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Press Releases

Tribune Media Company Reports Fourth Quarter and Full-Year 2017 Results

Mar 1, 2018

NEW YORK, March 1, 2018 /PRNewswire/ -- Tribune Media Company (the "Company") (NYSE: TRCO) today reported its results for the three months and year ended December 31, 2017.


FOURTH QUARTER AND FULL-YEAR 2017 FINANCIAL HIGHLIGHTS (compared to the prior year period)

  • Consolidated operating revenues decreased 8% to $489.0 million for the fourth quarter and decreased 5% to $1,849.0 million for the full year; excluding political advertising and real estate revenues, consolidated operating revenues increased 6% and 2% for the fourth quarter and the full year, respectively
  • Television and Entertainment net advertising revenues decreased 15% to $326.2 million for the fourth quarter and decreased 11% to $1,225.9 million for the full year
  • Net core advertising revenues (which exclude political and digital revenues) increased 3% to $297.4 million for the fourth quarter and decreased 3% to $1,135.3 million for the full year
  • Retransmission revenues increased 22% to $108.5 million for the fourth quarter and increased 23% to $412.3 million for the full year
  • Carriage fee revenue increased 3% to $31.5 million for the fourth quarter and increased 6% to $127.9 million for the full year
  • Cash distributions from TV Food Network were $19.3 million for the fourth quarter and $186.1 million for the full year
  • FCC spectrum auction proceeds of $5 million were received by the Company in the fourth quarter and $191 million for the full year
  • Closed on the sales of the Costa Mesa, CA and Ft. Lauderdale, FL properties in the fourth quarter for net pretax proceeds of $62 million and $21 million, respectively; for the full year 2017, net pretax proceeds from real estate sales totaled $144 million

"2017 was a transformational year for Tribune Media, in which we focused aggressively on streamlining our cost structure, selling non-core assets, returning capital to our stockholders, and most importantly, on the completion of our previously announced merger with Sinclair," said Peter Kern, Tribune Media's Chief Executive Officer. "During the year we sold real estate and other non-core businesses and assets for total pretax proceeds of over $1 billion and returned approximately $590 million to stockholders. While advertising was down for the year due to the off-year political cycle and a weaker overall advertising market, in the fourth quarter, we saw growth in core advertising and continued growth in retransmission revenues. We were also pleased that for the full year, despite increases in network affiliate fees, consolidated cash expenses were down compared to 2016, as we continued disciplined cost management across the company."

Kern continued, "Looking ahead to 2018, while we are keenly focused on the completion of our pending merger, we also see growth opportunities in the core business, with the shift in our programming strategy at WGN America expected to turn that business into a significant EBITDA contributor, and the highly contested midterm elections expected to drive a resurgence of political advertising revenue across our diverse footprint of stations. In addition, we expect to realize significant tax savings from the recent changes in the tax code on both our core business operations as well as on any potential gains from continued asset sales."

FOURTH QUARTER AND FULL-YEAR 2017 RESULTS

Consolidated

Consolidated operating revenues for the fourth quarter of 2017 were $489.0 million compared to $529.6 million in the fourth quarter of 2016, representing a decrease of $40.6 million, or 8%. The decrease was primarily driven by lower political advertising revenue, partially offset by increases in core advertising and retransmission revenues.

For the full year 2017, consolidated operating revenues were $1,849.0 million compared to $1,947.9 million for the full year 2016, representing a decrease of $99.0 million, or 5%.

Consolidated operating profit was $129.1 million for the fourth quarter of 2017 compared to $113.2 million for the fourth quarter of 2016, representing an increase of $15.9 million. The increase was primarily attributable to higher gains on the sales of real estate and lower operating expenses, partially offset by the decline in operating revenues.

For the full year 2017, consolidated operating profit was $108.5 million compared to $433.6 million in the full year 2016, representing a decrease of $325.1 million, primarily due to lower gains on the sales of real estate in 2017 as compared to 2016, lower Television and Entertainment operating profit primarily as a result of lower advertising revenues and higher programming expenses, and higher transaction-related expenses. The Company recorded gains on the sale of real estate of $28.5 million in 2017 compared to $213.1 million in 2016. Programming expenses in 2017 included an $80 million impairment charge for the syndicated programs Elementary and Person of Interest at WGN America compared to a $37 million impairment charge in 2016 for the syndicated program Elementary at WGN America.

Consolidated income from continuing operations was $332.8 million in the fourth quarter of 2017 compared to $70.7 million in the fourth quarter of 2016. In the fourth quarter of 2017, the Company recorded a tax benefit of $256 million, or $2.90 per common share, related to the re-measurement of deferred tax assets and liabilities resulting from the new tax legislation that lowered the corporate U.S. Federal income tax rate from 35% to 21%. Diluted earnings per common share from continuing operations for the fourth quarter of 2017 was $3.73 compared to $0.81 for the fourth quarter of 2016. Adjusted diluted earnings per share ("Adjusted EPS") from continuing operations for the fourth quarter of 2017 was $0.81 compared to $0.85 for the fourth quarter of 2016. Both diluted earnings per common share from continuing operations and Adjusted EPS from continuing operations include an income tax benefit of $6 million, or $0.07 per common share, in the fourth quarter of 2017 and an income tax benefit of $2 million, or $0.02 per common share, in the fourth quarter of 2016 related to certain tax adjustments. 

Consolidated income from continuing operations was $183.1 million for the full year 2017 compared to $87.0 million for the full year 2016. For the full year 2017, diluted earnings per common share from continuing operations was $2.04 compared to $0.96 for the full year 2016. Adjusted EPS from continuing operations for the full year 2017 was $1.41 compared to $2.13 for the full year 2016. Both diluted earnings per common share from continuing operations and Adjusted EPS from continuing operations include an income tax benefit of $6 million, or $0.07 per common share, for the full year 2017 and an income tax benefit of $11 million, or $0.13 per common share, for the full year 2016 related to certain tax adjustments. 

Net income attributable to Tribune Media Company was $328.8 million in the fourth quarter of 2017 compared to $19.0 million in the fourth quarter of 2016. Net income attributable to Tribune Media Company was $194.1 million for the full year 2017 compared to $14.2 million in 2016.

Consolidated Adjusted EBITDA decreased 7% to $169.1 million in the fourth quarter of 2017 from $181.5 million in the fourth quarter of 2016. The decrease was primarily attributable to lower political advertising, partially offset by higher core advertising and retransmission revenues as well as lower programming, compensation and other expenses. For the full year 2017, consolidated Adjusted EBITDA decreased $89.2 million, or 17%, to $441.9 million as compared to $531.1 million in the full year 2016. 

Cash distributions from the Company's equity investments in the fourth quarter of 2017 were $19.3 million compared to $27.0 million in the fourth quarter of 2016. Cash distributions for the full year 2017 were $201.9 million, which includes an excess cash distribution of $15.8 million from CareerBuilder related to the sale, as discussed below, compared to $170.5 million for the full year 2016.

Television and Entertainment

Revenues were $486.0 million in the fourth quarter of 2017 compared to $525.7 million in the fourth quarter of 2016, a decrease of $39.7 million, or 8%. This was driven by a $66.0 million decrease in net political advertising revenue, partially offset by an increase in net core advertising revenue (comprised of local and national advertising, excluding political and digital) of $8.3 million, or 3%, an increase in retransmission revenues of $19.3 million, or 22%, and an increase in carriage fee revenue of $0.9 million, or 3%.

Television and Entertainment segment revenues for the full year 2017 were $1,835.4 million compared to $1,909.9 million for the full year 2016, a decrease of $74.5 million, or 4%. The decrease was driven by a $114.8 million decrease in net political advertising revenue and a $35.7 million, or 3%, decrease in net core advertising, partially offset by an increase in retransmission revenues of $77.6 million, or 23%, and an increase in carriage fee revenue of $6.9 million, or 6%.

Television and Entertainment operating profit for the fourth quarter of 2017 was $127.2 million compared to $136.9 million in the fourth quarter of 2016, a decrease of $9.6 million, or 7%, primarily due to lower revenues, partially offset by lower programming and other expenses. Television and Entertainment Adjusted EBITDA for the fourth quarter of 2017 was $183.2 million compared to $199.5 million in the fourth quarter of 2016, a decrease of $16.3 million, or 8%. Television and Entertainment Broadcast Cash Flow for the fourth quarter of 2017 was $162.9 million as compared to $207.1 million for the fourth quarter of 2016, a decrease of $44.2 million, or 21%.

For the full year 2017, Television and Entertainment operating profit was $196.1 million as compared to $324.8 million for the full year 2016. The decrease was primarily due to lower operating revenues, as described above, and higher programming expenses primarily due to the $43 million increase in impairment charges at WGN America and $19 million of additional charges related to the shift in programming strategy at WGN America, as well as higher network affiliate fees and higher amortization of license fees. Television and Entertainment Adjusted EBITDA for the full year 2017 was $505.2 million as compared to $604.0 million for the full year 2016, a decrease of $98.8 million, or 16%. Television and Entertainment Broadcast Cash Flow for the full year 2017 was $484.6 million as compared to $557.5 million for the full year 2016, a decrease of $73.0 million, or 13%.

Corporate and Other

Real estate revenues for the fourth quarter of 2017 were $3.0 million compared to $3.9 million for the fourth quarter of 2016, representing a decrease of $0.9 million, or 24%. Real estate revenues for the full year 2017 were $13.5 million, compared to $38.0 million for the full year 2016, representing a decrease of $24.5 million, or 64%. The decrease was primarily driven by lower revenues due to the sale of real estate properties in 2016 and 2017.

Corporate and Other operating profit for the fourth quarter of 2017 was $1.9 million compared to an operating loss of $23.7 million in the fourth quarter of 2016. The reduction of the loss was primarily attributable to gains on the sale of certain real estate properties, partially offset by a decline in real estate revenues. Corporate and Other Adjusted EBITDA for the fourth quarter of 2017 represented a loss of $14.1 million compared to a loss of $18.0 million in the fourth quarter of 2016.

For the full year 2017, Corporate and Other operating loss was $87.6 million compared to operating profit of $108.7 million for the full year 2016. The decline was due to lower gains on real estate sales and higher transaction-related costs. Gains on the sale of real estate totaled $28.2 million in 2017 compared to $213.1 million in 2016. Corporate and Other Adjusted EBITDA represented a loss of $63.3 million for the full year 2017 compared to a loss of $72.9 million for the full year 2016.

RETURN OF CAPITAL TO SHAREHOLDERS

Quarterly Dividend

On February 21, 2018, 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 March 26, 2018 to holders of record of the Company's common stock and warrants as of March 12, 2018. Future dividends will be subject to the discretion of the Board and the terms of the agreement and plan of merger between the Company and Sinclair Broadcast Group, Inc. ("Sinclair"), dated May 8, 2017 (the "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 and consistent with record and payment dates in 2016.

RECENT DEVELOPMENTS

Sinclair Acquisition

On May 8, 2017, the Company entered into a Merger Agreement with Sinclair, providing for the acquisition by Sinclair 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 Samson Merger Sub Inc., a wholly owned subsidiary of Sinclair, with and into Tribune Media Company (the "Merger"), with the Company surviving the Merger as a wholly owned subsidiary of Sinclair.

The applications seeking Federal Communications Commission (the "FCC") approval of the transactions contemplated by the Merger Agreement (the "Applications") were filed on June 26, 2017, and the FCC issued a public notice of the filing of the Applications and established a comment cycle on July 6, 2017. Consummation of the transactions contemplated by the Merger Agreement is conditioned on obtaining FCC consent to transfers of control and assignments of licenses in connection with the Merger, among other conditions. Several petitions to deny the Applications, and numerous other comments, both opposing and supporting the transaction, were filed in response to the public notice. Sinclair and the Company jointly filed an opposition to the petitions to deny on August 22, 2017 (the "Joint Opposition"). Petitioners and others filed replies to the Joint Opposition on August 29, 2017. On September 14, 2017, the FCC's Media Bureau issued a Request for Information ("RFI") seeking additional information regarding certain matters discussed in the Applications. Sinclair submitted a response to the RFI on October 5, 2017. On October 18, 2017, the FCC's Media Bureau issued a public notice pausing the FCC's 180-day transaction review "shot-clock" for 15 days to afford interested parties an opportunity to comment on the response to the RFI. On January 11, 2018, the FCC's Media Bureau issued a public notice pausing the FCC's shot-clock as of January 4, 2018 until Sinclair has filed amendments to the Applications along with divestiture applications and the FCC staff has had an opportunity to review any such submissions. On February 20, 2018, the parties filed an amendment to the Applications that, among other things, (1) requested authority under the FCC's "Local Television Multiple Ownership Rule" (the "Duopoly Rule") for Sinclair to own two top four ranked stations in each of three television markets and (2) identified stations (the "Divestiture Stations") in 11 television markets that Sinclair proposes to divest in order for the Merger to comply with the Duopoly Rule and the National Television Multiple Ownership Rule. Concurrently, Sinclair filed applications proposing to place certain of the Divestiture Stations in an FCC-approved divestiture trust, if and as necessary, in order to facilitate the orderly divestiture of those stations following the consummation of the Merger.

On August 2, 2017, 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 Merger Agreement. The second request was issued under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"). Sinclair received a substantively identical request for additional information and documentary material from the DOJ in connection with the transactions contemplated by the Merger Agreement. Consummation of the transactions contemplated by the 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 Sinclair 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.

The parties entered into an agreement with the DOJ on September 15, 2017 (the "DOJ Timing Agreement"), by which they agreed not to consummate the Merger Agreement before December 31, 2017, or 60 days following the date on which both parties have certified compliance with the second request, whichever is later. In addition, the parties agreed to provide the DOJ with 10 calendar days notice prior to consummating the Merger Agreement. The DOJ Timing Agreement has been amended twice, on October 30, 2017, to extend the date before which the parties may not consummate the Merger Agreement to January 30, 2018, and on January 27, 2018, to extend that date to February 11, 2018. The DOJ Timing Agreement thus currently provides that the parties will not consummate the Merger Agreement before February 11, 2018, or 60 days following the date on which both parties have certified compliance with the second request, whichever is later, and that the parties will provide the DOJ with 10 days notice before consummating the Merger Agreement.

On October 19, 2017, 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 Merger Agreement and the transactions contemplated by the Merger Agreement at a duly called special meeting of Tribune Media Company shareholders.

Tax Reform

On December 22, 2017, the Tax Cuts and Jobs Act ("Tax Reform") was signed into law. Under ASC Topic 740,  "Income Taxes," the effects of Tax Reform are recognized in the period of enactment and as such are recorded in the Company's fourth quarter of 2017. The Company is in the process of analyzing certain provisions of Tax Reform including but not limited to the repeal of the domestic production activities deduction and changes to the deductibility of executive compensation. Consistent with the guidance under ASC Topic 740, and subject to Staff Accounting Bulletin ("SAB") 118, which provides for a measurement period to complete the accounting for certain elements of Tax Reform, the Company recorded the provisional impact from the enactment of Tax Reform in the fourth quarter of 2017. As a result of Tax Reform, the Company recorded a provisional discrete net tax benefit of $256 million, primarily due to a remeasurement of the net deferred tax liabilities resulting from the decrease in the U.S. federal corporate income tax rate from 35% to 21%. Further impacts of Tax Reform may be reflected in future quarters upon issuance of clarifications to existing law or additional technical guidance from the Department of Treasury and the completion of the Company's tax return filings. Tax Reform also provided for a one-time deemed mandatory repatriation of post-1986 undistributed foreign subsidiary earnings and profits ("E&P") through the year ended December 31, 2017. The Company does not have any net accumulated E&P in its foreign subsidiaries and therefore is not subject to tax for the year ended December 31, 2017. Further, the Company has analyzed the effects of new taxes due on certain foreign income, such as global intangible low-taxed income ("GILTI"), base-erosion anti-abuse tax ("BEAT"), foreign-derived intangible income ("FDII") and limitations on interest expense deductions (if certain conditions apply) that are effective starting in fiscal 2018. The Company has determined that these new provisions are not applicable to the Company.

Real Estate Transactions

In 2017, the Company sold several properties for net pretax proceeds totaling $144 million and recognized a net pretax gain of $28.5 million. On November 15, 2017, the Company sold its Costa Mesa, CA properties for net proceeds of $62 million and recorded a pretax gain of $22 million, of which $3 million is attributable to a noncontrolling interest. On December 19, 2017, the Company sold its Ft. Lauderdale, FL property for net proceeds of $21 million and recorded a pretax gain of $6 million, of which less than $1 million is attributable to a noncontrolling interest. The Company defines net proceeds as pretax cash proceeds on the sale of properties, less associated selling costs.

FCC Spectrum Auction

On April 13, 2017, the FCC announced the conclusion of the incentive auction, the results of the reverse and forward auction and the repacking of broadcast television spectrum. The Company participated in the auction and received approximately $191 million in pretax proceeds (including $26 million of proceeds received by Dreamcatcher Broadcasting LLC ("Dreamcatcher")) as of December 31, 2017. FCC licenses that were part of the FCC spectrum auction with a carrying value of approximately $39 million are included in assets held for sale as of December 31, 2017. The Company received approximately $172 million in gross pretax proceeds for these licenses in 2017 and expects to recognize a net pretax gain of $133 million in the first quarter of 2018 related to the surrender of the spectrum of television stations in January 2018. The Company used $102 million of after-tax proceeds to prepay a portion of the Company's Term Loan Facility in 2017. After-tax proceeds of $12.6 million received by a Dreamcatcher station were used to prepay a substantial portion of the Dreamcatcher Credit Facility in 2017.

CareerBuilder

On June 19, 2017, TEGNA Inc. announced it entered into an agreement, together with the other owners of CareerBuilder, including Tribune Media Company, to sell a majority interest in CareerBuilder to an investor group led by investment funds managed by affiliates of Apollo Global Management, LLC and the Ontario Teachers' Pension Plan Board. The transaction closed on July 31, 2017 and the Company received cash of $158 million, which included an excess cash distribution of $16 million, and recognized a gain on sale of approximately $4 million in 2017. As a result of the sale, the Company's ownership in CareerBuilder declined from 32% to approximately 7%, on a fully diluted basis. As of December 31, 2017, the Company's ownership in CareerBuilder was approximately 6.5%, on a fully diluted basis (including CareerBuilder employees' unvested equity awards).

In 2017, the Company recorded non-cash pretax impairment charges totaling $181 million to write down its investment in CareerBuilder prior to the transaction close.

In light of the Company's previously announced transaction with Sinclair, Tribune Media is not providing financial guidance for the full year 2018 in this release, nor is the Company conducting a conference call regarding its fourth quarter and full year 2017 financial results.

Tribune Media Company (NYSE: 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 50 million households, national entertainment cable network WGN America, whose reach is more than 77 million households, Tribune Studios, and a variety of digital applications and websites commanding 54 million monthly unique visitors online. Tribune Media also includes Chicago's WGN-AM and the national multicast networks Antenna TV and THIS TV. 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.

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) from continuing operations before investment transactions, loss on extinguishments and modification of debt, certain special items (including severance), certain income tax charges, non-operating items, gain (loss) on sales of real estate, impairments and other non-cash charges and reorganization items per common share. Adjusted EBITDA for the Company is defined as income (loss) from continuing operations before income taxes, investment transactions, loss on extinguishments and modification of debt, interest and dividend 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, 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 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 Adjusting 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 Sinclair and the related regulatory process, our real estate monetization strategy, the impact of Tax Reform, our costs savings initiatives, the changes to our WGN America original programming, the conditions in our industry, our operations, our economic performance and financial condition, including, in particular, statements relating to our business and growth strategy. 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 Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the "SEC") on March 1, 2018. "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 Merger with Sinclair and the timing of the closing of the Merger, the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement; the risk that the regulatory approvals for the proposed Merger with Sinclair 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 Merger and the restrictions imposed on the Company's operations under the terms of the Merger Agreement; the effect of the announcement of the 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; litigation in connection with the Merger; 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 technology changes; availability and cost of quality network, syndicated and sports programming affecting our television ratings; 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 and/or surrender of spectrum on the operation of  our television stations, the costs, terms and restrictions associated with the actions necessary to modify and/or surrender the spectrum; the incurrence of costs to address contamination issues at sites owned, operated or used by our businesses; adverse results from litigation, governmental investigations or tax-related proceedings or audits; 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 pension and other postretirement employee benefit obligations; our ability to attract and retain employees; 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; 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

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands of dollars, except per share data)



Three Months Ended



Year Ended


December 31, 2017


December 31, 2016



December 31, 2017


December 31, 2016

Operating Revenues









Television and Entertainment

$

486,022



$

525,723




$

1,835,423



$

1,909,896


Other

2,977



3,901




13,536



38,034


Total operating revenues

488,999



529,624




1,848,959



1,947,930


Operating Expenses









Programming

106,620



119,288




604,068



515,738


Direct operating expenses

97,604



97,350




391,770



390,595


Selling, general and administrative

127,589



139,934




550,193



592,220


Depreciation

14,553



15,152




56,314



58,825


Amortization

41,678



41,661




166,679



166,664


Impairments of other intangible assets



3,400






3,400


Gain on sales of real estate, net

(28,168)



(367)




(28,533)



(213,086)


Total operating expenses

359,876



416,418




1,740,491



1,514,356


Operating Profit

129,123



113,206




108,468



433,574


Income on equity investments, net

38,506



33,861




137,362



148,156


Interest and dividend income

1,269



390




3,149



1,226


Interest expense

(40,055)



(38,211)




(159,387)



(152,719)


Loss on extinguishments and modification of debt






(20,487)




(Loss) gain on investment transactions, net

(2,486)






8,131




Write-downs of investments

(12,694)






(193,494)




Other non-operating gain, net

26



4,949




71



5,427


Reorganization items, net

(657)



(188)




(2,109)



(1,422)


Income (Loss) from Continuing Operations Before Income Taxes

113,032



114,007




(118,296)



434,242


Income tax (benefit) expense

(219,767)



43,280




(301,373)



347,202


Income from Continuing Operations

332,799



70,727




183,077



87,040


(Loss) Income from Discontinued Operations, net of taxes

(619)



(51,776)




14,420



(72,794)


Net Income

$

332,180



$

18,951




$

197,497



$

14,246


Net income from continuing operations attributable to noncontrolling interests

(3,378)






(3,378)




Net Income attributable to Tribune Media Company

$

328,802



$

18,951




$

194,119



$

14,246


Basis Earnings (Loss) Per Common Share Attributable to Tribune Media Company from:









Continuing Operations

$

3.77



$

0.81




$

2.06



$

0.96


Discontinued Operations

(0.01)



(0.59)




0.17



(0.80)


Net Earnings Per Common Share

$

3.76



$

0.22




$

2.23



$

0.16


Diluted Earnings (Loss) Per Common Share Attributable to Tribune Media Company from:









Continuing Operations

$

3.73



$

0.81




$

2.04



$

0.96


Discontinued Operations

(0.01)



(0.59)




0.16



(0.80)


Net Earnings Per Common Share

$

3.72



$

0.22




$

2.20



$

0.16


Regular dividends declared per common share

$

0.25



$

0.25




$

1.00



$

1.00


Special dividends declared per common share

$



$




$

5.77



$


 

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES 
CONSOLIDATED BALANCE SHEETS

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



December 31, 2017


December 31, 2016

Assets




Current Assets




Cash and cash equivalents

$

673,685



$

577,658


Restricted cash and cash equivalents

17,566



17,566


Accounts receivable (net of allowances of $4,814 and $12,504)

420,095



429,112


Broadcast rights

129,174



157,817


Income taxes receivable

18,274



9,056


Current assets of discontinued operations



62,605


Prepaid expenses

20,158



35,862


Other

14,039



6,624


Total current assets

1,292,991



1,296,300


Properties




Machinery, equipment and furniture

318,891



280,589


Buildings and leasehold improvements

171,113



154,557



490,004



435,146


Accumulated depreciation

(233,387)



(187,148)



256,617



247,998


Land

157,298



214,730


Construction in progress

26,380



61,192


Net properties

440,295



523,920


Other Assets




Broadcast rights

133,683



153,457


Goodwill

3,228,988



3,227,930


Other intangible assets, net

1,613,665



1,819,134


Non-current assets of discontinued operations



608,153


Assets held for sale

38,900



17,176


Investments

1,281,791



1,674,883


Other

139,015



80,098


Total other assets

6,436,042



7,580,831


Total Assets

$

8,169,328



$

9,401,051


 

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES 
CONSOLIDATED BALANCE SHEETS

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



December 31, 2017


December 31, 2016

Liabilities and Shareholders' Equity




Current Liabilities




Accounts payable

$

48,319



$

60,553


Debt due within one year (net of unamortized discounts and debt issuance costs of $7,917)



19,924


Income taxes payable

36,252



21,166


Employee compensation and benefits

71,759



77,123


Contracts payable for broadcast rights

253,244



241,255


Deferred revenue

11,942



13,690


Interest payable

30,525



30,305


Current liabilities of discontinued operations



54,284


Deferred spectrum auction proceeds

172,102




Other

30,124



32,553


Total current liabilities

654,267



550,853


Non-Current Liabilities




Long-term debt (net of unamortized discounts and debt issuance costs of $36,332 and $38,830)

2,919,185



3,391,627


Deferred income taxes

508,174



984,248


Contracts payable for broadcast rights

300,420



314,840


Pension obligations, net

396,875



444,401


Postretirement medical, life and other benefits

9,328



11,385


Other obligations

163,899



62,700


Non-current liabilities of discontinued operations



95,314


Total non-current liabilities

4,297,881



5,304,515


Total Liabilities

4,952,148



5,855,368






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 December 31, 2017 and at December 31, 2016




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




Authorized: 1,000,000,000 shares; 101,429,999 shares issued and 87,327,814 shares outstanding at December 31, 2017; 100,416,516 shares issued and 86,314,063 shares outstanding at December 31, 2016

101



100


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




Authorized: 1,000,000,000 shares; Issued and outstanding: 5,557 shares at December 31, 2017 and 5,605 shares at December 31, 2016




Treasury stock, at cost: 14,102,185 shares at December 31, 2017 and 14,102,453 shares at December 31, 2016

(632,194)



(632,207)


Additional paid-in-capital

4,011,530



4,561,760


Retained deficit

(114,240)



(308,105)


Accumulated other comprehensive loss

(48,061)



(81,782)


Total Tribune Media Company shareholders' equity

3,217,136



3,539,766


Noncontrolling interests

44



5,917


Total shareholders' equity

3,217,180



3,545,683


Total Liabilities and Shareholders' Equity

$

8,169,328



$

9,401,051


 

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of dollars)



Year Ended


December 31, 2017


December 31, 2016

Operating Activities




Net income

$

197,497



$

14,246


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




Stock-based compensation

32,933



37,189


Pension credit, net of contributions

(22,047)



(24,110)


Depreciation

56,314



72,409


Amortization of contract intangible assets and liabilities

869



(10,566)


Amortization of other intangible assets

166,679



196,663


Impairments of other intangible assets



3,400


Income on equity investments, net

(137,362)



(148,156)


Distributions from equity investments

198,124



170,527


Non-cash loss on extinguishments and modification of debt

8,258




Original issue discount payments

(7,360)




Write-downs of investments

193,494




Amortization of debt issuance costs and original issue discount

7,875



11,172


Gain on sale of business

(33,492)




Gain on investment transactions, net

(8,131)




Impairments of real estate

2,399



15,102


Gain on sales of real estate

(28,533)



(213,086)


Other non-operating gain, net

(71)



(5,427)


Changes in working capital items:




Accounts receivable, net

10,638



(998)


Prepaid expenses and other current assets

10,310



18,171


Accounts payable

(8,736)



6,589


Employee compensation and benefits, accrued expenses and other current liabilities

(23,927)



(7,515)


Deferred revenue

(2,423)



(2,843)


Income taxes

6,175



51,296


Change in broadcast rights, net of liabilities

45,898



(15,427)


Deferred income taxes

(478,637)



95,035


Change in non-current obligations for uncertain tax positions

791



(11,276)


Other, net

34,967



31,768


Net cash provided by operating activities

222,502



284,163



 

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of dollars)



Year Ended


December 31, 2017


December 31, 2016

Investing Activities




Capital expenditures

(66,832)



(99,659)


Investments

(5,065)



(5,993)


Net proceeds from the sale of business

557,793




Proceeds from FCC spectrum auction

172,102




Sale of partial interest of equity method investment

142,552




Proceeds from sales of real estate and other assets

144,464



507,692


Proceeds from sales of investments

5,769




Distributions from equity investment

3,768




Other

1,789



297


Net cash provided by investing activities

956,340



402,337






Financing Activities




Long-term borrowings

202,694




Repayments of long-term debt

(703,527)



(27,842)


Long-term debt issuance costs

(1,689)



(736)


Payments of dividends

(586,336)



(90,296)


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

(8,774)



(4,553)


Proceeds from stock option exercises

11,317




Common stock repurchases



(232,065)


(Distributions to) contributions from noncontrolling interests, net

(9,251)



393


Settlements of contingent consideration, net



(3,636)


Net cash used in financing activities

(1,095,566)



(358,735)






Net Increase in Cash and Cash Equivalents

83,276



327,765


Cash and cash equivalents, beginning of year

590,409



262,644


Cash and cash equivalents, end of year

$

673,685



$

590,409






Cash and Cash Equivalents are Comprised of:




Cash and cash equivalents

$

673,685



$

577,658


Cash and cash equivalents classified as discontinued operations



12,751


Cash and cash equivalents, end of year

$

673,685



$

590,409






Supplemental Schedule of Cash Flow Information




Cash paid during the period for:




   Interest

$

152,401



$

160,200


   Income taxes, net of refunds

$

182,509



$

265,886


 

TRIBUNE MEDIA COMPANY - CONSOLIDATED

RECONCILIATION OF CONSOLIDATED ADJUSTED EBITDA

(in thousands of dollars)

(Unaudited)



Three Months Ended



Year Ended


December 31,
2017


December 31,
2016



December 31,
2017


December 31,
2016

Revenue

$

488,999



$

529,624




$

1,848,959



$

1,947,930




















Net Income attributable to Tribune Media Company

$

328,802



$

18,951




$

194,119



$

14,246


Net Income attributable to noncontrolling interests

(3,378)






(3,378)




Net Income

332,180



18,951




197,497



14,246


(Loss) income from discontinued operations, net of taxes

(619)



(51,776)




14,420



(72,794)


Income from Continuing Operations

$

332,799



$

70,727




$

183,077



$

87,040


Income tax (benefit) expense

(219,767)



43,280




(301,373)



347,202


Reorganization items, net

657



188




2,109



1,422


Other non-operating gain, net

(26)



(4,949)




(71)



(5,427)


Write-downs of investments

12,694






193,494




Loss (gain) on investment transactions, net

2,486






(8,131)




Loss on extinguishments and modification of debt






20,487




Interest expense

40,055



38,211




159,387



152,719


Interest and dividend income

(1,269)



(390)




(3,149)



(1,226)


Income on equity investments, net

(38,506)



(33,861)




(137,362)



(148,156)


Operating Profit

$

129,123



$

113,206




$

108,468



$

433,574


Depreciation

14,553



15,152




56,314



58,825


Amortization

41,678



41,661




166,679



166,664


Stock-based compensation

5,500



8,451




30,940



32,993


Impairments of other intangible assets



3,400






3,400


Impairments of broadcast rights






79,823



36,782


Severance and related charges

219



2,384




11,124



10,406


Transaction-related costs

10,800



3,852




37,936



10,889


Gain on sales of real estate, net

(28,168)



(367)




(28,533)



(213,086)


Real estate impairments and other

893



(173)




1,186



14,746


Pension credit

(5,512)



(6,027)




(22,047)



(24,110)


Adjusted EBITDA

$

169,086



$

181,539




$

441,890



$

531,083


 

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



Year Ended


December 31,
2017


December 31,
2016



December 31,
2017


December 31,
2016

Advertising

$

326,199



$

384,580




$

1,225,900



$

1,374,571


Retransmission revenue

108,509



89,188




412,309



334,724


Carriage fees

31,528



30,650




127,935



121,044


Barter/trade

9,329



9,918




37,381



39,025


Other

10,457



11,387




31,898



40,532


Total Revenues

$

486,022



$

525,723




$

1,835,423



$

1,909,896











Operating Profit

$

127,225



$

136,862




$

196,100



$

324,837


Depreciation

11,300



11,691




42,713



45,083


Amortization

41,678



41,661




166,679



166,664


Stock-based compensation

3,807



3,756




16,703



14,956


Impairments of other intangible assets



3,400






3,400


Impairments of broadcast rights






79,823



36,782


Severance and related charges

(46)



2,363




4,367



9,228


Transaction-related costs

725






2,060




Gain on sales of real estate



(3)




(317)



(3)


Real estate impairments and other

(1,503)



(196)




(2,939)



3,061


Adjusted EBITDA

$

183,186



$

199,534




$

505,189



$

604,008


Broadcast rights - Amortization

91,794



102,127




460,289



412,494


Broadcast rights - Cash Payments

(112,052)



(94,529)




(480,915)



(458,978)


Broadcast Cash Flow

$

162,928



$

207,132




$

484,563



$

557,524











 

TRIBUNE MEDIA COMPANY - CORPORATE AND OTHER

RECONCILIATION OF OPERATING PROFIT (LOSS) TO ADJUSTED EBITDA

(in thousands of dollars)

(Unaudited)



Three Months Ended



Year Ended


December 31,
2017


December 31,
2016



December 31,
2017


December 31,
2016

Total Revenues

$

2,977



$

3,901




$

13,536



$

38,034




















Operating Profit (Loss)

$

1,898



$

(23,656)




$

(87,632)



$

108,737


Depreciation

3,253



3,461




13,601



13,742


Stock-based compensation

1,693



4,695




14,237



18,037


Severance and related charges

265



21




6,757



1,178


Transaction-related costs

10,075



3,852




35,876



10,889


Gain on sales of real estate, net

(28,168)



(364)




(28,216)



(213,083)


Real estate impairments and other

2,396



23




4,125



11,685


Pension credit

(5,512)



(6,027)




(22,047)



(24,110)


Adjusted EBITDA

$

(14,100)



$

(17,995)




$

(63,299)



$

(72,925)


 

TRIBUNE MEDIA COMPANY - CONSOLIDATED

RECONCILIATION OF DILUTED EPS TO ADJUSTED EPS

(in thousands of dollars, except per share data)

(Unaudited)



Three Months Ended


December 31, 2017



December 31, 2016


Pre-Tax


After-Tax


Diluted EPS



Pre-Tax


After-Tax


Diluted EPS














Diluted EPS Attributable to Tribune Media Company





$

3.72








$

0.22


Loss from discontinued operations





0.01








0.59


Tax reform

$



$

(255,748)



(2.90)




$



$




Newsday income tax charges










648



0.01


Reorganization items, net

657



657



0.01




188



188



0.00


Other non-operating gain, net

(26)



(50)



(0.00)




(4,949)



(3,009)



(0.03)


Write-downs of investments

12,694



614



0.01









Loss on investment transactions, net

2,486



1,511



0.02









Impairments of other intangible assets








3,400



2,067



0.02


Severance and related charges

219



133



0.00




2,384



1,450



0.02


Transaction-related costs

10,800



9,224



0.10




3,852



2,394



0.03


Gain on sales of real estate, net (1)

(24,868)



(15,120)



(0.17)




(367)



(223)



(0.00)


Real estate impairments and other

893



618



0.01




(173)



(106)



(0.00)


Adjusted EPS (2)





$

0.81








$

0.85
















Year Ended


December 31, 2017



December 31, 2016


Pre-Tax


After-Tax


Diluted EPS



Pre-Tax


After-Tax


Diluted EPS














Diluted EPS Attributable to Tribune Media Company





$

2.20








$

0.16


(Income) Loss from discontinued operations





(0.16)








0.80


Tax reform

$



$

(255,748)



(2.90)




$



$




Newsday income tax charges










191,008



2.10


Reorganization items, net

2,109



2,109



0.02




1,422



1,422



0.02


Other non-operating gain, net

(71)



(79)



(0.00)




(5,427)



(3,299)



(0.04)


Write-downs of investments

193,494



117,644



1.34









Gain on investment transactions, net

(8,131)



(4,944)



(0.06)









Loss on extinguishments and modification of debt

20,487



12,456



0.14









Impairments of other intangible assets








3,400



2,067



0.02


Impairments of broadcast rights

79,823



48,532



0.55




36,782



22,363



0.25


Severance and related charges

11,124



6,763



0.08




10,406



6,327



0.07


Transaction-related costs

37,936



31,930



0.36




10,889



6,723



0.07


Gain on sales of real estate, net (1)

(25,233)



(15,342)



(0.17)




(213,086)



(129,556)



(1.43)


Real estate impairments and other

1,186



833



0.01




14,746



8,962



0.10


Adjusted EPS (2)





$

1.41








$

2.13


__________________________________________________

(1) Gain on sales of real estate, net in 2017 excludes amounts attributable to noncontrolling interests.

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

 

SOURCE Tribune Media Company

For further information: INVESTOR CONTACT: James Arestia, Director/Investor Relations, (646) 563-8296, jarestia@tribunemedia.com, MEDIA CONTACT: Gary Weitman, SVP/Corporate Relations, (312) 222-3394, gweitman@tribunemedia.com


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