UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported):
April 27, 2016
TEGNA INC.
(Exact name of registrant as specified in charter)
Delaware | 1-6961 | 16-0442930 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
7950 Jones Branch Drive McLean, Virginia | 22107-0150 | |
(Address of principal executive offices) | (Zip Code) | |
(703) 854-7000 | ||
(Registrant's telephone number, including area code) | ||
Not Applicable | ||
(Former name or former address, if changed since last report.) | ||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition.
On April 27, 2016, TEGNA Inc. reported its consolidated financial results for the quarter ended March 31, 2016. A copy of this press release is furnished with this report as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
(d) | Exhibits | |
See Index to Exhibits attached hereto. | ||
SIGNATURE
Pursuant to requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
TEGNA Inc. | ||
Date: April 27, 2016 | By: | /s/ Clifton A. McClelland III |
Clifton A. McClelland III | ||
Vice President and Controller | ||
INDEX TO EXHIBITS
Exhibit No. | Description | |
99.1 | TEGNA Inc. News Release dated April 27, 2016 (earnings release reporting TEGNA Inc.'s financial results for the quarter ended March 31, 2016). | |
FOR IMMEDIATE RELEASE | Wednesday, April 27, 2016 |
TEGNA Inc. Reports 2016 First Quarter Results
Highlights for the first quarter include the following:
• | GAAP earnings from continuing operations of $0.42 per diluted share. Non-GAAP earnings from continuing operations of $0.45 per diluted share, an 88 percent year-over-year increase |
• | Total company revenue up 7 percent and over 8 percent on a pro forma basis driven by strong Media and Digital Segment performances |
• | Media Segment revenues 12 percent higher driven by robust growth in retransmission revenue and record first quarter political advertising revenue |
• | Digital Segment revenues up over 4 percent on a pro forma, constant currency basis |
• | Adjusted EBITDA totaled $264 million, a 16 percent increase |
• | Strong free cash flow totaled $111 million |
McLEAN, VA - TEGNA Inc. (NYSE: TGNA) today reported non-GAAP earnings per diluted share from continuing operations of $0.45 for the first quarter of 2016, an increase of 87.5 percent compared to $0.24 for the first quarter of 2015.
Gracia Martore, president and chief executive officer, said, “We are pleased to have kicked off 2016 with strong results across our businesses. Product innovation in the Media Segment contributed to revenue growth in the quarter and we plan to expand on these efforts as well as content innovation throughout the year. Additionally, we achieved a record level of first quarter politically related ad revenue and are very well positioned for the rest of the election cycle. In our Digital Segment, higher dealer penetration and new products at Cars.com contributed meaningfully to company-wide revenue growth of 7 percent.
Martore added, "Continued innovation has made us a more highly-focused, growth-driven media and digital company as we've made it our goal to be at the forefront of the evolving content consumption landscape. We continue to be extraordinarily well positioned for the rest of 2016 and beyond."
FIRST QUARTER
CONTINUING OPERATIONS
The following table summarizes the year-over-year changes in select financial categories for both GAAP and non-GAAP measures.
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Continuing Operations | |||||||||||||||
(Dollars in thousands) | |||||||||||||||
GAAP | Non-GAAP | ||||||||||||||
First Quarter 2016 | First Quarter 2015 | First Quarter 2016 | First Quarter 2015 | ||||||||||||
Operating revenue | $ | 781,732 | $ | 731,491 | $ | 781,732 | $ | 731,491 | |||||||
Operating expense | 579,813 | 549,019 | 569,415 | 555,807 | |||||||||||
Operating income | $ | 201,919 | $ | 182,472 | $ | 212,317 | $ | 175,684 | |||||||
Net income from continuing operations attributable to TEGNA | $ | 92,918 | $ | 69,412 | $ | 99,961 | $ | 55,396 | |||||||
See Table 3 for reconciliations between non-GAAP measures and the most directly comparable GAAP reported numbers. | |||||||||||||||
Total company GAAP revenues were 6.9 percent higher in the first quarter compared to the first quarter of 2015. On a pro forma basis, which adjusts for the impact of a business sold last year, company revenues were up 8.3 percent. Media Segment revenues rose 12.0 percent driven by substantially higher retransmission and political revenue. Digital Segment revenues were 4.1 percent higher on a pro forma, constant currency basis.
First quarter non-GAAP operating expenses rose 2.4 percent as an increase in Media Segment expenses offset a significant decline in corporate expenses and the absence of publishing-related unallocated costs. Corporate expenses totaled $14.6 million compared to $18.9 million in the first quarter of 2015, a decline of 22.6 percent driven by continued efficiency efforts and re-sizing of our support platforms. Corporate expenses include $1.7 million of non-cash rent expense.
Operating income on a non-GAAP basis was 20.9 percent higher compared to the first quarter in 2015. Adjusted EBITDA (a non-GAAP term detailed in Table 4) totaled $264.5 million, an increase of 15.7 percent. The Adjusted EBITDA margin in the first quarter was 33.8 percent, an improvement of 2.6 percentage points compared to the same quarter last year.
Special items in the first quarter of 2016 unfavorably impacted GAAP results by $0.03 per share due primarily to charges related to a voluntary early retirement program. (Refer to Table 3 for a reconciliation of results on a GAAP and non-GAAP basis).
FIRST QUARTER
TEGNA MEDIA
Media Segment revenues were 12.0 percent higher driven by double-digit increases in retransmission revenues and online revenues and bolstered by $15.7 million of political advertising. Politically related advertising in the first quarter was 151 percent over the first quarter of 2012, the last Presidential election year, and 50 percent above 2014. The Super Bowl moved from our 17 NBC stations in 2015 to our 11 CBS stations in 2016 or 6 fewer of our stations in 2016. Excluding the impact of the Super Bowl, core advertising was up slightly.
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The following table summarizes the year-over-year changes in select Media Segment revenue categories.
Media Segment Revenue Detail (Dollars in thousands) | ||||||
First Quarter 2016 | Percentage change from First Quarter 2015 | |||||
Core (Local & National) | $ | 249,021 | (1.6 | %) | ||
Political | 15,744 | 666.7 | % | |||
Retransmission (a) | 146,812 | 33.2 | % | |||
Online | 27,718 | 16.4 | % | |||
Other | 4,534 | (37.5 | %) | |||
Total | $ | 443,829 | 12.0 | % | ||
(a) Reverse compensation to networks is included as part of programming costs. | ||||||
Media Segment non-GAAP operating expenses totaled $264.1 million compared to $229.5 million in the first quarter a year ago. The increase was due to higher programming fees and investments in growth initiatives. Operating income on the same basis was up 7.7 percent and totaled $179.7 million while Adjusted EBITDA was $199.1 million.
Based on current trends, we expect increases in retransmission revenue, political advertising and digital revenue to result in Media Segment revenue growth of 10 percent to 12 percent for the second quarter of 2016, compared to the second quarter of 2015. However, revenue growth will, in part, be dependent on the timing of political spending in the second quarter.
FIRST QUARTER
TEGNA DIGITAL
The following table reconciles Digital Segment revenues reported on a GAAP basis to revenues presented on a pro forma, constant currency basis (a non-GAAP measure).
(Dollars in thousands) | First Quarter | ||||||||
2016 | 2015 | Percentage Change | |||||||
Digital Segment Revenue | |||||||||
Reported (GAAP Measure) | $ | 337,903 | $ | 335,074 | 0.8% | ||||
Adjust for business sold | (9,561 | ) | |||||||
Constant currency impact | 132 | (659 | ) | ||||||
Total adjusted pro-forma revenue | $ | 338,035 | $ | 324,854 | 4.1% | ||||
The revenue increase in the Digital Segment was driven by continued growth at Cars.com offset, in part, by revenue declines at CareerBuilder and the impact of the sale of our PointRoll business. On a pro forma, constant currency basis, Digital Segment revenues were 4.1 percent higher.
Cars.com revenues sold directly by the company were up 9.4 percent. Including the impact of affiliate revenue performance, revenues were 5.9 percent higher. The increase in direct sales was driven primarily by dealer market penetration and new product sales.
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CareerBuilder revenue was 2.3 percent lower in the first quarter, a sequential improvement from a 5.1 percent decline in the fourth quarter of 2015. CareerBuilder results continued to be impacted by the transition to a greater concentration of SaaS products and away from lower margin, transaction-based businesses. On a constant currency basis, CareerBuilder revenue was 1.8 percent lower.
Non-GAAP expenses in the Digital Segment were $290.7 million in the quarter, an increase of 2.5 percent, reflecting primarily accelerating investments in sales force and growth initiatives.
Digital Segment operating income was $47.2 million. Adjusted EBITDA totaled $77.6 million resulting in an Adjusted EBITDA margin of 23.0 percent.
FIRST QUARTER
NON-OPERATING AND CASH FLOW ITEMS
Interest expense totaled $61.7 million in the quarter, a decline of $9.0 million from $70.7 million in the first quarter of 2015 due to lower average debt outstanding and a lower average interest rate.
The decline in reported other non-operating items reflects primarily a gain on the sale of a business in the first quarter of 2015. Other non-operating items on a non-GAAP basis in the first quarter totaled $3.0 million of income compared to an expense of $1.2 million in the first quarter of 2015.
In the first quarter, the company implemented the early adoption of a new accounting standard that changes certain aspects of the accounting for employee share-based payments. As a result, all excess tax benefits and tax deduction shortfalls will now be recognized as income tax expense or benefit in the income statement. The adoption of this accounting standard increased diluted earnings per share by $0.02, reduced the first quarter income tax provision by $4 million and reduced the tax rate by 3 percentage points.
Cash flow from operating activities for the first quarter was $127.1 million. Free cash flow (a non-GAAP measure) totaled $110.6 million for the quarter. Long-term debt outstanding was $4.2 billion and total cash was $79.2 million at the end of the quarter. During the first quarter, we repurchased approximately 3.2 million shares of our outstanding stock for $75.4 million and paid dividends of $30.8 million, returning $106 million to our shareholders.
* * * *
As previously announced, the company will hold an earnings conference call at 10:00 a.m. E.T. today. The call can be accessed via a live webcast through the company's Investors website, investors.TEGNA.com, or listen-only conference lines. U.S. callers should dial 1-866-598-9340 and international callers should dial 1-480-293-0667 at least 10 minutes prior to the scheduled start of the call. The confirmation code for the conference call is 3629345. A replay of the conference call will be available from Wednesday, April 27 at 2 p.m. (ET) to Wednesday, May 11 at 2 p.m. (ET). To access the replay, go to https://jsp.premiereglobal.com/webrsvp/ or Investors.TEGNA.com. The confirmation code for the replay is 3629345. Materials related to the call will be available through the Investor Relations section of the company's website Wednesday morning.
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About TEGNA
TEGNA Inc. (NYSE: TGNA), formerly Gannett Co., Inc., is comprised of a dynamic portfolio of media and digital businesses that provide content that matters and brands that deliver. TEGNA reaches more than 90 million Americans and delivers highly relevant, useful and smart content, when and how people need it, to make the best decisions possible. TEGNA Media includes 46 television stations and is the largest independent station group of major network affiliates in the top 25 markets, reaching approximately one-third of all television households nationwide. TEGNA Digital is comprised of Cars.com, the leading online destination for automotive consumers, CareerBuilder, a global leader in human capital solutions, and other powerful brands such as G/O Digital and Cofactor. For more information, visit www.TEGNA.com.
Certain statements in this press release may be forward looking in nature or “forward looking statements” as defined in the Private Securities Litigation Reform Act of 1995. The forward looking statements contained in this press release are subject to a number of risks, trends and uncertainties that could cause actual performance to differ materially from these forward looking statements. A number of those risks, trends and uncertainties are discussed in the company's SEC reports, including the company's 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.
TEGNA is not responsible for updating the information contained in this press release beyond the published date, or for changes made to this press release by wire services, Internet service providers or other media.
# # #
For investor inquiries, contact: | For media inquiries, contact: | |
Jeffrey Heinz | Steve Kidera | |
Vice President, Investor Relations | Corporate Communications | |
703-854-6917 | 703-854-6077 | |
jheinz@TEGNA.com | skidera@TEGNA.com | |
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME Continuing Operations TEGNA Inc. Unaudited, in thousands (except per share amounts) | |||||||||||
Table No. 1 | |||||||||||
First Quarter 2016 | First Quarter 2015 | % Increase (Decrease) | |||||||||
Operating revenues: | |||||||||||
Media | $ | 443,829 | $ | 396,417 | 12.0 | ||||||
Digital | 337,903 | 335,074 | 0.8 | ||||||||
Total | 781,732 | 731,491 | 6.9 | ||||||||
Operating expenses: | |||||||||||
Cost of revenues and operating expenses, exclusive of depreciation | 248,256 | 226,577 | 9.6 | ||||||||
Selling, general and administrative expenses, exclusive of depreciation | 281,034 | 264,751 | 6.2 | ||||||||
Depreciation | 22,233 | 24,279 | (8.4 | ) | |||||||
Amortization of intangible assets | 28,290 | 28,688 | (1.4 | ) | |||||||
Facility consolidation | — | 4,724 | (100.0 | ) | |||||||
Total | 579,813 | 549,019 | 5.6 | ||||||||
Operating income | 201,919 | 182,472 | 10.7 | ||||||||
Non-operating (expense) income: | |||||||||||
Equity income (loss) in unconsolidated investees, net | 2,933 | (1,249 | ) | **** | |||||||
Interest expense | (61,713 | ) | (70,670 | ) | (12.7 | ) | |||||
Other non-operating items | 2,379 | 24,464 | (90.3 | ) | |||||||
Total | (56,401 | ) | (47,455 | ) | 18.9 | ||||||
Income before income taxes | 145,518 | 135,017 | 7.8 | ||||||||
Provision for income taxes | 42,108 | 51,015 | (17.5 | ) | |||||||
Income from continuing operations | 103,410 | 84,002 | 23.1 | ||||||||
Net income attributable to noncontrolling interests | (10,492 | ) | (14,590 | ) | (28.1 | ) | |||||
Net income from continuing operations attributable to TEGNA Inc. | $ | 92,918 | $ | 69,412 | 33.9 | ||||||
Earnings from continuing operations per share: | |||||||||||
Basic | $ | 0.42 | $ | 0.31 | 35.5 | ||||||
Diluted | $ | 0.42 | $ | 0.30 | 40.0 | ||||||
Weighted average number of common shares outstanding: | |||||||||||
Basic | 219,286 | 227,089 | (3.4 | ) | |||||||
Diluted | 223,254 | 231,931 | (3.7 | ) | |||||||
Dividends declared per share | $ | 0.14 | $ | 0.20 | (30.0 | ) | |||||
BUSINESS SEGMENT INFORMATION TEGNA Inc. Unaudited, in thousands of dollars | |||||||||||
Table No. 2 | |||||||||||
First Quarter 2016 | First Quarter 2015 | % Increase (Decrease) | |||||||||
Operating revenues: | |||||||||||
Media | $ | 443,829 | $ | 396,417 | 12.0 | ||||||
Digital | 337,903 | 335,074 | 0.8 | ||||||||
Total | $ | 781,732 | $ | 731,491 | 6.9 | ||||||
Operating income (net of depreciation, amortization and facility consolidation and asset impairment charges): | |||||||||||
Media | $ | 169,299 | $ | 176,880 | (4.3 | ) | |||||
Digital | 47,219 | 48,181 | (2.0 | ) | |||||||
Corporate | (14,599 | ) | (18,860 | ) | (22.6 | ) | |||||
Unallocated costs (b) | — | (23,729 | ) | (100.0 | ) | ||||||
Total | $ | 201,919 | $ | 182,472 | 10.7 | ||||||
Depreciation, amortization and facility consolidation: | |||||||||||
Media | $ | 19,441 | $ | 21,261 | (8.6 | ) | |||||
Digital | 30,361 | 33,709 | (9.9 | ) | |||||||
Corporate | 721 | 2,721 | (73.5 | ) | |||||||
Total | $ | 50,523 | $ | 57,691 | (12.4 | ) | |||||
Adjusted EBITDA (a): | |||||||||||
Media | $ | 199,138 | $ | 185,780 | 7.2 | ||||||
Digital | 77,580 | 82,739 | (6.2 | ) | |||||||
Corporate | (12,228 | ) | (16,139 | ) | (24.2 | ) | |||||
Unallocated costs (b) | — | (23,729 | ) | (100.0 | ) | ||||||
Total | $ | 264,490 | $ | 228,651 | 15.7 | ||||||
(a) "Adjusted EBITDA" is a non-GAAP measure used by management to measure, analyze and compare the performance of its business segment operations at a more detailed level and in a meaningful and consistent manner. The definition of "Adjusted EBITDA" is provided in the section "Use of Non-GAAP Information" and Table No. 4 provides reconciliations to the most directly comparable financial measure calculated and presented in accordance with GAAP on the company's condensed consolidated statements of income. | |||||||||||
(b) Unallocated expenses represent certain expenses that historically were allocated to the former Publishing Segment but that could not be allocated to discontinued operations because they were not clearly and specifically identifiable to the spun-off businesses, the accounting criteria for reclassification to discontinued operations. | |||||||||||
USE OF NON-GAAP INFORMATION
The company uses non-GAAP financial performance and liquidity measures to supplement the financial information presented on a GAAP basis. These non-GAAP financial measures should not be considered in isolation from or as a substitute for the related GAAP measures, and should be read together with financial information presented on a GAAP basis.
The company discusses in this report non-GAAP financial performance measures that exclude from its reported GAAP results the impact of special items consisting of workforce restructuring charges, facility consolidation charges, certain gains and expenses recognized in operating and non-operating categories and a credit to our income tax provision. The company believes that such expenses, charges and gains are not indicative of normal, ongoing operations and their inclusion in results makes for more difficult comparisons between years.
The company also discusses Adjusted EBITDA, a non-GAAP financial performance measure that it believes offers a useful view of the overall operation of its businesses. Adjusted EBITDA is defined as net income from continuing operations attributable to TEGNA before (1) net income attributable to noncontrolling interests, (2) income taxes, (3) interest expense, (4) equity income (losses), (5) other non-operating items, (6) workforce restructuring, (7) facility consolidation charges, (8) depreciation and (9) amortization. When Adjusted EBITDA is discussed in reference to performance on a consolidated basis, the most directly comparable GAAP financial measure is Net income from continuing operations attributable to TEGNA. Management does not analyze non-operating items such as interest expense and income taxes on a segment level; therefore, the most directly comparable GAAP financial measure to Adjusted EBITDA when performance is discussed on a segment level is Operating income. This earnings report also discusses free cash flow, a non-GAAP liquidity measure. Free cash flow is defined as “net cash flow from operating activities” as reported on the statement of cash flows reduced by “purchase of property, plant and equipment”. The company believes that free cash flow is a useful measure for management and investors to evaluate the level of cash generated by operations and the ability of its operations to fund investments in new and existing businesses, return cash to shareholders under the company’s capital program, repay indebtedness, add to the company’s cash balance, or use in other discretionary activities. Management uses free cash flow to monitor cash available for repayment of indebtedness and in its discussions with the investment community.
Management uses non-GAAP financial performance measures for purposes of evaluating business unit and consolidated company performance. The company, therefore, believes that each of the non-GAAP measures presented provides useful information to investors by allowing them to view our businesses through the eyes of management and the Board of Directors, facilitating comparison of results across historical periods and providing a focus on the underlying ongoing operating performance of its businesses. Tabular reconciliations for the non-GAAP financial measures are contained in Tables 3 through 6 attached to this news release.
NON-GAAP FINANCIAL INFORMATION TEGNA Inc. Unaudited, in thousands of dollars (except per share amounts) | |||||||||||||||||||||||||||
Table No. 3 | |||||||||||||||||||||||||||
Reconciliations of certain line items impacted by special items to the most directly comparable financial measure calculated and presented in accordance with GAAP on the company's condensed consolidated statements of income follow: | |||||||||||||||||||||||||||
GAAP Measure | Special Items | Non-GAAP Measure | |||||||||||||||||||||||||
First Quarter 2016 | Primarily workforce restructuring | Non-operating items | First Quarter 2016 | ||||||||||||||||||||||||
Cost of revenues and operating expenses, exclusive of depreciation | $ | 248,256 | $ | (6,035 | ) | $ | — | $ | 242,221 | ||||||||||||||||||
Selling general and administrative expenses, exclusive of depreciation | 281,034 | (4,363 | ) | — | 276,671 | ||||||||||||||||||||||
Operating expenses | 579,813 | (10,398 | ) | — | 569,415 | ||||||||||||||||||||||
Operating income | 201,919 | 10,398 | — | 212,317 | |||||||||||||||||||||||
Other non-operating items | 2,379 | — | 653 | 3,032 | |||||||||||||||||||||||
Total non-op (expense) income | (56,401 | ) | — | 653 | (55,748 | ) | |||||||||||||||||||||
Income before income taxes | 145,518 | 10,398 | 653 | 156,569 | |||||||||||||||||||||||
Provision for income taxes | 42,108 | 4,008 | — | 46,116 | |||||||||||||||||||||||
Net income from continuing operations attributable to TEGNA | 92,918 | 6,390 | 653 | 99,961 | |||||||||||||||||||||||
Net income from continuing operations per share-diluted | $ | 0.42 | $ | 0.03 | $ | — | $ | 0.45 | |||||||||||||||||||
GAAP Measure | Special Items | Non-GAAP Measure | |||||||||||||||||||||||||
First Quarter 2015 | Workforce restructuring | Facility consolidation | Building sale gain | Non-operating items | Special tax credit | First Quarter 2015 | |||||||||||||||||||||
Cost of revenues and operating expenses, exclusive of depreciation | $ | 226,577 | $ | (1,017 | ) | $ | — | $ | 12,709 | $ | — | $ | — | $ | 238,269 | ||||||||||||
Selling general and administrative expenses, exclusive of depreciation | 264,751 | (180 | ) | — | — | — | — | 264,571 | |||||||||||||||||||
Facility consolidation | 4,724 | — | (4,724 | ) | — | — | — | — | |||||||||||||||||||
Operating expenses | 549,019 | (1,197 | ) | (4,724 | ) | 12,709 | — | — | 555,807 | ||||||||||||||||||
Operating income | 182,472 | 1,197 | 4,724 | (12,709 | ) | — | — | 175,684 | |||||||||||||||||||
Other non-operating items | 24,464 | — | — | — | (25,680 | ) | — | (1,216 | ) | ||||||||||||||||||
Total non-op (expense) income | (47,455 | ) | — | — | — | (25,680 | ) | — | (73,135 | ) | |||||||||||||||||
Income before income taxes | 135,017 | 1,197 | 4,724 | (12,709 | ) | (25,680 | ) | — | 102,549 | ||||||||||||||||||
Provision for income taxes | 51,015 | 445 | 1,757 | (4,726 | ) | (16,318 | ) | 390 | 32,563 | ||||||||||||||||||
Net income from continuing operations attributable to TEGNA | 69,412 | 752 | 2,967 | (7,983 | ) | (9,362 | ) | (390 | ) | 55,396 | |||||||||||||||||
Net income from continuing operations per share - diluted | $ | 0.30 | $ | — | $ | 0.01 | $ | (0.03 | ) | $ | (0.04 | ) | $ | — | $ | 0.24 | |||||||||||
NON-GAAP FINANCIAL INFORMATION TEGNA Inc. Unaudited, in thousands of dollars | |||||||||||||||||||
Table No. 4 | |||||||||||||||||||
Reconciliations of Adjusted EBITDA to the most directly comparable financial measure calculated and presented in accordance with GAAP on the company's condensed consolidated statements of income follow: | |||||||||||||||||||
First Quarter 2016: | |||||||||||||||||||
Media | Digital | Corporate | Consolidated Total | ||||||||||||||||
Net income from continuing operations attributable to TEGNA Inc. (GAAP basis) | $ | 92,918 | |||||||||||||||||
Net income attributable to noncontrolling interests | 10,492 | ||||||||||||||||||
Provision for income taxes | 42,108 | ||||||||||||||||||
Interest expense | 61,713 | ||||||||||||||||||
Equity (income) in unconsolidated investees, net | (2,933 | ) | |||||||||||||||||
Other non-operating (income) items, net | (2,379 | ) | |||||||||||||||||
Operating income (GAAP basis) | $ | 169,299 | $ | 47,219 | $ | (14,599 | ) | $ | 201,919 | ||||||||||
Primarily workforce restructuring | 10,398 | — | — | 10,398 | |||||||||||||||
Adjusted operating income (non-GAAP basis) | 179,697 | 47,219 | (14,599 | ) | 212,317 | ||||||||||||||
Depreciation | 13,748 | 7,764 | 721 | 22,233 | |||||||||||||||
Amortization | 5,693 | 22,597 | — | 28,290 | |||||||||||||||
Non-cash rent | — | — | 1,650 | 1,650 | |||||||||||||||
Adjusted EBITDA (non-GAAP basis) | $ | 199,138 | $ | 77,580 | $ | (12,228 | ) | $ | 264,490 | ||||||||||
First Quarter 2015: | |||||||||||||||||||
Media | Digital | Corporate | Unallocated Costs | Consolidated Total | |||||||||||||||
Net income from continuing operations attributable to TEGNA Inc. (GAAP basis) | $ | 69,412 | |||||||||||||||||
Net income attributable to noncontrolling interests | 14,590 | ||||||||||||||||||
Provision for income taxes | 51,015 | ||||||||||||||||||
Interest expense | 70,670 | ||||||||||||||||||
Equity loss in unconsolidated investees, net | 1,249 | ||||||||||||||||||
Other non-operating items | (24,464 | ) | |||||||||||||||||
Operating income (GAAP basis) | $ | 176,880 | $ | 48,181 | $ | (18,860 | ) | $ | (23,729 | ) | $ | 182,472 | |||||||
Workforce restructuring | 348 | 849 | — | — | 1,197 | ||||||||||||||
Facility consolidation | 2,367 | 2,357 | — | — | 4,724 | ||||||||||||||
Building sale gain | (12,709 | ) | — | — | — | (12,709 | ) | ||||||||||||
Adjusted operating income (non-GAAP basis) | 166,886 | 51,387 | (18,860 | ) | (23,729 | ) | 175,684 | ||||||||||||
Depreciation | 13,296 | 8,262 | 2,721 | — | 24,279 | ||||||||||||||
Amortization | 5,598 | 23,090 | — | — | 28,688 | ||||||||||||||
Adjusted EBITDA (non-GAAP basis) | $ | 185,780 | $ | 82,739 | $ | (16,139 | ) | $ | (23,729 | ) | $ | 228,651 | |||||||
NON-GAAP FINANCIAL INFORMATION TEGNA Inc. Unaudited, in thousands of dollars | |||||
Table No. 5 | |||||
"Free cash flow" is a non-GAAP liquidity measure used in addition to and in conjunction with results presented in accordance with GAAP. Free cash flow should not be relied upon to the exclusion of GAAP financial measures. | |||||
First Quarter 2016 | |||||
Net cash flow from operating activities | $ | 127.1 | |||
Purchase of property, plant and equipment | (16.5 | ) | |||
Free cash flow | $ | 110.6 | |||
TAX RATE CALCULATION TEGNA Inc. Unaudited, in thousands of dollars | |||||||||||||||
Table No. 6 | |||||||||||||||
The calculations of the company's effective tax rate on a GAAP and non-GAAP basis are below: | |||||||||||||||
GAAP | Non-GAAP | ||||||||||||||
First Quarter 2016 | First Quarter 2015 | First Quarter 2016 | First Quarter 2015 | ||||||||||||
Income before taxes (per Table 3) | $ | 145,518 | $ | 135,017 | $ | 156,569 | $ | 102,549 | |||||||
Noncontrolling interests (per Table 1) | (10,492 | ) | (14,590 | ) | (10,492 | ) | (14,590 | ) | |||||||
Income before taxes attributable to TEGNA | $ | 135,026 | $ | 120,427 | $ | 146,077 | $ | 87,959 | |||||||
Provision for income taxes (per Table 3) | $ | 42,108 | $ | 51,015 | $ | 46,116 | $ | 32,563 | |||||||
Effective tax rate | 31.2 | % | 42.4 | % | 31.6 | % | 37.0 | % | |||||||