Tribune Posts 4Q Earnings, Considers Sale

Tribune Media today reported fourth quarter 2015 results that included Television and Entertainment segment revenue of $464 million compared to $480.2 million in 4Q 2014, a decrease of 3.4%.

In addition, it announced that it will conduct a review of strategic and financial alternatives “to enhance shareholder value” and has retained two financial advisers, Moelis and Guggenheim. Tribune said “the strategic and financial alternatives under consideration include, but are not limited to, the sale or separation of select lines of business or assets, strategic partnerships, programming alliances and return of capital initiatives.”

President-CEO Peter Liguori said: “Tribune’s assets are valuable, powerful and performing well, as reflected in our full-year 2015 operating results. However, it’s our belief that our current stock price does not reflect the full value of these assets. With the help of outside advisers, we have decided to initiate a process to explore every possible strategic and financial option with one clear goal: to unlock the value of our stock.

The company also announced that it signed a new two-year employment agreement with Liguori, and it also named Chandler Bigelow EVP-CFO and expanded the scope of responsibilities of Tribune Media’s General Counsel, Eddie Lazarus, by naming him chief strategy officer.

In addition, the board of directors authorized a new stock repurchase program under which the company may repurchase up to $400 million of its outstanding Class A common stock. It also declared a quarterly cash dividend of $0.25 per share on the company’s common stock.

Tribune said the 4Q decline in Television and Entertainment segment revenue was driven by a $46.5 million decrease in net political advertising revenues due to 2015 being an off-cycle political year. This decline was partially offset by a $15.9 million, or 27%, increase in retransmission consent revenue; an $8.3 million, or 58%, increase in carriage fee revenue related to higher rates for WGN America distribution; and an $8.1 million, or 2.6%, increase in core advertising revenues.

Television and Entertainment revenues for the full year 2015 were $1,749.6 million, compared to $1,725.6 million for the full year 2014. The increase was driven by a $53.9 million, or 24%, increase in local retransmission consent revenue, a $28.2 million, or 49%, increase in carriage fee revenue related to higher rates for WGN America distribution, and a $21.3 million, or 1.8%, increase in core advertising revenues. These increases were partially offset by a $70.3 million decrease in net political advertising due to 2015 being an off-cycle political year.

Adjusted EBITDA for the fourth quarter of 2015 was $151.2 million, compared to $202.3 million in the fourth quarter of 2014.

For the full year 2015, Adjusted EBITDA was $513.0 million, as compared to $615.3 million for the full year 2014, a decrease of $102.3 million. Adjusted EBITDA for the fourth quarter and the full year 2015 was impacted primarily by lower political advertising revenues and increases in programming expenses. Adjusted EBITDA for the fourth quarter and full year excludes the impairment of goodwill and other intangible assets charge of $385 million and the broadcast rights impairment charge of $74 million described above.

Television and Entertainment adjusted EBITDA for the fourth quarter of 2015 was $151.2 million, compared to $202.3 million in the fourth quarter of 2014. Television and Entertainment broadcast cash flow for the third quarter of 2015 was

Digital and Data segment revenues in the fourth quarter of 2015 were $71.1 million, compared to $60.2 million in the fourth quarter of 2014, an increase of $10.9 million, or 18%. For the full year 2015, segment revenues were $211.5 million, an increase of $42.6 million, as compared to $168.9 million for the full year 2014.

For the company as a whole, Consolidated operating revenues for the fourth quarter of 2015 were $547.6 million compared to $553.4 million in the fourth quarter of 2014, representing a decrease of $5.8 million, or 1%. For the full year 2015, consolidated operating revenues were $2,010.5 million compared to $1,949.4 million for the full year 2014, representing an increase of $61.1 million, or 3.1%.

Liguori commented on the 2015 results: “Revenues grew solidly year-over-year, and we delivered strong adjusted EBITDA despite the off-cycle political year and various programming initiatives. These positive results were driven by core advertising growth across our television group, substantial increases in retransmission consent and carriage fee revenues and continued vigilance on expenses. Importantly, we were able to return more than $1 billion to shareholders last year.

“We are pleased to report that 2016 is off to a good start. Core advertising continues to pace well, and the early trends in political advertising give us confidence. We expect strong revenue and adjusted EBITDA growth this year.”

Read the company’s report here.