UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark one)

~~[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934~~

~~For the quarterly period ended~~ ~~September 30, 2017~~or
☒
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 2022 or

~~[ ]~~ ~~Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934~~

~~For the transition period from _________ to _________ .~~
☐
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		~~(I.R.S. Employer~~
incorporation or organization)		(I.R.S. Employer Identification Number)

4370 Peachtree Road, NE, Atlanta, Georgia		30319
(Address of principal executive offices)		~~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____~~☑ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate website, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ 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 ~~and post~~ such files). Yes ✔ ~~No____~~☑ 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 filer ☒ ☑	Accelerated filer ☐
Non-accelerated filer ☐ ~~(do not check if a smaller reporting company)~~	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 ~~practicable~~practicable date.

Common Stock (No Par Value)		Class A Common Stock (No Par Value)
~~66,003,588~~85,521,216 shares outstanding as of October 31, ~~201~~7 28, 2022		~~6,598,377~~7,573,222 shares outstanding as of October 31, ~~201~~7 28, 2022

INDEX

GRAY TELEVISION, INC.



PART I.		FINANCIAL INFORMATION	PAGE
~~PART I.~~	~~FINANCIAL INFORMATION~~

Item 1.		Financial Statements

		Condensed ~~consolidat~~edconsolidated balance sheets (Unaudited) - September 30, ~~2017~~2022 and December 31, ~~2016~~2021	3

		Condensed consolidated statements of operations (Unaudited) - three-months and nine-months ended September 30, ~~2017~~2022 and ~~2016~~2021	5

		Condensed consolidated ~~statement~~statements of ~~stockholders'~~stockholders' equity (Unaudited) ~~- nine-months~~ – three-month periods ended March 31, June 30, and September 30, ~~2017~~2022 and 2021	6

		Condensed consolidated statements of cash flows (Unaudited) - nine-months ended September 30, ~~2017~~2022 and ~~2016~~2021	78

		Notes to condensed consolidated financial statements (Unaudited) ~~- September 30, 2017~~	89

Item 2.		Management's Discussion and Analysis of Financial Condition and Results of Operations	2122

Item 3.		Quantitative and Qualitative ~~Disclosure~~sDisclosures About Market Risk	2829

Item 4.		Controls and Procedures	2829

~~PART II.~~	~~OTHER INFORMATION~~
PART II.		OTHER INFORMATION

Item 1A.		Risk Factors	2929

~~Item 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~	29

Item 6.		Exhibits	30

SIGNATURES			3131

PART I.FINANCIAL INFORMATION

Item 1.Financial Statements

GRAY TELEVISION, INC.

~~CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)~~

~~(in thousands)~~

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(in millions)

	September 30,		December 31,		September 30,		December 31,
	2017		2016		2022		2021
Assets:
Current assets:
Cash	$	172,854	$	325,189	$	144	$	189
Accounts receivable, less allowance for doubtful accounts of $4,040 and $3,163, respectively		166,073		146,811
Accounts receivable, less allowance for credit losses of $12 and $16, respectively						615		624
Current portion of program broadcast rights, net		19,605		13,735		38		35
Prepaid taxes		15,953		14,641
Income tax refund receivable						22		21
Prepaid income taxes						61		40
Prepaid and other current assets		5,116		5,109		54		54
Total current assets		379,601		505,485		934		963

Property and equipment, net		351,961		326,093		1,366		1,165
Operating leases right of use asset						73		70
Broadcast licenses		1,530,123		1,340,305		5,326		5,303
Goodwill		611,100		485,318		2,657		2,649
Other intangible assets, net		80,172		56,250		687		825
Deferred tax asset		31,963		30,826
Investments in broadcasting and technology companies		16,599		16,599
Investments in broadcasting, production and technology companies						125		117
Other		12,091		22,455		15		16
Total assets	$	3,013,610	$	2,783,331	$	11,183	$	11,108

See notes to condensed consolidated financial statements.

~~GRAY TELEVISION, INC.~~

~~CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)~~

~~(in thousands~~
GRAY TELEVISION, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(in millions, except for share data)

	September 30,			December 31,			September 30,			December 31,
	2017			2016			2022			2021
Liabilities and stockholders’ equity:
Current liabilities:
Accounts payable	$	3,950		$	5,257		$	40		$	59
Employee compensation and benefits		25,532			31,367			90			97
Accrued interest		23,076			32,453			86			52
Accrued network programming fees		19,157			14,982			39			34
Other accrued expenses		9,285			13,802			40			44
Federal and state income taxes		4,680			2,916			8			10
Current portion of program broadcast obligations		20,236			13,924			40			37
Deferred revenue		3,530			4,706			64			14
Dividends payable								14			13
Current portion of operating lease liabilities								10			9
Current portion of long-term debt		6,417			-			15			15
Total current liabilities		115,863			119,407			446			384

Long-term debt		1,831,610			1,756,747
Long-term debt, less current portion and deferred financing costs								6,590			6,740
Program broadcast obligations, less current portion		4,771			4,995			2			5
Deferred income taxes		437,989			373,837			1,468			1,471
Accrued pension costs		33,052			34,047			16			24
Operating lease liabilities, less current portion								65			63
Other		1,422			1,437			14			14
Total liabilities		2,424,707			2,290,470			8,601			8,701

Commitments and contingencies (Note 8)
Commitments and contingencies (Note 10)

Stockholders’ equity:
Common stock, no par value; authorized 100,000,000 shares, issued 71,538,664 shares and 71,229,497 shares, respectively		660,377			658,135
Class A common stock, no par value; authorized 15,000,000 shares, issued 8,349,069 shares and 8,073,993 shares, respectively		23,841			21,764
Accumulated deficit		(3,876	)		(101,365	)
Series A Perpetual Preferred Stock, no par value; cumulative; redeemable; designated 1,500,000 shares, issued and outstanding 650,000 shares, at each date and $650 aggregate liquidation value, at each date								650			650

Stockholders’ equity:
Common stock, no par value; authorized 200,000,000 shares, issued 105,104,057 shares and 104,286,324 shares, respectively outstanding 85,521,216 shares and 87,539,056 shares, respectively								1,146			1,127
Class A common stock, no par value; authorized 25,000,000 shares, issued 9,675,139 shares and 9,424,691 shares, respectively outstanding 7,573,222 shares and 7,426,512 shares, respectively								44			39
Retained earnings								1,076			869
Accumulated other comprehensive loss, net of income tax benefit		(17,645	)		(17,645	)		(27	)		(27	)
		662,697			560,889			2,239			2,008
Treasury stock at cost, common stock, 5,535,076 shares and 5,135,406 shares, respectively		(49,562	)		(44,688	)
Treasury stock at cost, Class A common stock, 1,750,692 shares and 1,669,131 shares, respectively		(24,232	)		(23,340	)
Total stockholders’ equity		588,903			492,861
Total liabilities and stockholders’ equity	$	3,013,610		$	2,783,331
Treasury stock at cost, common stock, 19,582,841 shares and 16,747,268 shares, respectively								(277	)		(223	)
Treasury stock at cost, class A common stock, 2,101,917 shares and 1,998,179 shares, respectively								(30	)		(28	)
Total stockholders’ equity								1,932			1,757
Total liabilities and stockholders’ equity							$	11,183		$	11,108

See notes to condensed consolidated financial statements.

~~GRAY TELEVISION, INC.~~

~~CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)~~

~~(in thousands~~

GRAY TELEVISION, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(in millions, except for per share data)

	Three Months Ended						Nine Months Ended						Three Months Ended						Nine Months Ended
	September 30,						September 30,						September 30,						September 30,
	2017			2016			2017			2016			2022			2021			2022			2021

Revenue (less agency commissions)	$	218,977		$	204,490		$	649,119		$	574,846
Revenue (less agency commissions):
Broadcasting													$	889		$	581		$	2,548		$	1,648
Production companies														20			20			56			44
Total revenue (less agency commissions)														909			601			2,604			1,692
Operating expenses before depreciation, amortization and loss (gain) on disposal of assets, net:
Broadcast		139,430			120,717			406,446			346,620
Broadcasting														537			384			1,595			1,099
Production companies														16			13			56			39
Corporate and administrative		8,318			7,223			24,436			31,425			27			32			80			75
Depreciation		13,085			11,494			38,555			34,237			33			26			96			76
Amortization of intangible assets		6,460			4,235			18,684			12,365			52			28			156			81
Loss (gain) on disposal of assets, net		1,660			354			(75,139	)		(66	)
(Gain) loss on disposal of assets, net														(1	)		51			(6	)		46
Operating expenses		168,953			144,023			412,982			424,581			664			534			1,977			1,416
Operating income		50,024			60,467			236,137			150,265			245			67			627			276
Other income (expense):
Miscellaneous income, net		28			30			36			740
Other expense:
Miscellaneous expense, net														(1	)		(1	)		(3	)		(7	)
Interest expense		(24,207	)		(27,926	)		(71,189	)		(73,470	)		(94	)		(48	)		(254	)		(143	)
Loss from early extinguishment of debt		-			(31,987	)		(2,851	)		(31,987	)
Income before income taxes		25,845			584			162,133			45,548			150			18			370			126
Income tax expense		10,529			797			65,751			19,109			42			35			101			65
Net income (loss)	$	15,316		$	(213	)	$	96,382		$	26,439			108			(17	)		269			61
Preferred stock dividends														13			13			39			39
Net income (loss) attributable to common stockholders													$	95		$	(30	)	$	230		$	22

Basic per share information:
Net income (loss)	$	0.21		$	-		$	1.34		$	0.37
Net income (loss) attributable to common stockholders													$	1.04		$	(0.32	)	$	2.47		$	0.23
Weighted-average shares outstanding		71,636			71,879			71,777			71,850			91			95			93			94

Diluted per share information:
Net income (loss)	$	0.21		$	-		$	1.33		$	0.36
Net income (loss) attributable to common stockholders													$	1.03		$	(0.32	)	$	2.47		$	0.23
Weighted-average shares outstanding		72,454			71,879			72,491			72,723			92			95			93			95
																				.
Dividends declared per common share	$	-		$	-		$	-		$	-		$	0.08		$	0.08		$	0.24		$	0.24

See notes to condensed consolidated financial statements.

~~GRAY TELEVISION, INC.~~

~~CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited)~~

~~(in thousands~~

GRAY TELEVISION, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited)

(in millions, except for number of shares)

Accumulated

Class A

Class A

Common

Other

Common Stock

Common Stock

Accumulated

Treasury Stock

Treasury Stock

Comprehensive

Shares

Amount

Shares

Amount

Deficit

Shares

Amount

Shares

Amount

Loss

Total

Balance at December 31, 2016
8,073,993 $ 21,764 71,229,497 $ 658,135 $ (101,365 ) (1,669,131 ) $ (23,340 ) (5,135,406 ) $ (44,688 ) $ (17,645 ) $ 492,861

Adoption of ASU 2016-09 excess tax benefit for stock-based compensation
- - - - 1,107 - - - - - 1,107

Net income
- - - - 96,382 - - - - - 96,382

Issuance of stock:

401(k) plan
- - 1,224 16 - - - - - - 16
2007 Long Term Incentive Plan - restricted stock
198,220 307,943 - - (81,561 ) (892 ) (77,632 ) (874 ) - (1,766 )
2017 Equity and Incentive Compensation Plan - restricted stock
76,856 - - - - - - - - - -

Repurchase of common stock
- - - - - - - (322,038 ) (4,000 ) (4,000 )

Share-based compensation
- 2,077 - 2,226 - - - - - - 4,303

Balance at September 30, 2017
8,349,069 $ 23,841 71,538,664 $ 660,377 $ (3,876 ) (1,750,692 ) $ (24,232 ) (5,535,076 ) $ (49,562 ) $ (17,645 ) $ 588,903

																								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, 2020		8,935,773	$	34		103,100,856	$	1,110	$	862			(1,887,767	)	$	(26	)		(14,960,597	)	$	(188	)	$	(39	)	$	1,753

Net income		-		-		-		-		39			-			-			-			-			-			39

Preferred stock dividends		-		-		-		-		(13	)		-			-			-			-			-			(13	)

Common stock dividends		-		-		-		-		(8	)		-			-			-			-			-			(8	)

Issuance of common stock:
401(k) Plan		-		-		390,389		7		-			-			-			-			-			-			7
2017 Equity and Incentive Compensation Plan:
Restricted stock awards		233,425		-		296,042		-		-			(110,412	)		(2	)		(239,597	)		(4	)		-			(6	)
Restricted stock unit awards		-		-		60,050		-		-			-			-			(18,275	)		(1	)		-			(1	)

Stock-based compensation		-		1		-		2		-			-			-			-			-			-			3

Balance at March 31, 2021		9,169,198	$	35		103,847,337	$	1,119	$	880			(1,998,179	)	$	(28	)		(15,218,469	)	$	(193	)	$	(39	)	$	1,774

Net income		-		-		-		-		39			-			-			-			-			-			39

Preferred stock dividends		-		-		-		-		(13	)		-			-			-			-			-			(13	)

Common stock dividends		-		-		-		-		(7	)		-			-			-			-			-			(7	)

Issuance of common stock:
401(k) Plan		-		-		3,655		-		-			-			-			-			-			-			-
2017 Equity and Incentive Compensation Plan:
Restricted stock awards		-		-		47,360		-		-			-			-			(16,991	)		-			-			-

Stock-based compensation		-		1		-		3		-			-			-			-			-			-			4

Balance at June 30, 2021		9,169,198	$	36		103,898,352	$	1,122	$	899			(1,998,179	)	$	(28	)		(15,235,460	)	$	(193	)	$	(39	)	$	1,797

Net loss		-		-		-		-		(17	)		-			-			-			-			-			(17	)

Preferred stock dividends		-		-		-		-		(13	)		-			-			-			-			-			(13	)

Common stock dividends		-		-		-		-		(8	)		-			-			-			-			-			(8	)

Issuance of common stock:
2017 Equity and Incentive Compensation Plan:
Restricted stock awards		-		-		-		-		-			-			-			(10,720	)		-			-			-

Stock-based compensation		-		1		-		2		-			-			-			-			-			-			3

Balance at September 30, 2021		9,169,198	$	37		103,898,352	$	1,124	$	861			(1,998,179	)	$	(28	)		(15,246,180	)	$	(193	)	$	(39	)	$	1,762

See notes to condensed consolidated financial statements.

GRAY TELEVISION, INC.

~~CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)~~

~~(in thousands)~~

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited)

(in millions, except for number of shares)

Nine Months Ended

September 30,

2017

2016

Operating activities

Net income
$ 96,382 $ 26,439
Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation
38,555 34,237
Amortization of intangible assets
18,684 12,365
Amortization of deferred loan costs
3,466 3,664
Net amortization of original issue discount and premium related to long-term debt
(458 ) (626 )
Amortization of restricted stock and stock option awards
4,303 3,827
Amortization of program broadcast rights
15,444 14,026
Payments on program broadcast obligations
(15,569 ) (13,859 )
Common stock contributed to 401(k) plan
16 21
Deferred income taxes
64,121 18,335
Gain on disposals of assets, net
(75,139 ) (66 )
Loss from early extinguishment of debt
2,851 31,987
Other
(1,188 ) 659
Changes in operating assets and liabilities:

Accounts receivable trade
(18,587 ) (8,677 )
Prepaid taxes
(1,311 ) -
Prepaid and other current assets
371 (12,234 )
Accounts payable
(1,774 ) 728
Employee compensation, benefits and pension cost
(6,512 ) (5,275 )
Other current liabilities
(1,696 ) (3,692 )
Income taxes payable
1,763 719
Accrued interest
(9,376 ) 841
Net cash provided by operating activities
114,346 103,419

Investing activities

Acquisitions of television businesses and licenses
(415,438 ) (432,220 )
Proceeds from sale of television station
- 11,200
Proceeds from FCC spectrum auction
90,824 -
Purchases of property and equipment
(21,426 ) (33,238 )
Proceeds from asset sales
148 1,925
Net decrease (increase) in acquisition prepayments and other
9,558 (17,171 )
Net cash used in investing activities
(336,334 ) (469,504 )

Financing activities

Proceeds from borrowings on long-term debt
641,438 1,656,000
Repayments of borrowings on long-term debt
(561,037 ) (1,100,000 )
Payments for the repurchase of common stock
(4,000 ) -
Tender and redemption premiums for 2020 Notes
- (27,502 )
Deferred and other loan costs
(4,981 ) (27,881 )
Payments for taxes related to net share settlement of equity awards
(1,767 ) (1,452 )
Net cash provided by financing activities
69,653 499,165
Net (decrease) increase in cash
(152,335 ) 133,080
Cash at beginning of period
325,189 97,318
Cash at end of period
$ 172,854 $ 230,398

																								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, 2021		9,424,691	$	39		104,286,324	$	1,127	$	869			(1,998,179	)	$	(28	)		(16,747,268	)	$	(223	)	$	(27	)	$	1,757

Net income		-		-		-		-		62			-			-			-			-			-			62

Preferred stock dividends		-		-		-		-		(13	)		-			-			-			-			-			(13	)

Common stock dividends		-		-		-		-		(8	)		-			-			-			-			-			(8	)

Issuance of common stock:
401(k) Plan		-		-		307,885		7		-			-			-			-			-			-			7
2017 Equity and Incentive Compensation Plan:
Restricted stock awards		250,448		-		333,382		-		-			(103,738	)		(2	)		(138,959	)		(3	)		-			(5	)
Restricted stock unit awards		-		-		108,921		-		-			-			-			(32,958	)		(1	)		-			(1	)

Stock-based compensation		-		2		-		3		-			-			-			-			-			-			5

Balance at March 31, 2022		9,675,139	$	41		105,036,512	$	1,137	$	910			(2,101,917	)	$	(30	)		(16,919,185	)	$	(227	)	$	(27	)	$	1,804

Net income		-		-		-		-		99			-			-			-			-			-			99

Preferred stock dividends		-		-		-		-		(13	)		-			-			-			-			-			(13	)

Common stock dividends		-		-		-		-		(8	)		-			-			-			-			-			(8	)

Issuance of common stock:
2017 Equity and Incentive Compensation Plan:
Restricted stock awards		-		-		67,545		-		-			-			-			(17,463	)		-			-			-

Repurchase of common stock		-		-		-		-		-			-			-			(2,646,193	)		(50	)		-			(50	)

Stock-based compensation		-		2		-		4		-			-			-			-			-			-			6

Balance at June 30, 2022		9,675,139	$	43		105,104,057	$	1,141	$	988			(2,101,917	)	$	(30	)		(19,582,841	)	$	(277	)	$	(27	)	$	1,838

Net income		-		-		-		-		108			-			-			-			-			-			108

Preferred stock dividends		-		-		-		-		(13	)		-			-			-			-			-			(13	)

Common stock dividends		-		-		-		-		(7	)		-			-			-			-			-			(7	)

Stock-based compensation		-		1		-		5		-			-			-			-			-			-			6

Balance at September 30, 2022		9,675,139	$	44		105,104,057	$	1,146	$	1,076			(2,101,917	)	$	(30	)		(19,582,841	)	$	(277	)	$	(27	)	$	1,932

See notes to condensed consolidated financial statements.

GRAY TELEVISION, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(in millions)

	Nine Months Ended
	September 30,
	2022			2021
Operating activities:
Net income	$	269		$	61
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		96			76
Amortization of intangible assets		156			81
Amortization of deferred loan costs		12			9
Amortization stock-based compensation		17			10
Amortization of program broadcast rights		36			26
Payments on program broadcast obligations		(37	)		(27	)
Common stock contributed to 401(k) plan		-			1
Deferred income taxes		(4	)		(18	)
(Gain) loss on disposals of assets, net		(6	)		46
Other		2			(6	)
Changes in operating assets and liabilities:
Accounts receivable		9			6
Prepaid income taxes		(22	)		(28	)
Other current assets		1			33
Accounts payable		(20	)		23
Employee compensation, benefits and pension cost		(5	)		19
Accrued network fees and other expenses		10			(13	)
Accrued interest		34			13
Income taxes payable		(2	)		(17	)
Deferred revenue		50			(12	)
Net cash provided by operating activities		596			283

Investing activities:
Acquisitions of businesses and licenses, net of cash acquired		(53	)		(956	)
Proceeds from sale of television stations		-			470
Purchases of property and equipment		(298	)		(154	)
Proceeds from Repack reimbursement (Note 1)		7			10
Proceeds from asset sales		2			3
Investments in broadcast, production and technology companies		(16	)		(37	)
Other		(4	)		-
Net cash used in investing activities		(362	)		(664	)

Financing activities:
Borrowings of long-term debt		-			250
Repayments of long-term debt		(161	)		(250	)
Repurchase of common stock		(50	)		-
Payments of common stock dividends		(23	)		(23	)
Payments of preferred stock dividends		(39	)		(39	)
Deferred and other loan costs		-			(1	)
Payments of taxes related to net share settlement of equity awards		(6	)		(7	)
Net cash used in financing activities		(279	)		(70	)
Net decrease in cash		(45	)		(451	)
Cash at beginning of period		189			773
Cash at end of period	$	144		$	322

See notes to condensed consolidated financial statements.

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,~~ “Gray,” the “Company,” “we,” “us,” and “our”) as of December 31, ~~2016,~~ 2021, which was derived from the Company’s audited financial statements as of December 31, ~~2016,~~ 2021, and our accompanying unaudited condensed consolidated financial statements as of September 30, ~~2017~~ 2022 and for the periods ended September 30, ~~2017~~ 2022 and ~~2016~~2021, 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~~10-Q and Article 10 of Regulation ~~S-X.~~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 ~~statement~~presentation have been included. ~~Our operations consist~~We manage our business on the basis of ~~one reportable segment.~~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~~10-K for the year ended December 31, ~~2016 (the “2016~~2021 (the “2021 Form ~~10-K”~~10-K”). Our financial condition as of, and operating results for the ~~nine-month period~~three and nine-months ended September 30, ~~2017~~ 2022, 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, ~~2017.~~2022.

~~Overview~~Overview.

We are a ~~television broadcast~~multimedia company headquartered in Atlanta, ~~Georgia, that owns and/or operates over 100~~Georgia. We are the nation’s largest owner of top-rated local television stations and ~~leading~~ digital assets in ~~markets throughout~~ the United States. ~~As of~~ ~~September 30, 2017, we owned and/or operated~~Our television stations ~~in 57~~serve 113 television markets ~~broadcasting over 200 programming streams, including over 100 channels affiliated~~that collectively reach approximately 36 percent of US television households. This portfolio includes 80 markets with the ~~CBS Network (“CBS”)~~top-rated television station and 100 markets with the first and/or second highest rated television station. We also own video program companies Raycom Sports, Tupelo Media Group (formerly Tupelo Honey), PowerNation Studios, as well as the ~~NBC Network (“NBC”), the ABC Network (“ABC”)~~studio production facilities Assembly Atlanta and ~~the FOX Network (“FOX”). As of September 30, 2017, our station group reached approximately 10.4% of total United States television households.~~Third Rail Studios.

~~Cyclicality~~Investments in Broadcasting, Production and ~~Seasonality~~Technology Companies. We have investments in several television, production and technology companies. We account for all material investments in which we have significant influence over the investee under the equity method of accounting. Upon initial investment, we record equity method investments at cost. The amounts initially recognized are subsequently adjusted for our appropriate share of the net earnings or losses of the investee. We record any investee losses up to the carrying amount of the investment plus advances and loans made to the investee, and any financial guarantees made on behalf of the investee. We recognize our share in earnings and losses of the investee as miscellaneous (expense) income, net in our consolidated statements of operations. Investments are also increased by contributions made to and decreased by the distributions from the investee. The Company evaluates equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may be impaired.

~~Broadcast advertising revenues~~Investments in non-public businesses that do not have readily determinable pricing, and for which the Company does not have control or does not exert significant influence, are ~~generally highest~~carried at cost less impairments, if any, plus or minus changes in observable prices for those investments. Gains or losses resulting from changes in the ~~second and fourth quarters each year. This seasonality results partly from increases~~carrying value of these investments are included as miscellaneous (expense) income, net in ~~consumer advertising in the spring and retail advertising in the period leading up to and~~ ~~including the holiday season. Broadcast advertising revenues~~our consolidated statements of operations. These investments are also typically higher in even-numbered years due to increased spending by political candidates, political parties and special interest groups in advance of elections. This political spending typically is heaviest during the fourth quarter.reported together as a non-current asset on our consolidated balance sheets.

Use of ~~Estimates~~Estimates.

The preparation of financial statements in conformity with U.S. GAAP requires ~~our~~ management to make estimates and assumptions that affect the amounts reported in the ~~unaudited condensed consolidated~~ financial statements and ~~the notes to the unaudited condensed consolidated financial statements.~~accompanying notes. Our actual results could differ materially from these ~~estimates. The~~estimated amounts. Our most significant estimates ~~we make relate to~~are our allowance for ~~doubtful accounts~~credit losses in receivables, valuation of goodwill and intangible assets, amortization of program ~~broadcast righ~~tsrights and intangible assets, pension costs, income taxes, employee medical insurance claims, useful lives of property and equipment and contingencies.

~~Variable Interest Entit~~y ~~(“VIE”)~~

We consolidate a VIE when we are determined to be the primary beneficiary. In accordance with U.S. GAAP, in determining whether we are the primary beneficiary of a VIE for financial reporting purposes, we consider whether we have the power to direct the activities of the VIE that most significantly impact the economic performance of the VIE and whether we have the obligation to absorb losses or the right to receive returns that would be significant to the VIE.

On January 17, 2017, we acquired two television stations that were divested by Nexstar Broadcasting, Inc. upon its merger with Media General, Inc. (“Media General”): WBAY-TV (ABC), in the Green Bay, Wisconsin television market (DMA 69), and KWQC-TV (NBC), in the Davenport, Iowa, Rock Island, Illinois, and Moline, Illinois or “Quad Cities” television market (DMA 102), for an adjusted purchase price of $269.9 million (the “Media General Acquisition”) using cash on hand. The Media General Acquisition was completed, in part, through a transaction with a VIE known as Gray Midwest EAT, LLC (“GME”), pursuant to which GME acquired the broadcast licenses of the stations. On May 30, 2017, we exercised an option to acquire the licenses held by GME pending receipt of proceeds receivable from the FCC’s recently completed reverse auction for broadcast spectrum (the “FCC Spectrum Auction”). Upon receipt of the auction proceeds from the FCC, we completed the acquisition of the broadcast licenses from GME.

During the period that GME held those broadcast licenses we believe we were the primary beneficiary of GME, because, subject to the ultimate control of the licensees, we had the power to direct the activities that significantly impact the economic performance of GME through the services we provided, and our obligation to absorb losses and right to earn returns that would be considered significant to GME. As a result, we included the assets, liabilities and results of operations of GME in our consolidated financial statements beginning January 17, 2017 and continuing through August 7, 2017, the date that we were no longer deemed to be the primary beneficiary of GME.

Earnings Per ~~Share~~Share.

We compute basic earnings per share by dividing net income ~~attributable~~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 denominator of~~ the diluted weighted-average shares outstanding calculation, unless their inclusion would be anti-dilutive. In the three-months ended September 30, 2016, we reported a net loss and therefore all common stock equivalents are excluded from the computation of diluted earnings per share for that period, since their inclusion would be ~~anti-dilutive.~~antidilutive.

The following table reconciles basic weighted-average shares outstanding to diluted weighted-average shares outstanding for the ~~three-month~~three and ~~nine-month~~nine-month periods ended September 30, ~~2017~~ 2022 and ~~2016~~2021, respectively (in ~~thousands)~~millions):

									Three Months Ended				Nine Months Ended
	Three Months Ended				Nine Months Ended				September 30,				September 30,
	September 30,				September 30,				2022		2021		2022		2021
	2017		2016		2017		2016

Weighted-average shares outstanding-basic		71,636		71,879		71,777		71,850		91		95		93		94
Common stock equivalents for stock options and restricted stock		818		-		714		873		1		-		-		1
Weighted-average shares outstanding-diluted		72,454		71,879		72,491		72,723		92		95		93		95

Accumulated Other Comprehensive ~~Loss~~Loss.

Our accumulated other comprehensive loss balances as of September 30, ~~2017~~ 2022 and December 31, ~~2016~~ 2021, consist of adjustments to our pension liability and the related income tax ~~benefit.~~effect. Our comprehensive income ~~(loss)~~ for the ~~three and nine-month~~nine-month periods ended September 30, ~~2017~~ 2022 and ~~2016~~2021 consisted ~~entirely~~solely of our net ~~income (loss). Therefore the consolidated statement~~income. As of ~~comprehensive income (loss) is not presented for the three and nine-month periods ended~~ September 30, ~~2017 or 2016.~~2022 and December 31, 2021, the balances were as follows (in millions):

	September 30,			December 31,
	2022			2021

Accumulated balances of items included in accumulated other comprehensive loss:
Increase in pension liability	$	(36	)	$	(36	)
Income tax benefit		(9	)		(9	)
Accumulated other comprehensive loss	$	(27	)	$	(27	)

Property and ~~Equipment~~Equipment.

Property and equipment are carried at ~~cost.~~cost, or in the case of acquired businesses, at fair value. Depreciation is computed ~~principall~~yprincipally by the straight-line method. The following table lists the components of property and equipment by major category (dollars in millions):

							Estimated
	*September 30,*			*December 31,*			*Useful Lives*
	*2022*			*2021*			*(in years)*
Property and equipment, net:
Land	$	287		$	277
Buildings and improvements		466			453			7	to	40
Equipment		991			961			3	to	20
Construction in progress		299			63
		2,043			1,754
Accumulated depreciation		(677	)		(589	)
Total property and equipment, net	$	1,366		$	1,165

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~~gain or loss is reflected in income or expense for the period.

In April 2017, the ~~nine-months ended September 30, 2017,~~Federal Communications Commission (“FCC”) began the process of requiring certain television stations to change channels and/or modify their transmission facilities (“Repack”). The majority of our ~~total property and equipment balance, before accumulated depreciation, increased primarily~~costs associated with Repack qualify for capitalization, rather than expense. Upon receipt of funds reimbursing us for our Repack costs, we record those proceeds as a ~~result~~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 ~~acquired~~included in ~~connection with recent acquisitions~~our condensed consolidated statements of television businesses. The remaining changes in the balances in the nine-months ended September 30, 2017 and 2016 were primarily due to routine property and equipment purchases and retirements. The following table lists the components of property and equipment by major category (dollars in thousands)cash flows (in millions):

Estimated

September 30,

December 31,

Useful Lives

2017

2016

(in years)

Property and equipment:

Land
$ 49,651 $ 44,611
Buildings and improvements
154,391 139,078 7 to 40
Equipment
507,456 471,798 3 to 20
711,498 655,487
Accumulated depreciation
(359,537 ) (329,394 )
Total property and equipment, net
$ 351,961 $ 326,093

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2022			2021			2022			2021
Gain (loss) on disposal of assets, net:
Proceeds from sale of assets	$	-		$	-		$	2		$	3
Proceeds from FCC - Repack		2			4			7			10
Net book value of assets disposed		(1	)		(2	)		(3	)		(6	)
Non-cash loss on divestitures		-			(53	)		-			(53	)
Total	$	1		$	(51	)	$	6		$	(46	)

Purchase of property and equipment:
Recurring purchases - operations							$	118		$	57
Assembly Atlanta project								179			91
Repack								1			6
Total							$	298		$	154

Accounts Receivable and Allowance for ~~Doubtful Accounts~~Credit Losses. We record accounts receivable from sales and service transactions in our condensed consolidated balance sheets at amortized cost adjusted for any write-offs and net of allowance for credit losses. We are exposed to credit risk primarily through sales of broadcast and digital advertising with a variety of direct and agency-based advertising customers, retransmission consent agreements with multichannel video program distributors and program production sales and services.

Our allowance for ~~doubtful accounts~~credit losses is ~~equal to~~ ~~a portion~~an estimate of expected losses over the remaining contractual life of our ~~receivable balances that are 120 days old or older.~~receivables based on an ongoing analysis of collectability, historical collection experience, current economic and industry conditions and reasonable and supportable forecasts. The allowance is calculated using a historical loss rate applied to the current aging analysis. We may ~~provide allowances for certain receivable balances that are less than 120 days old~~also apply additional allowance when warranted by specific facts and circumstances. We generally ~~write-off~~write off accounts receivable balances when the customer files for bankruptcy or when all commonly used methods of collection have been exhausted.

The following table provides a roll-forward of the allowance for credit losses. The allowance is deducted from the amortized cost basis of accounts receivable in our condensed consolidated balance sheets (in millions):

	Nine Months Ended September 30,
	2022			2021
Beginning balance	$	16		$	10
Provision for credit losses		(3	)		2
Amounts written off		(1	)		(1	)
Ending balance	$	12		$	11

Recent Accounting ~~Pronouncements~~Pronouncements.

In ~~May 2014,~~ March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ~~No. 2014-09~~ –2020-04, ~~Revenue from~~Reference Rate Reform (Topic 848). ~~Contracts with Customers~~ (Topic 606). ASU 2014-09 provides new guidance on revenue recognition for revenue from contracts with customers and will replace most existing revenue recognition guidance when it becomes effective. This guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The standard is intended to improve comparability of revenue recognition practices across entities and provide more useful information through improved financial statement disclosures. In ~~August 2015,~~ January 2021, the FASB issued an amendment to ASU ~~2015-14,~~2020-04, ASU 2021-01, ~~Revenue from Contracts with Customers~~ Reference Rate Reform (Topic 848)~~(Topic 606):~~ ~~Deferral~~, in response to concerns about structural risks of interbank offered rates, and, particularly, the risk of cessation of the ~~Effective Date~~London Interbank Offered Rate (“LIBOR”). The amendments in this ASU ~~2015-14 deferred~~apply to all entities that elect to apply the ~~effective~~optional guidance in Topic 848. An entity may elect to apply the amendments in this ASU on a full retrospective basis as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or on a prospective basis to new modifications from any date within an interim period that includes or is subsequent to the date of ~~ASU 2014-09 by one year~~the issuance of a final standard, up to ~~interim and annual reporting periods beginning after December 15, 2017, and permitted early adoption of~~ the ~~standard, but not before~~date that financial statements are available to be issued. We are currently evaluating the original effective date of December 15, 2016. The standard permits the use of either a retrospective to each reporting period presented method, or a retrospective with the cumulative effect method to adopt the standard. In April 2016, the FASB issued ASU 2016-10, ~~Revenue from Contracts with Customers~~ ~~(Topic 606):~~ ~~Identifying Performance Obligations and Licensing~~. This ASU amends the guidance of ASU 2014-09 to clarify the identification of performance obligations and to provide additional licensing implementation guidance. In May 2016, the FASB issued ASU 2016-12, ~~Revenue from Contracts with Customers~~ ~~(Topic 606):~~ ~~Narrow Scope Improvements and Practical Expedients~~. This ASU was issued to provide guidance in assessing collectibility, presentation of sales taxes, noncash consideration, and completed contracts and contract modifications at transition, in order to reduce the potential for diversity in practice at initial application, and to reduce the cost and complexity of applying the standard. In December 2016, the FASB issued ASU 2016-20, ~~Revenue from Contracts with Customers~~ ~~(Topic 606):~~ ~~Technical Corrections and Improvements~~~~. This ASU was issued to clarify the standard and to correct unintended application of guidance. We have completed our internal evaluation of the standard and determined that the adoption~~applicability of this standard will not have a material effect on our balance sheets and statements of operations. We have determined that we will utilize the modified retrospective method to implement the standard. We are evaluating our footnote disclosures and expect that this standard’s most significant impact will be expanded disclosures related to deferred revenue from customer pre-payments. We will continue to develop these disclosures and the related tasks of gathering data to be disclosed, assessing our internal controls and availing ourselves of broadcasting industry related guidance.

In ~~January 2016, the FASB issued ASU No. 2016-01~~ – ~~Financial Instrumen~~~~ts - Overall~~ ~~(Subtopic 825-10),~~ ~~Recognition and Measurement of Financial Assets and Financial Liabilities~~~~. ASU 2016-01 amends the guidance in U.S. GAAP regarding the classification and measurement of financial instruments. The new standard significantly revises an entity’s accounting related~~addition to the ~~classification and measurement of investments~~accounting standard described above, once implemented, certain amounts in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. The standard is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We do not expect that the adoption of this standard will have a material impact on our financial statements.

~~In February 2016, the FASB issued ASU 2016-02 –~~ ~~Leases~~ ~~(Topic 842). ASU 2016-02 will supersede Topic 840,~~ ~~Leases~~, and thus will supersede nearly all existing lease guidance by requiring the reclassification of lease assets and lease liabilities on the balance sheet and requiring disclosure of key information about leasing arrangements. The standard will be effective for fiscal years beginning after December 15, 2018. We have preliminarily determined that the adoption of this standard will not have a material effect on our statements of operations. However, this standard is expected to have a material effect on our balance sheets. Specifically, we expect that, once adopted, we will record a right of use asset and lease obligation liability. As of December 31, 2016, the values of those assets and related liabilities were each approximately $13.2 million. We are also evaluating our footnote disclosure requirements. We will continue to review our contractual obligations related to this standard, and develop our disclosures ~~assessing our internal controls and availing ourselves~~ of ~~broadcasting industry related guidance.~~

~~In August 2016, the FASB issued ASU 2016-15,~~ ~~Statement of Cash Flows~~ ~~(Topic 230)~~ – ~~Classification of Certain Cash Receipts and Cash Payments~~. ASU 2016-15 amends the guidance of U.S. GAAP with the intent of addressing eight specific cash flow issues with the objective of reducing the existing diversity in practice. One or more of these eight issues are applicable to our financial statements. The standard is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We do not expect that the adoption of this standard will have a material impact on our financial statements.

~~In January 2017, the FASB issued ASU 2017-01,~~ ~~Business Combinations~~ ~~(Topic 805) –~~ ~~Clarifying the Definition of a Business~~. ASU 2017-01 amends the guidance of U.S. GAAP with the intent of clarifying the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The standard is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We do not expect that the adoption of this standard will have a material impact on our financial statements.

~~In January 2017, the FASB issued ASU 2017-04,~~ ~~Intangibles – Goodwill and Other~~ ~~(Topic 350) –~~ ~~Simplifying the Test for Goodwill Impairment~~. ASU 2017-04 amends the guidance of U.S. GAAP with the intent of simplifying how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. The standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The standard allows for early adoption, but we have not yet made that determination. We do not expect that the adoption of this standard will have a material impact on our financial statements.

~~In March 2017, the FASB issued ASU 2017-07,~~ ~~Compensation – Retirement Benefits~~ ~~(Topic 715) -~~ ~~Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost~~. ASU 2017-07 amends the guidance of U.S. GAAP with the intent of improving the presentation of net periodic pension cost and net periodic postretirement benefit cost by prescribing where the amount of net benefit cost should be presented in an employer’s income statement and requiring the disclosure by line item of the amount of net benefit cost that is included in the income statement or capitalized in assets. The standard is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We do not expect that the adoption of this standard will have a material impact on our financial statements.

~~Adoption of Accounting Standards and Reclassifications~~

~~In November 2015, the FASB issued ASU No. 2015-17,~~ ~~Income Taxes~~ ~~(Topic 740) –~~ ~~Balance Sheet Classification of Deferred Taxes~~. ASU 2015-17 requires a “noncurrent” presentation of all deferred income taxes. As required by our adoption of this standard, the affected amounts have been reclassified on our balance sheets for all periods presented.

~~In March 2016, the FASB issued ASU 2016-09,~~ ~~Compensation~~ – ~~Stock Compensation~~ ~~(Topic 718) –~~ ~~Improvements to Employee Share-Based Payment Accounting.~~ ASU 2016-09 amended the guidance in U.S. GAAP with the intent of simplifying several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards, and classification on the statement of cash flows. Our adoption of this standard included an adjustment to record the impact on our deferred asset related to the net federal and state income tax deductions for grants, and subsequent vesting, of restricted stock in excess of our book basis expense. Accordingly, we have recorded adjustments to increase our deferred tax asset and our accumulated deficit, as of January 1, 2017, by approximately $1.1 million. Beginning in 2017, we began recording similar net excess or deficit tax deductions as current tax benefit or expense and as reductions in the related income tax prepaid or payable, or deferred tax assets.

~~Certain amounts in the condensed consolidated statement of cash flows~~revenues have been reclassified to conform to the current ~~presentation~~.presentation. Beginning in 2022, we present our “Core” advertising revenue. In prior periods, we had presented separate line items of local advertising revenue and national advertising revenue and these amounts are now combined into Core advertising revenue.

Revenue

Revenue Recognition. We recognize revenue when we have completed a specified service and effectively transferred the control of that service to a customer in return for an amount of consideration we expect to be entitled to receive. The amount of revenue recognized is determined by the amount of consideration specified in a contract with our customers. We have elected to exclude taxes assessed by a governmental authority on transactions with our customers from our revenue. Any unremitted balance is included in current liabilities on our balance sheets.

We record a deposit liability for cash deposits received from our customers that are to be applied as payment once the performance obligation arises and is satisfied. These deposits are recorded as deposit liabilities on our balance sheets. When we invoice our customers for completed performance obligations, we are unconditionally entitled to receive payment of the invoiced amounts. Therefore, we record invoiced amounts in accounts receivable on our balance sheets. We generally require amounts payable under advertising contracts with our political advertising customers to be paid for in advance. We record the receipt of this cash as a deposit liability. Once the advertisement has been broadcast, the revenue is earned, and we record the revenue and reduce the balance in this deposit liability account. We recorded $13 million of revenue in the nine-months ended September 30, 2022 that was included in the deposit liability balance as of December 31, 2021. The deposit liability balance is included in deferred revenue on our condensed consolidated balance sheets. The deposit liability balance was $51 million and $13 million as of September 30, 2022 and December 31, 2021, respectively.

Disaggregation of Revenue. Revenue from our production companies segment is generated through our direct sales channel. Revenue from our broadcasting and other segment is generated through both our direct and advertising agency intermediary sales channels. The following table presents our revenue from contracts with customers disaggregated by type of service and sales channel (in millions):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Market and service type:
Advertising:
Core	$	359	$	292	$	1,090	$	831
Political		144		9		260		24
Total advertising		503		301		1,350		855
Retransmission consent		368		266		1,143		755
Production companies		20		20		56		44
Other		18		14		55		38
Total revenue	$	909	$	601	$	2,604	$	1,692

Sales channel:
Direct	$	528	$	402	$	1,616	$	1,117
Advertising agency intermediary		381		199		988		575
Total revenue	$	909	$	601	$	2,604	$	1,692

~~Acquisitions~~3.

Acquisition

On ~~January 13, 2017,~~ April 1, 2022, we acquired ~~KTVF-TV (NBC), KXDF-TV (CBS), and KFXF-TV (FOX)~~television station WKTB-TV the Telemundo Network Group, LLC affiliate in the ~~Fairbanks, Alaska television~~Atlanta, Georgia market (DMA ~~202), from Tanana Valley Television Company and Tanana Valley Holdings, LLC for $8.0 million (the “Fairbanks Acquisition”~~10), ~~using cash on hand.~~

~~As described~~ ~~in Note 1. above, on January 17, 2017, we completed the Media General Acquisition,~~as well as certain digital media assets, for ~~an adjusted~~a combined purchase price of ~~$269.9~~$31 million, using cash on ~~hand.~~

~~On May 1, 2017, we acquired WDTV-TV (CBS) and WVFX-TV (FOX/CW) in the Clarksburg-Weston, West Virginia television market (DMA 169) from Withers Broadcasting Company of West Virginia~~hand (the “Clarksburg Acquisition”) for a total purchase price of $26.5 million. On June 1, 2016, we began operating the stations, subject to the control of the seller, under a local marketing agreement (“LMA”) that terminated upon completion of the acquisition.

~~On May 1, 2017~~, we acquired WABI-TV (CBS/CW) in the Bangor, Maine television market (DMA 156) and WCJB-TV (ABC/CW) in the Gainesville, Florida television market (DMA 159) from Community Broadcasting Service and Diversified Broadcasting, Inc. (collectively, the “Diversified Acquisition”) for a total purchase price of $85.0 million. On April 1, 2017, we began operating these stations, subject to the control of the seller, under an LMA that terminated upon completion of the acquisition.

~~On August 1, 2017, we acquired WCAX-TV (CBS) in the Burlington, Vermont~~ ~~– Plattsburgh, New York television markets (DMA 97) from Mt. Mansfield Television, Inc., for $29.0 million in cash (the “Vermont Acquisition”~~“Telemundo Atlanta Transaction”). On June 1, 2017, we advanced $23.2 million of the purchase price to the seller and began to operate the station under an LMA, subject to the control of the seller. At closing, we paid the remaining $5.8 million of the purchase price through the use of cash on hand and the LMA was terminated.

~~We refer to the~~ eight stations acquired (excluding the stations acquired in the Clarksburg Acquisition) during the first nine months of 2017 and the stations we commenced operating under LMAs during that period as the “2017 Acquisitions.” We refer to the 13 stations acquired in 2016, and that we retained in those acquisitions (including the stations in the Clarksburg Acquisition that we commenced operating under an LMA on June 1, 2016) as the “2016 Acquisitions.”

The following table summarizes the preliminary ~~fair value estimates~~values of the assets acquired ~~liabilities assumed~~ and resulting goodwill of the ~~2017 Acquisitions and the Clarksburg Acquisition~~Telemundo Atlanta Transaction (in ~~thousands)~~millions):

	Acquisition
	Fairbanks			Media General			Clarksburg			Diversified			Vermont			Total

Current assets	$	122		$	666		$	462		$	361		$	312		$	1,923
Accounts receivable, net																			$	1
Property and equipment		2,650			20,181			4,133			12,329			9,513			48,806			1
Goodwill		471			86,287			3,222			35,486			316			125,782			10
Broadcast licenses		2,228			149,846			17,003			26,219			7,592			202,888			1
Network affiliation																				14
Other intangible assets		2,702			13,398			2,234			11,051			8,268			37,653			4
Other non-current assets		71			282			51			27			3,310			3,741
Current liabilities		(140	)		(695	)		(554	)		(423	)		(311	)		(2,123	)
Other long-term liabilities		(84	)		-			(51	)		(50	)		-			(185	)

Total	$	8,020		$	269,965		$	26,500		$	85,000		$	29,000		$	418,485		$	31

~~Amounts in the table above~~These amounts are based upon ~~management~~’smanagement’s preliminary ~~estimates~~estimate of the fair values using valuation techniques including income, cost and market approaches. ~~The~~In determining the preliminary fair value ~~estimates are~~of the acquired assets and assumed liabilities, the fair values were determined based on, ~~but not limited to,~~among other factors, expected future revenue and cash flows, expected future growth rates, and estimated discount rates.

Property and equipment are recorded at their fair value and are being depreciated over their estimated useful lives ranging from ~~three years~~3 to 40 years.

O~~ther intangible assets represent primarily the estimated fair values of retransmission agreements of $29.1 million; advertising client relationships of $5.3 million;~~Amounts related to network affiliation and ~~favorable income leases of $3.0 million. These~~other intangible assets are being amortized over their estimated useful lives of approximately ~~4.9 years for retransmission agreements; approximately 10.7 years for advertising client relationships; and approximately 11.9 years for favorable income leases.~~1 to 4 years.

Goodwill is calculated as the excess of the consideration transferred over the fair value of the identifiable net assets acquired and liabilities assumed, and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, ~~including assembled workforce,~~ as well as future synergies that we expect to generate from each acquisition. ~~We have preliminarily recorded $125.8 million of goodwill related to 2017 Acquisitions. The use of different estimates or assumptions could result in materially different allocations.~~ The goodwill recognized related to ~~these acquisitions~~this acquisition is deductible for income tax purposes.

~~Our~~ consolidated results of operations for the three and nine-months ended September 30, 2017 include the results of the 2017 Acquisitions from the date of the respective transaction. Revenue and operating income attributable to the stations acquired in the 2017 Acquisitions and included in our consolidated statements of operations for the nine-months ended September 30, 2017 were $54.2 million and $25.2 million, respectively. In connection with the 2017 Acquisitions, we incurred a total of $1.0 million of transaction related costs during the nine-months ended September 30, 2017, primarily related to legal, consulting and other professional services. Revenue and operating income attributable to the stations acquired in the 2016 Acquisitions and included in our consolidated statements of operations for the nine-months ended September 30, 2016 were $87.9 million and $35.3 million, respectively.

34..

Long-term Debt

As of September 30, ~~2017~~ 2022 and December 31, ~~2016,~~ 2021, long-term debt ~~primarily~~ consisted of obligations under our ~~2017~~2019 Senior Credit Facility (as defined below), our ~~2014 Senior Credit Facility (as defined below)~~5.875% senior notes due 2026 (the “2026 Notes”), our ~~5.125% Senior Notes~~7.0% senior notes due ~~2024~~2027 (the ~~“2024~~“2027 Notes”), our 4.75% senior notes due 2030 (the “2030 Notes”) and our ~~5.875% Senior Notes~~5.375% notes due ~~2026~~2031 (the ~~“2026~~“2031 Notes”), as follows (in ~~thousands)~~millions):

September 30,

December 31,

2017

2016

Long-term debt including current portion:

2014 Senior Credit Facility
$ - $ 556,438
2017 Senior Credit Facility
636,838 -
2024 Notes
525,000 525,000
2026 Notes
700,000 700,000
Total outstanding principal
1,861,838 1,781,438
Unamortized deferred loan costs - 2014 Senior Credit Facility
- (12,158 )
Unamortized deferred loan costs - 2017 Senior Credit Facility
(12,406 ) -
Unamortized deferred loan costs - 2024 Notes
(6,993 ) (7,742 )
Unamortized deferred loan costs - 2026 Notes
(9,751 ) (10,588 )
Unamortized premium - 2026 Notes
5,339 5,797
Less current portion
(6,417 ) -
Net carrying value
$ 1,831,610 $ 1,756,747

Borrowing availability under the Revolving Credit Facility
$ 100,000 $ 60,000

	September 30,			December 31,
	2022			2021
Long-term debt:
2019 Senior Credit Facility:
2017 Term Loan (matures February 7, 2024)	$	445		$	595
2019 Term Loan (matures January 2, 2026)		1,190			1,190
2021 Term Loan (matures December 1, 2028)		1,489			1,500
2026 Notes (matures July 15, 2026)		700			700
2027 Notes (matures May 15, 2027)		750			750
2030 Notes (matures October 15, 2030)		800			800
2031 Notes (matures November 15, 2031)		1,300			1,300
Total outstanding principal, including current portion		6,674			6,835
Unamortized deferred loan costs - 2017 Term Loan		(5	)		(7	)
Unamortized deferred loan costs - 2019 Term Loan		(22	)		(27	)
Unamortized deferred loan costs - 2021 Term Loan		(5	)		(5	)
Unamortized deferred loan costs - 2026 Notes		(4	)		(5	)
Unamortized deferred loan costs - 2027 Notes		(7	)		(8	)
Unamortized deferred loan costs - 2030 Notes		(11	)		(13	)
Unamortized deferred loan costs - 2031 Notes		(17	)		(18	)
Unamortized premium - 2026 Notes		2			3
Less current portion		(15	)		(15	)
Net carrying value	$	6,590		$	6,740

Borrowing availability under Revolving Credit Facility	$	496		$	497

~~On February 7, 2017, we entered into a Third Amended and Restated Credit Agreement (the “2017 Senior Credit Facility”), consisting~~As of ~~a $556.4 million term loan facility (the “2017 Initial Term Loan”) and a $100.0 million revolving credit facility (the “2017 Revolving Credit Facility”). Amounts~~September 30, 2022, the interest rates on the balances outstanding under the 2017 Initial Term Loan were used to repay amounts outstanding under our prior credit agreement (the “2014 Senior Credit Facility”). On April 3, 2017, we borrowed $85.0 million under an incremental term loan (the “2017 Incremental Term Loan” and, together with the 2017 Initial Term Loan, the “2017 Term Loan”) under the 2017 Senior Credit Facility to fund the Diversified Acquisition. As of September 30, 2017, the 2017 Senior Credit Facility provided total commitments of $736.8 million, consisting of the $636.8 million 20172019 Term Loan and the ~~$100.0 million 2017 Revolving Credit Facility. Our quarterly principal payments under the 2017~~2021 Term Loan ~~are $1.6 million.~~

~~Prior~~were 5.2%, 5.1% and 5.6% respectively. We expect that interest rates applicable to the ~~entry into the 2017~~2019 Senior Credit Facility will be modified upon the ~~2014~~implementation of a LIBOR replacement rate that will apply to our current and future borrowings under the 2019 Senior Credit ~~Facility consisted~~Facility. The components of ~~a revolving loan and a term loan.~~ ~~Excluding accrued interest,~~ the amount outstanding under our 2014 Senior Credit Facility as of December 31, 2016 consisted solely of a term loan balance of $556.4 million. As of December 31, 2016, the interest rate on the balance outstanding under the 2014 Senior Credit Facility was 3.9%.

~~Borrowings under the 2017 Term Loan~~ currently bear interest, at our option, at either the London Interbank Offered Rate (“LIBOR”) or the Base Rate (as defined below), in each case, plus an applicable margin. Currently, the applicable margin is 2.25% for LIBOR borrowings and 1.25% for Base Rate borrowings. The applicable margin is determined quarterly based on our leverage ratio as set forth in the 2017 Senior Credit Facility (the “Leverage Ratio”). If our Leverage Ratio is less than or equal to 5.25 to 1.00, the applicable margin will be 2.25% for all LIBOR borrowings and 1.25% for all Base Rate borrowings and if the Leverage Ratio is greater than 5.25 to 1.00, the applicable margin will be 2.5% for all LIBOR borrowings. As of September 30, 2017, the interest rate on the balance outstanding under the 2017 Term Loan was 3.7%.

~~Borrowings under the 2017~~ Revolving Credit Facility ~~currently bear interest,~~mature at ~~our option, at either LIBOR plus 1.50% or Base Rate plus 0.50%, in each case based on a first lien leverage ratio test as set forth in~~different times during the 2017 Senior Credit Facility (the “First Lien Leverage Ratio”). Base Rate is defined as the greatest of (i) the administrative agent’s prime rate, (ii) the overnight federal funds rate plus 0.50% and (iii) LIBOR plus 1.00%. We are required to pay a commitment fee on the average daily unused portion of the 2017 Revolving Credit Facility, which rate may rangeperiod from ~~0.375% to 0.50% on an annual basis, based on the First Lien Leverage Ratio. The 2017 Revolving Credit Facility matures on February 7, 2022, and the 2017 Term Loan matures on February 7, 2024.~~

As a result of entering into the 2017 Senior Credit Facility, we recorded a loss on extinguishment of debt of approximately $2.9 million in the nine-months ended September 30, 2017, and we incurred approximately $5.0 million in deferred financing costs that will be amortized over the life of the 2017 Senior Credit Facility.January 2, 2026 through December 1, 2026.

As of September 30, ~~2017~~2022, the aggregate minimum principal maturities of our long term debt for the remainder of 2022 and ~~December 31, 2016, we had $525.0 million of 2024 Notes outstanding. The interest rate and yield on~~ the ~~2024 Notes~~succeeding 5 years were ~~5.125%. The 2024 Notes mature on October 15, 2024. Interest is payable semiannually, on April 15 and October 15 of each year.~~as follows (in millions):

	Minimum Principal Maturities
Year	2021 Senior Credit Facility		2026 Notes		2027 Notes		2030 Notes		2031 Notes		Total
Remainder of 2022	$	4	$	-	$	-	$	-	$	-	$	4
2023		15		-		-		-		-		15
2024		460		-		-		-		-		460
2025		15		-		-		-		-		15
2026		1,205		700		-		-		-		1,905
2027		15		-		750		-		-		765
Thereafter		1,410		-		-		800		1,300		3,510
Total	$	3,124	$	700	$	750	$	800	$	1,300	$	6,674

~~On June~~

14 ~~2016, we completed the private placement of $500.0 million of our 2026 No~~tes (the “Original 2026 Notes”) at par. On September 14, 2016, we completed the private placement of an additional $200.0 million of our 2026 Notes (the “Additional 2026 Notes”). The Additional 2026 Notes were issued at a price of 103.0%, resulting in aggregate gross proceeds of approximately $206.0 million, plus accrued and unpaid interest from and including June 14, 2016.

As of September 30, 2017 and December 31, 2016, we had $700.0 million of 2026 Notes outstanding. The interest rate and yield on the Original 2026 Notes were 5.875%. The interest rate and yield on the Additional 2026 Notes were 5.875% and 5.398%, respectively. The Additional 2026 Notes are an additional issuance of, rank equally with and form a single series with the Original 2026 Notes. The 2026 Notes mature on July 15, 2026. Interest is payable semiannually, on January 15 and July 15 of each year.

~~Collateral, Covenants and Restrictions~~

~~Our obligations under the 2017 Senior Credit Facility are secured by substantially all of~~ our consolidated assets, excluding real estate. In addition, substantially all of our subsidiaries are joint and several guarantors of, and our ownership interests in those subsidiaries are pledged to collateralize, our obligations under the 2017 Senior Credit Facility. Gray Television, Inc. is a holding company with no material independent assets or operations. For all applicable periods, the 2024 Notes and 2026 Notes have been fully and unconditionally guaranteed, on a joint and several, senior unsecured basis, by substantially all of Gray Television, Inc.'s subsidiaries. Any subsidiaries of Gray Television, Inc. that do not gurantee the 2024 Notes and 2026 Notes are minor. As of September 30, 2017, 2022, there were no significant restrictions on the ability of Gray Television, Inc.'s subsidiaries to distribute cash to Gray or to the guarantor ~~subsidaries.~~

subsidiaries. The ~~2017~~2019 Senior Credit Facility contains affirmative and restrictive covenants with which we must ~~comply, including: (a) limitations on additional indebtedness, (b) limitations on liens, (c) limitations on~~comply. The 2026 Notes, the ~~sale of assets, (d) limitations on guarantees, (e) limitations on investments and acquisitions, (f) limitations on~~2027 Notes, the payment of dividends and share repurchases, (g) limitations on mergers and (h) maintenance of the First Lien Leverage Ratio while any amount is outstanding under the revolving credit facility, as well as other customary covenants for credit facilities of this type. The 20262030 Notes and ~~2024~~the 2031 Notes also include covenants with which we must ~~comply which are typical for borrowing transactions of their nature.~~comply. As of September 30, ~~2017~~ 2022 and December 31, ~~2016,~~ 2021, we were in compliance with all required covenants under all our debt obligations.

For all our interest bearing obligations, we made interest payments of approximately $212 million and $121 million during the nine-months ended September 30, 2022 and 2021, respectively. During the nine months ended September 30, 2022, we capitalized $4 million of interest payments related to our Assembly Atlanta project. We did not capitalize any interest payments during the nine-months ended September 30, 2021.

In the nine-months ended September 30, 2022, we paid the required principal reductions of $11 million of our 2021 Term Loan and voluntarily pre-paid $150 million of the outstanding principal balance of our 2017 Term Loan.

~~Maturities~~Subsequent Event. On November 1, 2022, we made an additional voluntary pre-payment of $100 million of the outstanding principal balance of our 2017 Term Loan.

~~Aggregate minimum principal maturities on long-term debt as of September 30, 2017 were as follows (in thousands):~~

Minimum Principal Maturities

Year

2017 Senior
Credit Facility

2024 Notes

2026 Notes

Total

2017
$ 1,604 $ - $ - $ 1,604
2018
6,417 - - 6,417
2019
6,417 - - 6,417
2020
6,417 - - 6,417
2021
6,417 - - 6,417
Thereafter
609,566 525,000 700,000 1,834,566
Total
$ 636,838 $ 525,000 $ 700,000 $ 1,861,838

4.5.

Fair Value Measurement

~~For purposes~~We measure certain assets and liabilities at fair value, which are classified by the FASB Codification within the fair value hierarchy as level 1,2, or 3, on the basis of ~~determining a fair~~ ~~value~~whether the measurement ~~we utilize~~employs observable or unobservable inputs. Observable inputs reflect market data orobtained from independent sources, while unobservable inputs reflect the Company’s own assumptions and consider information about readily available market participant assumptions.

●

Level 1: Quoted prices for identical instruments in active markets

●

Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets

●

Level 3: Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable

Fair value is defined as the price that ~~market participants~~ would ~~use in pricing~~be received to sell an asset, or paid to transfer a liability, ~~including assumptions about risk and~~in an orderly transaction between market participants at the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated or generally unobservable. We utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized into a hierarchy that gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (“Level 1”) and the lowest priority to unobservable inputs that require assumptions to measure fair value (“Level 3”). Level 2 inputs are those that are other than quoted prices on national exchanges included within Level 1 that are observable for the asset or liability either directly or indirectly (“Level 2”).

~~Fair Value of Other Financial Instruments~~

The estimated fair value of other financial instruments is determined using market information and appropriate valuation methodologies. Interpreting market data to develop fair value estimates involves considerable judgment.measurement date. The use of different market assumptions or methodologies could have a material effect on the ~~estimated~~ fair value amounts. Accordingly, the estimates presented are not necessarily indicative of the amounts that we could realize in a current market exchange, or the value that ultimately will be realized upon maturity or disposition.measurement.

The carrying amounts of ~~the following instruments approximate fair value due to their short term to maturity: (i)~~ accounts receivable, ~~(ii)~~ prepaid and other current assets, ~~(iii)~~ accounts payable, ~~(iv) accrued~~ employee compensation and benefits, ~~(v)~~ accrued interest, ~~(vi)~~ other accrued expenses, ~~(vii) acquisition-related liabilities~~ and ~~(viii)~~ deferred ~~revenue.~~revenue approximate fair value at both September 30, 2022 and December 31, 2021.

~~The~~As of September 30, 2022 and December 31, 2021, the carrying amount of our long-term debt was ~~$1.9~~$6.6 billion and ~~$1.8~~$6.8 billion, respectively, and the fair value was ~~$1.9~~$6.0 billion and ~~$1.8~~$6.9 billion, ~~respectively, as of September 30, 2017 and December 31, 2016. Fair~~respectively. The fair value of our long-term debt is based on observable estimates provided by ~~third-party~~third party financial professionals as of ~~September 30, 2017 and December 31, 2016~~each date, and as such is classified within Level 2 of the fair value hierarchy.

5.6.

~~Stockholders’~~Stockholders’ Equity

We are authorized to issue ~~135~~245 million shares in total of all classes of stock consisting of ~~which 15~~25 million shares ~~are designated Class~~of class A common stock, ~~100~~200 million shares ~~are designated~~of common stock, and 20 million shares ~~are designated~~of “blank check” preferred stock for which our Board of Directors has the authority to determine the rights, powers, limitations and restrictions. The rights of our common stock and ~~Class~~class A common stock are identical, except that our ~~Class~~class A common stock has 10 votes per share and our common stock has one vote per share.

Our common stock and Class A common stock are entitled to receive cash dividends if declared, on an equal per-share basis. ~~For the three and~~ ~~nine-month periods ended September 30, 2017 and 2016, we did not declare or pay any common stock or Class A common stock dividends.~~

~~In each of March and November 2004, the~~The Board of Directors declared a quarterly cash dividend of ~~the Company authorized the Company to repurchase up to 2.0 million shares of the Company's~~$0.08 per share on our common stock and Class A common ~~stock. In~~ stock to shareholders of record on each of March ~~2006, this authorization~~15, June 15, and September 15, 2022 and 2021, payable on March 31, June 30, and September 30, 2022 and 2021. The total common stock and Class A common stock dividends declared and paid during each of the nine-month periods ended September 30, 2022 and 2021 was increased to an aggregate of 5.0 million shares (the “2004-2006 Repurchase Authorization”). As of December 31, 2016, 279,200 shares remain available for repurchase under this authorization, which has no expiration date. $23 million.

On ~~November 6, 2016, the~~May 5, 2022, our shareholders approved, and our Board of Directors ~~of the Company authorized the Company to purchase up to an additional $75.0 million of~~adopted, our ~~outstanding common stock prior to December 31, 2019 (the “2016 Repurchase Authorization”).~~

~~The 2016 Repurchase Authorization prohibits~~ ~~the Company from purchasing shares directly from the Company’s officers, directors, or the Gray Television, Inc. Capital Accumulation~~2022 Equity and Incentive Compensation Plan (the ~~“401k Plan”~~“2022 EICP”). ~~During the nine months ended September 30,~~ The 2022 EICP replaced our 2017 Equity and Incentive Compensation Plan. Under 2022 EICP, we purchased 322,038 shares of our common stock at an average purchase price of $12.39 per share under the 2016 Repurchase Authorization, for a total cost of $4.0 million. As of September 30, 2017, $69.0 million remains available to purchase shares of our common stock under the 2016 Repurchase Authorization.

The extent to which the Company repurchases any of its shares, the number of shares and the timing of any repurchases will depend on general market conditions, regulatory requirements, alternative investment opportunities and other considerations. Th~~e Company is not required to repurchase a minimum number of shares, and the repurchase authorizations~~ may, ~~be modified, suspended or terminated at any time without prior notice.~~

~~Under our various employee benefit plans, including our 401k Plan, we may,~~ at our discretion, issue authorized and unissued shares, or previously issued shares held in treasury, of our Class A common stock or common stock. As of September 30, ~~2017,~~ 2022, we had reserved ~~1,923,144~~7.2 million shares and ~~7,632,465~~2.8 million shares of our ~~Class A~~ common stock and Class A common stock, respectively, for future issuance under ~~various employee benefit plans.~~

6.	~~Retirement~~ ~~Plans~~

~~The following table provides the components~~our 2022 EICP. As of ~~net periodic benefit cost for~~ ~~our defined benefit pension plans for the three-month and nine-month periods ended~~ September 30, ~~2017 and 2016 (in thousands):~~

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016

Service cost
$ - $ - $ - $ -
Interest cost
1,167 1,185 3,502 3,554
Expected return on plan assets
(1,412 ) (1,298 ) (4,236 ) (3,892 )
Loss amortization
121 153 363 458
Net periodic (benefit) cost
$ (124 ) $ 40 $ (371 ) $ 120

~~During the~~ ~~nine-month period ended September 30, 2017,~~ 2022, we ~~contributed $0.6~~also have 2.8 million toshares of our ~~defined benefit pension plans. During the remainder of 2017, we expect to make additional contributions to these plans of between $1.7 million and $2.4 million.~~common stock reserved for issuance under The Gray Television, Inc. Capital Accumulation Plan (the “401(k) Plan”).

During the ~~three and nine-month periods~~nine-months ended September 30, ~~2017,~~ 2022, we repurchased 2.6 million shares of our common stock under our share repurchase programs for $50 million. As of September 30, 2022, approximately $124 million was available to repurchase shares of our common stock and/or Class A common stock under these programs.

7.	Retirement Plans

The components of our net periodic pension benefit are included in miscellaneous expense, net in our condensed consolidated statements of operations. During the nine-months ended September 30, 2022, the amount recorded as a benefit was not material. During the nine-months ended September 30, 2022, we contributed ~~$1.4~~$4 million ~~and $5.0~~to this plan.

During the nine-month period ended September 30, 2022, we contributed $13 million ~~respectively,~~ in matching cash contributions, and shares of our common stock valued at approximately $7 million for our 2021 discretionary profit-sharing contributions, to the ~~401k~~401(k) Plan. ~~During~~The discretionary profit-sharing contribution was recorded as an expense in 2021 and accrued as of December 31, 2021. Based upon employee participation as of September 30, 2022, during the remainder of ~~2017,~~2022, we ~~estimate that our~~expect to contribute approximately $3 million of matching cash contributions to this ~~plan will be approximately $1.5 million, excluding discretionary profit-sharing contributions.~~plan.

7.8.

~~Share-based~~Stock-based Compensation

We recognize compensation expense for ~~share-based~~stock-based payment awards made to our employees, consultants and directors, including stock options and restricted shares awarded under our 2017 Equity and Incentive Compensation Plan (the “2017 EICP”); our 2007 Long-Term Incentive Plan, as amended (the “2007 Incentive Plan”)~~; and our Directors’ Restricted Stock Plan. Currently, there are no outstanding share awards under our Directors’ Restricted Stock Plan.~~directors. The following table provides ~~information on~~ our ~~share-based~~stock-based compensation expense and related income tax benefit for the three and ~~nine-month~~nine-month periods ended September 30, ~~2017~~ 2022 and ~~2016, respectively~~2021 (in ~~thousands)~~millions):

	Three Months Ended						Nine Months Ended						Three Months Ended						Nine Months Ended
	September 30,						September 30,						September 30,						September 30,
	2017			2016			2017			2016			2022			2021			2022			2021
Stock-based compensation expense, gross	$	1,532		$	1,271		$	4,305		$	3,827		$	6		$	3		$	17		$	10
Income tax benefit at our statutory rate associated with share-based compensation		(597	)		(496	)		(1,679	)		(1,493	)		(2	)		(1	)		(4	)		(3	)
Stock-based compensation expense, net	$	935		$	775		$	2,626		$	2,334		$	4		$	2		$	13		$	7

~~The 2017 EICP~~ ~~provides for,~~All shares of class A common stock and ~~while awards were available for grant thereunder the 2007 Incentive Plan provided for, the grant of incentive~~common stock ~~options, nonqualified stock options,~~underlying outstanding restricted stock ~~awards, stock appreciation rights,~~units and performance awards ~~to acquire~~are counted as issued at target levels under the 2022 EICP for purposes of determining the number of shares ~~of our Class A common stock or common stock, or other awards based on our performance, to our employees, consultants and non-employee directors.~~available for future issuance.

~~During the~~ ~~nine-month period ended September 30, 2017, we granted:~~

●

~~307,943 shares of restricted common stock to certain employees, of which 102,648 shares will vest on each of January 31, 2018 and 2019; and 102,647 shares will vest on January 31, 2020;~~

●

~~198,220 shares of restricted Class A common stock to an employee, of which 66,073 shares will vest on each of January 31, 2018 and 2019, and 66,074 shares will vest on January 31, 2020; and~~

●

~~76,856 shares of restricted Class A common stock to our non-employee directors, all of which will vest on January 31, 2018.~~

~~During the~~ ~~nine-month period ended September 30, 2016, we granted:~~

●

218,452 shares of restricted common stock to certain employees, of which 72,816 shares vested on January 31, 2017; 72,816 shares will vest on January 31, 2018; and 72,820 shares will vest on January 31, 2019;

●

~~166,677 shares of restricted Class A common stock to an employee, of which 55,559 shares vested on January 31, 2017 and 55,559 shares will vest on each of January 31, 2018 and 2019; and~~

●

~~19,048 shares of restricted common stock and 51,935 shares of restricted Class A common stock to certain non-employee directors, all of which vested on January 31, 2017.~~

A summary of restricted ~~common stock~~ ~~and Class~~class A common stock, common stock and restricted stock units activity for the ~~nine-month~~nine-month periods ended September 30, ~~2017~~ 2022 and ~~2016~~2021 is as follows:

	Nine Months Ended										Nine Months Ended
	September 30, 2017					September 30, 2016					September 30, 2022					September 30, 2021
				Weighted-					Weighted-					Weighted-					Weighted-
				average					average					average					average
				Grant Date					Grant Date					Grant Date					Grant Date
	Number of			Fair Value		Number of			Fair Value		*Number of*			*Fair Value*		*Number of*			*Fair Value*
	Shares			Per Share		Shares			Per Share		*Shares*			*Per Share*		*Shares*			*Per Share*
Restricted stock - common:
Outstanding - beginning of period⁽¹⁾												1,035,728		$	19.69		917,533		$	16.84
Granted⁽¹⁾												400,927		$	21.68		343,402		$	18.73
Vested												(341,918	)	$	19.03		(613,179	)	$	15.48
Outstanding - end of period⁽¹⁾												1,094,737		$	20.62		647,756		$	19.13

Restricted stock - class A common:
Outstanding - beginning of period⁽¹⁾												720,421		$	18.22		480,042		$	16.10
Granted⁽¹⁾												250,448		$	20.52		233,425		$	17.67
Vested												(229,758	)	$	16.99		(248,539	)	$	15.00
Outstanding - end of period⁽¹⁾												741,111		$	19.38		464,928		$	17.47

Restricted stock units - common stock:
Outstanding - beginning of period		396,033			$12.06		337,506			$9.57		125,247		$	19.02		90,184		$	18.92
Granted		307,943			$10.40		237,500			$12.88		259,079		$	23.87		95,115		$	19.05
Vested		(200,291	)		$11.82		(178,973	)		$8.46		(108,921	)	$	19.03		(60,052	)	$	18.92
Forfeited												(1,260	)	$	19.05		-		$	-
Outstanding - end of period		503,685			$11.14		396,033			$12.06		274,145		$	23.60		125,247		$	19.02

Restricted stock - class A common:
Outstanding - beginning of period		415,082			$10.15		374,693			$9.46
Granted		275,076			$10.84		218,612			$11.25
Vested		(227,526	)		$10.00		(178,223	)		$10.04
Outstanding - end of period		462,632			$10.63		415,082			$10.15

At ~~September 30, 2017 and December 31, 2016, we had outstanding options~~(1) For awards subject to ~~acquire 274,746 shares of our common stock, all of which were vested and exercisable. The exercise price of all our outstanding stock options~~future performance conditions, amounts assume target performance.

Leases

We determine if an arrangement is $1.99 per share. As of September 30, 2017 and December 31, 2016, we did not have any outstanding stock options for our Class A common stock. The aggregate intrinsic value of our outstanding stock options was $3.8 milliona lease at its inception. Operating lease liabilities are recognized at the lease commencement date based on the ~~closing market price~~present value of lease payments over the lease term. We generally use our ~~common stock~~incremental borrowing rate based on ~~September 30, 2017.~~

~~In October~~ ~~2017, we granted restricted stock units~~the information available at the lease commencement date in determining the present value of future payments, because the implicit rate of the lease is generally not known. Right-of-use (“~~RSUs”~~ROU”) ~~representing 215,500 shares of our common stock~~assets related to certain non-executive employees, under the provisions of our 2017 EICP. These RSUs will vest on January 31, 2018 and may be settled only by the issuance of shares of our common stock. These RSUs were valued at $3.4 million as of their date of grant. This value will be recorded in our operating ~~expenses~~lease liabilities are measured at lease commencement based on the initial measurement of the lease liability, plus any prepaid lease payments and less any lease incentives. Our lease terms that are used in determining our operating lease liabilities at lease commencement may include options to extend or terminate the leases when it is reasonably certain that we will exercise such options. We amortize our ROU assets as operating lease expense generally on a straight-line basis over the ~~four-month vesting period.~~lease term and classify both the lease amortization and imputed interest as operating expenses. We have lease agreements with lease and non-lease components, and in such cases, we generally account for the components separately with only the lease component included in the calculation of the ROU asset and lease liability.

We have operating leases that primarily relate to certain of our facilities, data centers and vehicles. As of September 30, 2022, our operating leases substantially have remaining terms of one year to 99 years, some of which include options to extend and/or terminate the leases. We do not recognize lease assets and lease liabilities for any lease with an original lease term of less than one year.

Cash flow movements related to our lease activities are included in other assets and accounts payable and other liabilities as presented in net cash provided by operating activities in our condensed consolidated statement of cash flows for the nine-months ended September 30, 2022.

As of September 30, 2022, the weighted-average remaining term of our operating leases was approximately 10 years. The weighted-average discount rate used to calculate the values associated with our operating leases was 6.63%. The table below describes the nature of lease expense and classification of operating lease expense recognized in the three and nine-months ended September 30, 2022 and 2021, respectively (in millions):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Lease expense
Operating lease expense	$	4	$	3	$	13	$	9
Short-term lease expense		1		1		2		2
Total lease expense	$	5	$	4	$	15	$	11

8. ~~Commitments~~The maturities of operating lease liabilities as of September 30, 2022, for the remainder of 2022 and ~~Contingencies~~the succeeding years were as follows (in millions):

Year ending December 31,	Operating Leases
Remainder of 2022	$	4
2023		13
2024		13
2025		12
2026		10
Thereafter		51
Total lease payments		103
Less: Imputed interest		(28	)
Present value of lease liabilities	$	75

~~From time~~

10.

Commitments and Contingencies

Legal Matters. We are and expect to ~~time, we are or may become~~continue to be subject to legal actions, proceedings and claims that arise in the normal course of our business. In ~~our~~the opinion of management, the amount of ultimate liability, if any, with respect to ~~known~~these actions, proceedings and claims will not materially affect our financial ~~position. However, the outcome~~position, results of ~~any one~~operations or ~~more matters cannot be predicted with certainty,~~cash flows, although legal proceedings are subject to inherent uncertainties, and ~~the~~ unfavorable ~~resolution of any matter~~rulings or events could have a material adverse ~~effect~~impact on ~~us.~~our financial position, results of operations or cash flows.

9Assembly Atlanta. ~~Goodwill~~On June 1, 2022, we announced that we have entered into a long-term agreement with NBCUniversal Media, LLC (“NBCU”) for NBCU to lease and ~~Intangible Assets~~operate new state-of-the-art studio facilities at our Assembly Atlanta development that is currently under construction.

~~During~~Assembly Atlanta is expected to be a 135-acre mixed-use real estate complex centered around the ~~nine-month period ended September 30, 2017,~~studio industry at the former site of the General Motors Assembly Plant, located in the City of Doraville, Georgia. The Assembly Atlanta development includes the 43-acre Assembly Studios complex.

Under the terms of the lease, NBCU will manage all studio and production facilities on-site within the Assembly Studios complex, including Gray’s own studio facilities and Gray’s Third Rail Studios. This arrangement is expected to leverage NBCU’s extensive experience and expertise in managing studio lots, ensure consistency across all the studio operations and leasing opportunities for third parties, and permit Gray to retain its focus on its own video production business.

We currently expect that our capital expenditures related to Assembly Atlanta will approximate $201 million for full-year 2022 and $73 million for full-year 2023. These projected capital expenditure amounts are net of currently anticipated proceeds from property sales and incentive payments that we ~~acquired~~expect to receive of approximately $43 million in the fourth quarter of 2022 and ~~disposed~~$59 million, at various times, during the firstthree quarters of ~~various television broadcast stations~~2023. We currently anticipate an additional $20 million of incentive payments after the third quarter of 2023. We can give no assurances of the actual proceeds to be received in the future from property sales and ~~broadcast licenses. See Note 2 “Acquisitions and Dispositions” for more information regarding these transactions. As a result~~incentive payments, nor the timing of ~~these transactions, our goodwill and other intangible asset balances changed.~~ any such proceeds.

11.

Goodwill and Intangible Assets

A summary of changes in our goodwill and other intangible assets, on a net basis, for the ~~nine-month period~~nine-months ended September 30, ~~2017~~ 2022 is as follows (in ~~thousands)~~millions):

	Net Balance at		Acquisitions										Net Balance at		Net Balance at December 31, 2021		Acquisitions And Adjustments, Net		Impairments		Amortization			Net Balance at September 30, 2022
	December 31,		And										September 30,
	2016		Adjustments		Dispositions			Impairments		Amortization			2017

Broadcast licenses															$	5,303	$	23	$	-	$	-		$	5,326
Goodwill	$	485,318	$	125,782	$	-		$	-	$	-		$	611,100		2,649		8		-		-			2,657
Broadcast licenses		1,340,305		202,923		(13,105	)		-		-			1,530,123
Definite lived intangible assets		56,250		42,606		-			-		(18,684	)		80,172
Finite-lived intangible assets																825		18		-		(156	)		687
Total intangible assets net of accumulated amortization	$	1,881,873	$	371,311	$	(13,105	)	$	-	$	(18,684	)	$	2,221,395	$	8,777	$	49	$	-	$	(156	)	$	8,670

A summary of the changes in our goodwill, on a gross basis, for the nine-months ended September 30, 2022, is as follows (in millions):

	As of							As of
	December 31,			Net				September 30,
	2021			Additions		Impairments		2022

Goodwill, gross	$	2,748		$	8	$	-	$	2,756
Accumulated goodwill impairment		(99	)		-		-		(99	)
Goodwill, net	$	2,649		$	8	$	-	$	2,657

As of September 30, ~~2017~~ 2022 and December 31, ~~2016,~~ 2021, our intangible assets and related accumulated amortization consisted of the following (in ~~thousands)~~millions):

	As of September 30, 2017							As of December 31, 2016							As of September 30, 2022							As of December 31, 2021
			Accumulated							Accumulated							Accumulated							Accumulated
	Gross		Amortization			Net		Gross		Amortization			Net		Gross		Amortization			Net		Gross		Amortization			Net
Intangible assets not currently subject to amortization:
Broadcast licenses	$	1,583,822	$	(53,699	)	$	1,530,123	$	1,394,004	$	(53,699	)	$	1,340,305	$	5,380	$	(54	)	$	5,326	$	5,356	$	(53	)	$	5,303
Goodwill		611,100		-			611,100		485,318		-			485,318		2,657		-			2,657		2,649		-			2,649
	$	2,194,922	$	(53,699	)	$	2,141,223	$	1,879,322	$	(53,699	)	$	1,825,623	$	8,037	$	(54	)	$	7,983	$	8,005	$	(53	)	$	7,952

Intangible assets subject to amortization:
Network affiliation agreements	$	6,134	$	(2,905	)	$	3,229	$	1,264	$	(1,264	)	$	-	$	218	$	(77	)	$	141	$	204	$	(44	)	$	160
Other definite lived intangible assets		143,446		(66,503	)		76,943		105,792		(49,542	)		56,250
Other finite lived intangible assets																1,055		(509	)		546		1,051		(386	)		665
	$	149,580	$	(69,408	)	$	80,172	$	107,056	$	(50,806	)	$	56,250	$	1,273	$	(586	)	$	687	$	1,255	$	(430	)	$	825

Total intangibles	$	2,344,502	$	(123,107	)	$	2,221,395	$	1,986,378	$	(104,505	)	$	1,881,873	$	9,310	$	(640	)	$	8,670	$	9,260	$	(483	)	$	8,777

Amortization expense for the ~~nine-month~~nine-month periods ended September 30, ~~2017~~ 2022 and ~~2016~~2021 was ~~$18.7~~$156 million and ~~$12.4~~$81 million, respectively. Based on the ~~current amount of~~ intangible assets subject to amortization as of September 30, 2022, we expect that amortization expense for the remainder of 2022 would be approximately $51 million, and, for the succeeding five years, amortization expense will be approximately as follows: ~~2018, $20.4~~2023, $197 million; ~~2019, $15.2~~2024, $132 million; ~~2020, $12.2~~2025, $121 million; ~~2021, $8.1~~2026, $91 million; and ~~2022, $4.8~~2027, $49 million. If and when acquisitions and dispositions occur in the future, actual amounts may vary materially from these estimates.

~~Impairment of goodwill and broadcast licenses~~

~~Our intangible assets are primarily comprised of broadcast licenses. There were no triggering events that required a test of our goodwill or intangible assets for impairment during the nine-month periods ended September 30, 2017 or 2016.~~

12.~~.     Income Taxes~~
Income Taxes

For the three and ~~nine-month~~nine-month periods ended September 30, ~~2017~~ 2022 and ~~2016,~~2021, our income tax expense and effective income tax rates were as follows (dollars in ~~thousands)~~millions):

Three Months Ended

Nine Months Ended

Three Months Ended

Nine Months Ended

September 30,

September 30,

September 30,

September 30,

2017

2016

2017

2016

2022

2021

2022

2021

Income tax expense
$ 10,529 $ 797 $ 65,751 $ 19,109 $ 42 $ 35 $ 101 $ 65
Effective income tax rate
40.7 % 136.5 % 40.6 % 42.0 % 28 % 194 % 27 % 52 %

We estimate our differences between taxable income or loss and recorded income or loss on an annual basis. Our tax provision for each quarter is based upon these ~~full-year~~full year projections, which are revised each reporting period. These projections incorporate estimates of permanent differences between U.S. GAAP income or loss and taxable income or loss, state income taxes and adjustments to our liability for unrecognized tax benefits to adjust our statutory Federal income tax rate of ~~35.0%~~21% to our effective income tax rate. For the ~~nine-month~~nine-month period ended September 30, 2017, these estimates increased our statutory Federal income tax rate of 35.0% to our effective income tax rate of 40.6% as follows: state income taxes added 4.3% and permanent differences between our U.S. GAAP income and taxable income added 1.3%. For the nine-month period ended September 30, 2016, 2022, these estimates increased or decreased our statutory Federal income tax rate ~~of 35.0%~~ to our effective income tax rate of ~~42.0%~~27% as follows: state income taxes added ~~4.6%~~5%, permanent differences between our U.S. GAAP income and taxable income added ~~2.1%, and discrete items added 1.0%, while adjustments~~1%. For the nine-month period ended September 30, 2021, these estimates increased or decreased our statutory Federal income tax rate to our ~~reserve for uncertain~~effective income tax ~~positions~~rate of 52% as follows: state income taxes added 5%, permanent differences between our U.S. GAAP income and taxable income added 3% and divestiture of component 2 goodwill resulted in an increase of 23%.
During the nine-months ended September 30, 2022, we made $128 million of federal and state income tax payments, net of refunds. During the remainder of 2022, we anticipate making income tax payments (before deducting refunds) of approximately $58 million to $68 million. As of September 30, 2022, we have approximately $337 million of various state operating loss carryforwards, of which we expect that approximately half will be utilized.
On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, contains modifications on the limitation of business interest for tax years beginning in 2019 and 2020, and permits net operating loss (“NOL”) carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018,2019, and 2020 to be carried back to each of the five preceding taxable years to generate a ~~reduction~~refund of ~~0.7%.~~previously paid income taxes. During 2020, we carried back certain net operating losses resulting in a refund of $21 million, that is currently outstanding.

20
13.
Segment Information

The Company operates in two business segments: broadcasting and production companies. The broadcasting segment operates television stations in local markets in the U.S. The production companies segment includes the production of television content. Costs identified as other are primarily corporate and administrative expenses. The following tables present certain financial information concerning the Company’s operating segments (in millions):

Production

As of and for the nine months ended September 30, 2022:

Broadcasting

Companies

Other

Consolidated

Revenue (less agency commissions)
$ 2,548 $ 56 $ - $ 2,604
Operating expenses before depreciation, amortization and loss on disposal of assets, net:
1,595 56 80 1,731
Depreciation and amortization
240 10 2 252
Loss on disposal of assets, net
(6 ) - - (6 )
Operating expenses
1,829 66 82 1,977
Operating income (loss)
$ 719 $ (10 ) $ (82 ) $ 627

Interest expense
$ - $ - $ 254 $ 254
Capital expenditures (excluding business combinations)
$ 114 $ 181 $ 3 $ 298
Goodwill
$ 2,612 $ 45 $ - $ 2,657
Total assets
$ 10,565 $ 358 $ 260 $ 11,183

For the nine months ended September 30, 2021:

Revenue (less agency commissions)
$ 1,648 $ 44 $ - $ 1,692
Operating expenses before depreciation, amortization and (gain) loss on disposal of assets, net:
1,099 39 75 1,213
Depreciation and amortization
146 9 2 157
(Gain) loss on disposal of assets, net
46 - - 46
Operating expenses
1,291 48 77 1,416
Operating income (loss)
$ 357 $ (4 ) $ (77 ) $ 276

Interest expense
$ - $ - $ 143 $ 143
Capital expenditures (excluding business combinations)
$ 63 $ 88 $ 3 $ 154

As of December 31, 2021:

Goodwill
$ 2,604 $ 45 $ - $ 2,649
Total assets
$ 10,592 $ 269 $ 247 $ 11,108
21
Item 2.~~Management’s~~Management’s Discussion and Analysis of Financial Condition and Results of Operations

Executive Overview

Introduction. The following discussion and analysis of the financial condition and results of operations of Gray Television, Inc. and its consolidated subsidiaries (except as the context otherwise provides, “Gray,” the “Company,” “we,” “us” or ~~“our,”~~“our”) ~~is a television broadcast company headquartered in Atlanta, Georgia, that owns and/or operates over 100 television stations and leading digital assets in markets throughout the United States. As of~~ September 30, 2017, we owned and operated television stations in 57 television markets broadcasting over 200 programming streams, including over 100 channels affiliated with the CBS Network (“CBS”), the NBC Network (“NBC”), the ABC Network (“ABC”) and the FOX Network (“FOX”). As of September 30, 2017, our station group reached approximately 10.4% of total United States television households.
~~The following analysis of the financial condition and results of operations of Gray Television, Inc. and its consolidated subsidiaries~~ should be read in conjunction with our unaudited condensed consolidated financial statements and ~~related~~ notes ~~contained in this report and~~thereto included elsewhere herein, as well as with our audited consolidated financial statements and ~~related~~ notes ~~contained~~thereto included in our Annual Report on Form 10-K for the ~~fiscal~~ year ended December 31, ~~2016~~2021 (the ~~“2016~~“2021 Form 10-K”). filed with the SEC.

~~Recent Acquisitions~~Business Overview. We are a multimedia company headquartered in Atlanta, Georgia, that is the nation’s second largest television broadcaster in terms of revenues. We are the nation’s largest owner of top-rated local television stations and digital assets in the United States. Our television stations serve 113 television markets that collectively reach approximately 36 percent of US television households. This portfolio includes 80 markets with the top-rated television station and 100 markets with the first and/or second highest rated television station. We also own video program companies Raycom Sports, Tupelo Media Group (formerly Tupelo Honey), PowerNation Studios, as well as the studio production facilities Assembly Atlanta and Third Rail Studios.

~~On January 13, 2017,~~Our revenues are derived primarily from broadcasting and internet advertising, retransmission consent fees and, to a lesser extent, other sources such as production of television and event programming, television commercials, tower rentals and management fees. For the nine-months ended September 30, 2022 and 2021, we ~~acquired KTVF-TV (NBC), KXDF-TV (CBS),~~generated revenue of $2.6 billion and ~~KFXF-TV (FOX)~~$1.7 billion, respectively.
Impact of the COVID-19 Global Pandemic and Related Government Restrictions on our Markets and Operations. The impact of the COVID-19 global pandemic and measures to prevent its spread continue to affect our businesses in a number of ways. The extent to which the COVID-19 global pandemic impacts our business, financial condition, results of operations and cash flows will depend on numerous evolving factors that we may not be able to accurately predict or assess, including the duration and scope of the pandemic; the negative impact it has on global and regional economies and economic activity, changes in advertising customers and consumer behavior, impact of governmental regulations that might be imposed in response to the pandemic; its short and longer-term impact on the levels of consumer confidence; actions governments, businesses and individuals take in response to the pandemic; and how quickly economies recover after the COVID-19 global pandemic subsides. The COVID-19 global pandemic’s impact on the capital markets could impact our cost of borrowing. See “The “COVID-19” global pandemic has had and is expected to continue to have an adverse impact on our business.”in Part I, Item 1A. Risk Factors of our 2021 Form 10-K.
Impact of Recent Acquisitions and Divestitures. As more fully described in our 2021 Annual Report on Form 10-K, during 2021 we completed several transactions that have, collectively, had a significant impact on our financial condition, results of operations and cash flows. We refer to these transactions collectively as the “2021 Acquisitions”. The impact of the 2021 Acquisitions is described in more detail in the ~~Fairbanks, Alaska television market (DMA 202)~~following discussion of our operating results. The 2021 Acquisitions included:
●
On April 7, 2021, we acquired land in the Atlanta suburb of Doraville, Georgia for an initial investment of approximately $80 million of cash. We acquired this property, in part, for the development of studio production facilities, currently in-progress. We refer to this development as “Assembly Atlanta”;
●
On August 2, 2021, we completed the acquisition of all the equity interests of Quincy Media, Inc. (“Quincy”). Net of divestitures to facilitate regulatory approvals, this transaction added 10 television stations in eight local markets. In connection with the acquisition we completed the divestiture to Allen Media (“Allen”) of television stations in seven markets previously owned by Quincy and located in our existing television markets, for an adjusted divestiture price of $398 million, which amount includes $18 million for working capital (the “Quincy Divestiture”). Net of divestitures the purchase price was $553 million;
●
On September 13, 2021, we completed the acquisition of Third Rail Studios for $27 million. The transaction represented an initial step in the broader development of Assembly Atlanta;
●
On September 23, 2021, to facilitate regulatory approvals for the acquisition of the Meredith Local Media Group (“Meredith”), we completed the divestiture of WJRT (ABC) in the Flint-Saginaw, Michigan market (DMA 64), to Allen for an adjusted purchase price of $72 million in cash, including working capital (the “Flint Divestiture”);
22
●
On November 9, 2021, to fund a portion of the purchase consideration for Meredith we issued $1.3 billion of our 2031 Notes;
●
On December 1, 2021, to fund a portion of the purchase consideration for Meredith we amended our Senior Credit facility and borrowed $1.5 billion under the 2021 Term Loan; and
●
On December 1, 2021, we completed the acquisition of Meredith for $2.8 billion net of one divestiture to facilitate regulatory approvals. This transaction added 17 television stations in 12 local markets to our operations.
The following table summarizes the “Transaction Related Expenses” incurred in connection with the 2021 Acquisitions during the three and nine-months ended September 30, 2022 and 2021, by type and by financial statement line item (in millions):

Three Months Ended

Nine Months Ended

September 30,

September 30,

2022

2021

2022

2021

Transaction Related Expenses by type:

Legal, consulting and other professional fees
$ 1 $ 11 $ 4 $ 19
Incentive compensation and other severance costs
- - 2 -
Termination of financing agreement
- - - 7
Total Transaction Related Expenses
$ 1 $ 11 $ 6 $ 26

Transaction Related Expenses by financial statement line item:

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

Broadcasting
$ 1 $ - $ 5 $ -
Corporate and administrative
- 11 1 19
Miscellaneous (income) expense, net
- - - 7
Total Transaction Related Expenses
$ 1 $ 11 $ 6 $ 26
Due to the significant effect that the 2021 Acquisitions have had on our results of operations, and in order to provide more meaningful period over period comparisons, we present herein certain financial information excluding the impact of the 2021 Acquisitions. This financial information does not include any adjustments for ~~$8.0 million (the “Fairbanks Acquisition”).~~other events attributable to the 2021 Acquisitions unless otherwise described.

~~On January 17, 2017, we acquired WBAY-TV (ABC),~~Revenues, Operations, Cyclicality and Seasonality. Broadcast advertising is sold for placement generally preceding or following a television station’s network programming and within local and syndicated programming. Broadcast advertising is sold in time increments and is priced primarily on the basis of a program’s popularity among the specific audience an advertiser desires to reach. In addition, broadcast advertising rates are affected by the number of advertisers competing for the available time, the size and demographic makeup of the market served by the station and the availability of alternative advertising media in the ~~Green Bay, Wisconsin television~~ market ~~(DMA 69), and KWQC-TV (NBC), in~~area. Broadcast advertising rates are generally the ~~Davenport, Iowa, Rock Island, Illinois, and Moline, Illinois or “Quad Cities” television market (DMA 102) (collectively,~~highest during the ~~“Media General Acquisition”), for $269.9 million.~~
~~On May 1, 2017, we acquired WDTV-TV (CBS) and WVFX-TV (FOX/CW) in the Clarksburg-Weston, West Virginia television market (DMA 169) from Withers Broadcasting Company~~most desirable viewing hours, with corresponding reductions during other hours. The ratings of ~~West Virginia (the “Clarksburg Acquisition”) for $26.5 million. On June 1, 2016, we began operating these stations, subject to the control of the seller, under~~ a local ~~marketing agreement (“LMA”) that terminated upon completion~~station affiliated with a major network can be affected by ratings of ~~the acquisition.~~
~~On May 1, 2017, we acquired WABI-TV (CBS/CW) in the Bangor, Maine television market (DMA 156)~~network programming. Most advertising contracts are short-term, and ~~WCJB-TV (ABC/CW) in the Gainesville, Florida television market (DMA 159) from Community Broadcasting Service and Diversified Broadcasting, Inc. (collectively, the “Diversified Acquisition”)~~generally run only for ~~$85.0 million. On April 1, 2017, we began operating these stations, subject to the control of the seller, under an LMA that terminated upon completion of the acquisition.~~
On August 1, 2017, we acquired WCAX-TV (CBS) in the Burlington, Vermont – Plattsburgh, New York television market (DMA 97) from Mt. Mansfield Television, Inc., (the “Vermont Acquisition”) for $29.0 million. On June 1, 2017, we began operating these stations, subject to the control of the seller, under an LMA that terminated upon completion of the acquisition.a few weeks.

We ~~refer to the eight~~ ~~stations acquired (excluding the stations acquired in the Clarksburg Acquisition) during the first nine months~~also sell internet advertising on our stations’ websites and mobile apps. These advertisements may be sold as banner advertisements, video advertisements and other types of ~~2017~~advertisements or sponsorships.
Our broadcast and ~~the stations we commenced operating under LMAs during that period as the “2017 Acquisitions.” We refer to the 13 stations acquired in 2016, and~~internet advertising revenues are affected by several factors that we ~~retained~~consider to be seasonal in ~~those acquisitions (including the stations in the Clarksburg Acquisition that we commenced operating under an LMA on June 1, 2016) as the “2016 Acquisitions.”~~nature. These factors include:

~~For additional information regarding our recent acquisitions, see Note 1 “Basis of Presentation” and Note 2 “Acquisitions” of our unaudited condensed consolidated financial statements contained elsewhere in this report.~~
~~Recent Financing Transactions~~
~~On February 7, 2017, we entered into the 2017 Senior Credit Facility consisting of a~~ $556.4 million term loan facility (the “2017 Initial Term Loan”) and a $100.0 million revolving credit facility (the “2017 Revolving Credit Facility”). Borrowings under the 2017 Initial Term Loan were used to repay amounts outstanding under our prior term loan.
●
Spending by political candidates, political parties and special interest groups increases during the even-numbered “on-year” of the two-year election cycle. This political spending typically is heaviest during the fourth quarter of such years;
●
Broadcast advertising revenue is generally highest in the second and fourth quarters each year. This seasonality results partly from increases in advertising in the spring and in the period leading up to and including the holiday season;
●
Core advertising revenue on our NBC-affiliated stations increases in certain years as a result of broadcasts of the Olympic Games; and
●
Because our stations and markets are not evenly divided among the Big Four broadcast networks, our local and national advertising revenue can fluctuate between years related to which network broadcasts the Super Bowl.

23

On April 3, 2017, we borrowed $85.0 million under an incremental term loan (the “2017 Incremental Term Loan” and, together with the 2017 Initial Term Loan, the “2017 Term Loan”) under the 2017 Senior Credit Facility to fund the Diversified Acquisition. Our quarterly principal payments under the 2017 Term Loan are $1.6 million.
~~Cyclicality, Seasonality and Advertising Concentrations~~
~~Broadcast stations like ours rely on~~We derived a material portion of our non-political broadcast advertising revenue from advertisers in a limited number of industries, particularly the services sector, comprising financial, legal and ~~as a result, they are sensitive to cyclical changes in~~medical advertisers, and the ~~economy. Our~~automotive industry. The services sector has become an increasingly important source of advertising revenue over the past few years. During each of the nine-months ended September 30, 2022 and 2021, approximately 28% of our broadcast advertising revenue (excluding political advertising ~~revenue is generally not as significantly affected by economic slowdowns or recessions as~~revenue) was obtained from advertising sales to the services sector. During the nine-months ended September 30, 2022 and 2021 approximately 16% and 18%, respectively, of our ~~non-political advertising revenue.~~
~~Broadcast~~broadcast advertising revenue ~~is generally highest in the second and fourth quarters each year. This seasonality results partly~~(excluding political advertising revenue) was obtained from ~~increases in consumer~~ advertising ~~in the spring and retail advertising in the period leading up~~sales to ~~and including the Christmas holiday season. Broadcast advertising~~automotive customers. Revenue from these industries may represent a lower percentage of total revenue ~~is also typically higher~~ in even-numbered years due to, ~~spending by political candidates, political parties and special interest groups during~~among other things, the ~~“on year”~~decreased availability of advertising time, as a result of such years being the “on-year” of the two-year ~~political~~election cycle.
While our total revenues have increased in recent years as a result of our acquisitions, our revenue remains under pressure from the impact on the advertising ~~cycle. This political~~market as a result of the COVID-19 global pandemic and from the internet as a competitor for advertising ~~spending typically~~spending. We have been taking steps to mitigate the impacts of COVID-19 and we continue to enhance and market our internet websites in an effort to generate additional revenue. Our aggregate internet revenue is ~~heaviest during the fourth quarter.~~derived from both advertising and sponsorship opportunities directly on our websites.
Our primary broadcasting operating expenses are employee compensation, related benefits and programming costs. In addition, the ~~broadcast~~broadcasting operations incur overhead expenses, such as maintenance, supplies, insurance, rent and utilities. A large portion of ~~Olympic Games by~~the operating expenses of our ~~NBC-affiliated stations during even-numbered years generally leads~~broadcasting operations is fixed. We continue to ~~increased viewership~~monitor our operating expenses and ~~revenue during those years.~~seek opportunities to reduce them where possible.

~~For the~~ ~~nine-month period ended September 30, 2017, excluding political advertising revenue,~~Assembly Atlanta. On June 1, 2022, we entered into a long-term agreement with NBCU, for NBCU to lease and operate new state-of-the-art studio facilities (Assembly Studios) at our largest advertising customer category was automotive. For the nine-month periods ended September 30, 2017 and 2016, we earned approximately 25% and 23%, respectively, of our total broadcast advertising revenue, excluding political advertising revenue, from automotive customers. Our business and operating results could be materially adversely affected if advertising revenue from automotive customers were to decrease significantly. Our business and operating results could also be materially adversely affected if revenue decreased from one or more other significant advertising categories, such as the medical, restaurant, communications, furniture and appliances, entertainment, or financial service industries.Assembly Atlanta development that is currently under construction.

Please see our “Results of Operations” and “Liquidity and Capital Resources” sections below for further discussion of our operating results.

Revenue
Set forth below are the principal types of revenue, less agency commissions, earned by us for the periods indicated and the percentage contribution of each type of revenue to our total revenue (dollars in ~~thousands)~~millions):

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2017

2016

Percent

Percent

Percent

Percent

Amount

of Total

Amount

of Total

Amount

of Total

Amount

of Total

Revenue:

Local (including internet/digital/mobile)
$ 110,033 50.2% $ 102,172 50.0% $ 330,547 50.9% $ 296,253    51.5%
National
31,027 14.2% 25,426 12.4% 86,822 13.4% 73,575    12.8%
Political
4,005 1.8% 22,272 10.9% 9,034    1.4% 41,576     7.2%
Retransmission consent
70,150 32.0% 51,096 25.0% 207,094 31.9% 148,914    25.9%
Other
3,762 1.8% 3,524    1.7% 15,622     2.4% 14,528     2.6%
Total
$ 218,977 100.0% $ 204,490 100.0% $ 649,119 100.0% $ 574,846 100.0%

Three Months Ended September 30,

Nine Months Ended September 30,

2022

2021

2022

2021

Percent

Percent

Percent

Percent

Amount

of Total

Amount

of Total

Amount

of Total

Amount

of Total

Revenue:

Core advertising
$ 359 39 % $ 292 49 % $ 1,090 42 % $ 831 49 %
Political
144 16 % 9 2 % 260 10 % 24 1 %
Retransmission consent
368 40 % 266 44 % 1,143 44 % 755 45 %
Production companies
20 2 % 20 3 % 56 2 % 44 3 %
Other
18 3 % 14 2 % 55 2 % 38 2 %
Total
$ 909 100 % $ 601 100 % $ 2,604 100 % $ 1,692 100 %

Results of Operations

~~Three-~~~~Months~~Three-Months Ended September 30, ~~2017~~2022 (“ (“~~2017~~the 2022 three-month ~~period”~~period”) Compared t~~o Three-~~~~Months~~to Three-Months Ended September 30, ~~2016~~2021 (“ (“~~2016~~the 2021 three-month ~~period”~~period”)

~~Revenue~~Revenue.. Total revenue increased ~~$14.5~~$308 million, or 7%51%, to ~~$219.0~~$909 million in the ~~2017~~2022 three-month period. Total revenue increased primarily due to our 2021 Acquisitions, that made a net impact of $249 million. During the 2022 three-month period, ~~compared to~~excluding the 2016 three-month period. The 2017 Acquisitions and 2016 Acquisitions collectively accounted for approximately $59.3 million of total revenue in the 2017 three-month period. The 2016 Acquisitions accounted for approximately $37.1 million of total revenue in the 2016 three-month period. Excluding thenet impact of the 2017 Acquisitions and the 2016 Acquisitions, total revenue at our legacy stations decreased primarily due to a $14.2 million decrease in political advertising revenue, resulting primarily from 2017 being the “off-year” of the two-year election cycle. In addition, local and national advertising revenue was impacted by our broadcast of the 2016 Olympic Games in the 2016 nine-month period that produced approximately $8.2 million of local and national advertising revenue. These decreases were partially offset by increases of $10.0 million of retransmission consent revenue in the 2017 three-month period.2021 Acquisitions:
●
Political advertising revenue increased by $73 million, resulting primarily from 2022 being the “on-year” of the two-year election cycle;
24

●
Retransmission consent revenue was unchanged;
●
Core advertising decreased by $11 million largely as a result of the increase in political advertising revenue that reduces the number of time slots that are available for us to sell.

~~Broadcast~~ ~~expenses~~Broadcasting Expenses. ~~Broadcast~~Broadcasting expenses (before depreciation, amortization and gain or loss on disposal of assets) increased ~~$18.7~~$153 million, or ~~16%~~40%, to ~~$139.4~~$537 million in the ~~2017~~2022 three-month period. Total broadcasting expenses increased primarily due to our 2021 Acquisitions that made a net impact of $142 million. During the 2022 three-month period, excluding the net impact of the 2021 Acquisitions:
●
Payroll broadcasting expenses increased by approximately $11 million as a result of routine increases in compensation.
●
Non-payroll broadcasting expenses increased by approximately $1 million.
●
Broadcast non-cash stock-based compensation expense was approximately $1 million in each of the 2022 and 2021 three-month periods.
Production company expenses. Production company operating expenses (before depreciation, amortization and gain or loss on disposal of assets) were $16 million in the 2022 three-month period, an increase of $3 million compared to the 2021 three-month period, due ~~primarily~~ to the 2017 Acquisitions and 2016 Acquisitions, which accounted for approximately $34.9 million of broadcast expenses in the 2017 three-month period. The 2016 Acquisitions accounted for approximately $20.9 million of our broadcast expenses in the 2016 three-month period. In addition to the impactlessening effects of the ~~2017 Acquisitions and the 2016 Acquisitions, non-compensation expense at our legacy stations increased $5.9 million primarily as a result of a $5.3 million increase~~COVID-19 global pandemic which had affected production operations in retransmission expense, consistent with the increase in retransmission consent revenue. Non-cash stock based compensation expenses were $0.4 million and $0.3 million in the 2017 and 2016 three-month periods, respectively.prior periods.

Corporate and ~~administrative expenses.~~Administrative Expenses. Corporate and administrative expenses (before depreciation, amortization and gain or loss on disposal of assets) ~~increased $1.1~~decreased by $5 million, or ~~15%~~16%, to ~~$8.3~~$27 million. During the 2022 three-month period compensation expense increased by $4 million and professional services decreased by $9 million. These decreases were primarily reductions in Transaction Related Expenses when compared to the 2021 three-month period. Non-cash stock-based compensation expenses increased to $4 million in the ~~2017~~2022 three-month period compared to ~~the 2016 three-month period, primarily as a result of increased professional services and promotional expenses. Non-cash share based compensation expenses were $1.2 million and $1.0~~$3 million in the ~~2017 and 2016~~2021 three-month ~~periods, respectively.~~period.

Depreciation.Depreciation of property and equipment ~~increased $1.6~~totaled $33 million ~~or 14%, to $13.1~~and $26 million in the ~~2017~~2022 three-month period ~~compared to~~and the ~~2016~~2021 three-month ~~period.~~period, respectively. Depreciation increased primarily due to the addition of depreciable assets acquired ~~as a part of~~in the ~~2017 Acquisitions and the 2016~~2021 Acquisitions.

Amortization ~~of intangible assets.~~ . Amortization of intangible assets totaled $52 million and $28 million in the 2022 three-month period and the 2021 three-month period, respectively. Amortization increased ~~approximately $2.2~~primarily due to the addition of finite-lived intangible assets acquired in the 2021 Acquisitions.
(Gain) Loss on Disposals of Assets, Net. We reported a gain of $1 million in the 2022 three-month period and a loss on disposals of assets of $51 million in the 2021 three-month period. In the 2021 three-month period, we reported a non-cash loss of $48 million on the Quincy Divestiture transaction and a non-cash loss of $5 million on the Flint Divestiture. These losses were partially offset by gains on asset disposals from the FCC Repack process and in the normal course of business.
Interest Expense. Interest expense increased $46 million, or ~~53%~~96%, to ~~$6.5~~$94 million ~~during~~for the ~~2017~~2022 three-month period compared to the ~~2016 three-month period. Amortization expense increased primarily due to the additional definite-lived intangible assets acquired as a part of the 2017 Acquisitions and the 2016 Acquisitions.~~
~~Interest expense~~. ~~Interest expense decreased $3.7 million or 13% to $24.2 million in the 2017 three-month period~~ ~~compared to the 2016~~2021 three-month period. This ~~decrease~~increase was primarily attributable to the ~~net effect~~addition of ~~an increase in~~debt related to the ~~average borrowings outstanding, offset by a decrease in our average interest rates.~~2021 Acquisitions. The average interest rate, excluding amortization of deferred financing costs, on our total outstanding debt balance ~~was 4.9% and 5.6%~~increased to 5.3% during the ~~2017~~2022 three-month period, ~~and~~compared to 4.4% during the ~~2016~~2021 three-month ~~period, respectively.~~period. Our average outstanding debt principal balance was ~~$1.9~~$6.7 billion and ~~$1.7~~$4.0 billion during the ~~2017~~2022 and 2021 three-month ~~period and the 2016 three-month period, respectively, with the increase primarily attributable to the borrowings to finance the 2017 Acquisitions and 2016 Acquisitions.~~periods, respectively.
~~Loss from early extinguishment of debt~~. In the 2016 three-month period we completed a tender offer and redemption of our then outstanding 7½% senior notes due 2020 (the “Tender Offer” and the “Redemption”). We recorded a loss from early extinguishment of debt of approximately $32.0 million ($19.5 million net of tax) in the 2016 three-month period, consisting of Tender Offer premiums of $18.2 million, premiums related to the Redemption of $9.1 million, the write off of unamortized deferred financing costs of $8.0 million and the payment of approximately $0.2 million in legal and other professional fees; but reduced by the recognition of un-accreted net premium of $3.5 million.

Income ~~tax expens~~e.Tax Expense. We recognized income tax expense of ~~$10.5~~$42 million and ~~$0.8~~$35 million ~~for~~in the ~~2017~~2022 and ~~2016~~2021 three-month periods, respectively. ~~For the 2017 and 2016 three-month periods, our~~Our effective income tax ~~rate was 40.7%~~rates were 28% and ~~136.5%,~~194% in the 2022 and 2021 three-month periods, respectively. We estimate our differences between taxable income or loss and recorded income or loss on an annual basis. Our tax provision for each ~~quarter~~interim period is based upon these ~~full-year~~full year projections that are revised each reporting period. These projections incorporate estimates of permanent differences between U.S. GAAP income or loss and taxable income or loss, state income taxes and adjustments to our liability for unrecognized tax benefits. For the ~~2017~~2022 three-month period, these estimates increased ~~or decreased~~ our statutory Federal income tax rate of ~~35.0%~~21% to our effective income tax rate of 28% as follows: state income taxes added ~~4.5%,~~5% and permanent differences between our U.S. GAAP income and taxable income added ~~1.3%, and discrete items decreased the effective rate by 0.1%~~2%.
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~~Nine~~-~~Months~~Nine-Months Ended September 30, ~~2017~~2022 (“the 2022 nine-month period” (“~~2017~~~~nine~~~~-month period”~~) Compared to ~~Nine~~-~~Months~~to Nine-Months Ended September 30, ~~2016~~2021 (“the 2021 nine-month period” (“)~~2016~~~~nine~~~~-month period”)~~
Revenue.
~~Revenue~~. Total revenue increased ~~$74.3~~$912 million, or ~~13%~~54%, to ~~$649.1 million~~$2.6 billion in the ~~2017~~2022 nine-month period ~~as compared to~~from the ~~2016~~2021 nine-month period. ~~The 2017~~Total revenue increased primarily due to our 2021 Acquisitions ~~and 2016 Acquisitions collectively accounted for approximately $167.9 million~~that made a net impact of ~~total revenue in~~$735 million. During the ~~2017~~2022 nine-month ~~period. The 2016 Acquisitions accounted for approximately $87.9 million of total revenue in~~period, excluding the ~~2016 nine-month period. Excluding the~~net impact of the 2017 Acquisitions and the 2016 Acquisitions, total revenue at our legacy stations decreased primarily due to a decrease of $28.9 million in political advertising revenue, resulting primarily from 2017 being the “off-year” of the two-year election cycle. This decrease at our legacy stations was offset by increases of $28.9 million in retransmission consent revenue in the 2017 nine-month period.2021 Acquisitions:

Local and national advertising revenue declined, in part, as a result of the impact of the broadcast of the 2017 Super Bowl on our FOX-affiliated stations generating approximately $0.6 million of local and national advertising revenue, compared to $1.6 million that we earned from the broadcast of the 2016 Super Bowl on our CBS-affiliated stations. ~~Local and national advertising revenue also declined because the 2016 nine-month period included approximately $8.2 million of revenue from the broadcast of the 2016 Olympic Games.~~
●
Political advertising revenue increased by $133 million, resulting primarily from 2022 being the “on-year” of the two-year election cycle;
●
Retransmission consent revenue increased by $37 million due to an increase in rates;
●
Core advertising revenue was unchanged;
●
Core advertising revenue from the broadcast of the 2022 Super Bowl on our NBC-affiliated stations was approximately $5 million, compared to $6 million that we earned from the broadcast of the 2021 Super Bowl on our CBS-affiliated stations and $8 million of revenue from the broadcast of the Olympic Games; and
●
Production company revenue increased by $8 million in the 2022 nine-month period primarily due to the lessening effects of the COVID-19 global pandemic which had affected our customers in prior periods.

~~Broadcast~~ ~~expenses~~Broadcasting Expenses. ~~Broadcast~~Broadcasting expenses (before depreciation, amortization and gain or loss ~~(gain)~~ on disposal of assets) increased ~~$59.8~~$496 million, ~~or 17%,~~ to ~~$406.4 million in~~$1.6 billion. Total broadcasting expenses increased primarily due to our 2021 Acquisitions that made a net impact of $452 million. During the ~~2017~~2022 nine-month period, due primarily to the 2017 Acquisitions and 2016 Acquisitions, which accounted for approximately $95.1 million of broadcast expenses in the 2017 nine-month period. The 2016 Acquisitions accounted for approximately $52.6 million of our broadcast expenses in the 2016 nine-month period. In addition toexcluding the impact of the ~~2017 Acquisitions~~2021 Acquisitions:
●
Payroll broadcasting expenses increased by approximately $25 million as a result of routine increases in compensation.
●
Non-payroll broadcasting expenses increased by approximately $19 million primarily because retransmission expense increased $26 million, partially offset by decreases of $7 million in syndicated programming expenses.
●
Broadcast non-cash stock-based compensation expense was $3 million and $2 million in the 2022 and 2021 nine-month periods, respectively.
Production Company Expenses. Production company expenses (before depreciation, amortization and ~~the 2016 Acquisitions, non-compensation expense at our legacy stations~~gain or loss on disposal of assets) increased $18.5 million primarily as a result of a $15.7 million increase in retransmission expense, consistent with the increased retransmission consent revenue, and $5.2 million of professional fees. Non-cash stock based compensation expenses were $1.1 million and $0.9by approximately $17 million in the ~~2017 and 2016~~2022 nine-month period to $56 million, compared to $39 million in the 2021 nine-month period. The increase is due to the lessening effects of the COVID-19 global pandemic which had affected production operations in prior periods, respectively.

Corporate and ~~administrative expenses.~~Administrative Expenses. Corporate and administrative expenses (before depreciation, amortization and gain or loss ~~(gain)~~ on disposal of assets) ~~decreased $7.0~~increased by $5 million, or ~~22%~~7%, to ~~$24.4~~$80 million ~~for~~in the ~~2017~~2022 nine-month ~~period~~ period compared to the ~~2016~~2021 nine-month period. These increases were primarily the result of routine increases in compensation expense of $12 million. Non-compensation expenses decreased by $8 million in the 2022 nine-month period primarily as a result of decreases ~~of $7.7 million~~ in professional ~~fees related to acquisitions. We recorded corporate non-cash~~services costs. Non-cash stock-based compensation ~~expense of $3.2 million and $2.9~~expenses increased to $14 million in the ~~2017 and 2016~~2022 nine-month ~~periods, respectively.~~period compared to $9 million in the 2021 nine-month period.

Depreciation.Depreciation of property and equipment ~~increased $4.3~~totaled $96 million ~~or 13%, to $38.6~~and $76 million ~~for~~in the ~~2017~~2022 nine-month period ~~as compared~~and the 2021 nine-month period, respectively. Depreciation increased primarily due to the ~~2016 nine-month period. Depreciation increased due to additional property and equipment being placed~~addition of depreciable assets acquired in ~~service due to routine asset purchases and~~ the ~~2017 Acquisitions and the 2016~~2021 Acquisitions.

Amortization ~~of intangible assets.~~ . Amortization of intangible assets totaled $156 million and $81 million in the 2022 nine-month period and the 2021 nine-month period, respectively. Amortization increased ~~$6.3~~primarily due to the addition of definite-lived intangible assets acquired in the 2021 Acquisitions.
(Gain) Loss on Disposals of Assets, Net. We reported non-cash gain on disposals of assets of $6 million ~~or 51%, to $18.7 million during~~in the ~~2017~~2022 nine-month period compared to ~~the 2016 nine-month period due to amortization~~a loss on disposals of ~~the additional definite-lived intangible~~ assets of $46 million in the ~~2017 Acquisitions~~2021 nine-month period. We reported a non-cash loss of $48 million on the Quincy Divestiture and ~~2016 Acquisitions.~~a non-cash loss of $5 million on the Flint Divestiture in the 2021 nine-month period. These losses were partially offset by gains related to assets disposals from the Repack process and in the normal course of business.

26

Interest ~~expense.~~Expense. Interest expense ~~decreased $2.3~~was $254 million ~~or 3%, to $71.2~~and $143 million ~~for~~in the ~~2017~~2022 and 2021 nine-month ~~period compared to the 2016 nine-month period.~~periods, respectively. This increase was attributable to ~~a decrease in our average interest rates, partially offset by~~both an increase in ~~our average borrowings outstanding.~~loan principal and increasing interest rates. The average interest rate, excluding amortization of deferred financing costs, on our total outstanding debt balance was ~~4.9%~~4.8% and ~~5.6%~~4.4% during the ~~2017~~2022 and 2021 nine-month ~~period and the 2016 nine-month period,~~periods, respectively. Our average outstanding debt balance was ~~$1.8~~$6.8 billion and ~~$1.6~~$4.1 billion during the ~~2017~~2022 and 2021 nine-month ~~period and the 2016 nine-month period, respectively, with the increase primarily attributable to the borrowings to finance the 2017 Acquisitions and 2016 Acquisitions.~~
~~Loss from early extinguishment of debt~~~~. In the 2017 nine-month period, we recorded a loss from early extinguishment of debt of approximately $2.9 million, as a result of entering into our 2017 Senior Credit Facility.~~ ~~In the~~ 2016 nine-month period we completed the Tender Offer and Redemption, and we recorded a loss from early extinguishment of debt of approximately $32.0 million ($19.5 million net of tax) in the 2016 nine-month period, consisting of Tender Offer premiums of $18.2 million, premiums related to the redemption of $9.1 million, the write off of unamortized deferred financing costs of $8.0 million and the payment of approximately $0.2 million in legal and other professional fees; but reduced by the recognition of un-accreted net premium of $3.5 million.periods, respectively.

Income ~~tax expense.~~Tax Expense. We recognized income tax expense of ~~$65.8~~$101 million and ~~$19.1~~$65 million in the ~~2017~~2022 and ~~2016~~2021 nine-month periods, respectively. ~~For the 2017 and 2016 nine-month periods, our~~Our effective income tax ~~rate was 40.6%~~rates were 27% and ~~42.0%, respectively. The primary reason for the increase in our income tax expense was the increase in our pre-tax income~~52% in the ~~2017~~2022 and 2021 nine-month ~~period compared to the 2016 nine-month period.~~periods, respectively. We estimate our differences between taxable income or loss and recorded income or loss on an annual basis. Our tax provision for each ~~quarter~~interim period is based upon these ~~full-year~~full year projections that are revised each reporting period. These projections incorporate estimates of permanent differences between U.S. GAAP income or loss and taxable income or loss, state income taxes and adjustments to our liability for unrecognized tax benefits. For the ~~2017~~2022 nine-month period, these estimates increased our statutory ~~Federal~~federal income tax rate of ~~35.0%~~21% to our effective income tax rate of 27% as follows: state income taxes added ~~4.3%~~5% and permanent differences between our U.S. GAAP income and taxable income added ~~1.3%~~1%.

Liquidity and Capital Resources

General

The following table ~~present~~spresents data that we believe is helpful in evaluating our liquidity and capital resources (in ~~thousands)~~millions):

Nine Months Ended September 30,

Nine Months Ended September 30,

2017

2016

2022

2021

Net cash provided by operating activities
$ 114,346 $ 103,419 $ 596 $ 283
Net cash used in investing activities
(336,334 ) (469,504 ) (362 ) (664 )
Net cash provided by financing activities
69,653 499,165
(Decrease) increase in cash
$ (152,335 ) $ 133,080
Net cash used in financing activities
(279 ) (70 )
Decrease in cash
$ (45 ) $ (451 )

As of

September 30, 2017

December 31, 2016

Cash
$ 172,854 $ 325,189
Long-term debt
$ 1,831,610 $ 1,756,747
Borrowing availability under the Revolving Credit Facility
$ 100,000 $ 60,000
~~Our 2017 Senior Credit Facility consists of the 2017 Revolving Credit Facility and the 2017 Term Loan.~~ Excluding accrued interest, the amount outstanding under our 2017 Senior Credit Facility as of September 30, 2017 and the 2014 Senior Credit Facility as of December 31, 2016 consisted solely of a term loan totaling $636.8 million and $556.4 million, respectively. On April 3, 2017, we borrowed $85.0 million under the 2017 Incremental Term Loan. Our maximum borrowing availability under our 2017 Revolving Credit Facility is limited by our required compliance with certain restrictive covenants, including a first lien net leverage ratio covenant.

~~As of~~ September 30, 2017, the interest rate on the balance outstanding under the 2017 Senior Credit Facility was 3.7%. As of December 31, 2016, the interest rate on the balance outstanding under the 2014 Senior Credit Facility was 3.9%.
~~Borrowings under t~~he 2017 Term Loan currently bear interest, at our option, at either the London Interbank Offered Rate (“LIBOR”) or the Base Rate (as defined below), in each case, plus an applicable margin. Currently, the applicable margin is 2.25% for LIBOR borrowings and 1.25% for Base Rate borrowings. The applicable margin is determined quarterly based on our leverage ratio as set forth in the 2017 Senior Credit Facility (the “Leverage Ratio”). If our Leverage Ratio is less than or equal to 5.25 to 1.00, the applicable margin will be 2.25% for all LIBOR borrowings and 1.25% for all Base Rate borrowings and if the Leverage Ratio is greater than 5.25 to 1.00, the applicable margin will be 2.5% for all LIBOR borrowings.
~~Borrowings under the 2017 Revolving Credit Facility~~ currently bear interest, at our option, at either LIBOR plus 1.50% or the Base Rate plus 0.50%, in each case based on a first lien leverage ratio test as set forth in the 2017 Senior Credit Facility (the “First Lien Leverage Ratio”). Base Rate is defined as the greatest of (i) the administrative agent’s prime rate, (ii) the overnight federal funds rate plus 0.50% and (iii) LIBOR plus 1.00%. We are required to pay a commitment fee on the average daily unused portion of the 2017 Revolving Credit Facility, which rate may range from 0.375% to 0.50% on an annual basis, based on the First Lien Leverage Ratio. The 2017 Revolving Credit Facility matures on February 7, 2022 and the 2017 Term Loan matures on February 7, 2024.
As a result of the amendment and restatement of our prior senior credit facility in the form of the 2017 Senior Credit Facility, we recorded a loss from early extinguishment of debt of approximately $2.9 million in the 2017 nine-month period, and we incurred approximately $5.0 million in deferred financing costs that will be amortized over the term of the 2017 Senior Credit Facility. Our quarterly principal payments under the 2017 Term Loan are $1.6 million.
~~As of~~ September 30, 2017 and December 31, 2016, we had $525.0 million of 2024 Notes outstanding. The interest rate and yield on the 2024 Notes were 5.125%. The 2024 Notes mature on October 15, 2024. Interest is payable semiannually, on April 15 and October 15 of each year, commencing on April 15, 2017.
~~On June 14, 2016, we completed the private placement of $500.0 million of our 2026 No~~tes (the “Original 2026 Notes”) at par. On September 14, 2016, we completed the private placement of an additional $200.0 million of our 2026 Notes (the “Additional 2026 Notes”). The Additional 2026 Notes were issued at a price of 103.0%, resulting in aggregate gross proceeds of approximately $206.0 million, plus accrued and unpaid interest from and including June 14, 2016. As of September 30, 2017 and December 31, 2016, we had $700.0 million of 2026 Notes outstanding. The interest rate and yield on the Original 2026 Notes were each 5.875%. The interest rate and yield on the Additional 2026 Notes were 5.875% and 5.398%, respectively. The Additional 2026 Notes are an additional issuance of, rank equally with and form a single series with the Original 2026 Notes. The 2026 Notes mature on July 15, 2026. Interest is payable semiannually, on January 15 and July 15 of each year.
~~Our obligations under the 2017 Senior Credit Facility are secured by substantially all of our~~ consolidated assets, excluding real estate. In addition, substantially all of our subsidiaries are joint and several guarantors of, and our ownership interests in those subsidiaries are pledged to collateralize, our obligations under the 2017 Senior Credit Facility. Gray Television, Inc. is a holding company with no material independent assets or operations. For all applicable periods, the 2024 Notes and 2026 Notes have been fully and unconditionally guaranteed, on a joint and several, senior unsecured basis, by substantially all of Gray Television, Inc.'s subsidiaries. Any subsidiaries of Gray Television, Inc. that do not gurantee the 2024 Notes and 2026 Notes are minor. As of September 30, 2017, there were no significant restrictions on the ability of Gray Television, Inc.'s subsidiaries to distribute cash to Gray or to the guarantor subsidaries.
~~The 2017 Senior Credit Facility contains affirmative and restrictive covenants with which we must comply, including: (a) limitat~~ions on additional indebtedness, (b) limitations on liens, (c) limitations on the sale of assets, (d) limitations on guarantees, (e) limitations on investments and acquisitions, (f) limitations on the payment of dividends and share repurchases, (g) limitations on mergers and (h) maintenance of the First Lien Leverage Ratio while any amount is outstanding under the revolving credit facility, as well as other customary covenants for credit facilities of this type. The 2026 Notes and 2024 Notes include covenants with which we must comply which are typical for borrowing transactions of their nature. As of September 30, 2017 and December 31, 2016, we were in compliance with all required covenants under all our debt obligations.

As of

September 30, 2022

December 31, 2021

Cash
$ 144 $ 189
Long-term debt, including current portion, less deferred financing costs
$ 6,605 $ 6,755
Series A Perpetual Preferred Stock
$ 650 $ 650
Borrowing availability under Revolving Credit Facility
$ 496 $ 497

Net Cash Provided By (Used In) Operating, Investing and Financing Activities

Net cash provided by operating activities was ~~$114.3~~$596 million in the ~~2017~~2022 nine-month period compared to ~~$103.4~~$283 million in the ~~2016~~2021 nine-month period. The increase of ~~$10.9~~$313 million in the ~~2017~~2022 nine-month period was the result of a ~~$69.9~~$208 million increase in net income, ~~partially offset by a $49.5~~primarily due to increases in political advertising revenue. Our increase in net income included an increase of $74 million ~~decrease~~ in net non-cash ~~expenses, primarily depreciation, amortization of intangible assets, deferred income taxes and gain on disposal of assets. Changes in our working capital accounts used $9.5~~operating expenses. Approximately $31 million of ~~cash. These changes were primarily due to the impact on our statement of operations from~~cash was provided by changes in ~~the components of our debt financing, changes in our tax position, the 2017 Acquisitions, the 2016 Acquisitions and the gain on disposal of assets resulting from the FCC Sprectrum Auction.~~net working capital.

Net cash used in investing activities was ~~$336.3~~$362 million in the ~~2017~~2022 nine-month period compared to net cash used in investing activities of ~~$469.5~~$664 million for the ~~2016~~2021 nine-month period. The decrease in the amount used was largely due to ~~decreased use of cash for~~a reduction in our acquisition ~~activity~~activities in the ~~2017~~2022 nine-month period, compared to the 2021 nine-month period.

Net cash ~~provided by~~used in financing activities was approximately ~~$69.7~~$279 million in the ~~2017~~2022 nine-month period compared to net cash ~~provided by~~used in financing activities of ~~$499.2~~$70 million in the ~~2016~~2021 nine-month period. ~~Net~~The primary reasons for the increase in cash ~~provided by financing activities~~used in the ~~2017~~2022 nine-month period, ~~was primarily from borrowings~~were the use of ~~$85.0 million under 2017 Term Loan; reduced by $4.6~~$161 million of ~~quarterly principal payments under~~cash to reduce our outstanding debt in the ~~2017 Term Loan; reduced by $5.0 million of deferred financing costs primarily related to the 2017 Senior Credit Facility.~~2022 nine-month period. Also in the ~~2017~~2022 nine-month period, we used ~~$4.0~~$50 million to repurchase shares of our common stock ~~and made $1.8 million~~on the open market. In the 2021 nine-month period, we did not repurchase any shares of ~~payments for taxes related to net share settlements of equity awards.~~our common stock.
27

Liquidity

AsBased on our debt outstanding as of September 30, ~~2017,~~2022, we ~~had $6.4 million in debt principal payments due over the next twelve months. We~~ estimate that we will make approximately ~~$90.8~~$386 million in debt interest payments over the twelve months immediately following September 30, ~~2017.~~2022. Interest rates have recently been increasing and may increase further over the remainder of 2022. Accordingly, our future debt interest payments may exceed our current estimate but we do not believe that the potential increase will have a material impact on our operations or liquidity.

Although our cash flows from operations are subject to a number of risks and uncertainties, including the COVID-19 global pandemic and related economic effects, we anticipate that our cash on hand, future cash expected to be generated from operations, borrowings from time to time under the ~~2017~~2019 Senior Credit Facility (or any such other credit facility as may be in place at the appropriate time) and, potentially, external equity or debt financing, will be sufficient to fund any debt service obligations, estimated capital expenditures and acquisition-related obligations. Any potential equity or debt financing would depend upon, among other things, the costs and availability of such financing at the appropriate time. We also ~~presently~~ believe that our future cash expected to be generated from operations and borrowing availability under the ~~2017~~2019 Senior Credit Facility (or any such other credit facility) will be sufficient to fund our future capital expenditures and long-term debt service obligations until at least February 7, 2024, which is the maturity date of the ~~term loans~~2017 Term Loan under the ~~2017~~2019 Senior Credit Facility.
Debt. As of September 30, 2022, long-term debt consisted of obligations under our 2019 Senior Credit Facility, our 2026 Notes, our 2027 Notes, our 2030 Notes and our 2031 Notes. As of September 30, 2022, the 2019 Senior Credit Facility provided total commitments of $3.6 billion, consisting of our 2017 Term Loan, our 2019 Term Loan, our 2021 Term Loan and $496 million available under our Revolving Credit Facility. We were in compliance with the covenants in these debt agreements at September 30, 2022. In the nine-months ended September 30, 2022, we paid the required principal reductions of $11 million of our 2021 Term Loan and voluntarily pre-paid $150 million of the outstanding principal balance of our 2017 Term Loan. On November 1, 2022, we made an additional voluntary pre-payment of $100 million of the outstanding principal balance of our 2017 Term Loan.

Capital ~~Expenditures~~Expenditures.
~~Capital expenditures in the~~ ~~2017 and 2016 nine-month periods were $21.4 million and $33.2 million, respectively.~~ We ~~anticipate~~expect that our capital expenditures ~~for the remainder of 2017~~ will range between approximately ~~$14.0~~$120 million to $130 million during 2022 for routine purchases of broadcasting, production company and ~~$15.0 million.~~
~~Results~~corporate purposes. In addition, we currently expect that our capital expenditures related to Assembly Atlanta will approximate $201 million for full-year 2022 and $73 million for full-year 2023. These projected capital expenditure amounts are net of ~~FCC Spectrum Auction~~
~~On August 7, 2017~~,currently anticipated proceeds from property sales and incentive payments that we ~~received $90.8~~expect to receive of approximately $43 million ~~resulting from our relinquishment of two licenses~~ in the ~~FCC’s Spectrum Auction. Due~~fourth quarter of 2022 and $59 million, at various times, during the first three quarters of 2023. We currently anticipate an additional $20 million of incentive payments after the third quarter of 2023. We can give no assurances of the actual proceeds to ~~prior planning~~be received in ~~connection with this transaction~~the future from property sales and ~~our recently completed acquisitions, we anticipate that we will be able to defer~~incentive payments, nor the timing of any ~~related income tax payments on a long-term basis.~~such proceeds.

Other
We file a consolidated federal income tax return and such state and local tax returns as ~~are~~ required. During the ~~2017~~2022 nine-month period, we made $128 million of federal or state income tax ~~payments (net of refunds) of $1.2 million.~~payments. During the remainder of ~~2017,~~2022, we anticipate making income tax payments ~~(net~~(before deducting refunds) within a range of ~~refunds)~~$58 million to $68 million. As of September 30, 2022, we have an aggregate of approximately ~~$0.6 million. Income~~$337 million of various state operating loss carryforwards, of which we expect that approximately half will be utilized.
On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, contains modifications on the limitation of business interest for tax ~~payments are likely to be higher~~years beginning in ~~2018, assuming no significant changes to the corporate tax code as currently in effect, as a result of our utilization of certain of our~~2019 and 2020, and permits net operating loss ~~carryforwards.~~(“NOL”) carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. During 2020, we carried back certain net operating losses resulting in refunds of federal and state income taxes of $22 million, that are currently outstanding.

During the ~~2017~~2022 nine-month period, we contributed ~~$0.6~~$4 million to our defined benefit pension plan. ~~During the remainder of 2017, we expect to make additional contributions to these plans of between $1.7 million and $2.4 million.~~

Off-Balance Sheet Arrangements. There have been no material changes with respect to our off-balance sheet arrangements from those presented in our 2021 Form 10-K.
28

Critical Accounting Policies

The preparation of financial statements in conformity with U.S. GAAP requires management to make judgments and estimations that affect the amounts reported in the financial statements and accompanying notes. Actual results ~~coul~~dcould differ from those estimates. We consider our accounting policies relating to intangible assets and income taxes to be critical policies that require judgments or estimations in their application where variances in those judgments or estimations could make a significant difference to future reported results. These critical accounting policies and estimates are more fully discussed in our ~~2016~~2021 Form 10-K.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q ~~(this “Quarterly~~(“Quarterly Report”) contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the ~~Securities~~Securities Act of 1933 and Section 21E of the Securities Exchange Act of ~~1934.~~1934 (the “Exchange Act”). Forward-looking statements are all statements other than those of historical fact. When used in this ~~Quarterly Report,~~annual report, the words “believes,” “expects,” “anticipates,” “estimates,” “will,” “may,” “should” and similar words and expressions are generally intended to identify forward-looking statements. ~~Among~~These forward-looking statements reflect our then-current expectations and are based upon data available to us at the time the statements are made. Forward-looking statements may relate to, among other things, statements ~~that describe~~about the evolving and uncertain nature of the COVID-19 global pandemic and its impact on us, the media industry, and the economy in general, our ~~expectations regarding our~~strategies, expected results of operations, general and industry-specific economic conditions, future pension plan contributions, future capital expenditures, ~~are forward-looking statements.~~future income tax payments, future payments of interest and principal on our long-term debt, assumptions underlying various estimates and estimates of future obligations and commitments, and should be considered in context with the various other disclosures made by us about our business. Readers ~~of this Quarterly Report~~ are cautioned that any forward-looking statements, including those regarding the intent, belief or current expectations of our management, are not guarantees of future performance, results or events and involve significant risks and uncertainties, and that actual results and events may differ materially from those contained in the forward-looking statements as a result of various factors including, but not limited to, those listed ~~under the heading “Risk Factors”~~ in Item 1A. of our ~~2016~~Annual Report on Form 10-K and ~~as may be described in subsequently filed quarterly reports on Form 10-Q, as well as~~ the other factors described from time to time in our ~~filings with the Securities and Exchange Commission. Forward-looking~~SEC filings. The forward-looking statements ~~speak~~included in this Quarterly Report are made only as of the date ~~they are made.~~hereof. We undertake no obligation to update such forward-looking statements to reflect subsequent events or circumstances.

Item 3.Quantitative and Qualitative Disclosure About Market Risk

We believe that the market risk of our financial instruments as of September 30, ~~2017~~2022 has not materially changed since December 31, ~~2016. The~~2021. Our market risk profile ~~as of~~on December 31, ~~2016~~2021 is disclosed in our ~~2016~~2021 Form 10-K.

Item 4.Controls and Procedures

As of the end of the period covered by this Quarterly Report, an evaluation was carried out under the supervision and with the participation of management, including the Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”), of the effectiveness of our ~~disclosure~~disclosure controls and procedures. Based on ~~that~~this evaluation, ~~the CEO~~ and ~~the CFO have~~having concluded that the material weakness in our internal control over financial reporting initially reported in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and in our subsequent Quarterly Reports on Form 10-Q for the quarters ended March 31, 2022 and June 30, 2022, respectively, has been remediated (as described below), management has concluded that our internal control over financial reporting was effective as of September 30, 2022.
Consistent with Managements’ Report on Internal Control over Financial Reporting disclosed in Part II, Item 9A. of our Annual Report on Form 10-K for the ~~end~~year ended December 31, 2021, we had identified a material weakness as a result of deficiencies identified in our controls over user access that did not adequately restrict or provision/deprovision user access related to certain financial reporting programs and did not ensure appropriate segregation of duties as it relates to review. Importantly, partly as a result of other internal controls over financial reporting, we did not identify any incidents of improper system access related to the ~~period covered by~~material weakness, nor did the identified weakness result in any identified misstatements to our financial statements. There were no changes made, and no future changes intended to be made, to previously released financial results as a result of this material weakness.
As further described in our Quarterly Report ~~our~~on Form 10-Q for the quarter ended June 30, 2022, we have implemented a series of remedial actions to address these control deficiencies. We have since successfully completed the testing of these remediated controls and management’s conclusions with respect to disclosure controls and procedures and internal control at September 30, 2022 are ~~effective~~provided above.
There were no changes in the Company’s internal control over financial reporting during the quarter ended September 30, 2022, that have materially affected, or are reasonably likely to ~~ensure that information required to be disclosed by us in reports that we file or furnish under~~materially affect, the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and to ensure that such information is accumulated and communicated to our management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosures. Company’s internal control over financial reporting.
No system of controls, no matter how well designed and implemented, can provide absolute assurance that the objectives of the system of controls are met and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

~~There were no changes in our internal control~~s over financial reporting during the three-month period ended September 30, 2017 identified in connection with this evaluation that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II.OTHER INFORMATION

Item 1A.Risk Factors

~~Please refer~~In addition to the other information set ~~out under~~forth in this Quarterly Report on Form 10-Q, you should carefully consider the ~~heading “Risk Factors”~~risk factors that affect our business and financial results that are discussed in Part I, Item 1A, inof our ~~2016~~Annual Report on Form 10-K for ~~a description of risk~~the fiscal year ended December 31, 2021. These factors that we determined to be most material to our financial condition and results of operations. We do not believe there have been any material changes in these risk factors. Additional risks not currently known to us or that we do not currently consider material may alsocould materially adversely affect our business, financial condition, ~~and~~liquidity, results of operations and capital position, and could cause our actual results to differ materially from our historical results or the results contemplated by the forward-looking statements contained in ~~the future.~~
~~Item 2.~~ ~~Unregistered Sales of Equity Securities and Use of Proceeds~~
~~In each of March and November 2004, the Board of Directors of the Company authorized the Company~~this report. There have been no material changes to ~~repurchase up to 2.0 million shares of the Company's common stock or~~ Class A common stock. In March 2006, this authorization was increased to an aggregate of 5.0 million shares (the “2004-2006 Repurchase Authorization”). As of September 30, 2017, 279,200 shares remain available for repurchase under this authorization, which has no expiration date.
~~On November 6, 2016, the Board of Directors of the Company authorized the Company to purchase up to an additional $75.0 million of our outstanding common stock prior to December 31, 2019 (the “2016 Repurchase Authorization”).~~
The extent to which the Company repurchases any of its shares, the number of shares and the timing of any repurchases will depend on general market conditions, regulatory requirements, alternative investment opportunities and other considerations. The Com~~pany is not required to repurchase a minimum number of shares, and the repurchase authorizations may be modified, suspended or terminated at any time without prior notice.~~
~~The Company did not repurchase any shares of common stock or Class A common stock under these authorizations during the three-months ended September 30, 2017.~~such risk factors.

29

Item 6.Exhibits
The following exhibits are filed as part of this Quarterly Report:

Exhibit ~~10.~~1
Number
Executive and Key Employee Change in Control Severance Plan*Description of Document
~~Exhibit 10.~~231.1
Form of Employee Restricted Stock Award Agreement pursuant to the Gray Television, Inc. 2017 Equity and Incentive Compensation Plan*
~~Exhibit 10.~~3
Form of Employee Restricted Stock Units Award Agreement pursuant to the Gray Television, Inc. 2017 Equity and Incentive Compensation Plan*
~~Exhibit~~ ~~31.1~~
Rule 13(a) – 14(a) Certificate of Chief Executive Officer
~~Exhibit~~ 31.2
Rule 13(a) – 14(a) Certificate of Chief Financial Officer
~~Exhibit~~ 32.1
Section 1350 Certificate of Chief Executive Officer
~~Exhibit~~ 32.2
Section 1350 Certificate of Chief Financial Officer
~~101.INS~~
~~XBRL Instance Document~~
101.SCH
Inline XBRL Taxonomy Extension Schema Document
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104
The cover page from Gray Television, Inc.’s Quarterly Report on Form 10-Q for the fiscal period ended September 30, 2022 has been formatted in Inline XBRL and contained in Exhibit 101.
* Management contract or compensatory plan ~~or arrangement~~

30

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

GRAY TELEVISION, INC.
(Registrant)
~~(Registrant)~~

Date: November ~~6, 2017~~ 4, 2022
By:
/s/ James C. Ryan
James C. Ryan
Executive Vice President and Chief Financial Officer

31

GRAY TELEVISION, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(in millions, except for share data)

																								Accumulated
	Class A											Class A						Common						Other
	Common Stock				Common Stock				Accumulated			Treasury Stock						Treasury Stock						Comprehensive
	Shares		Amount		Shares		Amount		Deficit			Shares			Amount			Shares			Amount			Loss			Total

Balance at December 31, 2016		8,073,993	$	21,764		71,229,497	$	658,135	$	(101,365	)		(1,669,131	)	$	(23,340	)		(5,135,406	)	$	(44,688	)	$	(17,645	)	$	492,861

Adoption of ASU 2016-09 excess tax benefit for stock-based compensation		-		-		-		-		1,107			-			-			-			-			-			1,107

Net income		-		-		-		-		96,382			-			-			-			-			-			96,382

Issuance of stock:
401(k) plan		-		-		1,224		16		-			-			-			-			-			-			16
2007 Long Term Incentive Plan - restricted stock		198,220				307,943		-		-			(81,561	)		(892	)		(77,632	)		(874	)		-			(1,766	)
2017 Equity and Incentive Compensation Plan - restricted stock		76,856		-		-		-		-			-			-			-			-			-			-

Repurchase of common stock		-		-		-		-		-			-			-			(322,038	)		(4,000	)					(4,000	)

Share-based compensation		-		2,077		-		2,226		-			-			-			-			-			-			4,303

Balance at September 30, 2017		8,349,069	$	23,841		71,538,664	$	660,377	$	(3,876	)		(1,750,692	)	$	(24,232	)		(5,535,076	)	$	(49,562	)	$	(17,645	)	$	588,903

	Minimum Principal Maturities
Year	2017 Senior Credit Facility		2024 Notes		2026 Notes		Total
2017	$	1,604	$	-	$	-	$	1,604
2018		6,417		-		-		6,417
2019		6,417		-		-		6,417
2020		6,417		-		-		6,417
2021		6,417		-		-		6,417
Thereafter		609,566		525,000		700,000		1,834,566
Total	$	636,838	$	525,000	$	700,000	$	1,861,838

				Production
As of and for the nine months ended September 30, 2022:	Broadcasting			Companies			Other			Consolidated

Revenue (less agency commissions)	$	2,548		$	56		$	-		$	2,604
Operating expenses before depreciation, amortization and loss on disposal of assets, net:		1,595			56			80			1,731
Depreciation and amortization		240			10			2			252
Loss on disposal of assets, net		(6	)		-			-			(6	)
Operating expenses		1,829			66			82			1,977
Operating income (loss)	$	719		$	(10	)	$	(82	)	$	627

Interest expense	$	-		$	-		$	254		$	254
Capital expenditures (excluding business combinations)	$	114		$	181		$	3		$	298
Goodwill	$	2,612		$	45		$	-		$	2,657
Total assets	$	10,565		$	358		$	260		$	11,183

For the nine months ended September 30, 2021:

Revenue (less agency commissions)	$	1,648		$	44		$	-		$	1,692
Operating expenses before depreciation, amortization and (gain) loss on disposal of assets, net:		1,099			39			75			1,213
Depreciation and amortization		146			9			2			157
(Gain) loss on disposal of assets, net		46			-			-			46
Operating expenses		1,291			48			77			1,416
Operating income (loss)	$	357		$	(4	)	$	(77	)	$	276

Interest expense	$	-		$	-		$	143		$	143
Capital expenditures (excluding business combinations)	$	63		$	88		$	3		$	154

As of December 31, 2021:

Goodwill	$	2,604		$	45		$	-		$	2,649
Total assets	$	10,592		$	269		$	247		$	11,108

	Three Months Ended September 30,								Nine Months Ended September 30,
	2017				2016				2017				2016
			Percent				Percent				Percent				Percent
	Amount		of Total		Amount		of Total		Amount		of Total		Amount		of Total
Revenue:
Local (including internet/digital/mobile)	$	110,033		50.2%	$	102,172		50.0%	$	330,547		50.9%	$	296,253		51.5%
National		31,027		14.2%		25,426		12.4%		86,822		13.4%		73,575		12.8%
Political		4,005		1.8%		22,272		10.9%		9,034		1.4%		41,576		7.2%
Retransmission consent		70,150		32.0%		51,096		25.0%		207,094		31.9%		148,914		25.9%
Other		3,762		1.8%		3,524		1.7%		15,622		2.4%		14,528		2.6%
Total	$	218,977		100.0%	$	204,490		100.0%	$	649,119		100.0%	$	574,846		100.0%

	As of
	September 30, 2017		December 31, 2016
Cash	$	172,854	$	325,189
Long-term debt	$	1,831,610	$	1,756,747
Borrowing availability under the Revolving Credit Facility	$	100,000	$	60,000

	As of
	September 30, 2022		December 31, 2021
Cash	$	144	$	189
Long-term debt, including current portion, less deferred financing costs	$	6,605	$	6,755
Series A Perpetual Preferred Stock	$	650	$	650
Borrowing availability under Revolving Credit Facility	$	496	$	497


~~Exhibit 10.~~231.1	Form of Employee Restricted Stock Award Agreement pursuant to the Gray Television, Inc. 2017 Equity and Incentive Compensation Plan*

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		The cover page from Gray Television, Inc.’s Quarterly Report on Form 10-Q for the fiscal period ended September 30, 2022 has been formatted in Inline XBRL and contained in Exhibit 101.

		GRAY TELEVISION, INC. (Registrant)
		~~(Registrant)~~




Date: November ~~6, 2017~~ 4, 2022	By:	/s/ James C. Ryan
		James C. Ryan
		Executive Vice President and Chief Financial Officer