Tribune Company Information Provided to Prospective Lenders October 31, 2013

Transcription

1 Tribune Company Information Provided to Prospective Lenders October 31, 2013 As previously announced, on July 1, 2013, Tribune Company ( Tribune ) entered into a definitive agreement to acquire Local TV Holdings, LLC ( Local TV ) for $2.725 billion in cash (the Transaction ). In connection with the Transaction, Tribune plans on entering into a new $4.1 billion credit facility (the New Credit Facility ) which will include a $3.8 billion Term Loan Facility and $300 million Revolving Credit Facility. The proceeds of the New Credit Facility are expected to be used to fund the Transaction, repay existing debt and for general corporate purposes, as further described in the attached Annex A. In connection with the proposed New Credit Facility, Tribune intends to provide prospective lenders with an information memorandum containing information with respect to Tribune and Local TV, which has not been previously publicly disclosed, including summary financial data for Local TV and pro forma financial information for Tribune. We are providing relevant excerpts from the information memorandum in the attached Annex A. Presentation of Financial Data As a result of the consummation of the Plan of Reorganization (the Plan ) 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 freshstart reporting in accordance with Financial Accounting Standards Board Accounting Standards Codification ( ASC ) Topic 852, Reorganizations. Any presentation of the Company s consolidated financial statements as of and for periods subsequent to the Effective Date represents the financial position, results of operations and cash flows of a new reporting entity and will not be comparable to any presentation of the Company s consolidated financial statements as of and for periods prior to the Effective Date and the adoption of fresh-start reporting. The financial information contained in the attached Annex A for periods ending prior to the Effective Date does not reflect the impact of fresh-start reporting. The financial condition and results of operations for periods ending prior to the Effective Date 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. The Company s fiscal year ends every year on the last Sunday in December. Every five or six years, Tribune 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. For comparability, financial information in this document related to 2012 and the twelve-month period ending June 30, 2013, exclude this extra week. Local TV reports on a calendar year basis. The financial information contained in the attached Annex A does not meet the requirements of the SEC s Article 3-05 of Regulation S-X (financial statements of businesses acquired or to be acquired) or Article 11 of Regulation S-X (pro forma financial statements).

2 Cautionary Statement Regarding Forward-Looking Statements The attached Annex A may include certain forward-looking statements and projections provided by the Company and such statements and projections are not to be viewed as facts. The Company makes no representation or warranty as to the accuracy or completeness of any forward-looking statements, forecasts, projections or estimates included in the attached Annex A (or the assumptions on which they are based). Forward-looking statements and projections reflect various estimates and assumptions by the Company and are subject to risks, trends and uncertainties, including those discussed in the document entitled Risk Factors which has been posted separately on our website ( on the date hereof, that could cause actual results and achievements to differ materially from those expressed in such statements or projections. Whether or not any such forward-looking statements or projections are in fact achieved will depend upon future events, some of which are not within the control of the Company. Readers are cautioned not to place undue reliance on such forward-looking statements or projections. The Company undertakes no obligation to update any statements, forecasts, projections or estimates, whether as a result of new information, future events or otherwise. The words believe, expect, anticipate, estimate, could, should, intend, may, plan, seek, will, designed, assume, implied and similar expressions generally identify forward-looking statements, forecasts, projections or estimates. Statements contained herein describing documents and agreements are summaries only and such summaries are qualified in their entirety by reference to such documents and agreements. Non-GAAP Financial Measures The attached Annex A includes a discussion of Adjusted EBITDA for Tribune, Tribune s operating segments and Local TV, as well as on a pro forma basis. Adjusted EBITDA is a financial measure that is not recognized under accounting principles generally accepted in the U.S., or 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 Tribune s operating segments (Publishing, Broadcasting and Corporate) is calculated as 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 team 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. See the Financial Overview section of Annex A for reconciliations of Adjusted EBITDA to the most directly comparable financial measure under GAAP. 2

3 ANNEX A 3

4 1. Executive summary Tribune Company ( Tribune or the Company ) is a leading multimedia broadcasting and content provider in the U.S. The Company s premium assets include iconic broadcasting, network, digital and publishing properties. Tribune believes marketing remains the lifeblood of U.S. commerce and Tribune s platform allows national and local sellers to connect with buyers through the Company s local, incumbent media in a way few others can. Since the start of 2013, Tribune has been setting the strategic foundation to transform and chart the path forward building multimedia capabilities and an asset portfolio to become the country s leading independent content creator and distributor. On July 1, 2013, Tribune entered into a definitive agreement to acquire Local TV Holdings, LLC ( LTV ). Pro forma for the acquisition of LTV s 19 television stations in 16 key markets, Tribune is expected to be the #1 TV affiliate group in America based on U.S. TV household reach. Tribune Company overview The Company s current Broadcasting segment includes 23 television stations in 19 markets with stations in each of the top five markets, as well as four duopolies in other markets. Thirteen of these stations are affiliated with the CW Network, seven with FOX, one with ABC and two stations are independent. LTV owns 19 highly-ranked stations in 16 attractive markets, including seven FOX, five CBS, two ABC, two NBC, two independent stations and one CW. The acquisition also forms duopolies between Tribune and LTV s stations in Denver and St. Louis, which have been jointly managed under a local marketing agreement since After the acquisition closes, Tribune intends to own 39 stations. In addition, Tribune intends to provide certain services to support the operations of three stations subject to the supervision and control of a third party, Dreamcatcher Broadcasting LLC. For the purposes of this document all 42 stations are referred to as Tribune s stations. Pro forma station portfolio 1 Network Number of stations 150 Mkts 51+ Mkts Total % of total % % /IND % % % % Total % 1 Excludes low power stations, Class A stations, repeaters, satellites and digital channels; market rank based on DMA After the acquisition, Tribune Company is expected to be the country s largest independent broadcast TV group, with its stations reaching more than 50 million U.S. TV households, representing 44% of U.S. TV households (27% FCC reach including the UHF discount). 1 Additionally, Tribune is currently the #1 CW affiliate group and expects to become the #1 FOX affiliate group when the transaction closes. The Company also owns and operates WGN America, the country s last remaining national superstation, which reaches approximately 75 million homes, and Antenna TV, a broadcast multicast network reaching approximately 75 million U.S. television households. Pro forma for the acquisition, Broadcasting generated $1.7 billion of revenue, or 46% of the Company s consolidated revenue, during the 12 month period ended 1 Source: Nielsen Total Television Market Universe Estimates 4

5 June As of the second quarter of 2013, the Broadcasting segment employed 2,598 fulltime equivalent employees. LTV had 2,318 full-time equivalent employees as of June Tribune s Publishing segment is the second largest U.S. newspaper publishing group based on Sunday circulation. The group is comprised of eight metropolitan newspapers with related websites, niche targeted publications, direct marketing businesses and commercial printing and delivery services. The Publishing segment also currently includes Tribune Media Services ( TMS ), a leading provider of entertainment-related data (TV listings and schedules, movie show times, online video data). The Company s newspapers had combined daily circulation of 1.8 million and Sunday circulation of 2.9 million as of the March 2013 Alliance for Audited Media. In addition, the newspaper websites had over 500 million average monthly page views and 28 million monthly unique visitors on average in the twelve months ended June 2013 according to Omniture and comscore, respectively. The Publishing segment generated $1.9 billion of revenue, or 54% of the Company s consolidated revenue pro forma for the acquisition, during the 12 month period ended June As of the second quarter of 2013, the Company s Publishing segment employed 8,487 full-time equivalent employees. In July 2013, Tribune announced plans to spin-off certain publishing assets ( Publishing Spin-off ). See page 8 for more discussion of the Publishing Spin-off. The Company owns valuable investments in several media companies, including TV Food Network, G.P. ( TVFN ), CareerBuilder and Classified Ventures (Cars.com and Apartments.com). The Company received $211 million in cash distributions from its equity method investments during the 12 month period ended June The LTV acquisition significantly increases the size of the business. Compared to a standalone Adjusted EBITDA of $832 million in 2012, Tribune s pro forma Adjusted EBITDA in 2012 is $1.1 billion. 1 Consolidated Adjusted EBITDA 1,2 ($ millions) ¹ Adjusted EBITDA is not a recognized term under GAAP. See Financial overview section for reconciliations of these amounts to the most directly comparable financial measure under GAAP. 2 The Company s fiscal year ends every year on the last Sunday in December. Every five or six years, Tribune 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. For comparability, financial information in this document related to 2012 and the 12 month period ending June 30, 2013, exclude this extra week. LTV reports on a calendar year basis. 1 Adjusted EBITDA is not a recognized term under GAAP. For a reconciliation to the most directly comparable financial measure under GAAP, see Financial overview 5

6 LTV acquisition overview Tribune Company will acquire LTV for $2,725 million, which represents a 9.4x average of 2011/2012 pro forma Adjusted EBITDA seller multiple. The acquisition is expected to generate substantial synergies with a conservative estimate of approximately $100 million of annual runrate synergies within 5 years. Tribune expects to benefit from significant tax amortization from a step-up in the tax basis of the acquired LTV assets, with an estimated present value of tax savings of approximately $450 million. The transaction will be all-cash and funded using a combination of cash on hand and proceeds from a $4,100 million new senior secured credit facility. This facility includes a new $300 million revolving credit facility, which is expected to be undrawn at close, and a $3,800 million New Term Loan B. The facility allows for capacity to refinance the existing $1,100 million Term Loan B. The transaction does not affect the composition of the board, which continues as it was after the reorganization. For Tribune, the transaction is expected to deliver significant advantages, including: Transforms Tribune into the largest independent broadcast TV group based on number of households reached 42 broadcast stations in 33 markets reaching more than 50 million U.S. TV households 1 Represents 44% of total U.S. TV households (27% FCC reach including the UHF discount) Strengthens local news coverage and video syndication Increases exposure in key political battleground states and markets with NFL franchises Adds significant spectrum scale Significantly diversifies network affiliate mix Tribune is currently the #1 CW affiliate group and expects that it will be the #1 FOX affiliate when the transaction closes Substantially enhances relationships with multichannel video programming distributors ( MVPDs ), broadcast networks and programming distributors Creates a larger distribution platform for original content generated by Tribune Studios and the new digital offerings of Tribune Digital Ventures into large and growing markets Generates substantial synergies with an estimate of ~$100 million of annual run-rate synergies within 5 years Tribune expects to benefit from significant tax amortization from the step-up in the tax basis of the acquired LTV assets, with an estimated present value of tax savings of ~$450 million Acquisition is expected to be immediately free cash flow accretive 1 Source: Nielsen Total Television Market Universe Estimates 6

7 Sources and uses The following table summarizes the estimated sources and uses for the LTV acquisition based on estimated balances assuming a June 30, 2013 execution. Sources and Uses ($ millions) Sources Amount ($) Uses Amount ($) New term loan B $3,800 Purchase of LTV $2,725 Cash on hand 153 Refinance existing Tribune term loan B 1,092 Estimated fees and expenses 136 Total $3,953 Total $3,953 Note: New revolving credit facility undrawn at close but will support approximately $77 million in letters of credit expected to be issued under our working capital facility at closing Capitalization The following table outlines Tribune s pro forma capitalization. Pro forma capitalization ($ millions) Pro Forma for LTV Pro Forma for LTV and Publishing Spin-off 1 ($ millions) Amount x6/30/13 LTM Adj. EBITDA 2 xavg. LTM June 12/ June 13 Adj. EBITDA 2 Amount xavg. LTM June 12/ June 13 Adj. EBITDA 2 Cash 2 $478 $478 New $300 cash flow R/C New term loan B 3,800 3,475 3 Total debt 4 $3, x 3.6x $3, x Net debt 3, x 3.1x 2, x Adjusted EBITDA 5 $1,103 $1,059 $812 6 ¹ See page 8 for details on the proposed Publishing Spin-off ² Reflects June 30, 2013 cash balance less cash used in the LTV acquisition. The Company expects the transaction will close by year-end 2013 and the cash balance at close will reflect cash collected between June 30, 2013 and the close of the transaction 3 Pro forma for expected proceeds to Tribune received in connection with the proposed Publishing Spin-off in 2014 expected to be used to repay $325 million principal amount of New Term Loan B 4 Excludes $3 million of capital leases outstanding at June 30, See Financial overview section for reconciliations of these amounts to the most directly comparable financial measure under GAAP 6 Reflects pro forma adjustment for Publishing Spin-off. Includes estimate of income from leases for real estate used in publishing operations and retained by Tribune Company 7

8 Company Update Publishing Spin-off In July 2013, Tribune announced plans to spin-off certain publishing assets. The proposed separation would create two companies, each with greater financial and operational focus, the ability to tailor their capital structure to their specific business needs, and a management team dedicated to seizing strategic growth opportunities with maximum flexibility. The proposed separation is designed to maximize value through the spin-off of Tribune s publishing assets to an independent company and the tax-free distribution of shares in that company to the stockholders of Tribune. In addition, Tribune expects to receive a cash dividend from financing arrangements entered into in connection with the Publishing Spin-off with the proceeds to be used to repay debt. The two companies that would exist following the separation would be: Tribune Publishing Company, which would become home to Tribune s publishing assets, including the Los Angeles Times, Chicago Tribune, The Baltimore Sun, South Florida Sun Sentinel, Orlando Sentinel, Hartford Courant, The Morning Call and Daily Press. Tribune Company, which would consist of the company s other principal businesses, including 42 local television stations in 33 markets (following the close of Tribune s acquisition of LTV), WGN Radio, superstation WGN America, Antenna TV, Tribune Studios, Tribune Digital Ventures, Tribune Media Services, its equity interests in Classified Ventures, CareerBuilder, and TVFN, and its valuable portfolio of real estate assets. The Company expects that the Publishing Spin-off could be achieved in the first half of Unless otherwise noted (as pro forma for Publishing Spin-off ), the financial information presented throughout this memorandum does not reflect the impact of any potential separation of the publishing business. Tribune currently has three reporting segments: Publishing, Broadcasting and Corporate. The Publishing businesses separated in the Publishing Spin-off would include the eight newspapers and their associated businesses. Tribune Media Services ( TMS ), currently reported as a business of Publishing, would be retained as well as the real estate of Publishing. Tribune Company would enter into leases with Tribune Publishing for the office and production facilities of the publishing business. 8

9 Consolidated Adjusted EBITDA The following table summarizes the Company s Consolidated Adjusted EBITDA. Adjusted EBITDA 1 ($ millions) Adjusted EBITDA 2012 LTM June '12 Standalone LTM June '13 Average of LTMs 2012 Pro forma including LTV LTM June '12 LTM June '13 Average of LTMs Publishing $298 $306 $290 $298 $298 $306 $290 $298 Broadcasting Corporate (41) (39) (43) (41) (41) (39) (43) (41) Adjusted EBITDA from segments Plus: Cash distributions from equity investments Less: Cash contributions to pension plans $676 $679 $614 $647 $958 $879 $901 $ (15) (9) (8) (9) (15) (9) (8) (9) Adjusted EBITDA $832 $815 $817 $816 $1,114 $1,015 $1,103 $1,059 ¹ Adjusted EBITDA is not a recognized term under GAAP. See Financial overview section for reconciliations of these amounts to the most directly comparable financial measure under GAAP. 9

10 2. Key investment considerations Acquisition of LTV makes Tribune a preeminent TV broadcaster with significant scale and reach across an attractive mix of large and midsize markets with important sports and political exposure Tribune s strategy is to build the company s multimedia capabilities and portfolio in order to become the number one combined independent broadcast group and content creator in the United States. The combination of Tribune and LTV is an important step in this direction. It accelerates Tribune s strategy for growth, market leadership, and value. This combination achieves a scale that enhances Tribune s advertising sales, relationships with MVPDs and networks, plus better use of programming and spectrum. Tribune operates the largest U.S. television station group, in terms of coverage of television homes, not owned by a network and is the only non-network owner that operates stations in New York, Los Angeles and Chicago. In fact, Tribune owns stations in all top five designated market areas ( DMAs ) and seven of the top ten DMAs. In total after the acquisition of LTV, Tribune s television stations will reach more than 50 million households or 44% of all U.S. TV households 1 and will be in 33 markets as indicated in the map below. Combined TV broadcast stations ¹ CW station owned by Tribune Broadcasting and programmed pursuant to an LMA 2 Tribune intends to provide certain services to support WNEP (Wilkes-Barre, PA) and WTKR/WGNT (Norfolk, VA), which are expected to be owned by Dreamcatcher Broadcasting LLC In addition, this scale enables Tribune to take advantage of the larger footprint through which the Company can more widely distribute video and digital content, local news and local programming. This fits well with distributing the content from the recently launched Tribune Digital Ventures and Tribune Studios. Already, WGN America and Antenna TV are both available in approximately 75 million U.S. homes. The combination of Tribune and LTV more than doubles the weekly hours of locally produced news to more than 1,300 hours per week. The Company s participation in the political advertising market is greatly enhanced by LTV s footprint, which includes stations with strong news franchises in swing states of Ohio, Wisconsin and Colorado. In 2012, a presidential election year, LTV generated $117 million in 1 Source: Nielsen Total Television Market Universe Estimates 10

11 political advertising. Political ad spend on local television is expected to grow substantially, reaching $3.2 billion in Gross political revenue ($ millions) Tribune Broadcasting, with the combination of LTV, has an extensive portfolio of sports programming. In addition to carrying NFL games on its 14 FOX stations and 5 CBS stations, the FOX stations in Seattle, Milwaukee and St. Louis carry the games of the local NFL teams. FOX stations also carry NASCAR races and Major League Baseball games and CBS stations also broadcast The Masters golf tournament, SEC college football and the NCAA college basketball tournament. The combined company s two NBC affiliates broadcast the Olympics and college football including Notre Dame and its three ABC affiliates broadcast NBA basketball games. Finally, WGN America broadcasts Chicago Cubs games. In addition to national sports, on a local basis, the Chicago Cubs, Bulls, Blackhawks and White Sox are broadcast on WGN-TV in Chicago, with the Blackhawks and Cubs also broadcast on WGN radio. Also, Philadelphia Phillies and New York Mets games have been shown on Tribune stations in their markets. National Home market 1 Source: Magna Global 11

12 Positions Tribune Broadcasting to capture a greater share of valuable retransmission consent The addition of LTV strengthens and diversifies Tribune s station affiliation mix, especially with the Big Four networks. Through the 42 TV stations in 33 markets combined, the Company will have 14 stations in the top 20 markets. In addition to currently being the number one CW affiliate, the Company expects to become the number one FOX affiliate group. This leadership position provides Tribune with a stronger voice with key network relationships. Additionally, the Company has marquee programming and events to offer advertisers. Source: Tribune Management estimates and BIA Kelsey Note: Tribune intends to provide certain services to support WNEP (Wilkes-Barre, PA) and WTKR/WGNT (Norfolk, VA), which are expected to be owned by Dreamcatcher Broadcasting LLC As shown below, LTV s stations have already demonstrated strong success in generating significant retransmission consent revenue. According to SNL Kagan, the U.S. TV broadcasting industry received $2.4 billion of retransmission revenue for 2012 and is expected to grow to $6.1 billion by Due to its enhanced scale, network affiliate diversification and attractive market exposure, the new Tribune Broadcasting expects to be in a strong position to garner greater retransmission revenue. Broadcasting retransmission consent revenue ($ millions) 12

13 Shifts Tribune towards a higher margin and growth broadcasting business model The creation of the country s largest broadcast TV group by household reach positions it ahead of most of its peers as indicated below. Source: Company filings, company websites, Wall Street research, BIA Kelsey and Nielsen Note: Tribune intends to provide certain services to support WNEP (Wilkes-Barre, PA) and WTKR/WGNT (Norfolk, VA), which are expected to be owned by Dreamcatcher Broadcasting LLC 1 Pro forma for Gannett +Belo, Sinclair + Cox/Barrington/Fisher/Titan/Allbritton and Nexstar + CCA/Citadel/Stainless acquisitions; excludes UHF discount Tribune has significant scale and diversification across the media industry. Pro forma for the LTV acquisition, Tribune has $3.6 billion in revenue for the twelve months ended June 2013 generated by its strong presence in most major metropolitan markets and attractive portfolio mix of broadcasting, cable networks, publishing and digital assets. Importantly, each one of the Company s operating business units generated positive Adjusted EBITDA during the first half of The planned separation of the Publishing segment continues to streamline Tribune s business towards the higher margin broadcasting model. Current LTM 6/30/13 Adjusted EBITDA by segment 1 Pro forma LTM 6/30/13 Adjusted EBITDA by segment 1 Investments 3 24% Broadcasting 42% Investments 3 18% Broadcasting 57% Publishing 2 25% Publishing 2 33% Consolidated Adjusted EBITDA: $817 million PF Consolidated Adjusted EBITDA: $1.1 billion ¹ Chart percentages exclude corporate expense, cash contributions to pension plans and synergies. See Financial overview section for reconciliations of these amounts to the most directly comparable financial measure under GAAP ² Includes TMS ³ Includes cash distributions primarily from TV Food Network, CareerBuilder, and Classified Ventures 13

14 Leading publisher of metropolitan newspapers with diversified, profitable revenue streams Tribune is the second largest U.S. newspaper group based on Sunday circulation, with daily newspapers in five of the top 30 markets, including two in the top three. Market leading newspapers 4 First published DMA rank Circulation (000s) 2 Market position¹ Daily Sunday Net combined audience (000s) 2 Digital (millions) 3 Unique visitors Page views , , , , Source: Company Management Note: Circulation and digital traffic statistics may include minimal duplication among the media properties 1 Source: 2012 Scarborough, Release 2; Based on daily print and digital circulation 2 Source: Alliance for Audited Media; Circulation is average for six months ended March 31, 2013; DMA net combined audience except for Sun Sentinel which is NDM net combined audience 3 Source: comscore for unique visitors and Omniture for page views; Digital statistics represent average of 12 months ended June The Morning Call focuses on the Lehigh Valley region within the Philadelphia DMA (#4) The Publishing segment, which currently includes the newspapers operations, TMS and other businesses, such as direct mail, generated $290 million of Adjusted EBITDA on $1.9 billion of revenue during the 12 months ended June 2013, representing an Adjusted EBITDA margin of 15%. Over the past several years, revenue derived from run-of-press ( ROP ) advertising (advertisements that appear in printed sections of the newspaper) has been under increased pressure and the Publishing segment has been focused on diversifying its revenue sources. In the 12 months ended June 2013, 72% of Publishing revenue was derived from sources other than ROP advertising, up from 48% in This revenue shift is primarily due to initiatives to leverage Tribune s commercial printing and delivery capabilities, which accounted for approximately $199 million in revenue for the 12 months ended June Tribune Publishing prints 19 non-tribune publications and delivers 117 non-tribune publications. Newspapers that are printed and delivered by Tribune Publishing include The Wall Street Journal, The New York Times and USA Today. In addition, Tribune has grown its circulation revenue, which was up 4%, or $15 million, on a year-over-year basis during the 12 months ended June Tribune Media Services has also enjoyed revenue growth, up 3%, or $3 million, during the same period. Tribune has been at the forefront of the migration to online content through the creation of branded websites, mobile apps and investments in companies like CareerBuilder and Classified Ventures. As a result of this effort, Tribune s newspaper websites garner approximately 28 million monthly unique visitors, including approximately 1.8 million registered users, with over 500 million average monthly page views. Tribune Publishing s digital revenue for the 12 months ended June 2013 was $212 million, a 6% increase compared to the prior 12 month period. 14

15 Growing digital operations The recently formed Tribune Digital Ventures is expected to be a stand-alone unit that creates, designs, and develops new digital products and businesses that leverage Tribune s strength in local content and data, and extend the reach of its distribution platform. With the LTV transaction, Tribune has the ability to take digital content and spread it over 19 more stations covering approximately 13 million additional homes. Tribune s wholly-owned and consolidated digital operations include websites for each of its newspapers, broadcast TV stations and WGN America. Additionally, Tribune has several content focused websites such as The Envelope, the Los Angeles Times year-round entertainment awards website. LTV adds additional websites for each of its stations. For the twelve months ended June 2013, average monthly unique visitors to Tribune newspapers websites totaled 28 million and, on a combined basis, Tribune ranked fourth of all U.S. newspaper publishers internet properties according to comscore. Publishing average monthly unique visitors vs. peers (millions) Source: comscore Note: Represents average monthly unique visitors for the twelve months ended June Includes monthly unique visitors to USA Today websites 2 News Corp. includes monthly unique visitors to The Wall Street Journal websites In addition, the Tribune Publishing segment has significantly grown its registered digital subscriber base in connection with the launch of online paywalls at the newspapers during the last 12 months. Registered users (000s) 1,833 1,176 Source: Company Management Jun 2012 Jun

16 Valuable equity investment portfolio of cable and digital assets that generates stable and predictable cash flows Tribune s principal equity investments are TVFN, CareerBuilder and Classified Ventures (Cars.com and Apartments.com). Importantly, each of these three companies is profitable and makes substantial cash distributions to Tribune which has helped stabilize the Company s Adjusted EBITDA. Primary equity investments ($ millions) Investment Description Lifestyle cable networks and websites with a focus on food and cooking Tribune ownership Partners 31% Scripps Networks Interactive (69%) Largest online recruitment company in the U.S., with rapidly expanding international footprint Operator of online classified sites cars.com and apartments.com 32% Gannett (53%) McClatchy (15%) 28% McClatchy (26%) Gannett (24%) Wash. Post (16%) A.H. Belo & Belo (6%) Equity investments cash distributions to Tribune ($ millions) 1 $211 $138 $106 $171 $84 $ LTM June H '12 1H '13 % growth (23%) 61% 45% 86% 47% ¹ In August 2010, a subsidiary of Scripps Networks Interactive ( SNI ) contributed the Cooking Channel to TVFN. In order to preserve its interest in TVFN, Tribune made a pro rata capital contribution of $53 million to TVFN in February Because the amount of Tribune s $53 million cash contribution (as calculated pursuant to the partnership agreement) was less than Tribune s pro rata share based on its aggregate 31.3% interest, Tribune s 2011 and 2012 cash distributions from TVFN were reduced until the partners capital accounts were rebalanced in

17 Strong free cash flow generation The combination with LTV is expected to generate significant incremental free cash flow. The strong cash flow characteristics of the combined entity translate into greater opportunity and ultimately greater value. During the 12 month period ended June 2013, Tribune generated pro forma Adjusted EBITDA less capital expenditures of $960 million. Currently, management has no intent to issue dividends in the short-to-intermediate term, as free cash flow is expected to be used primarily for debt reduction and/or reinvestment in the business. Adjusted EBITDA capital expenditures ($ millions) 1 Defined as (Adj. EBITDA capital expenditures) / Adj. EBITDA. See Financial overview section for reconciliation of Adjusted EBITDA to the most directly comparable financial measure under GAAP 17

18 3. Business description Company overview Tribune was founded in 1847 and incorporated in Illinois in In 1968, Tribune became a holding company incorporated in Delaware. In 1983, after 136 years of private ownership, Tribune became a public company. Throughout the 1980 s and 1990 s, Tribune grew rapidly through a series of broadcasting acquisitions and strategic investments in companies such as TV Food Network, CareerBuilder and Classified Ventures. In 2000, Tribune acquired Times Mirror Company, a diversified media company that at the time owned seven newspapers, including the Los Angeles Times, effectively doubling the size of Tribune. The Times Mirror transaction was the largest acquisition in newspaper industry history. On December 8, 2008, Tribune and certain of its subsidiaries filed for protection under Chapter 11 of the U.S. Bankruptcy Code in the Bankruptcy Court for the district of Delaware. On April 17, 2012, the Company filed the Fourth Amended Joint Plan of Reorganization and that Plan of Reorganization as amended on July 19, 2012 was confirmed by the Bankruptcy Court on July 23, On November 16, 2012, Tribune received approval from the Federal Communications Commission ("FCC") of cross-ownership waivers and the assignment of Tribune s broadcast licenses to the reorganized Tribune Company. The Company emerged from bankruptcy on December 31, Today, Tribune owns operating assets across the broadcasting, cable television, digital and publishing sectors and has valuable equity investments in cable and digital businesses. Broadcasting highlights Tribune Broadcasting 23 major-market television stations in 19 markets Stations in each of the top five markets and seven of the top ten markets 13 CW affiliates, 7 Fox affiliates, 1 ABC affiliate and 2 independent stations Superstation WGN America distributed to 75 million homes Antenna TV, a multicast network, with 79 affiliates, including nine of the top ten markets, reaching 76 million U.S. television homes Tribune Studios launched in 2013 to shift focus to original and exclusive programming that Tribune controls 2012 Revenue and Adjusted EBITDA of $1.1 billion and $419 million, respectively Year-to-date June 2013 Revenue and Adjusted EBITDA of $500 million and $165 million, respectively 2,598 full time equivalent employees as of the second quarter of 2013 LTV 19 major-market stations in 16 U.S. markets Stations are located in attractive, high-impact markets ranked 17 to stations located in 8 highly contested political swing states 7 Fox affiliates, 5 CBS affiliates, 2 ABC affiliates, 2 NBC affiliates, 1 CW affiliate and 2 independent stations 2012 Revenue and Adjusted EBITDA of $619 million and $283 million, respectively 18

19 Year-to-date June 2013 Revenue and Adjusted EBITDA of $280 million and $115 million, respectively 2,318 full time equivalent employees as of June 2013 Publishing highlights 1 Second largest U.S. newspaper publishing group based on Sunday circulation Eight metropolitan newspapers with combined daily circulation of 1.8 million and Sunday circulation of 2.9 million Websites with 28 million average monthly unique visitors and 504 million monthly page views for the 12 months ended June 2013 Diversified portfolio and revenue base with only 28% of total segment revenue derived from ROP advertising Tribune Media Services, a leading provider of entertainment-related data (TV listings & schedules, movie show times, online video data) Digital revenue growing and now representing 10% of total segment revenue Over 150 targeted niche printed publications Significant commercial printing and delivery business Full service national direct mail business 2012 Revenue and Adjusted EBITDA of $2.0 billion and $298 million, respectively Year-to-date June 2013 Revenue and Adjusted EBITDA of $936 million and $128 million, respectively 8,487 full time equivalent employees as of the second quarter of 2013 Equity investments highlights Major equity investments include TVFN (31% stake): Owns TV Food Network, a popular cable network distributed to over 100 million homes, as well as the Cooking Channel which is seen in 60 million homes CareerBuilder (32% stake): Leading online recruitment website Classified Ventures (28% stake): Collection of leading classified websites, including Cars.com and Apartments.com 2012 cash distributions from equity investments of $171 million Year-to-date June 2013 cash distributions from equity investments of $124 million 1 See page 8 for details on Publishing Spin-off 19

20 Segment overview Tribune is one of the largest media companies in the U.S. with operations in two industry segments: (i) Broadcasting and (ii) Publishing, both of which include digital operations. These segments reflect the way the Company sells its products, manages its operations and makes business decisions. Certain administrative activities are not included in either segment, but are reported as Corporate. With the LTV acquisition, Tribune expects to be the largest independent broadcasting company by television household reach. Additionally, Tribune has a valuable equity investment portfolio in broadcast and programming related assets as well as a significant portfolio of real estate. June 2013 LTM consolidated revenue June 2013 LTM consolidated Adjusted EBITDA¹ Publishing 2 54% Tribune Broadcasting 29% Cash distributions from equity investments 3 18% Tribune Broadcasting 32% LTV 17% Publishing 2 25% LTV 25% Total Consolidated Revenue: $3.6 billion Total Consolidated Adjusted EBITDA: $1.1 billion 4 Note: Pro forma for LTV acquisition 1 Percentages calculated based on Adjusted EBITDA contribution before Corporate expense and cash contributions to pension plans ² Includes TMS ³ Includes cash distributions primarily from TV Food Network, CareerBuilder, and Classified Ventures 4 See Financial overview section for a reconciliation of Adjusted EBITDA to the most directly comparable financial measure under GAAP 20

21 Tribune Broadcasting On a standalone basis, the Broadcasting segment represented 35% of the Company s total consolidated revenue and 42% of the Company s total consolidated Adjusted EBITDA for the 12 months ended June The segment includes a portfolio of media assets that provides both local and national scale and operates in both the broadcasting and cable television and program production sectors. The Broadcasting segment generates meaningful Adjusted EBITDA and enjoys strong operating margin and free cash flow characteristics. TV and radio stations Tribune Broadcasting currently owns 23 television stations in 19 markets. Thirteen of the TV stations are affiliates of The CW Network. These stations are located in New York, Los Angeles, Chicago, Dallas, Washington, D.C., Houston, Miami, Denver, St. Louis, Portland, Indianapolis, Hartford and New Orleans. Seven of the television stations are affiliated with the FOX Network. These stations are located in Seattle, Sacramento, Indianapolis, Hartford, San Diego, Grand Rapids and Harrisburg. The TV station group includes one ABC Network television station affiliate in New Orleans and two independent stations in Philadelphia and Seattle. Prior to the LTV acquisition, Tribune Broadcasting owned and operated four duopolies in Seattle, Indianapolis, Hartford and New Orleans. Broadcasting s Denver and St. Louis CW stations have been co-located and operated with LTV s FOX stations in these markets. When the LTV acquisition closes, Tribune expects to have duopolies in those markets. WGN-AM, Chicago, is a news and talk radio station. It operates on frequency 720-AM and is the flagship station of the Chicago Cubs (MLB) radio network and the Chicago Blackhawks (NHL). For the 12 months ended June 2013, radio operations contributed 3% of the Broadcasting segment s operating revenues. 21

22 Tribune television stations by market rank Market (Station) Nielsen market rank % of U.S. house-holds Network affiliation Affiliation agreement expiration New York (WPIX) 1 6.4% CW 2016 Los Angeles (KTLA) 2 4.9% CW 2016 Chicago (WGN incl. CLTV) 3 3.1% CW 2016 Philadelphia (WPHL) 4 2.6% IND NA Dallas (KDAF) 5 2.3% CW 2016 Washington (WDCW) 8 2.1% CW 2016 Houston (KIAH) % CW 2016 Seattle/Portland (KCPQ, KZJO, KRCW) 13/22 2.6% FOX/IND/CW 2016 Miami (WSFL) % CW 2016 Sacramento (KTXL) % FOX 2016 Indianapolis (WXIN, WTTV) % FOX/CW 2016 San Diego (KSWB) % FOX 2017 Hartford (WTIC, WCCT) % FOX/CW 2016 Grand Rapids (WXMI) % FOX 2016 Harrisburg (WPMT) % FOX 2016 New Orleans (WGNO, WNOL) % ABC/CW 2014/2016 LMA Stations (Denver, St. Louis) 1 17/21 2.4% CW 2016 Total 35.5% Affiliations Independent Number of stations Note: Shading indicates duopolies 1 These stations have been party to LMAs with the FOX Network affiliates in the market owned by LTV. When the LTV acquisition closes, Tribune expects to have duopolies in these markets WGN America WGN America is the last national superstation and is distributed to approximately 75 million U.S. TV homes by cable, satellite and telco operators. Its programming emphasis is entertainment and consists of syndicated sit-coms, news, movies, and live sports. Management is focused on maximizing the value of WGN America. WGN America has a distribution channel of approximately 75 million subscribers and is ranked 43rd among advertisement supported cable networks. Currently, WGN America does not own or control any of its non-news programming content. However, by taking advantage of the superstation window, it has been able to keep programming costs relatively low. WGN America is shifting focus towards original and exclusive syndicated programming with ownership participation that can drive viewership through formation of Tribune Studios and hiring of Matt Cherniss. Cherniss has a background in development of original programming at Warner Bros and FOX. WGN America announced its first two original series, Salem and Manhattan, hour long scripted dramas. Additionally, in October 2013, WGN America announced exclusive cable syndication rights to the drama series Person of Interest. Other objectives for WGN America include: Investment in the network s programming and marketing to drive distribution Earn competitive affiliate fees that are on par with similarly rated networks Evaluate conversion to basic cable network 22

23 Tribune Studios In March 2013, Tribune Studios was launched to source and produce original and exclusive content for WGN America and Tribune s local stations, providing alternatives to acquired programming in the daytime, early prime, and late night dayparts. Tribune may also utilize Tribune Studios to syndicate these programs to local markets without a Tribune station. Expected formats will include talk show, game show, and reality formats with TV stations benefiting from retaining all advertising spots for owned programming. CLTV CLTV (Chicagoland Television) is Chicago s first and only 24-hour regional cable news channel. CLTV was launched in 1993 and is available to 1.5 million homes in the Chicago area. Antenna TV Antenna TV is a 24/7 digital multicast network airing on television stations across the U.S. Launched in 2011, Antenna TV now reaches 76 million U.S. television homes. It is currently carried by 79 television station affiliates, including affiliates in nine of the ten largest U.S. television markets. The network features classic television programs such as Barney Miller, All in the Family, Sanford & Son and Dennis the Menace. Local television stations air Antenna TV as a digital multicast channel often on a.2 ( dot 2 ) or.3 ( dot 3 ) channel depending on the city and the station. Antenna TV is available free over-the-air using a traditional broadcast television antenna or a rooftop antenna. In addition, most major cable companies carry Antenna TV through retransmission consent agreements with the local Antenna TV affiliate. Antenna TV is provided to station affiliates on a barter basis for clearance as a digital multicast channel. Tribune generates revenue from sale of network inventory to national advertisers as well as the sale of the Tribune stations inventory to local television advertisers. 23

24 Financials Tribune Broadcasting historical financials ($ millions) Revenue Adjusted EBITDA² $1,101 $1,102 $1,128 $1,133 $1,053 $379 $384 $419 $412 $ LTM LTM June 2012 June 2013 % growth 17% 0% 2% (7%) LTM June 2012 LTM June 2013 % margin 34% 35% 37% 36% 35% Capital expenditures 1 Adjusted EBITDA less capital expenditures² $36 $42 $44 $42 $41 $343 $342 $374 $370 $ LTM LTM June 2012 June LTM June 2012 LTM June 2013 % of revenue 3% 4% 4% 4% 4% 90% % conversion 90% 89% 89% 89% Note: Excludes LTV ¹ Includes allocated technology capital expenditures ² See Financial overview section for a reconciliation of Adjusted EBITDA to the most directly comparable financial measure under GAAP Broadcasting represented 35% of the Company s consolidated operating revenues in the 12 months ended June Approximately 80% of these revenues came from the sale of advertising. Changes in advertising revenues are heavily correlated with and influenced by changes in the level of economic activity and the demand for political advertising spots in the United States. Changes in gross domestic product, consumer spending levels, auto sales, political advertising levels, programming content, audience share, and rates all impact demand for advertising on the Company s television stations. The Company s advertising revenues are subject to changes in these factors both on a national level and on a local level in the markets in which it operates. Broadcasting operating revenues also included barter/trade revenues, WGN America carriage revenue, copyright royalties and retransmission consent fees, which represented approximately 5%, 5%, 3% and 4%, respectively, of broadcasting s total operating revenues for the 12 months ended June Advertising Revenue For the 12 months ended June 2013, advertising revenue accounted for approximately 80% of the Broadcasting segment s $1.1 billion of total revenue. Tribune participates in three primary advertising sectors: local and national television spot, network cable (WGN America) and national syndication (Antenna TV and The Bill Cunningham Show). Four advertising categories, including automotive, retail, financial and restaurants, represented about half of total television station advertising revenue. Similar to most television station owners, the automotive category represents the single largest advertising category for Tribune Broadcasting as the auto industry continues to find broadcast television is the most effective way to market cars. Tribune s political advertising revenue typically only accounts for approximately two to three percent of Broadcasting s total revenue in on-cycle years. Traditionally, ABC, CBS and NBC affiliates receive a larger share of political advertising revenue than FOX and CW affiliates, due in part to larger prime-time audiences, network news programming and older skewing audience demographics. In addition, Tribune s largest stations are not located in swing states, which 24