TEGNA Inc

Hello, and welcome to TECNO First Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask the question during this session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. I would now like to turn the call over to Kirk. Von Seelen, Vice President and Treasurer, you may begin.

Thank you. Good morning and welcome to our first quarter 2024 conference call and webcast. My name is Kirk Von Seelen and I am Tegna's Treasurer. Today, our President and CEO, Dave Luge, and our CFO, Julie Heskett, will review Tegna's first quarter performance and results and provide Tegna's full year and quarter ahead outlook. After that, we'll open the call for questions. Hopefully, you've had the opportunity to review this morning's press release. If you have not yet seen a copy of the release, it's available at tegna.com. Before we get started, I'd like to remind you that this conference call and webcast includes forward-looking statements, and our actual results may differ. Factors that may cause them to differ are outlined in our SEC filings. This presentation also includes certain non-GAAP financial measures. We have provided reconciliations of those measures to the most directly comparable GAAP measures in the press release. With that, let me turn the call over to Dave.

Thank you, Kirk, and good morning, everyone. I'll begin with a summary of recent highlights and then turn the call over to Julie to walk you through our financial results in more detail. Ctegna achieved our key guidance metrics in the first quarter. We closed the acquisition of Actillion and began integrating it into Premion. made significant early progress toward our $350 million capital return commitment for 2024, and completed multiple local rights deals for local pro sports teams, including with the Indiana Fever and rookie phenom Caitlin Clark. Also during the quarter, we returned more than $100 million to shareholders, with $82 million in share repurchases and $20 million in dividends. And as we announced in this morning's press release, our board has approved a 10% increase to our regular quarterly dividend. This builds on our track record of dividend increases, including the 20% dividend increase last year, and reflects the confidence we have in the durability of our free cash flow from our business and the strength of our balance sheet. As we shared on our last call, our initiatives to transform our core business operating model are now underway. Today, we are announcing that we expect these initiatives to generate between $90 to $100 million of annualized cost savings as we exit 2025. with initial benefits to be realized here in the second quarter with sequential improvements going forward. We'll continue to update investors on our progress as we roll out additional transformational initiatives. Turning to our financial performance, Julie will cover first quarter performance in greater detail, but I'll cover a few highlights. First, as I mentioned earlier, we retrieved first quarter key guidance metrics. National advertising has remained challenging, as it has across the media landscape, and affects us in both core and premium. But local advertising continues to improve across our portfolio products. We're especially seeing that at Premion, our industry-leading OTT sales platform that serves the local marketplace. We further improved Premion's positioning with the acquisition of Octillion. We're now beginning to leverage its technology to improve Premion's local advertiser experience with improved workflow tools and better overall access to the connected TV market. We're already seeing meaningful signs of success So we're encouraged by first quarter results for Premion, which returned to positive growth following last year's loss of a major national account. We expect continued sequential improvement in Q2 and throughout the year, driven by execution on local. Turning to political advertising, we're feeling very good about the trends as they relate to our footprint. Once again, the presidential race will likely come down to the same seven states, and that's where the spending will be. And of those seven states, We cover six of them, specifically Pennsylvania, Arizona, Georgia, North Carolina, Michigan, and Wisconsin. In the Senate, there appear to be less competitive seats nationwide than in the past, so the spending and the large spending will be funneled to the seats that are competitive. And here again, our footprint is very, very strong. Of the seven seats currently competitive, we have markets covering five of them. including the races in Ohio, Georgia, Arizona, Michigan, and Wisconsin. And because we're based here in the Mid-Atlantic, we have a front row seat to the Maryland Senate race, which we think will be highly competitive for the first time in a very long time, even though it's not classified that at the moment. With former Governor Larry Hogan, the likely Republican nominee, he's a very popular moderate, and assuming he gets the nomination, Maryland is likely a significant and unexpected contribution to our political revenues. And because control of the Senate is up for grabs and only a few seats are competitive, we think these races will very likely reach record spending levels for general election Senate races in their respective states. There's less governor's races in presidential years than during midterms, 11 to be exact, but we do have the only two races currently called competitive, North Carolina, and New Hampshire. So in short, we're in a great position to take a very strong share of linear and CTVOTT political dollars. And one more important tailwind, the highlight for all advertising spending, including political, the Summer Olympic Games this summer in Paris. With the largest portfolio of NBC stations and in a time zone more conducive to live programming and viewing, we expect enormous levels of engagement. I'd now like to share a little context in some of the recent pro sports deals we've announced. As I shared on our last call, our strong portfolio of stations in big pro sports markets are very well positioned for the shift currently happening in local sports distribution. Teams are learning, in so many cases being reminded of, the benefit of being on local broadcast and the huge increase in reach and distribution that brings compared to the pay TV only model. We recently announced a deal with the National Hockey League's Seattle Kraken. as well as the Seattle Reign of the Women's Soccer League. We also announced an exclusive broadcast distribution deal on the Indianapolis market with the WNBA's Indiana Fever and rookie superstar Kaitlyn Clark. This morning we announced we've signed additional deals taking Kaitlyn and the Fever games to 11 additional broadcast markets, including our home state of Iowa and our Cedar Rapids and Quad City stations, as well as on stations from Gray, Sinclair, Weigel Broadcasting, and Coastal Television. To my earlier point about broadcast distribution and the audience it brings, the recent NCAA women's basketball final featuring Kaitlyn Clark drew a record-breaking 19 million viewers on ABC stations, including our Des Moines and Quad City stations. Notably, that audience was larger than the men's championship game for the first time ever. And just as notably, that game aired on cable. Pro sports teams are now recognizing the difference. Obviously, the deals we've done to date are with teams who aren't part of the existing Diamond RSNs. We're watching closely the bankruptcy court developments with Diamond and are ready to explore additional opportunities that make sense. Before I turn it over to Julie, I'd like to thank and recognize our station colleagues for their tireless dedication to serving our viewers across the country in a very difficult environment for journalists. As an example, our stations in Minneapolis, Denver, and Louisville were recently nominated for a prestigious Peabody Award for their work on a nationwide investigation into widespread sexual assault by private contractors transporting inmates over long distances. Our station's investigative journalism serves as the watchdog of communities, uncovering corruption, holding power to account, and amplifying the voices of marginalized groups. There's so many less players doing that today making the role we serve all that more important. I'm so proud of the critical role our stations play. Without them, vital stations would remain untold, injustice is unaddressed, and the public trust eroded. With that, let me turn it over to Julie.