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Share Name | Share Symbol | Market | Type |
---|---|---|---|
TEGNA Inc | NYSE:TGNA | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.22 | 1.37% | 16.24 | 16.36 | 16.07 | 16.19 | 1,266,048 | 01:00:00 |
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:
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.
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
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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