SEC Filings

10-Q
TEGNA INC filed this Form 10-Q on 11/08/2018
Entire Document
 


liquidity. In particular, Adjusted EBITDA is not intended to be a measure of free cash flow available for management’s discretionary expenditures, as this measure does not consider certain cash requirements, such as working capital needs, capital expenditures, contractual commitments, interest payments, tax payments and other debt service requirements.

We also consider adjusted revenues to be an important non-GAAP financial measure. Our adjusted revenue is calculated by taking total company revenues on a GAAP basis and adjusting it to exclude (1) estimated net incremental Olympic and Super Bowl revenue, (2) Political revenues, and (3) revenues associated with a discontinued portion of our DMS business. These adjustments are made to our reported revenue on a GAAP basis in order to evaluate and assess our core operations on a comparable basis, and it represents the ongoing operations of our broadcast business.

We also discuss 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”. We believe 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 our cash balance, or use in other discretionary activities. We use free cash flow to monitor cash available for repayment of indebtedness and in 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.

Discussion of special charges affecting reported results

Our results for the quarter and nine months ended September 30, 2018 included the following items we consider “special items” and are not indicative of our normal ongoing operations:

Operating asset impairment and other net gains primarily consists of a gain recognized on the sale of real estate in Houston and gains due to reimbursements from the FCC for required spectrum repacking. These gains are partially offset by an early lease termination payment;
Severance charges which included payroll and related benefit costs due to restructuring at our DMS business and at our corporate headquarters;
Other non-operating items associated with business acquisition and integration costs, and a charitable donation made to the TEGNA Foundation;
Pension payment timing related charges related to the acceleration of previously deferred pension costs as a result of lump sum SERP payments made to certain former executives.
A gain recognized in our equity income in unconsolidated investments, related to our share of CareerBuilder’s gain on the sale of its EMSI business;
Tax provision impacts related to our acquisition of KFMB; and
Deferred tax benefits related to adjusting the provisional tax impacts of tax reform (enacted in December 2017) and a partial capital loss valuation allowance release, both resulting from the completion of our 2017 federal income tax return in the third quarter of 2018.
Our results for the quarter and nine months ended September 30, 2017 included the following special items:
Operating asset impairment and other charges related to damage caused by Hurricane Harvey and the consolidation of office space at corporate headquarters and at our DMS business;
Other non-operating items associated with costs of the spin-off of our Cars.com business unit, a charitable donation made to the TEGNA Foundation, and non-cash asset impairment charges associated with write off of a note receivable associated with an equity method investment;
Special tax benefit related to deferred tax remeasurement attributable to the spin-off of our Cars.com business unit and a deferred tax adjustment related to a previously-disposed business; and
Severance charges which included payroll and related benefit costs.

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