t tribune PUBLISHING
INVESTOR PRESENTATION
July 2014
Disclaimer
Cautionary Statement Regarding Forward-Looking Statements and Projections
The statements contained in this presentation include certain forward-looking statements that are based largely on our current expectations and reflect various estimates and assumptions by us. 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. Such risks, trends and uncertainties, which in some instances are beyond our control, are described under the heading “Risk Factors” in the most recent Tribune Publishing Company’s Form 10 amendment filed with the Securities and Exchange Commission, and include:
competition and other economic conditions including fragmentation of the media landscape and competition from other media alternatives;
changes in advertising demand, circulation levels and audience shares;
our ability to develop and grow our online businesses;
our reliance on revenue from printing and distributing third-party publications;
changes in newsprint prices;
macroeconomic trends and conditions;
our reliance on third party vendors for various services;
our ability to adapt to technological changes;
adverse results from litigation, governmental investigations or tax-related proceedings or audits;
our ability to realize benefits or synergies from acquisitions or divestitures or to operate our businesses effectively following acquisitions or divestitures;
our ability to attract and retain employees;
our ability to satisfy pension and other postretirement employee benefit obligations;
changes in accounting standards;
the effect of labor strikes, lock-outs and labor negotiations;
regulatory and judicial rulings;
our indebtedness and ability to comply with covenants applicable to our anticipated debt financing;
our adoption of fresh-start reporting which has caused our combined financial statements for periods subsequent to December 31, 2012 to not be comparable to prior periods;
our ability to satisfy future capital and liquidity requirements; and
our ability to access the credit and capital markets at the times and in the amounts needed and on acceptable terms.
The words “believe,” “expect,” “anticipate,” “estimate,” “could,” “should,” “intend,” “may,” “plan,” “seek” 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 our control. Readers are cautioned not to place undue reliance on such forward-looking statements, which are being made as of the date of this information statement. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
1 t tribune PUBLISHING
Disclaimer (cont’d)
Basis of Presentation and Statements Relating to Non-U.S. GAAP Financial Measures
As a result of the consummation of the Plan of Reorganization (the “Plan”) filed by Tribune Company, the parent company of Tribune Publishing Company (“Tribune Publishing” or the “Company”), and the transactions contemplated thereby, the Company, since December 31, 2012 (the “Effective Date”), has been operating its businesses under a new capital structure and has been subject to “fresh-start reporting” in accordance with Financial Accounting Standards Board Accounting Standards Codification (“ASC”) Topic 852, “Reorganizations.” The financial information contained in the presentation for periods ended on or prior to December 30, 2012 does not reflect the impact of “fresh-start reporting.” The financial condition and results of operations for periods ended on or prior to December 30, 2012 have not been adjusted to reflect any changes in the Company’s capital structure as a result of the Plan nor have they been adjusted to reflect any changes in the fair value of assets and liabilities as a result of the adoption of fresh-start reporting.
Note on Presentation of Financial Data
The Company’s fiscal year ends every year on the last Sunday in December. Every five or six years, the Company’s fiscal year has 53 weeks rather than 52 weeks. The Company’s 2012 fiscal year was a 53 week year, with the extra week occurring in the fourth quarter.
Adjusted EBITDA
Adjusted EBITDA is defined as net income before income taxes, interest income, interest expense, depreciation and amortization, equity income and losses, pension expense, stock-based compensation, certain unusual and non-recurring items (including severance and transaction-related costs), write-down of investments, non-operating items and reorganization items. Our management uses Adjusted EBITDA (a) as a measure of operating performance; (b) for planning and forecasting in future periods; and (c) in communications with our Board of Directors concerning our financial performance. Adjusted EBITDA is a financial measure that is not calculated in accordance with accounting principles generally accepted in the United States of America (GAAP). This non-GAAP measure is presented because it is used by management to evaluate our operating performance. We believe the presentation of Adjusted EBITDA enhances investors’ overall understanding of the financial performance of our business as a stand-alone company. In addition, Adjusted EBITDA, or a similarly calculated measure, is expected to be used as the basis for certain financial maintenance covenants that we will be subject to in connection with our entry into the Senior Credit Facilities. We believe Adjusted EBITDA is helpful in highlighting operating trends because it excludes the results of decisions that are outside the control of management and that can differ significantly from company to company depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which companies operate, age and book depreciation of facilities and capital investments. Since not all companies use identical calculations, our presentation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies and should not be used by investors as a substitute or alternative to net income or any measure of financial performance calculated and presented in accordance with GAAP. Instead, we believe Adjusted EBITDA should be used to supplement our financial measures derived in accordance with GAAP to provide a more complete understanding of the trends affecting the business.
We note that Adjusted EBITDA does not reflect the potential impact resulting from the distribution and Tribune Publishing operating as a stand-alone public company, including any modification to the affiliation agreement between CareerBuilder and Tribune Publishing as a result of the distribution, the impact of affiliation agreements between Classified Ventures and our newspapers that may not be renewed or may be renewed on different terms or rental expense to be incurred by Tribune Publishing related to lease agreements with Tribune for certain facilities and office space. See “Unaudited Pro Forma Combined Financial Statements” in the Form 10 and the notes thereto.
Although Adjusted EBITDA is frequently used by investors and securities analysts in their evaluations of companies, Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for, or more meaningful than, amounts determined in accordance with GAAP. Some of the limitations to using non-GAAP measures as an analytical tool are:
they do not reflect our interest income and expense, or the requirements necessary to service interest or principal payments on our debt;
they do not reflect future requirements for capital expenditures or contractual commitments;
although depreciation and amortization charges are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and non-GAAP
measures do not reflect any cash requirements for such replacements
During the course of this presentation, certain other non-U.S. GAAP financial information will be presented. See pages 30, 31 and 32 for a reconciliation of these non-U.S. GAAP measures to the most similar GAAP measures.
Partial Economics – Partial Economics as used herein is defined as “assumes reasonable case with 50% economics from affiliation agreement.”
No Economics – No Economics as used herein is defined as “assumes no economic benefit from affiliation agreements.”
2 t tribune PUBLISHING
Introduction
3 t tribune PUBLISHING
Senior Management Team
John (Jack) H. Griffin Jr., Chief Executive Officer
John B. Bode, Chief Financial Officer
Bill Adee, Executive Vice President of Digital
Sandy J. Martin, VP / Corporate Finance & Investor Relations
4 t tribune PUBLISHING
Anticipated Spin-off Timeline
We expect TPUB to trade on NYSE as separate public company on August 5th
TPUB begins trading as separate public company
SEC declared Form 10 effective TPUB begins trading on “when–issued” basis, expected July 24
July 21 July 24 July 28 August 4 August 5
TPUB Record Date
Distribution Date
5 t tribune PUBLISHING
Spin-Off Overview and Rationale
Overview
In July 2013, Tribune Company announced its plans to separate Tribune Publishing from Tribune Media in a tax-free spin-off, which is scheduled to be completed on August 4th
The distribution ratio will be 1 Tribune Publishing share per 4 Tribune Company shares or approximately 25mm diluted shares outstanding
The Company will be listed on the New York Stock Exchange under the ticker ‘TPUB’
In connection with the spin-off, Tribune Publishing expects to raise a $350mm Senior Term Loan Facility and have access to an undrawn $140mm Senior ABL Facility (subject to closing conditions)
Proceeds from the term loan will be used to pay a special dividend to Tribune Company of up to $275mm, pay related transaction fees and expenses, and for general corporate purposes
Tribune Publishing expects to initiate a regular quarterly cash dividend in the fourth quarter of 2014 at an annual rate of $0.70 per share
Rationale
Optimize capital structure and leverage level
Enhance the core business with greater financial, operational and strategic focus
Relief from certain regulations that restrict Tribune Publishing from entering into certain markets as a result of current cross-ownership restrictions
Directly align management incentives with Tribune Publishing shareholders
6 t tribune PUBLISHING
Company Highlights and Strategy
7 t tribune PUBLISHING
Collection of Premier “Blue-Chip” Media Assets
Major Titles
LA Times L
Chicago Tribune
SunSentinel
Orlando Sentinel
THE BALTIMORE SUN
THE CAPITAL
Carroll County Times
Daily Press
Hartford Courant
THE MORNING CALL
Other Key Assets:
Digital Content
Latimes.com Hoy
m metromix chicagotribune.com
CLTV CHICAGOLAND TELEVISION vivelohoy.com CHICAGO NOW
SunSentinel.com
OrlandoSentinel.com
baltimoresun.com
CAPITALGAZETTE.COM
ddailypress.com
courant.com ReminderMedia
CTNOW CTNOW.COM
mcall.com
THE MORNING CALL online
HomeFinder.com
(33%) MCT McCLATCHY-TRIBUNE
ForSaleByOwner
A TRIBUNE COMPANY
Select Publications
Hoy Los Angeles Times THE ENVELOPE
i red eye TRIB local Hoy (m)
CHICAGO
SENTINEL Jewish Journal SunSentinel SpecialDelivery
Orlando SENTINEL
Soundoff!
APG NEWS ONLINE
b Baltimore MESSENGER
CITYPAPER Chesapeake home+living
THE VIRGINIA GAZETTE
NewHaven living
Hartford Courant MANCHESTER EXTRA
CIPS
marketing group, inc.
(50%)
TRIBUNE365 NATIONAL SOLUTIONS GROUP
TRIBUNE DIRECT
2013 Bank
Adjusted
Revenue1
$1,703mm
2013 Bank Adj.
EBITDA1
$155mm
Employees2
7,475
1 Adjusted EBITDA as defined on page 2, see reconciliation on page 30; Bank Adjusted Revenue and Bank Adjusted EBITDA are based on further pro forma and other adjustments as detailed on pages 31 and 32
2 Full-time and part-time employees as of 3/30/14
8 t tribune PUBLISHING
Key Investment Highlights
Leader in Multimedia Local News & Information
Trusted, Award-Winning Premium Content
Compelling Suite of Advertising Solutions
Diverse Portfolio of Iconic Brands and Products
Deep Multi-Platform Audience Engagement
Strong Free Cash Flow & Conservative Capital Structure
Deep & Experienced Management Team
9 t tribune PUBLISHING
Leading Iconic Brands with Deep, Local Market Reach
Market Los Angeles, CA Chicago, IL South Florida Orlando, FL Baltimore, MD Annapolis, MD Carroll County, MD Hartford, CT Newport News, VA Allentown, PA 5
DMA Rank 2 3 16 18 27 27 27 30 45 54
Iconic Brands Daily LA Times L latimes.com Chicago Tribune chicagotribune.com SunSentinel SunSentinel.com Orlando Sentinel OrlandoSentinel.com THE SUN baltimoresun.com The Capital CAPITALGAZETTE.COM Carroll County Times Hartford Courant courant.com Daily Press ddailypress.com THE MORNING CALL mcall.com THE MORNING CALL online
Circulation (000s)1 673 440 163 151 174 29 21 120 52 80
Sunday 956 790 218 258 296 34 25 181 85 128
Print Local Market Leadership2 #1 #1 #1 #1 #1 #2 #3 #1 #2 #35
Digital (mm)3 Unique Visitors 25 12 3 4 4 0.5 0.3 2 1 1
Page Views 118 107 22 23 22 3 1 17 4 9
Digital Local Market Leadership4 #1 #1 #1 #1 #1 NA NA #1 #1 #55
Ranked #1 amongst local print and digital competition in the majority of our markets
Note: Circulation and digital traffic statistics may include minimal duplication among the media properties; DMA source Nielsen estimates as of September 2013
1 Alliance for Audited Media; Includes print and digital circulation; Total circulation is average for six months ended March 31, 2014; DMA net combined audience except for Sun Sentinel which is NDM net combined audience
2 Kantar Media/TNS; Ranking based on total media market advertising spend within the respective DMA for April 2013 – March 2014
3 ComScore data – 13 month average from March 2013 to March 2014 for Total Digital Platform
4 Based on total digital market audience reach % yearly average as compared to digital presence of local peers within same DMA
5 The Morning Call focuses on the Lehigh Valley region within the Philadelphia DMA (#4); Ranks 3rd and 5th for print and digital local market leadership in the Philadelphia DMA respectively
10 t tribune PUBLISHING
Trusted, Award-Winning Premium Content
Our content makes us the local print and digital leader in the communities we serve
Our readers care about their communities and trust our content
Our publishing brands stand for integrity and authority in their markets
Average publishing history of over 150 years
A tradition of journalistic excellence: 88 total Pulitzer Prizes, 27 since 2000
Tribune Publishing provides full coverage on the latest news and information trends
2011 Pulitzer Prize – Public Service
“Is a city manager worth $800,000?” by Los Angeles Times’ Jeff Gottlieb and Ruben Vives
2013 Pulitzer Prize – Public Service
“Ruined lives” by Sun Sentinel’s Sally Kestin and John Maines
11 t tribune PUBLISHING
Leading Multimedia News, Information and Marketing Company
Portfolio Overview
10 Leading Daily Titles
#2 in the U.S. based on Sunday print circulation (~2.5mm)1
Over 60 Digital Media Properties
Roughly 40mm monthly average unique visitors2 for Tribune Publishing
Over 150 Niche Publications
Hoy is the largest Spanish language newspaper in the U.S.
Broad Product Offerings
Traditional Print
Advertising (~$860mm3)
Print
Classifieds
Preprints
Circulation (~$430mm3)
Commercial print and
delivery (~$190mm3)
Direct marketing / direct
mail (~$75mm3)
Digital & New Businesses
Digital advertising
(~$190mm3)
Digital marketing services
Digital subscriptions Content syndication News services IP licensing
Ranked #1 in print and digital in 6 of the top 30 U.S. markets, including 2 of the top 3
1 March 2014 Alliance for Audited Media daily snapshot analyzer
2 ComScore – 13 month average from March 2013 to March 2014 for Total Digital Platform
3 For the year ended 12/29/13; Financials are shown as reported in the Form 10 and not adjusted for CareerBuilder, Classified Ventures, or potential real estate adjustments
12 t tribune PUBLISHING
Tribune Publishing Has Sustained Financial Stability
Strong Cash Flows and Modest Capital Expenditure Requirements
($mm)
Adjusted EBITDA1
Adjusted EBITDA less Capex 1,2
Bank Adjusted EBITDA1
Bank Adjusted EBITDA less Capex1,2
$231 $235 $230 $207 $195 $196 $158 $141 $155
$155 $153 $135 $115 $118 $83 $68 2011 20123
2013 LTM 3/30/14
Capex2 as a % of
Revenue
3.5%
3.8%
2.2%
2.0%
Bank Adj. Revenue
3.6%
4.0%
2.3%
2.1%
1 Adjusted EBITDA as defined on page 2 (see reconciliation on page 30); Bank Adjusted EBITDA is based on further pro forma and other adjustments as shown on pages 31 and 32
2 Capex includes an upward adjustment of $20mm in each year to provide representation of anticipated incremental costs as a result of the distribution, excluding one-time items
3 Adjusted for 52-week year
13 t tribune PUBLISHING
Our 7 Strategic Principles
1 Build on Our Leading Local Market Presence
2 Strategically Manage Our Core Business
3 Accelerate Innovation and the Digital Transition
4 Monetize Our Content on Digital Platforms
5 Continue Successful Revenue Diversification
6 Leverage Operating Platform for Opportunistic Consolidation
7 Maintain Disciplined Cost Management and Financial Policies
14 t tribune PUBLISHING
1 Example: Our Leading Local Market Presence in South Florida
Commercial printing and delivery for third parties drive revenue diversification and higher use of fixed assets
USA TODAY
The New York Times
SunSentinel
SunSentinel
Heat reign
SunSentinel
Special delivery
SENTINEL
The niche publications include South Florida’s largest Hispanic weekly newspaper by circulation and one of the largest Jewish newspapers in the country by circulation
Special Delivery is a select market coverage product. This colorful wrap includes four sides of advertising
Major Daily
Commercial Print & Delivery
Niche Pubs & Forum Publishing
SunSentinel
Digital, Mobile & Apps
Tribune Direct
Agreements for commercially printing and delivering other titles for the South Florida DMA
THE WALL STREET JOURNAL BARRON’S
Customized targeted solutions
Meaningful demographic reach
Direct to consumer mailbox solutions
DIGITAL MARKETING SERVICES
Your source to better online presence
Customer website for SMB
Search optimization
Reputation management
15 t tribune PUBLISHING
2 Strategically Manage Our Core Business
We are highly focused on driving our core publishing revenue streams
Advertising
Advertising sales forces are structured and incentivized to cross-sell print and digital Advertising categories are highly diversified
Tribune Publishing is a leader in pre-print advertising
Deploying research, data and analytics for greater targeting
Dedicated units, e.g. as Tribune 365 & 435 Digital, to develop branded and native advertising
Hyper-local is an advertising focus and strength
Circulation
Targeted pricing strategies have produced growth in circulation revenue and yield
Strategic bundling of print and digital offerings is winning new loyal customers
Company goal is to incentivize print customers to activate digital accounts
Consumer marketing programs are focused on retaining high value audience segments
Aggressive “win-back” programs are in place to re-connect with lost print audience
16 t tribune PUBLISHING
3 Accelerate Innovation and the Digital Transition
NGUX scheduled to roll out across remaining Tribune Publishing properties in 2014
Tribune Publishing Has Been a Digital Pioneer…
Tribune has been instrumental in the growth and success of Cars.com and CareerBuilder
Tribune Publishing is developing new video capabilities for advertising and editorial products
…And Will Continue to Innovate
New digital vertical and affinity products are under development to fuel further digital growth
Data tools are expected to power growth in local digital advertising and geolocation programs
Investments in staff and capabilities will drive growth in digital marketing services for clients (SEO, SEM, Web development, etc.)
New native apps for Tribune Publishing properties will also launch in 2014
Aggressively rolling out the All Access consumer model and Digital Only subscription programs
Next Generation User Experience (“NGUX”) launched at latimes.com to rave reviews
“The Los Angeles Times is introducing a redesign tonight that moves the 132-year-old newspaper closer to the vanguard of mobile-first web design” – GIZMODO
“The best surprise, in my view: that in 2014 a newspaper the size of the Los Angeles Times can stop and rethink its website to offer us a textbook example of how it can be done.” – AD AGE
“…the site also provides a kind of choose-your-own-adventure twist, letting readers switch between sections in the scroll without disrupting the flow.” – NIEMAN
Initial NGUX Results
35% increase in page views per visit1
1 Omniture statistics for latimes.com as of 6/9/14
17 t tribune PUBLISHING
4 Monetize Our Content on Digital Platforms
Reaching Large Audiences and Building Engagement Across Digital Platforms
Leading Local News & Information Provider
Real-time delivery of:
News Sports
Travel Entertainment
Culture Politics
New Consumer Digital Revenues
Digital Only subscribers
Digital Only pricing
Subscription mobile apps
Up-sells on print customers
Enhanced e-newspaper versions
New content verticals
Enhanced consumer marketing
~500,000 digital subscribers2
t tribune PUBLISHING
Multi-platform Connectivity
Subscription bundling
E-commerce
Mobile accessibility
Advertising Audience Monetization
~40mm monthly avg. unique visitors1
~$190mm of digital ad revenue3
1 ComScore – 13 month average from March 2013 to March 2014 for Total Digital Platform, excluding duplicates
2 Total digital subscribers is defined as: activated digital subscribers, paid digital subscribers, and paid application users
3 As of the year ended 12/29/13; As reported in Form 10 and not adjusted for CareerBuilder and Classified Ventures
18 t tribune PUBLISHING
5 Continue Successful Revenue Diversification
Total Company Revenue Sources1
$1,916mm
Other 2
15%
Circulation 20%
Classified 16%
National 15%
Retail
34%
Total Advertising3 65%
$1,795mm
17%
24%
16%
12%
31%
Total Advertising3 59%
2011 2013
1 Financials shown do not include CareerBuilder, Classified Ventures, or real estate adjustments; Please see pages 31 and 32 for additional detail
2 Other revenues are derived from direct mail services, commercial printing and delivery services provided to other newspapers, direct mail advertising, and other publishing-related activities
3 Total advertising revenue is comprised of print and digital advertising
19 t tribune PUBLISHING
6 Leverage Operating Platform for Opportunistic Consolidation
Recent Acquisitions
The Capital Carroll County Times
Acquired Capital-Gazette Communications and Landmark Community Newspapers of Maryland from Landmark Media Enterprises, LLC for $30mm
CITY PAPER
Acquired the Baltimore City Paper, further extending audience reach within the Baltimore DMA
The City Paper and its trusted website are dedicated to giving the metropolitan area an alternative source of news and opinions on local politics, communities, culture, and the arts
ReminderMedia
Acquired Reminder Media, publisher of 15 free weekly
ReminderNews publications in eastern and northern Connecticut
Natural extension of existing media platform in Connecticut
MCT McCLATCHY TRIBUNE
Acquired McClatchy’s 50% ownership stake in McClatchy- Tribune Information Services (MCT)
Enables Tribune Content Agency to provide content to 1,200 media clients and digital information entities worldwide
Criteria for Additional Consolidation
Focus on local in-market adjacencies to leverage scale
Ad sales, editorial, print & delivery infrastructure, etc.
Ability to achieve accretive buyer multiples
Disciplined approach to new market expansion
Low leverage requirement
We Believe Opportunities Will Come to Us
20 t tribune PUBLISHING
7 Maintain Disciplined Cost Management and Financial Policies
Tribune Publishing has Aggressively Reduced Operating Costs1
($mm)
$1,871
($135)
($33)
$1,621
Compensation
$726
19% reduction3
Reduction in newsprint consumption
($42) Lower postage costs4
($40) Various
$590
Compensation
Newsprint and Ink
$188
Newsprint
and Ink
Circulation
Distribution
Other 2
$250mm (~13%) reduction in annual expenses
$155
Circulation Distribution
$346
$304
Other 2
$612
$572
2011 Operating Expenses
Compensation
Newsprint and Ink
Circulation Distribution
Other
LTM 3/30/14 Operating Expenses
1 Financials shown do not include adjustments for CareerBuilder, Classified Ventures, or potential real estate costs; Please see pages 31 and 32 for additional detail
2 Includes depreciation, amortization and corporate allocations
3 Full-time and part-time employees as of 3/30/14
4 Lower postage costs on total market coverage products due to additional volume of digital editions at most newspapers
Future Cost Reduction Opportunities
Further efficiencies in new organizational structure
Strategic sourcing/procurement: approximately $450mm annual addressable spend
Ongoing process re-engineering
21 t tribune PUBLISHING
Financial Profile
22 t tribune PUBLISHING
Q1 2014 Performance Update
On a standalone basis, Bank Adjusted EBITDA would have increased 4% excluding management fee
In Q1 2014, total operating revenue declined by $24mm or 5% due to:
$19mm decline in advertising revenues primarily from declines in Chicago and Los Angeles
Digital gains of 5% in the national and classified categories were able to partially offset declines
Circulation volume decreases mitigated by subscription price increases
Total cash operating expenses decreased $7mm or 2% due to lower compensation, newsprint and ink, and circulation distribution expenses
Compensation expenses decreased due to reduction in headcount
Newsprint and ink declines based on overall print volume declines
Cash expenses include $9mm of corporate management fees
Transaction related expenses were $6mm
Three Months Ended Change
($mm) Mar. 31, 2013 Actual Mar. 30, 2014 Actual ‘14 vs. ‘13 %
Revenue
Retail $129.5 $113.3 (12%)
National 53.8 51.0 (5%)
Classified 68.7 68.7 -
Total Advertising $252.0 $233.0 (8%)
Circulation 107.1 107.3 -
Other 81.4 76.2 (6%)
Total Revenue $440.5 $416.5 (5%)
Bank Adjusted Revenues1 $418.0 $392.5 (6%)
Expenses
Compensation $151.4 $143.7 (5%)
Newsprint and Ink 42.9 35.5 (17%)
Circulation Distribution 78.7 73.5 (7%)
Corporate Allocations 26.3 26.1 (1%)
Corporate Management Fee2 5.7 9.1 58%
Other3 97.7 107.8 10%
Total Operating Expenses $402.9 $395.8 (2%)
Non-Cash Expense Adjustment4 (4.5) (4.3) (4%)
Total Cash Operating Expenses $398.4 $391.5 (2%)
Intercompany Rent 0.0 8.4 N/M
Transaction-Related and Other
Non-Recurring Costs 5 2.3 6.7 191%
Adjusted EBITDA1 $44.5 $40.2 (10%)
Bank Adjusted EBITDA1 $25.0 $22.9 (9%)
Employees6 7,974 7,475 (6%)
1 Adjusted EBITDA as defined on page 2, see reconciliation on page 30; Bank Adjusted Revenue and Bank Adjusted EBITDA are based on further pro forma and other adjustments as detailed on pages 31 and 32
2 Management fee will not be an on-going expense as a separate public company; It will be replaced by public company costs in compensation and other expenses
3 Other expenses includes depreciation, amortization and other expenses; Please see page 30 for additional detail
4 Non-cash expense adjustment includes depreciation, amortization, allocated depreciation from Tribune Company, stock-based compensation and pension expense; Please see page 30 for additional detail
5 Transaction-related and other non-recurring costs include severance and related charges and other non-recurring costs; Please see page 30 for additional detail
6 Full-time and part-time employees as of period end 3/31/13 or 3/30/14, as applicable
23 t tribune PUBLISHING
Historical Financials
Revenue ($mm)
Revenue Bank Adjusted Revenue1
$1,916 $1,882 $1,795
$1,832 $1,793 $1,703 $441 $417
$418 $393
% growth 2011 20122 2013 Q1’13 Q1’14
Revenue (1.8%) (4.6%) (5.4%)
Bank Adj. Revenue (2.0%) (5.2%) (6.1%)
Capital Expenditures3 ($mm)
$66 $72
$40
$11 $6
% 2011 2012 2013 Q1’13 Q1’14
Revenue 3.5% 3.8% 2.2% 2.5% 1.5%
Bank Adj.
Revenue 3.6% 4.0% 2.3% 2.7% 1.6%
Adjusted EBITDA ($mm)
Adjusted EBITDA1 Bank Adjusted EBITDA1
$231 $235
$207
$135 $155 $155 $45 $40
$25 $23
2011 20122 2013 Q1’13 Q1’14
% margin
Adj. EBITDA 10.8% 12.3% 13.1% 10.1% 9.7%
Bank Adj. EBITDA 7.4% 8.7% 9.1% 6.0% 5.8%
Adjusted EBITDA – Capex ($mm)
Adjusted EBITDA1 – Capex3 Bank Adjusted EBITDA1 – Capex3
$195
$141 $158
$68 $83 $115 $33 $34
$14 $17
% conversion4 2011 20122 2013 Q1’13 Q1’14
Adj. EBITDA 68.0% 68.7% 83.1% 74.9% 84.8%
Bank Adj. EBITDA 51.0% 53.5% 74.3% 55.4% 73.3%
1 Adjusted EBITDA as defined on page 2, see reconciliation on page 30; Bank Adjusted Revenue and Bank Adjusted EBITDA are based on further pro forma and other adjustments as detailed on pages 31 and 32
2 Based on 52-week year
3 Capex includes an upward adjustment of $20mm in each year to provide representation of anticipated incremental costs following the separation, excluding one-time items
4 % conversion defined as respective EBITDA less Capex divided by respective EBITDA
24
t tribune PUBLISHING
Bridge from 2013 Adjusted EBITDA to Bank Adjusted EBITDA
($mm)
$235
($28)
($17)
$155
($34)
2013 Adjusted EBITDA1 Real Estate CareerBuilder (50%)2 Classified Ventures (100%) 2 2013 Bank Adjusted EBITDA 1
Real Estate includes annual operating lease payments for properties owned by Tribune Company
CareerBuilder adjustment represents Partial Economics2 from affiliation agreement
Classified Ventures adjustment assumes No Economics2 from affiliation agreements
1 Adjusted EBITDA as defined on page 2, see reconciliation on page 30; Bank Adjusted Revenue and Bank Adjusted EBITDA are based on further pro forma and other adjustments as detailed on pages 31 and 32
2 Partial Economics and No Economics as defined on page 2
25 t tribune PUBLISHING
Capital Structure and Capital Policy
Pro Forma Capitalization
Pro Forma as of 3/30/14
Pricing Maturity Amount ($mm) xBank Adjusted EBITDA2
Cash & Cash Equivalents1 $52
$140mm ABL Facility L+1504 5 years -
Term Loan B L+4755 7 years 350
Total Debt $350 2.3x
Net Debt $298 2.0x
LTM Bank Adjusted EBITDA2 $153
LTM Bank Adjusted EBITDA2 Less Capex3 $118
Disciplined Capital Policy
Allocating capital to create value
Investment in the business
Repayment of debt
Strategic acquisitions
Direct returns to shareholders
1 Excludes cash of $25mm that is intended to cash-back LCs and includes existing cash of ~$8.5mm on the balance sheet
2 Adjusted EBITDA as defined on page 2 (see reconciliation on page 30); Bank Adjusted EBITDA is based on further pro forma and other adjustments as shown on pages 31 and 32
3 Capex includes an upward adjustment of $20mm to provide representation of anticipated incremental costs as a result of the distribution, excluding one-time items
4 Undrawn pricing: 25 bps
5 1% Libor floor
26 t tribune PUBLISHING
Appendix
27 t tribune PUBLISHING
Board of Directors
Eddy W. Hartenstein – Non-Executive Chairman of the Board of Directors
Mr. Hartenstein has served as Publisher and CEO of the Los Angeles Times since August, 2008
Prior to Tribune Company’s January, 2013 change of ownership, he was also President and CEO of Tribune Company
He served as DirecTV’s Chairman and CEO from its inception in 1990 through 2004, when the company was sold to News Corp.
Currently, he serves on the boards of Broadcom Corporation, City of Hope, SanDisk and Sirius XM Radio, where he also serves as lead independent director
John (Jack) H. Griffin, Jr. – CEO
Prior to joining Tribune Publishing, Mr. Griffin served as co-founder and CEO of Empirical Media Advisors, LLC, a consulting firm advising national media properties from May, 2012
From September, 2010 until February, 2011, Mr. Griffin was CEO of Time Inc.
He served as the President of various publishing and digital operating groups at Meredith Corp. from 2003 to 2010
David Dibble
Mr. Dibble was EVP, Central Technology at Yahoo!, Inc. from November, 2008 to December, 2013
From 2005 to 2007, Mr. Dibble served as CTO and EVP at First Data Corporation
Prior to that, he had served in various senior technology roles at JPMorgan Chase & Co., Charles Schwab & Co. and Fidelity Investments. Mr. Dibble also currently serves as a director of Hubub, Inc
Philip Franklin
Mr. Franklin is currently the SVP and CFO of Littelfuse, Inc.
Prior to joining Littelfuse in 1998, he was VP and CFO of OmniQuip International
Previously, Mr. Franklin served as CFO for Monarch Marking Systems, a subsidiary of Pitney Bowes, and Hill Refrigeration. Mr. Franklin also currently serves as a director of TTM Technologies, Inc., where he is Chairman of the audit committee
Renetta McCann
Ms. McCann is currently Chief Talent Officer at the advertising agency Leo Burnett Company, where she has led the People & Culture department and overseen the agency’s U.S. recruitment, training, benefits and talent management since September, 2012
Prior to that, Ms. McCann was a contract consultant at BPI, a human capital consulting firm, from January, 2012 to September, 2012
Earlier in her career, Ms. McCann held various influential positions over two decades at Leo Burnett
Ellen Taus
Ms. Taus has been the CFO and Treasurer of The Rockefeller Foundation since 2008
Prior to that, Ms. Taus served as the CFO of Oxford University Press USA
From 1999 to 2003, Ms. Taus served as CFO for the Electronic Publishing Division of The New York Times Company after having been the company’s VP and Treasurer for three years
28
t tribune PUBLISHING
Historical Income Statement
($mm)
2011 2012 2013 Q1 2013 Q1 2014
Revenues
Retail $652.3 $615.2 $558.4 $129.5 $113.3
National 277.8 247.3 213.6 53.8 51.0
Classified 311.5 295.8 280.9 68.7 68.7
Total Advertising $1,241.6 $1,158.2 $1,052.9 $252.0 $233.0
Circulation 390.4 424.6 428.6 107.1 107.3
Other 283.9 330.9 313.6 81.4 76.2
Total Revenues $1,915.9 $1,913.8 $1,795.1 $440.5 $416.5
Expenses
Compensation $725.6 $725.3 $597.9 $151.4 $143.7
Newsprint and ink 188.1 190.6 162.2 42.9 35.5
Circulation distribution 345.7 326.4 309.3 78.7 73.5
Depreciation 80.6 80.3 21.9 5.3 2.7
Amortization 5.7 6.4 6.6 1.7 1.6
Corporate allocations 151.7 159.1 140.8 32.1 35.2
Other 373.9 384.2 390.0 90.8 103.5
Total Operating Expenses $1,871.4 $1,872.2 $1,628.6 $402.9 $395.8
Operating Profit $44.6 $41.7 $166.5 $37.7 $20.8
Loss on equity investments, net ($0.9) ($2.3) ($1.2) ($0.4) ($0.3)
Interest income (expense), net 0.1 (0.0) 0.0 0.0 0.0
Write-down of investment - (6.1) - - -
Other non-operating loss, net (0.0) - - - -
Reorganization items, net 0.4 (1.4) (0.3) 0.1 0.0
Income Before Income Taxes $44.2 $31.7 $165.1 $37.4 $20.4
Income tax expense (benefit) 2.5 3.3 71.0 16.2 8.7
Net Income $41.6 $28.4 $94.1 $21.2 $11.8
Adjusted EBITDA1 $206.9 $230.8 $234.7 $44.5 $40.2
1 Adjusted EBITDA as defined on page 2; see reconciliation on page 30
29 t tribune PUBLISHING
Reconciliation of Net Income to Adjusted EBITDA
($mm)
2011 2012 2013 Q1 2013 Q1 2014
Net Income $41.6 $28.4 $94.1 $21.2 $11.8
Income tax expense 2.5 3.3 71.0 16.2 8.7
Reorganization items, net (0.4) 1.4 0.3 (0.1) 0.0
Other non-operating loss 0.0 - - - -
Write-down of investment - 6.1 - - -
Interest expense (income), net (0.1) 0.0 (0.0) (0.0) 0.0
Loss on equity investments, net 0.9 2.3 1.2 0.4 0.3
Depreciation 80.6 80.3 21.9 5.3 2.7
Amortization 5.7 6.4 6.6 1.7 1.6
Allocated depreciation from Tribune Company1 20.0 21.2 17.1 3.4 4.8
Transaction-related costs2 - - 18.5 0.9 6.1
Severance and related charges 14.1 13.6 15.6 1.5 0.3
1-week adjustment3 - (7.4) - - -
Intercompany rent4 - - 7.5 - 8.4
Stock-based compensation - - 1.7 - 0.7
Pension expense (credit) 39.2 66.8 (23.8) (5.9) (5.5)
Other non-recurring costs5 2.7 8.4 3.1 0.0 0.3
Adjusted EBITDA6 $206.9 $230.8 $234.7 $44.5 $40.2
1 Represents the allocation of depreciation for certain assets of Tribune and it affiliates that support Tribune Publishing, including technology service center assets
2 Transaction-related costs represent professional fees incurred in connection with the distribution, as well as costs associated with employee retention programs
3 Since the year ended Dec. 30, 2012 was a 53-week year (based on our fiscal calendar), the 1-week adjustment allows for comparability with other fiscal years presented, which are 52-week years
4 Intercompany rent represents rental expense recorded by Tribune Publishing for facilities owned by Tribune Company and its affiliates pursuant to related party lease agreements. This intercompany rent expense is added back to net income for better comparability between periods presented as Tribune Publishing began accounting for these related party leases on Dec. 1, 2013
5 Other non-recurring costs include the write-down of certain software projects and real estate assets, one-time litigation settlements and certain other non-recurring costs such as lease terminations
6 We note that Adjusted EBITDA does not reflect the potential impact resulting from the distribution and Tribune Publishing operating as a stand-alone public company, including any modification to the affiliation agreement between CareerBuilder and Tribune Publishing as a result of the distribution, the impact of affiliation agreements between Classified Ventures and our newspapers that may not be renewed or may be renewed on different terms or rental expense to be incurred by Tribune Publishing related to lease agreements with Tribune Company for certain facilities and office space. We expect that these items will have a material negative impact on Adjusted EBITDA following the distribution. See pages 31 and 32 for details
30 t tribune PUBLISHING
Bank Adjusted EBITDA Details
Bank Adjusted EBITDA Details by Category
($mm)
2011 20121
2013 Q1 2013 Q1 2014 LTM Q1 2014
Adjusted EBITDA2 $207 $231 $235 $45 $40 $230
CareerBuilder (CB)
Lost Revenues ($46) ($46) ($44) ($11) ($10) ($43)
Reduction in Fees (COGS) 5 5 5 1 2 6
Reduction in Selling Costs (SG&A) 4 4 4 1 1 4
Total CareerBuilder Adjustment (No Economics) ($36) ($36) ($35) ($9) ($7) ($33)
Classified Ventures (CV)
Lost Revenues ($61) ($66) ($71) ($17) ($19) ($73)
Reduction in Fees (COGS) 20 21 24 5 7 26
Reduction in Selling Costs (SG&A) 11 11 13 4 4 13
Total Classified Ventures Adjustment (No Economics) ($30) ($34) ($34) ($8) ($8) ($34)
Real Estate (RE)
Rent Expense Adjustment (COGS / SG&A) ($24) ($24) ($28) ($7) ($6) ($27)
Total Real Estate Adjustment 3 ($24) ($24) ($28) ($7) ($6) ($27)
Memo: Total CB/CV/RE EBITDA Adjustments (No Economics) (90) (93) (97) (24) (21) (94)
Adjusted EBITDA Post Spin-Off $117 $137 $137 $20 $19 $136
Incremental Bank Adjusted EBITDA Adjustments
Addback Partial Economics of CareerBuilder 4 18 18 17 5 4 16
Bank Adjusted EBITDA $135 $155 $155 $25 $23 $153
Note: COGS means Cost of Goods Sold, and SG&A means Selling, General & Administrative
1 Based on 52-week year
2 Adjusted EBITDA as defined on page 2; See reconciliation on page 30
3 The real estate adjustment represents rental expense for facilities leased by Tribune Publishing from Tribune Company and its affiliates pursuant to related party lease agreements, net of savings resulting from Tribune Publishing no longer managing certain facilities. The 2013 adjustment is higher as Tribune Publishing’s 2013 results already reflect the savings for no longer managing certain properties that were transferred at the end of 2012 to Tribune. The 2013 real estate adjustment also reflects lease amendments to be executed that will lower future rentals by approximately $4mm
4 Partial Economics and No Economics as defined on page 2
31 t tribune PUBLISHING
Bank Adjusted EBITDA Details (cont’d)
Bank Adjusted Revenue, Operating Expense, and EBITDA Details
($mm)
2011 20121 2013 Q1 2013 Q1 2014 LTM Q1 2014
Revenue $1,916 $1,882 $1,795 $441 $417 $1,771
Less: CareerBuilder (CB) Adjustment (46) (46) (44) (11) (10) (43)
Less: Classified Ventures (CV) Adjustment (61) (66) (71) (17) (19) (73)
Adjusted Revenue $1,809 $1,770 $1,681 $413 $388 $1,656
Addback Partial Economics of CareerBuilder 2 23 23 22 6 5 22
Bank Adjusted Revenue $1,832 $1,793 $1,703 $418 $393 $1,677
Operating Expenses $1,871 $1,872 $1,629 $403 $396 $1,621
Less: CareerBuilder Adjustment (9) (10) (9) (2) (3) (10)
Less: Classified Ventures Adjustment (31) (32) (36) (9) (11) (38)
Plus: Real Estate (RE) Adjustments 3 24 24 28 7 6 27
Adjusted Operating Expenses $1,855 $1,854 $1,611 $399 $388 $1,600
Addback Partial Economics of CareerBuilder 2 5 5 5 1 2 5
Bank Adjusted Operating Expenses $1,859 $1,859 $1,616 $400 $389 $1,605
Adjusted EBITDA 4 $207 $231 $235 $45 $40 $230
Less: CB/CV/RE EBITDA Adjustments (No Economics) (90) (93) (97) (24) (21) (94)
Plus: Partial Economics of CareerBuilder 2 18 18 17 5 4 16
Bank Adjusted EBITDA $135 $155 $155 $25 $23 $153
1 Based on 52-week year
2 Partial Economics and No Economics as defined on page 2
3 The real estate adjustment represents rental expense for facilities leased by Tribune Publishing from Tribune and its affiliates pursuant to related party lease agreements, net of savings resulting from Tribune Publishing no longer managing certain facilities. The 2013 adjustment is higher as Tribune Publishing’s 2013 results already reflect the savings for no longer managing certain properties that were transferred at the end of 2012 to Tribune. The 2013 real estate adjustment also reflects lease amendments to be executed that will lower future rentals by approximately $4mm
4 Adjusted EBITDA as defined on page 2; see reconciliation on page 30
32 t tribune PUBLISHING
