Note 11 - Retirement Plans

12 Months Ended

Dec. 31, 2025

Notes to Financial Statements

Retirement Benefits [Text Block]

11. Retirement Plans

We sponsor and have historically contributed to defined benefit and defined contribution retirement plans. The Gray Media, Inc. Retirement Plan (“the Gray Pension Plan”) is a defined benefit pension plan. Benefits under the Gray Pension Plan are frozen and can no longer increase, and no new participants can be added to the Gray Pension Plan.

The Gray Pension Plan’s funding policy is consistent with the funding requirements of existing federal laws and regulations under the Employee Retirement Income Security Act of 1974. The measurement dates used to determine the benefit information for the Gray Pension Plan were December 31, 2025 and 2024, respectively.

On April 25, 2025, the Gray Pension Plan purchased a non-participating single premium group annuity contract for $18 million from American United Life Insurance Company, a OneAmerica Financial Company. The contract assumes the obligation to provide monthly annuity payments for a subset of the plan’s retirees beginning July 1, 2025. On September 1, 2025, the Gray Pension Plan paid out $15 million in lump sum payments to terminated participants with a vested benefit. On November 1, 2025, the Gray Pension Plan converted the Group Annuity Contract with Aetna from participating to non-participating for $7 million. Following the change in contract, Aetna assumes the obligation to pay all future monthly annuity payments to a subset of current retirees in the plan. The Gray Pension Plan was amended to allow for these transactions. We have no further liability for participants who received lump sum payments or will receive future monthly annuities under the Group Annuity Contract with Aetna. OneAmerica Financial Company and Aetna are not related parties to Gray Media, Inc.

The following summarizes the Gray Pension Plan’s funded status and amounts recognized on our consolidated balance sheets at December 31, 2025 and 2024, respectively (in millions):

	As of December 31,
	2025			2024
Change in projected benefit obligation:
Projected benefit obligation at beginning of year	$	96		$	104
Interest cost		5			4
Actuarial (gain) loss		1			(7	)
Benefits paid		(4	)		(5	)
Effect of pension settlement		(41	)		-
Projected benefit obligation at end of year	$	57		$	96
Change in plan assets:
Fair value of pension plan assets at beginning of year	$	112		$	117
Actual return on plan assets		6			-
Benefits paid		(4	)		(5	)
Effect of pension settlement		(41	)		-
Fair value of pension plan assets at end of year		73			112
Funded status of pension plan	$	16		$	16
Amounts recognized on our balance sheets consist of:
Accrued benefit cost	$	24		$	28
Accumulated other comprehensive loss		(8	)		(12	)
Net asset recognized	$	16		$	16

Because the Gray Pension Plan is a frozen plan, the projected benefit obligation and the accumulated benefit obligation are the same. The accumulated benefit obligation was $57 million and $96 million at December 31, 2025 and 2024, respectively. The long-term rate of return on assets assumption was chosen from a best estimate range based upon the anticipated long-term returns for asset categories in which the Gray Pension Plan is invested. An estimate of the rate of increase in compensation levels used to calculate the net periodic benefit cost is not required because of the Plan’s frozen status:

	Year Ended December 31,
	2025			2024
Weighted-average assumptions used to determine net periodic benefit cost for the Gray Pension Plan:
Discount rate		5.48%/5.27%/5.40	%		4.79	%
Expected long-term rate of return on pension plan assets		5.25	%		6.25	%
Estimated rate of increase in compensation levels		N/A			N/A

The plan was remeasured to reflect settlement accounting as of September 30, 2025, and as of December 31, 2025. The discount rates used in the remeasurements were 5.27% and 5.40%, respectively, to reflect market conditions at the time of remeasurement. The discount rate of 5.48% was the discount rate prior to the remeasurements.

	As of December 31,
	2025			2024
Weighted-average assumptions used to determine benefit obligations:
Discount rate		5.40	%		5.48	%

Pension expense is computed using the projected unit credit actuarial cost method. The net periodic pension cost for the Gray Pension Plan includes the following components (in millions):

	Year Ended December 31,
	2025			2024			2023
Components of net periodic pension cost:
Interest cost	$	5		$	4		$	5
Expected return on plan assets		(5	)		(7	)		(7	)
Pension settlement fees		4			-			-
Net periodic pension benefit	$	(4	)	$	(3	)	$	(2	)

For the Gray Pension Plan, the estimated future benefit payments are as follows (in millions):

Years			Amount
2026			$	3
2027			$	3
2028			$	3
2029			$	3
2030			$	4
2031	-	2035	$	19

The Gray Pension Plan’s weighted-average asset allocations by asset category were as follows:

	As of December 31,
	2025			2024
Asset category:
Insurance general account		0	%		13	%
Cash management accounts		19	%		3	%
Fixed income accounts		81	%		84	%
Total		100	%		100	%

The investment objective is to maintain an adequate degree of liquidity to ensure the payment from existing Gray Pension Plan assets and attempt to match the investment portfolios to the liabilities of the Gray Pension Plan. Investments will be made in liquid fixed income products and investments.

Fair Value of Gray Pension Plan Assets. We calculate the fair value of the Gray Pension Plan’s assets based upon the observable and unobservable net asset value of its underlying investments. We utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized by the fair value hierarchy proscribed by ASU Topic 820, described in Note 5 “Fair Value Measurement.”

The following table presents the fair value of the Gray Pension Plan’s assets and classifies them by level within the fair value hierarchy as of December 31, 2025 and 2024 (in millions):

	As of December 31, 2025
	Level 1		Level 2		Level 3		Total
Assets:
Cash management accounts	$	14	$	-	$	-	$	14
Fixed income accounts		59		-		-		59
Total	$	73	$	-	$	-	$	73

	As of December 31, 2024
	Level 1		Level 2		Level 3		Total
Assets:
Insurance general account	$	-	$	14	$	-	$	14
Cash management accounts		4		-		-		4
Fixed income account		94		-		-		94
Total	$	98	$	14	$	-	$	112

Expected Pension Contributions. We do not expect to make a contribution to our frozen defined benefit pension plan during the year ending December 31, 2026.

401(k) Savings Plan. The Gray 401(k) Plan is a defined contribution plan intended to meet the requirements of Section 401(k) of the Internal Revenue Code. In 2025, employer contributions under The Gray 401(k) Plan include matching cash contributions at a rate of 100% of the first 3% of each employee’s salary deferral, and 50% of the next 2% of each employee’s salary deferral. For the years ended December 31, 2025, 2024 and 2023, our matching contributions to The Gray 401(k) Plan were $25 million, $28 million and $26 million, respectively. We estimate that our matching cash contributions to The Gray 401(k) Plan for 2026 will be approximately $25 million.

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, we did not record a profit-sharing contribution. For the year ended December 31, 2023, we accrued a contribution of approximately $10 million, as a discretionary profit-sharing contribution. This discretionary profit-sharing contribution was subsequently made in the form of shares of our common stock. We may also make matching and discretionary contributions of our common stock under The Gray 401(k) Plan. As of December 31, 2025, we had 10 million shares of common stock reserved for issuance under this plan.

Meredith Plan. In connection with the acquisition of the Meredith Corporation (“Meredith”), on December 1, 2021, we assumed a defined benefit pension plan covering certain legacy Meredith bargaining class employees. At December 31, 2025, this plan had combined plan assets of $25 million and combined projected benefit obligations of $20 million. The net asset for this plan is recorded in other assets in our consolidated balance sheets as of December 31, 2025 and 2024.