Shareholders' equity

12 Months Ended

Dec. 31, 2022

Equity [Abstract]

Shareholders' equity

Shareholders’ equity

As of December 31, 2022, and 2021, our authorized capital was comprised of 800 million shares of common stock and 2 million shares of preferred stock. As of December 31, 2022, shareholders’ equity of TEGNA included 223.4 million shares that were outstanding (net of 101.0 million shares of common stock held in treasury). As of December 31, 2021, shareholders’ equity of TEGNA included 221.4 million shares that were outstanding (net of 103.0 million shares of common stock held in treasury). No shares of preferred stock were issued and outstanding as of December 31, 2022 or 2021.

Capital stock and earnings per share

We report earnings per share on two bases, basic and diluted. All basic income per share amounts are based on the weighted average number of common shares outstanding during the year. The calculation of diluted earnings per share also considers the assumed dilution from the issuance of performance shares and restricted stock units and exercise of stock options.

Our earnings per share (basic and diluted) for 2022, 2021, and 2020 are presented below (in thousands, except per share amounts):

	2022		2021		2020
Net income	$	631,198	$	478,197	$	482,763
Net (income) loss attributable to noncontrolling interest	(729)		(1,242)		15
Adjustment of redeemable noncontrolling interest to redemption value	(560)		46		(948)
Earnings available to common shareholders	$	629,909	$	477,001	$	481,830
Weighted average number of common shares outstanding - basic	223,652		221,504		219,232
Effect of dilutive securities
Restricted stock	535		736		246
Performance share units	299		230		254
Stock options	—		1		1
Weighted average number of common shares outstanding - diluted	224,486		222,471		219,733
Earnings per share - basic	$	2.82	$	2.15	$	2.20
Earnings per share - diluted	$	2.81	$	2.14	$	2.19

Our calculation of diluted earnings per share includes the dilutive effects for the assumed vesting of outstanding restricted stock units and performance share units.

Share repurchase program

In December 2020, our Board of Directors authorized a new share repurchase program for up to $300.0 million of our common stock over the next three years. From 2020 through 2022, no shares were repurchased. Certain of the shares we previously acquired have been reissued in settlement of employee stock awards. As a result of the announcement of the Merger Agreement on February 22, 2022, we have suspended share repurchases under this program.

Stock-Based Compensation Plans

In May 2001, our shareholders approved the adoption of the 2001 Omnibus Incentive Compensation Plan. This plan was amended and restated as of May 4, 2010, to increase the number of shares reserved for issuance to 60.0 million shares of our common stock. In April 2020, our shareholders approved the adoption of the 2020 Omnibus Incentive Compensation Plan (the Plan). The Plan reserved the issuance of an additional 20.0 million shares or our common stock. The Plan provides for the granting of stock options, stock appreciation rights, restricted stock, restricted stock units (RSUs), performance share units, performance share awards, and other equity-based and cash-based awards. Awards may be granted to our employees and members of the Board of Directors. The Plan provides that shares of common stock subject to awards granted become available again for issuance if such awards are canceled or forfeited.

Performance share program - The Leadership Development and Compensation Committee (LDCC) of the Board of Directors has established a long-term incentive performance share program for our executives under the Plan. The number of shares earned under the performance share awards (PSAs) program is determined based on the achievement of certain financial performance criteria (adjusted EBITDA and free cash flow as a percent of revenue as defined by the PSA agreement) over a two-year cumulative financial performance period. If the financial performance criteria are met and certified by the LDCC, the shares earned under the PSA will be subject to an additional one year service period before the common stock is released to the employees. The PSAs do not pay dividends or allow voting rights during the three-year incentive period. Therefore, the fair value of the PSA is the quoted market value of our stock on the grant date less the present value of the expected dividends not received during the relevant performance period. The PSA provides the LDCC with limited discretion to make adjustments to the financial targets to ensure consistent year-to-year comparison for the performance criteria. For expense recognition, in the period it becomes probable that the minimum performance criteria specified in the PSA will be achieved, we recognize expense, net of estimated forfeitures, for the proportionate share of the total fair value of the shares subject to the PSA related to the vesting period that has already lapsed. Each reporting period during the two-year performance period, we adjust the fair value of the PSAs to the quoted market value of our stock price. In the event we determine it is no longer probable that we will achieve the minimum performance criteria specified in the PSA, we reverse all of the previously recognized compensation expense in the period such a determination is made.

RSU program - We also issue stock-based compensation to employees in the form of RSUs. These awards generally entitle employees to receive at the end of a specified vesting period one share of common stock for each RSU granted, conditioned on continued employment for the relevant vesting period. RSUs vest 25% per year and settle annually. RSUs do not pay dividends or confer voting rights in respect of the underlying common stock during the vesting period. RSUs are valued based on the fair

value of our common stock on the date of grant less the present value of the expected dividends not received during the relevant vesting period. The fair value of the RSU, less estimated forfeitures, is recognized as compensation expense ratably over the vesting period.

We generally grant both RSUs and performance share awards annually to employees on March 1.

Stock-based Compensation Expense: The following table shows the stock-based compensation related amounts recognized in the Consolidated Statements of Income for equity awards (in thousands):

	2022		2021		2020
RSUs	$	16,182	$	12,806	$	11,686
PSAs	14,299		18,709		8,620
Total stock-based compensation	30,481		31,515		20,306
Total income tax benefit	10,744		8,082		4,297
Stock-based compensation net of tax	$	19,737	$	23,433	$	16,009

RSUs: As of December 31, 2022, there was $26.7 million of unrecognized compensation cost related to non-vested restricted stock and RSUs. This amount will be adjusted for future changes in estimated forfeitures and recognized on a straight-line basis over a weighted average period of 2.4 years.

A summary of RSU awards is presented below: 

	2022			2021			2020
RSU Activity	Shares	Weighted average fair value		Shares	Weighted average fair value		Shares	Weighted average fair value
Unvested at beginning of year	2,842,288	$	15.11	2,614,654	$	13.09	2,132,936	$	13.22
Granted	949,022	21.90		1,282,636	17.83		1,416,300	13.39
Vested	(1,118,395)	14.62		(899,282)	13.21		(738,159)	14.03
Canceled	(129,183)	16.39		(155,720)	14.56		(196,423)	13.14
Unvested at end of year	2,543,732	$	17.80	2,842,288	$	15.11	2,614,654	$	13.09

PSAs: As of December 31, 2022, there was $6.9 million of unrecognized compensation cost related to non-vested PSAs (holding valuation inputs as of December 31, 2022 constant). This amount will be recognized as expense over a weighted average period of 1.8 years. A summary for the PSAs activity is presented below:

	2022			2021			2020
PSAs Activity	Target number of shares	Weighted average fair value		Target number of shares	Weighted average fair value		Target number of shares	Weighted average fair value
Unvested at beginning of year	1,015,433	$	15.04	1,142,879	$	12.87	698,482	$	12.26
Granted	484,781	21.80		553,090	17.48		673,127	13.47
Vested	(503,844)	15.26		(646,635)	13.22		(151,511)	13.40
Canceled	(10,266)	17.09		(33,901)	14.20		(77,219)	12.50
Unvested at end of year	986,104	$	18.18	1,015,433	$	15.04	1,142,879	$	12.87

Accumulated other comprehensive loss

The elements of our Accumulated Other Comprehensive Loss (AOCL) principally consisted of pension, retiree medical and life insurance liabilities, foreign currency translation and an unrealized gain on our available-for-sale investment. The following tables summarize the components of, and changes in AOCL, net of tax (in thousands):

2022	Retirement Plans		Foreign Currency Translation (1)		Available-For-Sale Investment		Total
Balance at beginning of year	$	(113,090)	$	455	$	15,419	$	(97,216)
Other comprehensive (loss) gain before reclassifications	(16,288)		77		—		(16,211)
Amounts reclassified from AOCL	3,313		—		(15,419)		(12,106)
Balance at end of year	$	(126,065)	$	532	$	—	$	(125,533)

2021	Retirement Plans		Foreign Currency Translation (1)		Available-For-Sale Investment		Total
Balance at beginning of year	$	(120,979)	$	(97)	$	—	$	(121,076)
Other comprehensive gain before reclassifications	3,316		552		15,419		19,287
Amounts reclassified from AOCL	4,573		—		—		4,573
Balance at end of year	$	(113,090)	$	455	$	15,419	$	(97,216)

2020	Retirement Plans		Foreign Currency Translation (1)		Total
Balance at beginning of year	$	(142,398)	$	(199)	$	(142,597)
Other comprehensive gain before reclassifications	16,779		102		16,881
Amounts reclassified from AOCL	4,640		—		4,640
Balance at end of year	$	(120,979)	$	(97)	$	(121,076)

(1) Our entire foreign currency translation adjustment is related to our CareerBuilder investment. We record our share of foreign currency translation adjustments through our equity method investment.

AOCL components are included in the computation of net periodic post-retirement costs which include pension costs discussed in Note 6 and our other post-retirement benefits (health care and life insurance benefits). Reclassifications out of AOCL related to these post-retirement plans included the following (in thousands):

	2022		2021		2020
Amortization of prior service credit	$	(481)	$	(481)	$	(481)
Amortization of actuarial loss	4,639		5,698		6,690
Realized gain on available-for-sale investment	(20,800)		—		—
Pension payment timing related charges	300		946		—
Total reclassifications, before tax	(16,342)		6,163		6,209
Income tax effect	4,236		(1,590)		(1,569)
Total reclassifications, net of tax	$	(12,106)	$	4,573	$	4,640