Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

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

Executive Overview

Introduction. The following discussion and analysis of the financial condition and results of operations of Gray Media, Inc. and its consolidated subsidiaries (except as the context otherwise provides, "Gray Media," "Gray," the "Company," "we," "us" or "our") should 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, 2025 (the "2025 Form 10-K") filed with the SEC.

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 117 television markets that collectively reach approximately 37% of US television households. The portfolio includes 78 markets with the top-rated television station and 101 markets with the first and/or second highest rated television station in average all-day ratings across the 116 of such markets that were measured by Nielsen in 2025. We also own the largest Telemundo Affiliate group with 46 markets and 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.

Our operating revenues are derived primarily from broadcasting 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 nine-months ended September 30, 2026 and 2025, we generated revenue of $2.6 billion and $2.3 billion, respectively.

Revenues, Operations, Cyclicality and Seasonality. Broadcast advertising is sold for placement generally preceding or following a television station's network programming and within local and syndicated programming. Broadcast advertising is sold in time increments and is priced primarily on the basis of a program's popularity among the specific audience an advertiser desires to reach. In addition, broadcast advertising rates are affected by the number of advertisers competing for the available time, the size and demographic makeup of the market served by the station and the availability of alternative advertising media in the 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.

We also sell digital advertising on our stations' websites and mobile apps. These advertisements may be sold as banner advertisements, video advertisements and other types of advertisements or sponsorships.

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

●	Spending by political candidates, political parties and special interest groups increases during the even-numbered "on-year" of the two-year election cycle. This political spending typically is heaviest during the fourth quarter of such years;

●	Broadcast advertising revenue is generally highest in the second and fourth quarters each year. This seasonality results partly from increases in advertising in the spring and in the period leading up to and including the holiday season;

●	Core advertising revenue on our NBC-affiliated stations increases in certain years as a result of broadcasts of the Olympic Games; and

●	Because our stations and markets are not evenly divided among the Big Four broadcast networks, our local and national advertising revenue can fluctuate between years related to which network broadcasts the Super Bowl.

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 nine-months ended September 30, 2026 and 2025, approximately 27% and 26%, respectively, of our broadcast advertising revenue (excluding political advertising revenue) was obtained from advertising sales to the services sector. During both the nine-months ended September 30, 2026 and 2025, approximately 17% 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.

Our primary broadcasting operating 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 operating expenses of our broadcasting operations is fixed. We continue to monitor our operating expenses and 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.

Revenue

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

		Three Months Ended September 30,																Nine Months Ended September 30,
		2026								2025								2026								2025
						Percent								Percent								Percent								Percent
		Amount				of Total				Amount				of Total				Amount				of Total				Amount				of Total
Revenue:
Core advertising		$	358				37	%		$	355				47	%		$	1,067				41	%		$	1,060				46	%
Political			198				20	%			8				1	%			311				12	%			30				1	%
Retransmission consent			366				38	%			346				46	%			1,064				41	%			1,094				48	%
Production companies			34				3	%			25				3	%			89				3	%			70				3	%
Other			16				2	%			15				3	%			48				3	%			49				2	%
Total		$	972				100	%		$	749				100	%		$	2,579				100	%		$	2,303				100	%

Results of Operations

As described in Note 3, "Acquisitions and Divestitures" within the accompanying condensed consolidated financial statements, during the nine-months ended September 30, 2026, we acquired stations from Bahakel Communications, Ltd., Allen Media Group, Block Communications, Inc., Sagamore Hill Broadcasting, Inc., and American Spirit Media, LLC (collectively, the "2026 Acquisitions") and swapped stations with The E. W. Scripps Company.

Three Months Ended September 30, 2026 ("the 2026 three-month period") Compared to Three Months Ended September 30, 2025 ("the 2025 three-month period")

Revenue. Total revenue increased by $223 million, or 30% in the 2026 three-month period. The 2026 Acquisitions contributed $66 million of the increase in total revenue. During the 2026 three-month period:

●	Core advertising revenue increased by $3 million or 1%, primarily resulting from the 2026 Acquisitions, which contributed $24 million of core advertising revenue, offset, in part by macro-economic softness.

●	Consistent with 2026 being the "on-year" of the two-year election cycle, political advertising revenue increased by $190 million. The 2026 Acquisitions contributed $4 million of political advertising revenue.

●

Retransmission consent revenue increased by $20 million or 6%. The 2026 Acquisitions contributed $37 million of retransmission consent revenue. The net decrease in retransmission consent revenue, after adjusting for the 2026 Acquisitions, was due to a decrease in subscribers and the transition of one television station to independent status on August 15, 2025, offset, in part, by an increase in rates.

●	Production company revenue increased by $9 million, or 36%, in the 2026 three-month period due to increases in the sports production contracts.

Broadcasting Expenses. Broadcasting expenses (before depreciation, amortization and gains on disposal of long-lived assets) increased $54 million, or 10%, to $596 million in the 2026 three-month period. The 2026 Acquisitions contributed $52 million of broadcasting expenses. During the 2026 three-month period:

●	Broadcasting total payroll expenses and related benefits increased by $26 million, primarily as a result of increases in staffing from the 2026 Acquisitions.

●	Broadcasting non-payroll expenses increased by $29 million primarily due to the various expense increases 2026 Acquisitions and an increase in software license expenses and professional services expenses.

Production Company Expenses. Production company operating expenses (before depreciation, amortization and gain on disposal of long-lived assets) increased by $7 million, or 32%, in the 2026 three-month period due to increases in payroll expenses, contract labor and property taxes.

Corporate and Administrative Expenses. Corporate and administrative expenses (before depreciation, amortization and gain or loss on disposal of assets) increased by $3 million, or 11%, to $31 million during the 2026 three-month period primarily due to increases in payroll expenses, software license expenses and transaction-related professional services. Non-cash stock-based compensation expenses were $3 million and $5 million in the 2026 three-month period and the 2025 three-month period, respectively.

Depreciation. Depreciation of property and equipment totaled $34 million and $33 million in the 2026 three-month period and the 2025 three-month period, respectively. Depreciation expenses have increased due to the 2026 Acquisitions, offset in part by property and equipment that became fully depreciated.

Amortization. Amortization of intangible assets totaled $16 million and $23 million in the 2026 three-month period and 2025 three-month period, respectively. The decrease in amortization expense was the result of finite-lived intangible assets becoming fully amortized, offset, in part, by additional amortization from recently acquired stations.

(Gain) Loss on Disposal of Long-Lived Assets, Net. Disposals of long-lived assets were less than $1 million for the 2026 three-month period. Gain on disposal of long-lived assets was $1 million in the 2025 three-month period, primarily resulting from the sale of easements and the assignment of leases at some of our television broadcast tower sites.

Miscellaneous Expense, Net. Miscellaneous expense, net was less than $1 million for the 2026 three-month period. For the 2025 three-month period, miscellaneous expense, net was $3 million. In the 2025 three-month period, the Gray Pension Plan entered into an annuity contract that assumed the obligation to provide monthly annuity payments for a subset of the plan's retirees beginning July 1, 2025. As a result, the plan was remeasured as of September 30, 2025, and we recorded a settlement charge of $4 million in the three-month period of 2025.

Interest Expense. Interest expense decreased by $2 million to $118 million in the 2026 three-month period compared to $120 million in the 2025 three-month period primarily due to our refinancing transactions, offset by interest rate changes on our term loan.

Loss from Early Extinguishment of Debt. During the 2026 three-month period, we recorded a loss of $40 million primarily as a result of the issuance of our 2034 1L Notes and the partial repayment of our 2029 1L Notes. During the 2025 three-month period, we recorded a loss of $7 million primarily as a result of the issuance of our 2032 Notes (2L) and 2033 Notes (1L), the repayment of our 2027 Notes and the repayment of portions of our 2024 and 2021 Term Loans during the quarter.

Income Tax Expense (Benefit). We recognized an income tax expense of $30 million in the 2026 three-month period and income tax benefit of $18 million in the 2025 three-month period. Our effective income tax expense rate was 28% in the 2026 three-month period and income tax benefit rate was 64% in the 2025 three-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 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. See Note 10, "Income Taxes" within the accompanying condensed consolidated financial statements for a reconciliation of our effective income tax rate.

Nine-Months Ended September 30, 2026 ("the 2026 nine-month period") Compared to Nine-Months Ended September 30, 2025 ("the 2025 nine-month period")

Revenue. Total revenue increased by $276 million, or 12%, in the 2026 nine-month period from the 2025 nine-month period. The 2026 Acquisitions contributed $110 million of the increase in total revenue. During the 2026 nine-month period:

●

Core advertising revenue increased by $7 million or 1%, due to the 2026 Acquisitions, which contributed $40 million of additional advertising revenue, offset, in part, by macro-economic softness. We recorded advertising revenue of $10 million from the broadcast of the Super Bowl on our 54 NBC and 47 Telemundo channels in the 2026 nine-month period, compared to an aggregate of $9 million of advertising revenue relating to the broadcast of the Super Bowl on our 27 FOX channels during the 2025 nine-month period.

●

Consistent with 2026 being the "on-year" of the two-year political advertising cycle, political advertising revenue increased by $281 million, compared to the 2025 nine-month period. The 2026 Acquisitions contributed $8 million of additional political advertising revenue during the 2026 nine-month period.

●

Retransmission consent revenue decreased by $30 million or 3%, due to the net effect of a decrease in subscriptions, the transition of one station to independent status on August 15, 2025, as well as a distribution dispute with a satellite television company removing our stations from its platform from March 2026 through May 1, 2026, offset, in part, by an increase in rates. The 2026 Acquisitions contributed $60 million of additional retransmission revenue during the 2026 nine-month period.

●	Production company revenue increased by $19 million, or 27%, compared to the 2025 nine-month period, due to increases in the sports productions contracts.

Broadcasting Expenses. Broadcasting expenses (before depreciation, amortization, impairment and gain or loss on disposal of assets) increased $38 million or 2%, to $1.7 billion. The 2026 Acquisitions contributed $84 million to broadcasting expenses. During the 2026 nine-month period:

●

Broadcasting payroll expenses increased by $55 million, or 8%, compared to the 2025 nine-month period, due to the 2026 Acquisitions, as well as recurring, routine compensation changes and increased costs of employee healthcare benefits. There was no non-cash stock-based compensation for our broadcasting segment for the 2026 nine-month period. Non-cash stock-based compensation was $1 million for the 2025 nine-month period.

●

Broadcasting non-payroll expenses decreased by $17 million, or 2%, compared to the 2025 nine-month period, primarily due to a decrease in network affiliation fees, offset by an increase in software license expenses, professional services expenses and increases in various expenses due to the 2026 Acquisitions. Network affiliation fees decreased $59 million primarily due to the transition of one of our station to independent status on August 15, 2025.

Production Company Expenses. Production company expenses (before depreciation, amortization, and gain or loss on disposal of assets) increased by approximately $17 million to $79 million in the 2026 nine-month period, compared to $62 million in the 2025 nine-month period. Production company operating expenses in the 2026 nine-month period increased primarily due to increases in payroll expenses, contract labor, property taxes and equipment rental expense related to an increase in sports production.

Corporate and Administrative Expenses. Corporate and administrative expenses (before depreciation, amortization and gain or loss on disposal of assets) increased by $22 million to $107 million in the 2026 nine-month period. During the 2026 nine-month period, corporate and administrative expenses increased primarily due to transaction-related professional services expenses. Non-cash stock-based compensation expenses was $14 million in the 2026 nine-month period compared to $16 million in the 2025 nine-month period.

Depreciation. Depreciation of property and equipment totaled $101 million and $99 million in the 2026 nine-month period and the 2025 nine-month period, respectively. Depreciation expense increased during the 2026 nine-month period due to property and equipment acquired both to support our existing stations as well as those acquired through recent acquisitions, offset by assets becoming fully depreciated.

Amortization. Amortization of intangible assets totaled $69 million and $80 million in the 2026 nine-month period and the 2025 nine-month period, respectively. Amortization decreased during the 2026 nine-month period primarily due to finite-lived intangible assets becoming fully amortized, offset, in part, by additional amortization related to recently acquired stations.

Impairment of Intangible Assets. There was no impairment of intangible assets during the 2026 nine-month period. During the 2025 nine-month period, we recorded a non-cash impairment charge of $28 million related to the changes to the network affiliation at one station.

Loss (Gain) on Disposal of Long-Lived Assets, Net. We recognized a loss on disposal of assets of $20 million in the 2026 nine-month period primarily due to our recognition of a non-cash loss on disposal of $22 million upon completion of the Station Swap as described in Note 3, "Acquisitions and Divestitures" within the accompanying condensed consolidated financial statements, offset, in part, by the recognition of gains on other disposals. The gain in the 2025 nine-month period was primarily on the sale of easements and the assignment of leases at some of our television broadcast tower sites.

Miscellaneous (Expense) Income, Net. Miscellaneous income, net totaled $8 million in the 2026 nine-month period due to a gain of $8 million from the sale of an investment. In the 2025 nine-month period, miscellaneous expense, net totaled $2 million primarily due to the Gray Pension Plan entering into an annuity contract that assumed the obligation to provide monthly annuity payments for a subset of the plan's retirees beginning July 1, 2025. As a result, the plan was remeasured as of September 30, 2025, and we recorded a settlement charge of $4 million in the 2025 nine-month period, offset, in part, by other miscellaneous income.

Interest Expense. Interest expense decreased $3 million, or 1%, to $352 million for the 2026 nine-month period compared to the 2025 nine-month period, primarily due to our refinancing transactions, offset by interest rate changes on our term loan.

Loss from Early Extinguishment of Debt. The actions taken in our 2026 refinancing activities have resulted in a total net loss on early extinguishment of debt of $40 million in the 2026 nine-month period primarily as a result of the issuance of our 2034 1L Notes and the repayment of portions of our 2029 1L Notes. The actions taken in our 2025 refinancing activities have resulted in a total net loss on early extinguishment of debt of $6 million in the 2025 nine-month period primarily as a result of the issuance of our 2032 2L Notes and 2033 1L Notes, the repayment of our 2027 Notes and the repayment of portions of our term loans during the 2025 nine-month period.

Income Tax Expense (Benefit). We recognized an income tax expense of $27 million and an income tax benefit of $12 million in the 2026 nine-month period and the 2025 nine-month period, respectively. Our effective income tax expense rate was 27% in the 2026 nine-month period. Our effective income tax benefit rate was 14% in the 2025 nine-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 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. See Note 10, "Income Taxes" within the accompanying condensed consolidated financial statements for a reconciliation of our effective income tax rate.

Liquidity and Capital Resources

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

		Nine Months Ended September 30,
		2026				2025
Net cash provided by operating activities		$	258			$	177
Net cash used in investing activities			(372	)			(34	)
Net cash used in financing activities			(100	)			(96	)
Net (decrease) increase in cash		$	(214	)		$	47

		As of
		September 30, 2026				December 31, 2025
Cash		$	154			$	368
Long-term debt, including current portion, less deferred financing costs		$	5,764			$	5,744
Series A Perpetual Preferred Stock		$	600			$	650
Revolving Credit Facility:
Revolving Credit Facility commitment		$	750			$	750
Undrawn outstanding letters of credit			(5	)			(5	)
Borrowing availability under Revolving Credit Facility		$	745			$	745

As of September 30, 2026, our Securitization Facility (as defined in Note 1, "Basis of Presentation" within the accompanying condensed consolidated financial statements) had capacity of $379 million and it was fully drawn as of that date.

On October 8, 2026, we amended our 2019 Senior Credit Facility to, among other things, decrease the commitments under our revolving credit facility to $680 million, from $750 million and extend the maturity date from December 1, 2028 to July 15, 2030. See Note 15, "Subsequent Events" within the accompanying condensed consolidated financial statements.

On November 5, 2026, we amended our Securitization Facility to, among other things, (i) add an additional $50 million uncommitted tranche available to the SPV (as defined in Note 1, "Basis of Presentation" within the accompanying condensed consolidated financial statements), (ii) extend the scheduled termination date thereunder to November 5, 2029, (iii) reduce the drawn pricing margin from 1.25% to 1.15%, (iv) join certain parties as additional purchasers and (v) modify the concentration limits of certain obligor groups. See Note 15, "Subsequent Events" within the accompanying condensed financial statements.

Net Cash Provided By (Used In) Operating, Investing and Financing Activities. Net cash provided by operating activities was $258 million in the 2026 nine-month period compared to $177 million in the 2025 nine-month period. The $81 million increase in net cash provided by operating activities in the 2026 nine-month period compared to the 2025 nine-month period was due to a $147 million increase in net income, a $43 million increase in non-cash operating activities, offset, in part, by $109 million used by working capital.

Net cash used in investing activities was $372 million in the 2026 nine-month period compared to $34 million for the 2025 nine-month period. The net increase in cash used was largely due to the 2026 Acquisitions and the purchase of property and equipment.

Net cash used in financing activities was $100 million in the 2026 nine-month period compared to net cash used in financing activities of $96 million in the 2025 nine-month period. Proceeds and repayments on long-term debt during the 2026 nine-month period and the 2025 nine-month period were due to our 2026 and 2025 refinancing and repayment activities. During the 2026 nine-month period and 2025 nine-month period, proceeds from borrowings on long-term debt were $940 million and $1,855 million, respectively. During the 2026 and 2025 nine-month periods, repayments on borrowings on long-term debt were $928 million and $1,858 million, respectively. During both the 2026 nine-month period and 2025 nine-month period, we used $39 million of cash to pay dividends to holders of our preferred stock. During the 2026 nine-month period and 2025 nine-month period, we used $25 million and $24 million to pay dividends to holders of our common stock, respectively. During the 2026 nine-month period, we used $30 million of cash to repurchase 50,000 shares of our Series A Perpetual Preferred Stock having an aggregate liquidation preference of $50 million.

Liquidity. Based on current interest rates and debt outstanding, including refinancing activities described in Note 15, "Subsequent Events" within the accompanying condensed consolidated financial statements, we estimate that we will make approximately $430 million in debt interest payments over the twelve months immediately following September 30, 2026.

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 2019 Senior Credit Facility (or any such other credit facility as may be in place at the appropriate time) and, potentially, external equity or debt financing, will be sufficient to fund any debt service obligations, estimated capital expenditures and acquisition-related obligations 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 2019 Senior Credit Facility (or any such other credit facility) will be sufficient to fund our future capital expenditures and long-term debt service obligations for the next twelve months and the foreseeable future.

Subsequent Events. For more information on transactions that occurred after September 30, 2026, see Note 15, "Subsequent Events" within the accompanying condensed consolidated financial statements.

Collateral, Covenants and Restrictions of our Credit Agreements. Our obligations under our 2019 Senior Credit Facility, the 2029 1L Notes, the 2033 1L Notes, the 2034 1L Notes and the 2032 2L Notes 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 those same obligations. We are a holding company, and have no material independent assets or operations. For all applicable periods, the senior unsecured 2030 Notes and 2031 Notes have been fully and unconditionally guaranteed, on a joint and several, senior unsecured basis, by substantially all of our subsidiaries (subject to certain limited exceptions). Any subsidiaries that do not guarantee the our secured and unsecured obligations are not material or are designated as unrestricted under our 2019 Senior Credit Facility. As of September 30, 2026, there were no significant restrictions on our subsidiaries to distribute cash to us or the guarantor subsidiaries.

Our 2019 Senior Credit Facility contains affirmative and restrictive covenants with which we must comply, including: (a) limitations on additional indebtedness, (b) limitations on liens, (c) limitations on 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 other fundamental changes and (h) maintenance of a first lien net leverage ratio not to exceed certain maximum limits in the event revolving loans are outstanding under the revolving credit facility or more than $50 million of undrawn letters of credit are outstanding that have not been cash collateralized as of the last day of the applicable fiscal quarter, as well as other customary covenants for credit facilities of this type. Our secured and unsecured debt obligations include covenants with which we must comply which are typical for financing transactions of their nature. As of September 30, 2026 and December 31, 2025, we were in compliance with all required covenants under all of our debt obligations.

In addition to results prepared in accordance with U.S. 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 2019 Senior Credit Facility and is a significant measure that represents the denominator of a formula used to calculate compliance with material financial covenants within our 2019 Senior Credit Facility that govern our ability to incur indebtedness, incur liens, make investments and make restricted payments, among other usual and customary limitations for credit agreements of this type. Accordingly, management believes this metric is a 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 October 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 our 2019 Senior Credit Facility 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 our 2019 Senior Credit Facility, represents an average amount for the preceding eight quarters then ended.

"Specified Transaction Costs and Expenses" are defined in our 2019 Senior Credit Facility and include incremental expenses incurred specific to acquisitions and divestitures, including but not limited to legal and professional fees, severance and incentive compensation, and contract termination fees. We present certain line items from our selected operating data, net of transaction related expenses, in order to present a more meaningful comparison between periods of our operating expenses and our results of operations. Our "Capitalized Lease Obligations" are defined in our 2019 Senior Credit Facility and include certain leases accounted for as finance leases in accordance with U.S. GAAP.

Our "Consolidated First Lien Net Debt," "Consolidated Secured Net Debt" and "Consolidated Total Net Debt," in each case, net of all cash, represent the amount of outstanding principal of our long-term debt, plus certain other obligations as defined in our 2019 Senior Credit Facility for the applicable amount of indebtedness.

Below is a calculation of our "Leverage Ratio Denominator" "Consolidated First Lien Net Leverage Ratio," "Consolidated Secured Net Leverage Ratio" and "Consolidated Total Net Leverage Ratio," each as defined in our 2019 Senior Credit Facility as of September 30, 2026:

		Eight Quarters Ended
		September 30, 2026
		(in millions)
Net income		$	156
Adjustments to reconcile from net income to Leverage Ratio Denominator as defined in our 2019 Senior Credit Facility:
Depreciation			270
Amortization of intangible assets			204
Non-cash stock-based compensation			40
Loss on disposal of assets, net			6
Interest expense			948
Loss on early extinguishment of debt			15
Income tax expense			47
Impairment of investments, goodwill and other intangible assets			74
Amortization of program broadcast rights			55
Payments for program broadcast rights			(55	)
Pension expense			3
Adjustments for unrestricted subsidiaries			43
Adjustments for stations acquired or divested, financings and expected synergies during the eight quarter period			161
Specified Transaction Costs and Expenses			22
Other			2
Total eight quarters ended September 30, 2026		$	1,991
Leverage Ratio Denominator (total eight quarters ended September 30, 2026, divided by 2)		$	996

		September 30, 2026
		(dollars in millions)
Total outstanding principal secured by a first lien		$	2,684
Cash			(154	)
Consolidated First Lien Net Debt		$	2,530
Consolidated First Lien Net Leverage Ratio
(maximum permitted incurrence is 3.50 to 1.00) (1)			2.54
Total outstanding principal secured by a lien		$	3,834
Letters of credit and Capitalized Lease Obligations			6
Cash			(154	)
Consolidated Secured Net Debt		$	3,686
Consolidated Secured Net Leverage Ratio
(maximum permitted incurrence is 5.50 to 1.00) (2)			3.70
Total outstanding principal, including current portion		$	5,822
Letters of credit and Capitalized Lease Obligations			6
Cash			(154	)
Consolidated Total Net Debt		$	5,674
Consolidated Total Net Leverage Ratio
(maximum permitted incurrence is 7.00 to 1.00)			5.70

(1) At any time any amounts are outstanding under our revolving credit facility, our maximum Consolidated First Lien Net Leverage Ratio cannot exceed 4.25 to 1.00.

(2) For the 2032 2L Notes the maximum permitted Second Lien incurrence is 4.5 to 1.00.

Capital Expenditures. We currently expect that our routine capital expenditures will be approximately $45 million for the remainder of 2026, which includes several significant station construction projects and capital expenditures at Assembly Atlanta. Required public infrastructure investment at Assembly Atlanta is substantially complete, and future reimbursements of public infrastructure costs, if any, are expected to be not material.

Other. We file a consolidated federal income tax return and such state and local tax returns as are required. During the 2026 three-month period and nine-month period, we made $18 million and $60 million of federal or state income tax payments, respectively. For the remainder of 2026, we currently expect to make income tax payments of approximately $20 million. As of December 31, 2025, we have an aggregate of approximately $258 million of various state operating loss carryforwards, of which we expect that approximately $162 million will not be utilized due to Section 382 limitations under the Internal Revenue Code and those that will expire prior to utilization. After applying our state effective tax rate, this amount is included in our valuation allowance for deferred tax assets.

During the 2026 nine-month period, we did not make a contribution to our defined benefit pension plan. During the remainder of 2026, we do not expect to contribute to this pension plan.

Critical Accounting Policies

The preparation of financial statements in conformity with U.S. GAAP requires management to make judgments and estimations that affect the amounts reported in the financial statements and accompanying notes. Actual results 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 2025 Form 10-K.

Cautionary Note Regarding Forward-Looking Statements

This quarterly report on Form 10-Q (the "Quarterly Report") contains and incorporates by reference "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 Exchange Act. 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. These forward-looking statements reflect our then-current expectations and are based upon data available to us at the time the statements are made. Forward-looking statements may relate to, among other things, our strategies, expected results of operations, general and industry-specific economic conditions, future pension plan contributions, future capital expenditures, future income tax payments, future payments of interest and principal on our long-term debt, assumptions underlying various estimates and estimates of future obligations and commitments, and should be considered in context with the various other disclosures made by us about our business. Readers are cautioned that any forward-looking statements, including those regarding the intent, belief or current expectations of our management, are not guarantees of future performance, results or events and involve significant risks and uncertainties, and that actual results and events may differ materially from those contained in the forward-looking statements as a result of various factors including, but not limited to, those listed in Item 1A. of our 2025 Form 10-K and the other factors described from time to time in our SEC filings. The forward-looking statements included in this Quarterly Report are made only as of the date hereof. We undertake no obligation to update such forward-looking statements to reflect subsequent events or circumstances.