UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________

FORM 10-Q

_______________________


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

For the quarterly period ended ~~September 30, 2017~~March 31, 2019


¨	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.)

~~7950 Jones Branch Drive, McLean,~~8350 Broad Street, Suite 2000, Tysons, Virginia		~~22107-0150~~22102-5151
(Address of principal executive offices)		(Zip Code)

~~Registrant’s telephone number, including area code: (703) 873-6600.~~

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 x No ¨

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ 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 ~~and post~~ such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or 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. (Check one):



Large accelerated filer	x	Accelerated filer	¨

Non-accelerated filer	¨~~(Do not check if a smaller reporting company)~~	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. c

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



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

The total number of shares of the registrant’s Common Stock, $1 par value, outstanding as of ~~September~~April 30, ~~2017~~2019 was ~~215,205,823.~~216,350,179.

INDEX TO TEGNA INC.

~~September 30, 2017~~March 31, 2019 FORM 10-Q


Item No.		Page		Page
	PART I. FINANCIAL INFORMATION		PART I. FINANCIAL INFORMATION

1.	Financial Statements		Financial Statements

			Condensed Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018	3

	Condensed Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016	3	Consolidated Statements of Income for the Three Months Ended March 31, 2019 and 2018	5

	Consolidated Statements of Income for the Quarters and Nine Months Ended September 30, 2017 and 2016	5	Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2019 and 2018	6

	Consolidated Statements of Comprehensive Income for the Quarters and Nine Months Ended September 30, 2017 and 2016	6	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2019 and 2018	7

	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2017 and 2016	7	Consolidated Statements of Equity for the Three Months Ended March 31, 2019 and 2018	8

	Notes to Condensed Consolidated Financial Statements	8	Notes to Condensed Consolidated Financial Statements	9

2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

3.	Quantitative and Qualitative Disclosures about Market Risk	33	Quantitative and Qualitative Disclosures about Market Risk	28

4.	Controls and Procedures	34	Controls and Procedures	28

	PART II. OTHER INFORMATION		PART II. OTHER INFORMATION

1.	Legal Proceedings	34	Legal Proceedings	29

1A.	Risk Factors	34	Risk Factors	29

2.	Unregistered Sales of Equity Securities and Use of Proceeds	34	Unregistered Sales of Equity Securities and Use of Proceeds	29

3.	Defaults Upon Senior Securities	34	Defaults Upon Senior Securities	29

4.	Mine Safety Disclosures	34	Mine Safety Disclosures	29

5.	Other Information	34	Other Information	29

6.	Exhibits	35	Exhibits	30

SIGNATURE	SIGNATURE	36	SIGNATURE	31

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

TEGNA Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

In thousands of dollars


	Sept. 30, 2017			Dec. 31, 2016			Mar. 31, 2019			Dec. 31, 2018
	(Unaudited)			(Recast)			(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	383,354		$	15,879		$	3,818		$	135,862
Accounts receivable, net of allowances of $3,222 and $3,404, respectively	382,791			386,074
Accounts receivable, net of allowances of $3,661 and $3,090, respectively							454,861			425,404
Other receivables	20,384			20,685			18,741			20,967
Programming rights							23,908			35,252
Prepaid expenses and other current assets	80,201			62,090			18,071			17,737
Current discontinued operations assets	—			305,960
Total current assets	866,730			790,688			519,399			635,222
Property and equipment
Cost	801,791			805,349			883,828			858,170
Less accumulated depreciation	(456,768		)	(430,028		)	(496,511		)	(482,955		)
Net property and equipment	345,023			375,321			387,317			375,215
Intangible and other assets
Goodwill	2,579,417			2,579,417			2,605,863			2,596,863
Indefinite-lived and amortizable intangible assets, less accumulated amortization	1,278,667			1,294,839			1,599,124			1,526,077
Right-of-use assets for operating leases							72,160			—
Investments and other assets	173,219			180,616			139,886			143,465
Noncurrent discontinued operations assets	—			3,321,844
Total intangible and other assets	4,031,303			7,376,716			4,417,033			4,266,405
Total assets	$	5,243,056		$	8,542,725		$	5,323,749		$	5,276,842

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


	Sept. 30, 2017			Dec. 31, 2016			Mar. 31, 2019			Dec. 31, 2018
	(Unaudited)			(Recast)			(Unaudited)
LIABILITIES AND EQUITY
Current liabilities
Accounts payable	$	102,758		$	99,568		$	53,880		$	83,226
Accrued liabilities	219,701			200,417
Compensation							25,253			52,726
Interest							53,683			37,458
Contracts payable for programming rights							91,758			112,059
Other							49,186			49,211
Dividends payable	15,190			30,178			15,216			15,154
Income taxes	14,304			11,448			34,562			19,383
Current portion of long-term debt	280,646			646
Current discontinued operations liabilities	—			276,924
Total current liabilities	632,599			619,181			323,538			369,217
Noncurrent liabilities
Income taxes	19,711			22,644			13,101			13,624
Deferred income taxes	585,173			648,920			401,729			396,847
Long-term debt	3,035,166			4,042,749			2,891,495			2,944,466
Pension liabilities	168,024			187,290			137,607			139,375
Operating lease liabilities							84,259			—
Other noncurrent liabilities	96,508			75,438			66,769			72,389
Noncurrent discontinued operations liabilities	—			347,233
Total noncurrent liabilities	3,904,582			5,324,274			3,594,960			3,566,701
Total liabilities	4,537,181			5,943,455			3,918,498			3,935,918

Redeemable noncontrolling interests related to discontinued operations	—			46,265

Equity
TEGNA Inc. shareholders’ equity
Shareholders’ equity
Common stock of $1 par value per share, 800,000,000 shares authorized, 324,418,632 shares issued	324,419			324,419			324,419			324,419
Additional paid-in capital	390,886			473,742			262,823			301,352
Retained earnings	5,777,443			7,384,556			6,488,352			6,429,512
Accumulated other comprehensive loss	(121,073		)	(161,573		)	(135,432		)	(136,511		)
Less treasury stock at cost, 109,212,809 shares and 109,930,832 shares, respectively	(5,665,800		)	(5,749,726		)
Total TEGNA Inc. shareholders’ equity	705,875			2,271,418
Noncontrolling interests related to discontinued operations	—			281,587
Less treasury stock at cost, 108,133,345 shares and 108,660,002 shares, respectively							(5,534,911		)	(5,577,848		)
Total equity	705,875			2,553,005			1,405,251			1,340,924
Total liabilities, redeemable noncontrolling interests and equity	$	5,243,056		$	8,542,725
Total liabilities and equity							$	5,323,749		$	5,276,842

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,
	2017			2016			2017			2016			Quarter ended Mar. 31,
				(recast)						(recast)			2019			2018

Revenues	$	464,264		$	519,617		$	1,412,703		$	1,457,233		$	516,753		$	502,090

Operating expenses:
Cost of revenues, exclusive of depreciation	235,474			200,495			696,565			590,058			281,311			258,493
Business units - Selling, general and administrative expenses, exclusive of depreciation	70,914			83,039			214,645			246,280			71,465			73,621
Corporate - General and administrative expenses, exclusive of depreciation	12,881			16,027			42,462			43,865			14,735			12,708
Depreciation	15,186			13,212			41,721			42,653			14,917			13,471
Amortization of intangible assets	5,395			5,775			16,172			17,542			8,689			6,782
Asset impairment and facility consolidation charges	7,553			15,218			11,086			18,946
Spectrum repacking reimbursements and other													(7,013		)	—
Total	347,403			333,766			1,022,651			959,344			384,104			365,075
Operating income	116,861			185,851			390,052			497,889			132,649			137,015

Non-operating income (expense):
Equity income (loss) in unconsolidated investments, net	866			(1,198		)	(1,549		)	(2,763		)	12,028			(1,238		)
Interest expense	(51,855		)	(57,601		)	(162,113		)	(175,444		)	(46,385		)	(47,725		)
Other non-operating items	(3,671		)	(11,874		)	(26,853		)	(16,029		)
Other non-operating items, net													(1,539		)	(12,480		)
Total	(54,660		)	(70,673		)	(190,515		)	(194,236		)	(35,896		)	(61,443		)

Income before income taxes	62,201			115,178			199,537			303,653			96,753			75,572
Provision for income taxes	11,447			38,441			54,855			92,038			22,774			20,385
Net Income from continuing operations	50,754			76,737			144,682			211,615
(Loss) income from discontinued operations, net of tax	(10,803		)	56,698			(233,261		)	132,141
Net income (loss)	39,951			133,435			(88,579		)	343,756
Net loss (income) attributable to noncontrolling interests from discontinued operations	2,806			(14,752		)	58,698			(40,178		)
Net income (loss) attributable to TEGNA Inc.	$	42,757		$	118,683		$	(29,881	)	$	303,578
Net income													$	73,979		$	55,187

Earnings from continuing operations per share - basic	$	0.24		$	0.36		$	0.67		$	0.98
(Loss) earnings from discontinued operations per share - basic	(0.04		)	0.19			(0.81		)	0.42
Net income (loss) per share – basic	$	0.20		$	0.55		$	(0.14	)	$	1.40

Earnings from continuing operations per share - diluted	$	0.23		$	0.35		$	0.66		$	0.96
(Loss) earnings from discontinued operations per share - diluted	(0.04		)	0.19			(0.80		)	0.42
Net income (loss) per share – diluted	$	0.19		$	0.54		$	(0.14	)	$	1.38
Net income per share – basic													$	0.34		$	0.26
Net income per share – diluted													$	0.34		$	0.25

Weighted average number of common shares outstanding:
Basic shares	215,863			214,813			215,558			216,865			216,709			216,276
Diluted shares	218,095			218,099			217,827			220,511			217,202			216,989

Dividends declared per share	$	0.07		$	0.14		$	0.28		$	0.42

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,
2017 2016 2017 2016

Net income (loss) $ 39,951
$ 133,435
$ (88,579 ) $ 343,756
Redeemable noncontrolling interests (earnings not available to shareholders) 36
(1,353 ) (2,797 ) (3,628 )
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments 24,764
(1,973 ) 34,126
(7,934 )
Recognition of previously deferred post-retirement benefit plan costs 2,201
1,763
6,603
6,085
Unrealized (losses) gains on available for sale investment during the period —
(3,743 ) 1,776
(8,017 )
Other comprehensive income (loss), before tax 26,965
(3,953 ) 42,505
(9,866 )
Income tax effect related to components of other comprehensive income (loss) (752 ) (688 ) (2,445 ) (2,368 )
Other comprehensive income (loss), net of tax 26,213
(4,641 ) 40,060
(12,234 )
Comprehensive income (loss) 66,200
127,441
(51,316 ) 327,894
Comprehensive income (loss) attributable to noncontrolling interests, net of tax 1,360
(12,470 ) 55,676
(32,813 )
Comprehensive income attributable to TEGNA Inc. $ 67,560
$ 114,971
$ 4,360
$ 295,081



	Quarter ended Mar. 31,
	2019			2018

Net income	$	73,979		$	55,187
Other comprehensive income, before tax:
Foreign currency translation adjustments	14			202
Recognition of previously deferred post-retirement benefit plan costs	1,425			1,250
Pension lump-sum payment charge	—			6,300
Other comprehensive income, before tax	1,439			7,752
Income tax effect related to components of other comprehensive income	(360		)	(1,977		)
Other comprehensive income, net of tax	1,079			5,775
Comprehensive income	$	75,058		$	60,962

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

TEGNA Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited, in thousands of dollars

Nine months ended Sept. 30,
2017 2016

Cash flows from operating activities:
Net (loss) income $ (88,579 ) $ 343,756
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation and amortization 117,762
153,197
Stock-based compensation 14,189
13,216
Loss on sale of CareerBuilder 342,900
—
Other losses on sales of assets and impairment charges 19,803
24,082
Equity losses in unconsolidated investments, net 1,488
6,530
Pension (contributions), net of expense (12,547 ) 2,135
Spectrum channel share agreement proceeds 32,588
—
Change in other assets and liabilities, net (76,421 ) (88,153 )
Net cash flow from operating activities 351,183
454,763
Cash flows from investing activities:
Purchase of property and equipment (63,846 ) (68,577 )
Payments for acquisitions of businesses, net of cash acquired —
(196,751 )
Payments for investments (2,778 ) (19,132 )
Proceeds from sale of CareerBuilder, net of $36,581 cash transferred 198,342
—
Proceeds from investments 15,122
10,127
Proceeds from sale of assets 5,659
1,024
Net cash flow from (used for) investing activities 152,499
(273,309 )
Cash flows from financing activities:
(Payments) proceeds of borrowings under revolving credit facilities, net (635,000 ) 10,000
Proceeds from Cars.com borrowings 675,000
—
Proceeds from other borrowings —
300,000
Debt repayments (99,185 ) (249,592 )
Payments of debt issuance costs (6,208 ) (1,684 )
Dividends paid (75,109 ) (91,627 )
Repurchases of common stock (8,453 ) (150,917 )
Distributions to noncontrolling membership interests (22,980 ) —
Cash transferred to the Cars.com business (20,133 ) —
Other, net (5,180 ) (19,505 )
Net cash flow used for financing activities (197,248 ) (203,325 )
Increase (decrease) in cash and cash equivalents 306,434
(21,871 )
Cash and cash equivalents from continuing operations, beginning of period 15,879
26,096
Cash and cash equivalents from discontinued operations, beginning of period 61,041
103,104
Balance of cash and cash equivalents, beginning of period 76,920
129,200
Cash and cash equivalents from continuing operations, end of period 383,354
19,185
Cash and cash equivalents from discontinued operations, end of period —
88,144
Balance of cash and cash equivalents, end of period $ 383,354
$ 107,329

Supplemental cash flow information:
Cash paid for income taxes, net of refunds $ 104,422
$ 145,052
Cash paid for interest $ 133,752
$ 153,510



	Quarter ended Mar. 31,
	2019			2018

Cash flows from operating activities:
Net income	$	73,979		$	55,187
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation and amortization	23,606			20,253
Stock-based compensation	4,433			3,599
Other gains on sales of assets	(2,880		)	(1,010		)
Equity (income) losses in unconsolidated investments, net	(12,028		)	1,238
Pension contributions, net of expense	(242		)	(23,072		)
Change in other assets and liabilities, net	(38,459		)	(5,009		)
Net cash flow from operating activities	48,409			51,186
Cash flows from investing activities:
Purchase of property and equipment	(24,810		)	(10,643		)
Reimbursements from spectrum repacking	4,134			—
Payments for acquisitions of businesses, net of cash acquired	(108,872		)	(325,903		)
Payments for investments	(1,171		)	(3,991		)
Proceeds from investments	618			1,010
Proceeds from sale of assets and businesses	20,064			1,373
Net cash flow used for investing activities	(110,037		)	(338,154		)
Cash flows from financing activities:
(Payments) proceeds of borrowings under revolving credit facilities, net	(30,000		)	220,000
Debt repayments	(25,000		)	(33,062		)
Dividends paid	(15,078		)	(15,043		)
Other, net	(338		)	(4,630		)
Net cash flow (used for) provided by financing activities	(70,416		)	167,265
(Decrease) in cash, cash equivalents and restricted cash	(132,044		)	(119,703		)
Balance of cash, cash equivalents and restricted cash, beginning of period	135,862			128,041
Balance of cash, cash equivalents and restricted cash, end of period	$	3,818		$	8,338

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

TEGNA Inc.

CONSOLIDATED STATEMENTS OF EQUITY

Unaudited, in thousands of dollars, except per share data



	Common stock		Additional paid-in capital			Retained earnings			Accumulated other comprehensive income (loss)			Treasury stock			Total
Balance at Dec. 31, 2018	$	324,419	$	301,352		$	6,429,512		$	(136,511	)	$	(5,577,848	)	$	1,340,924
Net Income						73,979									73,979
Other comprehensive income, net of tax									1,079						1,079
Total comprehensive income															75,058
Dividends declared: $0.07 per share						(15,139		)							(15,139		)
Stock-based awards activity			(43,275		)							42,937			(338		)
Stock-based compensation			4,433												4,433
Other activity			313												313
Balance at Mar. 31, 2019	$	324,419	$	262,823		$	6,488,352		$	(135,432	)	$	(5,534,911	)	$	1,405,251



	Common stock		Additional paid-in capital			Retained earnings			Accumulated other comprehensive income (loss)			Treasury stock			Total
Balance at Dec. 31, 2017	$	324,419	$	382,127		$	6,062,995		$	(106,923	)	$	(5,667,577	)	$	995,041
Net Income						55,187									55,187
Other comprehensive income, net of tax									5,775						5,775
Total comprehensive income															60,962
Cumulative effects of accounting changes						21,121			(24,845		)				(3,724		)
Dividends declared: $0.07 per share						(15,094		)							(15,094		)
Stock-based awards activity			(82,283		)							77,652			(4,631		)
Stock-based compensation			3,599												3,599
Other activity			483												483
Balance at Mar. 31, 2018	$	324,419	$	303,926		$	6,124,209		$	(125,993	)	$	(5,589,925	)	$	1,036,636

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~~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 ~~presentation~~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, ~~2016.~~2018.

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. Actual results could differ from these estimates. Significant estimates include, but are not limited to, evaluation of goodwill and other intangible assets for impairment, business combinations, fair value measurements, post-retirement benefit plans, income taxes including deferred taxes, and contingencies. The condensed consolidated financial statements include the accounts of subsidiaries we control and variable interest entities (VIEs) if we are the primary beneficiary. 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 income (loss) ~~income~~ in unconsolidated investments, net” in the Consolidated Statements of Income. ~~In addition, certain reclassifications have been made to prior years’ consolidated Statements of Income to conform to the current year’s presentation.~~

~~On May 31, 2017, we completed the spin-off~~We operate one operating and reportable segment, which primarily consists of our 49 television stations operating in 41 markets, offering high-quality television programming and digital ~~automotive marketplace business, Cars.com. In addition,~~content. Our reportable segment determination is based on ~~July 31, 2017,~~our management and internal reporting structure, the nature of products and services we completed the sale of our majority ownership stake in CareerBuilder. Our digital marketing services (DMS) business is now reported within our Media business. As a result of these strategic actions, we have disposed of substantially all of our Digital Segment business and have therefore classified its historical financial results as discontinued operations. See Note 12, “Discontinued Operations”, for further details regarding the spin-off of Cars.comoffer, and the ~~sale of CareerBuilder and the impact of each transaction on~~financial information that is evaluated regularly by our ~~condensed consolidated financial statements.~~chief operating decision maker.

Accounting guidance adopted in ~~2017:~~2019: In March 2017, the Financial Accounting Standards Board (FASB) issued new guidance that changes the presentation of net periodic pension and other post-retirement benefit costs (post-retirement benefit costs) in the Consolidated Statements of Income. Under this new guidance, the service cost component of the post-retirement benefit expense will continue to be presented as an operating expense while all other components of post-retirement benefit expense will be presented as non-operating expense. Previously, all components of post-retirement benefit expense were presented as operating expense in the Consolidated Statements of Income. The FASB permitted early adoption of this guidance, and we elected to early adopt in the first quarter of 2017. We believe the new guidance provides enhanced financial reporting by limiting operating expense classification to the service cost component of post-retirement benefit expense. Service cost is the component of the expense that relates to services provided by employees in the current period and thus better reflects the current continuing operating costs. Changes to the classification of Consolidated Statements of Income amounts resulting from the new guidance were made on a retrospective basis, wherein each period presented was adjusted to reflect the effects of applying the new guidance. We utilized amounts previously disclosed in our retirement plan footnote to retrospectively apply the guidance. As a result of adopting this guidance, operating expenses in the third quarter and for the first nine months of 2017 were lower by $1.7 million and $4.9 million, respectively, while non-operating expenses were higher by the same amounts. In 2016, operating expenses in the third quarter and first nine months were reduced by $1.8 million and $5.8 million, respectively, with corresponding increases in non-operating expenses as a result of adopting this new guidance. Net income, earnings per share, and retained earnings were not impacted by the new guidance.

In January 2017, the FASB issued guidance that eliminates the requirement to calculate the implied fair value of goodwill (i.e., Step 2 of the goodwill impairment test) to measure a goodwill impairment charge. Instead, companies will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value (i.e., measure the charge based on Step 1 of the impairment test). The FASB permitted early adoption of this guidance, and we elected to early adopt in the second quarter of 2017 in connection with the calculation of CareerBuilder’s goodwill impairment charge, discussed in Note 12.

~~New accounting pronouncements not yet adopted:~~ In May 2014, the FASB issued new guidance related to revenue recognition. Under the new guidance, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, the guidance requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.

We will adopt the guidance beginning January 1, 2018. The two permitted transition methods are the full retrospective method, in which case the guidance would be applied to each prior reporting period presented and the cumulative effect of applying the guidance would be recognized at the earliest period shown; and the modified retrospective method, in which case

~~the cumulative effect of applying the guidance would be recognized at the date of initial application. We will adopt the guidance using the modified retrospective method.~~

While we continue to evaluate the full impact of the guidance, we do not believe that it will have a material impact on our consolidated financial statements. We are in the process of evaluating the other requirements of the new standard, which may result in additional revenue related disclosures.

Based on our evaluation performed to date, we believe that 90% of our revenues will not be materially impacted by the new guidance. Specifically, our television spot advertising contracts, which comprised approximately 60% of 2016 revenue are short-term in nature with transaction price consideration agreed upon in advance. We expect revenue will continue to be recognized when commercials are aired. Further, we expect that subscription revenue earned under retransmission agreements will be recognized under the licensing of intellectual property guidance in the standard, which will not have a material change to our current revenue recognition. Subscription revenue comprised approximately 30% of 2016 revenue. We continue to evaluate the impact to our online digital and other services revenue (which represents approximately 10% of our revenues).

In February 2016, the FASB issued new guidance related to leases which ~~will~~ require lessees to recognize assets and liabilities on the balance sheet for leases with lease terms of more than 12 months. Consistent with ~~current~~previous GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily ~~will depend~~depends on its classification as a finance or operating lease. However, unlike ~~current GAAP—~~previous GAAP–which requires only capital leases (renamed finance leases under the new guidance) to be recognized on the balance ~~sheet—~~sheet–the new guidance ~~will require~~requires both ~~types of~~finance and operating leases to be recognized on the balance sheet. This update requires the lessee to recognize a lease liability equal to the present value of the lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term for all leases longer than 12 months.

We adopted the guidance on January 1, 2019. The FASB provided companies with the option to apply the requirements of the guidance in the period of adoption, with no restatement of prior periods. We are utilizing this adoption method. We have also elected an accounting policy allowed by the guidance to not account for lease and non-lease components separately. Additionally, in adopting the guidance, we utilized the package of practical expedients permitted by the FASB, which among other things, allowed us to carry forward our historical lease classification. Lastly, as permitted by the guidance, we elected a policy to not record leases with an original lease term of twelve months or less on the balance sheet.

Adoption of the guidance resulted in recording of new right-of-use asset and lease liability balances of $73.8 million and $91.8 million, respectively, as of the adoption date. The difference between right-of-use lease asset and lease liability balances was primarily due to previously accrued rent expense relating to periods prior to January 1, 2019. The new guidance ~~is effective for us beginning in the first quarter of 2019 and will be adopted using~~did not have a ~~modified retrospective approach. We are currently evaluating the effect it is expected to have~~material impact on our ~~consolidated financial statements and related disclosures.~~Consolidated Statements of Income, Comprehensive Income, Cash Flows or Equity. See Note 6 for additional information.

New accounting guidance not yet adopted:In June 2016, the FASB issued new guidance related to the measurement of credit losses on financial instruments. The new guidance changes the way credit losses on accounts receivable are estimated. Under current GAAP, credit losses on accounts receivable are recognized once it is probable that such losses will occur. Under the new guidance, we will be required to estimate credit losses based on the expected amount of future collections which may result in earlier recognition of ~~allowance for~~ doubtful accounts. The new guidance is effective for public companies beginning in the first quarter of 2020 and will be adopted using a modified retrospective approach. We are currently evaluating the effect this new guidance will have on our consolidated financial statements and related disclosures.

In August ~~2016,~~2018, the FASB issued new guidance on the accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. The new guidance requires a customer in a hosting arrangement that is a service contract to follow the internal-use software guidance to determine which ~~clarifies several specific cash flow classification issues.~~implementation costs to capitalize as an asset related to the service contract. The ~~objective~~guidance can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. We plan to adopt the new guidance ~~is to reduce the existing diversity in practice in how these cash flows are presented~~on a prospective basis beginning in the ~~statement~~second quarter of ~~cash flows.~~2019.

In August 2018, the FASB issued new guidance that changes disclosures related to defined benefit pension and other postretirement benefit plans. The ~~standard~~guidance removes disclosures that are no longer considered cost beneficial, clarifies certain existing disclosure requirements and adds some new disclosures. The most relevant elimination for us is the annual disclosure of the amount of gain/loss and prior service cost/credit amortization expected in the following year. Additions most relevant to us include disclosing narrative explanations of the drivers for significant changes in plan obligations or assets, and disclosure for cost of living adjustments for certain participants of our TEGNA retirement plan. The new guidance is effective for us beginning in ~~the first quarter of 2018~~2020 and ~~early~~must be applied on a retrospective basis. Early adoption is permitted. ~~One classification change we will make when we adopt~~

In March 2019, the ~~standard~~FASB issued new guidance related to the accounting for episodic television series. The most significant aspect of this new guidance that is applicable to us relates to ~~payments made~~the level at which our capitalized programming assets are monitored for ~~premiums, fees paid to lenders and other related third party costs when debt is repaid early.~~impairment. Under the new guidance these ~~payments~~assets will be ~~classified~~monitored at the film group level which is the lowest level at which independently identifiable cash flows are identifiable. The new guidance is effective for public companies beginning in the first quarter of 2020 and is to be adopted prospectively. Early adoption is permitted. We do not expect this guidance to have a material impact on our consolidated financial statements and related disclosures.

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 ~~financing cash outflows (we have historically classified~~deferred revenue.

The primary sources of our revenues are: 1) advertising & marketing services revenues, which include local and national non-political television advertising, digital marketing services (including Premion), and advertising on the stations’ websites and tablet and mobile products; 2) 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; 3) political advertising revenues, which are driven by even year election cycles at the local and national level (e.g. 2020, 2018) and particularly in the second half of those years; and 4) other services, such as production of programming and advertising material. Revenue earned by these ~~types~~sources in the first three months of ~~cash payments as operating outflows).~~2019 and 2018 are shown below (amounts in thousands):



	Quarter ended Mar. 31,
	2019		2018

Advertising & Marketing Services	$	264,402	$	282,939
Subscription	241,575		205,556
Political	2,704		7,606
Other	8,072		5,989
Total revenues	$	516,753	$	502,090

NOTE 2 – Goodwill and other intangible assets

The following table displays goodwill, indefinite-lived intangible assets, and amortizable intangible assets as of ~~September 30, 2017~~March 31, 2019 and December 31, ~~2016~~2018 (in thousands):


	Sept. 30, 2017					Dec. 31, 2016					Mar. 31, 2019					Dec. 31, 2018
	Gross		Accumulated Amortization			Gross		Accumulated Amortization			Gross		Accumulated Amortization			Gross		Accumulated Amortization
						(recast)		(recast)
Goodwill	$	2,579,417	$	—		$	2,579,417	$	—		$	2,605,863	$	—		$	2,596,863	$	—

Indefinite-lived intangibles:
Television station FCC licenses	1,191,950		—			1,191,950		—
Television and radio station FCC licenses											1,437,565		—			1,384,186		—
Amortizable intangible assets:
Retransmission agreements	110,191		(58,586		)	110,191		(47,280		)	133,847		(83,730		)	121,594		(79,274		)
Network affiliation agreements	43,485		(18,139		)	43,485		(14,445		)	126,494		(34,383		)	110,390		(30,802		)
Other	15,763		(5,997		)	15,763		(4,825		)	28,864		(9,533		)	28,865		(8,882		)
Total indefinite-lived and amortizable intangible assets	$	1,361,389	$	(82,722	)	$	1,361,389	$	(66,550	)	$	1,726,770	$	(127,646	)	$	1,645,035	$	(118,958	)

Our retransmission ~~agreements~~consent contracts and network affiliation agreements are amortized on a straight-line basis over their estimated useful lives. Other intangibles primarily include customer relationships and favorable lease agreements which are amortized on a straight-line basis over their useful lives. ~~During the second quarter of 2017, we recorded a goodwill impairment charge within discontinued operations related to our former CareerBuilder reporting unit. See Note 12 for further discussion.~~

On January 2, 2019, we completed our acquisition of WTOL, the CBS affiliate in Toledo, OH, and KWES, the NBC affiliate in Midland-Odessa, TX from Gray Television, Inc. for approximately $108.9 million in cash (which includes $3.9 million for estimated working capital paid at closing). WTOL and KWES are strong local media brands in key markets, and they further expand our station portfolio of Big 4 affiliates. The acquisition was funded through the use of available cash and borrowings under our revolving credit facility. The fair value of the assets acquired and liabilities assumed were based on a preliminary valuation and, as such, our estimates and assumptions are subject to change as additional information is obtained about the facts and circumstances that existed as of the acquisition date. The primary area of purchase price allocation that is not yet finalized is related to the fair value of intangible assets.

In connection with our preliminary purchase accounting for this acquisition, we recorded indefinite lived intangible assets for FCC licenses of $53.4 million and amortizable intangible assets of $28.4 million, related to retransmission consent contracts and network affiliation agreements. The amortizable assets will be amortized over a weighted average period of 7 years. We also recognized goodwill of $9.0 million all of which is deductible for tax purposes.

NOTE 3 – Investments and other assets

Our investments and other assets consisted of the following as of ~~September 30, 2017,~~March 31, 2019, and December 31, ~~2016~~2018 (in thousands):

Sept. 30, 2017 Dec. 31, 2016
(recast)
Cash value life insurance $ 60,873
$ 64,134
Deferred compensation investments 28,593
23,715
Equity method investments 35,599
18,016
Available for sale investment —
16,744
Deferred debt issuance cost 7,008
9,856
Other long term assets 41,146
48,151
Total $ 173,219
$ 180,616



	Mar. 31, 2019		Dec. 31, 2018

Cash value life insurance	$	51,592	$	50,452
Equity method investments	18,426		22,960
Cost method investments	24,790		24,497
Deferred debt issuance costs	8,679		9,350
Other long-term assets	36,399		36,206
Total	$	139,886	$	143,465

~~Deferred compensation investments~~Cash value life insurance: ~~: Employee compensation-related investments consist~~We are the beneficiary of ~~debt and equity securities~~life insurance policies on the lives of certain employees/retirees, which are ~~classified~~recorded at their cash surrender value as ~~trading securities and fund our~~determined by the insurance carrier. These policies are utilized as a partial funding source for deferred compensation ~~plan liabilities.~~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.

Equity method investments:~~Investments over which we have the ability to exercise significant influence but do not control, are accounted for under the~~ We hold several strategic equity method of accounting. Significant influence typically exists when we own between 20% and 50% of the voting interests in a corporation, own more than a minimal investment in a limited liability company, or hold substantial management rights in the investee. Under this method of accounting, our share of the net earnings or losses of the investee is included in non-operating income on our Consolidated Statements of Income. We evaluate our equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may be impaired. If a decline in the value of aninvestments. Our largest equity method investment is ~~determined to be other than temporary, a loss equal to the excess~~our ownership in CareerBuilder, of ~~carrying value over fair value is recorded in earnings in the current period.~~Certain differences exist between our investment carrying value and the underlying equity of the investee companies, principally due to fair value measurement at the date of investment acquisition and due to impairment chargeswhich we ~~recorded for certain investments. As part of the agreement to sell the majority of CareerBuilder, we retained an investment of~~own approximately 17% (or approximately ~~12%~~10% on a fully-diluted basis) ~~in the entity.~~, which has an investment balance of $12.9 million and $12.4 million as of March 31, 2019 and December 31, 2018, respectively. Our ownership stake provides us with two seats on CareerBuilder’s board of directors and thus we concluded that we have significant influence over the ~~entity and have classified~~entity.

In the first quarter of 2019, we sold our investment in Captivate, which had been accounted for as an equity method ~~investment. In~~investment, for $16.2 million, which resulted in a pre-tax gain of $12.2 million (after-tax gain of $9.2 million). The gain has been recorded in the ~~third quarter of 2017, we recorded $0.5 million of equity earnings from our CareerBuilder investment.~~

~~On October 18, 2017, we closed on the sale~~Equity income (loss) in unconsolidated investments, net line item of our ~~equity investment in Livestream, a business specializing in live video streaming. Our share~~Statement of ~~the sale proceeds was $21.4 million.~~

~~Available for sale investment: Our investment in Gannett Co., Inc., common stock, was sold in its entirety during the third quarter~~Income and Statement of 2017. Proceeds from the sale were $14.6 million and for the three months and nine months ended September 30, 2017 we recorded losses of $0.4 million and $3.9 million, respectively. These losses are reflected in the Other non-operating items, in the accompanying Consolidated Statements of Income.

~~Other long term assets~~: During the second quarter of 2017, we recognized a $5.8 million loss associated with a write-off of a note receivable from one of our equity method investments. This loss is reflected in Other non-operating items, in the accompanying Consolidated Statements of Income. The loss was a result of a decision made during the second quarter of 2017 by the investee’s board of directors to discontinue the business, and the investee not having sufficient funds to repay the full note at that time.Cash Flows.

Cost method investments: ~~The carrying value of~~Represent 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 ~~method~~less impairments, if any, plus or minus changes in observable prices for those investments. There were no gains or losses associated with these investments ~~was $15.3 million as of September 30, 2017~~during the three months ended March 31, 2019 and ~~$14.8 million as of December 31, 2016, and is included within other long term assets in the table above.~~2018.

~~NOTE 4 – Income taxes~~

The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate was approximately $9.7 million as of September 30, 2017, and $10.8 million as of December 31, 2016. The amount of accrued interest and penalties payable related to unrecognized tax benefits was $1.2 million as of September 30, 2017, and $1.5 million as of December 31, 2016.

It is reasonably possible that the amount of unrecognized benefits with respect to certain of our unrecognized tax positions will increase or decrease within the next 12 months. These changes may be the result of settlement of ongoing audits, lapses of statutes of limitations or other regulatory developments. At this time, we estimate the amount of gross unrecognized tax positions may be reduced by up to approximately $3.5 million within the next 12 months primarily due to lapses of statutes of limitations and settlement of ongoing audits in various jurisdictions.

NOTE 54 – Long-term debt

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


	Sept. 30, 2017			Dec. 31, 2016			Mar. 31, 2019			Dec. 31, 2018

Unsecured floating rate term loan due quarterly through August 2018	$	28,400		$	52,100
VIE unsecured floating rate term loans due quarterly through December 2018	808			1,292
Unsecured floating rate term loan due quarterly through June 2020	110,000			140,000
Unsecured floating rate term loan due quarterly through September 2020	240,000			285,000
Borrowings under revolving credit agreement expiring June 2020	—			635,000
Unsecured notes bearing fixed rate interest at 5.125% due October 2019	600,000			600,000
Unsecured floating rate term loan due quarterly through June 2020¹							$	50,000		$	60,000
Unsecured floating rate term loan due quarterly through September 2020¹							150,000			165,000
Borrowings under revolving credit agreement expiring June 2023							20,000			50,000
Unsecured notes bearing fixed rate interest at 5.125% due October 2019¹							320,000			320,000
Unsecured notes bearing fixed rate interest at 5.125% due July 2020	600,000			600,000			600,000			600,000
Unsecured notes bearing fixed rate interest at 4.875% due September 2021	350,000			350,000			350,000			350,000
Unsecured notes bearing fixed rate interest at 6.375% due October 2023	650,000			650,000			650,000			650,000
Unsecured notes bearing fixed rate interest at 5.50% due September 2024	325,000			325,000			325,000			325,000
Unsecured notes bearing fixed rate interest at 7.75% due June 2027	200,000			200,000			200,000			200,000
Unsecured notes bearing fixed rate interest at 7.25% due September 2027	240,000			240,000			240,000			240,000
Total principal long-term debt	3,344,208			4,078,392			2,905,000			2,960,000
Debt issuance costs	(23,462		)	(27,615		)	(14,154		)	(15,458		)
Other (fair market value adjustments and discounts)	(4,934		)	(7,382		)
Unamortized premiums and discounts, net							649			(76		)
Total long-term debt	3,315,812			4,043,395			$	2,891,495		$	2,944,466
Less current portion of long-term debt maturities	280,646			646
Long-term debt, net of current portion	$	3,035,166		$	4,042,749

¹Principal payments due within the next 12 months are expected to be refinanced on a long-term basis. As such, all debt presented in the table above is classified as long-term on our March 31, 2019 Condensed Consolidated Balance Sheet.							¹Principal payments due within the next 12 months are expected to be refinanced on a long-term basis. As such, all debt presented in the table above is classified as long-term on our March 31, 2019 Condensed Consolidated Balance Sheet.

In connection with and prior to the completion of the spin-off, Cars.com borrowed an aggregate principal amount of approximately $675.0 million under a revolving credit facility agreement. The proceeds were used to make a tax-free distribution of $650.0 million from Cars.com to TEGNA. In the second quarter of 2017, TEGNA used $609.9 million of the tax-free distribution proceeds to fully pay down our then-outstanding revolving credit agreement borrowings plus accrued interest. As of ~~September 30, 2017,~~March 31, 2019, we had an unused borrowing capacity of ~~$1.5~~$1.47 billion under our revolving credit facility.

As a result of the sale of our majority ownership stake in CareerBuilder we received cash proceeds of $198.3 million, net of cash transferred of $36.6 million. Additionally, during the third quarter of 2017 and prior to the closing of the sale, CareerBuilder issued a final cash dividend to its selling shareholders, of which $25.8 million was retained by TEGNA.

On October 16, 2017, we used the net proceeds from the CareerBuilder sale, as well as the remaining cash distribution from Cars.com and other cash on hand to retire $280.0 million of principal of our unsecured notes due in October 2019 on an accelerated basis. This principal amount was classified as current debt at the end of the third quarter of 2017 due to our intention to retire it in October 2017.

NOTE 65 – Retirement plans

Our principal defined benefit pension plan is the TEGNA Retirement Plan (TRP). The disclosure table below includes the pension expenses of the TRP and the TEGNA Supplemental Retirement Plan (SERP). The total net pension obligations, including both current and non-current liabilities, as of ~~September 30, 2017,~~March 31, 2019, were ~~$199.0~~$145.5 million ($~~31.0~~7.9 million is recorded as a current obligation within accrued liabilities on the Condensed Consolidated Balance Sheet).

~~Our pension~~Pension costs, which primarily include costs for the qualified TRP ~~plan~~ and the ~~nonqualified~~non-qualified SERP, ~~plan,~~ are presented in the following table (in thousands):


	Quarter ended Sept. 30,						Nine months ended Sept. 30,						Quarter ended Mar. 31,
	2017			2016			2017			2016			2019			2018

Service cost-benefits earned during the period	$	218		$	204		$	654		$	612
Interest cost on benefit obligation	5,990			6,449			17,971			19,636			$	5,750		$	5,150
Expected return on plan assets	(6,580		)	(6,691		)	(19,741		)	(20,073		)	(6,575		)	(7,450		)
Amortization of prior service cost	159			165			476			505			25			50
Amortization of actuarial loss	2,081			1,846			6,242			5,740			1,500			1,250
Pension payment timing related charge													—			6,300
Expense for company-sponsored retirement plans	$	1,868		$	1,973		$	5,602		$	6,420		$	700		$	5,300

~~The~~Our TRP and SERP plans are frozen plans, and as such we no longer incur the service cost component of ~~our~~ pension expense is recorded within the operating expense line items Cost of revenue, Business units - Selling, general and administrative, and Corporate - General and administrative within the Consolidated Statements of Income.expense. All other components of ~~the~~our pension expense presented above are included within the Other non-operating items line item of the Consolidated Statements of Income.

During the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 we made ~~$10.9~~no cash contributions to the TRP and made $1.7 million in cash contributions to the TRP ~~and plan to make additional contributions of $1.7 million to the TRP~~ during the ~~fourth quarter of 2017. We did not make any contributions to the TRP in 2016.~~three months ended March 31, 2018. During the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2019 and ~~2016,~~2018, we made benefit payments to participants of the SERP of ~~$7.2~~$0.9 million and ~~$4.2~~$26.7 million, respectively.

~~NOTE 7 – Supplemental equity information~~

~~The following table summarizes equity account activity for~~ SERP payments during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2018 primarily related to lump sum payments made to certain former executives of the company. Based on actuarial projections, we expect to make additional cash payments of $10.7 million in 2019 on account of these benefit plans (comprised of payments of $6.9 million to SERP participants and ~~2016 (in thousands):~~

TEGNA Inc. Shareholders’ Equity Noncontrolling Interests Total Equity

Balance at Dec. 31, 2016 $ 2,271,418
$ 281,587
$ 2,553,005
Comprehensive income:
Net loss (29,881 ) (58,698 ) (88,579 )
Redeemable noncontrolling interests (income not available to shareholders) —
(2,797 ) (2,797 )
Other comprehensive income 34,241
5,819
40,060
Total comprehensive income (loss) 4,360
(55,676 ) (51,316 )
Dividends declared (60,121 ) —
(60,121 )
Stock-based compensation 14,189
—
14,189
Treasury shares acquired (8,453 ) —
(8,453 )
Spin-off of Cars.com (1,510,851 ) —
(1,510,851 )
Deconsolidation of CareerBuilder —
(225,911 ) (225,911 )
Other activity, including shares withheld for employee taxes (4,667 ) —
(4,667 )
Balance at Sept. 30, 2017 $ 705,875
$ —
$ 705,875

Balance at Dec. 31, 2015 $ 2,191,971
$ 264,773
$ 2,456,744
Comprehensive income:
Net income 303,578
40,178
343,756
Redeemable noncontrolling interests (income not available to shareholders) —
(3,628 ) (3,628 )
Other comprehensive (loss) (8,497 ) (3,737 ) (12,234 )
Total comprehensive income 295,081
32,813
327,894
Dividends declared (90,755 ) —
(90,755 )
Stock-based compensation 13,216
—
13,216
Treasury shares acquired (150,917 ) —
(150,917 )
Spin-off of Publishing businesses (39,456 ) —
(39,456 )
Other activity, including shares withheld for employee taxes (17,645 ) (2,923 ) (20,568 )
Balance at Sept. 30, 2016 $ 2,201,495
$ 294,663
$ 2,496,158
$3.8 million of contributions to the TRP).

In the first quarter of 2018, we incurred a pension payment timing related charge of $6.3 million as a result of lump sum SERP payments made to certain former executives. The 2018 charge was reclassified from accumulated other comprehensive income into net periodic benefit cost.

NOTE 6 – Leases

We adopted the FASB’s new lease accounting guidance on January 1, 2019. We determine if an arrangement contains a lease at the agreement’s inception. As permitted under the lease accounting standards adoption guidance, arrangements prior to the adoption date retained their previous determination as to whether or not an arrangement contained a lease. Arrangements entered into subsequent to the adoption date of the new guidance are analyzed to determine if a lease exists depending on whether there is an identified underlying asset that we control.

Our portfolio of leases primarily consists of leases for the use of corporate offices, station facilities, equipment and for antenna/transmitter sites. Our lease portfolio consists entirely of operating leases, with most of our leases having remaining terms ranging 1 to 15 years. Operating lease balances are included in our right-of-use assets for operating leases, other accrued liabilities and operating lease liabilities on our Condensed Consolidated Balance Sheets.

Lease liabilities were calculated as of the adoption date based on the present value of lease payments to be made over the remaining term of the lease (or commencement date for leases entered into after the adoption date over the term). Our lease agreements often contain lease and non-lease components (e.g., common-area maintenance or other executory costs). For all our leases, we include the non-lease payments in the calculation of our lease liabilities to the extent they are either fixed or included within the fixed base rental payments. Some of our leases include variable lease components (e.g., rent increases based on the consumer price index) and variable non-lease components, which are expensed as they are incurred. Such variable costs are not material. As our lease agreements do not include an implicit interest rate, we use our incremental borrowing rate in determining the present value of future payments, which was determined using our credit rating and information available as of the adoption date.

The operating lease right-of-use assets as of the adoption date were calculated based on the amount of the operating lease liability, less any lease incentives and adjusted for any deferred rent that existed as of the adoption date. Some of our lease agreements include options to renew for additional terms or provide us with the ability terminate the lease early. In determining the term of the lease, we considered whether or not we are reasonably certain to exercise these options. Lease expense for fixed lease payments is recognized on a straight-line basis over the lease term.

The following table presents lease related assets and liabilities on the Condensed Consolidated Balance Sheet as of March 31, 2019 (in thousands):



Assets
Right-of-use assets for operating leases	$	72,160

Liabilities
Operating lease liabilities (current)¹	6,497
Operating lease liabilities (non-current)	84,259
Total operating lease liabilities	$	90,756

(1) Current operating lease liabilities are included within the other accrued liabilities line item of the Condensed Consolidated Balance Sheet.

As of March 31, 2019, the weighted-average remaining lease term for our lease portfolio was 11.0 years and the weighted average discount rate used to calculate the present value of our lease liabilities was 5.4%.

For the three months ended March 31, 2019 and 2018, we recognized lease expense of $3.3 million and $4.4 million. In addition, we made cash payments for operating leases of $2.7 million during three months ended March 31, 2019, which are included in cash flows from operating activities on Statement of Cash Flows.

The table below reconciles future lease payments for each of the next five years and remaining years thereafter, in aggregate, to the lease liabilities recorded on the balance sheet (in thousands):



Future Period	Cash Payments

Remaining in 2019	$	7,017
2020	10,462
2021	11,965
2022	11,205
2023	10,462
Thereafter	73,719
Total lease payments	124,830
Less: amount of lease payments representing interest	34,074
Present value of lease liabilities	$	90,756

As of December 31, 2018, operating lease commitments under lessee arrangements were $10.4 million, $9.9 million, $11.7 million, $10.9 million, and $10.3 million for the years 2019 through 2023, respectively, and $73.9 million thereafter.

NOTE 7 – Accumulated other comprehensive loss

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

Retirement Plans Foreign Currency Translation (1) Other Total

Quarters Ended:
Balance at June 30, 2017 $ (124,632 ) $ (23,608 ) $ 2,364
$ (145,876 )
Other comprehensive income before reclassifications —
1,428
—
1,428
Amounts reclassified from AOCL 1,351
22,024
—
23,375
Other comprehensive income 1,351
23,452
—
24,803
Balance at Sept. 30, 2017 $ (123,281 ) $ (156 ) $ 2,364
$ (121,073 )

Balance at June 30, 2016 $ (113,854 ) $ (23,282 ) $ 1,400
$ (135,736 )
Other comprehensive loss before reclassifications —
(1,043 ) (3,743 ) (4,786 )
Amounts reclassified from AOCL 1,075
—
—
1,075
Other comprehensive income (loss) 1,075
(1,043 ) (3,743 ) (3,711 )
Balance at Sept. 30, 2016 $ (112,779 ) $ (24,325 ) $ (2,343 ) $ (139,447 )

Retirement Plans Foreign Currency Translation (1) Other Total

Nine Months Ended:
Balance at Dec. 31, 2016 $ (127,341 ) $ (28,560 ) $ (5,672 ) $ (161,573 )
Other comprehensive income (loss) before reclassifications —
6,380
(1,707 ) 4,673
Amounts reclassified from AOCL 4,060
22,024
9,743
35,827
Other comprehensive income 4,060
28,404
8,036
40,500
Balance at Sept. 30, 2017 $ (123,281 ) $ (156 ) $ 2,364
$ (121,073 )

Balance at Dec. 31, 2015 $ (116,496 ) $ (20,129 ) $ 5,674
$ (130,951 )
Other comprehensive loss before reclassifications —
(4,196 ) (8,017 ) (12,213 )
Amounts reclassified from AOCL 3,717
—
—
3,717
Other comprehensive income (loss) 3,717
(4,196 ) (8,017 ) (8,496 )
Balance at Sept. 30, 2016 $ (112,779 ) $ (24,325 ) $ (2,343 ) $ (139,447 )

(1) Our entire foreign currency translation adjustment is related to our CareerBuilder investment. As a result of deconsolidating the investment due to the sale of our majority ownership, we reclassified the translation adjustment from AOCL to the Consolidated Statement of Income as of the date of sale, July 31, 2017. Due to the noncontrolling stake that we retained in CareerBuilder, we will continue to record our ownership share of foreign currently translation adjustments through our equity method investment.



	Retirement Plans			Foreign Currency Translation		Total

Balance at Dec. 31, 2018	$	(136,893	)	$	382	$	(136,511	)
Other comprehensive income before reclassifications	—			10		10
Amounts reclassified from AOCL	1,069			—		1,069
Total other comprehensive income	1,069			10		1,079
Balance at Mar. 31, 2019	$	(135,824	)	$	392	$	(135,432	)

Balance at Dec. 31, 2017	$	(107,037	)	$	114	$	(106,923	)
Other comprehensive income before reclassifications	—			150		150
Amounts reclassified from AOCL	5,625			—		5,625
Other comprehensive income	5,625			150		5,775
Reclassification of stranded tax effects to retained earnings	(24,845		)	—		(24,845		)
Balance at Mar. 31, 2018	$	(126,257	)	$	264	$	(125,993	)

Reclassifications from AOCL to the ~~Statement~~consolidated Statements of Income are comprised of pension and other post-retirement ~~components and a loss on our available for sale investment.~~components. Pension and other post retirement reclassifications are related to the amortization of prior service costs, ~~and~~ amortization of actuarial losses. The loss on our available for sale investments represents an other than temporary impairment (OTTI) recognized on our investment in shares of common stock of Gannett Co., Inc. in the second quarter of 2017. The OTTI loss represents the amount of loss previously recorded to AOCL which was recognized as a non-operating expense on the Consolidated Statement of Income due to the fact that we did not expect the investment to fully recover the losses, ~~prior~~and pension payment timing related charge related to our ~~sale of it. We sold the entirety of our investment in Gannett Co., Inc. common stock in the third quarter of 2017.~~SERP plan. Amounts reclassified out of AOCL are summarized below (in thousands):


	Quarter ended Sept. 30,						Nine months ended Sept. 30,						Quarter ended Mar. 31,
	2017			2016			2017			2016			2019			2018

Amortization of prior service (credit) cost	$	16		$	(22	)	$	48		$	108
Amortization of prior service credit, net													$	(125	)	$	(100	)
Amortization of actuarial loss	2,185			1,785			6,555			5,977			1,550			1,350
Reclassification of CareerBuilder foreign currency translation	22,024			—			22,024			—
Reclassification of available for sale investment	—			—			9,743			—
Pension payment timing related charge													—			6,300
Total reclassifications, before tax	24,225			1,763			38,370			6,085			1,425			7,550
Income tax effect	(850		)	(688		)	(2,543		)	(2,368		)	(356		)	(1,925		)
Total reclassifications, net of tax	$	23,375		$	1,075		$	35,827		$	3,717		$	1,069		$	5,625

NOTE 8 – Earnings per share

Our earnings per share (basic and diluted) are presented below (in thousands of dollars, except per share amounts):

Quarter ended
Sept. 30,
Nine months ended Sept. 30,
2017 2016 2017 2016

Net income from continuing operations $ 50,754
$ 76,737
$ 144,682
$ 211,615
(Loss) income from discontinued operations, net of tax (10,803 ) 56,698
(233,261 ) 132,141
Net loss (income) attributable to noncontrolling interests from discontinued operations 2,806
(14,752 ) 58,698
(40,178 )
Net income (loss) attributable to TEGNA Inc. $ 42,757
$ 118,683
$ (29,881 ) $ 303,578

Weighted average number of common shares outstanding - basic 215,863
214,813
215,558
216,865
Effect of dilutive securities:

Restricted stock units 828
1,630
880
1,662
Performance share units 721
775
674
1,049
Stock options 683
881
715
935
Weighted average number of common shares outstanding - diluted 218,095
218,099
217,827
220,511

Earnings from continuing operations per share - basic $ 0.24
$ 0.36
$ 0.67
$ 0.98
(Loss) earnings from discontinued operations per share - basic (0.04 ) 0.19
(0.81 ) 0.42
Net income (loss) per share - basic $ 0.20
$ 0.55
$ (0.14 ) $ 1.40

Earnings from continuing operations per share - diluted $ 0.23
$ 0.35
$ 0.66
$ 0.96
(Loss) earnings from discontinued operations per share - diluted (0.04 ) 0.19
(0.80 ) 0.42
Net income (loss) per share - diluted $ 0.19
$ 0.54
$ (0.14 ) $ 1.38



	Quarter ended Mar. 31,
	2019		2018

Net income	$	73,979	$	55,187

Weighted average number of common shares outstanding - basic	216,709		216,276
Effect of dilutive securities:
Restricted stock units	179		177
Performance share units	256		216
Stock options	58		320
Weighted average number of common shares outstanding - diluted	217,202		216,989

Net income per share - basic	$	0.34	$	0.26
Net income per share - diluted	$	0.34	$	0.25

Our calculation of diluted earnings per share includes the impact of the assumed vesting of outstanding restricted stock units, performance share units, and the exercise of outstanding stock options based on the treasury stock method when dilutive. The diluted earnings per share amounts exclude the effects of approximately ~~96,000~~70,000 and ~~142,000~~87,000 stock awards for the three ~~and nine~~ months ended ~~September 30, 2017, respectively;~~March 31, 2019 and ~~192,000 and 292,000 for the three and nine months ended September 30, 2016,~~2018, respectively, as their inclusion would be accretive to earnings per share.

NOTE 9 – Fair value measurement

We measure and record in the accompanying condensed consolidated financial statements certain assets and liabilities at fair value. U.S. GAAP establishes a hierarchy for those instruments measured at fair value that distinguishes between market data (observable inputs) and our own assumptions (unobservable inputs). The hierarchy consists of three levels:

Level 1 - Quoted market prices in active markets for identical assets or liabilities;

Level 2 - Inputs other than Level 1 inputs that are either directly or indirectly observable; and

Level 3 - Unobservable inputs developed using our own estimates and assumptions, which reflect those that a market participant would use.

The following table summarizes our assets and liabilities measured at fair value in the accompanying Condensed Consolidated Balance Sheets as of September 30, 2017, and December 31, 2016 (in thousands):

Fair Value Measurements as of Sept. 30, 2017
Level 1 Level 2 Level 3 Total

Available for sale investment —
—
—
—
Total $ —
$ —
$ —
$ —

Deferred compensation investments valued using net asset value as a practical expedient:
Interest in registered investment companies $ 14,921
Fixed income fund 13,672
Total investments at fair value $ 28,593

Fair Value Measurements as of Dec. 31, 2016 (recast)
Level 1 Level 2 Level 3 Total

Available for sale investment 16,744
—
—
16,744
Total $ 16,744
$ —
$ —
$ 16,744

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 $ 40,459

~~Available for sale investment~~: Our investment previously consisted of shares of common stock of Gannett Co., Inc., which had been classified as a Level 1 asset as the shares are listed on the New York Stock Exchange. During the second quarter of 2017 we recorded an OTTI loss in the non-operating items line item of the Consolidated Statement of Income, and in the third quarter of 2017 we sold the investment in its entirety.

~~Interest in registered investment companies~~: These investments include one fund which invests in intermediate-term investment grade bonds and a fund which invests in equities listed predominantly on European and Asian exchanges. Funds are valued using the net asset values as quoted through publicly available pricing sources and investments are redeemable on request.

~~Fixed income fund investment: Valued using the net asset value provided monthly by the fund company and shares are generally redeemable on request. There are no unfunded commitments to these investments as of September 30, 2017.~~

~~In addition to the financial instruments listed in the table above, we~~We additionally hold other financial instruments, including cash and cash equivalents, receivables, accounts payable and debt. The carrying amounts for cash and cash equivalents, receivables and accounts payable approximated their fair values. The fair value of our total debt, based on the bid and ask quotes for the related debt (Level 2), totaled ~~$3.49~~$2.98 billion at ~~September 30, 2017,~~March 31, 2019, and ~~$4.19~~$2.96 billion at December 31, ~~2016.~~

The sale of the majority of our ownership in CareerBuilder resulted in a $342.9 million pre-tax loss recorded within discontinued operations (see Note 12). The loss includes a goodwill impairment charge of $332.9 million. The valuation used in

~~the Step 1 goodwill impairment test was based on the enterprise value determined in the purchase agreement (which represents a Level 3 input in the fair value hierarchy).~~

During the third quarter of 2017, a few of our television stations were impacted by hurricanes Harvey and Irma. In particular, Hurricane Harvey caused major damage to our Houston television station (KHOU), and as a result, we recognized $10.2 million in non-cash charges, writing off destroyed equipment and recording an impairment to the value of the building (fair value of the building was determined using a market based valuation). In addition, we incurred $8.4 million in cash expenses related to repairing the studio and office and providing for additional staffing and operational needs to keep the station operating during and immediately following these weather emergencies. Partially offsetting these expenses, we received initial insurance proceeds of $11.0 million ($5.0 million was received as of September 30, 2017 and $6.0 million was received in October 2017). The net expense impact from the hurricane of $7.6 million has been recorded in asset impairment and facility consolidation charges on our Consolidated Statements of Income.

~~We also recorded a non-cash impairment charge of $5.8 million in the second quarter of 2017 associated with the write-off of a note receivable from one of our equity method investments (see Note 3).~~

2018.

NOTE 10 – ~~Business segment~~Supplemental cash flow information

~~Our reportable segment determination is based~~The following table provides a reconciliation of cash and cash equivalents, as reported on our ~~management~~Condensed Consolidated Balance Sheets, to cash, cash equivalents, and ~~internal reporting structure, the nature~~restricted cash, as reported on our Condensed Consolidated Statement of ~~products and services offered by the segments, and the financial information that is evaluated regularly by our chief operating decision maker.~~Cash Flows (in thousands):



	Mar. 31, 2019		Dec. 31, 2018		Mar. 31, 2018		Dec. 31, 2017
Cash and cash equivalents	$	3,818	$	135,862	$	8,338	98,801
Restricted cash equivalents included in:
Prepaid expenses and other current assets	—		—		—		29,240
Cash, cash equivalents and restricted cash	$	3,818	$	135,862	$	8,338	$	128,041

~~Immediately following the spin-off~~Our restricted cash equivalents consisted of ~~Cars.com~~highly liquid investments that were held within a rabbi trust and ~~the sale of~~were used to pay our ~~majority stake in CareerBuilder, we began classifying our operations as one operating~~deferred compensation and reportable segment, Media, which consists of our 46 television stations operating in 38 markets, offering high-quality television programming and digital content. Also now included in the Media Segment is our DMS business which was previously reported in our Digital Segment.SERP obligations.

~~As a result of classifying the former Digital Segment’s historical financial results as discontinued operations there is no remaining activity in 2017 as shown in the tables below.~~ The ~~2016 activity shown below for our Digital Segment relates~~following table provides additional information about cash flows related to our former Cofactor business which did not meet the criteria for discontinued operation reporting when the business was sold in December 2016. The historical periods below have also been updated to restate the historical results of our DMS business within our Media business.interest and taxes (in thousands):



	Quarter ended Mar. 31,
	2019			2018
Supplemental cash flow information:
Cash refunds received from income taxes, net of payments	$	(397	)	$	(2,799	)
Cash paid for interest	$	27,412		$	30,128

~~Segment operating results are summarized as follows (in thousands):~~

Quarter ended Sept. 30, Nine months ended Sept. 30,
2017 2016 2017 2016
(recast) (recast)
Revenues:
Media $ 464,264
$ 517,021
$ 1,412,703
$ 1,449,202
Digital —
2,596
—
8,031
Total $ 464,264
$ 519,617
$ 1,412,703
$ 1,457,233

Operating Income (net of depreciation, amortization, asset impairment and facility consolidation charges):
Media ^(a)
$ 130,338
$ 219,766
$ 433,629
$ 568,163
Digital —
(17,832 ) —
(23,300 )
Corporate ^(a)
(13,477 ) (16,083 ) (43,577 ) (46,974 )
Total $ 116,861
$ 185,851
$ 390,052
$ 497,889

Depreciation, amortization, asset impairment and facility consolidation charges:
Media $ 27,538
$ 18,583
$ 67,864
$ 59,735
Digital —
15,565
—
16,297
Corporate 596
57
1,115
3,109
Total $ 28,134
$ 34,205
$ 68,979
$ 79,141

(a) In the first quarter of 2017, we adopted new accounting guidance that changed the classification of certain components of net periodic pension and other post-retirement benefit expense (post-retirement benefit expense). The service cost component of the post-retirement benefit expense will continue to be presented as an operating expense while all other components of post-retirement benefit expense will be presented as non-operating expense. The prior year period was adjusted to reflect the effects of applying the new guidance. This resulted in an increase to operating income in third quarter of 2017 and 2016 of $1.7 million and $1.8 million and for the nine months ended September 30, 2017 and 2016 of $4.9 million and $5.8 million, respectively. Net income, earnings per share, and retained earnings were not impacted by the new standard.

NOTE 11 – Other matters

Commitments, contingencies and other matters

In the third quarter of 2018, certain national media outlets reported the existence of a confidential investigation by the United States Department of Justice Antitrust Division (DOJ) into the local television advertising sales practices of station owners. We have received a Civil Investigative Demand (CID) in connection with the DOJ’s investigation. The investigation is ongoing.

Since the national media reports, numerous putative class action lawsuits were filed against owners of television stations (the Advertising Cases) in different jurisdictions. Plaintiffs are a class consisting of all persons and entities in the United States who paid for all or a portion of advertisement time on local TV provided by the defendants. The Advertising Cases assert antitrust and other claims and seek monetary damages, attorneys’ fees, costs and interest, as well as injunctions against the allegedly wrongful conduct.

These cases have been consolidated into a single proceeding in the United States District Court for the Northern District of Illinois, captioned Clay, Massey & Associates, P.C. v. Gray Television, Inc. et. al., filed on July 30, 2018. At the court’s direction, plaintiffs filed an amended complaint on April 3, 2019, that superseded the original complaints. Although we were named as a defendant in sixteen of the original complaints, the amended complaint did not name TEGNA as a defendant. We could still be named as a defendant, however, in this or other related suits.

We, along with a number of our subsidiaries, also are defendants in other judicial and administrative proceedings involving matters incidental to our business. We do not believe that any material liability will be imposed as a result of ~~these~~any of the foregoing matters.

~~Voluntary Retirement Program~~

During the first quarter of 2016, we initiated a Voluntary Retirement Program (VRP) at our Media Segment. Under the VRP, Media employees meeting certain eligibility requirements were offered buyout payments in exchange for voluntarily retiring. Eligible non-union employees had until April 7, 2016, to retire under the plan. In 2016, based on acceptances received, we recorded $16.0 million of severance expense. Upon separation, employees accepting the VRP received salary continuation payments primarily based on years of service, the majority of which occurred evenly over the 12-month period following separation date. As of September 30, 2017, we had less than $0.4 million of VRP buyout obligation remaining.

FCC Broadcast Spectrum Program

~~Congress authorized~~In April 2017, the ~~Federal Communications Commission (FCC) to conduct~~FCC announced the completion of a voluntary incentive auction to reallocate certain spectrum currently occupied by television broadcast stations to mobile wireless broadband services, along with a related “repacking” of the television spectrum for remaining television stations. The repacking requires that certain television stations move to different channels, and some stations will have smaller service areas and/or experience additional interference. Congress announced the results of the auction, including a list of the stations to be repacked, in April 2017. None of our stations will relinquish any spectrum rights as a result of the auction, and accordingly we will not receive any incentive auction proceeds. The FCC has, however, notified us that 13 of our stations will be repacked to new channels. ~~The~~In general, television stations moving channels may have smaller service areas and/or experience additional interference; however, based on our transition planning to date, we do not expect the repacking ~~process is scheduled~~ to ~~occur over a 39-month period, divided into ten phases. Our stations~~ have ~~been assigned to phases two through nine, and a majority of~~any material effect on the geographic areas or populations served by our ~~capital expenditures in connection with the repack will occur in 2018 and 2019.~~

~~We are eligible to seek reimbursement for costs associated with implementing changes to our facilities required by the repack.~~repacked full-power stations’ over-the-air signals. The legislation authorizing the incentive auction and repacking established a $1.75 billion fund for reimbursement of costs incurred by stations required to change channels in the repacking. ~~The FCC has reported that~~Subsequent legislation enacted on March 23, 2018, appropriated an additional $1 billion for the ~~aggregate cost estimated by~~repacking fund, of which up to $750 million may be made available to repacked full power and Class A television stations and multichannel video programming distributors. Other funds are earmarked to ~~complete the repack~~assist affected low power television stations, television translator stations, and FM radio stations, as well for consumer education efforts. Some of our

television translator stations have been or will be ~~almost $1.9 billion. In October 2017,~~displaced as a result of the ~~FCC announced that it had made~~repacking, and thus are eligible under the new repacking funds appropriation to seek reimbursement for costs incurred as a result of such displacement (subject to the translator locating an ~~approximately $1 billion allocation from the fund~~available alternative channel, which is not guaranteed).

The repacking process is scheduled to ~~repacked~~occur over a 39-month period, divided into ten phases. Our full power stations have been assigned to ~~allow those stations to begin to be reimbursed for expenses incurred~~phases two through nine, and a majority of our remaining capital expenditures in connection with the ~~construction~~repack will occur in 2019. To date, we have incurred approximately $19.8 million in capital expenditures for the spectrum repack project (of which $2.1 million was paid during the first three months of ~~facilities~~2019). We have received FCC reimbursements of approximately $11.5 million through March 31, 2019. The reimbursements were recorded as a contra operating expense within our Spectrum repacking reimbursements and other line item on ~~reassigned channels. This allocation represents~~our Consolidated Statement of Income and reported as an investing inflow on the Consolidated Statement of Cash Flows.

Each repacked full power commercial television station, including each of our 13 repacked stations, has been allocated a reimbursement amount equal to approximately ~~52%~~92.5% of the ~~total~~station’s estimated ~~demand for repack funds.~~repacking costs, as verified by the FCC’s fund administrator. Although we expect the FCC to make additional allocations from the fund, it is not ~~clear at this time whether~~guaranteed that the FCC ~~ultimately~~ will ~~receive from Congress the additional funds~~approve all reimbursement requests necessary to completely reimburse each repacked station for all amounts incurred in connection with the repack. ~~Beyond the potential for not being reimbursed for all amounts we incur, it is still too early to predict the ultimate impact of the incentive auction and repacking upon our business.~~

~~As noted above, while we did not sell any of our spectrum~~Reduction in the auction, we did enter into a channel share agreement with another broadcaster that sold spectrum in the auction. Pursuant to the terms of our channel share agreement we received $32.6 million in cash proceeds duringForce Programs

During the third quarter of ~~2017. These proceeds~~2018, we initiated reduction in force programs at our corporate headquarters and our Digital Marketing Services (DMS) business unit, which resulted in a total severance charge of $7.3 million which was recorded within the Cost of Revenues, Business Units - Selling and Administrative, and Corporate - General and Administrative Costs within the Statement of Income. The corporate headquarters reductions were ~~deferred~~part of our ongoing consolidations of our corporate structure following our strategic transformation into a pure play broadcast company. The reduction in force at our DMS unit is a result of a rebranding of our service offerings and unification of our sales strategy to better serve our customers. A majority of the employees impacted by these reductions will receive lump sum severance payments. As of the end of Q1 2019, we have a remaining accrual of approximately $4.1 million related to these actions, substantially all of which will be amortized on a straight-line basis as other revenue over a 20 year period. The $32.6 million cash proceeds were reflected as cash flow from operating activities on our Condensed Consolidated Statements of Cash Flow.

~~NOTE 12 – Discontinued operations~~

~~Cars.com spin-off~~

On May 31, 2017, we completed the previously announced spin-off of Cars.com creating two publicly traded companies: TEGNA, an innovative media company with the largest broadcast group among major network affiliates in the top 25 markets; and Cars.com, a leading digital automotive marketplace. The spin-off was effected through a pro rata distribution of all outstanding common shares of Cars.com to TEGNA stockholders of record at the close of business on May 18, 2017 (the “Record Date”). Stockholders retained their TEGNA shares and received one share of Cars.com for every three shares of TEGNA stock they owned on the Record Date. Cars.com began “regular way” trading on the New York Stock Exchange on June 1, 2017 under the symbol “CARS”. In connection with the Cars.com spin-off, we received a one time tax-free cash distribution from Cars.com of $650.0 million. In the second quarter of 2017, we used $609.9 million of the tax-free distribution proceeds to fully pay down outstanding revolving credit agreement borrowings. In October 2017, we usedpaid throughout the remainder of the ~~proceeds to pay down a portion of the outstanding principal on unsecured notes due in October 2019 (see Note 5).~~year.

Acquisitions

~~Separation Agreement~~

We entered into a separation agreement with Cars.com which sets forth, among other things, the identified assets transferred, the liabilities assumed and the contracts assigned to each of TEGNA and Cars.com as part of the separation and the conditions related to the distribution of Cars.com outstanding stock to TEGNA stockholders.

~~Transition Services Agreement~~

~~We entered into a transition services agreement with Cars.com prior to the distribution pursuant to which~~On March 20, 2019, we and our subsidiaries will provide certain services to Cars.com on an interim and transitional basis, not to exceed 24 months. The services to be provided include certain tax, human resource and risk management consulting services, and certain other short term services to complete a limited number of ongoing analysis projects. The agreed upon charges for such services are generally intended to allow us to recover all costs and expenses of providing such services, and such charges are not expected to be material to either us or Cars.com.

The transition services agreement will terminate on the expiration of the term of the last service provided under it, with a minimum service period of 60 days and a maximum service period of 24 months, with most services expected to last for less than the maximum service period following the distribution date. Cars.com generally can terminate a particular service prior to the scheduled expiration date, subject generally to the minimum service period and a minimum notice period of 45 days.

~~Tax Matters Agreement~~

~~Prior to the distribution,~~announced that we entered into a tax matters agreement that governs the parties’ respective rights, responsibilities and obligations with respect to taxes (including taxes arising in the ordinary course of business and taxes, if any, incurred as a result of any failure of the distribution and certain related transactions to qualify as tax-free for U.S. federal income tax purposes), tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings and assistance and cooperation in respect of tax matters.

~~Employee Matters Agreement~~

~~We entered into an employee matters~~definitive agreement with ~~Cars.com prior~~Nexstar Media Group to acquire 11 local television stations in eight markets, including eight Big Four affiliates for $740 million in cash. These stations are expected to bring additional geographic diversity to our existing station portfolio and add four additional key markets to our strong political footprint as the ~~distribution to allocate liabilities and responsibilities relating to employment matters, employee compensation and benefit plans and programs and other related matters.~~2020 presidential election gets underway. The ~~employee matters agreement governs certain compensation and employee benefit obligations with respect to the current and former employees and non-employee directors~~acquisition of ~~each company.~~

The employee matters agreement provides that, unless otherwise specified, Cars.com will be responsible for liabilities associated with employees who will be employed by Cars.com following the spin-off and former employees whose last employment was with the Cars.com businesses, and we will be responsible for all other current and former TEGNA employees. Cars.com will retain sponsorship of 401(k) retirement plans, deferred compensation plans and other incentive plans maintained for the exclusive benefit of Cars.com employees as well as various welfare plans applicable to the Cars.com employees.

~~CareerBuilder Sale~~

On July 31, 2017, we sold our majority ownership interest in CareerBuilder to an investor group led by investment funds managed by affiliates of Apollo Global Management, LLC, a leading global alternative investment manager, and the Ontario Teachers’ Pension Plan Board. Our share of the pre-tax net cash proceeds from the sale was $198.3 million. These net proceeds were used in October 2017 to pay down existing debt (see Note 5). Additionally, during the third quarter of 2017 and prior tothese stations is contingent on the closing of the ~~sale, CareerBuilder issued a final dividend~~Nexstar Media - Tribune merger, which is expected to ~~its selling shareholders,~~take place in the late third or early fourth quarter of ~~which $25.8 million was retained by TEGNA. As part~~2019, and other customary closing conditions. We expect to finance the transaction through use of available cash and borrowing under our existing credit facility.

In addition, on May 6, 2019, we also announced that we entered into definitive agreements to acquire the remaining interests that we do not currently own of the ~~agreement,~~multicast channels Justice Network and Quest, two fast growing networks that leverage the increasing numbers of over-the-air viewers, for approximately $77 million in cash. We currently own approximately 15% of the multicast channels, and we ~~remain an ongoing partner in CareerBuilder, reducing~~account for our 53% controlling interest to approximately 17% interest (or approximately 12% on a fully-diluted basis) and two seats on CareerBuilder’s 10 person board. As a result, subsequent to the sale, CareerBuilder is no longer consolidated within our reported operating results. Our remaining ownership interest ~~will be accounted for~~ as an equity method investment. ~~Subsequent to~~Following the ~~date of sale we recorded $0.5 million of equity earnings during the remainder~~closing of the ~~third quarter of 2017 from our remaining interest in CareerBuilder.~~

~~Financial Statement Presentation of Digital Segment~~

~~As a result~~acquisition, we will consolidate all of the ~~Cars.com and CareerBuilder transactions described above, the operating results and~~multicast channels financial position of our former Digital Segment have been included in discontinued operations in the Condensed Consolidated Balance Sheet and Consolidated Statements of Income for all applicable periods presented. The results of discontinued operations for the nine months ended September 2017 include a $342.9 million pre-tax loss related to the sale of CareerBuilder (after noncontrolling interest, $271.7 million of the pre-tax loss is attributable to TEGNA). The pre-tax loss includes a goodwill impairment charge of $332.9 million and costs to sell the business of $10.9 million. Fair value used for the pre-tax loss was based on the enterprise value of CareerBuilder as determined in the definitive purchase agreement.results.

~~The carrying value of the assets and liabilities of our former Digital Segment’s discontinued operations as of December 31, 2016 were as follows (in thousands):~~

Dec. 31, 2016

ASSETS
Cash and cash equivalents $ 61,041
Accounts receivable, net 214,171
Property and equipment, net 74,695
Goodwill 1,488,112
Other Intangibles, net 1,718,592
Other assets 71,193
Total assets $ 3,627,804

LIABILITIES
Accounts payable $ 166,853
Deferred revenue 110,071
Deferred tax liability 280,264
Other liabilities 66,969
Total liabilities $ 624,157

The financial results of discontinued operations in the third quarter and the nine months ended September 30, 2017 and 2016 are presented as a loss (income) from discontinued operations, net of tax, on our Consolidated Statements of Income. The following table presents the financial results of discontinued operations (in thousands):

Quarter ended
Sept. 30,

Nine months ended
Sept. 30,
2017 (1) 2016 2017 (1) 2016 (2)

Operating revenues $ 54,874
$ 340,649
$ 647,021
$ 999,929

Cost of revenue and SG&A expenses 60,301
228,152
522,287
708,815
Depreciation —
9,421
19,569
24,843
Amortization —
23,385
40,300
68,159
Loss on sale of CareerBuilder (1,872 ) —
342,900
—
Total operating expenses 58,429
260,958
925,056
801,817

Total operating (loss) income (3,555 ) 79,691
(278,035 ) 198,112

Non-operating income (expense) 647
(3,304 ) (1,078 ) (8,989 )

(Loss) income from discontinued operations, before income taxes (2,908 ) 76,387
(279,113 ) 189,123
Provision for income taxes (7,895 ) (19,689 ) 45,852
(56,982 )
(Loss) income from discontinued operations, net of tax $ (10,803 ) $ 56,698
$ (233,261 ) $ 132,141

(1) The quarter and nine months ended September 30, 2017 include CareerBuilder’s operations through the date of sale on July 31, 2017. Cars.com operations are included in the nine months ended September 30, 2017 through the date of spin-off on May 31, 2017.
(2) The nine months ended September 30, 2016 include approximately $7.5 million of net loss from discontinued operations related to the operations of our former Sightline business through the date of sale on March 18, 2016.

In our Consolidated Statements of Cash Flows, the cash flows from discontinued operations are not separately classified. As such, major categories of discontinued operation cash flows for the nine months ended September 30, 2017 and 2016 are presented below (in thousands):

Nine months ended Sept. 30,
2017 (1) 2016

Depreciation $ 19,569
$ 24,843
Amortization 40,300
68,159
Capital expenditures 37,441
38,825
Payments for acquisitions, net of cash acquired $ —
$ 196,750

(1) The nine months ended September 30, 2017 includes Cars.com through the spin-off date of May 31, 2017 and CareerBuilder’s operations through the date of sale on July 31, 2017.

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

Company Overview

We are an innovative media company ~~that serves~~serving the greater good of our ~~communities.~~communities - through empowering stories, impactful investigations and extensive marketing services. With 4649 television stations and two radio stations in 3841 U.S. markets, we are the largest owner of ~~top~~big four network affiliates in the top 25 markets, reaching approximately one-third of all television households nationwide. Each television station also has a robust digital presence across online, mobile and social platforms, reaching consumers whenever, wherever they are. Each month, we reach 50 million ~~adults~~consumers on-air and approximately 35 million across our digital platforms. We have been consistently honored with the industry’s top awards, including Edward R. Murrow, George Polk, Alfred I. DuPont and Emmy Awards. WeThrough TEGNA Marketing Solutions (TMS), our integrated sales and back-end fulfillment operations, we deliver results for advertisers ~~through unparalleled~~across television, email, social, and ~~innovative solutions including our~~ Over the Top ~~(“OTT”) local~~(OTT) platforms, including Premion, our OTT advertising network, Premion, centralized marketing resource, Hatch; and our digital marketing services (DMS) business, a one-stop shop for local businesses to connect with consumers through digital marketing. Across platforms, we tell empowering stories, conduct impactful investigations and deliver innovative marketing solutions. network.

We continue to make 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. For example, we recently launched VERIFY news, a fact-checking segment across platforms, and HeartThreads, a new national digital content vertical. Additionally, in September 2017 we premiered our TEGNA-owned daily live syndicated program “Daily Blast LIVE,” which airs on 36 TEGNA stations and nationally on Facebook and YouTube. Also in September, we launched a daily talk show, “Sister Circle,” produced out of WATL in Atlanta, which airs in 12 TEGNA markets and nationally live on TV One, reaching 60% of U.S. television households. Finally, our KXTV station in Sacramento partnered with Cheddar network to launch “Cheddar Local,” which provides KXTV with local business and technology segments relevant to the Sacramento community.

~~After completing the strategic actions discussed below, we now~~ have one operating and reportable segment. The primary sources of our revenues are: 1) advertising & marketing services revenues, which include local and national non-political television advertising, ~~as well as DMS~~digital marketing services (including Premion), and advertising on the stations’ websites and tablet and mobile products; 2) 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; 3) political advertising revenues, which are driven by ~~elections~~even year election cycles at the local and ~~peak in even years~~national level (e.g. ~~2016, 2014)~~2020, 2018) and particularly in the second half of those years; ~~3) subscription revenues, representing fees primarily paid by satellite and cable operators and telecommunications companies to carry our television signals on their systems and OTT revenues;~~ and 4) other services, such as production of programming ~~from third parties~~ and ~~production of~~ advertising material.

As illustrated in the table below, our business continues to evolve toward growing stable and profitable revenue streams. As a result of growing importance of even-year political advertising on our results, management increasingly looks at revenue trends over two-year periods. We expect high margin subscription and political revenues will account for approximately half of our total two-year revenue beginning in 2019/2020, and a larger percentage on a rolling two-year cycle thereafter.



	Two Years Ending Mar. 31,
	2019				2018

Advertising & Marketing Services	54	%			60	%
Subscription	39	%	}	45%	35	%	}	39%
Political	6	%	}	45%	4	%	}	39%
Other	1	%			1	%
Total revenues	100	%			100	%

Our balance sheet combined with these strong, accelerating and dependable cash flows provide us the ability to pursue the path that offers the most attractive return on capital at any given point in time. We have a broad set of capital deployment opportunities, including retiring debt to create additional future flexibility; investing in original, relevant and engaging content; investing in growth businesses like our OTT advertising service Premion; and pursuing value accretive acquisition-related growth. We will continue to review all opportunities in a disciplined manner, both strategically and financially. In the near-term, our priorities continue to be maintaining a strong balance sheet, enabling organic growth, acquiring attractively priced strategic assets and returning capital to shareholders in the form of dividends and opportunistic share repurchases.

On January 2, 2019, we acquired, for $108.9 million in cash, stations in Toledo, OH and Midland-Odessa, TX.

WTOL, the CBS affiliate in Toledo and KWES, the NBC affiliate in Midland-Odessa are recognized as strong local media brands

well-positioned in key markets that further enhance our portfolio of Big 4 affiliates. KWES further deepens our presence in the

high-growth state of Texas where we now own 11 stations, covering 87 percent of television households in the state.

On March 20, 2019, we announced that we entered into a definitive agreement with Nexstar Media Group to acquire 11 local television stations in eight markets, including eight Big Four affiliates for $740 million in cash. These stations are expected to bring additional geographic diversity to our existing station portfolio and add four additional key markets to our strong political footprint as the 2020 presidential election gets underway. We expect the acquisition will be EPS accretive within a year after close and immediately accretive to free cash flow (see definition non-GAAP measure within Presentation of Non-GAAP information). The acquisition of these stations is contingent on the closing of the Nexstar Media - Tribune merger, which is expected to take place in the late third or early fourth quarter of 2019, and other customary closing conditions. We expect to finance the transaction through use of available cash and borrowing under our existing credit facility.

In addition, on May 6, 2019, we also announced that we entered into definitive agreements to acquire the remaining interests that we do not currently own of the multicast channels Justice Network and Quest, two fast growing networks that leverage the increasing numbers of over-the-air viewers, for approximately $77 million in cash.

Consolidated Results from Operations

The following discussion is a comparison of our consolidated results on a GAAP basis. The year-to-year comparison of financial results is not necessarily indicative of future results. In addition, see the section on page 21 titled ‘Results from Operations - Non-GAAP Information’ for additional tables presenting information which supplements our financial information provided on a GAAP basis. Our consolidated results of operations on a GAAP basis were as follows (in thousands, except per share amounts):



	Quarter ended Mar. 31,
	2019			2018			Change

Revenues	$	516,753		$	502,090		3	%

Operating expenses:
Cost of revenues, exclusive of depreciation	281,311			258,493			9	%
Business units - Selling, general and administrative expenses, exclusive of depreciation	71,465			73,621			(3	%)
Corporate - General and administrative expenses, exclusive of depreciation	14,735			12,708			16	%
Depreciation	14,917			13,471			11	%
Amortization of intangible assets	8,689			6,782			28	%
Spectrum repacking reimbursements and other	(7,013		)	—			***
Total operating expenses	$	384,104		$	365,075		5	%

Total operating income	$	132,649		$	137,015		(3	%)

Non-operating expenses	(35,896		)	(61,443		)	(42	%)
Provision for income taxes	22,774			20,385			12	%
Net income	$	73,979		$	55,187		34	%

Earnings per share - basic	$	0.34		$	0.26		31	%
Earnings per share - diluted	$	0.34		$	0.25		36	%

*** Not meaningful

Revenues

Our Advertising and Marketing Services (AMS) category includes all sources of our traditional television advertising and digital revenues including Premion and other digital advertising and marketing revenues across our platforms. Our Subscription revenue category includes revenue earned from cable and satellite providers for the right to carry our signals and the distribution of TEGNA stations on OTT streaming services.

The following table summarizes the year-over-year changes in our revenue categories (in thousands):



	Quarter ended Mar. 31,
	2019		2018		Change

Advertising & Marketing Services	$	264,402	$	282,939	(7	%)
Subscription	241,575		205,556		18	%
Political	2,704		7,606		(64	%)
Other	8,072		5,989		35	%
Total revenues	$	516,753	$	502,090	3	%

Total revenues increased $14.7 million, or 3%, in the first quarter of 2019 compared to the same period in 2018. This net increase was primarily due to an increase in subscription revenue of $36.0 million, or 18%, in the first quarter of 2019, primarily due to annual rate increases under existing retransmission agreements. This increase was partially offset by a decrease in AMS revenue of $18.5 million, or 7%, in the first quarter of 2019. This decline was attributed to the absence of the Olympics and less Super Bowl advertising which aired on our 13 CBS stations in 2019 compared to 17 NBC stations last year (we estimate the incremental sports events combined for approximately $16.0 million higher revenue in 2018) and also due to a softening of demand for traditional television advertising. In addition, we had a $4.9 million, or 64%, decrease in political advertising. These decreases were partially offset by an increase in digital revenue (primarily from Premion) and incremental revenue from the recent station acquisitions (KFMB, KWES, and WTOL).

Cost of Revenues

Cost of revenues increased $22.8 million, or 9%, in the first quarter of 2019 compared to the same period in 2018. The increase was primarily due to a $21.1 million increase in programming costs (due to the growth in subscription revenues and recent acquisitions).

Business Units - Selling, General and Administrative Expenses

Business unit selling, general and administrative expenses decreased $2.2 million, or 3%, in the first quarter of 2019 compared to the same period in 2018. The decrease was primarily due to the absence of sale expenses associated with incremental Olympic, Super Bowl, and political related revenue in 2018. These declines were partially offset by costs associated with the recent acquisitions.

Corporate General and Administrative Expenses

Our corporate costs are separated from our business expenses and are recorded as general and administrative expenses in our Consolidated ~~Income Statement. These costs include activities that are not directly attributable or allocable to our media business operations.~~Statement of Income. This category primarily consists of broad corporate management functions including legal, human resources, and finance, as well as activities and costs not directly attributable to the operations of our media business.

~~Strategic Actions~~

On May 31, 2017, we completed the previously announced spin-off of Cars.com. The spin-off was achieved through a pro rata distribution of all outstanding common shares of Cars.com to TEGNA stockholders of record at the close of business on May 18, 2017 (the “Record Date”). Stockholders retained their TEGNA shares and received one share of Cars.com for every three shares of TEGNA stock they owned on the Record Date. Cars.com began “regular way” trading on the New York Stock Exchange on June 1, 2017 under the symbol “CARS”. In connection with the Cars.com spin-off we received a one time cash distribution from Cars.com of $650.0 million.

On July 31, 2017, we completed the sale of our majority ownership interest in CareerBuilder to an investor group led by investments funds managed by affiliates of Apollo Global Management, LLC, a leading global alternative investment manager,

and the Ontario Teachers’ Pension Plan Board. Our share of the pre-tax net cash proceeds from the sale was $198.3 million. These net proceeds were used in October 2017 to pay down existing debt (see Note 5). Additionally, prior to the sale, CareerBuilder issued a final dividend to its selling shareholders, $25.8 million of which was retained by TEGNA.

As part of the sale agreement, we remain an ongoing partner in CareerBuilder, reducing our 53% controlling interest to approximately 17% equity interest (or approximately 12% on a fully-diluted basis) and two seats on CareerBuilder’s 10 member board. As a result, CareerBuilder is no longer consolidated within our reported operating results. Our remaining ownership interest is accounted for as an equity method investment.

~~Consolidated Results from Operations~~

The following discussion is a period-to-period comparison of our consolidated results from continuing operations on a GAAP basis. On May 31, 2017, we completed the spin-off of Cars.com and on July 31, 2017, we completed the sale of our majority ownership interest in CareerBuilder. Results for Cars.com and CareerBuilder are now reflected as Discontinued Operations in our Consolidated Statements of Income for all applicable periods presented. As a result, we will report one segment going forward which will include the results for Media and a remaining DMS contract that was previously reported in the Digital Segment. The historical financial results also include our former Cofactor business through the date of its sale in December 2016.

~~The period-to-period comparison of financial results is not necessarily indicative of future results.~~ In addition, see the section on page 26 titled ‘Results from Operations - Non-GAAP Information’ for additional tables presenting information which supplements our financial information provided on a GAAP basis. Our consolidated results of continuing operations on a GAAP basis were as follows (in thousands, except per share amounts):

Quarter ended Sept. 30, Nine months ended Sept. 30,
2017 2016 Change 2017 2016 Change
(recast) (recast)
Revenues $ 464,264
$ 519,617
(11 %) $ 1,412,703
$ 1,457,233
(3 %)

Operating expenses:

Cost of revenues, exclusive of depreciation 235,474
200,495
17 % 696,565
590,058
18 %
Business units - selling, general and administrative expenses, exclusive of depreciation 70,914
83,039
(15 %) 214,645
246,280
(13 %)
Corporate - General and administrative expenses, exclusive of depreciation 12,881
16,027
(20 %) 42,462
43,865
(3 %)
Depreciation 15,186
13,212
15 % 41,721
42,653
(2 %)
Amortization of intangible assets 5,395
5,775
(7 %) 16,172
17,542
(8 %)
Asset impairment and facility consolidation charges 7,553
15,218
(50 %) 11,086
18,946
(41 %)
Total operating expenses $ 347,403
$ 333,766
4 % $ 1,022,651
$ 959,344
7 %

Total operating income $ 116,861

$ 185,851
(37 %) $ 390,052
$ 497,889
(22 %)

Non-operating expense (54,660 ) (70,673 ) (23 %) (190,515 ) (194,236 ) (2 %)
Provision for income taxes 11,447
38,441
(70 %) 54,855
92,038
(40 %)
Net income from continuing operations $ 50,754
$ 76,737
(34 %) $ 144,682
$ 211,615
(32 %)

Earnings from continuing operations per share - basic $ 0.24
$ 0.36
(33 %) $ 0.67
$ 0.98
(32 %)
Earnings from continuing operations per share - diluted $ 0.23
$ 0.35
(34 %) $ 0.66
$ 0.96
(31 %)

~~Revenues~~

During the second quarter of 2017, we changed the way we present certain revenues, which we now call Advertising and Marketing Services (AMS), to better reflect our sales transformation strategy that focuses on customer needs versus specific products. This category includes all sources of our traditional and digital revenues including Premion, DMS and other digital advertising and marketing revenues across our platforms.

~~Also, the “Retransmission” revenue category was renamed “Subscription” to better reflect changes in that revenue stream, including the distribution of TEGNA stations on OTT streaming services.~~

As a result of these changes, revenues are grouped into the following categories: Advertising & Marketing Services, Political, Subscription, Other, and our former business unit Cofactor (sold in December 2016).

~~The following table summarizes the year-over-year changes in these select revenue categories (in thousands):~~

Quarter ended Sept. 30, Nine months ended Sept. 30,
2017 2016 Change 2017 2016 Change
Advertising & Marketing Services ^(a)
$ 277,817
$ 330,589
(16 %) $ 843,175
$ 934,977
(10 %)
Political 3,783
38,060
(90 %) 13,387
64,050
(79 %)
Subscription 177,692
143,676
24 % 540,344
436,292
24 %
Other 4,972
4,696
6 % 15,797
13,883
14 %
Cofactor —
2,596
***
—
8,031
***
Total $ 464,264
$ 519,617
(11 %) $ 1,412,703
$ 1,457,233
(3 %)

(a) Includes traditional television advertising, digital advertising as well as revenue from our DMS business.

Revenues decreased $55.4 million, or 11%, in the third quarter of 2017 compared to the same period in 2016. This net decrease was primarily due to a decline in AMS revenue of $52.8 million, or 16%, in the third quarter of 2017. This decline was primarily due to the absence of Olympic revenue in 2017 as compared to $57.3 million in 2016 and lower DMS revenue due to the conclusion of a transition services agreement with Gannett. Partially offsetting the overall AMS decline was an increase in digital revenue, including Premion revenue. Political revenue was down by $34.3 million, due to an expected decrease reflecting the absence of 2016 politically related advertising spending. Partially offsetting these decreases was an increase in subscription revenue of $34.0 million, or 24%, due to the recent renewal of certain retransmission agreements as well as annual rate increases under other existing retransmission agreements.

In the first nine months of 2017, operating revenue decreased $44.5 million, or 3%, compared to the same period in 2016. The net decrease was due to a net decline in AMS revenue of $91.8 million, or 10%, for the first nine months of 2017. The third quarter decline in AMS revenue, described above, drove most of the year-to-date decline. In addition we had lower Super Bowl revenue due to the shift in coverage from our larger CBS station footprint to smaller FOX station footprint (which impacted 2017 results by $9.1 million). These AMS declines were partially offset by an increase in digital revenue, including our Premion revenue. Additionally, political revenue was down $50.7 million for the nine months ended September 30, 2017 due to an expected decrease reflecting the absence of 2016 Presidential election year political spending. Partially offsetting these decreases was an increase in subscription revenue of $104.1 million, or 24%,beginning in the first ~~nine months~~quarter of ~~2017~~2019, we now record transaction costs within our Corporate operating expense due to ~~the recent renewal of certain retransmission agreements~~their recurring nature as ~~well~~we have recently become more acquisitive with regards to acquisitions. Previously, transaction costs were recorded as ~~annual rate increases under~~ other ~~existing retransmission agreements.~~

~~Cost of Revenues~~

Cost of revenues increased $35.0 million, or 17%, in the third quarter of 2017 compared to the same period in 2016. The increase was primarily due to a $42.6 million increase in programming costs (primarily driven by 11 of our NBC stations paying reverse compensation payments for first time in 2017). This increase was partially offset by a decline in DMS costs of $7.4 million driven by the conclusion of the transition service agreement with Gannett.

In the first nine months of 2017, cost of revenues increased $106.5 million, or 18%, compared to the same period in 2016. The increase was primarily due to a $135.1 million increase in programming costs (primarily driven by 11 of our NBC stations paying reverse compensation payments for first time in 2017). This increase was partially offset by the absence of $10.8 million of expenses associated with our 2016 voluntary retirement program and a decline in DMS costs of $11.8 million associated with the conclusion of the transition service agreement with Gannett.

~~Business Units - Selling, General and Administrative Expenses~~

Business unit selling, general and administrative expenses decreased $12.1 million, or 15%, in the third quarter of 2017 compared to the same period in 2016. The decrease was primarily the result of a $6.0 million decline in DMS selling and advertising expense related to the transition service agreement conclusion. Also contributing to the decline was the absence of $2.6 million of Cofactor expenses, due to its disposition in December 2016.

In the first nine months of 2017, business unit selling, general and administrative expenses decreased $31.6 million, or 13%, compared to the same period in 2016. This decrease was due to a $14.7 million decline in DMS selling and advertising expenses, the absence of $6.5 million of expenses associated with Cofactor, and the absence of $4.0 million of expenses associated with our 2016 voluntary retirement program. These decreases were partially offset by $1.6 million of severance expenses for broadcast employees in 2017.

~~Corporate General and Administrative Expenses~~non-operating expense.

Corporate general and administrative expenses ~~decreased $3.1~~increased $2.0 million, or ~~20%~~16%, in the ~~third~~first quarter of ~~2017~~2019 compared to the same period in ~~2016.~~2018. The ~~decrease~~increase was primarily driven by $3.9 million of transaction costs (primarily due to the ~~absence~~WTOL and KWES acquisitions). Offsetting these expenses were cost savings as a result of ~~$1.6 million of severance expenses from~~right sizing our corporate function mostly driven by a reduction in force in the third quarter of ~~2016, as well as the continued right sizing of the corporate function in connection with the strategic actions impacting our former Digital Segment.~~

During the first nine months of 2017, corporate general and administrative expenses decreased $1.4 million, or 3%, compared to the same period in 2016. This change was primarily due to the absence of $1.6 million of severance expenses from the third quarter of 2016, partially offset by severance expense incurred in the first nine months of 2017 of approximately $1.1 million. The remaining difference is attributable to the continued right sizing of the corporate function in connection with the strategic actions impacting our former Digital Segment.2018.

Depreciation Expense

Depreciation expense increased ~~$2.0~~by $1.4 million, or ~~15%~~11%, in the ~~third~~first quarter of ~~2017~~2019 compared to the same ~~period~~periods in ~~2016.~~2018. The increase was primarily due to ~~$1.4 million of additional depreciation related to a change in useful lives of certain broadcasting~~the assets ~~in connection with the FCC channel reassignment process.~~

~~In the first nine months of 2017, depreciation expense decreased $0.9 million, or 2%, as compared to the same period in 2016. The decrease was primarily due to recent declines~~acquired in the ~~purchase of property and equipment, offset by accelerated depreciation related to a change in useful lives of certain broadcasting assets.~~recent station acquisitions.

Amortization Expense

Amortization expense ~~decreased by $0.4~~increased $1.9 million, ~~and $1.4 million~~or 28%, in the ~~third~~first quarter of 2019. The increase was primarily due to incremental amortization expense resulting from our recent station acquisitions.

Spectrum repacking reimbursements and other

We had $7.0 million of other gains in the first ~~nine months~~quarter of ~~2017, respectively, compared~~2019. The 2019 gains primarily consist of $4.1 million of gains due to reimbursements received from the ~~same periods in 2016. The decreases were~~Federal Communications Commission for required spectrum repacking. We also had a gain of $2.9 million as a result of the sale of certain ~~assets associated with previous acquisitions reaching the end of their useful lives.~~

~~Asset Impairment and Facility Consolidation Charges~~

Asset impairment and facility consolidation charges were $7.6 million in the third quarter of 2017 compared to $15.2 million in the third quarter of 2016. In the third quarter of 2017, a few television stations were impacted by hurricanes Harvey and Irma. In particular, Hurricane Harvey caused significant damage to our Houston television station (KHOU); as a result, we recognized $10.2 million in non-cash charges, writing off destroyed equipment and recording an impairment to the value of the building. In addition, we incurred $8.4 million in cash expenses related to repairing the studio and office and providing for additional staffing and operational needs to keep the stations operating during and immediately following these weather emergencies. Partially offsetting these expenses, we received initial insurance proceeds of $11.0 million ($5.0 million was received as of September 30, 2017 and $6.0 million was received in October 2017). The net expense impact from the hurricane of $7.6 million has been recorded in asset impairment and facility consolidation charges. The 2016 charge relates to a goodwill impairment at Cofactor.

During the first nine months of 2017, asset impairment and facility consolidation charges were $11.1 million, compared to $18.9 million in the same period in 2016. The 2017 charges primarily consisted of net $7.6 million in expenses related to Hurricane Harvey, $1.4 million related to the consolidation of office space at corporate headquarters and at our DMS business unit, and $2.2 million of non-cash impairment charges incurred by our broadcast stations. The 2016 charges were comprised of the third quarter goodwill impairment charge of $15.2 million at Cofactor and a $3.7 million impairment charge related to a long-lived-asset.real estate.

Operating Income

Our operating income decreased ~~$69.0~~$4.4 million, or ~~37%, in the third quarter of 2017 and $107.8 million, or 22%~~3%, in the first ~~nine months~~quarter of ~~2017,~~2019 compared to the same ~~periods~~period in ~~2016.~~2018. The ~~decreases were~~decrease was driven by the changes in revenue and expenses discussed above. The revenue increase of $14.7 million, or 3%, was more than offset by a $19.0 million, or 5%, increase in operating expenses. As a result, our consolidated operating margins were ~~25% in the third quarter of 2017 and 28%~~26% in the first ~~nine months~~quarter of ~~2017,~~2019 as compared to ~~36% in the third quarter of 2016 and 34%~~27% in the first ~~nine months~~quarter of ~~2016.~~2018.

Non-Operating ~~Income (Expense)~~Expenses

Non-operating ~~expense~~expenses decreased ~~$16.0~~$25.5 million, or ~~23%~~42%, in the ~~third~~first quarter of ~~2017~~2019 compared to the same period in ~~2016. The~~2018. This decrease was primarily due to an increase in equity earnings of $13.3 million due to a ~~reduction~~$12.2 million gain recognized as a result of the sale of our interest in ~~transaction costs of $10.9 million primarily associated with costs incurred~~Captivate in the ~~prior year period related to the Cars.com spin-off.~~first quarter of 2019. Also contributing to the decrease was the absence in 2019 of a pension-related charge that occurred first quarter of 2018 of $6.3 million (primarily related to lump sum payments made to certain former executives of the company). The decrease was also partially due to a decline in interest expense of ~~$5.7~~$1.3 million in 2019 driven by lower average debt outstanding, ~~due to the pay down of the drawn amounts on the revolving line of credit.~~partially offset by slightly higher interest rates. The total average outstanding debt was ~~$3.38~~$2.95 billion for the ~~third~~first quarter of ~~2017,~~2019, compared to ~~$4.31~~$3.13 billion in the same period of ~~2016.~~2018. The weighted average interest rate on total outstanding debt was ~~5.75%~~6.05% for the ~~third~~first quarter of ~~2017,~~2019, compared to ~~5.21%~~5.84% in the same period of ~~2016.~~

During the first nine months of 2017, non-operating expenses decreased $3.7 million, or 2%, compared to the same period in 2016. The decrease was primarily due to lower interest expense of $13.3 million, partially offset by increased costs associated with the strategic actions of $3.4 million (primarily the Cars.com spin-off) and a $5.8 million loss associated with the write-off of a note receivable from one of our equity method investments. The lower interest expense was due to lower average debt outstanding. The total average outstanding debt was $3.75 billion during the first nine months of 2017, compared to $4.28 billion in the same period of 2016. The weighted average interest rate on total outstanding debt was 5.51% for the first nine months of 2017, compared to 5.32% in the same period of 2016.2018.

Income Tax Expense

Income tax expense ~~decreased $27~~increased $2.4 million, or ~~70%~~12%, in the ~~third~~first quarter of ~~2017 as~~2019 compared to the same period in ~~2016, and decreased $37.2 million, or 40%, in the first nine months of 2017 compared to the same period in 2016.~~2018. The ~~decrease in Income tax expense is~~increase was primarily due to ~~a decline~~increases in net income before ~~tax, as well as a favorable deferred tax adjustment related to a previously-disposed business.~~tax. Our reported effective income tax rate was ~~18.4% in~~23.5% for the ~~third~~first quarter of ~~2017,~~2019, compared to ~~33.4%~~27.0% for continuing operations for the ~~third~~first quarter of ~~2016.~~2018. The ~~reported effective income~~ tax rate ~~was 27.5%~~ for the first ~~nine months~~quarter of ~~2017, compared to 30.3% for the same period in 2016. The tax rates for the third quarter and first nine months of 2017 are~~2019 is lower than the comparable ~~2016 rates~~rate in 2018 primarily as a result of the revaluation of deferred taxes in 2018 for the increase in the effective state tax rate due to the ~~reduction in net income before tax and the deferred tax adjustment mentioned above.~~acquisition of KFMB.

Net Income ~~from continuing operations~~

~~Income from continuing operations~~Net income was ~~$50.8~~$74.0 million, or ~~$0.23~~$0.34 per diluted share, in the ~~third~~first quarter of ~~2017~~2019 compared to ~~$76.7~~$55.2 million, or ~~$0.35~~$0.25 per diluted share, during the same period in 2016. For the first nine months of 2017, we reported net income from continuing operations of $144.7 million, or $0.66 per diluted share, compared to $211.6 million, or $0.96 per diluted share, for the same period in 2016.2018. Both income ~~from continuing operations~~ and earnings per share were affected by the factors discussed above.

The weighted average number of diluted ~~shares outstanding in the both the third quarter of 2017 and 2016 was 218.1 million. The weighted average number of diluted~~common shares outstanding in the first ~~nine months~~ quarter of ~~2017 decreased by 2.7~~2019 and 2018 was 217.2 million ~~shares to 217.8~~and 217.0 million, ~~from 220.5 million in the same period in 2016.~~respectively.

Results from Operations - Non-GAAP Information

Presentation of Non-GAAP information

We use non-GAAP financial performance and liquidity measures to supplement the financial information presented on a GAAP basis. These non-GAAP financial measures should not be considered in isolation from, or as a substitute for, the related GAAP measures, nor should they be considered superior to the related GAAP measures, and should be read together with financial information presented on a GAAP basis. Also, our non-GAAP measures may not be comparable to similarly titled measures of other companies.

Management and our Board of Directors use the non-GAAP financial measures for purposes of evaluating ~~business unit and consolidated~~ company performance. Furthermore, the ~~Executive~~Leadership Development and Compensation Committee of our Board of Directors uses non-GAAP measures such as Adjusted EBITDA, non-GAAP net income, non-GAAP EPS, and ~~free cash flow~~Adjusted revenues to evaluate management’s performance. Therefore, we believe that each of the non-GAAP measures presented provides useful information to investors and other stakeholders by allowing them to view our business through the eyes of management and our Board of Directors, facilitating comparisons of results across historical periods and focus on the underlying ongoing operating performance of our business. We discuss in this Form 10-Q non-GAAP financial performance measures that exclude from our reported GAAP results the impact of “special items” consisting of ~~severance expense, charges~~spectrum repacking reimbursements and other, gains on sale of equity method investments, transaction costs, and certain non-operating expenses (TEGNA foundation donation and pension payment timing related charges). In addition, we have income tax special items associated with tax impacts related to ~~asset impairment and facility consolidations, costs associated with~~ the ~~Cars.com spin-off transaction, and certain tax benefits associated with the Cars.com spin-off and sale~~acquisition of ~~CareerBuilder.~~ KFMB.

We believe that such expenses ~~charges~~ and gains are not indicative of normal, ongoing operations. ~~Such~~While these items may be recurring in nature and should not be disregarded in evaluation of our earnings performance, it is useful to exclude such items when analyzing current results and trends compared to other periods as these items can vary significantly from period to period ~~and are significantly impacted by the timing and nature of these events.~~depending on specific underlying transactions or events that may occur. Therefore, while we may incur or recognize these types of expenses ~~charges~~ and gains in the future, we believe that removing these items for purposes of calculating the non-GAAP financial measures provides investors with a more focused presentation of our ongoing operating performance.

We discuss Adjusted EBITDA (with and without corporate expenses), a non-GAAP financial performance measure that we believe offers a useful view of the overall operation of our businesses. We define Adjusted EBITDA as net income ~~from continuing operations~~ before (1) interest expense, (2) income taxes, (3) equity income ~~(losses)~~(loss) in unconsolidated investments, net, (4) other non-operating items, ~~such as spin-off transaction expenses and investment income,~~net, (5) severance expense, (6) ~~facility consolidation charges,~~transaction costs, (7) ~~impairment charges,~~spectrum repacking reimbursements and other, (8) depreciation and (9) amortization. The most directly comparable GAAP financial measure to Adjusted EBITDA is Net ~~income from continuing operations.~~income. Users should consider the limitations of using Adjusted EBITDA, including the fact that this measure does not provide a complete measure of our operating performance. Adjusted EBITDA is not intended to purport to be an ~~alternative~~alternate to net income as a measure of operating ~~performance or to cash~~

performance or to cash flows from operating activities as a measure of liquidity. In particular, Adjusted EBITDA is not intended to be a measure of ~~free~~ cash flow available for management’s discretionary expenditures, as this measure does not consider certain cash requirements, such as working capital needs, capital expenditures, contractual commitments, interest payments, tax payments and other debt service requirements.

We also consider adjusted revenues to be an important non-GAAP financial measure. Our adjusted revenue is calculated by taking total company revenues on a GAAP basis and adjusting it to exclude (1) estimated incremental Olympic and Super Bowl revenue and (2) ~~Political revenues, (3) revenues from a previously sold business (Cofactor), and (4) revenues associated with a discontinued portion of our DMS business.~~political revenues. These adjustments are made to our reported revenue on a GAAP basis in order to evaluate and assess our core operations on a comparable basis, and it represents the ongoing operations of our ~~broadcast~~media business.

We also discuss free cash flow, a non-GAAP ~~liquidity~~performance measure. Beginning in the first quarter of 2019 we began using a new methodology to compute free cash flow. The change in methodology was determined to be preferable as it will better reflect how the Board of Directors reviews the performance of the business and it more closely aligns to how other companies in the broadcast industry calculate this non-GAAP performance metric. The most directly comparable GAAP financial measure to free cash flow is Net income. Free cash flow is now calculated as non-GAAP Adjusted EBITDA (as defined ~~as “net cash flow~~above), further adjusted by adding back (1) stock-based compensation, (2) syndicated programming amortization, (3) dividends received from ~~operating activities” as reported on the statement~~equity method investments, (4) pension reimbursements, and (5) reimbursements from spectrum repacking. This is further adjusted by deducting payments made for (1) syndicated programming, (2) pension, (3) interest, (4) taxes (net of ~~cash flows reduced by “purchase~~refunds) and (5) purchases of property and equipment”. We believe that free cash flow is a useful measure for management and investors to evaluate the level of cash generated by operations and the ability of its operations to fund investments in new and existing businesses, return cash to shareholders under the company’s capital program, repay indebtedness, add to our cash balance, or use in other discretionary activities. We use free cash flow to monitor cash available for repayment of indebtedness and in discussions with the investment community.equipment. Like Adjusted EBITDA, free cash flow is not intended to be a measure of cash flow available for management’s discretionary use.

Discussion of special charges ~~and credits~~ affecting reported results

Our results for the quarter ~~and first nine months~~ ended ~~September 30, 2017~~March 31, 2019 included the following items we consider “special items” ~~and are~~that while not ~~indicative of our normal ongoing operations:~~always non-recurring, can vary significantly from period to period:

~~Operating asset impairment~~Spectrum repacking reimbursements and ~~facility consolidation charges~~other consisting of a gain recognized on the sale of real estate and gains due to reimbursements from the FCC for required spectrum repacking;

Transaction costs associated with business acquisitions;

Gains recognized in our equity income in unconsolidated investments as a result of the sale of two investments; and

Other non-operating item related to ~~damage caused by Hurricane Harvey and~~a charitable donation made to the ~~consolidation~~TEGNA Foundation.

Our results for the quarter ended March 31, 2018 included the following items we consider “special items” that while not always non-recurring, can vary significantly from period to period:

Pension lump-sum payment charge as a result of ~~office space at corporate headquarters~~ payments that were made to certain SERP plan participants in early 2018;

and ~~at our DMS business unit;~~

Other non-operating items associated with transaction costs of the spin-off of our Cars.com business unit, charitable donations made to the TEGNA Foundation, non-cash asset impairment charges associated with write off of a note receivable from an equity method investment;

~~A special tax benefit related to deferred tax remeasurement attributable to the spin-off of our Cars.com business unit~~ and a deferred tax ~~adjustment~~provision impact related to ~~a previously-disposed business; and~~our acquisition of

~~Severance charges which included payroll and related benefit costs.~~KFMB.

~~Our results for the quarter and first nine months ended September 30, 2016 included the following special items:~~

~~Severance charges primarily related to a voluntary retirement program at our broadcast stations (which includes payroll and related benefit costs);~~

~~Non-cash asset impairment charges associated with goodwill, an operating asset, and equity method investments; and~~

~~Non-operating costs associated with the spin-off of our Cars.com business unit and acquisition-related costs.~~

Reconciliations of certain line items impacted by special items to the most directly comparable financial measure calculated and presented in accordance with GAAP on our ~~consolidated statements~~Consolidated Statements of ~~income~~Income follow (in thousands, except per share amounts):

Special Items
Quarter ended September 30, 2017
GAAP
measure
Operating asset impairment and facility consolidation Other non-operating items Tax benefits Non-GAAP measure

Operating expenses $ 347,403
$ (7,553 ) $ —
$ —
$ 339,850
Operating income 116,861
7,553
—
—
124,414
Other non-operating items (3,671 ) —
2,688
—
(983 )
Total non-operating expense (54,660 ) —
2,688
—
(51,972 )
Income before income taxes 62,201
7,553
2,688
—
72,442
Provision for income taxes 11,447
2,780
629
8,086
22,942
Income from continuing operations 50,754
4,773
2,059
(8,086 ) 49,500
Earnings from continuing operations per share - diluted ^(a)
$ 0.23
$ 0.02
$ 0.01
$ (0.04 ) $ 0.23
(a) Per share amounts do not sum due to rounding.

Special Items
Quarter ended September 30, 2016
GAAP
measure
Severance expense Operating asset impairment and facility consolidation Other non-operating items Non-GAAP measure

Operating expenses $ 333,766
$ (2,870 ) $ (15,218 ) $ —
$ 315,678
Operating income 185,851
2,870
15,218
—
203,939
Other non-operating items (11,874 ) —
—
13,161
1,287
Total non-operating expense (70,673 ) —
—
13,161
(57,512 )
Income before income taxes 115,178
2,870
15,218
13,161
146,427
Provision for income taxes 38,441
1,112
5,900
3,515
48,968
Income from continuing operations 76,737
1,758
9,318
9,646
97,459
Earnings from continuing operations per share - diluted ^(a)
$ 0.35
$ 0.01
$ 0.04
$ 0.04
$ 0.45

~~(a) Per share amounts do not sum due to rounding.~~

Special Items
Nine Months Ended September 30, 2017
GAAP
measure
Severance expense Operating asset impairment Other non-operating items Tax benefits Non-GAAP measure

Operating expenses $ 1,022,651
$ (3,053 ) $ (11,086 ) $ —
$ —
$ 1,008,512
Operating income 390,052
3,053
11,086
—
—
404,191
Other non-operating items (26,853 ) —
—
31,991
—
5,138
Total non-operating expense (190,515 ) —
—
31,991
—
(158,524 )
Income before income taxes 199,537
3,053
11,086
31,991
—
245,667
Provision for income taxes 54,855
1,174
4,104
6,921
11,724
78,778
Income from continuing operations 144,682
1,879
6,982
25,070
(11,724 ) 166,889
Earnings from continuing operations per share - diluted $ 0.66
$ 0.01
$ 0.03
$ 0.12
$ (0.05 ) $ 0.77

Special Items
Nine Months Ended September 30, 2016
GAAP
measure
Severance expense Operating asset impairment Equity investment impairment Other non-operating items Non-GAAP measure

Operating expenses $ 959,344
$ (20,118 ) $ (18,946 ) $ —
$ —
$ 920,280
Operating income 497,889
20,118
18,946
—
—
536,953
Equity (loss) income in unconsolidated charges (2,763 ) —
—
1,869
—
(894 )
Other non-operating items (16,029 ) —
—
—
16,324
295
Total non-operating expense (194,236 ) —
—
1,869
16,324
(176,043 )
Income before income taxes 303,653
20,118
18,946
1,869
16,324
360,910
Provision for income taxes 92,038
7,799
7,345
725
4,583
112,490
Income from continuing operations 211,615
12,319
11,601
1,144
11,741
248,420
Earnings from continuing operations per share - diluted $ 0.96
$ 0.06
$ 0.05
$ 0.01
$ 0.05
$ 1.13



				Special Items
Quarter ended March 31, 2019	GAAP measure			Spectrum repacking reimbursements and other			Transaction costs			Net gains on equity method investments			Other non-operating item		Non-GAAP measure

Corporate - General and administrative expenses, exclusive of depreciation	$	14,735		$	—		$	(3,911	)	$	—		$	—	$	10,824
Spectrum repacking reimbursements and other	(7,013		)	7,013			—			—			—		—
Operating expenses	384,104			7,013			(3,911		)	—			—		387,206
Operating income	132,649			(7,013		)	3,911			—			—		129,547
Equity income (loss) in unconsolidated investments, net	12,028			—			—			(13,126		)	—		(1,098		)
Other non-operating items, net	(1,539		)	—			—			—			1,000		(539		)
Total non-operating expense	(35,896		)	—			—			(13,126		)	1,000		(48,022		)
Income before income taxes	96,753			(7,013		)	3,911			(13,126		)	1,000		81,525
Provision for income taxes	22,774			(1,758		)	979			(3,169		)	251		19,077
Net income	73,979			(5,255		)	2,932			(9,957		)	749		62,448
Net income per share-diluted ^(a)	$	0.34		$	(0.02	)	$	0.01		$	(0.05	)	$	—	$	0.29

(a) Per share amounts do not sum due to rounding.

				Special Items
Quarter ended March 31, 2018	GAAP measure			Pension lump-sum payment charge			Other non-operating items			Non-GAAP measure

Other non-operating items, net	$	(12,480	)	$	6,300		$	9,462		$	3,282
Total non-operating expense	(61,443		)	6,300			9,462			(45,681		)
Income before income taxes	75,572			6,300			9,462			91,334
Provision for income taxes	20,385			1,608			(1,443		)	20,550
Net income	55,187			4,692			10,905			70,784
Net income per share-diluted ^(a)	$	0.25		$	0.02		$	0.05		$	0.33

(a) Per share amounts do not sum due to rounding.

Adjusted Revenues

Reconciliations of adjusted revenues to our revenues presented in accordance with GAAP on our Consolidated Statements of Income are presented below (in thousands):

Quarter ended Sept. 30, Nine months ended Sept. 30,
2017 2016 Change 2017 2016 Change

Advertising & Marketing Services ^(a)
$ 277,817
$ 330,589
(16.0 %) $ 843,175
$ 934,977
(9.8 %)
Political 3,783
38,060
(90.1 %) 13,386
64,050
(79.1 %)
Subscription 177,692
143,676
23.7 % 540,345
436,292
23.8 %
Other 4,972
4,696
5.9 % 15,797
13,883
13.8 %
Cofactor —
2,596
***
—
8,031
***
Total company revenues (GAAP basis) $ 464,264
$ 519,617
(10.7 %) $ 1,412,703
$ 1,457,233
(3.1 %)
Factors impacting comparisons:
     Estimated incremental Olympic and Super Bowl $ —
$ (28,300 ) ***
$ —
$ (37,210 ) ***
     Political (3,783 ) (38,060 ) (90.1 %) (13,386 ) (64,050 ) (79.1 %)
     CoFactor (sold in December 2016) —
(2,596 ) ***
—
(8,031 ) ***
     Discontinued digital marketing services —
(13,893 ) ***
(16,673 ) (40,509 ) (58.8 %)
Total company adjusted revenues $ 460,481
$ 436,768
5.4 % $ 1,382,644
$ 1,307,433
5.8 %

(a) Includes traditional advertising, digital advertising as well as revenue from our DMS businesses.



	Quarter ended Mar. 31,
	2019			2018			Change

Advertising & Marketing Services	$	264,402		$	282,939		(7	%)
Subscription	241,575			205,556			18	%
Political	2,704			7,606			(64	%)
Other	8,072			5,989			35	%
Total revenues (GAAP basis)	$	516,753		$	502,090		3	%
Factors impacting comparisons:
Estimated net incremental Olympic and Super Bowl	$	(8,000	)	$	(24,000	)	(67	%)
Political	(2,704		)	(7,606		)	(64	%)
Total company adjusted revenues (non-GAAP basis)	$	506,049		$	470,484		8	%

*** Not meaningful

Excluding the impacts of ~~Political revenue, impacts from the discontinued DMS transition services agreement, the absence of Cofactor revenue, and~~ estimated ~~prior year~~net incremental Olympic and Super Bowl and Political advertising revenue, total company adjusted revenues on a comparable basis increased ~~five percent in the third quarter and six percent~~8% in the first ~~nine months of 2017~~quarter 2019 compared to the same ~~periods~~period in ~~2016.~~

2018. This is primarily attributable to increases in subscription revenue, partially offset by declines in AMS revenue as described in the Results from Operations section above.

Adjusted EBITDA - Non-GAAP

Reconciliations of Adjusted EBITDA to net income ~~from continuing operations attributable to TEGNA Inc.~~ presented in accordance with GAAP on our Consolidated Statements of Income are presented below (in thousands):

Quarter ended Sept. 30, Nine months ended Sept. 30,
2017 2016 Change 2017 2016 Change

Net income from continuing operations (GAAP basis) $ 50,754
$ 76,737
(34 %) $ 144,682
$ 211,615
(32 %)
Provision for income taxes 11,447
38,441
(70 %) 54,855
92,038
(40 %)
Interest expense 51,855
57,601
(10 %) 162,113
175,444
(8 %)
Equity loss in unconsolidated investments, net (866 ) 1,198
***
1,549
2,763
(44 %)
Other non-operating items 3,671
11,874
(69 %) 26,853
16,029
68 %
Operating income (GAAP basis) 116,861
185,851
(37 %) 390,052
497,889
(22 %)
Severance expense —
2,870
***
3,053
20,118
(85 %)
Asset impairment and facility consolidation charges 7,553
15,218
(50 %) 11,086
18,946
(41 %)
Adjusted operating income (non-GAAP basis) 124,414
203,939
(39 %) 404,191
536,953
(25 %)
Depreciation 15,186
13,212
15 % 41,721
42,653
(2 %)
Amortization of intangible assets 5,395
5,775
(7 %) 16,172
17,542
(8 %)
Adjusted EBITDA (non-GAAP basis) 144,995
222,926
(35 %) 462,084
597,148
(23 %)
Corporate - General and administrative expense, exclusive of depreciation (non-GAAP basis) 12,881
14,470
(11 %) 41,402
42,308
(2 %)
Adjusted EBITDA, excluding Corporate (non-GAAP basis) $ 157,876
$ 237,396
(33 %) $ 503,486
$ 639,456
(21 %)



	Quarter ended Mar. 31,
	2019			2018		Change

Net income (GAAP basis)	$	73,979		$	55,187	34	%
Plus: Provision for income taxes	22,774			20,385		12	%
Plus: Interest expense	46,385			47,725		(3	%)
(Less) Plus: Equity (income) loss in unconsolidated investments, net	(12,028		)	1,238		***
Plus: Other non-operating items, net	1,539			12,480		(88	%)
Operating income (GAAP basis)	132,649			137,015		(3	%)
Plus: Transaction costs	3,911			—		***
Less: Spectrum repacking reimbursements and other	(7,013		)	—		***
Adjusted operating income (non-GAAP basis)	129,547			137,015		(5	%)
Plus: Depreciation	14,917			13,471		11	%
Plus: Amortization of intangible assets	8,689			6,782		28	%
Adjusted EBITDA (non-GAAP basis)	153,153			157,268		(3	%)
Corporate - General and administrative expense, exclusive of depreciation (non-GAAP basis)	10,824			12,708		(15	%)
Adjusted EBITDA, excluding Corporate (non-GAAP basis)	$	163,977		$	169,976	(4	%)

*** Not meaningful

~~Third~~First quarter ~~2017 adjusted~~2019 Adjusted EBITDA margin was ~~34%~~32% without corporate expense or ~~31%~~30% with ~~corporate.~~corporate expense. Our total Adjusted EBITDA decreased ~~$77.9~~$4.1 millionor~~35%~~ 3% in the ~~third~~first quarter of ~~2017~~2019 compared to ~~2016 and decreased $135.1 million or 23% for the first nine months of 2017 from the prior year comparable period.~~2018. The decrease was primarily driven by the operational factors discussed above within the revenue and operating expense fluctuation explanation sections. Most notably, for this quarter, the decrease was primarily driven by lower high-margin Olympics, Super Bowl and political revenue, coupled with higher programming ~~costs (due~~expense related to 11subscription revenue growth.

Free cash flow reconciliation

Our free cash flow, a non-GAAP performance measure, was $109.1 million in the first quarter of ~~our NBC stations which began making reverse compensation payments~~ 2019 compared to $123.4 millionfor the ~~first time), the absence of Olympic revenue~~same period in ~~2017 and the expected decline in political revenue in 2017.~~2018.

~~Certain Matters Affecting Future Operating Results~~

~~The following items will affect year-over-year comparisons for 2017 results:~~

Reconciliations from “Net income” to “Free cash flow” follow (in thousands):

~~Revenues~~ - In the fourth quarter of 2017 revenue will be impacted primarily due to the absence of $82 million in net political revenues compared to the fourth quarter of 2016, and the absence of $16 million of DMS revenue due to the conclusion of a transition services agreement with Gannett.

Based on current trends, we expect total company revenues on a GAAP basis compared to the prior year quarter to be down in the high-single to low double-digits. Adjusting to remove political revenue and revenue related to the terminated transition services agreement, we expect our fourth quarter adjusted company revenues to be up in the high single-digit to low double-digits year-over-year.

~~Programming Costs~~ - Beginning in January 2017, 11 of our NBC stations began making reverse compensation payments for the first time. As such, 2017 is an unusual year as there will be an unfavorable gap between the increase in subscription revenue we earn from multichannel video programming distributors (MVPD), compared to the increase in fees we will pay our affiliates. At the end of 2016, we renegotiated several new subscriptions agreements with major MVPD carriers, and as a result, we have reduced our net retransmission gap in 2017 to approximately $31 million to $34 million. Further, we expect our strategic initiatives launched in 2016 (including Premion, centralized pricing initiatives, and Hatch) will more than offset the remaining net retransmission gap in 2017.

~~Income Taxes~~ - After the spin-off of Cars.com and disposition of CareerBuilder, the recurring effective income tax rate for 2018 is anticipated to be approximately 35%. This estimated effective income tax rate is higher than that for the third quarter and the first nine months of 2017 due to tax benefits associated with the spin-off of Cars.com and other non-recurring items realized in 2017.



	Quarter ended Mar. 31,
	2019			2018			Change

Net income (GAAP basis)	$	73,979		$	55,187		34	%
Plus: Provision for income taxes	22,774			20,385			12	%
Plus: Interest expense	46,385			47,725			(3	%)
Plus: Other non-operating items	1,539			12,480			(88	%)
Plus: Transaction costs	3,911			—			***
Plus: Depreciation	14,917			13,471			11	%
Plus: Amortization	8,689			6,782			28	%
Plus: Stock-based compensation	4,433			3,599			23	%
Plus: Syndicated programming amortization	13,463			13,286			1	%
Plus: Pension reimbursements	—			29,240			***
Less: Spectrum repacking reimbursements and other	(7,013		)	—			***
Less (Plus): Equity (income) losses	(12,028		)	1,238			***
Less: Syndicated programming payments	(13,288		)	(13,656		)	(3	%)
Less: Pension contributions	(942		)	(28,372		)	(97	%)
Less: Interest payments	(27,412		)	(30,128		)	(9	%)
Plus (Less): Tax refunds, net of (payments)	397			2,799			(86	%)
Less: Purchases of property and equipment	(24,810		)	(10,643		)	***
Add: Cash reimbursements from spectrum repacking	4,134			—			***
Free cash flow (non-GAAP basis)	$	109,128		$	123,393		(12	%)

*** Not meaningful

Forward Looking Financial Information

In the second quarter of 2019, we expect we will continue to experience subscription revenue growth, partially offset by the absence of high political advertising spending last year. As provided last quarter, we are reaffirming guidance metrics for the full year of 2019; for the second quarter of 2019, we expect:



Second Quarter 2019 Key Guidance Metrics¹
Total Company GAAP Revenue	+ low single digits
Non-GAAP Revenue (excluding political)	+ mid single digits
Total Operating Expenses	+ mid single digits
Operating Expenses (excluding programming)	- very low single digits



Full Year 2019 Key Guidance Metrics ¹ (As Presented in March 1, 2019 Earnings Release)
Subscription Revenue	+ mid-teens percent
Corporate Expenses	approximately $45 million
Depreciation	$55 - 60 million
Amortization	approximately $35 million
Interest Expense	$190 - 195 million
Total Capital Expenditures	$70 - 75 million
Non-Recurring Cap Ex (includes $17M spectrum repack)	$35 - 40 million
Effective Tax Rate	23 - 25%
Leverage Ratio	approximately 4.0x
Free Cash Flow as a % of est. 2018/19 Revenue	17 - 18%
Free Cash Flow as a % of est. 2019/20 Revenue	18 - 19%

¹Guidance includes stations acquired in the first quarter of 2019; excludes acquisitions announced but not yet closed.

Liquidity, Capital Resources and Cash Flows

Our ~~strong~~ cash generation capability and financial condition, together with our significant borrowing capacity under our revolving credit agreement, are sufficient to fund our capital expenditures, interest expense, dividends, share repurchases, investments in strategic initiatives and other operating requirements. Over the longer term, we expect to continue to fund debt maturities, acquisitions and investments through a combination of cash flows from operations, borrowings under our revolving credit agreement and funds raised in the capital markets. As we summarize below, during 2017 we have completed several strategic actions that have positioned us to be able to pursue strategic acquisition opportunities that may develop in our sector, invest in new content and revenue initiatives, and grow revenue in fiscal year 2018.

During the second quarter we completed our spin-off of Cars.com which resulted in a one-time tax-free cash distribution of $650.0 million to TEGNA. We used $609.9 million of the tax-free distribution proceeds to fully pay down our then outstanding revolving credit agreement borrowings.

On July 31, 2017, we sold our majority ownership interest in CareerBuilder. Our share of the pre-tax net cash proceeds from the sale was $198.3 million, net of cash transferred of $36.6 million. Additionally, prior to the sale, CareerBuilder issued a final dividend to its selling shareholders, of which $25.8 million was retained by TEGNA. On October 16 2017, we used the net proceeds from the CareerBuilder sale, the remaining cash distribution proceeds from Cars.com of $40.1 million, and cash on hand to early retire $280.0 million of principal of unsecured notes due in October 2019.

On August 1, 2017, we amended our Amended and Restated Competitive Advance and Revolving Credit Agreement. Under the amended terms, our maximum total leverage ratio will remain at 5.0x through June 30, 2018, after which, as amended, it will be reduced to 4.75x through JuneAs of March 31, 2019, and then to 4.5x until the expiration of the credit agreement on June 29, 2020. Lastly, on September 19, 2017, we announced that our Board of Directors authorized a new share repurchase program for up to $300 million of our common stock over the next three years.

~~At the end of the third quarter of 2017,~~ our total debt was ~~$3.32~~$2.91 billion, ~~and~~ cash and cash equivalents totaled ~~$383.4 million. As of September 30, 2017,~~$3.8 million, and we had unused borrowing capacity of ~~$1.5~~$1.47 billion under our revolving credit facility. ~~We intend to continue~~As of March 31, 2019, approximately $2.69 billion, or 92%, of our debt has a fixed interest rate.

Our operations have historically generated strong positive cash flow which, along with availability under our existing revolving credit facility, provides adequate liquidity to invest in organic and strategic growth opportunities, as well as acquisitions such as our 2019 acquisition of WTOL and ~~also intend to maintain the financial flexibility to pursue strategic acquisitions when appropriate.~~KWES and our recently announced 11 station acquisition from Nexstar Media Group and Justice/Quest multicast Channels. Our financial and operating performance, as well as our ability to generate sufficient cash flow to maintain compliance with credit facility covenants, are subject to certain risk factors; see ~~the Part II. Other Information,~~ Item 1A. ~~Risk Factors discussion below.~~“Risk Factors” in our 2018 Annual Report on Form 10-K for further discussion.

On September 19, 2017, we announced that our Board of Directors authorized a share repurchase program for up to $300.0 million of our common stock over three years. During the first quarter of 2019, no shares were repurchased and as of March 31, 2019, approximately $279.1 million remained under this program. As a result of our pending 11 station acquisition from Nexstar Media Group, we have suspended share repurchases under this program.

Cash Flows

The following table provides a summary of our cash flow information followed by a discussion of the key elements of our cash flow (in thousands):

Nine months ended Sept. 30,
2017 2016

Cash and cash equivalents from continuing operations, beginning of period $ 15,879
$ 26,096
Cash and cash equivalents from discontinued operations, beginning of period 61,041
103,104
     Balance of cash and cash equivalents, beginning of the period 76,920
129,200

Operating activities:
    Net (loss) income (88,579 ) 343,756
    Loss on write down of CareerBuilder 342,900
—
    Depreciation, amortization and other non-cash adjustments 153,242
197,025
    Pension (contributions), net of expense (12,547 ) 2,135
    Spectrum channel share agreement proceeds 32,588
—
    Other, net (76,421 ) (88,153 )
Net cash flows from operating activities 351,183
454,763
Net cash from (used for) investing activities 152,499
(273,309 )
Net cash used for financing activities (197,248 ) (203,325 )
Increase (decrease) in cash and cash equivalents 306,434
(21,871 )

Cash and cash equivalents from continuing operations, end of period 383,354
19,185
Cash and cash equivalents from discontinued operations, end of period —
88,144
     Balance of cash and cash equivalents, end of the period $ 383,354
$ 107,329



	Quarter ended Mar. 31,
	2019			2018

Balance of cash, cash equivalents and restricted cash beginning of the period	$	135,862		$	128,041

Operating activities:
Net income	73,979			55,187
Depreciation, amortization and other non-cash adjustments	13,131			24,080
Pension (contributions), net of expense	(242		)	(23,072		)
Other, net	(38,459		)	(5,009		)
Net cash flows from operating activities	48,409			51,186
Net cash used for investing activities	(110,037		)	(338,154		)
Net cash (used for) from financing activities	(70,416		)	167,265
Decrease in cash and cash equivalents	(132,044		)	(119,703		)

Balance of cash, cash equivalents and restricted cash end of the period	$	3,818		$	8,338

Operating Activities - Cash flow from operating activities was ~~$351.2~~$48.4 million for the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2019, compared to ~~$454.8~~$51.2 million for the ~~nine months ended September 30, 2016.~~same period in 2018. The $2.8 million decrease in net cash flow from operating activities was primarily due to ~~higher programming costs~~an increase in subscription receivables (due to rate increases and timing of ~~$135.1 million (primarily due to the NBC affiliation agreement), the~~payments) and a decline in ~~political revenue of $50.7 million, and the absence of operating cash flow Cars.com and CareerBuilder following their spin-off and sale, respectively. These decreases were~~payables (including refunds paid to certain Premion customers), which was partially offset by ~~declines~~a decline in ~~tax~~pension payments of ~~$40.6 million and interest payments of $19.8~~$27.5 million. ~~Also partially offsetting the net operating cash flow decrease was a cash inflow received in 2017 of $32.6 million from a spectrum channel sharing agreement.~~

Investing Activities - Cash flow ~~from investing activities totaled $152.5 million for the nine months ended September 30, 2017, compared to cash~~ used for investing activities ~~of $273.3~~was $110.0 million for the three months ended March 31, 2019, compared to $338.2 million for the same period ~~2016.~~2018. The ~~2017 net cash inflow was primarily a result~~decrease of the sale of the majority of our ownership in CareerBuilder, which provided $198.3 million of proceeds, net of cash transferred. Additionally, we had cash inflow of $15.1 million from the sale of assets, primarily comprised of proceeds of $14.6 million from the sale of Gannett Co., Inc., common stock. These inflows were partially offset by purchases of property and equipment of $63.8 million in 2017.

~~The 2016 net cash used for investing activities of $273.3~~$228.2 million was primarily ~~comprised of $196.8 million paid for the acquisitions of businesses (net of cash acquired) and purchase of property and equipment~~due a reduction in the amount of ~~$68.6~~cash used for acquisitions. In 2019, we used $108.9 million for the acquisition of WTOL and KWES as compared to the 2018 acquisition of KFMB for $325.9 million.

Financing Activities - Cash flow used for financing activities ~~totaled $197.2~~was $70.4 million for the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2019, compared to ~~$203.3 million net outflow for the same period in 2016. The 2017 net outflow of~~ cash ~~for~~flow from financing activities ~~was primarily due to debt activity and dividends. With regards to 2017 debt activity, prior to the completion~~ of the spin-off, Cars.com borrowed approximately $675.0 million under a revolving credit facility agreement, while incurring $6.2 million of debt issuance costs. The proceeds were used to make a one time tax-free cash distribution of $650.0 million from Cars.com to TEGNA. We used most of the cash received to pay down our then outstanding revolving credit balance of $609.9 million. Total net payments on the revolving credit facility in the first nine months of 2017 were $635.0 million. We used an additional $99.2 million to pay down other existing debt. Additionally, in 2017 we made dividend payments of $75.1 million, paid a final dividend to the noncontrolling owners of CareerBuilder of $23.0 million, and transferred $20.1 million to Cars.com in connection with the spin-off.

The 2016 net financing outflow of $203.3 million was primarily a result of stock repurchases of $150.9 million and dividend payments of $91.6 million. These outflows were partially offset by a net debt inflow of $58.7 million primarily comprised of $310.0 million of borrowings which were partially offset by debt repayments of $249.6 million.

~~Non-GAAP Liquidity Measure~~

~~Our free cash flow, a non-GAAP liquidity measure, was $287.3 million for the first nine months of 2017 compared to $386.2~~$167.3 million for the same period in ~~2016. Our free cash flow~~2018. The change was primarily due to activity on our revolving credit facility. In the first quarter of 2019 we made net payments of $30.0 million on the revolver as compared to the same period in 2018 when we had borrowings of $220.0 million (primarily for the ~~first nine months~~acquisition of 2017 was lower than the first nine months of 2016 because of the same factors affecting cash flow from operating activities discussed above. Free cash flow, which we reconcile to “Net cash flow from operating activities,” is cash flow from operating activities reduced by “Purchase of property and equipment.” We believe that free cash flow is a useful measure for management and investors to evaluate the level of cash generated by operations and the ability of our operations to fund investments in new and existing businesses, return cash to shareholders under our capital program, repay indebtedness or to use in other discretionary activities.

~~Reconciliations from “Net cash flow from operating activities” to “Free cash flow” follow (in thousands):~~

Nine months ended September 30,
2017 2016

Net cash flow from operating activities $ 351,183
$ 454,763
Purchase of property and equipment (63,846 ) (68,577 )
Free cash flow

$ 287,337
$ 386,186
KFMB).

Certain Factors Affecting Forward-Looking Statements

Certain statements in this Quarterly Report on Form 10-Q contain forward-looking statements regarding business strategies, market potential, future financial performance and other matters. The words “believe,” “expect,” “estimate,” “could,” “should,” “intend,” “may,” “plan,” “seek,” “anticipate,” “project” and similar expressions, among others, generally identify “forward-looking statements”. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results and events to differ materially from those anticipated in the forward-looking statements, including those described under Item 1A. “Risk Factors” in our ~~2016~~2018 Annual Report on Form 10-K.

Our actual financial results may be different from those projected due to the inherent nature of projections. Given these uncertainties, forward-looking statements should not be relied on in making investment decisions. The forward-looking statements contained in this Form 10-Q speak only as of the date of its filing. Except where required by applicable law, we expressly disclaim a duty to provide updates to forward-looking statements after the date of this Form 10-Q to reflect subsequent events, changed circumstances, changes in expectations, or the estimates and assumptions associated with them. The forward-looking statements in this Form 10-Q are intended to be subject to the safe harbor protection provided by the federal securities laws.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

For quantitative and qualitative disclosures about market risk, refer to the following section of our ~~2016~~2018 Annual Report on Form 10-K: “Item 7A. Quantitative and Qualitative Disclosures about Market Risk.” Our ~~exposure~~exposures to market risk ~~has been reduced~~have not changed materially since December 31, ~~2016, due to the sale of our majority ownership in CareerBuilder, which has decreased our exposure to changes in foreign exchange rates related to CareerBuilder’s international operations.~~2018.

As of ~~September 30, 2017, we had $379.2~~March 31, 2019, approximately $2.69 billion of our debt has a fixed interest rate (which represents approximately 92% of our total principal debt obligation). Our remaining debt obligation of $220 million ~~in long-term~~has floating ~~rate obligations outstanding.~~interest rates. These obligations fluctuate with market interest rates. By way of comparison, a 50 basis points increase or decrease in the average interest rate for these obligations would result in a change in ~~annualized~~annual interest expense of approximately ~~$1.9~~$1.1 million. The fair value of our total debt, based on bid and ask quotes for the related debt, totaled ~~$3.49~~$2.98 billion as of ~~September 30, 2017,~~March 31, 2019 and ~~$4.19~~$2.96 billion as of December 31, ~~2016.~~2018.

Item 4. Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of ~~September 30, 2017.~~March 31, 2019. Based on that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective, as of ~~September 30, 2017,~~March 31, 2019, to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 are recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

There have been no material changes in our internal controls or in other factors during the fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

~~Other than ordinary, routine litigation incidental~~See Note 11 to the condensed consolidated financial statements for information regarding our ~~business, neither we nor any of our subsidiaries currently is party to any material pending~~ legal ~~proceeding.~~proceedings.

Item 1A. Risk Factors

While we attempt to identify, manage and mitigate risks and uncertainties associated with our business, some level of risk and uncertainty will always be present. “Item 1A. Risk Factors” of our ~~2016~~2018 Annual Report on Form 10-K describes the risks and uncertainties that we believe may have the potential to materially affect our business, results of operations, financial condition, cash flows, projected results and future prospects. ~~The information below describes~~We do not believe that there have been any material changes from the risk factors previously disclosed in our ~~2016~~2018 Annual Report on Form ~~10-K and should be read in conjunction with the risk factors and information described therein.~~10-K.

The spin-off of our Cars.com business and sale of our majority ownership interest in CareerBuilder has reduced the size and diversification of our business, which in turn increases our exposure to the changes and highly competitive environment of the broadcast industry.

We now operate as a single business segment which is more exposed to the increased competition and changing regulatory environment within the broadcast industry. Broadcast companies operate in a highly competitive environment and compete for audiences, advertising & marketing services revenue and quality programing. Lower audience share, declines in advertising & marketing services revenue and increased programming costs would adversely affect our business, financial condition and results of operations.

In addition, the Federal Communications Commission (FCC) and Congress are contemplating several new laws and changes to existing media ownership and other broadcast-related regulations, regarding a wide range of matters (including permitting companies to own more stations in a single market, as well as owning more stations nationwide). Changes to FCC rules may lead to additional opportunities and increased uncertainty in the industry. We cannot be assured that we will be able to compete successfully in the future against existing, new or potential competitors, or that competition and consolidation in the media marketplace will not have a material adverse effect on our business, financial condition or results of operations.

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

On September 19, 2017, we announced that our Board of Directors authorized a ~~new~~ share repurchase program for up to $300.0 million of our common stock over ~~the next~~ three years. During the ~~third~~first quarter of ~~2017,~~2019, no shares were ~~repurchased.~~repurchased and as of March 31, 2019, approximately $279.1 million remained under this program. As a result of our pending 11 station acquisition from Nexstar Media Group, we have suspended share repurchases under this program.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

~~None.~~

None.

Item 5. Other Information

~~None.~~

None.

Item 6. Exhibits



Exhibit Number	Description	Location

2-1	Asset Purchase Agreement, dated as of March 20, 2019, by and among Nexstar Media Group, Inc., Belo Holdings, Inc. and TEGNA Inc.	Attached.

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.~~July 24, 2018.	Incorporated by reference to Exhibit ~~3-2~~3-1 to TEGNA Inc.’s Form 8-K filed on ~~December 11, 2015.~~July 27, 2018.

10-1	~~Tenth Amendment, dated as~~Form of August 1, 2017, to the Amended and Restated Competitive Advance and Revolving Credit Agreement, dated as of December 13, 2004 and effective as of January 5, 2005, as amended and restated as of August 5, 2013, and as further amended, among TEGNA Inc., JPMorgan Chase Bank, N.A., as administrative agent, and the several banks and other financial institutions from time to time parties thereto.Executive Officer Performance Share Award Agreement.*	~~Attached~~Attached..

10-2	Form of Executive Officer Restricted Stock Unit Award Agreement.*	Attached.

31-1	Rule 13a-14(a) Certification of CEO.	~~Attached~~Attached..

31-2	Rule 13a-14(a) Certification of CFO.	~~Attached~~Attached..

32-1	Section 1350 Certification of CEO.	~~Attached~~Attached..

32-2	Section 1350 Certification of CFO.	~~Attached~~Attached..

101	The following financial information from TEGNA Inc. Quarterly Report on Form 10-Q for the quarter ended ~~September 30, 2017,~~March 31, 2019, formatted in XBRL includes: (i) Condensed Consolidated Balance Sheets at ~~September 30, 2017~~March 31, 2019 and December 31, ~~2016,~~2018, (ii) Consolidated Statements of Income for the ~~quarter~~three months ended March 31, 2019 and ~~year-to-date periods ended September 30, 2017 and September 30, 2016,~~2018, (iii) Consolidated Statements of Comprehensive Income for the ~~quarter~~three months ended March 31, 2019 and ~~year-to-date periods ended September 30, 2017 and September 30, 2016,~~2018, (iv) Condensed Consolidated Cash Flow Statements for the ~~year-to-date periods~~three months ended ~~September 30, 2017~~March 31, 2019 and ~~September 30, 2016,~~2018, (v) Consolidated Statements of Equity for the three months ended March 31, 2019 and ~~(v)~~2018 and (vi) the notes to unaudited condensed consolidated financial statements.	~~Attached~~Attached..

We agree to furnish to the Commission, upon request, a copy of each agreement with respect to long-term debt not filed herewith in reliance upon the exemption from filing applicable to any series of debt representing less than 10% of our total consolidated assets.

* Asterisks identify management contracts and compensatory plans or arrangements.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



Date: ~~November 8, 2017~~May 9, 2019	TEGNA INC.

	/s/ Clifton A. McClelland III
	Clifton A. McClelland III
	Senior Vice President and Controller
	(on behalf of Registrant and as Chief Accounting Officer)

3631



	TEGNA Inc. Shareholders’ Equity			Noncontrolling Interests			Total Equity

Balance at Dec. 31, 2016	$	2,271,418		$	281,587		$	2,553,005
Comprehensive income:
Net loss	(29,881		)	(58,698		)	(88,579		)
Redeemable noncontrolling interests (income not available to shareholders)	—			(2,797		)	(2,797		)
Other comprehensive income	34,241			5,819			40,060
Total comprehensive income (loss)	4,360			(55,676		)	(51,316		)
Dividends declared	(60,121		)	—			(60,121		)
Stock-based compensation	14,189			—			14,189
Treasury shares acquired	(8,453		)	—			(8,453		)
Spin-off of Cars.com	(1,510,851		)	—			(1,510,851		)
Deconsolidation of CareerBuilder	—			(225,911		)	(225,911		)
Other activity, including shares withheld for employee taxes	(4,667		)	—			(4,667		)
Balance at Sept. 30, 2017	$	705,875		$	—		$	705,875

Balance at Dec. 31, 2015	$	2,191,971		$	264,773		$	2,456,744
Comprehensive income:
Net income	303,578			40,178			343,756
Redeemable noncontrolling interests (income not available to shareholders)	—			(3,628		)	(3,628		)
Other comprehensive (loss)	(8,497		)	(3,737		)	(12,234		)
Total comprehensive income	295,081			32,813			327,894
Dividends declared	(90,755		)	—			(90,755		)
Stock-based compensation	13,216			—			13,216
Treasury shares acquired	(150,917		)	—			(150,917		)
Spin-off of Publishing businesses	(39,456		)	—			(39,456		)
Other activity, including shares withheld for employee taxes	(17,645		)	(2,923		)	(20,568		)
Balance at Sept. 30, 2016	$	2,201,495		$	294,663		$	2,496,158



	Retirement Plans			Foreign Currency Translation (1)			Other			Total

Quarters Ended:
Balance at June 30, 2017	$	(124,632	)	$	(23,608	)	$	2,364		$	(145,876	)
Other comprehensive income before reclassifications	—			1,428			—			1,428
Amounts reclassified from AOCL	1,351			22,024			—			23,375
Other comprehensive income	1,351			23,452			—			24,803
Balance at Sept. 30, 2017	$	(123,281	)	$	(156	)	$	2,364		$	(121,073	)

Balance at June 30, 2016	$	(113,854	)	$	(23,282	)	$	1,400		$	(135,736	)
Other comprehensive loss before reclassifications	—			(1,043		)	(3,743		)	(4,786		)
Amounts reclassified from AOCL	1,075			—			—			1,075
Other comprehensive income (loss)	1,075			(1,043		)	(3,743		)	(3,711		)
Balance at Sept. 30, 2016	$	(112,779	)	$	(24,325	)	$	(2,343	)	$	(139,447	)


	Retirement Plans			Foreign Currency Translation (1)			Other			Total

Nine Months Ended:
Balance at Dec. 31, 2016	$	(127,341	)	$	(28,560	)	$	(5,672	)	$	(161,573	)
Other comprehensive income (loss) before reclassifications	—			6,380			(1,707		)	4,673
Amounts reclassified from AOCL	4,060			22,024			9,743			35,827
Other comprehensive income	4,060			28,404			8,036			40,500
Balance at Sept. 30, 2017	$	(123,281	)	$	(156	)	$	2,364		$	(121,073	)

Balance at Dec. 31, 2015	$	(116,496	)	$	(20,129	)	$	5,674		$	(130,951	)
Other comprehensive loss before reclassifications	—			(4,196		)	(8,017		)	(12,213		)
Amounts reclassified from AOCL	3,717			—			—			3,717
Other comprehensive income (loss)	3,717			(4,196		)	(8,017		)	(8,496		)
Balance at Sept. 30, 2016	$	(112,779	)	$	(24,325	)	$	(2,343	)	$	(139,447	)

(1) Our entire foreign currency translation adjustment is related to our CareerBuilder investment. As a result of deconsolidating the investment due to the sale of our majority ownership, we reclassified the translation adjustment from AOCL to the Consolidated Statement of Income as of the date of sale, July 31, 2017. Due to the noncontrolling stake that we retained in CareerBuilder, we will continue to record our ownership share of foreign currently translation adjustments through our equity method investment.



	Fair Value Measurements as of Sept. 30, 2017
	Level 1		Level 2		Level 3		Total

Available for sale investment	—		—		—		—
Total	$	—	$	—	$	—	$	—

Deferred compensation investments valued using net asset value as a practical expedient:
Interest in registered investment companies							$	14,921
Fixed income fund							13,672
Total investments at fair value							$	28,593



	Quarter ended Sept. 30,						Nine months ended Sept. 30,
	2017 (1)			2016			2017 (1)			2016 (2)

Operating revenues	$	54,874		$	340,649		$	647,021		$	999,929

Cost of revenue and SG&A expenses	60,301			228,152			522,287			708,815
Depreciation	—			9,421			19,569			24,843
Amortization	—			23,385			40,300			68,159
Loss on sale of CareerBuilder	(1,872		)	—			342,900			—
Total operating expenses	58,429			260,958			925,056			801,817

Total operating (loss) income	(3,555		)	79,691			(278,035		)	198,112

Non-operating income (expense)	647			(3,304		)	(1,078		)	(8,989		)

(Loss) income from discontinued operations, before income taxes	(2,908		)	76,387			(279,113		)	189,123
Provision for income taxes	(7,895		)	(19,689		)	45,852			(56,982		)
(Loss) income from discontinued operations, net of tax	$	(10,803	)	$	56,698		$	(233,261	)	$	132,141

(1) The quarter and nine months ended September 30, 2017 include CareerBuilder’s operations through the date of sale on July 31, 2017. Cars.com operations are included in the nine months ended September 30, 2017 through the date of spin-off on May 31, 2017.
(2) The nine months ended September 30, 2016 include approximately $7.5 million of net loss from discontinued operations related to the operations of our former Sightline business through the date of sale on March 18, 2016.



				Special Items
Quarter ended September 30, 2017	GAAP measure			Operating asset impairment and facility consolidation			Other non-operating items		Tax benefits			Non-GAAP measure

Operating expenses	$	347,403		$	(7,553	)	$	—	$	—		$	339,850
Operating income	116,861			7,553			—		—			124,414
Other non-operating items	(3,671		)	—			2,688		—			(983		)
Total non-operating expense	(54,660		)	—			2,688		—			(51,972		)
Income before income taxes	62,201			7,553			2,688		—			72,442
Provision for income taxes	11,447			2,780			629		8,086			22,942
Income from continuing operations	50,754			4,773			2,059		(8,086		)	49,500
Earnings from continuing operations per share - diluted ^(a)	$	0.23		$	0.02		$	0.01	$	(0.04	)	$	0.23
(a) Per share amounts do not sum due to rounding.



				Special Items
Quarter ended September 30, 2016	GAAP measure			Severance expense			Operating asset impairment and facility consolidation			Other non-operating items		Non-GAAP measure

Operating expenses	$	333,766		$	(2,870	)	$	(15,218	)	$	—	$	315,678
Operating income	185,851			2,870			15,218			—		203,939
Other non-operating items	(11,874		)	—			—			13,161		1,287
Total non-operating expense	(70,673		)	—			—			13,161		(57,512		)
Income before income taxes	115,178			2,870			15,218			13,161		146,427
Provision for income taxes	38,441			1,112			5,900			3,515		48,968
Income from continuing operations	76,737			1,758			9,318			9,646		97,459
Earnings from continuing operations per share - diluted ^(a)	$	0.35		$	0.01		$	0.04		$	0.04	$	0.45



				Special Items
Nine Months Ended September 30, 2017	GAAP measure			Severance expense			Operating asset impairment			Other non-operating items		Tax benefits			Non-GAAP measure

Operating expenses	$	1,022,651		$	(3,053	)	$	(11,086	)	$	—	$	—		$	1,008,512
Operating income	390,052			3,053			11,086			—		—			404,191
Other non-operating items	(26,853		)	—			—			31,991		—			5,138
Total non-operating expense	(190,515		)	—			—			31,991		—			(158,524		)
Income before income taxes	199,537			3,053			11,086			31,991		—			245,667
Provision for income taxes	54,855			1,174			4,104			6,921		11,724			78,778
Income from continuing operations	144,682			1,879			6,982			25,070		(11,724		)	166,889
Earnings from continuing operations per share - diluted	$	0.66		$	0.01		$	0.03		$	0.12	$	(0.05	)	$	0.77

				Special Items
Nine Months Ended September 30, 2016	GAAP measure			Severance expense			Operating asset impairment			Equity investment impairment		Other non-operating items			Non-GAAP measure

Operating expenses	$	959,344		$	(20,118	)	$	(18,946	)	$	—	$	—		$	920,280
Operating income	497,889			20,118			18,946			—		—			536,953
Equity (loss) income in unconsolidated charges	(2,763		)	—			—			1,869		—			(894		)
Other non-operating items	(16,029		)	—			—			—		16,324			295
Total non-operating expense	(194,236		)	—			—			1,869		16,324			(176,043		)
Income before income taxes	303,653			20,118			18,946			1,869		16,324			360,910
Provision for income taxes	92,038			7,799			7,345			725		4,583			112,490
Income from continuing operations	211,615			12,319			11,601			1,144		11,741			248,420
Earnings from continuing operations per share - diluted	$	0.96		$	0.06		$	0.05		$	0.01	$	0.05		$	1.13



	Nine months ended September 30,
	2017			2016

Net cash flow from operating activities	$	351,183		$	454,763
Purchase of property and equipment	(63,846		)	(68,577		)
Free cash flow	$	287,337		$	386,186