TEGNA Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – Accounting ~~Policies~~policies

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

We operate one operating and reportable segment, which primarily consists of our 4962 television stations operating in 4151 markets, offering high-quality television programming and digital content. Our reportable segment determination is based on our management and internal reporting structure, the nature of products and services we offer, and the financial information that is evaluated regularly by our chief operating decision maker.

Accounting guidance adopted in 2019: In February 2016, the FASB issued new guidance related to leases which require lessees to recognize assets and liabilities on the balance sheet for leases with lease terms of more than 12 months. Consistent with previous GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily depends on its classification as a finance or operating lease. However, unlike previous GAAP–which requires only capital leases (renamed finance leases under the new guidance) to be recognized on the balance sheet–the new guidance requires both 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~~utilized 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 did not have a material impact on our Consolidated Statements of Income, Comprehensive Income, Cash Flows or Equity. See Note 67 for additional information.

In August 2018, the FASB issued new guidance on the accounting for implementation costs incurred in cloud computing arrangements that are service contracts. 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 implementation costs to capitalize as an asset related to the service contract. The guidance can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. We adopted the new guidance on a prospective basis beginning in the second quarter of 2019. There was no material impact to our condensed consolidated financial statements as a result of adopting this guidance.

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 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~~specifically as it relates to our allowance for accounts receivable, which we don’t anticipate having a material impact on our consolidated financial statements and related ~~disclosures.~~disclosure as of the adoption date.

In August 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 implementation costs to capitalize as an asset related to the service contract. The 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 on a prospective basis beginning in the second quarter of 2019.

In August 2018, the FASB issued new guidance that changes disclosures related to defined benefit pension and other postretirement benefit plans. The guidance removes disclosures that are no longer ~~considered cost beneficial,~~economically relevant, 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~~We plan to adopt the new guidance ~~is effective for us~~ beginning in 2020 and ~~must~~it will be applied on a retrospective basis. ~~Early adoption is permitted.~~

In March 2019, the 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 the level at which our capitalized programming assets are monitored for impairment. Under the new guidance these assets will be monitored at the film group level which is the lowest level at which independently identifiable cash flows are identifiable. ~~The~~We plan to adopt the new guidance ~~is effective for public companies~~ beginning in the first quarter of 2020 and ~~is to~~it will 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.~~disclosures as of the adoption date.

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

The primary sources of our revenues are: 1) 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 sources in the third quarter and first ~~three~~nine months of 2019 and 2018 are shown below (amounts in thousands):



	Quarter ended Sept. 30,				Nine months ended Sept. 30,
	2019		2018		2019		2018

Advertising & Marketing Services	$	297,333	$	264,852	$	851,304	$	829,638
Subscription	240,735		207,463		718,472		622,382
Political	8,131		60,410		14,064		93,725
Other	5,658		6,251		21,702		19,401
Total revenues	$	551,857	$	538,976	$	1,605,542	$	1,565,146

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 – Acquisitions

Nexstar Stations

On September 19, 2019 we completed our previously announced acquisition of 11 local television stations in eight markets, including 8 Big Four affiliates, from Nexstar Media Group (the Nexstar Stations). These stations were divested by Nexstar Media Group in connection with its acquisition of Tribune Media Company. The television stations acquired are listed in the table below:



Market	Station	Affiliation
Hartford-New Haven, CT	WTIC/WCCT	FOX/CW
Harrisburg-Lancaster-Lebanon-York, PA	WPMT	FOX
Memphis, TN	WATN/WLMT	ABC/CW
Wilkes Barre-Scranton, PA	WNEP	ABC
Des Moines-Ames, IA	WOI/KCWI	ABC/CW
Huntsville-Decatur-Florence, AL	WZDX	FOX
Davenport, IA and Rock Island-Moline, IL	WQAD	ABC
Ft. Smith-Fayetteville-Springdale-Rogers, AR	KFSM	CBS

The estimated purchase price for the Nexstar Stations is approximately $769.1 million which includes a base purchase price of $740.0 million and estimated working capital of $29.1 million. The transaction was structured as an asset purchase and financed through the use of a portion of the $1.1 billion of Senior Notes issued on September 13, 2019 and borrowing under our revolving credit facility (see Note 5). The acquisition of the Nexstar Stations adds complementary markets to our existing portfolio of top network affiliates, including 4 affiliates in presidential election battleground states.

Dispatch Stations

On August 8, 2019 we completed the previously announced acquisition of Dispatch Broadcast Group’s 2 top-rated television stations and 2 radio stations (the Dispatch Stations). Through this acquisition we purchased WTHR, the NBC affiliate station in Indianapolis, IN, WBNS, the CBS affiliate in Columbus, OH and WBNS Radio (97.1 FM and 1460 AM) in Columbus, OH.

The estimated purchase price for the Dispatch Stations is approximately $553.7 million which consists of a base purchase price of $535.0 million and estimated working capital and cash acquired of $18.7 million. The transaction was structured as a stock purchase and financed through available cash and borrowing under our revolving credit facility. The acquisition of the Dispatch Stations expands our portfolio of top-rated big four affiliates in large markets.

Justice and Quest Multicast Networks

On June 18, 2019, we completed the acquisition of the remaining approximately 85% interest that we did not previously own in the multicast networks Justice Network and Quest from Cooper Media. Justice and Quest are two leading multicast networks that offer unique ad-supported programming. Justice Network’s content is focused on true-crime genre, while Quest features factual-entertainment programs such as science, history, and adventure-reality series.

Cash paid for this acquisition was $77.2 million (which included $4.7 million for estimated working capital paid at closing), funded through available cash and borrowing under our revolving credit facility. As a result of acquiring the remaining ownership of the networks, we recognized a $7.3 million gain due to the write-up of our prior investment in the Justice Network and Quest multicast networks to its fair value at the time of the acquisition. This gain was recorded in Other non-operating items, net within the Consolidated Statement of Income.

Gray Stations

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 (the Gray Stations). The final purchase price was approximately $109.9 million, which includes working capital of approximately $4.9 million which was funded through the use of available cash and borrowing under our revolving credit facility. WTOL and KWES are strong local media brands in key markets, and they further expand our station portfolio of top 4 affiliates.

We refer to these four acquisitions collectively as the “Recent Acquisitions”.

The following table summarizes the estimated preliminary fair values of the assets acquired and liabilities assumed in connection with the Recent Acquisitions (in thousands):



	Nexstar Stations		Dispatch Stations			Justice & Quest			Gray Stations		Total
Cash	$	—	$	2,363		$	—		$	—	$	2,363
Accounts receivable	35,459		26,680			8,501			5,553		76,193
Prepaid and other current assets	4,760		6,165			6,987			988		18,900
Property and equipment	47,339		40,856			369			11,757		100,321
Goodwill	84,252		158,077			23,413			11,458		277,200
FCC licenses	415,225		298,974			—			53,378		767,577
Retransmission agreements	76,894		55,366			—			12,253		144,513
Network affiliation agreements	115,340		83,048			—			16,105		214,493
Right-of-use assets for operating leases	19,064		362			—			252		19,678
Other intangible assets	—		—			52,553			—		52,553
Other noncurrent assets	2,015		—			5,252			18		7,285
Total assets acquired	$	800,348	$	671,891		$	97,075		$	111,762	$	1,681,076
Accounts Payable	719		953			725			1		2,398
Accrued liabilities	10,086		8,917			3,973			1,606		24,582
Deferred income tax liability	—		108,132			(471		)	—		107,661
Operating lease liabilities - noncurrent	17,271		233			—			235		17,739
Other noncurrent liabilities	3,155		—			2,700			—		5,855
Total liabilities assumed	$	31,231	$	118,235		$	6,927		$	1,842	$	158,235
Net assets acquired	$	769,117	$	553,656		$	90,148		$	109,920	$	1,522,841

Less: cash acquired	$	—	$	(2,363	)	$	—		$	—	$	(2,363	)
Less: fair value of existing ownership	—		—			(12,995		)	—		(12,995		)
Cash paid for acquisitions	$	769,117	$	551,293		$	77,153		$	109,920	$	1,507,483

The fair value of the assets and liabilities identified in the table above are based on preliminary valuations. As such, our estimates are subject to change as additional information is obtained about the facts and circumstances that existed as of the acquisition dates. The purchase price allocation of each acquisition remains under evaluation as of the end of the third quarter of 2019. The primary areas which are being assessed relate to the fair value of intangible assets and working capital adjustments with some of the respective sellers.

Retransmission agreement intangible assets are amortized over periods of between five and six years while network affiliation agreements are amortized over 15 years. Other intangible assets primarily represent the fair value of distribution agreements held by Justice and Quest which will be amortized over a period of seven years. The weighted average amortization periods for each of the Recent Acquisitions are currently estimated to be: Nexstar Stations (10.8 years), Dispatch Stations (10.8 years), Justice and Quest (6.9 years) and Gray Stations (11.1 years).

Goodwill is calculated as the excess of the purchase price over the net fair value of the assets acquired and liabilities assumed, and represents the future economic benefits expected to arise from the acquisition that do not qualify for separate recognition, including assembled workforce, as well as future synergies that we expect to generate. The goodwill, the FCC licenses and other intangible assets recognized from the Nexstar Stations, Justice & Quest and Gray Stations transactions are expected to be substantially all deductible for tax purposes. Goodwill and all other intangible assets from the Dispatch Stations are not expected to be tax deductible.

Our Consolidated Statements of Income for the quarter and nine months ended September 30, 2019 include the results of the Recent Acquisitions since their respective acquisition dates as shown in the table below (in thousands):



	Quarter ended		Nine months ended
	Sept. 30, 2019		Sept. 30, 2019
Revenue	$	45,867	$	65,308
Operating Income	$	5,486	$	7,696

Acquisition-related costs incurred in connection with the Recent Acquisitions for the quarter and nine months ended September 30, 2019 were $20.0 million and $29.1 million, respectively, which have been recorded in the Corporate - General and administrative expenses, line item within the Consolidated Statements of Income.

Unaudited Supplemental Pro Forma Financial Information

The following table sets forth certain pro forma financial information for the quarter and nine-months ended September 30, 2019 and 2018 giving effect to the Recent Acquisitions as if they were all completed on January 1, 2018 (in thousands):



	Quarter ended Sept. 30,				Nine months ended Sept. 30,
	2019		2018		2019		2018
Revenue	$	605,908	$	644,893	$	1,841,373	$	1,865,893
Net income	$	42,277	$	97,290	$	185,528	$	234,626

Information for the acquisitions has been presented on a consolidated basis as the information is not material individually for any of the acquisitions. The unaudited historical results have been adjusted for business combination accounting effects, including depreciation and amortization charges from acquired intangible assets, interest on the new debt and related tax effects. The pro forma results are not necessarily indicative of what our results would have been had we completed the acquisitions on January 1, 2018, nor are they reflective of our expected results of operations for any future periods. For example, revenues and net income amounts below do not include any adjustments for expected synergies.

NOTE 23 – Goodwill and other intangible assets

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



	Sept. 30, 2019					Dec. 31, 2018
	Gross		Accumulated Amortization			Gross		Accumulated Amortization

Goodwill	$	2,874,063	$	—		$	2,596,863	$	—

Indefinite-lived intangibles:
Television and radio station FCC licenses	2,151,764		—			1,384,186		—
Amortizable intangible assets:
Retransmission agreements	266,106		(95,469		)	121,594		(79,274		)
Network affiliation agreements	324,883		(42,928		)	110,390		(30,802		)
Other	81,418		(13,091		)	28,865		(8,882		)
Total indefinite-lived and amortizable intangible assets	$	2,824,171	$	(151,488	)	$	1,645,035	$	(118,958	)

Mar. 31, 2019 Dec. 31, 2018
Gross Accumulated Amortization Gross Accumulated Amortization

Goodwill $ 2,605,863
$ —
$ 2,596,863
$ —

Indefinite-lived intangibles:
Television and radio station FCC licenses 1,437,565
—
1,384,186
—
Amortizable intangible assets:
Retransmission agreements 133,847
(83,730 ) 121,594
(79,274 )
Network affiliation agreements 126,494
(34,383 ) 110,390
(30,802 )
Other 28,864
(9,533 ) 28,865
(8,882 )
Total indefinite-lived and amortizable intangible assets $ 1,726,770
$ (127,646 ) $ 1,645,035
$ (118,958 )

Our retransmission consent contracts and network affiliation agreements are amortized on a straight-line basis over their estimated useful lives. Other intangibles primarily include distribution agreements from our Justice & Quest acquisition, customer relationships and favorable lease agreements which are also amortized on a straight-line basis over their useful lives.

~~On January 2, 2019, we completed our acquisition of WTOL, the CBS affiliate~~ Increases 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~~goodwill, indefinite-lived and amortizable intangible assets are a result of ~~$28.4 million, related~~the Recent Acquisitions discussed in Note 2 and are preliminary as we continue to ~~retransmission consent contracts~~review underlying assumptions 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.valuation methodologies utilized to calculate their respective fair values.

NOTE 34 – Investments and other assets

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



	Sept. 30, 2019		Dec. 31, 2018

Cash value life insurance	$	51,714	$	50,452
Equity method investments	12,233		22,960
Other equity investments	27,377		24,497
Deferred debt issuance costs	11,680		9,350
Other long-term assets	42,923		36,206
Total	$	145,927	$	143,465

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

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

Equity method investments: We hold several strategic equity method investments. Our largest equity method investment is our ownership in CareerBuilder, of which we own approximately 17% (or approximately 10% on a fully-diluted basis), which has an investment balance of ~~$12.9~~$9.6 million and $12.4 million as of ~~March 31,~~September 30, 2019 and December 31, 2018, respectively. Our ownership stake provides us with two seats on CareerBuilder’s board of ~~directors and thus~~directors. As a result, we concluded that we have significant influence over CareerBuilder and therefore account for our interest using the ~~entity.~~equity method of accounting.

In the first quarter of 2019, we sold our investment in Captivate, which had been accounted for as an equity method investment, for $16.2 million, which resulted in a pre-tax gain of $12.2 million (after-tax gain of $9.2 million). ~~The~~This gain ~~has been~~was recorded in ~~the~~ Equity (loss) income ~~(loss)~~ in unconsolidated investments, net ~~line item of our~~within the Consolidated Statement of Income and Statement of Cash Flows.

~~Cost method~~Other equity investments: 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 less impairments, if any, plus or minus changes in observable prices for those investments. ~~There were no~~In the second quarter of 2019, we recognized a $1.6 million gain due to one of these investments having an observable price increase. This gain was recorded in the Other non-operating items, net line item in our Consolidated Statements of Income. NaN other gains or losses ~~associated with~~were recorded on these investments in the first nine months of 2019, nor were there any gains or losses recorded during the ~~three~~nine months ended ~~March 31, 2019 and~~September 30, 2018.

NOTE 45 – Long-term debt

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



	Sept. 30, 2019			Dec. 31, 2018

Unsecured floating rate term loan due quarterly through June 2020¹	$	30,000		$	60,000
Unsecured floating rate term loan due quarterly through September 2020¹	120,000			165,000
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 2020¹	600,000			600,000
Unsecured notes bearing fixed rate interest at 4.875% due September 2021	350,000			350,000
Unsecured notes bearing fixed rate interest at 6.375% due October 2023	650,000			650,000
Borrowings under revolving credit agreement expiring August 2024	273,000			50,000
Unsecured notes bearing fixed rate interest at 5.50% due September 2024	325,000			325,000
Unsecured notes bearing fixed rate interest at 7.75% due June 2027	200,000			200,000
Unsecured notes bearing fixed rate interest at 7.25% due September 2027	240,000			240,000
Unsecured notes bearing fixed rate interest at 5.00% due September 2029	1,100,000			—
Total principal long-term debt	4,208,000			2,960,000
Debt issuance costs	(29,204		)	(15,458		)
Unamortized premiums and discounts, net	2,142			(76		)
Total long-term debt	$	4,180,938		$	2,944,466

¹We have the intent and ability to refinance the principal payments due within the next 12 months on a long-term basis through our revolving credit facility. As such, all debt presented in the table above is classified as long-term on our September 30, 2019 Condensed Consolidated Balance Sheet.

Mar. 31, 2019 Dec. 31, 2018

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
Unsecured notes bearing fixed rate interest at 4.875% due September 2021 350,000
350,000
Unsecured notes bearing fixed rate interest at 6.375% due October 2023 650,000
650,000
Unsecured notes bearing fixed rate interest at 5.50% due September 2024 325,000
325,000
Unsecured notes bearing fixed rate interest at 7.75% due June 2027 200,000
200,000
Unsecured notes bearing fixed rate interest at 7.25% due September 2027 240,000
240,000
Total principal long-term debt 2,905,000
2,960,000
Debt issuance costs (14,154 ) (15,458 )
Unamortized premiums and discounts, net 649
(76 )
Total long-term debt $ 2,891,495
$ 2,944,466

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.

On August 15, 2019, we entered into an amendment of our Amended and Restated Competitive Advance and Revolving Credit Agreement. Under the amended terms, the $1.51 billion of revolving credit commitments and letter of credit commitments

have been extended until August 15, 2024. The amendment also increased our permitted total leverage ratio as follows:



Period	Leverage Ratio
July 1, 2019 - September 30, 2020	5.50 to 1.00
October 1, 2020 - March 31, 2021	5.25 to 1.00
April 1, 2021 - September 30, 2021	5.00 to 1.00
October 1, 2021 - September 30, 2022	4.75 to 1.00
October 1, 2022 and thereafter	4.50 to 1.00

The amendment also increases the amount of unrestricted cash that we are allowed to offset debt by in our leverage ratio calculation to $500.0 million.

On September 13, 2019, we completed a private placement offering of $1.1 billion aggregate principal amount of unsecured notes bearing an interest rate of 5.00% which are due in September 2029. The net proceeds were used to finance the acquisition of the Nexstar Stations and to pay down borrowing under the revolving credit agreement.

As of ~~March 31,~~September 30, 2019, we had unused borrowing capacity of ~~$1.47~~$1.22 billion under our revolving credit facility.

On October 15, 2019 we repaid the remaining $320.0 million of our unsecured notes bearing fixed rate interest at 5.125% which had become due. Additionally, on October 18, 2019 we repaid $290.0 million of our $600.0 million unsecured notes bearing fixed interest at 5.125% which are due in July 2020. Both repayments were made by utilizing our revolving credit facility, which had an unused borrowing capacity of $618.2 million following these repayments.

NOTE 56 – 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 ~~March 31,~~September 30, 2019, were ~~$145.5~~$136.4 million, ~~($7.9~~of which $7.9 million is recorded as a current obligation within accrued liabilities on the Condensed Consolidated Balance ~~Sheet).~~Sheet.

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



	Quarter ended Sept. 30,						Nine months ended Sept. 30,
	2019			2018			2019			2018

Service cost-benefits earned during the period	$	2		$	3		$	6		$	9
Interest cost on benefit obligation	5,761			5,721			17,284			15,945
Expected return on plan assets	(6,580		)	(8,218		)	(19,740		)	(23,148		)
Amortization of prior service cost	23			42			68			126
Amortization of actuarial loss	1,521			1,271			4,562			3,814
Pension payment timing related charge	—			1,198			686			7,498
Expense for company-sponsored retirement plans	$	727		$	17		$	2,866		$	4,244

Quarter ended Mar. 31,
2019 2018

Interest cost on benefit obligation $ 5,750
$ 5,150
Expected return on plan assets (6,575 ) (7,450 )
Amortization of prior service cost 25
50
Amortization of actuarial loss 1,500
1,250
Pension payment timing related charge —
6,300
Expense for company-sponsored retirement plans $ 700
$ 5,300

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

During the ~~three~~nine months ended ~~March 31, 2019 we made no cash contributions to the TRP and made $1.7 million in cash contributions to the TRP during the three months ended March 31, 2018. During the three months ended March 31,~~September 30, 2019 and 2018, we made cash contributions of $2.4 million and $11.1 million to the TRP and benefit payments to participants of the SERP of ~~$0.9~~$6.0 million and ~~$26.7~~$32.9 million, respectively. ~~SERP payments during the three months ended 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~~$3.6 million in fourth quarter of 2019 on account of these benefit plans (comprised of payments of ~~$6.9~~$1.5 million to the TRP and $2.1 million SERP ~~participants and $3.8 million of contributions to the TRP)~~participants).

~~In the first quarter of 2018, we~~We incurred a pension payment timing related ~~charge~~charges of ~~$6.3~~$0.7 million and $7.5 million in the first nine months of 2019 and 2018, respectively, as a result of lump sum SERP payments made to certain former ~~executives. The 2018 charge was~~employees. These charges were reclassified from accumulated other comprehensive ~~income~~loss into net periodic benefit cost.

NOTE 67 – 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~~have been analyzed to determine if a lease exists depending on whether there iswas 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.~~Sheet.

Lease liabilities ~~were~~are calculated as of the ~~adoption~~lease commencement 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).~~lease. Our lease agreements often contain lease and non-lease components (e.g., common-area maintenance or other executory costs). ~~For all our leases, we~~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~~is determined using our credit rating and information available as of the ~~adoption~~lease commencement date.

The operating lease right-of-use assets as of the ~~adoption~~lease commencement date ~~were~~are 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.~~incentives. 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~~consider 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,~~September 30, 2019 (in thousands):



Assets
Right-of-use assets for operating leases	$	90,406

Liabilities
Operating lease liabilities (current)¹	9,174
Operating lease liabilities (non-current)	101,348
Total operating lease liabilities	$	110,522

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,~~September 30, 2019, the weighted-average remaining lease term for our lease portfolio was ~~11.0~~10.5 years and the weighted average discount rate used to calculate the present value of our lease liabilities was 5.4%.

For the ~~three~~nine months ended ~~March 31,~~September 30, 2019 and 2018, we recognized lease expense of $9.6 million and $13.7 million, respectively. Lease expense for the three months ended September 30, 2019 and 2018 were $3.3 million and ~~$4.4 million.~~$4.9 million, respectively. In addition, we made cash payments for operating leases of ~~$2.7~~$2.5 million and $7.6 million during the three and nine months ended ~~March 31,~~September 30, 2019, respectively, 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~~Condensed Consolidated Balance Sheet as of September 30, 2019 (in thousands):



Future Period	Cash Payments

Remaining in 2019	$	3,424
2020	15,194
2021	16,570
2022	15,575
2023	14,411
Thereafter	88,759
Total lease payments	153,933
Less: amount of lease payments representing interest	43,411
Present value of lease liabilities	$	110,522

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 78 – Accumulated other comprehensive loss

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


	Retirement Plans			Foreign Currency Translation		Total			Retirement Plans			Foreign Currency Translation			Total
Quarters Ended:
Balance at June 30, 2019									$	(134,233	)	$	39		$	(134,194	)
Other comprehensive income before reclassifications									—			(238		)	(238		)
Amounts reclassified from AOCL									1,073			—			1,073
Total other comprehensive income									1,073			(238		)	835
Balance at Sept. 30, 2019									$	(133,160	)	$	(199	)	$	(133,359	)

Balance at June 30, 2018									$	(125,288	)	$	547		$	(124,741	)
Other comprehensive income before reclassifications									—			(23		)	(23		)
Amounts reclassified from AOCL									1,851			—			1,851
Total other comprehensive income									1,851			(23		)	1,828
Balance at Sept. 30, 2018									$	(123,437	)	$	524		$	(122,913	)

									Retirement Plans			Foreign Currency Translation			Total
Nine Months Ended:
Balance at Dec. 31, 2018	$	(136,893	)	$	382	$	(136,511	)	$	(136,893	)	$	382		$	(136,511	)
Other comprehensive income before reclassifications	—			10		10			—			(581		)	(581		)
Amounts reclassified from AOCL	1,069			—		1,069			3,733			—			3,733
Total other comprehensive income	1,069			10		1,079			3,733			(581		)	3,152
Balance at Mar. 31, 2019	$	(135,824	)	$	392	$	(135,432	)
Balance at Sept. 30, 2019									$	(133,160	)	$	(199	)	$	(133,359	)

Balance at Dec. 31, 2017	$	(107,037	)	$	114	$	(106,923	)	$	(107,037	)	$	114		$	(106,923	)
Other comprehensive income before reclassifications	—			150		150			—			410			410
Amounts reclassified from AOCL	5,625			—		5,625			8,445			—			8,445
Other comprehensive income	5,625			150		5,775			8,445			410			8,855
Reclassification of stranded tax effects to retained earnings	(24,845		)	—		(24,845		)	(24,845		)	—			(24,845		)
Balance at Mar. 31, 2018	$	(126,257	)	$	264	$	(125,993	)
Balance at Sept. 30, 2018									$	(123,437	)	$	524		$	(122,913	)

NOTE 1011 – Supplemental cash flow information

The following table provides a reconciliation of cash and cash equivalents, as reported on our Condensed Consolidated Balance Sheets, to cash, cash equivalents, and restricted cash, as reported on our Condensed Consolidated Statement of Cash Flows (in thousands):



	Sept. 30, 2019		Dec. 31, 2018		Sept. 30, 2018		Dec. 31, 2017
Cash and cash equivalents	$	9,194	$	135,862	$	23,766	$	98,801
Restricted cash equivalents included in:
Prepaid expenses and other current assets	—		—		—		29,240
Cash, cash equivalents and restricted cash	$	9,194	$	135,862	$	23,766	$	128,041

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

Our restricted cash equivalents consisted of highly liquid investments that were held within a rabbi trust and were used to pay our deferred compensation and SERP obligations.

The following table provides additional information about cash flows related to ~~interest~~income taxes and ~~taxes~~interest (in thousands):



	Nine months ended Sept. 30,
	2019		2018
Supplemental cash flow information:
Cash paid for income taxes, net of refunds	$	73,457	$	51,325
Cash paid for interest	$	117,913	$	121,616

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

The timing of tax payments reflects the federal income tax payment due dates (no payments made in the first quarter; two payments made in the second quarter; and one payment will be made in each of the third and fourth quarter). The 2019 amount is primarily comprised of net tax payments of $17.7 million made during third quarter and $56.2 million of net payments made in the second quarter. In 2018, we made net tax payments of $14.3 million during third quarter and $39.8 million of net payments in the second quarter.

NOTE 1112 – 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~~On November 13 and December 13, 2018, DOJ and 7 broadcasters settled a ~~Civil Investigative Demand (CID)~~DOJ complaint alleging the exchange of competitively sensitive information in ~~connection~~the broadcast television industry. On June 17, 2019, we and 4 other broadcasters entered into a substantially identical agreement with DOJ. The settlement contains no finding of wrongdoing or liability and carries no penalty. It prohibits us and the other settling entities from sharing certain confidential business information, or using such information pertaining to other broadcasters, except under limited circumstances. The settlement also requires the settling parties to make certain enhancements to their antitrust compliance programs; to continue to cooperate with the DOJ’s ~~investigation. The~~ investigation ~~is ongoing.~~and to permit DOJ to verify compliance. We do not expect the costs of compliance to be material.

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. After TEGNA and four other broadcasters entered into consent decrees with the Department of Justice in June 2019, the plaintiffs sought leave from the court to further amend the complaint to add TEGNA and the other settling broadcasters to the proceeding. The court granted the plaintiffs’ motion, and the plaintiffs filed the second amended complaint on September 9, 2019. On October 8, 2019, the defendants jointly filed a motion to dismiss the matter. We ~~could still be named as a defendant, however,~~deny any violation of law, believe that the claims asserted in ~~this or other related suits.~~the Advertising Cases are without merit, and intend to defend ourselves vigorously against them.

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 any of the foregoing matters.

FCC Broadcast Spectrum Program

In April 2017, the 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. ~~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 1317 (which includes four of our recently acquired stations) of our existing stations will be repacked to new channels. ~~In general, television stations moving channels may have smaller service areas and/or experience additional interference; however, based~~

Based on our transition planning to date, we do not expect the repacking to have any material effect on the geographic areas or populations served by our repacked full-power stations’ over-the-air signals. If the repacking did have such an effect, our television stations moving channels could have smaller service areas and/or experience additional interference.

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. Subsequent legislation enacted on March 23, 2018, appropriated an additional $1 billion for the 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 assist affected low power television stations, television translator stations, and FM radio stations, as well as for consumer education efforts. ~~Some of our~~

television translator stations have been or will be displaced as a result of the 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 available alternative channel, which is not guaranteed).

The repacking process is scheduled to occur over a 39-month period, divided into ~~ten phases.~~10 phases, ending mid-year 2020. Our full power stations have been assigned to phases two through nine, and a majority of our remaining capital expenditures in connection with the repack will occur in 2019. To date, we have incurred approximately ~~$19.8~~$27.8 million in capital expenditures for the spectrum repack project (of which ~~$2.1~~$10.2 million was paid during the first ~~three~~nine months of 2019). We have received FCC reimbursements of approximately ~~$11.5~~$21.4 million through ~~March 31,~~September 30, 2019. The reimbursements were recorded as a contra operating expense within our Spectrum repacking reimbursements and other line item on 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 1317 repacked stations, has been allocated a reimbursement amount equal to approximately 92.5% of the station’s estimated 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 guaranteed that the FCC will approve all reimbursement requests necessary to completely reimburse each repacked station for all amounts incurred in connection with the repack.

Related Party Transactions

We have an equity and debt investment in MadHive, Inc. (MadHive) which is a related party of TEGNA. In addition to our investment, we also have a commercial agreement with MadHive where they support our Premion business in acquiring and delivering over-the-top ad impressions. In the third quarter and first nine months of 2019, we incurred expenses of $5.8 million and $21.6 million, respectively, as a result of the commercial agreement with MadHive. In the third quarter and first nine months of 2018, we incurred $1.6 million of expenses under the commercial agreement. As of September 30, 2019 and December 31, 2018 we had accounts payable and accrued liabilities associated with the commercial agreement of $2.8 million and $1.6 million, respectively.

Reduction in Force Programs

~~During the third quarter of~~In 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 Consolidated Statement of ~~Income.~~Income in the third quarter of 2018. The corporate headquarters reductions were 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 Q1the third quarter of 2019, we have a remaining accrual of approximately ~~$4.1~~$2.8 million related to these actions, substantially all of which will be paid throughout the remainder of the year.

~~Acquisitions~~

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. 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. We currently own approximately 15% of the multicast channels, and we account for our ownership interest as an equity method investment. Following the closing of the acquisition, we will consolidate all of the multicast channels financial results.

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

Company Overview

We are an innovative media company ~~serving~~that serves the greater good of our ~~communities - through~~communities. Across platforms, we tell empowering stories, conduct impactful investigations and ~~extensive~~deliver innovative marketing services. With 4962 television stations and ~~two~~four radio stations in 4151 U.S. markets, we are the largest owner of ~~big~~top four network affiliates in the top 25 markets among independent station groups, reaching approximately ~~one-third~~39% of ~~all~~U.S. television ~~households nationwide.~~households. 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 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. Through TEGNA Marketing Solutions (TMS), our integrated sales and back-end fulfillment operations, we deliver results for advertisers across television, email, social, and Over the Top (OTT) platforms, including Premion, our OTT advertising network.

We 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, 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.

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,								Two Years Ending September 30,
	2019				2018				2019				2018

Advertising & Marketing Services	54	%			60	%			53	%			57	%
Subscription	39	%	}	45%	35	%	}	39%	40	%	}	46%	37	%	}	42%
Political	6	%			4	%			6	%			5	%
Other	1	%			1	%			1	%			1	%
Total revenues	100	%			100	%			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.~~dividends.

On ~~January 2,~~September 19, 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~~completed our ~~portfolio~~previously announced acquisition 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.~~from Nexstar Media Group (the Nexstar Stations). These stations were divested by Nexstar Media Group in connection with its acquisition of Tribune Media Company. The television stations acquired through this acquisition are ~~expected to bring additional geographic diversity~~listed in the table below:



Market	Station	Affiliation
Hartford-New Haven, CT	WTIC/WCCT	FOX/CW
Harrisburg-Lancaster-Lebanon-York, PA	WPMT	FOX
Memphis, TN	WATN/WLMT	ABC/CW
Wilkes Barre-Scranton, PA	WNEP	ABC
Des Moines-Ames, IA	WOI/KCWI	ABC/CW
Huntsville-Decatur-Florence, AL	WZDX	FOX
Davenport, IA and Rock Island-Moline, IL	WQAD	ABC
Ft. Smith-Fayetteville-Springdale-Rogers, AR	KFSM	CBS

The estimated purchase price for the Nexstar Stations is approximately $769.1 million which includes a base purchase price of $740.0 million and estimated working capital of $29.1 million. The transaction was financed through the use of a portion of the $1.1 billion of Senior Notes issued on September 13, 2019 and borrowing under our revolving credit facility. The acquisition of the Nexstar Stations adds complementary markets to our existing ~~station~~ portfolio ~~and add~~of top network affiliates, including four ~~additional key markets to our strong political footprint as the 2020~~affiliates in presidential election ~~gets underway.~~battleground states.

On August 8, 2019, we completed our previously announced acquisition of Dispatch Broadcast Group’s #1 rated stations in Indianapolis, Indiana (NBC affiliate WTHR) and Columbus, Ohio (CBS affiliate WBNS). We ~~expect~~also acquired WBNS radio (1460 AM and 97.1 FM), the ~~acquisition will be EPS accretive within~~leader in sports radio in Central Ohio (collectively the Dispatch Stations). The estimated purchase price for the Dispatch Stations is $553.7 million which consists of a ~~year after close~~base purchase price of $535.0 million and ~~immediately accretive to free~~estimated working capital and cash ~~flow (see definition non-GAAP measure within Presentation~~acquired of ~~Non-GAAP information).~~$18.7 million. The acquisition of ~~these stations is contingent on~~ the ~~closing~~Dispatch Stations helps to expand our portfolio of ~~the Nexstar Media - Tribune merger, which is expected to take place~~big four affiliates in ~~the late third or early fourth quarter of 2019, and other customary closing conditions. We expect to finance the~~top markets. The transaction was financed through ~~use of~~ available cash and borrowing under our ~~existing~~revolving credit facility.

~~In addition, on May 6,~~On June 18, 2019, we ~~also announced~~completed the acquisition of the remaining approximately 85% interest that we ~~entered into definitive agreements to acquire the remaining interests that we do~~did not ~~currently~~previously own ofin the multicast ~~channels~~networks Justice Network and Quest from Cooper Media. Justice and Quest are two ~~fast growing~~leading multicast networks that ~~leverage~~offer unique ad-supported programming. Justice Network’s content is focused on true-crime genre, while Quest features factual-entertainment programs such as science, history, and adventure-reality series. Cash paid for this acquisition was $77.2 million (which included $4.7 million for estimated working capital paid at closing), funded through available cash and borrowing under our revolving credit facility.

On January 2, 2019, we completed our acquisition of WTOL, the ~~increasing numbers~~CBS affiliate in Toledo, OH, and KWES, the NBC affiliate in

Midland-Odessa, TX from Gray Television, Inc. (collectively the Gray Stations). The final purchase price was $109.9 million, which includes working capital of ~~over-the-air viewers, for~~ approximately ~~$77 million~~$4.9 million. The transaction was funded through available cash and borrowing under our revolving credit facility. WTOL and KWES are strong local media brands in ~~cash.~~key markets, and they further expand our station portfolio of top 4 affiliates.

We refer to these four acquisitions collectively as the “Recent Acquisitions”.

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 2128 titled ‘Results from Operations - Non-GAAP Information’ for additional tables presenting information which supplements our financial information provided on a GAAP basis.

As discussed above, during 2019 we acquired multiple local television stations and multicast networks. These stations and multicast networks are collectively referred to as the “Recent Acquisitions” in the discussion that follows. The inclusion of the operating results from these Recent Acquisitions for the periods subsequent to their acquisition impacts the year-to-year comparability of our consolidated operating results and most significantly in the third quarter of 2019.

Our consolidated results of operations on a GAAP basis were as follows (in thousands, except per share amounts):


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

Revenues	$	516,753		$	502,090		3	%	$	551,857		$	538,976		2	%	$	1,605,542		$	1,565,146		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	%
Cost of revenues									306,474			271,156			13	%	873,078			793,943			10	%
Business units - Selling, general and administrative expenses									78,439			76,639			2	%	223,845			229,193			(2	%)
Corporate - General and administrative expenses									29,792			17,593			69	%	60,363			41,522			45	%
Depreciation	14,917			13,471			11	%	15,381			14,262			8	%	44,831			41,594			8	%
Amortization of intangible assets	8,689			6,782			28	%	15,018			8,047			87	%	32,530			22,791			43	%
Spectrum repacking reimbursements and other	(7,013		)	—			***		(80		)	(3,005		)	(97	%)	(11,399		)	(9,331		)	22	%
Total operating expenses	$	384,104		$	365,075		5	%	$	445,024		$	384,692		16	%	$	1,223,248		$	1,119,712		9	%

Total operating income	$	132,649		$	137,015		(3	%)	$	106,833		$	154,284		(31	%)	$	382,294		$	445,434		(14	%)

Non-operating expenses	(35,896		)	(61,443		)	(42	%)	(53,408		)	(47,669		)	12	%	(127,282		)	(142,980		)	(11	%)
Provision for income taxes	22,774			20,385			12	%	5,079			13,789			(63	%)	52,732			61,929			(15	%)
Net income	$	73,979		$	55,187		34	%
Net income from continuing operations									$	48,346		$	92,826		(48	%)	$	202,280		$	240,525		(16	%)

Earnings per share - basic	$	0.34		$	0.26		31	%
Earnings per share - diluted	$	0.34		$	0.25		36	%
Earnings from continuing operations per share - basic									$	0.22		$	0.43		(49	%)	$	0.93		$	1.11		(16	%)
Earnings from continuing operations per share - diluted									$	0.22		$	0.43		(49	%)	$	0.93		$	1.11		(16	%)

*** 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.

Our revenues and operating results are subject to seasonal fluctuations. Generally, our second and fourth quarter revenues and operating results are stronger than those we report for the first and third quarter. This is driven by the second quarter reflecting increased spring seasonal advertising, while the fourth quarter typically includes increased advertising related to the holiday season. In even years, our advertising revenue benefits significantly from the Olympics when carried on NBC, our largest network affiliation. To a lesser extent, the Super Bowl can influence our advertising results, the degree to which depending on which network broadcast’s the event. In addition, our revenue and operating results are subject to significant fluctuations across yearly periods resulting from political advertising. In even numbered years, political spending is usually significantly higher than in odd numbered years due to advertising for the local and national elections. Additionally, every four years, we typically experience even greater increases in political advertising in connection with the presidential election. The strong demand for advertising from political advertisers in these even years can result in the significant use of our available inventory (leading to a “crowd out” effect), which can diminish our AMS revenue from our non-political advertising customers in the even year of a two year election cycle, particularly in the fourth quarter of those years.

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


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

Advertising & Marketing Services	$	264,402	$	282,939	(7	%)	$	297,333	$	264,852	12	%	$	851,304	$	829,638	3	%
Subscription	241,575		205,556		18	%	240,735		207,463		16	%	718,472		622,382		15	%
Political	2,704		7,606		(64	%)	8,131		60,410		(87	%)	14,064		93,725		(85	%)
Other	8,072		5,989		35	%	5,658		6,251		(9	%)	21,702		19,401		12	%
Total revenues	$	516,753	$	502,090	3	%	$	551,857	$	538,976	2	%	$	1,605,542	$	1,565,146	3	%

Total revenues increased ~~$14.7~~$12.9 million ~~or 3%,~~ in the ~~first~~third quarter of 2019 compared to the same period in 2018. Our Recent Acquisitions contributed total revenues of $45.9 million in the third quarter of 2019. Excluding Recent Acquisitions, total revenues decreased $33.0 million. This ~~net increase~~decrease was primarily due to a $53.1 million reduction in political advertising, reflecting significantly fewer elections compared to 2018. This decrease was partially offset by an increase in subscription revenue of ~~$36.0~~$19.1 million, ~~or 18%,~~primarily due to annual rate increases under existing retransmission agreements.

In the first nine months of 2019, revenues increased $40.4 million compared to the same period in 2018. Our Recent Acquisitions contributed total revenues of $65.3 million in the first ~~quarter~~nine months of 2019. Excluding our Recent Acquisitions, total revenues decreased $24.9 million. This decrease was primarily due to lower political revenue, which decreased $80.5 million. Also contributing to the overall revenue decrease was a decrease in AMS revenue of $21.1 million, primarily due to the absence of Winter Olympic and lower Super Bowl advertising. We estimate the incremental sports combined for approximately $16.0 million of added revenue in 2018. This decrease was partially offset by increased subscription revenue of $74.7 million in the first nine months 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~~$35.3 million ~~or 9%,~~ in the ~~first~~third quarter of 2019 compared to the same period in 2018. Our Recent Acquisitions added cost of revenues of $24.7 million in the third quarter of 2019. Excluding Recent Acquisitions, cost of revenues increased $10.6 million. The increase was primarily due to a ~~$21.1~~$14.0 million increase in programming costs, ~~(due~~due to the growth in subscription revenues. Partially offsetting this increase was a reduction of $6.3 million of digital costs as a result of the reduction in force and ~~recent acquisitions)~~rebranding of our digital business unit during the fourth quarter of 2018 (see Note 12).

In the first nine months of 2019, cost of revenues increased $79.1 million compared to the same period in 2018. Our Recent Acquisitions added cost of revenues of $35.8 million in the first nine months of 2019. Excluding Recent Acquisitions, cost of revenues increased $43.3 million. This increase was primarily due to a $46.3 million increase in programming costs, due to the growth in subscription revenues. Partially offsetting this increase was a reduction of $9.6 million of digital costs for the same reason noted above.

Business Units - Selling, General and Administrative Expenses

Business unit selling, general and administrative (SG&A) expenses ~~decreased $2.2~~increased $1.8 million ~~or 3%,~~ in the ~~first~~third quarter of 2019 compared to the same period in 2018. Our Recent Acquisitions added business unit SG&A expenses of $6.8 million in the third quarter of 2019. Excluding Recent Acquisitions, SG&A expenses decreased $5.0 million. The decrease was primarily due to $2.4 million of lower severance, legal, and professional costs.

In the ~~absence~~first nine months of ~~sale~~2019, business unit SG&A expenses ~~associated with incremental Olympic, Super Bowl, and political related revenue~~decreased $5.3 million compared to the same period in 2018. ~~These declines were partially offset~~Our Recent Acquisitions added business unit SG&A expenses of $9.8 million. Excluding the Recent Acquisitions, SG&A expenses decreased $15.1 million. The decrease was primarily the result of a $8.4 million net decrease mostly driven by ~~costs associated with~~ the ~~recent acquisitions.~~decrease of legal and professional costs.

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 Statement of Income. This category primarily consists of broad corporate management functions including ~~legal, human resources,~~Legal, Human Resources, and ~~finance,~~Finance, as well as activities and costs not directly attributable to the operations of our media business. In addition, beginning in the first quarter of 2019, we now record ~~transaction~~acquisition-related costs within our Corporate operating expense due to their recurring ~~nature as we have recently become more acquisitive with regards~~nature. Prior to ~~acquisitions. Previously, transaction~~the first quarter of 2019, such costs were recorded as other non-operating expense.

Corporate general and administrative expenses increased ~~$2.0~~$12.2 million ~~or 16%,~~ in the ~~first~~third quarter of 2019 compared to the same period in 2018. The increase was primarily driven by ~~$3.9~~$20.0 million of ~~transaction~~acquisition-related costs ~~(primarily due to~~associated with the ~~WTOL~~Recent Acquisitions and ~~KWES acquisitions). Offsetting these expenses were cost savings as a result~~strategic initiatives. Partially offsetting this increase was the absence of ~~right sizing our corporate function mostly driven by a reduction~~$5.5 million of severance expense incurred in ~~force in the~~ third quarter of 2018.

~~Depreciation Expense~~

~~Depreciation expense increased by $1.4 million, or 11%, in~~In the first ~~quarter~~nine months of 2019, corporate general and administrative expenses increased $18.8 million compared to the same ~~periods~~period in 2018. The increase was primarily due to $29.1 million in acquisition-related costs associated with Recent Acquisitions and strategic initiatives. Partially offsetting this increase was the ~~assets acquired~~absence of $5.3 million of severance expense incurred in third quarter of 2018.

Depreciation Expense

Depreciation expense increased by $1.1 million in the ~~recent station acquisitions.~~third quarter of 2019 compared to the same period in 2018. Our Recent Acquisitions added depreciation expense of $1.6 million. Excluding the impact of Recent Acquisitions, there was no material change in our depreciation expense.

In the first nine months of 2019, depreciation expense increased $3.2 million compared to the same period in 2018. Our Recent Acquisitions added depreciation expense of $2.6 million. Excluding the impact of Recent Acquisitions, there was no material change in our depreciation expense.

Amortization Expense

Amortization expense increased ~~$1.9~~$7.0 million ~~or 28%,~~ in the ~~first~~third quarter of ~~2019. The increase was primarily due~~2019 compared to ~~incremental~~the same period in 2018. Our Recent Acquisitions added amortization expense ~~resulting from~~of $7.3 million. Excluding the impact of Recent Acquisitions, there was no material change in our ~~recent station acquisitions.~~amortization expense.

In the first nine months of 2019, amortization expense increased $9.7 million as compared to the same periods in 2018. Our Recent Acquisitions added amortization expense of $9.4 million. Excluding the impact of Recent Acquisitions, there was no material change in our amortization expense in either period.

See Note 2 to the condensed consolidated financial statements for more information regarding our preliminary purchase accounting for the Recent Acquisitions.

Spectrum Repacking Reimbursements and Other

Spectrum repacking reimbursements and other

~~We had $7.0 million of other gains~~ was immaterial in the ~~first~~third quarter of ~~2019.~~2019 compared to $3.0 million in the same period in 2018. The 2019 ~~gains primarily consist~~activity consists of ~~$4.1~~$5.5 million of ~~gains due to~~ reimbursements received from the Federal Communications Commission (FCC) for required spectrum repacking. ~~We also had~~This gain was offset by a one-time contract termination and incremental transition costs of $5.5 million related to bringing our national sales organization in-house. The 2018 activity reflects reimbursements received from the FCC for required spectrum repacking.

In the first nine months of 2019, we recognized net gains of $11.4 million, compared to $9.3 million recognized in the same period in 2018. The 2019 net gains primarily consist of $14.0 million of reimbursements received from the FCC for required spectrum repacking and a gain of $2.9 million as a result of the sale of certain real estate. These gains were partially offset by $5.5 million in one-time contract termination and incremental transition costs discussed above. The 2018 net gains primarily consist of a gain recognized on the sale of real estate in Houston and gains due to reimbursements received from the FCC for required spectrum repacking.

Operating Income

Our operating income decreased ~~$4.4~~$47.5 million ~~or 3%,~~ in the ~~first~~third quarter of 2019 compared to the same period in 2018. Results from our Recent Acquisitions added operating income of $5.5 million in the third quarter of 2019. Excluding the 2019 acquisitions, operating income decreased $53.0 million in the third quarter of 2019 compared to the same period in 2018. The decrease was driven by the changes in revenue and expenses discussed ~~above. The revenue increase~~above, most notably the decline of ~~$14.7~~high margin political advertising.

Our operating income decreased $63.1 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 26%~~ in the first ~~quarter~~nine months of 2019 as compared to ~~27%~~the same period in 2018. Our Recent Acquisitions added operating income of $7.7 million in the first ~~quarter~~nine months of ~~2018.~~2019. Excluding the Recent Acquisitions, total operating income decreased $70.8 million in the first nine months compared to the same period. The decrease was driven by the changes in revenue and expenses discussed above, most notably the decline of high margin political advertising, as well as the absence of Winter Olympic and lower Super Bowl advertising.

Non-Operating Expenses

Non-operating expenses ~~decreased $25.5~~increased $5.7 million ~~or 42%,~~ in the ~~first~~third quarter of 2019 compared to the same period in 2018. This increase was primarily due to a $4.2 million increase in interest expense that was driven by higher average outstanding debt (driven by Recent Acquisitions). Total average outstanding debt was $3.38 billion for the third quarter of 2019, compared to $3.08 billion in the same period of 2018. The weighted average interest rate on total outstanding debt was 5.91% for the third quarter of 2019, compared to 5.89% in the same period of 2018.

In the first nine months of 2019, non-operating expenses decreased $15.7 million compared to the same period in

2018. This decrease was primarily due to ~~an increase~~the absence of $13.2 million acquisition-related costs which were classified as non-operating in ~~equity earnings of $13.3 million due to~~2018 but are now classified as a ~~$12.2~~corporate operating cost, and a $7.3 million gain recognized as a result of a gain from the ~~sale~~acquisition of ~~our interest in Captivate~~Justice and Quest multicast networks recognized in the ~~first~~second quarter of 2019. ~~Also contributing to the~~Partially offsetting this decrease was ~~the absence~~a decrease in ~~2019~~equity income 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~~$4.2 million. Interest expense was ~~also partially due to a decline in interest expense of $1.3~~approximately $145.0 million in ~~2019 driven by lower~~each period. The average debt outstanding ~~partially offset by slightly higher interest rates. The total average outstanding debt~~ was ~~$2.95~~$3.08 billion for the first ~~quarter~~nine months of 2019, compared to $3.13 billion in the same period of 2018. The weighted average interest rate on total outstanding debt was ~~6.05%~~6.00% for the first ~~quarter~~nine months of 2019, compared to ~~5.84%~~5.87% in the same period of 2018.

Income Tax Expense

Income tax expense ~~increased $2.4~~decreased $8.7 million ~~or 12%,~~in the third quarter of 2019 compared to the same period in 2018 and decreased $9.2 million in the first ~~quarter~~nine months of 2019 compared to the same period in 2018. The ~~increase was~~decreases were primarily due to ~~increases~~decreases in net income before tax. Our ~~reported~~ effective income tax rate was ~~23.5%~~9.5% for the ~~first~~third quarter of 2019, compared to ~~27.0% for continuing operations~~12.9% for the ~~first~~third quarter of 2018. The tax rate for the ~~first~~third quarter of 2019 is lower than the comparable rate in 2018 primarily as a result of the ~~revaluation~~release of ~~deferred taxes in 2018~~certain tax reserves due to a state audit settlement and the expiration of a statute of limitations. In addition, we realized discrete tax benefits related to one of the Recent Acquisitions and a previously-disposed business. Our effective income tax rate was 20.7% for the ~~increase in~~first nine months of 2019, which is comparable to the effective ~~state~~ tax rate ~~due to~~of 20.5% for the ~~acquisition~~same period of ~~KFMB.~~2018.

Net Income

~~Net income~~Income from continuing operations was ~~$74.0~~$48.3 million, or ~~$0.34~~$0.22 per diluted share, in the ~~first~~third quarter of 2019 compared to ~~$55.2~~$92.8 million, or ~~$0.25~~$0.43 per diluted share, during the same period in 2018. For the first nine months of 2019, we reported net income from continuing operations of $202.3 million, or $0.93 per diluted share, compared to $240.5 million, or $1.11 per diluted share, for the same period in 2018. Both income and earnings per share were affected by the factors discussed above.

The weighted average number of diluted common shares outstanding in the ~~first~~third quarter of 2019 and 2018 was ~~217.2~~218.3 million and ~~217.0~~216.3 million, respectively. The weighted average number of diluted shares outstanding in the first nine months of 2019 and 2018 was 217.8 million and 216.6 million, 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 company performance. Furthermore, the 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, free cash flow and 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 also believe these non-GAAP measures are frequently used by investors, securities analysts and other interested parties in their evaluation of our business and other companies in the broadcast industry.

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 spectrum repacking reimbursements and other, gains on sale of equity method investments, ~~transaction~~acquisition-related costs, severance 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 the tax impacts related to the Recent Acquisitions (including the 2018 acquisition of ~~KFMB.~~KFMB), adjustments related to previously-disposed businesses, and adjustments related to provisional tax impacts of tax reform.

We believe that such expenses and gains are not indicative of normal, ongoing operations. 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 depending on specific underlying transactions or events that may occur. Therefore, while we may incur or recognize these types of expenses 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 before (1) interest expense, (2) income taxes, (3) equity income (loss) in unconsolidated investments, net, (4) other non-operating items, net, (5) severance expense, (6) ~~transaction~~acquisition-related costs, (7) spectrum repacking reimbursements and other, (8) depreciation and (9) amortization. We believe these adjustments facilitate company-to-company operating performance comparisons by removing potential differences caused by variations unrelated to operating performance, such as capital structures (interest expense), income taxes, and the age and book appreciation of property/equipment (and related depreciation expense). The most directly comparable GAAP financial measure to Adjusted EBITDA is Net 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 alternate to net income as a measure of operating

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 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. 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 media business.

We also discuss free cash flow, a non-GAAP 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~~reflects 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.~~income from continuing operations. Free cash flow is now calculated as non-GAAP Adjusted EBITDA (as defined above), further adjusted by adding back (1) stock-based compensation, (2) non-cash 401(k) company match, (3) syndicated programming amortization, ~~(3)~~(4) pension reimbursements, (5) dividends received from equity method investments ~~(4) pension reimbursements,~~ and ~~(5)~~(6) reimbursements from spectrum repacking. This is further adjusted by deducting payments made for (1) syndicated programming, (2) pension, (3) interest, (4) taxes (net of refunds) and (5) purchases of property and 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 affecting reported results~~Special Charges Affecting Reported Results

Our results ~~for the quarter ended March 31, 2019~~ included the following items we consider “special items” that while ~~not always non-recurring,~~at times recurring, can vary significantly from period to period:

Quarter and first nine months ended September 30, 2019:

Severance expense which include payroll and related benefit costs at our stations and corporate headquarters;

Acquisition-related costs associated with business acquisitions;

Spectrum repacking reimbursements and 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~~repacking, and a one-time contract termination and incremental transition costs ~~associated with business acquisitions;~~related to bringing our national sales organization in-house;

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 gains from equity method investments and a charitable donation made to the TEGNA ~~Foundation.~~Foundation; and

Realization of discrete tax benefits related to one of the Recent Acquisitions and a previously-disposed business.

~~Our results~~

Quarter and first nine months ended September 30, 2018:

Severance expense which include payroll and related benefit costs due to restructuring at our DMS business and at our corporate headquarters;

Spectrum repacking reimbursements and other primarily consists of a gain recognized on the sale of real estate in Houston and gains due to reimbursements from the FCC for required spectrum repacking. These gains are partially offset by an early lease termination payment;

Other non-operating items associated with business acquisition-related costs, a deferred tax provision impact related

to our acquisition of KFMB, and a charitable donation made to 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:~~

TEGNA Foundation;

Pension lump-sum payment charge as a result of payments that were made to certain SERP plan participants in early 2018;

~~and~~

~~Other non-operating items associated with transaction costs and a deferred tax provision impact~~A gain recognized in our equity income in unconsolidated investments, related to our ~~acquisition~~share of CareerBuilder’s gain on the

~~KFMB.~~sale of their EMSI business; and

Deferred tax benefits related to adjusting the provisional tax impacts of tax reform (enacted in December 2017) and a partial capital loss valuation allowance release, both resulting from the completion of our 2017 federal income tax return in the third quarter of 2018.

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 of Income follow (in thousands, except per share amounts):


				Special Items																		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
Quarter ended September 30, 2019																			GAAP measure			Acquisition-related costs			Spectrum repacking reimbursements and other			Special tax benefits			Non-GAAP measure

Corporate - General and administrative expenses, exclusive of depreciation	$	14,735		$	—		$	(3,911	)	$	—		$	—	$	10,824
Corporate - General and administrative expenses																			$	29,792		$	(19,973	)	$	—		$	—		$	9,819
Spectrum repacking reimbursements and other	(7,013		)	7,013			—			—			—		—				(80		)	—			80			—			—
Operating expenses	384,104			7,013			(3,911		)	—			—		387,206				445,024			(19,973		)	80			—			425,131
Operating income	132,649			(7,013		)	3,911			—			—		129,547				106,833			19,973			(80		)	—			126,726
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		)		(53,408		)	—			—			—			(53,408		)
Income before income taxes	96,753			(7,013		)	3,911			(13,126		)	1,000		81,525				53,425			19,973			(80		)	—			73,318
Provision for income taxes	22,774			(1,758		)	979			(3,169		)	251		19,077				5,079			3,889			(3		)	5,992			14,957
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
Net income from continuing operations																			48,346			16,084			(77		)	(5,992		)	58,361
Net income from continuing operations per share-diluted ^(a)																			$	0.22		$	0.07		$	—		$	(0.03	)	$	0.27
																									��
(a) Per share amounts do not sum due to rounding.																		^(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.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

For quantitative and qualitative disclosures about market risk, refer to the following section of our 2018 Annual Report on Form 10-K: “Item 7A. Quantitative and Qualitative Disclosures about Market Risk.” Our exposures to market risk have not changed materially since December 31, 2018.

As of ~~March 31,~~September 30, 2019, approximately ~~$2.69~~$3.79 billion of our debt has a fixed interest rate (which represents approximately ~~92%~~90% of our total principal debt obligation). Our remaining debt obligation of ~~$220~~$423 million has floating 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 annual interest expense of approximately ~~$1.1~~$2.1 million. The fair value of our total debt, based on bid and ask quotes for the related debt, totaled ~~$2.98~~$4.32 billion as of ~~March 31,~~September 30, 2019 and $2.96 billion as of December 31, 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 ~~March 31,~~September 30, 2019. Based on that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective, as of ~~March 31,~~September 30, 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~~On September 19, 2019 we completed our acquisition from Nexstar Media Group of 11 local television stations in eight markets (the Nexstar Stations). In addition, on August 8, 2019 we completed our acquisition of Dispatch Broadcast Group’s two top-rated television stations and two radio stations (the Dispatch Stations). On June 18, 2019, we completed the acquisition of the remaining approximately 85% interest that we did not previously own in the multicast networks Justice Network and Quest (the Justice and Quest Networks) from Cooper Media. See Note 2 to the condensed consolidated financial statements for additional information on these three acquisitions. On a combined basis, the Nexstar Stations, Dispatch Stations and Justice and Quest Networks constitute approximately 23% of the Company’s total assets, 3% of total liabilities, and less than 7% of revenues for the three and nine months ended September 30, 2019.

We are in the process of evaluating the existing controls and procedures of these acquired businesses and integrating the acquired businesses into our system of internal control over financial reporting. In accordance with SEC Staff guidance permitting a company to exclude an acquired business from management’s assessment of the effectiveness of internal control over financial reporting for the year in which the acquisition is completed, we have excluded from the above assessment of the Company’s disclosure controls and procedures the disclosure controls and procedures of these acquired businesses that are subsumed by internal control over financial reporting.

Other than the implementation of controls at the acquired Nexstar and Dispatch Stations and Justice and Quest Networks businesses, 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

See Note 1112 to the condensed consolidated financial statements for information regarding our legal 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 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. We do not believe that there have been any material changes from the risk factors previously disclosed in our 2018 Annual Report on Form 10-K.

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

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~~third quarter of 2019, no shares were repurchased and as of ~~March 31,~~September 30, 2019, approximately $279.1 million remained under this program. As a result of our ~~pending 11 station acquisition from Nexstar Media Group,~~Recent Acquisitions, we have suspended share repurchases under this program.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

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

4-1	Thirteenth Supplemental Indenture, dated as of September 13, 2019, between TEGNA Inc. and U.S. Bank National Association, as Trustee.	Attached.

10-1	~~Form~~Twelfth Amendment, dated as of Executive Officer Performance Share Award Agreement.*August 15, 2019, to the Amended and Restated Competitive Advance and Revolving Credit Agreement, dated as of December 13, 2004 and effective as of January 5, 2015, as amended and restated as of August 5, 2013, as further amended as of June 29, 2015, as further amended as of August 1, 2017, and as further amended as of June 21, 2018, 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.	Attached.

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

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

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

32-1	Section 1350 Certification of CEO.	Attached.

32-2	Section 1350 Certification of CFO.	Attached.

~~101~~101.INS	~~The following financial information from TEGNA Inc. Quarterly Report on Form 10-Q for~~XBRL Instance Document - the ~~quarter ended March 31, 2019, formatted~~instance document does not appear in the Interactive Data File because its XBRL ~~includes: (i) Condensed Consolidated Balance Sheets at March 31, 2019 and December 31, 2018, (ii) Consolidated Statements of Income for~~tags are embedded within the three months ended March 31, 2019 and 2018, (iii) Consolidated Statements of Comprehensive Income for the three months ended March 31, 2019 and 2018, (iv) Condensed Consolidated Cash Flow Statements for the three months ended March 31, 2019 and 2018, (v) Consolidated Statements of Equity for the three months ended March 31, 2019 and 2018 and (vi) the notes to unaudited condensed consolidated financial statements.Inline XBRL document.	Attached.

101.SCH	XBRL Taxonomy Extension Schema Document.	Attached.

101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.	Attached.

101.DEF	XBRL Taxonomy Extension Definition Document.	Attached.

101.LAB	XBRL Taxonomy Extension Label Linkbase Document.	Attached.

101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.	Attached.

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).	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: ~~May 9,~~November 7, 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)

3140



Delaware			16-0442930
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

8350 Broad Street, Suite 2000,	Tysons,	Virginia	22102-5151
(Address of principal executive offices)			(Zip Code)

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



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

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



Large accelerated filer	x☒	Accelerated filer	¨☐

Non-accelerated filer	¨☐	Smaller reporting company	¨☐

		Emerging growth company	¨☐



~~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~~


	Mar. 31, 2019			Dec. 31, 2018			Sept. 30, 2019			Dec. 31, 2018
	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	3,818		$	135,862		$	9,194		$	135,862
Accounts receivable, net of allowances of $3,661 and $3,090, respectively	454,861			425,404
Accounts receivable, net of allowances of $5,269 and $3,090, respectively							521,118			425,404
Other receivables	18,741			20,967			29,234			20,967
Programming rights	23,908			35,252
Syndicated programming rights							63,263			35,252
Prepaid expenses and other current assets	18,071			17,737			25,522			17,737
Total current assets	519,399			635,222			648,331			635,222
Property and equipment
Cost	883,828			858,170			986,263			858,170
Less accumulated depreciation	(496,511		)	(482,955		)	(515,436		)	(482,955		)
Net property and equipment	387,317			375,215			470,827			375,215
Intangible and other assets
Goodwill	2,605,863			2,596,863			2,874,063			2,596,863
Indefinite-lived and amortizable intangible assets, less accumulated amortization	1,599,124			1,526,077			2,672,683			1,526,077
Right-of-use assets for operating leases	72,160			—			90,406			—
Investments and other assets	139,886			143,465			145,927			143,465
Total intangible and other assets	4,417,033			4,266,405			5,783,079			4,266,405
Total assets	$	5,323,749		$	5,276,842		$	6,902,237		$	5,276,842


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


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


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, 2019 and December 31, 2018	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, 2019 and 2018	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, 2019 and 2018	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, 2019 and 2018	7

	Consolidated Statements of Equity for the Three Months Ended March 31, 2019 and 2018	8	Consolidated Statements of Equity for the Quarters and Nine Months Ended September 30, 2019 and 2018	8

	Notes to Condensed Consolidated Financial Statements	9	Notes to Condensed Consolidated Financial Statements	10

2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23

3.	Quantitative and Qualitative Disclosures about Market Risk	28	Quantitative and Qualitative Disclosures about Market Risk	37

4.	Controls and Procedures	28	Controls and Procedures	37

	PART II. OTHER INFORMATION		PART II. OTHER INFORMATION

1.	Legal Proceedings	29	Legal Proceedings	38

1A.	Risk Factors	29	Risk Factors	38

2.	Unregistered Sales of Equity Securities and Use of Proceeds	29	Unregistered Sales of Equity Securities and Use of Proceeds	38

3.	Defaults Upon Senior Securities	29	Defaults Upon Senior Securities	38

4.	Mine Safety Disclosures	29	Mine Safety Disclosures	38

5.	Other Information	29	Other Information	38

6.	Exhibits	30	Exhibits	39

SIGNATURE	SIGNATURE	31	SIGNATURE	40


Quarters Ended:																		Common stock		Additional paid-in capital			Retained earnings			Accumulated other comprehensive income (loss)			Treasury stock			Total
Balance at June 30, 2019																		$	324,419	$	256,024		$	6,553,149		$	(134,194	)	$	(5,519,656	)	$	1,479,742
Net Income																							48,346									48,346
Other comprehensive income, net of tax																										835						835
Total comprehensive income																																49,181
Dividends declared: $0.07 per share																							(15,174		)							(15,174		)
Company stock 401(k) contribution																				(7,794		)							11,036			3,242
Stock-based awards activity																				(763		)							711			(52		)
Stock-based compensation																				4,445												4,445
Other activity																				312												312
Balance at Sept. 30, 2019																		$	324,419	$	252,224		$	6,586,321		$	(133,359	)	$	(5,507,909	)	$	1,521,696
	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

Balance at June 30, 2018																		$	324,419	$	304,066		$	6,201,694		$	(124,741	)	$	(5,588,527	)	$	1,116,911
Net Income						73,979									73,979								97,151									97,151
Other comprehensive income, net of tax									1,079						1,079											1,828						1,828
Total comprehensive income															75,058																	98,979
Dividends declared: $0.07 per share						(15,139		)							(15,139		)						(15,070		)							(15,070		)
Stock-based awards activity			(43,275		)							42,937			(338		)			(2,625		)							2,751			126
Stock-based compensation			4,433												4,433					4,325												4,325
Other activity			313												313					312												312
Balance at Mar. 31, 2019	$	324,419	$	262,823		$	6,488,352		$	(135,432	)	$	(5,534,911	)	$	1,405,251
Balance at Sept. 30, 2018																		$	324,419	$	306,078		$	6,283,775		$	(122,913	)	$	(5,585,776	)	$	1,205,583



	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



TEGNA Inc.
CONSOLIDATED STATEMENTS OF EQUITY
Unaudited, in thousands of dollars, except per share data

Nine Months Ended:	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						202,280									202,280
Other comprehensive income, net of tax									3,152						3,152
Total comprehensive income															205,432
Dividends declared: $0.21 per share						(45,471		)							(45,471		)
Company stock 401(k) contribution			(15,053		)							21,539			6,486
Stock-based awards activity			(48,899		)							48,400			(499		)
Stock-based compensation			13,887												13,887
Other activity			937												937
Balance at Sept. 30, 2019	$	324,419	$	252,224		$	6,586,321		$	(133,359	)	$	(5,507,909	)	$	1,521,696


Balance at Dec. 31, 2017	$	324,419	$	382,127		$	6,062,995		$	(106,923	)	$	(5,667,577	)	$	995,041
Net Income						244,850									244,850
Other comprehensive income, net of tax									8,855						8,855
Total comprehensive income															253,705
Cumulative effects of accounting changes						21,121			(24,845		)				(3,724		)
Dividends declared: $0.21 per share						(45,191		)							(45,191		)
Treasury stock acquired												(5,831		)	(5,831		)
Stock-based awards activity			(89,921		)							87,632			(2,289		)
Stock-based compensation			12,292												12,292
Other activity			1,580												1,580
Balance at Sept. 30, 2018	$	324,419	$	306,078		$	6,283,775		$	(122,913	)	$	(5,585,776	)	$	1,205,583



	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



				Special Items
Quarter ended September 30, 2018	GAAP measure			Severance expense			Spectrum repacking reimbursements and other			Pension payment timing related charge			Special tax benefits			Non-GAAP measure

Cost of revenues	$	306,474		$	(931	)	$	—		$	—		$	—		$	305,543
Business units - Selling, general and administrative expenses	78,439			(875		)	—			—			—			77,564
Corporate - General and administrative expenses	17,593			(5,481		)	—			—			—			12,112
Spectrum repacking reimbursements and other	(3,005		)	—			3,005			—			—			—
Operating expenses	384,692			(7,287		)	3,005			—			—			380,410
Operating income	154,284			7,287			(3,005		)	—			—			158,566
Other non-operating items, net	(214		)	—			—			1,198			—			984
Total non-operating expense	(47,669		)	—			—			1,198			—			(46,471		)
Income before income taxes	106,615			7,287			(3,005		)	1,198			—			112,095
Provision for income taxes	13,789			1,714			(800		)	301			9,657			24,661
Net income from continuing operations	92,826			5,573			(2,205		)	897			(9,657		)	87,434
Net income from continuing operations per share-diluted ^(a)	$	0.43		$	0.03		$	(0.01	)	$	—		$	(0.04	)	$	0.40

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

				Special Items
Nine months ended September 30, 2019	GAAP measure			Severance expense			Acquisition-related costs			Spectrum repacking reimbursements and other			Gains on equity method investments			Other non-operating items			Special tax benefits			Non-GAAP measure

Cost of revenues	$	873,078		$	(875	)	$	—		$	—		$	—		$	—		$	—		$	872,203
Business units - Selling, general and administrative expenses	223,845			(376		)	—			—			—			—			—			223,469
Corporate - General and administrative expenses	60,363			(201		)	(29,092		)	—			—			—			—			31,070
Spectrum repacking reimbursements and other	(11,399		)	—			—			11,399			—			—			—			—
Operating expenses	1,223,248			(1,452		)	(29,092		)	11,399			—			—			—			1,204,103
Operating income	382,294			1,452			29,092			(11,399		)	—			—			—			401,439
Equity income in unconsolidated investments, net	10,922			—			—			—			(13,126		)	—			—			(2,204		)
Other non-operating items, net	6,962			—			—			—			—			(6,285		)	—			677
Total non-operating expense	(127,282		)	—			—			—			(13,126		)	(6,285		)	—			(146,693		)
Income before income taxes	255,012			1,452			29,092			(11,399		)	(13,126		)	(6,285		)	—			254,746
Provision for income taxes	52,732			359			5,931			(2,850		)	(3,169		)	(1,574		)	5,992			57,421
Net income from continuing operations	202,280			1,093			23,161			(8,549		)	(9,957		)	(4,711		)	(5,992		)	197,325
Net income from continuing operations per share-diluted	$	0.93		$	0.01		$	0.11		$	(0.04	)	$	(0.05	)	$	(0.02	)	$	(0.03	)	$	0.91



				Special Items
Nine months ended September 30, 2018	GAAP measure			Severance expense			Spectrum repacking reimbursements and other			Gain on equity method investment			Other non-operating items		Pension payment timing related charges		Special tax benefits			Non-GAAP measure

Cost of revenues	$	873,078		$	(931	)	$	—		$	—		$	—	$	—	$	—		$	872,147
Business units - Selling, general and administrative expenses	223,845			(875		)	—			—			—		—		—			222,970
Corporate - General and administrative expenses	41,522			(5,481		)	—			—			—		—		—			36,041
Spectrum repacking reimbursements and other	(9,331		)	—			9,331			—			—		—		—			—
Operating expenses	1,119,712			(7,287		)	9,331			—			—		—		—			1,121,756
Operating income	445,434			7,287			(9,331		)	—			—		—		—			443,390
Equity income (loss) in unconsolidated investments, net	15,080			—			—			(16,758		)	—		—					(1,678		)
Other non-operating items	(13,005		)	—			—			—			15,184		7,498					9,677
Total non-operating expense	(142,980		)	—			—			(16,758		)	15,184		7,498		—			(137,056		)
Income before income taxes	302,454			7,287			(9,331		)	(16,758		)	15,184		7,498		—			306,334
Provision for income taxes	61,929			1,714			(798		)	(4,216		)	2,178		1,909		7,007			69,723
Net income from continuing operations	240,525			5,573			(8,533		)	(12,542		)	13,006		5,589		(7,007		)	236,611
Net income from continuing operations per share-diluted ^(a)	$	1.11		$	0.03		$	(0.04	)	$	(0.06	)	$	0.06	$	0.03	$	(0.03	)	$	1.09

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



~~Second Quarter 2019 Key Guidance Metrics~~¹
~~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%~~

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