TEGNA Inc. Announces Record Second Quarter Results and Provides Third Quarter Guidance
Achieves record second quarter total company revenue, subscription revenue, advertising and marketing services revenue, net income, and Adjusted EBITDA
Expects to achieve the high end of new 2020 to 2021 free cash flow as a percentage of revenue guidance range of 21.5 to 22.0 percent
Improving subscriber trends year-over-year, which increased more than a full percentage point in five months
Accelerating, strong advertising and marketing services revenue despite negative impact of current supply chain issues in auto category
TYSONS, Va.--(BUSINESS WIRE)--Aug. 9, 2021--
SECOND QUARTER HIGHLIGHTS:
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Total company revenue was
$733 million in the quarter, up 27 percent year-over-year, driven by record second quarter subscription revenue and advertising and marketing services (“AMS”) revenue.- On a two-year basis, revenue was up 37 percent from the second quarter of 2019 driven by higher subscription revenue, as well as acquisitions.1
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Subscription revenue was
$375 million in the second quarter, up 16 percent driven by rate increases.- Year-over-year subscriber trends continue to improve, now more than a full percentage point better than five months earlier.
- Full-year subscription revenue is on track to grow mid-to-high teens percent.
- Net subscription profits are also on track to grow in the mid-to-high twenties percent in 2021.2
-
AMS revenue was
$341 million , up 49 percent year-over-year.- Compared to two years ago, AMS revenue was down less than one percent on a pro forma basis3, despite continued impacts of COVID-19 in a few select categories, most notably auto due to semiconductor supply chain issues.
- Excluding the auto category, on a pro forma basis, AMS was up mid-single digits percent compared to the second quarter of 2019.
-
TEGNA achieved net income of$107 million in the second quarter on a GAAP basis, or$112 million on a non-GAAP basis. -
Total company Adjusted EBITDA was a second quarter record of
$228 million , up 83 percent year-over-year, reflecting strong operational performance of TEGNA’s stations as well as an improving economy.- Second quarter Adjusted EBITDA was up 35 percent compared with the second quarter of 2019.
-
GAAP and non-GAAP earnings per diluted share were
$0.48 and$0.50 , respectively, in the second quarter. -
Free cash flow for the second quarter was
$92 million , driven by continued growth in subscription revenue and sequential improvement in AMS revenue, as well as the ongoing benefit of cost saving initiatives that have been underway for more than 24 months. Free cash flow was offset by approximately$118 million in income tax payments, elevated due to strong fourth quarter 2020 results driven in great part by record political advertising.-
For the trailing two-year period ending
June 30, 2021 , free cash flow as a percentage of revenue was 21.4 percent. - The Company is raising the low end of the previous 2020-2021 free cash flow as a percentage of 2020-2021 revenue guidance range to 21.5 – 22.0 percent, and expects to achieve the high end of that range.
-
For the trailing two-year period ending
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The Company ended the quarter with total debt of
$3.5 billion and net leverage of 3.64x.-
TEGNA is on track to achieve its full-year net leverage guidance of low 3x by year-end.
-
______________________________ |
1 Throughout earnings release, “acquisitions” includes (1) the |
2 Computed as subscription revenue less reverse compensation paid to our network programming partners. |
3 Throughout earnings release, “pro forma” reflects 2019 acquisitions as if they had been completed on |
CEO COMMENT
“TEGNA’s consistent execution of our long-term strategy resulted in another quarter of record performance, supported by the underlying strength of our subscription business, growing and accelerating advertising and marketing services revenue, as well as our disciplined expense management,” said
“Our high-margin subscription revenue remains a core driver of our underlying growth, and this quarter was no exception. Subscription revenue was 16 percent above the same quarter last year, and 59 percent above the second quarter of 2019. Subscriber trends also continue to improve, now more than a full percentage point better than five months earlier. We remain on track for our full-year subscription revenue to grow mid-to-high teens percent and net subscription profit growth to finish in the mid-to-high twenties percent for the full year.
“The advertising market continues to show broad-based strength, with accelerating momentum across almost every major advertising category. Even with current supply chain issues significantly impacting the auto category, AMS revenue in the second quarter was up nearly 50 percent over last year. On a two-year pro forma basis, AMS revenue was down less than one percent compared to the second quarter of 2019, and excluding auto, would have been up mid-single digits. AMS sales are accelerating each week and we expect the third quarter to finish significantly stronger.
“Premion also continues to accelerate and remains on track to grow 45 to 50 percent compared to 2020. This industry-leading OTT advertising platform is fueled by a local salesforce that now extends to almost 75 percent of households across the
“TEGNA’s Board evaluates the best use of capital through our disciplined capital allocation framework, always with the goal of maximizing value for our shareholders. Our ability to deploy capital is driven by our high-margin, durable revenue streams and substantial free cash flow. During the quarter, we returned capital to shareholders through our July dividend payment, which was the first payment after our recent 36 percent annualized dividend increase. Following through on our commitment to pay down debt, we achieved net leverage of 3.64x at the end of the second quarter, and expect to reach the low 3x range by the end of 2021. In anticipation of achieving this, our Board is actively monitoring all additional options to deploy capital to enhance shareholder value, including the use of our
“In the quarter, we continued to make meaningful progress on embedding diversity, equity and inclusion into our culture. This February, we set quantifiable five-year goals to increase Black, Indigenous and People of Color representation in content teams, news leadership and management roles. Since then, through intentional actions, we are progressing at or above the rate of change needed to achieve our five-year goals. This includes improvements in department-head management positions that are key to hiring and decision-making. Our Inclusive Journalism program, which was developed last year in partnership with the
“Just last week,
OVERVIEW OF SECOND QUARTER RESULTS
Due to the impact of COVID-19 in 2020,
Total company revenue was
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 reduce GAAP net income by
Interest expense in the quarter decreased to
THIRD QUARTER AND FULL-YEAR 2021 OUTLOOK
In the third quarter of 2021,
For the third quarter of 2021, the company expects:
Third Quarter 2021 Key Guidance Metrics |
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Reflects expectations relative to third quarter 2020 results |
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Total Company GAAP Revenue |
+ Low-Single Digits percent |
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Non-GAAP Revenue (excluding political) |
+ High-Teens percent |
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Total Non-GAAP Operating Expenses |
+ Mid-to-High Single Digits percent |
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Non-GAAP Operating Expenses |
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(excluding programming) |
+ Mid-Single Digits percent |
Full-Year 2021 Key Guidance Metrics |
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Subscription Revenue Growth |
+ Mid-to-High Teens percent4 |
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Corporate Expenses |
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Depreciation |
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Amortization |
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Interest Expense |
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Capital Expenditures (Non-recurring capital expenditures) |
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Effective Tax Rate |
24.0 - 25.0% |
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Net Leverage Ratio |
Low 3x |
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2020/21 Free Cash Flow as a % of combined 2020/21 Revenue |
21.5 - 22.0% |
______________________________ |
4 Relative to full-year 2020 results |
RECENT STRATEGIC, CONTENT AND PROGRAMMING INITIATIVES
-
Premion Continues Strong Growth Trajectory – Achieving accelerated momentum in the fast-growing streaming TV advertising space, Premion continued its strong growth trajectory, reaching record revenue in the quarter. Premion remains on track to grow revenue 45 to 50 percent in 2021 relative to 2020. Premion sellers reach approximately 75 percent of
U.S. households and continue to benefit from the breadth ofTEGNA and Gray’s local salesforce and footprint of local stations, a unique advantage in selling CTV and OTT. During the quarter, Premion continued to drive product innovation, announcing partnerships with Arrivalist and Polk Automotive Solutions by IHS Markit to deliver data targeting and attribution for travel and automotive advertisers, as well as partnering with TVSquared to power cross-platform, closed-loop measurement. A testament to its market and technology leadership, Premion earned the 2021 Tech Leadership Award for Best OTT and Streaming Technology Award, presented byMultichannel News , TV Tech and Broadcasting+Cable.
-
National VERIFY Brand Continues Rapid Growth – VERIFY, TEGNA’s national brand which helps the public distinguish between true and false information, continued to expand its reach in the second quarter, highlighted by the launch of VerifyThis.com, as well as a dedicated VERIFY presence across Facebook, Twitter, YouTube,
Snapchat , Instagram andTikTok . Visitors to VerifyThis.com spent an average of approximately eight minutes on the site, and the daily VERIFY newsletter had an average open rate of 30 percent for June. Overall, from January throughJune 2021 , VERIFY content on TEGNA’s local station sites and VerifyThis.com delivered 30.1 million total visitors and 7.1 million total video plays, a 166 percent and 46 percent increase, respectively, over the same period in 2020.5
-
Locked On Podcast Network Grows Across Platforms and Debuts NBA Draft Special and First Daily HBCU Podcast– Under TEGNA’s ownership, Locked On’s audience grew 56 percent year-over-year, solidifying its place as the number one daily sports podcaster. 20 Locked On shows are now also available on YouTube. Since inception of the network’s first YouTube channel in 2021, Locked On’s channels have generated more than 160,000 total hours of watch time and more than 1 million video views and by the end of June, averaging more than 10 minutes per video view.6 Locked On also co-produced an NBA Draft 2021 special with WFAA featuring more than 30 local analysts that aired across platforms, including select stations’ OTT apps for Roku and Fire TV and on Locked On’s NBA YouTube channel. On
Aug. 1 , Locked On debuted Locked on HBCU, the first-ever daily podcast dedicated to HBCU athletes and sports. (Press release)
-
Stations Receive National Recognition for Outstanding Journalism –
TEGNA journalists and stations received the following industry awards:KING inSeattle received a prestigious Peabody Award in the Public Service category for “Facing Race,” a multi-part series that explores issues of racial injustice in the aftermath of the murder ofGeorge Floyd ; KPNX inPhoenix received aWalter Cronkite Award for reporting on systemic racism for “The Work is Hard and Not Done: Being Black in the Valley,” which explores the Black experience and historical events inArizona ; WUSA, WKYC, WCNC and WBIR received six Gracie Awards from theAlliance for Women inMedia Foundation ; and KTVB inBoise received a 2021 Service to America Award from theNAB Leadership Foundation for serving the greater good with “7Cares Idaho Shares,” which helped secure almost 2.9 million meals for the hungry and homeless.
______________________________ |
5 Source: |
6 Source: YouTube. |
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Producer-in-Residence Training Invests in Future Broadcast and Digital Producers –
TEGNA welcomed a new class to our Producer-in-Residence program, an initiative for recent college graduates pursuing careers as a broadcast or digital news producer. Launched in 2018, the program includes a one-week producer boot camp before participants are matched with a local station where they will spend two years in a full-time producer position. This year’s participants are our largest and most diverse group since the program’s inception.
-
TEGNA Foundation Grants Support Urgent Community Needs and the Future of Media –
TEGNA Foundation awarded 96 local Community Grants in 28 markets in partnership with local stations and nine Media Grants as part of its mission to drive social impact. Many of this year’s grants are aimed at alleviating community concerns made more urgent by the impacts of the pandemic such as hunger and housing insecurity. Additionally, theTEGNA Foundation is investing in the future of the media industry through the support of several journalism professional development programs, awarding Media Grants to theAsian American Journalists Association (AAJA), theNational Association of Hispanic Journalists (NAHJ) and National Association of Black Journalists (NABJ), among other organizations. (Press release)
CAPITAL ALLOCATION
Through the strength of the Company’s balance sheet and disciplined capital allocation strategy,
TEGNA’s Board is actively assessing all additional capital allocation options in anticipation of achieving the low 3x net leverage guidance target for the end of this year, and with the goal of keeping our net leverage below 4x.
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 nonpolitical 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 and Quarterly Reports on Form 10-Q. Any forward-looking statements in this press release should be evaluated in light of these important risk factors.
CONFERENCE CALL
International callers should dial 929-477-0324. The confirmation code for the conference call is 9878379. To listen to the call via live webcast, please visit investors.TEGNA.com and allow at least 10 minutes to access TEGNA’s home page and complete the links before the webcast begins. A replay of the conference call will be available under “Investor Relations” at www.TEGNA.com from
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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2021 |
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2020 |
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% Increase (Decrease) |
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Revenues |
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$ |
732,908 |
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$ |
577,627 |
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26.9 |
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Operating expenses: |
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|||||
Cost of revenues |
|
397,118 |
|
|
355,367 |
|
|
11.7 |
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||
Business units - Selling, general and administrative expenses |
|
96,949 |
|
|
85,008 |
|
|
14.0 |
|
||
Corporate - General and administrative expenses |
|
23,183 |
|
|
28,312 |
|
|
(18.1 |
) |
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Depreciation |
|
15,838 |
|
|
16,711 |
|
|
(5.2 |
) |
||
Amortization of intangible assets |
|
15,773 |
|
|
17,248 |
|
|
(8.6 |
) |
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Spectrum repacking reimbursements and other, net |
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(1,475 |
) |
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(116 |
) |
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*** |
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Total |
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547,386 |
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|
502,530 |
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8.9 |
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Operating income |
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185,522 |
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75,097 |
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*** |
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Non-operating income (expense): |
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Equity (loss) income in unconsolidated investments, net |
|
(2,597 |
) |
|
1,921 |
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*** |
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Interest expense |
|
(46,609 |
) |
|
(51,877 |
) |
|
(10.2 |
) |
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Other non-operating items, net |
|
1,524 |
|
|
1,039 |
|
|
46.7 |
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Total |
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(47,682 |
) |
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(48,917 |
) |
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(2.5 |
) |
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Income before income taxes |
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137,840 |
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|
26,180 |
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*** |
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Provision for income taxes |
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30,986 |
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|
6,607 |
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*** |
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Net income |
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106,854 |
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|
19,573 |
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*** |
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Net (income) loss attributable to redeemable noncontrolling interest |
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(227 |
) |
|
374 |
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*** |
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Net income attributable to |
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$ |
106,627 |
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$ |
19,947 |
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*** |
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Earnings per share: |
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Basic |
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$ |
0.48 |
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$ |
0.09 |
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*** |
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Diluted |
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$ |
0.48 |
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$ |
0.09 |
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*** |
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Weighted average number of common shares outstanding: |
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Basic shares |
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221,522 |
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219,128 |
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1.1 |
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Diluted shares |
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222,506 |
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219,426 |
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1.4 |
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*** Not meaningful |
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CONSOLIDATED STATEMENTS OF INCOME |
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Unaudited, in thousands of dollars (except per share amounts) |
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Table No. 1 (continued) |
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Six months ended |
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2021 |
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2020 |
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% Increase (Decrease) |
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Revenues |
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$ |
1,459,959 |
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$ |
1,261,816 |
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15.7 |
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Operating expenses: |
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Cost of revenues |
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791,810 |
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|
724,735 |
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9.3 |
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Business units - Selling, general and administrative expenses |
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186,275 |
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177,976 |
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4.7 |
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Corporate - General and administrative expenses |
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40,053 |
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|
50,026 |
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(19.9 |
) |
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Depreciation |
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31,734 |
|
|
33,611 |
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(5.6 |
) |
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Amortization of intangible assets |
|
31,533 |
|
|
33,464 |
|
|
(5.8 |
) |
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Spectrum repacking reimbursements and other, net |
|
(2,898 |
) |
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(7,631 |
) |
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(62.0 |
) |
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Total |
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1,078,507 |
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|
1,012,181 |
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6.6 |
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Operating income |
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381,452 |
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|
249,635 |
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52.8 |
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Non-operating income (expense): |
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Equity (loss) income in unconsolidated investments, net |
|
(3,926 |
) |
|
10,936 |
|
|
*** |
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Interest expense |
|
(93,094 |
) |
|
(108,837 |
) |
|
(14.5 |
) |
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Other non-operating items, net |
|
1,854 |
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|
(18,231 |
) |
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*** |
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Total |
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(95,166 |
) |
|
(116,132 |
) |
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(18.1 |
) |
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Income before income taxes |
|
286,286 |
|
|
133,503 |
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*** |
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Provision for income taxes |
|
66,600 |
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|
27,732 |
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*** |
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Net income |
|
219,686 |
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|
105,771 |
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|
*** |
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Net (income) loss attributable to redeemable noncontrolling interest |
|
(442 |
) |
|
484 |
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*** |
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Net income attributable to |
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$ |
219,244 |
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$ |
106,255 |
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*** |
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Earnings from continuing operations per share: |
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Basic |
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$ |
0.99 |
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$ |
0.48 |
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*** |
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Diluted |
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$ |
0.99 |
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$ |
0.48 |
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*** |
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Weighted average number of common shares outstanding: |
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Basic shares |
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221,064 |
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|
218,703 |
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1.1 |
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Diluted shares |
|
221,855 |
|
|
219,144 |
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1.2 |
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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 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, net, gains related to business we account for under the equity method, M&A due diligence costs, advisory fees related to activism defense, and certain non-operating expenses such as the early extinguishment of debt. In addition, we have excluded certain income tax special items associated with deferred tax benefits related to state tax planning strategies, and a partial capital loss valuation allowance release.
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 performance measure that the Board of Directors uses to review the performance of the business. Free cash flow is reviewed by the Board of Directors as a percentage of revenue over a trailing two-year period (reflecting both an even and odd year reporting period given the political cyclicality of the business). The most directly comparable GAAP financial measure to free cash flow is Net income attributable to
The company is furnishing guidance with respect to free cash flow as a percentage of revenue for the combined 2020-21 years as well as non-GAAP operating expenses for the second quarter of 2021. As noted above, the most directly comparable GAAP financial measure to free cash flow is net income attributable to
NON-GAAP FINANCIAL INFORMATION
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 |
GAAP
|
Advisory fees
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Spectrum
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Special tax
|
Non-GAAP
|
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Corporate - General and administrative expenses |
$ |
23,183 |
|
$ |
(12,012 |
) |
$ |
— |
|
$ |
— |
|
$ |
11,171 |
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|
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Spectrum repacking reimbursements and other, net |
(1,475 |
) |
— |
|
1,475 |
|
— |
|
— |
|
|
|
||||||||||
Operating expenses |
547,386 |
|
(12,012 |
) |
1,475 |
|
— |
|
536,849 |
|
|
|
||||||||||
Operating income |
185,522 |
|
12,012 |
|
(1,475 |
) |
— |
|
196,059 |
|
|
|
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Income before income taxes |
137,840 |
|
12,012 |
|
(1,475 |
) |
— |
|
148,377 |
|
|
|
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Provision for income taxes |
30,986 |
|
3,111 |
|
(374 |
) |
2,797 |
|
36,520 |
|
|
|
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Net income attributable to |
106,627 |
|
8,901 |
|
(1,101 |
) |
(2,797 |
) |
111,630 |
|
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|
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Net income per share-diluted (a) |
$ |
0.48 |
|
$ |
0.04 |
|
$ |
— |
|
$ |
(0.01 |
) |
$ |
0.50 |
|
|
|
|||||
|
|
|
|
|
|
|
|
|||||||||||||||
(a) Per share amounts do not sum due to rounding. |
|
|
|
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
Special Items |
|
|
|
|||||||||||||||||
Quarter ended |
GAAP
|
Advisory fees
|
Spectrum
|
Gain on equity
|
Non-GAAP
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||
Corporate - General and administrative expenses |
$ |
28,312 |
|
$ |
(15,448 |
) |
$ |
— |
|
$ |
— |
|
$ |
12,864 |
|
|
|
|||||
Spectrum repacking reimbursements and other, net |
(116 |
) |
— |
|
116 |
|
— |
|
— |
|
|
|
||||||||||
Operating expenses |
502,530 |
|
(15,448 |
) |
116 |
|
— |
|
487,198 |
|
|
|
||||||||||
Operating income |
75,097 |
|
15,448 |
|
(116 |
) |
— |
|
90,429 |
|
|
|
||||||||||
Equity income (loss) in unconsolidated investments, net |
1,921 |
|
— |
|
— |
|
(6,514 |
) |
(4,593 |
) |
|
|
||||||||||
Total non-operating expenses |
(48,917 |
) |
— |
|
— |
|
(6,514 |
) |
(55,431 |
) |
|
|
||||||||||
Income before income taxes |
26,180 |
|
15,448 |
|
(116 |
) |
(6,514 |
) |
34,998 |
|
|
|
||||||||||
Provision for income taxes |
6,607 |
|
3,882 |
|
(27 |
) |
(1,637 |
) |
8,825 |
|
|
|
||||||||||
Net income attributable to |
19,947 |
|
11,566 |
|
(89 |
) |
(4,877 |
) |
26,547 |
|
|
|
||||||||||
Net income per share-diluted |
$ |
0.09 |
|
$ |
0.05 |
|
$ |
— |
|
$ |
(0.02 |
) |
$ |
0.12 |
|
|
|
|||||
|
|
|
|
|
|
NON-GAAP FINANCIAL INFORMATION |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Unaudited, in thousands of dollars (except per share amounts) |
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Table No. 2 (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
|
|
|
Special Items |
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Six months ended |
|
GAAP
|
|
Advisory fees
|
|
Spectrum
|
|
Special tax
|
|
Non-GAAP
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Corporate - General and administrative expenses |
|
$ |
40,053 |
|
|
|
$ |
(16,611 |
) |
|
|
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
23,442 |
|
|
|
|
|
|
|
|
||||||||
Spectrum repacking reimbursements and other, net |
|
(2,898 |
) |
|
|
— |
|
|
|
2,898 |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|||||||||||||
Operating expenses |
|
1,078,507 |
|
|
|
(16,611 |
) |
|
|
2,898 |
|
|
|
— |
|
|
|
1,064,794 |
|
|
|
|
|
|
|
|
|||||||||||||
Operating income |
|
381,452 |
|
|
|
16,611 |
|
|
|
(2,898 |
) |
|
|
— |
|
|
|
395,165 |
|
|
|
|
|
|
|
|
|||||||||||||
Equity income (loss) in unconsolidated investments, net |
|
(3,926 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3,926 |
) |
|
|
|
|
|
|
|
|||||||||||||
Other non-operating items, net |
|
1,854 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,854 |
|
|
|
|
|
|
|
|
|||||||||||||
Total non-operating expenses |
|
(95,166 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(95,166 |
) |
|
|
|
|
|
|
|
|||||||||||||
Income before income taxes |
|
286,286 |
|
|
|
16,611 |
|
|
|
(2,898 |
) |
|
|
— |
|
|
|
299,999 |
|
|
|
|
|
|
|
|
|||||||||||||
Provision for income taxes |
|
66,600 |
|
|
|
4,291 |
|
|
|
(741 |
) |
|
|
2,797 |
|
|
|
72,947 |
|
|
|
|
|
|
|
|
|||||||||||||
Net income attributable to |
|
219,244 |
|
|
|
12,320 |
|
|
|
(2,157 |
) |
|
|
(2,797 |
) |
|
|
226,610 |
|
|
|
|
|
|
|
|
|||||||||||||
Net income per share-diluted (a) |
|
$ |
0.99 |
|
|
|
$ |
0.06 |
|
|
|
$ |
(0.01 |
) |
|
|
$ |
(0.01 |
) |
|
|
$ |
1.02 |
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
(a) Per share amounts do not sum due to rounding. |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
|
|
|
Special Items |
|
|
|||||||||||||||||||||||||||||||||
Six months ended |
|
GAAP
|
|
M&A due
|
|
Advisory fees
|
|
Spectrum
|
|
Gains on equity
|
|
Other non-
|
|
Special
|
|
Non-GAAP
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|||||||||||||
|
2021 |
|
2020 |
|
2019 |
|||||||||
Net income attributable to |
$ |
106,627 |
|
|
|
$ |
19,947 |
|
|
|
$ |
79,955 |
|
|
Plus (Less): Net income (loss) attributable to redeemable noncontrolling interest |
227 |
|
|
|
(374 |
) |
|
|
— |
|
|
|||
Plus: Provision for income taxes |
30,986 |
|
|
|
6,607 |
|
|
|
24,879 |
|
|
|||
Plus: Interest expense |
46,609 |
|
|
|
51,877 |
|
|
|
46,327 |
|
|
|||
Plus (Less): Equity loss (income) in unconsolidated investments, net |
2,597 |
|
|
|
(1,921 |
) |
|
|
615 |
|
|
|||
Less: Other non-operating items, net |
(1,524 |
) |
|
|
(1,039 |
) |
|
|
(8,964 |
) |
|
|||
Operating income (GAAP basis) |
185,522 |
|
|
|
75,097 |
|
|
|
142,812 |
|
|
|||
Plus: Workforce restructuring expense |
— |
|
|
|
— |
|
|
|
1,452 |
|
|
|||
Plus: Acquisition-related costs |
— |
|
|
|
— |
|
|
|
5,208 |
|
|
|||
Plus: Advisory fees related to activism defense |
12,012 |
|
|
|
15,448 |
|
|
|
— |
|
|
|||
Less: Spectrum repacking reimbursements and other, net |
(1,475 |
) |
|
|
(116 |
) |
|
|
(4,306 |
) |
|
|||
Adjusted operating income (non-GAAP basis) |
196,059 |
|
|
|
90,429 |
|
|
|
145,166 |
|
|
|||
Plus: Depreciation |
15,838 |
|
|
|
16,711 |
|
|
|
14,533 |
|
|
|||
Plus: Amortization of intangible assets |
15,773 |
|
|
|
17,248 |
|
|
|
8,823 |
|
|
|||
Adjusted EBITDA (non-GAAP basis) |
$ |
227,670 |
|
|
|
$ |
124,388 |
|
|
|
$ |
168,522 |
|
|
Corporate - General and administrative expense (non-GAAP basis) |
11,171 |
|
|
|
12,864 |
|
|
|
10,427 |
|
|
|||
Adjusted EBITDA, excluding Corporate (non-GAAP basis) |
$ |
238,841 |
|
|
|
$ |
137,252 |
|
|
|
$ |
178,949 |
|
|
|
|
|
|
|
|
|||||||||
|
Six months ended |
|||||||||||||
|
2021 |
|
2020 |
|
2019 |
|||||||||
Net income attributable to |
$ |
219,244 |
|
|
|
$ |
106,255 |
|
|
|
$ |
153,934 |
|
|
Plus (Less): Net income (loss) attributable to redeemable noncontrolling interest |
442 |
|
|
|
(484 |
) |
|
|
— |
|
|
|||
Plus: Provision for income taxes |
66,600 |
|
|
|
27,732 |
|
|
|
47,653 |
|
|
|||
Plus: Interest expense |
93,094 |
|
|
|
108,837 |
|
|
|
92,712 |
|
|
|||
Plus (Less): Equity loss (income) in unconsolidated investments, net |
3,926 |
|
|
|
(10,936 |
) |
|
|
(11,413 |
) |
|
|||
(Less) Plus: Other non-operating items, net |
(1,854 |
) |
|
|
18,231 |
|
|
|
(7,425 |
) |
|
|||
Operating income (GAAP basis) |
381,452 |
|
|
|
249,635 |
|
|
|
275,461 |
|
|
|||
Plus: Workforce restructuring expense |
— |
|
|
|
— |
|
|
|
1,452 |
|
|
|||
Plus: M&A due diligence and acquisition-related costs |
— |
|
|
|
4,588 |
|
|
|
9,119 |
|
|
|||
Plus: Advisory fees related to activism defense |
16,611 |
|
|
|
23,087 |
|
|
|
— |
|
|
|||
Less: Spectrum repacking reimbursements and other, net |
(2,898 |
) |
|
|
(7,631 |
) |
|
|
(11,319 |
) |
|
|||
Adjusted operating income (non-GAAP basis) |
395,165 |
|
|
|
269,679 |
|
|
|
274,713 |
|
|
|||
Plus: Depreciation |
31,734 |
|
|
|
33,611 |
|
|
|
29,450 |
|
|
|||
Plus: Amortization of intangible assets |
31,533 |
|
|
|
33,464 |
|
|
|
17,512 |
|
|
|||
Adjusted EBITDA (non-GAAP basis) |
$ |
458,432 |
|
|
|
$ |
336,754 |
|
|
|
$ |
321,675 |
|
|
Corporate - General and administrative expense (non-GAAP basis) |
23,442 |
|
|
|
22,351 |
|
|
|
21,251 |
|
|
|||
Adjusted EBITDA, excluding Corporate (non-GAAP basis) |
$ |
481,874 |
|
|
|
$ |
359,105 |
|
|
|
$ |
342,926 |
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
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 |
||||||||||||||||||
|
2021 |
|
2020 |
|
% Increase (Decrease) |
|
2019 |
|
% Increase (Decrease) |
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Subscription |
$ |
375,081 |
|
|
$ |
323,475 |
|
16.0 |
|
|
|
$ |
236,162 |
|
|
58.8 |
|
|
|
Advertising and Marketing Services |
340,889 |
|
|
229,083 |
|
|
48.8 |
|
|
|
289,569 |
|
|
17.7 |
|
|
|||
Political |
9,581 |
|
|
17,544 |
|
|
(45.4 |
) |
|
|
3,229 |
|
|
*** |
|||||
Other |
7,357 |
|
|
7,525 |
|
|
(2.2 |
) |
|
|
7,972 |
|
|
(7.7 |
) |
|
|||
Total revenues |
$ |
732,908 |
|
|
$ |
577,627 |
|
|
26.9 |
|
|
|
$ |
536,932 |
|
|
36.5 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA |
$ |
227,670 |
|
|
$ |
124,388 |
|
|
83.0 |
|
|
|
$ |
168,522 |
|
|
35.1 |
|
|
Adjusted EBITDA Margin |
31.1 |
% |
|
21.5 |
% |
|
|
|
31.4 |
% |
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Six months ended |
||||||||||||||||||
|
2021 |
|
2020 |
|
% Increase (Decrease) |
|
2019 |
|
% Increase (Decrease) |
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Subscription |
$ |
761,818 |
|
|
$ |
656,277 |
|
|
16.1 |
|
|
|
$ |
477,737 |
|
|
59.5 |
|
|
Advertising and Marketing Services |
663,723 |
|
|
524,236 |
|
|
26.6 |
|
|
|
553,971 |
|
|
19.8 |
|
|
|||
Political |
19,009 |
|
|
64,931 |
|
|
(70.7 |
) |
|
|
5,933 |
|
|
*** |
|||||
Other |
15,409 |
|
|
16,372 |
|
|
(5.9 |
) |
|
|
16,044 |
|
|
(4.0 |
) |
|
|||
Total revenues |
$ |
1,459,959 |
|
|
$ |
1,261,816 |
|
|
15.7 |
|
|
|
$ |
1,053,685 |
|
|
38.6 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA |
$ |
458,432 |
|
|
$ |
336,754 |
|
|
36.1 |
|
|
|
$ |
321,675 |
|
|
42.5 |
|
|
Adjusted EBITDA Margin |
31.4 |
% |
|
26.7 |
% |
|
|
|
30.5 |
% |
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
*** 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 |
|||||||||
|
2021 |
|
2020 |
|
% Increase (Decrease) |
|||||
|
|
|
|
|
|
|||||
Net income attributable to |
$ |
106,627 |
|
|
$ |
19,947 |
|
|
*** |
|
Plus: Provision for income taxes |
30,986 |
|
|
6,607 |
|
|
*** |
|||
Plus: Interest expense |
46,609 |
|
|
51,877 |
|
|
(10.2 |
) |
||
Plus: Depreciation |
15,838 |
|
|
16,711 |
|
|
(5.2 |
) |
||
Plus: Amortization |
15,773 |
|
|
17,248 |
|
|
(8.6 |
) |
||
Plus: Stock-based compensation |
7,411 |
|
|
8,325 |
|
|
(11.0 |
) |
||
Plus: Company stock 401(k) contribution |
4,080 |
|
|
3,428 |
|
|
19.0 |
|
||
Plus: Syndicated programming amortization |
17,975 |
|
|
17,796 |
|
|
1.0 |
|
||
Plus: Advisory fees related to activism defense |
12,012 |
|
|
15,448 |
|
|
(22.2 |
) |
||
Plus: Cash dividend from equity investments for return on capital |
38 |
|
|
3,358 |
|
|
(98.9 |
) |
||
Plus: Cash reimbursements from spectrum repacking |
3,015 |
|
|
2,253 |
|
|
33.8 |
|
||
Less: Other non-operating items, net |
(1,524 |
) |
|
(1,039 |
) |
|
46.7 |
|
||
Plus (Less): Net income (loss) attributable to redeemable noncontrolling interest |
227 |
|
|
(374 |
) |
|
*** |
|||
(Less) Plus: Income tax (payments) receipts |
(117,633 |
) |
|
327 |
|
|
*** |
|||
Plus (Less): Equity loss (income) in unconsolidated investments, net |
2,597 |
|
|
(1,921 |
) |
|
*** |
|||
Less: Spectrum repacking reimbursements and other, net |
(1,475 |
) |
|
(116 |
) |
|
*** |
|||
Less: Syndicated programming payments |
(20,344 |
) |
|
(17,966 |
) |
|
13.2 |
|
||
Less: Pension contributions |
(936 |
) |
|
(941 |
) |
|
(0.5 |
) |
||
Less: Interest payments |
(14,977 |
) |
|
(33,833 |
) |
|
(55.7 |
) |
||
Less: Purchases of property and equipment |
(14,436 |
) |
|
(11,044 |
) |
|
30.7 |
|
||
Free cash flow (non-GAAP basis) |
$ |
91,863 |
|
|
$ |
96,091 |
|
|
(4.4 |
) |
|
|
|
|
|
|
|||||
*** Not meaningful |
|
|
|
|
|
|||||
|
|
|
|
|
|
NON-GAAP FINANCIAL INFORMATION |
|
|||
|
|
|||
Unaudited, in thousands of dollars |
|
|||
|
|
|||
Table No. 5 (continued) |
|
|||
|
Two-year period ended |
|||
|
|
|||
Net income attributable to |
$ |
834,323 |
|
|
Plus: Provision for income taxes |
262,662 |
|
||
Plus: Interest expense |
416,146 |
|
||
Plus: M&A due diligence and acquisition-related costs |
26,225 |
|
||
Plus: Depreciation |
129,689 |
|
||
Plus: Amortization |
131,815 |
|
||
Plus: Stock-based compensation |
47,182 |
|
||
Plus: Company stock 401(k) contribution |
32,167 |
|
||
Plus: Syndicated programming amortization |
139,793 |
|
||
Plus: Workforce restructuring expense |
5,933 |
|
||
Plus: Advisory fees related to activism defense |
45,778 |
|
||
Plus: Cash dividend from equity investments for return on capital |
9,093 |
|
||
Plus: Cash reimbursements from spectrum repacking |
26,153 |
|
||
Plus: Other non-operating items, net |
27,640 |
|
||
Plus: Net income attributable to redeemable noncontrolling interest |
427 |
|
||
Less: Income tax payments, net of refunds |
(230,749 |
) |
||
Less: Equity income in unconsolidated investments, net |
(5,207 |
) |
||
Less: Spectrum repacking reimbursements and other, net |
(6,869 |
) |
||
Less: Syndicated programming payments |
(145,058 |
) |
||
Less: Pension contributions |
(24,158 |
) |
||
Less: Interest payments |
(391,913 |
) |
||
Less: Purchases of property and equipment |
(123,792 |
) |
||
Free cash flow (non-GAAP basis) |
$ |
1,207,280 |
|
|
|
|
|||
Revenue |
$ |
5,643,551 |
|
|
FCF % of Revenue |
21.4 |
% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20210809005346/en/
For media inquiries:
Vice President, Corporate Communications
703-873-6366
abentley@TEGNA.com
For investor inquiries:
Head of Investor Relations
703-873-6764
dkuckelman@TEGNA.com
Source: