Attached files
| file | filename |
|---|---|
| EX-99.2 - EX-99.2 - Tribune Publishing Co | a20218k-brcloseprexhibit992.htm |
| 8-K - 8-K - Tribune Publishing Co | tpco-20201229.htm |
EXHIBIT 99.1
TRIBUNE PUBLISHING COMPANY
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
As of September 27, 2020
(In thousands) (Unaudited)
| Tribune | BestReviews | Proforma | ||||||||||||||||||
| Assets | ||||||||||||||||||||
| Current assets | ||||||||||||||||||||
| Cash | $ | 89,992 | $ | (581) | (a) | $ | 191,449 | |||||||||||||
| 102,038 | (b) | |||||||||||||||||||
| Accounts receivable, net | 75,905 | (12,228) | (a) | 63,677 | ||||||||||||||||
| Inventories | 3,056 | — | 3,056 | |||||||||||||||||
| Prepaid expenses and other | 24,712 | (28) | (a) | 24,684 | ||||||||||||||||
| Total current assets | 193,665 | 89,201 | 282,866 | |||||||||||||||||
| Property, plant and equipment | ||||||||||||||||||||
Machinery, equipment and furniture | 105,496 | (36) | (a) | 105,460 | ||||||||||||||||
Buildings and leasehold improvements | 78,049 | — | 78,049 | |||||||||||||||||
| 183,545 | (36) | 183,509 | ||||||||||||||||||
| Accumulated depreciation | (99,914) | 19 | (a) | (99,895) | ||||||||||||||||
| 83,631 | (17) | 83,614 | ||||||||||||||||||
Advance payments on property, plant and equipment | 1,365 | (16) | (a) | 1,349 | ||||||||||||||||
Property, plant and equipment, net | 84,996 | (33) | 84,963 | |||||||||||||||||
| Other assets | ||||||||||||||||||||
| Goodwill | 115,197 | (87,052) | (a) | 28,145 | ||||||||||||||||
| Intangible assets, net | 56,917 | (5,699) | (a) | 51,218 | ||||||||||||||||
| Software, net | 18,734 | — | 18,734 | |||||||||||||||||
| Lease right-of-use asset | 56,503 | (98) | (a) | 56,405 | ||||||||||||||||
| Restricted cash | 31,371 | — | 31,371 | |||||||||||||||||
| Deferred income taxes | 8,715 | — | 8,715 | |||||||||||||||||
| Other long-term assets | 15,429 | — | 15,429 | |||||||||||||||||
| Total other assets | 302,866 | (92,849) | 210,017 | |||||||||||||||||
| Total assets | $ | 581,527 | $ | (3,681) | $ | 577,846 | ||||||||||||||
The accompanying notes are an integral part of these proforma combined financial statements.
1
TRIBUNE PUBLISHING COMPANY
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS (continued)
As of September 27, 2020
(In thousands) (Unaudited)
| Tribune | BestReviews | Proforma | ||||||||||||||||||
Liabilities and stockholders’ equity | ||||||||||||||||||||
| Current liabilities | ||||||||||||||||||||
| Accounts payable | $ | 32,530 | $ | (1,990) | (a) | $ | 30,540 | |||||||||||||
| Employee compensation and benefits | 24,903 | (34) | (a) | 24,869 | ||||||||||||||||
| Deferred revenue | 37,466 | — | 37,466 | |||||||||||||||||
| Current portion of long-term lease liability | 26,327 | (104) | (a) | 26,223 | ||||||||||||||||
| Current portion of long-term debt | 6,974 | — | 6,974 | |||||||||||||||||
| Other current liabilities | 22,348 | (100) | (a) | 31,653 | ||||||||||||||||
| 9,405 | (c) | |||||||||||||||||||
| Total current liabilities | 150,548 | 7,177 | 157,725 | |||||||||||||||||
| Non-current liabilities | ||||||||||||||||||||
| Long-term lease liability | 73,980 | — | 73,980 | |||||||||||||||||
| Workers compensation, general liability and auto insurance payable | 24,243 | — | 24,243 | |||||||||||||||||
Pension and postretirement benefits payable | 16,690 | — | 16,690 | |||||||||||||||||
| Deferred revenue | 2,051 | 2,051 | ||||||||||||||||||
| Other obligations | 15,903 | — | 15,903 | |||||||||||||||||
| Total non-current liabilities | 132,867 | — | 132,867 | |||||||||||||||||
| Stockholders’ Equity | ||||||||||||||||||||
| Noncontrolling interest | 59,339 | (59,339) | (a) | — | ||||||||||||||||
| Tribune stockholders’ equity | 238,773 | 48,481 | (d) | 287,254 | ||||||||||||||||
| Stockholders' equity | 298,112 | (10,858) | 287,254 | |||||||||||||||||
Total liabilities and stockholders’ equity | $ | 581,527 | $ | (3,681) | $ | 577,846 | ||||||||||||||
The accompanying notes are an integral part of these proforma combined financial statements.
2
TRIBUNE PUBLISHING COMPANY
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
For the nine months ended September 27, 2020
(In thousands, except per share amounts)
(Unaudited)
| Tribune | BestReviews | Proforma | ||||||||||||||||||
| Operating revenues | $ | 588,253 | $ | (34,653) | (e) | $ | 553,600 | |||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Compensation | 231,981 | (1,584) | (e) | 230,397 | ||||||||||||||||
| Newsprint and ink | 25,784 | — | 25,784 | |||||||||||||||||
| Outside services | 203,193 | (1,309) | (e) | 201,884 | ||||||||||||||||
| Other operating expenses | 97,891 | (16,728) | (e) | 81,163 | ||||||||||||||||
| Depreciation and amortization | 28,702 | (1,954) | (e) | 26,748 | ||||||||||||||||
| Impairment | 56,009 | — | 56,009 | |||||||||||||||||
| Total operating expenses | 643,560 | (21,575) | 621,985 | |||||||||||||||||
| Loss from operations | (55,307) | (13,078) | (68,385) | |||||||||||||||||
| Interest expense, net | (391) | — | (391) | |||||||||||||||||
| Loss on equity investments, net | (117) | — | (117) | |||||||||||||||||
| Other income, net | 1,237 | — | 1,237 | |||||||||||||||||
| Loss before income taxes | (54,578) | (13,078) | (67,656) | |||||||||||||||||
| Income tax benefit | (20,619) | — | (20,619) | |||||||||||||||||
| Net loss | (33,959) | (13,078) | (47,037) | |||||||||||||||||
Less: Income attributable to noncontrolling interest | 5,316 | (5,316) | (e) | — | ||||||||||||||||
| Loss attributable to Tribune common stockholders | $ | (39,275) | $ | (7,762) | $ | (47,037) | ||||||||||||||
| Loss attributable to Tribune common stockholders, per common share: | ||||||||||||||||||||
Basic | $ | (1.09) | $ | (1.35) | ||||||||||||||||
Diluted | $ | (1.09) | $ | (1.35) | ||||||||||||||||
| Weighted average shares outstanding: | ||||||||||||||||||||
Basic | 34,801 | 34,801 | ||||||||||||||||||
Diluted | 34,801 | 34,801 | ||||||||||||||||||
The accompanying notes are an integral part of these proforma combined financial statements.
3
TRIBUNE PUBLISHING COMPANY
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
For the year ended December 29, 2019
(In thousands, except per share amounts)
(Unaudited)
| Tribune | BestReviews | Proforma | ||||||||||||||||||
| Operating revenues | $ | 983,149 | $ | (37,371) | (e) | $ | 945,778 | |||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Compensation | 362,450 | (1,670) | (e) | 360,780 | ||||||||||||||||
| Newsprint and ink | 56,785 | — | 56,785 | |||||||||||||||||
| Outside services | 328,333 | (1,521) | (e) | 326,812 | ||||||||||||||||
| Other operating expenses | 166,614 | (19,203) | (e) | 147,411 | ||||||||||||||||
| Depreciation and amortization | 47,314 | (2,698) | (e) | 44,616 | ||||||||||||||||
| Impairment | 14,496 | — | 14,496 | |||||||||||||||||
| Total operating expenses | 975,992 | (25,092) | 950,900 | |||||||||||||||||
| Income (loss) from operations | 7,157 | (12,279) | (5,122) | |||||||||||||||||
| Interest income, net | 499 | — | 499 | |||||||||||||||||
| Loss on equity investments, net | (2,988) | — | (2,988) | |||||||||||||||||
| Other income, net | 45 | — | 45 | |||||||||||||||||
| Income (loss) from continuing operations before income taxes | 4,713 | (12,279) | (7,566) | |||||||||||||||||
| Income tax expense | 1,620 | — | 1,620 | |||||||||||||||||
| Income (loss) from continuing operations | 3,093 | (12,279) | (9,186) | |||||||||||||||||
| Less: Income attributable to noncontrolling interest | 4,825 | (4,825) | (e) | — | ||||||||||||||||
| Loss from continuing operations attributable to Tribune common stockholders | $ | (1,732) | $ | (7,454) | $ | (9,186) | ||||||||||||||
| Loss from continuing operations attributable to Tribune common stockholders, per common share: | ||||||||||||||||||||
| Basic | $ | (0.76) | $ | (0.26) | ||||||||||||||||
| Diluted | $ | (0.76) | $ | (0.26) | ||||||||||||||||
Weighted average shares outstanding: | ||||||||||||||||||||
| Basic | 35,810 | 35,810 | ||||||||||||||||||
| Diluted | 35,810 | 35,810 | ||||||||||||||||||
The accompanying notes are an integral part of these proforma combined financial statements.
4
TRIBUNE PUBLISHING COMPANY
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
For the year ended December 30, 2018
(In thousands, except per share amounts)
(Unaudited)
| Tribune | BestReviews | Proforma | ||||||||||||||||||
| Operating revenues | $ | 1,030,669 | $ | (25,006) | (e) | $ | 1,005,663 | |||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Compensation | 443,084 | (1,526) | (e) | 441,558 | ||||||||||||||||
| Newsprint and ink | 66,134 | — | 66,134 | |||||||||||||||||
| Outside services | 348,827 | (1,270) | (e) | 347,557 | ||||||||||||||||
| Other operating expenses | 163,702 | (17,850) | (e) | 145,852 | ||||||||||||||||
| Depreciation and amortization | 53,262 | (2,205) | (e) | 51,057 | ||||||||||||||||
| Impairment | 1,872 | — | 1,872 | |||||||||||||||||
| Total operating expenses | 1,076,881 | (22,851) | 1,054,030 | |||||||||||||||||
| Loss from operations | (46,212) | (2,155) | (48,367) | |||||||||||||||||
| Interest expense, net | (11,353) | 15 | (e) | (11,338) | ||||||||||||||||
| Loss on early extinguishment of debt | (7,666) | — | (7,666) | |||||||||||||||||
| Loss on equity investments, net | (1,868) | — | (1,868) | |||||||||||||||||
| Other income, net | 14,513 | — | 14,513 | |||||||||||||||||
| Loss from continuing operations before income taxes | (52,586) | (2,140) | (54,726) | |||||||||||||||||
| Income tax benefit | (12,723) | — | (12,723) | |||||||||||||||||
| Loss from continuing operations | (39,863) | (2,140) | (42,003) | |||||||||||||||||
| Less: Income attributable to noncontrolling interest | 856 | (856) | (e) | — | ||||||||||||||||
| Loss from continuing operations attributable to Tribune common stockholders | $ | (40,719) | $ | (1,284) | $ | (42,003) | ||||||||||||||
| Loss from continuing operations attributable to Tribune common stockholders, per common share: | ||||||||||||||||||||
| Basic | $ | (1.15) | $ | (1.19) | ||||||||||||||||
| Diluted | $ | (1.15) | $ | (1.19) | ||||||||||||||||
| Weighted average shares outstanding: | ||||||||||||||||||||
| Basic | 35,268 | 35,268 | ||||||||||||||||||
| Diluted | 35,268 | 35,268 | ||||||||||||||||||
The accompanying notes are an integral part of these proforma combined financial statements.
5
TRIBUNE PUBLISHING COMPANY
NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands) (Unaudited)
NOTE 1: BASIS OF PRESENTATION
The accompanying unaudited pro forma condensed consolidated financial statements of Tribune Publishing Company and subsidiaries (the “Company”) were derived from the Company’s historical consolidated financial statements. The unaudited pro forma balance sheet as of September 27, 2020 was adjusted to reflect the sale of BestReviews LLC (“BestReviews”) to Nexstar Media Group, Inc. for an aggregate purchase price of $160.0 million, plus a working capital adjustment of $9.4 million, which closed on December 29, 2020, as though the disposition occurred on September 27, 2020. The Company owned a 60% interest in BestReviews. The Company consolidated 100% of BestReviews in its financial statements, reflecting the minority interest as noncontrolling interest within stockholders’ equity.
The unaudited pro forma condensed consolidated statements of operations for the nine months ended September 27, 2020, and the years ended December 29, 2019 and December 30, 2018, were prepared as though the disposition occurred on December 31, 2017, the first day of the Company’s fiscal year 2018. A pro forma statement of operations for 2017 is not presented as the Company purchased BestReviews on February 6, 2018.
The unaudited pro forma condensed consolidated financial statements are furnished for informational purposes only and do not purport to reflect the Company’s financial position and results of operations had the dispositions occurred on the dates as indicated above. Further, these financial statements are not necessarily indicative of the Company’s future financial position and future results of operations and should be read in conjunction with the historical financial statements of the Company included in its Annual Report on Form 10‑K for the year ended December 29, 2019 and the Company’s Quarterly Report on Form 10-Q for the quarter ended September 27, 2020.
NOTE 2: PRO FORMA ADJUSTMENTS
The pro forma adjustments are based on preliminary estimates and assumptions that are subject to change. The following adjustments have been reflected in the unaudited pro forma combined financial information:
Adjustments to the pro forma condensed combined balance sheet
(a)To eliminate the assets, liabilities and noncontrolling interest of BestReviews that were consolidated into the Company’s financial statements.
(b)The cash adjustment amount represents the Company’s 60% portion of the gross proceeds of $160.0 million received from the sale of 100% of BestReviews on December 29, 2020, increased by BestReviews cash balance and a working capital adjustment and decreased by BestReviews indebtedness and selling expenses requiring payment at closing, which total approximately $6.5 million, and is additionally increased by the settlement of intercompany accounts.
(c)Other current liabilities adjustments represent estimated taxes payable related to the sale of BestReviews.
(d)Tribune Stockholders’ equity was adjusted as a result of adjustments (a) through (c) above.
Adjustments to the pro forma condensed statements of operations
(e)To eliminate the revenues and expenses of BestReviews.
6