Condensed Consolidated Financial Statements | NOTE 23: CONDENSED CONSOLIDATING FINANCIAL STATEMENTS The Company is the Issuer of the Registered debt and such debt is guaranteed by the 100% owned, domestic Subsidiary Guarantors. The Subsidiary Guarantors are direct or indirect 100% owned domestic subsidiaries of the Company. The subsidiaries of the Company that do not guarantee the Notes (the “Non-Guarantor Subsidiaries”) are direct or indirect subsidiaries of the Company that primarily include the Company’s international operations. The Company’s payment obligations under the Notes are jointly and severally guaranteed by the Subsidiary Guarantors, and all guarantees are full and unconditional. These guarantees are subject to release under certain circumstances, including: (a) upon the sale, exchange, disposition or other transfer (including through merger, consolidation or dissolution) of the interests in such Subsidiary Guarantor, after which such Subsidiary Guarantor is no longer a restricted subsidiary of the Company, or all or substantially all the assets of such Subsidiary Guarantor, in any case, if such sale, exchange, disposition or other transfer is not prohibited by the Indenture, (b) upon the Company designating such Subsidiary Guarantor to be an unrestricted subsidiary in accordance with the Indenture, (c) in the case of any restricted subsidiary of the Company that after the issue date is required to guarantee the Notes, upon the release or discharge of the guarantee by such restricted subsidiary of any indebtedness of the Company or another Subsidiary Guarantor or the repayment of any indebtedness of the Company or another Subsidiary Guarantor, in each case, which resulted in the obligation to guarantee the Notes, (d) upon the Company’s exercise of its legal defeasance option or covenant defeasance option in accordance with the Indenture or if the Company’s obligations under the Indenture are discharged in accordance with the terms of the Indenture, (e) upon the release or discharge of direct obligations of such Subsidiary Guarantor, or the guarantee by such Guarantor of the obligations, under the Senior Credit Agreement, or (f) during the period when the rating of the Notes is changed to investment grade. In lieu of providing separate audited financial statements for the Subsidiary Guarantors, the Company has included the accompanying condensed consolidating financial statements in accordance with the requirements of Rule 3-10(f) of SEC Regulation S-X. The following Condensed Consolidating Financial Statements present the Consolidated Balance Sheets, Consolidated Statements of Operations and Comprehensive (Loss) Income and Consolidated Statements of Cash Flows of Tribune Media Company, the Subsidiary Guarantors, the Non-guarantor Subsidiaries and the eliminations necessary to arrive at the Company’s information on a consolidated basis. These statements are presented in accordance with the disclosure requirements under SEC Regulation S-X, Rule 3-10. TRIBUNE MEDIA COMPANY AND SUBSIDIARIES COMPREHENSIVE (LOSS) INCOME YEAR ENDED DECEMBER 31, 2015 Parent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company Consolidated Operating Revenues $ — $ 1,975,463 $ 53,834 $ (18,837 ) $ 2,010,460 Programming and direct operating expenses — 960,385 23,264 (12,619 ) 971,030 Selling, general and administrative 97,093 529,400 27,325 (6,218 ) 647,600 Depreciation and amortization 7,465 243,303 18,751 — 269,519 Impairment of goodwill and other intangible assets — 385,000 — — 385,000 Total Operating Expenses 104,558 2,118,088 69,340 (18,837 ) 2,273,149 Operating Loss (104,558 ) (142,625 ) (15,506 ) — (262,689 ) (Loss) income on equity investments, net (240 ) 147,199 — — 146,959 Interest and dividend income 510 208 111 — 829 Interest expense (163,336 ) (7 ) (1,087 ) — (164,430 ) Loss on extinguishment of debt (37,040 ) — — — (37,040 ) Gain on investment transactions, net 791 8,132 3,250 — 12,173 Other non-operating items 7,880 (1,277 ) — — 6,603 Intercompany interest income (expense) 1,755 (1,755 ) — — — Intercompany income (charges) 100,260 (99,904 ) (356 ) — — (Loss) Income Before Income Taxes and Earnings (Losses) from Consolidated Subsidiaries (193,978 ) (90,029 ) (13,588 ) — (297,595 ) Income tax (benefit) expense (74,417 ) 101,493 (4,753 ) — 22,323 (Deficit) equity in earnings of consolidated subsidiaries, net of taxes (200,357 ) (5,446 ) — 205,803 — Net (Loss) Income $ (319,918 ) $ (196,968 ) $ (8,835 ) $ 205,803 $ (319,918 ) Comprehensive (Loss) Income $ (344,393 ) $ (201,018 ) $ (19,003 ) $ 220,021 $ (344,393 ) TRIBUNE MEDIA COMPANY AND SUBSIDIARIES COMPREHENSIVE (LOSS) INCOME YEAR ENDED DECEMBER 28, 2014 Parent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company Consolidated Operating Revenues $ — $ 1,935,338 $ 30,140 $ (16,119 ) $ 1,949,359 Programming and direct operating expenses — 768,397 13,676 (6,644 ) 775,429 Selling, general and administrative 73,685 502,134 17,930 (9,475 ) 584,274 Depreciation and amortization 2,162 271,953 14,359 — 288,474 Total Operating Expenses 75,847 1,542,484 45,965 (16,119 ) 1,648,177 Operating (Loss) Profit (75,847 ) 392,854 (15,825 ) — 301,182 Income on equity investments, net — 236,713 — — 236,713 Interest and dividend income 961 250 157 — 1,368 Interest expense (155,227 ) (1,442 ) (1,197 ) — (157,866 ) Gain on investment transaction, net — 372,485 — — 372,485 Other non-operating items (8,563 ) (3,537 ) 28 — (12,072 ) Intercompany interest income (expense) 1,760 (1,760 ) — — — Intercompany income (charges) 80,851 (81,328 ) 477 — — (Loss) Income from Continuing Operations Before Income Taxes and Earnings (Losses) from Consolidated Subsidiaries (156,065 ) 914,235 (16,360 ) — 741,810 Income tax (benefit) expense (55,573 ) 342,659 (8,387 ) — 278,699 Equity (deficit) in earnings of consolidated subsidiaries, net of taxes 577,155 (6,653 ) — (570,502 ) — Income (Loss) from Continuing Operations 476,663 564,923 (7,973 ) (570,502 ) 463,111 Income from Discontinued Operations, net of taxes — — 13,552 — 13,552 Net Income (Loss) $ 476,663 $ 564,923 $ 5,579 $ (570,502 ) $ 476,663 Comprehensive Income (Loss) $ 291,527 $ 562,558 $ 5,191 $ (567,749 ) $ 291,527 TRIBUNE MEDIA COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME YEAR ENDED DECEMBER 29, 2013 Parent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company Consolidated Operating Revenues $ — $ 1,140,243 $ 7,236 $ (239 ) $ 1,147,240 Programming and direct operating expenses — 478,022 2,127 — 480,149 Selling, general and administrative 38,501 271,186 2,699 (239 ) 312,147 Depreciation and amortization 427 154,122 1,355 — 155,904 Total Operating Expenses 38,928 903,330 6,181 (239 ) 948,200 Operating (Loss) Profit (38,928 ) 236,913 1,055 — 199,040 Income on equity investments, net — 145,241 — — 145,241 Interest and dividend income 410 2 1 — 413 Interest expense (38,655 ) (479 ) — — (39,134 ) Gain on investment transaction, net — 150 — — 150 Other non-operating items (51,570 ) 1,226 3,541 — (46,803 ) Intercompany income (charges) 20,814 (21,594 ) 780 — — (Loss) Income from Continuing Operations Before Income Taxes and Earnings (Losses) from Consolidated Subsidiaries (107,929 ) 361,459 5,377 — 258,907 Income tax (benefit) expense (35,306 ) 128,035 3,236 — 95,965 Equity (deficit) in earnings of consolidated subsidiaries, net of taxes 314,178 (531 ) — (313,647 ) — Income (Loss) from Continuing Operations 241,555 232,893 2,141 (313,647 ) 162,942 Income from Discontinued Operations, net of taxes — — 78,613 — 78,613 Net Income (Loss) $ 241,555 $ 232,893 $ 80,754 $ (313,647 ) $ 241,555 Comprehensive Income (Loss) $ 382,240 $ 232,935 $ 80,497 $ (313,432 ) $ 382,240 TRIBUNE MEDIA COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEETS AS OF DECEMBER 31, 2015 Parent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company Consolidated Assets Current Assets Cash and cash equivalents $ 235,508 $ 13,054 $ 14,082 $ — $ 262,644 Restricted cash and cash equivalents 17,595 — — — 17,595 Accounts receivable, net 672 452,722 13,234 — 466,628 Broadcast rights — 157,538 2,702 — 160,240 Income taxes receivable — 42,816 22 — 42,838 Prepaid expenses 16,747 44,817 1,773 — 63,337 Other 4,494 3,818 351 — 8,663 Total current assets 275,016 714,765 32,164 — 1,021,945 Properties Property, plant and equipment 47,909 662,094 108,655 — 818,658 Accumulated depreciation (10,607 ) (144,089 ) (6,105 ) — (160,801 ) Net properties 37,302 518,005 102,550 — 657,857 Investments in subsidiaries 10,374,921 104,432 — (10,479,353 ) — Other Assets Broadcast rights — 203,376 46 — 203,422 Goodwill — 3,508,718 53,094 — 3,561,812 Other intangible assets, net — 2,091,010 149,189 — 2,240,199 Assets held for sale — 206,422 — — 206,422 Investments 18,276 1,659,029 15,395 — 1,692,700 Intercompany receivables 1,560,781 4,265,957 331,873 (6,158,611 ) — Intercompany loan receivable 27,000 — — (27,000 ) — Other 239,046 117,124 5,310 (187,302 ) 174,178 Total other assets 1,845,103 12,051,636 554,907 (6,372,913 ) 8,078,733 Total Assets $ 12,532,342 $ 13,388,838 $ 689,621 $ (16,852,266 ) $ 9,758,535 TRIBUNE MEDIA COMPANY AND SUBSIDIARIES AS OF DECEMBER 31, 2015 Parent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company Consolidated Liabilities and Shareholders’ Equity (Deficit) Current Liabilities Accounts payable $ 29,587 $ 24,153 $ 6,654 $ — $ 60,394 Debt due within one year 22,443 — 4,036 — 26,479 Income taxes payable — 2,700 758 — 3,458 Contracts payable for broadcast rights — 233,660 3,016 — 236,676 Deferred revenue — 39,654 5,067 — 44,721 Interest payable 33,826 — 2 — 33,828 Other 44,615 91,384 5,862 — 141,861 Total current liabilities 130,471 391,551 25,395 — 547,417 Non-Current Liabilities Long-term debt 3,437,713 — 14,831 — 3,452,544 Intercompany loan payable — 27,000 — (27,000 ) — Deferred income taxes — 994,083 177,251 (187,302 ) 984,032 Contracts payable for broadcast rights — 385,052 55 — 385,107 Contract intangible liability, net — 13,772 — — 13,772 Intercompany payables 4,652,289 1,397,981 108,341 (6,158,611 ) — Other 485,671 55,779 2,491 — 543,941 Total non-current liabilities 8,575,673 2,873,667 302,969 (6,372,913 ) 5,379,396 Total liabilities 8,706,144 3,265,218 328,364 (6,372,913 ) 5,926,813 Shareholders’ Equity (Deficit) Common Stock 100 — — — 100 Treasury Stock (400,153 ) — — — (400,153 ) Additional paid-in-capital 4,619,618 9,529,071 288,814 (9,817,885 ) 4,619,618 Retained (deficit) earnings (322,351 ) 600,853 77,498 (678,351 ) (322,351 ) Accumulated other comprehensive (loss) income (71,016 ) (6,304 ) (10,579 ) 16,883 (71,016 ) Total Tribune Media Company shareholders’ equity (deficit) 3,826,198 10,123,620 355,733 (10,479,353 ) 3,826,198 Noncontrolling interests — — 5,524 — 5,524 Total shareholders’ equity (deficit) 3,826,198 10,123,620 361,257 (10,479,353 ) 3,831,722 Total Liabilities and Shareholders’ Equity (Deficit) $ 12,532,342 $ 13,388,838 $ 689,621 $ (16,852,266 ) $ 9,758,535 TRIBUNE MEDIA COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEETS AS OF DECEMBER 28, 2014 Parent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company Consolidated Assets Current Assets Cash and cash equivalents $ 1,433,388 $ 12,204 $ 9,591 $ — $ 1,455,183 Restricted cash and cash equivalents 17,600 — — — 17,600 Accounts receivable, net 7,073 426,574 7,075 — 440,722 Broadcast rights — 144,619 2,804 — 147,423 Income taxes receivable — 4,891 1,521 (1,481 ) 4,931 Deferred income taxes 8,546 21,096 33 — 29,675 Prepaid expenses 15,593 9,435 1,272 — 26,300 Other 4,048 34,869 72 — 38,989 Total current assets 1,486,248 653,688 22,368 (1,481 ) 2,160,823 Properties Property, plant and equipment 24,699 830,942 97,797 — 953,438 Accumulated depreciation (3,636 ) (95,692 ) (3,513 ) — (102,841 ) Net properties 21,063 735,250 94,284 — 850,597 Investments in subsidiaries 10,512,753 87,963 — (10,600,716 ) — Other Assets Broadcast rights — 156,949 65 — 157,014 Goodwill — 3,889,609 28,527 — 3,918,136 Other intangible assets, net — 2,270,955 126,839 — 2,397,794 Assets held for sale — 5,645 — — 5,645 Investments 8,958 1,695,289 12,945 — 1,717,192 Intercompany receivables 979,345 3,578,837 477,242 (5,035,424 ) — Intercompany loan receivable 27,000 — — (27,000 ) — Other 261,229 108,936 7,625 (188,536 ) 189,254 Total other assets 1,276,532 11,706,220 653,243 (5,250,960 ) 8,385,035 Total Assets $ 13,296,596 $ 13,183,121 $ 769,895 $ (15,853,157 ) $ 11,396,455 TRIBUNE MEDIA COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEETS AS OF DECEMBER 28, 2014 Parent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company Consolidated Liabilities and Shareholders’ Equity (Deficit) Current Liabilities Accounts payable $ 36,123 $ 39,680 $ 1,492 $ — $ 77,295 Debt due within one year — 54 4,034 — 4,088 Income taxes payable — 254,051 — (1,481 ) 252,570 Contracts payable for broadcast rights — 172,133 6,552 — 178,685 Deferred revenue — 30,442 3,910 — 34,352 Interest payable 12,155 — 83 — 12,238 Other 47,288 68,067 9,597 — 124,952 Total current liabilities 95,566 564,427 25,668 (1,481 ) 684,180 Non-Current Liabilities Long-term debt 3,471,017 — 19,880 — 3,490,897 Intercompany loan payable — 27,000 — (27,000 ) — Deferred income taxes — 1,050,751 293,999 (188,536 ) 1,156,214 Contracts payable for broadcast rights — 279,662 157 — 279,819 Contract intangible liability, net — 34,425 — — 34,425 Intercompany payables 4,022,344 887,352 125,728 (5,035,424 ) — Other 512,238 39,679 3,572 — 555,489 Total non-current liabilities 8,005,599 2,318,869 443,336 (5,250,960 ) 5,516,844 Total liabilities 8,101,165 2,883,296 469,004 (5,252,441 ) 6,201,024 Shareholders’ Equity (Deficit) Common Stock 98 — — — 98 Treasury Stock (67,814 ) — — — (67,814 ) Additional paid-in-capital 4,591,470 9,504,260 215,621 (9,719,881 ) 4,591,470 Retained earnings (deficit) 718,218 797,819 85,680 (883,499 ) 718,218 Accumulated other comprehensive (loss) income (46,541 ) (2,254 ) (410 ) 2,664 (46,541 ) Total shareholders’ equity (deficit) 5,195,431 10,299,825 300,891 (10,600,716 ) 5,195,431 Total Liabilities and Shareholders’ Equity (Deficit) $ 13,296,596 $ 13,183,121 $ 769,895 $ (15,853,157 ) $ 11,396,455 TRIBUNE MEDIA COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2015 Parent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company Consolidated Net cash (used in) provided by operating activities $ (47,422 ) $ 190,327 $ (116,961 ) $ — $ 25,944 Investing Activities Capital expenditures (20,775 ) (64,318 ) (3,991 ) — (89,084 ) Acquisitions, net of cash acquired — (5,109 ) (69,850 ) — (74,959 ) Transfers from restricted cash — 1,112 — — 1,112 Investments (15,000 ) (542 ) (7,500 ) — (23,042 ) Distributions from equity investments — 10,328 — — 10,328 Proceeds from sales of investments 103 36,579 8,300 — 44,982 Proceeds from sales of real estate — 4,930 — — 4,930 Net cash used in investing activities (35,672 ) (17,020 ) (73,041 ) — (125,733 ) Financing Activities Long-term borrowings 1,100,000 — — — 1,100,000 Repayments of long-term debt (1,110,159 ) (54 ) (4,049 ) — (1,114,262 ) Long-term debt issuance costs (20,202 ) — — — (20,202 ) Payment of dividends (719,919 ) — — — (719,919 ) Settlements of contingent consideration, net — 4,088 (2,914 ) — 1,174 Common stock repurchases (339,942 ) — — — (339,942 ) Change in excess tax benefits from stock-based awards (868 ) — — — (868 ) Tax withholdings related to net share settlements of share-based awards (4,421 ) — — — (4,421 ) Proceeds from stock option exercises 166 — — — 166 Contributions from noncontrolling interests — — 5,524 — 5,524 Change in intercompany receivables and payables (19,441 ) (176,491 ) 195,932 — — Net cash (used in) provided by financing activities (1,114,786 ) (172,457 ) 194,493 — (1,092,750 ) Net (Decrease) Increase in Cash and Cash Equivalents (1,197,880 ) 850 4,491 — (1,192,539 ) Cash and cash equivalents, beginning of year 1,433,388 12,204 9,591 — 1,455,183 Cash and cash equivalents, end of year $ 235,508 $ 13,054 $ 14,082 $ — $ 262,644 TRIBUNE MEDIA COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 28, 2014 Parent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company Consolidated Net cash provided by (used in) operating activities $ 144,792 $ 399,228 $ 87,998 $ (253,563 ) $ 378,455 Investing Activities Capital expenditures (33,485 ) (48,793 ) (7,160 ) — (89,438 ) Acquisitions, net of cash acquired (157,814 ) (68,537 ) (53,482 ) — (279,833 ) Decrease in restricted cash related to acquisition of Local TV — 201,922 — — 201,922 Transfers to restricted cash — (1,109 ) — — (1,109 ) Investments — (830 ) (1,500 ) — (2,330 ) Distributions from equity investments — 180,521 — — 180,521 Intercompany dividends 21,437 — — (21,437 ) — Proceeds from sales of investments 103 659,292 — — 659,395 Proceeds from sales of real estate — 49,870 — — 49,870 Net cash (used in) provided by investing activities (169,759 ) 972,336 (62,142 ) (21,437 ) 718,998 Financing Activities Long-term borrowings related to Publishing Spin-off — — 346,500 — 346,500 Repayments of long-term debt (293,865 ) (2,383 ) (3,037 ) — (299,285 ) Repayment of Senior Toggle Notes — (172,237 ) — — (172,237 ) Long-term debt issuance costs related to Publishing Spin-off — — (10,179 ) — (10,179 ) Common stock repurchases (60,211 ) — — — (60,211 ) Cash and restricted cash distributed to Tribune Publishing — — (86,530 ) — (86,530 ) Change in excess tax benefits from stock-based awards 868 — — — 868 Tax withholdings related to net share settlements of share-based awards (3,201 ) — — — (3,201 ) Proceeds from stock option exercises 1,308 — — — 1,308 Intercompany dividends — — (275,000 ) 275,000 — Change in intercompany receivables and payables 1,258,014 (1,256,528 ) (1,486 ) — — Net cash provided by (used in) financing activities 902,913 (1,431,148 ) (29,732 ) 275,000 (282,967 ) Net Increase (Decrease) in Cash and Cash Equivalents 877,946 (59,584 ) (3,876 ) — 814,486 Cash and cash equivalents, beginning of year 555,442 71,788 13,467 — 640,697 Cash and cash equivalents, end of year $ 1,433,388 $ 12,204 $ 9,591 $ — $ 1,455,183 TRIBUNE MEDIA COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 29, 2013 Parent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company Consolidated Net cash (used in) provided by operating activities $ (119,522 ) $ 383,994 $ 95,099 $ — $ 359,571 Investing Activities Capital expenditures (30,340 ) (23,424 ) (17,105 ) — (70,869 ) Acquisitions, net of cash acquired — (2,523,410 ) (27,000 ) — (2,550,410 ) Increase in restricted cash related to acquisition of Local TV — (201,922 ) — — (201,922 ) Intercompany notes issuance (27,000 ) — — 27,000 — Investments (275 ) (2,373 ) (169 ) — (2,817 ) Distributions from equity investments — 53,871 — — 53,871 Proceeds from sales of investments 2,074 — 100 — 2,174 Proceeds from sales of real estate — 10,739 — — 10,739 Net cash (used in) provided by investing activities (55,541 ) (2,686,519 ) (44,174 ) 27,000 (2,759,234 ) Financing Activities Long-term borrowings 3,763,567 — 26,933 — 3,790,500 Repayments of long-term debt (1,100,000 ) (2,234 ) — — (1,102,234 ) Long-term debt issuance costs (78,480 ) — — — (78,480 ) Intercompany notes borrowing — 27,000 — (27,000 ) — Change in intercompany receivables and payables (2,264,883 ) 2,346,758 (81,875 ) — — Net cash provided by (used in) financing activities 320,204 2,371,524 (54,942 ) (27,000 ) 2,609,786 Net Increase (Decrease) in Cash and Cash Equivalents 145,141 68,999 (4,017 ) — 210,123 Cash and cash equivalents, beginning of year 410,301 2,789 17,484 — 430,574 Cash and cash equivalents, end of year $ 555,442 $ 71,788 $ 13,467 $ — $ 640,697 |