UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________

FORM 10-Q

_______________________

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

For the quarterly period ended ~~June 30, 2021~~March 31, 2022

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

Commission file number 1-6961

___________________________

TEGNA INC.

(Exact name of registrant as specified in its charter)

___________________________

Delaware

16-0442930

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

8350 Broad Street, Suite 2000,

Tysons,

Virginia

22102-5151

(Address of principal executive offices)

(Zip Code)

(703)

873-6600

(Registrant’s telephone number, including area code)


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

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

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

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

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


Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

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

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

The total number of shares of the registrant’s Common Stock, $1 par value, outstanding as of ~~July 31, 2021~~April 30, 2022 was ~~221,085,466.~~222,851,730.

INDEX TO TEGNA INC.

~~June 30, 2021~~Mar. 31, 2022 FORM 10-Q


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

1.	1.	Financial Statements		1.	Financial Statements

		Condensed Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020	3		Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021	3

		Consolidated Statements of Income for the Quarters and Si x Month s Ended June 3 0 , 2021 and 2020	5		Consolidated Statements of Income for the Quarters Ended March 31, 2022 and 2021	5

		Consolidated Statements of Comprehensive Income for the Quarters and Six Months Ended June 3 0 , 2021 and 2020	6		Consolidated Statements of Comprehensive Income for the Quarters Ended March 31, 2022 and 2021	6

		Condensed Consolidated Statements of Cash Flows for the Si x Months Ended June 3 0 , 2021 and 2020	7		Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021	7

		Consolidated Statements of Equity and Redeemable Noncontrolling Interest for the Quarters and Six Mon ths Ended June 3 0 , 2021 and 2020	8		Consolidated Statements of Equity and Redeemable Noncontrolling Interest for the Quarters Ended March 31, 2022 and 2021	8

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

2.	2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17	2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16

3.	3.	Quantitative and Qualitative Disclosures about Market Risk	31	3.	Quantitative and Qualitative Disclosures about Market Risk	26

4.	4.	Controls and Procedures	31	4.	Controls and Procedures	27

		PART II. OTHER INFORMATION			PART II. OTHER INFORMATION

1.	1.	Legal Proceedings	32	1.	Legal Proceedings	27

1A.	1A.	Risk Factors	32	1A.	Risk Factors	27

2.	2.	Unregistered Sales of Equity Securities and Use of Proceeds	32	2.	Unregistered Sales of Equity Securities and Use of Proceeds	27

3.	3.	Defaults Upon Senior Securities	32	3.	Defaults Upon Senior Securities	27

4.	4.	Mine Safety Disclosures	32	4.	Mine Safety Disclosures	27

5.	5.	Other Information	32	5.	Other Information	27

6.	6.	Exhibits	33	6.	Exhibits	28

SIGNATURE	SIGNATURE		34	SIGNATURE		29

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

TEGNA Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

In thousands of dollars (Unaudited)


		June 30, 2021		Dec. 31, 2020			Mar. 31, 2022		Dec. 31, 2021

ASSETS	ASSETS					ASSETS
Current assets	Current assets					Current assets
Cash and cash equivalents	Cash and cash equivalents	$	57,262	$	40,968	Cash and cash equivalents	$	43,316	$	56,989
Accounts receivable, net of allowances of $6,845 and $7,035, respectively		588,326		550,755
Accounts receivable, net of allowances of $4,810 and $4,371, respectively						Accounts receivable, net of allowances of $4,810 and $4,371, respectively	641,960		642,280
Other receivables	Other receivables	11,506		14,031		Other receivables	13,508		15,496
Syndicated programming rights	Syndicated programming rights	21,063		47,331		Syndicated programming rights	39,378		53,100
Prepaid expenses and other current assets	Prepaid expenses and other current assets	20,261		19,509		Prepaid expenses and other current assets	30,589		19,724
Total current assets	Total current assets	698,418		672,594		Total current assets	768,751		787,589
Property and equipment	Property and equipment					Property and equipment
Cost	Cost	1,048,043		1,026,459		Cost	1,058,682		1,053,851
Less accumulated depreciation	Less accumulated depreciation	(582,058)		(556,100)		Less accumulated depreciation	(601,343)		(586,656)
Net property and equipment	Net property and equipment	465,985		470,359		Net property and equipment	457,339		467,195
Intangible and other assets	Intangible and other assets					Intangible and other assets
Goodwill	Goodwill	2,981,587		2,968,693		Goodwill	2,981,587		2,981,587
Indefinite-lived and amortizable intangible assets, less accumulated amortization of $267,115 and $235,582, respectively		2,472,966		2,503,644
Indefinite-lived and amortizable intangible assets, less accumulated amortization of $313,593 and $298,593, respectively						Indefinite-lived and amortizable intangible assets, less accumulated amortization of $313,593 and $298,593, respectively	2,426,488		2,441,488
Right-of-use assets for operating leases	Right-of-use assets for operating leases	92,422		97,190		Right-of-use assets for operating leases	84,500		87,279
Investments and other assets	Investments and other assets	131,717		136,219		Investments and other assets	135,080		152,508
Total intangible and other assets	Total intangible and other assets	5,678,692		5,705,746		Total intangible and other assets	5,627,655		5,662,862
Total assets	Total assets	$	6,843,095	$	6,848,699	Total assets	$	6,853,745	$	6,917,646

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

TEGNA Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

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


		June 30, 2021		Dec. 31, 2020			Mar. 31, 2022		Dec. 31, 2021

LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY	LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY					LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY
Current liabilities	Current liabilities					Current liabilities
Accounts payable	Accounts payable	$	37,357	$	58,049	Accounts payable	$	86,984	$	72,996
Accrued liabilities	Accrued liabilities					Accrued liabilities
Compensation	Compensation	53,002		46,213		Compensation	38,492		55,179
Interest	Interest	45,729		47,249		Interest	12,795		45,905
Contracts payable for programming rights	Contracts payable for programming rights	94,512		130,522		Contracts payable for programming rights	104,981		98,534
Other	Other	81,590		78,219		Other	89,367		91,098

Income taxes payable	Income taxes payable	5,622		63,923		Income taxes payable	47,176		11,420

Total current liabilities	Total current liabilities	317,812		424,175		Total current liabilities	379,795		375,132
Noncurrent liabilities	Noncurrent liabilities					Noncurrent liabilities
Income taxes		9,224		7,303

Deferred income tax liability	Deferred income tax liability	534,872		530,240		Deferred income tax liability	550,998		548,374
Long-term debt	Long-term debt	3,455,978		3,553,220		Long-term debt	3,066,783		3,231,970
Pension liabilities	Pension liabilities	74,637		85,908		Pension liabilities	56,428		58,063
Operating lease liabilities	Operating lease liabilities	94,347		99,337		Operating lease liabilities	85,926		88,970
Other noncurrent liabilities	Other noncurrent liabilities	81,746		75,488		Other noncurrent liabilities	78,536		79,102
Total noncurrent liabilities	Total noncurrent liabilities	4,250,804		4,351,496		Total noncurrent liabilities	3,838,671		4,006,479
Total liabilities	Total liabilities	4,568,616		4,775,671		Total liabilities	4,218,466		4,381,611

Commitments and contingent liabilities (see Note 9)	Commitments and contingent liabilities (see Note 9)	0		0		Commitments and contingent liabilities (see Note 9)	0		0

Redeemable noncontrolling interest (see Note 1)	Redeemable noncontrolling interest (see Note 1)	15,523		14,933		Redeemable noncontrolling interest (see Note 1)	16,430		16,129

Shareholders’ equity	Shareholders’ equity					Shareholders’ equity
Common stock of $1 par value per share, 800,000,000 shares authorized, 324,418,632 shares issued	Common stock of $1 par value per share, 800,000,000 shares authorized, 324,418,632 shares issued	324,419		324,419		Common stock of $1 par value per share, 800,000,000 shares authorized, 324,418,632 shares issued	324,419		324,419
Additional paid-in capital	Additional paid-in capital	27,941		113,267		Additional paid-in capital	27,941		27,941
Retained earnings	Retained earnings	7,249,257		7,075,640		Retained earnings	7,479,795		7,459,380
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(118,604)		(121,076)		Accumulated other comprehensive loss	(111,834)		(97,216)
Less treasury stock at cost, 103,438,458 shares and 104,918,360 shares, respectively		(5,224,057)		(5,334,155)
Less treasury stock at cost, 101,681,915 shares and 103,012,455 shares, respectively						Less treasury stock at cost, 101,681,915 shares and 103,012,455 shares, respectively	(5,101,472)		(5,194,618)
Total equity	Total equity	2,258,956		2,058,095		Total equity	2,618,849		2,519,906
Total liabilities, redeemable noncontrolling interest and equity	Total liabilities, redeemable noncontrolling interest and equity	$	6,843,095	$	6,848,699	Total liabilities, redeemable noncontrolling interest and equity	$	6,853,745	$	6,917,646

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

TEGNA Inc.

CONSOLIDATED STATEMENTS OF INCOME

Unaudited, in thousands of dollars, except per share amounts


		Quarter ended June 30,				Six months ended June 30,					Quarter ended Mar. 31,
		2021		2020		2021		2020			2022		2021

Revenues	Revenues	$	732,908	$	577,627	$	1,459,959	$	1,261,816	Revenues	$	774,123	$	727,051

Operating expenses:	Operating expenses:									Operating expenses:
Cost of revenues1	Cost of revenues1	397,118		355,367		791,810		724,735		Cost of revenues1	411,450		394,692
Business units - Selling, general and administrative expenses	Business units - Selling, general and administrative expenses	96,949		85,008		186,275		177,976		Business units - Selling, general and administrative expenses	101,969		89,326
Corporate - General and administrative expenses	Corporate - General and administrative expenses	23,183		28,312		40,053		50,026		Corporate - General and administrative expenses	21,320		16,870
Depreciation	Depreciation	15,838		16,711		31,734		33,611		Depreciation	15,305		15,896
Amortization of intangible assets	Amortization of intangible assets	15,773		17,248		31,533		33,464		Amortization of intangible assets	15,000		15,760
Spectrum repacking reimbursements and other, net	Spectrum repacking reimbursements and other, net	(1,475)		(116)		(2,898)		(7,631)		Spectrum repacking reimbursements and other, net	(58)		(1,423)
Total	Total	547,386		502,530		1,078,507		1,012,181		Total	564,986		531,121
Operating income	Operating income	185,522		75,097		381,452		249,635		Operating income	209,137		195,930

Non-operating income (expense):
Equity (loss) income in unconsolidated investments, net		(2,597)		1,921		(3,926)		10,936
Non-operating (expense) income:										Non-operating (expense) income:
Equity loss in unconsolidated investments, net										Equity loss in unconsolidated investments, net	(3,811)		(1,329)
Interest expense	Interest expense	(46,609)		(51,877)		(93,094)		(108,837)		Interest expense	(43,620)		(46,485)
Other non-operating items, net	Other non-operating items, net	1,524		1,039		1,854		(18,231)		Other non-operating items, net	17,319		330
Total	Total	(47,682)		(48,917)		(95,166)		(116,132)		Total	(30,112)		(47,484)

Income before income taxes	Income before income taxes	137,840		26,180		286,286		133,503		Income before income taxes	179,025		148,446
Provision for income taxes	Provision for income taxes	30,986		6,607		66,600		27,732		Provision for income taxes	44,738		35,614
Net Income	Net Income	106,854		19,573		219,686		105,771		Net Income	134,287		112,832
Net (income) loss attributable to redeemable noncontrolling interest		(227)		374		(442)		484
Net income attributable to redeemable noncontrolling interest										Net income attributable to redeemable noncontrolling interest	(53)		(215)
Net income attributable to TEGNA Inc.	Net income attributable to TEGNA Inc.	$	106,627	$	19,947	$	219,244	$	106,255	Net income attributable to TEGNA Inc.	$	134,234	$	112,617

Net income per share:
Earnings per share:										Earnings per share:
Basic	Basic	$	0.48	$	0.09	$	0.99	$	0.48	Basic	$	0.60	$	0.51
Diluted	Diluted	$	0.48	$	0.09	$	0.99	$	0.48	Diluted	$	0.60	$	0.51

Weighted average number of common shares outstanding:	Weighted average number of common shares outstanding:									Weighted average number of common shares outstanding:
Basic shares	Basic shares	221,522		219,128		221,064		218,703		Basic shares	222,712		220,602
Diluted shares	Diluted shares	222,506		219,426		221,855		219,144		Diluted shares	223,240		221,198

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

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

TEGNA Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Unaudited, in thousands of dollars


		Quarter ended June 30,				Six months ended June 30,					Quarter ended Mar. 31,
		2021		2020		2021		2020			2022		2021

Net income	Net income	$	106,854	$	19,573	$	219,686	$	105,771	Net income	$	134,287	$	112,832
Other comprehensive income, before tax:	Other comprehensive income, before tax:									Other comprehensive income, before tax:
Foreign currency translation adjustments	Foreign currency translation adjustments	255		(273)		751		130		Foreign currency translation adjustments	142		496

Recognition of previously deferred post-retirement benefit plan costs	Recognition of previously deferred post-retirement benefit plan costs	1,353		1,604		2,578		3,102		Recognition of previously deferred post-retirement benefit plan costs	975		1,225

Other comprehensive income, before tax		1,608		1,331		3,329		3,232

Realized gain on available-for-sale investment during the period										Realized gain on available-for-sale investment during the period	(20,800)		—
Other comprehensive (loss) income, before tax										Other comprehensive (loss) income, before tax	(19,683)		1,721
Income tax effect related to components of other comprehensive income	Income tax effect related to components of other comprehensive income	(414)		(335)		(857)		(814)		Income tax effect related to components of other comprehensive income	5,065		(443)
Other comprehensive income, net of tax	Other comprehensive income, net of tax	1,194		996		2,472		2,418		Other comprehensive income, net of tax	(14,618)		1,278
Comprehensive income	Comprehensive income	108,048		20,569		222,158		108,189		Comprehensive income	119,669		114,110
Comprehensive (income) loss attributable to redeemable noncontrolling interest		(227)		374		(442)		484
Comprehensive income attributable to redeemable noncontrolling interest										Comprehensive income attributable to redeemable noncontrolling interest	(53)		(215)
Comprehensive income attributable to TEGNA Inc.	Comprehensive income attributable to TEGNA Inc.	$	107,821	$	20,943	$	221,716	$	108,673	Comprehensive income attributable to TEGNA Inc.	$	119,616	$	113,895

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

TEGNA Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited, in thousands of dollars

Six months ended June 30,
2021 2020
Cash flows from operating activities:
Net income $ 219,686 $ 105,771
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation and amortization 63,267 67,075
Stock-based compensation 16,172 7,568
Company stock 401(k) contribution 9,384 8,566
Equity loss (income) from unconsolidated investments, net 3,926 (10,936)
Pension contributions, net of income (8,781) (5,885)
Change in other assets and liabilities, net of acquisitions:
(Increase) decrease in trade receivables (37,207) 91,246
Decrease in accounts payable (20,692) (13,821)
(Decrease) increase in interest and taxes payable (52,483) 32,056
Decrease in deferred revenue (1,015) (1,123)
Change in other assets and liabilities, net 4,236 33,025
Net cash flow from operating activities 196,493 313,542
Cash flows from investing activities:
Purchase of property and equipment (27,621) (24,308)
Reimbursements from spectrum repacking 4,438 9,768
Payments for acquisitions of businesses and other assets, net of cash acquired (13,341) (15,841)
Purchases of investments (408) (704)
Proceeds from investments 2,418 5,028
Proceeds from sale of assets and businesses 262 5,000
Net cash flow used for investing activities (34,252) (21,057)
Cash flows from financing activities:
Payments under revolving credit facilities, net (99,000) (68,000)
Proceeds from borrowings 0 1,000,000
Debt repayments 0 (1,010,000)
Payments for debt issuance costs and early redemption fee 0 (29,948)
Proceeds from sale of minority ownership interest in Premion 0 14,000
Dividends paid (36,426) (45,776)
Other, net (10,521) (9,095)
Net cash flow used for financing activities (145,947) (148,819)
Increase in cash 16,294 143,666
Balance of cash, beginning of period 40,968 29,404
Balance of cash, end of period $ 57,262 $ 173,070
Supplemental cash flow information:
Cash paid for income taxes, net of refunds $ 117,600 $ 465
Cash paid for interest $ 91,022 $ 100,074


	Three months ended Mar. 31,
	2022		2021

Cash flows from operating activities:
Net income	$	134,287	$	112,832
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation and amortization	30,305		31,656
Stock-based compensation	10,495		8,761
Company stock 401(k) contribution	5,338		5,304
Gains on assets, net	(18,308)		—
Equity loss from unconsolidated investments, net	3,811		1,329
Pension contributions including income, net of expense	(585)		(4,410)
Change in other assets and liabilities, net of acquisitions:
Increase in trade receivables	(120)		(63,120)
Increase (decrease) in accounts payable	13,987		(15,077)
Increase in interest and taxes payable, net	13,663		4,320
Increase in deferred revenue	2,298		923
Change in other assets and liabilities, net	1,089		(24,447)
Net cash flow from operating activities	196,260		58,071
Cash flows from investing activities:
Purchase of property and equipment	(5,538)		(13,185)
Reimbursements from spectrum repacking	58		1,423
Payments for acquisitions of businesses	—		(13,341)
Purchases of investments	(2,216)		(157)
Proceeds from investments	—		2,022
Proceeds from sale of assets	366		7
Net cash flow used for investing activities	(7,330)		(23,231)
Cash flows from financing activities:
Payments under revolving credit facilities, net	(166,000)		(37,000)




Dividends paid	(21,151)		(15,439)

Other, net	(15,452)		(10,516)
Net cash flow used for financing activities	(202,603)		(62,955)
Decrease in cash	(13,673)		(28,115)
Balance of cash, beginning of period	56,989		40,968
Balance of cash, end of period	$	43,316	$	12,853

Supplemental cash flow information:
Cash refunds from income taxes, net of payments	$	(248)	$	(33)
Cash paid for interest	$	75,063	$	76,045

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

TEGNA Inc.

CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NONCONTROLLING INTEREST

Unaudited, in thousands of dollars, except per share data

Quarters Ended: Redeemable noncontrolling interest Common
stock Additional
paid-in
capital Retained
earnings Accumulated
other
comprehensive
loss Treasury
stock Total Equity
Balance at Mar. 31, 2021 $ 15,220 $ 324,419 $ 27,596 $ 7,151,716 $ (119,798) $ (5,244,595) $ 2,139,338
Net income 227 — — 106,627 — — 106,627
Other comprehensive income, net of tax — — — — 1,194 — 1,194
Total comprehensive income 107,821
Dividends declared: $0.165 per share — — — 43 — — 43
Company stock 401(k) contribution — — (1,420) (9,053) — 14,552 4,079
Stock-based awards activity — — (5,990) — — 5,986 (4)
Stock-based compensation — — 7,410 — — — 7,410
Adjustment of redeemable noncontrolling interest to redemption value 76 — — (76) — — (76)
Other activity — — 345 — — — 345
Balance at June 30, 2021 $ 15,523 $ 324,419 $ 27,941 $ 7,249,257 $ (118,604) $ (5,224,057) $ 2,258,956
Redeemable noncontrolling interest Common
stock Additional
paid-in
capital Retained
earnings Accumulated
other
comprehensive
loss Treasury
stock Total
Balance at Mar. 31, 2020 $ 14,093 $ 324,419 $ 152,106 $ 6,725,911 $ (141,175) $ (5,403,005) $ 1,658,256
Net income (loss) (374) — — 19,947 — — 19,947
Other comprehensive income, net of tax — — — — 996 — 996
Total comprehensive income 20,943
Dividends declared: $0.07 per share — — — (15,308) — — (15,308)
Company stock 401(k) contribution — — (17,888) — — 21,316 3,428
Stock-based awards activity — — (2,627) — — 2,605 (22)
Stock-based compensation — — 8,325 — — — 8,325
Adjustment of redeemable noncontrolling interest to redemption value 654 — — (654) — — (654)
Other activity — — 339 — — — 339
Balance at June 30, 2020 $ 14,373 $ 324,419 $ 140,255 $ 6,729,896 $ (140,179) $ (5,379,084) $ 1,675,307


TEGNA Inc.
CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NON-CONTROLLING INTEREST
Unaudited, in thousands of dollars, except per share data
Quarters Ended:																Quarters Ended:	Redeemable noncontrolling interest		Common stock		Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Treasury stock		Total Equity
Balance at Dec. 31, 2021																Balance at Dec. 31, 2021	$	16,129	$	324,419	$	27,941	$	7,459,380	$	(97,216)	$	(5,194,618)	$	2,519,906
Net income																Net income	53		—		—		134,234		—		—		134,234
Other comprehensive income, net of tax																Other comprehensive income, net of tax	—		—		—		—		(14,618)		—		(14,618)
Total comprehensive income																Total comprehensive income													119,616
Dividends declared: $0.095 per share																Dividends declared: $0.095 per share	—		—		—		(21,150)		—		—		(21,150)
Company stock 401(k) contribution																Company stock 401(k) contribution	—		—		(1,322)		(11,275)		—		17,935		5,338
Stock-based awards activity																Stock-based awards activity	—		—		(9,517)		(81,146)		—		75,211		(15,452)

Six Months Ended:		Redeemable noncontrolling interest		Common stock		Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Treasury stock		Total
Stock-based compensation																Stock-based compensation	—		—		10,495		—		—		—		10,495
Adjustment of redeemable noncontrolling interest to redemption value																Adjustment of redeemable noncontrolling interest to redemption value	248		—		—		(248)		—		—		(248)
Other activity																Other activity	—		—		344		—		—		—		344
Balance at Mar. 31, 2022																Balance at Mar. 31, 2022	$	16,430	$	324,419	$	27,941	$	7,479,795	$	(111,834)	$	(5,101,472)	$	2,618,849

																	Redeemable noncontrolling interest		Common stock		Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Treasury stock		Total Equity
Balance at Dec. 31, 2020	Balance at Dec. 31, 2020	$	14,933	$	324,419	$	113,267	$	7,075,640	$	(121,076)	$	(5,334,155)	$	2,058,095	Balance at Dec. 31, 2020	$	14,933	$	324,419	$	113,267	$	7,075,640	$	(121,076)	$	(5,334,155)	$	2,058,095
Net income	Net income	442		—		—		219,244		—		—		219,244		Net income	215		—		—		112,617		—		—		112,617
Other comprehensive income, net of tax	Other comprehensive income, net of tax	—		—		—		—		2,472		—		2,472		Other comprehensive income, net of tax	—		—		—		—		1,278		—		1,278
Total comprehensive income	Total comprehensive income													221,716		Total comprehensive income													113,895
Dividends declared: $0.235 per share		—		—		—		(36,426)		—		—		(36,426)
Dividends declared: $0.165 per share																Dividends declared: $0.165 per share	—		—		—		(36,469)		—		—		(36,469)
Company stock 401(k) contribution	Company stock 401(k) contribution	—		—		(17,674)		(9,053)		—		36,111		9,384		Company stock 401(k) contribution	—		—		(16,254)		—		—		21,558		5,304
Stock-based awards activity	Stock-based awards activity	—		—		(84,509)		—		—		73,987		(10,522)		Stock-based awards activity	—		—		(78,518)		—		—		68,002		(10,516)
Stock-based compensation	Stock-based compensation	—		—		16,172		—		—		—		16,172		Stock-based compensation	—		—		8,761		—		—		—		8,761

Adjustment of redeemable noncontrolling interest to redemption value	Adjustment of redeemable noncontrolling interest to redemption value	148		—		—		(148)		—		—		(148)		Adjustment of redeemable noncontrolling interest to redemption value	72		—		—		(72)		—		—		(72)
Other activity	Other activity	—		—		685		—		—		—		685		Other activity	—		—		340		—		—		—		340
Balance at June 30, 2021		$	15,523	$	324,419	$	27,941	$	7,249,257	$	(118,604)	$	(5,224,057)	$	2,258,956
Balance at Mar. 31, 2021																Balance at Mar. 31, 2021	$	15,220	$	324,419	$	27,596	$	7,151,716	$	(119,798)	$	(5,244,595)	$	2,139,338

		Redeemable noncontrolling interest		Common stock		Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss		Treasury stock		Total
Balance at Dec. 31, 2019		$	0	$	324,419	$	247,497	$	6,655,088	$	(142,597)	$	(5,494,030)	$	1,590,377
Net income (loss)		(484)		—		—		106,255		—		—		106,255
Other comprehensive income, net of tax		—		—		—		—		2,418		—		2,418
Total comprehensive income														108,673
Dividends declared: $0.14 per share		—		—		—		(30,590)		—		—		(30,590)
Company stock 401(k) contribution		—		—		(35,719)		—		—		44,285		8,566
Stock-based awards activity		—		—		(79,756)		—		—		70,661		(9,095)
Stock-based compensation		—		—		7,568		—		—		—		7,568
Sale of minority ownership interest in Premion		14,000		—				—		—		—		—
Adjustment of redeemable noncontrolling interest to redemption value		857		—		—		(857)		—		—		(857)
Other activity		—		—		665		—		—		—		665
Balance at June 30, 2020		$	14,373	$	324,419	$	140,255	$	6,729,896	$	(140,179)	$	(5,379,084)	$	1,675,307

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

Basis of presentation: Our accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial reporting, the instructions for Form 10-Q and Article 10 of the U.S. Securities and Exchange Commission (SEC) Regulation S-X. Accordingly, they do not include all information and footnotes which are normally included in the Form 10-K and annual report to shareholders. In our opinion, the condensed consolidated financial statements reflect all adjustments of a normal recurring nature necessary for a fair statement of the results for the interim periods presented. The condensed consolidated financial statements should be read in conjunction with our (or TEGNA’s) audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. The novel coronavirus (COVID-19) pandemic has resulted, and will continue to result, in significant economic disruption and will likely continue to adversely affect our business. The impact of COVID-19 (including newly identified variants) and the extent of its adverse impact on our financial and operating results will be dictated by the length of time that the pandemic continues to affect our advertising customers.

We use the best information available in developing significant estimates inherent in our financial ~~statements, including potential impacts from the COVID-19 pandemic.~~statements. Actual results could differ from these estimates, and these differences resulting from changes in facts and circumstances could be material. Significant estimates include, but are not limited to, evaluation of goodwill and other intangible assets for impairment, ~~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. 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 1 operating and reportable segment, which primarily consists of our 64 television stations and 2 radio stations operating in 51 markets, providing high-quality television programming and digital content. Our reportable segment determination is based on our management and internal reporting structure, the nature of products and services we offer, and the financial information that is evaluated regularly by our chief operating decision maker.

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

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

The Merger is subject to the approval of the Merger Agreement by the stockholders of TEGNA and the satisfaction of customary closing conditions, including receipt of applicable regulatory approvals, and is expected to close in the second half of 2022. On April 13, 2022, we filed with the SEC a definitive proxy statement (the Proxy Statement) with respect to a special meeting of TEGNA stockholders to be held on May 17, 2022 to consider and vote upon the Merger and related proposals. Please refer to the Proxy Statement for more information.

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

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

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

Accounting guidance adopted in ~~2021:~~2022: We did not adopt any new accounting guidance in ~~2021~~2022 that had a material impact on our consolidated financial statements or disclosures.

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

Trade receivables and allowances for doubtful accounts: Trade receivables are recorded at invoiced amounts and generally do not bear interest. The allowance for doubtful accounts reflects our estimate of credit exposure, determined principally on the basis of our collection experience, aging of our receivables and any specific reserves needed for certain customers based on their credit risk. Our allowance also takes into account expected future trends which may impact our customers’ ability to pay, such as economic growth (or declines), unemployment and demand for our products and ~~services, including the impacts of the COVID-19 pandemic on these trends.~~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 ~~June 30, 2021,~~March 31, 2022, our allowance for doubtful accounts was ~~$6.8~~$4.8 million as compared to ~~$7.0~~$4.4 million as of December 31, ~~2020.~~2021.

Redeemable Noncontrolling interest: Our Premion business operates an advertising network for over-the-top (OTT) streaming and connected television platforms. In March 2020, we sold a minority interest in Premion to an affiliate of Gray Television (Gray) and entered into a 3 year commercial reselling agreement with the affiliate. Gray’s investment allows it to sell its interest to Premion if there is a change in control of TEGNA or if the existing commercial agreement terminates. Since redemption of the minority ownership interest is outside our control, Gray’s equity interest is presented outside of the Equity section on the Condensed Consolidated Balance Sheet in the caption “Redeemable noncontrolling interest.”

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

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

The primary sources of our revenues are: 1) subscription revenues, reflecting fees paid by satellite, cable, OTT (companies that deliver video content to consumers over the Internet) and telecommunications providers to carry our television signals on

their systems; 2) advertising & marketing services revenues, which include local and national non-political television advertising, digital marketing services (including Premion), ~~and~~ advertising on the stations’ websites, tablet and mobile products, and OTT apps; 3) political advertising revenues, which are driven by ~~even year~~even-year election cycles at the local and national level (e.g. 2022, 2020 ~~2018)~~etc.) and particularly in the second half of those years; and 4) other services, such as production of programming, tower rentals and ~~advertising material.~~distribution of our local news content.

Revenue earned by these sources in the ~~second quarter and~~ first ~~six~~three months of ~~2021~~2022 and ~~2020~~2021 are shown below (amounts in thousands):


		Quarter ended June 30,				Six months ended June 30,					Quarter ended Mar. 31,
		2021		2020		2021		2020			2022		2021

Subscription	Subscription	$	375,081	$	323,475	$	761,818	$	656,277	Subscription	$	391,654	$	386,737
Advertising & Marketing Services	Advertising & Marketing Services	340,889		229,083		663,723		524,236		Advertising & Marketing Services	354,467		322,834
Political	Political	9,581		17,544		19,009		64,931		Political	17,965		9,428
Other	Other	7,357		7,525		15,409		16,372		Other	10,037		8,052
Total revenues	Total revenues	$	732,908	$	577,627	$	1,459,959	$	1,261,816	Total revenues	$	774,123	$	727,051

NOTE 2 – Goodwill and other intangible assets

The following table displays goodwill, indefinite-lived intangible assets, and amortizable intangible assets as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 (in thousands):


		June 30, 2021				Dec. 31, 2020					Mar. 31, 2022				Dec. 31, 2021
		Gross		Accumulated Amortization		Gross		Accumulated Amortization			Gross		Accumulated Amortization		Gross		Accumulated Amortization

Goodwill	Goodwill	$	2,981,587	$	0	$	2,968,693	$	0	Goodwill	$	2,981,587	$	—	$	2,981,587	$	—

Indefinite-lived intangibles:	Indefinite-lived intangibles:									Indefinite-lived intangibles:
Television and radio station FCC broadcast licenses	Television and radio station FCC broadcast licenses	2,123,898		—		2,123,898		—		Television and radio station FCC broadcast licenses	2,123,898		—		2,123,898		—
Amortizable intangible assets:	Amortizable intangible assets:									Amortizable intangible assets:
Retransmission agreements	Retransmission agreements	235,215		(153,684)		235,215		(138,928)		Retransmission agreements	235,215		(175,153)		235,215		(168,439)
Network affiliation agreements	Network affiliation agreements	309,503		(84,945)		309,503		(72,694)		Network affiliation agreements	309,503		(103,312)		309,503		(97,195)
Other	Other	71,465		(28,486)		70,610		(23,960)		Other	71,465		(35,128)		71,465		(32,959)
Total indefinite-lived and amortizable intangible assets	Total indefinite-lived and amortizable intangible assets	$	2,740,081	$	(267,115)	$	2,739,226	$	(235,582)	Total indefinite-lived and amortizable intangible assets	$	2,740,081	$	(313,593)	$	2,740,081	$	(298,593)

Our retransmission agreements and network affiliation agreements are amortized on a straight-line basis over their estimated useful lives. Other intangibles primarily include distribution agreements from our multicast networks acquisition, which are also amortized on a straight-line basis over their useful lives.

On January 27, 2021, we acquired Locked On Podcast Network LLC for $13.3 million, which consisted of a base purchase price of $13.8 million and a working capital adjustment of $0.5 million. Locked On produces daily podcasts for every team across the 4 major professional sports leagues, as well as major college sports teams. In connection with this acquisition, we recorded initial values for goodwill and a tradename of $12.9 million and $0.9 million, respectively. These amounts are based on preliminary valuations, and therefore, these assets are subject to change as additional information is obtained about the facts and circumstances that existed as of the acquisition date. The goodwill is calculated as the excess of the purchase price over the net fair value of the identifiable assets acquired and liabilities assumed, and represents the future economic benefits expected to arise from the acquisition that do not qualify for separate recognition, including assembled workforce, as well as future synergies that we expect to generate. The goodwill recognized is expected to be deductible for tax purposes.

~~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 our 2020 Form 10-K, after completing our annual impairment test in the fourth quarter of 2020, we had 1 television station FCC license and 1 radio station FCC license, with a combined carrying value of $67.2 million and individual impairment headroom of less than 5%. As a

result, these 2 FCC licenses are deemed to be heightened risk of future impairment. Given the ongoing COVID-19 impacts of AMS revenue and operating cash flows, we conducted an impairment assessment of these two FCC licenses at the end of the second quarter.

In performing these assessments, we analyzed factors which impact the fair value determination of FCC license assets. This included reviewing the trends in U.S. gross domestic product, the stock market, unemployment trends, discount rates and individual station performance. Based on the analysis performed, we concluded that neither of these FCC licenses were impaired as of June 30, 2021. However, a sustained economic decline, including one resulting from the COVID-19 pandemic, could result in future non-cash impairment charges of our FCC licenses, and any related impairment could have a material adverse impact on our results of operations.

NOTE 3 – Investments and other assets

Our investments and other assets consisted of the following as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 (in thousands):


		June 30, 2021		Dec. 31, 2020			Mar. 31, 2022		Dec. 31, 2021

Cash value life insurance		$	53,058	$	52,883
Cash value insurance						Cash value insurance	$	50,817	$	53,189
Available-for-sale debt security						Available-for-sale debt security	—		23,800
Equity method investments	Equity method investments	27,947		32,067		Equity method investments	17,382		21,986
Other equity investments	Other equity investments	16,939		20,271		Other equity investments	20,158		20,331
Deferred debt issuance costs	Deferred debt issuance costs	7,607		9,378		Deferred debt issuance costs	4,924		5,805
Other long-term assets	Other long-term assets	26,166		21,620		Other long-term assets	41,799		27,397
Total	Total	$	131,717	$	136,219	Total	$	135,080	$	152,508

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

Available-for-sale debt security:We hold a debt security investment issued by MadHive, Inc. (MadHive), that we classify as an available-for-sale investment. Available-for-sale debt securities are required to be carried at their fair value, with unrealized gains and losses (net of income taxes) that are considered temporary in nature recorded in “Accumulated other comprehensive loss” on the Condensed Consolidated Balance Sheet. The debt security includes features that allow us to convert investment into equity ownership upon the occurrence of certain events. In the first quarter of 2022, we amended the terms of the debt security, which became effective on January 3, 2022, in parallel with an amendment and extension of our commercial agreements with MadHive. The amendments modified several items, including the conversion rights as well as the maturity date of the note. In exchange for the convertible debt modifications, we received favorable terms in our renewed commercial agreements with MadHive. As a result of these amendments, we recognized a previously unrecognized gain of $20.8 million. The gain was recorded in “Other non-operating items, net” within our Consolidated Statement of Income. The debt will mature and become due in June 2022 and therefore its $3.0 million fair value has been reclassified as a current asset in “Other receivables” within our Condensed Consolidated Balance Sheet. See Note 9 for additional information regarding our related party transactions with MadHive.

Other equity investments: Represents investments in non-public businesses that do not have readily determinable pricing, and for which we do not have control or do not exert significant influence. These investments are recorded at cost less

impairments, if any, plus or minus changes in observable prices for those investments. In the first quarter of ~~2021,~~2022, we recorded a ~~$1.9~~$2.5 million impairment charge, in “Other non-operating items, net” within our Consolidated Statement of Income, due to the decline in the fair value of one of our investments. ~~No gains or losses were recorded on these investments in the first six 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 4 – Long-term debt

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


		June 30, 2021		Dec. 31, 2020			Mar. 31, 2022		Dec. 31, 2021

Borrowings under revolving credit agreement expiring August 2024	Borrowings under revolving credit agreement expiring August 2024	$	256,000	$	355,000	Borrowings under revolving credit agreement expiring August 2024	$	—	$	166,000
Unsecured notes bearing fixed rate interest at 5.500% due September 2024		137,000		137,000
Unsecured notes bearing fixed rate interest at 4.750% due March 2026		550,000		550,000

Unsecured notes bearing fixed rate interest at 4.75% due March 2026						Unsecured notes bearing fixed rate interest at 4.75% due March 2026	550,000		550,000
Unsecured notes bearing fixed rate interest at 7.75% due June 2027	Unsecured notes bearing fixed rate interest at 7.75% due June 2027	200,000		200,000		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	Unsecured notes bearing fixed rate interest at 7.25% due September 2027	240,000		240,000		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	Unsecured notes bearing fixed rate interest at 4.625% due March 2028	1,000,000		1,000,000		Unsecured notes bearing fixed rate interest at 4.625% due March 2028	1,000,000		1,000,000
Unsecured notes bearing fixed rate interest at 5.00% due September 2029	Unsecured notes bearing fixed rate interest at 5.00% due September 2029	1,100,000		1,100,000		Unsecured notes bearing fixed rate interest at 5.00% due September 2029	1,100,000		1,100,000
Total principal long-term debt	Total principal long-term debt	3,483,000		3,582,000		Total principal long-term debt	3,090,000		3,256,000
Debt issuance costs	Debt issuance costs	(34,399)		(36,595)		Debt issuance costs	(30,295)		(31,378)
Unamortized premiums and discounts, net		7,377		7,815
Unamortized premiums						Unamortized premiums	7,078		7,348

Total long-term debt	Total long-term debt	$	3,455,978	$	3,553,220	Total long-term debt	$	3,066,783	$	3,231,970

As of ~~June 30, 2021,~~March 31, 2022, cash and cash equivalents totaled ~~$57.3~~$43.3 million and we had unused borrowing capacity of ~~$1.23~~$1.49 billion under our $1.51 billion revolving credit facility, which expires in August 2024. We were in compliance with all covenants, including the leverage ratio (our one financial covenant) contained in our debt agreements and revolving credit facility. We believe, based on our current financial forecasts and trends, that we will remain compliant with all covenants for the foreseeable future.

NOTE 5 – Retirement plans

We have various defined benefit retirement plans. Our principal defined benefit pension plan is the TEGNA Retirement Plan (TRP). The disclosure table below primarily includes the pension expenses of the TRP and the TEGNA Supplemental Retirement Plan (SERP). The total net pension obligations, including both current and non-current liabilities, as of ~~June 30, 2021,~~March 31, 2022, were ~~$82.4~~$62.4 million, of which ~~$7.8~~$6.0 million is recorded as a current obligation within accrued liabilities on the Condensed Consolidated Balance Sheet.

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


		Quarter ended June 30,				Six months ended June 30,					Quarter ended Mar. 31,
		2021		2020		2021		2020			2022		2021

Service cost-benefits earned during the period		$	1	$	2	$	1	$	4

Interest cost on benefit obligation	Interest cost on benefit obligation	3,988		4,879		7,938		9,737		Interest cost on benefit obligation	$	4,300	$	3,950
Expected return on plan assets	Expected return on plan assets	(8,690)		(7,779)		(17,340)		(15,529)		Expected return on plan assets	(4,900)		(8,650)
Amortization of prior service cost	Amortization of prior service cost	20		87		45		45		Amortization of prior service cost	(125)		25
Amortization of actuarial loss	Amortization of actuarial loss	1,246		1,481		2,446		3,081		Amortization of actuarial loss	1,100		1,200

Income from company-sponsored retirement plans		$	(3,435)	$	(1,330)	$	(6,910)	$	(2,662)
Expense (income) from company-sponsored retirement plans										Expense (income) from company-sponsored retirement plans	$	375	$	(3,475)

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

During the ~~six~~three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ we did 0tnot make any cash contributions to the TRP. We made benefit payments to participants of the SERP of ~~$1.8 million and $3.2~~$0.9 million during both of the ~~six months ended June 30, 2021~~three month periods ending March 31, 2022 and ~~2020, respectively.~~2021. Based on actuarial projections and funding levels, we do not expect to make any cash payments to the TRP in ~~2021.~~2022 (as none are required based on our current funding levels). We expect to make additional cash payments of ~~$5.1~~$5.0 million to our SERP participants ~~in 2021.~~

during the remainder of 2022.

NOTE 6 – Accumulated other comprehensive loss

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


		Retirement Plans		Foreign Currency Translation		Total			Retirement Plans		Foreign Currency Translation		Available-For-Sale Investment		Total
Quarters Ended:	Quarters Ended:							Quarters Ended:
Balance at Mar. 31, 2021		$	(120,070)	$	272	$	(119,798)
Balance at Dec. 31, 2021								Balance at Dec. 31, 2021	$	(113,090)	$	455	$	15,419	$	(97,216)
Other comprehensive income before reclassifications	Other comprehensive income before reclassifications	0		189		189		Other comprehensive income before reclassifications	—		77		—		77
Amounts reclassified from AOCL	Amounts reclassified from AOCL	1,005		0		1,005		Amounts reclassified from AOCL	724		—		(15,419)		(14,695)
Total other comprehensive income		1,005		189		1,194
Balance at June 30, 2021		$	(119,065)	$	461	$	(118,604)
Total other comprehensive income (loss)								Total other comprehensive income (loss)	724		77		(15,419)		(14,618)
Balance at Mar. 31, 2022								Balance at Mar. 31, 2022	$	(112,366)	$	532	$	—	$	(111,834)

Balance at Mar. 31, 2020		$	(141,277)	$	102	$	(141,175)
Balance at Dec. 31, 2020								Balance at Dec. 31, 2020	$	(120,979)	$	(97)	$	—	$	(121,076)
Other comprehensive loss before reclassifications	Other comprehensive loss before reclassifications	0		(205)		(205)		Other comprehensive loss before reclassifications	—		369		—		369
Amounts reclassified from AOCL	Amounts reclassified from AOCL	1,201		0		1,201		Amounts reclassified from AOCL	909		—		—		909
Total other comprehensive income	Total other comprehensive income	1,201		(205)		996		Total other comprehensive income	909		369		—		1,278
Balance at June 30, 2020		$	(140,076)	$	(103)	$	(140,179)
Balance at Mar. 31, 2021								Balance at Mar. 31, 2021	$	(120,070)	$	272	$	—	$	(119,798)

		Retirement Plans		Foreign Currency Translation		Total
Six Months Ended:
Balance at Dec. 31, 2020		$	(120,979)	$	(97)	$	(121,076)
Other comprehensive income before reclassifications		0		558		558
Amounts reclassified from AOCL		1,914		0		1,914
Total other comprehensive income		1,914		558		2,472
Balance at June 30, 2021		$	(119,065)	$	461	$	(118,604)

Balance at Dec. 31, 2019		$	(142,398)	$	(199)	$	(142,597)
Other comprehensive income before reclassifications		0		96		96
Amounts reclassified from AOCL		2,322		0		2,322
Total other comprehensive income		2,322		96		2,418
Balance at June 30, 2020		$	(140,076)	$	(103)	$	(140,179)

Reclassifications from AOCL to the Consolidated Statements of Income are comprised of recognition of a realized gain on an available-for-sale investment as well as pension and other post-retirement components. Pension and other post retirement reclassifications are related to the ~~amortization~~amortizations of prior service costs and ~~amortization of~~ actuarial losses. Amounts reclassified out of AOCL are summarized below (in thousands):


		Quarter ended June 30,				Six months ended June 30,					Quarter ended Mar. 31,
		2021		2020		2021		2020			2022		2021

Amortization of prior service credit, net		$	(266)	$	(131)	$	(241)	$	(240)
Amortization of prior service (credit) cost, net										Amortization of prior service (credit) cost, net	$	(125)	$	25
Amortization of actuarial loss	Amortization of actuarial loss	1,619		1,735		2,819		3,342		Amortization of actuarial loss	1,100		1,200

Realized gain on available-for-sale investment										Realized gain on available-for-sale investment	(20,800)		—
Total reclassifications, before tax	Total reclassifications, before tax	1,353		1,604		2,578		3,102		Total reclassifications, before tax	(19,825)		1,225
Income tax effect	Income tax effect	(348)		(403)		(664)		(780)		Income tax effect	5,130		(316)
Total reclassifications, net of tax	Total reclassifications, net of tax	$	1,005	$	1,201	$	1,914	$	2,322	Total reclassifications, net of tax	$	(14,695)	$	909

1413

NOTE 7 – Earnings per share

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


		Quarter ended June 30,				Six months ended June 30,					Quarter ended Mar. 31,
		2021		2020		2021		2020			2022		2021

Net Income	Net Income	$	106,854	$	19,573	$	219,686	$	105,771	Net Income	$	134,287	$	112,832
Net (income) loss attributable to the noncontrolling interest		(227)		374		(442)		484
Net income attributable to the noncontrolling interest										Net income attributable to the noncontrolling interest	(53)		(215)
Adjustment of redeemable noncontrolling interest to redemption value	Adjustment of redeemable noncontrolling interest to redemption value	(76)		(654)		(148)		(857)		Adjustment of redeemable noncontrolling interest to redemption value	(248)		(72)
Earnings available to common shareholders	Earnings available to common shareholders	$	106,551	$	19,293	$	219,096	$	105,398	Earnings available to common shareholders	$	133,986	$	112,545

Weighted average number of common shares outstanding - basic	Weighted average number of common shares outstanding - basic	221,522		219,128		221,064		218,703		Weighted average number of common shares outstanding - basic	222,712		220,602
Effect of dilutive securities:	Effect of dilutive securities:									Effect of dilutive securities:
Restricted stock units	Restricted stock units	718		25		564		153		Restricted stock units	321		410
Performance shares	Performance shares	265		273		224		286		Performance shares	207		182
Stock options	Stock options	1		0		3		2		Stock options	—		4
Weighted average number of common shares outstanding - diluted	Weighted average number of common shares outstanding - diluted	222,506		219,426		221,855		219,144		Weighted average number of common shares outstanding - diluted	223,240		221,198

Net income per share - basic		$	0.48	$	0.09	$	0.99	$	0.48
Net income per share - diluted		$	0.48	$	0.09	$	0.99	$	0.48
Earnings per share - basic										Earnings per share - basic	$	0.60	$	0.51
Earnings per share - diluted										Earnings per share - diluted	$	0.60	$	0.51

Our calculation of diluted earnings per share includes the dilutive effects for the assumed vesting of outstanding restricted stock units and performance shares.

NOTE 8 – Fair value measurement

We measure and record certain assets and liabilities at fair value in the accompanying condensed consolidated financial 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.

In the first quarter of ~~2021,~~2022, we recorded a ~~$1.9~~$2.5 million impairment charge, in “Other non-operating items, net” within our Consolidated Statement of Income, due to the decline in the fair value ~~apparent from an observable price decline~~ of one of our ~~investments (Level 2).~~investments. The fair value was determined using a market approach which was based significant inputs not observable in the market, and thus represented a Level 3 fair value measurement. We ~~additionally~~also hold other financial instruments, including cash and cash equivalents, receivables, accounts payable and debt. The carrying amounts for cash and cash equivalents, receivables and accounts payable approximated their fair values. The fair value of our total debt, based on the bid and ask quotes for the related debt (Level 2), totaled ~~$3.70~~$3.15 billion at ~~June 30, 2021,~~March 31, 2022, and ~~$3.79~~$3.40 billion at December 31, ~~2020.~~2021.

NOTE 9 – 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 received a Civil Investigative Demand (CID) in connection with the DOJ’s investigation. On November 13 and December 13, 2018, the DOJ and 7 other 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, and to permit DOJ to verify compliance. ~~We do not expect the~~The costs of compliance has not been material, nor do we expect future compliance costs 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 television 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 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 DOJ 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. On November 6, 2020, the court denied the motion to dismiss. We deny any violation of law, believe that the claims asserted in the Advertising Cases are without merit, and intend to defend ourselves vigorously against them.

Litigation Relating to the Merger

As of May 9, 2022, seven lawsuits have been filed by purported TEGNA stockholders in connection with the Merger. The lawsuits have been filed against TEGNA and the current members of the Board of Directors of TEGNA (the Board of Directors). One such lawsuit was voluntarily dismissed on April 1, 2022. The complaints generally allege that the preliminary proxy statement filed by TEGNA on March 25, 2022 in connection with the Merger contained alleged material misstatements and/or omissions in violation of federal law. Plaintiffs in the complaints generally seek, among other things, to enjoin TEGNA from consummating the Merger, or in the alternative, rescission of the Merger and/or compensatory damages, as well as attorneys’ fees.

In addition, as of May 9, 2022, four demand letters have been sent to TEGNA in connection with the Merger. The demand letters were each sent on behalf of a purported TEGNA stockholder, and each alleges similar deficiencies in the Proxy Statement as those noted in the complaints referenced above.

We believe that the claims asserted in the complaints and letters described above are without merit. Additional lawsuits arising out of the Merger may also be filed in the future.

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 then 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 relinquished any spectrum rights as a result of the auction. By the end of 2020, all of our impacted stations had completed their repacking transitions to their new channels.

Throughout the repacking project the FCC has been reimbursing us for the costs we have incurred to change channels in the repacking on a lagged basis. During the second quarter of 2021, we received $3.0 million of reimbursements, which were recorded as a contra operating expense within our “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. We expect to receive reimbursements for the remaining $1.6 million of our repacking spend upon completion of the FCC’s reimbursement review process.

Related Party Transactions

We have aninvestments in the form of equity and debt ~~investment~~ in MadHive ~~Inc. (MadHive)~~ which is a related party of ~~TEGNA.~~TEGNA (see Note 3 for additional information). In addition to our investment, we also have a commercial agreement with MadHive, ~~where they support~~under which MadHive supports our Premion business in acquiring over-the-top advertising inventory and delivering ~~over-the-top ad~~corresponding advertising impressions. In the ~~second~~first quarter of 2022 and ~~first six months of~~ 2021, we incurred ~~expenses~~an expense of ~~$18.5~~$26.0 million and ~~$42.4 million, respectively, as a result of the commercial agreement with MadHive. In the second quarter and first six months of 2020, we incurred expenses of $13.7 million and $24.2~~$23.9 million, respectively, as a result of the commercial agreement with MadHive. As of ~~June 30, 2021~~March 31, 2022, and December 31, ~~2020~~2021 we had accounts payable and accrued liabilities associated with the MadHive commercial agreements of $17.2 million and $8.9 million, respectively.

In December 2021, we renewed our 2 existing commercial agreements with MadHive. Simultaneously with the commercial agreement renewals, we also amended the terms of ~~$7.0~~our existing available-for-sale convertible debt security as discussed in Note 3. In exchange for the convertible debt modifications, we received favorable terms in our renewed commercial agreements. We estimated the fair value of our available-for-sale security at December 31, 2021 using a market fair value approach based on the cash we expect to receive upon maturity of the note and the estimated cash savings that the favorable contract terms will provide over the term of the commercial agreements. In January 2022, we recorded an intangible contract asset for $20.8 million (equal to the estimated cash savings), and ~~$13.5 million, respectively.~~we will amortize this asset on a straight-line basis over the noncancellable term of the commercial agreements of two years. This non-cash expense is recorded within “Cost of revenues,” within our Consolidated Statement of Income.

1615

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

Company Overview

We are an innovative media company ~~that serves~~serving the greater good of our communities. Across platforms, we tell empowering stories, conduct impactful investigations and deliver innovative marketing services. With 64 television stations and two radio stations in 51 U.S. markets, we are the largest owner of top four network affiliates in the top 25 markets among independent station groups, reaching approximately 39% of U.S. television households. We also own leading multicast networks True Crime Network, Twist and Quest. Each television station also has a robust digital presence across online, mobile, connected television and social platforms, reaching consumers on all devices and platforms they use to consume news content. 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, digital 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) subscription revenues, reflecting fees paid by satellite, cable, OTT (companies that deliver video content to consumers over the Internet) and telecommunications providers to carry our television signals on their systems; 2) advertising & marketing services (AMS) revenues, which include local and national non-political television advertising, digital marketing services (including Premion), and advertising on the stations’ websites, tablet and mobile products and OTT apps; 3) political advertising revenues, which are driven by even year election cycles at the local and national level (e.g. 2022, 2020, ~~2018)~~etc.) and particularly in the second half of those years; and 4) other services, such as production of programming, tower rentals, and ~~advertising material.~~distribution of our local news content.

~~As illustrated~~Merger Agreement

On February 22, 2022, we entered into the Merger Agreement with Parent, Merger Sub, and solely for purposes of certain provisions specified therein, other subsidiaries of Parent, certain affiliates of Standard General and CMG, and certain of its subsidiaries. We currently expect the transaction, which is subject to stockholder and regulatory approvals, and other customary closing conditions, to close in the ~~table below,~~second half of 2022. See Notes 1 and 9 to the condensed consolidated financial statements for further information about the Merger Agreement, the pending Merger and related matters.

We plan to continue to pay our ~~business continues to evolve toward growing recurring~~regular quarterly dividend of $0.095 per share through the closing of the Merger, which is the maximum rate and ~~highly profitable revenue streams, driven~~frequency permitted by the ~~increasing concentration of both political and subscription revenue streams.~~Merger Agreement. As a result of the ~~growing importance of even-year political advertising on~~pending transaction, we suspended share repurchases under our results, management increasingly looks at revenue trends over two-year periods. High margin-subscription and political revenues account for approximately half of our total two-year revenue, a trend that began in 2019, and are expected to comprise an increasingly larger percentage on a rolling two-year cycle thereafter.previously announced share repurchase program.

Two-Year Period Ended June 30,
2021 2020
Advertising & Marketing Services 44 % 48 %
Subscription 46 % } 55% 44 % } 51%
Political 9 % 7 %
Other 1 % 1 %
Total revenues 100 % 100 %

~~COVID-19 Update~~

During fiscal year 2020 and continuing into 2021, the world has been, and continues to be, impacted by the novel coronavirus (COVID-19) pandemic. The COVID-19 pandemic has brought unprecedented challenges and widespread economic and social change throughout the United States. The U.S. economy continued on a path to recovery during the first six months of 2021 with millions of Americans receiving COVID-19 vaccines, states/municipalities increasingly reopening and continued growth in employment. In addition, the U.S. federal government continued to enact policies to provide fiscal stimulus to the economy and relief to those affected by the pandemic, with the most recent stimulus expected to bolster household finances as well as those of small businesses, states and municipalities. Our AMS revenues were most negatively impacted by the pandemic in the second quarter of 2020. Since then, we have continued to experience quarterly sequential improvements on a pro forma basis (reflecting 2019 acquisitions as if they had been completed on January 1, 2019). When compared to second quarter of 2019 (pre COVID-19 pandemic), our AMS revenue was only down less than one percent on a pro forma basis, despite continued impacts of COVID-19 in a few select advertising categories, most notably automotive due to ongoing semiconductor supply chain issues. Excluding the automotive category, AMS revenue was up mid-single digits percent compared to the second quarter of 2019 on a pro forma basis.

The continued roll out of vaccines together with lower COVID-19 case counts in the U.S. are encouraging. However, the impact of COVID-19 and the extent of its adverse impact on our financial and operating results will be dictated by the length of time that the pandemic continues to affect our advertising customers. This will depend on future pandemic-related developments, including the duration of the pandemic; developments concerning the severity of COVID-19 variants; disruptions to our customers’ supply chains and impacts to their advertising and marketing purchasing patterns; the effectiveness, distribution and acceptance of COVID-19 vaccines; consumer confidence; and U.S. government actions to prevent and manage the virus spread, all of which are uncertain and cannot be predicted. While we use the best information available in developing significant estimates included in our financial statements, the effects of the pandemic on our operations may not be fully realized, or

reflected in our financial results, until future periods. As such, actual results could differ from our estimates, and these differences resulting from changes in facts and circumstances could be material.

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

As discussed above, our operating results are subject to significant fluctuations across yearly periods (primarily driven by even-year election cycles). As such, in addition to one year ago comparisons, our management team and Board of Directors also review current period operating results compared to the ~~annual~~same period two years ago (e.g., ~~2021~~2022 vs. ~~2019)~~2020). We believe this comparison will also provide useful information to investors and therefore, we have supplemented our prior year comparison of consolidated results to also include a comparison against the ~~second~~first quarter ~~and six months~~ ended ~~June 30, 2019~~March 31, 2020 results (through operating income).

During 2019, we acquired multiple local television stations and multicast networks. Specifically, we acquired certain stations divested by Gray (January 2, 2019), the Justice (rebranded as True Crime Network) and Quest multicast networks (June 18, 2019), the Dispatch stations (August 8, 2019) and certain stations divested by Nexstar (September 19, 2019). The multicast networks, Dispatch stations, and Nexstar stations are collectively referred to as the “2019 Acquisitions” in the discussion that follows. These 2019 Acquisitions did not contribute to the periods prior to their acquisition in our financial statements which therefore impacts comparisons to 2019 for operating results. The Gray stations do not impact the 2021 to 2019 comparability.

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

Quarter ended June 30, Six months ended June 30,
2021 2020 Change from 2020 2019 Change from 2019 2021 2020 Change from 2020 2019 Change from 2019
Revenues $ 732,908 $ 577,627 27 % $ 536,932 36 % $ 1,459,959 $ 1,261,816 16 % $ 1,053,685 39 %
Operating expenses:
Cost of revenues 397,118 355,367 12 % 285,293 39 % 791,810 724,735 9 % 566,604 40 %
Business units - Selling, general and administrative expenses 96,949 85,008 14 % 73,941 31 % 186,275 177,976 5 % 145,406 28 %
Corporate - General and administrative expenses 23,183 28,312 (18 %) 15,836 46 % 40,053 50,026 (20 %) 30,571 31 %
Depreciation 15,838 16,711 (5 %) 14,533 9 % 31,734 33,611 (6 %) 29,450 8 %
Amortization of intangible assets 15,773 17,248 (9 %) 8,823 79 % 31,533 33,464 (6 %) 17,512 80 %
Spectrum repacking reimbursements and other, net (1,475) (116) *** (4,306) (66 %) (2,898) (7,631) (62 %) (11,319) (74 %)
Total operating expenses $ 547,386 $ 502,530 9 % $ 394,120 39 % $ 1,078,507 $ 1,012,181 7 % $ 778,224 39 %
Total operating income $ 185,522 $ 75,097 *** $ 142,812 30 % $ 381,452 $ 249,635 53 % $ 275,461 38 %
Non-operating expenses (47,682) (48,917) (3 %) (37,978) 26 % (95,166) (116,132) (18 %) (73,874) 29 %
Provision for income taxes 30,986 6,607 *** 24,879 25 % 66,600 27,732 *** 47,653 40 %
Net income 106,854 19,573 *** 79,955 34 % 219,686 105,771 *** 153,934 43 %
Net (income) loss attributable to redeemable noncontrolling interest (227) 374 *** — *** (442) 484 *** — ***
Net income attributable to TEGNA Inc. $ 106,627 $ 19,947 *** $ 79,955 33 % $ 219,244 $ 106,255 *** $ 153,934 42 %
Net income per share - basic $ 0.48 $ 0.09 *** $ 0.37 30 % $ 0.99 $ 0.48 *** $ 0.71 39 %
Net income per share - diluted $ 0.48 $ 0.09 *** $ 0.37 30 % $ 0.99 $ 0.48 *** $ 0.71 39 %
*** Not meaningful


	Quarter ended Mar. 31,
	2022		2021		Change from 2021		2020		Change from 2020

Revenues	$	774,123	$	727,051	6	%	$	684,189	13	%

Operating expenses:
Cost of revenues	411,450		394,692		4	%	369,368		11	%
Business units - Selling, general and administrative expenses	101,969		89,326		14	%	92,968		10	%
Corporate - General and administrative expenses	21,320		16,870		26	%	21,714		(2	%)
Depreciation	15,305		15,896		(4	%)	16,900		(9	%)
Amortization of intangible assets	15,000		15,760		(5	%)	16,216		(7	%)
Spectrum repacking reimbursements and other, net	(58)		(1,423)		(96	%)	(7,515)		(99	%)
Total operating expenses	$	564,986	$	531,121	6	%	$	509,651	11	%

Total operating income	$	209,137	$	195,930	7	%	$	174,538	20	%

Non-operating expenses	(30,112)		(47,484)		(37	%)	(67,215)		(55	%)
Provision for income taxes	44,738		35,614		26	%	21,125		***
Net income	134,287		112,832		19	%	86,198		56	%
Net (income) loss attributable to redeemable noncontrolling interest	(53)		(215)		(75	%)	110		***
Net income attributable to TEGNA Inc.	$	134,234	$	112,617	19	%	$	86,308	56	%

Earnings per share - basic	$	0.60	$	0.51	18	%	$	0.40	50	%
Earnings per share - diluted	$	0.60	$	0.51	18	%	$	0.39	54	%

*** Not meaningful

Revenues

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 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 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, state 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 in the even year of a two year election cycle, particularly in the fourth quarter of those years.

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


		Quarter ended June 30,										Six months ended June 30,											Quarter ended Mar. 31,
		2021		2020		Change from 2020		2019		Change from 2019		2021		2020		Change from 2020		2019		Change from 2019			2022		2021		Change from 2021		2020		Change from 2020

Subscription	Subscription	$	375,081	$	323,475	16	%	$	236,162	59	%	$	761,818	$	656,277	16	%	$	477,737	59	%	Subscription	$	391,654	$	386,737	1	%	$	332,802	18	%
Advertising & Marketing Services	Advertising & Marketing Services	340,889		229,083		49	%	289,569		18	%	663,723		524,236		27	%	553,971		20	%	Advertising & Marketing Services	354,467		322,834		10	%	295,153		20	%
Political	Political	9,581		17,544		(45)	%	3,229		***		19,009		64,931		(71)	%	5,933		***		Political	17,965		9,428		91	%	47,387		(62)	%
Other	Other	7,357		7,525		(2)	%	7,972		(8)	%	15,409		16,372		(6)	%	16,044		(4)	%	Other	10,037		8,052		25	%	8,847		13	%
Total revenues	Total revenues	$	732,908	$	577,627	27	%	$	536,932	36	%	$	1,459,959	$	1,261,816	16	%	$	1,053,685	39	%	Total revenues	$	774,123	$	727,051	6	%	$	684,189	13	%

*** Not meaningful

~~2021~~2022 vs. ~~2020~~2021

Total revenues increased ~~$155.3 million in the second quarter of 2021 and $198.1~~$47.1 million in the first ~~six months~~quarter of ~~2021~~2022 compared to the same ~~periods~~period in ~~2020.~~2021. The ~~net increases were~~increase was primarily due to ~~growth in~~an AMS revenue ~~($111.8~~increase of $31.6 million, ~~second quarter, $139.5 million first six months)~~ reflecting ~~higher~~increased demand for television and digital advertising ~~(as second quarter of 2020 was adversely impacted by sharply reduced demand due~~(due in part to the ~~COVID-19 pandemic)~~Winter Olympics and Super Bowl which aired on NBC in 2022). ~~Also contributing were growth in~~In addition, political revenue increased $8.5 million. Lastly, subscription revenue ~~($51.6~~increased $4.9 million ~~second quarter, $105.5 million first six months)~~ primarily due to annual rate increases under existing and newly renegotiated retransmission agreements, partially offset by declines in ~~subscribers. These increases were partially offset by~~subscribers including the impact of an outage with a ~~decrease in political revenue ($8.0 million second quarter~~broadcast satellite provider that began on October 6, 2021 and ~~$45.9 million first six months), following the 2020 presidential election year.~~ended February 4, 2022.

~~2021~~2022 vs. ~~2019~~2020

Total revenues increased ~~$196.0 million in the second quarter of 2021 and $406.3~~$89.9 million in the first ~~six months~~quarter of ~~2021~~2022 compared to the same ~~periods~~period in 2019. Our 2019 Acquisitions contributed total revenues of $110.5 million and $222.0 million in the second quarter and first six months of 2021, respectively. Excluding the 2019 Acquisitions, total revenues increased $85.5 million and $184.3 million in the second quarter and first six months of 2021, respectively.2020. The ~~increases were~~net increase was primarily due to ~~a rise~~an AMS revenue increase of $59.3 million, reflecting an increased demand for television and digital advertising (due in part to the 2022 Winter Olympics and Super Bowl which aired on NBC in 2022). In addition, subscription ~~revenues ($85.2~~revenue increased $58.9 million, ~~second quarter, $174.6 first six months)~~ primarily due to annual rate increases under existing and newly renegotiated retransmission ~~agreements,~~agreements. These increases were partially offset by ~~declines~~a decrease in ~~subscribers. Also contributing to the increase in the first six months of 2021 was~~ political revenue ~~which grew $11.7 million.~~of $29.4 million, due to 2020 being a presidential election year.

Cost of Revenues

2022 vs. 2021

Cost of revenues increased $16.8 million in the first quarter of 2022 compared to the same period in 2021. The increase was primarily due to a $11.4 million increase in programming costs driven by rate increases under existing affiliation agreements. Higher digital expenses of $1.8 million driven by growth in Premion also contributed to the increase.

2022 vs. 2020

Cost of revenues increased ~~$41.8 million in the second quarter of 2021 and $67.1~~$42.1 million in the first ~~six months~~quarter of ~~2021~~2022 compared to the same ~~periods~~period in 2020. The ~~increases were partially~~increase was primarily due to ~~growth~~a $32.0 million increase in programming costs ~~($20.7 million second quarter, $41.3 million first six months)~~ driven by ~~a rise in rates~~rate increases under existing and newly renegotiated affiliation agreements and growth in subscription revenues (certain programming costs are linked to such revenues). ~~Also contributing to the increases were higher~~Higher digital expenses (~~$12.9~~of $7.7 million ~~second quarter, $18.8 million first six months)~~ driven by growth in ~~Premion.~~

~~2021 vs. 2019~~

~~Cost of revenues increased $111.8 million in the second quarter of 2021 and $225.2 million in the first six months of 2021 compared~~Premion also contributed to the same periods in 2019. Our 2019 Acquisitions added cost of revenues of $58.1 million and $116.8 million in the second quarter and first six months of 2021, respectively. Excluding the 2019 Acquisitions, cost of revenues increased $53.7 million and $108.4 million in the second quarter and first six months of 2021, respectively. The increases were partially due to rising programming costs ($48.3 million second quarter, $93.6 million first six months). Also contributing to the increases were higher~~digital expenses ($1.9 million second quarter, $7.6 million first six months)~~ ~~driven by growth in Premion.~~increase.

Business Units - Selling, General and Administrative Expenses

~~2021~~2022 vs. ~~2020~~2021

Business unit selling, general and administrative expenses (SG&A) increased ~~$11.9 million in the second quarter of 2021 and $8.3~~$12.6 million in the first ~~six months~~quarter of ~~2021~~2022 compared to the same ~~periods~~period in ~~2020.~~2021. The ~~increases were~~increase was primarily due to ~~higher professional fees ($5.6~~a $10.2 million ~~second quarter, $8.1 million first six months). Also contributing was a rise~~increase in ~~marketing~~sales commissions and payroll costs ~~($3.8 million second quarter, $3.3 million first six months). Sales commission also increased (approximately $4.1 million second quarter, $2.3 million first six months)~~ driven by growth in AMS revenues. These increases were partially offset by a reduction in bad debt expense ($4.0 million second quarter, $7.0 million first six months) attributed to improved collection trends as a result of continued recovery in the U.S. economy.revenue.

~~2021~~2022 vs. ~~2019~~2020

Business unit SG&A expenses increased ~~$23.0 million in the second quarter of 2021 and $40.9~~$9.0 million in the first ~~six months~~quarter of ~~2021~~2022 compared to the same ~~periods~~period in 2019. Our 2019 Acquisitions added business unit SG&A expenses of $12.6 million and $25.0 million in the second quarter and first six months of 2021, respectively. Excluding the 2019 Acquisitions, SG&A expenses increased $10.4 million and $15.9 million in the second quarter and first six months of 2021, respectively.2020. The ~~growth~~increase was primarily due to ~~higher professional fees ($5.8 million second quarter,~~a $7.8 million ~~first six months). Also contributing were increases~~increase in ~~stock based compensation ($0.7 million second quarter, $1.9 million first six months)~~sales commissions and payroll costs driven by ~~higher stock price. These increases were partially offset by reductions~~growth in ~~bad debt expense ($1.0 million second quarter, $2.0 million first six months).~~AMS revenue.

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, and Finance, as well as activities and costs not directly attributable to the operations of our media business.

2022 vs. 2021

Corporate general and administrative expenses increased $4.5 million in the first quarter of 2022 compared to the same period in 2021. The increase was primarily driven by a $10.2 million increase in M&A-related costs. Partially offsetting this was the absence in 2022 of $4.6 million of advisory fees related to activism defense incurred in the first quarter of 2021.

2022 vs. 2020

Corporate general and administrative expenses decreased ~~$5.1 million in the second quarter of 2021 and $10.0~~$0.4 million in the first ~~six months~~quarter of ~~2021~~2022 compared to the same ~~periods~~period in 2020. The decrease was primarily driven by ~~a decline~~the absence in 2022 of $7.6 million of advisory fees related to activism defense ~~($3.4 million second quarter, $6.5 million first six months). Also contributing to the decrease in the first six months of 2021 was the absence of~~costs and $4.6 million of M&A due diligence costs. ~~Decreases in the first six months of 2021 were partially offset by an~~Partially offsetting these decreases was a $10.2 million increase ~~in stock based compensation of $1.9 million (driven by higher stock price).~~

~~2021 vs. 2019~~

Corporate general and administrative expenses increased $7.3 million in the second quarter of 2021 and $9.5 million in the first six months of 2021 compared to the same periods in 2019. The increases were primarily due to ~~advisory fees related~~M&A-related costs and the remaining $1.6 million increase is primarily attributed to ~~activism defense ($12.0 million second quarter, $16.6 million first six months). Also contributing to the increase in the first six months of 2021 was a rise in stock based~~higher stock-based compensation of $1.2 million. These increases were partially offset by the absence of acquisition-related costs, principally advisory fees, ($5.2 million second quarter, $9.1 million first six months) due to the reduction in acquisition activity in 2021.expense.

Depreciation Expense

2022 vs. 2021

Depreciation expense decreased by $0.6 million in the first quarter of 2022 compared to the same period in 2021. The decrease was due to certain assets reaching the end of their assumed useful lives.

2022 vs. 2020

Depreciation expense decreased by ~~$0.9 million in the second quarter of 2021 and $1.9~~$1.6 million in the first ~~six months~~quarter of ~~2021~~2022 compared to the same ~~periods~~period in 2020. The ~~decreases were due to a decline in capital expenditures following the onset of COVID-19, resulting in less depreciation in 2021.~~

~~2021 vs. 2019~~

Depreciation expense increased by $1.3 million in the second quarter of 2021 and $2.3 million in the first six months of 2021 compared to the same periods in 2019. Our 2019 Acquisitions added depreciation expense of $2.8 million and $5.8 million in the second quarter and first six months of 2021, respectively. Excluding the impact of the 2019 Acquisitions, depreciation expense decreased $1.5 million and $3.5 million in the second quarter and first six months of 2021, respectively, primarilydecrease was due to certain assets reaching the end of their assumed useful lives.

Amortization Expense

~~2021~~2022 vs. ~~2020~~2021

Amortization expense decreased ~~$1.5 million in the second quarter of 2021 and $1.9~~$0.8 million in the first ~~six months~~quarter of ~~2021~~2022 compared to the same periods in ~~2020.~~2021. The ~~decreases were~~decrease was due to certain assets reaching the end of their assumed useful lives and therefore becoming fully amortized.

~~2021~~2022 vs. ~~2019~~2020

Amortization expense ~~increased $7.0 million in the second quarter of 2021 and $14.0~~decreased $1.2 million in the first ~~six months~~quarter of ~~2021~~2022 compared to the same periods in 2019. Our 2019 Acquisitions added amortization expense of $9.7 million and $19.5 million in the second quarter and first six months of 2021, respectively. Excluding the impact of the 2019 Acquisitions, amortization expense decreased $2.7 million and $5.5 million in the second quarter and first six months of 2021, respectively,2020. The decrease was due to certain assets reaching the end of their assumed useful ~~lives.~~lives and therefore becoming fully amortized.

Spectrum Repacking Reimbursements and Other, net

2022 vs. 2021

Spectrum repacking reimbursements and other net gains were $0.1 million in the first quarter of 2022 compared to net gains of $1.4 million in the same period in 2021. The 2022 activity is related to $0.1 million of reimbursements received from the Federal Communications Commission (FCC) for required spectrum repacking, compared to $1.4 million of reimbursements received in the first quarter of 2021.

2022 vs. 2020

Spectrum repacking reimbursements and other net gains were ~~$1.5 million in the second quarter of 2021 compared to net gains of~~ $0.1 million in the ~~same period in 2020 and net gains~~first quarter of ~~$2.9 million in the first six months of 2021~~2022 compared to ~~$7.6~~$7.5 million in the same period in 2020. The ~~2021~~2022 activity ~~is related to reimbursements received from~~consists of the Federal Communications Commission (FCC) for required spectrum repacking ($3.0 million second quarter, $4.4 million first six months), partially offset a $1.5 million contract termination fee which impacted both periods.item discussed above. The 2020 activity ~~primarily consists~~reflects $7.5 million of reimbursements received from the FCC for required spectrum repacking ($2.3 million second quarter, $9.8 million first six months), partially offset by $2.1 million impairment charge due to the retirement of a brand name which impacted both periods.FCC.

~~2021 vs. 2019~~

Spectrum repacking reimbursements and other net gains were $1.5 million in the second quarter of 2021 compared to net gains of $4.3 million in the same period in 2019 and $2.9 million in the first six months of 2021 compared to $11.3 million in the same period in 2019. The 2021 activity consists of the items discussed above. The 2019 activity reflects gains due to reimbursements received from the FCC ($4.3 million second quarter, $8.4 million first six months). The first six months of 2019 also included a gain of $2.9 million as a result of the sale of real estate.

Operating Income

~~2021~~2022 vs. ~~2020~~2021

~~Our operating~~Operating income increased ~~$110.4 million in the second quarter of 2021 and $131.8~~$13.2 million in the first ~~six months~~quarter of ~~2021~~2022 compared to the same ~~periods~~period in ~~2020.~~2021. The ~~increases were~~increase was driven by the changes in revenue and expenses discussed above, most notably the ~~growth~~increase in AMS revenue and ~~subscription revenues.~~programming expense.

~~2021~~2022 vs. ~~2019~~2020

~~Our operating~~Operating income increased ~~$42.7 million in the second quarter of 2021 and $106.0~~$34.6 million in the first ~~six months~~quarter of ~~2021~~2022 compared to the same periods in 2019. Results from our 2019 Acquisitions added operating income of $27.2 million in the first quarter of 2021 and $54.9 million in the first six months of 2021. Excluding the 2019 Acquisitions, operating income increased $15.5 million and $51.1 million in the second quarter and first six months of 2021, respectively,2020. The increase was driven by the changes in revenue and expenses discussed ~~above.~~above, most notably the increase in AMS and subscription revenues and programming expense.

Non-Operating Expenses

Non-operating expenses decreased ~~$1.2~~$17.4 million in the ~~second~~first quarter of ~~2021~~2022 compared to the same period in ~~2020.~~2021. This decrease was primarily due to ana $20.8 million gain recognized on our available for sale investment in MadHive (see Note 3 to the condensed consolidated financial statements). Additionally, interest expense ~~decline of $5.3~~decreased by $2.9 million driven by a lower average outstanding debt partially offset by higher average interest ~~rate~~.rate. Total average outstanding debt was ~~$3.51~~$3.19 billion forfor the ~~second~~first quarter of ~~2021,~~ 2022, compared to ~~$4.15~~$3.50 billion in the same period of ~~2020.~~2021. The weighted average interest rate on ~~total~~ outstanding debt was ~~5.07%~~ 5.18% for the ~~second~~first quarter of ~~2021,~~2022, compared to ~~4.84%~~5.08% in the same period of ~~2020. This~~2021. Partially offsetting these decreases was p~~artially offset by~~a $2.5 million increase ~~in equity losses of $4.6 million from our CareerBuilder investment, primarily~~ due to ~~the absence of a 2020 gain due to the sale of its employment screening business resulting in our share of a pre-tax gain of $6.5 million recorded by us in the second quarter of 2020.~~

In the first six months of 2021, non-operating expenses decreased $21.0 million compared to the same period in 2020. This decrease was partially due to the absence of a $13.8 million call premium related to the repayment of our 2023 Senior Notes and an acceleration of $7.9 million of previously deferred financing fees associated with the 2023 and 2020 Senior notes in the first quarter of 2020 due to their early repayments. Further, interest expense decreased $15.7 million driven by lower average outstanding debt. The average debt outstanding was $3.50 billion for the first six months of 2021, compared to $4.17 billion in the same period of 2020. Partially offsetting the decrease in non-operating expenses, was a decline in equity earnings of $15.0 million from our CareerBuilder investment (which sold its employment screening business in 2020 resulting in our share of a pre-tax gain of $18.6 million).impairment charge recognized on an investment.

Income Tax Expense

Income tax expense increased ~~$24.4~~$9.1 million in the ~~second~~first quarter of ~~2021~~2022 compared to the same period in ~~2020. Income tax expense increased $38.9 million in the first six months of 2021 compared to the same period in 2020.~~2021. The ~~increases were~~increase was primarily due to ~~higher~~increases in net income before tax. Our effective income tax rate was 22.5% for the second quarter of 2021, compared to 24.9% for the second quarter of 2020. The tax rate for the second quarter of 2021 is lower than the comparable rate in 2020 primarily due to net deferred tax benefits as a result of state tax planning strategies. Our effective income tax rate was 23.3%25.0% for the first ~~six months~~quarter of ~~2021,~~2022, compared to ~~20.7%~~24.0% for the ~~same period in 2020.~~first quarter of 2021. The tax rate for the first ~~six months~~quarter of ~~2021~~2022 is higher than the comparable ~~amount~~rate in ~~2020~~2021 primarily due to ~~2020~~a valuation allowance recorded on a minority investment and nondeductible M&A-related transaction costs incurred. Partially offsetting the increase were tax benefits from the utilization of capital loss carryforwards in connection with ~~certain disposition transactions~~a gain on an available-for-sale investment and the release of the associated valuation allowance.

Net Income attributable to TEGNA Inc.

Net income attributable to TEGNA Inc. was ~~$106.6~~$134.2 million, or ~~$0.48~~$0.60 per diluted share, in the ~~second~~first quarter of ~~2021~~2022 compared to ~~$19.9~~$112.6 million, or ~~$0.09~~$0.51 per diluted share, during the same period in 2020. For the first six months of 2021, net income attributable to TEGNA Inc. was $219.2 million, or $0.99 per diluted share, compared to $106.3 million, or $0.48 per diluted share, for the same period in 2020.2021. Both income and earnings per share were affected by the factors discussed above, most notably, an increase of AMS revenue due to increased advertising demand as a result of improving economic conditions and an increase in subscription revenue from annual rate increases under existing and newly renegotiated retransmission agreements.above.

The weighted average number of diluted common shares outstanding in the ~~second~~first quarter of 2022 and 2021 ~~and 2020~~ were ~~222.5~~223.2 million and ~~219.4 million, respectively. The weighted average number of diluted shares outstanding in the first six months of 2021 and 2020 was 221.9 million and 219.1~~221.2 million, respectively.

2220

Results from Operations - Non-GAAP Information

Presentation of Non-GAAP information

We use non-GAAP financial performance 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 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 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” which are described in detail below in the section titled “Discussion of Special Charges Affecting Reported Results.” 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~~income attributable to redeemable noncontrolling interest, (2) income taxes, (3) interest expense, (4) equity ~~(loss) income~~loss in unconsolidated investments, net, (5) other non-operating items, net, (6) M~~&A due diligence~~&A-related costs, (7) advisory fees related to activism defense, (8) spectrum repacking reimbursements and other, net, (9) depreciation and (10) 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 and equipment (and related depreciation expense). The most directly comparable GAAP financial measure to Adjusted EBITDA is Net 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 discuss free cash flow, a non-GAAP performance measure that the Board of Directors uses to review the performance of the business. Free cash flow is reviewed by the Board of Directors as a percentage of revenue over a trailing two-year period (reflecting both an even and odd year reporting period given the political cyclicality of our business). The most directly comparable GAAP financial measure to free cash flow is Net income attributable to TEGNA. Free cash flow is 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, (4) dividends received from equity method investments and (5) reimbursements from spectrum repacking. This is further adjusted by deducting payments made for (1) syndicated programming, (2) pension, (3) interest, (4) taxes (net of 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.

2321

Discussion of Special Charges Affecting Reported Results

Our results included the following items we consider “special items” that, while at times recurring, can vary significantly from period to period:

Quarter March 31, 2022:

•Spectrum repacking reimbursements and ~~six months ended June 30,~~other, net consisting of gains due to reimbursements from the FCC for required spectrum repacking;

•M&A-related costs;

•Other non-operating items consisting of a gain recognized on an available-for-sale investment and an impairment charge related to another investment; and

•Tax expense associated with establishing a valuation allowance on a deferred tax asset related to an equity method investment.

Quarter March 31, 2021:

•Spectrum repacking reimbursements and other, net consisting of gains due to reimbursements from the FCC for required spectrum ~~repacking~~repacking; and ~~a contract termination fee;~~

•Advisory fees related to activism ~~defense; and~~

•~~Net deferred tax benefits as a result of state tax planning strategies implemented during the second quarter of 2021.~~

~~Quarter and six months ended June 30, 2020:~~

•Spectrum repacking reimbursements and other, net consists of gains due to reimbursements from the FCC for required spectrum repacking, partially offset by an intangible asset impairment charge due to the retirement of a brand name;

•~~Advisory fees related to activism defense;~~

•~~M&A due diligence costs we incurred to assist prospective buyers of our company with their due diligence;~~

•~~A gain recognized in our equity income in unconsolidated investments, related to our share of CareerBuilder’s gain on the sale of its employment screening business;~~

•~~Other non-operating items primarily related to costs incurred in connection with the early extinguishment of debt; and~~

•~~Deferred tax benefits related to partial capital loss valuation allowance release.~~defense.

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 Mar. 31, 2022	GAAP measure		M&A-related costs		Spectrum repacking reimbursements and other		Other non-operating items		Special tax item		Non-GAAP measure



Corporate - General and administrative expenses	$	21,320	$	(10,234)	$	—	$	—	$	—	$	11,086
Spectrum repacking reimbursements and other, net	(58)		—		58		—		—		—
Operating expenses	564,986		(10,234)		58		—		—		554,810
Operating income	209,137		10,234		(58)		—		—		219,313

Other non-operating items, net	17,319		—		—		(18,308)		—		(989)
Total non-operating expenses	(30,112)		—		—		(18,308)		—		(48,420)
Income before income taxes	179,025		10,234		(58)		(18,308)		—		170,893
Provision for income taxes	44,738		31		(14)		168		(7,117)		37,806
Net income attributable to TEGNA Inc.	134,234		10,203		(44)		(18,476)		7,117		133,034
Earnings per share - diluted (a)	$	0.60	$	0.05	$	—	$	(0.08)	$	0.03	$	0.59

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

			Special Items
Quarter ended Mar. 31, 2021	GAAP measure		Advisory fees related to activism defense		Spectrum repacking reimbursements and other		Non-GAAP measure



Corporate - General and administrative expenses	$	16,870	$	(4,599)	$	—	$	12,271
Spectrum repacking reimbursements and other, net	(1,423)		—		1,423		—
Operating expenses	531,121		(4,599)		1,423		527,945
Operating income	195,930		4,599		(1,423)		199,106



Income before income taxes	148,446		4,599		(1,423)		151,622
Provision for income taxes	35,614		1,180		(367)		36,427
Net income attributable to TEGNA Inc.	112,617		3,419		(1,056)		114,980
Earnings per share - diluted	$	0.51	$	0.02	$	(0.01)	$	0.52

Adjusted EBITDA - Non-GAAP

Reconciliations of Adjusted EBITDA to net income presented in accordance with GAAP on our Consolidated Statements of Income are presented below (in thousands):


	Quarter ended Mar. 31,
	2022		2021		Change

Net income attributable to TEGNA Inc. (GAAP basis)	$	134,234	$	112,617	19	%
Plus: Net income attributable to redeemable noncontrolling interest	53		215		(75	%)
Plus: Provision for income taxes	44,738		35,614		26	%
Plus: Interest expense	43,620		46,485		(6	%)
Plus: Equity loss in unconsolidated investments, net	3,811		1,329		***
(Less): Other non-operating items, net	(17,319)		(330)		***
Operating income (GAAP basis)	209,137		195,930		7	%

Plus: M&A-related costs	10,234		—		***
Plus: Advisory fees related to activism defense	—		4,599		***
Less: Spectrum repacking reimbursements and other, net	(58)		(1,423)		(96	%)
Adjusted operating income (non-GAAP basis)	219,313		199,106		10	%
Plus: Depreciation	15,305		15,896		(4	%)
Plus: Amortization of intangible assets	15,000		15,760		(5	%)
Adjusted EBITDA (non-GAAP basis)	249,618		230,762		8	%
Corporate - General and administrative expense (non-GAAP basis)	11,086		12,271		(10	%)
Adjusted EBITDA, excluding Corporate (non-GAAP basis)	$	260,704	$	243,033	7	%

*** Not meaningful

In the first quarter of 2022 Adjusted EBITDA margin was 34% without corporate expense or 32% with corporate expense, compared to first quarter of 2021 Adjusted EBITDA margin of 33% without corporate expense or 32% with corporate expense. The $17.7 million increase in Adjusted EBITDA was primarily driven by the operational factors discussed above within the revenue and operating expense fluctuation explanation sections, most notably the increase in AMS revenue.

Special Items
Quarter ended June 30, 2021 GAAP
measure Advisory fees related to activism defense Spectrum repacking reimbursements and other Special tax items Non-GAAP measure
Corporate - General and administrative expenses $ 23,183 $ (12,012) $ — $ — $ 11,171
Spectrum repacking reimbursements and other, net (1,475) — 1,475 — —
Operating expenses 547,386 (12,012) 1,475 — 536,849
Operating income 185,522 12,012 (1,475) — 196,059
Income before income taxes 137,840 12,012 (1,475) — 148,377
Provision for income taxes 30,986 3,111 (374) 2,797 36,520
Net income attributable to TEGNA Inc. 106,627 8,901 (1,101) (2,797) 111,630
Net income per share-diluted (a)
$ 0.48 $ 0.04 $ — $ (0.01) $ 0.50
(a) Per share amounts do not sum due to rounding.
Special Items
Quarter ended June 30, 2020 GAAP
measure Advisory fees related to activism defense Spectrum repacking reimbursements and other Gain on equity method investment Non-GAAP measure
Corporate - General and administrative expenses $ 28,312 $ (15,448) $ — $ — $ 12,864
Spectrum repacking reimbursements and other, net (116) — 116 — —
Operating expenses 502,530 (15,448) 116 — 487,198
Operating income 75,097 15,448 (116) — 90,429
Equity income (loss) in unconsolidated investments, net 1,921 — — (6,514) (4,593)
Total non-operating expenses (48,917) — — (6,514) (55,431)
Income before income taxes 26,180 15,448 (116) (6,514) 34,998
Provision for income taxes 6,607 3,882 (27) (1,637) 8,825
Net income attributable to TEGNA Inc. 19,947 11,566 (89) (4,877) 26,547
Net income per share-diluted $ 0.09 $ 0.05 $ — $ (0.02) $ 0.12

Special Items
Six months ended June 30, 2021 GAAP
measure Advisory fees related to activism defense Spectrum repacking reimbursements and other Special tax items Non-GAAP measure
Corporate - General and administrative expenses $ 40,053 $ (16,611) $ — $ — $ 23,442
Spectrum repacking reimbursements and other, net (2,898) — 2,898 — —
Operating expenses 1,078,507 (16,611) 2,898 — 1,064,794
Operating income 381,452 16,611 (2,898) — 395,165
Equity income (loss) in unconsolidated investments, net (3,926) — — — (3,926)
Other non-operating items, net 1,854 — — — 1,854
Total non-operating expenses (95,166) — — — (95,166)
Income before income taxes 286,286 16,611 (2,898) — 299,999
Provision for income taxes 66,600 4,291 (741) 2,797 72,947
Net income attributable to TEGNA Inc. 219,244 12,320 (2,157) (2,797) 226,610
Net income per share-diluted (a)
$ 0.99 $ 0.06 $ (0.01) $ (0.01) $ 1.02
(a) Per share amounts do not sum due to rounding
Special Items
Six months ended June 30, 2020 GAAP
measure M&A due diligence costs Advisory fees related to activism defense Spectrum repacking reimbursements and other Gains on equity method investment Other non-operating items Special tax benefits Non-GAAP measure
Corporate - General and administrative expenses $ 50,026 $ (4,588) $ (23,087) $ — $ — $ — $ — $ 22,351
Spectrum repacking reimbursements and other, net (7,631) — — 7,631 — — — —
Operating expenses 1,012,181 (4,588) (23,087) 7,631 — — — 992,137
Operating income 249,635 4,588 23,087 (7,631) — — — 269,679
Equity income (loss) in unconsolidated investments, net 10,936 — — — (18,585) — — (7,649)
Other non-operating items, net (18,231) — — — — 21,744 — 3,513
Total non-operating expenses (116,132) — — — (18,585) 21,744 — (112,973)
Income before income taxes 133,503 4,588 23,087 (7,631) (18,585) 21,744 — 156,706
Provision for income taxes 27,732 1,151 5,801 (2,017) (4,670) 5,463 3,944 37,404
Net income attributable to TEGNA Inc. 106,255 3,437 17,286 (5,614) (13,915) 16,281 (3,944) 119,786
Net income per share-diluted $ 0.48 $ 0.02 $ 0.08 $ (0.03) $ (0.06) $ 0.07 $ (0.02) $ 0.54

~~Adjusted EBITDA - Non-GAAP~~

~~Reconciliations of Adjusted EBITDA to net income presented in accordance with GAAP on our Consolidated Statements of Income are presented below (in thousands):~~

Quarter ended June 30, Six months ended June 30,
2021 2020 Change 2021 2020 Change
Net income attributable to TEGNA Inc. (GAAP basis) $ 106,627 $ 19,947 *** $ 219,244 $ 106,255 ***
Plus (Less): Net income (loss) attributable to redeemable noncontrolling interest 227 (374) *** 442 (484) ***
Plus: Provision for income taxes 30,986 6,607 *** 66,600 27,732 ***
Plus: Interest expense 46,609 51,877 (10 %) 93,094 108,837 (14 %)
Plus (Less): Equity loss (income) in unconsolidated investments, net 2,597 (1,921) *** 3,926 (10,936) ***
(Less) Plus: Other non-operating items, net (1,524) (1,039) 47 % (1,854) 18,231 ***
Operating income (GAAP basis) 185,522 75,097 *** 381,452 249,635 53 %
Plus: M&A due diligence and acquisition-related costs — — *** — 4,588 ***
Plus: Advisory fees related to activism defense 12,012 15,448 (22 %) 16,611 23,087 (28 %)
Less: Spectrum repacking reimbursements and other, net (1,475) (116) *** (2,898) (7,631) (62 %)
Adjusted operating income (non-GAAP basis) 196,059 90,429 *** 395,165 269,679 47 %
Plus: Depreciation 15,838 16,711 (5 %) 31,734 33,611 (6 %)
Plus: Amortization of intangible assets 15,773 17,248 (9 %) 31,533 33,464 (6 %)
Adjusted EBITDA (non-GAAP basis) 227,670 124,388 83 % 458,432 336,754 36 %
Corporate - General and administrative expense (non-GAAP basis) 11,171 12,864 (13 %) 23,442 22,351 5 %
Adjusted EBITDA, excluding Corporate (non-GAAP basis) $ 238,841 $ 137,252 74 % $ 481,874 $ 359,105 34 %
*** Not meaningful

In the second quarter of 2021 Adjusted EBITDA margin was 33% without corporate expense or 31% with corporate expense, compared to second quarter of 2020 Adjusted EBITDA margin of 24% without corporate expense or 22% with corporate expense. For the six months ended June 30, 2021, Adjusted EBITDA margin was 33% without corporate expense or 31% with corporate expense, compared to six months ended June 30, 2020 Adjusted EBITDA of 28% without corporate expense or 27% with corporate expense. These margin increases were primarily driven by the operational factors discussed above within the revenue and operating expense fluctuation explanation sections, most notably, the increase in AMS revenue due to the overall increase in economic activity and subscription revenue from annual rate increases under existing and newly renegotiated retransmission agreements.

2723

Free Cash Flow Reconciliation

~~Our free cash flow, a non-GAAP performance measure, was $1.21 billion for the two-year period ended June 30, 2021.~~

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


						Two-year period ended Mar. 31,
		Two-year period ended June 30, 2021				2022			2021

Net income attributable to TEGNA Inc. (GAAP basis)	Net income attributable to TEGNA Inc. (GAAP basis)	$	834,323		Net income attributable to TEGNA Inc. (GAAP basis)	$	1,007,659		$	807,651
Plus: Provision for income taxes	Plus: Provision for income taxes	262,662			Plus: Provision for income taxes	313,387			256,555
Plus: Interest expense	Plus: Interest expense	416,146			Plus: Interest expense	382,604			415,864
Plus: M&A due diligence and acquisition-related costs		26,225
Plus: M&A-related costs					Plus: M&A-related costs	13,972			31,433
Plus: Depreciation	Plus: Depreciation	129,689			Plus: Depreciation	130,126			128,384
Plus: Amortization	Plus: Amortization	131,815			Plus: Amortization	129,485			124,865
Plus: Stock-based compensation	Plus: Stock-based compensation	47,182			Plus: Stock-based compensation	63,073			44,780
Plus: Company stock 401(k) contribution	Plus: Company stock 401(k) contribution	32,167			Plus: Company stock 401(k) contribution	33,811			31,331
Plus: Syndicated programming amortization	Plus: Syndicated programming amortization	139,793			Plus: Syndicated programming amortization	141,999			135,349
Plus: Workforce restructuring expense	Plus: Workforce restructuring expense	5,933			Plus: Workforce restructuring expense	1,021			7,385
Plus: Advisory fees related to activism defense	Plus: Advisory fees related to activism defense	45,778			Plus: Advisory fees related to activism defense	32,059			33,766
Plus: Cash dividend from equity investments for return on capital	Plus: Cash dividend from equity investments for return on capital	9,093			Plus: Cash dividend from equity investments for return on capital	11,598			9,055
Plus: Cash reimbursements from spectrum repacking	Plus: Cash reimbursements from spectrum repacking	26,153			Plus: Cash reimbursements from spectrum repacking	10,665			27,443
Plus: Other non-operating items, net		27,640

Plus: Net income attributable to redeemable noncontrolling interest	Plus: Net income attributable to redeemable noncontrolling interest	427			Plus: Net income attributable to redeemable noncontrolling interest	1,390			200
Plus: Reimbursement from Company-owned life insurance policies					Plus: Reimbursement from Company-owned life insurance policies	1,005			—
Plus (Less): Equity loss (income) in unconsolidated investments, net					Plus (Less): Equity loss (income) in unconsolidated investments, net	12,142			(7,189)
Less: Spectrum repacking reimbursements and other, net					Less: Spectrum repacking reimbursements and other, net	(4,805)			(9,700)
(Less) Plus: Other non-operating items, net					(Less) Plus: Other non-operating items, net	(9,385)			20,200
Less: Syndicated programming payments					Less: Syndicated programming payments	(150,211)			(135,148)
Less: Income tax payments, net of refunds	Less: Income tax payments, net of refunds	(230,749)			Less: Income tax payments, net of refunds	(263,012)			(169,298)
Less: Equity income in unconsolidated investments, net		(5,207)
Less: Spectrum repacking reimbursements and other, net		(6,869)
Less: Syndicated programming payments		(145,058)
Less: Pension contributions	Less: Pension contributions	(24,158)			Less: Pension contributions	(10,121)			(28,227)
Less: Interest payments	Less: Interest payments	(391,913)			Less: Interest payments	(389,392)			(435,485)
Less: Purchases of property and equipment	Less: Purchases of property and equipment	(123,792)			Less: Purchases of property and equipment	(100,849)			(122,230)
Free cash flow (non-GAAP basis)	Free cash flow (non-GAAP basis)	$	1,207,280		Free cash flow (non-GAAP basis)	$	1,358,221		$	1,166,984

Revenue	Revenue	$	5,643,551		Revenue	$	6,018,807		$	5,447,575
Free cash flow as a % of Revenue	Free cash flow as a % of Revenue	21.4		%	Free cash flow as a % of Revenue	22.6		%	21.4		%

Our free cash flow, a non-GAAP performance measure, was $1.36 billion and $1.17 billion for the two-year periods ended March 31, 2022 and 2021, respectively. The increase in free cash flow is primarily due to increases in subscription and political revenues.

2824

Liquidity, Capital Resources and Cash Flows

Our operations have historically generated ~~strong~~ positive cash flow which, along with availability under our existing revolving credit facility and cash and cash equivalents on hand, 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 had far-reaching impacts on many aspects~~We paid dividends totaling $21.2 million in first quarter of 2022 and $15.4 million in first quarter of 2021. We expect to continue to pay our ~~operations, directly and indirectly, including our employees, consumer behavior, distribution~~regular quarterly dividend of ~~our content, our vendors, and~~$0.095 per share through the ~~overall market. The full impact~~closing of the ~~COVID-19 pandemic, particularly with regard to~~Merger, which is the ~~broader advertising industry, remains uncertain~~maximum rate and continues to evolve. However, during the first six months of 2021, the U.S. economy continued on a path towards recovery with millions of Americans receiving COVID-19 vaccines, states and municipalities increasingly reopening and continued growth in employment, although the reported impact from the Delta variant of the virus leaves room for further concern. In addition, the U.S. federal government continued to enact policies to provide fiscal stimulus to the economy and relief to those affectedfrequency permitted by the ~~pandemic, with the most recent stimulus expected to bolster household finances as well as those of small businesses, states and municipalities.~~Merger Agreement.

The improving conditions around the pandemic over the last 12 months, coupled with strategic actions we’ve taken with our 2020 and 2019 debt refinancings and reduction of discretionary spending, have helped strengthened our financial position. On March 29, 2021, we announced that our Board of Directors approved a dividend increase of ten cents per share on an annual basis, to $0.38 per common share (approximately 2.0% dividend yield as of June 30, 2021), which represents an approximately 36% increase above the prior dividend. The increase of the dividend demonstrates the Board’s and management’s confidence in our business and continued focus on making prudent, disciplined decisions intended to drive near and long-term shareholder value. Our capital allocation decisions focus on optimizing investments in organic and inorganic growth opportunities, paying down debt, issuing dividends, and repurchasing shares.

As of ~~June 30, 2021,~~March 31, 2022, we were in compliance with all covenants contained in our debt agreements and credit facility and our leverage ratio, calculated in accordance with our revolving credit agreement, ~~and term loan agreements, was 3.62x, well~~ was 2.97x, 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. We believe that we will remain compliant with all covenants for the foreseeable future.

As of ~~June 30, 2021~~March 31, 2022, our total debt was ~~$3.46~~$3.07 billion, cash and cash equivalents totaled ~~$57.3~~$43.3 million, and we had unused borrowing capacity of $1.49~~$1.23~~ billion under our revolving credit facility. ~~Approximately $3.23 billion, or 93%, of our~~Our debt ~~has a~~consists of unsecured notes which have fixed interest ~~rate.~~rates.

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 our ~~2020~~2021 Annual Report on Form 10-K for further discussion. We expect our existing cash and cash equivalents, cash flow from our operations, and borrowing capacity under the revolving credit facility will be more than sufficient to satisfy our recurring contractual commitments, debt service obligations, capital expenditure requirements, and other working capital needs for the 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):


		Six months ended June 30,
		2021		2020
							Three months ended Mar. 31,
							2022		2021

Balance of cash and cash equivalents beginning of the period	Balance of cash and cash equivalents beginning of the period	$	40,968	$	29,404	Balance of cash and cash equivalents beginning of the period	$	56,989	$	40,968

Operating activities:	Operating activities:					Operating activities:
Net income	Net income	219,686		105,771		Net income	134,287		112,832
Depreciation, amortization and other non-cash adjustments	Depreciation, amortization and other non-cash adjustments	92,749		72,273		Depreciation, amortization and other non-cash adjustments	31,641		47,050
Pension contributions, net of income	Pension contributions, net of income	(8,781)		(5,885)		Pension contributions, net of income	(585)		(4,410)
(Increase) decrease in trade receivables		(37,207)		91,246
(Decrease) increase in interest and taxes payable		(52,483)		32,056
Increase in trade receivables						Increase in trade receivables	(120)		(63,120)
Increase in interest and taxes payable						Increase in interest and taxes payable	13,663		4,320
Other, net	Other, net	(17,471)		18,081		Other, net	17,374		(38,601)
Cash flow from operating activities	Cash flow from operating activities	196,493		313,542		Cash flow from operating activities	196,260		58,071

Investing activities:	Investing activities:					Investing activities:
Payments for acquisitions of businesses and other assets, net of cash acquired	Payments for acquisitions of businesses and other assets, net of cash acquired	(13,341)		(15,841)		Payments for acquisitions of businesses and other assets, net of cash acquired	—		(13,341)
All other investing activities	All other investing activities	(20,911)		(5,216)		All other investing activities	(7,330)		(9,890)
Cash flow used for investing activities	Cash flow used for investing activities	(34,252)		(21,057)		Cash flow used for investing activities	(7,330)		(23,231)

Cash flow used for financing activities	Cash flow used for financing activities	(145,947)		(148,819)		Cash flow used for financing activities	(202,603)		(62,955)
(Decrease) increase in cash and cash equivalents		16,294		143,666
Decrease in cash and cash equivalents						Decrease in cash and cash equivalents	(13,673)		(28,115)
Balance of cash and cash equivalents end of the period	Balance of cash and cash equivalents end of the period	$	57,262	$	173,070	Balance of cash and cash equivalents end of the period	$	43,316	$	12,853

Operating Activities - Cash flow from operating activities was ~~$196.5~~$196.3 million for the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, compared to ~~$313.5~~$58.1 million for the same period in ~~2020.~~2021. Driving the ~~decrease was an~~ increase in tax payments of $117.1 million in the six months ended June 30, 2021 compared to the same period in 2020, as tax payments originally due in the second quarter of 2020 were impacted by guidance from U.S. Department of the Treasury and the Internal Revenue Service that allowed the deferral of federal income tax payments to July 15, 2020 and would have otherwise been paid in the second quarter of 2020. In addition, the decline in operating cash flow was ~~also impacted by~~ a ~~decrease~~favorable change in accounts receivable of ~~$45.9~~$63.0 million, primarily due to timing of cash payments related to subscription revenue. Also contributing to the increase was a favorable change in accounts payable of $29.1 million in ~~political revenue (which are paid upfront and provide immediate benefit~~the first quarter of 2022 as compared to ~~operating cash flow). Partially offsetting these decreases were increases in operating cash flows associated~~the first quarter of 2021, due to timing of payments with ~~higher AMS and subscription revenues.~~our network affiliates.

Investing Activities - Cash flow used for investing activities was ~~$34.3~~$7.3 million for the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, compared to ~~$21.1~~$23.2 million for the same period in ~~2020.~~2021. The ~~increase~~decrease of $15.9 million was ~~primarily~~primary due to ~~a $5.3~~$13.3 million ~~decline~~being spent on an acquisition in ~~spectrum repack reimbursements.~~2021 and an absence of acquisitions in 2022. Also contributing to the ~~decline~~decrease was a ~~$4.7 million~~ decrease in ~~proceeds from the sale~~capital expenditures of ~~assets and business.~~$7.6 million.

Financing Activities - Cash flow used for financing activities was ~~$145.9~~$202.6 million for the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, compared to ~~$148.8~~$63.0 million for the same period in ~~2020.~~2021. The change was primarily due to ~~debt activity in 2020. Specifically, in January 2020 we issued $1.0 billion~~our revolving credit facility which had net repayments 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 $29.9$166.0 million in the first ~~six~~three months of ~~2020 related to these actions. Additionally, we paid down $99.0 million on our revolving credit facility in the first six months of 2021~~2022 as compared to ~~$68.0~~net repayments of $37.0 million in the first ~~six~~three months of ~~2020.~~2021.

Certain Factors Affecting Forward-Looking Statements

Certain statements in this Quarterly Report on Form 10-Q ~~contain~~that do not describe historical facts may constitute forward-looking statements ~~regarding business strategies, market potential,~~within the meaning of the “safe harbor” provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are based on a number of assumptions about future ~~financial performance~~events and are subject to various risks, uncertainties and other ~~matters, which~~factors that may cause actual results to differ materially from the views, beliefs, projections and estimates expressed in such statements. These risks, uncertainties and other factors include, but are not limited to, those described within Part I, Item 1A “Risk Factors” in our Annual Report, and the following: (1) the timing, receipt and terms and conditions of any required governmental or regulatory approvals of the proposed transaction and the related transactions involving the parties that could reduce the anticipated benefits of or cause the parties to abandon the proposed transaction, (2) risks related to the satisfaction of the conditions to closing the proposed transaction (including the failure to obtain necessary regulatory approvals or the approval of the Company’s stockholders), and the related transactions involving the parties, in the anticipated timeframe or at all, (3) the risk that any announcements relating to the proposed transaction could have adverse ~~impacts caused by~~effects on the market price of the Company’s common stock, (4) disruption from the proposed transaction making it more difficult to maintain business and operational relationships, including retaining and hiring key personnel and maintaining relationships with the Company’s customers, vendors and others with whom it does business, (5) the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement entered into pursuant to the proposed transaction or of the transactions involving the parties, (6) risks related to disruption of management’s attention from the Company’s ongoing business operations due to the proposed transaction, (7) significant transaction costs, (8) the risk of litigation and/or regulatory actions related to the proposed transaction or unfavorable results from currently pending litigation and proceedings or litigation and proceedings that could arise in the future, (9) other business effects, including the effects of industry, market, economic, political or regulatory conditions, (10) information technology system failures, data security breaches, data privacy compliance, network disruptions, and cybersecurity, malware or ransomware attacks, and (11) changes resulting from the COVID-19 pandemic ~~and its~~(including the effect of COVID-19 on ~~our~~the Company’s revenues, particularly our non-political advertising ~~revenues. The words “believe,” “expect,” “estimate,” “could,” “should,” “intend,” “may,” “plan,” “seek,” “anticipate,” “project”~~revenues), which could exacerbate any of the risks described above. Potential regulatory actions, changes in consumer behaviors and ~~similar expressions, among others, generally identify “forward-looking statements”. These forward-looking statements are subject~~impacts on and modifications to ~~certain risks~~our operations and ~~uncertainties that could~~business relating thereto and our ability to execute on our standalone plan can also cause actual results ~~and events~~ to differ ~~materially from those anticipated~~materially. We are not responsible for updating the information contained in ~~the forward-looking statements, including those described within Item 1A. “Risk Factors” in our 2020 Annual~~this Quarterly Report on Form ~~10-K.~~10-Q beyond the published date.

~~Our actual financial results may be different from those projected due~~Readers are cautioned not to ~~the inherent nature of projections. Given these uncertainties,~~place undue reliance on forward-looking statements ~~should not be relied~~made by or on ~~in making investment decisions. The forward-looking statements contained in this Form 10-Q speak~~behalf of the Company. Each such statement speaks only as of the ~~date of its filing. Except where required~~day it was made. We undertake no obligation to update or to revise any forward-looking statements. The factors described above cannot be controlled by ~~applicable law, we expressly disclaim a duty to provide updates to forward-looking statements after the date of~~our Company. When used in this Quarterly Report on Form 10-Q, the words “believes,” “estimates,” “plans,” “expects,” “should,” “could,” “outlook,” and “anticipates” and similar expressions as they relate to ~~reflect subsequent events, changed circumstances, changes in expectations,~~our Company or ~~the estimates and assumptions associated with them. The forward-looking~~management are intended to identify forward looking statements. Forward-looking statements in this Quarterly Report on Form 10-Q ~~are intended to be subject to~~may include, without limitation: statements about the ~~safe harbor protection provided by~~potential benefits of the ~~federal securities laws.~~proposed acquisition, anticipated growth rates, the Company’s plans, objectives, expectations, and the anticipated timing of closing the proposed transaction.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

For quantitative and qualitative disclosures about market risk, refer to the following section of our ~~2020~~2021 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, ~~2020.~~2021.

As of ~~June 30, 2021,~~March 31, 2022, approximately ~~$3.23~~$3.09 billion of our debt has a fixed interest rate (which represents ~~approximately 93%~~100% of our total principal debt obligation). ~~Our remaining debt obligation of~~ ~~$256~~ 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 ~~$1.3~~ ~~million.~~ The fair value of our total debt, based on bid and ask quotes for the related debt, totaled ~~$3.70~~ $3.15 billion as of ~~June 30, 2021~~March 31, 2022 and ~~$3.79~~$3.40 billion as of December 31, ~~2020.~~2021.

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~~’sCompany’s disclosure controls and procedures as of ~~June 30, 2021.~~March 31, 2022. Based on that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective, as of ~~June 30, 2021,~~March 31, 2022, 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 9 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 ~~2020~~2021 Annual Report on Form 10-K describes the risks and uncertainties that we believe may have the potential to materially affect our business, results of operations, financial condition, cash flows, projected results and future prospects. We do not believe that there have been any material changes from the risk

factors previously disclosed in our ~~2020~~2021 Annual Report on Form 10-K.

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

In December 2020, our Board of Directors authorized the renewal of our share repurchase program for up to $300.0 million of our common stock over the next three years. ~~The~~No shares ~~may be~~were repurchased ~~at management’s discretion, either on~~during the open market or in privately negotiated block transactions. Management’s decision to repurchase shares will depend on price and other corporate developments. Purchases may occur from time to time and no maximum purchase price has been set. In the second quarter and sixthree months ended ~~June 30, 2021, no shares were repurchased.~~March 31, 2022. As a result of the announcement of the Merger Agreement on February 22, 2022, 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.

3227

Item 6. Exhibits


Exhibit Number						Description


2-1						Agreement and Plan of Merger, dated as of February 22 , 2022, by and among TEGNA Inc., Teton Parent Corp., Teton Merger Corp., and solely for purposes of certain provisions specified therein, Community News Media LLC, CNM Television Holdings I LLC, SGCI Holdings III LLC, P Standard General Ltd., Standard General Master Fund L.P., Standard General Master Fund II L.P., Standard General Focus Fund L.P., CMG Media Corporation, CMG Media Operating Company, LLC, CMG Farnsworth Television Holdings, LLC, CMG Farnsworth Television Operating Company, LLC, Teton Midco Corp., Teton Opco Corp., and CMG Farnsworth Television Acquisition Company, LLC (incorporated by reference to Exhibit 2-1 to TEGNA Inc.’s Form 8-K filed on February 22 , 2022).

2-2						Amendment No. 1 to Agreement and Plan of Merger, dated as of March 10, 2022, by and among TEGNA Inc., Teton Parent Corp., Teton Merger Corp., and solely for purposes of certain provisions specified therein, Community News Media LLC, CNM Television Holdings I LLC, SGCI Holdings III LLC, P Standard General Ltd., Standard General Master Fund L.P., Standard General Master Fund II L.P., Standard General Focus Fund L.P., CMG Media Corporation, CMG Media Operating Company, LLC, CMG Farnsworth Television Holdings, LLC, CMG Farnsworth Television Operating Company, LLC, Teton Midco Corp., Teton Opco Corp., and CMG Farnsworth Television Acquisition Company, LLC (incorporated by reference to Exhibit 2-1 to TEGNA Inc.’s Form 8-K filed on March 15, 2022).

3-1						Fourth Restated Certificate of Incorporation of TEGNA Inc. (incorporated by reference to Exhibit 3-1 to TEGNA Inc.’s Form 8-K filed on May 12, 2021).

3-2						By-laws, as amended through May 1 2 ~~, 20~~2 1 12, 2021 (incorporated by reference to Exhibit 3-2 3-2 to TEGNA Inc.’s Form 8-K filed on May 1 2 ~~, 20~~2 1 ) 12, 2021).

10-1						Form of Executive Officer Performance Share Award Agreement.*

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

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

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

32-1						Section 1350 Certification of CEO.

32-2						Section 1350 Certification of CFO.

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.SCH						Inline XBRL Taxonomy Extension Schema Document.

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).

*Asterisks identify management contracts and compensatory plans and arrangements.

3328

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: ~~August~~May 9, ~~2021~~2022			TEGNA INC.

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

3429


	Two-Year Period Ended June 30,
	2021				2020

Advertising & Marketing Services	44	%			48	%
Subscription	46	%	}	55%	44	%	}	51%
Political	9	%			7	%
Other	1	%			1	%
Total revenues	100	%			100	%


			Special Items
Quarter ended June 30, 2021	GAAP measure		Advisory fees related to activism defense		Spectrum repacking reimbursements and other		Special tax items		Non-GAAP measure



Corporate - General and administrative expenses	$	23,183	$	(12,012)	$	—	$	—	$	11,171
Spectrum repacking reimbursements and other, net	(1,475)		—		1,475		—		—
Operating expenses	547,386		(12,012)		1,475		—		536,849
Operating income	185,522		12,012		(1,475)		—		196,059



Income before income taxes	137,840		12,012		(1,475)		—		148,377
Provision for income taxes	30,986		3,111		(374)		2,797		36,520
Net income attributable to TEGNA Inc.	106,627		8,901		(1,101)		(2,797)		111,630
Net income per share-diluted (a)	$	0.48	$	0.04	$	—	$	(0.01)	$	0.50

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



			Special Items
Quarter ended June 30, 2020	GAAP measure		Advisory fees related to activism defense		Spectrum repacking reimbursements and other		Gain on equity method investment		Non-GAAP measure



Corporate - General and administrative expenses	$	28,312	$	(15,448)	$	—	$	—	$	12,864
Spectrum repacking reimbursements and other, net	(116)		—		116		—		—
Operating expenses	502,530		(15,448)		116		—		487,198
Operating income	75,097		15,448		(116)		—		90,429
Equity income (loss) in unconsolidated investments, net	1,921		—		—		(6,514)		(4,593)

Total non-operating expenses	(48,917)		—		—		(6,514)		(55,431)
Income before income taxes	26,180		15,448		(116)		(6,514)		34,998
Provision for income taxes	6,607		3,882		(27)		(1,637)		8,825
Net income attributable to TEGNA Inc.	19,947		11,566		(89)		(4,877)		26,547
Net income per share-diluted	$	0.09	$	0.05	$	—	$	(0.02)	$	0.12


			Special Items
Six months ended June 30, 2021	GAAP measure		Advisory fees related to activism defense		Spectrum repacking reimbursements and other		Special tax items		Non-GAAP measure



Corporate - General and administrative expenses	$	40,053	$	(16,611)	$	—	$	—	$	23,442
Spectrum repacking reimbursements and other, net	(2,898)		—		2,898		—		—
Operating expenses	1,078,507		(16,611)		2,898		—		1,064,794
Operating income	381,452		16,611		(2,898)		—		395,165
Equity income (loss) in unconsolidated investments, net	(3,926)		—		—		—		(3,926)
Other non-operating items, net	1,854		—		—		—		1,854
Total non-operating expenses	(95,166)		—		—		—		(95,166)
Income before income taxes	286,286		16,611		(2,898)		—		299,999
Provision for income taxes	66,600		4,291		(741)		2,797		72,947
Net income attributable to TEGNA Inc.	219,244		12,320		(2,157)		(2,797)		226,610
Net income per share-diluted (a)	$	0.99	$	0.06	$	(0.01)	$	(0.01)	$	1.02

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

			Special Items
Six months ended June 30, 2020	GAAP measure		M&A due diligence costs		Advisory fees related to activism defense		Spectrum repacking reimbursements and other		Gains on equity method investment		Other non-operating items		Special tax benefits		Non-GAAP measure



Corporate - General and administrative expenses	$	50,026	$	(4,588)	$	(23,087)	$	—	$	—	$	—	$	—	$	22,351
Spectrum repacking reimbursements and other, net	(7,631)		—		—		7,631		—		—		—		—
Operating expenses	1,012,181		(4,588)		(23,087)		7,631		—		—		—		992,137
Operating income	249,635		4,588		23,087		(7,631)		—		—		—		269,679
Equity income (loss) in unconsolidated investments, net	10,936		—		—		—		(18,585)		—		—		(7,649)
Other non-operating items, net	(18,231)		—		—		—		—		21,744		—		3,513
Total non-operating expenses	(116,132)		—		—		—		(18,585)		21,744		—		(112,973)
Income before income taxes	133,503		4,588		23,087		(7,631)		(18,585)		21,744		—		156,706
Provision for income taxes	27,732		1,151		5,801		(2,017)		(4,670)		5,463		3,944		37,404
Net income attributable to TEGNA Inc.	106,255		3,437		17,286		(5,614)		(13,915)		16,281		(3,944)		119,786
Net income per share-diluted	$	0.48	$	0.02	$	0.08	$	(0.03)	$	(0.06)	$	0.07	$	(0.02)	$	0.54