Increases shareholder return of capital commitment to nearly
$800 million this year through accelerated share repurchase (“ASR”)
programs, settlement of merger termination fee, and incremental
opportunistic repurchases in the open market
Completes initial $300 million ASR program on August 31,
2023, ahead of schedule
Completes multi-year affiliation agreement renewal with
ABC
Achieves record third quarter subscription revenue and
continues sequential improvement in advertising and marketing
services revenue
TEGNA Inc. (NYSE: TGNA) today announced financial results for
the third quarter ended September 30, 2023.
THIRD QUARTER FINANCIAL HIGHLIGHTS1:
- Total company revenue of $713 million finished in-line with our
guidance range in the third quarter, down 11 percent
year-over-year, primarily due to the reduction of political revenue
from the mid-term election cycle last year.
- Total company revenue was down six percent compared to the
third quarter of 2021 due to the absence of Summer Olympics and
macroeconomic headwinds in Advertising and Marketing Services
(“AMS”) revenue, partially offset by growth in subscription
revenue.
- Subscription revenue was a third quarter record of $378
million, up slightly year-over-year, driven by contractual rate
increases, partially offset by subscriber declines.
- AMS revenue was $312 million in the third quarter, down three
percent year-over-year. Advertising trends in the third quarter
showed sequential improvement compared to the second quarter.
Automotive advertising revenue continued to show strong
year-over-year growth for the fifth consecutive quarter. Underlying
advertising trends were down less than one percent year-over-year,
adjusting for the loss of a single national Premion account. As
noted earlier this year, this impact will continue to be felt
throughout 2023.
- Compared to 2021, third quarter AMS revenue was down 14 percent
driven by the absence of Summer Olympics and continued
macroeconomic headwinds. As a reminder, TEGNA is the largest NBC
affiliation group.
1 In analyzing third quarter 2023 results,
investors should be reminded that TEGNA’s odd-to-even year results
are negatively impacted by the absence of even-year political
revenues.
- GAAP operating expenses were $579 million, up one percent
year-over-year. Non-GAAP operating expenses2 of $576 million
finished in-line with our guidance range, up one percent
year-over-year, with the increase driven primarily by programming
costs, partially offset by operational expense management
improvements.
- Non-GAAP expenses less programming decreased one percent from
the third quarter of 2022 as a result of operational expense
management improvements.
- GAAP and non-GAAP operating income totaled $135 million and
$138 million, respectively.
- Interest expense was flat year-over-year at $43 million due to
our attractively priced fixed-rate debt.
- As previously announced, in July 2023, TEGNA sold a portion of
its MadHive investment, recognizing a gain in the third quarter of
approximately $26 million ($19 million after tax or $0.10 per
share) reflected in Other non-operating items, net on the
Consolidated Statement of Income.
- TEGNA achieved net income of $96 million on a GAAP basis, or
$78 million on a non-GAAP basis.
- GAAP and non-GAAP earnings per diluted share were $0.48 and
$0.39, respectively.
- Total company Adjusted EBITDA3 was $166 million, representing a
decrease of 38 percent compared to the third quarter of 2022, as
expected, due to the absence of high-margin political revenue from
mid-term elections and an increase in programming expenses.
- Third quarter Adjusted EBITDA was down 32 percent compared to
the third quarter of 2021 reflecting the absence of Summer
Olympics, macroeconomic headwinds and higher programming
expenses.
- Free cash flow4 was $60 million for the quarter.
- For the trailing two-year period ending September 30, 2023,
free cash flow as a percentage of revenue was 20.6 percent.
- Total cash and cash equivalents and net leverage at the end of
the quarter were $553 million and 2.61x, respectively.
CAPITAL ALLOCATION
TEGNA delivered on its return of capital commitment with the
completion of its initial $300 million ASR program on August 31,
2023, earlier than anticipated. Following the completion of the ASR
and before entering TEGNA’s third quarter blackout period on
September 16, the Company opportunistically repurchased an
incremental $28 million of shares taking advantage of attractive
market pricing. The repurchases were made under TEGNA’s existing
share repurchase program approved by the Board of Directors in
December of 2020.
2 A non-GAAP measure detailed in Table
2
3 A non-GAAP measure detailed in Table
3
4 A non-GAAP measure detailed in Table
5
The initial $300 million ASR program reduced the Company’s
outstanding shares by approximately 18 million shares, including
final settlement of approximately three million shares.
As announced last quarter, TEGNA’s Board of Directors approved a
second ASR program of $325 million, which is expected to commence
this week.
Since the termination of the merger agreement, TEGNA has
committed this year to nearly $800 million in share repurchases
with approximately 45-50 million5 shares that will be retired by
end of March 2024, which will represent more than twenty percent of
shares outstanding prior to these actions. As of September 30,
2023, TEGNA had retired a total of 28.7 million shares.
CEO COMMENT
“TEGNA is operating from a position of strength within the
broadcast industry, and we are seeing positive momentum across our
organization,” said Dave Lougee, president and chief executive
officer. “Our management team and Board are laser focused on
generating shareholder value and building a track record of
disciplined capital allocation as TEGNA advances its strategy as a
standalone company. We are pleased with our initial actions to
return cash accumulated during the pendency of the merger process
by retiring a significant amount of shares. Our balance sheet
affords us the unique opportunity to pursue organic growth and
bolt-on M&A opportunities while also offering shareholders our
recently increased dividend, as well as share repurchases. We fully
expect 2024 will be another strong year driven by our favorable
portfolio of stations in key markets benefiting from a robust
presidential election cycle, the Summer Olympic Games, and the
Super Bowl.
“We are pleased to share that we will surpass our previously
announced three-quarters of a billion dollars commitment of capital
return to shareholders. During the third quarter, we
opportunistically repurchased an incremental $28 million of shares
in the open market under our existing share repurchase program. The
initial $300 million ASR program we entered in June was completed
at the end of August, earlier than anticipated. A second ASR
program of $325 million is expected to commence this week. Taken
together with the $136 termination fee from Standard General that
was satisfied through the transfer of TEGNA common stock, we are
now committing this year to nearly $800 million in share
repurchases.
“We are pleased to announce we’ve reached a comprehensive
multi-year agreement renewal with ABC. Our strong relationships
with our valued network partners have been built over decades and
led to mutual success based on common goals. This renews TEGNA’s
ABC network affiliations in 13 markets across the country, which
cover nine percent of the U.S. and serve nearly 11 million
households. Our partnership combines ABC’s popular entertainment,
sports and news programming with our strong local stations and
large audiences.
“Turning to our results, we achieved a new third quarter record
for subscription revenue. Our high-margin subscription revenue
remains a core driver of our cash flow and, looking ahead, we will
be repricing approximately 30 percent of our traditional
subscribers at the end of this year.
“Advertising and marketing services revenue saw sequential
improvement driven by improving trends in key verticals such as
automotive. Automotive, our largest category within AMS, has
steadily recovered and is generating strong year-over-year growth
for the fifth consecutive quarter.
5 Share retirement projection based on
TEGNA Inc. November 6, 2023, close price of $15.41. Actual share
retirement will depend on future share prices of TEGNA. As a
result, actual share retirement may vary from this projection.
“Finally, all of us at TEGNA wish to congratulate our colleagues
at WWL in New Orleans for receiving a News Emmy from the National
Academy of Television Arts & Sciences for Outstanding Regional
News Story: Investigative Report for ‘The Man Behind the
Warehouse,’ an in-depth report on how more than 800 nursing homes
residents ended up living in squalor after Hurricane Ida. We are
proud that the investigation has contributed to the changing of
laws, which will positively impact numerous lives in the
community.”
FOURTH QUARTER AND FULL-YEAR 2023 OUTLOOK
In the fourth quarter of 2023, TEGNA expects to be
disproportionately impacted by cyclical odd-to-even year results
due to the absence of $179 million of high-margin political revenue
reported in the fourth quarter of 2022. Fourth quarter revenue
excluding political is projected to be flat despite macroeconomic
headwinds in advertising.
Fourth Quarter 2023 Key Guidance
Metrics
Reflects expectations relative to fourth
quarter 2022 results
Total Company GAAP Revenue
Down Mid-to-High Teens
percent
Total Non-GAAP Operating Expenses
Up Low-Single Digit percent
Non-GAAP Operating Expenses (excluding
programming)
Down Low-Single Digit percent
Full-Year 2023 Key Guidance
Metrics
Corporate Expenses
$40 - 45 million
Depreciation
$60 - 65 million
Amortization
$53 - 54 million
Interest Expense
$170 - 175 million
Capital Expenditures
$55 - 60 million
Effective Tax Rate
23.5 - 24.5%
Net Leverage Ratio
Below 3x
KEY STRATEGIC UPDATES
- TEGNA’s Station (KENS) Teams-Up with San Antonio Spurs for 11
Exclusive Games – Poised to be an epic season with number one draft
pick Victor Wembanyama joining the Spurs, KENS will bring 11 Spurs
games exclusively to all one million households in the San Antonio
region. Games will be available across KENS TV, the KENS streaming
app, the official Spurs mobile app and through KENS’ partnerships
with cable, satellite and streaming services that offer live TV
programming.
- Daily Blast Live Now in More Than 55 Percent of U.S. TV Homes –
In the quarter, Daily Blast Live (DBL), a daily talk and trending
topics show, began airing in 21 new markets as it enters its
seventh season. Sinclair began airing DBL in 20 markets and Hearst
Television added DBL in Milwaukee, in addition to four existing
Hearst markets. DBL also airs on all TEGNA markets, in 16 Gray
Television markets and on KPVM, an independent station in Las
Vegas.
- Premion Continues to Gain Momentum with Local Advertisers –
Premion continues to strengthen its position in the convergent TV
marketplace by winning additional local advertisers that are
allocating larger spending dollars to streaming advertising. In the
quarter, Premion introduced programmatic selling capabilities,
enabling agencies to leverage either a managed service or a
hands-on-keyboard buying workflow. During the quarter, Premion
released its second annual 2023 CTV/OTT Advertiser Survey with
Advertiser Perceptions and received the “2023 Advanced Advertising
Innovation Award for Best Use of Data,” its 14th CTV industry award
win, presented at the Advanced Advertising Summit.
- Locked On’s Audience Blazes Past 27 Million Listens and Views
Per Month – Locked On Podcast Network’s monthly audio downloads and
video views crossed nearly 28 million per month for the first time
in September 2023, rapidly breaking a record of 26 million set just
the previous month in August. Total views and listens across the
sports podcast network grew 40 percent year-over-year through Q3
2023, achieving 213 million downloads and views year-to-date.
Locked On also broke new ground in the quarter, launching four FAST
channels for Locked On Sports Atlanta, Locked On Sports Cleveland,
Locked On Sports Dallas, and Locked On Sports Los Angeles on the
NewsON app, with more linear streaming channels and platforms
slated to launch in Q4.
- TEGNA Station Streaming Apps Continue Robust Growth – In the
third quarter, stations’ streaming apps generated 677 million
minutes on streaming, 78 percent increase year-over-year. Streaming
apps are now available for all stations across Roku, FireTV and
Apple TV devices, and in the third quarter, stations began rolling
out apps for Samsung, LG, Chromecast and additional platforms and
all stations are expected to be live on these platforms by
year-end.
- VERIFY Growth Continues – VERIFY, TEGNA’s national brand that
combats disinformation, ended the third quarter with approximately
467,000 followers across its various dedicated channels, which
include TikTok, Snapchat, and YouTube among others. Subscribers to
VERIFY’s daily “Fast Facts” email newsletter are up 52 percent
year-over-year and unique visitors to VERIFYThis.com are up 22
percent compared to the same period in 2022. Viewership to VERIFY’s
weekly “VERIFY This” OTT show increased for the fourth consecutive
quarter with more than 2.48 million minutes watched across TEGNA
station streaming apps during the third quarter.
- TEGNA Station WWL Receives News Emmy® – WWL in New Orleans
received a News Emmy from the National Academy of Television Arts
& Sciences for Outstanding Regional News Story: Investigative
Report for “The Man Behind the Warehouse.” The three-part
investigation took a deep dive into how more than 800 nursing home
residents ended up in squalor in a Tangipahoa Parish warehouse
after Hurricane Ida. The investigation contributed to changing of
laws regarding nursing homes’ evacuation plans that have to be
filed with the Louisiana Department of Health. (Press Release)
FORWARD-LOOKING STATEMENTS
This communication includes forward-looking statements within
the meaning of the “safe harbor” provisions of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. When used in this
communication, the words “believes,” “estimates,” “plans,”
“expects,” “should,” “could,” “outlook,” and “anticipates” and
similar expressions as they relate to the Company or its financial
results are intended to identify forward-looking statements.
Forward-looking statements in this communication may include,
without limitation, statements regarding anticipated growth rates
and the Company's plans, objectives and expectations.
Forward-looking statements are based on a number of assumptions
about future events and are subject to various risks, uncertainties
and other factors that may cause actual results to differ
materially from the views, beliefs, projections and estimates
expressed in such statements, many of which are outside the
Company’s control. These risks, uncertainties and other factors
include, but are not limited to, risks and uncertainties related
to: changes in the market price of the Company's shares, general
market conditions, constraints, volatility, or disruptions in the
capital markets; the possibility that the Company's share
repurchases, including through ASR programs, may not enhance
long-term stockholder value; the possibility that share repurchases
could increase the volatility of the price of the Company's common
stock; legal proceedings, judgments or settlements; the response of
customers, suppliers and business partners to the Company's plans,
operations and business as a stand-alone company; the Company's
ability to re-price or renew subscribers; potential regulatory
actions; changes in consumer behaviors and impacts on and
modifications to TEGNA's operations and business relating thereto;
and economic, competitive, governmental, technological and other
factors and risks that may affect the Company's operations or
financial results, which are discussed in our Annual Report on Form
10-K and Quarterly Reports on Form 10-Q. Any forward-looking
statements in this communication should be evaluated in light of
these important risk factors. The Company is not responsible for
updating the information contained in this communication beyond the
published date, or for changes made to this press release by wire
services, Internet service providers or other media.
Readers are cautioned not to place undue reliance on
forward-looking statements made by or on behalf of the Company.
Each such statement speaks only as of the day it was made. The
Company undertakes no obligation to update or to revise any
forward-looking statements.
ADDITIONAL INFORMATION
TEGNA Inc. (NYSE: TGNA) is an innovative media company that
serves the greater good of our communities. Across platforms, TEGNA
tells empowering stories, conducts impactful investigations and
delivers innovative marketing solutions. With 64 television
stations in 51 U.S. markets, TEGNA is the largest owner of top 4
network affiliates in the top 25 markets among independent station
groups, reaching approximately 39 percent of all television
households nationwide. TEGNA also owns leading multicast networks
True Crime Network, Twist and Quest. TEGNA offers innovative
solutions to help businesses reach consumers across television,
digital and over-the-top (OTT) platforms, including Premion,
TEGNA’s OTT advertising service. For more information, visit
www.TEGNA.com.
CONSOLIDATED STATEMENTS OF
INCOME
TEGNA Inc.
Unaudited, in thousands of dollars (except
per share amounts)
Table No. 1
Quarter ended Sept. 30,
2023
2022
% Increase
(Decrease)
Revenues
$
713,243
$
803,111
(11.2
)
Operating expenses:
Cost of revenues
438,260
428,891
2.2
Business units - Selling, general and
administrative expenses
98,394
98,582
(0.2
)
Corporate - General and administrative
expenses
13,552
13,367
1.4
Depreciation
15,083
15,219
(0.9
)
Amortization of intangible assets
13,297
14,953
(11.1
)
Asset impairment and other
—
(159
)
***
Total
578,586
570,853
1.4
Operating income
134,657
232,258
(42.0
)
Non-operating (expense) income:
Equity loss in unconsolidated investments,
net
(256
)
(178
)
43.8
Interest expense
(43,418
)
(43,406
)
0.0
Other non-operating items, net
33,072
1,310
***
Total
(10,602
)
(42,274
)
(74.9
)
Income before income taxes
124,055
189,984
(34.7
)
Provision for income taxes
27,801
43,827
(36.6
)
Net income
96,254
146,157
(34.1
)
Net income attributable to redeemable
noncontrolling interest
(71
)
(92
)
(22.8
)
Net income attributable to TEGNA
Inc.
$
96,183
$
146,065
(34.2
)
Earnings per share:
Basic
$
0.48
$
0.65
(26.2
)
Diluted
$
0.48
$
0.65
(26.2
)
Weighted average number of common
shares outstanding:
Basic shares
200,779
223,968
(10.4
)
Diluted shares
201,218
224,921
(10.5
)
*** Not meaningful
CONSOLIDATED STATEMENTS OF
INCOME
TEGNA Inc.
Unaudited, in thousands of dollars (except
per share amounts)
Table No. 1 (continued)
Nine months ended Sept. 30,
2023
2022
% Increase
(Decrease)
Revenues
$
2,185,076
$
2,362,115
(7.5
)
Operating expenses:
Cost of revenues
1,295,720
1,260,576
2.8
Business units - Selling, general and
administrative expenses
294,734
300,136
(1.8
)
Corporate - General and administrative
expenses
52,158
48,299
8.0
Depreciation
45,119
46,058
(2.0
)
Amortization of intangible assets
40,175
44,952
(10.6
)
Asset impairment and other
3,359
(322
)
***
Merger termination fee
(136,000
)
—
***
Total
1,595,265
1,699,699
(6.1
)
Operating income
589,811
662,416
(11.0
)
Non-operating (expense) income:
Equity loss in unconsolidated investments,
net
(776
)
(4,225
)
(81.6
)
Interest expense
(129,121
)
(129,976
)
(0.7
)
Other non-operating items, net
44,264
16,764
***
Total
(85,633
)
(117,437
)
(27.1
)
Income before income taxes
504,178
544,979
(7.5
)
Provision for income taxes
103,827
132,595
(21.7
)
Net income
400,351
412,384
(2.9
)
Net loss (income) attributable to
redeemable noncontrolling interest
240
(516
)
***
Net income attributable to TEGNA
Inc.
$
400,591
$
411,868
(2.7
)
Earnings per share:
Basic
$
1.86
$
1.84
1.1
Diluted
$
1.86
$
1.83
1.6
Weighted average number of common
shares outstanding:
Basic shares
214,297
223,456
(4.1
)
Diluted shares
214,591
224,221
(4.3
)
*** Not meaningful
USE OF NON-GAAP
INFORMATION
The company uses non-GAAP financial performance measures to
supplement the financial information presented on a GAAP basis.
These non-GAAP financial measures should not be considered in
isolation from, or as a substitute for, the related GAAP measures,
nor should they be considered superior to the related GAAP
measures, and should be read together with financial information
presented on a GAAP basis. Also, our non-GAAP measures may not be
comparable to similarly titled measures of other companies.
Management and the company’s Board of Directors use non-GAAP
financial measures for purposes of evaluating company performance.
Furthermore, the Leadership Development and Compensation Committee
of our Board of Directors uses non-GAAP measures such as Adjusted
EBITDA, non-GAAP net income, non-GAAP EPS and free cash flow to
evaluate management’s performance. The company, therefore, believes
that each of the non-GAAP measures presented provides useful
information to investors and other stakeholders by allowing them to
view our business through the eyes of management and our Board of
Directors, facilitating comparisons of results across historical
periods and focus on the underlying ongoing operating performance
of our business. The company also believes these non-GAAP measures
are frequently used by investors, securities analysts and other
interested parties in their evaluation of our business and other
companies in the broadcast industry.
The company discusses in this release non-GAAP financial
performance measures that exclude from its reported GAAP results
the impact of “special items” consisting of asset impairment and
other, M&A-related costs, Merger termination fee, retention
costs, gains on an available for sale investment and on an equity
investment that we sold a portion of and an impairment charge
recorded for another investment. In addition, we have excluded
certain income tax special items associated with a valuation
allowance on a deferred tax asset related to an equity method
investment and a tax benefit associated with previously disallowed
transaction costs.
The company believes that such expenses and gains are not
indicative of normal, ongoing operations. While these items should
not be disregarded in evaluation of our earnings performance, it is
useful to exclude such items when analyzing current results and
trends compared to other periods as these items can vary
significantly from period to period depending on specific
underlying transactions or events that may occur. Therefore, while
we may incur or recognize these types of expenses, charges and
gains in the future, the company believes that removing these items
for purposes of calculating the non-GAAP financial measures
provides investors with a more focused presentation of our ongoing
operating performance.
The company also discusses Adjusted EBITDA (with and without
corporate expenses), a non-GAAP financial performance measure that
it believes offers a useful view of the overall operation of its
businesses. The company defines Adjusted EBITDA as net income
attributable to TEGNA before (1) net loss (income) attributable to
redeemable noncontrolling interest, (2) income taxes, (3) interest
expense, (4) equity loss in unconsolidated investments, net, (5)
other non-operating items, net, (6) the Merger termination fee, (7)
M&A-related costs, (8) asset impairment and other, (9) employee
retention costs, (10) depreciation and (11) amortization of
intangible assets. The company believes these adjustments
facilitate company-to-company operating performance comparisons by
removing potential differences caused by variations unrelated to
operating performance, such as capital structures (interest
expense), income taxes, and the age and book appreciation of
property and equipment (and related depreciation expense). The most
directly comparable GAAP financial measure to Adjusted EBITDA is
Net income attributable to TEGNA. Users should consider the
limitations of using Adjusted EBITDA, including the fact that this
measure does not provide a complete measure of our operating
performance. Adjusted EBITDA is not intended to purport to be an
alternate to net income as a measure of operating performance or to
cash flows from operating activities as a measure of liquidity. In
particular, Adjusted EBITDA is not intended to be a measure of cash
flow available for management’s discretionary expenditures, as this
measure does not consider certain cash requirements, such as
working capital needs, capital expenditures, contractual
commitments, interest payments, tax payments and other debt service
requirements.
This earnings release also discusses free cash flow, a non-GAAP
performance measure that the Board of Directors uses to review the
performance of the business. Free cash flow is reviewed by the
Board of Directors as a percentage of revenue over a trailing
two-year period (reflecting both an even and odd year reporting
period given the political cyclicality of the business). The most
directly comparable GAAP financial measure to free cash flow is Net
income attributable to TEGNA. Free cash flow is calculated as
non-GAAP Adjusted EBITDA (as defined above), further adjusted by
adding back (1) stock-based compensation, (2) non-cash 401(k)
company match, (3) syndicated programming amortization, (4)
dividends received from equity method investments, (5)
reimbursements from spectrum repacking and (6) proceeds from
company-owned life insurance policies. This is further adjusted by
deducting payments made for (1) syndicated programming, (2)
pension, (3) interest, (4) taxes (net of refunds) and (5) purchases
of property and equipment. Like Adjusted EBITDA, free cash flow is
not intended to be a measure of cash flow available for
management’s discretionary use.
NON-GAAP FINANCIAL INFORMATION
TEGNA Inc.
Unaudited, in thousands of dollars (except
per share amounts)
Table No. 2
Reconciliations of certain line items
impacted by special items to the most directly comparable financial
measure calculated and presented in accordance with GAAP on the
company's Consolidated Statements of Income follow:
Special Items
Quarter ended
Sept. 30, 2023
GAAP
measure
Retention costs - SBC
Retention costs - Cash
Other non-operating
item
Special tax item
Non-GAAP measure
Cost of revenues
$
438,260
$
(751
)
$
—
$
—
$
—
$
437,509
Business units - Selling, general and
administrative expenses
98,394
(501
)
(639
)
—
—
97,254
Corporate - General and administrative
expenses
13,552
(440
)
(553
)
—
—
12,559
Operating expenses
578,586
(1,692
)
(1,192
)
—
—
575,702
Operating income
134,657
1,692
1,192
—
—
137,541
Other non-operating items, net
33,072
—
—
(25,809
)
—
7,263
Total non-operating expenses
(10,602
)
—
—
(25,809
)
—
(36,411
)
Income before income taxes
124,055
1,692
1,192
(25,809
)
—
101,130
Provision for income taxes
27,801
237
152
(6,604
)
1,516
23,102
Net income attributable to TEGNA Inc.
96,183
1,455
1,040
(19,205
)
(1,516
)
77,957
Earnings per share-diluted
$
0.48
$
0.01
$
0.01
$
(0.10
)
$
(0.01
)
$
0.39
Special Items
Quarter ended
Sept. 30, 2022
GAAP
measure
M&A- related costs
Asset impairment and
other
Special tax item
Non-GAAP measure
Corporate - General and administrative
expenses
$
13,367
$
(3,701
)
$
—
$
—
$
9,666
Asset impairment and other
(159
)
—
159
—
—
Operating expenses
570,853
(3,701
)
159
—
567,311
Operating income
232,258
3,701
(159
)
—
235,800
Income before income taxes
189,984
3,701
(159
)
—
193,526
Provision for income taxes
43,827
47
(37
)
2,588
46,425
Net income attributable to TEGNA Inc.
146,065
3,654
(122
)
(2,588
)
147,009
Earnings per share-diluted (a)
$
0.65
$
0.02
$
—
$
(0.01
)
$
0.65
(a) Per share amounts do not sum due to
rounding.
NON-GAAP FINANCIAL INFORMATION
TEGNA Inc.
Unaudited, in thousands of dollars (except
per share amounts)
Table No. 2 (continued)
Special Items
Nine months ended
Sept. 30, 2023
GAAP
measure
M&A- related costs
Retention costs - SBC
Retention costs - Cash
Merger termination fee
Asset impairment and
other
Other non-operating
item
Special tax item
Non-GAAP measure
Cost of revenues
$
1,295,720
$
—
$
(751
)
$
—
$
—
$
—
$
—
$
—
$
1,294,969
Business units - Selling, general and
administrative expenses
294,734
—
(501
)
(639
)
—
—
—
—
293,594
Corporate - General and administrative
expenses
52,158
(19,848
)
(440
)
(553
)
—
—
—
—
31,317
Asset impairment and other
3,359
—
—
—
—
(3,359
)
—
—
—
Merger termination fee
(136,000
)
—
—
—
136,000
—
—
—
—
Operating expenses
1,595,265
(19,848
)
(1,692
)
(1,192
)
136,000
(3,359
)
—
—
1,705,174
Operating income
589,811
19,848
1,692
1,192
(136,000
)
3,359
—
—
479,902
Other non-operating items, net
44,264
—
—
—
—
—
(25,809
)
—
18,455
Total non-operating expenses
(85,633
)
—
—
—
—
—
(25,809
)
—
(111,442
)
Income before income taxes
504,178
19,848
1,692
1,192
(136,000
)
3,359
(25,809
)
—
368,460
Provision for income taxes
103,827
4,552
237
152
(24,504
)
860
(6,604
)
7,959
86,479
Net income attributable to TEGNA Inc.
400,591
15,296
1,455
1,040
(111,496
)
2,499
(19,205
)
(7,959
)
282,221
Earnings per share-diluted (a)
$
1.86
$
0.07
$
0.01
$
—
$
(0.52
)
$
0.01
$
(0.09
)
$
(0.04
)
$
1.31
(a) Per share amounts do not sum due to
rounding.
Special Items
Nine months ended
Sept. 30, 2022
GAAP
measure
M&A- related costs
Asset impairment and
other
Other non-operating
items
Special tax items
Non-GAAP measure
Corporate - General and administrative
expenses
$
48,299
$
(18,147
)
$
—
$
—
$
—
$
30,152
Asset impairment and other
(322
)
—
322
—
—
—
Operating expenses
1,699,699
(18,147
)
322
—
—
1,681,874
Operating income
662,416
18,147
(322
)
—
—
680,241
Other non-operating items, net
16,764
—
—
(18,308
)
—
(1,544
)
Total non-operating expenses
(117,437
)
—
—
(18,308
)
—
(135,745
)
Income before income taxes
544,979
18,147
(322
)
(18,308
)
—
544,496
Provision for income taxes
132,595
85
(78
)
168
(4,529
)
128,241
Net income attributable to TEGNA Inc.
411,868
18,062
(244
)
(18,476
)
4,529
415,739
Earnings per share-diluted
$
1.83
$
0.08
$
—
$
(0.08
)
$
0.02
$
1.85
NON-GAAP FINANCIAL INFORMATION
TEGNA Inc.
Unaudited, in thousands of dollars
Table No. 3
Reconciliations of Adjusted EBITDA to net
income presented in accordance with GAAP on the company's
Consolidated Statements of Income are presented below:
Quarter ended Sept. 30,
2023
2022
2021
Net income attributable to TEGNA Inc.
(GAAP basis)
$
96,183
$
146,065
$
128,280
Plus: Net income attributable to
redeemable noncontrolling interest
71
92
419
Plus: Provision for income taxes
27,801
43,827
36,870
Plus: Interest expense
43,418
43,406
46,477
Plus: Equity loss in unconsolidated
investments, net
256
178
1,790
Less: Other non-operating items, net
(33,072
)
(1,310
)
(2,486
)
Operating income (GAAP basis)
134,657
232,258
211,350
Plus: M&A-related costs
—
3,701
—
Plus: Retention costs - SBC
1,692
—
—
Plus: Retention costs - Cash
1,192
—
—
(Less) Plus: Asset impairment and
other
—
(159
)
504
Adjusted operating income (non-GAAP
basis)
137,541
235,800
211,854
Plus: Depreciation
15,083
15,219
16,792
Plus: Amortization of intangible
assets
13,297
14,953
15,774
Adjusted EBITDA (non-GAAP basis)
$
165,921
$
265,972
$
244,420
Corporate - General and administrative
expense (non-GAAP basis)
12,559
9,666
11,891
Adjusted EBITDA, excluding Corporate
(non-GAAP basis)
$
178,480
$
275,638
$
256,311
Nine months ended Sept. 30,
2023
2022
2021
Net income attributable to TEGNA Inc.
(GAAP basis)
$
400,591
$
411,868
$
347,524
(Less) Plus: Net (loss) income
attributable to redeemable noncontrolling interest
(240
)
516
861
Plus: Provision for income taxes
103,827
132,595
103,470
Plus: Interest expense
129,121
129,976
139,571
Plus: Equity loss in unconsolidated
investments, net
776
4,225
5,716
Less: Other non-operating items, net
(44,264
)
(16,764
)
(4,340
)
Operating income (GAAP basis)
589,811
662,416
592,802
Plus: M&A-related costs
19,848
18,147
—
Plus: Advisory fees related to activism
defense
—
—
16,611
Plus: Retention costs - SBC
1,692
—
—
Plus: Retention costs - Cash
1,192
—
—
Plus (Less): Asset impairment and
other
3,359
(322
)
(2,394
)
Less: Merger termination fee
(136,000
)
—
—
Adjusted operating income (non-GAAP
basis)
479,902
680,241
607,019
Plus: Depreciation
45,119
46,058
48,526
Plus: Amortization of intangible
assets
40,175
44,952
47,307
Adjusted EBITDA (non-GAAP basis)
$
565,196
$
771,251
$
702,852
Corporate - General and administrative
expense (non-GAAP basis)
31,317
30,152
35,333
Adjusted EBITDA, excluding Corporate
(non-GAAP basis)
$
596,513
$
801,403
$
738,185
NON-GAAP FINANCIAL INFORMATION
TEGNA Inc.
Unaudited, in thousands of dollars
Table No. 4
Below is a detail of our primary sources
of revenue presented in accordance with GAAP on company’s
Consolidated Statements of Income. In addition, we show Adjusted
EBITDA and Adjusted EBITDA margins (see non-GAAP reconciliations at
Table No. 3).
Quarter ended Sept. 30,
2023
2022
% Increase
(Decrease)
2021
% Increase
(Decrease)
Subscription
$
377,891
$
377,368
0.1
$
368,672
2.5
Advertising and Marketing Services
312,413
320,764
(2.6
)
364,234
(14.2
)
Political
11,643
92,904
(87.5
)
15,010
(22.4
)
Other
11,296
12,075
(6.5
)
8,571
31.8
Total revenues
$
713,243
$
803,111
(11.2
)
$
756,487
(5.7
)
Adjusted EBITDA
$
165,921
$
265,972
(37.6
)
$
244,420
(32.1
)
Adjusted EBITDA Margin
23.3
%
33.1
%
32.3
%
Nine months ended Sept. 30,
2023
2022
% Increase
(Decrease)
2021
% Increase
(Decrease)
Subscription
$
1,188,297
$
1,158,101
2.6
$
1,130,490
5.1
Advertising and Marketing Services
937,984
1,010,490
(7.2
)
1,027,957
(8.8
)
Political
22,925
161,727
(85.8
)
34,019
(32.6
)
Other
35,870
31,797
12.8
23,980
49.6
Total revenues
$
2,185,076
$
2,362,115
(7.5
)
$
2,216,446
(1.4
)
Adjusted EBITDA
$
565,196
$
771,251
(26.7
)
$
702,852
(19.6
)
Adjusted EBITDA Margin
25.9
%
32.7
%
31.7
%
NON-GAAP FINANCIAL INFORMATION
TEGNA Inc.
Unaudited, in thousands of dollars
Table No. 5
Reconciliations of free cash flow to net
income presented in accordance with GAAP on the company's
Consolidated Statements of Income are presented below:
Quarter ended Sept. 30,
2023
2022
% Increase (Decrease)
Net income attributable to TEGNA Inc.
(GAAP basis)
$
96,183
$
146,065
(34.2
)
Plus: Provision for income taxes
27,801
43,827
(36.6
)
Plus: Interest expense
43,418
43,406
0.0
Plus: M&A-related costs
—
3,701
***
Plus: Depreciation
15,083
15,219
(0.9
)
Plus: Amortization of intangible
assets
13,297
14,953
(11.1
)
Plus: Stock-based compensation
6,558
6,416
2.2
Plus: Company stock 401(k)
contribution
3,924
4,415
(11.1
)
Plus: Syndicated programming
amortization
13,308
17,944
(25.8
)
Plus: Net loss attributable to redeemable
noncontrolling interest
71
92
(22.8
)
Plus: Equity loss in unconsolidated
investments, net
256
178
43.8
Plus: Reimbursement from company-owned
life insurance policies
496
—
***
Plus: Retention costs - cash portion
1,192
—
***
Plus: Cash reimbursements from spectrum
repacking
—
159
***
Less: Asset impairment and other
—
(159
)
***
Less: Other non-operating items, net
(33,072
)
(1,310
)
***
Less: Income tax payments
(26,829
)
(44,291
)
(39.4
)
Less: Syndicated programming payments
(11,940
)
(14,801
)
(19.3
)
Less: Pension contributions
(959
)
(1,052
)
(8.8
)
Less: Interest payments
(73,866
)
(73,932
)
(0.1
)
Less: Purchases of property and
equipment
(14,810
)
(12,433
)
19.1
Free cash flow (non-GAAP basis)
$
60,111
$
148,397
(59.5
)
*** Not meaningful
NON-GAAP FINANCIAL INFORMATION
TEGNA Inc.
Unaudited, in thousands of dollars
Table No. 5 (continued)
Two-year period ended Sept. 30,
2023
Net income attributable to TEGNA Inc.
(GAAP basis)
$
1,160,491
Plus: Provision for income taxes
338,208
Plus: Interest expense
349,222
Plus: M&A-related costs
44,103
Plus: Depreciation
122,629
Plus: Amortization of intangible
assets
115,761
Plus: Stock-based compensation
54,262
Plus: Company stock 401(k)
contribution
36,378
Plus: Syndicated programming
amortization
132,137
Plus: Cash dividend from equity
investments for return on capital
3,344
Plus: Asset impairment and other
3,123
Plus: Net income attributable to
redeemable noncontrolling interest
870
Plus: Reimbursement from Company-owned
life insurance policies
1,895
Plus: Retention costs - cash portion
1,192
Plus: Equity income in unconsolidated
investments, net
9,246
Plus: Cash reimbursements from spectrum
repacking
236
Less: Other non-operating items, net
(68,180
)
Less: Merger termination fees
(136,000
)
Less: Syndicated programming payments
(127,545
)
Less: Income tax payments, net of
refunds
(304,860
)
Less: Pension contributions
(9,599
)
Less: Interest payments
(338,436
)
Less: Purchases of property and
equipment
(104,292
)
Free cash flow (non-GAAP basis)
$
1,284,185
Revenue
$
6,238,968
Free cash flow as a % of revenue
20.6
%
NON-GAAP FINANCIAL INFORMATION
TEGNA Inc.
Unaudited, in thousands of dollars
Table No. 6
Below is a reconciliation of non-GAAP operating expenses to GAAP
operating expenses on the company's Consolidated Statements of
Income:
Quarter ended Sept. 30,
2023
2022
Operating expenses (GAAP basis)
$
578,586
$
570,853
Less: Special items 1, 2
(2,884
)
(3,542
)
Operating expenses (non-GAAP basis)
575,702
567,311
Less: Programming expenses
(252,367
)
(240,912
)
Operating expenses, less Programming
(non-GAAP basis)
$
323,335
$
326,399
1 Q3 2023 special items include retention
costs (see Table 2).
2 Q3 2022 special items include
reimbursements from the FCC for required spectrum repacking and
M&A-related costs (see Table 2).
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231106759199/en/
For media inquiries, contact: Anne Bentley Vice President,
Corporate Communications 703-873-6366 abentley@TEGNA.com
For investor inquiries, contact: Julie Heskett Senior Vice
President, Financial Planning & Analysis 703-873-6401
investorrelations@TEGNA.com
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