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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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16-0442930
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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7950 Jones Branch Drive, McLean, Virginia
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22107-0150
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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x
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Item No.
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Page
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PART I. FINANCIAL INFORMATION
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|
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1.
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Financial Statements
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Condensed Consolidated Balance Sheets as of March 31, 2017 and December 31, 2016
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Consolidated Statements of Income for the Three Months Ended March 31, 2017 and 2016
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Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2017 and 2016
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Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2017 and 2016
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Notes to Unaudited Condensed Consolidated Financial Statements
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2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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3.
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Quantitative and Qualitative Disclosures about Market Risk
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4.
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||
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PART II. OTHER INFORMATION
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1.
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Legal Proceedings
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1A.
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Risk Factors
|
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2.
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Unregistered Sales of Equity Securities and Use of Proceeds
|
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3.
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Defaults Upon Senior Securities
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4.
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Mine Safety Disclosures
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5.
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Other Information
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6.
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Exhibits
|
|
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SIGNATURE
|
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Mar. 31, 2017
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Dec. 31, 2016
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||||
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(Unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
79,655
|
|
|
$
|
76,920
|
|
Accounts receivable, net of allowances of $10,313 and $9,837, respectively
|
577,045
|
|
|
595,893
|
|
||
Other receivables
|
22,110
|
|
|
25,953
|
|
||
Prepaid expenses and other current assets
|
73,445
|
|
|
91,922
|
|
||
Total current assets
|
752,255
|
|
|
790,688
|
|
||
Property and equipment
|
|
|
|
||||
Cost
|
1,029,510
|
|
|
1,014,742
|
|
||
Less accumulated depreciation
|
(587,381
|
)
|
|
(564,726
|
)
|
||
Net property and equipment
|
442,129
|
|
|
450,016
|
|
||
Intangible and other assets
|
|
|
|
||||
Goodwill
|
4,070,039
|
|
|
4,067,529
|
|
||
Indefinite-lived and amortizable intangible assets, less accumulated amortization
|
2,984,648
|
|
|
3,013,432
|
|
||
Investments and other assets
|
215,940
|
|
|
221,060
|
|
||
Total intangible and other assets
|
7,270,627
|
|
|
7,302,021
|
|
||
Total assets
|
$
|
8,465,011
|
|
|
$
|
8,542,725
|
|
|
Mar. 31, 2017
|
|
Dec. 31, 2016
|
||||
|
(Unaudited)
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
75,555
|
|
|
$
|
120,911
|
|
Accrued liabilities
|
350,428
|
|
|
340,500
|
|
||
Dividends payable
|
30,246
|
|
|
30,178
|
|
||
Income taxes
|
36,684
|
|
|
13,478
|
|
||
Deferred revenue
|
115,119
|
|
|
113,468
|
|
||
Current portion of long-term debt
|
646
|
|
|
646
|
|
||
Total current liabilities
|
608,678
|
|
|
619,181
|
|
||
Noncurrent liabilities
|
|
|
|
||||
Income taxes
|
21,739
|
|
|
22,644
|
|
||
Deferred income taxes
|
933,962
|
|
|
929,184
|
|
||
Long-term debt
|
3,965,842
|
|
|
4,042,749
|
|
||
Pension liabilities
|
183,790
|
|
|
187,290
|
|
||
Other noncurrent liabilities
|
127,597
|
|
|
142,407
|
|
||
Total noncurrent liabilities
|
5,232,930
|
|
|
5,324,274
|
|
||
Total liabilities
|
5,841,608
|
|
|
5,943,455
|
|
||
|
|
|
|
||||
Redeemable noncontrolling interests
|
48,581
|
|
|
46,265
|
|
||
|
|
|
|
||||
Equity
|
|
|
|
||||
TEGNA Inc. 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
|
405,108
|
|
|
473,742
|
|
||
Retained earnings
|
7,412,204
|
|
|
7,384,556
|
|
||
Accumulated other comprehensive loss
|
(161,391
|
)
|
|
(161,573
|
)
|
||
Less treasury stock at cost, 109,629,035 shares and 109,930,832 shares, respectively
|
(5,691,203
|
)
|
|
(5,749,726
|
)
|
||
Total TEGNA Inc. shareholders’ equity
|
2,289,137
|
|
|
2,271,418
|
|
||
Noncontrolling interests
|
285,685
|
|
|
281,587
|
|
||
Total equity
|
2,574,822
|
|
|
2,553,005
|
|
||
Total liabilities, redeemable noncontrolling interests and equity
|
$
|
8,465,011
|
|
|
$
|
8,542,725
|
|
|
Three months ended Mar. 31,
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Operating revenues:
|
|
|
|
||||
Media
|
$
|
446,310
|
|
|
$
|
443,829
|
|
Digital
|
332,161
|
|
|
337,903
|
|
||
Total
|
778,471
|
|
|
781,732
|
|
||
|
|
|
|
||||
Operating expenses:
|
|
|
|
||||
Cost of revenues, exclusive of depreciation
|
295,809
|
|
|
247,531
|
|
||
Selling, general and administrative expenses, exclusive of depreciation
|
274,998
|
|
|
280,309
|
|
||
Depreciation
|
23,087
|
|
|
22,233
|
|
||
Amortization of intangible assets
|
29,018
|
|
|
28,290
|
|
||
Asset impairment and facility consolidation charges
|
2,183
|
|
|
—
|
|
||
Total
|
625,095
|
|
|
578,363
|
|
||
Operating income
|
153,376
|
|
|
203,369
|
|
||
|
|
|
|
||||
Non-operating (expense) income:
|
|
|
|
||||
Equity (loss) income in unconsolidated investments, net (see Note 4)
|
(1,469
|
)
|
|
2,933
|
|
||
Interest expense
|
(55,416
|
)
|
|
(61,713
|
)
|
||
Other non-operating items
|
(4,009
|
)
|
|
929
|
|
||
Total
|
(60,894
|
)
|
|
(57,851
|
)
|
||
|
|
|
|
||||
Income before income taxes
|
92,482
|
|
|
145,518
|
|
||
Provision for income taxes
|
28,583
|
|
|
42,108
|
|
||
Income from continuing operations
|
63,899
|
|
|
103,410
|
|
||
Loss from discontinued operations, net of tax
|
—
|
|
|
(7,474
|
)
|
||
Net income
|
63,899
|
|
|
95,936
|
|
||
Net income attributable to noncontrolling interests
|
(6,185
|
)
|
|
(10,492
|
)
|
||
Net income attributable to TEGNA Inc.
|
$
|
57,714
|
|
|
$
|
85,444
|
|
|
|
|
|
||||
Earnings from continuing operations per share - basic
|
$
|
0.27
|
|
|
$
|
0.42
|
|
Loss from discontinued operations per share - basic
|
—
|
|
|
(0.03
|
)
|
||
Net income per share – basic
|
$
|
0.27
|
|
|
$
|
0.39
|
|
|
|
|
|
||||
Earnings from continuing operations per share - diluted
|
$
|
0.27
|
|
|
$
|
0.42
|
|
Loss from discontinued operations per share - diluted
|
—
|
|
|
(0.04
|
)
|
||
Net income per share – diluted
|
$
|
0.27
|
|
|
$
|
0.38
|
|
|
|
|
|
||||
Weighted average number of common shares outstanding:
|
|
|
|
||||
Basic shares
|
215,305
|
|
|
219,286
|
|
||
Diluted shares
|
217,569
|
|
|
223,254
|
|
||
|
|
|
|
||||
Dividends declared per share
|
$
|
0.14
|
|
|
$
|
0.14
|
|
|
Three months ended Mar. 31,
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Net income
|
$
|
63,899
|
|
|
$
|
95,936
|
|
Redeemable noncontrolling interests (income not available to shareholders)
|
(1,815
|
)
|
|
(925
|
)
|
||
Other comprehensive income (loss), before tax:
|
|
|
|
||||
Foreign currency translation adjustments
|
2,262
|
|
|
1,201
|
|
||
Recognition of previously deferred post-retirement benefit plan costs
|
2,075
|
|
|
1,900
|
|
||
Unrealized losses on available for sale investment during the period
|
(2,293
|
)
|
|
(1,983
|
)
|
||
Other comprehensive income, before tax
|
2,044
|
|
|
1,118
|
|
||
Income tax effect related to components of other comprehensive income
|
(797
|
)
|
|
(738
|
)
|
||
Other comprehensive income, net of tax
|
1,247
|
|
|
380
|
|
||
Comprehensive income
|
63,331
|
|
|
95,391
|
|
||
Comprehensive income attributable to noncontrolling interests, net of tax
|
(5,435
|
)
|
|
(10,133
|
)
|
||
Comprehensive income attributable to TEGNA Inc.
|
$
|
57,896
|
|
|
$
|
85,258
|
|
|
Three months ended Mar. 31,
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
63,899
|
|
|
$
|
95,936
|
|
Adjustments to reconcile net income to net cash flow from operating activities:
|
|
|
|
||||
Depreciation and amortization
|
52,105
|
|
|
50,635
|
|
||
Stock-based compensation
|
5,103
|
|
|
4,757
|
|
||
Other losses on sales of assets and impairment charges
|
885
|
|
|
5,135
|
|
||
Equity loss (income) in unconsolidated investments, net
|
1,469
|
|
|
(2,933
|
)
|
||
Pension expense, net of contributions
|
(1,350
|
)
|
|
(752
|
)
|
||
Change in other assets and liabilities, net
|
18,777
|
|
|
(25,720
|
)
|
||
Net cash flow from operating activities
|
140,888
|
|
|
127,058
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchase of property and equipment
|
(17,959
|
)
|
|
(16,449
|
)
|
||
Payments for acquisitions of businesses, net of cash acquired
|
—
|
|
|
(53,059
|
)
|
||
Payments for investments
|
(775
|
)
|
|
(10,047
|
)
|
||
Proceeds from investments
|
502
|
|
|
4,617
|
|
||
Proceeds from sale of assets
|
4,535
|
|
|
—
|
|
||
Net cash flow used for investing activities
|
(13,697
|
)
|
|
(74,938
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
(Payments) proceeds of borrowings under revolving credit facilities, net
|
(46,000
|
)
|
|
42,000
|
|
||
Debt repayments
|
(33,062
|
)
|
|
(18,062
|
)
|
||
Dividends paid
|
(29,998
|
)
|
|
(30,853
|
)
|
||
Repurchases of common stock
|
(7,252
|
)
|
|
(75,411
|
)
|
||
Other, net
|
(8,144
|
)
|
|
(19,788
|
)
|
||
Net cash flow used for financing activities
|
(124,456
|
)
|
|
(102,114
|
)
|
||
Increase (decrease) in cash and cash equivalents
|
2,735
|
|
|
(49,994
|
)
|
||
Balance of cash and cash equivalents at beginning of period
|
76,920
|
|
|
129,200
|
|
||
Balance of cash and cash equivalents at end of period
|
$
|
79,655
|
|
|
$
|
79,206
|
|
|
|
|
|
||||
Supplemental cash flow information:
|
|
|
|
||||
Cash paid for income taxes, net of refunds
|
$
|
6,518
|
|
|
$
|
27,430
|
|
Cash paid for interest
|
$
|
34,185
|
|
|
$
|
35,261
|
|
|
Three Months Ended Mar. 31, 2017
|
|
Three Months Ended Mar. 31, 2016
|
||||||||||||||||||||
|
Previous Accounting Method
|
|
As Currently Reported
|
|
Effect of Accounting Change
|
|
Previously Reported
|
|
As Currently Reported
|
|
Effect of Accounting Change
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of revenues, exclusive of depreciation
|
$
|
296,509
|
|
|
$
|
295,809
|
|
|
$
|
(700
|
)
|
|
$
|
248,256
|
|
|
$
|
247,531
|
|
|
$
|
(725
|
)
|
Selling, general and administrative expenses, exclusive of depreciation
|
275,698
|
|
|
274,998
|
|
|
(700
|
)
|
|
281,034
|
|
|
280,309
|
|
|
(725
|
)
|
||||||
Operating income
|
151,976
|
|
|
153,376
|
|
|
1,400
|
|
|
201,919
|
|
|
203,369
|
|
|
1,450
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other non-operating items
|
(2,609
|
)
|
|
(4,009
|
)
|
|
(1,400
|
)
|
|
2,379
|
|
|
929
|
|
|
(1,450
|
)
|
||||||
Total non-operating (expense) income
|
$
|
(59,494
|
)
|
|
$
|
(60,894
|
)
|
|
$
|
(1,400
|
)
|
|
$
|
(56,401
|
)
|
|
$
|
(57,851
|
)
|
|
$
|
(1,450
|
)
|
|
Mar. 31, 2017
|
|
Dec. 31, 2016
|
||||||||||||
|
Gross
|
|
Accumulated Amortization
|
|
Gross
|
|
Accumulated Amortization
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
$
|
4,070,039
|
|
|
$
|
—
|
|
|
$
|
4,067,529
|
|
|
$
|
—
|
|
Indefinite-lived intangibles:
|
|
|
|
|
|
|
|
||||||||
Television station FCC licenses
|
1,191,950
|
|
|
—
|
|
|
1,191,950
|
|
|
—
|
|
||||
Trade names
|
925,171
|
|
|
—
|
|
|
925,171
|
|
|
—
|
|
||||
Amortizable intangible assets:
|
|
|
|
|
|
|
|
||||||||
Customer relationships
|
929,977
|
|
|
(229,544
|
)
|
|
929,852
|
|
|
(210,691
|
)
|
||||
Other
|
290,984
|
|
|
(123,890
|
)
|
|
290,875
|
|
|
(113,725
|
)
|
|
Media
|
|
Digital
|
|
Total
|
||||||
|
|
|
|
|
|
||||||
Balance at Dec. 31, 2016:
|
|
|
|
|
|
||||||
Goodwill
|
$
|
2,579,418
|
|
|
$
|
1,678,300
|
|
|
$
|
4,257,718
|
|
Accumulated impairment losses
|
—
|
|
|
(190,189
|
)
|
|
(190,189
|
)
|
|||
Net balance at Dec. 31, 2016
|
2,579,418
|
|
|
1,488,111
|
|
|
4,067,529
|
|
|||
Activity during the period:
|
|
|
|
|
|
||||||
Acquisitions
|
—
|
|
|
—
|
|
|
—
|
|
|||
Impairment
|
—
|
|
|
—
|
|
|
—
|
|
|||
Foreign currency exchange rate changes
|
—
|
|
|
2,510
|
|
|
2,510
|
|
|||
Total
|
—
|
|
|
2,510
|
|
|
2,510
|
|
|||
Balance at Mar. 31, 2017:
|
|
|
|
|
|
||||||
Goodwill
|
2,579,418
|
|
|
1,680,810
|
|
|
4,260,228
|
|
|||
Accumulated impairment losses
|
—
|
|
|
(190,189
|
)
|
|
(190,189
|
)
|
|||
Net balance at Mar. 31, 2017
|
$
|
2,579,418
|
|
|
$
|
1,490,621
|
|
|
$
|
4,070,039
|
|
|
Mar. 31, 2017
|
|
Dec. 31, 2016
|
||||
|
|
|
|
||||
Cash value life insurance
|
$
|
63,889
|
|
|
$
|
64,134
|
|
Deferred compensation investments
|
52,174
|
|
|
52,273
|
|
||
Equity method investments
|
19,111
|
|
|
19,970
|
|
||
Available for sale investment
|
14,451
|
|
|
16,744
|
|
||
Deferred debt issuance cost
|
8,917
|
|
|
9,856
|
|
||
Other long term assets
|
57,398
|
|
|
58,083
|
|
||
Total
|
$
|
215,940
|
|
|
$
|
221,060
|
|
|
Mar. 31, 2017
|
|
Dec. 31, 2016
|
||||
|
|
|
|
||||
Unsecured floating rate term loan due quarterly through August 2018
|
$
|
44,200
|
|
|
$
|
52,100
|
|
VIE unsecured floating rate term loans due quarterly through December 2018
|
1,131
|
|
|
1,292
|
|
||
Unsecured floating rate term loan due quarterly through June 2020
|
130,000
|
|
|
140,000
|
|
||
Unsecured floating rate term loan due quarterly through September 2020
|
270,000
|
|
|
285,000
|
|
||
Borrowings under revolving credit agreement expiring June 2020
|
589,000
|
|
|
635,000
|
|
||
Unsecured notes bearing fixed rate interest at 5.125% due October 2019
|
600,000
|
|
|
600,000
|
|
||
Unsecured notes bearing fixed rate interest at 5.125% due July 2020
|
600,000
|
|
|
600,000
|
|
||
Unsecured notes bearing fixed rate interest at 4.875% due September 2021
|
350,000
|
|
|
350,000
|
|
||
Unsecured notes bearing fixed rate interest at 6.375% due October 2023
|
650,000
|
|
|
650,000
|
|
||
Unsecured notes bearing fixed rate interest at 5.50% due September 2024
|
325,000
|
|
|
325,000
|
|
||
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
|
|
||
Total principal long-term debt
|
3,999,331
|
|
|
4,078,392
|
|
||
Debt issuance costs
|
(26,260
|
)
|
|
(27,615
|
)
|
||
Other (fair market value adjustments and discounts)
|
(6,583
|
)
|
|
(7,382
|
)
|
||
Total long-term debt
|
3,966,488
|
|
|
4,043,395
|
|
||
Less current portion of long-term debt maturities of VIE loans
|
646
|
|
|
646
|
|
||
Long-term debt, net of current portion
|
$
|
3,965,842
|
|
|
$
|
4,042,749
|
|
|
Three months ended Mar. 31,
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Service cost-benefits earned during the period
|
$
|
125
|
|
|
$
|
250
|
|
Interest cost on benefit obligation
|
5,925
|
|
|
6,350
|
|
||
Expected return on plan assets
|
(6,650
|
)
|
|
(6,750
|
)
|
||
Amortization of prior service cost
|
150
|
|
|
150
|
|
||
Amortization of actuarial loss
|
1,975
|
|
|
1,700
|
|
||
Expense for company-sponsored retirement plans
|
$
|
1,525
|
|
|
$
|
1,700
|
|
|
TEGNA Inc. Shareholders’ Equity
|
|
Noncontrolling Interests
|
|
Total Equity
|
||||||
|
|
|
|
|
|
||||||
Balance at Dec. 31, 2016
|
$
|
2,271,418
|
|
|
$
|
281,587
|
|
|
$
|
2,553,005
|
|
Comprehensive income:
|
|
|
|
|
|
||||||
Net income
|
57,714
|
|
|
6,185
|
|
|
63,899
|
|
|||
Redeemable noncontrolling interests (income not available to shareholders)
|
—
|
|
|
(1,815
|
)
|
|
(1,815
|
)
|
|||
Other comprehensive income
|
182
|
|
|
1,065
|
|
|
1,247
|
|
|||
Total comprehensive income
|
57,896
|
|
|
5,435
|
|
|
63,331
|
|
|||
Dividends declared
|
(30,065
|
)
|
|
—
|
|
|
(30,065
|
)
|
|||
Stock-based compensation
|
5,103
|
|
|
—
|
|
|
5,103
|
|
|||
Treasury shares acquired
|
(7,252
|
)
|
|
—
|
|
|
(7,252
|
)
|
|||
Other activity, including shares withheld for employee taxes
|
(7,963
|
)
|
|
(1,337
|
)
|
|
(9,300
|
)
|
|||
Balance at Mar. 31, 2017
|
$
|
2,289,137
|
|
|
$
|
285,685
|
|
|
$
|
2,574,822
|
|
|
|
|
|
|
|
||||||
Balance at Dec. 31, 2015
|
$
|
2,191,971
|
|
|
$
|
264,773
|
|
|
$
|
2,456,744
|
|
Comprehensive income:
|
|
|
|
|
|
||||||
Net income
|
85,444
|
|
|
10,492
|
|
|
95,936
|
|
|||
Redeemable noncontrolling interests (income not available to shareholders)
|
—
|
|
|
(925
|
)
|
|
(925
|
)
|
|||
Other comprehensive income (loss)
|
(186
|
)
|
|
566
|
|
|
380
|
|
|||
Total comprehensive income
|
85,258
|
|
|
10,133
|
|
|
95,391
|
|
|||
Dividends declared
|
(30,524
|
)
|
|
—
|
|
|
(30,524
|
)
|
|||
Stock-based compensation
|
4,757
|
|
|
—
|
|
|
4,757
|
|
|||
Treasury shares acquired
|
(75,411
|
)
|
|
—
|
|
|
(75,411
|
)
|
|||
Other activity, including shares withheld for employee taxes and tax windfall benefits
|
(18,470
|
)
|
|
(836
|
)
|
|
(19,306
|
)
|
|||
Balance at Mar. 31, 2016
|
$
|
2,157,581
|
|
|
$
|
274,070
|
|
|
$
|
2,431,651
|
|
|
Retirement Plans
|
|
Foreign Currency Translation
|
|
Other
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Quarters Ended:
|
|
|
|
|
|
|
|
||||||||
Balance at Dec. 31, 2016
|
$
|
(127,341
|
)
|
|
$
|
(28,560
|
)
|
|
$
|
(5,672
|
)
|
|
$
|
(161,573
|
)
|
Other comprehensive loss before reclassifications
|
—
|
|
|
1,197
|
|
|
(2,293
|
)
|
|
(1,096
|
)
|
||||
Amounts reclassified from AOCL
|
1,278
|
|
|
—
|
|
|
—
|
|
|
1,278
|
|
||||
Other comprehensive income (loss)
|
1,278
|
|
|
1,197
|
|
|
(2,293
|
)
|
|
182
|
|
||||
Balance at Mar. 31, 2017
|
$
|
(126,063
|
)
|
|
$
|
(27,363
|
)
|
|
$
|
(7,965
|
)
|
|
$
|
(161,391
|
)
|
|
|
|
|
|
|
|
|
||||||||
Balance at Dec. 31, 2015
|
$
|
(116,496
|
)
|
|
$
|
(20,129
|
)
|
|
$
|
5,674
|
|
|
$
|
(130,951
|
)
|
Other comprehensive income (loss) before reclassifications
|
—
|
|
|
635
|
|
|
(1,983
|
)
|
|
(1,348
|
)
|
||||
Amounts reclassified from AOCL
|
1,162
|
|
|
—
|
|
|
—
|
|
|
1,162
|
|
||||
Other comprehensive income (loss)
|
1,162
|
|
|
635
|
|
|
(1,983
|
)
|
|
(186
|
)
|
||||
Balance at Mar. 31, 2016
|
$
|
(115,334
|
)
|
|
$
|
(19,494
|
)
|
|
$
|
3,691
|
|
|
$
|
(131,137
|
)
|
|
Three months ended Mar. 31,
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Amortization of prior service cost
|
$
|
—
|
|
|
$
|
50
|
|
Amortization of actuarial loss
|
2,075
|
|
|
1,850
|
|
||
Total reclassifications, before tax
|
2,075
|
|
|
1,900
|
|
||
Income tax effect
|
(797
|
)
|
|
(738
|
)
|
||
Total reclassifications, net of tax
|
$
|
1,278
|
|
|
$
|
1,162
|
|
|
Three months ended Mar. 31,
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Income from continuing operations attributable to TEGNA Inc.
|
$
|
57,714
|
|
|
$
|
92,918
|
|
Loss from discontinued operations, net of tax
|
—
|
|
|
(7,474
|
)
|
||
Net income attributable to TEGNA Inc.
|
$
|
57,714
|
|
|
$
|
85,444
|
|
|
|
|
|
||||
Weighted average number of common shares outstanding - basic
|
215,305
|
|
|
219,286
|
|
||
Effect of dilutive securities:
|
|
|
|
||||
Restricted stock units
|
992
|
|
|
1,295
|
|
||
Performance share units
|
541
|
|
|
1,673
|
|
||
Stock options
|
731
|
|
|
1,000
|
|
||
Weighted average number of common shares outstanding - diluted
|
217,569
|
|
|
223,254
|
|
||
|
|
|
|
||||
Earnings from continuing operations per share - basic
|
$
|
0.27
|
|
|
$
|
0.42
|
|
Loss from discontinued operations per share - basic
|
—
|
|
|
(0.03
|
)
|
||
Net income per share - basic
|
$
|
0.27
|
|
|
$
|
0.39
|
|
|
|
|
|
||||
Earnings from continuing operations per share - diluted
|
$
|
0.27
|
|
|
$
|
0.42
|
|
Loss from discontinued operations per share - diluted
|
—
|
|
|
(0.04
|
)
|
||
Net income per share - diluted
|
$
|
0.27
|
|
|
$
|
0.38
|
|
|
Fair Value Measurements as of Mar. 31, 2017
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Deferred compensation investments
|
$
|
28,560
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
28,560
|
|
Available for sale investment
|
14,451
|
|
|
—
|
|
|
—
|
|
|
14,451
|
|
||||
Total
|
$
|
43,011
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
43,011
|
|
|
|
|
|
|
|
|
|
||||||||
Deferred compensation investments valued using net asset value as a practical expedient:
|
|
|
|||||||||||||
Interest in registered investment companies
|
|
|
|
|
|
|
$
|
10,016
|
|
||||||
Fixed income fund
|
|
|
|
|
|
|
13,598
|
|
|||||||
Total investments at fair value
|
|
|
|
|
|
|
$
|
66,625
|
|
|
Fair Value Measurements as of Dec. 31, 2016
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Deferred compensation investments
|
$
|
28,558
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
28,558
|
|
Available for sale investment
|
16,744
|
|
|
—
|
|
|
—
|
|
|
16,744
|
|
||||
Total
|
$
|
45,302
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
45,302
|
|
|
|
|
|
|
|
|
|
||||||||
Deferred compensation investments valued using net asset value as a practical expedient:
|
|
|
|||||||||||||
Interest in registered investment companies
|
|
|
|
|
|
|
$
|
10,140
|
|
||||||
Fixed income fund
|
|
|
|
|
|
|
13,575
|
|
|||||||
Total investments at fair value
|
|
|
|
|
|
|
$
|
69,017
|
|
•
|
TEGNA Media (Media Segment)
- includes 46 television stations (including one station under service agreements) in 38 markets. We are the largest independent station group of major network affiliates in the top 25 markets, covering approximately one-third of all television households nationwide (more than 36 million households per Nielsen). We represent the #1 NBC affiliate group, #2 CBS affiliate group and #5 ABC affiliate group (excluding owner-operators). Each television station also has a robust digital presence across online, mobile and social, reaching consumers whenever, wherever they are across platforms. We continue to make top-notch, innovative programming a priority and invest in local news and other special programming to ensure we stay connected to our audiences and empower them throughout the day.
|
•
|
TEGNA Digital (Digital Segment)
- primarily consists of the Cars.com, CareerBuilder, and G/O Digital businesses.
|
|
Three months ended Mar. 31,
|
|||||||||
|
2017
|
|
2016
|
|
Change
|
|||||
|
|
|
|
|
|
|||||
Operating revenues:
|
|
|
|
|
|
|||||
Media
|
$
|
446,310
|
|
|
$
|
443,829
|
|
|
1
|
%
|
Digital
|
332,161
|
|
|
337,903
|
|
|
(2
|
%)
|
||
Total operating revenues
|
$
|
778,471
|
|
|
$
|
781,732
|
|
|
0
|
%
|
|
|
|
|
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
||||
Cost of revenues, exclusive of depreciation
|
$
|
295,809
|
|
|
$
|
247,531
|
|
|
20
|
%
|
Selling, general and administrative expenses, exclusive of depreciation
|
274,998
|
|
|
280,309
|
|
|
(2
|
%)
|
||
Depreciation
|
23,087
|
|
|
22,233
|
|
|
4
|
%
|
||
Amortization
|
29,018
|
|
|
28,290
|
|
|
3
|
%
|
||
Asset impairment and facility consolidation charges
|
2,183
|
|
|
—
|
|
|
***
|
|
||
Total operating expenses
|
$
|
625,095
|
|
|
$
|
578,363
|
|
|
8
|
%
|
|
|
|
|
|
|
|||||
Total operating income
|
$
|
153,376
|
|
|
$
|
203,369
|
|
|
(25
|
%)
|
|
|
|
|
|
|
|||||
Non-operating expense
|
$
|
60,894
|
|
|
$
|
57,851
|
|
|
5
|
%
|
Provision for income taxes
|
28,583
|
|
|
42,108
|
|
|
(32
|
%)
|
||
Net income attributable to noncontrolling interests
|
(6,185
|
)
|
|
(10,492
|
)
|
|
(41
|
%)
|
||
Net income from continuing operations attributable to TEGNA Inc.
|
$
|
57,714
|
|
|
$
|
92,918
|
|
|
(38)
|
%
|
|
|
|
|
|
|
|||||
Earnings from continuing operations per share - basic
|
$
|
0.27
|
|
|
$
|
0.42
|
|
|
(36
|
%)
|
Earnings from continuing operations per share - diluted
|
$
|
0.27
|
|
|
$
|
0.42
|
|
|
(36
|
%)
|
|
Three months ended Mar. 31,
|
|||||||||
|
2017
|
|
2016
|
|
Change
|
|||||
|
|
|
|
|
|
|||||
Operating revenues
|
$
|
446,310
|
|
|
$
|
443,829
|
|
|
1
|
%
|
Operating expenses:
|
|
|
|
|
|
|||||
Operating expenses, exclusive of depreciation
(a)
|
286,686
|
|
|
254,030
|
|
|
13
|
%
|
||
Depreciation
|
12,428
|
|
|
13,748
|
|
|
(10
|
%)
|
||
Amortization of intangible assets
|
5,389
|
|
|
5,693
|
|
|
(5
|
%)
|
||
Asset impairment and facility consolidation charges
|
2,183
|
|
|
—
|
|
|
***
|
|
||
Total operating expenses
(a)
|
306,686
|
|
|
273,471
|
|
|
12
|
%
|
||
Operating income
|
$
|
139,624
|
|
|
$
|
170,358
|
|
|
(18
|
%)
|
|
|
|
|
|
|
|||||
(a) First quarter of 2017 includes severance expense of $0.4 million. First quarter of 2016 include severance expense primarily related to a voluntary early retirement program of approximately $10.4 million.
|
•
|
Severance charges at our Digital, Media and Corporate entities (which includes payroll and related benefit costs);
|
•
|
Non-cash asset impairment charges associated with operating assets at our Media segment; and
|
•
|
Non-operating costs associated with the spin-off of our Cars.com business unit, costs related to strategic review of CareerBuilder, and a charitable donation made to the TEGNA Foundation.
|
•
|
Severance charges primarily related to a voluntary retirement program at our Media Segment (which includes payroll and related benefit costs); and
|
•
|
Certain other non-operating costs incurred by our Digital Segment.
|
|
|
|
|
Special Items
|
|
|
||||||||||||||
Three months ended Mar. 31, 2017
|
|
GAAP
measure
|
|
Severance expense
|
|
Operating asset impairment
|
|
Other non-operating items
|
|
Non-GAAP measure
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating expenses
|
|
$
|
625,095
|
|
|
$
|
(4,139
|
)
|
|
$
|
(2,183
|
)
|
|
$
|
—
|
|
|
$
|
618,773
|
|
Operating income
|
|
153,376
|
|
|
4,139
|
|
|
2,183
|
|
|
—
|
|
|
159,698
|
|
|||||
Other non-operating expense
|
|
(4,009
|
)
|
|
—
|
|
|
—
|
|
|
11,921
|
|
|
7,912
|
|
|||||
Total non-operating expense
|
|
(60,894
|
)
|
|
—
|
|
|
—
|
|
|
11,921
|
|
|
(48,973
|
)
|
|||||
Income before income taxes
|
|
92,482
|
|
|
4,139
|
|
|
2,183
|
|
|
11,921
|
|
|
110,725
|
|
|||||
Provision for income taxes
|
|
28,583
|
|
|
1,582
|
|
|
805
|
|
|
2,786
|
|
|
33,756
|
|
|||||
Net income from continuing operations attributable to TEGNA Inc.
|
|
57,714
|
|
|
2,557
|
|
|
1,378
|
|
|
9,135
|
|
|
70,784
|
|
|||||
Earnings from continuing operations per share - diluted
|
|
$
|
0.27
|
|
|
$
|
0.01
|
|
|
$
|
0.01
|
|
|
$
|
0.04
|
|
|
$
|
0.33
|
|
|
|
|
|
Special Items
|
|
|
||||||||||
Three months ended Mar. 31, 2016
|
|
GAAP
measure
|
|
Severance expense
|
|
Other non-operating items
|
|
Non-GAAP measure
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses
|
|
$
|
578,363
|
|
|
$
|
(10,398
|
)
|
|
$
|
—
|
|
|
$
|
567,965
|
|
Operating income
(a)
|
|
203,369
|
|
|
10,398
|
|
|
—
|
|
|
213,767
|
|
||||
Other non-operating items
(a)
|
|
929
|
|
|
—
|
|
|
653
|
|
|
1,582
|
|
||||
Total non-operating expense
|
|
(57,851
|
)
|
|
—
|
|
|
653
|
|
|
(57,198
|
)
|
||||
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 Inc.
|
|
92,918
|
|
|
6,390
|
|
|
653
|
|
|
99,961
|
|
||||
Earnings from continuing operations per share - diluted
|
|
$
|
0.42
|
|
|
$
|
0.03
|
|
|
$
|
—
|
|
|
$
|
0.45
|
|
|
Three months ended Mar. 31,
|
|||||||||
|
2017
|
|
2016
|
|
Change
|
|||||
|
|
|
|
|
|
|||||
Net income from continuing operations attributable to TEGNA Inc. (GAAP basis)
|
$
|
57,714
|
|
|
$
|
92,918
|
|
|
(38
|
%)
|
Net income attributable to noncontrolling interests
|
6,185
|
|
|
10,492
|
|
|
(41
|
%)
|
||
Provision for income taxes
|
28,583
|
|
|
42,108
|
|
|
(32
|
%)
|
||
Interest expense
|
55,416
|
|
|
61,713
|
|
|
(10
|
%)
|
||
Equity loss (income) in unconsolidated investments, net
|
1,469
|
|
|
(2,933
|
)
|
|
***
|
|
||
Other non-operating items
|
4,009
|
|
|
(929
|
)
|
|
***
|
|
||
Operating income (GAAP basis)
|
153,376
|
|
|
203,369
|
|
|
(25
|
%)
|
||
Severance expense
|
4,139
|
|
|
10,398
|
|
|
(60
|
%)
|
||
Asset impairment and facility consolidation charges
|
2,183
|
|
|
—
|
|
|
***
|
|
||
Adjusted operating income (non-GAAP basis)
|
159,698
|
|
|
213,767
|
|
|
(25
|
%)
|
||
Depreciation
|
23,087
|
|
|
22,233
|
|
|
4
|
%
|
||
Amortization of intangible assets
|
29,018
|
|
|
28,290
|
|
|
3
|
%
|
||
Adjusted EBITDA (non-GAAP basis)
|
$
|
211,803
|
|
|
$
|
264,290
|
|
|
(20
|
%)
|
•
|
Media Segment Revenues
- Media Segment revenue will be impacted by challenging year-over-year comparisons due to the cyclical absence of political and Olympic revenues in 2017. Based on current trends, we expect the percentage increase in total revenues for the second quarter of 2017 compared to the same quarter in 2016 to be up in the low to mid-single digits despite challenging year-over-year comparisons as the second quarter of 2016 benefited from political advertising of $10 million.
|
•
|
Media Segment Expenses
- Beginning in January 2017, 11 of our NBC stations began making reverse compensation payments for the first time. As such, 2017 will be an unusual year as there will be an unfavorable gap between the increase in retransmission revenue we earn from multichannel video programming distributors (MVPD), compared to the increase in reverse compensation we will pay our affiliates. At the end of 2016, we renegotiated several new retransmission agreements with major MVPD carriers, and as a result, we have reduced our net retransmission gap in 2017 to approximately $25 million to $30 million. Further, we expect our strategic initiatives launched in 2016 will more than offset the remaining net retransmission gap in 2017.
|
|
Three months ended Mar. 31,
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Cash and cash equivalents at beginning of the period
|
$
|
76,920
|
|
|
$
|
129,200
|
|
Operating activities:
|
|
|
|
||||
Net income
|
63,899
|
|
|
95,936
|
|
||
Non-cash adjustments
|
59,562
|
|
|
57,594
|
|
||
Pension expense, net of contributions
|
(1,350
|
)
|
|
(752
|
)
|
||
Other, net
|
18,777
|
|
|
(25,720
|
)
|
||
Net cash flows from operating activities
|
140,888
|
|
|
127,058
|
|
||
Net cash used for investing activities
|
(13,697
|
)
|
|
(74,938
|
)
|
||
Net cash used for financing activities
|
(124,456
|
)
|
|
(102,114
|
)
|
||
Increase (decrease) in cash and cash equivalents
|
2,735
|
|
|
(49,994
|
)
|
||
Cash and cash equivalents at end of the period
|
$
|
79,655
|
|
|
$
|
79,206
|
|
|
Three months ended Mar. 31,
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Net cash flow from operating activities
|
$
|
140,888
|
|
|
$
|
127,058
|
|
Purchase of property and equipment
|
(17,959
|
)
|
|
(16,449
|
)
|
||
Free cash flow
|
$
|
122,929
|
|
|
$
|
110,609
|
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Program
|
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program
|
|||
|
|
|
|
|
|
|
|
|
|||
January 1, 2017 - January 31, 2017
|
|
318,056
|
|
|
$21.56
|
|
318,056
|
|
|
$460,313,417
|
|
February 1, 2017 - February 28, 2017
|
|
17,500
|
|
|
$22.65
|
|
17,500
|
|
|
$459,917,117
|
|
March 1, 2017 - March 31, 2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$459,917,117
|
Total First Quarter 2017
|
|
335,556
|
|
|
$21.61
|
|
335,556
|
|
|
$459,917,117
|
Date: May 9, 2017
|
TEGNA INC.
|
|
|
|
/s/ Clifton A. McClelland III
|
|
Clifton A. McClelland III
|
|
Vice President and Controller
|
|
(on behalf of Registrant and as Chief Accounting Officer)
|
Exhibit
Number
|
|
Exhibit
|
|
Location
|
|
|
|
|
|
3-1
|
|
Third Restated Certificate of Incorporation of TEGNA Inc.
|
|
Incorporated by reference to Exhibit 3-1 to TEGNA Inc.’s Form 10-Q for the fiscal quarter ended April 1, 2007.
|
|
|
|
|
|
3-1-1
|
|
Amendment to Third Restated Certificate of Incorporation of TEGNA Inc.
|
|
Incorporated by reference to Exhibit 3-1 to TEGNA Inc.’s Form 8-K filed on May 1, 2015.
|
|
|
|
|
|
3-1-2
|
|
Amendment to Third Restated Certificate of Incorporation of TEGNA Inc.
|
|
Incorporated by reference to Exhibit 3-1 to TEGNA Inc.’s Form 8-K filed on July 2, 2015.
|
|
|
|
|
|
3-2
|
|
By-laws, as amended through December 8, 2015.
|
|
Incorporated by reference to Exhibit 3-2 to TEGNA Inc.’s Form 8-K filed on December 11, 2015.
|
|
|
|
|
|
4-1
|
|
Specimen Certificate for TEGNA Inc.’s common stock, par value $1.00 per share.
|
|
Incorporated by reference to Exhibit 2 to TEGNA Inc.’s Form 8-B filed on June 14, 1972.
|
|
|
|
|
|
10-1
|
|
Cash-Based Award Agreement effective as of February 27, 2017 between TEGNA Inc. and Gracia C. Martore.*
|
|
Attached.
|
|
|
|
|
|
10-2
|
|
Form of Executive Officer Restricted Stock Unit Award Agreement.*
|
|
Attached.
|
|
|
|
|
|
10-3
|
|
Form of Executive Officer Performance Share Award Agreement.*
|
|
Attached.
|
|
|
|
|
|
31-1
|
|
Rule 13a-14(a) Certification of CEO.
|
|
Attached.
|
|
|
|
|
|
31-2
|
|
Rule 13a-14(a) Certification of CFO.
|
|
Attached.
|
|
|
|
|
|
32-1
|
|
Section 1350 Certification of CEO.
|
|
Attached.
|
|
|
|
|
|
32-2
|
|
Section 1350 Certification of CFO.
|
|
Attached.
|
|
|
|
|
|
101
|
|
The following financial information from TEGNA Inc. Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, formatted in XBRL includes: (i) Condensed Consolidated Balance Sheets at March 31, 2017 and December 31, 2016, (ii) Consolidated Statements of Income for the three months ended March 31, 2017 and March 31, 2016, (iii) Consolidated Statements of Comprehensive Income for the three months ended March 31, 2017 and March 31, 2016, (iv) Condensed Consolidated Cash Flow Statements for the three months ended March 31, 2017 and March 31, 2016, and (v) the notes to unaudited condensed consolidated financial statements.
|
|
Attached.
|
1.
|
The Executive will receive a Cash-Based Award in an amount equal to $5,000,000; provided that such amount will be prorated for the Executive’s service in 2017 (except as noted in 3 and 4 below).
|
2.
|
Except as noted in 3 and 4 below, the Award will be prorated based on a fraction, the numerator of which is the number of days the Executive is employed by the Company as its Chief Executive Officer in 2017, and the denominator of which is 365; provided that the Committee reserves the right to pay an amount in excess of such prorated amount in its sole discretion (but not to exceed $5,000,000).
|
3.
|
In lieu of 2 above, in the event that the Executive separates from service on or prior to December 31, 2017, by reason of death or permanent disability (as determined under the Company’s Long Term Disability Plan), the Executive (or in the case of the Executive's death, the Executive’s estate or designated beneficiary) shall receive the Maximum Potential Value of the Cash-Based Award.
|
4.
|
In lieu of 2 above, in the event that prior to the Executive’s separation from service (including a separation from service due to a permanent disability or death), a Change in Control occurs, the Executive shall receive the Maximum Potential Value of the Cash-Based Award.
|
5.
|
The Award will be paid to the Executive in the form of a lump sum cash payment (less applicable withholdings) as soon as administratively practicable after the earlier of: (i) the
|
6.
|
The value of the Award will not be treated as a bonus (or be in lieu of an annual bonus) and will not be taken into account for purposes of calculating the Executive’s benefit under the Company’s Supplemental Retirement Plan or other compensation or benefit plans.
|
7.
|
The Award is subject to the Company’s Recoupment Policy dated February 26, 2013.
|
8.
|
The Award is granted under and is subject to the terms of the Plan. References to “separates from service” or “separation from service” shall mean a “separation from service” within the meaning of Code Section 409A.
|
9.
|
This Award Agreement contains the entire agreement between the parties with respect to the subject matter hereof, supersedes all previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter, and there are no agreements or understandings between the parties with respect to such subject matter other than those set forth or referred to in this Award Agreement.
|
|
|
|
TEGNA Inc.
|
|
|
|
By:
/s/ Howard D. Elias
|
|
|
|
Name: Howard D. Elias
|
|
|
|
Title: Chairman, Executive Compensation Committee
|
|
|
|
Dated:
3-2-17
|
|
|
|
|
Agreed to and Accepted by:
|
|
|
|
By:
/s/ Gracia C. Martore
|
|
Gracia C. Martore
|
|
|
|
Dated:
3-31-17
|
|
|
|
Stock Unit Vesting Schedule:
|
25% of the Stock Units shall vest on 12/31/17*
|
Payment Date:
|
25% of the Stock Units shall be paid on 1/2/18*
|
•
|
any material misappropriation of funds or property of the Company or its affiliate by the Employee;
|
•
|
unreasonable and persistent neglect or refusal by the Employee to perform his or her duties which is not remedied within thirty (30) days after receipt of written notice from the Company; or
|
•
|
conviction, including a plea of guilty or of nolo contendere, of the Employee of a securities law violation or a felony.
|
•
|
the material diminution of the Employee’s duties, authorities or responsibilities from those in effect immediately prior to the Change in Control;
|
•
|
a reduction in the Employee’s base salary or target bonus opportunity as in effect on the date immediately prior to the Change in Control;
|
•
|
failure to provide the Employee with an annual long-term incentive opportunity the grant date value of which is equivalent to or greater in value than Employee’s regular annual long-term incentive opportunity in effect on the date of the Change of Control (counting only normal long-term incentive awards made as a part of the regular annual pay package, not special awards not made on a regular basis), calculated using widely recognized valuation methodologies by an experienced compensation consultant at a nationally recognized firm;
|
•
|
the relocation of the Employee’s office from the location at which the Employee is principally employed immediately prior to the date of the Change in Control to a location 35 or more miles farther from the Employee’s residence immediately prior to the Change in Control, or the Company’s requiring the Employee to be based anywhere other than the Company’s offices at such location, except for required travel on the Company’s business to an extent substantially consistent with the Employee’s business travel obligations prior to the Change in Control; or
|
•
|
the failure by the Company or its affiliate to pay any compensation or benefits due to the Employee.
|
•
|
The converted or substituted award must be a right to receive an amount of cash and/or equity that has a value, measured at the time of such conversion or substitution, that is equal to the value of this Award as of the date of the Change in Control;
|
•
|
Any equity payable in connection with a converted or substituted award must be publicly traded equity securities of the Company, a successor company or their direct or indirect parent company, and such equity issuable with respect to a converted or substituted award must be covered by a registration statement filed with the Securities Exchange Commission that permits the immediate sale of such shares on a national exchange;
|
•
|
The vesting terms of any converted or substituted award must be substantially identical to the terms of this Award; and
|
•
|
The other terms and conditions of any converted or substituted award must be no less favorable to the Employee than the terms of this Award are as of the date of the Change in Control (including the provisions that would apply in the event of a subsequent Change in Control).
|
•
|
The Number of Stock Units under this Award Agreement will be adjusted by multiplying such number by the “RemainCo Stock Conversion Ratio”. The RemainCo Stock Conversion Ratio is equal to (i) divided by (ii) where: (i) is the simple average of the volume weighted average per-share price of the Company’s Common Stock trading “regular way with due bills”
on the New York Stock Exchange during each of the first five (5) full trading days immediately before the Spin-Off; and (ii) is the simple average of the volume weighted average per-share price of the Company’s Common Stock trading on the New York Stock Exchange during each of the first five (5) full trading days immediately after the Spin-Off. Such conversion shall be effected in a manner intended generally to prevent the dilution or enlargement of rights under this Award Agreement, provided that all determinations in connection therewith (including the methodology for determining the value of a share for the RemainCo Stock Conversion Ratio) shall be made by the Committee in its sole discretion.
|
•
|
Except as set forth above, the terms of the Award Agreement shall remain in effect.
|
•
|
As of the date of the Spin-Off, this Award Agreement will be converted into an award agreement to receive stock units denominated in common shares of SpinCo. The number of stock units under the SpinCo award agreement will be calculated by multiplying the Number of Stock Units under this Award Agreement by the “SpinCo Stock Conversion Ratio”. The SpinCo Stock Conversion Ratio is equal to (i) divided
|
•
|
The Employee’s employment with SpinCo in conjunction with the Spin-Off shall not be treated as an event that cancels Employee’s rights under Section 6 or a termination of employment under Sections 1, 3, or 5.
|
•
|
Except as set forth above and for appropriate conforming changes (e.g., references to the Company shall instead refer to SpinCo, references to Common Shares shall refer to common stock of SpinCo, references to the Committee shall refer to the committee appointed by SpinCo, a Change in Control under Section 14 shall refer to a Change in Control of SpinCo, etc.), the SpinCo award agreement shall have terms and conditions that are substantially the same as the terms and conditions set forth herein.
|
Performance Period End Date:
|
12/31/19
|
Performance Share Payment Date:
|
On a date specified by the Committee that is within the first 90 days of 2020
|
•
|
any material misappropriation of funds or property of the Company or its affiliate by the Employee;
|
•
|
unreasonable and persistent neglect or refusal by the Employee to perform his or her duties which is not remedied within thirty (30) days after receipt of written notice from the Company; or
|
•
|
conviction, including a plea of guilty or of nolo contendere, of the Employee of a securities law violation or a felony.
|
•
|
the material diminution of the Employee’s duties, authorities or responsibilities from those in effect immediately prior to the Change in Control;
|
•
|
a reduction in the Employee’s base salary or target bonus opportunity as in effect on the date immediately prior to the Change in Control;
|
•
|
failure to provide the Employee with an annual long-term incentive opportunity the grant date value of which is equivalent to or greater in value than Employee’s regular annual long-term incentive opportunity in effect on the date of the Change of Control (counting only normal long-term incentive awards made as a part of the regular annual pay package, not special awards not made on a regular basis), calculated using widely recognized valuation methodologies by an experienced compensation consultant at a nationally recognized firm;
|
•
|
the relocation of the Employee’s office from the location at which the Employee is principally employed immediately prior to the date of the Change in Control to a location 35 or more miles farther from the Employee’s residence immediately prior to the Change in Control, or the Company’s requiring the Employee to be based anywhere other than the Company’s offices at such location, except for required travel on the Company’s business to an extent substantially consistent with the Employee’s business travel obligations prior to the Change in Control; or
|
•
|
the failure by the Company or its affiliate to pay any compensation or benefits due to the Employee.
|
•
|
The converted or substituted award must be a right to receive an amount of cash and/or equity that has a value, measured at the time of such conversion or substitution, that is equal to the value of this Award as of the date of the Change in Control;
|
•
|
Any equity payable in connection with a converted or substituted award must be publicly traded equity securities of the Company, a successor company or their direct or indirect parent company, and such equity issuable with respect to a converted or substituted award must be covered by a registration statement filed with the Securities Exchange Commission that permits the immediate sale of such shares on a national exchange;
|
•
|
The vesting terms of any converted or substituted award must be substantially identical to the terms of this Award; and
|
•
|
The other terms and conditions of any converted or substituted award must be no less favorable to the Employee than the terms of this Award are as of the date of the Change in Control (including the provisions that would apply in the event of a subsequent Change in Control).
|
•
|
The Target Number of Performance Shares under this Award Agreement will be adjusted by multiplying such number by the “RemainCo Stock Conversion Ratio”. The RemainCo Stock Conversion Ratio is equal to (i) divided by (ii) where: (i) is the
simple average of the volume weighted average per-share price of the Company’s Common Stock trading “regular way with due bills”
on the New York Stock Exchange during each of the first five (5) full trading days immediately
before the Spin-Off; and (ii) is the simple average of the volume weighted average per-share price of the Company’s Common Stock trading on the New York Stock Exchange during each of the first five (5) full trading days immediately
after the Spin-Off. Such conversion shall be effected in a manner intended generally to prevent the dilution or enlargement of rights under this Award Agreement, provided that all determinations in connection therewith (including the methodology for determining the value of a share for the RemainCo Stock Conversion Ratio) shall be made by the Committee in its sole discretion.
|
•
|
Except as set forth above, the terms of the Award Agreement shall remain in effect.
|
1.
|
Calculate the Total Shareholder Return for the Company and each of the Comparator Companies from the first day of the Incentive Period to the applicable measurement date.
|
2.
|
Calculate the percentile ranking of each Comparator Company (excluding the Company) based on its Total Shareholder Return during the applicable measurement period;
|
3.
|
Determine the Company’s percentile ranking based on its Total Shareholder Return and the percentile rankings of the Comparator Companies with Total Shareholder Returns immediately above and below the Company using straight line interpolation; and
|
4.
|
Calculate the Resulting Shares Earned percentage based on the Company’s percentile ranking and the below chart using straight line interpolation. –The Resulting Shares Earned percentage is the applicable percentage used to determine the number of Performance Shares that have been earned.
|
Company’s Percentile in 3-Year TSR vs. Comparator Companies
|
Resulting Shares Earned (% of Target)
|
Value of Each Share Earned
|
90
th
or above
|
200%
|
Each share earned is also impacted by share price change during the cycle
|
70
th
|
150%
|
|
50
th
|
100%
|
|
30
th
|
50%
|
|
<30
th
|
0%
|
|
|
CBS Corp.
|
Discovery Communications, Inc.
|
EW Scripps – CL A
|
Graham Holdings Co.
|
Gray Television, Inc.
|
Meredith Corp.
|
Nexstar Broadcasting Group
|
Scripps Networks Interactive
|
Sinclair Broadcast GP – CL A
|
Tribune Media Co.
|
Twenty-First Century Fox, Inc.
|
|
1.
|
The denominator for calculating Total Shareholder Return shall be adjusted by dividing the value of a share of the Company’s Common Stock on the Performance Period Commencement Date by the RemainCo Stock Conversion Ratio (“Adjusted RemainCo Grant Date Price”).
|
2.
|
The value of any cash dividends on the Company’s Common Stock (which, in accordance with the definition of “Total Shareholder Return” above, are deemed reinvested in the Company’s Common Stock) that are paid prior to the date of the Spin-Off (and consequently the assumed reinvestment returns on such dividends) will be adjusted in the same manner as the denominator for Total Shareholder Return (the “Adjusted RemainCo Pre-Spin Dividend”).
|
3.
|
In accordance with the definition of “Total Shareholder Return” above, following the Spin-Off, the numerator for calculating Total Shareholder Return will be calculated as the difference between (A) and (B) where (A) is the sum of (i) the price of Company Stock on the relevant measurement dates, plus (ii) dividends paid on such stock between the date of the Spin-Off and the relevant measurement date (which dividends are assumed to be reinvested in the stock), plus (iii) the Adjusted RemainCo Pre-Spin Dividend; and (B) is the Adjusted RemainCo Grant Date Price.
|
4.
|
For purposes of the application of Item 1 under the heading “Other Rules” above, the price of a share of the Company’s Common Stock on the Performance Period Commencement Date shall be treated as equaling the Adjusted RemainCo Grant Date Price.
|
(a)
|
To the extent permitted by Code Section 162(m) and the Plan, the Committee shall have the authority to adjust the number of Performance Shares that are payable under the Award Agreement, adjust the Total Shareholder Return calculations or alter the methodology for calculating the number of Performance Shares to take into account the effects of a stock split, reverse stock split, stock dividend, spin-off, reorganization, recapitalization or similar transaction.
|
(b)
|
The aggregate grant with respect to awards of Performance Shares or Restricted Stock Units made in any one fiscal year to any one participant under the Plan may not exceed the value of five hundred thousand (500,000) Shares.
|
(c)
|
Before any Performance Shares are paid to the Employee, the Committee will certify, in writing, the Company’s satisfaction of the pre-established performance target and the number of Performance Shares payable to the Employee.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of TEGNA Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
/s/ Gracia C. Martore
|
Gracia C. Martore
|
President and Chief Executive Officer
|
(principal executive officer)
|
|
Date: May 9, 2017
|
1.
|
I have reviewed this quarterly report on Form 10-Q of TEGNA Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
/s/ Victoria D. Harker
|
Victoria D. Harker
|
Chief Financial Officer (principal financial officer)
|
|
Date: May 9, 2017
|
(1)
|
the Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of TEGNA.
|
/s/ Gracia C. Martore
|
Gracia C. Martore
|
President and Chief Executive Officer
|
(principal executive officer)
|
May 9, 2017
|
(1)
|
the Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of TEGNA.
|
/s/ Victoria D. Harker
|
Victoria D. Harker
|
Chief Financial Officer (principal financial officer)
|
May 9, 2017
|