UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________

FORM 10-Q

_______________________


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

For the quarterly period ended March 31, ~~2019~~2020


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

Commission file number 1-6961

___________________________

TEGNA INC.

(Exact name of registrant as specified in its charter)

___________________________



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

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

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



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

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

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

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

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



Large accelerated filer	x☒	Accelerated filer	¨☐

Non-accelerated filer	¨☐	Smaller reporting company	¨☐

		Emerging growth company	¨☐

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

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



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

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

The total number of shares of the registrant’s Common Stock, $1 par value, outstanding as of April 30, ~~2019~~2020 was ~~216,350,179.~~218,530,133.

INDEX TO TEGNA INC.

March 31, ~~2019~~2020 FORM 10-Q


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

1.	Financial Statements		Financial Statements

	Condensed Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018	3	Condensed Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019	3

	Consolidated Statements of Income for the Three Months Ended March 31, 2019 and 2018	5	Consolidated Statements of Income for the Quarters Ended March 31, 2020 and 2019	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 Ended March 31, 2020 and 2019	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 Three Months Ended March 31, 2020 and 2019	7

	Consolidated Statements of Equity for the Three Months Ended March 31, 2019 and 2018	8	Consolidated Statements of Equity for the Quarters Ended March 31, 2020 and 2019	8

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

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	19

3.	Quantitative and Qualitative Disclosures about Market Risk	28	Quantitative and Qualitative Disclosures about Market Risk	30

4.	Controls and Procedures	28	Controls and Procedures	30

	PART II. OTHER INFORMATION		PART II. OTHER INFORMATION

1.	Legal Proceedings	29	Legal Proceedings	31

1A.	Risk Factors	29	Risk Factors	31

2.	Unregistered Sales of Equity Securities and Use of Proceeds	29	Unregistered Sales of Equity Securities and Use of Proceeds	31

3.	Defaults Upon Senior Securities	29	Defaults Upon Senior Securities	31

4.	Mine Safety Disclosures	29	Mine Safety Disclosures	31

5.	Other Information	29	Other Information	31

6.	Exhibits	30	Exhibits	32

SIGNATURE	SIGNATURE	31	SIGNATURE	33

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

TEGNA Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

In thousands of dollars (Unaudited)


	Mar. 31, 2019			Dec. 31, 2018			Mar. 31, 2020			Dec. 31, 2019
	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	3,818		$	135,862		$	35,059		$	29,404
Accounts receivable, net of allowances of $3,661 and $3,090, respectively	454,861			425,404
Accounts receivable, net of allowances of $5,810 and $3,723, respectively							541,324			581,765
Other receivables	18,741			20,967			16,316			19,640
Programming rights	23,908			35,252
Syndicated programming rights							34,683			49,616
Prepaid expenses and other current assets	18,071			17,737			19,501			26,899
Total current assets	519,399			635,222			646,883			707,324
Property and equipment
Cost	883,828			858,170			1,014,934			997,736
Less accumulated depreciation	(496,511		)	(482,955		)	(529,476		)	(512,015		)
Net property and equipment	387,317			375,215			485,458			485,721
Intangible and other assets
Goodwill	2,605,863			2,596,863			2,967,383			2,950,587
Indefinite-lived and amortizable intangible assets, less accumulated amortization	1,599,124			1,526,077
Indefinite-lived and amortizable intangible assets, less accumulated amortization of $184,669 and $168,452, respectively							2,538,687			2,561,614
Right-of-use assets for operating leases	72,160			—			104,611			103,461
Investments and other assets	139,886			143,465			151,083			145,269
Total intangible and other assets	4,417,033			4,266,405			5,761,764			5,760,931
Total assets	$	5,323,749		$	5,276,842		$	6,894,105		$	6,953,976

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

TEGNA Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

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


	Mar. 31, 2019			Dec. 31, 2018			Mar. 31, 2020			Dec. 31, 2019
	(Unaudited)
LIABILITIES AND EQUITY
Current liabilities
Accounts payable	$	53,880		$	83,226		$	54,473		$	51,894
Accrued liabilities
Compensation	25,253			52,726			33,389			63,876
Interest	53,683			37,458			34,525			46,013
Contracts payable for programming rights	91,758			112,059			122,045			119,872
Other	49,186			49,211			69,679			60,983
Dividends payable	15,216			15,154			—			15,188
Income taxes	34,562			19,383
Income taxes payable							9,399			3,332
Total current liabilities	323,538			369,217			323,510			361,158
Noncurrent liabilities
Income taxes	13,101			13,624			7,016			7,490
Deferred income taxes	401,729			396,847
Deferred income tax liability							527,057			515,621
Long-term debt	2,891,495			2,944,466			4,071,897			4,179,245
Pension liabilities	137,607			139,375			121,947			127,146
Operating lease liabilities	84,259			—			106,319			105,902
Other noncurrent liabilities	66,769			72,389			64,010			67,037
Total noncurrent liabilities	3,594,960			3,566,701			4,898,246			5,002,441
Total liabilities	3,918,498			3,935,918			5,221,756			5,363,599

Redeemable noncontrolling interest							14,093			—

Commitments and contingent liabilities (see Note 11)

Shareholders’ equity
Common stock of $1 par value per share, 800,000,000 shares authorized, 324,418,632 shares issued	324,419			324,419			324,419			324,419
Additional paid-in capital	262,823			301,352			152,106			247,497
Retained earnings	6,488,352			6,429,512			6,725,911			6,655,088
Accumulated other comprehensive loss	(135,432		)	(136,511		)	(141,175		)	(142,597		)
Less treasury stock at cost, 108,133,345 shares and 108,660,002 shares, respectively	(5,534,911		)	(5,577,848		)
Less treasury stock at cost, 106,066,299 shares and 106,955,082 shares, respectively							(5,403,005		)	(5,494,030		)
Total equity	1,405,251			1,340,924			1,658,256			1,590,377
Total liabilities and equity	$	5,323,749		$	5,276,842
Total liabilities, redeemable noncontrolling interest and equity							$	6,894,105		$	6,953,976

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

TEGNA Inc.

CONSOLIDATED STATEMENTS OF INCOME

Unaudited, in thousands of dollars, except per share amounts


	Quarter ended Mar. 31,						Quarter ended Mar. 31,
	2019			2018			2020			2019

Revenues	$	516,753		$	502,090		$	684,189		$	516,753

Operating expenses:
Cost of revenues, exclusive of depreciation	281,311			258,493
Business units - Selling, general and administrative expenses, exclusive of depreciation	71,465			73,621
Corporate - General and administrative expenses, exclusive of depreciation	14,735			12,708
Cost of revenues¹							369,368			281,311
Business units - Selling, general and administrative expenses							92,968			71,465
Corporate - General and administrative expenses							21,714			14,735
Depreciation	14,917			13,471			16,900			14,917
Amortization of intangible assets	8,689			6,782			16,216			8,689
Spectrum repacking reimbursements and other	(7,013		)	—
Spectrum repacking reimbursements and other, net							(7,515		)	(7,013		)
Total	384,104			365,075			509,651			384,104
Operating income	132,649			137,015			174,538			132,649

Non-operating income (expense):
Equity income (loss) in unconsolidated investments, net	12,028			(1,238		)
Equity income in unconsolidated investments, net							9,015			12,028
Interest expense	(46,385		)	(47,725		)	(56,960		)	(46,385		)
Other non-operating items, net	(1,539		)	(12,480		)	(19,270		)	(1,539		)
Total	(35,896		)	(61,443		)	(67,215		)	(35,896		)

Income before income taxes	96,753			75,572			107,323			96,753
Provision for income taxes	22,774			20,385			21,125			22,774
Net income	$	73,979		$	55,187
Net Income							86,198			73,979
Net loss attributable to redeemable noncontrolling interest							110			—
Net income attributable to TEGNA Inc.							$	86,308		$	73,979

Net income per share – basic	$	0.34		$	0.26		$	0.40		$	0.34
Net income per share – diluted	$	0.34		$	0.25		$	0.39		$	0.34

Weighted average number of common shares outstanding:
Basic shares	216,709			216,276			218,277			216,709
Diluted shares	217,202			216,989			218,863			217,202

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

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

TEGNA Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Unaudited, in thousands of dollars


	Quarter ended Mar. 31,						Quarter ended Mar. 31,
	2019			2018			2020			2019

Net income	$	73,979		$	55,187		$	86,198		$	73,979
Other comprehensive income, before tax:
Foreign currency translation adjustments	14			202			402			14
Recognition of previously deferred post-retirement benefit plan costs	1,425			1,250			1,498			1,425
Pension lump-sum payment charge	—			6,300
Other comprehensive income, before tax	1,439			7,752			1,900			1,439
Income tax effect related to components of other comprehensive income	(360		)	(1,977		)	(478		)	(360		)
Other comprehensive income, net of tax	1,079			5,775			1,422			1,079
Comprehensive income	$	75,058		$	60,962		87,620			75,058
Comprehensive loss attributable to redeemable noncontrolling interest							110			—
Comprehensive income attributable to TEGNA Inc.							$	87,730		$	75,058

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

TEGNA Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited, in thousands of dollars


	Quarter ended Mar. 31,						Quarter ended Mar. 31,
	2019			2018			2020			2019

Cash flows from operating activities:
Net income	$	73,979		$	55,187		$	86,198		$	73,979
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation and amortization	23,606			20,253			33,116			23,606
Stock-based compensation	4,433			3,599			(757		)	4,433
Other gains on sales of assets	(2,880		)	(1,010		)
Equity (income) losses in unconsolidated investments, net	(12,028		)	1,238
Company stock 401(k) contribution							5,138			—
Gains on sales of assets							—			(2,880		)
Equity loss (income) from unconsolidated investments, net							(9,015		)	(12,028		)
Pension contributions, net of expense	(242		)	(23,072		)	(3,642		)	(242		)
Change in other assets and liabilities, net	(38,459		)	(5,009		)	66,326			(38,459		)
Net cash flow from operating activities	48,409			51,186			177,364			48,409
Cash flows from investing activities:
Purchase of property and equipment	(24,810		)	(10,643		)	(13,264		)	(24,810		)
Reimbursements from spectrum repacking	4,134			—			7,515			4,134
Payments for acquisitions of businesses, net of cash acquired	(108,872		)	(325,903		)
Payments for acquisitions of businesses and other assets, net of cash acquired							(15,000		)	(108,872		)
Payments for investments	(1,171		)	(3,991		)	(509		)	(1,171		)
Proceeds from investments	618			1,010			695			618
Proceeds from sale of assets and businesses	20,064			1,373			5,000			20,064
Net cash flow used for investing activities	(110,037		)	(338,154		)	(15,563		)	(110,037		)
Cash flows from financing activities:
(Payments) proceeds of borrowings under revolving credit facilities, net	(30,000		)	220,000
Payments under revolving credit facilities, net							(118,000		)	(30,000		)
Proceeds from borrowings							1,000,000			—
Debt repayments	(25,000		)	(33,062		)	(985,000		)	(25,000		)
Payments for debt issuance costs and early redemption fee							(27,603		)	—
Proceeds from sale of minority ownership interest in Premion							14,000			—
Dividends paid	(15,078		)	(15,043		)	(30,470		)	(15,078		)
Other, net	(338		)	(4,630		)	(9,073		)	(338		)
Net cash flow (used for) provided by financing activities	(70,416		)	167,265
(Decrease) in cash, cash equivalents and restricted cash	(132,044		)	(119,703		)
Balance of cash, cash equivalents and restricted cash, beginning of period	135,862			128,041
Balance of cash, cash equivalents and restricted cash, end of period	$	3,818		$	8,338
Net cash flow used for financing activities							(156,146		)	(70,416		)
Increase (decrease) in cash							5,655			(132,044		)
Balance of cash, beginning of period							29,404			135,862
Balance of cash, end of period							$	35,059		$	3,818

Supplemental cash flow information:
Cash paid (received) for income taxes, net of refunds							$	793		$	(397	)
Cash paid for interest							$	66,240		$	27,412

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

TEGNA Inc.

CONSOLIDATED STATEMENTS OF EQUITY

Unaudited, in thousands of dollars, except per share data


Quarters Ended:																		Common stock		Additional paid-in capital			Retained earnings			Accumulated other comprehensive loss			Treasury stock			Total
Balance at Dec. 31, 2019																		$	324,419	$	247,497		$	6,655,088		$	(142,597	)	$	(5,494,030	)	$	1,590,377
Net Income attributable to TEGNA Inc.																							86,308									86,308
Other comprehensive income, net of tax																										1,422						1,422
Total comprehensive income																																87,730
Dividends declared: $0.07 per share																							(15,282		)							(15,282		)
Company stock 401(k) contribution																				(17,831		)							22,969			5,138
Stock-based awards activity																				(77,129		)							68,056			(9,073		)
Stock-based compensation																				(757		)										(757		)
Adjustment of redeemable noncontrolling interest to redemption value																							(203		)							(203		)
Other activity																				326												326
Balance at Mar. 31, 2020																		$	324,419	$	152,106		$	6,725,911		$	(141,175	)	$	(5,403,005	)	$	1,658,256



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



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

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

TEGNA Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – 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.~~2019.

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. During the first quarter of 2020, a novel strain of coronavirus (COVID-19) believed to have been first identified in Wuhan, China, spread globally, including to every state in the United States. On March 11, 2020, the World Health Organization declared COVID-19 a pandemic, and on March 13, 2020, the United States declared a national emergency with respect to COVID-19. The federal and state governments in the United States have responded by instituting a wide variety of mitigating control measures, including, mandatory quarantines, closures of non-essential businesses and all other places of social interaction, while implementing “shelter in place” orders and travel restrictions. Such mitigating measures began negatively impacting our advertising and marketing services (AMS) revenue stream in mid-March as demand for non-political advertising softened. This trend has continued into the second quarter of 2020 as such measures remain largely in place as of this date.

In mid-March, as a result of the expected near-term impact on non-political advertising demand caused by the COVID-19 pandemic, we implemented cost saving measures to reduce operating expenses and discretionary capital expenditures. These measures include implementing temporary furloughs for one week during the second quarter for most personnel, reducing compensation for executives and our board of directors, and reducing non-critical discretionary spending. As is true of most businesses, the ultimate magnitude of the COVID-19 pandemic cannot be reasonably estimated at this time, but we do expect it to have a material adverse effect on our near-term results of operations.

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

We operate one operating and reportable segment, which primarily consists of our 4962 television stations and 2 radio 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 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 6 for additional information.

~~New accounting guidance not yet adopted:~~2020: In June 2016, the ~~FASB~~Financial Accounting Standards Board (FASB) issued new guidance related to the measurement of credit losses on financial instruments. The new guidance ~~changes~~changed the way credit losses on accounts receivable are estimated. Under ~~current~~previous GAAP, credit losses on accounts receivable ~~are~~were recognized once it iswas probable that such losses will occur. Under the new guidance, we ~~will be~~are required to estimate credit losses based on the expected amount of future collections which may result in earlier recognition of doubtful accounts. ~~The~~We adopted the new guidance ~~is effective for public companies beginning in the first quarter of~~on January 1, 2020 ~~and will be adopted~~ using a modified retrospective approach. ~~We are currently evaluating~~Due to the ~~effect~~short-term nature of our accounts receivable balance, there was no material change to our allowance for doubtful accounts as a result of adopting this new ~~guidance will have on our consolidated financial statements and related disclosures.~~guidance.

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~~changed disclosures related to defined benefit pension and other postretirement benefit plans. The guidance ~~removes~~removed disclosures that are no longer ~~considered cost beneficial,~~economically relevant, clarifies certain existing disclosure requirements and ~~adds~~added 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 annually 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 will include the new ~~guidance is effective for us beginning~~disclosures in our 2020 Annual Report on Form 10-K and ~~must be applied~~will apply them 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 iswas 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~~are monitored at the film group level which is the lowest level at which independently identifiable cash flows are identifiable. ~~The~~We adopted the new guidance prospectively on January 1, 2020. There was no material impact on our consolidated financial statements and related disclosures as of the adoption date.

Programming assets are recorded at the gross amount of the related liability when the programs are available for telecasting. The related assets are recorded at the lower of cost or estimated net realizable value. Expense is ~~effective for public companies beginning~~recognized on a straight line basis which appropriately matches the cost of the programs with the revenues associated with them. We incurred programming expense of $18.2 million and $13.5 million in the first quarter of 2020 and 2019, respectively. Programming expense is toincluded in the “cost of revenue” line item of our Consolidated Statements of Income. As of March 31, 2020 we had $34.7 million of programming assets which will be ~~adopted prospectively. Early adoption~~expensed within the next twelve months.

We evaluate the net realizable value of our program broadcasting contract assets when a triggering event occurs, such as a change in our intended usage, or sustained lower-than-expected ratings for the program. Impairment analyses are performed at the syndicated program level (across all stations that utilize the program). We determine the net realizable value based on a projection of the estimated revenues less projected direct costs associated with the syndicated program (which is ~~permitted. We do~~classified as Level 3 in the fair value hierarchy). If the future direct costs exceed expected revenues, impairment of the program asset may be required. No impairment charges were recognized in 2020 or 2019.

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

Trade receivables and ~~related disclosures.~~allowances for doubtful accounts: Trade receivables are recorded at invoiced amounts and generally do not bear interest. The allowance for doubtful accounts reflects our estimate of credit exposure, determined principally on the basis of our collection experience, aging of our receivables and any specific reserves needed for certain customers based on their credit risk. Our allowance also takes into account expected future trends which may impact our customer’s ability to pay, such as economic growth, unemployment and demand for their products and services. We monitor the credit quality of our customers and their ability to pay through the use of analytics and communication with individual customers. As of March 31, 2020, our allowance for doubtful accounts was $5.8 million as compared to $3.7 million as of December 31, 2019.

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 first ~~three months~~quarter of ~~2019~~2020 and ~~2018~~2019 are shown below (amounts in thousands):



	Quarter ended Mar. 31,
	2020		2019

Advertising & Marketing Services	$	295,153	$	264,402
Subscription	332,802		241,575
Political	47,387		2,704
Other	8,847		8,072
Total revenues	$	684,189	$	516,753

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

During 2019, we acquired the television stations listed in the table below, and a summary of each acquisition follows:



Market	Station	Affiliation	Seller
Indianapolis, IN	WTHR	NBC	Dispatch Broadcast Group
Columbus, OH	WBNS	CBS	Dispatch Broadcast Group
Hartford-New Haven, CT	WTIC/WCCT	FOX/CW	Nexstar Media Group
Harrisburg-Lancaster-Lebanon-York, PA	WPMT	FOX	Nexstar Media Group
Memphis, TN	WATN/WLMT	ABC/CW	Nexstar Media Group
Wilkes Barre-Scranton, PA	WNEP	ABC	Nexstar Media Group
Des Moines-Ames, IA	WOI/KCWI	ABC/CW	Nexstar Media Group
Huntsville-Decatur-Florence, AL	WZDX	FOX	Nexstar Media Group
Davenport, IA and Rock Island-Moline, IL	WQAD	ABC	Nexstar Media Group
Ft. Smith-Fayetteville-Springdale-Rogers, AR	KFSM	CBS	Nexstar Media Group
Toledo, OH	WTOL	CBS	Gray Television
Midland-Odessa, TX	KWES	NBC	Gray Television

Nexstar Stations

On September 19, 2019, we completed our acquisition of 11 local television stations in 8 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 purchase price for the Nexstar Stations was $769.9 million which included a base purchase price of $740.0 million and working capital of $29.9 million (approximately $0.8 million was paid in April 2020 after finalization of working capital true-up with the sellers).

Dispatch Stations

On August 8, 2019, we completed the acquisition of Dispatch Broadcast Group’s 2top-rated television stations and 2radio stations (the Dispatch Stations). The purchase price for the Dispatch Stations was $560.5 million which consisted of a base purchase price of $535.0 million and working capital and cash acquired of $25.5 million.

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. Cash paid for this acquisition was $77.1 million (which included $4.6 million for working capital).

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. for $109.9 million in cash (which included $4.9 million for working capital paid at closing).

The following table summarizes the current fair values of the assets acquired and liabilities assumed in connection with these acquisitions (in thousands):



	Nexstar Stations		Dispatch Stations			Justice & Quest			Gray Stations		Total

Cash	$	—	$	2,363		$	—		$	—	$	2,363
Accounts receivable	34,680		26,344			8,501			5,553		75,078
Prepaid and other current assets	3,776		6,092			6,987			987		17,842
Property and equipment	45,186		40,418			361			11,757		97,722
Goodwill	126,928		202,274			23,558			19,405		372,165
FCC licenses	374,269		295,983			—			47,061		717,313
Network affiliation agreements	123,926		60,765			—			14,420		199,111
Retransmission agreements	68,316		33,107			—			12,198		113,621
Other intangible assets	—		—			52,553			—		52,553
Right-of-use assets for operating leases	22,715		362			—			251		23,328
Other noncurrent assets	237		—			5,253			18		5,508
Total assets acquired	$	800,033	$	667,708		$	97,213		$	111,650	$	1,676,604
Accounts Payable	2,037		954			725			1		3,717
Accrued liabilities	8,122		9,011			4,236			1,494		22,863
Deferred income tax liability	—		97,044			(471		)	—		96,573
Operating lease liabilities - noncurrent	20,346		226			—			235		20,807
Other noncurrent liabilities	426		—			2,677			—		3,103
Total liabilities assumed	$	30,931	$	107,235		$	7,167		$	1,730	$	147,063
Net assets acquired	$	769,102	$	560,473		$	90,046		$	109,920	$	1,529,541

Less: cash acquired	$	—	$	(2,363	)	$	—		$	—	$	(2,363	)
Less: fair value of existing ownership	—		—			(12,995		)	—		(12,995		)
Cash paid for acquisitions	$	769,102	$	558,110		$	77,051		$	109,920	$	1,514,183

We accounted for the each of these acquisitions as business combinations, which requires us to record the assets acquired and liabilities assumed at fair value. The amount by which the purchase price exceeds the fair value of the net assets acquired is recorded as goodwill. The amounts recorded for assets and liabilities related to the Nexstar and Dispatch Stations and Justice and Quest Networks presented above are preliminary in nature and are subject to adjustment as additional information is obtained about the facts and circumstances that existed as of the acquisition date. Assets and liabilities related to the Gray Stations are the final amounts.

During the quarter ended March 31, 2020, we continued to analyze information related to the estimated fair values for certain tangible and intangible assets acquired, liabilities assumed and the amount of goodwill recognized for these acquisitions. As a result, the carrying amounts for certain assets and liabilities were updated. The most significant changes were to retransmission agreement intangible assets, which were reduced by $21.3 million and goodwill, whose carrying amount increased by $16.8 million. As a result of these adjustments, we expect our amortization expense related to intangible assets during fiscal year 2020 to be $68.0 million.

The final determination of the fair values of certain assets and liabilities will be completed within the measurement period of up to one year from the acquisition date permitted under GAAP. The primary areas which are being assessed relate to the fair value of intangible assets and income taxes.

NOTE 23 – Goodwill and other intangible assets

The following table displays goodwill, indefinite-lived intangible assets, and amortizable intangible assets as of March 31, ~~2019~~2020 and December 31, ~~2018~~2019 (in thousands):



	Mar. 31, 2020					Dec. 31, 2019
	Gross		Accumulated Amortization			Gross		Accumulated Amortization

Goodwill	$	2,967,383	$	—		$	2,950,587	$	—

Indefinite-lived intangibles:
Television and radio station FCC broadcast licenses	2,105,332		—			2,090,732		—
Amortizable intangible assets:
Retransmission agreements	235,215		(112,853		)	256,533		(105,212		)
Network affiliation agreements	309,503		(54,319		)	309,496		(48,174		)
Other	73,306		(17,497		)	73,305		(15,066		)
Total indefinite-lived and amortizable intangible assets	$	2,723,356	$	(184,669	)	$	2,730,066	$	(168,452	)

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

~~On January 2, 2019, we completed our acquisition~~Changes in goodwill and amortizable intangible asset values in the first three months of WTOL, the CBS affiliate in Toledo, OH, and KWES, the NBC affiliate in Midland-Odessa, TX from Gray Television, Inc. for approximately $108.9 million in cash (which includes $3.9 million for estimated working capital paid at closing). WTOL and KWES2020 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 valuea result of the acquisitions discussed in Note 2. Certain of those assets ~~acquired and liabilities assumed were based~~are valued on a preliminary basis as we continue to review underlying assumptions and valuation methodologies utilized to calculate their respective fair values.

Interim impairment assessment

We review our goodwill and intangible assets for impairment at least annually and also when events or changes in circumstances occur that indicate the fair value may be below its carrying amount. As discussed in Note 2, during 2019 we acquired 15 television stations and as such, ~~our estimates and assumptions are subject to change~~the indefinite-lived FCC licenses recently acquired have limited headroom as ~~additional information is obtained about the facts and circumstances that existed as~~they were recorded at fair value upon acquisition. As a result of the ~~acquisition date. The primary area~~negative effects COVID-19 will have on our expected future AMS revenue and operating cash flows, we assessed whether it was more likely than not that our FCC licenses, including those that were recently acquired, were impaired.

In performing this assessment we analyzed the significant inputs used in the fair value determination of ~~purchase price allocation that is not yet finalized is related to~~the recently acquired FCC license assets. This included reviewing the impact of potential changes in trends in market revenues and changes in the discount rate on the fair value of ~~intangible assets.~~our licenses. While the impacts to AMS are expected to be material, the duration of these trends and the magnitude of such impacts cannot be precisely estimated at this time, as they are affected by a number of factors (many of which are outside of management’s control). However, based on currently known information about COVID-19 trends, we generally expect the second quarter of 2020 to be the most significantly impacted this year with sequential improvement throughout the remainder of the fiscal year.

~~In connection with~~Based on the analysis performed we concluded that none of our ~~preliminary purchase accounting for this acquisition, we recorded indefinite lived intangible assets for~~ FCC licenses were more likely than not impaired as of ~~$53.4 million~~March 31, 2020. However, a long sustained economic decline resulting from COVID-19 could result in future non-cash impairment charges of our recently acquired FCC licenses, and ~~amortizable intangible assets~~any related impairment could have a material adverse impact on our results of $28.4 million, related to retransmission consent contracts and network affiliation agreements. The amortizable assets will be amortized over a weighted average period of 7 years. We also recognized goodwill of $9.0 million all of which is deductible for tax purposes.

operations.

NOTE 34 – Investments and other assets

Our investments and other assets consisted of the following as of March 31, ~~2019,~~2020, and December 31, ~~2018~~2019 (in thousands):



	Mar. 31, 2020		Dec. 31, 2019

Cash value life insurance	$	50,730	$	52,462
Equity method investments	36,646		27,650
Other equity investments	32,420		32,383
Deferred debt issuance costs	10,178		10,921
Other long-term assets	21,109		21,853
Total	$	151,083	$	145,269

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~~“Other non-operating items, ~~net~~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~~. In the first quarter of 2020, CareerBuilder sold its employment screening business; our estimated portion on the pre-tax gain of the sale is $12.1 million. Our investment balance ~~of $12.9~~was $17.4 million and ~~$12.4~~$7.9 million as of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively. ~~Our ownership stake provides us with two seats on CareerBuilder’s board of directors and thus we concluded that we have significant influence over the entity.~~

~~In the first quarter of 2019, we sold our investment in Captivate, which had been accounted for as an~~Other 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 gain has been recorded in the Equity income (loss) in unconsolidated~~ investments ~~net line item of our Statement of Income and Statement of Cash Flows.~~

~~Cost method 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~~NaN gains or losses ~~associated with~~were recorded on these investments ~~during~~in the first three months of 2020.

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

NOTE 5 – Income taxes

We generally estimate our annual effective tax rate for the full year and apply that rate to net income before tax in determining the provision for income taxes for interim periods. We record discrete items in each respective interim period as appropriate. However, for the three months ended March 31, ~~2019~~2020, we determined that the annual rate method would not provide for a reliable estimate due to volatility in the forecasting process as a result of the COVID-19 pandemic. As a result, we have recorded the provision for income taxes for the three months ended March 31, 2020 using the actual effective rate for the three months ended March 31, 2020 (the “cut-off” method). The effective tax rate for the three months ended March 31, 2020 was calculated based on an actual effective tax rate plus discrete items.

In response to the COVID-19 pandemic, President Donald Trump signed into law the Coronavirus Aid, Relief, and ~~2018.~~Economic Security Act (the CARES Act) on March 27, 2020. The CARES Act provides numerous tax provisions and other stimulus measures, including refundable payroll tax credits, deferral of employer side social security payments, modifications to the net interest deduction limitations, expansions to the use and carryback of net operating losses, and a technical correction to the depreciation method applicable to qualified improvement property under the 2017 Tax Cuts and Jobs Act. We will benefit from the technical correction for qualified improvement property which allows for immediate deduction of any eligible leasehold improvements placed in service during 2018 and 2019. We will also benefit from the new depreciation method available for qualified improvement property which allows for an immediate retroactive deduction of certain eligible leasehold improvements previously placed in service. As a result, our 2020 tax payments are expected to be reduced by approximately $7 million. There is no change to tax expense or our first quarter effective income tax rate since the changes are payment deferrals only. We will continue to monitor the impact of the CARES Act on our business as conditions change.

NOTE 46 – Long-term debt

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



	Mar. 31, 2020			Dec. 31, 2019

Unsecured floating rate term loan due quarterly through June 2020¹	$	10,000		$	20,000
Unsecured floating rate term loan due quarterly through September 2020¹	90,000			105,000
Unsecured notes bearing fixed rate interest at 5.125% due July 2020	—			310,000
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
Borrowings under revolving credit agreement expiring August 2024	785,000			903,000
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 4.625% due March 2028	1,000,000			—
Unsecured notes bearing fixed rate interest at 5.00% due September 2029	1,100,000			1,100,000
Total principal long-term debt	4,100,000			4,203,000
Debt issuance costs	(34,389		)	(26,873		)
Unamortized premiums and discounts, net	6,286			3,118
Total long-term debt	$	4,071,897		$	4,179,245

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 March 31, 2020 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 January 9, 2020, we completed a private placement offering of $1.0 billion aggregate principal amount of senior unsecured notes bearing an interest rate of 4.625% which are due in March 2028.

On February 11, 2020 we used the net proceeds from the $1.0 billion senior notes to repay the remaining $310.0 million of unsecured notes bearing fixed rate interest of 5.125%, which were due in July 2020 and $650.0 million of unsecured notes bearing fixed rate interest of 6.375%, which were due in October 2023. We incurred $13.8 million of early redemption fees in relation to the 2023 debt payoff. Additionally, we wrote off $7.9 million of unamortized financing fees and discounts related to the early payoff of the 2020 and 2023 notes. These charges were recorded in the other non-operating items, net line item of the Statement of Income.

As of March 31, ~~2019,~~2020, we had unused borrowing capacity of ~~$1.47 billion~~$720.8 million under our $1.51 billion revolving credit facility (which expires August 2024) and we were in compliance with all covenants, including the leverage ratio (our one financial covenant) contained in our debt agreements and revolving credit facility. We believe that we will remain compliant with all covenants for the foreseeable future.

NOTE 57 – Retirement plans

We have various defined benefit retirement plans. Our principal defined benefit pension plan is the TEGNA Retirement Plan (TRP). The disclosure table below includes the pension expenses of the TRP and the TEGNA Supplemental Retirement Plan (SERP). The total net pension obligations, including both current and non-current liabilities, as of March 31, ~~2019,~~2020, were ~~$145.5~~$128.7 million, ~~($7.9~~of which $6.8 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 Mar. 31,
	2020			2019

Service cost-benefits earned during the period	$	2		$	—
Interest cost on benefit obligation	4,858			5,750
Expected return on plan assets	(7,750		)	(6,575		)
Amortization of prior service (credit) cost	(42		)	25
Amortization of actuarial loss	1,600			1,500
(Gains from) expense for company-sponsored retirement plans	$	(1,332	)	$	700

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~~“Other non-operating items, net” line item of the Consolidated Statements of Income.

During the three months ended March 31, 2020 and 2019, we ~~made no~~did 0t make any cash contributions to the ~~TRP and made $1.7 million in cash contributions to the TRP during the three months ended March 31, 2018.~~TRP. During the three months ended March 31, ~~2019~~2020 and ~~2018,~~2019, we made benefit payments to participants of the SERP of $2.3 million and $0.9 million, ~~and $26.7 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 and funding levels, we do not expect to make any cash payments to the TRP in 2020. We expect to make additional cash ~~payments~~contributions of ~~$10.7 million in 2019 on account of these benefit plans (comprised of payments of $6.9~~$4.4 million to our SERP participants ~~and $3.8 million of contributions to the TRP).~~

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

in 2020.

~~NOTE 6 – Leases~~

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

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

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

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

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

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

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

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

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

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

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

Future Period Cash Payments

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

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

NOTE 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 Dec. 31, 2019									$	(142,398	)	$	(199	)	$	(142,597	)
Other comprehensive income before reclassifications									—			301			301
Amounts reclassified from AOCL									1,121			—			1,121
Total other comprehensive income									1,121			301			1,422
Balance at Mar. 31, 2020									$	(141,277	)	$	102		$	(141,175	)

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

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

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



	Quarter ended Mar. 31,
	2020			2019

Amortization of prior service credit, net	$	(110	)	$	(125	)
Amortization of actuarial loss	1,608			1,550
Total reclassifications, before tax	1,498			1,425
Income tax effect	(377		)	(356		)
Total reclassifications, net of tax	$	1,121		$	1,069

Quarter ended Mar. 31,
2019 2018

Amortization of prior service credit, net $ (125 ) $ (100 )
Amortization of actuarial loss 1,550
1,350
Pension payment timing related charge —
6,300
Total reclassifications, before tax 1,425
7,550
Income tax effect (356 ) (1,925 )
Total reclassifications, net of tax $ 1,069
$ 5,625

NOTE 89 – Earnings per share

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



	Quarter ended Mar. 31,
	2020		2019

Net income attributable to TEGNA Inc.	$	86,308	$	73,979

Weighted average number of common shares outstanding - basic	218,277		216,709
Effect of dilutive securities:
Restricted stock units	284		179
Performance shares	298		256
Stock options	4		58
Weighted average number of common shares outstanding - diluted	218,863		217,202

Net income per share - basic	$	0.40	$	0.34
Net income per share - diluted	$	0.39	$	0.34

Quarter ended Mar. 31,
2019 2018

Net income $ 73,979
$ 55,187

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

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

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

NOTE 910 – Fair value measurement

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

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

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

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

We additionally hold other financial instruments, including cash and cash equivalents, receivables, accounts payable and debt. The carrying amounts for cash and cash equivalents, receivables and accounts payable approximated their fair values. The fair value of our total debt, based on the bid and ask quotes for the related debt (Level 2), totaled ~~$2.98~~$3.85 billion at March 31, ~~2019,~~2020, and ~~$2.96~~$4.32 billion at December 31, ~~2018.~~2019.

~~NOTE 10 – 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):

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 and taxes (in thousands):~~

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

NOTE 11 – Other matters

~~Commitments, contingencies and other matters~~Litigation

In the third quarter of 2018, certain national media outlets reported the existence of a confidential investigation by the United States Department of Justice Antitrust Division (DOJ) into the local television advertising sales practices of station owners. We ~~have~~ received a Civil Investigative Demand (CID) in connection with the DOJ’s investigation. On November 13 and December 13, 2018, DOJ and 7 broadcasters settled a DOJ complaint alleging the exchange of competitively sensitive information in the broadcast television industry. In June 2019, we and 4 other broadcasters entered into a substantially identical agreement with DOJ, which was entered by the court on December 3, 2019. 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, ~~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 TVtelevision 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~~16 of the original complaints, the amended complaint did not name TEGNA as a defendant. After TEGNA and 4 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. The motion to dismiss remains pending before the court. 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~~relinquished any spectrum rights as a result of the ~~auction, and accordingly we will not receive any incentive auction proceeds. The FCC has, however, notified us that 13~~auction. NaN of our stations (which includes 4 of our recently acquired stations from 2019) have been or will be repacked to new channels. ~~In general, television stations moving channels may have smaller service areas and/or experience additional interference; however, based on our transition planning to~~

To date, ~~we do not expect~~ the repacking ~~to have~~has not had any material effect on the geographic areas or populations served by our repacked full-power stations’ over-the-air ~~signals.~~ signals, and we do not expect our remaining stations undergoing repacking to experience any such effect. 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 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~~are being completed during phases ~~two~~2 through ~~nine,~~10, and a majority of our ~~remaining~~ capital expenditures in connection with the repack ~~will occur~~occurred in 2018 and 2019. To date, we have incurred approximately ~~$19.8~~$38.5 million in capital expenditures for the spectrum repack project (of which ~~$2.1~~$2.9 million was paid during the first ~~three months~~quarter of ~~2019)~~2020). We have received FCC reimbursements of approximately ~~$11.5~~$31.9 million through March 31, ~~2019.~~2020. The reimbursements were recorded as a contra operating expense within our ~~Spectrum~~“Spectrum repacking reimbursements and other, net” 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~~

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 ~~television station, including each~~agreement with MadHive where they support our Premion business in acquiring and delivering over-the-top ad impressions. In the first quarter of ~~our 13 repacked stations, has been allocated~~2020 and 2019, we incurred expenses of $10.5 million and $6.5 million, respectively, as a ~~reimbursement amount equal to approximately 92.5%~~result of the ~~station’s estimated repacking costs, as verified by~~commercial agreement with MadHive. As of March 31, 2020 and December 31, 2019 we had accounts payable and accrued liabilities associated with the ~~FCC’s fund administrator. Although~~commercial agreement of $7.5 million and $4.3 million, respectively.

Sale of minority ownership interest in Premion

On March 2, 2020, we ~~expect~~sold a minority ownership interest in Premion, LLC (Premion) for $14.0 million to an affiliate of Gray Television (Gray). Gray is reselling Premion services across all of Gray’s 93 television markets. Our TEGNA stations and Gray will each have the ~~FCC~~right to ~~make additional allocations~~independently sell Premion in markets where we both operate a local television station. The sale of spot television advertising is not part of this agreement, and Gray and our TEGNA stations will continue to sell spot advertising for our respective stations without any involvement from the ~~fund, it~~other party.

In connection with acquiring a minority interest, Gray has the right to sell its interest to Premion if there is ~~not guaranteed that~~a change in control of TEGNA or if the ~~FCC will approve all reimbursement requests necessary to completely reimburse each repacked station for all amounts incurred~~commercial reselling agreement terminates. Since redemption of the minority ownership interest is outside our control, Gray’s equity interest is presented outside of the Equity section on the Condensed Consolidated Balance Sheet in the caption “Redeemable noncontrolling interest.” On the date of sale, we recorded a $14.0 million redeemable noncontrolling interest on the Condensed Consolidated Balance Sheet in connection with ~~the repack.~~ Gray’s investment.

~~Reduction in Force Programs~~

During the third quarter of 2018, we initiated reduction in force programs at our corporate headquarters and our Digital Marketing Services (DMS) business unit, which resulted in a total severance charge of $7.3 million which was recorded within the Cost of Revenues, Business Units - Selling and Administrative, and Corporate - General and Administrative Costs within the Statement of Income. The corporate headquarters reductions were part of our ongoing consolidations of our corporate structure following our strategic transformation into a pure play broadcast company. The reduction in force at our DMS unit is a result of a rebranding of our service offerings and unification of our sales strategy to better serve our customers. A majority of the employees impacted by these reductions will receive lump sum severance payments. As of the end of Q1 2019, we have a remaining accrual of approximately $4.1 million related to these actions, substantially all of which will be paid throughout the remainder of the year.

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

We are an innovative media company ~~serving~~that serves the greater good of our ~~communities - through empowering stories, impactful investigations and extensive marketing services. With 49~~communities. Our business includes 62 television stations and two 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 (AMS) 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. In 2020, we expect our combined subscription and political revenues to be more than 50% of our total revenues.

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

~~On January 2, 2019, we acquired, for $108.9 million in cash,~~pure-play broadcasting company, adding approximately 40 stations in ~~Toledo, OH~~attractive markets and ~~Midland-Odessa, TX.~~

~~WTOL, the CBS affiliate in Toledo~~divesting non-core assets. During 2019 alone, we completed four strategic acquisitions for a total purchase price of $1.5 billion which enhanced our geographic diversity and ~~KWES, the NBC affiliate in Midland-Odessa are recognized as strong local media brands~~

~~well-positioned in key markets that further enhance~~bolstered our portfolio of Big ~~4 affiliates. KWES further deepens~~Four stations while positioning our ~~presence~~company to take full advantage of emerging viewing trends. As a result of this strategic

evolution, we have increased revenue and cash flow, reduced economic cyclicality, delivered value for shareholders, and continue to be well-positioned to benefit from additional industry consolidation.

Recent Developments from COVID-19

During the first quarter of 2020, a novel strain of coronavirus (COVID-19) believed to have been first identified in ~~the~~

~~high-growth~~Wuhan, China, spread globally, including to every state ~~of Texas where we now own 11 stations, covering 87 percent of television households~~ in the ~~state.~~

United States. On March ~~20, 2019,~~11, 2020, the World Health Organization declared COVID-19 a pandemic, and on March 13, 2020, the United States declared a national emergency with respect to COVID-19. The federal and state governments in the United States have responded by instituting a wide variety of mitigating control measures, including, mandatory quarantines, closures of non-essential businesses and all other places of social interaction, while implementing “shelter in place” orders and travel restrictions. Such control measures have resulted in cancellation or postponement of sporting events, including the Olympics, and suspension of popular entertainment content production.

Despite a strong start to the year, the wide variety of measures began negatively impacting our AMS revenue stream in mid-March as demand for non-political advertising softened. This trend has continued into the second quarter of 2020 as such measures remain largely in place as of this date. As noted above, the relative percentage of subscription and political revenues has grown over recent years and we ~~announced that we entered into~~expect this trend to continue. These revenue streams are influenced less than AMS when economic conditions change. While the contribution of subscription and political revenues are increasing, AMS revenue still accounts for a ~~definitive agreement with Nexstar Media Group~~significant amount of our total revenue. The impacts to ~~acquire 11 local television stations~~AMS revenues in ~~eight markets, including eight Big Four affiliates for $740 million in cash. These stations~~the near-term are expected to ~~bring additional geographic diversity to our existing station portfolio~~be material. However, the duration of these trends and ~~add four additional key markets to our strong political footprint~~the magnitude of such impacts cannot be precisely estimated at this time, as ~~the 2020 presidential election gets underway. We~~they are affected by a number of factors (many of which are outside of management’s control), including those presented in Item 1A. “Risk Factors” of this Quarterly Report. However, based on currently known information about COVID-19 trends, we generally expect the ~~acquisition will~~second quarter of 2020 to be ~~EPS accretive within~~the most significantly impacted this year, with sequential improvement throughout the remainder of the fiscal year.

Our broadcast business has been designated an essential business, and therefore, our stations’ operations are continuing with new safeguards put in place to create a ~~year after close~~safe work environment for our employees. At most of our television stations, approximately 90-95 percent of the employees are working remotely. We have also adopted new measures based on current Center of Disease Control guidelines to keep our employees safe and ~~immediately accretive~~healthy. Measures include limiting the number of news and production employees in our stations to ~~free cash flow (see definition non-GAAP measure within Presentation of Non-GAAP information). The acquisition of these stations is contingent~~only those necessary to put on the ~~closing~~newscasts, remote interviews, social distancing, eliminating guests, and telework for all non-news personnel.

As a result of the ~~Nexstar Media - Tribune merger,~~near-term impact of non-political advertising demand caused by the COVID-19 pandemic, we implemented cost saving measures to reduce operating expenses and capital expenditures. These measures include implementing temporary furloughs for one week during the second quarter for most personnel, reducing compensation for executives and our board of directors, and reducing non-critical discretionary spending. As is true of most businesses, the ultimate magnitude of the COVID-19 pandemic cannot be reasonably estimated at this time, but we do expect it to have a material adverse effect on our near-term results of operations.

We are experiencing a significant increase in ratings and audiences on all of our platforms, highlighting the crucial role our stations play by delivering important local journalism which ~~is expected to take place~~builds trust and loyalty among our viewers. For example, TEGNA (and its portfolio of stations) has ascended into the top 50 digital properties (not just news) in terms of total audience in the ~~late third or early fourth quarter of 2019,~~U.S. according to Comscore’s report on Top 50 Multi-Platform Properties for March 2020.

The scope 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~~nature of the ~~multicast channels Justice Network~~COVID-19 impacts continue to evolve each day. For a discussion of mitigating measures being taken by management to navigate through these conditions as well as a discussion of key trends and ~~Quest, two fast growing networks~~uncertainties that ~~leverage~~have affected our business, see the ~~increasing numbers of over-the-air viewers, for approximately $77 million in cash.~~sections that follow under the captions “Consolidated Results from Operations” and “Liquidity, Capital Resources and Cash Flows,” as well as within Part II, Item 1A “Risk Factors.”

Consolidated Results from Operations

The following discussion is a comparison of our consolidated results on a GAAP basis. The year-to-year comparison of financial results is not necessarily indicative of future results. In addition, see the section ~~on page 21~~ titled ~~‘Results~~“Results from Operations - Non-GAAP ~~Information’~~Information” for additional tables presenting information which supplements our financial information provided on a GAAP basis.

During 2019, we acquired multiple local television stations and multicast networks. Specifically, we acquired the Gray stations (January 1, 2019), Justice/Quest multicast networks (June 18, 2019), the Dispatch stations (August 8, 2019) and the Nexstar stations (September 9, 2019). See Note 2 to the condensed consolidated financial statements for further details. The Dispatch and Nexstar stations and multicast networks are collectively referred to as the “2019 Acquisitions” in the discussion that follows. The inclusion of the operating results from these 2019 Acquisitions for the periods subsequent to their acquisition impacts the year-to-year comparability of our consolidated operating results. The Gray stations do not impact the year-to-year comparability as their operating results are included in both the first quarter of 2019 and 2020.

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


	Quarter ended Mar. 31,								Quarter ended Mar. 31,
	2019			2018			Change		2020			2019			Change

Revenues	$	516,753		$	502,090		3	%	$	684,189		$	516,753		32	%

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									369,368			281,311			31	%
Business units - Selling, general and administrative expenses									92,968			71,465			30	%
Corporate - General and administrative expenses									21,714			14,735			47	%
Depreciation	14,917			13,471			11	%	16,900			14,917			13	%
Amortization of intangible assets	8,689			6,782			28	%	16,216			8,689			87	%
Spectrum repacking reimbursements and other	(7,013		)	—			***
Spectrum repacking reimbursements and other, net									(7,515		)	(7,013		)	7	%
Total operating expenses	$	384,104		$	365,075		5	%	$	509,651		$	384,104		33	%

Total operating income	$	132,649		$	137,015		(3	%)	$	174,538		$	132,649		32	%

Non-operating expenses	(35,896		)	(61,443		)	(42	%)	(67,215		)	(35,896		)	87	%
Provision for income taxes	22,774			20,385			12	%	21,125			22,774			(7	%)
Net income	$	73,979		$	55,187		34	%	86,198			73,979			17	%
Net loss attributable to redeemable noncontrolling interest									110			—			***
Net income attributable to TEGNA Inc.									$	86,308		$	73,979		17	%

Earnings per share - basic	$	0.34		$	0.26		31	%
Earnings per share - diluted	$	0.34		$	0.25		36	%
Net income per share - basic									$	0.40		$	0.34		18	%
Net income per share - diluted									$	0.39		$	0.34		15	%

*** Not meaningful

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 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. In addition, in even years, our advertising revenue typically benefits from the Olympics which is carried on NBC, our largest network affiliation (however the summer 2020 Olympics has been postponed to July 2021 due to the COVID-19 pandemic). To a lesser extent, the Super Bowl can influence our advertising results, the degree to which depending on which network broadcasts the event.

As noted above, while we expect the impacts of the COVID-19 pandemic to have a material adverse effect on non-political advertising placements and revenues while containment measures are in place and possibly longer, it is too early to tell with any kind of precision how future declines in non-political advertising revenues, particularly with respect to local AMS advertising, will have on our revenues and operating results in future quarters.

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

Total revenues increased ~~$14.7~~$167.4 million ~~or 3%,~~ in the first quarter of ~~2019~~2020 compared to the same period in ~~2018. This net increase was primarily due to an increase in subscription revenue~~2019. Our 2019 Acquisitions contributed total revenues of ~~$36.0~~$107.4 million ~~or 18%,~~ in the first quarter of 2020. Excluding the 2019 Acquisitions, total revenues increased $60.0 million. This increase was due to a $41.1 million in subscription revenue, primarily due to annual rate increases under existing and newly renegotiated retransmission ~~agreements.~~agreements and $39.2 million in political advertising, reflecting increased spending on the upcoming presidential election. This increase was partially offset by a decrease in AMS revenue of ~~$18.5~~$20.7 million, ~~or 7%,~~partially impacted by reduced demand in late March due to impacts from the COVID-19 pandemic as well as approximately $6 million reduction in revenue related to the Super Bowl, which aired in February 2020 on Fox, covering less than 6% of TEGNA’s households. By comparison, in 2019, the Super Bowl aired on CBS, covering more than 30% of TEGNA’s households.

Cost of revenues increased $88.1 million in the first quarter of 2019. This decline was attributed to the absence of the Olympics and less Super Bowl advertising which aired on our 13 CBS stations in 2019 compared to 17 NBC stations last year (we estimate the incremental sports events combined for approximately $16.0 million higher revenue in 2018) and also due to a softening of demand for traditional television advertising. In addition, we had a $4.9 million, or 64%, decrease in political advertising. These decreases were partially offset by an increase in digital revenue (primarily from Premion) and incremental revenue from the recent station acquisitions (KFMB, KWES, and WTOL).

~~Cost of Revenues~~

~~Cost of revenues increased $22.8 million, or 9%, in the first quarter of 2019~~2020 compared to the same period in ~~2018.~~2019. Our 2019 Acquisitions added cost of revenues of $56.5 million in the first quarter of 2020. Excluding the 2019 Acquisitions, cost of revenues increased $31.6 million. The increase was primarily due to a ~~$21.1~~$27.5 million increase in programming costs, ~~(due~~due to the growth in subscription revenues ~~and recent acquisitions)~~(certain programming costs are linked to such revenues).

Business Units - Selling, General and Administrative Expenses

Business unit selling, general and administrative (SG&A) expenses ~~decreased $2.2~~increased $21.5 million ~~or 3%,~~ in the first quarter of ~~2019~~2020 compared to the same period in ~~2018. The decrease was~~2019. Our 2019 Acquisitions added business unit SG&A expenses of $13.4 million in the first quarter of 2020. Excluding the 2019 Acquisitions, SG&A expenses increased $8.1 million primarily due to ~~the absence of sale expenses associated with~~higher selling costs (due to incremental ~~Olympic, Super Bowl, and~~revenue from political ~~related revenue in 2018. These declines were partially offset by costs associated with the recent acquisitions.~~advertising).

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 costs within our Corporate operating expense due to their recurring nature as we have recently become more acquisitive with regards to acquisitions. Previously, transaction costs were recorded as other non-operating expense.

Corporate general and administrative expenses increased ~~$2.0~~$7.0 million ~~or 16%,~~ in the first quarter of ~~2019~~2020 compared to the same period in 2018. The increase was primarily driven by $3.9 million of transaction costs (primarily due to the WTOL and KWES acquisitions). Offsetting these expenses were cost savings as a result of right sizing our corporate function mostly driven by a reduction in force in the third quarter of 2018.

~~Depreciation Expense~~

Depreciation expense increased by $1.4 million, or 11%, in the first quarter of 2019 compared to the same periods in 2018. The increase was primarily due to the assets acquired in the recent station acquisitions.

~~Amortization Expense~~

~~Amortization expense increased $1.9 million, or 28%, in the first quarter of~~ 2019. The increase was primarily due to ~~incremental~~$7.6 million of advisory fees related to activism defense and $4.6 million of M&A due diligence costs. Partially offsetting this was a decrease of $3.9 million in acquisition-related costs (principally advisory fees) due to the reduction in acquisition activity in 2020. Excluding advisory fees for activism defense, M&A due diligence costs, and acquisition-related costs, corporate expenses were lower by $1.3 million (primarily due to lower stock-based compensation expense).

Depreciation Expense

Depreciation expense increased by $2.0 million in the first quarter of 2020 compared to the same period in 2019. Our 2019 Acquisitions added depreciation expense of $2.6 million. Excluding the impact of the 2019 Acquisitions, there was no material change in our depreciation expense.

Amortization Expense

Amortization expense increased $7.5 million in the first quarter of 2020 compared to the same period in 2019. Our 2019 Acquisitions added amortization expense ~~resulting from~~of $8.7 million. Excluding the impact of the 2019 Acquisitions, there was no material change in our ~~recent station acquisitions.~~amortization expense.

Spectrum Repacking Reimbursements and Other, net

Spectrum repacking reimbursements and other

~~We had $7.0~~ net gains were $7.5 million ~~of other gains~~ in the first quarter of 2020 compared to net gains of $7.0 million in the same period in 2019. The 2020 activity primarily consists of $7.5 million of reimbursements received from the Federal Communications Commission (FCC) for required spectrum repacking. The 2019 ~~gains primarily consist of~~activity reflects $4.1 million of gains due to reimbursements received from the ~~Federal Communications Commission~~FCC for required spectrum ~~repacking. We also had~~repacking and a ~~gain of~~ $2.9 million gain as a result of the sale of certain real estate.

Our operating income ~~decreased $4.4~~increased $41.9 million ~~or 3%,~~ in the first quarter of ~~2019~~2020 compared to the same period in ~~2018.~~2019. Results from our 2019 Acquisitions added operating income of $26.3 million in the first quarter of 2020. Excluding the 2019 Acquisitions, operating income increased $15.6 million. The ~~decrease~~increase was driven by the changes in revenue and expenses discussed ~~above. The revenue~~above, most notably the increase of ~~$14.7~~subscription revenue and high-margin political advertising.

Non-Operating Expenses

Non-operating expenses increased $31.3 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 of ~~2019 as compared to 27% in the first quarter of 2018.~~

~~Non-Operating Expenses~~

~~Non-operating expenses decreased $25.5 million, or 42%, in the first quarter of 2019~~2020 compared to the same period in ~~2018.~~2019. This ~~decrease~~increase was ~~primarily due to an increase in equity earnings of $13.3 million~~partially due to a ~~$12.2~~$13.8 million ~~gain recognized as a result of~~call premium related to the ~~sale~~repayment of our ~~interest in Captivate~~2023 Senior Notes and acceleration of $7.9 million of previously deferred financing fees associated with the 2023 and 2020 Senior notes in the first quarter of 2019. Also contributing to the decrease was the absence in 2019 of a pension-related charge that occurred first quarter of 2018 of $6.3 million (primarily related to lump sum payments made to certain former executives of the company). The decrease was also partially2020 due to ~~a decline in~~their early repayment. In addition, interest expense ~~of $1.3~~increased by $10.6 million ~~in 2019~~ driven by ~~lower~~higher average outstanding debt ~~outstanding,~~used to finance the 2019 Acquisitions partially offset by ~~slightly higher~~a lower average interest ~~rates. The total~~rate due to the refinancings undertaken in 2019 and 2020. Total average outstanding debt was ~~$2.95~~$4.19 billion for the first quarter of ~~2019,~~2020, compared to ~~$3.13~~$2.95 billion in the same period of ~~2018.~~2019. The weighted average interest rate on total outstanding debt was ~~6.05%~~5.27% for the first quarter of ~~2019,~~2020, compared to ~~5.84%~~6.05% in the same period of ~~2018.~~2019.

Income tax expense ~~increased $2.4~~decreased $1.6 million ~~or 12%,~~ in the first quarter of ~~2019~~2020 compared to the same period in ~~2018. The increase was primarily due to increases in net income before tax.~~2019. Our ~~reported~~ effective income tax rate was 19.7% for the first quarter of 2020, compared to 23.5% for the first quarter of ~~2019, compared to 27.0% for continuing operations for the first quarter of 2018.~~2019. The income tax expense and tax rate for the first quarter of ~~2019 is~~2020 are lower than the comparable ~~rate~~amounts in ~~2018~~2019 primarily ~~as a result of the revaluation of deferred taxes in 2018 for the increase in the effective state tax rate~~ due to the ~~acquisition~~utilization of ~~KFMB.~~capital loss carryforwards in connection with certain disposition transactions and the release of the associated valuation allowance.

Net Income attributable to TEGNA Inc.

Net income attributable to TEGNA Inc. was ~~$74.0~~$86.3 million, or ~~$0.34~~$0.39 per diluted share, in the first quarter of ~~2019~~2020 compared to ~~$55.2~~$74.0 million, or ~~$0.25~~$0.34 per diluted share, during the same period in ~~2018.~~2019. 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 quarter of 2020 and 2019 ~~and 2018 was 217.2~~were 218.9 million and ~~217.0~~217.2 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 and ~~Adjusted revenues~~free cash flow 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~~related to businesses we account for under the equity method, ~~investments, transaction~~acquisition-related costs, advisory fees related to activism defense, and certain non-operating

expenses ~~(TEGNA~~related to the early extinguishment of debt and a TEGNA foundation ~~donation and pension payment timing related charges).~~donation. In addition, we have income tax special items associated with deferred tax ~~impacts~~benefits related to ~~the acquisition of KFMB.~~partial capital loss valuation allowance release.

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 attributable to TEGNA before (1) net income (loss) attributable to redeemable noncontrolling interest, (2) interest expense, ~~(2)~~(3) income taxes, ~~(3)~~(4) equity income ~~(loss)~~ in unconsolidated investments, net, ~~(4)~~(5) other non-operating items, net, ~~(5)~~(6) severance expense, ~~(6) transaction~~(7) M&A due diligence costs, ~~(7)~~(8) acquisition-related costs, (9) advisory fees related to activism defense, (10) spectrum repacking reimbursements and other, ~~(8)~~net, (11) depreciation and ~~(9)~~(12) 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.~~income attributable to TEGNA. 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 how~~measure that the Board of Directors ~~reviews~~uses to review the performance of the ~~business and it more closely aligns to how other companies in the broadcast industry calculate this non-GAAP performance metric.~~business. 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 ended March 31, 2020:

Quarter ended March 31, 2019:

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

~~Pension lump-sum payment charge as a result of payments that were made to certain SERP plan participants in early 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
Quarter ended March 31, 2019
GAAP
measure
Spectrum repacking reimbursements and other Transaction costs Net gains on equity method investments Other non-operating item Non-GAAP measure

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

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

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

Other non-operating items, net $ (12,480 ) $ 6,300
$ 9,462
$ 3,282

Total non-operating expense (61,443 ) 6,300
9,462
(45,681 )
Income before income taxes 75,572
6,300
9,462
91,334

Provision for income taxes 20,385
1,608
(1,443 ) 20,550

Net income 55,187
4,692
10,905
70,784

Net income per share-diluted ^(a)
$ 0.25
$ 0.02
$ 0.05
$ 0.33

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

~~Adjusted Revenues~~

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



				Special Items
Quarter ended Mar. 31, 2020	GAAP measure			M&A due diligence costs			Advisory fees related to activism defense			Spectrum repacking reimbursements and other			Gain on equity method investment			Other non-operating items			Special tax items			Non-GAAP measure

Corporate - General and administrative expenses	$	21,714		$	(4,588	)	$	(7,639	)	$	—		$	—		$	—		$	—		$	9,487
Spectrum repacking reimbursements and other, net	(7,515		)	—			—			7,515			—			—			—			—
Operating expenses	509,651			(4,588		)	(7,639		)	7,515			—			—			—			504,939
Operating income	174,538			4,588			7,639			(7,515		)	—			—			—			179,250
Equity income (loss) in unconsolidated investments, net	9,015			—			—			—			(12,071		)	—			—			(3,056		)
Other non-operating items, net	(19,270		)	—			—			—			—			21,744			—			2,474
Total non-operating expenses	(67,215		)	—			—			—			(12,071		)	21,744			—			(57,542		)
Income before income taxes	107,323			4,588			7,639			(7,515		)	(12,071		)	21,744			—			121,708
Provision for income taxes	21,125			1,151			1,919			(1,990		)	(3,033		)	5,463			3,944			28,579
Net income attributable to TEGNA Inc.	86,308			3,437			5,720			(5,525		)	(9,038		)	16,281			(3,944		)	93,239
Net income per share-diluted ^(a)	$	0.39		$	0.02		$	0.03		$	(0.03	)	$	(0.04	)	$	0.07		$	(0.02	)	$	0.43

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





				Special Items
Quarter ended Mar. 31, 2019	GAAP measure			Acquisition-related costs			Spectrum repacking reimbursements and other			Gains on equity method investments			Other non-operating item			Non-GAAP measure

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

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

Quarter ended Mar. 31,
2019 2018 Change

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

*** Not meaningful

Excluding the impacts of estimated net incremental Olympic and Super Bowl and Political advertising revenue, total company adjusted revenues on a comparable basis increased 8% in the first quarter 2019 compared to the same period in 2018. This is primarily attributable to increases in subscription revenue, partially offset by declines in AMS revenue as described in the Results from Operations section above.

Adjusted EBITDA - Non-GAAP

First quarter ~~2019~~2020 Adjusted EBITDA margin was 32% without corporate expense or ~~30%~~31% with corporate expense. Our total Adjusted EBITDA ~~decreased $4.1~~increased $59.2 million ~~or 3%~~ in the first quarter of ~~2019~~2020 compared to ~~2018. The decrease~~2019. Our 2019 Acquisitions added Adjusted EBITDA of $37.6 million. Excluding 2019 Acquisitions, Adjusted EBITDA was higher by $21.6 million. This increase was primarily driven by the operational factors discussed above within the revenue and operating expense fluctuation explanation ~~sections. Most~~sections, most notably, ~~for this quarter,~~ the ~~decrease was primarily driven by lower~~expected increase of subscription and high-margin ~~Olympics, Super Bowl and~~ political ~~revenue, coupled with higher programming expense related to subscription revenue growth.~~revenue.

Free ~~cash flow reconciliation~~Cash Flow Reconciliation

Our free cash flow, a non-GAAP performance measure, was ~~$109.1~~$142.2 million in the first ~~quarter~~three months of ~~2019~~2020 compared to ~~$123.4~~$109.1 millionfor the same period in ~~2018.~~2019.

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

~~Forward Looking Financial Information~~



~~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~~.

Liquidity, Capital Resources and Cash Flows

Our cash generation capability and financial condition, together with our significant borrowing capacity under our revolving credit agreement, are sufficient to fund our capital expenditures, interest expense, dividends, share repurchases, investments in strategic initiatives and other operating requirements. Over the longer term, we expect to continue to fund debt maturities, acquisitions and investments through a combination of cash flows from operations, borrowings under our revolving credit agreement and funds raised in the capital markets.

As of March 31, 2019, our total debt was $2.91 billion, cash and cash equivalents totaled $3.8 million, and we had unused borrowing capacity of $1.47 billion under our revolving credit facility. As of March 31, 2019, approximately $2.69 billion, or 92%, of our debt has a fixed interest rate.

Our operations have historically generated strong positive cash flow which, along with availability under our existing revolving credit facility have been sufficient to fund our capital expenditures, interest expense, dividends, investments in strategic initiatives (including acquisitions) and other operating requirements.

The COVID-19 pandemic has recently had far-reaching material adverse impacts on many aspects of our operations, directly and indirectly, including our employees, consumer behavior, distribution of our content, our vendors, and the overall market. The scope and nature of these impacts continue to evolve each day. In light of the uncertain and rapidly evolving situation relating to the COVID-19 pandemic, we have taken a number of precautionary measures to mitigate the financial impact of the pandemic, and minimize the resultant risks to our company, employees, our shareholders, customers, and the communities in which we serve. Such steps include the following:

Further, in response to COVID-19, President Donald Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) on March 27, 2020. The CARES Act provides ~~adequate~~numerous tax provisions and other stimulus measures. We believe we will benefit from the CARES Act as a result of lower 2020 tax payments of approximately $7 million from the provisions that allow for (1) immediate deduction of any eligible leasehold improvements placed in service during 2018 and 2019, and (2) temporary relaxation of net interest deduction limitations which will allow us to immediately deduct 2019 interest expense that would other otherwise have been disallowed and carried forward to future periods. We also elected to defer the employer portion of the social security payroll tax (6.2%) as outlined within the CARES Act. The deferral is effective from March 27, 2020 through December 31, 2020. We estimate the cash flow benefit of this to be approximately $15 million in 2020. The deferred amount will be paid in two installments and the amount will be considered timely paid if 50% of the deferred amount is paid by December 31, 2021 and the remainder by December 31, 2022.

In addition, during the second half of 2019 and in January 2020, we closed several strategic actions which significantly increased our financial liquidity in advance of the COVID-19 pandemic. On August 15, 2019, we amended and extended our $1.51 billion revolving credit facility until August 15, 2024. The amendment also increased our permitted total leverage ratio as follows:

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

As of March 31, 2020, we were in compliance with all covenants contained in our debt agreements and ~~strategic growth opportunities,~~credit facility. As of March 31, 2020, our leverage ratio, calculated in accordance with our revolving credit agreement and term loan agreements, was 4.59x, well below the permitted leverage ratio of less than 5.5x. The leverage ratio is calculated using annualized adjusted EBITDA (as defined in the agreement) for the trailing eight quarters. While we do expect the cash flow we generate to decline in the second quarter on account of the pandemic containment measures in place, we believe that we will remain compliant with all covenants for the foreseeable future.

We often present a different leverage ratio in our investor communications than the one required to be computed by our revolving covenant agreement. The one in our investor communications, which is regularly reviewed by our management and our board of directors, was 4.7x as of March 31, 2020. The primary difference between this computation and the leverage ratio calculated in accordance with our revolving credit agreement is the definition of adjusted EBITDA in the revolving credit agreement version requires additional adjustments to add back non-cash compensation and contractual synergy benefits during periods in the trailing eight quarters that preceded the acquisition.

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 proceeds from this note offering were used to finance a portion of the acquisition of the Nexstar Stations, and along with borrowing under the revolving credit facility, were used to repay the remaining $320 million of notes bearing fixed rate interest at 5.125% which had become due in October 2019. Additionally we early repaid $290 million of our $600 million unsecured notes bearing fixed interest at 5.125% which are due in July 2020.

On January 9, 2020 we completed a private placement offering of $1.0 billion senior notes bearing an interest rate of 4.625% which are due in March 2028. These senior notes, as well as ~~acquisitions such as~~those issued in September 2019, include customary market covenants and call provisions consistent with our ~~2019 acquisition~~past issuances. On February 11, 2020 we used the net proceeds to repay the remaining $310 million principal amount of ~~WTOL~~our 5.125% Senior Notes due 2020, the $650 million principal amount of our 6.375% Senior Notes due 2023, a $13.8 million call premium on our 6.375% Senior Notes due 2023 and ~~KWES~~borrowings under our revolving credit facility.

As of March 31, 2020, our total debt was $4.1 billion, cash and cash equivalents totaled $35.1 million, and we had unused borrowing capacity of $720.8 million under our ~~recently announced 11 station acquisition from Nexstar Media Group~~revolving credit facility. As of March 31, 2020, approximately $3.22 billion, or 78%, of our debt has a fixed interest rate. Excluding our ability to repay funds with the revolving credit facility, we have minimal near-term contractual debt maturities due, with $100 million remaining in 2020, and ~~Justice/Quest multicast Channels.~~ then no maturities due until September 2021 of $350 million.

Our financial and operating performance, as well as our ability to generate sufficient cash flow to maintain compliance with credit facility covenants, are subject to certain risk factors; see Item 1A. “Risk Factors” in this Report as well as our ~~2018~~2019 Annual Report on Form 10-K for further discussion. We expect our existing cash and cash equivalents, cash flow from our operations,

~~On September 19, 2017, we announced that~~

and borrowing capacity under the revolving credit facility will be more than sufficient to satisfy our ~~Board of Directors authorized a share repurchase program~~debt service obligations, capital expenditure requirements, and working capital needs for ~~up to $300.0 million of our common stock over three years. During~~ the first quarter of 2019, no shares were repurchased and as of March 31, 2019, approximately $279.1 million remained under this program. As a result of our pending 11 station acquisition from Nexstar Media Group, we have suspended share repurchases under this program.next twelve months.

Cash Flows

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

Quarter ended Mar. 31,
2019 2018

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

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

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



	Three months ended Mar. 31,
	2020			2019

Balance of cash and cash equivalents beginning of the period	$	29,404		$	135,862

Operating activities:
Net income	86,198			73,979
Depreciation, amortization and other non-cash adjustments	28,482			13,131
Pension contributions, net of expense	(3,642		)	(242		)
Other, net	66,326			(38,459		)
Cash flow from operating activities	177,364			48,409
Investing activities:
Payments for acquisitions of businesses and other assets, net of cash acquired	(15,000		)	(108,872		)
All other investing activities	(563		)	(1,165		)
Cash flow used for investing activities	(15,563		)	(110,037		)

Cash flow used for financing activities	(156,146		)	(70,416		)
Increase (decrease) in cash and cash equivalents	5,655			(132,044		)

Balance of cash and cash equivalents end of the period	$	35,059		$	3,818

Operating Activities -Cash flow from operating activities was ~~$48.4~~$177.4 million for the ~~three months ended March 31, 2019,~~first quarter of 2020, compared to ~~$51.2~~$48.4 million for the same period in ~~2018.~~2019. The ~~$2.8~~$129.0 million ~~decrease~~net increase in ~~net~~ cash flow from operating activities was primarily due to ~~an increase~~$91.1 million favorable change in ~~subscription receivables (due to rate increases and timing of payments) and a decline in payables (including~~working capital driven by accounts payable (prior year included refunds paid to certain Premion customers)~~, which~~ and accounts receivable (due to increase in cash collection on AMS). Also contributing to the improvement was an increase in operating income of $41.9 million, in part due to contributions from stations acquired in 2019 and increase in political advertising in the first quarter of 2020. These amounts were partially offset by ~~a decline~~an increase in ~~pension~~interest payments of ~~$27.5 million.~~$38.8 million primarily due to interest payments made in 2020 on unsecured notes issued in the third quarter of 2019.

Investing Activities -Cash flow used for investing activities was ~~$110.0~~$15.6 million for the ~~three months ended March 31, 2019,~~first quarter of 2020, compared to ~~$338.2~~$110.0 million for the same period ~~2018.~~in 2019. The decrease ~~of $228.2 million~~ was primarily due to a ~~reduction~~lower amount spent on acquisitions in ~~the amount of~~2020 as compared to cash used ~~for acquisitions. In 2019, we used $108.9 million for~~in the acquisition of ~~WTOL and KWES as compared to~~ the ~~2018 acquisition~~Gray Stations for $108.9 million in the first quarter of ~~KFMB for $325.9 million.~~2019.

Financing Activities - Cash flow used for financing activities was ~~$70.4~~$156.1 million for the ~~three months ended March 31, 2019,~~first quarter of 2020, compared to ~~cash flow from financing activities of $167.3~~$70.4 million for the same period in ~~2018.~~2019. The change was primarily due to debt activity in 2020. Specifically, in 2020 we issued $1.0 billion of unsecured notes, the proceeds of which were used to early redeem $650.0 million of unsecured notes due in October 2023 and $310.0 million due in July 2020. We incurred combined debt issuance and early redemption fees of $27.6 million related to these actions. Additionally, we paid down $118.0 million on our revolving credit ~~facility. In~~facility early in the first quarter of ~~2019 we made net payments of $30.0 million on the revolver~~2020 as compared to $30.0 million in the ~~same period in 2018 when we had borrowings~~first quarter of ~~$220.0 million (primarily for the acquisition of KFMB).~~2019.

Fiscal Year 2020 Guidance Update

As discussed above, the full impact of the COVID-19 pandemic, particularly with regard to the broader advertising industry, remains uncertain. As a result, on April 20, 2020, we suspended our full year 2020 guidance and 2021 preliminary outlook.

Certain Factors Affecting Forward-Looking Statements

Certain statements in this Quarterly Report on Form 10-Q contain forward-looking statements regarding business strategies, market potential, future financial performance and other ~~matters.~~matters, which include, but is not limited to the adverse impacts caused by the COVID-19 pandemic and its effect on our revenues, particularly our non-political advertising revenues. The words “believe,” “expect,” “estimate,” “could,” “should,” “intend,” “may,” “plan,” “seek,” “anticipate,” “project” and similar expressions, among others, generally identify “forward-looking statements”. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results and events to differ materially from those anticipated in the forward-looking statements, including those described within Part II, Item 1A “Risk Factors” in this current report, as well as under Item 1A. “Risk Factors” in our ~~2018~~2019 Annual Report on Form 10-K.

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

Item 3. Quantitative and Qualitative Disclosures about Market Risk

For quantitative and qualitative disclosures about market risk, refer to the following section of our ~~2018~~2019 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.~~2019.

As of March 31, ~~2019,~~2020, approximately ~~$2.69~~$3.22 billion of our debt has a fixed interest rate (which represents approximately ~~92%~~78% of our total principal debt obligation). Our remaining debt obligation of ~~$220~~$885 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~~$4.4 million. The fair value of our total debt, based on bid and ask quotes for the related debt, totaled ~~$2.98~~$3.85 billion as of March 31, ~~2019~~2020 and ~~$2.96~~$4.32 billion as of December 31, ~~2018.~~2019.

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, ~~2019.~~2020. 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, ~~2019,~~2020, to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 are recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

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

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

See Note 11 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~~2019 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~~The information below represents a new risk factor related to the adverse impacts from the COVID-19 pandemic.

The COVID-19 pandemic could continue to materially adversely affect our financial condition, results of operations and cash flows

During the first quarter of 2020, a novel strain of coronavirus (COVID-19) believed to have been ~~any~~first identified in Wuhan, China, spread globally, including to every state in the United States. On March 11, 2020, the World Health Organization declared COVID-19 a pandemic, and on March 13, 2020, the United States declared a national emergency with respect to COVID-19. The federal and state governments in the United States have responded by instituting a wide variety of mitigating control measures, including, mandatory quarantines, closures of non-essential businesses and all other places of social interaction, while implementing “shelter in place” orders and restricting travel. Such control measures have resulted in cancellation or postponement of sporting events, including the Olympics, and suspension of popular entertainment content production. The mitigating control measures began negatively impacting our AMS revenue stream in mid-March as demand for non-political advertising softened. This trend has continued into the second quarter of 2020 as such measures remain largely in place as of this date.

The extent of its impact on our financial and operational results, which could be material, ~~changes~~will depend on the length of time that the pandemic continues and whether subsequent waves of the infection happen, its effect on our customers’ demand for our advertising products (as well as their ability to pay us for services provided), the pace at which governmental regulations closing businesses and restricting movement imposed in response to the pandemic are relaxed, the success of large economic stimulus measures passed into law in recent weeks as well as uncertainty regarding all of the foregoing.

While we cannot at this time predict the full impact of the COVID-19 pandemic, it is likely to have a material adverse effect on at least our near-term results of operations and cash flows. In addition, a sustained adverse impact from the COVID-19 pandemic could eventually impact our ability to maintain compliance with covenants under our revolving credit facility in the future further affecting our liquidity and financial condition. In addition, we may experience an increased risk ~~factors previously disclosed~~of undetected malicious cyber-security attacks due to our workforce working remotely. We continue to closely monitor the situation, to assess further possible implications to our business and customers, and to take actions in ~~our 2018 Annual Report on Form 10-K.~~an effort to mitigate adverse consequences.

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 quarter of ~~2019,~~2020, no shares were repurchased and as of March 31, ~~2019,~~2020, approximately $279.1 million remained under this program. As a result of our ~~pending 11 station acquisition from Nexstar Media Group,~~2019 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~~ (incorporated by reference to Exhibit 3-1 to TEGNA Inc.’s Form 10-Q for the fiscal quarter ended April 1, ~~2007.~~2007).

3-1-1	Amendment to Third Restated Certificate of Incorporation of TEGNA Inc.	~~Incorporated~~ (incorporated by reference to Exhibit 3-1 to TEGNA Inc.’s Form 8-K filed on May 1, ~~2015.~~2015).

3-1-2	Amendment to Third Restated Certificate of Incorporation of TEGNA Inc.	~~Incorporated~~ (incorporated by reference to Exhibit 3-1 to TEGNA Inc.’s Form 8-K filed on July 2, ~~2015.~~2015).

3-2	By-laws, as amended through July 24, 2018.	~~Incorporated~~ (incorporated by reference to Exhibit 3-1 to TEGNA Inc.’s Form 8-K filed on July 27, ~~2018.~~2018).

4-1	Fourteenth Supplemental Indenture, dated as of January 9, 2020, between TEGNA Inc. and U.S. Bank National Association, as Trustee.

10-1	Form of Executive Officer ~~Performance Share~~Restricted Stock Unit Award Agreement.*	~~Attached.~~

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

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

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

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

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

101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

~~101~~101.SCH	~~The following financial information from TEGNA Inc. Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, formatted in~~Inline XBRL includes: (i) Condensed Consolidated Balance Sheets at March 31, 2019 and December 31, 2018, (ii) Consolidated Statements of Income for 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.Taxonomy Extension Schema Document.
	~~Attached.~~
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF	Inline XBRL Taxonomy Extension Definition Document.

101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

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, 2019~~11, 2020	TEGNA INC.

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

3133



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



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



	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


	Two Years Ending Mar. 31,								Two Years Ending Mar. 31,
	2019				2018				2020				2019

Advertising & Marketing Services	54	%			60	%			50	%			54	%
Subscription	39	%	}	45%	35	%	}	39%	42	%	}	49%	39	%	}	45%
Political	6	%			4	%			7	%			6	%
Other	1	%			1	%			1	%			1	%
Total revenues	100	%			100	%			100	%			100	%



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

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

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

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

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

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