TEGNA Inc. Reports Strong 2016 Third Quarter Results
Highlights for the third quarter include the following:
-
GAAP earnings per diluted share from continuing operations of
$0.54 compared to$0.41 per diluted share in the third quarter last year. Non-GAAP earnings per diluted share from continuing operations of$0.65 , an increase of 76 percent year-over-year - Total company revenues were 14 percent higher driven by strong Media Segment results
- Media Segment revenues rose over 23 percent reflecting record advertising revenue related to the Summer Olympics and substantial increases in retransmission and political advertising revenues
-
Net income from continuing operations was
$119 million ; Adjusted EBITDA totaled $334 million, a 25 percent increase year-over-year -
Net cash flow from operating activities totaled
$226 million ; Free cash flow was$197 million -
On
September 7, 2016 , announced the spin-off of the Cars.com business unit which is expected to occur in the first half of 2017 and has commenced a strategic review of the CareerBuilder business unit
MCLEAN,Va.--(BUSINESS WIRE)--Nov. 2, 2016--
Martore continued, “We continue to be on track to complete the spin-off of Cars.com in the first half of 2017, and we are making progress on the strategic review process for CareerBuilder, which is now well underway. As we continue down both of these paths, we remain as sharply focused as ever on growing and innovating across all of our businesses to ensure that we remain at the leading edge of the digital and media landscapes as we close out the year and enter 2017.”
THIRD QUARTER
CONTINUING OPERATIONS
The following table summarizes the year-over-year changes in continuing operations for both GAAP and non-GAAP measures (in thousands).
GAAP | Non-GAAP | |||||||||||||||
Third
Quarter Ended Sept. 30, 2016 |
Third
Quarter Ended Sept. 27, 2015 |
Third
Quarter Ended Sept. 30, 2016 |
Third
Quarter Ended Sept. 27, 2015 |
|||||||||||||
Operating revenue | $ | 860,265 | $ | 757,518 | $ | 860,265 | $ | 757,518 | ||||||||
Operating expense | 596,493 | 539,416 | 578,182 | 539,416 | ||||||||||||
Operating income | $ | 263,772 | $ | 218,102 | $ | 282,083 | $ | 218,102 | ||||||||
Net income from continuing operations attributable to TEGNA | $ | 118,683 | $ | 93,572 | $ | 141,367 | $ | 85,237 | ||||||||
See Table 3 for reconciliations between non-GAAP measures and the most directly comparable GAAP reported numbers. | ||||||||||||||||
Total company revenues were 13.6 percent higher in the third quarter of 2016 compared to the third quarter of 2015 reflecting revenue growth in both the Media Segment and Digital Segment.
Operating expenses in the third quarter increased 10.6 percent compared
to the third quarter of 2015. On a non-GAAP basis, operating expenses
were up 7.2 percent reflecting primarily higher Media Segment expenses.
Corporate expenses totaled
Operating income was 20.9 percent higher compared to the third quarter
in 2015 while operating income on a non-GAAP basis grew 29.3 percent.
Net income from continuing operations attributable to
Special items in the third quarter of 2016 unfavorably impacted GAAP
results by
THIRD QUARTER
TEGNA MEDIA
The following table summarizes the year-over-year changes in select Media Segment revenue categories (in thousands).
Third Quarter Ended | ||||||||||||
Sept. 30, 2016 | Sept. 27, 2015 | Percentage Change | ||||||||||
Core (Local & National) | $ | 282,676 | $ | 254,243 | 11.2 | % | ||||||
Political | 38,060 | 6,061 |
**** |
|||||||||
Retransmission (a) | 143,676 | 109,012 | 31.8 | % | ||||||||
Online | 33,008 | 29,415 | 12.2 | % | ||||||||
Other | 4,266 | 7,714 | (44.7 | %) | ||||||||
Total | $ | 501,686 | $ | 406,445 | 23.4 | % | ||||||
(a) Reverse compensation to networks is included as part of programming costs. | ||||||||||||
Media Segment revenues grew 23.4 percent driven by a record
Media Segment operating expenses totaled
Based on current trends, we expect Media Segment revenue growth of 12 to
15 percent for the fourth quarter of 2016 compared to the fourth quarter
of 2015 driven by retransmission revenue growth of approximately 20 to
22 percent and
THIRD QUARTER
TEGNA DIGITAL
Digital Segment revenues were 2.1 percent higher in the third quarter
reflecting
Total revenues at Cars.com increased 8.1 percent in the third quarter. Cars.com revenues sold directly by the company were up 11.4 percent driven by an increase in display advertising purchases by auto manufacturers, a higher volume of subscription packages, product upsells, and the acquisition of DealerRater. Affiliate revenues were relatively unchanged in the quarter compared to the third quarter in 2015.
CareerBuilder revenues were 3.1 percent (3.8 percent on a constant currency basis) higher in the third quarter, a sequential improvement from the growth rate in the second quarter. CareerBuilder results reflect the acquisitions of Aurico and Workterra as well as continued growth in its resume database products and human capital software solutions.
Digital Segment operating expenses were up 7.4 percent and totaled
Digital Segment operating income was
THIRD QUARTER
NON-OPERATING AND
CASH FLOW ITEMS
Interest expense was
Other non-operating expenses totaled
Cash flow from operating activities for the third quarter of 2016 was
* * * *
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. Unaudited, in thousands (except per share amounts) |
|||||||||||
Table No. 1 | |||||||||||
Third Quarter Ended Sept. 30, 2016 |
Third Quarter Ended Sept. 27, 2015 |
% Increase (Decrease) |
|||||||||
Operating revenues: | |||||||||||
Media | $ | 501,686 | $ | 406,445 | 23.4 | ||||||
Digital | 358,579 | 351,073 | 2.1 | ||||||||
Total | 860,265 | 757,518 | 13.6 | ||||||||
Operating expenses: | |||||||||||
Cost of revenues and operating expenses, exclusive of depreciation | 261,065 | 224,294 | 16.4 | ||||||||
Selling, general and administrative expenses, exclusive of depreciation | 268,415 | 265,102 | 1.2 | ||||||||
Depreciation | 22,634 | 21,518 | 5.2 | ||||||||
Amortization of intangible assets | 29,161 | 28,502 | 2.3 | ||||||||
Asset impairment charges and facility consolidation | 15,218 | — | **** | ||||||||
Total | 596,493 | 539,416 | 10.6 | ||||||||
Operating income | 263,772 | 218,102 | 20.9 | ||||||||
Non-operating expense: | |||||||||||
Equity loss in unconsolidated investments, net | (3,549 | ) | (1,012 | ) |
**** |
||||||
Interest expense | (57,607 | ) | (66,949 | ) | (14.0 | ) | |||||
Other non-operating expense, net | (11,051 | ) | (3,115 | ) | **** | ||||||
Total | (72,207 | ) | (71,076 | ) | 1.6 | ||||||
Income before income taxes | 191,565 | 147,026 | 30.3 | ||||||||
Provision for income taxes | 58,130 | 35,967 | 61.6 | ||||||||
Income from continuing operations | 133,435 | 111,059 | 20.1 | ||||||||
Net income attributable to noncontrolling interests | (14,752 | ) | (17,487 | ) | (15.6 | ) | |||||
Net income from continuing operations attributable to TEGNA Inc. | $ | 118,683 | $ | 93,572 | 26.8 | ||||||
Earnings from continuing operations per share: | |||||||||||
Basic | $ | 0.55 | $ | 0.42 | 31.0 | ||||||
Diluted | $ | 0.54 | $ | 0.41 | 31.7 | ||||||
Weighted average number of common shares outstanding: | |||||||||||
Basic | 214,813 | 224,530 | (4.3 | ) | |||||||
Diluted | 218,099 | 230,078 | (5.2 | ) | |||||||
Dividends declared per share | $ | 0.14 | $ | 0.14 | — | ||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Continuing Operations TEGNA Inc. Unaudited, in thousands (except per share amounts) |
|||||||||||
Table No. 1 (continued) | |||||||||||
Nine Months Sept. 30, 2016 |
Nine Months Sept. 27, 2015 |
% Increase (Decrease) |
|||||||||
Operating revenues: | |||||||||||
Media | $ | 1,404,462 | $ | 1,219,911 | 15.1 | ||||||
Digital | 1,049,320 | 1,025,770 | 2.3 | ||||||||
Total | 2,453,782 | 2,245,681 | 9.3 | ||||||||
Operating expenses: | |||||||||||
Cost of revenues and operating expenses, exclusive of depreciation | 764,793 | 690,781 | 10.7 | ||||||||
Selling, general and administrative expenses, exclusive of depreciation | 824,561 | 794,650 | 3.8 | ||||||||
Depreciation | 67,494 | 70,752 | (4.6 | ) | |||||||
Amortization of intangible assets | 85,703 | 86,156 | (0.5 | ) | |||||||
Asset impairment charges and facility consolidation | 18,946 | 17,079 | 10.9 | ||||||||
Total | 1,761,497 | 1,659,418 | 6.2 | ||||||||
Operating income | 692,285 | 586,263 | 18.1 | ||||||||
Non-operating expense: | |||||||||||
Equity loss in unconsolidated investments, net | (6,530 | ) | (4,123 | ) | 58.4 | ||||||
Interest expense | (175,461 | ) | (206,871 | ) | (15.2 | ) | |||||
Other non-operating expense, net | (11,220 | ) | (5,346 | ) |
**** |
||||||
Total | (193,211 | ) | (216,340 | ) | (10.7 | ) | |||||
Income before income taxes | 499,074 | 369,923 | 34.9 | ||||||||
Provision for income taxes | 147,844 | 120,706 | 22.5 | ||||||||
Income from continuing operations | 351,230 | 249,217 | 40.9 | ||||||||
Net income attributable to noncontrolling interests | (40,178 | ) | (47,701 | ) | (15.8 | ) | |||||
Net income from continuing operations attributable to TEGNA Inc. | $ | 311,052 | $ | 201,516 | 54.4 | ||||||
Earnings from continuing operations per share: | |||||||||||
Basic | $ | 1.43 | $ | 0.89 | 60.7 | ||||||
Diluted | $ | 1.41 | $ | 0.87 | 62.1 | ||||||
Weighted average number of common shares outstanding: | |||||||||||
Basic | 216,865 | 226,053 | (4.1 | ) | |||||||
Diluted | 220,511 | 231,310 | (4.7 | ) | |||||||
Dividends declared per share | $ | 0.42 | $ | 0.54 | (22.2 | ) | |||||
BUSINESS SEGMENT INFORMATION
TEGNA Inc. Unaudited, in thousands of dollars |
|||||||||||||
Table No. 2 | |||||||||||||
Third Quarter Ended Sept. 30, 2016 |
Third Quarter Ended Sept. 27, 2015 |
% Increase
(Decrease) |
|||||||||||
Operating revenues: | |||||||||||||
Media | $ | 501,686 | $ | 406,445 | 23.4 | ||||||||
Digital | 358,579 | 351,073 | 2.1 | ||||||||||
Total | $ | 860,265 | $ | 757,518 | 13.6 | ||||||||
Operating income (net of depreciation, amortization, asset impairment charges and facility consolidation): | |||||||||||||
Media | $ | 221,038 | $ | 158,595 | 39.4 | ||||||||
Digital | 59,296 | 72,446 | (18.2 | ) | |||||||||
Corporate | (16,562 | ) | (12,939 | ) | 28.0 | ||||||||
Total | $ | 263,772 | $ | 218,102 | 20.9 | ||||||||
Depreciation, amortization, asset impairment charges and facility consolidation: | |||||||||||||
Media | $ | 18,105 | $ | 18,406 | (1.6 | ) | |||||||
Digital | 48,887 | 31,074 | 57.3 | ||||||||||
Corporate | 21 | 540 | (96.1 | ) | |||||||||
Total | $ | 67,013 | $ | 50,020 | 34.0 | ||||||||
Adjusted EBITDA (a): | |||||||||||||
Media | $ | 240,456 | $ | 177,001 | 35.9 | ||||||||
Digital | 108,406 | 103,520 | 4.7 | ||||||||||
Corporate | (14,984 | ) | (12,399 | ) | 20.8 | ||||||||
Total | $ | 333,878 | $ | 268,122 | 24.5 | ||||||||
(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.
BUSINESS SEGMENT INFORMATION
TEGNA Inc. Unaudited, in thousands of dollars |
|||||||||||||
Table No. 2 (continued) | |||||||||||||
Nine Months Ended
Sept. 30, 2016 |
Nine Months Ended
Sept. 27, 2015 |
% Increase
(Decrease) |
|||||||||||
Operating revenues: | |||||||||||||
Media | $ | 1,404,462 | $ | 1,219,911 | 15.1 | ||||||||
Digital | 1,049,320 | 1,025,770 | 2.3 | ||||||||||
Total | $ | 2,453,782 | $ | 2,245,681 | 9.3 | ||||||||
Operating income (net of depreciation, amortization, asset impairment charges and facility consolidation): | |||||||||||||
Media | $ | 569,888 | $ | 513,557 | 11.0 | ||||||||
Digital | 170,939 | 175,462 | (2.6 | ) | |||||||||
Corporate | (48,542 | ) | (50,817 | ) | (4.5 | ) | |||||||
Unallocated costs (b) | — | (51,939 | ) | (100.0 | ) | ||||||||
Total | $ | 692,285 | $ | 586,263 | 18.1 | ||||||||
Depreciation, amortization, asset impairment and facility consolidation: | |||||||||||||
Media | $ | 58,377 | $ | 61,492 | (5.1 | ) | |||||||
Digital | 110,728 | 106,050 | 4.4 | ||||||||||
Corporate | 3,038 | 6,445 | (52.9 | ) | |||||||||
Total | $ | 172,143 | $ | 173,987 | (1.1 | ) | |||||||
Adjusted EBITDA (a): | |||||||||||||
Media | $ | 646,826 | $ | 562,688 | 15.0 | ||||||||
Digital | 281,890 | 283,684 | (0.6 | ) | |||||||||
Corporate | (43,947 | ) | (44,372 | ) | (1.0 | ) | |||||||
Unallocated costs (b) | — | (51,939 | ) | (100.0 | ) | ||||||||
Total | $ | 884,769 | $ | 750,061 | 18.0 | ||||||||
(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 severance expense, 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 transactions 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 company's ongoing operating performance.
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 the most directly comparable GAAP financial measures are presented in the following tables.
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 condensed consolidated statements of income follow: | |||||||||||||||||||||||||
GAAP |
Special Items |
Non-GAAP |
|||||||||||||||||||||||
Third |
Severance |
Goodwill |
Equity |
Other |
Third |
||||||||||||||||||||
Cost of revenues and operating expenses, exclusive of depreciation | $ | 261,065 | $ | (1,086 | ) | $ | — | $ | — | $ | — | $ | 259,979 | ||||||||||||
Selling general and administrative expenses, exclusive of depreciation | 268,415 | (2,007 | ) | — | — | — | 266,408 | ||||||||||||||||||
Asset impairment charges and facility consolidation | 15,218 | — | (15,218 | ) | — | — | — | ||||||||||||||||||
Operating expenses | 596,493 | (3,093 | ) | (15,218 | ) | — | — | 578,182 | |||||||||||||||||
Operating income | 263,772 | 3,093 | 15,218 | — | — | 282,083 | |||||||||||||||||||
Equity loss in unconsolidated investments, net | (3,549 | ) | — | — | 2,030 | — | (1,519 | ) | |||||||||||||||||
Other non-operating expense | (11,051 | ) | — | — | — | 14,157 | 3,106 | ||||||||||||||||||
Total non-operating expense | (72,207 | ) | — | — | 2,030 | 14,157 | (56,020 | ) | |||||||||||||||||
Income before income taxes | 191,565 | 3,093 | 15,218 | 2,030 | 14,157 | 226,063 | |||||||||||||||||||
Provision for income taxes | 58,130 | 1,203 | 5,962 | 790 | 3,859 | 69,944 | |||||||||||||||||||
Net income from continuing operations attributable to TEGNA | 118,683 | 1,890 | 9,256 | 1,240 | 10,298 | 141,367 | |||||||||||||||||||
Net income from continuing operations per share-diluted | $ | 0.54 | $ | 0.01 | $ | 0.04 | $ | 0.01 | $ | 0.05 | $ | 0.65 | |||||||||||||
GAAP
Measure |
Special Items |
Non-GAAP Measure |
|||||||||||||||||||||||
Third |
Severance |
Operating |
Non- |
Special |
Third Quarter Ended Sept. 27, 2015 |
||||||||||||||||||||
Cost of revenues and operating expenses, exclusive of depreciation | $ | 224,294 | $ | — | $ | — | $ | — | $ | — | $ | 224,294 | |||||||||||||
Selling general and administrative expenses, exclusive of depreciation | 265,102 | — | — | — | — | 265,102 | |||||||||||||||||||
Asset impairment charges and facility consolidation | — | — | — | — | — | — | |||||||||||||||||||
Operating expenses | 539,416 | — | — | — | — | 539,416 | |||||||||||||||||||
Operating income | 218,102 | — | — | — | — | 218,102 | |||||||||||||||||||
Other non-operating expense | (3,115 | ) | — | — | — | — | (3,115 | ) | |||||||||||||||||
Total non-operating expense | (71,076 | ) | — | — | — | — | (71,076 | ) | |||||||||||||||||
Income before income taxes | 147,026 | — | — | — | — | 147,026 | |||||||||||||||||||
Provision for income taxes | 35,967 | — | — | — | 8,335 | 44,302 | |||||||||||||||||||
Net income from continuing operations attributable to TEGNA | 93,572 | — | — | — | (8,335 | ) | 85,237 | ||||||||||||||||||
Net income from continuing operations per share - diluted | $ | 0.41 | $ | — | $ | — | $ | — | $ | (0.04 | ) | $ | 0.37 | ||||||||||||
NON-GAAP FINANCIAL INFORMATION
TEGNA Inc. Unaudited, in thousands of dollars (except per share amounts) |
|||||||||||||||||||||||||||||
Table No. 3 (continued) | |||||||||||||||||||||||||||||
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 condensed consolidated statements of income follow: | |||||||||||||||||||||||||||||
GAAP
Measure |
Special Items |
Non-GAAP
Measure |
|||||||||||||||||||||||||||
Nine Months |
Severance |
Goodwill and |
Equity |
Other |
Nine Months Ended |
||||||||||||||||||||||||
Cost of revenues and operating expenses, exclusive of depreciation | $ | 764,793 | $ | (12,601 | ) | $ | — | $ | — | $ | — | $ | 752,192 | ||||||||||||||||
Selling general and administrative expenses, exclusive of depreciation | 824,561 | (7,740 | ) | — | — | — | 816,821 | ||||||||||||||||||||||
Asset impairment charges and facility consolidation | 18,946 | — | (18,946 | ) | — | — | — | ||||||||||||||||||||||
Operating expenses | 1,761,497 | (20,341 | ) | (18,946 | ) | — | — | 1,722,210 | |||||||||||||||||||||
Operating income | 692,285 | 20,341 | 18,946 | — | — | 731,572 | |||||||||||||||||||||||
Equity loss in unconsolidated investments, net | (6,530 | ) | — | — | 3,899 | — | (2,631 | ) | |||||||||||||||||||||
Other non-operating (expense) income | (11,220 | ) | — | — | — | 17,995 | 6,775 | ||||||||||||||||||||||
Total non-operating expense | (193,211 | ) | — | — | 3,899 | 17,995 | (171,317 | ) | |||||||||||||||||||||
Income before income taxes | 499,074 | 20,341 | 18,946 | 3,899 | 17,995 | 560,255 | |||||||||||||||||||||||
Provision for income taxes | 147,844 | 7,875 | 7,412 | 1,517 | 4,936 | 169,584 | |||||||||||||||||||||||
Net income from continuing operations attributable to TEGNA | 311,052 | 12,466 | 11,534 | 2,382 | 13,059 | 350,493 | |||||||||||||||||||||||
Net income from continuing operations per share - diluted | $ | 1.41 | $ | 0.06 | $ | 0.05 | $ | 0.01 | $ | 0.06 | $ | 1.59 | |||||||||||||||||
GAAP
Measure |
Special Items |
Non-GAAP Measure |
|||||||||||||||||||||||||||
Nine Months |
Severance |
Operating |
Building sale |
Non- |
Special tax |
Nine |
|||||||||||||||||||||||
Cost of revenues and operating expenses, exclusive of depreciation | $ | 690,781 | $ | (2,142 | ) | $ | — | $ | 12,709 | $ | — | $ | — | $ | 701,348 | ||||||||||||||
Selling general and administrative expenses, exclusive of depreciation | 794,650 | (378 | ) | — | — | — | — | 794,272 | |||||||||||||||||||||
Asset impairment charges and facility consolidation | 17,079 | — | (17,079 | ) | — | — | — | — | |||||||||||||||||||||
Operating expenses | 1,659,418 | (2,520 | ) | (17,079 | ) | 12,709 | — | — | 1,652,528 | ||||||||||||||||||||
Operating income | 586,263 | 2,520 | 17,079 | (12,709 | ) | — | — | 593,153 | |||||||||||||||||||||
Other non-operating expense | (5,346 | ) | — | — | — | 1,453 | — | (3,893 | ) | ||||||||||||||||||||
Total non-operating expense | (216,340 | ) | — | — | — | 1,453 | — | (214,887 | ) | ||||||||||||||||||||
Income before income taxes | 369,923 | 2,520 | 17,079 | (12,709 | ) | 1,453 | — | 378,266 | |||||||||||||||||||||
Provision for income taxes | 120,706 | 937 | 6,352 | (4,726 | ) | (5,737 | ) | 2,023 | 119,555 | ||||||||||||||||||||
Net income from continuing operations attributable to TEGNA | 201,516 | 1,583 | 10,727 | (7,983 | ) | 7,190 | (2,023 | ) | 211,010 | ||||||||||||||||||||
Net income from continuing operations per share - diluted (a) | $ | 0.87 | $ | 0.01 | $ | 0.05 | $ | (0.03 | ) | $ | 0.03 | $ | (0.01 | ) | $ | 0.91 | |||||||||||||
(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 GAAP on the company's condensed consolidated statements of income follow: | ||||||||||||||||
Third Quarter Ended September 30, 2016: | ||||||||||||||||
Media | Digital | Corporate |
Consolidated
Total |
|||||||||||||
Net income from continuing operations attributable to TEGNA Inc. (GAAP basis) | $ | 118,683 | ||||||||||||||
Net income attributable to noncontrolling interests | 14,752 | |||||||||||||||
Provision for income taxes | 58,130 | |||||||||||||||
Interest expense | 57,607 | |||||||||||||||
Equity loss in unconsolidated investments, net | 3,549 | |||||||||||||||
Other non-operating expense | 11,051 | |||||||||||||||
Operating income (GAAP basis) | $ | 221,038 | $ | 59,296 | $ | (16,562 | ) | $ | 263,772 | |||||||
Severance expense | 1,313 | 223 | 1,557 | 3,093 | ||||||||||||
Goodwill impairment | — | 15,218 | — | 15,218 | ||||||||||||
Adjusted operating income (non-GAAP basis) | 222,351 | 74,737 | (15,005 | ) | 282,083 | |||||||||||
Depreciation | 12,658 | 9,955 | 21 | 22,634 | ||||||||||||
Amortization | 5,447 | 23,714 | — | 29,161 | ||||||||||||
Adjusted EBITDA (non-GAAP basis) | $ | 240,456 | $ | 108,406 | $ | (14,984 | ) | $ | 333,878 | |||||||
Third Quarter Ended September 27, 2015: | ||||||||||||||||
Media | Digital | Corporate |
Consolidated
Total |
|||||||||||||
Net income from continuing operations attributable to TEGNA Inc. (GAAP basis) | $ | 93,572 | ||||||||||||||
Net income attributable to noncontrolling interests | 17,487 | |||||||||||||||
Provision for income taxes | 35,967 | |||||||||||||||
Interest expense | 66,949 | |||||||||||||||
Equity loss in unconsolidated investments, net | 1,012 | |||||||||||||||
Other non-operating expense | 3,115 | |||||||||||||||
Operating income (GAAP and non-GAAP basis) | $ | 158,595 | $ | 72,446 | $ | (12,939 | ) | $ | 218,102 | |||||||
Depreciation | 12,915 | 8,063 | 540 | 21,518 | ||||||||||||
Amortization | 5,491 | 23,011 | — | 28,502 | ||||||||||||
Adjusted EBITDA (non-GAAP basis) | $ | 177,001 | $ | 103,520 | $ | (12,399 | ) | $ | 268,122 | |||||||
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 GAAP on the company's condensed consolidated statements of income follow: | |||||||||||||||||||||
Nine Months Ended September 30, 2016: | |||||||||||||||||||||
Media | Digital | Corporate |
Consolidated
Total |
||||||||||||||||||
Net income from continuing operations attributable to TEGNA Inc. (GAAP basis) | $ | 311,052 | |||||||||||||||||||
Net income attributable to noncontrolling interests | 40,178 | ||||||||||||||||||||
Provision for income taxes | 147,844 | ||||||||||||||||||||
Interest expense | 175,461 | ||||||||||||||||||||
Equity loss in unconsolidated investments, net | 6,530 | ||||||||||||||||||||
Other non-operating expense | 11,220 | ||||||||||||||||||||
Operating income (GAAP basis) | $ | 569,888 | $ | 170,939 | $ | (48,542 | ) | $ | 692,285 | ||||||||||||
Severance expense | 18,561 | 223 | 1,557 | 20,341 | |||||||||||||||||
Goodwill and operating asset impairments | 1,864 | 15,218 | 1,864 | 18,946 | |||||||||||||||||
Adjusted operating income (non-GAAP basis) | 590,313 | 186,380 | (45,121 | ) | 731,572 | ||||||||||||||||
Depreciation | 39,926 | 26,394 | 1,174 | 67,494 | |||||||||||||||||
Amortization | 16,587 | 69,116 | — | 85,703 | |||||||||||||||||
Adjusted EBITDA (non-GAAP basis) | $ | 646,826 | $ | 281,890 | $ | (43,947 | ) | $ | 884,769 | ||||||||||||
Nine Months Ended September 27, 2015: | |||||||||||||||||||||
Media | Digital | Corporate | Unallocated Costs |
Consolidated
Total |
|||||||||||||||||
Net income from continuing operations attributable to TEGNA Inc. (GAAP basis) | $ | 201,516 | |||||||||||||||||||
Net income attributable to noncontrolling interests | 47,701 | ||||||||||||||||||||
Provision for income taxes | 120,706 | ||||||||||||||||||||
Interest expense | 206,871 | ||||||||||||||||||||
Equity loss in unconsolidated investments, net | 4,123 | ||||||||||||||||||||
Other non-operating expense | 5,346 | ||||||||||||||||||||
Operating income (GAAP basis) | $ | 513,557 | $ | 175,462 | $ | (50,817 | ) | $ | (51,939 | ) | $ | 586,263 | |||||||||
Severance expense | 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) | 506,268 | 189,641 | (50,817 | ) | (51,939 | ) | 593,153 | ||||||||||||||
Depreciation | 39,455 | 24,852 | 6,445 | — | 70,752 | ||||||||||||||||
Amortization | 16,965 | 69,191 | — | — | 86,156 | ||||||||||||||||
Adjusted EBITDA (non-GAAP basis) | $ | 562,688 | $ | 283,684 | $ | (44,372 | ) | $ | (51,939 | ) | $ | 750,061 | |||||||||
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 results presented in accordance with GAAP. Free cash flow should not be relied upon to the exclusion of similar GAAP financial measures. | |||||||||
Third Quarter |
Nine Months |
||||||||
Net cash flow from operating activities | $ | 225,519 | $ | 454,763 | |||||
Purchase of property, plant and equipment | (28,527 | ) | (68,577 | ) | |||||
Free cash flow | $ | 196,992 | $ | 386,186 | |||||
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 | ||||||||||||||||
Third |
Third Quarter Ended Sept. 27, 2015 |
Third Quarter Ended Sept. 30, 2016 |
Third Quarter Ended Sept. 27, 2015 |
||||||||||||||
Income before taxes (per Table 3) | $ | 191,565 | $ | 147,026 | $ | 226,063 | $ | 147,026 | |||||||||
Noncontrolling interests (per Table 1) | (14,752 | ) | (17,487 | ) | (14,752 | ) | (17,487 | ) | |||||||||
Income before taxes attributable to TEGNA | $ | 176,813 | $ | 129,539 | $ | 211,311 | $ | 129,539 | |||||||||
Provision for income taxes (per Table 3) | $ | 58,130 | $ | 35,967 | $ | 69,944 | $ | 44,302 | |||||||||
Effective tax rate | 32.9 | % | 27.8 | % | 33.1 | % | 34.2 | % | |||||||||
GAAP | Non-GAAP | ||||||||||||||||
Nine Months Ended Sept. 30, 2016 |
Nine Months Ended Sept. 27, 2015 |
Nine Months Ended Sept. 30, 2016 |
Nine Months Ended Sept. 27, 2015 |
||||||||||||||
Income before taxes (per Table 3) | $ | 499,074 | $ | 369,923 | $ | 560,255 | $ | 378,266 | |||||||||
Noncontrolling interests (per Table 1) | (40,178 | ) | (47,701 | ) | (40,178 | ) | (47,701 | ) | |||||||||
Income before taxes attributable to TEGNA | $ | 458,896 | $ | 322,222 | $ | 520,077 | $ | 330,565 | |||||||||
Provision for income taxes (per Table 3) | $ | 147,844 | $ | 120,706 | $ | 169,584 | $ | 119,555 | |||||||||
Effective tax rate | 32.2 | % | 37.5 | % | 32.6 | % | 36.2 | % | |||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20161102005833/en/
Source:
For investor inquiries:
Jeffrey Heinz, 703-854-6917
Vice
President, Investor Relations
jheinz@TEGNA.com
or
For
media inquiries:
Steve Kidera, 703-873-6434
Corporate
Communications
skidera@TEGNA.com