Achieves third quarter record total company revenue,
subscription revenue, net income, and Adjusted EBITDA
On track to complete proposed acquisition by an affiliate of
Standard General in the second half of 2022, subject to regulatory
approvals and customary closing conditions
TEGNA Inc. (NYSE: TGNA) today announced financial results for
the third quarter ended September 30, 2022.
THIRD QUARTER FINANCIAL HIGHLIGHTS:
- Total company revenue was a third quarter record of $803
million, up six percent year-over-year, driven by strong growth in
political revenue despite advertising and marketing services
(“AMS”) revenue declines as a result of political displacement,
absence of last year’s summer Olympics, and macroeconomic
headwinds.
- Total company revenue was up nine percent from the third
quarter of 2020 driven by record third quarter subscription revenue
and growth in AMS revenue fueled by Premion, partially offset by
reduced political revenue.
- Subscription revenue was a third quarter record of $377
million, up two percent year-over-year, driven by rate increases
and partially offset by subscriber declines.
- AMS revenue was $321 million in the third quarter, down 12
percent year-over-year due to the absence of summer Olympics across
our large NBC portfolio from third quarter last year, displacement
driven by our strong political revenue in the quarter, and
macroeconomic headwinds.
- Compared to 2020, third quarter AMS revenue was up seven
percent driven by strong growth in advertising categories,
including entertainment, services, home improvement, travel and
tourism, partially offset by continued softness in auto and
insurance in this two-year comparison.
- Political revenue was $93 million, up 28 percent from 2018, the
last non-presidential election year, on a pro forma basis1.
- TEGNA achieved record third quarter net income of $146 million
on a GAAP basis, or $147 million on a non-GAAP basis.
1 “Pro forma” reflects our 2019
acquisitions of certain television stations divested by Gray,
Dispatch, Nexstar and Tribune as if they had been completed on
January 1, 2018
- Total company Adjusted EBITDA2 was a third quarter record of
$266 million, representing an increase of nine percent compared to
the third quarter of 2021.
- Third quarter Adjusted EBITDA was up three percent compared to
the third quarter of 2020 reflecting growth in subscription and AMS
revenues, partially offset by reduced political revenue due to the
absence of presidential ad spending.
- GAAP operating expenses were $571 million, up five percent
year-over-year, and non-GAAP operating expenses were $567 million,
up four percent year-over-year, with the increases predominantly
driven by investments in Premion’s growth and programming costs.
- Non-GAAP expenses less Premion costs increased two percent from
the third quarter of 2021, driven primarily by programming
expenses.
- Non-GAAP operating expenses less programming and Premion costs
were down two percent compared to the third quarter of 2021.
- GAAP and non-GAAP operating income totaled $232 million and
$236 million, respectively.
- Interest expense decreased to $43 million compared to $46
million in the third quarter of 2021 due to lower average debt,
partially offset by a higher average interest rate.
- GAAP and non-GAAP earnings per diluted share were both $0.65 in
the third quarter of 2022.
- Free cash flow3 was $148 million for the quarter.
- For the trailing two-year period ending September 30, 2022,
free cash flow as a percentage of revenue was 22.6 percent.
- The Company ended the quarter with total debt of $3.1 billion
and net leverage of 2.53x.
- Total cash at the end of the quarter was $377 million.
TRANSACTION OVERVIEW
On February 22, 2022, TEGNA Inc. and Standard General L.P.
announced that TEGNA and an affiliate of Standard General entered
into a definitive agreement under which TEGNA will be acquired by
the Standard General affiliate for $24.00 per share in cash. TEGNA
stockholders voted to approve the transaction at the special
meeting of stockholders held on May 17, 2022. The closing of the
transaction, which is still expected to occur in the second half of
2022, is subject to regulatory approvals and other customary
closing conditions.
As a result of the pending transaction and as previously
announced, TEGNA expects to continue to pay its regular quarterly
dividend through the closing of the transaction, but has suspended
share repurchases under our previously announced share repurchase
program.
2 A non-GAAP measure detailed in Table
3
3 A non-GAAP measure detailed in Table
5
RECENT CONTENT, PROGRAMMING AND ESG UPDATES
- Continued Momentum on 2025 Diversity, Equity, and Inclusion
Goals – TEGNA continued to make progress on our stated 2025
DE&I goals to improve Black, Indigenous and People of Color
(BIPOC) representation across TEGNA’s content teams, content
leadership and company leadership, enabling us to better reflect
the communities we serve. From the launch of our goals in Q1 2021
through September 2022, BIPOC representation grew from 27% to 32%
in content teams, from 17% to 23% in content leadership and from
16% to 20% in company leadership.
- TEGNA Reached Comprehensive, Multi-Year Affiliation Agreement
Renewals with Two Big Four Networks – During the quarter, TEGNA and
CBS Corporation reached a comprehensive multi-year deal that renews
station affiliation agreements for 15 TEGNA markets nationwide,
including Washington, D.C., Houston, Tampa, and San Diego. These
CBS markets cover approximately 30 percent of TEGNA households.
TEGNA and FOX Corporation also reached a multi-year deal that took
effect in the third quarter that renews station affiliations for
six TEGNA stations, including Hartford and Harrisburg. These FOX
markets cover approximately six percent of TEGNA households.
- Premion Received TAG Brand Safety Certified Seal – Premion
recently achieved the TAG Brand Safety Certified Seal from the
Trustworthy Accountability Group (TAG). Created by the American
Association of Advertising Agencies (4A’s), Association of National
Advertisers (ANA) and Interactive Advertising Bureau (IAB), TAG is
the leading global certification program fighting criminal
activity, increasing trust and promoting brand safety in the
digital advertising industry. In 2020, Premion earned the TAG
Certified Against Fraud Seal.
- Stations’ Live, Local and Always On Streaming Apps and Channels
Top 1 Billion Minutes of Watch Time – TEGNA stations’ new
over-the-top (OTT) streaming apps and 24-7 streaming channels
available on Roku and Fire TV reached 1 billion minutes of watch
time year-to-date through the end of the third quarter. Stations’
apps feature live local news, newscast replays, extended live
coverage, weather and station specials and investigations.
- VERIFY Sees Continued Growth in Video Views and Followers –
VERIFY, TEGNA’s national brand that combats disinformation, saw
video views grow by 104 percent on VerifyThis.com and more than 74
percent on YouTube compared to the second quarter. VERIFY’s weekly
show on stations’ OTT apps topped 1.6 million minutes watched.
VERIFY now has more than 340,000 followers across its various
dedicated channels, including more than 100,000 on TikTok. Across
platforms, viewers searched for trusted and accurate information
surrounding their finances, including news about the economy,
student loans and social security.
- TEGNA Stations in Tampa and Jacksonville Provided Lifesaving
Information on Hurricane Ian – WTSP in Tampa and First Coast News
in Jacksonville provided critical Hurricane Ian information to
on-air viewers and digital users, including on YouTube and station
streaming apps. From September 25-October 2, more than 2.2 million
people visited WTSP’s and First Coast News’ digital platforms to
seek information about the storm. On these stations’ YouTube
channels, there were a combined 18.4 million video plays. On these
stations’ streaming apps, in Tampa, there were 1.3 million minutes
watched and, at First Coast News, more than 900,000 minutes.
- Locked On’s Audience Rises to 20 Million Per Month – For the
first time, Locked On Podcast Network’s monthly audience of audio
downloads and video views is now more than 20 million per month.
The network achieved that threshold in September, more than
doubling its monthly audience year-over-year. While the network’s
audience has grown dramatically across every major sport covered by
its lineup of daily audio and video podcasts, including NFL, NBA,
NCAA, MLB, and NHL teams, growth for college podcasts (242%) and
hockey podcasts (190%) year-to-date through September are leading
the way.
- TEGNA Stations Received Six National Edward R. Murrow Awards
for Excellence in Broadcast Journalism – KUSA in Denver, KARE in
Minneapolis, WFAA in Dallas, KREM in Spokane, and News Center Maine
received prestigious National Edward R. Murrow Awards for their
impactful work, including awards for Overall Excellence in Large
Market Television for KUSA and Hard News, Large Market and
Excellence in Writing for KARE. (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. 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.
These risks, uncertainties and other factors include, but are not
limited to, those discussed under “Risk Factors” in the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31,
2021 and Quarterly Reports on Form 10-Q, including the following:
(1) the timing, receipt and terms and conditions of any required
governmental or regulatory approvals of the proposed transaction
between TEGNA and affiliates of Standard General and the related
transactions involving the parties to the proposed transaction that
could reduce the anticipated benefits of or cause the parties to
abandon the proposed transaction, (2) risks related to the
satisfaction of the conditions to closing the proposed transaction
(including the failure to obtain necessary regulatory approvals),
and the related transactions involving the parties to the proposed
transaction, in the anticipated timeframe or at all, (3) the risk
that any announcements relating to the proposed transaction could
have adverse effects on the market price of the Company’s common
stock, (4) disruption from the proposed transaction could make it
more difficult to maintain business and operational relationships,
including retaining and hiring key personnel and maintaining
relationships with the Company’s customers, vendors and others with
whom it does business, (5) the occurrence of any event, change or
other circumstances that could give rise to the termination of the
merger agreement entered into pursuant to the proposed transaction
or of the transactions involving the parties to the proposed
transaction, (6) risks related to disruption of management’s
attention from the Company’s ongoing business operations due to the
proposed transaction, (7) significant transaction costs, (8) the
risk of litigation and/or regulatory actions related to the
proposed transaction or unfavorable results from currently pending
litigation and proceedings or litigation and proceedings that could
arise in the future, (9) other business effects, including the
effects of industry, market, economic, political or regulatory
conditions, (10) information technology system failures, data
security breaches, data privacy compliance, network disruptions,
and cybersecurity, malware or ransomware attacks, and (11) changes
resulting from the COVID-19 pandemic (including the effect of
COVID-19 on the Company’s revenues, particularly its nonpolitical
advertising revenues), which could exacerbate any of the risks
described above. Potential regulatory actions, changes in consumer
behaviors and impacts on and modifications to the Company’s
operations and business relating thereto and the Company’s ability
to execute on its standalone plan can also cause actual results to
differ materially. The Company is not responsible for updating the
information contained in this press release beyond the published
date, or for changes made to this press release by wire service,
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. The factors described above cannot be
controlled by the Company. 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 management are intended to
identify forward-looking statements. Forward-looking statements in
this communication may include, without limitation: statements
about the potential benefits of the proposed acquisition,
anticipated growth rates, the Company’s plans, objectives,
expectations, and the anticipated timing of closing the proposed
transaction.
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,
2022
2021
% Increase (Decrease)
Revenues
$
803,111
$
756,487
6.2
Operating expenses:
Cost of revenues
428,891
399,751
7.3
Business units - Selling, general and
administrative expenses
98,582
100,425
(1.8
)
Corporate - General and administrative
expenses
13,367
11,891
12.4
Depreciation
15,219
16,792
(9.4
)
Amortization of intangible assets
14,953
15,774
(5.2
)
Spectrum repacking reimbursements and
other, net
(159
)
504
***
Total
570,853
545,137
4.7
Operating income
232,258
211,350
9.9
Non-operating (expense) income:
Equity loss in unconsolidated investments,
net
(178
)
(1,790
)
(90.1
)
Interest expense
(43,406
)
(46,477
)
(6.6
)
Other non-operating items, net
1,310
2,486
(47.3
)
Total
(42,274
)
(45,781
)
(7.7
)
Income before income taxes
189,984
165,569
14.7
Provision for income taxes
43,827
36,870
18.9
Net income
146,157
128,699
13.6
Net income attributable to redeemable
noncontrolling interest
(92
)
(419
)
(78.0
)
Net income attributable to TEGNA
Inc.
$
146,065
$
128,280
13.9
Earnings per share:
Basic
$
0.65
$
0.58
12.1
Diluted
$
0.65
$
0.58
12.1
Weighted average number of common
shares outstanding:
Basic shares
223,968
221,805
1.0
Diluted shares
224,921
222,799
1.0
*** 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,
2022
2021
% Increase (Decrease)
Revenues
$
2,362,115
$
2,216,446
6.6
Operating expenses:
Cost of revenues
1,260,576
1,191,561
5.8
Business units - Selling, general and
administrative expenses
300,136
286,700
4.7
Corporate - General and administrative
expenses
48,299
51,944
(7.0
)
Depreciation
46,058
48,526
(5.1
)
Amortization of intangible assets
44,952
47,307
(5.0
)
Spectrum repacking reimbursements and
other, net
(322
)
(2,394
)
(86.5
)
Total
1,699,699
1,623,644
4.7
Operating income
662,416
592,802
11.7
Non-operating (expense) income:
Equity loss in unconsolidated investments,
net
(4,225
)
(5,716
)
(26.1
)
Interest expense
(129,976
)
(139,571
)
(6.9
)
Other non-operating items, net
16,764
4,340
***
Total
(117,437
)
(140,947
)
(16.7
)
Income before income taxes
544,979
451,855
20.6
Provision for income taxes
132,595
103,470
28.1
Net income
412,384
348,385
18.4
Net income attributable to redeemable
noncontrolling interest
(516
)
(861
)
(40.1
)
Net income attributable to TEGNA
Inc.
$
411,868
$
347,524
18.5
Earnings per share:
Basic
$
1.84
$
1.57
17.2
Diluted
$
1.83
$
1.56
17.3
Weighted average number of common
shares outstanding:
Basic shares
223,456
221,314
1.0
Diluted shares
224,221
222,172
0.9
*** 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 spectrum repacking
reimbursements and other, net, M&A-related costs, advisory fees
related to activism defense, certain non-operating items such as a
gain on an available for sale investment, and a valuation gain from
an investment 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, a partial capital
loss valuation allowance release, and deferred tax benefits related
to state tax planning strategies.
The company believes that such expenses and gains are not
indicative of normal, ongoing operations. While these items may be
recurring in nature and 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
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 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) M&A-related costs, (7)
advisory fees related to activism defense, (8) spectrum repacking
reimbursements and other, net, (9) depreciation and (10)
amortization. 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, 2022
GAAP measure
M&A-related costs
Spectrum repacking
reimbursements and other
Special tax item
Non-GAAP measure
Corporate - General and administrative
expenses
$
13,367
$
(3,701
)
$
—
$
—
$
9,666
Spectrum repacking reimbursements and
other, net
(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.
Special Items
Quarter ended Sept. 30, 2021
GAAP measure
Spectrum repacking
reimbursements and other
Other non- operating
items
Special tax items
Non-GAAP measure
Spectrum repacking reimbursements and
other, net
$
504
$
(504
)
$
—
$
—
$
—
Operating expenses
545,137
(504
)
—
—
544,633
Operating income
211,350
504
—
—
211,854
Other non-operating items, net
2,486
—
(1,941
)
—
545
Income before income taxes
165,569
504
(1,941
)
—
164,132
Provision for income taxes
36,870
115
(502
)
4,347
40,830
Net income attributable to TEGNA Inc.
128,280
389
(1,439
)
(4,347
)
122,883
Earnings per share-diluted
$
0.58
$
—
$
(0.01
)
$
(0.02
)
$
0.55
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,
2022
GAAP measure
M&A-related costs
Spectrum repacking
reimbursements and other
Other non- operating
items
Special tax item
Non-GAAP measure
Corporate - General and administrative
expenses
$
48,299
$
(18,147
)
$
—
$
—
$
—
$
30,152
Spectrum repacking reimbursements and
other, net
(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
Special Items
Nine months ended Sept. 30,
2021
GAAP measure
Advisory fees related to
activism defense
Spectrum repacking
reimbursements and other
Other non- operating
items
Special tax items
Non-GAAP measure
Corporate - General and administrative
expenses
$
51,944
$
(16,611
)
$
—
$
—
$
—
$
35,333
Spectrum repacking reimbursements and
other, net
(2,394
)
—
2,394
—
—
—
Operating expenses
1,623,644
(16,611
)
2,394
—
—
1,609,427
Operating income
592,802
16,611
(2,394
)
—
—
607,019
Equity income (loss) in unconsolidated
investments, net
(5,716
)
—
—
—
—
(5,716
)
Other non-operating items, net
4,340
—
—
(1,941
)
—
2,399
Total non-operating expenses
(140,947
)
—
—
(1,941
)
—
(142,888
)
Income before income taxes
451,855
16,611
(2,394
)
(1,941
)
—
464,131
Provision for income taxes
103,470
4,291
(626
)
(502
)
7,144
113,777
Net income attributable to TEGNA Inc.
347,524
12,320
(1,768
)
(1,439
)
(7,144
)
349,493
Earnings per share-diluted
$
1.56
$
0.06
$
(0.01
)
$
(0.01
)
$
(0.03
)
$
1.57
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,
2022
2021
2020
Net income attributable to TEGNA Inc.
(GAAP basis)
$
146,065
$
128,280
$
132,219
Plus: Net income attributable to
redeemable noncontrolling interest
92
419
51
Plus: Provision for income taxes
43,827
36,870
41,967
Plus: Interest expense
43,406
46,477
51,896
Plus: Equity loss in unconsolidated
investments, net
178
1,790
2,529
Less: Other non-operating items, net
(1,310
)
(2,486
)
(961
)
Operating income (GAAP basis)
232,258
211,350
227,701
Plus: Workforce restructuring expense
—
—
1,021
Plus: M&A-related costs
3,701
—
—
Less (Plus): Spectrum repacking
reimbursements and other, net
(159
)
504
(2,902
)
Adjusted operating income (non-GAAP
basis)
235,800
211,854
225,820
Plus: Depreciation
15,219
16,792
16,086
Plus: Amortization of intangible
assets
14,953
15,774
17,113
Adjusted EBITDA (non-GAAP basis)
$
265,972
$
244,420
$
259,019
Corporate - General and administrative
expense (non-GAAP basis)
9,666
11,891
11,209
Adjusted EBITDA, excluding Corporate
(non-GAAP basis)
$
275,638
$
256,311
$
270,228
Nine months ended Sept. 30,
2022
2021
2020
Net income attributable to TEGNA Inc.
(GAAP basis)
$
411,868
$
347,524
$
238,474
Plus (Less): Net income (loss)
attributable to redeemable noncontrolling interest
516
861
(433
)
Plus: Provision for income taxes
132,595
103,470
69,699
Plus: Interest expense
129,976
139,571
160,733
Plus (Less): Equity loss (income) in
unconsolidated investments, net
4,225
5,716
(8,407
)
(Less) Plus: Other non-operating items,
net
(16,764
)
(4,340
)
17,270
Operating income (GAAP basis)
662,416
592,802
477,336
Plus: Workforce restructuring expense
—
—
1,021
Plus: M&A and acquisition-related
costs
18,147
—
4,588
Plus: Advisory fees related to activism
defense
—
16,611
23,087
Less: Spectrum repacking reimbursements
and other, net
(322
)
(2,394
)
(10,533
)
Adjusted operating income (non-GAAP
basis)
680,241
607,019
495,499
Plus: Depreciation
46,058
48,526
49,697
Plus: Amortization of intangible
assets
44,952
47,307
50,577
Adjusted EBITDA (non-GAAP basis)
$
771,251
$
702,852
$
595,773
Corporate - General and administrative
expense (non-GAAP basis)
30,152
35,333
33,560
Adjusted EBITDA, excluding Corporate
(non-GAAP basis)
$
801,403
$
738,185
$
629,333
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,
2022
2021
% Increase (Decrease)
2020
% Increase (Decrease)
Subscription
$
377,368
$
368,672
2.4
$
316,677
19.2
Advertising and Marketing Services
320,764
364,234
(11.9
)
298,605
7.4
Political
92,904
15,010
***
116,494
(20.2
)
Other
12,075
8,571
40.9
6,613
82.6
Total revenues
$
803,111
$
756,487
6.2
$
738,389
8.8
Adjusted EBITDA
$
265,972
$
244,420
8.8
$
259,019
2.7
Adjusted EBITDA Margin
33.1
%
32.3
%
35.1
%
Nine months ended Sept. 30,
2022
2021
% Increase (Decrease)
2020
% Increase (Decrease)
Subscription
$
1,158,101
$
1,130,490
2.4
$
972,954
19.0
Advertising and Marketing Services
1,010,490
1,027,957
(1.7
)
822,841
22.8
Political
161,727
34,019
***
181,425
(10.9
)
Other
31,797
23,980
32.6
22,985
38.3
Total revenues
$
2,362,115
$
2,216,446
6.6
$
2,000,205
18.1
Adjusted EBITDA
$
771,251
$
702,852
9.7
$
595,773
29.5
Adjusted EBITDA Margin
32.7
%
31.7
%
29.8
%
*** Not meaningful
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,
2022
2021
% Increase (Decrease)
Net income attributable to TEGNA Inc.
(GAAP basis)
$
146,065
$
128,280
13.9
Plus: Provision for income taxes
43,827
36,870
18.9
Plus: Interest expense
43,406
46,477
(6.6
)
Plus: M&A-related costs
3,701
—
***
Plus: Depreciation
15,219
16,792
(9.4
)
Plus: Amortization
14,953
15,774
(5.2
)
Plus: Stock-based compensation
6,416
6,965
(7.9
)
Plus: Company stock 401(k)
contribution
4,415
4,191
5.3
Plus: Syndicated programming
amortization
17,944
17,706
1.3
Plus: Cash dividend from equity
investments for return on capital
—
894
***
Plus: Cash reimbursements from spectrum
repacking
159
592
(73.1
)
Plus: Net income attributable to
redeemable noncontrolling interest
92
419
(78.0
)
Plus: Equity loss in unconsolidated
investments, net
178
1,790
(90.1
)
Plus: Reimbursement from company-owned
life insurance policies
—
530
***
Less: Other non-operating items, net
(1,310
)
(2,486
)
(47.3
)
Less: Income tax payments
(44,291
)
(29,001
)
52.7
(Less) Plus: Spectrum repacking
reimbursements and other, net
(159
)
504
***
Less: Syndicated programming payments
(14,801
)
(18,669
)
(20.7
)
Less: Pension contributions
(1,052
)
(3,532
)
(70.2
)
Less: Interest payments
(73,932
)
(74,802
)
(1.2
)
Less: Purchases of property and
equipment
(12,433
)
(11,797
)
5.4
Free cash flow (non-GAAP basis)
$
148,397
$
137,497
7.9
*** Not meaningful
NON-GAAP FINANCIAL INFORMATION
TEGNA Inc.
Unaudited, in thousands of dollars
Table No. 5 (continued)
Two-year period ended Sept. 30,
2022
Net income attributable to TEGNA Inc.
(GAAP basis)
$
1,133,127
Plus: Provision for income taxes
352,670
Plus: Interest expense
365,187
Plus: M&A-related costs
21,885
Plus: Depreciation
128,082
Plus: Amortization
125,076
Plus: Stock-based compensation
62,868
Plus: Company stock 401(k)
contribution
34,932
Plus: Syndicated programming
amortization
142,980
Plus: Advisory fees related to activism
defense
16,611
Plus: Cash dividend from equity
investments for return on capital
6,035
Plus: Cash reimbursements from spectrum
repacking
5,774
Plus: Net income attributable to
redeemable noncontrolling interest
2,176
Plus: Reimbursement from Company-owned
life insurance policies
1,456
Plus: Equity loss in unconsolidated
investments, net
11,948
Less: Spectrum repacking reimbursements
and other, net
(2,051
)
Less: Other non-operating items, net
(6,830
)
Less: Syndicated programming payments
(146,021
)
Less: Income tax payments, net of
refunds
(348,387
)
Less: Pension contributions
(10,250
)
Less: Interest payments
(364,287
)
Less: Purchases of property and
equipment
(113,519
)
Free cash flow (non-GAAP basis)
$
1,419,462
Revenue
$
6,290,783
Free cash flow as a % of revenue
22.6
%
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,
2022
2021
Operating expenses (GAAP basis)
$
570,853
$
545,137
Less: Special items 1, 2
(3,542
)
(504
)
Operating expenses (non-GAAP basis)
567,311
544,633
Less: Premion expenses
(55,996
)
(40,908
)
Operating expenses, less Premion (non-GAAP
basis)
$
511,315
$
503,725
Less: Programming expenses
(240,912
)
(229,074
)
Operating expenses, less Premion and
programming (non-GAAP basis)
$
270,403
$
274,651
1 Q3 2022 special items include
reimbursements from the FCC for required spectrum repacking and
M&A-related costs (see Table 2).
2 Q3 2021 special items include
reimbursements from the FCC for required spectrum repacking and the
write off of certain fixed assets (see Table 2).
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221108006002/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 703-873-6747
investorrelations@TEGNA.com
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