Tribune Media Earnings 2019-06-30

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________

FORM 10-Q

_______________________________



ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2019



o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-8572

___________________________

TRIBUNE MEDIA COMPANY

(Exact name of registrant as specified in its charter)

___________________________



Delaware			36-1880355
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

515 North State Street,	Chicago,	Illinois	60654
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (312) 222-3394.

Securities registered pursuant to Section 12(b) of the Act:



Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Class A Common Stock, par value $0.001 per share	TRCO	The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):



Large Accelerated Filer	ý	Accelerated Filer	o	Non-Accelerated Filer	o
Smaller Reporting Company	o	Emerging Growth Company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):

Yes o No ý

As of July 31, 2019, 88,405,196 shares of the registrant’s Class A Common Stock and 5,557 shares of the registrant’s Class B Common Stock were outstanding.

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

TRIBUNE MEDIA COMPANY

FORM 10-Q

FOR THE QUARTER ENDED JUNE 30, 2019

INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



Item No.	Part I. Financial Information		Page
Item 1.	Financial Statements
	Unaudited Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2019 and June 30, 2018		2
	Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2019 and June 30, 2018		3
	Unaudited Condensed Consolidated Balance Sheets at June 30, 2019 and December 31, 2018		4
	Unaudited Condensed Consolidated Statement of Shareholders’ Equity for the Three and Six Months Ended June 30, 2019 and June 30, 2018		6
	Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2019 and June 30, 2018		8
	Notes to Unaudited Condensed Consolidated Financial Statements
		Note 1: Basis of Presentation and Significant Accounting Policies	10
		Note 2: Assets Held for Sale	16
		Note 3: Leases	16
		Note 4: Goodwill and Other Intangible Assets	18
		Note 5: Investments	19
		Note 6: Debt	21
		Note 7: Fair Value Measurements	22
		Note 8: Commitments and Contingencies	23
		Note 9: Income Taxes	27
		Note 10: Pension and Other Retirement Plans	28
		Note 11: Capital Stock	28
		Note 12: Stock-Based Compensation	30
		Note 13: Earnings Per Share	32
		Note 14: Accumulated Other Comprehensive (Loss) Income	33
		Note 15: Business Segments	33
		Note 16: Condensed Consolidating Financial Statements	34
		Note 17: Subsequent Events	45
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		46
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		64
Item 4.	Controls and Procedures		64
Part II. Other Information
Item 1.	Legal Proceedings		65
Item 1A.	Risk Factors		67
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		67
Item 3.	Defaults Upon Senior Securities		67
Item 4.	Mine Safety Disclosures		67
Item 5.	Other Information		67
Item 6.	Exhibits		68
Signature			69

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

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 (Note 8)	—			—			—			(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

See Notes to Unaudited Condensed Consolidated Financial Statements

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (In thousands of dollars) (Unaudited)

	Three Months Ended						Six Months Ended
	June 30, 2019			June 30, 2018			June 30, 2019			June 30, 2018
Net Income	$	63,650		$	84,438		$	176,854		$	225,621

Other Comprehensive Income (Loss), net of taxes
Pension and other post-retirement benefit items:
Change in unrecognized benefit plan gains and losses arising during the period, net of taxes of $(1,001) and $(1,327) for the three months and six months ended June 30, 2019 and June 30, 2018, respectively	(2,885		)	(3,827		)	(2,885		)	(3,827		)
Adjustment for previously unrecognized benefit plan gains and losses included in net income, net of taxes of $(14) and $(13) for the three months ended June 30, 2019 and June 30, 2018, respectively, and $(33) and $(29) for the six months ended June 30, 2019 and June 30, 2018, respectively	(38		)	(37		)	(92		)	(83		)
Change in unrecognized benefit plan gains and losses, net of taxes	(2,923		)	(3,864		)	(2,977		)	(3,910		)
Cash flow hedging instruments:
Unrealized gains and losses, net of taxes of $(2,585) and $975 for the three months ended June 30, 2019 and June 30, 2018, respectively, and $(4,325) and $3,571 for the six months ended June 30, 2019 and June 30, 2018, respectively	(7,454		)	2,810			(12,472		)	10,297
Gains and losses reclassified to net income, net of taxes of $(73) and $112 for the three months ended June 30, 2019 and June 30, 2018, respectively, and $(147) and $326 for the six months ended June 30, 2019 and June 30, 2018, respectively	(212		)	325			(424		)	941
Change in unrecognized gains and losses on cash flow hedging instruments, net of taxes	(7,666		)	3,135			(12,896		)	11,238
Foreign currency translation adjustments:
Change in foreign currency translation adjustments, net of taxes of $(3) and $67 for the three months ended June 30, 2019 and June 30, 2018, respectively, and $(8) and $58 for the six months ended June 30, 2019 and June 30, 2018	203			(702		)	(125		)	(267		)
Other Comprehensive Income (Loss), net of taxes	(10,386		)	(1,431		)	(15,998		)	7,061
Comprehensive Income	$	53,264		$	83,007		$	160,856		$	232,682
Comprehensive loss attributable to noncontrolling interests	7			4			11			10
Comprehensive Income Attributable to Tribune Media Company	$	53,271		$	83,011		$	160,867		$	232,692

See Notes to Unaudited Condensed Consolidated Financial Statements

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 (Note 3)	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 (1)	$	8,462,780		$	8,251,391

See Notes to Unaudited Condensed Consolidated Financial Statements

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 (Note 3)	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 (Note 3)	192,378			—
Other obligations	117,872			154,599
Total non-current liabilities	4,310,547			4,276,501
Total Liabilities (1)	4,796,263			4,728,294
Commitments and Contingent Liabilities (Note 8)
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

(1)

The Company’s consolidated total assets as of June 30, 2019 and December 31, 2018 include total assets of variable interest entities (“VIEs”) of $66 million and $73 million, respectively, which can only be used to settle the obligations of the VIEs. The Company’s consolidated total liabilities as of June 30, 2019 and December 31, 2018 include total liabilities of the VIEs of $26 million and $28 million, respectively, for which the creditors of the VIEs have no recourse to the Company (see Note 1).

See Notes to Unaudited Condensed Consolidated Financial Statements

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY THREE AND SIX MONTHS ENDED JUNE 30, 2019 (In thousands, except for share data) (Unaudited)

				Retained Earnings			Accumulated Other Comprehensive Loss			Additional Paid-In Capital									Common Stock
	Total																		Class A			Class B
													Treasury Stock			Non- controlling Interests			Amount (at Cost)		Shares	Amount (at Cost)		Shares
Balance at December 31, 2018	$	3,523,097		$	223,734		$	(104,967	)	$	4,031,233		$	(632,194	)	$	5,189		$	102	101,790,837	$	—	5,557
Comprehensive income:
Net income (loss)	113,204			113,208			—			—			—			(4		)	—		—	—		—
Other comprehensive loss, net of taxes	(5,612		)	—			(5,612		)	—			—			—			—		—	—		—
Comprehensive income	107,592
Regular dividends declared to shareholders and warrant holders, $0.25 per share	(22,061		)	(22,349		)	—			288			—			—			—		—	—		—
Stock-based compensation	5,418			—			—			5,418			—			—			—		—	—		—
Net share settlements of stock-based awards	(1,279		)	—			—			(1,279		)	—			—			—		558,474	—		—
Cumulative effect of a change in accounting principle	12,808			12,808			—			—			—			—			—		—	—		—
Contributions from noncontrolling interest	190			—			—			—			—			190			—		—	—		—
Balance at March 31, 2019	$	3,625,765		$	327,401		$	(110,579	)	$	4,035,660		$	(632,194	)	$	5,375		$	102	102,349,311	$	—	5,557
Comprehensive income:
Net income (loss)	63,650			63,657			—			—			—			(7		)	—		—	—		—
Other comprehensive loss, net of taxes	(10,386		)	—			(10,386		)	—			—			—			—		—	—		—
Comprehensive income	53,264
Regular dividends declared to shareholders and warrant holders, $0.25 per share	(22,114		)	(22,437		)	—			323			—			—			—		—	—		—
Stock-based compensation	5,502			—			—			5,502			—			—			—		—	—		—
Net share settlements of stock-based awards	4,045			—			—			4,045			—			—			—		148,974	—		—
Contributions from noncontrolling interest	55			—			—			—			—			55			—		—	—		—
Balance at June 30, 2019	$	3,666,517		$	368,621		$	(120,965	)	$	4,045,530		$	(632,194	)	$	5,423		$	102	102,498,285	$	—	5,557

See Notes to Unaudited Condensed Consolidated Financial Statements

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY THREE AND SIX MONTHS ENDED JUNE 30, 2018 (In thousands, except for share data) (Unaudited)

				Retained (Deficit) Earnings			Accumulated Other Comprehensive (Loss) Income			Additional Paid-In Capital									Common Stock
	Total																		Class A			Class B
													Treasury Stock			Non- controlling Interests			Amount (at Cost)		Shares	Amount (at Cost)		Shares
Balance at December 31, 2017	$	3,217,180		$	(114,240	)	$	(48,061	)	$	4,011,530		$	(632,194	)	$	44		$	101	101,429,999	$	—	5,557
Comprehensive income:
Net income (loss)	141,183			141,189			—			—			—			(6		)	—		—	—		—
Other comprehensive income, net of taxes	8,492			—			8,492			—			—			—			—		—	—		—
Comprehensive income	149,675
Regular dividends declared to shareholders and warrant holders, $0.25 per share	(21,922		)	(22,243		)	—			321			—			—			—		—	—		—
Stock-based compensation	5,114			—			—			5,114			—			—			—		—	—		—
Net share settlements of stock-based awards	(4,912		)	—			—			(4,913		)	—			—			1		283,545	—		—
Balance at March 31, 2018	$	3,345,135		$	4,706		$	(39,569	)	$	4,012,052		$	(632,194	)	$	38		$	102	101,713,544	$	—	5,557
Comprehensive income:
Net income (loss)	84,438			84,442			—			—			—			(4		)	—		—	—		—
Other comprehensive loss, net of taxes	(1,431		)	—			(1,431		)	—			—			—			—		—	—		—
Comprehensive income	83,007
Regular dividends declared to shareholders and warrant holders, $0.25 per share	(21,925		)	(22,228		)	—			303			—			—			—		—	—		—
Stock-based compensation	5,397			—			—			5,397			—			—			—		—	—		—
Net share settlements of stock-based awards	(230		)	—			—			(230		)	—			—			—		14,433	—		—
Distribution to noncontrolling interests, net	(2		)	—			—			—			—			(2		)	—		—	—		—
Balance at June 30, 2018	$	3,411,382		$	66,920		$	(41,000	)	$	4,017,522		$	(632,194	)	$	32		$	102	101,727,977	$	—	5,557

See Notes to Unaudited Condensed Consolidated Financial Statements

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 (Note 8)	—			(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		)

See Notes to Unaudited Condensed Consolidated Financial Statements

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
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

Price	46.31	EPS	4
Shares	89	P/E	11
MCap	4,127	P/FCF	14
Net Debt	1,599	EBIT	703
TEV	5,726	TEV/EBIT	8
TTM 2019-06-30, in MM, except price, ratios

10-Q	2019-06-30	Filed 2019-08-09
10-Q	2019-03-31	Filed 2019-05-10
10-K	2018-12-31	Filed 2019-03-01
10-Q	2018-09-30	Filed 2018-11-09
10-Q	2018-06-30	Filed 2018-08-09
10-Q	2018-03-31	Filed 2018-05-10
10-K	2017-12-31	Filed 2018-03-01
10-Q	2017-09-30	Filed 2017-11-08
10-Q	2017-06-30	Filed 2017-08-09
10-Q	2017-03-31	Filed 2017-05-10
10-K	2016-12-31	Filed 2017-03-01
10-Q	2016-09-30	Filed 2016-11-09
10-Q	2016-06-30	Filed 2016-08-09
10-Q	2016-03-31	Filed 2016-05-10
10-K	2015-12-31	Filed 2016-02-29
10-Q	2015-09-30	Filed 2015-11-10
10-Q	2015-06-30	Filed 2015-08-13
10-Q	2015-03-29	Filed 2015-05-08
10-K	2014-12-28	Filed 2015-03-06

8-K	2019-09-19
8-K	2019-09-17
8-K	2019-09-17
8-K	2019-09-12
8-K	2019-09-10
8-K	2019-09-06
8-K	2019-09-03
8-K	2019-08-28
8-K	2019-08-21
8-K	2019-08-15
8-K	2019-08-13
8-K	2019-08-09
8-K	2019-08-02
8-K	2019-05-10
8-K	2019-05-01
8-K	2019-03-12
8-K	2019-03-01
8-K	2019-01-25
8-K	2019-01-25
8-K	2018-12-18
8-K	2018-12-03
8-K	2018-11-30
8-K	2018-11-30
8-K	2018-11-09
8-K	2018-10-25
8-K	2018-08-09
8-K	2018-08-09
8-K	2018-05-30
8-K	2018-05-10
8-K	2018-03-01
8-K	2018-02-15
8-K	2018-01-26
8-K	2018-01-18

EX-31.1	q22019-ex311.htm
EX-31.2	q22019-ex312.htm
EX-32.1	q22019-ex321.htm
EX-32.2	q22019-ex322.htm

TRCO 10Q Quarterly Report

Tribune Media Earnings 2019-06-30