Jeff Heinz - Vice President-Investor Relations Gracia Martore - President and Chief Executive Officer Victoria Harker - Chief Financial Officer Dave Lougee - President-TEGNA Media Matt Ferguson - Chief Executive Officer, CareerBuilder LLC Alex Vetter - President & Chief Executive Officer, Cars.com LLC Victoria Dux Harker - Chief Financial Officer & Executive Vice President.

John Janedis - Jefferies Kyle Evans - Stephens Alexia Quadrani - JPMorgan Chase Doug Arthur - Huber Research Partners Barton Crockett - FBR Capital Markets Marci Ryvicker - Wells Fargo Michael Kupinski - Noble Financial Jim Goss - Barrington Research Tracy Young - Evercore ISI Barry Lucas - Gabelli & Company.

Good day everyone and welcome to the TEGNA First Quarter 2016 Earnings Conference Call. This call is being recorded. Our speakers for today will be Gracia Martore, President and Chief Executive Officer; and Victoria Harker, Chief Financial Officer. At this time, I'd like to turn the call over to Jeff Heinz, Vice President-Investor Relations.

Please go ahead..

Thanks, Bernie. Good morning, and welcome to our earnings call and webcast. Today, our President and CEO, Gracia Martore; our CFO, Victoria Harker, and members of our leadership team will review TEGNA's first quarter 2016 results. After their commentary, we'll open up the call for questions.

Hopefully, you've had the opportunity to review this morning's press release. If you have not yet reviewed 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 include forward-looking statements, and our actual results may differ.

Factors that might 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 and on the Investor Relations portion of our website.

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

Thanks, Jeff and good morning, everyone, and let me add my welcome to our first quarter earnings call. This morning, I'm going to provide some highlights on TEGNA'S overall performance in each of our businesses, and then I'm going to turn it over to our business leads.

Dave Lougee, President of TEGNA Media, Alex Vetter, CEO of Cars.com; and Matt Ferguson, CEO of CareerBuilder. And they'll do a deep dive on each of their respective businesses and then Victoria will touch on the financial highlights. It's been a busy start to the year.

We have made significant progress in our first nine months as an independent focus media and digital company, and we are well on our way toward reaching the guidance and achieving the goals that we detailed at our investor day last summer and reiterated in early December.

We've established new partnership, launched new product and services, completed negotiations with important network and MVPV Partners and are achieving the record political advertising revenue we've been anticipating for this year.

Our relentless drive to innovate has helped us remain ahead of the curve and ahead of our competitors as audiences preferences and trends in content consumptions continue to change our industry.

We continue to harness the unique strength, we've detailed when TEGNA became an independent company and those included high quality assets with significant reach, strong margins and reliable significant cash flows, highly regarded industry leaders overseeing the businesses and a shareholder friendly approach to the allocation of capital So let's turn to the first quarter results.

As you saw company wide revenues were up substantially over last year's first quarter mainly driven by strong results for TEGNA media. TEGNA digital revenue grew as well and also contributed to the strong quarter.

Operating expenses increased in the first quarter year-over-year and the rise in media and digital segment cost reflect significant investments we are making in the long term growth and sustainability of our businesses. Overall, we continue to do a strong job of strategically investing for growth while continuing our strong cost discipline.

As importantly, we continue to grow profitability as well. Operating income was up over 20% compared to the same period last year and we achieve an increase of 16% in adjusted EBITDA year-over-year. We also generated a $111 million of free cash flow.

So now let me briefly touch on some highlight from each of individual businesses before turning it over to the team. TEGNA media revenue growth reach the high end of our guidance for the quarter driven by substantial growth in retransmission and digital revenue in addition to record first quarter political revenue.

As you'll hear from Dave in a few moment, our substantial broadcast footprint position us to garner a substantial slice of the expanding political advertising pie, and we anticipate our record pace will continue for 2016 particularly as we approach the November election.

Beyond the financials we made significant strides in our quest for continued innovation at TEGNA. We strengthen our partnership with video call center, a pioneer video caller television.

We also made a strategic investment in and partnership with Whistle Sports, the leader in connecting the sports world for Millenial audiences, and also partnered with CrowdTangle and innovative, social, analytic company.

All of these initiatives will allow us to continue to offer diverse original content that meets our audiences changing preferences for how they access and engage with content.

As I mentioned Dave will provide some additional detail on TEGNA media shortly including our progress on an emerging revenue stream that involves fully integrated marketing campaign. Switching now to TEGNA Digital, Cars.com continued its strong growth path with a big quarter with a big quarter from direct sales and major account.

We are please with this strong growth as with all of our businesses we are always looking ahead to ensure we're laying the ground work for the next wave of growth by launching new products and services.

Cars.com in the quarter launched a new sell-and-trade product that help consumers in the process of selling their cars to dealer, additionally our previously announced Lot Insights product is now up and running as well and we're also building out additional service and repair features from which we expect to see traction in the back half of the year.

Now Cars.com has received strong recognition from independent parties such as J.D. Power that have recognize the company for it impacts on dealers, it cutting-edge website and its overall impact on the industry. Alex will have more on all of this in a moment. Moving to CareerBuilder.

The Company is continuing its successful push into HR software as service solutions. They have the most comprehensive and integrated offerings in the industry as none of their competitors can offer the same bread of advertising software and services all in one place.

CareerBuilder continues to make a appropriate investments in maintaining its leadership as a one-stop shop for personnel solutions, and last month, it acquired Oracle, a leader in employee background checks. Adding top-tier capabilities in yet another piece of the HR puzzle will attract even more employers to CareerBuilder's one of a kind platform.

We saw progress that CareerBuilder in the first quarter as total revenues were down just 2%, improve from a 5% decline in the fourth quarter last year. We anticipate continued innovation and significant growth in the SaaS business and for CareerBuilder more broadly and look forward to turning the revenue corner in the second quarter.

Matt will be providing a comprehensive update on the quarter and the opportunities that lie ahead for CareerBuilder later in the call. So at this point, let me turn it over to Dave Lougee for comments on TEGNA Media..

Thank you, Gracia. On previous calls I forecasted a record year for TEGNA Media. So far we are well on track. Political revenue in the first quarter finished at a record first quarter level of $15.7 million.

As we look ahead to the general action, our market footprint is a healthy mutual fund of strong swing states, like Ohio, Florida, Colorado, North Carolina, and Virginia. Additionally and significantly a Trump or Cruz nomination on the Republican side will very likely expand the number of U.S.

senate and the house seat that will come into play in our market and the tax spending for the control of Congress will almost certainly be unprecedent.

Back to the quarter, the increase in net revenues more than offset a Super Bowl decrease across the TEGNA stations specially last year the game aired on our 17 NBC stations versus our 11 CBS stations this year.

So even though the year to year Super Bowl dollars are down simply due to the network change, TEGNA's Super Bowl stations performed very well. Our Super Bowl advertising was 45% above the last Super Bowl pro forma in 2013. Excluding this Super Bowl delta for revenue finished up slightly above last year for the quarter.

As I previously noted we have several initiatives underway which we expect to contribute 25 million to 30 million in EBITDA on 2016 and continue to grow from there. One of those initiatives and the fastest growing aspect of our core business is hatch revenue.

Those are dollars associated with the sales of fully integrated, multiplatform marketing campaign, the target clients marketing budgets versus the more traditional transaction based advertising budget. In the first quarter alone we close 81 campaign deals compared to 83 all of last year, and its ramping fast.

The value of those deals we close at the first quarter was more than double what we closed in the fourth quarter. Just to give you sense for how the hatch program is resonating, we've sold one single campaign, the ten differently verticals.

So this ability to develop and produce local integrated marketing campaigns at scale for through a centralized service in Dallas is becoming a game changer for us and getting new local marketing dollars that wouldn't have been available to us in the past. Our progress on revenue front is supporting brand new approached to content as well.

We’re in the midst of a large scale content transformation effort that centers around the development of original programming for every screen. In the entertainment and syndication space, we are on track; we are on track for a Fall premier of T.D. Jakes. T.D.

Jakes is a unique voice in American culture and the program is already showing signs of success. We'll be clearing this show on 53 stations, 30 of those are TEGNA stations and 23 are non-TEGNA stations from 13 different stations groups.

And then our local news time periods renovating there too, as I discuss last quarter KARE-11 in Minneapolis, we replace the popular syndicated show at the 6.30 pm time period with an all new innovative program called Breaking the News. This unique talent driven interactive newscast has become a hit in a very short time.

The audience response and revenue gains generated by the show are strong and we expect to see $0.5 million incremental revenue above the show it replaced. We're also proud of our team in Atlanta.

WXIA created the groundbreaking digital-only series, called Inside the Triangle, which documented how Atlanta's wealthiest suburbs were impacted by teenage heroin addiction.

We initially released the Triangle only on digital platforms, and it just first week, it was discovered by many, many viewers, series attract 4 million page views and 200,000 video views in just that first week.

And then from digital we migrated the series to the linear network where it again received tremendous audience response and spurred a national dialogue around heroin addiction.

And last week, a one-man band investigative journalist from Atlanta won a prestigious Peabody Award for an investigative series on the broken 9/11 emergency system in Atlanta, a series that used all platforms to engage and inform our audience. This type of innovation, especially in digital media continues to be a key area focus for us at TEGNA Media.

We're leveraging new digital and social technologies everyday to improve and reinvent our existing content. We're working with various new digital partners such as Megaphone and [Indiscernible] which allows us to engage in real time poling and social interaction with our audience live inside our newscasts.

Alongside our content innovation efforts, our new monetization strategies, in Q1 we were the first station group to participate in Facebook's instant articles beta test. Off-platform publishing is a growth areas for us that we aggressively pursuing as a business and marketing strategy.

TEGNA media is offering a high level of sophistication and urgency. We're maximising the benefit of our traditional model, but more importantly we're leveraging the power of disruption to generate new ways of connecting with audiences, advertisers and business partners. And with that, I'll turn it over to Matt Ferguson for CareerBuilder..

Thanks Dave. We're off to a good start in 2016 seizing the opportunity at hand as we move aggressively into HR Software-as-a-Service. As I mentioned in the past CareerBuilder built the world's first and only pre-hire platform. There is literally no one else in the industry who can offer the same breath of advertising, software and service in one place.

We are delivering the most innovative recruitment experience in the market and customers are very excited because our platform help them hire faster and easier than ever before. In March of this year, CareerBuilder made a strategic move to expand its scope of that pre-hire platform offering.

We acquired Oracle, leading provider of background screening and drug testing. This allows us to tackle another critical step in the recruitment process. With our combined technology expertise, we're going to accelerate growth and profitability for this valuable service. As a deal closed in March Oracle had a de minimis impact on Q1 revenue.

We're still only a month, a little over a month and operating the business, so as we spend more time with Oracle we have more guidance on full year impact the next time we speak.

CareerBuilder also continues to evolve at the Business, working with employers and consumers in new ways that are differentiating us in the market having a positive impact on revenue.

In the first quarter our revenue totalled $171 million, that was down 2% year-over-year, currency didn't have big impact in Q1 when you back our currency, we were down less than 2%. This is improvement compared to the fourth quarter where revenue decline 5%. Our software solutions continue to experience strong growth.

Software invoicing was up 12% year-over-year from December through March in North America. When you look customers under contract that number grew 11% year-over-year in the first quarter in North America, but there's great momentum this business.

As we look forward its important to note that we recognize our job positing business will continue to experience pricing pressure at the unit level in 2015. We've reflected that in our projection.

Though the price per unit will be lower there's a good opportunity to increase job posting inventory on our site, as we go after mainstream, high volume job. CareerBuilder continue to rollout new cutting-edge software solutions in the coming month and pursue acquisitions to enhance and expand our offering.

We fully expect double-digit growth in SaaS-based product this year, resume database and our employer services. We're confident that this lead to revenue growth in the mid single-digit in 2016 and 10% growth by the end of 2017, as CareerBuilder modernizes and transforms the way companies recruit.

With that, I'd love to hand it over to Alex Vetter, CEO Cars.com..

Thanks Matt and good morning everybody. First of all, I'm excited to report that Cars.com's retail revenues were up nearly 10% in the quarter with growth driven by higher dealer market penetration and new product sales.

Our national revenues were also strong, up almost 8% due mainly to an increase in display advertising by auto manufacturer, including the impact of affiliate or wholesale revenue performance our revenues were up 6%.

Last year you may recall, we cycled through a one-time wholesale price increase with our affiliate partners and continue to work with them to improve their performance, but we are on track deliver 10%, the new product development and continued innovation.

You may have seen that earlier this year we release new research to support Cars.com influence 36% of all vehicle sales in 2015 in the United States. We continue to change the value equation in the market by providing a bridge between consumers, online shopping behaviour and offline sales.

As Cars.com work to illustrate the impact that we're having on walk in traffic to local dealerships across the country. Our sales, marketing and product teams achieve the record-setting performance at last month's national auto dealer association conference with several major accomplishments.

First, our sales team realize more than 1.2 million in annualized product sales, exceeding our goals by over 12% for the three-day event in Las Vegas recording the most successful weekend at NADA and Cars.com's history. During NADA we officially launched two mobile focus solutions to bolster our position.

First our sale and trade product which allows consumers to sell their vehicles and help dealers acquire inventory via new mobile App, made a debut at the show and really posted strong results, and we officially launched our Lot Insights report for dealers which helps them quantify the influence we have on walk in traffic at the dealership using defence technology.

We're currently the first in the market with this new technology and product generation and we're working now with both dealers and auto manufacturers to leverage these new insight to help shift their media allocations towards digital.

During the quarter we were also recognize for industry leading successful website as we've move our entire business more toward the responsive platform to serve consumers, however they chose to shop. Cars.com was ranked number three in the J.D.

Power third party automotive website evaluation study placed admirably as the number one marketplace site and only behind two narrowly specialized niche sites. In addition, we were recognize the only third-party site in the category that its transition to our responsive design.

Now that responsive design has taken place, we're eager to see the positive effect in both our consumer experience, our traffic and our SEO. Lastly, we continue to bolster our service and repair product suite and our current piloting new feature.

These features will provide another channel for franchise dealers and auto manufacturers to promote the service offerings that they have and to capture a new audience of consumers and a new segment of revenue.

The service and repair industries are fairly large and unaddressed market estimated about $250 million that we've had strong success starting 2016. We'll continue to make our investments in the sell and trade platform, our service and repair offering as well as new innovative mobile solutions.

Overall, there was a great quarter for the business and set the stage for continue growth. I would now like to turn it over to Victoria.

Thanks Alex and good morning everyone. As Gracia has already we're off to a strong start, what we expect to be a terrific year for TEGNA. We're very pleased with the strong performance of our businesses across both media and digital segment.

Before I review our consolidated financial results as well as capital allocation during the quarter, I'd like to note that they were just a few operating special items in the quarter which totalled $10 million primarily related to a TEGNA Media voluntary early retirement program to begin in first quarter and we'll conclude a bit later this quarter, which reduced GAAP EPS by $0.03 per share.

Now let's briefly review the operating results for the quarter. As a reminder, although I would be focusing on our non-GAAP results today, you can find all of our reported data and comparatives in our press release. With solid performances by both media and digital segments we achieved earnings per share of $0.45, an increase of 88% over last year.

Total company revenue was $780 million were up 7% year-over-year. On a pro forma basis excluding impact of PointRoll which was sold at the end of last year, total revenues were up 8% and in line to achieve our full year projection.

As you've seen from our release this is driven by robust growth in the media segments through transmission revenues and record first quarter political advertise revenue as well as continued growth in Cars.com revenue.

During the quarter, total company operating expenses of $569 million were higher by about 2% over last year mainly due to higher media programming fees, as well as assessment in growth initiatives within both, the media and digital segments.

These were offset in part by significant reductions in corporate expense, reflecting the absence of publishing related unallocated costs continued efficiency efforts. Now, let’s turn to a more detailed review of media and digital segment results.

TEGNA Media revenues increased 12% year-over-year at the high end of the guidance we provided during our last earnings call, driven by significant growth in retransmission revenues and record first quarter political advertising as well as higher digital revenue.

As Dave mentioned, the Super Bowl revenues this quarter was negatively impacted by the network change from NBC to CBS this year. Excluding the impact of Super Bowl revenue, media segment revenues would have been up by about 14% compared to the first quarter of last year.

Retransmission revenues boosted by agreements negotiated at the end of last year, as well as annual rate increases with an existing agreement continued to drive revenue growth within the media segment, up fully 33% to a historical high of $147 million in the first quarter.

We will be negotiating additional retransmission agreements this year, which reflects 44% of our distributed subscriber base. Political advertising revenue during the quarter also posted record high results of $16 million, up 151% compared to the same quarter during the last presidential election cycle on March 12.

Beyond this TEGNA Media digital advertising revenues were also up 16% during the quarter, driven by digital marketing services, which continue to gain traction across all our television stations as well as G/O Digital sales, extended-reach networks and national digital revenues. Now, focusing on second quarter expectations for TEGNA Media.

Based on current trends, we anticipate increases in retransmission revenue, political advertising and digital revenue to result media segment revenue growth of 10% to 12% in the second quarter of 2016, compared to the second quarter of 2015.

As you would expect, revenue growth will in part be dependent on the timing of ad spending both within the presidential campaigns as well as the contests in both the House and the Senate over the balance of the year.

During the first quarter, media segment operating expenses were up 15% year-over-year, primarily due to increased programming expenses and investments in our digital sales initiative, including a sales force expansion with newly launched product offerings.

In the digital segment during the quarter, digital segment revenues on a pro forma basis increased by 4% year-over-year, reflecting continued growth and new product launches at Cars.com.

These are offset by revenue reductions, transaction-based product lines at CareerBuilder, as they continue to transition towards higher margin, software-as-a-service solutions to build a leadership position in that space.

As Matt mentioned, CareerBuilder revenues were down 2% year-over-year but improved sequentially over fourth quarter of last year and we expect the growth rate to continue as the year progresses with revenue growth projected to be in the mid single digits by the end of 2016.

Cars.com revenues sold by its direct sales channels were up 9% during the quarter, including the impact of affiliate revenue performance, revenues increased by 6% year-over-year, reflecting ongoing strength of market penetration with their direct sales markets and bolstered by the continued success of new products such as RepairPal Certified and Event Positions.

National revenues were also strong, up almost 8% due to an increased display advertising by auto manufacturers. With the new product development and continued innovation as well as strong organic growth, we are expecting Cars.com to reach our previous projection of 10% year-over-year revenue growth for 2016.

Digital segment operating expenses were up 2% due to an increase in expenses, primarily reflecting accelerated investments, sales force growth initiatives, slightly offset by the absence of PointRoll.

Overall, as a result of the solid performance of both segments, we achieved solid adjusted EBITDA of $264 million in the quarter, up 16% over the last year and our EBITDA margin was 34%, up 260 basis points compared to last year.

During the quarter, our capital investments were $16 million, reflecting our ongoing commitment to reinvestment priorities and includes digital development, media content, product integration and platform enhancements, including automated sales tools, order tracking and other critical products.

You will also note that in the first quarter our overall tax rate was 32%, including the benefit of implementing the early adoption of a new accounting standard, ASU 2016-09 that changes certain aspect of the accounting for employee share-based payments in order to improve transparency.

As a result, all excess tax benefits and tax reduction shortfalls will now be recognized as income tax expense or benefit from the income statement as opposed to balance sheet as in paid-in capital.

The adoption of this accounting standard reduced the first quarter income tax provision by $4 million and the tax rate by 3 percentage points with an EPS benefit of about $0.02 for the quarter.

While we need to continue to assess the impacts based on equity price fluctuations, the projected tax benefit for the year is about in the range of 1 percentage point at the current stock price, which would put our tax rate for the year at around 34% to 35% range.

This will obviously, we need to continue to be recalibrated each quarter as the stock price of the market fluctuates. During the quarter, strong cash flow from operations is used to fund accelerate share repurchases of $75 million at an average price of $0.389 per share.

Dividend payments of $31 million and investments of business initiatives of $60 million. At the end of the quarter, our long-term debt stood at $4.2 billion, cash on the balance sheet was $79 million. With that, I will turn the call back to Gracia for her closing remarks prior to Q&A..

Thanks, Victoria. When we formed TEGNA, we had a vision for what it could be, a plan for how do we achieve our goals and a talented group of people that were passionate about making these things happen.

The hardworking teams at TEGNA Media and TEGNA Digital continue to produce strong results, as they innovate and forge new paths toward growth and enhanced value.

Now, while we still have a lot more work to do and the journey never really ends, as we all know, we are already starting to see the fruits of our labor and I’m more confident than ever of reaching the goals we set out to you in our investor day last summer. With that, I’d like to open up the call to questions.

Britney, take it away?.

Thank you. [Operator Instructions] Our first question comes from the line of John Janedis with Jefferies. Please go ahead..

Thank you. Dave, maybe one for you to start. Very strong retrans number and I think the top end of the guidance for the year is 30%. So, given the 44% renewing, wouldn’t the $147 million for the quarter improve going forward meaning that’s conservative.

And then on the ads front can you talk about what you’re seeing away from political, meaning does the implied second quarter ad-growth for the segment suggest growth similar to the first quarter on a year-over-year basis?.

Yes. I will take the retrans question first, John. So, those 44% subs that we referred to before are towards the year end. So they won’t have much of any impact on calendar year 2016 at all. And as it relates to the ad front, yes, you are exactly right I think we are seeing transparent, pretty much very similar to 1Q..

Yeah. John, the only thing I would add is that we had talked about 30% growth on our last earnings call and retrans. Obviously, we haven’t entirely completed some of the ins and outs and we did slightly better than that but there is some small true-up that happened in the first quarter.

So, I don’t see any -- us falling away in any way for from that number but there is always little puts and takes in the first quarter. But we are very comfortable in 30% plus retrains growth for the year..

Okay. Thanks. And maybe one separate question as it relates to Cars.com trends.

I think you talked about price increases hitting in the first quarter and I'm wondering to what extent you were able to push them through and if so, were volumes in line with expectations?.

Sure, John. First of all, the majority of price increase discussion that we’ve had has been on our one-time affiliate step-up in rates that happened first quarter of last year and we’ve cycled through that largely on the wholesale channel.

On our direct sales or retail sales standpoint, the rate increases are spread throughout the year on a very large customer base during the renewal cycles for those individual customers.

So, what you will see with new product innovations that will continue to have bundling of both new products and pricing together, making it hard for us to breakout any specific number on an individual basis..

Although you might want to share with him the growth in dealer customers..

Yeah. Well, two things. I mean, if you try to isolate our same-store sales, we are seeing strong growth in our overall average revenue per dealer year-over-year and then we also continue to see growth in our total customer counts. So, both on price and volume, our total customer count was up over 2.5% for the first quarter..

Okay. Thanks so much..

Thank you. Our next question comes from the line of Kyle Evans with Stephens. Please go ahead..

Hi. Thanks for taking my question.

Maybe for Dave, sort of a look down into the local versus national within core and any kind of geo or sector strength and weaknesses and I've got a follow-up on cars?.

Yeah. Local and national were pretty close for us in the quarter as reported, though a little bit of that is misleading as we continued. We continued to take some pure transactional agency dollars and moved them out of the local column into the national column and have our rep handle those as we have our local sellers focus more on the local side.

And your follow-up question I apologize was..?.

Well, there was another one on geo and sector strength and weaknesses within auto..

Yeah. So, category wise, auto continues to be up. Insurance category has been -- continues to hurt us on a temporary basis because we are lapping that ObamaCare spending that existed in previous years so that’s been a significant issue in the quarters and was again in first quarter. It will be a little bit at second quarter.

But overall from a geography standpoint, Texas has been hurt by the oil price issues, especially the Houston market although we think that’s typical and they have showed an ability to rebound in the past as a region..

So, a couple of follow-up questions on Cars for Alex. I was looking back to the notes and you had a 50% plus affiliate increase in 3Q of last year. And it looks like it's been declining ever since.

And I guess my question is, is that a surprise is that something that you guys purposely were trying to push down through the affiliate channel? And then as a direct follow-up to that, the last time you gave an update I believe direct was 78% of Cars and I was wondering what the split was today?.

Let me answer the first question and then Alex will take the rest.

With respect to the increase in affiliate revenue of 50% plus, that was a one-time change in our affiliation agreements that we did when we bought Cars.com and so we were able to prior to us owning it when we were all partners, each one of the investors wanted most of the earnings to come to their respective company rather than to reside at Cars.com.

So the affiliate agreements were more favorable to the various owners P&Ls than Cars.com P&L. When we bought out the rest of the owners, we changed the affiliation agreements to more arms length agreements and that gave rise to the big jump in that 50%, 60% affiliation revenue that we saw.

What we talked about at the time was on a pro forma basis that in fact growth was in the 11% to 12% range.

But Alex?.

Yeah. Kyle, your follow-on question was as a mix standpoint, our wholesale channel only represents about 25%, 24% of our total revenues. The vast majority of our revenues remain direct. There has been very tough to shift those dollars on such a big base but they slowly been migrating towards more direct volume..

And let me just add to what Alex just said with regard to the affiliates. We’ve had some very good conversations with each one of the groups because we and they recognized that they are literally leaving tens of millions of dollars on the table. So, I know that there is increased focus at each one of those affiliates to improve that performance.

As far as Alex and others, they are more than willing to give them some help in any ways if they can. So, we do expect improvement on the affiliate performance beginning in the second quarter..

Correct..

Thank you..

Thank you. Our next question comes from the line of Alexia Quadrani with JPMorgan Chase. Please go ahead..

Thank you. I’m just circling back on the commentary earlier about 44% of retrans renewals up towards the end of this year.

I guess with that sort of nice tailwind going into 2017, I guess, should we assume that you have more than enough to sort of offset the reverse comp TEGNA NBS stations earlier on in the year on that basis?.

Well, we will have a very -- we will have a nice topline, continued nice topline growth. We’ve always said at the beginning, we do have this one fairly significant hit coming from the former TEGNA NBS stations that they start paying the reverse comp next year as we have been talking about and modeling ever since investor day last summer.

But we do expect nice topline growth..

And I think that we’ve all appreciated that NBC being our very largest affiliate group and is creating more than its proportionate share is contributing more than its proportionate share to us.

One of the reasons why Dave and his team have been so focused on a number of the initiatives that they shared with you on investor day is that we appreciate that we have that gap in ’17 and so we are doing a lot of work to help us.

There will be a drop-off in ’17 but then in ’18 and beyond, we expect with the initiatives that we will continue to see the kind of good growth that we had seen previously and margin retention..

And just I had a quick follow-up on CareerBuilder. Thank you for all the color you guys provided.

But any, I guess further color you can give us in terms of how much visibility they have in the CareerBuilder revenues in Q2, like when you will get a sense of if it’s really sort of fine?.

Yeah. We believe that we will be up in Q2. Job postings, I think Q2 to Q2 of last year will be down but you will look at software being up, services being up and the resume database being up and so overall, we believe we are going to be up in Q2 this year versus last year..

Yeah. You may go more specifically on the bridge that you shared with them previously..

And so some of the bridge that we shared in the past, in last year we were hurt quite a bit by currency, that was less though in the first quarter but I’m not here to predict the currency. The accounts we moved that we talked about have been weighing on the results. They were small transactional advertising accounts.

They were down over 30%, looking at most months last year we knew they were going to weigh on first quarter results. This month, they are down less than 10%, so they will be around mid single digits and we hope they would get flattened and not win the business by May or June and we look like we are on the track to do it.

And the biggest weight on last year’s results was the source and screen business, which has done almost $20 million. We thought we would be up 10% in March. We weren’t but we were up single digits in March after being down year-over-year January. February, we are going to be up single digits.

In April and May, we may be up looking at what’s been booked and what’s out there, double digits when we look at June. We have a strong pipeline. We had talked about in that bridge that we would be up $7 million in 2016 in source and screen but with 2015, we still believe we will do that and the trends look good there..

That’s very helpful. Thank you..

Thank you. Our next question comes from the line of Doug Arthur with Huber Research Partners. Please go ahead..

Yeah. Thanks. Two questions. Dave, cash cost in the media segment were up 16%.

Is that the new norm and can you provide any color on how that breaks down between programming and some of these sales force initiatives and then I have got a follow-up with cars?.

So, I think Victoria had talked last time that outside of some of these other programming expenses and things that were in the single digits on our expense base and that continues to be true.

A lot of the expenses are related to the investments that Victoria outlined as well as we’ve got the expenses this year of standing up our digital business that we’ve had to invest in as a result of the spin..

Okay. And then Gracia, you had mentioned many times that the cars business would be lump quarter-to-quarter. You are still sticking with 10% for the year. Can you -- any color on what you are expecting in Q2? Thanks..

Yeah, I will ask Alex to jump in here but I think we will see -- as a headline, we will see improvement over what we saw in the first quarter. They had a good close to 9.5% growth on the business that they controlled. We expect the affiliates to improve their performance in the second quarter and following that.

Also, some of the new products that Alex has mentioned that they really launched at the most recent NADA I think we will gain traction over the course of the year. So, I think that we continue to be, as Alex said previously comfortable with that 10% growth rate.

But Alex?.

Yeah. I’d just add to that. I think starting the year in automotive, many of the automotive companies had mixed feeling about how this year would turn.

I think now that there is a full quarter under the belt what every one is seeing is a lot of optimism in the market, the SAR projected again in over 17 million, even used car sales on the rebound as well.

So, we are seeing a very healthy macro market in automotive and we’ve got lots of new solutions that directly meet our customer’s needs, so we feel really good about the full year guidance. Thank you..

Thank you. Our next question comes from the line of Barton Crockett with FBR Capital Markets. Please go ahead..

Okay, thanks for taking the question. I wanted to ask a little bit about the add trend there and first I was curious we’ve seen very strong obvious national interest in the political cycle on the national news network.

I was wondering if you are seeing any similar kind of interest in terms of growing viewership at the local TV station level for the news programs whether that’s benefiting or kind of unaffected and whether that’s having any impact on the add trends that you are seeing at the station level?.

I think in the markets as the year goes on where there are very contested local races and senate races that it does and will lift viewership as we've seen in the years past. I think the national race doesn't hurt, but I think in the early stages of the year it’s a national versus local only store that doesn't have much impact..

Great. And then if I can follow-up on the political advertising, one thing that's interesting in this campaign is you have one candidate Trump driven by social media more so than advertising. You've had obviously strong growth against kind of smaller base here in the first quarter.

Given the prospect of maybe Trump carrying this the distance in the election, do you feel like the type of strong growth that you saw in the first quarter something that's sustainable or into what extent does the Presidential mix even matter and is it driven more by congressional races?.

No. It’s a good question. I think as Gracia outlined earlier, vast majority of our dollars do and will come always in the third and fourth quarters, all against general election.

I think the – whatever Trump doesn't spend I think will be more than offset by the money that Hillary gets not just for a campaign but for the packs and then the other piece that I mentioned which is going to be significant, because if those same donors that would have given their money to Republican candidate in the past they are now going to ship their spending to Congress and as I mentioned Congress is now going to be a broader play with more senate and house races in place as example for instance we haven't seen John Mccane's seat be a contested seat with much spending in ever.

And right now it looks like it will, that just one of many examples. And I think on the house you're going to see what had been nation wide maybe 42 seats that were contested each two years, because of [Indiscernible] had been done over the years would now could be very much expanded number..

Just reiterate what Dave said, most of the dollars again between Labor Day and Election Day. In the second quarter we won't see – we saw very good primary dollars in the first quarter, because were in those market and there was an expanded number of markets that actually mattered in the first quarter.

In the second quarter where the primaries have been yesterday and in New York and other places, in Indiana we just don't have much of a presence.

But when the general spending kicks in which we would anticipate given the results of last evening probably it will be happening towards the end of this quarter that's when the dollars will start to be much more meaningful for TEGNA right through the election.

So, the second quarter maybe sort of a low in spending unless there's a lot of spending towards the end of the quarter, towards the general election..

Okay. That's great color. Thanks a lot guys..

Thank you. Our next question comes from the line of Marci Ryvicker with Wells Fargo. Please go ahead..

Thanks.

It sounds from your comments, Dave, that core spot advertising might be a little bit stronger in the second quarter than it was in a first quarter, so I don't know that's a correct assessment, and if it is, is there anything particular driving that? And then the second question, can you actually give us the net Super Bowl revenue numbers?.

Yes. I have that somewhere. So many companies find….

Wasn't it about a difference of five?.

Yes. The delta was about 5 million net, Marci, you actually forget the two number, the NBC and CBS number, but the delta on a two basis was about $5 million net. And your question on core, no, actually I did mean, what I said was its about the same..

Okay..

I would call it just about the same as one here..

And did April start soft or it was the same coming into the quarter as you ended Q1?.

I think the start of April didn't look much difference in the end of Q1. There were couple of big buys that came into large markets at the very end of Q1. But overall it's been pretty much the same..

Okay. That was it from me. Thank you..

Thank you. Our next question comes from the line of Michael Kupinski with Noble Financial. Please go ahead..

Thank you. Coming from the NAB, I understand that political advertising has now been booked into the third and fourth quarter which maybe about a month early. I was wondering can you discuss whether the political that been booked related to packs or is it candidate money at this point.

And is the money at this point related to senate and the house races or is it Presidential money.

And then finally, traditionally how much of your political spend in the third and fourth quarter is typically related to Presidential candidates?.

Okay. Let me take the first one first. The answer is all of the above the money that's prebooked and third and fourth is both candidate and issue, not a lot of that presidential yet for the reasons we outlined earlier, mostly against the senate races as well as some local issue money.

But there is, I think Hillary's pack is starting to lay some dollars down beyond this quarter. From a presidential what that represent as percentage of the back half of the year often has do with how robust the senate seats are, because the senate bring, senate seats bring enormous amount of money.

So, I think for instance, in 2012 presidential was only about a third of our total spend, just the little bit more than a third, and that would probably be somewhat of the percentage of what we see in the back half of the year..

Presidentials and candidates or….

President and candidate and issue together..

Okay..

Yes.

And then, how does that relate to maybe the past cycle because I know that the pack money in the past cycle was extremely strong which obviously there is no lowest unit rate for that type of money that comes in and we just wanting in terms of how things are fairing as it goes towards the third and fourth quarter, if the pack money is – now we're starting to see that kind of flow in a little bit more aggressively, if we’re can anticipate that we're going to see those rates rise.

I mean, I just kind of have their tone how things are setting up?.

Yes. And that's the general nature of these all the time. That's right. The rates, there is no cap on the rates on that issue money. And the issue money will be larger volumes than the candidate money in terms of what's coming in.

So yes, you will see and its build into our pricing system, but you'll see as the third quarter starts and then right on through to election day that they will be a ramp in pricing..

Yes, I mean, the other thing is supply and demand obviously Mike, and when you look at for instance in 2014 $92 million was written in the fourth quarter but it doesn't really the whole fourth quarter, its from the end of December to November 5th or whatever.

So as you can appreciate when there is that kind of demand, pricing response to that and then you're absolutely right with respect to the pack money that is not lower sooner rate, and lower sooner rate is rising in any of that because incredible demand.

We typically write 80% to 90% of our political in the third and fourth quarter when we say the fourth quarter its really that first month of the fourth quarter..

And to Gracia's point those last five weeks – four five weeks in election day will be the highest quarter even though its only five week of political..

So it looks like the tone of the political dollars that are coming in certainly very encouraging a this point, I mean it looks like the cycle over cycle, look like its very encouraging and specially its been booked early and it looks like pack money is coming in pretty nicely at this point..

And I would also add not just our own numbers in the first quarter but the spending in the first quarter just overall for the industry is representative of what the money that's going to be in fiscal..

Perfect, okay, thank you so much..

Thank you. Our next question comes from the line of Jim Goss with Barrington Research. Please go ahead..

Thank you. Question about broadcasting M&A, I'm wondering how important is this relative to your other initiatives like programming and the things the Cars.com and CareerBuilder and also what sort of impact you think the auction has on it, and does the next media general deal.

Take a couple of major players off the table so it opens the gates up for you little or is the desperately in markets size you tend to deal in vis-à-vis them make it a non-event?.

Jim I would say with respect to broadcast M&A that when we look at all the other initiatives and broadcast M&A we definitely are focused on that opportunity.

We believe thought that there will be an opportunity that is opportunistic and isn't going to be similar to what we did when we bought Belo, given the tightening of the rules around of JSAs and other factors out there.

But we believe that we run television stations very, very well, highest margin in the industry, great programming just a week or so ago, the most Emmys of any – excuse me, most [Indiscernible] of any broadcaster, so both from a content standpoint as well as a financial standpoint Dave and his team have just done a phenomenal job.

So we believe that there is an opportunity there for us, but we are very careful and very opportunistic about that. We've got, still we got plenty of room under the cap, so that is not in anyway of gating factor. Its more of a constrains of some of the JSA rules, the new JSA rules and other things that really have constrained that.

I'd say that the auction definitely is having an impact on M&A given that I think everybody's General Counsel has advised them that there is to be no conversations and there are some pretty specific conversation from the SBC around that particular issue.

I do believe it has had and will have until it's over a dampening effect on the M&A marketplace and I'll ask Dave to comment on next media in general..

Yes. I mean, that deal will or just like you said consolidate some players in the industry, but there is lot of other out there and I would say as it relates to small markets or big markets.

I think it really will come down – comes down to the nature of the specifics of the company and what those opportunities do or don't look like for us from a synergy standpoint. But as Gracia said, the efforts and the capabilities that we c centrally do work with really any television station..

Okay. And follow-up on the reverse or retransversus reverse comp discussion you had earlier, beyond the NBC perhaps you're expecting for 2017.

Will the reverse camp kick-in pretty much simultaneously with retrans renewals after that and does that tend to have a dampening effect and the type of growth you've hyped? I'm sure it has to at least somewhat?.

Yes. I think if I understand you correctly Jim, I think that there is really no connection between when we do our renewals with the MVPDs and when our affiliation agreements come up. So, we have completed the negotiations on all of our networks.

Obviously our NBC former TEGNA or not former TEGNA but original TEGNA stations, it won't go into effect until January of 17, but those are sort of independent of one another..

Okay. That was my question.

So, they are not sort of tie together and the concept going into your renewals?.

No..

And the last thing with Mike's discussion about political, if assuming Trump wound up with the nomination and I'm curious what your expectations are in terms of the political revenues from that side of the table? How you expect the Republicans to get together with him and whether that become more of a factor than it has obviously not meant to this point?.

Yes. I just to amplify what I said earlier, so it remains to be seen if Trump is the Candidate what Republican parties going to do. I would just simply say, the money that's going to be in the system is going to be in the system whether it's Trump or Cruz how is going to impact and how its get allocated.

I think what's you're going to see if Trump is the candidate set a lot of pack money, a lot of the private donor money will move to Congress, because if they fear that they've lost the Whitehouse than there will be a very big effort to save the senate. And I think it makes all the sense.

And for us again that's not concerning as we decent senate footprint and because of Trump it will be an expanded senate footprint..

Yes. But I think regard to Mr.

Trump whether he's the candidate or not, whether he ultimately win or not, I think that probably he's not going to coat tails for the senate or house candidates that some other presidential candidate have had in the past, so I think as David saying, there has to be a lot more focus and they'll be more seats I think that as I said earlier that will be potentially at risk that we did even imagine, six months ago when we were all thinking about it.

So I think as Dave said, the dollars are going to be in the system. I think Mr. Trump by the way if he's the candidate he's going to have to spend. I mean, you know they will be spending. I believe that Secretary Clinton will also be a big spender and there could be expanded spending on the senate and house side..

All right. Thanks much..

Thank you..

Thank you. Our next question comes from the line of Tracy Young with Evercore ISI. Please go ahead..

Hi. I have three questions. The first relates to Olympic.

When you would just to see the dollars or have you started to see them?.

We already have. We have been prebooking starting last year..

Okay. Thanks.

In terms of the buyouts is there any number that we should be thinking about in terms of the expense savings annually and now doing ramp up of salesforce et cetera?.

Yes. There is actually – this is one of those situations where the buyout wasn't done as a cost saving opportunities. It was very much done as a one of the skill set and what do we need to see in the work force to propel the initiatives we have and to continue to bring up into the future.

And so, I don't know if you notice but at the same time we have that in place. We were also advertising for new talents et cetera. So there maybe a few dollars that will come to the bottom line, but that isn't the intention of it.

It is really to bring the work force to where we needed to be, to be effective in a new word and in helping us to maximise the opportunities we have with a number of the initiatives that Dave was talking about both on the content side as well as in other areas..

Okay, great. And lastly, obviously the stock is down I think your comment on broadcasting are largely fine.

As we look at Q2 for the digital, we've talked a little bit about the revenue side, expenses were up 2% this on the digital, should we expect the same for Q2 as well? Is that a good run rate?.

On the expense side?.

Yes..

I think there will be some give and take. We talked about – we have been talking about the fact that with respect to CareerBuilder, we talked about this last year that we would be spending $10 to $15 million of additional dollars on sales resources as well technology resources.

I know that Alex has a number of technology initiatives in place, so the expense side of it may vary a little bit but its all with regard to the growth initiative that we are ramping up in a pretty meaningful way but I think you will also see as Alex and both Matt and Alex talked about earlier we expect that CareerBuilder will turn the corner on the revenue side and Alex I think believe that will see a bit more traction both on the direct side as well as hopeful on the affiliate side, so you will see revenue to be better in the second quarter than it was in the first quarter..

Okay. Thank you..

I think we've got time for one more question..

Thank you. Our next question comes from the line of Barry Lucas with Gabelli & Company. Please go ahead..

Thanks very much Gracia. Kind of an odd one, I was on the Capella Education call yesterday and they mentioned a partnership with CareerBuilder they get a guarantee a job placement for students and I'm just trying to understand Matt how that helps CareerBuilder and how does that dove tail with the soft order as a service model and build that out.

Any color you could provide would be helpful? Thanks..

Sure. We have advertising, we have software and we services as a revenue, so let's start if some of the advertising and even some of the software driven by the consumer side.

So on the consumer side we find a job today, because of all of our data we tell them about the job of the future and now with Capella we're helping them get upskilled and reskilled for 21st Century job with 21st Century skill. So it helps the consumer value proposition.

On the business side as we talked about we have service today that sourcing screen business where we help find people for job, now we're actually skilling the people up and place, I mean we have both big companies and staffing firms willing to pay us over $1000 per placement once the people get through the program. We just rolled out the first one.

We launch two more last week. We're launching two more. I think in June or July we hope to continue to launch through the year. We have couple of hundred people in the first program now. So, to me it’s a new way to add value to the consumers and it’s a new way to generate revenue for both companies and staffing firms by upscaling and reselling talent..

Great. Thank you for that..

Hi. Thank you, Barry and thank you all for joining us today. If you have any further questions you can give Jeff Heinz a call at 703-854-6917. Thanks for all your time today..

Thank you. Ladies and gentlemen, this does conclude our conference for today. We thank you for your participation. You may now disconnect..