Shareholders' equity | Shareholders’ equity At Dec. 31, 2015 and Dec. 28, 2014, our authorized capital was comprised of 800 million shares of common stock and 2 million shares of preferred stock. At Dec. 31, 2015 shareholders’ equity of TEGNA included 220 million shares that were outstanding (net of 105 million shares of common stock held in treasury). At Dec. 28, 2014 shareholders’ equity of TEGNA included 227 million shares that were outstanding (net of 98 million shares of common stock held in treasury). No shares of preferred stock were issued and outstanding at Dec. 31, 2015 or Dec. 28, 2014. Capital stock and earnings per share We report earnings per share on two bases, basic and diluted. All basic income per share amounts are based on the weighted average number of common shares outstanding during the year. The calculation of diluted earnings per share also considers the assumed dilution from the exercise of stock options and from performance shares and restricted stock units. Our earnings per share (basic and diluted) for 2015, 2014, and 2013 are presented below: In thousands, except per share amounts 2015 2014 2013 Income from continuing operations attributable to TEGNA Inc. $ 357,458 $ 687,936 $ 41,463 Income from discontinued operations, net of tax 102,064 374,235 347,217 Net income attributable to TEGNA Inc. $ 459,522 $ 1,062,171 $ 388,680 Weighted average number of common shares outstanding - basic 224,688 226,292 228,541 Effect of dilutive securities Restricted stock 2,236 2,624 2,839 PSUs 1,867 1,999 1,649 Stock options 930 992 1,160 Weighted average number of common shares outstanding - diluted 229,721 231,907 234,189 Earnings from continuing operations per share - basic $ 1.59 $ 3.04 $ 0.18 Earnings from discontinued operations per share - basic 0.45 1.65 1.52 Earnings per share - basic $ 2.04 $ 4.69 $ 1.70 Earnings from continuing operations per share - diluted $ 1.56 $ 2.97 $ 0.18 Earnings from discontinued operations per share - diluted 0.44 1.61 1.48 Earnings per share - diluted $ 2.00 $ 4.58 $ 1.66 The diluted earnings per share amounts exclude the effects of approximately 0.2 million stock options outstanding for 2015, 0.8 million for 2014 and 2.4 million for 2013, as their inclusion would be anti-dilutive. Share repurchase program In June 2015, our Board of Directors approved a $750 million share repurchase program to be completed over a three -year period beginning June 29, 2015. On Oct. 20, 2015, our Board of Directors approved a $75 million increase to the share repurchase program, bringing the total authorized amount to $825 million . During 2015, 9.6 million shares were purchased under the current and former programs for $ 271.0 million . In 2014, 2.7 million shares were purchased under the former program for $75.8 million and in 2013, 4.9 million shares were purchased for $116.6 million . Repurchased shares are included in the Consolidated Balance Sheets as Treasury Stock. As of Dec. 31, 2015, the value of shares that may be repurchased under the existing program is $629.1 million . The shares may be repurchased at management’s discretion, either in 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. Certain of the shares we previously acquired have been reissued in settlement of employee stock awards. Stock-Based Compensation Plans In May 2001, our shareholders approved the adoption of the Omnibus Incentive Compensation Plan (the Plan). The Plan is administered by the Executive Compensation Committee of the Board of Directors and was amended and restated as of May 4, 2010, to increase the number of shares reserved for issuance to up to 60.0 million shares of our common stock for awards granted on or after the amendment date. The Plan provides for the granting of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and other equity-based and cash-based awards. Awards may be granted to our employees and members of the Board of Directors. The Plan provides that shares of common stock subject to awards granted become available again for issuance if such awards are canceled or forfeited. In 2011, we established a performance share award plan for senior executives pursuant to which awards were first made with a grant date of Jan. 1, 2012. Pursuant to the terms of this award, we may issue shares of our common stock (Performance Shares) to senior executives following the completion of a three -year period beginning on the grant date. Generally, if an executive remains in continuous employment with us during the full three-year incentive period, the number of performance share units (PSU) that an executive will receive will be determined based upon how our total shareholder return (TSR) compares to the TSR of a peer group of companies during the three -year period. We recognize the grant date fair value of each PSU, less estimated forfeitures, as compensation expense ratably over the incentive period. Fair value is determined by using a Monte Carlo valuation model. Each PSU is equal to and paid in one share of our common stock, but carries no voting or dividend rights. The number of shares ultimately issued for each PSU award may range from 0% to 200% of the award’s target. We also issue stock-based compensation to employees in the form of restricted stock units (RSUs). These awards generally entitle employees to receive at the end of a four -year incentive period one share of common stock for each RSU granted, conditioned on continued employment for the full incentive period. For RSU grants after 2014, the grants generally vest 25% per year. Under the plan, no more than 500,000 RSUs may be granted to any participant in any fiscal year. Employees who are granted RSUs have the right to receive shares of stock after completion of the incentive period; however, the RSUs do not pay dividends or carry voting rights during the incentive period. RSUs are valued based on the fair value of our common stock on the date of grant less the present value of the expected dividends not received during the relevant incentive period. The fair value of the RSU, less estimated forfeitures, is recognized as compensation expense ratably over the incentive period. We generally grant both RSUs and PSUs to employees on January 1. The Plan also permits us to issue restricted stock. Restricted Stock is an award of common stock that is subject to restrictions and such other terms and conditions as the Executive Compensation Committee determines. Under the Plan, no more than 500,000 restricted shares may be granted to any participant in any fiscal year. Determining fair value of PSUs Valuation and amortization method – We determined the fair value of Performance Shares using the Monte Carlo valuation model. This model considers our likelihood, and the likelihood of our peer group companies’, share prices ending at various levels subject to certain price caps at the conclusion of the three-year incentive period. Key inputs into the Monte Carlo valuation model include expected term, expected volatility, risk-free interest rate and expected dividend yield. Each assumption is discussed below. Expected term – The expected term represents the period that our stock-based awards are expected to be outstanding. The expected term for Performance Share awards is based on the incentive period. Expected volatility – The fair value of stock-based awards reflects volatility factors calculated using historical market data for our common stock and also our peer group when the Monte Carlo method is used. The time frame used is equal to the expected term. Risk-free interest rate – We base the risk-free interest rate on the yield to maturity at the time of the award grant on zero-coupon U.S. government bonds having a remaining life equal to the award’s expected life. Expected dividend – The dividend assumption is based on our expectations about our dividend policy on the date of grant. Estimated forfeitures – When estimating forfeitures, we consider voluntary termination behavior as well as analysis of actual forfeitures. The following assumptions were used to estimate the fair value of performance share awards: PSUs Granted During 2015 2014 2013 Expected term 3 yrs. 3 yrs. 3 yrs. Expected volatility 32.00% 39.32% 40.80% Risk-free interest rate 1.10% 0.78% 0.36% Expected dividend yield 2.51% 2.70% 4.44% Impact from Publishing Spin on Equity Awards: In connection with the spin-off of our publishing businesses, and in accordance with our equity award Plan, the number of stock options, RSUs and target PSUs outstanding (collectively, stock awards) on June 29, 2015 (the Distribution Date), and the exercise prices of such stock options were adjusted with the intention of preserving the intrinsic value of the awards prior to the separation. Employees with outstanding stock awards granted prior to 2015, received one share of an equivalent Gannett stock award for every two shares of TEGNA stock award outstanding. For RSUs and PSUs granted in 2015 but prior to the Distribution Date, adjustments were determined by comparing the fair value of such awards immediately prior to the spin-off, to the fair value of such awards immediately after (the Adjustments). Accordingly, each stock award granted in 2015 and outstanding as of the Distribution Date was increased by multiplying the size of such award by a factor of 1.18 . The Adjustments resulted in an aggregate increase of approximately 125,000 equity awards (comprised of 75 thousand RSUs and 50 thousand target PSU’s) and are included in the line item “Adjustment due to spin-off of Publishing” in the tables that follow. These adjustments to our stock-based compensation awards did not have a material impact on compensation expense. Stock-based Compensation Expense: The following table shows the stock-based compensation related amounts recognized in the Consolidated Statements of Income for equity awards: In thousands, except per share amounts 2015 2014 2013 (recast) (recast) Restricted stock and RSUs $ 8,438 $ 8,604 $ 8,065 PSUs 10,363 7,517 7,400 Stock options 857 662 1,771 Total stock-based compensation 19,658 16,783 17,236 Income tax benefit 7,643 6,243 6,477 Stock-based compensation, net of tax $ 12,015 $ 10,540 $ 10,759 Per diluted share impact $ 0.05 $ 0.05 $ 0.05 Restricted Stock and RSUs: As of Dec. 31, 2015, there was $15.5 million of unrecognized compensation cost related to non-vested restricted stock and RSUs. This amount will be adjusted for future changes in estimated forfeitures and recognized on a straight-line basis over a weighted average period of 2.4 years . The tax benefit realized from the settlement of RSUs was $5.9 million in 2015, $9.5 million in 2014 and $7.0 million in 2013. A summary of restricted stock and RSU awards is presented below: 2015 Restricted Stock and RSU Activity Shares Weighted average fair value Unvested at beginning of year 3,577,598 $ 16.97 Granted 491,690 $ 31.78 Settled (1,485,735 ) $ 14.66 Canceled (532,524 ) $ 19.28 Adjustment due to spin-off of Publishing (a) 75,497 Unvested at end of year (a) 2,126,526 $ 21.55 (a) The weighted-average grant date fair value of the RSUs included in the line item “Adjustment due to spin-off of publishing" is equal to the weighted-average grant date fair value of the awards at their respective grant date divided by a factor of approximately 1.18 . The weighted-average grant date fair value of the unvested RSUs as of Dec. 31, 2015 reflect the adjustment. 2014 Restricted Stock and RSU Activity Shares Weighted average fair value Unvested at beginning of year 4,193,985 $ 13.92 Granted 1,048,516 $ 27.26 Settled (1,263,702 ) $ 15.92 Canceled (401,201 ) $ 16.13 Unvested at end of year 3,577,598 $ 16.97 2013 Restricted Stock and RSU Activity Shares Weighted average fair value Unvested at beginning of year 4,069,509 $ 12.98 Granted 1,588,628 $ 15.80 Settled (1,035,256 ) $ 13.95 Canceled (428,896 ) $ 13.40 Unvested at end of year 4,193,985 $ 13.92 PSUs: As of Dec. 31, 2015, there was $3.9 million of unrecognized compensation cost related to non-vested performance shares. This amount will be adjusted for future changes in estimated forfeitures and recognized over a weighted average period of 1.7 years . The tax benefit realized from the settlement of PSUs was $11.2 million in 2015. A summary of our performance shares awards is presented below: 2015 PSUs Activity Target number of shares Weighted average fair value Unvested at beginning of year 2,100,115 $ 20.95 Granted 285,458 $ 39.47 Settled (925,640 ) $ 14.23 Canceled (123,621 ) $ 29.84 Adjustment due to spin-off of Publishing (a) 49,628 Unvested at end of year (a) 1,385,940 $ 29.21 (a) The weighted-average grant date fair value of the PSUs included in the line item “Adjustment due to spin-off of publishing" is equal to the weighted-average grant date fair value of the awards at their respective grant date divided by a factor of approximately 1.18 . The weighted-average grant date fair value of the unvested PSUs as of December 31, 2015 reflect the adjustment. 2014 PSUs Activity Target number of shares Weighted average fair value Unvested at beginning of year 1,760,488 $ 16.92 Granted 436,340 $ 37.31 Canceled (96,713 ) $ 21.41 Unvested at end of year 2,100,115 $ 20.95 2013 PSUs Activity Target number of shares Weighted average fair value Unvested at beginning of year 982,452 $ 14.23 Granted 813,783 $ 20.12 Canceled (35,747 ) $ 15.86 Unvested at end of year 1,760,488 $ 16.92 Stock Options: We generally recognize compensation cost for stock options ratably over the four -year incentive period. At Dec. 31, 2015 and Dec. 28, 2014, there were 1.7 million (weighted average exercise price of $16.61 ) and 2.8 million (weighted average exercise price of $22.23 ) stock options outstanding. Stock options outstanding at Dec. 31, 2015 have a weighted average remaining contractual life of approximately 2.36 years and an aggregate intrinsic value of $16.4 million . All outstanding employee stock options have vested as of Dec. 31 2015. There were 1.0 million (weighted average exercise price of $14.47 ) stock options exercised during 2014. The tax benefit realized from the stock options exercised was $3.3 million in 2015, $3 million in 2014, and $2.8 million in 2013. We did not grant stock options to employees during 2015 and 2014. The following table pertains to stock options granted in 2013, in addition to stock options that were exercised in 2015, 2014 and 2013 (in thousands, except for weighted-average grant-date fair value of stock options granted): In thousands, except per share amounts 2015 2014 2013 Per share weighted average grant-date fair value of stock options granted $ — $ — $ 8.20 Grant-date fair value of all stock options that vested 962 5,958 8,642 Intrinsic value of all stock options exercised 11,378 15,003 16,675 In 2013, we estimated the fair value for stock options at the date of grant using the Black-Scholes option pricing model, which required us to make certain assumptions. We used the following weighted average assumptions in the model: risk-free interest rate of 0.75% , dividend yield of 3.00% , weighted average volatility factor of 61.94% and an expected option life of 4.5 years . Accumulated other comprehensive income (loss) The elements of our Accumulated Other Comprehensive Loss (AOCL) principally consisted of pension, retiree medical and life insurance liabilities and foreign currency translation gains. The following tables summarize the components of, and changes in, AOCL (net of tax and noncontrolling interests): In thousands of dollars 2015 Retirement Plans Foreign Currency Translation Other Total Balance at beginning of year $ (1,172,245 ) $ 391,113 $ 2,363 $ (778,769 ) Other comprehensive income before reclassifications 23,094 (1,966 ) 3,311 24,439 Spin-off publishing businesses 1,012,745 (409,276 ) — 603,469 Amounts reclassified from AOCL 19,910 — — 19,910 Balance at end of year $ (116,496 ) $ (20,129 ) $ 5,674 $ (130,951 ) In thousands of dollars 2014 Retirement Plans Foreign Currency Translation Other Total Balance at beginning of year $ (923,595 ) $ 427,177 $ 2,363 $ (494,055 ) Other comprehensive income (loss) (276,219 ) (36,064 ) — (312,283 ) Amounts reclassified from AOCL 27,569 — — 27,569 Balance at end of year $ (1,172,245 ) $ 391,113 $ 2,363 $ (778,769 ) In thousands of dollars 2013 Retirement Plans Foreign Currency Translation Other Total Balance at beginning of year $ (1,119,263 ) $ 418,122 $ — $ (701,141 ) Other comprehensive income (loss) 154,611 9,055 2,363 166,029 Amounts reclassified from AOCL 41,057 — — 41,057 Balance at end of year $ (923,595 ) $ 427,177 $ 2,363 $ (494,055 ) AOCL components are included in the computation of net periodic postretirement costs (see Note 7 for more detail). Reclassifications out of AOCL related to the retirement plans include the following: In thousands of dollars 2015 2014 Amortization of prior service cost (credit) $ 1,176 $ (4,082 ) Amortization of actuarial loss 31,357 46,489 Total reclassifications, before tax 32,533 42,407 Income tax effect (12,623 ) (14,838 ) Total reclassifications, net of tax $ 19,910 $ 27,569 |