Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Apr. 30, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | TEGNA INC | |
Entity Central Index Key | 0000039899 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock Shares Outstanding | 216,350,179 | |
Trading Symbol | TGNA | |
Entity Small Business | false | |
Entity Emerging Growth Company | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 3,818 | $ 135,862 |
Accounts receivable, net of allowances of $3,661 and $3,090, respectively | 454,861 | 425,404 |
Other receivables | 18,741 | 20,967 |
Programming rights | 23,908 | 35,252 |
Prepaid expenses and other current assets | 18,071 | 17,737 |
Total current assets | 519,399 | 635,222 |
Property and equipment | ||
Cost | 883,828 | 858,170 |
Less accumulated depreciation | (496,511) | (482,955) |
Net property and equipment | 387,317 | 375,215 |
Intangible and other assets | ||
Goodwill | 2,605,863 | 2,596,863 |
Indefinite-lived and amortizable intangible assets, less accumulated amortization | 1,599,124 | 1,526,077 |
Right-of-use assets for operating leases | 72,160 | 0 |
Investments and other assets | 139,886 | 143,465 |
Total intangible and other assets | 4,417,033 | 4,266,405 |
Total assets | 5,323,749 | 5,276,842 |
Current liabilities | ||
Accounts payable | 53,880 | 83,226 |
Accrued liabilities | ||
Compensation | 25,253 | 52,726 |
Interest | 53,683 | 37,458 |
Contracts payable for programming rights | 91,758 | 112,059 |
Other | 49,186 | 49,211 |
Dividends payable | 15,216 | 15,154 |
Income taxes | 34,562 | 19,383 |
Total current liabilities | 323,538 | 369,217 |
Noncurrent liabilities | ||
Income taxes | 13,101 | 13,624 |
Deferred income taxes | 401,729 | 396,847 |
Long-term debt | 2,891,495 | 2,944,466 |
Pension liabilities | 137,607 | 139,375 |
Operating lease liabilities | 84,259 | 0 |
Other noncurrent liabilities | 66,769 | 72,389 |
Total noncurrent liabilities | 3,594,960 | 3,566,701 |
Total liabilities | 3,918,498 | 3,935,918 |
Shareholders’ equity | ||
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 | 262,823 | 301,352 |
Retained earnings | 6,488,352 | 6,429,512 |
Accumulated other comprehensive loss | (135,432) | (136,511) |
Less treasury stock at cost, 108,133,345 shares and 108,660,002 shares, respectively | (5,534,911) | (5,577,848) |
Total equity | 1,405,251 | 1,340,924 |
Total liabilities and equity | $ 5,323,749 | $ 5,276,842 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 3,661 | $ 3,090 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, Authorized shares | 800,000,000 | 800,000,000 |
Common stock, Issued shares | 324,418,632 | 324,418,632 |
Treasury stock, shares | 108,133,345 | 108,660,002 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||
Revenues | $ 516,753 | $ 502,090 |
Operating expenses: | ||
Cost of revenues, exclusive of depreciation | 281,311 | 258,493 |
Business units - Selling, general and administrative expenses, exclusive of depreciation | 71,465 | 73,621 |
Corporate - General and administrative expenses, exclusive of depreciation | 14,735 | 12,708 |
Depreciation | 14,917 | 13,471 |
Amortization of intangible assets | 8,689 | 6,782 |
Spectrum repacking reimbursements and other | (7,013) | 0 |
Total | 384,104 | 365,075 |
Operating income | 132,649 | 137,015 |
Non-operating income (expense): | ||
Equity income (loss) in unconsolidated investments, net | 12,028 | (1,238) |
Interest expense | (46,385) | (47,725) |
Other non-operating items, net | (1,539) | (12,480) |
Total | (35,896) | (61,443) |
Income before income taxes | 96,753 | 75,572 |
Provision for income taxes | 22,774 | 20,385 |
Net income | $ 73,979 | $ 55,187 |
Net income per share – basic (In dollars per share) | $ 0.34 | $ 0.26 |
Net income per share – diluted (In dollars per share) | $ 0.34 | $ 0.25 |
Weighted average number of common shares outstanding: | ||
Basic shares (in shares) | 216,709 | 216,276 |
Diluted shares (in shares) | 217,202 | 216,989 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 73,979 | $ 55,187 |
Other comprehensive income, before tax: | ||
Foreign currency translation adjustments | 14 | 202 |
Recognition of previously deferred post-retirement benefit plan costs | 1,425 | 1,250 |
Pension lump-sum payment charge | 0 | 6,300 |
Other comprehensive income, before tax | 1,439 | 7,752 |
Income tax effect related to components of other comprehensive income | (360) | (1,977) |
Other comprehensive income, net of tax | 1,079 | 5,775 |
Comprehensive income | $ 75,058 | $ 60,962 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 73,979 | $ 55,187 |
Adjustments to reconcile net income to net cash flow from operating activities: | ||
Depreciation and amortization | 23,606 | 20,253 |
Stock-based compensation | 4,433 | 3,599 |
Other gains on sales of assets | (2,880) | (1,010) |
Equity income (loss) in unconsolidated investments, net | 12,028 | (1,238) |
Pension contributions, net of expense | (242) | (23,072) |
Change in other assets and liabilities, net | (38,459) | (5,009) |
Net cash flow from operating activities | 48,409 | 51,186 |
Cash flows from investing activities: | ||
Purchase of property and equipment | (24,810) | (10,643) |
Reimbursements from spectrum repacking | 4,134 | 0 |
Payments for acquisitions of businesses, net of cash acquired | (108,872) | (325,903) |
Payments for investments | (1,171) | (3,991) |
Proceeds from investments | 618 | 1,010 |
Proceeds from sale of assets and businesses | 20,064 | 1,373 |
Net cash flow used for investing activities | (110,037) | (338,154) |
Cash flows from financing activities: | ||
(Payments) proceeds of borrowings under revolving credit facilities, net | (30,000) | 220,000 |
Debt repayments | (25,000) | (33,062) |
Dividends paid | (15,078) | (15,043) |
Other, net | (338) | (4,630) |
Net cash flow (used for) provided by financing activities | (70,416) | 167,265 |
(Decrease) in cash, cash equivalents and restricted cash | (132,044) | (119,703) |
Balance of cash, cash equivalents and restricted cash, beginning of period | 135,862 | 128,041 |
Balance of cash, cash equivalents and restricted cash, end of period | $ 3,818 | $ 8,338 |
Consolidated Statements of Equi
Consolidated Statements of Equity Consolidated Statements of Equity - USD ($) $ in Thousands | Total | Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive income (loss) | Treasury stock |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cumulative effects of accounting changes | $ (3,724) | $ 21,121 | $ (24,845) | |||
Beginning balance at Dec. 31, 2017 | 995,041 | $ 324,419 | $ 382,127 | 6,062,995 | (106,923) | $ (5,667,577) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net Income | 55,187 | 55,187 | ||||
Other comprehensive income, net of tax | 5,775 | 5,775 | ||||
Comprehensive income | 60,962 | |||||
Dividends declared | (15,094) | (15,094) | ||||
Stock-based awards activity | (4,631) | (82,283) | 77,652 | |||
Stock-based compensation | 3,599 | 3,599 | ||||
Other activity | 483 | 483 | ||||
Ending balance at Mar. 31, 2018 | 1,036,636 | 324,419 | 303,926 | 6,124,209 | (125,993) | (5,589,925) |
Beginning balance at Dec. 31, 2018 | 1,340,924 | 324,419 | 301,352 | 6,429,512 | (136,511) | (5,577,848) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net Income | 73,979 | 73,979 | ||||
Other comprehensive income, net of tax | 1,079 | 1,079 | ||||
Comprehensive income | 75,058 | |||||
Dividends declared | (15,139) | (15,139) | ||||
Stock-based awards activity | (338) | (43,275) | 42,937 | |||
Stock-based compensation | 4,433 | 4,433 | ||||
Other activity | 313 | 313 | ||||
Ending balance at Mar. 31, 2019 | $ 1,405,251 | $ 324,419 | $ 262,823 | $ 6,488,352 | $ (135,432) | $ (5,534,911) |
Consolidated Statements of Eq_2
Consolidated Statements of Equity Consolidated Statements of Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends declared per share (in dollars per share) | $ 0.07 | $ 0.07 |
Accounting Policies
Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Accounting Policies | 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, 2018. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from these estimates. Significant estimates include, but are not limited to, evaluation of goodwill and other intangible assets for impairment, business combinations, fair value measurements, post-retirement benefit plans, income taxes including deferred taxes, and contingencies. The condensed consolidated financial statements include the accounts of subsidiaries we control and variable interest entities (VIEs) if we are the primary beneficiary. We eliminate all intercompany balances, transactions, and profits in consolidation. Investments in entities over which we have significant influence, but do not have control, are accounted for under the equity method. Our share of net earnings and losses from these ventures is included in “Equity income (loss) in unconsolidated investments, net” in the Consolidated Statements of Income. We operate one operating and reportable segment, which primarily consists of our 49 television stations operating in 41 markets, offering high-quality television programming and digital content. Our reportable segment determination is based on our management and internal reporting structure, the nature of products and services we offer, and the financial information that is evaluated regularly by our chief operating decision maker. Accounting guidance adopted in 2019: In February 2016, the FASB issued new guidance related to leases which require lessees to recognize assets and liabilities on the balance sheet for leases with lease terms of more than 12 months. Consistent with previous GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily depends on its classification as a finance or operating lease. However, unlike previous GAAP–which requires only capital leases (renamed finance leases under the new guidance) to be recognized on the balance sheet–the new guidance requires both finance and operating leases to be recognized on the balance sheet. This update requires the lessee to recognize a lease liability equal to the present value of the lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term for all leases longer than 12 months. We adopted the guidance on January 1, 2019. The FASB provided companies with the option to apply the requirements of the guidance in the period of adoption, with no restatement of prior periods. We are utilizing this adoption method. We have also elected an accounting policy allowed by the guidance to not account for lease and non-lease components separately. Additionally, in adopting the guidance, we utilized the package of practical expedients permitted by the FASB, which among other things, allowed us to carry forward our historical lease classification. Lastly, as permitted by the guidance, we elected a policy to not record leases with an original lease term of twelve months or less on the balance sheet. Adoption of the guidance resulted in recording of new right-of-use asset and lease liability balances of $73.8 million and $91.8 million , respectively, as of the adoption date. The difference between right-of-use lease asset and lease liability balances was primarily due to previously accrued rent expense relating to periods prior to January 1, 2019. The new guidance did not have a material impact on our Consolidated Statements of Income, Comprehensive Income, Cash Flows or Equity. See Note 6 for additional information. New accounting guidance not yet adopted: In June 2016, the FASB issued new guidance related to the measurement of credit losses on financial instruments. The new guidance changes the way credit losses on accounts receivable are estimated. Under current GAAP, credit losses on accounts receivable are recognized once it is probable that such losses will occur. Under the new guidance, we will be required to estimate credit losses based on the expected amount of future collections which may result in earlier recognition of doubtful accounts. The new guidance is effective for public companies beginning in the first quarter of 2020 and will be adopted using a modified retrospective approach. We are currently evaluating the effect this new guidance will have on our consolidated financial statements and related disclosures. In August 2018, the FASB issued new guidance on the accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. The new guidance requires a customer in a hosting arrangement that is a service contract to follow the internal-use software guidance to determine which implementation costs to capitalize as an asset related to the service contract. The guidance can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. We plan to adopt the new guidance on a prospective basis beginning in the second quarter of 2019. In August 2018, the FASB issued new guidance that changes disclosures related to defined benefit pension and other postretirement benefit plans. The guidance removes disclosures that are no longer considered cost beneficial, clarifies certain existing disclosure requirements and adds some new disclosures. The most relevant elimination for us is the annual disclosure of the amount of gain/loss and prior service cost/credit amortization expected in the following year. Additions most relevant to us include disclosing narrative explanations of the drivers for significant changes in plan obligations or assets, and disclosure for cost of living adjustments for certain participants of our TEGNA retirement plan. The new guidance is effective for us beginning in 2020 and must be applied on a retrospective basis. Early adoption is permitted. In March 2019, the FASB issued new guidance related to the accounting for episodic television series. The most significant aspect of this new guidance that is applicable to us relates to the level at which our capitalized programming assets are monitored for impairment. Under the new guidance these assets will be monitored at the film group level which is the lowest level at which independently identifiable cash flows are identifiable. The new guidance is effective for public companies beginning in the first quarter of 2020 and is to be adopted prospectively. Early adoption is permitted. We do not expect this guidance to have a material impact on our consolidated financial statements and related disclosures. Revenue recognition: Revenue is recognized upon the transfer of control of promised services to our customers in an amount that reflects the consideration we expect to receive in exchange for those services. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. Amounts received from customers in advance of providing services to our customers are recorded as deferred revenue. The primary sources of our revenues are: 1) advertising & marketing services revenues, which include local and national non-political television advertising, digital marketing services (including Premion), and advertising on the stations’ websites and tablet and mobile products; 2) subscription revenues, reflecting fees paid by satellite, cable, OTT (companies that deliver video content to consumers over the Internet) and telecommunications providers to carry our television signals on their systems; 3) political advertising revenues, which are driven by even year election cycles at the local and national level (e.g. 2020, 2018) and particularly in the second half of those years; and 4) other services, such as production of programming and advertising material. Revenue earned by these sources in the first three months of 2019 and 2018 are shown below (amounts in thousands): Quarter ended Mar. 31, 2019 2018 Advertising & Marketing Services $ 264,402 $ 282,939 Subscription 241,575 205,556 Political 2,704 7,606 Other 8,072 5,989 Total revenues $ 516,753 $ 502,090 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and other intangible assets | Goodwill and other intangible assets The following table displays goodwill, indefinite-lived intangible assets, and amortizable intangible assets as of March 31, 2019 and December 31, 2018 (in thousands): Mar. 31, 2019 Dec. 31, 2018 Gross Accumulated Amortization Gross Accumulated Amortization Goodwill $ 2,605,863 $ — $ 2,596,863 $ — Indefinite-lived intangibles: Television and radio station FCC licenses 1,437,565 — 1,384,186 — Amortizable intangible assets: Retransmission agreements 133,847 (83,730 ) 121,594 (79,274 ) Network affiliation agreements 126,494 (34,383 ) 110,390 (30,802 ) Other 28,864 (9,533 ) 28,865 (8,882 ) Total indefinite-lived and amortizable intangible assets $ 1,726,770 $ (127,646 ) $ 1,645,035 $ (118,958 ) Our retransmission consent contracts and network affiliation agreements are amortized on a straight-line basis over their estimated useful lives. Other intangibles primarily include customer relationships and favorable lease agreements which are amortized on a straight-line basis over their useful lives. On January 2, 2019, we completed our acquisition of WTOL, the CBS affiliate in Toledo, OH, and KWES, the NBC affiliate in Midland-Odessa, TX from Gray Television, Inc. for approximately $108.9 million in cash (which includes $3.9 million for estimated working capital paid at closing). WTOL and KWES are strong local media brands in key markets, and they further expand our station portfolio of Big 4 affiliates. The acquisition was funded through the use of available cash and borrowings under our revolving credit facility. The fair value of the assets acquired and liabilities assumed were based on a preliminary valuation and, as such, our estimates and assumptions are subject to change as additional information is obtained about the facts and circumstances that existed as of the acquisition date. The primary area of purchase price allocation that is not yet finalized is related to the fair value of intangible assets. In connection with our preliminary purchase accounting for this acquisition, we recorded indefinite lived intangible assets for FCC licenses of $53.4 million and amortizable intangible assets of $28.4 million , related to retransmission consent contracts and network affiliation agreements. The amortizable assets will be amortized over a weighted average period of 7 years . We also recognized goodwill of $9.0 million all of which is deductible for tax purposes. |
Investments and Other Assets
Investments and Other Assets | 3 Months Ended |
Mar. 31, 2019 | |
Investments, All Other Investments [Abstract] | |
Investments and other assets | Investments and other assets Our investments and other assets consisted of the following as of March 31, 2019, and December 31, 2018 (in thousands): Mar. 31, 2019 Dec. 31, 2018 Cash value life insurance $ 51,592 $ 50,452 Equity method investments 18,426 22,960 Cost method investments 24,790 24,497 Deferred debt issuance costs 8,679 9,350 Other long-term assets 36,399 36,206 Total $ 139,886 $ 143,465 Cash value life insurance: We are the beneficiary of life insurance policies on the lives of certain employees/retirees, which are recorded at their cash surrender value as determined by the insurance carrier. These policies are utilized as a partial funding source for deferred compensation and other non-qualified employee retirement plans. Gains and losses on these investments are included in Other non-operating items, net within our Consolidated Statement of Income and were not material for all periods presented. Equity method investments : We hold several strategic equity method investments. Our largest equity method investment is our ownership in CareerBuilder, of which we own approximately 17% (or approximately 10% on a fully-diluted basis), which has an investment balance of $12.9 million and $12.4 million as of March 31, 2019 and December 31, 2018, respectively. Our ownership stake provides us with two seats on CareerBuilder’s board of directors and thus we concluded that we have significant influence over the entity. In the first quarter of 2019, we sold our investment in Captivate, which had been accounted for as an equity method investment, for $16.2 million , which resulted in a pre-tax gain of $12.2 million (after-tax gain of $9.2 million ). The gain has been recorded in the Equity income (loss) in unconsolidated investments, net line item of our Statement of Income and Statement of Cash Flows. Cost method investments : Represent investments in non-public businesses that do not have readily determinable pricing, and for which we do not have control or do not exert significant influence. These investments are recorded at cost less impairments, if any, plus or minus changes in observable prices for those investments. There were no gains or losses associated with these investments during the three months ended March 31, 2019 and 2018. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Long-term debt | Long-term debt Our long-term debt is summarized below (in thousands): Mar. 31, 2019 Dec. 31, 2018 Unsecured floating rate term loan due quarterly through June 2020 1 $ 50,000 $ 60,000 Unsecured floating rate term loan due quarterly through September 2020 1 150,000 165,000 Borrowings under revolving credit agreement expiring June 2023 20,000 50,000 Unsecured notes bearing fixed rate interest at 5.125% due October 2019 1 320,000 320,000 Unsecured notes bearing fixed rate interest at 5.125% due July 2020 600,000 600,000 Unsecured notes bearing fixed rate interest at 4.875% due September 2021 350,000 350,000 Unsecured notes bearing fixed rate interest at 6.375% due October 2023 650,000 650,000 Unsecured notes bearing fixed rate interest at 5.50% due September 2024 325,000 325,000 Unsecured notes bearing fixed rate interest at 7.75% due June 2027 200,000 200,000 Unsecured notes bearing fixed rate interest at 7.25% due September 2027 240,000 240,000 Total principal long-term debt 2,905,000 2,960,000 Debt issuance costs (14,154 ) (15,458 ) Unamortized premiums and discounts, net 649 (76 ) Total long-term debt $ 2,891,495 $ 2,944,466 1 Principal payments due within the next 12 months are expected to be refinanced on a long-term basis. As such, all debt presented in the table above is classified as long-term on our March 31, 2019 Condensed Consolidated Balance Sheet. As of March 31, 2019, we had unused borrowing capacity of $1.47 billion under our revolving credit facility. |
Retirement Plans
Retirement Plans | 3 Months Ended |
Mar. 31, 2019 | |
Retirement Benefits [Abstract] | |
Retirement plans | Retirement plans Our principal defined benefit pension plan is the TEGNA Retirement Plan (TRP). The disclosure table below includes the pension expenses of the TRP and the TEGNA Supplemental Retirement Plan (SERP). The total net pension obligations, including both current and non-current liabilities, as of March 31, 2019, were $145.5 million ( $7.9 million is recorded as a current obligation within accrued liabilities on the Condensed Consolidated Balance Sheet). Pension costs, which primarily include costs for the qualified TRP and the non-qualified SERP, are presented in the following table (in thousands): Quarter ended Mar. 31, 2019 2018 Interest cost on benefit obligation $ 5,750 $ 5,150 Expected return on plan assets (6,575 ) (7,450 ) Amortization of prior service cost 25 50 Amortization of actuarial loss 1,500 1,250 Pension payment timing related charge — 6,300 Expense for company-sponsored retirement plans $ 700 $ 5,300 Our TRP and SERP plans are frozen plans, and as such we no longer incur the service cost component of pension expense. All other components of our pension expense presented above are included within the Other non-operating items line item of the Consolidated Statements of Income. During the three months ended March 31, 2019 we made no cash contributions to the TRP and made $1.7 million in cash contributions to the TRP during the three months ended March 31, 2018. During the three months ended March 31, 2019 and 2018, we made benefit payments to participants of the SERP of $0.9 million and $26.7 million , respectively. SERP payments during the three months ended March 31, 2018 primarily related to lump sum payments made to certain former executives of the company. Based on actuarial projections, we expect to make additional cash payments of $10.7 million in 2019 on account of these benefit plans (comprised of payments of $6.9 million to SERP participants and $3.8 million of contributions to the TRP). In the first quarter of 2018, we incurred a pension payment timing related charge of $6.3 million as a result of lump sum SERP payments made to certain former executives. The 2018 charge was reclassified from accumulated other comprehensive income into net periodic benefit cost. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Leases | Leases We adopted the FASB’s new lease accounting guidance on January 1, 2019. We determine if an arrangement contains a lease at the agreement’s inception. As permitted under the lease accounting standards adoption guidance, arrangements prior to the adoption date retained their previous determination as to whether or not an arrangement contained a lease. Arrangements entered into subsequent to the adoption date of the new guidance are analyzed to determine if a lease exists depending on whether there is an identified underlying asset that we control. Our portfolio of leases primarily consists of leases for the use of corporate offices, station facilities, equipment and for antenna/transmitter sites. Our lease portfolio consists entirely of operating leases, with most of our leases having remaining terms ranging 1 to 15 years . Operating lease balances are included in our right-of-use assets for operating leases, other accrued liabilities and operating lease liabilities on our Condensed Consolidated Balance Sheets. Lease liabilities were calculated as of the adoption date based on the present value of lease payments to be made over the remaining term of the lease (or commencement date for leases entered into after the adoption date over the term). Our lease agreements often contain lease and non-lease components (e.g., common-area maintenance or other executory costs). For all our leases, we include the non-lease payments in the calculation of our lease liabilities to the extent they are either fixed or included within the fixed base rental payments. Some of our leases include variable lease components (e.g., rent increases based on the consumer price index) and variable non-lease components, which are expensed as they are incurred. Such variable costs are not material. As our lease agreements do not include an implicit interest rate, we use our incremental borrowing rate in determining the present value of future payments, which was determined using our credit rating and information available as of the adoption date. The operating lease right-of-use assets as of the adoption date were calculated based on the amount of the operating lease liability, less any lease incentives and adjusted for any deferred rent that existed as of the adoption date. Some of our lease agreements include options to renew for additional terms or provide us with the ability terminate the lease early. In determining the term of the lease, we considered whether or not we are reasonably certain to exercise these options. Lease expense for fixed lease payments is recognized on a straight-line basis over the lease term. The following table presents lease related assets and liabilities on the Condensed Consolidated Balance Sheet as of March 31, 2019 (in thousands): Assets Right-of-use assets for operating leases $ 72,160 Liabilities Operating lease liabilities (current) 1 6,497 Operating lease liabilities (non-current) 84,259 Total operating lease liabilities $ 90,756 (1) Current operating lease liabilities are included within the other accrued liabilities line item of the Condensed Consolidated Balance Sheet. As of March 31, 2019, the weighted-average remaining lease term for our lease portfolio was 11.0 years and the weighted average discount rate used to calculate the present value of our lease liabilities was 5.4% . For the three months ended March 31, 2019 and 2018, we recognized lease expense of $3.3 million and $4.4 million . In addition, we made cash payments for operating leases of $2.7 million during three months ended March 31, 2019, which are included in cash flows from operating activities on Statement of Cash Flows. The table below reconciles future lease payments for each of the next five years and remaining years thereafter, in aggregate, to the lease liabilities recorded on the balance sheet (in thousands): Future Period Cash Payments Remaining in 2019 $ 7,017 2020 10,462 2021 11,965 2022 11,205 2023 10,462 Thereafter 73,719 Total lease payments 124,830 Less: amount of lease payments representing interest 34,074 Present value of lease liabilities $ 90,756 As of December 31, 2018, operating lease commitments under lessee arrangements were $10.4 million , $9.9 million , $11.7 million , $10.9 million , and $10.3 million for the years 2019 through 2023, respectively, and $73.9 million thereafter. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Accumulated other comprehensive loss | 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 Balance at Dec. 31, 2018 $ (136,893 ) $ 382 $ (136,511 ) Other comprehensive income before reclassifications — 10 10 Amounts reclassified from AOCL 1,069 — 1,069 Total other comprehensive income 1,069 10 1,079 Balance at Mar. 31, 2019 $ (135,824 ) $ 392 $ (135,432 ) Balance at Dec. 31, 2017 $ (107,037 ) $ 114 $ (106,923 ) Other comprehensive income before reclassifications — 150 150 Amounts reclassified from AOCL 5,625 — 5,625 Other comprehensive income 5,625 150 5,775 Reclassification of stranded tax effects to retained earnings (24,845 ) — (24,845 ) Balance at Mar. 31, 2018 $ (126,257 ) $ 264 $ (125,993 ) Reclassifications from AOCL to the consolidated Statements of Income are comprised of pension and other post-retirement components. Pension and other post retirement reclassifications are related to the amortization of prior service costs, amortization of actuarial losses, and pension payment timing related charge related to our SERP plan. Amounts reclassified out of AOCL are summarized below (in thousands): Quarter ended Mar. 31, 2019 2018 Amortization of prior service credit, net $ (125 ) $ (100 ) Amortization of actuarial loss 1,550 1,350 Pension payment timing related charge — 6,300 Total reclassifications, before tax 1,425 7,550 Income tax effect (356 ) (1,925 ) Total reclassifications, net of tax $ 1,069 $ 5,625 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings per share | Earnings per share Our earnings per share (basic and diluted) are presented below (in thousands of dollars, except per share amounts): Quarter ended Mar. 31, 2019 2018 Net income $ 73,979 $ 55,187 Weighted average number of common shares outstanding - basic 216,709 216,276 Effect of dilutive securities: Restricted stock units 179 177 Performance share units 256 216 Stock options 58 320 Weighted average number of common shares outstanding - diluted 217,202 216,989 Net income per share - basic $ 0.34 $ 0.26 Net income per share - diluted $ 0.34 $ 0.25 Our calculation of diluted earnings per share includes the impact of the assumed vesting of outstanding restricted stock units, performance share units, and the exercise of outstanding stock options based on the treasury stock method when dilutive. The diluted earnings per share amounts exclude the effects of approximately 70,000 and 87,000 stock awards for the three months ended March 31, 2019 and 2018, respectively, as their inclusion would be accretive to earnings per share. |
Fair Value Measurement
Fair Value Measurement | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair value measurement | Fair value measurement We measure and record in the accompanying condensed consolidated financial statements certain assets and liabilities at fair value. U.S. GAAP establishes a hierarchy for those instruments measured at fair value that distinguishes between market data (observable inputs) and our own assumptions (unobservable inputs). The hierarchy consists of three levels: Level 1 - Quoted market prices in active markets for identical assets or liabilities; Level 2 - Inputs other than Level 1 inputs that are either directly or indirectly observable; and Level 3 - Unobservable inputs developed using our own estimates and assumptions, which reflect those that a market participant would use. We additionally hold other financial instruments, including cash and cash equivalents, receivables, accounts payable and debt. The carrying amounts for cash and cash equivalents, receivables and accounts payable approximated their fair values. The fair value of our total debt, based on the bid and ask quotes for the related debt (Level 2), totaled $2.98 billion at March 31, 2019, and $2.96 billion at December 31, 2018. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 3 Months Ended |
Mar. 31, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental cash flow information | Supplemental cash flow information The following table provides a reconciliation of cash and cash equivalents, as reported on our Condensed Consolidated Balance Sheets, to cash, cash equivalents, and restricted cash, as reported on our Condensed Consolidated Statement of Cash Flows (in thousands): Mar. 31, 2019 Dec. 31, 2018 Mar. 31, 2018 Dec. 31, 2017 Cash and cash equivalents $ 3,818 $ 135,862 $ 8,338 98,801 Restricted cash equivalents included in: Prepaid expenses and other current assets — — — 29,240 Cash, cash equivalents and restricted cash $ 3,818 $ 135,862 $ 8,338 $ 128,041 Our restricted cash equivalents consisted of highly liquid investments that were held within a rabbi trust and were used to pay our deferred compensation and SERP obligations. The following table provides additional information about cash flows related to interest and taxes (in thousands): Quarter ended Mar. 31, 2019 2018 Supplemental cash flow information: Cash refunds received from income taxes, net of payments $ (397 ) $ (2,799 ) Cash paid for interest $ 27,412 $ 30,128 |
Other Matters
Other Matters | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Other matters | Other matters Commitments, contingencies and other matters In the third quarter of 2018, certain national media outlets reported the existence of a confidential investigation by the United States Department of Justice Antitrust Division (DOJ) into the local television advertising sales practices of station owners. We have received a Civil Investigative Demand (CID) in connection with the DOJ’s investigation. The investigation is ongoing. Since the national media reports, numerous putative class action lawsuits were filed against owners of television stations (the Advertising Cases) in different jurisdictions. Plaintiffs are a class consisting of all persons and entities in the United States who paid for all or a portion of advertisement time on local TV provided by the defendants. The Advertising Cases assert antitrust and other claims and seek monetary damages, attorneys’ fees, costs and interest, as well as injunctions against the allegedly wrongful conduct. These cases have been consolidated into a single proceeding in the United States District Court for the Northern District of Illinois, captioned Clay, Massey & Associates, P.C. v. Gray Television, Inc. et. al., filed on July 30, 2018. At the court’s direction, plaintiffs filed an amended complaint on April 3, 2019, that superseded the original complaints. Although we were named as a defendant in sixteen of the original complaints, the amended complaint did not name TEGNA as a defendant. We could still be named as a defendant, however, in this or other related suits. We, along with a number of our subsidiaries, also are defendants in other judicial and administrative proceedings involving matters incidental to our business. We do not believe that any material liability will be imposed as a result of any of the foregoing matters. FCC Broadcast Spectrum Program In April 2017, the FCC announced the completion of a voluntary incentive auction to reallocate certain spectrum currently occupied by television broadcast stations to mobile wireless broadband services, along with a related “repacking” of the television spectrum for remaining television stations. None of our stations will relinquish any spectrum rights as a result of the auction, and accordingly we will not receive any incentive auction proceeds. The FCC has, however, notified us that 13 of our stations will be repacked to new channels. In general, television stations moving channels may have smaller service areas and/or experience additional interference; however, based on our transition planning to date, we do not expect the repacking to have any material effect on the geographic areas or populations served by our repacked full-power stations’ over-the-air signals. The legislation authorizing the incentive auction and repacking established a $1.75 billion fund for reimbursement of costs incurred by stations required to change channels in the repacking. Subsequent legislation enacted on March 23, 2018, appropriated an additional $1 billion for the repacking fund, of which up to $750 million may be made available to repacked full power and Class A television stations and multichannel video programming distributors. Other funds are earmarked to assist affected low power television stations, television translator stations, and FM radio stations, as well for consumer education efforts. Some of our television translator stations have been or will be displaced as a result of the repacking, and thus are eligible under the new repacking funds appropriation to seek reimbursement for costs incurred as a result of such displacement (subject to the translator locating an available alternative channel, which is not guaranteed). The repacking process is scheduled to occur over a 39 -month period, divided into ten phases. Our full power stations have been assigned to phases two through nine, and a majority of our remaining capital expenditures in connection with the repack will occur in 2019. To date, we have incurred approximately $19.8 million in capital expenditures for the spectrum repack project (of which $2.1 million was paid during the first three months of 2019). We have received FCC reimbursements of approximately $11.5 million through March 31, 2019. The reimbursements were recorded as a contra operating expense within our Spectrum repacking reimbursements and other line item on our Consolidated Statement of Income and reported as an investing inflow on the Consolidated Statement of Cash Flows. Each repacked full power commercial television station, including each of our 13 repacked stations, has been allocated a reimbursement amount equal to approximately 92.5% of the station’s estimated repacking costs, as verified by the FCC’s fund administrator. Although we expect the FCC to make additional allocations from the fund, it is not guaranteed that the FCC will approve all reimbursement requests necessary to completely reimburse each repacked station for all amounts incurred in connection with the repack. Reduction in Force Programs During the third quarter of 2018, we initiated reduction in force programs at our corporate headquarters and our Digital Marketing Services (DMS) business unit, which resulted in a total severance charge of $7.3 million which was recorded within the Cost of Revenues, Business Units - Selling and Administrative, and Corporate - General and Administrative Costs within the Statement of Income. The corporate headquarters reductions were part of our ongoing consolidations of our corporate structure following our strategic transformation into a pure play broadcast company. The reduction in force at our DMS unit is a result of a rebranding of our service offerings and unification of our sales strategy to better serve our customers. A majority of the employees impacted by these reductions will receive lump sum severance payments. As of the end of Q1 2019, we have a remaining accrual of approximately $4.1 million related to these actions, substantially all of which will be paid throughout the remainder of the year. Acquisitions On March 20, 2019, we announced that we entered into a definitive agreement with Nexstar Media Group to acquire 11 local television stations in eight markets, including eight Big Four affiliates for $740 million in cash. These stations are expected to bring additional geographic diversity to our existing station portfolio and add four additional key markets to our strong political footprint as the 2020 presidential election gets underway. The acquisition of these stations is contingent on the closing of the Nexstar Media - Tribune merger, which is expected to take place in the late third or early fourth quarter of 2019, and other customary closing conditions. We expect to finance the transaction through use of available cash and borrowing under our existing credit facility. In addition, on May 6, 2019, we also announced that we entered into definitive agreements to acquire the remaining interests that we do not currently own of the multicast channels Justice Network and Quest, two fast growing networks that leverage the increasing numbers of over-the-air viewers, for approximately $77 million in cash. We currently own approximately 15% of the multicast channels, and we account for our ownership interest as an equity method investment. Following the closing of the acquisition, we will consolidate all of the multicast channels financial results. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of presentation | 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, 2018. |
Use of estimates | The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from these estimates. Significant estimates include, but are not limited to, evaluation of goodwill and other intangible assets for impairment, business combinations, fair value measurements, post-retirement benefit plans, income taxes including deferred taxes, and contingencies. |
Consolidation | The condensed consolidated financial statements include the accounts of subsidiaries we control and variable interest entities (VIEs) if we are the primary beneficiary. We eliminate all intercompany balances, transactions, and profits in consolidation. Investments in entities over which we have significant influence, but do not have control, are accounted for under the equity method. Our share of net earnings and losses from these ventures is included in “Equity income (loss) in unconsolidated investments, net” in the Consolidated Statements of Income. |
Recent accounting standards | Accounting guidance adopted in 2019: In February 2016, the FASB issued new guidance related to leases which require lessees to recognize assets and liabilities on the balance sheet for leases with lease terms of more than 12 months. Consistent with previous GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily depends on its classification as a finance or operating lease. However, unlike previous GAAP–which requires only capital leases (renamed finance leases under the new guidance) to be recognized on the balance sheet–the new guidance requires both finance and operating leases to be recognized on the balance sheet. This update requires the lessee to recognize a lease liability equal to the present value of the lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term for all leases longer than 12 months. We adopted the guidance on January 1, 2019. The FASB provided companies with the option to apply the requirements of the guidance in the period of adoption, with no restatement of prior periods. We are utilizing this adoption method. We have also elected an accounting policy allowed by the guidance to not account for lease and non-lease components separately. Additionally, in adopting the guidance, we utilized the package of practical expedients permitted by the FASB, which among other things, allowed us to carry forward our historical lease classification. Lastly, as permitted by the guidance, we elected a policy to not record leases with an original lease term of twelve months or less on the balance sheet. Adoption of the guidance resulted in recording of new right-of-use asset and lease liability balances of $73.8 million and $91.8 million , respectively, as of the adoption date. The difference between right-of-use lease asset and lease liability balances was primarily due to previously accrued rent expense relating to periods prior to January 1, 2019. The new guidance did not have a material impact on our Consolidated Statements of Income, Comprehensive Income, Cash Flows or Equity. See Note 6 for additional information. New accounting guidance not yet adopted: In June 2016, the FASB issued new guidance related to the measurement of credit losses on financial instruments. The new guidance changes the way credit losses on accounts receivable are estimated. Under current GAAP, credit losses on accounts receivable are recognized once it is probable that such losses will occur. Under the new guidance, we will be required to estimate credit losses based on the expected amount of future collections which may result in earlier recognition of doubtful accounts. The new guidance is effective for public companies beginning in the first quarter of 2020 and will be adopted using a modified retrospective approach. We are currently evaluating the effect this new guidance will have on our consolidated financial statements and related disclosures. In August 2018, the FASB issued new guidance on the accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. The new guidance requires a customer in a hosting arrangement that is a service contract to follow the internal-use software guidance to determine which implementation costs to capitalize as an asset related to the service contract. The guidance can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. We plan to adopt the new guidance on a prospective basis beginning in the second quarter of 2019. In August 2018, the FASB issued new guidance that changes disclosures related to defined benefit pension and other postretirement benefit plans. The guidance removes disclosures that are no longer considered cost beneficial, clarifies certain existing disclosure requirements and adds some new disclosures. The most relevant elimination for us is the annual disclosure of the amount of gain/loss and prior service cost/credit amortization expected in the following year. Additions most relevant to us include disclosing narrative explanations of the drivers for significant changes in plan obligations or assets, and disclosure for cost of living adjustments for certain participants of our TEGNA retirement plan. The new guidance is effective for us beginning in 2020 and must be applied on a retrospective basis. Early adoption is permitted. In March 2019, the FASB issued new guidance related to the accounting for episodic television series. The most significant aspect of this new guidance that is applicable to us relates to the level at which our capitalized programming assets are monitored for impairment. Under the new guidance these assets will be monitored at the film group level which is the lowest level at which independently identifiable cash flows are identifiable. The new guidance is effective for public companies beginning in the first quarter of 2020 and is to be adopted prospectively. Early adoption is permitted. We do not expect this guidance to have a material impact on our consolidated financial statements and related disclosures. Revenue recognition: Revenue is recognized upon the transfer of control of promised services to our customers in an amount that reflects the consideration we expect to receive in exchange for those services. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. Amounts received from customers in advance of providing services to our customers are recorded as deferred revenue. The primary sources of our revenues are: 1) advertising & marketing services revenues, which include local and national non-political television advertising, digital marketing services (including Premion), and advertising on the stations’ websites and tablet and mobile products; 2) subscription revenues, reflecting fees paid by satellite, cable, OTT (companies that deliver video content to consumers over the Internet) and telecommunications providers to carry our television signals on their systems; 3) political advertising revenues, which are driven by even year election cycles at the local and national level (e.g. 2020, 2018) and particularly in the second half of those years; and 4) other services, such as production of programming and advertising material. |
Accounting Policies (Tables)
Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Disaggregation of Revenue | Revenue earned by these sources in the first three months of 2019 and 2018 are shown below (amounts in thousands): Quarter ended Mar. 31, 2019 2018 Advertising & Marketing Services $ 264,402 $ 282,939 Subscription 241,575 205,556 Political 2,704 7,606 Other 8,072 5,989 Total revenues $ 516,753 $ 502,090 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | The following table displays goodwill, indefinite-lived intangible assets, and amortizable intangible assets as of March 31, 2019 and December 31, 2018 (in thousands): Mar. 31, 2019 Dec. 31, 2018 Gross Accumulated Amortization Gross Accumulated Amortization Goodwill $ 2,605,863 $ — $ 2,596,863 $ — Indefinite-lived intangibles: Television and radio station FCC licenses 1,437,565 — 1,384,186 — Amortizable intangible assets: Retransmission agreements 133,847 (83,730 ) 121,594 (79,274 ) Network affiliation agreements 126,494 (34,383 ) 110,390 (30,802 ) Other 28,864 (9,533 ) 28,865 (8,882 ) Total indefinite-lived and amortizable intangible assets $ 1,726,770 $ (127,646 ) $ 1,645,035 $ (118,958 ) |
Investments and Other Assets (T
Investments and Other Assets (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Investments, All Other Investments [Abstract] | |
Schedule of Other Assets | Our investments and other assets consisted of the following as of March 31, 2019, and December 31, 2018 (in thousands): Mar. 31, 2019 Dec. 31, 2018 Cash value life insurance $ 51,592 $ 50,452 Equity method investments 18,426 22,960 Cost method investments 24,790 24,497 Deferred debt issuance costs 8,679 9,350 Other long-term assets 36,399 36,206 Total $ 139,886 $ 143,465 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Summary Long-term debt | Our long-term debt is summarized below (in thousands): Mar. 31, 2019 Dec. 31, 2018 Unsecured floating rate term loan due quarterly through June 2020 1 $ 50,000 $ 60,000 Unsecured floating rate term loan due quarterly through September 2020 1 150,000 165,000 Borrowings under revolving credit agreement expiring June 2023 20,000 50,000 Unsecured notes bearing fixed rate interest at 5.125% due October 2019 1 320,000 320,000 Unsecured notes bearing fixed rate interest at 5.125% due July 2020 600,000 600,000 Unsecured notes bearing fixed rate interest at 4.875% due September 2021 350,000 350,000 Unsecured notes bearing fixed rate interest at 6.375% due October 2023 650,000 650,000 Unsecured notes bearing fixed rate interest at 5.50% due September 2024 325,000 325,000 Unsecured notes bearing fixed rate interest at 7.75% due June 2027 200,000 200,000 Unsecured notes bearing fixed rate interest at 7.25% due September 2027 240,000 240,000 Total principal long-term debt 2,905,000 2,960,000 Debt issuance costs (14,154 ) (15,458 ) Unamortized premiums and discounts, net 649 (76 ) Total long-term debt $ 2,891,495 $ 2,944,466 1 Principal payments due within the next 12 months are expected to be refinanced on a long-term basis. As such, all debt presented in the table above is classified as long-term on our March 31, 2019 Condensed Consolidated Balance Sheet. |
Retirement Plans (Tables)
Retirement Plans (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Defined Benefit Plan Disclosure [Line Items] | |
Benefit costs | Pension costs, which primarily include costs for the qualified TRP and the non-qualified SERP, are presented in the following table (in thousands): Quarter ended Mar. 31, 2019 2018 Interest cost on benefit obligation $ 5,750 $ 5,150 Expected return on plan assets (6,575 ) (7,450 ) Amortization of prior service cost 25 50 Amortization of actuarial loss 1,500 1,250 Pension payment timing related charge — 6,300 Expense for company-sponsored retirement plans $ 700 $ 5,300 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Lessee, Operating Leases, Assets And Liabilities, [Table Text Block] | The following table presents lease related assets and liabilities on the Condensed Consolidated Balance Sheet as of March 31, 2019 (in thousands): Assets Right-of-use assets for operating leases $ 72,160 Liabilities Operating lease liabilities (current) 1 6,497 Operating lease liabilities (non-current) 84,259 Total operating lease liabilities $ 90,756 (1) Current operating lease liabilities are included within the other accrued liabilities line item of the Condensed Consolidated Balance Sheet. |
Future Rent Payments on Lease Liabilities | The table below reconciles future lease payments for each of the next five years and remaining years thereafter, in aggregate, to the lease liabilities recorded on the balance sheet (in thousands): Future Period Cash Payments Remaining in 2019 $ 7,017 2020 10,462 2021 11,965 2022 11,205 2023 10,462 Thereafter 73,719 Total lease payments 124,830 Less: amount of lease payments representing interest 34,074 Present value of lease liabilities $ 90,756 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (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 Balance at Dec. 31, 2018 $ (136,893 ) $ 382 $ (136,511 ) Other comprehensive income before reclassifications — 10 10 Amounts reclassified from AOCL 1,069 — 1,069 Total other comprehensive income 1,069 10 1,079 Balance at Mar. 31, 2019 $ (135,824 ) $ 392 $ (135,432 ) Balance at Dec. 31, 2017 $ (107,037 ) $ 114 $ (106,923 ) Other comprehensive income before reclassifications — 150 150 Amounts reclassified from AOCL 5,625 — 5,625 Other comprehensive income 5,625 150 5,775 Reclassification of stranded tax effects to retained earnings (24,845 ) — (24,845 ) Balance at Mar. 31, 2018 $ (126,257 ) $ 264 $ (125,993 ) |
Reclassification out of Accumulated Other Comprehensive Income | Amounts reclassified out of AOCL are summarized below (in thousands): Quarter ended Mar. 31, 2019 2018 Amortization of prior service credit, net $ (125 ) $ (100 ) Amortization of actuarial loss 1,550 1,350 Pension payment timing related charge — 6,300 Total reclassifications, before tax 1,425 7,550 Income tax effect (356 ) (1,925 ) Total reclassifications, net of tax $ 1,069 $ 5,625 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Our earnings per share (basic and diluted) are presented below (in thousands of dollars, except per share amounts): Quarter ended Mar. 31, 2019 2018 Net income $ 73,979 $ 55,187 Weighted average number of common shares outstanding - basic 216,709 216,276 Effect of dilutive securities: Restricted stock units 179 177 Performance share units 256 216 Stock options 58 320 Weighted average number of common shares outstanding - diluted 217,202 216,989 Net income per share - basic $ 0.34 $ 0.26 Net income per share - diluted $ 0.34 $ 0.25 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | The following table provides additional information about cash flows related to interest and taxes (in thousands): Quarter ended Mar. 31, 2019 2018 Supplemental cash flow information: Cash refunds received from income taxes, net of payments $ (397 ) $ (2,799 ) Cash paid for interest $ 27,412 $ 30,128 The following table provides a reconciliation of cash and cash equivalents, as reported on our Condensed Consolidated Balance Sheets, to cash, cash equivalents, and restricted cash, as reported on our Condensed Consolidated Statement of Cash Flows (in thousands): Mar. 31, 2019 Dec. 31, 2018 Mar. 31, 2018 Dec. 31, 2017 Cash and cash equivalents $ 3,818 $ 135,862 $ 8,338 98,801 Restricted cash equivalents included in: Prepaid expenses and other current assets — — — 29,240 Cash, cash equivalents and restricted cash $ 3,818 $ 135,862 $ 8,338 $ 128,041 |
Accounting Policies - Narrative
Accounting Policies - Narrative (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019USD ($)segmentmarketstation | Jan. 01, 2019USD ($) | Dec. 31, 2018USD ($) | |
Accounting Policies [Abstract] | |||
Operating segments | segment | 1 | ||
Reportable segments | segment | 1 | ||
Number of television stations | station | 49 | ||
Number of markets In which entity operates | market | 41 | ||
Right of use asset | $ | $ 72,160 | $ 73,800 | $ 0 |
Lease liability | $ | $ 90,756 | $ 91,800 |
Accounting Policies - Revenue (
Accounting Policies - Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 516,753 | $ 502,090 |
Advertising & Marketing Services | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 264,402 | 282,939 |
Subscription | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 241,575 | 205,556 |
Political | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | 2,704 | 7,606 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 8,072 | $ 5,989 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Intangible Assets and Goodwill (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Goodwill | $ 2,605,863 | $ 2,596,863 |
Goodwill, accumulated amortization | 0 | 0 |
Total indefinite-live and amortizable intangible assets | 1,726,770 | 1,645,035 |
Total indefinite-live and amortizable intangible assets, accumulated amortization | (127,646) | (118,958) |
Retransmission agreements | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Amortizable intangible assets | 133,847 | 121,594 |
Amortizable intangible assets, accumulated amortization | (83,730) | (79,274) |
Network affiliation agreements | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Amortizable intangible assets | 126,494 | 110,390 |
Amortizable intangible assets, accumulated amortization | (34,383) | (30,802) |
Other | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Amortizable intangible assets | 28,864 | 28,865 |
Amortizable intangible assets, accumulated amortization | (9,533) | (8,882) |
Television and radio station FCC licenses | ||
Goodwill and Intangible Assets Disclosure [Line Items] | ||
Indefinite-lived intangibles | 1,437,565 | 1,384,186 |
Total indefinite-live and amortizable intangible assets, accumulated amortization | $ 0 | $ 0 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Additional (Details) - WTOL and KWES $ in Millions | Jan. 02, 2019USD ($) |
Business Acquisition [Line Items] | |
Consideration transferred | $ 108.9 |
Working capital adjustment | $ 3.9 |
Finite-lived intangible assets, remaining amortization period | 7 years |
Goodwill, acquired during period | $ 9 |
Licensing Agreements | |
Business Acquisition [Line Items] | |
Indefinite-lived intangible assets acquired | 53.4 |
Retransmission And Network Affiliation Agreements | |
Business Acquisition [Line Items] | |
Finite-lived intangible assets acquired | $ 28.4 |
Investments and Other Assets -
Investments and Other Assets - Components of Investments and Other Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Investments, All Other Investments [Abstract] | ||
Cash value life insurance | $ 51,592 | $ 50,452 |
Equity method investments | 18,426 | 22,960 |
Cost method investments | 24,790 | 24,497 |
Deferred debt issuance costs | 8,679 | 9,350 |
Other long-term assets | 36,399 | 36,206 |
Total | $ 139,886 | $ 143,465 |
Investments and Other Assets _2
Investments and Other Assets - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Schedule of Equity Method Investments [Line Items] | ||
Equity method investments | $ 18,426 | $ 22,960 |
CareerBuilder | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity method investment retained after disposal, ownership interest (as a percent) | 17.00% | |
Equity method investment retained after disposal, fully diluted ownership interest (as a percent) | 10.00% | |
Equity method investments | $ 12,900 | $ 12,400 |
Captivate | ||
Schedule of Equity Method Investments [Line Items] | ||
Proceeds from sale of equity method investment | 16,200 | |
Pre-tax gain on sale of equity method investment | 12,200 | |
After-tax gain on sale of equity method investment | $ 9,200 |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Total principal long-term debt | $ 2,905,000 | $ 2,960,000 |
Debt issuance costs | (14,154) | (15,458) |
Unamortized premiums and discounts, net | 649 | (76) |
Total long-term debt | 2,891,495 | 2,944,466 |
Unsecured floating rate term loan due quarterly through June 20201 | ||
Debt Instrument [Line Items] | ||
Total principal long-term debt | 50,000 | 60,000 |
Unsecured floating rate term loan due quarterly through September 2020 | ||
Debt Instrument [Line Items] | ||
Total principal long-term debt | 150,000 | 165,000 |
Borrowings under revolving credit agreement expiring June 2023 | ||
Debt Instrument [Line Items] | ||
Total principal long-term debt | 20,000 | 50,000 |
Unsecured notes bearing fixed rate interest at 5.125% due October 2019 | ||
Debt Instrument [Line Items] | ||
Total principal long-term debt | $ 320,000 | 320,000 |
Stated interest rate (as a percent) | 5.125% | |
Unsecured notes bearing fixed rate interest at 5.125% due July 2020 | ||
Debt Instrument [Line Items] | ||
Total principal long-term debt | $ 600,000 | 600,000 |
Stated interest rate (as a percent) | 5.125% | |
Unsecured notes bearing fixed rate interest at 4.875% due September 2021 | ||
Debt Instrument [Line Items] | ||
Total principal long-term debt | $ 350,000 | 350,000 |
Stated interest rate (as a percent) | 4.875% | |
Unsecured notes bearing fixed rate interest at 6.375% due October 2023 | ||
Debt Instrument [Line Items] | ||
Total principal long-term debt | $ 650,000 | 650,000 |
Stated interest rate (as a percent) | 6.375% | |
Unsecured notes bearing fixed rate interest at 5.50% due September 2024 | ||
Debt Instrument [Line Items] | ||
Total principal long-term debt | $ 325,000 | 325,000 |
Stated interest rate (as a percent) | 5.50% | |
Unsecured notes bearing fixed rate interest at 7.75% due June 2027 | ||
Debt Instrument [Line Items] | ||
Total principal long-term debt | $ 200,000 | 200,000 |
Stated interest rate (as a percent) | 7.75% | |
Unsecured notes bearing fixed rate interest at 7.25% due September 2027 | ||
Debt Instrument [Line Items] | ||
Total principal long-term debt | $ 240,000 | $ 240,000 |
Stated interest rate (as a percent) | 7.25% |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) $ in Millions | Mar. 31, 2019USD ($) |
Revolving Credit Facility | |
Debt Instrument [Line Items] | |
Debt instrument, unused borrowing capacity, amount | $ 1,470 |
Retirement Plans - Narrative (D
Retirement Plans - Narrative (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Additional cash contribution to SERP and TRP for the remainder of the year | $ 10,700,000 | |
Pension lump-sum payment charge | $ 6,300,000 | |
Retirement Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Net pension plan obligation | 145,500,000 | |
Contributions to plan | 0 | 1,700,000 |
Additional cash contribution to SERP and TRP for the remainder of the year | 3,800,000 | |
Pension lump-sum payment charge | 0 | 6,300,000 |
SERP | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Contributions to plan | 900,000 | $ 26,700,000 |
Additional cash contribution to SERP and TRP for the remainder of the year | 6,900,000 | |
Accrued Liabilities | Retirement Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Net pension plan obligation | $ 7,900,000 |
Retirement Plans (Details)
Retirement Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Company's pension costs | ||
Pension payment timing related charge | $ 6,300 | |
Retirement Plans | ||
Company's pension costs | ||
Interest cost on benefit obligation | $ 5,750 | 5,150 |
Expected return on plan assets | (6,575) | (7,450) |
Amortization of prior service cost | 25 | 50 |
Amortization of actuarial loss | 1,500 | 1,250 |
Pension payment timing related charge | 0 | 6,300 |
Expense for company-sponsored retirement plans | $ 700 | $ 5,300 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Lessee, Lease, Description [Line Items] | |||
Weighted average remaining lease term | 11 years | ||
Weighted average discount rate | 5.40% | ||
Lease operating expense | $ 3.3 | $ 4.4 | |
Cash paid for lease rent | $ 2.7 | ||
Operating lease commitments, 2019 | $ 10.4 | ||
Operating lease commitments, 2020 | 9.9 | ||
Operating lease commitments, 2021 | 11.7 | ||
Operating lease commitments, 2022 | 10.9 | ||
Operating lease commitments, 2023 | 10.3 | ||
Operating lease commitments, thereafter | $ 73.9 | ||
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease term | 1 year | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease term | 15 years |
Leases - Lease Related Assets a
Leases - Lease Related Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Assets | |||
Right-of-use assets for operating leases | $ 72,160 | $ 73,800 | $ 0 |
Liabilities | |||
Lease liabilities (current) | 6,497 | ||
Operating lease liabilities (non-current) | 84,259 | $ 0 | |
Total operating lease liabilities | $ 90,756 | $ 91,800 |
Leases - Future Rent Payments (
Leases - Future Rent Payments (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 01, 2019 |
Leases [Abstract] | ||
Remaining in 2019 | $ 7,017 | |
2020 | 10,462 | |
2021 | 11,965 | |
2022 | 11,205 | |
2023 | 10,462 | |
Thereafter | 73,719 | |
Total lease payments | 124,830 | |
Less: amount of lease payments representing interest | 34,074 | |
Total operating lease liabilities | $ 90,756 | $ 91,800 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Amounts reclassified from AOCL | $ 1,069 | $ 5,625 |
Other comprehensive income, net of tax | 1,079 | 5,775 |
Retirement Plans | ||
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning Balance | (136,893) | (107,037) |
Other comprehensive income (loss) before reclassifications | 0 | 0 |
Amounts reclassified from AOCL | 1,069 | 5,625 |
Other comprehensive income, net of tax | 1,069 | 5,625 |
Reclassification of stranded tax effects to retained earnings | (24,845) | |
Ending Balance | (135,824) | (126,257) |
Foreign Currency Translation | ||
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning Balance | 382 | 114 |
Other comprehensive income (loss) before reclassifications | 10 | 150 |
Amounts reclassified from AOCL | 0 | 0 |
Other comprehensive income, net of tax | 10 | 150 |
Ending Balance | 392 | 264 |
Total | ||
Increase (Decrease) in Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning Balance | (136,511) | (106,923) |
Other comprehensive income (loss) before reclassifications | 10 | 150 |
Amounts reclassified from AOCL | 1,069 | 5,625 |
Other comprehensive income, net of tax | 1,079 | 5,775 |
Reclassification of stranded tax effects to retained earnings | (24,845) | |
Ending Balance | $ (135,432) | $ (125,993) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Loss - Reclassifications out of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Total reclassifications, before tax | $ 1,425 | $ 7,550 |
Income tax effect | (356) | (1,925) |
Total reclassifications, net of tax | 1,069 | 5,625 |
Amortization of prior service credit, net | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Total reclassifications, before tax | (125) | (100) |
Amortization of actuarial loss | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Total reclassifications, before tax | 1,550 | 1,350 |
Pension payment timing related charge | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Total reclassifications, before tax | 0 | 6,300 |
Total reclassifications, net of tax | $ 0 | $ 0 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Net income | $ 73,979 | $ 55,187 |
Weighted average number of common shares outstanding - basic (in shares) | 216,709 | 216,276 |
Effect of dilutive securities: | ||
Weighted average number of common shares outstanding - diluted (in shares) | 217,202 | 216,989 |
Net income per share – basic (In dollars per share) | $ 0.34 | $ 0.26 |
Net income per share – diluted (In dollars per share) | $ 0.34 | $ 0.25 |
Restricted stock units | ||
Effect of dilutive securities: | ||
Dilutive securities (in shares) | 179 | 177 |
Performance share units | ||
Effect of dilutive securities: | ||
Dilutive securities (in shares) | 256 | 216 |
Stock options | ||
Effect of dilutive securities: | ||
Dilutive securities (in shares) | 58 | 320 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Earnings Per Share [Abstract] | ||
Anti-dilutive stock options outstanding excluded from diluted earnings per share (in shares) | 70,000 | 87,000 |
Fair Value Measurement - Narrat
Fair Value Measurement - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of total long-term debt | $ 2,980 | $ 2,960 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Condensed Cash Flow Statements, Captions [Line Items] | ||||
Cash and cash equivalents | $ 3,818 | $ 8,338 | $ 135,862 | $ 98,801 |
Cash, cash equivalents and restricted cash | 3,818 | 8,338 | 135,862 | 128,041 |
Supplemental Cash Flow Information [Abstract] | ||||
Cash refunds received from income taxes, net of payments | (397) | (2,799) | ||
Cash paid for interest | 27,412 | 30,128 | ||
Prepaid expenses and other current assets | ||||
Condensed Cash Flow Statements, Captions [Line Items] | ||||
Restricted cash equivalents | $ 0 | $ 0 | $ 0 | $ 29,240 |
Other Matters - Narrative (Deta
Other Matters - Narrative (Details) | May 06, 2019USD ($) | Mar. 20, 2019USD ($)affiliatemarketstation | Apr. 30, 2017USD ($)phasestation | Mar. 31, 2019USD ($)market | Sep. 30, 2018USD ($) | May 09, 2019USD ($) | Mar. 23, 2018USD ($) |
Business Acquisition [Line Items] | |||||||
Number of stations assigned new channels | station | 13 | ||||||
Authorized reimbursement amount | $ 1,750,000,000 | ||||||
Authorized reimbursement amount, repacking fund | $ 1,000,000,000 | ||||||
Authorized reimbursement amount, repacking fund, full power, class a stations and multichannel distributors | $ 750,000,000 | ||||||
Repacking period | 39 months | ||||||
Number of repacking phases | phase | 10 | ||||||
Capital expenditures incurred | $ 2,100,000 | ||||||
FCC reimbursements received | 11,500,000 | ||||||
Amounts reimbursed as a percentage of total costs | 92.50% | ||||||
Severance charges | $ 4,100,000 | $ 7,300,000 | |||||
Number of markets In which entity operates | market | 41 | ||||||
Nexstar Media Group, Television Stations | |||||||
Business Acquisition [Line Items] | |||||||
Number of television stations acquired | station | 11 | ||||||
Number of markets In which entity operates | market | 8 | ||||||
Number of Big Four affiliates | affiliate | 8 | ||||||
Consideration transferred | $ 740,000,000 | ||||||
Number of markets in which an entity operates, additions | market | 4 | ||||||
Subsequent Event | |||||||
Business Acquisition [Line Items] | |||||||
Capital expenditures incurred | $ 19,800,000 | ||||||
Subsequent Event | Justice Network And Quest | |||||||
Business Acquisition [Line Items] | |||||||
Consideration transferred | $ 77,000,000 | ||||||
Multicast Channels | |||||||
Business Acquisition [Line Items] | |||||||
Ownership percentage of multicast channels | 15.00% |