Condensed Consolidating Financial Information | NOTE 18: CONDENSED CONSOLIDATING FINANCIAL INFORMATION The Company is the Issuer of the registered debt (see Note 7 ) 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 Company’s payment obligations under the Notes are jointly and severally guaranteed by the Subsidiary Guarantors, and all guarantees are full and unconditional. 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 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 INCOME (LOSS) THREE MONTHS ENDED SEPTEMBER 30, 2016 Parent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company Consolidated Operating Revenues $ — $ 509,039 $ 13,536 $ (4,506 ) $ 518,069 Programming and direct operating expenses — 261,974 6,755 (247 ) 268,482 Selling, general and administrative 25,254 143,237 7,997 (4,259 ) 172,229 Depreciation and amortization 2,973 60,058 5,075 — 68,106 Gain on sales of real estate — (213,168 ) — — (213,168 ) Total Operating Expenses 28,227 252,101 19,827 (4,506 ) 295,649 Operating (Loss) Profit (28,227 ) 256,938 (6,291 ) — 222,420 (Loss) income on equity investments, net (599 ) 32,336 — — 31,737 Interest and dividend income 464 13 57 — 534 Interest expense (41,922 ) — (199 ) — (42,121 ) Other non-operating items (377 ) — — — (377 ) Intercompany interest income (expense) 438 (438 ) — — — Intercompany income (charges) 24,112 (24,054 ) (58 ) — — (Loss) Income Before Income Taxes and Earnings (Losses) from Consolidated Subsidiaries (46,111 ) 264,795 (6,491 ) — 212,193 Income tax (benefit) expense (19,758 ) 88,466 (2,280 ) — 66,428 Equity (deficit) in earnings of consolidated subsidiaries, net of taxes 172,118 (1,559 ) — (170,559 ) — Net Income (Loss) $ 145,765 $ 174,770 $ (4,211 ) $ (170,559 ) $ 145,765 Comprehensive Income (Loss) $ 148,449 $ 174,425 $ (1,916 ) $ (172,509 ) $ 148,449 TRIBUNE MEDIA COMPANY AND SUBSIDIARIES COMPREHENSIVE INCOME (LOSS) THREE MONTHS ENDED SEPTEMBER 30, 2015 Parent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company Consolidated Operating Revenues $ — $ 480,578 $ 12,903 $ (4,887 ) $ 488,594 Programming and direct operating expenses — 226,597 3,896 (3,390 ) 227,103 Selling, general and administrative 20,448 126,381 8,544 (1,497 ) 153,876 Depreciation and amortization 2,068 61,432 5,307 — 68,807 Total Operating Expenses 22,516 414,410 17,747 (4,887 ) 449,786 Operating (Loss) Profit (22,516 ) 66,168 (4,844 ) — 38,808 Income on equity investments, net — 36,987 — — 36,987 Interest and dividend income 96 25 41 — 162 Interest expense (42,243 ) — (286 ) — (42,529 ) Gain on investment transaction, net — — 3,250 — 3,250 Other non-operating items 1,582 912 — — 2,494 Intercompany interest income (expense) 438 (438 ) — — — Intercompany income (charges) 25,065 (24,976 ) (89 ) — — (Loss) Income Before Income Taxes and Earnings (Losses) from Consolidated Subsidiaries (37,578 ) 78,678 (1,928 ) — 39,172 Income tax (benefit) expense (13,907 ) 25,406 (185 ) — 11,314 Equity (deficit) in earnings of consolidated subsidiaries, net of taxes 51,529 (1,875 ) — (49,654 ) — Net Income (Loss) $ 27,858 $ 51,397 $ (1,743 ) $ (49,654 ) $ 27,858 Comprehensive Income (Loss) $ 24,087 $ 48,417 $ (2,809 ) $ (45,608 ) $ 24,087 TRIBUNE MEDIA COMPANY AND SUBSIDIARIES COMPREHENSIVE INCOME (LOSS) NINE MONTHS ENDED SEPTEMBER 30, 2016 Parent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company Consolidated Operating Revenues $ — $ 1,533,303 $ 44,690 $ (13,296 ) $ 1,564,697 Programming and direct operating expenses — 732,616 18,546 (6,436 ) 744,726 Selling, general and administrative 74,673 444,851 22,488 (6,860 ) 535,152 Depreciation and amortization 8,310 178,303 15,149 — 201,762 Gain on sales of real estate, net — (212,719 ) — — (212,719 ) Total Operating Expenses 82,983 1,143,051 56,183 (13,296 ) 1,268,921 Operating (Loss) Profit (82,983 ) 390,252 (11,493 ) — 295,776 (Loss) income on equity investments, net (1,997 ) 116,292 — — 114,295 Interest and dividend income 772 66 82 — 920 Interest expense (125,324 ) — (680 ) — (126,004 ) Other non-operating items (756 ) — — — (756 ) Intercompany interest income (expense) 1,316 (1,316 ) — — — Intercompany income (charges) 71,634 (71,464 ) (170 ) — — (Loss) Income Before Income Taxes and Earnings (Losses) from Consolidated Subsidiaries (137,338 ) 433,830 (12,261 ) — 284,231 Income tax expense 20,027 167,622 101,287 — 288,936 Equity (deficit) in earnings of consolidated subsidiaries, net of taxes 152,660 (2,365 ) — (150,295 ) — Net (Loss) Income $ (4,705 ) $ 263,843 $ (113,548 ) $ (150,295 ) $ (4,705 ) Comprehensive Income (Loss) $ 2,427 $ 261,800 $ (109,688 ) $ (152,112 ) $ 2,427 TRIBUNE MEDIA COMPANY AND SUBSIDIARIES COMPREHENSIVE INCOME (LOSS) NINE MONTHS ENDED SEPTEMBER 30, 2015 Parent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company Consolidated Operating Revenues $ — $ 1,438,056 $ 40,407 $ (15,608 ) $ 1,462,855 Programming and direct operating expenses — 665,252 18,571 (10,001 ) 673,822 Selling, general and administrative 69,637 384,488 20,856 (5,607 ) 469,374 Depreciation and amortization 4,536 181,720 13,779 — 200,035 Loss on sales of real estate — 97 — — 97 Total Operating Expenses 74,173 1,231,557 53,206 (15,608 ) 1,343,328 Operating (Loss) Profit (74,173 ) 206,499 (12,799 ) — 119,527 Income on equity investments, net — 119,834 — — 119,834 Interest and dividend income 396 76 100 — 572 Interest expense (121,268 ) (5 ) (842 ) — (122,115 ) Loss on extinguishment of debt (37,040 ) — — — (37,040 ) Gain on investment transaction, net 688 8,132 3,250 — 12,070 Other non-operating items 239 846 — — 1,085 Intercompany interest income (expense) 1,316 (1,316 ) — — — Intercompany income (charges) 75,195 (74,928 ) (267 ) — — (Loss) Income Before Income Taxes and Earnings (Losses) from Consolidated Subsidiaries (154,647 ) 259,138 (10,558 ) — 93,933 Income tax (benefit) expense (58,811 ) 95,423 (3,689 ) — 32,923 Equity (deficit) in earnings of consolidated subsidiaries, net of taxes 156,846 (4,586 ) — (152,260 ) — Net Income (Loss) $ 61,010 $ 159,129 $ (6,869 ) $ (152,260 ) $ 61,010 Comprehensive Income (Loss) $ 47,841 $ 155,417 $ (11,731 ) $ (143,686 ) $ 47,841 TRIBUNE MEDIA COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEETS AS OF SEPTEMBER 30, 2016 Parent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company Consolidated Assets Current Assets Cash and cash equivalents $ 620,376 $ 10,645 $ 12,677 $ — $ 643,698 Restricted cash and cash equivalents 17,566 — — — 17,566 Accounts receivable, net 116 416,709 8,439 — 425,264 Broadcast rights — 183,435 3,471 — 186,906 Income taxes receivable — 2,593 171 — 2,764 Prepaid expenses 15,471 34,163 4,011 — 53,645 Other 5,950 3,088 255 — 9,293 Total current assets 659,479 650,633 29,024 — 1,339,136 Properties Property, plant and equipment 53,682 585,815 113,341 — 752,838 Accumulated depreciation (18,695 ) (176,384 ) (7,484 ) — (202,563 ) Net properties 34,987 409,431 105,857 — 550,275 Investments in subsidiaries 10,470,498 102,003 — (10,572,501 ) — Other Assets Broadcast rights — 174,010 102 — 174,112 Goodwill — 3,508,718 54,804 — 3,563,522 Other intangible assets, net — 1,955,221 137,704 — 2,092,925 Assets held for sale — 17,878 — — 17,878 Investments 20,051 1,629,465 17,895 — 1,667,411 Intercompany receivables 2,152,363 5,445,408 357,751 (7,955,522 ) — Intercompany loan receivable 27,000 — — (27,000 ) — Other 107,334 83,650 6,535 (105,102 ) 92,417 Total other assets 2,306,748 12,814,350 574,791 (8,087,624 ) 7,608,265 Total Assets $ 13,471,712 $ 13,976,417 $ 709,672 $ (18,660,125 ) $ 9,497,676 TRIBUNE MEDIA COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEETS AS OF SEPTEMBER 30, 2016 Parent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company Consolidated Liabilities and Shareholders’ Equity (Deficit) Current Liabilities Accounts payable $ 34,638 $ 27,043 $ 3,737 $ — $ 65,418 Debt due within one year 15,915 — 3,999 — 19,914 Income taxes payable — 64,269 — — 64,269 Contracts payable for broadcast rights — 249,585 3,674 — 253,259 Deferred revenue — 40,453 4,579 — 45,032 Interest payable 13,897 — 2 — 13,899 Other 42,053 71,015 4,214 — 117,282 Total current liabilities 106,503 452,365 20,205 — 579,073 Non-Current Liabilities Long-term debt 3,384,076 — 11,769 — 3,395,845 Intercompany loan payable — 27,000 — (27,000 ) — Deferred income taxes — 959,553 172,294 (105,102 ) 1,026,745 Contracts payable for broadcast rights — 347,992 104 — 348,096 Contract intangible liability, net — 25 — — 25 Intercompany payables 5,894,575 1,809,972 250,975 (7,955,522 ) — Other 461,232 54,057 1,608 — 516,897 Total non-current liabilities 9,739,883 3,198,599 436,750 (8,087,624 ) 5,287,608 Total liabilities 9,846,386 3,650,964 456,955 (8,087,624 ) 5,866,681 Shareholders’ Equity (Deficit) Common stock 100 — — — 100 Treasury stock (557,688 ) — — — (557,688 ) Additional paid-in-capital 4,573,854 9,486,179 289,818 (9,775,997 ) 4,573,854 Retained (deficit) earnings (327,056 ) 847,621 (36,051 ) (811,570 ) (327,056 ) Accumulated other comprehensive (loss) income (63,884 ) (8,347 ) (6,719 ) 15,066 (63,884 ) Total Tribune Media Company shareholders’ equity (deficit) 3,625,326 10,325,453 247,048 (10,572,501 ) 3,625,326 Noncontrolling interests — — 5,669 — 5,669 Total shareholders’ equity (deficit) 3,625,326 10,325,453 252,717 (10,572,501 ) 3,630,995 Total Liabilities and Shareholders’ Equity (Deficit) $ 13,471,712 $ 13,976,417 $ 709,672 $ (18,660,125 ) $ 9,497,676 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 (1) 189,517 117,124 5,167 (187,302 ) 124,506 Total other assets 1,795,574 12,051,636 554,764 (6,372,913 ) 8,029,061 Total Assets $ 12,482,813 $ 13,388,838 $ 689,478 $ (16,852,266 ) $ 9,708,863 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 (1) 15,874 — 3,988 — 19,862 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 123,902 391,551 25,347 — 540,800 Non-Current Liabilities Long-term debt (1) 3,394,753 — 14,736 — 3,409,489 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 8,532,713 2,873,667 302,874 (6,372,913 ) 5,336,341 Total Liabilities 8,656,615 3,265,218 328,221 (6,372,913 ) 5,877,141 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) $ 12,482,813 $ 13,388,838 $ 689,478 $ (16,852,266 ) $ 9,708,863 (1) December 31, 2015 balances have been reclassified to present debt issuance costs as a direct deduction from the carrying amount of an associated debt liability in accordance with ASU 2015-03. TRIBUNE MEDIA COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2016 Parent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company Consolidated Net cash (used in) provided by operating activities $ (73,507 ) $ 364,608 $ (104,561 ) $ — $ 186,540 Investing Activities Capital expenditures (9,433 ) (46,419 ) (6,003 ) — (61,855 ) Transfers from restricted cash — 297 — — 297 Investments (850 ) (101 ) (2,500 ) — (3,451 ) Intercompany dividend 3,326 — — (3,326 ) — Proceeds from sales of real estate and other assets — 506,369 681 — 507,050 Net cash (used in) provided by investing activities (6,957 ) 460,146 (7,822 ) (3,326 ) 442,041 Financing Activities Repayments of long-term debt (17,844 ) — (3,037 ) — (20,881 ) Long-term debt issuance costs (784 ) — — — (784 ) Payment of dividends (68,684 ) — — — (68,684 ) Settlements of contingent consideration — (750 ) (2,886 ) — (3,636 ) Common stock repurchases (149,147 ) — — — (149,147 ) Tax withholdings related to net share settlements of share-based awards (4,540 ) — — — (4,540 ) Contributions from noncontrolling interests — — 145 — 145 Intercompany dividend — (3,326 ) — 3,326 — Change in intercompany receivables and payables (1) 706,331 (823,087 ) 116,756 — — Net cash provided by (used in) financing activities 465,332 (827,163 ) 110,978 3,326 (247,527 ) Net Increase (Decrease) in Cash and Cash Equivalents 384,868 (2,409 ) (1,405 ) — 381,054 Cash and cash equivalents, beginning of year 235,508 13,054 14,082 — 262,644 Cash and cash equivalents, end of year $ 620,376 $ 10,645 $ 12,677 $ — $ 643,698 (1) Excludes the impact of a $56 million non-cash settlement of intercompany balances upon dissolution of certain Guarantor subsidiaries. TRIBUNE MEDIA COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015 (In thousands of dollars) Parent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company Consolidated Net cash (used in) provided by operating activities $ (52,491 ) $ 176,453 $ (116,037 ) $ — $ 7,925 Investing Activities Capital expenditures (18,594 ) (42,956 ) (2,225 ) — (63,775 ) Acquisitions, net of cash acquired — (5,109 ) (69,891 ) — (75,000 ) Transfers to restricted cash — 1,091 — — 1,091 Investments — (511 ) (2,500 ) — (3,011 ) Distributions from equity investments — 4,707 — — 4,707 Proceeds from sales of real estate and other assets — 13,750 8,300 — 22,050 Net cash used in investing activities (18,594 ) (29,028 ) (66,316 ) — (113,938 ) Financing Activities Long-term borrowings 1,100,000 — — — 1,100,000 Repayments of long-term debt (1,103,199 ) (54 ) (4,049 ) — (1,107,302 ) Long-term debt issuance costs (20,202 ) — — — (20,202 ) Payments of dividends (696,364 ) — — — (696,364 ) Settlements of contingent considerations — 4,088 (2,914 ) — 1,174 Common stock repurchases (272,812 ) — — — (272,812 ) Change in excess tax benefits from stock-based awards (570 ) — — — (570 ) Tax withholdings related to net share settlements of share-based awards (4,264 ) — — — (4,264 ) Proceeds from stock option exercises 166 — — — 166 Contributions from noncontrolling interest — — 1,324 — 1,324 Change in intercompany receivables and payables (39,504 ) (150,676 ) 190,180 — — Net cash (used in) provided by financing activities (1,036,749 ) (146,642 ) 184,541 — (998,850 ) Net (Decrease) Increase in Cash and Cash Equivalents (1,107,834 ) 783 2,188 — (1,104,863 ) Cash and cash equivalents, beginning of year 1,433,388 12,204 9,591 — 1,455,183 Cash and cash equivalents, end of year $ 325,554 $ 12,987 $ 11,779 $ — $ 350,320 |