GRAY MEDIA, INC

Previous wording

Business Overview. We are a multimedia company headquartered in Atlanta, Georgia. We are the nation’s largest owner of top-rated local television stations and digital assets serving 113 television markets that collectively reach approximately 37 percent of US television households. The portfolio includes 78 markets with the top-rated television station and 99 markets with the first and/or second highest rated television station, as well as the largest Telemundo Affiliate group with 44 markets totaling over 1.5 million Hispanic TV Households. We also own Gray Digital Media, a full-service digital agency offering national and local clients digital marketing strategies with the most advanced digital products and services. Our additional media properties include video production companies Raycom Sports, Tupelo Media Group, and PowerNation Studios, and studio production facilities Assembly Atlanta and Third Rail Studios.

Current wording

Business Overview. We are a multimedia company headquartered in Atlanta, Georgia. We are the nation’s largest owner of top-rated local television stations and digital assets in the United States. Our television stations serve 114 full-power television markets that collectively reach approximately 37% of US television households. This portfolio includes 77 markets with the top-rated television station and 97 markets with the first and/or second highest rated television station in average all-day ratings across the 113 of such markets measured by Nielsen in 2025. We also own the largest Telemundo Affiliate group with 47 markets totaling over 1.6 million Hispanic TV Households. We also own Gray Digital Media, a full-service digital agency offering national and local clients digital marketing strategies with the most advanced digital products and services. Our additional media properties include video production companies Raycom Sports, Tupelo Media Group, and PowerNation Studios, and studio production facilities Assembly Atlanta and Third Rail Studios.

Previous wording

Our operating revenues are derived primarily from broadcast and digital advertising, retransmission consent fees and, to a lesser extent, other sources such as production of television and event programming, television commercials, tower rentals and management fees. For the years ended December 31, 2024, 2023 and 2022, we generated revenue of $3.6 billion, $3.3 billion and $3.7 billion, respectively.

Current wording

Our operating revenues are derived primarily from broadcast and digital advertising, retransmission consent fees and, to a lesser extent, other sources such as production of television and event programming, television commercials, tower rentals and management fees. For the years ended December 31, 2025, 2024 and 2023, we generated revenue of $3.1 billion, $3.6 billion and $3.3 billion, respectively.

Previous wording

We derived a material portion of our non-political broadcast advertising revenue from advertisers in a limited number of industries, particularly the services sector, comprising financial, legal and medical advertisers, and the automotive industry. The services sector has become an increasingly important source of advertising revenue over the past few years. During the years ended December 31, 2024, 2023 and 2022 approximately 23%, 27% and 28%, respectively, of our broadcast advertising revenue (excluding political advertising revenue) was obtained from advertising sales to the services sector. During the years ended December 31, 2024, 2023 and 2022 approximately 20%, 20% and 17%, respectively, of our broadcast advertising revenue (excluding political advertising revenue) was obtained from advertising sales to automotive customers. Revenue from these industries may represent a lower percentage of total revenue in even-numbered years due to, among other things, the decreased availability of advertising time, as a result of such years being the “on-year” of the two-year election cycle.

Current wording

We derived a material portion of our non-political broadcast advertising revenue from advertisers in a limited number of industries, particularly the services sector, comprising financial, legal and medical advertisers, and the automotive industry. The services sector has become an increasingly important source of advertising revenue over the past few years. Approximately 26%, 23%, and 27% of our Core Advertising Revenue was derived from advertising sales to customers in the services sector for the years ended December 31, 2025, 2024, and 2023, respectively. Approximately 17%, 20%, and 20% of our Core Advertising Revenue was derived from advertising sales to automotive customers for the years ended December 31, 2025, 2024, and 2023, respectively. Revenue from these industries may represent a lower percentage of total revenue in even-numbered years due to, among other things, the decreased availability of advertising time, as a result of such years being the “on-year” of the two-year election cycle.

Previous wording

*Revenue.*Total revenue increased $363 million, or 11%, to $3.6 billion for 2024 compared to 2023.

Current wording

*Revenue.*Total revenue decreased $549 million, or 15%, to $3.1 billion for 2025 compared to 2024. During the year ended December 31, 2025:

Previous wording

Broadcasting Expenses. Broadcasting expenses (before depreciation, amortization, impairment and gain on disposal of assets) increased $49 million, or 2%, to $2.3 billion for 2024, compared to 2023**.**

Current wording

Broadcasting Expenses. Broadcasting expenses (before depreciation, amortization, impairment and gain or loss on disposal of assets) decreased $78 million or 3%, to $2.2 billion. During the year ended December 31, 2025 compared to the year ended December 31, 2024:

Previous wording

Production Company Expenses. Production company expenses (before depreciation, amortization, impairment and gain or loss on disposal of assets) decreased by approximately $32 million in 2024 to $83 million, compared to $115 million in 2023. Production company operating expenses decreased in 2024 primarily due to significant expenses incurred in 2023, which did not re-occur in 2024.

Current wording

Production Company Expenses. Production company expenses (before depreciation, amortization, and gain or loss on disposal of assets) increased by approximately $12 million to $95 million for 2025, compared to $83 million in 2024. Production company operating expenses in 2025 increased primarily due to increases in property taxes at Assembly Atlanta and the non-recurring recovery from the Diamond Sports bankruptcy, which was recorded in 2024.

Previous wording

Corporate and administrative expenses. Corporate and administrative expenses (before depreciation, amortization, impairment and gain or loss on disposal of assets) decreased by $8 million, or 7%, to $104 million in 2024 compared to $112 million in 2023, primarily as a result of decreases in professional services costs. We recorded corporate non-cash stock-based compensation expense of $17 million and $15 million in 2024 and 2023, respectively.

Current wording

Corporate and Administrative Expenses. Corporate and administrative expenses (before depreciation, amortization and gain or loss on disposal of assets) increased by $9 million to $113 million in 2025 compared to 2024. During 2025, professional services increased by $7 million primarily related to our pending business combination transactions. Non-cash stock-based compensation expenses increased to $21 million in 2025 compared to $17 million in 2024.

Previous wording

Depreciation. Depreciation of property and equipment totaled $144 million and $145 million for 2024 and 2023, respectively.

Current wording

Depreciation. Depreciation of property and equipment totaled $133 million and $144 million in 2025 and 2024, respectively. Depreciation expenses have decreased as certain underlying assets become fully depreciated.

Previous wording

*Amortization of intangible assets.*Amortization of intangible assets totaled $125 million and $194 million for 2024 and 2023, respectively. Amortization decreased primarily due to finite-lived intangible assets becoming fully amortized.

Current wording

Amortization.Amortization of intangible assets totaled $104 million and $125 million in 2025 and the 2024, respectively. Amortization decreased primarily due to finite-lived intangible assets becoming fully amortized.

Previous wording

*Loss on Disposals of Assets, Net.*We recognized a loss on disposal of assets of $20 million in 2024 compared to a loss on disposal of assets of $21 million in 2023. The loss in 2024 was primarily related to the acquisition of a construction permit to build television station KCBU in exchange for the divestiture of television stations KCWY and KGWN in which we recognized a loss of $14 million. The loss in 2023 was primarily related to the sale of television station KNIN, in which we recognized a loss of $14 million in 2023.

Current wording

*(Gain) Loss on Disposal of Assets, Net.*We recognized a gain on disposal of assets of $11 million in 2025 compared to a loss on disposal of $20 million in 2024, primarily due to on the sale of easements and the assignment of leases at some of our television broadcast tower sites. The loss in 2024 was primarily related to the acquisition of a construction permit to build television station KCBU in exchange for the divestiture of television stations KCWY and KGWN in which we recognized a loss of $14 million.

Previous wording

Miscellaneous Income, Net. Miscellaneous income, net totaled $117 million and $7 million in 2024 and 2023, respectively. Miscellaneous income, net in 2024 was due primarily to a gain of $110 million from the sale of our investment in BMI.

Current wording

Miscellaneous (Expense) Income, Net. Miscellaneous expense, net totaled $1 million in 2025 compared to $117 million of miscellaneous income, net in 2024. Miscellaneous expense, net in 2025 was due to $8 million in various other miscellaneous expenses, offset primarily due to a gain of $7 million on the sale of our investment in Premion, Inc.. Miscellaneous income, net in 2024 was due primarily to a gain of $110 million from the sale of our investment in Broadcast Music, Inc.

Previous wording

*Impairment of Investments.*During 2024 and 2023, we wrote down the value of certain investments to their estimated net realizable values. The total impairment charges were $25 million and $29 million in 2024 and 2023, respectively.

Current wording

*Impairment of Investments.*During 2025 and 2024, we wrote down the value of certain investments to their estimated net realizable values. The total impairment charges were $20 million and $25 million in 2025 and 2024, respectively.

Previous wording

Gain (Loss) on Early Extinguishment of Debt. We recorded a gain on the early extinguishment of debt of $34 million in 2024, primarily as a result of our open-market repurchases of debt, partially offset by the write-off of deferred financing costs related to the open-market repurchases and expenses incurred related to our refinancing activities. We recorded a loss on the early extinguishment of debt of $3 million in 2023 related the write-off of deferred financing costs related to the partial repayment of a portion of our 2017 Term Loan.

Current wording

(Loss) Gain on Early Extinguishment of Debt. We recorded a loss on the early extinguishment of debt of $10 million in 2025, primarily due to the write-off of deferred financing costs related to the open-market repurchases and expenses incurred related to our refinancing activities. We recorded a gain on the early extinguishment of debt of $34 million in 2024, primarily as a result of our open-market repurchases of debt at prices below face value, partially offset by the write-off of deferred financing costs related to the open-market repurchases and expenses incurred related to our refinancing activities.

Previous wording

*Income Tax Expense.*Our effective income tax rate increased to a net provision of 24% for 2024 from 7% for 2023. Our effective income tax rates differed from the statutory rate due to the following items:

Current wording

*Income Tax (Benefit) Expense.*Our effective income tax rate increased to 25% for 2025 compared to 24% for 2024. Our effective income tax rates differed from the statutory rate due to the following items:

Previous wording

We file a consolidated federal income tax return and such state or local tax returns as are required based on our current forecasts. We estimate that these income tax payments, before deducting refunds, will be within a range of $80 million to $100 million in 2025.

Current wording

We file a consolidated federal income tax return and such state or local tax returns as are required based on our current forecasts. We estimate that these income tax payments, before deducting refunds, will be within a range of $105 million to $125 million in 2026.

Previous wording

General. Our primary sources of liquidity are cash on hand, cash flows from operations and borrowing capacity under our Revolving Credit Facility.

Current wording

General. Our primary sources of liquidity are cash on hand, cash flows from operations and borrowing capacity under our Revolving Credit Facility and revolving accounts receivable securitization facility.

Previous wording

2024 Refinancing and Debt Reduction Activities. During 2024 we completed several steps to enhance our liquidity, to extend the maturity of portions of our debt obligations that were scheduled to mature in the near future and to reduce the principal amount of our debt outstanding. Please refer to Note 4. “Long-Term Debt” for further information. During 2024, we:

Current wording

2025 Refinancing Activities. During 2025, we completed several steps to enhance our liquidity and to extend the maturity of portions of our debt obligations that were scheduled to mature in the near-term. Please refer to Note 4. “Long-Term Debt” for further information. During 2025, we:

Previous wording

We are a party to many contractual obligations involving commitments to make payments to third parties. These obligations impact our short-term and long-term liquidity and capital resource needs. Certain contractual obligations are reflected on the Consolidated Balance Sheet as of December 31, 2024, while others are considered future commitments. Our contractual obligations primarily consist of amounts required to be paid for: the acquisition of television stations; the purchase of property and equipment; service and other agreements; commitments for various syndicated television programs; and commitments under affiliation agreements with networks. In addition to our contractual obligations, we expect that our primary anticipated uses of liquidity in 2025 will be to reduce our indebtedness, fund our working capital, make interest and tax payments, fund capital expenditures, pursue certain strategic opportunities and maintain operations. For a description of the Company’s various contractual and other commitments requiring future payments, see Note 12 “Commitments and Contingencies” of our audited consolidated financial statements included elsewhere herein. In addition, for a description of the Company's interest payments and future maturities of long-term debt, see Note 4 “Long-term Debt” of our audited consolidated financial statements included elsewhere herein.

Current wording

We are a party to many contractual obligations involving commitments to make payments to third parties. These obligations impact our short-term and long-term liquidity and capital resource needs. Certain contractual obligations are reflected on the Consolidated Balance Sheet as of December 31, 2025, while others are considered future commitments. Our contractual obligations primarily consist of amounts required to be paid for: the acquisition of television stations; the purchase of property and equipment; service and other agreements; commitments for various television programming; and commitments under affiliation agreements with networks. In addition to our contractual obligations, we expect that our primary anticipated uses of liquidity in 2026 will be to reduce our indebtedness, fund our working capital, make interest and tax payments, fund capital expenditures, pursue certain strategic opportunities, maintain operations, and fund dividends. For a description of the Company’s various contractual and other commitments requiring future payments, see Note 12 “Commitments and Contingencies” of our audited consolidated financial statements included elsewhere herein. In addition, for a description of the Company's interest payments and future maturities of long-term debt, see Note 4 “Long-term Debt” of our audited consolidated financial statements included elsewhere herein.

Previous wording

Net cash provided by operating activities increased $103 million to $751 million in 2024 compared to net cash provided by operating activities of $648 million in 2023. The increase in cash provided by operating activities was primarily due to an increase in net income of $451 million; offset, in part, by a $144 million decrease in cash provided by changes in working capital; and a decrease in net non-cash charges of $204 million.

Current wording

Net cash provided by operating activities decreased $462 million to $289 million in 2025 compared to net cash provided by operating activities of $751 million in 2024. The decrease in cash provided by operating activities was primarily due to the decrease in net income of $460 million; a decrease in cash provided by changes in working capital of $89 million; and offset, in part, by a decrease in net non-cash charges of $87 million.

Previous wording

Net cash used in investing activities decreased $263 million to $28 million for 2024 compared to $291 million for 2023. The net decrease in the amount used was primarily due to a decrease in cash used for purchases of property and equipment and an increase in proceeds received from the sale of investments and other assets.

Current wording

Net cash used in investing activities increased $35 million to $63 million for 2025 compared to $28 million for 2024. The net increase in the amount used was primarily due to a decrease in cash proceeds received from the sale of investments and other assets, offset, in part, by a decrease in cash used for purchases of property.

Previous wording

Net cash used in financing activities increased $212 million to $609 million in 2024 compared to net cash used in financing activities of $397 million in 2023. During 2024 and 2023, we used $52 million of cash to pay dividends to holders of our preferred stock and $32 million and $30 million, respectively, to pay dividends to holders of our common stock. During 2024 and 2023, we used a net amount of $474 million and $310 million, respectively, for principal payments net of borrowings on our long-term debt.

Current wording

Net cash provided by financing activities was $7 million in 2025 compared to cash used by financing activities $609 million in 2024. During each of 2025 and 2024, we used $52 million of cash to pay dividends to holders of our preferred stock and $33 million and $32 million, respectively, to pay dividends to holders of our common stock. During 2025, we received net proceeds of $123 million of principal borrowings net of principal payments on our long-term debt. During 2024, we used a net amount of $474 million for principal payments net of borrowings on our long-term debt.

Previous wording

*Liquidity.*Based on our debt outstanding as of December 31, 2024, we estimate that we will make approximately $450 million in debt interest payments over the twelve months immediately following December 31, 2024. 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 Senior Credit Agreement (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 for the next twelve months and the forseeable future. 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 believe that our future cash expected to be generated from operations and borrowing availability under the Senior Credit Agreement (or any such other credit facility) will be sufficient to fund our future capital expenditures and long-term debt service obligations for the next twelve months and the forseeable future.

Current wording

*Liquidity.*Based on our debt outstanding as of December 31, 2025, we estimate that we will make approximately $450 million in debt interest payments over the twelve months immediately following December 31, 2025. 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 Senior Credit Agreement (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 for the next twelve months and the foreseeable future. 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 believe that our future cash expected to be generated from operations and borrowing availability under the Senior Credit Agreement (or any such other credit facility) will be sufficient to fund our future capital expenditures and long-term debt service obligations for the next twelve months and the foreseeable future.

Previous wording

Collateral, Covenants and Restrictions of our Credit Agreements. Our obligations under the Senior Credit Agreement and the 2029 Notes are secured by substantially all of our consolidated assets, excluding real estate. In addition, substantially all of our subsidiaries are joint and several guarantors of, and our ownership interests in those subsidiaries are pledged to collateralize, our obligations under the Senior Credit Agreement. Gray Media, Inc. is a holding company, and has no material independent assets or operations. For all applicable periods, the 2026 Notes, 2027 Notes, 2030 Notes and 2031 Notes have been fully and unconditionally guaranteed, on a joint and several, senior unsecured basis, by substantially all of Gray Media, Inc.’s subsidiaries. Any subsidiaries of Gray Media, Inc. that do not guarantee the 2026 Notes, 2027 Notes, 2030 Notes and 2031 Notes are not material or are designated as unrestricted under the Senior Credit Agreement. As of December 31, 2024, there were no significant restrictions on the ability of Gray Media, Inc.’s subsidiaries to distribute cash to Gray or to the guarantor subsidiaries.

Current wording

Collateral, Covenants and Restrictions of our Credit Agreements. Our obligations under the Senior Credit Agreement, the 2029 Notes (1L), the 2033 Notes (1L) and the 2032 Notes (2L) are secured by substantially all of our consolidated assets, excluding real estate. In addition, substantially all of our subsidiaries (subject to certain limited exceptions) are joint and several guarantors of, and our ownership interests in those subsidiaries are pledged to collateralize, our obligations under the Senior Credit Agreement, the 2029 Notes (1L), the 2033 Notes (1L) and the 2032 Notes (2L). Gray Media, Inc. is a holding company, and has no material independent assets or operations. For all applicable periods, the 2026 Notes, 2030 Notes and 2031 Notes have been fully and unconditionally guaranteed, on a joint and several, senior unsecured basis, by substantially all of Gray Media, Inc.'s subsidiaries (subject to certain limited exceptions). Any subsidiaries of Gray Media, Inc. that do not guarantee the 2026 Notes, 2030 Notes, 2031 Notes, the Senior Credit Agreement, the 2029 Notes (1L), the 2033 Notes (1L) and 2032 Notes (2L) are not material or are designated as unrestricted under the Senior Credit Agreement. As of December 31, 2025, there were no significant restrictions on our subsidiaries to distribute cash to us or the guarantor subsidiaries.

Previous wording

The Senior Credit Agreement 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 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, 2027 Notes, 2029 Notes, 2030 Notes and 2031 Notes include covenants with which we must comply which are typical for financing transactions of their nature. As of December 31, 2024, we were in compliance with all required covenants under all of our debt obligations.

Current wording

The Senior Credit Agreement 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 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, 2029 Notes (1L), 2030 Notes, 2031 Notes, 2032 Notes (2L) and 2033 Notes (1L) include covenants with which we must comply which are typical for financing transactions of their nature. As of December 31, 2025, we were in compliance with all required covenants under all of our debt obligations.

Previous wording

Leverage Ratio Denominator gives effect to the revenue and broadcast expenses of all completed acquisitions and divestitures as if they had been acquired or divested, respectively, on January 1, 2023. It also gives effect to certain operating synergies expected from the acquisitions and related financings, and adds back professional fees incurred in completing the acquisitions. Certain of the financial information related to the acquisitions, if applicable, has been derived from, and adjusted based on, unaudited, un-reviewed financial information prepared by other entities, which Gray cannot independently verify. We cannot assure you that such financial information would not be materially different if such information were audited or reviewed and no assurances can be provided as to the accuracy of such information, or that our actual results would not differ materially from this financial information if the acquisitions had been completed on the stated date. In addition, the presentation of Leverage Ratio Denominator as determined in the Senior Credit Agreement and the adjustments to such information, including expected synergies, if applicable, resulting from such transactions, may not comply with U.S. GAAP or the requirements for pro forma financial information under Regulation S-X under the Securities Act of 1933. Leverage Ratio Denominator, as determined in the Senior Credit Agreement, represents an average amount for the preceding eight quarters then ended.

Current wording

In addition to results prepared in accordance with GAAP, “Leverage Ratio Denominator” is a metric that management uses to calculate our compliance with our financial covenants in our indebtedness agreements. This metric is calculated as specified in our Senior Credit Agreement and is a significant measure that represents the denominator of a formula used to calculate compliance with material financial covenants within the Senior Credit Agreement that govern our ability to incur indebtedness, incur liens, make investments and make restricted payments, among other limitations usual and customary for credit agreements of this type. Accordingly, management believes this metric is a very material metric to our debt and equity investors. Leverage Ratio Denominator gives effect to the revenue and broadcast expenses of all completed acquisitions and divestitures as if they had been acquired or divested, respectively, on January 1, 2024. It also gives effect to certain operating synergies expected from the acquisitions and related financings and adds back professional fees incurred in completing the acquisitions. Certain of the financial information related to the acquisitions, if applicable, has been derived from, and adjusted based on, unaudited, un-reviewed financial information prepared by other entities, which Gray cannot independently verify. We cannot assure you that such financial information would not be materially different if such information were audited or reviewed and no assurances can be provided as to the accuracy of such information, or that our actual results would not differ materially from this financial information if the acquisitions had been completed on the stated date. In addition, the presentation of Leverage Ratio Denominator as determined in the Senior Credit Agreement and the adjustments to such information, including expected synergies, if applicable, resulting from such transactions, may not comply with GAAP or the requirements for pro forma financial information under Regulation S-X under the Securities Act of 1933. Leverage Ratio Denominator, as determined in the Senior Credit Agreement, represents an average amount for the preceding eight quarters then ended.

Previous wording

Our “Adjusted Total Indebtedness”, “First Lien Adjusted Total Indebtedness” and “Secured Adjusted Total Indebtedness”, in each case “Net of All Cash”, represents the amount of outstanding principal of our long-term debt, plus certain other obligations as defined in our Senior Credit Agreement, less all cash (excluding restricted cash) for the applicable amount of indebtedness.

Current wording

Our “First Lien Adjusted Total Indebtedness”, “Secured Adjusted Total Indebtedness” and “Adjusted Total Indebtedness” in each case net of all cash, represents the amount of outstanding principal of our long-term debt, plus certain other obligations as defined in our Senior Credit Agreement for the applicable amount of indebtedness.

Previous wording

We sponsor and contribute to defined benefit and defined contribution retirement plans. Effective on January 1, 2025, these plans were:

Current wording

We sponsor and contribute to defined benefit and defined contribution retirement plans. These plans include:

Previous wording

Our funding policy for the Gray Pension Plan is consistent with the funding requirements of existing federal laws and regulations under the Employee Retirement Income Security Act of 1974. A discount rate is selected annually to measure the present value of the benefit obligations. In determining the selection of a discount rate, we estimated the timing and amounts of expected future benefit payments and applied a yield curve developed to reflect yields available on high-quality bonds. The yield curve is based on an externally published index specifically designed to meet the criteria of United States Generally Accepted Accounting Principles (“U.S. GAAP”). The discount rate selected for determining benefit obligations as of December 31, 2024, was 5.48%, which reflects the results of this yield curve analysis. The discount rate used for determining benefit obligations as of December 31, 2023 was 4.79%. Our assumptions regarding expected return on plan assets reflects asset allocations, the investment strategy and the views of investment managers, as well as historical experience. In 2024, we used an assumed rate of return of 6.25% for our assets invested in the Gray Pension Plan. The estimated asset returns for this plan, calculated on a mean market value assuming mid-year contributions and benefit payments, were a gain of 0.7% for the year ended December 31, 2024, and a gain of 13.7% for the year ended December 31, 2023. Other significant assumptions relate to inflation, retirement and mortality rates. Our inflation assumption is based on an evaluation of external market indicators. Retirement rates are based on actual plan experience and mortality rates are based on the Pri-2012 total mortality table and the MP-2021 projection scale published by the Society of Actuaries.

Current wording

Our funding policy for the Gray Pension Plan is consistent with the funding requirements of existing federal laws and regulations under the Employee Retirement Income Security Act of 1974. A discount rate is selected annually to measure the present value of the benefit obligations. In determining the selection of a discount rate, we estimated the timing and amounts of expected future benefit payments and applied a yield curve developed to reflect yields available on high-quality bonds. The yield curve is based on an externally published index specifically designed to meet the criteria of United States Generally Accepted Accounting Principles (“U.S. GAAP”). The discount rate selected for determining benefit obligations as of December 31, 2025, was 5.40%, which reflects the results of this yield curve analysis. The discount rate used for determining benefit obligations as of December 31, 2024 was 5.48%. Our assumptions regarding expected return on plan assets reflect asset allocations, the investment strategy and the views of investment managers, as well as historical experience. In 2025, we used an assumed rate of return of 5.25% for our assets invested in the Gray Pension Plan. The estimated asset returns for this plan, calculated on a mean market value assuming mid-year contributions and benefit payments, were a gain of 6.8% for the year ended December 31, 2025, and a gain of 0.7% for the year ended December 31, 2024. Other significant assumptions relate to inflation, retirement and mortality rates. Our inflation assumption is based on an evaluation of external market indicators. Retirement rates are based on actual plan experience and mortality rates are based on the Pri-2012 total mortality table and the MP-2021 projection scale published by the Society of Actuaries.

Previous wording

During the year ended December 31, 2024, we determined that no contribution to the Gray Pension Plan was required. During the year ended December 31, 2023, we contributed $4 million to the Gray Pension Plan. Currently we do not expect that a contribution to the Gray Pension Plan will be needed in 2025. The use of significantly different assumptions, or if actual experienced results differ significantly from those assumed, could result in our funding obligations being materially different.

Current wording

During the years ended December 31, 2025 and 2024, we determined that no contributions to the Gray Pension Plan were required. Currently we do not expect that a contribution to the Gray Pension Plan will be needed in 2026. The use of significantly different assumptions, or if actual experienced results differ significantly from those assumed, could result in our funding obligations being materially different.

Previous wording

The Gray 401(k) Plan is a defined contribution plan intended to meet the requirements of section 401(k) of the Internal Revenue Code. During 2024 and 2023, employer contributions under the Gray 401(k) Plan include matching cash contributions at a rate of 100% of the first 1% of each employee’s salary deferral, and 50% of the next 5% of each employee’s salary deferral. In addition, the Company, at its discretion, may make an additional profit-sharing contribution, based on annual Company performance, to those employees who meet certain criteria. For the years ended December 31, 2024 and 2023, our matching contributions to our Capital Accumulation Plan were approximately $28 million and $26 million, respectively. An additional profit-sharing contribution was not approved for 2024. As of and for the year ended December 31, 2023, an additional profit-sharing contribution of $10 million was approved and accrued as a liability. This liability was settled in the first quarter of 2024 by the issuance of Gray common stock to the participants of the Gray 401(k) Plan.

Current wording

The Gray 401(k) Plan is a defined contribution plan intended to meet the requirements of section 401(k) of the Internal Revenue Code. During 2025 and 2024, employer contributions under the Gray 401(k) Plan include matching cash contributions at a rate of 100% of the first 1% of each employee’s salary deferral, and 50% of the next 5% of each employee’s salary deferral. In addition, the Company, at its discretion, may make an additional profit-sharing contribution, based on annual Company performance, to those employees who meet certain criteria. For the years ended December 31, 2025 and 2024, our matching contributions to our Capital Accumulation Plan were approximately $25 million and $28 million, respectively. Additional profit-sharing contributions were not approved for 2025 and 2024.

Previous wording

In connection with the Meredith Transaction, in 2021, we assumed a defined benefit pension plan covering certain legacy Meredith bargaining class employees. As of December 31, 2024 and 2023, the Meredith Plan had combined plan assets of $22 million and $16 million, respectively, and combined projected benefit obligations of $18 million and $11 million, respectively. A net asset of $4 million and $5 million for this plan are recorded in our financial statements as of December 31, 2024 and 2023, respectively.

Current wording

In connection with the Meredith Transaction, in 2021, we assumed a defined benefit pension plan covering certain legacy Meredith bargaining class employees. As of December 31, 2025 and 2024, the Meredith Plan had combined plan assets of $25 million and $22 million, respectively, and combined projected benefit obligations of $20 million and $18 million, respectively. A net asset of $5 million and $4 million for this plan are recorded in our financial statements as of December 31, 2025 and 2024, respectively.

Previous wording

We currently expect that our capital expenditures will range between approximately $85 million to $90 million during 2025, which includes capital expenditures at our Assembly Atlanta project. We incurred costs to build public infrastructure within the Assembly Atlanta project. Pursuant to our Purchase and Sale Agreement with the Doraville Community Improvement District (the “CID”), we receive cash reimbursements for the transfer of specific infrastructure projects to the CID and for other construction costs previously incurred. Consistent with previous practice, we anticipate transferring certain public infrastructure at Assembly Atlanta to the CID for which we anticipate receiving proceeds during 2025. We expect reimbursements of approximately $25 million in 2025 for work completed to date, and that our capital expenditures in 2025 will be less than the reimbursements we expect to receive. We can give no assurances of the actual proceeds to be received in the future from the CID, nor the timing of any such proceeds.

Current wording

We currently expect that our capital expenditures will be approximately $140 million during 2026, which includes several significant station construction projects and capital expenditures at our Assembly Atlanta project.

Previous wording

During 2024, we have experienced moderate inflation of our operating expenses and increases in interest rates on amounts outstanding under our Senior Credit Agreement. There can be no assurance that further increases in the rate of inflation or interest rates in the future would not have an adverse effect on operating results.

Current wording

During 2025, we have experienced moderate inflation in certain of our operating expenses. There can be no assurance that further increases in the rate of inflation or interest rates in the future would not have an adverse effect on operating results.

Previous wording

Our broadcasting operating segment is comprised of a single reporting unit. Each of the distinct businesses within our production companies operating segment represent a reporting unit. Therefore, as of December 31, 2024, we evaluated our goodwill for impairment for five reporting units. One reporting unit for all of our broadcast television operations and four for each of the distinct businesses within our production companies. The Company has considered the requirements as stipulated within ASC 350. Management has identified the applicable assets and liabilities for each of the reporting units in accordance with ASC 350.

Current wording

Our broadcasting operating segment comprises a single reporting unit. Each of the distinct businesses within our production companies operating segment represents a reporting unit. Therefore, as of December 31, 2025, we evaluated our goodwill for impairment for five reporting units. One reporting unit for all of our broadcast television operations and four for each of the distinct businesses within our production companies. The Company has considered the requirements as stipulated within ASC 350. Management has identified the applicable assets and liabilities for each of the reporting units in accordance with ASC 350.

Previous wording

In the performance of our annual broadcast license and reporting unit impairment assessments, we have the option of performing a qualitative assessment to determine if it is more likely than not that the respective asset has been impaired. In 2024, we performed a qualitative assessment for 56 of our broadcast licenses and three of our reporting units. In 2023, we performed a qualitative assessment for 59 of our broadcast licenses and one of our reporting units.

Current wording

In the performance of our annual broadcast license and reporting unit impairment assessments, we have the option of performing a qualitative assessment to determine if it is more likely than not that the respective asset has been impaired. In 2025, we performed a qualitative assessment for 74 of our broadcast licenses and three of our reporting units. In 2024, we performed a qualitative assessment for 56 of our broadcast licenses and three of our reporting units.

Previous wording

For our annual broadcast licenses impairment test in 2024, we concluded that it was more likely than not that all of our broadcast licenses that were evaluated were not impaired based upon our qualitative assessments. We elected to perform a quantitative assessment for our remaining broadcast licenses and concluded that their fair values exceeded their carrying values. To estimate the fair value of our broadcast licenses, we considered assumptions related to historical market and station growth trends, third party market specific industry data, the anticipated performance of the stations and discount rates. Our valuation technique included theoretical assumptions of the costs that would be incurred to construct a station when the only owned asset is the broadcast license and theoretical assumptions for the associated revenues, operating margins and capital expenditures expected to be incurred in the start-up years. We also consider other relevant factors such as the technical qualities of the broadcast license and the number of competing broadcast licenses within that market.

Current wording

For our annual broadcast licenses impairment test in 2025, we concluded that it was more likely than not that all of our broadcast licenses that were evaluated through a qualitative assessment were not impaired. We elected to perform a quantitative assessment for our remaining broadcast licenses. Except for one broadcast license, we concluded that their fair values exceeded their carrying values. For the one broadcast license whose fair value did not exceed its carrying value, we recorded an impairment charge of $2 million in 2025. To estimate the fair value of our broadcast licenses, we considered assumptions related to historical market and station growth trends, third party market specific industry data, the anticipated performance of the stations and discount rates. Our valuation technique included theoretical assumptions of the costs that would be incurred to construct a station when the only owned asset is the broadcast license and theoretical assumptions for the associated revenues, operating margins and capital expenditures expected to be incurred in the start-up years. We also consider other relevant factors such as the technical qualities of the broadcast license and the number of competing broadcast licenses within that market.

Previous wording

The methodology we used to value our stations was based on our evaluation of the broadcast licenses acquired and the characteristics of the markets in which they operated. Given our assumptions and the specific attributes of the stations we acquired from 2002 through December 31, 2024, we generally ascribe no incremental value to the incumbent network affiliation relationship in each market beyond the cost of negotiating a new agreement with another network and the value of any terms of the affiliation agreement that were more favorable or unfavorable than those generally prevailing in the market. Due to certain characteristics of a small number of the stations acquired in 2023, we ascribed approximately $14 million of the value of those transactions to network affiliations.

Current wording

The methodology we used to value our stations was based on our evaluation of the broadcast licenses acquired and the characteristics of the markets in which they operated. Given our assumptions and the specific attributes of the stations we acquired from 2002 through 2025, we generally ascribe no incremental value to the incumbent network affiliation relationship in each market beyond the cost of negotiating a new agreement with another network and the value of any terms of the affiliation agreement that were more favorable or unfavorable than those generally prevailing in the market. Due to certain characteristics of the small number of the stations acquired in 2023, we ascribed approximately $14 million of the value of those transactions to network affiliations.