Gray Television(GTN) - 2024 Q4 - Annual Report

Revenue and Income - Total revenue for 2024 increased by $363 million, or 11$3.6 billion compared to 2023[208] - Core advertising revenue decreased by $24 million, while political advertising revenue increased by$418 million in 2024[210] - The company generated $1.49 billion from core advertising, contributing 41$117 million in 2024, primarily due to a $110 million gain from the sale of an investment[216] - Net cash provided by operating activities increased by$103 million to $751 million in 2024 compared to$648 million in 2023, primarily due to a $451 million increase in net income[224] Expenses and Costs - Broadcasting expenses increased by$49 million, or 2%, to $2.3 billion for 2024 compared to 2023[209] - Interest expense increased by$45 million, or 10%, to $485 million for 2024, primarily due to higher average interest rates[217] - The effective income tax rate increased to 24$520 million reduction in outstanding debt compared to December 31, 2023[206] - The company repurchased and retired $373 million of outstanding debt, utilizing$327 million in cash[205] - As of December 31, 2024, the principal outstanding of the company's long-term debt was $5.7 billion, down from$6.2 billion in 2023[279] - The fair value of the company's long-term debt as of December 31, 2024, was $4.6 billion, compared to$5.6 billion in 2023[279] - The company entered into a three-year $300 million revolving accounts receivable securitization facility to provide additional liquidity for debt repayment[247] Cash Flow and Investments - Net cash used in investing activities decreased by$263 million to $28 million in 2024 from$291 million in 2023, mainly due to reduced cash used for property and equipment purchases[225] - Net cash used in financing activities increased by $212 million to$609 million in 2024 compared to $397 million in 2023, with$474 million used for principal payments on long-term debt[226] - As of December 31, 2024, cash on hand was $135 million, a significant increase from$21 million in 2023[223] - The company anticipates that future cash flows from operations and borrowing availability will be sufficient to fund capital expenditures and debt service obligations for the foreseeable future[227] Capital Expenditures and Future Projections - Capital expenditures are expected to range between $85 million to$90 million during 2025, including reimbursements of approximately $25 million from the Doraville Community Improvement District[244] - The company estimates approximately$450 million in debt interest payments over the next twelve months following December 31, 2024[227] Asset Valuation and Impairment - As of December 31, 2024, the recorded value of broadcast licenses was $5.3 billion and goodwill was$2.6 billion[264] - For the annual impairment test in 2024, the company concluded that all evaluated broadcast licenses were not impaired based on qualitative assessments[260] - The company recorded a non-cash charge of $43 million for impairment of goodwill and other intangible assets due to the bankruptcy of Diamond Sports Group, LLC in 2023[265] - The company performed qualitative assessments for 56 broadcast licenses and three reporting units in 2024, compared to 59 licenses and one reporting unit in 2023[257] - The company utilizes a discounted cash flow model supported by a market multiple approach for estimating the fair value of its reporting units[261] Pension and Contributions - The Gray Pension Plan had a discount rate of 5.48$28 million in 2024, compared to $26 million in 2023[240] Economic Risks and Management - The company manages economic risks, including interest rate and liquidity risks, through debt funding management and interest rate swap agreements[274] - The company entered into interest rate caps with a combined fixed notional value of approximately$1.9 billion, effective through December 31, 2025[277] - The interest rate caps limit the annual interest on variable rate debt to a maximum one-month SOFR rate of 5 percent, plus the Applicable Margin[277] - A 100 basis point increase in market interest rates would have increased the company's interest expense and decreased income before income taxes by $6 million for the year ended December 31, 2024[277] - A 100 basis point decrease in market interest rates would have decreased interest expense and increased income before income taxes by$6 million for the year ended December 31, 2024[277] - The company pays fixed interest rates on its 2031, 2030, 2029, 2027, and 2026 Notes, reducing the risk of potential interest rate increases[278]