Mike Steib to succeed David Lougee as President, CEO and
Director, effective August 12, 2024
Achieved second quarter key guidance metrics and reaffirms
full-year guidance
Returned $93 million of capital to shareholders, on track to
meet commitment to return approximately $350 million of capital in
2024
Appointed two new independent Directors to the Board of
Directors
TEGNA Inc. (NYSE: TGNA) today announced financial results for
the second quarter ended June 30, 2024.
SECOND QUARTER FINANCIAL HIGHLIGHTS:
All Year-Over-Year Comparisons Unless Otherwise Noted:
- Total company revenue decreased 3% to $710 million, at the
midpoint of our guidance range, primarily due to lower subscription
and advertising and marketing services (“AMS”) revenues partially
offset by higher political advertising dollars.
- Subscription revenue decreased 7% to $367 million, primarily
due to subscriber declines partially offset by contractual rate
increases.
- AMS revenue decreased 5% to $301 million due to softness in
demand from national accounts.
- GAAP operating expenses increased 26% to $569 million primarily
due to the receipt of a $136 million merger termination fee
reflected in last year’s results. Non-GAAP operating expenses1 were
flat benefiting from our initial set of cost transformation
initiatives.
- GAAP and non-GAAP operating income1 totaled $142 million and
$147 million, respectively.
- GAAP net income attributable to TEGNA Inc. was $82 million and
non-GAAP net income attributable to TEGNA Inc.1 was $86
million.
- GAAP and non-GAAP earnings per diluted share1 were $0.48 and
$0.50, respectively.
- Total company Adjusted EBITDA2 decreased 10% to $176 million
primarily due to lower subscription and AMS revenue partially
offset by higher political revenues.
___________________________________________
1 See Table 3 for details
2 See Table 4 for details
“Results for the second quarter fell within our guidance range,
underscoring TEGNA’s ability to effectively manage what we can
control in the current macroeconomic environment,” said Dave
Lougee, president and chief executive officer. “As we look ahead to
the back half of the year, it is shaping up to be another robust
political cycle. We are encouraged by the unprecedented energy and
additional fundraising taking place that could result in record
spending following the Democratic National Convention through
election day. The substantial cash raised from both sides of the
ticket thus far gives us high confidence that ad spending will be
very healthy this election season. Our footprint and scale provide
us with a competitive advantage during election years, particularly
those with tight races in key battleground states. In addition,
Premion is also experiencing growing demand from political
advertisers for a multi-faceted programmatic and managed service
approach to executing data-driven and outcomes-based CTV
campaigns.”
Mr. Lougee continued, “Aiding our confidence in the second half
of the year is the early success of the Summer Olympics in Paris as
well as the expanded distribution of the WNBA Indiana Fever and NHL
Seattle Kraken games. We built on our relationship with the Seattle
Kraken and are now slated to broadcast the team’s games
over-the-air not only on our Seattle, Portland and Spokane stations
beginning in October, but also in Alaska through a partnership with
Gray Media Group. Our continued expansion in sports broadcasting
further highlights our strong station brands and distribution
capabilities in key markets. Looking ahead, we remain focused on
utilizing our disciplined capital allocation framework and organic
growth engine to maximize long-term value for our shareholders and
execute strategic initiatives to drive profitable growth.”
Mr. Lougee concluded, “As I approach my final days as CEO, I
want to thank all our TEGNA stakeholders for making the last seven
years leading this great organization the highlight of my career. I
am extremely enthused about the addition of Mike Steib as my
successor, with his strong track record of performance and results.
Mike has hands-on experience developing high-performing teams that
build industry-defining products and brands, which have delivered
extraordinary shareholder returns. His passion for the vital role
we play in local communities across this country will help the team
build on our purpose-driven focus as a company. I look forward to
following Mike’s journey closely and to being a trusted advisor to
him through this transition.”
KEY STRATEGIC UPDATES:
- Mike Steib to Succeed David Lougee as President, CEO and a
Director as of August 12, 2024 – Steib is the former CEO of Artsy,
the world’s largest online platform for discovering and collecting
art, and previously served as president and CEO of XO Group (NYSE:
XOXO), parent company of The Knot. Prior to those roles, he spent
10 years in executive positions at NBCUniversal and Google
launching, scaling, and acquiring advertising-supported businesses.
(Press Release)
- TEGNA Board of Directors Appoints Two New Independent Directors
as of July 1, 2024 – As part of its regular refreshment process,
the Board appointed two new independent directors, Catherine
Dunleavy, the incoming COO and CFO of Olaplex, who also has
experience as a media and finance executive with Away, NIKE and
NBCUniversal, and Denmark West, who heads Market Intelligence and
Strategic Engagements at X, The Moonshot Factory, a division of
Alphabet. (Press Release)
- TEGNA’s NBC Stations Head to the Paris 2024 Olympics – TEGNA
journalists traveled to Paris to bring the emotion and excitement
of 100 local athletes participating in the Summer Olympic Games
home to our local communities. TEGNA stations are producing
“Olympic Zone,” airing before primetime NBC coverage and featuring
stations’ top personalities who provide an inspiring look at the
games, local athletes and their families.
- Indiana Fever Broadcasts in 12 Markets Grows Advertiser and
Sponsorship Opportunities – In the second quarter, on the heels of
our initial WTHR (Indianapolis) deal to carry Indiana Fever games
in April, TEGNA expanded distribution of free over-the-air
broadcasts of Fever games to 11 additional markets in May, which
include TEGNA stations WOI (Des Moines), WQAD (Quad Cities) and
WHAS (Louisville) and stations owned by Gray Media, Sinclair,
Nexstar Media Group, Inc., Coastal Television Broadcasting Group
and Weigel Broadcasting Co. Games aired on TEGNA stations during
the quarter have experienced excellent audience and sponsor
reaction. (Press Release)
- TEGNA Signs Multi-Year Distribution Agreement with NHL’s
Seattle Kraken for Upcoming Season – TEGNA’s partnership with the
Seattle Kraken to air games for free over-the-air begins in October
across Washington, Oregon, and Alaska, marking a significant
expansion in access for fans throughout the Pacific Northwest.
(Press Release)
- TEGNA Named 2024 Honoree of The Civic 50 and Telecommunications
Sector Leader – The Civic 50 by Points of Light named TEGNA one of
the most community-minded companies in the U.S. for a fifth
consecutive year and Telecommunications Sector Leader for a fourth
year. (Press Release)
- TEGNA Stations Honored with 73 Regional Edward R. Murrow Awards
– TEGNA stations garnered six overall excellence, seven diversity,
equity and inclusion and five innovation awards. TEGNA stations
received more honors in these categories than any other local
broadcast station group. (Press Release)
CAPITAL ALLOCATION, LEVERAGE, AND LIQUIDITY:
- The company continues to expect to return 40-60% of Adjusted
free cash flow3 generated in 2024-2025 to shareholders through
share repurchases and dividends, including approximately $350
million in 2024 through dividends and share repurchases.
- During the second quarter, the company returned $93 million of
capital to shareholders, with $72 million in share repurchases,
representing 5.1 million shares, and $21 million in dividends.
- Interest expense fell slightly to $42 million due to decreased
undrawn fees on the company’s revolving credit facility.
- As noted last quarter, the company’s Board approved a 10%
increase to the company’s regular quarterly dividend, from 11.375
to 12.5 cents per share. This increase was reflected for the first
time in dividends paid to eligible shareholders in July.
- Cash flow from operating activities was $125 million for the
quarter and $225 million for the first six months.
- Adjusted free cash flow was $131 million for the quarter and
$230 million for the first six months.
- The company is reaffirming its expectation of 2024-2025
two-year Adjusted free cash flow guidance range of $900
million-$1.1 billion.
- Cash and cash equivalents totaled $446 million at the end of
the second quarter. Net leverage finished the second quarter at
2.9x4.
___________________________________________ 3 See Table 5 for
details
FULL-YEAR AND THIRD QUARTER 2024 OUTLOOK:
Full-Year 2024 Key Guidance
Metrics
TEGNA is reaffirming its guidance metrics
for the full year of 2024 and improving the effective tax rate
2024/2025 Two-Year Adjusted FCF
$900 million – 1.1 billion
Net Leverage Ratio
Below 3x at year end
Corporate Expenses
$40 – 45 million
Depreciation
$56 – 60 million
Amortization
$51 – 55 million
Interest Expense
$170 – 173 million
Capital Expenditures
$62 – 67 million
Effective Tax Rate
22.5 – 23.5%
Third Quarter 2024 Key Guidance
Metrics
Reflects expectations relative to third
quarter 2023 results
Total company GAAP Revenue
Up 9% to 12%
Total Non-GAAP Operating Expenses
Flat to down slightly
CONFERENCE CALL
TEGNA will host a conference call and webcast on Wednesday,
August 7, 2024, to discuss the company’s financial results and
other business matters. The teleconference will begin at 10:00 a.m.
Eastern Time and will be hosted by Dave Lougee, Chief Executive
Officer, and Julie Heskett, Chief Financial Officer.
The conference call will be webcast through the company’s
website, and is open to investors, the financial community, the
media and other members of the public. To access the meeting by
phone, please visit investors.TEGNA.com at least 10 minutes prior
to the scheduled start time to access the links and register before
the conference call begins. Once registered, phone participants
will receive dial-in numbers and a unique PIN to seamlessly access
the call.
________________________
4 See Table 6 for details
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 capital
allocation plan, including dividends, share repurchases, and/or
strategic acquisitions, investments, and partnerships may not
enhance long-term stockholder value; legal proceedings, judgments
or settlements; 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 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
Quarters ended June
30,
2024
2023
Change
Revenues
$
710,363
$
731,506
(3
%)
Operating expenses:
Cost of revenues
432,044
430,528
0
%
Business units - Selling, general and
administrative expenses
94,938
97,231
(2
%)
Corporate - General and administrative
expenses
12,685
26,506
(52
%)
Depreciation
15,173
14,987
1
%
Amortization of intangible assets
13,663
13,296
3
%
Asset impairment and other
—
3,359
***
Merger termination fee
—
(136,000
)
***
Total
568,503
449,907
26
%
Operating income
141,860
281,599
(50
%)
Non-operating (expense) income:
Interest expense
(41,748
)
(42,797
)
(2
%)
Interest income
5,873
8,536
(31
%)
Other non-operating items, net
(2,749
)
(3,038
)
(10
%)
Total
(38,624
)
(37,299
)
4
%
Income before income taxes
103,236
244,300
(58
%)
Provision for income taxes
21,207
44,207
(52
%)
Net income
82,029
200,093
(59
%)
Net loss attributable to redeemable
noncontrolling interest
115
12
***
Net income attributable to TEGNA
Inc.
$
82,144
$
200,105
(59
%)
Earnings per share:
Basic
$
0.48
$
0.92
(48
%)
Diluted
$
0.48
$
0.92
(48
%)
Weighted average number of common
shares outstanding:
Basic shares
169,512
217,830
(22
%)
Diluted shares
169,880
217,979
(22
%)
*** Not meaningful
CONSOLIDATED STATEMENTS OF
INCOME
TEGNA Inc.
Unaudited, in thousands of dollars (except
per share amounts)
Table No. 1 (continued)
Six months ended June
30,
2024
2023
Change
Revenues
$
1,424,615
$
1,471,833
(3
%)
Operating expenses:
Cost of revenues
862,611
857,460
1
%
Business units - Selling, general and
administrative expenses
197,198
196,340
0
%
Corporate - General and administrative
expenses
27,483
38,606
(29
%)
Depreciation
29,483
30,036
(2
%)
Amortization of intangible assets
27,323
26,878
2
%
Asset impairment and other
1,097
3,359
(67
%)
Merger termination fee
—
(136,000
)
***
Total
1,145,195
1,016,679
13
%
Operating income
279,420
455,154
(39
%)
Non-operating (expense) income:
Interest expense
(84,116
)
(85,703
)
(2
%)
Interest income
11,446
16,109
(29
%)
Other non-operating items, net
147,009
(5,437
)
***
Total
74,339
(75,031
)
***
Income before income taxes
353,759
380,123
(7
%)
Provision for income taxes
82,468
76,026
8
%
Net income
271,291
304,097
(11
%)
Net loss attributable to redeemable
noncontrolling interest
413
311
33
%
Net income attributable to TEGNA
Inc.
$
271,704
$
304,408
(11
%)
Earnings per share:
Basic
$
1.56
$
1.37
14
%
Diluted
$
1.55
$
1.37
13
%
Weighted average number of common
shares outstanding:
Basic shares
173,668
221,168
(21
%)
Diluted shares
174,158
221,391
(21
%)
*** Not meaningful
REVENUE CATEGORIES
TEGNA Inc.
Unaudited, in thousands of dollars
Table No. 2
Below is a detail of our primary sources
of revenue:
Quarters ended June
30,
2024
2023
Change
Subscription
$
367,025
$
396,126
(7%)
Advertising & Marketing Services
300,977
317,726
(5%)
Political
31,643
5,991
***
Other
10,718
11,663
(8%)
Total revenues
$
710,363
$
731,506
(3%)
Six months ended June
30,
2024
2023
Change
Subscription
$
742,349
$
810,406
(8%)
Advertising & Marketing Services
599,669
625,571
(4%)
Political
59,471
11,282
***
Other
23,126
24,574
(6%)
Total revenues
$
1,424,615
$
1,471,833
(3%)
*** Not meaningful
USE OF NON-GAAP
INFORMATION
The company uses non-GAAP financial performance and liquidity
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 (the "Board")
regularly use Corporate–General and administrative expenses,
Operating expenses, Operating income, Income before income taxes,
Provision for income taxes, Net income attributable to TEGNA Inc.,
and Diluted earnings per share, each presented on a non-GAAP basis,
for purposes of evaluating company performance. Management and the
Board also use Adjusted EBITDA and Adjusted free cash flow to
evaluate company performance and liquidity, respectively. The
Leadership Development and Compensation Committee of our Board uses
non-GAAP measures such as Adjusted EBITDA, non-GAAP net income,
non-GAAP EPS, and Adjusted free cash flow to evaluate and
compensate senior management. The Board uses Adjusted free cash
flow in its periodic assessments of, among other things,
repurchases of the company’s common stock, the company’s dividends,
strategic opportunities and long-term debt retirement. 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, 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 and liquidity 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, workforce restructuring, and a gain related
to the sale of the company’s investment in Broadcast Music Inc.
(“BMI”). In addition, we have excluded an income tax special item
associated with 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 or
liquidity 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, gains, payments and receipts 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
stock-based compensation expense), 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 attributable
to redeemable noncontrolling interest, (2) income taxes, (3)
interest expense, (4) interest income, (5) other non-operating
items, net, (6) M&A-related costs, (7) asset impairment and
other, (8) workforce restructuring, (9) employee retention costs,
(10) the Merger termination fee, (11) depreciation and (12)
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 Adjusted free cash flow, a
non-GAAP liquidity measure. The most directly comparable GAAP
financial measure to Adjusted free cash flow is Net cash flow from
operating activities. Starting in the second quarter of 2024, the
company updated its definition of Adjusted free cash flow. Adjusted
free cash flow is now calculated as net cash flow from operating
activities less payments for purchases of property and equipment
plus or minus special items. The company removes special items
affecting cash flow from operating activities because we do not
consider these items to be indicative of its underlying cash flow
generation for the reporting period. Adjusted free cash flow is not
intended to be a measure of residual cash available for
management’s discretionary use since it omits significant sources
and uses of cash flow including mandatory debt repayments. The
principal difference between the new definition and the former
definition is the inclusion of cash flows driven by changes in
certain working capital accounts (primarily accounts receivable,
accounts payable and accrued expenses) which are now included. The
company’s 2024/2025 Two-Year Adjusted free cash flow guidance of
$900 million to $1.1 billion remains the same.
This earnings release also presents our net leverage ratio which
includes Adjusted EBITDA (without stock-based compensation) as a
component of the computation. Our net leverage ratio is a financial
measure that is used by management to assess the borrowing capacity
of the company and management believes it is useful to investors
for the same reason. The company defines its Net Leverage Ratio as
(a) net debt (total debt less cash and cash equivalents) as of the
balance sheet date divided by (b) Average Annual Adjusted EBITDA
for the trailing two-year period.
The company is furnishing forward-looking guidance with respect
to Adjusted free cash flow for the combined 2024-25 years, net
leverage and corporate expenses for fiscal year 2024 and non-GAAP
operating expenses for the third quarter of 2024. Our future GAAP
financial results will include the impact of special items such as
retention costs including stock-based compensation and cash
payments, M&A-related costs, workforce restructuring, and asset
impairment. The company believes that such expenses 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. Therefore, while we may incur or
recognize these types of expenses in the future, the company
believes that removing these items for purposes of calculating the
non-GAAP basis financial measures provides investors with a more
focused presentation of our ongoing operating performance.
The company is not able to reconcile these amounts to their
comparable GAAP financial measures without unreasonable efforts
because certain information necessary to calculate such measures on
a GAAP basis is unavailable, dependent on future events outside of
our control and cannot be predicted. An example of such information
is share-based compensation, which is impacted by future share
price movement in the company’s stock price and also dependent on
future hiring and attrition. In addition, the company believes such
reconciliations could imply a degree of precision that might be
confusing or misleading to investors. The actual effect of the
reconciling items that the company may exclude from these non-GAAP
expense numbers, when determined, may be significant to the
calculation of the comparable GAAP measures.
NON-GAAP FINANCIAL INFORMATION
TEGNA Inc.
Unaudited, in thousands of dollars (except
per share amounts)
Table No. 3
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 June 30, 2024
GAAP measure
Retention costs - SBC
Retention costs - Cash
Workforce
restructuring
Non-GAAP measure
Corporate - General and administrative
expenses
$
12,685
$
(571
)
$
(654
)
$
(492
)
$
10,968
Operating expenses
568,503
(2,198
)
(1,003
)
(1,830
)
563,472
Operating income
141,860
2,198
1,003
1,830
146,891
Income before income taxes
103,236
2,198
1,003
1,830
108,267
Provision for income taxes
21,207
362
171
445
22,185
Net income attributable to TEGNA Inc.
82,144
1,836
832
1,385
86,197
Earnings per share - diluted
$
0.48
$
0.01
$
—
$
0.01
$
0.50
Special Items
Quarter ended June 30, 2023
GAAP measure
M&A-related costs
Merger termination fee
Asset impairment and
other
Special tax item
Non-GAAP measure
Corporate - General and administrative
expenses
$
26,506
$
(17,082
)
$
—
$
—
$
—
$
9,424
Operating expenses
449,907
(17,082
)
136,000
(3,359
)
—
565,466
Operating income
281,599
17,082
(136,000
)
3,359
—
166,040
Income before income taxes
244,300
17,082
(136,000
)
3,359
—
128,741
Provision for income taxes
44,207
4,371
(24,504
)
860
6,443
31,377
Net income attributable to TEGNA Inc.
200,105
12,711
(111,496
)
2,499
(6,443
)
97,376
Earnings per share - diluted (a)
$
0.92
$
0.06
$
(0.51
)
$
0.01
$
(0.03
)
$
0.44
(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. 3 (continued)
Special Items
Six months ended June 30, 2024
GAAP measure
Retention costs - SBC
Retention costs - Cash
M&A- related costs
Workforce
restructuring
Asset impairment and
other
BMI sale gain
Non-GAAP measure
Corporate - General and administrative
expenses
$
27,483
$
(1,323
)
$
(875
)
$
(2,290
)
$
(603
)
$
—
$
—
$
22,392
Operating expenses
1,145,195
(5,091
)
(1,573
)
(2,290
)
(3,637
)
(1,097
)
—
1,131,507
Operating income
279,420
5,091
1,573
2,290
3,637
1,097
—
293,108
Income before income taxes
353,759
5,091
1,573
2,290
3,637
1,097
(152,867
)
214,580
Provision for income taxes
82,468
793
248
593
890
284
(36,621
)
48,655
Net income attributable to TEGNA Inc.
271,704
4,298
1,325
1,697
2,747
813
(116,246
)
166,338
Earnings per share - diluted (a)
$
1.55
$
0.03
$
0.01
$
0.01
$
0.02
$
0.01
$
(0.67
)
$
0.95
(a) Per share amounts do not sum due to
rounding.
Special Items
Six months ended June 30, 2023
GAAP measure
M&A-related costs
Merger termination fee
Asset impairment and
other
Special tax item
Non-GAAP measure
Corporate - General and administrative
expenses
$
38,606
$
(19,848
)
$
—
$
—
$
—
$
18,758
Operating expenses
1,016,679
(19,848
)
136,000
(3,359
)
—
1,129,472
Operating income
455,154
19,848
(136,000
)
3,359
—
342,361
Income before income taxes
380,123
19,848
(136,000
)
3,359
—
267,330
Provision for income taxes
76,026
4,552
(24,504
)
860
6,443
63,377
Net income attributable to TEGNA Inc.
304,408
15,296
(111,496
)
2,499
(6,443
)
204,264
Earnings per share - diluted (a)
$
1.37
$
0.07
$
(0.50
)
$
0.01
$
(0.03
)
$
0.91
(a) Per share amounts do not sum due to
rounding.
NON-GAAP FINANCIAL INFORMATION
TEGNA Inc.
Unaudited, in thousands of dollars
Table No. 4
Reconciliations of Adjusted EBITDA to net
income presented in accordance with GAAP on the company’s
Consolidated Statements of Income are presented below:
Quarters ended June
30,
2024
2023
Net income attributable to TEGNA Inc.
(GAAP basis)
$
82,144
$
200,105
Less: Net loss attributable to redeemable
noncontrolling interest
(115
)
(12
)
Plus: Provision for income taxes
21,207
44,207
Plus: Interest expense
41,748
42,797
Less: Interest income
(5,873
)
(8,536
)
Plus: Other non-operating items, net
2,749
3,038
Operating income (GAAP basis)
141,860
281,599
Plus: M&A-related costs
—
17,082
Plus: Asset impairment and other
—
3,359
Plus: Workforce restructuring
1,830
—
Plus: Retention costs - Employee
stock-based compensation expenses
2,198
—
Plus: Retention costs - Cash
1,003
—
Less: Merger termination fee
—
(136,000
)
Adjusted operating income (non-GAAP
basis)
146,891
166,040
Plus: Depreciation
15,173
14,987
Plus: Amortization of intangible
assets
13,663
13,296
Adjusted EBITDA
$
175,727
$
194,323
Stock-based compensation expenses:
Employee awards
6,740
5,157
Company stock 401(k) match
contributions
4,787
4,662
Adjusted EBITDA before stock-based
compensation costs
$
187,254
$
204,142
Six months ended June
30,
2024
2023
Net income attributable to TEGNA Inc.
(GAAP basis)
$
271,704
$
304,408
Less: Net loss attributable to redeemable
noncontrolling interest
(413
)
(311
)
Plus: Provision for income taxes
82,468
76,026
Plus: Interest expense
84,116
85,703
Less: Interest income
(11,446
)
(16,109
)
(Less) Plus: Other non-operating items,
net
(147,009
)
5,437
Operating income (GAAP basis)
279,420
455,154
Plus: M&A-related costs
2,290
19,848
Plus: Asset impairment and other
1,097
3,359
Plus: Workforce restructuring
3,637
—
Plus: Retention costs - Employee
stock-based compensation expenses
5,091
—
Plus: Retention costs - Cash
1,573
—
Less: Merger termination fee
—
(136,000
)
Adjusted operating income (non-GAAP
basis)
293,108
342,361
Plus: Depreciation
29,483
30,036
Plus: Amortization of intangible
assets
27,323
26,878
Adjusted EBITDA
$
349,914
$
399,275
Stock-based compensation expenses:
Employee awards
14,980
8,845
Company stock 401(k) match
contributions
10,216
10,226
Adjusted EBITDA before stock-based
compensation costs
$
375,110
$
418,346
NON-GAAP FINANCIAL INFORMATION
TEGNA Inc.
Unaudited, in thousands of dollars
Table No. 5
Reconciliations of Adjusted free cash flow
to net cash flow from operating activities presented in accordance
with GAAP on the company’s Consolidated Statements of Cash Flows
are presented below:
Period ending June 30,
2024
Quarter
Year-to-date
Net cash flow from operating activities
(GAAP basis)
$
124,779
$
225,159
Less: Purchases of property and
equipment
(15,972
)
(20,883
)
Special items:
M&A related costs
356
1,704
Workforce restructuring
1,023
2,062
Retention costs - cash
1,650
1,650
Asset impairment and other
—
1,097
Taxes on BMI gain
18,800
18,800
Total Adjustments
21,829
25,313
Adjusted free cash flow (non-GAAP
basis)
$
130,636
$
229,589
NON-GAAP FINANCIAL INFORMATION
TEGNA Inc.
Unaudited, in thousands of dollars
Table No. 6
The following table reconciles long-term
debt, net of current portion to Net debt.
June 30, 2024
Long-term debt, net of current portion
$
3,090,000
Plus: Current portion of long-term
debt
—
Less: Cash and cash equivalents
(445,729
)
Net debt (numerator)
$
2,644,271
The following table shows the calculation
of the average annual Adjusted EBITDA before stock-based
compensation over the trailing two-year period ("T2Y").
Adjusted EBITDA before stock-based
compensation:
Six months ended June 30, 20241
$
375,110
Plus: Year ended December 31, 20232
781,562
Plus: Year ended December 31, 20222
1,181,045
Less: Six months ended June 30, 20223
(532,417
)
Combined T2Y
$
1,805,300
Divided by
2
T2Y Adjusted EBITDA (denominator)
$
902,650
The following table shows the calculation
of the Net Leverage Ratio.
June 30, 2024
Net debt (numerator)
$
2,644,271
T2Y Adjusted EBITDA (denominator)
$
902,650
Net Leverage Ratio
2.9
x
1 A non-GAAP measure detailed in Table
4.
2 Refer to page 39 of the 2023 Form 10-K
for reconciliations of 2023 and 2022 Adjusted EBITDA before
stock-based compensation costs to net income attributable to TEGNA
Inc.
3 Refer to page 27 in our Q2 2022 Form
10-Q for a reconciliation of the first six months ended 2022
Adjusted EBITDA. Note that we did not present Adjusted EBITDA
before stock-based compensation in our Q2 2022 10-Q. Our Adjusted
EBITDA was $505,279 thousand while our stock-based compensation and
company stock 401(k) contribution expenses were $17,209 thousand
and $9,929 thousand, respectively, which sums to the amount shown
above.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240806403969/en/
For media inquiries, contact: Anne Bentley Vice President, Chief
Communications Officer 703-873-6366 abentley@TEGNA.com For investor
inquiries, contact: Julie Heskett Senior Vice President, Chief
Financial Officer 703-873-6747 investorrelations@TEGNA.com
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