TEGNA (TGNA) 8-K TEGNA Completes Acquisition of 11 Local Television Stations from Nexstar Media Group

Combined Historical Financial Data

Due to the effect that the Recent Acquisitions¹ have on our financial results, we are presenting historical financial data for revenues and Adjusted EBITDA on a combined basis to provide more meaningful period over period comparisons of our financial results. The following tables set forth a summary of historical financial data for the six months ended June 30, 2019 and for the twelve months ended December 31, 2018 and interim quarterly data within those periods for TEGNA Inc. (the “Company”) on a combined basis giving effect to the Recent Acquisitionsas if they were all completed on January 1, 2018. These amounts are not necessarily indicative of what our results would have been had we completed the acquisitions on January 1, 2018, nor is it reflective of our expected results of operations for any future periods. For example, revenues and Adjusted EBITDA amounts do not include any adjustments for expected synergies. The acquisitions of the WTOL/KWES broadcast stations and the multicast networks Justice Network and Quest occurred on January 2, 2019 and June 18, 2019, respectively. The as reported revenues and Adjusted EBITDA amounts presented below include the results of these acquisitions subsequent to their acquisition dates.

The summary of unaudited combined historical financial data is derived from the addition of information for the fiscal year ended December 31, 2018 contained in the Company’s financial data combined with the financial data for the Recent Acquisitions acquired for the year ended December 31, 2018 and for the six months ended June 30, 2019. This information is only a summary and we assume no responsibility for the accuracy or completeness of the information provided with respect to the Nexstar/Tribune Stations, the Dispatch Stations, or the other companies and businesses acquired pursuant to the Recent Acquisitions for periods prior to the completion of the acquisition of such company or business. Furthermore, the historical financial data for Combined Revenues and Combined Adjusted EBITDA is not pro forma information prepared in accordance with Article 11 of SEC regulation S-X, and the preparation of information in accordance with Article 11 would result in a significantly different presentation.

Combined Adjusted EBITDA, a non-GAAP measure, is defined as net income from continuing operations attributable to the Company on a combined basis giving effect to the Recent Acquisitions as if they were completed as of January 1, 2018, as applicable, before (1) provision for income taxes, (2) interest expense, (3) equity income (loss) in unconsolidated investments, net, (4) other non-operating items, net, (5) severance expense, (6) acquisition-related costs, (7) spectrum repacking reimbursement and other, (8) depreciation and (9) amortization. Management and the Company’s Board of Directors use the Adjusted EBITDA non-GAAP measure for purposes of evaluating the Company’s performance. Furthermore, the Leadership Development and Compensation Committee of our Board of Directors uses such measure to evaluate management’s performance. The Company, therefore, believes that the use of this non-GAAP measure provides useful information to investors and other stakeholders by allowing them to view our business through the eyes of management and our board of directors, facilitating comparisons of results across historical periods and focus on the underlying ongoing operating performance of our business.

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¹ WBNS TV, Inc., the owner of WBNS-TV, the CBS broadcast affiliate in Columbus, OH; VideoIndiana, Inc., the owner of WTHR, the NBC broadcast affiliate, and WALV-CD, the MeTV broadcast affiliate, each located in Indianapolis, IN; and RadiOhio Incorporated, the owner of radio broadcast stations WBNS (AM), WBNS-FM and the Ohio News Network (ONN), each located in Columbus, OH (collectively, the “Dispatch Stations”); WTIC / WCCT in Hartford-New Haven, CT, WPMT in Harrisburg-Lancaster-Lebanon-York, PA, WATN / WLMT in Memphis, TN, WNEP in Wilkes Barre-Scranton, PA, WOI / KCWI in Des Moines-Ames, IA, WZDX in Huntsville-Decatur-Florence, AL, WQAD in Davenport, IA-Rock Island-Moline, IL, KFSM in Ft. Smith-Fayetteville-Springdale-Rogers, AR (collectively, the “Nexstar/Tribune Stations”; broadcast stations WTOL in Toledo, Ohio and KWES in Midland Odessa, TX; and multicast networks Justice Network and Quest (such companies and businesses including Dispatch Stations and Nexstar/Tribune Stations being referred to collectively as the “Recent Acquisitions”).

TEGNA Inc.
Unaudited, in thousands of dollars
Combined Revenues
	2019		2019		2019
	Q1		Q2		YTD
Advertising & Marketing Services	$	316,283	$	343,999	$	660,282
Subscription	278,103		272,722		550,825
Political	2,969		4,820		7,789
Other	7,600		8,969		16,569
Total combined revenues	$	604,955	$	630,510	$	1,235,465
	2019		2019		2019
	Q1		Q2		YTD
Total revenues, as reported (GAAP basis)	$	516,753	$	536,932	$	1,053,685
Recent Acquisitions	88,202		93,578		181,780
Total combined revenue (non-GAAP basis)	$	604,955	$	630,510	$	1,235,465
	2018		2018		2018		2018		2018
	Q1		Q2		Q3		Q4		YTD
Advertising & Marketing Services	$	335,696	$	340,023	$	321,834	$	338,944	$	1,336,497
Subscription	241,286		245,537		244,410		256,350		987,583
Political	9,840		33,204		72,519		165,207		280,770
Other	6,668		8,746		6,130		8,261		29,805
Total combined revenues	$	593,490	$	627,510	$	644,893	$	768,762	$	2,634,655
	2018		2018		2018		2018		2018
	Q1		Q2		Q3		Q4		YTD
Total revenues, as reported (GAAP basis)	$	502,090	$	524,080	$	538,976	$	642,136	$	2,207,282
Recent Acquisitions	91,400		103,430		105,917		126,626		427,373
Total combined revenue (non-GAAP basis)	$	593,490	$	627,510	$	644,893	$	768,762	$	2,634,655

TEGNA Inc.
Unaudited, in thousands of dollars
Combined Adjusted EBITDA
	2019			2019			2019
	Q1			Q2			YTD
The Company net income from continuing operations (GAAP basis)	$	73,979		$	79,955		$	153,934
Plus: Provision for income taxes	22,774			24,879			47,653
Plus: Interest expense	46,385			46,327			92,712
(Less) Plus: Equity (income) loss in unconsolidated investments, net	(12,028		)	615			(11,413		)
Plus (Less): Other non-operating items, net	1,539			(8,964		)	(7,425		)
The Company operating income (GAAP basis)	132,649			142,812			275,461
Plus: Severance expense	—			1,452			1,452
Plus: Acquisition-related costs	3,911			5,208			9,119
Less: Spectrum repacking reimbursements and other	(7,013		)	(4,306		)	(11,319		)
Plus: Depreciation	14,917			14,533			29,450
Plus: Amortization	8,689			8,823			17,512
The Company Adjusted EBITDA (non GAAP basis)	153,153			168,522			321,675
The Recent Acquisition Companies Adjusted EBITDA	22,913			27,913			50,826
Combined Adjusted EBITDA	$	176,066		$	196,435		$	372,501
	2018			2018			2018			2018			2018
	Q1			Q2			Q3			Q4			YTD
The Company net income from continuing operations (GAAP basis)	$	55,187		$	92,512		$	92,826		$	160,815		$	401,340
Plus: Provision for income taxes	20,385			27,755			13,789			45,438			107,367
Plus: Interest expense	47,725			49,104			48,226			47,010			192,065
(Less) Plus: Equity (income) loss in unconsolidated investments, net	1,238			(15,547		)	(771		)	1,288			(13,792		)
Plus (Less): Other non-operating items, net	12,480			311			214			(1,509		)	11,496
The Company operating income (GAAP basis)	137,015			154,135			154,284			253,042			698,476
Plus: Severance expense	—			—			7,287			—			7,287
Less: Spectrum repacking reimbursements and other	—			(6,326		)	(3,005		)	(2,370		)	(11,701		)
Plus: Depreciation	13,471			13,861			14,262			14,355			55,949
Plus: Amortization	6,782			7,962			8,047			8,047			30,838
The Company Adjusted EBITDA (non GAAP basis)	157,268			169,632			180,875			273,074			780,849
The Recent Acquisition Companies Adjusted EBITDA	22,183			35,163			35,669			52,085			145,100
Combined Adjusted EBITDA	$	179,451		$	204,795		$	216,544		$	325,159		$	925,949