Earnings call transcript Q2 2023

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Operator

Thank you for standing by, and welcome to the Second Quarter TEGNA Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentations, there'll be a question-and-answer session. [Operator Instructions] As a reminder, this call is being recorded.

I would now like to turn the call over to your host, Ms. President and Vice Relations. Senior Heskett, of Investor Finance Julie Please go ahead.

Julie Heskett

Lougee; morning, Good our our Dave results, Victoria and and After performance second stand-alone we'll TEGNA's you. will President our review Harker, quarter CEO, discuss Today, to questions. and webcast. open welcome Thank the financial for CFO, and conference and outlook. TEGNA's and that, call call

as opportunity this Exchange had the to second well morning Commission, the you've Form filed review results. Hopefully, X-K earnings and with Securities as our quarter our

tegna.com. If copy you have of the not yet seen release, a it's available on

Before remind differ. in filings. call and conference we to that I'd get forward-looking actual our SEC our started, them like outlined Factors you that statements, are includes webcast to may this may results cause and differ

includes also certain measures. financial non-GAAP presentation This

of reconciliations release. press measures those in most to measures GAAP direct provided have We comparable the the

that, turn With me let call over Dave. to the

Dave Lougee

everyone. and Thank Julie, good you, morning,

reflect shareholders. second a our advertising our in trends for continuing results sharp underlying quarter this delivering a value and momentum for sequential and subscription We compared the improvement TEGNA's first. saw quarter revenue to focus achieved quarter second record on

which detail to call results, Importantly, underpin outline ability strong TEGNA's with create well. as a and I'll shareholders, value balance along our now little later for the sheet our our solid in

in that to the reported earnings initial or which is approved on Board agreement during failed our $XXX pending commence early - million, merger shareholders, share November. we TEGNA's after XQ - our accelerated steps the the announced Building agreement, to of return to accumulated expected a are from capital ASR repurchase merger second today,

announced by currently the in than dividend million previously General. commitment in which The also to this per billion the reduction, to a and in termination $XXX declared was regular Board This will million ASR the quarter previously shares share increase $X.XXXXX paid $X.XX fee share, announced our XX% of Standard May. including year more $XXX underway bring quarterly

Taken over from on our record shareholders shareholders returning our track disciplined manner. acting together, demonstrate past to thoughtful and of we've months the to feedback and these with capital commitment a in received engagement several actions our continuing

continue we update a year-end. anticipate longer-term providing to capital As refine detailed allocation by we more priorities, our

to last X% the detail. highlights of due will year-over-year, cycle. like cover exclusively some and reduction quarter topics Company more provide year then I'd mid-term almost the results, Next, revenue of second from election of these down was our to revenue in Total from political the Victoria

down revenue political, Excluding was just slightly.

and grew Subscription revenue was X% second quarter record year-over-year. a

the a last true-up. first disruption quarter normalized quarter a well a second results as a lapped more growth in with As distributor trend. accounting temporary reminder, year reflect as Therefore, an

flows, reprice continues improving of revenue provide further and by XX% year, contractual into clarity we rate this approximately predictable supported Later to subscribers, increases. expect subscription stable to outlook. traditional our our Our cash

Despite of broader X% AMS first than revenue macroeconomic challenges, quarter year. finished down last second quarter. advertising revenue the quarter to the trends were compared sequentially the better

last investor loss national a our we advertising when call. were underlying down for digits However, of discussed low-single single adjusting Premion account the on trends

in growth largest is and has consecutive did it our strong generating AMS, in as Automotive, doing so recovered within again second fourth quarter for year-over-year and category its is the and as quarter steadily the strong well. it QX

cutting. a of from favorable cord reach impact improved audience Another for is broadcast from to accelerating advertising factor cable shift in the trends broadcast,

is any interconnects we don't the recent many MVPDs in cable local of reach homes dramatically many down the their over-the-air subscriber mechanism. that And cable in markets virtual individual as satellite replaced While lose antenna and and years. our by well traditional have as in viewer are market homes, replacement

- dollars will that dramatic of will broadcasting cable will be local reach growing compared dollars and the And this to recognizing local political and increasingly impact between as the well. are that Advertisers delta follow.

our uniquely will growth on Premion Local it to in and OTT local cables local Premion to win. Premion, revenue, benefit is industry-leading from reach. where and focus strong continues positioned too growth, declining OTT platform, revenue first-to-market advertising continues its

in to following an mentioned, our of capital, a million $XXX to our quarter capital a commence initial in additional are after and allocation been early capital program months, feedback approved robust several accumulated has over from capital shareholders allocation, Board of share earnings as a repurchase investor return review incorporation to turning accelerated past the process Now reported the that's third I November. priorities of 'the the form

agreement $XXX we million entering place merger termination second after quarter. current in ASR, to of end took third steps capital June the follows to This shareholders complete which return one expect by the we the immediately the to by the ASR initial a into in

the The more completion next fee, of the of the $X.XX the steps, transfer ASRs result termination us satisfy retiring than two and year. first of deal in quarter of these to stock will our approximately shares the end by billion

end use of cash position with both an Even net balance XXXX, to disciplined in and performance free with year we under operating leverage Strong flow the programs expect industry-leading after sheet. us ASR XX.

are Moving on generating focused shareholder strong value. laser forward, we

and priorities Board consistently long-term taken a our has management methodical to strategic and capital team allocation. Our approach

for next near strive on as We these refining durable focused both to our are company, we generate standalone and shareholders actively and the growth as attractive, a term. TEGNA its on for chapter topics, thinking long our evaluate

industry have inorganic we making forward-thinking competitive a team than continues and I and Since record positioning, our investments the share amidst strong outlook. to termination initial evolve. have a backdrop augmented Board as track This returns and that in to of management an reductions, our our signal $X.XX on sent disciplined commit more that mentioned, billion and actions generated strong of organic TEGNA's merger just strong to believe agreement,

again We we these disciplined through are in a but fantastic a position today very assess lens. longer-term opportunities, as

do industry-leading is performance consider We our returning sheet strong, shareholders. remains us both. to while accretive balance financial to allowing Our and opportunities capital can

the we're for about excited ahead, look go-forward TEGNA. we opportunities As

including this on brand national dedicated VERIFY, our increase seen highlights disinformation, on Now across that the subscriber which and has channels, a a quarter, ended followers past update approximately YouTube, X.X growth year. combats with second you quarter past in to XXX% its few the over from operating strategic nearly various billion

launched TV apps Roku, million, we've quarter. million platforms, all streaming in platforms station we most our of of now stations are and AppleTV. We an testing or and VERIFY, XX% year-over-year, launch on begun apps And for XXX X.X by increase But Samsung, back on apps and for LG, our these and I Fire all additional Chromecast have AppleTV minutes to way, stations. billion. generating I expect the for third all June, to should now apps a In streaming, said not X.X the when

the well, our with shows which podcast sports local leading On, for network YouTube teams and new total and network, views downloads monthly million Locked time quarter. video league video four of and on year-over-year. The views grew first for first XX% professional a and XX the milestone major now in daily sports audio exceeded most May. college In hit is listens XXXX, all months in programs, the as six

local reflects coverage we ensuring we play communities in role of storytelling all we As the important serve. take the and our editorial broadcasters, seriously

TEGNA program. joined completed inclusive quarter, employees our the who training last During innovative, new December year since journalism content all of have

- We fact, take important right this - where now taking XX to taking in to summer, opportunities. place and more professional part in than grants of colleagues they can our networking attend awarded and displace develop journalism conferences

fact Days Reporters example, X,XXX project idea the which an Shootings, launched a of As network during TEGNA This Investigative of for opportunities the value a last at shootings there during the reporters X titled, from the in X,XXX Conference, those investigative year's Editors that - the and collectively developed same XXXX. quarter. the title second in that comes project time US period were this

are the solutions, stations not followed that's of issue being families than on violence shootings, these the importance project, ever more communities this but of steps part hearing eight taken As find to in obviously country on and before. up an gun critical fund only looking that

difference investigations Company. our every matters at center a newsrooms purpose that news people's of lives and our and that and make are a the as one of in each Delivering impactful

fulfill We are the the engaged of enable proud that very of mission day. us and our resilience our to determination employees every

I'll call Victoria. now with turn the And over to that,

Victoria Harker

everyone, morning, us. for Good thanks Dave. Thanks, joining and

heard, already as second revenue, sequential record in subscription services quarter detail as and more achieved well advertising revenue you've shortly. marketing in improvement we which As I'll cover

for of key outlook all we financial the achieved successfully provided. also metrics previously We

during guidance, the as down quarter-ahead merger I last Before our accumulated just results drill return share investor on our regarding quarter I'd continued like process, second during additional capital call. of information our committed we some financial and to

to expect early mentioned million quarter off an following allocation our As review TEGNA's earnings few ASR November. and months, shareholders priorities over past reported approved the capital feedback in you, $XXX of our after incremental incorporating which are earlier, program, ongoing we Board Dave from third our kick

will This of announced our previously the completion follow program. million $XXX ASR

is well that already underway know, to the is As you and end be the quarter. completed by third of program expected

reminder, of a agreement. termination addition the after ASRs merger announced increase in both these As the XX% immediately the to are of that we dividend

outstanding approximately XX.X million Our current June which $XXX by the representing of XX% X. program on ASR value, ASR million reduced delivered shares was shares, program

the for the of purposes, weighted of which second a approximately shares, average June. quarter X million just share impact diluted modeling month during was For the was reduction

by transfer which outstanding million June, approximately or agreement, remaining million approximately us, mentioned, of X.X was Dave as termination million the our be the captured stock further contractually TEGNA required Standard million $XXX to of the shares reducing the merger the during was quarter. XX.X including XX% shares full reduction share in their The quarter, fee, during common Also, by will program shares. X General's satisfied third settlement of

that month's reduction full diluted For will for The average share share million the modeling a weighted quarter. the of reduction just million be transaction third is captured approximately shares in one X of X.X impact worth. purposes,

settlement already the year May, of in taken has both ASR and fee in So billion than termination to merger TEGNA committed altogether, merger share since in repurchases more the of this through the shares. programs agreement $X.XX termination

approximately March of this the prices, shares shares or result be retired market XX to outstanding. commitment, XXXX on of based by XX than expect a of As current to million XX% million more we end

this, $XXX as second we proceeds used received Beyond like on which will down a also These the they've sold approximately also be million. program, month MadHive, our reflected been that for ASR I'd $XX hand. cash we in fund last mention of the million, already to to investment in portion

efforts highlight in these differentiates of environment. balance sheet, the macroeconomic the further current our strength which us of All

no aware, As with are very a near-term very of a all with average basis. is our attractive we of on rate bond fixed positioned you're X.X% until March weighted maturities well and debt XXXX,

billion debt We of and ended cash with total the of million. quarter $X.X $XXX

X.XXX, Net XXXX. at into X.XX Xnd. covenant quarter left reminder, slightly revolver, of a billion that a million $XXX than we June our financial the ASR leverage higher to which the the applies leverage is ended initial end until only doesn't at As expire $X.X undrawn quarter, cap off of our a the of we first entered as where result program on August

the on as our TEGNA's financial comments let's at drivers a results. operating with our our Now, drivers you performance on to into non-GAAP take second of focused business today basis, performance. trends the provide look My primarily visibility consolidated financial well quarter are of a as

all can our of in release. prior-period find reported comparatives data our and You press

year. second to lower X% political down cycle revenue quarter X% the almost down total compared revenue, from last was election XXXX. excluding quarter the the of total revenue exclusively mid-term second For political year-over-year, revenue company was due to When

year-over-year, quarter declines. was by rate partially second X% by subscription offset increased subscriber tied record increases mid-single-digit rate revenue, Our escalators, driven contractual which to subscriber

Dave last earlier, distributor the experienced As interruption growth year. first quarter the against lapped favorable comparison an in with mentioned a

normalized rate. result, a growth run a this As better quarter's reflects rate

quarter, have of As by for last an subscribers end this we XX% year. we traditional our mentioned the up of additional renewal

collectively On year. look and equation, our agreements to of XX% subscribers, of comp our until ABC the which side approximately account for with the the Big of Four end reverse renew we NBC, this also

As TEGNA's than revenues free our X-year which XX% a a more produce flow, total high-margin reminder, cash and of basis. now subscription comprise annuity-like on EBITDA revenues, and political

the for in compared advertising X% the significant down behind trends performance showed macroeconomic AMS year the call. quarter the single adjusting underlying Next, quarter our the low were quarter trends I'll account national second we challenges, earnings the when single drivers revenue and advertising finished unpack discussed quarter of first. AMS on over and quarter's second our a Premion results. down last second of that last revenue improvement Despite loss in digits to

see excited year-over-year automotive, Within AMS, category the we're our consecutive within continued quarter. largest AMS, growth advertising to strong for fourth generating

the current and travel and year-over-year Categories retail. improvement headwinds facing services, We include environment healthcare also strength telecom, macroeconomic continue in to restaurants, and home see in tourism. media,

Premion with advertising the focused channels Now, momentum proven in TV turning local. on unique space fast-growing streaming sales established and to Premion; continued its

Premion spend, insights of IQ, During similar introduction single as campaign delivery loss efficacy QX comprehensive new unfavorable in large the transparency. national conversion the That and impacted as the including delivered to was providing into that well by Premion dashboard outcome metrics last advertiser year-over-year down customer reporting quarter, sales quarter attribution, innovations, a integrates said, of of a for improved comparisons the due Premion account. to advertising

we've mentioned, As is digits strong, the local on primary revenue Premion focus uniquely growth revenue win. finished OTT it up local positioned is Premion's to this in double where quarter.

from General. XX% quarter, expenses year-over-year, expenses quarter; by for to GAAP fee million, $XXX Standard down termination million for driven the second merger the $XXX turning Now, the operating were of

with we've termination adjusted - professional expense, expense. fee both recurring merger-related including professional The and merger fee previous contra in non-GAAP consistent fees results our to as reporting. our way operational the We've merger-related the fees results, in is best termination reflected reflected reflect our

Non-GAAP year, operating higher driven expenses million, by were quarter compared X% fees. $XXX to programming last the up second

Excluding down when were year, X% quarter operating and operational expenses efficiencies. prudent due expense for management last ongoing the to to programming fees, non-GAAP compared

down Our and revenue of by absence million programming quarter political higher EBITDA adjusted costs. was second of $XXX year-over-year, XX% driven high-margin the

sheet cash generate durable management to by our the strong flow thoughtful revenues free XXX subscription and time. our million high continue - $XXX of quarter, We primarily driven of during margin over balance

today's outlook, our release, on turning remain metrics. of quarter meet third guidance provided track as in saw ahead and Now all and key guidance for full-year the we on to you metrics financial quarter our to key

the the second impact program As leverage reflect a move anticipated reminder, will XXXX a to net ASR of announced today. up we bit

We expect on just below to leverage. XX end the year

third-quarter To expectations, through few a our let's help guidance near-term metrics. walk model financial

a of high-margin cycle quarter to election comparable we the the political year. last reminder, in absence revenue disproportionately from a basis expect on be the As impacted by third $XX million of mid-term

third by the expect driven primarily the revenue. digits to down absence we quarter, year-over-year, For Company total be revenue double low of political by

We expect by subscription low-single in be XXXX, digit third range to higher programming quarter operating increase percent to costs, the associated single-digit programming increased the in third When quarter revenue. we percent the compared expenses driven year-over-year. down low operating expenses project quarter third excluding to with expenses

for can and a presentation our metrics our investor to our comparisons find guidance in turning elements, XXXX Now full-year our website. on as reminder, you actuals XXXX these

in year, $XX $XX range the in million. is expected corporate For is expense be $XX to to million Depreciation million. the of range of $XX be to to expected the million

Amortization range of Interest million. is the million. is to expected in in million be the of projected $XXX range $XX million to to $XXX to $XX be expense

XX.X%. We expenditures rate range capital forecast to tax of the XX.X% expect We in effective million an range $XX in million. $XX the to of

launched which to As the the we've mentioned, will planned year $XXX program, we million be ASR reflect for leverage of are updating this later guidance impact the second our year. net

as of this expect XXXX mentioned, leverage of actions end result allocation our year. with we XX, as result, all just a taken a below Dave net together As capital to

And to now we'll with Q&A. that, turn

Operator

Dan [Operator line from Instructions] Our comes Benchmark the Company. Kurnos of first question The of

Your line open. is

Dan Kurnos

good thanks, morning. Great,

the real understand QX. want Just so sure the we some Victoria, kind in set this after way reverse at one end fees? September just takes. next right said of to of of clean Is Most the that to on no there I year. and noise side, I about and the comes end is level at then you've you one about. benefit quarter subscription, is XX% up think the renewal subscription to of sort year, the was of that technically at that make year. on think the There of got talked And you a And the the XQ end puts to

Dave Lougee

earlier. that's Dave, magnitude, of one year-end exactly one much reverse Dan, side, the larger in it's And comp up the on than order Hi, at right. is the

Dan Kurnos

range, that in little in assessment? Dave, sub-expectations, in QX, like noise of in terms hearing still sounds to fair Right. you're it's mid-single expected a fall And it sort digit - of is terms that but bit of your a

Dave Lougee

Yeah, been digit that in - it's very months right. actually in recent stable number, that's mid-single that in

Dan Kurnos

back could And remarks, then and to clean prepared at think And - share you have just balance were very I obviously, the what your look balance, sheet. - go Dave. perfect. accretive to they your I'm was I a a Okay, for, ASR. ability repurchase wanted super potentially surprise, incremental just guys to opportunity, it certainly hoping ASR welcome investors

there? much still what diversification, out So, guess just be your on flex of dry undervalued matter on that magnitude much of balance I thought what's the you really you'd leave how for stock as back I'm levels? perceive at kind understand, of table what's sheet willing How powder to a the trying to order desire to you it does process buying do whatever or very you, continue like lot

Dave Lougee

I the question, appreciate Dan.

So, definitely about in want very a leverage having we've conservative to much What on trying our swings. taking some before return. ability market are really some low don't and great say that We I'm is capital a have that proven frankly especially that talking to great this Premion sheet our to pretty example. we're big a is signaling be I position. that things do like balance

from Frankly, we spend the ground didn't - up, built was it organically right.

we the made money we So, as grew.

as do to that things will some our is we do So, - - it to but sorry organically acquisitions of the the impact some may I'm and about make anytime all the picture. financial will we not we M&A M&A - trying sense, bolt-ons - I'm And definitely have soon. be amount about well signal, there in I'm larger as not small bolt-on sense, makes flexibility major have swings trying if that all tremendous may but saying small a we flexibility, at

Victoria Harker

always And flow accretive free reminder, a Dan, past just cash done when larger have EPS we as a fashion. we've in quick the M&As, and in even done very

So, have think mode. ability to to get flex we quickly. back has sheet we very our And current I up our the that with and right have been investment balance the levels historically

Dan Kurnos

Yeah, well, those I days remember Victoria.

you thank - So

Dave Lougee

I disciplined - a the proud that, on and said a had how obviously on the capital add the to machine in like use of we - have to returns shareholder. Company as I prior to comments, To very terms to to very best add we're to our we acquisition think give process, strategic that, I in guess, best of a

for is M&A table talked being, a from we've regulatory off the Broadcast at the about time as standpoint. length,

So, you shareholders. to - the the ASR of that that's end capital not is returning signaling

I the have return going back process, will. been our capital all if of said, like year-end on, engines the - think But a of future. a we're shareholders back you part to strategic I at through now turned key is

Victoria Harker

I remarks, Dave both as just of shareholder in of the his merger. value not And mean, during cash we that ASR creation pendency accumulated the the really said an did program for acknowledgment deploy

is replacing allocation ongoing So, an strategy. instead not or of capital there

Dan Kurnos

Got it. it. Appreciate thank you. Perfect,

Operator

please. moment, One you. Thank

line Our Craig Huber comes Huber from of next of question the Research.

Your line is open.

Craig Huber

down Great, little seems Do could quarter that low-double further just Dave, of bit on sort here you - sorry, revenue that the revenue digits, right? I thank that if the comment infers a like it second down on low-single you. Maybe have X%. for to guess X% outlook I ad about for -

Dave Lougee

sorry, say or you second I'm you second Craig, quarter? the the did third said Sorry, - quarter

Craig Huber

quarter. third sorry, - Third

- trends. right, quarter. see in just outlook it seems down about infer your current that maybe the what ad seems you third Third quarter chat I the X%, have X% like to Do to quarter,

Dave Lougee

on no, se given would a But with that quarter. think that. AMS the we I No, don't not agree we per haven't guide - in

Craig Huber

then than you're You're suggesting? faring that better

Victoria Harker

Yes.

Dave Lougee

Yes.

Craig Huber

revenue the good. you're right clarify abnormally retrans on first should Okay, just more in of then a second-quarter What's number. further now? to saying here, quarter was number a as underlying going high, true people And your use

Victoria Harker

Yes, that's correct.

Craig Huber

you. Thank great. Okay,

Operator

you. please. Thank moment, One

from of Barrington the Research. James line line Again, Mr. Our of next Goss is open. comes Goss, question your

James Goss

you sort on of side terms this a to on bit programming getting deck little factor up, of might better coming tie-in retrans, the the and the made value I a you new you station a that by on from local sort be spending who creating fees? more toward have station of economic of renewals Thank contributing programming retrans in sense, there you you but apps could maybe you streamers streaming in net argument? sense relief you. you're a comments - are fees any programming the some retrans access are do wall hitting be arguing know might less you some or And of and of broader gives getting A terms maybe the you about in some

Dave Lougee

Jim. first Well, all, hi of

quite going me question take first that I then, right. the Let relates first But restate you retrans. relative on it the apps, to and additive, first question completely on I'm to follow second streamers the as it's our to to ask didn't own question.

So, we're homes, right. - these are really focused on the cord never

service. really our us in any of product ad we're access don't don't it So and kind - even homes to dollars - that have gives

the money that's very of the is but So, audience today, is that. value small fast. The growth

pretty distribution that look that we're long look strategic And options continue so, how at might to and what we think, agreements like. to, on accelerate And we the I through might term. on bullish will

until for followed again? on Could question the on Jim, I me, restate asked talked - you you you streamers. retrans, your you first Now, about that

James Goss

programming. of could years might there reduction way services any a new - allocation away, spending toward be and like the go were wasn't streamer it I'm you it same grows say, paying is Okay, of to - some by be it thought. launched do revenues, that time the - better ago you that when maybe provide side, networks big wondering, And goes of your it services. couple focus base the streaming on obviously the programming a that might the tougher retrans increases companies to there most seems more are fees. extent on owned profitability that not of than a in wondered in a half seems have the justify but if is I to it huge the it There been, you in doesn't this on, argument as But total, as has huge extent of a for meantime, like

Dave Lougee

I'll that the first. last take Well, part of

under deserve - rate the rate are that offset we those think see the are XX% we've that - on cord-cutting. expect of very of in we're do. just side a on kind a deals increases lose different while about But in increases - good replacement the very, we additive way. gain I continuing and talked tradition of we that getting line by every economics we still our - somewhat those to virtual, bottom the Obviously they're traditional by the we to past, very they're and -

one profitable I in difficult for out a your very is they a in services to that and think and a race with it - streaming situation network to anybody. a turned they've Netflix we're all not business in good found think point it's I be out of relative sort the themselves turned

their to in the the networks, network - the have networks or don't compete than does mothership others, the Netflix which with taken nature because off valuable programming of programs us does is pay, with double-running make change does have kind was point which your what of a to don't some negotiation have are key And I - the and just they to we less your more - question. which them, should think really of about program

James Goss

least it to a so of mitigating somewhat at can factor Exactly, be Right. -

Dave Lougee

negotiations. upcoming in be, will It

James Goss

think what and VERIFY, have beyond One past you the of Locked On, you of broadcasting, terms of new potential I'm in look a in options wondering the whole do at to here wondering significant some there, initiatives enterprise growth you number try new and last ones for as other sort I'm DBL monetization? things, are thing,

Dave Lougee

think don't the but of as turned previous I you if terminated in strategy will, competitive X strategy merger us we've question, fascinating it's the negotiating to the And basically, changed. really assessing on a mentioned the interesting all that from independency really earlier want the back agreement the right reasons, for has how I machine just see engines, I in was we're into now, been of - on also for process because that. and that of get ice years much to it's standpoint, was of obviously,

years, were but in turned engine, initiatives of other those - true, before a we opportunities last of have the out premises our We behind were to off just at we and looking turned lot right the broadly abused out in sort developed that of terms relative lot X a be lot AI, and to well operating but word both business most being obvious and opportunities. as standpoint a AI an most as as a there threats the both probably, expense from there's of

to value and like I So and a have conversations, capital got capabilities, mean, size Premion. to with out the That given of do in conversation there earlier when and of - but lot companies a both one we the digital at of right, quality to look that did and are creative any and with of will for our given across that outlay, remains so simply say, leverage, M&A world partners than conversation. and country the than those we've the brands wouldn't in very you focus our on the and particular big asset other kind there we us, sector stations a - or just assets markets assets national strong is scale size, be and a we any our this the there kind our creation, might very where there lot say, less doesn't broadcaster, in side, brand be is local there that competition and let's capital and much

just again at, disciplined look massively but financial lot looking swings is all. to - a any say, near simply the answer, lens at financial at all we're and not in long-winded there for it's and a not big I'll So, certainly but consider term very us through

James Goss

you very much. right, All thank it. Appreciate

Dave Lougee

Jim. Thanks,

Operator

the comes [Operator from next Cahall Steven line Instructions] Wells Fargo. of question of Our

open. Your line is

Steven Cahall

Thank you. Good morning.

have So, said of a in some biggest your think renewal in is seeing of maybe with retrans, the they comp. improving I that net just to are are continue discussions reverse you trends lot peers what affiliation of midst and your on the Dave,

you've think recently something relatively well. as talked I that's about

of as worry it about like seeing and retrans be it's in vMVPDs on improvement that it's hard to the and an really Well, based we're escalator. as subs, cost we just kind But on more than more medium we're as be seeing the grow seems rather going term. net fixed to fees more in programming

could few for about worried you picture if wondering net headed we're an outlook was years. where next the without I the giving overall more of kind industry it's retrans guidance, So, of to the give over because

advertising, over just Victoria, maybe in the second then first you improvement seeing quarter. talked quarter some And on about the

I maybe a that looking better. last little heard we national think is night

So, wondering if that. in could expect we it And some talk year improving you. that excluding right even displacement half sequentially trends? is the the ad that should I of was Thank back political about you

Dave Lougee

and I'll question. retrans Steven. I'll let take Thanks, the net take Julie the advertising

has retrans reset next the in have months, obviously, what lot net than six yes, But that. of situation, less of pieces our opportunities we - So, number from over the slowed in to have once it given growth a in was. for we negotiation up

the top - both on a line, lot there's So, on repricing more the a line. and bottom lot even of

into to going pre-renegotiate these listen And - want calls, listen in so, network on partners I they with I I'm because not and don't do our theirs.

the core. made that to some so or So changes we that the yet, - and negotiation non-exclusive, for Jim's changed I they've the seeing, pay to as just program signaled some you're on previous had key and as make equation as has about broadcasting think, on decisions - question, have making the dynamic but Steven remains I some call last

deal now value broadcast, in ecosystem right and you're to remain If been about seen. time I to following our not an over Pac-XX think going and that very, remains to balking with they're Apple its and universities exclusive negotiation the - it do how with so own out are trying universities plays very remains high the be the on

probably for And I channels, we portfolio our true CWs - on to my depending for rate not the are we or all if any get have don't have because nets is. what compromise most think Big Four thing for many But I we on that's at do cable us, subscribers. else everybody their one extraneous do think not

negotiations. in that's consideration our and success a the So, retrans on understanding topline

Steven Cahall

then And advertising the side? on core

Julie Heskett

Yeah, hi, sequentially. improve and continuing services is marketing advertising to

that numbers, QX. to I And the would in with can which signaled compare we you QX QX. same So, say

to political does displacement. have do Some with of that

the So, improvement. to back half we continuing sequential have see should

color that QX And at hold seeing quarter-over-quarter local on it's I and is we National doing yes, national national expect well. but local. good, this in QX, to question, national. too - really to are similar your continue continues expect Local as so improvement still much weaker and is improving in there QX and not but than far would is sequentially out, would you trends. on time as to into hold

Dave Lougee

lot Julie of size to color really are Steven, it's like they add that because the in locally, a local agencies markets, they to our just just said, large app agencies are. just given what Yeah, call but advertisers, our of national behave fact we in

direct it's business, local the advertising is on more dealer, color that businesses, - - Julie's main in the So our good. street very point dollars right, business out, just it, sales local car but put to

call even to pulled even larger larger we'll a dollars the - those businesses, - by solid, agency bit their down agency these last local was actually little they by hold but So, on right. and it's Those minute, though them businesses. national, our to very

visibility we've us order. place on they're than ever So, we very able got to just short less because -

the we're So, have our quarter. standpoint. - biggest as piece we're fourth a won't we're all college September, the Julie, the football quarter the throughout for inventory is from instance, but big inventory - the in a have displacement lot. seeing And in this NFL from our as see so standpoint right, in improve not September, improvement continuing political throughout is pace think, and an displacement pace a to to quarter, We'll of in I month and yet we going lot some don't beginning we have September,

Julie Heskett

as continues well. also I that's quarter, just quarters, quarter second consecutive say not through strong, Automotive to positive, in be exactly That's is consecutive third was And quarters, right. heard which is his also it four and five would so strong. Victoria Dave what and just highlight remarks you

Dave Lougee

see tiers. the all X, Automotive add - Tier strong all And in really sign. that. is often really, and often X them we good unison, seeing Tier on I'll board, don't frankly also and Tier a color that's X growth are across three behave and

Steven Cahall

all for the thanks color. Great,

Dave Lougee

Thanks, Steven.

Operator

moment, you. please. Thank One

the Our Bank. Deutsche next line with of question comes from Watts Aaron

open. is line Your

Aaron Watts

Hi, everyone, thanks for getting me here. on

I one lot of had covered the a just ground. You've leverage. last question around

leverage the forward, maximum share your tolerance that like for or think And that around what's - or continue where little other just for was you announce see allocation little Will recent bit. as With it would actions year-end I capital up live? repurchase took are announcement, you leverage curious, considering? higher your XX you to to it you go a with could that be a

Victoria Harker

talked we've target that. is EPS accretive, the We, done M&A really financial and in and any the accretive comfortable XX us, - mentioned done highly not past, for policy. past a Sure, as it'll we've as this I'll I've very a be in take quickly both very size, it's about of well, And when cash.

down up came back perspective. a and we from leverage above So, then again XX flexed right

we're at Dave of As now. terms in mentioned, big also not right swings looking anything

would not the environment. a target materially it in this again, number. But we're macroeconomic So, moving it's comfortable particularly be where

So, it financial a not would but consider policy. I target, a

Aaron Watts

Okay, helpful. you. Thank that's

Victoria Harker

Sure.

Dave Lougee

you. thank right, All

year. Q&A the but a portion. will I year-end, will Chief the will want But with from update conclude plans to I before through the think continue of transition next the down call, Victoria at that as share March to us step retiring role brief conclude She to Officer. that TEGNA's assist be Financial we

to evolved of for She the the key she years. As more Company we everything lot, one been spinning a we we from her reasons to lot going a through acquisitions navigating you - successfully complexities she's size and Victoria is strategic things, these a off done. leader be the but to today. know, of has has steering of main and position And past we've of enjoy while, us the strength XX numerous Gannett with us thank

years will with XX-plus that the been end in know, Investor in has I'm Adviser gotten Julie all Company whom to for Senior most Vice at and knows Relations. well out the Financial as a and share also you've recently Heskett, this to been of very as happy succeed year. business Victoria President as roles, strategic inside Julie the player key as numerous Planning, of has CFO

for I turn a Now, Victoria over few words. to will it

Victoria Harker

years as of down Thanks and ways earnings for those companies year-end, in XX I words, Dave. and continue mentioned, calls to XX plan into step non-profits Dave the CFO kind serving With to with as now a belt, under variety decided future. my at

I've done and CFO, And different a proud the support four the opportunity at as we've years, unique then organizations several large TEGNA. XX complex own their career to the my over had here as Gannett Over I'm sectors work transformations. very through in all past here first strategic of

have As its and every result, talented future I resilient bright the a and team. Company's in confidence leadership

very the and company I'm public Julie's also equally in of and equally leadership financial along eight proud launch the business CFOs I've personally way. acumen. I'm helped confident

external you has side care, know, constituencies. skill Julie years, and both internal demonstrating the already me and by As with worked through with side past both

finance Julie the the with the at as I baton Julie to I'll community be end and support all the through very a same, of I March the and and ensure appreciate TEGNA's year-end. working up teams investor over much. past afford year-end. know mentioned, you Dave years clean smooth much As very Thanks transition will picks she a the

Dave Lougee

plan way, call. but with And - and time in going seamless Victoria, in would expect we to you a ahead thank congratulations Julie. Victoria to However, transition we're months the obviously month you ahead, you, our from is least have Company. to Victoria, also thank Well, succession at obviously there one a have a thank that very large more more earnings

today. So, thank you everyone for your time

them If can XXX-XXX-XXXX or you you, Investor at everyone. have Relations investorrelations@tegna.com. at call Thank any questions, email you you can

Operator

conference. participating, a great conclude for and and all day. this you. you Ladies gentlemen, have today's Thank Thank does

TEGNA (TGNA) 3 Aug 232023 Q2 Earnings call transcript