SEC Filing | TEGNA Inc.

View:

tgna-20220930

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 September 30, 2022

☐ 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 October 31, 2022 was 223,293,327.

INDEX TO TEGNA INC.

September 30, 2022 FORM 10-Q


Item No.		Page
	PART I. FINANCIAL INFORMATION

1.	Financial Statements

	Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021	3

	Consolidated Statements of Income for the Quarters and N ine Months Ended September 30, 2022 and 2021	5

	Consolidated Statements of Comprehensive Income for the Quarters and N ine Months Ended September 30, 2022 and 2021	6

	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021	7

	Consolidated Statements of Equity and Redeemable Noncontrolling Interest for the Quarters and Nine Months Ende d September 30, 2022 and 2021	8

	Notes to Condensed Consolidated Financial Statements	10

2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

3.	Quantitative and Qualitative Disclosures about Market Risk	31

4.	Controls and Procedures	31

	PART II. OTHER INFORMATION

1.	Legal Proceedings	31

1A.	Risk Factors	31

2.	Unregistered Sales of Equity Securities and Use of Proceeds	31

3.	Defaults Upon Senior Securities	31

4.	Mine Safety Disclosures	31

5.	Other Information	31

6.	Exhibits	32

SIGNATURE		33

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

TEGNA Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

In thousands of dollars (Unaudited)


	Sept. 30, 2022		Dec. 31, 2021

ASSETS
Current assets
Cash and cash equivalents	$	376,641	$	56,989
Accounts receivable, net of allowances of $5,154 and $4,371, respectively	589,510		642,280
Other receivables	9,447		15,496
Syndicated programming rights	55,759		53,100
Prepaid expenses and other current assets	39,694		19,724
Total current assets	1,071,051		787,589
Property and equipment
Cost	1,055,616		1,053,851
Less accumulated depreciation	(599,102)		(586,656)
Net property and equipment	456,514		467,195
Intangible and other assets
Goodwill	2,981,587		2,981,587
Indefinite-lived and amortizable intangible assets, less accumulated amortization of $333,157 and $298,593, respectively	2,396,536		2,441,488
Right-of-use assets for operating leases	81,385		87,279
Investments and other assets	137,059		152,508
Total intangible and other assets	5,596,567		5,662,862
Total assets	$	7,124,132	$	6,917,646

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)


	Sept. 30, 2022		Dec. 31, 2021

LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY
Current liabilities
Accounts payable	$	83,813	$	72,996
Accrued liabilities
Compensation	53,736		55,179
Interest	12,441		45,905
Contracts payable for programming rights	131,454		98,534
Other	109,598		91,098

Income taxes payable	3,989		11,420

Total current liabilities	395,031		375,132
Noncurrent liabilities

Deferred income tax liability	555,455		548,374
Long-term debt	3,068,446		3,231,970
Pension liabilities	53,073		58,063
Operating lease liabilities	82,387		88,970
Other noncurrent liabilities	74,393		79,102
Total noncurrent liabilities	3,833,754		4,006,479
Total liabilities	4,228,785		4,381,611

Commitments and contingent liabilities (see Note 9)

Redeemable noncontrolling interest (see Note 1)	17,092		16,129

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		27,941
Retained earnings	7,704,358		7,459,380
Accumulated other comprehensive loss	(110,262)		(97,216)
Less treasury stock at cost, 101,191,494 shares and 103,012,455 shares, respectively	(5,068,201)		(5,194,618)
Total equity	2,878,255		2,519,906
Total liabilities, redeemable noncontrolling interest and equity	$	7,124,132	$	6,917,646

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 Sept. 30,				Nine months ended Sept. 30,
	2022		2021		2022		2021

Revenues	$	803,111	$	756,487	$	2,362,115	$	2,216,446

Operating expenses:
Cost of revenues1	428,891		399,751		1,260,576		1,191,561
Business units - Selling, general and administrative expenses	98,582		100,425		300,136		286,700
Corporate - General and administrative expenses	13,367		11,891		48,299		51,944
Depreciation	15,219		16,792		46,058		48,526
Amortization of intangible assets	14,953		15,774		44,952		47,307
Spectrum repacking reimbursements and other, net	(159)		504		(322)		(2,394)
Total	570,853		545,137		1,699,699		1,623,644
Operating income	232,258		211,350		662,416		592,802

Non-operating (expense) income:
Equity loss in unconsolidated investments, net	(178)		(1,790)		(4,225)		(5,716)
Interest expense	(43,406)		(46,477)		(129,976)		(139,571)
Other non-operating items, net	1,310		2,486		16,764		4,340
Total	(42,274)		(45,781)		(117,437)		(140,947)

Income before income taxes	189,984		165,569		544,979		451,855
Provision for income taxes	43,827		36,870		132,595		103,470
Net Income	146,157		128,699		412,384		348,385
Net income attributable to redeemable noncontrolling interest	(92)		(419)		(516)		(861)
Net income attributable to TEGNA Inc.	$	146,065	$	128,280	$	411,868	$	347,524

Earnings per share:
Basic	$	0.65	$	0.58	$	1.84	$	1.57
Diluted	$	0.65	$	0.58	$	1.83	$	1.56

Weighted average number of common shares outstanding:
Basic shares	223,968		221,805		223,456		221,314
Diluted shares	224,921		222,799		224,221		222,172

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 Sept. 30,				Nine months ended Sept. 30,
	2022		2021		2022		2021

Net income	$	146,157	$	128,699	$	412,384	$	348,385
Other comprehensive income, before tax:
Foreign currency translation adjustments	—		(53)		142		698
Pension and other post retirement benefit items
Recognition of previously deferred post-retirement benefit plan costs	1,031		1,290		3,092		3,869
Pension payment timing related charge	—		946		—		946
Pension and other postretirement benefit items	1,031		2,236		3,092		4,815
Unrealized gain on available-for-sale investment during the period	—		54,354		—		54,354
Realized gain on available-for-sale investment during the period	—		—		(20,800)		—
Other comprehensive income (loss), before tax	1,031		56,537		(17,566)		59,867
Income tax effect related to components of other comprehensive income	(265)		(14,626)		4,520		(15,484)
Other comprehensive income (loss), net of tax	766		41,911		(13,046)		44,383
Comprehensive income	146,923		170,610		399,338		392,768
Comprehensive income attributable to redeemable noncontrolling interest	(92)		(419)		(516)		(861)
Comprehensive income attributable to TEGNA Inc.	$	146,831	$	170,191	$	398,822	$	391,907

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


	Nine months ended Sept. 30,
	2022		2021

Cash flows from operating activities:
Net income	$	412,384	$	348,385
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation and amortization	91,010		95,833
Stock-based compensation	23,625		23,137
Company stock 401(k) contribution	14,343		13,575
Gains on assets, net	(18,308)		—
Equity losses from unconsolidated investments, net	4,225		5,716
Pension contributions including income, net of expense	(1,697)		(14,821)
Change in other assets and liabilities, net of acquisitions:
Decrease (increase) in trade receivables	51,986		(49,687)
Increase (decrease) in accounts payable	10,817		(11,716)
Decrease in interest and taxes payable, net	(23,104)		(76,372)
Increase in deferred revenue	22,181		1,784
Change in other assets and liabilities, net	13,243		6,770
Net cash flow from operating activities	600,705		342,604
Cash flows from investing activities:
Purchase of property and equipment	(35,527)		(39,418)
Reimbursements from spectrum repacking	322		5,030
Payments for acquisitions of businesses	—		(13,335)
Purchases of investments	(4,715)		(1,023)
Proceeds from investments	3,451		3,094
Proceeds from sale of assets	407		296
Net cash flow used for investing activities	(36,062)		(45,356)
Cash flows from financing activities:
Payments under revolving credit facilities, net	(166,000)		(219,000)




Dividends paid	(63,533)		(57,435)

Other, net	(15,458)		(10,567)
Net cash flow used for financing activities	(244,991)		(287,002)
Increase in cash	319,652		10,246
Balance of cash, beginning of period	56,989		40,968
Balance of cash, end of period	$	376,641	$	51,214

Supplemental cash flow information:
Cash paid for income taxes, net of refunds	$	124,206	$	146,600
Cash paid for interest	$	158,293	$	165,824

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 June 30, 2022	$	16,765	$	324,419	$	27,941	$	7,583,436	$	(111,028)	$	(5,083,045)	$	2,741,723
Net income	92		—		—		146,065		—		—		146,065
Other comprehensive income, net of tax	—		—		—		—		766		—		766
Total comprehensive income													146,831
Dividends declared: $0.095 per share	—		—		—		(21,203)		—		—		(21,203)
Company stock 401(k) contribution	—		—		(6,328)		(3,486)		—		14,229		4,415
Stock-based awards activity	—		—		(397)		(219)		—		615		(1)

Stock-based compensation	—		—		6,416		—		—		—		6,416
Adjustment of redeemable noncontrolling interest to redemption value	235		—		—		(235)		—		—		(235)
Other activity	—		—		309		—		—		—		309
Balance at Sept. 30, 2022	$	17,092	$	324,419	$	27,941	$	7,704,358	$	(110,262)	$	(5,068,201)	$	2,878,255

	Redeemable noncontrolling interest		Common stock		Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Treasury stock		Total Equity
Balance at June 30, 2021	$	15,523	$	324,419	$	27,941	$	7,249,257	$	(118,604)	$	(5,224,057)	$	2,258,956
Net income	419		—		—		128,280		—		—		128,280
Other comprehensive income, net of tax	—		—		—		—		41,911		—		41,911
Total comprehensive income													170,191
Dividends declared: $0.095 per share	—		—		—		(21,008)		—		—		(21,008)
Company stock 401(k) contribution	—		—		(6,763)		(5,219)		—		16,173		4,191
Stock-based awards activity	—		—		(545)		—		—		498		(47)
Stock-based compensation	—		—		6,965		—		—		—		6,965

Adjustment of redeemable noncontrolling interest to redemption value	(116)		—		—		116		—		—		116
Other activity	—		—		343		—		—		—		343
Balance at Sept. 30, 2021	$	15,826	$	324,419	$	27,941	$	7,351,426	$	(76,693)	$	(5,207,386)	$	2,419,707


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

Nine months ended:	Redeemable noncontrolling interest		Common stock		Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Treasury stock		Total
Balance at Dec. 31, 2021	$	16,129	$	324,419	$	27,941	$	7,459,380	$	(97,216)	$	(5,194,618)	$	2,519,906
Net income	516		—		—		411,868		—		—		411,868
Other comprehensive income, net of tax	—		—		—		—		(13,046)		—		(13,046)
Total comprehensive income													398,822
Dividends declared: $0.285 per share	—		—		—		(63,533)		—		—		(63,533)
Company stock 401(k) contribution	—		—		(12,655)		(19,571)		—		46,569		14,343
Stock-based awards activity	—		—		(11,967)		(83,339)		—		79,848		(15,458)

Stock-based compensation	—		—		23,625		—		—		—		23,625
Adjustment of redeemable noncontrolling interest to redemption value	447		—		—		(447)		—		—		(447)
Other activity	—		—		997		—		—		—		997
Balance at Sept. 30, 2022	$	17,092	$	324,419	$	27,941	$	7,704,358	$	(110,262)	$	(5,068,201)	$	2,878,255

	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	861		—		—		347,524		—		—		347,524
Other comprehensive income, net of tax	—		—		—		—		44,383		—		44,383
Total comprehensive income													391,907
Dividends declared: $0.26 per share	—		—		—		(57,435)		—		—		(57,435)
Company stock 401(k) contribution	—		—		(24,437)		(14,271)		—		52,283		13,575
Stock-based awards activity	—		—		(85,054)		—		—		74,486		(10,568)
Stock-based compensation	—		—		23,137		—		—		—		23,137

Adjustment of redeemable noncontrolling interest to redemption value	32		—		—		(32)		—		—		(32)
Other activity	—		—		1,028		—		—		—		1,028
Balance at Sept. 30, 2021	$	15,826	$	324,419	$	27,941	$	7,351,426	$	(76,693)	$	(5,207,386)	$	2,419,707

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

TEGNA Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – Basis of presentation, merger agreement and 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, 2021.

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. We use the best information available in developing significant estimates inherent in our financial statements. 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, 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 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.

Merger Agreement: On February 22, 2022, we entered into an Agreement and Plan of Merger (as amended, the Merger Agreement), with Teton Parent Corp., a newly formed Delaware corporation (Parent), Teton Merger Corp., a newly formed Delaware corporation and an indirect wholly owned subsidiary of Parent (Merger Sub), and solely for purposes of certain provisions specified therein, other subsidiaries of Parent, certain affiliates of Standard General L.P., a Delaware limited partnership (Standard General) and CMG Media Corporation, a Delaware corporation (CMG), and certain of its subsidiaries. Parent, Merger Sub, the other subsidiaries of Parent, those affiliates of Standard General, CMG and those subsidiaries of CMG, are collectively, referred to as the “Parent Restructuring Entities.”

The Merger Agreement provides, among other things and subject to the terms and conditions set forth therein, that Merger Sub will be merged with and into TEGNA (the Merger), with TEGNA continuing as the surviving corporation and as an indirect wholly owned subsidiary of Parent. The Merger Agreement provides that each share of common stock, par value $1.00 per share, TEGNA (the Common Stock) outstanding immediately prior to the effective time of the Merger (the Effective Time), other than certain excluded shares, will at the Effective Time automatically be converted into the right to receive (i) $24.00 per share of Common Stock in cash, without interest, plus (ii) additional amounts in cash, without interest, if the Merger does not close within a certain period of time after the date of the Merger Agreement. TEGNA shareholders will receive additional cash consideration in the form of a “ticking fee” of $0.00167 per share per day (or $0.05 per month) if the closing occurs between the 9- and 12-month anniversary of signing, increasing to $0.0025 per share per day (or $0.075 per month) if the closing occurs between the 12- and 13-month anniversary of signing, $0.00333 per share per day (or $0.10 per month) if the closing occurs between the 13- and 14-month anniversary of signing, and $0.00417 per share per day (or $0.125 per month) if the closing occurs on or after the 14-month anniversary of signing.

The Merger Agreement contains certain termination rights and provides that, upon termination of the Merger Agreement under certain specified circumstances, TEGNA will be required to pay Parent a termination fee of $163.0 million, and Parent will be required to pay TEGNA a termination fee of either $136.0 million or $272.0 million.

TEGNA has made customary representations, warranties and covenants in the Merger Agreement. If the Merger is consummated, the Common Stock will be delisted from the New York Stock Exchange and deregistered under the Securities Exchange Act of 1934.

On March 10, 2022, TEGNA, Parent, Merger Sub, and, solely for purposes of certain provisions specified therein, the other Parent Restructuring Entities, entered into an amendment to the Merger Agreement (the Amendment). The Amendment provides, among other things and subject to the terms and conditions set forth therein, that certain regulatory efforts covenants will apply with respect to certain station transfers from Parent or an affiliate of Parent to CMG or an affiliate of CMG that are contemplated to be consummated as of immediately following the Effective Time.

On May 17, 2022 the stockholders of TEGNA voted to adopt the Merger Agreement.

The Merger is subject to the satisfaction of customary closing conditions, including receipt of applicable regulatory approvals, and is still expected to close in the second half of 2022.

Accounting guidance adopted in 2022: We did not adopt any new accounting guidance in 2022 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 (or declines), unemployment and demand for our products and services. 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 September 30, 2022, our allowance for doubtful accounts was $5.2 million as compared to $4.4 million as of December 31, 2021.

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.”

Treasury Stock: We account for treasury stock under the cost method. When treasury stock is re-issued at a price higher than its cost, the difference is recorded as a component of additional paid-in-capital (APIC) in our Condensed Consolidated Balance Sheets. When treasury stock is re-issued at a price lower than its cost, the difference is recorded as a component of APIC to the extent that there are previously recorded gains to offset the losses. If there are no treasury stock gains in APIC, the losses upon re-issuance of treasury stock are recorded as a reduction of retained earnings in our Condensed Consolidated Balance Sheets.

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), 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. 2022, 2020 etc.) and particularly in the second half of those years; and 4) other services, such as production of programming, tower rentals and distribution of our local news content.

Revenue earned by these sources in the third quarter and first nine months of 2022 and 2021 are shown below (amounts in thousands):


	Quarter ended Sept. 30,				Nine months ended Sept. 30,
	2022		2021		2022		2021

Subscription	$	377,368	$	368,672	$	1,158,101	$	1,130,490
Advertising & Marketing Services	320,764		364,234		1,010,490		1,027,957
Political	92,904		15,010		161,727		34,019
Other	12,075		8,571		31,797		23,980
Total revenues	$	803,111	$	756,487	$	2,362,115	$	2,216,446

NOTE 2 – Goodwill and other intangible assets

The following table displays goodwill, indefinite-lived intangible assets, and amortizable intangible assets as of September 30, 2022 and December 31, 2021 (in thousands):


	Sept. 30, 2022				Dec. 31, 2021
	Gross		Accumulated Amortization		Gross		Accumulated Amortization

Goodwill	$	2,981,587	$	—	$	2,981,587	$	—

Indefinite-lived intangibles:
Television and radio station FCC broadcast licenses	2,123,898		—		2,123,898		—
Amortizable intangible assets:
Retransmission agreements	224,827		(178,149)		235,215		(168,439)
Network affiliation agreements	309,503		(115,547)		309,503		(97,195)
Other	71,465		(39,461)		71,465		(32,959)
Total indefinite-lived and amortizable intangible assets	$	2,729,693	$	(333,157)	$	2,740,081	$	(298,593)

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. In the third quarter of 2022, gross retransmission agreement intangible assets and associated accumulated amortization decreased by $10.4 million due to certain retransmission intangible assets reaching the end of their useful lives.

NOTE 3 – Investments and other assets

Our investments and other assets consisted of the following as of September 30, 2022 and December 31, 2021 (in thousands):


	Sept. 30, 2022		Dec. 31, 2021

Cash value insurance	$	48,487	$	53,189
Available-for-sale debt security	—		23,800
Equity method investments	16,973		21,986
Other equity investments	20,158		20,331
Deferred debt issuance costs	3,133		5,805
Long-term contract assets	18,981		—
Other long-term assets	29,327		27,397
Total	$	137,059	$	152,508

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.

Available-for-sale debt security: We previously held a debt security investment issued by MadHive, Inc. (MadHive), that we classified as an available-for-sale investment. Available-for-sale debt securities are required to be carried at their fair value, with unrealized gains and losses (net of income taxes) that are considered temporary in nature recorded in “Accumulated other comprehensive loss” on the Condensed Consolidated Balance Sheet. In the first quarter of 2022, we amended the terms of the debt security, which became effective on January 3, 2022, in parallel with an amendment and extension of our commercial agreements with MadHive. The amendments modified several items, including the conversion rights as well as the maturity date of the note. In exchange for the convertible debt modifications, we received favorable terms in our renewed commercial agreements with MadHive. As a result of these amendments, in the first quarter of 2022 we recognized a previously unrecognized gain of $20.8 million. The gain was recorded in “Other non-operating items, net” within our Consolidated Statement of Income. The debt matured in June 2022 at which time the principal balance of $3.0 million plus accrued interest was paid to

us. The $3.0 million principal balance was classified as “Proceeds from investments” within our Consolidated Statement of Cash Flow”. See Note 9 for additional information regarding our related party transactions with MadHive.

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 2022, we recorded a $2.5 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.

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.

Long-term contract assets: These amounts primarily consist of an asset related to a long-term services agreement for IT security and an asset representing the long-term portion of a contract asset that was recognized as a result of the $20.8 million gain discussed above related to favorable rates obtained on recent commercial agreements with Madhive. This gain resulted in a contract asset which was recognized in January 2022 and is being amortized over two years (through December 2023). See Note 9 for additional details.

NOTE 4 – Long-term debt

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


	Sept. 30, 2022		Dec. 31, 2021

Borrowings under revolving credit agreement expiring August 2024	$	—	$	166,000

Unsecured notes bearing fixed rate interest at 4.75% 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	3,090,000		3,256,000
Debt issuance costs	(28,072)		(31,378)
Unamortized premiums	6,518		7,348


Total long-term debt	$	3,068,446	$	3,231,970

As of September 30, 2022, cash and cash equivalents totaled $376.6 million and we had unused borrowing capacity of $1.49 billion under our $1.51 billion revolving credit facility, which expires in 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 primarily 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 September 30, 2022, were $59.1 million, of which $6.0 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 Sept. 30,				Nine months ended Sept. 30,
	2022		2021		2022		2021

Service cost-benefits earned during the period	$	—	$	1	$	—	$	2
Interest cost on benefit obligation	4,270		3,969		12,811		11,907
Expected return on plan assets	(4,876)		(8,670)		(14,627)		(26,010)
Amortization of prior service (credit) cost	(119)		23		(361)		68
Amortization of actuarial loss	1,150		1,223		3,452		3,669
Pension payment timing related charge	—		946		—		946
Expense (income) from company-sponsored retirement plans	$	425	$	(2,508)	$	1,275	$	(9,418)

Benefits no longer accrue for substantially all TRP and SERP participants as a result of amendments to the plans in 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 nine months ended September 30, 2022 and 2021, we did not make any cash contributions to the TRP. We made benefit payments to participants of the SERP of $2.9 million and $5.3 million during the nine months ended September 30, 2022 and 2021, respectively. Based on actuarial projections and funding levels, we do not expect to make any cash payments to the TRP in 2022 (as none are required based on our current funding levels). We expect to make additional cash payments of $2.5 million to our SERP participants during the remainder of 2022.

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		Available-For-Sale Investment		Total
Quarters ended:
Balance at June 30, 2022	$	(111,560)	$	532	$	—	$	(111,028)

Amounts reclassified from AOCL	766		—		—		766
Total other comprehensive income	766		—		—		766
Balance at Sept. 30, 2022	$	(110,794)	$	532	$	—	$	(110,262)

Balance at June 30, 2021	$	(119,065)	$	461	$	—	$	(118,604)
Other comprehensive loss before reclassifications	—		(39)		40,293		40,254
Amounts reclassified from AOCL	1,657		—		—		1,657
Total other comprehensive income	1,657		(39)		40,293		41,911
Balance at Sept. 30, 2021	$	(117,408)	$	422	$	40,293	$	(76,693)

	Retirement Plans		Foreign Currency Translation		Available-For-Sale Investment		Total
Nine months ended:
Balance at Dec. 31, 2021	$	(113,090)	$	455	$	15,419	$	(97,216)
Other comprehensive income before reclassifications	—		77		—		77
Amounts reclassified from AOCL	2,296		—		(15,419)		(13,123)
Total other comprehensive income (loss)	2,296		77		(15,419)		(13,046)
Balance at Sept. 30, 2022	$	(110,794)	$	532	$