Throughout 2010 corporate CEOs and CFOs proudly pointed out in their quarterly conference calls that their companies had been using free cash flow to reduce debt. Gray Television is so proud that it has issued a tally of its debt reduction in 2010.
Gray announced that during the year ended December 31, 2010 it used cash from operations to make a total of $50.2 million in payments on its outstanding debt balances.
The year-end audit is still preliminary, but Gray said Thursday (1/6) that its outstanding indebtedness at the end of 2010 was approximately $467.8 million of amounts outstanding under its senior secured credit facility and $358.9 million of amounts outstanding under its 10.5% senior secured second lien notes (excluding approximately $6.1 million of unamortized original issue discount).
RBR-TVBR observation: Reducing leverage has been a key concern of broadcasters the past couple of years. When there was lots of money available to lend on media properties because ad revenues and broadcast cash flow were growing every year it was tempting to borrow in the belief that leverage covenants would take care of themselves because of that growth. The recession brought that thinking to an abrupt halt and broadcasters have been working hard to reduce leverage by actually paying down loan balances.
