Revenue Performance - Total revenue for 2024 increased by $363 million, or 11%, to $3.6 billion compared to 2023[208] - Core advertising revenue decreased by $24 million, primarily due to displacement during the political advertising cycle, while political advertising revenue increased by $418 million[210] - The company generated $1.49 billion in core advertising revenue, contributing 41% to total revenue for 2024[207] - Political advertising accounted for 14% of total revenue in 2024, significantly up from 2% in 2023[207] - Miscellaneous income increased to $117 million in 2024, primarily due to a $110 million gain from the sale of an investment[216] Expenses and Financial Performance - 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, attributed to higher average interest rates and reduced principal balances[217] - The effective income tax rate increased to 24% for 2024 from 7% for 2023[220] Cash Flow and Debt Management - 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] - 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] - The company repurchased and retired $373 million of outstanding debt, resulting in a $520 million reduction in total indebtedness compared to December 31, 2023[205] - As of December 31, 2024, the company estimates approximately $450 million in debt interest payments over the next twelve months, with sufficient cash flows anticipated to meet obligations[227] Capital Expenditures and Investments - The company expects capital expenditures 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 anticipates receiving approximately $35 million from agreements related to third-party leases for space at Gray-owned tower sites, with most transactions expected to close in the first half of 2025[249] Debt and Leverage Ratios - The Leverage Ratio as of December 31, 2024, was 5.49, with a maximum permitted incurrence of 7.00 to 1.00[235] - The First Lien Leverage Ratio was 2.97 as of December 31, 2024, with a maximum permitted incurrence of 3.5 to 1.00[235] - 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] Interest Rate Management - 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] Pension and Employee Benefits - The company contributed $4 million to the Gray Pension Plan in 2023, with no contributions expected in 2025[239] - Matching contributions to the Gray 401(k) Plan were approximately $28 million in 2024, compared to $26 million in 2023[240] - The Meredith Plan had combined plan assets of $22 million and projected benefit obligations of $18 million as of December 31, 2024[241] Impairment and Asset Management - 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] - 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 performed qualitative assessments for 56 broadcast licenses and three reporting units in 2024, compared to 59 licenses and one reporting unit in 2023[257] - As of December 31, 2024, the recorded value of broadcast licenses was $5.3 billion and goodwill was $2.6 billion[264] Economic Risk Management - The company manages economic risks, including interest rate, liquidity, and credit risk, primarily through managing debt funding and using interest rate swap agreements[274] - The company expects to incur amortization of intangible assets of $125 million for the year ended December 31, 2024[272]
Gray Television(GTN_A) - 2024 Q4 - Annual Report