Revenue Performance - Total revenue for the six-month period ended June 30, 2024, was $1.6 billion, a 2% increase compared to the same period in 2023[98]. - Core advertising revenue increased by $9 million to $745 million, partly due to $18 million in net revenue from the Super Bowl broadcast on CBS channels[98]. - Political advertising revenue surged by $54 million to $74 million, reflecting a 270% increase due to the election cycle[98]. - Retransmission consent revenue decreased by $37 million to $752 million, a 5% decline attributed to a decrease in subscribers[98]. Expenses - Broadcasting expenses rose by $41 million, or 4%, to $1.1 billion, driven by a $34 million increase in payroll and related benefits[99]. - Production company operating expenses decreased by $35 million to $35 million, compared to $70 million in the prior year, due to prior year charges related to bankruptcy and litigation[100]. - Corporate and administrative expenses were $56 million for both the 2024 and 2023 six-month periods, with non-cash stock-based compensation expenses increasing to $9 million in 2024 from $7 million in 2023[102]. - Depreciation of property and equipment totaled $72 million in the 2024 six-month period, up from $70 million in 2023, primarily due to the addition of depreciable assets[102]. - Amortization of intangible assets decreased to $63 million in the 2024 six-month period from $99 million in 2023, attributed to certain finite-lived intangible assets becoming fully amortized[102]. Interest and Debt - Interest expense increased by $9 million to $118 million, primarily due to rising interest rates on the floating rate Senior Credit Agreement[94]. - Interest expense increased by $20 million to $233 million in the 2024 six-month period, driven by higher interest rates on the floating rate Senior Credit Agreement, which rose to 8.3% from 7.6%[104]. - The company undertook refinancing activities, including amending its Senior Credit Facility to increase commitments to $680 million and extending the maturity date to December 31, 2027[87]. - As of June 30, 2024, total long-term debt includes $10 million under 2026 Notes, $700 million under 2027 Notes, $1.25 billion under 2029 Notes, $800 million under 2030 Notes, and $1.3 billion under 2031 Notes[121]. - The Senior Credit Facility has total commitments of $2.2 billion, comprising a $1.5 billion term loan facility, a $500 million term loan facility, and $200 million outstanding under the Revolving Credit Facility[121]. - The company estimates approximately $507 million in debt interest payments over the twelve months following June 30, 2024[111]. - The First Lien Leverage Ratio stands at 3.21, below the maximum permitted incurrence of 4.00 to 1.00[120]. Cash Flow - Net cash provided by operating activities was $86 million in the 2024 six-month period, a decrease of $373 million compared to $459 million in 2023, primarily due to changes in working capital accounts[108]. - Net cash provided by investing activities was $50 million in the 2024 six-month period, compared to a net cash used of $187 million in 2023, largely due to decreased purchases of property and equipment[109]. - Net cash used in financing activities was $82 million in the 2024 six-month period, significantly lower than $297 million in 2023, with $1.25 billion issued in 2029 Notes and $500 million in the 2024 Term Loan[110]. Taxation - The effective income tax rate for the 2024 six-month period was 26%, up from 18% in 2023, with an income tax expense of $38 million recognized in 2024[106]. - Federal and state income tax payments made in the first half of 2024 totaled $85 million, with anticipated payments for the remainder of 2024 ranging from $92 million to $102 million[125]. - As of June 30, 2024, the company has approximately $282 million in state operating loss carryforwards, with an estimated $201 million not expected to be utilized due to limitations[125]. Market Presence and Future Expectations - The company operates in 113 television markets, reaching approximately 36% of U.S. television households, with a significant presence in the Hispanic market[82]. - Political advertising spending is expected to peak in the fourth quarter of election years, contributing to revenue fluctuations[85]. - Routine capital expenditures for the remainder of 2024 are expected to be between $54 million and $64 million, with Assembly Atlanta capital expenditures projected at approximately $21 million[123]. - The company expects to receive approximately $25 million from Assembly Atlanta CID incentive payments for the remainder of 2024[123]. - The market risk profile as of June 30, 2024, has not materially changed since December 31, 2023[129]. Other Financial Activities - The company recognized a gain of $110 million from the sale of its investment in BMI during the 2024 six-month period[103]. - A non-cash loss on disposal of $14 million is expected from the sale of television stations KCWY and KGWN, completed on July 1, 2024[124]. - The company was in compliance with all covenants in its debt agreements as of June 30, 2024[121].
Gray Television(GTN_A) - 2024 Q2 - Quarterly Report