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Tribune Media Company Reports Second Quarter 2019 Results

NEW YORK, Aug. 9, 2019 /PRNewswire/ -- Tribune Media Company (TRCO) (the "Company") today reported its results for the three and six months ended June 30, 2019.

SECOND QUARTER 2019 FINANCIAL HIGHLIGHTS (compared to second quarter 2018)

  • Consolidated operating revenues decreased 1% to $484.0 million
  • Consolidated operating expenses increased to $410.8 million compared to $391.3 million for the second quarter of 2018 primarily due to higher network affiliate fees
  • Consolidated operating profit decreased to $73.3 million compared to $98.1 million for the second quarter of 2018
  • Consolidated Adjusted EBITDA decreased 16% to $135.4 million
  • Television and Entertainment advertising revenues fell 4% to $298.9 million
  • Core advertising revenues (which exclude political and digital revenues) increased 1% to $276.0 million
  • Net political advertising revenues were $3.0 million for the second quarter of 2019 compared to $20.7 million for the second quarter of 2018
  • Retransmission and carriage fee revenues increased 10% to $173.1 million
  • Cash distributions from TV Food Network were $28.4 million

"Tribune Media's second quarter financial results were strong thanks to continued year-over-year growth in core advertising, digital advertising and retransmission revenues; all of which largely offset the anticipated decline in political advertising revenue during the quarter," said Peter Kern, Tribune Media Company's chief executive officer.  "In addition to the revenue growth in these areas, we were able to keep a tight grip on our cost structure.  As a result, total expenses, excluding the expected increase in network affiliate fees from the Fox renewal last year, were down on a year-over-year basis.

"Our second quarter results reflect the great work that continues to be done by our employees in advance of our pending transaction with Nexstar Media Group-we're very proud of their tremendous dedication.  We look forward to obtaining regulatory approval of the transaction soon and remain on track to close before the end of the third quarter."

SECOND QUARTER AND YEAR-TO-DATE RESULTS

Consolidated

Consolidated operating revenues for the second quarter of 2019 were $484.0 million compared to $489.4 million in the second quarter of 2018, representing a decrease of $5.3 million, or 1%. The decrease was primarily driven by declines in political advertising revenues and other revenues, partially offset by an increase in retransmission revenues as well as higher core and digital advertising revenues.

For the six months ended June 30, 2019, consolidated operating revenues were $939.0 million compared to $933.0 million in the six months ended June 30, 2018, representing an increase of $6.0 million, or 1%.

Consolidated operating profit was $73.3 million for the second quarter of 2019 compared to $98.1 million for the second quarter of 2018, representing a decrease of $24.8 million, or 25%. The decrease was primarily due to an increase in programming expense and a decrease in operating revenues, partially offset by lower amortization expense. For the six months ended June 30, 2019, consolidated operating profit decreased $157.4 million, or 55%, to $128.0 million from $285.4 million in the six months ended June 30, 2018, largely due to the absence of a net pretax gain on the sales of spectrum of $133 million recorded in the first quarter of 2018 as well as an increase in programming expense.

Net income attributable to Tribune Media Company was $63.7 million in the second quarter of 2019 compared to $84.4 million in the second quarter of 2018. Diluted earnings per common share for the second quarter of 2019 was $0.71 compared to $0.96 for the second quarter of 2018. Adjusted diluted earnings per share ("Adjusted EPS") for the second quarter of 2019 was $0.79 compared to $0.99 for the second quarter of 2018.

Net income attributable to Tribune Media Company was $176.9 million for the six months ended June 30, 2019 compared to $225.6 million for the six months ended June 30, 2018. For the six months ended June 30, 2019, diluted earnings per common share was $1.98 compared to $2.55 for the six months ended June 30, 2018. Adjusted EPS for the six months ended June 30, 2019 was $1.38 compared to $1.50 for the six months ended June 30, 2018. Both diluted earnings per common share and Adjusted EPS include a $1 million income tax benefit, or $0.01 per common share, for the six months ended June 30, 2019 and an income tax charge of $3 million, or $0.03 per common share, for the six months ended June 30, 2018.

Consolidated Adjusted EBITDA decreased to $135.4 million in the second quarter of 2019 from $160.8 million in the second quarter of 2018, representing a decrease of $25.4 million, or 16%. The decrease in consolidated Adjusted EBITDA was primarily attributable to higher programming expense at Television and Entertainment driven by higher network affiliate fees mainly due to the renewal of network affiliation agreements in eight markets with FOX Broadcasting Company during the third quarter of 2018. For the six months ended June 30, 2019, consolidated Adjusted EBITDA decreased $32.9 million, or 12%, to $247.9 million as compared to $280.7 million for the six months ended June 30, 2018.

Income on equity investments, net decreased $6.0 million, or 11%, to $46.5 million in the three months ended June 30, 2019 due to the absence of $10 million of equity income from CareerBuilder as a result of recognizing our share of the gain on the sale of one of its business operations in the second quarter of 2018, partially offset by higher equity income from TV Food Network. The Company recognized equity income from TV Food Network of $47.2 million and $42.7 million for the three months ended June 30, 2019 and June 30, 2018, respectively. Income on equity investment, net increased $0.5 million, or 1%, for the six months ended June 30, 2019.

Cash distributions from equity investments in the second quarter of 2019 were $28.4 million compared to $43.8 million in the second quarter of 2018, a decrease of $15.4 million, or 35%. Cash distributions from equity investments for the six months ended June 30, 2019 were $181.5 million compared to $158.9 million for the six months ended June 30, 2018, an increase of $22.5 million, or 14%. Cash distributions from TV Food Network increased 19%, or $28.6 million, in the six months ended June 30, 2019 due to stronger operating performance as well as timing as cash distributions in 2018 to cover our taxes on our share of partnership income were lower based on the reduction in rates from the Tax Cuts and Jobs Act enacted in late 2017. The three and six months ended June 30, 2018 included $6 million of distributions from CareerBuilder, of which $5 million related to the distribution of proceeds from the sale of one of its business operations.

Television and Entertainment

Revenues were $482.6 million in the second quarter of 2019 compared to $486.4 million in the second quarter of 2018, a decrease of $3.9 million, or 1%. The decrease was driven by a $17.6 million decrease in political advertising revenues and a $6.4 million, or 38%, decrease in other revenues, partially offset by a $15.2 million, or 13%, increase in retransmission revenues, a $2.2 million, or 1%, increase in core advertising revenues and a $2.9 million, or 17%, increase in digital advertising revenues.

Revenues for the six months ended June 30, 2019 were $936.0 million compared to $927.1 million for the six months ended June 30, 2018, an increase of $8.9 million, or 1%. The increase was driven by increases in retransmission revenues and core advertising and digital advertising revenues, partially offset by a $22.8 million decrease in political advertising revenues and a decrease in other revenues.

Television and Entertainment operating profit was $99.6 million for the second quarter of 2019 compared to $119.8 million for the second quarter of 2018, a decrease of $20.2 million, or 17%. The decrease was primarily due to a $22.4 million increase in programming expense and a decrease in operating revenues of $3.9 million, partially offset by a $6.7 million decrease in amortization expense as certain intangible assets were fully amortized at December 31, 2018. The increase in programming expense was primarily due to an increase in network affiliate fees mainly due to the renewal of network affiliation agreements in eight markets with FOX Broadcasting Company during the third quarter of 2018.

Television and Entertainment Adjusted EBITDA was $148.8 million for the second quarter of 2019 compared to $173.8 million in the second quarter of 2018, a decrease of $24.9 million, or 14%, primarily due to higher programming expense.

For the six months ended June 30, 2019, Television and Entertainment operating profit was $179.5 million compared to $331.6 million for the six months ended June 30, 2018, a decrease of $152.1 million, or 46%, largely due to the absence of a net pretax gain on the sales of spectrum of $133 million recorded in the first quarter of 2018 as well as a $41.6 million increase in programming expense, partially offset by an increase in operating revenues of $8.9 million and a $13.3 million decrease in amortization expense. Television and Entertainment Adjusted EBITDA was $275.6 million for the six months ended June 30, 2019 as compared to $308.9 million for the six months ended June 30, 2018, a decrease of $33.3 million, or 11%.

Television and Entertainment Broadcast Cash Flow was $133.4 million for the second quarter of 2019 compared to $160.1 million in the second quarter of 2018, a decrease of $26.6 million, or 17%. For the six months ended June 30, 2019, Television and Entertainment Broadcast Cash Flows was $241.3 million as compared to $276.6 million for the six months ended June 30, 2018, a decrease of $35.3 million, or 13%.

Corporate and Other

Real estate revenues for the second quarter of 2019 were $1.5 million compared to $2.9 million for the second quarter of 2018, representing a decrease of $1.5 million, or 50%, primarily due to the loss of revenues from real estate properties sold during 2018. Real estate revenues for the six months ended June 30, 2019 were $3.0 million compared to $5.9 million for the six months ended June 30, 2018, representing a decrease of $2.8 million, or 48%.

Corporate and Other operating loss for the second quarter of 2019 was $26.3 million compared to $21.7 million for the second quarter of 2018. The increase in the loss was primarily due to higher transaction-related costs. Corporate and Other Adjusted EBITDA for the second quarter of 2019 represented a loss of $13.5 million compared to a loss of $13.0 million for the second quarter of 2018.

For the six months ended June 30, 2019, Corporate and Other operating loss was $51.5 million compared to $46.3 million for the six months ended June 30, 2018. Corporate and Other Adjusted EBITDA for the six months ended June 30, 2019 represented a loss of $27.8 million compared to a loss of $28.2 million for the six months ended June 30, 2018.

RETURN OF CAPITAL TO SHAREHOLDERS

Quarterly Dividend

On August 1, 2019, the Board of Directors (the "Board") declared a quarterly cash dividend on the Company's common stock of $0.25 per share to be paid on September 3, 2019 to holders of record of the Company's common stock and warrants as of the close of business on August 19, 2019. However, in the event the Nexstar Merger (as defined and described below) closes prior to the close of business on August 19, 2019, holders of the Company's common stock and warrants will not be entitled to this dividend. Future dividends will be subject to the discretion of the Company's Board and the terms of the agreement and plan of merger between the Company and Nexstar Media Group, Inc. ("Nexstar") dated November 30, 2018 (the "Nexstar Merger Agreement"), which limits the Company's ability to pay dividends, except for the payment of quarterly cash dividends not to exceed $0.25 per share consistent with record and payment dates in 2018.

RECENT DEVELOPMENTS

Nexstar Acquisition

On November 30, 2018, the Company entered into the Nexstar Merger Agreement with Nexstar and Titan Merger Sub, Inc. (the "Nexstar Merger Sub") providing for the acquisition by Nexstar of all of the outstanding shares of the Company's Class A common stock and Class B common stock, by means of a merger of Nexstar Merger Sub with and into Tribune Media Company, with the Company surviving the merger as a wholly-owned subsidiary of Nexstar (the "Nexstar Merger").

The applications for Federal Communications Commission (the "FCC") approval (the "Merger Applications") were filed on January 7, 2019. On February 14, 2019, the FCC issued a public notice of filing of the Merger Applications which set deadlines for petitions to deny the applications, oppositions to petitions to deny and replies to oppositions to petitions to deny.

On February 7, 2019, the Company received a request for additional information and documentary material, often referred to as a "second request," from the United States Department of Justice (the "DOJ") in connection with the Nexstar Merger Agreement. The second request was issued under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"). Nexstar received a substantively identical request for additional information and documentary material from the DOJ in connection with the transactions contemplated by the Nexstar Merger Agreement. Consummation of the transactions contemplated by the Nexstar Merger Agreement is conditioned on expiration of the waiting period applicable under the HSR Act, among other conditions. Issuance of the second request extends the waiting period under the HSR Act until 30 days after Nexstar and the Company have substantially complied with the second request, unless the waiting period is terminated earlier by the DOJ or the parties voluntarily extend the time for closing.

On July 31, 2019, the DOJ and the States and Commonwealths of Illinois, Pennsylvania and Virginia filed a complaint and proposed settlement in the U.S. District Court for the District of Columbia by requiring Nexstar and the Company to divest broadcast television stations in 13 Designated Market Areas as a condition of closing the Nexstar Merger. This proposed settlement allows the Nexstar Merger to proceed once the court has signed the Hold Separate Stipulation and Order, subject to the closing conditions contained in the Nexstar Merger Agreement, including approval by the FCC.

On March 12, 2019, holders of a majority of the outstanding shares of the Company's Class A Common Stock and Class B Common Stock, voting as a single class, voted on and approved the Nexstar Merger Agreement at a duly called special meeting of Tribune Media Company shareholders.

On March 20, 2019, in connection with its divestiture obligations under the Nexstar Merger Agreement, Nexstar entered into definitive asset purchase agreements with TEGNA Inc. ("TEGNA") and The E.W. Scripps Company ("Scripps") to sell a total of 19 stations (including 10 Tribune Media Company-owned stations, as well as 3 stations to which the Company provides certain services (WTKR-TV, Norfolk, VA, WGNT-TV, Portsmouth, VA and WNEP-TV, Scranton, PA, collectively, the "Dreamcatcher Stations")) in 15 markets to TEGNA and Scripps following the completion of the Nexstar Merger (the "Nexstar Transactions"). Additionally, on April 8, 2019, Nexstar entered into a definitive agreement with Circle City Broadcasting I, Inc. ("CCB") to sell 2 Nexstar stations to CCB following the completion of the Nexstar Merger. The consummation of each transaction is subject to the satisfaction or waiver of certain customary conditions, including, among others, (i) the closing of the transactions contemplated by the Nexstar Merger Agreement, (ii) the receipt of approval from the FCC and the DOJ and the expiration or termination of any waiting period applicable to such transaction under the HSR Act and (iii) the absence of certain legal impediments to the consummation of such transaction. On April 15, 2019, the Federal Trade Commission issued an early termination notice with respect to the waiting period applicable under the HSR Act in connection with the transaction with Scripps.

On April 2, 2019, the Company exercised an option with Dreamcatcher Broadcasting LLC to repurchase the Dreamcatcher Stations, to be consummated substantially concurrent with the closing of the Nexstar Merger (the "Dreamcatcher Repurchase"). Following the consummation of the Dreamcatcher Repurchase, the Dreamcatcher Stations are expected to be sold to TEGNA and Scripps in connection with the Nexstar Merger. In the event the Company is unable to consummate the Nexstar Merger, the Company may rescind its option to repurchase the Dreamcatcher stations.

Applications seeking FCC consent to station divestitures necessary to obtain the FCC Approval (the "Divestiture Applications") were filed on April 3, 2019, April 8, 2019, April 10, 2019 and April 16, 2019. On April 26, 2019, the FCC issued a public notice of the filing of the Divestiture Applications which set deadlines for petitions to deny the applications, oppositions to petitions to deny and replies to oppositions to petitions to deny.

On August 2, 2019, the Company caused to be delivered to the holders of its 5.875% Senior Notes Due 2022 (the "Notes") a conditional notice of redemption (the "Initial Notice") relating to the full redemption of all $1.1 billion of issued and outstanding Notes (the "Redemption") on August 12, 2019 (as delayed in the Company's discretion, the "Redemption Date"), pursuant to Section 5.2 of the Indenture, dated as of June 24, 2015 (as amended, supplemented or otherwise modified to date, the "Indenture"), among the Company, each of the subsidiary guarantors party thereto, and The Bank of New York Mellon Trust Company, N.A., as trustee. On August 8, 2019, the Company caused to be delivered to the holders of the Notes a supplemental conditional notice of redemption (the "Supplemental Notice", and the Initial Notice as supplemented by the Supplemental Notice, the "Notice") in order to delay the Redemption of the Notes to August 15, 2019. The redemption price for the Notes is equal to the sum of 101.469% of the principle amount of the Notes, plus accrued and unpaid interest, if any, on the Notes to (but not including) the Redemption Date (the "Redemption Price").

The Company's obligation to pay the Redemption Price on the Redemption Date is conditioned upon the consummation of the Nexstar Merger (the "Condition"). In the Company's discretion, the Redemption Date may be delayed until such time as the Condition is satisfied (or waived by the Company in its sole discretion). In the Company's discretion, the Redemption may not occur and the Notice may be rescinded in the event that the Condition is not satisfied (or waived by the Company in its sole discretion) by the Redemption Date or by the Redemption Date so delayed. The closing of the Nexstar Merger is subject to a number of conditions. As a result, there can be no assurance that the Redemption will occur on the Redemption Date or at all.

In light of the Company's previously announced proposed transaction with Nexstar, Tribune Media is not providing financial guidance for the full year 2019 in this release, nor is the Company conducting a conference call regarding its second quarter 2019 financial results.

Tribune Media Company (TRCO) is home to a diverse portfolio of television and digital properties driven by quality news, entertainment and sports programming. Tribune Media is comprised of Tribune Broadcasting's 42 owned or operated local television stations reaching approximately 49 million households, national entertainment cable network WGN America, whose reach is more than 75 million households, Tribune Studios, and a variety of digital applications and websites commanding 49 million monthly unique visitors online. Tribune Media also includes Chicago's WGN-AM and the national multicast networks Antenna TV and THIS TV, and Covers Media Group, an unrivaled source of online sports betting information. Additionally, the Company owns and manages a significant number of real estate properties across the U.S. and holds a variety of investments, including a 31% interest in Television Food Network, G.P., which operates Food Network and Cooking Channel. For more information please visit www.tribunemedia.com.

INVESTOR/MEDIA CONTACT:
Gary Weitman
SVP/Corporate Relations
(312) 222-3394
gweitman@tribunemedia.com

Non-GAAP Financial Measures
This press release includes a discussion of Adjusted EBITDA and Adjusted EPS for the Company and Adjusted EBITDA for our operating segments (Television and Entertainment and Corporate and Other) and presents Broadcast Cash Flow for our Television and Entertainment segment. Adjusted EPS, Adjusted EBITDA and Broadcast Cash Flow are financial measures that are not recognized under GAAP. Adjusted EPS is calculated based on income (loss) before investment transactions, certain special items (including severance), certain income tax charges, non-operating items, gain (loss) on sales of real estate, gain on sales of spectrum, impairments and other non-cash charges and reorganization items per common share. Adjusted EBITDA for the Company is defined as income (loss) before income taxes, investment transactions, interest income, interest expense, pension expense (credit), equity income and losses, depreciation and amortization, stock-based compensation, certain special items (including severance), non-operating items, gain (loss) on sales of real estate, gain on sales of spectrum, impairments and other non-cash charges and reorganization items. Adjusted EBITDA for the Company's operating segments is calculated as segment operating profit plus depreciation, amortization, pension expense (credit), stock-based compensation, impairments and other non-cash charges, gain (loss) on sales of real estate, gain on sales of spectrum and certain special items (including severance). Broadcast Cash Flow for the Television and Entertainment segment is calculated as Television and Entertainment Adjusted EBITDA plus broadcast rights amortization expense less broadcast rights cash payments. We believe that Adjusted EBITDA and Broadcast Cash Flow are measures commonly used by investors to evaluate our performance with that of our competitors. We also present Adjusted EBITDA because we believe investors, analysts and rating agencies consider it useful in measuring our ability to meet our debt service obligations. We further believe that the disclosure of Adjusted EPS, Adjusted EBITDA and Broadcast Cash Flow is useful to investors as these non-GAAP measures are used, among other measures, by our management to evaluate our performance. By disclosing Adjusted EPS, Adjusted EBITDA and Broadcast Cash Flow, we believe that we create for investors a greater understanding of, and an enhanced level of transparency into, the means by which our management operates our company. Adjusted EPS, Adjusted EBITDA and Broadcast Cash Flow are not measures presented in accordance with GAAP, and our use of these terms may vary from that of others in our industry. Adjusted EPS, Adjusted EBITDA and Broadcast Cash Flow should not be considered as an alternative to net income, operating profit, revenues, cash provided by operating activities or any other measures derived in accordance with GAAP as measures of operating performance or liquidity. The tables at the end of this press release include reconciliations of consolidated Adjusted EPS and Adjusted EBITDA and segment Adjusted EBITDA and Broadcast Cash Flow to the most directly comparable financial measures calculated and presented in accordance with GAAP.

Cautionary Statement Regarding Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the federal securities laws. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control. Forward-looking statements may include, but are not limited to, the anticipated merger with Nexstar and the related regulatory process, our real estate monetization strategy, our costs savings initiatives, expectations regarding advertising revenues, the conditions in our industry, our operations, our economic performance and financial condition and the timing and payment of any dividends on our common stock. Important factors that could cause actual results, developments and business decisions to differ materially from these forward-looking statements are uncertainties discussed below and in the "Risk Factors" section of the Company's filings with the U.S. Securities and Exchange Commission (the "SEC"). "Forward-looking statements" include all statements that do not relate solely to historical or current facts, and can be identified by the use of words such as "may," "might," "will," "could," "should," "estimate," "project," "plan," "anticipate," "expect," "intend," "outlook," "seek," "designed," "assume," "implied," "believe" and other similar expressions. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. These forward-looking statements are based on estimates and assumptions by our management that, although we believe to be reasonable, are inherently uncertain and subject to a number of risks and uncertainties. 

The following list represents some, but not necessarily all, of the factors that could cause actual results to differ from historical results or those anticipated or predicted by these forward-looking statements; risks associated with the ability to consummate the Nexstar Merger and the timing of the closing of the Nexstar Merger, the occurrence of any event, change or other circumstances that could give rise to the termination of the Nexstar Merger Agreement; the risk that the regulatory approvals for the proposed Nexstar Merger may be delayed, not be obtained or may be obtained subject to conditions that are not anticipated; risks related to the disruption of management time from ongoing business operations due to the pending Nexstar Merger and the restrictions imposed on the Company's operations under the terms of the Nexstar Merger Agreement; uncertainty associated with the effect of the announcement of the Nexstar Merger on our ability to retain and hire key personnel, on our ability to maintain relationships with advertisers and customers and on our operating results and businesses generally; changes in advertising demand and audience shares; competition and other economic conditions including incremental fragmentation of the media landscape and competition from other media alternatives; changes in the overall market for broadcast and cable television advertising, including through regulatory and judicial rulings; our ability to protect our intellectual property and other proprietary rights; our ability to adapt to technological changes; availability; volatility, and cost of quality network, syndicated and sports programming affecting our television ratings; conduct and changing circumstances related to third-party relationships on which we rely for our business; the loss, cost and / or modification of our network affiliation agreements; our ability to renegotiate retransmission consent agreements, or resolve disputes, with multichannel video programming distributors; our ability to realize the full value, or successfully complete the planned divestitures of our real estate assets; the incurrence of additional tax-related liabilities related to historical income tax returns; the potential impact of the modifications to the spectrum on the operation of our television stations and the costs, terms and restrictions associated with such actions; the incurrence of costs to address contamination issues at physical sites owned, operated or used by our businesses; adverse results from litigation, governmental investigations or tax-related proceedings or audits, including proceedings that may relate to our entry into the Nexstar Merger Agreement; our ability to settle unresolved claims filed in connection with our and certain of our direct and indirect wholly-owned subsidiaries' Chapter 11 cases and resolve the appeals seeking to overturn the bankruptcy court order confirming the First Amended Joint Plan of Reorganization for Tribune Company and its Subsidiaries; our ability to satisfy future pension and other postretirement employee benefit obligations; the effect of labor strikes, lock-outs and labor negotiations; the financial performance and valuation of our equity method investments; the impairment of our existing goodwill and other intangible assets; compliance with, and the effect of changes or developments in, government regulations applicable to the television and radio broadcasting industry; consolidation in the broadcasting industry; changes in accounting standards; the payment of cash dividends on our common stock; impact of increases in interest rates on our variable rate indebtedness or refinancings thereof; our indebtedness and ability to comply with covenants applicable to our debt financing and other contractual commitments; our ability to satisfy future capital and liquidity requirements; our ability to access the credit and capital markets at the times and in the amounts needed and on acceptable terms; the factors discussed under the heading "Risk Factors" of the Company's filings with the SEC; and other events beyond our control that may result in unexpected adverse operating results. In addition, in light of these risks and uncertainties, the matters referred to in the forward-looking statements contained in this press release may not in fact occur. Any forward-looking information presented herein is made only as of the date of this press release and we undertake no obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands of dollars, except per share data)

(Unaudited)

 


Three Months Ended



Six Months Ended


June 30, 2019


June 30, 2018



June 30, 2019


June 30, 2018

Operating Revenues









Television and Entertainment

$

482,557



$

486,417




$

935,984



$

927,119


Other

1,479



2,941




3,040



5,874


Total operating revenues

484,036



489,358




939,024



932,993


Operating Expenses









Programming

134,083



111,635




253,970



212,376


Direct operating expenses

98,087



98,817




197,250



200,205


Selling, general and administrative

129,700



125,878




262,962



257,834


Depreciation

13,867



13,281




26,819



27,056


Amortization

35,018



41,681




70,039



83,368


Gain on sales of spectrum








(133,197)


Total operating expenses

410,755



391,292




811,040



647,642


Operating Profit

73,281



98,066




127,984



285,351


Income on equity investments, net

46,527



52,568




92,212



91,705


Interest income

7,726



2,336




13,973



4,234


Interest expense

(43,777)



(41,990)




(87,392)



(82,621)


Pension and other postretirement periodic benefit credit, net

4,524



6,985




9,154



14,069


Gain on investment transactions






86,272



3,888


Other non-operating gain (loss), net

80



(26)




(1,543)



91


Reorganization items, net

(876)



(685)




(2,194)



(1,578)


Income Before Income Taxes

87,485



117,254




238,466



315,139


Income tax expense

23,835



32,816




61,612



89,518


Net Income

$

63,650



$

84,438




$

176,854



$

225,621


Net loss attributable to noncontrolling interests

7



4




11



10


Net Income attributable to Tribune Media Company

$

63,657



$

84,442




$

176,865



$

225,631











Net Earnings Per Common Share Attributable to Tribune Media Company:









Basic

$

0.72



$

0.96




$

2.01



$

2.58


Diluted

$

0.71



$

0.96




$

1.98



$

2.55


 

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES 
CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands of dollars, except for share and per share data)

(Unaudited)

 


June 30, 2019


December 31, 2018

Assets




Current Assets




Cash and cash equivalents

$

1,314,108



$

1,063,041


Restricted cash and cash equivalents

16,607



16,607


Accounts receivable (net of allowances of $3,662 and $4,461)

421,309



416,938


Broadcast rights

72,598



98,269


Income taxes receivable

17,607



23,922


Prepaid expenses

27,009



19,444


Other

8,865



7,509


Total current assets

1,878,103



1,645,730


Properties




Property, plant and equipment

646,743



687,377


Accumulated depreciation

(285,262)



(266,078)


Net properties

361,481



421,299


Other Assets




Broadcast rights

70,027



95,876


Operating lease right-of-use assets

196,408




Goodwill

3,228,547



3,228,601


Other intangible assets, net

1,370,614



1,442,456


Assets held for sale

62,789




Investments

1,154,700



1,264,437


Other

140,111



152,992


Total other assets

6,223,196



6,184,362


Total Assets

$

8,462,780



$

8,251,391


 

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES 
CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands of dollars, except for share and per share data)

(Unaudited)

 


June 30, 2019


December 31, 2018

Liabilities and Shareholders' Equity




Current Liabilities




Accounts payable

$

42,502



$

44,897


Income taxes payable

55,509



9,973


Employee compensation and benefits

57,360



79,482


Contracts payable for broadcast rights

212,046



232,687


Deferred revenue

13,867



12,508


Interest payable

30,652



30,086


Operating lease liabilities

19,904




Other

53,876



42,160


Total current liabilities

485,716



451,793


Non-Current Liabilities




Long-term debt (net of unamortized discounts and debt issuance costs of $25,995 and $29,434)

2,929,522



2,926,083


Deferred income taxes

516,216



573,924


Contracts payable for broadcast rights

171,143



233,275


Pension obligations, net

374,964



380,322


Postretirement, medical, life and other benefits

8,452



8,298


Operating lease liabilities

192,378




Other obligations

117,872



154,599


Total non-current liabilities

4,310,547



4,276,501


Total Liabilities

4,796,263



4,728,294






Commitments and Contingent Liabilities








Shareholders' Equity




Preferred stock ($0.001 par value per share)




Authorized: 40,000,000 shares; No shares issued and outstanding at June 30, 2019 and at December 31, 2018




Class A Common Stock ($0.001 par value per share)




Authorized: 1,000,000,000 shares; 102,498,285 shares issued and 88,396,100 shares outstanding at June 30, 2019 and 101,790,837 shares issued and 87,688,652 shares outstanding at December 31, 2018

102



102


Class B Common Stock ($0.001 par value per share)




Authorized: 1,000,000,000 shares; Issued and outstanding: 5,557 shares at June 30, 2019 and December 31, 2018




Treasury stock, at cost: 14,102,185 shares at June 30, 2019 and December 31, 2018

(632,194)



(632,194)


Additional paid-in-capital

4,045,530



4,031,233


Retained earnings

368,621



223,734


Accumulated other comprehensive loss

(120,965)



(104,967)


Total Tribune Media Company shareholders' equity

3,661,094



3,517,908


Noncontrolling interests

5,423



5,189


Total shareholders' equity

3,666,517



3,523,097


Total Liabilities and Shareholders' Equity

$

8,462,780



$

8,251,391


 

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of dollars)

(Unaudited)

 


Six Months Ended


June 30, 2019


June 30, 2018

Operating Activities




Net income

$

176,854



$

225,621


Adjustments to reconcile net income to net cash provided by operating activities:




Stock-based compensation

10,920



10,511


Pension credit and contributions

(8,661)



(38,027)


Depreciation

26,819



27,056


Amortization of other intangible assets

70,039



83,368


Income on equity investments, net

(92,212)



(91,705)


Distributions from equity investments

181,461



158,926


Amortization of debt issuance costs and original issue discount

3,688



3,718


Gain on sales of spectrum



(133,197)


Gain on investment transactions

(86,272)



(3,888)


Spectrum repack reimbursements

(5,947)



(1,698)


Other non-operating loss (gain), net

846



(91)


Changes in working capital items:




Accounts receivable, net

(4,910)



12,917


Prepaid expenses and other current assets

(8,327)



(16,825)


Accounts payable

1,267



(1,857)


Employee compensation and benefits, accrued expenses and other current liabilities

(21,461)



(13,993)


Deferred revenue

1,359



2,801


Income taxes

51,853



7,271


Change in broadcast rights, net of liabilities

(31,253)



(28,612)


Deferred income taxes

(56,631)



17,405


Other, net

831



1,240


Net cash provided by operating activities

210,263



220,941






Investing Activities




Capital expenditures

(30,607)



(24,947)


Spectrum repack reimbursements

5,947



1,698


Proceeds from the sales of investments

107,547



3,890


Other, net

(919)



1,615


Net cash provided by (used in) investing activities

81,968



(17,744)






Financing Activities




Payments of dividends

(44,175)



(43,847)


Tax withholdings related to net share settlements of share-based awards

(8,630)



(5,723)


Proceeds from stock option exercises

11,396



581


Contribution from/(distributions to) noncontrolling interests

245



(2)


Net cash used in financing activities

(41,164)



(48,991)






Net Increase in Cash, Cash Equivalents and Restricted Cash

251,067



154,206


Cash, cash equivalents and restricted cash, beginning of period

1,079,648



691,251


Cash, cash equivalents and restricted cash, end of period

$

1,330,715



$

845,457






Cash, Cash Equivalents and Restricted Cash are Comprised of:




Cash and cash equivalents

$

1,314,108



$

828,850


Restricted cash and cash equivalents

16,607



16,607


Total cash, cash equivalents and restricted cash

$

1,330,715



$

845,457






Supplemental Schedule of Cash Flow Information




Cash paid during the period for:




   Interest

$

83,075



$

79,027


   Income taxes, net

$

65,347



$

64,294


 

TRIBUNE MEDIA COMPANY - CONSOLIDATED

RECONCILIATION OF CONSOLIDATED ADJUSTED EBITDA

(in thousands of dollars)

(Unaudited)



Three Months Ended



Six Months Ended


June 30, 2019


June 30, 2018



June 30, 2019


June 30, 2018

Revenue

$

484,036



$

489,358




$

939,024



$

932,993




















Net Income attributable to Tribune Media Company

$

63,657



$

84,442




$

176,865



$

225,631


Net loss attributable to noncontrolling interests

7



4




11



10


Net Income

63,650



84,438




176,854



225,621











Income tax expense

23,835



32,816




61,612



89,518


Reorganization items, net

876



685




2,194



1,578


Other non-operating (gain) loss, net

(80)



26




1,543



(91)


Gain on investment transactions






(86,272)



(3,888)


Pension and other postretirement periodic benefit credit, net

(4,524)



(6,985)




(9,154)



(14,069)


Interest expense

43,777



41,990




87,392



82,621


Interest income

(7,726)



(2,336)




(13,973)



(4,234)


Income on equity investments, net

(46,527)



(52,568)




(92,212)



(91,705)


Operating Profit

$

73,281



$

98,066




$

127,984



$

285,351


Depreciation

13,867



13,281




26,819



27,056


Amortization

35,018



41,681




70,039



83,368


Stock-based compensation

5,502



5,397




10,920



10,511


Severance and related charges

77



169




597



(735)


Transaction-related costs

8,501



4,600




14,880



9,965


Gain on sales of spectrum








(133,197)


Spectrum repack reimbursements

(2,274)



(1,612)




(5,947)



(1,698)


Pension expense

203



174




416



467


Other

1,206



(962)




2,142



(364)


Adjusted EBITDA

$

135,381



$

160,794




$

247,850



$

280,724


 

TRIBUNE MEDIA COMPANY - TELEVISION AND ENTERTAINMENT

RECONCILIATION OF OPERATING PROFIT TO ADJUSTED EBITDA AND BROADCAST CASH FLOW

(in thousands of dollars)

(Unaudited)



Three Months Ended



Six Months Ended


June 30, 2019


June 30, 2018



June 30, 2019


June 30, 2018

Advertising

$

298,899



$

311,431




$

568,788



$

581,870


Retransmission revenues

132,342



117,185




265,202



235,327


Carriage fees

40,771



40,815




81,910



82,477


Other

10,545



16,986




20,084



27,445


Total Revenues

$

482,557



$

486,417




$

935,984



$

927,119











Operating Profit

$

99,603



$

119,767




$

179,528



$

331,619


Depreciation

12,064



10,941




23,126



21,811


Amortization

35,018



41,681




70,039



83,368


Stock-based compensation

3,929



3,900




7,800



7,691


Severance and related charges

77



169




611



(114)


Transaction-related costs

27



12




67



12


Gain on sales of spectrum








(133,197)


Spectrum repack reimbursements

(2,274)



(1,612)




(5,947)



(1,698)


Other

403



(1,098)




403



(572)


Adjusted EBITDA

$

148,847



$

173,760




$

275,627



$

308,920











Broadcast rights - Amortization

$

127,414



$

103,896




$

239,432



$

196,178


Broadcast rights - Cash Payments

(142,815)



(117,603)




(273,773)



(228,503)


Broadcast Cash Flow

$

133,446



$

160,053




$

241,286



$

276,595


 

TRIBUNE MEDIA COMPANY - CORPORATE AND OTHER

RECONCILIATION OF OPERATING LOSS TO ADJUSTED EBITDA

(in thousands of dollars)

(Unaudited)



Three Months Ended



Six Months Ended


June 30, 2019


June 30, 2018



June 30, 2019


June 30, 2018

Total Revenues

$

1,479



$

2,941




$

3,040



$

5,874




















Operating Loss

$

(26,322)



$

(21,701)




$

(51,544)



$

(46,268)


Depreciation

1,803



2,340




3,693



5,245


Stock-based compensation

1,573



1,497




3,120



2,820


Severance and related charges






(14)



(621)


Transaction-related costs

8,474



4,588




14,813



9,953


Pension expense

203



174




416



467


Other

803



136




1,739



208


Adjusted EBITDA

$

(13,466)



$

(12,966)




$

(27,777)



$

(28,196)


 

TRIBUNE MEDIA COMPANY - CONSOLIDATED

RECONCILIATION OF DILUTED EPS TO ADJUSTED EPS

(in thousands of dollars, except per share data)

(Unaudited)



Three Months Ended


June 30, 2019



June 30, 2018


Pre-Tax


After-Tax


Diluted EPS



Pre-Tax


After-Tax


Diluted EPS














Diluted EPS





$

0.71








$

0.96


Reorganization items, net

876



876



0.01




685



685



0.01


Other non-operating (gain) loss, net

(80)



(58)



(0.00)




26



19



0.00


Severance and related charges

77



57



0.00




169



125



0.00


Transaction-related costs

8,501



6,525



0.07




4,600



3,987



0.05


Spectrum repack reimbursements

(2,274)



(1,689)



(0.02)




(1,612)



(1,197)



(0.01)


Other

1,206



895



0.01




(962)



(707)



(0.01)


Adjusted EPS (1)





$

0.79








$

0.99





























Six Months Ended


June 30, 2019



June 30, 2018


Pre-Tax


After-Tax


Diluted EPS



Pre-Tax


After-Tax


Diluted EPS














Diluted EPS





$

1.98








$

2.55


Reorganization items, net

2,194



2,194



0.02




1,578



1,578



0.02


Other non-operating loss (gain), net

1,543



1,138



0.01




(91)



(66)



(0.00)


Gain on investment transactions

(86,272)



(66,039)



(0.74)




(3,888)



(2,823)



(0.03)


Severance and related charges

597



443



0.00




(735)



(546)



(0.01)


Transaction-related costs

14,880



11,628



0.13




9,965



8,840



0.10


Gain on sales of spectrum








(133,197)



(98,899)



(1.12)


Spectrum repack reimbursements

(5,947)



(4,416)



(0.05)




(1,698)



(1,261)



(0.01)


Other

2,142



1,591



0.02




(364)



(281)



(0.00)


Adjusted EPS (1)





$

1.38








$

1.50















(1) Adjusted EPS totals may not foot due to rounding.

 

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