TEGNA Inc. Reports 2020 Second Quarter Results
Eight percent revenue growth during unprecedented market conditions
Full year political advertising revenue now expected to be at least
Full year subscription revenue still expected to be up mid-twenties percent
TYSONS, Va.--(BUSINESS WIRE)--Aug. 10, 2020--
SECOND QUARTER HIGHLIGHTS:
-
Total company revenue was
$578 million in the quarter, up eight percent year-over-year. The increase was driven by acquisitions, continued growth in subscription revenue, and political revenue, partially offset by advertising declines as a result of COVID-19. - Excluding political advertising, second quarter revenue grew five percent year-over-year.
-
Second quarter subscription revenue of
$323 million was up 37 percent due to rate increases and acquisitions, reflecting the 50 percent of subscribers repriced in the fourth quarter of 2019. - Due to COVID-19, advertising and marketing services revenue was down 21 percent year-over-year, but increased steadily throughout the quarter; the rate of decline improved by more than 20 percentage points from April to June.
-
Despite a highly challenging environment,
TEGNA achieved net income of$20 million in the second quarter on a GAAP basis, or$27 million on a non-GAAP basis. -
GAAP earnings per diluted share were
$0.09 in the second quarter and non-GAAP earnings per diluted share were$0.12 . -
Total company Adjusted EBITDA for the second quarter was
$124 million . -
Free cash flow for the second quarter was
$96 million . The Company ended the quarter with total debt of$4.1 billion and net leverage of 4.76x.2
FINANCIAL AND LIQUIDITY UPDATES:
-
TEGNA ended the second quarter with$173 million in cash and expects to remain cash flow positive for each quarter for the remainder of the year. -
TEGNA finished the quarter with more than$650 million in undrawn capacity under the revolving credit facility. -
TEGNA paid down$25 million on a term loan maturing in June and now has near-term remaining maturities of$75 million in 2020 and$350 million in the second half of 2021. -
On
June 11, 2020 TEGNA amended the leverage covenant in its credit agreement to extend the step-down of the maximum permitted total leverage ratio from 5.50x to 5.25x untilMarch 31, 2022 , with additional step downs continuing thereafter as scheduled; the revised terms provide additional financial flexibility given current market conditions.
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1 Throughout, “acquisitions” includes (1) the |
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2 The leverage ratio used for our single financial covenant in our revolving credit agreement was 4.73x as of the end of the quarter. The primary difference between the two leverage ratios is the definition of Adjusted EBITDA in the revolving credit agreement version requires additional adjustments to add back non-cash compensation and contractual synergy benefits during periods in the trailing eight quarters that preceded the acquisition. |
CEO COMMENT
“Our second quarter performance reflects our ability to execute on TEGNA’s five-pillar strategy in any economic environment. The actions we have taken leading up to and during the COVID-19 pandemic have positioned
“For our shareholders, our second quarter performance is proof that our strategy to build a more diversified, durable business is working.
“We are also positioned to benefit from anticipated record political advertising spending this year, as races are turning more competitive within the
“The significant declines in advertising and marketing revenues that began in late March improved by more than 20 percentage points through June, and our sales and marketing teams have innovated with advertisers to adapt to this dynamic environment. Although we can't be certain when the broader advertising industry will fully recover from the challenges presented by the COVID-19 pandemic, our long-term value proposition to advertisers remains intact. That includes the relevance and demand for our local platforms which has only grown stronger.
“In the quarter, we continued to act in accordance with our prudent expense management strategy, taking action at the beginning of the pandemic to manage discretionary costs. The result was a nearly
“Overall television viewing has expanded across demographics for both daytime and late news time slots. Digital viewership saw an even greater rise in consumption, setting records in 2020 across key digital metrics such as visitors, video plays, and monthly active users.
“While I am proud of our financial performance, since the onset of COVID-19, our number one priority has been the physical health and safety and emotional and economic wellbeing of our colleagues. Our entire team has shown extraordinary resilience during a time of unprecedented change and national uncertainty. This has allowed us to serve our other key stakeholders - the communities we serve.
“In the wake of the global pandemic, our audiences on all platforms have been appreciative of our “Facts Not Fear” philosophy of editorial coverage, using our VERIFY franchise and great reporting to make facts and context the antidote to the anxiety produced by some national news and social media outlets. On
“At TEGNA, we are committed to taking this seminal moment in American history and doing our part to bring change, beginning with a new process of assessing and holding ourselves accountable for our own recruitment, hiring, development and promotion practices. And we will, in turn, create new accountability for how our powerful local media platforms reflect our communities in our editorial practices and our news products. One example is a recent initiative discussed by our Board of Directors, whereby we are defining specific areas of oversight for each committee around the way that
“Looking forward, we are confident in TEGNA’s ability to perform, even if our economy experiences a slow recovery. During these unprecedented times, we will continue to provide purpose-driven, impactful local journalism to viewers and increase engagement with the communities we serve across all of our platforms.”
OVERVIEW OF SECOND QUARTER RESULTS
Total company revenue increased eight percent in the quarter, driven by acquisitions, continued growth in subscription revenue, and political revenue partially offset by advertising declines as a result of COVID-19.
Subscription revenue grew 37 percent year-over-year due to rate increases and acquisitions, partially offset by subscriber declines.
Advertising and marketing services revenue decreased 21 percent in the quarter compared to last year, due to reduced demand in the quarter from the impacts from the COVID-19 pandemic. These underlying revenues sequentially improved throughout the quarter since the most significant impact felt at the onset of the pandemic in late March.
GAAP operating expenses were
GAAP operating income totaled
The second quarter included a few special items, the full details of which can be found in Table 2. The net effect of these items was to increase GAAP net income by
Interest expense in the quarter increased to
UPDATE ON KEY RECENT STRATEGIC, CONTENT AND PROGRAMMING INITATIVES
- Premion Capitalizes on Over-the-Top (OTT) Ad Growth -- While Premion is affected by the pandemic like all advertising businesses, it is benefiting from the growth of viewing on streaming services and outperformed traditional TV advertising in the quarter. The rollout of our previously announced partnership with Gray is progressing on schedule.
-
TEGNA Digital Platforms Achieve Record Audience -- In each of April, May and June,
TEGNA hit 75+ million unduplicated, multi-platform digital visitors according to Comscore and has been ranked in the Top 50Digital U.S. Properties for five consecutive months, ranking higher than digital sites such as Reddit, Buzzfeed, and LinkedIn.
-
TEGNA Debuts New Audience Engagement Tools -- In the quarter,
TEGNA launched “Near Me,” a mobile app feature that allows audience members to share photos and videos and see station-produced and user-generated content down to the neighborhood and street level.
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Expanded Fact-Based Reporting Initiative VERIFY -- From the start of the COVID-19 pandemic and continuing through the nationwide protests for racial and civil justice,
TEGNA stations have seen a much greater demand for VERIFY content, and have responded to help audiences distinguish between real and false information. In August, VERIFY launched on Snapchat’s Discovery platform, which reaches 88 million daily active users inNorth America and serves younger audiences.
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VAULT Studios Launches Latest Major Podcast Project -- OnMay 6 ,VAULT Studios announced the premiere of SELENA: A STAR DIES INTEXAS , a six-part podcast series developed in partnership with TEGNA’s Texas stations as a part of our growing true crime initiative. (Press release)
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Justice Network Relaunches as True Crime Network -- On
July 27 ,TEGNA's Justice Network, its leading multicast television network, relaunched as True Crime Network, including a free, ad supported OTT streaming service and apps for Apple TV, Amazon Fire TV, and Apple iOS and Android. (Press release)
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Expansion of
Attribution Partnership with Alphonso -- OnJuly 8 ,TEGNA entered into a renewed and expanded partnership with TV data and measurement company Alphonso to include all of Premion, linear and OTT and advertising platforms. The multi-year agreement will continue to provideTEGNA with metrics to help our advertising partners make more informed, data-driven decisions.
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TEGNA Recognized for Excellence in Broadcast Journalism --
TEGNA won 88 Regional Edward R. Murrow Awards across 29 stations, more than any other local broadcast television group, for excellence in areas including innovation, multimedia, and social media. Additionally, WUSA9, TEGNA’sCBS affiliate inWashington, D.C. , won five Gracie Awards from theAlliance for Women inMedia Foundation for exemplary programming created by, for, and about women in media and entertainment. (Press release; press release)
CAPITAL ALLOCATION
TEGNA’s solid balance sheet and the deliberate financing decisions made leading up to and during the recent market instability are the result of a disciplined and flexible capital allocation program. The agreement with lenders to amend TEGNA’s credit agreement to extend the first step-down of the debt coverage covenant by 15 months, before reverting to the normal schedule, provides the Company with additional flexibility in an uncertain market environment. In addition to a continued focus on debt pay-down and the additional flexibility created with the covenant amendment,
FORWARD-LOOKING STATEMENTS
Certain statements in this communication may constitute “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein are subject to a number of risks, trends and uncertainties that could cause actual results or company actions to differ materially from what is expressed or implied by these statements, including risks relating to the coronavirus (COVID-19) pandemic and its effect on our revenues, particularly our non-political advertising revenues. Potential regulatory actions, changes in consumer behaviors and impacts on and modifications to TEGNA’s operations and business relating thereto and TEGNA’s ability to execute on its standalone plan can also cause actual results to differ materially. Other economic, competitive, governmental, technological and other factors and risks that may affect TEGNA’s operations or financial results are discussed in our Annual Report on Form 10-K for the fiscal year ended
CONFERENCE CALL
ADDITIONAL INFORMATION
CONSOLIDATED STATEMENTS OF INCOME |
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Unaudited, in thousands of dollars (except per share amounts) |
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Table No. 1 |
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Quarter ended |
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2020 |
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2019 |
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% Increase
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Revenues |
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$ |
577,627 |
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$ |
536,932 |
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7.6 |
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Operating expenses: |
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Cost of revenues |
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355,367 |
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285,293 |
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24.6 |
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Business units - Selling, general and administrative expenses |
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85,008 |
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73,941 |
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15.0 |
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Corporate - General and administrative expenses |
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28,312 |
|
|
15,836 |
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78.8 |
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Depreciation |
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16,711 |
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|
14,533 |
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15.0 |
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Amortization of intangible assets |
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17,248 |
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8,823 |
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95.5 |
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Spectrum repacking reimbursements and other, net |
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(116 |
) |
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(4,306 |
) |
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(97.3 |
) |
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Total |
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502,530 |
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394,120 |
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27.5 |
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Operating income |
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75,097 |
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142,812 |
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(47.4 |
) |
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Non-operating income (expense): |
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Equity income (loss) in unconsolidated investments, net |
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1,921 |
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(615 |
) |
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*** |
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Interest expense |
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(51,877 |
) |
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(46,327 |
) |
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12.0 |
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Other non-operating items, net |
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1,039 |
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8,964 |
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(88.4 |
) |
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Total |
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(48,917 |
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(37,978 |
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28.8 |
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Income before income taxes |
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26,180 |
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104,834 |
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(75.0 |
) |
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Provision for income taxes |
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6,607 |
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24,879 |
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(73.4 |
) |
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Net income |
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19,573 |
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79,955 |
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(75.5 |
) |
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Net loss attributable to redeemable noncontrolling interest |
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374 |
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— |
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*** |
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Net income attributable to |
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$ |
19,947 |
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$ |
79,955 |
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(75.1 |
) |
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Earnings per share: |
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Basic |
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$ |
0.09 |
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$ |
0.37 |
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(75.7 |
) |
Diluted |
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$ |
0.09 |
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$ |
0.37 |
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(75.7 |
) |
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Weighted average number of common shares outstanding: |
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Basic shares |
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219,128 |
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217,089 |
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0.9 |
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Diluted shares |
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219,426 |
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217,905 |
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0.7 |
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*** Not meaningful |
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Table No. 1 (continued) |
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Six months ended |
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2020 |
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2019 |
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% Increase
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Revenues |
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$ |
1,261,816 |
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$ |
1,053,685 |
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19.8 |
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Operating expenses: |
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Cost of revenues |
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724,735 |
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566,604 |
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27.9 |
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Business units - Selling, general and administrative expenses |
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177,976 |
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145,406 |
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22.4 |
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Corporate - General and administrative expenses |
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50,026 |
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30,571 |
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63.6 |
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Depreciation |
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33,611 |
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29,450 |
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14.1 |
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Amortization of intangible assets |
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33,464 |
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17,512 |
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91.1 |
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Spectrum repacking reimbursements and other, net |
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(7,631 |
) |
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(11,319 |
) |
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(32.6 |
) |
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Total |
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1,012,181 |
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778,224 |
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30.1 |
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Operating income |
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249,635 |
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275,461 |
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(9.4 |
) |
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Non-operating income (expense): |
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Equity income in unconsolidated investments, net |
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10,936 |
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11,413 |
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(4.2 |
) |
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Interest expense |
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(108,837 |
) |
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(92,712 |
) |
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17.4 |
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Other non-operating items, net |
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(18,231 |
) |
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7,425 |
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*** |
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Total |
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(116,132 |
) |
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(73,874 |
) |
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57.2 |
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Income before income taxes |
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133,503 |
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201,587 |
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(33.8 |
) |
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Provision for income taxes |
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27,732 |
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47,653 |
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(41.8 |
) |
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Net income |
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$ |
105,771 |
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$ |
153,934 |
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(31.3 |
) |
Net loss attributable to redeemable noncontrolling interest |
|
484 |
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— |
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*** |
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Net income attributable to |
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$ |
106,255 |
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$ |
153,934 |
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(31.0 |
) |
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Earnings from continuing operations per share: |
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Basic |
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$ |
0.48 |
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$ |
0.71 |
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(32.4 |
) |
Diluted |
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$ |
0.48 |
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$ |
0.71 |
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(32.4 |
) |
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Weighted average number of common shares outstanding: |
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Basic shares |
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218,703 |
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216,900 |
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0.8 |
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Diluted shares |
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219,144 |
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217,555 |
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0.7 |
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*** Not meaningful |
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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 the non-GAAP financial measures for purposes of evaluating company performance. Furthermore, the
The company discusses in this release non-GAAP financial performance measures that exclude from its reported GAAP results the impact of “special items” consisting of spectrum repacking reimbursements and other, gains related to businesses we account for under the equity method, acquisition-related costs, advisory fees related to activism defense, M&A due diligence costs, severance costs, intangible asset impairment charges, certain non-operating expenses related to the early extinguishment of debt and a
The company believes that such expenses and gains are not indicative of normal, ongoing operations. While these items may be recurring in nature and should not be disregarded in evaluation of our earnings performance, it is useful to exclude such items when analyzing current results and trends compared to other periods as these items can vary significantly from period to period depending on specific underlying transactions or events that may occur. Therefore, while we may incur or recognize these types of expenses and gains in the future, the company believes that removing these items for purposes of calculating the non-GAAP financial measures provides investors with a more focused presentation of our ongoing operating performance.
The company also discusses Adjusted EBITDA (with and without corporate expenses), a non-GAAP financial performance measure that it believes offers a useful view of the overall operation of its businesses. The company defines Adjusted EBITDA as net income attributable to
This earnings release also discusses free cash flow, a non-GAAP financial performance measure that the Board of Directors uses to review the performance of the business. The most directly comparable GAAP financial measure to free cash flow is Net income attributable to
NON-GAAP FINANCIAL INFORMATION |
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Unaudited, in thousands of dollars (except per share amounts) |
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Table No. 2 |
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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: |
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Special Items |
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Quarter ended |
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GAAP
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Advisory
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Spectrum
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Gain on equity
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Non-GAAP
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Corporate - General and administrative expenses |
|
$ |
28,312 |
|
|
$ |
(15,448 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
12,864 |
|
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Spectrum repacking reimbursements and other, net |
|
(116 |
) |
|
— |
|
|
116 |
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|
— |
|
|
— |
|
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|
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Operating expenses |
|
502,530 |
|
|
(15,448 |
) |
|
116 |
|
|
— |
|
|
487,198 |
|
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|
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Operating income |
|
75,097 |
|
|
15,448 |
|
|
(116 |
) |
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— |
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|
90,429 |
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Equity income (loss) in unconsolidated investments, net |
|
1,921 |
|
|
— |
|
|
— |
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|
(6,514 |
) |
|
(4,593 |
) |
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Total non-operating expenses |
|
(48,917 |
) |
|
— |
|
|
— |
|
|
(6,514 |
) |
|
(55,431 |
) |
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Income before income taxes |
|
26,180 |
|
|
15,448 |
|
|
(116 |
) |
|
(6,514 |
) |
|
34,998 |
|
|
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Provision for income taxes |
|
6,607 |
|
|
3,882 |
|
|
(27 |
) |
|
(1,637 |
) |
|
8,825 |
|
|
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Net income attributable to |
|
19,947 |
|
|
11,566 |
|
|
(89 |
) |
|
(4,877 |
) |
|
26,547 |
|
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Net income per share-diluted |
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$ |
0.09 |
|
|
$ |
0.05 |
|
|
$ |
— |
|
|
$ |
(0.02 |
) |
|
$ |
0.12 |
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Special Items |
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Quarter ended |
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GAAP
|
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Severance
|
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Acquisition-
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Spectrum
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Other non-
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Non-
|
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Cost of revenues |
|
$ |
285,293 |
|
|
$ |
(875 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
284,418 |
|
Business units - Selling, general and administrative expenses |
|
73,941 |
|
|
(376 |
) |
|
— |
|
|
— |
|
|
— |
|
|
73,565 |
|
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Corporate - General and administrative expenses |
|
15,836 |
|
|
(201 |
) |
|
(5,208 |
) |
|
— |
|
|
— |
|
|
10,427 |
|
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Spectrum repacking reimbursements and other, net |
|
(4,306 |
) |
|
— |
|
|
— |
|
|
4,306 |
|
|
— |
|
|
— |
|
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Operating expenses |
|
394,120 |
|
|
(1,452 |
) |
|
(5,208 |
) |
|
4,306 |
|
|
— |
|
|
391,766 |
|
||||||
Operating income |
|
142,812 |
|
|
1,452 |
|
|
5,208 |
|
|
(4,306 |
) |
|
— |
|
|
145,166 |
|
||||||
Equity (loss) in unconsolidated investments, net |
|
(615 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(615 |
) |
||||||
Other non-operating items, net |
|
8,964 |
|
|
— |
|
|
— |
|
|
— |
|
|
(7,285 |
) |
|
1,679 |
|
||||||
Total non-operating expenses |
|
(37,978 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(7,285 |
) |
|
(45,263 |
) |
||||||
Income before income taxes |
|
104,834 |
|
|
1,452 |
|
|
5,208 |
|
|
(4,306 |
) |
|
(7,285 |
) |
|
99,903 |
|
||||||
Provision for income taxes |
|
24,879 |
|
|
359 |
|
|
1,062 |
|
|
(1,089 |
) |
|
(1,824 |
) |
|
23,387 |
|
||||||
Net income attributable to |
|
79,955 |
|
|
1,093 |
|
|
4,146 |
|
|
(3,217 |
) |
|
(5,461 |
) |
|
76,516 |
|
||||||
Net income per share-diluted |
|
$ |
0.37 |
|
|
$ |
0.01 |
|
|
$ |
0.02 |
|
|
$ |
(0.02 |
) |
|
$ |
(0.03 |
) |
|
$ |
0.35 |
|
Table No. 2 (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
Special Items |
|
|
||||||||||||||||||||||||||
Six months ended |
|
GAAP
|
|
M&A due
|
|
Advisory fees
|
|
Spectrum
|
|
Gains on
|
|
Other
|
|
Special
|
|
Non-
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate - General and administrative expenses |
|
$ |
50,026 |
|
|
$ |
(4,588 |
) |
|
$ |
(23,087 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
22,351 |
|
Spectrum repacking reimbursements and other, net |
|
(7,631 |
) |
|
— |
|
|
— |
|
|
7,631 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
||||||||
Operating expenses |
|
1,012,181 |
|
|
(4,588 |
) |
|
(23,087 |
) |
|
7,631 |
|
|
— |
|
|
— |
|
|
— |
|
|
992,137 |
|
||||||||
Operating income |
|
249,635 |
|
|
4,588 |
|
|
23,087 |
|
|
(7,631 |
) |
|
— |
|
|
— |
|
|
— |
|
|
269,679 |
|
||||||||
Equity income (loss) in unconsolidated investments, net |
|
10,936 |
|
|
— |
|
|
— |
|
|
— |
|
|
(18,585 |
) |
|
— |
|
|
— |
|
|
(7,649 |
) |
||||||||
Other non-operating items, net |
|
(18,231 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
21,744 |
|
|
— |
|
|
3,513 |
|
||||||||
Total non-operating expenses |
|
(116,132 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(18,585 |
) |
|
21,744 |
|
|
— |
|
|
(112,973 |
) |
||||||||
Income before income taxes |
|
133,503 |
|
|
4,588 |
|
|
23,087 |
|
|
(7,631 |
) |
|
(18,585 |
) |
|
21,744 |
|
|
— |
|
|
156,706 |
|
||||||||
Provision for income taxes |
|
27,732 |
|
|
1,151 |
|
|
5,801 |
|
|
(2,017 |
) |
|
(4,670 |
) |
|
5,463 |
|
|
3,944 |
|
|
37,404 |
|
||||||||
Net income attributable to |
|
106,255 |
|
|
3,437 |
|
|
17,286 |
|
|
(5,614 |
) |
|
(13,915 |
) |
|
16,281 |
|
|
(3,944 |
) |
|
119,786 |
|
||||||||
Net income per share-diluted |
|
$ |
0.48 |
|
|
$ |
0.02 |
|
|
$ |
0.08 |
|
|
$ |
(0.03 |
) |
|
$ |
(0.06 |
) |
|
$ |
0.07 |
|
|
$ |
(0.02 |
) |
|
$ |
0.54 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
Special Items |
|
|
|
|
||||||||||||||||||||||||
Six months ended |
|
GAAP
|
|
Severance
|
|
Acquisition-
|
|
Spectrum
|
|
Gain on
|
|
Other
|
|
Non-
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cost of revenues |
|
$ |
566,604 |
|
|
$ |
(875 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
565,729 |
|
|
|
||
Business units - Selling, general and administrative expenses |
|
145,406 |
|
|
(376 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
145,030 |
|
|
|
|||||||||
Corporate - General and administrative expenses |
|
30,571 |
|
|
(201 |
) |
|
(9,119 |
) |
|
— |
|
|
— |
|
|
— |
|
|
21,251 |
|
|
|
|||||||||
Spectrum repacking reimbursements and other, net |
|
(11,319 |
) |
|
— |
|
|
— |
|
|
11,319 |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|||||||||
Operating expenses |
|
778,224 |
|
|
(1,452 |
) |
|
(9,119 |
) |
|
11,319 |
|
|
— |
|
|
— |
|
|
778,972 |
|
|
|
|||||||||
Operating income |
|
275,461 |
|
|
1,452 |
|
|
9,119 |
|
|
(11,319 |
) |
|
— |
|
|
— |
|
|
274,713 |
|
|
|
|||||||||
Equity income (loss) in unconsolidated investments, net |
|
11,413 |
|
|
— |
|
|
— |
|
|
— |
|
|
(13,126 |
) |
|
— |
|
|
(1,713 |
) |
|
|
|||||||||
Other non-operating items, net |
|
7,425 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(6,285 |
) |
|
1,140 |
|
|
|
|||||||||
Total non-operating expense |
|
(73,874 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(13,126 |
) |
|
(6,285 |
) |
|
(93,285 |
) |
|
|
|||||||||
Income before income taxes |
|
201,587 |
|
|
1,452 |
|
|
9,119 |
|
|
(11,319 |
) |
|
(13,126 |
) |
|
(6,285 |
) |
|
181,428 |
|
|
|
|||||||||
Provision for income taxes |
|
47,653 |
|
|
359 |
|
|
2,042 |
|
|
(2,847 |
) |
|
(3,169 |
) |
|
(1,574 |
) |
|
42,464 |
|
|
|
|||||||||
Net income attributable to |
|
153,934 |
|
|
1,093 |
|
|
7,077 |
|
|
(8,472 |
) |
|
(9,957 |
) |
|
(4,711 |
) |
|
138,964 |
|
|
|
|||||||||
Net income per share-diluted |
|
$ |
0.71 |
|
|
$ |
0.01 |
|
|
$ |
0.03 |
|
|
$ |
(0.04 |
) |
|
$ |
(0.05 |
) |
|
$ |
(0.02 |
) |
|
$ |
0.64 |
|
|
|
NON-GAAP FINANCIAL INFORMATION |
||||||||||||
|
||||||||||||
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 |
|||||||||||
|
2020 |
|
2019 |
|
2018 |
|||||||
Net income attributable to |
$ |
19,947 |
|
|
$ |
79,955 |
|
|
$ |
92,512 |
|
|
Less: Net loss attributable to redeemable noncontrolling interest |
(374 |
) |
|
— |
|
|
— |
|
||||
Plus: Provision for income taxes |
6,607 |
|
|
24,879 |
|
|
27,755 |
|
||||
Plus: Interest expense |
51,877 |
|
|
46,327 |
|
|
49,104 |
|
||||
(Less) Plus: Equity (income) loss in unconsolidated investments, net |
(1,921 |
) |
|
615 |
|
|
(15,547 |
) |
||||
Less: Other non-operating items, net |
(1,039 |
) |
|
(8,964 |
) |
|
311 |
|
||||
Operating income (GAAP basis) |
75,097 |
|
|
142,812 |
|
|
154,135 |
|
||||
Plus: Severance expense |
— |
|
|
1,452 |
|
|
— |
|
||||
Plus: Acquisition-related costs |
— |
|
|
5,208 |
|
|
— |
|
||||
Plus: Advisory fees related to activism defense |
15,448 |
|
|
— |
|
|
— |
|
||||
Less: Spectrum repacking reimbursements and other, net |
(116 |
) |
|
(4,306 |
) |
|
(6,326 |
) |
||||
Adjusted operating income (non-GAAP basis) |
90,429 |
|
|
145,166 |
|
|
147,809 |
|
||||
Plus: Depreciation |
16,711 |
|
|
14,533 |
|
|
13,861 |
|
||||
Plus: Amortization of intangible assets |
17,248 |
|
|
8,823 |
|
|
7,962 |
|
||||
Adjusted EBITDA (non-GAAP basis) |
$ |
124,388 |
|
|
$ |
168,522 |
|
|
$ |
169,632 |
|
|
Corporate - General and administrative expense (non-GAAP basis) |
12,864 |
|
|
10,427 |
|
|
11,221 |
|
||||
Adjusted EBITDA, excluding Corporate (non-GAAP basis) |
$ |
137,252 |
|
|
$ |
178,949 |
|
|
$ |
180,853 |
|
|
|
|
|
|
|
|
|||||||
|
Six months ended |
|||||||||||
|
2020 |
|
2019 |
|
2018 |
|||||||
Net income attributable to |
$ |
106,255 |
|
|
$ |
153,934 |
|
|
$ |
147,699 |
|
|
Less: Net loss attributable to redeemable noncontrolling interest |
(484 |
) |
|
— |
|
|
— |
|
||||
Plus: Provision for income taxes |
27,732 |
|
|
47,653 |
|
|
48,140 |
|
||||
Plus: Interest expense |
108,837 |
|
|
92,712 |
|
|
96,829 |
|
||||
Less: Equity income in unconsolidated investments, net |
(10,936 |
) |
|
(11,413 |
) |
|
(14,309 |
) |
||||
Plus (Less): Other non-operating items, net |
18,231 |
|
|
(7,425 |
) |
|
12,791 |
|
||||
Operating income (GAAP basis) |
249,635 |
|
|
275,461 |
|
|
291,150 |
|
||||
Plus: Severance expense |
— |
|
|
1,452 |
|
|
— |
|
||||
Plus: M&A due diligence costs |
4,588 |
|
|
— |
|
|
— |
|
||||
Plus: Acquisition-related costs |
— |
|
|
9,119 |
|
|
— |
|
||||
Plus: Advisory fees related to activism defense |
23,087 |
|
|
— |
|
|
— |
|
||||
Less: Spectrum repacking reimbursements and other, net |
(7,631 |
) |
|
(11,319 |
) |
|
(6,326 |
) |
||||
Adjusted operating income (non-GAAP basis) |
269,679 |
|
|
274,713 |
|
|
284,824 |
|
||||
Plus: Depreciation |
33,611 |
|
|
29,450 |
|
|
27,332 |
|
||||
Plus: Amortization of intangible assets |
33,464 |
|
|
17,512 |
|
|
14,744 |
|
||||
Adjusted EBITDA (non-GAAP basis) |
$ |
336,754 |
|
|
$ |
321,675 |
|
|
$ |
326,900 |
|
|
Corporate - General and administrative expense (non-GAAP basis) |
22,351 |
|
|
21,251 |
|
|
23,929 |
|
||||
Adjusted EBITDA, excluding Corporate (non-GAAP basis) |
$ |
359,105 |
|
|
$ |
342,926 |
|
|
$ |
350,829 |
|
|
|
|
|
|
|
|
|||||||
*** Not meaningful |
|
|
|
|
|
NON-GAAP FINANCIAL INFORMATION |
||||||||||||||||||
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 |
|||||||||||||||||
|
2020 |
|
2019 |
|
% Increase
|
|
2018 |
|
% Increase
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Advertising and Marketing Services |
$ |
229,083 |
|
|
$ |
289,569 |
|
|
(20.9 |
) |
|
$ |
281,847 |
|
|
(18.7 |
) |
|
Subscription |
323,475 |
|
|
236,162 |
|
|
37.0 |
|
|
209,363 |
|
|
54.5 |
|
||||
Political |
17,544 |
|
|
3,229 |
|
|
*** |
|
25,709 |
|
|
(31.8 |
) |
|||||
Other |
7,525 |
|
|
7,972 |
|
|
(5.6 |
) |
|
7,161 |
|
|
5.1 |
|
||||
Total revenues |
$ |
577,627 |
|
|
$ |
536,932 |
|
|
7.6 |
|
|
$ |
524,080 |
|
|
10.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBITDA |
$ |
124,388 |
|
|
$ |
168,522 |
|
|
(26.2 |
) |
|
$ |
169,632 |
|
|
(26.7 |
) |
|
Adjusted EBITDA Margin |
21.5 |
% |
|
31.4 |
% |
|
|
|
32.4 |
% |
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Six months ended |
|||||||||||||||||
|
2020 |
|
2019 |
|
% Increase
|
|
2018 |
|
% Increase
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Advertising and Marketing Services |
$ |
524,236 |
|
|
$ |
553,971 |
|
|
(5.4 |
) |
|
$ |
564,786 |
|
|
(7.2 |
) |
|
Subscription |
656,277 |
|
|
477,737 |
|
|
37.4 |
|
|
414,919 |
|
|
58.2 |
|
||||
Political |
64,931 |
|
|
5,933 |
|
|
*** |
|
33,315 |
|
|
94.9 |
|
|||||
Other |
16,372 |
|
|
16,044 |
|
|
2.0 |
|
|
13,150 |
|
|
24.5 |
|
||||
Total revenues |
$ |
1,261,816 |
|
|
$ |
1,053,685 |
|
|
19.8 |
|
|
$ |
1,026,170 |
|
|
23.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBITDA |
$ |
336,754 |
|
|
$ |
321,675 |
|
|
4.7 |
|
|
$ |
326,900 |
|
|
3.0 |
|
|
Adjusted EBITDA Margin |
26.7 |
% |
|
30.5 |
% |
|
|
|
31.9 |
% |
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|||||||||
*** Not meaningful |
|
|
|
|
|
|
|
|
|
NON-GAAP FINANCIAL INFORMATION |
|||||||||||
|
|||||||||||
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 |
||||||||||
|
2020 |
|
2019 |
|
% Increase
|
||||||
|
|
|
|
|
|
||||||
Net income attributable to |
$ |
19,947 |
|
|
$ |
79,955 |
|
|
(75.1 |
) |
|
Plus: Provision for income taxes |
6,607 |
|
|
24,879 |
|
|
(73.4 |
) |
|||
Plus: Interest expense |
51,877 |
|
|
46,327 |
|
|
12.0 |
|
|||
Plus: Acquisition-related costs |
— |
|
|
5,208 |
|
|
*** |
||||
Plus: Depreciation |
16,711 |
|
|
14,533 |
|
|
15.0 |
|
|||
Plus: Amortization |
17,248 |
|
|
8,823 |
|
|
95.5 |
|
|||
Plus: Stock-based compensation |
8,325 |
|
|
5,008 |
|
|
66.2 |
|
|||
Plus: Company stock 401(k) contribution |
3,428 |
|
|
3,244 |
|
|
5.7 |
|
|||
Plus: Syndicated programming amortization |
17,796 |
|
|
13,531 |
|
|
31.5 |
|
|||
Plus: Severance expense |
— |
|
|
1,452 |
|
|
*** |
||||
Plus: Advisory fees related to activism defense |
15,448 |
|
|
— |
|
|
*** |
||||
Plus: Cash dividend from equity investments for return on capital |
3,358 |
|
|
— |
|
|
*** |
||||
Plus: Cash reimbursements from spectrum repacking |
2,253 |
|
|
4,306 |
|
|
(47.7 |
) |
|||
Less: Other non-operating items, net |
(1,039 |
) |
|
(8,964 |
) |
|
(88.4 |
) |
|||
Less: Net loss attributable to redeemable noncontrolling interest |
(374 |
) |
|
— |
|
|
*** |
||||
Less: Income tax (payments) receipts, net of refunds |
327 |
|
|
(56,182 |
) |
|
*** |
||||
Less: Spectrum repacking reimbursements and other, net |
(116 |
) |
|
(4,306 |
) |
|
(97.3 |
) |
|||
Plus: Equity income in unconsolidated investments, net |
(1,921 |
) |
|
615 |
|
|
*** |
||||
Less: Syndicated programming payments |
(17,966 |
) |
|
(10,434 |
) |
|
72.2 |
|
|||
Less: Pension contributions |
(941 |
) |
|
(5,005 |
) |
|
(81.2 |
) |
|||
Less: Interest payments |
(33,833 |
) |
|
(58,549 |
) |
|
(42.2 |
) |
|||
Less: Purchases of property and equipment |
(11,044 |
) |
|
(12,874 |
) |
|
(14.2 |
) |
|||
Free cash flow (non-GAAP basis) |
$ |
96,091 |
|
|
$ |
51,567 |
|
|
86.3 |
|
|
|
|
|
|
|
|
||||||
*** Not meaningful |
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Table No. 5 (continued) |
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Reconciliations of free cash flow to net income presented in accordance with GAAP on the company's Consolidated Statements of Income are presented below: |
|||||||||||
|
|
||||||||||
|
Six months ended |
||||||||||
|
2020 |
|
2019 |
|
% Increase
|
||||||
|
|
|
|
|
|
||||||
Net income attributable to |
$ |
106,255 |
|
|
$ |
153,934 |
|
|
(31.0 |
) |
|
Plus: Provision for income taxes |
27,732 |
|
|
47,653 |
|
|
(41.8 |
) |
|||
Plus: Interest expense |
108,837 |
|
|
92,712 |
|
|
17.4 |
|
|||
Plus: M&A due diligence costs |
4,588 |
|
|
— |
|
|
*** |
||||
Plus: Acquisition-related costs |
— |
|
|
9,119 |
|
|
*** |
||||
Plus: Depreciation |
33,611 |
|
|
29,450 |
|
|
14.1 |
|
|||
Plus: Amortization |
33,464 |
|
|
17,512 |
|
|
91.1 |
|
|||
Plus: Stock-based compensation |
7,568 |
|
|
9,442 |
|
|
(19.8 |
) |
|||
Plus: Company stock 401(k) contribution |
8,566 |
|
|
3,244 |
|
|
*** |
||||
Plus: Syndicated programming amortization |
35,971 |
|
|
26,994 |
|
|
33.3 |
|
|||
Plus: Severance expense |
— |
|
|
1,452 |
|
|
*** |
||||
Plus: Advisory fees related to activism defense |
23,087 |
|
|
— |
|
|
*** |
||||
Plus: Cash dividend from equity investments for return on capital |
3,566 |
|
|
— |
|
|
*** |
||||
Plus: Cash reimbursements from spectrum repacking |
9,768 |
|
|
8,439 |
|
|
15.7 |
|
|||
Less: Other non-operating items, net |
18,231 |
|
|
(7,425 |
) |
|
*** |
||||
Less: Net loss attributable to redeemable noncontrolling interest |
(484 |
) |
|
— |
|
|
*** |
||||
Less: Income tax (payments) receipts, net of refunds |
(465 |
) |
|
(55,785 |
) |
|
(99.2 |
) |
|||
Less: Spectrum repacking reimbursements and other, net |
(7,631 |
) |
|
(11,319 |
) |
|
(32.6 |
) |
|||
Less: Equity income in unconsolidated investments, net |
(10,936 |
) |
|
(11,413 |
) |
|
(4.2 |
) |
|||
Less: Syndicated programming payments |
(35,831 |
) |
|
(23,722 |
) |
|
51.0 |
|
|||
Less: Pension contributions |
(3,250 |
) |
|
(5,947 |
) |
|
(45.4 |
) |
|||
Less: Interest payments |
(100,074 |
) |
|
(85,961 |
) |
|
16.4 |
|
|||
Less: Purchases of property and equipment |
(24,308 |
) |
|
(37,684 |
) |
|
(35.5 |
) |
|||
Free cash flow (non-GAAP basis) |
$ |
238,265 |
|
|
$ |
160,695 |
|
|
48.3 |
|
|
|
|
|
|
|
|
||||||
*** Not meaningful |
|
|
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20200810005318/en/
For media inquiries, contact:
Vice President, Corporate Communications
703-873-6366
abentley@TEGNA.com
For investor inquiries, contact:
Head of Investor Relations
703-873-6764
dkuckelman@TEGNA.com
Source: