TEGNA Inc. Reports Strong 2016 Second Quarter Results
Highlights for the second quarter include the following:
-
GAAP earnings from continuing operations of
$0.45 per diluted share compared to$0.17 per diluted share in the second quarter last year. Non-GAAP earnings from continuing operations of$0.50 per diluted share, an increase of 67 percent year-over-year - Total company revenues up 7 percent, 9 percent on a pro forma basis, driven by strong Media and Digital Segment performances
- Media Segment revenues 10 percent higher including significant increases in retransmission and political advertising revenues
- Digital Segment revenues up 4 percent and 7 percent higher on a pro forma basis
-
Net income from continuing operations was
$99 million ; Adjusted EBITDA totaled$288 million -
Net cash flow from operating activities totaled
$102 million ; Free cash flow was$79 million - Also announced today, we have entered into an agreement, subject to regulatory approval and customary closing conditions, to acquire DealerRater, the industry’s largest automotive dealer review website, extending Cars.com's business and strategy
Martore continued, “Looking ahead to the second half of the year, we
continue to be very well positioned in both our Media and Digital
Segments to maximize on market demand for our services. We expect
political revenue to ramp up steadily in the third and fourth quarters
as a longer-than-usual primary process led to delayed ad buys from front
running candidates. We also are seeing robust advertising from the
Olympics this summer driven by our strong
SECOND QUARTER
CONTINUING OPERATIONS
The following table summarizes the year-over-year changes in select financial categories for both GAAP and non-GAAP measures.
Continuing Operations | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||
GAAP | Non-GAAP | ||||||||||||||||||||||||
Second |
Second |
Second |
Second |
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Operating revenue | $ | 811,785 | $ | 756,672 | $ | 811,785 | $ |
756,672 |
|
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Operating expense | 585,191 | 570,983 | 574,613 | 557,305 | |||||||||||||||||||||
Operating income | $ | 226,594 | $ | 185,689 | $ | 237,172 | $ | 199,367 | |||||||||||||||||
Net income from continuing operations attributable to TEGNA | $ | 99,451 | $ | 38,532 | $ | 109,165 | $ | 70,377 | |||||||||||||||||
See Table 3 for reconciliations between non-GAAP measures and the most directly comparable GAAP reported numbers. | |||||||||||||||||||||||||
Total company GAAP revenues increased 7.3 percent in the second quarter compared to the second quarter of 2015. On a pro forma basis, which adjusts for the impact of the sale of PointRoll last year within our Digital Segment, company revenues were 8.7 percent higher.
Second quarter operating expenses increased 2.5 percent compared to the
second quarter of 2015. On a non-GAAP basis, operating expenses were up
3.1 percent. Higher expenses in the Media and Digital Segments were
partially offset by lower corporate expenses and the absence of
publishing-related unallocated costs. Corporate expenses totaled
Operating income grew 22.0 percent compared to the second quarter in
2015 while operating income on a non-GAAP basis was 19.0 percent higher.
Adjusted EBITDA (a non-GAAP measure detailed in Table 4) was up 13.7
percent and totaled
Special items in the second quarter of 2016 unfavorably impacted GAAP
results by
SECOND QUARTER
TEGNA MEDIA
The following table summarizes the year-over-year changes in select Media Segment revenue categories (in thousands).
Second Quarter Ended |
Second Quarter Ended |
Percentage |
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Core (Local & National) | $ | 267,092 | $ | 268,779 | (0.6 | %) | ||||||||||||||
Political | 10,246 | 2,746 | 273.1 | % | ||||||||||||||||
Retransmission (a) | 145,804 | 109,440 | 33.2 | % | ||||||||||||||||
Online | 32,074 | 28,673 | 11.9 | % | ||||||||||||||||
Other | 3,731 | 7,411 | (49.7 | %) | ||||||||||||||||
Total | $ | 458,947 | $ | 417,049 | 10.0 | % | ||||||||||||||
(a) Reverse compensation to networks is included as part of programming costs. | ||||||||||||||||||||
Media Segment revenues were up 10.0 percent reflecting substantially
higher retransmission and online revenues and a
Media Segment operating expenses were
Based on current trends, we expect increases in retransmission revenue, political advertising, Olympic advertising and digital revenue to result in Media Segment revenue growth of 20 to 25 percent for the third quarter of 2016 compared to the third quarter of 2015. Revenue growth will be dependent on the timing of political campaign cycle spending at both the Presidential and Congressional levels.
SECOND QUARTER
TEGNA DIGITAL
The following table reconciles Digital Segment revenues reported on a GAAP basis to revenues presented on a pro forma basis (a non-GAAP measure).
(In thousands) | Second Quarter Ended | ||||||||||||||||||
June 30, 2016 |
June 28, 2015 |
Percentage Change | |||||||||||||||||
Digital Segment Revenue | |||||||||||||||||||
Reported (GAAP Measure) | $ | 352,838 | $ | 339,623 | 3.9% | ||||||||||||||
Adjust for business sold | (9,848 | ) | |||||||||||||||||
Total adjusted pro-forma revenue | $ | 352,838 | $ | 329,775 | 7.0% | ||||||||||||||
Digital Segment revenues were up in the second quarter driven by
continued revenue growth at Cars.com of
Cars.com revenues sold directly by the company were up 7.8 percent driven by dealer market penetration, new products and an increase in display advertising purchases by auto manufacturers. Affiliate revenues were almost 1 percent higher as the majority of affiliates had positive revenue growth.
CareerBuilder revenues were up 2.7 percent in the second quarter, a sequential improvement from the 2.3 percent decline in the first quarter. CareerBuilder results reflect solid growth in its resume database products and human capital software solutions as well the acquisition of Aurico.
Digital Segment operating expenses totaled
Digital Segment operating income was
SECOND QUARTER
NON-OPERATING AND
CASH FLOW ITEMS
On
The
Cash flow from operating activities for the second quarter of 2016 was
The effective tax rate in the quarter was 32.4 percent on a GAAP basis. On a non-GAAP basis, the effective tax rate was 32.9 percent.
* * * *
As previously announced, the company will hold an earnings conference
call at
About
Certain statements in this press release may be forward looking in
nature or “forward looking statements” as defined in the Private
Securities Litigation Reform Act of 1995. The forward looking statements
contained in this press release are subject to a number of risks, trends
and uncertainties that could cause actual performance to differ
materially from these forward looking statements. A number of those
risks, trends and uncertainties are discussed in the company's
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||
Continuing Operations | ||||||||||||||||||||
TEGNA Inc. |
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Unaudited, in thousands (except per share amounts) |
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Table No. 1 | ||||||||||||||||||||
Second Quarter |
Second Quarter |
% Increase |
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Operating revenues: | ||||||||||||||||||||
Media | $ | 458,947 | $ | 417,049 | 10.0 | |||||||||||||||
Digital | 352,838 | 339,623 | 3.9 | |||||||||||||||||
Total | 811,785 | 756,672 | 7.3 | |||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Cost of revenues and operating expenses, exclusive of depreciation | 255,472 | 239,910 | 6.5 | |||||||||||||||||
Selling, general and administrative expenses, exclusive of depreciation | 275,112 | 264,797 | 3.9 | |||||||||||||||||
Depreciation | 22,627 | 24,955 | (9.3 | ) | ||||||||||||||||
Amortization of intangible assets | 28,252 | 28,966 | (2.5 | ) | ||||||||||||||||
Asset impairment charges and facility consolidation | 3,728 | 12,355 | (69.8 | ) | ||||||||||||||||
Total | 585,191 | 570,983 | 2.5 | |||||||||||||||||
Operating income | 226,594 | 185,689 | 22.0 | |||||||||||||||||
Non-operating expense: | ||||||||||||||||||||
Equity loss in unconsolidated investees, net | (5,914 | ) | (1,862 | ) | **** | |||||||||||||||
Interest expense | (56,141 | ) | (69,252 | ) | (18.9 | ) | ||||||||||||||
Other non-operating expense, net | (2,548 | ) | (26,695 | ) | (90.5 | ) | ||||||||||||||
Total | (64,603 | ) | (97,809 | ) | (33.9 | ) | ||||||||||||||
Income before income taxes | 161,991 | 87,880 | 84.3 | |||||||||||||||||
Provision for income taxes | 47,606 | 33,724 | 41.2 | |||||||||||||||||
Income from continuing operations | 114,385 | 54,156 | 111.2 | |||||||||||||||||
Net income attributable to noncontrolling interests | (14,934 | ) | (15,624 | ) | (4.4 | ) | ||||||||||||||
Net income from continuing operations attributable to TEGNA Inc. | $ | 99,451 | $ | 38,532 | **** | |||||||||||||||
Earnings from continuing operations per share: | ||||||||||||||||||||
Basic | $ | 0.46 | $ | 0.17 | **** | |||||||||||||||
Diluted | $ | 0.45 | $ | 0.17 | **** | |||||||||||||||
Weighted average number of common shares outstanding: | ||||||||||||||||||||
Basic | 216,518 | 226,538 | (4.4 | ) | ||||||||||||||||
Diluted | 220,204 | 231,920 | (5.1 | ) | ||||||||||||||||
Dividends declared per share | $ | 0.14 | $ | 0.20 | (30.0 | ) | ||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||
Continuing Operations | ||||||||||||||||||||
TEGNA Inc. |
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Unaudited, in thousands (except per share amounts) |
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Table No. 1 (continued) | ||||||||||||||||||||
Six Months |
Six Months |
% Increase |
||||||||||||||||||
Operating revenues: | ||||||||||||||||||||
Media | $ | 902,776 | $ | 813,466 | 11.0 | |||||||||||||||
Digital | 690,741 | 674,697 | 2.4 | |||||||||||||||||
Total | 1,593,517 | 1,488,163 | 7.1 | |||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Cost of revenues and operating expenses, exclusive of depreciation | 503,728 | 466,487 | 8.0 | |||||||||||||||||
Selling, general and administrative expenses, exclusive of depreciation | 556,146 | 529,548 | 5.0 | |||||||||||||||||
Depreciation | 44,860 | 49,234 | (8.9 | ) | ||||||||||||||||
Amortization of intangible assets | 56,542 | 57,654 | (1.9 | ) | ||||||||||||||||
Asset impairment charges and facility consolidation | 3,728 | 17,079 | (78.2 | ) | ||||||||||||||||
Total | 1,165,004 | 1,120,002 | 4.0 | |||||||||||||||||
Operating income | 428,513 | 368,161 | 16.4 | |||||||||||||||||
Non-operating expense: | ||||||||||||||||||||
Equity loss in unconsolidated investees, net | (2,981 | ) | (3,111 | ) | (4.2 | ) | ||||||||||||||
Interest expense | (117,854 | ) | (139,922 | ) | (15.8 | ) | ||||||||||||||
Other non-operating expense, net | (169 | ) | (2,231 | ) | (92.4 | ) | ||||||||||||||
Total | (121,004 | ) | (145,264 | ) | (16.7 | ) | ||||||||||||||
Income before income taxes | 307,509 | 222,897 | 38.0 | |||||||||||||||||
Provision for income taxes | 89,714 | 84,739 | 5.9 | |||||||||||||||||
Income from continuing operations | 217,795 | 138,158 | 57.6 | |||||||||||||||||
Net income attributable to noncontrolling interests | (25,426 | ) | (30,214 | ) | (15.8 | ) | ||||||||||||||
Net income from continuing operations attributable to TEGNA Inc. | $ | 192,369 | $ | 107,944 | 78.2 | |||||||||||||||
Earnings from continuing operations per share: | ||||||||||||||||||||
Basic | $ | 0.88 | $ | 0.48 | 83.3 | |||||||||||||||
Diluted | $ | 0.87 | $ | 0.47 | 85.1 | |||||||||||||||
Weighted average number of common shares outstanding: | ||||||||||||||||||||
Basic | 217,902 | 226,814 | (3.9 | ) | ||||||||||||||||
Diluted | 221,729 | 231,927 | (4.4 | ) | ||||||||||||||||
Dividends declared per share | $ | 0.28 | $ | 0.40 | (30.0 | ) | ||||||||||||||
BUSINESS SEGMENT INFORMATION
TEGNA Inc. Unaudited, in thousands of dollars |
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Table No. 2 | ||||||||||||||||||||
Second Quarter |
Second Quarter |
% Increase |
||||||||||||||||||
Operating revenues: | ||||||||||||||||||||
Media | $ | 458,947 | $ | 417,049 | 10.0 | |||||||||||||||
Digital | 352,838 | 339,623 | 3.9 | |||||||||||||||||
Total | $ | 811,785 | $ | 756,672 | 7.3 | |||||||||||||||
Operating income (net of depreciation, amortization, asset |
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Media | $ | 179,551 | $ | 178,082 | 0.8 | |||||||||||||||
Digital | 64,424 | 54,835 | 17.5 | |||||||||||||||||
Corporate | (17,381 | ) | (19,018 | ) | (8.6 | ) | ||||||||||||||
Unallocated costs (b) | — | (28,210 | ) | (100.0 | ) | |||||||||||||||
Total | $ | 226,594 | $ | 185,689 | 22.0 | |||||||||||||||
Depreciation, amortization, asset impairment charges and |
||||||||||||||||||||
Media | $ | 20,831 | $ | 21,825 | (4.6 | ) | ||||||||||||||
Digital | 31,480 | 41,267 | (23.7 | ) | ||||||||||||||||
Corporate | 2,296 | 3,184 | (27.9 | ) | ||||||||||||||||
Total | $ | 54,607 | $ | 66,276 | (17.6 | ) | ||||||||||||||
Adjusted EBITDA (a): | ||||||||||||||||||||
Media | $ | 207,232 | $ | 199,907 | 3.7 | |||||||||||||||
Digital | 95,904 | 97,425 | (1.6 | ) | ||||||||||||||||
Corporate | (15,085 | ) | (15,834 | ) | (4.7 | ) | ||||||||||||||
Unallocated costs (b) | — | (28,210 | ) | (100.0 | ) | |||||||||||||||
Total | $ | 288,051 | $ | 253,288 | 13.7 | |||||||||||||||
(a) | "Adjusted EBITDA" is a non-GAAP measure used by management to measure, analyze and compare the performance of its business segment operations at a more detailed level and in a meaningful and consistent manner. The definition of "Adjusted EBITDA" is provided in the section "Use of Non-GAAP Information" and Table No. 4 provides reconciliations to the most directly comparable financial measure calculated and presented in accordance with GAAP on the company's condensed consolidated statements of income. | |
(b) | Unallocated costs in 2015 represent certain expenses that historically were allocated to the former Publishing Segment but that could not be allocated to discontinued operations because they were not clearly and specifically identifiable to the spun-off businesses, the accounting criteria for reclassification to discontinued operations. | |
BUSINESS SEGMENT INFORMATION | ||||||||||||||||||||
TEGNA Inc. |
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Unaudited, in thousands of dollars |
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Table No. 2 (continued) | ||||||||||||||||||||
Six Months |
Six Months |
% Increase |
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Operating revenues: | ||||||||||||||||||||
Media | $ | 902,776 | $ | 813,466 | 11.0 | |||||||||||||||
Digital | 690,741 | 674,697 | 2.4 | |||||||||||||||||
Total | $ | 1,593,517 | $ | 1,488,163 | 7.1 | |||||||||||||||
Operating income (net of depreciation, amortization, asset |
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Media | $ | 348,850 | $ | 354,962 | (1.7 | ) | ||||||||||||||
Digital | 111,643 | 103,016 | 8.4 | |||||||||||||||||
Corporate | (31,980 | ) | (37,878 | ) | (15.6 | ) | ||||||||||||||
Unallocated costs (b) | — | (51,939 | ) | (100.0 | ) | |||||||||||||||
Total | $ | 428,513 | $ | 368,161 | 16.4 | |||||||||||||||
Depreciation, amortization, asset impairment and facility |
||||||||||||||||||||
Media | $ | 40,272 | $ | 43,086 | (6.5 | ) | ||||||||||||||
Digital | 61,841 | 74,976 | (17.5 | ) | ||||||||||||||||
Corporate | 3,017 | 5,905 | (48.9 | ) | ||||||||||||||||
Total | $ | 105,130 | $ | 123,967 | (15.2 | ) | ||||||||||||||
Adjusted EBITDA (a): | ||||||||||||||||||||
Media | $ | 406,370 | $ | 385,687 | 5.4 | |||||||||||||||
Digital | 173,484 | 180,164 | (3.7 | ) | ||||||||||||||||
Corporate | (28,963 | ) | (31,973 | ) | (9.4 | ) | ||||||||||||||
Unallocated costs (b) | — | (51,939 | ) | (100.0 | ) | |||||||||||||||
Total | $ | 550,891 | $ | 481,939 | 14.3 | |||||||||||||||
(a) | "Adjusted EBITDA" is a non-GAAP measure used by management to measure, analyze and compare the performance of its business segment operations at a more detailed level and in a meaningful and consistent manner. The definition of "Adjusted EBITDA" is provided in the section "Use of Non-GAAP Information" and Table No. 4 provides reconciliations to the most directly comparable financial measure calculated and presented in accordance with GAAP on the company's condensed consolidated statements of income. | |
(b) | Unallocated costs in 2015 represent certain expenses that historically were allocated to the former Publishing Segment but that could not be allocated to discontinued operations because they were not clearly and specifically identifiable to the spun-off businesses, the accounting criteria for reclassification to discontinued operations. | |
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 use the non-GAAP financial measures for purposes of evaluating business unit and consolidated company performance. Furthermore, the company’s Board of Director compensation committee 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 discusses in this report non-GAAP financial performance measures that exclude from its reported GAAP results the impact of “special items” consisting of workforce restructuring charges, impairment charges on operating assets and equity investments, facility consolidation charges, gains related to a building sale and a business disposal and expenses related to business acquisitions and the company’s spin-off transaction in 2015 recognized in operating and non-operating categories and a credit to our income tax provision. The company believes that such expenses, charges and gains are not indicative of normal, ongoing operations. Such items vary from period to period and are significantly impacted by the timing and nature of these events. Therefore, while the company may incur or recognize these types of expenses, charges and gains in the future, management believes that removing these items for purposes of calculating the non-GAAP financial measures provides investors with a more focused presentation of the underlying ongoing operating performance of the businesses.
The company also discusses Adjusted EBITDA, 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 from continuing operations attributable to
This earnings release also discusses free cash flow, a non-GAAP liquidity measure. Free cash flow is defined as “net cash flow from operating activities” as reported on the statement of cash flows reduced by “purchase of property and equipment”. The company believes that free cash flow is a useful measure for management and investors to evaluate the level of cash generated by operations and the ability of its operations to fund investments in new and existing businesses, return cash to shareholders under the company’s capital program, repay indebtedness, add to the company’s cash balance, or use in other discretionary activities. Management uses free cash flow to monitor cash available for repayment of indebtedness and in its discussions with the investment community. Like Adjusted EBITDA, free cash flow is not intended to be a measure of cash flow available for management’s discretionary use.
Tabular reconciliations for all of the non-GAAP financial measures to its more directly comparable GAAP financial measure are presented in the following tables.
NON-GAAP FINANCIAL INFORMATION | ||||||||||||||||||||||||||||||||||
TEGNA Inc. |
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Unaudited, in thousands of dollars (except per share amounts) |
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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 |
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GAAP |
Special Items |
Non-GAAP |
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Second Quarter |
Workforce |
Operating |
Equity |
Other |
Second Quarter |
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Cost of revenues and operating expenses, exclusive of |
$ | 255,472 | $ | (5,480 | ) | $ | — | $ | — | $ | — | $ | 249,992 | |||||||||||||||||||||
Selling general and administrative expenses, |
275,112 | (1,370 | ) | — | — | — | 273,742 | |||||||||||||||||||||||||||
Asset impairment charges and facility consolidation | 3,728 | — | (3,728 | ) | — | — | — | |||||||||||||||||||||||||||
Operating expenses | 585,191 | (6,850 | ) | (3,728 | ) | — | — | 574,613 | ||||||||||||||||||||||||||
Operating income | 226,594 | 6,850 | 3,728 | — | — | 237,172 | ||||||||||||||||||||||||||||
Equity loss in unconsolidated investees, net | (5,914 | ) | — | — | 1,869 | — | (4,045 | ) | ||||||||||||||||||||||||||
Other non-operating expense | (2,548 | ) | — | — | — | 3,185 | 637 | |||||||||||||||||||||||||||
Total non-operating expense | (64,603 | ) | — | — | 1,869 | 3,185 | (59,549 | ) | ||||||||||||||||||||||||||
Income before income taxes | 161,991 | 6,850 | 3,728 | 1,869 | 3,185 | 177,623 | ||||||||||||||||||||||||||||
Provision for income taxes | 47,606 | 2,664 | 1,450 | 727 | 1,077 | 53,524 | ||||||||||||||||||||||||||||
Net income from continuing operations attributable to TEGNA | 99,451 | 4,186 | 2,278 | 1,142 | 2,108 | 109,165 | ||||||||||||||||||||||||||||
Net income from continuing operations per share-diluted | $ | 0.45 | $ | 0.02 | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | 0.50 | ||||||||||||||||||||||
GAAP
Measure |
Special Items |
Non-GAAP Measure |
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Second Quarter |
Workforce
restructuring |
Operating |
Non-operating |
Special |
Second Quarter |
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Cost of revenues and operating expenses, exclusive of |
$ | 239,910 | $ | (1,124 | ) | $ | — | $ | — | $ | — | $ | 238,786 | |||||||||||||||||||||
Selling general and administrative expenses, |
264,797 | (199 | ) | — | — | — | 264,598 | |||||||||||||||||||||||||||
Asset impairment charges and facility consolidation | 12,355 | — | (12,355 | ) | — | — | — | |||||||||||||||||||||||||||
Operating expenses | 570,983 | (1,323 | ) | (12,355 | ) | — | — | 557,305 | ||||||||||||||||||||||||||
Operating income | 185,689 | 1,323 | 12,355 | — | — | 199,367 | ||||||||||||||||||||||||||||
Other non-operating expense | (26,695 | ) | — | — | 27,133 | — | 438 | |||||||||||||||||||||||||||
Total non-operating expense | (97,809 | ) | — | — | 27,133 | — | (70,676 | ) | ||||||||||||||||||||||||||
Income before income taxes | 87,880 | 1,323 | 12,355 | 27,133 | — | 128,691 | ||||||||||||||||||||||||||||
Provision for income taxes | 33,724 | 492 | 4,595 | 10,581 | (6,702 | ) | 42,690 | |||||||||||||||||||||||||||
Net income from continuing operations attributable to TEGNA | 38,532 | 831 | 7,760 | 16,552 | 6,702 | 70,377 | ||||||||||||||||||||||||||||
Net income from continuing operations per share - diluted | $ | 0.17 | $ | — | $ | 0.03 | $ | 0.07 | $ | 0.03 | $ | 0.30 | ||||||||||||||||||||||
NON-GAAP FINANCIAL INFORMATION | |||||||||||||||||||||||||||||||||||||
TEGNA Inc. |
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Unaudited, in thousands of dollars (except per share amounts) |
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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 |
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GAAP
Measure |
Special Items |
Non-GAAP
Measure |
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Six Months |
Workforce
restructuring |
Operating |
Non-operating |
Other |
Six Months |
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Cost of revenues and operating expenses, exclusive of depreciation |
$ | 503,728 | $ | (11,515 | ) | $ | — | $ | — | $ | — | $ | 492,213 | ||||||||||||||||||||||||
Selling general and administrative expenses, exclusive of depreciation |
556,146 | (5,733 | ) | — | — | — | 550,413 | ||||||||||||||||||||||||||||||
Asset impairment charges and facility consolidation |
3,728 | — | (3,728 | ) | — | — | — | ||||||||||||||||||||||||||||||
Operating expenses | 1,165,004 | (17,248 | ) | (3,728 | ) | — | — | 1,144,028 | |||||||||||||||||||||||||||||
Operating income | 428,513 | 17,248 | 3,728 | — | — | 449,489 | |||||||||||||||||||||||||||||||
Equity loss in unconsolidated investees, net |
(2,981 | ) | — | — | 1,869 | — | (1,112 | ) | |||||||||||||||||||||||||||||
Other non-operating (expense) income | (169 | ) | — | — | — | 3,838 | 3,669 | ||||||||||||||||||||||||||||||
Total non-operating expense | (121,004 | ) | — | — | 1,869 | 3,838 | (115,297 | ) | |||||||||||||||||||||||||||||
Income before income taxes | 307,509 | 17,248 | 3,728 | 1,869 | 3,838 | 334,192 | |||||||||||||||||||||||||||||||
Provision for income taxes | 89,714 | 6,672 | 1,450 | 727 | 1,077 | 99,640 | |||||||||||||||||||||||||||||||
Net income from continuing operations attributable to TEGNA | 192,369 | 10,576 | 2,278 | 1,142 | 2,761 | 209,126 | |||||||||||||||||||||||||||||||
Net income from continuing operations per |
$ | 0.87 | $ | 0.05 | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | 0.94 | |||||||||||||||||||||||||
(a) - Per share amounts do not foot due to rounding | |||||||||||||||||||||||||||||||||||||
GAAP
Measure |
Special Items |
Non-GAAP Measure |
|||||||||||||||||||||||||||||||||||
Six Months |
Workforce
restructuring |
Operating |
Building sale |
Non- |
Special tax |
Six Months |
|||||||||||||||||||||||||||||||
Cost of revenues and operating expenses, exclusive of depreciation | $ | 466,487 | $ | (2,141 | ) | $ | — | $ | 12,709 | $ | — | $ | — | $ | 477,055 | ||||||||||||||||||||||
Selling general and administrative expenses, exclusive of depreciation | 529,548 | (379 | ) | — | — | — | — | 529,169 | |||||||||||||||||||||||||||||
Asset impairment charges and facility consolidation | 17,079 | — | (17,079 | ) | — | — | — | — | |||||||||||||||||||||||||||||
Operating expenses | 1,120,002 | (2,520 | ) | (17,079 | ) | 12,709 | — | — | 1,113,112 | ||||||||||||||||||||||||||||
Operating income | 368,161 | 2,520 | 17,079 | (12,709 | ) | — | — | 375,051 | |||||||||||||||||||||||||||||
Other non-operating expense | (2,231 | ) | — | — | — | 1,453 | — | (778 | ) | ||||||||||||||||||||||||||||
Total non-operating expense | (145,264 | ) | — | — | — | 1,453 | — | (143,811 | ) | ||||||||||||||||||||||||||||
Income before income taxes | 222,897 | 2,520 | 17,079 | (12,709 | ) | 1,453 | — | 231,240 | |||||||||||||||||||||||||||||
Provision for income taxes | 84,739 | 937 | 6,352 | (4,726 | ) | (5,737 | ) | (6,312 | ) | 75,253 | |||||||||||||||||||||||||||
Net income from continuing operations attributable to TEGNA | 107,944 | 1,583 | 10,727 | (7,983 | ) | 7,190 | 6,312 | 125,773 | |||||||||||||||||||||||||||||
Net income from continuing operations per share - diluted (a) | $ | 0.47 | $ | 0.01 | $ | 0.05 | $ | (0.03 | ) | $ | 0.03 | $ | 0.03 | $ | 0.54 |
(a) - Per share amounts do not foot due to rounding |
NON-GAAP FINANCIAL INFORMATION
TEGNA Inc. Unaudited, in thousands of dollars |
||||||||||||||||||||||||||||||||||||
Table No. 4 | ||||||||||||||||||||||||||||||||||||
Reconciliations of Adjusted EBITDA to the most directly comparable
financial measure calculated and presented in accordance with |
||||||||||||||||||||||||||||||||||||
Second Quarter Ended June 30, 2016: | ||||||||||||||||||||||||||||||||||||
Media |
Digital |
Corporate |
Consolidated
Total |
|||||||||||||||||||||||||||||||||
Net income from continuing operations attributable to TEGNA Inc. (GAAP basis) | $ | 99,451 | ||||||||||||||||||||||||||||||||||
Net income attributable to noncontrolling interests | 14,934 | |||||||||||||||||||||||||||||||||||
Provision for income taxes | 47,606 | |||||||||||||||||||||||||||||||||||
Interest expense | 56,141 | |||||||||||||||||||||||||||||||||||
Equity loss in unconsolidated investees, net | 5,914 | |||||||||||||||||||||||||||||||||||
Other non-operating expense | 2,548 | |||||||||||||||||||||||||||||||||||
Operating income (GAAP basis) | $ | 179,551 | $ | 64,424 | $ | (17,381 | ) | $ | 226,594 | |||||||||||||||||||||||||||
Workforce restructuring | 6,850 | — | — | 6,850 | ||||||||||||||||||||||||||||||||
Operating asset impairment | 1,864 | — | 1,864 | 3,728 | ||||||||||||||||||||||||||||||||
Adjusted operating income (non-GAAP basis) | 188,265 | 64,424 | (15,517 | ) | 237,172 | |||||||||||||||||||||||||||||||
Depreciation | 13,520 | 8,675 | 432 | 22,627 | ||||||||||||||||||||||||||||||||
Amortization | 5,447 | 22,805 | — | 28,252 | ||||||||||||||||||||||||||||||||
Adjusted EBITDA (non-GAAP basis) | $ | 207,232 | $ | 95,904 | $ | (15,085 | ) | $ | 288,051 | |||||||||||||||||||||||||||
Second Quarter Ended June 28, 2015: | ||||||||||||||||||||||||||||||||||||
Media | Digital | Corporate |
Unallocated |
Consolidated
Total |
||||||||||||||||||||||||||||||||
Net income from continuing operations attributable to TEGNA Inc. (GAAP basis) | $ | 38,532 | ||||||||||||||||||||||||||||||||||
Net income attributable to noncontrolling interests | 15,624 | |||||||||||||||||||||||||||||||||||
Provision for income taxes | 33,724 | |||||||||||||||||||||||||||||||||||
Interest expense | 69,252 | |||||||||||||||||||||||||||||||||||
Equity loss in unconsolidated investees, net | 1,862 | |||||||||||||||||||||||||||||||||||
Other non-operating expense | 26,695 | |||||||||||||||||||||||||||||||||||
Operating income (GAAP basis) | $ | 178,082 | $ | 54,835 | $ | (19,018 | ) | $ | (28,210 | ) | $ | 185,689 | ||||||||||||||||||||||||
Workforce restructuring | — | 1,323 | — | — | 1,323 | |||||||||||||||||||||||||||||||
Asset impairment charges and facility consolidation | 2,705 | 9,650 | — | — | 12,355 | |||||||||||||||||||||||||||||||
Adjusted operating income (non-GAAP basis) | 180,787 | 65,808 | (19,018 | ) | (28,210 | ) | 199,367 | |||||||||||||||||||||||||||||
Depreciation | 13,244 | 8,527 | 3,184 | — | 24,955 | |||||||||||||||||||||||||||||||
Amortization | 5,876 | 23,090 | — | — | 28,966 | |||||||||||||||||||||||||||||||
Adjusted EBITDA (non-GAAP basis) | $ | 199,907 | $ | 97,425 | $ | (15,834 | ) | $ | (28,210 | ) | $ | 253,288 | ||||||||||||||||||||||||
NON-GAAP FINANCIAL INFORMATION | ||||||||||||||||||||||||||||||||||||
TEGNA Inc. |
||||||||||||||||||||||||||||||||||||
Unaudited, in thousands of dollars |
||||||||||||||||||||||||||||||||||||
Table No. 4 (continued) | ||||||||||||||||||||||||||||||||||||
Reconciliations of Adjusted EBITDA to the most directly comparable
financial measure calculated and presented in accordance with |
||||||||||||||||||||||||||||||||||||
Six Months Ended June 30, 2016: | ||||||||||||||||||||||||||||||||||||
Media |
Digital |
Corporate |
Consolidated
Total |
|||||||||||||||||||||||||||||||||
Net income from continuing operations attributable to TEGNA Inc. (GAAP basis) | $ | 192,369 | ||||||||||||||||||||||||||||||||||
Net income attributable to noncontrolling interests | 25,426 | |||||||||||||||||||||||||||||||||||
Provision for income taxes | 89,714 | |||||||||||||||||||||||||||||||||||
Interest expense | 117,854 | |||||||||||||||||||||||||||||||||||
Equity loss in unconsolidated investees, net | 2,981 | |||||||||||||||||||||||||||||||||||
Other non-operating expense | 169 | |||||||||||||||||||||||||||||||||||
Operating income (GAAP basis) | $ | 348,850 | $ | 111,643 | $ | (31,980 | ) | $ | 428,513 | |||||||||||||||||||||||||||
Workforce restructuring | 17,248 | — | — | 17,248 | ||||||||||||||||||||||||||||||||
Operating asset impairment | 1,864 | — | 1,864 | 3,728 | ||||||||||||||||||||||||||||||||
Adjusted operating income (non-GAAP basis) | 367,962 | 111,643 | (30,116 | ) | 449,489 | |||||||||||||||||||||||||||||||
Depreciation | 27,268 | 16,439 | 1,153 | 44,860 | ||||||||||||||||||||||||||||||||
Amortization | 11,140 | 45,402 | — | 56,542 | ||||||||||||||||||||||||||||||||
Adjusted EBITDA (non-GAAP basis) | $ | 406,370 | $ | 173,484 | $ | (28,963 | ) | $ | 550,891 | |||||||||||||||||||||||||||
Six Months Ended June 28, 2015: | ||||||||||||||||||||||||||||||||||||
Media | Digital | Corporate |
Unallocated |
Consolidated
Total |
||||||||||||||||||||||||||||||||
Net income from continuing operations attributable to TEGNA Inc. (GAAP basis) | $ | 107,944 | ||||||||||||||||||||||||||||||||||
Net income attributable to noncontrolling interests | 30,214 | |||||||||||||||||||||||||||||||||||
Provision for income taxes | 84,739 | |||||||||||||||||||||||||||||||||||
Interest expense | 139,922 | |||||||||||||||||||||||||||||||||||
Equity loss in unconsolidated investees, net | 3,111 | |||||||||||||||||||||||||||||||||||
Other non-operating expense | 2,231 | |||||||||||||||||||||||||||||||||||
Operating income (GAAP basis) | $ | 354,962 | $ | 103,016 | $ | (37,878 | ) | $ | (51,939 | ) | $ | 368,161 | ||||||||||||||||||||||||
Workforce restructuring | 348 | 2,172 | — | — | 2,520 | |||||||||||||||||||||||||||||||
Asset impairment charges and facility consolidation | 5,072 | 12,007 | — | — | 17,079 | |||||||||||||||||||||||||||||||
Building sale gain | (12,709 | ) | — | — | — | (12,709 | ) | |||||||||||||||||||||||||||||
Adjusted operating income (non-GAAP basis) | 347,673 | 117,195 | (37,878 | ) | (51,939 | ) | 375,051 | |||||||||||||||||||||||||||||
Depreciation | 26,540 | 16,789 | 5,905 | — | 49,234 | |||||||||||||||||||||||||||||||
Amortization | 11,474 | 46,180 | — | — | 57,654 | |||||||||||||||||||||||||||||||
Adjusted EBITDA (non-GAAP basis) | $ | 385,687 | $ | 180,164 | $ | (31,973 | ) | $ | (51,939 | ) | $ | 481,939 | ||||||||||||||||||||||||
Note: Starting in second quarter of 2016,
the company revised the method for computing Adjusted EBITDA to no
longer treat non-cash rent as a reconciling item. The first quarter 2016
number was updated to conform to this new method which resulted in a
NON-GAAP FINANCIAL INFORMATION | |||||||||||||||
TEGNA Inc. |
|||||||||||||||
Unaudited, in thousands of dollars |
|||||||||||||||
Table No. 5 | |||||||||||||||
"Free cash flow" is a non-GAAP liquidity measure used in addition
to and in conjunction with |
|||||||||||||||
Second Quarter |
Six Months |
||||||||||||||
Net cash flow from operating activities | $ | 102,186 | $ | 229,244 | |||||||||||
Purchase of property, plant and equipment | (23,601 | ) | (40,050 | ) | |||||||||||
Free cash flow | $ | 78,585 | $ | 189,194 | |||||||||||
TAX RATE CALCULATION | |||||||||||||||||||||||||||
TEGNA Inc. |
|||||||||||||||||||||||||||
Unaudited, in thousands of dollars |
|||||||||||||||||||||||||||
Table No. 6 | |||||||||||||||||||||||||||
The calculations of the company's effective tax rate on a GAAP and non-GAAP basis are below: | |||||||||||||||||||||||||||
GAAP | Non-GAAP | ||||||||||||||||||||||||||
Second Quarter |
Second Quarter |
Second Quarter |
Second Quarter |
||||||||||||||||||||||||
Income before taxes (per Table 3) | $ | 161,991 | $ | 87,880 | $ | 177,623 | $ | 128,691 | |||||||||||||||||||
Noncontrolling interests (per Table 1) | (14,934 | ) | (15,624 | ) | (14,934 | ) | (15,624 | ) | |||||||||||||||||||
Income before taxes attributable to TEGNA | $ | 147,057 | $ | 72,256 | $ | 162,689 | $ | 113,067 | |||||||||||||||||||
Provision for income taxes (per Table 3) | $ | 47,606 | $ | 33,724 | $ | 53,524 | $ | 42,690 | |||||||||||||||||||
Effective tax rate | 32.4 | % | 46.7 | % | 32.9 | % | 37.8 | % | |||||||||||||||||||
GAAP | Non-GAAP | ||||||||||||||||||||||||||
Six Months |
Six Months |
Six Months |
Six Months |
||||||||||||||||||||||||
Income before taxes (per Table 3) | $ | 307,509 | $ | 222,897 | $ | 334,192 | $ | 231,240 | |||||||||||||||||||
Noncontrolling interests (per Table 1) | (25,426 | ) | (30,214 | ) | (25,426 | ) | (30,214 | ) | |||||||||||||||||||
Income before taxes attributable to TEGNA | $ | 282,083 | $ | 192,683 | $ | 308,766 | $ | 201,026 | |||||||||||||||||||
Provision for income taxes (per Table 3) | $ | 89,714 | $ | 84,739 | $ | 99,640 | $ | 75,253 | |||||||||||||||||||
Effective tax rate | 31.8 | % | 44.0 | % | 32.3 | % | 37.4 | % | |||||||||||||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20160726005862/en/
Source:
TEGNA Inc.
For investor inquiries:
Jeffrey Heinz, 703-854-6917
Vice
President, Investor Relations
jheinz@TEGNA.com
or
For
media inquiries:
Steve Kidera, 703-854-6077
Corporate
Communications
skidera@TEGNA.com