2014

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



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