28 Mar Tribune Company Reports Fourth Quarter and Full Year 2013 Results
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.
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.
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
- 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 MEDIA COMPANY is home to a diverse portfolio of television and digital properties driven by quality news, entertainment and sports programming. TRIBUNE MEDIA is comprised of Tribune Broadcasting’s 42 owned or operated local television stations reaching 50 million households, national entertainment network WGN America, available in 72 million households, Tribune Studios, and Tribune Digital Ventures, including the websites Zap2it and TVByTheNumbers, and Gracenote, one of the world’s leading sources of TV and music metadata powering electronic program guides in televisions, automobiles and mobile devices. TRIBUNE MEDIA also includes Chicago’s WGN-AM, the national multicast networks Antenna TV and THIS TV. Additionally, the company owns and manages a significant number of real estate properties across the U.S. and holds other strategic investments in media.
|Media Contact:||Investor Contact:|
|Gary Weitman||Donna Granato|
|SVP/Corporate Relations||VP/Corporate Finance & Investor Relations|
|312/222-3394 (office)||212/210-2703 (office)|
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.