GRAY TELEVISION INC

GRAY TELEVISION, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(in millions, except for share data)

GRAY TELEVISION, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(in millions, except for per share data)

GRAY TELEVISION, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

(in millions)

GRAY TELEVISION, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited)

(in millions, except for number of shares)

GRAY TELEVISION, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The accompanying condensed consolidated balance sheet of Gray Television, Inc. (and its consolidated subsidiaries, except as the context otherwise provides, “Gray Media,” “Gray,” the “Company,” “we,” “us,” and “our”) as of* December 31, 2023,which was derived from the Company’s audited financial statements as of December 31, 2023,and our accompanying unaudited condensed consolidated financial statements as of June 30, 2024and for thethree* andsix month periods ended* June 30, 2024and2023,* 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 Form10-Q and Article10 of Regulation S-X. Accordingly, certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to those rules and regulations, although we believe that the disclosures made are adequate to make the informationnot misleading. In our opinion, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. We manage our business on the basis oftwo 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 The Nielsen Company, LLC (“Nielsen”) and/or Comscore, Inc. (“Comscore”). While we believe this data to be accurate and reliable, we havenot 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 Form10-K for the year ended* December 31, 2023 (the“2023* Form10-K”). Our financial condition as of, and operating results for thethree andsix-months ended* June 30, 2024,arenot* necessarily indicative of the financial condition or results that* maybe expected for any future interim period or for the year ending December 31, 2024.*

Overview. We are a multimedia company headquartered in Atlanta, Georgia. We are the nation’s largest owner of top-rated local television stations and digital assets serving 113 television markets that collectively reach approximately 36 percent of US television households. The portfolio includes 77 markets with the top-rated television station and 100 markets with thefirst and/orsecond highest rated television station, as well as the largest Telemundo Affiliate group with 43 markets totaling nearly 1.5 million Hispanic TV Households. We also own Gray Digital Media, a full-service digital agency offering national and local clients digital marketing strategies with the most advanced digital products and services. Our additional media properties include video production companies Raycom Sports, Tupelo Media Group, and PowerNation Studios, and studio production facilities Assembly Atlanta and Third Rail Studios. Gray also owns a majority interest in Swirl Films.

Investments in Broadcasting, Production and 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, net in our consolidated statements of operations. Investments are also increased by contributions made to, and decreased by the distributions from, the investee. We evaluate equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments* may*be impaired.

Investments in non-public businesses that donot have readily determinable pricing, and for which we donot have control or donot exert significant influence, are 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 carrying value of these investments are included as miscellaneous expense, net in our consolidated statements of operations. These investments are reported together as a non-current asset on our condensed consolidated balance sheets.

BMI Investment Proceeds. On* February 8, 2024,we received $110 million from the sale of our investment in Broadcast Music, Inc. (“BMI”). These proceeds are included in miscellaneous income (expense), net, in our condensed consolidated statement of operations for thesix*-month period ended* June 30, 2024.*

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

Earnings Per Share.We compute basic earnings per share by dividing net income available to common stockholders by the weighted-average number of common shares outstanding during the relevant period. The weighted-average number of common shares outstanding doesnot 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, arenot 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, in the diluted weighted-average shares outstanding calculation, unless their inclusion would be antidilutive.

The following table reconciles basic weighted-average shares outstanding to diluted weighted-average shares outstanding for thethree andsix-month periods ended* June 30, 2024and2023,* respectively (in millions):

Accumulated Other Comprehensive Loss.Our accumulated other comprehensive loss balances as of June 30, 2024and* December 31, 2023,consist of adjustments to our pension liability and changes in the fair value of our interest rate caps, each net of tax. Our comprehensive income for thesix*-months ended* June 30, 2024and2023* consisted of our net income and recognition of the fair value adjustment related to our interest rate caps, and the related income tax benefit. As of* June 30, 2024and December 31, 2023*the balances were as follows (in millions):

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

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

We incurred costs to build public infrastructure within the Assembly Atlanta project. Pursuant to our Purchase and Sale Agreement with the Doraville Community Improvement District (the “CID”), we receive cash reimbursements for the transfer of specific infrastructure projects to the CID and for other construction costs previously incurred. During thethree andsix-month periods ended* June 30, 2024and2023,* we received cash proceeds from the CID. The following table lists the type of proceeds received (dollars in millions):

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

Accounts Receivable and Allowance for 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 credit losses is an estimate of expected losses over the remaining contractual life of our 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*also apply additional allowance when warranted by specific facts and circumstances. We generally write off account receivable balances when the customer files for bankruptcy or when all commonly used methods of collection have been exhausted.

On* February 23, 2023,we, certain of our subsidiaries and a wholly-owned special purpose subsidiary (the “SPV”), entered into athree*-year $300 million revolving accounts receivable securitization facility (the “Securitization Facility”) with Wells Fargo Bank, N.A., as administrative agent, and certainthird-party financial institutions (the “Purchasers”). The Securitization Facility permits the SPV to draw up to a total of*$300* million, subject to the outstanding amount of the receivables pool and other factors. The Securitization Facility matures on* February 23, 2026,and is subject to customary termination events related to transactions of this type. The sale of receivables from the SPV is accounted for in the Company’s financial statements as a "true-sale" under Accounting Standards Codification ("ASC") Topic860.*

Under the Securitization Facility, the SPV sells to the Purchasers certain receivables, including all rights, title, and interest in the related receivables (“Sold Receivables”). The parties intend that the conveyance of accounts receivables to the Purchasers, for the ratable benefit of the Purchasers will constitute a purchase and sale of receivables andnot a pledge for security. The SPV has guaranteed to each Purchaser the prompt payment of Sold Receivables, and to secure the prompt payment and performance of such guaranteed obligations, the SPV has granted a security interest to the Purchasers in all assets of the SPV. In our capacity as servicer under the Securitization Facility, we are responsible for administering and collecting receivables and have made customary representations, warranties, covenants and indemnities. We donot record a servicing asset or liability since the estimated fair value of the servicing of the receivables approximates the servicing income. We also provided a performance guarantee for the benefit of the Purchasers.

The Securitization Facility is subject to interest charges, at the adjustedone-month Secured Overnight Financing Rate (“SOFR”) plus a margin (100 basis points) on the amount of the outstanding facility. The SPV was required to pay an upfront fee and a commitment fee in connection with the Securitization Facility. Servicing fee income recognized during thesix-months ended* June 30, 2024and2023,* was $3 million and $2 million, respectively. The SPV is a separate legal entity with its own separate creditors who will be entitled to access the SPV’s assets before the assets become available to us. As a result, the SPV’s assets arenot available to pay our creditors or any of our subsidiaries, although collections from the receivables in excess of amounts required to repay the Purchasers under the Securitization Facility and other creditors of the SPV* may*be remitted to us.

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The proceeds of the Securitization Facility are classified as operating activities in our condensed consolidated statements of cash flows. Cash received from collections of Sold Receivables is used by the SPV to fund additional purchases of receivables on a revolving basis or to return all or any portion of outstanding capital of the Purchasers. Subsequent collections on the pledged receivables, which havenot been sold, will be classified as operating cash flows at the time of collection.

The amount sold to the Purchasers was $300 million at each of* June 30, 2024and December 31, 2023,which was derecognized from the condensed consolidated balance sheets. As collateral against sold receivables, the SPV maintains a certain level of unsold receivables, which was $297 million and $296 million at June 30, 2024and December 31, 2023,respectively. Total receivables sold under the Securitization Facility were $597 million and $577 million in thesix*-months ended* June 30, 2024and2023,* respectively. Pursuant to the Securitization Facility, we recognized a charge of $9 million in thesix-months ended* June 30, 2023,and the charge recognized in thesix*-months ended* June 30, 2024wasnot* material. These charges represented the discount on the accounts receivable balance transferred to the SPV. This discount is included in our loss on disposal of assets in our condensed consolidated statements of operations.

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):

Recent Accounting Pronouncements.In November 2023,the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)2023-07, Segment Reporting (Topic280), Improvements to Reportable Segment Disclosures.The purpose of this amendment was to improve disclosures related to reportable segments. The amendments in this ASU are effective for fiscal years beginning after December 15, 2023,and interim periods within fiscal years beginning after December 15, 2024.Currently we donot expect that the implementation of these changes will have a material effect on our financial statements.

In* December 2023,the FASB issued ASU2023*-09, Income Taxes (Topic740*), Improvements to Income Tax Disclosures.The purpose of this amendment was to enhance the transparency and decision usefulness of income tax disclosures. The amendments in this ASU are effective for annual periods beginning after December 15, 2024.Currently we donot* expect that the implementation of these changes will have a material effect on our financial statements.

In* June 2024,the FASB voted to require publicly traded businesses to provide additional disclosures about their operations in the notes to their financial statements. The purpose of this amendment was to provide more information about the cost of goods sold and selling, general and administrative expenses for companies. We expect that this action will be formally published in an ASU later in2024.* This ASU is expected to be effective for annual periods beginning after* December 15, 2026,and quarterly periods thereafter. Currently we donot* expect that the implementation of these changes will have a material effect on our financial statements.

In addition to the accounting standards described above, certain amounts in the condensed consolidated balance sheets and condensed consolidated statements of cash flows have also been reclassified to conform to the current presentation.

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*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.

Deferred Revenue. We record a deferred revenue 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 deferred revenue on our balance sheet as advertising deposit liabilities. 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 sheet. 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 an advertising 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 thesix-months ended* June 30, 2024that was included in the advertising deposit liability balance as of December 31, 2023.*We also record other deposit liabilities for cash received in advance for other arrangements, for which revenue is as earned in future periods.

The following table presents our deferred revenue by type (in millions):

*Disaggregation of Revenue.*Revenue from our production companies segment, is generated through our direct sales channel. Revenue from our broadcast 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):

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As of* June 30, 2024and December 31, 2023,long-term debt consisted of obligations under our Senior Credit Facility (as defined below), our 5.875% senior notes due2026* (the*“2026* Notes”), our 7.0% senior notes due2027 (the*“2027* Notes”), our 10.5% senior notes due2029 (the*“2029* Notes”), our 4.75% senior notes due2030 (the*“2030* Notes”) and our 5.375% notes due2031 (the*“2031* Notes”), as follows (in millions):

2024 Refinancing Activities.On June 3, 2024,we issued $1.25 billion in aggregate principal amount of 10.5% Senior Secured First Lien Notes due2029 (the*“2029* Notes”) pursuant to an indenture, dated as of* June 3, 2024,between us, the guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee and collateral agent (the“2029* Notes Indenture”). The2029 Notes were issued at par. Interest in the2029 Notes accrues from* June 3, 2024,and is payable semiannually, on January 15and July 15of each year, beginning on January 15, 2025.*

The net proceeds from the2029 Notes were used, together with the net proceeds from a $500 million tranche F term loan (the*“2024* Term Loan”) and a $150 million draw under our Revolving Credit Facility (as defined below), both under the Senior Credit Facility (as defined below), and cash on hand, to pre-pay our $1.2 billion tranche E2019 Term Loan under the Senior Credit Facility; repurchase in a tender offer $690 million of face value of our outstanding 5.875%2026 Notes; and pay all costs and accrued interest in connection with the offering.

The2029 Notes and related guarantees are our senior securedfirst lien obligations. The2029 Notes rank:

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On* June 4, 2024,we entered into athird* amendment to the Fifth Amended and Restated Credit Agreement (the “Third Amendment” and as amended, including by the Third Amendment, the “Senior Credit Facility”), dated as of* December 1, 2021.*

The Third Amendment, among other things, provided for (i) the new $500 million2024 Term Loan and (ii) increased aggregate commitments under our existing $552.5 million revolving credit facility (the “Revolving Credit Facility”) that matures* December 31, 2027by $127.5 million, and a concurrent termination of the separate commitments under a $72.5 million tranche of revolving commitments that were to mature on December 1, 2026,*resulting in aggregate commitments under the Revolving Credit Facility of $680 million.

The2024 Term Loan bears interest, at our option, at either the Secured Overnight Financing Rate (“SOFR”) plus an applicable margin or the Base Rate plus an applicable margin. “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) Adjusted Term SOFR (as defined in the Senior Credit Facility) for aone-month tenor in effect on such day plus 1.0%. The applicable margin with respect to the2024 Term Loan is 5.25% for all SOFR borrowings and 4.25% for all Base Rate borrowings. The2024 Term Loan also requires us to make quarterly principal reductions of $1.25 million beginning* September 30, 2024.To the extent all or any portion of the2024* Term Loan is repaid or prepaid prior to theone year anniversary of the effective date of the Third Amendment, a prepayment fee equal to 1.0% of the amount of the2024 Term Loan being repaid or prepaid will apply.

The Revolving Credit Facility bears interest, at our option, based on SOFR plus 1.75%-2.75% or the Base Rate plus 0.75%-1.75%, in each case based on afirst lien leverage ratio (the “First Lien Leverage Ratio”) as set forth in the Senior Credit Facility. The Company is required to pay a commitment fee on the average daily unused portion of the Revolving Credit Facility, which rate* may*range from 0.375% to 0.5%, based on the First Lien Leverage Ratio.

The costs associated with these2024 refinancing activities totaled $47 million, of which $43 million were capitalized as deferred loan costs, to be amortized over the lives of the respective debt obligations. Our loss from the early extinguishment of debt for these2024 refinancing activities was $12 million, which was composed of expensing of the remaining $4 million of costs and the write-off of $8 million of unamortized deferred loan costs and premiums related to the debts that were pre-paid.

Repurchase of Debt. On* May 6, 2024,our Board of Directors authorized us to use up to $250 million of available liquidity to repurchase our outstanding indebtedness through December 31, 2025.The extent of such repurchases, including the amount and timing of any repurchases, will depend on general market conditions, regulatory requirements, alternative investment opportunities and other considerations. This repurchase program doesnot* require us to repurchase a minimum amount of debt, and it* maybe modified, suspended or terminated at any time without prior notice. During thesecond* quarter of2024, we used $45 million of cash to repurchase and retire $50 million of the face value of our outstanding2027 Notes, resulting in a $5 million gain from early extinguishment of debt.

On* June 24, 2024,we entered into a debt repurchase agreement under rule10b5*-1 to repurchase up to $50 million of our2027 Notes between* July 8, 2024and August 16, 2024at a maximum purchase price of $931 per$1,000* of face value. So far in thethird quarter of2024, as a result of such plan, we have repurchased $29 million of the face value of our outstanding2027 Notes, at an average price of $921 per*$1,000* of face value, under this plan.

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Interest Rate Caps. On* February 23, 2023,we entered intotwo* interest rate caps pursuant to an International Swaps and Derivatives Association Master Agreement (the “ISDA Master Agreement”) withtwo counterparties, Wells Fargo Bank, NA and Truist Bank, respectively. On* June 25, 2024,we amended the notional amount of the interest rate caps in order to better match the outstanding amounts of the related outstanding indebtedness. At June 30, 2024,the caps had a combined notional value of approximately $2 billion and mature on December 31, 2025.The interest rate caps protect us against adverse fluctuations in interest rates by reducing our exposure to variability in cash flows on a portion of our variable-rate debt. The interest rate caps are designated as cash flow hedges of our risk of changes in our cash flows attributable to changes in1*-month SOFR on our outstanding variable-rate debt in accordance with ASC815. We elected to apply the optional expedient in ASC848, Reference Rate Reform, that enabled us to consider the amended swaps a continuation of the existing contracts. As a result, the transition didnot have an impact on our hedge accounting or a material impact to our financial statements.

The interest rate caps, as amended, effectively limit the annual interest charged on our2021 Term Loan and our2024 Term Loan to a maximum of1-month Term SOFR of4.96% and5.047%. We are required to pay aggregate fees in connection with the interest rate caps of approximately $34 million that is due and payable at maturity on* December 31, 2025.On the initial designation date, we recognized an asset and corresponding liability for the deferred premium payable equal to$34* million. The asset is amortized into interest expense straight-line over the term of the hedging relationship. At* June 30, 2024and December 31, 2023,the recorded value of the asset was $18 million and $24 million, net of accumulated amortization, respectively. At June 30, 2024and December 31, 2023,*the fair value of the derivative liability was $26 million and $23 million, respectively. We present the deferred premium, the asset, and the fair value of the derivative, net within other non-current liabilities in our condensed consolidated balance sheets.

The ISDA Master Agreement, together with its related schedules, contain customary representations, warranties and covenants. The interest rate caps werenot entered into for speculative trading purposes. Changes in the fair value of the interest rate caps are reported as a component of other comprehensive income. Actual gains and losses are reclassified into earnings in the same period or periods during which the hedged transaction affects earnings and are presented in the same income statement line item as the earnings effect of the hedged transaction. Gains and losses on the derivative instrument representing hedge components excluded from the assessment of effectiveness are recognized currently in earnings and are presented in the same line of the income statement for the hedged item. We recognized $6 million and $4 million, respectively, of amortization expense for the asset during thesix-months ended* June 30, 2024and2023,* which is included as a component of cash flows from operating activities in our condensed consolidated statements of cash flows. Cash flows received from the counterparties pursuant to the interest rate caps are included as components of cash flows from financing activities in our condensed consolidated statements of cash flows. During thesix-months ended* June 30, 2024and2023,* we received $4 million and $0.3 million, respectively, of cash payments from the counterparties that we reclassified as reductions of interest expense from the interest rate caps in our condensed consolidated statements of operations.

For all of our interest bearing obligations, we made interest payments of approximately $210 million and $208 million during thesix-months ended* June 30, 2024and2023,* respectively. During thesix-months ended* June 30, 2024and2023,* we capitalized $1 million and $13 million of interest payments, respectively, related to the Assembly Atlanta project.

As of* June 30, 2024,the aggregate minimum principal maturities of our long-term debt for the remainder of2024* and the succeeding5 years were as follows (in millions):

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As of* June 30, 2024,there wereno* significant restrictions on the ability of Gray Television, Inc.'s subsidiaries to distribute cash to Gray or to the guarantor subsidiaries. The Senior Credit Facility contains affirmative and restrictive covenants with which we must comply. The2026 Notes, the2027 Notes, the2029 Notes, the2030 Notes and the2031 Notes also include covenants with which we must comply.

We measure certain assets and liabilities at fair value, which are classified by the FASB Codification within the fair value hierarchy as level1, 2, or3, on the basis of whether the measurement employs observable or unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s own assumptions and consider information about readily available market participant assumptions.

Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. The use of different market assumptions or methodologies could have a material effect on the fair value measurement.

The carrying amounts of accounts receivable, prepaid and other current assets, accounts payable, employee compensation and benefits, accrued interest, other accrued expenses, and deferred revenue approximate fair value at both* June 30, 2024and December 31, 2023.*

At* June 30, 2024and December 31, 2023,the carrying amount of our long-term debt was $6.1 billion and$6.2 billion, respectively, and the fair value was $5.1 billion and$5.6 billion, respectively. The fair value of our long-term debt is based on observable estimates provided bythird*-party financial professionals as of each date, and as such is classified within Level2 of the fair value hierarchy.

We are authorized to issue 245 million shares in total of all classes of stock consisting of 25 million shares of Class A common stock,200 million shares of common stock, and 20 million shares 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 A common stock are identical, except that our Class A common stock has 10 votes per share and our common stock hasone 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. The Board of Directors declared a quarterly cash dividend of $0.08 per share on our common stock and Class A common stock to shareholders of record on* March 15, 2024,** June 14, 2024,** March 15, 2023and June 15, 2023,payable on March 28, 2024,** June 28, 2024,** March 31, 2023and June 30, 2023,respectively. The total dividends declared and paid during thesix*-months ended* June 30, 2024and2023* was $16 million and $14 million, respectively.

Under our various employee benefit plans, 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 June 30, 2024,*we had reserved 13.4 million shares and 1.2 million shares of our common stock and Class A common stock, respectively, for future issuance under various employee benefit plans.

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The components of our net periodic pension benefit are included in miscellaneous expense, net in our condensed consolidated statements of operations. During thesix-months ended* June 30, 2024,the amount recorded as a benefit was $2 million and we didnot* make a contribution to our defined benefit pension plans. During the remainder of2024, we expect to contribute $4 million to these plans.

During thesix-month period ended* June 30, 2024,we contributed $15 million in matching cash contributions, and shares of our common stock valued at $9 million for our2023* discretionary profit-sharing contributions, to the401(k) plan. The discretionary profit-sharing contribution was recorded as an expense in2023 and accrued as of* December 31, 2023.Based upon employee participation as of June 30, 2024,during the remainder of2024,* we expect to contribute $13 million of matching cash contributions to this plan.

We recognize compensation expense for stock-based payment awards made to our employees, consultants and directors. The following table provides our stock-based compensation expense and related income tax benefit for thethree andsix-month periods ended* June 30, 2024and2023* (in millions):

All shares of common stock and Class A common stock underlying outstanding restricted stock units and performance awards are counted as issued at target levels under the2022 EICP for purposes of determining the number of shares available for future issuance.

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A summary of restricted common stock and Class A common stock activity for thesix-month periods ended* June 30, 2024and2023,* respectively, is as follows:

We determine if an arrangement is a lease at its inception. Operating lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. We generally use our incremental borrowing rate based on the information available at the lease commencement date in determining the present value of future payments, because the implicit rate of the lease is generallynot known. Right-of-use (“ROU”) assets related to our operating lease liabilities are measured at lease inception 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 inception* 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 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* June 30, 2024,our operating leases substantially have remaining terms ofone year to 99 years, some of which include options to extend and/or terminate the leases. We donot* recognize lease assets and lease liabilities for any lease with an original lease term of less thanone 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 thesix-months ended* June 30, 2024and2023.*

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As of* June 30, 2024,the weighted-average remaining term of our operating leases was approximately 9 years. The weighted-average discount rate used to calculate the values associated with our operating leases was 6.6%. The table below describes the nature of our lease expense and classification of operating lease expense recognized in thethree* andsix-months ended* June 30, 2024and2023,* respectively (in millions):

The maturities of operating lease liabilities as of* June 30, 2024,for the remainder of2024* and the succeedingfive years were as follows (in millions):

As a Lessor. We lease or sublease our owned or leased production facilities, land, towers and office space through operating leases withthird parties. Payments received associated with these leases consist of fixed and variable payments. Fixed payments are received for the rental of space including fixed rate rent escalations over the applicable term of the lease agreements. Variable payments are received for short-term rental of space, variable rent escalations and reimbursement of operating costs related to the asset leased or subleased.

We recognize revenue from fixed payments on a straight-line basis over the applicable term of the lease agreements, whose lives range betweenone and 15 years.** *The excess of straight-line revenue recognized over the fixed payments received is recorded as deferred rent receivable in other assets on our condensed consolidated balance sheets. The deferred rent receivable balance was $7 million and $6 million as of June 30, 2024and December 31, 2023,*respectively. We recognize revenue from variable payments each period as earned.

Cash flow activities related to our lease activities for assets we lease tothird parties are included in other assets and accounts receivable as presented in net cash provided by operating activities in our condensed consolidated statement of cash flows.

The following table describes the nature of our lease revenue and classification of operating lease revenue recognized in thethree andsix-months ended* June 30, 2024and2023* (in millions):

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The following table presents our future minimum rental receipts for non-cancelable leases and subleases as of* June 30, 2024 (*in millions):

We are and expect to continue to be subject to legal actions, proceedings and claims that arise in the normal course of our business. In the opinion of management, the amount of ultimate liability, if any, with respect to these actions, proceedings and claims willnot materially affect our financial position, results of operations or cash flows, although legal proceedings are subject to inherent uncertainties, and unfavorable rulings or events could have a material adverse impact on our financial position, results of operations or cash flows.

A summary of changes in our goodwill and other intangible assets, on a net basis, for thesix-months ended* June 30, 2024*is as follows (in millions):

Amortization expense for thesix-months ended* June 30, 2024and2023* was $63 million and $99 million, respectively. Based on the current amount of intangible assets subject to amortization, we expect that amortization expense for the remainder of2024 will be approximately $62 million, and, for the succeedingfive years, amortization expense will be approximately as follows:2025, $113 million;2026, $83 million;2027, $47 million;2028, $13 million; and2029, $3 million. If and when acquisitions and dispositions occur in the future, actual amounts* may*vary materially from these estimates.

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For thethree andsix-month periods ended* June 30, 2024and2023,* our income tax expense and effective income tax rates were as follows (dollars in millions):

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 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 21% to our effective income tax rate. For the2024 six-month period, these estimates increased or decreased our statutory federal income tax rate of 21% to our effective income tax rate as a result of state income taxes that resulted in an increase of 5%, permanent differences resulted in an increase of 1% and changes to our reserves resulted in a decrease of 2%. For thesix-months ended* June 30, 2023,*these estimates increased or decreased our statutory federal income tax rate of 21% to our effective income tax rate as a result of state income taxes that resulted in an increase of 4% and permanent differences resulted in a decrease of 1% and discrete items that resulted in a decrease of 6%.

During thesix-months ended* June 30, 2024,we made $85 million of federal and state income tax payments, net of refunds. During the remainder of2024,* we anticipate making income tax payments (net of expected refunds) of approximately $92 million to $102 million. As of* June 30, 2024,we have an aggregate of approximately $282 million of various state operating loss carryforwards, of which we expect that approximately $201 million willnot* be utilized due to section382 limitations and those that will expire prior to utilization. After applying our state effective tax rate, this amount is included in our valuation allowance for deferred tax assets.

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 in2019* and2020, and permits net operating loss (“NOL”) carryovers and carrybacks to offset100% of taxable income for taxable years beginning before2021. In addition, the CARES Act allows NOLs incurred in2018, 2019, and2020 to be carried back to each of thefive preceding taxable years to generate a refund of previously paid income taxes. During2020, we carried back certain net operating losses resulting in a refund of $23 million, including interest, that was collected in thesecond quarter of2024.

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We operate intwo business segments: broadcasting and production companies. The broadcasting segment operates television stations in local markets in the U.S. The production companies segment includes production facilities and the production of television and event 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):

On* July 1, 2024,we and Marquee Broadcasting, Inc. (“Marquee”) completed transactions in which we sold our television stations KCWY (NBC) in the Casper, Wyoming market (DMA198*) and KGWN (CBS) in the Cheyenne, Wyoming market (DMA194) in exchange for Marquee’s FCC permit authorizing the construction of a new television station, that will be built in the Salt Lake City, Utah market (DMA27), and will be known as KCBU.No cash or other consideration was exchanged to fulfill the terms of this exchange.

The value of the construction permit acquired from Marquee will be based upon management’s estimate of the fair value using valuation techniques including income, cost and market approaches. In determining the fair value of the acquired assets, the fair values will be determined based on, among other factors, expected future revenue and cash flows, expected future growth rates and estimated discount rates.

The sale of television station KCWY and KGWN will result in a non-cash loss on disposal that is expected to be $14 million.

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