Gray Media Announces First Quarter Financial Results
Rhea-AI Summary
Gray Media (NYSE: GTN) reported Q1 2026 results: Total revenue $768 million (at high end of guidance). Core advertising was $352 million (+2% YoY)/b); Net retransmission revenue was
AI-generated analysis. Not financial advice.
Positive
- Total revenue $768 million (at high end of guidance)
- Core advertising revenue $352 million, +2% year‑over‑year
- Added stations in ten markets via $195 million of acquisitions
- Cash of $259 million and $745 million revolver availability
Negative
- Net retransmission revenue $142 million, down 3% year‑over‑year
- Total revenue declined 2% versus prior year quarter
- Adjusted EBITDA $154 million, down 4% year‑over‑year
- Leverage Ratio at 5.94 to 1.00 as of March 31, 2026
- Corporate expenses $39 million, above prior guidance range
News Market Reaction – GTN
On the day this news was published, GTN declined 20.07%, reflecting a significant negative market reaction. Argus tracked a trough of -24.6% from its starting point during tracking. Our momentum scanner triggered 27 alerts that day, indicating elevated trading interest and price volatility. This price movement removed approximately $143M from the company's valuation, bringing the market cap to $568.38M at that time. Trading volume was elevated at 2.7x the daily average, suggesting increased selling activity.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Market Reality Check
Peers on Argus
GTN was up 0.91% while several broadcasting peers listed are down (e.g., SSP -1.2%, SBGI -1.13%, FUBO -12.08%), and momentum scans show only one peer moving lower, indicating a stock-specific reaction to earnings.
Previous Earnings Reports
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Feb 26 | Q4 2025 earnings | Positive | +23.8% | Q4 2025 revenue and EBITDA exceeded guidance and refinanced debt extended maturities. |
| Nov 07 | Q3 2025 earnings | Positive | +4.8% | Q3 2025 results at or above guidance plus major refinancing and strategic transactions. |
| Aug 08 | Q2 2025 earnings | Negative | -0.2% | Q2 2025 revenue decline and swing to net loss despite refinancing actions. |
| Jul 08 | Q2 2025 guidance | Negative | +10.4% | Lowered Q2 2025 outlook and expected impairment alongside debt management steps. |
| May 08 | Q1 2025 earnings | Negative | +16.9% | Q1 2025 revenue and EBITDA declines with net loss versus prior‑year profit. |
Earnings releases often produce sizable moves, with prior upside beats driving strong rallies and even weaker quarters sometimes seeing positive reactions, suggesting investors focus on guidance and balance sheet progress.
Recent earnings-related news for Gray Media shows a focus on meeting or exceeding guidance, managing leverage, and executing strategic transactions. Q4 2025 results beat guidance with $792M revenue and $179M Adjusted EBITDA, prompting a strong 23.79% move. Earlier 2025 quarters showed year-over-year revenue declines and net losses but still produced double‑digit swings around updates and guidance. This Q1 2026 release, with solid core advertising, weaker retransmission, and leverage metrics disclosed, continues that pattern of earnings updates being key trading catalysts.
Historical Comparison
In the past year, GTN’s 5 earnings-related releases saw an average move of 11.13%. Today’s 0.91% change on Q1 2026 results was comparatively muted versus prior earnings volatility.
Across recent earnings cycles, Gray Media has balanced softer year-over-year revenues and net losses with guidance beats, refinancing to push maturities beyond 2028, and incremental acquisitions, positioning Q1 2026 as another step in that leverage-management and political-cycle build-up narrative.
Market Pulse Summary
The stock dropped -20.1% in the session following this news. A negative reaction despite elements of solid guidance would fit GTN’s history of sharp swings on earnings updates. Q1 2026 showed lower total revenue of $768M and a wider net loss of $20M, alongside reduced retransmission revenue and sizeable debt of $5,808M. Yet liquidity, including $259M cash and revolver capacity, and higher political advertising guidance could temper longer-term conclusions if sentiment later refocuses on the 2026 election cycle.
Key Terms
net retransmission revenue financial
revolving credit facility financial
accounts receivable securitization facility financial
senior secured first lien notes financial
senior secured second lien notes financial
first lien term loans financial
leverage ratio financial
non-GAAP financial
AI-generated analysis. Not financial advice.
ATLANTA, May 07, 2026 (GLOBE NEWSWIRE) -- Gray Media (NYSE: GTN) today announced its financial results for the first quarter that ended March 31, 2026.
EXECUTIVE COMMENTARY
Hilton Howell, Jr., Executive Chairman and CEO, commented, “Our first quarter 2026 results were solid, with Core Advertising exceeding our guidance and Political revenue at the high end of our guidance range. A recently resolved dispute with a distribution partner impacted our Net Retransmission Revenue for the quarter. With all scheduled 2026 retransmission negotiations now complete and the improvement in underlying MVPD subscriber trends, we now have visibility on our growth in Net Retransmission Revenue for full year 2026. While we are seeing some softness in core advertising in Q2, we are optimistic that, as the largest owner of top-rated local television stations and a footprint covering most of the competitive races, we will again capitalize on a strong mid-term political cycle.
“We were thrilled to have added new stations in four new markets during the first quarter. A few days ago, we closed a transaction involving stations located in seven markets and yesterday closed on additional stations located in three markets. We continue to work to close the remaining strategic, deleveraging transactions announced last summer. As our industry transforms, we continue to find creative ways to drive shareholder value without taking on undue risk. We are strengthening our market position through innovative sports partnerships – including airing 19 MLB teams across our 16 broadcast sports networks this year – while continuing to focus on the balance sheet, evaluating accretive M&A opportunities, and attracting the best and brightest talent to Gray.”
FINANCIAL HIGHLIGHTS:
- Total Revenue –
$768 million in the first quarter of 2026, which was at the high end of our previously issued guidance of$755 million to$770 million . - Core Advertising Revenue –
$352 million in the first quarter of 2026, a2% increase, on both a reported and organic basis, compared to the first quarter of 2025, which exceeded our previously issued guidance of revenues being approximately flat with first quarter 2025. - Retransmission Consent Revenue –
$339 million in the first quarter of 2026, compared to$379 million for the first quarter of 2025 due primarily to continued subscriber declines, the transition of one Atlanta station to independent status, and a recently resolved dispute with a distribution partner. Net Retransmission Revenue of$142 million decreased3% in the first quarter of 2026, compared to$146 million in the first quarter of 2025. - Political Advertising Revenue –
$30 million in the first quarter of 2026, a15% reported and organic increase compared to$26 million in first quarter of 2022, which was at the high end our previously issued guidance of$25 million to$30 million . - Operating Expenses – Total broadcasting expenses of
$555 million , a$22 million decrease, or4% , in the first quarter of 2026, compared to first quarter of 2025, which was at the low end of our previously issued expense guidance of$555 million to$560 million . Corporate expenses of$39 million were above the high end of the$30 million to$35 million guidance range primarily due to transaction-related expenses. - Capital Expenditures – Capital expenditures were
$19 million in the first quarter of 2026 compared to$15 million during the first quarter of 2025.
| Selected Operating Data (Unaudited) | ||||||||||
| Three Months Ended | ||||||||||
| March 31, | ||||||||||
| 2026 | 2025 | % Change | ||||||||
| (dollars in millions) | ||||||||||
| Revenue (less agency commissions): | ||||||||||
| Core advertising | $ | 352 | $ | 344 | 2 | % | ||||
| Political advertising | 30 | 13 | 131 | % | ||||||
| Retransmission consent | 339 | 379 | (11 | )% | ||||||
| Other | 18 | 19 | (5 | )% | ||||||
| Total broadcasting revenue | 739 | 755 | (2 | )% | ||||||
| Production companies | 29 | 27 | 7 | % | ||||||
| Total revenue | $ | 768 | $ | 782 | (2 | )% | ||||
| Net retransmission revenue (1): | ||||||||||
| Retransmission consent revenue | $ | 339 | $ | 379 | (11 | )% | ||||
| Less, broadcasting network affiliation fees | 197 | 233 | (15 | )% | ||||||
| Net retransmission revenue | $ | 142 | $ | 146 | (3 | )% | ||||
| Operating expenses (2): | ||||||||||
| Broadcasting: | ||||||||||
| Station expenses | $ | 358 | $ | 343 | 4 | % | ||||
| Network affiliation fees | 197 | 233 | (15 | )% | ||||||
| Non-cash stock-based compensation | - | 1 | (100 | )% | ||||||
| Total broadcasting expense | $ | 555 | $ | 577 | (4 | )% | ||||
| Production companies | $ | 28 | $ | 20 | 40 | % | ||||
| Corporate and administrative: | ||||||||||
| Corporate expenses | $ | 27 | $ | 26 | 4 | % | ||||
| Transaction Related Expenses | 4 | - | N/A | |||||||
| Non-cash stock-based compensation | 8 | 6 | 33 | % | ||||||
| Total corporate and administrative expense | $ | 39 | $ | 32 | 22 | % | ||||
| Net loss | $ | (20 | ) | $ | (9 | ) | 122 | % | ||
| Adjusted EBITDA (2) | $ | 154 | $ | 160 | (4 | )% | ||||
| (1) | See definition of non-GAAP terms included herein. |
| (2) | Excludes depreciation, amortization, impairment and (gain) loss on disposal of assets, net. |
FINANCIAL POSITION AND LEVERAGE
Debt Summary - The table below summarizes our debt principal and cash balances:
| March 31, | December 31, | ||||||
| 2026 | 2025 | ||||||
| (in millions) | |||||||
| Outstanding principal of debt obligations (1): | |||||||
| First lien term loans | $ | 749 | $ | 749 | |||
| Senior secured first lien notes | 1,900 | 1,900 | |||||
| Senior secured second lien notes | 1,150 | 1,150 | |||||
| Senior unsecured notes | 2,009 | 2,011 | |||||
| Total outstanding principal of debt obligations | 5,808 | 5,810 | |||||
| Less cash | (259 | ) | (368 | ) | |||
| Total outstanding principal of debt obligations, less cash | $ | 5,549 | $ | 5,442 | |||
| (1) | Excludes letters of credit, accounts receivable securitization facility and preferred stock. |
Recent Financing Activities
- Credit Agreement Amendment – On March 31, 2026, we amended and restated our senior credit agreement to update and enhance the legal framework. The commitments under the revolving credit facility, the principal amounts of the term loans, and the stated maturities remained unchanged at closing. No new borrowings were incurred with the amendment.
- Repayment of the 2026 Notes – On January 20, 2026, we redeemed the remaining balance of
$2 million on the5.875% senior notes due in 2026. - Repayment of Term Loan – On April 2, 2026, we settled the remaining balance of
$10 million on the 2024 1L Term Loan, which was originally scheduled to mature in June 2029. Our next debt maturity is in December 2028, after the next presidential election cycle.
Leverage Metrics - As of March 31, 2026, calculated as set forth in our Senior Credit Agreement (unaudited): - First Lien Leverage Ratio 2.56 to 1.00
- Secured Leverage Ratio 3.79 to 1.00
- Leverage Ratio 5.94 to 1.00
Liquidity - As of March 31, 2026:
Cash –
- Borrowing availability under our
$750 million undrawn Revolving Credit Facility -$745 million (reflecting only certain outstanding undrawn letters of credit) - Accounts receivable securitization facility of
$400 million was fully drawn
Other Noteworthy Events
- On May 1, 2026, we acquired television stations in seven markets from Allen Media Group for
$115 million . - On May 6, 2026, we acquired television stations in three markets from Block Communications, Inc. for
$80 million .
Guidance for the Quarter Ending June 30, 2026:
Based on our current forecasts for the quarter ending June 30, 2026, we anticipate the following key financial results, as outlined below in approximate ranges and as compared to the three months ended June 30, 2026, as well as certain currently anticipated full-year financial results. Our guidance includes estimated results for television station WBBJ and the stations acquired in the Allen 3 acquisition that were closed in the first quarter, and it does not include estimates for any of the stations acquired in the Allen 7 acquisition, Block acquisition or the announced and not yet completed transactions.
As always, guidance may change in the future based on several factors and therefore may not reflect future actual results.
| Three Months Ended June 30, | |||||||||||
| 2025 | 2026 (Guidance) | ||||||||||
| (Unaudited) | Low | High | |||||||||
| (in millions) | |||||||||||
| Revenue (less agency commissions): | |||||||||||
| Core advertising | $ | 361 | Down mid-single digits | ||||||||
| Political advertising | $ | 9 | $ | 60 | $ | 70 | |||||
| Total revenue | $ | 772 | $ | 780 | $ | 800 | |||||
| Net Retransmission Revenue | $ | 136 | $ | 141 | $ | 143 | |||||
| Operating expenses (excluding depreciation, amortization and loss on disposal of assets): | |||||||||||
| Total broadcasting expense | $ | 563 | $ | 545 | $ | 550 | |||||
| Total corporate and administrative expense | $ | 25 | $ | 30 | $ | 35 | |||||
| Year Ending | ||
| December 31, | ||
| 2026 | ||
| Estimated supplemental information (in millions) | (Guidance) | |
| Interest expense, excluding amortization of deferred financing costs | $ | 440 |
| Amortization of deferred financing costs | $ | 16 |
| Preferred stock dividends | $ | 52 |
| Common stock dividends | $ | 33 |
| Capital expenditures | $ | 140 |
| Income tax payments, excluding refunds | $ | 90 to |
The Company
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 120 full-power television markets that collectively reach approximately
Cautionary Statements for Purposes of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act
This press release contains certain forward-looking statements that are based largely on our current expectations and reflect various estimates and assumptions by us. These statements are statements other than those of historical fact and may be identified by words such as “estimates,” “expect,” “anticipate,” “will,” “implied,” “assume” and similar expressions. Forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual results and achievements to differ materially from those expressed in such forward-looking statements. Such risks, trends and uncertainties, which in some instances are beyond our control, include: the inability to achieve estimates of future revenue, expenses, capital expenditures, and income tax payments, the inability to complete the pending acquisitions within the expected timeframes, or at all, including as a result of the failure to obtain necessary FCC or other regulatory approvals, and other future events. We are subject to additional risks and uncertainties described in our quarterly and annual reports filed with the Securities and Exchange Commission from time to time, including in the “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections contained therein, which reports are made publicly available via our website, www.graymedia.com. Any forward-looking statements in this press release should be evaluated in light of these important risk factors. This press release reflects management’s views as of the date hereof. Except to the extent required by applicable law, Gray undertakes no obligation to update or revise any information contained in this press release beyond the published date, whether as a result of new information, future events or otherwise. Information about certain potential factors that could affect our business and financial results and cause actual results to differ materially from those expressed or implied in any forward-looking statements are included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the year ended December 31, 2025, and may be contained in reports subsequently filed with the U.S. Securities and Exchange Commission and available at www.sec.gov.
Conference Call Information
Gray Media, Inc. will host a conference call to discuss its operating results for the quarter ended March 31, 2026, on Thursday, May 7, 2026. The call will begin at 11:00 a.m. Eastern Time. The live dial-in number is 1-800-715-9871 or 1-646-307-1963 conference ID 3663076. The call will be webcast live and available for replay at www.graymedia.com. The taped replay of the conference call will be available at 1-800-770-2030 using conference ID 3663076# until June 7, 2026.
Gray Contacts:
Web site: www.graymedia.com
Alan Gould, Vice President, Investor Relations, (404) 266-8333, alan.gould@graymedia.com
| GRAY MEDIA, INC. | |||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) | |||||||
| (in millions) | |||||||
| March 31, | December 31, | ||||||
| 2026 | 2025 | ||||||
| Assets: | |||||||
| Current assets: | |||||||
| Cash | $ | 259 | $ | 368 | |||
| Accounts receivable, net | 178 | 205 | |||||
| Current portion of program broadcast rights, net | 11 | 17 | |||||
| Income tax refunds receivable | 1 | 6 | |||||
| Prepaid income taxes | 43 | 35 | |||||
| Prepaid and other current assets | 31 | 25 | |||||
| Total current assets | 523 | 656 | |||||
| Property and equipment, net | 1,504 | 1,509 | |||||
| Operating lease right of use asset | 64 | 66 | |||||
| Broadcast licenses | 5,368 | 5,309 | |||||
| Goodwill | 2,651 | 2,642 | |||||
| Other intangible assets, net | 128 | 157 | |||||
| Investment in broadcasting and technology companies | 32 | 37 | |||||
| Deferred pension assets | 21 | 21 | |||||
| Other | 28 | 43 | |||||
| Total assets | $ | 10,319 | $ | 10,440 | |||
| Liabilities and stockholders’ equity: | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 130 | $ | 144 | |||
| Employee compensation and benefits | 82 | 103 | |||||
| Accrued interest | 103 | 151 | |||||
| Other accrued expenses | 60 | 47 | |||||
| Federal and state income taxes | 5 | 5 | |||||
| Current portion of program broadcast obligations | 11 | 18 | |||||
| Deferred revenue | 21 | 20 | |||||
| Dividends payable | 15 | 16 | |||||
| Current portion of operating lease liabilities | 10 | 10 | |||||
| Current portion of long-term debt | - | 2 | |||||
| Total current liabilities | 437 | 516 | |||||
| Long-term debt, less current portion and deferred financing costs | 5,746 | 5,742 | |||||
| Deferred income taxes | 1,300 | 1,300 | |||||
| Operating lease liabilities, less current portion | 57 | 59 | |||||
| Other | 16 | 18 | |||||
| Total liabilities | 7,556 | 7,635 | |||||
| Series A Perpetual Preferred Stock, no par value; cumulative; redeemable; designated 1,500,000 shares, issued and outstanding 650,000 shares at each date and | 650 | 650 | |||||
| Stockholders’ equity: | |||||||
| Common Stock, no par value; authorized 200,000,000 shares, issued 115,042,050 shares and 113,779,383 shares, outstanding 92,912,582 shares and 92,444,984 shares, respectively | 1,214 | 1,210 | |||||
| Class A Common Stock, no par value; authorized 25,000,000 shares, issued 12,978,335 shares and 12,198,808 shares, outstanding 9,869,307 shares and 9,557,830 shares, respectively | 71 | 67 | |||||
| Retained Earnings | 1,164 | 1,205 | |||||
| Accumulated other comprehensive loss, net of income tax | (4 | ) | (4 | ) | |||
| 2,445 | 2,478 | ||||||
| Treasury Stock at cost, Common Stock, 22,129,468 shares and 21,334,399 shares, respectively | (292 | ) | (288 | ) | |||
| Treasury Stock at cost, Class A Common Stock, 3,109,028 shares and 2,640,978 shares, respectively | (40 | ) | (35 | ) | |||
| Total stockholders’ equity | 2,113 | 2,155 | |||||
| Total liabilities and stockholders’ equity | $ | 10,319 | $ | 10,440 | |||
| Gray Media, Inc. | |||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | |||||||
| (in millions except for net income per common share data) | |||||||
| Three Months Ended | |||||||
| March 31, | |||||||
| 2026 | 2025 | ||||||
| Revenue (less agency commissions): | |||||||
| Broadcasting | $ | 739 | $ | 755 | |||
| Production companies | 29 | 27 | |||||
| Total revenue (less agency commissions) | 768 | 782 | |||||
| Operating expenses before depreciation, amortization, | |||||||
| and loss on disposal of assets, net: | |||||||
| Broadcasting | 555 | 577 | |||||
| Production companies | 28 | 20 | |||||
| Corporate and administrative | 39 | 32 | |||||
| Depreciation | 33 | 34 | |||||
| Amortization of intangible assets | 32 | 29 | |||||
| Gain on disposal of assets, net | - | (2 | ) | ||||
| Operating expenses | 687 | 690 | |||||
| Operating income | 81 | 92 | |||||
| Other income (expense): | |||||||
| Miscellaneous income, net | 8 | 1 | |||||
| Interest expense | (117 | ) | (118 | ) | |||
| Gain on early extinguishment of debt | - | 1 | |||||
| Loss before income tax | (28 | ) | (24 | ) | |||
| Income tax benefit | (8 | ) | (15 | ) | |||
| Net loss | (20 | ) | (9 | ) | |||
| Preferred stock dividends | 13 | 13 | |||||
| Net loss attributable to common stockholders | $ | (33 | ) | $ | (22 | ) | |
| Basic per share information: | |||||||
| Net loss attributable to common stockholders | $ | (0.34 | ) | $ | (0.23 | ) | |
| Weighted-average common shares outstanding | 97 | 96 | |||||
| Diluted per share information: | |||||||
| Net loss attributable to common stockholders | $ | (0.34 | ) | $ | (0.23 | ) | |
| Weighted-average common shares outstanding | 97 | 96 | |||||
| GRAY MEDIA, INC. | |||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
| (in millions) | |||||||
| Three Months Ended | |||||||
| March 31, | |||||||
| 2026 | 2025 | ||||||
| Cash flows from operating activities: | |||||||
| Net loss | $ | (20 | ) | $ | (9 | ) | |
| Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
| Depreciation | 33 | 34 | |||||
| Amortization of intangible assets | 32 | 29 | |||||
| Amortization of deferred loan costs | 4 | 4 | |||||
| Stock-based compensation | 8 | 7 | |||||
| Amortization of program broadcast rights | 6 | 6 | |||||
| Payments on program broadcast obligations | (7 | ) | (7 | ) | |||
| Deferred income taxes | - | (16 | ) | ||||
| Gain on disposal of property and equipment, net | - | (3 | ) | ||||
| (Gain) loss on sale of investments | (8 | ) | 1 | ||||
| (Gain) on early extinguishment of debt | - | (1 | ) | ||||
| Other | 1 | 4 | |||||
| Changes in operating assets and liabilities, net of acquisitions: | |||||||
| Accounts receivable, net | 29 | 139 | |||||
| Income tax receivable or prepaid | (3 | ) | 1 | ||||
| Other current assets | (5 | ) | (13 | ) | |||
| Accounts payable | (14 | ) | (4 | ) | |||
| Employee compensation, benefits and pension costs | (22 | ) | (36 | ) | |||
| Accrued other expenses | 14 | 17 | |||||
| Accrued interest | (48 | ) | (14 | ) | |||
| Income taxes payable | - | 1 | |||||
| Deferred revenue | 1 | (8 | ) | ||||
| Net cash provided by operating activities | 1 | 132 | |||||
| Cash flows from investing activities: | |||||||
| Acquisitions of businesses and broadcast licenses, net of cash acquired | (68 | ) | (1 | ) | |||
| Purchases of property and equipment | (19 | ) | (15 | ) | |||
| Proceeds from asset sales | - | 10 | |||||
| Proceeds from sale of investments | 10 | 1 | |||||
| Investments in broadcast, production and technology companies | - | (8 | ) | ||||
| Other | - | (2 | ) | ||||
| Net cash used in investing activities | (77 | ) | (15 | ) | |||
| Cash flows from financing activities: | |||||||
| Proceeds from borrowings on long-term debt | - | 129 | |||||
| Repayments of borrowings on long-term debt | (2 | ) | (146 | ) | |||
| Payments of common stock dividends | (9 | ) | (8 | ) | |||
| Payments of preferred stock dividends | (13 | ) | (13 | ) | |||
| Payments for taxes related to net share settlement of equity awards | (9 | ) | (4 | ) | |||
| Net cash used in financing activities | (33 | ) | (42 | ) | |||
| Net (decrease) increase in cash | (109 | ) | 75 | ||||
| Cash at beginning of period | 368 | 135 | |||||
| Cash at end of period | $ | 259 | $ | 210 | |||
Non-GAAP Terms
This earnings release includes certain non-GAAP financial measures, such as “Adjusted EBITDA” and “Net Retransmission Revenue.” We present these measures, in addition to results prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), because management believes they are useful in evaluating the performance of the business. Adjusted EBITDA is calculated as net income (loss), adjusted for income tax expense (benefit), interest expense, gain or loss on extinguishment of debt, non-cash stock-based compensation costs, non-cash 401(k) expense, depreciation, amortization of intangible assets, impairment of goodwill and other intangible assets, impairment of investments, loss (gain) on asset disposals and certain other miscellaneous items. Net Retransmission Revenue is calculated as retransmission consent revenue less broadcasting network affiliation fees. See “Selected Operating Data” above for a reconciliation of Net Retransmission Revenue to the most comperable GAAP metric. We consider Adjusted EBITDA and Net Retransmission Revenue to be indicators of our operating performance.
In addition to results prepared in accordance with GAAP, “Leverage Ratio Denominator” is a metric that management uses to calculate our compliance with certain 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 certain 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 may be useful to investors to understand how we assess compliance with our Senior Credit Agreement. 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 April 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 various transactions. Certain 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 completeness or 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, and should not be relied upon as indicative of future results. Leverage Ratio Denominator, as determined in the Senior Credit Agreement, represents an average amount for the preceding eight quarters then ended.
Specified Transaction Costs and Expenses are defined in our Senior Credit Agreement 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, to enhance the comparability of our operating expenses and results of operations across periods.
Our “Consolidated First Lien Net Debt”, “Consolidated Secured Net Debt” and “Consolidated Total Net Debt” in each case presented 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.
These non-GAAP measures are not defined by GAAP, and our definitions may differ from, and therefore may not be comparable to, similarly titled measures used by other companies, thereby limiting their usefulness. Such measures are used by management in addition to, and in conjunction with, results presented in accordance with GAAP and should be considered as supplements to, and not as substitutes for, net income and cash flows reported in accordance with GAAP.
| Reconciliation of Adjusted EBITDA (Unaudited): | |||||||
| Three Months Ended | |||||||
| March 31, | |||||||
| 2026 | 2025 | ||||||
| (in millions) | |||||||
| Net loss | $ | (20 | ) | $ | (9 | ) | |
| Adjustments to reconcile from net loss to Adjusted EBITDA | |||||||
| Depreciation | 33 | 34 | |||||
| Amortization of intangible assets | 32 | 29 | |||||
| Non-cash stock-based compensation | 8 | 7 | |||||
| Gain on disposal of assets, net | - | (2 | ) | ||||
| Miscellaneous income, net | (8 | ) | (1 | ) | |||
| Interest expense | 117 | 118 | |||||
| Gain on early extinguishment of debt | - | (1 | ) | ||||
| Income tax benefit | (8 | ) | (15 | ) | |||
| Adjusted EBITDA | $ | 154 | $ | 160 | |||
| Supplemental Information: | |||||||
| Amortization of deferred loan costs | $ | 4 | $ | 4 | |||
| Preferred stock dividends | $ | 13 | $ | 13 | |||
| Common stock dividends | $ | 8 | $ | 8 | |||
| Purchases of property and equipment | $ | 19 | $ | 15 | |||
| Calculation of Consolidated Total Net Leverage Ratio, Consolidated First Lien Net Leverage Ratio and Consolidated Secured Net Leverage Ratio, as each is defined in our Senior Credit Agreement (Unaudited): | |||
| Eight Quarters Ended | |||
| March 31, 2026 | |||
| (in millions) | |||
| Net income | $ | 183 | |
| Adjustments to reconcile from net income to Leverage Ratio | |||
| Denominator as defined in our 2019 Senior Credit Facility: | |||
| Depreciation | 274 | ||
| Amortization of intangible assets | 230 | ||
| Non-cash stock-based compensation | 46 | ||
| Non-cash 401(k) expense | - | ||
| Loss on disposal of assets, net | - | ||
| Gain on disposal of investment, not in the ordinary course | 2 | ||
| Interest expense | 961 | ||
| Gain on early extinguishment of debt | (24 | ) | |
| Income tax expense | 50 | ||
| Impairment of investments, goodwill and other intangible assets | 74 | ||
| Amortization of program broadcast rights | 55 | ||
| Payments for program broadcast rights | (55 | ) | |
| Pension expense | 2 | ||
| Contributions to pension plans | - | ||
| Adjustments for unrestricted subsidiaries | 37 | ||
| Adjustments for stations acquired or divested, financings and expected synergies during the eight quarter period | 25 | ||
| Specified Transaction Costs and Expenses | 10 | ||
| Total eight quarters ended March 31, 2026 | $ | 1,870 | |
| Leverage Ratio Denominator(total eight quarters ended March 31, 2026, divided by 2) | $ | 935 | |
| March 31, 2026 | |||
| (dollars in millions) | |||
| Total outstanding principal secured by a first lien | $ | 2,649 | |
| Cash | (259 | ) | |
| Consolidated First Lien Net Debt | $ | 2,390 | |
| Consolidated First Lien Net Leverage Ratio(maximum permitted incurrence is 3.5 to 1.00) (1) | 2.56 | ||
| Total outstanding principal secured by a lien | $ | 3,805 | |
| Cash | (259 | ) | |
| Consolidated Secured Net Debt | $ | 3,546 | |
| Consolidated Secured Net Leverage Ratio(maximum permitted incurrence is 5.50 to 1.00) (2) | 3.79 | ||
| Total outstanding principal, including current portion | $ | 5,809 | |
| Letters of credit outstanding | 5 | ||
| Cash | (259 | ) | |
| Consolidated Total Net Debt | $ | 5,555 | |
| Consolidated Total Net Leverage Ratio(maximum permitted incurrence is 7.00 to 1.00) | 5.94 | ||
| (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 our | |||
