Attached files
| file | filename |
|---|---|
| 8-K - 8-K - TRIBUNE MEDIA CO | d884227d8k.htm |
| EX-99.1 - EX-99.1 - TRIBUNE MEDIA CO | d884227dex991.htm |
 Q4
& Full Year 2014 Performance Summary M
A
R
C
H
2
0
1
5
Exhibit 99.2 |
 2
Cautionary Statement Regarding Forward Looking Statements
This presentation contains “forward-looking statements” within the
meaning of the federal securities laws. Forward-looking statements are subject to known and unknown risks
and uncertainties, many of which may be beyond our control.
Forward-looking statements may include, but are not limited to, statements concerning our financial outlook and
guidance, including our 2015 forecasted revenues, Adjusted EBITDA and other
consolidated and segment financial performance guidance, our expectations for Adjusted EBITDA
growth in 2016, our long-term outlook for WGN America and Tribune Studios
revenue and programming expenses as well as Digital and Data segment revenue growth and
Adjusted EBITDA margins, our expectation with respect to future cash dividends
on our common stock, the conditions in our industry, our operations, our economic performance
and financial condition, including, in particular, statements relating to our
business and growth strategy and product development efforts. Important factors that could cause
actual results, developments and business decisions to differ materially from
these forward-looking statements are uncertainties discussed below and in the “Risk Factors”
section of the Company’s Annual Report on Form 10-K filed with
the U.S. Securities and Exchange Commission on March 6, 2015. “Forward-looking statements” include all
statements that do not relate solely to historical or current facts, and can be
identified by the use of words such as “may,” “might,” “will,” “could” “should,” “estimate,” “project,”
“plan,” “anticipate,” “expect,”
“intend,” “outlook,” “seek,” “designed,” “assume,” “implied,” “believe” and other similar expressions. You are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of their dates.
These forward-looking statements are based on estimates and assumptions by our management that,
although we believe to be reasonable, are inherently uncertain and subject to a
number of risks and uncertainties. The following list represents some, but not necessarily all, of the factors
that could cause actual results to differ from projected or historical results or those anticipated or predicted
by these forward-looking statements: competition and other economic
conditions including fragmentation of the media landscape and competition from other media alternatives;
changes in advertising demand and audience shares; changes in the overall
market for television advertising, including through regulatory and judicial rulings; our ability to protect
our intellectual property and other proprietary rights; availability and cost
of broadcast rights; our ability to adapt to technological changes; our ability to develop and grow our
online businesses; availability and cost of quality network, syndicated and
sports programming affecting our television ratings; the loss or modification of our network affiliation
agreements; our ability to renegotiate retransmission consent agreements; our
ability to expand our operations internationally; the incurrence of costs to address contamination
issues at sites owned, operated or used by our business; adverse results from
litigation, governmental investigations or tax-related proceedings or audits; our ability to settle
unresolved claims filed in connection with our and certain of our direct and
indirect wholly-owned subsidiaries’ Chapter 11 cases and resolve the appeals seeking to overturn the
bankruptcy court order confirming the Fourth Amended Joint Plan of
Reorganization for Tribune Company and its Subsidiaries; our ability to satisfy pension and other
postretirement employee benefit obligations; our ability to attract and retain
employees; the effect of labor strikes, lock-outs and labor negotiations; our ability to realize benefits or
synergies from acquisitions or divestitures or to operate our businesses
effectively following acquisitions or divestitures; the financial performance of our equity method
investments; the impairment of our existing goodwill and other intangible
assets; changes in accounting standards; our ability to pay cash dividends on our common stock;
increased interest rate risk due to our variable rate indebtedness; our
indebtedness and ability to comply with covenants applicable to our debt financing and other contractual
commitments; our ability to satisfy future capital and liquidity requirements;
our ability to access the credit and capital markets at the times and in the amounts needed and on
acceptable terms and other events beyond our control that may result in
unexpected adverse operating results. In addition, in light of these risks and uncertainties, the matters
referred to in the forward-looking statements contained in this
presentation may not in fact occur. Any forward-looking information presented herein is made only as of the date of
this presentation and we undertake no obligation to update or revise any
forward-looking statement as a result of new information, future events or otherwise, except as otherwise
required by law.
|
 3
Non-GAAP Financial Measures
This presentation includes a discussion of Adjusted EBITDA for the Company and
our operating segments (Television and Entertainment, Digital and Data, and
Corporate and Other) and Broadcast Cash Flow for our Television and
Entertainment segment. Adjusted EBITDA and Broadcast Cash Flow are financial
measures that are not recognized under accounting principles generally accepted
in the U.S. (“GAAP”). Adjusted EBITDA for the Company is defined as net
income before income (loss) from discontinued operations, net of taxes, income
taxes, investment transactions, losses on the extinguishment of debt, interest
and dividend income, interest expense, pension expense (credit), equity income
and losses, depreciation and amortization, stock-based compensation, certain
special items (including severance), non-operating items, sales of real
estate and reorganization items. Adjusted EBITDA for the Company’s operating segments
is calculated as segment operating profit plus depreciation, amortization,
pension expense (credit), stock-based compensation and certain special items
(including severance). Broadcast Cash Flow for the Television and Entertainment
segment is calculated as Television and Entertainment Adjusted EBITDA plus
broadcast rights- amortization expense less broadcast rights- cash
payments. We believe that Adjusted EBITDA and Broadcast Cash Flow are measures
commonly used by investors to evaluate our performance with that of our
competitors. We also present Adjusted EBITDA because we believe investors, analysts
and rating agencies consider it useful in measuring our ability to meet our
debt service obligations. We further believe that the disclosure of Adjusted EBITDA
and Broadcast Cash Flow is useful to investors, as these non-GAAP measures
are used, among other measures, by our management to evaluate our
performance. By disclosing Adjusted EBITDA and Broadcast Cash Flow, we believe
that we create for investors a greater understanding of, and an enhanced
level of transparency into, the means by which our management operates our
company. Adjusted EBITDA and Broadcast Cash Flow are not measures presented
in accordance with GAAP, and our use of these terms may vary from that of
others in our industry. Adjusted EBITDA and Broadcast Cash Flow should not be
considered as an alternative to net income, operating profit, revenues, cash
provided by operating activities or any other measures derived in accordance with
GAAP as measures of operating performance or liquidity. The tables at the
end of this presentation include reconciliations of consolidated and segment
Adjusted EBITDA and Broadcast Cash Flow to the most directly comparable
financial measure calculated and presented in accordance with GAAP. No
reconciliation of the forecasted range for Adjusted EBITDA on a consolidated or
segment basis for fiscal 2015 is included in this presentation because we are
unable to quantify certain amounts that would be required to be included in the
GAAP measure without unreasonable efforts and we believe such reconciliations
would imply a degree of precision that would be confusing or misleading to
investors. |
 4
Tribune Media
A diverse combination of media assets that meaningfully touch millions of people
every day, including compelling content in news and entertainment, significant
broadcast distribution, an emerging cable network, and a cutting-edge digital and
data business.
•
Broadcast: 42 owned or operated broadcast stations in major markets across
the
country.
•
WGN America: A national, general entertainment network airing high quality original
content and reaching approximately 73 million households.
•
Digital and Data: Growing global metadata business, powering some of the biggest
media brands in the world.
•
Real Estate and Investments: 77 real estate properties and
equity investments in a variety of media, online and other properties.
|
 5
Q4 Financial Highlights
Consolidated operating revenues grew 85% over Q4’13 to $553.4 million.
Consolidated operating profit grew 276% over Q4’13 to $163.4 million.
Consolidated Adjusted EBITDA, which excludes cash distributions from equity investments,
grew 121% over Q4’13 to $211.0 million.
Diluted earnings per share from continuing operations of $3.14, as compared to $0.33 in
fourth quarter 2013.
Pro Forma
(1)
Television and Entertainment segment revenues grew 15% over Q4’13 to $479.1
million.
Pro Forma
(1)
Television and Entertainment Adjusted EBITDA grew 30% over Q4’13 to $202.6
million.
Digital and Data segment revenues increased 217% over Q4’13 to $61.2 million.
Digital and Data Adjusted EBITDA increased 220% over Q4’13 to $23.8 million.
(1)
Amounts
are
pro
forma
for
the
acquisition
of
Local
TV,
which
was
completed
on
December
27,
2013,
as
if
the
acquisition
had
occurred
as
of
the
beginning of fiscal 2013.
Pro forma operating expenses, depreciation and amortization for Local TV are based
on Local TV's historical basis of presentation and do not reflect the impact of purchase
accounting. |
 6
Full Year 2014 Financial Highlights
Consolidated operating revenues grew 70% over 2013 to $1,949.3 million.
Consolidated operating profit grew 51% over 2013 to $301.1 million.
Consolidated Adjusted EBITDA, which excludes cash distributions from equity investments,
grew 74% over 2013 to $607.8 million.
Cash distributions from equity investments of $210.7 million.
Diluted earnings per share from continuing operations of $4.62, as compared to $1.62 in
2013.
Pro Forma
(1)
Television and Entertainment segment revenues grew 8.8% over 2013 to
$1,720.5 million.
Pro Forma
(1)
Television and Entertainment Adjusted EBITDA grew 7.4% over 2013 to $614.8
million.
Digital and Data segment revenues increased 120% over 2013 to $174.0 million.
Digital and Data Adjusted EBITDA increased 34% over 2013 to $38.6 million.
(1)
Amounts
are
pro
forma
for
the
acquisition
of
Local
TV,
which
was
completed
on
December
27,
2013,
as
if
the
acquisition
had
occurred
as
of
the
beginning
of
fiscal 2013.
Pro forma operating expenses, depreciation and amortization for Local TV are based
on Local TV's historical basis of presentation and do not reflect the impact of purchase
accounting. |
 7
2014 Strategic Highlights
Successfully converted 50% of WGN America subscribers from a superstation to cable.
Successfully
launched
two
original
series
on
WGN
America,
Salem
and
Manhattan.
Completed
four
strategic
acquisitions
within
our
Digital
and
Data
segment
–
Gracenote,
What’s-ON,
Baseline and HWW.
Completed the spin-off of the Company’s publishing operations into an independent
publicly-traded company
In a series of transactions, monetized the company’s interest in Classified Ventures,
including Apartments.com and Cars.com, for total net proceeds after taxes of
approximately $525 million. Sold property in Baltimore for net proceeds after taxes and
transaction costs of approximately $30 million.
In the fourth quarter, repurchased approximately 1.1 million shares of Class A common stock
for approximately $68 million bringing cumulative repurchases through March 5, 2015, to
approximately 3.9 million shares for approximately $233 million.
Listed Tribune Media Company Class A common stock on the New York Stock Exchange.
|
 8
Previous Guidance vs. Actual Results
2014 Results Exceeded High End of Guidance
(USD millions)
Low
High
Low
High
Net Revenues
Television & Entertainment
1,720
$
1,650
$
1,700
$
4%
1%
Digital & Data
174
160
175
9%
-1%
Corporate & Other
55
50
55
10%
0%
Total Net Revenues
1,949
$
1,860
$
1,930
$
5%
1%
Adjusted EBITDA
Television & Entertainment
615
$
590
$
605
$
4%
2%
Digital & Data
39
30
35
30%
11%
Corporate & Other
(46)
(55)
(40)
-16%
15%
Total Adjusted EBITDA
608
$
565
$
600
$
8%
1%
Guidance
2014 Actuals
Variance |
 9
Consolidated Financial Results
Dec. 28, 2014
Dec. 29, 2013
$
%
Dec. 28, 2014
Dec. 29, 2013
$
%
Operating Revenues
553,420
$
299,561
$
253,859
85%
1,949,359
$
1,147,240
$
802,119
70%
Operating Expenses
389,976
256,130
133,846
52%
1,648,177
948,200
699,977
74%
Operating Profit
163,444
43,431
120,013
*
301,182
199,040
102,142
51%
Adjusted EBITDA
211,005
$
95,286
$
115,719
*
607,783
$
348,919
$
258,864
74%
Adjusted EBITDA Margin
38.1%
31.8%
31.2%
30.4%
* Represents positive change in excess of 100%
Year ended:
Variance
Variance
Three months ended:
Significant revenue and margin improvement
(USD thousands) |
 10
Television and Entertainment Segment
Operating Results
Revenues
Adjusted EBITDA
(1)
Amounts
are
pro
forma
for
the
acquisition
of
Local
TV,
which
was
completed
on
December
27,
2013,
as
if
the
acquisition
had
occurred
as
of the
beginning of fiscal 2013. Pro forma operating expenses, depreciation and
amortization for Local TV are based on Local TV's historical basis of
presentation and do not reflect the impact of purchase accounting.
(USD thousands)
Increase driven by higher retransmission revenues, and
Strong political advertising revenues.
Revenue
increases
drove
significant
increase
in
Adjusted
EBITDA,
partially
offset
by
increased
programming and promotional expenses associated with new programming at WGN America.
Dec. 28, 2014
Dec. 29, 2013
Dec. 28, 2014
Dec. 29, 2013
As Reported
Pro Forma (1)
$
%
As Reported
Pro Forma (1)
$
%
Operating Revenues
479,157
$
415,892
$
63,265
15%
1,720,536
$
1,581,205
$
139,331
9%
Operating Expenses
332,766
307,047
25,719
8%
1,383,615
1,182,268
201,347
17%
Operating Profit
146,391
108,845
37,546
34%
336,921
398,937
(62,016)
-16%
Adjusted EBITDA
202,650
$
155,268
$
47,382
31%
614,805
$
572,578
$
42,227
7%
Adjusted EBITDA Margin
42.3%
37.3%
35.7%
36.2%
Variance
Three months ended:
Year ended:
Variance |
 11
Television and Entertainment Segment
Revenues
Full Year Revenues
(1)
Amounts
are
pro
forma
for
the
acquisition
of
Local
TV,
which
was
completed
on
December
27,
2013,
as
if
the
acquisition
had
occurred
as
of
the
beginning of
2013. Pro forma operating expenses, depreciation and amortization for Local TV are
based on Local TV's historical basis of presentation and do not reflect the
impact of purchase accounting.
Fourth Quarter Revenues
Dec. 28, 2014
Dec. 28, 2014
As Reported
Pro forma (1)
As Reported
Pro forma (1)
As Reported
As Reported
Pro forma (1)
As Reported
Pro forma (1)
As Reported
Advertising
Core (Local / National)
310,284
$
318,021
$
199,942
$
-2%
55%
1,186,165
$
1,226,389
$
776,601
$
-3%
53%
Political
54,845
5,428
2,055
*
*
90,209
15,747
7,009
*
*
Digital
12,595
10,032
4,070
26%
*
43,353
34,832
13,928
24%
*
Other
3,647
3,431
1,754
6%
*
16,237
16,431
12,194
-1%
33%
Total Advertising
381,371
$
336,912
$
207,821
$
13%
84%
1,335,964
$
1,293,399
$
809,732
$
3%
65%
Retransmission consent fees
58,447
34,774
14,741
68%
*
229,243
130,537
49,586
76%
*
Carriage fees
14,395
12,936
12,935
11%
11%
57,137
53,796
53,795
6%
6%
Barter/trade
9,257
11,253
8,651
-18%
7%
41,267
42,768
31,292
-4%
32%
Copyright royalties
7,104
10,689
10,689
-34%
-34%
27,161
32,954
32,954
-18%
-18%
Other
8,583
9,328
11,733
-8%
-27%
29,764
27,751
37,065
7%
-20%
Total operating revenues
479,157
$
415,892
$
266,570
$
15%
80%
1,720,536
$
1,581,205
$
1,014,424
$
9%
70%
* Represents positive change in excess of 100%
% Variance
Three months ended
Year ended
December 29, 2013
% Variance
December 29, 2013
(USD thousands)
Retransmission consent fees up 68% to $58.4 million.
Political revenues of $54.8 million (or $64.5 million on a
gross basis).
Core advertising down $7.7 million or 2.4%, primarily
attributable to displacement from political advertising.
Digital advertising up 26% to $12.6 million.
Retransmission consent fees up 76% to $229.2 million.
Political revenues of $90.2 million (or $106.1 million on a
gross basis).
Core advertising down $40.2 million or 3.3%, primarily
attributable to displacement from political advertising.
Digital advertising up 24% to $43.4 million. |
 12
Television and Entertainment Segment
Adjusted EBITDA
Adjusted EBITDA
(1)
Amounts
are
pro
forma
for
the
acquisition
of
Local
TV,
which
was
completed
on
December
27,
2013,
as
if
the
acquisition
had
occurred
as
of the
beginning of fiscal 2013. Pro forma operating expenses, depreciation and
amortization for Local TV are based on Local TV's historical basis of
presentation and do not reflect the impact of purchase accounting.
Dec. 28, 2014
Dec. 29, 2013
Dec. 28, 2014
Dec. 29, 2013
As Reported
Pro forma (1)
$
%
As Reported
Pro forma (1)
$
%
Operating Profit
146,391
$
108,845
$
37,546
34%
336,921
$
398,937
$
(62,016)
-16%
Depreciation
12,057
14,444
(2,387)
-17%
50,262
53,715
(3,453)
-6%
Amortization
42,217
29,451
12,766
43%
197,054
114,056
82,998
73%
Stock-based compensation
2,063
792
1,271
*
8,800
2,578
6,222
*
Severance and related charges
229
302
(73)
-24%
2,098
1,641
457
28%
Transaction-related costs
(387)
181
(568)
*
1,894
229
1,665
*
Gain on sales of real estate
(103)
—
(103)
-
(103)
—
(103)
-
Contract termination cost
(646)
—
(646)
-
15,000
—
15,000
-
Other
829
1,275
(446)
-35%
2,755
1,508
1,247
83%
Pension (credit) expense
—
(22)
22
*
124
(86)
210
*
Adjusted EBITDA
202,650
$
155,268
$
47,382
31%
614,805
$
572,578
$
42,227
7%
Broadcast rights - Amortization
65,624
53,266
12,358
23%
268,797
239,835
28,962
12%
Broadcast rights - Cash Payments
(76,130)
(68,470)
(7,660)
11%
(321,335)
(279,273)
(42,062)
15%
Broadcast Cash Flow
192,144
$
140,064
$
52,080
37%
562,267
$
533,140
$
29,127
5%
* Represents positive or negative change in excess of 100%
Variance
Three months ended:
Year ended:
Variance
(USD thousands)
Full Year Adjusted EBITDA impacted by programming and marketing costs associated with new
original programming at WGN America.
Fourth
quarter
Adjusted
EBITDA
impacted
by
costs
associated
with
new
original
programming
at
WGN
America,
as
well
as
higher costs associated with new syndicated content, including the premiere of
syndicated series Blue Bloods. |
 13
Digital and Data Segment
Summary of Operating Results
Revenues and Expenses
Dec. 28, 2014
Dec. 29, 2013
$
%
Dec. 28, 2014
Dec. 29, 2013
$
%
Operating Revenues
61,228
$
19,305
$
41,923
*
174,031
$
79,217
$
94,814
*
Operating Expenses
47,302
15,120
32,182
*
170,622
62,720
107,902
*
Operating Profit
13,926
4,185
9,741
*
3,409
16,497
(13,088)
-79%
Adjusted EBITDA
23,812
$
7,438
$
16,374
*
38,582
$
28,794
$
9,788
34%
Adjusted EBITDA Margin
38.9%
38.5%
22.2%
36.3%
* Represents positive change in excess of 100%
Year ended:
Variance
Variance
Three months ended:
(USD thousands)
Impacted by the acquisition of Gracenote, acquired January 2014.
Expect long-term net revenue growth of 10% to 12% annually.
Expect long-term EBITDA margins to grow to low 30% range. |
 14
Digital and Data Segment
Revenues
Revenues
Dec. 28, 2014
Dec. 29, 2013
$
%
Dec. 28, 2014
Dec. 29, 2013
$
%
Video
25,849
$
17,758
$
8,091
46%
91,299
$
68,708
$
22,591
33%
Music
34,386
-
34,386
-
77,729
-
77,729
-
Entertainment websites
and other
993
1,547
(554)
-36%
5,003
10,509
(5,506)
-52%
Total operating revenues
61,228
$
19,305
$
41,923
*
174,031
$
79,217
$
94,814
*
* Represents positive change in excess of 100%
Three months ended:
Variance
Year ended:
Variance
(USD thousands)
Music revenues are fully attributable to the Gracenote acquisition.
•
Historically,
Gracenote’s
automotive
music
revenues
are
disproportionately
higher
in
the
fourth
quarter.
Video revenues increased primarily due to acquisitions of Gracenote in January 2014,
What’s- ON in July 2014, Baseline in August 2014 and HWW in October 2014
as well as organic growth
in the legacy core video business. |
 15
Digital and Data Segment
Adjusted EBITDA
Adjusted EBITDA
Adjusted
EBITDA
impacted
by:
•
Operating costs incurred in connection with Newsbeat, which was shut down during the
third quarter of 2014
•
Costs associated with the establishment of the Digital and Data business infrastructure, and
•
Costs associated with the integration of acquired businesses.
Dec. 28, 2014
Dec. 29, 2013
$
%
Dec. 28, 2014
Dec. 29, 2013
$
%
Operating Profit
13,926
$
4,185
$
9,741
*
3,409
$
16,497
$
(13,088)
-79%
Depreciation
1,987
715
1,272
*
7,744
2,576
5,168
*
Amortization
6,425
2,316
4,109
*
21,233
9,191
12,042
*
Stock-based compensation
262
6
256
*
1,641
17
1,624
*
Severance and related charges
1,212
216
996
*
3,975
279
3,696
*
Other
—
—
-
-
580
234
346
*
Adjusted EBITDA
23,812
$
7,438
$
16,374
*
38,582
$
28,794
$
9,788
34%
* Represents positive change in excess of 100%
Variance
Variance
Three months ended:
Year ended:
(USD thousands) |
 16
Corporate and Other
Revenues and Expenses
(USD thousands)
Dec. 28, 2014
Dec. 29, 2013
$
%
Dec. 28, 2014
Dec. 29, 2013
$
%
Operating Revenues
13,035
$
13,686
$
(651)
-5%
54,792
$
53,599
$
1,193
2%
Operating Expenses
(9,908)
(30,418)
20,510
-67%
(93,940)
(66,996)
(26,944)
40%
Operating Profit (Loss)
3,127
(16,732)
19,859
*
(39,148)
(13,397)
(25,751)
*
Depreciation
3,901
2,543
1,358
53%
12,181
8,664
3,517
41%
Stock-based compensation
3,463
1,514
1,949
*
15,750
3,556
12,194
*
Transaction-related costs
2,957
14,316
(11,359)
-79%
13,790
19,545
(5,755)
-29%
Gain on sales of real estate
(21,285)
-
(21,285)
*
(21,588)
(135)
(21,453)
*
Severance and Other
41
1,358
(1,317)
-97%
4,178
517
3,661
*
Pension (credit) expense
(7,661)
(8,673)
1,012
-12%
(30,767)
(34,694)
3,927
-11%
Adjusted EBITDA
(15,457)
$
(5,674)
$
(9,783)
*
(45,604)
$
(15,944)
$
(29,660)
*
* Represents positive or negative change in excess of 100%
Variance
Three months ended:
Year ended:
Variance
•
Higher
compensation
expenses
as
a
result
of
the
full
year
impact
in
2014
of
the
timing
of
hiring
of
new
management
team
in
2013.
•
Costs associated with the implementation of improved business and technology applications
expected to improve productivity and
increase
operating
efficiencies
resulting
in
associated
cost
savings
beginning
in
2016.
Revenues
represent
real
estate
rental
revenues
earned
from
third
parties,
including
Tribune
Publishing.
Real estate revenues were more than offset by: |
 17
Cash Distributions from Equity Investments
TV Food Network 2014 distributions include a one-time distribution of $12.4 million.
Careerbuilder used cash to fund certain acquisitions in 2014 leading to a lower
year-over-year cash distribution.
In a series of transactions in 2014, the Company monetized its interests in Classified
Ventures, and therefore, will no longer receive cash distributions from this
investment. •
The
proceeds
from
the
sale
of
the
Company’s
interest
in
Classified
Ventures
are
not
reflected
in
the
table
above.
(USD millions)
2014
2013
TV Food Network
189.3
$
154.1
$
CareerBuilder
14.4
28.9
Classified Ventures
6.5
25.0
Other
0.5
-
Total Cash Distributions from Equity Investments
210.7
$
208.0
$
|
 18
Debt and Cash
December 28, 2014
December 29, 2013
Cash and cash equivalents
1,455,183
$
640,697
$
Debt:
Term Loan Facility, due 2020
3,471,017
3,763,577
Dreamcatcher Credit Facility, due
2018 23,914
26,933
Other
54
174,674
Total Debt
3,494,985
$
3,965,184
$
Reduced debt with proceeds of dividend
from Tribune Publishing upon spinoff (USD thousands)
|
 19
Focus on Shareholder Return
$400 million share repurchase program.
•
Since
inception
through
March
5,
2015,
repurchased
approximately
3.9
million
shares for
an aggregate purchase price of $233 million.
•
$167 million remains outstanding.
Announced one-time special dividend of approximately $650 million.
Adopted annual dividend policy.
•
The Company intends to begin payments of regular quarterly cash dividends of $0.25 per
share.
•
The Company expects the first dividend to be declared by the Board and paid in the
second fiscal quarter of 2015.
Strong Balance Sheet and Cash Generation Driving Capital Allocation Policy
|
 20
Total Shareholder Distributions
Share Repurchase
~$233 million
Special Dividend
~$650 million
Anticipated Annual Dividend in 2015
~$ 75 million
Total
~$958 million
Total scheduled shareholder distributions through 2015, excluding additional share
repurchases which occur post March 6, 2015, if any.
Nearly $1 billion of shareholder distributions |
 21
2015 Guidance
Consolidated
2015 Guidance Range
Implied Y-o-Y Change
Revenues
$2.00 billion to $2.03
billion
~ +2.5% to +4%
Adjusted EBITDA
$480 million to $495
million
~ (18.5)% to (21)% |
 22
2015 Guidance
Television and Entertainment Segment
Guidance Range
Implied Y-o-Y
Change
Revenues
$1.75 billion to $1.77 billion
~ +2% to +3%
Core Advertising
Low to mid-single digit increases over 2014
Retransmission Revenues
$275 million to $277 million
~ +20%
Cable Network Carriage Fees
$85 million to $87 million
~ +50%
WGN America / Tribune Studios
Programming Expenses
Approximately $130 million
~ +40%
Adjusted EBITDA
$500 million to $515 million
~ (16)% to (18.5)% |
 23
2015 Guidance
Digital and Data Segment
2015 Guidance Range
Implied Y-o-Y Change
Revenues
$200 million to $205 million
~ +15% to +18%
Adjusted EBITDA
$46 million to $48 million
~ +19% to +24.5% |
 24
2015 Guidance
Corporate and Other
Guidance Range
Implied Y-o-Y Change
Real Estate Revenues
Approximately $50 million
~ (9)%
Real Estate Expenses
Approximately $(30) million
~ 22%
Corporate Expenses
(excluding
stock-based compensation)
$(86) million to $(88) million
~ 13.5% to 16%
Adjusted EBITDA
$(66) million to $(68) million
~ 45% to 49% |
 25
2015 Guidance
Cash Flow
Guidance Range
Total Capital Expenditures
Approximately $100 million
(1)
Cash Taxes
$135 million -
$140 million
(2)
Cash Interest
Approximately $140 million
Depreciation & Amortization
Approximately $260 million
Stock-based Compensation
Approximately $35 million
(1)
The $100 million of expected capital expenditures includes approximately $50 million of
non-recurring capital expenditures.
(2)
Cash taxes guidance excludes approximately $252 million of taxes payable for the sale of the
Company’s interest in Classified Ventures, which was recorded as a liability on the
Company’s balance sheet as of December 28, 2014 and is expected to be paid in March 2015. |
 26
Long-Term Outlook
o
2016 Consolidated Adjusted EBITDA year-over-year growth of greater than
30%
The Company currently expects:
o
WGN America and Tribune Studios revenue growth to be greater than 20%
annually.
o
WGN America and Tribune Studios programming expenses approximating
50% of net revenues.
o
Digital and Data net revenue growth of 10% to 12% annually.
o
Digital and Data Adjusted EBITDA margins growing to low 30% range.
For the period 2016-2019: |
 Non-GAAP Reconciliations
Quarterly 2013-2014 by Segment |
 28
Consolidated
(USD thousands)
2014
2013
2014
2013
2014
2013
2014
2013
2014
2013
Revenue
446,102
$
274,156
$
474,979
$
292,915
$
474,858
$
280,608
$
553,420
$
299,561
$
1,949,359
$
1,147,240
$
Net Income
41,067
$
58,359
$
82,923
$
66,311
$
37,997
$
49,771
$
314,676
$
67,114
$
476,663
$
241,555
$
Income (loss) from discontinued operations, net of taxes
12,600
15,309
15,841
18,923
(14,889)
10,527
—
33,854
13,552
78,613
Income from Continuing Operations
28,467
43,050
67,082
47,388
52,886
39,244
314,676
33,260
463,111
162,942
Income tax expense
17,649
11,682
42,305
31,509
2,647
27,325
216,098
25,449
278,699
95,965
Reorganization items, net
2,216
7,331
2,165
4,502
1,594
1,708
1,293
3,390
7,268
16,931
Other non-operating (gain) loss, net
(157)
140
1,295
(386)
(68)
67
3,640
1,671
4,710
1,492
Write-down of investment
—
—
—
—
—
—
94
—
94
—
Gain on investment transactions, net
—
(29)
(700)
(17)
(2)
(104)
(371,783)
—
(372,485)
(150)
Loss on extinguishment of debt
—
—
—
—
—
—
—
28,380
—
28,380
Interest expense
40,519
9,396
39,146
9,575
39,150
9,558
39,051
10,605
157,866
39,134
Interest income
(171)
(93)
(147)
(102)
(363)
(100)
(687)
(118)
(1,368)
(413)
Income on equity investments, net
(38,263)
(16,441)
(118,953)
(37,695)
(40,559)
(31,899)
(38,938)
(59,206)
(236,713)
(145,241)
Operating Profit
50,260
55,036
32,193
54,774
55,285
45,799
163,444
43,431
301,182
199,040
Depreciation
16,711
9,018
17,540
10,131
17,991
10,558
17,945
11,480
70,187
41,187
Amortization
60,674
28,300
61,018
28,301
47,953
28,395
48,642
29,721
218,287
114,717
Stock-based compensation
8,449
—
6,121
1,366
5,833
1,870
5,788
2,181
26,191
5,417
Severance and related charges
2,439
134
712
541
1,974
727
1,484
1,154
6,609
2,556
Transaction-related costs
5,699
500
2,234
3,273
5,181
1,504
2,570
14,497
15,684
19,774
Gain on sales of real estate
—
(135)
—
—
(303)
—
(21,388)
—
(21,691)
(135)
Contract termination cost
—
—
15,646
—
—
—
(646)
—
15,000
—
Other
1,558
155
2,398
(606)
2,194
77
827
1,517
6,977
1,143
Pension (credit) expense
(7,804)
(8,266)
(7,518)
(9,125)
(7,660)
(8,694)
(7,661)
(8,695)
(30,643)
(34,780)
Adjusted EBITDA
137,986
$
84,742
$
130,344
$
88,655
$
128,448
$
80,236
$
211,005
$
95,286
$
607,783
$
348,919
$
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Full Year |
 29
Television and Entertainment Segment
As Reported
(USD thousands)
2014
2013
2014
2013
2014
2013
2014
2013
2014
2013
Advertising
304,343
$
191,377
$
329,132
$
212,243
$
321,118
$
198,291
$
381,371
$
207,821
$
1,335,964
$
809,732
$
Retransmission consent fees
55,565
9,948
57,122
11,367
58,109
13,530
58,447
14,741
229,243
49,586
Carriage fees
14,128
13,733
14,591
13,719
14,023
13,408
14,395
12,935
57,137
53,795
Barter/trade
10,311
7,414
10,472
7,641
11,227
7,586
9,257
8,651
41,267
31,292
Copyright royalties
6,532
9,708
7,454
6,296
6,071
6,261
7,104
10,689
27,161
32,954
Other
7,535
6,979
7,025
9,233
6,621
9,120
8,583
11,733
29,764
37,065
Total Revenues
398,414
$
239,159
$
425,796
$
260,499
$
417,169
$
248,196
$
479,157
$
266,570
$
1,720,536
$
1,014,424
$
Operating Profit
64,153
$
46,979
$
52,248
$
50,596
$
74,129
$
42,387
$
146,391
$
55,978
$
336,921
$
195,940
$
Depreciation
12,376
6,463
13,136
7,465
12,693
7,797
12,057
8,222
50,262
29,947
Amortization
56,655
26,008
56,172
26,010
42,010
26,103
42,217
27,405
197,054
105,526
Stock-based compensation
2,523
—
2,113
464
2,101
719
2,063
661
8,800
1,844
Severance and related charges
1,414
109
108
504
347
726
229
302
2,098
1,641
Transaction-related costs
417
—
974
—
890
48
(387)
181
1,894
229
Gain on sales of real estate
—
—
—
—
—
—
(103)
—
(103)
—
Contract termination cost
—
—
15,646
—
—
—
(646)
—
15,000
—
Other
1,556
155
12
1
358
77
829
795
2,755
1,028
Pension (credit) expense
43
(69)
61
26
20
(21)
—
(22)
124
(86)
Adjusted EBITDA
139,137
$
79,645
$
140,470
$
85,066
$
132,548
$
77,836
$
202,650
$
93,522
$
614,805
$
336,069
$
Broadcast rights - Amortization
55,694
44,219
74,386
53,815
73,093
52,749
65,624
41,843
268,797
192,626 Broadcast rights - Cash Payments
(60,818)
(47,629)
(86,409)
(62,679)
(97,978)
(58,200)
(76,130)
(55,141)
(321,335) (223,650)
Broadcast Cash Flow
134,013
$
76,235
$
128,447
$
76,202
$
107,663
$
72,385
$
192,144
$
80,224
$
562,267
$
305,046
$
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Full Year |
 30
Television and Entertainment Segment
Pro Forma
(1)
(1) Amounts
are
pro
forma
for
the
acquisition
of
Local
TV,
which
was
completed
on
December
27,
2013,
as
if
the
acquisition
had
occurred
as
of the beginning of fiscal 2013. Pro forma operating expenses, depreciation and
amortization for Local TV are based on Local TV's historical basis of
presentation and do not reflect the impact of purchase accounting. (USD
thousands) 2014
2013 PF (1)
2014
2013 PF (1)
2014
2013 PF (1)
2014
2013 PF (1)
2014
2013 PF (1)
Advertising
304,343
$
300,649
$
329,132
$
336,589
$
321,118
$
319,249
$
381,371
$
336,912
$
1,335,964
$
1,293,399
$
Retransmission consent fees
55,565
29,567
57,122
32,029
58,109
34,167
58,447
34,774
229,243
130,537
Carriage fees
14,128
13,733
14,591
13,719
14,023
13,408
14,395
12,936
57,137
53,796
Barter/trade
10,311
10,341
10,472
10,634
11,227
10,540
9,257
11,253
41,267
42,768
Copyright royalties
6,532
9,708
7,454
6,296
6,071
6,261
7,104
10,689
27,161
32,954
Other
7,535
5,306
7,025
6,710
6,621
6,407
8,583
9,328
29,764
27,751
Total Revenues
398,414
$
369,304
$
425,796
$
405,977
$
417,169
$
390,032
$
479,157
$
415,892
$
1,720,536
$
1,581,205
$
Operating Profit
64,153
$
89,273
$
52,248
$
106,387
$
74,129
$
94,432
$
146,391
$
108,845
$
336,921
$
398,937
$
Depreciation
12,376
12,264
13,136
13,408
12,693
13,599
12,057
14,444
50,262
53,715
Amortization
56,655
28,169
56,172
28,172
42,010
28,264
42,217
29,451
197,054
114,056
Stock-based compensation
2,523
200
2,113
663
2,101
923
2,063
792
8,800
2,578
Severance and related charges
1,414
109
108
504
347
726
229
302
2,098
1,641
Transaction-related costs
417
—
974
—
890
48
(387)
181
1,894
229
Gain on sales of real estate
—
—
—
—
—
—
(103)
—
(103)
—
Contract termination cost
—
—
15,646
—
—
—
(646)
—
15,000
—
Other
1,556
155
12
1
358
77
829
1,275
2,755
1,508
Pension (credit) expense
43
(69)
61
26
20
(21)
—
(22)
124
(86)
Adjusted EBITDA
139,137
$
130,101
$
140,470
$
149,161
$
132,548
$
138,048
$
202,650
$
155,268
$
614,805
$
572,578
$
Broadcast rights - Amortization
55,694
56,066
74,386
65,607
73,093
64,896
65,624
53,266
268,797
239,835
Broadcast rights - Cash Payments
(60,818)
(63,755)
(86,409)
(75,383)
(97,978)
(71,665)
(76,130)
(68,470)
(321,335)
(279,273)
Broadcast Cash Flow
134,013
$
122,412
$
128,447
$
139,385
$
107,663
$
131,279
$
192,144
$
140,064
$
562,267
$
533,140
$
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Full Year |
 31
Digital and Data Segment
(1)
(1) The 2013 Digital and Data segment results shown above exclude the impact of the following
acquisitions, which occurred in 2014. -
Gracenote; Acquired January 2014
-
What’s-ON; Acquired July 2014
-
Baseline; Acquired August 2014
-
HWW; Acquired October 2014
(USD thousands)
2014
2013
2014
2013
2014
2013
2014
2013
2014
2013
Video
20,772
$
16,695
$
21,486
$
17,044
$
23,192
$
17,211
$
25,849
$
17,758
$
91,299
$
68,708
$
Music
10,713
—
12,222
—
20,408
—
34,386
—
77,729
—
Entertainment websites
and other
1,787
5,049
1,264
2,221
959
1,692
993
1,547
5,003
10,509
Total Revenues
33,272
$
21,744
$
34,972
$
19,265
$
44,559
$
18,903
$
61,228
$
19,305
$
174,031
$
79,217
$
Operating Profit (Loss)
(1,542)
$
4,218
$
(8,744)
$
3,755
$
(231)
$
4,339
$
13,926
$
4,185
$
3,409
$
16,497
$
Depreciation
1,813
573
1,909
623
2,035
665
1,987
715
7,744
2,576
Amortization
4,019
2,292
4,846
2,291
5,943
2,292
6,425
2,316
21,233
9,191
Stock-based compensation
649
—
688
4
42
7
262
6
1,641
17
Severance and related charges
632
25
504
37
1,627
1
1,212
216
3,975
279
Other
—
—
—
234
580
—
—
—
580
234
Adjusted EBITDA
5,571
$
7,108
$
(797)
$
6,944
$
9,996
$
7,304
$
23,812
$
7,438
$
38,582
$
28,794
$
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Full Year |
 32
Corporate and Other
(USD thousands)
2014
2013
2014
2013
2014
2013
2014
2013
2014
2013
Total Revenues
14,416
$
13,253
$
14,211
$
13,151
$
13,130
$
13,509
$
13,035
$
13,686
$
54,792
$
53,599
$
Operating Profit (Loss)
(12,351)
$
3,839
$
(11,311)
$
423
$
(18,613)
$
(927)
$
3,127
$
(16,732)
$
(39,148)
$
(13,397)
$
Depreciation
2,522
1,982
2,495
2,043
3,263
2,096
3,901
2,543
12,181
8,664
Stock-based compensation
5,277
—
3,320
898
3,690
1,144
3,463
1,514
15,750
3,556
Severance and related charges
393
—
100
—
—
—
43
636
536
636
Transaction-related costs
5,282
500
1,260
3,273
4,291
1,456
2,957
14,316
13,790
19,545
Gain on sales of real estate
—
(135)
—
—
(303)
—
(21,285)
—
(21,588)
(135)
Other
2
—
2,386
(841)
1,256
—
(2)
722
3,642
(119)
Pension (credit) expense
(7,847)
(8,197)
(7,579)
(9,151)
(7,680)
(8,673)
(7,661)
(8,673)
(30,767)
(34,694)
Adjusted EBITDA
(6,722)
$
(2,011)
$
(9,329)
$
(3,355)
$
(14,096)
$
(4,904)
$
(15,457)
$
(5,674)
$
(45,604)
$
(15,944)
$
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Full Year |
 M
A
R
C
H
2
0
1
5
Q4 & Full Year 2014 Performance Summary |