UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
(Mark One)
xANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 20172018
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                     to                     
Commission file number 1-8572
TRIBUNE MEDIA COMPANY
(Exact name of registrant as specified in its charter)
Delaware 36-1880355
(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.)
   
515 North State Street, Chicago, Illinois 60654
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (646) 563-8296(312) 222-3394
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which Registered
Class A Common Stock, par value $0.001 per share The New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    
Yes  x     No  o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    
Yes  o      No  x
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  o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, 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  o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K (Check box if no delinquent filers). xo
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large Accelerated FilerýAccelerated FileroNon-Accelerated Filero
Smaller Reporting CompanyoEmerging Growth Companyo  
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).     Yes  o    No  x
The aggregate market value of the voting common equity held by non-affiliates of the registrant based on the closing sales prices of the registrant’s Class A Common Stock and Class B Common Stock as reported on the New York Stock Exchange (“NYSE”) and OTC Bulletin Board (“OTC”) market, respectively, on June 30, 2017,2018, was $2,977,558,766.$3,342,895,207.
As of February 15, 2018, 87,489,2782019, 87,839,032 shares of the registrant’s Class A Common Stock and 5,557 shares of the registrant’s Class B Common Stock were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
All or a portionThe definitive proxy statement related to the registrant’s Annual Meeting of items 10 through 14 of Part III of this Form 10-K areShareholders to be held on May 1, 2019 is incorporated by reference in Part III to our definitive proxy statement on Schedule 14A for our 2018 Annual Meeting of Shareholders; provided that if such proxy statement is not filed on or before April 30, 2018, such information will be included in an amendment to this Report on Form 10-K filed on or before such date.the extent described therein.
 


TRIBUNE MEDIA COMPANY
INDEX TO 20172018 FORM 10-K
Item No. Page Page
Part I Part I 
1.Business
5
Business
5
1A.Risk Factors
21
Risk Factors
20
1B.Unresolved Staff Comments
43
Unresolved Staff Comments
41
2.Properties
44
Properties
41
3.Legal Proceedings
44
Legal Proceedings
42
4.Mine Safety Disclosures
46
Mine Safety Disclosures
44
Part II Part II 
5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
46
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
45
6.Selected Financial Data
50
Selected Financial Data
49
7.Management’s Discussion and Analysis of Financial Condition and Results of Operations
51
Management’s Discussion and Analysis of Financial Condition and Results of Operations
50
7A.Quantitative and Qualitative Disclosures about Market Risk
87
Quantitative and Qualitative Disclosures about Market Risk
82
8.Financial Statements and Supplementary Data
87
Financial Statements and Supplementary Data
82
9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
87
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
82
9A.Controls and Procedures
87
Controls and Procedures
82
9B.Other Information
88
Other Information
83
Part III Part III 
10.Directors, Executive Officers and Corporate Governance
89
Directors, Executive Officers and Corporate Governance
84
11.Executive Compensation
89
Executive Compensation
84
12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
89
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
84
13.Certain Relationships and Related Transactions, and Director Independence
89
Certain Relationships and Related Transactions, and Director Independence
84
14.Principal Accountant Fees and Services
90
Principal Accountant Fees and Services
85
Part IV Part IV 
15.Exhibits and Financial Statement Schedules
90
Exhibits and Financial Statement Schedules
85
16.Form 10-K Summary
94
Form 10-K Summary
89
Signatures
95
Signatures
90
Index to Consolidated Financial Statements
F-1
Index to Consolidated Financial Statements
F-1
Report of Independent Registered Public Accounting Firm
F-2
Report of Independent Registered Public Accounting Firm
F-2
Consolidated Financial Statements and Notes
F-4
Consolidated Financial Statements and Notes
F-4
Exhibits 


SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K for the fiscal year ended December 31, 20172018 (the “Annual Report”) contains “forward-looking statements” within the meaning of the federal securities laws, including, without limitation, statements concerning the conditions in our industry, our operations, our economic performance and financial condition, including, in particular, statements relating to our business and growth strategy and the proposed Nexstar Merger (as defined below) under “Item 1. Business” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements include all statements that do not relate solely to historical or current facts, and can be identified by the use of words such as “may,” “might,” “will,” “should,” “estimate,” “project,” “plan,” “anticipate,” “expect,” “intend,” “outlook,” “believe” and other similar expressions. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. These forward-looking statements are based on estimates and assumptions by our management that, although we believe to be reasonable, are inherently uncertain and subject to a number of risks and uncertainties. These risks and uncertainties include, without limitation, those identified under “Item 1A. Risk Factors” and elsewhere in this Annual Report.
The following list represents some, but not necessarily all, of the factors that could cause actual results to differ from historical results or those anticipated or predicted by these forward-looking statements:
risks associated with the ability to consummate the merger (the “Merger”“Nexstar Merger”) between us and Sinclair BroadcastNexstar Media Group, Inc. (“Sinclair”Nexstar”) and the timing of the closing of the Nexstar Merger;
the occurrence of any event, change or other circumstances that could give rise to the termination of the Agreement and Plan of Merger dated November 30, 2018 (the “Merger“Nexstar Merger Agreement”) with Nexstar and Titan Merger Sub, Inc., dated May 8, 2017, with Sinclair,a wholly owned subsidiary of Nexstar (“Nexstar Merger Sub”), providing for the acquisition by SinclairNexstar of all of the outstanding shares of our Class A common stock (“Class A Common Stock”) and Class B common stock (“Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”);, including a termination under circumstances that could require us to pay a termination fee to Nexstar;
the risk that the regulatory approvals for the proposed Nexstar Merger with SinclairNexstar may be delayed, not be obtained or may be obtained subject to conditions that are not anticipated;
the inability to consummate the Nexstar Merger due to the failure to obtain the requisite shareholder approval;
risks related to the disruption of management time from ongoing business operations due to the pending Nexstar Merger and the restrictions imposed on the Company’s operations under the terms of the Nexstar Merger Agreement;
uncertainty associated with the effect of the announcement of the Nexstar Merger on our ability to retain and hire key personnel, on our ability to maintain relationships with advertisers and customers and on our operating results and businesses generally;
litigation in connection with the Merger;
changes in advertising demand and audience shares;
competition and other economic conditions including incremental fragmentation of the media landscape and competition from other media alternatives;
changes in the overall market for broadcast and cable television advertising, including through regulatory and judicial rulings;
our ability to protect our intellectual property and other proprietary rights;
our ability to adapt to technological changes;
availability, volatility and cost of quality network, syndicated and sports programming affecting our television ratings;
conduct and changing circumstances related to third-party relationships on which we rely for our business;
the loss, cost and/or modification of our network affiliation agreements;

our ability to renegotiate retransmission consent agreements, or resolve disputes, with multichannel video programming distributors (“MVPDs”);
the incurrence of additional tax-related liabilities related to historical income tax returns;
our ability to realize the full value, or successfully complete the planned divestitures, of our real estate assets;

the potential impact of the modifications to and/or surrender ofthe spectrum on the operation of our television stations, and the costs, terms and restrictions associated with such actions;
the actions necessaryincurrence of costs to modify and/address contamination issues at physical sites owned, operated or surrender the spectrum;used by our businesses;
���the incurrence of costs to address contamination issues at physical sites owned, operated or used by our businesses;
adverse results from litigation, governmental investigations or tax-related proceedings or audits;audits, including proceedings that may relate to our entry into the Nexstar Merger Agreement;
our ability to settle unresolved claims filed in connection with the Debtors’ Chapter 11 cases and resolve the appeals seeking to overturn the Confirmation Order (as defined and described below in “Item 1A. Risk Factors—Risks Related to Our Emergence from Bankruptcy”);
our ability to satisfy future pension and other postretirement employee benefit obligations;
our ability to attract and retain employees;
the effect of labor strikes, lock-outs and labor negotiations;
the financial performance and valuation of our equity method investments;
the impairment of our existing goodwill and other intangible assets;
compliance with, and the effect of changes or developments in, government regulations applicable to the television and radio broadcasting industry;
consolidation in the broadcasting industry;
changes in accounting standards;
the payment of cash dividends on our common stock;
impact of increases in interest rates on our variable rate indebtedness or refinancings thereof;
our indebtedness and ability to comply with covenants applicable to our debt financing and other contractual commitments;
our ability to satisfy future capital and liquidity requirements;
our ability to access the credit and capital markets at the times and in the amounts needed and on acceptable terms;
the factors discussed in “Item 1A. Risk Factors” of this Annual Report; and
other events beyond our control that may result in unexpected adverse operating results.
We caution you that the foregoing list of important factors is not exhaustive. In addition, in light of these risks and uncertainties, the matters referred to in the forward-looking statements contained in this Annual Report may not in fact occur. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law. Should one or more of the risks or uncertainties described in this Annual Report or our other filings with the Securities and Exchange Commission (the “SEC”) occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements.

PART I
ITEM 1. BUSINESS
Company Overview
Tribune Media Company is a diversified media and entertainment business. It is comprised of 42 local television stations, which we refer to as “our television stations,” that are either owned by us or owned by others but to which we provide certain services, along with a national general entertainment cable network, a radio station, a production studio, a portfolio of real estate assets and investments in a variety of media, websites and other related assets. We believe our diverse portfolio of assets, including our equity investments that provide cash distributions, distinguishes us from traditional pure-play broadcasters. Unless otherwise indicated, references in this Annual Report to “Tribune Media,” “Tribune,” “we,” “our,” “us” and the “Company” refer to Tribune Media Company and its consolidated subsidiaries.
On May 8, 2017,November 30, 2018, we entered into the Nexstar Merger Agreement with Sinclair,Nexstar and Nexstar Merger Sub, providing for the acquisition by SinclairNexstar of all of the outstanding shares of our Common Stock by means of a merger of SamsonNexstar Merger Sub Inc., a wholly owned subsidiary of Sinclair, with and into Tribune Media Company, with Tribune Media Company surviving the Mergermerger as a wholly owned subsidiary of Sinclair,Nexstar, as further described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Significant Events—SinclairNexstar Merger Agreement.”
On December 19, 2016, we entered into a definitive share purchase agreement (the “Gracenote SPA”) with Nielsen Holding and Finance B.V. (“Nielsen”) to sell equity interests in substantially all of the Digital and Data business, which was previously a reportable segment, for $560 million in cash, subject to certain purchase price adjustments (the “Gracenote Sale”). The transaction was completed on January 31, 2017 and we received gross proceeds of $581 million. In the second quarter of 2017, we received additional proceeds of $3 million as a result of purchase price adjustments. The Digital and Data entities included in the Gracenote Sale consisted of Gracenote Inc., Gracenote Canada, Inc., Gracenote Netherlands Holdings B.V., Tribune Digital Ventures LLC and Tribune International Holdco, LLC (the “Gracenote Companies”). Our Digital and Data segment consisted of several businesses focused on collection, creation and distribution of data and innovation in unique services and recognition technology that used data, including Gracenote Video, Gracenote Music and Gracenote Sports. Also included in the Digital and Data segment were business-to-consumer online sports information websites which were not included in the Gracenote Sale and are now managed and included in the Television and Entertainment reportable segment. The previously reported amounts have been reclassified to conform to the current presentation; the impact of this reclassification was not material.
In accordance with Accounting Standards Update (“ASU”) No. 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity” (“ASU 2014-08”), assets and liabilities of the Gracenote Companies included in the Gracenote Sale are classified as discontinued operations in our Consolidated Balance Sheet as of December 31, 2016, and the results of operations are reported as discontinued operations in our Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income (Loss) for all periods presented. Accordingly, all references made to financial data in this Annual Report are to Tribune Media Company’s continuing operations, unless specifically noted.
Our business consists of our Television and Entertainment operations and the management of certain of our real estate assets. WeAs of December 31, 2018, we also holdheld a variety of investments, including an equity method investmentsinvestment in Television Food Network, G.P. (“TV Food Network”), which provides substantial annual cash distributions, and CareerBuilder, LLC (through ouran investment in Camaro Parent,Chicago Entertainment Ventures, LLC (formerly Chicago Baseball Holdings, LLC) (“CareerBuilder”CEV LLC”) and a cost method investment in New Cubs LLC (as described and defined below). , which was sold on January 22, 2019.
Television and Entertainment is a reportable segment which provides audiences across the country with news, entertainment and sports programming on Tribune Broadcasting local television stations and distinctive, high quality television series and movies on WGN America, as well as news, entertainment and sports information via our websites and other digital assets.
In addition, weWe report and include under Corporate and Other the management of certain of our real estate assets, including revenues from leasing our owned office and production facilities and any gains or losses from the sales of our owned real estate, as well as certain administrative activities associated with operating corporate office functions and managing our predominantly frozen company-sponsored defined benefit pension plans.functions.

Organizational Structure and History
Tribune Media Company is a holding company that does business through its direct and indirect operating subsidiaries. Previously known as Tribune Company, we were founded in 1847 and incorporated in Delaware in 1968. Throughout the 1980s and 1990s, we grew rapidly through a series of broadcasting acquisitions and strategic investments in companies such as TV Food Network, CareerBuilder and Classified Ventures, LLC (“CV”). In 2000, we expanded our publishing business through the Times Mirror merger when we acquired the Los Angeles Times, Newsday, The Baltimore Sun, The Hartford Courant, and other newspapers. On December 20, 2007, we completed a series of transactions (collectively, the “Leveraged ESOP Transactions”), which culminated in the cancellation of all issued and outstanding shares of the Company’s common stock as of that date and with the Company becoming wholly-owned by the Tribune Company employee stock ownership plan (the “ESOP”).
As a result of severe declines in advertising and newspaper circulation revenues leading up to and during the recession that followed the global financial crisis of 2007-2008, as well as the general deterioration of the publishing and broadcasting industries during such time, we faced significant constraints on our liquidity, including our ability to service our indebtedness. Due to these factors, in December 2008 we filed for protection under chapter 11 (“Chapter 11”) of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court of the District of Delaware (the “Bankruptcy Court”). From December 2008 through December 2012, we operated our businesses under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure and applicable orders of the Bankruptcy Court.
As our emergence from bankruptcy was subject to the consent of the Federal Communications Commission (“FCC”(the “FCC”) to the assignment of our FCC broadcast and auxiliary station licenses as part of our reorganization, in April 2010 we filed applications with the FCC to obtain FCC approval for such assignments.

In April 2012, we filed our final plan of reorganization which was the result of extensive negotiations and contested proceedings before the Bankruptcy Court, principally related to the resolution of certain claims and causes of action arising between certain of our creditors in connection with the Leveraged ESOP Transactions. In July 2012, the Bankruptcy Court issued an order confirming our plan of reorganization.
In November 2012, the FCC granted the applications to assign our broadcast and auxiliary station licenses to our licensee subsidiaries. We emerged from Chapter 11 on December 31, 2012.
After the confirmation of our bankruptcy plan and the receipt of the FCC’s consent to its implementation, we consummated an internal restructuring pursuant to the terms of our bankruptcy plan. For further details, see Note 310 to our audited consolidated financial statements.
On December 27, 2013, pursuant to a securities purchase agreement dated as of June 29, 2013, we acquired all of the issued and outstanding equity interests in Local TV, including the subsidiaries Local TV, LLC and FoxCo Acquisition, LLC, for $2.8 billion in cash, net of working capital and other closing adjustments (the “Local TV Acquisition”). As a result of the acquisition, we became the owner of 16 of the 19 television stations in Local TV’s portfolio. Concurrently with the Local TV Acquisition, Dreamcatcher Broadcasting LLC (“Dreamcatcher”) acquired the FCC licenses and certain other assets and liabilities of Local TV’s television stations WTKR-TV, Norfolk, VA, WGNT-TV, Portsmouth, VA and WNEP-TV, Scranton, PA (collectively, the “Dreamcatcher Stations”) (the “Dreamcatcher Transaction”). We subsequently entered into shared services agreements (“SSAs”) with Dreamcatcher to provide technical, promotional, back-office, distribution and certain programming services to the Dreamcatcher Stations consistent with current FCC rules and policies.
On August 4, 2014, we completed a separation transaction (the “Publishing Spin-off”), resulting in the spin-off of the assets and certain liabilities of the businesses primarily related to our principal publishing operations, other than owned real estate and certain other assets (the “Publishing Business”), through a tax-free, pro rata dividend to our stockholders and warrantholders of 98.5% of the shares of common stock of Tribune Publishing Company (“Tribune Publishing”) (formerly tronc, Inc. (“tronc”), and we retained at that time 1.5% of the outstanding common stock of tronc.Tribune Publishing. The Publishing Business consisted of newspaper publishing and local news and information gathering functions that operated daily newspapers and related websites, as well as a number of ancillary businesses that leveraged certain of the assets of those businesses. As a result of the completion of the Publishing Spin-off, troncTribune Publishing operates the Publishing Business as an independent, publicly-traded company. On January 31, 2017, we sold our tronc shares for net proceeds of $5 million.

remaining Tribune Publishing shares.
On October 1, 2014, we sold our equity interest in CV to TEGNA Inc. (“TEGNA”).
On December 5, 2014, we completed the registration of the Company’s Class A Common Stock on the New York Stock Exchange (“NYSE”) and since then, our Class A Common Stock has traded on the NYSE under the symbol “TRCO.”
On December 19, 2016, we entered into a definitive share purchase agreement (the “Gracenote SPA”) with Nielsen Holding and Finance B.V. (“Nielsen”) to sell equity interests in substantially all of the Digital and Data business, which was previously a reportable segment, for $560 million in cash, subject to certain purchase price adjustments (the “Gracenote Sale”). The transaction was completed on January 31, 2017 and we completedreceived gross proceeds of $581 million. In the second quarter of 2017, we received additional proceeds of $3 million as a result of purchase price adjustments. The Digital and Data entities included in the Gracenote Sale consisted of Gracenote Inc., Gracenote Canada, Inc., Gracenote Netherlands Holdings B.V., Tribune Digital Ventures LLC and Tribune International Holdco, LLC (the “Gracenote Companies”). Our Digital and Data segment consisted of several businesses focused on collection, creation and distribution of data and innovation in unique services and recognition technology that used data, including Gracenote Video, Gracenote Music and Gracenote Sports. Also included in the Digital and Data segment were business-to-consumer online sports information websites which were not included in the Gracenote Sale and are now managed and included in the Television and Entertainment reportable segment. The previously reported amounts have been reclassified to conform to the current presentation; the impact of this reclassification was not material.

In accordance with Accounting Standards Update (“ASU”) No. 2014-08, “Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity” (“ASU 2014-08”), the results of operations of the Gracenote Companies included in the Gracenote Sale are reported as discontinued operations in our Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2017 and December 31, 2016. Accordingly, all references made to financial data in this Annual Report are to Tribune Media Company’s continuing operations, unless specifically noted.
On May 8, 2017, we entered into the Agreement and Plan of Merger (the “Sinclair Merger Agreement”) with Sinclair Broadcast Group, Inc. (“Sinclair”), providing for the acquisition by Sinclair of all of the outstanding shares of our Common Stock by means of a merger of Samson Merger Sub Inc., a wholly-owned subsidiary of Sinclair, with and into Tribune Media Company, with Tribune Media Company surviving the merger as a wholly-owned subsidiary of Sinclair (the “Sinclair Merger”). On August 9, 2018, we provided notification to Sinclair that we had terminated the Sinclair Merger Agreement, effective immediately, on the basis of Sinclair’s willful and material breaches of its covenants and the expiration of the end date thereunder, as further described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Significant Events—Termination of Sinclair Merger Agreement.”
On July 31, 2017, we sold a majority of our ownership interest in CareerBuilder, and on September 13, 2018, we sold our remaining ownership interest in CareerBuilder to an investor group led by investment funds managed by affiliates of Apollo Global Management, LLC and the Ontario Teachers’ Pension Plan Board.
The following chart illustrates our organizational structure as of December 31, 2017:2018:
orgcharta01.gif
 
(1) This entity and its direct and indirect subsidiaries hold our broadcasting businesses (with the exception of the broadcasting businesses that we acquired through our acquisition of Local TV), including WGN America, and our equity method investment in TV Food Network.
(2) This entity and its direct and indirect subsidiaries hold our broadcasting businesses that we acquired through our acquisition of Local TV.
(3) This entity and its direct and indirect subsidiaries hold certain of our other equity method investments, including our investment in CareerBuilder.investments.
(4) This entity and its direct and indirect subsidiaries hold the majority of our real estate assets.
(5) Other direct and indirect subsidiaries that hold various broadcasting and other Company assets, including certain cost method investments.other equity investments without readily determinable fair values.
Competitive Strengths
We believe that we benefit from the following competitive strengths:
Geographically diversified media properties in attractive U.S. markets.
We are one of the largest independent station owner groups in the United States based on household reach, and we own or operate local television stations in each of the nation’s top seven markets by population. We have network affiliations with all of the major over-the-air networks, including American Broadcasting Company (“ABC”), CBS Corporation (“CBS”), FOX Broadcasting Company (“FOX”), National Broadcasting Company (“NBC”), Master Distribution Service, Inc. (“MyNetworkTV” or “MY”), and The CW Network, LLC (“CW”). We provide highly-valued programming, including the National Football League (“NFL”) and other live sports, on many of our stations and local news to approximately 5049 million U.S. households in the aggregate, as measured by Nielsen Media Research, representing approximately 44% of all U.S. households.

In addition, we own a national general entertainment cable network, WGN America, which is currently available in more than 7775 million households nationally, as estimated by Nielsen Media Research. WGN America provides us with a platform for launching high quality scripted programming. We believe that the combination of our broadcast stations and WGN America creates a differentiated distribution platform.
Strong cash flow generation.
Our businesses have historically generated strong cash flows from operations. For the three years ended December 31, 2017,2018, our net cash provided by such operating activities totaled $533$976 million, which includes $539$540 million of cash distributions received from our equity method investments, primarily from TV Food Network, our largest equity method investment. In addition to the $539$540 million of cash distributions accounted for within the cash flows provided by operating activities, $14$4 million of cash distributions were accounted for within the cash flows from investing activities. TV Food Network has historically provided substantial cash distributions annually.

Opportunistically deploying capital to drive stockholder returns.
Our capital allocation policy is focused on driving returns for stockholders and investing in areas that are intended to drive growth in our profitability. On February 24, 2016, our board of directors (the “Board”) authorized a stock repurchase program, under which we may repurchase up to $400 million of our outstanding Class A Common Stock. As of December 31, 2016, we repurchased 6,432,455 shares in open market transactions at an aggregated purchase price of $232 million under the existing stock repurchase program. We did not repurchase any shares of Common Stock during 2017 and 2018 as the Sinclair Merger Agreement prohibited, and the Nexstar Merger Agreement prohibits, us from engaging in additional share repurchases. See Item 5. “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.”
In addition, on February 21, 2018,2019, our Board declared a quarterly cash dividend of $0.25 per share on our Common Stock to be paid on March 26, 201825, 2019 to holders of record of Class A Common Stock and Class B Common Stock as of March 12, 2018,11, 2019, continuing the quarterly dividends that we have paid since the Company’s dividend program was announced on March 6, 2015. For the three years ended December 31, 2017,2018, we paid aover $996 million in total of approximately $1.969 billion to our stockholders (including warrant holders) through dividends and share repurchases, including $649 million and $499 million paid as special cash dividends in April 2015 and February 2017, respectively.2017. Under the Nexstar Merger Agreement, we may not pay dividends other than quarterly cash dividends of $0.25 or less per share.
Valuable investments and real estate holdings.
We currently hold a variety of investments, including equity method investments in TV Food Network and CareerBuilder and a 5% cost method investment in New Cubs LLC.investments. TV Food Network, in which we have a 31% interest, operates two 24-hour television networks, Food Network and Cooking Channel, as well as their related websites. Food Network is a fully distributed network in the United States with content distributed internationally. Cooking Channel is a digital-tier network available nationally and airs popular off-Food Network programming as well as originally produced programming. CareerBuilder,
Prior to its disposition on January 22, 2019, we held a 5% investment in whichCEV LLC. On August 21, 2018, Northside Entertainment Holdings LLC (f/k/a Ricketts Acquisition LLC) (“NEH”) provided a written notice (the “Call Notice”) to us that NEH was exercising its right pursuant to the Amended and Restated Limited Liability Company Agreement of CEV LLC to purchase our 5% membership interest in CEV LLC. The transaction was completed on January 22, 2019, and we currently have an approximately 6% interest, on a fully diluted basis (including CareerBuilder employees’ unvested equity awards), is a global leaderreceived pretax proceeds of $107.5 million, as further described in human capital solutions, helping companies target, attract and retain talent. Its website, CareerBuilder.com, is a leading job website in North America. CareerBuilder operates websites in the United States, Europe, Canada, Asia and South America. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Significant Events—CareerBuilder” for a discussion related to the sale of the majority of our interest in CareerBuilder in 2017.Chicago Cubs Transactions.”
We also own attractive real estate in key markets, including development rights for certain of our real estate assets. We actively manage our portfolio of real estate assets to drive value through the following initiatives:
Opportunistically dispose of properties, including select properties as part of an accelerated monetization program;
Maximize utility of our existing real estate footprint;
Generate revenues on excess space by leasing to third parties; and
Develop vacantImprove entitlements of properties or properties with redevelopment options.to increase values prior to monetization.

Experienced management team with demonstrated industry experience.
Our senior management team has broad and diverse experience across their respective disciplines, with proven track records of success in the industry. Our organization consists of talented executives with expertise across finance, strategy, operations, regulatory matters and human resources. Our management team has a unified vision for the Company, which includes capitalizing on our current strengths and strategically investing in new initiatives.

Strategies
Our mission is to create, produce and distribute outstanding entertainment, news and sports content that informs, entertains, engages and inspires millions of people every day. To achieve this mission, we are pursuing the following strategies:
Utilize the scale and quality of our operating businesses to increase value to our partners: advertisers, MVPDs, network affiliates and consumers.
Our television station group reaches approximately 5049 million households nationally, as measured by Nielsen Media Research, representing approximately 44% of all U.S. households. WGN America, our national general entertainment cable network, reaches approximately 65%63% of U.S. households and the digital networks we operate, Antenna TV and THIS TV, collectively reach approximately 93%92% of U.S. households. We also operate approximately 60 websites primarily associated with our television stations, which, in 2017,2018, reached an average of 5449 million unique visitors monthly, as measured by comScore.
Through our extensive distribution network, we can deliver content through a multitude of channels. This ability to reach consumers across a broad geographical footprint is valuable for advertisers, MVPDs and affiliates alike as we connect consumers with their messaging and quality content.
To ensure our media and brands reach an increasing number of audiences enabling advertisers to reach such audiences in the most effective way across screens, we are dedicated to building and managing strong editorial, digital marketing and technology capabilities that help us source, optimize, distribute and monetize our content online.
WGN America our highly distributed general entertainment cable network, is currently available in more than 7775 million households as estimated by Nielsen Media Research. Our strategy is to build a network that combines high quality scripted programming and feature films.
Be the most valued source of local news and information in the markets in which we operate.
Local news is a cornerstone of our television stations. We believe local news enjoys a competitive advantage relative to national news outlets due to its ability to generate immediate reporting, which is especially valuable when a breaking news story develops in a local market. We are also able to utilize our breadth of coverage to distribute local content on a national scale by sharing news stories on-air and digitally across Tribune-covered markets. Annually, we produce over 80,00088,000 hours of news. We also operate approximately 60 websites and approximately 180 mobile applications.
Disciplined management of operating costs and capital investment.
Our management team is focused on maintaining a disciplined cost management program, while ensuring that the Company is investing in the areas that are expected to continue to drive profitability and growth. We maintain a strong focus on our programming and operating costs through detailed analysis. We also believe that the reach of our station group provides us with a favorable negotiating position with programming providers and other vendors, which can enable us to secure syndicated programming at more favorable prices.
Monetization of our real estate assets.
We intend to continue to maximize the monetization of our real estate assets while continuing the value maximization process.assets. We do this by continuously assessing the market conditions and executing on what we believe are the best strategies for each of the properties, including divestitures or forming strategic partnerships with local developers. In 2017 and 2016,For the three years ended December 31, 2018, we sold several properties for net pretax proceeds of $144$710 million and $506 million, respectively, and recognized a net pretax

gain of $29$266 million, and $213 million, respectively, as further described in “Item 7. Management’s“Management’s Discussion and Analysis of Financial Condition and Results of Operations.Operations—Significant Events—Monetization of Real Estate Assets.”

Prime sports programming in major markets.
In several markets, we have acquired local television broadcast rights for certain sporting events, including Major League Baseball (“MLB”) baseball, National Basketball Association (“NBA”) basketball, and National Hockey League (“NHL”) hockey. Additionally, our stations that are affiliated with FOX, CBS and NBC broadcast certain NFL football and MLB baseball games, and other popular sporting events provided by these networks.
Segments
We operate our business through the Television and Entertainment reportable segment, and under Corporate and Other we report the management of certain of our real estate assets, including revenues from leasing our owned office and production facilities, as well as certain administrative activities associated with operating corporate office functions and managing our predominantly frozen company-sponsored defined benefit pension plans.functions. We also currently hold a variety of minority investments, includingan equity method investment in TV Food Network, CareerBuilder and New Cubs LLC.Network. See Note 2017 to our audited consolidated financial statements for further information.
Television and Entertainment
Our Television and Entertainment reportable segment primarily consists of the following businesses:
Television broadcasting services through Tribune Broadcasting, which owns or provides services to 42 local broadcast television stations and related digital assets, including websites and mobile applications in 33 U.S. markets as well as other digital assets;markets;
Digital multicast network services through Antenna TV and through the operation and distribution of THIS TV, both of which are digital networks that air in 101 million households nationally;
National program services through WGN America, a national general entertainment cable network;
Covers Media Group, a sports betting information website; and
Radio program services on WGN-AM, a Chicago radio station.
Tribune Broadcasting
Our broadcast television stations serve the local communities in which they operate by providing locally produced news and special interest broadcasts as well as syndicated and sports programming.
Tribune Broadcasting owns or provides certain services to 42 local television stations, reaching approximately 5049 million households nationally, as measured by Nielsen Media Research, making us one of the largest independent station groups in the United States based on household reach. Currently, our television stations, including the 3 stations to which we provide certain services under SSAs with Dreamcatcher, consist of 14 FOX television affiliates, 12 CW television affiliates, 6 CBS television affiliates, 3 ABC television affiliates, 3 MY television affiliates, 2 NBC television affiliates and 2 independent television stations. Our affiliates represent all the major over-the-air networks, and we own or operate local television stations in each of the nation’s top seven markets by population.

The following chart provides additional information regarding our television stations:
Stations Market 
Market
 Rank(1)
 
% of U.S.
 Households
 
Primary Network
 Affiliations
 
Affiliation
 Expiration
 Market 
Market
 Rank(1)
 
% of U.S.
 Households
 
Primary Network
 Affiliations
 
Affiliation
 Expiration
WPIX New York 1 6.3% CW 2021 New York 1 6.4% CW 2021
KTLA Los Angeles 2 4.7% CW 2021 Los Angeles 2 4.8% CW 2021
WGN Chicago 3 2.9% IND N/A Chicago 3 2.9% IND N/A
WPHL(2) Philadelphia 4 2.6% MY 2018 Philadelphia 4 2.6% MY 2020
KDAF Dallas 5 2.4% CW 2021 Dallas 5 2.4% CW 2021
WDCW(3) Washington 6 2.2% CW 2021 Washington 6 2.3% CW 2021
KIAH Houston 7 2.2% CW 2021 Houston 7 2.2% CW 2021
KCPQ / KZJO Seattle 12 1.7% FOX / MY 2018/2018 Seattle 13 1.7% FOX / MY 2020(4)/2020
WSFL Miami 16 1.5% CW 2021 Miami 16 1.5% CW 2021
KDVR / KWGN Denver 17 1.4% FOX / CW 2018/2021 Denver 17 1.4% FOX / CW 2020(4)/2021
WJW Cleveland 19 1.3% FOX 2018 Cleveland 19 1.3% FOX 2020(4)
KTXL Sacramento 20 1.3% FOX 2019(4) Sacramento 20 1.2% FOX 2019(4)
KTVI / KPLR St. Louis 21 1.1% FOX / CW 2018/2021 St. Louis 21 1.1% FOX / CW 2020(4)/2021
KRCW Portland 22 1.1% CW 2021 Portland 22 1.0% CW 2021
WXIN / WTTV Indianapolis 28 0.9% FOX / CBS 2019(4)/2019 Indianapolis 28 0.9% FOX / CBS 2019(4)/2019
KSWB San Diego 29 0.9% FOX 2019(4) San Diego 29 0.9% FOX 2019(4)
KSTU Salt Lake City 30 0.8% FOX 2018 Salt Lake City 30 0.8% FOX 2020(4)
WDAF Kansas City 32 0.8% FOX 2020(4)
WTIC / WCCT Hartford 32 0.8% FOX / CW 2019(4)/2021 Hartford 33 0.8% FOX / CW 2019(4)/2021
WDAF Kansas City 33 0.8% FOX 2018
WITI(5) Milwaukee 36 0.8% FOX 2018 Milwaukee 36 0.8% FOX 2020(4)
KFOR / KAUT Oklahoma City 41 0.6% NBC / IND 2019/N/A
WXMI Grand Rapids 43 0.6% FOX 2019(4)
WPMT(6) Harrisburg 45 0.6% FOX 2019(4) Harrisburg 41 0.6% FOX 2019(4)
WTKR(7) / WGNT(7) Norfolk 47 0.6% CBS / CW 2019/2021 Norfolk 44 0.6% CBS / CW 2019/2021
KFOR / KAUT Oklahoma City 45 0.6% NBC / IND 2019/N/A
WGHP Greensboro 48 0.6% FOX 2018 Greensboro 46 0.6% FOX 2020(4)
WXMI Grand Rapids 49 0.6% FOX 2019(4)
WGNO / WNOL New Orleans 50 0.6% ABC / CW 2019/2021
WREG Memphis 50 0.6% CBS 2019 Memphis 51 0.6% CBS 2019
WGNO / WNOL New Orleans 51 0.6% ABC / CW 2019/2021
WTVR Richmond 55 0.5% CBS 2019 Richmond 56 0.5% CBS 2019
WNEP(7)(8) Wilkes Barre 57 0.5% ABC 2019 Wilkes Barre 62 0.4% ABC 2019
WHO Des Moines 68 0.4% NBC 2019 Des Moines 75 0.3% NBC 2019
WHNT Huntsville 80 0.3% CBS 2019 Huntsville 79 0.3% CBS 2019
WQAD Davenport 98 0.3% ABC 2019
KFSM / KXNW Ft. Smith 98 0.3% CBS / MY 2019/2018 Ft. Smith 101 0.2% CBS / MY 2019/2020
WQAD Davenport 102 0.2% ABC 2019
 
(1) Market rank refers to ranking the size of the Designated Market Area (“DMA”) in which the station is located in relation to other DMAs. Source: Local Television Market Universe Estimates for 2017-2018,2018-2019, as published by Nielsen Media Research.
(2) As of January 15, 2018, WPHL is operating on 50 percent of the allocated 6 megahertz of spectrum as a host station pursuant to a channel sharing agreement with Univision Philadelphia LLC, licensee of WUVP-DT.
(3) As of January 23, 2018, WDCW is operating on 33 percent of the allocated 6 megahertz of spectrum as a tenantlicensed sharee station pursuant to a channel sharing agreement with Unimas D.C., LLC, licensee of WFDC-DT.
(4) These FOX affiliation agreements include an early termination provision that permits FOX, upon notice, to reclaim the affiliation if FOX purchases a station within the corresponding DMA.
(5) As of January 8, 2018, WITI is operating on 80 percent of the allocated 6 megahertz of spectrum as a host station pursuant to a channel sharing agreement with VCY America, Inc., licensee of WVCY-TV.
(6) As of January 3, 2018, WPMT is operating on 50 percent of the allocated 6 megahertz of spectrum as a tenantlicensed sharee station pursuant to a channel sharing agreement with WITF, Inc., licensee of WITF-TV.
(7) Stations owned by Dreamcatcher to which we provide certain services under SSAs.
(8) As of December 4, 2017, WNEP is operating on 50 percent of the allocated 6 megahertz of spectrum as a host station pursuant to a Channel Sharing Agreement with Northeastern Pennsylvania Educational Television Association, licensee of WVIA-TV.

Our television and radio stations are operatedoperate pursuant to licenses granted by the FCC. As of the date of this filing under rules promulgated and enforced by the FCC and except as otherwise noted in the table above, each of our television stations has 6 megahertz of spectrum. Our television and radio operations are broadly regulated by the FCC, subject to ongoing rule changes, and subject to periodic renewal, as discussed further in “—Regulatory Environment” below.
Our television station group’s broadcast programming is received by a majority of the audience via MVPDs, which include cable television systems, direct broadcast satellite providers and wireline providers who pay us to offer our programming to their customers. We refer to such fees paid to us by MVPDs as retransmission revenues.
Programming
We source programming for our 39 Tribune Broadcasting-owned stations from the following sources:
News and entertainment programs that are developed and executed by the local television stations;
Acquired and original syndicated programming;
Programming received from our network affiliates that is retransmitted by our television stations (primarily prime time and sports programming); and
Paid programming.
We produce over 80,00088,000 hours of news annually and many of our newscasts are critically acclaimed.
Acquired syndicated programming, including both television series and movies, are purchased on a group basis for use by our owned stations. Contracts for purchased programming generally cover a period of up to five years, with payments typically made over several years.
For those stations with which we have a network affiliation, certain programming is acquired from the affiliated network, including FOX, CW, CBS, NBC and ABC. Network affiliation agreements dictate what programs are aired at specific times of the day, primarily during prime time. Our network affiliated stations are largely dependent upon the performance of network provided programs in order to attract viewers. Those parts of the day which do not contain network-provided content are programmed by the stations, primarily with syndicated programs purchased for cash, cash and barter or barter-only, as well as through self-produced news, live local sporting events, and other entertainment programming.
In addition, our stations air paid-programming whereby third parties pay our television stations for a block of time to air long-form advertising. The content is a commercial message designed to represent the viewpoints and to serve the interest of the sponsor.
The programming sources described above relate to our 39 owned local television stations. In compliance with FCC regulations, Dreamcatcher maintains complete responsibility for and control over programming, finances, personnel and operations of the three Dreamcatcher Stations. We provide technical, promotional, back-office, distribution and limited programming services for the Dreamcatcher Stations.
Sources of Revenue and Expenses
Tribune Broadcasting
Our television stations derive a majority of their revenue from local and national broadcasting advertising and retransmission revenues. Other sources of revenue include barter/trade revenues and copyright royalties. Barter/tradeTrade revenue is the exchange of advertising airtime in lieu of cash payments for the rights to programming, equipment, merchandise or services. As discussed in Note 1 to our audited consolidated financial statements, barter revenue willis no longer be recognized pursuant to new revenue recognition guidance that we will adoptadopted in the first quarter of 2018 using the modified retrospective transition method. Copyright royalties represent distributions collected from satellite and cable companies and distributed by the U.S. Copyright Office for programming created by us that was broadcast outside of the local market in which it was intended to air prior to WGN America becoming exclusively aair.

cable network in November 2015. As a cable network, WGN America no longer generates copyright royalties revenue.
While serving the programming interests and needs of our television audiences, we alsoWe seek to meet the needs of our advertising customers by delivering significant audiences in key demographics. Our strategy is to achieve this objective by providing quality local news programming and popular network and syndicated programs to our viewing audience. We attract most of our national television advertisers through a retained national marketing representation firm. Our local television advertisers are attracted through the use of a local sales force at each of our television stations. We also derive advertising revenue from our television stations’ corresponding websites and mobile applications andas well as other entertainment and sports information websites. In total, we currently operate approximately 60 websites and approximately 180 mobile applications. As consumers continue to turn to online resources for news and entertainment content, we are adapting and expanding our digital presence in each of the local markets where we operate.
Advertising revenues have historically been seasonal, with higher revenues generated in the second and fourth quarters of the year. Political advertising revenues are also historically cyclical, with a significant increase in spending in even numbered election years and disproportionate amounts being spent every four years during presidential campaign years.
We generate retransmission revenues from MVPDs in exchange for their right to carry our stations in their pay-television services to consumers. Retransmission rates are governed by multi-year agreements negotiated with each MVPD and are generally based on the number of monthly subscribers in each MVPD’s respective coverage area.
Expenses at our Tribune Broadcasting stations primarily consist of compensation and programming costs associated with producing local news and acquiring syndication rights to other content. Programming fees are also paid to our network affiliate partners who typically provide prime time and sports programming to be carried in the local markets in which we operate.
Antenna TV and THIS TV
Antenna TV, which is owned and operated by Tribune Broadcasting, is a digital multicast network airing on television stations across the United States. The network features classic television programs and movies. Local television stations air Antenna TV as a digital multicast channel, often on a .2 or .3 channel depending on the city and the station, using data compression techniques that allow a television station to transmit more than one independent program channel at the same time.station. Antenna TV is free and available over-the-air using a traditional broadcast television or antenna. In addition, most major cable companies across the United States carry local affiliate feeds of Antenna TV. In some cities, stations run alternative local programming at various points throughout the day. Currently, the network is available in 135132 markets, including markets in which Tribune owns or provides services to a television station. The primary source of revenue is advertising, both at the network level as well as the locally sold advertising for those markets in which we operate.
THIS TV is a digital multicast network airing on certain television stations across the United States. It is owned by Metro-Goldwyn-Mayer Studios, Inc. (“MGM”) and operated by Tribune Broadcasting. The network programming largely consists of movies and limited classic television series and children’s programming.series. Local television stations air THIS TV as a digital multicast channel often on a .2 or .3 channel, depending on the city and the station. THIS TV is free and available over-the-air using a traditional broadcast television or antenna. In addition, most major cable companies across the United States carry local affiliate feeds of THIS TV. Currently, the network is available in 104105 markets, including markets in which Tribune owns or provides services to a television station. Revenue consists of locally sold advertising for those markets in which we operate, a fee from MGM for operating the network as well as profit participation.
WGN America
WGN America is our national, general entertainment cable network. The channel is currently available in more than 7775 million households, as estimated by Nielsen Media Research. WGN America is a highly distributed general entertainment cable channel. WGN America programming is delivered by our MVPD partners and consists primarily of syndicated series and movies. Content contracts are typically signed

with the major studios and program distributors and cover a period of one to five years, with payment typically made over several years. WGN America is a highly distributed general entertainment cable channel. Our strategy for WGN America includes obtaining rights for off-network syndication, many of which are exclusive.syndication. Our syndication programming currently includes popular television series such as Blue Bloods, Cops, Elementary,Last Man Standing, Married with Children and M*A*S*HH. and Person of Interest.

WGN America’s primary sources of revenue are:
Advertising revenues—We sell national advertising, with pricing based on audience size, the demographics of our audiences and the demand for our limited inventory of commercial time.
Paid Programming—Third parties pay for a block of time to air long-form advertising, typically in overnight time blocks.
Carriage (subscriber) fees—We earn revenues from agreements with MVPDs. The revenue we receive is typically based on the number of subscribers the MVPD has in their franchise area.
Copyright revenue—We receive fee revenues distributed by the U.S. Copyright Office based on original programming that was primarily retransmitted prior to WGN America becoming exclusively a cable network in November 2015 and not directly paid for by MVPDs.
The primary expenses for WGN America are programming costs, associated with new productions, syndicated programming and marketing and promotion costs.
Radio Station
We own WGN 720 AM, a radio station based in Chicago, Illinois. WGN 720 AM is a high-powered clear channel AM station, which has the highest protection from interference from other stations, and features talk-radio programs that host local personalities and provide sports play-by-play commentary.
Corporate and Other
The remaining activities that fall outside of our reportable segment consist of the following areas:
Management of real estate assets, including revenues from leasing office space and operating facilities, and any gain or loss from sale of real estate; and
Costs associated with operating the corporate office functions and our predominantly frozen company-sponsored defined benefit pension plans.functions.
A large percentage of the facilities we own house tronc’s businesses and are subject to operating leases. As of December 31, 2017,2018, our real estate holdings comprise 5351 real estate assets, representing approximately 2.71.9 million square feet of office, studio, industrial and other buildings on land totaling approximately 1,000935 acres. We estimate that approximately 1 million square feet and approximately 199 acres are available for full or partial redevelopment consisting of excess land, underutilized buildings, and older facilities located in urban centers. A large percentage of the facilities we own house Tribune Publishing businesses and are subject to operating leases. See “Item 2. Properties” for further information on our real estate holdings.
We intend to continue the monetization of a significant portion of our real estate while continuing to maximize the value of certain real estate assets primarily by employing best practices in the operation and management of our holdings.
Investments
We hold a variety of investments, which include cable and digital assets.assets, as further described in Note 6 to our audited consolidated financial statements. Currently, we derive significant cash flows from our largest equity method investment, a 31% interest in TV Food Network which operates two 24-hour television networks, Food Network and Cooking Channel, as well as their related websites. Our partner in TV Food Network is Scripps Networks Interactive,Discovery, Inc. (“Scripps”Discovery”), which owns a 69% interest in TV Food Network and operates the networks on behalf of the partnership. Food Network programming content attracts audiences interested in food-related topics such as food preparation, dining out, entertaining, food manufacturing, nutrition and healthy eating. Food Network engages audiences by creating original programming that is entertaining, instructional and

informative. Food Network is a fully distributed network in the United States with content distributed internationally. Cooking Channel caters to avid food lovers by focusing on food information and instructional cooking programming and delivers content focused on baking, ethnic cuisine, wine and spirits, healthy and vegetarian cooking and kids’ foods. Cooking Channel is a digital-tier network, available nationally and airs popular off-Food Network programming as well as originally produced programming.
We also currently hold a number of other smaller investments in private companies such as our 6% interest in CareerBuilder, on a fully diluted basis (including CareerBuilder employees’ unvested equity awards), and a 5% membership interest in New Cubs LLC. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Significant Events—CareerBuilder” for a discussion related to the sale of the majority of our interest in CareerBuilder in 2017. See Note 8 to our audited consolidated financial statements for further information on our investments.

Competition
The advertising marketplace has become increasingly fragmented as new forms of media vie for share of advertiser wallet. Competition for audience share and advertising revenue is based upon various interrelated factors including programming content, audience acceptance and price. Our Television and Entertainment segment competes for audience share and advertising revenue with other broadcast television stations in their respective DMAs, as well as with other advertising media such as MVPDs, radio, newspapers, magazines, outdoor advertising, transit advertising, telecommunications providers, internet and broadband and direct mail. Some competitors are part of larger organizations with substantially greater financial, technical and other resources than we have.
Other factors that are material to a television station’s competitive position include signal coverage, local program acceptance, network affiliation or program service, audience characteristics and assigned broadcast frequency. Competition in the television broadcasting industry occurs primarily in individual DMAs, which are generally highly competitive. Generally, a television broadcasting station in one DMA does not compete with stations in other DMAs. MVPDs can increase competition for a broadcast television station by bringing additional cable network channels into its market.
Television stations compete for audience share primarily on the basis of program popularity, which has a direct effect on advertising rates. Our network affiliated stations are largely dependent uponrely primarily on the performance of network provided programs in orderand self-produced news to attract viewers. Non-network time periods are programmed by the station primarily with syndicated programs purchased for cash, cash and barter or barter-only, as well as through self-produced news, live local sporting events, paid-programming and other entertainment programming. Television advertising rates are based upon factors which include the size of the DMA in which the station operates, a program’s popularity among the viewers that an advertiser wishes to attract, the number of advertisers competing for the available time, the demographic makeup of the DMA served by the station, the availability of alternative advertising media in the DMA, the productivity of the sales forces in the DMA and the development of projects, features and programs that tie advertiser messages to programming.
We also compete for programming, which involves negotiating with national program distributors or syndicators that sell first-run and rerun packages of programming. Our stations compete for access to those programs against in-market broadcast stations for syndicated products and with national cable networks. Public broadcasting stations generally compete with commercial broadcasters for viewers, but not for advertising dollars.
Lastly, our Tribune Broadcasting and WGN America businesses also compete with new distribution technologies for viewers and for content acquisition, including Subscription Video on Demand (“SVOD”) and Over-the-Top (“OTT”) outlets.
Major competitors include broadcast owners and operators, namely FOX, ABC, CBS and NBC, as well other major broadcast television station owners, including TEGNA, Nexstar, Media Group, Sinclair and Gray Television and Raycom Media as well as other cable networks, including TNT, TBS, USA, FX, and AMC.

Customers and Contracts
No single customer accounted for more than 10% of Television and Entertainment or consolidated operating revenues in 2018, 2017 2016 or 2015.2016.
We are a party to multiple contractual arrangements with several program distributors for their respective programming content. In addition, we have affiliation agreements with our television affiliates, such as FOX, CBS, ABC, NBC and CW.
Intellectual Property
We do not face major barriers to our operations from patents owned by third parties as we view continuous innovation with respect to our technology as being one of our key competitive advantages. We maintain a growing patent and patent application portfolio with respect to our technology, owning, as of December 31, 2017,2018, approximately 100144 U.S. and foreign issued patents and approximately 170140 pending patent applications in the U.S. and foreign jurisdictions. Generally, the duration of issued patents in the U.S. is 20 years from filing of the earliest

patent application to which an issued patent claims priority. We also maintain federal, international, and state trademark registrations and applications that protect, along with common law rights, our brands, certain of which are long-standing and well known, such as WGN, WPIX, and KTLA. Generally, the duration of a trademark registration is perpetual, if it is renewed on a timely basis and continues to be used properly as a trademark. We also own a large number of copyrights, none of which individually is material to the business. Further, we maintain certain licensing and content sharing relationships with third-party content providers that allow us to produce the particular content mix we provide to our viewers and consumers in our markets and across the country. Other than the foregoing and commercially available software licenses, we do not believe that any of our licenses to third-party intellectual property are material to our business as a whole.
Employees
As of December 31, 2017,2018, we employed approximately 6,0005,800 employees (including both full-time and part-time). Approximately 1,300 of our Television and Entertainment employees were represented by labor unions. We have not recently experienced any significant labor problems and consider our overall labor relations to be good.
Regulatory Environment
Various aspects of our operations are subject to regulation by governmental authorities in the United States. Our television and radio broadcasting operations are subject to FCC jurisdiction under the Communications Act of 1934, as amended (the “Communications Act”). FCC rules, among other things, govern the term, renewal and transfer of radio and television broadcasting licenses and limit the number and type of media interests in a local market that may be owned by a single person or entity. Our stations must also adhere to various statutory and regulatory provisions that govern, among other things, political and commercial advertising, payola and sponsorship identification, contests and lotteries, television programming and advertising addressed to children, and obscene and indecent broadcasts. The FCC may impose substantial penalties for violation of its regulations, including fines, license revocations, denial of license renewal or renewal of a station’s license for less than the normal term.
Each television and radio station that we own must be licensed by the FCC. Television and radio broadcast station licenses are granted for terms of up to eight years and are subject to renewal by the FCC in the ordinary course, at which time they may be subject to petitions to deny the license renewal applications. As of March 1, 2018,2019, we had FCC authorization to operate 39 television stations and one AM radio station. We must also obtain FCC approval prior to the acquisition or disposition of a station, the construction of a new station or modification of the technical facilities of an existing station. Interested parties may petition to deny such applications and the FCC may decline to renew or approve the requested authorization in certain circumstances. Although we have generally received such renewals and approvals in the past, there can be no assurance that we will continue to do so in the future.
The FCC’s substantive media ownership rules in effect on December 31, 2017 generally limit or prohibit certain types of multiple or cross ownership arrangements. However, not every interest in a media company is treated as a

type of ownership triggering application of the substantive rules. Under the FCC’s “attribution” policies the following relationships and interests generally are cognizable for purposes of the substantive media ownership restrictions: (1) ownership of 5% or more of a media company’s voting stock (except for investment companies, insurance companies and bank trust departments, whose holdings are subject to a 20% voting stock benchmark); (2) officers and directors of a media company and its direct or indirect parent(s); (3) any general partnership or limited liability company manager interest; (4) any limited partnership interest or limited liability company member interest that is not “insulated,” pursuant to FCC-prescribed criteria, from material involvement in the management or operations of the media company; (5) certain same-market time brokerage agreements; (6) certain same-market radio station joint sales agreements; and (7) under the FCC’s “equity/debt plus” standard, otherwise non-attributable equity or debt interests in a media company if the holder’s combined equity and debt interests amount to more than 33% of the “total asset value” of the media company and the holder has certain other interests in another media property in the same market. In an order issued on November 20, 2017 (the “2014 Quadrennial Review Reconsideration Order”), the FCC eliminated the attribution of same-market television station JSAs.joint sales agreements (“JSAs”). The change became effective on February 7, 2018. A petition for judicial review of the 2014 Quadrennial Review

Reconsideration Order was filed on January 16, 2018 at the U.S. Court of Appeals for the Third Circuit and is pending. On January 25, 2018, the petitioners in that case filed an “Emergency Petition” asking the court to stay the effectiveness of all the FCC rule changes embodied in the 2014 Quadrennial Review Reconsideration Order. In an order issued on February 7, 2018, the court denied the “Emergency Petition” and stayed the petitioners’ underlying appeal of the 2014 Quadrennial Review Reconsideration Order for six months. The procedural stay order has expired by its terms and has not been renewed or extended so the petitioners’ appeal may go forward. We cannot predict the outcome of this proceeding or its effect on our business.
Under the FCC’s “Local Television Multiple Ownership Rule” (the “Duopoly Rule”) in effect on December 31, 2017,, a Company may hold attributable interests in up to two television stations within the same Nielsen Media Research DMA (i) provided certain specified signal contours of the stations do not overlap, (ii) where certain specified signal contours of the stations overlap but, at the time the station combination was created, no more than one of the stations was a top-four-rated station and the market would continue to have at least eight independently-owned full power stations after the station combination is created or (iii) where certain waiver criteria are met. In a report and order issued in August 2016 and effective December 1, 2016 (the “2014 Quadrennial Review Order”), the FCC, among other things, adopted a rule applying the “top-four” ownership limitation to “affiliation swaps” within a market, thereby prohibiting transactions between networks and their local station affiliates pursuant to which affiliations are reassigned in a way that results in common ownership or control of two of the top-four rated stations in the DMA. Such arrangements existing prior to the rule’s adoption are grandfathered, and the prohibition does not apply to multiple top-four network multicast streams broadcast by a single station. The 2014 Quadrennial Review Reconsideration Order that became effective on February 7, 2018, eliminated the eight-voices test and provides for a case-by-case review of the presumption against television combinations involving two top-four ranked stations in a market. The 2014 Quadrennial Review Order remainsand the 2014 Quadrennial Review Reconsideration Order both are subject of a petitionto pending petitions for judicial review by the Third Circuit. A petition for judicial reviewOn December 13, 2018, the FCC issued a Notice of Proposed Rulemaking initiating the 2018 Quadrennial Review (the “2018 Quadrennial Review”), which, among other things, seeks comment on all aspects of the 2014 Quadrennial Review Reconsideration Order was filed on January 16, 2018 atDuopoly Rule’s application and implementation, including whether it remains necessary to serve the U.S. Court of Appeals forpublic interest in the Third Circuit and is pending.current television marketplace. We cannot predict the outcome of these proceedings, or their effect on our business.
We own duopolies in the Seattle, Denver, St. Louis, Indianapolis, Oklahoma City and New Orleans DMAs. The Indianapolis duopoly met the top-four/eight voicestop-four test applicable at the time we acquired WTTV(TV)/WTTK(TV) in July 2002, and therefore is permitted under the rules. Our duopoly in the New Haven-Hartford DMA is permitted pursuant to a waiver granted by the FCC on November 16, 2012 in the Memorandum Opinion and Order (the “Exit Order”) granting our applications to assign our broadcast station licenses from the debtors-in-possession to our licensee subsidiaries in connection with the FCC’s approval of the Fourth Amended Joint Plan of Reorganization for Tribune Company and its Subsidiaries (subsequently amended and modified, the “Plan”). Our duopoly in the Fort Smith-Fayetteville DMA and our operation of full power “satellite” stations in the Denver and Indianapolis DMAs are permitted pursuant to waivers granted by the FCC in connection with the Local TV Acquisition (the “Local TV Transfer Order”), which was completed on December 27, 2013. On January 22, 2014, Free Press filed an Application for Review seeking review by the full Commission of the Local TV Transfer Order. We filed an Opposition to the Application for Review on February 21, 2014, and Free Press filed a reply on March 6, 2014. The matter is pending and we cannot predict the outcome. All of these combinations are permitted under the Duopoly

Rule as revised by the 2014 Quadrennial Review Reconsideration Order, subject to reauthorization of any outstanding waivers in the event of the assignment or transfer of control of any of the affected station licenses.
The FCC’s “Newspaper Broadcast Cross Ownership Rule” (the “NBCO Rule”) in effect on December 31, 2017, generally prohibits entities from owning or holding “attributable interests” in both daily newspapers and broadcast stations in the same market. On August 4, 2014, we completed the Publishing Spin-off and retained 381,354 shares of tronc common stock, then representing 1.5% of the outstanding common stock of tronc. On January 31, 2017, we sold our shares of tronc. Accordingly, we do not have an attributable interest in the daily newspaper business or operations of tronc. As a result of the August 4, 2014 pro rata distribution of tronc stock to our shareholders, the three attributable shareholders of the Company (collectively, the “Attributable Shareholders”) became attributable shareholders of tronc. As of December 31, 2017, two Attributable Shareholders reported that they have divested their interest in tronc, while one maintains the status quo with respect to its interest in the companies.
Notwithstanding the Publishing Spin-off, the television/newspaper interests of the remaining Attributable Shareholder remain subject to a temporary waiver of the NBCO Rule which was granted by the FCC in conjunction with the Exit Order. On November 12, 2013, we filed with the FCC a request for extension of the temporary NBCO Rule waivers granted in the Exit Order. That request is pending. In the 2014 Quadrennial Review Order, effective on December 1, 2016, the FCC modified the NBCO Rule by providing an exception for failed or failing entities and allowing for consideration of waivers of the rule on a case-by-case basis. The 2014 Quadrennial Review Reconsideration Order eliminated the NBCO Rule altogether effective as of February 7, 2018, thus, any residual attributable interests are permitted. The 2014 Quadrennial Review Order is the subject of a pending petition for judicial review by the U.S. Court of Appeals for the Third Circuit. A petition for judicial review of the 2014 Quadrennial Review Reconsideration Order was filed on January 16, 2018 at the U.S. Court of Appeals for the Third Circuit and is pending. We cannot predict the outcome of these proceedings or their effect on our business.
The FCC’s “National Television Multiple Ownership Rule” prohibits an entity from having attributable interest in television stations that, in the aggregate, reach more than 39% of total U.S. television households, subject to a 50% discount of the number of television households attributable to UHF stations (the “UHF Discount”). In a Report and Order issued on September 7, 2016 (the “UHF Discount Repeal Order”), the FCC repealed the UHF Discount but grandfathered existing station combinations, like ours, that exceeded the 39% national reach cap as a result of the elimination of the UHF Discount, subject to compliance in the event of a future change of control or assignment of license. The FCC reinstated the UHF Discount in an Order on Reconsideration adopted on April 20, 2017 (the “UHF Discount Reconsideration Order”). Both the September 7, 2016 order repealingA petition for judicial review of the UHF Discount and the April 20, 2017 order reinstating it are subject to pending petitions for judicial reviewReconsideration Order by the U.S. Court of Appeals for the District of Columbia Circuit. Circuit was dismissed on jurisdictional grounds on July 25, 2018. A petition for review of the UHF Discount Repeal Order by the U.S. Court of Appeals for the District of Columbia Circuit was dismissed as moot on December 19, 2018.

Our current national reach exceeds the 39% cap on an undiscounted basis, but complies with the cap on a discounted basis. On December 18, 2017, the FCC released a Notice of Proposed Rulemaking seeking comment generally on the continuing propriety of a national cap and the Commission’s jurisdiction with respect to the cap. We cannot predict the outcome of these proceedings or their effect on our business.
The Company provides certain operational support and other services to the Dreamcatcher stations pursuant to SSAs. In the 2014 Quadrennial Review Order, the FCC adopted reporting requirements for SSAs. This rule was retained in the 2014 Quadrennial Review Reconsideration Order.
In a Report and Order and Further Notice of Proposed Rulemaking issued on March 31, 2014, the FCC sought comment on whether to eliminate or modify its “network non-duplication” and “syndicated exclusivity” rules, pursuant to which local television stations may enforce their contractual exclusivity rights with respect to network and syndicated programming. That proceeding remains pending. Pursuant to the STELASatellite Television Extension and Localism Act of 2010 (“STELA”) Reauthorization Act, (“STELAR”), enacted in December 2014 (“STELAR”), the FCC has adopted regulations prohibiting a television station from coordinating retransmission consent negotiations or negotiating retransmission consent on a joint basis with a separately owned television station in the same market. We do not currently engage in retransmission consent negotiations jointly with any other stations in our markets.
Separately, on June 2, 2015, the FCC adopted an order implementing a further directive of STELAR that the FCC streamline its “effective competition” rules for small cable operators. Under the Communications Act, local franchising authorities may regulate a cable operator’s basic cable service tier rates and equipment charges only if

the cable operator is not subject to effective competition. Historically the FCC presumed the absence of effective competition unless and until a cable operator rebutted the presumption. The FCC’s order reversed that approach and adopted a rebuttable presumption that all cable operators, regardless of size, are subject to effective competition. Some cable operators have taken the position that cable systems found to be subject to effective competition are not required to place television stations, like ours, that have elected retransmission consent on the basic cable service tier. The FCC’s order does not address this issue.
On September 2, 2015, the FCC issued a Notice of Proposed Rulemaking (“NPRM”) seeking comment on whether the FCC should make changes to its rules that require commercial broadcast television stations and MVPDs negotiate in “good faith” for the retransmission by MVPDs of local television signals. On July 14, 2016, then-Chairman Wheeler announced that the FCC will not adopt additional rules governing parties’ good faith negotiation obligations, however, the FCC has not yet formally terminated the proceeding.
The Communications Act prohibits foreign parties from owning more than 20% of the equity or voting interests of a broadcast station licensee. The FCC has discretion under the Communications Act to permit foreign parties to own more than 25% of the equity or voting interests of the parent company of a broadcast licensee, but historically has declined to do so. In a Report and Order adopted September 29, 2016 and effective on January 30, 2017, the FCC adopted rules, presumptions and procedures to facilitate the exercise of its discretion to consider, on a case-by-case basis, proposals for foreign investment in broadcast licensee parent companies above the 25% benchmark. The procedures allow broadcasters to file for declaratory rulings seeking authority to have foreign ownership above 25%, apply a presumption allowing approved attributable foreign-interest holders to increase their holdings without additional FCC approval under some circumstances, and apply such authorization prospectively to all after-acquired licenses.
FCC rules permit television stations to make an election every three years between either “must-carry” or “retransmission consent” with respect to carriage of their signals on local cable systems and DBSdirect broadcast satellite (“DBS”) operators. Cable systems and DBS operators are prohibited from carrying the signal of a station electing retransmission consent until a written carriage agreement is negotiated with that station. On December 19, 2014, the FCC issued a noticeNotice of proposed rulemakingProposed Rulemaking that would expand the definition of MVPD under the FCC’s rules to include certain “over-the-top” distributors of video programming that stream content to consumers over the open Internet. The proposal, if adopted, could result in changes both to how our television stations’ signals and WGN America are distributed, and to how viewers access our content. We cannot predict the outcome of the rulemaking proceeding or its effect on our business.

The FCC has numerous other regulations and policies that affect its licensees, including rules requiring closed-captioning and video description to assist television viewing by the hearing- and visually-impaired; an equal employment opportunities (“EEO”) rule which, among other things, requires broadcast licensees to implement an equal employment opportunity program and undertake certain outreach initiatives to ensure broad recruitment efforts, and prohibits discrimination by broadcast stations based on age, race, color, religion, national origin or gender; a requirement that all broadcast station advertising contracts contain nondiscrimination clauses; and public inspection file rules requiring licensees to maintain for public inspection on an FCC-hosted website extensive documentation regarding various aspects of their station operations. Other rules and decisions permit unlicensed wireless operations on television channels in so-called “White Spaces,” subject to certain requirements. We cannot predict whether such operations will result in interference to broadcast transmissions.
Federal legislation enacted in February 2012 authorized the FCC to conduct a voluntary “incentive auction” in order to reallocate certain spectrum currently occupied by television broadcast stations to mobile wireless broadband services, to “repack” television stations into a smaller portion of the existing television spectrum band and to require television stations that do not participate in the auction to modify their transmission facilities, subject to reimbursement for reasonable relocation costs up to an industry-wide total of $1.750 billion.billion, which amount was increased by $1 billion pursuant to the adoption of an amended version of the Repack Airwaves Yielding Better Access for Users of Modern Services (RAY BAUM’S) Act of 2018 by the U.S. Congress on March 23, 2018. On April 13, 2017, the FCC announced the conclusion of the incentive auction, the results of the reverse and forward auction and the repacking of broadcast television spectrum. We participated in the auction and have received approximately $191 million in pretax proceeds (including $26 million of proceeds received by a Dreamcatcher station) as of December 31, 2017. We used $102 million of after-tax proceeds to prepay a portion of the Term Loan Facility. After-tax proceeds of $12.6 million received by a Dreamcatcher station were used to prepay a substantial portion of the

Dreamcatcher Credit Facility. WeIn 2017, we received gross pretax proceeds of $172 million from licenses sold by us in the FCC spectrum auction and expect to recognizeauction. We recognized a net pretax gain of $133 million in the first quarter of 2018 related to the surrender of the spectrum of these television stations in January 2018. WeIn 2017, we also received $84 million of pretax proceeds for sharing arrangements whereby we will provide hosting services to the counterparties. Additionally, we paid $66 million of proceeds in 2017 to counterparties who will host certain of our television stations under sharing arrangements. The proceeds received by us for hosting the counterparties have been recorded in deferred revenue and other long-term liabilitiesobligations and will beare being amortized to other revenue over a period of 30 years starting with the commencement of each arrangement. The payments to the counterparties have been recorded in prepaid and other long-term assets and will be amortized to direct operating expense over a period of 30 years starting with the commencement of each arrangement.
Twenty-two of our television stations (including WTTK, which operates as a satellite station of WTTV) will be required to change frequencies or otherwise modify their operations as a result of the repacking. In doing so, the stations could incur substantial conversion costs, reduction or loss of over-the-air signal coverage or an inability to provide high definition programming and additional program streams. A majority of our capital expenditures for the FCC spectrum repacking are expected to occur in 2018 and 2019. Through December 31, 2018, we incurred $27 million in capital expenditures for the spectrum repack, of which $24 million were incurred in 2018. We expect that the reimbursements from the FCC’s special fund will cover the majority of our expenses related to the repacking. However, we cannot currently predict the effect of the repacking, whether the special fund will be sufficient to reimburse all of our expenses related to the repack, the timing of reimbursements or any spectrum-related FCC regulatory action. We received FCC reimbursements of $11 million during the year ended December 31, 2018. The reimbursements are included as a reduction in selling, general and administrative expenses (“SG&A”) and are presented as an investing inflow in the Consolidated Statement of Cash Flows. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Significant Events—FCC Spectrum Auction” for additional information related to the repacking.
From time to time, the FCC revises existing regulations and policies in ways that could affect our broadcasting operations. In addition, Congress from time to time considers and adopts substantive amendments to the governing communications legislation. We cannot predict such actions or their resulting effect upon our business and financial position.

The foregoing does not purport to be a complete summary of all of the provisions of the Communications Act or of the regulations and policies of the FCC thereunder. Proposals for additional or revised regulations and requirements are pending before, and are considered by, Congress and federal regulatory agencies from time to time. We generally cannot predict whether new legislation, court action or regulations, or a change in the extent of application or enforcement of current laws and regulations, would have an adverse impact on our operations.
Corporate Information
We are incorporated in Delaware and our corporate offices are located at 515 North State Street, Chicago, Illinois 60654. Our website address is www.tribunemedia.com, and our corporate telephone number is (646) 563-8296.(312) 222-3394. Copies of our key corporate governance documents, code of ethics, and charters of our audit, compensation, and nominating and corporate governance committees are also available on our website www.tribunemedia.com under the heading “Investors.”
We file electronically with the SEC required reports, including Form 8-K, Form 10-Q and Form 10-K and other forms or reports as required. Certain of our officers and directors also file statements of changes in beneficial ownership on Form 4 with the SEC. The public may read and copy any materials that we have filed with the SEC at the SEC’s Public Reference Room located at 100 F Street, NE, Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 800-SEC-0330. Such materials may also be accessed electronically on the SEC’s Internet site (www.sec.gov). We make available free of charge on or through our website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, Section 16 reports and any amendments to these reports in the Investor Relations section of our website as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC.
None of the information contained on, or that may be accessed through, our websites or any other website identified herein is part of, or incorporated into, this Annual Report. All website addresses in this Annual Report are intended to be inactive textual references only.

+ ITEM 1A. RISK FACTORS
You should consider and read carefully all of the risks and uncertainties described below, as well as other information included in this Annual Report, including our consolidated financial statements and related notes. The risks described below are not the only ones facing us. The occurrence of any of the following risks or additional risks and uncertainties not presently known to us or that we currently believe to be immaterial could materially and adversely affect our business, financial condition and results of operations. This Annual Report also contains forward-looking statements and estimates that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of specific factors, including the risks and uncertainties described below.
Risks Related to Our Proposed Merger with SinclairNexstar
The Nexstar Merger is subject to a number of conditions, including conditions that may not be satisfied or completed on a timely basis, if at all.
The consummation of the Nexstar Merger is subject to a number of important closing conditions that make the closing and timing of the Nexstar Merger uncertain. The conditions include, among others, obtaining the approval of our shareholders, obtaining FCC consent to transfers of control and assignments of licenses in connection with the Nexstar Merger (the “FCC consent”Approval”), the expiration or termination of the waiting period applicable to the Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”) (the “HSR Approval”), and the absence of any legal impediments preventingorder or law of any governmental authority that enjoins or otherwise prohibits the consummation of the Merger and the listing of the shares of Sinclair Class A common stock to be issued in the Merger on the NASDAQ Global Select Market.Nexstar Merger. Failure to obtain clearance under the HSR ActApproval or the FCC ConsentApproval would prevent us from consummating the Nexstar Merger.
Under the Nexstar Merger Agreement, SinclairNexstar and Tribune each agreed, subject to the terms of the Nexstar Merger Agreement, to use its reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable law to complete the Nexstar Merger and the other transactions contemplated by the Nexstar Merger Agreement as promptly as reasonably practicable. SinclairNexstar also agreed, subject to the terms of the Nexstar

Merger Agreement, to use reasonable best efforts to take all actions to avoid or eliminate each and every impediment that may be asserted by any governmental authority with respect to the transactions so as to enable the closing to occur as soon as reasonably practicable, including making station divestitures and taking certainapproval actions (each, an “approval action”) to obtain regulatory approval. Specifically, SinclairIn connection with obtaining the HSR Approval and the FCC Approval, Nexstar agreed to divest one or more television stations in the following Nielsen DMAs:certain DMAs. Those DMAs are: (i) Seattle-Tacoma, Washington, (ii) St. Louis, Missouri, (iii) Salt Lake City, Utah, (iv)UT; (ii) Grand Rapids-Kalamazoo-Battle Creek, Michigan, (v) Oklahoma City, Oklahoma, (vi)MI; (iii) Wilkes Barre-Scranton, Pennsylvania, (vii)PA; (iv) Richmond-Petersburg, Virginia, (viii)VA; (v) Des Moines-Ames, Iowa,IA; (vi) Norfolk-Portsmouth-Newport News, VA; (vii) Fort Smith-Fayetteville-Springdale-Rogers, AR; (viii) Davenport, IA-Rock Island-Moline, IL; (ix) Harrisburg-Lancaster-Lebanon-York, PennsylvaniaMemphis, TN; (x) Huntsville-Decatur (Florence), AL; (xi) Indianapolis, IN; and (x) Greensboro-High Point Salem, North Carolina (collectively, the “overlap markets”) as necessary to comply with the Duopoly Rule or to obtain clearance under the HSR Act, in each case as required by the applicable governmental authority in order to obtain approval of and consummate the Merger, and if necessary or advisable to avoid, prevent, eliminate or remove the actual, anticipated or threatened commencement of any proceeding in any forum or issuance of any order that would delay, restrain, prevent, enjoin or otherwise prohibit consummation of the transactions contemplated by the Merger Agreement by any governmental authority.
Sinclair(xii) Hartford-New Haven, CT. Nexstar is required to designate either a Tribune stationone or more Tribune stations or a Sinclair station or SinclairNexstar stations for divestiture in each overlap market, as required by and subject to approval byDMA. In addition, in the relevant governmental authority. SinclairFCC applications filed on January 7, 2019, Nexstar indicated it would also divest a television station in the Harrisburg, PA DMA. Nexstar has also agreed to designate, at its option, certain additional Tribune stations or SinclairNexstar stations for divestiture and to divest such stations in order to comply with the FCC’s National Television Multiple Ownership Rule (47 C.F.R. § 73.3555(e)) (the “FCC National Cap”) as required by the FCC in order to obtain approval of and consummate the Merger.transactions.
However, the Nexstar Merger Agreement does not (i) require SinclairNexstar or Tribune or any of their respective subsidiaries to take, or agree to take, any regulatory action, unless such action will be conditioned upon the consummation of the Nexstar Merger and the transactionstransaction contemplated by the Nexstar Merger Agreement, or (ii) permit Tribunerequire Nexstar or any of its subsidiaries to agree consent to or approve (without the prior consent of Sinclair, which need only be granted to the extent otherwise required under the Merger Agreement) any approval action or (iii) require Sinclair or any of its subsidiaries to agreepropose to take or consent to the taking of any station divestiture or approval action other than the station divestitures described in the

prior paragraph and othercertain specified approval actions (not involvingor resulting from the failure, if any, to obtain certain specified waivers, if sought, and such other station divestitures, of stationsapproval actions or the modification or termination of any local marketing, joint sales, shared services or similar contract or related option agreements)other actions that would not, reasonably be expected toindividually or in the aggregate, result in a material adverse effect on the business, financial condition or results of operations of SinclairNexstar and its subsidiaries taken as a whole (including, after the closing, Tribune and its subsidiaries) (an “approval material adverse effect”).
Moreover, Sinclair and Tribune have also agreed that in the event that the UHF discount, which was reinstated in the Order on Reconsideration adopted by the FCC on April 20, 2017 and published in the Federal Register on May 5, 2017 (the “Order on Reconsideration”), In the Matter of Amendment of Section 73.3555(e) of the Commission’s Rules, National Television Multiple Ownership Rule (the “UHF discount”) is repealed, stayed, rendered inapplicable or otherwise not in full force and effecttaken as of the closing (unless the FCC National Cap has been increased or otherwise modified so that the impact of the FCC National Cap is no less favorable to Sinclair and its subsidiaries than the impact of the national capa whole, as in effect as of May 8, 2017they would exist after giving effect to the UHF discount), thenNexstar Merger and the station divestitures described in the prior paragraph and certain specified approval actions that would be required to be takenor resulting from the failure, if any, to obtain thesuch waivers.
The applications for FCC consent to the transactions would, in the aggregate, be deemed to reasonably be expected to result in an approval material adverse effect, and neither Sinclair nor any of its subsidiaries will be required to take or agree or consent to or approve such approval actions. A petition for judicial review of the Order on Reconsideration was filed at the D.C. Circuit Court of Appeals on May 12, 2017 and is pending.
In addition, under the Merger Agreement, Sinclair and Tribune agreed that if the FCC precludes Sinclair or any of its subsidiaries from holding a customary option to acquire any station to be divested to comply with the FCC National Cap, the divestiture would be deemed to reasonably be expected to result in an approval material adverse effect and neither Sinclair nor any of its subsidiaries will be required to divest or agree or consent to divest Tribune stations or Sinclair stations to comply with the FCC National Cap.
Applications seeking FCC approval of the transactions contemplated by the Merger Agreement (the “Applications”)Approval were filed on June 26, 2017.January 7, 2019. On July 6, 2017,February 14, 2019, the FCC issued a Public Notice establishing procedures governing its reviewpublic notice of filing of the Applications. On July 14, 2017, the FCC issued a Protective Order governing the treatment of confidential and highly confidential information submitted to the record of the proceeding. Formalapplications which set deadlines for petitions to deny the Applications were filed on August 7, 2017 by DISH Network LLC, Steinman Communications, Inc., Public Knowledge, Common Cause, and United Church of Christ, OC Inc., NTCA-The Rural Broadband Association, Newsmax Media, Inc., American Cable Association, Competitive Carriers Association, and Free Press (collectively, the “Petitioners”); numerous other parties have filed comments and informal submissions supporting or opposing grant of the applications. Tribune and Sinclair jointly filed an oppositionapplications, oppositions to the petitions to deny on August 22, 2017 (the “Joint Opposition”), and certain Petitioners and other parties filed replies to the Joint Opposition on August 29, 2017. By letter dated September 14, 2017, the FCC’s Media Bureau issued a Request for Information (“RFI”)oppositions to Sinclair and Tribune seeking additional information, documents and clarification of certain matters discussed in the Applications. Sinclair submitted a responsepetitions to the RFI on October 5, 2017 (the “October 5 Response”). On October 18, 2017, the FCC’s Media Bureau issued a public notice pausing the FCC’s 180-day transaction review “shot-clock” for 15 days (until November 2, 2017) to afford interested parties an opportunity to comment on the October 5 Response. Certain of the Petitioners and other parties filed comments on or before November 2, 2017. The Applications are pending. On January 11, 2018, the FCC’s Media Bureau issued a public notice pausing the FCC’s “shot-clock” as of January 4, 2018 until Sinclair has filed amendments to the Applications along with divestiture applications and the FCC staff has had an opportunity to review any such submissions. deny.
On February 20, 2018, the parties filed an amendment to the Applications that, among other things, (1) requested authority under the Duopoly Rule for Sinclair to own two top four rated stations in each of three television markets and (2) identified stations (the “Divestiture Stations”) in 11 television markets that Sinclair proposes to divest in order for the Merger to comply with the Duopoly Rule and the National Television Multiple Ownership Rule. Concurrently, Sinclair filed applications proposing to place certain of the Divestiture Stations in an FCC-approved divestiture trust, if and as necessary, in order to facilitate the orderly divestiture of those stations following the consummation of the Merger.

On August 2, 2017,7, 2019, we received a request for additional information and documentary material, often referred to as a “second request,” from the United States Department of Justice (the “DOJ”) in connection with the Nexstar Merger Agreement. The second request was issued under the HSR Act. SinclairNexstar received a substantively identical request for additional information and documentary material from the DOJ in connection with the transactions contemplated by the Nexstar Merger Agreement. Consummation of the transactions contemplated by the Nexstar Merger Agreement is conditioned on expiration of the waiting period applicable under the HSR Act, among other conditions. Issuance of the second request extends the waiting period under the HSR Act until 30 days after weNexstar and SinclairTribune have substantially complied with the second request, unless the waiting period is terminated earlier by the DOJ or the parties voluntarily extend the time for closing. The parties entered into an agreement with the DOJ on September 15, 2017 (the “DOJ Timing Agreement”), by which they agreed not to consummate the Merger Agreement before December 31, 2017, or 60 days following the date on which both parties have certified compliance with the second request, whichever is later. In addition, the parties agreed to provide the DOJ with 10 calendar days notice prior to consummating the Merger Agreement. The DOJ Timing Agreement has been amended twice, on October 30, 2017, to extend the date before which the parties may not consummate the Merger Agreement to January 30, 2018, and on January 27, 2018, to extend that date to February 11, 2018. The DOJ Timing Agreement thus currently provides that the parties will not consummate the Merger Agreement before February 11, 2018, or 60 days following the date on which both parties have certified compliance with the second request, whichever is later, and that the parties will provide the DOJ with 10 days notice before consummating the Merger Agreement.
There can be no assurance that the actions SinclairNexstar is required to take under the Nexstar Merger Agreement to obtain the governmental approvals and consents necessary to complete the Nexstar Merger will be sufficient to obtain such approvals and consents or that the divestitures contemplated by the Nexstar Merger Agreement to obtain necessary governmental approvals and consents will be completed. As such, there can be no assurance these approvals and consents will be obtained. Failure to obtain the necessary governmental approvals and consents would prevent the parties from consummating the proposed Nexstar Merger.
Failure to complete the Nexstar Merger in a timely manner, or at all, could negatively impact our future business and our financial condition, results of operations and cash flows.
We currently anticipate the Nexstar Merger will close late in the secondthird quarter of fiscal 2018,2019, but it cannot be certain when or if the conditions for the Nexstar Merger will be satisfied or waived. In particular, the Nexstar Merger cannot be completed, and holders of our Common Stock will not receive the merger consideration, until the conditions to closing are satisfied or waived, including the approval of our shareholders and the receipt of required

FCC and antitrust approvals. The Nexstar Merger Agreement provides that either SinclairNexstar or Tribune may terminate the Nexstar Merger Agreement if the Nexstar Merger is not consummated on or before May 8, 2018,November 30, 2019, subject to an automatic extension to August 8, 2018February 29, 2020 in certain circumstances, if the only outstanding unfulfilled conditions relate to HSR approvalApproval or FCC approval.Approval. In the event that the Nexstar Merger is not completed for any reason, the holders of our Common Stock will not receive any payment for their shares of Common Stock in connection with the Nexstar Merger. Instead, we will remain an independent public company and holders of our Common Stock will continue to own their shares of Common Stock.
Additionally, if the Nexstar Merger is not consummated in a timely manner, or at all, our ongoing business may be adversely affected, including as follows:
we may experience negative reactions from financial markets;
we may experience negative reactions from employees, customers, suppliers or other third parties;
we may be adversely affected by restrictions imposed on our operations under the terms of the Nexstar Merger Agreement;
management’s focus would have been diverted from pursuing other opportunities that could have been beneficial to us; and
the costs of pursuing the Nexstar Merger may be higher than anticipated.
If the Nexstar Merger is not completed, there can be no assurance that these risks will not materialize and will not materially adversely affect our business, financial condition, results of operations or cash flows.

Holders of our Common Stock cannot be sure of the value of the merger consideration they will receive in the Merger.
Pursuant to the Merger Agreement, Sinclair will acquire all of the issued and outstanding shares of our Common Stock for $35.00 in cash and 0.2300 shares of Sinclair Class A common stock for each share of our Common Stock (the “Exchange Ratio”). The Exchange Ratio is fixed and will not be adjusted for changes in the market price of Sinclair’s Class A common stock or our Common Stock. The market value of our Common Stock at the time of the Merger or at any time prior to the Merger may vary significantly from its price on the date the Merger Agreement was executed or the date of this Annual Report on Form 10-K. Because the Exchange Ratio will not be adjusted to reflect any changes in the market price of our Common Stock, the market value of the Sinclair Class A common stock issued in the Merger and the market value of our Common Stock surrendered in the Merger may each be higher or lower than the values of those shares on earlier dates. Accordingly, at any time prior to the completion of the Merger, our stockholders will not know or be able to determine the value of the Sinclair Class A common stock they will receive upon completion of the Merger.
Changes in the market prices of our Common Stock may result from a variety of factors that are beyond our control, including changes in our businesses, operations and prospects, regulatory considerations, governmental actions, and legal proceedings and developments. Market assessments of the benefits of the Merger, the likelihood that the Merger will be completed and general and industry-specific market and economic conditions may also have an effect on the market price of our Common Stock. Changes in market prices of our Common Stock may also be caused by fluctuations and developments affecting domestic and global securities markets. We are not permitted to terminate the Merger Agreement solely because of changes in the market prices of our Common Stock. You are urged to obtain up-to-date prices for our Common Stock. There is no assurance that the Merger will be completed, that there will not be a delay in the completion of the Merger or that all or any of the anticipated benefits of the Merger will be obtained.
The proposed Nexstar Merger may cause disruption in our business.
The Nexstar Merger Agreement generally requires us to operate our business in the ordinary course pending consummation of the Nexstar Merger and restricts us, without Sinclair’sNexstar’s consent, from taking certain specified actions until the Nexstar Merger is completed. These restrictions may affect our ability to execute our business strategies and attain our financial and other goals and may impact our financial condition, results of operations and cash flows.
In connection with the proposed Nexstar Merger, our current and prospective employees may experience uncertainty about their future roles with the combined company following the Nexstar Merger, which may materially adversely affect our ability to attract and retain key personnel while the Nexstar Merger is pending. Key employees may depart because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with the combined company following the Nexstar Merger. Accordingly, no assurance can be given that we will be able to attract and retain key employees to the same extent that we have been able to in the past. If we do not succeed in attracting, hiring, and integrating excellent personnel, or retaining and motivating existing personnel, we may be unable to grow and operate our business effectively.
The proposed Nexstar Merger further could cause disruptions to our business or business relationships, which could have an adverse impact on our results of operations. Parties with which we have business relationships may experience uncertainty as to the future of such relationships and may delay or defer certain business decisions, seek alternative relationships with third parties or seek to alter their present business relationships with us. Parties with whom we otherwise may have sought to establish business relationships may seek alternative relationships with third parties. The pursuit of the Nexstar Merger and the preparation for the integration may also place a significant burden on management and internal resources. The diversion of management’s attention away from day-to-day business concerns could adversely affect our financial results.
We have been subject to, and could be subject to further, litigation related to the Nexstar Merger, which could result in significant costs and expenses. In addition to litigation-related expenses, we have incurred and will continue to incur other significant costs, expenses and fees for professional services and other transaction costs in connection with the Nexstar Merger, and many of these fees and costs are payable regardless of whether or not the Nexstar Merger is consummated.

Delays in completing the Nexstar Merger may substantially reduce the expected benefits of the Nexstar Merger.
Satisfying the conditions to, and completion of, the Nexstar Merger may take longer than, and could cost more than, we and SinclairNexstar expect. Any delay in completing or any additional conditions imposed in order to complete the Nexstar Merger may materially adversely affect the synergies and other benefits that we and SinclairNexstar expect to achieve from the Nexstar Merger and the integration of our respective businesses. Further, there can be no assurances that the conditions to the closing of the Nexstar Merger and the other transactions contemplated by the Nexstar Merger Agreement will be satisfied or waived or that the Nexstar Merger will be completed at all. In addition, each of us and SinclairNexstar have the right to terminate the Nexstar Merger Agreement if the Nexstar Merger is not completed by May 8, 2018,November 30, 2019, subject to an automatic extension to August 8, 2018,February 29, 2020, if necessary, to obtain regulatory approval under certain circumstances.
The Nexstar Merger Agreement precludes us from pursuing alternatives to the Nexstar Merger.
Under the Nexstar Merger Agreement, we are restricted, subject to limited exceptions, from pursuing or entering into alternative transactions in lieu of the Merger following the approval by Tribune stockholders of the Merger Agreement, which occurred on October 19, 2017.Nexstar Merger. In general, unless and until the Nexstar Merger Agreement is terminated, we are restricted from, among other things, soliciting, initiating, causing, knowingly encouraging or knowingly facilitating any inquiries, proposals or the making of any proposalsoffers from any person that is or iscould reasonably likelybe expected to lead to an alternative transaction proposal. Further, we are unable to terminate the Merger Agreement following approval by Tribune stockholders even if anthe Board withdraws or qualifies its recommendation with respect to the Nexstar Merger, we will still be required to submit each of their Nexstar Merger-related proposals to a vote at a special meeting and will be prohibited from submitting any alternative transaction proposal to our stockholders at such special meeting, even if such alternative transaction proposal, if consummated, would result in a transaction that is more favorable to our stockholders, from a financial point of view, than the Nexstar Merger. We have the right to terminate the Nexstar Merger Agreement and enter into an agreement with respect to a “superior proposal” only if specified conditions have been satisfied and a termination fee of $135 million is paid to Nexstar. These provisions effectively precludecould discourage a third party that may have an interest in acquiring all or a significant part of Tribune from considering or proposing such an acquisition, even if such third party were prepared to pay consideration with a higher per share cash or market value than the consideration proposed to be received or realized in the Merger.Nexstar Merger, or might result in a potential acquirer proposing to pay a lower price than it would otherwise have proposed to pay because of the added expense of the termination fee that may become payable.
Risks Related to Our Business
We expect advertising demand to continue to be impacted by economic conditions and fragmentation of the media landscape.
Advertising revenue is our primary source of revenue, representing approximately 67%66% of our Television and Entertainment revenue in 2017.2018. Expenditures by advertisers tend to be cyclical, reflecting overall economic conditions, as well as budgeting and buying patterns. National and local economic conditions, particularly in major metropolitan markets, affect the levels of advertising revenue. Changes in gross domestic product, consumer spending, auto sales, housing sales, unemployment rates, job creation, programming content and audience share and rates, as well as federal, state and local election cycles, all impact demand for advertising.
A decline in the economic prospects of advertisers or the economy in general could alter current or prospective advertisers’ spending priorities. Our revenue is sensitive to discretionary spending available to advertisers in the markets we serve, as well as their perceptions of economic trends and uncertainty. Weak economic indicators in various regions across the nation, such as high unemployment rates, weakness in housing and continued uncertainty caused by national and state governments’ inability to resolve fiscal issues in a cost efficient manner to taxpayers may adversely impact advertiser sentiment. These conditions could impair our ability to maintain and grow our advertiser base. In addition, advertising from the automotive, financial, retail and restaurant industries each constitute a large percentage of our advertising revenue. The success of these industries will continue to affect the amount of their advertising spending, which could have an adverse effect on our revenues and results of operations. Furthermore, consolidation across various industries, such as financial institutions and telecommunication companies, impacts demand for advertising. Competition from other media, including other broadcasters, cable

systems and networks, satellite television and radio, metropolitan, suburban and national newspapers, websites, magazines, direct marketing and solo and shared mail programs, affects our ability to retain advertising clients and raise rates.
Seasonal variations in consumer spending cause our quarterly advertising revenue to fluctuate. Second and fourth quarter advertising revenue is typically higher than first and third quarter advertising revenue, reflecting the slower economic activity in the winter and summer and the stronger fourth quarter holiday season. In addition, due to demand for political advertising spots, we typically experience fluctuations in our revenues between even and

odd-numbered years. During elections for various state and national offices, which are primarily in even-numbered years, advertising revenues tend to increase because of political advertising in our markets. Advertising revenues in odd-numbered years tend to be less than in even-numbered years due to the significantly lower level of political advertising in our markets. Even in even-numbered years, levels of political advertising are affected by campaign finance laws and the willingness and ability of political candidates and PACspolitical action committees to raise and spend funds, and our advertising revenues could vary substantially based on these factors.
The proliferation of cable and satellite channels, advances in mobile and wireless technology, the migration of television audiences to the Internet and the viewing public’s increased control over the manner and timing of their media consumption through personal video recording devices, have resulted in greater fragmentation of the television viewing audience and a more difficult advertising sales environment. Demand for our products is also a factor in determining advertising rates. For example, ratings points for our television stations and cable channels are among the factors that are weighed when determining advertising rates.
All of these factors continue to affect the advertising sales market and may further adversely impact our ability to grow or maintain our revenues.
Our business operates in highly competitive markets and our ability to maintain market share and generate operating revenues depends on how effectively we compete with existing and new competition.
Our business operates in highly competitive markets. Our television and cable stations compete for audiences and advertising revenue with other broadcast stations as well as with other media such as the Internet, cable and satellite television, and radio. Some of our current and potential competitors have greater financial and other resources than we do. In addition, cable companies and others have developed national advertising networks in recent years that increase the competition for national advertising. Over the past decade, cable television programming services, other emerging video distribution platforms and the Internet have captured increasing market share, while aggregate viewership of the major broadcast television networks has declined.
Viewer accessibility is also becoming a factor as is the inability to measure new audiences which could impact advertising rates. Advertising rates are set based upon a variety of factors, including a program’s popularity among the advertiser’s target audience, the number of advertisers competing for the available time, the size and demographic make-up of the market served and the availability of alternative advertising avenues in the market. Our ability to maintain market share and competitive advertising rates depends in part on audience acceptance of our network, syndicated and local programming. Changes in market demographics, the entry of competitive stations into our markets, the transition to new methods and technologies for distributing programming and measuring audiences such as Local People Meters, the introduction of competitive local news or other programming by cable, satellite, Internet, telephone or wireless providers, or the adoption of competitive offerings by existing and new providers could result in lower ratings and adversely affect our business, financial condition and results of operations.
Our television and cable stations generate significant percentages of their advertising revenue from a few categories, including automotive, financial institutions, retail, restaurants and political. As a result, even in the absence of a recession or economic downturn, technological, industry, or other changes specifically affecting these advertising sources could reduce advertising revenues and adversely affect our financial condition and results of operations.

Technological changes in product delivery and storage could adversely affect our business.
Our business is subject to rapid technological change, evolving industry standards, and the emergence of new technologies. Advances in technologies or alternative methods of product delivery or storage, or certain changes in consumer behavior driven by these or other technologies and methods of delivery and storage, could have a negative effect on our business.
For example, devices that allow users to view television programs on a time-delayed basis, technologies that enable users to fast-forward or skip advertisements, such as DVRs, and portable digital devices and technology that enable users to store or make portable copies of programming, may cause changes in consumer behavior that could affect the attractiveness of our offerings to advertisers and adversely affect our revenues. In addition, the increasing delivery of content directly to consumers over the Internet and the use of digital devices, including mobile devices,

which allow users to view or listen to content of their own choosing, in their own time and remote locations, while avoiding traditional commercial advertisements or subscription payments, could adversely affect our advertising revenues. The growth of direct to consumer video offerings, as well as offerings by distributors of smaller packages of cable programming to customers at price points lower than traditional cable distribution offerings could adversely affect demand for our cable network.
Furthermore, in recent years, the national broadcast networks have streamed their programming on the Internet and other distribution platforms in close proximity to network programming broadcast on local television stations, including those that we own or operate. These and other practices by the networks dilute the exclusivity and value of network programming originally broadcast by our television stations and could adversely affect the business, financial condition and results of operations of our stations.
We may not be able to adequately protect our intellectual property and other proprietary rights that are material to our business, or to defend successfully against intellectual property infringement claims by third parties.
Our business relies on a combination of patented and patent-pending technology, trademarks, trade names, copyrights, and other proprietary rights, as well as contractual arrangements, including licenses, to establish and protect our technology, intellectual property and brand names. We believe our proprietary technology, trademarks and other intellectual property rights are important to our continued success and our competitive position. Any impairment of any such intellectual property or brands could adversely impact the results of our operations or financial condition.
We seek to limit the threat of content piracy; however, policing unauthorized use of our broadcasts, products and services and related intellectual property is often difficult and the steps taken by us may not in every case prevent the infringement by unauthorized third parties. Developments in technology increase the threat of content piracy by making it easier to duplicate and widely distribute pirated material. Our use of contractual provisions, confidentiality procedures and agreements, and trademark, copyright, unfair competition, trade secret and other laws to protect our intellectual property rights and proprietary technology may not be adequate. Litigation may be necessary to enforce our intellectual property rights and protect our proprietary technology, or to defend against claims by third parties that the conduct of our businesses or our use of intellectual property infringes upon such third party’s intellectual property rights. Protection of our intellectual property rights is dependent on the scope and duration of our rights as defined by applicable laws in the U.S. and abroad and the manner in which those laws are construed. If those laws are drafted or interpreted in ways that limit the extent or duration of our rights, or if existing laws are changed, our ability to generate revenue from intellectual property may decrease, or the cost of obtaining and maintaining rights may increase. There can be no assurance that our efforts to enforce our rights and protect our products, services and intellectual property will be successful in preventing content piracy.
Furthermore, any intellectual property litigation or claims brought against us, whether or not meritorious, could result in substantial costs and diversion of our resources, and there can be no assurances that favorable final outcomes will be obtained in all cases. The terms of any settlement or judgment may require us to pay substantial amounts to the other party or cease exercising our rights in such intellectual property. In addition, we may have to seek a license to continue practices found to be in violation of a third party’s rights, which may not be available on

reasonable terms, or at all. Our business, financial condition or results of operations may be adversely affected as a result.
The availability and cost of quality network, syndicated and sports programming may impact television ratings, which could lead to fluctuations in revenues and profitability.
Most of our stations’ programming is acquired from outside sources, including the networks with which our stations are affiliated. The cost of network and syndicated programming represents a significant portion of television operating expenses. Network programming is dependent on our ability to maintain our existing network affiliations and the continued existence of such networks. Syndicated programming costs are impacted largely by market factors, including demand from other stations within the market, cable channels and other distribution vehicles. Availability of syndicated programming depends on the production of compelling programming and the willingness of studios to offer the programming to unaffiliated buyers. The cost and availability of local sports programming is

impacted by competition from regional sports cable networks and other local broadcast stations. In addition, professional sports leagues or teams may create their own networks or the renewal costs could substantially exceed the original contract cost. Any inability to continue to acquire or produce affordable programming for our stations could adversely affect operating results or our financial condition. Additionally, as broadcast rights are recorded on the Company’s balance sheet at the lower of unamortized cost or estimated net realizable value, a downward revision in the anticipated future revenues for programming could result in a material non-cash charge.
The loss or modification of our network affiliation agreements could have a material and adverse effect on our results of operations.
The non-renewal or termination of our network affiliation agreements would prevent us from being able to carry programming of the relevant network and this loss of programming would require us to obtain replacement programming, which may involve higher costs and which may not be as attractive to our target audiences, resulting in reduced revenues. Upon the termination of any of our network affiliation agreements, we would be required to establish a new network affiliation agreement for the affected station with another network or operate as an independent station. Currently, our owned and operated televisions stations include 14 stations affiliated with FOX, 12 stations affiliated with CW, 6 stations affiliated with CBS, 3 stations affiliated with ABC, 3 stations affiliated with MY, 2 stations affiliated with NBC and 2 independent television stations. We periodically renegotiate our major network affiliation agreements. We cannot predict the outcome of any future negotiations relating to our affiliation agreements or what impact, if any, they may have on our financial condition and results of operations.
We must purchase television programming based on expectations about future revenues. Actual revenues may be lower than our expectations.
One of our most significant costs is television programming. If a particular program is not popular in relation to its costs, we may not be able to sell enough advertising time or negotiate sufficient retransmission consent and carriage fee rates to cover the costs of the program. Since we generally purchase programming content from others rather than producing such content ourselves, we have limited control over the costs of the programming. Often we must purchase programming several years in advance and may have to commit to purchase more than one year’s worth of programming. We may replace programs that are doing poorly before we have recaptured any significant portion of the costs we incurred or before we have fully amortized the costs which may result in charges that would adversely affect our results of operations. Any of these factors could reduce our revenues or otherwise cause our costs to escalate relative to revenues. These factors are exacerbated during weak advertising markets. Additionally, our business is subject to the popularity of the programs provided by the networks with which we have network affiliation agreements or which provide us programming.

Our retransmission consent and carriage fee agreements may not be as profitable as we anticipate, may result in material claims and litigation against us, and may not be renewed on comparable or more favorable terms, if at all.
We depend in part upon retransmission consent and carriage fees from cable, satellite and other MVPDs, which pay those fees in exchange for the right to retransmit our broadcast programming and distribute WGN America. Fees from these retransmission consent and carriage fee agreements represented approximately 29%32% of our 2017 2018

Television and Entertainment revenues. Since fees under our retransmission consent and carriage fee agreements are typically generated on a per-subscriber basis, if an MVPD with which we have a retransmission consent or carriage fee agreement loses subscribers, we would generate less revenue under such agreement. We have had in the past, and anticipate continuing to have in the future, commercial disputes with MVPDs relating to the terms of our retransmission consent and carriage fee agreements that may result in claims for monetary damages against us, litigation or termination of such agreements. Any such development could materially and adversely affect our business, operating results or financial condition.
As these retransmission consent and carriage fee agreements expire, we may not be able to renegotiate such agreements at terms similar to or more favorable than our current agreements. Our inability to renegotiate retransmission consent or carriage fee agreements on terms comparable to or more favorable than our current agreements, or at all, may cause revenues or revenue growth from our retransmission consent and carriage fee

agreements to decrease under the renegotiated terms. During the negotiation of an expiring retransmission consent or carriage fee agreement, we may also experience disruption of service of our television stations provided through such MVPD. In addition, the non-renewal of any retransmission consent and carriage fee agreement with an MVPD upon expiration may affect the economics of our relationship with the MVPD, advertising revenues and our local brands. Furthermore, fees under our retransmission and carriage agreements are typically generated on a per subscriber basis and if an MVPD with which we have a retransmission or carriage agreement loses subscribers, our revenues would be adversely affected.
We could be faced with additional tax-related liabilities if the IRS prevails on a proposed income tax audit adjustment. We may also face additional tax liabilities stemming from an ongoing tax audit.
We are subject to both federal and state income taxes and are regularly audited by federal and state taxing authorities. Significant judgment is required in evaluating our tax positions and in establishing appropriate reserves. We analyze our tax positions and reserves on an ongoing basis and make adjustments when warranted based on changes in facts and circumstances. While we believe our tax positions and reserves are reasonable, the resolutions of our tax issues are unpredictable and could negatively impact our effective tax rate, net income or cash flows for the period or periods in question. Specifically, we may be faced with additional tax liabilities for the transactions contemplated by the agreement, dated August 21, 2009, between us and Chicago Entertainment Ventures,CEV LLC, (formerly Chicago Baseball Holdings, LLC), and its subsidiaries (collectively, “New Cubs LLC”), governing the contribution of certain assets and liabilities related to the business of the Chicago Cubs Major League Baseball franchise owned by us and our subsidiaries to New Cubs LLC, and related agreements thereto (the “Chicago Cubs Transactions”).
On June 28, 2016, the IRS issued to us a Notice of Deficiency (“Notice”) which presents the IRS’s position that the gain on the Chicago Cubs Transactions (as defined and described in Note 86 to our audited consolidated financial statements) should have been included in our 2009 taxable income. Accordingly, the IRS has proposed a $182 million tax and a $73 million gross valuation misstatement penalty. After-tax interest on the proposed tax and penalty through December 31, 20172018 would be approximately $63$81 million. We continue to disagree with the IRS’s position that the transaction generated a taxable gain in 2009, the proposed penalty and the IRS’s calculation of the gain. During the third quarter of 2016, we filed a petition in U.S. Tax Court to contest the IRS’s determination. We continue to pursue resolution of this disputed tax matter with the IRS. If the gain on the Chicago Cubs Transactions is deemed to be taxable in 2009, we estimate that the federal and state income taxes would be approximately $225 million before interest and penalties. Any tax, interest and penalty due will be offset by any tax payments made relating to this transaction subsequent to 2009. Through December 31, 2017,2018, we have paid or accrued approximately $53$80 million through our regular tax reporting process.
We do not maintain any tax reserves related to the Chicago Cubs Transactions. Our Consolidated Balance Sheet as of December 31, 2017,2018, includes a deferred tax liability of $96$69 million related to the future recognition of taxable income and gain from the Chicago Cubs Transactions.
As further described in Note 11 to our audited consolidated financial statements, on August 21, 2018, NEH provided the Call Notice to us that NEH was exercising its right to purchase our 5% membership interest in CEV LLC, and we sold our 5% ownership interest in CEV LLC on January 22, 2019. As a result of the sale, the total

remaining deferred tax liability of $69 million will become currently payable in 2019. The sale of our ownership interest in CEV LLC has no impact on our dispute with the IRS.
In addition, we may incur additional tax liabilities in the future as a result of changes in tax laws and regulations or as a result of the implementation of existing tax laws. In particular, we are continuing to analyze certain provisions of the Tax Cuts and Jobs Act, which was enacted on December 22, 2017. While the new law substantially decreased the U.S. federal corporate tax rate, we do not yet know what all of the consequences of this new statute will be, including the repeal of IRC Section 199, which may result in an increase to our effective tax rate.
We may not be able to access the credit and capital markets at the times and in the amounts needed and on acceptable terms.
From time to time, we may need to access the long-term and short-term capital markets to obtain financing. Our access to, and the availability of, financing on acceptable terms and conditions in the future will be impacted by many factors, including, but not limited to: (1) our financial performance, (2) our credit ratings or absence of such ratings, (3) the liquidity of the overall capital markets, including but not limited to potential investors for a prospective financing, (4) the overall state of the economy, and (5) the prospects for our Company and the sectors in which we compete. In addition, the terms of the Nexstar Merger Agreement limit our ability to incur additional indebtedness. There can be no assurance that we will have access to the capital markets on terms acceptable to us.

We may incur significant costs to address contamination issues at sites owned, operated or used by our business.
We may incur costs in connection with the investigation or remediation of contamination at sites currently or formerly owned or operated by us. Historical operations at these sites may have resulted in releases of hazardous materials to soil or groundwater. In addition, we could be required to contribute to cleanup costs at third-party waste disposal facilities at which wastes were disposed. In connection with the Publishing Spin-off, troncTribune Publishing agreed to indemnify us for costs related to certain identified contamination issues at sites owned, operated or used by tronc.Tribune Publishing. In turn, we agreed to indemnify troncTribune Publishing for certain other environmental liabilities. Environmental liabilities, including investigation and remediation obligations, could adversely affect our operating results or financial condition.
Adverse results from litigation or governmental investigations can impact our business practices and operating results.
From time to time, we could beare party to litigation and regulatory, environmental and other proceedings with governmental authorities and administrative agencies. In addition, we are party to various ongoing proceedings relating to the Sinclair Merger. Adverse outcomes in lawsuits or investigations may result in significant monetary damages or injunctive relief that may adversely affect our operating results or financial condition as well as our ability to conduct our businesses as they are presently being conducted.
The financial performance of our equity method investments could adversely impact our results of operations.
We have investments in businesses that we account for under the equity method of accounting. Under the equity method, we report our proportionate share of the net earnings or losses of our equity affiliates in our Statement of Operations under “Income on equity investments, net,” which contributes to our income (loss) from continuing operations before income taxes. In fiscal 2017,2018, our income from equity investments, net was $137$169 million and we received $202$172 million in cash distributions from our equity investments. If the earnings or losses of our equity investments are material in any year, those earnings or losses may have a material effect on our net income (loss) and financial condition and liquidity. We do not control the day-to-day operations of our equity method investments, nor have the ability to cause them to pay dividends or make other payments or advances to their stockholders, including us, and thus the management of these businesses could impact our results of operations. Additionally, these businesses are subject to laws, regulations, market conditions and other risks inherent in their operations. Any of these factors could adversely impact our results of operations and the value of our investment.

Adverse conditions in the capital markets and/or lower long-term interest rates, changes in actuarial assumptions and legislative or other regulatory actions could substantially increase our pension costs, placing greater liquidity needs upon our operations.
We maintain four single-employer defined benefit plans, three of which, representing 98% of the total projected benefit obligation, are frozen. These plans were underfunded by $397$380 million as of December 31, 2017,2018, as measured in accordance with generally accepted accounting standards and using a discount rate of 3.55%4.20%.
The excess of our benefit obligations over pension assets is expected to give rise to required pension contributions over the next several years. Legislation enacted in 2012 and 2014 provided for changes in the discount rates used to calculate the projected benefit obligations for purposes of funding pension plans, which have an impact of applying a higher discount rate to determine the projected benefit obligations for funding than current long-term interest rates. Also, the earlier Pension Relief Act of 2010 provided relief in the funding requirements of such plans. However, even with the relief provided by these legislative rules, we expect future contributions to be required under our qualified pension plans. In addition, adverse conditions in the capital markets and/or lower long-term interest rates may result in greater annual contribution requirements, placing greater liquidity needs upon our operations. 
A breach of security measures for our information systems could disrupt operations and could adversely affect our businesses and results of operations.
Network and information systems and other technologies are important to our business activities. Despite our security measures, network and information systems-related events, such as computer hackings, cyber threats,

security breaches, viruses, or other destructive or disruptive software, process breakdowns or malicious or other activities, and natural or other disasters could result in a disruption of our services and operations or improper disclosure of personal data or confidential information, which could damage our reputation and require us to expend resources to remedy any such breaches. The occurrence of any of these events could have a material adverse effect on our business and results of operations.
We may incur fines or penalties, damage to our reputation or other adverse consequences if our employees, agents or business partners violate, or are alleged to have violated, anti-bribery, anti-money laundering, export controls, competition or other laws.
We are subject to a number of anti-bribery, anti-money laundering, export controls, competition and other laws, including U.S. and foreign anti-corruption laws and regulations, such as the Foreign Corrupt Practices Act (“FCPA”). These laws and regulations apply to companies, individual directors, officers, and employees, and to the activities of agents acting on our behalf, and may restrict our operations, trade practices, and partnering activities. We have established policies and procedures designed to assist us and our personnel to comply with applicable U.S. and international laws and regulations. However, there can be no assurance that our internal controls will protect us from reckless or criminal acts committed by our employees, agents or business partners that would violate U.S. and/or foreign laws, including anti-bribery laws, export controls laws, competition laws, anti-money laundering laws, trade sanctions and regulations, and other laws. Any such improper actions could subject us to civil or criminal investigations in the U.S. and in other jurisdictions, could lead to substantial civil or criminal monetary and non-monetary penalties against us or our subsidiaries, and could damage our reputation. Even the allegation or appearance of our employees, agents or business partners acting improperly or illegally could damage our reputation and result in significant expenditures in investigating and responding to such actions. Any of these developments could have a material adverse effect on our business, financial condition and results of operations.
Labor strikes, lockouts and protracted negotiations can lead to business interruptions and increased operating costs.
As of December 31, 2017,2018, union employees comprised approximately 22%23% of our workforce. We are required to negotiate collective bargaining agreements across our business units on an ongoing basis. Complications in labor negotiations can lead to work slowdowns or other business interruptions and greater overall employee costs. If we or our suppliers are unable to renew expiring collective bargaining agreements, it is possible that the affected unions or others could take action in the form of strikes or work stoppages. Such actions, higher costs in connection with these

agreements or a significant labor dispute could adversely affect our business by disrupting our operations. Depending on its duration, any lockout, strike or work stoppage may have an adverse effect on our operating revenues, cash flows or operating income or the timing thereof.
Events beyond our control may result in unexpected adverse operating results.
Our results could be affected in various ways by global or domestic events beyond our control, such as wars, political unrest, acts of terrorism, and natural disasters such as tropical storms, tornadoes and hurricanes. Such events may result in a loss of technical facilities for an unknown period of time and may quickly result in significant declines in advertising revenues even if we do not experience a loss of technical facilities.
The value of our existing goodwill and other intangible assets may become impaired, depending upon future operating results.
Goodwill and other intangible assets are a significant component of our consolidated total assets. We annually review for impairment in the fourth quarter of each year. In performing our reviews, we have the option of performing a qualitative assessment to determine whether it is more likely than not that the goodwill has been impaired. If we conclude that it is more-likely-than-not that a reporting unit’s goodwill is impaired, we apply the quantitative assessment. As part of the quantitative assessment, the estimated fair values of the reporting units to which goodwill has been allocated are determined using many critical factors, including projected future operating cash flows, revenue and market growth, market multiples, discount rates and consideration of market valuations of comparable companies. The estimated fair values of other intangible assets subject to the annual impairment review, which include FCC licenses, are generally calculated based on projected future discounted cash flow analyses. The

development of estimated fair values requires the use of assumptions, including assumptions regarding revenue and market growth as well as specific economic factors in the broadcasting industry. These assumptions reflect our best estimates, but these items involve inherent uncertainties based on market conditions generally outside of our control. In each of the fourth quarterquarters of 2015, as a result of the annual impairment review, we recorded a non-cash impairment charge of $385 million related to goodwill2018 and other intangible assets (see Note 7 to our audited consolidated financial statements for further information). In the fourth quarter of 2016, as a result of the annual impairment review, we recorded a non-cash impairment chargecharges of $3 million related to our other intangible assets. Based on our assessment, no impairments were identified in 2017.2017 (see Note 5 to our audited consolidated financial statements for further information).
Adverse changes in expected operating results and unfavorable changes in other economic factors used to estimate fair values could result in non-cash impairment charges in the future.
Changes in accounting standards can significantly impact reported earnings and operating results.
Generally accepted accounting principles and accompanying pronouncements and implementation guidelines for many aspects of our business, including those related to revenue recognition, intangible assets, pensions, leases, income taxes and broadcast rights, are complex and involve significant judgments. Changes in these rules or their interpretation may significantly change our reported earnings and operating results.
Risks Related to Regulation
Changes in U.S. communications laws or other regulations may have an adverse effect on our business operations and asset mix.
The television and radio broadcasting industry is subject to extensive regulation by the FCC under the Communications Act. For example, we are required to obtain licenses from the FCC to operate our radio and television stations with maximum terms of eight years, renewable upon application. We cannot assure you that the FCC will approve our future license renewal applications or that the renewals will be for full terms or will not include special operating conditions or qualifications. The non-renewal, or renewal with substantial conditions or modifications, of one or more of our licenses could have a material adverse effect on our revenues.
The U.S. Congress and the FCC currently have under consideration, and may in the future adopt, new laws, regulations and policies regarding a wide variety of matters that could, directly or indirectly, affect the operation of our radio and television properties. For example, from time to time, proposals have been advanced in the U.S. Congress and at the FCC to shorten license terms for broadcast stations to less than eight years, to mandate the

origination of certain levels and types of local programming, or to require radio and television broadcast stations to provide free advertising time to political candidates.
Federal legislation enacted in February 2012 authorized the FCC to conduct a voluntary “incentive auction” in order to reclaim certain spectrum currently occupied by television broadcast stations and reallocate spectrum to mobile wireless broadband services. The legislation also authorized the FCC to “repack” television stations into a smaller portion of the existing television spectrum band and to require some television stations to modify their transmission facilities, subject to reimbursement for reasonable relocation costs up to an industry-wide total of $1.750 billion.billion, which amount was increased by $1 billion pursuant to the adoption of an amended version of the Repack Airwaves Yielding Better Access for Users of Modern Services (RAY BAUM’S) Act of 2018 by the U.S. Congress on March 23, 2018. On April 13, 2017, the FCC announced the conclusion of the incentive auction, the results of the reverse and forward auction and the repacking of broadcast television spectrum. We participated in the auction and have received approximately $191 million in pretax proceeds (including $26 million of proceeds received by a Dreamcatcher station) as of December 31, 2017.
Twenty-two of our television stations (including WTTK, which operates as a satellite station of WTTV) will beare required to change frequencies or otherwise modify their operations as a result of the repacking. In doing so, the stations could incur substantial conversion costs, reduction or loss of over-the-air signal coverage or an inability to provide high definition programming and additional program streams. We expect that the reimbursements from the FCC’s special fund will cover the majority of our expenses related to the repacking. However, we cannot currently predict the effect of the repacking, whether the special fund will be sufficient to reimburse all of our expenses related to the repacking, the timing of reimbursements or any spectrum-related FCC regulatory action.

New laws or regulations that eliminate or limit the scope of retransmission consent or “must carry” rights could significantly reduce our ability to obtain carriage and therefore revenues.
A number of entities have commenced operation, or announced plans to commence operation of the Internet Protocol television (“IPTV”) systems, using digital subscriber line, fiber optic to the home and other distribution technologies. In most cases, we have entered into retransmission consent agreements with such entities for carriage of our eligible stations. However, the issue of whether those services are subject to cable television regulations, including must carry or retransmission consent obligations, has not been resolved. If IPTV systems gain a significant share of the video distribution marketplace, and new laws and regulations fail to provide adequate must carry and/or retransmission consent rights, our ability to distribute our programming to the maximum number of potential viewers will be limited and consequently our revenue potential will be limited.
In March 2014, the FCC sought comment on whether to eliminate or modify its “network non-duplication” and “syndicated exclusivity” rules, pursuant to which local television stations may invoke FCC processes to enforce their contractual exclusivity rights with respect to their network and syndicated programming. This proceeding remains pending. In February 2015, pursuant to congressional directive under STELAR (enacted in December 2014), the FCC adopted regulations prohibiting a television station from coordinating retransmission consent negotiations or negotiating retransmission consent on a joint basis with a separately owned television station in the same market. We do not currently engage in retransmission consent negotiations jointly with any other stations in our markets.
The FCC also must implement other provisions in STELAR that could affect retransmission consent negotiations. On September 2, 2015, in response to Congress’s directive in STELAR that the FCC review the “totality of the circumstances” test, the FCC sought comment on whether it should revise its rules requiring that commercial broadcast television stations and MVPDs negotiate in “good faith” for the retransmission by MVPDs of local television signals. On July 14, 2016, Chairmanthen-Chairman Wheeler announced that the FCC will not adopt additional rules governing parties’ good faith negotiation obligations, however, the FCC has not yet formally terminated the proceeding. The FCC launched a proceeding in March 2015 concerning procedures for modification of a station’s “market” for purposes of determining its entitlement to cable and/or satellite carriage in certain circumstances. We cannot predict the outcome of these proceedings.

Ownership restrictions could adversely impact our operations.
Under the FCC’s Duopoly Rule, in effect on December 31, 2017, we may ownhold attributable interests in up to two television stations within the same DMA (i) provided certain specified signal contours of the stations do not overlap, (ii) where certain specified signal contours of the stations overlap but, at the time the station combination was created, no more than one of the stations was a top-four-rated station and the market would continue to have at least eight independently-owned full power stations after the station combination is created or (iii) where certain waiver criteria are met. In addition, in the 2014 Quadrennial Review Order the FCC, among other things, adopted a rule applying the “top-four” ownership limitation to “affiliation swaps” within a market, thereby prohibiting transactions between networks and their local station affiliates pursuant to which affiliations are reassigned in a way that results in common ownership or control of two of the top-four rated stations in the DMA. Such arrangements existing prior to the rule’s adoption are grandfathered, and the prohibition does not apply to multiple top-four network multicast streams broadcast by a single station. In theThe 2014 Quadrennial Review Reconsideration Order effective on February 7, 2018, the FCC eliminated the eight-voices test and provides for case-by-case review of the presumption against television combinations involving two top-four ranked stations in a market. On December 13, 2018, the FCC initiated the 2018 Quadrennial Review, which, among other things, seeks comment on all aspects of the Duopoly Rule’s application and implementation, including whether the rule remains necessary to serve the public interest in the current television marketplace. We cannot predict the outcome of these proceedings, or their effect on our business.
We own duopolies permitted in the Seattle, Denver, St. Louis, Indianapolis, Oklahoma City and New Orleans DMAs. The Indianapolis duopoly is permitted under the Duopoly Rule because it met the top-four/eight voicestop-four test applicable at the time we acquired WTTV(TV)/WTTK(TV) in July 2002. Duopoly Rule waivers granted in connection with the FCC’s approval of the Plan or the Local TV Transfer Order authorize our ownership of duopolies in the Hartford-New Haven and Fort Smith-Fayetteville DMAs, and full power “satellite” stations in the Denver and Indianapolis DMAs. All of these combinations are permitted under the Duopoly Rule as revised by the 2014 Quadrennial Review Reconsideration Order, subject to reauthorization of any outstanding waivers in the event of the assignment or transfer of control of any of the affected station licenses.

The FCC’s “National Television Multiple Ownership Rule” prohibits an entity from having attributable interests in television stations that, in the aggregate, reach more than 39% of total U.S. television households, subject to a 50% discount (the “UHF Discount”). In a Report andthe UHF Discount Repeal Order, issued on September 7, 2016, the FCC repealed the UHF Discount but grandfathered existing station combinations, like ours, that exceeded the 39% national reach cap as a result of the elimination of the UHF Discount, subject to compliance in the event of a future change of control or assignment of license. The FCC reinstated the UHF Discount in an Order on Reconsideration adopted on April 20, 2017 (the “UHF Discount Reconsideration Order”). Both the September 7, 2016 order repealing the UHF Discount and the April 20, 2017 order reinstating it are subject to pending petitionsReconsideration Order. A petition for judicial review of the UHF Discount Reconsideration Order by the U.S. Court of Appeals for the District of Columbia Circuit. Circuit was dismissed on jurisdictional grounds on July 25, 2018. A petition for review of the UHF Discount Repeal Order by the U.S. Court of Appeals for the District of Columbia Circuit was dismissed as moot on December 19, 2018.
Our current national reach exceeds the 39% cap on an undiscounted basis, but complies with the cap on a discounted basis. On December 18, 2017, the FCC released a noticeNotice of proposed rulemakingProposed Rulemaking seeking comment generally on the continuing propriety of a national cap and the Commission’s jurisdiction with respect to the cap. We cannot predict the outcome of these proceedings, or their effect on our business.
The NBCO Rule in effect on December 31, 2017 prohibits the common ownership of an attributable interest in a daily newspaper and a broadcast station in the same market. Our former attributable television/newspaper interests were granted either temporary or permanent waivers of the NBCO Rule in connection with the FCC’s approval of the Plan. On November 12, 2013, we filed with the FCC a request for extension of the temporary NBCO Rule waivers granted in connection with its approval of the Plan. That request is pending. Meanwhile, in the 2014 Quadrennial Review Order, effective December 31, 2017, the FCC modified the NBCO Rule by providing an exception for failed or failing entities and allowing for consideration of waivers of the rule on a case-by-case basis. The new rules became effective on December 1, 2016. The 2014 Quadrennial Review Reconsideration Order eliminated the NBCO Rule altogether effective as of February 7, 2018.
Under FCC policy and precedent, a television station or newspaper publisher may provide certain operational support and other services to a separately-owned television station in the same market pursuant to a SSA where the Duopoly Rule or NBCO Rule would not permit common ownership of the properties. In the Local TV Transfer Order, the FCC authorized us to provide services (not including advertising sales) under SSAs to the Dreamcatcher stations. In the 2014 Quadrennial Review Order, the FCC adopted reporting requirements for SSAs. This rule was retained in the 2014 Quadrennial Review Reconsideration Order.
The 2014 Quadrennial Review Order is the subject of a pending petition judicial review by the U.S. Court of Appeals for the Third Circuit. A petition for judicial review of the 2014 Quadrennial Review Reconsideration Order was filed on January 16, 2018 at the U.S. Court of Appeals for the Third Circuit and is pending. We cannot predict the outcome of these proceedings or their effect on our business.
Regulation related to our licenses could adversely impact our results of operations.
The FCC has numerous other regulations and policies that affect its licensees, including rules requiring closed-captioning and video description to assist television viewing by the hearing- and visually-impaired; an EEO rule which, among other things, requires broadcast licensees to implement an equal employment opportunity program and undertake certain outreach initiatives to ensure broad recruitment efforts, and prohibits discrimination by broadcast stations based on age, race, color, religion, national origin or gender; and a requirement that all broadcast station advertising contracts contain nondiscrimination clauses. In addition, both television and radio station licensees are required to collect, submit to the FCC and/or maintain for public inspection extensive documentation regarding a number of aspects of their station operations.

Increased enforcement or enhancement of FCC indecency and other program content rules could have an adverse effect on our businesses and results of operations.
FCC rules prohibit the broadcast of obscene material at any time and/orand prohibit the broadcast of indecent or profane material on television or radio broadcast stations between the hours of 6 a.m. and 10 p.m. Several years ago, the FCC stepped up its enforcement activities as they apply to indecency, and has indicated that it would consider initiating license revocation proceedings for “serious” indecency violations. In the past several years, the FCC has found indecent content in a number of cases and has issued fines to the offending licensees. The current maximum permitted fines per station if the violator is determined by the FCC to have broadcast obscene, indecent or profane material are $397,251 per incident and $3.7 million for a continuing violation, and the amount is subject to periodic adjustment for inflation. Fines have been assessed on a station-by-station basis, so that the broadcast of network programming containing allegedly indecent or profane material has resulted in fines levied against each station affiliated with that network which aired the programming containing such material. In June 2012, the U.S. Supreme Court struck down, on due process grounds, FCC Notices of Apparent Liability issued against stations affiliated with the FOX and ABC television networks in connection with their broadcast of “fleeting” or brief broadcasts of expletives or nudity and remanded the case to the FCC for further proceedings consistent with the U.S. Supreme Court’s opinion. In September 2012, the Chairman of the FCC directed FCC staff to commence a review of the FCC’s indecency policies, and to focus indecency enforcement on egregious cases while reducing the backlog of pending broadcast indecency complaints. On April 1, 2013, the FCC issued a public notice seeking comment on whether the FCC should make changes to its current broadcast indecency policies or maintain them as they are. The proceeding to review the FCC’s indecency policies is pending, and we cannot predict the timing or outcome of the proceeding. The determination of whether content is indecent is inherently subjective and therefore it can be difficult to predict whether particular content could violate indecency standards, particularly where programming is live and spontaneous. Violation of the indecency rules could lead to sanctions that may adversely affect our business and results of operations.
Direct or indirect ownership of our securities could result in the violation of the FCC’s media ownership rules by investors with “attributable interests” in certain other television stations or other media properties in the same market as one or more of our broadcast stations.
Under the FCC’s media ownership rules, a direct or indirect owner of our securities could violate the FCC’s structural media ownership limitations if that person or entity owned or acquired an “attributable” interest in certain other television stations nationally or in certain types of media properties in the same market as one or more of our broadcast stations. Under the FCC’s “attribution” policies the following relationships and interests generally are cognizable for purposes of the substantive media ownership restrictions: (1) ownership of 5% or more of a media company’s voting stock (except for investment companies, insurance companies and bank trust departments, whose holdings are subject to a 20% voting stock benchmark); (2) officers and directors of a media company and its direct or indirect parent(s); (3) any general partnership or limited liability company manager interest; (4) any limited partnership interest or limited liability company member interest that is not “insulated,” pursuant to FCC-prescribed criteria, from material involvement in the management or operations of the media company; (5) certain same-market time brokerage agreements; (6) certain same-market joint sales agreements; and (7) under the FCC’s “equity/debt plus” standard, otherwise non-attributable equity or debt interests in a media company if the holder’s combined equity and debt interests amount to more than 33% of the “total asset value” of the media company and the holder has certain other interests in another media property in the same market television station JSAs. This change became effective on February 7, 2018. A petition for judicial review of the 2014 Quadrennial Review Reconsideration Order was filed on January 16, 2018 at the U.S. Court of Appeals for the Third Circuit and is pending. We cannot predict the outcome of these proceedings or their effect on our business. Investors in our Common Stock should consult with counsel before making significant investments in Tribune or other media companies.

Risks Related to Our Indebtedness
We have substantial indebtedness and may incur substantial additional indebtedness, which could adversely affect our financial health and our ability to obtain financing in the future as well as to react to changes in our business.
As of December 31, 2017,2018, we had total indebtedness of approximately $2.919$2.926 billion, net of unamortized discount and debt issuance costs of $36$29 million, and our interest expense for the year ended December 31, 20172018 was $159$169 million. On January 27, 2017, we entered into an amendment to the Company’s Secured Credit Facility as further described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Significant Events—Financing Activities.”(as defined herein). As of December 31, 2017,2018, we also had $420$338 million of availability under our Revolving Credit Facility (as defined herein), not including $21$20 million of undrawn letters of credit. We are able to incur additional indebtedness in the future, subject to the limitations contained in the agreements governing our indebtedness and the Nexstar Merger Agreement. On February 1, 2017, we used $400 million of proceeds from the Gracenote Sale to prepay a portion of our Term Loan Facility. During the third quarter of 2017, we used $102 million of after-tax proceeds received from our participation in the FCC spectrum auction to prepay a portion of our Term Loan Facility. Our substantial indebtedness could have important consequences to holders of our Common Stock, including:
making it more difficult for us to satisfy our obligations with respect to our Secured$4.073 billion secured credit facility with a syndicate of lenders led by JP Morgan Chase Bank, N.A. (“JP Morgan”) (the “Secured Credit Facility,Facility”), consisting of a $3.773 billion term loan facility (the “Term Loan Facility”), of which the outstanding principal as of December 31, 20172018 totaled $1.856 billion, and a $420$338 million revolving credit facility (the “Revolving Credit Facility”), our $1.100 billion in aggregate principal amount of 5.875% Senior Notes due 2022 (the “Notes”) and our other debt;
limiting our ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions or other general corporate requirements;
requiring a substantial portion of our cash flows to be dedicated to debt service payments instead of other purposes, thereby reducing the amount of cash flows available for working capital, capital expenditures, acquisitions and other general corporate purposes;
increasing our vulnerability to general adverse economic and industry conditions;
exposing us to the risk of increased interest rates as certain of our borrowings, including under the Secured Credit Facility, are at variable rates of interest;
limiting our flexibility in planning for and reacting to changes in the industry in which we compete;
placing us at a disadvantage compared to other, less leveraged competitors or competitors with comparable debt and more favorable terms and thereby affecting our ability to compete; and
increasing our cost of borrowing.
We may not be able to generate sufficient cash to service our indebtedness, and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.
Our ability to make scheduled payments on or refinance our debt obligations will depend on our financial condition and operating performance, which are subject to prevailing economic and competitive conditions and to financial, business, legislative, regulatory and other factors beyond our control. We might not be able to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness.
Certain factors that may cause our revenues and operating results to vary include, but are not limited to:
discretionary spending available to advertisers and consumers;
technological change in the broadcasting industry;
shifts in consumer habits and advertising expenditures toward digital media; and
changes in the regulatory landscape.

One or a number of these factors could cause a decrease in the amount of our available cash flow, which would make it more difficult for us to make payments under the Notes and Secured Credit Facility or any other indebtedness. For additional information regarding the risks to our business that could impair our ability to satisfy our obligations under our indebtedness, see “—Risks Related to Our Business.”
If our cash flows and capital resources are insufficient to fund our debt service obligations, we could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures or to dispose of material assets or operations, seek additional debt or equity capital or restructure or refinance our indebtedness. We may not be able to affect any such alternative measures on commercially reasonable terms or at all and, even if successful, those alternative actions may not allow us to meet our scheduled debt service obligations. The agreements governing our indebtedness restrict our ability to dispose of assets and use the proceeds from those dispositions and also restrict our ability to raise debt to be used to repay other indebtedness when it becomes due. We may not be able to consummate those dispositions or to obtain proceeds in an amount sufficient to meet any debt service obligations then due. In addition, under the Secured Credit Facility, we are subject to mandatory prepayments on our Term Loan Facility from a portion of our excess cash flows, which may be stepped down upon the achievement of specified first lien leverage ratios. To the extent that we are required to prepay any amounts under our Term Loan Facility, we may have insufficient cash to make required principal and interest payments on other indebtedness.
Our inability to generate sufficient cash flows to satisfy our debt obligations, or to refinance our indebtedness on commercially reasonable terms or at all, would materially and adversely affect our financial condition and results of operations and our ability to satisfy our obligations under our indebtedness.
If we cannot make scheduled payments on our debt, we will be in default and lenders under our Secured Credit Facility and holders of the Notes could declare all outstanding principal and interest to be due and payable, the lenders under the Revolving Credit Facility could terminate their commitments to loan money, the lenders could foreclose against the assets securing their loans and we could be forced into bankruptcy or liquidation. All of these events could result in you losing some or all of the value of your investment.
Despite our substantial indebtedness, we and our subsidiaries may be able to incur substantially more debt. This could further exacerbate the risks associated with our substantial indebtedness.
We and our subsidiaries may incur significant additional indebtedness in the future. Although the Nexstar Merger Agreement, the Secured Credit Facility and the indenture governing the Notes contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and the additional indebtedness incurred in compliance with these restrictions could be substantial. The terms of the Nexstar Merger Agreement also restrict our ability to incur additional indebtedness, including guarantees, other than intercompany indebtedness and borrowings in the ordinary course consistent with past practice under the Revolving Credit Facility. These restrictions also will not prevent us from incurring obligations that do not constitute indebtedness. In addition, the Revolving Credit Facility currently provides for commitments of $420$338 million, which are currently available, except for $21$20 million of undrawn outstanding letters of credit. Additionally, the indebtedness under the Secured Credit Facility may be increased by an amount equal to the sum of (x) $1.0 billion, (y) the maximum amount that would not cause our net first lien leverage ratio (treating debt incurred in reliance of this basket as secured on a first lien basis whether or not so secured), as determined pursuant to the Secured Credit Facility, to exceed 4.50 to 1.00 and (z) the aggregate amount of voluntary prepayments of term loans other than from the proceeds of long-term debt, subject to certain other conditions. If new debt is added to our current debt levels, the related risks that we and the guarantors now face would increase and we may not be able to meet all our debt obligations.

The terms of the agreements governing our indebtedness restrict our current and future operations, particularly our ability to respond to changes or to take certain actions, which could harm our long-term interests.
The Secured Credit Facility and the indenture governing the Notes contain covenants that, among other things, impose significant operating and financial restrictions on us and limit our ability to engage in actions that may be in our long-term best interest, including restrictions on our ability to:
sell or otherwise dispose of assets;
incur additional indebtedness (including guarantees of additional indebtedness);
pay dividends and make other distributions in respect of, or repurchase or redeem, capital stock;
make voluntary prepayments on certain debt (including the Notes) or make amendments to the terms thereof;
create liens on assets;
make loans and investments (including joint ventures);
engage in mergers, consolidations or sales of all or substantially all of our assets;
engage in certain transactions with affiliates; and
change the business conducted by us.
These covenants are subject to a number of important exceptions and qualifications. In addition, the restrictive covenants in the Secured Credit Facility require us to maintain a net first lien leverage ratio, which shall only be applicable to the Revolving Credit Facility and will be tested at the end of each fiscal quarter if revolving loans, swingline loans and outstanding unpaid letters of credit (other than undrawn letters of credit and those letters of credit that have been fully cash collateralized) exceed 25%35% of the amount of revolving commitments. Our ability to satisfy that financial ratio test may be affected by events beyond our control.
A breach of the covenants under the agreements governing our indebtedness could result in an event of default under those agreements. Such a default may allow certain creditors to accelerate the related debt and may result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies. In addition, an event of default under the Secured Credit Facility would also permit the lenders under the Revolving Credit Facility to terminate all other commitments to extend further credit under that facility. Furthermore, if we were unable to repay the amounts due and payable under the Secured Credit Facility, those lenders could proceed against the collateral granted to them to secure that indebtedness. In the event the lenders accelerate the repayment of our borrowings, we and our subsidiaries may not have sufficient assets to repay that indebtedness.
As a result of all of these restrictions, we may be:
limited in how we conduct our business;
unable to raise additional debt or equity financing to operate during general economic or business downturns;
unable to compete effectively or to take advantage of new business opportunities; or
limited or unable to pay dividends to our shareholders in certain circumstances.
These restrictions might hinder our ability to grow in accordance with our strategy.
Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.
Borrowings under the Secured Credit Facility are at variable rates of interest and expose us to interest rate risk. Interest rates are currently at historically low levels. If interest rates increase, our debt service obligations on the variable rate indebtedness will increase even though the amount borrowed remains the same, and our net income and

cash flows, including cash available for servicing our indebtedness, will correspondingly decrease. Assuming all revolving loans are fully drawn (to the extent that the London Interbank Offered Rate (“LIBOR”) is in excess of the current 0.75% minimum rate under the Secured Credit Facility), each quarter point change in interest rates would result in a $5 million change in our projected annual interest expense on our indebtedness under the Secured Credit Facility, which may be mitigated by interest rate swaps with a notional value of $500 million. As discussed in Note 108 to our audited consolidated financial statements, we entered intoare a party to certain interest rate swaps with a notional value of $500 million that involve the exchange of floating for fixed rate interest payments in order to reduce future interest rate volatility of the variable interest payments related to the Term Loan Facility. While the current expectation is to maintain the interest rate swaps through maturity of the Term Loan Facility, due to risks for hedging gains and losses and cash settlement costs, we may not elect to maintain such interest rate swaps with respect to any of our variable rate indebtedness, and any swaps we enter into may not fully mitigate our interest rate risk.
A downgrade, suspension or withdrawal of the rating assigned by a rating agency to us or our indebtedness could make it more difficult for us to obtain additional debt financing in the future.
Our indebtedness has been rated by nationally recognized rating agencies and may in the future be rated by additional rating agencies. We cannot assure you that any rating assigned to us or our indebtedness will remain for any given period of time or that a rating will not be lowered or withdrawn entirely by a rating agency if, in that rating agency’s judgment, circumstances relating to the basis of the rating, such as adverse changes in our business, so warrant. On December 20, 2016, Moody’s announced that it had downgraded our Corporate Family Rating from Ba3 to B1. Any further downgrades or any suspension or withdrawal of a rating by a rating agency (or any anticipated downgrade, suspension or withdrawal) could make it more difficult or more expensive for us to obtain additional debt financing in the future.
Risks Related to Our Emergence from Bankruptcy
We may not be able to settle, on a favorable basis or at all, unresolved claims filed in connection with the Chapter 11 proceedings and resolve the appeals seeking to overturn the order confirming the Plan.
On December 31, 2012, we and 110 of our direct and indirect wholly-owned subsidiaries (collectively, the “Debtors”) that had filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court on December 8, 2008 (or on October 12, 2009, in the case of Tribune CNLBC, LLC) emerged from Chapter 11. Certain of the Debtors’ Chapter 11 cases have not yet been closed by the Bankruptcy Court, and certain claims asserted against the Debtors in the Chapter 11 cases remain unresolved. As a result, we expect to continue to incur certain expenses pertaining to the Chapter 11 proceedings in future periods, which may be material.
On April 12, 2012, the Debtors, the official committee of unsecured creditors, and creditors under certain of our prepetition debt facilities filed the Plan with the Bankruptcy Court. On July 23, 2012, the Bankruptcy Court issued an order confirming the Plan (the “Confirmation Order”).
Several notices of appeal of the Confirmation Order were filed. The appellants sought, among other relief, to overturn the Confirmation Order and certain prior orders of the Bankruptcy Court, in whole or in part, including the settlement of certain causes of action relating to the Leveraged ESOP Transactions consummated by Tribune and the ESOP, EGI-TRB, L.L.C., a Delaware limited liability company wholly-owned by Sam Investment Trust (a trust established for the benefit of Samuel Zell and his family) (the “Zell Entity”) and Samuel Zell in 2007, that was embodied in the Plan (see Note 310 to our audited consolidated financial statements for further information). Notices
More specifically, notices of appeal were filed on August 2, 2012 by Wilmington Trust Company (“WTC”), as successor indenture trustee for the Predecessor’s Exchangeable Subordinated Debentures due 2029 (“PHONES”), and on August 3, 2012 by the Zell Entity, Aurelius Capital Management LP, (“Aurelius”), Law Debenture Trust Company of New York (n/k/a Delaware Trust Company) (“Law Debenture”Delaware Trust Company”), successor trustee under the indenture for the Predecessor’s prepetition 6.61% debentures due 2027 and the 7.25% debentures due 2096 and Deutsche Bank Trust Company Americas, (with Law Debenture, the “Trustees”), successor trustee under the indentures for the Predecessor’s prepetition medium-term notes due 2008, 4.875% notes due 2010, 5.25% notes due 2015, 7.25% debentures due 2013 and 7.5% debentures due 2023. WTC and the Zell Entity also sought to overturn determinations made by the Bankruptcy Court concerning the

priority in right of payment of the PHONES and the subordinated promissory notes held by the Zell Entity and its permitted assignees, respectively. In January 2013,
As of December 31, 2018, each of the Reorganized Debtors filedConfirmation Order appeals have been dismissed or otherwise resolved by a motion to dismiss

final order, with the exception of the appeals as equitably moot, based on the substantial consummation of the Plan.Delaware Trust Company and Deutsche Bank. On June 18, 2014,July 30, 2018, the United States District Court for the District of Delaware (the “Delaware District“District Court”) entered an order granting in partaffirming (i) the Bankruptcy Court’s judgment overruling Delaware Trust Company’s and denying in part the motionDeutsche Bank’s objections to dismiss. The effect of the order was to dismiss all of the appeals, with the exception of the relief requested by the Zell Entity concerning the priority in right of payment of the subordinated promissory notes held by the Zell Entity and its permitted assignees with respect to any state law fraudulent transfer claim recoveries from a creditor trust that was proposed to be formed under a prior versionconfirmation of the Plan but was not formed under the Plan as confirmed by the Bankruptcy Court. The Delaware District Court vacatedand (ii) the Bankruptcy Court’s ruling toorder confirming the extent it opined on that issue. On July 16, 2014, AureliusPlan. Delaware Trust Company and Deutsche Bank appealed the Trustees filed notices of appeal of the Delaware District Court’s order withto the U.S.United States Court of Appeals for the Third Circuit (the “Third Circuit”). On on August 19, 2015,27, 2018. That appeal remains pending before the Third Circuit affirmed the order of the Delaware District Court as to the appeal filed by Aurelius but reversed and remanded as to the appeal filed by the Trustees. On January 11, 2016, Aurelius filed a petition for a writ of certiorari with the United States Supreme Court seeking review of the Third Circuit’s decision. That petition was denied on March 31, 2016.Circuit. If the Trustees are successful in overturningremaining appellants succeed on their appeals, the Confirmation Order, in whole or in part, ourCompany’s financial condition may be adversely affected.
Risks Relating to Our Common Stock and the Securities Market
We cannot assure you that we will pay dividends on our Common Stock in the future.
On February 3, 2017, we paid a special cash dividend of $5.77 per share to holders of record of our Common Stock at the close of business on January 13, 2017. Pursuant to the Nexstar Merger Agreement, during the period before closing of the Nexstar Merger, we are not permitted to declare, set aside or pay any dividend or make any other distribution in respect of our capital stock or other securities, except for payment of quarterly cash dividends not to exceed $0.25 per share and consistent with record and payment dates during the year preceding the Nexstar Merger Agreement.
The declaration of any future dividends and the establishment of the per share amount, record dates and payment dates for any such future dividends are subject to the discretion of the board of directors, subject to the terms and conditions of the Nexstar Merger Agreement, taking into account future earnings, cash flows, financial requirements and other factors. There can be no assurance that the board of directors will declare any dividends in the future. To the extent that expectations by market participants regarding the potential payment, or amount, of any special or regular dividend prove to be incorrect, the price of our Common Stock may be materially and negatively affected and investors that bought shares of our Common Stock based on those expectations may suffer a loss on their investment. Further, to the extent that we declare a regular or special dividend at a time when market participants hold no such expectations or the amount of any such dividend exceeds current expectations, the price of our Common Stock may increase and investors that sold shares of our Common Stock prior to the record date for any such dividend may forego potential gains on their investment.
The market price for our Common Stock may be volatile and the value of your investment could decline.
Many factors could cause the trading price of our Common Stock to rise and fall, including the following:
announcements or other developments related to the Nexstar Merger;
announcements or other developments related to legal proceedings related to the termination of the Sinclair or its business;Merger Agreement;
declining operating revenues derived from our core business;
variations in quarterly results;
availability and cost of programming;
announcements regarding dividends;
announcements of technological innovations by us or by competitors;
introductions of new products or services or new pricing policies by us or by competitors;
acquisitions or strategic alliances by us or by competitors;
recruitment or departure of key personnel or key groups of personnel;

the gain or loss of significant advertisers or other customers;

changes in securities analysts’ estimates of our performance or lack of research and reports by industry analysts; and
market conditions in the media industry, the industries of our customers, and the economy as a whole.
If securities or industry analysts do not publish research or publish misleading or unfavorable research about our business, our stock price and trading volume could decline.
The trading market for our Common Stock may depend in part on the research and reports that securities or industry analysts publish about us or our business. If one or more of these analysts downgrades our stock or publishes misleading or unfavorable research about our business, our stock price would likely decline. If one or more of these analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our stock may decrease, which could cause our stock price or trading volume to decline.
Our second amended and restated certificate of incorporation, as amended, designates the Court of Chancery of the State of Delaware as the exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us.
Our second amended and restated certificate of incorporation, as amended, provides that the Court of Chancery of the State of Delaware is the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed to us or our stockholders by any of our directors, officers, employees or agents, (iii) any action asserting a claim against us arising under the General Corporation Law of the State of Delaware (the “DGCL”), our second amended and restated certificate of incorporation, as amended, or our amended and restated by-laws or (iv) any action asserting a claim against us that is governed by the internal affairs doctrine. Stockholders of our company will be deemed to have notice of and have consented to the provisions of our second amended and restated certificate of incorporation, as amended, related to choice of forum. The choice of forum provision in our second amended and restated certificate of incorporation, as amended, may limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us.
Fulfilling our obligations incident to being a public company, including with respect to the requirements of and related rules under the Sarbanes-Oxley Act of 2002, is expensive and time-consuming and may not prevent all errors or fraud.
As a public company, we are required to file annual, quarterly and other reports with the SEC, including the timely filing of financial statements that comply with SEC reporting requirements. We are also subject to other reporting and corporate governance requirements under the listing standards of the NYSE and the Sarbanes-Oxley Act of 2002, which impose significant compliance costs and obligations upon us. Being a public company requires a significant commitment of resources and management oversight which also increases our operating costs. These requirements also place significant demands on our finance and accounting staff and on our financial accounting and information technology applications. Other expenses associated with being a public company include increases in auditing, accounting and legal fees and expenses, investor relations expenses, increased directors’ fees and director and officer liability insurance costs, registrar and transfer agent fees and listing fees, as well as other expenses.
In particular, we are required to perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting, as required by Section 404(a) of the Sarbanes-Oxley Act of 2002. Likewise, our independent registered public accounting firm is required to provide an attestation report on the effectiveness of our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002. In addition, we are required under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), to maintain disclosure controls and procedures and internal control over financial reporting. We have in the past identified a material weakness in our internal control over financial reporting and we cannot assure you that our system of internal controls will be able to prevent material weaknesses in our internal controls in the future.
Failure to comply with the Sarbanes-Oxley Act of 2002 could potentially subject us to sanctions or investigations by the SEC or other regulatory authorities. In addition, because of the inherent limitations in all

control systems, no evaluation of controls can provide absolute assurance that all control issues or instances of fraud, if any, within our company have been detected.

Certain provisions of our certificate of incorporation, by-laws and Delaware law may discourage takeovers.
Our second amended and restated certificate of incorporation, as amended, and amended and restated by-laws contain certain provisions that may discourage, delay or prevent a change in our management or control over us. For example, our second amended and restated certificate of incorporation, as amended, and amended and restated by-laws, collectively:
establish a classified board of directors, as a result of which our Board of Directors is divided into three classes, with members of each class serving staggered three-year terms, which prevents stockholders from electing an entirely new board of directors at an annual or special meeting;
authorize the issuance of “blank check” preferred stock that could be issued by our Board of Directors to thwart a takeover attempt;
provide that vacancies on our Board of Directors, including vacancies resulting from an enlargement of our Board of Directors, may be filled only by a majority vote of directors then in office; and
establish advance notice requirements for nominations of candidates for elections as directors or to bring other business before an annual meeting of our stockholders.
These provisions could discourage potential acquisition proposals and could delay or prevent a change in control, even though a majority of stockholders may consider such proposal, if effected, desirable. Such provisions could also make it more difficult for third parties to remove and replace the members of the Board of Directors. Moreover, these provisions may inhibit increases in the trading price of our Common Stock that may result from takeover attempts or speculation.
Risks Related to the Publishing Spin-Off
If the Publishing Spin-off does not qualify as a tax-free distribution under Section 355 of the U.S. Internal Revenue Code of 1986, as amended (“IRC” or the “Code”), including as a result of subsequent acquisitions of stock of Tribune Media or tronc,Tribune Publishing, then Tribune Media may be required to pay substantial U.S. federal income taxes.
In connection with the Publishing Spin-off, we received a private letter ruling (the “IRS Ruling”) from the IRS to the effect that the distribution and certain related transactions qualified as tax-free to us, our stockholders and warrantholders and troncTribune Publishing for U.S. federal income tax purposes. Although a private letter ruling from the IRS generally is binding on the IRS, the IRS Ruling did not rule that the distribution satisfies every requirement for a tax-free distribution, and the parties have relied on the opinion of Debevoise & Plimpton LLP, our special tax counsel, to the effect that the distribution and certain related transactions qualified as tax-free to us and our stockholders and warrantholders. The opinion of our special tax counsel relied on the IRS Ruling as to matters covered by it.
The IRS Ruling and the opinion of our special tax counsel was based on, among other things, certain representations and assumptions as to factual matters made by us and certain of our stockholders. The failure of any factual representation or assumption to be true, correct and complete in all material respects could adversely affect the validity of the IRS Ruling or the opinion of our special tax counsel. An opinion of counsel represents counsel’s best legal judgment, is not binding on the IRS or the courts, and the IRS or the courts may not agree with the opinion. In addition, the IRS Ruling and the opinion of our special tax counsel was based on the current law then in effect, and cannot be relied upon if current law changes with retroactive effect.
If the Publishing Spin-off was ultimately determined not to be tax free, we could be liable for the U.S. federal and state income taxes imposed as a result of the transaction. Furthermore, events subsequent to the distribution could cause us to recognize a taxable gain in connection therewith. Although troncTribune Publishing is required to indemnify us against taxes on the distribution that arise after the distribution as a result of actions or failures to act by troncTribune Publishing or any

member thereof, tronc’sTribune Publishing’s failure to meet such obligations and our administrative and legal costs in enforcing such obligations may have a material adverse effect on our financial condition.

Federal and state fraudulent transfer laws and Delaware corporate law may permit a court to void the Publishing Spin-off, which would adversely affect our financial condition and our results of operations.
In connection with the Publishing Spin-off, we undertook several corporate reorganization transactions which, along with the contribution of the Publishing Business, the distribution of troncTribune Publishing shares and the cash dividend that was paid to us, may be subject to challenge under federal and state fraudulent conveyance and transfer laws as well as under Delaware corporate law, even though the Publishing Spin-off has been completed. Under applicable laws, any transaction, contribution or distribution contemplated as part of the Publishing Spin-off could be voided as a fraudulent transfer or conveyance if, among other things, the transferor received less than reasonably equivalent value or fair consideration in return for, and was insolvent or rendered insolvent by reason of, the transfer.
We cannot be certain as to the standards a court would use to determine whether or not any entity involved in the Publishing Spin-off was insolvent at the relevant time. In general, however, a court would look at various facts and circumstances related to the entity in question, including evaluation of whether or not:
the sum of its debts, including contingent and unliquidated liabilities, was greater than the fair market value of all of its assets;
the present fair market value of its assets was less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they become absolute and mature; or
it could pay its debts as they become due.
If a court were to find that any transaction, contribution or distribution involved in the Publishing Spin-off was a fraudulent transfer or conveyance, the court could void the transaction, contribution or distribution. In addition, the distribution could also be voided if a court were to find that it is not a legal distribution or dividend under Delaware corporate law. The resulting complications, costs and expenses of either finding would materially adversely affect our financial condition and results of operations.
We may be exposed to additional liabilities as a result of the Publishing Spin-off.
The separation and distribution agreement we entered into in connection with the Publishing Spin-off sets forth the distribution of assets, liabilities, rights and obligations of us and troncTribune Publishing following the Publishing Spin-off, and includes indemnification obligations for such liabilities and obligations. In addition, pursuant to the tax matters agreement, certain income tax liabilities and related responsibilities are allocated between, and indemnification obligations have been assumed by, each of us and tronc.Tribune Publishing. In connection with the Publishing Spin-off, we also entered into an employee matters agreement, pursuant to which certain obligations with respect to employee benefit plans were allocated to tronc.Tribune Publishing. Each company will rely on the other company to satisfy its performance and payment obligations under these agreements. Certain of the liabilities to be assumed or indemnified by us or troncTribune Publishing under these agreements are legal or contractual liabilities of the other company. However, it could be later determined that we must retain certain of the liabilities allocated to troncTribune Publishing pursuant to these agreements, including with respect to certain multiemployer benefit plans, which amounts could be material. Furthermore, if troncTribune Publishing were to breach or be unable to satisfy its material obligations under these agreements, including a failure to satisfy its indemnification obligations, we could suffer operational difficulties or significant losses.
 ITEM 1B. UNRESOLVED STAFF COMMENTS
None


 ITEM 2. PROPERTIES
We own properties throughout the United States including offices, studios, industrial buildings, antenna sites and vacant land. We also lease certain properties from third parties. Certain of our owned properties are utilized for operations while other properties are leased to outside parties.

The following table provides details of our properties as of December 31, 2017:2018:
Television and Entertainment Segment 
Owned(1) 
 
Leased 
 
Owned(1) 
 
Leased 
 Square Feet 
Acres 
 
Square Feet 
 Square Feet 
Acres 
 
Square Feet 
Office and studio buildings (2) 847,005
 78
 924,479
 777,913
 78
 988,834
Antenna land —
 781
 —
 —
 781
 —
        
Other Real Estate 
Owned(1) 
 
Leased 
 
Owned(1) 
 
Leased 
 Square Feet 
Acres 
 
Square Feet 
 Square Feet 
Acres 
 
Square Feet 
Corporate —
 —
 173,310
 —
 —
 77,893
Leased to outside parties (3) 1,775,688
 105
 —
 1,013,068
 52
 —
Vacant (4) 117,000
 25
 —
 117,000
 25
 —
 
 
(1)Square feet represent the amount of office, studio or other building space currently utilized.
(2)Includes leases for properties utilized by businesses outside the United States consisting of approximately 2,6114,195 square feet leased by the Television and Entertainment segment.
(3)We retained all owned real estate in the Publishing Spin-off transaction and have entered into lease and license agreements with troncTribune Publishing for continued use of the applicable facilities. These lease arrangements with troncTribune Publishing cover approximately 1.21 million square feet; troncTribune Publishing currently represents our largest third-party tenant. Approximately 4 acres that are currently leased to outside parties are also utilized by Television and Entertainment.
(4)Includes 18 acres of undeveloped land that is not currently available for sale or redevelopment.
Included in the above are buildings and land available for redevelopment. These include excess land, underutilized buildings and older facilities located in urban centers. We estimate that 1 million square feet and 199 acres are available for full or partial redevelopment. Specific redevelopment properties include portions of the south parking structure and the surface lot of the Los Angeles Times Building in Los Angeles, CA, and properties located at 700 West Chicago and 777 West Chicago in Chicago, IL. The redevelopment opportunities in Los Angeles, CA are subject to satisfying applicable legal requirements and receiving governmental approvals.
We believe our properties are in satisfactory condition, are well maintained and are adequate for current use.

ITEM 3. LEGAL PROCEEDINGS
We are subject to various legal proceedings and claims that have arisen in the ordinary course of business. The legal entities comprising our operations are defendants from time to time in actions for matters arising out of their business operations. In addition, the legal entities comprising our operations are involved from time to time as parties in various regulatory, environmental and other proceedings with governmental authorities and administrative agencies.
On December 31, 2012, the Debtors that had filed voluntary petitions for relief under Chapter 11 in the Bankruptcy Court on December 8, 2008 (or on October 12, 2009, in the case of Tribune CNLBC, LLC) emerged from Chapter 11. The Company and certain of the other legal entities included in the consolidated financial statements were Debtors or, as a result of the restructuring transactions undertaken at the time of the Debtors’ emergence, are successor legal entities to legal entities that were Debtors. The Bankruptcy Court has entered final decrees that have collectively closed 106 of the Debtors’ Chapter 11 cases. The remaining Debtors’ Chapter 11 cases have not yet been closed by the Bankruptcy Court, and certain claims asserted against the Debtors in the Chapter 11

cases remain unresolved. As a result, we expect to continue to incur certain expenses pertaining to the Chapter 11 proceedings in future periods, which may be material. See Note 310 to our audited consolidated financial statements for further information.
In March 2013, the IRS issued its audit report on our federal income tax return for 2008 which concluded that the gain from the Newsday Transactions should have been included in our 2008 taxable income. Accordingly, the IRS proposed a $190 million tax and a $38 million accuracy-related penalty. We also would be subject to interest on

the tax and penalty due. We disagreed with the IRS’s position and timely filed a protest in response to the IRS’s proposed tax adjustments. In addition, if the IRS prevailed, we also would have been subject to state income taxes, interest and penalties. During the second quarter of 2016, as a result of extensive discussions with the IRS administrative appeals division, we reevaluated our tax litigation position related to the Newsday transaction and re-measured the cumulative most probable outcome of such proceedings. As a result, during the second quarter of 2016, we recorded a $102 million charge which was reflected as a $125 million current income tax reserve and a $23 million reduction in deferred income tax liabilities. The income tax reserve included federal and state taxes, interest and penalties while the deferred income tax benefit is primarily related to deductible interest expense. In connection with the potential resolution of the matter, we also recorded $91 million of income tax expense to increase our deferred income tax liability to reflect the estimated reduction in the tax basis of our assets. The reduction in tax basis is required to reflect the expected negotiated reduction in the amount of the Company’s guarantee of the Newsday partnership debt which was included in the reported tax basis previously determined upon emergence from bankruptcy. During the third quarter of 2016, we reached an agreement with the IRS administrative appeals division regarding the Newsday transaction which applies for tax years 2008 through 2015. As described in Note 8 to our audited consolidated financial statements, onOn September 2, 2015, we sold our 3% interest in Newsday. Through December 31, 2015, we made approximately $136 million of federal and state tax payments through our regular tax reporting process which included $101 million that became payable upon closing of the sale of the Newsday partnership interest as further described in Note 8 to our audited consolidated financial statements.interest. The terms of the agreement reached with the IRS appeals office were materially consistent with our reserve at June 30, 2016. In connection with the final agreement, we also recorded an income tax benefit of $3 million to adjust the previously recorded estimate of the deferred tax liability adjustment described above. During the fourth quarter of 2016, we recorded an additional $1 million of tax expense primarily related to the additional accrual of interest. During the second half of 2016, we paid $122 million of federal taxes, state taxes (net of state refunds), interest and penalties. The tax payments were recorded as a reduction in our current income tax reserve described above. The remaining state liabilities of $5 million and $4 million of state liabilities are included in the income taxes payable account on our Consolidated Balance Sheets at December 31, 2017.2018 and December 31, 2017, respectively.
On June 28, 2016, the IRS issued to us a Notice of Deficiency (“Notice”) which presents the IRS’s position that the gain on the Chicago Cubs Transactions (as defined and described in Note 86 to our audited consolidated financial statements) should have been included in our 2009 taxable income. Accordingly, the IRS has proposed a $182 million tax and a $73 million gross valuation misstatement penalty. After-tax interest on the proposed tax and penalty through December 31, 20172018 would be approximately $63$81 million. We continue to disagree with the IRS’s position that the transaction generated a taxable gain in 2009, the proposed penalty and the IRS’s calculation of the gain. During the third quarter of 2016, we filed a petition in U.S. Tax Court to contest the IRS’s determination. We continue to pursue resolution of this disputed tax matter with the IRS. If the gain on the Chicago Cubs Transactions is deemed to be taxable in 2009, we estimate that the federal and state income taxes would be approximately $225 million before interest and penalties. Any tax, interest and penalty due will be offset by any tax payments made relating to this transaction subsequent to 2009. Through December 31, 2017,2018, we have paid or accrued approximately $53$80 million through our regular tax reporting process.
We do not maintain any tax reserves related to the Chicago Cubs Transactions. In accordance with ASC Topic 740, “Income Taxes,” our Consolidated Balance Sheet as of December 31, 20172018 includes deferred tax liabilities of $96$69 million related to the future recognition of taxable income and gain from the Chicago Cubs Transactions. Our liability for unrecognized tax benefits totaled $21 million at December 31, 2018 and $23 million at both December 31, 20172017. As further described in “Management’s Discussion and December 31, 2016.
In July 2017, followingAnalysis of Financial Condition and Results of Operations—Significant Events—Chicago Cubs Transaction,” on August 21, 2018, NEH provided the initial filingCall Notice to us that NEH was exercising its right pursuant to the Amended and Restated Limited Liability Company Agreement of the proxy statement/prospectus (the “Proxy Statement/Prospectus”) by eachCEV LLC to purchase our 5% membership interest in CEV LLC. We sold our 5% ownership interest in CEV LLC on January 22, 2019. The sale of Sinclair and usour ownership interest in CEV LLC has no impact on our dispute with the SEC relating to the Merger, four purported Tribune Media Company shareholders (the “Plaintiffs”)IRS.
Starting in July 2018, a series of plaintiffs have filed putative class action lawsuits against us, Tribune Broadcasting Company, Sinclair, and other named and unnamed defendants, including Hearst Television, Inc., Nexstar, TEGNA, Gray Television, Inc. (collectively, the “Defendants”) alleging that the Defendants coordinated their pricing of television advertising, thereby harming a proposed class of all buyers of television advertising time

from one or more of the Defendants since at least January 1, 2014. The plaintiff in each lawsuit seeks injunctive relief and money damages caused by the alleged antitrust violations. Currently, twenty-two lawsuits have been filed and consolidated in the Northern District of Illinois. Lead counsel has been appointed, and plaintiffs are expected to file an amended, consolidated complaint. We believe the above lawsuits are without merit and intend to defend them vigorously.
On August 9, 2018, we filed the Complaint in the Chancery Court of the State of Delaware against Sinclair, alleging that Sinclair willfully and materially breached its obligations under the Sinclair Merger Agreement to use its reasonable best efforts to promptly obtain regulatory approval of the Sinclair Merger so as to enable the Sinclair Merger to close as soon as reasonably practicable. The lawsuit seeks damages for all losses incurred as a result of Sinclair’s breach of contract under the Sinclair Merger Agreement. On August 29, 2018, Sinclair filed an answer to our Complaint and the Counterclaim. The Counterclaim alleges that we materially and willfully breached the Sinclair Merger Agreement by failing to use reasonable best efforts to obtain regulatory approval of the Sinclair Merger. On September 18, 2018, we filed an answer to the Counterclaim. We believe the Counterclaim is without merit and intend to defend it vigorously.
On September 10, 2018, The Arbitrage Event-Driven Fund filed a putative securities class action complaint (the “Securities Complaint”) against us and members of our Board, and, in certain instances,

Sinclair and Samson Merger Sub, Inc. (collectively, the “Parties”)senior management in the United States District CourtsCourt for the DistrictsNorthern District of Delaware and Illinois. The actions are captioned McEntire v.Securities Complaint alleges that Tribune Media Company et al., 1:17-cv-05179 (N.D. Ill.), Duffy v. Tribune Media Company, et al., 1:17-cv-00919 (D. Del.), Berg v. Tribune Media Company, et al., 1:17-cv-00938 (D. Del.), and Pill v. Tribune Media Company, et al., 1:17-cv-00961 (D. Del.) (collectively,its senior management violated Sections 10(b) and 20(a) of the “Actions”Exchange Act by misrepresenting and omitting material facts concerning Sinclair’s conduct during the Sinclair Merger approval process. On December 18, 2018, the Court appointed The Arbitrage Event-Driven Fund and related entities as Lead Plaintiffs. On January 31, 2019, Lead Plaintiffs and two other named plaintiffs filed an amended complaint (the “Amended Complaint”). These lawsuits allege thatThe Amended Complaint eliminates the Proxy Statement/Prospectus omitted material information and was materially misleading in violationclaim under Section 20(a) of the Exchange Act and SEC Rule 14a-9adds a claim under Section 11 of the Securities Act related to a November 29, 2017 public offering of our Class A Common Stock by Oaktree Tribune, L.P. (“Oaktree”). The Amended Complaint also names certain members of the Board of Directors of Tribune Media Company as defendants. The Amended Complaint also includes claims against Oaktree, Oaktree Capital Management, L.P. and generallyMorgan Stanley & Co, LLC. On February 25, 2019, the court granted the defendants’ motion to set a date of March 29, 2019 for all defendants to respond to the Amended Complaint. The lawsuit is purportedly brought on behalf of purchasers of our Class A Common Stock between November 29, 2017 and July 16, 2018, contemporaneously with Oaktree’s sales in the November 29, 2017 public offering or pursuant or traceable to that offering. Plaintiffs seek preliminarydamages in an amount to be determined at trial. We believe this lawsuit is without merit and permanent injunctive relief, rescission or rescissory damages, and unspecified damages. intend to defend it vigorously.
On September 15, 2017,March 16, 2018, we received a Civil Investigative Demand (“CID”) from the Parties enteredAntitrust Division of the United States DOJ regarding an investigation into a memorandumthe exchange of understanding (the “MOU”)certain information related to resolve the individualpacing of sales related to the same period in the prior year among broadcast stations in some DMAs in alleged violation of Federal antitrust law. On November 6, 2018, without conceding any wrongdoing, we agreed to settle the matter. The consent decree, which settles any claims asserted by the Plaintiffs. The MOU acknowledges that we, in part in response to the claims asserted in the Actions, filed certain supplemental disclosures with the SEC on August 16, 2017 and that we, solely in response to the Actions, communicated to four third parties that participated in the sale process and twenty-three third parties that have signed confidentiality agreementsgovernment of alleged violations of federal antitrust laws in connection with potential divestitures that the “standstill” obligations of such third parties were waived. The Parties furtheralleged information-sharing, does not include any financial penalty. Pursuant to the consent decree, we have agreed that we would makeour stations will not exchange certain nonpublic information with other stations operating in the additional supplemental disclosures, which are set forthsame DMA except in our Current Reportcertain cases and to monitor and report on Form 8-K, filedcompliance with the SEC on September 15, 2017. Further, the MOU specifies that within five business days of the closing of the Merger, the Parties will file stipulations of dismissal for the Actions pursuant to Federal Rule of Civil Procedure 41(a), which will dismiss Plaintiffs’ individual claims with prejudice, and dismiss the claims asserted on behalf of a purported class of our shareholders without prejudice. The MOU will not affect the timing of the Merger or the amount or form of consideration to be paid in the Merger.decree.
We do not believe that any other matters or proceedings presently pending will have a material adverse effect, individually or in the aggregate, on our combined financial position, results of operations or liquidity. However, legal matters and proceedings are inherently unpredictable and subject to significant uncertainties, some of which are beyond our control. As such, there can be no assurance that the final outcome of these matters and proceedings will not materially and adversely affect our combined financial position, results of operations or liquidity.
 ITEM 4. MINE SAFETY DISCLOSURES
None


PART II
 ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information; Holders
Since December 5, 2014, our Class A Common Stock has traded on the New York Stock Exchange (“NYSE”) under the symbol “TRCO.” Our Class B Common Stock is quoted on the OTC Bulletin Board (“OTC”) under the symbol “TRBAB.” Each share of the Class B Common Stock is convertible upon request of the holder into one share of Class A Common Stock, provided the holder is in compliance with certain rules, as further described in Note 1513 to our audited consolidated financial statements.

The following table presents the high and low bid price for our Class A Common Stock and Class B Common Stock on the NYSE and OTC, as applicable, for the periods indicated:
 
Class A
Common Stock
 
Class B
Common Stock* 
 
Class A
Common Stock
 
Class B
Common Stock* 
Fiscal Year Ended December 31, 2018 
High 
 
Low 
 High Low
Quarter ended December 31, 2018 $45.49
 $36.66
 N/A
 N/A
Quarter ended September 30, 2018 $39.01
 $31.61
 $35.61
 $35.61
Quarter ended June 30, 2018 $40.97
 $34.81
 N/A
 N/A
Quarter ended March 31, 2018 $43.71
 $39.98
 N/A
 N/A
Fiscal Year Ended December 31, 2017 
High 
 
Low 
 High Low        
Quarter ended December 31, 2017 $42.68
 $40.10
 $40.61
 $40.61
 $42.68
 $40.10
 $40.61
 $40.61
Quarter ended September 30, 2017 $42.39
 $39.59
 $41.75
 $40.21
 $42.39
 $39.59
 $41.75
 $40.21
Quarter ended June 30, 2017 $43.04
 $36.18
 $42.00
 $38.75
 $43.04
 $36.18
 $42.00
 $38.75
Quarter ended March 31, 2017 $40.00
 $27.75
 N/A
 N/A
 $40.00
 $27.75
 N/A
 N/A
Fiscal Year Ended December 31, 2016        
Quarter ended December 31, 2016 $36.94
 $29.75
 N/A
 N/A
Quarter ended September 30, 2016 $40.13
 $34.44
 N/A
 N/A
Quarter ended June 30, 2016 $40.72
 $36.47
 N/A
 N/A
Quarter ended March 31, 2016 $39.90
 $26.10
 $40.77
 $32.78
 
*The prices above for Class B Common Stock for all periods are as reported by the OTC and may reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions. No trading data was reported in the first, second third and fourth quarterquarters of 20162018 as well as the first quarter of 2017.

As of December 31, 2017,2018, we had issued 101,429,999101,790,837 shares of Class A Common Stock, of which 14,102,185 were held in treasury, and 5,557 shares of Class B Common Stock. We had seven and eight holders of record of Class A Common Stock at bothDecember 31, 2018 and December 31, 2017, and December 31, 2016,respectively, and we had one holder of record of Class B Common Stock at both December 31, 20172018 and December 31, 2016.2017. Additionally, as of December 31, 2017,2018, 30,551 shares of our Common Stock were subject to outstanding Warrants to purchase our Common Stock (“Warrants”), which are governed by the Warrant Agreement between us, Computershare Inc. and Computershare Trust Company, N.A., dated as of December 31, 2012 (the “Warrant Agreement”). See Note 1513 to the audited consolidated financial statements for further information.

Dividends
Our Board declared quarterly cash dividends on our Common Stock to holders of record of Common Stock and Warrants as follows (in thousands, except per share data):
2017 20162018 2017
Per Share 
Total
Amount
 Per Share 
Total
Amount
Per Share 
Total
Amount
 Per Share 
Total
Amount
First quarter$0.25
 $21,742
 $0.25
 $23,215
$0.25
 $21,922
 $0.25
 $21,742
Second quarter0.25
 21,816
 0.25
 22,959
0.25
 21,925
 0.25
 21,816
Third quarter0.25
 21,834
 0.25
 22,510
0.25
 21,929
 0.25
 21,834
Fourth quarter0.25
 21,837
 0.25
 21,612
0.25
 21,933
 0.25
 21,837
Total quarterly cash dividends declared and paid$1.00
 $87,229
 $1.00
 $90,296
$1.00
 $87,709
 $1.00
 $87,229
On February 3, 2017, we paid a special cash dividend of $5.77 per share to holders of record of our Common Stock and Warrants at the close of business on January 13, 2017. The total aggregate payment on February 3, 2017 totaled $499 million, including the payment to holders of Warrants.
The actual declaration of any such future dividends and the establishment of the per share amount, record dates, and payment dates for any such future dividends are at the discretion of our Board of Directors and will depend upon various factors then existing, including earnings, financial condition, results of operations, capital requirements, level of indebtedness, contractual restrictions with respect to payment of dividends (including the restricted payment covenant contained in the credit agreement governing the Secured Credit Facility and the

indenture governing the Notes, as further described in Note 97 to our audited consolidated financial statements), restrictions imposed by applicable law, general business conditions and other factors that our Board may deem relevant. In addition, pursuant to the terms of the Warrant Agreement, concurrently with any cash dividend made to holders of our Common Stock, holders of Warrants are entitled to receive a cash payment equal to the amount of the dividend paid per share of Common Stock for each Warrant held. Under the Nexstar Merger Agreement, we may not pay dividends other than quarterly cash dividends of $0.25 or less per share.
Securities Authorized for Issuance Under Equity Compensation Plans
The following table provides information about our Class A Common Stock that may be issued upon exercise of options and other rights under our equity incentive plans as of December 31, 2017:2018:
Plan category
 
Number of securities to be issued upon exercise of
outstanding options
and vesting of restricted stock
units and performance share
units (1)(2) 
 
Weighted-average
exercise price of
outstanding
options 
 
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a)) 
 
Number of securities to be issued upon exercise of
outstanding options
and vesting of restricted stock
units and performance share
units (1)
 
Weighted-average
exercise price of
outstanding
options 
 
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a)) 
 (a) (b) (c) (a) (b) (c)
Equity compensation plans approved by security holders (3)(2) 1,830,389
 $32.81
 3,201,201
 2,185,006
 $34.84
 2,751,680
Equity compensation plans not approved by security holders (3)(2) 2,650,550
 41.71
 —
 1,740,451
 37.77
 —
Total 4,480,939
 $39.00
 3,201,201
 3,925,457
 $36.54
 2,751,680
 
(1)Does not include 10,147 of vested stock awards issued to members of our Board of Directors from the 2016 Stock Compensation Plan for Non-Employee Directors.
(2)Performance share units are assumed to be issued at a maximum payout for all periods, although performance targets for some of them have not been set and no expense is being recognized.
(3)(2)Our 2016 Incentive Compensation Plan and Stock Compensation Plan for Non-Employee Directors were approved by shareholders on May 5, 2016. These plans replaced the 2013 Equity Incentive Plan that was adopted by our Board of Directors on March 1, 2013. Awards previously granted under the 2013 Equity Incentive Plan will remain outstanding in accordance with their terms but no additional awards will be made.

Recent Sales of Unregistered Securities
On December 31, 2012, we emerged from Chapter 11 bankruptcy and pursuant to the Plan, issued 78,754,269 shares ofNo Warrants were exercised for Class A Common Stock 4,455,767 shares ofor for Class B Common Stock and 16,789,972during 2018. As further described in Note 13 to our consolidated financial statements, 30,551 Warrants which are governed by the Warrant Agreement.remain outstanding as of December 31, 2018. The Warrants are exercisable at the holder’s option into Class A Common Stock, Class B Common Stock, or a combination thereof, at an exercise price of $0.001 per share or through “cashless exercise,” whereby the number of shares to be issued to the holder is reduced, in lieu of a cash payment for the exercise price.
Since the initial issuance of the Warrants on December 31, 2012 through December 31, 2017, we have issued 16,615,891 shares of Class A Common Stock and 143,477 shares of our Class B Common Stock upon the exercise of 16,759,421 Warrants. Of these exercises, we issued 12,636,807 shares of Class A Common Stock and 25,244 shares of Class B Common Stock, respectively, for cash, receiving total proceeds of $12,662 from the exercises. In addition, we issued 3,979,084 shares of Class A Common Stock and 118,233 shares of Class B Common Stock, respectively, upon “cashless exercises.”
The issuance of shares of Class A Common Stock and Class B Common Stock and Warrants at the time of emergence from Chapter 11 bankruptcy, and the issuance of shares of Common Stock upon exercise of the Warrants, were exempt from the registration requirements of Section 5 of the Securities Act pursuant to Section 1145 of the Bankruptcy Code, which generally exempts distributions of securities in connection with plans of reorganization. The issuances of shares of Common Stock upon exercise of options were exempt from the registration requirements of Section 5 of the Securities Act pursuant to Rule 701 or Section 4(a)(2) of the Securities Act, to the extent an exemption from such registration was required. None of the foregoing transactions involved any underwriters, underwriting discounts or commissions.

Repurchases of Equity Securities
During the year ended December 31, 2017,2018, we did not make any share repurchases pursuant to the 2016 Stock Repurchase Program authorized by our Board of Directors on February 24, 2016, as further described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Repurchases of Equity Securities.” As of December 31, 2017,2018, the remaining authorized amount under the current authorization totaled $168 million. The now terminated Sinclair Merger Agreement prohibited, and the Nexstar Merger Agreement prohibits, us from engaging in additional share repurchases.

Performance Graph
The following graph compares the cumulative total return on our Class A Common Stock since it began trading on the NYSE on December 5, 2014 with the cumulative total return of the S&P 500 Index and our peer group index. The graph assumes, in each case, an initial investment of $100 on December 5, 2014, based on the market prices at the end of each fiscal quarter through and including December 31, 2017,2018, and reinvestment of dividends.
stockchart2018.jpg
Company/
Peer Group Index/Market Index
(In Dollars)
 December 5, 2014 December 28, 2014 December 31, 2015 December 31, 2016 December 31, 2017 December 5, 2014 December 28, 2014 December 31, 2015 December 31, 2016 December 31, 2017 December 31, 2018
Tribune Media Company (TRCO) 100.0
 85.6
 54.5
 57.9
 86.0
 100.0
 85.6
 54.5
 57.9
 86.0
 94.3
Peer Group Index 100.0
 99.2
 90.6
 100.0
 112.4
 100.0
 99.2
 90.6
 100.0
 112.4
 95.1
S&P 500 100.0
 100.7
 100.7
 112.8
 137.4
 100.0
 100.7
 100.7
 112.8
 137.4
 131.4
Our peer group for 2018 consists of the following companies considered our market competitors, or that have been selected based on the basis of industry: AMC Entertainment Holdings, Inc.; TEGNA; Nexstar Broadcasting Group, Inc. (“Nexstar”);Nexstar; and Sinclair. Prior to 2018, our peer group also included Scripps Networks Interactive, Inc.; and Sinclair Broadcast Group, Inc. Our, which was acquired by Discovery on March 6, 2018. Additionally, prior to 2017, our peer group omitsalso included Media General, Inc., as it which was acquired by Nexstar on January 17, 2017, and Rovi Corporation, which was removed from the peer group as a result of the sale of our Digital and Data business to Nielsen on January 31, 2017.

This performance graph and other information furnished under this Part II Item 5 of this Form 10-K shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the Exchange Act.

ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth selected historical consolidated financial data as of the dates and for the periods indicated and has been adjusted to reflect the Gracenote Sale and the Publishing Spin-off. The selected historical consolidated financial data as of December 31, 20172018 and December 31, 2016,2017, and for each of the three years in the period ended December 31, 20172018 have been derived from our audited consolidated financial statements and related notes contained in this Annual Report. The selected historical consolidated financial data as of December 31, 2016, December 31, 2015 and December 28, 2014 December 29, 2013 and December 31, 2012 and for the years ended December 28, 201431, 2015 and December 29, 2013,28, 2014, have been derived from our consolidated financial statements and related notes not included herein. The selected historical consolidated financial data should be read in conjunction with “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” our audited consolidated financial statements and related notes included in this Annual Report.Report (in thousands, except for per share data).
Successor  Predecessor
As of and for the year ended 
As of and for the year
ended 
  
As of and
for
Dec. 31, 2018 Dec. 31, 2017 Dec. 31, 2016 Dec. 31,
2015		 Dec. 28, 2014
(in thousands, except per share data)Dec. 31, 2017 Dec. 31, 2016 Dec. 31,
2015		 Dec. 28,
2014		 Dec. 29,
2013		  
Dec. 31,
20121
STATEMENT OF OPERATIONS DATA:                     
Operating Revenues$1,848,959
 $1,947,930
 $1,801,967
 $1,780,625
 $1,075,407
  $—
$2,009,734
 $1,848,959
 $1,947,930
 $1,801,967
 $1,780,625
Operating Profit (Loss)(2)$108,468
 $433,574
 $(269,335) $304,824
 $184,705
  $—
Income (Loss) from Continuing Operations(2)$183,077
 $87,040
 $(315,337) $476,619
 $165,030
  $7,085,277
Operating Profit (Loss)(1)$488,440
 $85,653
 $408,772
 $(299,210) $273,718
Income (Loss) from Continuing Operations(1)(2)$412,530
 $183,077
 $87,040
 $(315,337) $476,619
Earnings (Loss) Per Share from Continuing Operations of Tribune Media Company Attributable to Common Shareholders(3)                     
Basic$2.06
 $0.96
 $(3.33) $4.76
 $1.65
   
$4.71
 $2.06
 $0.96
 $(3.33) $4.76
Diluted$2.04
 $0.96
 $(3.33) $4.75
 $1.65
   
$4.67
 $2.04
 $0.96
 $(3.33) $4.75
                     
Regular dividends declared per common share$1.00
 $1.00
 $0.75
 $—
 $—
   $1.00
 $1.00
 $1.00
 $0.75
 $—
                     
Special dividends declared per common share$5.77
 $—
 $6.73
 $—
 $—
   $—
 $5.77
 $—
 $6.73
 $—
                     
BALANCE SHEET DATA:                     
Total Assets$8,169,328
 $9,401,051
 $9,708,863
 $11,326,102
 $11,391,966
  $8,668,829
$8,251,391
 $8,169,328
 $9,401,051
 $9,708,863
 $11,326,102
Total Non-Current Liabilities$4,297,881
 $5,304,515
 $5,336,341
 $5,457,478
 $5,679,678
  $3,305,084
$4,276,501
 $4,297,881
 $5,304,515
 $5,336,341
 $5,457,478
 
(1)Operating results for December 31, 2012,Consolidated operating profit (loss) historical amounts have been adjusted to reflect the adoption of ASU 2017-07, “Compensation - Retirements Benefits (Topic 715),” in the first dayquarter of the Company’s 2013 fiscal year, include only (i) reorganization adjustments which resulted2018, as further described in a net gain of $4.739 billion before taxes ($4.543 billion after taxes), including a $5 million gain ($9 million loss after taxes) recorded in income (loss) from discontinued operations, net of taxes and (ii) fresh-start reporting adjustments which resulted in a net loss of $3.372 billion before taxes ($2.567 billion after taxes, including a gain of $22 million ($34 million after taxes) reflected in income (loss) from discontinued operations, net of taxes). See Note 31 to our audited consolidated financial statementsstatements. Consolidated operating profit for further information.the year ended December 31, 2018 includes a gain on sales of spectrum of $133 million. Consolidated operating profit for the years ended December 31, 2018, December 31, 2017, December 31, 2016 and December 28, 2014 includes gains on sales of real estate of $25 million, $29 million, $213 million and $22 million, respectively. Consolidated operating loss for the year ended December 31, 2015 includes impairment charges of $385 million related to other intangible assets and goodwill.
(2)Consolidated income (loss) from continuing operations for the year ended December 31, 2017 includes non-cash pretax impairment charges totaling $181 million to write down our investment in CareerBuilder and a provisional discrete net tax benefit of $256 million, primarily due to a remeasurement of the net deferred tax liabilities resulting from the decrease in the U.S. federal corporate income tax rate from 35% to 21%,. In 2018, we recorded an additional income tax benefit of $24 million to the net deferred tax liabilities, adjusting the provisional discrete net tax benefit recorded in the fourth quarter of 2017, as further described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Significant Events—Tax Reform.” Consolidated operating profit (loss) and income (loss) from continuing operations for the yearsyear ended December 31, 2016 and December 31, 2015 include impairment charges28, 2014 includes a gain on investment transactions of $3$372 million and $385 million, respectively,primarily related to other intangible assets and goodwill, respectively. See Note 7 tothe sale of our audited consolidated financial statements for additional information.ownership interest in Classified Ventures.
(3)See Note 1715 to our audited consolidated financial statements for a description of our computation of basic and diluted earnings per share attributable to the holders of our Common Stock.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with the other sections of this Annual Report, including “Item 1. Business,” “Item 6. Selected Financial Data” and our audited consolidated financial statements for the three years in the period ended December 31, 20172018 and notes thereto included in this Annual Report.
This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains a number of forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and other factors described throughout this Annual Report and particularly in “Item 1A. Risk Factors” and “Special Note Regarding Forward-Looking Statements.”
Introduction
The following discussion and analysis compares our and our subsidiaries’ results of operations for the three years in the period ended December 31, 2017.2018. As a result of the Gracenote Sale in 2017 (as further described below), the historical results of operations for the businesses included in the Gracenote Sale are reported as discontinued operations for all periods presented.the years ended December 31, 2017 and December 31, 2016. Accordingly, all references made to financial data in this Annual Report are to Tribune Media Company’s continuing operations, unless specifically noted.
Overview
We are a diversified media and entertainment company comprised of 42 local television stations, which we refer to as “our television stations,” that are either owned by us or owned by others, but to which we provide certain services, along with a national general entertainment cable network, a radio station, a production studio, a portfolio of real estate assets and investments in a variety of media, websites and other related assets. We believe our diverse portfolio of assets, including our equity investments that provide cash distributions, distinguishes us from traditional pure-play broadcasters.
As further described in Note 2 to our audited consolidated financial statements, on December 19, 2016, we entered into the Gracenote SPA with Nielsen to sell our equity interest in substantially all of the Digital and Data business as part of the transaction, which was completed on January 31, 2017. Prior to the Gracenote Sale, we reported our operations through the Television and Entertainment and Digital and Data reportable segments. Our Digital and Data segment consisted of several businesses driven by our expertise in collection, creation and distribution of data and innovation in unique services and recognition technology that used data, including Gracenote Video, Gracenote Music and Gracenote Sports. In accordance with ASU 2014-08, assets and liabilitiesthe results of operations of Digital and Data businesses included in the Gracenote Sale as of December 31, 2016 are classified as discontinued operations in our Consolidated Balance Sheets, and the results of operations are reported as discontinued operations in our Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income (Loss) for all periods presented.the years ended December 31, 2017 and December 31, 2016.
Our business consists of our Television and Entertainment operations and the management of certain of our real estate assets. WeAs of December 31, 2018, we also holdheld a variety of investments, in cable and digital assets, including an equity investmentsmethod investment in TV Food Network, which provides substantial annual cash distributions, and an investment in CEV LLC, which was sold on January 22, 2019. Prior to the sale of our ownership interest on September 13, 2018, we also held an equity investment in CareerBuilder.
Television and Entertainment is a reportable segment which provides audiences across the country with news, entertainment and sports programming on Tribune Broadcasting local television stations and distinctive, high quality television series and movies on WGN America as well as news, entertainment and sports information via our websites and other digital assets. Television and Entertainment includes 42 local television stations and related websites, including 39 owned stations and 3 stations to which we provide certain services (the “SSAs”) with Dreamcatcher Broadcasting LLC (“Dreamcatcher”);Dreamcatcher; WGN America, a national general entertainment cable network; Antenna TV and THIS TV, national multicast networks; and WGN-AM, a radio station in Chicago.

The television stations, including the 3 stations owned by Dreamcatcher (a fully-consolidated VIE), are comprised of 14 FOX television affiliates; 12 CW television

affiliates; 6 CBS television affiliates; 3 ABC television affiliates; 3 MY television affiliates; 2 NBC television affiliates; and 2 independent television stations.
In addition, we report and include under Corporate and Other the management of certain of our real estate assets, including revenues from leasing our owned office and production facilities and any gains or losses from the sales of our owned real estate, as well as certain administrative activities associated with operating corporate office functions and managing our predominantly frozen company-sponsored defined benefit pension plans.functions.
Television and Entertainment represented 99% of our consolidated operating revenues in 2017.2018. Approximately 67%66% of these revenues came from the sale of advertising spots. 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 our television stations. Our advertising revenues are subject to changes in these factors both on a national level and on a local level in the markets in which we operate. Television and Entertainment operating revenues also included retransmission revenues and carriage fees, and barter/trade revenues, which represented approximately 22%, 7%24% and 2%8%, respectively, of Television and Entertainment’s 20172018 total operating revenues.
Significant expense categories for Television and Entertainment include compensation expense, programming expense, depreciation expense, amortization expense, primarily resulting from the adoption of fresh-start reporting on the Effective Date (as defined below), and other expenses. Compensation expense represented 33%36% of Television and Entertainment’s 20172018 total operating expenses before the gain on sales of spectrum and is impacted by many factors, including the number of full-time equivalent employees, changes in the design and costs of the various employee benefit plans, the level of pay increases and our actions to reduce staffing levels. Programming expense represented 37%32% of Television and Entertainment’s 20172018 total operating expenses.expenses before the gain on sales of spectrum. The level of programming expense is affected by the cost of programs available for purchase and the selection of programs aired by our television stations. Depreciation expense and amortization expense represented 3% and 10%11% of Television and Entertainment’s 20172018 total operating expenses, respectively.respectively, before the gain on sales of spectrum. Other expenses represented 17%18% of Television and Entertainment’s 20172018 total operating expenses before the gain on sales of spectrum and are principally for sales and marketing activities, occupancy costs and other station operating expenses.
We use operating revenues and operating profit as ways to measure the financial performance of our business segments. In addition, we use audience and revenue share for our television stations, together with other factors, to measure our Television and Entertainment market shares and performance.
Our results of operations, when examined on a quarterly basis, reflect the historical seasonality of our advertising revenues. Typically, second and fourth quarter advertising revenues are higher than first and third quarter advertising revenues. Results for the second quarter usually reflect spring seasonal advertising, while the fourth quarter includes advertising related to the holiday season. In addition, our operating results are subject to fluctuations from political advertising as political spending is usually significantly higher in even numbered years due to advertising expenditures preceding local and national elections.
Significant Events
Nexstar Merger Agreement
On November 30, 2018, we entered into the Nexstar Merger Agreement, providing for the acquisition by Nexstar of all of the outstanding shares of our Common Stock, by means of a merger of Nexstar Merger Sub with and into Tribune Media Company, with the Company surviving the Nexstar Merger as a wholly-owned subsidiary of Nexstar.
In the Nexstar Merger, each share of Common Stock issued and outstanding immediately prior to the effective time of the Nexstar Merger (the “Effective Time”) (other than shares held by (i) any Tribune subsidiary, Nexstar or any Nexstar subsidiary or (ii) Tribune shareholders who have not voted in favor of adopting the Nexstar Merger

Agreement and who have demanded and perfected (and not validly withdrawn or waived) their appraisal rights in compliance with Section 262 of the DGCL) will be converted into the right to receive a cash payment of $46.50 in cash (the “base merger consideration”), plus, if the Nexstar Merger closes after August 31, 2019 (the “Adjustment Date”), an additional amount in cash equal to (a) (i) $0.009863 multiplied by (ii) the number of calendar days elapsed after Adjustment Date to and including the date on which the Nexstar Merger closes, minus (b) the amount of any dividends declared by us after the Adjustment Date with a record date prior to the date on which the Nexstar Merger closes, in each case, without interest and less any required withholding taxes (the “additional per share consideration”, and together with the base merger consideration, the “Nexstar Merger Consideration”). The additional per share consideration will not be less than zero.
Each option to purchase shares of Common Stock outstanding as of immediately prior to the Effective Time, whether or not vested or exercisable, will be cancelled and converted into the right to receive, for each share of Common Stock subject to such stock option, a cash payment equal to the excess, if any, of the value of the Nexstar Merger Consideration over the exercise price per share of such stock option, without any interest and subject to all applicable withholding. Any stock option that has an exercise price per share that is greater than or equal to the Nexstar Merger Consideration will be cancelled for no consideration or payment. Each award of restricted stock units outstanding as of immediately prior to the Effective Time, whether or not vested, will immediately vest and be cancelled and converted into the right to receive a cash payment equal to the product of the total number of shares of Common Stock underlying such restricted stock unit multiplied by the Nexstar Merger Consideration, without any interest and subject to all applicable withholding (the “RSU Consideration”), except that each award of restricted stock units granted to an employee on or after December 1, 2018 (other than restricted stock units required to be granted pursuant to employment agreements or offer letters) (“Annual Tribune RSUs”) that has vested as of the Effective Time of the Nexstar Merger will be cancelled and converted into the right to receive the RSU Consideration and any Annual Tribune RSUs that remain unvested as of the Effective Time of the Nexstar Merger will be cancelled for no consideration or payment. Each award of performance stock units outstanding as of immediately prior to the Effective Time, whether or not vested, will immediately vest (with performance conditions for each open performance period as of the closing date deemed achieved at the applicable “target” level performance for such performance stock units) and be cancelled and converted into the right to receive a cash payment equal to the product of the total number of shares of Common Stock underlying such performance stock units multiplied by the Nexstar Merger Consideration, without any interest and subject to all applicable withholding. Each outstanding award of deferred stock units outstanding as of immediately prior to the Effective Time will be cancelled and converted into the right to receive a cash payment equal to the product of the total number of shares of Common Stock underlying such deferred stock units multiplied by the Nexstar Merger Consideration, without interest and subject to all applicable withholding. Each unexercised warrant to purchase shares of Common Stock outstanding as of immediately prior to the Effective Time will be assumed by Nexstar and converted into a warrant exercisable for the Nexstar Merger Consideration which the shares of Common Stock underlying such warrant would have been entitled to receive upon consummation of the Nexstar Merger and otherwise upon the same terms and conditions of such warrant immediately prior to the Effective Time.
The consummation of the Nexstar Merger is subject to the satisfaction or waiver of certain customary conditions, including, among others: (i) the adoption of the Nexstar Merger by holders of a majority of our outstanding Common Stock, (ii) the receipt of approval from the FCC and the expiration or termination of the waiting period applicable to the Nexstar Merger under the HSR Act and (iii) the absence of any order or law of any governmental authority that prohibits or makes illegal the consummation of the Nexstar Merger. Our and Nexstar’s respective obligations to consummate the Nexstar Merger are also subject to certain additional customary conditions, including (i) the accuracy of the representations and warranties of the other party (generally subject to a “material adverse effect” standard), (ii) performance by the other party of its covenants in the Nexstar Merger Agreement in all material respects and (iii) with respect to Nexstar’s obligation to consummate the Nexstar Merger, since the date of the Nexstar Merger Agreement, no material adverse effect with respect to Tribune having occurred.

The applications for FCC Approval were filed on January 7, 2019. On February 14, 2019, the FCC issued a public notice of filing of the applications which set deadlines for petitions to deny the applications, oppositions to petitions to deny and replies to oppositions to petitions to deny.
On February 7, 2019, we received a request for additional information and documentary material, often referred to as a “second request,” from the DOJ in connection with the Nexstar Merger Agreement. The second request was issued under the HSR Act. Nexstar received a substantively identical request for additional information and documentary material from the DOJ in connection with the transactions contemplated by the Nexstar Merger Agreement. Consummation of the transactions contemplated by the Nexstar Merger Agreement is conditioned on expiration of the waiting period applicable under the HSR Act, among other conditions. Issuance of the second request extends the waiting period under the HSR Act until 30 days after Nexstar and the Company have substantially complied with the second request, unless the waiting period is terminated earlier by the DOJ or the parties voluntarily extend the time for closing.
The Nexstar Merger Agreement may be terminated at any time prior to the Effective Time: (i) by mutual written consent of Nexstar and us; (ii) by either Nexstar or us (a) if the Effective Time has not occurred on or before November 30, 2019, provided that (x) if, on the initial end date, any of the conditions to the consummation of the Nexstar Merger related to the HSR Approval or the FCC Approval have not been satisfied, but all other conditions the consummation of the Nexstar Merger have been satisfied or waived or capable of being satisfied, then the end date will be automatically extended to February 29, 2020 and (y) in the event the marketing period for the debt financing for the transaction has commenced but has not completed by the end date, the end date may be extended (or further extended) by Nexstar on one occasion in its sole discretion by providing written notice thereof to us at least one business day prior to the end date until the date that is four business days after the last scheduled expiration date of the marketing period (unless the failure of the Effective Time to occur before the end date was primarily due to such party’s breach of any of its obligations under the Nexstar Merger Agreement), (b) if any governmental authority of competent jurisdiction has issued an order permanently prohibiting the consummation of the Nexstar Merger and such order has become final and non-appealable (unless such order was primarily attributable to such party’s breach of the Nexstar Merger Agreement), or (c) if, after completion of the special meeting (including any adjournment or postponement thereof), our shareholders have not approved the adoption of the Nexstar Merger Agreement; and (iii) either Nexstar or us in certain circumstances, as described in the Nexstar Merger Agreement.
We must pay Nexstar a termination fee of $135 million if Nexstar terminates the Nexstar Merger Agreement due to (a) our board or any committee thereof (i) withdrawing, rescinding, amending, changing, modifying or qualifying, or otherwise proposing publicly to take any of the foregoing actions in a manner adverse to Nexstar, its recommendation that our shareholders adopt the Nexstar Merger Agreement, (ii) failing to make such recommendation in our proxy statement, (iii) adopting, approving or recommending, or otherwise proposing publicly to adopt, approve or recommend, an alternative acquisition proposal, (iv) failing to publicly recommend against an alternative acquisition proposal that has been publicly disclosed within ten business days of Nexstar’s request and failing to reaffirm its recommendation within such period upon such request (provided that such a request may be delivered by Nexstar only once with respect to each alternative acquisition proposal, with the right to make an additional request with respect to each subsequent material amendment or modification thereto), or (v) taking any action to make the provisions of any “fair price,” “moratorium,” “control share acquisition,” “business combination” or other similar anti-takeover statute or regulation inapplicable to any transaction other than the transactions contemplated by the Nexstar Merger Agreement; (b) we or any of our subsidiaries having entered into any agreement, other than an acceptable confidentiality agreement, with respect to an alternative acquisition proposal; or (c) we terminate the Nexstar Merger Agreement due to our board authorizing us to enter into an alternative acquisition agreement.
As further described in the Nexstar Merger Agreement, we must pay Nexstar a termination fee of $135 million (except that the termination fee of $135 million will be reduced by any previously paid amounts relating to the documented, out-of-pocket expenses of Nexstar in an amount not to exceed $15 million) if: (a) we or Nexstar terminate the Nexstar Merger Agreement if the Effective Time has not occurred prior to the end date of November 30, 2019, subject to an automatic extension to February 29, 2020 in certain circumstances if the only outstanding

unfulfilled conditions relate to HSR Approval or FCC Approval (and an additional extension, at Nexstar’s election, if the marketing period for the debt financing for the transaction has not ended by the end date); (b) we or Nexstar terminate the Nexstar Merger Agreement if, after completion of the special meeting (including any adjournment or postponement thereof), our shareholders have not approved the adoption of the Nexstar Merger Agreement; or (c) Nexstar terminates the Nexstar Merger Agreement in respect of a willful breach of our covenants or agreements that would give rise to the failure of a closing condition that is incapable of being cured within a specified time period, and, in the case of each of the foregoing clauses, an alternative acquisition proposal has been made to us and publicly announced or otherwise disclosed and has not been withdrawn prior to the termination of the Nexstar Merger Agreement, the date of the special meeting (in the case of a termination for failure to obtain approval of the adoption of the Nexstar Merger Agreement by our shareholders) or the date of the applicable breach giving rise to termination, as applicable, and within twelve months after termination of the Nexstar Merger Agreement, we enter into a definitive agreement with respect to an alternative acquisition proposal (and subsequently consummates such transaction) or consummates a transaction with respect to an alternative acquisition proposal.
We must pay Nexstar the documented, out-of-pocket costs and expenses of Nexstar in an amount not to exceed $15 million if we or Nexstar terminate the Nexstar Merger Agreement because our shareholders do not approve the transaction.
Termination of Sinclair Merger Agreement
On May 8, 2017, we entered into the Sinclair Merger Agreement with Sinclair, providing for the acquisition by Sinclair of all of the outstanding shares of our Common Stock by means of a merger of Samson Merger Sub Inc., a wholly owned subsidiary of Sinclair, with and into Tribune Media Company, with Tribune Media Company surviving the Sinclair Merger as a wholly owned subsidiary of Sinclair.
In the Merger, each share of our Common Stock will be converted into the right to receive (i) $35.00 in cash, without interest and less any required withholding taxes (such amount, the “Cash Consideration”), and (ii) 0.2300 (the “Exchange Ratio”) of a validly issued, fully paid and nonassessable share of Class A common stock, $0.01 par value per share (the “Sinclair Common Stock”), of Sinclair (the “Stock Consideration”, and together with the Cash

Consideration, the “Merger Consideration”). The Merger Agreement provides that each holder of an outstanding Tribune Media Company stock option (whether or not vested) will receive, for each share of our Common Stock subject to such stock option, a cash payment equal to the excess, if any, of the value of the Merger Consideration (with the Stock Consideration valued over a specified period prior to the consummation of the Merger) and the exercise price per share of such option, without interest and less any required withholding taxes. Each outstanding Tribune Media Company restricted stock unit award will be converted into a cash-settled restricted stock unit award reflecting a number of shares of Sinclair Common Stock equal to the number of shares of our Common Stock subject to such award multiplied by a ratio equal to (a) the sum of (i) the Exchange Ratio plus (ii) the Cash Consideration divided by (b) the trading value of the Sinclair Common Stock over a specified period prior to the consummation of the Merger. Otherwise, each such award will continue to be subject to the same terms and conditions as such award was subject prior to the Merger. Each outstanding Tribune Media Company performance stock unit (other than supplemental performance stock units) will automatically become vested at “target” level of performance and will be entitled to receive an amount of cash equal to (a) the number of shares of our Common Stock that are subject to such unit as so vested multiplied by (b) the sum of (i) the Cash Consideration and (ii) the Exchange Ratio multiplied by the trading value of the Sinclair Common Stock over a specified period prior to the consummation of the Merger without interest and less any required withholding taxes. Each holder of an outstanding Tribune Media Company supplemental performance stock unit that will vest in accordance with its existing terms will be entitled to receive an amount of cash equal to (a) the number of shares of our Common Stock that are subject to such unit as so vested multiplied by (b) the sum of (i) the Cash Consideration and (ii) the Exchange Ratio multiplied by the trading value of the Sinclair Common Stock over a specified period prior to the consummation of the Merger without interest and less any required withholding taxes. Any supplemental performance stock units that do not vest in accordance with their terms will be canceled without any consideration. Each holder of an outstanding Tribune Media Company deferred stock unit will be entitled to receive an amount of cash equal to (a) the number of shares of our Common Stock that are subject to such unit multiplied by (b) the sum of (i) the Cash Consideration and (ii) the Exchange Ratio multiplied by the trading value of the Sinclair Common Stock over a specified period prior to the consummation of the Merger without interest and subject to all applicable withholding. Each outstanding Tribune Media Company Warrant will become a warrant exercisable, at its current exercise price, for the Merger Consideration in respect of each share of our Common Stock subject to the Warrant prior to the Merger.
The consummation of the Sinclair Merger iswas subject to the satisfaction or waiver of certain important conditions, including, among others: (i) the approval of the Merger by our stockholders, (ii) the receipt of approval from the FCC and the expiration or termination of the waiting period applicable to the Sinclair Merger under the HSR Act, (iii) the effectiveness of a registration statement on Form S-4 registeringAct. Pursuant to the Sinclair Common StockMerger Agreement, we had the right to be issued in connection with the Merger and no stop order or proceedings seeking the same having been initiated by the SEC, (iv) the listing ofterminate the Sinclair Common Stock to be issued in the Merger on the NASDAQ Global Select Market and (v) the absence of certain legal impediments to the consummation of the Merger.
On September 6, 2017, Sinclair’s registration statement on Form S-4 registering the Sinclair Common Stock to be issued in the Merger was declared effective by the SEC.
On October 19, 2017, holders of a majority of the outstanding shares of our Class A Common Stock and Class B Common Stock, voting as a single class, voted on and approved the Merger Agreement and the transactions contemplated by the Merger Agreement at a duly called special meeting of Tribune Media Company shareholders.
The applications seeking FCC approval of the transactions contemplated by the Merger Agreement (the “Applications”) were filed on June 26, 2017, and the FCC issued a public notice of the filing of the Applications and established a comment cycle on July 6, 2017. Several petitionsif Sinclair failed to deny the Applications, and numerous other comments, both opposing and supporting the transaction, were filed in response to the public notice. Sinclair and us jointly filed an opposition to the petitions to deny on August 22, 2017 (the “Joint Opposition”). Petitioners and others filed replies to the Joint Opposition on August 29, 2017. On September 14, 2017, the FCC’s Media Bureau issued an RFI seeking additional information regarding certain matters discussed in the Applications. Sinclair submitted a response to the RFI on October 5, 2017. On October 18, 2017, the FCC’s Media Bureau issued a public notice pausing the FCC’s 180-day transaction review “shot-clock” for 15 days to afford interested parties an opportunity to comment on the response to the RFI. On January 11, 2018, the FCC’s Media Bureau issued a public

notice pausing the FCC’s shot-clock as of January 4, 2018 until Sinclair has filed amendments to the Applications along with divestiture applications and the FCC staff has had an opportunity to review any such submissions. On February 20, 2018, the parties filed an amendment to the Applications that, among other things, (1) requested authority under the Duopoly Rule for Sinclair to own two top four rated stations in each of three television markets and (2) identified stations (the “Divestiture Stations”) in 11 television markets that Sinclair proposes to divest in order for the Merger to comply with the Duopoly Rule and the National Television Multiple Ownership Rule. Concurrently, Sinclair filed applications proposing to place certain of the Divestiture Stations in an FCC-approved divestiture trust, if and as necessary, in order to facilitate the orderly divestiture of those stations following the consummation of the Merger.
On August 2, 2017, we received a request for additional information and documentary material, often referred to as a “second request,” from the DOJ in connection with the Merger Agreement. The second request was issued under the HSR Act. Sinclair received a substantively identical request for additional information and documentary material from the DOJ in connection with the transactions contemplated by the Merger Agreement. Issuance of the second request extends the waiting period under the HSR Act until 30 days after we and Sinclair have substantially complied with the second request, unless the waiting period is terminated earlier by the DOJ or the parties voluntarily extend the time for closing. The parties entered into the DOJ Timing Agreement on September 15, 2017, by which they agreed not to consummate the Merger Agreement before December 31, 2017, or 60 days following the date on which both parties have certified compliance with the second request, whichever is later. In addition, the parties agreed to provide the DOJ with 10 calendar days notice prior to consummating the Merger Agreement. The DOJ Timing Agreement has been amended twice, on October 30, 2017, to extend the date before which the parties may not consummate the Merger Agreement to January 30, 2018, and on January 27, 2018, to extend that date to February 11, 2018. The DOJ Timing Agreement thus currently provides that the parties will not consummate the Merger Agreement before February 11, 2018, or 60 days following the date on which both parties have certified compliance with the second request, whichever is later, and that the parties will provide the DOJ with 10 days notice before consummating the Merger Agreement.
Sinclair’s and our respective obligation to consummate the Merger are also subject to certain additional customary conditions, including (i) material accuracy of representations and warranties in the Merger Agreement of the other party, (ii) performance by the other party of its covenants in the Merger Agreementperform in all material respects its covenants, and (iii) since the date of the Merger Agreement, no material adverse effect with respect to the other party having occurred.
If the Merger Agreement is terminated (i) by either us or Sinclair because the Merger hassuch failure was not occurredcured by the end date described below or (ii) by Sinclair in respect of a willful breach of our covenants or agreements that would give rise to the failure of a closing condition that is incapable of being cured within the time periods prescribed by the Merger Agreement, and an alternative acquisition proposal has been made to us and publicly announced and not withdrawn prior to the termination, and within twelve months after termination of the Merger Agreement, we enter into a definitive agreement with respect to an alternative acquisition proposal (and subsequently consummate such transaction) or consummate a transaction with respect to an alternative acquisition proposal, we will pay Sinclair $135.5 million less Sinclair’s costs and expenses paid.
In addition to the foregoing termination rights,August 8, 2018. Additionally, either party maycould terminate the Sinclair Merger Agreement if the Sinclair Merger iswas not consummated on or before May 8, 2018, with an automatic extension to August 8, 2018 if necessary(and the failure for the Sinclair Merger to have been consummated by such date was not primarily due to a breach of the Sinclair Merger Agreement by the party terminating the Sinclair Merger Agreement). On August 9, 2018, we provided notification to Sinclair that we had terminated the Sinclair Merger Agreement, effective immediately, on the basis of Sinclair’s willful and material breaches of its covenants and the expiration of the end date thereunder. Additionally, on August 9, 2018, we filed a complaint in the Delaware Court of Chancery against Sinclair (the “Complaint”), alleging that Sinclair willfully and materially breached its obligations under the Sinclair Merger Agreement to use its reasonable best efforts to promptly obtain regulatory approval of the Sinclair Merger so as to enable the Sinclair Merger to close as soon as reasonably practicable. The lawsuit seeks damages for all losses incurred as a result of Sinclair’s breach of contract under the Sinclair Merger Agreement. On August 29, 2018, Sinclair filed an answer to our Complaint and a counterclaim (the “Counterclaim”). The Counterclaim alleges that we materially and willfully breached the Sinclair Merger Agreement by failing to use reasonable best efforts to obtain regulatory approval under circumstances specifiedof the Sinclair Merger. On September 18, 2018, we filed an answer to the Counterclaim. We believe the Counterclaim is without merit and intend to defend it vigorously.

On May 8, 2018, we, Sinclair Television Group, Inc. (“Sinclair Television”) and Fox Television Stations, LLC (“Fox”) entered into an asset purchase agreement (the “Fox Purchase Agreement”) to sell the assets of seven network affiliates for $910 million in cash, subject to post-closing adjustments. The network affiliates subject to the Fox Purchase Agreement were: KCPQ (Tacoma, WA); KDVR (Denver, CO); KSTU (Salt Lake City, UT); KSWB-TV (San Diego, CA); KTXL (Sacramento, CA); WJW (Cleveland, OH); and WSFL-TV (Miami, FL). In connection with the termination of the Sinclair Merger Agreement.Agreement on August 9, 2018, we provided notification to Fox that we terminated the Fox Purchase Agreement, effective immediately. Under the terms of the Fox Purchase Agreement, no termination fees were payable by any party.
Tax Reform
On December 22, 2017, the Tax Cuts and Jobs Act (“Tax Reform”) was signed into law. Under ASC Topic 740, the effects of Tax Reform are recognized in the period of enactment and as such arewere recorded in the fourth quarter of 2017. We are in the process of analyzing certain provisions of Tax Reform including but not limited to the repeal of the domestic production activities deduction and changes to the deductibility of executive compensation. Consistent with the guidance under ASC Topic 740, and subject to Staff Accounting Bulletin (“SAB”) 118, which provides for a measurement period to complete the accounting for certain elements of Tax Reform, we recorded the provisional

impact from the enactment of Tax Reform in the fourth quarter of 2017. As a result of Tax Reform, we recorded a provisional discrete net tax benefit of $256 million, primarily due to a remeasurement of the net deferred tax liabilities resulting from the decrease in the U.S. federal corporate income tax rate from 35% to 21%. Further impactsIn 2018, we completed the accounting for income tax effects of Tax Reform mayand recorded an additional income tax benefit of $24 million to the net deferred tax liabilities, primarily resulting from return to provision adjustments which have the effect of adjusting the provisional discrete net tax benefit recorded in the fourth quarter of 2017. The tax benefit was recorded as the result of new information, including higher than expected pension contributions and new filing positions reported in the Company’s income tax returns as they became due. While we consider the income tax accounting related to Tax Reform to be reflected in future quarters upon issuance of clarificationscomplete, we continue to existing law or additional technicalevaluate new guidance from the Department of Treasury and the completion of our tax return filings.legislation as it is issued. Tax Reform also provided for a one-time deemed mandatory repatriation of post-1986 undistributed foreign subsidiary earnings and profits (“E&P”) through the year ended December 31, 2017. We do not have any net accumulated E&P in our foreign subsidiaries and therefore are not subject to tax for the year ended December 31, 2017. Further, we have analyzed the effects of new taxes due on certain foreign income, such as global intangible low-taxed income (“GILTI”), base-erosion anti-abuse tax (“BEAT”), foreign-derived intangible income (“FDII”) and limitations on interest expense deductions (if certain conditions apply) that are effective starting in fiscal 2018. We have determined that these new provisions are not applicable to us.
Sale of Digital and Data Business
On December 19, 2016, we entered into the Gracenote SPA with Nielsen to sell equity interest in substantially all of the Digital and Data business for $560 million in cash, subject to certain purchase price adjustments. We completed the Gracenote Sale on January 31, 2017 and received gross proceeds of $581 million. In the second quarter of 2017, we received additional proceeds of $3 million as a result of purchase price adjustments. In the year ended December 31, 2017, we recognized a pretax gain of $33 million as a result of the Gracenote Sale. The Digital and Data segment consisted of several businesses focused on collection, creation and distribution of data and innovation in unique services and recognition technology that used data, including Gracenote Video, Gracenote Music and Gracenote Sports. On February 1, 2017, we used $400 million of proceeds from the Gracenote Sale to prepay a portion of our Term Loan Facility. Furthermore, in connection with the Gracenote Sale, we entered into a transition services agreement and a reverse transition services agreement that govern the relationships between Nielsen and us following the Gracenote Sale. The transition services agreement was extended through March 31, 2018, however, upon mutual agreement between the Company and Nielsen, it may be extended further. See Note 2 to our audited consolidated financial statements for further information.
Special Cash Dividends
On February 3, 2017 and April 9, 2015, we paid special cash dividends of $5.77 per share and $6.73 per share to holders of record of our Class A Common Stock and Class B Common Stock at the close of business on January 13, 2017 and March 25, 2015, respectively. The total aggregate payments on February 3, 2017 and April 9, 2015 totaled $499 million and $649 million, respectively, including payments to holders of Warrants. Under the Merger Agreement, we may not pay dividends other than quarterly dividends of $0.25 or less per share.

Discontinued Operations
Results of operations for Digital and Data businesses included in the Gracenote Sale are presented in discontinued operations in our Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income (Loss) for all periods presented. Summarized results of our discontinued operations are as follows (in thousands):
 Year Ended
 December 31, 2017 (1) December 31, 2016 December 31, 2015
Operating revenues$18,168
 $225,903
 $209,964
Direct operating expenses7,292
 75,457
 59,789
Selling, general and administrative15,349
 110,713
 104,968
Depreciation (2)—
 13,584
 9,735
Amortization (2)—
 29,999
 28,826
Operating (loss) profit(4,473) (3,850) 6,646
Interest income16
 96
 109
Interest expense (3)(1,261) (15,317) (15,843)
Other non-operating gain, net—
 —
 912
Loss before income taxes(5,718) (19,071) (8,176)
Pretax gain on the disposal of discontinued operations33,492
 —
 —
Total pretax income (loss) on discontinued operations27,774
 (19,071) (8,176)
Income tax expense (benefit) (4)13,354
 53,723
 (3,595)
Income (loss) from discontinued operations, net of taxes$14,420
 $(72,794) $(4,581)
(1)Results of operations for the Gracenote Companies are reflected through January 31, 2017, the date of the Gracenote Sale.
(2)No depreciation expense or amortization expense was recorded by us in 2017 as the Gracenote Companies’ assets were held for sale as of December 31, 2016.
(3)We used $400 million of proceeds from the Gracenote Sale to prepay a portion of our outstanding borrowings under the Term Loan Facility. Interest expense associated with our outstanding Term Loan Facility was allocated to discontinued operations based on the ratio of the $400 million prepayment to the total outstanding indebtedness under the Term Loan Facility in effect in each respective period.
(4)In the fourth quarter of 2016, as a result of meeting all criteria under ASC Topic 205, “Presentation of Financial Statements,” to classify Gracenote Companies as discontinued operations, we recorded tax expense of $62 million to increase our deferred tax liability for the outside basis difference related to the Gracenote Companies included in the Gracenote Sale. This charge was required to be recorded in the period we signed a definitive agreement to divest the business. Exclusive of the $62 million charge described above, the effective tax rates on pretax income from discontinued operations was 48.1%, 45.0% and 44.0% for the years ended December 31, 2017, December 31, 2016, and December 31, 2015, respectively. These rates differ from the U.S. federal statutory rate of 35% primarily due to the impact of certain nondeductible transaction costs, state income taxes (net of federal benefit), foreign tax rate differences and other adjustments.
The results of discontinued operations include selling and transaction costs, including legal and professional fees incurred by us to complete the Gracenote Sale, of $10 million for the year ended December 31, 2017 and $3 million for each of the years ended December 31, 2016 and December 31, 2015.
The net assets of discontinued operations included in our Consolidated Balance Sheet as of December 31, 2016, totaled $521 million, as further described in Note 2 to our audited consolidated financial statements.
The Gracenote SPA provides for indemnification against specified losses and damages which became effective upon completion of the transaction. We do not expect to incur material costs in connection with these indemnifications. We have no material contingent liabilities relating to the Gracenote Sale as of December 31, 2017.

Monetization of Real Estate Assets
In the years ended December 31, 2018, December 31, 2017, and December 31, 2016, we sold several properties for net pretax proceeds totaling $59 million, $144 million and $506 million, respectively, and recognized a net pretax gain of $25 million, $29 million and $213 million, respectively. Our real estate sales for the year ended December 31, 2015 were not material. We define net proceeds as pretax cash proceeds on the sale of properties, net of associated selling costs. See Note 64 to our audited consolidated financial statements for details on real estate sales for each of the three years in the period ended December 31, 2017.2018.
FCC Spectrum Auction
On April 13, 2017, the FCC announced the conclusion of the incentive auction, the results of the reverse and forward auction and the repacking of broadcast television spectrum. We participated in the auction and have received approximately $191 million in pretax proceeds (including $26 million of proceeds received by a Dreamcatcher station) as of December 31, 2017. The proceeds reflect the FCC’s acceptance of one or more bids placed by us or channel share partners of television stations owned or operated by us during the auction to modify and/or surrender spectrum used by certain of such bidder’s television stations. We used $102 million of after-tax proceeds to prepay a portion of our Term Loan Facility. After-tax proceeds of $12.6 million received by a Dreamcatcher station were used to prepay a substantial portion of the Dreamcatcher Credit Facility. FCC licenses with a carrying value of $39 million arewere included in assets held for sale as of December 31, 2017. WeIn 2017, we received $172 million in gross pretax proceeds for these licenses as part of the FCC spectrum auction, and expect to recognizein the

first quarter of 2018, we recognized a net pretax gain of $133 million in the first quarter of 2018 related to the surrender of the spectrum of these television stations in January 2018. WeIn 2017, we also received $84 million of pretax proceeds for sharing arrangements whereby we will provide hosting services to the counterparties. Additionally, we paid $66 million of proceeds in 2017 to counterparties who will host certain of our television stations under sharing arrangements.
Twenty-two of our television stations (including WTTK, which operates as a satellite station of WTTV) will beare required to change frequencies or otherwise modify their operations as a result of the repacking, as further described in Note 1210 to our audited consolidated financial statements. In doing so, the stations could incur substantial conversion costs, reduction or loss of over-the-air signal coverage or an inability to provide high definition programming and additional program streams. The legislation authorizing the incentive auction provides the FCC with a $1.750 billion special fund to reimburse reasonable capital costs and expenses incurred by stations that are reassigned to new channels in the repacking.repacking, which amount was increased by $1 billion pursuant to the adoption of an amended version of the Repack Airwaves Yielding Better Access for Users of Modern Services (RAY BAUM’S) Act of 2018 by the U.S. Congress on March 23, 2018. A majority of our capital expenditures for the FCC spectrum repacking occurred in 2018 and are expected to occur in 2019. Through December 31, 2018, we incurred $27 million in capital expenditures for the spectrum repack, of which $24 million were incurred in 2018. We received FCC reimbursements of $11 million during the year ended December 31, 2018. The reimbursements are included as a reduction to SG&A expense in our audited Consolidated Statement of Operations and are presented as an investing inflow in our audited Consolidated Statement of Cash Flows. We expect that the reimbursements from the FCC’s special fund will cover the majority of our capital costs and expenses related to the repacking. However, we cannot currently predict the effect of the repacking, whether the special fund will be sufficient to reimburse all of our expenses related to the repacking, the timing of reimbursements or any spectrum-related FCC regulatory action.
Chapter 11 Reorganization
On December 8, 2008 (the “Petition Date”) the Debtors filed voluntary petitions for relief (collectively, the “Chapter 11 Petitions”) under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court. As further defined and described in Note 310 to our audited consolidated financial statements, a plan of reorganization for the Debtors became effective and the Debtors emerged from Chapter 11 on December 31, 2012 (the “Effective Date”).2012. The Bankruptcy Court has entered final decrees that have collectively closed 106 of the Debtors’ Chapter 11 cases. The remaining Debtors’ Chapter 11 proceedings continue to be jointly administered under the caption In re: Tribune Media Company, et al., Case No.08-13141.
From the Petition Date and until the Effective Date, the Debtors operated their businesses as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure and applicable orders of the Bankruptcy Court. In general, as debtors-in-possession, the Debtors were authorized under Chapter 11 of the Bankruptcy Code to continue to operate as ongoing businesses, but could not engage in transactions outside the ordinary course of business without the prior approval of the Bankruptcy Court.

On the Effective Date, all of the conditions precedent to the effectiveness of the Plan were satisfied or waived, the Debtors emerged from Chapter 11, and the settlements, agreements and transactions contemplated by the Plan to be effected on the Effective Date were implemented, including, among other things, the appointment of a new board of directors and the initiation of distributions to creditors. As a result, our ownership changed from the ESOP to certain of our creditors on the Effective Date. On January 17, 2013, our Board of Directors appointed a chairman of the board and a new chief executive officer. Such appointments were effective immediately.
Since the Effective Date, we have substantially consummated the various transactions contemplated under the Plan. In particular, we have made all distributions of cash, Common Stock and Warrants that were required to be made under the terms of the Plan to creditors holding allowed claims as of December 31, 2012. Claims of general unsecured creditors that become allowed claims on or after the Effective Date have been or will be paid on the next quarterly distribution date after such allowance. At December 31, 2017,2018, restricted cash and cash equivalents held by us to satisfy the remaining claims obligations was $18$17 million and is estimated to be sufficient to satisfy such

obligations. If the aggregate allowed amount of the remaining claims exceeds the restricted cash and cash equivalents held for satisfying such claims, we will be required to satisfy the allowed claims from our cash on hand from operations. See Note 310 to our audited consolidated financial statements for further information regarding the Chapter 11 proceedings.
Secured Credit Facility
On December 27, 2013, in connection with our acquisition of Local TV, we as borrower, along with certain of our operating subsidiaries as guarantors, entered into a $4.073 billion secured credit facility with a syndicate of lenders led by JPMorgan Chase Bank, N.A. (“JPMorgan”) (the “Secured Credit Facility”). The Secured Credit Facility consists of the Term Loan Facility and the Revolving Credit Facility. The proceeds of the Term Loan Facility were used to pay the purchase price for Local TV and refinance the existing indebtedness of Local TV and the Term Loan Exit Facility. On June 24, 2015, we, the Guarantors (as defined below) and JPMorgan, as administrative agent, entered into an amendment (the “Amendment”) to the Secured Credit Facility. Prior to the Amendment and the Prepayment (as defined below), $3.479 billion of term loans (the “Former Term Loans”) were outstanding under the Secured Credit Facility. Pursuant to the Amendment, certain lenders under the Secured Credit Facility converted their Former Term Loans into the new tranche of term loans (the “Converted Term B Loans”), along with term loans advanced by certain new lenders, of $1.802 billion (the “New Term B Loans” and, together with the Converted Term B Loans, the “Term B Loans”). The proceeds of Term B Loans advanced by the new lenders were used to prepay in full all of the Former Term Loans that were not converted into Term B Loans. In addition, we used the net proceeds from the sale of the Notes (as defined below), together with cash on hand, to prepay (the “Prepayment”) $1.100 billion of Term B Loans. After giving effect to the Amendment and all prepayments contemplated thereby (including the Prepayment), there were $2.379 billion of Term B Loans outstanding under the Secured Credit Facility. All amounts outstanding under the Term Loan Facility are due and payable on December 27, 2020. We may repay the term loans at any time without premium penalty, subject to certain breakage costs. Availability under the Revolving Credit Facility will terminate, and all amounts outstanding under the Revolving Credit Facility will be due and payable on December 27, 2018, but we may repay outstanding loans under the Revolving Credit Facility at any time without premium or penalty, subject to breakage costs in certain circumstances. We recorded a loss of $37 million on the extinguishment of the Former Term Loans in our Consolidated Statements of Operations for the fiscal year ended December 31, 2015 as a portion of the facility was considered extinguished for accounting purposes.
Our obligations under the Secured Credit Facility are guaranteed by all of our domestic subsidiaries, other than certain excluded subsidiaries (the “Guarantors”). The Secured Credit Facility is secured by a first priority lien on substantially all of our personal property and assets and those of the Guarantors, subject to certain exceptions. The Secured Credit Facility contains customary limitations, including, among other things, on the ability of us and our subsidiaries to incur indebtedness and liens, sell assets, make investments and pay dividends to our shareholders.
The proceeds of the Revolving Credit Facility are available for working capital and other purposes not prohibited under the Secured Credit Facility. The Revolving Credit Facility includes borrowing capacity for letters

of credit and for borrowings on same-day notice, referred to as “swingline loans.” Borrowings under the Revolving Credit Facility are subject to the satisfaction of customary conditions, including absence of defaults and accuracy of representations and warranties. Under the terms of the Secured Credit Facility, the amount of the Term Loan Facility and/or the Revolving Credit Facility may be increased and/or one or more additional term or revolving facilities may be added to the Secured Credit Facility by entering into one or more incremental facilities, subject to a cap equal to the greater of (x) $1.000 billion and (y) the maximum amount that would not cause our net first lien senior secured leverage ratio (treating debt incurred in reliance of this basket as secured on a first lien basis whether or not so secured), as determined pursuant to the terms of the Secured Credit Facility, to exceed 4.50:1.00, subject to certain conditions. See Note 9 to our audited consolidated financial statements for further information and significant terms and conditions associated with the Secured Credit Facility, including but not limited to interest rates, repayment terms, fees, restrictions, and affirmative and negative covenants. The Secured Credit Facility is secured by a first priority lien on substantially all of our and our domestic subsidiaries’ personal property and assets, subject to certain exceptions. Our obligations under the Secured Credit Facility are guaranteed by all of our wholly-owned domestic subsidiaries, other than the Guarantors.
On January 27, 2017, we, the Subsidiary Guarantors, JPMorgan, as administrative agent and certain extending lenders, entered into an amendment (the “2017 Amendment”) to the Company’s First Lien Credit Agreement, dated as of December 27, 2013 (as amended by Amendment No. 1, dated as of June 24, 2015, the “Existing Credit Agreement”) and its Security Agreement, dated as of December 27, 2013 (as supplemented from time to time, the “Security Agreement”), pursuant to which, among other things, (i) certain term lenders under the term loan facility (the “Secured Credit Facility”) under the Existing Credit Agreement converted a portion (the “Term B Loans”) of their term loans outstanding immediately prior to the closing of the 2017 Amendment (the “Existing Term Loans”) into a new tranche of term loans in an aggregate amount (after giving effect to the Term Loan Increase Supplement (as defined below)) of approximately $1.761 billion (the “Term C Loans”), electing to extend the maturity date of the Term C Loans from December 27, 2020 to the earlier of (A) January 27, 2024 and (B) solely to the extent that more than $600 million in aggregate principal amount of the 5.875% Senior Notes due 2022 remain outstanding on such date, the date that is 91 days prior to July 15, 2022 (as such date may be extended from time to time) and (ii) certain revolving lenders under the revolving credit facility under the Existing Credit Agreement (the “Revolving Credit Facility”) converted all of their revolving commitments into a new tranche of revolving commitments (the “New Initial Revolving Credit Commitments”), electing to extend the maturity date of the New Initial Revolving Credit Commitments from December 27, 2018 to January 27, 2022. See Note 9 to our audited consolidated financial statements for further information regarding the 2017 Amendment and significant terms and conditions associated with the Secured Credit Facility, including, but not limited to, interest rates, repayment terms, fees, restrictions, and affirmative and negative covenants.
On January 27, 2017, immediately following effectiveness of the 2017 Amendment, we increased (A) the amount of our Term C Loans pursuant to an Increase Supplement (the “Term Loan Increase Supplement”) between us and the term lender party thereto and (B) the amount of commitments under our Revolving Credit Facility from $300 million to $420 million (the “Revolving Credit Facility Increase”), pursuant to (i) an Increase Supplement, among us and certain existing revolving lenders and (ii) a Lender Joinder Agreement, among us, a new revolving lender and JPMorgan, as administrative agent.
On January 31, 2017, we completed the Gracenote Sale and received gross proceeds of $581 million. On February 1, 2017, we used $400 million of proceeds from the Gracenote Sale to prepay a portion of our Term B Loans (as defined below). In the first quarter of 2017, as a result of the $400 million prepayment and the 2017 Amendment (as defined below), we recorded a charge of $19 million on the extinguishment and modification of debt. In the third quarter of 2017, we used after-tax proceeds of $102 million from our participation in the FCC spectrum auction to prepay a portion of the Term Loan Facility and as a result recorded charges of $1 million on the extinguishment of debt.
5.875% Senior Notes due 2022
On June 22, 2017, we announced that we received consents from 93.23% of holders of the Notes outstanding as of the record date of June 12, 2017 to effect certain proposed amendments to the indenture governing the Notes,

dated as of June 24, 2015 (the “Indenture”). We undertook the consent solicitation (the “Consent Solicitation”) at the request and expense of Sinclair in accordance with the terms of the Merger Agreement. In conjunction with receiving the requisite consents, on June 22, 2017, we, the subsidiary guarantors party thereto (the “Subsidiary Guarantors”) and The Bank of New York Mellon Trust Company, N.A., as trustee for the Notes (the “Trustee”), entered into the fourth supplemental indenture (the “Fourth Supplemental Indenture”) to the Indenture to effect the proposed amendments to (i) eliminate any requirement for us to make a “Change of Control Offer” (as defined in the Indenture) to holders of the Notes in connection with the transactions contemplated by the Merger Agreement, (ii) clarify the treatment under the Indenture of the proposed structure of the Merger and to facilitate the integration of the Company and its subsidiaries and the Notes with and into Sinclair’s debt capital structure, and (iii) eliminate the expense associated with producing and filing with the SEC separate financial reports for Sinclair Television Group, Inc., a wholly-owned subsidiary of Sinclair, as successor issuer of the Notes, if Sinclair or any other parent entity of the successor issuer of the Notes, in its sole discretion, provides an unconditional guarantee of the payment obligations of the successor issuer under the Notes (collectively, the “Amendments”). The Fourth Supplemental Indenture became effective immediately upon execution, but the Amendments will not become operative until immediately prior to the effective time of the Merger. See Note 9 to our audited consolidated financial statements for further information and significant terms and conditions associated with the Notes, including but not limited to repayment terms, fees, restrictions, and affirmative and negative covenants.
Dreamcatcher Credit Facility
In the third quarter of 2017, we used $12.6 million of after-tax proceeds from the FCC spectrum auction to prepay the obligations of Dreamcatcher under its senior secured credit facility (the “Dreamcatcher Credit Facility”). The debt extinguishment charge associated with this prepayment was immaterial. We made the final payment to pay off the Dreamcatcher Credit Facility in full in September 2017.
Newsday and Chicago Cubs Transactions
As further described in Note 8 to our audited consolidated financial statements, we consummated the closing of the Newsday Transactions on July 29, 2008. As a result of these transactions, CSC Holdings, LLC (“CSC”), formerly CSC Holdings, Inc., through NMG Holdings, Inc., owned approximately 97% and we owned approximately 3% of Newsday Holdings LLC (“NHLLC”). The fair market value of the contributed Newsday Media Group business’ (“NMG”) net assets exceeded their tax basis and did not result in an immediate taxable gain because the transaction was structured to comply with the partnership provisions of the Internal Revenue Code (“IRC”) and related regulations. On September 2, 2015, we sold our 3% interest in Newsday. Through December 31, 2015 we made approximately $136 million of federal and state tax payments through our regular tax reporting process which included $101 million that became payable upon closing of the sale of the Newsday partnership interest as further described in Note 8 to our audited consolidated financial statements.
In March 2013, the IRS issued its audit report on our federal income tax return for 2008 which concluded that the gain should have been included in our 2008 taxable income. Accordingly, the IRS proposed a $190 million tax and a $38 million accuracy-related penalty. We disagreed with the IRS’s position and timely filed our protest in response to the IRS’s proposed tax adjustments. In addition, if the IRS prevailed, we also would have been subject to state income taxes, interest and penalties.
During the second quarter of 2016, as a result of extensive discussions with the IRS administrative appeals division, we reevaluated our tax litigation position related to the Newsday transaction and re-measured the cumulative most probable outcome of such proceedings. As a result, during the second quarter of 2016, we recorded a $102 million charge which was reflected as a $125 million current income tax reserve and a $23 million reduction in deferred income tax liabilities. The income tax reserve included federal and state taxes, interest and penalties while the deferred income tax benefit is primarily related to deductible interest expense. In connection with the potential resolution of the matter, we also recorded $91 million of income tax expense to increase our deferred income tax liability to reflect the estimated reduction in the tax basis of our assets. The reduction in tax basis is required to reflect the expected negotiated reduction in the amount of the Company’s guarantee of the Newsday

partnership debt which was included in the reported tax basis previously determined upon emergence from bankruptcy. During the third quarter of 2016, we reached an agreement with the IRS administrative appeals division regarding the Newsday transaction which applies for tax years 2008 through 2015. The terms of the agreement reached with the IRS appeals office were materially consistent with our reserve at June 30, 2016. In connection with the final agreement, we also recorded an income tax benefit of $3 million to adjust the previously recorded estimate of the deferred tax liability adjustment described above. During the fourth quarter of 2016, we recorded an additional $1 million of income tax expense primarily related to the additional accrual of interest. During the second half of 2016, we paid $122 million of federal taxes, state taxes (net of state refunds), interest and penalties. The remaining $4 million of state liabilities are included in the income taxes payable account in our Consolidated Balance Sheet at both December 31, 2017 and December 31, 2016.
As further described in Note 86 to our audited consolidated financial statements, we consummated the closing of the Chicago Cubs Transactions on October 27, 2009. As a result of these transactions, Ricketts Acquisition LLC ownsNEH owned 95% and we ownowned 5% of the membership interests in New CubsCEV LLC. The fair market value of the contributed assets exceeded the tax basis and did not result in an immediate taxable gain because the transaction was structured to comply with the partnership provisions of the IRC and related regulations. On June 28, 2016, the IRS issued to us a Notice of Deficiency (“Notice”) which presents the IRS’s position that the gain should have been included in our 2009 taxable income. Accordingly, the IRS has proposed a $182 million tax and a $73 million gross valuation misstatement penalty. In addition, after-tax interest on the aforementioned proposed tax and penalty through December 31, 20172018 would be approximately $63$81 million. We continue to disagree with the IRS’s position that the transaction generated a taxable gain in 2009, the proposed penalty and the IRS’s calculation of the gain. During the third quarter of 2016, we filed a petition in U.S. Tax Court to contest the IRS’s determination. We continue to pursue resolution of this disputed tax matter with the IRS. If the IRS prevails in their position, the gain on the Chicago Cubs Transactions would be deemed to be taxable in 2009. We estimate that the federal and state income taxes would be approximately $225 million before interest and penalties. Any tax, interest and penalty due will be offset by tax payments made relating to this transaction subsequent to 2009. As of December 31, 2017,2018, we have paid or accrued approximately $53$80 million of federal and state tax payments through our regular tax reporting process. We do not maintain any tax reserves relating to the Chicago Cubs Transactions. In accordance with ASC Topic 740, our Consolidated Balance Sheets at December 31, 20172018 and December 31, 20162017 include a deferred tax liability of $96$69 million and $158$96 million, respectively, related to the future recognition of taxable income related to the Chicago Cubs Transactions.
CareerBuilder
On September 7, 2016, TEGNA announcedAugust 21, 2018, NEH provided the Call Notice to us that it began evaluating strategic alternatives, includingNEH was exercising its right to purchase our 5% membership interest in CEV LLC. We sold our 5% ownership interest in CEV LLC on January 22, 2019 and received pretax proceeds of $107.5 million. We expect to recognize a possible sale, for CareerBuilder. In 2017, we recorded non-cash pretax impairment charges totaling $181gain of $86 million to write down our investment in CareerBuilder prior to the sale. The impairment charges resulted from declines in the fair valuefirst quarter of the investment that we determined to be other than temporary.
On June 19, 2017, TEGNA announced that it entered into an agreement (the “CareerBuilder Sale Agreement”), together with the other owners of CareerBuilder, including us, to sell a majority interest in CareerBuilder to an investor group led by investment funds managed by affiliates of Apollo Global Management, LLC and the Ontario Teachers’ Pension Plan Board. The transaction closed on July 31, 2017 and we received cash of $158 million, which included an excess cash distribution of $16 million. We recognized a gain on sale of $4 million in 2017.2019. As a result of the sale, our ownershipthe total remaining deferred tax liability of $69 million will become currently payable in CareerBuilder declined from 32% to approximately 7%, on a fully diluted basis. As2019. The sale of December 31, 2017, our ownership interest in CareerBuilder was approximately 6%CEV LLC has no impact on a fully diluted basis (including CareerBuilder employees’ unvested equity awards).our dispute with the IRS.
Employee Reductions
We recorded pretax charges, mainly consisting of employee severance costs, associated termination benefits and related expenses totaling $7 million, $5 million and $10 million in 2018, 2017 and $5 million in 2017, 2016, and 2015, respectively. These

charges are included in direct operating expenses or selling, general and administrative expenses (“SG&A”),&A expense, as appropriate, in our Consolidated Statements of Operations.
The following table summarizes these severance and related charges included in income (loss) from continuing operations by business segment for 2017, 2016 and 2015 (in thousands):
 2017 2016 2015
Television and Entertainment$4,367
 $9,228
 $2,317
Corporate and Other372
 1,178
 2,959
Total$4,739
 $10,406
 $5,276
Severance and related expenses included in income (loss) from discontinued operations, net of taxes totaled $0.5 millionand$1 million in 2016 and 2015, respectively.
 2018 2017 2016
Television and Entertainment$7,155
 $4,367
 $9,228
Corporate and Other(398) 372
 1,178
Total$6,757
 $4,739
 $10,406
The accrued liability for severance and related expenses was $5$7 million and $9$5 million at December 31, 20172018 and December 31, 2016,2017, respectively.

Non-Operating Items
Non-operating items for 2017, 2016 and 2015 are summarizedwere as follows (in thousands):
2017 2016 20152018 2017 2016
Loss on extinguishments and modification of debt$(20,487) $—
 $(37,040)$—
 $(20,487) $—
Gain on investment transactions, net8,131
 —
 12,173
(Loss) gain on investment transactions, net(1,113) 8,131
 —
Write-downs of investments(193,494) —
 —
—
 (193,494) —
Other non-operating gain, net71
 5,427
 7,228
68
 71
 5,427
Total non-operating (loss) gain, net$(205,779) $5,427
 $(17,639)$(1,045) $(205,779) $5,427
Non-operating items for 2018 included a pretax loss of $5 million from the sale of our remaining ownership interest in CareerBuilder and a pretax gain of $4 million from the sale of one of our other equity investments.
Non-operating items for 2017 included a $20 million pretax loss on the extinguishments and modification of debt. The loss included a write-off of unamortized debt issuance costs of $7 million and an unamortized discount of $2 million as a portion of the Term Loan Facility was considered extinguished for accounting purposes as well as an expense of $12 million of third party fees as a portion of the Term Loan Facility was considered a modification transaction under ASC 470, “Debt.” Gain(Loss) gain on investment transactions, net included a pretax gain of $5 million from the sale of our troncTribune Publishing shares and a pretax gain of $4 million from the partial sale of CareerBuilder. Write-downs of investments included non-cash pretax impairment charges of $193 million to write down our investments in CareerBuilder (as further described above) and Dose Media, LLC (“Dose Media”) as well asand one of our cost method investments.other equity investments (as further described in Note 6 to our audited consolidated financial statements).
Non-operating items for 2016 included a $5 million non-cash favorable workers’ compensation reserve adjustment related to businesses divested by the Companyus in prior years.
Non-operating items in 2015 included a $37 million pretax loss on the extinguishment of the Former Term Loans, which includes the write-off of unamortized debt issuance costs and discounts, as further described in Note 9 to our audited consolidated financial statements. Gain on investment transactions, net in 2015 included a pretax gain of $8 million for an additional cash distribution from CV pursuant to the collection of a contingent receivable subsequent to our sale of our interest in CV and a pretax gain of $3 million on the sale of our 3% interest in NHLLC on September 2, 2015. See Note 8 to our audited consolidated financial statements for further information on the sale of NHLLC. Other non-operating items in 2015 included a $9 million non-cash favorable workers’ compensation reserve adjustment related to businesses divested by us in prior years and a $2 million non-cash pretax charge to write off a convertible note receivable resulting from a decline in the fair value of the convertible note receivable that we determined to be other than temporary.

Results of Operations
The following discussion of our annual results of operations only relates to our continuing operations, unless otherwise noted.
As described under “—Significant Events—Digital and Data Sale,”previously, on December 19, 2016, we entered into the Gracenote SPA with Nielsen to sell our equity interest in substantially all of the Digital and Data business. As a result, the historical results of operations for the businesses included in the Gracenote Sale are reported in discontinued operations for the years ended December 31, 2017 2016 and 2015. The following discussion of our annual results of operations only relates to our continuing operations, unless otherwise noted.
December 31, 2016. Beginning in the fourth quarter of 2016, the Television and Entertainment reportable segment includes the operations of Covers, a business-to-consumersports betting information website, which was previously included in the Digital and Data reportable segment. Beginning in fiscal 2015, the Television and Entertainment reportable segment includes our Screener entertainment website business, which was previously included in the Digital and Data reportable segment. Certain previously reported amounts have been reclassified to conform to the current presentation; the impact of this reclassification was immaterial.
On April 16, 2015, our BoardIn May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers” (“Topic 606”). The amendments in ASU 2014-09 created Topic 606 and superseded the revenue recognition requirements in Topic 605, “Revenue Recognition.” We adopted the new revenue guidance in the first quarter of Directors approved2018 using the changemodified retrospective transition method applied to those contracts which were not completed as of our fiscal year end from the last Sunday in December of each year to December 31, of each year2017. Results for reporting periods prior to adoption continue to be presented in accordance with our historical accounting under Topic 605. The only identified impact to our financial statements relates to barter revenue and to change our fiscal quarter end to the last calendar day of each quarter. This change in fiscal year end was effective with the second fiscal quarter of 2015,expense as well as barter-related broadcast rights and contracts payable for broadcast rights, which ended on June 30, 2015. As a result of this change, the fiscal year ended December 31, 2016 has two less days compared to the fiscal year ended December 31, 2015. The disparity in days had an impact on our consolidated operating revenues, operating expenses and operating profit (loss) of approximately 1%.are no longer recognized.

For the Three Years in the Period Ended December 31, 20172018
CONSOLIDATED
Our consolidatedConsolidated operating results for 2018, 2017 2016 and 20152016 are shown in the table below.below (in thousands).
       Change
(in thousands)2017 2016 2015 17-16 16-15
Operating revenues$1,848,959
 $1,947,930
 $1,801,967
 -5 % +8 %
          
Operating profit (loss):         
Before impairments of goodwill and other intangible assets$108,468
 $436,974
 $115,665
 -75 % *
Impairments of goodwill and other intangible assets—
 (3,400) (385,000) -100 % -99 %
After impairments of goodwill and other intangible assets$108,468
 $433,574
 $(269,335) -75 % *
          
Income on equity investments, net$137,362
 $148,156
 $146,959
 -7 % +1 %
          
Income (loss) from continuing operations$183,077
 $87,040
 $(315,337) *
 *
          
Income (loss) from discontinued operations, net of taxes$14,420
 $(72,794) $(4,581) *
 *
          
Net income (loss) attributable to Tribune Media Company$194,119
 $14,246
 $(319,918) *
 *
*Represents positive or negative change in excess of 100%

Operating Revenues and Profit (Loss)—Consolidatedoperating revenues and operating profit (loss) by business segment were as follows:
       Change
(in thousands)2017 2016 2015 17-16 16-15
Operating revenues         
Television and Entertainment$1,835,423
 $1,909,896
 $1,752,542
 -4 % +9 %
Corporate and Other13,536
 38,034
 49,425
 -64 % -23 %
Total operating revenues$1,848,959
 $1,947,930
 $1,801,967
 -5 % +8 %
Operating profit (loss)         
Television and Entertainment:      
 
Before impairments of goodwill and other intangible assets$196,100
 $328,237
 $209,860
 -40 % +56 %
Impairments of goodwill and other intangible assets—
 (3,400) (385,000) -100 % -99 %
After impairments of goodwill and other intangible assets196,100
 324,837
 (175,140) -40 % *
Corporate and Other(87,632) 108,737
 (94,195) *
 *
Total operating profit (loss)$108,468
 $433,574
 $(269,335) -75 % *
       Change
 2018 2017 2016 18-17 17-16
Operating revenues$2,009,734
 $1,848,959
 $1,947,930
 +9% -5 %
          
Operating profit$488,440
 $85,653
 $408,772
 *
 -79 %
          
Income on equity investments, net$169,335
 $137,362
 $148,156
 +23% -7 %
          
Income from continuing operations$412,530
 $183,077
 $87,040
 *
 *
          
Income (loss) from discontinued operations, net of taxes$—
 $14,420
 $(72,794) *
 *
          
Net income attributable to Tribune Media Company$412,571
 $194,119
 $14,246
 *
 *
 
*Represents positive or negative change in excess of 100%
Operating Revenues and Profit (Loss)—Consolidatedoperating revenues and operating profit (loss) by business segment were as follows (in thousands):
       Change
 2018 2017 2016 18-17 17-16
Operating revenues         
Television and Entertainment$1,998,678
 $1,835,423
 $1,909,896
 +9 % -4 %
Corporate and Other11,056
 13,536
 38,034
 -18 % -64 %
Total operating revenues$2,009,734
 $1,848,959
 $1,947,930
 +9 % -5 %
Operating profit (loss)         
Television and Entertainment583,271
 196,100
 324,837
 *
 -40 %
Corporate and Other(94,831) (110,447) 83,935
 -14 % *
Total operating profit$488,440
 $85,653
 $408,772
 *
 -79 %
*Represents positive or negative change in excess of 100%
2018 compared to 2017
Consolidated operating revenues increased 9%, or $161 million, in 2018 primarily due to an increase of $163 million in Television and Entertainment revenues driven by higher advertising revenue, retransmission revenues and carriage fees, partially offset by the absence of barter revenue due to the new revenue guidance adopted in 2018. Consolidated operating profit was $488 million in 2018 compared to $86 million in 2017, representing an increase of $403 million. The increase was primarily driven by higher Television and Entertainment operating profit largely due to a net pretax gain of $133 million related to licenses sold in the FCC spectrum auction, an increase in revenue and lower programming expenses as well as a lower Corporate and Other operating loss primarily due to a decrease in compensation, other expenses and depreciation. Programming expenses included a program impairment charge of $28 million for the syndicated program Elementary at WGN America in 2018 compared to a program impairment charge of $80 million in 2017 for the syndicated programs Elementary and Person of Interest at WGN America.

2017 compared to 2016
Consolidated operating revenues decreased 5%, or $99 million, in 2017 primarily due to a decrease of $74 million in Television and Entertainment revenues driven by lower advertising and other revenue, partially offset by higher retransmission revenue and carriage fees. Additionally, Corporate and Other revenues declined by $24 million primarily due to the loss of revenue from real estate properties sold in 2016 and 2017. Consolidated operating profit was $108$86 million in 2017 compared to $434$409 million in 2016, representing a decrease of $325$323 million primarily due to a $185 million decline in gains recorded on the sales of real estate from $213 million in 2016 to $29 million in 2017 and lower Television and Entertainment operating profit. Television and Entertainment operating profit decreased due to lower revenues and higher programming expenses partly resulting from a $43 million increase in program impairment charges. Programming expenses included a program impairment charge of $80 million for the syndicated programs Elementary and Person of Interest at WGN America in 2017 compared to a program impairment charge of $37 million in 2016 for the syndicated program Elementary at WGN America.
2016 compared to 2015
Consolidated operating revenues increased 8%, or $146 million, in 2016 primarily due to an increase of $157 million in Television and Entertainment revenues, driven by higher advertising revenue, retransmission revenue and carriage fees, partially offset by lower other revenue and a decrease of $11 million in Corporate and Other primarily due to the loss of revenue from real estate properties sold in 2016. Consolidated operating profit was $434 million in 2016, which included an impairment charge of $3 million related to other intangible assets, compared to an operating loss of $269 million in 2015, which included an impairment charge of $385 million related to goodwill and other intangible assets. Consolidated operating profit before impairment of goodwill and other intangible assets was $437 million in 2016 compared to $116 million in 2015, representing an increase of $321 million primarily due to $213 million of gains recorded on the sales of real estate. Additionally, Television and Entertainment operating profit increased primarily due to higher revenues and lower programming expenses partly due to lower impairment charges. Programming expenses included a program impairment charge of $37 million in 2016 for the syndicated program Elementary at WGN America compared to a program impairment charge of $74 million in 2015 for the syndicated programs Person of Interest and Elementary at WGN America.

Operating Expenses—Consolidated operating expenses were as follows:follows (in thousands):
      Change      Change
(in thousands)2017 2016 2015 17-16 16-15
2018 2017 2016 18-17 17-16
Programming$604,068
 $515,738
 $535,799
 +17 % -4 %$489,063
 $604,068
 $515,738
 -19 % +17 %
Direct operating expenses391,770
 390,595
 376,383
 — % +4 %401,366
 391,770
 390,595
 +2 % — %
Selling, general and administrative550,193
 592,220
 543,065
 -7 % +9 %567,798
 573,008
 620,422
 -1 % -8 %
Depreciation56,314
 58,825
 64,554
 -4 % -9 %54,206
 56,314
 58,825
 -4 % -4 %
Amortization166,679
 166,664
 166,404
 — % — %166,715
 166,679
 166,664
 — % — %
(Gain) loss on sales of real estate, net(28,533) (213,086) 97
 -87 % *
Total operating expenses before impairments of goodwill and other intangible assets1,740,491
 1,510,956
 1,686,302
 +15 % -10 %
Impairments of goodwill and other intangible assets—
 3,400
 385,000
 -100 % -99 %
Gain on sales of spectrum(133,197) —
 —
 *
 — %
Gain on sales of real estate, net(24,657) (28,533) (213,086) -14 % -87 %
Total operating expenses$1,740,491
 $1,514,356
 $2,071,302
 +15 % -27 %$1,521,294
 $1,763,306
 $1,539,158
 -14 % +15 %
 
*Represents positive or negative change in excess of 100%
20172018 compared to 20162017
Programming expenses, which represented 33%24% of revenues for the year ended December 31, 20172018 compared to 33% for the year ended December 31, 2017, decreased 19%, or$115 million, due largely to the $51 million decrease in program impairment charges described above as well as lower amortization of license fees, the absence of barter expense in 2018 and a total of $19 million of additional expense in 2017 related to a shift in programming strategy at WGN America in the second quarter of 2017, partially offset by higher network affiliate fees. The decrease in amortization of license fees of $73 million was primarily attributable to three originals airing in the first half of 2017 (Outsiders, Underground and Salem) versus airing lower cost programming in 2018. Barter expense decreased $28 million as we no longer recognize barter revenue and expense as a result of adopting new revenue guidance in 2018. Network affiliate fees increased by $59 million mainly due to the renewal of network affiliation agreements in eight markets with FOX during the third quarter of 2018, along with other contractual increases.
Direct operating expenses, which represented 20% of revenues in the year ended December 31, 2018 compared to 21% for the year ended December 31, 2017, increased 2%, or $10 million, due mainly to increases in compensation and outside services expense. Compensation expense increased $5 million due to higher direct pay and benefits. Outside services expense increased $4 million primarily due to costs associated with spectrum sharing arrangements and costs for operating websites.
SG&A expenses, which represented 28% of revenues in the year ended December 31, 2018 compared to 31% for the year ended December 31, 2017, decreased 1%, or $5 million, primarily due to lower compensation and other expenses, partially offset by an increase in outside services expense. Compensation expense decreased 1%, or $4

million, due to a $13 million decline at Corporate and Other, partially offset by a $10 million increase at Television & Entertainment. The decline at Corporate and Other was primarily due to the prior year expense of $13 million ($6 million of severance and $7 million of stock-based compensation) related to the resignation of the CEO in the first quarter of 2017. In addition, direct pay and benefits decreased by $1 million and severance decreased by $1 million, offset by a $2 million increase in retention bonuses ($9 million in 2018 compared to $7 million in 2017). Compensation expense increased $10 million at Television & Entertainment due to a $9 million increase in incentive compensation, a $4 million increase in retention bonuses ($5 million in 2018 compared to $1 million in 2017) and a $3 million increase in severance, partially offset by a $6 million decrease in direct pay and benefits and a $1 million decrease in stock-based compensation. Other expenses decreased 2%, or $4 million, as the receipt of $11 million of spectrum repack reimbursements, a $2 million decrease in rent expense and a $1 million decrease in promotion expense were partially offset by a $5 million increase in outside national sales representative commissions, $4 million of costs related to a litigation reserve and a non-cash impairment charge of $3 million related to the impairment of an FCC license at one of our television stations in 2018. Outside services expense increased 2%, or $2 million, driven by higher professional and legal fees.
Gain on sales of real estate, net of $25 million for 2018 related to the sales of our properties in Melville, NY and Hartford, CT, as further described in Note 4 to our audited consolidated financial statements.
Depreciation expense fell 4%, or $2 million, in 2018. Amortization expense remained flat in 2018.
Gain on sales of spectrum of $133 million for 2018 relates to licenses sold in the FCC spectrum auction for which the spectrum of these television stations was surrendered in January 2018, as further described in Note 10 to our audited consolidated financial statements.
2017 compared to 2016
Programming expenses, which represented 33% of revenues for the year ended December 31, 2017 compared to 26% for the year ended December 31, 2016, increased 17%, or$88 $88 million,, due largely to a $43 million increase in program impairment charges and a total of $19 million of expense related to athe shift in programming strategy at WGN America in the second quarter of 2017. This includesincluded cancellation costs for Outsiders and Underground and the associated accelerated amortization of remaining programming assets for both shows as well as the write-off of certain other capitalized program development projects. The remaining increase was due to higher network affiliate fees of $27 million and $7 million of higher amortization of license fees primarily related to airing higher cost feature presentations on WGN America.
Direct operating expenses, which represented 21% of revenues infor the year ended December 31, 2017 compared to 20% for the year ended December 31, 2016, were essentially flat as a $2 million increase in compensation expense at Television and Entertainment was mostly offset by declines in other direct operating expenses.
SG&A expenses, which represented 30%31% of revenues in both of the yearsfor year ended December 31, 2017 andcompared to 32% for the year ended December 31, 2016, decreased 7%8%, or $42$47 million, due mainly to lower other expenses and outside services expense. Outside services expense decreased 6%, or $5 million, driven by a $12 million decrease in professional fees primarily related to technology, a $3 million decrease in costs for operating websites and a $3 million decrease in costs associated with real estate sold in 2016, partially offset by a $14 million increase in professional and legal fees primarily associated with the terminated Sinclair Merger. Other expenses decreased 15%16%, or $35$39 million, primarily due to a $13$9 million decline in promotion expense, a $13 million decline in real estate impairment charges, a $5 million decline in outside national sales representative commissions, a $2 million decrease in bad debt write-offs, and a $9 million decrease in real estate taxes and other costs associated with real estate sold in 2016. Additionally, 2016 included non-cash impairment charges of $3 million related to the impairment of FCC licenses at two of our television stations.
Gain on sales of real estate, net of $29 million for 2017 primarily related to the sales of our properties in Costa Mesa, CA and Ft. Lauderdale, FL, as further described in Note 6 to our audited consolidated financial statements.FL.

Depreciation expense fell 4%, or $3 million, in 2017. The decrease is primarily due to lower levels of depreciable property. Amortization expense remained flat in 2017.

2016 compared to 2015
Programming expenses, which represented 26% of revenues for the year ended December 31, 2016 compared to 30% for the year ended December 31, 2015, decreased 4%, or $20 million, due primarily to a $37 million decline in program impairment charges and a $20 million reduction in outside production costs, partially offset by higher network affiliate fees of $29 million and higher amortization of license fees of $6 million.
Direct operating expenses, which represented 20% of revenues for the year ended December 31, 2016 compared to 21% for the year ended December 31, 2015, increased 4%, or $14 million. Compensation expense increased 2%, or $6 million, primarily at Television and Entertainment driven by higher direct pay and benefit costs. All other direct operating expenses increased 13%, or $8 million, primarily due to the absence of a $6 million payment received in the first quarter of 2015 related to the settlement of a music license fee class action lawsuit and an increase of $2 million in costs of operating the websites and mobile applications of our television stations.
SG&A expenses, which represented 30% of revenues for both years ended December 31, 2016 and December 31, 2015, increased 9%, or $49 million, due mainly to higher compensation, promotion expenses, outside services and other expenses. Compensation expense increased $16 million due to a $5 million increase in severance related to employee reductions, a $6 million increase at Television and Entertainment driven by merit increases and a $3 million increase in stock-based compensation. Promotion expense increased 11%, or $12 million, primarily for first run original programs and syndicated programs airing on WGN America, increased advertising related to the DISH Network blackout and increased sales research services. Outside services expense increased 18%, or $14 million, primarily due to a $6 million increase in costs of operating the websites and mobile applications of our television stations resulting in higher digital revenues, a $4 million increase in professional and legal fees and a $5 million increase for license fees related to technology application implementations. Other expenses increased primarily due to an $8 million increase in impairment charges associated with certain real estate properties from $7 million in 2015 to $15 million in 2016.
Gain on sales of real estate, net of $213 million for 2016 primarily related to the sales of Tribune Tower, the LA Times Property and the Olympic Printing Plant facility.
Depreciation expense fell 9%, or $6 million, in 2016. The decrease is primarily due to property sales and the real estate properties held for sale which are no longer depreciable. Amortization expense remained flat in 2016.
During the fourth quarter of 2016, we recorded non-cash impairment charges of $3 million related to the impairment of FCC licenses at two of our television stations. During the fourth quarter of 2015, we recorded non-cash impairment charges of $385 million at Television and Entertainment, consisting of a $381 million charge related to the impairment of goodwill at the cable reporting unit and a $4 million charge related to the impairment of an FCC license at one of our televisions stations (see Note 7 to our audited consolidated financial statements for additional information).
Income (Loss) From Discontinued Operations, Net of Taxes—The results of discontinued operations for the years ended December 31, 2017 December 31, 2016 and December 31, 20152016 include the operating results of the Digital and Data businesses included in the Gracenote Sale. Income from discontinued operations, net of taxes in 2017 totaled $14 million, including a pretax gain on the sale of $33 million, compared to a loss from discontinued operations, net of taxes in 2016 and 2015 of $73 million and $5 million, respectively.million. Interest expense allocated to discontinued operations totaled $1 million $15 million and $16$15 million for 2017 2016 and 2015,2016, respectively. The results of discontinued operations also include transaction costs, including legal and professional fees, incurred by us to complete the Gracenote Sale, of $10 million and $3 million for the yearyears ended December 31, 2017 and $3 million for each of the years ended December 31, 2016, and December 31, 2015.respectively. See Note 2 to our audited consolidated financial statements for further information.

TELEVISION AND ENTERTAINMENT
Operating Revenues and Profit (Loss)—Our Television and Entertainment operating revenues include advertising revenues, retransmission revenues, carriage fees, barter/trade revenues and other revenues. The following table presents Television and Entertainment operating revenues, operating expenses and operating profit:profit (in thousands):
       Change
(in thousands)2017 2016 2015 17-16 16-15
Operating revenues$1,835,423
 $1,909,896
 $1,752,542
 -4 % +9 %
          
Operating expenses:
 
 
 
 
Before impairments of goodwill and other intangible assets$1,639,323
 $1,581,659
 $1,542,682
 +4 % +3 %
Impairments of goodwill and other intangible assets—
 3,400
 385,000
 -100 % -99 %
After impairments of goodwill and other intangible assets$1,639,323
 $1,585,059
 $1,927,682
 +3 % -18 %
          
Operating profit (loss):         
Before impairments of goodwill and other intangible assets$196,100
 $328,237
 $209,860
 -40 % +56 %
Impairments of goodwill and other intangible assets—
 (3,400) (385,000) -100 % -99 %
After impairments of goodwill and other intangible assets$196,100
 $324,837
 $(175,140) -40 % *
       Change
 2018 2017 2016 18-17 17-16
Operating revenues (1)$1,998,678
 $1,835,423
 $1,909,896
 +9 % -4 %
Operating expenses1,415,407
 1,639,323
 1,585,059
 -14 % +3 %
Operating profit$583,271
 $196,100
 $324,837
 *
 -40 %
 
*Represents positive or negative change in excess of 100%
(1) Barter revenues are no longer recognized under the new revenue guidance adopted in 2018. For the years ended December 31, 2017 and December 31, 2016, barter revenue totaled $28 million and $30 million, respectively. Prior period amounts have not been adjusted under the modified retrospective method.
2018 compared to 2017
Television and Entertainment operating revenues increased 9%, or $163 million, in 2018 largely due to increases in advertising revenues, retransmission revenues, carriage fees and other revenue partially offset by the absence of barter revenue, as further described below.
Television and Entertainment operating profit increased $387 million to $583 million in 2018 compared to $196 million in 2017. The increase was due primarily to a $163 million increase in operating revenues, a net pretax gain of $133 million in 2018 related to licenses sold in the FCC spectrum auction and a $115 million decrease in programming expenses, partially offset by higher compensation expense and other expense, as further described below.
2017 compared to 2016
Television and Entertainment operating revenues decreased 4%, or $74 million, in 2017 due largely to a decrease in advertising and other revenue, partially offset by an increase in retransmission revenues and carriage fees, as further described below.
Television and Entertainment operating profit decreased $129 million to $196 million in 2017 compared to $325 million in 2016, which included an impairment of other intangible assets of $3 million.2016. The decrease was due primarily to lowera $74 million decline in operating revenues of $74and an $88 million and higherincrease in programming expenses, of $88 million, mainly from a $43 million increase in program impairment charges, higher network affiliate fees and additional expensesexpense related to the shift in programming strategy at WGN America, partially offset by a $26 million decrease in other expenses of $23 million and compensation expense ofa $6 million as further described below.
2016 compared to 2015
Television and Entertainment operating revenues increased 9%, or $157 million,decrease in 2016 due largely to an increase in advertising revenue, retransmission revenues and carriage fees, partially offset by lower other revenue, as further described below.
Television and Entertainment operating profit was $325 million in 2016, which included an impairment of other intangible assets of $3 million, compared to an operating loss of $175 million in 2015, which included an impairment of goodwill and other intangible assets of $385 million. Television and Entertainment operating profit before impairments of goodwill and other intangible assets was $328 million and $210 million in 2016 and 2015, respectively. The increase was due primarily to higher operating revenues of $157 million and lower programming expenses resulting from a $37 million reduction in program impairment charges and lower outside production costs, partially offset by higher amortization of license fees and network fees, higher compensation of $21 million and increased other expenses of $41 million,expense, as further described below.

Operating Revenues—Television and Entertainment operating revenues, by classification, were as follows:follows (in thousands):
      Change      Change
(in thousands)2017 2016 2015 17-16 16-15
2018 2017 2016 18-17 17-16
Advertising$1,225,900
 $1,374,571
 $1,303,220
 -11 % +5 %$1,315,769
 $1,225,900
 $1,374,571
 +7 % -11 %
Retransmission revenues412,309
 334,724
 283,140
 +23 % +18 %471,632
 412,309
 334,724
 +14 % +23 %
Carriage fees127,935
 121,044
 85,344
 +6 % +42 %161,214
 127,935
 121,044
 +26 % +6 %
Barter/trade37,381
 39,025
 38,243
 -4 % +2 %9,092
 37,381
 39,025
 -76 % -4 %
Other31,898
 40,532
 42,595
 -21 % -5 %40,971
 31,898
 40,532
 +28 % -21 %
Total operating revenues$1,835,423
 $1,909,896
 $1,752,542
 -4 % +9 %$1,998,678
 $1,835,423
 $1,909,896
 +9 % -4 %
2018 compared to 2017
Advertising Revenues—Advertising revenues, net of agency commissions, grew 7%, or $90 million, in 2018 primarily due to a $150 million increase in political advertising revenues that was partially offset by a $62 million decrease in core advertising revenues (comprised of local and national advertising, excluding political and digital). The decrease in core advertising revenue was primarily due to a reduction in inventory available for local and national spots due to political advertising, a decline in television advertising in certain of our markets, a decrease in revenues associated with airing the Super Bowl on 2 NBC-affiliated stations in 2018 compared to 14 FOX-affiliated stations in 2017 and the 2018 Winter Olympics, which negatively impacted the non-NBC affiliated stations’ advertising revenues. Political advertising revenues, which are a component of total advertising revenues, were $172 million for the fiscal year ended December 31, 2018 compared to $22 million for the fiscal year ended December 31, 2017, as 2018 was an election year.
Retransmission Revenues—Retransmission revenues increased 14%, or $59 million, in 2018 primarily due to a $74 million increase from higher rates included in retransmission consent renewals of our MVPD agreements, partially offset by a decrease in the number of subscribers.
Carriage Fees—Carriage fees increased 26%, or $33 million, in 2018 primarily due to higher rates for the distribution of WGN America.
Barter/Trade Revenues—Barter/trade revenues decreased 76%, or $28 million, in 2018 as barter revenues are no longer recognized under the new revenue guidance adopted in 2018. We recognized $28 million of barter revenue in 2017.
Other Revenues—Otherrevenues are primarily derived from profit sharing, revenue on syndicated content and copyright royalties. Other revenues increased 28%, or $9 million, in 2018 mainly due to a $4 million increase in copyright royalties, $3 million of revenue for the broadcast of third party digital multicast network programming and $3 million of deferred revenue recognized related to spectrum sharing arrangements.
2017 compared to 2016
Advertising Revenues—Advertising revenues, net of agency commissions, decreased 11%, or $149 million, in 2017 primarily due to a $115 million decrease in net political advertising revenues and a $36 million decrease in net core advertising revenues (comprised of local and national advertising, excluding political and digital), partially offset by a $2 million increase in digital revenues. The decrease in net core advertising revenue was primarily due to a decline in market revenues, partially offset by an increase in revenues associated with airing the Super Bowl on 14 FOX-affiliated stations in 2017 compared to 6 CBS-affiliated stations in 2016. Net politicalPolitical advertising revenues, which are a component of total advertising revenues, were $22 million for the fiscal year ended December 31, 2017 compared to $137 million for the fiscal year ended December 31, 2016 as 2016 was a presidential election year.

Retransmission Revenues—Retransmission revenues increased 23%, or $78 million, in 2017 primarily due to a $76 million increase from higher rates included in retransmission consent renewals of our MVPD agreements, partially offset by a decrease in the number of subscribers. Additionally, 2016 was negatively impacted due to the blackout of our stations by DISH network from June 12, 2016 to September 3, 2016.
Carriage Fees—Carriage fees increased 6%, or $7 million, in 2017 due mainly to a $9 million increase from higher rates for the distribution of WGN America, partially offset by a decline in the number of subscribers.
Barter/Trade Revenues—Barter/trade revenues decreased 4%, or $2 million, in 2017. As discussed in Note 1 to our audited consolidated financial statements, barter revenue will no longer be recognized pursuant to new revenue recognition guidance that we will adopt in the first quarter of 2018.
Other Revenues—Other revenues are primarily derived from profit sharing, revenue on syndicated content and copyright royalties. Other revenues decreased 21%, or $9 million, in 2017 due primarily to 2016 including profit sharing from original programming that was cancelled.
2016 compared to 2015
Advertising Revenues—Advertising revenues, net of agency commissions, grew 5%, or $71 million, in 2016 primarily due to a $117 million increase in net political advertising revenues and a $7 million increase in digital advertising revenue. The increase was partially offset by lower net core advertising revenues (comprised of local and national advertising, excluding political and digital) of $53 million primarily due to a decline in the core advertising market spend, partially the result of displacement from significant political advertising during 2016 and the 2016 Summer Olympics, which negatively impacted advertising revenues for stations other than NBC affiliates. Net political advertising revenues, which are a component of total advertising revenues, were $137 million for the fiscal year ended December 31, 2016 compared to $20 million for the fiscal year ended December 31, 2015 due to 2016 being a presidential election year.

Retransmission Revenues—Retransmission revenues increased 18%, or $52 million, in 2016 primarily due to a $73 million increase from higher rates included in retransmission consent renewals of our MVPD agreements, partially offset by a decrease in the number of subscribers. Additionally, there was a decline in revenue due to the blackout of our stations by DISH network during a portion of 2016, as noted above.
Carriage Fees—Carriage fees increased 42%, or $36 million, in 2016 due mainly to a $23 million increase from higher rates for the distribution of WGN America and additional revenue of $13 million resulting from an increase in the number of subscribers due to expanded distribution.
Barter/Trade Revenues—Barter/trade revenues increased 2%, or $1 million, in 2016.
Other Revenues—Otherrevenues are primarily derived from profit sharing, revenue on syndicated content and copyright royalties. Other revenues decreased 5%, or $2 million, in 2016 due primarily to a $7 million decline in copyright royalties attributed to the full conversion in 2015 of the subscribers of WGN America from a superstation to a cable network. As a cable network, WGN America no longer generates copyright royalties revenue. The decrease was partially offset by additional profit sharing from Outsiders and Manhattan.
Operating Expenses—Television and Entertainment operating expenses for 2018, 2017 2016 and 20152016 were as follows:follows (in thousands):
      Change      Change
(in thousands)2017 2016 2015 17-16 16-15
2018 2017 2016 18-17 17-16
Compensation$544,494
 $550,256
 $528,758
 -1 % +4 %$558,733
 $544,494
 $550,256
 +3 % -1 %
Programming604,068
 515,738
 535,799
 +17 % -4 %489,063
 604,068
 515,738
 -19 % +17 %
Depreciation42,713
 45,083
 48,437
 -5 % -7 %44,766
 42,713
 45,083
 +5 % -5 %
Amortization166,679
 166,664
 166,404
 — % — %166,715
 166,679
 166,664
 — % — %
Other281,369
 303,918
 263,284
 -7 % +15 %289,327
 281,369
 307,318
 +3 % -8 %
Total operating expenses before impairments of goodwill and other intangible assets1,639,323
 1,581,659
 1,542,682
 +4 % +3 %
Impairments of goodwill and other intangible assets—
 3,400
 385,000
 -100 % -99 %
Gain on sales of spectrum(133,197) —
 —
 *
 — %
Total operating expenses$1,639,323
 $1,585,059
 $1,927,682
 +3 % -18 %$1,415,407
 $1,639,323
 $1,585,059
 -14 % +3 %
*Represents positive or negative change in excess of 100%
2018 compared to 2017
Television and Entertainment operating expenses decreased 14%, or $224 million, in 2018 largely due to a net pretax gain of $133 million in 2018 related to licenses sold in the FCC spectrum auction and a $115 million decline in programming expense, partially offset by increases in compensation expense and other expense, as further described below.
Compensation Expense—Compensation expense, which is included in both direct operating expenses and SG&A expense, increased 3%, or $14 million, in 2018 due to a $4 million increase in retention bonuses ($5 million in 2018 compared to $1 million in 2017), a $9 million increase in incentive compensation and a $3 million increase in severance expense, partially offset by decreases in direct pay and benefits and stock-based compensation.
Programming Expense—Programming expense decreased 19%, or $115 million, in 2018 due primarily to the decrease of $51 million in program impairment charges described above as well as lower amortization of license fees, the absence of barter expense in 2018 and the $19 million of additional expense in 2017 related to the shift in programming strategy at WGN America, partially offset by higher network affiliate fees. The decrease in amortization of license fees of $73 million was primarily attributable to three originals airing in the first half of 2017 (Outsiders, Underground and Salem) versus airing lower cost programming in 2018. Barter expense decreased $28 million as we no longer recognize barter revenue and expense as a result of adopting new revenue guidance in 2018. Network affiliate fees increased by $59 million mainly due to the renewal of network affiliation agreements in eight markets with FOX during the third quarter of 2018, along with other contractual increases.

Depreciation and Amortization Expense—Depreciation expense increased 5%, or $2 million, in 2018. Amortization expense remained flat in 2018.
Other Expenses—Other expenses include sales and marketing, occupancy, outside services and other miscellaneous expenses, which are included in direct operating expenses or SG&A expense, as applicable. Other expenses increased 3%, or $8 million, in 2018. The increase was due primarily to a $5 million increase in outside national sales representative commissions, a $6 million increase in outside services expense driven by increases in costs associated with spectrum sharing arrangements and costs for operating websites, $4 million of costs related to a litigation reserve and a non-cash impairment charge of $3 million related to the impairment of an FCC license at one of our television stations in 2018. The increase was partially offset by $11 million of spectrum repack reimbursements.
Gain on Sales of Spectrum—In 2018, we recorded a net pretax gain of $133 million related to the licenses sold in the FCC spectrum auction for which the spectrum of these television stations was surrendered in January 2018, as further described in Note 10 to our audited consolidated financial statements.
2017 compared to 2016
Television and Entertainment operating expenses increased 3%, or $54 million, in 2017 largely due to higher programming expense, partially offset by lower other expenses and a decline in compensation expense, as further described below.
Compensation Expense—Compensation expense, which is included in both direct operating expenses and SG&A expense, decreased 1%, or $6 million, in 2017 primarily due to a $5 million decrease in severance expense and a $3 million decrease in incentive compensation, partially offset by a $2 million increase in stock-based compensation. Severance expense was $4 million in 2017 compared to $9 million in 2016.
Programming Expense—Programming expense increased 17%, or $88 million, in 2017 due primarily to the increase of $43 million in program impairment charges and $19 million of additional expenses related to the shift in programming strategy at WGN America, higher network affiliate fees and higher amortization of license fees. Network affiliate fees increased by $27 million mainly due to renewals of certain network affiliate agreements in the third quarter of 2016 as well as other contractual increases. The increase in amortization of license fees of $7 million was primarily attributable to airing higher cost feature presentations on WGN America.

Depreciation and Amortization Expense—Depreciation expense decreased 5%, or $2 million, in 2017 due to lower levels of depreciable property. Amortization expense remained flat in 2017.
Other Expenses—Other expenses include sales and marketing, occupancy, outside services and other miscellaneous expenses, which are included in direct operating expenses or SG&A expense, as applicable. Other expenses decreased 7%8%, or $23$26 million, in 2017. The decrease was due primarily to a $13$9 million decline in promotion expense, a $5 million decline in outside national sales commissions, a $3 million decrease due to impairment charges recorded in 2016 associated with one real estate property, a $3 million decrease in outside services primarily related to professional fees and costs for operating websites, of our television stations and a $2 million decrease in bad debt write-offs.
write-offs and 2016 compared to 2015
Television and Entertainment operating expenses decreased 18%, or $343 million, in 2016 largely due to lower impairments of goodwill and other intangible assets compared to 2015. Television and Entertainment operating expenses before impairment of goodwill and other intangible assets increased 3%, or $39 million, primarily due to higher compensation, other programming expenses and other expenses, partially offset by a $37 million decline in program impairment charges, as further described below.
Compensation Expense—Compensation expense, which is included in both direct operating expenses and SG&A expense, increased 4%, or $21 million, in 2016 primarily due to higher direct pay and benefits of $14 million and a $7 million increase in severance expense. Severance expense was $9 million in 2016 compared to $2 million in 2015.
Programming Expense—Programming expense decreased 4%, or $20 million, in 2016 due primarily to a $37 million decline in program impairment charges and a $20 million reduction in outside production costs, partially offset by higher network affiliate fees of $29 million and higher amortization of license fees of $6 million. In 2016, we recorded a $37 million impairment charge for the syndicated program Elementary at WGN America compared to a $74 million impairment charge for the syndicated programs Person of Interest and Elementary at WGN America in 2015. The reduction in outside production expenses was related to the first seasons of the original programs Underground and Outsiders, which premiered in 2016 but were produced in 2015 with no comparable production costs in 2016. The increase in network affiliate fees was mainly related to renewals of certain network affiliation agreements in the second quarter of 2015 and the third quarter of 2016, as well as other contractual increases. The increase in amortization of license fees was primarily due to first-run original programs Outsiders and Underground and syndicated programs Person of Interest and Elementary, partially offset by the cancellation of Manhattan and the delay in airing Salem season 3 to the fall of 2016.
Depreciation and Amortization Expense—Depreciation expense decreased 7%, or $3 million, in 2016 due to lower levels of depreciable property. Amortization expense remained flat in 2016.
Other Expenses—Other expenses include sales and marketing, occupancy, outside services and other miscellaneous expenses, which are included in direct operating expenses or SG&A expense, as applicable. Other expenses increased 15%, or $41 million, in 2016. The increase was due primarily to a $12 million increase in promotion costs primarily due to first-run original programs and syndicated programs airing on WGN America, advertising related to the DISH Network blackout and sales research services, a $9 million increase in costs of operating the websites and mobile applications of our television stations which helped generate higher digital revenues, $3 million of impairment charges associated with one real estate property, and bad debt write-offs of $3 million. In 2015, we benefited from a $6 million payment received in the first quarter of 2015 related to the settlement of a music license fee class action lawsuit, a $2 million gain resulting from the relinquishment for compensation of our CW network affiliation in Indianapolis and a $2 million gain resulting from a legal settlement.

Impairment of Goodwill and Other Intangible Assets—During 2016, we recorded non-cash impairment charges of $3 million related to the impairment of FCC licenses at two of our television stations compared to a charge of $4 million in 2015 related to the impairment of an FCC license at one of our television stations. In 2015, we also recorded a non-cash impairment charge of $381 million related to the impairment of goodwill at our cable reporting unit.

CORPORATE AND OTHER
Operating Revenues and Expenses—Corporate and Other operating revenues and expenses for 2018, 2017 2016 and 20152016 were as follows:follows (in thousands):
      Change      Change
(in thousands)2017 2016 2015 17-16 16-15
2018 2017 2016 18-17 17-16
Real estate revenues$13,536
 $38,034
 $49,425
 -64 %
-23 %$11,056
 $13,536
 $38,034
 -18 %
-64 %
                  
Operating Expenses:                  
Real estate (1)$11,564
 $34,111
 $41,736
 -66 % -18 %$10,335
 $11,564
 $34,111
 -11 % -66 %
Corporate (2)139,867
 132,379
 130,953
 +6 % +1 %120,209
 140,635
 133,071
 -15 % +6 %
Pension credit(22,047) (24,110) (29,166) -9 % -17 %
(Gain) loss on sales of real estate(28,216) (213,083) 97
 -87 % *
Gain on sales of real estate(24,657) (28,216) (213,083) -13 % -87 %
Total operating expenses$101,168
 $(70,703) $143,620
 *
 *
$105,887
 $123,983
 $(45,901) -15 % *
 
*Represents positive or negative change in excess of 100%
(1)Real estate operating expenses included $2$1 million, $2 million and $8$2 million of depreciation expense in 2018, 2017 2016 and 2015,2016, respectively.
(2)Corporate operating expenses included $8 million, $12 million $11 million and $8$11 million of depreciation expense in 2018, 2017 2016 and 2015,2016, respectively.
2018 compared to 2017
Real Estate Revenues—Real estate revenues decreased 18%, or $2 million, in 2018 primarily due to the loss of revenue from real estate properties sold during 2017 and 2018.
Real Estate Expenses—Real estate operating expenses decreased 11%, or $1 million, in 2018 primarily resulting from the absence of impairment charges in 2018 compared to $2 million of impairment charges recorded in 2017 associated with certain real estate properties.
Corporate Expenses—Corporate expenses decreased 15%, or $20 million, in 2018 primarily due to lower compensation expense, other expenses and depreciation. Compensation expense decreased $13 million as the prior year included $13 million of expense ($6 million of severance and $7 million of stock-based compensation expense) related to the resignation of the CEO in the first quarter of 2017. In addition, direct pay and benefits decreased by $1 million and severance decreased by $1 million, offset by a $2 million increase in retention bonuses ($9 million in 2018 compared to $6 million in 2017). Additionally, depreciation expense decreased by $3 million and other expense decreased by $4 million largely due to a decline in rent expense.
Gain on Sales of Real Estate—In 2018, we recorded net pretax gains of $25 million related to the sales of our real estate properties in Melville, NY and Hartford, CT, as further described in Note 4 to our audited consolidated financial statements.
2017 compared to 2016
Real Estate Revenues—Real estate revenues decreased 64%, or $24 million, in 2017 primarily due to the loss of revenue from real estate properties sold during 2016 and 2017.
Real Estate Expenses—Real estate operating expenses decreased 66%, or $23 million, in 2017 primarily resulting from a $12 million decrease in real estate taxes and other costs associated with real estate sold in 2016 as well as a $9 million reduction of impairment charges associated with certain real estate properties from $12 million in 2016 to $2 million in 2017.

Corporate Expenses—Corporate expenses increased 6%, or $7$8 million, in 2017 primarily due to a $5 million increase in compensation expense as a result of $6 million of severance expense related to the resignation of the CEO in the first quarter of 2017, a $5 million increase in transaction related bonuses, and a $2 million increase in outside services, partially offset by a $4 million decrease in equity compensation and a $2 million decrease in other compensation. The $2 million increase in outside services was driven by a $14 million increase in professional and legal fees primarily associated with the Sinclair Merger Agreement that was terminated on August 9, 2018, partially offset by a $12 million decrease in professional fees primarily related to technology.
Pension Credit—The pension credit decreased 9%, or $2 million, in 2017.
(Gain) LossGain on Sales of Real Estate—In 2017, we recorded net pretax gains on real estate of $28 million primarily related to the sales of our real estate properties in Costa Mesa, CA and Ft. Lauderdale, FL, as further described in Note 6 to our audited consolidated financial statements.

2016 compared to 2015
Real Estate Revenues—Real estate revenues decreased 23%, or $11 million, in 2016 primarily due to the loss of revenue from real estate properties sold during 2016.
Real Estate Expenses—Real estate operating expenses decreased $8 million in 2016 primarily resulting from a $6 million decrease in depreciation primarily due to property sales and the real estate properties held for sale which are no longer depreciable. The sales of properties in 2016 also resulted in a $4 million decrease in real estate taxes and other costs associated with owning real estate. These reductions were partially offset by a $4 million increase in impairment charges related to certain real estate properties from $8 million in 2015 to $12 million in 2016.
Corporate Expenses—Corporate expenses increased 1%, or $1 million, in 2016 primarily due to a $3 million increase in professional fees and a $4 million increase in depreciation expense primarily due to our investments in computer hardware and software, partially offset by a $5 million decrease in compensation expense.
Pension Credit—The pension credit decreased 17%, or $5 million, in 2016.
(Gain) Loss on Sales of Real Estate—In 2016, we recorded net pretax gains on real estate of $213 million primarily related to the sales of Tribune Tower, the LA Times Property and the Olympic Printing Plan facility as further described in Note 64 to our audited consolidated financial statements.
INCOME ON EQUITY INVESTMENTS, NET
Our incomeIncome on equity investments, net from continuing operations for 2017, 2016 and 2015 was as follows:follows (in thousands):
      Change      Change
(in thousands)2017 2016 2015 17-16 16-15
2018 2017 2016 18-17 17-16
Income from equity investments, net, before amortization of basis difference$190,864
 $202,758
 $201,207
 -6 % +1%$219,210
 $190,864
 $202,758
 +15 % -6 %
Amortization of basis difference(1)(53,502) (54,602) (54,248) -2 % +1%(49,875) (53,502) (54,602) -7 % -2 %
Income from equity investments, net$137,362
 $148,156
 $146,959
 -7 % +1%$169,335
 $137,362
 $148,156
 +23 % -7 %
(1)See Note 6 to our audited consolidated financial statements for the discussion of the amortization of basis difference.

Income on equity investments, net increased 23%, or $32 million, in 2018 due to higher equity income from TV Food Network and CareerBuilder. The increase in the equity income of TV Food Network was due to higher reported net income. The increase in the equity income of CareerBuilder was largely due to the absence of non-recurring transaction expenses incurred by CareerBuilder in 2017 related to the CareerBuilder sale on July 31, 2017, as further described in Note 6 to our audited consolidated financial statements, along with recognizing our share of the gain on the sale of one of CareerBuilder’s business operations on May 14, 2018, and a $3 million decline in amortization of basis difference as a result of the write-down of our investment in CareerBuilder in 2017, which eliminated the remaining basis difference for that investment. We sold our remaining ownership interest in CareerBuilder on September 13, 2018 and received pretax proceeds of $11 million, as further described in Note 6 to our audited consolidated financial statements. We recognized a pretax loss of $5 million on the sale of our ownership interest in CareerBuilder, which is included in the (loss) gain on investment transactions, net in our Consolidated Statements of Operations.
Income on equity investments, net decreased 7%, or $11 million, in 2017 primarily due to lower equity income from CareerBuilder of $29 million as a result of a decline in operating performance, a decline in our ownership due to the sale of a majority of our interest in CareerBuilder on July 31, 2017, and non-recurring transaction expenses incurred by CareerBuilder in connection with the transaction. This decline was partially offset by an increase in equity income from TV Food Network of $18 million.
As described under “—Significant Events—CareerBuilder” inIn 2017, we recorded non-cash pretax impairment charges of $181 million to write down our investment in CareerBuilder. Additionally, we recorded a non-cash pretax impairment charge of $10 million to write down our investment in Dose Media. These impairment charges are included in write-downs of investments in our Consolidated Statements of Operations.
Income on equity investments, net increased 1%, or $1 million, in 2016. This increase is primarily due to higher equity income from CareerBuilder of $6 million as the prior year results included a one-time non-cash goodwill impairment charge related to their international reporting unit in the fourth quarter of 2015, of which our share was $16 million. This increase was offset by lower equity income from TV Food Network and Dose Media of $3 million and $2 million, respectively.
As of the Effective Date, fresh-start reporting adjustments increased the total carrying value of equity method investments by $1.615 billion of which $1.108 billion was attributable to our share of theoretical increases in the carrying values of the investees’ amortizable intangible assets had the fair value of the investments been allocated to the identifiable intangible assets of the investees’ in accordance with ASC Topic 805. The remaining $507 million of

the increase was attributable to goodwill and other identifiable intangibles not subject to amortization, including trade names. We amortize the differences between the fair values and the investees’ carrying values of the identifiable intangible assets subject to amortization and record the amortization (the “amortization of basis difference”) as a reduction of income on equity investments, net in our Consolidated Statements of Operations. In 2017, 2016 and 2015 income on equity investments, net was reduced by such amortization of $54 million, $55 million and $54 million, respectively.
Cash distributions from our equity method investments were as follows:follows (in thousands):
       Change
(in thousands)2017 2016 2015 17-16 16-15
Cash distributions from equity investments (1)$201,892
 $170,527
 $180,207
 +18% -5 %
       Change
 2018 2017 2016 18-17 17-16
Cash distributions from equity investments (1)$171,591
 $201,892
 $170,527
 -15 % +18%
 
(1)Certain distributions received from CareerBuilder in 2017 and 2015 exceeded ourthe Company’s share of CareerBuilder’s cumulative earnings. As a result, wethe Company determined that these distributions were a return of investment and, therefore, presented such distributions totaling $4 million in 2017 and $10 million in 2015 as an investing activity in ourthe Company’s Consolidated Statements of Cash Flows for 2017 and 2015.2017.
Cash distributions from our equity method investments totaled $172 million, $202 million and $171 million in 2018, 2017 and $1802016, respectively. Cash distributions in the year ended December 31, 2018 included $6 million of distributions from CareerBuilder, of which $5 million related to a distribution of proceeds from the sale of one of its business operations in 2017, 2016 and 2015, respectively.2018. Cash distributions in the year ended December 31, 2017 included a $16 million distribution of excess cash from CareerBuilder prior to the closing of the CareerBuilder Sale.sale.
TV Food Network cash distributions declined in 2018 due to lower required distributions to cover our taxes on our share of partnership income based on the reduction in tax rates from Tax Reform. This only impacts the timing of distributions and does not impact total expected excess cash distributions from TV Food Network related to 2018 operations.
INTEREST AND DIVIDEND INCOME, INTEREST EXPENSE AND INCOME TAX EXPENSE (BENEFIT)
Interest and dividend income, interest expense and income tax expense (benefit) from continuing operations for 2017, 2016 and 2015 were as follows:follows (in thousands):
      Change      Change
(in thousands)2017 2016 2015 17-16 16-15
2018 2017 2016 18-17 17-16
Interest and dividend income$3,149
 $1,226
 $720
 *
 +70%$12,224
 $3,149
 $1,226
 *
 *
                  
Interest expense (1)$159,387
 $152,719
 $148,587
 +4% +3%$169,033
 $159,387
 $152,719
 +6% +4%
                  
Income tax (benefit) expense (2)$(301,373) $347,202
 $25,918
 *
 *
Income tax expense (benefit) (2)$113,130
 $(301,373) $347,202
 *
 *
 
*Represents positive or negative change in excess of 100%
(1)Interest expense excludes $1 million $15 million and $16$15 million in 2017 2016 and 2015,2016, respectively, related to discontinued operations. On February 1, 2017, we used $400 million of the proceeds from the Gracenote Sale to prepay a portion of our Term Loan Facility and the interest expense associated with our outstanding debt was allocated to discontinued operations based on the ratio of the $400 million prepayment to the total outstanding borrowings under the Term Loan Facility.
(2)Income tax expense (benefit) expense excludes $13 million and $54 million of expense in 2017 and 2016, respectively, and benefit of $4 million in 2015, related to discontinued operations.
Interest and Dividend Income—Interest and dividend income from continuing operations was $12 million in 2018, $3 million in 2017 and $1 million in each2016. The increase of 2016$9 million in 2018 was primarily due to higher interest income earned on our average outstanding balance of cash and 2015.cash equivalents during 2018.
Interest Expense—Interest expense from continuing operations was $169 million in 2018, $159 million in 2017 and $153 million in 2016 and $149 million in 2015 from our borrowing under the Secured Credit Facility as discussed under “—Significant Events—Secured Credit Facility,” and our borrowing under the Notes, as discussed under “—Significant Events—5.875% Senior Notes due 2022.”Notes. Interest expense in 2018, 2017 2016 and 20152016 includes amortized debt issue costs of $6 million, $7 million $10 million and $11$10 million, respectively, and amortization of original issue discounts of $1 million in each year.

Income Tax Expense (Benefit)—In 2018, we recorded income tax expense related to continuing operations of $113 million. The effective tax rate on pretax income from continuing operations was 21.5% in 2018. This rate differs from the U.S. federal statutory rate of 21% primarily due to state income taxes (net of federal benefit), other non-deductible expenses, a $24 million discrete income tax benefit primarily resulting from return to provision adjustments which have the effect of adjusting the provisional discrete net tax benefit recorded due to Tax Reform, as defined and described in Note 11 to our audited consolidated financial statements, partially offset by a $1 million charge primarily due to a decrease in our net state deferred tax assets as a result of a change in our state effective income tax rate. Excluding the impact of Tax Reform and net favorable adjustments, the effective tax rate on pretax income was 26.1%.
In 2017, we recorded an income tax benefit related to continuing operations of $301 million. The effective tax rate on pretax loss from continuing operations was 254.8% in 2017. This rate differs from the U.S. federal statutory rate of 35% at the time primarily due to a $256 million provisional discrete net tax benefit due to Tax Reform as further described in “—Significant Events—Tax Reform,”Note 11 to our audited consolidated financial statements, state income taxes (net of federal benefit), a one-time benefit of $7 million due to a decrease to our net state deferred tax liabilities as a result of a change in our state effective income tax rate, the domestic production activities deduction, and other non-deductible expenses. Excluding the tax reformimpact of Tax Reform and net favorable adjustments, the effective tax rate on pretax income was 33.1%.
In 2016, we recorded income tax expense related to continuing operations of $347 million. The effective tax rate on pretax income from continuing operations was 80.0% in 2016. This rate differs from the U.S. federal statutory rate of 35% at the time primarily due to state income taxes (net of federal benefit), a $103 million charge related to the settlement of the Newsday dispute, a related $88 million charge to adjust our deferred taxes (as further described in Note 1311 to our audited consolidated financial statements), the domestic production activities deduction, other non-deductible expenses, a $12 million benefit related to the resolution of certain federal and state income tax matters and other adjustments, a $4 million charge related to the write-off of unrealized deferred tax assets related to stock-based compensation and a $3 million benefit resulting from a change in the Company’s state tax rates. Excluding the Newsday settlement impact and net favorable adjustments, the effective tax rate on pretax income was 38.5%.
In 2015, we recorded income tax expense related to continuing operations of $26 million. The effective tax rate on pretax loss from continuing operations was 9.0% in 2015. This rate differs from the U.S. federal statutory rate of 35% primarily due to state income taxes (net of federal benefit), the reversal of $381 million of book loss related to an impairment of non-deductible goodwill and favorable adjustments of $8 million related to the resolution of certain federal and state income tax matters and other adjustments. Excluding the goodwill impairment impact and net favorable adjustments, the effective tax rate on pretax income was 37.4%.
Although we believe our estimates and judgments are reasonable, the resolutions of our income tax issues are unpredictable and could result in income tax liabilities that are significantly higher or lower than that which has been provided by us.
Liquidity and Capital Resources
Cash flows generated from operating activities is our primary source of liquidity. We expect to fund capital expenditures, acquisitions, interest and principal payments on our indebtedness, income tax payments, potential payments related to our uncertain tax positions, dividend payments on our Common Stock (see “—Cash Dividends” below) and related distributions to holders of Warrants and other operating requirements in the next twelve months through a combination of cash flows from operations, cash on our balance sheet, distributions from or sales of our investments, sales of real estate assets, available borrowings under our Revolving Credit Facility, and any refinancings thereof, additional debt financing, if any, and disposals of assets or operations, if any. We intend to continue to maximize the monetization of our real estate portfolio to take advantage of robust market conditions although there can be no assurance that any such divestitures can be completed in a timely manner, on favorable terms or at all. The Nexstar Merger Agreement for the proposed Nexstar Merger with Sinclair places certain limitations on our use of cash, including our application of cash to repurchase shares of our Common Stock, our ability to declare any dividends other than quarterly cash dividends of $0.25 or less per share, our ability to make certain capital expenditures (except pursuant to our capital expenditures budget), and our ability to pursue significant business acquisitions.
For our long-term liquidity needs, in addition to these sources, we may rely upon the issuance of long-term debt, the issuance of equity or other instruments convertible into or exchangeable for equity, or the sale of non-core

assets. The Nexstar Merger Agreement for the proposed Nexstar Merger places certain limitations on the amount of debt we can incur.
Our financial and operating performance remains subject to prevailing economic and industry conditions and to financial, business and other factors, some of which are beyond our control and, despite our current liquidity position, no assurances can be made that cash flows from operations and investments, future borrowings under the Revolving Credit Facility, and any refinancings thereof, or dispositions of assets or operations will be sufficient to satisfy our future liquidity needs.

Sources and Uses
For the Three Years in the Period Ended December 31, 20172018
The table below details the total operating, investing and financing activity cash flows for each of the three years in the period ended December 31, 20172018 (in thousands):
 Year Ended
December 31, 2017 December 31, 2016 December 31, 2015
Net cash provided by operating activities$222,502
 $284,163
 $25,944
Net cash provided by (used in) investing activities956,340
 402,337
 (125,733)
Net cash used in financing activities(1,095,566) (358,735) (1,092,750)
Net Increase (Decrease) in Cash and Cash Equivalents$83,276
 $327,765
 $(1,192,539)
 Year Ended
December 31, 2018 December 31, 2017 December 31, 2016
Net cash provided by operating activities$469,205
 $222,585
 $284,165
Net cash provided by investing activities10,974
 953,034
 402,040
Net cash used in financing activities(91,782) (1,095,566) (358,735)
Net Increase in Cash, Cash Equivalents and Restricted Cash$388,397
 $80,053
 $327,470
Operating activities
Net cash provided by operating activities was $469 million in 2018, up $247 million from $223 million in 2017. The increase was primarily due to higher cash flows from operating results and lower cash paid for income taxes, partially offset by 2018 pension contributions and lower distributions from our equity investments. Cash paid for income taxes, net of income tax refunds, decreased by $116 million to $66 million in 2018, from $183 million in 2017. Distributions from equity investments decreased by $27 million to $172 million in 2018 from $198 million in 2017 primarily due to timing of TV Food Network distributions related to Tax Reform, as further described above.
Net cash provided by operating activities was $223 million in 2017, down $62 million from $284 million in 2016. The decrease was primarily due to lower cash flows from operating results and unfavorable working capital changes, partially offset by lower cash paid for income taxes and higher distributions from equity investments. Cash paid for income taxes, net of income tax refunds, decreased by $83 million to $183 million in 2017, from $266 million in 2016. The decrease was primarily due to the payment of taxes in the third quarter of 2016 related to the Newsday settlement. Distributions from equity investments increased by $28 million to $198 million in 2017 from $171 million in 2016.
Net cash provided by operating activities was $284 million in 2016, up $258 million from $26 million in 2015. The increase was primarily due to lower cash paid for income taxes, higher operating cash flows from operating results and favorable working capital changes. Cash paid for income taxes, net of income tax refunds, decreased by $169 million to $266 million in 2016, from $435 million in 2015. The decrease was primarily due to the payment of taxes in 2015 on the gain from the sale of our equity interest in CV in the fourth quarter of 2014, partially offset by payment of taxes in the third quarter of 2016 related to the Newsday settlement. Distributions from equity investments increased by $1 million to $171 million in 2016 from $170 million in 2015.
Investing activities
Net cash provided by investing activities totaled $956$11 million in 2018. Our capital expenditures totaled $76 million in 2018 and included $24 million related to the FCC spectrum repacking project. In 2018, we received net proceeds of $59 million primarily related to the sales of real estate, $15 million from the sales of investments and $11 million of repack reimbursements from the FCC.
Net cash provided by investing activities totaled $953 million in 2017. Our capital expenditures totaled $67 million in 2017. In 2017, we received $558$554 million from the Gracenote Sale, $172 million related to gross proceeds from the sale of certain FCC licenses in the FCC spectrum auction, $143$148 million related to the salesales of a majority of our interest in CareerBuilder,investments and $144 million primarily related to the sales of real estate (as further described in “—Significant Events—Monetization of Real Estate Assets” above) and $6 million related to the sale of marketable securities.estate. We made investments of $5 million in 2017, primarily consisting of a capital contribution to New Cubs LLC.

Net cash provided byused in investing activities totaled $402 million in 2016. Our capital expenditures totaled $100 million in 2016. We had investments of $6 million primarily consisting of our investment in Share Rocket, Inc. for $3 million and a capital contribution to New Cubs LLC totaling $3 million. Wewe received net proceeds of approximately $508 million from the sales of our real estate and other assets (see Note 64 to our audited consolidated financial statements for further information).
Financing activities
Net cash used in investingfinancing activities totaled $126was $92 million in 2015. Our acquisitions totaled $752018. During 2018, we paid quarterly cash dividends of $88 million and included acquisitions, netpaid $6 million of cash acquired, for Infostrada Sports, SportsDirect, Covers and Enswers (see Note 4 to our audited consolidated financial statements for further information on these acquisitions) and certain intellectual

property. Our capital expenditures totaled $89 million in 2015. We had investments of $23 million, primarily consisting of our investment in Dose Media, LLC for $15 million and capital contributions to New Cubs LLC totaling $8 million. We received net proceeds of approximately $50 million from the sales of our investments and real estate of which $28 milliontax withholdings related to the salenet share settlements of our equity interest in CV in October 2014 that was held in escrow and paid in the fourth quarter of 2015, $8 million related to a cash distribution pursuant to CV’s collection of a contingent receivable, $8 million related to the sale of our investment in Newsday Holdings, LLC and $5 million related to the sale of two real estate properties which were held for sale as of December 28, 2014.
Financing activitiesshare-based awards.
Net cash used in financing activities was $1.096 billion in 2017. During 2017, we repaid $704 million of borrowings under our Term Loan Facility and the Dreamcatcher Credit Facility, which included using $400 million of proceeds from the Gracenote Sale to prepay a portion of our Term B Loans in the first quarter of 2017 and using $102 million of after-tax proceeds received from our participation in the FCC spectrum auction to prepay $10 million of the Term B Loans and $91 million of the Term C Loans in the third quarter of 2017. Additionally, we used $203 million of long-term borrowings of Term C Loans to repay $184 million of Term B Loans, with the remainder used to pay fees associated with the 2017 Amendment.amendment to the Secured Credit Facility (the “2017 Amendment”). We paid dividends of $586 million consisting of quarterly cash dividends of $87 million and the special cash dividend of $499 million.
Net cash used in financing activities was $359 million in 2016. During 2016, we paid regular quarterly cash dividends of $90 million. In 2016, cash paid for the Class A Common Stock repurchases pursuant to our $400 million stock repurchase program totaled $232 million (see Note 15 to our audited consolidated financial statements for further information).
Net cash used in financing activities was $1.093 billion in 2015. In connection with the Amendment of our Secured Credit Facility on June 24, 2015, we issued $1.100 billion aggregate principal amount of the Notes and used the net proceeds from the sale of the Notes, together with cash on hand, to prepay $1.100 billion of Term B Loans under the Secured Credit Facility, as further described below. During 2015, we paid dividends of $720 million, including regular quarterly cash dividends of $71 million and a special cash dividend paid in the second quarter of 2015 of $649 million. In 2015, cash paid for the Class A Common Stock repurchases pursuant to our previous stock repurchase program totaled $340 million (see Note 1513 to our audited consolidated financial statements for further information).
Debt and Capital Structure
Our debt consisted of the following (in thousands):
 December 31, 2017 December 31, 2016
Term Loan Facility   
Term B Loans due 2020, effective interest rate of 3.84% and 3.82%, net of unamortized discount and debt issuance costs of $1,900 and $31,230$187,725
 $2,312,218
Term C Loans due 2024, effective interest rate of 3.85%, net of unamortized discount and debt issuance cost of $21,7831,644,109
 —
5.875% Senior Notes due 2022, net of debt issuance costs of $12,649 and $15,4371,087,351
 1,084,563
Dreamcatcher Credit Facility due 2018, effective interest rate of 4.08%, net of unamortized discount and debt issuance costs of $80—
 14,770
Total debt (1)$2,919,185
 $3,411,551
(1)Under the terms of the Merger Agreement, Sinclair will assume, repay or refinance all of our outstanding debt on the date the Merger is closed.

 December 31, 2018 December 31, 2017
Term Loan Facility   
Term B Loans due 2020, effective interest rate of 3.84%, net of unamortized discount and debt issuance costs of $1,268 and $1,900$188,357
 $187,725
Term C Loans due 2024, effective interest rate of 3.85%, net of unamortized discount and debt issuance cost of $18,305 and $21,7831,647,587
 1,644,109
5.875% Senior Notes due 2022, net of debt issuance costs of $9,861 and $12,6491,090,139
 1,087,351
Total debt$2,926,083
 $2,919,185
Secured Credit Facility—On December 27, 2013, in connection with our acquisition of Local TV, we, as borrower, along with certain of our operating subsidiaries as guarantors, entered into a $4.073 billion Secured Credit Facility. The Secured Credit Facility consisted of the $3.773 billion Term Loan Facility and a $300 million Revolving Credit Facility. On June 24, 2015, we, the Guarantorsall our domestic subsidiaries, other than certain excluded subsidiaries (the “Guarantors”) and JPMorgan, as administrative agent, entered into the Amendmentan amendment (the “2015 Amendment”) to the Secured Credit Facility. Prior to the 2015 Amendment and the Prepayment (as defined below), $3.479 billion of Formerterm loans (the “Former Term LoansLoans”) were outstanding under the Secured Credit Facility. Pursuant to the 2015 Amendment, certain lenders under the Secured Credit Facility converted their Former Term Loans into the Convertednew tranche of term loans (the “Converted Term B LoansLoans”) in an aggregate amount, along with term loans advanced by certain new lenders, of $1.802 billion.billion (the “New Term B Loans” and, together with the Converted Term B Loans, the “Term B Loans”). The proceeds of Term B Loans advanced by the new lenders were used to prepay in full all of the Former Term Loans that were not converted into Term B Loans. In addition, we used the net

proceeds from the sale of the Notes (as defined below), together with cash on hand, to make the Prepayment ofprepay (the “Prepayment”) $1.100 billion of Term B Loans. After giving effect to the 2015 Amendment and all prepayments contemplated thereby (including the Prepayment), there were $2.379 billion of Term B Loans outstanding under the Secured Credit Facility. We recorded a loss of $37 million on the extinguishment of the Former Term Loan in our Consolidated Statement of Operations for the fiscal year ended December 31, 2015 as a portion of the facility was considered extinguished for accounting purposes. See Note 97 to our audited consolidated financial statements for further information and significant terms and conditions associated with the Secured Credit Facility, including, but not limited to, interest rates, repayment terms, fees, restrictions, and affirmative and negative covenants. The proceeds of the Revolving Credit Facility are available for working capital and other purposes not prohibited under the Secured Credit Facility. At December 31, 2017,2018, there were no borrowings outstanding under the Revolving Credit Facility; however, there were $21$20 million of standby letters of credit outstanding primarily in support of our workers’ compensation insurance programs.
As described under “—Significant Events—Financing Activities,” onOn January 27, 2017, we, the Subsidiary Guarantors,certain of our subsidiaries, as guarantors (the “Subsidiary Guarantors”), JPMorgan, as administrative agent and certain extending lenders, entered into the 2017 Amendment pursuant to which we converted term loans outstanding immediately prior to the closing of the 2017 Amendment (the “Existing Term Loans”) into a new tranche of term loans in an aggregate amount of approximately $1.761 billion of the Existing Term Loans into the Term(the “Term C LoansLoans”) and extended the maturity date of the Term C Loans. Under the Secured Credit Facility, the Term C Loans bear interest, at our election, at a rate per annum equal to either (i) the sum of LIBOR, adjusted for statutory reserve requirements on Euro currency liabilities (“Adjusted LIBOR”), subject to a minimum rate of 0.75%, plus an applicable margin of 3.0% or (ii) the sum of a base rate determined as the highest of (a) the federal funds effective rate from time to time plus 0.5%, (b) the prime rate of interest announced by the administrative agent as its prime rate, and (c) Adjusted LIBOR plus 1.0%, plus an applicable margin of 2.0%. Under the Revolving Credit Facility, the loans made pursuant to a Newnew tranche of revolving commitments (the “New Initial Revolving Credit CommitmentCommitment”) bear interest initially, at the Company’s election, at a rate per annum equal to either (i) the sum of Adjusted LIBOR, subject to a minimum rate of zero, plus an applicable margin of 3.0% or (ii) the sum of a base rate determined as the highest of (a) the federal funds effective rate from time to time plus 0.5%, (b) the prime rate of interest announced by the administrative agent as its prime rate, and (c) Adjusted LIBOR plus 1.0%, plus an applicable margin of 2.0%.
The Term C Loans and the New Initial Revolving Credit Loans are secured by the same collateral and guaranteed by the same guarantors as the Existing Term Loans. Voluntary prepayments of the Term C Loans are permitted at any time, in minimum principal amounts, without premium or penalty, subject to a 1.00% premium payable in connection with certain repricing transactions within the first six months after the 2017 Amendment.penalty. The financial covenant is the same as in the Existing Credit Agreement,existing credit agreement, except such covenant is only required to be tested at the end of each fiscal quarter if the aggregate amount of revolving loans, swingline loans and letters of credit (other than undrawn letters of credit and letters of credit that have been fully cash collateralized) outstanding exceed 35% of the aggregate amount of revolving commitments as of the date of the 2017 Amendment (after giving effect to Revolving Credit Facility Increase). The other terms of the Term C Loans and the New Initial Revolving Credit Loans are also generally the same as the terms of the Existing Term Loans and the revolving loans outstanding immediately prior to the closing of the 2017 Amendment (the “Existing Revolving Loans”). A portion of each of the Existing Term Loans and the Existing Revolving Loans remained in place following the 2017 Amendment and each will mature on its respective existing maturity date.
On January 27, 2017, immediately following effectiveness of the 2017 Amendment, we increased the amount of commitments under our Revolving Credit Facility from $300 million to $420 million (the “Revolving Credit Facility Increase”). In accordance with the 2017 Amendment, on December 27, 2018, the amount of commitments under the Revolving Credit Facility was reduced to $338 million.

As further described in Note 2 to our audited consolidated financial statements for the fiscal year ended December 31, 2017,2018, on February 1, 2017, we used $400 million of proceeds from the Gracenote Sale to prepay a portion of our Term B Loans.
In Subsequent to this payment, the first quarterquarterly installments related to the remaining principal amount of 2017, as a result of the 2017 Amendment and the $400 million prepayment, we recorded a loss of $19 million on the extinguishment and modification of debt, as further described in Note 9 to our audited consolidated financial statements.
Term B Loans are no longer due. During the third quarter of 2017, we used $102 million of after-tax proceeds received from our participation in the FCC spectrum auction to prepay $10 million of the Term B Loans and $91 million of the Term C Loans. Subsequent to these payments, our quarterly installments related to the remaining principal amount of the Term C Loans are not due until the third quarter of 2022. We recorded charges of $1 million associated with debt extinguishment in 2017. See Note 1210 to our

audited consolidated financial statements for additional information regarding our participation in the FCC’s incentive auction.
As a result of the 2017 Amendment and the Term Loan Facility prepayments, we recorded charges of $20 million on the extinguishments and modification of debt in our Consolidated Statements of Operations for the year ended December 31, 2017.
Under the Nexstar Merger Agreement, we may not incur debt, other than pursuant to our Revolving Credit Facility.
5.875% Senior Notes due 2022—On June 24, 2015, we issued $1.100 billion aggregate principal amount of our 5.875% Senior Notes due 2022, which we exchanged for substantially identical securities registered under the Securities Act of 1933, as amended, on May 4, 2016. The Notes bear interest at a rate of 5.875% per annum and interest is payable semi-annually in arrears on January 15 and July 15, commencing on January 15, 2016. The Notes mature on July 15, 2022. See “—Significant Events—5.875% Senior Notes due 2022” for additional information regarding the Consent Solicitation undertaken by us in the second quarter of 2017 relating to the Fourth Supplemental Indenture.
Dreamcatcher Credit Facility—We and the Guarantors guaranteeguaranteed the obligations of Dreamcatcher under its Dreamcatcher Credit Facility. See Note 97 to our audited consolidated financial statements for a description of the Dreamcatcher Credit Facility. Our obligations and the obligators of the Guarantors under the Dreamcatcher Credit Facility are secured on a pari passu basis with our obligations under the Secured Credit Facility. During the third quarter of 2017, we used $12.6 million of after-tax proceeds from the FCC spectrum auction to prepay the Dreamcatcher Credit Facility as any proceeds received by Dreamcatcher as a result of the FCC spectrum auction were required to first be used to repay the Dreamcatcher Credit Facility. The debt extinguishment charge recorded in 2017 associated with this prepayment was immaterial. We made the final payment to pay off the Dreamcatcher Credit Facility in full in September 2017.
Capital Structure
As of the Effective Date, we issued 78,754,269 shares of Class A Common Stock and 4,455,767 shares of Class B Common Stock. In addition, on the Effective Date, we entered into the Warrant Agreement, pursuant to which we issued 16,789,972 Warrants. As permitted under the Plan, we adopted a new equity incentive plan for the purpose of granting awards to our directors, officers and employees and the directors, officers and employees of our subsidiaries (see Note 1513 and Note 1614 to our audited consolidated financial statements for further information related to our capital structure and equity incentive plan, respectively). At December 31, 2017,2018, the following amounts were issued: 30,551 Warrants, 101,429,999101,790,837 shares of Class A Common Stock, of which 14,102,185 were held in treasury, and 5,557 shares of Class B Common Stock.Stock and 30,551 Warrants.
Since the Effective Date, we have substantially consummated the various transactions contemplated under the Plan. In particular, we have made all distributions of cash, common stock and warrants that were required to be made under the terms of the Plan to creditors holding allowed claims as of December 31, 2012. Claims of general unsecured creditors that become allowed on or after the Effective Date have been or will be paid on the next quarterly distribution date after such allowance.
Pursuant to the terms of the Plan, we are also obligated to make certain additional payments to certain creditors, including certain distributions that may become due and owing subsequent to the Effective Date and certain payments to holders of administrative expense priority claims and fees earned by professional advisors during the

Chapter 11 proceedings. At December 31, 2017,2018, restricted cash and cash equivalents held by the Company to satisfy the remaining claim obligations was $18$17 million and is estimated to be sufficient to satisfy such obligations.

Contractual Obligations
The table below includes future payments required for long-term debt, contractual agreements for broadcast rights recorded in the Consolidated Balance Sheet, future minimum lease payments to be made under certain non-cancellable operating leases, and expected future payments under our multi-year talent and employment contracts related to our Television and Entertainment operations as well as certain other purchase obligations as of December 31, 2017:2018 (in thousands):
Required or Expected Payments by Fiscal YearRequired or Expected Payments by Fiscal Year
(in thousands)Total 2018 2019-2020 2021-2022 Thereafter
Total 2019 2020-2021 2022-2023 Thereafter
Long-term debt (1)$2,955,517
 $—
 $189,625
 $1,105,727
 $1,660,165
$2,955,517
 $—
 $189,625
 $1,123,341
 $1,642,551
Interest on long-term debt (1)(2)839,148
 154,574
 308,221
 290,363
 85,990
745,277
 167,187
 323,834
 247,303
 6,953
Broadcast rights contracts payable553,664
 253,244
 244,610
 55,810
 —
465,962
 232,687
 212,397
 20,878
 —
Minimum operating lease payments210,500
 28,717
 52,380
 39,162
 90,241
221,336
 33,042
 53,531
 42,802
 91,961
Talent and employment contracts (3)145,023
 65,806
 69,671
 9,513
 33
127,059
 64,084
 59,582
 3,357
 36
Programming not yet available for broadcast859,653
 241,810
 318,851
 164,189
 134,803
602,810
 323,531
 167,245
 88,510
 23,524
Other purchase obligations (4)186,117
 88,766
 78,052
 13,132
 6,167
120,160
 78,959
 28,896
 9,889
 2,416
Total (5)$5,749,622
 $832,917
 $1,261,410
 $1,677,896
 $1,977,399
$5,238,121
 $899,490
 $1,035,110
 $1,536,080
 $1,767,441
 
(1)As of December 31, 2017,2018, we have $1.666 billion of Term C Loans outstanding. The Term C Loans maturity date is the earlier of (A) January 27, 2024 and (B) solely to the extent that more than $600 million in aggregate principal amount of the 5.875% Senior Notes due 2022 remain outstanding on such date, the date that is 91 days prior to July 15, 2022 (as such date may be extended from time to time), as further described in Note 97 to our audited consolidated financial statements. For purposes of the above table, Term C Loans are deemed to mature in 2024.
(2)Interest payments on long-term debt include the impact of our hedging program with respect to $500 million of Term C Loans, as further described in Note 97 to our audited consolidated financial statements.
(3)Our talent and employment contracts primarily secure our on-air talent and other personnel for our television and entertainment businesses through multi-year talent and employment agreements. Certain agreements may be terminated under certain circumstances or at certain dates prior to expiration. We expect our contracts will be renewed or replaced with similar agreements upon their expiration. Amounts due under the contracts, assuming the contracts are not terminated prior to their expiration, are included in the contractual commitments table.
(4)Other purchase obligations shown in the above table include contractual commitments related to capital projects, technology services, news and market data services and other legally binding commitments.
(5)The above table does not include $23$21 million of liabilities as of December 31, 20172018 associated with our uncertain tax positions as we cannot reliably estimate the timing of the future cash outflows related to these liabilities. See Note 1311 to our audited consolidated financial statements.
We have funding obligations with respect to our company-sponsored pension and other postretirement plans and our participation in multiemployer defined benefit pension plans which are not included in the tables above. See Note 1412 to our audited consolidated financial statements for further information regarding our funding obligations for these benefit plans.
Repurchases of Equity Securities
On February 24, 2016, the Board authorized a new stock repurchase program, under which we may repurchase up to $400 million of our outstanding Class A Common Stock. During 2016, we repurchased 6,432,455 shares for $232 million at an average price of $36.08 per share. We did not repurchase any shares of Common Stock during 2017 and 2018 due to restrictions contained in the now terminated Sinclair Merger Agreement. The Nexstar Merger Agreement prohibits us from engaging in additional share repurchases.
On October 13, 2014, the
Cash Dividends
The Board authorized a stock repurchase program, under which we may repurchase up to $400 million ofdeclared quarterly cash dividends on our outstanding Class A Common Stock in open-market purchases in accordance with all applicable securities laws and regulations, including Rule 10b-18to holders of the Exchange Act. During fiscal 2015, we repurchased 6,569,056 sharesrecord of Class A Common Stock in open market transactions for $332 million at an average price ofand Warrants as follows (in thousands, except per share data):

$50.59 per share. As of December 31, 2015, we repurchased the full $400 million, totaling 7,670,216 shares, authorized under this repurchase program.
Cash Dividends
 2018 2017
 Per Share 
Total
Amount
 Per Share 
Total
Amount
First quarter$0.25
 $21,922
 $0.25
 $21,742
Second quarter0.25
 21,925
 0.25
 21,816
Third quarter0.25
 21,929
 0.25
 21,834
Fourth quarter0.25
 21,933
 0.25
 21,837
Total quarterly cash dividends declared and paid$1.00
 $87,709
 $1.00
 $87,229
On February 3, 2017, we paid a special cash dividend of $5.77 per share to holders of record of our Common Stock at the close of business on January 13, 2017. The total aggregate payment on February 3, 2017 totaled $499 million, including the payment to holders of Warrants.
On April 9, 2015, we paid a special cash dividend of $6.73 per share to holders of record of our Common Stock at the close of business on March 25, 2015. The total aggregate payment on April 9, 2015 totaled $649 million, including the payment to holders of Warrants.
Additionally, the Board declared quarterly cash dividends on our Common Stock to holders of record of Common Stock and Warrants as follows (in thousands, except per share data):
 2017 2016
 Per Share 
Total
Amount
 Per Share 
Total
Amount
First quarter$0.25
 $21,742
 $0.25
 $23,215
Second quarter0.25
 21,816
 0.25
 22,959
Third quarter0.25
 21,834
 0.25
 22,510
Fourth quarter0.25
 21,837
 0.25
 21,612
Total quarterly cash dividends declared and paid$1.00
 $87,229
 $1.00
 $90,296
On February 21, 2018,2019, the Board declared a quarterly cash dividend on Common Stock of $0.25 per share to be paid on March 26, 201825, 2019 to holders of record of Common Stock and Warrants as of March 12, 2018.11, 2019.
The declaration of any future dividends and the establishment of the per share amount, record dates and payment dates for any such future dividends are at the discretion of the Board and will depend upon various factors then existing, including earnings, financial condition, results of operations, capital requirements, level of indebtedness, contractual restrictions with respect to payment of dividends (including the restricted payment covenant contained in the credit agreement governing the Secured Credit Facility and the Indenture, as further described in Note 97 to our audited consolidated financial statements), restrictions imposed by applicable law, general business conditions and other factors that the Board may deem relevant. Under the Nexstar Merger Agreement, we may not pay dividends other than quarterly cash dividends of $0.25 or less per share. In addition, pursuant to the terms of the Warrant Agreement, concurrently with any cash dividend made to holders of the Company’s Common Stock, holders of Warrants are entitled to receive a cash payment equal to the amount of the dividend paid per share of Common Stock for each Warrant held. See Item 5 “Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.”
Off-Balance Sheet Arrangements
Off-balance sheet arrangements as defined by the Securities and Exchange CommissionSEC include the following four categories: obligations under certain guarantee contracts; retained or contingent interests in assets transferred to an unconsolidated entity or similar arrangements that serve as credit, liquidity or market risk support; obligations under certain derivative arrangements classified as equity; and obligations under material variable interests. Except as described in the following paragraphs,paragraph, we have not entered into any material arrangements which would fall under any of these four categories and would be reasonably likely to have a current or future material effect on our financial condition, revenues or expenses, results of operations, liquidity or capital expenditures.
Concurrent with the closing of the Chicago Cubs Transactions as discussed and defined in Note 86 to our audited consolidated financial statements, we executed guarantees of collection of certain debt facilities entered into by New

Cubs LLC in 2009. TheAs of December 31, 2017, the guarantees arewere capped at $699 million plus unpaid interest. The guarantees are reduced asIn the first quarter of 2018, New Cubs LLC makes principal payments on the underlying loans. To the extent that payments are made under the guarantees, we will be subrogated to, and will acquire, all rightsrefinanced a portion of the debt lenders againstwhich was guaranteed by the Company and the Company ceased being a guarantor of the refinanced debt. As of December 31, 2018, the remaining guarantees were capped at $249 million plus unpaid interest. On August 21, 2018, NEH provided the Call Notice to us that NEH was exercising its right to purchase our 5% membership interest in CEV LLC. We sold our 5% ownership interest in CEV LLC on January 22, 2019, as previously described. Concurrently with the sale, the Company ceased being a guarantor of all debt facilities held by New Cubs LLC.

Capital Spending
Our capital expenditures, including expenditures by the Gracenote Companies prior to the Gracenote Sale, totaled $76 million in 2018, $67 million in 2017 and $100 million in 20162016.
Major capital projects during 2018 included investments at Television and $89 millionEntertainment for FCC spectrum repacking, news gathering equipment, studio and newsroom upgrades as well as production equipment, news vehicles, computers and buildings, including the build-out of a new office/studio for our radio station in 2015.Chicago. In 2018, capital spending associated with the FCC spectrum repacking totaled $24 million. Corporate and Other investments primarily consisted of the continued build-out of our Corporate office in Chicago and real estate improvements.
Major capital projects during 2017 included investments at Television and Entertainment to build a new facility for one of our television stations and to enhance and update news gathering equipment, studio production equipment, news vehicles and computers. Corporate and Other investments primarily consisted of the build out of new Corporate offices in Chicago.
Major capital projects during 2016 included investments at Television and Entertainment to continue improvements to our facilities and to enhance and update news gathering equipment, studio production equipment and master control hardware. Our Digital and Data business continued to invest in infrastructure to support new business platforms and computer hardware. Corporate and Other investments primarily consisted of technology upgrades and real estate improvements.
Major capital projects during 2015 included investments at Television and Entertainment to replace certain equipment and refurbish facilities, update studio production equipment and upgrade master control hardware. Our Digital and Data businesses continued to invest in computer hardware and infrastructure to support new business platforms as well as to upgrade their office facilities. Corporate and Other investments primarily consisted of real estate improvements.
The Company currently expects capital spending to be $78$79 million in 2018,2019, which represents an $11a $3 million increase over 2017. This increase is due to2018. Major projects for 2019 include continued capital spending related to several stations that are required to change frequencies due to the FCC spectrum repacking as well as certain new transmitters, newsroom upgrades and a new facility for one of our stations. We expect to spend approximately $23 million on capital expenditures for the FCC spectrum repacking in 2019, which would represent the majority of our total remaining expected capital expenditures associated with the FCC spectrum repacking. We expect that reimbursements from the FCCFCC’s special fund will cover the majority of our capital costs and expenses related to the repacking. However, we cannot currently predict the effect of the repacking, whether the special fund will be sufficient to reimburse all of our expenses related to the repacking, the timing of reimbursements or any spectrum-related FCC regulatory action.

Critical Accounting Policies and Estimates
Our significant accounting policies are summarized in Note 1 to our audited consolidated financial statements. These policies conform with U.S. GAAP and reflect practices appropriate to our businesses. The preparation of our consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes thereto. Actual results could differ from these estimates. We evaluate our policies, estimates and assumptions on an ongoing basis.
Our critical accounting policies and estimates relate to revenue recognition, broadcast rights, production costs, goodwill and other indefinite-lived intangible assets, impairment review of long-lived assets, income taxes and pension and other postretirement benefits and self-insurance liabilities.benefits. Management continually evaluates the development, selection and disclosure of our critical accounting policies and estimates and the application of these policies and estimates. In addition, there are other items within the consolidated financial statements that require the application of accounting policies and estimation, but are not deemed to be critical accounting policies and estimates. Changes in the estimates used in these and other items could have a material impact on our consolidated financial statements.
Revenue Recognition—We recognize revenues when control of the promised goods or services is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Our primaryrevenue sources of revenue related tofor the Television and Entertainment are from local and nationalsegment include advertising revenues, retransmission revenues, carriage fees revenue, barter/trade revenues and carriage fee revenues onother revenues. We adopted the new revenue guidance in the first quarter of 2018 using the modified retrospective transition method applied to those

contracts which were not completed as of December 31, 2017. The only identified impact to our television, cablefinancial statements relates to barter revenue and radio stations, as applicable,expense as well as from directbarter-related broadcast rights and indirect display advertising. contracts payable for broadcast rights, which are no longer recognized. Results for reporting periods prior to adoption continue to be presented in accordance with our historical accounting under Topic 605. If accounted for under Topic 605, barter revenue and expense would have been $28 million for fiscal year 2018. For fiscal years 2017 and 2016, barter revenue was $28 million and $30 million, respectively. In addition to the operating revenues included in the Television and Entertainment segment, our consolidated operating revenues include other revenue in Corporate and Other which consists of real estate revenues.
Advertising Revenues—We also recognize revenues from leasesgenerate revenue by delivering advertising on our broadcast television, cable, radio and digital platforms. Certain of our owned real estate.

We recognize revenue when the following conditions are met: (i) there is persuasive evidence that an arrangement exists, (ii) delivery has occurred or service has been rendered, (iii) the fees are fixed or determinable and (iv) collection is reasonably assured. Revenue arrangements with multiple deliverables are divided into separate units of accounting when the delivered item has value toadvertising contracts have guarantees whereby the customer onis guaranteed a stand-alone basis. Where elementscertain level of audience viewership referred to as impressions. Contracts are delivered over different periods of time, and when allowed under U.S. GAAP, revenue is allocated to the respective elements based on their relative selling prices at the inception of the arrangement,typically fixed price, short term in nature and revenue is recognized over time as each elementthe advertisements are aired or the impressions are delivered. If the guaranteed impressions are not achieved through the airing of the initially agreed upon advertisements, we will continue to air advertisements for the customer until the guaranteed impressions are achieved. For these advertising contracts with guaranteed impressions, we recognize revenue based on the proportion of the cumulative impressions achieved for the advertisements delivered in relation to the total guaranteed impressions. Under the advertising contracts, we are entitled to payment as advertisements are aired, and the time between invoice and payment is delivered.not significant. We use a hierarchy to determine the fair value to be used for allocating revenue to elements: (i) vendor-specific objective evidence of fair value (“VSOE”), (ii) third-party evidence, and (iii) best estimate of selling price (“ESP”).
Television and Entertainmentalso trade advertising revenue is recorded, net of agency commissions, when commercials are aired. Television operations may trade certain advertising time for products or services, as well as barter advertising time for program material. Trade transactions are generally reportedservices. Revenue recognized under trade arrangements is valued at the estimated fair value of the productproducts or services received while barter transactionsand recognized as the related advertisements are reported based on our estimate ofaired. We utilize the practical expedients provided in the guidance and do not disclose the value of unsatisfied performance obligations for advertising contracts with an original expected duration of one year or less and for contracts for which we recognize revenue at the advertising time exchanged,amounts to which approximateswe have the fair value ofright to invoice for services performed.
Retransmission Revenues and Carriage Fees—We enter into agreements with MVPDs which allow the program material received. Barter/trade revenue is reported when commercials are broadcast and expenses are reported when products or services are utilized or when programming airs. We record rebates when earned as a reduction of advertising revenue. Retransmission revenues represent revenues that we earn from MVPDs for the distribution ofto retransmit our television stations’ broadcast programming. programming and/or carry our cable channel. Typically, the agreements are multi-year and generally consist of a fixed price per subscriber as well as contractually agreed annual increases. The agreements are considered functional licenses of intellectual property resulting in us recognizing revenue at the point-in-time the broadcast signal is delivered to the MVPDs. The typical time between our performance and customer payment is not significant. As the agreements with MVPDs are considered licenses of intellectual property, we apply the sales/usage based royalty exception in Topic 606 and do not disclose the value of unsatisfied performance obligations for the agreements.
Deferred Revenues—We recognize these revenuesrecord deferred revenue when cash payments are received or due in advance of our performance. For advertising, the performance primarily involves the delivery of advertisements and/or impressions to our customers. For the spectrum sharing arrangements where we are acting as the host, the upfront payments received from our channel-sharing customers in 2017 have been deferred and are being recognized over a 30-year term.
Contract Costs—In accordance with Topic 606, incremental costs to obtain a contract are capitalized and amortized over the contract period, generallyterm if the cost are expected to be recoverable. We do not capitalize incremental costs to obtain a contract where the contract duration is expected to be one year or less. As of December 31, 2018, we do not have any costs capitalized.
Arrangements with Multiple Performance Obligations—Our contracts with customers may include multiple performance obligations. For such arrangements, we allocate revenue to each performance obligation based on a negotiated fee per subscriber. Carriage fees represent fees that we earn from MVPDs for the carriage of our cable channel. We recognize carriage fees over the contract period,its relative standalone selling price, which is generally determined based on the number of subscribers and negotiated rates.price charged to customers.
Broadcast Rights—We acquire rights to broadcast syndicated programs, original licensed series and feature films. Pursuant to ASC Topic 920, “Entertainment-Broadcasters,” these rights and the related liabilities are recorded as an asset and a liability when the license period has begun, the cost of the program is determinable and the program is accepted and available for airing. The current portion of programming inventory includes those rights available for broadcast that are expected to be amortized in the succeeding year. We amortize our broadcast rights costs over the period in which an economic benefit is expected to be derived based on the timing of the usage and benefit from such programming. Newer licensed/acquired programming and original produced programming are

generally amortized on an accelerated basis as the episodes are aired. For certain categories of licensed programming and feature films that have been exploited through previous cycles, amortization expense is recorded on a straight-line basis. Program amortization for certain categories of programming is calculated on either an accelerated or straight-line basis based upon the greater amortization resulting from either the number of episodes aired or the portion of the license period consumed. We also have commitments for network and sports programming that are expensed on a straight-line basis as the programs are available to air. Management’s judgment is required in determining the timing of the expensing of these costs, and includes analyses of historical and estimated future revenue and ratings patterns for similar programming. We regularly review, and revise when necessary, our revenue estimates, which may result in a change in the rate of amortization. Amortization of broadcast rights are expensed to programming in our Consolidated Statements of Operations.
We carry the broadcast rights at the lower of unamortized cost or estimated net realizable value. We evaluate the net realizable value of broadcast rights on a daypart, series, or title-by-title basis, as appropriate. Changes in management’s intended usage of a specific daypart, series, or program would result in a reassessment of the net realizable value, which could result in an impairment. We determine the net realizable value and estimated fair value, as appropriate, based on a projection of the estimated advertising revenues and carriage/retransmission revenues, less certain direct costs of delivery, expected to be generated by the program material, all of which are classified in Level 3 of the fair value hierarchy. If our estimates of future revenues decline, amortization expense could be accelerated or impairment adjustments may be required. We assess future seasons of syndicated programs that we are committed to acquire for impairment as they become available to us for airing. Any impairments of programming rights are expensed to programming in our Consolidated Statements of Operations.
As a result of the evaluation of the recoverability of the unamortized costs associated with broadcast rights, we recognized impairment charges at WGN America of $28 million for the syndicated program Elementary in 2018, $80 million for the syndicated programs Person of Interest and Elementary in 2017 and $37 million for the syndicated program Elementary in 2016 and $74 million for the syndicated

programs Person of Interest and Elementary in 2015.2016. We havehad commitments to acquire up to fivefour additional seasons of Elementary in future periods, if produced. Additional impairmentsperiods; however, the show was cancelled in 2018 with the final season to be aired in 2019, which we are obligated to purchase. An additional impairment may be required when these seasons becomethis season becomes available to air if estimates of future revenues for these programsthis program have not improved. At December 31, 20172018 and December 31, 2016,2017, we had broadcast rights assets of $194 million and $263 million, and $311 million, respectively.
Production Costs—We produce and enter into arrangements with third parties to co-produce original programming to exhibit on our broadcast stations and cable network. These arrangements, which are referred to as co-financing arrangements, take various forms. In accordance with ASC Topic 926, “Entertainment-Films,” we estimate total revenues to be earned and costs to be incurred throughout the life of each television program. Estimates for remaining total lifetime revenues are limited to the amount of revenue contracted for each episode in the initial market (which is the US television market). Accordingly, television programming costs and participation costs incurred in excess of the amount of revenue contracted in the initial market are expensed as incurred. Estimates for all secondary market revenues such as domestic and foreign syndication, digital streaming, home entertainment and merchandising are included in the estimated lifetime revenues of such television programming once it can be demonstrated that a program can be successfully licensed in such secondary market. Television programming costs incurred subsequent to the establishment of the secondary market are initially capitalized and amortized based on the proportion that current period revenues bear to the estimated remaining total lifetime revenues. As several of our produced programming television series have either recently launched or have yet to premiere, we do not have a demonstrated history of participating in secondary market revenues to support that these programs can be successfully licensed in such secondary markets. Production costs are expensed to programming in our Consolidated Statements of Operations.
Goodwill and Other Indefinite-Lived Intangible Assets—We review goodwill and other indefinite-lived intangible assets for impairment annually, or more frequently if events or changes in circumstances indicate that an asset may be impaired, in accordance with ASC Topic 350, “Intangibles—Goodwill and Other.” Under ASC Topic 350, the impairment review of goodwill and other intangible assets not subject to amortization must be based on estimated fair values. On January 2017, the FASB issued ASU No. 2017-04, “Intangibles - Goodwill and Other (Topic 350).” We adopted the standard on a prospective basis, effective January 1,in the first quarter of 2017. The standard simplifies the subsequent measure of goodwill by eliminating Step 2 from the goodwill impairment test. Under ASU 2017-04, companies recognize an impairment charge for the amount the carrying amountvalue exceeds the reporting unit’s fair value. However, the loss recognized cannot exceed the total goodwill allocated to that reporting unit. Goodwill and other intangibles not subject to amortization totaled $3.984$3.981 billion and $4.022$3.984 billion at December 31, 20172018 and December 31, 2016,2017, respectively.
Our annual impairment review measurement date is in the fourth quarter of each year. Goodwill is tested for impairment at the reporting unit level, which is at or one level below our operating segment level. The reporting units are determined based on the components of our operating segment that constitutes a business for which discrete financial information is available and segment management regularly review the operating results of the component.
As of the fourth quarter of 20172018 and 2016,2017, we conducted our annual impairment test in accordance with ASC Topic 350. In performing our annual assessment, we have the option of performing a qualitative assessment to determine if it is more likely than not that a reporting unit has been impaired. As part of the qualitative assessment forof our reporting units, we evaluate the impact of factors that are specific to the reporting units as well as industry and macroeconomic factors. The reporting unit specific factors include a comparison of the current year results to prior

year, current year budget and the budget for next fiscal year. We also consider the significance of the excess fair value over the carrying value reflected in prior quantitative assessments, the changes to the reporting units’ carrying value since the last impairment test and the change in the overall enterprise value of the Company compared to the prior year.
If we conclude that it is more likely than not that a reporting unit is impaired or if we elect not to perform the optional qualitative assessment, we will perform a quantitative assessment. The quantitative assessment tests for potential impairment by comparing the fair value of each reporting unit with the reporting unit’s net assetcarrying value. If the fair value of the reporting unit exceeds the carrying value of the reporting unit’s net assets,unit, goodwill is not

impaired and no further testing is required. If the fair value of the reporting unit does not exceed the carrying value of the net assets assigned to the reporting unit, an impairment is recorded as the difference between the fair value of the reporting unit and the carrying value. In performing the quantitative assessment, the fair value of a reporting units is determined with consideration of both the income and market valuation approaches. Under the income approach, the fair value is based on projected future discounted cash flows, which requires management’s assumptions of projected revenues and related growth rates, operating margins, discount rates and terminal growth rates. Under the market valuation approach, the fair value is based on market multiples and consideration of market valuations of comparable companies.
During our 20172018 annual goodwill impairment test, we performed a qualitative assessment of the television and cable reporting units (reporting units within the Television and Entertainment reportable segment) which, at December 31, 2017,2018, had goodwill balances of $2.506$2.505 billion and $723 million, respectively. Based on the qualitative assessment, we concluded that there were no impairments for either reporting unit. The conclusion was supported by the overall and budgeted financial performance, declines inthe current carrying values after considering the headroom from the prior yearlast quantitative analysis of 16% and 23%, for the television and cable reporting units, respectively, the overall stabilityincrease of the Company’s enterprise value and other industry and macroeconomic factors.
No goodwill impairment charges were recorded in 2017 or 2016.
During our 2015 annual impairment test of goodwill balances, we determined that the fair value of our cable reporting unit (a reporting unit within the Television and Entertainment reportable segment) was below its carrying value. We estimated the fair value of our cable reporting unit using both the income and market valuation approaches. As a result of the first step test, it was determined that the fair value of the cable reporting unit was below the carrying amount by approximately 9%. Accordingly, under the accounting guidance effective in 2015, a second step of the goodwill impairment test was performed specific to the cable reporting unit which compared the implied fair value of the goodwill to the carrying value of such goodwill. Based on the results from the second step process, we recorded a goodwill impairment charge of $381 million during the fourth quarter of 2015. See Note 7 to our audited consolidated financial statements for further information.
The estimated fair values of other intangible assets subject to the annual impairment review, which include FCC licenses and a trade name, are evaluated qualitatively or generally calculated based on projected future discounted cash flow analyses. The determination of estimated fair values of goodwill and other indefinite-lived intangible assets requires many judgments, assumptions and estimates of several critical factors, including projected revenues and related growth rates, projected operating margins and cash flows, estimated income tax rates, capital expenditures, market multiples and discount rates, as well as specific economic factors such as market share for broadcasting and royalty rates for the trade name intangible. For our FCC licenses, significant assumptions also include start-up operating costs for an independent station, initial capital investments and market revenue forecasts. Fair value estimates for each of our indefinite-lived intangible assets are inherently sensitive to changes in these estimates, particularly with respect to the FCC licenses. Adverse changes in expected operating results and/or unfavorable changes in other economic factors could result in additional non-cash impairment charges in the future under ASC Topic 350.
In the fourth quarter of 2018, we recorded a non-cash pretax impairment charge of $3 million related to one FCC license in connection with our annual impairment review under ASC Topic 350. See Note 5 to our audited consolidated financial statements for further information. No impairment charges were recorded in 2017 for either FCC licenses or the trade name. In the fourth quarter of 2016, and 2015, we recorded a non-cash pretax impairment charge of $3 million and $4 million, respectively, related to two of our FCC licenses in connection with our annual impairment review under ASC Topic 350. See Note 75 to our audited consolidated financial statements for further information.
Impairment Review of Long-Lived Assets—In accordance with ASC Topic 360, “Property, Plant and Equipment,” we evaluate the carrying value of long-lived assets to be held and used whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset or asset group may be impaired. The carrying value of a long-lived asset or asset group is considered impaired when the projected future undiscounted cash flows to be generated from the asset or asset group over its remaining depreciable life are less than its current carrying value. We measure impairment based on the amount by which the carrying value exceeds the estimated fair value of the long-lived asset or asset group. The fair value is determined primarily by using the projected future cash flows discounted at a rate commensurate with the risk involved as well as market valuations. Losses on long-lived assets to

be disposed of are determined in a similar manner, except that the fair values are reduced for an estimate of the cost to dispose or abandon.
There were no impairment charges for long-lived assets recorded for the year ended December 31, 2018. For the years ended December 31, 2017 December 31, 2016 and December 31, 2015,2016, we recorded charges totaling $2 million $15 million and $7$15 million, respectively, to write down certain real estate properties to their estimated fair value, less the expected selling costs. Adverse changes in expected operating results and/or unfavorable changes in other economic factors used to estimate future undiscounted cash flows could result in additional non-cash impairment charges in the future under ASC Topic 360.
Income Taxes—Provisions for federal and state income taxes are calculated on reported pretax earnings based on current tax laws and also include, in the current period, the cumulative effect of any changes in tax rates from those used previously in determining deferred tax assets and liabilities. Taxable income reported to the taxing jurisdictions in which we operate often differs from pretax earnings because some items of income and expense are recognized in different time periods for income tax purposes. We provide deferred taxes on these temporary differences in accordance with ASC Topic 740. Taxable income also may differ from pretax earnings due to statutory provisions under which specific revenues are exempt from taxation and specific expenses are not allowable as deductions. The consolidated tax provision and related accruals include estimates of the potential taxes and related interest as deemed appropriate. These estimates are reevaluated and adjusted, if appropriate, on a quarterly basis. Although management believes its estimates and judgments are reasonable, the resolutions of our tax issues are unpredictable and could result in tax liabilities that are significantly higher or lower than that which has been provided by us.
ASC Topic 740 addresses the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Under ASC Topic 740, a company may recognize the tax benefit of an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. ASC Topic 740 requires the tax benefit recognized in the financial statements to be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. ASC Topic 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods and disclosure. See Note 1311 to our audited consolidated financial statements for further discussion.
Our effective tax rate and income tax expense could vary from estimated amounts due to future impacts of various items, including changes in tax laws, tax planning as well as forecasted financial results. Management believes current estimates are reasonable, however, actual results can differ from these estimates.
Tax Reform significantly changeschanged how the U.S. taxes corporations. Tax Reform requires complex computations to be performed that were not previously required in U.S. tax law, significant judgments to be made in interpretation of the provisions of Tax Reform and significant estimates in calculations, and the preparation and analysis of information not previously relevant or regularly produced. The U.S. Treasury Department, the IRS, and other standard-setting bodies could interpret or issue guidance on how provisions of Tax Reform will be applied or otherwise administered that is different from our interpretation. As we completecompleted our analysis of Tax Reform, collectcollected and prepareprepared necessary data, and interpret anyinterpreted additional guidance, in 2018, we may make adjustmentsrecorded an additional income tax benefit of $24 million to our net deferred tax liabilities, adjusting the provisional amounts that we havediscrete net tax benefit of $256 million recorded that may materially impact our provision for income taxes in the period in which the adjustments are made.fourth quarter of 2017.
Pension and Other Postretirement Benefits—Retirement benefits are provided to employees through defined benefit pension plans sponsored either by us or by unions. Under our company-sponsored plans, pension benefits are primarily a function of both the years of service and the level of compensation for a specified number of years, depending on the plan. It is our policy to fund the minimum for our company-sponsored pension plans as required by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). Contributions made to union-sponsored plans are based upon collective bargaining agreements. We also provide certain health care and life insurance benefits for retired employees. The expected cost of providing these benefits is accrued over the years that the employees render services. It is our policy to fund postretirement benefits as claims are incurred. Accounting for

pension and other postretirement benefits requires the use of several assumptions and estimates. Actual experience

or changes to these assumptions and other estimates could have a significant impact on our consolidated results of operations and financial position. See Note 1412 to our audited consolidated financial statements for a summary of all of the key assumptions related to pension and other postretirement benefits as well as a description of our defined benefit pension and postretirement plans as well as additional disclosures.
We recognize the overfunded or underfunded status of our defined benefit pension and other postretirement plans (other than a multiemployer plan) as an asset or liability in our Consolidated Balance Sheets and recognize changes in that funded status in the year in which changes occur through comprehensive income (loss).
We utilize the Aon Hewitt AA-Only Bond Universe Yield Curve (the “Aon Hewitt Yield Curve”) for discounting future benefit obligations and calculating interest cost. The Aon Hewitt Yield Curve represents the yield on high quality (AA and above) corporate bonds that closely match the cash flows of the estimated payouts for our benefit obligations. As of December 31, 2017,2018, a 0.5% decrease in our discount rate assumptions of 4.05%3.55% for our pension plans and 3.30%3.10% for our other postretirement plans would result in a $5$4 million increase in our 20172018 net pension income and a $0.03$0.02 million increase in our 20172018 other postretirement benefit income.
We used a multi-pronged approach to determine our 6.60%6.40% assumption for the long-term expected rate of return on pension plan assets. This approach included a review of actual historical returns achieved and anticipated long-term performance of each asset class. As of December 31, 2017,2018, a 0.5% decrease in our long-term rate of return assumption would result in an $8 million decrease in our 20172018 net pension income. Our pension plan assets earned a return of (6.5)% in 2018 and 14.6% in 2017 and 7.8% in 2016.2017. The asset returns are net of administrative expenses.
Our pension actuarial valuation also incorporates other factors such as mortality rates. The actuarial assumptions used by us may differ materially from actual results due to, among other things, longer or shorter life spans of plan participants. Differences in these assumptions could significantly impact the actual amount of net periodic benefit cost and pension liability recorded by us.
For purposes of measuring postretirement health care costs for 2017,2018, we assumed a 7.0% annual rate of increase in the per capita cost of covered health care benefits. The rate was assumed to decrease gradually to 5.0% for 20242025 and remain at that level thereafter. For purposes of measuring postretirement health care obligations at December 31, 2017,2018, we assumed a 7.0%6.7% annual rate of increase in the per capita cost of covered health care benefits. The rate was assumed to decrease gradually to 5.0% for 2025 and remain at that level thereafter.
Assumed health care cost trend rates have a significant effect on the amounts reported for health care plans. As of December 31, 2017,2018, a 1% change in assumed health care cost trend rates would have the following effects (in thousands):
1% Increase 1% Decrease1% Increase 1% Decrease
Service cost and interest cost$7
 $(6)$7
 $(7)
Projected benefit obligation$217
 $(199)$189
 $(174)
In accordance with ASC Topic 715, “Compensation—Retirement Benefits,” unrecognized net actuarial gains and losses will be recognized in net periodic pension expense over approximately 24 years, which represents the estimated average remaining life expectancy of the inactive participants receiving benefits, due to plans being frozen and participants are deemed inactive for purposes of determining remaining useful life. Our policy is to incorporate asset-related gains and losses into the asset value used to calculate the expected return on plan assets and into the calculation of amortization of unrecognized net actuarial loss over a four-year period.
Self-Insurance Liabilities—We self-insure for certain employee medical and disability income benefits, workers’ compensation costs and automobile and general liability claims. The recorded liabilities for self-insured risks are calculated using actuarial methods. We carry insurance coverage to limit exposure for self-insured workers’ compensation costs and automobile and general liability claims. Our deductibles under these coverages are generally $1 million per occurrence, depending on the applicable policy period. The recorded liabilities for self-insured risks totaled $24 million at December 31, 2017 and $26 million at December 31, 2016.

New Accounting Standards
See Note 1 to our audited consolidated financial statements for the discussion of recent accounting pronouncements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risk from changes in interest rates of our variable rate debt, which, as of December 31, 20172018 and December 31, 2016,2017, primarily consisted of the borrowings under the Term Loan Facility. As ofAt both December 31, 2018 and December 31, 2017, and December 31, 2016, we had $1.856 billion and $2.343 billion aggregate principal amounts outstanding under our Term Loan Facility, respectively.Facility. The Term Loan Facility bears interest, at our election, at a rate per annum equal to either (i) the sum ofAdjusted LIBOR, adjusted for statutory reserve requirements on Euro currency liabilities (“Adjusted LIBOR”), subject to a minimum rate of 0.75%, plus an applicable margin of 3.0% or (ii) the sum of a base rate determined as the highest of (a) the federal funds effective rate from time to time plus 0.5%, (b) the prime rate of interest announced by the administrative agent as its prime rate, and (c) Adjusted LIBOR plus 1.0%, plus an applicable margin of 2.0%. See Note 97 to our audited consolidated financial statements for further information on the Term Loan Facility and its terms. Based on the amounts outstanding under the Term Loan Facility as of December 31, 20172018 and December 31, 2016,2017, adding 1% to the applicable interest rate under the Term Loan Facility would result in an increase of approximately $19 million and $23 million in our annual interest expense respectively,in each period, which may be mitigated by interest rate swaps with a notional value of $500 million, as described below. See Note 108 to our audited consolidated financial statements for further information regarding the fair value of our long-term debt.
As discussed in Note 108 to our audited consolidated financial statements, we entered intoare a party to certain interest rate swaps with a notional value of $500 million that involve the exchange of floating for fixed rate interest payments in order to reduce future interest rate volatility of the variable rate interest payments related to the Term Loan Facility. While the current expectation is to maintain the interest rate swaps through maturity of the Term Loan Facility, due to risks for hedging gains and losses, cash settlement costs or changes to our capital structure, we may not elect to maintain such interest rate swaps with respect to any of our variable rate indebtedness, and any swaps we enter into may not fully mitigate our interest rate risk.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements required by this Item are located beginning on page F-1 of this report and within Exhibit 99.1.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of December 31, 2017.2018. Our disclosure controls and procedures are designed to ensure that information we are required to disclose in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures. Based upon management’s evaluation described above, our Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2017.2018.

Report of Management on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. Internal control over financial reporting is a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, and effected by our board of directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Internal control over financial reporting includes policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of an issuer’s assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that an issuer’s receipts and expenditures are being made only in accordance with authorizations of its management and board of directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of an issuer’s assets that could have a material effect on the financial statements.
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2017.2018. Management’s assessment was based on criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control - Integrated Framework (2013). Based upon this assessment, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2017.2018.
The effectiveness of our internal control over financial reporting as of December 31, 20172018 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included herein, which expresses an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2017.2018.
Changes in Internal Control over Financial Reporting
There have been no changes in internal control over financial reporting that occurred during the quarter ended December 31, 20172018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on the Effectiveness of Controls
Management, including our Chief Executive Officer and Chief Financial Officer, do not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. Internal controls, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, errors or misstatements, if any, within our company have been or will be detected.
ITEM 9B. OTHER INFORMATION
None

PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required by this item with respect to our directors and executive officers will be contained in our 20182019 Proxy Statement under the caption “Directors, Executive Officers and Corporate Governance” and is incorporated in this report by reference; provided that if such proxy statement is not filed on or before April 30, 2018,2019, such information will be included in an amendment to this Report on Form 10-K filed on or before such date.
The information required by this item with respect to Section 16(a) beneficial ownership reporting compliance will be contained in our 20182019 Proxy Statement under the caption “Section 16(A) Beneficial Ownership Reporting Compliance” and is incorporated in this report by reference; provided that if such proxy statement is not filed on or before April 30, 2018,2019, such information will be included in an amendment to this Report on Form 10-K filed on or before such date.
The information required by this item with respect to corporate governance matters will be contained in our 20182019 Proxy Statement under the caption “Directors, Executive Officers and Corporate Governance” and is incorporated in this report by reference; provided that if such proxy statement is not filed on or before April 30, 2018,2019, such information will be included in an amendment to this Report on Form 10-K filed on or before such date.
We have adopted a Code of Ethics and Business Conduct, to which all directors, officers and employees of the Company are subject, and a Code of Ethics for CEO and Senior Financial Officers, to which certain members of management are subject. We also have made these documents available on our website at http://investors.tribunemedia.com/corporate-governance.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item will be contained in our 20182019 Proxy Statement under the captions “Director Compensation for Fiscal Year 2017,2018,” “Compensation Discussion and Analysis” and “Executive Compensation” and is incorporated in this report by reference; provided that if such proxy statement is not filed on or before April 30, 2018,2019, such information will be included in an amendment to this Report on Form 10-K filed on or before such date.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information required by this item with regard to security ownership of certain beneficial owners and management will be contained in our 20182019 Proxy Statement under the caption “Security Ownership of Certain Beneficial Owners and Management” and is incorporated in this report by reference; provided that if such proxy statement is not filed on or before April 30, 2018,2019, such information will be included in an amendment to this Report on Form 10-K filed on or before such date.
The information required by this item with regard to securities authorized for issuance under equity compensation plans will be contained in our 20182019 Proxy Statement under the caption ‘‘Securities Authorized for Issuance under our Equity Compensation Plans” and is incorporated in this report by reference; provided that if such proxy statement is not filed on or before April 30, 2018,2019, such information will be included in an amendment to this Report on Form 10-K filed on or before such date.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by this item will be contained in our 20182019 Proxy Statement under the captions “Related Party Transactions” and “Directors, Executive Officers and Corporate Governance” and is incorporated in this report by reference; provided that if such proxy statement is not filed on or before April 30, 2018,2019, such information will be included in an amendment to this Report on Form 10-K filed on or before such date.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by this item will be contained in our 20182019 Proxy Statement under the caption ‘‘Ratification of Selection of Independent Registered Public Accounting Firm” and is incorporated in this report by reference; provided that if such proxy statement is not filed on or before April 30, 2018,2019, such information will be included in an amendment to this Report on Form 10-K filed on or before such date.
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
a) The following documents are filed as a part of this report:
(1) Financial Statements
The financial statements and notes thereto are annexed to this report beginning on page F-1 and within Exhibit 99.1.
(2) Financial Statement Schedules
All schedules are omitted because they are either not applicable or the required information is disclosed in our audited consolidated financial statements or the accompanying notes.
(3) Exhibits
Exhibit No. Description
  2.1 
Separation and Distribution Agreement, dated as of August 3, 2014, by and between Tribune Media Company and Tribune Publishing Company (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of Tribune Publishing Company, filed August 7, 2014).
   
  2.2 
Fourth Amended Joint Plan of Reorganization for Tribune Company and its Subsidiaries by the Debtors, the Official Committee of Unsecured Creditors, Oaktree Capital Management, L.P., Angelo, Gordon & Co., L.P., and JPMorgan Chase Bank, N.A., dated July 19, 2012 (incorporated by reference to Exhibit 2.2 to the Registration Statement on Form 10 of Tribune Media Company, filed November 14, 2014).
   
2.3 
Share Purchase Agreement, among Tribune Media Company, Gracenote Inc., Gracenote Canada, Inc., Gracenote Netherlands Holdings B.V., Tribune Digital Ventures, LLC, Tribune International Holdco, LLC and Nielsen Holding and Finance B.V., dated December 19, 2016 (incorporated by reference to Exhibit 2.3 to the Annual Report on Form 10-K of Tribune Media Company, filed on March 1, 2017).
   
2.4 
Agreement and Plan of Merger among Tribune Media Company and Sinclair Broadcast Group, Inc., dated as of May 8, 2017 (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of Tribune Media Company, filed May 9, 2017).
   
2.5
Agreement and Plan of Merger, dated as of November 30, 2018, by and among Tribune Media Company, Nexstar Media Group, Inc. and Titan Merger Sub, Inc. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of Tribune Media Company, filed December 4, 2018).
3.1 
Second Amended and Restated Certificate of Incorporation of Tribune Media Company (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form 10 of Tribune Media Company, filed September 22, 2014).
   
3.2 
Amendment to Certificate of Incorporation of Tribune Media Company (incorporated by reference to Exhibit 3.2 to the Quarterly Report on Form 10-Q of Tribune Media Company, filed August 13, 2015).
   
3.3 
Amended and Restated By-laws of Tribune Media Company (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K of Tribune Media Company, filed on October 31, 2017).

Exhibit No. Description
4.1 
Indenture, dated June 24, 2015, between Tribune Media Company, the Subsidiary Guarantors party thereto and The Bank of New York Mellon Trust Company, N.A. (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of Tribune Media Company, filed June 29, 2015).
   
4.2 
First Supplemental Indenture, dated June 24, 2015, between Tribune Media Company, the Subsidiary Guarantors party thereto and The Bank of New York Mellon Trust Company, N.A. (incorporated by reference to Exhibit 4.2 on the Current Report on Form 8-K of Tribune Media Company, filed June 29, 2015).
   
4.3 
Form of 5.875% Senior Note due 2022 (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K of Tribune Media Company, filed June 29, 2015, included in Exhibit 4.1 thereto).
   
4.4 
Second Supplemental Indenture, dated September 8, 2015, between Tribune Media Company, the Subsidiary Guarantors party thereto and The Bank of New York Mellon Trust Company, N.A. (incorporated by reference to Exhibit 4.5 to the Quarterly Report on Form 10-Q of Tribune Media Company, filed November 10, 2015).
   
4.5 
Third Supplemental Indenture, dated October 8, 2015, between Tribune Media Company, the Subsidiary Guarantors party thereto and The Bank of New York Mellon Trust Company, N.A. (incorporated by reference to Exhibit 4.6 to the Annual Report on Form 10-K of Tribune Media Company, filed February 29, 2016).
   
4.6 
Fourth Supplemental Indenture, dated as of June 22, 2017, by and among Tribune Media Company, the subsidiary guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of Tribune Media Company, filed June 23, 2017).
   
10.1 
Registration Rights Agreement, dated as of December 31, 2012, among Tribune Company and Stockholders party thereto (incorporated by reference to Exhibit 10.4 to the Registration Statement on Form 10 of Tribune Media Company, filed September 22, 2014).
   
10.2 
Credit Agreement, dated as of December 27, 2013, among Tribune Company, JPMorgan Chase Bank, N.A., as administrative agent, collateral agent, swing line lender and L/C issuer and the other lenders party thereto (incorporated by reference to Exhibit 10.5 to the Registration Statement on Form 10 of Tribune Media Company, filed September 22, 2014).
   
10.3 
Amendment No. 1 to the Credit Agreement, dated June 24, 2015, between Tribune Media Company, the Guarantors party thereto and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Tribune Media Company, filed June 29, 2015).
   
10.4 
Guaranty, dated as of December 27, 2013, made among Tribune Company, each of the subsidiaries party thereto and JPMorgan Chase Bank, N.A., as collateral agent (incorporated by reference to Exhibit 10.6 to the Registration Statement on Form 10 of Tribune Media Company, filed September 22, 2014).
   
10.5 
Security Agreement, dated as of December 27, 2013, among Tribune Company, each of the subsidiaries party thereto and JPMorgan Chase Bank, N.A., as collateral agent (incorporated by reference to Exhibit 10.7 to the Registration Statement on Form 10 of Tribune Media Company, filed September 22, 2014).
   
10.6 
Pledge Agreement, dated as of December 27, 2013, among Tribune Company, each of the subsidiaries party thereto and JPMorgan Chase Bank, N.A., as collateral agent (incorporated by reference to Exhibit 10.8 to the Registration Statement on Form 10 of Tribune Media Company, filed September 22, 2014).
   

Exhibit No. Description
10.7 
Warrant Agreement, dated as of December 31, 2012, between Tribune Company and Computershare Inc. and Computershare Trust Company, N.A. (incorporated by reference to Exhibit 10.9 to the Registration Statement on Form 10 of Tribune Media Company, filed September 22, 2014).
   
10.8§ 
Tribune Company 2013 Equity Incentive Plan (incorporated by reference to Exhibit 10.10 to the Registration Statement on Form 10 of Tribune Media Company, filed September 22, 2014).
   
10.9§ 
Employment Agreement, dated November 20, 2013, between Tribune Company and Chandler Bigelow (incorporated by reference to Exhibit 10.12 to the Registration Statement on Form 10 of Tribune Media Company, filed September 22, 2014).
   
10.10§ 
Employment Agreement, dated July 27, 2014, between Tribune Company and John Batter (incorporated by reference to Exhibit 10.14 to the Annual Report on Form 10-K of Tribune Media Company, filed February 29, 2016).
10.11§
Amendment to the Employment Agreement, dated September 25, 2015, between Tribune Media Company and John Batter (incorporated by reference to Exhibit 10.15 to the Annual Report on Form 10-K of Tribune Media Company, filed February 29, 2016).
10.12§
Employment Agreement, dated as of January 17, 2013, between Tribune Company and Edward Lazarus (incorporated by reference to Exhibit 10.14 to the Registration Statement on Form 10 of Tribune Media Company, filed September 22, 2014).
   
10.13§
Employment Agreement, dated as of January 2, 2013, between Tribune Company and Peter Liguori (incorporated by reference to Exhibit 10.15 to the Registration Statement on Form 10 of Tribune Media Company, filed September 22, 2014).
10.14§10.11§ 
Employment Agreement, dated as of February 12, 2013, between Tribune Company and Lawrence Wert (incorporated by reference to Exhibit 10.16 to the Registration Statement on Form 10 of Tribune Media Company, filed September 22, 2014).
   
10.15§10.12§ 
Amendment to the Employment Agreement, dated April 6, 2015, between Tribune Media Company and Chandler Bigelow (incorporated by reference to Exhibit 10.12 to the Quarterly Report on Form 10-Q of Tribune Media Company, filed August 13, 2015).
   
10.16§
Amendment to the Employment Agreement, dated April 2, 2015, between Tribune Media Company and Peter Liguori (incorporated by reference to Exhibit 10.14 to the Quarterly Report on Form 10-Q of Tribune Media Company, filed August 13, 2015).
10.17§10.13§ 
Amendment to the Employment Agreement, dated April 3, 2015, between Tribune Media Company and Edward Lazarus (incorporated by reference to Exhibit 10.13 to the Quarterly Report on Form 10-Q of Tribune Media Company, filed August 13, 2015).
   
10.18§10.14§ 
Form of Stock Option Agreement (incorporated by reference to Exhibit 10.20 to the Annual Report on Form 10-K of Tribune Media Company, filed March 6, 2015).
   
10.19§10.15§ 
Form of Restricted Stock Unit Agreement (incorporated by reference to Exhibit 10.21 to the Annual Report on Form 10-K of Tribune Media Company, filed March 6, 2015).
   
10.20§10.16§ 
Form of Performance Share Unit Agreement (incorporated by reference to Exhibit 10.22 to the Annual Report on Form 10-K of Tribune Media Company, filed March 6, 2015).
   
10.2110.17 
Amendment No. 2 to the Credit Agreement, dated January 27, 2017, between Tribune Media Company, the Guarantors party thereto, JPMorgan Chase Bank N.A. and the lenders thereto (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K of Tribune Media Company, filed January 30, 2017).
   
10.22§
Amendment to the Employment Agreement, dated February 24, 2016, between Tribune Media Company and Peter Liguori (incorporated by reference to Exhibit 10.27 to the Registration Statement on Form S-4 of Tribune Media Company, filed March 24, 2016).

Exhibit No.Description
10.23§10.18§ 
Amendment to the Employment Agreement, dated February 24, 2016, between Tribune Media Company and Chandler Bigelow (incorporated by reference to Exhibit 10.28 to the Registration Statement on Form S-4 of Tribune Media Company, filed March 24, 2016).
   
10.24§10.19§ 
Amendment to the Employment Agreement, dated February 24, 2016, between Tribune Media Company and Edward Lazarus (incorporated by reference to Exhibit 10.29 to the Registration Statement on Form S-4 of Tribune Media Company, filed March 24, 2016).
   
10.25§10.20§ 
Form of Supplemental Performance Share Unit Agreement (incorporated by reference to Exhibit 10.30 to the Registration Statement on Form S-4 of Tribune Media Company, filed March 24, 2016).
   
10.26§10.21§ 
Tribune Media Company 2016 Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 to the Registration Statement on Form S-8 of Tribune Media Company, filed May 17, 2016).
   
10.27§10.22§ 
2016 Tribune Media Company Compensation Plan for Non-Employee Directors (incorporated by reference to Exhibit 10.2 to the Registration Statement on Form S-8 of Tribune Media Company, filed May 17, 2016).
   

10.28§
Exhibit No.Description
10.23§ 
Form of Stock Option Agreement under the Tribune Media Company 2016 Incentive Compensation Plan (incorporated by reference to Exhibit 10.33 to the Quarterly Report on Form 10-Q of Tribune Media Company, filed August 9, 2016).
   
10.29§10.24§ 
Form of Restricted Stock Unit Agreement under the Tribune Media Company 2016 Incentive Compensation Plan (incorporated by reference to Exhibit 10.34 to the Quarterly Report on Form 10-Q of Tribune Media Company, filed August 9, 2016).
   
10.30§10.25§ 
Form of Performance Stock Unit Agreement under the Tribune Media Company 2016 Incentive Compensation Plan (incorporated by reference to Exhibit 10.35 to the Quarterly Report on Form 10-Q of Tribune Media Company, filed August 9, 2016).
   
10.31§10.26§ 
Employment Agreement, dated as of July 18, 2016, between Tribune Media Company and Lawrence Wert (incorporated by reference to Exhibit 10.36 to the Quarterly Report on Form 10-Q of Tribune Media Company, filed August 9, 2016).
   
10.32
Agreement of Purchase and Sale, dated as of August 26, 2016, by and between CIM Group Acquisitions, LLC and IL-Tribune Tower, LLC (incorporated by reference to Exhibit 10.37 to the Quarterly Report on Form 10-Q of Tribune Media Company, filed November 9, 2016).
10.33§
Letter Agreement, dated as of December 22, 2016, by and between Tribune Media Company and John Batter (incorporated by reference to Exhibit 10.36 to the Annual Report on Form 10-K of Tribune Media Company, filed March 1, 2017).
10.34§
Separation Agreement, dated as of January 24, 2017, by and between Tribune Media Company and Peter Liguori (incorporated by reference to Exhibit 10.37 to the Annual Report on Form 10-K of Tribune Media Company, filed March 1, 2017).
10.35§10.27§ 
Employment Letter Agreement, dated March 6, 2017, between Tribune Media Company and Peter M. Kern (incorporated by reference to Exhibit 10.38 to the Quarterly Report on Form 10-Q of Tribune Media Company, filed May 10, 2017).
   
10.36§10.28§ 
Form of Tribune Media Company Director Indemnification Agreement (incorporated by reference to Exhibit 10.39 to the Quarterly Report on Form 10-Q of Tribune Media Company, filed on May 10, 2017).
   
10.37§10.29§ 
Amended and Restated Employment Agreement, dated as of April 27, 2017, between Tribune Media Company and Chandler Bigelow (incorporated by reference to Exhibit 10.40 to the Quarter Report on Form 10-Q of Tribune Media Company, filed on August 9, 2017).
   
10.38§10.30§ 
Amended and Restated Employment Agreement, dated as of April 27, 2017, between Tribune Media Company and Edward Lazarus (incorporated by reference to Exhibit 10.41 to the Quarter Report on Form 10-Q of Tribune Media Company, filed on August 9, 2017).

Exhibit No. Description
10.31§
Offer of Employment, dated June 9, 2017 between Tribune Media Company and Gavin Harvey (incorporated by reference to Exhibit 10.39 to the Quarter Report on Form 10-Q of Tribune Media Company, filed on May 10, 2018).
10.32
Asset Purchase Agreement among Sinclair Television Group, Inc., Tribune Media Company and Fox Television Stations, LLC, dated May 8, 2018 (incorporated by reference to Exhibit 10.40 to the Quarter Report on Form 10-Q of Tribune Media Company, filed on August 9, 2018).
10.33§
Employment Agreement, dated as of June 20, 2018, between Tribune Media Company and Gavin Harvey (incorporated by reference to Exhibit 10.41 to the Quarter Report on Form 10-Q of Tribune Media Company, filed on August 9, 2018).
10.34§s
Tribune Media Company Executive Incentive Plan, effective as of October 19, 2018.
10.35§s
Employment Agreement, dated as of November 30, 2018, between Tribune Media Company and Chandler Bigelow.
10.36§s
Employment Agreement, dated as of December 3, 2018, between Tribune Media Company and Lawrence Wert.
10.37§s
Consulting Agreement, dated as of November 30, 2018, between Tribune Media Company and Edward Lazarus.
   
21.1s
 
Subsidiaries of the Registrant.Registrant
   
23.1s
 
Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm
   
23.2s
 
Consent of Deloitte & TouchePricewaterhouseCoopers LLP (regarding Television Food Network, G.P.)
   
23.3s
Consent of Deloitte & Touche LLP (regarding Television Food Network, G.P.)

Exhibit No.Description
31.1s
 
Certification Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934
   
31.2s
 
Certification Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934
   
32.1s
 
Section 1350 Certification
   
32.2s
 
Section 1350 Certification
   
99.1s
 
Television Food Network, G.P. Consolidated Financial Statements
   
101.INS XBRL Instance Document
   
101.SCH XBRL Taxonomy Extension Schema
   
101.CAL XBRL Taxonomy Extension Calculation Linkbase
   
101.LAB XBRL Taxonomy Extension Label Linkbase
   
101.PRE XBRL Taxonomy Extension Presentation Linkbase
   
101.DEF XBRL Taxonomy Extension Definition Linkbase
 
 
§Constitutes a compensatory plan or arrangement.
sFiled herein
ITEM 16. FORM 10-K SUMMARY
None

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on March 1, 2018.2019.
 
TRIBUNE MEDIA COMPANY
  
By:/s/ Peter M. Kern
Name:Peter M. Kern
Title:Chief Executive Officer, Director
Pursuant to the requirements of the Securities Act of 1934, this report has been signed by the following persons on behalf of the registrant in the capacities and on the dates indicated.
Signature Title Date
     
/s/ Peter M. Kern 
Chief Executive Officer, Director
(Principal Executive Officer)
 March 1, 20182019
Peter M. Kern    
     
/s/ Chandler Bigelow 
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
 March 1, 20182019
Chandler Bigelow    
     
/s/ Brian F. Litman 
Senior Vice President, Controller and Chief Accounting Officer
(Principal Accounting Officer)
 March 1, 20182019
Brian F. Litman    
     
/s/ Craig A. Jacobson Director March 1, 20182019
Craig A. Jacobson    
     
/s/ Ross Levinsohn Director March 1, 20182019
Ross Levinsohn    
     
/s/ Peter E. Murphy Director March 1, 20182019
Peter E. Murphy    
     
/s/ Laura R. Walker Director March 1, 20182019
Laura R. Walker    

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 Page
Report of Independent Registered Public Accounting Firm
F-2
Consolidated Statements of Operations for each of the three years in the period ended December 31, 20172018
F-4
Consolidated Statements of Comprehensive Income (Loss) for each of the three years in the period ended December 31, 20172018
F-5
Consolidated Balance Sheets at December 31, 20172018 and December 31, 20162017
F-6
Consolidated Statements of Shareholders’ Equity (Deficit) for each of the three years in the period ended December 31, 20172018
F-8
Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 20172018
F-9
Notes to Consolidated Financial Statements 
Note 1:Basis of Presentation and Significant Accounting Policies
F-11
Note 2:Discontinued Operations
F-25
Note 3:Proceedings Under Chapter 11
F-28
Note 4:Acquisitions
F-39
Note 5:Changes in Operations and Non-Operating Items
F-41F-27
Note 6:4:Real Estate Sales and Assets Held for Sale
F-42F-29
Note 7:5:Goodwill, Other Intangible Assets and Intangible Liabilities
F-44F-30
Note 6:Investments
F-33
Note 7:Debt
F-38
Note 8:InvestmentsFair Value Measurements
F-47F-43
Note 9:Debt
F-53
Note 10:Fair Value Measurements
F-59
Note 11:Contracts Payable for Broadcast Rights
F-61F-44
Note 12:10:Commitments and Contingencies
F-61F-45
Note 13:11:Income Taxes
F-65F-50
Note 14:12:Pension and Other Retirement Plans
F-70F-55
Note 13:Capital Stock
F-61
Note 14:Stock-Based Compensation
F-64
Note 15:Capital StockEarnings Per Share
F-77F-69
Note 16:Stock-Based Compensation
F-80
Note 17:Earnings Per Share
F-86
Note 18:Accumulated Other Comprehensive (Loss) Income
F-88F-71
Note 19:Related Party Transactions
F-88
Note 20:17:Business Segments
F-89F-71
Note 21:18:Quarterly Financial Information (Unaudited)
F-91F-73
Note 22:19:Condensed Consolidating Financial Statements
F-93F-75
Note 23:20:Subsequent Events
F-104F-86

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Tribune Media Company

Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Tribune Media Company and its subsidiaries (the “Company”) as of December 31, 20172018 and 2016,2017, and the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity (deficit) and cash flows for each of the three years in the period ended December 31, 2017,2018, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2017,2018, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, based on our audits and the report of other auditors, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 20172018 and 2016,2017, and the results of theirits operations and theirits cash flows for each of the three years in the period ended December 31, 20172018 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017,2018, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
We did not audit the financial statements of Television Food Network, G.P. (“TV Food Network”), an approximate 31 percent-owned equity investment of the Company, which reflects a net investment totaling $379 millionas of and $374 million atfor the year ended December 31, 2017, and 2016, respectively,which is reflected in the consolidated financial statements of the Company as an equity method investment of $379 million as of December 31, 2017 (such amounts areamount is prior to adjustments recorded by the Company for the application of fresh-start reporting, net of amortization of basis difference, of $855 million and $905 million atas of December 31, 2017 and 2016, respectively)2017), and equity income of $191 million $172 million and $176$172 million (such amounts are prior to the amortization of basis difference of $50 million $50 million and $50 million) for each of the threetwo years in the period ended December 31, 2017, respectively.2017. Those statements were audited by other auditors whose report thereon has been furnished to us, and our opinion expressed herein, insofar as it relates to the amounts included for TV Food Network, prior to the adjustments for the application of fresh-start reporting and the amortization of basis differences, is based solely on the report of the other auditors. We audited the adjustments necessary to reflect fresh-start reporting and the amortization of basis differences in the Company’s consolidated financial statements.
Change in Accounting Principles
As discussed in Note 1 to the consolidated financial statements, the Company changed the manner in which it accounts for revenue from contracts with customers and the manner in which it accounts for net periodic benefit costs as related to pension expenses in 2018.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the Report of Management on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’sCompany’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits and the report of other auditors provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
 
/s/ PricewaterhouseCoopers LLP

Chicago, Illinois
March 1, 20182019

We have served as the Company’s auditor since at least 1916. We have not determinedbeen able to determine the specific year we began serving as auditor of the Company.

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of dollars, except for per share data)

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of dollars, except for per share data)

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of dollars, except for per share data)

Year EndedYear Ended
December 31, 2017 December 31, 2016 December 31, 2015December 31, 2018 December 31, 2017 December 31, 2016
Operating Revenues          
Television and Entertainment          
Advertising$1,225,900
 $1,374,571
 $1,303,220
$1,315,769
 $1,225,900
 $1,374,571
Retransmission revenue and carriage fees540,244
 455,768
 368,484
632,846
 540,244
 455,768
Other69,279
 79,557
 80,838
50,063
 69,279
 79,557
Total1,835,423
 1,909,896
 1,752,542
1,998,678
 1,835,423
 1,909,896
Other13,536
 38,034
 49,425
11,056
 13,536
 38,034
Total operating revenues1,848,959
 1,947,930
 1,801,967
2,009,734
 1,848,959
 1,947,930
Operating Expenses          
Programming604,068
 515,738
 535,799
489,063
 604,068
 515,738
Direct operating expenses391,770
 390,595
 376,383
401,366
 391,770
 390,595
Selling, general and administrative550,193
 592,220
 543,065
567,798
 573,008
 620,422
Depreciation56,314
 58,825
 64,554
54,206
 56,314
 58,825
Amortization166,679
 166,664
 166,404
166,715
 166,679
 166,664
Impairments of goodwill and other intangible assets—
 3,400
 385,000
(Gain) loss on sales of real estate, net(28,533) (213,086) 97
Gain on sales of spectrum(133,197) —
 —
Gain on sales of real estate, net(24,657) (28,533) (213,086)
Total operating expenses1,740,491
 1,514,356
 2,071,302
1,521,294
 1,763,306
 1,539,158
Operating Profit (Loss)108,468
 433,574
 (269,335)
Operating Profit488,440
 85,653
 408,772
Income on equity investments, net137,362
 148,156
 146,959
169,335
 137,362
 148,156
Interest and dividend income3,149
 1,226
 720
12,224
 3,149
 1,226
Interest expense(159,387) (152,719) (148,587)(169,033) (159,387) (152,719)
Pension and other postretirement periodic benefit credit, net28,139
 22,815
 24,802
Loss on extinguishments and modification of debt(20,487) —
 (37,040)—
 (20,487) —
Gain on investment transactions, net8,131
 —
 12,173
(Loss) gain on investment transactions, net(1,113) 8,131
 —
Write-downs of investments(193,494) —
 —
—
 (193,494) —
Other non-operating gain, net71
 5,427
 7,228
68
 71
 5,427
Reorganization items, net(2,109) (1,422) (1,537)(2,400) (2,109) (1,422)
(Loss) Income from Continuing Operations Before Income Taxes(118,296) 434,242
 (289,419)
Income tax (benefit) expense(301,373) 347,202
 25,918
Income (Loss) from Continuing Operations183,077
 87,040
 (315,337)
Income (Loss) from Continuing Operations Before Income Taxes525,660
 (118,296) 434,242
Income tax expense (benefit)113,130
 (301,373) 347,202
Income from Continuing Operations412,530
 183,077
 87,040
Income (Loss) from Discontinued Operations, net of taxes (Note 2)14,420
 (72,794) (4,581)—
 14,420
 (72,794)
Net Income (Loss)$197,497
 $14,246
 $(319,918)
Net income from continuing operations attributable to noncontrolling interests(3,378) —
 —
Net Income (Loss) attributable to Tribune Media Company$194,119
 $14,246
 $(319,918)
Net Income$412,530
 $197,497
 $14,246
Net loss (income) from continuing operations attributable to noncontrolling interests41
 (3,378) —
Net Income attributable to Tribune Media Company$412,571
 $194,119
 $14,246
          
Basic Earnings (Loss) Per Common Share Attributable to Tribune Media Company from:          
Continuing Operations$2.06
 $0.96
 $(3.33)$4.71
 $2.06
 $0.96
Discontinued Operations0.17
 (0.80) (0.05)—
 0.17
 (0.80)
Net Earnings (Loss) Per Common Share$2.23
 $0.16
 $(3.38)
Net Earnings Per Common Share$4.71
 $2.23
 $0.16
          
Diluted Earnings (Loss) Per Common Share Attributable to Tribune Media Company from:          
Continuing Operations$2.04
 $0.96
 $(3.33)$4.67
 $2.04
 $0.96
Discontinued Operations0.16
 (0.80) (0.05)—
 0.16
 (0.80)
Net Earnings (Loss) Per Common Share$2.20
 $0.16
 $(3.38)
     
Regular dividends declared per common share$1.00
 $1.00
 $0.75
     
Special dividends declared per common share$5.77
 $—
 $6.73
Net Earnings Per Common Share$4.67
 $2.20
 $0.16

See Notes to Consolidated Financial Statements

F-4

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands of dollars)

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands of dollars)

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands of dollars)

Year EndedYear Ended
December 31, 2017 December 31, 2016 December 31, 2015December 31, 2018 December 31, 2017 December 31, 2016
Net Income (Loss)$197,497
 $14,246
 $(319,918)
Net Income$412,530
 $197,497
 $14,246
Less: Income (Loss) from Discontinued Operations, net of taxes14,420
 (72,794) (4,581)—
 14,420
 (72,794)
Net Income (Loss) from Continuing Operations183,077
 87,040
 (315,337)
Income from Continuing Operations412,530
 183,077
 87,040
          
Other Comprehensive Income (Loss) from Continuing Operations, net of taxes          
Pension and other post-retirement benefit items:          
Change in unrecognized benefit plan gains and losses arising during the period, net of taxes of $6,725, $(4,717), and $(5,176), respectively19,231
 (7,316) (8,032)
Adjustment for previously unrecognized benefit plan gains and losses included in net income, net of taxes of $(103), $(114) and $(25), respectively(160) (176) (36)
Change in unrecognized benefit plan gains and losses arising during the period, net of taxes of $(16,907), $6,725 and $(4,717), respectively(48,752) 19,231
 (7,316)
Adjustment for previously unrecognized benefit plan gains and losses included in net income, net of taxes of $(58), $(103) and $(114), respectively(165) (160) (176)
Change in unrecognized benefit plan gains and losses, net of taxes19,071
 (7,492) (8,068)(48,917) 19,071
 (7,492)
Marketable securities:          
Changes in unrealized holding gains and losses arising during the period, net of taxes of $(60), $604 and $(2,133), respectively(95) 936
 (3,308)
Changes in unrealized holding gains and losses arising during the period, net of taxes of $(60) and $604, respectively—
 (95) 936
Adjustment for gain on investment sales included in net income net of taxes of $(1,921)(2,980) —
 —
—
 (2,980) —
Change in marketable securities, net of taxes(3,075) 936
 (3,308)—
 (3,075) 936
Cash flow hedging instruments:          
Unrealized gains and losses, net of taxes of $(3,054)(3,591) —
 —
Gains and losses reclassified to net income, net of taxes of $2,1273,298
 —
 —
Unrealized gains and losses, net of taxes of $1,525 and $(3,054), respectively4,397
 (3,591) —
Gains and losses reclassified to net income, net of taxes of $372 and $2,127, respectively1,074
 3,298
 —
Change in unrecognized gains and losses on cash flow hedging instruments, net of taxes(293) —
 —
5,471
 (293) —
Foreign currency translation adjustments:          
Change in foreign currency translation adjustments, net of taxes of $2,774, $(1,545), and $(1,458), respectively6,247
 (2,362) (3,519)
Change in foreign currency translation adjustments, net of taxes of $1,089, $2,774 and $(1,545), respectively871
 6,247
 (2,362)
Other Comprehensive Income (Loss) from Continuing Operations, net of taxes
21,950

(8,918)
(14,895)(42,575)
21,950

(8,918)
Comprehensive Income (Loss) from Continuing Operations, net of taxes205,027
 78,122
 (330,232)
Comprehensive Income from Continuing Operations, net of taxes369,955
 205,027
 78,122
Comprehensive Income (Loss) from Discontinued Operations, net of taxes26,191
 (74,642) (14,161)—
 26,191
 (74,642)
Comprehensive Income (Loss)$231,218
 $3,480
 $(344,393)
Comprehensive income attributable to noncontrolling interests(3,378) —
 —
Comprehensive Income (Loss) attributable to Tribune Media Company$227,840
 $3,480
 $(344,393)
Comprehensive Income$369,955
 $231,218
 $3,480
Comprehensive loss (income) attributable to noncontrolling interests41
 (3,378) —
Comprehensive Income attributable to Tribune Media Company$369,996
 $227,840
 $3,480



See Notes to Consolidated Financial Statements

F-5

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)

December 31, 2017 December 31, 2016December 31, 2018 December 31, 2017
Assets      
Current Assets      
Cash and cash equivalents$673,685
 $577,658
$1,063,041
 $673,685
Restricted cash and cash equivalents17,566
 17,566
16,607
 17,566
Accounts receivable (net of allowances of $4,814 and $12,504)420,095
 429,112
Accounts receivable (net of allowances of $4,461 and $4,814)416,938
 420,095
Broadcast rights129,174
 157,817
98,269
 129,174
Income taxes receivable18,274
 9,056
23,922
 18,274
Current assets of discontinued operations—
 62,605
Prepaid expenses20,158
 35,862
19,444
 20,158
Other14,039
 6,624
7,509
 14,039
Total current assets1,292,991
 1,296,300
1,645,730
 1,292,991
Properties      
Machinery, equipment and furniture318,891
 280,589
334,495
 318,891
Buildings and leasehold improvements171,113
 154,557
156,868
 171,113
490,004
 435,146
491,363
 490,004
Accumulated depreciation(233,387) (187,148)(266,078) (233,387)
256,617
 247,998
225,285
 256,617
Land157,298
 214,730
147,614
 157,298
Construction in progress26,380
 61,192
48,400
 26,380
Net properties440,295
 523,920
421,299
 440,295
Other Assets      
Broadcast rights133,683
 153,457
95,876
 133,683
Goodwill3,228,988
 3,227,930
3,228,601
 3,228,988
Other intangible assets, net1,613,665
 1,819,134
1,442,456
 1,613,665
Non-current assets of discontinued operations—
 608,153
Assets held for sale38,900
 17,176
—
 38,900
Investments1,281,791
 1,674,883
1,264,437
 1,281,791
Other139,015
 80,098
152,992
 139,015
Total other assets6,436,042
 7,580,831
6,184,362
 6,436,042
Total Assets (a)$8,169,328
 $9,401,051
$8,251,391
 $8,169,328


See Notes to Consolidated Financial Statements

F-6

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands of dollars, except for share and per share data)

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands of dollars, except for share and per share data)

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands of dollars, except for share and per share data)

December 31, 2017 December 31, 2016December 31, 2018 December 31, 2017
Liabilities and Shareholders’ Equity      
Current Liabilities      
Accounts payable$48,319
 $60,553
$44,897
 $48,319
Debt due within one year (net of unamortized discounts and debt issuance costs of $7,917)—
 19,924
Income taxes payable36,252
 21,166
9,973
 36,252
Employee compensation and benefits71,759
 77,123
79,482
 71,759
Contracts payable for broadcast rights253,244
 241,255
232,687
 253,244
Deferred revenue11,942
 13,690
12,508
 11,942
Interest payable30,525
 30,305
30,086
 30,525
Current liabilities of discontinued operations—
 54,284
Deferred spectrum auction proceeds (Note 6)172,102
 —
Deferred spectrum auction proceeds (Note 4)—
 172,102
Other30,124
 32,553
42,160
 30,124
Total current liabilities654,267
 550,853
451,793
 654,267
Non-Current Liabilities      
Long-term debt (net of unamortized discounts and debt issuance costs of $36,332 and $38,830)2,919,185
 3,391,627
Long-term debt (net of unamortized discounts and debt issuance costs of $29,434 and $36,332)2,926,083
 2,919,185
Deferred income taxes508,174
 984,248
573,924
 508,174
Contracts payable for broadcast rights300,420
 314,840
233,275
 300,420
Pension obligations, net396,875
 444,401
380,322
 396,875
Postretirement medical, life and other benefits9,328
 11,385
8,298
 9,328
Other obligations163,899
 62,700
154,599
 163,899
Non-current liabilities of discontinued operations—
 95,314
Total non-current liabilities4,297,881
 5,304,515
4,276,501
 4,297,881
Total Liabilities (a)4,952,148
 5,855,368
4,728,294
 4,952,148
Commitments and Contingent Liabilities (Note 12)


 

   
Commitments and Contingent Liabilities (Note 10)


 

   
Shareholders’ Equity      
Preferred stock ($0.001 par value per share)      
Authorized: 40,000,000 shares; No shares issued and outstanding at December 31, 2017 and at December 31, 2016—
 —
Authorized: 40,000,000 shares; No shares issued and outstanding at December 31, 2018 and at December 31, 2017—
 —
Class A Common Stock ($0.001 par value per share)      
Authorized: 1,000,000,000 shares; 101,429,999 shares issued and 87,327,814 shares outstanding at December 31, 2017; 100,416,516 shares issued and 86,314,063 shares outstanding at December 31, 2016101
 100
Authorized: 1,000,000,000 shares; 101,790,837 shares issued and 87,688,652 shares outstanding at December 31, 2018; 101,429,999 shares issued and 87,327,814 shares outstanding at December 31, 2017102
 101
Class B Common Stock ($0.001 par value per share)      
Authorized: 1,000,000,000 shares; Issued and outstanding: 5,557 shares at December 31, 2017 and 5,605 shares at December 31, 2016—
 —
Treasury stock, at cost: 14,102,185 shares at December 31, 2017 and 14,102,453 shares at December 31, 2016(632,194) (632,207)
Authorized: 1,000,000,000 shares; Issued and outstanding: 5,557 shares at December 31, 2018 and December 31, 2017—
 —
Treasury stock, at cost: 14,102,185 shares at December 31, 2018 and December 31, 2017(632,194) (632,194)
Additional paid-in-capital4,011,530
 4,561,760
4,031,233
 4,011,530
Retained deficit(114,240) (308,105)
Retained earnings (deficit)223,734
 (114,240)
Accumulated other comprehensive loss(48,061) (81,782)(104,967) (48,061)
Total Tribune Media Company shareholders’ equity3,217,136
 3,539,766
3,517,908
 3,217,136
Noncontrolling interests44
 5,917
5,189
 44
Total shareholders’ equity3,217,180
 3,545,683
3,523,097
 3,217,180
Total Liabilities and Shareholders’ Equity$8,169,328
 $9,401,051
$8,251,391
 $8,169,328
 
(a)The Company’s consolidated total assets as of December 31, 20172018 and December 31, 20162017 include total assets of variable interest entities (“VIEs”) of $81$73 million and $97$81 million, respectively, which can only be used to settle the obligations of the VIEs. The Company’s consolidated total liabilities as of December 31, 20172018 and December 31, 20162017 include total liabilities of the VIEs of $29$28 million and $3$29 million, respectively, for which the creditors of the VIEs have no recourse to the Company (see Note 1).

See Notes to Consolidated Financial Statements

F-7

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT)
(In thousands)
TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT)
(In thousands)
TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT)
(In thousands)
    Accumulated Other Comprehensive Income (Loss) Additional Paid-In Capital     Common Stock    Accumulated Other Comprehensive Income (Loss) Additional Paid-In Capital     Common Stock
  Retained Earnings (Deficit)     Class A Class B  Retained Earnings (Deficit)     Class A Class B
Total Accumulated Other Comprehensive Income (Loss)Additional Paid-In CapitalTreasury Stock Non-controlling Interests 
Amount
(at Cost)
 Shares 
Amount
 (at Cost)
 SharesTotal Accumulated Other Comprehensive Income (Loss)Additional Paid-In CapitalTreasury Stock Non-controlling Interests 
Amount
(at Cost)
 Shares 
Amount
 (at Cost)
 Shares
Balance at December 28, 2014$5,195,431
 $718,218
 $(46,541)$4,591,470
) $—
 $96
 95,708
 $2
 2,438
Comprehensive loss:               
Net loss(319,918) (319,918) —
 —
 —
 —
 —
 —
 —
 —
Other comprehensive loss, net of taxes(24,475)   (24,475) —
 —
 —
 —
 —
 —
 —
Comprehensive loss(344,393)   —
 —
 —
 —
 —
 —
 —
 —
Special dividends declared to shareholders and warrant holders, $6.73 per share(648,644) (648,644) —
 —
 —
 —
 —
 —
 —
 —
Regular dividends declared to shareholders and warrant holders, $0.75 per share(71,275) (72,007) —
 732
 —
 —
 —
 —
 —
 —
Conversion of Class B Common Stock to Class A Common Stock—
   —
   —
 —
 2
 2,432
 (2) (2,432)
Warrant exercises—
   —
 (2) —
 —
 2
 1,719
 —
 —
Stock-based compensation32,547
   —
 32,547
 —
 —
 —
 —
 —
 —
Net share settlements of stock-based awards(4,251)   —
 (4,251) —
 —
 —
 156
 —
 —
Change in excess tax benefits from stock-based awards(878)   —
 (878) —
 —
 —
 —
 —
 —
Common stock repurchases(332,339)   —
 —
 (332,339) —
 —
 —
 —
 —
Contributions from noncontrolling interests5,524
   —
 —
 —
 5,524
 —
 —
 —
 —
Balance at December 31, 2015$3,831,722
 $(322,351) $(71,016) $4,619,618
 $(400,153) $5,524
 $100
 100,015
 $—
 6
$3,831,722
 $(322,351) $(71,016) $4,619,618
 $(400,153) $5,524
 $100
 100,015
 $—
 6
Comprehensive income:                                      
Net income14,246
 14,246
 —
 —
 —
 —
 —
 —
 —
 —
14,246
 14,246
 —
 —
 —
 —
 —
 —
 —
 —
Other comprehensive loss, net of taxes(10,766) —
 (10,766) —
 —
 —
 —
 —
 —
 —
(10,766) —
 (10,766) —
 —
 —
 —
 —
 —
 —
Comprehensive income3,480
 —
 —
 —
 —
 —
 —
 —
 —
 —
3,480
 —
 —
 —
 —
 —
 —
 —
 —
 —
Regular dividends declared to shareholders and warrant holders, $1.00 per share(90,296) —
 —
 (90,296) —
 —
 —
 —
 —
 —
(90,296) —
 —
 (90,296) —
 —
 —
 —
 —
 —
Warrant exercises—
 —
 —
 —
 —
 —
 —
 163
 —
 —
—
 —
 —
 —
 —
 —
 —
 163
 —
 —
Stock-based compensation37,002
 —
 —
 37,002
 —
 —
 —
 —
 —
 —
37,002
 —
 —
 37,002
 —
 —
 —
 —
 —
 —
Net share settlements of stock-based awards(4,553) —
 —
 (4,564) 11
 —
 —
 238
 —
 —
(4,553) —
 —
 (4,564) 11
 —
 —
 238
 —
 —
Common stock repurchases(232,065) —
 —
 —
 (232,065) —
 —
 —
 —
 —
(232,065) —
 —
 —
 (232,065) —
 —
 —
 —
 —
Contributions from noncontrolling interest393
 —
 —
 —
 —
 393
 —
 —
 —
 —
393
 —
 —
 —
 —
 393
 —
 —
 —
 —
Balance at December 31, 2016$3,545,683
 $(308,105) $(81,782) $4,561,760
 $(632,207) $5,917
 $100
 100,416
 $—
 6
$3,545,683
 $(308,105) $(81,782) $4,561,760
 $(632,207) $5,917
 $100
 100,416
 $—
 6
Comprehensive income:                                      
Net income197,497
 194,119
 —
 —
 —
 3,378
 —
 —
 —
 —
197,497
 194,119
 —
 —
 —
 3,378
 —
 —
 —
 —
Other comprehensive income, net of taxes33,721
 —
 33,721
 —
 —
 —
 —
 —
 —
 —
33,721
 —
 33,721
 —
 —
 —
 —
 —
 —
 —
Comprehensive income231,218
 —
 —
 —
 —
 —
 —
 —
 —
 —
231,218
 —
 —
 —
 —
 —
 —
 —
 —
 —
Special dividends declared to shareholders and warrant holders, $5.77 per share(499,107) —
 —
 (499,107) —
 —
 —
 —
 —
 —
(499,107) —
 —
 (499,107) —
 —
 —
 —
 —
 —
Regular dividends declared to shareholders and warrant holders, $1.00 per share(87,229) —
 —
 (87,229) —
 —
 —
 —
 —
 —
(87,229) —
 —
 (87,229) —
 —
 —
 —
 —
 —
Warrant exercises—
 —
 —
 —
 —
 —
 —
 98
 —
 —
—
 —
 —
 —
 —
 —
 —
 98
 —
 —
Stock-based compensation33,159
 —
 —
 33,159
 —
 —
 —
 —
 —
 —
33,159
 —
 —
 33,159
 —
 —
 —
 —
 —
 —
Net share settlements of stock-based awards2,543
 —
 —
 2,529
 13
 —
 1
 916
 —
 —
2,543
 —
 —
 2,529
 13
 —
 1
 916
 —
 —
Cumulative effect of a change in accounting principle164
 (254) —
 418
 —
 —
 —
 —
 —
 —
164
 (254) —
 418
 —
 —
 —
 —
 —
 —
Distributions to noncontrolling interests, net(9,251) —
 —
 —
 —
 (9,251) —
 —
 —
 —
(9,251) —
 —
 —
 —
 (9,251) —
 —
 —
 —
Balance at December 31, 2017$3,217,180
 $(114,240) $(48,061) $4,011,530
 $(632,194) $44
 $101
 101,430
 $—
 6
$3,217,180
 $(114,240) $(48,061) $4,011,530
 $(632,194) $44
 $101
 101,430
 $—
 6
Comprehensive income:                   
Net income412,530
 412,571
 —
 —
 —
 (41) —
 —
 —
 —
Other comprehensive loss, net of taxes(42,575) —
 (42,575) —
 —
 —
 —
 —
 —
 —
Comprehensive income369,955
 —
 —
 —
 —
 —
 —
 —
 —
 —
Regular dividends declared to shareholders and warrant holders, $1.00 per share(87,709) (88,928) —
 1,219
 —
 —
 —
 —
 —
 —
Stock-based compensation23,033
 —
 —
 23,033
 —
 —
 —
 —
 —
 —
Net share settlements of stock-based awards(4,548) —
 —
 (4,549) —
 —
 1
 361
 —
 —
Cumulative effect of a change in accounting principle (ASU 2018-02)—
 14,331
 (14,331) —
 —
 —
 —
 —
 —
 —
Contributions from noncontrolling interests, net5,186
 —
 —
 —
 —
 5,186
 —
 —
 —
 —
Balance at December 31, 2018$3,523,097
 $223,734
 $(104,967) $4,031,233
 $(632,194) $5,189
 $102
 101,791
 $—
 6



See Notes to Consolidated Financial Statements

F-8

TRIBUNE MEDIA COMPANY AND SUBIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of dollars)

TRIBUNE MEDIA COMPANY AND SUBIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of dollars)

TRIBUNE MEDIA COMPANY AND SUBIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of dollars)

Year EndedYear Ended
December 31, 2017 December 31, 2016 December 31, 2015December 31, 2018 December 31, 2017 December 31, 2016
Operating Activities          
Net income (loss)$197,497
 $14,246
 $(319,918)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:     
Net income$412,530
 $197,497
 $14,246
Adjustments to reconcile net income to net cash provided by operating activities:     
Stock-based compensation32,933
 37,189
 32,493
23,033
 32,933
 37,189
Pension credit, net of contributions(22,047) (24,110) (29,417)
Pension credit and contributions(82,554) (22,047) (24,110)
Depreciation56,314
 72,409
 74,289
54,206
 56,314
 72,409
Amortization of contract intangible assets and liabilities869
 (10,566) (14,980)881
 869
 (10,566)
Amortization of other intangible assets166,679
 196,663
 195,230
166,715
 166,679
 196,663
Impairments of goodwill and other intangible assets—
 3,400
 385,000
Impairments of other intangible assets3,100
 —
 3,400
Income on equity investments, net(137,362) (148,156) (146,959)(169,335) (137,362) (148,156)
Distributions from equity investments198,124
 170,527
 169,879
171,591
 198,124
 170,527
Non-cash loss on extinguishments and modification of debt8,258
 —
 33,480
—
 8,258
 —
Original issue discount payments(7,360) —
 (6,158)—
 (7,360) —
Write-downs of investments193,494
 —
 —
—
 193,494
 —
Amortization of debt issuance costs and original issue discount7,875
 11,172
 12,258
7,509
 7,875
 11,172
Gain on sales of spectrum (Note 10)(133,197) —
 —
Gain on sale of business(33,492) —
 —
—
 (33,492) —
Gain on investment transactions, net(8,131) —
 (12,173)
Loss (gain) on investment transactions, net1,113
 (8,131) —
Impairments of real estate2,399
 15,102
 6,650
—
 2,399
 15,102
(Gain) loss on sales of real estate(28,533) (213,086) 97
Gain on sales of real estate, net(24,657) (28,533) (213,086)
Other non-operating gain, net(71) (5,427) (6,183)(68) (71) (5,427)
Change in excess tax benefits from stock-based awards—
 —
 868
Changes in working capital items, excluding effects from acquisitions:     
Changes in working capital items:     
Accounts receivable, net10,638
 (998) (23,444)1,442
 10,638
 (998)
Prepaid expenses and other current assets10,310
 18,171
 (36,997)7,244
 10,310
 18,171
Accounts payable(8,736) 6,589
 (15,302)(4,401) (8,736) 6,589
Employee compensation and benefits, accrued expense and other current liabilities(23,927) (7,515) 38,062
19,682
 (23,927) (7,515)
Deferred revenue(2,423) (2,843) 9,541
570
 (2,423) (2,843)
Income taxes6,175
 51,296
 (272,102)(31,781) 6,175
 51,296
Change in broadcast rights, net of liabilities45,898
 (15,427) 100,116
(18,764) 45,898
 (15,427)
Deferred income taxes (Note 13)(478,637) 95,035
 (140,075)
Deferred income taxes79,779
 (478,637) 95,035
Change in non-current obligations for uncertain tax positions791
 (11,276) (931)(1,912) 791
 (11,276)
Other, net34,967
 31,768
 (7,380)(13,521) 35,050
 31,770
Net cash provided by operating activities222,502
 284,163
 25,944
469,205
 222,585
 284,165
     
Investing Activities     
Capital expenditures(76,188) (66,832) (99,659)
Spectrum repack reimbursements11,276
 984
 —
Net proceeds from the sale of business—
 554,487
 —
Proceeds from FCC spectrum auction—
 172,102
 —
Proceeds from sales of real estate and other assets59,153
 144,464
 507,692
Proceeds from sales of investments15,232
 148,321
 —
Distributions from equity investment—
 3,768
 —
Other, net1,501
 (4,260) (5,993)
Net cash provided by investing activities10,974
 953,034
 402,040

See Notes to Consolidated Financial Statements

F-9

TRIBUNE MEDIA COMPANY AND SUBIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(In thousands of dollars)

 Year Ended
 December 31, 2017 December 31, 2016 December 31, 2015
Investing Activities     
Capital expenditures(66,832) (99,659) (89,084)
Investments(5,065) (5,993) (23,042)
Acquisitions, net of cash acquired—
 —
 (74,959)
Net proceeds from the sale of business (Note 2)557,793
 —
 —
Proceeds from FCC spectrum auction (Note 6)172,102
 —
 —
Sale of partial interest of equity method investment (Note 8)142,552
 —
 —
Proceeds from sales of real estate and other assets144,464
 507,692
 4,930
Proceeds from sales of investments5,769
 —
 44,982
Distributions from equity investment3,768
 —
 10,328
Other1,789
 297
 1,112
Net cash provided by (used in) investing activities956,340
 402,337
 (125,733)
      
Financing Activities     
Long-term borrowings202,694
 —
 1,100,000
Repayments of long-term debt(703,527) (27,842) (1,114,262)
Long-term debt issuance costs(1,689) (736) (20,202)
Payments of dividends(586,336) (90,296) (719,919)
Tax withholdings related to net share settlements of share-based awards(8,774) (4,553) (4,421)
Proceeds from stock option exercises11,317
 —
 166
Common stock repurchases—
 (232,065) (339,942)
(Distributions to) contributions from noncontrolling interests, net(9,251) 393
 5,524
Settlements of contingent consideration, net—
 (3,636) 1,174
Change in excess tax benefits from stock-based awards—
 —
 (868)
Net cash used in financing activities(1,095,566) (358,735) (1,092,750)
      
Net Increase (Decrease) in Cash and Cash Equivalents83,276
 327,765
 (1,192,539)
Cash and cash equivalents, beginning of year590,409
 262,644
 1,455,183
Cash and cash equivalents, end of year$673,685
 $590,409
 $262,644
      
Cash and Cash Equivalents are Comprised of:     
Cash and cash equivalents$673,685
 $577,658
 $247,820
Cash and cash equivalents classified as discontinued operations—
 12,751
 14,824
Cash and cash equivalents, end of year$673,685
 $590,409
 $262,644
      
Supplemental Schedule of Cash Flow Information     
Cash paid during the period for:     
Interest$152,401
 $160,200
 $130,311
Income taxes, net of refunds$182,509
 $265,886
 $434,720
TRIBUNE MEDIA COMPANY AND SUBIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(In thousands of dollars)

 Year Ended
 December 31, 2018 December 31, 2017 December 31, 2016
      
Financing Activities     
Long-term borrowings—
 202,694
 —
Repayments of long-term debt—
 (703,527) (27,842)
Long-term debt issuance costs—
 (1,689) (736)
Payments of dividends(87,709) (586,336) (90,296)
Tax withholdings related to net share settlements of share-based awards(6,386) (8,774) (4,553)
Proceeds from stock option exercises1,838
 11,317
 —
Common stock repurchases—
 —
 (232,065)
Contributions from (distributions to) noncontrolling interests, net475
 (9,251) 393
Settlements of contingent consideration, net—
 —
 (3,636)
Net cash used in financing activities(91,782) (1,095,566) (358,735)
      
Net Increase in Cash, Cash Equivalents and Restricted Cash388,397
 80,053
 327,470
Cash, cash equivalents and restricted cash, beginning of year (1)691,251
 611,198
 283,728
Cash, cash equivalents and restricted cash, end of year$1,079,648
 $691,251
 $611,198
      
Cash, Cash Equivalents and Restricted Cash are Comprised of:     
Cash and cash equivalents$1,063,041
 $673,685
 $577,658
Cash and cash equivalents classified as discontinued operations—
 —
 12,751
Restricted cash and cash equivalents16,607
 17,566
 17,566
Restricted cash and cash equivalents classified as discontinued operations—
 —
 3,223
Total cash, cash equivalents and restricted cash$1,079,648
 $691,251
 $611,198
      
Supplemental Schedule of Cash Flow Information     
Cash paid during the period for:     
Interest$161,838
 $152,401
 $160,200
Income taxes, net of refunds$66,020
 $182,509
 $265,886

(1)Cash, cash equivalents and restricted cash at the beginning of the year ended December 31, 2016 of $284 million are comprised of $265 million of cash, cash equivalents and restricted cash from continuing operations as reflected in the Company’s unaudited Condensed Consolidated Balance Sheets and $18 million of cash, cash equivalents and restricted cash reflected in total assets of discontinued operations.


See Notes to Consolidated Financial Statements

F-10


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1: BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies of the Company, as summarized below, conform with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and reflect practices appropriate to the Company’s businesses.
Nature of Operations and Reclassifications—Tribune Media Company and its subsidiaries (the “Company”) is a diversified media and entertainment company. The Company’s business consists of Television and Entertainment operations and the management of certain owned real estate assets. The Company also holds a variety of investments, including an equity method investmentsinvestment in Television Food Network, G.P. (“TV Food Network”) and CareerBuilder, LLC (through our investment in Camaro Parent, LLC) (“CareerBuilder”) and a cost method investment in New Cubs LLC (as defined and described in Note 8).
Television and Entertainment, a reportable segment, provides audiences across the country with news, entertainment and sports programming on Tribune Broadcasting’s 42 local television stations (that are either owned by the Company or owned by others but to which the Company provides certain services) and their websites, a national general entertainment cable network (WGN America), a sports betting information website (Covers Media Group) (“Covers”), a radio station and other digital assets.
The Company reports and includes under Corporate and Other the management of certain owned real estate assets, including revenues from leasing the Company-owned office and production facilities and any gains or losses from sales of real estate, as well as certain administrative activities associated with operating corporate office functions and managing its predominantly frozen company-sponsored defined benefit pension plans.functions.
Prior to entering into a share purchase agreement to sellthe sale of substantially all of the Digital and Data business on December 19, 2016January 31, 2017 (the “Gracenote Sale,” as further defined and described in Note 2), the Company was also engaged in providing innovative technology and services that collected, created and distributed video, music, sports and entertainment data.
Prior to the Gracenote Sale, which was completed on January 31, 2017, the Company reported its operations through the following reportable segments: Television and Entertainment and Digital and Data. The Company’s Digital and Data reportable segment consisted of several businesses driven by the Company’s expertise in collection, creation and distribution of data and innovation in unique services and recognition technology that used data, including Gracenote Video, Gracenote Music and Gracenote Sports.
The historical results of operations for the businesses included in the Gracenote Sale are presented in discontinued operations for all periods presented (see Note 2).the years ended December 31, 2017 and December 31, 2016. Beginning in the fourth quarter of 2016, the Television and Entertainment reportable segment includes the operations of Covers, Media Group (“Covers”), a business-to-consumer website, which was previously included in the Digital and Data reportable segment. Beginning in fiscal 2015, the Television and Entertainment reportable segment includes the Company’s Screener (formerly Zap2it.com) entertainment content business, which was also previously included in the Digital and Data reportable segment. Certain previously reported amounts have been reclassified to conform to the current presentation; the impact of this reclassification was immaterial.
SinclairNexstar Merger Agreement—On May 8, 2017,November 30, 2018, the Company entered into an Agreement and Plan of Merger (the “Merger“Nexstar Merger Agreement”) with Sinclair BroadcastNexstar Media Group, Inc. (“Sinclair”Nexstar”), and Titan Merger Sub, Inc. (the “Nexstar Merger Sub”) providing for the acquisition by SinclairNexstar of all of the outstanding shares of the Company’s Class A common stock (“Class A Common Stock”) and Class B common stock (“Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”), by means of a merger of SamsonNexstar Merger Sub Inc., a wholly owned subsidiary of Sinclair, with and into Tribune Media Company, (the “Merger”), with Tribune Mediathe Company surviving the Mergermerger as a wholly ownedwholly-owned subsidiary of Sinclair.Nexstar (the “Nexstar Merger”).
In the Nexstar Merger, each share of the Company’s Common Stock issued and outstanding immediately prior to the effective time of the Nexstar Merger (the “Effective Time”) (other than shares held by (i) any Tribune subsidiary, Nexstar or any Nexstar subsidiary or (ii) Tribune shareholders who have not voted in favor of adopting the Nexstar Merger Agreement and who have demanded and perfected (and not validly withdrawn or waived) their appraisal rights in compliance with Section 262 of the DGCL) will be converted into the right to receive (i) $35.00a cash payment of $46.50 in cash (the “base merger consideration”), plus, if the Nexstar Merger closes after August 31, 2019 (the “Adjustment Date”), an additional amount in cash equal to (a) (i) $0.009863 multiplied by (ii) the number of calendar days elapsed after Adjustment Date to and including the date on which the Nexstar Merger closes, minus (b) the amount of any dividends declared by the Company after the Adjustment Date with a record date prior to the date on which the Nexstar Merger closes, in each case, without interest and less any required withholding taxes (such amount, the “Cash Consideration”), and (ii) 0.2300 (the “Exchange Ratio”) of a validly issued, fully paid and nonassessable share of Class A common“additional per


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stock, $0.01 par value per share (the “Sinclair Common Stock”)consideration”, of Sinclair (the “Stock Consideration,” and together with the Cash Consideration,base merger consideration, the “Merger“Nexstar Merger Consideration”). The Merger Agreement provides that each holderadditional per share consideration will not be less than zero.
Each option to purchase shares of anCommon Stock outstanding Tribune Media Company stock option (whetheras of immediately prior to the Effective Time, whether or not vested)vested or exercisable, will be cancelled and converted into the right to receive, for each share of the Company’s Common Stock subject to such stock option, a cash payment equal to the excess, if any, of the value of the Nexstar Merger Consideration (with the Stock Consideration valued over a specified period prior to the consummation of the Merger) and the exercise price per share of such stock option, without any interest and less any required withholding taxes.subject to all applicable withholding. Any stock option that has an exercise price per share that is greater than or equal to the Nexstar Merger Consideration will be cancelled for no consideration or payment. Each outstanding Tribune Media Companyaward of restricted stock unit awardunits outstanding as of immediately prior to the Effective Time, whether or not vested, will immediately vest and be cancelled and converted into the right to receive a cash-settled restricted stock unit award reflecting acash payment equal to the product of the total number of shares of Sinclair Common Stock underlying such restricted stock unit multiplied by the Nexstar Merger Consideration, without any interest and subject to all applicable withholding (the “RSU Consideration”), except that each award of restricted stock units granted to an employee on or after December 1, 2018 (other than restricted stock units required to be granted pursuant to employment agreements or offer letters) (“Annual Tribune RSUs”) that has vested as of the Effective Time of the Nexstar Merger will be cancelled and converted into the right to receive the RSU Consideration and any Annual Tribune RSUs that remain unvested as of the Effective Time of the Nexstar Merger will be cancelled for no consideration or payment. Each award of performance stock units outstanding as of immediately prior to the Effective Time, whether or not vested, will immediately vest (with performance conditions for each open performance period as of the closing date deemed achieved at the applicable “target” level performance for such performance stock units) and be cancelled and converted into the right to receive a cash payment equal to the product of the total number of shares of the Company’s Common Stock underlying such performance stock units multiplied by the Nexstar Merger Consideration, without any interest and subject to suchall applicable withholding. Each outstanding award multiplied by a ratio equal to (a) the sum of (i) the Exchange Ratio plus (ii) the Cash Consideration divided by (b) the trading valuedeferred stock units outstanding as of the Sinclair Common Stock over a specified periodimmediately prior to the consummationEffective Time will be cancelled and converted into the right to receive a cash payment equal to the product of the Merger. Otherwise, each such award will continue to be subject to the same terms and conditions as such award was subject prior to the Merger. Each outstanding Tribune Media Company performance stock unit (other than supplemental performance stock units) will automatically become vested at “target” level of performance and will be entitled to receive an amount of cash equal to (a) thetotal number of shares of the Company’s Common Stock that are subject tounderlying such unit as so vested multiplied by (b) the sum of (i) the Cash Consideration and (ii) the Exchange Ratiodeferred stock units multiplied by the trading value of the Sinclair Common Stock over a specified period prior to the consummation of theNexstar Merger without interest and less any required withholding taxes. Each holder of an outstanding Tribune Media Company supplemental performance stock unit that will vest in accordance with its existing terms will be entitled to receive an amount of cash equal to (a) the number of shares of the Company’s Common Stock that are subject to such unit as so vested multiplied by (b) the sum of (i) the Cash Consideration, and (ii) the Exchange Ratio multiplied by the trading value of the Sinclair Common Stock over a specified period prior to the consummation of the Merger without interest and less any required withholding taxes. Any supplemental performance stock units that do not vest in accordance with their terms will be canceled without any consideration. Each holder of an outstanding Tribune Media Company deferred stock unit will be entitled to receive an amount of cash equal to (a) the number of shares of the Company’s Common Stock that are subject to such unit multiplied by (b) the sum of (i) the Cash Consideration and (ii) the Exchange Ratio multiplied by the trading value of the Sinclair Common Stock over a specified period prior to the consummation of the Merger without interest and subject to all applicable withholding. Each unexercised warrant to purchase shares of Common Stock outstanding Tribune Media Company Warrantas of immediately prior to the Effective Time will becomebe assumed by Nexstar and converted into a warrant exercisable at its current exercise price, for the Nexstar Merger Consideration in respectwhich the shares of each shareCommon Stock underlying such warrant would have been entitled to receive upon consummation of the Company’s Common Stock subject toNexstar Merger and otherwise upon the Warrantsame terms and conditions of such warrant immediately prior to the Merger.Effective Time.
The consummation of the Nexstar Merger is subject to the satisfaction or waiver of certain importantcustomary conditions, including, among others: (i) the approvaladoption of the Nexstar Merger by holders of a majority of the Company’s stockholders,outstanding Common Stock, (ii) the receipt of approval from the Federal Communications Commission (the “FCC”) (the “FCC Approval”) and the expiration or termination of the waiting period applicable to the Nexstar Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), (the “HSR Approval”) and (iii) the effectiveness of a registration statement on Form S-4 registering the Sinclair Common Stock to be issued in connection with the Merger and no stop order or proceedings seeking the same having been initiated by the Securities and Exchange Commission (the “SEC”), (iv) the listing of the Sinclair Common Stock to be issued in the Merger on the NASDAQ Global Select Market and (v) the absence of certain legal impediments toany order or law of any governmental authority that prohibits or makes illegal the consummation of the Nexstar Merger.
On September 6, 2017, Sinclair’s registration statement on Form S-4 registering The Company’s and Nexstar’s respective obligations to consummate the Sinclair Common StockNexstar Merger are also subject to be issuedcertain additional customary conditions, including (i) the accuracy of the representations and warranties of the other party (generally subject to a “material adverse effect” standard), (ii) performance by the other party of its covenants in the Nexstar Merger was declared effective byAgreement in all material respects and (iii) with respect to Nexstar’s obligation to consummate the SEC.
On October 19, 2017, holders of a majorityNexstar Merger, since the date of the outstanding shares of the Company’s Class A Common Stock and Class B Common Stock, voting as a single class, voted on and approved theNexstar Merger Agreement, andno material adverse effect with respect to the transactions contemplated by the Merger Agreement at a duly called special meeting of Tribune Media Company shareholders.having occurred.
The applications seekingfor FCC approval of the transactions contemplated by the Merger Agreement (the “Applications”)Approval were filed on June 26, 2017, andJanuary 7, 2019. On February 14, 2019, the FCC issued a public notice of the filing of the Applications and established a comment cycle on July 6, 2017. Severalapplications which set deadlines for petitions to deny the Applications, and numerous other comments, both opposing and supporting the transaction, were filed in responseapplications, oppositions to the public notice. Sinclair and


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Tribune jointly filed an opposition to the petitions to deny on August 22, 2017 (the “Joint Opposition”). Petitioners and others filed replies to the Joint Opposition on August 29, 2017. On September 14, 2017, the FCC’s Media Bureau issued a Request for Information (“RFI”) seeking additional information regarding certain matters discussed in the Applications. Sinclair submitted a responseoppositions to the RFI on October 5, 2017. On October 18, 2017, the FCC’s Media Bureau issued a public notice pausing the FCC’s 180-day transaction review “shot-clock” for 15 dayspetitions to afford interested parties an opportunity to comment on the response to the RFI. On January 11, 2018, the FCC’s Media Bureau issued a public notice pausing the FCC’s shot-clock as of January 4, 2018 until Sinclair has filed amendments to the Applications along with divestiture applications and the FCC staff has had an opportunity to review any such submissions. deny.
On February 20, 2018, the parties filed an amendment to the Applications that, among other things, (1) requested authority under the Duopoly Rule for Sinclair to own two top four rated stations in each of three television markets and (2) identified stations (the “Divestiture Stations”) in 11 television markets that Sinclair proposes to divest in order for the Merger to comply with the Duopoly Rule and the National Television Multiple Ownership Rule. Concurrently, Sinclair filed applications proposing to place certain of the Divestiture Stations in an FCC-approved divestiture trust, if and as necessary, in order to facilitate the orderly divestiture of those stations following the consummation of the Merger.
On August 2, 2017,7, 2019, the Company received a request for additional information and documentary material, often referred to as a “second request,” from the United States Department of Justice (the “DOJ”) in connection with the Nexstar Merger Agreement. The second request was issued under the HSR Act. SinclairNexstar received a substantively identical request for additional information and documentary material from the DOJ in connection with the


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transactions contemplated by the Nexstar Merger Agreement. Consummation of the transactions contemplated by the Nexstar Merger Agreement is conditioned on expiration of the waiting period applicable under the HSR Act, among other conditions. Issuance of the second request extends the waiting period under the HSR Act until 30 days after SinclairNexstar and the Company have substantially complied with the second request, unless the waiting period is terminated earlier by the DOJ or the parties voluntarily extend the time for closing.
The parties entered into an agreement with the DOJ on September 15, 2017 (the “DOJ Timing Agreement”), by which they agreed not to consummate theNexstar Merger Agreement before December 31, 2017, or 60 days following the date on which both parties have certified compliance with the second request, whichever is later. In addition, the parties agreed to provide the DOJ with 10 calendar days noticemay be terminated at any time prior to consummating the Effective Time: (i) by mutual written consent of Nexstar and the Company; (ii) by either Nexstar or the Company (a) if the Effective Time has not occurred on or before November 30, 2019, provided that (x) if, on the initial end date, any of the conditions to the consummation of the Nexstar Merger Agreement. The DOJ Timing Agreement hasrelated to the HSR Approval or the FCC Approval have not been amended twice, on October 30, 2017, to extendsatisfied, but all other conditions the consummation of the Nexstar Merger have been satisfied or waived or capable of being satisfied, then the end date before which the parties may not consummate the Merger Agreement to January 30, 2018, and on January 27, 2018, to extend that datewill be automatically extended to February 11, 2018. The DOJ Timing Agreement thus currently provides that the parties will not consummate the Merger Agreement before February 11, 2018, or 60 days following the date on which both parties have certified compliance with the second request, whichever is later,29, 2020 and that the parties will provide the DOJ with 10 days notice before consummating the Merger Agreement.
Sinclair’s and the Company’s respective obligation to consummate the Merger are also subject to certain additional customary conditions, including (i) material accuracy of representations and warranties(y) in the Merger Agreement ofevent the other party, (ii) performance bymarketing period for the other party of its covenants indebt financing for the Merger Agreement in all material respects and (iii) since the date of the Merger Agreement, no material adverse effect with respect to the other party having occurred.
If the Merger Agreement is terminated (i) by either the Company or Sinclair because the Mergertransaction has commenced but has not occurredcompleted by the end date, the end date may be extended (or further extended) by Nexstar on one occasion in its sole discretion by providing written notice thereof to the Company at least one business day prior to the end date until the date that is four business days after the last scheduled expiration date of the marketing period (unless the failure of the Effective Time to occur before the end date was primarily due to such party’s breach of any of its obligations under the Nexstar Merger Agreement), (b) if any governmental authority of competent jurisdiction has issued an order permanently prohibiting the consummation of the Nexstar Merger and such order has become final and non-appealable (unless such order was primarily attributable to such party’s breach of the Nexstar Merger Agreement), or (c) if, after completion of the special meeting (including any adjournment or postponement thereof), the Company shareholders have not approved the adoption of the Nexstar Merger Agreement; and (iii) by either Nexstar or the Company in certain circumstances, as described belowin the Nexstar Merger Agreement.
The Company must pay Nexstar a termination fee of $135 million if Nexstar terminates the Nexstar Merger Agreement due to (a) the Company board or any committee thereof (i) withdrawing, rescinding, amending, changing, modifying or qualifying, or otherwise proposing publicly to take any of the foregoing actions in a manner adverse to Nexstar, its recommendation that the Company shareholders adopt the Nexstar Merger Agreement, (ii) failing to make such recommendation in the Company’s proxy statement, (iii) adopting, approving or recommending, or otherwise proposing publicly to adopt, approve or recommend, an alternative acquisition proposal, (iv) failing to publicly recommend against an alternative acquisition proposal that has been publicly disclosed within ten business days of Nexstar’s request and failing to reaffirm its recommendation within such period upon such request (provided that such a request may be delivered by SinclairNexstar only once with respect to each alternative acquisition proposal, with the right to make an additional request with respect to each subsequent material amendment or modification thereto), or (v) taking any action to make the provisions of any “fair price,” “moratorium,” “control share acquisition,” “business combination” or other similar anti-takeover statute or regulation inapplicable to any transaction other than the transactions contemplated by the Nexstar Merger Agreement; (b) the Company or any of its subsidiaries having entered into any agreement, other than an acceptable confidentiality agreement, with respect to an alternative acquisition proposal; or (c) the Company terminates the Nexstar Merger Agreement due to the Company board authorizing the Company to enter into an alternative acquisition agreement.
As further described in the Nexstar Merger Agreement, the Company must pay Nexstar a termination fee of $135 million (except that the termination fee of $135 million will be reduced by any previously paid amounts relating to the documented, out-of-pocket expenses of Nexstar in an amount not to exceed $15 million) if: (a) Nexstar or the Company terminates the Nexstar Merger Agreement if the Effective Time has not occurred prior to the end date of November 30, 2019, subject to an automatic extension to February 29, 2020 in certain circumstances if the only outstanding unfulfilled conditions relate to HSR Approval or FCC Approval (and an additional extension, at Nexstar’s election, if the marketing period for the debt financing for the transaction has not ended by the end date); (b) Nexstar or the Company terminates the Nexstar Merger Agreement if, after completion of the special meeting (including any adjournment or postponement thereof), the Company shareholders have not approved the adoption of the Nexstar Merger Agreement; or (c) Nexstar terminates the Nexstar Merger Agreement in respect of a


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willful breach of the Company’s covenants or agreements that would give rise to the failure of a closing condition that is incapable of being cured within a specified time period, and, in the time periods prescribed bycase of each of the Merger Agreement, andforegoing clauses, an alternative acquisition proposal has been made to the Company and publicly announced or otherwise disclosed and has not been withdrawn prior to the termination of the Nexstar Merger Agreement, the date of the special meeting (in the case of a termination for failure to obtain approval of the adoption of the Nexstar Merger Agreement by the Company’s shareholders) or the date of the applicable breach giving rise to termination, as applicable, and within twelve months after termination of the Nexstar Merger Agreement, the Company enters into a definitive agreement with respect to an alternative acquisition proposal (and subsequently consummates such transaction) or consummates a transaction with respect to an alternative acquisition proposal,proposal.
The Company must pay Nexstar the Company will pay Sinclair $135.5 million less Sinclair’sdocumented, out-of-pocket costs and expenses paid.of Nexstar in an amount not to exceed $15 million if Nexstar or the Company terminates the Nexstar Merger Agreement because the Company’s shareholders do not approve the transaction.
In additionTermination of Sinclair Merger Agreement—On May 8, 2017, the Company entered into an Agreement and Plan of Merger (the “Sinclair Merger Agreement”) with Sinclair Broadcast Group, Inc. (“Sinclair”), providing for the acquisition by Sinclair of all of the outstanding shares of the Company’s Common Stock by means of a merger of a wholly owned subsidiary of Sinclair, with and into the Company (the “Sinclair Merger”), with Tribune Media Company surviving the Sinclair Merger as a wholly owned subsidiary of Sinclair. The consummation of the Sinclair Merger was subject to the foregoingsatisfaction or waiver of certain important conditions, including, among others the receipt of approval from the FCC and the expiration or termination rights,of the waiting period applicable to the Sinclair Merger under the HSR Act. Pursuant to the Sinclair Merger Agreement, the Company had the right to terminate the Sinclair Merger Agreement if Sinclair failed to perform in all material respects its covenants, and such failure was not cured by the end date of August 8, 2018. Additionally, either party maycould terminate the Sinclair Merger Agreement if the Sinclair Merger iswas not consummated on or before May 8, 2018, with an automatic extension to August 8, 2018 if necessary(and the failure for the Sinclair Merger to have been consummated by such date was not primarily due to a breach of the Sinclair Merger Agreement by the party terminating the Sinclair Merger Agreement). On August 9, 2018, the Company provided notification to Sinclair that it had terminated the Sinclair Merger Agreement, effective immediately, on the basis of Sinclair’s willful and material breaches of its covenants and the expiration of the end date thereunder. Additionally, on August 9, 2018, the Company filed a complaint in the Delaware Court of Chancery against Sinclair (the “Complaint”), alleging that Sinclair willfully and materially breached its obligations under the Sinclair Merger Agreement to use its reasonable best efforts to promptly obtain regulatory approval of the Sinclair Merger so as to enable the Sinclair Merger to close as soon as reasonably practicable. The lawsuit seeks damages for all losses incurred as a result of Sinclair’s breach of contract under the Sinclair Merger Agreement. On August 29, 2018, Sinclair filed an answer to the Company’s Complaint and a counterclaim (the “Counterclaim”). The Counterclaim alleges that the Company materially and willfully breached the Sinclair Merger Agreement by failing to use reasonable best efforts to obtain regulatory approval under circumstances specifiedof the Sinclair Merger. On September 18, 2018, the Company filed an answer to the Counterclaim. The Company believes the Counterclaim is without merit and intends to defend it vigorously.
On May 8, 2018, the Company, Sinclair Television Group, Inc. (“Sinclair Television”) and Fox Television Stations, LLC (“Fox”) entered into an asset purchase agreement (the “Fox Purchase Agreement”) to sell the assets of seven network affiliates of the Company for $910 million in cash, subject to post-closing adjustments. The network affiliates subject to the Fox Purchase Agreement were: KCPQ (Tacoma, WA); KDVR (Denver, CO); KSTU (Salt Lake City, UT); KSWB-TV (San Diego, CA); KTXL (Sacramento, CA); WJW (Cleveland, OH); and WSFL-TV (Miami, FL). In connection with the termination of the Sinclair Merger Agreement on August 9, 2018, the Company provided notification to Fox that it terminated the Fox Purchase Agreement, effective immediately. Under the terms of the Fox Purchase Agreement, no termination fees were payable by any party.
Change in Accounting Principle—In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers” (“Topic 606”). The amendments in ASU 2014-09 created Topic 606 and superseded the revenue recognition requirements in Topic 605, “Revenue Recognition.” The Company adopted the new revenue guidance in the Merger Agreement.first quarter of 2018 using the modified retrospective transition method applied to those contracts which were not completed as of December 31,


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Change2017. Results for reporting periods prior to adoption continue to be presented in Accounting Principle— accordance with the Company’s historic accounting under Topic 605.
The only identified impact to the Company’s financial statements relates to barter revenue and expense as well as barter-related broadcast rights and contracts payable for broadcast rights, which are no longer recognized. On January 1, 2018, the Company recorded an adjustment to remove the offsetting barter-related broadcast rights and contracts payable for broadcast rights. If accounted for under Topic 605, barter revenue and expense would have been $28 million for fiscal year 2018 and barter-related broadcast rights and contracts payable for broadcast rights would have been $44 million as of December 31, 2018. For fiscal years 2017 and 2016, barter revenue and expense was $28 million and $30 million, respectively. Barter-related broadcast rights and contracts payable for broadcast rights were each $45 million as of December 31, 2017. Other than the impact to the accounting for barter arrangements described above, the adoption of Topic 606 did not impact the timing and amount of revenue recognized. See the Revenue Recognition accounting policy below for additional information.
In March 2016,2018, the Financial Accounting Standards Board (“FASB”)FASB issued Accounting Standard Update (“ASU”) 2016-09, “Compensation - Stock CompensationASU No. 2018-05, “Income Taxes (Topic 718).740)” The Company adopted ASU 2016-09 on January 1, 2017. The Company made a policy election to account for forfeitures of equity awards as they occur and implemented this provision using a modified retrospective transition method. The cumulative-effect adjustment to retained earningswhich was effective in the first quarter of 20172018. The standard provides guidance for situations where the accounting under Accounting Standards Codification (“ASC”) Topic 740 is incomplete for certain income tax effects of the Tax Cuts and Jobs Act (“Tax Reform”) upon issuance of an entity’s financial statements for the reporting period in which Tax Reform was enacted. Any provisional amounts or adjustments to provisional amounts as a result of this electionobtaining, preparing or analyzing additional information about facts and circumstances related to the provisional amounts should be included in income (loss) from continuing operations as an adjustment to income tax expense in the reporting period the amounts are determined. As discussed in Note 11, in 2018, the Company made adjustments to the net deferred tax liabilities, adjusting the provisional discrete net tax benefit recorded in the fourth quarter of 2017. The tax benefit was immaterial.recorded as the result of new information, including higher than expected pension contributions and new filing positions reported in the Company’s income tax returns as they became due.
In February 2018, the FASB issued ASU No. 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220).” The standard allows entities, at their option, to reclassify from accumulated other comprehensive income (loss) (“AOCI”) to retained earnings stranded tax effects resulting from Tax Reform. See Note 11 for further details regarding Tax Reform. The standard is effective for fiscal years beginning after December 15, 2018, and the interim periods within those fiscal years. Early adoption is permitted. The amendments in ASU 2018-02 should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the new federal corporate income tax rate is recognized. The Company early adopted ASU 2018-02 during the fourth quarter of 2018 resulting in a $14 million decrease in AOCI and a corresponding increase in retained earnings in the Company’s Consolidated Balance Sheet and Consolidated Statement of Shareholders’ Equity (Deficit) as of and for the year ended December 31, 2018.
In March 2017, the FASB issued ASU 2017-07, “Compensation - Retirement Benefits (Topic 715).” Under the new guidance, employers are required to present the service cost component of net periodic benefit cost in the same statement of operations caption as other employee compensation costs arising from services rendered during the period. Employers are required to present the other provisionscomponents of the net periodic benefit cost separately from the caption that includes the service costs and outside of any subtotal of operating profit and are required to disclose the caption used to present the other components of net periodic benefit cost, if not presented separately on the statement of operations. The Company retrospectively adopted ASU 2016-09 on a prospective basis.2017-07 effective in the first quarter of 2018. The adoption of these provisionsthis standard did not have a material impactan effect on the Company’s consolidated financial statements.historically reported net income (loss) but resulted in a presentation reclassification which reduced the Company’s historically reported operating profit by $23 million and $25 million for the fiscal years 2017 and 2016, respectively.
In JanuaryFebruary 2017, the FASB issued ASU No. 2017-04, “Intangibles2017-05, “Other Income - GoodwillGains and Other (Topic 350)Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20).” As a result of the new guidance, the guidance specific to real estate sales in ASC 360-20 is eliminated. Instead, sales and partial sales of real estate are subject to the same recognition model as all other nonfinancial assets. The Company adopted ASU 2017-05 in the standard onfirst quarter of 2018


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using a prospective basis, effective January 1, 2017. The standard simplifies the subsequent measure of goodwill by eliminating Step 2 from the goodwill impairment test. Under ASU 2017-04, companies should recognize an impairment charge for the amount the carrying amount exceeds the reporting unit’s fair value. However, the loss recognized cannot exceed the total goodwill allocated to that reporting unit.modified retrospective transition method. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.
In May 2017,November 2016, the FASB issued ASU No. 2017-09, “Compensation - Stock Compensation2016-18, “Statement of Cash Flows (Topic 718)230).” The Company adoptedstandard requires restricted cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling the standardbeginning-of-period and end-of-period total amounts shown on a prospective basis, effective April 1, 2017.the statement of cash flows. The standard addresses the diversity in practice of when companies apply modification accounting when there are changes in terms or conditionsalso requires additional disclosures related to share-based payment awards. The guidance states that a company should consider changes as a modification unless allreconciliation of the following are met (i) there is no changebalance sheet line items related to cash, cash equivalents, restricted cash and restricted cash equivalents to the statement of cash flows. The Company retrospectively adopted ASU 2016-18 in the fair valuefirst quarter of the award as a result of the modification, (ii) the vesting conditions have not changed2018. The Company’s restricted cash and (iii) the classification of the award as an equity instrument or a liability instrument has not changed.cash equivalents totaled $18 million at both December 31, 2017 and December 31, 2016. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.
Fiscal Year—On April 16, 2015,In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230).” The cash flow issues addressed by ASU 2016-15 include debt prepayment or extinguishment costs, settlement of debt instruments with coupon rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, distributions received from equity method investees and cash receipts and payments that may have aspects of more than one class of cash flows. The Company retrospectively adopted ASU 2016-15 in the first quarter of 2018. The adoption of this standard did not have a material impact on the Company’s Boardconsolidated financial statements.
In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments - Overall (Subtopic 825-10).” The new guidance requires entities to measure equity investments (except those accounted for under the equity method of Directors (the “Board”) approved the changeaccounting or those that result in consolidation of the Company’s fiscal year end frominvestee) at fair value, with changes in fair value recognized in net income, and requires entities to use the last Sundayexit price notion when measuring the fair value of financial instruments for disclosure purposes. Certain entities are able to elect to record equity investments without readily determinable fair values at cost, less impairment, and plus or minus subsequent adjustments for observable price changes in Decemberorderly transactions for the identical or a similar investment of each yearthe same issuer. Entities that elect this measurement alternative must report changes in the carrying value of these investments in current earnings. On February 28, 2018, the FASB issued ASU No. 2018-03, “Technical Corrections and Improvements to December 31Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of each yearFinancial Assets and Financial Liabilities,” which made targeted improvements to changeaddress certain aspects of recognition, measurement, presentation and disclosure of financial instruments, including clarifying certain aspects of the guidance issued in ASU 2016-01. The Company adopted ASU 2016-01 in the first quarter of 2018 using a modified retrospective transition method. Pursuant to ASU 2018-03, the Company utilized the prospective transition approach for all equity securities without a readily determinable fair value for instances in which the Company elected to apply the measurement alternative, as further discussed in Note 6. The adoption of these standards did not have a material impact on the Company’s fiscal quarter end toconsolidated financial statements as the last calendar day of each quarter. This change in fiscal year end was effective withCompany’s equity investments under the second fiscal quarter of 2015, which ended on June 30, 2015. As a resultscope of this change, the fiscal year ended December 31, 2016 includes two less days compared to the fiscal year ended December 31, 2015.guidance do not have readily determinable fair values because they are not publicly traded companies and do not have an active market for their securities or membership interests.
Principles of Consolidation and Variable Interest Entities—The consolidated financial statements include the accounts of Tribune Media Company and all majority-owned subsidiaries, as well as any variable interests for which the Company is the primary beneficiary. All material intercompany transactions are eliminated. In general, unless otherwise required by ASC Topic 323 “Investments - Equity Method and Joint Ventures,” investments comprising between 20 percent to 50 percent of the voting stock of companies and certain partnership interests are accounted for using the equity method. All other investments are generally investments without readily determinable fair values and are accounted for using the cost method.under Subtopic 825-10.
The Company evaluates its investments and other transactions to determine whether any entities associated with the investments or transactions should be consolidated under the provisions of FASB Accounting Standards Codification (“ASC”) Topic 810, “Consolidation.” ASC Topic 810 requires an ongoing qualitative assessment of variable interest entities (“VIEs”) to assess which entity is the primary beneficiary as it has the power to direct


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

matters that most significantly impact the activities of a VIE and has the obligation to absorb losses or benefits that could be potentially significant to the VIE. The Company consolidates VIEs when it is the primary beneficiary.
On April 14,August 6, 2018, the Company contributed land, building and improvements with an agreed-upon value between the parties of $53 million and a carrying value of $22 million, to TREH 700 W. Chicago Venture LLC (“700 W. Chicago LLC”). 700 W. Chicago LLC is a real estate joint venture between the Company and a third party developer formed for the purpose of redeveloping one of the Company’s Chicago, IL properties. Subsequent to the contribution, the Company holds an interest in the 700 W. Chicago LLC of 90%. In the future, the Company’s interest in the 700 W. Chicago LLC may decline, subject to the other party’s additional investments. The Company consolidates the financial position and results of operations of 700 W. Chicago LLC as it has the majority ownership.
In 2015, the Company entered into a real estate venture agreement with a third party to redevelop one of the Company’s Florida properties and formed a new limited liability company, TREH 200E Las Olas Venture, LLC (“Las Olas LLC”). The Company contributed land with an agreed-upon value between the parties of $15 million and a carrying value of $10 million, resulting in an initial 92% interest in the Las Olas LLC. As further disclosed in Note 6,4, on December 19, 2017, the Company sold the property owned by Las Olas LLC for net pretax proceeds of $21 million and recognized a pretax gain of $6 million, of which less than $1 million iswas attributable to a noncontrolling interest. The Las Olas LLC was determined to be a VIE where the Company iswas the primary beneficiary. The Company consolidatesconsolidated the financial position and results of operations of this VIE.VIE prior to its dissolution on October 23, 2018.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

On November 12,In 2015, the Company executed an agreement with a third party developer to redevelop one of the Company’s California properties. The Company contributed land, building and improvements with an agreed-upon value between the parties of $39 million and a carrying value of $35 million, resulting in an initial 90% interest in the TREH/Kearny Costa Mesa, LLC (“Costa Mesa LLC”). As further disclosed in Note 6,4, on November 15, 2017, the Company sold the properties owned by Costa Mesa LLC for net pretax proceeds of $62 million and recognized a pretax gain of $22 million, of which $3 million is attributable to a noncontrolling interest. The Company consolidates the financial position and results of operations of Costa Mesa LLC as it has the majority ownership.
Prior to September 2, 2015, the Company held a variable interest in Newsday Holdings LLC (“NHLLC”). On September 2, 2015, all of the outstanding equity interests of NHLLC were acquired by CSC Holdings, LLC (“CSC”).
At December 31, 20172018 and December 31, 2016,2017, the Company indirectly held a variable interest in Topix, LLC (“Topix”) through its investment in TKG Internet Holdings II LLC. The Company has determined that it is not the primary beneficiary of Topix and therefore has not consolidated it as of and for the periods presented in the Company’s audited consolidated financial statements.
The Company holds a variable interest in Dreamcatcher Broadcasting LLC, a Delaware limited liability company (“Dreamcatcher”) and is the primary beneficiary. As such, the Company’s consolidated financial statements include the results of operations and the financial position of Dreamcatcher. See below for further information on the Company’s transactions with Dreamcatcher and the carrying amounts and classification of the assets and liabilities of Dreamcatcher which have been included in the Company’s Consolidated Balance Sheets. The assets of the consolidated VIE can only be used to settle the obligations of the VIE.
Dreamcatcher—Pursuant to an asset purchase agreement dated as of July 15, 2013, between the Company, an affiliate of Oak Hill Capital Partners and Dreamcatcher, an entity formed in 2013 specifically to comply with FCC cross-ownership rules, on December 27, 2013, Dreamcatcher acquired the FCC licenses, retransmission consent agreements, network affiliation agreements, contracts for broadcast rights and selected personal property (including transmitters, antennas and transmission lines) of Local TV’s television stations WTKR-TV, Norfolk, VA, WGNT-TV, Portsmouth, VA, and WNEP-TV, Scranton, PA (collectively the “Dreamcatcher Stations”) for $27 million (collectively, the “Dreamcatcher Transaction”). The Dreamcatcher Transaction was funded by the Dreamcatcher Credit Facility which was guaranteed by the Company. In 2017, Dreamcatcher received pretax proceeds from the counterparty in a spectrum sharing arrangement of $26 million as one of the Dreamcatcher stations will act as host station. The payments have been recorded as deferred revenue and began amortizing to the Company’s Consolidated Statement of Operations upon commencement of the sharing arrangement in December 2017. See Note 1210 for


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

additional information regarding the Company’s participation in the FCC spectrum auction. The Company used after-tax proceeds from the FCC spectrum auction to prepay the Dreamcatcher Credit Facility in the third quarter of 2017, as further described in Note 9.7. The Company made the final payment to pay off the Dreamcatcher Credit Facility in full in September 2017.
The Company provides certain services to support the operations of the Dreamcatcher Stations, but, in compliance with FCC regulations, Dreamcatcher has responsibility for and control over programming, finances, personnel and operations of the Dreamcatcher Stations. In connection with Dreamcatcher’s operation of the Dreamcatcher Stations, the Company entered into shared services agreements (“SSAs”) with Dreamcatcher pursuant to which it provides technical, promotional, back-office, distribution and limited programming services to the Dreamcatcher Stations in exchange for the Company’s right to receive certain payments from Dreamcatcher after satisfaction of operating costs and debt obligations. Pursuant to SSAs, Dreamcatcher is guaranteed a minimum annual cumulative net cash flow of $0.2 million. The Company’s consolidated financial statements include the results of operations and the financial position of Dreamcatcher, a fully-consolidated VIE. For financial reporting purposes, Dreamcatcher is considered a VIE as a result of (1) shared service agreements that the Company has with the Dreamcatcher Stations, (2) the Company having power over significant activities affecting Dreamcatcher’s economic performance, and (3) purchase option granted by Dreamcatcher which permits the Company to acquire the assets and assume the liabilities of each Dreamcatcher Station at any time, subject to FCC’s consent and other


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

conditions described below. The purchase option is freely exercisable or assignable by the Company without consent or approval by Dreamcatcher or its members for consideration equal to the total outstanding balance of debt guaranteed by the Company, plus a fixed escalation fee.
Net revenues of the Dreamcatcher stations included in the Company’s Consolidated Statements of Operations for the yearyears ended December 31, 2018, December 31, 2017 and December 31, 2016 and December 31, 2015 were $78 million, $72 million $73 million and $65$73 million, respectively, and operating profit was $18 million, $12 million $16 million and $12$16 million, respectively.
The Company’s Consolidated Balance Sheet as of December 31, 20172018 and December 31, 20162017 includes the following assets and liabilities of the Dreamcatcher stations (in thousands):
December 31, 2017 December 31, 2016December 31, 2018 December 31, 2017
Property, plant and equipment, net$—
 $91
Broadcast rights2,622
 2,634
2,355
 2,622
Other intangible assets, net71,914
 82,442
61,386
 71,914
Other assets6,852
 134
8,770
 6,852
Total Assets$81,388
 $85,301
$72,511
 $81,388
      
Debt due within one year$—
 $4,003
Contracts payable for broadcast rights2,691
 2,758
2,186
 2,691
Long-term debt—
 10,767
Long-term deferred revenue25,030
 —
24,164
 25,030
Other liabilities1,017
 85
1,291
 1,017
Total Liabilities$28,738
 $17,613
$27,641
 $28,738
Revenue Recognition—The Company’s primary sourcesCompany recognizes revenues when control of revenue relatedthe promised goods or services is transferred to Television and Entertainment are from local and national broadcasting and cable advertising and retransmission and carriage fee revenues on the Company’s television, cable and radio stations as well as from direct and indirect display advertising. Thecustomers in an amount that reflects the consideration the Company also recognizes revenues from leases of its owned real estate.
The Company recognizes revenue when the following conditions are met: (i) there is persuasive evidence that an arrangement exists, (ii) delivery has occurred or service has been rendered, (iii) the fees are fixed or determinable and (iv) collection is reasonably assured. Revenue arrangements with multiple deliverables are divided into separate units of accounting when the delivered item has value to the customer on a stand-alone basis. Revenue is allocated to the respective elements based on their relative selling prices at the inception of the arrangement, and revenue is recognized as each element is delivered. The Company uses a hierarchy to determine the fair valueexpects to be usedentitled to in exchange for allocating revenue to elements: (i) vendor-specific objective evidence of fair value (“VSOE”), (ii) third-party evidence, and (iii) best estimate of selling price (“ESP”).
Television and Entertainment advertising revenue is recorded, net of agency commissions, when commercials are aired. Television operations may trade certain advertising time for productsthose goods or services, as well as barter advertising time for program material. Trade transactions are generally reported at the estimated fair value of the product or services received, while barter transactions are reported at the Company’s estimate of the value of the advertising time exchanged, which approximates the fair value of the program material received. Barter/trade revenue is reported when commercials are broadcast and expenses are reported when products or services are utilized or when programming airs. The Company records rebates when earned as a reduction of advertising revenue. Retransmission revenue represent revenue that the Company earns from multichannel video programming distributors (“MVPDs”) for the distribution of the Company’s television stations’ broadcast programming. Retransmission revenue is recognized over the contract period, generally based on a negotiated fee per subscriber.services.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Carriage fees represent fees thatThe following table represents the Company’s revenues disaggregated by revenue source for the Television and Entertainment segment (in thousands):
 2018 2017 (1) 2016 (1)
Advertising$1,315,769
 $1,225,900
 $1,374,571
Retransmission revenues471,632
 412,309
 334,724
Carriage fees161,214
 127,935
 121,044
Barter/trade (2)9,092
 37,381
 39,025
Other40,971
 31,898
 40,532
Total operating revenues$1,998,678
 $1,835,423
 $1,909,896
(1)Prior period amounts have not been adjusted under the modified retrospective method.
(2)For the years ended December 31, 2017 and December 31, 2016, barter revenue totaled $28 million and $30 million, respectively.
In addition to the operating revenues included in the Television and Entertainment segment, the Company’s consolidated operating revenues include other revenue of $11 million, $14 million, and $38 million for the years ended December 31, 2018, December 31, 2017 and December 31, 2016, respectively, in Corporate and Other which consists of real estate revenues.
Advertising Revenues—The Company generates revenue by delivering advertising on the Company’s broadcast television, cable, radio and digital platforms. Certain of the Company’s advertising contracts have guarantees whereby the customer is guaranteed a certain level of audience viewership referred to as impressions. Contracts are typically fixed price, short term in nature and revenue is recognized over time as the advertisements are aired or the impressions are delivered. If the guaranteed impressions are not achieved through the airing of the initially agreed upon advertisements, the Company earns from MVPDswill continue to air advertisements for the carriagecustomer until the guaranteed impressions are achieved. For these advertising contracts with guaranteed impressions, the Company recognizes revenue based on the proportion of the cumulative impressions achieved for the advertisements delivered in relation to the total guaranteed impressions. Under the advertising contracts, the Company is entitled to payment as advertisements are aired, and the time between invoice and payment is not significant. The Company also trades advertising for products or services. Revenue recognized under trade arrangements is valued at the estimated fair value of the products or services received and recognized as the related advertisements are aired. The Company utilizes the practical expedients provided in the guidance and does not disclose the value of unsatisfied performance obligations for advertising contracts with an original expected duration of one year or less and for contracts for which the Company recognizes revenue at the amounts to which the Company has the right to invoice for services performed.
Retransmission Revenues and Carriage Fees—The Company enters into agreements with multichannel video programming distributors (“MVPDs”) which allow the MVPDs to retransmit the Company’s television stations’ broadcast programming and/or carry the Company’s cable channel. Carriage feesTypically, the agreements are multi-year and generally consist of a fixed price per subscriber as well as contractually agreed annual increases. The agreements are considered functional licenses of intellectual property resulting in the Company recognizing revenue at the point-in-time the broadcast signal is delivered to the MVPDs. The typical time between the Company’s performance and customer payment is not significant. As the agreements with MVPDs are considered licenses of intellectual property, the Company applies the sales/usage based royalty exception in Topic 606 and does not disclose the value of unsatisfied performance obligations for the agreements.
Deferred Revenues—The Company records deferred revenue when cash payments are received or due in advance of the Company’s performance. For advertising, the performance primarily involves the delivery of advertisements and/or impressions to the Company’s customers. For the spectrum sharing arrangements where the Company is acting as the host, the upfront payments received from the Company’s channel-sharing customers in 2017 have been deferred and are being recognized over a 30-year term.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Contract Costs—In accordance with Topic 606, incremental costs to obtain a contract are capitalized and amortized over the contract period,term if the cost are expected to be recoverable. The Company does not capitalize incremental costs to obtain a contract where the contract duration is expected to be one year or less. As of December 31, 2018, the Company does not have any costs capitalized.
Arrangements with Multiple Performance Obligations—The Company’s contracts with customers may include multiple performance obligations. For such arrangements, the Company allocates revenue to each performance obligation based on its relative standalone selling price, which is generally determined based on the number of subscribers and negotiated rates.price charged to customers.
Derivative Instruments—The Company’s earnings and cash flows are subject to fluctuations due to changes in interest rates. The Company’s risk management policy allows for the use of derivative financial instruments to manage interest rate exposures and does not permit derivatives to be used for speculative purposes.
The Company formally documents all relationships between hedging instruments and hedged items, as well as the risk-management objective and strategy for undertaking various hedge transactions. This process includes linking the derivatives designated as cash flow hedges to specific forecasted transactions or variability of cash flow. The Company also formally assesses, both at hedge inception and on an ongoing basis, whether the designated derivatives that are used in hedging transactions are highly effective in offsetting changes in the cash flow of hedged items as well as monitors the credit worthiness of the counterparties to ensure no issues exist which would affect the value of the derivatives. When a derivative is determined not to be highly effective as a hedge or the underlying hedged transaction is no longer probable, the Company discontinues hedge accounting prospectively, in accordance with derecognition criteria for hedge accounting.
The Company records derivative financial instruments at fair value in its Consolidated Balance Sheets in either other current liabilities or other noncurrent assets. Changes in the fair value of a derivative that is designated as a cash flow hedge, to the extent that the hedge is effective, are recorded in accumulated other comprehensive (loss) incomeAOCI and reclassified to earnings when the hedged item affects earnings. Cash flows from derivative financial instruments are classified in the Consolidated Statements of Cash Flows based on the nature of the derivative contract.
Use of Estimates—The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates.
Cash and Cash Equivalents—Cash and cash equivalents are stated at cost, which approximates market value. Investments with original maturities of three months or less at the time of purchase are considered to be cash equivalents.
Restricted Cash and Cash Equivalents—Restricted cash and cash equivalents consist of funds that are not available for general corporate use and primarily consist of restricted cash and cash equivalents held by the Company to satisfy the remaining claim obligations pursuant to the Plan (as defined and described in Note 3)10). At bothDecember 31, 2018 and December 31, 2017, and December 31, 2016, restricted cash and cash equivalents held by the Company to satisfy such obligations totaled $17 million and $18 million.million, respectively.
Accounts Receivable and Allowance for Doubtful Accounts—The Company’s accounts receivable are primarily due from advertisers and MVPDs. Credit is extended based on an evaluation of each customer’s financial condition, and generally collateral is not required. The Company maintains an allowance for uncollectible accounts rebates, volume discounts and sales allowances. This allowance is determined based on historical write-off experience, sales adjustments and any known specific collectability exposures.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

A summary of the activity with respect to the accounts receivable allowances is as follows (in thousands):
Accounts receivable allowance balance at December 28, 2014$6,795
2015 additions charged to revenues, costs and expenses5,277
2015 deductions(6,529)
Accounts receivable allowance balance at December 31, 2015$5,543
$5,543
2016 additions charged to revenues, costs and expenses14,009
14,009
2016 deductions(7,048)(7,048)
Accounts receivable allowance balance at December 31, 2016$12,504
$12,504
2017 additions charged to revenues, costs and expenses14,786
14,786
2017 deductions(22,476)(22,476)
Accounts receivable allowance balance at December 31, 2017$4,814
$4,814
2018 additions charged to revenues, costs and expenses5,514
2018 deductions(5,867)
Accounts receivable allowance balance at December 31, 2018$4,461
Broadcast Rights—The Company acquires rights to broadcast syndicated programs, original licensed series and feature films. Pursuant to ASC Topic 920, “Entertainment-Broadcasters,” these rights and the related liabilities are recorded as an asset and a liability when the license period has begun, the cost of the program is determinable and the program is accepted and available for airing. The current portion of programming inventory includes those rights available for broadcast that are expected to be amortized in the succeeding year.
The Company amortizes its broadcast rights costs over the period in which an economic benefit is expected to be derived based on the timing of the usage and benefit from such programming. Newer licensed/acquired programming and original produced programming are generally amortized on an accelerated basis as the episodes are aired. For certain categories of licensed programming and feature films that have been exploited through previous cycles, amortization expense is recorded on a straight-line basis. Program amortization for certain categories of programming is calculated on either an accelerated or straight-line basis based upon the greater amortization resulting from either the number of episodes aired or the portion of the license period consumed. The Company also has commitments for network and sports programming that are expensed on a straight-line basis as the programs are available to air. Management’s judgment is required in determining the timing of the expensing of these costs, and includes analyses of historical and estimated future revenue and ratings patterns for similar programming. The Company regularly reviews, and revises when necessary, its revenue estimates, which may result in a change in the rate of amortization. Amortization of broadcast rights are expensed to programming in the Company’s Consolidated Statements of Operations.
The Company carries its broadcast rights at the lower of unamortized cost or estimated net realizable value. The Company evaluates the net realizable value of broadcast rights on a daypart, series, or title-by-title basis, as appropriate. Changes in management’s intended usage of a specific daypart, series, or program would result in a reassessment of the net realizable value, which could result in an impairment. The Company determines the net realizable value and estimated fair value, as appropriate, based on a projection of the estimated advertising revenues and carriage/retransmission revenues, less certain direct costs of delivery, expected to be generated by the program material, all of which are classified in Level 3 of the fair value hierarchy. If the Company’s estimates of future revenues decline, amortization expense could be accelerated or impairment adjustments may be required. The Company assesses future seasons of syndicated programs that the Company is committed to acquire for impairment as they become available to the Company for airing. Any impairments of programming rights are expensed to programming in the Company’s Consolidated Statements of Operations. As a result of the evaluation of the recoverability of the unamortized costs associated with broadcast rights, the Company recognized impairment charges at WGN America of $28 million for the syndicated program Elementary in 2018, $80 million for the syndicated programs Elementary and Person of Interest in 2017 and $37 million for the syndicated program Elementary in 2016 and $74 million for the syndicated programs Person of Interest and Elementary in 2015.2016.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Production Costs—In accordance with ASC Topic 926, “Entertainment-Films,” the Company estimates total revenues to be earned and costs to be incurred throughout the life of each television program it produces. Estimates for remaining total lifetime revenues are limited to the amount of revenue contracted for each episode in the initial market (which is the US television market). Accordingly, television programming costs and participation costs incurred in excess of the amount of revenue contracted in the initial market are expensed as incurred. Estimates for all secondary market revenues such as domestic and foreign syndication, digital streaming, home entertainment and merchandising are included in the estimated lifetime revenues of such television programming once it can be demonstrated that a program can be successfully licensed in such secondary market. Television programming costs incurred subsequent to the establishment of the secondary market are initially capitalized and amortized based on the proportion that current period revenues bear to the estimated remaining total lifetime revenues. Production costs are expensed to programming in the Company’s Consolidated Statements of Operations.
Advertising Costs—The Company expenses advertising costs as they are incurred. Advertising expense was $36 million, $34 million and $42 million in 2018, 2017 and $39 million in 2017, 2016, and 2015, respectively. Advertising costs are expensed to selling, general and administrative expenses (“SG&A”) in the Company’s Consolidated Statements of Operations.
Properties—The estimated useful lives of the Company’s property, plant and equipment in service currently ranges as follows: 32 to 44 years for buildings and 13 to 30 years for all other equipment.
Goodwill and Other Indefinite-Lived Intangible Assets—Goodwill and other indefinite-lived intangible assets are summarized in Note 7.5. The Company reviews goodwill and other indefinite-lived intangible assets for impairment annually, or more frequently if events or changes in circumstances indicate that an asset may be impaired, in accordance with ASC Topic 350, “Intangibles—Goodwill and Other.” Under ASC Topic 350, the impairment review of goodwill and other intangible assets not subject to amortization must be based on estimated fair values.
The Company’s annual impairment review measurement date is in the fourth quarter of each year. In performing the annual assessment, the Company has the option of performing a qualitative assessment to determine if it is more likely than not that a reporting unit has been impaired. As part of the qualitative assessment for the reporting units, the Company evaluates the impact of factors that are specific to the reporting units as well as industry and macroeconomic factors. The reporting unit specific factors include a comparison of the current year results to prior year, current year budget and the budget for next fiscal year. The Company also considers the significance of the excess fair value over the carrying value reflected in prior quantitative assessments, the changes to the reporting units’ carrying values since the last impairment test and the change in the overall enterprise value of the Company compared to the prior year.
If the Company concludes that it is more likely than not that a reporting unit is impaired or if the Company elects not to perform the optional qualitative assessment, a quantitative assessment is performed. For the quantitative assessment, the estimated fair values of the reporting units to which goodwill has been allocated are determined using many critical factors, including projected future operating cash flows, revenue and market growth, market multiples, discount rates and consideration of market valuations of comparable companies. The estimated fair values of other intangible assets subject to the annual impairment review, which include FCC licenses and a trade name, are evaluated qualitatively or generally calculated based on projected future discounted cash flow analyses. The development of estimated fair values requires the use of assumptions, including assumptions regarding revenue and market growth as well as specific economic factors in the broadcasting industry. These assumptions reflect the Company’s best estimates, but these items involve inherent uncertainties based on market conditions generally outside of the Company’s control.
Adverse changes in expected operating results and/or unfavorable changes in other economic factors used to estimate fair values could result in additional non-cash impairment charges in the future under ASC Topic 350.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Impairment Review of Long-Lived Assets—In accordance with ASC Topic 360, “Property, Plant and Equipment,” the Company evaluates the carrying value of long-lived assets to be held and used whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset or asset group may be impaired. The carrying value of a long-lived asset or asset group is considered impaired when the projected future undiscounted cash flows to be generated from the asset or asset group over its remaining depreciable life are less than its current carrying value. The Company measures impairment based on the amount by which the carrying value exceeds the estimated fair value of the long-lived asset or asset group. The fair value is determined primarily by using the projected future cash flows discounted at a rate commensurate with the risk involved as well as market valuations. Losses on long-lived assets to be disposed of are determined in a similar manner, except that the fair values are reduced for an estimate of the cost to dispose or abandon.
Adverse changes in expected operating results and/or unfavorable changes in other economic factors used to estimate future undiscounted cash flows could result in additional non-cash impairment charges in the future under ASC Topic 360.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Pension Plans and Other Postretirement Benefits—Retirement benefits are provided to employees through pension plans sponsored either by the Company or by unions. Under the Company-sponsored plans, pension benefits are primarily a function of both the years of service and the level of compensation for a specified number of years, depending on the plan. It is the Company’s policy to fund the minimum for Company-sponsored pension plans as required by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). Contributions made to union-sponsored plans are based upon collective bargaining agreements. The Company also provides certain health care and life insurance benefits for retired employees. The expected cost of providing these benefits is accrued over the years that the employees render services. It is the Company’s policy to fund postretirement benefits as claims are incurred.
The Company recognizes the overfunded or underfunded status of its defined benefit pension or other postretirement plans (other than a multiemployer plan) as an asset or liability in its Consolidated Balance Sheets and recognizes changes in that funded status in the year in which changes occur through comprehensive income (loss). Additional information pertaining to the Company’s pension plans and other postretirement benefits is provided in Note 14.12.
Self-Insurance—The Company self-insures for certain employee medical and disability income benefits, workers’ compensation costs and automobile and general liability claims. The recorded liabilities for self-insured risks are calculated using actuarial methods. The Company carries insurance coverage to limit exposure for self-insured workers’ compensation costs and automobile and general liability claims. The Company’s deductibles under these coverages are generally $1 million per occurrence, depending on the applicable policy period. The recorded liabilities for self-insured risks totaled $23 million at December 31, 2018 and $24 million at December 31, 2017 and $26 million at December 31, 2016.
Deferred Revenue—Deferred revenue arises in the normal course of business from advances from customers for the Company’s products and services and from the long-term spectrum sharing arrangements where the Company is the host. Revenue associated with deferred revenue is recognized in the period it is earned. See above for further information on the Company’s revenue recognition policy.2017.
Stock-Based Compensation—In accordance with ASC Topic 718, “Compensation—Stock Compensation,” the Company recognizes stock-based compensation cost in its Consolidated Statements of Operations. Stock-based compensation cost is measured at the grant date for equity-classified awards and at the end of each reporting period for liability-classified awards based on the estimated fair value of the awards. ASC Topic 718 requires stock-based compensation expense to be recognized over the period from the date of grant to the date when the award is no longer contingent on the employee providing additional service (the “substantive vesting period”). Additional information pertaining to the Company’s stock-based compensation is provided in Note 16.14.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Income Taxes—Provisions for federal and state income taxes are calculated on reported pretax earnings based on current tax laws and also include, in the current period, the cumulative effect of any changes in tax rates from those used previously in determining deferred tax assets and liabilities. Taxable income reported to the taxing jurisdictions in which the Company operates often differs from pretax earnings because some items of income and expense are recognized in different time periods for income tax purposes. The Company provides deferred taxes on these temporary differences in accordance with ASC Topic 740, “Income Taxes.” Taxable income also may differ from pretax earnings due to statutory provisions under which specific revenues are exempt from taxation and specific expenses are not allowable as deductions. The consolidated tax provision and related accruals include estimates of the potential taxes and related interest as deemed appropriate. These estimates are reevaluated and adjusted, if appropriate, on a quarterly basis. Although management believes its estimates and judgments are reasonable, the resolutions of the Company’s tax issues are unpredictable and could result in tax liabilities that are significantly higher or lower than that which has been provided by the Company.
ASC Topic 740 addresses the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Under ASC Topic 740, a company may recognize the tax benefit of an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. ASC Topic 740 requires the tax benefit recognized in the financial statements to be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. ASC Topic 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods and disclosure. See Note 1311 for further discussion.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Comprehensive Income (Loss)—Comprehensive income (loss) consists of net income and other gains and losses affecting shareholder’s equity that, under U.S. GAAP, are excluded from net income. The Company’s other comprehensive income (loss) includes changes in unrecognized benefit plan gains and losses, unrealized gains and losses on marketable securities classified as available-for-sale, unrealized gains and losses on cash flow hedging instruments and foreign currency translation adjustments. The activity for each component of the Company’s accumulated other comprehensive income (loss) (“AOCI”)AOCI is summarized in Note 18.16.
New Accounting Standards—In FebruaryAugust 2018, the FASB issued ASU No. 2018-02, “Income Statement2018-15, “Intangibles - Reporting Comprehensive Income (Topic 220)Goodwill and Other - Internal-Use Software (Subtopic 350-40).” The standard allows entities, at their option,requires a customer in a hosting arrangement that is a service contract to reclassify from AOCIfollow the internal-use software guidance to retained earnings stranded tax effects resulting fromdetermine which implementation costs to capitalize as an asset related to the Tax Cutsservice contract. The standard also requires a customer to expense the capitalized implementation costs over the term of the hosting arrangement and Jobs Act. See Note 13specifies presentation requirements for further details regardingboth the Tax Cutscapitalized costs and Jobs Act.the amortized expenses. The standard is effective for fiscal years beginning after December 15, 2018,2019, and the interim periods within those fiscal years. Early adoption is permitted. The amendments in ASU 2018-022018-15 should be applied either inretrospectively or prospectively to all implementation costs incurred after the perioddate of adoption or retrospectively to each period (or periods) in which the effect of the new federal corporate income tax rate is recognized.adoption. The Company is currently evaluating the impact of adopting ASU 2018-022018-15 on its consolidated financial statements.
In August 2018, the FASB issued ASU No. 2018-14, “Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20).” The standard modifies certain disclosure requirements for employers that sponsor defined benefit pension and other postretirement benefit plans by removing disclosures that are no longer considered cost beneficial, clarifying specific requirements of disclosures, and adding disclosure requirements identified as relevant. The standard is effective for fiscal years ending after December 15, 2020. Early adoption is permitted. The amendments in ASU 2018-14 should be applied retrospectively to each period presented. The Company is currently evaluating the impact of adopting ASU 2018-14 on its consolidated financial statements.
In August 2017, the FASB issued ASU No. 2017-12, “Derivatives and Hedging (Topic 815).” The standard simplifies the application of the hedge accounting guidance and enables entities to better portray the economic results of their risk management activities in the financial statements. The new guidance eliminates the requirement and the ability to separately record ineffectiveness on cash flow and net investment hedges and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. The standard requires certain additional disclosures that focus on the effect of hedge accounting whereas the disclosure of hedge ineffectiveness is eliminated. The amendments expand the types of permissible hedging strategies. Additionally, the amendment makes the hedge documentation and effectiveness assessment less complex. The standard is effective for fiscal years beginning after December 15, 2018, and the interim periods within those fiscal years. Early adoption is permitted. The amendments in ASU 2017-12 related to cash flow hedge relationships that exist on the date of adoption should be applied using a modified retrospective approach with the cumulative effect of initially applying ASU 2017-12 at the date of initial application. The presentation and disclosure requirements apply prospectively. The Company is currently evaluating the impact of adopting ASU 2017-12 on its consolidated financial statements.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In March 2017, the FASB issued ASU No. 2017-07, “Compensation - Retirement Benefits (Topic 715).” The standard changes how employers that sponsor defined benefit pension and/or other postretirement benefit plans present the net periodic benefit cost in the statement of operations. Under the new guidance, employers are required to present the service cost component of net periodic benefit cost in the same statement of operations caption as other employee compensation costs arising from services rendered during the period. Employers are required to present the other components of the net periodic benefit cost separately from the caption that includes the service costs and outside of any subtotal of operating profit and are required to disclose the caption used to present the other components of net periodic benefit cost, if not presented separately on the statement of operations. Additionally, only the service cost component will be eligible for capitalization in assets. The standard is effective for fiscal years beginning after December 15, 2017, and the interim periods within those fiscal years. Early adoption is permitted. The amendments in ASU 2017-07 must be applied retrospectively. Upon adoption, the Company is required to provide the relevant disclosures under Topic 250, Accounting Changes and Error Corrections. The Company will retrospectively adopt ASU 2017-07 effective in the first quarter of 2018. The adoption of this standard is not expected to have an effect on the Company’s historically reported net income (loss) but will result in a presentation reclassification which will reduce the Company’s historically reported operating profit by $23 million in 2017, $25 million in 2016 and $29 million in 2015.
In February 2017, the FASB issued ASU No. 2017-05, “Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20).” The standard clarifies that ASC 610-20 provides guidance for recognizing gains and losses from the transfer of nonfinancial assets and in substance nonfinancial assets in contracts with non-customers. As a result of the new guidance, the guidance specific to real estate sales in ASC 360-20 will be eliminated. Instead, sales and partial sales of real estate will be subject to the same recognition model as all other nonfinancial assets. The standard is effective for fiscal years beginning after December 15, 2017, and the interim periods within those fiscal periods. Early adoption is permitted. The amendments in ASU 2017-05 may be applied either retrospectively to each prior period presented or retrospectively with the cumulative effect of initially applying ASU 2017-05 at the date of initial application. The Company will adopt ASU 2017-05 effective in the first quarter of 2018 using a modified retrospective transition method. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements.
In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230).” The standard addresses the diversity in classification and presentation of changes in restricted cash on the statement of cash flows. The standard requires restricted cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. In addition, transfers between cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents are not reported as cash flow activities. The standard also requires additional disclosures related to a reconciliation of the balance sheet line items related to cash, cash equivalents, restricted cash and restricted cash equivalents to the statement of cash flows, which can be presented either on the face of the statement of cash flows or separately in the notes to the financial statements. The amendments in this ASU should be applied using a retrospective transition method to each period presented. The standard is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted. The Company will retrospectively adopt ASU 2016-18 effective in the first quarter of 2018. The Company’s restricted cash and cash equivalents totaled $18 million at both December 31, 2017 and December 31, 2016. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements.
In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230).” The standard addresses several specific cash flow issues with the objective of reducing the existing diversity in practice in how certain cash activities are presented and classified in the statement of cash flows. The cash flow issues addressed include debt prepayment or extinguishment costs, settlement of debt instruments with coupon rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, distributions received from equity method investees and cash receipts and payments that may have aspects of more than one class of cash flows. The standard is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted but all of the guidance


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

must be adopted in the same period. The Company will retrospectively adopt ASU 2016-15 effective in the first quarter of 2018. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements.
In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326).” The standard requires entities to estimate loss of financial assets measured at amortized cost, including trade receivables, debt securities and loans, using an expected credit loss model. The expected credit loss differs from the previous incurred losses model primarily in that the loss recognition threshold of “probable” has been eliminated and that expected loss should consider reasonable and supportable forecasts in addition to the previously considered past events and current conditions. Additionally, the guidance requires additional disclosures related to the further disaggregation of information related to the credit quality of financial assets by year of the asset’s origination for as many as five years. Entities must apply the standard provision as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The standard is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

for annual periods beginning after December 15, 2018, and interim periods within those fiscal years. The Company is currently evaluating the impact of adopting ASU 2016-13 on its consolidated financial statements.
In February 2016, the FASB issued ASU No. 2016-02, “Leases (Subtopic 842).” The new guidance requires lessees to recognize assets and liabilities arising from leases as well as extensive quantitative and qualitative disclosures. A lessee will need to recognize on its balance sheet a right-of-use asset and a lease liability for the majority of its leases (other than leases that meet the definitionwith a term of a short-term lease)less than twelve months). The lease liabilities will be equal to the present value of lease payments. The right-of-use asset will be measured at the lease liability amount, adjusted for lease prepayment, lease incentives received and the lessee’s initial direct costs. The standard is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. ASU 2016-02 is required to be applied using the modified retrospective approach for all leases existing as of the effective date and provides for certain practical expedients. In January 2018, the FASB issued ASU No. 2018-01, “Leases (Topic 842) - Land Easement Practical Expedient for Transition to Topic 842,” which provides an optional transition practical expedient to not evaluate under Topic 842 existing or expired land easements that were not previously accounted for as leases under the current leases guidance in Topic 840. The effective date and transition requirements for ASU 2018-01 are the same as ASU 2016-02. Early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2016-02 and ASU 2018-01 on its consolidated financial statements.
In January 2016,July 2018, the FASB issued ASU No. 2016-01, “Financial2018-10, “Codification Improvements to Topic 842, Leases,” and ASU No. 2018-11, “Leases (Topic 842), Targeted Improvements,” which affect certain aspects of the previously issued guidance including an additional transition method as well as a new practical expedient for lessors. In December 2018, the FASB issued ASU No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments - Overall (Subtopic 825-10).Credit Losses” and ASU No. 2018-20, “Leases (Topic 842), Narrow-Scope Improvements for Lessors,” Thewhich provide additional guidance for lessor accounting as well as a new guidance requires entities to measure equity investments (except those accountedpractical expedient for under the equity method of accounting or those that result in consolidation of the investee) at fair value, with changes in fair value recognized in net income and requires entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. Further, entities will no longer be able to recognize unrealized holding gains and losses on equity securities classified today as available for sale in other comprehensive income and they will no longer be able to use the cost method of accounting for equity securities that do not have readily determinable fair values. However, certain entities will be able to elect to record equity investments without readily determinable fair values at cost, less impairment, and plus or minus subsequent adjustments for observable price changes. Entities that elect this measurement alternative will report changes in the carrying value of these investments in current earnings. The guidance has additional amendments to presentation and disclosure requirements of financial instruments. The amendments in this ASUlessors. These related standards are effective for fiscal years beginning after December 15, 2017, including2018, and interim periods within those fiscal years. Early adoption is permitted. The Company will adopt ASU 2016-01 effectiveTopic 842 in the first quarter of 2018 using a modified retrospective2019 utilizing the optional transition method. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements as the Company’s equity investments as of December 31, 2017 do not have readily determinable fair values because they are not publicly traded companies and do not have an active market for their securities or membership interests. However, should fair values of certain equity investments become readily availablemethod provided in future reporting periods, the Company’s consolidated financial statements may be materially affected.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts2018-11, which allows for a prospective adoption with Customers (Topic 606).” The amendments in ASU 2014-09 create Topic 606, Revenue from Contracts with Customers, and supersedea cumulative-effect adjustment to the revenue recognition requirements in Topic 605, Revenue Recognition, including most industry-specific revenue recognition guidance. The core principle of Topic 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendments in ASU 2014-09 are effective for annual periods beginning after December 15, 2016, and interim periods within that reporting period. However, in August 2015, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers (Topic 606) - Deferral of the Effective Date,” which deferred the effective date of ASU 2014-09 by one year for annual periods beginning after December 15, 2017, while allowing early adoptionopening balance sheet as of the original public entity date. In March 2016,adoption date without restatement of prior years. The Company has elected the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606) - Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” which clarifiespackage of practical expedients as permitted by the implementationtransition guidance on principal versus agent considerations. In April 2016,allowing the FASB issued ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606) - Identifying Performance Obligations and Licensing,” which amendsCompany to carry forward the revenue recognition guidance on accounting for licenses of intellectual property and identifying performance obligations as well as clarifies when a promised good or service is separately identifiable. In May 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606) - Narrow-Scope Improvements and Practical Expedients,” which provides clarifying guidance in certain narrow areas such as anhistorical assessment of collectibility, presentationwhether contracts contain or are leases, classification of sales taxes, noncashleases and the remaining lease terms. The Company has also made an accounting policy election to exclude leases with an initial term of twelve months or less from recognition on the consolidated balance sheet. Short-term leases will instead be expensed over the lease term. The Company also elected to not separate the consideration in the lease contracts between the lease and completed contracts and contract modifications at transition as well as adds some practical expedients. In December 2016, the FASB issued ASU No. 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers,” to clarify or to correct unintended applications of Topic 606, including disclosure requirements related to performance obligations. The amendments in ASU 2014-09, ASU 2016-08, ASU 2016-10, ASU 2016-12 and ASU 2016-20 may be applied either retrospectively to each prior period presented or retrospectively with the cumulative effect of initially applying ASU 2014-09, ASU 2016-08, ASU 2016-10, ASU 2016-12 and ASU 2016-20 at the date of initial application. non-lease components.
The Company is currently evaluatingfinalizing the impactimplementation of adopting ASU 2014-09, ASU 2016-08, ASU 2016-10, ASU 2016-12new lease accounting software, which will perform the accounting for the lease portfolio and ASU 2016-20 on its consolidated financial statements.
Theprovide the required disclosures under Topic 842. Upon adoption, the Company will adopt the new revenue guidance effectiveexpects to recognize a right-of-use asset in the first quarterrange of 2018 using the modified retrospective transition method applied$150 million to those contracts which were not completed at that date. The only identified impact to the Company’s financial statements relates to barter revenue and expense as well as barter related broadcast rights and contracts payable for broadcast rights which will no longer be recognized. Barter revenue and expense for fiscal years 2017, 2016 and 2015 were $28 million, $30$165 million and $29a right-of-use liability in the range of $165 million respectively. Barter-related broadcast rights and contracts payable for broadcast rights on theto $180 million. The Company’s Consolidated Balance Sheets were $45 million and $37deferred rent balance of $18 million as of December 31, 2017 and December 31, 2016, respectively. The broadcast rights and contracts payable for broadcast rights2018 will be written off atreclassified to the right-of-use asset upon adoption. The standardCompany also requires capitalization of certain costs; however,expects as part of the implementation process, the Company did not identify any costs that should be capitalized under the new guidance. The following isadoption to recognize a summarycumulative-effect adjustment to retained earnings of the evaluation by revenue stream within the Television and Entertainment segment.
Advertising Revenues—Under the new guidance, advertising revenue will be recognized over time primarily as ads are aired or impressions are delivered, which is consistent with current practice. Advertising revenue will continue to be recognizedapproximately $13 million, net of agency commissions.
Retransmission Revenues and Carriage Fees—Revenue under the Company’s retransmission and carriage agreements are considered licenses of functional intellectual property under the new guidance. Basedtax, which represents deferred gains previously recorded on the guidance, the Company will recognize revenue at the point in time the content is transferredconsolidated balance sheet related to the customer, which will result in revenue recognition that is consistent with current practice.historical sale lease-back transactions.
The adoption is not expected to have a material impact on the Company’s financial statements and internal control over financial reporting.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 2: DISCONTINUED OPERATIONS
Sale of Digital and Data Businesses—On December 19, 2016, the Company entered into a definitive share purchase agreement (the “Gracenote SPA”) with Nielsen Holding and Finance B.V. (“Nielsen”) to sell equity interests in substantially all of the Digital and Data business operations which includesincluded Gracenote Inc., Gracenote Canada, Inc., Gracenote Netherlands Holdings B.V., Tribune Digital Ventures LLC and Tribune International Holdco, LLC (the “Gracenote Companies”) for $560 million in cash, subject to certain purchase price adjustments (the “Gracenote Sale”). The Company retained its ownership of Covers, which was previously included in the Digital and Data reportable segment, and reclassified Covers’ previously reported amounts into the Television and Entertainment reportable segment to conform to the current segment presentation; the impact of this reclassification was immaterial. The Gracenote Sale transaction was completed on January 31, 2017 and the Company received gross proceeds of $581 million. In the second quarter of 2017, the Company received additional proceeds of $3 million as a result of purchase price adjustments. In the year ended December 31, 2017, the Company recognized a pretax gain of $33 million as a result of the Gracenote Sale. On February 1, 2017, the Company used $400 million


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

of proceeds from the Gracenote Sale to prepay a portion of its Term Loan Facility (as defined and described in Note 9)7).
As of December 31, 2016, the assets and liabilities The operating results of the businesses included in the Gracenote Sale are reflected as assetsfor the years ended December 31, 2017 and liabilities of discontinued operations in the Company’s Consolidated Balance Sheets, and the operating resultsDecember 31, 2016 are presented as discontinued operations in the Company’s Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income (Loss) for all periods presented..
The Company entered into a transition services agreement (the “Nielsen TSA”) and certain other agreements with Nielsen that governgoverned the relationships between Nielsen and the Company following the Gracenote Sale. The Nielsen TSA expired on March 31, 2018. Pursuant to the Nielsen TSA, the Company providesprovided Nielsen with certain specified services on a transitional basis, including support in areas such as human resources, treasury, technology, legal and finance. In addition, the Nielsen TSA outlinesoutlined the services that Nielsen providesprovided to the Company on a transitional basis, including in areas such as human resources, technology, and finance and other areas where the Company may need assistance and information following the Gracenote Sale. The transition services agreement was extended through March 31, 2018, however, upon mutual agreement between the Company and Nielsen, it may be extended further.finance. The charges for the transition services generally allowallowed the providing company to fully recover all out-of-pocket costs and expenses it actually incursincurred in connection with providing the services, plus, in some cases, the allocated direct costs of providing the services, generally without profit. Based on the Company’s assessment of the specific factors identified in ASC Topic 205, “Presentation of Financial Statements,” the Company concluded that it willdid not have significant continuing involvement in the Gracenote Companies.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table represents the components of the results from discontinued operations associated with the Gracenote Sale as reflected in the Company’s Consolidated Statements of Operations (in thousands):
Year EndedYear Ended
December 31, 2017 (1) December 31, 2016 December 31, 2015December 31, 2017 (1) December 31, 2016
Operating revenues$18,168
 $225,903
 $209,964
$18,168
 $225,903
Direct operating expenses7,292
 75,457
 59,789
7,292
 75,457
Selling, general and administrative15,349
 110,713
 104,968
15,349
 110,713
Depreciation (2)—
 13,584
 9,735
—
 13,584
Amortization (2)—
 29,999
 28,826
—
 29,999
Operating (loss) profit(4,473) (3,850) 6,646
Operating loss(4,473) (3,850)
Interest income16
 96
 109
16
 96
Interest expense (3)(1,261) (15,317) (15,843)(1,261) (15,317)
Other non-operating gain, net—
 —
 912
Loss before income taxes(5,718) (19,071) (8,176)(5,718) (19,071)
Pretax gain on the disposal of discontinued operations33,492
 —
 —
33,492
 —
Total pretax income (loss) on discontinued operations27,774
 (19,071) (8,176)27,774
 (19,071)
Income tax expense (benefit) (4)13,354
 53,723
 (3,595)
Income tax expense (4)13,354
 53,723
Income (loss) from discontinued operations, net of taxes$14,420
 $(72,794) $(4,581)$14,420
 $(72,794)
 
(1)Results of operations for the Gracenote Companies are reflected through January 31, 2017, the date of the Gracenote Sale.
(2)No depreciation expense or amortization expense was recorded by the Company in 2017 as the Gracenote Companies’ assets were held for sale as of December 31, 2016.
(3)The Company used $400 million of proceeds from the Gracenote Sale to prepay a portion of its outstanding borrowings under the Company’s Term Loan Facility (as defined and described in Note 9)7). Interest expense associated with the Company’s outstanding Term Loan Facility was allocated to discontinued operations based on the ratio of the $400 million prepayment to the total outstanding indebtedness under the Term Loan Facility in effect in each respective period.
(4)In the fourth quarter of 2016, as a result of meeting all criteria under ASC Topic 205 to classify Gracenote Companies as discontinued operations, the Company recorded tax expense of $62 million to increase the Company’s deferred tax liability for the outside basis difference related to the Gracenote Companies included in the Gracenote Sale. This charge was required to be recorded in the period the Company signed a definitive agreement to divest the business. Exclusive of this $62 million charge, the effective tax rates on pretax income from discontinued operations was 48.1%, and 45.0% and 44.0% for the years ended December 31, 2017 December 31, 2016, and December 31, 2015,2016, respectively. These rates differ from the U.S. federal statutory rate of 35% primarily due to state income taxes (net of federal benefit), foreign tax rate differences, and the impact of certain nondeductible transaction costs and other adjustments.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The results of discontinued operations include selling costs and transactions costs, including legal and professional fees incurred by the Company to complete the Gracenote Sale, of $10 million for the year ended December 31, 2017 and $3 million for each of the yearsyear ended December 31, 2016 and December 31, 2015.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following is a summary of the assets and liabilities of discontinued operations (in thousands):
  December 31, 2016
Carrying Amounts of Major Classes of Current Assets Included as Part of Discontinued Operations  
Cash and cash equivalents $12,751
Accounts receivable, net 38,727
Prepaid expenses and other 11,127
Total current assets of discontinued operations 62,605
   
Carrying Amounts of Major Classes of Non-Current Assets Included as Part of Discontinued Operations  
Property, plant and equipment, net 49,348
Goodwill 333,258
Other intangible assets, net 219,287
Other long-term assets 6,260
Total non-current assets of discontinued operations 608,153
Total Assets Classified as Discontinued Operations in the Consolidated Balance Sheets $670,758
   
Carrying Amounts of Major Classes of Current Liabilities Included as Part of Discontinued Operations  
Accounts payable $6,237
Employee compensation and benefits 17,011
Deferred revenue 27,113
Accrued expenses and other current liabilities 3,923
Total current liabilities of discontinued operations 54,284
   
Carrying Amounts of Major Classes of Non-Current Liabilities Included as Part of Discontinued Operations  
Deferred income taxes 89,029
Postretirement, medical, life and other benefits 2,786
Other obligations 3,499
Total non-current liabilities of discontinued operations 95,314
Total Liabilities Classified as Discontinued Operations in the Consolidated Balance Sheets $149,598
   
Net Assets Classified as Discontinued Operations $521,160
2016.
The Gracenote SPA provides for indemnification against specified losses and damages which became effective upon completion of the transaction. The Company does not expect to incur material costs in connection with these indemnifications. The Company has no material contingent liabilities relating to the Gracenote Sale as of December 31, 2017.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2018.
The following table represents the components of the results from discontinued operations associated with the Gracenote Sale as reflected in the Company’s Consolidated Statements of Cash Flows (in thousands):
2017 (1) 2016 20152017 (1) 2016
Significant operating non-cash items:        
Stock-based compensation$1,992
 $4,196
 $2,239
$1,992
 $4,196
Depreciation (2)—
 13,584
 9,735
—
 13,584
Amortization (2)—
 29,999
 28,826
—
 29,999
        
Significant investing items (3):        
Acquisitions, net of cash acquired—
 —
 (58,996)
Capital expenditures1,578
 23,548
 23,626
1,578
 23,548
Net proceeds from sale of business (4)557,793
 —
 —
554,487
 —
        
Significant financing items (3):        
Settlements of contingent consideration, net—
 (3,636) 1,174
—
 (3,636)
 
(1)Results of operations for the Gracenote Companies are reflected through January 31, 2017, the date of the Gracenote Sale.
(2)No depreciation expense or amortization expense was recorded by the Company in 2017 as the Gracenote Companies’ assets were held for sale as of December 31, 2016.
(3)Non-cash investing and financing activities of Digital and Data businesses included in the Gracenote Sale were immaterial.
(4)Net proceeds from the sale of business reflects the gross proceeds from the Gracenote sale of $584 million, net of $17$20 million of the Gracenote Companies’ cash, and cash equivalents and restricted cash included in the sale and $9 million of selling costs.    
NOTE 3: PROCEEDINGS UNDER CHAPTER 11
Chapter 11 Reorganization—On December 8, 2008 (the “Petition Date”), Tribune Company and 110 of its direct and indirect wholly-owned subsidiaries (collectively, the “Debtors”) filed voluntary petitions for relief (collectively, the “Chapter 11 Petitions”) under chapter 11 (“Chapter 11”) of title 11 of the United States Code (the “Bankruptcy Code”) in the U.S. Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). On October 12, 2009, Tribune CNLBC, LLC (formerly known as Chicago National League Ball Club, LLC) (“Tribune CNLBC”), which held the majority of the assets and liabilities related to the businesses of the Chicago Cubs Major League Baseball franchise (the “Chicago Cubs”), also filed a Chapter 11 Petition and thereafter became a Debtor. As further described below, a plan of reorganization for the Debtors became effective and the Debtors emerged from Chapter 11 on December 31, 2012 (the “Effective Date”). The Bankruptcy Court has entered final decrees that have collectively closed 106 of the Debtors’ Chapter 11 cases. The remaining Debtors’ Chapter 11 proceedings continue to be jointly administered under the caption In re Tribune Media Company, et al., Case No. 08-13141.
From the Petition Date and until the Effective Date, the Debtors operated their businesses as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure and applicable orders of the Bankruptcy Court. In general, as debtors-in-possession, the Debtors were authorized under Chapter 11 of the Bankruptcy Code to continue to operate as ongoing businesses, but could not engage in transactions outside the ordinary course of business without the prior approval of the Bankruptcy Court. Where appropriate, the Company and its business operations as conducted on or prior to December 30, 2012 are also herein referred to collectively as the “Predecessor.” The Company and its business operations as conducted on or subsequent to the Effective Date are also herein referred to collectively as the “Successor,” “Reorganized Debtors” or “Reorganized Tribune Company.”


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Plan of Reorganization—In order to emerge from Chapter 11, a Chapter 11 plan that satisfies the requirements of the Bankruptcy Code and provides for emergence from bankruptcy as a going concern must be proposed and confirmed by a bankruptcy court. A plan of reorganization addresses, among other things, prepetition obligations, sets forth the revised capital structure of the newly-reorganized entities and provides for their corporate governance subsequent to emergence from court supervision under Chapter 11.
On April 12, 2012, the Debtors, Oaktree Capital Management, L.P. (“Oaktree”), Angelo, Gordon & Co. L.P. (“AG”), the Creditors’ Committee (defined below) and JPMorgan Chase Bank, N.A. (“JPMorgan” and, together with the Debtors, Oaktree, AG and the Creditors’ Committee, the “Plan Proponents”) filed the Fourth Amended Joint Plan of Reorganization for Tribune Company and its Subsidiaries with the Bankruptcy Court (as subsequently modified by the Plan Proponents, the “Plan”). On July 23, 2012, the Bankruptcy Court issued an order confirming the Plan (the “Confirmation Order”). The Plan constitutes a separate plan of reorganization for each of the Debtors and sets forth the terms and conditions of the Debtors’ reorganization. See the “Terms of the Plan” section below for a description of the terms and conditions of the confirmed Plan.
The Debtors’ plan of reorganization was the product of extensive negotiations and contested proceedings before the Bankruptcy Court, principally relating to the resolution of certain claims and causes of action arising between certain of the Company’s creditors in connection with the series of transactions (collectively, the “Leveraged ESOP Transactions”) consummated by the Predecessor and the Tribune Company employee stock ownership plan (the “ESOP”), EGI-TRB, L.L.C., a Delaware limited liability company wholly-owned by Sam Investment Trust (a trust established for the benefit of Samuel Zell and his family) (the “Zell Entity”) and Samuel Zell in 2007.
The Debtors’ emergence from bankruptcy as a restructured company was subject to the consent of the Federal Communications Commission (the “FCC”) for the assignment of the Debtors’ FCC broadcast and auxiliary station licenses to the Reorganized Debtors. On April 28, 2010, the Debtors filed applications with the FCC to obtain FCC approval for the assignment of the FCC licenses from the Debtors as “debtors-in possession” to the Reorganized Debtors. On November 16, 2012, the FCC released a Memorandum Opinion and order (the “Exit Order”) granting the Company’s applications to assign its broadcast and auxiliary station licenses from the debtors-in-possession to the Company’s licensee subsidiaries. In the Exit Order, the FCC granted the Reorganized Debtors a permanent newspaper/broadcast cross-ownership waiver in the Chicago market, temporary newspaper/broadcast cross-ownership waivers in the New York, Los Angeles, Miami-Fort Lauderdale and Hartford-New Haven markets and two other waivers permitting common ownership of television stations in Connecticut and Indiana. See the “FCC Regulation” section of Note 12 for further information.
Following receipt of the FCC’s consent to the implementation of the Plan, but prior to the Effective Date, the Company and its subsidiaries consummated an internal restructuring, pursuant to and in accordance with the terms of the Plan. These restructuring transactions included, among other things, (i) converting certain of the Company’s subsidiaries into limited liability companies or merging certain of the Company’s subsidiaries into newly-formed limited liability companies, (ii) consolidating and reallocating certain operations, entities, assets and liabilities within the organizational structure of the Company and (iii) establishing a number of real estate holding companies.
On the Effective Date, all of the conditions precedent to the effectiveness of the Plan were satisfied or waived, the Debtors emerged from Chapter 11, and the settlements, agreements and transactions contemplated by the Plan to be effected on the Effective Date were implemented, including, among other things, the appointment of a new board of directors and the initiation of distributions to creditors. As a result, the ownership of the Company changed from the ESOP to certain of the Company’s creditors on the Effective Date. On January 17, 2013, the board of directors of Reorganized Tribune Company (the “Board”) appointed a chairman of the Board and a new chief executive officer. Such appointments were effective immediately.
In connection with the Debtors’ emergence from Chapter 11, on the Effective Date and in accordance with and subject to the terms of the Plan, (i) the ESOP was deemed terminated in accordance with its terms, (ii) the unpaid principal and interest remaining on the promissory note of the ESOP in favor of the Company was forgiven, (iii) all of the Company’s $0.01 par value common stock held by the ESOP was canceled, including the 8,294,000 of the shares held by the ESOP that were committed for release or allocated to employees at December 30, 2012 (as further


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

described below) and (iv) new shares of the Company were issued to shareholders who did not meet the necessary criteria to qualify as a subchapter S corporation shareholder. As a result, Reorganized Tribune Company converted from a subchapter S corporation to a C corporation under the IRC. On the Effective Date, the $37 million reported as common shares held by the ESOP, net of unearned compensation, was eliminated, the Predecessor Warrants (as defined and described below) were cancelled and the $225 million subordinated promissory note due December 20, 2018 (including accrued and unpaid interest) was terminated and extinguished.
Terms of the Plan—The following is a summary of the material settlements and other agreements entered into, distributions made and transactions consummated by the Company on or about the Effective Date pursuant to, and in accordance with, the terms of the Plan. The following summary only highlights certain of the substantive provisions of the Plan and is not intended to be a complete description of, or a substitute for a full and complete reading of, the Plan and the agreements and other documents related thereto, including those described below.
Cancellation of certain prepetition obligations: On the Effective Date, the Debtors’ prepetition equity (other than equity interests in subsidiaries of Tribune Company), debt and certain other obligations were cancelled, terminated and/or extinguished, including: (i) the 56,521,739 shares of the Predecessor’s $0.01 par value common stock held by the ESOP, (ii) the warrants to purchase 43,478,261 shares of the Predecessor’s $0.01 par value common stock held by the Zell Entity and certain other minority interest holders, (iii) the aggregate $225 million subordinate promissory notes (including accrued and unpaid interest) held by the Zell Entity and certain other minority interest holders, (iv) all of the Predecessor’s other outstanding notes and debentures and the indentures governing such notes and debentures (other than for purposes of allowing holders of the notes to receive distributions under the Plan and allowing the trustees for the senior noteholders and the holders of the Predecessor’s Exchangeable Subordinated Debentures due 2029 (“PHONES”) to exercise certain limited rights), and (v) the Predecessor’s prepetition credit facilities applicable to the Debtors (other than for purposes of allowing creditors under a $8.028 billion senior secured credit agreement (as amended, the “Credit Agreement”) to receive distributions under the Plan and allowing the administrative agent for such facilities to exercise certain limited rights).
Assumption of prepetition executory contracts and unexpired leases: On the Effective Date, any prepetition executory contracts or unexpired leases of the Debtors that were not previously assumed or rejected pursuant to Section 365 of the Bankruptcy Code or rejected pursuant to the Plan were deemed assumed by the applicable Reorganized Debtors, including certain prepetition executory contracts for broadcast rights.
Distributions to Creditors: On the Effective Date (or as soon as practicable thereafter), (i) holders of allowed senior loan claims received approximately $2.9 billion in cash, approximately 98.2 million shares of Common Stock and Warrants (as defined and described below), plus interests in the Litigation Trust (as defined and described below), (ii) holders of allowed claims related to a $1.6 billion twelve-month bridge facility entered into on December 20, 2007 (the “Bridge Facility”) received a pro rata share of $65 million in cash (equal to approximately 3.98% of their allowed claim) plus interests in the Litigation Trust (as defined and described below), (iii) holders of allowed senior noteholder claims (including the fee claims of indenture trustees for the senior notes) received a pro rata share of either $431 million of cash or a “strip” of consideration consisting of 6.27% of the proceeds from a term loan facility, common stock or warrants in the Company and cash (collectively, a “Strip”) (on average, equal to approximately 33.3% of their allowed claim) plus interests in the Litigation Trust (as defined and described below), (iv) holders of allowed other parent claims received either (a) cash or a Strip in an amount equal to approximately 35.18% of their allowed claim plus a pro rata share of additional cash or a Strip, as applicable, of approximately $2 million or (b) cash or a Strip in an amount equal to approximately 32.73% of their allowed claim plus a pro rata share of additional cash or a Strip, as applicable, of approximately $2 million plus interests in the Litigation Trust (as defined and described below), (v) holders of allowed general unsecured claims against the Debtors other than Tribune Company and convenience claims against the Company received cash in an amount equal to 100% of their allowed claim, and (vi) holders of unclassified claims, priority non-tax claims and certain other secured claims received cash in an amount equal to 100% of their allowed claim.


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In the aggregate, the Company distributed approximately $3.516 billion of cash, approximately 100 million shares of Common Stock and Warrants (as defined and described below) with a fair value determined pursuant to the Plan of approximately $4.536 billion and interests in the Litigation Trust (as defined and described below). In addition, the Company transferred $187 million of cash to certain restricted accounts for the limited purpose of funding certain future claim payments and professional fees.
In addition, on the Effective Date, letters of credit issued under the Predecessor’s debtor-in-possession facility were replaced with new letters of credit under a new revolving credit facility and subsequently terminated. All allowed priority tax and non-tax claims and other secured claims not paid on the Effective Date and subsidiary interests were reinstated and allowed administrative expense claims will be paid in full when due.
Issuance of new equity securities: As of the Effective Date, the Company issued 78,754,269 shares of Class A Common Stock, par value $0.001 per share, and 4,455,767 shares of Class B Common Stock, par value $0.001 per share. Any holder (with the exception of AG, JPMorgan and Oaktree, each of which previously submitted ownership information to the FCC) who possessed greater than 4.99% of the Class A Common Stock after allocation of the Warrants and holders making voluntary elections, was instead allocated Class B Common Stock until such holder’s Class A Common Stock represented no more than 4.99% of the Company’s Class A Common Stock in order to comply with the FCC ownership rules and requirements. The Class A Common Stock and Class B Common Stock generally provide identical economic rights, but holders of the Class B Common Stock have limited voting rights, including that such holders have no right to vote in the election of directors. Subject to the ownership limitation noted above, each share of Class A Common Stock is convertible into one share of Class B Common Stock and each share of Class B Common Stock is convertible into one share of Class A Common Stock, in each case, at the option of the holder at any time. In addition, on the Effective Date, the Company entered into a warrant agreement (the “Warrant Agreement”), pursuant to which the Company issued 16,789,972 warrants to purchase Common Stock (the “Warrants”). The Company issued the Warrants in lieu of Common Stock to creditors that were otherwise eligible to receive Common Stock in connection with the implementation of the Plan in order to comply with the FCC’s foreign ownership restrictions.
Furthermore, pursuant to the Company’s certificate of incorporation and the Warrant Agreement, in the event the Company determines that the ownership or proposed ownership of Common Stock or Warrants, as applicable, would be inconsistent with or violate any federal communications laws, materially limit or impair any business activities or proposed business activities of the Company under any federal communications laws, or subject the Company to any regulation under any federal communications laws to which the Company would not be subject, but for such ownership or proposed ownership, the Company may, among other things: (i) require a holder of Common Stock or Warrants to promptly furnish information reasonably requested by the Company, including information with respect to citizenship, ownership structure, and other ownership interests and affiliations; (ii) refuse to permit a proposed transfer or conversion of Common Stock, or condition transfer or conversion on the prior consent of the FCC; (iii) refuse to permit a proposed exercise of Warrants, or condition exercise on the prior consent of the FCC; (iv) suspend the rights of ownership of the holders of Common Stock or Warrants; (v) require the conversion of any or all shares of Common Stock held by a stockholder into shares of any other class of capital stock of the Company with equivalent economic value, including the conversion of shares of Class A Common Stock into shares of Class B Common Stock or the conversion of shares of Class B Common Stock into shares of Class A Common Stock; (vi) require the exchange of any or all shares of Common Stock held by any stockholder of the Company for Warrants to acquire the same number and class of shares of capital stock in the Company; (vii) to the extent the foregoing are not reasonably feasible, redeem any or all such shares of Common Stock; or (viii) exercise other appropriate remedies, at law or in equity, in any court of competent jurisdiction to prevent or cure any such situation. As permitted under the Plan, the Reorganized Debtors have adopted an equity incentive plan for the purpose of granting awards to directors, officers and employees of the Company and its subsidiaries.


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Registration Rights Agreement: On the Effective Date, the Company entered into a registration rights agreement (the “Registration Rights Agreement”) with certain entities related to AG (the “AG Group”), Oaktree Tribune, L.P., an affiliate of Oaktree (the “Oaktree Group”) and Isolieren Holding Corp., an affiliate of JPMorgan (the “JPM Group,” and each of the JPM Group, AG Group and Oaktree Group, a “Stockholder Group”) and certain other holders of Registrable Securities who become a party thereto. See Note 15 for further information.
Exit credit facilities: On the Effective Date, the Company entered into a $1.100 billion secured term loan facility with a syndicate of lenders led by JPMorgan (the “Term Loan Exit Facility”), the proceeds of which were used to fund certain required distributions to creditors under the Plan. In addition, on the Effective Date, the Company, along with certain of its reorganized operating subsidiaries as additional borrowers, entered into a secured asset-based revolving credit facility of up to $300 million, subject to borrowing base availability, with a syndicate of lenders led by Bank of America, N.A. (the “ABL Exit Facility” and together with the Term Loan Exit Facility, the “Exit Financing Facilities”) to fund ongoing operations. The Exit Financing Facilities were terminated and repaid in full on December 27, 2013.
Settlement of certain causes of action related to the Leveraged ESOP Transactions: The Plan provided for the settlement of certain causes of action arising in connection with the Leveraged ESOP Transactions, against the lenders under the Credit Agreement, JPMorgan as administrative agent under the Credit Agreement, the agents, arrangers, joint bookrunner and other similar parties under the Credit Agreement, the lenders under the Bridge Facility and the administrative agent under the Bridge Facility. It also included a “Step Two/Disgorgement Settlement” of claims for disgorgement of prepetition payments made by the Predecessor on account of the debt incurred in connection with the closing of the second step of the Leveraged ESOP Transactions on December 20, 2007 against parties who elected to participate in such settlement. These settlements resulted in incremental recovery to creditors other than lenders under the Credit Agreement and the Bridge Facility of approximately $521 million above their “natural” recoveries absent such settlements.
The Litigation Trust: On the Effective Date, except for those claims released as part of the settlements described above, all other causes of action related to the Leveraged ESOP Transactions held by the Debtors’ estates and preserved pursuant to the terms of the Plan (the “Litigation Trust Preserved Causes of Action”) were transferred to a litigation trust formed, pursuant to the Plan, to pursue the Litigation Trust Preserved Causes of Action for the benefit of certain creditors that received interests in the litigation trust as part of their distributions under the Plan (the “Litigation Trust”). The Litigation Trust is managed by an independent third party trustee (the “Litigation Trustee”) and advisory board and, pursuant to the terms of the agreements forming the Litigation Trust, the Company is not able to exert any control or influence over the administration of the Litigation Trust, the pursuit of the Litigation Trust Preserved Causes of Action or any other activities of the Litigation Trust. In connection with the formation of the Litigation Trust, and pursuant to the terms of the Plan, the Company entered into a credit agreement (the “Litigation Trust Loan Agreement”) with the Litigation Trust whereby the Company made a non-interest bearing loan of $20 million in cash to the Litigation Trust on the Effective Date. Subject to the Litigation Trust’s right to maintain an expense fund of up to $25 million, under the terms of the Litigation Trust Loan Agreement, the Litigation Trust is required to repay to the Company the principal balance of the loan with the proceeds received by the Litigation Trust from the pursuit of the Litigation Trust Preserved Causes of Action only after the first $90 million in proceeds, if any, are disbursed to certain holders of interests in the Litigation Trust. Concurrent with the disbursement of the $20 million loan to the Litigation Trust on the Effective Date, the Predecessor recorded a valuation allowance of $20 million against the principal balance of the loan given the uncertainty as to the timing and amount of principal repayments to be received in the future. In addition, pursuant to certain agreements entered into between the Company and the Litigation Trust, on the Effective Date in accordance with the Plan, the Company is required to reasonably cooperate with the Litigation Trustee in connection with the Litigation Trustee’s pursuit of the Litigation Trust Preserved Causes of Action by providing reasonable access to records and information relating to the Litigation Trust


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Preserved Causes of Action, provided, however, that the Litigation Trust is required to reimburse the Company for reasonable and documented out-of-pocket expenses, subject to limited exceptions, in performing its obligations under such agreements up to a cap of $625,000. The Company has the right to petition the Bankruptcy Court to increase the cap upon a showing that the Company’s costs significantly exceed $625,000. On January 4, 2013, the Company filed a notice with the Bankruptcy Court stating that, in the opinion of the independent valuation expert retained by the Company, the fair market value of the Litigation Trust Preserved Causes of Action as of the Effective Date was $358 million.
Other Plan provisions: The Plan and Confirmation Order also contain various discharges, injunctive provisions and releases that became operative on the Effective Date.
Since the Effective Date, the Company has substantially consummated the various transactions contemplated under the Plan. In particular, the Company has made all distributions of cash, Common Stock and Warrants that were required to be made under the terms of the Plan to creditors holding allowed claims as of December 31, 2012. Claims of general unsecured creditors that become allowed claims on or after the Effective Date have been or will be paid on the next quarterly distribution date after such allowance.
Pursuant to the terms of the Plan, the Company is also obligated to make certain additional payments to certain creditors, including certain distributions that may become due and owing subsequent to the Effective Date and certain payments to holders of administrative expense priority claims and fees earned by professional advisors during the Chapter 11 proceedings. As described above, on the Effective Date, the Company held restricted cash of $187 million which is estimated to be sufficient to satisfy such obligations. At December 31, 2017, restricted cash held by the Company to satisfy the remaining claim obligations was $18 million and is estimated to be sufficient to satisfy such obligations. If the aggregate allowed amount of the remaining claims exceeds the restricted cash held for satisfying such claims, the Company would be required to satisfy the allowed claims from its cash on hand from operations.
Confirmation Order Appeals—Notices of appeal of the Confirmation Order were filed on July 23, 2012 by (i) Aurelius Capital Management, LP (“Aurelius”), on behalf of its managed entities that were holders of the Predecessor’s senior notes and PHONES and (ii) Law Debenture Trust Company of New York (“Law Debenture”), successor trustee under the indenture for the Predecessor’s prepetition 6.61% debentures due 2027 and the 7.25% debentures due 2096, and Deutsche Bank Trust Company Americas (“Deutsche Bank”), successor trustee under the indentures for the Predecessor’s prepetition medium-term notes due 2008, 4.875% notes due 2010, 5.25% notes due 2015, 7.25% debentures due 2013 and 7.5% debentures due 2023. Additional notices of appeal were filed on August 2, 2012 by Wilmington Trust Company (“WTC”), as successor indenture trustee for the PHONES, and on August 3, 2012 by the Zell Entity (the Zell Entity, together with Aurelius, Law Debenture, Deutsche Bank and WTC, the “Appellants”). The confirmation appeals were transmitted to the United States District Court for the District of Delaware (the “Delaware District Court”) and were consolidated, together with two previously-filed appeals by WTC of the Bankruptcy Court’s orders relating to certain provisions in the Plan, under the caption Wilmington Trust Co. v. Tribune Co. (In re Tribune Co.), and under lead Case No. 12-cv-128 (GMS).
The Appellants sought, among other relief, to overturn the Confirmation Order and certain prior orders of the Bankruptcy Court embodied in the Plan, including the settlement of certain claims and causes of action related to the Leveraged ESOP Transactions that was embodied in the Plan (see above for a description of the terms and conditions of the confirmed Plan). WTC and the Zell Entity also sought to overturn determinations made by the Bankruptcy Court concerning the priority in right of payment of the PHONES and the subordinated promissory notes held by the Zell Entity and its permitted assignees, respectively. There is currently no stay of the Confirmation Order in place pending resolution of the confirmation-related appeals. In January 2013, the Company filed a motion to dismiss the appeals as equitably moot, based on the substantial consummation of the Plan. On June 18, 2014, the Delaware District Court entered an order granting in part and denying in part the motion to dismiss. The effect of the order was to dismiss all of the appeals, with the exception of the relief requested by the Zell Entity concerning the priority in right of payment of the subordinated promissory notes held by the Zell Entity and its permitted assignees with respect to any state law fraudulent transfer claim recoveries from a Creditor Trust that was proposed to be


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

formed under a prior version of the Plan, but was not formed under the Plan as confirmed by the Bankruptcy Court. The Delaware District Court vacated the Bankruptcy Court’s ruling to the extent it opined on that issue. On July 16, 2014, Aurelius, Law Debenture and Deutsche Bank timely appealed the Delaware District Court’s order to the U.S. Court of Appeals for the Third Circuit. On August 19, 2015, the Third Circuit affirmed the Delaware District Court’s dismissal of Aurelius’s appeal of the Confirmation Order. The Third Circuit, however, reversed the Delaware District Court’s dismissal of Law Debenture’s and Deutsche Bank’s appeals of the Confirmation Order, and remanded those appeals to the District Court for further proceedings on the merits. On September 11, 2015, the Third Circuit denied Aurelius’s petition for en banc review of the court’s decision and on January 11, 2016, Aurelius filed a petition for writ of certiorari to the U.S. Supreme Court. That petition was denied on March 31, 2016. If the remaining Appellants succeed on their appeal, the Company’s financial condition may be adversely affected.
Certain Causes of Action Arising From the Leveraged ESOP Transactions—On April 1, 2007, the Predecessor’s board of directors (the “Predecessor Board”), based on the recommendation of a special committee of the Predecessor Board comprised entirely of independent directors, approved the Leveraged ESOP Transactions with the ESOP, the Zell Entity and Samuel Zell. On December 20, 2007, the Predecessor completed the Leveraged ESOP Transactions, which culminated in the cancellation of all issued and outstanding shares of the Predecessor’s common stock as of that date, other than shares held by the Predecessor or the ESOP, and with the Predecessor becoming wholly-owned by the ESOP. The Leveraged ESOP Transactions consisted of a series of transactions that included the following:
On April 1, 2007, the Predecessor entered into an Agreement and Plan of Merger (the “Merger Agreement”) with GreatBanc Trust Company, not in its individual or corporate capacity, but solely as trustee of the Tribune Employee Stock Ownership Trust, a separate trust which forms a part of the ESOP, Tesop Corporation, a Delaware corporation wholly-owned by the ESOP (“Merger Sub”), and the Zell Entity (solely for the limited purposes specified therein) providing for Merger Sub to be merged with and into Tribune Company, and following such merger, the Predecessor to continue as the surviving corporation wholly-owned by the ESOP (the “Merger”).
On April 1, 2007, the ESOP purchased 8,928,571 shares of the Predecessor’s common stock at a price of $28.00 per share. The ESOP paid for this purchase with a promissory note in the principal amount of $250 million, to be repaid by the ESOP over the 30-year life of the loan through its use of annual contributions from the Predecessor to the ESOP and/or distributions paid on the shares of common stock held by the ESOP. Upon consummation of the Merger (as described below), the 8,928,571 shares of the Predecessor’s common stock held by the ESOP were converted into 56,521,739 shares of common stock and represented the only outstanding shares of capital stock of the Predecessor after the Merger. Approximately 8,294,000 of the shares held by the ESOP were committed for release or allocated to employees at December 30, 2012. On April 25, 2007, the Predecessor commenced a tender offer to repurchase up to 126 million shares of common stock that were then outstanding at a price of $34.00 per share in cash (the “Share Repurchase”). The tender offer expired on May 24, 2007 and 126 million shares of the Predecessor’s common stock were repurchased for an aggregate purchase price of $4.289 billion on June 4, 2007 utilizing proceeds from the Credit Agreement and subsequently retired.
On December 20, 2007, the Predecessor completed its merger with Merger Sub, with the Predecessor surviving the Merger. Pursuant to the terms of the Merger Agreement, each share of common stock, par value $0.01 per share, issued and outstanding immediately prior to the Merger, other than shares held by the Predecessor, the ESOP or Merger Sub immediately prior to the Merger (in each case, other than shares held on behalf of third parties) and shares held by shareholders who validly exercised appraisal rights, was cancelled and automatically converted into the right to receive $34.00, without interest and less any applicable withholding taxes, and the Predecessor became wholly-owned by the ESOP. As a result, the Predecessor repurchased approximately 119 million shares for an aggregate purchase price of $4.032 billion.


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In the Merger, the Zell Entity received cash for the shares of the Predecessor’s common stock it had acquired pursuant to the Zell Entity Purchase Agreement and the Predecessor repaid the exchangeable promissory note held by the Zell Entity including approximately $6 million of accrued interest. In addition, the Predecessor paid to the Zell Entity a total of $5 million in legal fee reimbursements, of which $3 million was previously paid following the Share Repurchase described above. Following the consummation of the Merger, the Zell Entity purchased, for an aggregate of $315 million, a $255 million subordinated promissory note at stated interest rate of 4.64% and a 15-year warrant (the “Predecessor Warrants”). For accounting purposes, the subordinated promissory note and 15-year warrant were recorded at fair value of $255 million based on the relative fair value method. The warrant entitled the Zell Entityto purchase 43,478,261 shares of the Predecessor’s common stock (subject to adjustment), which then represented approximately 40% of the economic equity interest in the Predecessor following the Merger (on a fully-diluted basis, including after giving effect to share equivalents granted under a new management equity incentive plan which is described in Note 16). The warrant had an initial aggregate exercise price of $500 million, increasing by $10 million per year for the first 10 years of the warrant, for a maximum aggregate exercise price of $600 million (subject to adjustment). Thereafter and prior to the Petition Date, the Zell Entity assigned minority interests in the initial subordinated promissory note and the warrant, totaling approximately $65 million of the aggregate principal amount of the subordinated promissory note and warrants to purchase 12,611,610 shares, to certain permitted assignees, including entities controlled by certain members of the Predecessor’s board of directors and certain senior employees of Equity Group Investments, LLC, an affiliate of the Zell Entity. The subordinated promissory notes, which included $10 million of payable-in-kind interest recorded in 2008, were included in liabilities subject to compromise in the Predecessor’s Consolidated Balance Sheet at December 30, 2012. On the Effective Date, in accordance with the terms of the Plan, the warrants were cancelled and the $225 million subordinated promissory notes (including accrued and unpaid interest) were terminated and extinguished.
The Leveraged ESOP Transactions and certain debt financings were the subject of extensive review by the Debtors, including substantial document review and legal and factual analyses of these transactions as a result of the prepetition debt incurred and payments made by the Company in connection therewith. Additionally, the Creditors’ Committee and certain other constituencies undertook their own reviews and due diligence concerning these transactions, with which the Debtors cooperated.
On November 1, 2010, with authorization from the Bankruptcy Court, the Creditors’ Committee initiated two adversary proceedings: Official Comm. Of Unsecured Creditors v. JPMorganChase Bank, N.A. (In re Tribune Co.), Case No. 10-53963, (the “JPMorgan Complaint”) and Official Comm. Of Unsecured Creditors v. FitzSimons (In re Tribune Co.), Case No. 10-54010 (as subsequently modified, the “FitzSimons Complaint”), which assert claims and causes of action related to the Leveraged ESOP Transactions including, among other things, breach of duty, disgorgement, professional malpractice, constructive and intentional fraudulent transfer, and preferential transfer actions against certain of Tribune Company’s senior lenders and various non-lender parties, including current and former directors and officers of Tribune Company and its subsidiaries, certain advisors, certain former shareholders of Tribune Company and Samuel Zell and related entities. The Bankruptcy Court imposed a stay of proceedings with respect to the JPMorgan Complaint and the FitzSimons Complaint. With limited exceptions, the claims and causes of action set forth in the JPMorgan Complaint against JPMorgan and other senior lenders named as defendants therein were settled pursuant to the Plan. For administrative ease in effectuating the settlement embodied in the Plan, on April 2, 2012, the Creditors’ Committee initiated an additional adversary proceeding relating to the Leveraged ESOP Transactions against certain advisors to the Company, captioned Official Comm. Of Unsecured Creditors v. Citigroup Global Markets, Inc. and Merrill Lynch, Pierce, Fenner & Smith Inc. (In re Tribune Co.), Case No. 12-50446 (the “Committee Advisor Complaint”). The Committee Advisor Complaint re-states certain counts of the JPMorgan Complaint and seeks to avoid and recover the advisor fees paid to the defendants in connection with the Leveraged ESOP Transactions as alleged fraudulent and preferential transfers, seeks compensatory damages against the defendants for allegedly aiding and abetting breaches of fiduciary duty by the Company’s directors and officers, and seeks damages for professional malpractice against the defendants. The claims and causes of action set forth in the FitzSimons Complaint and the Committee Advisor Complaint were


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

preserved under the Plan and transferred to the Litigation Trust established pursuant to the Plan. Pursuant to certain agreements between the Company and the Litigation Trust, the Company is required to reasonably cooperate with the Litigation Trustee in connection with the Litigation Trustee’s pursuit of these and other Litigation Trust Preserved Causes of Action by providing reasonable access to records and information relating thereto.
On or about June 2, 2011, Deutsche Bank, Law Debenture and WTC, as indenture trustees for Tribune Company’s senior noteholders and PHONES, and, separately, certain retirees, filed approximately 50 complaints in over 20 different federal and state courts, seeking to recover amounts paid to all former shareholders of Tribune Company whose stock was purchased or cash settled in conjunction with the Leveraged ESOP Transactions under state law constructive fraudulent transfer causes of action (collectively and as subsequently amended, the “SLCFC Actions”). Those complaints named over 2,000 individuals and entities as defendants, included thousands of “doe” defendants, and also asserted defendant class actions against the balance of the approximately 38,000 individuals or entities who held stock that was purchased or redeemed via the Leveraged ESOP Transactions. The named defendants also included a Debtor subsidiary of the Company, certain then-current employees of the Company and certain of the Company’s benefit plans. The SLCFC Actions were independent of the Litigation Trust Preserved Causes of Action and were brought for the sole benefit of the senior noteholders and PHONES and/or certain retirees and not for the benefit of all of the Company’s creditors.
On August 16, 2011, the plaintiffs in the SLCFC Actions filed a motion to have all the SLCFC Actions removed to federal court during the pre-trial stages through multi-district litigation (“MDL”) proceedings before a single judge. All but one of these actions were transferred on December 19, 2011 (or by additional orders filed in early January 2012) to the United States District Court for the Southern District of New York (the “NY District Court”) under the consolidated docket numbers 1:11-md-02296 and 1:12-mc-02296 for pre-trial proceedings. The NY District Court entered a case management order on February 23, 2012 allowing all pending motions to amend the complaints in the SLCFC Actions and directing the defendants to form an executive committee representing defendants with aligned common interests. The NY District Court imposed a stay of proceedings with respect to the SLCFC Actions for all other purposes. The one SLCFC Action that was not transferred to the NY District Court is pending before a state court. However, no current or former employees, directors, officers or subsidiaries of the Company are named defendants in that action.
In related actions, on December 19, 2011, the Zell Entity and related entities filed two lawsuits in Illinois state court alleging constructive fraudulent transfer against former shareholders of Tribune Company. These suits proposed to protect the Zell Entity’s right to share in any recovery from fraudulent conveyance actions against former shareholders. These actions were independent of the Litigation Trust Preserved Causes of Action. By order dated June 11, 2012, the MDL panel transferred one of the lawsuits to the NY District Court to be heard with the consolidated SLCFC Actions in the MDL proceedings, while the other was subsequently voluntarily dismissed.
On March 15, 2012, the Bankruptcy Court entered an order, effective June 1, 2012, lifting the stay in each of the SLCFC Actions and the FitzSimons Complaint. On March 20, 2012, the MDL panel entered an order transferring the FitzSimons Complaint to the NY District Court to be heard with the consolidated SLCFC Actions in the MDL proceedings. By order dated August 3, 2012, the MDL panel transferred the Committee Advisor Complaint to the NY District Court to be heard with the FitzSimons Complaint and the consolidated SLCFC Actions in the MDL proceedings. By order dated May 21, 2013, the MDL panel transferred 18 Preference Actions (as defined and described below) seeking to recover certain payments made by Tribune Company to certain of its current and former executives in connection with the Leveraged ESOP Transactions from the Bankruptcy Court to the NY District Court for coordinated or consolidated pretrial proceedings with the other MDL proceedings.
The NY District Court presiding over the MDL proceedings held a case management conference on July 10, 2012 for the purpose of establishing the organizational structure of the cases, a schedule for motions to dismiss and discovery and other issues related to the administration of such proceedings, but otherwise stayed all other activity. On September 7, 2012, the NY District Court issued a case management order (“Master Case Order No. 3”) designating liaison counsel for the plaintiffs and various defendant groups and approved the formation of the executive committee for plaintiffs’ counsel and defendants’ counsel. In accordance with Master Case Order No. 3,


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

counsel for the defendants filed motions to dismiss the SLCFC Actions based on certain statutory and jurisdictional defenses (the “Phase One Motions to Dismiss”). The plaintiffs filed their responses to the Phase One Motions to Dismiss on December 21, 2012. The NY District Court heard oral arguments on the Phase One Motions to Dismiss on May 23, 2013 and on May 29, 2013 issued an order denying certain of those motions in their entirety and reserving a decision on certain defenses raised by the defendants. On September 23, 2013, the NY District Court entered an order dismissing the SLCFC Actions (except for the one action, pending in California state court, which had not been transferred to the MDL) and the related action filed by the Zell Entity that was consolidated with the SLCFC Actions. The plaintiffs in the SLCFC Actions filed a notice of appeal of that order on September 30, 2013. The defendants’ liaison counsel filed a joint notice of cross-appeal of that order on behalf of all represented defendants on October 28, 2013. No appeal of the order was lodged by the Zell Entity. On March 24, 2016, the U.S. Court of Appeals for the Second Circuit (the “Second Circuit”) issued a decision upholding the NY District Court’s dismissal of the SLCFC Actions on the alternative grounds set forth in the cross-appeal of the defendants’ liaison counsel on behalf of the defendants. The Second Circuit issued a corrected opinion upholding the dismissal of the SLCFC Actions on March 29, 2016. On September 9, 2016, the plaintiffs in the SLCFC Actions filed a petition for writ of certiorari to the U.S. Supreme Court, seeking review of the Second Circuit’s decision. That petition is pending.
On June 4, 2013, the Litigation Trustee sought leave from the NY District Court to amend the FitzSimons Complaint and the Committee Advisor Complaint. The NY District Court granted that request on July 22, 2013, and the FitzSimons Complaint was amended on August 2, 2013 and the Committee Advisor Complaint was amended on August 13, 2013. On November 20, 2013, the NY District Court issued a case management order (“Master Case Order No. 4”), which authorized the Litigation Trustee to continue the FitzSimons Complaint in accordance with a court-ordered protocol. Thereafter, pursuant to Master Case Order No. 4, the Litigation Trustee voluntarily dismissed the FitzSimons Complaint against certain former shareholder defendants who received less than $50,000 on account of their Tribune Company common stock in connection with the Leveraged ESOP Transactions. On February 28, 2014, the NY District Court entered an order establishing a second protocol pursuant to Master Case Order No. 4 (the “Joint Dismissal Protocol”) providing for the potential voluntary dismissal of certain defendants from the FitzSimons Complaint if the amounts such defendants received on account of their Tribune Company common stock in connection with the Leveraged ESOP Transactions were below certain thresholds. Pursuant to the Joint Dismissal Protocol, the Litigation Trustee voluntarily dismissed the FitzSimons Complaint against certain additional former shareholder defendants. On April 24, 2014, the NY District Court entered an order establishing a third protocol pursuant to Master Case Order No. 4 (the “Conduit Protocol”) providing for the potential voluntary dismissal of certain defendants from the FitzSimons Complaint if such defendants were “mere conduits” and not transferees of transfers to holders of Tribune Company common stock in connection with the Leveraged ESOP Transactions. Pursuant to the Conduit Protocol, the Litigation Trustee voluntarily dismissed the FitzSimons Complaint against certain defendants and eliminated certain transfer amounts listed in the FitzSimons Complaint for which the corresponding defendants were mere conduits. Also on April 24, 2014, the NY District Court entered an order establishing a schedule and procedures for defendants and the Litigation Trustee to brief additional motions to dismiss the FitzSimons Complaint and the Committee Advisor Complaint (the “Phase Two Motions to Dismiss”). Twelve Phase Two Motions to Dismiss were subsequently filed with the NY District Court. On January 6, 2017, the NY District Court granted one of the pending Phase Two Motions to Dismiss, which resulted in the dismissal of Count I of the FitzSimons Complaint against all former shareholder defendants. The other Phase Two Motions to Dismiss remain pending. By order dated April 5, 2017, the NY District Court adopted a “Preliminary Discovery Plan” relating to certain enumerated counts in the FitzSimons Complaint. Pursuant to that plan, the Litigation Trustee has issued subpoenas seeking the production of documents from a number of third parties, including Tribune Media Company.
Preference Actions—The Debtors and the Creditors’ Committee commenced numerous avoidance actions seeking to avoid and recover certain transfers that had been made to or for the benefit of various creditors within the 90 days prior to the Petition Date (or one year prior to the Petition Date, in the case of transfers to or for the benefit of current or former alleged “insiders,” as defined in the Bankruptcy Code, of the Debtors), which are commonly


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

known as preference actions (the “Preference Actions”), shortly before the statute of limitation for bringing such actions expired on December 8, 2010. The Preference Actions for which the Debtors or Creditors’ Committee filed complaints were stayed by order of the Bankruptcy Court upon their filing.
Certain of the Preference Actions brought or tolled by the Creditors’ Committee were preserved and transferred to the Litigation Trust on or after the Effective Date. Certain of those Preference Actions were dismissed by the Litigation Trustee and, as noted above, 18 of those Preference Actions were transferred to the NY District Court for coordinated or consolidated pretrial proceedings with the other MDL proceedings. The Preference Actions that were transferred to the Litigation Trust, if successful, will inure to the benefit of the Debtors’ creditors that received interests in the Litigation Trust pursuant to the terms of the Plan. Certain other Preference Actions brought or tolled by the Creditors’ Committee were transferred to the Reorganized Debtors on or after the Effective Date. Those Preference Actions, along with the Preference Actions that were originally commenced by the Debtors and retained by the Reorganized Debtors pursuant to the Plan, have all been dismissed by the Reorganized Debtors, and the tolling agreements involving the Preference Actions that were transferred to or retained by the Reorganized Debtors have also been terminated or allowed to expire.
As part of the Chapter 11 claims process, a number of the Company’s former directors and officers who have been named in the FitzSimons Complaint and/or the Preference Actions that were transferred to the Litigation Trust have filed indemnity and other related claims against the Company for claims brought against them in these lawsuits. Under the Plan, such indemnity-type claims against the Company must be set off against any recovery by the Litigation Trust against any of the directors and officers, and the Litigation Trust is authorized to object to the allowance of any such indemnity-type claims.
Resolution of Outstanding Prepetition Claims—Under Section 362 of the Bankruptcy Code, the filing of a bankruptcy petition automatically stays most actions against a debtor, including most actions to collect prepetition indebtedness or to exercise control over the property of the debtor’s estate. Substantially all prepetition liabilities are subject to compromise under a plan of reorganization approved by the Bankruptcy Court. Shortly after commencing their Chapter 11 proceedings, the Debtors notified all known current or potential creditors of the Chapter 11 filings.
On March 23, 2009, the Debtors filed initial schedules with the Bankruptcy Court setting forth the assets and liabilities of the Debtors as of the Petition Date and Tribune CNLBC filed its initial schedules of assets and liabilities in October 2009 (as subsequently amended, the “Schedules of Assets and Liabilities”). The Schedules of Assets and Liabilities contain information identifying the Debtors’ executory contracts and unexpired leases, the creditors that may hold claims against the Debtors and the nature of such claims. On March 25, 2009, the Bankruptcy Court set June 12, 2009 as the general bar date, which was the final date by which most entities that wished to assert a prepetition claim against the Debtors were required to file a proof of claim in writing. On June 7, 2010, the Bankruptcy Court set July 26, 2010 as the general bar date for filing certain proofs of claim against Tribune CNLBC.
ASC Topic 852, “Reorganizations” requires that the financial statements for periods subsequent to the filing of the Chapter 11 Petitions distinguish transactions and events that are directly associated with the reorganization from the operations of the business.
As of the Effective Date, approximately 7,400 proofs of claim had been filed against the Debtors. Additional claims were filed after the Effective Date, including to amend or supplement previously filed claims. Additional claims were also included in the Debtors’ respective Schedules of Assets and Liabilities which were filed with the Bankruptcy Court. Amounts and payment terms for these claims, if applicable, were established in the Plan. The filed proofs of claim asserted liabilities in excess of the amounts reflected in liabilities subject to compromise in the Predecessor’s Consolidated Balance Sheet at December 30, 2012 plus certain additional unliquidated and/or contingent amounts. During the Debtors’ Chapter 11 proceedings, the Debtors investigated the differences between the claim amounts recorded by the Debtors and claims filed by creditors. As of December 31, 2017, approximately 3,297 proofs of claim had been withdrawn or expunged as a result of the Debtors’ evaluation of the filed proofs of


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

claim and their efforts to reduce and/or eliminate invalid, duplicative and/or over-stated claims. In addition, approximately 3,757 proofs of claim had been settled or otherwise satisfied pursuant to the terms of the Plan.
As of December 31, 2017, all but 403 proofs of claim against the Debtors had been withdrawn, expunged, settled or otherwise satisfied. Adjustments may result from, among other things, negotiations with creditors, further orders of the Bankruptcy Court and, in certain instances, litigation. The ultimate amounts to be paid in resolutions of the remaining proofs of claim, including indemnity claims, will continue to be subject to uncertainty for a period of time after the Effective Date. If the aggregate allowed amount of the remaining claims exceeds the restricted cash for satisfying such claims, the Company would be required to satisfy the allowed claims from its cash on hand from operations.
Pursuant to the terms of the Plan and subject to certain specified exceptions, on the Effective Date, all executory contracts or unexpired leases of the Debtors that were not previously assumed or rejected pursuant to Section 365 of the Bankruptcy Code or rejected pursuant to the Plan were deemed assumed in accordance with, and subject to, the provisions and requirements of Sections 365 and 1123 of the Bankruptcy Code.
Reorganization Items, Net—As provided by the Bankruptcy Code, the Office of the United States Trustee for Region 3 (the “U.S. Trustee”) appointed an official committee of unsecured creditors (the “Creditors’ Committee”) on December 18, 2008. Prior to the Effective Date, the Creditors’ Committee was entitled to be heard on most matters that came before the Bankruptcy Court with respect to the Debtors’ Chapter 11 cases. Among other things, the Creditors’ Committee consulted with the Debtors regarding the administration of the Debtors’ Chapter 11 cases, investigated matters relevant to the Chapter 11 cases, including the formulation of the Plan, advised unsecured creditors regarding the Chapter 11 cases, and generally performed any other services as were in the interests of the Debtors’ unsecured creditors. The Debtors were required to bear certain of the Creditors’ Committee’s costs and expenses, including those of their counsel and other professional advisors. Such costs are included in the Company’s professional advisory fees. The appointment of the Creditors’ Committee terminated on the Effective Date, except with respect to the preparation and prosecution of the Creditors’ Committee’s requests for the payment of professional advisory fees and reimbursement of expenses, the evaluation of fee and expense requests of other parties, and the transfer of certain documents, information and privileges from the Creditors’ Committee to the Litigation Trust.
ASC Topic 852 requires that the financial statements for periods subsequent to the filing of the Chapter 11 Petitions distinguish transactions and events that are directly associated with the reorganization from the operations of the business. Reorganization items, net included in the Consolidated Statements of Operations primarily include professional advisory fees and other costs related to the resolution of unresolved claims and totaled $2 million, $1 million and $2 million for the years ended December 31, 2017, December 31, 2016 and December 31, 2015. Operating net cash outflows resulting from reorganization costs for each of 2017 and 2016 totaled $2 million and for 2015 totaled $3 million, and were principally for the payment of professional advisory fees and other fees in each year. All other items included in reorganization costs in 2017, 2016 and 2015 are primarily non-cash adjustments.
The Company expects to continue to incur certain expenses pertaining to the Chapter 11 proceedings throughout 2018 and potentially in future periods. These expenses will include primarily professional advisory fees and other costs related to the resolution of unresolved claims.
NOTE 4: ACQUISITIONS
Infostrada Sports, SportsDirect and Enswers (as further defined and described below) were divested in the Gracenote Sale. As of December 31, 2016, the assets and liabilities of the acquisitions of these businesses are classified as discontinued operations in the Company’s Consolidated Balance Sheet and for the years ended December 31, 2017, December 31, 2016 and December 31, 2015, their operating results, as well as any associated transactions costs, are presented as discontinued operations in the Company’s Consolidated Statements of Operations.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In May 2015, the Company completed the acquisitions of all issued and outstanding equity interests in Infostrada Statistics B.V. (“Infostrada Sports”), SportsDirect Inc. (“SportsDirect”) and Covers Media Group (“Covers”). Infostrada Sports and SportsDirect provided the Company with in-depth sports data, including schedules, scores, play-by-play statistics, as well as team and player information for the major professional leagues around the world, including the National Football League, Major League Baseball, National Basketball Association, National Hockey League, European Football League, and the Olympics. Covers is the operator of Covers.com, a North American online sports gaming destination for scores, odds and matchups, unique editorial analysis, and industry news coverage. In May 2015, the Company also completed an acquisition of all issued and outstanding equity interests in Enswers Inc. (“Enswers”), a leading provider of automatic content recognition technology and systems based in South Korea. The total acquisition price for Infostrada Sports, SportsDirect, Covers and Enswers was $70 million, net of cash acquired.
The purchase prices for the above acquisitions were allocated to the tangible and intangible assets acquired and liabilities assumed. The excess of the fair values and the related deferred taxes were allocated to goodwill, which will not be deductible for tax purposes due to the acquisitions being stock acquisitions. In connection with these acquisitions, the Company incurred a total of $3 million of transaction costs.
The total purchase price for the Infostrada Sports, SportsDirect, Covers and Enswers acquisitions assigned to the acquired assets and assumed liabilities of these companies is as follows (in thousands):
Consideration: 
Cash$71,768
Less: cash acquired(1,919)
Net cash$69,849
  
Allocated Fair Value of Acquired Assets and Assumed Liabilities: 
Restricted cash and cash equivalents$404
Accounts receivable and other current assets2,481
Property and equipment805
Deferred tax assets3,816
Other long term assets157
Intangible assets subject to amortization 
     Customer relationships (useful lives of 6 to 16 years)17,000
     Content databases (useful lives of 10 to 16 years)13,900
     Technologies (useful lives 4 to 10 years)6,900
     Trade name and trademarks (useful life of 15 years)5,200
     Non-competition agreement (useful life 5 years)1,100
Accounts payable and other current liabilities(1,507)
Deferred revenue(339)
Deferred tax liabilities(10,097)
Other liabilities(477)
Total identifiable net assets39,343
Goodwill30,506
Total net assets acquired$69,849


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The allocation presented above is based upon management’s estimate of the fair values using income, cost and market approaches. In estimating the fair value of acquired assets and assumed liabilities, the fair value estimates are based on, but not limited to, expected future revenue and cash flows, expected future growth rates and estimated discount rates. The definite-lived intangible assets will be amortized over a total weighted average period of 12 years that include weighted average periods of 11 years for customer relationships, 14 years for content databases, 8 years for technologies, 15 years for trade name and trademarks and 5 years for non-competition agreements. The acquired property and equipment will be depreciated on a straight-line basis over the respective estimated remaining useful lives. Goodwill is calculated as the excess of the consideration transferred over the fair value of the identifiable net assets acquired and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including assembled workforce, and noncontractual relationships, as well as expected future cost and revenue synergies.
NOTE 5:3: CHANGES IN OPERATIONS AND NON-OPERATING ITEMS
Employee Reductions—The Company recorded pretax charges, mainly consisting of employee severance costs, associated termination benefits and related expenses totaling $7 million, $5 million and $10 million in 2018, 2017 and $5 million in 2017, 2016, and 2015, respectively. These charges are included in direct operating expenses or SG&A in the Company’s Consolidated Statements of Operations.
The following table summarizes these severance and related charges included in income (loss) from continuing operations by business segment for 2017, 2016 and 2015 (in thousands):
2017 2016 20152018 2017 2016
Television and Entertainment$4,367
 $9,228
 $2,317
$7,155
 $4,367
 $9,228
Corporate and Other372
 1,178
 2,959
(398) 372
 1,178
Total$4,739
 $10,406
 $5,276
$6,757
 $4,739
 $10,406
Severance and related expenses included in income (loss) from discontinued operations, net of taxes totaled $0.5 million and $1 million in 2016 and 2015, respectively.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The accrued liability for severance and related expenses is reflected in employee compensation and benefits in the Company’s Consolidated Balance Sheets and was $5$7 million and $9$5 million at December 31, 20172018 and December 31, 2016,2017, respectively.
Changes to the accrued liability for severance and related expenses were as follows (in thousands):
Balance at December 31, 2015$3,595
Additions10,406
Payments(5,020)
Balance at December 31, 2016$8,981
Additions4,739
Payments(9,144)
Balance at December 31, 2017$4,576


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Balance at December 31, 2016$8,981
Additions4,739
Payments(9,144)
Balance at December 31, 2017$4,576
Additions6,757
Payments(4,721)
Balance at December 31, 2018$6,612
Non-Operating Items—Non-operating items for 2017, 2016 and 2015 are summarizedwere as follows (in thousands):
2017 2016 20152018 2017 2016
Loss on extinguishments and modification of debt$(20,487) $—
 $(37,040)$—
 $(20,487) $—
Gain on investment transactions, net8,131
 —
 12,173
(Loss) gain on investment transactions, net(1,113) 8,131
 —
Write-downs of investments(193,494) —
 —
—
 (193,494) —
Other non-operating gain, net71
 5,427
 7,228
68
 71
 5,427
Total non-operating (loss) gain, net$(205,779) $5,427
 $(17,639)$(1,045) $(205,779) $5,427
Non-operating items for 2018 included a pretax loss of $5 million from the sale of the Company’s remaining ownership interest in CareerBuilder, LLC (through its investment in Camaro Parent, LLC) (“CareerBuilder”) and a pretax gain of $4 million from the sale of one of the Company’s other equity investments.
Non-operating items for 2017 included a $20 million pretax loss on the extinguishments and modification of debt. The loss included a write-off of unamortized debt issuance costs of $7 million and an unamortized discount of $2 million as a portion of the Term Loan Facility was considered extinguished for accounting purposes as well as an expense of $12 million of third party fees as a portion of the Term Loan Facility was considered a modification transaction under ASC 470, “Debt.” Gain(Loss) gain on investment transactions, net included a pretax gain of $5 million from the sale of the Company’s Tribune Publishing Company (“Tribune Publishing”) (formerly tronc, Inc. (“tronc”) shares and a pretax gain of $4 million from the partial sale of CareerBuilder LLC (“CareerBuilder”).CareerBuilder. Write-downs of investments included non-cash pretax impairment charges of $193 million to write down the Company’s investments in CareerBuilder, Dose Media, LLC (“Dose Media”) and a cost method investment,one of the Company’s other equity investments, as further described in Note 8.6.
Non-operating items in 2016 included a $5 million non-cash favorable workers’ compensation reserve adjustment related to businesses divested by the Company in prior years.
Non-operating items in 2015 included a $37 million pretax loss on the extinguishment of the Former Term Loan Facility (as defined and described in Note 9), which includes the write-off of unamortized debt issuance costs and discounts. See Note 9 for further information on the extinguishment of the Former Term Loan Facility. Gain on investment transactions, net in 2015 included a pretax gain of $8 million for an additional cash distribution from Classified Ventures, LLC (“CV”) pursuant to the collection of a contingent receivable subsequent to the Company’s sale of its interest in CV in 2014 and a pretax gain of $3 million on the sale of the Company’s 3% interest in NHLLC on September 2, 2015, as further described in Note 8. Other non-operating items in 2015 included a $9 million non-cash favorable workers’ compensation reserve adjustment related to businesses divested by the Company in prior years and a $2 million non-cash pretax charge to write off a convertible note receivable resulting from a decline in the fair value of the convertible note receivable that the Company determined to be other than temporary. The convertible note receivable constitutes a nonfinancial asset measured at fair value on a nonrecurring basis in the Company’s Consolidated Balance Sheet and is classified as Level 3 assets in the fair value hierarchy’s established under ASC Topic 820, “Fair Value Measurement and Disclosures.” See Note 10 for a description of the hierarchy’s three levels.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 6:4: REAL ESTATE SALES AND ASSETS HELD FOR SALE
Assets Held for Sale—Assets held for sale in the Company’s audited Consolidated Balance Sheets consisted of the following (in thousands):
 December 31, 2017 December 31, 2016
Real estate$—
 $17,176
FCC licenses38,900
 —
Total assets held for sale$38,900
 $17,176


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2018December 31, 2017
FCC licenses—
38,900
Sales of Real Estate Assets Held—During 2018, the Company sold two properties for Sale—Asnet pretax proceeds totaling $59 million and recognized a net pretax gain of December 31,$25 million, as further described below. The Company defines net proceeds as pretax cash proceeds on the sale of properties, net of associated selling costs.
On October 9, 2018, the Company sold its Melville, NY property for net proceeds of $53 million and recognized a pretax gain of $24 million. On October 23, 2018, the Company sold its Hartford, CT property for net proceeds of $6 million and recognized a pretax gain of less than $1 million.
During 2017, the Company had no real estatesold several properties held for sale. Asnet pretax proceeds totaling $144 million and recognized a net pretax gain of December 31, 2016, the Company had five real estate properties held for sale. The combined net carrying value of real estate properties held for sale and included in non-current assets held for sale in the Company’s Consolidated Balance Sheet at December 31, 2016 totaled $17 million.
$29 million, as further described below. The Company recorded charges of $2 million $15 million and $7 million in 2017 2016 and 2015, respectively, to write down certain properties to their estimated fair value, less the expected selling costs, which were determined based on certain assumptions and judgments that are Level 3 within the fair value hierarchy. These charges are included in SG&A in the Company’s Consolidated Statements of Operations.
Sales of Real Estate—During 2017, the Company sold several properties for net pretax proceeds totaling $144 million and recognized a net pretax gain of $29 million, as further described below. The Company defines net proceeds as pretax cash proceeds on the sale of properties, net of associated selling costs.
On January 26, 2017, the Company sold its Denver, CO property for net proceeds of $23 million, which approximated the carrying value, and entered into a lease for the property. On January 31, 2017, the Company sold one of its Chicago, IL properties for net proceeds of $22 million and entered into a lease with a term of 10 years, subject to renewal, retaining the use of more than a minor portion of the property. The Company recorded a deferred pretax gain of $13 million on the sale, which will be amortized over the life of the lease in accordance with sale-leaseback accounting guidance. On April 21, 2017, the Company sold two of its Chicago, IL properties for net proceeds of less than $1 million. On May 22, 2017, the Company sold two of its Baltimore, MD properties for net proceeds of $15 million which approximated their respective carrying values. On August 4, 2017, the Company sold its Williamsburg, VA property for net proceeds of $1 million, which approximated its carrying value. On November 15, 2017, the Company sold its Costa Mesa, CA properties for net proceeds of $62 million and recorded a pretax gain of $22 million, of which $3 million was attributable to a noncontrolling interest. On December 19, 2017, the Company sold its Ft. Lauderdale, FL property for net proceeds of $21 million and recorded a pretax gain of $6 million, of which less than $1 million was attributable to a noncontrolling interest. Net distributions to noncontrolling interests in 2017 totaled $9 million.
During 2016, the Company sold several properties for net pretax proceeds totaling $506 million and recognized a net pretax gain of $213 million, as further described below. The Company recorded charges of $15 million in 2016 to write down certain properties to their estimated fair value, less the expected selling costs, which were determined based on certain assumptions and judgments that are Level 3 within the fair value hierarchy. These charges are included in SG&A in the Company’s Consolidated Statements of Operations.
On May 2, 2016, the Company sold its Deerfield Beach, FL property for net proceeds of $24 million, and on June 2, 2016, the Company sold its Allentown, PA property for net proceeds of $8 million; the Company recorded a net pretax loss of less than $1 million on the sale of these properties. On July 7, 2016, the Company sold its Seattle, WA property for net proceeds of $19 million and entered into a lease with a term of 11 years, subject to renewal, retaining the use of more than a minor portion of the property. The Company recorded a deferred pretax gain of $8 million on the sale, which will be amortized over the life of the lease in accordance with sale-leaseback accounting guidance. On July 12, 2016, the Company sold two of its Orlando, FL properties for net proceeds of $34 million and recorded a pretax gain of $2 million. On July 14, 2016, the Company sold its Arlington Heights, IL property for net proceeds of $0.4 million. On September 26, 2016, the Company sold Tribune Tower and the north block of the Los


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Angeles Times property (the “LA Times Property”) for net proceeds of $199 million and $102 million, respectively, and recognized a pretax gain of $93 million and $59 million, respectively. Pursuant to the terms of the sale agreements, the Company could receive contingent payments of up to an additional $35 million related to the Tribune Tower transaction and an additional $10 million related to the LA Times Property transaction. For both the Tribune Tower and LA Times Property sales, the contingent payments become payable if certain conditions are met pertaining to development rights related to the respective buyer’s plans for development of portions of the two properties. The contingency period for both properties ends five years from the sale date with the possibility of extension in certain circumstances. On September 27, 2016, the Company sold the Olympic Facility for net proceeds of $118 million and recognized a pretax gain of $59 million. On November 14, 2016, the Company sold its Portsmouth, VA property and on November 28, 2016, the Company sold a property located in Chicago, IL for net proceeds totaling $1 million. On December 22, 2016, the Company sold a Baltimore, MD property for net proceeds


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

of $0.3 million. The Company recorded a net pretax gain of less than $1 million on the sale of these properties in the fourth quarter of 2016.
During 2015, the Company sold its Bel Air, MD and Newport News, VA properties for net proceeds of $5 million and recorded a net loss of less than $1 million.
FCC Licenses Held for Sale—As of December 31, 2017, certain FCC licenses that were part of the FCC spectrum auction arewere included in assets held for sale. The gross proceeds received for these licenses in 2017 totaled $172 million which is currentlyand were reflected in current liabilities in the Company’s Consolidated Balance Sheet at December 31, 2017. The Company expects to recognizerecognized a net pretax gain of $133 million in the first quarter of 2018 related to the surrender of the spectrum associated with these licenses in January 2018. The gain will be included in SG&A in the Company’s Consolidated Statements of Operations. See Note 1210 for additional information regarding the Company’s participation in the FCC spectrum auction.
NOTE 7:5: GOODWILL, OTHER INTANGIBLE ASSETS AND INTANGIBLE LIABILITIES
Goodwill and other intangible assets consisted of the following (in thousands):
December 31, 2017 December 31, 2016December 31, 2018 December 31, 2017
Gross Amount Accumulated Amortization Net Amount Gross Amount Accumulated Amortization Net AmountGross Amount Accumulated Amortization Net Amount Gross Amount Accumulated Amortization Net Amount
Other intangible assets subject to amortization                      
Affiliate relationships (useful life of 16 years)$212,000
 $(66,250) $145,750
 $212,000
 $(53,000) $159,000
$212,000
 $(79,500) $132,500
 $212,000
 $(66,250) $145,750
Advertiser relationships (useful life of 8 years)168,000
 (105,000) 63,000
 168,000
 (84,000) 84,000
168,000
 (126,000) 42,000
 168,000
 (105,000) 63,000
Network affiliation agreements (useful life of 5 to 16 years)362,000
 (175,337) 186,663
 362,000
 (133,725) 228,275
Network affiliation agreements (useful life of 11 to 16 years)228,700
 (83,649) 145,051
 362,000
 (175,337) 186,663
Retransmission consent agreements (useful life of 7 to 12 years)830,100
 (377,033) 453,067
 830,100
 (286,994) 543,106
830,100
 (467,073) 363,027
 830,100
 (377,033) 453,067
Other (useful life of 5 to 15 years)16,650
 (6,565) 10,085
 15,448
 (4,695) 10,753
16,015
 (8,137) 7,878
 16,650
 (6,565) 10,085
Total$1,588,750
 $(730,185) 858,565
 $1,587,548
 $(562,414) 1,025,134
$1,454,815
 $(764,359) 690,456
 $1,588,750
 $(730,185) 858,565
Other intangible assets not subject to amortization                      
FCC licenses    740,300
     779,200
    737,200
     740,300
Trade name    14,800
     14,800
    14,800
     14,800
Total other intangible assets, net    1,613,665
     1,819,134
    1,442,456
     1,613,665
Goodwill    3,228,988
     3,227,930
    3,228,601
     3,228,988
Total goodwill and other intangible assets    $4,842,653
     $5,047,064
    $4,671,057
     $4,842,653



TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The changes in the carrying amounts of intangible assets, which are in the Company’s Television and Entertainment segment, during the years ended December 31, 20172018 and December 31, 20162017 were as follows (in thousands):
Other intangible assets subject to amortization  
Balance as of December 31, 2015$1,192,602
Amortization (1)(2)(167,717)
Balance sheet reclassifications (3)9
Foreign currency translation adjustment240
Balance as of December 31, 2016$1,025,134
$1,025,134
Amortization (1)(2)(167,560)
Balance sheet reclassifications (3)86
Amortization (1)(167,560)
Balance sheet reclassifications (2)86
Foreign currency translation adjustment905
905
Balance as of December 31, 2017$858,565
$858,565
Amortization (1)(167,596)
Balance sheet reclassifications (2)(226)
Foreign currency translation adjustment(287)
Balance as of December 31, 2018$690,456
  
Other intangible assets not subject to amortization  
Balance as of December 31, 2015$797,400
Balance as of December 31, 2016$794,000
Reclassification to assets held for sale (3)(38,900)
Balance as of December 31, 2017$755,100
Impairment charge(3,400)(3,100)
Balance as of December 31, 2016$794,000
Reclassification to assets held for sale (4)(38,900)
Balance as of December 31, 2017$755,100
Balance as of December 31, 2018$752,000
  
Goodwill  
Gross balance as of December 31, 2015$3,609,224
Accumulated impairment losses as of December 31, 2015(381,000)
Balance as of December 31, 20153,228,224
Foreign currency translation adjustment(294)
Gross balance as of December 31, 2016$3,608,930
Accumulated impairment losses as of December 31, 2016(381,000)
Balance as of December 31, 2016$3,227,930
3,227,930
Foreign currency translation adjustment1,058
1,058
Balance as of December 31, 2017$3,228,988
$3,228,988
Total goodwill and other intangible assets as of December 31, 2017$4,842,653
Foreign currency translation adjustment(387)
Balance as of December 31, 2018$3,228,601
Total goodwill and other intangible assets as of December 31, 2018$4,671,057
 
(1)Beginning in the fourth quarter of 2016, the Television and Entertainment reportable segment includes the operations of Covers, including the goodwill and other intangible assets subject to amortization allocated in accordance with ASC Topic 350 guidance, which was previously included in the Digital and Data reportable segment.
(2)Amortization of intangible assets includes $1 million related to lease contract intangible assets and is recorded in cost of sales or SG&A expense, if applicable, in the Consolidated Statements of Operations.
(3)(2)Represents net reclassifications which are reflected as a decrease (increase) to broadcast rights assets in the Consolidated Balance Sheets at December 31, 2017 and December 31, 2016.2018, respectively.
(4)(3)See Note 64 for additional information regarding FCC licenses reclassified to assets held for sale.

The Company recorded contract intangible liabilities totaling $227 million in connection with the adoption of fresh-start reporting on the Effective Date. Of this amount, approximately $226 million was related to contracts for broadcast rights programming not yet available for broadcast. In addition, the Company recorded $9 million of intangible liabilities related to contracts for broadcast rights programming in connection with the acquisition of all of the issued and outstanding equity interests in Local TV on December 27, 2013 (the “Local TV Acquisition”). These intangible liabilities arewere reclassified as a reduction of broadcast rights assets in the Consolidated Balance Sheet as


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

the programming becomes available for broadcast and subsequently amortized as a reduction of programming expenses in the Consolidated Statements of Operations in accordance with the Company’s methodology for amortizing the related broadcast rights. As of December 31, 2016, the remaining contract intangible liabilities for


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

broadcast rights programming not yet available for broadcast have been reclassified as a reduction of broadcast rights assets or amortized as a reduction of programming expense and the balance was reduced to zero.
During the year ended December 31, 2016, the net changes in the carrying amounts of intangible liabilities, which are in the Company’s Television and Entertainment segment, included $12 million of amortization expense and $2 million of balance sheet reclassifications reflected as a reduction in broadcast rights assets in the Company’s Consolidated Balance Sheet. During the year ended December 31, 2017, the net changes in the carrying amounts of intangible liabilities were immaterial and the balance was reduced to zero.
The Company amortizes its intangible assets subject to amortization on a straight-line basis over their respective useful lives. The remaining intangible assets subject to amortization as of December 31, 2017,2018, excluding lease contract intangible assets, have a weighted-average remaining useful life of approximately seven years. Amortization expense relating to these amortizable intangible assets is expected to be approximately $167 million in 2018, $140 million in 2019, $134 million in 2020, $103 million in 2021, and $84 million in 2022.2022 and $57 million in 2023.
Impairment of Goodwill and Other Indefinite-lived Intangible Assets—As disclosed in Note 1, the Company reviews goodwill and other indefinite-lived intangible assets for impairment annually, or more frequently if events or changes in circumstances indicate that an asset may be impaired, in accordance with ASC Topic 350.
There were no goodwill impairment charges recorded in 2018, 2017 or 2016.
In the fourth quarter of 2015,2018 and 2017, the Company conducted its annual goodwill impairment test in accordance with guidance effective in 2015 utilizing the two-step impairment test in accordance with ASC Topic 350. As a resultperformed qualitative assessments of the impairment review, the Company recorded a non-cash impairment charge of $381 million to write down itstelevision and cable reporting unit goodwill (a reporting unitunits (reporting units within the Television and Entertainment reportable segment).
During 2015, At December 31, 2018, the television and cable reporting units had goodwill balances of $2.505 billion and $723 million, respectively. At December 31, 2017, the television and cable reporting units had goodwill balances of $2.506 billion and $723 million, respectively. Based on the qualitative assessments in both years, the Company acceleratedconcluded that there were no impairments for either reporting unit. The conclusions were supported by the pace ofoverall and budgeted financial performance, the transformationcarrying values after considering the headroom from the last quantitative analysis in 2016 (16% and 23% for television and cable, respectively), the overall stability of the Company’s national general entertainment cable network, WGN America, from a superstation to a cable network. This transformation led to a strategic shift in the operations of WGN America with a renewed focus on increased household distribution and high quality syndicated and original programming that resulted in higher carriage fee revenues and higher programmingenterprise value and other costs. The performance of the new programming did not meet expectations resulting in lower than expected advertising revenues, lower marginsindustry and lower current and expected future cash flows than those used to originally record the goodwill in connection with the adoption of fresh-start reporting by the Company in December 2012.macroeconomic factors.
In connection with the 2015 goodwill impairment test, the fair value of the cable reporting unit was determined with consideration of both the income and the market valuation approaches. Under the income approach, the fair value is based on projected future discounted cash flows, which requires management’s assumptions of projected revenues and related growth rates, operating margins, cash payments for broadcast rights, discount rates and terminal growth rates. The Company projected cash flows for 10 years and then applied a terminal growth rate. Key assumptions included a 10.5% discount rate and a terminal growth rate of 2% for its owned cable operations. The Company’s investment in TV Food Network included in the cable reporting unit was valued using the market approach to estimate its fair value by comparison to trading multiples of similar cable networks.
As a result of the 2015 assessment, it was determined that the carrying value of the cable reporting unit exceeded the estimated fair value. Accordingly, a second step of the goodwill impairment test (“Step 2”) was performed specific to the cable reporting unit in accordance with guidance effective in 2015 which compared the implied fair value of the goodwill to the carrying value of such goodwill. Under Step 2, the estimated fair value of goodwill of a reporting unit is determined by calculating the residual fair value that remains after the total estimated fair value of the reporting unit is allocated to its net assets other than goodwill. Other significant intangible assets that were identified and ascribed value as part of the Step 2 included affiliate relationships, advertiser relationships


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

and a trade name. Based on this analysis, the carrying value of the cable reporting unit goodwill exceeded its implied value by $381 million and consequently, the Company recorded an impairment charge of that amount in the Consolidated Statement of Operations for the year ended December 31, 2015. Following the impairment charge, the carrying value of the goodwill at the cable reporting unit was $723 million at December 31, 2015.
No impairment charges were recorded in 2017 for FCC licenses. In the fourth quarter of 20162018 and 2015,2016, the Company recorded a non-cash pretax impairment chargecharges of $3 million and $4 millioneach within the Television and Entertainment segment respectively, related to the Company’s FCC licenses.licenses; these charges are included in SG&A in the Company’s Consolidated Statements of Operations. The estimated fair value of each of the Company’s FCC licenses was based on discounted future cash flows for a hypothetical start-up television station in the respective market that achieves and maintains an average revenue share for four years and has an average cost structure. For the Company’s FCC licenses, significant assumptions also include start-up operating costs for an independent station, initial capital investments and market revenue forecasts. The Company utilized a 9.5%9.0% discount rate and terminal growth rate of 2.0% to estimate the fair values of its FCC licenses in the fourth quarter of 2017.2018. Fair value estimates for each of the Company’s indefinite-lived intangible assets are inherently sensitive to changes in these estimates, particularly with respect to the FCC licenses. The Company’s fourth quarter 2018 and 2016 impairment reviewreviews determined that the FCC licenses in one and two markets, respectively, were impaired and the Company’s fourth quarter 2015 impairment review determined that the FCC license in one market was impaired. The impairments were primarily due to declines in estimated future market revenues available to a hypothetical start-up television station in these markets. No impairment charges were recorded in 2017 for FCC licenses.
The Company’s FCC licenses and trade name constitute nonfinancial assets measured at fair value on a nonrecurring basis in the Company’s Consolidated Balance Sheets. These nonfinancial assets are classified as Level 3 assets in the fair value hierarchy established under ASC Topic 820. See Note 108 for a description of the hierarchy’s three levels.
In 2017, the Company participated in the FCC spectrum auction and received $172 million in gross proceeds. As of December 31, 2017, certain FCC licenses that were part of the FCC spectrum auction arewere included in assets held for sale. The Company expects to recognizerecognized a net pretax gain of $133 million in the first quarter of 2018 related to the surrender of the spectrum of these television stations in January 2018. See Note 1210 for additional information regarding the Company’s participation in the FCC spectrum auction.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The determination of estimated fair values of goodwill and other indefinite-lived intangible assets requires many judgments, assumptions and estimates of several critical factors, including projected revenues and related growth rates, projected operating margins and cash flows, estimated income tax rates, capital expenditures, market multiples and discount rates, as well as specific economic factors such as market share for broadcasting and royalty rates for the trade name intangible. Adverse changes in expected operating results and/or unfavorable changes in other economic factors could result in additional non-cash impairment charges in the future under ASC Topic 350.
NOTE 8:6: INVESTMENTS
Investments consisted of the following (in thousands):
 December 31, 2017 December 31, 2016
Equity method investments$1,254,198
 $1,642,117
Cost method investments27,593
 26,748
Marketable equity securities—
 6,018
Total investments$1,281,791
 $1,674,883


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

 December 31, 2018 December 31, 2017
Equity method investments$1,238,457
 $1,254,198
Other equity investments25,980
 27,593
Total investments$1,264,437
 $1,281,791
Equity Method Investments—The Company’s equity method investments at December 31, 20172018 included the following private companies:
Company% Owned
CareerBuilder, LLC6%
Dose Media, LLC25%23%
Television Food Network, G.P.31%
TKG Internet Holdings II LLC43%
Income from equity investments, net reported in the Company’s Consolidated Statements of Operations consisted of the following (in thousands):
2017 2016 20152018 2017 2016
Income from equity investments, net, before amortization of basis difference$190,864
 $202,758
 $201,207
$219,210
 $190,864
 $202,758
Amortization of basis difference(53,502) (54,602) (54,248)(49,875) (53,502) (54,602)
Income from equity investments, net$137,362
 $148,156
 $146,959
$169,335
 $137,362
 $148,156
The carrying value of the Company’s investments was increased by $1.615 billion to aan aggregate fair value aggregatingof $2.224 billion as a result of fresh start reporting adopted on the Effective Date. The fair value of the Company’s investments was estimated based on valuations obtained from third parties primarily using the market approach. Of the $1.615 billion increase, $1.108 billion was attributable to the Company’s share of theoretical increases in the carrying values of the investees’ amortizable intangible assets had the fair value of the investments been allocated to the identifiable intangible assets of the investees’ in accordance with ASC Topic 805.805 “Business Combinations.” The remaining $507 million of the increase was attributable to goodwill and other identifiable intangibles not subject to amortization, including trade names. The Company amortizes the differences between the fair values and the investees’ carrying values of the identifiable intangible assets subject to amortization and records the amortization (the “amortization of basis difference”) as a reduction of income on equity investments, net in its Consolidated Statements of Operations. The remaining identifiable net intangible assets subject to amortization of basis difference as of December 31, 20172018 totaled $686$636 million and have a weighted average remaining useful life of approximately 1615 years.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Cash distributions from the Company’s equity method investments were as follows (in thousands):
 2017 2016 2015
Cash distributions from equity investments (1)$201,892
 $170,527
 $180,207
 2018 2017 2016
Cash distributions from equity investments (1)$171,591
 $201,892
 $170,527
 
(1)Certain distributions received from CareerBuilder in 2017 and 2015 exceeded the Company’s share of CareerBuilder’s cumulative earnings. As a result, the Company determined that these distributions were a return of investment and, therefore, presented such distributions totaling $4 million in 2017 and $10 million in 2015 as an investing activity in the Company’s Consolidated Statements of Cash Flows for 2017 and 2015.2017.
TV Food Network—The Company’s 31% investment in TV Food Network totaled $1.234$1.228 billion and $1.279$1.234 billion at December 31, 20172018 and December 31, 2016,2017, respectively. The Company recognized equity income from TV Food Network of $160 million in 2018, $141 million in 2017 and $122 million in 2016 and $126 million in 2015.2016. The Company received cash distributions from TV Food Network totaling $166 million in 2018, $186 million in 2017 and $158 million in 2016 and $164 million in 2015.2016.
TV Food Network owns and operates “The Food Network,” a 24-hour lifestyle cable television channel focusing on food and related topics. TV Food Network also owns and operates “The Cooking Channel,” a cable


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

television channel primarily devoted to cooking instruction, food information and other related topics. TV Food Network’s programming is distributed by cable and satellite television systems.
The partnership agreement governing TV Food Network provides that the partnership shall, unless certain actions are taken by the partners, dissolve and commence winding up and liquidating TV Food Network upon the first to occur of certain enumerated liquidating events, one of which is a specified date of December 31, 2020. The Company would be entitled to its proportionate share of distributions to partners in the event of a liquidation, which the partnership agreement provides would occur as promptly as is consistent with obtaining fair market value for the assets of TV Food Network. The partnership agreement also provides that the partnership may be continued or reconstituted in certain circumstances.
CareerBuilder—The Company’sOn September 13, 2018, the Company sold its remaining 6% investment in(on a fully diluted basis, including CareerBuilder employees’ equity awards) (through its investment in Camaro Parent, LLC subsequent toLLC) in CareerBuilder and received pretax proceeds of $11 million. The Company recognized a pretax loss of $5 million on the sale of its ownership interest in CareerBuilder Sale) totaled $10 million and $341 million atin the third quarter of 2018.
As of December 31, 2017, and December 31, 2016, respectively.the Company’s investment in CareerBuilder totaled $10 million. Through the date of the sale, pursuant to ASC Topic 323, the Company continued to account for CareerBuilder as an equity method investment. The Company recognized equity lossincome from CareerBuilder of $10 million in 2018, an equity loss of $2 million in 2017 and equity income of $27 million in 2016 and $21 million in 2015.2016. The Company received cash distributions from CareerBuilder totalingof $6 million in 2018, $16 million in 2017 and $13 million in 2016 and $162016. The distribution in 2018 included $5 million in 2015.
CareerBuilder isrelated to a global leader in human capital solutions, specializing in Human Resources software-as-a-service to help companies with every stepdistribution of proceeds from CareerBuilder’s sale of one its business operations on May 14, 2018. The Company’s share of the recruitment process. Its website, CareerBuilder.com,gain on sale was approximately $11 million, which is a leading job websiteincluded in North America. CareerBuilder also operates websitesequity income on investments, net in the United States, Europe, Canada, Asia and South America.2018.
On September 7, 2016, TEGNA Inc. (“TEGNA”) announced that it began evaluating strategic alternatives for CareerBuilder, including a possible sale. In 2017, the Company recorded non-cash pretax impairment charges totaling $181 million to write down the Company’s investment in CareerBuilder prior to the sale. The impairment charges resulted from a decline in the fair value of the investment that the Company determined to be other than temporary.
On June 19, 2017, TEGNA announced that it entered into an agreement (the “CareerBuilder Sale Agreement”), together with the other owners of CareerBuilder, including Tribune Media Company, to sell a majority interest in CareerBuilder to an investor group led by investment funds managed by affiliates of Apollo Global Management, LLC and the Ontario Teachers’ Pension Plan Board. The transaction closed on July 31, 2017 and the Company received cash of $158 million, which included an excess cash distribution of $16 million. The Company recognized


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

a gain on sale of $4 million in 2017. As a result of the sale, the Company’s ownership in CareerBuilder declined from 32% to approximately 7%, on a fully diluted basis. As of December 31, 2017, the Company’s ownership in CareerBuilder was approximately 6%, on a fully diluted basis (including CareerBuilder employees’employees unvested equity awards).
Pursuant to ASC Topic 323, the Company continues to account forThe CareerBuilder as an equity method investment. The investment constitutesconstituted a nonfinancial asset measured at fair value on a nonrecurring basis in the Company’s Consolidated Balance Sheets and iswas classified as a Level 3 asset in the fair value hierarchy. See Note 108 for a description of the fair value hierarchy’s three levels.
Dose Media, LLC—On November 25, 2015,As of December 31, 2018, the Company acquired a 25% interest in Dose Media. The Company’s 23% investment in Dose Media totaled $0 and $12 million athas a carrying value of zero as it was fully impaired as of December 31, 2017 and December 31, 2016, respectively.2017. The Company recognized equity losslosses from Dose Media of $2 million in 2017 and $3 million in 2016. Dose Media is a social media content company that creates and distributes content to help brands detect, optimize and publish stories for digital-first audiences.
In the fourth quarter of 2017, the Company recorded a non-cash pretax impairment charge of $10 million to write down its entire investment in Dose Media. The impairment charge resulted in a decline in the fair value of the investment that the Company determined to be other than temporary.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Summarized Financial Information—Summarized financial information for TV Food Network is as follows (in thousands):
Fiscal YearFiscal Year
2017 2016 20152018 2017 2016
Revenues, net$1,208,357
 $1,160,716
 $1,099,307
$1,263,279
 $1,208,357
 $1,160,716
Operating income$593,409
 $535,131
 $548,919
$654,296
 $593,409
 $535,131
Net income$608,327
 $552,146
 $561,657
$670,738
 $608,327
 $552,146
December 31, 2017 December 31, 2016December 31, 2018 December 31, 2017
Current assets$840,763
 $810,811
$800,990
 $840,763
Non-current assets$150,277
 $168,547
$347,688
 $150,277
Current liabilities$92,193
 $94,284
$108,568
 $92,193
Non-current liabilities$—
 $138
$109
 $—
Summarized financial information for CareerBuilder and Dose Media is as follows (in thousands):
 Fiscal Year
 2017 2016 2015
Revenues, net (1)$645,790
 $719,994
 $698,041
Operating (loss) income (1)$(7,324) $93,619
 $84,199
Net (loss) income (1)$(16,845) $89,249
 $80,280
 Fiscal Year
 2018 2017 2016
Revenues, net (1)$433,757
 $645,790
 $719,994
Operating income (loss) (1)$25,791
 $(10,457) $93,619
Net income (loss) (1)$101,573
 $(19,125) $89,249
 
(1)On November 25, 2015, the Company acquired a 25% interest in Dose Media. AsRevenues, net, operating income (loss) and net income (loss) that relate to CareerBuilder include results of operations from date of acquisition are not material to the Company in 2015, they are not included in the above table for 2015.through September 13, 2018.
December 31, 2017 December 31, 2016December 31, 2018 (1) December 31, 2017
Current assets$181,812
 $222,563
$1,653
 $180,828
Non-current assets$486,750
 $565,200
$246
 $503,688
Current liabilities$192,388
 $205,643
$566
 $196,101
Non-current liabilities$320,727
 $23,603
$—
 $319,037
Redeemable non-controlling interest$36,661
 $46,265
(1)Summarized balance sheet information at December 31, 2018 excludes CareerBuilder as the investment was sold on September 13, 2018.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Other—Write-downs of investments, gains and losses on investment sales, and gains and losses from other investment transactions are included as non-operating items in the Company’s Consolidated Statements of Operations. In 2017, the Company recorded non-cash pretax impairment charges of $191 million to write down the Company’s investments in CareerBuilder and Dose Media, as discussed above. There were no impairments recorded in 20162018 and 2015.2016. These investments constitute nonfinancial assets measured at fair value on a nonrecurring basis in the Company’s Consolidated Balance Sheet and are classified as Level 3 assets in the fair value hierarchy established under ASC Topic 820. See Note 108 for a description of the hierarchy’s three levels.
The Company does not guarantee any indebtedness or other obligations for any of its equity method investees.
Marketable Equity Securities—On August 4, 2014, the Company completed the spin-off of its principal publishing operations into an independent company, tronc, Inc. (“tronc”).Tribune Publishing. The Company retained 381,354 shares of troncTribune Publishing common stock, representing at that time 1.5% of the outstanding common stock of tronc.Tribune Publishing. The Company classified the shares of troncTribune Publishing common stock as available-for-sale securities. On January 31, 2017, the Company sold


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

its troncTribune Publishing shares for net proceeds of $5 million and recognized a pretax gain of $5 million. As of December 31, 2016, the fair value and cost basis of the Company’s investment in tronc was $5 million and $0, respectively.

Cost MethodOther Equity Investments—Other equity investments are investments without readily determinable fair values. All of the Company’s cost methodother equity investments are in private companies areand have historically been recorded at cost, net of write-downs resulting from periodic evaluations of the carrying value of the investments. Upon adoption of ASU 2016-01 and ASU 2018-03, as further described in Note 1, the Company elected to use a measurement alternative for all investments without readily determinable fair values which allows the Company to measure the value of such equity investments at cost less impairments, if any, plus or minus changes resulting from observable price changes in orderly transaction for the identical or similar investment. Fair values associated with these investments will be remeasured either upon occurrence of an observable price change or upon identification of an impairment. Changes in the carrying value of these equity investments will be reflected in current earnings. In 2017, the Company recorded a non-cash pretax impairment charge of $3 million to write down one of the its cost methodother equity investments. The impairment charge resulted from a decline in the fair value of the investment that the Company determined to be other than temporary. As of December 31, 2017,2018, the Company’s cost methodother equity investments primarily include investments in New CubsCEV LLC (as defined and described below) and Taboola.com LTD (“Taboola”).
During 2018, the Company sold one of its other equity investments for $4 million and recognized a pretax gain of $4 million.
Chicago Cubs Transactions—On August 21, 2009, the Company and a newly-formed limited liability company, Chicago Entertainment Ventures, LLC (formerly Chicago Baseball Holdings, LLC) (“CEV LLC”), and its subsidiaries (collectively, “New Cubs LLC”), among other parties, entered into an agreement (the “Cubs Formation Agreement”) governing the contribution of certain assets and liabilities related to the businesses of the Chicago Cubs Major League Baseball franchise (the “Chicago Cubs”) owned by the Company and its subsidiaries to New Cubs LLC. The contributed assets included, but were not limited to, the Chicago Cubs Major League, spring training and Dominican Republic baseball operations, Wrigley Field, certain other real estate used in the business, and the 25.34% interest in Comcast SportsNet Chicago, LLC, which operates a local sports programming network in the Chicago area (collectively, the “Chicago Cubs Business”). On August 24, 2009, the Debtors filed a motion in the Bankruptcy Court seeking approval for the Company’s entry into the Cubs Formation Agreement and to perform all transactions necessary to effect the contribution of the Chicago Cubs Business to New Cubs LLC. On the same day, the Debtors announced that Tribune CNLBC, the principal entity holding the assets and liabilities of the Chicago Cubs, would commence a Chapter 11 case at a future date as a means of implementing the transactions contemplated by the Cubs Formation Agreement. On September 24, 2009, the Bankruptcy Court authorized the Debtors to perform the transactions contemplated by the Cubs Formation Agreement. On October 6, 2009, Major League Baseball announced unanimous approval of the transactions by the 29 other Major League Baseball franchises. Tribune CNLBC filed the CNLBC Petition on October 12, 2009, and the Bankruptcy Court granted Tribune CNLBC’s motion to approve the proposed contribution of the Chicago Cubs Business and related assets and


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

liabilities to New Cubs LLC by an order entered on October 14, 2009. The transactions contemplated by the Cubs Formation Agreement and the related agreements thereto (the “Chicago Cubs Transactions”) closed on October 27, 2009. The Company and its contributing subsidiaries and affiliates received a special cash distribution of $705 million, retained certain accounts receivable and certain deferred revenue payments and had certain transaction fees paid on their behalf by New Cubs LLC. In total, these amounts were valued at approximately $740 million. The full amount of the special cash distribution, as well as collections on certain accounts receivable that Tribune CNLBC retained after the transaction, were deposited with Tribune CNLBC. Tribune CNLBC held the funds pending their distribution under a confirmed and effective Chapter 11 plan for the Company, Tribune CNLBC and their affiliates, or further order of the Bankruptcy Court. These funds were fully distributed to the Company’s creditors on the Effective Date.
As a result of these transactions, as of December 31, 2018, Northside Entertainment Holdings LLC (f/k/a Ricketts Acquisition LLCLLC) (“RA LLC”NEH”) ownsowned approximately 95% and the Company ownsowned approximately 5% of the membership interests in New CubsCEV LLC. RA LLCNEH has operational control of New CubsCEV LLC. The Company’s equity interest in New CubsCEV LLC is accounted for as a cost methodan other equity investment and was recorded at fair value as of October 27, 2009 based on the cash contributed to New CubsCEV LLC at closing. During 2017 and 2016, the Company made capital contributions to New CubsCEV LLC totaling $5 million and $3 million, respectively, and continuescontinued to maintain its membership interest of approximately 5%. The carrying value of this investment was $20 million at December 31, 2018 and $22 million at December 31, 2017 and $18 million at December 31, 2016.2017.
The fair market value of the contributed Chicago Cubs Business exceeded its tax basis. The transaction was structured to comply with the partnership provisions of the IRC and related regulations. Accordingly, the distribution of the portion of the special distribution equal to the net proceeds of the debt facilities entered into by New Cubs LLC concurrent with the closing of these transactions did not result in an immediate taxable gain. The portion of the special distribution in excess of the net proceeds of such debt facilities is treated as taxable sales proceeds with respect to a portion of the contributed Chicago Cubs Business (see Note 13)11).


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Concurrent with the closing of the transaction, the Company executed guarantees of collection of certain debt facilities entered into by New Cubs LLC. TheAs of December 31, 2017, the guarantees arewere capped at $699 million plus unpaid interest. The guarantees are reduced asIn the first quarter of 2018, New Cubs LLC makes principal payments on the underlying loans. To the extent that payments are made under the guarantees, the Company will be subrogated to, and will acquire, all rightsrefinanced a portion of the debt lenders against New Cubs LLC.
Newsday Transactions—On May 11, 2008,which was guaranteed by the Company entered into an agreement (the “Newsday Formation Agreement”) with CSC and NMG Holdings, Inc. to form a new limited liability company (“Newsday LLC”). On July 29, 2008, the Company consummated the closing of the transactions (collectively, the “Newsday Transactions”) contemplated by the Newsday Formation Agreement. Under the terms of the Newsday Formation Agreement, the Company, through Tribune ND, Inc. (formerly Newsday, Inc.) and other subsidiaries of the Company, contributed certain assets and related liabilities of the Newsday Media Group business (“NMG”) to Newsday LLC, and CSC contributed cash of $35 million and newly issued senior notes of Cablevision Systems Corporation (“Cablevision”) with a fair market value of $650 million to NHLLC. The fair market value of the contributed NMG net assets exceeded their tax basis due to the Company’s low tax basis in the contributed intangible assets. However, the transaction did not result in an immediate taxable gain because the transaction was structured to comply with the partnership provisions of the IRC and related regulations.
Concurrent with the closing of this transaction, NHLLC and Newsday LLC borrowed $650 million under a secured credit facility, and the Company receivedceased being a special cash distribution of $612 million from Newsday LLC as well as $18 million of prepaid rent under two leases for certain facilities used by NMG and located in Melville, New York. Following the closingguarantor of the transaction,refinanced debt. As of December 31, 2018, the remaining guarantees were capped at $249 million plus unpaid interest.
On August 21, 2018, NEH provided a written notice (the “Call Notice”) to the Company retained ownership of these facilities. Borrowings under this facility are guaranteed by CSC and NMG Holdings, Inc., each a wholly-owned subsidiary of Cablevision and are secured by a lien on the assets of Newsday LLC and the assets of NHLLC, including $650 million of senior notes of Cablevision issued in 2008 and contributed by CSC. Priorthat NEH was exercising its right pursuant to the saleAmended and Restated Limited Liability Company Agreement (the “CEV LLC Agreement”) of its remaining investmentCEV LLC to purchase the Company’s 5% membership interest in NHLLC, as further described below, the Company indemnified CSC and NMG Holdings, Inc. with respect to any payments that CSC or NMG Holdings, Inc. made under their guarantee of the $650 million of borrowings by NHLLC and Newsday LLC under their secured credit facility. From the July 29, 2008 closing date of the Newsday Transactions through the third anniversary of the closing date, the maximum amount of potential indemnification payments (“Maximum Indemnification Amount”) was $650 million. After the third anniversary, the Maximum Indemnification Amount was reduced by $120 million.CEV LLC. The Maximum Indemnification Amount was to be reduced each year thereafter by $35 million until January 1, 2018, at which point the Maximum Indemnification Amount was to be reduced to $0. The Maximum Indemnification Amount was $425 million at December 28, 2014. On September 2, 2015, the Company sold its 3%5% ownership interest in NHLLCCEV LLC on January 22, 2019 for pretax proceeds of $107.5 million. The Company expects to CSC Holdings, LLC for $8recognize a pretax gain of $86 million and recognizedin the first quarter of 2019. As a $3 million gain in connection withresult of the sale. The Company’ssale, the total remaining deferred tax liability of $101$69 million (aswill become currently payable in 2019, as further described in Note 13) became payable upon consummation of the sale. The tax payments were made in the fourth quarter of 2015. At the time of11. Concurrently with the sale, the Company was also released fromceased being a guarantor of all indemnification obligations related to the payments that CSC or NMG Holdings, Inc. are required to make under their guarantee of the $650 million of borrowingsdebt facilities held by NHLLC and Newsday LLC under their secured credit facility.New Cubs LLC.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 9:7: DEBT
Debt consisted of the following (in thousands):
 December 31, 2017 December 31, 2016
Term Loan Facility   
Term B Loans due 2020, effective interest rate of 3.84% and 3.82%, net of unamortized discount and debt issuance costs of $1,900 and $31,230$187,725
 $2,312,218
Term C Loans due 2024, effective interest rate of 3.85%, net of unamortized discount and debt issuance cost of $21,7831,644,109
 —
5.875% Senior Notes due 2022, net of debt issuance costs of $12,649 and $15,4371,087,351
 1,084,563
Dreamcatcher Credit Facility due 2018, effective interest rate of 4.08%, net of unamortized discount and debt issuance costs of $80—
 14,770
Total debt2,919,185
 3,411,551
Less: Debt due within one year—
 19,924
Long-term debt, net of current portion$2,919,185
 $3,391,627

 December 31, 2018 December 31, 2017
Term Loan Facility   
Term B Loans due 2020, effective interest rate of 3.84%, net of unamortized discount and debt issuance costs of $1,268 and $1,900$188,357
 $187,725
Term C Loans due 2024, effective interest rate of 3.85%, net of unamortized discount and debt issuance cost of $18,305 and $21,7831,647,587
 1,644,109
5.875% Senior Notes due 2022, net of debt issuance costs of $9,861 and $12,6491,090,139
 1,087,351
Total debt$2,926,083
 $2,919,185
Maturities—The Company’s debt and other obligations outstanding as of December 31, 20172018 mature as shown below (in thousands):
2018$—
2019—
$—
2020189,625
189,625
2021—
—
20221,105,727
1,105,727
202317,614
Thereafter1,660,165
1,642,551
Total debt2,955,517
2,955,517
Unamortized discounts and debt issuance costs(36,332)(29,434)
Total debt, net of discounts and debt issuance costs$2,919,185
$2,926,083
Secured Credit Facility—On December 27, 2013, in connection with its acquisition of Local TV, the Company as borrower, entered into a $4.073 billion secured credit facility with a syndicate of lenders led by JPMorgan (the “Secured Credit Facility”). The Secured Credit Facility consisted of a $3.773 billion term loan facility (the “Term Loan Facility”) and a $300 million revolving credit facility (the “Revolving Credit Facility”). The proceeds of the Term Loan Facility were used to pay the purchase price for Local TV and refinance the existing indebtedness of Local TV and the Term Loan Exit Facility (see Note 3).a pre-existing term loan facility. The proceeds of the Revolving Credit Facility are available for working capital and other purposes not prohibited under the Secured Credit Facility. The Revolving Credit Facility includes borrowing capacity for letters of credit and for borrowings on same-day notice, referred to as “swingline loans.” Borrowings under the Revolving Credit Facility are subject to the satisfaction of customary conditions, including absence of defaults and accuracy of representations and warranties. Under the terms of the Secured Credit Facility, the amount of the Term Loan Facility and/or the Revolving Credit Facility may be increased and/or one or more additional term or revolving facilities may be added to the Secured Credit Facility by entering into one or more incremental facilities, subject to a cap equal to the greater of (x) $1.000 billion and (y) the maximum amount that would not cause the Company’s net first lien senior secured leverage ratio (treating debt


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

incurred in reliance of this basket as secured on a first lien basis whether or not so secured), as determined pursuant to the terms of the Secured Credit Facility, to exceed 4.50:1.00.
The obligations of the Company under the Secured Credit Facility are guaranteed by all of the Company’s wholly-owned domestic subsidiaries, other than certain excluded immaterial subsidiaries (the “Guarantors”). The Secured Credit Facility is secured by a first priority lien on substantially all of the personal property and assets of the


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Company and the Guarantors, subject to certain exceptions. The Secured Credit Facility contains customary limitations, including, among other things, on the ability of the Company and its subsidiaries to incur indebtedness and liens, sell assets, make investments and pay dividends to its shareholders.
2015 AmendmentSecured Credit Facility Amendments
On June 24, 2015, the Company, the Guarantors and JPMorgan, as administrative agent, entered into an amendment (the “Amendment”“2015 Amendment”) to the Secured Credit Facility. Prior to the 2015 Amendment and the Prepayment (as defined below), $3.479 billion of term loans (the “Former Term Loans”) were outstanding under the Secured Credit Facility. Pursuant to the 2015 Amendment, certain lenders under the Secured Credit Facility converted their Former Term Loans into a new tranche of term loans (the “Converted Term B Loans”), along with certain new lenders who advanced $1.802 billion into the new tranche of term loans (the “New Term B Loans” and, together with the Converted Term B Loans, the “Term B Loans”). The proceeds of Term B Loans advanced by the new lenders were used to prepay in full all of the Former Term Loans that were not converted into Term B Loans. In connection with the 2015 Amendment, the Company used the net proceeds from the sale of the Notes (as defined below), together with cash on hand, to prepay (the “Prepayment”) $1.100 billion of the Term B Loans. After giving effect to the 2015 Amendment and the Prepayment, there were $2.379 billion of Term B Loans outstanding under the Secured Credit Facility.
On January 27, 2017, the Company, the Guarantors, JPMorgan, as administrative agent, and certain existing lenders entered into an amendment (the “2017 Amendment”) to the Secured Credit Facility, pursuant to which, among other things, (i) certain term lenders converted a portion of their Term B Loans outstanding immediately prior to the closing of the 2017 Amendment (the “Former Term B Loans”) into a new tranche of term loans in an aggregate amount (after giving effect to the Term Loan Increase Supplement (as defined below)) of approximately $1.761 billion (the “Term C Loans”), electing to extend the maturity date of the Term C Loans from December 27, 2020 to the earlier of (A) January 27, 2024 and (B) solely to the extent that more than $600 million in aggregate principal amount of the Company’s 5.875% Senior Notes due 2022 remain outstanding on such date, the date that is 91 days prior to July 15, 2022 (as such date may be extended from time to time) and (ii) certain revolving lenders under the Revolving Credit Facility converted all of their revolving commitments into a new tranche of revolving commitments (the “New Initial Revolving Credit Commitments;” the existing tranche of revolving commitments of the remaining revolving lenders, the “Existing Revolving Tranche”), electing to extend the maturity date of the New Initial Revolving Credit Commitments from December 27, 2018 to January 27, 2022. A portion of each of the Former Term B Loans and the Existing Revolving Tranche remained in place following the 2017 Amendment and each will mature on its respective existing maturity date. Concurrent with the 2017 Amendment, the Company entered into certain interest rate swaps with a notional value of $500 million to hedge variable rate interest payments associated with the Term C Loans due under the 2017 Amendment. See Note 8 for further information on the interest rate swaps.
In connection with the 2017 Amendment of the Revolving Credit Facility, the Company incurred fees of $2 million, all of which were deferred. As of the date of the 2017 Amendment, the aggregate unamortized debt issuance costs related to the Term Loan Facility totaled $25 million and unamortized discount totaled $6 million. In connection with the 2017 Amendment, the Company paid fees to Term C Loan lenders of $4 million, which are considered a debt discount, all of which were deferred, and incurred transaction costs of $13 million, of which $1 million was deferred with the remainder expensed as part of loss on extinguishment and modification of debt, as further described below. Subsequent to the 2017 Amendment, the Company had $600 million of Term B Loans outstanding.
Term Loan Facility
As a result of the Amendment, the Term B Loans bear interest, at the Company’s election, at a rate per annum equal to either (i) LIBOR, adjusted for statutory reserve requirements on Euro currency liabilities (“Adjusted LIBOR”), subject to a minimum rate of 0.75%, plus an applicable margin of 3.0% or (ii) the sum of a base rate determined as the highest of (a) the federal funds effective rate from time to time plus 0.5%, (b) the prime rate of interest announced by the administrative agent as its prime rate, and (c) Adjusted LIBOR plus 1.0%, plus an applicable margin of 2.0%. Overdue amounts under the


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Term Loan Facility are subject to additional interest of 2.0% per annum. The Term B Loans mature on December 27, 2020. Quarterly installments in an amount equal to 0.25% of the new principal amount of the Term B Loans are due on a quarterly basis. Voluntary prepayments of the Term B Loans are permitted at any time, in minimum principal amounts, without premium or penalty, subject to a 1.00% premium payable in connection with certain repricing transactions within the first twelve months after the Amendment. The Company is required to prepay the Term B Loans: (i) with the proceeds from certain material asset dispositions (but excluding proceeds from dispositions of publishing assets, real estate and its equity investments in CareerBuilder, LLC and Classified Ventures, LLC and, in certain instances, Television Food Network, G.P.), provided that the Company has rights to reinvest the proceeds to acquire assets for use in its business, within specified periods of time, (ii) with the proceeds from the issuance of new debt (other than debt permitted to be incurred under the Secured Credit Facility) and (iii) 50% (or, if the Company’s net first lien senior secured leverage ratio, as determined pursuant to the terms of the Secured Credit Facility, is less than or equal to 4.00:1.00, then 0%) of “excess cash flow” generated by the Company for the fiscal year, as determined pursuant to the terms of the Secured Credit Facility, less the aggregate amount of optional prepayments under the Revolving Credit Facility to the extent that such prepayments are accompanied by a permanent reduction in commitments under the Revolving Credit Facility, and subject to a $500 million minimum liquidity threshold before any such prepayment is required, provided that the Company’s mandatory prepayment obligations in the case of clause (i) and clause (iii) above do not apply at any time during which the Company’s corporate rating issued by Moody’s is Baa3 or better and BBB- or better by S&P.
Prior to the Amendment, the Term Loan Facility boreC Loans bear interest, at the Company’s election, of the Company, at a rate per annum equal to either (i) the sum of Adjusted LIBOR, subject to a minimum rate of 1.00%0.75%, plus an applicable margin of 3.0%


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

or (ii) the sum of a base rate determined as the highest of (a) the federal funds effective rate from time to time plus 0.5%, (b) the prime rate of interest announced by the administrative agent as its prime rate, and (c) Adjusted LIBOR plus 1.0% (“Alternative Base Rate”), plus an applicable margin of 2.0%. Voluntary prepayments of the Term C Loans are permitted at any time, in minimum principal amounts, without premium or penalty.
On February 1, 2017, the Company used $400 million from the proceeds from the Gracenote Sale to prepay a portion of its Term B Loans. Subsequent to this payment, the Company’s quarterly installments related to the remaining principal amount of Term B Loans are no longer due. During the third quarter of 2017, the Company used $102 million of after-tax proceeds received from its participation in the FCC spectrum auction to prepay $10 million of the Term B Loans and $91 million of the Term C Loans. Subsequent to these payments, the Company’s quarterly installments related to the remaining principal amount of the Term C Loans are not due until the third quarter of 2022. See Note 10 for additional information regarding the Company’s participation in the FCC’s incentive auction.
As a result of the 2017 Amendment and the Term Loan Facility prepayments, the Company recorded charges of $20 million on the extinguishment and modification of debt in the Company’s Consolidated Statements of Operations for the year ended December 31, 2017. The loss included a write-off of unamortized debt issuance costs of $7 million and an unamortized discount of $2 million as a portion of the Term Loan Facility was considered extinguished for accounting purposes as well as an expense of $12 million of third parties fees as a portion of the Term Loan Facility was considered a modification transaction under ASC 470, “Debt.”
The FormerCompany’s unamortized transaction costs and unamortized discount related to the Term LoansLoan Facility were issued$20 million and $24 million at December 31, 2018 and December 31, 2017, respectively. These deferred costs are recorded as a discountdirect deduction from the carrying amount of 25 basis points, totaling $9 million, which was beingan associated debt liability in the Company’s Consolidated Balance Sheets and amortized to interest expense over the expectedcontractual term of either the Term Loan Facility. The Company incurred and deferred transaction costs totaling $78 million in connection with the FormerB Loans or Term C Loans, in fiscal 2013. Transaction costs of $6 million relating to the Term Loan Exit Facility (as defined and described in Note 3), which was extinguished in the fourth quarter of 2013, continued to be amortized over the term of the Term Loan Facility pursuant to ASC Topic 470 “Debt.” As of the date of the Amendment, the aggregate unamortized debt issuance costs totaled $64 million and unamortized debt issue discount totaled $8 million.
In connection with the Amendment, the Company paid fees to Term B Loan lenders of $6 million, which are considered a debt discount, of which $4 million was deferred, and incurred transaction costs of $2 million, of which $1 million was deferred. The Company recorded a loss of $37 million on the extinguishment of the Former Term Loan in the Company’s Consolidated Statement of Operations for the fiscal year ended December 31, 2015 as a portion of the facility was considered extinguished for accounting purposes. The loss included the write-off of unamortized transaction costs of $30 million, an unamortized discount of $4 million and other transaction costs of $4 million.applicable.
Revolving Credit Facility
Loans under the Revolving Credit Facility bear interest, at the election of the Company, at a rate per annum equal to either (i) Adjusted LIBOR plus an applicable margin in the range of 2.75% to 3.0% or (ii) the Alternative Base Rate plus an applicable margin in the range of 1.75% to 2.0%, based on the Company’s net first lien senior secured leverage ratio for the applicable period. The Revolving Credit Facility also includes a fee on letters of credit equal to the applicable margin for Adjusted LIBOR loans and a letter of credit issuer fronting fee equal to 0.125%


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

per annum, in each case, calculated based on the stated amount of letters of credit and payable quarterly in arrears, in addition to the customary charges of the issuing bank. Under the terms of the Revolving Credit Facility, the Company is also required to pay a commitment fee, payable quarterly in arrears, calculated based on the unused portion of the Revolving Credit Facility; the commitment fee will be 0.25%, 0.375% or 0.50% based on the Company’s net first lien senior secured leverage ratio for the applicable period. Overdue amounts under the Revolving Credit Facility are subject to additional interest of 2.0% per annum.
Availability under the Revolving Credit Facility will terminate, and all amounts outstanding under the Revolving Credit Facility will be due and payable on December 27, 2018, but the Company may repay outstanding loans under the Revolving Credit Facility at any time without premium or penalty, subject to breakage costs in certain circumstances. The loans under the Revolving Credit Facility also must be prepaid and the letters of credit cash collateralized or terminated to the extent the extensions of credit under the Revolving Credit Facility exceed the amount of the revolving commitments.
The Revolving Credit Facility includes a covenant which requires the Company to maintain a net first lien leverage ratio of no greater than 5.25 to 1.00 for each period of four consecutive fiscal quarters most recently ended. The covenant is only required to be tested at the end of each fiscal quarter if the aggregate amount of revolving loans, swingline loans and letters of credit (other than undrawn letters of credit and letters of credit that have been fully cash collateralized) outstanding exceed 25% of the amount of revolving commitments. This covenant was not required to be tested for the quarterly period ended December 31, 2017.
At December 31, 2016, there were no borrowings outstanding under the Revolving Credit Facility; however, there were $23 million of standby letters of credit outstanding, primarily in support of the Company’s workers’ compensation insurance programs.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2017 Amendment
On January 27, 2017, the Company entered into an amendment (the “2017 Amendment”) to the Secured Credit Facility, pursuant to which, among other things, (i) certain term lenders converted a portion of their Term B Loans outstanding immediately prior to the closing of the 2017 Amendment (the “Former Term B Loans”) into a new tranche of term loans in an aggregate amount (after giving effect to the Term Loan Increase Supplement (as defined below)) of approximately $1.761 billion (the “Term C Loans”), electing to extend the maturity date of the Term C Loans from December 27, 2020 to the earlier of (A) January 27, 2024 and (B) solely to the extent that more than $600 million in aggregate principal amount of the Company’s 5.875% Senior Notes due 2022 remain outstanding on such date, the date that is 91 days prior to July 15, 2022 (as such date may be extended from time to time) and (ii) certain revolving lenders under the Revolving Credit Facility converted all of their revolving commitments into a new tranche of revolving commitments (the “New Initial Revolving Credit Commitments;” the existing tranche of revolving commitments of the remaining revolving lenders, the “Existing Revolving Tranche”), electing to extend the maturity date of the New Initial Revolving Credit Commitments from December 27, 2018 to January 27, 2022.
Under the Secured Credit Facility, the Term C Loans bear interest, at the Company’s election, at a rate per annum equal to either (i) the sum of LIBOR, adjusted for statutory reserve requirements on Euro currency liabilities (“Adjusted LIBOR”), subject to a minimum rate of 0.75%, plus an applicable margin of 3.0% or (ii) the sum of a base rate determined as the highest of (a) the federal funds effective rate from time to time plus 0.5%, (b) the prime rate of interest announced by the administrative agent as its prime rate, and (c) Adjusted LIBOR plus 1.0%, plus an applicable margin of 2.0%. Under the Revolving Credit Facility, the loans made pursuant to a New Initial Revolving Credit Commitments bear interest initially, at the Company’s election, at a rate per annum equal to either (i) the sum of Adjusted LIBOR, subject to a minimum rate of zero, plus an applicable margin of 3.0% or (ii) the sum of a base rate determined as the highest of (a) the federal funds effective rate from time to time plus 0.5%, (b) the prime rate of interest announced by the administrative agent as its prime rate, and (c) Adjusted LIBOR plus 1.0%, plus an applicable margin of 2.0%. The interest rate and other terms specific to the Term B Loans and Existing Revolving Tranche were unchanged by the 2017 Amendment.
The Term C Loans and the New Initial Revolving Credit Commitments are secured by the same collateral and guaranteed by the same guarantors as the Former Term B Loans. Voluntary prepayments of the Term C Loans are permitted at any time, in minimum principal amounts, without premium or penalty, subject to a 1.00% premium payable in connection with certain repricing transactions within the first six months after the 2017 Amendment. The Revolving Credit Facility includes a covenant that requires the Company to maintain a net first lien leverage ratio of no greater than 5.25 to 1.00 for each period of four consecutive fiscal quarters most recently ended. The covenant is only required to be tested at the end of each fiscal quarter if the aggregate amount of revolving loans, swingline loans and letters of credit (other than undrawn letters of credit and letters of credit that have been fully cash collateralized) outstanding exceed 35% of the aggregate amount of revolving commitments as of the date of the 2017 Amendment (after giving effect to Revolving Credit Facility Increase (as defined below)). The other terms ofThis covenant was not required to be tested for the Term C Loans and the New Initial Revolving Credit Commitments are also generally the same as the terms of the Former Term B Loans and the Existing Revolving Tranche, as applicable. A portion of each of the Former Term B Loans and the Existing Revolving Tranche remained in place following the 2017 Amendment and each will mature on its respective existing maturity date. Concurrent with the 2017 Amendment, the Company entered into certain interest rate swaps with a notional value of $500 million to hedge variable rate interest payments associated with the Term C Loans due under the 2017 Amendment. See Note 10 for further information on the interest rate swaps.quarterly period ended December 31, 2018.
On January 27, 2017, immediately following effectiveness of the 2017 Amendment, the Company increased (A) the amount of its Term C Loans pursuant to an Increase Supplement (the “Term Loan Increase Supplement”) between the Company and the term lender party thereto and (B) the amount of commitments under its Revolving Credit Facility from $300 million to $420 million (the “Revolving Credit Facility Increase”), pursuant to (i) an Increase Supplement, among the Company and certain existing revolving lenders and (ii) a Lender Joinder Agreement, among the Company, a new revolving lender and JPMorgan, Chase Bank N.A., as administrative agent.
In connectionaccordance with the 2017 Amendment, on December 27, 2018, the amount of commitments under the Revolving Credit Facility the Company incurred fees of $2 million,


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

all of which were deferred.was reduced to $338 million. At December 31, 2018 and December 31, 2017, there were no borrowings outstanding under the Revolving Credit Facility, however, there were $20 million and $21 million, respectively, of standby letters of credit outstanding, primarily in support of the Company’s workers’ compensation insurance programs.
As of the date of the 2017 Amendment, the aggregate unamortized debt issuance costs related to the Term Loan Facility totaled $25 million and unamortized discount totaled $6 million. In connection with the 2017 Amendment, the Company paid fees to Term C Loan lenders of $4 million, which are considered a debt discount, all of which were deferred, and incurred transaction costs of $13 million, of which $1 million was deferred with the remainder expensed as part of loss on extinguishment and modification of debt, as further described below. Subsequent to the 2017 Amendment, the Company had $600 million of Term B Loans outstanding. On February 1, 2017, the Company used $400 million from the proceeds from the Gracenote Sale to prepay a portion of its Term B Loans. Subsequent to this payment, the Company’s quarterly installments related to the remaining principal amount of Term B Loans are no longer due. As a result of the 2017 Amendment and the $400 million prepayment, the Company recorded charges of $19 million on the extinguishment and modification of debt in the Company’s Consolidated Statements of Operations in the first quarter of 2017. The loss consisted of a write-off of unamortized debt issuance costs of $6 million and an unamortized discount of $1 million associated with the Term B Loans as a portion of the Term Loan Facility was considered extinguished for accounting purposes as well as an expense of $12 million of third parties fees as a portion of the Term Loan Facility was considered a modification transaction under ASC 470, “Debt.”
During the third quarter of 2017, the Company used $102 million of after-tax proceeds received from its participation in the FCC spectrum auction to prepay $10 million of the Term B Loans and $91 million of the Term C Loans. Subsequent to these payments, the Company’s quarterly installments related to the remaining principal amount of the Term C Loans are not due until the third quarter of 2022. The Company recorded charges of $1 million associated with debt extinguishment in the third quarter of 2017. See Note 12 for additional information regarding the Company’s participation in the FCC’s incentive auction.
The Company’s unamortized transaction costs and unamortized discount related to the Term Loan Facility were $24 million and $31 million at December 31, 2017 and December 31, 2016, respectively. These deferred costs are recorded as a direct deduction from the carrying amount of an associated debt liability in the Company’s Consolidated Balance Sheets and amortized to interest expense over the contractual term of either the Term B Loans or Term C Loans, as appropriate.
5.875% Senior Notes due 2022—On June 24, 2015, the Company issued $1.100 billion aggregate principal amount of its 5.875% Senior Notes due 2022 (the “Notes”) under an Indenture, dated as of June 24, 2015 (the “Base Indenture”), among the Company, certain subsidiaries of the Company, as guarantors (the “Subsidiary Guarantors”), and The Bank of New York Mellon Trust Company, N.A. (in such capacity, the “Trustee”), as supplemented by the First Supplemental Indenture, dated as of June 24, 2015, among the Company, the Subsidiary Guarantors and the Trustee (the “First Supplemental Indenture”), the Second Supplemental Indenture, dated as of September 8, 2015, among the Company, the Subsidiary Guarantors party thereto and the Trustee (the “Second Supplemental Indenture”), and the Third Supplemental Indenture, dated as of October 8, 2015, among the Company, the Subsidiary Guarantors party thereto and the Trustee (the “Third Supplemental Indenture” and, together with the Base Indenture, the First Supplemental Indenture and the Second Supplemental Indenture, the “Indenture”). The Company used the net proceeds from the sale of the Notes, together with cash on hand, to make the Prepayment discussed above.
During the second quarter of 2015, the Company incurred and deferred The Company’s unamortized transaction costs of $19 million,related to the Notes, which are classified as a debt discount in the Company’s Consolidated Balance Sheets and amortized to interest expense over the contractual term of the Notes. During the first half of 2016, the Company incurred and deferred an additional $1 million of transaction costs related to filing an exchange offer registration statement for the Notes (as described below). The Company’s unamortized transaction costs related to the Notes, were $13$10 million and $15$13 million at December 31, 20172018 and December 31, 2016,2017, respectively.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Notes bear interest at a rate of 5.875% per annum and interest is payable semi-annually in arrears on January 15 and July 15, commencing on January 15, 2016. The Notes mature on July 15, 2022. The Notes are unsecured senior indebtedness of the Company and are effectively subordinated to the Company’s and the Subsidiary Guarantors’ existing and future secured indebtedness, including indebtedness under the Secured Credit Facility, to the extent of the value of the assets securing such indebtedness. The Indenture provides that the guarantee of each Subsidiary Guarantor is an unsecured senior obligation of that Subsidiary Guarantor. The Notes are, subject to certain exceptions, guaranteed by each of the Company’s domestic subsidiaries that guarantee the Company’s obligations under the Secured Credit Facility.
The Company may redeem the Notes, in whole or in part, at any time prior to July 15, 2018, at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to (but excluding) the redemption date, plus the applicable make-whole premium. The Company may redeem the Notes, in whole or in part, at any time (i) on and after July 15, 2018 and prior to July 15, 2019, at a price equal to 102.938% of the principal amount of the Notes, (ii) on or after July 15, 2019 and prior to July 15, 2020, at a price equal to 101.469% of the principal amount of the Notes, and (iii) on or after July 15, 2020, at a price equal to 100.000% of the principal amount of the Notes, in each case, plus accrued and unpaid interest, if any, to (but excluding) the applicable redemption date. In addition, at any time prior to July 15, 2018, the Company may redeem up to 40% of the aggregate principal amount of the Notes with the proceeds of certain equity offerings at a redemption price of 105.875%, plus accrued and unpaid interest, if any, to (but excluding) the date of redemption.
The Indenture contains covenants that, among other things, limit the ability of the Company and the Company’s restricted subsidiaries to: incur additional indebtedness, guarantee indebtedness or issue certain preferred shares; pay dividends on, redeem or repurchase stock or make other distributions in respect of its capital stock; repurchase, prepay or redeem subordinated indebtedness; make loans and investments; create restrictions on the ability of the Company’s restricted subsidiaries to pay dividends to the Company or the Subsidiary Guarantors or make other intercompany transfers; create liens; transfer or sell assets; consolidate, merge or sell or otherwise dispose of all or substantially all of its assets; enter into certain transactions with affiliates; and designate subsidiaries as unrestricted subsidiaries. Upon the occurrence of certain events constituting a change of control triggering event, the Company is required to make an offer to repurchase all of the Notes (unless otherwise redeemed) at a purchase price equal to 101% of their principal amount, plus accrued and unpaid interest, if any to (but excluding) the repurchase date. If the Company sells assets under certain circumstances, it must use the proceeds to make an offer to purchase the Notes at a price equal to 100% of their principal amount, plus accrued and unpaid interest, if any, to (but excluding) the repurchase date.
Notes Registration Rights Agreement
In connection with the issuance of the Notes, the Company and the Subsidiary Guarantors entered into an exchange and registration rights agreement, dated as of June 24, 2015, with Deutsche Bank Securities Inc. and Citigroup Global Markets Inc. (the “Notes Registration Rights Agreement”). Pursuant to the Notes Registration Rights Agreement, the Company and the Subsidiary Guarantors filed an exchange offer registration statement with the SEC to exchange the Notes and the Guarantees for substantially identical securities registered under the Securities Act of 1933, as amended (the “Securities Act”). The exchange offer registration statement on Form S-4 was declared effective on April 1, 2016, and on May 4, 2016, the Company completed the exchange of $1.100 billion of the Notes and the Guarantees for $1.100 billion of the Company’s 5.875% Senior Notes due 2022 and the related guarantees, which were registered under the Securities Act.
Consent Solicitation
On June 22, 2017, the Company announced that it received consents from 93.23% of holders of the Notes outstanding as of the record date of June 12, 2017, to effect certain proposed amendments to the Indenture. The Company undertook the consent solicitation (the “Consent Solicitation”) at the request and expense of Sinclair in accordance with the terms of the Sinclair Merger Agreement. In conjunction with receiving the requisite consents, on June 22, 2017, the Company, the Subsidiary Guarantors party thereto and the Trustee, entered into the fourth supplemental indenture (the “Fourth Supplemental Indenture”) to the Indenture, to effect certain amendments to the proposedIndenture to facilitate the integration of the Company and the Notes with and into Sinclair’s debt capital structure in connection with the Sinclair Merger. As further described in Note 1, the Company terminated the Sinclair Merger Agreement on August 9, 2018. Therefore, the amendments contemplated in the Fourth Supplemental Indenture will never become operative.


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

to (i) eliminate any requirement for the Company to make a “Change of Control Offer” (as defined in the Indenture) to holders of the Notes in connection with the transactions contemplated by the Merger Agreement, (ii) clarify the treatment under the Indenture of the proposed structure of the Merger and to facilitate the integration of the Company and its subsidiaries and the Notes with and into Sinclair’s debt capital structure, and (iii) eliminate the expense associated with producing and filing with the SEC separate financial reports for Sinclair Television Group, Inc., a wholly-owned subsidiary of Sinclair, as successor issuer of the Notes, if Sinclair or any other parent entity of the successor issuer of the Notes, in its sole discretion, provides an unconditional guarantee of the payment obligations of the successor issuer under the Notes (collectively, the “Amendments”). The Fourth Supplemental Indenture became effective immediately upon execution, but the Amendments will not become operative until immediately prior to the effective time of the Merger.
Dreamcatcher—The Company and the Guarantors guaranteed the obligations of Dreamcatcher under its senior secured credit facility (the “Dreamcatcher Credit Facility”) entered into in connection with Dreamcatcher’s acquisition of the Dreamcatcher stations (see Note 1). The obligations of the Company and the Guarantors under the Dreamcatcher Credit Facility were secured on a pari passu basis with its obligations under the Secured Credit Facility. As further described in Note 12,10, on April 13, 2017, the FCC announced the conclusion of the incentive auction, the results of the reverse and forward auction and the repacking of broadcast television spectrum. The Company participated in the auction and a Dreamcatcher station received $26 million of pretax proceeds in 2017, as further described in Note 12.10. Any proceeds received by Dreamcatcher as a result of the incentive auction were required to be first used to repay the Dreamcatcher Credit Facility. During the third quarter of 2017, the Company used $12.6 million of after-tax proceeds from the FCC spectrum auction to prepay the Dreamcatcher Credit Facility. The debt extinguishment charge recorded by the Company in the year ended December 31, 2017 was immaterial. The Company made the final payment to pay off in full the Dreamcatcher Credit Facility in September 2017.
NOTE 10:8: FAIR VALUE MEASUREMENTS
The Company measures and records in its consolidated financial statements certain assets and liabilities at fair value. ASC Topic 820 establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). This hierarchy consists of the following three levels:
Level 1 – Assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market.
Level 2 – Assets and liabilities whose values are based on inputs other than those included in Level 1, including quoted market prices in markets that are not active; quoted prices of assets or liabilities with similar attributes in active markets; or valuation models whose inputs are observable or unobservable but corroborated by market data.
Level 3 – Assets and liabilities whose values are based on valuation models or pricing techniques that utilize unobservable inputs that are significant to the overall fair value measurement.
On January 27, 2017, concurrent with the 2017 Amendment, the Company entered into interest rate swaps with certain financial institutions for a total notional value of $500 million with a duration that matches the maturity of the Company’s Term C Loans. The interest rate swaps are designated as cash flow hedges and are considered highly effective. As a result, no ineffectiveness has been recognized in the Consolidated Statements of Operations during the2018 and 2017. Additionally, for the interest rate swaps, no amounts are excluded from the assessment of hedge effectiveness. The monthly net interest settlements under the interest rate swaps are reclassified out of accumulated other comprehensive (loss) incomeAOCI and recognized in interest expense consistent with the recognition of interest expense on the Company’s Term C Loans. For the year ended December 31, 2017, realizedRealized losses of $1 million and $5 million were recognized in interest expense.expense in 2018 and 2017, respectively. As of December 31, 2017,2018, the fair value of the interest rate swaps was recorded in other current liabilitiesnon-current assets in the amount of $1$6 million with the unrealized lossgain recognized in other comprehensive income (loss) income.. As of December 31, 2017,2018, the Company expects approximately $2$1 million to be reclassified out of


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

accumulated other comprehensive (loss) income and into AOCI as a reduction of interest expense over the next twelve months. The interest rate swap fair value which is derived from a discounted cash flow analysis based on the terms of the contracts and observable market interest rate curves, is considered Level 2 within the fair value hierarchy as it includes quoted prices for similar instruments as well as interest rates and yield curves that are observable in the market.
The Company held certain marketable equity securities which are traded on national stock exchanges. These securities were recorded at fair value and are categorized as Level 1 within the fair value hierarchy. These investments were measured at fair value on a recurring basis. On January 31, 2017, the Company sold its tronc shares for net proceeds of $5 million and recognized a pretax gain of $5 million in the first quarter of 2017. As of December 31, 2016 the fair value and cost basis was $5 million and $0, respectively. Certain assets are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis, but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment).
The carrying values of cash and cash equivalents, restricted cash and cash equivalents, trade accounts receivable and trade accounts payable approximate fair value due to their short term to maturity. Certain of the Company’s cash equivalents are held in money market funds which are valued using net asset value (“NAV”) per share, which would beare considered Level 1 in the fair value hierarchy.


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Estimated fair values and carrying amounts of the Company’s financial instruments that are not measured at fair value on a recurring basis were as follows (in thousands):
December 31, 2017 December 31, 2016December 31, 2018 December 31, 2017
Fair
Value		 Carrying
Amount		 Fair
Value		 Carrying
Amount		Fair
Value		 Carrying
Amount		 Fair
Value		 Carrying
Amount
Cost method investments$27,593
 $27,593
 $26,748
 $26,748
Term Loan Facility              
Term B Loans due 2020$189,704
 $187,725
 $2,359,571
 $2,312,218
$187,965
 $188,357
 $189,704
 $187,725
Term C Loans due 2024$1,666,942
 $1,644,109
 $—
 $—
$1,631,742
 $1,647,587
 $1,666,942
 $1,644,109
5.875% Senior Notes due 2022$1,132,417
 $1,087,351
 $1,120,482
 $1,084,563
$1,111,000
 $1,090,139
 $1,132,417
 $1,087,351
Dreamcatcher Credit Facility$—
 $—
 $14,952
 $14,770
TheEach category of financial instruments are classified in the following methods and assumptions were used to estimatelevel of the fair value of each category of financial instruments.hierarchy:
Cost Method InvestmentsTerm Loan Facility—CostThe fair value of the outstanding principal balance of the term loans under the Company’s Term Loan Facility at both December 31, 2018 and December 31, 2017 are classified in Level 2 of the fair value hierarchy.
5.875% Senior Notes due 2022—The fair value of the outstanding principal balance of the Notes at December 31, 2018 and December 31, 2017 are classified in Level 2 of the fair value hierarchy.
Investments Without Readily Determinable Fair Values—Non-equity method investments in private companies are recorded at cost, net of write-downsless impairments, if any, plus or minus changes resulting from periodic evaluations ofobservable price changes in orderly transactions for the carrying value of the investments.identical or similar investment as further described in Note 6. In 2017, the Company recorded a non-cash pretax impairment charge of $3 million to write down one of its cost methodother equity investments. The impairment charge resulted from a decline in the fair value of the investment that the Company determined to be other than temporary. No other events or changes in circumstances occurred during 20172018 or 20162017 that suggested a significant adverse effect onan impairment or an observable price change to any of these investments resulting from an orderly transaction for the fair value of the Company’s remaining investments.identical or similar investment. The carrying value of the costnon-equity method investments at both December 31, 2017 and December 31, 2016 approximated fair value. The cost method investments would beare classified in Level 3 of the fair value hierarchy.
Term Loan Facility—The fair value of the outstanding principal balance of the term loans under the Company’s Term Loan Facility at both December 31, 2017 and December 31, 2016 is based on pricing from observable market information in a non-active market and would be classified in Level 2 of the fair value hierarchy.
5.875% Senior Notes due 2022—The fair value of the outstanding principal balance of the Notes at December 31, 2017 and December 31, 2016 is based on pricing from observable market information in a non-active market and would be classified in Level 2 of the fair value hierarchy.


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Dreamcatcher Credit Facility—The fair value of the outstanding principal balance of the Company’s Dreamcatcher Credit Facility at December 31, 2016 is based on pricing from observable market information for similar instruments in a non-active market and would be classified in Level 2 of the fair value hierarchy.
NOTE 11:9: CONTRACTS PAYABLE FOR BROADCAST RIGHTS
Contracts payable for broadcast rights totaled $554$466 million and $556$554 million at December 31, 20172018 and December 31, 2016,2017, respectively. Scheduled future obligations under contractual agreements for broadcast rights at December 31, 20172018 are as follows (in thousands):
2018$253,244
2019130,469
$232,687
2020114,141
121,781
202151,596
90,616
20224,214
18,846
20232,032
Total$553,664
$465,962


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 12:10: COMMITMENTS AND CONTINGENCIES
Broadcast Rights—The Company has entered into certain contractual commitments for broadcast rights that are not currently available for broadcast, including programs not yet produced. In accordance with ASC Topic 920, such commitments are not included in the Company’s consolidated financial statements until the cost of each program is reasonably determinable and the program is available for its first showing or telecast. If programs are not produced, the Company’s commitments would expire without obligation. Payments for broadcast rights generally commence when the programs become available for broadcast. At December 31, 20172018 and December 31, 2016,2017, these contractual commitments totaled $860$603 million and $1.2 billion,$860 million, respectively.
Operating Leases—The Company leases certain equipment and office and production space under various operating leases. Net lease expense from continuing operations was $33 million, $31 million and $24 million in 2018, 2017 and $23 million in 2017, 2016, and 2015, respectively.
The Company’s future minimum lease payments under non-cancelable operating leases at December 31, 20172018 were as follows (in thousands):
2018$28,717
201926,552
$33,042
202025,828
31,035
202120,271
22,496
202218,891
22,004
202320,798
Thereafter90,241
91,961
Total$210,500
$221,336
Other Commitments—At December 31, 2017,2018, the Company had commitments under purchasing obligations related to capital projects, technology services, news and market data services, and talent contracts totaling $331$247 million.
FCC Regulation—Various aspects of the Company’s operations are subject to regulation by governmental authorities in the United States. The Company’s television and radio broadcasting operations are subject to FCC


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

jurisdiction under the Communications Act of 1934, as amended. FCC rules, among other things, govern the term, renewal and transfer of radio and television broadcasting licenses, and limit the number of media interests in a local market that a single entity can own. Federal law also regulates the rates charged for political advertising and the quantity of advertising within children’s programs.
Television and radio broadcast station licenses are granted for terms of up to eight years and are subject to renewal by the FCC in the ordinary course, at which time they may be subject to petitions to deny the license renewal applications. As of March 1, 2018,2019, the Company had FCC authorization to operate 39 television stations and one AM radio station.
Under the FCC’s “Local Television Multiple Ownership Rule” (the “Duopoly Rule”) in effect on December 31, 2017, the Company, a company may own up to two television stations within the same Nielsen Media Research Designated Market Area (“DMA”) (i) provided certain specified signal contours of the stations do not overlap, (ii) where certain specified signal contours of the stations overlap but, at the time the station combination was created, no more than one of the stations was a top 4-ratedtop-four-rated station and the market would continue to have at least eight independently-owned full power stations after the station combination is created or (iii) where certain waiver criteria are met. In a report and order issued in August 2016 and effective December 1, 2016 (the “2014 Quadrennial Review Order”), the FCC, among other things, adopted a rule applying the “top-4”“top-four” ownership limitation to “affiliations swaps” within a market, to “affiliation swaps,” that prohibitedthereby prohibiting transactions between networks and their local station affiliates pursuant to which affiliations are reassigned in a way that results in common ownership or control of two of the top-four rated stations in the DMA. The prohibition is prospective only and does not apply to multiple top-4top-four network multicast streams broadcast by a single station. On


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

November 16, 2017 the FCC adopted an order on reconsideration (the “2014 Quadrennial Review Reconsideration Order”) eliminating the eight-voices test and providing for a case-by-case review of the presumption against television combinations involving two to-fourtop-four ranked stations in a market. These changes became effective on February 7, 2018. The 2014 Quadrennial Review Order isand the 2014 Quadrennial Review Reconsideration Order both are subject of ato pending petitionpetitions for judicial review by the Third Circuit. A petition for judicial review of the 2014 Quadrennial Review Reconsideration Order was filed on January 16, 2018 at the U.S. Court of Appeals for the Third Circuit and is pending. On January 25, 2018, the petitioners in that case filed an “Emergency Petition” asking the court to stay the effectiveness of all the FCC rule changes embodied in the 2014 Quadrennial Review Reconsideration Order. In an order issued on February 7, 2018, the court denied the “Emergency Petition” and stayed the petitioners’ underlying appeal of the 2014 Quadrennial Review Reconsideration Order for six months. On December 13, 2018, the FCC issued a Notice of Proposed Rulemaking initiating the 2018 Quadrennial Review (the “2018 Quadrennial Review”), which, among other things, seeks comment on all aspects of the Duopoly Rule’s application and implementation, including whether it remains necessary to serve the public interest in the current television marketplace. The Company cannot predict the outcomes of these proceedings, or the effect on our business.
The Company owns duopolies permitted in the Seattle, Denver, St. Louis, Indianapolis, Oklahoma City and New Orleans DMAs. The Indianapolis duopoly is permitted under the Duopoly Rule because it met the top-4/8top four voices test at the time we acquired WTTV(TV)/WTTK(TV) in July 2002. Duopoly Rule waivers granted in connection with the FCC’s approval of the Company’s plan of reorganization (the “Exit Order”) or the Local TV Acquisition (the “Local TV Transfer Order”) authorize the Company’s ownership of duopolies in the New Haven-Hartford and Fort Smith-Fayetteville DMAs, and full power “satellite” stations in the Denver and Indianapolis DMAs. All of these combinations are permitted under the Duopoly Rule as revised by the 2014 Quadrennial Review Reconsideration Order, subject to reauthorization of any outstanding waivers in the event of the assignment or transfer of control of any of the affected station licenses.
The FCC’s “Newspaper Broadcast Cross Ownership Rule” (the “NBCO Rule”) in effect on December 31, 2017, generally prohibits an entity from owning or holding “attributable interests” in both daily newspapers and broadcast stations in the same market. On August 4, 2014, the Company completed the Publishing Spin-off and retained 381,354 shares of tronc common stock, then representing 1.5% of the outstanding common stock of tronc. As such, the Company does not have an attributable interest in the daily newspaper business or operations of tronc. As a result of the pro rata distribution of tronc stock to shareholders of the Company, the three attributable shareholders of the Company (collectively, the “Attributable Shareholders”) became attributable shareholders of tronc. Two Attributable Shareholders report that they have divested their interest in tronc, while one maintains the status quo with respect to its interest in the company.


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company’s television/newspaper interests are subject to a temporary waiver of the NBCO Rule which was granted by the FCC in conjunction with its approval of the Exit Order. On November 12, 2013, the Company filed with the FCC a request for extension of the temporary NBCO Rule waivers granted in the Exit Order. That request is pending. In the 2014 Quadrennial Review Order the FCC modified the NBCO Rule by providing an exception for failed or failing entities and allowing for consideration of waivers of the rule on a case-by-case basis. The 2014 Quadrennial Review Order on Reconsideration eliminated the NBCO Rule altogether effective as of February 7, 2018, thus, any residual attributable interests are permitted. The 2014 Quadrennial Review Order is the subject of a pending petition for judicial review by the U.S. Court of Appeals for the Third Circuit. A petition for judicial review of the 2014 Quadrennial Review Reconsideration Order was filed on January 16, 2018 at the U.S. Court of Appeals for the Third Circuit and is pending. The Company cannot predict the outcomes of these proceedings or their effect on our business.
The FCC’s “National Television Multiple Ownership Rule” prohibits the Company from owning television stations that, in the aggregate, reach more than 39% of total U.S. television households, subject to a 50% discount of the number of television households attributable to UHF stations (the “UHF Discount”). In a Report and Order issued on September 7, 2016 (the “UHF Discount Repeal Order”), the FCC repealed the UHF Discount but grandfathered existing station combinations, like ours,(including the Company’s) that exceeded the 39% national reach cap as a result of the elimination of the UHF Discount, subject to compliance in the event of a future change of control or assignment of license. The FCC reinstated the UHF Discount in an Order on Reconsideration adopted on April 20, 2017 (the “UHF Discount Reconsideration Order”). Both the September 7, 2016 order repealingA petition for judicial review of the UHF Discount and the April 20, 2017 order reinstating it are subject to pending petitions for judicial reviewReconsideration Order by the U.S. Court of Appeals for the District of Columbia Circuit. Circuit was dismissed on jurisdictional grounds on July 25, 2018. A petition for review of the UHF Discount Repeal Order by the U.S. Court of Appeals for the District of Columbia Circuit was dismissed as moot on December 19, 2018.
On December 18, 2017, the FCC released a Notice of Proposed Rulemaking seeking comment generally, on the continuing propriety of a national cap and the Commission’s jurisdiction with respect to the cap. The Company cannot predict the outcome of these proceedings, or their effect on its business.
The Company provides certain operational support and other services to Dreamcatcher pursuant to SSAs. In the 2014 Quadrennial Order, the FCC adopted reporting requirements for SSAs. This rule was retained in the 2014 Quadrennial Review Reconsideration Order.
In a Report and Order and Further Notice of Proposed Rulemaking issued on March 31, 2014, the FCC sought comment on whether to eliminate or modify its “network non-duplication” and “syndicated exclusivity” rules, pursuant to which local television stations may enforce their contractual exclusivity rights with respect to network and syndicated programming. That proceeding remains pending. Pursuant to the Satellite Television Extension and Localism Act of 2010 (“STELA”) Reauthorization Act, enacted in December 2014 (“STELAR”), the FCC has adopted regulations prohibiting a television station from coordinating retransmission consent negotiations or negotiating retransmission consent on a joint basis with a separately owned television station in the same market. The Company does not currently engage in retransmission consent negotiations jointly with any other stations in its markets. In response to Congress’s directive in STELAR, on September 2, 2015, the FCC issued a Notice of Proposed Rulemaking (“NPRM”) seeking comment on whether the FCC should make changes to its rules requiring


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

that commercial broadcast television stations and MVPDs negotiate in “good faith” for the retransmission by MVPDs of local television signals. On July 14, 2016, Chairmanthen-Chairman Wheeler announced that the FCC will not adopt additional rules governing parties’ good faith negotiation obligations, (however,however, the FCC has not yet formally terminated the proceeding).proceeding.
Federal legislation enacted in February 2012 authorized the FCC to conduct a voluntary “incentive auction” in order to reallocate certain spectrum currently occupied by television broadcast stations to mobile wireless broadband services, to “repack” television stations into a smaller portion of the existing television spectrum band and to require television stations that do not participate in the auction to modify their transmission facilities, subject to reimbursement for reasonable relocation costs up to an industry-wide total of $1.750 billion.billion, which amount was increased by $1 billion pursuant to the adoption of an amended version of the Repack Airwaves Yielding Better Access for Users of Modern Services (RAY BAUM’S) Act of 2018 by the U.S. Congress on March 23, 2018. On April 13, 2017, the FCC announced the conclusion of the incentive auction, the results of the reverse and forward auction and the repacking of the broadcast television spectrum. The Company participated in the auction and has received approximately $191 million in pretax proceeds (including $26 million of proceeds received by a Dreamcatcher station) as of December 31, 2017. The Company used $102 million of after-tax proceeds to prepay a portion of the


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Term Loan Facility. After-tax proceeds of $12.6 million received by a Dreamcatcher station were used to prepay a substantial portion of the Dreamcatcher Credit Facility. The Company received gross pretax proceeds of $172 million from licenses sold by the Company in the FCC spectrum auction in 2017 and expects to recognizerecognized a net pretax gain of $133 million in the first quarter of 2018 related to the surrender of the spectrum of these television stations in January 2018. TheIn 2017, the Company also received $84 million of pretax proceeds for sharing arrangements whereby the Company will provide hosting services to the counterparties. Additionally, the Company paid $66 million of proceeds in 2017 to counterparties who will host certain of the Company’s television stations under sharing arrangements. The proceeds received by the Company for hosting the counterparties have been recorded in deferred revenue and other long-term liabilitiesobligations and will beis being amortized to other revenue over a period of 30 years starting with the commencement of each arrangement. The proceeds paid to the counterparties have been recorded in prepaid and other long-term assets and will be amortized to direct operating expense over a period of 30 years starting with the commencement of each arrangement.
Twenty-two of the Company’s television stations (including WTTK, which operates as a satellite station of WTTV) will beare required to change frequencies or otherwise modify their operations as a result of the repacking. In doing so, the stations could incur substantial conversion costs, reduction or loss of over-the-air signal coverage or an inability to provide high definition programming and additional program streams.
Through December 31, 2018, the Company incurred $27 million in capital expenditures for the spectrum repack, of which $24 million were incurred in 2018. The Company expects that the reimbursements from the FCC’s special fund will cover the majority of the Company’s costs and expenses related to the repacking. However, the Company cannot currently predict the effect of the repacking, whether the special fund will be sufficient to reimburse all of the Company’s costs and expenses related to the repacking, the timing of reimbursements or any spectrum-related FCC regulatory action.
The Company received FCC reimbursements of $11 million during the year ended December 31, 2018. The reimbursements are included as a reduction in SG&A and are presented as an investing inflow in the Consolidated Statement of Cash Flows.
As described in Note 1, the Company completed the Local TV Acquisition on December 27, 2013 pursuant to FCC staff approval granted on December 20, 2013 in the Local TV Transfer Order. On January 22, 2014, Free Press filed an Application for Review seeking review by the full Commission of the Local TV Transfer Order. The Company filed an Opposition to the Application for Review on February 21, 2014. Free Press filed a reply on March 6, 2014. The matter is pending.
From time to time, the FCC revises existing regulations and policies in ways that could affect the Company’s broadcasting operations. In addition, Congress from time to time considers and adopts substantive amendments to


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

the governing communications legislation. The Company cannot predict such actions or their resulting effect upon the Company’s business and financial position.
Chapter 11 Reorganization and Confirmation Order Appeals—On December 8, 2008 (the “Petition Date”), Tribune Company and 110 of its direct and indirect wholly-owned subsidiaries (collectively, the “Debtors”) filed voluntary petitions for relief under chapter 11 (“Chapter 11”) of title 11 of the United States Code (the “Bankruptcy Code”) in the U.S. Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). On April 12, 2012, the Debtors, Oaktree Capital Management, L.P. (“Oaktree”), Angelo, Gordon & Co. L.P. (“AG”), the Official Committee of Unsecured Creditors (the “Creditors’ Committee”), and JPMorgan Chase Bank, N.A. (“JPMorgan” and, together with the Debtors, Oaktree, AG and the Creditors’ Committee, the “Plan Proponents”) filed the Fourth Amended Joint Plan of Reorganization for Tribune Company and its Subsidiaries with the Bankruptcy Court (as subsequently modified by the Plan Proponents, the “Plan”).
On July 23, 2012, the Bankruptcy Court issued an order confirming the Plan (the “Confirmation Order”). The Plan became effective and the Debtors emerged from Chapter 11 on December 31, 2012 (the “Effective Date”). The Bankruptcy Court has entered final decrees that have collectively closed 106 of the Debtors’ Chapter 11 cases. The remaining Debtors’ Chapter 11 proceedings continue to be jointly administered under the caption In re Tribune Media Company, et al., Case No. 08-13141. Where appropriate, the Company and its business operations as conducted on or prior to December 30, 2012 are herein referred to collectively as the “Predecessor.”
Since the Effective Date, the Company has substantially consummated the various transactions contemplated under the Plan. In particular, the Company has made all distributions of cash, Common Stock and Warrants that were required to be made under the terms of the Plan to creditors holding allowed claims as of December 31, 2012. Claims of general unsecured creditors that become allowed claims on or after the Effective Date have been or will be paid on the next quarterly distribution date after such allowance.
As of the Effective Date, approximately 7,400 proofs of claim had been filed against the Debtors. Amounts and payment terms for these claims, if applicable, were established in the Plan. The Plan requires the Company to reserve cash in amounts sufficient to make certain additional payments that may become due and owing pursuant to the Plan subsequent to the Effective Date. As of December 31, 2018, restricted cash and cash equivalents held by the Company to satisfy the remaining claim obligations was $17 million and is estimated to be sufficient to satisfy such obligations.
As of December 31, 2018, all but 403 proofs of claim against the Debtors had been withdrawn, expunged, settled or otherwise satisfied. The majority of the remaining proofs of claim were filed by certain of the Company’s former directors and officers, asserting indemnity and other related claims against the Company for claims brought against them in lawsuits arising from the Leveraged ESOP Transactions. Those lawsuits are pending in multidistrict litigation before the U.S. District Court for the Southern District of New York in proceedings captioned In re Tribune Co. Fraudulent Conveyance Litigation. Under the Plan, the indemnity claims of the Company’s former directors and officers must be set off against any recovery by the litigation trust formed pursuant to the Plan (the “Litigation Trust”) against any of those directors and officers, and the Litigation Trust is authorized to object to the allowance of any such indemnity-type claims.
The ultimate amounts to be paid in resolutions of the remaining proofs of claim, including indemnity claims, continues to be subject to uncertainty. If the aggregate allowed amount of the remaining claims exceeds the restricted cash and cash equivalents held for satisfying such claims, the Company would be required to satisfy the allowed claims from its cash on hand from operations.
Notices of appeal of the Confirmation Order were filed by (i) Aurelius Capital Management, LP, on behalf of its managed entities that were holders of the Predecessor’s senior notes and Exchangeable Subordinated Debentures due 2029 (“PHONES”); (ii) Law Debenture Trust Company of New York (n/k/a Delaware Trust Company) (“Delaware Trust Company”) and Deutsche Bank Trust Company Americas (“Deutsche Bank”), each successor trustees under the respective indentures for the Predecessor’s senior notes; (iii) Wilmington Trust Company, as successor indenture trustee for the PHONES, and (iv) EGI-TRB, L.L.C., a Delaware limited liability company


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

wholly-owned by Sam Investment Trust (a trust established for the benefit of Samuel Zell and his family) (the “Zell Entity”). The appellants sought, among other relief, to overturn the Confirmation Order and certain prior orders of the Bankruptcy Court embodied in the Plan, including the settlement of certain claims and causes of action related to the Leveraged ESOP Transactions consummated by the Predecessor, the Tribune Company employee stock ownership plan, the Zell Entity and Samuel Zell in 2007. As of December 31, 2018, each of the Confirmation Order appeals have been dismissed or otherwise resolved by a final order, with the exception of the appeals of Delaware Trust Company and Deutsche Bank. On July 30, 2018, the United States District Court for the District of Delaware (the “District Court”) entered an order affirming (i) the Bankruptcy Court’s judgment overruling Delaware Trust Company’s and Deutsche Bank’s objections to confirmation of the Plan and (ii) the Bankruptcy Court’s order confirming the Plan. Delaware Trust Company and Deutsche Bank appealed the District Court’s order to the United States Court of Appeals for the Third Circuit (the “Third Circuit”) on August 27, 2018. That appeal remains pending before the Third Circuit. If the remaining appellants succeed on their appeals, the Company’s financial condition may be adversely affected.
Reorganization Items, Net—ASC Topic 852, “Reorganizations” requires that the financial statements for periods subsequent to the filing of the Chapter 11 cases distinguish transactions and events that are directly associated with the reorganization from the operations of the business. Reorganization items, net included in the Consolidated Statements of Operations primarily include professional advisory fees and other costs related to the resolution of unresolved claims and totaled $2 million for each of the years ended December 31, 2018 and December 31, 2017 and $1 million for the year ended December 31, 2016. Operating net cash outflows resulting from reorganization costs for 2018 totaled $2 million and for each of 2018, 2017 and 2016, and were principally for the payment of professional advisory fees and other fees in each year. All other items included in reorganization costs in 2018, 2017 and 2016 are primarily non-cash adjustments.
The Company expects to continue to incur certain expenses pertaining to the Chapter 11 proceedings throughout 2019 and potentially in future periods. These expenses will include primarily professional advisory fees and other costs related to the resolution of unresolved claims.
Other Contingencies—The Company and its subsidiaries are defendants from time to time in actions for matters arising out of their business operations. In addition, the Company and its subsidiaries are involved from time to time as parties in various regulatory, environmental and other proceedings with governmental authorities and administrative agencies. See Note 1311 for a discussion of potential income tax liabilities.
In July 2017, following the initial filing of the proxy statement/prospectus (the “Proxy Statement/Prospectus”) by each of Sinclair and the Company with the SEC relating to the Merger, four purported Tribune Media Company shareholders (the “Plaintiffs”) filed putative class action lawsuits against the Company, members of the Company’s Board of Directors, and, in certain instances, Sinclair and Samson Merger Sub, Inc. (collectively, the “Parties”) in the United States District Courts for the Districts of Delaware and Illinois. The actions are captioned McEntire v. Tribune Media Company, et al., 1:17-cv-05179 (N.D. Ill.), Duffy v. Tribune Media Company, et al., 1:17-cv-00919 (D. Del.), Berg v. Tribune Media Company, et al., 1:17-cv-00938 (D. Del.), and Pill v. Tribune Media Company, et al., 1:17-cv-00961 (D. Del.) (collectively, the “Actions”). These lawsuits allege that the Proxy Statement/Prospectus omitted material information and was materially misleading in violation of the Securities Exchange Act of 1934, as amended, and SEC Rule 14a-9 and generally seek, as relief, class certification, preliminary and permanent injunctive relief, rescission or rescissory damages, and unspecified damages. On September 15, 2017, the Parties entered into a memorandum of understanding (the “MOU”) to resolve the individual claims asserted by the Plaintiffs. The MOU acknowledges that the Company, in part in response to the claims asserted in the Actions, filed certain supplemental disclosures with the SEC on August 16, 2017 and that the Company, solely in response to the Actions, communicated to four third parties that participated in the sale process and twenty-three third parties that have


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

signed confidentiality agreements in connection with potential divestitures that the “standstill” obligations of such third parties were waived. The Parties further agreed that the Company would make the additional supplemental disclosures, which are set forth in the Company’s Current Report on Form 8-K, filed with the SEC on September 15, 2017. Further, the MOU specifies that within five business days of the closing of the Merger, the Parties will file stipulations of dismissal for the Actions pursuant to Federal Rule of Civil Procedure 41(a), which will dismiss Plaintiffs’ individual claims with prejudice, and dismiss the claims asserted on behalf of a purported class of the Company’s shareholders without prejudice. The MOU will not affect the timing of the Merger or the amount or form of consideration to be paid in the Merger.
The Company does not believe that any other matters or proceedings presently pending will have a material adverse effect, individually or in the aggregate, on its consolidated financial position, results of operations or liquidity.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 13:11: INCOME TAXES
The following is a reconciliation of income taxes from continuing operations computed at the U.S. federal statutory rate of 35% to income tax expense from continuing operations reported in the Consolidated Statements of Operations (in thousands):
2017 2016 20152018 2017 2016
(Loss) income from continuing operations before income taxes$(118,296) $434,242
 $(289,419)
Income (loss) from continuing operations before income taxes$525,660
 $(118,296) $434,242
          
Federal income taxes at 35%(41,404) 151,985
 (101,297)
Federal income tax rate21% 35% 35%
Federal income taxes110,389
 (41,404) 151,985
State and local income taxes, net of federal tax benefit(4,606) 17,474
 3,195
23,218
 (4,606) 17,474
Domestic production activities deduction(5,539) (6,807) (6,554)—
 (5,539) (6,807)
Non-deductible reorganization and transaction costs7,598
 497
 622
(2,959) 7,598
 497
Non-deductible goodwill—
 —
 133,350
Impact of federal and state rate changes(262,851) —
 —
(23,291) (262,851) —
Income tax settlements and other adjustments, net634
 179,558
 (7,842)(909) 634
 179,558
Other, net4,795
 4,495
 4,444
6,682
 4,795
 4,495
Income tax (benefit) expense from continuing operations$(301,373) $347,202
 $25,918
Income tax expense (benefit) from continuing operations$113,130
 $(301,373) $347,202
          
Effective tax rate254.8% 80.0% (9.0)%21.5% 254.8% 80.0%
In 2018, income tax expense amounted to $113 million, which reflects a $24 million discrete income tax benefit primarily resulting from return to provision adjustments which have the effect of adjusting the provisional discrete net tax benefit recorded due to Tax Reform as defined and further described below, partially offset by a $1 million charge primarily due to a decrease in the Company’s net state deferred tax assets as a result of a change in the Company’s state effective income tax rate.
In 2017, income tax benefit amounted to $301 million, which reflects a $256 million provisional discrete net tax benefit due to the Tax Reform as defined and further described below and a one-time benefit of $7 million due to a decrease in the Company’s net state deferred tax liabilities as a result of a change in the Company’s state effective income tax rate.
On December 22, 2017, the Tax Cuts and Jobs Act (“Tax Reform”) was signed into law. Under ASC Topic 740, the effects of Tax Reform are recognized in the period of enactment and as such arewere recorded in the Company’s fourth quarter of 2017. The Company is in the process of analyzing certain provisions of Tax Reform including but not limited to the repeal of the domestic production activities deduction and changes to the deductibility of executive compensation. Consistent with the guidance under ASC Topic 740, and subject to Staff Accounting Bulletin (“SAB”) 118, which provides for a measurement period to complete the accounting for certain elements of Tax Reform, the Company recorded the provisional impact from the enactment of Tax Reform in the fourth quarter of 2017. As a result of Tax Reform, the Company recorded a provisional discrete net tax benefit of $256 million, primarily due to a remeasurement of the net deferred tax liabilities resulting from the decrease in the U.S. federal


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

corporate income tax rate from 35% to 21%. Further impactsIn 2018, the Company completed the accounting for the income tax effects of Tax Reform may be reflectedand recorded an additional income tax benefit of $24 million to its net deferred tax liabilities, primarily resulting from return to provision adjustments which have the effect of adjusting the provisional discrete net tax benefit recorded in future quarters upon issuancethe fourth quarter of clarifications to existing law or additional technical guidance from2017. The tax benefit was recorded as the Departmentresult of Treasurynew information, including higher than expected pension contributions and the completion ofnew filing positions reported in the Company’s income tax return filings.returns as they became due. While the Company considers the income tax accounting related to Tax Reform to be complete, the Company continues to evaluate new guidance and tax legislation as it is issued. Tax Reform also provided for a one-time deemed mandatory repatriation of post-1986 undistributed foreign subsidiary earnings and profits (“E&P”) through the year ended December 31, 2017. The Company does not have any net accumulated E&P in its foreign subsidiaries and therefore is not subject to tax for the year ended December 31, 2017. Further, the Company has analyzed the effects of new taxes due on certain foreign income, such as global intangible low-taxed


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

income (“GILTI”), base-erosion anti-abuse tax (“BEAT”), foreign-derived intangible income (“FDII”) and limitations on interest expense deductions (if certain conditions apply) that are effective starting in fiscal 2018. The Company has determined that these new provisions are not material or applicable to the Company.
In 2016, income tax expense amounted to $347 million, which reflects a $191 million charge related to the Newsday settlement, as described below. In addition, tax expense included favorable adjustments of $11 million related to the resolution of certain federal and state income tax matters and other adjustments.
In 2015, income tax expense amounted to $26 million, which reflects the tax impact of the reversal of $381 million of book loss related to an impairment of non-deductible goodwill. In addition, tax expense included favorable adjustments of $8 million primarily related to the resolution of certain federal and state income tax matters and other adjustments.
The Company has not recorded a provision for deferred U.S. income tax expense on any undistributed earnings of foreign subsidiaries since the Company intends to indefinitely reinvest the earnings of these foreign subsidiaries outside the U.S. The Company had less than $1 million at each of December 31, 2017,2018, December 31, 20162017 and December 31, 2015.2016. The amount of unrecognized U.S. deferred income tax liability with respect to these undistributed foreign earnings is not material.
Components of income tax expense (benefit) expense from continuing operations were as follows (in thousands):
2017 2016 20152018 2017 2016
Current:          
U.S. federal$94,873
 $273,205
 $138,871
$21,069
 $94,873
 $273,205
State and local18,810
 35,057
 16,677
12,282
 18,810
 35,057
Sub-total113,683
 308,262
 155,548
33,351
 113,683
 308,262
Deferred:          
U.S. federal(381,063) 32,783
 (110,390)61,144
 (381,063) 32,783
State and local(33,993) 6,157
 (19,240)18,635
 (33,993) 6,157
Sub-total(415,056) 38,940
 (129,630)79,779
 (415,056) 38,940
Total income tax (benefit) expense from continuing operations$(301,373) $347,202
 $25,918
Total income tax expense (benefit) from continuing operations$113,130
 $(301,373) $347,202


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


Significant components of the Company’s net deferred tax assets and liabilities were as follows (in thousands):
December 31, 2017 December 31, 2016December 31, 2018 December 31, 2017
Deferred tax assets:      
Broadcast rights$53,249
 $78,531
$43,131
 $53,249
Postretirement benefits other than pensions1,970
 3,467
1,736
 1,970
Stock-based compensation and other employee benefits13,995
 20,261
11,747
 13,995
Pensions93,913
 175,766
98,980
 93,913
Deferred gain on spectrum49,103
 —
—
 49,103
Other accrued liabilities9,630
 15,518
8,339
 9,630
Other future deductible items14,479
 16,638
12,959
 14,479
Net operating loss carryforwards1,436
 1,582
1,067
 1,436
Accounts receivable1,240
 4,902
1,149
 1,240
239,015
 316,665
179,108
 239,015
Valuation allowance(633) —
(609) (633)
Total deferred tax assets$238,382
 $316,665
$178,499
 $238,382
      
Deferred tax liabilities:      
Net intangible assets$370,284
 $564,405
$357,353
 $370,284
Investments209,751
 399,103
213,887
 209,751
Deferred gain on partnership contributions96,076
 157,567
69,326
 96,076
Net properties70,445
 112,864
78,845
 70,445
Outside basis difference on Gracenote Companies—
 63,403
Other—
 3,571
Deferred gain on spectrum33,012
 —
Total deferred tax liabilities746,556
 1,300,913
752,423
 746,556
Net deferred tax liabilities$508,174
 $984,248
$573,924
 $508,174
Federal, State and Foreign Operating Loss Carryforwards—At December 31, 20172018 and December 31, 2016,2017, the Company had approximately $50$45 million and $56$50 million, respectively, of state operating loss carryforwards. The carryforwards will expire between 20192020 and 2029. The Company has not recorded a valuation allowance on the basis of management’s assessment that the net operating losses are more likely than not to be realized. The federal, state and foreign operating loss carryforwards attributable to the divested entities have been classified as discontinued operations, as further described in Note 2.
Newsday Transactions—As further described in Note 8, theThe Company consummated the closing of the Newsday Transactions on July 29, 2008. As a result of these transactions, CSC, through NMG Holdings, Inc., owned approximately 97% and the Company owned approximately 3% of NHLLC. The fair market value of the contributed NMG net assets exceeded their tax basis and did not result in an immediate taxable gain because the transaction was structured to comply with the partnership provisions of the IRC and related regulations. On September 2, 2015, the Company sold its 3% interest in Newsday, as further described in Note 8.Newsday. Through December 31, 2015, the Company made approximately $136 million of federal and state tax payments through its regular tax reporting process, which included $101 million that became payable upon closing of the sale of the Newsday partnership interest.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In March 2013, the IRS issued its audit report on the Company’s federal income tax return for 2008 which concluded that the gain from the Newsday Transactions should have been included in the Company’s 2008 taxable income. Accordingly, the IRS proposed a $190 million tax and a $38 million accuracy-related penalty. The Company would also be subject to interest on the tax and penalty due. The Company disagreed with the IRS’s position and


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

timely filed a protest in response to the IRS’s proposed tax adjustments. In addition, if the IRS prevailed, the Company also would have been subject to state income taxes, interest and penalties.
During the second quarter of 2016, as a result of extensive discussions with the IRS administrative appeals division, the Company reevaluated its tax litigation position related to the Newsday transaction and re-measured the cumulative most probable outcome of such proceedings. As a result, during the second quarter of 2016, the Company recorded a $102 million charge which was reflected as a $125 million current income tax reserve and a $23 million reduction in deferred income tax liabilities. The income tax reserve included federal and state taxes, interest and penalties while the deferred income tax benefit is primarily related to deductible interest expense. In connection with the potential resolution of the matter, the Company also recorded $91 million of income tax expense to increase the Company’s deferred income tax liability to reflect the reduction in the tax basis of the Company’s assets. The reduction in tax basis is required to reflect the reduction in the amount of the Company’s guarantee of the Newsday partnership debt which was included in the reported tax basis previously determined upon emergence from bankruptcy. During the third quarter of 2016, the Company reached an agreement with the IRS administrative appeals division regarding the Newsday transaction which applies for tax years 2008 through 2015. The terms of the agreement reached with the IRS appeals office were materially consistent with the Company’s reserves at June 30, 2016. During the fourth quarter of 2016, the Company recorded an additional $1 million of income tax expense primarily related to the additional accrual of interest. During the second half of 2016, the Company paid $122 million of federal taxes, state taxes (net of state refunds), interest and penalties. The tax payments were recorded as a reduction in the Company’s current income tax reserve described above. The remaining state liabilities of $5 million and $4 million of state liabilities are included in the income taxes payable account on the Company’s Consolidated Balance Sheet at bothDecember 31, 2018 and December 31, 2017, and December 31, 2016.respectively. In connection with the final agreement, the Company also recorded an income tax benefit of $3 million to adjust the previously recorded estimate of the deferred tax liability adjustment described above.
Chicago Cubs Transactions—As further described in Note 8,6, the Company consummated the closing of the Chicago Cubs Transactions on October 27, 2009. As a result of these transactions, Ricketts Acquisition LLC ownsNEH owned 95% and the Company ownsowned 5% of the membership interests in New CubsCEV LLC. The fair market value of the contributed assets exceeded the tax basis and did not result in an immediate taxable gain because the transaction was structured to comply with the partnership provisions of the IRC and related regulations. On June 28, 2016, the IRS issued the Company a Notice of Deficiency (“Notice”) which presents the IRS’s position that the gain should have been included in the Company’s 2009 taxable income. Accordingly, the IRS has proposed a $182 million tax and a $73 million gross valuation misstatement penalty. In addition, after-tax interest on the aforementioned proposed tax and penalty through December 31, 20172018 would be approximately $63$81 million. The Company continues to disagree with the IRS’s position that the transaction generated a taxable gain in 2009, the proposed penalty and the IRS’s calculation of the gain. During the third quarter of 2016, the Company filed a petition in U.S. Tax Court to contest the IRS’s determination. The Company continues to pursue resolution of this disputed tax matter with the IRS. If the IRS prevails in their position, the gain on the Chicago Cubs Transactions would be deemed to be taxable in 2009. The Company estimates that the federal and state income taxes would be approximately $225 million before interest and penalties. Any tax, interest and penalty due will be offset by tax payments made relating to this transaction subsequent to 2009. As of December 31, 2017,2018, the Company has paid or accrued approximately $53$80 million of federal and state tax payments through its regular tax reporting process. The Company does not maintain any tax reserves relating to the Chicago Cubs Transactions. In accordance with ASC Topic 740, the Company’s Consolidated Balance Sheet at December 31, 20172018 and December 31, 20162017 includes a deferred tax liability of $96$69 million and $158$96 million, respectively, related to the future recognition of taxable income related to the Chicago Cubs Transactions.
As further described in Note 6, on August 21, 2018, NEH provided the Call Notice to the Company that NEH was exercising its right to purchase the Company’s 5% membership interest in CEV LLC. The Company sold its 5% ownership interest in CEV LLC on January 22, 2019. As a result of the sale, the total remaining deferred tax liability of $69 million will become currently payable in 2019. The sale of the Company’s ownership interest in CEV LLC has no impact on the Company’s dispute with the IRS.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Accounting for Uncertain Tax Positions—The Company accounts for uncertain tax positions in accordance with ASC Topic 740, which addresses the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Under ASC Topic 740, a company may recognize the tax benefit of an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. ASC Topic 740 requires the tax benefit recognized in the financial statements to be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. ASC Topic 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, and disclosure.
The Company’s liability for unrecognized tax benefits totaled $21 million at December 31, 2018 and $23 million at both December 31, 2017 and December 31, 2016.2017. If all of the unrecognized tax benefits at those dates had been recognized, there would have been a favorable $20$18 million and $17$20 million impact on the Company’s reported income tax expense in 20172018 and 2016,2017, respectively.
As allowed by ASC Topic 740, the Company recognizes accrued interest and penalties related to uncertain tax positions in income tax expense. The Company’s accrued interest and penalties included in the Newsday settlement as described above totaled less than $1 million and $80 million for the years ended December 31, 2017 and December 31, 2016, respectively. Excluding the impact of Newsday, the Company’s accrued interest and penalties related to uncertain tax positions totaled $1 million of tax expense for both December 31, 20172018 and December 31, 2016.2017.
The Company is no longer subject to IRS audit and has paid all taxes for years prior to 2013, with the exception of 2009 as described above. State income tax returns are generally subject to examination for a period of three to five years after they are filed, although many states often receive extensions of time from the Company. In addition, states may examine the state impact of any federal changes for a period of up to one year after the states are formally notified of the changes. The Company currently has various state income tax returns in the process of examination or administrative appeals. No foreign income tax returns are currently in the process of examination or administrative appeal.
The following summarizes the changes in the Company’s liability for unrecognized tax benefits (in thousands):
Liability at December 31, 2015$33,632
Gross increase as a result of tax positions related to a prior period46,034
Gross increase as a result of tax positions related to the current period449
Gross decrease as a result of tax positions related to a prior period(2,591)
Decreases related to settlements with taxing authorities(45,130)
Reclassifications to income taxes payable(1,615)
Decrease related to statute of limitations expirations(8,247)
Liability at December 31, 2016$22,532
Gross increase as a result of tax positions related to a prior period223
Gross increase as a result of tax positions related to the current period2,414
Gross decrease as a result of tax positions related to a prior period(277)
Decreases related to settlements with taxing authorities(1,568)
Decrease related to statute of limitations expirations(2)
Liability at December 31, 2017$23,322
Gross increase as a result of tax positions related to a prior period25
Gross increase as a result of tax positions related to the current period279
Gross decrease as a result of tax positions related to a prior period(1,490)
Decreases related to settlements with taxing authorities(525)
Decrease related to statute of limitations expirations(229)
Liability at December 31, 2018$21,382


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following summarizes the changes in the Company’s liability for unrecognized tax benefits during 2015, 2016 and 2017 (in thousands):
Liability at December 28, 2014$18,852
Gross increase as a result of tax positions related to a prior period12,573
Gross increase as a result of tax positions related to the current period3,841
Decrease related to statute of limitations expirations(1,634)
Liability at December 31, 2015$33,632
Gross increase as a result of tax positions related to a prior period46,034
Gross increase as a result of tax positions related to the current period449
Gross decrease as a result of tax positions related to a prior period(2,591)
Decreases related to settlements with taxing authorities(45,130)
Reclassifications to income taxes payable(1,615)
Decrease related to statute of limitations expirations(8,247)
Liability at December 31, 2016$22,532
Gross increase as a result of tax positions related to a prior period223
Gross increase as a result of tax positions related to the current period2,414
Gross decrease as a result of tax positions related to a prior period(277)
Decreases related to settlements with taxing authorities(1,568)
Decrease related to statute of limitations expirations(2)
Liability at December 31, 2017$23,322
Although management believes its estimates and judgments are reasonable, the resolutions of the Company’s tax issues are unpredictable and could result in tax liabilities that are significantly higher or lower than that which has been provided by the Company. The Company believes it is reasonably possible that the total amount of unrecognized tax benefits could decrease by approximately $11$2 million within the next twelve months due to the resolution of tax examination issues and statute of limitations expirations.
NOTE 14:12: PENSION AND OTHER RETIREMENT PLANS
Employee Pension Plans—The Tribune Company pension plan was frozen as of December 1998 in terms of pay and service. An employee stock ownership plan established in 1988 was fully allocated at the end of 2003 and was replaced by an enhanced 401(k) plan in 2004.
In connection with the Times Mirror acquisition, the Company assumed defined benefit pension plans and various other contributory and non-contributory retirement plans covering substantially all of Times Mirror’s former employees. In general, benefits under the Times Mirror defined benefit plans were based on the employee’s years of service and compensation during the last five years of employment. In December 2005, the pension plan benefits for former Times Mirror non-union and non-Newsday employees were frozen. In March 2006, the pension plan benefits for Newsday union and non-union employees were frozen. Benefits provided by Times Mirror’s Employee Stock Ownership Plan (“Times Mirror ESOP”), which was fully allocated as of December 31, 1994, are used to offset certain pension plan benefits and, as a result, the defined benefit plan obligations are net of the actuarially equivalent value of the benefits earned under the Times Mirror ESOP. The maximum offset is equal to the value of the benefits earned under the defined benefit plan.
Effective January 1, 2008, the Tribune Company pension plan was amended to provide a tax-qualified, non-contributory guaranteed cash balance benefit for eligible employees. In addition, effective December 31, 2007, the Tribune Company pension plan was amended to provide a special one-time initial cash balance benefit for eligible


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

employees. On November 3, 2009, the Company announced that participant cash balance accounts in the Tribune Company pension plan would be frozen after an allocation equal to 3% of eligible compensation for the 2009 plan year was made to the accounts of eligible employees. Such an allocation was made during the first quarter of 2010.
The Company also maintains three small defined benefit pension plans for other employees and former employees and participates in several multiemployer pension plans on behalf of employees represented by certain unions. During 2011, two of these small Company-sponsored defined benefit pension plans were frozen. In March 2011, the pension plan benefits of The Baltimore Sun Company Retirement Plan for Mailers (the “Baltimore Mailers Plan”) were frozen in terms of pay and service for employees covered under the collective bargaining agreement between the Company and the Baltimore Mailers Union Local No. 888. In June 2011, the pension plan benefits of The Baltimore Sun Company Employees’ Retirement Plan were frozen in terms of pay and service for employees covered under the collective bargaining agreement between the Company and the Washington-Baltimore Newspaper Guild. The other small Company-sponsored defined benefit pension plan covers certain union employees covered by collective bargaining agreements and certain hourly employees not covered by a separate collective bargaining agreement. This plan is not frozen and represents less than 2% of the total projected benefit obligation for the Company-sponsored defined benefit pension plans at December 31, 2017.2018.
Multiemployer Pension Plans—As discussed above, the Company contributes to various multiemployer pension plans under the terms of collective-bargaining agreements that cover certain of its union-represented employees. The risks of participating in these multiemployer plans are different from single-employer plans in that assets contributed are pooled and may be used to provide benefits to employees of other participating employers. If a participating employer withdraws from or otherwise ceases to contribute to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. Alternatively, if the Company chooses to stop participating in one of its multiemployer plans, it may incur a withdrawal liability based on the unfunded status of the plan. The Company’s contributions to multiemployer pension plans were $3 million for each of 2018, 2017 2016 and 2015.2016. Based on contributions reported in the most recent Form 5500 for the largest multiemployer pension plan, the


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Company’s contributions represent less than 5% of the plan’s total contributions. No multiemployer pension plan contributed to by the Company was individually significant. The Pension Protection Act of 2006 (“PPA”) zone status as of December 31, 20172018 for the AFTRA Retirement Plan, which represented 94%95% of the Company’s contributions in 2017,2018, was green based on the plan’s year-end at November 30, 2016.2017. Pursuant to the PPA, a plan in the green zone is at least 80% funded. The Company’s participation in other plans was immaterial in 2017.2018.
Postretirement Benefits Other Than Pensions—The Company provides postretirement health care and life insurance benefits to eligible employees under a variety of plans. There is some variation in the provisions of these plans, including different provisions for lifetime maximums, prescription drug coverage and certain other benefits. In 2015,Effective January 1, 2016, the Company notified certain employees that it will no longer offeroffers retiree medical coverage to employees who retire after January 1, 2016 as well as revised benefits for a certain group of plan participants that was effective January 1, 2016. These plan changes decreased the Company’s other postretirement benefit obligation by $4 million. This unrecognized gain will be recognized as amortization of prior service credits over 10 years, which represents the average remaining life expectancy of plan participants.
Obligations and Funded Status—As discussed in Note 1, the Company recognizes the overfunded or underfunded status of its defined benefit pension and other postretirement plans as an asset or liability in its Consolidated Balance Sheets and recognizes changes in that funded status in the year in which changes occur through comprehensive income (loss).


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Summarized information for the Company’s defined benefit pension plans and other postretirement plans is provided below (in thousands):
Pension Plans Other Postretirement PlansPension Plans Other Postretirement Plans
December 31, 2017 December 31, 2016 December 31, 2017 December 31, 2016December 31, 2018 December 31, 2017 December 31, 2018 December 31, 2017
Change in benefit obligations:              
Projected benefit obligations, beginning of year$1,990,263
 $1,986,971
 $8,875
 $10,055
$2,056,876
 $1,990,263
 $7,674
 $8,875
Service cost768
 692
 —
 —
934
 768
 —
 —
Interest cost78,195
 82,724
 264
 320
71,138
 78,195
 230
 264
Plan amendments601
 1,025
 —
 —
224
 601
 —
 —
Impact of Medicare Reform Act—
 —
 42
 60
—
 —
 25
 42
Actuarial loss (gain)94,092
 22,615
 (593) (496)
Actuarial (gain) loss(135,146) 94,092
 (498) (593)
Benefits paid(107,043) (103,764) (914) (1,064)(108,630) (107,043) (666) (914)
Projected benefit obligations, end of year2,056,876
 1,990,263
 7,674
 8,875
1,885,396
 2,056,876
 6,765
 7,674
Change in plans’ assets:              
Fair value of plans’ assets, beginning of year1,545,862
 1,530,898
 —
 —
1,660,001
 1,545,862
 —
 —
Actual return on plans’ assets221,182
 118,728
 —
 —
(101,797) 221,182
 —
 —
Employer contributions—
 —
 914
 1,064
55,500
 —
 666
 914
Benefits paid(107,043) (103,764) (914) (1,064)(108,630) (107,043) (666) (914)
Fair value of plans’ assets, end of year1,660,001
 1,545,862
 —
 —
1,505,074
 1,660,001
 —
 —
Under funded status of the plans$(396,875) $(444,401) $(7,674) $(8,875)$(380,322) $(396,875) $(6,765) $(7,674)


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Amounts recognized in the Company’s Consolidated Balance Sheets consisted of (in thousands):
Pension Plans Other Postretirement PlansPension Plans Other Postretirement Plans
December 31, 2017 December 31, 2016 December 31, 2017 December 31, 2016December 31, 2018 December 31, 2017 December 31, 2018 December 31, 2017
Employee compensation and benefits (1)$—
 $—
 $(1,157) $(1,324)$—
 $—
 $(1,198) $(1,157)
Pension obligations, net (2)(396,875) (444,401) —
 —
(380,322) (396,875) —
 —
Postretirement medical, life and other benefits (2)—
 —
 (6,517) (7,551)—
 —
 (5,567) (6,517)
Net amount recognized$(396,875) $(444,401) $(7,674) $(8,875)$(380,322) $(396,875) $(6,765) $(7,674)
 
(1)Included in current liabilities within the Company’s Consolidated Balance Sheets.
(2)Included in non-current liabilities within the Company’s Consolidated Balance Sheets.
The accumulated benefit obligation, which excludes the impact of future compensation increases, for all defined benefit pension plans was $2.057$1.885 billion and $1.990$2.057 billion at December 31, 20172018 and December 31, 2016,2017, respectively.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The components of net periodic benefit (credit) costcredit for Company-sponsored plans were as follows (in thousands):
Pension Plans Other Postretirement PlansPension Plans Other Postretirement Plans
2017 2016 2015 2017 2016 20152018 2017 2016 2018 2017 2016
Service cost$768
 $692
 $709
 $—
 $—
 $81
$934
 $768
 $692
 $—
 $—
 $—
Interest cost78,195
 82,724
 81,815
 264
 320
 451
71,138
 78,195
 82,724
 230
 264
 320
Expected return on plans’ assets(101,126) (107,616) (111,690) —
 —
 —
(99,283) (101,126) (107,616) —
 —
 —
Recognized actuarial loss—
 —
 —
 —
 —
 25
17
 —
 —
 —
 —
 —
Amortization of prior service costs (credits)116
 90
 —
 (380) (380) (81)140
 116
 90
 (381) (380) (380)
Net periodic benefit (credit) cost$(22,047) $(24,110) $(29,166) $(116) $(60) $476
Net periodic benefit credit$(27,054) $(22,047) $(24,110) $(151) $(116) $(60)
Amounts included in the accumulated other comprehensive lossAOCI component of shareholders’ equity for Company-sponsored plans were as follows (in thousands):
Pension Plans Other Postretirement Plans TotalPension Plans Other Postretirement Plans Total
December 31, 2017 December 31, 2016 December 31, 2017 December 31, 2016 December 31, 2017 December 31, 2016December 31, 2018 December 31, 2017 December 31, 2018 December 31, 2017 December 31, 2018 December 31, 2017
Unrecognized net actuarial (losses) gains, net of tax$(46,897) $(66,212) $176
 $(185) $(46,721) $(66,397)$(109,677) $(46,897) $577
 $176
 $(109,100) $(46,721)
Unrecognized prior service (cost) credit, net of tax(942) (568) 1,851
 2,082
 909
 1,514
(1,117) (942) 1,979
 1,851
 862
 909
Total$(47,839) $(66,780) $2,027
 $1,897
 $(45,812) $(64,883)$(110,794) $(47,839) $2,556
 $2,027
 $(108,238) $(45,812)
In accordance with ASC Topic 715, unrecognized net actuarial gains and losses will be recognized in net periodic pension expense over approximately 24 years, which represents the estimated average remaining life expectancy of the inactive participants receiving benefits, due to plans being frozen and participants are deemed inactive for purposes of determining remaining useful life. The Company’s policy is to incorporate asset-related gains and losses into the asset value used to calculate the expected return on plan assets and into the calculation of amortization of unrecognized net actuarial loss over a four-year period.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Assumptions—Weighted average assumptions used each year in accounting for pension benefits and other postretirement benefits were as follows:
Pension
Plans		 Other Postretirement PlansPension
Plans		 Other Postretirement Plans
2017 2016 2017 20162018 2017 2018 2017
Discount rate for expense4.05% 4.30% 3.30% 3.45%3.55% 4.05% 3.10% 3.30%
Discount rate for obligations3.55% 4.05% 3.10% 3.30%4.20% 3.55% 3.75% 3.10%
Long-term rate of return on plans’ assets for expense6.60% 7.00% —
 —
6.40% 6.60% —
 —
The Company utilizes the Aon Hewitt AA-Only Bond Universe Yield Curve (the “Aon Hewitt Yield Curve”) for discounting future benefit obligations and calculating interest cost. The Aon Hewitt Yield Curve represents the yield on high quality (AA and above) corporate bonds that closely match the cash flows of the estimated payouts for the Company’s benefit obligations.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company used a multi-pronged approach to determine its 6.60%6.40% assumption for the long-term expected rate of return on pension plan assets. This approach included a review of actual historical returns achieved and anticipated long-term performance of each asset class. See the “Plan Assets” section below for further information.

For purposes of measuring postretirement health care costs for 2017,2018, the Company assumed a 7.0% annual rate of increase in the per capita cost of covered health care benefits. The rate was assumed to decrease gradually to 5.0% for 20242025 and remain at that level thereafter. For purposes of measuring postretirement health care obligations at December 31, 2017,2018, the Company assumed a 7.0%6.7% annual rate of increase in the per capita cost of covered health care benefits. The rate was assumed to decrease gradually to 5.0% for 2025 and remain at that level thereafter.
Assumed health care cost trend rates have a significant effect on the amounts reported for health care plans. As of December 31, 2017,2018, a 1% change in assumed health care cost trend rates would have the following effects (in thousands):
1% Increase 1% Decrease1% Increase 1% Decrease
Service cost and interest cost$7
 $(6)$7
 $(7)
Projected benefit obligation$217
 $(199)$189
 $(174)
Plan Assets—The Company’s investment strategy with respect to the Company’s pension plan assets is to invest in a variety of investments for long-term growth in order to satisfy the benefit obligations of the Company’s pension plans. Accordingly, when making investment decisions, the Company endeavors to strategically allocate assets within asset classes in order to enhance long-term real investment returns and reduce volatility.
The actual allocations for the pension assets at December 31, 20172018 and December 31, 20162017 and target allocations by asset class were as follows:
Percentage of Plan AssetsPercentage of Plan Assets
Actual Allocations Target AllocationsActual Allocations Target Allocations
Asset category:2017 2016 2017 20162018 2017 2018 2017
Equity securities52.7% 53.4% 50.0% 50.0%47.8% 52.7% 50.0% 50.0%
Fixed income securities40.7% 39.6% 45.0% 45.0%44.2% 40.7% 45.0% 45.0%
Cash and other short-term investments0.7% 1.0% —
 —
1.1% 0.7% —
 —
Other alternative investments5.9% 6.0% 5.0% 5.0%6.9% 5.9% 5.0% 5.0%
Total100.0% 100.0% 100.0% 100.0%100.0% 100.0% 100.0% 100.0%


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Actual allocations to each asset class varied from target allocations due to market value fluctuations, timing, and overall market volatility during the year. The asset allocation is monitored on a quarterly basis and rebalanced as necessary.
Equity securities are invested broadly in U.S. and non-U.S. companies and are diversified across countries, currencies, market capitalizations and investment styles. These securities use the S&P 500 (U.S. large cap), Russell 2000 (U.S. small cap) and MSCI All Country World Index ex-U.S. (non-U.S.) as their benchmarks.
Fixed income securities are invested in diversified portfolios that invest across the maturity spectrum and include primarily investment-grade securities with a minimum average quality rating of A and insurance annuity contracts. These securities use the Barclays Capital Aggregate (intermediate term bonds) and Barclays Capital Long Government/Credit (long bonds) U.S. Bond Indexes as their benchmarks.
Alternative investments include investments in private real estate assets, private equity funds and venture capital funds. The private equity and venture capital investments use the median internal rate of return for the given strategy and vintage year in the Thomson One/Cambridge database as their benchmarks. The real estate assets use the National Council of Real Estate Investment Fiduciaries Property Index as their benchmark.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following tables set forth, by asset category, the Company’s pension plan assets as of December 31, 20172018 and December 31, 2016,2017, using the fair value hierarchy established under ASC Topic 820 and described in Note 10.8. The fair value hierarchy in the tables exclude certain investments which are valued using NAV as a practical expedient (in thousands):
Pension Plan Assets as of December 31, 2017Pension Plan Assets as of December 31, 2018
Level 1 Level 2 Level 3 TotalLevel 1 Level 2 Level 3 Total
Pension plan assets measured at fair value:              
Registered investment companies$704,141
 $—
 $—
 $704,141
$523,262
 $—
 $—
 $523,262
Common/collective trusts—
 12,607
 —
 12,607
—
 17,219
 —
 17,219
Fixed income:              
U.S. government securities—
 250,792
 —
 250,792
—
 214,902
 —
 214,902
Corporate bonds—
 294,362
 —
 294,362
—
 314,768
 —
 314,768
Mortgage-backed and asset-backed securities—
 31,188
 —
 31,188
—
 20,841
 —
 20,841
Other (1)—
 (35,330) —
 (35,330)—
 (15,247) —
 (15,247)
Pooled separate account—
 16,809
 —
 16,809
—
 15,759
 —
 15,759
Total pension plan assets measured at fair value$704,141
 $570,428
 $—
 1,274,569
$523,262
 $568,242
 $—
 1,091,504
              
Pension plan assets measured at NAV as a practical expedient (2)      360,382
      387,922
Pension plan assets measured at contract value:              
Insurance contracts      25,050
      25,648
Total pension plan assets      $1,660,001
      $1,505,074
 
(1)Other includes pending net security purchases of $89$58 million.
(2)Certain common/collective trusts, the 103-12 investment entity, the international equity limited liability company, real estate, private equity and venture capital limited partnerships that are measured at fair value using the NAV per share practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in the table above are intended to permit reconciliation of the fair value hierarchy to the total value of plan assets.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Pension Plan Assets as of December 31, 2016Pension Plan Assets as of December 31, 2017
Level 1 Level 2 Level 3 TotalLevel 1 Level 2 Level 3 Total
Pension plan assets measured at fair value:              
Registered investment companies$575,884
 $—
 $—
 $575,884
$704,141
 $—
 $—
 $704,141
Common/collective trusts—
 16,060
 —
 16,060
—
 12,607
 —
 12,607
Fixed income:              
U.S. government securities—
 200,782
 —
 200,782
—
 250,792
 —
 250,792
Corporate bonds—
 264,451
 —
 264,451
—
 294,362
 —
 294,362
Mortgage-backed and asset-backed securities—
 30,961
 —
 30,961
—
 31,188
 —
 31,188
Other (1)—
 (9,155) —
 (9,155)—
 (35,330) —
 (35,330)
Pooled separate account—
 17,403
 —
 17,403
—
 16,809
 —
 16,809
Total pension plan assets measured at fair value$575,884
 $520,502
 $—
 1,096,386
$704,141
 $570,428
 $—
 1,274,569
       
Pension plan assets measured at NAV as a practical expedient (2)      424,875
      360,382
Pension plan assets measured at contract value:              
Insurance contracts      24,601
      25,050
Total pension plan assets      $1,545,862
      $1,660,001
 
(1)Other includes pending net security purchases of $58$89 million.
(2)Certain common/collective trusts, the 103-12 investment entity, the international equity limited partnership,company, real estate, private equity and venture capital limited partnerships that are measured at fair value using the NAV per share practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in the table above are intended to permit reconciliation of the fair value hierarchy to the total value of plan assets.
Registered investment companies are valued at exchange listed prices for exchange traded registered investment companies, which are classified in Level 1 of the fair value hierarchy.
Common/collective trusts are valued on the basis of the relative interest of each participating investor in the fair value of the underlying assets of each of the respective common/collective trusts. Common/collective trusts contain underlying assets valued based on pricing from observable market information in a non-active market and are classified in Level 2 of the fair value hierarchy.
U.S. government securities consist of investments in treasury securities, investment grade municipal securities and unrated or non-investment grade municipal securities and are classified in Level 2 of the fair value hierarchy. U.S. government bonds not traded on an active market are valued at a price which is based on a compilation of primarily observable market information or a broker quote in a non-active market, and are classified in Level 2 of the fair value hierarchy. Corporate bonds, mortgage-backed securities and asset-backed securities are valued using evaluated prices that reflect observable market information, such as actual trade information of similar securities, adjusted for observable differences and are categorized in Level 2 of the fair value hierarchy.
The pooled separate account represents an insurance contract under which plan assets are administered through pooled funds. The pooled separate account portfolio may include investments in money market instruments, common stocks and government and corporate bonds and notes. The underlying assets are valued based on the net asset value as provided by the investment account manager and therefore the pooled separate account is classified in Level 2 of the fair value hierarchy.
Cash Flows—In 2017,2018, the Company made no contributions of $56 million to its qualified pension plans and $1 million to its other postretirement plans. The Company expects to contribute $36$3 million to its qualified pension plans and $1 million to its other postretirement plans in 2018.2019.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Expected Future Benefit Payments—Benefit payments expected to be paid under the Company’s qualified pension plans and other postretirement benefit plans are summarized below. The benefit payments reflect expected future service, as appropriate (in thousands):
Qualified Pension Plan
Benefits		 Other
Postretirement
Benefits		Qualified Pension Plan
Benefits		 Other
Postretirement
Benefits
2018$116,955
 $1,157
2019$119,454
 $1,041
$120,807
 $1,095
2020$121,577
 $929
$123,701
 $973
2021$123,705
 $835
$127,592
 $872
2022$125,289
 $745
$129,007
 $777
2023-2027$628,065
 $2,570
2023$128,297
 $689
2024-2028$625,472
 $2,299
Defined Contribution Plans—The Company maintains various qualified 401(k) savings plans, which permit eligible employees to make voluntary contributions on a pretax basis. The plans allow participants to invest their savings in various investments. The Company’s current qualified 401(k) savings plans provide for a matching contribution paid by the Company of 100% on the first 2% of eligible pay contributed by eligible employees and 50% on the next 4% of eligible pay contributed. The Tribune Company 401(k) Savings Plan and Tribune Media Company 401(k) Plan also provide for an annual discretionary profit sharing contribution tied to the Company achieving certain financial targets. The Company made contributions of $13 million, $14 million $16 million and $14$16 million, to certain of its defined contribution plans in 2018, 2017 2016 and 2015,2016, respectively. The Company recorded compensation expense related to its defined contribution plans from continuing operations of $13 million in each of 2018, 2017 2016 and 2015.2016. These expenses are included in SG&A in the Company’s Consolidated Statements of Operations.
NOTE 15:13: CAPITAL STOCK
Common Stock and Warrants—As of the Effective Date, the Company issued 78,754,269 shares of Class A Common Stock and 4,455,767 shares of Class B Common Stock. As described in Note 3, certainCertain creditors that were entitled to receive Common Stock, either voluntarily elected to receive Class B Common Stock in lieu of Class A Common Stock or were allocated Class B Common Stock in lieu of Class A Common Stock in order to comply with the FCC’s ownership rules and requirements. The Class A Common Stock and Class B Common Stock generally provide identical economic rights, but holders of Class B Common Stock have limited voting rights, including that such holders have no right to vote in the election of directors. Subject to the ownership limitations described below, each share of Class A Common Stock is convertible into one share of Class B Common Stock and each share of Class B Common Stock is convertible into one share of Class A Common Stock, in each case, at the option of the holder at any time. During the yearsyear ended December 31, 2017 and December 31, 2015 on a net basis, 48 and 2,432,478 shares respectively, of Class B Common Stock were converted into 48 and 2,432,478 shares respectively, of Class A Common Stock. There were no conversions during the yearyears ended December 31, 2018 and December 31, 2016.
In addition, on the Effective Date, the Company entered into the Warrant Agreement, pursuant to which the Company issued 16,789,972 Warrants to purchase Common Stock. The Company issued the Warrants in lieu of Common Stock to creditors that were otherwise eligible to receive Common Stock in connection with the implementation of the Plan in order to comply with the FCC’s foreign ownership restrictions. Each Warrant entitles the holder to purchase from the Company, at the option of the holder and subject to certain restrictions set forth in the Warrant Agreement and described below, one share of Class A Common Stock or one share of Class B Common Stock at an exercise price of $0.001 per share, subject to adjustment and a cashless exercise feature. The Warrants may be exercised at any time on or prior to December 31, 2032. No Warrants were exercised for Class A Common Stock or Class B Common Stock during the year ended December 31, 2018. During the years ended December 31, 2017 and December 31, 2016, 97,681 and December 31, 2015, 97,681, 163,077 and 1,718,652 Warrants, respectively, were exercised for 97,681 163,077 and 1,718,645163,077 shares, respectively, of Class A Common Stock. In addition, 10,147 shares 16,898 shares and 9,53616,898 shares of Class A Common Stock were issued in the form of unrestricted stock awards to


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Stock were issued in the form of unrestricted stock awards to certain members of the Board as compensation for retainer fees in 2017 2016 and 2015,2016, respectively (see Note 1614 for further information). At December 31, 2017,2018, the following amounts were issued: 30,551 Warrants, 101,429,999101,790,837 shares of Class A Common Stock, of which 14,102,185 were held in treasury, and 5,557 shares of Class B Common Stock.Stock and 30,551 Warrants.
The Company is authorized to issue up to one billion shares of Class A Common Stock, up to one billion shares of Class B Common Stock and up to 40 million shares of preferred stock, each par value $0.001 per share, in one or more series. The Company has not issued any shares of preferred stock. The Company’s Class A Common Stock is currently traded on the New York Stock Exchange under the symbol “TRCO.” The Company’s Class B Common Stock and Warrants are currently traded over-the-counter under the symbols “TRBAB” and “TRBNW,” respectively.
Pursuant to the Company’s amended and restated certificate of incorporation and the Warrant Agreement, in the event the Company determines that the ownership or proposed ownership of Common Stock or Warrants, as applicable, would be inconsistent with or violate any federal communications laws, materially limit or impair any business activities or proposed business activities of the Company under any federal communications laws, or subject the Company to any regulation under any federal communications laws to which the Company would not be subject, but for such ownership or proposed ownership, the Company may, among other things: (i) require a holder of Common Stock or Warrants to promptly furnish information reasonably requested by the Company, including information with respect to citizenship, ownership structure, and other ownership interests and affiliations; (ii) refuse to permit a proposed transfer or conversion of Common Stock, or condition transfer or conversion on the prior consent of the FCC; (iii) refuse to permit a proposed exercise of Warrants, or condition exercise on the prior consent of the FCC; (iv) suspend the rights of ownership of the holders of Common Stock or Warrants; (v) require the conversion of any or all shares of Common Stock held by a stockholder into shares of any other class of capital stock of the Company with equivalent economic value, including the conversion of shares of Class A Common Stock into shares of Class B Common Stock or the conversion of shares of Class B Common Stock into shares of Class A Common Stock; (vi) require the exchange of any or all shares of Common Stock held by any stockholder of the Company for warrants to acquire the same number and class of shares of capital stock in the Company; (vii) to the extent the foregoing are not reasonably feasible, redeem any or all such shares of Common Stock; or (viii) exercise any and all appropriate remedies, at law or in equity, in any court of competent jurisdiction to prevent or cure any such situation.
On the Effective Date, the Company entered into a registration rights agreement (the “Registration Rights Agreement”) with certain entities related to AG (the “AG Group”), Oaktree Tribune, L.P., an affiliate of Oaktree (the “Oaktree Group”), and Isolieren Holding Corp., an affiliate of JPMorgan (the “JPM Group,” and each of the Registration Rights Agreement with the StockholderJPM Group, AG Group, and Oaktree Group, a “Stockholder Group”) and certain other holders of Registrable Securitiessecurities who becomebecame a party thereto. “Registrable Securities” consist of Common Stock, securities convertible into or exchangeable for Common Stock and options, Warrants or other rights to acquire Common Stock. Registrable Securities will cease to be Registrable Securities, among other circumstances, upon their sale under a registration statement or pursuant to Rule 144 under the Securities Act. The Registration Rights Agreement gives a Stockholder Group demand registration, shelf registration and piggyback registration rights. At any time, any Stockholder Group holding at least 5% of the outstanding Class A Common Stock (on a fully diluted basis) (a “Demand Holder”) has certain rights to demand the registration of Registrable Securities on an underwritten or non-underwritten basis, provided that certain conditions are met, including that the aggregate proceeds expected to be received is greater than the lesser of (i) $100 million and (ii) 2.5% of the market capitalization of the Company. Each Stockholder Group is permitted a limited number of demand registrations on Form S-1 (Oaktree Group – five and the AG Group and JPMorgan Group – each three) and an unlimited number of demand registrations on Form S-3. The Company is not required to file a demand registration statement within 90 days after the effective date of a previous registration statement (other than on Form S-8 or S-4). At any time that the Company is eligible for registration on Form S-3, any Demand Holder may demand the Company file a shelf registration statement covering Registrable Securities. The Stockholder Groups are also afforded unlimited registration rights (piggyback rights) on any registration statement (other than registrations on Form S-8 or S-4 or for rights offerings) filed by the Company with respect to securities of the same class or series covered by such registration statement. The Company has certain rights to


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

suspend its obligations with respect to registrations under certain conditions or upon the happening of certain events (such as pending material corporate developments) for specified periods of time as set forth in the Registration Rights Agreement. The Registration Rights Agreement also


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

includes other customary terms and conditions, including customary lock-up or “holdback” provisions binding the stockholders and the Company and indemnity and contribution obligations of the Company and the stockholders participating in a registration. The registration rights are only transferable to, subject to certain conditions, (i) an affiliate of a Stockholder Group or (ii) a transferee of a Stockholder Group if at least 5% of the Class A Common Stock (on a fully diluted basis) is being transferred to such transferee (and such transferee may not subsequently transfer its registration rights to any other person or entity, other than to a Stockholder Group). The Registration Rights Agreement terminates on December 31, 2022.
Shelf Registration Statement—On November 29, 2017, following the exercise of one of the demand registration rights by the Oaktree Group under the Registration Rights Agreement, the Company filed a registration statement on Form S-3 under which the Oaktree Group may resell, from time to time, up to 14,145,447 shares of the Company’s Class A Common Stock. On November 29, 2017, the Company filed a preliminary prospectus supplement providing for the sale of 7,000,000 shares of Class A Common Stock, which was completed on December 4, 2017. The Company did not receive any of the proceeds from the shares of Class A Common Stock sold by the Oaktree Group.

Secondary Public Offering—Following the exercise of one of the demand registration rights by the stockholders under the Registration Rights Agreement, the Company filed a registration statement on Form S-1 and on April 22, 2015 it was declared effective by the SEC for a secondary offering of Class A Common Stock. On April 28, 2015, the selling stockholders completed the sale of 9,240,073 shares of Class A Common Stock at a price of $56.00 per share. The Company did not receive any of the proceeds from the shares of Class A Common Stock sold by the selling stockholders.

Common Stock Repurchases—On February 24, 2016, the Board authorized a new stock repurchase program, under which the Company may repurchase up to $400 million of its outstanding Class A Common Stock. Under the stock repurchase program, the Company may repurchase shares in open-market purchases in accordance with all applicable securities laws and regulations, including Rule 10b-18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The extent to which the Company repurchases its shares, and the timing of such repurchases, will depend upon a variety of factors, including market conditions, regulatory requirements and other corporate considerations. During 2016, the Company repurchased 6,432,455 shares for $232 million at an average price of $36.08 per share. The Company did not repurchase any shares of Common Stock during 2017.2017 or 2018 due to restrictions contained in the now terminated Sinclair Merger Agreement and the Nexstar Merger Agreement. As of December 31, 2017,2018, the remaining authorized amount under the current authorization totaled approximately $168 million. The Nexstar Merger Agreement does not permit the Company to repurchase shares of its Common Stock except in narrow circumstances involving payment in satisfaction of options and conversion of Class B Common Stock into Class A Common Stock. See Note 1 for additional information about the Nexstar Merger Agreement.
On October 13, 2014, the Board authorized a stock repurchase program, under which the Company could repurchase up to $400 million of its outstanding Class A Common Stock in open-market purchases in accordance with all applicable securities laws and regulations, including Rule 10b-18 of the Exchange Act. During 2014, the Company repurchased 1,101,160 shares in open market transactions for $68 million at an average price of $61.58 per share which included 125,566 shares, valued at $8 million, for which the Company placed trades prior to December 28, 2014 that were not settled until the first three business days of the first quarter of 2015. During fiscal 2015, the Company repurchased 6,569,056 shares of Class A Common Stock in open market transactions for $332 million at an average price of $50.59 per share. As of December 31, 2015, the Company repurchased the full $400 million of outstanding Class A Common Stock, totaling 7,670,216 shares, authorized under the repurchase program.
Special Cash Dividends—On January 2, 2017, the Board authorized and declared a special cash dividend of $5.77 per share of Common Stock (the “2017 Special Cash Dividend”), which was paid on February 3, 2017 to holders of record of Common Stock and Warrants at the close of business on January 13, 2017. In addition, pursuant to the terms of the Warrant Agreement, the Company made a cash payment of $5.77 per Warrant on February 3,


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2017 to holders of record of Warrants at the close of business on January 13, 2017. The total aggregate payment on February 3, 2017 totaled $499 million, including payment to holders of Warrants.
On March 5, 2015, the Board authorized and declared a special cash dividend of $6.73 per share of Common Stock (the “2015 Special Cash Dividend”), which was paid on April 9, 2015 to holders of record of Common Stock at the close of business on March 25, 2015. In addition, pursuant to the terms of the Warrant Agreement, the Company made a cash payment of $6.73 per Warrant on April 9, 2015 to holders of record of Warrants at the close of business on March 25, 2015. The total aggregate payment on April 9, 2015 totaled $649 million, including the payment to holders of Warrants.
Quarterly Cash Dividends—The Board declared quarterly cash dividends per share on Common Stock to holders of record of Common Stock and Warrants as follows (in thousands, except per share data):
2017 20162018 2017
Per Share 
Total
Amount
 Per Share 
Total
Amount
Per Share 
Total
Amount
 Per Share 
Total
Amount
First quarter$0.25
 $21,742
 $0.25
 $23,215
$0.25
 $21,922
 $0.25
 $21,742
Second quarter0.25
 21,816
 0.25
 22,959
0.25
 21,925
 0.25
 21,816
Third quarter0.25
 21,834
 0.25
 22,510
0.25
 21,929
 0.25
 21,834
Fourth quarter0.25
 21,837
 0.25
 21,612
0.25
 21,933
 0.25
 21,837
Total quarterly cash dividends declared and paid$1.00
 $87,229
 $1.00
 $90,296
$1.00
 $87,709
 $1.00
 $87,229


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

On February 21, 2018,2019, the Board declared a quarterly cash dividend of $0.25 per share to be paid on March 26, 201825, 2019 to holders of record of Common Stock and Warrants as of March 12, 2018.11, 2019. Future dividends will be subject to the discretion of the Board and the terms of the Nexstar Merger Agreement, which limits the Company’s ability to pay dividends, except for the payment of quarterly cash dividends not to exceed $0.25 per share and consistent with record and payment dates in 2016.2018.
The payment of the cash dividends also results in the issuance of Dividend Equivalent Units (“DEUs”) to holders of RSUs and PSUs each, as defined and described in Note 16.14. The DEUs will be reinvested in RSUs and PSUs and settled concurrently with the vesting of associated RSUs and PSUs. Pursuant to the Company’s policy, the forfeitable DEUs and dividends payable in cash are treated as a reduction of retained earnings or, if the Company is in a retained deficit position, as a reduction of additional paid-in capital.
NOTE 16:14: STOCK-BASED COMPENSATION
On May 5, 2016, the 2016 Incentive Compensation Plan (the “Incentive Compensation Plan”) and the Stock Compensation Plan for Non-Employee Directors (the “Directors Plan” and, together with the Incentive Compensation Plan, “2016 Equity Plans”) were approved by the Company’s shareholders for the purpose of granting stock awards to officers, employees and Board members of the Company and its subsidiaries. 2016 Equity Plans superseded the Company’s 2013 Equity Incentive Plan, which was in effect since March 1, 2013. There are 5,100,000 shares of Class A Common Stock authorized for issuance under the Incentive Compensation Plan and 200,000 shares of Class A Common Stock authorized for issuance under the Directors Plan, of which 3,032,6722,583,767 shares and 168,529167,913 shares, respectively, were available for grant as of December 31, 2017.
On March 1, 2013, the Compensation Committee of the Board adopted the 2013 Equity Incentive Plan (the “Equity Incentive Plan”) for the purpose of granting stock awards to directors, officers and employees of the Company and its subsidiaries. Stock awarded pursuant to the Equity Incentive Plan was limited to five percent of the outstanding Common Stock on a fully diluted basis as of the Effective Date. There were 5,263,000 shares of Common Stock authorized for issuance under the Equity Incentive Plan. Prior to the adoption of the 2016 Equity Plan, the Company had 616,332 shares of Class A Common Stock available for grant under the Equity Incentive


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Plan. Subsequent to the approval of the 2016 Equity Plans by the Company’s shareholders, no additional awards will be granted under the Equity Incentive Plan.2018.
The Incentive Compensation Plan provides for the granting of non-qualified stock options (“NSOs”), incentive stock options (“ISOs”), stock appreciation (“SARs”), restricted stock units (“RSUs”), performance share units (“PSUs”), restricted stock awards and other stock-based awards (collectively “Equity Awards”). The Directors Plan provides for the granting of shares, stock options and other stock-based awards (collectively “Director Equity Awards”). Pursuant to ASC Topic 718, “Compensation-Stock Compensation,” the Company measures stock-based compensation costs on the grant date based on the estimated fair value of the award and recognizes compensation costs on a straight-line basis over the requisite service period for the entire award. The Company’s equity plans allow employees and directors to surrender to the Company shares of vested Common Stock upon vesting of their stock awards or at the time they exercise their NSOs in lieu of their payment of the required withholdings for employee taxes. The Company made a policy election to account for forfeitures of equity awards as they occur.
Holders of RSUs and PSUs also receive DEUs until the RSUs or PSUs vest. See Note 1513 for further information. The number of DEUs granted for each RSU or PSU is calculated based on the value of the dividends per share paid on the Company’s Common Stock and the closing price of the Company’s Common Stock on the dividend payment date. The DEUs vest with the underlying RSU or PSU.
NSO and RSU awards generally vest 25% on each anniversary of the date of the grant. Under the 2016 Equity Plans, the exercise price of an NSO award cannot be less than the market price of the Class A Common Stock at the time the NSO award is granted and has a maximum contractual term of 10 years.
PSU awards generally cliff vest atsubsequent to the endcompletion of the three-year performance periods,period, depending on the period specified in each respective PSU agreement. The number of PSUs that ultimately vest depends on the Company’s performance relative to specified financial targets for fiscal years 2017, 2018, 2019 and 2019.2020. In the second quarter of 2016, the Company also granted 214,416 supplemental PSU awards (“Supplemental PSUs”) to certain executive officers. A portionofficers, of thewhich 77,968 Supplemental PSUs will be eligible to vest until March 1, 2018 if avested in 2017 as the closing stock price of the Company’s Class A Common Stock is maintained for 10 consecutive trading days that equals or exceeds $44met certain targets, and each increment $2 thereafter, up136,448 unvested Supplemental PSUs expired on March 1, 2018 pursuant to a maximum of $64, as adjusted for dividends declared (each such increment, a “Stock Price Hurdle”). No Stock Price Hurdle will be counted twice, and nonethe terms of the Supplemental PSUs will vest unless the minimum $44 Stock Price Hurdle (as adjusted) is achieved by March 1, 2018. As of December 31, 2017, there were 136,448 Supplemental PSUs outstanding.agreements.
Unrestricted stock awards have been issued to certain members of the Board as compensation for retainer fees and long-term awards.fees. The Company intends to facilitate settlement of all vested awards in Common Stock.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company estimates the fair value of NSO awards using the Black-Scholes option-pricing model, which incorporates various assumptions including the expected term of the awards, volatility of the stock price, risk-free rates of return and dividend yield. The risk-free rate was based on the U.S. Treasury yield curve in effect at the time of grant. Expected volatility was based on the actual historical volatility of a select peer group of entities operating in similar industry sectors as the Company. The expected dividend yield was based on the Company’s expectation of future dividend payments at the time of grant. Expected life was calculated using the simplified method as described under Staff Accounting Bulletin Topic 14, “Share-Based Payment,” as the Equity Incentive Plan was not in existence for a sufficient period of time for the use of the Company-specific historical experience in the calculation.
In connection with the special cash dividendsdividend and pursuant to the terms of the Company’s equity plans, the number of the Company’s employees’ outstanding equity awards, and the exercise price of the NSOs, were adjusted to preserve the fair value of the awards immediately before and after the special cash dividends.dividend. The Company’s Class A Common Stock began trading ex-dividend (the “Ex-dividend Date”) on January 11, 2017 and March 23, 2015 for the 2017 Special Cash Dividend and the 2015 Special Cash Dividend, respectively.Dividend. The conversion ratio (the “Ratio”) used to adjust the awards was based on the ratio of (a) unaffected closing price of Class A Common Stock on the day before the Ex-dividend Date to (b) the opening price of Class A Common Stock on the Ex-dividend Date. As the above adjustments were made pursuant to existing anti-dilution provisions of the Company equity


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

plans, the Company did not record any incremental compensation expense related to the conversion of the Equity Awards. The Equity Awards continue to vest over the original vesting period, as described above. The combined impact of this award activity is collectively referred to as the “Adjustments.” The Adjustments increased outstanding Equity Awards by 720,405 shares and 251,537 shares for the 2017 Special Cash Dividend, and the 2015 Special Cash Dividend, respectively, which are separately included in the tables below. For NSOs granted prior to each respective Ex-dividend Date, the weighted-average exercise prices reflect the historical values without giving effect to the special cash dividends. For RSUs and PSUs granted prior to each respective Ex-dividend Date, the weighted-average fair values in the tables below reflect historical values without giving effect to the special cash dividends.
The awards held as of the Ex-dividend Date were modified as follows:
Non-Qualified Stock Options - The number of NSOs outstanding as of the Ex-dividend Date was increased via the calculated Ratio and the strike price of NSOs was decreased via the Ratio in order to preserve the fair value of NSOs;
Restricted Stock Units - The number of outstanding RSUs as of the Ex-dividend Date was increased utilizing the calculated Ratio in order to preserve the fair value of RSUs; and
Performance Share Units - The number of outstanding PSUs as of the Ex-dividend Date was increased utilizing the calculated Ratio in order to preserve the fair value of PSUs.
The following table provides the weighted-average assumptions used to determine the fair value of NSO awards granted during 2018, 2017 2016 and 2015:2016:
2017 2016 20152018 2017 2016
Risk-free interest rate2.17% 1.35% 1.71%2.66% 2.17% 1.35%
Expected dividend yield3.12% 3.36% 0.17%2.33% 3.12% 3.36%
Expected stock price volatility33.12% 36.54% 44.47%30.70% 33.12% 36.54%
Expected life (in years)6.25
 6.25
 6.25
6.25
 6.25
 6.25
The Company determines the fair value of PSU, RSU and unrestricted and restricted stock awards by reference to the quoted market price of the Class A Common Stock on the date of the grant. The Company determined the fair value of Supplemental PSUs using a Monte Carlo simulation model.
Stock-based compensation expense for the years ended December 31, 2018, December 31, 2017 and December 31, 2016 and December 31, 2015 totaled $23 million, $33 million, $37 million, and $32$37 million respectively, including the expense attributable to discontinued operations of $2 million and $4 million for the years ended December 31, 2017 and $2 million,December 31, 2016, respectively.



TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

A summary of activity, weighted average exercise prices and weighted average fair values related to the NSOs is as follows (shares in thousands):
Shares Weighted Avg. Exercise Price 
Weighted Avg.
Fair Value
 
Weighted Avg. Remaining Contractual Term
(in years)
 
Aggregate
Intrinsic Value
(In thousands)
Shares Weighted Avg. Exercise Price 
Weighted Avg.
Fair Value
 
Weighted Avg. Remaining Contractual Term
(in years)
 
Aggregate
Intrinsic Value
(In thousands)
Outstanding, December 28, 2014 (1)975
 $70.90
 $37.15
 9.0 $1,164
Granted449
 57.91
 25.81
  
Exercised(3) 49.40
 23.86
  
Cancelled(31) 64.01
 33.63
  
Forfeited(160) 60.20
 29.88
  
Adjustment due to the 2015 Special Cash Dividend145
 *
 *
    
Outstanding, December 31, 2015 (1)1,375
 $60.62
 $30.47
 8.3 $—
Outstanding, December 31, 20151,375
 $60.62
 $30.47
 8.3 $—
Granted1,363
 30.43
 7.46
  1,363
 30.43
 7.46
  
Cancelled(67) 60.45
 30.55
  (67) 60.45
 30.55
  
Forfeited(275) 39.89
 15.04
  (275) 39.89
 15.04
  
Outstanding, December 31, 2016 (1)2,396
 $45.82
 $19.15
 8.2 $6,163
Outstanding, December 31, 20162,396
 $45.82
 $19.15
 8.2 $6,163
Granted932
 32.12
 7.97
  932
 32.12
 7.97
  
Exercised(400) 28.31
 8.54
  (400) 28.31
 8.54
  
Cancelled(87) 48.48
 23.91
  (87) 48.48
 23.91
  
Forfeited(447) 29.24
 8.31
  (447) 29.24
 8.31
  
Adjustment due to the 2017 Special Cash Dividend453
 *
 *
  453
 *
 *
  
Outstanding, December 31, 2017 (1)2,847
 39.00
 15.49
 6.6 21,897
2,847
 $39.00
 $15.49
 6.6 $21,897
Vested and exercisable,
December 31, 2017 (1)
1,187
 $48.48
 $23.96
 4.0 $3,235
Granted202
 42.85
 11.33
  
Exercised(65) 28.62
 7.92
  
Cancelled(504) 54.57
 28.53
  
Forfeited(49) 30.04
 8.05
  
Outstanding, December 31, 2018 (1)2,431
 36.54
 12.79
 7.1 $25,908
Vested and exercisable,
December 31, 2018 (1)
1,270
 $40.43
 $16.60
 6.3 $10,682
 
*Not meaningful
(1)The weighted average exercise price and weighted-average fair value of options outstanding as of the end of each reporting period reflect the adjustments to the awards as a result of the respective special cash dividend.



TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

A summary of activity and weighted average fair values related to the RSUs is as follows (shares in thousands):
Shares 
Weighted Avg.
 Fair Value
 
Weighted Avg.
Remaining Contractual Term
(in years)
Shares 
Weighted Avg.
 Fair Value
 
Weighted Avg.
Remaining Contractual Term
(in years)
Outstanding and nonvested, December 28, 2014633
 $68.76
 2.7
Granted457
 57.18
 
Dividend equivalent units granted16
 41.71
 
Vested(203) 66.65
 
Forfeited(151) 58.80
 
Dividend equivalent units forfeited(1) 44.26
 
Adjustments due to the 2015 Special Cash Dividend89
 *
 
Outstanding and nonvested, December 31, 2015 (1)840
 $58.39
 2.3
Outstanding and nonvested, December 31, 2015840
 $58.39
 2.3
Granted824
 29.97
 824
 29.97
 
Dividend equivalent units granted34
 37.20
 34
 37.20
 
Vested(307) 58.44
 (307) 58.44
 
Dividend equivalent units vested(6) 41.32
 (6) 41.32
 
Forfeited(151) 42.25
 (151) 42.25
 
Dividend equivalent units forfeited(3) 39.01
 (3) 39.01
 
Outstanding and nonvested, December 31, 2016 (1)(2)1,231
 $40.92
 1.3
Outstanding and nonvested, December 31, 2016 (1)1,231
 $40.92
 1.3
Granted625
 32.77
 625
 32.77
 
Dividend equivalent units granted31
 39.21
 31
 39.21
 
Vested(575) 38.21
 (575) 38.21
 
Dividend equivalent units vested(20) 32.45
 (20) 32.45
 
Forfeited(399) 32.35
 (399) 32.35
 
Dividend equivalent units forfeited(12) 33.14
 (12) 33.14
 
Adjustment due to the 2017 Special Cash Dividend224
 *
 
Outstanding and nonvested, December 31, 2017 (1)1,105
 $32.62
 1.3
Adjustments due to the 2017 Special Cash Dividend224
 *
 
Outstanding and nonvested, December 31, 2017 (2)1,105
 $32.62
 1.3
Granted451
 41.76
 
Dividend equivalent units granted29
 39.26
 
Vested(375) 34.99
 
Dividend equivalent units vested(18) 36.12
 
Forfeited(66) 34.72
 
Dividend equivalent units forfeited(2) 37.31
 
Outstanding and nonvested, December 31, 2018 (2)1,124
 $35.46
 1.2
 
*Not meaningful
(1)The weighted average fair value of outstanding RSUs as of the end of each reporting period reflects the adjustment for the respective special cash dividend.
(2)Included 22,309 RSUs which were granted to foreign employees and which the Company expected to settle in cash. The fair value of these RSUs was not material.



TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(2)The weighted average fair value of outstanding RSUs as of the end of each reporting period reflects the adjustment for the special cash dividend.
A summary of activity and weighted average fair values related to the restricted and unrestricted stock awards is as follows (shares in thousands):
Shares 
Weighted Avg.
 Fair Value
 
Weighted Avg.
Remaining Contractual Term
(in years)
Shares 
Weighted Avg.
 Fair Value
 Weighted Avg. Remaining Contractual Term (in years)
Outstanding and nonvested, December 28, 201417
 $56.80
 1.0
Granted12
 60.07
 
Vested(27) 58.24
 
Forfeited(2) 56.80
 
Outstanding and nonvested, December 31, 2015—
 $—
 0.0
Granted17
 33.73
 17
 $33.73
 
Vested(17) 33.73
 (17) 33.73
 
Outstanding and nonvested, December 31, 2016—
 $—
 0.0—
 $—
 0.0
Granted52
 36.48
 52
 36.48
 
Vested(10) 34.98
 (10) 34.98
 
Outstanding and nonvested, December 31, 201742
 $36.84
 3.042
 $36.84
 3.0
Vested(14) 36.84
 
Outstanding and nonvested, December 31, 201828
 $36.84
 2.0


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


A summary of activity and weighted average fair values related to the PSUs is as follows (shares in thousands):
Shares 
Weighted Avg.
 Fair Value
 
Weighted Avg.
Remaining Contractual Term
(in years)
Shares 
Weighted Avg.
 Fair Value
 Weighted Avg. Remaining Contractual Term (in years)
Outstanding and nonvested, December 28, 201443
 74.35
 1.3
Granted66
 68.10
 
Dividend equivalent units granted3
 41.86
 
Forfeited(17) 64.89
 
Adjustment due to the 2015 Special Cash Dividend12
 *
 
Outstanding and nonvested, December 31, 2015 (1)(2)107
 $65.50
 0.6
Outstanding and nonvested, December 31, 2015 (1)107
 $65.50
 0.6
Granted295
 21.26
 295
 21.26
 
Dividend equivalent units granted10
 37.50
 10
 37.50
 
Vested(56) 65.06
 (56) 65.06
 
Dividend equivalent units vested(1) 41.64
 (1) 41.64
 
Forfeited(8) 49.85
 (8) 49.85
 
Outstanding and nonvested, December 31, 2016 (1)(2)347
 $27.23
 1.1
Outstanding and nonvested, December 31, 2016 (1)347
 $27.23
 1.1
Granted118
 31.45
 118
 31.45
 
Dividend equivalent units granted5
 39.26
 5
 39.26
 
Vested(184) 31.22
 (184) 31.22
 
Dividend equivalent units vested(4) 32.50
 (4) 32.50
 
Forfeited(47) 33.73
 (47) 33.73
 
Dividend equivalent units forfeited(6) 40.72
 (6) 40.72
 
Adjustment due to the 2017 Special Cash Dividend24
 *
 24
 *
 
Outstanding and nonvested, December 31, 2017 (1)(2)253
 $22.53
 1.4253
 $22.53
 1.4
Granted84
 41.64
 
Dividend equivalent units granted5
 39.29
 
Vested(37) 38.67
 
Dividend equivalent units vested(3) 35.20
 
Forfeited(140) 13.25
 
Outstanding and nonvested, December 31, 2018 (1)(2)162
 $37.30
 1.4
 
* Not meaningful
(1) Represents shares of PSUs for which performance targets have been established and which are deemed granted under U.S. GAAP.
(2) The weighted average fair value of outstanding PSUs reflect the adjustment for the respective special cash dividend.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

*Not meaningful
(1)Represents shares of PSUs for which performance targets have been established and which are deemed granted under U.S. GAAP.
(2)The weighted average fair value of outstanding PSUs reflect the adjustment for the respective special cash dividend.
As of December 31, 2017,2018, the Company had not yet recognized compensation cost on nonvested awards as follows (in thousands):
 Unrecognized Compensation Cost 
Weighted Average Remaining Recognition Period
(in years)
Nonvested awards$34,262
 2.3
 Unrecognized Compensation Cost 
Weighted Average Remaining Recognition Period
(in years)
Nonvested awards$33,931
 2.1


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 17:15: EARNINGS PER SHARE
The Company computes earnings (loss) per common share (“EPS”) from continuing operations, discontinued operations and net earnings per common share under the two-class method which requires the allocation of all distributed and undistributed earnings attributable to Tribune Media Company to common stock and other participating securities based on their respective rights to receive distributions of earnings or losses. The Company’s Class A Common Stock and Class B Common Stock equally share in distributed and undistributed earnings. In a period when the Company’s distributed earnings exceed undistributed earnings, no allocation to participating securities or dilutive securities is performed. The Company accounts for the Warrants as participating securities, as holders of the Warrants, in accordance with and subject to the terms and conditions of the Warrant Agreement, are entitled to receive ratable distributions of the Company’s earnings concurrently with such distributions made to the holders of Common Stock, subject to certain restrictions relating to FCC rules and requirements. Under the terms of the Company’s RSU and PSU agreements, unvested RSUs and PSUs contain forfeitable rights to dividends and DEUs. Because the DEUs are forfeitable, they are defined as non-participating securities. As of December 31, 2017,2018, there were 53,66863,156 DEUs outstanding, which will vest at the time that the underlying RSU or PSU vests.
The Company computes basic EPS by dividing income (loss) from continuing operations, income (loss) income from discontinued operations, and net (loss) income attributable to Tribune Media Company, respectively, applicable to common shares by the weighted average number of common shares outstanding during the period. In accordance with the two-class method, undistributed earnings applicable to the Warrants are excluded from the computation of basic EPS. Diluted EPS is computed by dividing income (loss) from continuing operations, income (loss) income from discontinued operations, and net income (loss),attributable to Tribune Media Company, respectively, by the weighted average number of common shares outstanding during the period as adjusted for the assumed exercise of all outstanding stock awards. The calculation of diluted EPS assumes that stock awards outstanding were exercised at the beginning of the period. The stock awards are included in the calculation of diluted EPS only when their inclusion in the calculation is dilutive.
ASC Topic 260, “Earnings per Share,” states that the presentation of basic and diluted EPS is required only for common stock and not for participating securities. For the years ended December 31, 2018, December 31, 2017 and December 31, 2016, 30,551, 71,385 and December 31, 2015, 71,385, 180,259, and 877,233, respectively, of the weighted-average Warrants outstanding have been excluded from the below table.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The calculation of basic and diluted EPS is presented below (in thousands, except for per share data):
2017 2016 20152018 2017 2016
EPS numerator:          
Net income (loss) from continuing operations$183,077
 $87,040
 $(315,337)
Net income from continuing operations attributable to noncontrolling interests(3,378) —
 —
Net income (loss) from continuing operations attributable to Tribune Media Company179,699
 87,040
 (315,337)
Income from continuing operations$412,530
 $183,077
 $87,040
Net loss (income) from continuing operations attributable to noncontrolling interests41
 (3,378) —
Net income from continuing operations attributable to Tribune Media Company412,571
 179,699
 87,040
Less: Dividends distributed to Warrants69
 161
 325
31
 69
 161
Less: Undistributed earnings allocated to Warrants81
 —
 —
113
 81
 —
Income (loss) from continuing operations attributable to Tribune Media Company’s common shareholders for basic EPS$179,549
 $86,879
 $(315,662)
Income from continuing operations attributable to Tribune Media Company’s common shareholders for basic EPS$412,427
 $179,549
 $86,879
Add: Undistributed earnings allocated to dilutive securities1
 —
 —
1
 1
 —
Income (loss) from continuing operations attributable to Tribune Media Company’s common shareholders for diluted EPS$179,550
 $86,879
 $(315,662)
Income from continuing operations attributable to Tribune Media Company’s common shareholders for diluted EPS$412,428
 $179,550
 $86,879
          
Income (loss) from discontinued operations, as reported$14,420
 $(72,794) $(4,581)$—
 $14,420
 $(72,794)
Less: Undistributed earnings allocated to Warrants7
 —
 —
—
 7
 —
Income (loss) from discontinued operations attributable to common shareholders for basic and diluted EPS$14,413
 $(72,794) $(4,581)$—
 $14,413
 $(72,794)
          
Net income (loss) attributable to Tribune Media Company’s common shareholders for basic EPS$193,962
 $14,085
 $(320,243)
Net income attributable to Tribune Media Company’s common shareholders for basic EPS$412,427
 $193,962
 $14,085

          
Net income (loss) attributable to Tribune Media Company’s common shareholders for diluted EPS$193,963
 $14,085
 $(320,243)
Net income attributable to Tribune Media Company’s common shareholders for diluted EPS$412,428
 $193,963
 $14,085
          
EPS denominator:          
Weighted average shares outstanding - basic87,066
 90,244
 94,686
87,604
 87,066
 90,244
Impact of dilutive securities935
 392
 —
797
 935
 392
Weighted average shares outstanding - diluted88,001
 90,636
 94,686
88,401
 88,001
 90,636
          
Basic Earnings (Loss) Per Common Share Attributable to Tribune Media Company from:          
Continuing Operations$2.06
 $0.96
 $(3.33)$4.71
 $2.06
 $0.96
Discontinued Operations0.17
 (0.80) (0.05)—
 0.17
 (0.80)
Net Earnings (Loss) Per Common Share$2.23

$0.16
 $(3.38)
     
Net Earnings Per Common Share$4.71

$2.23
 $0.16
Diluted Earnings (Loss) Per Common Share Attributable to Tribune Media Company from:          
Continuing Operations$2.04
 $0.96
 $(3.33)$4.67
 $2.04
 $0.96
Discontinued Operations0.16
 (0.80) (0.05)—
 0.16
 (0.80)
Net Earnings (Loss) Per Common Share$2.20
 $0.16
 $(3.38)
Net Earnings Per Common Share$4.67
 $2.20
 $0.16



TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Since the Company was in a net loss position for the year ended December 31, 2015, there was no difference between the number of shares used to calculate basic and diluted loss per share. Because of their anti-dilutive effect, 1,058,174, 2,126,516 1,778,194 and 2,002,4761,178,194 common share equivalents, comprised of NSOs, PSUs and RSUs, have been excluded from the diluted EPS calculation for the years ended December 31, 2018, December 31, 2017 and December 31, 2016, and December 31, 2015, respectively.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 18:16: ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME
The Company’s AOCI is a separate component of shareholders’ equity in the Company’s Consolidated Balance sheets. The following table summarizes the changes in AOCI, net of taxes by component (in thousands):
Pension and other Post-Retirement Benefit Items Marketable Securities Cash Flow Hedging Instruments Foreign Currency Translation Adjustments (1) TotalPension and other Post-Retirement Benefit Items Marketable Securities Cash Flow Hedging Instruments Foreign Currency Translation Adjustments (1) Total
Balance at December 31, 2015$(57,391) $2,139
 $—
 $(15,764) (71,016)
Other comprehensive (loss) income before reclassifications(7,316) 936
 —
 (4,210) (10,590)
Amounts reclassified from AOCI(176) —
 —
 —
 (176)
Balance at December 31, 2016(64,883) 3,075
 —
 (19,974) (81,782)$(64,883) $3,075
 $—
 $(19,974) (81,782)
Other comprehensive income (loss) before reclassifications19,231
 (95) (3,591) 5,253
 20,798
19,231
 (95) (3,591) 5,253
 20,798
Amounts reclassified from AOCI(160) (2,980) 3,298
 12,765
 12,923
(160) (2,980) 3,298
 12,765
 12,923
Balance at December 31, 2017$(45,812) $—
 $(293) $(1,956) $(48,061)(45,812) —
 (293) (1,956) (48,061)
Other comprehensive income (loss) before reclassifications(48,752) —
 4,397
 (633) (44,988)
Amounts reclassified from AOCI(165) —
 1,074
 1,504
 2,413
Cumulative effect of change in accounting principle (2)(13,509) —
 (614) (208) (14,331)
Balance at December 31, 2018$(108,238) $—
 $4,564
 $(1,293) $(104,967)
 
(1)In 2017, amounts reclassified from AOCI included $9 million of cumulative translation adjustments as a result of the Gracenote Sale, which are included in income (loss) from discontinued operations, net of taxes, and $4 million of cumulative translation adjustments as a result of the CareerBuilder impairment, which are included in write-downs of investments, in the Company’s Consolidated Statements of Operations. In 2018, amounts reclassified from AOCI included $2 million of cumulative translation adjustments as a result of the Company’s sale of its remaining ownership interest in CareerBuilder. See Note 86 for the discussion of the Company’s equity-method investments.
(2)See Note 1 for additional information on the adoption of ASU 2018-02.
NOTE 19: RELATED PARTY TRANSACTIONS
The Company’s company-sponsored pension plan assets included an investment in a loan fund limited partnership managed by Oaktree Capital Management, L.P. (“Oaktree”), which is affiliated with Oaktree Tribune, L.P., a principal shareholder of Tribune Media Company as of December 31, 2016. As further described in Note 15, in 2017, Oaktree sold 7,000,000 shares of the Company’s Class A Common Stock, which resulted in Oaktree no longer qualifying as a principal shareholder of the Company as of December 31, 2017.
In April 2016, the Company requested a full withdrawal of its investment from the fund managed by Oaktree which had a fair value of $30 million at December 31, 2015. The withdrawal was completed and proceeds were received in June 2016.
The Secured Credit Facility syndicate of lenders includes funds affiliated with Oaktree. These funds held $28 million of the Company’s Term C Loans at December 31, 2017 and $31 million of the Company’s Former Term B Loans at December 31, 2016.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 20:17: BUSINESS SEGMENTS
The Company’s business consists of Television and Entertainment operations and the management of certain owned real estate assets. The Company also holds a variety of investments, including an equity investmentsinvestment in TV Food Network and CareerBuilder.Network. The Company’s Digital and Data operations, which had previously been presented as a separate reportable segment, are reported in discontinued operations (see Note 2 for further information).
Television and Entertainment is a reportable segment which provides audiences across the country with news, entertainment and sports programming on Tribune Broadcasting local television stations and their websites, WGN America, Covers and other digital assets. The Company’s 42 local television stations (including the three stations to which the Company provides certain services under SSAs with Dreamcatcher) consist of 14 FOX television affiliates, 12 CW Network, LLC television affiliates, 6 CBS television affiliates, 3 ABC television affiliates, 3 MY television affiliates, 2 NBC television affiliates and 2 independent television stations. Additionally, the Television and Entertainment segment includes the digital multicast network services through Antenna TV and through the operation and distribution of THIS TV; WGN America, a national general entertainment cable network; Covers, a sports betting information website; and radio program services on WGN-AM, a Chicago radio station.
Corporate and Other includes the Company’s real estate operating segment responsible for the management of certain owned real estate assets, including revenues from leasing Company-owned office and production facilities


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

and any gains or losses from the sales of owned real estate, as well as certain administrative activities associated with operating the Company’s corporate office functions and managing the Company’s predominantly frozen company-sponsored defined benefit pension plans.functions. Corporate and Other is not a reportable segment but is included below for reconciliation purposes.
No single customer provides more than 10% of the Company’s consolidated revenues. In determining operating profit for each segment, none of the following items have been included: income and loss on equity investments, interest and dividend income, interest expense, pension and other postretirement period benefit cost (credit), non-operating items, reorganization costs or income taxes. Assets represent those tangible and intangible assets used in the operations of each segment.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table summarizes business segment financial data for the fiscal years ended December 31, 2017, December 31, 2016 and December 31, 2015 (in thousands):
2017 2016 20152018 2017 2016
Operating Revenues from Continuing Operations (1)          
Television and Entertainment$1,835,423
 $1,909,896
 $1,752,542
$1,998,678
 $1,835,423
 $1,909,896
Corporate and Other13,536
 38,034
 49,425
11,056
 13,536
 38,034
Total operating revenues$1,848,959
 $1,947,930
 $1,801,967
$2,009,734
 $1,848,959
 $1,947,930
Operating Profit (Loss) from Continuing Operations (1)          
Television and Entertainment$196,100
 $324,837
 $(175,140)$583,271
 $196,100
 $324,837
Corporate and Other(87,632) 108,737
 (94,195)(94,831) (110,447) 83,935
Total operating profit (loss)$108,468
 $433,574
 $(269,335)$488,440
 $85,653
 $408,772
Depreciation from Continuing Operations (2)          
Television and Entertainment$42,713
 $45,083
 $48,437
$44,766
 $42,713
 $45,083
Corporate and Other13,601
 13,742
 16,117
9,440
 13,601
 13,742
Total depreciation$56,314
 $58,825
 $64,554
$54,206
 $56,314
 $58,825
Amortization from Continuing Operations (2)          
Television and Entertainment$166,679
 $166,664
 $166,404
$166,715
 $166,679
 $166,664
Total amortization$166,679
 $166,664
 $166,404
$166,715
 $166,679
 $166,664
Capital Expenditures          
Television and Entertainment$48,667
 $59,167
 $33,173
$59,693
 $48,667
 $59,167
Corporate and Other16,587
 16,944
 32,285
16,495
 16,587
 16,944
Discontinued Operations1,578
 23,548
 23,626
—
 1,578
 23,548
Total capital expenditures$66,832
 $99,659
 $89,084
$76,188
 $66,832
 $99,659
Assets          
Television and Entertainment$7,197,859
 $7,484,591
  $6,976,808
 $7,197,859
  
Corporate and Other (3)932,569
 1,228,526
  1,274,583
 932,569
  
Assets held for sale (4)38,900
 17,176
  —
 38,900
  
Discontinued Operations (4)—
 670,758
  
Total assets$8,169,328
 $9,401,051
 

$8,251,391
 $8,169,328
 

 
(1)See Note 2 for the disclosures of operating revenues and operating (loss) profitloss included in discontinued operations for the historical periods.
(2)Depreciation from discontinued operations totaled $14 million and $10 million for the yearsyear ended December 31, 2016 and December 31, 2015.2016. Amortization from discontinued operations totaled $30 million and $29 million for the yearsyear ended December 31, 2016 and December 31, 2015.2016.
(3)As of December 31, 20172018 and December 31, 2016,2017, Corporate total assets included $17 million and $18 million related to restricted cash and cash equivalents held to satisfy remaining claim obligations to holders of priority claims and fees earned by professional advisors during Chapter 11 proceedings (see Note 3)10). Corporate and Other assets include certain real estate assets (see Note 2) as well as the Company’s equity investment in CareerBuilder.4).
(4)See Note 2 for information regarding discontinued operations and Note 64 for information regarding assets held for sale.



TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 21:18: QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
(in thousands, except per share data)
 2017
 Quarters Total
 First Second Third Fourth 
Operating Revenues         
Television and Entertainment$436,033
 $466,061
 $447,307
 $486,022
 $1,835,423
Other3,877
 3,456
 3,226
 2,977
 13,536
Total operating revenues$439,910
 $469,517
 $450,533
 $488,999
 $1,848,959
Operating (Loss) Profit         
Television and Entertainment$20,013
 $50,219
 $(1,357) $127,225
 $196,100
Corporate and Other(35,245) (31,893) (22,392) 1,898
 (87,632)
Total operating (loss) profit(15,232) 18,326
 (23,749) 129,123
 108,468
Income on equity investments, net37,037
 40,761
 21,058
 38,506
 137,362
Interest and dividend income505
 548
 827
 1,269
 3,149
Interest expense(38,758) (40,185) (40,389) (40,055) (159,387)
Loss on extinguishments and modification of debt (1)(19,052) —
 (1,435) —
 (20,487)
Gain (loss) on investment transactions, net (1)4,950
 —
 5,667
 (2,486) 8,131
Write-downs of investments (1)(122,000) (58,800) —
 (12,694) (193,494)
Other non-operating (loss) gain, net (1)(26) 71
 —
 26
 71
Reorganization items, net (2)(250) (449) (753) (657) (2,109)
(Loss) Income from Continuing Operations Before Income Taxes(152,826) (39,728) (38,774) 113,032
 (118,296)
Income tax benefit(51,614) (9,905) (20,087) (219,767) (301,373)
(Loss) Income from Continuing Operations(101,212) (29,823) (18,687) 332,799
 183,077
Income (Loss) from Discontinued Operations, net of taxes15,618
 (579) —
 (619) 14,420
Net (Loss) Income$(85,594) $(30,402) $(18,687) $332,180
 $197,497
Net income from continuing operations attributable to noncontrolling interests—
 —
 —
 (3,378) (3,378)
Net (Loss) Income attributable to Tribune Media Company(85,594) (30,402) (18,687) 328,802
 194,119
          
Basic (Loss) Earnings Per Common Share Attributable to Tribune Media Company from:         
Continuing Operations$(1.17) $(0.34) $(0.21) $3.77
 $2.06
Discontinued Operations0.18
 (0.01) —
 (0.01) 0.17
Net (Loss) Earnings Per Common Share$(0.99) $(0.35) $(0.21) $3.76
 $2.23
Diluted (Loss) Earnings Per Common Share Attributable to Tribune Media Company from:         
Continuing Operations$(1.17) $(0.34) $(0.21) $3.73
 $2.04
Discontinued Operations0.18
 (0.01) —
 (0.01) 0.16
Net (Loss) Earnings Per Common Share$(0.99) $(0.35) $(0.21) $3.72
 $2.20
 2018
 Quarters Total
 First Second Third Fourth 
Operating Revenues         
Television and Entertainment$440,702
 $486,417
 $494,619
 $576,940
 $1,998,678
Other2,933
 2,941
 3,389
 1,793
 11,056
Total operating revenues$443,635
 $489,358
 $498,008
 $578,733
 $2,009,734
Operating Profit (Loss)         
Television and Entertainment$211,852
 $119,767
 $67,295
 $184,357
 $583,271
Corporate and Other(24,567) (21,701) (30,171) (18,392) (94,831)
Total operating profit187,285
 98,066
 37,124
 165,965
 488,440
Income on equity investments, net39,137
 52,568
 32,381
 45,249
 169,335
Interest income1,898
 2,336
 3,239
 4,751
 12,224
Interest expense(40,631) (41,990) (42,842) (43,570) (169,033)
Pension and other postretirement benefit credit, net7,084
 6,985
 7,035
 7,035
 28,139
Gain (loss) on investment transactions, net (1)3,888
 —
 (5,001) —
 (1,113)
Other non-operating gain (loss), net (1)117
 (26) (38) 15
 68
Reorganization items, net (2)(893) (685) (244) (578) (2,400)
Income from Continuing Operations Before Income Taxes197,885
 117,254
 31,654
 178,867
 525,660
Income tax expense (benefit)56,702
 32,816
 (22,422) 46,034
 113,130
Income from Continuing Operations141,183
 84,438
 54,076
 132,833
 412,530
Income (Loss) from Discontinued Operations, net of taxes—
 —
 —
 —
 —
Net Income$141,183
 $84,438
 $54,076
 $132,833
 $412,530
Net loss from continuing operations attributable to noncontrolling interests6
 4
 23
 8
 41
Net Income attributable to Tribune Media Company$141,189
 $84,442
 $54,099
 $132,841
 $412,571
          
Basic Earnings Per Common Share Attributable to Tribune Media Company from:         
Continuing Operations$1.61
 $0.96
 $0.62
 $1.51
 $4.71
Discontinued Operations—
 —
 —
 —
 —
Net Earnings Per Common Share$1.61
 $0.96
 $0.62
 $1.51
 $4.71
Diluted Earnings Per Common Share Attributable to Tribune Media Company from:         
Continuing Operations$1.60
 $0.96
 $0.61
 $1.50
 $4.67
Discontinued Operations—
 —
 —
 —
 —
Net Earnings Per Common Share$1.60
 $0.96
 $0.61
 $1.50
 $4.67


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

20162017
Quarters TotalQuarters Total
First Second Third Fourth First Second Third Fourth 
Operating Revenues                  
Television and Entertainment$455,875
 $468,134
 $460,164
 $525,723
 $1,909,896
$436,033
 $466,061
 $447,307
 $486,022
 $1,835,423
Other12,597
 11,662
 9,874
 3,901
 38,034
3,877
 3,456
 3,226
 2,977
 13,536
Total operating revenues$468,472
 $479,796
 $470,038
 $529,624
 $1,947,930
$439,910
 $469,517
 $450,533
 $488,999
 $1,848,959
Operating Profit (Loss)         
Operating (Loss) Profit         
Television and Entertainment$58,605
 $83,346
 $46,024
 $136,862
 $324,837
$20,013
 $50,219
 $(1,357) $127,225
 $196,100
Corporate and Other(28,613) (27,140) 188,146
 (23,656) 108,737
(40,980) (37,566) (28,095) (3,806) (110,447)
Total operating profit29,992
 56,206
 234,170
 113,206
 433,574
Total operating (loss) profit(20,967) 12,653
 (29,452) 123,419
 85,653
Income on equity investments, net38,252
 44,306
 31,737
 33,861
 148,156
37,037
 40,761
 21,058
 38,506
 137,362
Interest and dividend income132
 228
 476
 390
 1,226
505
 548
 827
 1,269
 3,149
Interest expense(38,141) (38,071) (38,296) (38,211) (152,719)(38,758) (40,185) (40,389) (40,055) (159,387)
Pension and other postretirement benefit credit, net5,735
 5,673
 5,703
 5,704
 22,815
Loss on extinguishments and modification of debt (1)(19,052) —
 (1,435) —
 (20,487)
Gain (loss) on investment transactions, net (1)4,950
 —
 5,667
 (2,486) 8,131
Write-downs of investments (1)(122,000) (58,800) —
 (12,694) (193,494)
Other non-operating gain (loss), net (1)496
 (75) 57
 4,949
 5,427
(26) 71
 —
 26
 71
Reorganization items, net (2)(434) (366) (434) (188) (1,422)(250) (449) (753) (657) (2,109)
Income from Continuing Operations Before Income Taxes30,297
 62,228
 227,710
 114,007
 434,242
Income tax expense15,195
 214,856
 73,871
 43,280
 347,202
Income (Loss) from Continuing Operations15,102
 (152,628) 153,839
 70,727
 87,040
Loss from Discontinued Operations, net of taxes(4,009) (8,935) (8,074) (51,776) (72,794)
Net Income (Loss)$11,093
 $(161,563) $145,765
 $18,951
 $14,246
(Loss) Income from Continuing Operations Before Income Taxes(152,826) (39,728) (38,774) 113,032
 (118,296)
Income tax benefit(51,614) (9,905) (20,087) (219,767) (301,373)
(Loss) Income from Continuing Operations(101,212) (29,823) (18,687) 332,799
 183,077
Income (Loss) from Discontinued Operations, net of taxes15,618
 (579) —
 (619) 14,420
Net (Loss) Income$(85,594) $(30,402) $(18,687) $332,180
 $197,497
Net income from continuing operations attributable to noncontrolling interests—
 —
 —
 (3,378) (3,378)
Net (Loss) Income attributable to Tribune Media Company$(85,594) $(30,402) $(18,687) $328,802
 $194,119
                  
Basic Earnings (Loss) Per Common Share Attributable to Tribune Media Company from:         
Basic (Loss) Earnings Per Common Share Attributable to Tribune Media Company from:         
Continuing Operations$0.16
 $(1.66) $1.71
 $0.81
 $0.96
$(1.17) $(0.34) $(0.21) $3.77
 $2.06
Discontinued Operations(0.04) (0.10) (0.09) (0.59) (0.80)0.18
 (0.01) —
 (0.01) 0.17
Net Earnings (Loss) Per Common Share$0.12
 $(1.76) $1.62
 $0.22
 $0.16
Net (Loss) Earnings Per Common Share$(0.99) $(0.35) $(0.21) $3.76
 $2.23
                  
Diluted Earnings (Loss) Per Common Share Attributable to Tribune Media Company from:         
Diluted (Loss) Earnings Per Common Share Attributable to Tribune Media Company from:         
Continuing Operations$0.16
 $(1.66) $1.70
 $0.81
 $0.96
$(1.17) $(0.34) $(0.21) $3.73
 $2.04
Discontinued Operations(0.04) (0.10) (0.09) (0.59) (0.80)0.18
 (0.01) —
 (0.01) 0.16
Net Earnings (Loss) Per Common Share$0.12

$(1.76)
$1.61

$0.22

$0.16
Net (Loss) Earnings Per Common Share$(0.99)
$(0.35)
$(0.21)
$3.72

$2.20
 
(1)See Note 53 to the Company’s consolidated financial statements for information pertaining to non-operating items recorded in 20172018 and 2016.2017.
(2)See Note 310 to the Company’s consolidated financial statements for information pertaining to reorganization items recorded in 20172018 and 2016.2017.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 22:19: CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

The Company is the issuer of the Notes (see Note 9)7) and such debt is guaranteed by the Subsidiary Guarantors. The Subsidiary Guarantors are direct or indirect 100% owned domestic subsidiaries of the Company. The Company’s payment obligations under the Notes are jointly and severally guaranteed by the Subsidiary Guarantors, and all guarantees are full and unconditional. The subsidiaries of the Company that do not guarantee the Notes (the “Non-Guarantor Subsidiaries”) include certain direct or indirect subsidiaries of the Company.
The guarantees are subject to release under certain circumstances, including: (a) upon the sale, exchange, disposition or other transfer (including through merger, consolidation or dissolution) of the interests in such Subsidiary Guarantor, after which such Subsidiary Guarantor is no longer a restricted subsidiary of the Company, or all or substantially all the assets of such Subsidiary Guarantor, in any case, if such sale, exchange, disposition or other transfer is not prohibited by the Indenture, (b) upon the Company designating such Subsidiary Guarantor to be an unrestricted subsidiary in accordance with the Indenture, (c) in the case of any restricted subsidiary of the Company that after the issue date is required to guarantee the Notes, upon the release or discharge of the guarantee by such restricted subsidiary of any indebtedness of the Company or another Subsidiary Guarantor or the repayment of any indebtedness of the Company or another Subsidiary Guarantor, in each case, which resulted in the obligation to guarantee the Notes, (d) upon the Company’s exercise of its legal defeasance option or covenant defeasance option in accordance with the Indenture or if the Company’s obligations under the Indenture are discharged in accordance with the terms of the Indenture, (e) upon the release or discharge of direct obligations of such Subsidiary Guarantor, or the guarantee by such guarantor of the obligations, under the Senior Credit Agreement, or (f) during the period when the rating of the Notes is changed to investment grade.
In the fourth quarter of 2018, the Company released certain Subsidiary Guarantors from their guarantees of the Notes upon designating such Subsidiary Guarantors to be unrestricted subsidiaries in accordance with the Indenture. These subsidiaries became Non-Guarantor Subsidiaries and, as a result, the operations of these entities were retrospectively reclassified and are now reflected in the Non-Guarantor Subsidiaries column for all period presented. These reclassifications had no impact on the Company’s historical consolidated results of operations.
On January 31, 2017, the Company completed the Gracenote Sale, as further described in Note 2. The Gracenote Sale included certain Subsidiary Guarantors as well as Non-Guarantor Subsidiaries. The results of operations of these entities are included in their respective categories through the date of sale.
In lieu of providing separate audited financial statements for the Subsidiary Guarantors, the Company has included the accompanying condensed consolidating financial statements in accordance with the requirements of Rule 3-10(f) of SEC Regulation S-X. The following Condensed Consolidating Financial Statements present the Consolidated Balance Sheets, Consolidated Statements of Operations and Comprehensive Income (Loss) and Consolidated Statements of Cash Flows of Tribune Media Company, the Subsidiary Guarantors, the Non-Guarantor Subsidiaries and the eliminations necessary to arrive at the Company’s information on a consolidated basis.
These statements are presented in accordance with the disclosure requirements under SEC Regulation S-X, Rule 3-10.



TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
YEAR ENDED DECEMBER 31, 20172018
(In thousands of dollars)
Parent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company ConsolidatedParent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company Consolidated
Operating Revenues$—
 $1,838,997
 $9,962
 $—
 $1,848,959
$—
 $1,999,384
 $10,350
 $—
 $2,009,734
                  
Programming and direct operating expenses—
 989,385
 6,453
 —
 995,838
—
 887,617
 2,812
 —
 890,429
Selling, general and administrative106,297
 440,555
 3,341
 —
 550,193
111,976
 453,048
 2,774
 —
 567,798
Depreciation and amortization11,522
 198,949
 12,522
 —
 222,993
8,232
 200,930
 11,759
 —
 220,921
Gain on sales of spectrum—
 (133,197) —
 —
 (133,197)
Gain on sales of real estate, net—
 (365) (28,168) —
 (28,533)—
 (653) (24,004) —
 (24,657)
Total Operating Expenses117,819
 1,628,524
 (5,852) —
 1,740,491
120,208
 1,407,745
 (6,659) —
 1,521,294
                  
Operating (Loss) Profit(117,819) 210,473
 15,814
 —
 108,468
(120,208) 591,639
 17,009
 —
 488,440
                  
(Loss) income on equity investments, net(2,016) 139,378
 —
 —
 137,362
Interest and dividend income3,085
 64
 —
 —
 3,149
Income on equity investments, net—
 159,685
 9,650
 —
 169,335
Interest income12,222
 —
 2
 —
 12,224
Interest expense(158,984) —
 (403) —
 (159,387)(169,033) —
 —
 —
 (169,033)
Loss on extinguishments and modification of debt(20,436) —
 (51) —
 (20,487)
Gain on investment transactions, net4,807
 3,324
 —
 —
 8,131
Write-downs of investments(10,194) (183,300) —
 —
 (193,494)
Pension and other postretirement periodic benefit credit, net28,139
 —
 —
 —
 28,139
Loss on investment transactions, net—
 —
 (1,113) —
 (1,113)
Other non-operating items(1,557) (481) —
 —
 (2,038)(2,332) —
 —
 —
 (2,332)
Intercompany income (charges)110,254
 (110,018) (236) —
 —
87,747
 (87,319) (428) —
 —
(Loss) Income from Continuing Operations before Income Taxes and Earnings (Losses) from Consolidated Subsidiaries(192,860) 59,440
 15,124
 —
 (118,296)(163,465) 664,005
 25,120
 —
 525,660
Income tax benefit(28,578) (233,326) (39,469) —
 (301,373)
Income tax (benefit) expense(41,911) 152,010
 3,031
 —
 113,130
Equity (deficit) in earnings of consolidated subsidiaries, net of taxes343,981
 15,496
 —
 (359,477) —
534,125
 (882) —
 (533,243) —
Income (Loss) from Continuing Operations$179,699
 $308,262
 $54,593
 $(359,477) $183,077
$412,571
 $511,113
 $22,089
 $(533,243) $412,530
Income (Loss) from Discontinued Operations, net of taxes14,420
 (1,904) 807
 1,097
 14,420
—
 —
 —
 —
 —
Net Income (Loss)$194,119
 $306,358
 $55,400
 $(358,380) $197,497
$412,571
 $511,113
 $22,089
 $(533,243) $412,530
Net income from continuing operations attributable to noncontrolling interests—
 —
 (3,378) —
 (3,378)
Net loss from continuing operations attributable to noncontrolling interests—
 —
 41
 —
 41
Net Income (Loss) attributable to Tribune Media Company$194,119
 $306,358
 $52,022
 $(358,380) $194,119
$412,571
 $511,113
 $22,130
 $(533,243) $412,571
                  
Comprehensive Income (Loss)$227,840
 $312,382
 $65,136
 $(377,518) $227,840
$369,996
 $511,029
 $23,085
 $(534,114) $369,996


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
YEAR ENDED DECEMBER 31, 20162017
(In thousands of dollars)
Parent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company ConsolidatedParent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company Consolidated
Operating Revenues$—
 $1,938,116
 $9,814
 $—
 $1,947,930
$—
 $1,838,997
 $9,962
 $—
 $1,848,959
                  
Programming and direct operating expenses—
 902,843
 3,490
 —
 906,333
—
 989,385
 6,453
 —
 995,838
Selling, general and administrative97,022
 491,753
 3,445
 —
 592,220
129,112
 440,555
 3,341
 —
 573,008
Depreciation and amortization11,249
 201,504
 12,736
 —
 225,489
11,522
 198,949
 12,522
 —
 222,993
Impairment of other intangible assets—
 3,400
 —
 —
 3,400
Gain on sales of real estate, net—
 (213,086) —
 —
 (213,086)—
 (365) (28,168) —
 (28,533)
Total Operating Expenses108,271
 1,386,414
 19,671
 —
 1,514,356
140,634
 1,628,524
 (5,852) —
 1,763,306
                  
Operating (Loss) Profit(108,271) 551,702
 (9,857) —
 433,574
(140,634) 210,473
 15,814
 —
 85,653
                  
(Loss) income on equity investments, net(2,549) 150,705
 —
 —
 148,156
(2,016) 140,780
 (1,402) —
 137,362
Interest and dividend income1,149
 77
 —
 —
 1,226
3,085
 54
 10
 —
 3,149
Interest expense(151,893) —
 (826) —
 (152,719)(158,984) —
 (403) —
 (159,387)
Other non-operating items, net4,005
 —
 —
 —
 4,005
Pension and other postretirement periodic benefit credit, net22,815
 —
 —
 —
 22,815
Loss on extinguishments and modification of debt(20,436) —
 (51) —
 (20,487)
Gain on investment transactions, net4,807
 —
 3,324
 —
 8,131
Write-downs of investments(10,194) (2,500) (180,800) —
 (193,494)
Other non-operating items(1,557) (481) —
 —
 (2,038)
Intercompany income (charges)103,327
 (102,979) (348) —
 —
110,254
 (109,873) (381) —
 —
(Loss) Income from Continuing Operations before Income Taxes and Earnings (Losses) from Consolidated Subsidiaries(154,232) 599,505
 (11,031) —
 434,242
(192,860) 238,453
 (163,889) —
 (118,296)
Income tax expense13,610
 231,136
 102,456
 —
 347,202
(28,578) (169,048) (103,747) —
 (301,373)
Equity (deficit) in earnings of consolidated subsidiaries, net of taxes254,882
 (1,283) —
 (253,599) —
343,981
 15,496
 —
 (359,477) —
Income (Loss) from Continuing Operations$87,040
 $367,086
 $(113,487) $(253,599) $87,040
$179,699
 $422,997
 $(60,142) $(359,477) $183,077
(Loss) Income from Discontinued Operations, net of taxes(72,794) (62,777) 2,023
 60,754
 (72,794)
Income (Loss) from Discontinued Operations, net of taxes14,420
 (1,904) 807
 1,097
 14,420
Net Income (Loss)$14,246
 $304,309
 $(111,464) $(192,845) $14,246
$194,119
 $421,093
 $(59,335) $(358,380) $197,497
Net income from continuing operations attributable to noncontrolling interests—
 —
 (3,378) —
 (3,378)
Net Income (Loss) attributable to Tribune Media Company$194,119
 $421,093
 $(62,713) $(358,380) $194,119
                  
Comprehensive Income (Loss)$3,480
 $301,913
 $(113,279) $(188,634) $3,480
$227,840
 $422,840
 $(45,322) $(377,518) $227,840


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
YEAR ENDED DECEMBER 31, 20152016
(In thousands of dollars)
Parent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company ConsolidatedParent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company Consolidated
Operating Revenues$—
 $1,788,828
 $13,139
 $—
 $1,801,967
$—
 $1,938,116
 $9,814
 $—
 $1,947,930
                  
Programming and direct operating expenses—
 903,844
 8,338
 —
 912,182
—
 902,843
 3,490
 —
 906,333
Selling, general and administrative95,163
 446,370
 1,532
 —
 543,065
121,824
 495,153
 3,445
 —
 620,422
Depreciation and amortization7,465
 210,465
 13,028
 —
 230,958
11,249
 201,504
 12,736
 —
 225,489
Impairment of goodwill and other intangible assets—
 385,000
 —
 —
 385,000
Loss on sales of real estate, net—
 97
 —
 —
 97
Gain on sales of real estate, net—
 (213,086) —
 —
 (213,086)
Total Operating Expenses102,628
 1,945,776
 22,898
 —
 2,071,302
133,073
 1,386,414
 19,671
 —
 1,539,158
                  
Operating Loss(102,628) (156,948) (9,759) —
 (269,335)
Operating (Loss) Profit(133,073) 551,702
 (9,857) —
 408,772
                  
(Loss) income on equity investments, net(240) 147,199
 —
 —
 146,959
(2,549) 122,416
 28,289
 —
 148,156
Interest and dividend income510
 208
 2
 —
 720
1,149
 49
 28
 —
 1,226
Interest expense(147,616) (5) (966) —
 (148,587)(151,893) —
 (826) —
 (152,719)
Loss on extinguishment of debt(37,040) —
 —
 —
 (37,040)
Gain on investment transaction, net791
 8,132
 3,250
 —
 12,173
Pension and other postretirement periodic benefit credit, net24,802
 —
 —
 —
 24,802
Other non-operating items, net7,880
 (2,189) —
 —
 5,691
4,005
 —
 —
 —
 4,005
Intercompany income (charges)90,993
 (90,637) (356) —
 —
103,327
 (101,615) (1,712) —
 —
Loss from Continuing Operations before Income Taxes and Earnings (Losses) from Consolidated Subsidiaries(187,350) (94,240) (7,829) —
 (289,419)
Income tax (benefit) expense(72,742) 101,450
 (2,790) —
 25,918
(Deficit) equity in earnings of consolidated subsidiaries, net of taxes(200,729) (1,698) —
 202,427
 —
(Loss) Income from Continuing Operations(315,337) (197,388) (5,039) 202,427
 (315,337)
(Loss) Income from Continuing Operations before Income Taxes and Earnings (Losses) from Consolidated Subsidiaries(154,232) 572,552
 15,922
 —
 434,242
Income tax expense13,610
 220,572
 113,020
 —
 347,202
Equity (deficit) in earnings of consolidated subsidiaries, net of taxes254,882
 (1,283) —
 (253,599) —
Income (Loss) from Continuing Operations$87,040
 $350,697
 $(97,098) $(253,599) $87,040
(Loss) Income from Discontinued Operations, net of taxes(4,581) 420
 (3,796) 3,376
 (4,581)(72,794) (62,777) 2,023
 60,754
 (72,794)
Net (Loss) Income$(319,918) $(196,968) $(8,835) $205,803
 $(319,918)
Net Income (Loss)$14,246
 $287,920
 $(95,075) $(192,845) $14,246
                  
Comprehensive (Loss) Income$(344,393) $(201,018) $(19,003) $220,021
 $(344,393)
Comprehensive Income (Loss)$3,480
 $288,034
 $(99,400) $(188,634) $3,480


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEETS
AS OF DECEMBER 31, 2018
(In thousands of dollars)
 Parent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company Consolidated
Assets         
Current Assets         
Cash and cash equivalents$1,058,961
 $904
 $3,176
 $—
 $1,063,041
Restricted cash and cash equivalents16,607
 —
 —
 —
 16,607
Accounts receivable, net323
 415,836
 779
 —
 416,938
Broadcast rights—
 96,308
 1,961
 —
 98,269
Income taxes receivable—
 23,922
 —
 —
 23,922
Prepaid expenses6,992
 12,139
 313
 —
 19,444
Other6,201
 1,305
 3
 —
 7,509
Total current assets1,089,084
 550,414
 6,232
 —
 1,645,730
Properties         
Property, plant and equipment45,684
 612,282
 29,411
 —
 687,377
Accumulated depreciation(31,920) (232,469) (1,689) —
 (266,078)
Net properties13,764
 379,813
 27,722
 —
 421,299
          
Investments in subsidiaries10,899,707
 59,488
 —
 (10,959,195) —
          
Other Assets         
Broadcast rights—
 95,482
 394
 —
 95,876
Goodwill—
 3,220,300
 8,301
 —
 3,228,601
Other intangible assets, net—
 1,375,180
 67,276
 —
 1,442,456
Investments850
 1,233,522
 30,065
 —
 1,264,437
Intercompany receivables2,987,672
 6,571,444
 1,447,586
 (11,006,702) —
Other69,856
 141,117
 3,229
 (61,210) 152,992
Total other assets3,058,378
 12,637,045
 1,556,851
 (11,067,912) 6,184,362
Total Assets$15,060,933
 $13,626,760
 $1,590,805
 $(22,027,107) $8,251,391






TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEETS
AS OF DECEMBER 31, 2018
(In thousands of dollars)
 Parent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company Consolidated
Liabilities and Shareholders’ Equity (Deficit)         
Current Liabilities         
Accounts payable$23,051
 $20,357
 $1,489
 $—
 $44,897
Income taxes payable—
 9,973
 —
 —
 9,973
Contracts payable for broadcast rights—
 230,501
 2,186
 —
 232,687
Deferred revenue—
 11,639
 869
 —
 12,508
Interest payable30,086
 —
 —
 —
 30,086
Other44,702
 76,694
 246
 —
 121,642
Total current liabilities97,839
 349,164
 4,790
 —
 451,793
          
Non-Current Liabilities         
Long-term debt2,926,083
 —
 —
 —
 2,926,083
Deferred income taxes—
 570,933
 64,201
 (61,210) 573,924
Contracts payable for broadcast rights—
 232,850
 425
 —
 233,275
Intercompany payables8,121,544
 2,176,908
 708,250
 (11,006,702) —
Other397,559
 121,497
 24,163
 —
 543,219
Total non-current liabilities11,445,186
 3,102,188
 797,039
 (11,067,912) 4,276,501
Total Liabilities11,543,025
 3,451,352
 801,829
 (11,067,912) 4,728,294
          
Shareholders’ Equity (Deficit)         
Common Stock102
 —
 —
 —
 102
Treasury Stock(632,194) —
 —
 —
 (632,194)
Additional paid-in-capital4,031,233
 8,307,898
 913,902
 (9,221,800) 4,031,233
Retained earnings (deficit)223,734
 1,868,740
 (130,052) (1,738,688) 223,734
Accumulated other comprehensive (loss) income(104,967) (1,230) (63) 1,293
 (104,967)
Total Tribune Media Company shareholders’ equity (deficit)3,517,908
 10,175,408
 783,787
 (10,959,195) 3,517,908
Noncontrolling interests—
 —
 5,189
 —
 5,189
Total shareholders’ equity (deficit)3,517,908
 10,175,408
 788,976
 (10,959,195) 3,523,097
Total Liabilities and Shareholders’ Equity (Deficit)$15,060,933
 $13,626,760
 $1,590,805
 $(22,027,107) $8,251,391


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEETS
AS OF DECEMBER 31, 2017
(In thousands of dollars)
 Parent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company Consolidated
Assets         
Current Assets         
Cash and cash equivalents$670,302
 $1,501
 $1,882
 $—
 $673,685
Restricted cash and cash equivalents17,566
 —
 —
 —
 17,566
Accounts receivable, net143
 418,950
 1,002
 —
 420,095
Broadcast rights—
 126,668
 2,506
 —
 129,174
Income taxes receivable—
 18,274
 —
 —
 18,274
Prepaid expenses8,647
 11,245
 266
 —
 20,158
Other12,487
 1,552
 —
 —
 14,039
Total current assets709,145
 578,190
 5,656
 —
 1,292,991
Properties         
Property, plant and equipment58,622
 557,394
 57,666
 —
 673,682
Accumulated depreciation(29,505) (196,644) (7,238) —
 (233,387)
Net properties29,117
 360,750
 50,428
 —
 440,295
          
Investments in subsidiaries10,378,948
 74,610
 —
 (10,453,558) —
          
Other Assets         
Broadcast rights—
 133,567
 116
 —
 133,683
Goodwill—
 3,220,300
 8,688
 —
 3,228,988
Other intangible assets, net—
 1,534,761
 78,904
 —
 1,613,665
Assets held for sale—
 38,900
 —
 —
 38,900
Investments850
 1,258,851
 22,090
 —
 1,281,791
Intercompany receivables2,520,570
 6,527,083
 411,059
 (9,458,712) —
Other65,743
 135,373
 376
 (62,477) 139,015
Total other assets2,587,163
 12,848,835
 521,233
 (9,521,189) 6,436,042
Total Assets$13,704,373
 $13,862,385
 $577,317
 $(19,974,747) $8,169,328






TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEETS
AS OF DECEMBER 31, 2017
(In thousands of dollars)
 Parent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company Consolidated
Liabilities and Shareholders’ Equity (Deficit)         
Current Liabilities         
Accounts payable$24,529
 $22,487
 $1,303
 $—
 $48,319
Income taxes payable—
 36,252
 —
 —
 36,252
Contracts payable for broadcast rights—
 250,553
 2,691
 —
 253,244
Deferred revenue—
 11,074
 868
 —
 11,942
Interest payable30,525
 —
 —
 —
 30,525
Deferred spectrum auction proceeds—
 172,102
 —
 —
 172,102
Other44,817
 57,063
 3
 —
 101,883
Total current liabilities99,871
 549,531
 4,865
 —
 654,267
          
Non-Current Liabilities         
Long-term debt2,919,185
 —
 —
 —
 2,919,185
Deferred income taxes—
 485,608
 85,043
 (62,477) 508,174
Contracts payable for broadcast rights—
 300,269
 151
 —
 300,420
Intercompany payables7,044,972
 2,148,695
 265,045
 (9,458,712) —
Other423,209
 121,870
 25,023
 —
 570,102
Total non-current liabilities10,387,366
 3,056,442
 375,262
 (9,521,189) 4,297,881
Total Liabilities10,487,237
 3,605,973
 380,127
 (9,521,189) 4,952,148
          
Shareholders’ Equity (Deficit)         
Common Stock101
 —
 —
 —
 101
Treasury Stock(632,194) —
 —
 —
 (632,194)
Additional paid-in-capital4,011,530
 9,040,065
 202,942
 (9,243,007) 4,011,530
Retained (deficit) earnings(114,240) 1,219,023
 (6,516) (1,212,507) (114,240)
Accumulated other comprehensive (loss) income(48,061) (2,676) 720
 1,956
 (48,061)
Total Tribune Media Company shareholders’ equity (deficit)3,217,136
 10,256,412
 197,146
 (10,453,558) 3,217,136
Noncontrolling interests—
 —
 44
 —
 44
Total shareholders’ equity (deficit)3,217,136
 10,256,412
 197,190
 (10,453,558) 3,217,180
Total Liabilities and Shareholders’ Equity (Deficit)$13,704,373
 $13,862,385
 $577,317
 $(19,974,747) $8,169,328


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEETS
AS OF DECEMBER 31, 2016
(In thousands of dollars)
Parent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company ConsolidatedParent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company Consolidated
Assets                  
Current Assets                  
Cash and cash equivalents$574,638
 $720
 $2,300
 $—
 $577,658
$670,302
 $1,501
 $1,882
 $—
 $673,685
Restricted cash and cash equivalents17,566
 —
 —
 —
 17,566
17,566
 —
 —
 —
 17,566
Accounts receivable, net198
 428,254
 660
 —
 429,112
143
 417,847
 2,105
 —
 420,095
Broadcast rights—
 155,266
 2,551
 —
 157,817
—
 126,668
 2,506
 —
 129,174
Income taxes receivable—
 9,056
 —
 —
 9,056
—
 18,274
 —
 —
 18,274
Current assets of discontinued operations—
 37,300
 25,305
 —
 62,605
Prepaid expenses11,640
 24,074
 148
 —
 35,862
8,647
 11,245
 266
 —
 20,158
Other4,894
 1,729
 1
 —
 6,624
12,487
 1,552
 —
 —
 14,039
Total current assets608,936
 656,399
 30,965
 —
 1,296,300
709,145
 577,087
 6,759
 —
 1,292,991
Properties                  
Property, plant and equipment55,529
 547,601
 107,938
 —
 711,068
58,622
 557,394
 57,666
 —
 673,682
Accumulated depreciation(21,635) (159,472) (6,041) —
 (187,148)(29,505) (196,644) (7,238) —
 (233,387)
Net properties33,894
 388,129
 101,897
 —
 523,920
29,117
 360,750
 50,428
 —
 440,295
                  
Investments in subsidiaries10,502,544
 106,486
 —
 (10,609,030) —
10,378,948
 74,610
 —
 (10,453,558) —
                  
Other Assets                  
Broadcast rights—
 153,374
 83
 —
 153,457
—
 133,567
 116
 —
 133,683
Goodwill—
 3,220,300
 7,630
 —
 3,227,930
—
 3,220,300
 8,688
 —
 3,228,988
Other intangible assets, net—
 1,729,829
 89,305
 —
 1,819,134
—
 1,534,761
 78,904
 —
 1,613,665
Non-current assets of discontinued operations—
 514,200
 93,953
 —
 608,153
Assets held for sale—
 17,176
 —
 —
 17,176
—
 38,900
 —
 —
 38,900
Investments19,079
 1,637,909
 17,895
 —
 1,674,883
850
 1,239,392
 41,549
 —
 1,281,791
Intercompany receivables2,326,261
 5,547,542
 358,834
 (8,232,637) —
2,520,570
 5,557,638
 1,380,504
 (9,458,712) —
Intercompany loan receivable27,000
 —
 —
 (27,000) —
Other51,479
 75,191
 2,707
 (49,279) 80,098
65,743
 135,316
 433
 (62,477) 139,015
Total other assets2,423,819
 12,895,521
 570,407
 (8,308,916) 7,580,831
2,587,163
 11,859,874
 1,510,194
 (9,521,189) 6,436,042
Total Assets$13,569,193
 $14,046,535
 $703,269
 $(18,917,946) $9,401,051
$13,704,373
 $12,872,321
 $1,567,381
 $(19,974,747) $8,169,328




TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEETS
AS OF DECEMBER 31, 20162017
(In thousands of dollars)

Parent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company ConsolidatedParent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company Consolidated
Liabilities and Shareholders’ Equity (Deficit)                  
Current Liabilities                  
Accounts payable$29,827
 $29,703
 $1,023
 $—
 $60,553
$24,529
 $22,487
 $1,303
 $—
 $48,319
Debt due within one year15,921
 —
 4,003
 —
 19,924
Income taxes payable—
 21,130
 36
 —
 21,166
—
 36,252
 —
 —
 36,252
Contracts payable for broadcast rights—
 238,497
 2,758
 —
 241,255
—
 250,553
 2,691
 —
 253,244
Deferred revenue—
 13,593
 97
 —
 13,690
—
 11,074
 868
 —
 11,942
Interest payable30,301
 —
 4
 —
 30,305
30,525
 —
 —
 —
 30,525
Current liabilities of discontinued operations—
 44,763
 9,521
 —
 54,284
Deferred spectrum auction proceeds—
 172,102
 —
 —
 172,102
Other38,867
 70,589
 220
 —
 109,676
44,817
 57,063
 3
 —
 101,883
Total current liabilities114,916
 418,275
 17,662
 —
 550,853
99,871
 549,531
 4,865
 —
 654,267
                  
Non-Current Liabilities                  
Long-term debt3,380,860
 —
 10,767
 —
 3,391,627
2,919,185
 —
 —
 —
 2,919,185
Intercompany loan payable—
 27,000
 —
 (27,000) —
Deferred income taxes—
 871,923
 161,604
 (49,279) 984,248
—
 496,895
 73,756
 (62,477) 508,174
Contracts payable for broadcast rights—
 314,755
 85
 —
 314,840
—
 300,269
 151
 —
 300,420
Intercompany payables6,065,424
 1,912,259
 254,954
 (8,232,637) —
7,044,972
 1,735,112
 678,628
 (9,458,712) —
Other468,227
 50,239
 20
 —
 518,486
423,209
 121,870
 25,023
 —
 570,102
Non-current liabilities of discontinued operations—
 86,517
 8,797
 —
 95,314
Total non-current liabilities9,914,511
 3,262,693
 436,227
 (8,308,916) 5,304,515
10,387,366
 2,654,146
 777,558
 (9,521,189) 4,297,881
Total Liabilities10,029,427
 3,680,968
 453,889
 (8,308,916) 5,855,368
10,487,237
 3,203,677
 782,423
 (9,521,189) 4,952,148
                  
Shareholders’ Equity (Deficit)                  
Common Stock100
 —
 —
 —
 100
101
 —
 —
 —
 101
Treasury Stock(632,207) —
 —
 —
 (632,207)(632,194) —
 —
 —
 (632,194)
Additional paid-in-capital4,561,760
 9,486,179
 289,818
 (9,775,997) 4,561,760
4,011,530
 8,318,503
 924,504
 (9,243,007) 4,011,530
Retained (deficit) earnings(308,105) 888,088
 (33,961) (854,127) (308,105)(114,240) 1,351,079
 (138,572) (1,212,507) (114,240)
Accumulated other comprehensive (loss) income(81,782) (8,700) (12,394) 21,094
 (81,782)(48,061) (938) (1,018) 1,956
 (48,061)
Total Tribune Media Company shareholders’ equity (deficit)3,539,766
 10,365,567
 243,463
 (10,609,030) 3,539,766
3,217,136
 9,668,644
 784,914
 (10,453,558) 3,217,136
Noncontrolling interests—
 —
 5,917
 —
 5,917
—
 —
 44
 —
 44
Total shareholders’ equity (deficit)3,539,766
 10,365,567
 249,380
 (10,609,030) 3,545,683
3,217,136
 9,668,644
 784,958
 (10,453,558) 3,217,180
Total Liabilities and Shareholders’ Equity (Deficit)$13,569,193
 $14,046,535
 $703,269
 $(18,917,946) $9,401,051
$13,704,373
 $12,872,321
 $1,567,381
 $(19,974,747) $8,169,328




TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2018
(In thousands of dollars)
 Parent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company Consolidated
Net cash (used in) provided by operating activities$(134,808) $607,150
 $(3,137) $—
 $469,205
          
Investing Activities         
Capital expenditures(8,944) (63,480) (3,764) —
 (76,188)
Spectrum repack reimbursements—
 11,276
 —
 —
 11,276
Proceeds from sales of real estate and other assets—
 6,604
 52,549
 —
 59,153
Proceeds from sales of investments—
 —
 15,232
 —
 15,232
Other, net—
 (112) 1,613
 —
 1,501
Net cash (used in) provided by investing activities(8,944) (45,712) 65,630
 —
 10,974
          
Financing Activities         
Payments of dividends(87,709) —
 —
 —
 (87,709)
Tax withholdings related to net share settlements of share-based awards(6,386) —
 —
 —
 (6,386)
Proceeds from stock option exercises1,838
 —
 —
 —
 1,838
Contributions from noncontrolling interests, net—
 —
 475
 —
 475
Change in intercompany receivables and payables and intercompany contributions (1)623,709
 (562,035) (61,674) —
 —
Net cash provided by (used in) financing activities531,452
 (562,035) (61,199) —
 (91,782)
          
Net Increase (decrease) in Cash, Cash Equivalents and Restricted Cash387,700
 (597) 1,294
 —
 388,397
Cash, cash equivalents and restricted cash, beginning of year687,868
 1,501
 1,882
 —
 691,251
Cash, cash equivalents and restricted cash, end of year$1,075,568
 $904
 $3,176
 $—
 $1,079,648
          
Cash, Cash Equivalents and Restricted Cash are Comprised of:         
Cash and cash equivalents1,058,961
 904
 3,176
 —
 1,063,041
Restricted cash and cash equivalents16,607
 —
 —
 —
 16,607
Total cash, cash equivalents and restricted cash$1,075,568
 $904
 $3,176
 $—
 $1,079,648
(1)Excludes the impact of a $26 million non-cash settlement of intercompany balances upon dissolution of certain Non-Guarantor subsidiaries.




TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2017
(In thousands of dollars)
Parent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company ConsolidatedParent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company Consolidated
Net cash (used in) provided by operating activities$(160,529) $391,686
 $(8,655) $—
 $222,502
$(160,529) $357,107
 $26,007
 $—
 $222,585
                  
Investing Activities                  
Capital expenditures(8,943) (52,784) (5,105) —
 (66,832)(8,943) (52,784) (5,105) —
 (66,832)
Investments—
 (65) (5,000) —
 (5,065)
Spectrum repack reimbursements—
 984
 —
 —
 984
Net proceeds from the sale of business574,817
 (5,249) (11,775) —
 557,793
574,817
 (8,168) (12,162) —
 554,487
Proceeds from FCC spectrum auction—
 172,102
 —
 —
 172,102
—
 172,102
 —
 —
 172,102
Sale of partial interest of equity method investment—
 142,552
 —
 —
 142,552
Proceeds from sales of real estate and other assets—
 61,345
 83,119
 —
 144,464
—
 61,345
 83,119
 —
 144,464
Proceeds from sales of investments5,769
 —
 —
 —
 5,769
5,769
 —
 142,552
 —
 148,321
Distributions from equity investment—
 3,768
 —
 —
 3,768
Other—
 984
 805
 —
 1,789
Distributions from equity investments—
 —
 3,768
 —
 3,768
Other, net—
 (65) (4,195) —
 (4,260)
Net cash provided by investing activities571,643
 322,653
 62,044
 —
 956,340
571,643
 173,414
 207,977
 —
 953,034
                  
Financing Activities                  
Long-term borrowings202,694
 —
 —
 —
 202,694
202,694
 —
 —
 —
 202,694
Repayments of long-term debt(688,708) —
 (14,819) —
 (703,527)(688,708) —
 (14,819) —
 (703,527)
Long-term debt issuance costs(1,689) —
 —
 —
 (1,689)(1,689) —
 —
 —
 (1,689)
Payments of dividends(586,336) —
 —
 —
 (586,336)(586,336) —
 —
 —
 (586,336)
Tax withholdings related to net share settlements of share-based awards(8,774) —
 —
 —
 (8,774)(8,774) —
 —
 —
 (8,774)
Proceeds from stock option exercises11,317
 —
 —
 —
 11,317
11,317
 —
 —
 —
 11,317
Distributions to noncontrolling interests, net—
 —
 (9,251) —
 (9,251)—
 —
 (9,251) —
 (9,251)
Change in intercompany receivables and payables and intercompany contributions (1)756,046
 (717,365) (38,681) —
 —
Change in intercompany receivables and payables and intercompany contributions(1)756,046
 (536,398) (219,648) —
 —
Net cash used in financing activities(315,450) (717,365) (62,751) —
 (1,095,566)(315,450) (536,398) (243,718) —
 (1,095,566)
                  
Net Increase (Decrease) in Cash and Cash Equivalents95,664
 (3,026) (9,362) —
 83,276
Cash and cash equivalents, beginning of year574,638
 4,527
 11,244
 —
 590,409
Cash and cash equivalents, end of year$670,302
 $1,501
 $1,882
 $—
 $673,685
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash95,664
 (5,877) (9,734) —
 80,053
Cash, cash equivalents and restricted cash, beginning of year592,204
 7,378
 11,616
 —
 611,198
Cash, cash equivalents and restricted cash, end of year$687,868
 $1,501
 $1,882
 $—
 $691,251
         
Cash, Cash Equivalents and Restricted Cash are Comprised of:         
Cash and cash equivalents$670,302
 $1,501
 $1,882
 $—
 $673,685
Restricted cash and cash equivalents17,566
 —
 —
 —
 17,566
Cash, cash equivalents and restricted cash, end of year$687,868
 $1,501
 $1,882
 $—
 $691,251
 
(1)Excludes the impact of a $54 million non-cash settlement of intercompany balances upon dissolution of certain Guarantor subsidiaries.and Non-Guarantor subsidiaries included in the Gracenote Sale.



TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2016
(In thousands of dollars)
Parent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company ConsolidatedParent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company Consolidated
Net cash (used in) provided by operating activities$(4,987) $395,861
 $(106,711) $—
 $284,163
$(5,690) $399,917
 $(110,062) $—
 $284,165
                  
Investing Activities                  
Capital expenditures(10,199) (82,043) (7,417) —
 (99,659)(10,199) (82,043) (7,417) —
 (99,659)
Investments(850) (2,643) (2,500) —
 (5,993)
Proceeds from sales of real estate and other assets—
 507,011
 681
 —
 507,692
—
 507,011
 681
 —
 507,692
Other—
 297
 —
 —
 297
(850) (2,613) (2,530) —
 (5,993)
Intercompany dividends3,326
 —
 —
 (3,326) —
3,326
 —
 —
 (3,326) —
Net cash (used in) provided by investing activities(7,723) 422,622
 (9,236) (3,326) 402,337
(7,723) 422,355
 (9,266) (3,326) 402,040
                  
Financing Activities                  
Repayments of long-term debt(23,792) —
 (4,050) —
 (27,842)(23,792) —
 (4,050) —
 (27,842)
Long-term debt issuance costs(736) —
 —
 —
 (736)(736) —
 —
 —
 (736)
Payments of dividends(90,296) —
 —
 —
 (90,296)(90,296) —
 —
 —
 (90,296)
Tax withholdings related to net share settlements of share-based awards(4,553) —
 —
 —
 (4,553)(4,553) —
 —
 —
 (4,553)
Common stock repurchases(232,065) —
 —
 —
 (232,065)(232,065) —
 —
 —
 (232,065)
Contributions from noncontrolling interests—
 —
 393
 —
 393
—
 —
 393
 —
 393
Settlements of contingent consideration, net—
 (750) (2,886) —
 (3,636)—
 (750) (2,886) —
 (3,636)
Intercompany dividends—
 (3,326) —
 3,326
 —
—
 —
 (3,326) 3,326
 —
Change in intercompany receivables and payables (1)703,282
 (822,934) 119,652
 —
 —
703,956
 (827,361) 123,405
 —
 —
Net cash provided by (used in) financing activities351,840
 (827,010) 113,109
 3,326
 (358,735)352,514
 (828,111) 113,536
 3,326
 (358,735)
                  
Net Increase (Decrease) in Cash and Cash Equivalents339,130
 (8,527) (2,838) —
 327,765
Cash and cash equivalents, beginning of year235,508
 13,054
 14,082
 —
 262,644
Cash and cash equivalents, end of year$574,638
 $4,527
 $11,244
 $—
 $590,409
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash339,101
 (5,839) (5,792) —
 327,470
Cash, cash equivalents and restricted cash, beginning of year253,103
 13,217
 17,408
 —
 283,728
Cash, cash equivalents and restricted cash, end of year$592,204
 $7,378
 $11,616
 $—
 $611,198
                  
Cash and Cash Equivalents are Comprised of:         
Cash, Cash Equivalents and Restricted Cash are Comprised of:         
Cash and cash equivalents$574,638
 $720
 $2,300
 $—
 $577,658
$574,638
 $720
 $2,300
 $—
 $577,658
Cash and cash equivalents classified as discontinued operations—
 3,807
 8,944
 —
 12,751
—
 3,807
 8,944
 —
 12,751
Cash and cash equivalents, end of year$574,638
 $4,527
 $11,244
 $—
 $590,409
Restricted cash and cash equivalents17,566
 —
 —
 —
 17,566
Restricted cash and cash equivalents classified as discontinued operations—
 2,851
 372
 —
 3,223
Total cash, cash equivalents and restricted cash$592,204
 $7,378
 $11,616
 $—
 $611,198
 
(1)Excludes the impact of a $56 million non-cash settlement of intercompany balances upon dissolution of certain Guarantor subsidiaries.


TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2015
(In thousands of dollars)
 Parent (Tribune Media Company) Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Tribune Media Company Consolidated
Net cash (used in) provided by operating activities$(47,422) $190,327
 $(116,961) $—
 $25,944
          
Investing Activities         
Capital expenditures(20,775) (64,318) (3,991) —
 (89,084)
Investments(15,000) (542) (7,500) —
 (23,042)
Acquisitions, net of cash acquired—
 (5,109) (69,850) —
 (74,959)
Proceeds from sales of real estate and other assets—
 4,930
 —
 —
 4,930
Proceeds from sales of investments103
 36,579
 8,300
 —
 44,982
Distributions from equity investment—
 10,328
 —
 —
 10,328
Other—
 1,112
 —
 —
 1,112
Net cash used in investing activities(35,672) (17,020) (73,041) —
 (125,733)
          
Financing Activities         
Long-term borrowings1,100,000
 —
 —
 —
 1,100,000
Repayments of long-term debt(1,110,159) (54) (4,049) —
 (1,114,262)
Long-term debt issuance costs(20,202) —
 —
 —
 (20,202)
Payments of dividends(719,919) —
 —
 —
 (719,919)
Tax withholdings related to net share settlements of share-based awards(4,421) —
 —
 —
 (4,421)
Proceeds from stock option exercises166
 —
 —
 —
 166
Common stock repurchases(339,942) —
 —
 —
 (339,942)
Contributions from noncontrolling interests—
 —
 5,524
 —
 5,524
Settlements of contingent consideration, net—
 4,088
 (2,914) —
 1,174
Change in excess tax benefits from stock-based awards(868) —
 —
 —
 (868)
Change in intercompany receivables and payables(19,441) (176,491) 195,932
 —
 —
Net cash (used in) provided by financing activities(1,114,786) (172,457) 194,493
 —
 (1,092,750)
          
Net (Decrease) Increase in Cash and Cash Equivalents(1,197,880) 850
 4,491
 —
 (1,192,539)
Cash and cash equivalents, beginning of year1,433,388
 12,204
 9,591
 —
 1,455,183
Cash and cash equivalents, end of year$235,508
 $13,054
 $14,082
 $—
 $262,644
          
Cash and Cash Equivalents are Comprised of:         
Cash and cash equivalents$235,508
 $7,011
 $5,301
 $—
 $247,820
Cash and cash equivalents classified as discontinued operations—
 6,043
 8,781
 —
 14,824
Cash and cash equivalents, end of year$235,508
 $13,054
 $14,082
 $—
 $262,644



TRIBUNE MEDIA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 23:20: SUBSEQUENT EVENTS

InOn January 2018,22, 2019, the Company surrendered the spectrumsold its 5% ownership interest in CEV LLC for pretax proceeds of television stations whose FCC licenses were held for sale$107.5 million, as of December 31, 2017 as a result of the FCC spectrum auction andfurther described in Note 6. The Company expects to recognize a net pretax gain of $133$86 million in the first quarter of 2018.2019. As a result of the sale, the total remaining deferred tax liability of $69 million associated with the Chicago Cubs Transactions will become currently payable in 2019.

F-104F-86