Good day and welcome to the Nextstar Media Group's fourth quarter 2025 conference call. Today's call is being recorded. I will now turn the conference over to Joe Giaffoni, Investor Relations. Please go ahead, sir.

Thank you, Rochelle, and good morning, everyone. Let me read the Safe Harbor language and then we'll get right into the call. All statements and comments made by management during this conference call, other than statements of historical fact, may be deemed forward-looking statements for purposes of the Private Security Litigation Reform Act of 1995. NEXTAR cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those reflected by the forward-looking statements made during today's call. For additional details on these risks and uncertainties, please see NEXTAR's annual report on Form 10-K for the year-ended December 31, 2024, as filed with the U.S. Securities and Exchange Commission and NEXTAR's subsequent public filings with the SEC. NEXTAR undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. It's now my pleasure to turn the conference over to our, your host, Nexstar Founder, Chairman, and Chief Executive Officer, Perry Sook. Perry, please go ahead.

Thank you, Joseph, and good morning, everyone. Thank you for joining us today. Mike Baird, our Chief Operating Officer, and Leanne Gleeha, our Chief Financial Law Officer, are with me on the call, as always. Next, our fourth quarter financial results capped a year marked by strong execution and bold strategic action to shape our future of the business. We delivered on all key operational priorities in 2025, including successfully reviewing and renewing distribution agreements representing over 60% of our subscriber base, further elevating the CW and NewsNation to top-tier networks, extending our affiliation agreements with both ABC and My Network TV, and pursuing regulatory reform through our landmark agreement to acquire Tegna. These achievements, together with the return of midterm election political advertising in 2026, all set the stage for a very exciting year of growth ahead for Nexstar, as reflected in our standalone Nexstar pre-Tegna, full-year adjusted EBTA guidance of $1.95 billion to $2.05 billion. The rationale for the Nextar-Tegna combination is becoming increasingly clear. Consolidation is accelerating across the broader media industry, from the Hulu-Fubo transaction to the proposed Charter-Cox merger to the upcoming sale of Warner Brothers Discovery. Against this backdrop, our transaction represents a pivotal and critical opportunity to establish a framework for local television broadcasters to more effectively compete with big tech and with big media, while strengthening our ability to deliver high-quality local journalism to our communities. I'm pleased to report that we remain on track and are making great progress on our path to closing. Our HSR filings and our FCC license transfer applications have all been submitted. We have responded to all inquiries from the DOJ, the FCC, and the State Attorneys General, and we continue to work with all regulatory and legal bodies to fulfill any remaining requests. Our explanation for close is by the end of second quarter of 2026, and that remains unchanged. If we look at recent industry strategic activity, broadcast has been a consistently coveted asset because of the scale, reach, and results it delivers to premium programming, especially sports. The numbers speak for themselves. This past season, the NFL delivered its highest viewership in 16 seasons, up 7% year-over-year, largely driven by broadcast. In home and away markets, broadcast still delivers the majority of the NFL Thursday night football audience versus Amazon Prime. The NBA's return to broadcast fueled a 16% year-over-year increase in regular season viewership through mid-February, and that marks the highest average NBA audience at this point in the season since 2018. The NBA All-Star Game also benefited with the highest ratings in 15 years in its first year back on NBC. And finally, the Winter Olympics also delivered their strongest viewership in years. The data is clear when it comes to delivering scaled audiences for premium live sports and events. Broadcast remains unmatched. In this regard, Nexstar's own sports-focused programming strategy is delivering excellent results and enabled the CW to exceed our financial expectations in 2025. The CW finished the year as the 10th most watched ad-supported network and the second fastest growing network overall, delivering a 19% year-over-year increase in viewership. In 2025, we improved the network's cash flow by an impressive 32%, and we anticipate continued financial improvement for the network as we move through 2026, with profitability expected by the fourth quarter of this year. The continued success of our long-term strategic focus on high-impact news and sports programming is further validated by the performance of NewsNation, which posted its strongest year ever in total day, primetime, and daytime viewership, and in 2025 was the fastest-growing cable news network in the adult 25-54 demographic. Consumer awareness of NewsNation has increased to over 40 percent, its highest level to date, with over 50 percent awareness among viewers of news. These results reflect the fact that NewsNation's programming and unique fact-based reporting is resonating with viewers looking for a balanced and impartial take on the news. Looking ahead, as we had anticipated and discussed on prior calls, we're beginning to see more stable subscriber trends. Smaller DTC platforms are being integrated into multi-channel pay TV packages, and distributors continue to launch new value-priced skinny bundles, many focusing on broadcast and news programming. In Q4, Charter posted sequential quarterly growth in video subscribers, and overall the data is encouraging to Nextar's distribution outlook. While we are focused on closing our proposed acquisition of Tegna, we remain equally disciplined in executing against Nextar's core business. Beyond maximizing the political advertising opportunities presented by the midterm elections, our top two priorities in 2026 are digital optimization and expense rationalization. Digital is a key growth engine, and we continue to expand our audience reach, including local CTV apps now live in 108 markets and broaden advertiser solutions across our owned and third-party inventory. Despite AI search headwinds, digital revenue grew high single digits in 2025 and double digits in our local business. And in 2026, we expect digital revenue to surpass our national advertising revenue, an important milestone that strengthens our long-term non-political advertising trajectory. At the same time, we are further streamlining and centralizing our operations, automating select production functions, aligning incentive compensation closely with performance, actions which we expect will drive additional operating expense reductions and enhanced execution across the company. Touching briefly on political, AdImpact projects about $10.8 billion in total political advertising for the 25-26 election cycle, a record amount for the midterms, with broadcasting expected to capture nearly 50% of that total, or about $5.28 billion. We expect to capture a low double-digit share of total broadcast political advertising spend for the current cycle as our positioning remains excellent with a presence in more than 80% of the contested election markets. In summary, our assets generate consistently strong free cash flow, which we've used to create the clean balance sheet that we have today to return capital to shareholders and pursue highly accretive M&A, like Tegna, and have executed with our proven playbook and grounded in our steadfast community to localism. We are energized by the significant prospects before us, and we remained laser-focused on executing our 2026 objectives, including closing our acquisition of Tegna, capitalizing on the midterm election political advertising opportunity, and continuing to optimize our business operations, all of which we anticipate will contribute to shareholder value creation. So now with all that said, let me turn the call over to Mike Beard.

Thanks, Perry, and good morning, everyone. Nextar delivered fourth quarter net revenue of $1.29 billion, a decline of 13.4% compared to the prior year, primarily reflecting the year-over-year reduction in political advertising, offset by better-than-expected growth in non-political advertising revenues. Fourth quarter distribution revenue of $720 million increased $6 million, or 0.8%, compared to the prior year quarter, and primarily reflects increased rates, growth in VMVPD subscribers, and the addition of CW affiliations on certain of our stations, offset in part by MVPD subscriber attrition. In 2025, we renewed distribution agreements covering more than 60% of our subscribers, extended our network affiliation agreements with ABC and MyNetwork to 2027, and renegotiated affiliation and VMVPD agreements for the CW, covering about two-thirds of its subscribers. Looking ahead, we have approximately 30% of subscribers up for renewal this year. In 2026, on a standalone, NextAR-only basis, we are projecting distribution revenue growth to be in the low single digits on a gross basis and in the mid-single digits on a net basis for the full year. Our projections are based on our current and expected contract terms and an improvement in the rate of subscriber attrition. Turning back to our results for Q4 2025, advertising revenue of $549 million decreased $209 million, or 27.6%, over the comparable prior year, primarily reflecting $233 million year-over-year decrease in political advertising to $21 million. However, non-political advertising was up 4.5% in the quarter, better than the expectation of a low single-digit decrease we mentioned in our last earnings call. We saw later than anticipated spending last quarter driving broad-based improvement across all advertising segments, including local, national, network, and digital. Top advertising categories in the quarter were gaming, banking, attorneys, and sports betting driven by the legalization of online sports betting in Missouri. Auto is once again our largest declining category, but our focus on developing new digital advertising products with auto dealers partially offset that decline. For the first quarter, non-publical advertising is currently forecast to be flattish on a year-over-year basis, primarily due to the negative relative impact of the Super Bowl airing on NBC this year compared to Fox last year, where we have a stronger footprint. However, this negative comparison will be partially offset by the incremental advertising from the Winter Olympics on NBC. So far this year, we've seen strong viewership and advertiser demand for marquee sports content, with more than a 20% increase in advertising for the 2026 Super Bowl and Milan Cortina Olympics compared to the comparable 2022 Super Bowl and Beijing Olympics. On the political side, we generated approximately $21 million in political advertising revenue during the quarter. primarily driven by Virginia's statewide general election spending and California's redistricting ballot proposition and early governor's race spending. With the return of the midterm election cycle in 2026, we look forward to once again demonstrating the value of broadcast television to candidates and campaigns looking to communicate to the electorate through political advertising on television. As Perry mentioned, we expect to generate a low double-digit percentage of total broadcast political advertising for the year. As a reminder, industry advertising forecasts are provided on a gross basis in Nexstar Reports' advertising revenue, including political, net of agency commissions. As in previous election years, we expect roughly 20% of our full-year political advertising revenue to be earned in the first half of 2026, with the remaining 80% in the second Political advertising is also expected to impact non-political advertising, driving displacement in the back half of the year. On the expense side, we remain focused on continuously improving the operational efficiency of our business, and in 2025, we reduced recurring cash operating expenses by 1.6% as a result of the operational restructuring we implemented in Q4 2024 and Q1 2025, and continued rationalization of programming costs at the CW. Looking ahead, as Perry mentioned, you can expect us to deliver additional cash operating expense savings across the business in 2026. Turning to the CW, audiences are consistently showing up for our live sports lineup, and that momentum is translating into progress toward our financial targets. With its debut on CW Sports, the NASCAR O'Reilly Auto Parts Series, formerly the Xfinity Series, delivered its most-watched season in four years, up 10% year-over-year, averaging over 1 million viewers across 33 races. College football also posted double-digit gains, averaging 456,000 viewers per week, with ACC matchups on the CW up 26%. ACC men's and women's basketball is also off to a strong start this season, with total viewers up 35% through the first 10 games. And NASCAR on the CW has returned strong, with the O'Reilly Auto Parts Series season opener at Daytona delivering 2.3 million peak viewers, including more viewers in the 18-49 demo for any edition of this race since 2018. The momentum continued last week in Atlanta, where we've delivered 1.4 million average viewers, representing the best performance for this race since 2016. With 100 additional hours of sports programming expected in 2026, nearly 47% of the CW's schedule will be sports or sports adjacent. At the same time, we're strengthening our primetime lineup with premium entertainment, including Wild Cards, the final season of All-American, Police 24-7, and refreshed game shows Scrabble, hosted by Craig Ferguson, and Trivial Pursuit, which will air not only on the CW, but will also be licensed for syndication downstream. Our overall programming strategy is delivering results, with the CW outperforming Big Four primetime telecasts 273 times across total viewers and key demos in the 2024-2025 season. That's up from just 45 times a year ago. Similarly, NewsNation continues to hit consistent ratings milestones. In 2025, NewsNation remained the number one fastest growing cable news network in the 25-54 demo. For the year, NewsNation surpassed MSNOW 60 times and CNN 40 times in head-to-head telecasts across total viewers and in the 25 to 54 and 35 to 64 demos. This compares to the 2024 period when NewsNation surpassed MSNBC four times and CNN two times in head-to-head telecasts. So to close, I want to reiterate our confidence and our long-term outlook in the enduring strength of Nexstar's business model. Our programming strategy, anchored by live news and sports, continues to deliver results for the CW and news nation, and we remain committed to unlocking even greater value from these assets as our audiences grow. Our local programming strategy is similarly anchored by our unrivaled live news product, and the proposed Tegna acquisition will create a substantial and immediate value for shareholders while advancing the public interest by strengthening local broadcast journalism and providing an expanded range of competitive broadcast and digital advertising solutions across our portfolio of local and national assets. And with that, it's my pleasure to turn the call over to Leanne for the remainder of the financial review.

Thank you, Mike, and good morning, everyone. Mike gave you most of the details on the revenue side and on the CW, so I'll provide a review of expenses, adjusted EBITDA, and adjusted free cash flow, along with a review of our capital allocation activities and our 2026 guidance. Combine fourth-quarter direct operating and SG&A expenses, excluding depreciation and amortization and corporate expenses decreased by $7 million or 0.9%, driven primarily by reduced commissions from sale of political advertising revenue in Q4 of 2024, reduced news and production expenses, reduced promotions from our operational restructuring initiatives, and lower administrative and one-time expenses. Q4 2025 total corporate expense was $65 million, including non-cash compensation expense of $20 million, compared to $48 million, including non-cash compensation expense of $20 million in the fourth quarter of 2024. The increase of $17 million is primarily due to one-time costs associated with our proposed acquisition of TAGNA and the impact of a reduction in the bonus reserve in the fourth quarter of 2024 that was larger than the fourth quarter of 2025. Q4 2025 amortization of broadcast rights included in our definition of adjusted EBITDA was $75 million, a reduction of $23 million from $98 million in the fourth quarter of 2024 primarily due to timing programming at the CW. Q4 2025 income from equity method investments, which primarily reflects our 31% ownership in TV Food Network, reduced by amortization of basis difference, declined by $12 million in the quarter, or 67%, primarily related to TV Food Network's lower revenue. We also wrote down our investment in TV Food Network consistent with other companies in the entertainment cable network space. Putting it all together on a consolidated basis, fourth quarter adjusted EBITDA was $433 million, representing a 33.6% margin, and a decrease of $195 million from the fourth quarter, $24 of $628 million. Moving to the components of free cash flow and adjusted free cash flow, fourth quarter CapEx was $54 million, an increase of $19 million from $35 million in the fourth quarter last year, primarily due to an investment in real estate at one of our properties. Fourth quarter net interest expense was $91 million, a reduction of $13 million from the fourth quarter of 2024. On a cash basis, this compares to $89 million in Q4 2025 versus $101 million in Q4 2024. The reduction in interest expense was primarily related to reduction in SOFR and reduced debt balances. Fourth quarter operating cash taxes were $33 million compared to $67 million in 2024, a decrease of $34 million, primarily related to decreased pre-tax operating income in 2025, related to decreased non-election political advertising. Payments for capitalized software obligations net of proceeds from disposal of assets and insurance recoveries were $6 million versus $4 million last year. In Q4, cash programming amortization costs were greater than cash payments by $19 million versus lower by $13 million in 2024 as certain programming payments were prepaid. Pulling this all together, consolidated fourth quarter 2025 adjusted free cash flow was $214 million as compared to $411 million last year. Now turning to our 2026 guidance. We believe next our standalone 2026 adjusted EBITDA will be in the range of $1.95 to $2.05 billion. Perry and Mike already provided some of the key assumptions that are embedded in that guidance, including, one, our expectation for growth and net distribution revenue growth to be up low and mid-single digits, respectively, based on contract renewals completed in 2025 and expected in 2026 and an improvement in subscriber attrition trends. Two, political advertising revenue should be an amount equal to a low double-digit market share of broadcast political advertising and will have a displacement impact on non-political advertising in the back half of the year. Three, total operating corporate expenses and amortization of broadcast rights excluding one-time charges will again decline year-over-year due to our continued plans to affect our business by focusing on efficiencies and reducing programming costs. And four, we expect the CW will continue to reduce its losses by another 30% in 2026 from 2025 levels and achieve profitability in the fourth quarter. Key factors differing from our current expectations, which could affect our outlook for adjusted EBITDA for 2026, either positively or negatively. Those factors include, among other things, the rate of growth or attrition of pay TV subscribers, the health of the local and national advertising markets, our renegotiation of certain distribution and affiliation agreements on terms favorable to the company, and the attributable net income related to our 31.3% ownership stake in TV Food Networks. We do not intend to update this guidance on a quarterly basis. As a few additional points of guidance with respect to adjusted free cash flow, we are currently projecting CapEx of $125 to $130 million for the year and $30 to $35 million in the first quarter. Based on the current yield curve, we anticipate full year 2025 cash interest expense to be in the $355 to $365 million area, an improvement of $11 million versus 2025 levels at the midpoint. We project Nexstar's cash interest expense, including the spread on our floating rate debt instruments, the current SOFR forward curve, and the coupons on our fixed rate debt, along with our expectations for debt repayments, which includes our mandatory amortization of approximately $111 million. Q1 interest expense is expected in the $85 million range. Full year 2026 cash taxes are expected to be approximately $315 to $325 million range an increase versus 2025 of $208 million due to an expected improved income primarily results of the election year. For cash taxes, we use a 26% tax rate when calculating our estimated tax before one time or another adjustments. The first quarter includes only a very small amount of state income tax in the $2.6 million range. As a reminder, we will use the annualization method for tax, meaning tax related to the fourth quarter of 26 will be largely deferred to 27. In 2026, payments for programming are expected to be in excess of amortization by $25 to $30 million, due primarily to an investment in programming for future years, with approximately $1 million of that in the first quarter. Turning to capital allocation in our balance sheet, together with cash from operations generated in the quarter and cash on hand, we returned $56 million to shareholders, comprised entirely of dividends, as we are conserving cash for acquisition of Tegna. For the year, we returned $351 million, or 42% of our adjusted free cash flow, to shareholders in the form of $226 million of dividends and $125 million of share repurchases, reducing our year-end shares outstanding by 1% to $30.3 million. Next, our outstanding debt at December 31st, 2025 was $6.3 billion, a reduction of $26 million for the quarter as we made quarterly amortization payments. Our cash balance at quarter end was $280 million, including $13 million of cash related to the CW. Because we designated the CW as an unrestricted subsidiary, the losses associated with the CW are not accounted for in our calculation of leverage for purposes of our credit agreement. As such, our first lien covenant ratio for Nexstar as of December 31, 2025 for the last eight quarters annualized was 1.71 times, times, which is well below our first lien and only covenant of 4.25 times. Our total net leverage for Nexstar was 3.09 times at quarter end. Our 2026 cash flow will be deployed first to fulfill our mandatory obligations, including debt repayments of $111 million and $36 million of pension and defined benefit plan contributions, the anticipated 2026 dividend of approximately $228 million, and to build cash balances to fund the acquisition of Tegna. In January, we announced our dividend, maintaining the same level as 2025, as excess cash will be used to fund the acquisition of TAGNA. Based on our stock price as of yesterday, our dividend represents a 3.2% yield, which puts us in the 73rd percentile of all dividend-paying stocks in the S&P 400 for dividend yield. With that, I'll open up the call for questions. Operator, can you go to our first question?

Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star 2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. And we'll go on to our first question. We'll hear from Dan Kernos with Benchmark Stonex.

Great. Thanks. Good morning. Appreciate all the color as usual. Well, Perry, as you might imagine, you know, given the presidential tweet recently, I think investor anxiety around when we might get an FCC cap elimination has increased a little bit. So any color you can give us around wording, timing, and how that process might play out would be helpful. And then separately on the expense side, you know, all of you really super helpful, like kind of walk through the pieces. is, I guess, since you guys called out digital optimization and expense rationalization as your two priorities, you know, given all of the AI tools that are out there, what we're hearing from peers, what we're hearing from, you know, kind of the broader tech landscape, I mean, how much of that is sort of embedded in the guide you've given this year? How much is applicable on, say, like content cost reduction for things like CW or News Nation? Just any way you can help us frame up, you know, kind of the opportunity set you see there to continue sort of this expense reduction momentum would be helpful. Thank you.

Well, Dan, I'll take the first part. I would hope to not characterize investor anxiety around the elimination of the cap and approval of our deal. I would hope that that anxiety would turn into enthusiasm. We certainly appreciate the support of the president vis-a-vis his tweet and follow-up comments by the chairman of the FCC and his support for the deal. And as to timing, that's really the purview of the regulatory agencies. We are working very diligently to complete all of the information requests. As things go, the FCC shot clock would technically expire on June the 1st of this year. So, we remain consistent in our belief that the transaction will close before the end of second quarter. We are hopeful that we can close sooner than that, but we'll obviously continue to engage with the regulatory agencies to try and get to the desired result, not only on the national ownership cap, but the approval of our transaction.

On your questions about digital and expense, maybe I'll take digital first. You know, I think that, you know, Nexstar has got a tremendous local sales force. We have, you know, over 1,500 sales folks across the country, relationships with over 50,000 advertisers. Our advertisers really value our television products, but they also value our apps and our websites. And they are also increasingly looking for, you know, audience extension opportunities. And because we have those great local relationships, we're able to, you know, sell more and sell, a broader audience, not just including our local television audience, but if somebody wants more entertainment or they want more different demographics, we can sell that and add that onto the portfolio. So we've had good success with that, especially on our local side, and that really had been driving the growth. And as Perry mentioned, this will be a good year for us because we do expect our digital revenue to eclipse our national television advertising revenue, which you know, digital has a different trajectory, which should actually really help our longer term growth with respect to net revenue. On the expense side, you know, we are continuing to just look at the business in ways to, you know, optimize the operations. And are there ways that we can do things in a different way that's more centralized or to create, use new technologies to, you know, know, help create efficiencies in our local operations and even more centrally. And so, we are just continuing to reimagine that. And that's one of the benefits we have because of the scale of our business. We just have, you know, a good opportunity to be able to do some of those things. And you saw it in our 2025 results, and you'll see it again in our 2026 results.

Thank you. Next question, we'll hear from Benjamin Sok with Deutsche Bank.

Good morning. Thanks for the question. Another one on the regulatory side. Now that you're a bit deeper into that process? Have there been any surprises so far in your conversations with regulators? And in particular, do you have a sense for how the DOJ might plan to view in-market consolidation, and what could that mean in terms of requiring any divestitures or not? And then I'm curious what you're seeing as far as the macro environment so far in 2026 as it relates to advertising. Thank you.

Sure. As it relates to the regulatory process, I mean, we continue to engage vigorously with the DOJ, and I think it provided some excellent material to them regarding the definition of market or redefinition of video, which is where we really compete. Obviously, they have yet to render a decision, so we will obviously defer to their judgment, but I think that the information that we provided has been strong, and we're laser are focused on that, so we feel very good about where we are, the dialogue we've had, the progress we've made, the endorsements that we've received. But as to transaction particulars, we're just not there yet in terms of those expectations. But as we've reported historically, we expect that if there are any divestitures, they would be de minimis to the overall value of the deal.

And then just on the overall macro environment, I think we're feeling, you know, decent about it. I think one of the things that we'd like to track is within our overall advertising categories is what percentage of the categories are increasing versus decreasing in terms of their revenue growth. And we're seeing in the first quarter versus the fourth quarter a greater percentage that are increasing than we saw in the fourth quarter. So I think we're, you know, we have some guidance here of, you know, flattish in terms of our non-political advertising in the first quarter. So we're feeling decent about the macro outlook.

Thank you. And next, we'll move to Aaron Watts with Deutsche Bank.

Hi, everyone. Thanks for having me on. Just two questions. Leanne, maybe one for you to start. just based on your performance to close out 25 and your view into 26, any change in your outlook for pro forma leverage once you close the Tecna deal?

Not really, no. Okay, great.

And then secondly, for me on the advertising side, Perry, this question is a bit of an offshoot of one I asked you at the time you announced the Tecna deal. The programmatic buying marketplace continues to grow and gain influence. How do you see that impacting your ad sales overall over the near-term horizon? And how are you currently participating or planning to participate in that marketplace with your ad inventory?

Sure. Well, in terms of programmatic digital advertising, part of the acquisition of Tegno will include the acquisition of Premion, which is their platform for programmatic digital advertising. We think there's some real opportunity there to overlay that technology and that sales force with our inventory, which currently is not on the Premion platform. So that is an upside in operating the business. I wouldn't necessarily characterize it as a synergy, but obviously we think that will prove as time goes on. As to programmatic on linear, I mean, we already are in that business to a certain extent with companies like IDN, ITN and Cadent who basically are doing a very manual version of programmatic in linear. We are working internally and with external partners to develop a programmatic linear solution that we're in the early, early stages of trying to develop with other partners. We need to reduce the frictional cost of buying linear inventory, and I think technology is a way to do that. And I think that, you know, we'd like to get to the point where, you know, we have a single seamless system from pitch to pay, regardless of where the impressions are located that you're attempting to access. And so that's my vision and where I would like us to get to. Obviously, when people ask me what we're going to do on, you know, day two of the Tegna acquisition closing, it's to work on that project. And work has started already, and we've got a pretty good task force together, and I'm doing another update here in a couple of weeks. So we intend to try, and obviously as one of the largest purveyors of advertising in the world, I think that we were ranked by one analyst as the 18th largest purveyor of advertising in the world. we have a lot to gain by getting that right and removing the frictional costs of buying linear television and trying to make it more akin to the buy-sell process of digital inventory. And at the end of the day, it really should be one set of inventory, one process, seamless, as I said, from pitch to pay, and that's the gold standard that we're going to try and work to achieve.

Appreciate it. Thanks, Frank.

Next we'll move to Patrick Scholl with Barrington Research.

Hi. Thanks for taking the question. I guess maybe just a quick follow-up on advertising. Can you provide just a little bit more detail on some of the categories that were increasing or decreasing? And, you know, as we start to lap the initial tariff headwinds, if you're kind of seeing any greater enthusiasm from the Supreme Court ruling.

So with respect to the, just the categories. Auto was our biggest decliner, but not by any sort of outstanding amount. But we did see the rate of decline being offset within that category by good growth on the digital side. And we're actually seeing a pretty nice improvement in that auto trend into the first quarter. So we're feeling good about that. With respect to the other top categories, We had gaming and sports betting that was a great category in the fourth quarter. That was mostly due to the Missouri legalization. And then, you know, anything kind of other than that, even on the downside, nothing really was distinguished. I think I mentioned earlier that we did see, you know, more categories increasing than decreasing overall, and we're seeing that trend continue into the first quarter and be even a little bit better in the first quarter. So things are looking okay, I would say, but there's nothing really to read into the various categories, no outliers that are driving the outcome one way or the other. With respect to the tariffs, I don't know that we've seen anything in particular there. I would remind you, I think one of the points that we always like to make is, you know, it's about 60% of our advertising revenue comes from services categories versus goods categories, so we do have a little bit of a natural hedge there because we are much more service-focused than goods-focused, but I wouldn't say that there's been anything that people have been talking about with respect to tariffs as of yet, but we'll keep you posted.

Okay, thank you.

So we'll go on to Craig Huber with Huber Research Partners.

We've got a broad question here. The uses of AI in your operations, can you just give us some examples of things that are moving the needle that you're excited about that AI is helping you, whether it be on the cost-savings front or enhancing your product to speed up things, et cetera? Just some examples there would be helpful first.

Sure, Craig. I'll take that. We've actually deployed some AI tools across the organization inside our local newsrooms, really to help us just on the workflow front make the process a little bit more efficient. It allows us to take a story and optimize it for multi-platform, for instance. It allows us to efficiently find sources of information and leads across multiple places all at one time. So I think looking forward, we're in the middle of deploying some AI for our sales team that we expect will help both with prospecting, sales development, and also with workflow and operations in that front as well. So early days yet, but we're optimistic about some of the potential that's out there as that technology starts to flow down into our industry.

Sorry, do you want to go ahead?

No, no, go ahead. Sorry, Greg.

Sorry. I wanted to also ask, just maybe an update on alternative uses of Spectrum. I don't think we've heard about that lately. Maybe just sort of update us on what's happened in last year, what maybe the plans are this coming year. I know it's a long way out to be meaningful for your company and your peers, but just sort of an update on alternative uses of Spectrum, please.

Sure. I think to underscore what you said, it is a long way out before it's meaningful for us or our peers. So in the last year, as you know, we formed a joint venture with three of our fellow broadcasters, EdgeBeam Wireless. That organization is really just at the early stages of formulating its management team and its go-to-market strategy. I think you'll see them in the coming year be in the market with products. They're out there right now talking with customers. I think, again, early days, but we're starting to see some early orders flow. Some of that is proof of concept. Some of it is actual revenue. But we're optimistic that that business will take off and really demonstrate to the market the unique broadcast or benefits of a broadcast spectrum for high-speed data transmission.

Great. Thank you.

And Stephen Cahill with Wells Bargo will have our next question.

Thank you. And I joined a little late, so I apologize if I ask anything that causes you to repeat yourself. On the regulatory process around Tegna, the press has had a lot of information about the direction of the FCC. I think that one seems increasingly clear, at least of the conclusion we're going to get. the DOJ is a little more of a black box. And I think the initial commentary is you expect minimal divestitures. I was just wondering if you could give us the latest and greatest on what your perception is as to how the DOJ is now looking at markets and what sort of a precedent this transaction could be for kind of the future of how the DOJ looks at broadcast ownership within markets. And then also just a question on synergies. You know, Tegna has some good digital advertising businesses. I'm guessing that scale helps in political cycles. I don't think any of those benefits are in your synergy guidance. Do you have any experience with these from, you know, deals like Tribune or even CW that you could share in terms of where there could be some opportunities for kind of one plus one equals more than two in some of those revenues over time? Thank you.

Craig, I'm sorry, Stephen. On the regulatory front, as I said earlier, we have provided reams of information to DOJ and studies from economists that we've hired that talk about the definition of the marketplace and the need for a redefinition of video, which is where we compete. And obviously, we've provided that information, but we, at this point, have not had any definitive feedback as to how they're interpreting that information. As to the topic of divestitures, we have had no conversations about divestitures at all at this point in the process. Not to say that it won't come up later in the process, but again, we continue to maintain that if there were divestitures, it would be a minimal percentage and not meaningful to the deal. And so, you know, I think the agencies, you know, the DOJ is meant to be a black box, not disclosures there are not required to be public. But I have read the information that we provided in the economic studies that I think are highly, highly credible and very, very convincing. But it is obviously up to the folks at the DOJ and there's been some change in personnel there. And so other folks are getting up to speed, but it's up to the DOJ and to the FCC to render their opinion and ultimately to come to a decision. But we feel very good about the work that's been done, the information that's been provided, the endorsements we've had, and the stage at which we are in the process.

So we're very confident that we will get to a finish line in the time frame that we've And then on the synergies, I would just say, Steve, you know, on the digital side, as Perry mentioned earlier, Tegna has this business premium, which is really focused on the CTV end market, which we know is growing very nicely. And so we're excited about the opportunity to bring our stations to bear in that market in a little bit of a bigger way. So we're feeling positive about that, but you're correct. We have not put any revenue synergies into other than the re-trans synergies that we've talked about previously into our synergy number. And then with respect to political, you know, I think, you know, we, it all, as you know, that all comes down to what market is it where there's a contested election and where do the dollars need to go? And so to the, one of the things that we thought was going to be beneficial about this transaction is it does give us more exposure to some of those political markets. We, we have a presence in Georgia, but we didn't have a presence in Atlanta. They've got some great stations in Maine that are, is a contested election market. They've got a station in Toledo, Ohio, which could also be a good political market for us. And Phoenix, Arizona is the other one where they have a larger station than we do there. So all of those things we think should accrue to the political picture going forward, and we're optimistic on getting this deal closed in advance of the cycle this year.

Great. Thank you.

Thank you. And next we'll hear from Jason Bessonet with Citi.

Okay, at risk of showing my own ignorance, I'm going to ask this question. I think you said on the call that you think that digital ads will exceed your national ad revenues. And I think the last time you disclosed digital ad revenues was around $400 million. And I sort of think of your national ad revenues as being at the CW network and would have said it's already bigger than your national ad. So what am I missing?

Yeah. So I think all you're really missing there is that CW is national advertising, but it's really like a sub-segment of that, right? It's network national advertising. We also have national advertising at our stations, which are national buyers that then look to place their ads in local markets. So that's the other piece that we refer to as national.

I see. Thank you.

Thank you. That will conclude the question and answer session. I would now like to turn the floor back to Perry for closing remarks.

Thank you, operator. I appreciate everyone joining us today, and we're very pleased at the results that we were able to post for 2025, strong financial results solidly in line with our expectations that we set last year at this time. Despite the changing media landscape, our performance demonstrates that we have both durability and stability in our broadcast model and the operational execution expertise of this management team. We look forward to closing our pending acquisition of Tegna and bringing that operational expertise to bear on our synergy plan and reinforcing our position as the largest local broadcast company in the United States. Thank you for your continued support over these last 22 years of quarterly earnings calls, and we look forward to updating you on your next, on our next earnings call in about 90 days' time. Have a great day.

Thank you. This does conclude today's teleconference. You may now disconnect your line.