gtn20200630_10q.htm
0000043196 GRAY TELEVISION INC false --12-31 Q2 2020 15 11 0 0 1,500,000 1,500,000 650,000 650,000 650,000 650,000 650 650 0 0 200,000,000 200,000,000 103,068,640 101,746,860 89,740,619 92,685,362 0 0 25,000,000 25,000,000 8,935,773 8,768,959 7,048,006 6,881,192 13,328,021 9,088,498 1,887,767 1,887,767 0 0 3.7 0 27,802 69,262 15,066 0 1 For awards subject to future performance conditions, amounts assume target performance. 00000431962020-01-012020-06-30 0000043196us-gaap:CommonClassAMember2020-01-012020-06-30 0000043196us-gaap:CommonStockMember2020-01-012020-06-30 xbrli:shares 0000043196us-gaap:CommonStockMember2020-07-31 0000043196us-gaap:CommonClassAMember2020-07-31 thunderdome:item iso4217:USD 00000431962020-06-30 00000431962019-12-31 iso4217:USDxbrli:shares 0000043196us-gaap:CommonClassAMember2020-06-30 0000043196us-gaap:CommonClassAMember2019-12-31 0000043196gtn:BroadcastingSegmentMember2020-04-012020-06-30 0000043196gtn:BroadcastingSegmentMember2019-04-012019-06-30 0000043196gtn:BroadcastingSegmentMember2020-01-012020-06-30 0000043196gtn:BroadcastingSegmentMember2019-01-012019-06-30 0000043196gtn:ProductionCompaniesSegmentMember2020-04-012020-06-30 0000043196gtn:ProductionCompaniesSegmentMember2019-04-012019-06-30 0000043196gtn:ProductionCompaniesSegmentMember2020-01-012020-06-30 0000043196gtn:ProductionCompaniesSegmentMember2019-01-012019-06-30 00000431962020-04-012020-06-30 00000431962019-04-012019-06-30 00000431962019-01-012019-06-30 0000043196us-gaap:CommonClassAMemberus-gaap:CommonStockMember2018-12-31 0000043196us-gaap:CommonStockMember2018-12-31 0000043196us-gaap:RetainedEarningsMember2018-12-31 0000043196us-gaap:CommonClassAMemberus-gaap:TreasuryStockMember2018-12-31 0000043196us-gaap:TreasuryStockMember2018-12-31 0000043196us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-12-31 00000431962018-12-31 0000043196us-gaap:CommonClassAMemberus-gaap:CommonStockMember2019-01-012019-03-31 0000043196us-gaap:CommonStockMember2019-01-012019-03-31 0000043196us-gaap:RetainedEarningsMember2019-01-012019-03-31 0000043196us-gaap:CommonClassAMemberus-gaap:TreasuryStockMember2019-01-012019-03-31 0000043196us-gaap:TreasuryStockMember2019-01-012019-03-31 0000043196us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-01-012019-03-31 00000431962019-01-012019-03-31 0000043196us-gaap:CommonClassAMemberus-gaap:CommonStockMember2019-03-31 0000043196us-gaap:CommonStockMember2019-03-31 0000043196us-gaap:RetainedEarningsMember2019-03-31 0000043196us-gaap:CommonClassAMemberus-gaap:TreasuryStockMember2019-03-31 0000043196us-gaap:TreasuryStockMember2019-03-31 0000043196us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-03-31 00000431962019-03-31 0000043196us-gaap:CommonClassAMemberus-gaap:CommonStockMember2019-04-012019-06-30 0000043196us-gaap:CommonStockMember2019-04-012019-06-30 0000043196us-gaap:RetainedEarningsMember2019-04-012019-06-30 0000043196us-gaap:CommonClassAMemberus-gaap:TreasuryStockMember2019-04-012019-06-30 0000043196us-gaap:TreasuryStockMember2019-04-012019-06-30 0000043196us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-04-012019-06-30 0000043196us-gaap:CommonClassAMemberus-gaap:CommonStockMember2019-06-30 0000043196us-gaap:CommonStockMember2019-06-30 0000043196us-gaap:RetainedEarningsMember2019-06-30 0000043196us-gaap:CommonClassAMemberus-gaap:TreasuryStockMember2019-06-30 0000043196us-gaap:TreasuryStockMember2019-06-30 0000043196us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-06-30 00000431962019-06-30 0000043196us-gaap:CommonClassAMemberus-gaap:CommonStockMember2019-12-31 0000043196us-gaap:CommonStockMember2019-12-31 0000043196us-gaap:RetainedEarningsMember2019-12-31 0000043196us-gaap:CommonClassAMemberus-gaap:TreasuryStockMember2019-12-31 0000043196us-gaap:TreasuryStockMember2019-12-31 0000043196us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-31 0000043196us-gaap:CommonClassAMemberus-gaap:CommonStockMember2020-01-012020-03-31 0000043196us-gaap:CommonStockMember2020-01-012020-03-31 0000043196us-gaap:RetainedEarningsMember2020-01-012020-03-31 0000043196us-gaap:CommonClassAMemberus-gaap:TreasuryStockMember2020-01-012020-03-31 0000043196us-gaap:TreasuryStockMember2020-01-012020-03-31 0000043196us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-03-31 00000431962020-01-012020-03-31 0000043196us-gaap:CommonClassAMemberus-gaap:CommonStockMember2020-03-31 0000043196us-gaap:CommonStockMember2020-03-31 0000043196us-gaap:RetainedEarningsMember2020-03-31 0000043196us-gaap:CommonClassAMemberus-gaap:TreasuryStockMember2020-03-31 0000043196us-gaap:TreasuryStockMember2020-03-31 0000043196us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-03-31 00000431962020-03-31 0000043196us-gaap:CommonClassAMemberus-gaap:CommonStockMember2020-04-012020-06-30 0000043196us-gaap:CommonStockMember2020-04-012020-06-30 0000043196us-gaap:RetainedEarningsMember2020-04-012020-06-30 0000043196us-gaap:CommonClassAMemberus-gaap:TreasuryStockMember2020-04-012020-06-30 0000043196us-gaap:TreasuryStockMember2020-04-012020-06-30 0000043196us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-04-012020-06-30 0000043196us-gaap:CommonClassAMemberus-gaap:CommonStockMember2020-06-30 0000043196us-gaap:CommonStockMember2020-06-30 0000043196us-gaap:RetainedEarningsMember2020-06-30 0000043196us-gaap:CommonClassAMemberus-gaap:TreasuryStockMember2020-06-30 0000043196us-gaap:TreasuryStockMember2020-06-30 0000043196us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-06-30 xbrli:pure 0000043196us-gaap:LandMember2020-03-31 0000043196us-gaap:LandMember2019-12-31 0000043196us-gaap:BuildingAndBuildingImprovementsMember2020-03-31 0000043196us-gaap:BuildingAndBuildingImprovementsMember2019-12-31 utr:Y 0000043196us-gaap:BuildingAndBuildingImprovementsMembersrt:MinimumMember2020-01-012020-03-31 0000043196us-gaap:BuildingAndBuildingImprovementsMembersrt:MaximumMember2020-01-012020-03-31 0000043196us-gaap:EquipmentMember2020-03-31 0000043196us-gaap:EquipmentMember2019-12-31 0000043196us-gaap:EquipmentMembersrt:MinimumMember2020-01-012020-03-31 0000043196us-gaap:EquipmentMembersrt:MaximumMember2020-01-012020-03-31 0000043196gtn:DeferredRevenueMember2020-06-30 0000043196gtn:DeferredRevenueMember2019-12-31 0000043196gtn:LocalAdvertisingMember2020-04-012020-06-30 0000043196gtn:LocalAdvertisingMember2019-04-012019-06-30 0000043196gtn:LocalAdvertisingMember2020-01-012020-06-30 0000043196gtn:LocalAdvertisingMember2019-01-012019-06-30 0000043196gtn:NationalAdvertisingMember2020-04-012020-06-30 0000043196gtn:NationalAdvertisingMember2019-04-012019-06-30 0000043196gtn:NationalAdvertisingMember2020-01-012020-06-30 0000043196gtn:NationalAdvertisingMember2019-01-012019-06-30 0000043196gtn:PoliticalAdvertisingMember2020-04-012020-06-30 0000043196gtn:PoliticalAdvertisingMember2019-04-012019-06-30 0000043196gtn:PoliticalAdvertisingMember2020-01-012020-06-30 0000043196gtn:PoliticalAdvertisingMember2019-01-012019-06-30 0000043196us-gaap:AdvertisingMember2020-04-012020-06-30 0000043196us-gaap:AdvertisingMember2019-04-012019-06-30 0000043196us-gaap:AdvertisingMember2020-01-012020-06-30 0000043196us-gaap:AdvertisingMember2019-01-012019-06-30 0000043196gtn:RetransmissionConsentMember2020-04-012020-06-30 0000043196gtn:RetransmissionConsentMember2019-04-012019-06-30 0000043196gtn:RetransmissionConsentMember2020-01-012020-06-30 0000043196gtn:RetransmissionConsentMember2019-01-012019-06-30 0000043196gtn:ProductionCompaniesMember2020-04-012020-06-30 0000043196gtn:ProductionCompaniesMember2019-04-012019-06-30 0000043196gtn:ProductionCompaniesMember2020-01-012020-06-30 0000043196gtn:ProductionCompaniesMember2019-01-012019-06-30 0000043196us-gaap:ServiceOtherMember2020-04-012020-06-30 0000043196us-gaap:ServiceOtherMember2019-04-012019-06-30 0000043196us-gaap:ServiceOtherMember2020-01-012020-06-30 0000043196us-gaap:ServiceOtherMember2019-01-012019-06-30 0000043196us-gaap:SalesChannelDirectlyToConsumerMember2020-04-012020-06-30 0000043196us-gaap:SalesChannelDirectlyToConsumerMember2019-04-012019-06-30 0000043196us-gaap:SalesChannelDirectlyToConsumerMember2020-01-012020-06-30 0000043196us-gaap:SalesChannelDirectlyToConsumerMember2019-01-012019-06-30 0000043196us-gaap:SalesChannelThroughIntermediaryMember2020-04-012020-06-30 0000043196us-gaap:SalesChannelThroughIntermediaryMember2019-04-012019-06-30 0000043196us-gaap:SalesChannelThroughIntermediaryMember2020-01-012020-06-30 0000043196us-gaap:SalesChannelThroughIntermediaryMember2019-01-012019-06-30 0000043196gtn:Notes2024Member2019-12-31 0000043196gtn:Notes2024Member2020-06-30 0000043196gtn:Notes2026Member2020-06-30 0000043196gtn:Notes2026Member2019-12-31 0000043196gtn:Notes2027Member2020-06-30 0000043196gtn:Notes2027Member2019-12-31 0000043196gtn:The2017TermLoanMember2020-06-30 0000043196gtn:The2017TermLoanMember2019-12-31 0000043196gtn:The2019TermLoanMember2020-06-30 0000043196gtn:The2019TermLoanMember2019-12-31 0000043196gtn:The2019SeniorCreditFacilityMember2020-06-30 0000043196gtn:The2019SeniorCreditFacilityMember2019-12-31 0000043196gtn:The2019SeniorCreditFacilityMembergtn:The2019TermLoanMember2020-06-30 0000043196gtn:The2017SeniorCreditFacilityMembergtn:The2017TermLoanMember2020-06-30 0000043196gtn:RaycomMemberus-gaap:CommonStockMember2019-01-022019-01-02 0000043196gtn:RaycomMemberus-gaap:CommonStockMember2019-01-02 0000043196gtn:RepurchaseAuthorization2019Member2019-11-05 0000043196gtn:IssuersRepurchaseProgram2019Member2020-01-012020-06-30 0000043196gtn:RepurchaseAuthorization2019Member2020-04-012020-06-30 0000043196gtn:RepurchaseAuthorization2019Member2020-06-30 0000043196gtn:GrayPensionPlanMemberus-gaap:PensionPlansDefinedBenefitMember2020-06-30 0000043196gtn:ProfitSharingContributionMember2020-04-012020-06-30 0000043196gtn:ProfitSharingContributionMember2020-01-012020-06-30 0000043196gtn:ProfitSharingContributionMember2020-01-012020-03-31 0000043196gtn:ProfitSharingContributionMember2020-06-30 0000043196us-gaap:RestrictedStockMembergtn:NonemployeeDirectorsMember2020-01-012020-06-30 0000043196gtn:ServiceBasedRestrictedStockMemberus-gaap:CommonClassAMembergtn:EmployeeMember2020-01-012020-06-30 0000043196gtn:ServiceBasedRestrictedStockMemberus-gaap:CommonClassAMembergtn:EmployeeMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2020-01-012020-06-30 0000043196gtn:ServiceBasedRestrictedStockMemberus-gaap:CommonClassAMembergtn:EmployeeMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2020-01-012020-06-30 0000043196gtn:ServiceBasedRestrictedStockMemberus-gaap:CommonClassAMembergtn:EmployeeMemberus-gaap:ShareBasedCompensationAwardTrancheThreeMember2020-01-012020-06-30 0000043196gtn:PerformanceBasedRestrictedStockMemberus-gaap:CommonClassAMembergtn:EmployeeMember2020-01-012020-06-30 0000043196gtn:ServiceBasedRestrictedStockMembergtn:EmployeeMember2020-01-012020-06-30 0000043196gtn:ServiceBasedRestrictedStockMembergtn:EmployeeMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2020-01-012020-06-30 0000043196gtn:ServiceBasedRestrictedStockMembergtn:EmployeeMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2020-01-012020-06-30 0000043196gtn:ServiceBasedRestrictedStockMembergtn:EmployeeMemberus-gaap:ShareBasedCompensationAwardTrancheThreeMember2020-01-012020-06-30 0000043196gtn:PerformanceBasedRestrictedStockMembergtn:EmployeeMember2020-01-012020-06-30 0000043196us-gaap:RestrictedStockUnitsRSUMembergtn:EmployeeMember2020-01-012020-06-30 0000043196us-gaap:RestrictedStockUnitsRSUMembergtn:EmployeeMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2020-01-012020-06-30 0000043196us-gaap:RestrictedStockUnitsRSUMembergtn:EmployeeMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2020-01-012020-06-30 0000043196us-gaap:RestrictedStockUnitsRSUMembergtn:EmployeeMemberus-gaap:ShareBasedCompensationAwardTrancheThreeMember2020-01-012020-06-30 0000043196us-gaap:RestrictedStockUnitsRSUMembergtn:CertainEmployeesOneMember2020-01-012020-06-30 0000043196gtn:ServiceBasedRestrictedStockMemberus-gaap:CommonClassAMembergtn:EmployeeMember2019-01-012019-06-30 0000043196gtn:ServiceBasedRestrictedStockMemberus-gaap:CommonClassAMembergtn:EmployeeMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2019-01-012019-06-30 0000043196gtn:ServiceBasedRestrictedStockMemberus-gaap:CommonClassAMembergtn:EmployeeMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2019-01-012019-06-30 0000043196gtn:ServiceBasedRestrictedStockMemberus-gaap:CommonClassAMembergtn:EmployeeMemberus-gaap:ShareBasedCompensationAwardTrancheThreeMember2019-01-012019-06-30 0000043196gtn:PerformanceBasedRestrictedStockMemberus-gaap:CommonClassAMembergtn:EmployeeMember2019-01-012019-06-30 0000043196us-gaap:RestrictedStockMembergtn:CertainEmployeesOneMember2019-01-012019-06-30 0000043196us-gaap:RestrictedStockMembergtn:CertainEmployeesTwoMember2019-01-012019-06-30 0000043196us-gaap:RestrictedStockMembergtn:CertainEmployeesTwoMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2019-01-012019-06-30 0000043196us-gaap:RestrictedStockMembergtn:CertainEmployeesTwoMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2019-01-012019-06-30 0000043196us-gaap:RestrictedStockMembergtn:CertainEmployeesTwoMemberus-gaap:ShareBasedCompensationAwardTrancheThreeMember2019-01-012019-06-30 0000043196gtn:PerformanceBasedRestrictedStockMembergtn:EmployeeMember2019-01-012019-06-30 0000043196us-gaap:RestrictedStockMembergtn:EmployeeMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2019-01-012019-06-30 0000043196us-gaap:RestrictedStockMembergtn:NonemployeeDirectorsMember2019-01-012019-06-30 0000043196us-gaap:RestrictedStockUnitsRSUMember2019-01-012019-06-30 0000043196us-gaap:RestrictedStockMember2019-12-31 0000043196us-gaap:RestrictedStockMember2018-12-31 0000043196us-gaap:RestrictedStockMember2020-01-012020-06-30 0000043196us-gaap:RestrictedStockMember2019-01-012019-06-30 0000043196us-gaap:RestrictedStockMember2020-06-30 0000043196us-gaap:RestrictedStockMember2019-06-30 0000043196us-gaap:RestrictedStockMemberus-gaap:CommonClassAMember2019-12-31 0000043196us-gaap:RestrictedStockMemberus-gaap:CommonClassAMember2018-12-31 0000043196us-gaap:RestrictedStockMemberus-gaap:CommonClassAMember2020-01-012020-06-30 0000043196us-gaap:RestrictedStockMemberus-gaap:CommonClassAMember2019-01-012019-06-30 0000043196us-gaap:RestrictedStockMemberus-gaap:CommonClassAMember2020-06-30 0000043196us-gaap:RestrictedStockMemberus-gaap:CommonClassAMember2019-06-30 0000043196us-gaap:RestrictedStockUnitsRSUMember2019-12-31 0000043196us-gaap:RestrictedStockUnitsRSUMember2018-12-31 0000043196us-gaap:RestrictedStockUnitsRSUMember2020-01-012020-06-30 0000043196us-gaap:RestrictedStockUnitsRSUMember2020-06-30 0000043196us-gaap:RestrictedStockUnitsRSUMember2019-06-30 0000043196gtn:IncentivePlan2007Member2019-12-31 0000043196gtn:IncentivePlan2007Member2020-06-30 0000043196srt:MinimumMember2020-06-30 0000043196srt:MaximumMember2020-06-30 0000043196gtn:BroadcastLicensesMember2019-12-31 0000043196gtn:BroadcastLicensesMember2020-01-012020-06-30 0000043196gtn:BroadcastLicensesMember2020-06-30 0000043196gtn:GoodwillNotAmortizableMember2020-06-30 0000043196gtn:GoodwillNotAmortizableMember2019-12-31 0000043196gtn:IntangibleAssetsNotSubjectToAmortizationMember2020-06-30 0000043196gtn:IntangibleAssetsNotSubjectToAmortizationMember2019-12-31 0000043196gtn:NetworkAffiliateMember2020-06-30 0000043196gtn:NetworkAffiliateMember2019-12-31 0000043196us-gaap:OtherIntangibleAssetsMember2020-06-30 0000043196us-gaap:OtherIntangibleAssetsMember2019-12-31 0000043196gtn:IntangibleAssetsSubjectToAmortizationMember2020-06-30 0000043196gtn:IntangibleAssetsSubjectToAmortizationMember2019-12-31 0000043196us-gaap:CorporateNonSegmentMember2020-01-012020-06-30 0000043196gtn:BroadcastingSegmentMember2020-06-30 0000043196gtn:ProductionCompaniesSegmentMember2020-06-30 0000043196us-gaap:CorporateNonSegmentMember2020-06-30 0000043196us-gaap:CorporateNonSegmentMember2019-01-012019-06-30 0000043196gtn:BroadcastingSegmentMember2019-12-31 0000043196gtn:ProductionCompaniesSegmentMember2019-12-31 0000043196us-gaap:CorporateNonSegmentMember2019-12-31
 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark one)

 

Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 2020 or

 

Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from _________ to _________ .

 

 Commission file number: 1-13796

 

Gray Television, Inc.

(Exact name of registrant as specified in its charter)

 

Georgia

 

58-0285030

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification Number)

   

4370 Peachtree Road, NE, Atlanta, Georgia

 

30319

(Address of principal executive offices)

 

(Zip code)

 

(404) 504-9828

(Registrant's telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report.)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each Class

Trading Symbol(s)

Name of each exchange on which registered

Class A common stock (no par value)

GTN.A

New York Stock Exchange

common stock (no par value)

GTN

New York Stock Exchange

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filerAccelerated filer ☐
Non-accelerated filer ☐Smaller reporting company
Emerging growth company  

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).                        Yes No ☑

 

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date.

 

Common Stock (No Par Value)

 

Class A Common Stock (No Par Value)

89,740,619 shares outstanding as of July 31, 2020

 

7,048,006 shares outstanding as of July 31, 2020

  

 

 

 

INDEX

 

GRAY TELEVISION, INC.

 

 

    PAGE

PART I.

FINANCIAL INFORMATION

 

       

Item 1.

Financial Statements

   
       
 

Condensed consolidated balance sheets (Unaudited) -  June 30, 2020 and December 31, 2019

3

 
       
 

Condensed consolidated statements of operations (Unaudited) - three-months and six-months ended June 30, 2020 and 2019

5

 
       
 

Condensed consolidated statements of stockholders' equity (Unaudited) - six-months ended June 30, 2020 and 2019

6

 
       
 

Condensed consolidated statements of cash flows (Unaudited) - six-months ended June 30, 2020 and 2019

7

 
       
 

Notes to condensed consolidated financial statements (Unaudited)

8

 
       

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

22

 
       

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

28

 
       

Item 4.

Controls and Procedures

28

 
       

PART II.

OTHER INFORMATION

   
       

Item 1A.

Risk Factors

29

 
       

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

29

 
       

Item 6.

Exhibits

30

 
       

SIGNATURES

 

31

 

 

2

 

 

PART I.

FINANCIAL INFORMATION

 

Item 1.

Financial Statements

 

GRAY TELEVISION, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(in millions)

 

  

June 30,

  

December 31,

 
  

2020

  

2019

 

Assets:

        

Current assets:

        

Cash

 $379  $212 

Accounts receivable trade, less allowance for credit losses of $15 and $11, respectively

  354   411 

Current portion of program broadcast rights, net

  8   25 

Prepaid and other current assets

  18   24 

Total current assets

  759   672 
         

Property and equipment, net

  732   725 

Operating leases right of use asset

  59   50 

Broadcast licenses

  3,574   3,573 

Goodwill

  1,446   1,446 

Other intangible assets, net

  408   460 

Investments in broadcasting and technology companies

  49   31 

Other

  13   15 

Total assets

 $7,040  $6,972 

 

See notes to condensed consolidated financial statements.

  

3

 

GRAY TELEVISION, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(in millions, except for share data)

 

  

June 30,

  

December 31,

 
  

2020

  

2019

 

Liabilities and stockholders’ equity:

        

Current liabilities:

        

Accounts payable

 $86  $11 

Employee compensation and benefits

  55   67 

Accrued interest

  35   37 

Accrued network programming fees

  37   30 

Other accrued expenses

  22   32 

Federal and state income taxes

  23   13 

Current portion of program broadcast obligations

  9   28 

Deferred revenue

  10   9 

Dividends payable

  13   13 

Current portion of operating lease liabilities

  7   6 

Total current liabilities

  297   246 
         

Long-term debt, less current portion and deferred financing costs

  3,703   3,697 

Program broadcast obligations, less current portion

  6   7 

Deferred income taxes

  824   810 

Accrued pension costs

  37   38 

Operating lease liabilities, less current portion

  54   45 

Other

  11   15 

Total liabilities

  4,932   4,858 
         

Commitments and contingencies (Note 9)

          
         

Series A Perpetual Preferred Stock, no par value; cumulative; redeemable; designated 1,500,000 shares, issued and outstanding 650,000 shares at each date, ($650 aggregate liquidation value at each date)

  650   650 
         

Stockholders’ equity:

        

Common stock, no par value; authorized 200,000,000 shares, issued 103,068,640 shares and 101,746,860 shares, respectively, and outstanding 89,740,619 shares and 92,658,362 shares, respectively

  1,104   1,093 

Class A common stock, no par value; authorized 25,000,000 shares, issued 8,935,773 shares and 8,768,959 shares, respectively, and outstanding 7,048,006 shares and 6,881,192 shares, respectively

  31   31 

Retained earnings

  542   504 

Accumulated other comprehensive loss, net of income tax benefit

  (31)  (31)
   1,646   1,597 

Treasury stock at cost, common stock, 13,328,021 shares and 9,088,498 shares, respectively

  (162)  (107)

Treasury stock at cost, Class A common stock, 1,887,767 shares and 1,887,767 shares, respectively

  (26)  (26)

Total stockholders’ equity

  1,458   1,464 

Total liabilities and stockholders’ equity

 $7,040  $6,972 

 

See notes to condensed consolidated financial statements.

  

4

 

 

GRAY TELEVISION, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(in millions, except for per share data)

 

   

Three Months Ended

   

Six Months Ended

 
   

June 30,

   

June 30,

 
   

2020

   

2019

   

2020

   

2019

 
                                 

Revenue (less agency commissions)

                               

Broadcasting

  $ 449     $ 499     $ 964     $ 980  

Production companies

    2       9       21       46  

Total revenue (less agency commissions)

    451       508       985       1,026  

Operating expenses before depreciation, amortization and loss (gain) on disposal of assets, net:

                               

Broadcast

    324       314       659       670  

Production companies

    5       9       24       44  

Corporate and administrative

    17       21       32       69  

Depreciation

    21       20       42       40  

Amortization of intangible assets

    26       28       52       57  

Gain on disposals of assets, net

    (7 )     (3 )     (13 )     (13 )

Operating expenses

    386       389       796       867  

Operating income

    65       119       189       159  

Other income (expense):

                               

Miscellaneous (expense) income, net

    (2 )     1       (3 )     4  

Interest expense

    (46 )     (58 )     (98 )     (116 )

Income before income taxes

    17       62       88       47  

Income tax expense

    6       18       24       21  

Net income

    11       44       64       26  

Preferred stock dividends

    13       13       26       26  

Net (loss) income attributable to common stockholders

  $ (2 )   $ 31     $ 38     $ -  
                                 

Basic per common share information:

                               

Net (loss) income attributable to common stockholders

  $ (0.02 )   $ 0.31     $ 0.39     $ -  

Weighted-average shares outstanding

    97       100       98       100  
                                 

Diluted per common share information:

                               

Net (loss) income attributable to common stockholders

  $ (0.02 )   $ 0.31     $ 0.39     $ -  

Weighted-average shares outstanding

    97       101       98       100  
                                 

Dividends declared per common share

  $ -     $ -     $ -     $ -  

 

See notes to condensed consolidated financial statements.

 

5

 

GRAY TELEVISION, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited)

(in millions, except for number of shares)

 

                                                                           

Accumulated

         
   

Class A

                           

Class A

   

Common

   

Other

         
   

Common Stock

   

Common Stock

   

Retained

   

Treasury Stock

   

Treasury Stock

   

Comprehensive

         
   

Shares

   

Amount

   

Shares

   

Amount

   

Earnings

   

Shares

   

Amount

   

Shares

   

Amount

   

Loss

   

Total

 
                                                                                         

Balance at December 31, 2018

    8,569,149     $ 27       89,298,943     $ 907     $ 372       (1,840,114 )   $ (26 )     (7,276,443 )   $ (72 )   $ (21 )   $ 1,187  
                                                                                         

Net loss

    -       -       -       -       (18 )     -       -       -       -       -       (18 )
                                                                                         

Preferred stock dividends

    -       -       -       -       (13 )     -       -       -       -       -       (13 )
                                                                                         

Issuance of common stock:

                                                                                       

Acquisitions of television businesses and licenses

    -       -       11,499,945       170       -       -       -       -       -       -       170  

401(k) Plan

    -       -       196,509       4       -       -       -       -       -       -       4  

2017 Equity and Incentive Compensation Plan -

                                                                                       

Restricted stock awards

    199,810       -       677,602       -       -       (47,653 )     -       (123,167 )     (3 )     -       (3 )
                                                                                         

Stock-based compensation

    -       -       -       2       -       -       -       -       -       -       2  
                                                                                         

Adoption of ASU 2018-02

    -       -       -       -       2       -       -       -       -       (2 )     -  
                                                                                         

Balance at March 31, 2019

    8,768,959     $ 27       101,672,999     $ 1,083     $ 343       (1,887,767 )   $ (26 )     (7,399,610 )   $ (75 )   $ (23 )   $ 1,329  
                                                                                         

Net income

    -       -       -       -       44       -       -       -       -       -       44  
                                                                                         

Preferred stock dividends

    -       -       -       -       (13 )     -       -       -       -       -       (13 )
                                                                                         

Issuance of common stock:

                                                                                       

2017 Equity and Incentive Compensation Plan -

                                                                                       

Restricted stock awards

    -       -       41,181       -       -       -       -       (29,204 )     -       -       -  
                                                                                         

Stock-based compensation

    -       -       -       3       -       -       -       -       -       -       3  
                                                                                         

Adoption of ASU 2018-02

    -       -       -       -       3       -       -       -       -       (3 )     -  
                                                                                         

Balance at June 30, 2019

    8,768,959     $ 27       101,714,180     $ 1,086     $ 377       (1,887,767 )   $ (26 )     (7,428,814 )   $ (75 )   $ (26 )   $ 1,363  
                                                                                         
                                                                                         

Balance at December 31, 2019

    8,768,959     $ 31       101,746,860     $ 1,093     $ 504       (1,887,767 )   $ (26 )     (9,088,498 )   $ (107 )   $ (31 )   $ 1,464  
                                                                                         

Net income

    -       -       -       -       53       -       -       -       -       -       53  
                                                                                         

Preferred stock dividends

    -       -       -       -       (13 )     -       -       -       -       -       (13 )
                                                                                         

Issuance of common stock:

                                                                                       

401(k) Plan

    -       -       430,899       4       -       -       -       -       -       -       4  

2007 Long Term Incentive Plan - stock options exercised

    -       -       274,746       -       -       -       -       (154,935 )     (2 )     -       (2 )

2017 Equity and Incentive Compensation Plan:

                                                                                       

Restricted stock awards

    166,814       -       248,543       -       -       -       -       (118,550 )     (2 )     -       (2 )

Forfeiture of restricted stock awards

    -       -       (85,630 )     -       -       -       -       -       -       -       -  
                                                                                         

Repurchase of common stock

    -       -       -       -       -       -       -       (500,923 )     (6 )     -       (6 )
                                                                                         

Stock-based compensation

    -       -       -       4       -       -       -       -       -       -       4  
                                                                                         

Balance at March 31, 2020

    8,935,773     $ 31       102,615,418     $ 1,101     $ 544       (1,887,767 )   $ (26 )     (9,862,906 )   $ (117 )   $ (31 )   $ 1,502  
                                                                                         

Net income

    -       -       -       -       11       -       -       -       -       -       11  
                                                                                         

Preferred stock dividends

    -       -       -       -       (13 )     -       -       -       -       -       (13 )
                                                                                         

Issuance of common stock:

                                                                                       

2017 Equity and Incentive Compensation Plan:

                                                                                       

Restricted stock awards

    -       -       78,722       -       -       -       -       (17,296 )     -       -       -  

Vesting of restricted stock units

    -       -       374,500       -       -       -       -       (112,564 )     (2 )     -       (2 )
                                                                                         

Repurchase of common stock

    -       -       -       -       -       -       -       (3,335,255 )     (43 )     -       (43 )
                                                                                         

Stock-based compensation

    -       -       -       3       -       -       -       -       -       -       3  
                                                                                         

Balance at June 30, 2020

    8,935,773     $ 31       103,068,640     $ 1,104     $ 542       (1,887,767 )   $ (26 )     (13,328,021 )   $ (162 )   $ (31 )   $ 1,458  

 
See notes to condensed consolidated financial statements.  

 

6

 

 

GRAY TELEVISION, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(in millions)

 

  

Six Months Ended

 
  

June 30,

 
  

2020

  

2019

 

Operating activities

        

Net income

 $64  $26 

Adjustments to reconcile net income to net cash provided by operating activities:

        

Depreciation

  42   40 

Amortization of intangible assets

  52   57 

Amortization of deferred loan costs

  6   6 

Amortization of restricted stock and stock option awards

  7   5 

Amortization of program broadcast rights

  19   20 

Payments on program broadcast obligations

  (20)  (24)

Common stock contributed to 401(k)

  5   4 

Deferred income taxes

  13   12 

Gain on disposals of assets, net

  (13)  (13)

Other

  2   (7)

Changes in operating assets and liabilities:

        

Accounts receivable

  57   41 

Other current assets

  6   (15)

Accounts payable

  75   - 

Employee compensation, benefits and pension cost

  (12)  (14)

Accrued network fees and other expenses

  (5)  (42)

Accrued interest

  (2)  4 

Income taxes payable

  10   1 

Deferred revenue

  1   4 

Net cash provided by operating activities

  307   105 
         

Investing activities

        

Acquisitions of television businesses and licenses, net of cash acquired

  (1)  (2,789)

Proceeds from sale of television station

  -   231 

Purchases of property and equipment

  (51)  (44)

Proceeds from asset sales

  1   3 

Proceeds from FCC Repack (Note 1)

  14   17 

Acquisition prepayments

  -   (14)

Other

  (22)  (3)

Net cash used in investing activities

  (59)  (2,599)
         

Financing activities

        

Proceeds from borrowings on long-term debt

  -   1,400 

Repayments of borrowings on long-term debt

  -   (7)

Payments for the repurchase of common stock

  (49)  - 

Payment of preferred stock dividends

  (26)  (13)

Deferred and other loan costs

  -   (50)

Payments for taxes related to net share settlement of equity awards

  (6)  (4)

Net cash (used in) provided by financing activities

  (81)  1,326 

Net increase (decrease) in cash

  167   (1,168)

Cash and restricted cash at beginning of period

  212   1,419 

Cash at end of period

 $379  $251 

  

See notes to condensed consolidated financial statements.

 

7

 

 

GRAY TELEVISION, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

 

1.

Basis of Presentation

 

The accompanying condensed consolidated balance sheet of Gray Television, Inc. (and its consolidated subsidiaries, except as the context otherwise provides, “Gray,” the “Company,” “we,” “us,” and “our”) as of December 31, 2019, which was derived from the Company’s audited financial statements as of December 31, 2019, and our accompanying unaudited condensed consolidated financial statements as of June 30, 2020 and for the periods ended June 30, 2020 and 2019, have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to those rules and regulations, although we believe that the disclosures made are adequate to make the information not misleading. In our opinion, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. We manage our business on the basis of two operating segments: broadcasting and production companies. Unless otherwise indicated, all station rank, in-market share and television household data herein are derived from reports prepared by Comscore, Inc. (“Comscore”). While we believe this data to be accurate and reliable, we have not independently verified such data nor have we ascertained the underlying assumptions relied upon therein, and cannot guarantee the accuracy or completeness of such data. For further information, refer to the consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 Form 10-K”). Our financial condition as of, and operating results for the three and six-months ended June 30, 2020, are not necessarily indicative of the financial condition or results that may be expected for any future interim period or for the year ending December 31, 2020.

 

Overview. We are a television broadcast company headquartered in Atlanta, Georgia, that is the largest owner of top-rated local television (“television” or “TV”) stations and digital assets in the United States. Gray currently owns and/or operates television stations and leading digital properties in 94 television markets that collectively reach approximately 24% of U.S. television households. Over calendar year 2019, Gray’s stations were ranked first in 69 markets, and first and/or second in 87 markets, as calculated by Comscore’s audience measurement service. We also own video program production, marketing, and digital businesses including Raycom Sports, Tupelo-Raycom, and RTM Studios, the producer of PowerNation programs and content, which we refer to collectively as our “production companies.”

 

Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The business and economic uncertainty resulting from the novel coronavirus and its related disease (collectively, “COVID-19”) has made such estimates and assumptions more difficult to calculate. Our actual results could differ materially from these estimated amounts. Our most significant estimates are our allowance for credit losses in receivables, valuation of goodwill and intangible assets, amortization of program rights and intangible assets, pension costs, income taxes, employee medical insurance claims, useful lives of property and equipment and contingencies.

 

Investments in Broadcasting, Production and Technology Companies. We have investments in several television, production and technology companies. Each of these equity investments do not have readily determinable fair values. We have applied the measurement alternative as defined in ASC Subtopic 825-10 – Financial Instruments - Overall. These investments are reported together as a non-current asset on our balance sheets.

 

Earnings Per Share. We compute basic earnings per share by dividing net income available to common stockholders by the weighted-average number of common shares outstanding during the relevant period. The weighted-average number of common shares outstanding does not include restricted shares. These shares, although classified as issued and outstanding, are considered contingently returnable until the restrictions lapse and, in accordance with U.S. GAAP, are not included in the basic earnings per share calculation until the shares vest. Diluted earnings per share is computed by including all potentially dilutive common shares, including restricted shares and shares underlying stock options, in the diluted weighted-average shares outstanding calculation, unless their inclusion would be antidilutive.

 

8

 

The following table reconciles basic weighted-average shares outstanding to diluted weighted-average shares outstanding for the three and six-month periods ended June 30, 2020 and 2019, respectively (in millions):

 

  

Three Months Ended

  

Six Months Ended

 
  

June 30,

  

June 30,

 
  

2020

  

2019

  

2020

  

2019

 
                 

Weighted-average shares outstanding-basic

  97   100   98   100 

Common stock equivalents for stock options and restricted shares

  -   1   -   - 

Weighted-average shares outstanding-diluted

  97   101   98   100 

 

Accumulated Other Comprehensive Loss. Our accumulated other comprehensive loss balances as of June 30, 2020 and December 31, 2019, consist of adjustments to our pension liability and the related income tax effect. Our comprehensive income for the six-month period ended June 30, 2020 consisted of net income. Our comprehensive loss for the six-month period ended June 30, 2019 consisted of net income and an adjustment to the tax effect of our pension liability as a result of our adoption of Accounting Standards Update (“ASU”) 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220) – Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. As of June 30, 2020 and December 31, 2019 the balances were as follows (in millions):

 

  

June 30,

  

December 31,

 
  

2020

  

2019

 
         

Accumulated balances of items included in accumulated other comprehensive loss:

        

Increase in pension liability

 $(42) $(42)

Income tax benefit

  (11)  (11)

Accumulated other comprehensive loss

 $(31) $(31)

 

Property and Equipment. Property and equipment are carried at cost. Depreciation is computed principally by the straight-line method. The following table lists the components of property and equipment by major category (dollars in millions):

 

          

Estimated

 
  

June 30,

  

December 31,

  

Useful Lives

 
  

2020

  

2019

  

(in years)

 

Property and equipment:

             

Land

 $119  $119      

Buildings and improvements

  303   291  7to40 

Equipment

  795   776  3to20 
   1,217   1,186      

Accumulated depreciation

  (485)  (461)     

Total property and equipment, net

 $732  $725      

 

Maintenance, repairs and minor replacements are charged to operations as incurred; major replacements and betterments are capitalized. The cost of any assets divested, sold or retired and the related accumulated depreciation are removed from the accounts at the time of disposition, and any resulting profit or loss is reflected in income or expense for the period.

 

9

 

In April 2017, the Federal Communications Commission (the “FCC”) began a process of reallocating the broadcast spectrum (the “Repack”). Specifically, the FCC is requiring certain television stations to change channels and/or modify their transmission facilities. The U.S. Congress passed legislation which provides the FCC with a $1.7 billion fund to reimburse all reasonable costs incurred by stations operating under a full power license and a portion of the costs incurred by stations operating under a low power license that are reassigned to new channels. Subsequent legislation in March 2018 appropriated an additional $1.0 billion for the Repack fund, of which up to $750 million may be made available to reimburse the Repack costs of full power, Class A television stations and multichannel video programming distributors. Other funds are earmarked to assist low power television stations and for other transition costs. The sufficiency of the FCC’s fund to reimburse for Repack costs is dependent upon a number of factors including the amounts to be reimbursed to other industry participants for Repack costs. Therefore, we cannot predict whether the fund will be sufficient to reimburse our Repack costs to the extent authorized under the legislation. Forty-seven of our current full power stations and thirty-seven of our current low power stations are affected by the Repack. The Repack process began in the summer of 2017 and we expect that it will conclude for nearly all of our stations by the fall of 2020. The majority of our costs associated with the Repack qualify for capitalization, rather than expense. Upon receipt of funds reimbursing us for our Repack costs, we record those proceeds as a component of our (gain) loss on disposal of assets, net.

 

The following tables provide additional information related to gain on disposal of assets, net included in our condensed consolidated statements of operations and purchases of property and equipment included in our condensed consolidated statements of cash flows (in millions):

 

  

Three Months Ended

  

Six Months Ended

 
  

June 30,

  

June 30,

 
  

2020

  

2019

  

2020

  

2019

 

Gain (loss) on disposal of assets, net:

                

Proceeds from sale of assets

 $-  $1  $1  $3 

Proceeds from FCC - Repack

  8   5   14   17 

Net book value of assets disposed

  (1)  (2)  (2)  (4)

Other

  -   (1)  -   (3)

Total

 $7  $3  $13  $13 
                 

Purchase of property and equipment:

                

Recurring purchases - operations

       $37  $14