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

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

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.

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).

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

1.	1. Basis of Presentation

The accompanying condensed consolidated balance sheet of Gray Television, Inc. (and its consolidated subsidiaries, except as the context otherwise provides,“Gray,” the “Company,” “we,” “us,” and “our”) as of December 31, ~~2016,~~ 2017, which was derived from the Company’s audited financial statements as of December 31, ~~2016,~~ 2017, and our accompanying unaudited condensed consolidated financial statements as of ~~June 30, 2017~~ March 31, 2018 and for the periods ended ~~June 30, 2017~~ March 31, 2018 and ~~2016,~~2017, 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 presentation have been included. Our operations consist of one reportable segment. 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~~2017 (the “2017 Form ~~10-K”~~10-K”). Our financial condition as of, and operating results for the ~~six-month period~~three-months ended ~~June 30, 2017~~ March 31, 2018, 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.~~2018.

Overview

We are a television broadcast company headquartered in Atlanta, Georgia, that owns ~~and/or~~and operates ~~over 100~~ television stations and leading digital assets in markets throughout the United States. As of ~~June 30, 2017,~~ March 31, 2018, we owned ~~and/or~~and operated television stations in 57 television markets broadcasting over 200 separate programming streams, including ~~104~~over 100 channels affiliated with the CBS Network (“CBS”), the NBC Network (“NBC”), the ABC Network (“ABC”) and the FOX Network (“FOX”). As of ~~June 30, 2017,~~ March 31, 2018, our station group reached approximately ~~10.6%~~10.4% of total United States television households.

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 sheet.

Cyclicality and Seasonality

Broadcast advertising revenues are generally highest in the second and fourth quarters each year. This seasonality results partly from increases in consumer advertising in the spring and retail advertising in the period leading up to and including the holiday season. Broadcast advertising revenues are also typically higher in even-numbered years due to increased spending by political candidates, political parties and special interest groups ~~in advance~~during the “on-year” of ~~elections.~~the two year election cycle. This political spending typically is heaviest during the fourth quarter. In addition, the broadcast of Olympic Games by our NBC affiliated stations during even-numbered years generally leads to increased viewership and revenue during those years.

Use of 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.~~related notes. Our actual experience and accordingly, our results could differ materially from these estimates. The most significant estimates we make relate to our allowance for doubtful accounts in receivables, valuation of goodwill and intangible assets, amortization of program broadcast rights 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, and KWQC-TV (NBC), in the Davenport, Iowa, Rock Island, Illinois, and Moline, Illinois or “Quad Cities” television market, 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 Gray Midwest EAT, LLC (“GME”), pursuant to which we loaned GME $106.0 million that GME in turn used to acquire the broadcast licenses of the stations. This loan agreement was subsequently amended whereby the principal was increased from $106.0 million to $149.8 million. On May 30, 2017, we exercised an option to acquire the licenses held by GME, assuming $59.0 million of GME’s debt and pledging the $90.8 million of proceeds receivable from the FCC’s recently completed reverse auction for broadcast spectrum (the “FCC Spectrum Auction”). That pledge was satisfied on August 7, 2017, upon receipt of the auction proceeds from the FCC.

We believe we were the primary beneficiary of GME at June 30, 2017, 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 provide, and our obligation to absorb losses and 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.

~~The carrying amounts and classification of the assets and liabilities of GME included in our condensed consolidated balance sheets as of June 30, 2017 are as follows (in thousands):~~

June 30,

2017

Assets:

Current assets:

Auction proceeds receivable
$ 90,824
Total assets
$ 90,824

Liabilities:

Current liabilities:

Note payable
$ 90,824
Total liabilities
$ 90,824

A receivable of $90.8 million, representing the amount owed us by GME and a note payable of $90.8 million representing our loan to GME, as of June 30, 2017, were eliminated in our condensed consolidated financial statements.

Earnings Per Share

We compute basic earnings per share by dividing net income ~~attributable to common stockholders~~ by the weighted-average number of our common shares and Class A 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 antidilutive.

The following table reconciles basic weighted-average shares outstanding to diluted weighted-average shares outstanding for the three-months ended March 31, 2018 and ~~six-month periods ended June 30,~~ 2017, ~~and 2016~~ respectively (in thousands):

	Three Months Ended				Six Months Ended				Three Months Ended
	June 30,				June 30,				March 31,
	2017		2016		2017		2016		2018		2017

Weighted-average shares outstanding-basic		71,821		71,878		71,849		71,835		89,058		71,877
Common stock equivalents for stock options and restricted shares		680		870		661		830
Common stock equivalents for stock options and restricted stock										518		642
Weighted-average shares outstanding-diluted		72,501		72,748		72,510		72,665		89,576		72,519

Accumulated Other Comprehensive Loss

Our accumulated other comprehensive loss balances as of ~~June 30, 2017~~ March 31, 2018 and December 31, ~~2016~~ 2017, consist of adjustments to our pension liability and the related income tax ~~benefit.~~effect. Our comprehensive income for the three-months ended March 31, 2018 and ~~six-month periods ended June 30,~~ 2017 ~~and 2016~~ consisted entirely of net income. Therefore, a consolidated statement of comprehensive income is not ~~presented.~~ presented for the three-months ended March 31, 2018 or 2017.

~~Property~~Property and ~~Equipment~~Equipment

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

Estimated

March 31,

December 31,

Useful Lives

2018

2017

(in years)

Property and equipment:

Land

51,946

50,458

Buildings and improvements

156,973

156,924

Equipment

516,251

511,878

725,170

719,260

Accumulated depreciation

(381,992

)

(368,602

)

Total property and equipment, net

343,178

350,658

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

In April 2017, the Federal Communications Commission (the “FCC”) began a process of reallocating the broadcast spectrum (the “Repack”). Specifically, the FCC is requiring certain television stations to change channels and/or modify their transmission facilities. The legislation authorizing the Repack provides the FCC with a $1.7 billion fund to reimburse reasonable costs incurred by stations operating under a full power license that are reassigned to new channels. Twenty-six ~~months ended June 30, 2017,~~ of our ~~total property~~current full power stations and ~~equipment balance, before accumulated depreciation, increased approximately $36.5 million primarily as a result~~five of our low power stations are affected by the Repack. We expect to receive reimbursements for the majority of our expenses related to the Repack of our full power stations. However, we cannot predict whether the fund will be sufficient to reimburse all of our expenses.

The following tables provide additional information related to (gain) loss 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 six months ended June 30, 2017 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~~cash flows (in thousands):

Estimated

June 30,

December 31,

Useful Lives

2017

2016

(in years)

Property and equipment:

Land
$ 50,024 $ 44,611
Buildings and improvements
149,430 139,078 7 to 40
Equipment
500,361 471,798 3 to 20
699,815 655,487
Accumulated depreciation
(353,320 ) (329,394 )
Total property and equipment, net
$ 346,495 $ 326,093

	Three Months Ended
	March 31,
	2018			2017
(Gain) loss on disposal of assets, net:
Proceeds from sale of assets	$	(41	)	$	(50	)
Proceeds from FCC - Repack		(937	)		-
Net book value of assets disposed		157			577
Total	$	(821	)	$	527

Purchase of property and equipment:
Recurring purchases - operations	$	4,292		$	3,977
Repack		1,988			-
Total	$	6,280		$	3,977

Allowance for Doubtful Accounts

Our allowance for doubtful accounts is equal to a portion of our receivable balances that are 120 days old or older. We may provide allowances for certain receivable balances that are less than 120 days old when warranted by specific facts and circumstances. We generally write-off accounts receivable balances when the customer files for bankruptcy or when all commonly used methods of collection have been exhausted.

Recent Accounting Pronouncements

In ~~May 2014,~~ February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) ~~No. 2014-09, Revenue from Contracts with Customers~~2016-02 – Leases (Topic ~~606)~~842). ASU ~~2014-09 provides new~~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 ~~revenue recognition for revenue from contracts with customers~~the balance sheet and ~~will replace most existing revenue recognition guidance when it becomes effective. This guidance requires an entity to recognize the amount~~requiring disclosure of ~~revenue to which it expects to be entitled for the transfer of promised goods or services to customers.~~key information about leasing arrangements. 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, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): ~~Deferral of the Effective Date~~~~. ASU 2015-14 deferred the~~will be effective ~~date of ASU 2014-09 by one year to interim and annual reporting periods~~for fiscal years beginning after December 15, ~~2017, and permitted early adoption of the~~2018. This standard ~~but not before the original effective date of December 15, 2016. The standard permits the use of either a retrospective~~is expected 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 of this standard will not have a material effect on our balance ~~sheets and statements of operations. We have determined~~sheets. Specifically, we expect that, once adopted, we will ~~utilize~~ record a right of use asset and lease obligation liability. As of December 31, 2017, the ~~modified retrospective method to implement the standard.~~values of those assets and related liabilities were each approximately $17.6 million. We are also evaluating our footnote ~~disclosures and expect that this standard’s most significant impact will be expanded disclosures~~disclosure requirements. We are continuing to review our contractual obligations related to ~~deferred revenue from customer pre-payments. We will continue to~~this standard, and develop ~~these~~our 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,~~ 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. After adoption of the standard, the annual, or interim, goodwill impairment test will be performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge would be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized will not exceed the total amount of goodwill allocated to that reporting unit. 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 a determination as to whether to early-adopt this standard. We do not expect that the adoption of this standard will have a material impact on our financial statements.

In February 2018, the FASB issued ASU 2018-02,Income Statement - Reporting Comprehensive Income (Topic 220) – Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. ASU 2018-02 allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017 (“TCJA”). Consequently, the amendments eliminate the stranded tax effects resulting from the TCJA and will improve the usefulness of information reported to financial statement users. However, because the amendments only relate to the reclassification of the income tax effects of the TCJA, the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations is not affected. The standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The standard allows for early adoption, but we have not yet made a determination as to whether to early-adopt this standard. 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 January 2016, the FASB issued ASU No. ~~2016-01,~~ 2016-01 – Financial Instruments - Overall (Subtopic ~~825-10)~~ 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities. ASU ~~2016-01~~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 to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. ~~The standard~~ASU 2016-01 requires equity investments previously measured at cost to be measured at fair value with changes in fair value recognized in net income. However, equity investments without a readily determinable fair value may be measured using a prescribed measurement alternative that reflects current fair value with changes in the current fair value recognized in net income and includes a qualitative evaluation of impairment. In February 2018, the FASB issued ASU No.2018-03 – Technical Corrections and Improvements to Financial Instruments-Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2018-03 clarifies certain aspects of the guidance issued in ASU 2016-01. ASU 2018-03 is effective for ~~fiscal years~~interim periods beginning after ~~December~~June 15, ~~2017, including~~2018 but can be adopted early. We adopted the amendments in both updates concurrently beginning in the first quarter of 2018. We currently have equity investments in the television broadcasting industry that do not have readily determinable fair values. We have applied the measurement alternative as defined in the amendments. These investments are reported together as a non-current asset on our balance sheet. We evaluate these investments on an interim ~~periods within those fiscal years. We do not expect that~~basis for impairment. Accordingly, the adoption of this standard ~~will~~did not have a material impact on our financial statements.

In ~~February 2016,~~ March 2017, the FASB issued ASU ~~2016-02, Leases (Topic 842). ASU 2016-02 will supersede Topic 840,~~2017-07, ~~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, to 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)~~715) - Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. ASU ~~2017-07~~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~~We adopted this standard ~~is effective for fiscal~~beginning in the first quarter of 2018. Because our defined benefit pension plans were frozen in prior years, ~~beginning after December 15, 2017, including interim periods within those fiscal years. We do~~ we have not ~~expect that~~ incurred any service cost in our condensed consolidated statements of operations during the three months ended March 31, 2018 or 2017. Upon the adoption of this standard ~~will have a material impact on~~we reclassified our ~~financial statements.~~net pension expense (benefit), from our operating expenses to our miscellaneous income, net. The amount was not material.

~~Adoption~~In addition to the reclassification 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~~pension expense (benefit) in 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 thecondensed consolidated 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,operations 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~~described above, certain amounts in the condensed consolidated statement of cash flows have also been reclassified to conform to the current presentation.

2.	~~Acquisitions~~Revenue

Adoption of New Accounting Standard: ASC Topic 606, Revenue from Contracts with Customers

On January ~~13, 2017,~~ 1, 2018, we ~~acquired KTVF-TV (NBC)~~adopted Accounting Standards Codification (“ASC”) Topic 606 - Revenue from Contracts with Customers, ~~KXDF-TV (CBS),~~ as amended. We adopted this ASC using the modified retrospective method and ~~KFXF-TV (FOX)~~as a result, comparative information has not been restated and continues to be presented as prescribed by the accounting standards in effect during the ~~Fairbanks, Alaska television market (DMA 202), from Tanana Valley Television Company and Tanana Valley Holdings, LLC for $8.0 million (the “Fairbanks Acquisition”), using cash~~periods presented. This transition method was applied to all open contracts with customers at the time of adoption. The adoption of this ASC did not result in an impact on ~~hand.~~

~~As described above, on January 17, 2017, we completed the Media General Acquisition, for an adjusted purchase price of $269.9 million using cash on hand.~~our current or historical results.

~~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~~Disaggregation of West Virginia (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.Revenue

~~On May 1, 2017, we acquired WABI-TV (CBS/CW) in the Bangor, Maine television market (DMA 156)~~The following table presents our revenue from contracts with customers disaggregated by type of service and WCJB-TV (ABC/CW) in the Gainesville, Florida television market (DMA 161) 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.

We refer to the seven stations acquired (excluding the stations acquired in the Clarksburg Acquisition) during the first six-months of 2017 and the stations we commenced operating under an LMA 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 preliminary fair value estimates of the assets acquired, liabilities assumed and resulting goodwill of the 2017 Acquisitions and the Clarksburg Acquisition are summarized as followssales channel (in thousands):

Acquisition

Fairbanks

Media General

Clarksburg

Diversified

Total

Current assets
$ 122 $ 666 $ 462 $ 361 $ 1,611
Property and equipment
2,650 20,471 4,133 12,329 39,583
Goodwill
471 85,997 3,222 35,486 125,176
Broadcast licenses
2,228 149,846 17,003 26,219 195,296
Other intangible assets
2,702 13,398 2,234 11,051 29,385
Other non-current assets
71 282 51 27 431
Current liabilities
(140 ) (695 ) (554 ) (423 ) (1,812 )
Other long-term liabilities
(84 ) - (51 ) (50 ) (185 )

Total
$ 8,020 $ 269,965 $ 26,500 $ 85,000 $ 389,485

	Three Months Ended
	March 31,
	2018		2017
Market and service type:
Advertising:
Local	$	105,469	$	102,597
National		24,512		24,814
Political		5,775		1,321
Total advertising		135,756		128,732
Retransmission consent		85,551		67,573
Other		4,951		7,156
Total revenue	$	226,258	$	203,461

Sales Channel:
Direct	$	133,422	$	114,522
Advertising agency intermediary		92,836		88,939
Total revenue	$	226,258	$	203,461

~~Amounts~~Advertising Revenue

Broadcast advertising revenue is generated primarily from the broadcast of television advertising time to local, national and political advertisers. Most advertising contracts are short-term, and generally run only for a few weeks. Our performance obligation is satisfied when the advertisement is broadcast or appears on our stations’ websites or mobile applications. Advertising revenue is recognized when the performance obligation is satisfied and then billed to the customer in the ~~table above~~period the revenue is recognized. We have an unconditional right to receive payment of the amount billed generally within 30 days of the invoice date. Payment terms are expressly stated in our standard terms and conditions. The invoiced amount to be received is recorded in accounts receivable on our balance sheet.

We broadcast the customer’s advertisement either 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 market area. Broadcast advertising rates are generally the highest during the most desirable viewing hours, with corresponding reductions during other hours. The ratings of a local station affiliated with a major network can be affected by ratings of network programming. Internet advertising is placed on our stations’ websites and mobile applications. These advertisements may be in the form of banner advertisements, pre-roll advertisements or video and other types of advertisements or sponsorships.

We generate advertising revenue either by the efforts of our direct sales employees or through third party advertising agency intermediaries. Third party advertising intermediaries represent the customer and contract with us to deliver broadcast or internet advertising for the customer.

We record revenue and expense for non-monetary trade transactions involving the exchange of tangible goods or services with our customers. The revenue is recorded at the time the advertisement is broadcast and the expense is recorded at the time the goods or services are used. The revenue and expense associated with these transactions are based ~~upon management’s preliminary estimates of the fair values using valuation techniques including income, cost and market approaches. The fair value estimates are based~~ on ~~but not limited to, expected future revenue and cash flows, expected future growth rates, and estimated discount rates.~~

~~Property and equipment are being depreciated over their estimated useful lives ranging from three years to 40 years.~~

Other intangible assets represent primarily the estimated fair values of retransmission agreements of $21.5 million, advertising client relationships of $4.1 million and favorable income leases of $2.5 million. These intangible assets are being amortized over their estimated useful lives of 5.2 years for retransmission agreements, 4.2 years for advertising client relationships and 12.6 years for favorable income leases.

~~Goodwill is calculated as the excess of the consideration transferred over~~ the fair value of the ~~identifiable net~~ assets ~~acquired~~or services received.

Retransmission Consent Revenue

We enter into license agreements with cable, satellite, multichannel video programming distributors and ~~liabilities assumed,~~digital delivery system (or “OTT”) customers (collectively “MVPD”) that provide them the right to use our broadcast signal for retransmission across the MVPD system for an agreed period of time. These agreements represent a sales and ~~represents~~usage based functional intellectual property license based on the ~~future economic benefits expected~~number of subscribers to ~~arise from other intangible assets acquired that do not qualify~~the licensee’s delivery systems. Our performance obligation is to provide the licensee with access to our intellectual property when it is broadcast. The duration of the typical retransmission consent contract is three years. Retransmission consent revenue is recognized continuously during the period of the contract as we transmit our broadcast signal to the MVPD. The amount of revenue recognized is determined based upon a fixed rate per subscriber multiplied by the number of active subscribers to our MVPD customer systems for ~~separate recognition, including assembled workforce, as well as future synergies that we expect to generate from each acquisition.~~the given month. We bill our MVPD customers monthly over the life of the retransmission consent contract. We have ~~preliminarily~~an unconditional right to receive payment of the amount billed generally within 30 days from the invoice date. Payment terms are expressly stated in our retransmission consent contracts and standard terms and conditions. The invoiced amount to be received is recorded ~~$125.2~~in accounts receivable on our balance sheet.

Subscriber data necessary to calculate the amount of retransmission consent revenue to be recognized for the current month is not received until subsequent to that month. We estimate the current month retransmission consent revenue based upon the subscriber data from the most recent subscriber report by the MVDP. We record the estimate in the current month as retransmission consent revenue and then adjust the amount recorded in that month when we receive the actual subscriber data. We typically have monthly adjustments to our revenue to account for changes in MVPD subscribers on a monthly basis, however, the number of MVPD subscribers does not change materially on a monthly basis and this adjustment does not materially impact our recorded retransmission consent revenue on a quarterly or annual basis.

Other Revenues

Other revenues consist of production, tower rental and other miscellaneous items. Production revenue is derived from the production of programming. Production revenue is recognized as the programming is produced. Tower rental income is recognized monthly over the life of the lease. All of our leases under which we are lessor are considered operating leases. Other revenue is comprised of one-time or infrequently occurring special projects, dubbing, fees and other miscellaneous items. Other revenue is recognized as the services are performed. Tower rental income is recognized monthly over the life of the lease. Other revenue is generated by our direct sales employees.

Accounts Receivable and Deposit Liability

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 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 $2.9 million of ~~goodwill related to~~revenue in the three months ended March 31, 2018 that was included in the deposit liability balance as of December 31, 2017. The deposit liability balance is included in deferred revenue on our condensed consolidated balance sheets. The deposit liability balance was $4.4 million and $3.8 million as of March 31, 2018 and December 31, 2017, Acquisitions. The use of different estimates or assumptions could result in materially different allocations. The goodwill recognized related to these acquisitions is deductible for income tax purposes.respectively.

~~Our consolidated results of operations include~~Practical Expedients

We expense direct and agency commissions when incurred because our advertising contracts are one year or less in duration and the ~~results of each acquisition from the date of the respective transaction. Revenue and operating income attributable to the 2017 Acquisitions and~~amortization period for capitalized expenses would be less than one year. Direct commissions are included in broadcast operating expense and agency commissions are netted against gross revenue on our condensed consolidated statements of ~~operations for the six-months ended June 30, 2017 were $31.8 million~~operations.

The nature of our contracts with advertising customers is such that our performance obligations arise and ~~$15.7 million, respectively. In connection~~are satisfied concurrent with the ~~2017 Acquisitions we incurred~~broadcast or web placement of the advertisement. We did not have incomplete or unsatisfied performance obligations at the end of any period presented. We record a ~~total of $1.0 million of transaction related costs during~~deposit liability for cash deposits received from our customers that are to be applied as payment once the ~~six-months ended June 30, 2017, primarily related to legal, consulting~~performance obligation arises and ~~other professional fees. Revenue and operating income attributable to~~is satisfied in the ~~2016 Acquisitions and included in~~manner stated above. These deposits are recorded as deposit liabilities on our ~~consolidated statements of operations for the six-months ended June 30, 2016 were $50.7 million and $19.0 million, respectively.~~balance sheet.

On February 7, 2017, we entered into a Third Amended and Restated Credit Agreement (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”). Amounts 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 ~~June 30, 2017,~~ March 31, 2018, the 2017 Senior Credit Facility provided total commitments of ~~$738.4~~$733.6 million, consisting of ~~the $638.4~~a $633.6 million term loan facility (the “2017 Term ~~Loan~~Loan”) and ~~the $100.0~~a $100.0 million revolving credit facility (the “2017 Revolving Credit ~~Facility. Our quarterly principal payments under the 2017 Term Loan are $1.6 million.~~

Prior to the entry into the 2017 Senior Credit Facility, the 2014 Senior Credit Facility consisted 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 balances outstanding under the 2014 Senior Credit Facility were 3.9%Facility”).

~~The~~ For all of our interest bearing obligations, we made interest payments of approximately $26.7 million and $29.9 million during the three-months ended March 31, 2018 and 2017, respectively. We did not capitalize any interest payments during the three-months ended March 31, 2018 or 2017.

Borrowings under the 2017 Term Loan ~~borrowings~~ 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. ~~Until our results of operations for the quarter ending September 30, 2017 have been certified,~~Currently, the applicable margin is ~~2.50%~~2.25% for ~~all~~ LIBOR borrowings and ~~1.50%~~1.25% for ~~all~~ Base Rate ~~borrowings (the “Initial Applicable Margin”). Thereafter, (i) if the~~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~~ is 2.25% for all LIBOR borrowings and 1.25% for all Base Rate borrowings, and ~~(ii)~~ if the Leverage Ratio is greater than 5.25 to 1.00, the ~~Initial Applicable Margin will apply.~~applicable margin is 2.5% for all LIBOR borrowings and 1.5% for all Base Rate borrowings. As of ~~June 30, 2017,~~ March 31, 2018, the interest rate on the balance outstanding under the 2017 Term Loan was ~~3.6%~~3.9%.

Borrowings under the 2017 Revolving Credit Facility currently bear interest, at our option, ~~based on~~at either LIBOR plus 1.50% ~~to 2.00%~~ or ~~the~~ Base Rate plus 0.50% ~~to 1.00%~~, 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 entering into the 2017 Senior Credit Facility, we recorded a loss on extinguishment of debt of approximately $2.9 million in the six-months ended June 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.

As of June 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.

On June 14, 2016, we completed the private placement of $500.0 million of our 2026 Notes (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 June 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 ~~and our~~ consolidated ~~subsidiaries'~~ 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~~ and has 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~~ guarantee the 2024 Notes and 2026 Notes are minor. As of ~~June 30, 2017,~~ March 31, 2018, 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 Senior Credit Facility contains affirmative and restrictive covenants with which we must comply, including: (a) limitations on additional ~~indebtedness;~~indebtedness, (b) limitations on ~~liens;~~liens, (c) limitations on the sale of ~~assets;~~assets, (d) limitations on ~~guarantees;~~guarantees, (e) limitations on investments and ~~acquisitions;~~acquisitions, (f) limitations on the payment of dividends and share ~~repurchases;~~repurchases, (g) limitations on ~~mergers;~~mergers and (h) maintenance of ~~a first lien leverage ratio not to exceed certain maximum limits~~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 ~~June 30, 2017~~ March 31, 2018 and December 31, ~~2016,~~ 2017, we were in compliance with all required covenants under all our debt obligations.

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

5. Stockholders’ Equity

5.	~~Stockholders’ Equity~~

~~We are~~As of March 31, 2018, we were authorized to issue ~~135~~135.0 million shares in total of all classes of stock consisting of ~~which 15~~100.0 million shares ~~are designated~~of common stock, 15.0 million shares of Class A common stock ~~100~~and 20.0 million shares ~~are designated common stock, and 20 million shares are designated “blank check”~~of preferred stock, for which our ~~Board of Directors~~board has the authority to determine the rights, powers, limitations and restrictions. On May 7, 2018, we filed an amendment to our Restated Articles of Incorporation increasing the number of shares of common stock and Class A common stock authorized for issuance thereunder to 200.0 million shares and 25.0 million shares, respectively. As of March 31, 2018, we had outstanding 82.0 million shares of common stock and 6.7 million shares of Class A common stock. No shares of preferred stock were outstanding. 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 has one vote per ~~share.~~share on all matters submitted to a vote of our shareholders. 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 months ended March 31, 2018 and ~~six-month periods ended June 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 Board of Directors of the Company authorized the Company to repurchase up to 2.0 million shares of the Company's common stock and Class A common stock. In March 2006, this authorization was increased to an aggregate of 5.0 million shares (the ~~“2004-2006~~“2004-2006 Repurchase Authorization”). As of ~~December~~March 31, ~~2016,~~ 2018, 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~~$75.0 million of our outstanding common stock prior to December 31, 2019 ~~(the “2016~~(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 Plan ~~(401K plan)~~(the “401(k) plan”). During the ~~three-months~~three-months ended ~~June 30, 2017,~~ March 31, 2018, under the 2016 Repurchase Authorization, we purchased ~~322,038~~1,551,710 shares of our common stock at an average purchase price, including related brokerage commissions, of ~~$12.39~~$12.64 per share, orfor a total cost of ~~$4.0~~$19.6 million. As of ~~June 30, 2017, $69.0~~March 31, 2018, $49.5 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. The 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, we may, at our discretion, issue authorized and unissued shares, or previously issued shares held in treasury, of our ~~Class A~~ common stock or Class A common stock. As of ~~June 30, 2017,~~ March 31, 2018, we had reserved ~~6,044,746~~7,104,769 shares and 1,923,144 shares of our common stock and Class A common stock, respectively, for future issuance under various employee benefit plans. As of December 31, 2016, we had reserved 5,449,148 shares and 257,5811,703,064 shares of our 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 of net periodic benefit cost for our defined benefit pension ~~plans~~plan for the ~~three-month~~ three-months ended March 31, 2018 and ~~six-month periods ended June 30,~~ 2017, ~~and 2016~~ respectively (in thousands):

	Three Months Ended						Six Months Ended						Three Months Ended March 31,
	June 30,						June 30,						2018			2017
	2017			2016			2017			2016
Service cost	$	-		$	-		$	-		$	-
Interest cost		1,528			1,185			2,335			2,369		$	1,106		$	807
Expected return on plan assets		(1,848	)		(1,298	)		(2,824	)		(2,595	)		(1,536	)		(976	)
Loss amortization		158			153			242			306			169			84
Net periodic cost	$	(162	)	$	40		$	(247	)	$	80
Net periodic benefit cost													$	(261	)	$	(85	)

The components of net periodic pension cost as stated above are included in miscellaneous income in our income statement. During the ~~six-month period~~three-months ended ~~June 30, 2017,~~ March 31, 2018, we ~~contributed $0.6 million~~did not make a contribution to our defined benefit pension ~~plans.~~plan. During the remainder of ~~2017,~~2018, we expect to contribute ~~an additional $1.7~~$2.0 million to ~~these plans.~~this plan.

During the three ~~and six-month periods~~-months ended ~~June 30, 2017,~~ March 31, 2018, we contributed ~~$1.8~~$1.9 million ~~and $3.7 million, respectively,~~ in matching contributions and $4.1 million of discretionary profit-sharing contributions to ~~our defined contribution plan,~~ the ~~Gray Television, Inc. Capital Accumulation Plan.~~401(k) plan. During the remainder of ~~2017,~~2018, we ~~estimate that our~~expect to contribute $5.4 million of matching contributions ~~will be approximately $3.2 million~~ to this ~~plan, excluding discretionary profit-sharing contributions.~~plan.

7.	~~Share-based~~7. Stock-based Compensation

We recognize compensation expense for share-based payment awards made to our employees, consultants and ~~directors, including stock options and restricted shares awarded under~~directors. Our current stock-based compensation plans include our 2017 Equity and Incentive Compensation Plan (the ~~“2017~~“2017 EICP”); our 2007 Long-Term Incentive Plan, as amended (the ~~“2007~~“2007 Incentive Plan”); and our Directors’ Restricted Stock Plan. ~~Currently, there are no outstanding share awards under our Directors’ Restricted Stock Plan.~~ The following table provides ~~information on~~ our ~~share-based~~stock-based compensation expense and related income tax benefit for the three-months ended March 31, 2018 and ~~six-month periods ended June 30,~~ 2017, ~~and 2016~~ respectively (in thousands):.

Three Months Ended

Six Months Ended

June 30,

June 30,

2017

2016

2017

2016

Share-based compensation expense, gross
$ 1,434 $ 1,270 $ 2,772 $ 2,556
Income tax benefit at our statutory rate associated with share-based compensation
(559 ) (495 ) (1,081 ) (997 )
Share-based compensation expense, net
$ 875 $ 775 $ 1,691 $ 1,559

	Three Months Ended March 31,
	2018			2017
Stock-based compensation expense, gross	$	2,157		$	1,337
Income tax benefit at our statutory rate associated with stock-based compensation		(548	)		(521	)
Stock-based compensation expense, net	$	1,609		$	816

The 2017 EICP provides and, until May 2, 2017, the 2007 Incentive Plan provided for the grant of incentive stock options, nonqualified stock options, restricted stock awards, stock appreciation rights, and performance awards to acquireAll shares of ~~our~~common stock and Class A common stock ~~or common~~underlying outstanding options, restricted stock ~~or other~~units and performance awards ~~based on our performance, to our employees, consultants~~are counted as issued at target levels under the 2017 EICP, the 2007 Incentive Plan and ~~non-employee directors.~~the Directors’ Restricted Stock Plan for purposes of determining the number of shares available for future issuance.

During the ~~six-month period~~three-months ended ~~June 30, 2017,~~ March 31, 2018, we ~~granted:~~granted under the 2017 EICP:

●

110,040 shares of restricted Class A common stock with a grant date fair value per share of $12.65 to an employee, of which 36,680 shares will vest on each of February 28, 2019, 2020 and 2021;

●

110,040 shares of restricted Class A common stock with a grant date fair value per share of $12.65 to an employee, subject to the achievement of certain performance measures, which will vest on February 28, 2021; and

●

318,196 shares of restricted common stock with a grant date fair value per share of $15.25 to certain employees, of which 153,406 shares will vest on February 28, 2019, 82,394 shares will vest on February 28, 2020, and 82,396 shares will vest on February 28, 2021.

During the three-months ended March 31, 2017, we granted under the 2007 Incentive Plan:

●

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

●

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

●

~~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 six-month period ended June 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.~~

●

~~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 A common stock ~~activity~~activities for the ~~six-month periods~~three-months ended ~~June 30, 2017~~ March 31, 2018 and ~~2016~~2017, respectively, is as follows:

	Six Months Ended										Three Months Ended
	June 30, 2017					June 30, 2016					March 31, 2018					March 31, 2017
				Weighted-					Weighted-					Weighted-					Weighted-
				average					average					Average					Average
				Grant Date					Grant Date		Number			Grant Date		Number			Grant Date
	Number of			Fair Value		Number of			Fair Value		of			Fair Value		of			Fair Value
	Shares			Per Share		Shares			Per Share		Shares			Per Share		Shares			Per Share
Restricted stock - common:
Restricted common stock:
Outstanding - beginning of period		396,033		$	12.06		337,506		$	9.57		503,685		$	11.14		396,033		$	12.06
Granted		307,943		$	10.40		237,500		$	12.88		318,196		$	15.25		307,943		$	10.40
Vested		(200,291	)	$	11.82		(178,973	)	$	8.46		(225,570	)	$	11.21		(200,291	)	$	11.82
Outstanding - end of period		503,685		$	11.14		396,033		$	12.06		596,311		$	13.31		503,685		$	11.14

Restricted stock - Class A common:
Restricted stock - beginning of period		415,082		$	10.15		374,693		$	9.46
Restricted Class A common stock:
Outstanding - beginning of period												462,632		$	10.63		415,082		$	10.15
Granted(1)		275,076		$	10.84		218,612		$	11.25		220,080		$	12.65		198,220		$	10.60
Vested		(227,526	)	$	10.00		(178,223	)	$	10.04		(274,926	)	$	10.48		(227,526	)	$	10.00
Restricted stock - end of period		462,632		$	10.63		415,082		$	10.15
Outstanding - end of period												407,786		$	11.82		385,776		$	10.47

Restricted stock units - common stock:
Outstanding - beginning of period												209,500		$	15.70
Granted												-		$	-
Vested												(209,500	)	$	15.70
Forfeited												-		$	-
Outstanding - end of period												-		$	-

(1) For awards subject to future performance conditions, amounts assume target performance.

At ~~June 30, 2017~~ March 31, 2018 and December 31, ~~2016,~~ 2017, we had 274,746 options to acquire our common stock outstanding, all of which were vested and exercisable. The exercise price of all outstanding stock options is ~~$1.99~~$1.99 per share. As of ~~June 30, 2017~~ March 31, 2018 and December 31, ~~2016,~~ 2017, we did not have any options outstanding for our Class A common stock. The aggregate intrinsic value of our outstanding stock options was ~~$3.2~~$2.9 million based on the closing market price of our common stock on ~~June 30, 2017.~~

Amortization expense for the ~~six-months~~three-months ended ~~June 30, 2017~~ March 31, 2018 and ~~2016~~2017 was ~~$12.2~~$5.4 million and ~~$8.1~~$5.6 million, respectively. Based on the current amount of intangible assets subject to amortization, we expect that amortization expense for the ~~succeeding five years~~remainder of 2018 will be approximately $9.7 million, and, for the succeeding five years, amortization expense will be approximately as follows: ~~2018, $16.4~~2019,$15.4 million; ~~2019, $13.8~~2020,$12.4 million; ~~2020, $10.8~~2021,$8.3 million; ~~2021, $7.1~~2022,$4.8 million; and ~~2022, $4.9~~2023,$2.9 million. If and when acquisitions orand dispositions occur in the future, actual amounts may vary from these estimates.

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 ~~six-month period~~three-months ended ~~June 30,~~ March 31, 2018 or 2017.

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 21.0% in 2018 and 35.0% in 2017 to our effective income tax rate. For the ~~six-month period~~three-months ended ~~June 30, 2017,~~ March 31, 2018, these estimates increased or decreased our statutory Federal income tax rate of ~~35.0%~~21.0% to our effective income tax rate of ~~40.5%~~24.3% as follows: state income taxes added ~~4.3%~~4.7%, permanent differences between our U.S. GAAP income and taxable income added ~~1.3%~~0.8%, and a discrete ~~share-based compensation adjustment~~adjustments resulted in a reduction ~~0.1%~~of 2.2%. For the ~~six-month period~~three-months ended ~~June 30, 2016,~~ March 31, 2017, these estimates increased or decreased our statutory Federal income tax rate of 35.0% to our effective income tax rate of ~~40.7%~~41.1% as follows: state income taxes added 4.4% ~~and~~, permanent differences between our U.S. GAAP income and taxable income added ~~1.2%,~~1.9% and discrete ~~share-based compensation~~ adjustments ~~added 0.5%, while adjustments to our reserve for uncertain tax positions~~ resulted in a reduction of ~~0.4%~~0.2%.

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

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”) isshould be read in conjunction with our unaudited condensed consolidated financial statements and notes thereto included elsewhere herein, as well as with our audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2017 (the “2017 Form 10-K”) filed with the SEC.

In addition to a primary broadcast channel, each of our stations can also broadcast additional secondary digital channels within a market by utilizing the same bandwidth, but with different programming from the primary channel. In addition to affiliations with ABC, CBS and FOX, our secondary channels are affiliated with numerous smaller networks and program services including, among others, the ~~CBS Network (“CBS”)~~CW, MY, MeTV, This TV, Ant., ~~the NBC Network (“NBC”), the ABC Network (“ABC”)~~Telemundo, Cozi, Heroes and ~~the FOX Network (“FOX”). As~~Icons and MOVIES! Networks. Certain of ~~June 30, 2017,~~ our secondary digital channels are affiliated with more than one network simultaneously. We also broadcast local news/weather channels in some markets. Our combined TV station group ~~reached~~reaches approximately ~~10.6%~~10.4% of total United States television households.

~~The following analysis~~Based on the consolidated results of the ~~financial condition~~four Nielsen “sweeps” periods in 2017, our television stations achieved the #1 ranking in overall audience in 42 of our 57 markets and ~~results~~the #1 ranking in local news audience in 38 of ~~operations~~ our markets. In addition, our stations achieved the #1 or #2 ranking in both overall audience and news audience in all 57of ~~Gray Television, Inc.~~our 57 markets.

Over the last several years, the television broadcasting industry has been characterized by a high level of acquisition activity. We continue to believe that there are a number of television stations, and ~~its consolidated subsidiaries should be read~~a few station groups, that have attractive operating profiles and characteristics, and that share our commitment to local news coverage in ~~conjunction with our unaudited condensed consolidated financial statements~~the communities in which they operate and ~~related notes contained in this report~~to creating high-quality and ~~our audited consolidated financial statements and related notes contained in our Annual Report on Form 10-K~~locally-driven content. On a highly selective basis, we may pursue opportunities for the ~~fiscal year ended~~acquisition of additional television stations or station groups that fit our strategic and operational objectives, and where we believe that we can improve revenue, efficiencies and cash flow through active management and cost controls. As we consider potential acquisitions, we primarily evaluate potential station audience and revenue shares and the extent to which the acquisition target would positively impact our existing station operations. Consistent with this strategy, from October 31, 2013 through December 31, 2017, we completed 23 acquisition transactions and three divestiture transactions. These transactions added a net total of 51 television stations in 31 television markets, including 26 new television markets, to our operations including eight stations acquired in 2017 (excluding certain television stations we began operating in 2016, ~~(the “2016 Form 10-K”~~and subsequently acquired in 2017, in the Clarksburg, West Virginia market, the “2017 Acquisitions”).

Our operating revenues are derived primarily from broadcast and internet advertising and retransmission consent fees and, to a lesser extent, from other sources such as production of commercials, tower rentals and management fees.

~~On January 13, 2017, we acquired KTVF-TV (NBC), KXDF-TV (CBS), and KFXF-TV (FOX) in the Fairbanks, Alaska television market (DMA 202) for $8.0 million (the “Fairbanks Acquisition”).~~

On January 17, 2017, we acquired WBAY-TV (ABC), in the Green Bay, Wisconsin television market (DMA 68), and KWQC-TV (NBC), in the Davenport, Iowa, Rock Island, Illinois, and Moline, Illinois or “Quad Cities” television market (DMA 101) (collectively, 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 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 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 161) from Community Broadcasting Service and Diversified Broadcasting, Inc. (collectively, the “Diversified Acquisition”) 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 May 4, 2017, we announced that we have entered into an agreement to acquire 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 this station under an LMA, subject to the control of the seller. On August 1, 2017, we completed this acquisition through the use of cash on hand and the LMA was terminated.

We refer to the seven stations acquired (excluding the stations acquired in the Clarksburg Acquisition) during the first six months of 2017 and the stations we commenced operating under an LMA 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.”

~~For additional information regarding our recent acquisitions, see Note 1 “Basis of Presentation” and Note 2 “Acquisitions.”~~

~~Recent Financing Transactions~~Broadcast advertising is sold for placement either 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, as measured by Nielsen. 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 market area. Broadcast advertising rates are generally the highest during the most desirable viewing hours, with corresponding reductions during other hours. The ratings of a local station affiliated with a major network can be affected by ratings of network programming. Most advertising contracts are short-term, and generally run only for a few weeks.

~~On February 7,~~We also sell internet advertising on our stations’ websites. These advertisements may be sold as banner advertisements, pre-roll advertisements or video and other types of advertisements or sponsorships.

Our broadcast and internet advertising revenues are affected by several factors that we consider to be seasonal in nature. These factors include:

Automotive advertisers have traditionally accounted for a significant portion of our revenue. For the three months ended March 31, 2018 and 2017, we ~~entered into the 2017 Senior Credit Facility consisting of a $556.4 million term loan facility (the “2017 Initial Term Loan”)~~derived approximately 24% and a $100.0 million revolving credit facility (the “2017 Revolving Credit Facility”). Amounts outstanding under the 2017 Initial Term Loan were used to repay amounts outstanding under our prior term loan.

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.

Broadcast stations like ours rely on advertising revenue, and, as a result, they are sensitive to cyclical changes in the economy. Our political advertising revenue is generally not as significantly affected by economic slowdowns or recessions as our non-political advertising revenue.

Broadcast advertising revenue is generally highest in the second and fourth quarters each year. This seasonality results partly from increases in consumer advertising in the spring and retail advertising in the period leading up to and including the Christmas holiday season. Broadcast advertising revenue is also typically higher in even-numbered years due to spending by political candidates, political parties and special interest groups during the “on year” of the two-year political advertising cycle. This political advertising spending typically is heaviest during the fourth quarter. In addition, the broadcast of Olympic Games by our NBC-affiliated stations during even-numbered years generally leads to increased viewership and revenue during those years.

For the six-month period ended June 30, 2017, excluding political advertising revenue, our largest advertising customer category was automotive. For each of the six-month periods ended June 30, 2017 and 2016, we earned approximately 25% ~~and 23%~~, respectively, of our total broadcast advertising revenue ~~excluding~~from customers in the automotive industry. Strong demand for our advertising inventory from political advertisers can require significant use of available inventory, which in turn can lower our advertising revenue from ~~automotive customers. Our business and operating results could be materially adversely affected if~~our non-political advertising revenue categories in the even numbered “on-year” of the two year election cycle. These temporary declines are expected to reverse themselves in the following “off-year” of the two year election cycle.

While our total revenues have increased in recent years as a result of our acquisitions, they have also experienced a gradual improvement as a result of improvements in general economic conditions. However, revenue remains under pressure from ~~automotive customers were~~the internet as a competitor for advertising spending. We continue to ~~decrease significantly.~~enhance and market our internet websites in an effort to generate additional revenue. Our ~~business~~aggregate internet revenue is derived from both advertising and sponsorship opportunities directly on our websites.

Our primary broadcasting operating ~~results could also be materially adversely affected if revenue decreased from one or more other significant advertising categories,~~expenses are employee compensation, related benefits and programming costs. In addition, the broadcasting operations incur overhead expenses, such as maintenance, supplies, insurance, rent and utilities. A large portion of the ~~medical, restaurant, communications, furniture~~operating expenses of our broadcasting operations is fixed. We continue to monitor our operating expenses and ~~appliances, entertainment, or financial service industries.~~seek opportunities to reduce them where possible.

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

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):

~~Three~~ Three-Months Ended ~~June 30, 2017~~March 31, 2018 (“the 2018 three-month period”)Compared to ~~Three~~ Three-Months Ended ~~June 30, 2016~~March 31, 2017(“the 2017 three-month period”)

Revenue. Total revenue increased ~~$30.0~~$22.8 million, or ~~15%~~11%, to ~~$226.7~~$226.3 million in the ~~2017 three-month period from the 2016~~2018 three-month period. ~~The~~We acquired three television stations between April 1, 2017 ~~Acquisitions~~ and ~~2016 Acquisitions collectively~~March 31, 2018. Collectively, these three television stations accounted for approximately ~~$61.0~~$9.6 million of the increase in our total revenue in the ~~2017~~2018 three-month period. ~~The 2016 Acquisitions accounted for approximately $34.1 million of~~Including the impact attributable to these three stations, total revenue ~~in the 2016 three-month period. In addition to the impact of the 2017 Acquisitions and the 2016 Acquisitions, total revenue at our legacy stations~~ increased primarily due to retransmission consent revenue that increased ~~by $9.8~~$18.0 million. Political advertising revenue ~~at our legacy stations decreased by $6.4~~increased $4.5 million in the ~~second~~first quarter of ~~2017,~~2018, resulting primarily from ~~2017~~2018 being the ~~“off-year”~~“on-year” of the two-year election cycle. Local revenue increased $2.9 million, in part, as a result of revenue from the broadcast of the 2018 Super Bowl on our NBC-affiliated stations of approximately $2.3 million, compared to $0.6 million that we earned from the broadcast of the 2017 Super Bowl on our FOX-affiliated stations. In addition, 2018 total revenue from the broadcast of the Winter Olympic Games on our NBC-affiliated stations was approximately $5.5 million.

Broadcast ~~Expenses~~ Expenses. Broadcast expenses (before depreciation, amortization and gain or loss on disposal of assets) increased ~~$16.2~~$16.1 million, or ~~14%~~12%, to ~~$133.5~~$149.7 million in the 2018 three-month period. The three television stations that we acquired between April 1, 2017 ~~three-month period due primarily to the 2017 Acquisitions~~ and ~~2016 Acquisitions, which~~March 31, 2018 collectively accounted for approximately ~~$32.4~~$6.6 million of the increase in 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~~operating expenses. Including the impact ~~of the 2017 Acquisitions and the 2016 Acquisitions,~~attributable to these three stations, non-compensation expense ~~at our legacy stations~~ increased ~~$5.6~~$13.1 million primarily as a result of a ~~$5.3~~$9.4 million increase in retransmission expense, consistent with the increased retransmission consent revenue. Compensation expense increased $2.9 million. Non-cash stock based compensation expenses were ~~$0.4~~$1.2 million in the 2018 three-month period and $0.3 million in the 2017 ~~and 2016~~ three-month ~~periods, respectively.~~period.

Corporate and Administrative Expenses. Corporate and administrative expenses (before depreciation, amortization and gain or loss on disposal of assets) ~~decreased slightly by $0.1~~increased $0.6 million, or 1%7%, to ~~$8.4~~$8.3 million, due primarily ~~as a result~~to increases of ~~decreases~~$0.3 million in ~~incentive~~professional fees and compensation ~~expense.~~expense increases of $0.3 million during the 2018 three-month period. We recorded corporate non-cash stock-based compensation expense of ~~$1.1~~$0.9 million ~~and~~in the 2018 three-month period compared to $1.0 million in the 2017 ~~and 2016~~ three-month ~~periods, respectively.~~period.

Depreciation. Depreciation of property and equipment totaled ~~$12.8~~$13.7 million and ~~$11.6~~$12.6 million for the ~~2017~~2018 three-month period and the ~~2016~~2017 three-month period, respectively. Depreciation increased primarily due to the addition of depreciable assets acquired ~~as a part of~~in connection with the 2017 ~~Acquisitions and the 2016~~ Acquisitions.

~~Amortization~~Amortiza.tion. Amortization of intangible assets ~~increased $2.4~~totaled $5.4 million ~~or 57%, to $6.7~~and $5.6 million infor the 2018 three-month period and the 2017 three-month period, respectively. Amortization expense decreased primarily due to the finite-lived intangible assets acquired in connection with the 2017 Acquisitions now being fully amortized.

Interest Expense. Interest expense increased $1.1 million to $24.3 million for the 2018 three-month period compared to the ~~2016 three-month period. Amortization increased primarily due to the additional definite-lived intangible assets acquired as a part of the~~ 2017 ~~Acquisitions and the 2016 Acquisitions.~~

~~(Gain) loss on disposals of assets, net.~~ We reported a gain on disposal of assets of $77.3 million in the 2017 three-month period and a loss on disposal of assets of $1.2 million in the 2016 three-month period. On June 1, 2017 we tendered two of our broadcast licenses and made other modifications to our broadcast spectrum related to our participation in the FCC’s broadcast spectrum auction. Our proceeds from this auction were $90.8 million and the cost of the assets disposed was $13.1 million.

~~Interest Expense~~~~. Interest expense decreased $0.5 million, or 2%, to $23.8 million for the 2017 three-month period compared to the 2016~~ three-month period. This ~~decrease~~increase was attributable to ~~the net effect of~~ an increase in the ~~average borrowings outstanding, offset by a decrease in our~~ average interest rates. The average interest ~~rate~~rates on our total outstanding debt balance ~~was~~were 5.0% and 4.9% ~~and 5.7%~~ during the ~~2017~~2018 three-month period and the ~~2016~~2017 three-month period, respectively. Our average outstanding debt balance was ~~$1.9 billion and $1.5~~$1.8 billion during the 2018 and 2017 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.

Loss from Early Extinguishment of Debt. In the first quarter of 2017, we recorded a loss from early extinguishment of debt of approximately $2.5 million, related to the amendment and restatement of our senior credit facility.

Income tax expense. We recognized income tax expense of ~~$47.9~~$6.4 million and ~~$11.9~~$7.3 million in the ~~2017~~2018 three-month period and the ~~2016~~2017 three-month period, respectively. For the ~~2017~~2018 three-month period and the ~~2016~~2017 three-month period, our effective income tax ~~rates were 40.4%~~rate was 24.3% and ~~40.2%~~41.1%, respectively. We estimate our differences between taxable income or loss and recorded income or loss on an annual basis. Our tax provision for each ~~interim period~~quarter is based upon these full year projections ~~that~~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. For the ~~2017~~2018 three-month period, these estimates increased or decreased our statutory Federal income tax rate of ~~35.0%~~21.0% to our effective income tax rate of ~~40.4%~~24.3% as follows: state income taxes added ~~4.2% and permanent differences between our U.S. GAAP income and taxable income added 1.2%.~~

~~Six Months Ended~~ ~~June 30, 2017~~ ~~Compared to Six Months Ended~~ ~~June 30, 2016~~

~~Revenue.~~ Total revenue increased $59.8 million, or 16%, to $430.1 million in the 2017 six-month period compared to the 2016 six-month period. The 2017 Acquisitions and 2016 Acquisitions collectively accounted for approximately $108.5 million of total revenue in the 2017 six-month period. The 2016 Acquisitions accounted for approximately $50.7 million of total revenue in the 2016 six-month period. In addition to the impact of the 2017 Acquisitions and the 2016 Acquisitions, total revenue at our legacy stations increased primarily due to retransmission consent revenue that increased by $18.9 million. Political advertising revenue at our legacy stations decreased by $14.7 million in the first six months of 2017, resulting primarily from 2017 being the “off-year” of the two-year election cycle.

Excluding the revenue contributed by the 2017 Acquisitions and 2016 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.

~~Broadcast Expenses~~. Broadcast expenses (before depreciation, amortization and loss (gain) on disposal of assets) increased $41.1 million, or 18%, to $267.0 million in the 2017 six-month period due primarily to the 2017 Acquisitions and 2016 Acquisitions, which accounted for approximately $60.2 million of broadcast expenses in the 2017 six-month period. The 2016 Acquisitions accounted for approximately $31.7 million of our broadcast expenses in the 2016 six-month period. In addition to the impact of the 2017 Acquisitions and the 2016 Acquisitions, non-compensation expense at our legacy stations increased $12.5 million primarily as a result of a $10.4 million increase in retransmission expense, consistent with the increased retransmission consent revenue, and $2.9 million of professional fees. ~~Non-cash stock based compensation expenses were $0.7 million and $0.6 million in the 2017 and 2016 six-month periods, respectively.~~

~~Corporate and Administrative Expenses~~. Corporate and administrative expenses (before depreciation, amortization and loss (gain) on disposal of assets) decreased $8.1 million, or 33%, to $16.1 million in the 2017 six-month period compared to the 2016 six-month period primarily as a result of decreases of $7.7 million in professional fees related to acquisitions and to decreases of $1.0 million in incentive compensation expenses. We recorded corporate non-cash stock-based compensation expense of $2.1 million and $1.9 million in the 2017 and 2016 six-month periods, respectively.

~~Depreciation.~~ Depreciation of property and equipment totaled $25.5 million and $22.7 million for the 2017 six-month period and the 2016 six-month period, respectively. Depreciation increased primarily due to the addition of depreciable assets acquired as a part of the 2017 Acquisitions and 2016 Acquisitions.

~~Amortization~~. Amortization of intangible assets increased $4.1 million, or 50%, to $12.2 million in the 2017 six-month period compared to the 2016 six-month period. Amortization expense increased primarily due to the additional definite-lived intangible assets acquired as a part of the 2017 Acquisitions and 2016 Acquisitions.

~~Gain on disposals of assets, net.~~ We reported gains on disposals of assets of $76.8 million in the 2017 six-month period and $0.4 million in the 2016 six-month period. On June 1, 2017, we tendered two of our broadcast licenses and made other modifications to our broadcast spectrum related to our participation in the FCC’s broadcast spectrum auction. Our proceeds from this auction were $90.8 million and the cost of the assets disposed was $13.1 million.

~~Interest Expense~~. Interest expense increased $1.4 million, or 3%, to $47.0 million for the 2017 six-month period compared to the 2016 six-month period. This was attributable to the net effect of an increase in the average borrowings outstanding offset by a decrease in our average interest rates. The average interest rate on our total outstanding debt balance was 4.9% and 5.6% during the 2017 six-month period and the 2016 six-month period, respectively. Our average outstanding debt balance was $1.8 billion and $1.5 billion during the 2017 six-month period and the 2016 six-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 six-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.~~

~~Income tax expense.~~ We recognized income tax expense of $55.2 million and $18.3 million in the 2017 six-month period and the 2016 six-month period, respectively. For the 2017 six-month period and the 2016 six-month period, our effective income tax rate was 40.5% and 40.7%, respectively. The primary reason for the increase in our income tax expense was the increase in our pre-tax income in the 2017 six-month period compared to the 2016 six-month period. We estimate our differences between taxable income or loss and recorded income or loss on an annual basis. Our tax provision for each interim period is based upon these 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 six-month period, these estimates increased or decreased our statutory Federal income tax rate of 35.0% to our effective income tax rate of 40.5% as follows: state income taxes added 4.3%4.7%, permanent differences between our U.S. GAAP income and taxable income added ~~1.3%~~0.8%, and a discrete ~~share-based compensation~~ adjustment resulted in a reduction of ~~0.1%~~2.2%.

The following table presents data that we believe is helpful in evaluating our liquidity and capital resources (in thousands).

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 June 30, 2017 and the 2014 Senior Credit Facility as of December 31, 2016 consisted solely of a term loan totaling $638.4 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 June 30, 2017, the interest rate on the balance outstanding under the 2017 Senior Credit Facility was 3.6%. As of December 31, 2016, the interest rate on the balance outstanding under the 2014 Senior Credit Facility was 3.9%.

2017 Term Loan borrowings bear interest, at our option, of either LIBOR plus an applicable margin or the Base Rate (as defined below) plus an applicable margin. Until our results of operations for the quarter ending September 30, 2017 have been certified, the applicable margin will be 2.50% for all LIBOR borrowings and 1.50% for all Base Rate borrowings (the “Initial Applicable Margin”). Thereafter, (i) if the leverage ratio as set forth in the 2017 Senior Credit Facility (the “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 (ii) if the Leverage Ratio is greater than 5.25 to 1.00, the Initial Applicable Margin will apply.

Borrowings under the 2017 Revolving Credit Facility bear interest, at our option, based on LIBOR plus 1.50% to 2.00% or the Base Rate plus 0.50% to 1.00%, 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 first six months of 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. Our quarterly principal payments under the 2017 Term Loan are $1.6 million.

Our obligations under the 2017 Senior Credit Facility are secured by substantially all of our and our consolidated subsidiaries' 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 June 30, 2017, there were no significant restrictions on the ability of Gray Television, Inc.'s subsidiaries to distribute cash to Gray or to any of the subsidiary guarantors.

The 2017 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 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 a first lien leverage ratio not to exceed certain maximum limits 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 June 30, 2017 and December 31, 2016, we were in compliance with all required covenants under all our debt obligations.

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

Net cash provided by operating activities was ~~$59.1~~$14.4 million in the ~~2017 six-month~~2018 three-month period compared to net cash ~~provided by~~used in operating activities of ~~$45.5~~$0.5 million in the ~~2016 six-month~~2017 three-month period. The increase of ~~$13.7~~$14.9 million in the ~~2017 six-month~~2018 three-month period was primarily the result of an increase in net income of ~~$54.4 million; and an increase~~$9.4 million that was partially offset by a $3.4 million net decrease in non-cash expenses, primarily ~~depreciation, amortization of intangible assets and~~ deferred taxes and loss on extinguishment of ~~$44.5 million; offset~~debt. Approximately $8.9 million of cash was provided by ~~an increase of $76.4 million~~changes in ~~gain on disposal of assets; and an increase in~~net working ~~capital accounts of $8.8 million.~~capital. These changes are primarily due to the ~~impacts~~impact of the 2017 ~~Acquisitions and the 2016 Acquisitions and the gain on disposal of assets resulting from the FCC Spectrum Auction.~~Acquisitions.

Net cash used in investing activities was ~~$413.2~~$7.8 million in the ~~2017 six-month~~2018 three-month period compared to net cash used in investing activities of ~~$448.4~~$293.4 million for the ~~2016 six-month~~2017 three-month period. The decrease was largely due to ~~decreased use of~~a decrease in cash used for acquisition activity in the ~~2017 six-month~~2018 three-month period.

Net cash ~~provided by~~used in financing activities was approximately ~~$71.2~~$25.6 million in the ~~2017 six-month~~2018 three-month period compared to net cash ~~provided by~~used in financing activities of ~~$482.0~~$7.8 million in the ~~2016 six-month~~2017 three-month period. ~~Net cash provided by~~Cash used in financing activities in the ~~2017 six-month~~2018 three-month period was primarily due to ~~borrowings of $85.0 million under 2017 Term Loan; reduced by $3.0~~the $1.6 million of ~~quarterly~~ principal payments ~~under the 2017 Term Loan; reduced by $5.0 million of deferred financing costs related to the~~on our 2017 Senior Credit ~~Facility. Also in the 2017 six-month period we~~Facility, $19.6 million used ~~$4.0 million~~ to repurchase approximately 1.6 million shares of our common stock and ~~made $1.8~~$4.4 million of payments for taxes related to net share settlements of equity awards.

We have $6.4 million in debt principal payments due over the next twelve months. We estimate that we will make approximately ~~$91.1~~$93.3 million in debt interest payments over the twelve months immediately following ~~June 30, 2017.~~March 31, 2018.

Although our cash flows from operations are subject to a number of risks and uncertainties, we anticipate that our cash on hand, future cash expected to be generated from operations, borrowings from time to time under the 2017 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 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 under the 2017 Senior Credit Facility.

Capital expenditures in the 2018 and 2017 ~~and 2016 six-month~~three-month periods were ~~$10.4~~$6.3 million and ~~$13.5~~$4.0 million, respectively. We anticipate that our capital expenditures for the remainder of ~~2017~~2018 will range between approximately ~~$20.0~~$50.0 million and ~~$24.5~~$53.0 million.

~~Results~~ In addition, capital expenditures for Repack during the remainder of ~~FCC Spectrum Auction~~

~~As of June 30, 2017, we recorded a $90.8~~2018 are expected to range between approximately $49.0 million ~~receivable resulting from our relinquishment of two licenses in the FCC’s Spectrum Auction. These proceeds were received on August 7, 2017. Due to prior planning in connection with this transaction,~~ and ~~our recently completed acquisitions, we anticipate that we will be able to defer any related income tax payments on a long-term basis.~~$50.0 million.

~~Other~~The legislation authorizing the Repack provides the FCC with a $1.7 billion fund to reimburse reasonable costs incurred by stations operating under a full power license that are reassigned to new channels. Twenty-six of our current full power stations and five of our low power stations are affected by the Repack. We expect to receive reimbursements for the majority of our expenses related to the Repack of our full power stations. However, we cannot predict whether the fund will be sufficient to reimburse all of our expenses.

The sufficiency of the FCC’s fund to reimburse for Repack costs is dependent upon a number of factors including the amounts to be reimbursed to other industry participants for repacking costs. Currently, we estimate that our total reimbursable cost for the Repack of our full power stations will be approximately $81.4 million. In addition to the reimbursable costs, we intend to make other changes and improvements to our broadcast equipment and facilities that would not have been economically feasible if we were not also purchasing equipment for the Repack. We refer to these related but non-reimbursable capital expenditures as “Repack Related.” Currently, we estimate that Repack Related capital expenditures will be approximately $26.7 million. We are currently developing our estimate of non-reimbursable Repack Related capital expenditures for our low power stations. The Repack process began in the summer of 2017 and will take approximately three years to complete. We anticipate that the majority of our costs associated with Repack will qualify for capitalization, rather than expense. During the year ended December 31, 2017, our capitalized Repack costs and associated reimbursements were $2.8 million and $0.1 million, respectively. As of March 31, 2018, the amount receivable from the FCC for Repack was approximately $4.2 million.

On May 1, 2018, we entered into an agreement to acquire KDLT-TV (NBC), a television station serving the Sioux Falls, South Dakota market (DMA 110) for $32.5 million. The transaction is subject to regulatory approvals and other customary closing conditions. We expect that this transaction will close in the second or third quarter of 2018, using cash on hand.

We file a consolidated federal income tax return and such state and local tax returns as are required. As a result of our utilization of certain of our net operating loss carryforwards, we have begun, and expect to continue, to pay more significant amounts of income taxes. During the ~~2017 six-month~~2018 three-month period, we made income tax payments (net of refunds) of ~~$0.9~~$8.5 million. During the remainder of ~~2017,~~2018, we anticipate making income tax payments (net of refunds) of approximately ~~$1.0~~$36.0 million. ~~Income tax payments are likely to be higher beginning in 2018, assuming no significant changes to the corporate tax code as currently in effect.~~

During the ~~six-months ended June 30, 2017,~~2018 three-month period, we ~~contributed $0.6 million~~did not make a contribution to our defined benefit pension plan. During the remainder of ~~2017,~~2018, we expect to contribute ~~$1.7~~$2.0 million to this pension plan.

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 could 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~~2017 Form 10-K.

This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are all statements other than those of historical fact. When used in this Quarterly Report, the words “believes,” “expects,” “anticipates,” “estimates,” “will,” “may,” “should” and similar words and expressions are generally intended to identify forward-looking statements. Among other things, statements that describe our expectations regarding our results of operations, general and industry-specific economic conditions, future pension plan contributions, ~~future~~income tax payments and capital expenditures ~~and the timing of receipt of proceeds from the FCC Spectrum Auction~~ are forward-looking statements. 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 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 our ~~2016~~2017 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 statements speak only as of the date they are made. We undertake no obligation to update such forward-looking statements to reflect subsequent events or circumstances.

We believe that the market risk of our financial instruments as of ~~June 30, 2017~~March 31, 2018 has not materially changed since December 31, ~~2016.~~2017. Our market risk profile on December 31, ~~2016~~2017 is disclosed in our ~~2016~~2017 Form 10-K.

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 controls and procedures. Based on that evaluation, the CEO and the CFO have concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or furnish under 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. 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~~During the three-month period ended March 31, 2018, we implemented changes in our internal control over financial reporting ~~during the three-month period ended June 30, 2017 identified~~ in connection with ~~this~~the adoption of ASC 606 - Revenue from Contracts with Customers, as amended. These changes included controls related to the collection of data for the amounts that we disclose in the footnotes to our financial statements. We also implemented changes in our internal control over financial reporting in connection with the adoption of ASU No. 2016-01 – Financial Instruments - Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities. These changes relate to the implementation of procedures to document our identification and evaluation of factors that may identify potential impairment of the value of certain non-current investments. Our evaluation included controls that may have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Please refer to the information set out under the heading “Risk Factors” in Part I, Item 1A in our ~~2016~~2017 Form 10-K for a description of risk 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 also materially adversely affect our financial condition and results of operations in the future.

In each of March and November 2004, the Board of Directors of the Company authorized the Company 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 ~~December~~March 31, ~~2016,~~2018, 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 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.

The following table summarizes repurchases of our common stock in the three-months ended ~~June 30, 2017,~~March 31, 2018, all of which were pursuant to the 2016 Repurchase Authorization:

~~On August 7, 2017, the Board~~The following exhibits are filed as part of Directors approved the Gray Television, Inc. Executive and Key Employee Change in Control Severance Plan (the “Plan”). Participants in the Plan are generally selected by the Compensation Committee of the Board of Directors (the “Compensation Committee”) and currently include the Company’s President and Chief Executive Officer (the “CEO”), the Executive Vice President and Chief Financial Officer, and the Executive Vice President, Chief Legal and Development Officer and Secretary (the latter two together, the “Other Named Executive Officers”), and certain other key employees.this Quarterly Report:

Under the Plan, a participant who, in connection with a change in control of the Company or within 24 months following a change in control, is involuntarily terminated without cause or voluntarily terminates his or her employment for good reason (a “qualifying termination”), would receive: (i) any unpaid base salary and payment for unused vacation under the Company’s vacation policy through the date of termination; (ii) a payment equal to the participant’s target annual cash incentive opportunity for the year in which the termination occurred, pro rated through the date of termination of such year; and (iii) a lump sum cash severance payment equal to a multiple (the “severance multiplier”) of the sum of the participant’s annual base salary on the termination date (or any higher annual base salary that was in effect during the 9-month period immediately prior to the change in control) and the participant’s target annual cash incentive opportunity in effect immediately prior to the change in control. The severance multiplier is 3.0 for the CEO, 2.0 for the Other Named Executive Officers and 1.0 for all other Plan participants. In addition to the foregoing, equity awards of a participant will immediately vest and become exercisable upon a qualifying termination, with performance-based equity award generally vesting at the target level. If the participant elects to continue group health care coverage under COBRA, the participant will also be reimbursed for the portion of the premiums that the Company would have paid if the participant had continued to be an employee of the Company for a period of years equal to the participant’s severance multiplier, or earlier in certain circumstances.

Any payment under the Plan will be in lieu of any other severance or termination payment that may be due or become payable to a participant. In addition, the Plan provides that in the event that the severance and other benefits provided for in the Plan would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code, the benefits under the Plan will be either delivered in full, or delivered to a lesser extent which would result in no portion of the benefits being subject to such excise tax, whichever is more beneficial to the participant. The Plan does not provide excise tax gross-ups on payments to participants. Payments under the Plan are contingent upon a participant’s execution of a release of claims in favor of the Company and compliance by the terminated participant with the non-solicitation, non-competition and confidentiality covenants in the Plan.

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.

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)		(Zip code)

	(404) 504-9828
	(Registrant's telephone number, including area code)

		Not Applicable
	~~Not Applicable~~
	(Former name, former address and former fiscal year, if changed since last report.)

	Large accelerated filer ☒	Accelerated filer ☐
	Non-accelerated filer ☐ (do not check if a smaller reporting company)	Smaller reporting company ☐
	Emerging growth company ☐

Common Stock (No Par Value)		Class A Common Stock (No Par Value)
~~66,003,588~~82,039,917 shares outstanding as of ~~July~~ 31May 1, ~~201~~72018		~~6,598,377~~6,729,035 shares outstanding as of ~~July~~ 31May 1, 20201178


PART I.		FINANCIAL INFORMATION	PAGE

Item 1.	Financial Statements

	~~Financial Statements~~Condensed consolidated balance sheets (Unaudited) – March 31, 2018 and December 31, 2017	3

		Condensed consolidated ~~balance sheets~~statements of operations (Unaudited) ~~- June 30,~~– three-months ended March 31, 2018 and 2017 ~~and December 31, 2016~~	35

		Condensed consolidated ~~statements~~statement of ~~operations~~stockholders' equity (Unaudited) ~~- three months and six months~~– three-months ended ~~June 30, 2017 and 2016~~March 31, 2018	56

		Condensed consolidated ~~statement~~statements of ~~stockholders' equity~~cash flows (Unaudited) ~~- six months ended June 30,~~– three months-ended March 31, 2018 and 2017	67

		~~Condensed consolidated statements of cash flows (Unaudited) - six months ended June 30, 2017 and 2016~~	7

		Notes to condensed consolidated financial statements (Unaudited)	8

Item 2.		Management's Discussion and Analysis of Financial Condition and Results of Operations	22 21

Item 3.		Quantitative and Qualitative Disclosures About Market Risk	30 27

Item 4.		Controls and Procedures	30 27

PART II.		OTHER INFORMATION

Item 1A.		Risk Factors	31 27

Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds	31
27
~~Item 5.~~		~~Other Information~~	32

Item 6.		Exhibits	33 29

SIGNATURES		30	34

[X]	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended March 31, 2018or

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

	Gray Television, Inc.
	(Exact name of registrant as specified in its charter)

	June 30,		December 31,
	2017		2016
Assets:
Current assets:
Cash	$	42,360	$	325,189
Accounts receivable trade, less allowance for doubtful accounts of $3,615 and $3,163, respectively		169,846		146,811
FCC spectrum auction proceeds receivable		90,824		-
Current portion of program broadcast rights, net		4,999		13,735
Prepaid taxes		15,631		14,641
Prepaid and other current assets		5,712		5,109
Total current assets		329,372		505,485

Property and equipment, net		346,495		326,093
Broadcast licenses		1,522,532		1,340,305
Goodwill		610,494		485,318
Other intangible assets, net		78,364		56,250
Deferred tax asset		31,975		30,826
Investments in broadcasting and technology companies		16,599		16,599
Other		33,991		22,455
Total assets	$	2,969,822	$	2,783,331

																								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		-		-		-		-		81,066			-			-			-			-			-			81,066

Issuance of common stock:
401(k) plan		-		-		1,135		15		-			-			-			-			-			-			15
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		-		1,275		-		1,497		-			-			-			-			-			-			2,772

Balance at June 30, 2017		8,349,069	$	23,039		71,538,575	$	659,647	$	(19,192	)		(1,750,692	)	$	(24,232	)		(5,535,076	)	$	(49,562	)	$	(17,645	)	$	572,055

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

							Estimated
	June 30,			December 31,			Useful Lives
	2017			2016			(in years)
Property and equipment:
Land	$	50,024		$	44,611
Buildings and improvements		149,430			139,078		7	to	40
Equipment		500,361			471,798		3	to	20
		699,815			655,487
Accumulated depreciation		(353,320	)		(329,394	)
Total property and equipment, net	$	346,495		$	326,093

	Acquisition
	Fairbanks			Media General			Clarksburg			Diversified			Total

Current assets	$	122		$	666		$	462		$	361		$	1,611
Property and equipment		2,650			20,471			4,133			12,329			39,583
Goodwill		471			85,997			3,222			35,486			125,176
Broadcast licenses		2,228			149,846			17,003			26,219			195,296
Other intangible assets		2,702			13,398			2,234			11,051			29,385
Other non-current assets		71			282			51			27			431
Current liabilities		(140	)		(695	)		(554	)		(423	)		(1,812	)
Other long-term liabilities		(84	)		-			(51	)		(50	)		(185	)

Total	$	8,020		$	269,965		$	26,500		$	85,000		$	389,485

	Minimum Principal Maturities
Year	2017 Senior Credit Facility		2024 Notes		2026 Notes		Total
2017	$	3,208	$	-	$	-	$	3,208
2018		6,417		-		-		6,417
2019		6,417		-		-		6,417
2020		6,417		-		-		6,417
2021		6,417		-		-		6,417
Thereafter		609,567		525,000		700,000		1,834,567
Total	$	638,443	$	525,000	$	700,000	$	1,863,443

	Net Balance at December 31,												Net Balance at June 30,
	2016		Additions		Dispositions			Impairments		Amortization			2017

Goodwill	$	485,318	$	125,176	$	-		$	-	$	-		$	610,494
Broadcast licenses		1,340,305		195,332		(13,105	)		-		-			1,522,532
Finite-lived intangible assets		56,250		34,338		-			-		(12,224	)		78,364
Total intangible assets net of accumulated amortization	$	1,881,873	$	354,846	$	(13,105	)	$	-	$	(12,224	)	$	2,211,390

															As of March 31, 2018							As of December 31, 2017
	As of June 30, 2017							As of December 31, 2016									Accumulated							Accumulated
	Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net		Gross		Amortization			Net		Gross		Amortization			Net
Intangible assets not currently subject to amortization:
Broadcast licenses	$	1,576,231	$	(53,699	)	$	1,522,532	$	1,394,004	$	(53,699	)	$	1,340,305	$	1,584,402	$	(53,699	)	$	1,530,703	$	1,584,402	$	(53,699	)	$	1,530,703
Goodwill		610,494		-			610,494		485,318		-			485,318		611,100		-			611,100		611,100		-			611,100
	$	2,186,725	$	(53,699	)	$	2,133,026	$	1,879,322	$	(53,699	)	$	1,825,623	$	2,195,502	$	(53,699	)	$	2,141,803	$	2,195,502	$	(53,699	)	$	2,141,803

Intangible assets subject to amortization:
Network affiliation agreements	$	6,216	$	(2,341	)	$	3,875	$	1,264	$	(1,264	)	$	-	$	6,134	$	(4,196	)	$	1,938		6,134	$	(3,551	)	$	2,583
Other definite lived intangible assets		135,096		(60,607	)		74,489		105,792		(49,542	)		56,250
Other finite-lived intangible assets																143,446		(77,036	)		66,410		143,446		(72,245	)		71,201
	$	141,312	$	(62,948	)	$	78,364	$	107,056	$	(50,806	)	$	56,250	$	149,580	$	(81,232	)	$	68,348	$	149,580	$	(75,796	)	$	73,784

Total intangibles	$	2,328,037	$	(116,647	)	$	2,211,390	$	1,986,378	$	(104,505	)	$	1,881,873	$	2,345,082	$	(134,931	)	$	2,210,151	$	2,345,082	$	(129,495	)	$	2,215,587

	Total

Property and equipment	$	10,500
Goodwill		750
Broadcast licenses		14,250
Other intangible assets		3,500

Total	$	29,000

	Three Months Ended June 30,								Six Months Ended June 30,								Three Months Ended March 31,
	2017				2016				2017				2016				2018					2017
			Percent				Percent				Percent				Percent				Percent					Percent
	Amount		of Total		Amount		of Total		Amount		of Total		Amount		of Total		Amount		of Total			Amount		of Total
Revenue:
Local (including internet/ digital/mobile)	$	117,917	52.0	%	$	104,727	53.3	%	$	220,514	51.3	%	$	194,081	52.4	%
Local (including internet/digital/mobile)																	$	105,469		46.6	%	$	102,597		50.4	%
National		30,981	13.7	%		26,070	13.3	%		55,795	13.0	%		48,149	13.0	%		24,512		10.8	%		24,814		12.2	%
Political		3,708	1.6	%		9,649	4.9	%		5,029	1.2	%		19,304	5.2	%		5,775		2.6	%		1,321		0.6	%
Retransmission consent		69,371	30.6	%		50,549	25.7	%		136,944	31.8	%		97,818	26.4	%		85,551		37.8	%		67,573		33.2	%
Other		4,704	2.1	%		5,638	2.8	%		11,860	2.7	%		11,004	3.0	%		4,951		2.2	%		7,156		3.6	%
Total	$	226,681	100.0	%	$	196,633	100.0	%	$	430,142	100.0	%	$	370,356	100.0	%	$	226,258		100.0	%	$	203,461		100.0	%

					As of
	As of				March 31,		December 31,
	June 30, 2017		December 31, 2016		2018		2017
Cash	$	42,360	$	325,189	$	443,425	$	462,399
Long-term debt, including current portion	$	1,838,614	$	1,756,747
Long-term debt, less deferred financing costs					$	1,836,828	$	1,837,428
Borrowing availability under the Revolving Credit Facility	$	100,000	$	60,000	$	100,000	$	100,000

Period	Total Number of Shares Purchased (1)		Average Price Paid per Share (2)		Total Number of Shares Purchased as Part of Publicly Announced Plans		Maximum Number of Shares (or Approximate Dollar Value) that May Yet Be Purchased Under the Plans or Programs (3)

January 1, 2018 through January 31, 2018:		-	$	-		-	$	73,080,585

February 1, 2018 through February 28, 2018		-	$	-		-	$	72,589,193

March 1, 2018 through March 31, 2018		1,551,710	$	12.61		1,551,710	$	53,017,169

Total		1,551,710	$	12.61		1,551,710

Period	Total Number of Shares Purchased (1)		Average Price Paid per Share (2)		Total Number of Shares Purchased as Part of Publicly Announced Plans		Maximum Number of Shares (or appoximate dollar value) that May Yet Be Purchased Under the Plans or Programs (3)

April 1, 2017 through April 30, 2017:		-	$	-		-	$	75,962,495

May 1, 2017 through May 31, 2017:		299,507	$	12.40		299,507	$	72,903,165

June 1, 2017 through June 30, 2017:		22,531	$	12.32		22,531	$	72,709,249

Total		322,038	$	12.39		322,038


~~Exhibit 10.3~~31.1	Form of Director Restricted Stock Award Agreement pursuant to the Gray Television, Inc. 2017 Equity and Incentive Compensation Plan*


~~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.CAL		XBRL Taxonomy Extension Calculation Linkbase Document


101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

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


Date: May 8, 2018	By:	/s/ James C. Ryan
		James C. Ryan
		Executive Vice President and Chief Financial Officer

~~Date: August 8, 2017~~	~~By:~~	~~/s/~~ ~~James C. Ryan~~
		~~James C. Ryan~~
		~~Executive Vice President and Chief Financial Officer~~