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EX-32 - EXHIBIT 32 - MEDIA GENERAL INCexhibit32-63016.htm
EX-31.2 - EXHIBIT 31.2 - MEDIA GENERAL INCexhibit312-63016.htm
EX-31.1 - EXHIBIT 31.1 - MEDIA GENERAL INCexhibit311-63016.htm


UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC. 20549
Form 10-Q
[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended June 30, 2016
OR
[   ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from            to           
Commission file number:         
1-6383

MEDIA GENERAL, INC.
(Exact name of registrant as specified in its charter)
Commonwealth of Virginia
46-5188184
(State or other jurisdiction of 
(I.R.S. Employer
incorporation or organization) 
Identification No.)
 
 
333 E. Franklin St., Richmond, VA
23219
(Address of principal executive offices) 
(Zip Code)
 
(804) 887-5000
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year,
if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes          X          No               
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes          X          No               
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act).
 Larger accelerated filer               X       
 Accelerated filer                                      
 Non-accelerated filer                            
 Smaller reporting company                    
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes                    No          X     
Indicate the number of shares outstanding of each of the issuer's classes of common stock as of August 1, 2016.
Voting Common shares (no par value):       129,323,690




MEDIA GENERAL, INC.
TABLE OF CONTENTS
FORM 10-Q REPORT
June 30, 2016
 
 
 
Page
Part I.
Financial Information
 
 
 
 
 
Item 1.
Financial Statements
 
 
 
 
 
 
 
Consolidated Condensed Balance Sheets – June 30, 2016 and December 31, 2015
 
 
 
 
 
 
Consolidated Condensed Statements of Comprehensive Income – Three and six months ended June 30, 2016 and June 30, 2015
 
 
 
 
 
 
Consolidated Condensed Statements of Cash Flows – Six months ended June 30, 2016 and June 30, 2015
 
 
 
 
 
 
Notes to Consolidated Condensed Financial Statements 
 
 
 
 
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
 
 
 
 
Item 3.
Quantitative and Qualitative Disclosure About Market Risk
 
 
 
 
Item 4.
Controls and Procedures
 
 
 
 
Part II.
Other Information
 
 
 
 
 
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
 
 
 
 
Item 5.
 
Other Information
 
 
 
 
Item 6.
Exhibits
 
 
 
 
 
 
(a)     Exhibits
 
 
 
 
Signatures




PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Media General, Inc.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited, in thousands, except shares)

 
ASSETS
 
 
 
 
June 30,
2016
 
December 31,
2015
Current assets:
 
 
 
Cash and cash equivalents
$
25,378

 
$
41,091

Trade accounts receivable (less allowance for doubtful accounts 2016 - $4,814; 2015 - $4,634)
307,612

 
298,474

Prepaid expenses and other current assets
28,912

 
15,083

Total current assets
361,902

 
354,648

 
 
 


Property and equipment, net of accumulated depreciation (2016 - $179,956 ; 2015 - $145,274)
455,696

 
470,537

Other assets, net
31,225

 
38,070

Definite lived intangible assets, net of accumulated amortization (2016 - $183,625; 2015 - $138,072)
828,945

 
871,129

Broadcast licenses
1,097,100

 
1,097,100

Goodwill
1,544,624

 
1,544,624

Total assets (a)
$
4,319,492

 
$
4,376,108

 
 
See accompanying notes.
 

(a) Consolidated assets as of June 30, 2016 and December 31, 2015, include total assets of variable interest entities (VIEs) of $140 million and $145 million, respectively, which can only be used to settle the obligations of the VIEs. See Note 1 and Note 3.

1



Media General, Inc.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited, in thousands except shares)

LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
June 30,
2016
 
December 31,
2015
Current liabilities:
 
 
 
Trade accounts payable
$
25,477

 
$
35,800

Accrued salaries and wages
28,078

 
21,465

Accrued expenses and other current liabilities
97,052

 
95,500

Current installments of long-term debt
3,373

 
3,804

Current installments of obligation under capital leases
820

 
859

Total current liabilities
154,800

 
157,428

 
 
 
 
Long-term debt, net
2,201,751

 
2,199,110

Deferred tax liability and other long-term tax liabilities
304,665

 
315,234

Long-term capital lease obligations
13,790

 
14,012

Retirement and postretirement plans
176,045

 
182,987

Other liabilities
31,548

 
34,920

Total liabilities (b)
2,882,599

 
2,903,691

 
 
 
 
Commitments and contingencies

 

 
 
 
 
Noncontrolling interests
2,890

 
24,447

 
 
 
 
Stockholders' equity:
 
 
 
Preferred stock (no par value): authorized 50,000,000 shares; none outstanding

 

Common stock (no par value):
 
 
 
Voting common stock, authorized 400,000,000 shares; issued 2016 - 129,322,905 and 2015 - 128,600,384
1,299,327

 
1,305,155

Accumulated other comprehensive loss
(31,224
)
 
(31,224
)
Retained earnings
165,900

 
174,039

Total stockholders' equity
1,434,003

 
1,447,970

Total liabilities, noncontrolling interests and stockholders' equity
$
4,319,492

 
$
4,376,108

 
 
See accompanying notes.

(b) Consolidated liabilities as of June 30, 2016 and December 31, 2015, include total liabilities of VIEs of $34 million and $38 million, respectively, for which the creditors of the VIEs have no recourse to the Company, except for certain of the debt, which the Company guarantees. See Note 1 and Note 3.


2



Media General, Inc.
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME        
(Unaudited, in thousands, except per share amounts)        
 
Three Months Ended
 
Six Months Ended
 
June 30,
2016
 
June 30,
2015
 
June 30,
2016
 
June 30,
2015
Net operating revenue
$
362,706

 
$
320,523

 
$
706,169

 
$
617,257

Operating costs:
 
 
 
 
 
 
 
Operating expenses, excluding depreciation expense
153,599

 
134,169

 
304,742

 
260,045

Selling, general and administrative expenses
76,158

 
79,051

 
154,479

 
159,521

Amortization of program license rights
12,076

 
12,047

 
24,142

 
23,805

Corporate and other expenses
18,101

 
12,366

 
28,453

 
25,017

Depreciation and amortization
40,337

 
42,618

 
80,458

 
82,901

(Gain) loss related to property and equipment, net
87

 
(196
)
 
(681
)
 
(424
)
Merger-related expenses
1,561

 
3,616

 
67,443

 
8,893

Restructuring expenses
996

 

 
4,978

 

Total operating costs
302,915

 
283,671

 
664,014

 
559,758

Operating income
59,791

 
36,852

 
42,155

 
57,499

Other income (expense):
 
 
 
 
 
 
 
Interest expense
(28,529
)
 
(29,288
)
 
(57,085
)
 
(60,311
)
Debt modification and extinguishment costs

 
(1,827
)
 

 
(2,440
)
Other, net
122

 
2,622

 
196

 
5,912

Total other expense
(28,407
)
 
(28,493
)
 
(56,889
)
 
(56,839
)
 
 
 
 
 
 
 
 
Income (loss) before income taxes
31,384

 
8,359

 
(14,734
)
 
660

Income tax benefit (expense)
(12,156
)
 
(3,616
)
 
8,249

 
(459
)
Net income (loss)
$
19,228

 
$
4,743

 
$
(6,485
)
 
201

 


 
 
 
 
 
 
Net income attributable to noncontrolling interests (included above)
730

 
3,108

 
1,207

 
5,999

Net income (loss) attributable to Media General
$
18,498

 
$
1,635

 
$
(7,692
)
 
$
(5,798
)
 


 
 
 
 
 
 
Other comprehensive income

 

 

 

Total comprehensive income (loss) attributable to Media General
$
18,498

 
$
1,635

 
$
(7,692
)
 
$
(5,798
)
 
 
 
 
 
 
 
 
Earnings (loss) per common share (basic and diluted):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net earnings (loss) per common share (basic)
$
0.14

 
$
0.01

 
$
(0.06
)
 
$
(0.04
)
Net earnings (loss) per common share (assuming dilution)
$
0.14

 
$
0.01

 
$
(0.06
)
 
$
(0.04
)
 
See accompanying notes.

3



Media General, Inc.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
 
Six Months Ended
 
June 30,
2016
 
June 30,
2015
Cash flows from operating activities:
 
 
 
Net income (loss)
$
(6,485
)
 
$
201

Adjustments to reconcile net income (loss):
 
 
 
Deferred income tax benefit
(10,569
)
 
(1,041
)
Depreciation and amortization
80,458

 
82,901

Amortization of program license rights
24,142

 
23,805

Amortization of debt premiums, discounts and issue costs
4,241

 
3,702

Gain on disposal of property and equipment, net
(681
)
 
(424
)
Gain on relocation of spectrum

 
(5,620
)
Stock-based compensation
3,861

 
6,860

Debt modification and extinguishment costs

 
2,440

Change in assets and liabilities:
 
 
 
Program license rights, net of liabilities
(24,958
)
 
(23,269
)
Trade accounts receivable
(9,674
)
 
19,854

Company owned life insurance (cash surrender value less policy loans including repayments)
(895
)
 
(347
)
Trade accounts payable, accrued expenses and other liabilities
(2,099
)
 
(8,599
)
Prepaid expenses and other assets, net
(12,956
)
 
6,247

Retirement and postretirement plans
(6,942
)
 
(7,020
)
Other, net
1,263

 
(3,302
)
Net cash provided by operating activities
38,706

 
96,388

Cash flows from investing activities:
 
 
 
Capital expenditures
(24,314
)
 
(24,050
)
Release of restricted cash at qualified intermediary

 
119,903

Proceeds from the sale of property and equipment
6,072

 
691

Proceeds from spectrum relocation

 
3,120

Other, net
(114
)
 
(69
)
Net cash (used) provided by investing activities
(18,356
)
 
99,595

Cash flows from financing activities:
 
 
 
Borrowings under Media General Revolving Credit Facility
60,000

 

Repayments under Media General Revolving Credit Facility
(60,000
)
 

Repayment of borrowings under Media General Credit Agreement

 
(135,000
)
Repayment of borrowings under Shield Media Credit Agreement
(1,600
)
 
(1,200
)
Repayment of other borrowings
(431
)
 
(580
)
Repurchase of shares

 
(18,747
)
Payment for acquisition of noncontrolling interest
(35,305
)
 
(9,218
)
Cash paid for debt modification

 
(3,425
)
Exercise of stock options
1,714

 
1,817

Other, net
(441
)
 
(1,472
)
Net cash used by financing activities
(36,063
)
 
(167,825
)
Net (decrease) increase in cash and cash equivalents
(15,713
)
 
28,158

Cash and cash equivalents at beginning of period
41,091

 
43,920

Cash and cash equivalents at end of period
$
25,378

 
$
72,078

Cash paid for interest
$
52,894

 
$
63,724

Cash paid for income taxes, net
$
2,023


$
3,838

Cash paid for Meredith termination fee
$
60,000

 
$

See accompanying notes.

4



MEDIA GENERAL, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
 

Note 1: Basis of Presentation
 
The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States and with applicable quarterly reporting regulations of the Securities and Exchange Commission. They do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements and, accordingly, should be read in conjunction with the consolidated financial statements and related footnotes included in the Annual Report on Form 10-K of Media General, Inc. ("Media General" or the "Company") for the year ended December 31, 2015. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of interim financial information have been included.
 
In September 2015, the Company announced a merger agreement under which the Company would have acquired all of the outstanding common stock of Meredith Corporation (“Meredith”) in a cash and stock transaction. Later in September of 2015 the Company received an unsolicited proposal from Nexstar Broadcasting Group, Inc. (“Nexstar”) to acquire all of the outstanding common stock of Media General. Following discussion between the various parties, in January 2016 Media General terminated its agreement with Meredith with Media General paying Meredith a $60 million termination fee and providing Meredith with an opportunity to negotiate for the purchase of certain broadcast and digital assets owned by the Company. Immediately thereafter, the Company entered into an agreement with Nexstar whereby Nexstar will acquire all outstanding shares of Media General for $10.55 per share in cash, 0.1249 shares of Nexstar Class A common stock for each Media General share and a contingent value right (CVR). The cash consideration and the stock consideration are fixed amounts and do not increase or decrease based upon the proceeds (if any) from the disposition of either Nexstar's or Media General's spectrum in the Federal Communications Commission's ("FCC") Incentive Auction. Upon the completion of the transaction, Nexstar will change its name to Nexstar Media Group. Each CVR will entitle Media General shareholders to a pro rata share of the net cash proceeds as received from the sale of Media General's spectrum in the FCC's Incentive Auction. It is estimated that Media General shareholders will own approximately 34% and existing Nexstar shareholders will retain approximately 66% ownership of the combined company after closing. The closing of the transaction is subject to the satisfaction of a number of conditions including, but not limited to, the approval of various matters relating to the transaction by Media General and Nexstar shareholders, the approval of the FCC, clearance under the Hart-Scott-Rodino antitrust act and certain third party consents. Merger-related expenses for legal and professional fees for the Meredith and Nexstar transactions totaled $1.3 million for the three months ended June 30, 2016. Merger-related expenses for the Meredith termination fee, legal and professional fees for the Meredith and Nexstar transactions totaled $67 million for the six months ended June 30, 2016.

In connection with the Nexstar transaction, Nexstar and its respective subsidiaries, as applicable, have entered into definitive agreements to divest Nexstar's WCWJ station in Jacksonville, Florida and the Company's WSLS-TV station in Roanoke-Lynchburg, Virginia to Graham Media Group, Inc.; Nexstar's KADN-TV and KLAF-LD stations in Lafayette, Louisiana to Bayou City Broadcasting Lafayette, Inc.; Nexstar's KREG-TV station in Denver, Colorado to Marquee Broadcasting, Inc.; the Company's WBAY-TV station in Green Bay, Wisconsin and KWQC-TV station in Davenport-Moline-Rock Island, Iowa to Gray Television Group, Inc.; the Company's KIMT station in Rochester, Minnesota, WTHI-TV station in Terre Haute, Indiana, WLFI-TV station in Lafayette, Indiana, as well as Nexstar's WFFT-TV station in Ft. Wayne, Indiana and KQTV station in Saint Joseph, Missouri to USA Television MidAmerica Holdings, LLC; and the Company's KASA-TV station in Albuquerque, New Mexico to Ramar Communications, Inc. The Company expects that the sales of these stations will occur substantially concurrent with the closing of the transaction with Nexstar, which is expected to occur later this year.

The consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries and certain variable interest entities (“VIE”) for which the Company is considered to be the primary beneficiary. Intercompany accounts and transactions have been eliminated in consolidation. In determining whether the Company is the primary beneficiary of a VIE for financial reporting purposes, the Company considers whether it has the power to direct certain activities of the VIE that most significantly impact the economic performance of the VIE and whether it has the obligation to absorb losses or the right to receive returns that would be significant to the VIE.  Assets of consolidated VIE’s can only be used to settle the obligations of that VIE.  As discussed in Note 3, the Company consolidates the results of WXXA, WLAJ, WBDT, WYTV, KTKA, KWBQ, KRWB, and KASY pursuant to the VIE accounting guidance. All of the liabilities are non-recourse to the Company, except for certain of the debt, which the Company guarantees. The Company is also the primary beneficiary of the VIE that holds the Supplemental 401(k) Plan’s investments and consolidates the plan accordingly.


5



The Company has two reportable segments, “Broadcast” and “Digital” that are disclosed separately from our corporate activities. The Broadcast segment includes 71 television stations that are either owned, operated or serviced by the Company in 48 markets, all of which are engaged principally in the sale of television advertising. The Digital segment includes the operating results of the Company's digital businesses as well as the business operations related to the television station companion websites.
 
The Company guarantees all of the debt of LIN Television Corporation ("LIN Television", a wholly owned subsidiary of the Company) and the debt of its consolidated VIEs. LIN Television guarantees all of the debt of its restricted wholly owned subsidiaries and the debt of its consolidated VIEs. All of the consolidated wholly owned subsidiaries of LIN Television fully and unconditionally guarantee LIN Television's 5.875% Senior Notes due 2022 (the “2022 Notes”) and the 6.375% Senior Notes due 2021 (the "2021 Notes") on a joint-and-several basis, subject to customary release provisions.
     
In May 2014, the Financial Accounting Standards Board (“FASB”) and the International Accounting Standards Board (“IASB”) issued a converged standard on revenue recognition from contracts with customers, Accounting Standards Update ("ASU") 2014-09 (Topic 606 and IFRS 15). This standard will supersede nearly all existing revenue recognition guidance. In August 2015 the FASB issued ASU 2015-14, Revenue From Contracts With Customers: Deferral of the Effective Date which defers the effective date of ASU 2014-09 until fiscal years, and interim periods within those years, beginning after December 15, 2017. In April and May 2016, the Board issued accounting standard updates, 2016-10 - Identifying Performance Obligations and Licensing, and 2016-12 - Revenue From Contracts with Customers (Topic 606); Narrow-Scope Improvements and Practical Expedients, respectively. Collectively, these updates, along with ASU 2014-09 and ASU 2015-14 form the new revenue recognition standard that is to be effective for fiscal years beginning after December 15, 2017, with early adoption permitted for fiscal years beginning after December 15, 2016. The Company is currently evaluating the impact this guidance will have on its financial condition, results of operations and cash flows.

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs ("ASU 2015-03"). ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. ASU 2015-03 is effective for annual periods beginning on or after December 15, 2015. The Company adopted this guidance as of January 1, 2016 and $28.9 million was reclassified to reduce "Long-term Debt" as of June 30, 2016. In order to conform to the presentation adopted, $32.2 million was reclassified from "Other assets, net" to "Long-term Debt" in the 2015 figures presented on the Consolidated Condensed Balance Sheets and in Note 10 Guarantor Financial Information. Approximately $285 thousand was reclassified from "Other assets, net" to "Long-term Debt" in the 2015 figures presented in Note 3 Variable Interest Entities.

In February 2016, the FASB issued ASU 2016-02, Leases, which requires the lease rights and obligations arising from lease contracts, including existing and new arrangements, to be recognized as assets and liabilities on the balance sheet. ASU 2016-02 is effective for reporting periods beginning after December 15, 2018 with early adoption permitted. The Company is currently evaluating the impact that this guidance will have on its consolidated financial statements.

In March 2016, the FASB released ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The ASU includes multiple provisions intended to simplify various aspects of the accounting for share-based payments. The Company is currently evaluating the impact that this guidance will have on its consolidated financial statements. The ASU is effective for public companies in annual periods beginning after December 15, 2016, and interim periods within those years.

Note 2: Segment Information
 
The Company has two reportable operating segments, “Broadcast” and “Digital” that are disclosed separately from our corporate activities. The Broadcast segment includes 71 television stations that are either owned, operated or serviced by the Company in 48 U.S. markets, all of which are engaged principally in the sale of television advertising. The Digital segment includes the operating results of the digital companies (Federated Media and HYFN) as well as the business operations related to the television station companion websites. Unallocated corporate expenses primarily include costs to operate as a public company and to operate corporate locations.
 
The Company identifies operating segments based on how the chief operating decision maker (“CODM”) allocates resources, assesses performance and makes decisions. The CODM is the President, and Chief Executive Officer. The CODM evaluates performance and allocates resources based on operating income or loss for the Broadcast and Digital segments, excluding non-segment expenses.
 

6



 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(in thousands)
 
2016
 
2015
 
2016
 
2015
Revenues
 
 
 
 
 
 
 
 
Broadcast
 
$
319,661

 
$
284,102

 
$
625,254

 
$
550,586

Digital
 
43,045

 
36,421

 
80,915

 
66,671

Revenues
 
$
362,706

 
$
320,523

 
$
706,169

 
$
617,257

 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(in thousands)
2016
 
2015
 
2016
 
2015
Operating income
 
 
 
 
 
 
 
Broadcast
$
117,665

 
$
96,165

 
$
221,281

 
$
176,986

Digital
3,208

 
(909
)
 
1,525

 
(3,100
)
Segment operating income
120,873

 
95,256

 
222,806

 
173,886

Corporate and other expenses
(18,101
)
 
(12,366
)
 
(28,453
)
 
(25,017
)
Depreciation and amortization
(40,337
)
 
(42,618
)
 
(80,458
)
 
(82,901
)
Gain (loss) related to property and equipment, net
(87
)
 
196

 
681

 
424

Merger-related expenses
(1,561
)
 
(3,616
)
 
(67,443
)
 
(8,893
)
Restructuring expenses
(996
)
 

 
(4,978
)
 

Operating income
$
59,791

 
$
36,852

 
$
42,155

 
$
57,499


 

Note 3: Variable Interest Entities
 
Certain of the Company's broadcast stations provide services to other station owners within the same market via Joint Sales Agreements ("JSA") and/or Shared Service Agreements ("SSA"). The Company has JSA and/or SSA agreements with 8 stations. Depending on the specific terms of these agreements, the Company may provide a variety of operational and administrative services, assume an obligation to reimburse certain expenses of the stations and guarantee certain external borrowings by the station parent companies (refer to Note 4 for guaranteed borrowings). The Company is compensated for these services through performance based and/or administrative fees. Under certain JSAs, the Company has an option to acquire the related station at any time, subject to FCC consent, until the expiration of the applicable JSA. The Company has determined that the stations with which it has JSAs and/or SSAs, and certain of their parent companies, are VIEs as a result of the terms of the agreements.

The Company is the primary beneficiary of the VIEs, because (a) subject to the ultimate control of the broadcast licensees, the Company has the power to direct the activities which significantly impact the economic performance of the VIEs through the services the Company provides and (b) the Company absorbs returns and losses which would be considered significant to the VIEs. Therefore, the financial results and financial position of these entities have been consolidated by the Company in accordance with the VIE accounting guidance.

The carrying amounts and classification of the assets and liabilities of the consolidated VIE entities described above, which have been included in the consolidated balance sheets as of June 30, 2016 and December 31, 2015, were as follows:
 

7



(In thousands)
June 30,
2016
 
December 31,
2015
Assets
 
 
 
Current assets
 
 
 
Cash and cash equivalents
$
4,714

 
$
3,693

Trade accounts receivable (less allowance for doubtful accounts 2016 - $89; 2015 - $94)
8,167

 
9,798

Prepaid expenses and other current assets
663

 
796

Total current assets
13,544

 
14,287

Property and equipment, net
1,923

 
1,904

Other assets, net
656

 
3,094

Definite lived intangible assets, net
30,714

 
32,244

Broadcast licenses
71,300

 
71,300

Goodwill
21,859

 
21,859

Total assets
$
139,996

 
$
144,688

Liabilities
 
 
 
Current liabilities
 
 
 
Trade accounts payable
$
8

 
$
16

Other accrued expenses and other current liabilities
1,878

 
2,221

Current installments of long-term debt
3,373

 
3,804

Total current liabilities
5,259

 
6,041

Long-term debt, net
22,486

 
24,062

Other liabilities
5,832

 
8,310

Total liabilities
$
33,577

 
$
38,413


The assets of the Company’s consolidated VIEs can only be used to settle the obligations of the VIEs and may not be sold, or otherwise disposed of, except for assets sold or replaced with others of like kind or value. At June 30, 2016, the Company has an option to acquire the assets or member's interest of the VIE entities that it may exercise if the FCC attribution rules change to permit the Company to acquire such interest. The option exercise price is of nominal value and significantly less than the carrying value of their tangible and intangible net assets. The options are carried at zero on the Company’s consolidated balance sheet, as any value attributable to the options is eliminated in the consolidation of the VIEs. In May 2016, the United States Court of Appeals for the Third Circuit vacated the FCC's 2014 rule attributing JSAs for purposes of the media ownership rules if they permitted a television licensee to sell more than 15% of the commercial inventory of a television station owned by a third party in the same market. The Third Circuit also required the FCC to issue a quadrennial review order addressing the agency's media ownership rules by the end of 2016. Accordingly, the Company continues to monitor regulatory developments regarding its JSA and SSA arrangements.




8



Note 4: Debt and Other Financial Instruments
 
Long-term debt at June 30, 2016 and December 31, 2015, was as follows:
 
(In thousands)
June 30, 2016
 
December 31, 2015
Media General Credit Agreement
$
1,541,000

 
$
1,541,000

2022 Notes
400,000

 
400,000

2021 Notes
275,000

 
275,000

Shield Media Credit Agreement
25,600

 
27,200

Other borrowings
520

 
950

Total debt
2,242,120

 
2,244,150

Less: net unamortized discount
(8,071
)
 
(8,992
)
Less: scheduled current maturities
(3,373
)
 
(3,804
)
Less: unamortized debt issuance fees
(28,925
)
 
(32,244
)
Long-term debt excluding current maturities
$
2,201,751

 
$
2,199,110

 
Media General Credit Agreement
 
In July 2013, the Company entered into a credit agreement with a syndicate of lenders to provide the Company with a term loan and access to a revolving credit facility. The funds borrowed under the credit agreement and subsequent amendments (together the "Credit Agreement") have been used by the Company to facilitate acquisitions and mergers. The term loan under the Credit Agreement matures in July 2020 and bears interest at LIBOR (with a floor of 1%) plus a margin of 3%.
 
There were no principal repayments on the term loan during the three and six months ended June 30, 2016. The Company repaid $100 million and $135 million of principal on the term loan during the three and six months ended June 30, 2015, respectively. The early repayment of debt resulted in debt extinguishment costs of $1.8 million and $2.4 million during the three and six months ended June 30, 2015, respectively, due to the accelerated recognition of deferred debt-related items. As of June 30, 2016, there was $1.5 billion outstanding under the Credit Agreement.
 
The revolving credit facility under the Credit Agreement also includes revolving credit commitments of $150 million. The revolving credit facility matures in October 2019, bears an interest rate of LIBOR plus a margin of 2.50% and is subject to a 0.5% commitment fee per annum with respect to the undrawn portion of the facility. The Company has $146 million of availability under the revolving credit facility (giving effect to $3.6 million of letters of credit which have been issued but are undrawn).
 
Shield Media Credit Agreement
 
Shield Media LLC (and its subsidiary WXXA) and Shield Media Lansing LLC (and its subsidiary WLAJ) (collectively, “Shield Media”), companies that control subsidiaries with which the Company has joint sales and shared services arrangements as described in Note 3, entered into a credit agreement for two of its stations with a syndicate of lenders, dated July 31, 2013. The term loans outstanding under this agreement mature in July 2018 and bear interest at LIBOR plus a margin of 3%. The Shield Media term loans are guaranteed by the Company and are secured by liens on substantially all of the assets of the Company, on a pari passu basis with the Credit Agreement. The Company repaid $0.8 million and $1.6 million of principal on the term loan during the three and six months ended June 30, 2016, respectively. The Company repaid $0.6 million and $1.2 million of principal on the term loan during the three and six months ended June 30, 2015, respectively.

2022 Notes
 
On November 5, 2014, the Company's predecessor, MGOC, Inc. ("Old Media General") completed the issuance of $400 million in aggregate principal amount of 5.875% Senior Unsecured Notes due in 2022 (the “2022 Notes”) in connection with the financing of the Old Media General's combination (the "LIN Merger") with LIN Media, LLC ("LIN Media"). The net proceeds from the offering of the 2022 Notes were used to repay certain indebtedness of LIN Media in connection with the LIN Merger, including the satisfaction and discharge of LIN Television’s $200 million aggregate principal amount of 8.375% Senior Notes due 2018 and the payment of related fees and expenses. The 2022 Notes were issued under an indenture, dated as of November 5, 2014 (the “2022 Notes Indenture”). Media General, as the direct parent of LIN Television, and certain of the wholly owned subsidiaries of LIN Television provide full and unconditional guarantees to the 2022 Notes, on a senior basis.


9



2021 Notes
 
LIN Television’s previously issued 6.375% Senior Notes due 2021 (the "2021 Notes") remained outstanding as of the consummation of the LIN Merger. Following the consummation of the LIN Merger, Media General, as the direct parent of LIN Television, and certain of the wholly owned subsidiaries of LIN Television provide full and unconditional guarantees of the 2021 Notes, on a senior basis. The Company received an unsolicited offer and repaid $15 million of principal at an $800 thousand premium during the year ended December 31, 2015. No principal payments were made during the three and six months ended June 30, 2016. As of June 30, 2016, the aggregate principal amount outstanding under the 2021 Notes was $275 million.
 
Fair Value
 
The following table includes information about the carrying values and estimated fair values of the Company’s financial instruments at June 30, 2016 and December 31, 2015:
 
 
June 30, 2016
 
December 31, 2015
 
Carrying
 
Fair
 
Carrying
 
Fair
(In thousands)
Amount
 
Value
 
Amount
 
Value
Assets:
 
 
 
 
 
 
 
Investments
 
 
 
 
 
 
 
Trading securities
$
428

 
$
428

 
$
257

 
$
257

Liabilities:
 
 
 
 
 
 
 
Long-term debt:
 
 
 
 
 
 
 
Media General Credit Agreement
1,510,887

 
1,539,254

 
1,507,182

 
1,529,229

2022 Notes
393,070

 
403,899

 
392,527

 
404,344

2021 Notes
275,307

 
296,407

 
275,340

 
288,228

Shield Media Credit Agreement
25,340

 
25,340

 
26,915

 
27,200

Other borrowings
520

 
520

 
950

 
950

 
Trading securities held by the Supplemental 401(k) Plan are carried at fair value and are determined by reference to quoted market prices.
 
The fair values of the 2021 and 2022 Notes were determined by reference to the most recent trading prices. The fair value of all other debt instruments was determined using discounted cash flow analysis and an estimate of the current borrowing rate.

Under the fair value hierarchy, the Company’s trading securities fall under Level 1 (quoted prices in active markets), the 2021 and 2022 Notes fall under Level 2 (other observable inputs) and the Media General Credit Agreement, Shield Media Credit Agreement and Other Borrowings fall under Level 3 (unobservable inputs).

Note 5: Taxes on Income
 
The effective tax rate was 38.7% in the second quarter of 2016 as compared to 43.3% in the second quarter of 2015 and 56.0% in the first six months of 2016 as compared to 69.6% in the equivalent prior-year period. The lower tax rate is primarily due to a discrete tax benefit recorded in the first quarter of 2016 related to merger-related expenses recorded in the prior year as well as the relative levels of favorable book/tax differences compared to the pre-tax loss.  In 2016 the Company adopted Approach I as defined under ASC 740 with respect to merger-related expenses and has provided tax benefit on “sell-side” merger expenses until the proposed transaction is finalized.  Ultimately, some of these expenses may be non-deductible. The tax expense in both years was predominantly non-cash due to the Company’s significant net operating loss carryover.  Current tax expense was approximately $1.4 million and $1.3 million for the second quarter of 2016 and 2015, respectively, and was approximately $2.3 million and $1.5 million in the first six months of 2016 and 2015, respectively; it was attributable primarily to state income taxes.
 

10



Note 6: Earnings Per Share
 
The following tables set forth the computation of basic and diluted income per share for the three and six months ended June 30, 2016 and 2015:
 
Three Months Ended June 30, 2016
 
Three Months Ended June 30, 2015
(In thousands, except
Income
 
Shares
 
Per Share
 
Income
 
Shares
 
Per Share
per share amounts)
(Numerator)
 
(Denominator)
 
Amount
 
(Numerator)
 
(Denominator)
 
Amount
Net income attributable to Media General
$
18,498

 
 

 
 

 
$
1,635

 
 

 
 

 
 
 
 
 
 
 
 
 
 
 
 
Undistributed earnings attributable to participating securities
(50
)
 
 

 
 

 
(4
)
 
 

 
 

 
 
 
 
 
 
 
 
 
 
 
 
Basic EPS
 
 
 
 
 
 
 
 
 
 
 
Income attributable to common stockholders
$
18,448

 
129,032

 
$
0.14

 
$
1,631

 
129,201

 
$
0.01

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effect of dilutive securities:
 
 
 
 
 
 
 
 
 
 
 
Stock options and warrants
 

 
938

 
 

 
 

 
1,435

 
 

 
 
 
 
 
 
 
 
 
 
 
 
Diluted EPS
 
 
 
 
 
 
 
 
 
 
 
Income attributable to common stockholders
$
18,448

 
129,970

 
$
0.14

 
$
1,631

 
130,636

 
$
0.01



 
Six Months Ended June 30, 2016
 
Six Months Ended June 30, 2015
(In thousands, except
Income
 
Shares
 
Per Share
 
Income
 
Shares
 
Per Share
per share amounts)
(Numerator)
 
(Denominator)
 
Amount
 
(Numerator)
 
(Denominator)
 
Amount
Net loss attributable to Media General
$
(7,692
)
 
 

 
 

 
$
(5,798
)
 
 

 
 

 
 
 
 
 
 
 
 
 
 
 
 
Undistributed earnings attributable to participating securities

 
 

 
 

 

 
 

 
 

 
 
 
 
 
 
 
 
 
 
 
 
Basic EPS
 
 
 
 
 
 
 
 
 
 
 
Loss attributable to common stockholders
$
(7,692
)
 
128,817

 
$
(0.06
)
 
$
(5,798
)
 
129,275

 
$
(0.04
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effect of dilutive securities:
 
 
 
 
 
 
 
 
 
 
 
Stock options and warrants
 

 

 
 

 
 

 

 
 

 
 
 
 
 
 
 
 
 
 
 
 
Diluted EPS
 
 
 
 
 
 
 
 
 
 
 
Loss attributable to common stockholders
$
(7,692
)
 
128,817

 
$
(0.06
)
 
$
(5,798
)
 
129,275

 
$
(0.04
)


11



For the six month periods ended June 30, 2016 and 2015, we have excluded from the calculation of diluted earnings per share 1.1 million and 1.5 million, respectively, of common shares issuable for share options and restricted shares, because the net loss causes these shares to be anti-dilutive.

Note 7: Retirement and Postretirement Plans
 
The Company has a funded, qualified non-contributory defined benefit retirement plan which covers substantially all Legacy Media General employees hired before 2007 along with defined benefit retirement plans for KRON-TV and LIN that were merged into the Media General qualified plan on December 31, 2014 and December 31, 2015, respectively. Additionally the Company also has non-contributory unfunded supplemental executive retirement and ERISA excess plans which supplement the coverage available to certain executives. All of these retirement plans are frozen. The Company has a retiree medical savings account plan which reimburses eligible retired employees for certain medical expenses and an unfunded plan that provides certain health and life insurance benefits to retired employees who were hired prior to 1992.

     The following tables provide the components of net periodic benefit cost (income) for the Company’s benefit plans for the second quarters and first six months of 2016 and 2015:

 
Three Months Ended
 
Pension Benefits
 
Other Benefits
(In thousands)
June 30,
2016
 
June 30,
2015
 
June 30,
2016
 
June 30,
2015
Service cost
$

 
$

 
$

 
$
40

Interest cost
4,650

 
4,056

 
200

 
390

Expected return on plan assets
(6,950
)
 
(5,472
)
 

 

Amortization of net loss

 
142

 
(25
)
 

Net periodic benefit (income) cost
$
(2,300
)
 
$
(1,274
)
 
$
175

 
$
430


 
Six Months Ended
 
Pension Benefits
 
Other Benefits
(In thousands)
June 30,
2016
 
June 30,
2015
 
June 30,
2016
 
June 30,
2015
Service cost
$

 
$

 
$

 
$
50

Interest cost
9,300

 
11,456

 
400

 
500

Expected return on plan assets
(13,900
)
 
(15,453
)
 

 

Amortization of net loss

 
400

 
(50
)
 

Net periodic benefit (income) cost
$
(4,600
)
 
$
(3,597
)
 
$
350

 
$
550



12



Note 8: Stockholders’ Equity
 
The following table shows the components of the Company’s stockholders’ equity as of and for the six months ended June 30, 2016:
 
 
 
 
Accumulated
 
 
 
 
 
 
 
Other
 
 
 
Total
 
Common
 
Comprehensive
 
Retained
 
Stockholders'
(In thousands)
Stock
 
Loss
 
Earnings
 
Equity
Balance at December 31, 2015
$
1,305,155

 
$
(31,224
)
 
$
174,039

 
$
1,447,970

Net loss attributable to Media General

 

 
(7,692
)
 
(7,692
)
Exercise of stock options
1,714

 

 

 
1,714

Stock-based compensation
3,861

 

 

 
3,861

Revaluation of redeemable noncontrolling interest
(12,094
)
 

 
(447
)
 
(12,541
)
Other
691

 

 

 
691

Balance at June 30, 2016
$
1,299,327

 
$
(31,224
)
 
$
165,900

 
$
1,434,003


The following table shows the components of the Company’s stockholders’ equity as of and for the six months ended June 30, 2015:

 
 
 
Accumulated
 
 
 
 
 
 
 
Other
 
 
 
Total
 
Common
 
Comprehensive
 
Retained
 
Stockholders'
(In thousands)
Stock
 
Income
 
Earnings
 
Equity
Balance at December 31, 2014
$
1,322,284

 
$
(36,445
)
 
$
214,582

 
$
1,500,421

Net loss attributable to Media General

 

 
(5,798
)
 
(5,798
)
Exercise of stock options
1,211

 

 

 
1,211

Stock-based compensation
6,860

 

 

 
6,860

Revaluation of redeemable noncontrolling interest

 

 
(1,431
)
 
(1,431
)
Repurchases of Voting Common Stock
(18,747
)
 

 

 
(18,747
)
Other
(467
)
 

 

 
(467
)
Balance at June 30, 2015
$
1,311,141

 
$
(36,445
)
 
$
207,353

 
$
1,482,049

 

13



 
Note 9: Other
 
Restructuring activities

In the first quarter of 2016, the Company took additional steps under a plan to restructure certain digital segment operations that began in September 2015. The plan is expected to save the Company approximately $14.7 million in operating costs annually based on the steps completed since plan inception and the cumulative expense incurred is $4 million. The Company recorded restructuring expense of $2.4 million related to the plan during the six months ended June 30, 2016. The restructuring income for the period was a result of adjustments within the period to the severance and lease termination liabilities. Year-to-date restructuring expense was comprised of $1.8 million of severance and $563 thousand of lease termination charges.

On October 16, 2009, Media General entered into a Joint Sales Agreement (“JSA”) and Shared Services Agreement (“SSA”) with Schurz Communications, Inc and WAGT Television, Inc.   Pursuant to the JSA and SSA, Media General provided certain services and sold advertising time for WAGT. In February 2016, Schurz Communications, Inc. sold WAGT to Gray Television Group, Inc., ("Gray") and assigned the JSA and SSA to Gray. However, upon the closing of the station sale, WAGT ceased performance of the agreements. For the six months ended June 30, 2016, the Company recorded restructuring charges of $2.6 million for WAGT. As of June 30, 2016, Media General has pending legal causes of action against Gray, Schurz Communications, Inc. and WAGT Television, Inc., including but not limited to, causes of action for breach of contract. The Company has agreed to stay this litigation pending the closing of the Nexstar merger and the divestiture of certain stations with Gray (as discussed in Note 1). If the transactions close, the parties will dismiss all claims and counterclaims with no additional consideration for either party. If not, the parties may resume the litigation. Subsequent to the end of the quarter, the Company paid $700 thousand to the FCC to settle issues related to WAGT. This amount was accrued in the second quarter and reflected in the "Contract termination and other accruals" line on the accrued restructuring chart below.

The following tables present the activity associated with the June 30, 2016 balance of the restructuring liability and the nature and amount of exit charges incurred in the six months ended June 30, 2016:
 
As of June 30, 2016
(In thousands)
Digital
WAGT
Total
Accrued restructuring as of December 31, 2015
$
1,312

$

$
1,312

Severance charges
1,760

383
2,143

Contract termination and other accruals
563

978
1,541

Cash severance and contract termination payments
(2,350
)
(401
)
(2,751
)
Accrued restructuring as of June 30, 2016
$
1,285

$
960

$
2,245





 
Six months ended June 30, 2016
(In thousands)
Digital
WAGT
Total
Severance charges
$
1,760

$
383

$
2,143

Contract termination charges
563

168

731

Asset impairment

298

298

Legal fees

900

900

Other
45

861

906

Total restructuring expense
$
2,368

$
2,610

$
4,978


Acquisition of HYFN

In April 2016, the Company acquired the remaining shares of HYFN, a full service digital advertising agency for a purchase price of approximately $35 million plus one-time compensation expense of $7 million related to the transaction for a total cash outflow of $42 million. The $7 million of one-time compensation expenses is included in "Corporate and other expenses" on the Consolidated Condensed Statement of Comprehensive Income. Prior to the transaction, the Company held 50.1% of the outstanding shares of HYFN. As a result of the transaction, HYFN is 100% owned by the Company beginning with the second quarter of 2016.

14



 
Note 10: Guarantor Financial Information
 
LIN Television, a 100% owned subsidiary of Media General, is the primary obligor of the 2021 Notes and 2022 Notes. Media General fully and unconditionally guarantees all of LIN Television’s obligations under the 2021 Notes and the 2022 Notes on a joint and several basis. Additionally, all of the consolidated 100% owned subsidiaries of LIN Television fully and unconditionally guarantee LIN Television’s obligations under the 2021 Notes and 2022 Notes on a joint and several basis. There are certain limitations in the ability of the subsidiaries to pay dividends to Media General. The following financial information presents condensed consolidating balance sheets, statements of operations, and statements of cash flows for Media General, LIN Television (as the issuer), the Guarantor Subsidiaries, and the Non-Guarantor Subsidiaries, together with certain eliminations.


15



Media General, Inc.
Condensed Consolidating Balance Sheet
June 30, 2016
(in thousands)
 
Media General
 
LIN Television Corporation
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated
ASSETS
 
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$

 
$

 
$
20,659

 
$
4,719

 
$

 
$
25,378

Trade accounts receivable, net

 
82,711

 
216,734

 
8,167

 

 
307,612

Prepaid expenses and other current assets

 
2,667

 
25,582

 
663

 

 
28,912

Total current assets

 
85,378

 
262,975

 
13,549

 

 
361,902

Property and equipment, net

 
151,810

 
301,963

 
1,923

 

 
455,696

Other assets, net

 
540

 
29,604

 
1,081

 

 
31,225

Definite lived intangible assets, net

 
351,432

 
446,799

 
30,714

 

 
828,945

Broadcast licenses

 

 
1,025,800

 
71,300

 

 
1,097,100

Goodwill

 
527,077

 
995,688

 
21,859

 

 
1,544,624

Advances to consolidated subsidiaries

 
(238,532
)
 
235,061

 
3,471

 

 

Investment in consolidated subsidiaries
1,434,003

 
1,324,524

 

 

 
(2,758,527
)
 

Total assets
$
1,434,003

 
$
2,202,229

 
$
3,297,890

 
$
143,897

 
$
(2,758,527
)
 
$
4,319,492

 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
 
 
Trade accounts payable
$

 
$
753

 
$
24,716

 
$
8

 
$

 
$
25,477

Accrued salaries and wages

 
6,058

 
21,820

 
200

 

 
28,078

Accrued expenses and other current liabilities

 
19,912

 
75,462

 
1,678

 

 
97,052

Current installments of long-term debt

 

 

 
3,373

 

 
3,373

Current installments of obligation under capital leases

 
574

 
246

 

 

 
820

Total current liabilities

 
27,297

 
122,244

 
5,259

 

 
154,800

Long-term debt, net

 
668,377

 
1,510,888

 
22,486

 

 
2,201,751

Deferred tax liability and other long-term tax liabilities

 
58,961

 
245,704

 

 

 
304,665

Long-term capital lease obligations

 
12,848

 
942

 

 

 
13,790

Retirement and postretirement plans

 

 
176,045

 

 

 
176,045

Other liabilities

 
743

 
25,999

 
4,806

 

 
31,548

Total liabilities

 
768,226

 
2,081,822

 
32,551

 

 
2,882,599

 
 
 
 
 
 
 
 
 
 
 
 
Noncontrolling interests

 

 

 
2,890

 

 
2,890

 
 
 
 
 
 
 
 
 
 
 
 
Total stockholders (deficit) equity
1,434,003

 
1,434,003

 
1,216,068

 
108,456

 
(2,758,527
)
 
1,434,003

Total liabilities, noncontrolling interest and stockholders' equity (deficit)
$
1,434,003

 
$
2,202,229

 
$
3,297,890

 
$
143,897

 
$
(2,758,527
)
 
$
4,319,492



16



Media General, Inc.
Condensed Consolidating Balance Sheet
December 31, 2015
(in thousands)
 
Media General
 
LIN Television Corporation
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated
ASSETS
 
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$

 
$
1,103

 
$
35,925

 
$
4,063

 
$

 
$
41,091

Trade accounts receivable, net

 
75,866

 
192,306

 
30,302

 

 
298,474

Prepaid expenses and other current assets

 
3,264

 
10,441

 
1,378

 

 
15,083

Total current assets

 
80,233

 
238,672

 
35,743

 

 
354,648

Property and equipment, net

 
158,627

 
309,160

 
2,750

 

 
470,537

Other assets, net

 
7,199

 
27,523

 
3,348

 

 
38,070

Definite lived intangible assets, net

 
368,011

 
458,261

 
44,857

 

 
871,129

Broadcast licenses

 

 
1,025,800

 
71,300

 

 
1,097,100

Goodwill

 
527,077

 
924,708

 
92,839

 

 
1,544,624

Advances to consolidated subsidiaries

 
(206,396
)
 
223,051

 
(16,655
)
 

 

Investment in consolidated subsidiaries
1,447,970

 
1,319,392

 

 

 
(2,767,362
)
 

Total assets
$
1,447,970

 
$
2,254,143

 
$
3,207,175

 
$
234,182

 
$
(2,767,362
)
 
$
4,376,108

 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
 
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
 
 
 
 
Trade accounts payable
$

 
$
2,010

 
$
30,689

 
$
3,101

 
$

 
$
35,800

Accrued salaries and wages

 
2,022

 
19,016

 
427

 

 
21,465

Accrued expenses and other current liabilities

 
23,237

 
68,101

 
4,162

 

 
95,500

Current installments of long-term debt

 

 

 
3,804

 

 
3,804

Current installments of obligation under capital leases

 
575

 
256

 
28

 

 
859

Total current liabilities

 
27,844

 
118,062

 
11,522

 

 
157,428

Long-term debt, net

 
667,867

 
1,507,181

 
24,062

 

 
2,199,110

Deferred tax liability and other long-term tax liabilities

 
62,785

 
253,232

 
(783
)
 

 
315,234

Long-term capital lease obligations

 
12,953

 
1,059

 

 

 
14,012

Retirement and postretirement plans

 
25,917

 
157,070

 

 

 
182,987

Other liabilities

 
8,807

 
20,999

 
5,114

 

 
34,920

Total liabilities

 
806,173

 
2,057,603

 
39,915

 

 
2,903,691

 
 
 
 
 
 
 
 
 
 
 
 
Noncontrolling interests

 

 

 
24,447

 

 
24,447

 
 
 
 
 
 
 
 
 
 
 
 
Total stockholders (deficit) equity
1,447,970

 
1,447,970

 
1,149,572

 
169,820

 
(2,767,362
)
 
1,447,970

Total liabilities, noncontrolling interest and stockholders' equity (deficit)
$
1,447,970

 
$
2,254,143

 
$
3,207,175

 
$
234,182

 
$
(2,767,362
)
 
$
4,376,108


17



Media General, Inc.
Condensed Consolidating Statement of Comprehensive Income
For the Three Months Ended June 30, 2016
(in thousands)
 
Media General
 
LIN Television Corporation
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated
Net operating revenue
$

 
$
107,119

 
$
258,965

 
$
7,258

 
$
(10,636
)
 
$
362,706

 
 
 
 
 
 
 
 
 
 
 
 
Operating costs:
 
 
 
 
 
 
 
 
 
 
 
Operating expenses, excluding depreciation expense

 
42,178

 
114,282

 
3,666

 
(6,527
)
 
153,599

Selling, general and administrative expenses

 
23,106

 
52,214

 
988

 
(150
)
 
76,158

Amortization of program licenses rights

 
4,663

 
7,409

 
505

 
(501
)
 
12,076

Corporate and other expenses

 

 
18,094

 
7



 
18,101

Depreciation and amortization

 
14,589

 
24,891

 
857

 

 
40,337

Loss related to property and equipment, net

 
18

 
43

 
26

 

 
87

Merger-related expenses

 

 
1,561

 

 

 
1,561

Restructuring expenses