Tribune Company Reports Fourth Quarter and Full Year 2013 Results

Tribune Company Reports Fourth Quarter and Full Year 2013 Results

CHICAGO, March 28, 2014 /PRNewswire/ -- Tribune Company (the "Company" or "We") today reported its results for the fourth quarter and year ended December 29, 2013. The consolidated financial statements along with management's discussion and analysis of financial condition and results of operations are available in the Financial Information section of the Company's corporate website, www.tribune.com.

52 Weeks (2013) vs. 53 Weeks (2012)
The Company's fiscal year ends on the last Sunday in December. The fourth quarter and full year 2013 comprised a 13-week period and 52-week period, respectively. The Company's fourth quarter and full year 2012 comprised a 14-week period and 53-week period, respectively. The additional week increased consolidated operating revenues, operating expenses and operating profit by approximately 1.5%, 1% and 3%, respectively, in the full year 2012.

Local TV
The acquisition of Local TV closed on December 27, 2013 and the 2013 results reflect contributions from that business from the closing date through December 29, 2013. Local TV contributed $4 million of revenues and $2 million of Adjusted EBITDA to the fourth quarter and full year results for the Broadcasting segment.

Fourth Quarter
Consolidated Revenues in the fourth quarter of 2013 were $773 million compared to $871 million in the fourth quarter of 2012. This represented a decline of $97 million, or 11%. The fourth quarter of 2012 consisted of 14 weeks, while the fourth quarter of 2013 consisted of 13 weeks. The impact of the additional week in 2012 accounted for $46 million of the decline in revenues in the fourth quarter of 2013.

Broadcasting Revenues were $267 million in the fourth quarter of 2013, a decline of $36 million compared to $303 million in the fourth quarter of 2012. The decline was primarily due to the impact of the additional week in 2012 of $14 million, lower political advertising revenues, as 2013 was an off-cycle election year, and a $10 million decrease in barter revenues, partially offset by a $7 million increase in retransmission consent revenues. The decline in barter revenues was primarily related to a change in the estimated value of barter programming. The decline in barter revenue had an offsetting decrease in barter programming expense, and thus had no impact on Adjusted EBITDA.

Publishing Revenues in the fourth quarter of 2013 were $507 million, compared to $568 million the fourth quarter of 2012, a decline of $61 million. This decline was primarily due to the impact of the additional week in 2012 of $32 million, a $24 million decline in advertising revenue, a $6 million decline in commercial printing and delivery services and other, offset by a $4 million increase in circulation revenues.

Consolidated Adjusted EBITDA declined to $255 million in the fourth quarter of 2013 from $288 million in the fourth quarter of 2012. For comparability purposes, Adjusted EBITDA in the fourth quarter of 2012 excludes $12 million related to the extra week during the period.


-- Broadcasting Adjusted EBITDA was $94 million in the fourth quarter of
2013, compared to $119 million in the fourth quarter of 2012. The
decline was primarily a result of the impact of lower political
advertising revenues.
-- Publishing Adjusted EBITDA was $109 million in the fourth quarter of
both 2013 and 2012, as lower cash operating expenses offset the impact
of revenue declines.
-- Corporate expenses reduced Adjusted EBITDA by $14 million in the fourth
quarter of 2013, compared to $11 million in the fourth quarter of 2012,
primarily due to higher compensation and recruitment fees.
Full Year 2013
Consolidated Revenues in the year ended December 29, 2013 were $2,903 million, compared to $3,145 million in the year ended December 30, 2012. This represented a decline of $241 million, or 7.7%. The full year 2012 results consisted of 53 weeks, while the full year 2013 results consisted of 52 weeks. The impact of the additional week in 2012 accounted for $46 million of the decline in revenues in 2013.

Broadcasting Revenues were $1,014 million for the full year 2013, a decline of $127 million compared to $1,142 million reported in 2012. The decline was primarily due to a $52 million decline in advertising revenue net of agency commissions, a $48 million decrease in barter revenues, a $36 million decline in copyright royalties due to one-time royalties received in 2012 and the impact of the additional week in 2012 of $14 million. These declines were partially offset by a $25 million increase in retransmission consent revenues due to higher rates included in several retransmission consent agreement renewals. More than half of the decline in advertising revenue was attributable to lower political revenue, as 2013 was an off-cycle election year. The remainder of the decline in advertising revenue was primarily related to declines at WPIX-TV, New York resulting from lower ratings, lower Cubs baseball revenue at WGN-TV, Chicago and lower ratings and a weaker national scatter market at WGN America. The decline in barter revenues primarily related to a change in the estimated value of barter programming. The decline in barter revenue had an offsetting decrease in barter programming expense, and thus had no impact on Adjusted EBITDA.

Publishing Revenues for the full year 2013 were $1,889 million, compared to $2,003 million in 2012, a decline of $114 million. The decline was primarily due to an $86 million reduction in advertising revenue, the impact of the additional week in 2012 of $32 million, a $10 million decline in commercial printing and delivery services, offset by a $12 million increase in circulation revenues.

Consolidated Adjusted EBITDA declined to $787 million in 2013 from $832 million in 2012. For comparability purposes, Adjusted EBITDA for 2012 excludes $12 million related to the extra week during the period.


-- Broadcasting Adjusted EBITDA was $336 million in 2013, compared to $419
million in 2012. The decline was primarily due to the impact of lower
revenues.
-- Publishing Adjusted EBITDA was $296 million in 2013, compared to $298
million in 2012.
-- Corporate expenses reduced Adjusted EBITDA by $49 million in 2013,
compared to $41 million in 2012.
Cash distributions from equity investments were $208 million in 2013 compared to $232 million in 2012. The distributions received in 2012 included $61 million that was related to dividends that were distributed to the Company in respect of prior periods.

"Broadcasting revenue trends during the first three quarters were disappointing. However, in the fourth quarter, non-political core advertising revenue stabilized year over year. Our root challenges are definable and addressable and we have taken action. In the Publishing business, our operational actions have stabilized profitability and we are confident that we are building a solid foundation for this business's future. Overall we are excited by our prospects for Q1 and full year 2014," said Peter Liguori, Tribune Company President and Chief Executive Officer.

TRIBUNE is one of the country's leading multimedia companies, operating businesses in broadcasting, publishing, and interactive. The company's broadcasting group owns or operates 42 television stations, WGN America on national cable, the national multicast networks Antenna TV and THIS TV, Tribune Studios and Chicago's WGN-AM. In publishing, Tribune's leading daily newspapers include the Los Angeles Times, Chicago Tribune, The Baltimore Sun, Sun Sentinel (South Florida), Orlando Sentinel, Hartford Courant, The Morning Call and Daily Press. Popular news and information websites complement Tribune's print and broadcast properties and extend the company's nationwide audience.

Non-GAAP Financial Measures

This press release includes a discussion of Adjusted EBITDA for the Company and our operating segments (Publishing, Broadcasting and Corporate). Adjusted EBITDA is a financial measure that is not recognized under accounting principles generally accepted in the U.S. ("GAAP"). Adjusted EBITDA is defined as earnings before income taxes, interest income, interest expense, pension expense, equity income and losses, depreciation and amortization, stock-based compensation, certain special items (including severance), non-operating items and reorganization items plus cash distributions from equity investments less cash pension contributions. Adjusted EBITDA for the Company's operating segments is calculated as segment operating profit plus depreciation, amortization, pension expense, stock-based compensation and certain special items (including severance). We believe that Adjusted EBITDA is a measure commonly used by investors to evaluate our performance and 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 EBITDA is useful to investors, as this non-GAAP measure is used, among other measures, by our management to evaluate our performance. By disclosing Adjusted EBITDA, 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 EBITDA is not a measure presented in accordance with GAAP, and our use of the term Adjusted EBITDA may vary from that of others in our industry. Adjusted EBITDA should not be considered as an alternative to net income (loss), operating profit, revenues or any other performance measures derived in accordance with GAAP as measures of operating performance or liquidity.

Cautionary Statement Regarding Forward-Looking Statements

Certain disclosures in this press release include certain forward-looking statements that are based largely on our current expectations and reflect various estimates and assumptions by the Company. Forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual results and achievements to differ materially from those expressed in such forward-looking statements, and are in some instances beyond our control. Such risks, trends and uncertainties include: the Company's adoption of fresh-start reporting which caused its consolidated financial statements for periods subsequent to the date we and our subsidiaries (the "Debtors") emerged from chapter 11 bankruptcy to not be comparable to prior periods; the Company's 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; our ability to retire outstanding debt and satisfy other contractual commitments; increased interest rate risk due to variable rate indebtedness; changes in advertising demand, circulation levels and audience shares; changes in the overall market for television advertising, regulatory and judicial rulings; availability and cost of broadcast rights; competition and other economic conditions including fragmentation of the media landscape and competition from other media alternatives; our ability to develop and grow its on-line businesses; changes in newsprint prices; changes in accounting standards; adverse results from litigation, governmental investigations or tax-related proceedings or audits; our ability to settle unresolved claims filed in connection with the Debtors' chapter 11 cases and resolve the appeals seeking to overturn the confirmation order issued by the U.S. Bankruptcy Court for the District of Delaware on July 23, 2012; our ability to satisfy its pension and other postretirement employee benefit obligations; our ability to attract and retain employees; the effect of labor strikes, lock-outs and labor negotiations; our ability to realize benefits or synergies from acquisitions or divestitures or to operate our businesses effectively following acquisitions or divestitures; our ability to successfully integrate the acquisition of Local TV Holdings, LLC ("Local TV"), including our ability to program the acquired stations to successfully generate improved ratings and increased advertising revenue and to maintain relationships with cable operators, satellite providers and other key commercial partners of Local TV, retain key Local TV employees, and realize the expected benefits and synergies including the expected accretion in earnings; our ability to successfully complete the proposed spin-off of essentially all of our publishing businesses, including the ability to (i) realize the anticipated benefits of the proposed spin-off transaction, achieve requisite regulatory approvals and retain key personnel and (ii) successfully navigate unanticipated developments that may delay or negatively impact the proposed spin-off transaction, changes in market conditions and disruption to business operations as a result of the proposed transaction; our reliance on third-party vendors for various services; our ability to adapt to technological changes; and other events beyond our control that may result in unexpected adverse operating results. Further, there can be no assurance that the proposed spin-off of essentially all of our publishing businesses will be completed as anticipated or at all.

The words "believe," "expect," "anticipate," "estimate," "could," "should," "intend," "may," "plan," "seek," "will," "designed," "assume," "implied" and similar expressions generally identify forward-looking statements. Whether or not any such forward-looking statements are in fact achieved will depend on future events, some of which are beyond the control of the Company. Readers are cautioned not to place undue reliance on such forward-looking statements, which are being made as of the date of this press release. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.







Tribune Company - Consolidated

Reconciliation of Operating Profit to Adjusted EBITDA

(in thousands)


Fourth Quarter Full Year
-------------- ---------

2013 2012 2013 2012
---- ---- ---- ----

Revenue -
as
reported $773,409 $870,819 $2,903,228 $3,144,698

53rd week
(1) - (46,311) - (46,311)
--- ------- --- -------

Revenue -
52-week
basis 773,409 824,508 2,903,228 3,098,387
======= ======= ========= =========


Operating
Profit $106,847 $156,758 $348,946 $396,457

Depreciation 20,585 36,499 75,516 147,201

Amortization 31,281 4,634 121,206 19,046

EBITDA 158,713 197,891 545,668 562,704


Special items/Stock-Based
Compensation:

Stock-
based
compensation 2,831 - 7,319 -

Severance
and
related
charges 11,378 3,986 19,492 15,028

Transaction-
related
costs 20,089 438 38,200 2,037

Write-off
of
software
applications - 1,561 - 5,816

Other 4,627 423 6,803 404

EBITDA
excluding
Special
Items/
Stock-
Based
Compensation 197,638 204,299 617,482 585,989

Pension
(credit)
expense (8,695) 25,444 (34,780) 101,773
------ ------ ------- -------

Total
Segment
Adjusted
EBITDA 188,943 229,743 582,702 687,762

53rd week
(1) - (11,902) - (11,902)
--- ------- --- -------

Total
Segment
Adjusted
EBITDA -
52-week
basis 188,943 217,841 582,702 675,860

Cash
distributions
from
equity
investments
(2) 67,718 70,810 207,994 171,023

Cash
pension
contributions
(3) (1,730) (350) (4,050) (15,045)
------ ---- ------ -------

Adjusted
EBITDA $254,931 $288,301 $786,646 $831,838
======== ======== ======== ========




(1) Every five or six
years, Tribune Company's
fiscal year has 53 weeks
rather than 52 weeks due to
Tribune Company's fiscal
year ending on the last
Sunday in December.
Tribune Company's 2012
fiscal year was a 53-week
year. The adjustment
removes the estimated
impact of the extra week
for better comparability.


(2) Total cash dividends
from equity investments in
2012 were $232 million.
The distributions in 2012
included $61 million that
was related to dividends
that were distributed to
the Company in respect of
prior periods. For
purposes of calculating
Adjusted EBITDA, these
distributions were
previously included in the
years the dividends were
declared.


(3 ) Reflects mandatory
pension contributions. The
Company also made a
voluntary pension cash
contribution of $2.8
million in the third
quarter of 2013.





Tribune Company - Broadcasting

Reconciliation of Operating Profit to Adjusted EBITDA

(in thousands)


Fourth Quarter Full Year
-------------- ---------

2013 2012 2013 2012
---- ---- ---- ----

Revenue -
as
reported $266,570 $303,050 $1,014,424 $1,141,701

53rd week
(1) - (13,866) - (13,866)
--- ------- --- -------

Revenue -
52-week
basis 266,570 289,184 1,014,424 1,127,835
======= ======= ========= =========


Operating
Profit $55,978 $109,727 $195,940 $366,472

Depreciation 8,222 9,745 29,947 37,995

Amortization 27,405 2,599 105,526 10,594

EBITDA 91,605 122,071 331,413 415,061


Special items/Stock-Based
Compensation:

Stock-
based
compensation 661 - 1,844 -

Severance
and
related
charges 302 475 1,641 1,050

Transaction-
related
costs 181 - 229 -

Other 795 20 1,028 (55)

EBITDA
excluding
Special
Items/
Stock-
Based
Compensation 93,544 122,566 336,155 416,056

Pension
(credit)
expense (22) 1,942 (86) 7,765
--- ----- --- -----

Total
Segment
Adjusted
EBITDA 93,522 124,508 336,069 423,821

53rd week
(1) - (5,112) - (5,112)
--- ------ --- ------

Total
Segment
Adjusted
EBITDA -
52-week
basis $93,522 $119,396 $336,069 $418,709
======= ======== ======== ========




(1) Every five or six
years, Tribune Company's
fiscal year has 53 weeks
rather than 52 weeks due
to Tribune Company's
fiscal year ending on the
last Sunday in December.
Tribune Company's 2012
fiscal year was a 53-week
year. The adjustment
removes the estimated
impact of the extra week
for better comparability.





Tribune Company - Publishing

Reconciliation of Operating Profit to Adjusted EBITDA

(in thousands)


Fourth Quarter Full Year
-------------- ---------

2013 2012 2013 2012
---- ---- ---- ----

Revenue -
as
reported $506,839 $567,769 $1,888,804 $2,002,997

53rd week
(1) - (32,445) - (32,445)
--- ------- --- -------

Revenue -
52-week
basis 506,839 535,324 1,888,804 1,970,552
======= ======= ========= =========


Operating
Profit $83,681 $62,475 $234,339 $88,819

Depreciation 12,167 26,698 45,087 108,967

Amortization 3,876 2,035 15,680 8,254

EBITDA 99,724 91,208 295,106 206,040


Special items/Stock-Based
Compensation:

Stock-
based
compensation 656 - 1,919 -

Severance
and
related
charges 10,611 3,511 17,386 13,915

Transaction-
related
costs 2,203 - 3,813 -

Write-
off of
software
applications - 1,561 - 5,816

Other 3,114 403 5,057 459

EBITDA
excluding
Special
Items/
Stock-
Based
Compensation 116,308 96,683 323,281 226,230

Pension
(credit)
expense (6,892) 19,740 (27,569) 78,961
------ ------ ------- ------

Total
Segment
Adjusted
EBITDA 109,416 116,423 295,712 305,191

53rd week
(1) - (7,102) - (7,102)
--- ------ --- ------

Total
Segment
Adjusted
EBITDA -
52-week
basis $109,416 $109,321 $295,712 $298,089
======== ======== ======== ========




(1) Every five or six
years, Tribune Company's
fiscal year has 53 weeks
rather than 52 weeks due
to Tribune Company's
fiscal year ending on the
last Sunday in December.
Tribune Company's 2012
fiscal year was a 53-week
year. The adjustment
removes the estimated
impact of the extra week
for better comparability.





Tribune Company - Corporate

Reconciliation of Operating Profit to Adjusted EBITDA

(in thousands)


Fourth Quarter Full Year
-------------- ---------

2013 2012 2013 2012
---- ---- ---- ----

Operating
Profit
(Loss) $(32,812) $(15,444) $(81,333) $(58,834)

Depreciation 196 56 482 239

Amortization - - - 198

EBITDA (32,616) (15,388) (80,851) (58,397)


Special items/Stock-Based
Compensation:

Stock-based
compensation 1,514 - 3,556 -

Severance and
related
charges 465 - 465 63

Transaction-
related
costs 17,705 438 34,158 2,037

Other 718 - 718 -

EBITDA
excluding
Special
Items/
Stock-Based
Compensation (12,214) (14,950) (41,954) (56,297)

Pension
(credit)
expense (1,781) 3,762 (7,125) 15,047
------ ----- ------ ------

Total Segment
Adjusted
EBITDA (13,995) (11,188) (49,079) (41,250)

53rd week (1) - 312 - 312
--- --- --- ---

Total Segment
Adjusted
EBITDA -
52-week
basis $(13,995) $(10,876) $(49,079) $(40,938)
======== ======== ======== ========




(1) Every five or six
years, Tribune Company's
fiscal year has 53 weeks
rather than 52 weeks due
to Tribune Company's
fiscal year ending on the
last Sunday in December.
Tribune Company's 2012
fiscal year was a 53-week
year. The adjustment
removes the estimated
impact of the extra week
for better comparability.


SOURCE Tribune Company

Tribune Company

CONTACT: Investor Contact, Donna Granato, VP/Corporate Finance & Investor Relations, 212/210-2703 (office), dgranato@tribune.com, or Media Contact, Gary Weitman, SVP/Corporate Relations, 312/222-3394 (office), gweitman@tribune.com

Web Site: http://www.tribune.com


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