Investor Presentation with Governance
November 2020
Forward-Looking Statements
Certain statements in this communication may constitute "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein are subject to a number of risks, trends and uncertainties that could cause actual results or company actions to differ materially from what is expressed or implied by these statements, including risks relating to the coronavirus (COVID-19) pandemic and its
effect on our revenues, particularly our non-political advertising revenues. Potential regulatory actions, changes in consumer behaviors and impacts on and modifications to TEGNA's operations and business relating thereto and TEGNA's ability to execute on its standalone plan can also cause actual results to differ materially. Other economic, competitive, governmental, technological and other factors and risks that may affect TEGNA's operations or financial results are discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, and in subsequent filings with the U.S. Securities and Exchange Commission (the "SEC"). We disclaim any obligation to update these forward-looking statements other than as required by law.
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Our Response to COVID-19
Actions taken during COVID-19 support our employees, customers, and communities
❑ Our Board has been actively involved in overseeing our response to COVID-19; our directors' combined skills and experiences have proved invaluable in navigating the pandemic
❑ We are serving and supporting our viewers, customers, and each other during these extraordinary times as we continue to work to create long-term value for all our shareholders
❑ We moved quickly to protect our colleagues in newsrooms by moving to remote work and found innovative ways to deliver trusted news and substantive content that brings clarity, context and hope to our audiences
❑ Our established culture of innovation and execution allowed us to act quickly and decisively navigate the pandemic, and our employees have continued to utilize innovative approaches to our work through these unprecedented circumstances
❑ We are informing and uniting our communities during a time of dislocation and isolation, including through our balanced Facts Not Fear editorial brand and philosophy from day one of the pandemic, which has clearly resonated with our audiences across all platforms
❑ Our VERIFY franchise helps sift fact from fiction among a sea of misinformation and disinformation. TEGNA coverage has been a welcome antidote to the anxiety-ridden experiences provided by some national news and social media outlets
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Company Overview
TEGNA is an independent media company providing empowering stories, impactful investigations
and integrated marketing services through trusted and innovative content across platforms
$2.6B
Market Cap1
$2.7B
Revenues2
$824M
Adj. EBITDA2,3
+80% | +11% | +123% |
Visitors 4 | Monthly | Total Video Plays4 |
Active Users4 |
1As of Sept 2020, TEGNA average monthly year to date. Sources: Google Analytics, YouTube Analytics, Campaign Monitor
Largest
owner of Big 4
affiliates in the top 25 markets
Largest
affiliate group
63
Stations
51
Markets
2nd Largest
: Legacy TEGNA stations
: Dispatch stations
: Nexstar / Tribune divestiture stations affiliate group
Source: Company data 1 As of 30-Sept-2020;2 Trailing twelve months through 3Q 2020; 3 See Non-GAAP
Reconciliation on slide 24; 4 As of Sept 2020, TEGNA average monthly year to date. Sources: Google Analytics, | 4 |
YouTube Analytics, Campaign Monitor |
- TEGNA's Business Strategy Drives Long-Term Value
TEGNA's commitment to financial discipline, superior execution and innovative content and
marketing solutions creates a compelling long-term value proposition
Five Key Pillars of Value Creation | Superior Execution | |
Continue to be best in class operator
Aggressively pursue accretive M&A opportunities resulting from industry consolidation
Pursue growth opportunities through
partnerships, innovation and adjacent businesses
Maintain a strong balance sheet
Commitment to free cash flow generation and a balanced capital allocation process
- 50%+ of durable revenues from subscription & political in '19/'20 cycle
- ~31% Adjusted EBITDA margins over trailing twelve months1
- ~40 stations acquired and ~$4 billion of transaction value since '13
- Efficiency of acquisitions have kept us well under the 39% FCC local ownership cap at 32%, with the UHF discount, which provides us headroom for future M&A
- Premion in OTT advertising services, with Gray now serving as a reseller of Premion's services
- Expansion of OTT streaming services, including a recent update of Roku streaming apps for all stations and the start of rolling out station apps on Amazon Fire TV
- True Crime Network (formerly known as Justice Network) / Quest in multicast networks
-
Innovative content: newscast transformation, interactive TV and digital series Daily Blast Live,
VAULT Studios podcasts, new audience engagement tools including "Near Me" - 4.5x net leverage as of 3Q 20202; expect net leverage to be at 4.2x or less by the end of the year
- $1.5 billion revolver extended through 2024 increases capital flexibility
- Executed $2.65 billion in recent refinancings to lower interest expense and extend maturities
- 96% of fixed-rate debt ensures a low cost of debt
- Amended the only financial covenant (debt coverage) to extend the step-down of the maximum permitted total leverage ratio from 5.50 to 5.25 by 15 months
- Continued thoughtful, disciplined allocation philosophy
- Primary focus on debt paydown; also returning capital to shareholders through a regular dividend
Source: Company filings
1As of 30-Sep-20205 2The leverage ratio used for our single financial covenant in our revolving credit agreement was 4.38x as of the end of the quarter. The primary difference between the two leverage ratios is the definition of Adjusted EBITDA in the revolving
credit agreement version requires additional adjustments to add back non-cash compensation and contractual synergy benefits during periods in the trailing eight quarters that preceded the acquisition.
Consistent Execution of our Strategy has Driven Growth and Diversification
Increasing mix of high margin subscription and political revenues allows us to continue to deliver
value to shareholders, regardless of cyclical or economic conditions
Shift in TEGNA Revenue Composition
2015 | 2019 | |
Advertising & | Advertising | Subscription | ||
Marketing(1) Subscription | 44% | |||
& Marketing | (1) | |||
71% | 26% | |||
53% | ||||
Political | Other | Political | |
Other | 2% | ||
1% | |||
1% | |||
2% | |||
Our high-margin, stable political and subscription revenues will
make up more than half of our 2019-2020 revenues, and we expect
an increasing percentage thereafter
Subscription Revenue | Political Revenue | ||
Expect full year 2020 subscription revenue to | Political revenues will contribute at least | ||
be up high-twenties percent | $395 million for the full year | ||
$1,005M | $395M+ | |||||||||||||
$841M | Achieved | |||||||||||||
$719M | $234M | record | ||||||||||||
$582M | political | |||||||||||||
$449M | $159M $155M | revenues in | ||||||||||||
2020 | ||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | 2014 | 2016 | 2018 | 2020 | |||||
High margin and | 2020 a record political year | ||||||||||||
predictable | |||||||||||||
TEGNA's Advertising and Marketing Services Revenue Cyclicality
TEGNA's even- to odd-year results are comparatively impacted by the cyclical driver of
spending related to political advertising in election years
1 Advertising & Marketing Services: Advertising (Excluding Political) + Digital revenue | 6 |
Experienced Leadership with History of Driving Results
Dave Lougee | Lynn Beall | Anne Bentley | Ed Busby | |||||||||||||||
President and | Executive Vice President and | Vice President and | Senior Vice President of | |||||||||||||||
Chief Executive Officer | COO of Media Operations | Chief Communications Officer | Strategy | |||||||||||||||
Victoria D. Harker | Akin Harrison | Jeffery Newman | Grady Tripp | |||||||
Executive Vice President and | Senior Vice President, General | Senior Vice President and Chief | Vice President and | |||||||
Chief Financial Officer | Counsel and Secretary | Human Resources Office | Chief Diversity Officer | |||||||
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Our Board is Independent, Diverse and Engaged
Howard D. Elias | Dave Lougee | Gina L. Bianchini | Stuart J. Epstein | ||||
Independent Chairman, TEGNA | President and CEO, TEGNA | ▪ Founder and CEO, | ▪ | CFO, DAZN Group | |||
▪ Chief Customer Officer & President, | ▪ Former President, TEGNA Media | Mighty Networks | ▪ | Former Co-Managing Partner, | |||
Services & Digital, Dell Technologies | ▪ Former President of Broadcasting, | ▪ Former CEO and Co-Founder, | Evolution Media | ||||
▪ Former President and COO, | Gannett Co., Inc. | Ning, Inc. | ▪ | Former CFO, NBCUniversal | |||
EMC Global Enterprise Services |
Lidia Fonseca | Karen H. Grimes | |||||||||||||
Scott K. McCune | Henry W. McGee | |||||||||||||
▪ EVP, Chief Digital and | ▪ Former Partner, Senior Managing | ▪ Founder, MS&E Ventures | ▪ | Senior Lecturer, | ||||||||||
Technology Officer, Pfizer | Director, and Equity Portfolio | ▪ Former VP, Global Media and | Harvard Business School | |||||||||||
▪ Former CIO, Quest Diagnostics | Manager, Wellington Management | Integrated Marketing, The | ▪ | Former President, | ||||||||||
▪ | NEW | February 2020 | Coca-Cola Company | HBO Home Entertainment | ||||||||||
Susan Ness | Bruce P. Nolop | Neal Shapiro | Melinda C. Witmer | |||||||||||
▪ Principal, Susan Ness Strategies | ▪ | Former CFO, E*TRADE | ▪ President and CEO, WNET | ▪ | Founder, LookLeft Media | |||||||||
▪ Former FCC Commissioner | Financial Corporation | ▪ Former President, NBC News | ▪ Former Chief Video and | |||||||||||
▪ Former CFO, Pitney Bowes Inc. | Content Officer, Time Warner | |||||||||||||
Cable (now Spectrum) | ||||||||||||||
Independent Oversight and Leadership:
- 11 of 12 directors on the Board are independent
- Leadership structure allows for effective, independent Board oversight and communication, while enabling the CEO to focus on executing the strategic plan and managing operations
Active and Engaged Directors:
- Significant amount of time dedicated to Board strategy discussions
- Director participation in extensive shareholder engagement program
- Regularly evaluates all opportunities to create value
Annual Evaluation and Commitment to Refreshment:
- Annual assessment conducted to assess effectiveness of Board and committees
- Ongoing board refreshment process resulted in six new independent directors added over the past five years and the transition of the chairman role during 20181
Gender & Racial Diversity
17% | Racially & | 42% Female |
Ethnically
Diverse
Tenure1
Average Tenure: 5.7 yrs
1 As of 2020 Annual Meeting of Shareholders, 30-April-2020. | 8 |
Includes Gannett board membership prior to the spin-off |
Our Directors' Expertise Aligns with Our Long-Term Strategy
Specific Area of
Expertise Represented # of Directors with
Recently added Directors' skills align with TEGNA's strategy, provide further insight into the evolving media landscape, enhance financial/M&A experience
Desired Board Skill | on Board | Skillset / Experience |
Financial | ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ | |
Core business | Marketing | ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ |
fundamentals | ||
Operational | ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ | |
Protect and enhance | ESG | ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ |
long-term value | ||
Strong independent | Public Co. Board | ⚫ ⚫ ⚫ ⚫ ⚫ |
⚫ ⚫ ⚫ ⚫ ⚫ ⚫ | ||
oversight & leadership | Public Co. C-Suite | |
capabilities | Leadership | ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ |
Industry-specific | Media | ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ |
experience | Digital / Technology | ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ |
Capital allocation and | M&A | ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ |
integration expertise | ||
Director Oversight
TEGNA has a highly capable Board with a track record of operational excellence and
successful M&A execution that actively and regularly reviews and oversees
development and implementation of long-term strategic plan to drive shareholder value
Karen Grimes (Feb. 2020)
Deep financial and investment expertise, including in media and advertisers, and extensive leadership experience
Gina Bianchini (Feb. 2018)
Deep expertise in social media and community building technology platforms; significant digital and startup experience
Stuart J. Epstein (Feb. 2018)
Extensive experience in media, technology and deep transactional experience; CFO of NBC Universal and also oversaw NBC operating stations
Melinda C. Witmer (Dec. 2017)
Experience in capitalizing on market opportunities and emerging media platforms; extensive experience negotiating transactions with local and national broadcasters
Adds investor perspective within the Boardroom and enhances depth of financial expertise
Experience using technology to connect people mirrors our purpose of serving the greater good and helps TEGNA to evolve in the digital age
M&A Transaction, strategic, operational and industry experience helps us to analyze opportunities for organic and inorganic growth
Operational experience and industry knowledge of changing consumer trends enhances our ability to anticipate and capitalize on market opportunities
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Board Oversight and Management Execution of Strategic Transformation
Successful execution of M&A and strategic initiatives
led by the Board and management resulted in…
…transformation of TEGNA into a pure-play broadcasting company
- Successful integration post Belo acquisition (Dec. 2013, $2.2B)
-
Acquired six of
London Broadcasting's
TV stations
(Jul. 2014, $215M) - Announced spin off
of publishing business to begin evolution into a pure play broadcasting company
(Aug. 2014)
▪ Changed name to | ▪ Launched the | |||||
TEGNA (Apr. 2015) | industry's first OTT | |||||
and completed | local advertising | |||||
spin-off of | network, Premion, | |||||
publishing business | to help TEGNA | |||||
Gannett (Jun. 2015) | expand its revenue | |||||
base and provide | ||||||
access to | ||||||
new markets (Nov. | ||||||
2016) | ||||||
- Enhanced focus on digital-first strategy, including integrating digital into newsrooms (May 2017)
-
Completed spin-off
of Cars.com (Jun. 2017), sale of CareerBuilder (Jul. 2017)
Acquired KFMB's San
Diego stations (announced Dec. 2017)
First acquisition as a pure-play
- 2018 - 2019, completed 5 acquisitions totaling ~$1.8B ($1.5B closed in 2019), strengthening our market positioning, portfolio of stations and shareholder value1
▪ Creates TEGNA Marketing | ▪ Acquired 15 TV & 2 radio | ||||||
Solutions (Nov. 2018) | stations in 2019 | ||||||
▪ | Toledo / Midland-Odessa (Jan. | ||||||
2019, $105M) | |||||||
▪ | Justice / Quest (June 2019, | ||||||
$77M) 2 | |||||||
▪ | Dispatch (Aug. 2019, $535M) | ||||||
▪ | Nexstar / Tribune Divestiture | ||||||
(Sept. 2019, $740M) | |||||||
2014 | 2015 | 2016 | 2017 | 2018 | 2019 |
History of evaluating TEGNA's business portfolio and M&A opportunities with an
objective lens to best position TEGNA for shareholder value creation
Note: date of M&A deals represents transaction close unless otherwise noted
- Includes acquisitions of KFMB's San Diego stations, Toledo/Midland-Odessa, Justice/Quest, Dispatch, and Nexstar/Tribune divestitures
- Acquisition of 85% of multicast networks not owned from Cooper Media
2020+
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Strong Balance Sheet and Liquidity Profile
Ended the third quarter in strong liquidity position:
- $165 million in cash and $1.3 billion+ undrawn capacity on revolving credit facility
Recent refinancing actions further strengthen the balance sheet, reduce interest expense, extend maturities:
- On January 9, completed a $1.0 billion offering of 2028 senior notes at 4.625%
- Proceeds were used to retire nearer-term maturity higher interest rate debt in February
- Expected to result in net interest savings of $10 million in 2020
- On September 10, completed a $550 million offering of 2026 senior notes at 4.750%
- Proceeds will be used to refinance $350 million of remaining 4.875% notes maturing in September 2021 and $188 million of 5.500% notes maturing in September 2024
- During October, the Company drew down its revolving credit facility to repay all of its Senior Notes due in 2021 and a portion of Senior Notes due in 2024
- As of October 31, 2020, the undrawn capacity under the facility was $950 million
Continued progress in reducing debt, our primary near-term focus:
- Reduced leverage from 4.8x to 4.5x as of the end of the third quarter1
- Cash flow continues to be used to reduce net debt
- Expect net leverage ratio to be at 4.2x or less by the end of the year
Revolver extension increased capital flexibility; completed with favorable terms:
- $1.5 billion revolver extended through 2024
- On June 11, 2020 amended the only financial covenant (debt coverage) to extend the step-down of the maximum permitted total leverage ratio from 5.50 to 5.25 by 15 months, until March 31, 2022
- Additional step downs will continue thereafter as scheduled
- Revised terms provide additional financial flexibility given current market conditions
No upcoming
debt maturities
until 2024
High Percentage of Fixed-Rate Debt Ensures Low Cost of Debt
Floating
Rate
~4%
Fixed
Rate ~96%
As of 30-Sep-2020
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1 The leverage ratio used for our single financial covenant in our revolving credit agreement was 4.38x as of the end of the quarter. The primary difference between the two leverage ratios is the definition of Adjusted EBITDA in the revolving credit agreement version requires additional adjustments to add back non-cash compensation and contractual synergy benefits during periods in the trailing eight quarters that preceded the acquisition.
Executive Compensation is Designed to Drive Our Strategy and is Closely Aligned with Performance
(Fiscal 2019 Program Overview) | |||
Component | Performance Considerations | Pay Objective | 2019 CEO Compensation Mix1 |
Short-Term Cash Compensation
▪ Nature / responsibility of position | ▪ | Attract and retain top talent | ||||
Base Salary | ▪ | Achievement of KPIs | ▪ | Adjustments reflect individual performance or changed | ||
▪ | Internal pay equity among positions, market data | responsibilities | ||||
▪ | Contribution to Company-wide performance across | ▪ Incent attainment of individual and Company | |||
Annual | variety of financial metrics | performance goals | |||
Bonus | ▪ | Achievement of KPIs | |||
61% | |
of CEO's target compensation | |
is performance-based | |
Performance | RSUs |
22% |
Long-Term Equity Incentives
Performance
Shares (PSUs)
Restricted
Stock Units
(RSUs)
- Achievement of pre-definedlong-term financial goals based on Adjusted EBITDA and Free Cash Flow as a percentage of Revenue
- Creation of long-term shareholder value
- Awarded based on achievement of the Company's financial and strategic goals
- Creation of long-term shareholder value
- Drive shareholder returns, align with shareholders' interests, foster stock ownership
- 2-yearperformance period to reflect cyclical nature of business2, with 3-year vesting period promoting retention
- Align with shareholders' interests, foster stock ownership and promote retention
Shares | |
40% | Base |
Salary | |
Annual | 18% |
Bonus | |
21% |
Compensation Committee's Key Performance Indicator (KPI) Selection Process
- KPIs are set annually for each executive, and consist of individually designed qualitative and quantitative goals designed to be challenging but attainable:
- Profit and Revenue Goals: Financial goals for the Company and respective business unit over which the executive has responsibility (e.g., revenue, adjusted EBITDA, operating income, free cash flow, digital revenue)
- People Goals: Measures of leadership, achievement of diversity initiatives, First Amendment activities, and other significant qualitative objectives
- Product Goals: Innovation, collaboration, new products and programs in support of the Company's strategic plan
1 | Compensation mix does not equal 100% due to rounding | 12 |
2 | Even- to odd-year results comparatively impacted by the cyclical drivers |
Corporate Governance Profile Reflects Commitment to Long-Term Interests of our Shareholders
TEGNA's governance practices ensure the Company operates in ways
that support the long-term interests of our shareholders
Corporate Governance
- Independent Board chair
- 11/12 independent Board members
- Balanced tenure
- 42% gender diverse and 17% racially and ethnically diverse Board
- Proxy access bylaw provision
- Ongoing board refreshment to align with business evolution
- Long-standingshareholder engagement program, including participation by our Independent Chair
- Significant Board engagement on strategy, capital deployment and risk oversight
- Regular executive sessions of independent directors
- Annual Board performance evaluation
Compensation Governance
- Substantial portions of total compensation at risk and performance-based
- Review of compensation and financial performance against internal budgets, results from prior years and peer data to ensure alignment in pay outcomes
- Anti-hedgingand anti-pledging
- Clawback policy for NEOs
- Robust executive stock ownership guidelines for NEOs
- Double-triggerchange-in-control and no new excise tax gross-ups since April 2010
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Commitment to Risk Management
TEGNA's Board and management are focused on staying ahead of key risks facing our business
Board's Role in Risk Oversight
- The Board oversees risk management through regular discussions with senior leadership, considering risks in the context of the Company's strategic plan and operations
- Enterprise risk management program enhances the Board and management's ability to identify and respond to strategic, market, operational and compliance risks facing the Company
- Each Board committee also considers risk within its area of responsibility, including the Public Policy and Regulation Committee which considers risks related to certain legal, regulatory, compliance and public policy matters including media, antitrust and data privacy laws and regulations
Focus on Data Privacy
- Implemented multifactor authentication for personnel who have access to confidential and sensitive data
- Migrated applications under centralized authentication and authorization tool (Okta), allowing regular monitoring of system access
- Conduct training on compliance with HIPAA for all HR employees to ensure affected personnel understand how to treat and manage "protected health information" that may be in their possession
Evaluating senior leadership's processes to identify, assess, manage and monitor risks confronting
the Company is one of the most important areas of the Board's oversight
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Our Purpose: Serving the Greater Good
TEGNA and its diverse portfolio of stations are driven by our strongly-held purpose to serve the
greater good - to make a difference in our company and our communities
Spotlight: TEGNA Stations Changing Lives and Laws
- KING 5's "Hanford's Dirty Secrets" exposed that workers at the Hanford nuclear waste site, the nation's largest nuclear waste dump, were being denied rights to compensation for work- related illnesses
- Series won an Emmy award
- As a direct result of the KING 5 investigation, new legislation was signed into law to help Hanford workers file for and receive their health benefits
- In "Deadly Housing Investigation," WLTX's continuing investigative coverage of Section 8 housing in Columbia revealed a stunning lack of oversight and accountability that had led to two deaths from Carbon Monoxide poisoning
-
The coverage led to several
Housing Board members' resignations and legislation has been drafted in South Carolina to create better oversight
- WLTV's "Cherish Perrywinkle: She Should Be Alive" exposed failures, both human and systemic, that allowed a known sexual predator to victimize three generations of children
-
The case prompted changes to Florida law to create stricter oversight of sex offenders, and
First Coast News' coverage was credited by the State Attorney for holding officials accountable
- Year-longinvestigation into medical billing morphed into a crusade to change Colorado law
- Documented how hundreds of patients had liens placed on their homes for controversial medical bills of which they were not aware in "Lien on Me"
- Subsequent outcry prompted lawmakers to stand up to lobbies, resulting in the Out-of- network Health Care Services bill, a victory for patients' rights
Through our innovative content and impactful investigations we are able to make a tangible positive impact on
our communities, which benefits all of TEGNA's stakeholders
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Providing Trusted, Impactful and Innovative News
Audiences turning to local journalism during COVID-19
- Our local stations are reassuring our audiences with "Facts Not Fear," both a brand and philosophy for all TEGNA journalists
- Local news is the most trusted source of all, and our colleagues have risen to the challenge
- Employees have utilized creative approaches to production to ensure safety while reporting on important facts during this pandemic
Creating greater awareness of racial issues
Provided balanced, nuanced coverage following the death of George Floyd in Minneapolis
Aired a series of half-hour specials on racial inequality and social justice titled Facing Race
Produced a special series report, "The Talk: A Hard Conversation About Race in America"
Working to build trust in the voting process
- Trainings on detecting misinformation campaigns, specifically those targeting Black and Hispanic communities
- Creation of Voter Access teams at stations to educate the public on the election process
- Holding election officials accountable for transparency in the reporting of results
- Expansion of stations' VERIFY news fact-checking reporting to identify and debunk false information spread on social media platforms
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Key Focus Areas of Our Corporate Social Responsibility and Sustainability Efforts
Human Capital
TEGNA remains committed to
building a fully inclusive culture and
equity in talent hiring and management decisions
See next slide for more details
Social Capital
Creating societal impact is at the core of our purpose to serve the greater good of our communities
Corporate Governance | Environment | |
The Board has implemented strong | TEGNA remains committed to | |
corporate governance policies that | managing our environmental impact | |
align with best practices for public | responsibly and protecting the | |
companies and the evolving | environment through our | |
expectations of shareholders | investigative journalism and | |
business practices | ||
- TEGNA remains committed to embedding sustainability throughout our business. We are focused on social, human, environmental and corporate governance practices that strengthen communities, and protect and enhance TEGNA's long-term value
- Our Board's Public Policy and Regulation Committee also generally guides the Company's corporate social responsibility and sustainability efforts, and reviews and reports on these efforts on a periodic basis to our Board
- Since 2018, Social Responsibility Highlights are updated each year and a Social Responsibility portion of our corporate website has been created to better reflect and report on our corporate social responsibility practices
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Recently Enhanced Oversight of Diversity and Inclusion Efforts; Ongoing Reporting of Board and Workforce Diversity Statistics
Human Capital
- Diversity and inclusion is and will be an area of heightened focus for our Board and management. We are working together to ensure our company reflects the diversity within the communities that we serve in order to better serve those same communities.
- To further embed that commitment and accountability into the governance of our company, in July 2020 our Board adopted specific areas of oversight for each Board committee regarding how TEGNA approaches diversity:
Leadership Development | Nominating & | Public Policy & | Audit Committee | |||
& Comp. Committee | Governance Committee | Regulatory Committee | ||||
Racial diversity of | Racial diversity of the | Racial diversity of editorial | Investment and | |||
corporate and station | purchasing with minority | |||||
Board | and content | |||||
leadership | owned businesses | |||||
Newly Created Position in Sep. 2020
Chief Diversity Officer: Grady Tripp
Tripp oversees attracting, retaining and
growing diverse talent, developing
training programs to enhance awareness and accountability in diversity issues, facilitating the company's racial diversity and inclusion employee working group and providing thought leadership to TEGNA colleagues and the media industry
Diversity Statistics
- Commitment to building a fully inclusive culture and equity in talent hiring and management decisions, and supporting supplier diversity:
U.S. Employee Profile | Women | Ethnic | 2019 Statistics: |
Minorities | |||
▪ 52% of promotions were given to women; 24% to ethnic minorities | |||
Total Management | 41.4% | 14.2% | |
▪ 68% of interns were women; 41% were ethnic minorities | |||
Total Non-Management | 48.0% | 24.1% | |
▪ Diverse suppliers were awarded 13% of TEGNA's spending on outside products and services1 | |||
Total TEGNA | 47.0% | 22.6% | |
1 Based on analysis of the top 100 vendors | 18 |
Ongoing Pledge to Investing in, and Supporting our Employees and Communities
Human Capital
- Listening to our Employees: In 2020, TEGNA completed its second comprehensive, companywide employee survey to determine employee perceptions of working at TEGNA, our response to the pandemic, the benefits we offer and diversity and inclusion.
- Based on employee feedback, leaders and managers develop action plans to address opportunities to improve our culture, including diversity and inclusion initiatives and employee benefits enhancements.
- Investing in our Employees: We invest annually in employee professional development opportunities including Leadership Development and Executive Leadership programs, and diversity-related recruitment and internship opportunities.
- Giving Back to our Communities: We strive to have a positive impact on the markets we serve, which means taking an active role in helping to make our communities better places to live and work. All stations participate in the TEGNA Foundation Community Grants program, which are distributed within the United Nations Sustainable Development Goal framework, with the majority of 2019 grants supporting four major categories: Good Health and Well-Being, Quality Education, Zero Hunger and No Poverty.
- In 2020, TEGNA was named toThe Civic 50as one of the 50 most community-minded companies in the United States.
- Stations have helped raise approximately $65M for COVID-19 local relief efforts since the beginning of the pandemic.
- In September, TEGNA announced a series of grants to promote diversity in journalism and professional development opportunities for media professionals and students. To date, 2020 TEGNA Foundation Media Grant recipients include:
National Association | National Association | Asian American | Native American | National Lesbian and | Investigative | Online News | ||||||
of Black | of Hispanic | Journalists | Journalists | Gay Journalists | Reporters and | |||||||
Association (ONA) | ||||||||||||
Journalists (NABJ) | Journalists (NAHJ) | Association (AAJA) | Association (NAJA) | Association (NLGJA) | Editors (IRE) | |||||||
- TEGNA Foundation also announced it was making a special $75,000 grant to Reporters Committee for Freedom of the Press (RCFP) to support its mission to protect First Amendment freedoms and the newsgathering rights of local journalists.
For the fourth consecutive year, we have been recognized as a Best Place to Work for LGBTQ Equality, receiving a
perfect score on the 2020 Corporate Equality Index administered by the Human Rights Campaign Foundation
19
Ongoing Pledge to Corporate Social Responsibility
Social Capital
- TEGNA stations regularly conduct investigations that make an impact in communities and change public policy
- TEGNA stations raised more than $100 million in 2019 in support of diverse local causes that address specific needs in our communities
- The TEGNA Foundation Community Grants program made 225 grants totaling $1.5 million; grants are distributed within the United Nations Sustainable Development Goal framework
- TEGNA Foundation contributed $100,000 to the NAACP Legal Defense Fund to support and promote racial equality and $75,000 to the Reporters Committee for Freedom of the Press to support efforts and training to improve safety and legal protections for local journalists working to cover protests and demonstrations
Journalistic Integrity
- Conduct regular ethics trainings and adopted Principles of Ethics Journalism and Social Media policies
- Vigorous advocate for First Amendment principles and recognize the important role news organizations play in informing the public
- Conduct training to combat disinformation in Company's 49 newsrooms in 2020
- Expanded news fact-checking initiative VERIFY by adding additional regional fact-checkers to provide transparency in the reporting process
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Ongoing Pledge to Corporate Social Responsibility
Environment
- TEGNA's Environmental Policy promotes the operation of our business in a manner that is environmentally responsible by reducing our carbon footprint and conserving energy
- TEGNA stations also regularly report on environmental and sustainability issues impacting our communities, that have, in many instances, made a difference in the lives of the communities
- Seek to take space in LEED-certified buildings that are designed for energy efficiency, including TEGNA's new headquarters in Tysons, VA which offers access to public transportation, electric vehicle charging ports and is designed to reduce energy consumption through daylight harvesting, occupancy sensors and zoned HVAC
- Implemented several energy efficiency strategies including upgrading stations' studio lighting to LED and HVAC upgrades
- Reduced unnecessary business travel by utilizing video conferencing technology across the business
- Installed on-demand office printers to reduce paper use and minimize waste
- Reviewing additional ways to move to renewable energy sources to reduce our environmental impact
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Key Takeaways
❑ TEGNA acted swiftly in response to the COVID-19 pandemic - protecting employees, supporting customers and serving its communities
❑ In light of the recent racial injustice - assessing and holding ourselves accountable for our own recruitment, hiring, development and promotion practices
❑ Despite a challenging advertising backdrop primarily due to cancellations related to the pandemic, TEGNA has seen sequential positive progress since the onset of the downturn, and our OTT advertising platform Premion is benefiting from the secular tailwinds of additional viewing on streaming services
❑ Actions over the past few years, including strategic portfolio construction and careful balance sheet management, provide solid foundation to better weather the current environment and build shareholder value over the long-term
❑ Remain committed to operational and financial discipline, which - with strong execution - drives strong margins and free cash flow
❑ Operational growth drivers, such as content innovation, subscription revenue and digital growth initiatives, combined with strong even-year political revenue (including most recently, a record year), diversify our revenue and position TEGNA for long-term success as the country moves beyond the current crisis
❑ Track record of innovation and execution, with proven ability to leverage core assets and capabilities to build new, adjacent businesses, such as Premion
❑ Strong free cash flow model, a disciplined capital allocation strategy with near-term focus on debt reduction, and deliberate financial decisions drive flexibility and strong dividend yield to further optimize shareholder value
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Appendix
Non-GAAP Reconciliation
Trailing Twelve Months Ended September 30, 2020
($000s)
GAAP | Special Items1 | Non-GAAP | ||||
Revenues | $ | 2,694,160 | $ | - | $ | 2,694,160 |
Operating expenses | 2,040,100 | (36,883) | 2,003,217 | |||
Operating income | 654,060 | 36,883 | 690,943 | |||
Depreciation | 65,391 | - | 65,391 | |||
Amortization of intangible assets | 68,151 | - | 68,151 | |||
Adjusted EBITDA | $ | 787,602 | $ | 36,883 | $ | 824,485 |
1Special items include workforce restructuring, M&A due diligence costs, advisory fees related to activism defense, and spectrum repacking reimbursements and other, net.
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Disclaimer
Tegna Inc. published this content on 13 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 November 2020 17:50:05 UTC