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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

(Mark one)

☒   Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2024 or

 

☐   Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _________ to _________ .

 

Commission file number 1-13796

 

Gray Television, Inc.

(Exact name of registrant as specified in its charter)

 

Georgia

 

58-0285030

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification Number)

   

4370 Peachtree Road, NE, Atlanta, Georgia

 

30319

(Address of principal executive offices)

 

(Zip code)

 

(404) 504-9828

(Registrant's telephone number, including area code)

 

Not Applicable

(Former name, former address and former fiscal year, if changed since last report.)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each ClassTrading Symbol(s)Name of each exchange on which registered
Class A common stock (no par value)GTN.ANew York Stock Exchange
common stock (no par value)GTNNew York Stock Exchange

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

 Large accelerated filer ☒Accelerated filer ☐ 
 Non-accelerated filer ☐Smaller reporting company ☐ 
 Emerging growth company ☐  

                                                         

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

 

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Common Stock (No Par Value)

 

Class A Common Stock (No Par Value)

90,824,445 shares outstanding as of November 4, 2024

 

8,842,764 shares outstanding as of November 4, 2024

 

 
 
 
 

INDEX

 

GRAY TELEVISION, INC.

 

 

PART I.

FINANCIAL INFORMATION

PAGE
     

Item 1.

Financial Statements

  
     
 

Condensed consolidated balance sheets (Unaudited) - September 30, 2024 and December 31, 2023

3
     
 

Condensed consolidated statements of operations (Unaudited) - three-months and nine-months ended September 30, 2024 and 2023

5
     
 

Condensed consolidated statements of comprehensive income (loss) (Unaudited) – three-months and nine-months ended September 30, 2024 and 2023

6
     
 

Condensed consolidated statements of stockholders' equity (Unaudited) – three-month periods ended March 31, June 30, and September 30, 2024 and 2023

7
     
 

Condensed consolidated statements of cash flows (Unaudited) - nine-months ended September 30, 2024 and 2023

9
     
 

Notes to condensed consolidated financial statements (Unaudited)

10
     

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

26
     

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

35
     

Item 4.

Controls and Procedures

35
     

PART II.

OTHER INFORMATION

  
     
Item 1. Legal Proceedings 35
     

Item 1A.

Risk Factors

35
     

Item 5.

Other Information

36
     

Item 6.

Exhibits

36
     

SIGNATURES

  

37

 

2
 

 

PART I.

FINANCIAL INFORMATION

 

Item 1.

Financial Statements

 

 

GRAY TELEVISION, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(in millions)

 

  

September 30,

  

December 31,

 
  

2024

  

2023

 

Assets:

        

Current assets:

        

Cash

 $69  $21 

Accounts receivable, less allowance for credit losses of $15 and $17, respectively

  358   342 

Current portion of program broadcast rights, net

  25   18 

Income tax refund receivable

  6   21 

Prepaid income taxes

  67   18 

Prepaid and other current assets

  51   48 

Total current assets

  576   468 
         

Property and equipment, net

  1,583   1,601 

Operating leases right of use asset

  69   75 

Broadcast licenses

  5,311   5,320 

Goodwill

  2,642   2,643 

Other intangible assets, net

  321   415 

Investments in broadcasting and technology companies

  86   85 

Deferred pension assets

  20   17 

Other

  23   16 

Total assets

 $10,631  $10,640 

 

See notes to condensed consolidated financial statements.

 

3
 

 

GRAY TELEVISION, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(in millions, except for share data)

 

  

September 30,

  

December 31,

 
  

2024

  

2023

 

Liabilities and stockholders’ equity:

        

Current liabilities:

        

Accounts payable

 $17  $23 

Employee compensation and benefits

  96   110 

Accrued interest

  120   63 

Accrued network programming fees

  80   37 

Other accrued expenses

  63   57 

Federal and state income taxes

  9   22 

Current portion of program broadcast obligations

  25   20 

Deferred revenue

  50   23 

Dividends payable

  15   14 

Current portion of operating lease liabilities

  10   11 

Current portion of long-term debt

  23   15 

Total current liabilities

  508   395 
         

Long-term debt, less current portion and deferred financing costs

  5,870   6,145 

Program broadcast obligations, less current portion

  1   1 

Deferred income taxes

  1,344   1,359 

Operating lease liabilities, less current portion

  62   69 

Other

  66   50 

Total liabilities

  7,851   8,019 
         

Commitments and contingencies (Note 10)

          
         

Series A Perpetual Preferred Stock, no par value; cumulative; redeemable; designated 1,500,000 shares, issued and outstanding 650,000 shares, at each date and $650 aggregate liquidation value, at each date

  650   650 
         

Stockholders’ equity:

        

Common stock, no par value; authorized 200,000,000 shares, issued 111,166,022 shares and 107,179,827 shares, respectively outstanding 90,824,445 shares and 87,227,481 shares, respectively

  1,195   1,174 

Class A common stock, no par value; authorized 25,000,000 shares, issued 11,237,386 shares and 10,413,993 shares, respectively outstanding 8,842,764 shares and 8,162,266 shares, respectively

  55   50 

Retained earnings

  1,227   1,084 

Accumulated other comprehensive loss, net of income tax benefit

  (30)  (23)
   2,447   2,285 

Treasury stock at cost, common stock, 20,341,577 shares and 19,952,346 shares, respectively

  (284)  (282)

Treasury stock at cost, class A common stock, 2,394,622 shares and 2,251,727 shares, respectively

  (33)  (32)

Total stockholders’ equity

  2,130   1,971 

Total liabilities and stockholders’ equity

 $10,631  $10,640 

 

See notes to condensed consolidated financial statements.

 

4
 

 

 

GRAY TELEVISION, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(in millions, except for per share data)

 

   

Three Months Ended

    

Nine Months Ended

  
   

September 30,

    

September 30,

  
   

2024

    

2023

    

2024

    

2023

  
                                 

Revenue (less agency commissions):

                                

Broadcasting

   $ 924     $ 783     $ 2,531     $ 2,363  

Production companies

     26       20       68       54  

Total revenue (less agency commissions)

     950       803       2,599       2,417  

Operating expenses before depreciation, amortization, impairment and loss (gain) on disposal of assets, net:

                                

Broadcasting

     571       557       1,719       1,664  

Production companies

     22       18       57       88  

Corporate and administrative

     24       23       80       79  

Depreciation

     36       36       108       106  

Amortization of intangible assets

     31       48       94       147  

Impairment of goodwill and other intangible assets

     -       43       -       43  

Loss (gain) on disposal of assets, net

     16       (6 )     15       20  

Operating expenses

     700       719       2,073       2,147  

Operating income

     250       84       526       270  

Other income (expense):

                                

Miscellaneous income (expense), net

     2       (10 )     114       (13 )

Interest expense

     (130 )     (111 )     (363 )     (324 )

Gain (loss) from early extinguishment of debt

     6       -       (1 )     (3 )

Income (loss) before income taxes

     128       (37 )     276       (70 )

Income tax expense (benefit)

     32       3       70       (3 )

Net income (loss)

     96       (40 )     206       (67 )

Preferred stock dividends

     13       13       39       39  

Net income (loss) attributable to common stockholders

   $ 83     $ (53 )   $ 167     $ (106 )
                                 

Basic per share information:

                                

Net income (loss) attributable to common stockholders

   $ 0.87     $ (0.57 )   $ 1.76     $ (1.15 )

Weighted-average shares outstanding

     95       93       95       92  
                                 

Diluted per share information:

                                

Net income (loss) attributable to common stockholders

   $ 0.86     $ (0.57 )   $ 1.74     $ (1.15 )

Weighted-average shares outstanding

     97       93       96       92  
                      .          

Dividends declared per common share

   $ 0.08     $ 0.08     $ 0.24     $ 0.24  

 

See notes to condensed consolidated financial statements.

 

5
 

 

 

GRAY TELEVISION, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

(in millions)

 

   

Three Months Ended

    

Nine Months Ended

  
   

September 30,

    

September 30,

  
   

2024

    

2023

    

2024

    

2023

  
                                 

Net income (loss)

   $ 96     $ (40 )   $ 206     $ (67 )
                                 

Other comprehensive loss:

                                

Adjustment - fair value of interest rate caps

     (6 )     (3 )     (9 )     (7 )

Income tax benefit

     (1 )     (1 )     (2 )     (2 )

Other comprehensive loss, net

     (5 )     (2 )     (7 )     (5 )
                                 

Comprehensive income (loss)

   $ 91     $ (42 )   $ 199     $ (72 )

 

See notes to condensed consolidated financial statements.

 

6
 

 

 

GRAY TELEVISION, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited)

(in millions, except for number of shares)

 

                                                                     

Accumulated

        
 

Class A

                        

Class A

    

Common

    

Other

        
 

Common Stock

  

Common Stock

  

Retained

    

Treasury Stock

    

Treasury Stock

    

Comprehensive

        
 

Shares

    

Amount

  

Shares

    

Amount

  

Earnings

    

Shares

    

Amount

    

Shares

    

Amount

    

Loss

  

Total

  
                                                                                 

Balance at December 31, 2022

   9,675,139     $ 45     105,104,057     $ 1,150   $ 1,242       (2,130,724 )   $ (31 )     (19,636,786 )   $ (278 )   $ (12 ) $ 2,116  
                                                                                 

Net loss

   -       -     -       -     (31 )     -       -       -       -       -     (31 )
                                                                                 

Preferred stock dividends

   -       -     -       -     (13 )     -       -       -       -       -     (13 )
                                                                                 

Common stock dividends

   -       -     -       -     (7 )     -       -       -       -       -     (7 )
                                                                                 

Adjustment to fair value of interest rate cap, net of tax

   -       -     -       -     -       -       -       -       -       (11 )   (11 )
                                                                                 

Issuance of common stock:

                                                                                

401(k) Plan

   -       -     819,898       9     -       -       -       -       -       -     9  

2017 Equity and Incentive Compensation Plan:

                                                                                

Restricted stock awards

   25,022       -     12,227       -     -       (92,196 )     (1 )     (129,636 )     (2 )     -     (3 )

Restricted stock unit awards

   -       -     247,953       -     -       -       -       (80,622 )     (1 )     -     (1 )
                                                                                 

Stock-based compensation

   -       -     -       2     -       -       -       -       -       -     2  
                                                                                 

Balance at March 31, 2023

   9,700,161     $ 45     106,184,135     $ 1,161   $ 1,191       (2,222,920 )   $ (32 )     (19,847,044 )   $ (281 )   $ (23 ) $ 2,061  
                                                                                 

Net income

   -       -     -       -     4       -       -       -       -       -     4  
                                                                                 

Preferred stock dividends

   -       -     -       -     (13 )     -       -       -       -       -     (13 )
                                                                                 

Common stock dividends

   -       -     -       -     (7 )     -       -       -       -       -     (7 )
                                                                                 

Adjustment to fair value of interest rate cap, net of tax

   -       -     -       -     -       -       -       -       -       8     8  
                                                                                 

Issuance of common stock:

                                                                                

2017 Equity and Incentive Compensation Plan:

                                                                                

Restricted stock awards

   713,832       -     995,692       -     -       -       -       (69,028 )     -       -     -  
                                                                                 

Stock-based compensation

   -       -     -       7     -       -       -       -       -       -     7  
                                                                                 

Balance at June 30, 2023

   10,413,993     $ 45     107,179,827     $ 1,168   $ 1,175       (2,222,920 )   $ (32 )     (19,916,072 )   $ (281 )   $ (15 ) $ 2,060  
                                                                                 

Net loss

   -       -     -       -     (40 )     -       -       -       -       -     (40 )
                                                                                 

Preferred stock dividends

   -       -     -       -     (13 )     -       -       -       -       -     (13 )
                                                                                 

Common stock dividends

   -       -     -       -     (8 )     -       -       -       -       -     (8 )
                                                                                 

Adjustment to fair value of interest rate cap, net of tax

   -       -     -       -     -       -       -       -       -       (2 )   (2 )
                                                                                 

Stock-based compensation

   -       1     -       4     -       -       -       -       -       -     5  
                                                                                 

Balance at September 30, 2023

   10,413,993     $ 46     107,179,827     $ 1,172   $ 1,114       (2,222,920 )   $ (32 )     (19,916,072 )   $ (281 )   $ (17 ) $ 2,002  

 

See notes to condensed consolidated financial statements.

 

7
 

 

GRAY TELEVISION, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited)

(in millions, except for number of shares)

 

                                                               

Accumulated

        
 

Class A

                      

Class A

  

Common

  

Other

        
 

Common Stock

  

Common Stock

  

Retained

  

Treasury Stock

  

Treasury Stock

  

Comprehensive

        
 

Shares

    

Amount

  

Shares

    

Amount

  

Earnings

  

Shares

    

Amount

  

Shares

    

Amount

  

Loss

  

Total

  
                                                                           

Balance at December 31, 2023

   10,413,993     $ 50     107,179,827     $ 1,174   $ 1,084     (2,251,727 )   $ (32 )   (19,952,346 )   $ (282 ) $ (23 ) $ 1,971  
                                                                           

Net income

   -       -     -       -     88     -       -     -       -     -     88  
                                                                           

Preferred stock dividends

   -       -     -       -     (13 )   -       -     -       -     -     (13 )
                                                                           

Common stock dividends

   -       -     -       -     (8 )   -       -     -       -     -     (8 )
                                                                           

Issuance of common stock:

                                                                          

401(k) Plan

   -       -     1,765,444       9     -     -       -     -       -     -     9  

2022 Equity and Incentive Compensation Plan:

                                                                          

Restricted stock awards

   823,393       -     1,126,296       -     -     (142,895 )     (1 )   (146,470 )     (1 )   -     (2 )

Restricted stock unit awards

   -       -     564,793       -     -     -       -     (188,400 )     (1 )   -     (1 )
                                                                           

Stock-based compensation

   -       2     -       4     -     -       -     -       -     -     6  
                                                                           

Balance at March 31, 2024

   11,237,386     $ 52     110,636,360     $ 1,187   $ 1,151     (2,394,622 )   $ (33 )   (20,287,216 )   $ (284 ) $ (23 ) $ 2,050  
                                                                           

Net income

   -       -     -       -     22     -       -     -       -     -     22  
                                                                           

Preferred stock dividends

   -       -     -       -     (13 )   -       -     -       -     -     (13 )
                                                                           

Common stock dividends

   -       -     -       -     (8 )   -       -     -       -     -     (8 )
                                                                           

Adjustment to fair value of interest rate cap, net of tax

   -       -     -       -     -     -       -     -       -     (2 )   (2 )
                                                                           

Issuance of common stock:

                                                                          

2022 Equity and Incentive Compensation Plan:

                                                                          

Restricted stock awards

   -       -     529,662       -     -     -       -     (54,361 )     -     -     -  
                                                                           

Stock-based compensation

   -       2     -       4     -     -       -     -       -     -     6  
                                                                           

Balance at June 30, 2024

   11,237,386     $ 54     111,166,022     $ 1,191   $ 1,152     (2,394,622 )   $ (33 )   (20,341,577 )   $ (284 ) $ (25 ) $ 2,055  
                                                                           

Net income

   -       -     -       -     96     -       -     -       -     -     96  
                                                                           

Preferred stock dividends

   -       -     -       -     (13 )   -       -     -       -     -     (13 )
                                                                           

Common stock dividends

   -       -     -       -     (8 )   -       -     -       -     -     (8 )
                                                                           

Adjustment to fair value of interest rate cap, net of tax

   -       -     -       -     -     -       -     -       -     (5 )   (5 )
                                                                           

Stock-based compensation

   -       1     -       4     -     -       -     -       -     -     5  
                                                                           

Balance at September 30, 2024

   11,237,386     $ 55     111,166,022     $ 1,195   $ 1,227     (2,394,622 )   $ (33 )   (20,341,577 )   $ (284 ) $ (30 ) $ 2,130  

 

See notes to condensed consolidated financial statements.

 

8
 

 

 

GRAY TELEVISION, INC. 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) 

(in millions) 

 

   

Nine Months Ended

  
   

September 30,

  
   

2024

   

2023

 

Operating activities:

                

Net income (loss)

   $ 206     $ (67 )

Adjustments to reconcile net income (loss) to net cash provided by

                

Operating activities:

                

Depreciation

     108       106  

Amortization of intangible assets

     94       147  

Amortization of deferred loan costs

     11       10  

Amortization of stock-based compensation

     17       14  

Amortization of program broadcast rights

     20       29  

Payments on program broadcast obligations

     (22 )     (30 )

Deferred income taxes

     (12 )     (57 )

Loss on disposal of assets, net

     15       20  

Gain on sale of investment

     (110 )     -  

Loss from early extinguishment of debt

     1       3  

Impairment of investments

     -       8  

Impairment of goodwill and other intangible assets

     -       43  

Other

     (2 )     11  

Changes in operating assets and liabilities:

                

Accounts receivable, net

     (15 )     311  

Income taxes receivable or prepaid

     (34 )     9  

Other current assets

     (2 )     3  

Accounts payable

     (6 )     (29 )

Employee compensation, benefits and pension cost

     (14 )     (16 )

Accrued network fees and other expenses

     57       9  

Accrued interest

     56       32  

Income taxes payable

     (13 )     (2 )

Deferred revenue

     28       11  

Net cash provided by operating activities

     383       565  
                 

Investing activities:

                

Acquisitions of businesses and broadcast licenses, net of cash acquired

     -       (7 )

Proceeds from sale of television stations

     -       6  

Purchases of property and equipment

     (103 )     (288 )

Proceeds from asset sales

     8       31  

Proceeds from sale of investment

     110       -  

Reimbursement of development costs

     -       11  

Investments in broadcast, production and technology companies

     (4 )     (11 )

Other

     (1 )     (1 )

Net cash provided by (used in) investing activities

     10       (259 )
                 

Financing activities:

                

Proceeds from borrowings on long-term debt

     2,025       225  

Repayments of borrowings on long-term debt

     (2,257 )     (506 )

Payments of common stock dividends

     (24 )     (22 )

Payments of preferred stock dividends

     (39 )     (39 )

Deferred and other loan costs

     (47 )     -  

Payments of taxes related to net share settlement of equity awards

     (3 )     (4 )

Net cash used in financing activities

     (345 )     (346 )

Net increase (decrease) in cash

     48       (40 )

Cash at beginning of period

     21       61  

Cash at end of period

   $ 69     $ 21  

 

See notes to condensed consolidated financial statements.

 

9
 

 

GRAY TELEVISION, INC.         

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

 

 

1.

Basis of Presentation

 

The accompanying condensed consolidated balance sheet of Gray Television, Inc. (and its consolidated subsidiaries, except as the context otherwise provides,“Gray,” the “Company,” “we,” “us,” and “our”) as of December 31, 2023, which was derived from the Company’s audited financial statements as of December 31, 2023, and our accompanying unaudited condensed consolidated financial statements as of September 30, 2024 and for the three and nine-month periods ended September 30, 2024 and 2023, have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to those rules and regulations, although we believe that the disclosures made are adequate to make the information not misleading. In our opinion, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. We manage our business on the basis of two operating segments: broadcasting and production companies. Unless otherwise indicated, all station rank, in-market share and television household data herein are derived from reports prepared by The Nielsen Company, LLC (“Nielsen”) and/or Comscore, Inc. (“Comscore”). While we believe this data to be accurate and reliable, we have not independently verified such data nor have we ascertained the underlying assumptions relied upon therein, and cannot guarantee the accuracy or completeness of such data. For further information, refer to the consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”). Our financial condition as of, and operating results for the three and nine-months ended September 30, 2024, are not necessarily indicative of the financial condition or results that may be expected for any future interim period or for the year ending December 31, 2024.

 

Overview. We are a multimedia company headquartered in Atlanta, Georgia. We are the nation’s largest owner of top-rated local television stations and digital assets serving 113 television markets that collectively reach approximately 36 percent of US television households. The portfolio includes 77 markets with the top-rated television station and 100 markets with the first and/or second highest rated television station, as well as the largest Telemundo Affiliate group with 43 markets totaling nearly 1.5 million Hispanic TV Households. We also own Gray Digital Media, a full-service digital agency offering national and local clients digital marketing strategies with the most advanced digital products and services. Our additional media properties include video production companies Raycom Sports, Tupelo Media Group, and PowerNation Studios, and studio production facilities Assembly Atlanta and Third Rail Studios. Gray also owns a majority interest in Swirl Films.

 

Investments in Broadcasting, Production and Technology Companies. We have investments in several television, production and technology companies. We account for all material investments in which we have significant influence over the investee under the equity method of accounting. Upon initial investment, we record equity method investments at cost. The amounts initially recognized are subsequently adjusted for our appropriate share of the net earnings or losses of the investee. We record any investee losses up to the carrying amount of the investment plus advances and loans made to the investee, and any financial guarantees made on behalf of the investee. We recognize our share in earnings and losses of the investee as miscellaneous income (expense), net in our condensed consolidated statements of operations. Investments are also increased by contributions made to and decreased by the distributions from the investee. We evaluate equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may be impaired.

 

Investments in non-public businesses that do not have readily determinable pricing, and for which we do not have control or do not exert significant influence, are carried at cost less impairments, if any, plus or minus changes in observable prices for those investments. Gains or losses resulting from changes in the carrying value of these investments are included as miscellaneous income (expense), net in our condensed consolidated statements of operations. These investments are reported together as a non-current asset on our consolidated balance sheets.

 

BMI Investment Proceeds. On February 8, 2024, we received $110 million from the sale of our investment in Broadcast Music, Inc. (“BMI”). These proceeds are included in miscellaneous income (expense), net, in our condensed consolidated statement of operations for the nine-month period ended September 30, 2024.

 

10
 
 

Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Our actual results could differ materially from these estimated amounts. Our most significant estimates are our allowance for credit losses in receivables, valuation of goodwill and intangible assets, amortization of program rights and intangible assets, pension costs, income taxes, employee medical insurance claims, useful lives of property and equipment and contingencies.

 

Earnings Per Share. We compute basic earnings per share by dividing net income available to common stockholders by the weighted-average number of common shares outstanding during the relevant period. The weighted-average number of common shares outstanding does not include restricted shares. These shares, although classified as issued and outstanding, are considered contingently returnable until the restrictions lapse and, in accordance with U.S. GAAP, are not included in the basic earnings per share calculation until the shares vest. Diluted earnings per share is computed by including all potentially dilutive common shares, including restricted shares, in the diluted weighted-average shares outstanding calculation, unless their inclusion would be antidilutive.

 

The following table reconciles basic weighted-average shares outstanding to diluted weighted-average shares outstanding for the three and nine-month periods ended September 30, 2024 and 2023, respectively (in millions):

 

  

Three Months Ended

  

Nine Months Ended

 
  

September 30,

  

September 30,

 
  

2024

  

2023

  

2024

  

2023

 
                 

Weighted-average shares outstanding-basic

  95   93   95   92 

Common stock equivalents for stock options and restricted stock

  2   -   1   - 

Weighted-average shares outstanding-diluted

  97   93   96   92 

 

Accumulated Other Comprehensive Loss. Our accumulated other comprehensive loss balances as of September 30, 2024 and December 31, 2023, consist of adjustments to our pension liability, the fair value of our interest rate caps and the related income tax effects. Our comprehensive income (loss) for the nine-month periods ended September 30, 2024 and 2023 consisted of the adjustment of the fair value of our pension asset and interest rate caps, net of tax, and net income. As of September 30, 2024 and December 31, 2023 the balances were as follows (in millions):

 

  

September 30,

  

December 31,

 
  

2024

  

2023

 
         

Accumulated balances of items included in accumulated other comprehensive loss:

        

Adjustment to pension asset

 $(7) $(7)

Adjustment to fair value of interest rate caps

  (32)  (23)

Income tax benefit

  (9)  (7)

Accumulated other comprehensive loss

 $(30) $(23)

 

11
 
 

Property and Equipment. Property and equipment are carried at cost, or in the case of acquired businesses, at fair value. Depreciation is computed principally by the straight-line method. The following table lists the components of property and equipment by major category (dollars in millions):

 

          

Estimated

 
  

September 30,

  

December 31,

  

Useful Lives

 
  

2024

  

2023

  

(in years)

 

Property and equipment, net:

            

Land

 $385  $368     

Buildings and improvements

  895   868  7to40 

Equipment

  1,077   1,082  3to20 

Construction in progress

  98   81     
   2,455   2,399     

Accumulated depreciation

  (872)  (798)    

Total property and equipment, net

 $1,583  $1,601     

 

Maintenance, repairs and minor replacements are charged to operations as incurred; major replacements and betterments are capitalized. The cost of any assets divested, sold or retired and the related accumulated depreciation are removed from the accounts at the time of disposition, and any resulting gain or loss is reflected in income or expense for the period.

 

We incurred costs to build public infrastructure within the Assembly Atlanta project. Pursuant to our Purchase and Sale Agreement with the Doraville Community Improvement District (the “CID”), we receive cash reimbursements for the transfer of specific infrastructure projects to the CID and for other construction costs previously incurred. During the three and nine-month periods ended September 30, 2024 and 2023, we received cash proceeds from the CID. The following table lists the type of proceeds received (in millions):

 

  

Three Months Ended

  

Nine Months Ended

 
  

September 30,

  

September 30,

 
  

2024

  

2023

  

2024

  

2023

 
                 
Proceeds received in advance of asset sale $-  $-  $-  $9 

Proceeds for reimbursement of development costs

  -   -   6   29 

Total proceeds received from CID

 $-  $-  $6  $38 

 

The following tables provide additional information related to (loss) gain on disposal of assets, net included in our condensed consolidated statements of operations and purchases of property and equipment included in our condensed consolidated statements of cash flows (in millions):

 

  

Three Months Ended

  

Nine Months Ended

 
  

September 30,

  

September 30,

 
  

2024

  

2023

  

2024

  

2023

 

(Loss) gain on disposal of assets, net:

                

Proceeds from sale of fixed assets

 $1  $9  $8  $31 

Net book value of assets disposed

  (2)  (26)  (8)  (51)

Non-cash (loss) gain on divestitures

  (15)  13   (15)  (1)

Securitization Facility

  -   8   -   - 

Other

  -   2   -   1 

Total

 $(16) $6  $(15) $(20)
                 

Purchase of property and equipment:

                

Recurring purchases - operations

       $64  $78 

Assembly Atlanta project

        39   210 

Total

       $103  $288 

 

Accounts Receivable and Allowance for Credit Losses. We record accounts receivable from sales and service transactions in our condensed consolidated balance sheets at amortized cost adjusted for any write-offs and net of allowance for credit losses. We are exposed to credit risk primarily through sales of broadcast and digital advertising with a variety of direct and agency-based advertising customers, retransmission consent agreements with multichannel video program distributors and program production sales and services.

 

12
 
 

Our allowance for credit losses is an estimate of expected losses over the remaining contractual life of our receivables based on an ongoing analysis of collectability, historical collection experience, current economic and industry conditions and reasonable and supportable forecasts. The allowance is calculated using a historical loss rate applied to the current aging analysis. We may also apply additional allowance when warranted by specific facts and circumstances. We generally write off accounts receivable balances when the customer files for bankruptcy or when all commonly used methods of collection have been exhausted.

 

On February 23, 2023, we, certain of our subsidiaries and a wholly-owned special purpose subsidiary (the “SPV”), entered into a three-year $300 million revolving accounts receivable securitization facility (the “Securitization Facility”) with Wells Fargo Bank, N.A., as administrative agent, and certain third-party financial institutions (the “Purchasers”). The Securitization Facility permits the SPV to draw up to a total of $300 million, subject to the outstanding amount of the receivables pool and other factors. The Securitization Facility matures on February 23, 2026, and is subject to customary termination events related to transactions of this type. The sale of receivables from the SPV is accounted for in the Company’s financial statements as a "true-sale" under Accounting Standards Codification ("ASC") Topic 860.

 

Under the Securitization Facility, the SPV sells to the Purchasers certain receivables, including all rights, title, and interest in the related receivables (“Sold Receivables”). The parties intend that the conveyance of accounts receivables to the Purchasers, for the ratable benefit of the Purchasers will constitute a purchase and sale of receivables and not a pledge for security. The SPV has guaranteed to each Purchaser the prompt payment of Sold Receivables, and to secure the prompt payment and performance of such guaranteed obligations, the SPV has granted a security interest to the Purchasers in all assets of the SPV. In our capacity as servicer under the Securitization Facility, we are responsible for administering and collecting receivables and have made customary representations, warranties, covenants and indemnities. We do not record a servicing asset or liability since the estimated fair value of the servicing of the receivables approximates the servicing income. We also provided a performance guarantee for the benefit of the Purchasers.

 

The Securitization Facility is subject to interest charges, at the adjusted one-month Secured Overnight Financing Rate (“SOFR”) plus a margin (100 basis points) on the amount of the outstanding facility. The SPV was required to pay an upfront fee and a commitment fee in connection with the Securitization Facility. Servicing fee income recognized during the nine-months ended September 30, 2024 and 2023, was $5 million and $3 million, respectively. The SPV is a separate legal entity with its own separate creditors who will be entitled to access the SPV’s assets before the assets become available to us. As a result, the SPV’s assets are not available to pay our creditors or any of our subsidiaries, although collections from the receivables in excess of amounts required to repay the Purchasers under the Securitization Facility and other creditors of the SPV may be remitted to us.

 

The proceeds of the Securitization Facility are classified as operating activities in our condensed consolidated statements of cash flows. Cash received from collections of Sold Receivables is used by the SPV to fund additional purchases of receivables on a revolving basis or to return all or any portion of outstanding capital of the Purchasers. Subsequent collections on the pledged receivables, which have not been sold, will be classified as operating cash flows at the time of collection.

 

The amount sold to the Purchasers was $300 million at each of September 30, 2024 and December 31, 2023, which was derecognized from the condensed consolidated balance sheets. As collateral against sold receivables, the SPV maintains a certain level of unsold receivables, which was $282 million and $296 million at September 30, 2024 and December 31, 2023, respectively. Total receivables sold under the Securitization Facility were $582 million and $550 million in the nine-months ended September 30, 2024 and 2023, respectively. Pursuant to the Securitization Facility, we recognized a charge of $8 million in the nine-month period ended September 30, 2023 representing the discount on the accounts receivable balance initially transferred to the SPV. This discount was included in our (loss) gain on disposal of assets in our condensed consolidated statements of operations.

 

13
 
 

The following table provides a roll-forward of the allowance for credit losses. The allowance is deducted from the amortized cost basis of accounts receivable in our condensed consolidated balance sheets (in millions):

 

  

Nine Months Ended September 30,

 
  

2024

  

2023

 

Beginning balance

 $17  $16 

(Decrease) increase in provision for credit losses

  (1)  17 

Amounts written off

  (1)  (2)

Ending balance

 $15  $31 

 

Recent Accounting Pronouncements. In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures. The purpose of this amendment was to improve disclosures related to reportable segments. The amendments in this ASU are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Currently we do not expect that the implementation of these changes will have a material effect on our financial statements.

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures. The purpose of this amendment was to enhance the transparency and decision usefulness of income tax disclosures. The amendments in this ASU are effective for annual periods beginning after December 15, 2024. Currently we do not expect that the implementation of these changes will have a material effect on our financial statements.

 

In November 2024, The FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), Disaggregation of Income Statement Expenses. The purpose of this amendment was to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions. The amendments in this Update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Currently we do not expect that the implementation of these changes will have a material impact on our financial statements.

 

In addition to the accounting standards described above, certain amounts in the condensed consolidated balance sheets and condensed consolidated statements of cash flows have also been reclassified to conform to the current presentation.

 
 

2.

Revenue

 

Revenue Recognition. We recognize revenue when we have completed a specified service and effectively transferred the control of that service to a customer in return for an amount of consideration we expect to be entitled to receive. The amount of revenue recognized is determined by the amount of consideration specified in a contract with our customers. We have elected to exclude taxes assessed by a governmental authority on transactions with our customers from our revenue. Any unremitted balance is included in current liabilities on our balance sheets.

 

Deferred Revenue. We record a deferred revenue for cash deposits received from our customers that are to be applied as payment once the performance obligation arises and is satisfied. These deposits are recorded as deferred revenue on our condensed consolidated balance sheet as advertising deposit liabilities. When we invoice our customers for completed performance obligations, we are unconditionally entitled to receive payment of the invoiced amounts. Therefore, we record invoiced amounts in accounts receivable on our balance sheet. We generally require amounts payable under advertising contracts with our political advertising customers to be paid for in advance. We record the receipt of this cash as an advertising deposit liability. Once the advertisement has been broadcast, the revenue is earned, and we record the revenue and reduce the balance in this deposit liability account. We recorded $13 million of revenue in the nine-months ended September 30, 2024 that was included in the advertising deposit liability balance as of December 31, 2023. We also record other deposit liabilities for cash received in advance for other arrangements, for which revenue is recorded as earned in future periods.

 

14
 
 

The following table presents our deferred revenue by type (in millions):

 

  

September30,

  

December 31,

 
  

2024

  

2023

 

Advertising deposit liabilities

 $32  $13 

Other deposit liabilities

  18   10 

Total deferred revenue

 $50  $23 

 

Disaggregation of Revenue. Revenue from our production companies segment is generated through our direct sales channel. Revenue from our broadcasting and other segment is generated through both our direct and advertising agency intermediary sales channels. The following table presents our revenue from contracts with customers disaggregated by type of service and sales channel (in millions):

 

  

Three Months Ended

  

Nine Months Ended

 
  

September 30,

  

September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Market and service type:

                

Advertising:

                

Core

 $365  $363  $1,110  $1,099 

Political

  173   26   247   46 

Total advertising

  538   389   1,357   1,145 

Retransmission consent

  369   378   1,121   1,167 

Production companies

  26   20   68   54 

Other

  17   16   53   51 

Total revenue

 $950  $803  $2,599  $2,417 
                 

Sales channel:

                

Direct

 $558  $547  $1,665  $1,664 

Advertising agency intermediary

  392   256   934   753 

Total revenue

 $950  $803  $2,599  $2,417 

 
 

3.

Acquisition and Divestitures

 

On July 1, 2024, we completed transactions with Marquee Broadcasting, Inc. (“Marquee”) in which we sold our television stations KCWY (NBC) in the Casper, Wyoming market (DMA 198) and KGWN (CBS) in the Cheyenne, Wyoming market (DMA 194) in exchange for Marquee’s FCC permit authorizing the construction of a new television station, to be built in the Salt Lake City, Utah market (DMA 27), which will be known as KCBU. No cash or other consideration was exchanged to fulfill the terms of this exchange.

 

The value of the construction permit acquired from Marquee is $1 million, and is based upon management’s estimate of the fair value using valuation techniques including income, cost and market approaches. In determining the fair value of the acquired asset, the fair values were determined based on, among other factors, expected future revenue and cash flows, expected future growth rates and estimated discount rates.

 

The acquisition of the construction permit for station KCBU and the sale of television stations KCWY and KGWN resulted in a net non-cash loss on disposal of $14 million.

 

15
 
 
 

4.

Long-term Debt

 

As of September 30, 2024 and December 31, 2023, long-term debt consisted of obligations under our Senior Credit Facility (as defined below), our 5.875% senior notes due 2026 (the “2026 Notes”), our 7.0% senior notes due 2027 (the “2027 Notes”), our 10.5% senior notes due 2029 (the “2029 Notes”), our 4.75% senior notes due 2030 (the “2030 Notes”) and our 5.375% notes due 2031 (the “2031 Notes”), as follows (in millions):

 

  

September 30,

  

December 31,

 
  

2024

  

2023

 

Long-term debt:

        

2019 Senior Credit Facility:

        

2019 Term Loan (matures January 2, 2026)

 $-  $1,190 

2021 Term Loan (matures December 1, 2028)

  1,439   1,470 

2024 Term Loan (matures June 4, 2029)

  499   - 

2026 Notes (matures July 15, 2026)

  10   700 

2027 Notes (matures May 15, 2027)

  671   750 

2029 Notes (matures July 15, 2029)

  1,250   - 

2030 Notes (matures October 15, 2030)

  800   800 

2031 Notes (matures November 15, 2031)

  1,300   1,300 

Total outstanding principal, including current portion

  5,969   6,210 

Unamortized deferred loan costs - Senior Credit Facility

  (38)  (18)

Unamortized deferred loan costs - 2026 Notes

  -   (3)

Unamortized deferred loan costs - 2027 Notes

  (4)  (6)

Unamortized deferred loan costs - 2029 Notes

  (13)  - 

Unamortized deferred loan costs - 2030 Notes

  (8)  (10)

Unamortized deferred loan costs - 2031 Notes

  (13)  (14)

Unamortized premium - 2026 Notes

  -   1 

Less current portion

  (23)  (15)

Long-term debt, less current portion and deferred financing costs

 $5,870  $6,145 
         

Borrowing availability under Revolving Credit Facility

 $674  $494 

 

2024 Refinancing Activities. On June 3, 2024, we issued $1.25 billion in aggregate principal amount of 10.5% Senior Secured First Lien Notes due 2029 (the “2029 Notes”) pursuant to an indenture, dated as of June 3, 2024, between us, the guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee and collateral agent (the “2029 Notes Indenture”). The 2029 Notes were issued at par. Interest in the 2029 Notes accrues from June 3, 2024, and is payable semiannually, on January 15 and July 15 of each year, beginning on January 15, 2025.

 

The net proceeds from the 2029 Notes were used, together with the net proceeds from a $500 million tranche F term loan (the “2024 Term Loan”) and a $150 million draw under our Revolving Credit Facility (as defined below), both under the Senior Credit Facility (as defined below), and cash on hand, to pre-pay our $1.2 billion tranche E 2019 Term Loan under the Senior Credit Facility; repurchase in a tender offer $690 million of face value of our outstanding 5.875% 2026 Notes; and pay all costs and accrued interest in connection with the offering.

 

The 2029 Notes and related guarantees are our senior secured first lien obligations. The 2029 Notes rank:

 

●

equally in right of payment with all of our existing and future pari passu senior debt; senior in right of payment to all of our existing and future subordinated debt;

●

effectively senior to all of our existing and future unsecured debt or junior lien debt to the extent of the value of the collateral securing the 2029 Notes;

●

effectively subordinated to any existing and future debt that is secured by a lien on any assets not constituting collateral securing the 2029 Notes to the extent of the value of such assets; and

●

structurally subordinated to any existing and future debt and liabilities of our subsidiaries that do not guarantee the 2029 Notes.

 

16
 
 

On June 4, 2024, we entered into a third amendment to the Fifth Amended and Restated Credit Agreement (the “Third Amendment” and as amended, including by the Third Amendment, the “Senior Credit Facility”), dated as of December 1, 2021.

 

The Third Amendment, among other things, provided for (i) the new $500 million 2024 Term Loan and (ii) increased aggregate commitments under our existing $552.5 million revolving credit facility (the “Revolving Credit Facility”) that matures December 31, 2027 by $127.5 million, and a concurrent termination of the separate commitments under a $72.5 million tranche of revolving commitments that were to mature on December 1, 2026, resulting in aggregate commitments under the Revolving Credit Facility of $680 million.

 

The 2024 Term Loan bears interest, at our option, at either the Secured Overnight Financing Rate (“SOFR”) plus an applicable margin or the Base Rate plus an applicable margin. “Base Rate” is defined as the greatest of (i) the administrative agent’s prime rate, (ii) the overnight federal funds rate plus 0.50% and (iii) Adjusted Term SOFR (as defined in the Senior Credit Facility) for a one-month tenor in effect on such day plus 1.0%. The applicable margin with respect to the 2024 Term Loan is 5.25% for all SOFR borrowings and 4.25% for all Base Rate borrowings. The 2024 Term Loan also requires us to make quarterly principal reductions of $1.25 million beginning September 30, 2024. To the extent all or any portion of the 2024 Term Loan is repaid or prepaid prior to the one year anniversary of the effective date of the Third Amendment, a prepayment fee equal to 1.0% of the amount of the 2024 Term Loan being repaid or prepaid will apply.

 

The Revolving Credit Facility bears interest, at our option, based on SOFR plus 1.75%-2.75% or the Base Rate plus 0.75%-1.75%, in each case based on a first lien leverage ratio (the “First Lien Leverage Ratio”) as set forth in the Senior Credit Facility. The Company is required to pay a commitment fee on the average daily unused portion of the Revolving Credit Facility, which rate may range from 0.375% to 0.5%, based on the First Lien Leverage Ratio.

 

The costs associated with these 2024 refinancing activities totaled $47 million, of which $45 million were capitalized as deferred loan costs, to be amortized over the lives of the respective debt obligations. Our loss from the early extinguishment of debt for these 2024 refinancing activities was $10 million, which was composed of expensing of the remaining $4 million of costs and the write-off of $6 million of unamortized deferred loan costs and premiums related to the debts that were pre-paid.

 

Repurchase of Debt and Subsequent Event. On May 6, 2024, our Board of Directors authorized us to use up to $250 million of available liquidity to repurchase our outstanding indebtedness through December 31, 2025. The extent of such repurchases, including the amount and timing of any repurchases, will depend on general market conditions, regulatory requirements, alternative investment opportunities and other considerations. This repurchase program does not require us to repurchase a minimum amount of debt, and it may be modified, suspended or terminated at any time without prior notice. During the nine-months ended September 30, 2024, we used $72 million of cash to repurchase and retire $79 million of the face value of our outstanding 2027 Notes on the open market, resulting in a $6 million gain from early extinguishment of debt. In addition, during the three and nine-months ended September 30, 2024, we used $14 million of cash to repurchase and retire $15 million of the face value of our 2021 Term Loans on the open market, resulting in a $1 million gain from early extinguishment of debt. At September 30, 2024, we were obligated to repurchase an additional $7 million of face value of our 2021 Term Loans on the open market for $6 million, and this transaction will be completed later in the fourth quarter of 2024, using cash on hand.

 

On September 25, 2024, we entered into an agreement with a lender to purchase a portion of our 2021 Term Loans. As a result of this agreement, the lender has purchased $32 million of the face value of our outstanding 2021 Term Loans for $30 million, under this plan. We plan to repurchase and retire these portions of our 2021 Term Loan later in the fourth quarter of 2024 using cash on hand.

 

Interest Rate Caps. On February 23, 2023, we entered into two interest rate caps pursuant to an International Swaps and Derivatives Association Master Agreement (the “ISDA Master Agreement”) with two counterparties, Wells Fargo Bank, NA and Truist Bank, respectively. On June 25, 2024, we amended the notional amount of the interest rate caps in order to better match the outstanding amounts of the related outstanding indebtedness. At September 30, 2024, the caps had a combined notional value of approximately $2 billion and mature on December 31, 2025. The interest rate caps protect us against adverse fluctuations in interest rates by reducing our exposure to variability in cash flows on a portion of our variable-rate debt. The interest rate caps are designated as cash flow hedges of our risk of changes in our cash flows attributable to changes in 1-month SOFR on our outstanding variable-rate debt in accordance with ASC 815. We elected to apply the optional expedient in ASC 848, Reference Rate Reform, that enabled us to consider the amended swaps a continuation of the existing contracts. As a result, the transition did not have an impact on our hedge accounting or a material impact to our financial statements.

 

17
 
 

The interest rate caps, as amended, effectively limit the annual interest charged on our 2021 Term Loan and our 2024 Term Loan to a maximum of 1-month Term SOFR of 4.96% and 5.047%. We are required to pay aggregate fees in connection with the interest rate caps of approximately $34 million that is due and payable at maturity on December 31, 2025. On the initial designation date, we recognized an asset and corresponding liability for the deferred premium payable equal to $34 million. The asset is amortized into interest expense straight-line over the term of the hedging relationship. At September 30, 2024 and December 31, 2023, the recorded value of the asset was $15 million and $24 million, net of accumulated amortization, respectively. At September 30, 2024 and December 31, 2023, the fair value of the derivative liability was $32 million and $23 million, respectively. We present the deferred premium, the asset, and the fair value of the derivative, net within other non-current liabilities in our condensed consolidated balance sheets.

 

The ISDA Master Agreement, together with its related schedules, contain customary representations, warranties and covenants. The interest rate caps were not entered into for speculative trading purposes. Changes in the fair value of the interest rate caps are reported as a component of other comprehensive income. Actual gains and losses are reclassified into earnings in the same period or periods during which the hedged transaction affects earnings and are presented in the same income statement line item as the earnings effect of the hedged transaction. Gains and losses on the derivative instrument representing hedge components excluded from the assessment of effectiveness are recognized currently in earnings and are presented in the same line of the income statement for the hedged item. We recognized $9 million and $7 million, respectively, of amortization expense for the asset during the nine-months ended September 30, 2024 and 2023, which is included as a component of cash flows from operating activities in our condensed consolidated statements of cash flows. Cash flows received from the counterparties pursuant to the interest rate caps are included as components of cash flows from financing activities in our condensed consolidated statements of cash flows. During the nine-months ended September 30, 2024 and 2023, we received $6 million and $2 million, respectively, of cash payments from the counterparties that we reclassified as reductions of interest expense from the interest rate caps in our condensed consolidated statements of operations.

 

For all of our interest bearing obligations, we made interest payments of approximately $257 million and $284 million during the nine-months ended September 30, 2024 and 2023, respectively. During the nine-months ended September 30, 2024 and 2023, we capitalized $1 million and $20 million of interest payments, respectively, related to the Assembly Atlanta project.

 

As of September 30, 2024, the aggregate minimum principal maturities of our long term debt for the remainder of 2024 and the succeeding 5 years were as follows (in millions):

 

  

Minimum Principal Maturities

 

Year

 

Senior Credit

Facility

  

2026 Notes

  

2027 Notes

  

2029 Notes

  

2030 Notes

  

2031 Notes

  

Total

 

Remainder of 2024

 $8  $-  $-  $-  $-  $-  $8 

2025

  20   -   -   -   -   -   20 

2026

  20   10   -   -   -   -   30 

2027

  20   -   671   -   -   -   691 

2028

  1,399   -   -   -   -   -   1,399 

2029

  471   -   -   1,250   -   -   1,721 

Thereafter

  -   -   -   -   800   1,300   2,100 

Total

 $1,938  $10  $671  $1,250  $800  $1,300  $5,969 

 

As of September 30, 2024, there were no significant restrictions on the ability of our subsidiaries to distribute cash to us or to the guarantor subsidiaries. The Senior Credit Facility contains affirmative and restrictive covenants with which we must comply. The 2026 Notes, the 2027 Notes, the 2029 Notes, the 2030 Notes and the 2031 Notes also include covenants with which we must comply.

 

18
 
 
 

5.

Fair Value Measurement

 

We measure certain assets and liabilities at fair value, which are classified by the FASB Codification within the fair value hierarchy as Level 1, 2, or 3, on the basis of whether the measurement employs observable or unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s own assumptions and consider information about readily available market participant assumptions.

 

 

●

Level 1: Quoted prices for identical instruments in active markets

 

●

Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets

 

●

Level 3: Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable

 

Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. The use of different market assumptions or methodologies could have a material effect on the fair value measurement.

 

The carrying amounts of accounts receivable, prepaid and other current assets, accounts payable, employee compensation and benefits, accrued interest, other accrued expenses, and deferred revenue approximate fair value at both September 30, 2024 and December 31, 2023.

 

As of September 30, 2024 and December 31, 2023, the carrying amount of our long-term debt was $5.9 billion and $6.2 billion, respectively, and the fair value was $5.1 billion and $5.6 billion, respectively. The fair value of our long-term debt is based on observable estimates provided by third party financial professionals as of each date, and as such is classified within Level 2 of the fair value hierarchy.

 

 

6.

Stockholders’ Equity

 

We are authorized to issue 245 million shares in total of all classes of stock consisting of 25 million shares of Class A common stock, 200 million shares of common stock, and 20 million shares of “blank check” preferred stock for which our Board of Directors has the authority to determine the rights, powers, limitations and restrictions. The rights of our common stock and Class A common stock are identical, except that our Class A common stock has 10 votes per share and our common stock has one vote per share.

 

Our common stock and Class A common stock are entitled to receive cash dividends if declared, on an equal per-share basis. The Board of Directors declared a quarterly cash dividend of $0.08 per share on our common stock and Class A common stock to shareholders of record during March, June, and September of 2024 and 2023, payable on the last business day of March, June, and September, 2024 and 2023. The total common stock and Class A common stock dividends declared and paid during each of the nine-month periods ended September 30, 2024 and 2023 were $24 million and $22 million, respectively.

 

Under our various employee benefit plans, we may, at our discretion, issue authorized and unissued shares, or previously issued shares held in treasury, of our Class A common stock or common stock. As of September 30, 2024, we had reserved 12.7 million shares and 1.2 million shares of our common stock and Class A common stock, respectively, for future issuance under various employee benefit plans.

 

 

7.

Retirement Plans

 

The components of our net periodic pension benefit are included in miscellaneous income (expense), net in our condensed consolidated statements of operations. During the nine-months ended September 30, 2024, the amount recorded as a benefit was not material.

 

During the nine-month period ended September 30, 2024, we contributed $22 million in matching cash contributions, and shares of our common stock valued at $9 million for our 2023 discretionary profit-sharing contributions, to the 401(k) Plan. The discretionary profit-sharing contribution was recorded as an expense in 2023 and accrued as of December 31, 2023. Based upon employee participation as of September 30, 2024, during the remainder of 2024, we expect to contribute approximately $6 million of matching cash contributions to this plan.

 

19
 
 
 

8.

Stock-based Compensation

 

We recognize compensation expense for stock-based payment awards made to our employees, consultants and directors. The following table provides our stock-based compensation expense and related income tax benefit for the three and nine-month periods ended September 30, 2024 and 2023 (in millions):

 

  

Three Months Ended

  

Nine Months Ended

 
  

September 30,

  

September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Stock-based compensation expense, gross

 $5  $5  $17  $14 

Income tax benefit at our statutory rate associated with share-based compensation

  (1)  (1)  (4)  (4)

Stock-based compensation expense, net

 $4  $4  $13  $10 

 

All shares of Class A common stock and common stock underlying outstanding restricted stock units and performance awards are counted as issued at target levels under the 2022 EICP for purposes of determining the number of shares available for future issuance.

 

A summary of restricted Class A common stock, common stock and restricted stock units activity for the nine-month periods ended September 30, 2024 and 2023 is as follows:

 

  

Nine Months Ended

 
  

September 30, 2024

  

September 30, 2023

 
      

Weighted-

      

Weighted-

 
      

average

      

average

 
      

Grant Date

      

Grant Date

 
  

Number of

  

Fair Value

  

Number of

  

Fair Value

 
  

Shares

  

Per Share

  

Shares

  

Per Share

 

Restricted stock - common:

                

Outstanding - beginning of period (1)

  1,467,936  $12.17   997,745  $20.62 

Granted(1)

  1,785,958  $7.47   1,007,919  $8.15 

Vested

  (480,412) $11.23   (461,953) $20.27 

Forfeited

  (130,000) $8.10   -  $- 

Outstanding - end of period (1)

  2,643,482  $9.36   1,543,711  $12.58 
                 

Restricted stock - Class A common:

                

Outstanding - beginning of period (1)

  1,148,233  $12.37   677,238  $19.36 

Granted(1)

  823,393  $8.25   738,854  $8.34 

Vested

  (318,733) $13.17   (203,986) $18.76 

Outstanding - end of period (1)

  1,652,893  $10.16   1,212,106  $12.74 
                 

Restricted stock units - common stock:

                

Outstanding - beginning of period

  587,168  $11.50   274,145  $23.60 

Granted

  1,229,390  $5.72   587,168  $11.50 

Vested

  (564,793) $11.50   (247,953) $23.64 

Forfeited

  (22,375) $11.50   (26,192) $23.15 

Outstanding - end of period

  1,229,390  $5.72   587,168  $11.50 

 

(1)

For awards subject to future performance conditions, amounts assume target performance.

 

20
 
 
 

9.

Leases

 

We determine if an arrangement is a lease at its inception. Operating lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. We generally use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future payments, because the implicit rate of the lease is generally not known. Right-of-use (“ROU”) assets related to our operating lease liabilities are measured at lease commencement based on the initial measurement of the lease liability, plus any prepaid lease payments and less any lease incentives. Our lease terms that are used in determining our operating lease liabilities at lease commencement may include options to extend or terminate the leases when it is reasonably certain that we will exercise such options. We amortize our ROU assets as operating lease expense generally on a straight-line basis over the lease term and classify both the lease amortization and imputed interest as operating expenses. We have lease agreements with lease and non-lease components, and in such cases, we generally account for the components separately with only the lease component included in the calculation of the ROU asset and lease liability.

 

We have operating leases that primarily relate to certain of our facilities, data centers and vehicles. As of September 30, 2024, our operating leases substantially have remaining terms of one year to 99 years, some of which include options to extend and/or terminate the leases. We do not recognize lease assets and lease liabilities for any lease with an original lease term of less than one year.

 

Cash flow movements related to our lease activities are included in other assets and accounts payable and other liabilities as presented in net cash provided by operating activities in our condensed consolidated statement of cash flows.

 

As of September 30, 2024, the weighted-average remaining term of our operating leases was approximately 9.1 years. The weighted-average discount rate used to calculate the values associated with our operating leases was 6.63%. The table below describes the nature of lease expense and classification of operating lease expense recognized in the three and nine-months ended September 30, 2024 and 2023, respectively (in millions):

 

  

Three Months Ended

  

Nine Months Ended

 
  

September 30,

  

September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Lease expense

                

Operating lease expense

 $4  $4  $12  $13 

Short-term lease expense

  1   1   3   4 

Total lease expense

 $5  $5  $15  $17 

 

The maturities of operating lease liabilities as of September 30, 2024, for the remainder of 2024 and the succeeding years were as follows (in millions):

 

Year ending December 31,

 

Operating Leases

 

Remainder of 2024

 $3 

2025

  14 

2026

  13 

2027

  11 

2028

  8 

Thereafter

  48 

Total lease payments

  97 

Less: Imputed interest

  (25)

Present value of lease liabilities

 $72 

 

As a Lessor. We lease or sublease our owned or leased production facilities, land, towers and office space through operating leases with third parties. Payments received associated with these leases consist of fixed and variable payments. Fixed payments are received for the rental of space including fixed rate rent escalations over the applicable term of the lease agreements. Variable payments are received for short-term rental of space, variable rent escalations and reimbursement of operating costs related to the asset leased or subleased.

 

21
 
 

We recognize revenue from fixed payments on a straight-line basis over the applicable term of the lease agreements, whose lives range between one and 42 years. The excess of straight-line revenue recognized over the fixed payments received is recorded as deferred rent receivable in other assets on our condensed consolidated balance sheets. The deferred rent receivable balance was $8 million and $6 million as of September 30, 2024 and December 31, 2023, respectively. We recognize revenue from variable payments each period as earned.

 

Cash flow activities related to our lease activities for assets we lease to third parties are included in other assets and accounts receivable as presented in net cash provided by operating activities in our condensed consolidated statement of cash flows.

 

The following table describes the nature of our lease revenue and classification of operating lease revenue recognized in the three and nine-months ended September 30, 2024 and 2023 (in millions):

 

  

Three Months Ended

  

Nine Months Ended

 
  

September 30,

  

September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Operating lease revenue:

                

Fixed lease revenue

 $5  $2  $16  $2 

Variable lease revenue

  4   4   12   11 

Total operating lease revenue

 $9  $6  $28  $13 

 

The following table presents our future minimum rental receipts for non-cancelable leases and subleases as of September 30, 2024 (in millions):

 

Year ending December 31,

 

Operating Leases

 

Remainder of 2024

 $7 

2025

  25 

2026

  24 

2027

  23 

2028

  23 

Thereafter

  249 

Total lease receipts

 $351 

 
 

10.

Commitments and Contingencies

 

We are and expect to continue to be subject to legal actions, proceedings and claims that arise in the normal course of our business. In the opinion of management, the amount of ultimate liability, if any, with respect to these actions, proceedings and claims will not materially affect our financial position, results of operations or cash flows, although legal proceedings are subject to inherent uncertainties, and unfavorable rulings or events could have a material adverse impact on our financial position, results of operations or cash flows.

 

22
 
 
 

11.

Goodwill and Intangible Assets

 

A summary of changes in our goodwill and other intangible assets, on a net basis, for the nine-months ended September 30, 2024 is as follows (in millions):

 

  

Net Balance at

  

Disposals

      

Net Balance at

 
  

December 31,

  

And

      

September 30,

 
  

2023

  

Adjustments, Net

  

Amortization

  

2024

 
                 

Broadcast licenses

 $5,320  $(9) $-  $5,311 

Goodwill

  2,643   (1)  -   2,642 

Finite-lived intangible assets

  415   -   (94)  321 

Total intangible assets net of accumulated amortization

 $8,378  $(10) $(94) $8,274 

 

 

A summary of the changes in our goodwill, on a gross basis, for the nine-months ended September 30, 2024, is as follows (in millions):

 

  

As of

  

Disposals

  

As of

 
  

December 31,

  

And

  

September 30,

 
  

2023

  

Adjustments, Net

  

2024

 
             

Goodwill, gross

 $2,742  $(1) $2,741 

Accumulated goodwill impairment

  (99)  -   (99)

Goodwill, net

 $2,643  $(1) $2,642 

 

 

As of September 30, 2024 and December 31, 2023, our intangible assets and related accumulated amortization consisted of the following (in millions):

 

  

As of September 30, 2024

  

As of December 31, 2023

 
      

Accumulated

          

Accumulated

     
  

Gross

  

Amortization

  

Net

  

Gross

  

Amortization

  

Net

 

Intangible assets not currently subject to amortization:

                        

Broadcast licenses

 $5,365  $(54) $5,311  $5,374  $(54) $5,320 

Goodwill

  2,642   -   2,642   2,643   -   2,643 
  $8,007  $(54) $7,953  $8,017  $(54) $7,963 
                         

Intangible assets subject to amortization:

                        

Network affiliation agreements

 $216  $(151) $65  $216  $(126) $90 

Other finite lived intangible assets

  992   (736)  256   992   (667)  325 
  $1,208  $(887) $321  $1,208  $(793) $415 
                         

Total intangibles

 $9,215  $(941) $8,274  $9,225  $(847) $8,378 

 

Amortization expense for the nine-month periods ended September 30, 2024 and 2023 was $94 million and $147 million, respectively. Based on the intangible assets subject to amortization as of September 30, 2024, we expect that amortization expense for the remainder of 2024 would be approximately $31 million, and, for the succeeding five years, amortization expense will be approximately as follows: 2025, $113 million; 2026, $83 million; 2027, $47 million; 2028, $13 million; and 2029, $3 million. If and when acquisitions and dispositions occur in the future, actual amounts may vary materially from these estimates.

 

23
 
 
 

12.

Income Taxes

 

For the three and nine-month periods ended September 30, 2024 and 2023, our income tax expense and effective income tax rates were as follows (dollars in millions):

 

  

Three Months Ended

  

Nine Months Ended

 
  

September 30,

  

September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Income tax expense (benefit)

 $32  $3  $70  $(3)

Effective income tax rate

  25%  (8)%  25%  4%

 

We estimate our differences between taxable income or loss and recorded income or loss on an annual basis. Our tax provision for each quarter is based upon these full year projections, which are revised each reporting period. These projections incorporate estimates of permanent differences between U.S. GAAP income or loss and taxable income or loss, state income taxes and adjustments to our liability for unrecognized tax benefits to adjust our statutory federal income tax rate of 21% to our effective income tax rate. For the nine-month period ended September 30, 2024, these estimates increased or decreased our statutory Federal income tax rate to our effective income tax rate of 25% as follows: state income taxes added 5%, permanent differences between our U.S. GAAP income and taxable income added 1% and changes to our reserve accounts reduced our rate by 2%. For the nine-month period ended September 30, 2023, these estimates increased or decreased our statutory federal income tax rate to our effective income tax rate of 4% as follows: state income taxes added 3%, permanent differences between our U.S. GAAP income and taxable income reduced our rate by 7% and discrete items further reduced our rate by 13%.

 

During the nine-months ended September 30, 2024, we made $130 million of federal and state income tax payments, net of refunds. During the fourth quarter of 2024, we anticipate making income tax payments, net refunds, of approximately $3 million. As of September 30, 2024, we have an aggregate of approximately $282 million of various state operating loss carryforwards, of which we expect that approximately $201 million will not be utilized due to section 382 limitations and those that will expire prior to utilization. After applying our state effective tax rate, this amount is included in our valuation allowance for deferred tax assets.

 

24
 
 
 

13.

Segment information

 

We operate in two business segments: broadcasting and production companies. The broadcasting segment operates television stations in local markets in the U.S. The production companies segment includes the production of television content and our productions facilities, primarily Assembly Atlanta. Costs identified as other are primarily corporate and administrative expenses. The following tables present certain financial information concerning our operating segments (in millions):

 

      

Production

         

As of and for the nine months ended September 30, 2024:

 

Broadcasting

  

Companies

  

Other

  

Consolidated

 
                 

Revenue (less agency commissions)

 $2,531  $68  $-  $2,599 

Operating expenses before depreciation, amortization, impairment and loss on disposal of assets, net:

  1,719   57   80   1,856 

Depreciation and amortization

  186   14   2   202 

Loss on disposal of assets, net

  15   -   -   15 

Operating expenses

  1,920   71   82   2,073 

Operating income (loss)

 $611  $(3) $(82) $526 
                 

Interest expense

 $-  $-  $363  $363 

Capital expenditures (excluding business combinations)

 $46  $57  $-  $103 

Goodwill

 $2,614  $28  $-  $2,642 

Total assets

 $9,840  $664  $127  $10,631 
                 

For the nine months ended September 30, 2023:

                
                 

Revenue (less agency commissions)

 $2,363  $54  $-  $2,417 

Operating expenses before depreciation, amortization and (gain) loss on disposal of assets, net:

  1,664   88   79   1,831 

Depreciation and amortization

  241   9   3   253 

Impairment of goodwill and other intangible assets

  -   43   -   43 

Loss on disposal of assets, net

  18   2   -   20 

Operating expenses

  1,923   142   82   2,147 

Operating income (loss)

 $440  $(88) $(82) $270 
                 

Interest expense

 $-  $-  $324  $324 

Capital expenditures (excluding business combinations)

 $83  $201  $4  $288 
                 

As of December 31, 2023:

                
                 

Goodwill

 $2,615  $28  $-  $2,643 

Total assets

 $9,897  $658  $85  $10,640 

 

25
 
 
 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Executive Overview

 

Introduction. The following discussion and analysis of the financial condition and results of operations of Gray Television, Inc. and its consolidated subsidiaries (except as the context otherwise provides, “Gray Media,” “Gray,” the “Company,” “we,” “us” or “our”) should be read in conjunction with our unaudited condensed consolidated financial statements and notes thereto included elsewhere herein, as well as with our audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”) filed with the SEC.

 

Business Overview. We are a multimedia company headquartered in Atlanta, Georgia. We are the nation’s largest owner of top-rated local television stations and digital assets serving 113 television markets that collectively reach approximately 36 percent of US television households. The portfolio includes 77 markets with the top-rated television station and 100 markets with the first and/or second highest rated television station, as well as the largest Telemundo Affiliate group with 43 markets totaling nearly 1.5 million Hispanic TV Households. We also own Gray Digital Media, a full-service digital agency offering national and local clients digital marketing strategies with the most advanced digital products and services. Our additional media properties include video production companies Raycom Sports, Tupelo Media Group, and PowerNation Studios, and studio production facilities Assembly Atlanta and Third Rail Studios. Gray also owns a majority interest in Swirl Films.

 

Our operating revenues are derived primarily from broadcasting and internet advertising, retransmission consent fees and, to a lesser extent, other sources such as production of television and event programming, television commercials, tower rentals and management fees. For the nine-months ended September 30, 2024 and 2023, we generated revenue of $2.6 billion and $2.4 billion, respectively.

 

Revenues, Operations, Cyclicality and Seasonality. Broadcast advertising is sold for placement generally preceding or following a television station’s network programming and within local and syndicated programming. Broadcast advertising is sold in time increments and is priced primarily on the basis of a program’s popularity among the specific audience an advertiser desires to reach. In addition, broadcast advertising rates are affected by the number of advertisers competing for the available time, the size and demographic makeup of the market served by the station and the availability of alternative advertising media in the market area. Broadcast advertising rates are generally the highest during the most desirable viewing hours, with corresponding reductions during other hours. The ratings of a local station affiliated with a major network can be affected by ratings of network programming. Most advertising contracts are short-term, and generally run only for a few weeks.

 

We also sell internet advertising on our stations’ websites and mobile apps. These advertisements may be sold as banner advertisements, video advertisements and other types of advertisements or sponsorships.

 

Our broadcast and internet advertising revenues are affected by several factors that we consider to be seasonal in nature. These factors include:

 

●

Spending by political candidates, political parties and special interest groups increases during the even-numbered “on-year” of the two-year election cycle. This political spending typically is heaviest during the fourth quarter of such years;

●

Broadcast advertising revenue is generally highest in the second and fourth quarters each year. This seasonality results partly from increases in advertising in the spring and in the period leading up to and including the holiday season;

●

Core advertising revenue on our NBC-affiliated stations increases in certain years as a result of broadcasts of the Olympic Games; and

●

Because our stations and markets are not evenly divided among the Big Four broadcast networks, our local and national advertising revenue can fluctuate between years related to which network broadcasts the Super Bowl.

 

We derived a material portion of our non-political broadcast advertising revenue from advertisers in a limited number of industries, particularly the services sector, comprising financial, legal and medical advertisers, and the automotive industry. The services sector has become an increasingly important source of advertising revenue over the past few years. During the nine-months ended September 30, 2024 and 2023, approximately 24% and 26%, respectively, of our broadcast advertising revenue (excluding political advertising revenue) was obtained from advertising sales to the services sector. During the nine-months ended September 30, 2024 and 2023 approximately 19% and 20%, respectively, of our broadcast advertising revenue (excluding political advertising revenue) was obtained from advertising sales to automotive customers. Revenue from these industries may represent a lower percentage of total revenue in even-numbered years due to, among other things, the decreased availability of advertising time, as a result of such years being the “on-year” of the two-year election cycle.

 

26
 

 

Our primary broadcasting operating expenses are employee compensation, related benefits and programming costs. In addition, the broadcasting operations incur overhead expenses, such as maintenance, supplies, insurance, rent and utilities. A large portion of the operating expenses of our broadcasting operations is fixed. We continue to monitor our operating expenses and seek opportunities to reduce them where possible.

 

2024 Refinancing Activities. During 2024, we have undertaken several steps to implement our strategy to reduce our debt and extend the maturity of portions of our debt obligations that were scheduled to mature in the near future. Collectively, these actions are intended to resolve concerns over upcoming maturities, and to take advantage of other opportunities in the markets. Please refer to Note 4. “Long-Term Debt” for further information. During the nine-months ended September 30, 2024, we have:

 

●

Amended our Senior Credit Facility to:
 

o

Increase lender commitments under our Revolving Credit Facility to $680 million and extend the maturity date to December 31, 2027;
 

o

Fully repay the $1.15 billion 2019 Term Loan that was scheduled to mature on January 2, 2026;
 

o

Issue the $500 million 2024 Term Loan that will mature on June 4, 2029;

●

Pre-paid through a tender offer, $690 million of the $700 million in outstanding 2026 Notes that was scheduled to mature on July 15, 2026; and

●

Issued $1.25 billion of our 2029 Notes, that are secured pari passu with our Senior Credit Facility and that will mature on July 15, 2029.

 

In addition, during 2024 we used $72 million of cash to repurchase and retire $79 million of our outstanding 2027 Notes on the open market and we have used $14 million of cash to repurchase and retire $15 million of our outstanding 2021 Term Loans on the open market.

 

We project, including actions taken to date, a reduction of our Adjusted Total Indebtedness (also referred to as “Net Debt”) during the full-year 2024 of $500 million.

 

Cost Containment Initiatives. Starting in August 2024, we began identifying and implementing various measures throughout the company that we expect will further reduce operating expenses by at least $60 million on an annualized basis. As part of our routine budgeting process, we are carefully evaluating our capital expenditure needs for 2025.

 

We have taken several steps to reduce personnel expenses in 2025. These steps include streamlining workflows at our television stations and other business units, eliminating over 150 unfilled positions for which we were recruiting, eliminating certain positions which will not be filled following expected normal attrition throughout the second half of this year, and, for the first time in many years, eliminating certain positions across our television stations and certain business units. Importantly, despite these staffing changes, we will continue to employ journalists and meteorologists and continue to produce local newscasts in all of our existing local news markets, including small markets.

 

As a result of, and to account properly for, the costs to achieve these and certain additional cost containment measures, we currently anticipate recording a one-time charge of approximately $2 million in the fourth quarter of 2024.

 

Please see our “Results of Operations” and “Liquidity and Capital Resources” sections below for further discussion of our operating results.

 

Revenue

 

Set forth below are the principal types of revenue, less agency commissions, earned by us for the periods indicated and the percentage contribution of each type of revenue to our total revenue (dollars in millions):

 

   

Three Months Ended September 30,

    

Nine Months Ended September 30,

  
   

2024

    

2023

    

2024

    

2023

  
           

Percent

            

Percent

            

Percent

            

Percent

  
   

Amount

   

of Total

    

Amount

   

of Total

   

Amount

   

of Total

    

Amount

   

of Total

 

Revenue:

                                                                

Core advertising

   $ 365       38 %   $ 363       45 %   $ 1,110       43 %   $ 1,099       45 %

Political

     173       18 %     26       3 %     247       10 %     46       2 %

Retransmission consent

     369       39 %     378       47 %     1,121       43 %     1,167       48 %

Production companies

     26       3 %     20       3 %     68       3 %     54       3 %

Other

     17       2 %     16       2 %     53       1 %     51       2 %

Total

   $ 950       100 %   $ 803       100 %   $ 2,599       100 %   $ 2,417       100 %

 

27
 

 

Results of Operations

 

Three-Months Ended September 30, 2024 (“the 2024 three-month period”) Compared to Three-Months Ended September 30, 2023 (“the 2023 three-month period”)

 

Revenue. Total revenue increased $147 million, or 18% in the 2024 three-month period. During the 2024 three-month period:

 

●

Core advertising revenue increased by $2 million or 1%, due in part to $20 million of advertising revenue on our 53 NBC channels from the broadcast of the 2024 Olympic Games;

●

Consistent with 2024 being the “on-year” of the two-year election cycle, political advertising revenue increased by $147 million, or 565%;

●

Retransmission consent revenue decreased by $9 million or 2%, due to a decrease in subscribers, offset, in part, by an increase in rates; and

●

Production company revenue increased by $6 million, or 30%, in the 2024 three-month period due to the start-up of our operations at Assembly Atlanta.

 

Broadcasting Expenses. Broadcasting expenses (before depreciation, amortization and gain or loss on disposal of assets) increased $14 million, or 3%, to $571 million in the 2024 three-month period. During the 2024 three-month period:

 

●

Broadcasting payroll expenses increased by $12 million as a result of routine increases in compensation and the filling of vacant positions.

●

Broadcasting non-payroll expenses increased by $1 million due to a combination of factors, none of which were individually significant.

●

Broadcasting non-cash stock-based compensation expense was approximately $1 million in each of the 2024 and 2023 three-month periods.

 

Production Company Expenses. Production company operating expenses (before depreciation, amortization and gain or loss on disposal of assets) increased $4 million or 22% in the 2024 three-month period compared to the 2023 three-month period due primarily to increases in utilities, maintenance and property taxes at Assembly Atlanta is operational.

 

Corporate and Administrative Expenses. Corporate and administrative expenses (before depreciation, amortization and gain or loss on disposal of assets) increased by $1 million, or 4%, to $24 million. During the 2024 three-month period compensation expense increased by $2 million and professional services decreased by $1 million. Non-cash stock-based compensation expenses were $4 million in each of the 2024 and 2023 three-month periods.

 

Depreciation. Depreciation of property and equipment totaled $36 million in each of the 2024 and 2023 three-month periods.

 

Amortization. Amortization of intangible assets totaled $31 million and $48 million in the 2024 three-month period and the 2023 three-month period, respectively. The decrease in amortization expense was the result of finite-lived intangible assets becoming fully amortized and the impairment of certain finite-lived intangible assets in 2023.

 

Impairment of Goodwill and Other Intangible Assets. During the 2023 three-month period, we recognized a loss of $43 million for impairment of goodwill and other intangible assets related to the bankruptcy of Diamond Sports Group, LLC (“Diamond”)

 

Loss (Gain) on Disposal of Assets, Net. Loss on disposal of assets was $16 million in the 2024 three-month period primarily resulting from the acquisition of a construction permit to build Television station KCBU in exchange for the divestiture of television stations KCWY and KGWN that resulted in a loss of $14 million. In the 2023 three-month period, we reported a gain of $6 million.

 

Miscellaneous Income (Expense), Net. Miscellaneous income, net totaled $2 million in the 2024 three-month period and miscellaneous expense, net totaled $10 million in the 2023 three-month period, primarily due the write-off of an investment in the 2023 three-month period.

 

Interest Expense. Interest expense increased $19 million, or 17%, to $130 million for the 2024 three-month period compared to the 2023 three-month period. This increase was primarily attributable to increases in interest rates on our floating rate Senior Credit Agreement to 8.9% in the 2024 three-month period compared to 8.1% in the 2023 three-month period. Our average outstanding total long-term debt balance was $6.1 billion and $6.3 billion during the 2024 and 2023 three-month periods, respectively. Interest expense in the 2024 and 2023 three-month periods also included $3 million in each period, related to the non-cash amortization of fees for our interest rate cap agreement. Interest expense in each of the 2024 and 2023 three-month periods included $5 million, related to the amount outstanding under the Securitization Facility representing the amount outstanding under the facility at the one-month SOFR rate plus 1%.

 

28
 

 

Gain (Loss) from Early Extinguishment of Debt. During the 2024 three-month period, we have recorded a gain of $6 million primarily as a result of purchases of our 2027 Notes and 2021 Term Loans on the open market at a discount to their face value.

 

Income Tax Expense. We recognized income tax expense of $32 million and $3 million in the 2024 and 2023 three-month periods, respectively. Our effective income tax rates were 25% and (8%) in the 2024 and 2023 three-month periods, respectively. We estimate our differences between taxable income or loss and recorded income or loss on an annual basis. Our tax provision for each interim period is based upon these full year projections that are revised each reporting period. These projections incorporate estimates of permanent differences between U.S. GAAP income or loss and taxable income or loss, state income taxes and adjustments to our liability for unrecognized tax benefits. For the 2024 three-month period, these estimates increased our statutory federal income tax rate of 21% to our effective income tax rate of 25% as follows: state income taxes added 5%, permanent differences between our U.S. GAAP income and taxable income added 1% and changes to our reserve accounts reduced our rate by 2%.

 

Nine-Months Ended September 30, 2024 (“the 2024 nine-month period”) Compared to Nine-Months Ended September 30, 2023 (“the 2023 nine-month period”)

 

Revenue. Total revenue increased $182 million, or 8%, in the 2024 nine-month period from the 2023 nine-month period. During the 2024 nine-month period:

 

●

Core advertising revenue increased by $11 million or 1%, due in part to advertising revenue of $18 million from the broadcast of the Super Bowl on our 54 CBS channels in the 2024 nine-month period, compared to $6 million of revenue relating to the broadcast of the Super Bowl on our 27 FOX channels during the 2023 nine-month period, and $20 million of advertising revenue on our 53 NBC channels from the broadcast of the 2024 Olympic Games;

●

Consistent with 2024 being the “on-year” of the two-year election cycle, political advertising revenue increased by $201 million, or 437%;

●

Retransmission consent revenue decreased by $46 million or 4%, due to a decrease in subscribers, offset, in part, by an increase in rates; and

●

Production company revenue increased by $14 million, or 26%, in the 2024 nine-month period due to the start-up of our operations at Assembly Atlanta.

 

Broadcasting Expenses. Broadcasting expenses (before depreciation, amortization and gain or loss on disposal of assets) increased $55 million or 3%, to $1.7 billion. During the 2024 nine-month period:

 

●

Broadcasting payroll expenses increased by $47 million as a result of routine increases in compensation, accruals for incentive compensation and the filling of vacant positions.

●

Broadcasting non-payroll expenses increased by $8 million primarily due to an increase in sports programming expenses, partially offset by reductions in retransmission expense.

●

Broadcast non-cash stock-based compensation expense was $4 million in each of the 2024 and 2023 nine-month periods.

 

Production Company Expenses. Production company expenses (before depreciation, amortization, impairment and gain or loss on disposal of assets) decreased by approximately $31 million in the 2024 nine-month period to $57 million, compared to $88 million in the 2023 nine-month period. Production company operating expenses in the 2023 nine-month period included a $17 million allowance for credit losses related to the bankruptcy of Diamond, a counterparty in contracts with us and $18 million to settle litigation related to Assembly Atlanta.

 

Corporate and Administrative Expenses. Corporate and administrative expenses (before depreciation, amortization and gain or loss on disposal of assets) increased by $1 million, to $80 million in the 2024 nine-month period compared to the 2023 nine-month period. Non-cash stock-based compensation expenses increased to $13 million in the 2024 nine-month period compared to $11 million in the 2023 nine-month period.

 

29
 

 

Depreciation. Depreciation of property and equipment totaled $108 million and $106 million in the 2024 nine-month period and the 2023 nine-month period, respectively. Depreciation increased primarily due to the addition of depreciable assets.

 

Amortization. Amortization of intangible assets totaled $94 million and $147 million in the 2024 nine-month period and the 2023 nine-month period, respectively. Amortization decreased primarily due to finite-lived intangible assets becoming fully amortized.

 

Impairment of Goodwill and Other Intangible Assets. During the 2023 nine-month period we recognized a loss of $43 million for impairment of goodwill and other intangible assets related to the bankruptcy of Diamond.

 

Loss (Gain) on Disposals of Assets, Net. We recognized a loss on disposal of assets of $15 million in the 2024 nine-month period compared to a loss on disposal of assets of $20 million in the 2023 nine-month period. The loss in the 2024 nine-month period was primarily related to the acquisition of a construction permit to build television station KCBU in exchange for the divestiture of television stations KCWY and KGWN in which we recognized a loss of $14 million in the 2024 nine-month period. The loss in the 2023 nine-month period primarily related to the sale of television station KNIN, in which we recognized a loss of $14 million in the 2023 nine-month period.

 

Miscellaneous Income (Expense), Net. Miscellaneous income, net totaled $114 million in the 2024 nine-month period and $13 million of miscellaneous expense, net in the 2023 nine-month period. Miscellaneous income, net in the 2024 nine-month period was due primarily to a gain of $110 million from the sale of our investment in BMI. Miscellaneous expense, net in the 2023 nine-month period was due to the write-off of an investment.

 

Interest Expense. Interest expense increased $39 million, or 12%, to $363 million for the 2024 nine-month period compared to the 2023 nine-month period. This increase was primarily attributable to increases in interest rates on our floating rate Senior Credit Agreement to 8.5% in the 2024 nine-month period compared to 7.8% in the 2023 nine-month period. Our average outstanding total long-term debt balance was $6.2 billion and $6.3 billion during the 2024 and 2023 nine-month periods, respectively. Interest expense in the 2024 and 2023 nine-month periods also included $9 million and $7 million, respectively, related to the non-cash amortization of fees for our interest rate cap agreement. Interest expense in the 2024 and 2023 nine-month periods included $15 million and $11 million, respectively, related to the amount outstanding under the Securitization Facility representing the amount outstanding under the facility at the one-month SOFR rate plus 1%.

 

Loss from Early Extinguishment of Debt. The actions taken in our 2024 refinancing activities have resulted in a total net loss on early extinguishment of debt of $1 million in the 2024 nine-month period. The components of this net loss include:

 

●

A gain of $6 million from the repurchase of our 2027 Notes in the open market at a discount;

●

A gain of $1 million from the repurchase of our 2021 Term Loans in the open market at a discount; and

●

A loss of $8 million from the write-off of unamortized deferred financing costs related to the loans that were pre-paid in the 2024 refinancing activities.

 

Income Tax (Benefit) Expense. We recognized an income tax expense of $70 million and an income tax benefit of $3 million in the 2024 and 2023 nine-month periods, respectively. Our effective income tax rates were 25% and 4% in the 2024 and 2023 nine-month periods, respectively. We estimate our differences between taxable income or loss and recorded income or loss on an annual basis. Our tax provision for each interim period is based upon these full year projections that are revised each reporting period. These projections incorporate estimates of permanent differences between U.S. GAAP income or loss and taxable income or loss, state income taxes and adjustments to our liability for unrecognized tax benefits. For the 2024 nine-month period, these estimates increased our statutory federal income tax rate of 21% to our effective income tax rate of 25% as follows: state income taxes added 5%, permanent differences between our U.S. GAAP income and taxable income added 1% and changes to our reserve accounts reduced our rate by 2%.

 

30
 

 

Liquidity and Capital Resources

 

General

 

The following table presents data that we believe is helpful in evaluating our liquidity and capital resources (in millions):

 

   

Nine Months Ended September 30,

  
   

2024

    

2023

  

Net cash provided by operating activities

   $ 383     $ 565  

Net cash provided by (used in) investing activities

     10       (259 )

Net cash used in financing activities

     (345 )     (346 )

Net (decrease) increase in cash

   $ 48     $ (40 )

 

   

As of

 
   

September 30, 2024

    

December 31, 2023

  

Cash

   $ 69     $ 21  

Long-term debt, including current portion, less deferred financing costs

   $ 5,893     $ 6,160  

Series A Perpetual Preferred Stock

   $ 650     $ 650  

Borrowing availability under Revolving Credit Facility

   $ 674     $ 494  

 

Net Cash Provided By (Used In) Operating, Investing and Financing Activities. Net cash provided by operating activities was $383 million in the 2024 nine-month period compared to $565 million in the 2023 nine-month period. The decrease in net cash provided by operating activities in the 2024 nine-month period compared to the 2023 nine-month period was due primarily to an increase in net income, a decrease in impairment of goodwill and intangible assets, an increase in gain on sale of investments and a decrease in working capital.

 

Net cash provided by investing activities was $10 million in the 2024 nine-month period compared to net cash used in investing activities of $259 million for the 2023 nine-month period. The increase in the net amount provided was primarily due to a decrease in cash used for purchases of property and equipment and an increase in proceeds received from the sale of investments and other assets.

 

Net cash used in financing activities was $345 million in the 2024 nine-month period compared to net cash used in financing activities of $346 million in the 2023 nine-month period. Excluding temporary borrowings and re-payments of amounts under our Revolving Credit Facility, in the 2024 nine-month period, we issued $1.25 billion in of our 2029 Notes and $500 million of the 2024 Term Loan to pre-pay our $1.2 billion 2019 Term Loan all under the Senior Credit Facility. In addition, we repurchased in a tender offer, $690 million of face value of our outstanding 2026 Notes. In connection with these transactions, we paid $47 million in fees and expenses. Furthermore, in the 2024 nine-month period, we used $72 million, to repurchase a portion of our 2027 Notes, and $14 million, to repurchase a portion of our 2021 Term Loan on the open market. During each period, we used $39 million of cash to pay dividends to holders of our preferred stock. During 2024 and 2023 nine-month periods, we used $24 million and $22 million, respectively, to pay dividends to holders of our common stock.

 

31
 

 

Liquidity. Based on our debt outstanding as of September 30, 2024, we estimate that we will make approximately $487 million in debt interest payments over the twelve months immediately following September 30, 2024. Although our cash flows from operations are subject to a number of risks and uncertainties, we anticipate that our cash on hand, future cash expected to be generated from operations, borrowings from time to time under the Senior Credit Facility (or any such other credit facility as may be in place at the appropriate time) and, potentially, external equity or debt financing, will be sufficient to fund any debt service obligations, estimated capital expenditures and acquisition-related obligations for the next twelve months and the forseeable future. Any potential equity or debt financing would depend upon, among other things, the costs and availability of such financing at the appropriate time. We also believe that our future cash expected to be generated from operations and borrowing availability under the Senior Credit Facility (or any such other credit facility) will be sufficient to fund our future capital expenditures and long-term debt service obligations for the next twelve months and the forseeable future.

 

Collateral, Covenants and Restrictions of our credit agreements. Our obligations under the Senior Credit Agreement and the 2029 Notes are secured by substantially all of our consolidated assets, excluding real estate. In addition, substantially all of our subsidiaries are joint and several guarantors of, and our ownership interests in those subsidiaries are pledged to collateralize, our obligations under the Senior Credit Agreement. Gray Television, Inc. is a holding company, and has no material independent assets or operations. For all applicable periods, the 2026 Notes, 2027 Notes, 2030 Notes and 2031 Notes have been fully and unconditionally guaranteed, on a joint and several, senior unsecured basis, by substantially all of Gray Television, Inc.’s subsidiaries. Any subsidiaries of Gray Television, Inc. that do not guarantee the 2026 Notes, 2027 Notes, 2030 Notes and 2031 Notes are not material or are designated as unrestricted under the Senior Credit Agreement. As of September 30, 2024, June 30, 2024 and March 31, 2024, there were no significant restrictions on the ability of Gray Television, Inc.’s subsidiaries to distribute cash to Gray or to the guarantor subsidiaries.

 

The Senior Credit Agreement contains affirmative and restrictive covenants with which we must comply, including: (a) limitations on additional indebtedness, (b) limitations on liens, (c) limitations on the sale of assets, (d) limitations on guarantees, (e) limitations on investments and acquisitions, (f) limitations on the payment of dividends and share repurchases, (g) limitations on mergers and (h) maintenance of the First Lien Leverage Ratio while any amount is outstanding under the revolving credit facility, as well as other customary covenants for credit facilities of this type. The 2026 Notes, 2027 Notes, 2029 Notes, 2030 Notes and 2031 Notes include covenants with which we must comply which are typical for financing transactions of their nature. As of September 30, 2024, June 30, 2024 and March 31, 2024, we were in compliance with all required covenants under all of our debt obligations.

 

In addition to results prepared in accordance with U.S. GAAP, “Leverage Ratio Denominator” is a metric that management uses to calculate our compliance with our financial covenants in our indebtedness agreements. This metric is calculated as specified in our Senior Credit Agreement and is a significant measure that represents the denominator of a formula used to calculate compliance with material financial covenants within the Senior Credit Agreement that govern our ability to incur indebtedness, incur liens, make investments and make restricted payments, among other limitations usual and customary for credit agreements of this type. Accordingly, management believes this metric is a very material metric to our debt and equity investors.

 

Leverage Ratio Denominator gives effect to the revenue and broadcast expenses of all completed acquisitions and divestitures as if they had been acquired or divested, respectively, on October 1, 2022. It also gives effect to certain operating synergies expected from the acquisitions and related financings, and adds back professional fees incurred in completing the acquisitions. Certain of the financial information related to the acquisitions, if applicable, has been derived from, and adjusted based on, unaudited, un-reviewed financial information prepared by other entities, which Gray cannot independently verify. We cannot assure you that such financial information would not be materially different if such information were audited or reviewed and no assurances can be provided as to the accuracy of such information, or that our actual results would not differ materially from this financial information if the acquisitions had been completed on the stated date. In addition, the presentation of Leverage Ratio Denominator as determined in the Senior Credit Agreement and the adjustments to such information, including expected synergies, if applicable, resulting from such transactions, may not comply with U.S. GAAP or the requirements for pro forma financial information under Regulation S-X under the Securities Act of 1933. Leverage Ratio Denominator, as determined in the Senior Credit Agreement, represents an average amount for the preceding eight quarters then ended.

 

Our “Adjusted Total Indebtedness”, “First Lien Adjusted Total Indebtedness” and “Secured Adjusted Total Indebtedness”, in each case “Net of All Cash”, represents the amount of outstanding principal of our long-term debt, plus certain other obligations as defined in our Senior Credit Agreement, less all cash (excluding restricted cash) for the applicable amount of indebtedness.

 

32
 

 

Below is a calculation of our “Leverage Ratio”, “First Lien Leverage Ratio” and “Secured Leverage Ratio” as defined in our Senior Credit Agreement as of September 30, 2024:

 

   

Eight Quarters Ended

  
   

September 30, 2024

  
   

(in millions)

  

Net income

   $ 316  

Adjustments to reconcile from net income to Leverage Ratio Denominator as defined in our Senior Credit Agreement:

        

Depreciation

     287  

Amortization of intangible assets

     339  

Non-cash stock-based compensation

     42  

Common stock contributed to 401(k) plan

     19  

Loss on disposal of assets, net

     39  

Gain on disposal of investment, not in the ordinary course

     (110 )

Interest expense

     903  

Loss on early extinguishment of debt

     4  

Income tax expense

     122  

Impairment of investment

     90  
Amortization of program broadcast rights     69  

Payments for program broadcast rights

     (71 )

Pension benefit

     (5 )

Contributions to pension plans

     (4 )

Adjustments for unrestricted subsidiaries

     37  

Adjustments for stations acquired or divested, financings and expected synergies during the eight quarter period

     (1 )

Transaction Related Expenses

     3  

Other

     3  

Total eight quarters ended September 30, 2024

   $ 2,082  

Leverage Ratio Denominator (total eight quarters ended September 30, 2024, divided by 2)

   $ 1,041  

 

   

September 30, 2024

  
   

(dollars in millions)

  
         

Total outstanding principal, including current portion

   $ 5,969  

Letters of credit outstanding

     6  

Cash

     (69 )

Adjusted Total Indebtedness

   $ 5,906  

Leverage Ratio (maximum permitted incurrence is 7.00 to 1.00)

     5.67  
         

Total outstanding principal secured by a first lien

   $ 3,188  

Cash

     (69 )

First Lien Adjusted Total Indebtedness

   $ 3,119  

First Lien Leverage Ratio (maximum permitted incurrence is 3.50 to 1.00) (1)

     3.00  
         

Total outstanding principal secured by a liens

   $ 3,188  

Cash

     (69 )

Secured Adjusted Total Indebtedness

   $ 3,119  

Secured Leverage Ratio (maximum permitted incurrence is 5.50 to 1.00)

     3.00  

 

(1) At any time any amounts are outstanding under our revolving credit facility, our maximum First Lien Leverage Ratio cannot exceed 4.25 to 1.00.

 

33
 

 

Debt. As of September 30, 2024, long-term debt consisted of obligations under our Senior Credit Facility, the $10 million in aggregate principal amount outstanding under 2026 Notes, the $671 million in aggregate principal amount outstanding of our 2027 Notes, the $1.25 billion in aggregate principal amount of our 2029 Notes, the $800 million in aggregate principal amount outstanding of our 2030 Notes and the $1.3 billion outstanding of our 2031 Notes. As of September 30, 2024, the Senior Credit Facility provided total commitments of $2.6 billion, consisting of a $1.4 billion term loan facility, a $499 million term loan facility, and $674 million available under our revolving credit facility. We were in compliance with the covenants in these debt agreements at September 30, 2024.

 

Repurchase of Debt and Subsequent Event. On May 6, 2024, our Board of Directors authorized us to use up to $250 million of available liquidity to repurchase our outstanding indebtedness through December 31, 2025. On November 7, 2024, our Board of Directors authorized an increase in our debt repurchase authorization to repurchase additional debt in the open market, which replenished the previous authorization, bringing the total current authorization to $250 million. The extent of such repurchases, including the amount and timing of any repurchases, will depend on general market conditions, regulatory requirements, alternative investment opportunities and other considerations. This repurchase program does not require us to repurchase a minimum amount of debt, and it may be modified, suspended or terminated at any time without prior notice. During the nine-months ended September 30, 2024, we used $72 million of cash to repurchase and retire $79 million of the face value of our outstanding 2027 Notes, resulting in a $7 million gain from early extinguishment of debt. In addition, during the nine-months ended September 30, 2024, we used $14 million of cash to repurchase and retire $15 million of the face value of our 2021 Term Loans on the open market, resulting in a $2 million gain from early extinguishment of debt.  At September 30, 2024, we were obligated to repurchase and additional $7 million of face value of our 2021 Term Loans on the open market for $6 million and this transaction will be completed later in the fourth quarter of 2024, using cash on hand.

 

On September 25, 2024, we entered into a forward debt repurchase agreement with a lender to purchase on the open market up to $50 million of our 2021 Term Loans. As a result of this agreement, the lender has repurchased $32 million of the face value of our outstanding 2021 Term Loans for $30 million, under this plan. We plan to repurchase and retire these portions of our 2021 Term Loan in the fourth quarter of 2024 using cash on hand.

 

Capital Expenditures. We currently expect capital expenditures for full-year 2024 of $135 million, which includes approximately $35 million, net of reimbursements, related to Assembly Atlanta. We expect additional reimbursements of approximately $18 million in first quarter of 2025 related to 2024 capital expenditures at Assembly Atlanta.

 

Acquisition and Divestitures. On July 1, 2024, we completed a transaction with Marquee Broadcasting, Inc. (“Marquee”) in which we sold our television stations KCWY (NBC) in the Casper, Wyoming market (DMA 198) and KGWN (CBS) in the Cheyenne, Wyoming market (DMA 194) in exchange for Marquee’s FCC permit authorizing the construction of a new television station, that will be built in the Salt Lake City, Utah market (DMA 27), and will be known as KCBU. No cash or other consideration was exchanged to fulfill the terms of this exchange. The sale of television station KCWY and KGWN resulted in a non-cash loss on disposal of $14 million.

 

Other. We file a consolidated federal income tax return and such state and local tax returns as are required. During the nine-months ended September 30, 2024, we made federal or state income tax payments totaling $130 million, net of refunds. During the fourth quarter of 2024, we anticipate making income tax payments, net of refunds, of approximately $3 million. As of September 30, 2024, we have an aggregate of approximately $282 million of various state operating loss carryforwards, of which we expect that approximately $201 million will not be utilized due to section 382 limitations and those that will expire prior to utilization. After applying our state effective tax rate, this amount is included in our valuation allowance for deferred tax assets.

 

Critical Accounting Policies

 

The preparation of financial statements in conformity with U.S. GAAP requires management to make judgments and estimations that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. We consider our accounting policies relating to intangible assets and income taxes to be critical policies that require judgments or estimations in their application where variances in those judgments or estimations could make a significant difference to future reported results. These critical accounting policies and estimates are more fully discussed in our 2023 Form 10-K.

 

34
 

 

Cautionary Note Regarding Forward-Looking Statements

 

This quarterly report on Form 10-Q contains and incorporates by reference “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act. Forward-looking statements are all statements other than those of historical fact. When used in this annual report, the words “believes,” “expects,” “anticipates,” “estimates,” “will,” “may,” “should” and similar words and expressions are generally intended to identify forward-looking statements. These forward-looking statements reflect our then-current expectations and are based upon data available to us at the time the statements are made. Forward-looking statements may relate to, among other things, the economy in general, our strategies, expected results of operations, general and industry-specific economic conditions, future pension plan contributions, future capital expenditures, future proceeds from Assembly Atlanta CID infrastructure related payments and land sales, future income tax payments, future payments of interest and principal on our long-term debt, future interest expenses under our Securitization Facility, future interest expense under our interest rate caps, assumptions underlying various estimates and estimates of future obligations and commitments, and should be considered in context with the various other disclosures made by us about our business. Readers are cautioned that any forward-looking statements, including those regarding the intent, belief or current expectations of our management, are not guarantees of future performance, results or events and involve significant risks and uncertainties, and that actual results and events may differ materially from those contained in the forward-looking statements as a result of various factors including, but not limited to, those listed in Item 1A. of our Annual Report and the other factors described from time to time in our SEC filings. The forward-looking statements included in this quarterly report are made only as of the date hereof. We undertake no obligation to update such forward-looking statements to reflect subsequent events or circumstances.

 

Item 3.

Quantitative and Qualitative Disclosure About Market Risk

 

We believe that the market risk of our financial instruments as of September 30, 2024 has not materially changed since December 31, 2023. Our market risk profile on December 31, 2023 is disclosed in our 2023 Form 10-K.

 

Item 4.

Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures. As of the end of the period covered by this Quarterly Report, an evaluation was carried out under the supervision and with the participation of management, including the Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”), of the design and operation of the Company’s “disclosure controls and procedures” (as defined in Rule 13a-15(e))under the Securities Exchange Act of 1934, as amended. Based on this evaluation, the CEO and CFO have concluded that our controls and procedures were effective as of September 30, 2024.

 

Changes in Internal Control Over Financial Reporting. There have been no changes in the Company’s internal control over financial reporting during the nine-months ended September 30, 2024, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

PART II.  OTHER INFORMATION

 

Item 1.

Legal Proceedings

 

As of the date of this filing, there have been no additional material legal proceedings or material developments in the legal proceedings disclosed in Part 1, Item 3, of our Annual Report on Form 10-K for the year ended December 31, 2023. For more information, see Note 10. “Commitments and Contingencies” within the accompanying condensed consolidated financial statements.

 

Item 1A.

Risk Factors

 

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors that affect our business and financial results that are discussed in Part I, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. These factors could materially adversely affect our business, financial condition, liquidity, results of operations and capital position, and could cause our actual results to differ materially from our historical results or the results contemplated by the forward-looking statements contained in this report. There have been no material changes to such risk factors.

 

35
 

 

 

Item 5.

Other Information

 

None of the Company’s directors or officers adopted, modified or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement, as defined in Item 408 of Regulation S-K, during the Company’s fiscal quarter ended September 30, 2024.

 

 

Item 6.

Exhibits

 

The following exhibits are filed as part of this Quarterly Report:

 

Exhibit

Number

  

Description of Document
     

31.1

  

Rule 13(a) – 14(a) Certificate of Chief Executive Officer

31.2

  

Rule 13(a) – 14(a) Certificate of Chief Financial Officer

32.1

  

Section 1350 Certificate of Chief Executive Officer

32.2

  

Section 1350 Certificate of Chief Financial Officer

101.SCH

  

Inline XBRL Taxonomy Extension Schema Document

101.CAL

  

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

  

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

  

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

  

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

  

The cover page from Gray Television, Inc.’s Quarterly Report on Form 10-Q for the fiscal period ended September 30, 2024 has been formatted in Inline XBRL and contained in Exhibit 101.

 

36
 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

GRAY TELEVISION, INC.

(Registrant)

 

 

 

 

 

 

 

 

 

 Date: November 8, 2024

By:

/s/ Jeffrey R. Gignac

 

 

 

Jeffrey R. Gignac

 

 

 

Executive Vice President and Chief Financial Officer

 

 

 

37

EXHIBIT 31.1

CERTIFICATION

 

I, Hilton H. Howell, Jr., certify that:

 

 

1.

I have reviewed this quarterly report on Form 10-Q of Gray Television, Inc.;

 

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

 

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 

d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

 

 

5.

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: November 8, 2024 

By:

/s/ Hilton H. Howell, Jr. 

 

 

 

Hilton H. Howell, Jr.  

 

 

 

Executive Chairman and Chief Executive Officer 

 

 

 

EXHIBIT 31.2

CERTIFICATION

 

I, Jeffrey R. Gignac, certify that:

 

 

1.

I have reviewed this quarterly report on Form 10-Q of Gray Television, Inc.;

 

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

 

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 

d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

 

 

5.

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: November 8, 2024 

By:

/s/ Jeffrey R. Gignac

 

 

 

Jeffrey R. Gignac 

 

 

 

Executive Vice President and Chief Financial Officer 

 

 

 

EXHIBIT 32.1

 

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

 

In connection with the accompanying quarterly report on Form 10-Q of Gray Television, Inc. (the “Company”) for the quarterly period ended September 30, 2024 (the “Periodic Report”), the undersigned Chief Executive Officer of the Company, hereby certifies pursuant to Title 18, Section 1350 United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of his individual knowledge and belief, that the Periodic Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Dated: November 8, 2024

 

 

/s/ Hilton H. Howell, Jr.         

Hilton H. Howell, Jr.

Executive Chairman and Chief Executive Officer

 

 

A signed original of this written statement required by Section 906 has been provided to Gray Television, Inc. and will be retained by Gray Television, Inc. and furnished to the SEC or its staff upon request.

 

 

EXHIBIT 32.2

 

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

 

In connection with the accompanying quarterly report on Form 10-Q of Gray Television, Inc. (the “Company”) for the quarterly period ended September 30, 2024 (the “Periodic Report”), the undersigned Chief Financial Officer of the Company, hereby certifies pursuant to Title 18, Section 1350 United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of his individual knowledge and belief, that the Periodic Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Dated: November 8, 2024

 

/s/ Jeffrey R. Gignac         

Jeffrey R. Gignac

Executive Vice President and Chief Financial Officer

 

A signed original of this written statement required by Section 906 has been provided to Gray Television, Inc. and will be retained by Gray Television, Inc. and furnished to the SEC or its staff upon request.

 

 
v3.24.3
Document And Entity Information - shares
 9 Months Ended
Sep. 30, 2024
Nov. 04, 2024
Document Information [Line Items]    
Entity Central Index Key 0000043196  
Entity Registrant Name GRAY TELEVISION INC  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Document Fiscal Period Focus Q3  
Document Fiscal Year Focus 2024  
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Sep. 30, 2024  
Document Transition Report false  
Entity File Number 1-13796  
Entity Incorporation, State or Country Code GA  
Entity Tax Identification Number 58-0285030  
Entity Address, Address Line One 4370 Peachtree Road, NE  
Entity Address, City or Town Atlanta  
Entity Address, State or Province GA  
Entity Address, Postal Zip Code 30319  
City Area Code 404  
Local Phone Number 504-9828  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Common Class A [Member]    
Document Information [Line Items]    
Title of 12(b) Security Class A common stock (no par value)  
Trading Symbol GTN.A  
Security Exchange Name NYSE  
Entity Common Stock, Shares Outstanding   8,842,764
Common Stock [Member]    
Document Information [Line Items]    
Title of 12(b) Security common stock (no par value)  
Trading Symbol GTN  
Security Exchange Name NYSE  
Entity Common Stock, Shares Outstanding   90,824,445
v3.24.3
Condensed Consolidated Balance Sheets (Unaudited) - USD ($)
$ in Millions
Sep. 30, 2024
Dec. 31, 2023
Assets:    
Cash $ 69 $ 21
Accounts receivable, less allowance for credit losses of $15 and $17, respectively 358 342
Current portion of program broadcast rights, net 25 18
Income tax refund receivable 6 21
Prepaid income taxes 67 18
Prepaid and other current assets 51 48
Total current assets 576 468
Property and equipment, net 1,583 1,601
Operating leases right of use asset 69 75
Broadcast licenses 5,311 5,320
Goodwill 2,642 2,643
Other intangible assets, net 321 415
Investments in broadcasting and technology companies 86 85
Deferred pension assets 20 17
Other 23 16
Total assets 10,631 10,640
Liabilities and stockholders’ equity:    
Accounts payable 17 23
Employee compensation and benefits 96 110
Accrued interest 120 63
Accrued network programming fees 80 37
Other accrued expenses 63 57
Federal and state income taxes 9 22
Current portion of program broadcast obligations 25 20
Deferred revenue 50 23
Dividends payable 15 14
Current portion of operating lease liabilities 10 11
Current portion of long-term debt 23 15
Total current liabilities 508 395
Long-term debt, less current portion and deferred financing costs 5,870 6,145
Program broadcast obligations, less current portion 1 1
Deferred income taxes 1,344 1,359
Operating lease liabilities, less current portion 62 69
Other 66 50
Total liabilities 7,851 8,019
Commitments and contingencies (Note 10)
Series A Perpetual Preferred Stock, no par value; cumulative; redeemable; designated 1,500,000 shares, issued and outstanding 650,000 shares, at each date and $650 aggregate liquidation value, at each date 650 650
Stockholders’ equity:    
Retained earnings 1,227 1,084
Accumulated other comprehensive loss, net of income tax benefit (30) (23)
Stockholders' equity before treasury stock 2,447 2,285
Total stockholders’ equity 2,130 1,971
Total liabilities and stockholders’ equity 10,631 10,640
Common Stock (No Par Value) [Member]    
Stockholders’ equity:    
Common stock 1,195 1,174
Treasury stock at cost (284) (282)
Class A Common Stock (No Par Value) [Member]    
Stockholders’ equity:    
Common stock 55 50
Treasury stock at cost $ (33) $ (32)
v3.24.3
Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($)
$ / shares in Thousands, $ in Millions
Sep. 30, 2024
Dec. 31, 2023
Accounts receivable, allowance for credit losses $ 15 $ 17
Series A Perpetual Preferred Stock, par value (in dollars per share) $ 0 $ 0
Series A Perpetual Preferred Stock, shares authorized (in shares) 1,500,000 1,500,000
Series A Perpetual Preferred Stock, shares issued (in shares) 650,000 650,000
Series A Perpetual Preferred Stock, shares outstanding (in shares) 650,000 650,000
Series A Perpetual Preferred Stock, liquidation value $ 650 $ 650
Common stock, shares authorized (in shares) 200,000,000  
Common Stock (No Par Value) [Member]    
Common stock, par value (in dollars per share) $ 0 $ 0
Common stock, shares authorized (in shares) 200,000,000 200,000,000
Common stock, shares issued (in shares) 111,166,022 107,179,827
Common stock, shares outstanding (in shares) 90,824,445 87,227,481
Treasury stock, shares (in shares) 20,341,577 19,952,346
Class A Common Stock (No Par Value) [Member]    
Common stock, par value (in dollars per share) $ 0 $ 0
Common stock, shares authorized (in shares) 25,000,000 25,000,000
Common stock, shares issued (in shares) 11,237,386 10,413,993
Common stock, shares outstanding (in shares) 8,842,764 8,162,266
Treasury stock, shares (in shares) 2,394,622 2,251,727
v3.24.3
Condensed Consolidated Statements of Operations (Unaudited) - USD ($)
shares in Millions, $ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Revenue (less agency commissions) $ 950 $ 803 $ 2,599 $ 2,417
Operating expenses before depreciation, amortization, impairment and loss (gain) on disposal of assets, net:        
Depreciation     108 106
Amortization of intangible assets     94 147
Impairment of goodwill and other intangible assets 0 43 0 43
Loss (gain) on disposal of assets, net 16 (6) 15 20
Operating expenses 700 719 2,073 2,147
Operating income 250 84 526 270
Other income (expense):        
Miscellaneous income (expense), net 2 (10) 114 (13)
Interest expense (130) (111) (363) (324)
Gain (loss) from early extinguishment of debt 6 0 (1) (3)
Income (loss) before income taxes 128 (37) 276 (70)
Income tax expense (benefit) 32 3 70 (3)
Net income (loss) 96 (40) 206 (67)
Preferred stock dividends 13 13 39 39
Net income (loss) attributable to common stockholders $ 83 $ (53) $ 167 $ (106)
Basic per share information:        
Net income (loss) attributable to common stockholders (in dollars per share) $ 0.87 $ (0.57) $ 1.76 $ (1.15)
Weighted-average shares outstanding-basic (in shares) 95 93 95 92
Diluted per share information:        
Net income (loss) attributable to common stockholders (in dollars per share) $ 0.86 $ (0.57) $ 1.74 $ (1.15)
Weighted-average shares outstanding (in shares) 97 93 96 92
Dividends declared per common share (in dollars per share) $ 0.08 $ 0.08 $ 0.24 $ 0.24
Broadcasting, Segment [Member]        
Revenue (less agency commissions) $ 924 $ 783 $ 2,531 $ 2,363
Operating expenses before depreciation, amortization, impairment and loss (gain) on disposal of assets, net:        
Cost of goods and services sold 571 557 1,719 1,664
Production Companies, Segment [Member]        
Revenue (less agency commissions) 26 20 68 54
Operating expenses before depreciation, amortization, impairment and loss (gain) on disposal of assets, net:        
Cost of goods and services sold 22 18 57 88
Other Operating Segment [Member]        
Operating expenses before depreciation, amortization, impairment and loss (gain) on disposal of assets, net:        
Corporate and administrative 24 23 80 79
Depreciation 36 36 108 106
Amortization of intangible assets $ 31 $ 48 $ 94 $ 147
v3.24.3
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Net income (loss) $ 96 $ (40) $ 206 $ (67)
Other comprehensive loss:        
Adjustment - fair value of interest rate caps (6) (3) (9) (7)
Income tax benefit (1) (1) (2) (2)
Other comprehensive loss, net (5) (2) (7) (5)
Comprehensive income (loss) $ 91 $ (42) $ 199 $ (72)
v3.24.3
Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - USD ($)
$ in Millions
Restricted Stock [Member]
Common Stock [Member]
Common Class A [Member]
Restricted Stock [Member]
Common Stock [Member]
Restricted Stock [Member]
Retained Earnings [Member]
Restricted Stock [Member]
Treasury Stock, Common [Member]
Common Class A [Member]
Restricted Stock [Member]
Treasury Stock, Common [Member]
Restricted Stock [Member]
AOCI Attributable to Parent [Member]
Restricted Stock [Member]
Restricted Stock Units (RSUs) [Member]
Common Stock [Member]
Common Class A [Member]
Restricted Stock Units (RSUs) [Member]
Common Stock [Member]
Restricted Stock Units (RSUs) [Member]
Retained Earnings [Member]
Restricted Stock Units (RSUs) [Member]
Treasury Stock, Common [Member]
Common Class A [Member]
Restricted Stock Units (RSUs) [Member]
Treasury Stock, Common [Member]
Restricted Stock Units (RSUs) [Member]
AOCI Attributable to Parent [Member]
Restricted Stock Units (RSUs) [Member]
Common Stock [Member]
Common Class A [Member]
Common Stock [Member]
Retained Earnings [Member]
Treasury Stock, Common [Member]
Common Class A [Member]
Treasury Stock, Common [Member]
AOCI Attributable to Parent [Member]
Total
Balance (in shares) at Dec. 31, 2022                             9,675,139 105,104,057   (2,130,724) (19,636,786)    
Balance at Dec. 31, 2022                             $ 45 $ 1,150 $ 1,242 $ (31) $ (278) $ (12) $ 2,116
Net income (loss)                             0 0 (31) 0 0 0 (31)
Preferred stock dividends                             0 0 (13) 0 0 0 (13)
Common stock dividends                             0 0 (7) 0 0 0 (7)
Adjustment to fair value of interest rate cap, net of tax                             $ 0 $ 0 0 $ 0 $ 0 (11) (11)
401(k) Plan (in shares)                             0 819,898   0 0    
401(k) Plan                             $ 0 $ 9 0 $ 0 $ 0 0 9
Restricted stock awards (in shares) 25,022 12,227   (92,196) (129,636)     0 247,953   0 (80,622)                  
Restricted stock awards $ 0 $ 0 $ 0 $ (1) $ (2) $ 0 $ (3) $ 0 $ 0 $ 0 $ 0 $ (1) $ 0 $ (1)              
Stock-based compensation                             $ 0 $ 2 0 $ 0 $ 0 0 2
Restricted stock awards $ (0) $ (0) (0) $ 1 $ 2 (0) 3 $ (0) $ (0) (0) $ (0) $ 1 (0) 1              
Balance (in shares) at Mar. 31, 2023                             9,700,161 106,184,135   (2,222,920) (19,847,044)    
Balance at Mar. 31, 2023                             $ 45 $ 1,161 1,191 $ (32) $ (281) (23) 2,061
Balance (in shares) at Dec. 31, 2022                             9,675,139 105,104,057   (2,130,724) (19,636,786)    
Balance at Dec. 31, 2022                             $ 45 $ 1,150 1,242 $ (31) $ (278) (12) 2,116
Net income (loss)                                         (67)
Common stock dividends                                         (22)
Balance (in shares) at Sep. 30, 2023                             10,413,993 107,179,827   (2,222,920) (19,916,072)    
Balance at Sep. 30, 2023                             $ 46 $ 1,172 1,114 $ (32) $ (281) (17) 2,002
Balance (in shares) at Mar. 31, 2023                             9,700,161 106,184,135   (2,222,920) (19,847,044)    
Balance at Mar. 31, 2023                             $ 45 $ 1,161 1,191 $ (32) $ (281) (23) 2,061
Net income (loss)                             0 0 4 0 0 0 4
Preferred stock dividends                             0 0 (13) 0 0 0 (13)
Common stock dividends                             0 0 (7) 0 0 0 (7)
Adjustment to fair value of interest rate cap, net of tax                             0 0 0 0 0 8 8
Restricted stock awards (in shares) 713,832 995,692   0 (69,028)                                
Restricted stock awards $ 0 $ 0 0 $ 0 $ 0 0 0                            
Stock-based compensation                             $ 0 $ 7 0 $ 0 $ 0 0 7
Restricted stock awards $ 0 $ 0 0 $ 0 $ 0 0 0                            
Balance (in shares) at Jun. 30, 2023                             10,413,993 107,179,827   (2,222,920) (19,916,072)    
Balance at Jun. 30, 2023                             $ 45 $ 1,168 1,175 $ (32) $ (281) (15) 2,060
Net income (loss)                             0 0 (40) 0 0 0 (40)
Preferred stock dividends                             0 0 (13) 0 0 0 (13)
Common stock dividends                             0 0 (8) 0 0 0 (8)
Adjustment to fair value of interest rate cap, net of tax                             0 0 0 0 0 (2) (2)
Stock-based compensation                             $ 1 $ 4 0 $ 0 $ 0 0 5
Balance (in shares) at Sep. 30, 2023                             10,413,993 107,179,827   (2,222,920) (19,916,072)    
Balance at Sep. 30, 2023                             $ 46 $ 1,172 1,114 $ (32) $ (281) (17) 2,002
Balance (in shares) at Dec. 31, 2023                             10,413,993 107,179,827   (2,251,727) (19,952,346)    
Balance at Dec. 31, 2023                             $ 50 $ 1,174 1,084 $ (32) $ (282) (23) 1,971
Net income (loss)                             0 0 88 0 0 0 88
Preferred stock dividends                             0 0 (13) 0 0 0 (13)
Common stock dividends                             $ 0 $ 0 (8) $ 0 $ 0 0 (8)
401(k) Plan (in shares)                             0 1,765,444   0 0    
401(k) Plan                             $ 0 $ 9 0 $ 0 $ 0 0 9
Restricted stock awards (in shares) 823,393 1,126,296   (142,895) (146,470)     0 564,793   0 (188,400)                  
Restricted stock awards $ 0 $ 0 0 $ (1) $ (1) 0 (2) $ 0 $ 0 0 $ 0 $ (1) 0 (1)              
Stock-based compensation                             $ 2 $ 4 0 $ 0 $ 0 0 6
Restricted stock awards $ (0) $ (0) (0) $ 1 $ 1 (0) 2 $ (0) $ (0) $ (0) $ (0) $ 1 $ (0) $ 1              
Balance (in shares) at Mar. 31, 2024                             11,237,386 110,636,360   (2,394,622) (20,287,216)    
Balance at Mar. 31, 2024                             $ 52 $ 1,187 1,151 $ (33) $ (284) (23) 2,050
Balance (in shares) at Dec. 31, 2023                             10,413,993 107,179,827   (2,251,727) (19,952,346)    
Balance at Dec. 31, 2023                             $ 50 $ 1,174 1,084 $ (32) $ (282) (23) 1,971
Net income (loss)                                         206
Common stock dividends                                         (24)
Balance (in shares) at Sep. 30, 2024                             11,237,386 111,166,022   (2,394,622) (20,341,577)    
Balance at Sep. 30, 2024                             $ 55 $ 1,195 1,227 $ (33) $ (284) (30) 2,130
Balance (in shares) at Mar. 31, 2024                             11,237,386 110,636,360   (2,394,622) (20,287,216)    
Balance at Mar. 31, 2024                             $ 52 $ 1,187 1,151 $ (33) $ (284) (23) 2,050
Net income (loss)                             0 0 22 0 0 0 22
Preferred stock dividends                             0 0 (13) 0 0 0 (13)
Common stock dividends                             0 0 (8) 0 0 0 (8)
Adjustment to fair value of interest rate cap, net of tax                             0 0 0 0 0 (2) (2)
Restricted stock awards (in shares) 0 529,662   0 (54,361)                                
Restricted stock awards $ 0 $ 0 0 $ 0 $ 0 0 0                            
Stock-based compensation                             $ 2 $ 4 0 $ 0 $ 0 0 6
Restricted stock awards $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0                            
Balance (in shares) at Jun. 30, 2024                             11,237,386 111,166,022   (2,394,622) (20,341,577)    
Balance at Jun. 30, 2024                             $ 54 $ 1,191 1,152 $ (33) $ (284) (25) 2,055
Net income (loss)                             0 0 96 0 0 0 96
Preferred stock dividends                             0 0 (13) 0 0 0 (13)
Common stock dividends                             0 0 (8) 0 0 0 (8)
Adjustment to fair value of interest rate cap, net of tax                             0 0 0 0 0 (5) (5)
Stock-based compensation                             $ 1 $ 4 0 $ 0 $ 0 0 5
Balance (in shares) at Sep. 30, 2024                             11,237,386 111,166,022   (2,394,622) (20,341,577)    
Balance at Sep. 30, 2024                             $ 55 $ 1,195 $ 1,227 $ (33) $ (284) $ (30) $ 2,130
v3.24.3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Millions
 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Operating activities:    
Net income (loss) $ 206 $ (67)
Adjustments to reconcile net income (loss) to net cash provided by    
Depreciation 108 106
Amortization of intangible assets 94 147
Amortization of deferred loan costs 11 10
Amortization of stock-based compensation 17 14
Amortization of program broadcast rights 20 29
Payments on program broadcast obligations (22) (30)
Deferred income taxes (12) (57)
Loss on disposal of assets, net 15 20
Gain on sale of investment (110) 0
Loss from early extinguishment of debt 1 3
Impairment of investments 0 8
Impairment of goodwill and other intangible assets 0 43
Other (2) 11
Changes in operating assets and liabilities:    
Accounts receivable, net (15) 311
Income taxes receivable or prepaid (34) 9
Other current assets (2) 3
Accounts payable (6) (29)
Employee compensation, benefits and pension cost (14) (16)
Accrued network fees and other expenses 57 9
Accrued interest 56 32
Income taxes payable (13) (2)
Deferred revenue 28 11
Net cash provided by operating activities 383 565
Investing activities:    
Acquisitions of businesses and broadcast licenses, net of cash acquired 0 (7)
Proceeds from sale of television stations 0 6
Purchases of property and equipment (103) (288)
Proceeds from asset sales 8 31
Proceeds from sale of investment 110 0
Reimbursement of development costs 0 11
Investments in broadcast, production and technology companies (4) (11)
Other (1) (1)
Net cash provided by (used in) investing activities 10 (259)
Financing activities:    
Proceeds from borrowings on long-term debt 2,025 225
Repayments of borrowings on long-term debt (2,257) (506)
Payments of common stock dividends (24) (22)
Payments of preferred stock dividends (39) (39)
Deferred and other loan costs (47) 0
Payments of taxes related to net share settlement of equity awards (3) (4)
Net cash used in financing activities (345) (346)
Net increase (decrease) in cash 48 (40)
Cash at beginning of period 21 61
Cash at end of period $ 69 $ 21
v3.24.3
Note 1 - Basis of Presentation
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block]

 

1.

Basis of Presentation

 

The accompanying condensed consolidated balance sheet of Gray Television, Inc. (and its consolidated subsidiaries, except as the context otherwise provides,“Gray,” the “Company,” “we,” “us,” and “our”) as of December 31, 2023, which was derived from the Company’s audited financial statements as of December 31, 2023, and our accompanying unaudited condensed consolidated financial statements as of September 30, 2024 and for the three and nine-month periods ended September 30, 2024 and 2023, have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to those rules and regulations, although we believe that the disclosures made are adequate to make the information not misleading. In our opinion, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. We manage our business on the basis of two operating segments: broadcasting and production companies. Unless otherwise indicated, all station rank, in-market share and television household data herein are derived from reports prepared by The Nielsen Company, LLC (“Nielsen”) and/or Comscore, Inc. (“Comscore”). While we believe this data to be accurate and reliable, we have not independently verified such data nor have we ascertained the underlying assumptions relied upon therein, and cannot guarantee the accuracy or completeness of such data. For further information, refer to the consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”). Our financial condition as of, and operating results for the three and nine-months ended September 30, 2024, are not necessarily indicative of the financial condition or results that may be expected for any future interim period or for the year ending December 31, 2024.

 

Overview. We are a multimedia company headquartered in Atlanta, Georgia. We are the nation’s largest owner of top-rated local television stations and digital assets serving 113 television markets that collectively reach approximately 36 percent of US television households. The portfolio includes 77 markets with the top-rated television station and 100 markets with the first and/or second highest rated television station, as well as the largest Telemundo Affiliate group with 43 markets totaling nearly 1.5 million Hispanic TV Households. We also own Gray Digital Media, a full-service digital agency offering national and local clients digital marketing strategies with the most advanced digital products and services. Our additional media properties include video production companies Raycom Sports, Tupelo Media Group, and PowerNation Studios, and studio production facilities Assembly Atlanta and Third Rail Studios. Gray also owns a majority interest in Swirl Films.

 

Investments in Broadcasting, Production and Technology Companies. We have investments in several television, production and technology companies. We account for all material investments in which we have significant influence over the investee under the equity method of accounting. Upon initial investment, we record equity method investments at cost. The amounts initially recognized are subsequently adjusted for our appropriate share of the net earnings or losses of the investee. We record any investee losses up to the carrying amount of the investment plus advances and loans made to the investee, and any financial guarantees made on behalf of the investee. We recognize our share in earnings and losses of the investee as miscellaneous income (expense), net in our condensed consolidated statements of operations. Investments are also increased by contributions made to and decreased by the distributions from the investee. We evaluate equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may be impaired.

 

Investments in non-public businesses that do not have readily determinable pricing, and for which we do not have control or do not exert significant influence, are carried at cost less impairments, if any, plus or minus changes in observable prices for those investments. Gains or losses resulting from changes in the carrying value of these investments are included as miscellaneous income (expense), net in our condensed consolidated statements of operations. These investments are reported together as a non-current asset on our consolidated balance sheets.

 

BMI Investment Proceeds. On February 8, 2024, we received $110 million from the sale of our investment in Broadcast Music, Inc. (“BMI”). These proceeds are included in miscellaneous income (expense), net, in our condensed consolidated statement of operations for the nine-month period ended September 30, 2024.

 

Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Our actual results could differ materially from these estimated amounts. Our most significant estimates are our allowance for credit losses in receivables, valuation of goodwill and intangible assets, amortization of program rights and intangible assets, pension costs, income taxes, employee medical insurance claims, useful lives of property and equipment and contingencies.

 

Earnings Per Share. We compute basic earnings per share by dividing net income available to common stockholders by the weighted-average number of common shares outstanding during the relevant period. The weighted-average number of common shares outstanding does not include restricted shares. These shares, although classified as issued and outstanding, are considered contingently returnable until the restrictions lapse and, in accordance with U.S. GAAP, are not included in the basic earnings per share calculation until the shares vest. Diluted earnings per share is computed by including all potentially dilutive common shares, including restricted shares, in the diluted weighted-average shares outstanding calculation, unless their inclusion would be antidilutive.

 

The following table reconciles basic weighted-average shares outstanding to diluted weighted-average shares outstanding for the three and nine-month periods ended September 30, 2024 and 2023, respectively (in millions):

 

  

Three Months Ended

  

Nine Months Ended

 
  

September 30,

  

September 30,

 
  

2024

  

2023

  

2024

  

2023

 
                 

Weighted-average shares outstanding-basic

  95   93   95   92 

Common stock equivalents for stock options and restricted stock

  2   -   1   - 

Weighted-average shares outstanding-diluted

  97   93   96   92 

 

Accumulated Other Comprehensive Loss. Our accumulated other comprehensive loss balances as of September 30, 2024 and December 31, 2023, consist of adjustments to our pension liability, the fair value of our interest rate caps and the related income tax effects. Our comprehensive income (loss) for the nine-month periods ended September 30, 2024 and 2023 consisted of the adjustment of the fair value of our pension asset and interest rate caps, net of tax, and net income. As of September 30, 2024 and December 31, 2023 the balances were as follows (in millions):

 

  

September 30,

  

December 31,

 
  

2024

  

2023

 
         

Accumulated balances of items included in accumulated other comprehensive loss:

        

Adjustment to pension asset

 $(7) $(7)

Adjustment to fair value of interest rate caps

  (32)  (23)

Income tax benefit

  (9)  (7)

Accumulated other comprehensive loss

 $(30) $(23)

 

Property and Equipment. Property and equipment are carried at cost, or in the case of acquired businesses, at fair value. Depreciation is computed principally by the straight-line method. The following table lists the components of property and equipment by major category (dollars in millions):

 

          

Estimated

 
  

September 30,

  

December 31,

  

Useful Lives

 
  

2024

  

2023

  

(in years)

 

Property and equipment, net:

            

Land

 $385  $368     

Buildings and improvements

  895   868  7to40 

Equipment

  1,077   1,082  3to20 

Construction in progress

  98   81     
   2,455   2,399     

Accumulated depreciation

  (872)  (798)    

Total property and equipment, net

 $1,583  $1,601     

 

Maintenance, repairs and minor replacements are charged to operations as incurred; major replacements and betterments are capitalized. The cost of any assets divested, sold or retired and the related accumulated depreciation are removed from the accounts at the time of disposition, and any resulting gain or loss is reflected in income or expense for the period.

 

We incurred costs to build public infrastructure within the Assembly Atlanta project. Pursuant to our Purchase and Sale Agreement with the Doraville Community Improvement District (the “CID”), we receive cash reimbursements for the transfer of specific infrastructure projects to the CID and for other construction costs previously incurred. During the three and nine-month periods ended September 30, 2024 and 2023, we received cash proceeds from the CID. The following table lists the type of proceeds received (in millions):

 

  

Three Months Ended

  

Nine Months Ended

 
  

September 30,

  

September 30,

 
  

2024

  

2023

  

2024

  

2023

 
                 
Proceeds received in advance of asset sale $-  $-  $-  $9 

Proceeds for reimbursement of development costs

  -   -   6   29 

Total proceeds received from CID

 $-  $-  $6  $38 

 

The following tables provide additional information related to (loss) gain on disposal of assets, net included in our condensed consolidated statements of operations and purchases of property and equipment included in our condensed consolidated statements of cash flows (in millions):

 

  

Three Months Ended

  

Nine Months Ended

 
  

September 30,

  

September 30,

 
  

2024

  

2023

  

2024

  

2023

 

(Loss) gain on disposal of assets, net:

                

Proceeds from sale of fixed assets

 $1  $9  $8  $31 

Net book value of assets disposed

  (2)  (26)  (8)  (51)

Non-cash (loss) gain on divestitures

  (15)  13   (15)  (1)

Securitization Facility

  -   8   -   - 

Other

  -   2   -   1 

Total

 $(16) $6  $(15) $(20)
                 

Purchase of property and equipment:

                

Recurring purchases - operations

       $64  $78 

Assembly Atlanta project

        39   210 

Total

       $103  $288 

 

Accounts Receivable and Allowance for Credit Losses. We record accounts receivable from sales and service transactions in our condensed consolidated balance sheets at amortized cost adjusted for any write-offs and net of allowance for credit losses. We are exposed to credit risk primarily through sales of broadcast and digital advertising with a variety of direct and agency-based advertising customers, retransmission consent agreements with multichannel video program distributors and program production sales and services.

 

Our allowance for credit losses is an estimate of expected losses over the remaining contractual life of our receivables based on an ongoing analysis of collectability, historical collection experience, current economic and industry conditions and reasonable and supportable forecasts. The allowance is calculated using a historical loss rate applied to the current aging analysis. We may also apply additional allowance when warranted by specific facts and circumstances. We generally write off accounts receivable balances when the customer files for bankruptcy or when all commonly used methods of collection have been exhausted.

 

On February 23, 2023, we, certain of our subsidiaries and a wholly-owned special purpose subsidiary (the “SPV”), entered into a three-year $300 million revolving accounts receivable securitization facility (the “Securitization Facility”) with Wells Fargo Bank, N.A., as administrative agent, and certain third-party financial institutions (the “Purchasers”). The Securitization Facility permits the SPV to draw up to a total of $300 million, subject to the outstanding amount of the receivables pool and other factors. The Securitization Facility matures on February 23, 2026, and is subject to customary termination events related to transactions of this type. The sale of receivables from the SPV is accounted for in the Company’s financial statements as a "true-sale" under Accounting Standards Codification ("ASC") Topic 860.

 

Under the Securitization Facility, the SPV sells to the Purchasers certain receivables, including all rights, title, and interest in the related receivables (“Sold Receivables”). The parties intend that the conveyance of accounts receivables to the Purchasers, for the ratable benefit of the Purchasers will constitute a purchase and sale of receivables and not a pledge for security. The SPV has guaranteed to each Purchaser the prompt payment of Sold Receivables, and to secure the prompt payment and performance of such guaranteed obligations, the SPV has granted a security interest to the Purchasers in all assets of the SPV. In our capacity as servicer under the Securitization Facility, we are responsible for administering and collecting receivables and have made customary representations, warranties, covenants and indemnities. We do not record a servicing asset or liability since the estimated fair value of the servicing of the receivables approximates the servicing income. We also provided a performance guarantee for the benefit of the Purchasers.

 

The Securitization Facility is subject to interest charges, at the adjusted one-month Secured Overnight Financing Rate (“SOFR”) plus a margin (100 basis points) on the amount of the outstanding facility. The SPV was required to pay an upfront fee and a commitment fee in connection with the Securitization Facility. Servicing fee income recognized during the nine-months ended September 30, 2024 and 2023, was $5 million and $3 million, respectively. The SPV is a separate legal entity with its own separate creditors who will be entitled to access the SPV’s assets before the assets become available to us. As a result, the SPV’s assets are not available to pay our creditors or any of our subsidiaries, although collections from the receivables in excess of amounts required to repay the Purchasers under the Securitization Facility and other creditors of the SPV may be remitted to us.

 

The proceeds of the Securitization Facility are classified as operating activities in our condensed consolidated statements of cash flows. Cash received from collections of Sold Receivables is used by the SPV to fund additional purchases of receivables on a revolving basis or to return all or any portion of outstanding capital of the Purchasers. Subsequent collections on the pledged receivables, which have not been sold, will be classified as operating cash flows at the time of collection.

 

The amount sold to the Purchasers was $300 million at each of September 30, 2024 and December 31, 2023, which was derecognized from the condensed consolidated balance sheets. As collateral against sold receivables, the SPV maintains a certain level of unsold receivables, which was $282 million and $296 million at September 30, 2024 and December 31, 2023, respectively. Total receivables sold under the Securitization Facility were $582 million and $550 million in the nine-months ended September 30, 2024 and 2023, respectively. Pursuant to the Securitization Facility, we recognized a charge of $8 million in the nine-month period ended September 30, 2023 representing the discount on the accounts receivable balance initially transferred to the SPV. This discount was included in our (loss) gain on disposal of assets in our condensed consolidated statements of operations.

 

The following table provides a roll-forward of the allowance for credit losses. The allowance is deducted from the amortized cost basis of accounts receivable in our condensed consolidated balance sheets (in millions):

 

  

Nine Months Ended September 30,

 
  

2024

  

2023

 

Beginning balance

 $17  $16 

(Decrease) increase in provision for credit losses

  (1)  17 

Amounts written off

  (1)  (2)

Ending balance

 $15  $31 

 

Recent Accounting Pronouncements. In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures. The purpose of this amendment was to improve disclosures related to reportable segments. The amendments in this ASU are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Currently we do not expect that the implementation of these changes will have a material effect on our financial statements.

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures. The purpose of this amendment was to enhance the transparency and decision usefulness of income tax disclosures. The amendments in this ASU are effective for annual periods beginning after December 15, 2024. Currently we do not expect that the implementation of these changes will have a material effect on our financial statements.

 

In November 2024, The FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), Disaggregation of Income Statement Expenses. The purpose of this amendment was to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions. The amendments in this Update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Currently we do not expect that the implementation of these changes will have a material impact on our financial statements.

 

In addition to the accounting standards described above, certain amounts in the condensed consolidated balance sheets and condensed consolidated statements of cash flows have also been reclassified to conform to the current presentation.

 
v3.24.3
Note 2 - Revenue
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Revenue from Contract with Customer [Text Block]

2.

Revenue

 

Revenue Recognition. We recognize revenue when we have completed a specified service and effectively transferred the control of that service to a customer in return for an amount of consideration we expect to be entitled to receive. The amount of revenue recognized is determined by the amount of consideration specified in a contract with our customers. We have elected to exclude taxes assessed by a governmental authority on transactions with our customers from our revenue. Any unremitted balance is included in current liabilities on our balance sheets.

 

Deferred Revenue. We record a deferred revenue for cash deposits received from our customers that are to be applied as payment once the performance obligation arises and is satisfied. These deposits are recorded as deferred revenue on our condensed consolidated balance sheet as advertising deposit liabilities. When we invoice our customers for completed performance obligations, we are unconditionally entitled to receive payment of the invoiced amounts. Therefore, we record invoiced amounts in accounts receivable on our balance sheet. We generally require amounts payable under advertising contracts with our political advertising customers to be paid for in advance. We record the receipt of this cash as an advertising deposit liability. Once the advertisement has been broadcast, the revenue is earned, and we record the revenue and reduce the balance in this deposit liability account. We recorded $13 million of revenue in the nine-months ended September 30, 2024 that was included in the advertising deposit liability balance as of December 31, 2023. We also record other deposit liabilities for cash received in advance for other arrangements, for which revenue is recorded as earned in future periods.

 

The following table presents our deferred revenue by type (in millions):

 

  

September30,

  

December 31,

 
  

2024

  

2023

 

Advertising deposit liabilities

 $32  $13 

Other deposit liabilities

  18   10 

Total deferred revenue

 $50  $23 

 

Disaggregation of Revenue. Revenue from our production companies segment is generated through our direct sales channel. Revenue from our broadcasting and other segment is generated through both our direct and advertising agency intermediary sales channels. The following table presents our revenue from contracts with customers disaggregated by type of service and sales channel (in millions):

 

  

Three Months Ended

  

Nine Months Ended

 
  

September 30,

  

September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Market and service type:

                

Advertising:

                

Core

 $365  $363  $1,110  $1,099 

Political

  173   26   247   46 

Total advertising

  538   389   1,357   1,145 

Retransmission consent

  369   378   1,121   1,167 

Production companies

  26   20   68   54 

Other

  17   16   53   51 

Total revenue

 $950  $803  $2,599  $2,417 
                 

Sales channel:

                

Direct

 $558  $547  $1,665  $1,664 

Advertising agency intermediary

  392   256   934   753 

Total revenue

 $950  $803  $2,599  $2,417 

 
v3.24.3
Note 3 - Acquisition and Divestitures
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Mergers, Acquisitions and Dispositions Disclosures [Text Block]

3.

Acquisition and Divestitures

 

On July 1, 2024, we completed transactions with Marquee Broadcasting, Inc. (“Marquee”) in which we sold our television stations KCWY (NBC) in the Casper, Wyoming market (DMA 198) and KGWN (CBS) in the Cheyenne, Wyoming market (DMA 194) in exchange for Marquee’s FCC permit authorizing the construction of a new television station, to be built in the Salt Lake City, Utah market (DMA 27), which will be known as KCBU. No cash or other consideration was exchanged to fulfill the terms of this exchange.

 

The value of the construction permit acquired from Marquee is $1 million, and is based upon management’s estimate of the fair value using valuation techniques including income, cost and market approaches. In determining the fair value of the acquired asset, the fair values were determined based on, among other factors, expected future revenue and cash flows, expected future growth rates and estimated discount rates.

 

The acquisition of the construction permit for station KCBU and the sale of television stations KCWY and KGWN resulted in a net non-cash loss on disposal of $14 million.

 
v3.24.3
Note 4 - Long-term Debt
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Debt Disclosure [Text Block]

4.

Long-term Debt

 

As of September 30, 2024 and December 31, 2023, long-term debt consisted of obligations under our Senior Credit Facility (as defined below), our 5.875% senior notes due 2026 (the “2026 Notes”), our 7.0% senior notes due 2027 (the “2027 Notes”), our 10.5% senior notes due 2029 (the “2029 Notes”), our 4.75% senior notes due 2030 (the “2030 Notes”) and our 5.375% notes due 2031 (the “2031 Notes”), as follows (in millions):

 

  

September 30,

  

December 31,

 
  

2024

  

2023

 

Long-term debt:

        

2019 Senior Credit Facility:

        

2019 Term Loan (matures January 2, 2026)

 $-  $1,190 

2021 Term Loan (matures December 1, 2028)

  1,439   1,470 

2024 Term Loan (matures June 4, 2029)

  499   - 

2026 Notes (matures July 15, 2026)

  10   700 

2027 Notes (matures May 15, 2027)

  671   750 

2029 Notes (matures July 15, 2029)

  1,250   - 

2030 Notes (matures October 15, 2030)

  800   800 

2031 Notes (matures November 15, 2031)

  1,300   1,300 

Total outstanding principal, including current portion

  5,969   6,210 

Unamortized deferred loan costs - Senior Credit Facility

  (38)  (18)

Unamortized deferred loan costs - 2026 Notes

  -   (3)

Unamortized deferred loan costs - 2027 Notes

  (4)  (6)

Unamortized deferred loan costs - 2029 Notes

  (13)  - 

Unamortized deferred loan costs - 2030 Notes

  (8)  (10)

Unamortized deferred loan costs - 2031 Notes

  (13)  (14)

Unamortized premium - 2026 Notes

  -   1 

Less current portion

  (23)  (15)

Long-term debt, less current portion and deferred financing costs

 $5,870  $6,145 
         

Borrowing availability under Revolving Credit Facility

 $674  $494 

 

2024 Refinancing Activities. On June 3, 2024, we issued $1.25 billion in aggregate principal amount of 10.5% Senior Secured First Lien Notes due 2029 (the “2029 Notes”) pursuant to an indenture, dated as of June 3, 2024, between us, the guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee and collateral agent (the “2029 Notes Indenture”). The 2029 Notes were issued at par. Interest in the 2029 Notes accrues from June 3, 2024, and is payable semiannually, on January 15 and July 15 of each year, beginning on January 15, 2025.

 

The net proceeds from the 2029 Notes were used, together with the net proceeds from a $500 million tranche F term loan (the “2024 Term Loan”) and a $150 million draw under our Revolving Credit Facility (as defined below), both under the Senior Credit Facility (as defined below), and cash on hand, to pre-pay our $1.2 billion tranche E 2019 Term Loan under the Senior Credit Facility; repurchase in a tender offer $690 million of face value of our outstanding 5.875% 2026 Notes; and pay all costs and accrued interest in connection with the offering.

 

The 2029 Notes and related guarantees are our senior secured first lien obligations. The 2029 Notes rank:

 

●

equally in right of payment with all of our existing and future pari passu senior debt; senior in right of payment to all of our existing and future subordinated debt;

●

effectively senior to all of our existing and future unsecured debt or junior lien debt to the extent of the value of the collateral securing the 2029 Notes;

●

effectively subordinated to any existing and future debt that is secured by a lien on any assets not constituting collateral securing the 2029 Notes to the extent of the value of such assets; and

●

structurally subordinated to any existing and future debt and liabilities of our subsidiaries that do not guarantee the 2029 Notes.

 

On June 4, 2024, we entered into a third amendment to the Fifth Amended and Restated Credit Agreement (the “Third Amendment” and as amended, including by the Third Amendment, the “Senior Credit Facility”), dated as of December 1, 2021.

 

The Third Amendment, among other things, provided for (i) the new $500 million 2024 Term Loan and (ii) increased aggregate commitments under our existing $552.5 million revolving credit facility (the “Revolving Credit Facility”) that matures December 31, 2027 by $127.5 million, and a concurrent termination of the separate commitments under a $72.5 million tranche of revolving commitments that were to mature on December 1, 2026, resulting in aggregate commitments under the Revolving Credit Facility of $680 million.

 

The 2024 Term Loan bears interest, at our option, at either the Secured Overnight Financing Rate (“SOFR”) plus an applicable margin or the Base Rate plus an applicable margin. “Base Rate” is defined as the greatest of (i) the administrative agent’s prime rate, (ii) the overnight federal funds rate plus 0.50% and (iii) Adjusted Term SOFR (as defined in the Senior Credit Facility) for a one-month tenor in effect on such day plus 1.0%. The applicable margin with respect to the 2024 Term Loan is 5.25% for all SOFR borrowings and 4.25% for all Base Rate borrowings. The 2024 Term Loan also requires us to make quarterly principal reductions of $1.25 million beginning September 30, 2024. To the extent all or any portion of the 2024 Term Loan is repaid or prepaid prior to the one year anniversary of the effective date of the Third Amendment, a prepayment fee equal to 1.0% of the amount of the 2024 Term Loan being repaid or prepaid will apply.

 

The Revolving Credit Facility bears interest, at our option, based on SOFR plus 1.75%-2.75% or the Base Rate plus 0.75%-1.75%, in each case based on a first lien leverage ratio (the “First Lien Leverage Ratio”) as set forth in the Senior Credit Facility. The Company is required to pay a commitment fee on the average daily unused portion of the Revolving Credit Facility, which rate may range from 0.375% to 0.5%, based on the First Lien Leverage Ratio.

 

The costs associated with these 2024 refinancing activities totaled $47 million, of which $45 million were capitalized as deferred loan costs, to be amortized over the lives of the respective debt obligations. Our loss from the early extinguishment of debt for these 2024 refinancing activities was $10 million, which was composed of expensing of the remaining $4 million of costs and the write-off of $6 million of unamortized deferred loan costs and premiums related to the debts that were pre-paid.

 

Repurchase of Debt and Subsequent Event. On May 6, 2024, our Board of Directors authorized us to use up to $250 million of available liquidity to repurchase our outstanding indebtedness through December 31, 2025. The extent of such repurchases, including the amount and timing of any repurchases, will depend on general market conditions, regulatory requirements, alternative investment opportunities and other considerations. This repurchase program does not require us to repurchase a minimum amount of debt, and it may be modified, suspended or terminated at any time without prior notice. During the nine-months ended September 30, 2024, we used $72 million of cash to repurchase and retire $79 million of the face value of our outstanding 2027 Notes on the open market, resulting in a $6 million gain from early extinguishment of debt. In addition, during the three and nine-months ended September 30, 2024, we used $14 million of cash to repurchase and retire $15 million of the face value of our 2021 Term Loans on the open market, resulting in a $1 million gain from early extinguishment of debt. At September 30, 2024, we were obligated to repurchase an additional $7 million of face value of our 2021 Term Loans on the open market for $6 million, and this transaction will be completed later in the fourth quarter of 2024, using cash on hand.

 

On September 25, 2024, we entered into an agreement with a lender to purchase a portion of our 2021 Term Loans. As a result of this agreement, the lender has purchased $32 million of the face value of our outstanding 2021 Term Loans for $30 million, under this plan. We plan to repurchase and retire these portions of our 2021 Term Loan later in the fourth quarter of 2024 using cash on hand.

 

Interest Rate Caps. On February 23, 2023, we entered into two interest rate caps pursuant to an International Swaps and Derivatives Association Master Agreement (the “ISDA Master Agreement”) with two counterparties, Wells Fargo Bank, NA and Truist Bank, respectively. On June 25, 2024, we amended the notional amount of the interest rate caps in order to better match the outstanding amounts of the related outstanding indebtedness. At September 30, 2024, the caps had a combined notional value of approximately $2 billion and mature on December 31, 2025. The interest rate caps protect us against adverse fluctuations in interest rates by reducing our exposure to variability in cash flows on a portion of our variable-rate debt. The interest rate caps are designated as cash flow hedges of our risk of changes in our cash flows attributable to changes in 1-month SOFR on our outstanding variable-rate debt in accordance with ASC 815. We elected to apply the optional expedient in ASC 848, Reference Rate Reform, that enabled us to consider the amended swaps a continuation of the existing contracts. As a result, the transition did not have an impact on our hedge accounting or a material impact to our financial statements.

 

The interest rate caps, as amended, effectively limit the annual interest charged on our 2021 Term Loan and our 2024 Term Loan to a maximum of 1-month Term SOFR of 4.96% and 5.047%. We are required to pay aggregate fees in connection with the interest rate caps of approximately $34 million that is due and payable at maturity on December 31, 2025. On the initial designation date, we recognized an asset and corresponding liability for the deferred premium payable equal to $34 million. The asset is amortized into interest expense straight-line over the term of the hedging relationship. At September 30, 2024 and December 31, 2023, the recorded value of the asset was $15 million and $24 million, net of accumulated amortization, respectively. At September 30, 2024 and December 31, 2023, the fair value of the derivative liability was $32 million and $23 million, respectively. We present the deferred premium, the asset, and the fair value of the derivative, net within other non-current liabilities in our condensed consolidated balance sheets.

 

The ISDA Master Agreement, together with its related schedules, contain customary representations, warranties and covenants. The interest rate caps were not entered into for speculative trading purposes. Changes in the fair value of the interest rate caps are reported as a component of other comprehensive income. Actual gains and losses are reclassified into earnings in the same period or periods during which the hedged transaction affects earnings and are presented in the same income statement line item as the earnings effect of the hedged transaction. Gains and losses on the derivative instrument representing hedge components excluded from the assessment of effectiveness are recognized currently in earnings and are presented in the same line of the income statement for the hedged item. We recognized $9 million and $7 million, respectively, of amortization expense for the asset during the nine-months ended September 30, 2024 and 2023, which is included as a component of cash flows from operating activities in our condensed consolidated statements of cash flows. Cash flows received from the counterparties pursuant to the interest rate caps are included as components of cash flows from financing activities in our condensed consolidated statements of cash flows. During the nine-months ended September 30, 2024 and 2023, we received $6 million and $2 million, respectively, of cash payments from the counterparties that we reclassified as reductions of interest expense from the interest rate caps in our condensed consolidated statements of operations.

 

For all of our interest bearing obligations, we made interest payments of approximately $257 million and $284 million during the nine-months ended September 30, 2024 and 2023, respectively. During the nine-months ended September 30, 2024 and 2023, we capitalized $1 million and $20 million of interest payments, respectively, related to the Assembly Atlanta project.

 

As of September 30, 2024, the aggregate minimum principal maturities of our long term debt for the remainder of 2024 and the succeeding 5 years were as follows (in millions):

 

  

Minimum Principal Maturities

 

Year

 

Senior Credit

Facility

  

2026 Notes

  

2027 Notes

  

2029 Notes

  

2030 Notes

  

2031 Notes

  

Total

 

Remainder of 2024

 $8  $-  $-  $-  $-  $-  $8 

2025

  20   -   -   -   -   -   20 

2026

  20   10   -   -   -   -   30 

2027

  20   -   671   -   -   -   691 

2028

  1,399   -   -   -   -   -   1,399 

2029

  471   -   -   1,250   -   -   1,721 

Thereafter

  -   -   -   -   800   1,300   2,100 

Total

 $1,938  $10  $671  $1,250  $800  $1,300  $5,969 

 

As of September 30, 2024, there were no significant restrictions on the ability of our subsidiaries to distribute cash to us or to the guarantor subsidiaries. The Senior Credit Facility contains affirmative and restrictive covenants with which we must comply. The 2026 Notes, the 2027 Notes, the 2029 Notes, the 2030 Notes and the 2031 Notes also include covenants with which we must comply.

 
v3.24.3
Note 5 - Fair Value Measurement
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Fair Value Disclosures [Text Block]

5.

Fair Value Measurement

 

We measure certain assets and liabilities at fair value, which are classified by the FASB Codification within the fair value hierarchy as Level 1, 2, or 3, on the basis of whether the measurement employs observable or unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s own assumptions and consider information about readily available market participant assumptions.

 

 

●

Level 1: Quoted prices for identical instruments in active markets

 

●

Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets

 

●

Level 3: Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable

 

Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. The use of different market assumptions or methodologies could have a material effect on the fair value measurement.

 

The carrying amounts of accounts receivable, prepaid and other current assets, accounts payable, employee compensation and benefits, accrued interest, other accrued expenses, and deferred revenue approximate fair value at both September 30, 2024 and December 31, 2023.

 

As of September 30, 2024 and December 31, 2023, the carrying amount of our long-term debt was $5.9 billion and $6.2 billion, respectively, and the fair value was $5.1 billion and $5.6 billion, respectively. The fair value of our long-term debt is based on observable estimates provided by third party financial professionals as of each date, and as such is classified within Level 2 of the fair value hierarchy.
v3.24.3
Note 6 - Stockholders' Equity
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Equity [Text Block]

6.

Stockholders’ Equity

 

We are authorized to issue 245 million shares in total of all classes of stock consisting of 25 million shares of Class A common stock, 200 million shares of common stock, and 20 million shares of “blank check” preferred stock for which our Board of Directors has the authority to determine the rights, powers, limitations and restrictions. The rights of our common stock and Class A common stock are identical, except that our Class A common stock has 10 votes per share and our common stock has one vote per share.

 

Our common stock and Class A common stock are entitled to receive cash dividends if declared, on an equal per-share basis. The Board of Directors declared a quarterly cash dividend of $0.08 per share on our common stock and Class A common stock to shareholders of record during March, June, and September of 2024 and 2023, payable on the last business day of March, June, and September, 2024 and 2023. The total common stock and Class A common stock dividends declared and paid during each of the nine-month periods ended September 30, 2024 and 2023 were $24 million and $22 million, respectively.

 

Under our various employee benefit plans, we may, at our discretion, issue authorized and unissued shares, or previously issued shares held in treasury, of our Class A common stock or common stock. As of September 30, 2024, we had reserved 12.7 million shares and 1.2 million shares of our common stock and Class A common stock, respectively, for future issuance under various employee benefit plans.
v3.24.3
Note 7 - Retirement Plans
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Retirement Benefits [Text Block]

7.

Retirement Plans

 

The components of our net periodic pension benefit are included in miscellaneous income (expense), net in our condensed consolidated statements of operations. During the nine-months ended September 30, 2024, the amount recorded as a benefit was not material.

 

During the nine-month period ended September 30, 2024, we contributed $22 million in matching cash contributions, and shares of our common stock valued at $9 million for our 2023 discretionary profit-sharing contributions, to the 401(k) Plan. The discretionary profit-sharing contribution was recorded as an expense in 2023 and accrued as of December 31, 2023. Based upon employee participation as of September 30, 2024, during the remainder of 2024, we expect to contribute approximately $6 million of matching cash contributions to this plan.

 
v3.24.3
Note 8 - Stock-based Compensation
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Share-Based Payment Arrangement [Text Block]

8.

Stock-based Compensation

 

We recognize compensation expense for stock-based payment awards made to our employees, consultants and directors. The following table provides our stock-based compensation expense and related income tax benefit for the three and nine-month periods ended September 30, 2024 and 2023 (in millions):

 

  

Three Months Ended

  

Nine Months Ended

 
  

September 30,

  

September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Stock-based compensation expense, gross

 $5  $5  $17  $14 

Income tax benefit at our statutory rate associated with share-based compensation

  (1)  (1)  (4)  (4)

Stock-based compensation expense, net

 $4  $4  $13  $10 

 

All shares of Class A common stock and common stock underlying outstanding restricted stock units and performance awards are counted as issued at target levels under the 2022 EICP for purposes of determining the number of shares available for future issuance.

 

A summary of restricted Class A common stock, common stock and restricted stock units activity for the nine-month periods ended September 30, 2024 and 2023 is as follows:

 

  

Nine Months Ended

 
  

September 30, 2024

  

September 30, 2023

 
      

Weighted-

      

Weighted-

 
      

average

      

average

 
      

Grant Date

      

Grant Date

 
  

Number of

  

Fair Value

  

Number of

  

Fair Value

 
  

Shares

  

Per Share

  

Shares

  

Per Share

 

Restricted stock - common:

                

Outstanding - beginning of period (1)

  1,467,936  $12.17   997,745  $20.62 

Granted(1)

  1,785,958  $7.47   1,007,919  $8.15 

Vested

  (480,412) $11.23   (461,953) $20.27 

Forfeited

  (130,000) $8.10   -  $- 

Outstanding - end of period (1)

  2,643,482  $9.36   1,543,711  $12.58 
                 

Restricted stock - Class A common:

                

Outstanding - beginning of period (1)

  1,148,233  $12.37   677,238  $19.36 

Granted(1)

  823,393  $8.25   738,854  $8.34 

Vested

  (318,733) $13.17   (203,986) $18.76 

Outstanding - end of period (1)

  1,652,893  $10.16   1,212,106  $12.74 
                 

Restricted stock units - common stock:

                

Outstanding - beginning of period

  587,168  $11.50   274,145  $23.60 

Granted

  1,229,390  $5.72   587,168  $11.50 

Vested

  (564,793) $11.50   (247,953) $23.64 

Forfeited

  (22,375) $11.50   (26,192) $23.15 

Outstanding - end of period

  1,229,390  $5.72   587,168  $11.50 

 

(1)

For awards subject to future performance conditions, amounts assume target performance.

 
v3.24.3
Note 9 - Leases
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Leases, Lessee Disclosure [Text Block]

9.

Leases

 

We determine if an arrangement is a lease at its inception. Operating lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. We generally use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future payments, because the implicit rate of the lease is generally not known. Right-of-use (“ROU”) assets related to our operating lease liabilities are measured at lease commencement based on the initial measurement of the lease liability, plus any prepaid lease payments and less any lease incentives. Our lease terms that are used in determining our operating lease liabilities at lease commencement may include options to extend or terminate the leases when it is reasonably certain that we will exercise such options. We amortize our ROU assets as operating lease expense generally on a straight-line basis over the lease term and classify both the lease amortization and imputed interest as operating expenses. We have lease agreements with lease and non-lease components, and in such cases, we generally account for the components separately with only the lease component included in the calculation of the ROU asset and lease liability.

 

We have operating leases that primarily relate to certain of our facilities, data centers and vehicles. As of September 30, 2024, our operating leases substantially have remaining terms of one year to 99 years, some of which include options to extend and/or terminate the leases. We do not recognize lease assets and lease liabilities for any lease with an original lease term of less than one year.

 

Cash flow movements related to our lease activities are included in other assets and accounts payable and other liabilities as presented in net cash provided by operating activities in our condensed consolidated statement of cash flows.

 

As of September 30, 2024, the weighted-average remaining term of our operating leases was approximately 9.1 years. The weighted-average discount rate used to calculate the values associated with our operating leases was 6.63%. The table below describes the nature of lease expense and classification of operating lease expense recognized in the three and nine-months ended September 30, 2024 and 2023, respectively (in millions):

 

  

Three Months Ended

  

Nine Months Ended

 
  

September 30,

  

September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Lease expense

                

Operating lease expense

 $4  $4  $12  $13 

Short-term lease expense

  1   1   3   4 

Total lease expense

 $5  $5  $15  $17 

 

The maturities of operating lease liabilities as of September 30, 2024, for the remainder of 2024 and the succeeding years were as follows (in millions):

 

Year ending December 31,

 

Operating Leases

 

Remainder of 2024

 $3 

2025

  14 

2026

  13 

2027

  11 

2028

  8 

Thereafter

  48 

Total lease payments

  97 

Less: Imputed interest

  (25)

Present value of lease liabilities

 $72 

 

As a Lessor. We lease or sublease our owned or leased production facilities, land, towers and office space through operating leases with third parties. Payments received associated with these leases consist of fixed and variable payments. Fixed payments are received for the rental of space including fixed rate rent escalations over the applicable term of the lease agreements. Variable payments are received for short-term rental of space, variable rent escalations and reimbursement of operating costs related to the asset leased or subleased.

 

We recognize revenue from fixed payments on a straight-line basis over the applicable term of the lease agreements, whose lives range between one and 42 years. The excess of straight-line revenue recognized over the fixed payments received is recorded as deferred rent receivable in other assets on our condensed consolidated balance sheets. The deferred rent receivable balance was $8 million and $6 million as of September 30, 2024 and December 31, 2023, respectively. We recognize revenue from variable payments each period as earned.

 

Cash flow activities related to our lease activities for assets we lease to third parties are included in other assets and accounts receivable as presented in net cash provided by operating activities in our condensed consolidated statement of cash flows.

 

The following table describes the nature of our lease revenue and classification of operating lease revenue recognized in the three and nine-months ended September 30, 2024 and 2023 (in millions):

 

  

Three Months Ended

  

Nine Months Ended

 
  

September 30,

  

September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Operating lease revenue:

                

Fixed lease revenue

 $5  $2  $16  $2 

Variable lease revenue

  4   4   12   11 

Total operating lease revenue

 $9  $6  $28  $13 

 

The following table presents our future minimum rental receipts for non-cancelable leases and subleases as of September 30, 2024 (in millions):

 

Year ending December 31,

 

Operating Leases

 

Remainder of 2024

 $7 

2025

  25 

2026

  24 

2027

  23 

2028

  23 

Thereafter

  249 

Total lease receipts

 $351 

 
v3.24.3
Note 10 - Commitments and Contingencies
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Commitments and Contingencies Disclosure [Text Block]

10.

Commitments and Contingencies

 

We are and expect to continue to be subject to legal actions, proceedings and claims that arise in the normal course of our business. In the opinion of management, the amount of ultimate liability, if any, with respect to these actions, proceedings and claims will not materially affect our financial position, results of operations or cash flows, although legal proceedings are subject to inherent uncertainties, and unfavorable rulings or events could have a material adverse impact on our financial position, results of operations or cash flows.

 
v3.24.3
Note 11 - Goodwill and Intangible Assets
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Goodwill and Intangible Assets Disclosure [Text Block]

11.

Goodwill and Intangible Assets

 

A summary of changes in our goodwill and other intangible assets, on a net basis, for the nine-months ended September 30, 2024 is as follows (in millions):

 

  

Net Balance at

  

Disposals

      

Net Balance at

 
  

December 31,

  

And

      

September 30,

 
  

2023

  

Adjustments, Net

  

Amortization

  

2024

 
                 

Broadcast licenses

 $5,320  $(9) $-  $5,311 

Goodwill

  2,643   (1)  -   2,642 

Finite-lived intangible assets

  415   -   (94)  321 

Total intangible assets net of accumulated amortization

 $8,378  $(10) $(94) $8,274 

 

 

A summary of the changes in our goodwill, on a gross basis, for the nine-months ended September 30, 2024, is as follows (in millions):

 

  

As of

  

Disposals

  

As of

 
  

December 31,

  

And

  

September 30,

 
  

2023

  

Adjustments, Net

  

2024

 
             

Goodwill, gross

 $2,742  $(1) $2,741 

Accumulated goodwill impairment

  (99)  -   (99)

Goodwill, net

 $2,643  $(1) $2,642 

 

 

As of September 30, 2024 and December 31, 2023, our intangible assets and related accumulated amortization consisted of the following (in millions):

 

  

As of September 30, 2024

  

As of December 31, 2023

 
      

Accumulated

          

Accumulated

     
  

Gross

  

Amortization

  

Net

  

Gross

  

Amortization

  

Net

 

Intangible assets not currently subject to amortization:

                        

Broadcast licenses

 $5,365  $(54) $5,311  $5,374  $(54) $5,320 

Goodwill

  2,642   -   2,642   2,643   -   2,643 
  $8,007  $(54) $7,953  $8,017  $(54) $7,963 
                         

Intangible assets subject to amortization:

                        

Network affiliation agreements

 $216  $(151) $65  $216  $(126) $90 

Other finite lived intangible assets

  992   (736)  256   992   (667)  325 
  $1,208  $(887) $321  $1,208  $(793) $415 
                         

Total intangibles

 $9,215  $(941) $8,274  $9,225  $(847) $8,378 

 

Amortization expense for the nine-month periods ended September 30, 2024 and 2023 was $94 million and $147 million, respectively. Based on the intangible assets subject to amortization as of September 30, 2024, we expect that amortization expense for the remainder of 2024 would be approximately $31 million, and, for the succeeding five years, amortization expense will be approximately as follows: 2025, $113 million; 2026, $83 million; 2027, $47 million; 2028, $13 million; and 2029, $3 million. If and when acquisitions and dispositions occur in the future, actual amounts may vary materially from these estimates.

 
v3.24.3
Note 12 - Income Taxes
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

12.

Income Taxes

 

For the three and nine-month periods ended September 30, 2024 and 2023, our income tax expense and effective income tax rates were as follows (dollars in millions):

 

  

Three Months Ended

  

Nine Months Ended

 
  

September 30,

  

September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Income tax expense (benefit)

 $32  $3  $70  $(3)

Effective income tax rate

  25%  (8)%  25%  4%

 

We estimate our differences between taxable income or loss and recorded income or loss on an annual basis. Our tax provision for each quarter is based upon these full year projections, which are revised each reporting period. These projections incorporate estimates of permanent differences between U.S. GAAP income or loss and taxable income or loss, state income taxes and adjustments to our liability for unrecognized tax benefits to adjust our statutory federal income tax rate of 21% to our effective income tax rate. For the nine-month period ended September 30, 2024, these estimates increased or decreased our statutory Federal income tax rate to our effective income tax rate of 25% as follows: state income taxes added 5%, permanent differences between our U.S. GAAP income and taxable income added 1% and changes to our reserve accounts reduced our rate by 2%. For the nine-month period ended September 30, 2023, these estimates increased or decreased our statutory federal income tax rate to our effective income tax rate of 4% as follows: state income taxes added 3%, permanent differences between our U.S. GAAP income and taxable income reduced our rate by 7% and discrete items further reduced our rate by 13%.

 

During the nine-months ended September 30, 2024, we made $130 million of federal and state income tax payments, net of refunds. During the fourth quarter of 2024, we anticipate making income tax payments, net refunds, of approximately $3 million. As of September 30, 2024, we have an aggregate of approximately $282 million of various state operating loss carryforwards, of which we expect that approximately $201 million will not be utilized due to section 382 limitations and those that will expire prior to utilization. After applying our state effective tax rate, this amount is included in our valuation allowance for deferred tax assets.

 
v3.24.3
Note 13 - Segment Information
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

13.

Segment information

 

We operate in two business segments: broadcasting and production companies. The broadcasting segment operates television stations in local markets in the U.S. The production companies segment includes the production of television content and our productions facilities, primarily Assembly Atlanta. Costs identified as other are primarily corporate and administrative expenses. The following tables present certain financial information concerning our operating segments (in millions):

 

      

Production

         

As of and for the nine months ended September 30, 2024:

 

Broadcasting

  

Companies

  

Other

  

Consolidated

 
                 

Revenue (less agency commissions)

 $2,531  $68  $-  $2,599 

Operating expenses before depreciation, amortization, impairment and loss on disposal of assets, net:

  1,719   57   80   1,856 

Depreciation and amortization

  186   14   2   202 

Loss on disposal of assets, net

  15   -   -   15 

Operating expenses

  1,920   71   82   2,073 

Operating income (loss)

 $611  $(3) $(82) $526 
                 

Interest expense

 $-  $-  $363  $363 

Capital expenditures (excluding business combinations)

 $46  $57  $-  $103 

Goodwill

 $2,614  $28  $-  $2,642 

Total assets

 $9,840  $664  $127  $10,631 
                 

For the nine months ended September 30, 2023:

                
                 

Revenue (less agency commissions)

 $2,363  $54  $-  $2,417 

Operating expenses before depreciation, amortization and (gain) loss on disposal of assets, net:

  1,664   88   79   1,831 

Depreciation and amortization

  241   9   3   253 

Impairment of goodwill and other intangible assets

  -   43   -   43 

Loss on disposal of assets, net

  18   2   -   20 

Operating expenses

  1,923   142   82   2,147 

Operating income (loss)

 $440  $(88) $(82) $270 
                 

Interest expense

 $-  $-  $324  $324 

Capital expenditures (excluding business combinations)

 $83  $201  $4  $288 
                 

As of December 31, 2023:

                
                 

Goodwill

 $2,615  $28  $-  $2,643 

Total assets

 $9,897  $658  $85  $10,640 

 
v3.24.3
Insider Trading Arrangements
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2024
Insider Trading Arr Line Items    
Insider Trading Policies and Procedures Not Adopted [Text Block]  

Item 5.

Other Information

 

None of the Company’s directors or officers adopted, modified or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement, as defined in Item 408 of Regulation S-K, during the Company’s fiscal quarter ended September 30, 2024.
Rule 10b5-1 Arrangement Adopted [Flag] false  
Rule 10b5-1 Arrangement Terminated [Flag] false  
Non-Rule 10b5-1 Arrangement Terminated [Flag] false  
Non-Rule 10b5-1 Arrangement Adopted [Flag] false  
v3.24.3
Significant Accounting Policies (Policies)
 9 Months Ended
Sep. 30, 2024
Accounting Policies [Abstract]  
Investment, Policy [Policy Text Block]

Investments in Broadcasting, Production and Technology Companies. We have investments in several television, production and technology companies. We account for all material investments in which we have significant influence over the investee under the equity method of accounting. Upon initial investment, we record equity method investments at cost. The amounts initially recognized are subsequently adjusted for our appropriate share of the net earnings or losses of the investee. We record any investee losses up to the carrying amount of the investment plus advances and loans made to the investee, and any financial guarantees made on behalf of the investee. We recognize our share in earnings and losses of the investee as miscellaneous income (expense), net in our condensed consolidated statements of operations. Investments are also increased by contributions made to and decreased by the distributions from the investee. We evaluate equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may be impaired.

 

Investments in non-public businesses that do not have readily determinable pricing, and for which we do not have control or do not exert significant influence, are carried at cost less impairments, if any, plus or minus changes in observable prices for those investments. Gains or losses resulting from changes in the carrying value of these investments are included as miscellaneous income (expense), net in our condensed consolidated statements of operations. These investments are reported together as a non-current asset on our consolidated balance sheets.

 

BMI Investment Proceeds. On February 8, 2024, we received $110 million from the sale of our investment in Broadcast Music, Inc. (“BMI”). These proceeds are included in miscellaneous income (expense), net, in our condensed consolidated statement of operations for the nine-month period ended September 30, 2024.

 
Use of Estimates, Policy [Policy Text Block]

Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Our actual results could differ materially from these estimated amounts. Our most significant estimates are our allowance for credit losses in receivables, valuation of goodwill and intangible assets, amortization of program rights and intangible assets, pension costs, income taxes, employee medical insurance claims, useful lives of property and equipment and contingencies.

 
Earnings Per Share, Policy [Policy Text Block]

Earnings Per Share. We compute basic earnings per share by dividing net income available to common stockholders by the weighted-average number of common shares outstanding during the relevant period. The weighted-average number of common shares outstanding does not include restricted shares. These shares, although classified as issued and outstanding, are considered contingently returnable until the restrictions lapse and, in accordance with U.S. GAAP, are not included in the basic earnings per share calculation until the shares vest. Diluted earnings per share is computed by including all potentially dilutive common shares, including restricted shares, in the diluted weighted-average shares outstanding calculation, unless their inclusion would be antidilutive.

 

The following table reconciles basic weighted-average shares outstanding to diluted weighted-average shares outstanding for the three and nine-month periods ended September 30, 2024 and 2023, respectively (in millions):

 

  

Three Months Ended

  

Nine Months Ended

 
  

September 30,

  

September 30,

 
  

2024

  

2023

  

2024

  

2023

 
                 

Weighted-average shares outstanding-basic

  95   93   95   92 

Common stock equivalents for stock options and restricted stock

  2   -   1   - 

Weighted-average shares outstanding-diluted

  97   93   96   92 

 
Comprehensive Income, Policy [Policy Text Block]

Accumulated Other Comprehensive Loss. Our accumulated other comprehensive loss balances as of September 30, 2024 and December 31, 2023, consist of adjustments to our pension liability, the fair value of our interest rate caps and the related income tax effects. Our comprehensive income (loss) for the nine-month periods ended September 30, 2024 and 2023 consisted of the adjustment of the fair value of our pension asset and interest rate caps, net of tax, and net income. As of September 30, 2024 and December 31, 2023 the balances were as follows (in millions):

 

  

September 30,

  

December 31,

 
  

2024

  

2023

 
         

Accumulated balances of items included in accumulated other comprehensive loss:

        

Adjustment to pension asset

 $(7) $(7)

Adjustment to fair value of interest rate caps

  (32)  (23)

Income tax benefit

  (9)  (7)

Accumulated other comprehensive loss

 $(30) $(23)

 
Property, Plant and Equipment, Policy [Policy Text Block]

Property and Equipment. Property and equipment are carried at cost, or in the case of acquired businesses, at fair value. Depreciation is computed principally by the straight-line method. The following table lists the components of property and equipment by major category (dollars in millions):

 

          

Estimated

 
  

September 30,

  

December 31,

  

Useful Lives

 
  

2024

  

2023

  

(in years)

 

Property and equipment, net:

            

Land

 $385  $368     

Buildings and improvements

  895   868  7to40 

Equipment

  1,077   1,082  3to20 

Construction in progress

  98   81     
   2,455   2,399     

Accumulated depreciation

  (872)  (798)    

Total property and equipment, net

 $1,583  $1,601     

 

Maintenance, repairs and minor replacements are charged to operations as incurred; major replacements and betterments are capitalized. The cost of any assets divested, sold or retired and the related accumulated depreciation are removed from the accounts at the time of disposition, and any resulting gain or loss is reflected in income or expense for the period.

 

We incurred costs to build public infrastructure within the Assembly Atlanta project. Pursuant to our Purchase and Sale Agreement with the Doraville Community Improvement District (the “CID”), we receive cash reimbursements for the transfer of specific infrastructure projects to the CID and for other construction costs previously incurred. During the three and nine-month periods ended September 30, 2024 and 2023, we received cash proceeds from the CID. The following table lists the type of proceeds received (in millions):

 

  

Three Months Ended

  

Nine Months Ended

 
  

September 30,

  

September 30,

 
  

2024

  

2023

  

2024

  

2023

 
                 
Proceeds received in advance of asset sale $-  $-  $-  $9 

Proceeds for reimbursement of development costs

  -   -   6   29 

Total proceeds received from CID

 $-  $-  $6  $38 

 

The following tables provide additional information related to (loss) gain on disposal of assets, net included in our condensed consolidated statements of operations and purchases of property and equipment included in our condensed consolidated statements of cash flows (in millions):

 

  

Three Months Ended

  

Nine Months Ended

 
  

September 30,

  

September 30,

 
  

2024

  

2023

  

2024

  

2023

 

(Loss) gain on disposal of assets, net:

                

Proceeds from sale of fixed assets

 $1  $9  $8  $31 

Net book value of assets disposed

  (2)  (26)  (8)  (51)

Non-cash (loss) gain on divestitures

  (15)  13   (15)  (1)

Securitization Facility

  -   8   -   - 

Other

  -   2   -   1 

Total

 $(16) $6  $(15) $(20)
                 

Purchase of property and equipment:

                

Recurring purchases - operations

       $64  $78 

Assembly Atlanta project

        39   210 

Total

       $103  $288 

 
Credit Loss, Financial Instrument [Policy Text Block]

Accounts Receivable and Allowance for Credit Losses. We record accounts receivable from sales and service transactions in our condensed consolidated balance sheets at amortized cost adjusted for any write-offs and net of allowance for credit losses. We are exposed to credit risk primarily through sales of broadcast and digital advertising with a variety of direct and agency-based advertising customers, retransmission consent agreements with multichannel video program distributors and program production sales and services.

 

Our allowance for credit losses is an estimate of expected losses over the remaining contractual life of our receivables based on an ongoing analysis of collectability, historical collection experience, current economic and industry conditions and reasonable and supportable forecasts. The allowance is calculated using a historical loss rate applied to the current aging analysis. We may also apply additional allowance when warranted by specific facts and circumstances. We generally write off accounts receivable balances when the customer files for bankruptcy or when all commonly used methods of collection have been exhausted.

 

On February 23, 2023, we, certain of our subsidiaries and a wholly-owned special purpose subsidiary (the “SPV”), entered into a three-year $300 million revolving accounts receivable securitization facility (the “Securitization Facility”) with Wells Fargo Bank, N.A., as administrative agent, and certain third-party financial institutions (the “Purchasers”). The Securitization Facility permits the SPV to draw up to a total of $300 million, subject to the outstanding amount of the receivables pool and other factors. The Securitization Facility matures on February 23, 2026, and is subject to customary termination events related to transactions of this type. The sale of receivables from the SPV is accounted for in the Company’s financial statements as a "true-sale" under Accounting Standards Codification ("ASC") Topic 860.

 

Under the Securitization Facility, the SPV sells to the Purchasers certain receivables, including all rights, title, and interest in the related receivables (“Sold Receivables”). The parties intend that the conveyance of accounts receivables to the Purchasers, for the ratable benefit of the Purchasers will constitute a purchase and sale of receivables and not a pledge for security. The SPV has guaranteed to each Purchaser the prompt payment of Sold Receivables, and to secure the prompt payment and performance of such guaranteed obligations, the SPV has granted a security interest to the Purchasers in all assets of the SPV. In our capacity as servicer under the Securitization Facility, we are responsible for administering and collecting receivables and have made customary representations, warranties, covenants and indemnities. We do not record a servicing asset or liability since the estimated fair value of the servicing of the receivables approximates the servicing income. We also provided a performance guarantee for the benefit of the Purchasers.

 

The Securitization Facility is subject to interest charges, at the adjusted one-month Secured Overnight Financing Rate (“SOFR”) plus a margin (100 basis points) on the amount of the outstanding facility. The SPV was required to pay an upfront fee and a commitment fee in connection with the Securitization Facility. Servicing fee income recognized during the nine-months ended September 30, 2024 and 2023, was $5 million and $3 million, respectively. The SPV is a separate legal entity with its own separate creditors who will be entitled to access the SPV’s assets before the assets become available to us. As a result, the SPV’s assets are not available to pay our creditors or any of our subsidiaries, although collections from the receivables in excess of amounts required to repay the Purchasers under the Securitization Facility and other creditors of the SPV may be remitted to us.

 

The proceeds of the Securitization Facility are classified as operating activities in our condensed consolidated statements of cash flows. Cash received from collections of Sold Receivables is used by the SPV to fund additional purchases of receivables on a revolving basis or to return all or any portion of outstanding capital of the Purchasers. Subsequent collections on the pledged receivables, which have not been sold, will be classified as operating cash flows at the time of collection.

 

The amount sold to the Purchasers was $300 million at each of September 30, 2024 and December 31, 2023, which was derecognized from the condensed consolidated balance sheets. As collateral against sold receivables, the SPV maintains a certain level of unsold receivables, which was $282 million and $296 million at September 30, 2024 and December 31, 2023, respectively. Total receivables sold under the Securitization Facility were $582 million and $550 million in the nine-months ended September 30, 2024 and 2023, respectively. Pursuant to the Securitization Facility, we recognized a charge of $8 million in the nine-month period ended September 30, 2023 representing the discount on the accounts receivable balance initially transferred to the SPV. This discount was included in our (loss) gain on disposal of assets in our condensed consolidated statements of operations.

 

The following table provides a roll-forward of the allowance for credit losses. The allowance is deducted from the amortized cost basis of accounts receivable in our condensed consolidated balance sheets (in millions):

 

  

Nine Months Ended September 30,

 
  

2024

  

2023

 

Beginning balance

 $17  $16 

(Decrease) increase in provision for credit losses

  (1)  17 

Amounts written off

  (1)  (2)

Ending balance

 $15  $31 

 
New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements. In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures. The purpose of this amendment was to improve disclosures related to reportable segments. The amendments in this ASU are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Currently we do not expect that the implementation of these changes will have a material effect on our financial statements.

 

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures. The purpose of this amendment was to enhance the transparency and decision usefulness of income tax disclosures. The amendments in this ASU are effective for annual periods beginning after December 15, 2024. Currently we do not expect that the implementation of these changes will have a material effect on our financial statements.

 

In November 2024, The FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), Disaggregation of Income Statement Expenses. The purpose of this amendment was to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions. The amendments in this Update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Currently we do not expect that the implementation of these changes will have a material impact on our financial statements.

 

In addition to the accounting standards described above, certain amounts in the condensed consolidated balance sheets and condensed consolidated statements of cash flows have also been reclassified to conform to the current presentation.

 
v3.24.3
Note 1 - Basis of Presentation (Tables)
 9 Months Ended
Sep. 30, 2024
Notes Tables  
Schedule of Weighted Average Number of Shares [Table Text Block]
  

Three Months Ended

  

Nine Months Ended

 
  

September 30,

  

September 30,

 
  

2024

  

2023

  

2024

  

2023

 
                 

Weighted-average shares outstanding-basic

  95   93   95   92 

Common stock equivalents for stock options and restricted stock

  2   -   1   - 

Weighted-average shares outstanding-diluted

  97   93   96   92 
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]
  

September 30,

  

December 31,

 
  

2024

  

2023

 
         

Accumulated balances of items included in accumulated other comprehensive loss:

        

Adjustment to pension asset

 $(7) $(7)

Adjustment to fair value of interest rate caps

  (32)  (23)

Income tax benefit

  (9)  (7)

Accumulated other comprehensive loss

 $(30) $(23)
Property, Plant and Equipment [Table Text Block]
          

Estimated

 
  

September 30,

  

December 31,

  

Useful Lives

 
  

2024

  

2023

  

(in years)

 

Property and equipment, net:

            

Land

 $385  $368     

Buildings and improvements

  895   868  7to40 

Equipment

  1,077   1,082  3to20 

Construction in progress

  98   81     
   2,455   2,399     

Accumulated depreciation

  (872)  (798)    

Total property and equipment, net

 $1,583  $1,601     
Proceeds Received for Project [Table Text Block]
  

Three Months Ended

  

Nine Months Ended

 
  

September 30,

  

September 30,

 
  

2024

  

2023

  

2024

  

2023

 
                 
Proceeds received in advance of asset sale $-  $-  $-  $9 

Proceeds for reimbursement of development costs

  -   -   6   29 

Total proceeds received from CID

 $-  $-  $6  $38 
Schedule of Disposal of Assets and Purchase of Property and Equipment [Table Text Block]
  

Three Months Ended

  

Nine Months Ended

 
  

September 30,

  

September 30,

 
  

2024

  

2023

  

2024

  

2023

 

(Loss) gain on disposal of assets, net:

                

Proceeds from sale of fixed assets

 $1  $9  $8  $31 

Net book value of assets disposed

  (2)  (26)  (8)  (51)

Non-cash (loss) gain on divestitures

  (15)  13   (15)  (1)

Securitization Facility

  -   8   -   - 

Other

  -   2   -   1 

Total

 $(16) $6  $(15) $(20)
                 

Purchase of property and equipment:

                

Recurring purchases - operations

       $64  $78 

Assembly Atlanta project

        39   210 

Total

       $103  $288 
Accounts Receivable, Allowance for Credit Loss [Table Text Block]
  

Nine Months Ended September 30,

 
  

2024

  

2023

 

Beginning balance

 $17  $16 

(Decrease) increase in provision for credit losses

  (1)  17 

Amounts written off

  (1)  (2)

Ending balance

 $15  $31 
v3.24.3
Note 2 - Revenue (Tables)
 9 Months Ended
Sep. 30, 2024
Notes Tables  
Contract with Customer, Contract Asset, Contract Liability, and Receivable [Table Text Block]
  

September30,

  

December 31,

 
  

2024

  

2023

 

Advertising deposit liabilities

 $32  $13 

Other deposit liabilities

  18   10 

Total deferred revenue

 $50  $23 
Disaggregation of Revenue [Table Text Block]
  

Three Months Ended

  

Nine Months Ended

 
  

September 30,

  

September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Market and service type:

                

Advertising:

                

Core

 $365  $363  $1,110  $1,099 

Political

  173   26   247   46 

Total advertising

  538   389   1,357   1,145 

Retransmission consent

  369   378   1,121   1,167 

Production companies

  26   20   68   54 

Other

  17   16   53   51 

Total revenue

 $950  $803  $2,599  $2,417 
                 

Sales channel:

                

Direct

 $558  $547  $1,665  $1,664 

Advertising agency intermediary

  392   256   934   753 

Total revenue

 $950  $803  $2,599  $2,417 
v3.24.3
Note 4 - Long-term Debt (Tables)
 9 Months Ended
Sep. 30, 2024
Notes Tables  
Schedule of Long-Term Debt Instruments [Table Text Block]
  

September 30,

  

December 31,

 
  

2024

  

2023

 

Long-term debt:

        

2019 Senior Credit Facility:

        

2019 Term Loan (matures January 2, 2026)

 $-  $1,190 

2021 Term Loan (matures December 1, 2028)

  1,439   1,470 

2024 Term Loan (matures June 4, 2029)

  499   - 

2026 Notes (matures July 15, 2026)

  10   700 

2027 Notes (matures May 15, 2027)

  671   750 

2029 Notes (matures July 15, 2029)

  1,250   - 

2030 Notes (matures October 15, 2030)

  800   800 

2031 Notes (matures November 15, 2031)

  1,300   1,300 

Total outstanding principal, including current portion

  5,969   6,210 

Unamortized deferred loan costs - Senior Credit Facility

  (38)  (18)

Unamortized deferred loan costs - 2026 Notes

  -   (3)

Unamortized deferred loan costs - 2027 Notes

  (4)  (6)

Unamortized deferred loan costs - 2029 Notes

  (13)  - 

Unamortized deferred loan costs - 2030 Notes

  (8)  (10)

Unamortized deferred loan costs - 2031 Notes

  (13)  (14)

Unamortized premium - 2026 Notes

  -   1 

Less current portion

  (23)  (15)

Long-term debt, less current portion and deferred financing costs

 $5,870  $6,145 
         

Borrowing availability under Revolving Credit Facility

 $674  $494 
Schedule of Maturities of Long-Term Debt [Table Text Block]
  

Minimum Principal Maturities

 

Year

 

Senior Credit

Facility

  

2026 Notes

  

2027 Notes

  

2029 Notes

  

2030 Notes

  

2031 Notes

  

Total

 

Remainder of 2024

 $8  $-  $-  $-  $-  $-  $8 

2025

  20   -   -   -   -   -   20 

2026

  20   10   -   -   -   -   30 

2027

  20   -   671   -   -   -   691 

2028

  1,399   -   -   -   -   -   1,399 

2029

  471   -   -   1,250   -   -   1,721 

Thereafter

  -   -   -   -   800   1,300   2,100 

Total

 $1,938  $10  $671  $1,250  $800  $1,300  $5,969 
v3.24.3
Note 8 - Stock-based Compensation (Tables)
 9 Months Ended
Sep. 30, 2024
Notes Tables  
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Table Text Block]
  

Three Months Ended

  

Nine Months Ended

 
  

September 30,

  

September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Stock-based compensation expense, gross

 $5  $5  $17  $14 

Income tax benefit at our statutory rate associated with share-based compensation

  (1)  (1)  (4)  (4)

Stock-based compensation expense, net

 $4  $4  $13  $10 
Schedule of Nonvested Restricted Stock Units Activity [Table Text Block]
  

Nine Months Ended

 
  

September 30, 2024

  

September 30, 2023

 
      

Weighted-

      

Weighted-

 
      

average

      

average

 
      

Grant Date

      

Grant Date

 
  

Number of

  

Fair Value

  

Number of

  

Fair Value

 
  

Shares

  

Per Share

  

Shares

  

Per Share

 

Restricted stock - common:

                

Outstanding - beginning of period (1)

  1,467,936  $12.17   997,745  $20.62 

Granted(1)

  1,785,958  $7.47   1,007,919  $8.15 

Vested

  (480,412) $11.23   (461,953) $20.27 

Forfeited

  (130,000) $8.10   -  $- 

Outstanding - end of period (1)

  2,643,482  $9.36   1,543,711  $12.58 
                 

Restricted stock - Class A common:

                

Outstanding - beginning of period (1)

  1,148,233  $12.37   677,238  $19.36 

Granted(1)

  823,393  $8.25   738,854  $8.34 

Vested

  (318,733) $13.17   (203,986) $18.76 

Outstanding - end of period (1)

  1,652,893  $10.16   1,212,106  $12.74 
                 

Restricted stock units - common stock:

                

Outstanding - beginning of period

  587,168  $11.50   274,145  $23.60 

Granted

  1,229,390  $5.72   587,168  $11.50 

Vested

  (564,793) $11.50   (247,953) $23.64 

Forfeited

  (22,375) $11.50   (26,192) $23.15 

Outstanding - end of period

  1,229,390  $5.72   587,168  $11.50 
v3.24.3
Note 9 - Leases (Tables)
 9 Months Ended
Sep. 30, 2024
Notes Tables  
Lease, Cost [Table Text Block]
  

Three Months Ended

  

Nine Months Ended

 
  

September 30,

  

September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Lease expense

                

Operating lease expense

 $4  $4  $12  $13 

Short-term lease expense

  1   1   3   4 

Total lease expense

 $5  $5  $15  $17 
Lessee, Operating Lease, Liability, to be Paid, Maturity [Table Text Block]

Year ending December 31,

 

Operating Leases

 

Remainder of 2024

 $3 

2025

  14 

2026

  13 

2027

  11 

2028

  8 

Thereafter

  48 

Total lease payments

  97 

Less: Imputed interest

  (25)

Present value of lease liabilities

 $72 
Operating Lease, Lease Income [Table Text Block]
  

Three Months Ended

  

Nine Months Ended

 
  

September 30,

  

September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Operating lease revenue:

                

Fixed lease revenue

 $5  $2  $16  $2 

Variable lease revenue

  4   4   12   11 

Total operating lease revenue

 $9  $6  $28  $13 
Lessor, Operating Lease, Payment to be Received, Maturity [Table Text Block]

Year ending December 31,

 

Operating Leases

 

Remainder of 2024

 $7 

2025

  25 

2026

  24 

2027

  23 

2028

  23 

Thereafter

  249 

Total lease receipts

 $351 
v3.24.3
Note 11 - Goodwill and Intangible Assets (Tables)
 9 Months Ended
Sep. 30, 2024
Notes Tables  
Schedule of Acquired Indefinite-Lived Intangible Assets by Major Class [Table Text Block]
  

Net Balance at

  

Disposals

      

Net Balance at

 
  

December 31,

  

And

      

September 30,

 
  

2023

  

Adjustments, Net

  

Amortization

  

2024

 
                 

Broadcast licenses

 $5,320  $(9) $-  $5,311 

Goodwill

  2,643   (1)  -   2,642 

Finite-lived intangible assets

  415   -   (94)  321 

Total intangible assets net of accumulated amortization

 $8,378  $(10) $(94) $8,274 

 
Schedule of Goodwill [Table Text Block]
  

As of

  

Disposals

  

As of

 
  

December 31,

  

And

  

September 30,

 
  

2023

  

Adjustments, Net

  

2024

 
             

Goodwill, gross

 $2,742  $(1) $2,741 

Accumulated goodwill impairment

  (99)  -   (99)

Goodwill, net

 $2,643  $(1) $2,642 

 
Schedule of Intangible Assets and Goodwill [Table Text Block]
  

As of September 30, 2024

  

As of December 31, 2023

 
      

Accumulated

          

Accumulated

     
  

Gross

  

Amortization

  

Net

  

Gross

  

Amortization

  

Net

 

Intangible assets not currently subject to amortization:

                        

Broadcast licenses

 $5,365  $(54) $5,311  $5,374  $(54) $5,320 

Goodwill

  2,642   -   2,642   2,643   -   2,643 
  $8,007  $(54) $7,953  $8,017  $(54) $7,963 
                         

Intangible assets subject to amortization:

                        

Network affiliation agreements

 $216  $(151) $65  $216  $(126) $90 

Other finite lived intangible assets

  992   (736)  256   992   (667)  325 
  $1,208  $(887) $321  $1,208  $(793) $415 
                         

Total intangibles

 $9,215  $(941) $8,274  $9,225  $(847) $8,378 
v3.24.3
Note 12 - Income Taxes (Tables)
 9 Months Ended
Sep. 30, 2024
Notes Tables  
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]
  

Three Months Ended

  

Nine Months Ended

 
  

September 30,

  

September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Income tax expense (benefit)

 $32  $3  $70  $(3)

Effective income tax rate

  25%  (8)%  25%  4%
v3.24.3
Note 13 - Segment Information (Tables)
 9 Months Ended
Sep. 30, 2024
Notes Tables  
Schedule of Segment Reporting Information, by Segment [Table Text Block]
      

Production

         

As of and for the nine months ended September 30, 2024:

 

Broadcasting

  

Companies

  

Other

  

Consolidated

 
                 

Revenue (less agency commissions)

 $2,531  $68  $-  $2,599 

Operating expenses before depreciation, amortization, impairment and loss on disposal of assets, net:

  1,719   57   80   1,856 

Depreciation and amortization

  186   14   2   202 

Loss on disposal of assets, net

  15   -   -   15 

Operating expenses

  1,920   71   82   2,073 

Operating income (loss)

 $611  $(3) $(82) $526 
                 

Interest expense

 $-  $-  $363  $363 

Capital expenditures (excluding business combinations)

 $46  $57  $-  $103 

Goodwill

 $2,614  $28  $-  $2,642 

Total assets

 $9,840  $664  $127  $10,631 
                 

For the nine months ended September 30, 2023:

                
                 

Revenue (less agency commissions)

 $2,363  $54  $-  $2,417 

Operating expenses before depreciation, amortization and (gain) loss on disposal of assets, net:

  1,664   88   79   1,831 

Depreciation and amortization

  241   9   3   253 

Impairment of goodwill and other intangible assets

  -   43   -   43 

Loss on disposal of assets, net

  18   2   -   20 

Operating expenses

  1,923   142   82   2,147 

Operating income (loss)

 $440  $(88) $(82) $270 
                 

Interest expense

 $-  $-  $324  $324 

Capital expenditures (excluding business combinations)

 $83  $201  $4  $288 
                 

As of December 31, 2023:

                
                 

Goodwill

 $2,615  $28  $-  $2,643 

Total assets

 $9,897  $658  $85  $10,640 
v3.24.3
Note 1 - Basis of Presentation (Details Textual)
$ in Millions
 9 Months Ended 12 Months Ended
Feb. 08, 2024
USD ($)
Sep. 30, 2024
USD ($)
Rate
Sep. 30, 2023
USD ($)
Dec. 31, 2023
USD ($)
Feb. 23, 2023
USD ($)
Number of Operating Segments   2      
Number of Television Markets   113      
Percent of US Television Households Reached (Rate) | Rate   36.00%      
Number of Television Markets with Top-Rated Stations   77      
Number of Television Markets with First and/or Second Rated Stations   100      
Number of Television Markets, Telemundo Affiliate Group   43      
Number of Hispanic Television Households   1,500,000      
Proceeds from Sale of Long-Term Investments   $ 110 $ 0    
Debt Instrument, Variable Interest Rate, Type [Extensible Enumeration]   Secured Overnight Financing Rate (SOFR) [Member]      
Special Purpose Subsidiary ("SPV") [Member]          
Fee Income   $ 5 $ 3    
Wells Fargo Bank, N.A. [Member]          
Accounts Receivable Securitization Program Maximum Capacity         $ 300
Debt Instrument, Basis Spread on Variable Rate   1.00%      
Proceeds from Accounts Receivable Securitization   $ 300   $ 300  
Accounts Receivable Securitization, Unsold Receivables   282   296  
Accounts Receivable Securitization, Total Receivables   582   $ 550  
Accounts Receivable Securitization, Charge for Discount   $ 8      
Broadcast Music Inc. [Member]          
Proceeds from Sale of Long-Term Investments $ 110        
v3.24.3
Note 1 - Basis of Presentation - Reconciliation of Basic to Diluted Weighted-average Shares Outstanding (Details) - shares
shares in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Weighted-average shares outstanding-basic (in shares) 95 93 95 92
Common stock equivalents for stock options and restricted stock (in shares) 2 0 1 0
Weighted-average shares outstanding-diluted (in shares) 97 93 96 92
v3.24.3
Note 1 - Basis of Presentation - Accumulated Other Comprehensive Loss (Details) - USD ($)
$ in Millions
Sep. 30, 2024
Dec. 31, 2023
Accumulated balances of items included in accumulated other comprehensive loss:    
Adjustment to pension asset $ (7) $ (7)
Adjustment to fair value of interest rate caps (32) (23)
Income tax benefit (9) (7)
Accumulated other comprehensive loss $ (30) $ (23)
v3.24.3
Note 1 - Basis of Presentation - Property and Equipment (Details) - USD ($)
$ in Millions
Sep. 30, 2024
Dec. 31, 2023
Property and equipment, gross $ 2,455 $ 2,399
Accumulated depreciation (872) (798)
Total property and equipment, net 1,583 1,601
Land [Member]    
Property and equipment, gross 385 368
Building and Building Improvements [Member]    
Property and equipment, gross $ 895 868
Building and Building Improvements [Member] | Minimum [Member]    
Estimated Useful Lives (Year) 7 years  
Building and Building Improvements [Member] | Maximum [Member]    
Estimated Useful Lives (Year) 40 years  
Equipment [Member]    
Property and equipment, gross $ 1,077 1,082
Equipment [Member] | Minimum [Member]    
Estimated Useful Lives (Year) 3 years  
Equipment [Member] | Maximum [Member]    
Estimated Useful Lives (Year) 20 years  
Construction in Progress [Member]    
Property and equipment, gross $ 98 $ 81
v3.24.3
Note 1 - Basis of Presentation - Proceeds Received for Project (Details) - Sale Agreement with the Doraville Community Improvement District [Member] - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Proceeds received in advance of asset sale $ 0 $ 0 $ 0 $ 9
Proceeds for reimbursement of development costs 0 0 6 29
Total proceeds received from CID $ 0 $ 0 $ 6 $ 38
v3.24.3
Note 1 - Basis of Presentation - Disposal of Assets and Purchase of Property and Equipment (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Proceeds from sale of fixed assets $ 1 $ 9 $ 8 $ 31
Net book value of assets disposed (2) (26) (8) (51)
Non-cash (loss) gain on divestitures (15) 13 (15) (1)
Securitization Facility 0 8 0 0
Other 0 2 0 1
Total (16) 6 (15) (20)
Recurring purchases - operations 64 78
Assembly Atlanta project 39 210
Total $ 103 $ 288
v3.24.3
Note 1 - Basis of Presentation - Allowance for Credit Losses (Details) - USD ($)
$ in Millions
 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Beginning balance $ 17 $ 16
(Decrease) increase in provision for credit losses (1) 17
Amounts written off (1) (2)
Ending balance $ 15 $ 31
v3.24.3
Note 2 - Revenue (Details Textual) - USD ($)
$ in Millions
 9 Months Ended
Sep. 30, 2024
Dec. 31, 2023
Contract with Customer, Liability, Revenue Recognized $ 13  
Deferred Revenue [Member]    
Deposit Liability, Current   $ 13
v3.24.3
Note 2 - Revenue - Deferred Revenue (Details) - USD ($)
$ in Millions
Sep. 30, 2024
Dec. 31, 2023
Deferred revenue $ 50 $ 23
Advertising Deposit Liabilities [Member]    
Deferred revenue 32 13
Other Deposit Liabilities [Member]    
Deferred revenue $ 18 $ 10
v3.24.3
Note 2 - Revenue - Disaggregation of Revenue (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Revenue $ 950 $ 803 $ 2,599 $ 2,417
Sales Channel, Directly to Consumer [Member]        
Revenue 558 547 1,665 1,664
Sales Channel, Through Intermediary [Member]        
Revenue 392 256 934 753
Core Advertising [Member]        
Revenue 365 363 1,110 1,099
Political Advertising [Member]        
Revenue 173 26 247 46
Advertising [Member]        
Revenue 538 389 1,357 1,145
Retransmission Consent [Member]        
Revenue 369 378 1,121 1,167
Production Companies [Member]        
Revenue 26 20 68 54
Service, Other [Member]        
Revenue $ 17 $ 16 $ 53 $ 51
v3.24.3
Note 3 - Acquisition and Divestitures (Details Textual) - Sale of Television Stations KCWY and KGWN [Member]
$ in Millions
Jul. 01, 2024
USD ($)
Fair Value, Construction Permit Acquired $ 1
Gain (Loss) on Disposition of Business $ (14)
v3.24.3
Note 4 - Long-term Debt (Details Textual) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended 20 Months Ended
Sep. 30, 2024
Sep. 25, 2024
Jun. 04, 2024
Jun. 03, 2024
Dec. 31, 2024
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2025
Dec. 31, 2023
Repayments of Long-Term Debt               $ 2,257,000 $ 506,000    
Payments of Debt Restructuring Costs     $ 47,000                
Debt Issuance Costs, Gross     45,000                
Gain (Loss) on Extinguishment of Debt     10,000     $ 6,000 $ 0 (1,000) (3,000)    
Gain (Loss) on Extinguishment of Debt, before Debt Issuance Cost Writeoff     4,000                
Deferred Debt Issuance Cost, Writeoff     6,000                
Derivative, Notional Amount $ 2,000,000         2,000,000   2,000,000      
Derivative Asset 15,000         15,000   15,000     $ 24,000
Amortization               9,000 7,000    
Interest Costs Capitalized               1,000 20,000    
Interest Paid, Excluding Capitalized Interest, Operating Activities               257,000 284,000    
Interest Rate Cap [Member]                      
Derivative Liabilities, Net of Tax $ 32,000         $ 32,000   32,000     $ 23,000
Interest Costs Capitalized               $ 6,000 $ 2,000    
Forecast [Member] | Interest Rate Cap [Member]                      
Derivative Fees Payable                   $ 34,000  
Debt Repurchase Agreement Using Liquidity [Member]                      
Available Liquidity, Maximum Authorized Amount to Repurchase Debt                   $ 250,000  
Second Amendment Extending Maturity Date to December 1, 2026 [Member]                      
Line of Credit Facility, Maximum Borrowing Capacity     552,500                
Long-Term Line of Credit     72,500                
Third Amendment Increasing Aggregate Commitments to 127.5 Million [Member}                      
Line of Credit Facility, Increase in Maximum Borrowing Capacity     127,500                
Long-Term Line of Credit     $ 680,000                
The 2024 Revolving Credit Facility [Member] | Minimum [Member]                      
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage     0.375%                
The 2024 Revolving Credit Facility [Member] | Maximum [Member]                      
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage     0.50%                
The 2024 Revolving Credit Facility [Member] | Secured Overnight Financing Rate (SOFR) [Member] | Minimum [Member]                      
Debt Instrument, Basis Spread on Variable Rate     1.75%                
The 2024 Revolving Credit Facility [Member] | Secured Overnight Financing Rate (SOFR) [Member] | Maximum [Member]                      
Debt Instrument, Basis Spread on Variable Rate     2.75%                
The 2024 Revolving Credit Facility [Member] | Base Rate [Member] | Minimum [Member]                      
Debt Instrument, Basis Spread on Variable Rate     0.75%                
The 2024 Revolving Credit Facility [Member] | Base Rate [Member] | Maximum [Member]                      
Debt Instrument, Basis Spread on Variable Rate     1.75%                
2026 Notes [Member]                      
Debt Instrument, Interest Rate, Stated Percentage 5.875%     5.875%   5.875%   5.875%     5.875%
Debt Instrument, Repurchase Amount       $ 690,000              
2027 Notes [Member]                      
Debt Instrument, Interest Rate, Stated Percentage 7.00%         7.00%   7.00%     7.00%
2027 Notes [Member] | Debt Repurchase Agreement Using Liquidity [Member]                      
Repayments of Long-Term Debt               $ 72,000      
Extinguishment of Debt, Amount               79,000      
Gain (Loss) on Repurchase of Debt Instrument               $ 6,000      
2029 Notes [Member]                      
Debt Instrument, Interest Rate, Stated Percentage 10.50%     10.50%   10.50%   10.50%     10.50%
Debt Instrument, Face Amount       $ 1,250,000              
2030 Notes [Member]                      
Debt Instrument, Interest Rate, Stated Percentage 4.75%         4.75%   4.75%     4.75%
Notes 2031 [Member]                      
Debt Instrument, Interest Rate, Stated Percentage 5.375%         5.375%   5.375%     5.375%
The 2024 Term Loan [Member]                      
Debt Instrument, Face Amount     $ 500,000 500,000              
Debt Instrument, Periodic Payment, Principal     $ 1,250                
Debt Instrument, Prepayment fee     1.00%                
The 2024 Term Loan [Member] | Fed Funds Effective Rate Overnight Index Swap Rate [Member]                      
Debt Instrument, Basis Spread on Variable Rate     0.50%                
The 2024 Term Loan [Member] | Secured Overnight Financing Rate (SOFR) [Member]                      
Debt Instrument, Basis Spread on Variable Rate     1.00%                
Debt Instrument, Interest Rate, Effective Percentage     5.25%                
The 2024 Term Loan [Member] | Base Rate [Member]                      
Debt Instrument, Basis Spread on Variable Rate     4.25%                
The 2024 Revolving Credit Facility [Member]                      
Proceeds from Lines of Credit       $ 150,000              
The 2019 Term Loan [Member]                      
Repayments of Long-Term Debt $ 1,200,000                    
The 2021 Term Loan [Member] | Debt Repurchase Agreement Using Liquidity [Member]                      
Repayments of Long-Term Debt               $ 14,000      
Extinguishment of Debt, Amount               15,000      
Gain (Loss) on Repurchase of Debt Instrument               $ 1,000      
The 2021 Term Loan [Member] | Debt Repurchase Agreement Using Liquidity [Member] | Forecast [Member]                      
Repayments of Long-Term Debt         $ 7,000            
Repayments of Debt, Cost, Amount         $ 6,000            
The 2021 Term Loan [Member] | Forward Debt Repurchase Agreement With A Lender [Member]                      
Debt Repurchase Agreement, Amount of Debt Repurchased   $ 32,000                  
v3.24.3
Note 4 - Long-term Debt - Long-term Debt Summary (Details) - USD ($)
$ in Millions
Sep. 30, 2024
Dec. 31, 2023
2019 Term Loan (matures January 2, 2026) $ 5,969 $ 6,210
2024 Term Loan (matures June 4, 2029) 5,969 6,210
Less current portion (23) (15)
Long-term debt, less current portion and deferred financing costs 5,870 6,145
Borrowing availability under Revolving Credit Facility 674 494
The 2019 Term Loan [Member]    
2019 Term Loan (matures January 2, 2026) 0 1,190
2024 Term Loan (matures June 4, 2029) 0 1,190
The 2021 Term Loan [Member]    
2019 Term Loan (matures January 2, 2026) 1,439 1,470
2024 Term Loan (matures June 4, 2029) 1,439 1,470
The 2024 Term Loan [Member]    
2019 Term Loan (matures January 2, 2026) 499 0
2024 Term Loan (matures June 4, 2029) 499 0
2026 Notes [Member]    
2019 Term Loan (matures January 2, 2026) 10 700
2024 Term Loan (matures June 4, 2029) 10 700
Unamortized deferred loan costs - Senior Credit Facility 0 (3)
Unamortized deferred loan costs - 2026 Notes 0 (3)
Unamortized premium 0 1
2027 Notes [Member]    
2019 Term Loan (matures January 2, 2026) 671 750
2024 Term Loan (matures June 4, 2029) 671 750
Unamortized deferred loan costs - Senior Credit Facility (4) (6)
Unamortized deferred loan costs - 2026 Notes (4) (6)
2029 Notes [Member]    
2019 Term Loan (matures January 2, 2026) 1,250 0
2024 Term Loan (matures June 4, 2029) 1,250 0
Unamortized deferred loan costs - Senior Credit Facility (13) 0
Unamortized deferred loan costs - 2026 Notes (13) 0
2030 Notes [Member]    
2019 Term Loan (matures January 2, 2026) 800 800
2024 Term Loan (matures June 4, 2029) 800 800
Unamortized deferred loan costs - Senior Credit Facility (8) (10)
Unamortized deferred loan costs - 2026 Notes (8) (10)
Notes 2031 [Member]    
2019 Term Loan (matures January 2, 2026) 1,300 1,300
2024 Term Loan (matures June 4, 2029) 1,300 1,300
Unamortized deferred loan costs - Senior Credit Facility (13) (14)
Unamortized deferred loan costs - 2026 Notes (13) (14)
Senior Credit Facility [Member]    
Unamortized deferred loan costs - Senior Credit Facility (38) (18)
Unamortized deferred loan costs - 2026 Notes $ (38) $ (18)
v3.24.3
Note 4 - Long-term Debt - Aggregate Minimum Principal Maturities on Long-term Debt (Details) - USD ($)
$ in Millions
Sep. 30, 2024
Dec. 31, 2023
Remainder of 2024 $ 8  
2025 20  
2026 30  
2027 691  
2028 1,399  
2029 1,721  
Thereafter 2,100  
Total Debt 5,969 $ 6,210
The 2019 Senior Credit Facility [Member]    
Remainder of 2024 8  
2025 20  
2026 20  
2027 20  
2028 1,399  
2029 471  
Thereafter 0  
Total Debt 1,938  
2026 Notes [Member]    
Remainder of 2024 0  
2025 0  
2026 10  
2027 0  
2028 0  
2029 0  
Thereafter 0  
Total Debt 10 700
2027 Notes [Member]    
Remainder of 2024 0  
2025 0  
2026 0  
2027 671  
2028 0  
2029 0  
Thereafter 0  
Total Debt 671 750
2029 Notes [Member]    
Remainder of 2024 0  
2025 0  
2026 0  
2027 0  
2028 0  
2029 1,250  
Thereafter 0  
Total Debt 1,250 0
2030 Notes [Member]    
Remainder of 2024 0  
2025 0  
2026 0  
2027 0  
2028 0  
2029 0  
Thereafter 800  
Total Debt 800 800
Notes 2031 [Member]    
Remainder of 2024 0  
2025 0  
2026 0  
2027 0  
2028 0  
2029 0  
Thereafter 1,300  
Total Debt $ 1,300 $ 1,300
v3.24.3
Note 5 - Fair Value Measurement (Details Textual) - USD ($)
$ in Millions
Sep. 30, 2024
Dec. 31, 2023
Long-Term Debt $ 5,900.0 $ 6,200.0
Long-Term Debt, Fair Value $ 5,100.0 $ 5.6
v3.24.3
Note 6 - Stockholders' Equity (Details Textual)
$ / shares in Units, $ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2024
USD ($)
$ / shares
shares
Jun. 30, 2024
USD ($)
$ / shares
Mar. 31, 2024
USD ($)
$ / shares
Sep. 30, 2023
USD ($)
$ / shares
Jun. 30, 2023
USD ($)
$ / shares
Mar. 31, 2023
USD ($)
$ / shares
Sep. 30, 2024
USD ($)
$ / shares
shares
Sep. 30, 2023
USD ($)
$ / shares
Dec. 31, 2023
shares
Capital Units, Authorized (in shares) | shares 245,000,000           245,000,000    
Common Stock, Shares Authorized (in shares) | shares 200,000,000           200,000,000    
Preferred Stock, Shares Authorized (in shares) | shares 20,000,000           20,000,000    
Common Stock, Voting Rights, Votes Per Share 1           1    
Common Stock, Dividends, Per Share, Declared (in dollars per share) $ 0.08     $ 0.08     $ 0.24 $ 0.24  
Dividends, Common Stock | $ $ 8 $ 8 $ 8 $ 8 $ 7 $ 7 $ 24 $ 22  
Common Stock, Capital Shares Reserved for Future Issuance (in shares) | shares 12,700,000           12,700,000    
O 2024 Q1 Dividends [Member]                  
Common Stock, Dividends, Per Share, Declared (in dollars per share)     $ 0.08            
O 2024 Q2 Dividends [Member]                  
Common Stock, Dividends, Per Share, Declared (in dollars per share)   $ 0.08              
O 2023 Q1 Dividends [Member]                  
Common Stock, Dividends, Per Share, Declared (in dollars per share)           $ 0.08      
O 2023 Q2 Dividends [Member]                  
Common Stock, Dividends, Per Share, Declared (in dollars per share)         $ 0.08        
O 2024 Q3 Dividends [Member]                  
Common Stock, Dividends, Per Share, Declared (in dollars per share) $ 0.08                
O 2023 Q3 Dividends [Member]                  
Common Stock, Dividends, Per Share, Declared (in dollars per share)       $ 0.08          
Class A Common Stock (No Par Value) [Member]                  
Common Stock, Shares Authorized (in shares) | shares 25,000,000           25,000,000   25,000,000
Common Stock, Voting Rights, Votes Per Share 10           10    
Common Stock, Capital Shares Reserved for Future Issuance (in shares) | shares 1,200,000           1,200,000    
Class A Common Stock (No Par Value) [Member] | O 2024 Q1 Dividends [Member]                  
Common Stock, Dividends, Per Share, Declared (in dollars per share)     $ 0.08            
Class A Common Stock (No Par Value) [Member] | O 2024 Q2 Dividends [Member]                  
Common Stock, Dividends, Per Share, Declared (in dollars per share)   $ 0.08              
Class A Common Stock (No Par Value) [Member] | O 2023 Q1 Dividends [Member]                  
Common Stock, Dividends, Per Share, Declared (in dollars per share)           $ 0.08      
Class A Common Stock (No Par Value) [Member] | O 2023 Q2 Dividends [Member]                  
Common Stock, Dividends, Per Share, Declared (in dollars per share)         $ 0.08        
Class A Common Stock (No Par Value) [Member] | O 2024 Q3 Dividends [Member]                  
Common Stock, Dividends, Per Share, Declared (in dollars per share) $ 0.08                
v3.24.3
Note 7 - Retirement Plans (Details Textual) - USD ($)
$ in Millions
 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Defined Contribution Plan, Expected Contributions, Remainder of Fiscal Year $ 6  
Profit Sharing Contribution [Member]    
Defined Contribution Plan, Employer Discretionary Contribution Amount $ 22 $ 9
v3.24.3
Note 8 - Stock-based Compensation - Stock-based Compensation Expense and Related Income Tax Benefit (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Stock-based compensation expense, gross $ 5 $ 5 $ 17 $ 14
Income tax benefit at our statutory rate associated with share-based compensation (1) (1) (4) (4)
Stock-based compensation expense, net $ 4 $ 4 $ 13 $ 10
v3.24.3
Note 8 - Stock-based Compensation - Summary of Restricted Common Stock Activity (Details) - $ / shares
 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Restricted Stock [Member]    
Outstanding, Shares (in shares) [1] 1,467,936 997,745
Outstanding, Weighted average grant date fair value (in dollars per share) [1] $ 12.17 $ 20.62
Granted, Shares (in shares) [1] 1,785,958 1,007,919
Granted, Weighted average grant date fair value (in dollars per share) [1] $ 7.47 $ 8.15
Vested, Shares (in shares) (480,412) (461,953)
Vested, Weighted average grant date fair value (in dollars per share) $ 11.23 $ 20.27
Forfeited, Shares (in shares) (130,000) 0
Forfeited (in dollars per share) $ 8.1 $ 0
Outstanding, Shares (in shares) [1] 2,643,482 1,543,711
Outstanding, Weighted average grant date fair value (in dollars per share) [1] $ 9.36 $ 12.58
Restricted Stock [Member] | Common Class A [Member]    
Outstanding, Shares (in shares) [1] 1,148,233 677,238
Outstanding, Weighted average grant date fair value (in dollars per share) [1] $ 12.37 $ 19.36
Granted, Shares (in shares) [1] 823,393 738,854
Granted, Weighted average grant date fair value (in dollars per share) [1] $ 8.25 $ 8.34
Vested, Shares (in shares) (318,733) (203,986)
Vested, Weighted average grant date fair value (in dollars per share) $ 13.17 $ 18.76
Outstanding, Shares (in shares) [1] 1,652,893 1,212,106
Outstanding, Weighted average grant date fair value (in dollars per share) [1] $ 10.16 $ 12.74
Restricted Stock Units (RSUs) [Member]    
Outstanding, Shares (in shares) 587,168 274,145
Outstanding, Weighted average grant date fair value (in dollars per share) $ 11.5 $ 23.6
Granted, Shares (in shares) 1,229,390 587,168
Granted, Weighted average grant date fair value (in dollars per share) $ 5.72 $ 11.5
Vested, Shares (in shares) (564,793) (247,953)
Vested, Weighted average grant date fair value (in dollars per share) $ 11.5 $ 23.64
Forfeited, Shares (in shares) (22,375) (26,192)
Forfeited (in dollars per share) $ 11.5 $ 23.15
Outstanding, Shares (in shares) 1,229,390 587,168
Outstanding, Weighted average grant date fair value (in dollars per share) $ 5.72 $ 11.5
[1] For awards subject to future performance conditions, amounts assume target performance.
v3.24.3
Note 9 - Leases (Details Textual) - USD ($)
$ in Millions
Sep. 30, 2024
Dec. 31, 2023
Operating Lease, Weighted Average Remaining Lease Term (Year) 9 years 1 month 6 days  
Operating Lease, Weighted Average Discount Rate, Percent 6.63%  
Deferred Lease Revenue [Member]    
Deferred Rent Receivables, Net $ 8 $ 6
Minimum [Member]    
Lessee, Operating Lease, Remaining Lease Term (Year) 1 year  
Lessor, Operating Lease, Term of Contract (Year) 1 year  
Maximum [Member]    
Lessee, Operating Lease, Remaining Lease Term (Year) 99 years  
Lessor, Operating Lease, Term of Contract (Year) 42 years  
v3.24.3
Note 9 - Leases - Lease Expense (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Operating lease expense $ 4 $ 4 $ 12 $ 13
Short-term lease expense 1 1 3 4
Total lease expense $ 5 $ 5 $ 15 $ 17
v3.24.3
Note 9 - Leases - Maturities of Operating Lease Liabilities (Details)
$ in Millions
Sep. 30, 2024
USD ($)
Remainder of 2024 $ 3
2025 14
2026 13
2027 11
2028 8
Thereafter 48
Total lease payments 97
Less: Imputed interest (25)
Present value of lease liabilities $ 72
v3.24.3
Note 9 - Leases - Operating Lease Revenue (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Fixed lease revenue $ 5 $ 2 $ 16 $ 2
Variable lease revenue 4 4 12 11
Total operating lease revenue $ 9 $ 6 $ 28 $ 13
v3.24.3
Note 9 - Leases - Future Minimum Rental Receipts (Details)
$ in Millions
Sep. 30, 2024
USD ($)
Remainder of 2024 $ 7
2025 25
2026 24
2027 23
2028 23
Thereafter 249
Total lease receipts $ 351
v3.24.3
Note 11 - Goodwill and Intangible Assets (Details Textual) - USD ($)
$ in Millions
 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Amortization of Intangible Assets $ 94 $ 147
Finite-Lived Intangible Asset, Expected Amortization, Remainder of Fiscal Year 31  
Finite-Lived Intangible Asset, Expected Amortization, Year One 113  
Finite-Lived Intangible Asset, Expected Amortization, Year Two 83  
Finite-Lived Intangible Asset, Expected Amortization, Year Three 47  
Finite-Lived Intangible Asset, Expected Amortization, Year Four 13  
Finite-Lived Intangible Asset, Expected Amortization, Year Five $ 3  
v3.24.3
Note 11 - Goodwill and Intangible Assets - Changes in Goodwill and Other Intangible Assets, Net (Details) - USD ($)
$ in Millions
 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Broadcast licenses $ 5,320  
Broadcast licenses 5,311  
Goodwill,net 2,643  
Goodwill, acquisitions and adjustments 1  
Goodwill,net 2,642 $ 2,643
Finite-lived intangible assets 415  
Amortization (94) $ (147)
Finite-lived intangible assets 321  
Total intangible assets net of accumulated amortization 8,378  
Total intangible assets net of accumulated amortization (10)  
Total intangible assets net of accumulated amortization 8,274  
Finite-Lived Intangible Assets [Member]    
Acquisition and adjustments 0  
Acquisition and adjustments 0  
Finite-lived intangible assets 321  
Finite-lived Intangible Assets [Member]    
Amortization (94)  
Broadcast Licenses [Member]    
Broadcast licenses 5,320  
Acquisition and adjustments (9)  
Broadcast licenses 5,311  
Acquisition and adjustments $ 9  
v3.24.3
Note 11 - Goodwill and Intangible Assets - Summary of Changes in Goodwill (Details)
$ in Millions
 9 Months Ended
Sep. 30, 2024
USD ($)
Goodwill, gross $ 2,742
Goodwill, disposals and adjustments, net (1)
Goodwill, gross 2,741
Accumulated goodwill impairment (99)
Accumulated goodwill impairment (99)
Goodwill,net 2,643
Goodwill,net $ 2,642
v3.24.3
Note 11 - Goodwill and Intangible Assets - Intangible Assets and Related Accumulated Amortization (Details) - USD ($)
$ in Millions
Sep. 30, 2024
Dec. 31, 2023
Sep. 30, 2023
Goodwill, Gross $ 2,741 $ 2,742  
Goodwill 2,642 2,643 $ 2,643
Other intangible assets, net 321 415  
Total intangible assets, gross 9,215 9,225  
Total intangible assets, accumulated amortization (941) (847)  
Total intangible assets, net 8,274 8,378  
Network Affiliate [Member]      
Finite-Lived Intangible Assets, Gross 216 216  
Finite-Lived Intangible Assets, Accumulated Amortization (151) (126)  
Other intangible assets, net 65 90  
Other Intangible Assets [Member]      
Finite-Lived Intangible Assets, Gross 992 992  
Finite-Lived Intangible Assets, Accumulated Amortization (736) (667)  
Other intangible assets, net 256 325  
Intangible Assets Subject to Amortization [Member]      
Finite-Lived Intangible Assets, Gross 1,208 1,208  
Finite-Lived Intangible Assets, Accumulated Amortization (887) (793)  
Other intangible assets, net 321 415  
Broadcast Licenses [Member]      
Indefinite-lived Intangible Assets (Excluding Goodwill), Gross 5,365 5,374  
Indefinite-Lived Intangible Assets (Excluding Goodwill), Accumulated Amortization (54) (54)  
Indefinite-Lived Intangible Assets (Excluding Goodwill) 5,311 5,320  
Goodwill Not Amortizable [Member]      
Goodwill, Gross 2,642 2,643  
Goodwill, Accumulated Amortization 0 0  
Goodwill 2,642 2,643  
Intangible Assets Not Subject to Amortization [Member]      
Goodwill and Indefinite-Lived Intangible Assets, Gross 8,007 8,017  
Goodwill and Indefinite-lived Intangible Assets, Accumulated Amortization (54) (54)  
Goodwill and Indefinite-Lived Assets, Net $ 7,953 $ 7,963  
v3.24.3
Note 12 - Income Taxes (Details Textual) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Dec. 31, 2024
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent       21.00% 21.00%
Effective Income Tax Rate Reconciliation, Percent   25.00% (8.00%) 25.00% 4.00%
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Percent       5.00% 3.00%
Effective Income Tax Rate Reconciliation, Deduction, Percent       1.00%  
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Share-Based Payment Arrangement, Percent       2.00%  
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Percent         7.00%
Effective Income Tax Rate Reconciliation, Discrete Item, Percent     13.00%   13.00%
Income Taxes Paid, Net       $ 130  
State and Local Jurisdiction [Member]          
Operating Loss Carryforwards   $ 282   282  
Operating Loss Carryforwards That Will Not Be Realized   $ 201   $ 201  
Forecast [Member] | Minimum [Member]          
Income Taxes Paid, Net $ 3        
v3.24.3
Note 12 - Income Taxes - Federal and State Income Tax Expense (Benefit) Summary (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Income tax expense (benefit) $ 32 $ 3 $ 70 $ (3)
Effective income tax rate 25.00% (8.00%) 25.00% 4.00%
v3.24.3
Note 13 - Segment Information (Details Textual)
 9 Months Ended
Sep. 30, 2024
Number of Operating Segments 2
v3.24.3
Note 13 - Segment Information - Segment Information (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Revenue $ 950 $ 803 $ 2,599 $ 2,417  
Operating expenses before depreciation, amortization, impairment and loss on disposal of assets, net:     1,856 1,831  
Depreciation and amortization     202 253  
Loss on disposal of assets, net 16 (6) 15 20  
Operating expenses 700 719 2,073 2,147  
Operating income (loss) 250 84 526 270  
Interest expense 130 111 363 324  
Capital expenditures (excluding business combinations) 103 288  
Goodwill 2,642 2,643 2,642 2,643 $ 2,643
Total assets 10,631 10,640 10,631 10,640 $ 10,640
Impairment of goodwill and other intangible assets 0 43 0 43  
Broadcasting, Segment [Member]          
Revenue 924 783 2,531 2,363  
Production Companies, Segment [Member]          
Revenue 26 20 68 54  
Operating Segments [Member] | Broadcasting, Segment [Member]          
Revenue     2,531 2,363  
Operating expenses before depreciation, amortization, impairment and loss on disposal of assets, net:     1,719 1,664  
Depreciation and amortization     186 241  
Loss on disposal of assets, net     15 18  
Operating expenses     1,920 1,923  
Operating income (loss)     611 440  
Interest expense     0 0  
Capital expenditures (excluding business combinations)     46 83  
Goodwill 2,614 2,615 2,614 2,615  
Total assets 9,840 9,897 9,840 9,897  
Impairment of goodwill and other intangible assets       0  
Operating Segments [Member] | Production Companies, Segment [Member]          
Revenue     68 54  
Operating expenses before depreciation, amortization, impairment and loss on disposal of assets, net:     57 88  
Depreciation and amortization     14 9  
Loss on disposal of assets, net     0 2  
Operating expenses     71 142  
Operating income (loss)     (3) (88)  
Interest expense     0 0  
Capital expenditures (excluding business combinations)     57 201  
Goodwill 28 28 28 28  
Total assets 664 658 664 658  
Impairment of goodwill and other intangible assets       43  
Segment Reporting, Reconciling Item, Excluding Corporate Nonsegment [Member]          
Revenue     0 0  
Operating expenses before depreciation, amortization, impairment and loss on disposal of assets, net:     80 79  
Depreciation and amortization     2 3  
Loss on disposal of assets, net     0 0  
Operating expenses     82 82  
Operating income (loss)     (82) (82)  
Interest expense     363 324  
Capital expenditures (excluding business combinations)     0 4  
Goodwill 0 0 0 0  
Total assets $ 127 $ 85 $ 127 85  
Impairment of goodwill and other intangible assets       $ 0  
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