Company Quick10K Filing
Quick10K
Tribune Media
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$46.30 88 $4,090
10-Q 2019-06-30 Quarter: 2019-06-30
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-K 2015-12-31 Annual: 2015-12-31
10-Q 2015-09-30 Quarter: 2015-09-30
10-Q 2015-06-30 Quarter: 2015-06-30
10-Q 2015-03-29 Quarter: 2015-03-29
10-K 2014-12-28 Annual: 2014-12-28
8-K 2019-08-09 Earnings, Exhibits
8-K 2019-08-02 Other Events
8-K 2019-05-10 Earnings, Exhibits
8-K 2019-05-01 Shareholder Vote
8-K 2019-03-12 Shareholder Vote, Other Events, Exhibits
8-K 2019-01-25 Other Events
8-K 2019-01-25 Other Events, Exhibits
8-K 2019-01-25 Other Events, Exhibits
8-K 2018-12-18 Officers
8-K 2018-12-03 Other Events, Exhibits
8-K 2018-11-30 Officers
8-K 2018-11-09 Earnings, Exhibits
8-K 2018-10-25 Officers
8-K 2018-08-09 Earnings, Regulation FD, Exhibits
8-K 2018-08-09 Officers
8-K 2018-05-30 Shareholder Vote
8-K 2018-02-15 Officers
8-K 2018-01-26 Officers
8-K 2018-01-18 Officers
VTR Ventas 22,110
CRI Carters 4,530
BVN Buenaventura Mining 3,830
BANR Banner 1,910
SBCF Seacoast Banking of Florida 1,400
UVE Universal Insurance Holdings 1,010
CAI CAI International 418
AINC Ashford 132
DLNG Dynagas Lng Partners 79
MARPS Marine Petroleum Trust 5
TRCO 2019-06-30
Part I. Financial Information
Item 1. Financial Statements
Note 1: Basis of Presentation and Significant Accounting Policies
Note 2: Assets Held for Sale
Note 3: Leases
Note 4: Goodwill and Other Intangible Assets
Note 5: Investments
Note 6: Debt
Note 7: Fair Value Measurements
Note 8: Commitments and Contingencies
Note 9: Income Taxes
Note 10: Pension and Other Retirement Plans
Note 11: Capital Stock
Note 12: Stock-Based Compensation
Note 13: Earnings per Share
Note 14: Accumulated Other Comprehensive Loss
Note 15: Business Segments
Note 16: Condensed Consolidating Financial Statements
Note 17: Subsequent Events
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.1 q22019-ex311.htm
EX-31.2 q22019-ex312.htm
EX-32.1 q22019-ex321.htm
EX-32.2 q22019-ex322.htm

Tribune Media Earnings 2019-06-30

TRCO 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

Document
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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
OR
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.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 2.
Item 3.
Item 4.
Part II. Other Information
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.









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
2



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
3



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
4



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
5



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
6



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
7



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
8



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

 
(2
)
Net cash used in financing activities
(41,164
)
 
(48,991
)
 
 
 
 
Net Increase in Cash, Cash Equivalents and Restricted Cash
251,067

 
154,206

Cash, cash equivalents and restricted cash, beginning of period
1,079,648

 
691,251

Cash, cash equivalents and restricted cash, end of period
$
1,330,715

 
$
845,457

 
 
 
 
Cash, Cash Equivalents and Restricted Cash are Comprised of:
 
 
 
Cash and cash equivalents
$
1,314,108

 
$
828,850

Restricted cash and cash equivalents
16,607

 
16,607

Total cash, cash equivalents and restricted cash
$
1,330,715

 
$
845,457

 
 
 
 
Supplemental Schedule of Cash Flow Information
 
 
 
Cash paid during the period for:
 
 
 
   Interest
$
83,075

 
$
79,027

   Income taxes, net
$
65,347

 
$
64,294




See Notes to Unaudited Condensed Consolidated Financial Statements
9


    

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

        

NOTE 1: BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Presentation—All references to Tribune Media Company or Tribune Company in the accompanying unaudited condensed consolidated financial statements encompass the historical operations of Tribune Media Company and its subsidiaries (collectively, the “Company”).
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial reporting. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K.
In the opinion of management, the financial statements contain all adjustments necessary to state fairly the financial position of the Company as of June 30, 2019 and the results of operations and cash flows for the three and six months ended June 30, 2019 and June 30, 2018. All adjustments reflected in the accompanying unaudited condensed consolidated financial statements, which management believes necessary to state fairly the financial position, results of operations and cash flows, have been reflected and are of a normal recurring nature. Results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.
Nexstar Merger Agreement—On November 30, 2018, the Company entered into an Agreement and Plan of Merger (the “Nexstar Merger Agreement”) with Nexstar Media Group, Inc. (“Nexstar”) and Titan Merger Sub, Inc. (the “Nexstar Merger Sub”) providing for the acquisition by Nexstar of all of the outstanding shares of the Company’s Class A common stock (“Class A Common Stock”) and Class B common stock (“Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”), by means of a merger of Nexstar Merger Sub with and into Tribune Media Company, with the Company surviving the merger as a wholly-owned subsidiary of Nexstar (the “Nexstar Merger”).
In the Nexstar Merger, each share of Common Stock issued and outstanding immediately prior to the effective time of the Nexstar Merger (the “Effective Time”) (other than shares held by (i) any Tribune subsidiary, Nexstar or any Nexstar subsidiary or (ii) Tribune shareholders who have not voted in favor of adopting the Nexstar Merger Agreement and who have demanded and perfected (and not validly withdrawn or waived) their appraisal rights in compliance with Section 262 of the DGCL) will be converted into the right to receive a cash payment of $46.50 (the “base merger consideration”), plus, if the Nexstar Merger closes after August 31, 2019 (the “Adjustment Date”), an additional amount in cash equal to (a) (i) $0.009863 multiplied by (ii) the number of calendar days elapsed after Adjustment Date to and including the date on which the Nexstar Merger closes, minus (b) the amount of any dividends declared by the Company after the Adjustment Date with a record date prior to the date on which the Nexstar Merger closes, in each case, without interest and less any required withholding taxes (the “additional per share consideration,” and together with the base merger consideration, the “Nexstar Merger Consideration”). The additional per share consideration will not be less than zero.
Each option to purchase shares of Common Stock outstanding as of immediately prior to the Effective Time, whether or not vested or exercisable, will be cancelled and converted into the right to receive, for each share of Common Stock subject to such stock option, a cash payment equal to the excess, if any, of the value of the Nexstar Merger Consideration over the exercise price per share of such stock option, without any interest and subject to all applicable withholding. Any stock option that has an exercise price per share that is greater than or equal to the Nexstar Merger Consideration will be cancelled for no consideration or payment. Each award of restricted stock units outstanding as of immediately prior to the Effective Time, whether or not vested, will immediately vest and be cancelled and converted into the right to receive a cash payment equal to the product of the total number of shares of Common Stock underlying such restricted stock unit multiplied by the Nexstar Merger Consideration, without any interest and subject to all applicable withholding (the “RSU Consideration”), except that each award of restricted stock units granted to an employee on or after December 1, 2018 (other than restricted stock units required to be granted pursuant to employment agreements or offer letters) (“Annual Tribune RSUs”) that has vested as of the



10




TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)



Effective Time of the Nexstar Merger will be cancelled and converted into the right to receive the RSU Consideration and any Annual Tribune RSUs that remain unvested as of the Effective Time of the Nexstar Merger will be cancelled for no consideration or payment. Each award of performance stock units outstanding as of immediately prior to the Effective Time, whether or not vested, will immediately vest (with performance conditions for each open performance period as of the closing date deemed achieved at the applicable “target” level performance for such performance stock units) and be cancelled and converted into the right to receive a cash payment equal to the product of the total number of shares of Common Stock underlying such performance stock units multiplied by the Nexstar Merger Consideration, without any interest and subject to all applicable withholding. Each outstanding award of deferred stock units outstanding as of immediately prior to the Effective Time will be cancelled and converted into the right to receive a cash payment equal to the product of the total number of shares of Common Stock underlying such deferred stock units multiplied by the Nexstar Merger Consideration, without interest and subject to all applicable withholding. Each unexercised warrant to purchase shares of Common Stock outstanding as of immediately prior to the Effective Time will be assumed by Nexstar and converted into a warrant exercisable for the Nexstar Merger Consideration which the shares of Common Stock underlying such warrant would have been entitled to receive upon consummation of the Nexstar Merger and otherwise upon the same terms and conditions of such warrant immediately prior to the Effective Time.
The consummation of the Nexstar Merger is subject to the satisfaction or waiver of certain customary conditions, including, among others: (i) the adoption of the Nexstar Merger by holders of a majority of the Company’s outstanding Common Stock, (ii) the receipt of approval from the Federal Communications Commission (the “FCC”) (the “FCC Approval”) and the expiration or termination of the waiting period applicable to the Nexstar Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”) (the “HSR Approval”) and (iii) the absence of any order or law of any governmental authority that prohibits or makes illegal the consummation of the Nexstar Merger. The Company’s and Nexstar’s respective obligations to consummate the Nexstar Merger are also subject to certain additional customary conditions, including (i) the accuracy of the representations and warranties of the other party (generally subject to a “material adverse effect” standard), (ii) performance by the other party of its covenants in the Nexstar Merger Agreement in all material respects and (iii) with respect to Nexstar’s obligation to consummate the Nexstar Merger, since the date of the Nexstar Merger Agreement, no material adverse effect with respect to the Company having occurred.
The applications for FCC approval (the “Merger Applications”) were filed on January 7, 2019. On February 14, 2019, the FCC issued a public notice of filing of the Merger Applications which set deadlines for petitions to deny the applications, oppositions to petitions to deny and replies to oppositions to petitions to deny.
On February 7, 2019, the Company received a request for additional information and documentary material, often referred to as a “second request,” from the United States Department of Justice (the “DOJ”) in connection with the Nexstar Merger Agreement. The second request was issued under the HSR Act. Nexstar received a substantively identical request for additional information and documentary material from the DOJ in connection with the transactions contemplated by the Nexstar Merger Agreement. Consummation of the transactions contemplated by the Nexstar Merger Agreement is conditioned on expiration of the waiting period applicable under the HSR Act, among other conditions. Issuance of the second request extends the waiting period under the HSR Act until 30 days after Nexstar and the Company have substantially complied with the second request, unless the waiting period is terminated earlier by the DOJ or the parties voluntarily extend the time for closing.
On July 31, 2019, the DOJ and the States and Commonwealths of Illinois, Pennsylvania and Virginia filed a complaint and proposed settlement in the U.S. District Court for the District of Columbia by requiring Nexstar and the Company to divest broadcast television stations in 13 Designated Market Areas as a condition of closing the Nexstar Merger. This proposed settlement allows the Nexstar Merger to proceed once the court has signed the Hold Separate Stipulation and Order, subject to the closing conditions contained in the Nexstar Merger Agreement, including approval by the FCC.



11




TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)



On March 12, 2019, holders of a majority of the outstanding shares of the Company’s Class A Common Stock and Class B Common Stock, voting as a single class, voted on and approved the Nexstar Merger Agreement at a duly called special meeting of Tribune Media Company shareholders.
On March 20, 2019, in connection with its divestiture obligations under the Nexstar Merger Agreement, Nexstar entered into definitive asset purchase agreements with TEGNA Inc. (“TEGNA”) and The E.W. Scripps Company (“Scripps”) to sell a total of 19 stations (including 10 Tribune Media Company-owned stations, as well as 3 stations to which the Company provides certain services (WTKR-TV, Norfolk, VA, WGNT-TV, Portsmouth, VA and WNEP-TV, Scranton, PA, collectively, the “Dreamcatcher Stations”)) in 15 markets to TEGNA and Scripps following the completion of the Nexstar Merger (the “Nexstar Transactions”). Additionally, on April 8, 2019, Nexstar entered into a definitive agreement with Circle City Broadcasting I, Inc. (“CCB”) to sell 2 Nexstar stations to CCB following the completion of the Nexstar Merger. The consummation of each transaction is subject to the satisfaction or waiver of certain customary conditions, including, among others, (i) the closing of the transactions contemplated by the Nexstar Merger Agreement, (ii) the receipt of approval from the FCC and the DOJ and the expiration or termination of any waiting period applicable to such transaction under the HSR Act and (iii) the absence of certain legal impediments to the consummation of such transaction. On April 15, 2019, the Federal Trade Commission issued an early termination notice with respect to the waiting period applicable under the HSR Act in connection with the transaction with Scripps.
On April 2, 2019, the Company exercised an option with Dreamcatcher Broadcasting LLC (“Dreamcatcher”) to repurchase the Dreamcatcher Stations, to be consummated substantially concurrent with the closing of the Nexstar Merger (the “Dreamcatcher Repurchase”). Following the consummation of the Dreamcatcher Repurchase, the Dreamcatcher Stations are expected to be sold to TEGNA and Scripps in connection with the Nexstar Merger. In the event the Company is unable to consummate the Nexstar Merger, the Company may rescind its option to repurchase the Dreamcatcher stations.
Applications seeking FCC consent to station divestitures necessary to obtain the FCC Approval (the “Divestiture Applications”) were filed on April 3, 2019, April 8, 2019, April 10, 2019 and April 16, 2019. On April 26, 2019, the FCC issued a public notice of the filing of the Divestiture Applications which set deadlines for petitions to deny the applications, oppositions to petitions to deny and replies to oppositions to petitions to deny.
The Nexstar Merger Agreement may be terminated at any time prior to the Effective Time: (i) by mutual written consent of Nexstar and the Company; (ii) by either Nexstar or the Company (a) if the Effective Time has not occurred on or before November 30, 2019, provided that (x) if, on the initial end date, any of the conditions to the consummation of the Nexstar Merger related to the HSR Approval or the FCC Approval have not been satisfied, but all other conditions the consummation of the Nexstar Merger have been satisfied or waived or capable of being satisfied, then the end date will be automatically extended to February 29, 2020 and (y) in the event the marketing period for the debt financing for the transaction has commenced but has not completed by the end date, the end date may be extended (or further extended) by Nexstar on one occasion in its sole discretion by providing written notice thereof to the Company at least one business day prior to the end date until the date that is four business days after the last scheduled expiration date of the marketing period (unless the failure of the Effective Time to occur before the end date was primarily due to such party’s breach of any of its obligations under the Nexstar Merger Agreement), (b) if any governmental authority of competent jurisdiction has issued an order permanently prohibiting the consummation of the Nexstar Merger and such order has become final and non-appealable (unless such order was primarily attributable to such party’s breach of the Nexstar Merger Agreement); and (iii) by either Nexstar or the Company in certain circumstances, as described in the Nexstar Merger Agreement.
As further described in Note 1 to the Company’s audited consolidated financial statements for the year ended December 31, 2018, the Company must pay Nexstar a termination fee of $135 million if the Company or Nexstar terminate the Nexstar Merger Agreement in certain circumstances, except that such termination fee may be reduced by any previously paid amounts relating to the documented, out-of-pocket expenses of Nexstar in an amount not to exceed $15 million.



12




TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)



Change in Accounting Principles—In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, “Leases (Subtopic 842).” The new guidance requires lessees to recognize assets and liabilities arising from leases as well as extensive quantitative and qualitative disclosures. A lessee needs to recognize on its balance sheet a right-of-use asset and a lease liability for the majority of its leases (other than leases with a term of less than 12 months). The lease liabilities should be equal to the present value of lease payments not yet paid. The right-of-use asset is measured at the lease liability amount, adjusted for lease prepayment, lease incentives received and the lessee’s initial direct costs. In January 2018, the FASB issued ASU No. 2018-01, “Leases (Topic 842) - Land Easement Practical Expedient for Transition to Topic 842,” which provides an optional transition practical expedient to not evaluate under Topic 842 existing or expired land easements that were not previously accounted for as leases under the current leases guidance in Topic 840. In July 2018, the FASB issued ASU No. 2018-10, “Codification Improvements to Topic 842, Leases,” and ASU No. 2018-11, “Leases (Topic 842), Targeted Improvements,” which affect certain aspects of the previously issued guidance including an additional transition method as well as a new practical expedient for lessors. In December 2018, the FASB issued ASU No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses” and ASU No. 2018-20, “Leases (Topic 842), Narrow-Scope Improvements for Lessors,” which provide additional guidance for lessor accounting as well as a new practical expedient for lessors. In March 2019, the FASB issued ASU No. 2019-01, “Leases (Topic 842), Codification Improvements,” which provides additional guidance on disclosure requirements. The Company adopted Topic 842 in the first quarter of 2019. The adoption of Topic 842 did not have a material impact on the Company’s unaudited Condensed Consolidated Statements of Operations, unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) and unaudited Condensed Consolidated Statements of Cash Flows. Refer to Note 3 for information regarding the impacts of the adoption. See the Leases accounting policy below for additional information.
In August 2017, the FASB issued ASU No. 2017-12, “Derivatives and Hedging (Topic 815).” The standard simplifies the application of the hedge accounting guidance and enables entities to better portray the economic results of their risk management activities in the financial statements. The new guidance eliminates the requirement and the ability to separately record ineffectiveness on cash flow and net investment hedges and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. The standard requires certain additional disclosures that focus on the effect of hedge accounting whereas the disclosure of hedge ineffectiveness is eliminated. The amendments expand the types of permissible hedging strategies. Additionally, the amendment makes the hedge documentation and effectiveness assessment less complex. The amendments in ASU 2017-12 related to cash flow hedge relationships that exist on the date of adoption should be applied using a modified retrospective approach with the cumulative effect of initially applying ASU 2017-12 at the date of initial application. The presentation and disclosure requirements apply prospectively. The Company adopted ASU 2017-12 in the first quarter of 2019. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.
No other significant accounting policies and estimates have changed from those detailed in Note 1 to the Company’s audited consolidated financial statements for the year ended December 31, 2018.
Use of Estimates—The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. Actual results could differ from these estimates.
Leases—The Company determines whether an arrangement contains a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, current operating lease liabilities and non-current operating lease liabilities in the unaudited Condensed Consolidated Balance Sheets. The Company does not currently have any finance lease arrangements.
ROU assets represent the Company’s right to use an underlying asset for the lease term. The operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of the fixed lease payments over the lease term. Unless the rate of interest implicit in the lease arrangement is known, the Company’s



13




TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)



collateralized incremental borrowing rate for a period commensurate with the lease term at lease commencement is used to calculate the present value of the lease payments not yet paid. When the Company knows the implicit rate of interest in the arrangement, that rate is used. The operating lease ROU asset includes any prepaid lease payments, initial direct costs, if applicable, less lease incentives. The Company has lease agreements with lease and non-lease components. To the extent the non-lease components require fixed payments, the Company accounts for both the lease and non-lease component as a single lease component in accordance with Topic 842.
Leases generally include options to extend or terminate a lease. These options are included in the lease term when it is reasonably certain that the Company will exercise the renewal or termination option. The Company does not record an operating lease ROU asset or liability for leases with a term of twelve months or less with the related lease expense recognized over the term of the lease. Operating lease expense is recognized on a straight-line basis over the lease term.
Revenue Recognition—The Company recognizes revenues when control of the promised goods or services is transferred to the Company’s customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.
The following table represents the Company’s revenues disaggregated by revenue source for the Television and Entertainment segment (in thousands):
 
Three Months Ended
 
Six Months Ended
 
June 30, 2019
 
June 30, 2018
 
June 30, 2019
 
June 30, 2018
Advertising
$
298,899

 
$
311,431

 
$
568,788

 
$
581,870

Retransmission revenues
132,342

 
117,185

 
265,202

 
235,327

Carriage fees
40,771

 
40,815

 
81,910

 
82,477

Other
10,545

 
16,986

 
20,084

 
27,445

Total operating revenues
$
482,557

 
$
486,417

 
$
935,984

 
$
927,119


In addition to the operating revenues included in the Television and Entertainment segment, the Company’s consolidated operating revenues include other revenue of $1 million and $3 million for the three months ended June 30, 2019 and June 30, 2018, respectively, and $3 million and $6 million for the six months ended June 30, 2019 and June 30, 2018, respectively, in Corporate and Other, which consists of real estate revenues.
Variable Interests—The Company evaluates its investments and other transactions to determine whether any entities associated with the investments or transactions should be consolidated under the provisions of FASB Accounting Standards Codification (“ASC”) Topic 810, “Consolidation.” The Company consolidates variable interest entities (“VIEs”) when it is the primary beneficiary.
Topix—At June 30, 2019 and December 31, 2018, the Company indirectly held a variable interest in Topix, LLC (through its investment in TKG Holdings II, LLC) (“Topix”). The Company has determined that it is not the primary beneficiary of Topix and therefore has not consolidated it as of and for the periods presented in the unaudited condensed consolidated financial statements. The Company’s maximum loss exposure related to Topix is limited to its equity investment, which was $4 million and $5 million at June 30, 2019 and December 31, 2018, respectively.
Dreamcatcher—Dreamcatcher was formed in 2013 specifically to comply with the cross-ownership rules of the FCC related to the Company’s acquisition of Local TV, LLC on December 27, 2013 (the “Local TV Acquisition”). See Note 1 to the Company’s audited consolidated financial statements for the year ended December 31, 2018 for additional information. The Company’s unaudited condensed consolidated financial statements as of and for the three and six months ended June 30, 2019 and June 30, 2018 include the results of operations and the financial position of Dreamcatcher, a fully-consolidated VIE. Net revenues of the Dreamcatcher Stations included in the Company’s unaudited Condensed Consolidated Statements of Operations for the three months ended June 30, 2019



14




TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)



and June 30, 2018, were $20 million and $19 million, respectively, and for the six months ended June 30, 2019 and June 30, 2018, were $38 million and $37 million, respectively. Operating profits of the Dreamcatcher stations included in the Company’s unaudited Condensed Consolidated Statements of Operations for the three months ended June 30, 2019