Gray continued to execute across its portfolio of high-quality television stations and digital platforms as it combines its market-leading local news with strong network programming to deliver unparalleled reach for advertisers. In the fourth quarter of 2023, Gray’s total revenue increased by
We are particularly pleased with the performance of our television stations during the quarter, whose core advertising revenue increased 2% on a year-over-year basis. We saw continued improvement in the automobile advertising category with a 16% year-over-year increase. In addition, political advertising revenues in a non-political year were relatively strong at
In the fourth quarter, NBCUniversal completed its initial move-in activities and began its lease with us for the soundstages, offices, warehouses, mill spaces, parking and related facilities in our
On
On
On
Summary of Fourth Quarter Operating Results |
Operating Highlights (the respective 2023 periods reflect the “off-year” of the two-year political advertising cycle):
- Total revenue was
$864 million , a decrease of 19% from the fourth quarter of 2022, entirely as a result of the decrease in political advertising revenue in this off-year of the two-year political advertising cycle. - Core Advertising Revenue was
$415 million , an increase of 2% from the fourth quarter of 2022. - Retransmission revenue was
$365 million , an increase of 3% from the fourth quarter of 2022. - Net loss attributable to common stockholders was
$22 million , or$0.24 per share. - Broadcast Cash Flow was
$245 million , a decrease of 49% from the fourth quarter of 2022, due primarily to the decrease in political advertising.
Other Key Metrics
- As of
December 31, 2023 , our Total Leverage Ratio, Net of all Cash, was 5.60 times on a trailing eight-quarter basis, netting our total cash balance of$21 million and giving effect to all Transaction Related Expenses, which is calculated as set forth in our Senior Credit Facility. - Non-cash stock compensation was
$6 million and$5 million during the fourth quarters of 2023 and 2022, respectively.
Taxes
- During 2023 and 2022, we made aggregate federal and state income tax payments of
$50 million and$180 million , respectively. Based on current forecasts, during 2024, we anticipate making income tax payments within a range of$190 million to$210 million . - As of
December 31, 2023 , we have an aggregate of$299 million of various state operating loss carryforwards, of which we expect that approximately one-third will be utilized. - During 2020, we carried back certain net operating losses, resulting in a refund of
$21 million , excluding interest, that is outstanding.
Guidance for the Three-Months Ending |
Based on our current forecasts for the quarter ending
- Revenue:
- Total Core Revenue of
$365 million to$375 million , up low to mid-single digit percentage increases.- In the three months ended
March 31, 2024 , we anticipate approximately$18 million of net revenue from the broadcast of theSuper Bowl on our 49CBS channels compared to an aggregate of$6 million of net revenue relating to the broadcast of theSuper Bowl on our 27FOX channels during the three months endedMarch 31, 2023 .
- In the three months ended
- Retransmission revenue of
$375 million to$380 million . - Political revenue of
$30 million to$33 million . - Production company revenue of
$23 million to$24 million . - Total revenue of
$810 million to$830 million .
- Total Core Revenue of
- Operating Expenses:
- Broadcasting expenses of
$585 million to$595 million , including retransmission expense of approximately$235 million and non-cash stock-based compensation expense of approximately$1 million . - Production company expenses of approximately
$21 million to$22 million . - Corporate expenses of
$35 million to$40 million , including non-cash stock-based compensation expense of approximately$4 million .
- Broadcasting expenses of
Selected Operating Data (Unaudited) | |||||||||||||||
Three Months Ended | |||||||||||||||
2023 | 2022 | % Change 2023 to 2022 | 2021 | % Change 2023 to 2021 | |||||||||||
(dollars in millions) | |||||||||||||||
Revenue (less agency commissions): | |||||||||||||||
Core advertising | $ | 415 | $ | 406 | 2 | % | $ | 359 | 16 | % | |||||
Political advertising | 33 | 255 | (87 | )% | 20 | 65 | % | ||||||||
Retransmission consent | 365 | 353 | 3 | % | 294 | 24 | % | ||||||||
Other | 19 | 21 | (10 | )% | 19 | 0 | % | ||||||||
Total broadcasting revenue | 832 | 1,035 | (20 | )% | 692 | 20 | % | ||||||||
Production companies | 32 | 37 | (14 | )% | 29 | 10 | % | ||||||||
Total revenue | $ | 864 | $ | 1,072 | (19 | )% | $ | 721 | 20 | % | |||||
Operating expenses (1): | |||||||||||||||
Broadcasting | |||||||||||||||
Station expenses | $ | 371 | $ | 343 | 8 | % | $ | 274 | 35 | % | |||||
Retransmission expense | 232 | 225 | 3 | % | 171 | 36 | % | ||||||||
Transaction Related Expenses | - | 1 | (100 | )% | 3 | (100 | )% | ||||||||
Non-cash stock-based compensation | 1 | 1 | 0 | % | 1 | 0 | % | ||||||||
Total broadcasting expense | $ | 604 | $ | 570 | 6 | % | $ | 449 | 35 | % | |||||
Production companies | $ | 27 | $ | 27 | 0 | % | $ | 23 | 17 | % | |||||
Corporate and administrative | |||||||||||||||
Corporate expenses | $ | 28 | $ | 19 | 47 | % | $ | 29 | (3 | )% | |||||
Transaction Related Expenses | - | 1 | (100 | )% | 52 | (100 | )% | ||||||||
Non-cash stock-based compensation | 5 | 4 | 25 | % | 3 | 67 | % | ||||||||
Total corporate and administrative expense | $ | 33 | $ | 24 | 38 | % | $ | 84 | (61 | )% | |||||
Net (loss) income | $ | (9 | ) | $ | 186 | (105 | )% | $ | 29 | (131 | )% | ||||
Non-GAAP Cash Flow (2): | |||||||||||||||
Broadcast Cash Flow | $ | 245 | $ | 485 | (49 | )% | $ | 258 | (5 | )% | |||||
Broadcast Cash Flow Less Cash Corporate Expenses | $ | 216 | $ | 465 | (54 | )% | $ | 177 | 22 | % | |||||
Free Cash Flow (3)(4) | $ | 43 | $ | 242 | (82 | )% | $ | 59 | (27 | )% | |||||
Year Ended | |||||||||||||||
2023 | 2022 | % Change 2023 to 2022 | 2021 | % Change 2023 to 2021 | |||||||||||
(dollars in millions) | |||||||||||||||
Revenue (less agency commissions): | |||||||||||||||
Core advertising | $ | 1,514 | $ | 1,496 | 1 | % | $ | 1,190 | 27 | % | |||||
Political advertising | 79 | 515 | (85 | )% | 44 | 80 | % | ||||||||
Retransmission consent | 1,532 | 1,496 | 2 | % | 1,049 | 46 | % | ||||||||
Other | 70 | 76 | (8 | )% | 57 | 23 | % | ||||||||
Total broadcasting revenue | 3,195 | 3,583 | (11 | )% | 2,340 | 37 | % | ||||||||
Production companies | 86 | 93 | (8 | )% | 73 | 18 | % | ||||||||
Total revenue | $ | 3,281 | $ | 3,676 | (11 | )% | $ | 2,413 | 36 | % | |||||
Operating expenses (1): | |||||||||||||||
Broadcasting | |||||||||||||||
Station expenses | $ | 1,326 | $ | 1,252 | 6 | % | $ | 928 | 43 | % | |||||
Retransmission expense | 937 | 903 | 4 | % | 615 | 52 | % | ||||||||
Transaction Related Expenses | - | 6 | (100 | )% | 3 | (100 | )% | ||||||||
Non-cash stock-based compensation | 5 | 4 | 25 | % | 2 | 150 | % | ||||||||
Total broadcasting expense | $ | 2,268 | $ | 2,165 | 5 | % | $ | 1,548 | 47 | % | |||||
Production companies | $ | 115 | $ | 83 | 39 | % | $ | 62 | 85 | % | |||||
Corporate and administrative | |||||||||||||||
Corporate expenses | $ | 97 | $ | 84 | 15 | % | $ | 76 | 28 | % | |||||
Transaction Related Expenses | - | 2 | (100 | )% | 71 | (100 | )% | ||||||||
Non-cash stock-based compensation | 15 | 18 | (17 | )% | 12 | 25 | % | ||||||||
Total corporate and administrative expense | $ | 112 | $ | 104 | 8 | % | $ | 159 | (30 | )% | |||||
Net (loss) income | $ | (76 | ) | $ | 455 | (117 | )% | $ | 90 | (184 | )% | ||||
Non-GAAP Cash Flow (2): | |||||||||||||||
Broadcast Cash Flow | $ | 912 | $ | 1,440 | (37 | )% | $ | 813 | 12 | % | |||||
Broadcast Cash Flow Less Cash Corporate Expenses | $ | 815 | $ | 1,354 | (40 | )% | $ | 666 | 22 | % | |||||
Free Cash Flow (3)(4) | $ | 141 | $ | 581 | (76 | )% | $ | 238 | (41 | )% |
1) | Excludes depreciation, amortization, impairment and loss (gain) on disposal of assets, net. |
2) | See definition of non-GAAP terms and a reconciliation of the non-GAAP amounts to net income (loss) included herein. |
3) | Excludes deductions, net of reimbursements, for purchase of property, plant and equipment related to the Assembly Atlanta project of |
4) | Excludes |
Detail Table of Operating Results (Unaudited) | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
(in millions, except for net income per share data) | |||||||||||||||
Revenue (less agency commissions): | |||||||||||||||
Broadcasting | $ | 832 | $ | 1,035 | $ | 3,195 | $ | 3,583 | |||||||
Production companies | 32 | 37 | 86 | 93 | |||||||||||
Total revenue (less agency commissions) | 864 | 1,072 | 3,281 | 3,676 | |||||||||||
Operating expenses before depreciation, amortization, | |||||||||||||||
impairment and gain on disposal of assets, net: | |||||||||||||||
Broadcasting | 604 | 570 | 2,268 | 2,165 | |||||||||||
Production companies | 27 | 27 | 115 | 83 | |||||||||||
Corporate and administrative | 33 | 24 | 112 | 104 | |||||||||||
Depreciation | 39 | 33 | 145 | 129 | |||||||||||
Amortization of intangible assets | 47 | 51 | 194 | 207 | |||||||||||
Impairment of goodwill and other intangible assets | - | - | 43 | - | |||||||||||
Loss (gain) on disposal of assets, net | 1 | 4 | 21 | (2 | ) | ||||||||||
Operating expenses | 751 | 709 | 2,898 | 2,686 | |||||||||||
Operating income | 113 | 363 | 383 | 990 | |||||||||||
Other income (expense): | |||||||||||||||
Miscellaneous income (expense), net | 12 | (1 | ) | 7 | (4 | ) | |||||||||
Impairment of investments | (21 | ) | (18 | ) | (29 | ) | (18 | ) | |||||||
Interest expense | (116 | ) | (100 | ) | (440 | ) | (354 | ) | |||||||
Loss on early extinguishment of debt | - | - | (3 | ) | - | ||||||||||
Income before income tax | (12 | ) | 244 | (82 | ) | 614 | |||||||||
Income tax (benefit) expense | (3 | ) | 58 | (6 | ) | 159 | |||||||||
Net income (loss) | (9 | ) | 186 | (76 | ) | 455 | |||||||||
Preferred stock dividends | 13 | 13 | 52 | 52 | |||||||||||
Net (loss) income attributable to common stockholders | $ | (22 | ) | $ | 173 | $ | (128 | ) | $ | 403 | |||||
Basic per share information: | |||||||||||||||
Net (loss) income attributable to common stockholders | $ | (0.24 | ) | $ | 1.90 | $ | (1.39 | ) | $ | 4.38 | |||||
Weighted-average shares outstanding | 93 | 91 | 92 | 92 | |||||||||||
Diluted per share information: | |||||||||||||||
Net (loss) income attributable to common stockholders | $ | (0.24 | ) | $ | 1.88 | $ | (1.39 | ) | $ | 4.33 | |||||
Weighted-average shares outstanding | 93 | 92 | 92 | 93 | |||||||||||
Other Financial Data (Unaudited) | |||||||
Year Ended | |||||||
2023 | 2022 | ||||||
(in millions) | |||||||
Net cash provided by operating activities | $ | 648 | $ | 829 | |||
Net cash used in investing activities | (291 | ) | (503 | ) | |||
Net cash used in financing activities | (397 | ) | (454 | ) | |||
Net decrease in cash | $ | (40 | ) | $ | (128 | ) | |
As of | |||||||
2023 | 2022 | ||||||
(in millions) | |||||||
Cash | $ | 21 | $ | 61 | |||
Long-term debt, including current portion, less deferred | |||||||
financing costs | $ | 6,160 | $ | 6,455 | |||
Series A Perpetual Preferred Stock | $ | 650 | $ | 650 | |||
Borrowing availability under Revolving Credit Facility | $ | 494 | $ | 496 | |||
The Company
We are a multimedia company headquartered in
Cautionary Statements for Purposes of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act
This press release contains certain forward-looking statements that are based largely on our current expectations and reflect various estimates and assumptions by us. These statements are statements other than those of historical fact and may be identified by words such as “estimates,” “expect,” “anticipate,” “will,” “implied,” “assume” and similar expressions. Forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual results and achievements to differ materially from those expressed in such forward-looking statements. Such risks, trends and uncertainties, which in some instances are beyond our control, include: estimates of future revenue, future expenses, future tax payments and utilization of various state operating loss carryforwards, future proceeds from Assembly Atlanta property sales, future proceeds from any quasi-governmental entities related to Assembly Atlanta and other future events. We are subject to additional risks and uncertainties described in our quarterly and annual reports filed with the
Conference Call Information
We will host a conference call to discuss our fourth quarter operating results on
Gray Contacts:
Web-site: www.gray.tv
Effects of Acquisitions and Divestitures on Our Results of Operations and Non-GAAP Terms |
During 2020 and 2021, we completed several acquisition and divestiture transactions. As more fully described in our Form 10-K, to be filed with the
From time to time, we supplement our financial results prepared in accordance with GAAP by disclosing the non-GAAP financial measures, Broadcast Cash Flow, Broadcast Cash Flow Less Cash Corporate Expenses, Operating Cash Flow as defined in the Senior Credit Agreement, Free Cash Flow and Total Leverage Ratio, Net of All Cash. These non-GAAP amounts are used by us to approximate amounts used to calculate key financial performance covenants contained in our debt agreements and are used with our GAAP data to evaluate our results and liquidity.
We define Broadcast Cash Flow as net income or loss plus loss on early extinguishment of debt, non-cash corporate and administrative expenses, non-cash stock-based compensation, depreciation and amortization (including amortization of intangible assets and program broadcast rights), any loss on disposal of assets, any miscellaneous expense, interest expense, any income tax expense, non-cash 401(k) expense, Broadcast Transactions Related Expenses and broadcast other adjustments less any gain on disposal of assets, any miscellaneous income, any income tax benefits and payments for program broadcast rights.
We define Broadcast Cash Flow Less Cash Corporate Expenses as net income or loss plus loss on early extinguishment of debt, non-cash stock-based compensation, depreciation and amortization (including amortization of intangible assets and program broadcast rights), any loss on disposal of assets, any miscellaneous expense, interest expense, any income tax expense, non-cash 401(k) expense, Transaction Related Expenses and other adjustments less any gain on disposal of assets, any miscellaneous income, any income tax benefits and payments for program broadcast rights.
We define Operating Cash Flow as defined in our Senior Credit Agreement as net income or loss plus loss on early extinguishment of debt, non-cash stock-based compensation, depreciation and amortization (including amortization of intangible assets and program broadcast rights), any loss on disposal of assets, any miscellaneous expense, interest expense, any income tax expense, non-cash 401(k) expense, Transaction Related Expenses, other adjustments, certain pension expenses, synergies and other adjustments less any gain on disposal of assets, any miscellaneous income, any income tax benefits, payments for program broadcast rights, pension income and contributions to pension plans.
We define Free Cash Flow as net income or loss, plus loss on early extinguishment of debt, non-cash stock-based compensation, depreciation and amortization (including amortization of intangible assets and program broadcast rights), any loss on disposal of assets, any miscellaneous expense, any income tax expense, non-cash 401(k) expense, Transactions Related Expenses, broadcast other adjustments, certain pension expenses, synergies, other adjustments and amortization of deferred financing costs less any gain on disposal of assets, any miscellaneous income, any income tax benefits, payments for program broadcast rights, pension income, contributions to pension plans, preferred and common dividends, purchase of property and equipment (net of reimbursements and certain defined purchases) and income taxes paid (net of any refunds).
Operating Cash Flow as defined in our Senior Credit Agreement gives effect to the revenue and broadcast expenses of all completed acquisitions and divestitures as if they had been acquired or divested, respectively, on
These non-GAAP terms are not defined in GAAP and our definitions may differ from, and therefore may not be comparable to, similarly titled measures used by other companies, thereby limiting their usefulness. Such terms are used by management in addition to, and in conjunction with, results presented in accordance with GAAP and should be considered as supplements to, and not as substitutes for, net income and cash flows reported in accordance with GAAP.
Reconciliation of Non-GAAP Terms (Unaudited): | |||||||||||
Three Months Ended | |||||||||||
2023 | 2022 | 2021 | |||||||||
Net (loss) income | $ | (9 | ) | $ | 186 | $ | 29 | ||||
Adjustments to reconcile from net (loss) income to | |||||||||||
Free Cash Flow: | |||||||||||
Depreciation | 39 | 33 | 28 | ||||||||
Amortization of intangible assets | 47 | 51 | 36 | ||||||||
Non-cash stock-based compensation | 6 | 5 | 4 | ||||||||
Non-cash 401(k) expense, excluding corporate portion | 10 | 9 | 7 | ||||||||
Loss (gain) on disposal of assets, net | 1 | 4 | (4 | ) | |||||||
Miscellaneous (income) expense, net | (12 | ) | 1 | 1 | |||||||
Impairment of investments | 21 | 18 | - | ||||||||
Interest expense | 116 | 100 | 62 | ||||||||
Income tax (benefit) expense | (3 | ) | 58 | 13 | |||||||
Amortization of program broadcast rights | 8 | 12 | 12 | ||||||||
Payments for program broadcast rights | (8 | ) | (12 | ) | (11 | ) | |||||
Corporate and administrative expenses before | |||||||||||
depreciation, amortization of intangible assets and | |||||||||||
non-cash stock-based compensation | 29 | 20 | 81 | ||||||||
Broadcast Cash Flow | 245 | 485 | 258 | ||||||||
Corporate and administrative expenses excluding | |||||||||||
depreciation, amortization of intangible assets and | |||||||||||
non-cash stock-based compensation | (29 | ) | (20 | ) | (81 | ) | |||||
Broadcast Cash Flow Less Cash Corporate Expenses | 216 | 465 | 177 | ||||||||
Pension income | (1 | ) | (1 | ) | - | ||||||
Interest expense | (116 | ) | (100 | ) | (62 | ) | |||||
Amortization of deferred financing costs | 2 | 3 | 2 | ||||||||
Preferred stock dividends | (13 | ) | (13 | ) | (13 | ) | |||||
Common stock dividends | (8 | ) | (7 | ) | (8 | ) | |||||
Purchase of property and equipment (1) | (30 | ) | (53 | ) | (35 | ) | |||||
Reimbursements of property and equipment purchases (2) | - | - | 1 | ||||||||
Income taxes paid, net of refunds (3) | (7 | ) | (52 | ) | (3 | ) | |||||
Free Cash Flow | $ | 43 | $ | 242 | $ | 59 |
(1) | Excludes |
(2) | Excludes approximately |
(3) | Excludes approximately |
Reconciliation of Non-GAAP Terms (Unaudited): | |||||||||||
Year Ended | |||||||||||
2023 | 2022 | 2021 | |||||||||
Net (loss) income | $ | (76 | ) | $ | 455 | $ | 90 | ||||
Adjustments to reconcile from net (loss) income to | |||||||||||
Free Cash Flow: | |||||||||||
Depreciation | 145 | 129 | 104 | ||||||||
Amortization of intangible assets | 194 | 207 | 117 | ||||||||
Impairment of goodwill and other intangible assets | 43 | - | - | ||||||||
Non-cash stock-based compensation | 20 | 22 | 14 | ||||||||
Non-cash 401(k) expense, excluding corporate portion | 10 | 9 | 8 | ||||||||
Loss (gain) on disposal of assets, net | 21 | (2 | ) | 42 | |||||||
Miscellaneous (income) expense, net | (7 | ) | 4 | 8 | |||||||
Impairment of investments | 29 | 18 | - | ||||||||
Interest expense | 440 | 354 | 205 | ||||||||
Loss on early extinguishment of debt | 3 | - | - | ||||||||
Income tax (benefit) expense | (6 | ) | 159 | 78 | |||||||
Amortization of program broadcast rights | 37 | 48 | 38 | ||||||||
Payments for program broadcast rights | (38 | ) | (49 | ) | (38 | ) | |||||
Corporate and administrative expenses before | |||||||||||
depreciation, amortization of intangible assets and | |||||||||||
non-cash stock-based compensation | 97 | 86 | 147 | ||||||||
Broadcast Cash Flow | 912 | 1,440 | 813 | ||||||||
Corporate and administrative expenses before | |||||||||||
depreciation, amortization of intangible assets and | |||||||||||
non-cash stock-based compensation | (97 | ) | (86 | ) | (147 | ) | |||||
Broadcast Cash Flow Less Cash Corporate Expenses | 815 | 1,354 | 666 | ||||||||
Pension income | (2 | ) | (3 | ) | - | ||||||
Contributions to pension plans | (4 | ) | (4 | ) | (4 | ) | |||||
Interest expense | (440 | ) | (354 | ) | (205 | ) | |||||
Amortization of deferred financing costs | 12 | 15 | 11 | ||||||||
Preferred stock dividends | (52 | ) | (52 | ) | (52 | ) | |||||
Common stock dividends | (30 | ) | (30 | ) | (31 | ) | |||||
Purchase of property and equipment (1) | (108 | ) | (172 | ) | (98 | ) | |||||
Reimbursements of property and equipment purchases (2) | - | 7 | 11 | ||||||||
Income taxes paid, net of refunds (3) | (50 | ) | (180 | ) | (60 | ) | |||||
Free Cash Flow | $ | 141 | $ | 581 | $ | 238 |
(1) | Excludes approximately |
(2) | Excludes approximately |
(3) | Excludes |
Reconciliation of Total Leverage Ratio, Net of All Cash (Unaudited): | ||||
Eight Quarters Ended | ||||
(in millions) | ||||
Net income | $ | 379 | ||
Adjustments to reconcile from net income to operating cash flow as defined in our Senior Credit Agreement: | ||||
Depreciation | 274 | |||
Amortization of intangible assets | 401 | |||
Impairment of goodwill and other intangible assets | 43 | |||
Non-cash stock-based compensation | 42 | |||
Non-cash 401(k) expense | 19 | |||
Loss on disposal of assets, net | 19 | |||
Impairment of investments | 47 | |||
Interest expense | 794 | |||
Loss on early extinguishment of debt | 3 | |||
Income tax expense | 153 | |||
Amortization of program broadcast rights | 85 | |||
Payments for program broadcast rights | (87 | ) | ||
Pension gain | (5 | ) | ||
Contributions to pension plan | (7 | ) | ||
Adjustments for unrestricted subsidiaries | 45 | |||
Adjustments for stations acquired or divested, financings and expected synergies during the eight quarter period | (2 | ) | ||
Transaction Related Expenses | 9 | |||
Other | 1 | |||
Operating Cash Flow, as defined in our Senior Credit Agreement | $ | 2,213 | ||
Operating Cash Flow, as defined in our Senior Credit Agreement, divided by two | $ | 1,107 | ||
Adjusted Total Indebtedness: | ||||
Total outstanding principal | $ | 6,210 | ||
Letters of credit outstanding | 5 | |||
Cash | (21 | ) | ||
Adjusted Total Indebtedness, Net of All Cash | $ | 6,194 | ||
Total Leverage Ratio, Net of All Cash | 5.60 | |||
Source:
2024 GlobeNewswire, Inc., source