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Tribune Media Company Reports Second Quarter 2014 Results

Tuesday 19. August 2014 - Tribune Media Company (the "Company"; OTC:TRBAA) today reported its results for the three and six months ended June 29, 2014. The consolidated financial statements along with management's discussion and analysis of financial condition and results of operations are available on the Company's corporate website, www.tribunemedia.com, and on the Company's investor relations mobile app.

Q2 Highlights

Consolidated revenues grew 23% to $894.5 million compared to the second quarter of 2013
Consolidated Adjusted EBITDA grew 20% to $211.9 compared to the second quarter of 2013
Cash flow was positively impacted by a cash distribution from Classified Ventures, LLC of approximately $160 million related to the sale of its Apartments.com business
WGN America successfully launched and renewed its first original series, Salem

Company Results

Consolidated revenues for the three months ended June 29, 2014 were $894.5 million compared to $730.2 million in the three months ended June 30, 2013, representing an increase of $164.3 million, or 23%. Consolidated revenues for the six months ended June 29, 2014 were $1,746.7 million compared to $1,435.2 million in the six months ended June 30, 2013, representing an increase of $311.5 million, or 22%.

Consolidated operating profit for the three months ended June 29, 2014 was $61.3 million compared to $89.6 million in the three months ended June 30, 2013, representing a decrease of $28.3 million, or 32%. For the six months ended June 29, 2014, consolidated operating profit was $135.7 million, a decrease of $37.4 million, or 22%, as compared to $173.1 million in the six months ended June 30, 2013.

Consolidated Adjusted EBITDA increased to $211.9 million in the three months ended June 29, 2014 from $177.0 million in the three months ended June 30, 2013. Consolidated Adjusted EBITDA increased to $509.8 million in the six months ended June 29, 2014 from $393.9 million in the six months ended June 30, 2013.

Cash distributions from equity investments in the three months ended June 29, 2014 were $35.4 million compared to $34.2 million in the three months ended June 30, 2013. Cash distributions from equity investments in the six months ended June 29, 2014 were $155.7 million compared to $124.1 million in the six months ended June 30, 2013. In addition, the Company also received a cash distribution in the second quarter of $159.6 million from Classified Ventures, LLC in connection with the sale of its Apartments.com business.

Commenting on the second quarter results, Peter Liguori, Tribune Media president and chief executive officer stated, “I am very pleased with our accomplishments in the second quarter. The premiere of WGN America’s original series, Salem, exceeded our expectations and we have renewed it for a second season. While the core advertising market experienced headwinds in the first half of the year, we continue to be encouraged by the strength of our new broadcast scale, as evidenced in our year-over-year retransmission fee increases, and feel positive about the opportunities presented by the political advertising landscape in the second half of 2014.”

Broadcasting

Broadcasting segment revenues were $425.8 million in the three months ended June 29, 2014, an increase of $165.3 million, or 63%, as compared to $260.5 million in the three months ended June 30, 2013. For the six months ended June 29, 2014, Broadcasting segment revenues were $824.2 million, an increase of $324.5 million, or 65%, compared with $499.7 million in the six months ended June 30, 2013.

Broadcasting segment Adjusted EBITDA was $140.5 million in three months ended June 29, 2014, compared to $85.1 million in the three months ended June 30, 2013, an increase of $55.4 million, or 65%. For the six months ended June 29, 2014, Broadcasting segment Adjusted EBITDA was $279.6 million compared with $164.7 million in the six months ended June 30, 2013, an increase of $114.9 million, or 70%.

Pro forma for acquisition of Local TV (see attached quarterly pro forma financial disclosures)

The following discussion includes 2013 amounts that are pro forma for the acquisition of Local TV, which was completed on December 27, 2013, as if the acquisition had occurred as of the beginning of 2013, and are based on Local TV’s historical basis of presentation and do not reflect the impact of purchase accounting.

Broadcasting segment revenues were $425.8 million in the three months ended June 29, 2014, compared to $406.0 million in the three months ended June 30, 2013. This represents an increase of $19.8 million, or 4.9%. Retransmission consent revenues in the three months ended June 29, 2014 were $57.1 million, compared to $32.0 million in the three months ended June 30, 2013, an increase of $25.1 million, or 78%. Advertising revenues decreased to $329.1 million in the second quarter of 2014 as compared with $336.6 million in the second quarter of 2013, representing a decrease of $7.5 million, or 2.2%. Increases in political advertising revenues of approximately $6.5 million in the quarter were offset by declines in core advertising of $15.6 million, or 4.9%. For the six months ended June 29, 2014, Broadcasting segment revenues increased $48.9 million, or 6.3%, to $824.2 million compared to $775.3 million in the six month period ended June 30, 2013. Retransmission consent revenues in the six months ended June 29, 2014 increased $51.1 million, or 83%, to $112.7 million, compared to $61.6 million in the six months ended June 30, 2013. Advertising revenues decreased to $633.4 million in the six months ended June 29, 2014 as compared with $637.2 million in the six months ended June 30, 2013, representing a decrease of $3.8 million, or 0.6%. Increases in political advertising revenues of approximately $7.9 million in the first half of 2014 were offset by declines in core advertising of $14.8 million, or 2.4%.

Broadcasting Adjusted EBITDA was $140.5 million in the three months ended June 29, 2014, compared to $149.2 million in the three months ended June 30, 2013. Adjusted EBITDA in the quarter ended June 29, 2014 included $24.5 million of additional costs associated with new original programming at WGN America. For the six months ended June 29, 2014, Broadcasting Adjusted EBITDA was $279.6 million, compared to $279.3 million in the six months ended June 30, 2013. Adjusted EBITDA in the six months ended June 29, 2014 included $31.0 million of additional costs associated with new original programming at WGN America.

Publishing

Publishing segment revenues in the three months ended June 29, 2014 were $468.7 million, compared to $469.6 million in the three months ended June 30, 2013, a decline of $0.9 million, or 0.2%. This decline was primarily attributable to declines in advertising revenue of $19.0 million, offset by increases in other revenues largely resulting from the acquisition of Gracenote in the first quarter of 2014. For the six months ended June 29, 2014, Publishing segment revenues were $922.5 million, compared to $935.5 million in the six months ended June 30, 2013. The decline of $13.0 million, or 1.4%, was primarily attributable to a decline in advertising and commercial printing revenues, partially offset by an increase in other revenues due to the acquisition of Gracenote in the first quarter of 2014.

Publishing segment Adjusted EBITDA was $56.1 million in the three months ended June 29, 2014, compared to $69.7 million in the three months ended June 30, 2013, a decline of $13.6 million, or 20%. The change was primarily due to revenue declines in the newspaper business as well as added expenses from the acquisition of Gracenote. For the six months ended June 29, 2014, Publishing segment Adjusted EBITDA was $111.9 million, compared to $127.7 million in the six months ended June 30, 2013, a decline of $15.8 million, or 12%. The change was primarily due to revenue declines in the newspaper business as well as added expenses from the acquisition of Gracenote.

Corporate

Corporate expenses reduced Adjusted EBITDA in the three months ended June 29, 2014 by $18.2 million, compared to $11.7 million in the three months ended June 30, 2013. The $6.5 million increase in expenses was primarily attributable to increased compensation expense and costs associated with the implementation of a technology application.

For the six months ended June 29, 2014, Corporate expenses reduced Adjusted EBITDA by $33.8 million compared to $21.9 million in the six months ended June 30, 2013. The $11.9 million increase in expense was primarily attributable to increased compensation expense and costs associated with the implementation of a technology application.