciation and amortization expense resulting from the acquisition of certain assets of Meredith LMG that are to be recorded at fair value and subject to depreciation or amortization.

(5) | Adjustments to reflect the elimination of transaction expenses incurred by Gray in connection with the Meredith Merger.

(6) | Adjustments to reflect the elimination of the results of operations of WJRT in the Flint-Saginaw, Michigan market which was sold on September 23, 2021 in connection with the Meredith Merger.

(c) The following information presented in the “Meredith LMG” column in the unaudited pro forma combined balance sheet as of September 30, 2021 has been reclassified to conform to that of Gray as indicated in the table below (in millions):

Presentation in Meredith LMG Historical Financial Statements |  | Presentation in Unaudited Pro Forma Condensed Combined Financial Statements |  | As of September 30, 2021 |
| Meredith LMG Historical |  |  | Reclassifications |  |  |  |  | Unaudited Pro Forma |
Accounts receivable (net of allowance of $3) |  | Accounts receivable, net |  | $ | 135 |  |  | $ | — |  |  |  |  | $ | 135 |
Current portion of broadcast rights |  | Current portion of program broadcast rights, net |  |  | 16 |  |  |  | — |  |  |  |  |  | 16 |
Other current assets |  | Prepaid and other current assets |  |  | 1 |  |  |  | — |  |  |  |  |  | 1 |
Net property, plant and equipment |  | Property and equipment, net |  |  | 114 |  |  |  | — |  |  |  |  |  | 114 |
Broadcast rights |  | Broadcast rights |  |  | 4 |  |  |  | (4 | ) |  | 1 |  |  | — |
Operating lease assets |  | Operating leases right of use asset |  |  | 20 |  |  |  | — |  |  |  |  |  | 20 |
- |  | Broadcast licenses |  |  | — |  |  |  | 653 |  |  | 2 |  |  | 653 |
Goodwill |  | Goodwill |  |  | 112 |  |  |  | — |  |  |  |  |  | 112 |
Intangible assets, net |  | Other intangible assets, net |  |  | 717 |  |  |  | (653 | ) |  | 2 |  |  | 64 |
Other assets |  | Other |  |  | 6 |  |  |  | 4 |  |  | 1 |  |  | 10 |
Accounts payable |  | Accounts payable |  |  | 27 |  |  |  | — |  |  |  |  |  | 27 |
Accrued expenses - other taxes and expenses |  | Other accrued expenses |  |  | 45 |  |  |  | — |  |  |  |  |  | 45 |
Current portion of long-term broadcast payable |  | Current portion of program broadcast obligations |  |  | 17 |  |  |  | — |  |  |  |  |  | 17 |
Unearned revenues |  | Deferred revenue |  |  | 5 |  |  |  | — |  |  |  |  |  | 5 |
Current portion of operating lease liabilities |  | Current portion of operating lease liabilities |  |  | 2 |  |  |  | — |  |  |  |  |  | 2 |
Long-term broadcast rights payable |  | Program broadcast obligations, less current portion |  |  | 6 |  |  |  | — |  |  |  |  |  | 6 |
Deferred income taxes |  | Deferred income taxes |  |  | 126 |  |  |  | — |  |  |  |  |  | 126 |
Operating lease liabilities |  | Operating lease liabilities, less current portion |  |  | 18 |  |  |  | — |  |  |  |  |  | 18 |
Other noncurrent liabilities |  | Other |  |  | 6 |  |  |  | — |  |  |  |  |  | 6 |

1 - | In order to conform with the treatment of the balance sheet for Gray’s financial reporting, amount classified as Broadcast rights have been reclassified out of that line item into Other asset.

2 - | In order to conform with the treatment of balance sheet for Gray’s financial reporting, amount classified as Intangible assets, net have been reclassified out of that line item into Broadcast licenses.

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(d) The following table reflects certain adjustments necessary to present the combined results of operations of Gray, the Meredith Merger and the divestiture of WJRT on a pro forma basis (in millions):

|  | As of September 30, 2021 |
|  | Meredith LMG Acquisition |  |  |  |  | Financing |  |  |  |  | Pro Forma Combined |
Cash |  | $ | (2,800 | ) |  | 1 |  | $ | 2,712 |  |  | 5 |  | $ | (88 | )
Prepaid income taxes |  |  | — |  |  |  |  |  | 7 |  |  | 5 |  |  | 7 |
Property and equipment, net |  |  | 51 |  |  | 2 |  |  | — |  |  |  |  |  | 51 |
Broadcast licenses |  |  | 497 |  |  | 2 |  |  | — |  |  |  |  |  | 497 |
Goodwill |  |  | 820 |  |  | 2 |  |  | — |  |  |  |  |  | 820 |
Other intangible assets, net |  |  | 936 |  |  | 2 |  |  | — |  |  |  |  |  | 936 |
Current portion of long-term debt |  |  | — |  |  |  |  |  | 15 |  |  | 5 |  |  | 15 |
Long-term debt, less current portion and deferred loan costs |  |  | — |  |  |  |  |  | 2,722 |  |  | 5 |  |  | 2,722 |
Deferred income taxes |  |  | 377 |  |  | 3 |  |  | — |  |  |  |  |  | 377 |
Stockholders’ equity |  |  | (873 | ) |  | 4 |  |  | (18 | ) |  | 5 |  |  | (891 | )

1 - | Adjustment to reflect a reduction in cash equal to the purchase price of Meredith LMG of $2.8 billion.

2 - | Adjustments to reflect the value of Property and equipment, net, Broadcast licenses, Goodwill and Other intangible assets, net at preliminary estimated acquisition date fair values as follows (in millions):

|  | As of September 30, 2021 |
|  | Meredith LMG Historical |  |  | Preliminary Estimated Fair Value at Acquisition Date |
Property and equipment, net |  | $ | 114 |  |  | $ | 165 |
Broadcast licenses |  |  | 653 |  |  |  | 1,150 |
Goodwill |  |  | 112 |  |  |  | 932 |
Other intangible assets, net |  |  | 64 |  |  |  | 1,000 |

The estimated fair values of these assets are based on the preliminary valuations performed for the preparation of the pro forma combined financial information and are subject to the final valuations that will be completed after the consummation of the Meredith Merger.

3 - | Adjustment to reflect estimated deferred income tax liability equal to the difference between the estimated fair values of all assets except for Goodwill and their tax basis multiplied by a blended federal and state statutory income tax rate of 25.4%.

4 - | Adjustment to reflect the elimination of Meredith LMG’s stockholders’ equity as part of recording the Meredith Merger.

5 - | Adjustment reflects the financing of the Meredith Merger as follows: (a) cash is adjusted for anticipated borrowings of $2.8 billion net of estimated fees of approximately $88 million, (b) Prepaid income taxes are adjusted for taxes associated the expensing of certain acquisition fees, (c) Current portion of long-term debt is adjusted for the current portion of anticipated borrowings and (d) Long-term debt, less current portion and deferred loan costs are adjusted for anticipated borrowings of $2.8 billion less $63 million of deferred loan costs less current portion of $15 million.

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