Revenue and Advertising - Total revenue for 2022 increased by approximately $1.3 billion, or 52%, to $3.7 billion compared to 2021, primarily due to acquisitions[197] - Core advertising revenue for 2022 was $1.496 billion, contributing 41% to total revenue, while political advertising revenue surged to $515 million, representing 14% of total revenue[196] Expenses and Operating Costs - Broadcasting operating expenses increased by $617 million, or 40%, to $2.2 billion in 2022, largely driven by the acquired television stations[198] - Non-payroll broadcast operating expenses increased by approximately $38 million, with retransmission expenses rising by $33 million[198] - Production company operating expenses increased by approximately $21 million in 2022 to $83 million, driven by increased business activity and costs related to Assembly Atlanta[200] - Interest expense increased by $149 million, or 73%, to $354 million in 2022 due to additional borrowings of $1.5 billion and the issuance of $1.3 billion of 2031 Notes[204] Acquisitions and Transactions - The company completed the acquisition of Meredith for $2.8 billion, adding 17 television stations in 12 local markets[190] - Transaction-related expenses for 2022 totaled $8 million, a decrease from $81 million in 2021, reflecting reduced professional services costs[188] - On February 15, 2023, the company announced a transaction to sell television station KNIN for $6 million and purchase WPGA for $6 million, pending regulatory approvals[222] Cash Flow and Financing Activities - Net cash provided by operating activities increased by $529 million to $829 million in 2022, driven by a $365 million increase in net income and a $117 million increase in non-cash expenses[207] - Net cash used in investing activities was $503 million in 2022, significantly lower than $3.5 billion in 2021, primarily due to reduced cash used for acquisitions[208] - Net cash used in financing activities was $454 million in 2022, compared to net cash provided of $2.7 billion in 2021, largely due to voluntary and required payments of $315 million under the Senior Credit Facility[209] Debt and Financial Position - Long-term debt decreased to $6.455 billion in 2022 from $6.755 billion in 2021, with cash on hand dropping to $61 million from $189 million[206] - The fair value of long-term debt was estimated at $5.7 billion as of December 31, 2022, compared to $6.9 billion in 2021[251] - A 100 basis point change in market interest rates would affect interest expense by approximately $30 million for the year ended December 31, 2022[250] - The company aims to manage interest rate risk while maintaining financial flexibility and complying with covenant requirements in financing agreements[252] Asset Valuation and Impairment - As of December 31, 2022, the recorded value of broadcast licenses was $5.3 billion, and goodwill was $2.7 billion, up from $2.6 billion in 2021[240] - In 2022, the company performed qualitative assessments for 57 broadcast licenses and three reporting units, concluding that all were not impaired[233] - The company utilized a discounted cash flow model to estimate the fair value of broadcast licenses, considering market conditions and competition[236] - For the annual goodwill impairment test in 2022, the fair values of reporting units exceeded their carrying values, indicating no impairment[237] Tax and Future Expectations - Effective income tax rate decreased to 26% in 2022 from 46% in 2021, with estimated income tax payments for 2023 expected to be between $90 million and $110 million[205] - The company has approximately $344 million in state operating loss carryforwards, with an expectation that one-third will be utilized[247] - Capital expenditures for 2023 are expected to range between $105 million to $115 million, with net capital expenditures related to the Assembly Atlanta project estimated at $70 million to $75 million[217] Financial Instruments and Risk Management - A three-year $300 million revolving accounts receivable securitization facility was established on February 23, 2023, to provide additional liquidity[223] - Interest rate caps with a notional value of approximately $2.6 billion were entered into to mitigate interest rate risk on variable rate debt[227] - The company has ascribed approximately $14 million and $136 million of value to network affiliations for acquisitions in 2022 and 2021, respectively[243]
Gray Television(GTN_A) - 2022 Q4 - Annual Report