Revenue Performance - Total revenue for 2023 decreased by $395 million, or 11%, to $3.3 billion compared to 2022[203]. - Core advertising revenue increased by $18 million, while political advertising revenue decreased by $436 million due to 2023 being an "off-year" in the election cycle[204]. - Retransmission consent revenue increased by $36 million, attributed to higher rates despite a decrease in subscribers[204]. Expenses - Broadcasting expenses increased by $103 million, or 5%, to $2.3 billion in 2023 compared to 2022[203]. - Corporate and administrative expenses rose by $8 million, or 8%, to $112 million in 2023, primarily due to increased compensation and professional services costs[205]. - Depreciation of property and equipment totaled $145 million in 2023, up from $129 million in 2022[206]. - Interest expense increased by $86 million, or 24%, to $440 million in 2023 compared to 2022, with the average interest rate on outstanding debt rising to 6.5% from 5.1%[210]. Impairment and Losses - A non-cash charge of $43 million was recorded for impairment of goodwill and other intangible assets due to the bankruptcy of Diamond[207]. - The company recognized a loss on disposal of assets of $21 million in 2023, compared to a gain of $2 million in 2022[208]. - Total impairment charges for investments were $29 million in 2023, compared to $18 million in 2022[209]. - In 2023, 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[250]. Cash Flow and Investments - Net cash provided by operating activities decreased by $181 million to $648 million in 2023, primarily due to a decrease in net income of $531 million[216]. - Net cash used in investing activities decreased by $212 million to $291 million in 2023, attributed to reduced cash for property and equipment purchases and increased cash from the sale of a television station[217]. - Net cash used in financing activities decreased by $57 million to $397 million in 2023, with $310 million used for long-term debt pre-payments[218]. Debt and Financing - Long-term debt, including current portion, decreased to $6.16 billion in 2023 from $6.46 billion in 2022[215]. - The company entered into a second amendment to its Senior Credit Facility, increasing commitments by $125 million to a total of $625 million and extending the maturity date of a $552.5 million tranche to December 31, 2027[234]. - The recorded amount of long-term debt, including the current portion, was $6.2 billion as of December 31, 2023, down from $6.5 billion in 2022[263]. Future Expectations and Plans - Capital expenditures for 2024 are expected to range between $115 million to $120 million, including approximately $21 million related to the Assembly Atlanta project[227]. - An exchange of television stations is expected to close in the second quarter of 2024, involving no additional cash consideration[232]. - The company plans to hire Jeff Gignac as the new Chief Financial Officer, effective July 1, 2024, following the retirement of Jim Ryan[235]. Tax and Operating Losses - Effective income tax rate decreased to 7% in 2023 from 26% in 2022, with estimated income tax payments for 2024 expected to be between $190 million and $210 million[211]. - As of December 31, 2023, the company had approximately $299 million in various state operating loss carryforwards, with an expectation that about one-third will be utilized[258]. Risk Management - The company expects to manage economic risks, including interest rate, liquidity, and credit risk, primarily through the management of debt funding[260]. - The company entered into interest rate caps with a combined fixed notional value of approximately $2.6 billion, limiting annual interest on variable rate debt to a maximum one-month SOFR rate of 5 percent[261]. - A 100 basis point increase in market interest rates would have increased interest expense and decreased income before income taxes by $7 million for the year ended December 31, 2023[261]. Asset Valuation - The recorded value of broadcast licenses as of December 31, 2023, was $5.3 billion, and the recorded value of goodwill was $2.6 billion, down from $2.7 billion in 2022[248]. - The company performed qualitative assessments for 59 broadcast licenses and three reporting units in 2023, concluding that all evaluated licenses were not impaired[242]. - The company has historically used discounted cash flow and market multiple approaches to estimate the fair value of its reporting units[246].
Gray Television(GTN_A) - 2023 Q4 - Annual Report