SEC Filing | TEGNA Inc.

View:

tgna-20210630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________

FORM 10-Q

_______________________

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-6961

___________________________

TEGNA INC.

(Exact name of registrant as specified in its charter)

___________________________

Delaware

16-0442930

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

8350 Broad Street, Suite 2000,

Tysons,

Virginia

22102-5151

(Address of principal executive offices)

(Zip Code)

(703)

873-6600

(Registrant’s telephone number, including area code)


Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock	TGNA	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒

The total number of shares of the registrant’s Common Stock, $1 par value, outstanding as of July 31, 2021 was 221,085,466.

INDEX TO TEGNA INC.

June 30, 2021 FORM 10-Q


Item No.		Page
	PART I. FINANCIAL INFORMATION

1.	Financial Statements

	Condensed Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020	3

	Consolidated Statements of Income for the Quarters and Si x Month s Ended June 3 0 , 2021 and 2020	5

	Consolidated Statements of Comprehensive Income for the Quarters and Six Months Ended June 3 0 , 2021 and 2020	6

	Condensed Consolidated Statements of Cash Flows for the Si x Months Ended June 3 0 , 2021 and 2020	7

	Consolidated Statements of Equity and Redeemable Noncontrolling Interest for the Quarters and Six Mon ths Ended June 3 0 , 2021 and 2020	8

	Notes to Condensed Consolidated Financial Statements	10

2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17

3.	Quantitative and Qualitative Disclosures about Market Risk	31

4.	Controls and Procedures	31

	PART II. OTHER INFORMATION

1.	Legal Proceedings	32

1A.	Risk Factors	32

2.	Unregistered Sales of Equity Securities and Use of Proceeds	32

3.	Defaults Upon Senior Securities	32

4.	Mine Safety Disclosures	32

5.	Other Information	32

6.	Exhibits	33

SIGNATURE		34

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

TEGNA Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

In thousands of dollars (Unaudited)


	June 30, 2021		Dec. 31, 2020

ASSETS
Current assets
Cash and cash equivalents	$	57,262	$	40,968
Accounts receivable, net of allowances of $6,845 and $7,035, respectively	588,326		550,755
Other receivables	11,506		14,031
Syndicated programming rights	21,063		47,331
Prepaid expenses and other current assets	20,261		19,509
Total current assets	698,418		672,594
Property and equipment
Cost	1,048,043		1,026,459
Less accumulated depreciation	(582,058)		(556,100)
Net property and equipment	465,985		470,359
Intangible and other assets
Goodwill	2,981,587		2,968,693
Indefinite-lived and amortizable intangible assets, less accumulated amortization of $267,115 and $235,582, respectively	2,472,966		2,503,644
Right-of-use assets for operating leases	92,422		97,190
Investments and other assets	131,717		136,219
Total intangible and other assets	5,678,692		5,705,746
Total assets	$	6,843,095	$	6,848,699

The accompanying notes are an integral part of these condensed consolidated financial statements.

TEGNA Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

In thousands of dollars, except par value and share amounts (Unaudited)


	June 30, 2021		Dec. 31, 2020

LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY
Current liabilities
Accounts payable	$	37,357	$	58,049
Accrued liabilities
Compensation	53,002		46,213
Interest	45,729		47,249
Contracts payable for programming rights	94,512		130,522
Other	81,590		78,219

Income taxes payable	5,622		63,923

Total current liabilities	317,812		424,175
Noncurrent liabilities
Income taxes	9,224		7,303
Deferred income tax liability	534,872		530,240
Long-term debt	3,455,978		3,553,220
Pension liabilities	74,637		85,908
Operating lease liabilities	94,347		99,337
Other noncurrent liabilities	81,746		75,488
Total noncurrent liabilities	4,250,804		4,351,496
Total liabilities	4,568,616		4,775,671

Commitments and contingent liabilities (see Note 9)

Redeemable noncontrolling interest (see Note 1)	15,523		14,933

Shareholders’ equity
Common stock of $1 par value per share, 800,000,000 shares authorized, 324,418,632 shares issued	324,419		324,419
Additional paid-in capital	27,941		113,267
Retained earnings	7,249,257		7,075,640
Accumulated other comprehensive loss	(118,604)		(121,076)
Less treasury stock at cost, 103,438,458 shares and 104,918,360 shares, respectively	(5,224,057)		(5,334,155)
Total equity	2,258,956		2,058,095
Total liabilities, redeemable noncontrolling interest and equity	$	6,843,095	$	6,848,699

The accompanying notes are an integral part of these condensed consolidated financial statements.

TEGNA Inc.

CONSOLIDATED STATEMENTS OF INCOME

Unaudited, in thousands of dollars, except per share amounts


	Quarter ended June 30,				Six months ended June 30,
	2021		2020		2021		2020

Revenues	$	732,908	$	577,627	$	1,459,959	$	1,261,816

Operating expenses:
Cost of revenues1	397,118		355,367		791,810		724,735
Business units - Selling, general and administrative expenses	96,949		85,008		186,275		177,976
Corporate - General and administrative expenses	23,183		28,312		40,053		50,026
Depreciation	15,838		16,711		31,734		33,611
Amortization of intangible assets	15,773		17,248		31,533		33,464
Spectrum repacking reimbursements and other, net	(1,475)		(116)		(2,898)		(7,631)
Total	547,386		502,530		1,078,507		1,012,181
Operating income	185,522		75,097		381,452		249,635

Non-operating income (expense):
Equity (loss) income in unconsolidated investments, net	(2,597)		1,921		(3,926)		10,936
Interest expense	(46,609)		(51,877)		(93,094)		(108,837)
Other non-operating items, net	1,524		1,039		1,854		(18,231)
Total	(47,682)		(48,917)		(95,166)		(116,132)

Income before income taxes	137,840		26,180		286,286		133,503
Provision for income taxes	30,986		6,607		66,600		27,732
Net Income	106,854		19,573		219,686		105,771
Net (income) loss attributable to redeemable noncontrolling interest	(227)		374		(442)		484
Net income attributable to TEGNA Inc.	$	106,627	$	19,947	$	219,244	$	106,255

Net income per share:
Basic	$	0.48	$	0.09	$	0.99	$	0.48
Diluted	$	0.48	$	0.09	$	0.99	$	0.48

Weighted average number of common shares outstanding:
Basic shares	221,522		219,128		221,064		218,703
Diluted shares	222,506		219,426		221,855		219,144

1 Cost of revenues exclude charges for depreciation and amortization expense, which are shown separately above.

The accompanying notes are an integral part of these condensed consolidated financial statements.

TEGNA Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Unaudited, in thousands of dollars


	Quarter ended June 30,				Six months ended June 30,
	2021		2020		2021		2020

Net income	$	106,854	$	19,573	$	219,686	$	105,771
Other comprehensive income, before tax:
Foreign currency translation adjustments	255		(273)		751		130
Recognition of previously deferred post-retirement benefit plan costs	1,353		1,604		2,578		3,102

Other comprehensive income, before tax	1,608		1,331		3,329		3,232
Income tax effect related to components of other comprehensive income	(414)		(335)		(857)		(814)
Other comprehensive income, net of tax	1,194		996		2,472		2,418
Comprehensive income	108,048		20,569		222,158		108,189
Comprehensive (income) loss attributable to redeemable noncontrolling interest	(227)		374		(442)		484
Comprehensive income attributable to TEGNA Inc.	$	107,821	$	20,943	$	221,716	$	108,673

The accompanying notes are an integral part of these condensed consolidated financial statements.

TEGNA Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited, in thousands of dollars


	Six months ended June 30,
	2021		2020

Cash flows from operating activities:
Net income	$	219,686	$	105,771
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation and amortization	63,267		67,075
Stock-based compensation	16,172		7,568
Company stock 401(k) contribution	9,384		8,566

Equity loss (income) from unconsolidated investments, net	3,926		(10,936)
Pension contributions, net of income	(8,781)		(5,885)
Change in other assets and liabilities, net of acquisitions:
(Increase) decrease in trade receivables	(37,207)		91,246
Decrease in accounts payable	(20,692)		(13,821)
(Decrease) increase in interest and taxes payable	(52,483)		32,056
Decrease in deferred revenue	(1,015)		(1,123)
Change in other assets and liabilities, net	4,236		33,025
Net cash flow from operating activities	196,493		313,542
Cash flows from investing activities:
Purchase of property and equipment	(27,621)		(24,308)
Reimbursements from spectrum repacking	4,438		9,768
Payments for acquisitions of businesses and other assets, net of cash acquired	(13,341)		(15,841)
Purchases of investments	(408)		(704)
Proceeds from investments	2,418		5,028
Proceeds from sale of assets and businesses	262		5,000
Net cash flow used for investing activities	(34,252)		(21,057)
Cash flows from financing activities:
Payments under revolving credit facilities, net	(99,000)		(68,000)
Proceeds from borrowings	—		1,000,000
Debt repayments	—		(1,010,000)
Payments for debt issuance costs and early redemption fee	—		(29,948)
Proceeds from sale of minority ownership interest in Premion	—		14,000
Dividends paid	(36,426)		(45,776)

Other, net	(10,521)		(9,095)
Net cash flow used for financing activities	(145,947)		(148,819)
Increase in cash	16,294		143,666
Balance of cash, beginning of period	40,968		29,404
Balance of cash, end of period	$	57,262	$	173,070

Supplemental cash flow information:
Cash paid for income taxes, net of refunds	$	117,600	$	465
Cash paid for interest	$	91,022	$	100,074

The accompanying notes are an integral part of these condensed consolidated financial statements.

TEGNA Inc.

CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NONCONTROLLING INTEREST

Unaudited, in thousands of dollars, except per share data


Quarters Ended:	Redeemable noncontrolling interest		Common stock		Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Treasury stock		Total Equity
Balance at Mar. 31, 2021	$	15,220	$	324,419	$	27,596	$	7,151,716	$	(119,798)	$	(5,244,595)	$	2,139,338
Net income	227		—		—		106,627		—		—		106,627
Other comprehensive income, net of tax	—		—		—		—		1,194		—		1,194
Total comprehensive income													107,821
Dividends declared: $0.165 per share	—		—		—		43		—		—		43
Company stock 401(k) contribution	—		—		(1,420)		(9,053)		—		14,552		4,079
Stock-based awards activity	—		—		(5,990)		—		—		5,986		(4)
Stock-based compensation	—		—		7,410		—		—		—		7,410
Adjustment of redeemable noncontrolling interest to redemption value	76		—		—		(76)		—		—		(76)
Other activity	—		—		345		—		—		—		345
Balance at June 30, 2021	$	15,523	$	324,419	$	27,941	$	7,249,257	$	(118,604)	$	(5,224,057)	$	2,258,956



	Redeemable noncontrolling interest		Common stock		Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Treasury stock		Total
Balance at Mar. 31, 2020	$	14,093	$	324,419	$	152,106	$	6,725,911	$	(141,175)	$	(5,403,005)	$	1,658,256
Net income (loss)	(374)		—		—		19,947		—		—		19,947
Other comprehensive income, net of tax	—		—		—		—		996		—		996
Total comprehensive income													20,943
Dividends declared: $0.07 per share	—		—		—		(15,308)		—		—		(15,308)
Company stock 401(k) contribution	—		—		(17,888)		—		—		21,316		3,428
Stock-based awards activity	—		—		(2,627)		—		—		2,605		(22)
Stock-based compensation	—		—		8,325		—		—		—		8,325

Adjustment of redeemable noncontrolling interest to redemption value	654		—		—		(654)		—		—		(654)
Other activity	—		—		339		—		—		—		339
Balance at June 30, 2020	$	14,373	$	324,419	$	140,255	$	6,729,896	$	(140,179)	$	(5,379,084)	$	1,675,307


TEGNA Inc.
CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NON-CONTROLLING INTEREST
Unaudited, in thousands of dollars, except per share data

Six Months Ended:	Redeemable noncontrolling interest		Common stock		Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Treasury stock		Total
Balance at Dec. 31, 2020	$	14,933	$	324,419	$	113,267	$	7,075,640	$	(121,076)	$	(5,334,155)	$	2,058,095
Net income	442		—		—		219,244		—		—		219,244
Other comprehensive income, net of tax	—		—		—		—		2,472		—		2,472
Total comprehensive income													221,716
Dividends declared: $0.235 per share	—		—		—		(36,426)		—		—		(36,426)
Company stock 401(k) contribution	—		—		(17,674)		(9,053)		—		36,111		9,384
Stock-based awards activity	—		—		(84,509)		—		—		73,987		(10,522)
Stock-based compensation	—		—		16,172		—		—		—		16,172
Adjustment of redeemable noncontrolling interest to redemption value	148		—		—		(148)		—		—		(148)
Other activity	—		—		685		—		—		—		685
Balance at June 30, 2021	$	15,523	$	324,419	$	27,941	$	7,249,257	$	(118,604)	$	(5,224,057)	$	2,258,956

	Redeemable noncontrolling interest		Common stock		Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Treasury stock		Total
Balance at Dec. 31, 2019	$	—	$	324,419	$	247,497	$	6,655,088	$	(142,597)	$	(5,494,030)	$	1,590,377
Net income (loss)	(484)		—		—		106,255		—		—		106,255
Other comprehensive income, net of tax	—		—		—		—		2,418		—		2,418
Total comprehensive income													108,673
Dividends declared: $0.14 per share	—		—		—		(30,590)		—		—		(30,590)
Company stock 401(k) contribution	—		—		(35,719)		—		—		44,285		8,566
Stock-based awards activity	—		—		(79,756)		—		—		70,661		(9,095)
Stock-based compensation	—		—		7,568		—		—		—		7,568
Sale of minority ownership interest in Premion	14,000		—				—		—		—		—
Adjustment of redeemable noncontrolling interest to redemption value	857		—		—		(857)		—		—		(857)
Other activity	—		—		665		—		—		—		665
Balance at June 30, 2020	$	14,373	$	324,419	$	140,255	$	6,729,896	$	(140,179)	$	(5,379,084)	$	1,675,307

The accompanying notes are an integral part of these condensed consolidated financial statements.

TEGNA Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – Accounting policies

Basis of presentation: Our accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial reporting, the instructions for Form 10-Q and Article 10 of the U.S. Securities and Exchange Commission (SEC) Regulation S-X. Accordingly, they do not include all information and footnotes which are normally included in the Form 10-K and annual report to shareholders. In our opinion, the condensed consolidated financial statements reflect all adjustments of a normal recurring nature necessary for a fair statement of the results for the interim periods presented. The condensed consolidated financial statements should be read in conjunction with our (or TEGNA’s) audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020.

The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. The novel coronavirus (COVID-19) pandemic has resulted, and will continue to result, in significant economic disruption and will likely continue to adversely affect our business. The impact of COVID-19 (including newly identified variants) and the extent of its adverse impact on our financial and operating results will be dictated by the length of time that the pandemic continues to affect our advertising customers.

We use the best information available in developing significant estimates inherent in our financial statements, including potential impacts from the COVID-19 pandemic. Actual results could differ from these estimates, and these differences resulting from changes in facts and circumstances could be material. Significant estimates include, but are not limited to, evaluation of goodwill and other intangible assets for impairment, business combinations, fair value measurements, post-retirement benefit plans, income taxes including deferred taxes, and contingencies. The condensed consolidated financial statements include the accounts of subsidiaries we control. We eliminate all intercompany balances, transactions, and profits in consolidation. Investments in entities over which we have significant influence, but do not have control, are accounted for under the equity method. Our share of net earnings and losses from these ventures is included in “Equity (loss) income in unconsolidated investments, net” in the Consolidated Statements of Income.

We operate one operating and reportable segment, which primarily consists of our 64 television stations and two radio stations operating in 51 markets, providing high-quality television programming and digital content. Our reportable segment determination is based on our management and internal reporting structure, the nature of products and services we offer, and the financial information that is evaluated regularly by our chief operating decision maker.

Accounting guidance adopted in 2021: We did not adopt any new accounting guidance in 2021 that had a material impact on our consolidated financial statements or disclosures.

New accounting guidance not yet adopted: There is currently no pending accounting guidance that we expect to have a material impact on our consolidated financial statements or disclosures.

Trade receivables and allowances for doubtful accounts: Trade receivables are recorded at invoiced amounts and generally do not bear interest. The allowance for doubtful accounts reflects our estimate of credit exposure, determined principally on the basis of our collection experience, aging of our receivables and any specific reserves needed for certain customers based on their credit risk. Our allowance also takes into account expected future trends which may impact our customers’ ability to pay, such as economic growth, unemployment and demand for our products and services, including the impacts of the COVID-19 pandemic on these trends. We monitor the credit quality of our customers and their ability to pay through the use of analytics and communication with individual customers. As of June 30, 2021, our allowance for doubtful accounts was $6.8 million as compared to $7.0 million as of December 31, 2020.

Redeemable Noncontrolling interest: Our Premion business operates an advertising network for over-the-top (OTT) streaming and connected television platforms. In March 2020, we sold a minority interest in Premion to an affiliate of Gray Television (Gray) and entered into a 3 year commercial reselling agreement with the affiliate. Gray’s investment allows it to sell its interest to Premion if there is a change in control of TEGNA or if the existing commercial agreement terminates. Since redemption of the minority ownership interest is outside our control, Gray’s equity interest is presented outside of the Equity section on the Condensed Consolidated Balance Sheet in the caption “Redeemable noncontrolling interest.”

Revenue recognition: Revenue is recognized upon the transfer of control of promised services to our customers in an amount that reflects the consideration we expect to receive in exchange for those services. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. Amounts received from customers in advance of providing services to our customers are recorded as deferred revenue.

The primary sources of our revenues are: 1) subscription revenues, reflecting fees paid by satellite, cable, OTT (companies that deliver video content to consumers over the Internet) and telecommunications providers to carry our television signals on

their systems; 2) advertising & marketing services revenues, which include local and national non-political television advertising, digital marketing services (including Premion), and advertising on the stations’ websites, tablet and mobile products, and OTT apps; 3) political advertising revenues, which are driven by even year election cycles at the local and national level (e.g. 2020, 2018) and particularly in the second half of those years; and 4) other services, such as production of programming and advertising material.

Revenue earned by these sources in the second quarter and first six months of 2021 and 2020 are shown below (amounts in thousands):


	Quarter ended June 30,				Six months ended June 30,
	2021		2020		2021		2020

Subscription	$	375,081	$	323,475	$	761,818	$	656,277
Advertising & Marketing Services	340,889		229,083		663,723		524,236
Political	9,581		17,544		19,009		64,931
Other	7,357		7,525		15,409		16,372
Total revenues	$	732,908	$	577,627	$	1,459,959	$	1,261,816

NOTE 2 – Goodwill and other intangible assets

The following table displays goodwill, indefinite-lived intangible assets, and amortizable intangible assets as of June 30, 2021 and December 31, 2020 (in thousands):


	June 30, 2021				Dec. 31, 2020
	Gross		Accumulated Amortization		Gross		Accumulated Amortization

Goodwill	$	2,981,587	$	—	$	2,968,693	$	—

Indefinite-lived intangibles:
Television and radio station FCC broadcast licenses	2,123,898		—		2,123,898		—
Amortizable intangible assets:
Retransmission agreements	235,215		(153,684)		235,215		(138,928)
Network affiliation agreements	309,503		(84,945)		309,503		(72,694)
Other	71,465		(28,486)		70,610		(23,960)
Total indefinite-lived and amortizable intangible assets	$	2,740,081	$	(267,115)	$	2,739,226	$	(235,582)

Our retransmission agreements and network affiliation agreements are amortized on a straight-line basis over their estimated useful lives. Other intangibles primarily include distribution agreements from our multicast networks acquisition, which are also amortized on a straight-line basis over their useful lives.

On January 27, 2021, we acquired Locked On Podcast Network LLC for $13.3 million, which consisted of a base purchase price of $13.8 million and a working capital adjustment of $0.5 million. Locked On produces daily podcasts for every team across the four major professional sports leagues, as well as major college sports teams. In connection with this acquisition, we recorded initial values for goodwill and a tradename of $12.9 million and $0.9 million, respectively. These amounts are based on preliminary valuations, and therefore, these assets are subject to change as additional information is obtained about the facts and circumstances that existed as of the acquisition date. The goodwill is calculated as the excess of the purchase price over the net fair value of the identifiable assets acquired and liabilities assumed, and represents the future economic benefits expected to arise from the acquisition that do not qualify for separate recognition, including assembled workforce, as well as future synergies that we expect to generate. The goodwill recognized is expected to be deductible for tax purposes.

Interim impairment assessment

We review our goodwill and intangible assets for impairment at least annually and also when events or changes in circumstances occur that indicate the fair value may be below its carrying amount. As discussed in our 2020 Form 10-K, after completing our annual impairment test in the fourth quarter of 2020, we had one television station FCC license and one radio station FCC license, with a combined carrying value of $67.2 million and individual impairment headroom of less than 5%. As a

result, these two FCC licenses are deemed to be heightened risk of future impairment. Given the ongoing COVID-19 impacts of AMS revenue and operating cash flows, we conducted an impairment assessment of these two FCC licenses at the end of the second quarter.

In performing these assessments, we analyzed factors which impact the fair value determination of FCC license assets. This included reviewing the trends in U.S. gross domestic product, the stock market, unemployment trends, discount rates and individual station performance. Based on the analysis performed, we concluded that neither of these FCC licenses were impaired as of June 30, 2021. However, a sustained economic decline, including one resulting from the COVID-19 pandemic, could result in future non-cash impairment charges of our FCC licenses, and any related impairment could have a material adverse impact on our results of operations.

NOTE 3 – Investments and other assets

Our investments and other assets consisted of the following as of June 30, 2021 and December 31, 2020 (in thousands):


	June 30, 2021		Dec. 31, 2020

Cash value life insurance	$	53,058	$	52,883
Equity method investments	27,947		32,067
Other equity investments	16,939		20,271
Deferred debt issuance costs	7,607		9,378
Other long-term assets	26,166		21,620
Total	$	131,717	$	136,219

Cash value life insurance: We are the beneficiary of life insurance policies on the lives of certain employees/retirees, which are recorded at their cash surrender value as determined by the insurance carrier. These policies are utilized as a partial funding source for deferred compensation and other non-qualified employee retirement plans. Gains and losses on these investments are included in “Other non-operating items, net” within our Consolidated Statement of Income and were not material for all periods presented.

Other equity investments: Represents investments in non-public businesses that do not have readily determinable pricing, and for which we do not have control or do not exert significant influence. These investments are recorded at cost less impairments, if any, plus or minus changes in observable prices for those investments. In the first quarter of 2021, we recorded a $1.9 million impairment charge, in “Other non-operating items, net” within our Consolidated Statement of Income, due to the decline in the fair value of one of our investments. No gains or losses were recorded on these investments in the first six months of 2020.

Deferred debt issuance costs: These costs consist of amounts paid to lenders related to our revolving credit facility. Debt issuance costs paid for our term debt and unsecured notes are accounted for as a reduction in the debt obligation.

NOTE 4 – Long-term debt

Our long-term debt is summarized below (in thousands):


	June 30, 2021		Dec. 31, 2020

Borrowings under revolving credit agreement expiring August 2024	$	256,000	$	355,000
Unsecured notes bearing fixed rate interest at 5.500% due September 2024	137,000		137,000
Unsecured notes bearing fixed rate interest at 4.750% due March 2026	550,000		550,000
Unsecured notes bearing fixed rate interest at 7.75% due June 2027	200,000		200,000
Unsecured notes bearing fixed rate interest at 7.25% due September 2027	240,000		240,000
Unsecured notes bearing fixed rate interest at 4.625% due March 2028	1,000,000		1,000,000
Unsecured notes bearing fixed rate interest at 5.00% due September 2029	1,100,000		1,100,000
Total principal long-term debt	3,483,000		3,582,000
Debt issuance costs	(34,399)		(36,595)
Unamortized premiums and discounts, net	7,377		7,815


Total long-term debt	$	3,455,978	$	3,553,220

As of June 30, 2021, cash and cash equivalents totaled $57.3 million and we had unused borrowing capacity of $1.23 billion under our $1.51 billion revolving credit facility which expires August 2024. We were in compliance with all covenants, including the leverage ratio (our one financial covenant) contained in our debt agreements and revolving credit facility. We believe, based on our current financial forecasts and trends, that we will remain compliant with all covenants for the foreseeable future.

NOTE 5 – Retirement plans

We have various defined benefit retirement plans. Our principal defined benefit pension plan is the TEGNA Retirement Plan (TRP). The disclosure table below includes the pension expenses of the TRP and the TEGNA Supplemental Retirement Plan (SERP). The total net pension obligations, including both current and non-current liabilities, as of June 30, 2021, were $82.4 million, of which $7.8 million is recorded as a current obligation within accrued liabilities on the Condensed Consolidated Balance Sheet.

Pension costs (income), which primarily include costs for the qualified TRP and the non-qualified SERP, are presented in the following table (in thousands):


	Quarter ended June 30,				Six months ended June 30,
	2021		2020		2021		2020

Service cost-benefits earned during the period	$	1	$	2	$	1	$	4
Interest cost on benefit obligation	3,988		4,879		7,938		9,737
Expected return on plan assets	(8,690)		(7,779)		(17,340)		(15,529)
Amortization of prior service cost	20		87		45		45
Amortization of actuarial loss	1,246		1,481		2,446		3,081

Income from company-sponsored retirement plans	$	(3,435)	$	(1,330)	$	(6,910)	$	(2,662)

Benefits no longer accrue for substantially all TRP and SERP participants as a result of amendments to the plans in the past years, and as such we no longer incur a significant amount of the service cost component of pension expense. All other components of our pension expense presented above are included within the “Other non-operating items, net” line item of the Consolidated Statements of Income.

During the six months ended June 30, 2021 and 2020, we did not make any cash contributions to the TRP. We made benefit payments to participants of the SERP of $1.8 million and $3.2 million during the six months ended June 30, 2021 and 2020, respectively. Based on actuarial projections and funding levels, we do not expect to make any cash payments to the TRP in 2021. We expect to make additional cash payments of $5.1 million to our SERP participants in 2021.

NOTE 6 – Accumulated other comprehensive loss

The following table summarizes the components of, and the changes in, Accumulated Other Comprehensive Loss (AOCL), net of tax (in thousands):


	Retirement Plans		Foreign Currency Translation		Total
Quarters Ended:
Balance at Mar. 31, 2021	$	(120,070)	$	272	$	(119,798)
Other comprehensive income before reclassifications	—		189		189
Amounts reclassified from AOCL	1,005		—		1,005
Total other comprehensive income	1,005		189		1,194
Balance at June 30, 2021	$	(119,065)	$	461	$	(118,604)

Balance at Mar. 31, 2020	$	(141,277)	$	102	$	(141,175)
Other comprehensive loss before reclassifications	—		(205)		(205)
Amounts reclassified from AOCL	1,201		—		1,201
Total other comprehensive income	1,201		(205)		996
Balance at June 30, 2020	$	(140,076)	$	(103)	$	(140,179)

	Retirement Plans		Foreign Currency Translation		Total
Six Months Ended:
Balance at Dec. 31, 2020	$	(120,979)	$	(97)	$	(121,076)
Other comprehensive income before reclassifications	—		558		558
Amounts reclassified from AOCL	1,914		—		1,914
Total other comprehensive income	1,914		558		2,472
Balance at June 30, 2021	$	(119,065)	$	461	$	(118,604)

Balance at Dec. 31, 2019	$	(142,398)	$	(199)	$	(142,597)
Other comprehensive income before reclassifications	—		96		96
Amounts reclassified from AOCL	2,322		—		2,322
Total other comprehensive income	2,322		96		2,418
Balance at June 30, 2020	$	(140,076)	$	(103)	$	(140,179)

Reclassifications from AOCL to the Consolidated Statements of Income are comprised of pension and other post-retirement components. Pension and other post retirement reclassifications are related to the amortization of prior service costs, and amortization of actuarial losses. Amounts reclassified out of AOCL are summarized below (in thousands):


	Quarter ended June 30,				Six months ended June 30,
	2021		2020		2021		2020

Amortization of prior service credit, net	$	(266)	$	(131)	$	(241)	$	(240)
Amortization of actuarial loss	1,619		1,735		2,819		3,342

Total reclassifications, before tax	1,353		1,604		2,578		3,102
Income tax effect	(348)		(403)		(664)		(780)
Total reclassifications, net of tax	$